The impact of Customer Relationship Management on Customer

Loyalty with the mediating role of Customer Satisfaction: A Case Study

of Telecom Sector of Pakistan.

SUBMITTED BY:
IDREES GUL- ROLL# 14375
HAFSAH SIDDIQUI- ROLL# 14603
KHADIJAH NADEEM- ROLL# 14595

A Research Thesis Submitted to the Department of Management Sciences in Partial

Fulfillment of the Requirements for the course Research methods and Analytical
Techniques, MBA (1.5 years)

Faculty of Management Sciences and Social Sciences, NUML

(National University of modern Languages, Islamabad
June 2024

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 Abstract

This study aims to determine the impact of Customer relationship management on customer
loyalty with the mediating role of customer satisfaction: A Case Study of Telecom Sector of Pakistan.
The study population is all customers of the telecom sector of Pakistan. The study was quantitative and
for this purpose questionnaire was the most appropriate method for data collection. An adopted
questionnaire of Chaudhuri and Holbrook, (2001) was used to collect the data. Total of 150
questionnaires were distributed among the customers of telecom sector of Pakistan while using
convenience random sampling techniques. The collected data was analyzed with help of statistical
package for social sciences (SPSS 20.0). The results showed that the Customer relationship management
significantly influences both on satisfaction and its customer loyalty. Furthermore, satisfaction also
affects its customer loyalty. Customer satisfaction plays a role as partially Mediator between the
influences of Customer relationship management on its Customer Loyalty. The Implications of this
research, the management of telecom sector of Pakistan needs to improve its Customer relationship
management program that can increase its customer loyalty.

Keywords: CRM, Satisfaction, Customer Loyalty.

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 Acknowledgement

This project would not have been completed without the mercy of Almighty Allah. The hardest
arithmetic to Master for us is to count his blessing on us. We would like to take this opportunity to
express our gratitude to all those who have extended their cooperation and helped us during the course of
study.

We are very thankful to the university’s management who provided us with an environment and different
facilities so that we can develop our skills, knowledge and gain maximum experience from field work and
become professional of tomorrow.

We are indebted to our mentor, Dr. Hafsa Zahoor, whose unwavering support and motivation were
instrumental in the successful completion of this project. Her guidance and expertise have been invaluable
to us.

At end we are very thankful to our parent’s support and prayers which motivates us during hard times and
leaded us to success.

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 Author’s Declaration

I, Idrees Gul, Hafsa Siddquie & Khadija Nadeem bearing roll no. 14375, 14603, 14595 respectively
hereby state that our project titled “The impact of Customer relationship management on customer loyalty
with the mediating role of customer satisfaction: A Case Study of Telecom Sector of Pakistan” is our
collective work and has not been submitted previously by us for taking any degree from National
University of modern languages, Islamabad or anywhere else in the country/world.

At any time if our statement is found to be incorrect even after our Graduation the National
University of modern languages (NUML) has the right to withdraw our MBA degree.

Name of Student:
Idrees gul
Hafsa Siddique
Khadija Nadeem

Date: 9/06/2024

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 Dedication

We dedicate our dissertation work to our family and our teachers. A special feeling of gratitude to
our parents; who’s words of encouragement and a push for tenacity ringing in our ears. Our Supervisor
Dr.Hafsah has never left our side and is very special mentor. We also dedicate this dissertation to all
Team members who have supported us throughout the process.

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Contents
Dedication..................................................................................................................................................5
1. INTRODUCTION.............................................................................................................................8
1.1 Background................................................................................................................................8
1.2 Problem statement.......................................................................................................................12
1.3 Research Questions..................................................................................................................13
1.4 Research Objectives.......................................................................................................................13
1.5 Significance of the study..........................................................................................................13
CHAPTER No. 2......................................................................................................................................14
2. LITERATURE REVIEW...............................................................................................................14
1.1.1. Customer relationship management...................................................................................14
1.1.2. Customer loyalty..................................................................................................................20
1.1.3. Customer satisfaction..........................................................................................................24
1.1.4. Service quality......................................................................................................................27
1.1.5. Employee behavior..............................................................................................................29
2.2 HYPOTHESIS DEVELOPMENT.............................................................................................34
2.2.2 Effect of Customer Relationship Management on Customer Satisfaction.......................34
2.2.3 Effect of Satisfaction on Customer Loyalty.......................................................................34
2.4 RESEARCH HYPOTHESIS......................................................................................................36
CHAPTER No. 3......................................................................................................................................36
3.2 SAMPLING DESIGN..............................................................................................................37
3.2.1 Population of the study........................................................................................................37
3.2.2 Sample Size Selection......................................................................................................37
3.2.3 Sources of data collection...................................................................................................37
3.2.4 Analytical Techniques........................................................................................................37
3.2.5 Research design....................................................................................................................37
3.2.6 Unit of analysis.....................................................................................................................38
3.2.7 Research Instrument..........................................................................................................38
CHAPTER No.4.......................................................................................................................................38
...............................................................................................................................................................43

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 ...............................................................................................................................................................43
4.1. Discussion..........................................................................................................................................43
CHAPTER No. 5:.........................................................................................................................................44
5.1 DISCUSSION & CONCLUSION.....................................................................................................44
5.2. RECOMENDATIONS....................................................................................................................45
5.3. LIMITATIONS OF STUDY.......................................................................................................45
5.4. FUTURE RESEARCH INDICATIONS....................................................................................45
REFERENCES........................................................................................................................................46
Appendices / Annexures..........................................................................................................................53

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 CHAPTER No. 1

1. INTRODUCTION
1.1 Background

This research examines the impact of Customer relationship management on loyalty with the
mediating role of customer satisfaction in telecommunication sector of Pakistan. Customer relationship
management (CRM) is basis on the idea that developing a relationship with customers is the most
excellent way to find them to become loyal and that loyal customers are more profitable than non-loyal
customers. The objectives of Customer relationship management are to enhance profitability, income, and
customer satisfaction. To attain Customer relationship management, a companywide set of tools,
technologies, and procedures support the relationship with the customer to enhance sales. Therefore,
Customer relationship management is mainly a strategic business and process issue rather than a technical
issue (Dowling, 2002). The significance of customer satisfaction cannot be dismissing while happy
customers are like free advertising. It is necessary to put the customer at the center of the business
according to its strategies, events and processes. In fact, it is easier and more profitable to sell to
presented customers than to find new ones. Organizations are ever more setting themselves strategies to
determine and make sure customer retention, and charging their employees to be more customer-focused
and service-oriented (Mohsan et al., 2011).

As Baker (2003) indicated, all businesses have been affected to some degree of root and branch
evolution which is happened in the global market place. Now, not only the organizations aim to satisfy
the customers but they attempt to do this more efficiently and effectively that the other rivals in
competitive market place to attain their goals (Kotler and Armstrong, 2011). The most important goal that
companies follow up is to maintain customer loyal to the firm so they more focus on customer centric
approach in their organizational and marketing strategies (Jain and Singh, 2002). Bowen and Chen (2001)
said that having satisfied customers is not sufficient, there has to be really satisfied customers. This is
because customer satisfaction has to direct to customer loyalty. Sivadas and Baker-Prewitt (2000) said
“there is a rising recognition that the last objective of customer satisfaction measurement should be
customer loyalty”.

Customer relationship management (CRM) focuses on what value will customer get rather than to the
products or services to be sold by the company. Through the application of Customer relationship
management (CRM), companies are expected to be able to establish communication and a good

8
relationship with its customers. This condition is also expected that the company will not only sell and
market a product and service with good quality or competitive prices but also it is able to answer
customers' desires and needs as described by Indah and Dewi (Indah and Dewi, 2013), which can lead to
satisfaction and customer loyalty. Customer relationship management (CRM) involves all the theories
that business organizations use to improve customer retention where the ability of a business organization
to tie down their customers without losing them to other competitors. In the process of tying down their
frequent customers, businesses also thrive in improving the delivery of their services to lure many other
new customers (Litvin, et al., 2018). Successfully turning the interest of a customer to like your products
is never a comfortable journey; it is composed of various measures and provisions that businesses must
take through their employees. Some of the steps which include quality production, desirable conduct of
the employees while serving customers and the quality of aftersales, especially when customers are
frequent visitors of the business (Aljawarneh & Atan, 2018).

The ability to attract the right target market, making them buy/consume the product on a regular
basis and in high quantities and advocating for the product enabling more customers to shift from the
substitute products to your product is termed as Customer loyalty. It is often described as the ability to
generate repeat orders from the customers and securing good ratings and reviews. This in turn results in
increase in the customer base for the company as more customers shift towards the company’s products
as a result of word of mouth publicity from the existing customers. However the term is not just confined
to this as it is a continuous approach or program managed by the company directed towards keeping its
customers happy so that they in turn bring more business for the company (Hamna nasir et al).The
business can ensure maximized profits through happy and loyal customers by providing firm guarantee
with good quality products. Out of the numerous ways of achieving customer loyalty few are through
free offers, gift coupons, competitively low interest rates, trade-ins for better value, extended warranties,
rebates, and other rewards programs. Whatever be the mechanism the ultimate objective remains
expanding the customer base by adding more customers that through their word of mouth publicity and
reviews helps the company in meeting the objective of increased profitability and having and retaining
happy customers (Hamna Mushtaq et al).

There are many popular programs to entice customers towards a brand, some of which include
giving away free gifts with the products or allowing rebates to the customers or by one get one free
schemes. The company may also offer a risk free trial period to the customers to try their products, also
termed as brand name loyalty, the objective of all these schemes are to induce the customer to not only
buy the company’s product again and again but to also motivate them to try more variety of items from
the company’s portfolio of products and services. Another tool for winning loyal customers is to provide

9
excellent customer and after sales service. A company focused on increasing customer loyalty should
make an allowance for product claims and after sales service as excellent customer service is an essential
for creating and maintaining customer loyalty. This requires the company to take every possible measure
while remaining in its budgeted cost allowance to respond to the customer complains in respect of the
goods sold and replaces the goods that are faulty or to make full refunds incase the customers are not
happy with the quality of goods (M.rizwan et al).

For every business new or established retaining its existing customers has always been less cost effective
that making new customers, Existing customers not only ensure the achievement of existing level of sales
but are also more responsive to any ancillary or supplemental products that are introduced by the
company. Existing customers who are loyal to the company’s products are an effective element in
keeping the consumer education and marketing costs below the expected levels. Many companies
consider the customer experience programs as an effective tool to differentiate themselves from the
competitors. This differentiation helps in generating and developing customer loyalty through their
behavioral, cultural and intellectual association with the product, either during or after the use. Customer
management also provides a sustainable competitive advantage to the companies focusing on customer
loyalty. Customer loyalty is one of the most important aspects of marketing planning since customer
retention is more important than customer absorption (Behara et al., 2002). It is a long term commitment
from the existing customers for the repurchase of products and services (Martensen et al., 2007).
Customer loyalty is termed as a sustainable source for generation of income while on the other hand,
loyal customers are considered as the best people for marketing of products and services (Andreasen &
Lindestad., 1998).

Customer satisfaction has often been regarded as a major determinant of loyalty. Customer satisfaction is
an overall attitude formed based on the experience after customers purchase a product or use a service
(Fornell., 1992). Satisfaction is the assessment of the experience of interacting with a service provider up
to the present time, and is used by customers to predict future experience (Crosby et al., 1990).
Satisfaction is a broad feeling that is affected by the quality of service and the product, its price and other
contextual and personal factors (Zeithaml & Bitner., 2000).

Trust has been identified as a major driver of loyalty (e.g., Chaudhuri and Holbrook, 2001; Garbarino and
Johnson, 1999). A consumer who trusts in a product is more likely to develop favorable attitudes toward
it, to pay a premium price for it, to remain loyal to it, and to spread positive word-of-mouth (Chaudhuri
and Holbrook., 2001). The impact of trust on customer loyalty becomes especially relevant when
confronted with switching decisions with a high level of perceived risk and uncertainty (Lewis,

10
2002).The significance of customer satisfaction cannot be dismissing while happy customers are like free
advertising. Organizations are ever more setting themselves strategies to determine and make sure
customer retention, and charging their employees to be more customer-focused and service-oriented
(Mohsan et.al, 2011). As Baker (2003) indicates, all businesses have been affected to some degree of root
and branch evolution which is happened in the global market place. Now, not only the organizations aim
to satisfy the customers but they attempt to do this more efficiently and effectively that the other rivals in
competitive market place to attain their goals (Kotler and Armstrong, 2011).

In the past three decades, telecom industry has become active service industry subject to intense
competition and rapid growth. In Asian countries, mobile telecom growth rate is increasing rapidly. For
example in china, which has the world largest mobile telecommunication service users having a figure of
180 million subscribers and experiencing growth rate of 200% since 1990. Similarly, this wave of change
can also be witnessed in Pakistan. In Pakistan, mobile phone service was introduced in1990 and since
then this sector has never seen its past. Government of Pakistan’s prudent policies dramatically increases
the growth of this sector in a single decade. Pakistan telecommunication authority (PTA) designates that
this sector has experienced 150% growth rate from the 2003-06. Tele-density of the country touched
68.39% in 2012 reflecting growth of 6.7% from previous year. Moreover, number of mobile phone
subscribers in 2003- 2012 increases from 12 million to 109 million. Likewise, in 2012 there has been
drastic increase in the number of franchises to 31,303 which were 30,126 in 2011. This sector also plays a
significant role in the development of economy. Total telecom revenue during the year 2012 swelled to all
time high Rs.362 billion and in national exchequer, this sector contributed over Rs. 116.9 billion. This
boost in the revenues and rapid expansion exhibits a magnetic power to attract not only business
community but also the academic researchers (Massod ul Hassan et. Al,2013). Currently, in Pakistan, four
mobile telecom operators are offering their service i.e. Mobilink, Ufone, Telenor, and Zong. In line with
their vision to maximize their market share and profit, the interests of the consumers remained at their top
priority.

Previous studies highlighted the positive relationship between customer satisfaction and
organizational performance. Further review of literature suggested that customer satisfaction is positive
step towards customer loyalty which leads to gaining more profits by the firms. It is believed that
customer satisfaction alone is not enough perpetuate for customer loyalty since customer satisfaction is
conveniently anticipated whereas customer loyalty is much more complicated on enormous levels.
Specifically, more research is required to predict the variables that plays mediator to improve assessment
variables. Based on the above point of view, the authors are interested to conduct an empirical study

11
entitled: “The impact of Customer relationship management on customer loyalty with the mediating role
of customer satisfaction in telecommunication sector in Rawalpindi/ Islamabad region.

1.2 Problem statement

Customer relationship management (CRM) is a concept for managing a company’s interactions

with customers, clients, and sales prospects which can achieve financial institutions goal such as
customer satisfaction. It involves using technology to organize, automate, and synchronize business
processes. The objectives of Customer relationship management are to enhance profitability, income, and
customer satisfaction. To attain Customer relationship management, many organizations use set of tools,
technologies, and procedures to support the relationship with the customer to enhance sales. Therefore,
Customer relationship management is an issue of strategic business and process rather than a technical
one. Customer relationship management (CRM) is a concept for managing a company’s interactions with
customers, clients, and sales prospects. (Long, et. al,2019).

According to Kotler and Armstrong (Kotler and Armstrong, 2019), consumer loyalty in general
can be interpreted fidelity someone on a product, goods and services. Consumer loyalty is a manifestation
and continuation of consumer satisfaction to use the facilities and services provided by company, as well
as to be a repeated buyer of the company. Rendering to Kotler (Kotler, 2019) satisfaction is feeling happy
or disappointed someone who emerged after comparing perception / impression of the performance
(yield) of a product and expectations.

In previous studies, many researches has been done before in this area in different sectors to
investigate the impact of customer relationship management on customer loyalty with the mediating role
of customer satisfaction but not yet define this problem briefly and still more research is needed on
factors that can affect customer loyalty. According to future research recommendations this study aims to
take some other factors to investigate “the relationship between Customer relationship management and
customer loyalty with the help of the mediation of customer satisfaction in telecommunication sector of
Pakistan (Rawalpindi/Islamabad region).

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 1.3 Research Questions

On the basis of the above stated problems our research will intended to answer some questions, which are
followings:

1: Is there a significant impact of Customer relationship management on customer satisfaction?

2: Does Customer relationship management affect customer loyalty?

3: Whether there is any impact of customer satisfaction on customer loyalty?

4: To what extent does Customer relationship management program affect customer loyalty mediated by
customer satisfaction?

1.4 Research Objectives

To explore the effect of Customer relationship management (CRM) on satisfaction and its impact on
customer loyalty.

To determine the indirect effect of Customer relationship management (CRM) on customer loyalty of the
telecom sector through its customer satisfaction.

1.5 Significance of the study

The study’s academic contribution hinges on the fact that it offers a significant advancement to the body
of the current literature of Customer relationship management, most especially in the telecommunication
sector of Pakistan, as it reveals customer attraction program, customer retention program, relationship
management and customer satisfaction to influencing factors of customer’s loyalty.

The study will be very inclusive study on Customer relationship management, customer satisfaction and
customer loyalty. It will show that how customer relationship management and customer satisfaction
effect customer loyalty. Outcomes will help in motivating the corporate level, middle level managers and
employees of telecom sector to perform their jobs more effectively to make more and more effective
strategies to satisfy the needs and wants of their customers in a more effective and efficient way, that will
help them to attract new customers and retain the existing ones to develop their customer base to gain a
competitive edge in telecom sector of Pakistan

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CHAPTER No. 2

2. LITERATURE REVIEW

This chapter includes prior work done on topic of the study and is named as literature review.
Since, the topic is widely studied worldwide; therefore, there is vast literature present. The current study
aims to investigate the impact of Customer relationship management on customer loyalty with the
mediating role of customer satisfaction: A Case Study of Telecom Sector of Pakistan. Therefore, the
literature review tends to explore the said relationships between the variables in view of the previous
researchers.

1.1.1.Customer relationship management

Customer relationship management is defined as an integrated function that consists of the sale
strategy, marketing and service aiming to increase revenue from customer satisfaction (Kalakota and
Robinson, 2010). Customer relationship management is the concept of building a strong relationship
between the companies, in this case the management with customers (Sutedjo, 2011). So, Customer
relationship management is a customer service approach that focuses on building and maintaining long-
term relationships (Ardiyhanto, 2011). Based on the above point of view, the organization can focus on
the development of an important asset in the long term, a more progressive in relationships with valued
customers. CRM program is making a vision for how to transform their companies and with the advent of
time and technology, the marketing practices are also changing. The new and modern marketing is based
on acquiring knowledge regarding customers and knowing their experiences (McKenna, 1991, Payne et.
al, 2005, Payne et. al, 2006).

Customer relationship management is considered as a cycle consisting of important activities like

finding knowledge, market planning, enhancing the interaction with the customers and analysis
refinement (Buckinx et. al, 2007, Swift, 2001). Ryals and Knox (2001) are of the view that the
fundamental aspects of customer relationship management are strong relationships, customer retention,
and delivering superior and high quality services to the customers with the help of process management.
Those companies who want to implement the customer relationship management strategy should create
integration between different departments of the organization. The walls between every unit should be
broken down, especially marketing department should closely work with the IT department so that

14
customer information can be retained and utilized for the purpose of customized production and
relationship management. Since late 1980’s the trend of database marketing is amplifying which shows
the influence of IT on marketing. It facilitates the firms to maintain long term propitious relationships
(McKenna, 1991).

Customer relationship management focuses on the concept of marketing mix variables including
'four Ps' of marketing (product, price, place and promotion (E. Xevelonaki, 2005). It provides
organization with the chance to employ relationship marketing on a company successfully. CRM is
basically a technique of relationship marketing and process that enables a firm to identify, evaluate,
analyze and serve customers to improve customer relationship, so organization may able to retain market
share through existing customers, and may help to provide retaining capabilities of existing customers
(Z.S. Dimitriades, 2006).

With the initiation of internet and new technology advancement, the idea of customer
relationship management has been transformed to electronic customer relationship management (e-
customer relationship management). E-customer relationship management is a combine process of
hardware, software technology process, its useful applications in enhancing technology for customer
services and organization commitment to improve deficiency in customer service & to retain customer
(D. Norton, 2007). Ab Hamid, 2005, focused on the Electronic says CRM is a procedure to maintain its
customer relations by using the Internet and the advantages which are obtained by using the idea &
successful implementation of E-customer relationship management in an organization.

The Internet technology has changed customer relationship management into electronic customer
relationship management (ECRM), because now organizations can use Internet technologies to attract
new consumers, analyze their preferences and behaviors, and customize support and services by
providing customized services (Chan & Lam, 2009).The focus of e-customer relationship management
systems is to increase customer service, retain consumers, increase customer value benefits and use the
proper strategies to encourage customers to remain loyal (M. Zineldin, 2006). By Implementing customer
relationship management successfully can provide a lot of benefits and profits to the companies and help
to get mutual benefits for customers & service provider.( M. Almotairi,2008) .This indicates that
customer relationship management could bring many benefits for companies to enhance their ability in
the competitive market, increase profits and profit rate, reduce costs, reduce times of implementation of
new sales activities, increase awareness of small-sized target marketing and increase knowledge about
customers.

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 Nowadays, companies are trying to win the hearts of customers amid the tighter level of
competition. Efforts to win the customers’ hearts can be achieved by knowing and meeting the customers’
needs quickly and accurately (Anderson et al., 2008). Customer relationship management (CRM) is a
strategy and effort to intertwine relationships with customers and provide satisfying services to them
(Wah et al., 2008). The utilization of customer relationship management will help a company in knowing
what is expected and required by customers to create an emotional bond in order to establish a close and
open business relationship and also a two-way communication among them. Thus, customers’ loyalty can
be maintained and is not easily switch to other products or brands. Customer relationship management
appears to support the view that to develop a relationship with customers is the best way to create loyal
customers and obviously the loyal customers are more profitable than those are not (Taleghani et al.,
2011).

Customer relationship management can be defined as a managerial approach that enables a

company to identify, attract, and increase retention of profitable customers (Gronroos et al., 2000)
defines. Broadly speaking, CRM is said to be an integrated information system used to plan, schedule,
and control pre-sales and post-sales activities in a company. CRM backs up a company to provide
services to customers in real time by building a relationship with every valuable customer through the
utilization of information on the customer. Based on the information, the company can formulate
variations of deals, services, programs, ordering processes, and media usages. In addition, the company
can also carry out an analysis on the customer based on certain criteria to generate a variety of
information comes in; either questions, complaints, or suggestions from customers which often help the
company in improving products and services (Ernst et al., 2011).

Customer relationship management is a strategic approach to systematically target, monitor,

communicate and transform relevant customer data into information that underlies strategic decision
making and action (Missi et al., 2005). The goal of customer relationship management is to improve
operational efficiency, achieve an acceptable level of customer connectivity (Reid & Catterall, 2014),
manage customer relationships within the company and increase their satisfaction (Tu & Yang, 2013),
and as a consequence of all this increase revenue (Negahban, Kim & Kim, 2016). Customer relationship
management enables organizations to identify and attract new customers, as well as increase retention of
profitable customers through developing, strengthening and managing relationships with them,
considering sustainable company growth (Sharma, Goyal & Mittal, 2010). In today's competitive business
environment, key problems relate to the quality of organizational data and their integration and it is
necessary to capture customer information in real time (Missi et al., 2005). Unfortunately, the reality is
that customer relationship management classification models are outdated, unbalanced, and noisy

16
(Natchiar & Baulkani, 2014), and customer-stored data is often located in separate departments and not
linked throughout the company’s customer relationship management (Missi et al. 2005).

The problem with data quality only occurs when an organization wants to correct anomalies in
one data source or when it wants to integrate data coming from different sources into one new data
source. Due to the tendency of organizations to avoid or ignore the importance of data quality and their
integration process, we often witness the failure of customer relationship management projects (Missi et
al., 2005). Companies misunderstand that it is necessary to have large amounts of customer data, and in
fact it is much more important to have quality data (Zahay et al., 2011). In order for customer relationship
management to be successful, it is necessary to integrate three key components: business processes, the
human factor and technology (Negahban et al., 2016). Business processes need to be streamlined (because
sometimes complex processes cause data complexity) (Foss, Henderson, Murray & Stone, 2002),
employees need to be motivated by senior management and organizational culture to pay more attention
to the quality of the data collected (Peltier et al., 2013) and all this should be supported by the use of
technology that will optimize customer interaction.

As a large percentage of customer interactions will occur rather on the Internet than with
employees, technology must adapt to a changing and unpredictable market (Chen & Popovich, 2003), but
even the most sophisticated IT or business systems will not succeed if they rely on data of insufficient
quality and if they are not structured for the purpose for which they are applied (Sharma et al., 2010). In
some organizations, customer relationship management is a simple technology solution that enhances
customer targeting efforts through the use of a separate database and sales automation tools, while other
organizations see it as a tool specifically designed for 1-on-1 customer communication, which is the
responsibility of sales, call centers and marketing departments (Missi et al., 2005) cite the basic types of
data that organizations collect about customers: demographics (gender, age, marital status, education
level, home ownership, etc.) that are very stable and not very expensive, but the problem is that we can
hardly get them on an individual basis with a high level of accuracy; behavioral data (types of purchases,
payments, customer service activities, etc.) that are the easiest to predict, but are the most difficult and
expensive to obtain from external sources; psychographic data (opinions, lifestyle, personal values, etc.)
that can lead to improvement and be used to determine a customer's life stage, but the weakness is that
they indicate behavior that may be highly, partially, or marginally related to the right behavior (Missi et
al., 2005).

The model of customer relationship management is established on the foundation of maintaining

better liaison with customer to facilitate and retain them which ultimately resulting in generating loyalty

17
to enhance profitability in business (Athanasopoulou, 2012; Zeithaml et al., 1996). The customer
relationship management technology usage is anticipated to enhance the capacity of a firm for sustaining
cost-effective customer’s relationships in permitting and sharing integrated information efficiently which
ultimately facilitating efficient and effective interaction of firm and customers, analyses of consumer data,
and customization of feedbacks (Day, 2003). Customer relationship management is narrated as a process
of a firm the entire affiliation among firm and clients, with all its various range of contacts, associated
practice as well as communication components (Grönroos, 2007).

Generally, the key objectives of customer relationship management are retaining, engaging and
implementing productive customer bonding with the passage of time and upholding customer profitability
and loyalty as the time passes. (Berry, 1995; Grönroos, 2007). The two dimensions (commitment and
trust) of customer relationship management quality play a significant job in keeping relationship with the
customer for a longer period of time (Athanasopoulou, 2009; Garbarino & Johnson, 1999; Javed &
Cheema, 2017). According to the prior research, it is evident that the trust and commitment are directly
related to behavioral intention (Chaudhuri & Holbrook, 2001). The current research paper evaluates trust
as adherence and customer assertion by considering the services provided by the organization. Moreover,
the study uses the attitudinal and emotional elements of commitment in order to access the level of
customer commitment (Chaudhuri & Holbrook, 2001). These two dimensions of customer relationship
management are vital as it leads directly to customer behavior and these are the key measures for
relationship marketing advancement with the customers ((Morgan & Hunt, 1994). Morgan and Hunt
(1994), enact the leading intervening variable form of relationship promotion by the commitment & trust
theory. Likewise, trust as well as commitment together are accepted the same as intervening variable for
customer’s satisfaction and customer value towards loyalty of customer (Hennig-Thurau et al., 2002).

The Relationship marketing theory suggests that the management of customer relationships is
necessary to establish a good customer relationship, ultimately helps to maintain long-term customer
satisfaction and to create customer loyalty. In addition, the theory states that loyal customers have shown
themselves to be more advantageous than un-loyal ones for the business. Customer relationship
management's role is discussed as an aspect of business-to-customer management that encompasses
various aspects such as maintaining contacts, positive coordination and assertive protocol. Customer
relationship management is primarily responsible for attracting customers, establishing stable
relationships with consumers and sustaining a long-term relationship; managing the exact segmentation of
customers, and determining the effective communication strategy for customers in the right time. The
leadership of customer interaction needs value to boost both the company's chances of productivity and
optimum loyalty. The investment in customer relationship management strengthens customers '

18
engagement and their capacity to retain the relationship and to enable a continuing effort to improve it
(Dr. Chanchal Chawla, et al.2019).

Customer relationship management's two basic components are faith and commitment and are
seen as extremely important in emerging and preserving robust relationship amongst company & its
clients. The direct positive correlation between customer faith and customer reaction has been shown by
different studies. In the same way, the customers are more likely to remain loyal to the company with
strong faith and commitment. It thus shows that assurance & faith are 2 important elements related to
consumer behavior. The trust of the customer reflected the customer's faith in service quality and safety.
This work focuses on the 2 variables; those accountable for Customer relationship management viz. faith
and commitment. Such two components also have great importance because they facilitate a collegian
mindset that maintains the success of the advertising partnership. Morgan and hunt developed model
named "primary mediating factor" saying faith and assurance are 2 active mediators relevant to loyalty of
customer (Teerthanker Mahaveer, et al.2019).

Customer relationship management is comparatively a new concept, which arose in 1980s,

according to Reinartz & Kumar (2012) and Hollensen (2015), it has two central dimensions, human and
business dimensions, human dimension concerns responding and recognizing the human needs whereas
the business dimensions are the core components. Karjaluoto et al. (2014) and Muther (2012)
demonstrated other five dimensions for customer relationship management which are: solving problems,
customers' database, service quality, customer relationship management system integration and employee
behavior, these dimensions that identify and satisfy the business needs. Mostly, the organizations need to
use strategies, practices and technologies in their customer relationship management applications to
manage and analyze interactions with its customers. Substantially, the main aim of these principles is to
increase the efficiency and reduce the customer interactions costs as well as to increase the decision-
making process speed and also to improve the labor efficiency.

Generally, customer relationship management entails technologies, strategies, and practices used
by organizations to analyze and manage their interaction with the customers across the entire lifecycle.
Khodakarami and Chan (2014) point out that technologies used in customer relationship management
seek to automate processes in diverse areas such as management and analysis, customer support,
marketing, and sales. Moreover, Baran and Galka (2013) define the basic dimensions of customer
relationship management as the formation and maintenance of mutual loyalty between customers and the
company, constructing customer interaction, use of direct techniques of marketing, and customer
relationship personalization. Basically, these principles are aimed at increasing the efficiency and

19
reducing costs related to customer interactions; as well as improving labor efficiency and increasing
decision-making speed.

1.1.2.Customer loyalty

According to Kotler and Armstrong (Kotler and Armstrong, 2011, p. 271), consumer loyalty in general
can be interpreted fidelity someone on a product, goods and services. Consumer loyalty is a manifestation
and continuation of consumer satisfaction to use the facilities and services provided by company, as well
as to be a repeated buyer of the company. Customer loyalty is usually associated with the bond of a
reputable brand name in the market. It is the extent of attachment a customer has toward a brand (Zekiri,
2011), where customers’ attitude of brand preference is likely to change over time such as the intention to
switch (Ndubisi, 2007). Loyal customers are profitable to a business as they may refer friends to the
organization (Kheng, Mahamad, Ramayah, & Mosahab, 2010). In other words, building customer loyalty
is building sustainable competitive advantage (John; 2011; Loke et. al., 2011) leading a company to
positive market share.

Customer loyalty is viewed as an important way of assessing the company’s success. In contrast,
many organizations’ advertising strategies rely on achieving customer loyalty through the growth,
maintenance and improvement of relationships with prospective customers. Trustworthiness of customers
towards buying back attitude of customer is mere indication of loyalty. Marketing costs inevitably reduce
with an increase in loyal customers, as well as accelerating customers and market shares. The conception
of loyalty of customer and its prominence in attaining effectiveness objectives are thus promoted by
marketing analyzers. The latest literature provides enough evidence to explain the seriousness of
customer loyalty and faith. Previous studies shows that continuing optimal service leads to improved
client trust and helps develop deeply entrenched connections between companies and their customers.

The commitment factor has also proven to be an important factor in the development and promotion of
customer loyalty. The customer loyalty has a great deal of emphasis on company profitability. Customer
loyalty makes it unlikely that the tactic of rivals, such as lower prices and special promotions, allows it to
switch to another company. In the past, the element of loyalty has been very helpful as it lowers
marketing costs and allows retailers to attract more customers. In order to increase its strength, the
businesses should therefore take the initiative of exploring further aspects of customer loyalty (Chawla,
et,al 2019).

20
 There are various definitions of customer loyalty, and one of those refers to the behavior
developed by the customer, which is called repurchase behavior, thereby accounting for all the
experiences that customers have encountered throughout the usage of the products and services from
providers. The use of loyalty strategy has proved to increase customer retention level while reducing
marketing costs (Stan et al., 2013). Accordingly, in the study of Pasha and Waleed (2016), findings
revealed that perceived value, service quality, and brand have a significant impact on customer quality.
Many other studies have been developed to determine the antecedents of customer loyalty considering
that customer loyalty may vary based on many predictors. Yee et al. (2011) revealed that service quality,
customer satisfaction, and employee loyalty have a positive influence on customer loyalty, especially in
the high-contract service industry.

Examining the historical course of the studies with the subject of loyalty it is found that the
researches that try to define what loyalty is have significant space. The most basic problem encountered
in those studies is the failure to achieve a shared definition of loyalty because although customer loyalty
may be a key variable that explains keeping the customer at hand (Wong and Zhou, 2006; Pritchard and
Howard, 1997), it has been discussed in time whether loyalty is an attitude or combination of attitude and
behavior. According to the approach based on behavior, loyalty is the behavioral reaction based on
prejudice as the function of psychological processes by the decision maker in the existence of one or more
alternative in time (Jacoby and Keyner, 1973).

Behavioral approach explained loyalty based on the criteria including the share in consumption,
consumption probability, probability to consume the product again, repeated consumption behavior,
multidirectional consumption behaviors (Kumar and Shah, 2008). According to the second approach dealt
as the combination of attitude and behavior brand loyalty “is a form of repeat purchasing behavior
reflecting a conscious decision to continue buying the same brand, for brand loyalty to exist, a pattern of
repeat purchase must be accompanied by an underlying positive attitude towards the brand (Solomon et
al., 2006). This approach does not include only the past purchasing behaviors and tendencies but also
customer attitude and value systems (Sudharshan, 1995).

Consequently, according to this approach which was accepted in time, the customer realizes
loyalty in time through repeated consumption of any good or service when the customer has a positive
attitude toward the good/service or company providing the good/service (Wong and Zhou, 2006). In
addition to the difference in description within the historical course, it is found that the manner of dealing
with loyalty has changed as well. In the early time studies, (Cunningham, 1961; Tucker, 1964; Day, 1969;
Jacoby and Keyner, 1973) loyalty was used as dimensioning criteria because competition is low in the

21
period and the thought that activity would be more efficient in a market composed of loyal individuals in
terms of the effectiveness of marketing activities dominates. The purpose of the studies in this period is to
increase the efficiency and profitability of the activities through classification based on loyalty via more
loyal customers. According to Szwarc, companies failed to understand that the new customers they
obtained after 1980’s particularly through price discounts are those customers existing in the market but
in the recession in 1990’s they tended to examine the performance of marketing and sales expenses. This
tendency suggested that it was much more costly to gain new customers than to preserve the existing ones
because it is quite difficult to detect the expectations and behaviors of new customers and this requires
additional costs (Szwarc, 2005).

This situation changed the viewpoint toward loyalty and loyalty started to be perceived by the
companies and brands as a fact that should be achieved because in the existence of innovative products
and increased global competition made customer loyalty a managerial struggle (Dick and Basu, 1994).
Consequently, not only the measurement of loyalty but also management thereof came to the agenda and
the effort to search for the factors behind loyalty and achieve loyalty was based upon. The efforts to
define and manage loyalty bought the fact that loyalty may arise in different forms depending on is reality
to the agenda because the stipulation that every repurchasing may not be loyalty and may not guarantee
the future repurchasing was achieved. Sheth and Park accepted loyalty as three different tendencies
(emotive, evaluative and behavioral) (1974). Dick and Basu (1994) discussed loyalty in four dimensions
on behavior and attitude basis. They named the situation of attitude and repurchasing behavior being high
as loyalty, the situation of attitude being high and purchase repeat being low as latent loyalty, the situation
of purchase behavior is being and attitude being low as spurious loyalty and the situation of attitude and
repurchasing being low as no loyalty.

According to Oliver (1999) loyalty arises through phases; cognitive, affective, conative and
action. In the cognitive phase customer loyalty is based on the assessment of information including the
price to be determined for the product/brand, qualities etc. Affective phase is created in the context of
positive emotion toward the brand. In the conative phase the tendency toward the brand becomes
devotion and there is the tendency to stand distant from other brands. In the action which is the last phase
inertia based on the tendency to that brand started. While it is cognitive phase which is the easiest phase
to reach for the enterprise the most difficult phase is action. According to Oliver, although those phases
explain loyalty it fails to define ultimate loyalty that provides purchasing the same brand in all terms and
conditions.

22
 According to Gounaris and Stathakopoulos (2004) there are four types of loyalty on the basis of
purchase, social effect and emotional devotion to the brand:

 No Loyalty: They are those who do not purchase and while they have no interest in the brand
and social effects failed to orient to the brand.

 Covetous Loyalty: They do not purchase but emotional tie to the brand is high and this tie was
created by the social environment.

 Inertia Loyalty: They have a tendency toward the brand for habit, convenience or any other
reason without emotional tie with the brand and social effect. The customers having this nature of loyalty
can make a systematic selection among other brands but while this selection has low level of emotional
involvement and personal investment there is no devotion to the brand.

 Premium Loyalty: If the emotional tie and social effect is high while the customer purchases at
high level it is loyalty.

According to Rowley customers may demonstrate their loyalty in any one of a number of ways;
they may choose to stay with a provider, whether this continuance is defined as a relationship or not, or
they may increase the number of purchases or the frequency of their purchases or even both (Rowley,
2005). According to this approach it is a relation that shapes repurchasing that reveals the existence of
loyalty rather than repurchasing itself. Rowley took this framework on the basis of inertial and positive
attitudes including the behavioral and attitudinal dimensions, and discussed customer loyalty in 4 groups
namely, captive (inertial behavior and attitude), convenience-seeker (positive behavior and inertial
attitude), contented (inertial behavior and positive attitude) and committed (positive behavior and
attitude) according to behavioral and attitudinal dimension. Bandyopadhyay and Martell, in their study
conducted in 2007 discussed behavioral loyalty of the consumer in three groups namely those who use
single brand, those who use multi brands and those who do not use the product and anticipated the
attitudinal loyalty may be higher or lower in those three groups. Researchers defined those who have high
attitudinal loyalty and use a single brand as brand loyal and those who use multi brands as difference
seekers and those who are not users as potential purchasers and underlined that loyalty may not be toward
a single brand. Despite the differences in the definitions there is a strong conviction that “loyalty is a deep
devotion which is created for the purpose of purchase of the preferred good or service in the future and
which may not change despite changing effect and marketing effort (Oliver, 1999)”.

In this regard the characteristics of loyal customers that they require lower cost, are less sensitive
toward price, pass more time with the company and transfer positive views on favorite brands (Reichheld

23
and Teal, 1996), the cost to keep them at hand is much lower than the cost of gaining new customer
(Szwarc, 2005), they tend to purchase more and pay more (Wallace et al., 2004; Wright and Sparks, 1999;
Zeithaml et al., 1996) which are significant for enterprises provides that the subject of loyalty preserves
actuality and increases its significance gradually every day because loyalty is a significant element in
developing a sustainable competition advantage and since this advantage may be created through
marketing efforts (Dick and Basu, 1994), many producers try to achieve loyalty (Jansson-Boyd, 2010). As
it shall be explained in detail in the future in studies on loyalty, the assumption that loyalty is a conscious
behavior and attitude integrity has been recognized. However while in some of those studies clues on
what consciousness related to loyalty is, are encountered in others no assessment was made on this
assumption. In this regard it shall be useful to emphasize on the concept of customer consciousness that
directs marketing literature.

1.1.3.Customer satisfaction

According to Kotler and Keller (2012), satisfaction is “a person’s feelings of pleasure or

disappointment resulting from comparing perceived products‟ performance (or outcome) in relation to his
or her expectations”. Authors elaborate that customer is dissatisfied if expectations are not fulfilled by the
performance; satisfied in case the performance matches customer’s expectations; and delighted or highly
satisfied if his expectations are exceeded by the performance (Kotler & Keller, 2012). In the same vein,
satisfaction is the customer’s feelings in response to evaluations of his/her experience with a product. It is
the extent to which a company fulfils the needs, desires and expectations of customers. Customer
satisfaction can be measured by a number of methods. Customer satisfaction can be tracked directly by
periodic surveys. Monitoring the customer loss rate is also one of the methods that could be done
effectively by contacting customers who have stopped buying or switched to another supplier to learn the
reasons. Finally, mystery shoppers could be hired by a company to pretend potential buyers and give a
feedback on their experience, advantages and disadvantages in buying the product from a company and
competitors.

Despite the variety of customer satisfaction methods, this study will use the customer survey to
measure customer satisfaction. Asking the right question is essential in customer satisfaction surveys
(Reichheld, 2003), therefore industry characteristics must be taken into account to achieve the most
relevant results. As this is the era of customer-orientation, all firms observe customer satisfaction as an
essential factor in achieving competitive advantage and alternate growth in any sector of industry (Deng
et al., 2010; Lee, 2013). Customer’s satisfaction is the overall expectation of customers in view of

24
satisfying a need. Previous analyses describe the positive response of satisfaction towards attitudinal and
behavioral loyalty issues for instance customer purchase intentions, referrals generation, service availing
and length of relationship (Pizam et al., 2016; Zeithaml et al., 1996). Oliver (1999) conducted research on
customer loyalty and argue that loyalty is conditional in certain factors and is not accountable for
exclusively measure of loyalty (Reichheld & Teal, 1996).

Customer satisfaction means that how much the current customers are happy and motivated from
the company. It is considered very important for the firms that their customers are loyal with them
because if they are happy it will help the company to build long term relationship with these customers so
that they can buy more and more from them and also to recommend it to the other customers as well. It is
widely believed that for the growth and successful existence of any vendor or company is dependent upon
that they have large number of customers available in the market. (Dr. Boohene Rosemond, January
2011). Those customers that are satisfied with the company thus shows positive favorable and supportive
feedback toward the company by purchasing its product and service and also to be relation with them for
long period of time. (Jessy, December 2010).Verma and Chaudhuri (2009) cited a set of customer
satisfaction definitions that show that this concept relates to the customer's emotional response after
experiencing the firm’s products or services (AlHawary & Harahsheh, 2016; Al-Hawary, 2013 ). In
relation of the operational definition of customer satisfaction, Erma and Chaudhuri (2009) pointed out
that if the product or service exceeds the expectations of customers, it will increase the rate of repurchase
(Alolayyan et al, 2018; Al-Hawary & AL-SMERAN, 2016; Al-Hawary & Al-Menhaly, 2016; Al-
Hawary, 2013). Another dimensions that can be deduced from the same study for customer satisfaction is
trust between the company and the customer. Customer satisfaction is defined as the degree of
congruence between the perceived and expected performance by customers in terms of the value they
receive (Yim et al., 2004). The researchers added that customer relationship management’s foundation is
aimed at achieving customer satisfaction.

Particular scholars, however, concluded that customer loyalty is quite necessary to drive the
tactics of rivals, and satisfaction is unrelated to forecasting customer loyalty entirely (Teerthanker
Mahaveer, 2019).The term customer satisfaction and its importance were defined by Zeithami et al.
(1996) as, to achieve continuous success of companies in the long run, the need to emphasize customer
satisfaction is a key consideration. In other words, satisfaction can only be met when the performance
generated by companies exceeds customer expectations. In this context, various authors and researchers
have accentuated the importance of customer satisfaction as well as dissatisfaction as related to the
company’s achievement of success and the incurrence of failures in the aspect of meeting the expectations
of both the customers and the company (Chidambaram & Ramachandran, 2012; Kheng et al., 2010). Lau

25
and Cheung (2013) specifically explained that meeting the expectations of the customers will not only
provide customer satisfaction but also develop customer loyalty that will then lessen the cases of
customer loss rates or improve the retention rate. Service quality delivery is considered an important
factor to consider in establishing customer satisfaction and the relationship that will be developed
between the company and the customers (Amin & Isa, 2008).

Customers’ satisfaction plays various important roles in the sustainability and success of business
organizations. For example, customer satisfaction provides organizations with a leading measure of
customer loyalty; repurchase intentions, and advocacy for the product or organization (Jacka & Keller,
2013). Furthermore, organizations may also use customer satisfaction as a point of differentiation in
competitive markets especially in promotion activities (Dehgan et al, 2012). Customer satisfaction also
increases the lifetime value of customers as it plays a vital role in determining the amount of money
generated by the customer for the business; while the costs of retaining existing customers is also lower
than the cost of acquiring new customers (Sun & Kim et al., 2013). Finally, Customer satisfaction also
reduces the potential for negative word of mouth since unsatisfied customers tend to complain about their
experience to other potential customers, thus harming the organizations or brand’s reputation and sales
(Rego et al, 2013).Customer satisfaction is exhibited by repurchase behavior. It entails fulfillment of
primary needs of the customers associated with the product (Guzzo., 2010). Zeithaml and Bitner (2000)
defined customer satisfaction as customer’s response to the services he receives in relation to fulfillment
of his desires and expectations. Customer satisfaction is defined as delivering required service to
customers that may generate a positive attitude towards a particular brand used (Rizwan et al., 2013).

In definition customer satisfaction is known as key for achievement of goals in service

environment, it evolves around meeting and exceeding customer needs and demands (Slater SF, 1994).
Customer’s behavior after the purchase of tangible or non-tangible products also determines the
satisfaction levels of the customers (Krystallis, et al., 2014). The past studies have recorded the positive
effect of customer satisfaction on dimensions of customer loyalty such as purchasing behavior, service
consumption, duration of relationship and customer reference (Seiders K, 2014). However, some
researcher argued that loyalty of customer is very necessary element to drive competitors’ strategies
therefore satisfaction is unrelated to completely predict customer loyalty (Sayani H (2015). Additionally,
(Tjiptono, 2011) defines customer satisfaction as an emotional response to the evaluation of the
consumption experience of a product or service.

1.1.4. Service quality

26
 Today, people do not only expect high quality in telecom sector, but demand quality
improvement in all areas. Quality applies in all public or private sectors. Quality varies according to the
expectations and wishes of the customers, the structure of the society, and its development and habits
(Bozkurt, 1995). According to (Parasuraman et al., 1988) service quality is the difference between the
customer’s expectations of the service and the customer’s perception of the service. Grönroos (1984), on
the other hand, claimed that the quality of service, the expectations in the mind of the customer, and the
thoughts that occur after the service has been experienced are stages of evaluation. Cronin and Taylor
(1992) noted that the most important factor in service quality is customer opinion. Customers evaluate
and interpret many features related to the quality of the service they purchase from their own
perspectives. In other words, they compare the expected service with the perceived service. If the
expected service is better than the perceived service, the quality does not satisfy the customer. If the
perceived service is better than the expected service, it can be said that the service quality satisfies the
customer. In summary, if services that meet the expectations are offered to customers, the service quality
can be increased (Okumuş & Duygun, 2008).

The most important condition for increasing service quality is to determine the expectations of the
customers, since service quality is a process carried out by all employees in the enterprise (Wu & Cheng,
2013). Determining how service quality is perceived by customers is important for ensuring the continuity
of businesses in a competitive environment (Grönroos, 1984; Grönroos, 2001). While the quality of
service perceived by the customer is effective in purchasing behaviour and customer satisfaction, the
customer’s perception of the service affects customer loyalty (Caruana, 2002). In the rapidly growing and
developing service sector, the concept of quality is an important factor for restaurants, as in all businesses
that produce services (Markovic et al., 2010). Businesses that produce quality services stand out from
their competitors by increasing their market volume, profit potential, and customer loyalty (Zeithaml et
al., 1990). While identifying the methods for determining the needs of customers, businesses aim to
provide more affordable and higher quality services to their customers than their competitors by focusing
on quality (Küçükaltan, 2007).

Services could be defined as ‘Services are deeds, processes, and performances’ (Zeithaml &
Bitner, 1996) ‘An activity, benefit, or satisfaction offered for sale that is essentially intangible and does
not result in the ownership of anything’ (Kotler et al., 2013). ‘An act or performance that creates benefits
for customers by bringing about a desired change in or on behalf of the recipient’ (Lovelock & Wright,
1999). Services are strongly linked to quality and are assessed on various parameters. The customer’s
evaluation of service quality is not only their subjective assessment of services meet- ing the set standards
but also their evaluation of performance in the process of service delivery. Customer usually carries prior

27
expectations from the services that they are going to utilize. The discrepancy which is measured as a gap
between the prior expectations of the customer before receiving the service and the perception formed by
the customer post receipt of the service is called perceived service quality (Grönroos, 1984). Service
Quality, thus, can be defined as the discrepancy between consumer’s perceptions of services and their
expectations about that firm offering such services (Bolton et al., 1991).

Some previous studies have found that service quality has a significant impact on customer
satisfaction (Miranda et al., 2017). Assert that service quality is the customer’s perceived value of the
service by comparing between perceived quality and service expectation. Meesala and Paul (2018) have
investigated the link between service quality, customer satisfaction and customer loyalty in 40 private
Indian Hospitals. They found that service quality has a significant impact on customer satisfaction.
Furthermore, Vera and Trujillo (2013) have found that customer satisfaction is a consequence of service
quality. Accordingly, we argue that service quality has a relationship with customer satisfaction (Miranda
et al., 2017).Service quality is referred to as the degree of an individual’s satisfaction and reported as a
necessary factor in repetition and existence. The literature has given attention to exploring the concept of
service quality, as it is based on two aspects, including i) the suitable dimension of SQ (Kang & James,
2004), ii) the operationalization aspect of SQ (Abdullah, 2006). Various research scholars have defined
the concept of service quality as a form of an attitude unrelated to satisfaction but associated with
perception of performance (Parasuraman, Zeithaml, & Berry, 1985). Further, from an educational
perspective, the explanation of service quality is the difference between expectation and perception about
actual delivered goods (O’Neill & Palmer, 2004). The literature has discussed the concept of service
quality and its relations with other variables in different sectors, especially in the educational sector (Ong,
2012). On the other hand, various scholars have criticized the operational aspect of service quality
(Trivellas & Dargenidou, 2009).

Research scholars have conducted studies to determine the service quality, and developed models
in marketing literature to determine the elements of service quality. The model named as SERVQUAL
was based on i) tangible: physical facilities, personals, communication and equipment; ii) reliability:
deliver the promised service in a precise way; iii) response: willing to assist consumers; iv) assurance:
knowledge possessed by employees, ability to gain confidence and trust of consumers; v) empathy: care,
attention to consumers to fulfill their needs. Service quality addresses the gap between performances and
expectations of consumers, the quality standards are met if performance exceeds expectations. Simply,
SERVQUAL serves the central idea to bridge the gap between perception and expectations (Thaichon et
al., 2012). Previously studies have been conducted to examine the influential variables, including quality
of network, customer service, security, value and support of website to provide the service quality to

28
users. The study entails the network quality that addresses the errors, response time and down-up loading
patterns (Vlachos & Vrechopoulos, 2008). The study was conducted on the telecom industry, and quality
of network was considered as a key factor in the satisfaction of consumers (Ahn, Han, & Lee, 2006).
Further, scholars have suggested to focus on adding value to business operations for increases in
satisfaction levels of consumers and service quality. (Abdolvand et al., 2006). Various studies have
considered the influence of customer service, knowledge, professionalism, web support and technical
know-how to satisfy the customer, which contribute to retaining and engaging them as loyal customers
for longer time periods (Thaichon et al., 2012).

1.1.5.Employee behavior

Productive work behavior is defined as when “an employee’s behavior contributes positively to
the goals and objectives of the organization” (Jex and Britt, 2008) and is considered both in-role
behaviors necessary to meet formal job requirements and extra-role, or discretionary behavior not
formally rewarded but promoting effective organizational functioning. OCB (an extra-role behavior) is a
bi-dimensional construct, with individually directed organization citizenship behavior (OCBI), a helping
behavior (i.e. helping new employees or others who have heavy workloads), contributing indirectly to the
overall goals of the organization by helping the supervisor (Masterson et al., 2000). Organization-directed
organization citizenship behavior (OCBO) is another dimension of OCB that directly benefits
organizational goals (i.e. advance leave notices attendance at work above the norm; see Williams and
Anderson, 1991). Putting in and extra-role behaviors in the exchange perspective, it has been argued that
behaviors (including OCBO and OCBI) are “employees’ currency for exchange with both the supervisor
and organization” (Aryee et al., 2002) and contribute (in) directly to the achievement of organizations’
strategic and operational goals (Aryee et al., 2002).
In line with social exchange theory, we argue that employable workers are more likely to
contribute to positive behavior and thus, in-role OCBI and OCBO through the process of reciprocity
(Gergen, 1969). Social exchange theory is concerned with mutual investments and perceived obligations
that exist between two parties, such as an employee and an organization (Blau, 1964). According to the
theory, receipts of benefits from the exchanging partner bring about feelings of gratitude, trust and guilt
(i.e. underinvestment). In contrast, feelings of resentment are experienced whenever their provisions of
benefits are not reciprocated by the exchanging partner (i.e. overinvestment). Employees’ (in) tangible
investment (e.g. contributing time, skills advancement training, and work effort) and existence of

29
perceived obligation between employer and employee are at the core of social exchange theory (Blau,
1964).

Employee behavior is considered ethical when it is “morally accepted as ‘good’ and ‘right’ as
opposed to ‘bad’ or ‘wrong’ in a particular setting” (Sims 1992). In this paper, we focus on organizational
citizenship behavior and deviant workplace behavior as two important types of voluntary employee non-
task behaviors (Sackett et al. 2006). As they reflect behaviors “with reference to the norms of the social
context” (Bennett and Robinson 2003) and therefore also with reference to social expectations of what is
“good” and “right” versus “bad” and “wrong,” they both incorporate an ethical component.
Organizational citizenship behavior is “individual behavior that is discretionary, not directly or explicitly
recognized by the formal reward system, and in the aggregate, promotes the efficient and effective
functioning of the organization” (Organ 1988). It means “going beyond the call of duty, surpassing what
one should do” (Bennett and Robinson 2003) It reflects aspects of helping, sportsmanship, loyalty,
compliance, initiative, and civic virtue (LePine et al. 2002).

As empirical findings show, organizational citizenship behavior can be a manifestation of

individuals’ ethicality (Turnipseed 2002) and individuals’ ethical behavior (Baker et al. 2006). It may
enhance the social good (Kacmar et al. 2011; Organ et al. 2006) when both the organization and its
stakeholders within and outside the organization benefit from its positive effects on employees (e.g.,
higher performance, lower turnover, lower absenteeism) and the organization (e.g., higher productivity,
higher efficiency, lower costs, higher customer satisfaction ( Podsakoff et al. 2009).

Deviant workplace behavior, in contrast, is “voluntary behavior that violates significant

organizational norms and in so doing threatens the well-being of an organization, its members, or both”
(Robinson and Bennett 1995). It means “doing what one should not do” (Bennett and Robin- son 2003). It
reflects aspects of inappropriate physical and verbal actions as well as inappropriate actions with regard to
property, productivity, and efficiency (Gruys and Sackett 2003; Robinson and Bennett 1995) and overlaps
substantially with unethical behavior (Treviño et al. 2006). Deviant workplace behavior has negative
effects on employees (e.g., higher stress, higher withdrawal) and organizations (e.g., lower productivity,
higher costs; Bennett and Robinson 2003), which may harm both the organization and its stake- holders
within and outside the organization and therefore threaten the social good ( Robin- son and Bennett
1995).

An organization’s ethical culture exerts a strong influence on behavior (Treviño et al. 1998) by
encouraging ethical behavior and discouraging unethical behavior. According to the corporate ethical

30
virtue model (Kaptein 2008), an organization’s ethicality is reflected in “the extent to which the
organizational culture stimulates employees to act ethically and prevents them from acting unethically”
(Kangas et al. 2014). An organization that is perceived as demonstrating the ethical virtue of
supportability is seen as stimulating employees’ “identification with, involvement in and commitment to
the normative expectations of the organization” (Kaptein 2008). Tyler and Blader’s (2005) results imply
that when employees’ identification with the organization’s values is encouraged, their intrinsic
motivation to comply with the organization’s rules and standards is higher. Individuals are then likely to
act in accordance with the organization’s ethical virtues (Baker et al. 2006) and demonstrate behaviors
incorporating an ethical component (i.e., show organizational citizenship behavior and avoid deviant
workplace behavior).

Front-line employees usually have the longest contact with customers and can, therefore, directly identify
and solve customers’ problems. Hence, the opinions or “voices” of employees are important in
maintaining service quality and fostering innovation (Stamper & Dyne, 2001). Van Dyne et al. (2003)
found that voices express job-related information, ideas, and suggestions, whereas Tangirala and
Ramanujam (2008) reported that voices include the challenging and constructive opinions, concerns, or
work-related problems expressed by employees. Voice behavior can improve organizational processes
and innovation (Argyris & Schon, 1978), prevent crises (Schwartz & Wald, 2003), and maintain
organizational performance. Senior managers often obtain the information they require from employees at
lower levels in the organization (Perlow et al., 2003).

Hall and Goody (2007) and Srivastava et al. (2006) demonstrated that if an organization’s leaders
can let employees feel empowered and supported, the sharing behavior of employees will be enhanced.
According to the theory of self-determination (Deci & Ryan, 2002), an individual’s job-related needs
include autonomy, competence, and relatedness. The theory emphasizes individual motivation and self-
determination. Therefore, giving autonomy to employees ensures that they have a stronger motivation to
carry out their tasks. Autonomy includes more opportunities for employees to participate in sharing
activities (Latham & Pinder, 2005).

2.1.6. Perceived value

Kotler and Keller (2012) define customer perceived value as “the difference between customer’s
evaluation of all the benefits and all the costs of an offering and the perceived alternatives”. They extend
the concept by describing customer perceived value as the proportion between total customer value (a
bundle of economic, functional and psychological benefits such as product, services, personnel, image
value) and total customer costs (monetary, time, energy, psychic costs). According to Hutt and Speh

31
(2007), customer value is the customer’s perception and evaluation of how useful the relationship with a
supplier is in terms of benefits received and sacrifices made.

Furthermore, Hutt and Speh (2007) distinguish two types of benefits: “core benefits” that are core
requirements for a customer-supplier relationship and “add-on benefits” reflecting attributes that are
typically not required but create added value in a customer supplier relationship. In line with previous
definitions, other authors define customer value as a comparison of weighted “get” and “give” attributes
or as a ratio of perceived benefits received and perceived sacrifices. Authors highlight the word
“perceived” because both benefits and sacrifices are subjective to a certain level (Christopher, Payne, &
Ballantyne, 2008). According to all the definitions above, it is obvious that customer perceived value can
be described as the difference between customers’ perception of the benefits they believe they will derive
from a purchase compared to the costs they will have to pay. Despite the homogeneity of customer
perceived value definitions, the dimensions of customer perceived value offered by authors are very
diverse. Naumann (1995) has suggested that customer’s perceived value consist of 5 components: price,
product quality, service quality, image and relationship between a customer and a vendor. According to
Sheth, Newman and Gross (1991), five basic types of value exist that are derived from customers‟ needs.
These are: Functional value which is understood as perceived utility derived from ability to perform its
functional, practical or physical purposes.

Kotler (2016) Customer Perceived Value is also called the value perceived by the customer is the
difference between prospective customers for all benefits and costs of perceived and alternative offers.
According to The perceived value of customers is usually regarded as an exchange between two parties,
one party gets a profit from the purchase and the other party receives benefits by consuming the product
or service (Javeed et.al, 2017). Naami et al. (2017) the perceived value is defined as an evaluation of the
customer from the costs paid to obtain certain goods and services and benefits found from certain goods
or services. Jamrozy et al. (2016) Companies involved in creating value when they design and promote
their products to prospective customers. The customer will evaluate the perceived value of the company's
offerings and competitors in making the decision to consume. Lin et al. (2013) the perceived value has a
strong impact beyond the satisfaction of new customers who switch from competitors because customers
have accumulated shopping experience and value awareness. Customer perception will form a loyalty in
the presence of other important factors that are considered important by customers, namely things that
feel positive and a comfortable experience (Keshavarz et al. 2017)

The significance of the customer is generally seen as the negotiation among two parties, one of
which receives the monetary value and another receives the advantage of consuming services of products.

32
Value interpretation is complex as it is measured solely by customers. It is therefore a consumer who sets
the standard and metric, rather than the manufacturer, for the product and service. Thus, it is commonly
believed that there is a great opportunity to build faith and devotion between target customers, leading to
high customer loyalty. Another researcher indicated that it could help to gain modest benefit in the market
place through improving the customer relationship quality of the firm through the promotion and
retention of the component of customer's trust and commitment (Vipin Jain, et.al 2019).

Customer value is defined as a trade-off between the benefits of consuming products and services
and the costs perceived by the customer (Slater and Narver, 1994). Value is a complex concept in that,
similar to service quality, it is perceived by the customer. Therefore, it is the customer who defines the
product/service's value, not the supplier (Vargo and Lusch, 2004). Also, customer value depends on
personal characteristics such as prior product knowledge and financial resources as well as on
circumstances such as time frame and the location of purchasing or using a product/service (Leroi-
Werelds et al., 2014). As such, providing customers with value is regarded as a strategic tool to attracting
and retaining customers, building customer loyalty, thereby contributing significantly to the success of the
service providers (Wang et al., 2004; Zeithaml et al., 1996). Hence, it is expected that by offering greater
customer value, service providers can promote trust and commitment that eventually develop more loyal
customers. Wang et al. (2004) posit that by driving CRM, service firms are capable of delivering superior
customer value that is fundamental in building and sustaining competitive advantage. Also, research
suggests that perceived customer value has a positive, indirect impact on behavioral intentions (Cronin et
al., 2000).

Customer value is commonly consider as tradeoff between two parties, one party getting the
financial value and the other party receive benefit by the consumption of products or services (Rust RT, et
al 1995). The perception of value is convolute as it is purely evaluated by consumers. Hence, it is a
customer who set standard and measure for product and service rather than supplier (Vargo SL &Lusch
RF (2004). The customer values also rely on many other attributes which includes financial resources,
knowledge about the product and location of the outlet or service center (Leroi-Werelds S, et.al 2014).
The development of strategies for creating customer value is a key to attract attention of new customers,
develop and maintain a good relationship with them and for gaining customer loyalty (Vargo SL& Lusch
RF (2004). Therefore, it is a common believe that by creating high customer value among the target
customer there is a high possibility of enhancing trust and commitment which leads to gaining high
customer loyalty. Another researcher suggested that by improving Customer relationship management
quality in the firm, it can helps to obtain competitive advantage in the market place by promoting and
retaining the element of trust and commitment among the customers (Wang Y et. Al 2004).

33
 2.2 HYPOTHESIS DEVELOPMENT

2.2.1 Effect of Customer Relationship Management on Customer Loyalty

Customer relationship management (CRM) is a strategy focusing on creating customer satisfaction

and long-term relationships by integrating several functional areas of the company to achieve competitive
advantage (Indah and Dewi, 2013 et., al). Findings of researches conducted by (Ardiyhanto, 2011) and
Ariyanti (Ariyanti, 2006) show that there are significantly Customer relationship management on
customer loyalty. This means that the better implementation of customer relationship management in a
business unit, it had a positive impact on customer loyalty. Therefore, customer relationship
management’s applications allow companies to leverage information from all points of the box with the
customer, whether it is via web, call center, or through marketing and servicing staff in the field. Based
on the above description, it can be concluded that the better Customer relationship management program
implemented by the company, the more customers to be loyal to the products/ services produced by the
company.

2.2.2 Effect of Customer Relationship Management on Customer Satisfaction

Customer relationship management (CRM) is a method to attract, to maintain and to improve
customer satisfaction and strengthen relationships with customer (Tung, 1997). Furthermore, Customer
relationship management (CRM) provides data and information relating to customers, such as in shopping
behavior, habits in consuming products, and others (Agrawal, 2004). These data and information are used
to improve understanding how to communicate with customers in order to create value and customer
satisfaction (Agrawal, 2004). From the above description, it can be concluded that Customer relationship
management influence customer satisfaction. In other words, the better Customer relationship
management, the higher the level of customer satisfaction is.

2.2.3 Effect of Satisfaction on Customer Loyalty

Parasuraman in (Lupiyoadi, 2011) states that it is the feeling of satisfaction after evaluating the product
experience. Lupiyoadi also added that customer’s satisfaction has great potential to become loyal, so it
will be a loyal customer who will use products. The higher Customer confidence will increase the love
for the product/ Service and also make customers believe that these brands are the best, and it maybe
even customers would recommend products to the general public. The higher the level of customer
satisfaction, the more it will increase customer loyalty.

34
 2.2.4 Indirect effect of Customer relationship management on Customer Loyalty
through Customer Satisfaction

Basically, sense of satisfaction and dissatisfaction of customers is the difference between expectations
and perceived performance. Thus, understanding the customer satisfaction means that the performance of
the goods or services received by consumers is at least equal to their expectation. To create customer
satisfaction, the companies that engaged in the service should be able to offer a value to gain more
customers and also have the ability to maintain customer loyalty. Then through a Customer relationship
management program that is good and right, it is expected customers will be loyal; of course, when
customers quite satisfied. In other words, Customer relationship management will have an effect on
customer loyalty is only when such customers can be satisfied. Therefore, Customer relationship
management program indirect effect on loyalty through customer satisfaction.

2.3 CONCEPTUAL FRAMEWORK

CRM
Loyalty Satisfaction Employee behavior
Quality service
Perceived value

IV MEDIATOR
DV

2.4 RESEARCH HYPOTHESIS

H1: Customer relationship management programs effect positively on customer satisfaction.

H2: Customer relationship management Program effect positively and significantly on customer loyalty
of telecommunication sector.

35
H3: Customer satisfaction effect positively and significantly on customer loyalty.

H4: There is an indirect effect of Customer relationship management program positively and significantly
on customer loyalty mediated by customer satisfaction.

CHAPTER No. 3

3.1 METHODOLOGY

Methodology chapter cover different dimensions of this study. Main philosophy behind this study to
measure the impact of Customer relationship management on customer loyalty with the mediating role of
customer satisfaction. So this philosophy contains element like type of research, methods of data
acquisition, type of research instruments, over all research design, target population, sampling technique
and size, analytical and statistical techniques applied for deduction, and ethical dimension related to this
study are covered.

3.2 SAMPLING DESIGN

3.2.1 Population of the study

In telecom industry of Pakistan there are five firms having operations. For analyzing the impact
of Customer relationship management on customer loyalty with the mediating role of customer
satisfaction the focus of study is all Customers of the Telecom Sector of Pakistan. There are almost many
customers of telecom sector in Pakistan, but Due to lack of resources, good time management and
respond accurately to questionnaire, customers from Peshawar and Islamabad regions has been selected to
collect the data. The remaining are excluded from the population of the study.

3.2.2 Sample Size Selection

Sample represents a part of population. This study uses convenience random sampling technique. Sample
from the complete data of all telecom sector selected because it is very difficult and time consuming to
take the whole population of above mentioned area to test the hypothesis. For the survey of the study

36
questionnaires were distributed among the selected customers of the selected area. The sample size is 133
respondents.

3.2.3 Sources of data collection

By the application of self-administered structured questionnaire primary data was acquired and
along with primary data, secondary data was studied via previous research work done to further support
and make sure deduction of pre-established hypothesis.

3.2.4 Analytical Techniques

Regression, reliability, correlation and descriptive statistical tools were applied for deriving
results and deduction.

3.2.5 Research design

Getting an answer to a research problem and before executing any research survey its essential to
make sure the proper design of a research plan. Comprehensive research studies always clearly defining
the required resources, time, cost, technical requirements, associated with the implementation of that
study. A good investigation has to cover clear objective of the study, time frame and horizon, sampling
techniques and size, in this study cross sectional investigation is developed to acquire the required
information.

3.2.6 Unit of analysis

How for unit of analysis is concerned. Research related information’s could be gathered from
individual, dyads, groups, organizations, cultures, specifically for this study based on requirements
individuals are unit of analysis to gain information’s for deduction and finding an answer to research
questions. In this study the unit of analysis will be distinct (individual) of the telecom sector of
Rawalpindi/ Islamabad region.

3.2.7 Research Instrument

In this research investigation the required level of information and data was obtained through
self-administered questionnaire which was comprised of three sections as following.

Section 1: The first part is the question of customer satisfaction.

Section 2: The second part contains questions about customer loyalty.

Section 3: The third part is a question of Customer relationship management.

37
CHAPTER No.4

4 FINDINGS AND ANALYSIS

In previous chapter methodological approaches and proposed statistical techniques to be applied were
discussed. This chapter will cover the main analysis and results of this study. The entire proposed tests
were applied to find the main results relevant to this study. Reliability tests were applied. For evaluating
demographic information’s descriptive analysis was conducted. For insuring more significant results
autocorrelation and normality tools were implemented. To calculate and conclude final results regression
analysis was applied. Regression analysis consists of coefficient test, ANNOVA and over all model
discussion and summary. After conducting relevant test summarizing main finding of this study was
described and the variables were presented in such a way how logically and significantly they are related
to each other.

Case Processing Summary

N %
Valid 133 100.0
Cases Excluded 0 .0
Total 133 100.0
a. List wise deletion based on all variables in the procedure.

Table 4.1 Reliability

Variables Cronbach Alpha

Customer relationship management 0.913

Customer loyalty 0.90

Customer satisfaction 0.927

Based on sample size of 133 a reliability test was conducted, according to the results of Table 4.1
minimum reliability of independent variable (customer loyalty) is 90 percent while maximum reliability
of Customer satisfaction is 92 percent.

38
Table 4.2 Descriptive Statistics of variables
N Minimum Maximum Mean Std. Deviation
CS 131 6.00 64.00 22.8168 7.25662
CL 131 4.00 70.00 16.0840 6.74940
CUSTOMER
RELATIONSHIP 131 12.00 92.00 46.6870 12.49559
MANAGEMENT
Valid N (list wise) 131

According to summary of Table 4.2 independent variable (Customer Loyalty) has the lowest mean value
16.0840 and CUSTOMER RELATIONSHIP MANAGEMENT as a dependent variable has the highest
mean vale that is 46.6870 The summary also displayed results that the lowest standard deviation vale is
6.74 for customer loyalty and the highest value is 12.49 for CUSTOMER RELATIONSHIP
MANAGEMENT, so variation from mean is minimum in this case.

Table 4.3 Age of respondents

Frequency Percent Valid Percent Cumulative Percent
Below 20 21 15.8 15.8 15.8
20-29 84 63.2 63.2 78.9
30-39 22 16.5 16.5 95.5
Valid 40-49 5 3.8 3.8 99.2
50-60 1 .8 .8 100.0
Total 133 100.0 100.0

Out of total research participants 15.6 percent are equal/under the age of 20 years, 63.2 percent are
between 20 to29, 16.5 percent are of between 40-49 while 8percent are of them are between the ages of
50 to 60 years.

Table 4.4 Gender of respondent

Frequency Percent Valid Percent Cumulative Percent
Male 70 52.6 52.6 52.6
Valid Female 63 47.4 47.4 100.0
Total 133 100.0 100.0

According to Table 4.4 out of total respondents 53 percent are female respondent while 47 percent are
male customers.

39
Table 4.5 Education of respondents
Frequency Percent Valid Percent Cumulative Percent
Intermediate or below 35 26.3 26.3 26.3
Bachelors 77 57.9 57.9 84.2
Valid Masters/MS/M.Phil. 20 15.0 15.0 99.2
PhD or Higher 1 .8 .8 100.0
Total 133 100.0 100.0
In terms of education 15 percent are having master, while 58 percent have done graduation,26 percent
have college level or below and 8 percent having PhD.

Table 4.6 Network of respondent

Frequency Percent Valid Percent Cumulative Percent
jazz 50 37.6 37.6 37.6
Ufone 27 20.3 20.3 57.9
Valid Zong 39 29.3 29.3 87.2
Telenor 17 12.8 12.8 100.0
Total 133 100.0 100.0

Table 4.7 Model Summary

Model R R Square Adjusted R Square Std. Error of the Durbin-Watson
Estimate
1 .9 .84 .273 10.65479 1.694

40
According to the results of Table 4.7 R value is 0.91 which means that there is a 91 percent correlation in
the applied variables used in this model. While R2 (Coefficient of determination) demonstrating a value
0.84 percent which describes that 28 percent variation is explained in dependent variable (CRM) by these
independent variable included in this model. While 16 percent of variation in the dependent variable is
due to other variable not included in this study. Durbin Watson test statistics value of above one indicates
that there is no error in variable values in terms of significance.

Table 4.8 ANOVAa

Model Sum of Squares Df Mean Square F Sig.
Regression 5767.026 2 2883.513 60.400 .000b
1 Residual 14531.142 128 113.525
Total 20298.168 130

ANOVA Table 4.8 indicates that the value of F statistic is 60 which is higher than 4
while significance value is 0.000 lower than 0.05 percent. It’s noticeably shows the
overall significance of this model.

Table 4.9 Coefficients

Model Unstandardized Standardized t Sig.
Correlations Collinearity
Coefficients Coefficients
Statistics
B Std. Beta
Zero- Partial Part Tolerance VIF
Error
order
(Constant) 24.619 3.258 7.557 .000
1 CS .615 .143 .357 4.304 .000 .475 .356 .322 .811 1.233
CL .499 .154 .270 3.247 .001 .425 .276 .243 .811 1.233

According to Table 4.9 while executing linear regression model on independent variable to calculate its
influence on dependent variable. The value of intercept (Constant) is minus 24.619.
Customer loyalty Coefficient is significant at 5% level. It means there is significant relationship between
Customer loyalty and dependent variable.

41
Unstandardized Coefficients beta value of Customer satisfaction is 0.615 which means that 1 unit change
in independent variable (Customer Satisfaction) will bring a variation of 0.615 units in dependent
variable (Customer relationship management).
Customer satisfaction Coefficient is significant at 5% level. Considering this value parameter are being
met that’s why the relationship between customer satisfaction and dependent variable is significant.
Unstandardized Coefficients beta value of Customer Loyalty is 0.499 which means that 1 unit change in
independent variable (Customer Loyalty) will bring a variation of 0.499 units in dependent variable
(CRM).

Fig.4.1

According to figure 4.1 Histogram demonstrate that maximum of value are falling under normal curve
range which indicates the fitness of regression good fit. Which means R 2 is expectedly high. While values
outside range are residual variation.

According to figure 4.2 majority of the values are adjacently connected to straight line observed values.
That’s an indication of regression model goodness. Outlier’s records are almost equal to nil, which shows
that residual disparity is lower and R2 model fitness is high.

42
 Fig.4.2

4.1. Discussion

Looking to the hypothesis designed previously in methodology. Based on the criteria, hypothesis H1, H2,
H3, H4, are accepted. And no variables are rejected.

Hypothesis Status

H1: Customer relationship management programs effect positively on customer Accepted

satisfaction.

H2: Customer relationship management Program effect positively and significantly on Accepted
customer loyalty of telecommunication sector.

H3: Customer satisfaction effect positively and significantly on customer loyalty. Accepted

H4: There is an indirect effect of Customer relationship management program Accepted

positively and significantly on customer loyalty mediated by customer satisfaction.

Based on deduction of this research study Customer loyalty and Customer satisfaction both were found
significantly impacting Customer relationship management. So based on hypothesis of the study these
contributing variables were accepted.

43
 CHAPTER No. 5:

5.1 DISCUSSION & CONCLUSION

Finding and results obtained after the application of statistical tool, techniques are described here
in this chapter. The results are comparatively benchmarked with past studies to insure consistencies.
Recommendation and suggestion based on the conclusion have been developed for management
authorities in telecom sector to improve their situation by designing customer relationship management.
Scopes for future researches in this area and limitation of this study have been discussed.
Primary objective of this investigation was to identify the most influencing factors towards
Customer relationship management in telecom sector of Pakistan. Also to measure and specifically
determine the elements like service quality, employee behavior and perceived value etc. and its Customer
relationship management.
A structured 150 questionnaires containing 22 items for 3 variables including dependent, independent and
intervening were distributed amongst the target respondents for this research study. Out of 150
questionnaires with a response rate of 83 percent were completely filled and returned. Regression analysis
and other statistical test were applied on 133 questionnaires to deduce the relationship between
independent, dependent variables. Primarily philosophy behind all these operation to get an understanding
how closely and rationally these variables are connected and also to measure the extent these independent
variable influencing employees’ job performance in telecom sector within Peshawar.
The results of this research have contributed empirically that the factor of Customer relationship
management are built in this research model affects both customer satisfaction and customer loyalty of
telecom sector of Pakistan. The finding is consistent with Ardiyhanto (2011) and Ariyanti (2006) who
discovered there is a positive and significant relationship between customer relationship management and
Loyalty. Additionally, this factor proved significantly affect customer satisfaction, and it also have a
significant influence on customer loyalty. Customer satisfaction factor plays a role as a partial mediating
variable between Customer relationship management and customer loyalty.

5.2. RECOMENDATIONS
Recommendations made for telecom management are as the following:

44
  Factor like service quality and perceived value has to be improved to facilitate customers in term
of services, price policies, minimize customer problems, sophisticated working arrangements, to
enhance their level of satisfaction.
 Recommendations that can be explained is in order to create more customer loyalty of telecom
sector in Pakistan, Managers should be able to increase Customer relationship management.

5.3. LIMITATIONS OF STUDY

As all scientific and empirical studies have limitations. So this research also has certain limitation
and constrains. First based on this sample size generalization of the results is not possible to other
organizations due to demographic and contextual environmental dissimilarities.
Secondly cross-sectional approach narrowing an opportunity to engage the research participants over
different time period.

5.4. FUTURE RESEARCH INDICATIONS

While addressing the same area with relatively a larger sample size across diversified industries
empirical studies could be conducted. Additionally by incorporating some other variable like moderating
and some other factors in the model can better evaluate the contextual atmosphere more comprehensively
for the generalization of research deductions and findings.

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 Appendices / Annexures
Questionnaire

Respected Sir/Madam,

The fundamental objective of formulating this questionnaire is to measure and investigate the impact of
Customer relationship management on customer loyalty with the mediating role of customer satisfaction:
A Case Study of Telecom Sector of Pakistan.

Your cooperation and response in this regard will be highly appreciated and would be confidently an
excellent contribution towards the main findings and analysis of this study. The information provided by
customers will remain anonymous, confidential and will be exclusively used for academic purpose only.

Section1: Demographics

Gender:
a. MALE
b. FEMALE

Qualification:
a. Ph D or Higher b. Masters/MS/M.Phill
c. Bachelors d. Intermediate or Below

Age:
a. 50 - 60 b. 40 – 49
c. 30 - 39 d. 20 – 29
e. Below 20

Network:
Please state the name of your current network:

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Strongly Disagree Disagree Neutral Agree Strongly Agree

1 2 3 4 5

S.NO QUESTIONS 1 2 3 4 5

Customer satisfaction

1 Overall I am satisfied with the specific experience I have so

far with the services I used.

2 Did our product/service meet your expectations?

3 How likely are you to recommend this product / service to

friends and family?

4 To what extent did our customer service team meet your

expectations?

5 How would you rate your recent customer service call?

6 How often do you seek assistance from customer support?

Customer loyalty

1 I consider myself to be loyal to the services I used.

2 I recommend this mobile service to someone who seeks my

advice.
3 I get good value for my money.

4 I consider the service I am using my first choice in the next

few years.
Customer relationship management

1 My mobile service is of high quality.

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2 It is likely that the mobile service I am using is very high
quality.
3 It is likely that the mobile service is of very consistent
quality.
4 It is likely that the mobile service offers excellent features.

5 I consider the company’s pricing policy as fair.

6 I consider the company’s pricing policy as ethical.

7 I consider the company’s pricing policy as acceptable.

8 I paid a fair price for the mobile service I am using.

9 Employees will have the knowledge to do their job well

according to the customer demand.
10 Employees give personal attention to their customers.

11 Employees are well dressed and neat in appearance.

12 The behavior of employees instills confidence in customers.

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