The Effect of Custemor Relationship Marketing On Customer Retent

DEBRE BERHAN UNIVERSITY
COLLEGE OF BUSINESS AND ECONOMICS
DEPARTMENT OF MANAGEMENT
MASTERS OF BUSINESS ADMINISTRATION
THE EFFECT OF CUSTOMER RELATIONSHIP MARKETING
ON CUSTOMER RETENTION: THE CASE OF COMMERCIAL BANK OF

ETHIOPIA DEBREBERHAN DISTRICT
BY
ELIAS GETACHEW
ID.NO. PGE 266/11
ADVISOR: SHIEFERA BEKELE (PhD)

JUNE, 2021
DEBRE BERHAN UNIVERSITY
COLLEGE OF BUSINESS AND ECONOMICS
DEPARTMENT OF MANAGEMENT
MASTERS OF BUSINESS AND ECONOMICS
THE EFFECT OF CUSTOMER RELATIONSHIP MARKETING
ON CUSTOMER RETENTION: THE CASE OF COMMERCIAL BANK OF

ETHIOPIA DEBREBERHAN DISTRICT
A Thesis Submitted to the Department of Management, College of Business and

Economics, of Master‟s Degree in Business Administration
Debre Berhan University
JUNE, 2021
DEBRE BERHAN, ETHIOPIA

DECLARATION
I, the undersigned, declare that this thesis entitled “The effect of customer relationship marketing
on customer retention: The case of commercial bank of Ethiopia DerbreBrehan district., is my
original work and has not been presented for a Master‟s Degree in any other university or
organization, and that all sources of materials used for the thesis have been duly acknowledged.
Declared by: Elias Getachew

Date: __________________
Signature_________________
Advisor Name: Shifera Bekele (PhD)
Signature: __________________
Date: ____________________
LETTER OF CERTIFICATION
This is to certify that Elias Getachew carried out this research on the topic entitled I, the
undersigned, declare that this thesis entitled “The effect of customer relationship marketing on
customer retention: a case study of commercial bank of Ethiopia DebreBrehan district” is my
original work and has not been presented for a Master‟s Degree in any other university or
organization, and that all sources of materials used for the thesis have been duly acknowledged.
This work is original in nature and is suitable for submission for the award of the Master of
Business Administration.
Approved by:
Internal Examiner: ____________ Signature: __________ Date: _____________
External Examiner: ____________ Signature: _________ Date: _____________
Advisor: __________________ Signature: ___________ Date: ____________
ii
ACKNOWLEDGMENTS
First of all, I am grateful to the Almighty God for helping me and enabling me to carry out this
thesis. I would like to gratefully and sincerely thank my Advisor Shifera Bekele (PhD) for his
guidance, advice, understanding and encouragement from the inception up to completion of this
thesis. Furthermore, my deepest gratitude goes to my wife Freselam Abera , my friend Getachew
Yilema and also Mikias Nigussie because of they are always my source of strength and happiness.
I would like to thank the all staff members for providing me the necessary data‟s, information,
documents & sacrificing time for this thesis. At last but not least, to my beloved family, I dedicate
this work to you too.
iii
ACRONYMS
ATM - Automated Teller Machine
CATS-CPC- Customer Account and Transaction Service-Central Processing Center
CBE - Commercial Bank of Ethiopia
CH-Conflict handling
CO-Commitment
CM-Communication
CRM - Customer Relationship Marketing
CS-Customer Satisfaction
ICRM - Integrated Customer Relationship Management
POS- Point of Sales
RM - Relationship Marketing
SPSS- Statistical Package for the Social Sciences
SERVQUAL - Service Quality Measurement Tool
TR-Trust
iv
Table of content
Contents page
DECLARATION ..................................................................................................................................... i
LETTER OF CERTIFICATION .............................................................................................................. ii
ACKNOWLEDGMENTS ...................................................................................................................... iii
ACRONYMS ......................................................................................................................................... iv
Table of content ...................................................................................................................................... v
List of figure ......................................................................................................................................... viii
ABSTRACT............................................................................................................................................ x
CHAPTER ONE ......................................................................................................................................... 1
1. Introduction ........................................................................................................................................ 1
1.1. Background of the Study ........................................................................................................... 1
1.2. Statement of the Problem......................................................................................................... 5
1.3. Research Questions .................................................................................................................. 7
1.4. Objective of the Study............................................................................................................... 8
1.4.1. General Objective .................................................................................................................. 8
1.4.2. Specific Objectives................................................................................................................. 8
1.5. Significance of the Study ........................................................................................................... 8
1.6. Scope of the Study .................................................................................................................... 9
1.7. Limitation of the Study.............................................................................................................. 9
CHAPTER TWO .................................................................................................................................. 10
2. LITERATURE REVIEW .......................................................................................................................... 10
2.1 Introduction............................................................................................................................. 10
2.2 The Social Exchange Theory ..................................................................................................... 10
2.3 Relationship Marketing Theory ................................................................................................ 11
2.4 Customer Retention in the Banking Industry ............................................................................ 12
2.4.1 Commitment ......................................................................................................................... 13
2.4.2 Conflict Handling.................................................................................................................. 13
2.4.3 Customer Satisfaction ........................................................................................................... 15
2.4.4 Communication ..................................................................................................................... 15
2.4.5 Trust ..................................................................................................................................... 16
v
2.4.6 Conceptual Framework ......................................................................................................... 17
CHAPTER THREE ............................................................................................................................... 19
3. RESEARCH METHODOLOGY ....................................................................................................... 19
3.1. Research Approach ................................................................................................................. 19
3.2 Research Design....................................................................................................................... 19
3.3 Sampling Design ...................................................................................................................... 20
3.3.1 Target Population .................................................................................................................. 20
3.3.2 Sampling Technique.............................................................................................................. 20
3.3.3 Sample Size .......................................................................................................................... 21
3.3.4 Source of Data ..................................................................................................................... 22
3.3.5 Primary source of data ........................................................................................................... 22
3.3.6 Secondary source of data ....................................................................................................... 22
3.3.7 Research Instrument .............................................................................................................. 23
3.3.8 Method of Data Analysis ....................................................................................................... 23
3.3.9 Descriptive Statistical Analysis ............................................................................................. 23
3.3.10 Inferential Statistical Analysis ............................................................................................. 23
3.3.11 Validity and Reliability ....................................................................................................... 25
3.3.12 Reliability Testing ............................................................................................................... 25
3.3.13 Validity ............................................................................................................................... 25
3.3.14 Ethical Consideration .......................................................................................................... 25
CHAPTER FOUR ................................................................................................................................. 26
4. DISCUSSIONS AND FINDINGS .................................................................................................... 26
4.1. Respondents Profile ................................................................................................................ 26
4.2. Reliability Analysis .................................................................................................................. 29
4.3. Analysis of Correlation ............................................................................................................ 30
4.4. Multiple Regression Analysis ................................................................................................... 33
4.4.1 Regression Analysis assumption test ..................................................................................... 33
4.4.3 Diagnosis Tests/Assumptions ................................................................................................ 33
4.4.3. Model Summary................................................................................................................... 35
4.4.4 Multi Co linearity Test .......................................................................................................... 35
4.5.1 ANOVA Model Fit ............................................................................................................... 36
4.4.6 Hypothesis Testing ................................................................................................................ 38
vi
4.4.7. DISCUSTION ...................................................................................................................... 40
CHAPTER FIVE ................................................................................................................................... 43
5. SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS ................................ 43
5.1 Summary of Major Findings ..................................................................................................... 43
5.3 Conclusions.............................................................................................................................. 44
5.4 Recommendations ................................................................................................................... 45
5.4 DIRECTIONS FOR FUTURES STUDY ............................................................................................ 47
References............................................................................................................................................. 48
APPENDIX ........................................................................................................................................... 55
vii
List of figure
List of figure Page No
Figure 1 Conceptual framework ........................................................................................................ 17
Figure 2 Normality tests residuals ..................................................................................................... 34
Figure 3 Scatter plot assumption measures ........................................................................................ 35
viii
List of tables
Table 1 Target population .................................................................................................................. 20
Table 2 Sample size determination .................................................................................................... 21
Table 3 Gender of the respondents .................................................................................................... 26
Table 4 Age of respondent ................................................................................................................. 27
Table 5 Education .............................................................................................................................. 28
Table 6 Usage of banking service ...................................................................................................... 28
Table 7 Distribution by type of account ............................................................................................ 29
Table 8 Reliability test and validity ................................................................................................... 29
Table 9 Summary of descriptive statistics mean and standard deviation .......................................... 30
Table 10 Correlations ......................................................................................................................... 31
Table 11 Coefficients ......................................................................................................................... 35
Table 12 Model summary .................................................................................................................. 36
Table 13 ANOVA .............................................................................................................................. 37
Table 14 Regression result CR components and customer retention ................................................ 37
ix
ABSTRACT
This study emphasizes the effects of customer relationship marketing on customer retention in case
of commercial bank of east Addis Ababa district on premium customer by considering five
independent variables; Trust, commitment, communication, conflict handling and customer
satisfaction. The study was performed by employing quantitative research approaches. To reveal
the determinants of customer retention of customer relationship marketing, descriptive and
explanatory research design were used. For selecting sample respondents’ purposive sampling was
used. The data analysis was performed by inferential and descriptive statistics. The data analysis
was processed by SPSS statistical software version 25. The total sample size was 200 and
200questionnaires were distributed within five branches. Out of which, 200 questionnaires were
returned All determinant factors of customer relationship marketing have a positive
correlation with customer retention. A linear combination of all the independent variables
considered under the study predicts the variance in the dependent variable customer retention.
The multiple regression result showed that, customer handling has maximum impact and trust has
minimum impact on customer retention. The r esearcher highly recommended that CBE Debre
Berhan district need to improve their practice of relationship marketing in order to retain
customers in all levels era of communication, conflict handling, commitment, customer satisfaction
and trust.
Key Words:- Customer Relationship ,marketing, customer retention and Commercial Bank of
Ethiopia(CBE)
x
CHAPTER ONE
1. Introduction
1.1. Background of the Study
During the 20th century relationship marketing began to dominate the marketing field. At
that time, the relationship marketing became a major issue in marketing and managing
business (Egan, 2001). Relationship marketing has been developed over the years as stimulating
area of marketing that emphasis on creating and maintaining long-term relationships with customers
and other parties. In the competitive market, organizations are not only concerned on
providing quality products or services but the key concern is to communicate with
customers and understand their requirement to satisfy and retain them with a profitable
relationship (Tseng, 2007).Relationship marketing strategy plays a decisive role in terracing and
retaining customers, especially in a service industry because of the intangible nature of service
and high level of interaction with customers. Nowadays most organizations are implementing
customer relationship marketing as a strategy to gather and use data for increasing customer
value, company profit and to improve customer satisfaction and retention (Aaltonen, 2004).Today,
we live in a competitive world where customer demands from businessmen or organizations
products/service more than before. No business can live on without satisfied customers unless it
is a government-owned monopoly. It must be noticed that customers' needs and demands is
increasing rapidly. Therefore companies are looking for strategies to go beyond the needs and
expectations of their customers. During the past years, a new viewpoint has been formed in this
respect and that is customer relationship management.
If this new viewpoint is understood and enacted properly it will change all parts of an
organization (Hasanzadeh, and Kazemnejad, 2010). In view of customer importance as one of the
bases of an organization's life and CRM emphasis on service improvement, customer
satisfaction, costs reduction, mutual relationship between company and even millions of
customers. Customers‟ place and value is very vital in today's competitive atmosphere and
therefore marketing experts encourage companies to look for newer and more effective methods.
Products variety presents providing many choices for customers. Companies have learned that
losing one customer is not only losing one sale item, but also it means losing all purchases of the
customer that he/she could have made during his life, so company should emphasis on retaining its
1
customers (Kotler and Armestrong, 2002).In addition, businesses follow different marketing
strategies to survive in the highly in the competitive world by identifying, Acquiring and
Retaining most economically important customers and developing ongoing and long-lasting
relationship with them (Roger, 2005).
In the competitive marketing environment, customer relationship marketing is critical to a

company‟s profitability and long-term success (Russell,2000) to become so customer focused, all
managers, professionals and executives of marketing as well as employees of the organization must
understand how to build profitability relationship with each customer and to make
managerial designs‟ every day designed to increase the value of both the company and customer
that will grow their value from the customer based strategy (Peppers and Rogerr,
1993).Customer relationship marketing is to establish long-lasting relationship with the most
important customer and generate increased customer satisfaction, retention, loyalty. Therefore,
developing a better understanding of existing customer allows companies to collaborate and
respond more effectively to significantly improve retention rate (Ronger, 2005).Currently;
various companies begin to establish their network to new as well as existing customer to
increase ongoing loge-term customer satisfaction by implementing the principle of relationship
marketing via strategic and technology-based customer relationship management application.
Customer relationship marketing is important element of organization help them assess customer
satisfaction, retention, loyalty and profitability in terms of repeat purchases, money spent, and
longevity (Chen &Popovich, 2003).Walsh et al. (2004) viewed that relationship marketing as
a strategy to attract, maintain and enhance customer relationships in order to acquiring new
customers and retaining existing customers. It is a core strategy used by firms to establish,
maintain and enhance profitable relationships with clients, while ensuring benefits for both the
firm and its clients. Based on the empirical literature evidences, the fundamental customer
relationship marketing variables that can possibly influence customer loyalty and retention
include bonding, competency, social and financial bonding, empowerment, conflict handling
mechanisms, trust, commitment, ethical behavior and technology. Each of these variables
comprises organizational activities, actions and methods that are necessary to establish and maintain
organization client relationships and thus possibly ensure long-term relationships and higher
customer retention levels.
Therefore, the correct adaptation of these variables in an organization is vital to ensure customer
loyalty that influences customer‟s commitment and decision to repeatedly re-buy or re-patronize
product and service provided.
After the period of industrialization the increase in competitive intensity is forcing marketers to be
concerned with customer retention since retaining customer is less expensive and perhaps a more
sustainable competitive advantage than acquiring new customer‟s. As several studies have indicated
markets are realizing that is costs less to retain customer that to compete for new ones (Rosrbberg &
Czepiel, 1999) though stressing on the importance of customer retention through highlighting that
retaining of 5 additional percent of the company‟s customer can increase profits by almost
100 percent (Reichheld and Sasser,1990) cited by Luliia (2011). The aforementioned authors
also emphasize that 5 percent decrease in defection can lead to 85 percent increase in
profits for banking sphere industry : the goal of customer relationship marketing is to create
as affective customer relationships as possible and develop future competences within the
company although satisfied opinions make it easier to continuously improve the competences
of company .The above mentioned is not enough to meet the purpose of customer relationship
marketing , but in addition , the company should detect the unexpressed needs and primarily the
future needs However the worst situation that the company might face when using feedback ,the
company realizes that it expected to bring improvements into their relationships
(Storbacka&Lehtinene ,2001). Retention is a concept gaining more attention in today‟s
business when loyal are considered as essential components to organizational success though
corporations strive to identify and manage effective methods to retain their customer.
Customer retention will lead the company of having more loyal customers and as a result more
profit and market share (Kaveh, 2007).With increasing competition, banking sector around the
world is always in search of finding solutions to sustain and increase the efficiency of their
businesses. Commercial banks worldwide started restructuring and re-engineering their business
processes to cut costs and become more efficient and competitive. Smart banks are now changing
their business practices by refocusing their efforts on external and internal environment i.e.
customers and employees. In past, creating and maintaining a good relationship with the
customer was comparatively easy than today because of small businesses and identifiable
customers. Today, the extended size of the businesses and the wide range of customers have
compelled organizations to explicitly manage good customer relationships if they want to be
successful.
3
Customer relationship marketing is a strategy that enables a bank to analyze customer profiles,
detect their needs and potential profitability areas and establish the necessary actions to achieve
customer satisfaction, competitive advantage and thus the profitability (Woodcock, Foss &
Stone, 2005). From a customer's points of view, the competition brings them various choices and
increases their bargaining power. Customers are searching for various benefits from banks
including better services, lower transaction fees, and higher interest rates for their deposits, sign of
affluence, new products, and access to the bank from different convenient channels among
others. This has made commercial institutions to rethink of new ways to satisfy customers so as to
remain in business. Customer relationship marketing is one way that a commercial bank can
differentiate itself from other financial institutions and encourage brand loyalty among its
customers. By considering the above evidences, this study was conducted by taking appropriate
customer relationship marketing components that persuade customer retention of banks and come
up with concrete results.
4
1.2. Statement of the Problem
In the ancient days, the marketing perspective of many service firms was basically devoted to
attracting new customers rather than retaining them (Schneider, 1980), a strategy that led to the
increase in the cost of acquiring new customers (Ennew and Binks, 1996). The increase in
competition in most business sectors in the world coupled with the need for a change in the
marketing perspective have led managers to develop strategies that enable them keep up with the
growing competition. Since this competition is very stiff, managers thought of holding onto the
available customers on the same level as attracting new ones.
Banks that established relationship marketing on customer retention are doing better than those that
do not focus on relationship marketing for customer retention. Hence, relationship marketing
enables firms to increase market share, penetrate foreign markets, increase profits, increase sales
and reduce production and marketing cost (Brown, 2002). Wood,(2008) confirmed that due to
increasing competition, banks have resorted to relationship marketing as a strategy to attract,
maintain and enhance customer relationship and build customer loyalty and retention.
A study conducted by Ogongo, (2014) on customer retention strategies adopted by commercial

banks in Kenya found that the customers would be retained in the bank if the customers are
satisfied, if the bank has efficient services, listen and resolve customers‟ problems and met
customers‟ needs.
Similarly, Anabila et al., (2012) studied relationship marketing practices and customer loyalty in
Ghanaian banking industry. The study attested that communication had a strong positive
relationship with customer loyalty and retention. The study further suggested that banks provide
timely and prompt information for customer retention and loyalty. Another study by Gilaninia et al.,
(2011) conducted on influence of relationship marketing on the purchase intention in Iran banking
industry revealed that trust has a strong positive relationship on purchase intensions.
Similar studies also conducted by Soimo et al (2015) on influence of relationship marketing on

customer retention in commercial banks in Nakuru town, Kenya. The study established that trust is
vital in relationship marketing. Xu and Walton (2005) asserts that banks that practice relationship
marketing are able to retain existing customers, improve customer satisfaction levels, achieve cost
savings and enhance customer lifetime value. Hence, banks need to employ the marketing strategies
that enable them to attract new customers and also retain the existing ones.
5
Banks in Ethiopia are operating in a dynamic business environment which is characterized by
growing competition in the industry leading to decreased markets share. Commercial banks in
Ethiopia compete amongst themselves with technology and investment in marketing to outdo each
other. It is evident that the changes witnessed in the industry coupled with the jockeying of position
by industry players would drive the banks towards adopting customer based structures. Central to
this move is the adoption of relationship marketing to enable the banks retains already acquired
customers for long - term survival.
However little study had done so far in order to articulate on how relationship marketing will be
utilized to retain customer for life time. This is mainly because of two reasons.
First some of the studies done so far specifically addresses the concept relationship marketing
practices and its effect by focusing on specific bank case, for instance if we see the work of
Asemamw Abera (2016) who conducted the effect of relationship marketing on customer retention
in the case of Commercial Bank of Ethiopia and also Cherinet et,al., 2015) who assessed
relationship marketing with specific focus on Zemen Bank.
The major problem to conduct this research is the number of commercial bank of Ethiopia
branches in debre berhan town opened and give foreign and local services by this reason the
number of customer in the bank will be highly increased so my research reason out how to sustain
customer in the bank or customer retention in addition to this is a newly formed district it thought
that customer may have difficulty keeping in the bank
The second reason is that the researchers used limited constructs to measure relationship marketing.
For instance according to the study made by Asemamw Abera,(2016) there is significant relation
between customer relationship marketing components including trust, bonding, reciprocity,
empathy and responsiveness on customer retention. There are many dimensions of customer
retention components so that the other reason to conduct this study is establishing the extent of
customer relationship dimensions (commitments, communication, Conflict handling, customer
satisfaction and trust) on customer retention at commercial banks in Ethiopia, DebreBrehan District.
6
1.3. Research Questions
Based on the problem stated above, this study was investigating the effect of customer relationship
marketing on customer retention in case of commercial banks in Ethiopia. Hence, the study seeks to
answer the following specific research questions:
 To what extent trust influence credit customer retention in commercial bank of Ethiopia
DebreBerhan district?
 To what extent communication influence credit customer retention in commercial bank of
Ethiopia DebreBerhan district?
 To what extent conflict handling influence credit customer retention in commercial bank of
 To what extent commitment influence credit customer retention in commercial bank of
 To what extent satisfaction influence credit customer retention in commercial bank of
7
1.4. Objective of the Study
1.4.1. General Objective

The general objective of this study is to investigate the effect of relationship marketing on customer
retention the case of Commercial Banks in Ethiopia DebreBerhan district.
1.4.2. Specific Objectives

Considering the general objective, the study addressed the following specific objectives: -
 To determine the extent to which trust influences credit customer retention in commercial
bank of Ethiopia DebreBerhan district.
 To examine the extent to which communication influences credit customer retention in
commercial bank of Ethiopia DebreBerhan district.
 To investigate the extent to which conflict handling influence credit customer retention in
 To scrutinize the extent to which commitment influences credit customer retention in
commercial bank of Ethiopia DebreBerhan district..
 To establish the extent to which satisfaction influences credit customer retention in
1.5. Significance of the Study

This study was important to financial institutions managers for it would sensitize them on how,
where and when to apply marketing relationship strategies. It was also shed light to the bank
employees on the value of sustaining customer relationship. Further, it was provide other
researchers with knowledge on how to carry related studies on relationship marketing and credit
customer retention in future. Generally, the result of this study is significant: -
 To have a detail understanding about customer relationship marketing practice in

Commercial Banks in Ethiopia and maintaining, and attracting new customers as well.
 The finding of the study is also be helpful in identifying possible gaps of relationship
marketing practice of Commercial Banks in Ethiopia and its contribution on customer
retention.
 It would help management bodies of Commercial Banks in Ethiopia at every level to take
actions to fill the gaps.
 The study was serving as a good base for other researchers who want to do a further
research on this topic in Commercial Banks in Ethiopia.
8
 Lastly, the study could also contribute to the existing body of knowledge regarding
marketing management and can serve as insight or input for further research on the area
more specifically on economy aspect of marketing management.
1.6. Scope of the Study

The study deal with the effect of customer relationship marketing on customer retention the case of
Commercial Bank of Ethiopia DebreBrehan district. Due to the fact that they elapsed long years
since they implemented customer relationship management practice in their process. The researcher
is obliged to conduct the research on customers due to the time and financial constraint. In addition,
the study is delimited to private customers of the selected commercial banks only. Conceptually, the
study has confine itself to assess the effect of customer relationship marketing on customer
retention in terms of relationship marketing dimensions such as commitment, communication;
conflict handling, satisfaction and trust.
1.7. Limitation of the Study

There are a number of factors that limit the researcher to assess effects of relationship marketing on
customer retention of commercial banks in Ethiopia all over the country. These are time and
financial constraints. These the study is confined only on DebreBerhan district customer retention
customer relationship with specific relationship marketing underpinnings namely conflict handling,
commitment, satisfaction, trust and communications. Besides, credit customer retention measured
by asking the bank customers if they have plan of shifting to another bank. This is because the bank
could not provide information on customer retention which is assumed to be very sensitive to
reveal. Related to this, therefore, only credit customers is included in the study. Moreover, as
novice researcher who lacks experience, the result of the study, conclusion and recommendations
made may not be comprehensive, exhaustive and free from any of deficiency.
9
CHAPTER TWO
2. LITERATURE REVIEW
2.1 Introduction
Marketing as a separate discipline was born out of economics around the beginning of this Century.
As the discipline gained power, and developed through the first three quarters of the twentieth
century, the primary focus was on transactions and exchanges. According to Kotler and Armstrong
(2008), the development of marketing as a field of study and practice is undergoing re -
conceptualization in its orientation from transactions to relationships. The importance on
relationships as opposed to transaction based exchanges is very likely to redefine the domain of
marketing. The literature review is discussed with emphasis on social exchange theory and
relationship marketing theory under the heading theoretical framework. Furthermore, under the title
empirical literature of the study, customer retention, commitment, conflict handling, satisfaction,
communication and trust in banking industry is discussed. In similarly manner the independent and
dependent variable is explained through conceptual framework.
2.2 The Social Exchange Theory

According to the social exchange theory of Homan (1958), persons that give much to others try to
get much from them. The theory dowels on the social exchange relationship between the parties
which build up through reciprocal exchanges and fulfillment of promises. The theory is significant
in this study for the bank will develop long - term and profitable relationships with their customers
if they communicated effectively, build trust and offer quality services in the banking industry.
Social exchange theory specifies that individuals are willing to maintain relationships on account of
expectation that is rewarding. This is applicable in this study for the bank customers would
maintain relationship with the bank after they are offered service qualities that are reliable, prompt
and timely services. Social exchange theory tries to account for the development, growth and even
termination of social as well as business relationships. This means people or business firms evaluate
their reward when deciding whether or not to maintain a relationship. This is applicable in this
study for the bank customer evaluates how the bank commitments, communication, Conflict
handling, satisfaction and trust levels rewards them before having a long term relationship.
The theory is bolted on three factors: trust, commitment and relational exchanges.
The theory is applicable in this study for the bank trust, commitment and a relational exchange with
their bank customers is crucial in the banking industry. The bank should be trustful to their
10
customers. The bank watches trust on bank products/services, trust on handling customers, and trust
on handling transactions concern, trust on loan information and trust on bank information
confidentiality. When the bank customers are unable to find trust with the bank, they shift to
another bank, buy less bank products and talk harmful of the bank. On the other hand, if the bank
maintains high levels of trust, customers are satisfied, the bank customers purchase more
products/services, customer flaw to the other banks is minimized and customers positively
recommend their friends and relatives about the bank.
2.3 Relationship Marketing Theory

According to Arnett & Badrinayanan (2005) relationship marketing theory states that successful
relationship marketing is occasioned by certain aspects of cooperative relationships that
characterize successful relational exchanges. The accomplishment of relationship marketing is
nailed on three major factors. According to Sivadas & Dwyer (2000), these major factors include
trust, relationship commitment, and communication. Sirdeshmukh, Singh, & Sabol (2002) attested
that the theory suggests that successful relationship marketing efforts enhance customer loyalty and
firm‟s performance through stronger relational bonds.
There are varied viewpoints about which relational constructs mediate the effects of relationship
marketing efforts on outcomes. As stated by Sin et al., (2005) commitment, trust and
communication, satisfaction, bonding, shared values, empathy, dependence and reciprocity have
been identified as vital components of relationship marketing orientation. Palmatier et al., (2006)
further stated that the aforementioned different relational mediators have been linked to many
antecedents and outcomes.
De Wulf et al., (2001) suggested that these components are just indicators of the global mediator
relationship quality, which is essentially an overall assessment of the strength of a relationship and
is conceptualized as a multidimensional construct that captures the many aspects of an exchange
relationship. The relationship marketing theory, however, fails to give further details about how
service quality is important in relationship marketing. Relationship marketing theory is
implemented in this study to explain the link between the various components of relationship
marketing (particularly, communication and customers‟ trust) and customer retention.
11
2.4 Customer Retention in the Banking Industry
Relationship marketing directs to customer satisfaction, increased loyalty, customer retention,
increased profits and competitive advantage (Bergeron et al 2008). Banks need to make use of
marketing strategies that retain existing customers and attracts new ones. According to Ro -King
(2005) customer retention is important to most companies because the cost of acquiring new
customer is far greater than the cost of maintaining the existing customer. As stated by Kotler
(2006) acquiring new customers can cost five times more than the costs involved in satisfying and
retaining the current customers and that the customer profit rate tends to increase over the life of the
retained customer. Ainsour (2013) conducted a study on how to retain a bank customer in Jordanian
banks. The study established that internal marketing plays a big role in customer retention. Some
drivers such as communication, transparency, trust and satisfaction had a strong effect on customer
retention. Kate et al (2014) carried a study on customer retention strategies in Ghanaian banks. The
study aimed at investigating the importance of retention strategies that influence customers to make
continual patronage of banking services in Ghanaian banking. The study revealed that bank service
quality, loyalty rewards and customer relationship management had a positive significant on
customer retention. In similar manner,Msoka (2014) carried a study on determinants of customer
retention in Commercial banks in Tanzania. The study revealed that quality of services and products
and pricing of banks products had a strong positive relationship on customer retention. A study on
challenges of customer retention in the Kenyan banking is conducted by Mbithi (2013). The results
of the study revealed that Kenya banks were required to pay serious attention to retain their
customers and not only is to increase new customers and that retaining the existing customer is
more significant than increasing the new ones. Similar study on factors affecting customer retention
in Barclays bank of Kenya was carried out by Njane (2013). The study revealed that customer
retention is influenced by accuracy of transactions, delivery of services, and efficiency of customer
services and physical appearance of the bank. The study recommended that management to put
strategies so as to satisfy their customers and retain them.
A study on the effect of brand loyalty on customer retention in Kenyan banking sector is carried out
by Mbugua, (2014). The study revealed that the customers were not sensitive about products and
prices charged and fee paid for their accounts was reasonable so they were not likely to defect to
another bank because of prices. Similarly, Ogongo (2014) conducted a study on customer retention
strategies adopted by commercial banks in Kenya. The study found that the customers would be
retained in the bank if the customers were satisfied, if the bank had efficient services, listened and
resolved customers‟ problems and met customers‟ needs.
12
In the previous studies with respect to customer retention, the researchers have discussed customer
retention factors, challenges and practices and strategies. They have not studied the influence of
relationship marketing on credit customer retention. This study will fill this knowledge gap.
2.4.1 Commitment
Relationship commitment is defined as “an enduring desires to maintain a valued relationship”
Morgan and Hunt (1994). Morgan and Hunt (1994) further explained that an „enduring desireto
maintain‟ corresponds with that a committed partner wants the relationship to endure indefinitely
and is willing to work at maintaining it. And the term „valued relationship‟ indicates that
commitment exists between the parties when it considered important. On the contrary, Dwyer,
Schurr and Oh (1987) defined commitment as „an implicit or explicit pledge of relational continuity
between exchange partners‟. According to Dwyer, Schurr, and Oh (1987), commitment is believed
to employ a willingness to make short – term sacrifice to realize longer term benefits.
Palmatier, (2008) underlined commitment increase the quality of the relationship bonds necessary
for high – performance exchanges; relationship investments improve other performance –
enhancing aspects of the exchange. Furthermore, commitment represents exchange partners‟ desire
to maintain valued relationship and thus their relational motivation toward partners.
Palmatier, (2008) added that relationship marketing can increase joint knowledge about relationship
partners and informal communication between partners, which may improve the effectiveness and
efficiency of the relational exchange while also increasing trust and commitment. As asserted by
Morgan and Hunt (1994) “presence of relationship commitment is central to successful relationship
marketing, not power”.
2.4.2 Conflict Handling

According to Geyskens et al. (1999), conflict implies a level of tension, frustration, and
disagreement in the relationship due to one party obstructing the other party in reaching its goal.
Conflict handing is also defined as „a supplier's ability to avoid potential conflicts, solve manifest
conflicts before they create problems, and discuss solutions openly when problems arises‟ (Dwyer
et al. 1987). To make this strategy tangible, organization will approve conflict management
approach includes avoidance, compromise, adaptation and collaboration. The approaches indicate
commitment through signaling and have low to high levels of exchanging information. The
approaches vary in their levels of assertiveness and cooperation.
13
Therefore, organization leaders are responsible for creating a work environment that enables people
to succeed. When incongruity and differences of opinions rise into interpersonal conflict, leaders
must intervene immediately so as to have common mission/purpose, shared values and goals,
agreements and policies clear and in writing, fair, participatory decision - making process, creating
community spirit, partner system, wisdom circles, staying in touch with each other emotionally,
adopting communication agreements consist of addressing each other respectfully, no hurtful
physical contact, bring in an outside mediator, serving as kindly fair witnesses in meetings between
community members in conflict, active listening, peaceful communication, process work, voice
dialogue and another cases are the ways for handling conflict (Browning and Kathy 2007).
According to Morgan and Hunt (1994), effective conflict handling can have a dramatic impact on
customer retention rates, redirect the spread of damaging word of mouth, and improve end result
performance. Effective resolution of customer problems and relationship marketing are linked
closely in terms of their mutual interest in customer satisfaction, trust, and commitment.
Concerning to this a research was conducted by Ndubisi (2007) on the Banks of Malaysia on the
Determinants of relationship marketing and forwarded the following result: Conflict handling
strengthens relationship. Since it is difficult to achieve zero service failure all the time, it is
important that banks bring into being effective conflict resolution or problem solving mechanism.
What could drive a customer to the competitor may not be occurrence of a problem, but how the
problem was handled. However, this is a reactive approach to conflict handling. A more admirable
approach, which is proactive in planning and implementation includes, avoiding potential conflicts,
solving conflicts before they visible, and recognizing potential sources of conflict and stopping
them. These efforts would bring about better relationship and loyalty to the firm. Negi,(2010) has
conducted research in similar case but in different country that is Ethiopian telecommunication and
forwarded similar result with the above researcher and has stated that, It is difficult to achieve in
total the avoidance of conflicts, it is important that Ethiopian telecommunications corporation
introduced effective conflict resolution or problem solving mechanism, as what could drive a
customer to become disappointed thus separated from behaving loyally, will not be occurrence of a
problem by itself, but how the problem was resolved. These efforts if directed properly would bring
about better firm customer relationship that in turn, ensures customer retention.
14
2.4.3 Customer Satisfaction
Customer satisfaction is defined as “the degree to which a business‟s product or service
performance matches up to the expectation, then the customer is satisfied, if performance is below
par then the customer is dissatisfied” Robert – Lombard (2009). According to Hu, Kandampully &
Juwaheer, (2009) customer satisfaction is influenced by expectations, perceived service and
perceived quality. Expectations influence total satisfaction when the customer evaluates a product
or service. Satisfaction is a customer‟s emotional response when evaluating the discrepancy
between expectations regarding the service and the perception of actual performance. This
perception of performance is gained through the physical interaction with the business and the
product and service of the business (Salami 2005). Perceived quality is measured through recent
service experiences that consist of two components, namely perceived product quality and
perceived service quality. As stated by Balaji (2009), there is a direct link between perceived
quality and total satisfactions. The customer first forms expectations based on needs, values, past
experiences and extrinsic cues about the product.
Grounaris, et al., (2007), further explained that the perceived quality is based on those first
expectations, and the choice that the customer made is then evaluated to determine satisfaction.
Perceived value is the customer‟s overall assessment of the quality of a product based on the
perception of what is received compared with what is provided Yu, Wu, Chiao & Tai (2005).
Rootman (2006) has stated that high levels of service quality may lead to increased customer
loyalty, higher profitability, increased market share and lower employee turnover. If a customer
believes that he has a satisfying relationship with the business, he may perceive the business to have
a high level of service.
2.4.4 Communication
According to Bosch, et al (2006) communication is the formal and informal sharing of timely
information between the supplier and the customer through various methods from one individual or
group to another. Communication has been defined differently by different authors. Thuo (2008)
affirmed that through communication the customers are informed about the features, benefits,
availability, and usage of a particular product or service for persuasion purpose.
As made plain by Kotler and Keller (2007), customer‟s complaints should be resolved without
delay else they may spread bad news to the other customers, other banks and friends. They argue
that to make it easy for customer to complain requires suggestions forms, a seven day and twenty
four hour toll free hotline to receive the customer complaint, suggestion forms, websites, phone
15
calls and e-mails and complaint lines. According to Kotler & Tait (2010), communication in
relationship marketing can be a word of mouth between the bank employees and customer and
marketing communication to and from clients (Elliot, 2009). Kuria (2010) study on relational
marketing strategies among commercial banks in Kenya revealed that information communication
technology has improved customer retention and loyalty in banks and that it plays a crucial role in
improving customer satisfaction. A study conducted by Rootman et al (2011) on relationship
marketing and customer retention lessons for South African banks with the aim of understanding
relationship marketing and customer retention. The study found that communication was one of the
variables that had a strong positive relationship on customer retention. The study recommended that
communication between the bank employees and customers would be improved by use of
appropriate and preferred communication methods, trustfulness and honesty communication that is
not misleading, informing clients about new products or services, and their usage and benefits.
Similarly, a study on impact of customer relationship marketing on customer satisfaction in

commercial banks in Ethiopia is conducted by Assefa Garbi Tufa and Megbaru Misikir Teshu
(2015). The study discussed four independent variables: trust, commitment, competence and
conflict handling. The finding of the study was that communication had a strong positive
relationship with customer satisfaction in commercial banks in Ethiopia. A study on relationship
marketing and customer loyalty in the mobile telecommunication industry in Kenya is conducted by
Wanjiku (2013). The study found that successful communication of pricing policies as well as
bendable pricing for various services offered play a great role in customer retention.
2.4.5 Trust
According to Farootan (2008), trust plays a big role in relationship marketing for it makes the
customers build confidence on the bank and its products and services. The customer relationship
management aims to satisfy the customer through trust that results to increased customer loyalty
and retention. The bank service providers build trust to their customers by keeping to their
promises. These promises should be honored and fulfilled consistently.
A study conducted by Alrubaiee & Al-Nazer, (2010) on the impact of relationship marketing
orientation on customer loyalty in the banking sector in Jordan confirmed that customers trust in
banking was a crucial aspect of relationship marketing. The study recommended that banks to
increase mutual trust by showing hospitality, degree of honesty, transparency to be observed so as
to build customer trust with the bank and bank service providers.
16
A similarly study, on the role of relationship marketing in customer orientation process in the
banking industry with focus on loyalty with the objective of investigating the impact of relationship
marketing on customer loyalty was conducted by Teleghani (2011). The study found out that there
was a strong positive relationship between trust and customer retention. The study recommended
that openness and honesty to be observed in order to retain customers.
2.4.6 Conceptual Framework

According to Miles and Huberman (1994) a conceptual framework or theoretical framework is
defined as something that explains either graphically or in narrative form the main things to be
studied, the key factors, constructs or variables and the presumed relationship among them. A
conceptual framework for this study is made based on the work of Morgan, Hunt & Blog (1995)
and Anderson and Narus (1990) with modification. Framework captures independent and dependent
variables.
Independent Dependent
Variables Variable
Trust
Commitment
Communication
Customer
Conflict handling
Retention
Customer satisfaction
Figure 1 Conceptual framework
Source: Developed for the study based on Morgan, Hunt & Blog (1995) and Anderson and Narus
(1990) with modification.
The conceptual framework model depicted above reveals that customer retention is affected by five
components of relationship marketing, namely; trust, commitment, communication, conflict
handling and satisfaction. In line with the above conceptual framework this study will test the
following hypothesis.
Hypothesis 1: Commitment will not have significant and positive effect on credit customer
retention.
17
Hypothesis 2: Communication will not have significant and positive impact on credit customer
retention.
Hypothesis 3: Satisfaction will not have significant and positive effect on credit customer retention.
Hypothesis 4: Trust will not have significant and positive effect on credit customer retention.
Hypothesis 5: conflict handling will not have significant and positive effect on credit customer
retention.
18
CHAPTER THREE
3. RESEARCH METHODOLOGY
This chapter comprises of the following issues: description of the study area, research approach,
research design, target population, sample frame, sampling technique, Sample size determination,
data collection procedure, unit of analysis, data analysis, test of reliability and validity and ethical
consideration.
3.1. Research Approach

Research approach can be classified in to qualitative and quantitative. Qualitative analysis is the
analysis of qualitative data such as text data form interview transcripts, unlike quantitative analysis
which, is statistics driven and largely independent of the researcher. Quantitative research is the
systematic and scientific investigation of quantitative properties and phenomena and their
relationships. Kothari, (2004) stated that the objective of quantitative research is to develop and
employ mathematical models, theories and hypothesis pertaining to mutual phenomena. In this
study quantitative research approaches is employed.
3.2 Research Design

A research design is the arrangement of conditions and analysis of data in a manner aiming to
combine relevance to the research (Kothari 2003). It is a conceptual structure within which research
is conducted. It is a survey attempt to collect data from members of a population in order to
determine the current status of population with respect to one or more variables (Mugenda and
Mugenda 2003).
Therefore, the researcher has used descriptive and explanatory study to explain the relationship or
association between the variables of the study and to determine how relationship marketing
influences customer retention in commercial bank of Ethiopia Deber Brehan District employing
correlation and multiple regressions as well.
19
3.3 Sampling Design
3.3.1 Target Population

Target population refers to all members or a set of people, events or objects to which a researcher
wishes to generalize the results of the study (Borg and Gall 1989). Similarly, Mugenda and
Mugenda (1999) stated that target population is the population to which the researcher generalizes
the results of a study. As per the data gathered from the Management Information System of the
respective commercial bank of Ethiopia DebreBerhan district, the target population for this study is
2000 customers of the selected five branches commercial bank of Ethiopian DebreBerhan district.
Table 1 Target population
Number of branches Name of premium customers

DebreBrehan Branch 475
Atse Zeryakob Branch 355
Debre Eba Branch 450
Hailmariyam Mamo Branch 355
Tebassie Branch 365
Grand Total 2000
Source: CBE MIS, 2021
3.3.2 Sampling Technique

Accordingly, all five branches (DebreBerhan Branch, Atse Zeryakob Branch, Debre Eba Branch,
Hailmariyam Mamo Branch and Tebassie Branch) were included in this study so as to enable
undertaking a focused inquiry within the scheduled time. The study was used purposive sampling
technique to select premium customers in which the bank considers as premium customers based on
the amount of deposit greater than 100,000 birr has been considered for this study and finally the
researcher used simple random sampling to conduct it.
The main reason for selecting premium customers is they are high value customers for the bank. So,
retaining those premium customers is considered as the major strategy for achieving the
objectives of the branches and overall to the bank.
20
3.3.3 Sample Size
Sample size refers to the number of element to be included in the study Malhotra (2009).
Malhotra and Peterson (2006) stated that, larger the sampling size of a research, the more
accurate the data generated but the sample size was different due to different situation. Due to time
and financial constraints and the nature of the population sample determination method
developed by Carvalho (1984), was applied to determine a sample size. Therefore, based on
Carvalho (1984) sample size determination method, for this study to increase the accuracy of the
data, a large sample size was selected. From table 3.1, out of 2000 total population, 200 customers
were selected as a sample to participate in this study
These samples were selected from each stratum using relatively proportionate allocation in
relation to the percentage of total population the researcher used Carvalho (1984) formula to select
the sample size,
nh =n(nh/n)
Where nh =the size of the sample, n= Sample size, Nh= Size of the strata, N=Size of the population.
By adopting proportional allocation method, we shall get the sample sizes as under for the
different strata.
Table 2 Sample size determination
Population size Small Medium Larger
51-90 5 13 20
91-150 8 20 32
151-280 13 32 50
281-500 20 50 80
501-1200 32 80 125
1201-3200 50 125 200
3201-10,000 80 200 315
10,001-35,000 125 315 500
35,001-150,000 200 500 800
21
Table 3.3 Sample size determination
Name of strata N Nh N nh=n(Nh/N)
DebreBerhan Branch 200 476(n1) 2000 n1=200(476/2000)=47
Atse Zeryakob Branch 200 354(n2) 2000 n2=200(354/2000)=35
Debre Eba Branch 200 450(n3) 2000 n3=200(450/2000)=45
Hailmariyam Mamo Branch 200 355(n4) 2000 n4=200(355/2000)=36
Tebassie Branch 200 365(n5) 2000 n5=200(365/2000)=37
Thus, using proportional allocation method, the sample sizes for different strata are 47, 35, 45, 36
and 37 respectively
3.3.4 Source of Data

Both primary and secondary data was used in the research. Primary method of data collection was
made using 5 point Likert scale questionnaire. Secondary data was collect from the books,
publications, articles, journals and websites etc. also used.
3.3.5 Primary source of data

When we see primary data is originated by the researcher for the specific purpose of addressing the
research problem (Malhotra, 2006). In this study, the primary data was obtained through survey
questionnaire. Surveys are the most common method of primary data collection. A structured
questionnaire was given to a sample of a population to elicit specific information from respondents.
3.3.6 Secondary source of data

Secondary data is defined as historical data structures of variables previously collected and
assembled for some research problem or opportunity situation other than the current situation
(Hair et al.,2006). Secondary source of data was sourced from internet, books, journals,
unpublished researches and websites of the company. The secondary data was used to guide the
researcher on the background of the study and on the literature review of the study.
22
3.3.7 Research Instrument
In order to answer above mentioned objective of the study the questionnaires method was used.
The researcher was use a survey questioner when respondents were asked to rank their answer. The
study was depending on the primary data through standard questionnaires. Questionnaires are
applied usually for descriptive, which identify and describe the variability in different
phenomena or explanatory research, which examine and explain relationships between variables
(Saunders et al., 2009). The questionnaire was prepared in line with the objectives of the study
mentioned above and it was organized in two sections. The first section was designed to
obtain the demographic information of the respondents. The second section was inquires how
many respondents perceive the relationship marketing components relationship with customer
retention and its impacts. A five-point Likert scale questionnaire was distributed to premium
customers of commercial bank of Ethiopia. The response scale for each statement in the survey
questionnaire ranges as 1 = strongly disagree, 2 = Disagree, 3 = Neutral, 4 = Agree, 5 =
strongly agree. For the purpose of the study, respondents were asked to indicate the degree
to which they agreed or disagreed with each statement in every dimension in the questionnaire.
3.3.8 Method of Data Analysis

As the data collection method is quantitative and qualitative, the data analysis was performed by
inferential and descriptive statistics. The data analysis was processed by SPSS statistics (statistical
Package for social scientists) software version 25 which is purposefully prepared for helping the
finding using statistical analysis.
3.3.9 Descriptive Statistical Analysis

After validity test and the data collection, the collected data was analyzed and the final report was
produced through central tendency measurements cumulative percentage and comparison of mean.
In addition to this, with the help of SPSS, figures and tabular explanations are used to present the
result.
3.3.10 Inferential Statistical Analysis

In inferential statistical analysis; ANOVA, correlation and multiple linear regression method were
utilized using statistical package for social sciences (SPSS) software. These statistical tools usage
and methods of presentation are described as follows.
23
a) ANOVA
Analysis of Variance (ANOVA) is used to see if there exists a difference between those
five determinants of sales performance variables.
b) Correlation
Correlation (r) is used to describe the degree of relationship among two variables. Since all
variables are measured as an interval level, Pearson product moment correlation was used.
Correlation “r” outputs are always lies between -1.0 and +1.0 and if “r” is negative, there exists a
negative relationship between the variables; if it's positive, the relationship is positive. While
computing a correlation, the significance level shall be set at 95% with alpha value of 0.05 or a
chance of occurrence of odd correlation is 5 out of 100.
c) Multiple Regression Analysis
Multiple regression analysis is a major statistical tool for predicting the unknown value of a
variable from the known value of two or more variables. And it is about finding a relationship
between variables and forming a model. The Model was developed using explanatory variables or
predictors, which have influences on a sales performance.
Y= β+ β1X1+β2X2+β3X3 +β4X4+ε
Where Y is the response and the independent variables are those which explain the response
ranges from X1 to X5.
X1= Trust
X2= Commitment
X3= Communication
X4= Conflict handling
X5= Customer satisfaction
=Error term
24
3.3.11 Validity and Reliability
3.3.12 Reliability Testing

The level of reliability of the instrument that is the consistency of the variables was checked with
the Cronbach„s alpha statistics. Cronbach„s alpha is an index of reliability associated with the
variation accounted for by the true score of the underlying constructǁ (Nunnaly, 1978).
Cronbach„s Alpha„s only measured for variables which have more than one measurement
question. Nunnaly (1978) has stated that 0.5 is a sufficient value, while 0.7 is a more reasonable
Cronbach„s alpha.
3.3.13 Validity
The researcher was constructed the questioners designed to which information on the profile and
perception of the respondent‟s. Adrift of the questionnaire was reviewed by the researcher they
presented and discussed with the adviser for correction and suggestion. Correction was
incorporated in the revised draft. There were tested by asking 6 customers who were not target as
respondent of the study. All comments and suggestions for clarity and relevance were evaluated by
the researcher to be incorporated in the final draft of the questioner with the guidance and approve
by the adviser.
3.3.14 Ethical Consideration

The researcher was maintaining scientific objectivity throughout the study, recognizing the
limitations of his competence. Every person involve in the study was entitle to the right of
privacy and dignity of treatment, and no personal harm was cause to subjects in the research.
Information obtains was held in strict confidentiality by the researcher. All assistance, collaboration
of others and sources from which information‟s were draw was acknowledged.
25
CHAPTER FOUR
4. DISCUSSIONS AND FINDINGS

This chapter presents the findings and their interpretation based on the main objective of
the study which was, to establish the relationship between customer relationship marketing
and customer retention in the commercial bank of Ethiopia DebreBerhan District. To collect the
data and extract findings, questionnaire was prepared and distributed to customers of
commercial bank of Ethiopia in DebreBerhan districts , thus a total of 200 questionnaire was
distributed and a total of 200 (100%) was returned .
4.1. Respondents Profile

This sections that follow present profile of respondents „like gender, age, year of
relationship ,education qualification and the type of deposit account they have Commercial
Bank of Ethiopia at Debre berhan district
Table 3 Gender of the respondents
Gender Frequency percent Cumulative

Percent
Male 118 59 59
Female 82 41 100.0
Total 200 100.0
Source: Survey Questionnaires, 2021
Analyzing the data obtained from the questionnaire, table 4.2 reveals that, 59% of the
Respondents were male customers while 41% were female respondents. The study tried to
represent of the customer respondents however is fairly balanced but the selected customers had
more male than females by 18 % it shows that the bank has more male premium customer than
26
Female. The bank should be encourage females customers by develop new product and benefit
package for females even if the bank has women saving account.
Table 4 Age of respondent
Age Frequency Percent Cumulative Percent
18 – 25 5 2.5 2.5
26 – 35 15 7.5 10.0
36 – 45 16 8.0 18.0
46 – 55 67 33.5 51.5
56- above 97 48.5 100.0
Total 200 100.0
It was important to find out the age of the respondents. Age of the respondents would easily tell
how experienced in general life issues that a respondent was. How well equipped were they to
respond to certain level of issues that would require experience beyond work and academics. In
terms of age, 2.5 % of survey respondents were under age 18-26 years, 7.5% under age 26-35, 8%
under the age 36 - 45, 33.5% under age 46 – 55, 48.5%, under age 56 – above. Therefore the
largest respondents were between the ages of 56 above representing 48.8%.so, the bank has
large number premium customer under 56 above ages. In this age group the customers are use ness
minded and experienced with the bank so it should be give special service. On the other hand the
age 18 - 26 is 2.5% it is very small but in this group they will be potential for the bank in the
coming year .so the bank should be creates aggressive awareness.
27
Table 5 Education
Educational Level Frequency Percent Cumulative Percent
High school and below 6 3.0 3.0
Certificate 10 5.0 8.0
Diploma 76 38.0 46.0
Degree 92 46.0 92.0
Masters & above 16 8.0 100.0
Total 200 100.0
The educational qualifications of respondents were shown in table 4.5, as it is presented in the
table, 3 % of customer achieved high school education, and 5% and 38% were Certificate and
Diploma holder respectively, 46% of the customers hold a first Degree. On those customer the
bank should be create aggressive awareness.
Table 6 Usage of banking service
Year Frequency Percent Cumulative Percent
1 – 3 years 22 11.0 11.0
4 - 7 years 33 16.5 27.5
8 - 10 years 72 36.0 63.5
10 years and Above 73 36.5 100.0
Total 200 100.0

On the other hand, 11% of respondents had 1-3 years of association with CBE, 16.5% had a
customer of CBE for 4 -7 years, 36% of had a customer of CBE for 8 - 10 years, 36.5% had a
customer of CBE 10 and above years The fact that majority of the respondents had 10 years and
above „experience relationship with Commercial Bank of Ethiopia. Account holder the bank
should be improving the payment system of cheek, eligibility criteria and payment of interest.
28
Table 7 Distribution by type of account
Types of Accounts Frequency Percent Cumulative Percent
Saving account 153 76.5 76.5
Current account 11 5.5 82.0
Credit 3 1.5 83.5
Money Transfer 33 16.5 100.0
Total 200 100.0
As a result majority of customer respondents were saving account i 76.3% and the remaining
16.5 % of respondents have money transfer holder with CBE 5.5% respondent have current
account and 1.5% respondents were credit ,. To motivate and increase the saving account holder the
bank should be improve the payment system of cheek, eligibility criteria and payment of interest.
4.2. Reliability Analysis

Reliability is the quality of consistency or of a study or measurement (Kothari, 2009). It explains
the degree to which observed scores are free from errors of measurement. Reliability is an
essential pre-condition for validity and can be estimated in Crobanch‟s alpha. Test results for
reliability were done as shown in the following table.
Table 8 Reliability test and validity
Variables Cornbrash‟s Alpha N of Items
Trust 0.766 11
Commitment 0.774 3
Communication 0.771 4
Conflict handling 0.764 4
Customer Satisfaction 0.774 5

Source: SPSS descriptive analysis result based on questionnaire survey, 2021
29
Reliability of the instrument was assessed by using Cronbach‟s Alpha. Higher Alpha coefficients
indicate higher scale reliability (Santos, 1999: as cited in Eze et al., 2008). Specifically, Nunnally
(1978: as cited in Eze et al., 2008) suggests that scales with 0.60 Alpha coefficients and above are
considered acceptable. The variables have been tested for reliability by using Cronbach‟s
Alpha Coefficient and the Cronbach‟s alpha coefficient of all the construct are more than 0.6, this
indicated that the measurement scale were stable and consistent with the objectives.
Table 9 Summary of descriptive statistics mean and standard deviation
N Mean Std. deviation
Trust 200 4.2551 0.53705
Commitment 200 4.3133 0.47377
Communication 200 4.3822 0.49037
Conflict handling 200 4.4422 0.53848
Customer satisfaction 200 4.2667 0.59328
Customer retention 200 4.3633 0.52423
Table indicates that assurance has the highest mean value and responsiveness have the least Mean
value. Therefore, it may be concluded from table 4.7 that respondents are most agreed with conflict
handling (mean 4.4422 and sd 0. 53848), and followed by communication with a mean and standard
deviation of 4.3822 and sd 0.47377 Respectively. Commitment and Customer satisfaction at a
mean of, 4.3133and sd 0.53848, mean 4.2667 and sd 0.59328 Respectively. Again, the above
table depicts that general towards trust is with a mean of 4.2551and sd 0. 0.53705 The
customer loyalty has a mean score 4.3633 and sd 0.52423 respectively.
4.3. Analysis of Correlation

Correlation measures the strength of the linear relationship between two variables. Thus,
Pearson„s correlation is used to identify whether there are relationships between the
variables and to describe the strength and the direction of the relationship between two
variables (Mohammad, n. d). According to Berndt et. al (2005), the level of association as measured
by Pearson„s co-efficient falls between -1.0 and +1.0, which indicates the strength and direction of
association between the two variables. The interpretation of the result is as follows; a correlation
result between 0 to 1 implies positive relationship, 0 (zero) for no relationship, 1 for perfect
30
positive relationship, ‐1 for perfect negative relationship and between ‐1 to 0 indicate the
existence of negative relationship. So, the correlation analysis was done to analyze the
relationship between Customer retention and trust, Reciprocity, bonding, empathy, and
responsiveness. To examine the relationship among these variables, Pearson correlation
coefficients were calculated. In this section of the study, the analysis and interpretations of the
correlation results between dependent and independent variables are presented.
Expressed in a single number called a correlation coefficient (r), correlations provide information
about the direction of the relationship (either positive or negative) and the intensity of the
relationship (–1.0 to +1.0). Furthermore, tests of correlations will provide information on whether
the correlation is statistically significant (Marczyk, 2005). Correlation coefficients range from –1.0
to + 1.0. The sign of the coefficient represents the direction of the relationship. In general,
correlations of .01 to .30 are considered weak, correlations of .30 to .70 are considered moderate,
correlations of .70 to .90 are considered strong, and correlations of .90 to 1.00 are
considered very strong. Importantly, these are only rough guidelines. A number of other factors,
such as sample size, need to be considered when interpreting correlations
Table 10 Correlations
TR CO CH CS CM CR
Pearson
1 .742** .720** .696** .730** .653**
Correlation
TR
Sig. (2-tailed) .000 .000 .000 .000 .000
N 200 200 200 200 200 200
Pearson
.742** 1 .786** .726** .732** .727**
Correlation
CO
Sig. (2-tailed) .000 .000 .000 .000 .000
N 200 200 200 200 200 200
Pearson
.720** .786** 1 .759** .733** .779**
Correlation
CH
Sig. (2-tailed) .000 .000 .000 .000 .000
N 200 200 200 200 200 200
Pearson
.696** .726** .759** 1 .922** .679**
Correlation
CS
Sig. (2-tailed) .000 .000 .000 .000 .000
N 200 200 200 200 200 200
Pearson
CM .730** .732** .733** .922** 1 .708**
Correlation
31
Sig. (2-tailed) .000 .000 .000 .000 .000
N 200 200 200 200 200 200
Pearson
.653** .727** .779** .679** .708** 1
Correlation
CR
Sig. (2-tailed) .000 .000 .000 .000 .000
N 200 200 200 200 200 200
Table 4.8 presents the correlations of each variable. The results show that here is positive and
strong relationship between trust and customer retention which indicates that as the level of trust of
customers on the bank increase there is more chance that they will retain in the bank. This study
finding corresponds with Soimo et al, (2015) study which established that there was a positive
relationship between trust and customer retention. The study finding concurs with Wanjiku, (2013)
study which established that firms operating in an intensely price based competitive environment
should purpose to build trust among their customers. Correlation test is observed that the significant
at one percent. Thus research question is confirmed and there is strong positive relationship
between Reciprocity and customer retention.
Like that of trust communication and customer retention has positive and strong relationship
indicating that enhancing communication will have positive effect on customer retention. This
finding agrees with Wanjiku (2013) study which established that effective communication of
pricing policies as well as flexible pricing for various services offered played a great role in
customer retention. The study findings also agrees with Rootman et al (2011) study which
revealed that communication was one of the key variables that had
Conflict handling has positive effect on customer retention indicating the more the banks strive to
handle conflict the more they retain their customer. The finding is consistent with Morgan and Hunt
(1994), effective conflict handling can have a dramatic impact on customer retention rates, redirect
the spread of damaging word of mouth, and improve end result performance.
The above table indicates the more banks are committed to their customers the more their customer
retain with them. As indicated in the table retention and commitment has positive and strong
relationship. The finding is supported by Berry and Parasuraman (1991) who argue that
relationships are built on the foundation of mutual commitment``. Without commitment there is no
relationship, if it is to be cemented for a longer time.
Like every other components of customer relationship marketing customer satisfaction have
positive effect on customer retention. The more the customers are satisfied with the bank the more
32
they will retain there. The study finding is consistent with to Yu, Wu, Chiao & Tai (2005), banks
resolved offered quality service in a conducive environment with high standard banking layout and
amenities will satisfy customer which leads to customer retention.
The above correlation coefficient confirms that relationship marketing has direct positive and
significant relationship with customer retention. Thus one can deduce that the five components of
relationship marketing have strong relationship with customer retention. A relationship orientation
implies that the focus of marketing is on retaining customers by maintaining and strengthening win-
win relationships over time (Payne and Frow, 1997).
4.4. Multiple Regression Analysis

Under multiple regression analysis, the following methods of analysis are used. The first task is
regression assumption test. The next was producing output relating to Model Summary, ANOVA
and Beta coefficient. So that the model can be developed and the relative importance of the
customer relationship marketing on customer retention can be identified, the student researcher
relied on standardized and unstandardized beta coefficients respectively.
4.4.1 Regression Analysis assumption test

Prior to conducting multiple regression analysis, the researcher performed test of two assumptions
of multiple regression and the data was proven against those assumptions.
4.4.3 Diagnosis Tests/Assumptions

When there was more than one independent variable in the study, the researcher has to make use of
multiple regression models Lind et al., (2008). Multiple linear regression analysis especially
standard beta values and P- value is employed to examine the effects of payment and benefits,
nature of job, evaluation process, inter personal relation, supervision, career advancement and
working condition on employee productivity and used to test the developed hypothesis.
Assumption 1: Test of Normality Normality can be seen on the data distribution when the curve
does not pass through either the left or the right (Ghozali, 2006). It shows that the data output is
normally distributed. In order to test normality of the data, kurtosis and skewness value was
checked using SPSS 25. Skewness measures the degree to which cases are clustered towards one
end of an asymmetry distribution. In general, the further the value of skewness is from zero, the
more likely it is that the data are not normally distributed (Field, 2000). Kurtosis measure the level
of peak in a histogram. High peak have positive kurtosis, while flatter distribution have negative
kurtosis. A histogram is simply a graph that plots a frequency distribution of data for a variable. The
values of the variable go along the X-axis while the number of data points with that value (the
33
frequency) is plotted on the Y-axis. Histograms are a great way to check whether or not your data is
normally distributed. A normal distribution is a distribution of data that clusters around the mean.
Figure 2 Normality tests residuals
Source: SPSS output of the questionnaire survey, 2021

According to George and Mallery (2003) cited by Rahman et al. (2017) suggested that skewness
and kurtosis values for the variables should be between -2 and +2 for the acceptability as normal
distribution. Scores of Work environment, payment, promotion opportunity, supervision, nature of
job and job satisfaction were normally distributed as their score was well in the range -2 to +2.
When presented on a histogram the graph has a peak and a 'bell' shaped appearance According to
our study since the residuals are normally distributed, the histogram chart above is bell-shaped and
the mean is zero it fulfills the assumption of normality. Therefore in the population, the data on the
dependent variable are normally distributed for each of the possible combinations of the level of the
independent variables; each of the variables is normally distributed.
Assumption 2: Test of Linearity In the normal probability plot the points lied in a reasonably
straight diagonal line from bottom left to top right. Therefore, it shows linearity. An underlying
assumption of regression analysis is that the relationship between the variables is linear, meaning
that the points in the diagonal line plot must form a pattern that can be approximated with a straight
line.
34
Figure 3 Scatter plot assumption measures
4.4.3. Model Summary

In the below model summary table – 4.11
- The multiple correlation coefficients, R, indicate a very strong correlation of .748 between
customer retention and the 5 explanatory variables, by recalling the rule of thumb of the strength of
relationship.
- From the R square (R2=0.666 ., F= 77.246) value (coefficient of determination) the model fits
accounts 66.6% of the variation in the customer retention explained by the fitted model linear
combination of all the (predictors) determinants of customer retention.
4.4.4 Multi Co linearity Test

Table 11 Coefficients
Variables 1/ VIF VIF
TR .357 2.805
CO .299 3.340
CH .292 3.421
CS .134 7.461
CM .133 7.522
a. Dependent Variable: CR
35
Collinearity, or multi collinearity for multiple variables, refers to the situation when a high degree
of correlation exists between one or more predictor variables. (Kothari, 2004).Multi collinearity is a
potential source of confusing or misleading results in multiple regression analysis, which can
result in unstable estimates of the regression coefficients or inflated standard errors and
Confidence intervals. If Collinearity is discovered then one can either remove one of the variables
or create a new variable that combines the previous two that were highly inter-correlated (Cohen et
al., 2007). Colliniarity can be detected by Collinearity statistics through checking the
Tolerance or VIF ((Variable Inflation Factor). Hair et al, (1998) cited that VIF value above 10 and
a tolerance value below 0.10 pose a multicollinearity problem. In this study, the result of
collinearity statistics analysis shows variance inflation factors (VIF) value ranges from 2.805 –
7.522. Tolerance value ranges within the value of 0.292 - 0.357which indicated that there is no
multi collinearity problem. In the below model summary table – 9
- The multiple correlation coefficients, R, indicate a very strong correlation of .748 between
customer retention and the 5 explanatory variables, by recalling the rule of thumb of the strength of
relationship.
- From the R square (R2=0.666 ., F= 77.246) value (coefficient of determination) the model fits
accounts 66.6% of the variation in the customer retention explained by the fitted model linear
combination of all the (predictors) determinants of customer retention.
Table 12 Model summary
Model R R Square Adjusted R Std. Durbin-

Error of
Square the Watson
Estimate
1 0.816a 0.666 0.657 4.64382 1.860
a. Predictors: (Constant), CM, TR, CH, CO, CS

b. Dependent Variable: CR
4.5.1 ANOVA Model Fit

The regression model overall fit can be examined with the help of ANOVA table- 4.10 of this
study. In doing so, the ANOVA table determined the relationship between the independent
variable and the dependent variable (Muluadam, 2015). As shown in the below table, the value of R
36
and R2 obtained under the model summary part was statistically significant at (F=77.246),
(P<0.001) and it can be said that there is a relationship between customer retention and the
predictors (determinant factors of customer retention)
Table 13 ANOVA
Frequency Percent F Sig.
Regression 8329.093 5 77.246 .000b
Residual 4183.627 194
Total 12512.720 199
a. Dependent Variable: CR
b. Predictors: (Constant), CM, TR, CH, CO, CS
Source: SPSS output of the questionnaire survey, 2021
To investigate the significant factors of customer relationship marketing that influence customer
retention in Commercial Banks of Ethiopia, multiple regression model were computed.
Table 14 Regression result CR components and customer retention
Frequency T Sig.
Percent
B Std. Beta
Error
(Constant) 6.523 2.033 3.208 0.002
TR 0.033 0.109 0.021 .305 0.001
CO 0.320 0.119 0.204 2.693 0.008
CH 0.611 0.099 0.472 6.148 0.000
CS 0.268 0.188 0.162 -1.426 0.004
CM 0.612 0.201 0.346 3.042 0.003

Dependent Variable: Customer Retention, based on questionnaire survey, 2021
37
In next step for indicate of customer retention explanation and prediction by five components of CR
, we used Multiple Regression method .In table 13 , According to Beta coefficient can be said that
trust has maximum impact (0.472) and customer satisfaction has minimum impact (0.021) on
customer retention variable. Then regression model can be written as follows in a significant at 95%
confidence interval.
Ŷ= 0.6.523+ 0.033 X1+ 0.320 X2 + 0.611x3 + 0.268 X4 + 0.612 X5
Interpretation of the model, as per the finding, trust has a positive impact on customer retention.
This means that, as trust increases or decreases by 1%, customer retention increases or decreases at
the time by 3 % controlling for (x2, x3, x4 and x5). Similarly commitment influences positively
customer retention. When commitment is raised or fall by 1%, the dependent variable customer
retention raised or fall by 32% controlling for(x1, x2, x3 and x4).As conflict handling increased or
decreased by 1% customer retention also increased or decreased by 61.1% controlling for (x1,x3,x4
and x5).with regard to customer satisfaction increased or decreased by 1% ,the dependent variable
customer retention is increased or decreased by 26.8% controlling for(x1,x2,x4 and x5). Finally
empathy increased or decreased through 1%, the dependent variable customer retention is increased
or decreased by 61.2 % controlling for(x1, x2, x3 and x5).As result trust and communication have
strong impact on customer retention with regarding the bank.
4.4.6 Hypothesis Testing

Hypothesis 1
Ha1: There is a significant, positive relationship between trust and customer retention in
Commercial bank of Ethiopia Debreberhan district.
From it can be seen that the calculated significance value 0.01 was less than the critical value of 5%
significance and the calculated regression result 0.021 shows that there was not a strong positive
relationship between the two variables trust and customer retention. As a result, the first
hypothesis “there is an insignificant, negative relationship between trust and customer
retention in commercial bank of Ethiopia DebreBerhan district was rejected. This implies that
there was a negative relationship between trust and customer retention in commercial bank of
Ethiopia DebreBerhan district.
Hypothesis 2
As indicated in calculated significance value 0.01 was less than the critical value of 5%
significance. As well as per the correlation data there was strong relationship between
independent variable (commitment) and the dependent variable (customer retention) because the
38
regression 0.204 shows that there was a strong and positive relationship between the two variables.
As a result, the first hypothesis “there is a significant, positive relationship between commitment
and customer in Commercial bank of Ethiopia DebreBerhan district” Was not rejected. This
implying that there is a positive significant relationship between commitment and customer
retention in Commercial bank of Ethiopia DebreBerhan district
Hypothesis 3
Ha3: There is a significant, positive relationship between conflict handling and customer retention
in Commercial bank of Ethiopia Debreberhan district.
it can be seen that the calculated significance value 0.01 was less than the critical value of 5%
significance and the regression 0.472 shows that there was a strong positive relationship between
the two variables conflict handling and customer retention. As a result, the third hypothesis
“there is a significant, positive relationship between conflict handling and customer retention
in commercial bank of Ethiopia DebreBerhan district was not rejected. This implies that there was
a positive relationship between conflict handling and customer retention in commercial bank of
Ethiopia DebreBerhan district.
Hypothesis 4
Ha4: There is a significant, positive relationship between Customer satisfaction and customer
retention in Commercial bank of Ethiopia Debreberhan district.
It can be seen that the calculated significance value 0.01 was less than the critical value of 5%
the two variables Customer satisfaction and customer retention. As a result, the forth hypothesis
“there is a significant, positive relationship between Customer satisfaction and customer
retention in commercial bank of Ethiopia DebreBerhan district was not rejected. This implies that
there was a positive relationship between Customer satisfaction and customer retention in
Hypothesis 5
Ha5: There is a significant, positive relationship between communication and customer retention in
Commercial bank of Ethiopia Debreberhan district.
It can be seen that the calculated significance value 0.01 was less than the critical value of 5%
the two variables communication and customer retention. As a result, the fifth hypothesis “there
is a significant, positive relationship between communication and customer retention in
commercial bank of Ethiopia DebreBerhan district was not rejected. This implies that there was a
39
positive relationship between communication and customer in commercial bank of Ethiopia
DebreBerhan district.
4.4.7. DISCUSTION
Level of agreement relating to customer retention marketing suggests that staff were knowledgeable
on the operation of their CRM system and the right organizational culture for good CRM. However
the result indicates the respondent see room for improvement in terms of marketing role in insuring
that CRM is done well the first time and every time. Some respondents were not satisfied with the
current marketing on this there was a strong positive correlation of 0.779 between CRM and
customer retention. This element is important to both large and small banks. Without CRM
commercial Bank of Ethiopia, Derbre Berhan district will note retain customer within the banks and
will lose customer to competitors.
The aim of relationship marketing is to establish, maintain, and enhance relationships with
customers and other partners, at a profit, so that the objectives of the parties involved are met.
Similarly, its goals are to create and maintain lasting relationships between the firm and its
customers that are rewarding for both sides. This is achieved by a mutual symbiosis and fulfillment
of promises. In other words, a key objective is to foster customer retention, which is defined as a
deeply held commitment to re-buy or re-patronize a preferred product or service in the future
despite there are situational influence and marketing efforts having the potential to cause switching
behavior. This normally culminates into developing brand loyalty on the part of the customer with
the company in question. It is therefore crucial that firms cease the opportunity to build their brands
through a well-developed relationship over time that breeds retention among customers.
As the study shows, the bank is receiving moderate positive word of mouth from its clients to their
friends and relations although other factors have a strong role to play to why people bank with
Commercial Bank of Ethiopia, Debre Brehan district. The bank‟s level of adoption of relationship
marketing is very high as the above tables Indicate.
In general by undertaking a detailed and thorough analysis on the effect of customer relationship
Marketing on Customer retention, the results of the study findings is summarized as follows;
 Commercial bank of Ethiopia, Derbre Brehan District has to a very strong moderate positive
relationship, adopted conflict handling as a one customer relationship marketing practice.
According to Walsh, Gilmore and Carson (2004). (Kotler and Armstrong. (2010). Menon
and O‟Connor (2007)., (Ahmad and Buttle, 2002) and Rouholamini and Venkatesh (2011)
wrote theoretically roles of customer relationship marketing on customer retention.
Accordingly as it was stated earlier, the linear combination of the 5 predictors value is
40
significantly related with sales performance at (R2=.666, F=77.246 and P<0.001). On this
particular study, for the customer retention factor trust showed the first relative importance
(=47.2%) with a statistically significance level of (P<.05).Therefore, based on the results
obtained from the respondents, it can be said that, conflict handling is the first determinant
factor of customer retention. Among the conflict handling practices used under this study,
the majority of the respondents were agreed that the bank has calculating charges, cash
payment process properly and the financial status the bank is moderate and positive
relationship and its effect on customer retention.
 Communication is the dimension of a business relationship that enables either party to
provide favors or make allowances for the other in return for similar favors or allowances to
be received at a later date (Chattananon & Trimetsoontorn, 2009).On this study also
communication of the customer relationship marketing have a positive significant
relationship with the customer retention (b= 0.346, P< 0.05). It is also the fifth relatively
important factor with a percentage contribution of 34.6%. It shows that, the theoretical and
empirical findings are consistent with this study. Summary of communication practice as
customer relationship marketing both the bank and the customers work for mutual benefit
and have a strong positive relationship and its effect on customer retention.
 The commitment begins with the very basic force of the need for a seller to find a buyer for
their product, and the desire for a buyer to purchase a product that will satisfy their needs
(Chattananon & Trimetsoontorn, 2009). On this study also commitment of the customer
relationship marketing have a positive significant relationship with the customer retention
(b= 0.204, P< 0.05). It is also the fourth relatively important factor with a percentage
contribution of 20.4%. It shows that, the theoretical and empirical findings are consistent
with this study With regard to the summary of commitment practice as customer
relationship marketing moderate extent, the bank works in close cooperation with its
customers and builds long lasting relationship and strong positive relation with customer
retention and its effect.
 Customer satisfaction should not be equated with sympathy; marketers can be empathetic
while still driving a hard bargain with customers (Murphy et al, 2007).On this study also
customer satisfaction of the customer relationship marketing have a positive significant
relationship with the customer retention (b= 0.162, P< 0.05). It is also the relatively
important factor with a percentage contribution of 16.2%. It shows that, the theoretical and
empirical findings are consistent with this study. Summary of customer„s perception
41
customer satisfaction practice, moderate positive relationship on the bank and in a good
position with regard to empathic relationship with its customers and influence on customer
retention but it needs more effort to reach at high level of empathy.
 However, Taiwo et. al. (2011) described that trust is the degree to which customers perceive
service providers readiness to assist them promptly. On this study also trust of the customer
relationship marketing have a positive significant relationship with the customer retention
(b= 0.021, P< 0.05). It is also the relatively less important factor with a percentage
contribution of 2.1%. It shows that, the theoretical and empirical findings are consistent with
this study. Customer„s perception with regard to trust practice on the bank arranges special
care to special customers, employees give genuine and detailed information regarding to any
transaction of the bank and also all components of CRM have less relationship marketing
and its effect on customer retention.
42
CHAPTER FIVE
5. SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

This is a comparative study that is limited in scope and sample size, but it can contribute to further
study on the impact relationship marketing on credit customer retention in the banking sector in
Ethiopia context. Therefore, based on the analysis and interpretations made at the pervious chapter
the following summaries, conclusions and recommendation are made.
5.1 Summary of Major Findings

The purpose of the study was to investigate the effect of relationship marketing on customer
retention the case of Commercial Banks in Ethiopia DebreBrehan district. More specifically the
study determines the extent to which relationship marketing (trust, communication, conflict
handling, commitment and customer satisfaction)
The demographic characteristics of respondents show that 59% of the respondents were male credit
customers while the reaming 41% are female customer respondents.) Influences customer retention.
The following are the major findings of the study: Among the respondents, 12.5% had 1-3 years,
7.5% 4-7 had years 8% had 33.5 years and 48.5% had above 10 years of the credit customer has
banking relationship with the Five selected Commercial Bank of Ethiopia DebreBerhan district
branches respectively. In regards to educational qualification of the respondents more than 3% of
the credit customer had high school and below, 5% , 8% had a certificate and masters and above
respectively. And 38%, 46% awarded diploma and degree. There is positive and strong relationship
between trust, communication, Conflict handling, commitment, satisfaction and customer retention
with Pearson Correlation of 0.653, 0.727, 0.779, 0.679, and 0.708 respectively.
There is strong and positive relationship between Trust and customer retention with a beta value of
0.033, at 95% confidence level leading to acceptance of the alternative hypothesis that is Trust has
significant and positive effect on customer retention. It is also shown in the finding that there is a
strong positive and significant relationship between commitment and customer retention with a beta
value of 0.320, at 95% confidence level, confirming the acceptance of the alternative hypothesis
that Commitment has significant and positive effect on customer retention. The result produced that
there is a strong positive and significant relationship between conflict handling and customer
retention with a beta value of 0.611, at 95% confidence level leading to acceptance the alternative
hypothesis that Conflict Handling will have significant and positive effect on customer retention.
The relationship between Communication and customer retention discovered to be strong positive
and significant with a beta value of 0.612, at 95% confidence level which confirm that the
alternative hypothesis that is Communication will have significant and positive effect on credit
43
customer retention. The result of linear regression as presented illustrate there is a positive and
significant relationship between Customer Satisfaction and credit customer retention with a beta
value of 0.268, at 95% confidence level, supporting the alternative hypothesis that Customer
Satisfaction has significant and positive effect on customer retention. .
Generally the findings of the study confirm that all the five variables of relationship marketing (tr,
commitment, conflict handling, customer satisfaction and communication) have a strong positive
and significant relationship with customer retention with different extent. Among the variable it was
learnt that communication is the most important variable and conflict handling which is the second
followed by customer satisfaction and commitment and the least one is trust.
5.3 Conclusions
The finding of the study suggests that all five variables of relationship marketing (trust,
commitment, Conflict handling, communication, customer satisfaction and customer retention)
have strong and significant relationship with customer retention. Mainly communication and
conflict handling dimensions in the relationship marketing contribute to the customer retention.
The study concluded that the bank employees informed the bank customers on the new services,
banks provided prompt information, and bank resolved their problems and the bank utilized in
transmitting information to customers. Customers at the selected banks are satisfied with
communication practice at the banks hence customer retention.
Conflict is inevitable since customers have different need, wants and way of doing business, thus, it
is up to the employees of the bank to handle such conflict systematically to retain their customer.
The study concluded that there is a strong positive and significant relationship between Conflict
Handling and credit customer retention. Effective conflict handling can have a dramatic impact on
customer retention rates, redirect the spread of damaging word of mouth, and improve end result
performance. It is also learnt that Effective resolution of customer problems and relationship
marketing are linked closely in terms of their mutual interest in customer satisfaction, trust, and
commitment.
In this regard the study concluded commitment has strong positive and significant relationship with
customer retention, it represents exchange partners‟ desire to maintain valued relationship and thus
their relational motivation toward partners. The study concluded that customer retention in the
banking sector is determined by communication effectiveness between the bank customers and the
44
bank employees. The study result revealed that there is a strong positive and significant relationship
between communication and credit customer retention.
The result of this study showed a positive and significant effect of satisfaction on customer
retention; albeit the extent of influence is lower than the other variables of relationship marketing. If
the banks manage to provide quality services which are reliable and prompt, banks resolved their
concerns and were offered services in conducive environment with high standard banking layout
and amenities, then customer will be satisfied and have great chance of revisiting the bank.
The study concluded that trust is a determinant of customer retention in the banking industry, since
there is strong and positive relationship between Trust and customer retention. The bank customers
trusted the bank services, transactions handling, bank resolving their concerns and information
confidentiality. Thus, the bank customers are retained for the bank due to trust. Relationship
marketing involves forming bonds with customers by meeting their needs and honoring
commitments. Results indicate that commitment dimension of customer relationship marketing is
very important for bank customer retention.
In general, it is possible to conclude that there is a positive relationship between customers‟

relationship marketing and their retention with commercial bank of Ethiopia DebreBrhan district,
which is supported by many theoretical and empirical literatures.
5.4 Recommendations
This study attempts to examine the effect of customer relationship marketing on customer retention
the case of commercial bank of Ethiopia DebreBrehan district. On the basis of the findings and
conclusions reached in this study, the following recommendations are forwarded on each variable
of relationship marketing in particular and relation marketing in general.
On communication, the study also proved that there is positive and significant relationship between
communication and customer retention, the following recommendations are forwarded for further
improvement on this variable.
 The banks should upgrade their technology so as to serve their customers by use of latest
editions of technology.
 The banks should be responsive to complaints, provide timely and prompt information to
their customers
45
On Conflict handling, Conflict is inevitable since customers have different need, wants and way of
doing business, thus, it is up to the employees of the bank to handle such conflict systematically to
retain their customer. The study had the following recommendations
 Be sure to allow the client to fully express her feelings and thoughts (it can be written or
oral), it might be enough to just know that their concerns have been voiced, and they have
been heard.
 Use conflict handling techniques that will lead to win-win situation.
On commitment, the commitment-trust theory of relationship marketing says that two fundamental
factors trust and commitment must exist for a relationship to be successful
 In forming bonds with customers by meeting their needs and honoring commitments.
 Understanding the customer need and want ahead of time so you can meet the expectations
of your customer which lead you to customer satisfaction.
 Building trust through shared values.
 Creating cooperative behaviors that allow both parties to fulfill their needs.
On customer satisfaction, satisfaction is an antecedent to customer retention and that a satisfied

customer with services provided with the bank will likely remain to be a loyal customer to the bank.
To do so the following recommendation shall be considered.
 Studies have suggested that reliability is the most important dimension in determining a
quality banking service, thus, the banks should Ensure that promise are kept in terms of
service delivery at all time.
 Having well qualified and experienced staff is vital in order to deliver quality service.
Thus, the banks should make the process by considering not only the technical qualification
of the employees but also his/her soft skills like personality and attitude in interacting with
customers. Training is considered to be essential for improving quality. Therefore, the
banks should develop training programs to improve the Staff‟ skill, friendliness and
courtesy.
 Also effective teamwork tends to develop capabilities for delivering a high level of service
quality, since working as a mutually reinforcing team creates an environment where
customer satisfaction can be increased and employee motivation sustained.
 Having well facilitated working environment in terms of furniture, Information technology
and office layout.
46
On Trust, Even though there is strong positive and strong relationship between trust and credit
customer retention, the researcher forward the following, recommendations on trust:
 Improvement of trust levels between the bank customers and bank employees in order to
retain their customers.
 The banks to increase mutual trust by showing hospitality, degree of honesty, transparency
so as to build customer trust with the bank and bank employees.
 The openness and honesty between bank customers, bank employees and bank in order to
retain their customers.
Finally, it is highly recommended that commercial bank of Ethiopia Debre Berhan district need to
improve their practice of Relationship Marketing in order to retain customers in all levels era of
communication, conflict handling, commitment, customer satisfaction and trust.
5.4 DIRECTIONS FOR FUTURES STUDY

At the end this study was conducted to assess the Effect of customer relationship marketing on
customer retention in Commercial Bank of Ethiopia Debre Berhan District at five branches.
However, future research may investigate the role of customer relationship marketing on customer
retention comparative analysis of Commercial Bank of Ethiopian with private Banks. This study
can be also further investigated by adding more relationship marketing dimensions like conflict
handling and other variables which contributes for customer retention.
47
References
Assefa, M. Tufa, G., & Megburu, M. (2015) The impact of customer relationship marketing on
customer satisfaction. Zenith international journal of Business economics and management
research. 5(6). p. 215-228.
Balaji, M. (2009) Customer satisfaction with Indian mobile services, IUP Journal of
Management Research. 8(10). p. 52-62.
Bergeron, J. (2008) Pleasantly surprising clients: A tactic in relationship marketing for building
competitive advantage in the financial services sector. Canadian Journal of
Administrative Sciences. Vol. 25. p. 171-184.
Borg, W. & Gall, M. (1989) Education research methods in education. London: Routeledge.
Bosch, K, Talt, M. & Venter, E. (2006) Business Management: An Entrepreneurial
Perspective
Port Elizabeth: Brazilian Experience. Journal of Internet Banking and Commerce.
1(3). P. 23-39.
Brown, S. (2002) Opportunities for business to business service scholarship: A commentary.
Australian marketing Journal. 10(1). p. 10-12.
Browning, K. (2007) Conflict management and resolution (online) available http//: www
associated content.com.
Chen, J. & Popovich, K. (2003) Understanding customer relationship management (CRM):
people, processes and technology. Business process management journal.9(5). p. 672-688
Cherinet, B. (2015) The effect of relationship marketing on customers‟ loyalty: Evidence from
Zemen Bank. Emerging Market Journal. 5(2). p. 58.

48
Cochran, W. (1963) Sampling Techniques. 2ndEd. New York: John Wiley and Sons, Inc.
00000DeWulf, K., Odekerken-Schröder, G. & Lacobucci, D. (2001) Investments in consumer
relationships: A cross-country and cross-industry exploration. Journal of Marketing.
65(4). p. 25-56.
Dwyer, R., & Sejo, O. (1987) Developing buyer seller relationships. Journal of marketing,
51(3). p.564-586.
Elleni, E. (2014) The influence of customer relationship marketing to improve customer loyalty:
A case of commercial bank of Ethiopia (Addis Ababa), Addis Ababa University.
Elliot, E. (2009) Integrated service marketing communication. Cape Town: Juta &Company.
Farootan, D. (2008) How can email marketing help me keep customers and build
customer relationships.
Geyskens, I., Jan – Benedict, S., Lisa, S. & Nirmalya, K. (1996) The effects of trust and
interdependence on relationship commitment a trans-Atlantic study. International
Journal of research in marketing. 13(4). P. 23-48.
Gilaninia, G., Almani, A., Pournaserani, A. & Mousalan, S. (2011) Relationship marketing: A
new approach to marketing in the third millennium. Australian journal of basic and
applied sciences. 5(5). p. 787-799.
Gledhill, M. (2008) Stakeholder Marketing. Oxford: Elsevier LTD.
Grounaris, S., Tzempelikos, P. & Chatzipanagiotou, K. (2007) The relationships of
customerperceived value, satisfaction, loyalty and behavioral intentions, Journal of
Relationship Marketing. 6(1). p. 63-87.
Gummesson, E. (2002) Total relationship marketing, 2nded. Butterworth-Heinemann, Oxford;
Gupta, D., Sharma, K. & Rashid. A.(2009) Handbook of research on enterprise system. US,
49
information science reference.
Hollensen, S. (2003) Marketing management: A Relationship Approach, Essex. Financial Times
Prentice Hall.
Homan, C. (1958) Social behavior its elementary forms. International Journal of Bank
Marketing.1(2) p.45-80.
Hu, H., Kandampully, J., & Juwaheer, D. (2009) Relationships and impacts of service quality,
perceived value, customer satisfaction, and image: An empirical study. The Service
Industries Journal. 5(9). p 111-125.
Israel, G. (1992) Sampling the Evidence of extension program impact. Program Evaluation and
Organizational Development, IFAS, University of Florida. PEOD.
Jones, M. & Suh, J. (2000) Transaction-specific satisfaction and overall satisfaction: An
empirical analysis. Journal of Services Marketing. 4(2). P. 147-159.
Jorgensen, N. (2001) A contingency model for the company‟s use of relationship building, 17
IMP Conference.
Kandampully, J. & Suhartanto, D. (2000). Customer loyalty in the hotel industry: the role of
customer satisfaction and image. International Journal of Contemporary Hospitality
Management. 2(2).
Kate, A, (2014) Customer retention strategies. European Journal of Business and Management.
6(15). p. 31-39.
Kotler, P. & Keller, L. (2007) Marketing Management. Praha: Grada Publishing.
Kotler, P. & Armstrong, G. (2008) Marketing Principle, Pearson Education Upper Saddle
River, New Jersey.
Kotler & Tait (2010) Principles of Marketing: Global and African Perspectives. Cape Town:
50
Pearson.
Kothari, C. (2009) Research Methodology: Methods and Techniques. 2nded. New Delhi: New
Age International Publishers.
Kothari, R. (2004) Research Methodology Methods and Techniques. 2nd
ED. New Age International Publishers, India.
Kuria, W. (2010) A survey of relationship marketing practices among commercial banks in
Kenya. MBA thesis. University of Nairobi, Kenya.
Mauri, A. (2003) Origins and early development of banking in Ethiopia: Working Paper,
Marzo, Milano.
Mbithi, W. (2013) Challenges of customer retention‟ in the Kenyan Banking sector. A case
study of KCB Treasury square branch, Mombasa. International journal of sciences.
basic and applied research.12(1). p. 124-132.
Mbugua, M. (2014) The effects of brand loyalty of customer retention in Kenyan banking
sector. A case of Barclays Bank, Ruaraka Branch, and Nairobi unpublished MBA
Thesis. Nairobi: University of Nairobi.
Msoka C. & Msoka E. (2014) Determinants of customer retention in Commercial Banks in
Tanzania. Journal of finance and bank management. 2(1). p. 9-30.
Morgan, R. & Hunt, S. (1994) The commitment-trust theory of relationship. International
journal of organizational analysis. 5(9). p. 56-78.
Mugenda, O. & Mugenda, G.(2003) Research Methods: Quantitative and Qualitative
Approaches. Nairobi. ACTS Press.
Mugenda, O. M., & Mugenda, A. G. (1999). Research methods qualitative and quantitative
approaches. Nairobi: Acts press.

51
Narteh, B. (2009) Relationship marketing and customer satisfaction in the Ghanaian Banking
Sector. International journal of retail. 23(4). p. 542-557.
Narteh, B., & Kuada, J. (2014) Customer satisfaction with retail Banking Services in Ghana.
Thunderbird international business review. 56(4) p. 353-371.
NBE (2015/16) National Bank of Ethiopia, annual report,
http://www.nbe.gov.et/publications/annualreport.html accessed on February 2017.
Ndubisi, N. (2007) Relationship marketing and customer loyalty: Marketing intelligence and
planning.
Njane, J. (2013) An investigation on factors affecting customer retention in Barclays Bank of
Kenya. Unpublished MBA Thesis,. Nairobi: University of Nairobi.
Ogongo, E. (2014) Customer retention strategies adopted by commercial Banks in Kenya.
Nairobi: Unpublished MBA thesis, University of Nairobi.
Palmatier, R., Dant, P., Grewal, D. & Evans, R. (2006) Factors influencing the effectiveness of
relationship marketing: A meta-analysis. Journal of marketing. 70(4). p. 136-153.
Palmatier, W. (2008) Inter-firm relational drivers of customer value. Journal of Marketing.
72(4). p. 76-89.
Patton, Q. (2002) Qualitative research and evaluation methods. 3 Rd ED. Thousand, Oaks,CA,
Sage.
Rakshi N. (2010) Factorial and regression analyses of relationship marketing antecedents and
customer loyalty: The Ethiopian telecommunications perspective. International
journal electronic customer relationship management. 4(2). P. 23-50.
Rasheed, F. & Abadi, M. (2014) Impact of service quality, trust and perceived value on
customer loyalty in Malaysia Services Industries. Procedia-social and behavioral

52
sciences. 24(15). p. 54-67.
Ro-King, M. (2005) The value concept and relationship marketing. European Journal of
Marketing. 30 (2). p. 23-45.
Rootman, T. & Sharp, G. (2011) Relationship marketing and customer retention lesson for
South African Banks. Southern African Business Review. 15(11). p. 50-68.
Rootman, C. (2006) The influence of customer relationship management on the service quality
of banks. Nelson Mandela Metropolitan University.
Salami, P. (2005) Impact of customer relationship management (CRM) in the Iran banking
sector. International journal of organizational innovation. (54(1). p.25-60.
Sin, L., Tse, Y., Alan, B., Yau, O., Raymond, M., Chow, M. (2005) Market orientation,
relationship marketing orientation, and business performance: The moderating effects
of economic ideology and industry type. Journal of International Marketing. 16(7).
p.656-676.
Sivadas. E. & Dwyer, F. (2000) An examination of organizational factors influencing new
product success in internal and alliance-based processes. Journal of Marketing. 64(2)
p. 31-49.
Sirdeshmukh, D., Singh, J. & Sabol, B. (2002) Consumer trust, value and loyalty in relational
exchanges, Journal of Marketing. 66(2). p. 56-66.
Soimo, V., Wagokis, J., Okello, B. (2015) Influence of relationship marketing on customer
retention. A case of commercial banking industry in Nakuru Town in Kenya.
International journal of economics, commerce and management. 7(8). p. 23-42.
Teleghani, G. (2011) The role of relationship marketing in customer orientation process in the
banking industry nwith focus on loyalty. International journal of Business and social
53
science. 5(8). p.56-68.
Thuo, K. (2008) Principles of marketing. 2nd ED. Nairobi: Acrocodile Publishing Ltd.
Wanjiku, A. (2013) Relationship marketing and customer loyalty in mobile telecommunication
industry in Nairobi, Kenya. MBA thesis. Kenya: University of Nairobi.
Wood, J. (2008) The effect of buyers‟ perceptions of environmental uncertainty on satisfaction
and loyalty. Journal of marketing theory and practice. 16(4). p. 309-320.
Xu, M. & Walton, J. (2005) Gaining customer knowledge through analytical CRM, industrial
Management and data systems.
Yu, J., Wu, L., Chiao, Y. & Tai, H. (2005) Perceived quality, customer satisfaction, and
customer loyalty: The case of Lexus in Taiwan. Total quality management and business
excellence. 5(6).p.23-51.
54
APPENDIX
Survey - Questionnaire (English)
Debre Berhan University
College of Business and Economics
Department of Management
MBA Program
Dear participant:
This questionnaire is designed to collect data for the master thesis on the topic “The effect of
customer relationship marketing on customer retention: the case of commercial bank of
Ethiopia DebreBerhan district.‟„ For partial fulfillment of the requirements for Masters of
Arts Degree in Business Administration (MBA). The study intends for academic purpose only and
the information you provide will be kept confidential. Besides, the outputs of the study will help as
input for the companies‟ decision makers. I, therefore, kindly request you to fill the questionnaire
honestly and accurately, so that quality of information you provide determines the ultimate
reliability of the study.
General Instructions
There is no need for writing your name Please put a “√” mark on your choice in the space provided
Thank you very much, in advance for your cooperation.
If you have any question regarding this questionnaire, please contact
Name:Elias Getachew - Mobile phone: 0913023873 E-mail: eliasgetachew832@gmail.com
55
INSTRUCTIONS FOR COMPLETION OF THE FORM
Please read each question and tick the statement or choose the number that clearly reflects your
view, you can also express your views where necessary.
Section A. Demographic Characteristics
Sex/ Gender: Male Female
Age : 18 - 30years 31 - 40 years 41 - 50 years 51 - 60 years
Educational Background:
High school and below Certificate 9-12 Diploma degree

Master‟s and above
1. What type of services are you using in the bank? (you can choose more than one)
Saving account current account Credit Money Transfer
5. For how long have you been a credit customer of this bank?
1 – 3 years 4 - 7 years 8 - 10 years above 10 years
Part 2. Customer satisfaction with relation to service quality dimensions.
Please rank your views using 1-5 on whether you are satisfied or not with the service
provided by the bank and the general environment under which it operates
1= strongly disagree 2= Disagree 3= Neutral 4=Agree 5= strongly agree
No Trust 1 2 3 4 5
1 The bank is very concerned with security for my

transaction
2 The bank's promises are reliable
3 Given my past business relationship, the bank is
trustworthy
4 The bank fulfills its obligation to its customers
5 I have confidence in the bank's service
6 The bank has the ability to meet its promise
7 I have trust on bank products/ services offered to me
8 I have Trust on the way the bank handles my
concerns
9 I trust the bank on my loan information
56
10 I feel safe in my transaction with the bank
11 I have trust on the bank in transaction handling
Commitment 1 2 3 4 5
1 The bank makes adjustments to suit my needs.
2 The bank is flexible in serving my needs related to

services.
3 The bank offers personalized services to meet my
needs.
Conflict handling 1 2 3 4 5
1 Employees of the bank are very active to respond for

the manifestation of customer problem.
2 Employees of the bank provide fast response for the
customer question.
3 Employees of the bank have the habit of discussing
with customer when problem arises.
4 Employees of the bank are advocating the proactive
of methods of problem solving.
Customer satisfaction 1 2 3 4 5
1 I am satisfied with my past experience with the bank.

2 I have been satisfied since I became the customers of
this Bank.
3 The bank offers value for the money I pay.
4 I feel satisfied with this bank

Communication 1 2 3 4 5
1 The bank informs me on new products/ services

2 The bank offers me prompt information
3 The bank effectively resolves my complaints
4 The bank utilizes Information communication
technology in transmitting information to me
5 The bank offers me toll free helpline services
57
No Customer Retention 1 2 3 4 5
1 I am confident of giving positive word of mouth

testimonies to others about this bank.
2 I don‟t have an intention of leaving this bank in the
future.
As compared to other banks my loyalty is with this
bank.
3
4 I find it difficult to switch to other banks because of
what I get from this bank.
5 I intend using other products and services of the
bank.
6 This is my first choice.
58

The Effect of Custemor Relationship Marketing On Customer Retent

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

The Effect of Custemor Relationship Marketing On Customer Retent

Uploaded by

Copyright:

Available Formats

DEBRE BERHAN UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

MASTERS OF BUSINESS ADMINISTRATION

THE EFFECT OF CUSTOMER RELATIONSHIP MARKETING

ON CUSTOMER RETENTION: THE CASE OF COMMERCIAL BANK OF

ADVISOR: SHIEFERA BEKELE (PhD)

COLLEGE OF BUSINESS AND ECONOMICS

MASTERS OF BUSINESS AND ECONOMICS

THE EFFECT OF CUSTOMER RELATIONSHIP MARKETING

ON CUSTOMER RETENTION: THE CASE OF COMMERCIAL BANK OF

A Thesis Submitted to the Department of Management, College of Business and

Debre Berhan University

DEBRE BERHAN, ETHIOPIA

Declared by: Elias Getachew

Advisor Name: Shifera Bekele (PhD)

Internal Examiner: ____________ Signature: __________ Date: _____________

External Examiner: ____________ Signature: _________ Date: _____________

Advisor: __________________ Signature: ___________ Date: ____________

CATS-CPC- Customer Account and Transaction Service-Central Processing Center

CBE - Commercial Bank of Ethiopia

CRM - Customer Relationship Marketing

ICRM - Integrated Customer Relationship Management

POS- Point of Sales

SPSS- Statistical Package for the Social Sciences

SERVQUAL - Service Quality Measurement Tool

In the competitive marketing environment, customer relationship marketing is critical to a

A study conducted by Ogongo, (2014) on customer retention strategies adopted by commercial

Similar studies also conducted by Soimo et al (2015) on influence of relationship marketing on

1.4.1. General Objective

1.4.2. Specific Objectives

1.5. Significance of the Study

 To have a detail understanding about customer relationship marketing practice in

1.6. Scope of the Study

1.7. Limitation of the Study

2.2 The Social Exchange Theory

2.3 Relationship Marketing Theory

2.4.2 Conflict Handling

Similarly, a study on impact of customer relationship marketing on customer satisfaction in

2.4.6 Conceptual Framework

Figure 1 Conceptual framework

3.1. Research Approach

3.2 Research Design

3.3.1 Target Population

Table 1 Target population

Number of branches Name of premium customers

3.3.2 Sampling Technique

Table 2 Sample size determination

Population size Small Medium Larger

Name of strata N Nh N nh=n(Nh/N)

DebreBerhan Branch 200 476(n1) 2000 n1=200(476/2000)=47

Atse Zeryakob Branch 200 354(n2) 2000 n2=200(354/2000)=35

Debre Eba Branch 200 450(n3) 2000 n3=200(450/2000)=45

Hailmariyam Mamo Branch 200 355(n4) 2000 n4=200(355/2000)=36

Tebassie Branch 200 365(n5) 2000 n5=200(365/2000)=37

3.3.4 Source of Data

3.3.5 Primary source of data

3.3.6 Secondary source of data

3.3.8 Method of Data Analysis

3.3.9 Descriptive Statistical Analysis

3.3.10 Inferential Statistical Analysis

c) Multiple Regression Analysis

X4= Conflict handling

Internal Examiner: Signature: Date: ___

External Examiner: ________ Signature: _ Date: _________

Advisor: ____________ Signature: _ Date: ________