UNIVERSITY OF GONDAR

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UNIVERSITY OF GONDAR

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MARKETING MANAGEMENT

The Impact of Customer Relationship Marketing on the Market Performance: The Case of

Dashen Brewery S.C

A Master’s Thesis Submitted to Department of Marketing Management for the Partial

Fulfillment of Master of Arts Degree (MA) Award in Marketing Management

Prepared by:

Samuel Asmare Id No. GUE/7275/0

Advisors: Professor Kopala venu Gobal

Mr. Aschalew Adane (BSC, MSC)

March, 2019

Gondar, Ethiopia

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Dashen Brewery S.C



Prepared by:




March, 2019

Gondar, Ethiopia

i





Dashen Brewery S.C



Prepared by:




March, 2019

Gondar, Ethiopia

ii


Dashen Brewery S.C

Prepared by:




Approved by Examining Board

______________________________________ ______________________

AdvisorSignature

______________________________________ ______________________

External Examiner Signature

___________________________________________________________

Internal Examiner Signature

March, 2019

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Gondar, Ethiopia

DECLARATION

The undersigned graduate student, hereby declare that this thesis is my original work, and it has

not been presented for a degree in any other university and all source of the materials used for

this thesis have been duly acknowledged

Name: Samuel Asmare

Signature…………….



Place: MA program in College of Business and Economics, Department of Marketing

Management, University of Gondar

March, 2019

Gondar, Ethiopia

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CERTIFICATE OF ORIGINALITY

This is to certify that Samuel Asmare has carried out his research workon the topic entitled: The

Impact of Customer Relationship Marketing on the Market Performance The case of Dashen

Brewery S.C. The work is original in nature and is suitable for submission for the reward ofthe

MA Degree in Marketing Management.

Name: Samuel Asmare

Signature :……………


Mr. Aschalew Adane (BSC, MSC)Signature :……………

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Acknowledgement

First of all, I would like to express my sincere gratitude to my advisor, Mr. Aschalew Adane

(BSC, MA)for his genuine support, helpful ideas, and kindresponses during the entire phases of

my thesis. And I wish to present my special thanks to all respondents who spent their valuable

time in filling questionnaires. My special thanks also go to my families especially to my Wife

Haregewoyn Birhanu Shuferaw, My son Yonada Samuel and Sipara Samuel, and My Brother

Daniel Tekle for giving their time and love. And I would like to express my gratitude to all my

friends especially to Mr. Manegerew Mola and Mr. Bewketu Muluye who assisted me in

different aspects throughout my study. And my final thanks also go to My Company Dashen

Brewery which sponsored me to complete this academic program.

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Table of contents

Contents Pages

Acknowledgement………………………………………………………………..……….…… I

Table of Contents……………………..…………………………………………………………II

List of Tables ………………………………………………………………….…….………..…IV

List of Figures……………………………………………………………………………………V

Acronyms ……………………………………………………………………………………….VI

Abstract …………………………………………………………………………………..…….VII

CHAPTER ONE: INTRODUCTION…………………………………………………………....1

1.1. Background of the Study…………………………………………………….……………....1

1.2. Statement of the Problem…………………………………………………….……………....3

1.3. Objectives of the Study……………………………………………………………………....5

1.3.1. General Objective…………………………………………………….…………………....5

1.3.2. Specific Objectives………………………………………………………………………...5

1.4. Research questions………………………………………………………………………..…5

1.5. Significance of the Study……………………………………………………..…………..….5

1.6. Scope of the Study……………………………………………………………..….…….…...6

1.7. Limitation of the Study………………………………………………………..…….…….…6

CHAPTER TWO: REVIEW OF THE RELATED LITERATURE …………………….…….....7

2.1 The concept of customer relation marketing and marketing performance……….……….......7

2.2 Customer Behavior……………………………………………………………….……...…....9

2.3. Factors influencing Customer Behavior………………………………………………….......9

2.3.1 Cultural Factors………………………………………………………….…………...…..9

2.3.2 Social Factors………………………………………………………………………......9

2.2.3 Personal Factors…………………………………………………………………...….....10

2.2.4Psychological Factors………………………………………………………………….11

2.4. Customer Relationship Marketing Definition……………………………………...………..11

2.5 Aims of Relationship Marketing………………………………………………….…….……12

2.6 Customer Relationship Marketing ……………………………………………….……….…13

2.7 Relationship- Duration …………………………………………………………...………….15

2.8 the importance of customer satisfaction …………………………………………………………….……15

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2.9 Customer relationship marketing and customer satisfaction research’s ………….………16

2.10 The Difference between this Study and other Studies………………………………...……16

CHAPTER THREE: METHODOLOGY……………………………………………….……….18

3.1. Research Design……………………………………………………………………………..18

3.2. Study area……………………………….……………………………………………..…….18

3.3. Instrument of data collection…………………………………………………………..……18

3.4. Source of data………………………………………………..………………………..…….19

3.5. Study population………………………………………………….…………………………19

3.6. Sampling technique and sample size………………………………………………………..19

3. 7. Methods of Data Analysis and Model specification………………………………………..21

3.7.1. Methods of Data Analysis………………………………………………………………21

3. 7.2. Model specification……………………………………………………………………21

CHAPTER FOUR: RESULTS AND DISCUSSION……………………………………………23

4.1 Demographic and socio-economic characteristics of sample population………………...….23

4.2 Relationships between customer relation market and market performance…………………23

4.3. Determinant factors of customer relation market on market performance……………….…27

CHAPTER FIVE: CONCLUSION AND RECOMMENDATIONS………………………...….33

5.1 Conclusion …………………………………………………………………………………..33

5.2 Recommendations……………………………………………………………………………34

5.3 Limitation and Directions for Future Research ……………………………………………. 35

References………………………..……………………………………………….…….36

Appendix……………………………………………………………………………...….40

List of tables

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Table 3.1: Distribution of Sample Households by the study areas………………………………20

Table 4.3 Early Stages of Developing a Relationship…………………….…………….……….24

Table 4.4 the Starting Relationship……………………………………………………...…..….25

Table 4.5 once a relationship has been established………………..…………………..…………26

Table 4.6 the General relationship marketing criteria………………………………..………….26

Table 4.7 Model Summary………………………………………………………………..….….28

Table 4.8 ANOVA to test the model…………………………………………………………….29

Table 4.9 multiple regression model result for determinants of market performance……...……31

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List of figures

Figure2.1: Conceptual Framework ………………………………………………………...……17

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Acronyms

CRM Customer relationship marketing

BTL Below the line

ATL Above the line

BGIBusiness Group

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Abstract

The subject of customer relation on market performance is of great importance for beer

industries that want to be competitive in marketplace. Currently, customer relation on marketing

performance is attracting the attention of beerindustries. The purpose of this study was to

investigate the impact of customer relationship marketing on market performance Dashen

Brewery S.C as a case study. Primary data were collected and the researcher used quantitative

research approach to test the proposed hypothesis and draw a solid conclusion. The target

population of the study was customers of all beer sales. The study was addressed using cross-

sectional survey design using systematic sampling methods to get the eligible respondents. Beer

industries should follow a customer-oriented strategy to cope with the challenges in business

nowadays since this can improve customer relationship and thus help the firm to reduce the cost

of marketing, improve and stabilize revenues, and adapt in a timely and suitable adequate way to

changes in customers’ profiles or preferences. The results regarded with research question

number one included about the firm’s four phases of activity category as the early stage of

development relationship, the starting stage, once conduct in relationship marketing and the

general relationship marketing on the market performance of Dashenbeer.The second research

question verified about the determinant factors that influence on the Customer Relationship

marketing on the Market Performance.

Key words; CRM, Market performance, customer need and customer satisfaction

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Chapter One

Introduction

1.1 Background of the study

Customers are the life Blood of any organization. Without customers, a firm has no revenues, no

profits andtherefore no market value. This simple fact is not lost on most senior executives. In a

worldwide survey of 681 senior executives conducted by The Economist during October–

December 2002, 65% of the respondents reported customers as their main focus over the next

three years compared to only 18% who reported shareholders as their main focus (The

Economist 2003). Oddly enough, while senior executives recognize the importance of customers,

they still rely heavily on financial measures because customer metrics are not clearly defined

(Ittner and Larcker 1996).

Relationships today are working in a highly competitive and rapidly changing work

environment.Top management knows the importance of establishing strong relationships with

customers to ensure long-term profitability and sustainable core revenues.

Nowadays, the main marketing focus is shifting towards customers. Over the past fifteen years, a

major shift has occurred in the ways that beerindustries deal with their customers. This change

came about when companies recognized that a sustainable competitive advantage in the global

economy, increasingly, requires companies to become trusted participants in various networks or

sets of strategic alliances (Morgan and Hunt, 1994). Relationship marketing has emerged over

the years as an exciting area of marketing that focuses on building long-term relationships with

customers. Customer relationship marketing is moving to become an integral part of the

marketing management function (Altonen, 2004). There is general agreement that the quality of

the relationship between the parties involved is an important determinant of the permanenceand

intensityof the relationship and the consequent success of relationship-marketing

practicesGwinner et al, Dwayne D. Germeler (1998).

Based on the above, relationship marketing has received increasing attention in both marketing

theory and practice. The strategy of relationship marketing is particularly important to the beer

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industries because of the tangible nature of a beer and their high level of customer interaction. A

key feature of the strategy of relationship marketing is that it not only results in increased

customer sales and company profitability, but it also provides a sustainable competitive

advantage to a product firm as the tangible aspects of a relationship are not easily duplicated by

competitors (Reichheld and Sasser, 1990). Consequently, there is a growing interest in the

subject of relationship marketing. More and more firms are focusing on strong firm-customer

relationships(Ndubisi, 2004). Enhancement and focus on CRM building creates many benefits

for firms and customers. By building a relationship with customers, firms can gain quality

sources of marketing intelligence for better planning of marketing strategy. As more evidence

shows that customer satisfaction and profitability are directly related, it is vital for Beer to

develop long term sustainable customer relationships.

Ethiopia, the developing country, has shown a fast incremental moving trend of country wide

economic status. In 2012, 2013, 2014 and 2015 the country registered a 12.7%, 11% ,11.6% and

11% increment trend respectively and this economic development create an opportunity for the

increment of the per capital income of the society. With a binding force of this continuous

economic growth, the Ethiopian beer market shows an increasing trend in succeeding years.

Particularly, starting from the recent 3 years, the beer market environment become very stiff due

to domestic breweries strengthen their production capacity and also design a new marketing

strategies to survive in the market and the new entrant of very massive and internationally

experienced breweries in the country ( Heineken, Diageo, Bavaria breweries, BGI and Dashen),

Dashen brewery annual bulletin (2017).

In the existing Ethiopian beer industry, 5 breweriescompanies compete with different product

lines and brand portfolios BGI Ethiopia (St.George, Castle, Amber, Raya and Zebidar),

Heineken Ethiopian (Bedele, Harar and Walya), Dashen brewery (Dashen,Jano and Balageru),

Daigeoin 2012(Meta and Azmera beer) and Habesha brewery. The newly entrant breweries

(Samillore A/Ababa) are also expected to come to the market in 2020 E.C fiscal year with a

cumulative interval of (850,000HL-7,000,000 HL) production capacity and sales volume ,this

also change the shape of the current beer market situation in the future.St George’s brewery is

the oldest in Ethiopia established 94 years ago in 1915. It has a long history, tradition and

heritage of delivering quality beer through its flagship brand St. Georges.Heineken (Harar 1976

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E.C. and Bedele 1985 E.C.) both set up by government to create job opportunities. During the

socialist time, most industries were owned by the government and Barley grew in Bedele area.

Meta was already supplying Addis, So Bedele was meant to supply the West and some of the

North and Harar the East and most of the South(Dashen brewery annual bulletin (2017).

Ethiopian beer market shows 15%-16% industry growth rate with a per consumption rate of 7%

per consumer annually. The total size of the current beer market reaches 9,320,000HLwithout

considering breweries expansion program and new entrant’s potential capacity. The current

Ethiopian beer market is led by Dashen, Heineken and BGI Ethiopian. But it is changing that

Heineken Ethiopia be a market competing brand through expanding its production capacity,

introducing new brand portfolios and designing a new market penetration pricing strategy.

1.2. Statement of the problem

There is no doubt that responding to customers’ needs, maintaining customers’ relationship

needs, Sailing patterns and behaviors, is one of the most important factors that organizations use

to maintain a competitive advantage. In order to select the proper marketing strategy, brewery

factory should have good data about their customers purchase and sales behaviors,competitors,

and markets. One of the best approaches to achieve the above is to use customer relationship

marketing and customer satisfaction surveys to provide the best indications of what drives

customer satisfaction. Accordingly, it is necessary to conduct a research that identifies the

specific components of customer relationship marketing that support customers’ satisfaction.

This creates a challenge that has a practical dimension. Recent studies on marketing strategies

have called for research that links product, pricing, promotion and distribution standardization

should directly influence firms’ capabilities, more specifically, the firm’s sales, customer and

financial performance(Mohammed (2015), (Özsomer and Simonin 2004), Hrebiniak and

Lawrence (2005)). To mediate the impact, marketing strategy has been a focus of

organizations and a tool for attaining overall firmperformance.

Many researchers have emphasized the importance of promotional mix to customer related

markets as a valuabletool for achieving performance. Sales, financial and customer performance

is achieved through promotional mix by gaining experience in the opportunities and problems

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arising in specific markets, boosting communication, personalizing relationships, and cultivating

a team spirit with customers abroad(Raju, P.S. et al., 2011). The study by Smirnova

(2011)examined six promotion-related variables, i.e., advertising, marketing promotion, personal

selling, trade fairs, personal visits, and promotion adaptation, for their effects on performance.

The distribution strategy carries a critical role in dealing with delivery (door to door distribution)

time that influences the marketing performance of the firm. The effectiveness and efficiency in

the delivery time of the products constitutes a key to total firm performance in overseas markets,

as it affects the firm's operations in terms of competitiveness and success in the market

(Vagizovaet, al., 2013). The results of the study by Smirnova (2011) exhibited a positive

correlation between distribution channel and marketing performance. In addition, significant

findings on delivery time which is a result of distribution structures put in place by a firm were

also observed to be related to sales volumeand certain composite performance measures.

This study wasillustrating through analysis and interpretation, relying on scientific methodology

that forms its content. The research problem is to answer the following questions:

1. is there an impact from practicing customer relationship marketing on market performance?

2. Does the implementation of customer relationship marketing strategies raise market

performance?

3. What are the main independentvariables of customer relationship marketing that influence

market performance?

4. Are there any differences of customer relationship marketing impact on market

performancedue to the market place in three study sites?

As there isa little knowledge about the impact of customer relationship marketing on market

performance of beer inthree study area market, this particular research is directed towards

addressing this gap by giving a detailed data about the issue. The study was conducted in three

areas Central Gondar(Ambagiyorgis) and N/Gondar(Debark and Dabat)where the potential

number of beer customer (Outlet) is estimated to be about320 (Dashenbrewery, 2016).

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1.3. Objectives of the study

1.3.1 General objective

The general objective of the study is to analyze the impact of CRM on market performance

1.3.2 Specific objectives of the study

More specifically the study focuses on:

1. To investigate the relationship between customer relationship marketing and marketing

performance.

2. To find out determinant factors of customer relationship marketing on the market

performance.

3. Is there customer relationship value add to the company or not.

1.4. Research questions

This study was conducted to answer the following questions:

1. Are there significant differences between customer relationship marketing and marketing

performance based on the evaluation criteria?

The evaluation criteria are:

Early Stages of Developing a Relationship

Starting a Relationship

Once a relationship has been established

The General relationship marketing criteria

2. What are the determinant factors of customer relationship marketing on the

marketperformance?

1.5. Significance of the study

This study had a considerable significance both for marketers and researchers

For Marketer

The finding of this study assisted marketers to look at the impact of customer relationship on

market performance of beer among their customers which in turn would help them to evaluates

and reshape their marketing strategies.

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For Researcher

The finding of this research are potentially believed to be a spring board for other researchers to

carry rigorous researches in the area of marketing performance to carry out more comprehensive

research.Besides, it was also prompt further investigations by offering preliminary information.

For Decision makers

Thestudy generally allows decision makers to draw assumption about their customers,

competitors, target markets, environmental factors, or other phenomena of concern.

1.6. Scope of the study

This research was conducted to investigate the impact of customer relationship marketingon the

market performance of Dashen beer in North two site (Debark and Dabat) and Central one site

(Wogera) Gondar zones of Amhara Regional state, Ethiopia. These three study sites have a total

of 390retailers to Dashen brewery.Therefore, the chief concern of this study was to identify the

impact ofcustomer relationship marketing on marketing performance in case of Dashen brewery.

1.7. Limitation of the study

Every research faces some limitation. No research can free from limitation, so this research is not

Free from limitation, the major limitations of this study are:

The finding of this study is not applied to all Brewery found in Ethiopia because the samples

could not represent the whole Beer factory found in Ethiopia; because of the time and money

constraint hinder the researcher to address all firms once.

When doing this thesis, during data collection, the researcher regularly visited the study sites to

communicate with customers, but they were not voluntary to devote their time especially in time

of data collection due to they gave for their working day in advance

Research Hypothesis

The hypotheses of this study to be addressed are;

H1. There is a positive impact of beer factory avail their product on time raise market

performance

H2. There is a positive impact of beer factory sales beer in fair price raise market performance

H3. There is a positive impactof open communication with marketing performance

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Chapter Two

Literature Review

In order to understand how customer relationships influencemarket performance in the beer

industry, it is important to discuss the concepts of customer behavior, including factors that

influence customer’s behavior, in general and the various factors that influence brand choice and

Sales ofdifferent product in particular. Further other researchers’ view point in the area must also

be discussed.

A study conducted in Sri-lanka showed that customer relationship marketing is contributing to

the market performance by 50.6% and remaining 49.4% can be attributed by other by factors.

Mentzer (1995) conducted a survey on 124 companies and found that 75% of the companies

questioned had customer satisfaction in their mission statement as one of their goals; 59% had

customer service in their mission statement and 49% had customer orientation in their mission

statement.

2.1 The concept of CRM and marketing performance

As a logical result of the appearance of the concept ‘’ Relationship Marketing’’ since the 1920s,

the concept‘’ Customer Relationship Management’’ (CRM) has been brought to attention in late

nineties, especially among the academics and partitions. The new concept has directed

attention towards various vital aspects, including the necessity of direct relationship between

customers and markets, the important of keeping current customer, as well as the inevitability

building long-term relationships with customers instead of the customer-oriented

transaction method in order to augment the profitable of the institutions, especially in

today’s increasingly competitive economy (Duran, 2002). Therefore, the organization has

directed their attention to CRM and abundant investing in the necessary infrastructure, with

special concern the great advance in information technology (Duran, 2002). Some considered,

therefore, that improving the performance could be achieves through directing more

attention to CRM (Demirel, 2003). Now, CMR is consideredone of the most important targets in

about 60% of the projects around the world. Great advance in technology helped in better

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dividing of the market territories, enhancing communications with customers, providing an

environment rich with information so as to contribute in improving efficient strategies to deal

with customers.

With regard to the notion of a marketing performance measure, Clark (1999, p. 712) stated that

“performance history suggests that marketing performance measures have moved in three

consistent directions over the years: first, from financial to non-financial output measures;

second, from output toinput measures; and third, from uni-dimensional to multidimensional

measures.” Nevertheless, the assessment of performance remains an important but elusive

concept. It is important because consensual measures of performance would promote scholarly

investigation, and clarify managerial decisions (Bonoma& Clark 1988). It is elusive because

marketers have continually looked unsuccessfully for clear, present, and reliable signals of

performance by which marketing merit could be judged (Bonoma& Clark 1988).While much

work has gone into researching the performance marketing equation (Bonoma& Clark 1988;

Clark 1999), achieving a coherent view of the performance measures of marketing has remained

a difficult and generally unrewarding business. “Indeed, perhaps no other concept in marketing’s

short history has proven as stubbornly resistant to conceptualization, definition, or application”

(Bonama& Clark 1988, p. 1).

The following are some literature which support to impact of customer relationship

marketing,Vannarajah and Jude Leon (2011) said Customer Relationship Marketing (CRM)

has impact on market performance. Furthermore, positive customer relationship marketing

impact customer retention.Nelson OlyNdubisi (2006) highlighted that CRM variables like

attention to issues of trust, commitment, communication, and conflict handling have a

significant effect on customer loyalty and predict a good proportion of the variance in customer

loyalty. Carmen CamareroIzquierdo, Gutierrz (2005) identified the dimension of CRM

such as attraction, commitment, and loyalty effect on the market performance as compared to

the economic performance. Jorgenson, (2001) said the positive CRM is the only way that a

company can obtain a permanent competitive advantage and as a result ensure its own survival

and growth. It implies that relationshipbuilding is considered to be a key factor to success.

Mekenna 1991; Shani and Chalasani (1991) mentioned CRM attempts to involve and intergrades

customers and infrastructural partners into a firm’s developmental and marketing activities.

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2.2Customer Behavior

Kotler(1977 and 2001) thought thatthe aim of marketing is to meet and satisfy target customers’

needs and wants. The field of customer behavior studies how individuals, groups and

organizations select, buy, use and dispose of goods, services, ideas or experiences to satisfy their

needs and desires. Understanding customer behavior and ―knowing customer is never simple.

Customers may say one thing but do another. They may not be in touch with their deeper

motivations. They may respond to influences that change their mind at the last minute. Small

companies, such as a corner grocery store and huge corporations such as Whirlpool, stand to

profit from understanding how and why their consumers buy. Philip Kotler on marketing; “The

most important thing is to forecast wherecustomers are moving and to be in front of them”.

Engelet al. (1993), declared that customer buying and sailing behavior is directly related to the

consumption of products and services which are triggered by the decision-making process before

and after. He also expressed that the purchase behavior of the narrow explanation refers to the

buyingbehavior of individual’s substitutes the exchange of goods or services in money.

East (et al. 2008) said that purchase behavior have been accepted that most repeat purchase

decision are done as a habit and often this range of decision-making from rational to automatic is

related to the degree of involvement.

2.3.Factors influencing Customer Behavior

2.3.1 Cultural Factors

Culture is the complex of beliefs of human societies, their roles, their behavior, their values,

traditions, customs and traditions. Culture is an extremely important concept to understand

customer behavior and that needs to be examined. Culture is the sum of a shared purpose among

members of society, customs, norms and traditions, (Michael Selemonvedigerleri, Consumer

Behavior, Prentice Hall, 2006, s. 498)

2.3.2Social Factors

In addition to cultural factors a customer’s behavior is influenced by such social factors as

reference groups, family, social roles and statuses.

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a) Reference groups: A person reference group consists of all the groups that have a direct or

indirect influence on the person attitudes or behavior. Groups having a direct influence on a

person are called membership groups. Some membership groups are primary groups, such as

family, friends, neighbors and co-workers, with whom the person interacts fairly continuously

and informally. People also belong to secondary groups, such as religious, professional, and

trade-union groups, which tend to be more formal and require less continuous interactions.

b) Family: The family is the most important customer-buying and sailing organization in society,

and family members constitute the most influential primary reference group. The family has been

researched exclusively. We can distinguish between two families in the customer’s life. The

family of orientation consists of parents and siblings. From parents a person acquires an

orientation towards religion, politics and economics and a sense of personal ambition, self-worth

and love.

c) Roles and statuses: A person participates in many groups – family, clubs, and organizations.

The person‘s position in each group can be defined in terms of roles and status. A role consists of

the activities a person is expected to perform. Each role carries a status. A Supreme Court justice

has more status than a sales manager and a sales manager has more status than an office clerk.

People chose product that to sale communicate their role and status in society.

2.2.3Personal Factors

Customer’s decisions are also influenced by personal characteristics. These include the

customer’s age and Stage in life cycle, occupation, economic circumstances, lifestyle and

personality and self-concept to sale a product are factor affect.

a) Age and stage in life cycle: - People buy and sale different goods and services over a lifetime.

They eat baby food in the early years, most foods in the growing and mature years, and special

diet in the later years. Taste in clothes, furniture and recreation is also age related.

b) Lifestyle: - People from the same subculture, social class and occupation may lead quiet

different lifestyle. A lifestyle is a person‘s pattern of living in the world as expressed in

activities, interests and opinions. Lifestyle portrays the whole person‖ interacting with his/her

environment. Marketers search for relationship between their products and lifestyle groups.

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For example, a computer manufacturer might find that most computer buyers are achievement

oriented. The marketer may then aim the brand more clearly at the achiever lifestyle.

2.2.4Psychological Factors

A person‘s buying and Sailing choices are influenced by four major psychological factors –

motivation, perception, learning, beliefs and attitudes.

a) Motivation: A person has many needs at any given time. Some needs to sales to make more

profit and a good return. A motive is a need that is sufficiently pressing to drive the person to act.

b) Perception: A motivated person is ready to act. How the motivated person actually acts is

influenced by his/her perception of the situation. Perception is the process by which an

individual selects, organizes and interprets information inputs to create a meaningful picture of

the world. Perception depends not only on the physical stimuli but also on the stimuli‘s relation

to the surrounding field and on conditions within the individual. The key point is that perceptions

can vary widely among individual exposed to the same reality.

2.4 Customer Relationship Marketing Definition

First, it is worth defining the term "relationship" in the marketing context, although it is difficult

to find one. Most writers simply talk about relationships, or a move from a transactional

approach to a relational approach. Hunt and Morgan,(1995) used the term as the "personal

relationship between two people.” This definition may be attractive for a customer, but may not

be so for a supplier, who is expected to make a commitment. Radley, (1996) reported that social

psychologists make a distinction between personal and social relationships. They argued that

norms and rules of close personal relationships can be different; for example, one can say and do

things in personal relationships that would be unacceptable in social ones. The distinction

between personal and social relationships is an appropriate one for relationship marketing. In

contrast, Hakansson and Snehota (1995) defined a relationship "as mutually oriented interaction

between two reciprocally committed parties”. From a service marketing point of view, Grönroos

(2000) argued that “a relationship has developed when a customer perceives that a mutual way of

thinking exists between customer and supplier or service provider” (p. 33). Gummesson (1999)

stated that

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relationships require at least two parties who are in contact with each other, a supplier and a

customer. Grönroos (2000) argued that a relationship is by and large related to an attitude and,

from the organization viewpoint, a relationship can develop only when all or at least most

important customer contacts and interactions are relationship oriented. Therefore, organizations

should create interaction and communication processes that facilitate relationships. Bell (1998)

argued that the establishing relationships process requires that all concerned parties (individuals

either from buying or selling organizations) should like such relationships; such desire depends

on the achieved stage of the relationship. Garbarino and Johnson, (1999) described how to build

such a relationship. They reported that at the beginning of the relationship between customers

and buyers, the customers expect low relational involvement and primarily focus on overall

satisfaction with the product as an indicator for future involvement. This indicator can be turned

to be a high relational involvement when the customer uses trust and commitment as the

mediators for determining future activities with the selling firm. With respect to the Customer

Relationship Marketing definition it is not an easy task. Various authors define customer

relationship from different academic or practical perspectives. In general most of them agree that

customer relationship marketing is "a philosophy or culture that should penetrate the whole

organization" (Gofton 2001). In a general sense, relation marketing is about identifying,

establishing, maintaining, enhancing and, when necessary, terminating relationships with

customers, so that the objectives of both parties are met (Rashid, 2003). Kotler and Armstrong

(1999, p.550) illustrated this idea in their definition of relationship marketing: "Relationship

marketing involves creating, maintaining, and enhancing strong relationships with customers and

other stakeholders. Relationship marketing is orientated to the long term. The goal is to deliver

long-term value to customers, and the measure of success is long-term customer satisfaction".

Most of relationship marketing definitions emphasize longer term perspective, focusing on

keeping customers rather than getting customers. One common point among the many

definitions of relationship marketing is that it is associated with attempts by firms to develop

long-term relationships with certain customers.

2.5 Aims of Relationship Marketing

The primary goal of relationship marketing is to build and maintain a base of committed

customers and reduce time and effort spent on them. The advantages that the organization obtain

from building and maintaining a base of committed customers are many and can be linked

13

directly to an organization's bottom line (Aalton, 2004). According to Grönroos (1994), the aim

of relationship marketing is to establish, maintain, and enhance relationships with customers and

other partners, so that the objectives of the parties involved are met. Relationship marketing

plays a major role to get the firm close to the customers for the purpose of enabling the firm to

accurately and adequately discern and satisfy their needs. Moreover, it enhances a company's

ability to understand customers, increase its market share, and ultimately reduce cost and

increase profitability. Ndubisi, (2003) argued that the cost of serving one loyal customer is five

to six times less than the cost of attracting and serving one new customer. Rapp and Collins

(1990) reported that relationship marketing goals are to create and maintain lasting relationships

between the firm and its customers that are rewarding for both sides. In other words, a key

objective is to foster customer loyalty. Further objectives of relationship marketing include the

delivery of sustained or increasing levels of satisfaction, and the retention of those customers by

the maintenance and promotion of the relationship (Christopher, 1996). Sheth and Parvatiyar

(1995) also support this objective as they argued that relationship marketing focuses on building,

maintaining and retaining customers. Profits tend to climb when a company increases its

retention rate. Retention rates tend to increase as customer Profitability rates increase.

Relationship marketing addresses the basic human need to feel important. Customers like to

reduce the choices they have by engaging in ongoing relationships. It is a form of commitment

made by consumers to patronize selected products, services, and marketers rather than exercise

choices. Palmatier and Gopalakrishna, (2005) study reported that there is a positive association

between relationship marketing and business performance or Profitability.

2.6CustomerRelationship Marketing

The idea of building a relationship with customers was not implemented by most Firms. The

development and the creation of a conceptual framework to understand relationships and to study

its nature was very slow in adoption. For a long time, marketing focused on acquiring customers

instead of attempting to retain and salesour products. Therefore relationship marketing was

developed as an effective strategy to attract, maintain and enhance customer relationships

(Roberts et al., 2003). Sheth and Parvatiyar, (2000) indicated that relationship marketing

emerged in the 1980s as an alternative to the prevailing view of marketing, because it was

recognized that many exchanges, particularly in the beer industry, were relational by nature.

14

They add that in the first half of the 1990s the development of marketing changed from

transaction marketing to relationship marketing. Concerned parties (sellers and buyers)

understood and appreciated each other’s’ needs and constraints much better, and they change

their trends for the favor of cooperation with one another, so, they become more relationship

oriented. It is worth mentioning that in the past, marketers were concerned with retaining

customers, influencing repeat purchases, fostering trust and facilitating future marketing.

Therefore, producers established permanent delivered in customers (retail grosser) selling goods

daily, and those who participated in the market knew and trusted each other. Accordingly,

customers and producers had direct relationships with each other. The relationships between

customers and suppliers were critical since customers depended on manufacturers and traders to

provide them with goods according to specifications and expectations (Sheth and Parvatiyar

1995). Grönroos, (1994) reported that relationship marketing origin is coming from the

convergence of the following four different approaches:

1- The interaction and network approach to industrial marketing advocated by the industrial

marketing and purchasing group: customers and suppliers network for industrial products

and services. There are several and ongoing interactions that take place daily through the

flow of goods and services, financial and social exchanges. It is not necessary that

customers initiate these interactions, but they may continue for a long period of time.

Moreover buyer and seller positions may not be clear when the exchange of resources

flow in both directions. The management of such relationships requires the involvement

of the marketing department, all of the company's employees and part time marketers

(Gummesson, 1990). Regarding business to business exchanges, points of contact

between organizations occur in non-marketing functions such as research and

development, design, deliveries, customer training, invoicing and credit management.

2- The marketing of services: Services marketing cannot be separated from overall

management. Service customer interacts with physical resources and employees of

service providers. The service providers are involved in service production. No

differences should exist between industrial marketing and service marketing in terms of

developing a long lasting relationship between a service provider and his/her customers.

Marketers and full time marketers determine the success of those relationships.

15

3- The interest in customer relationship economics: According to Reichheld, (1993)

companies can obtain market economies, and achieve better economic results through

understanding the customers they deal with. Grönroos, (1994) indicated that a mutual

satisfactory continuing relationship makes it possible to reduce transaction costs and

quality costs.

4- International marketing: Gummesson, (1996) argued that although the transaction

marketing approach is primarily based on the mass marketing of packaged consumer

goods in USA, such a concept if transferred to other markets outside of the USA, risk not

being applicable because of many issues such as cultural differences, traditions,

economic structures, legal systems and institutional settings. Therefore, many researchers

suggest that a relational approach to marketing is better suited to accommodate or adapt

to the cultural, economic and institutional characteristics of most countries.

2.7 Relationship Duration

It is important to understand the degree of the impact of relationship duration on relationship

strength, because the length and size of customer life time value is a cornerstone of relationship

marketing (Phillips et al., 2004). Gremler et al., (2001) reported that strong relationships increase

customer profitable in a beer sales, and added that supporting strong interpersonal relationships

between customers and company’s encourages positive word of mouth behavior. These

outcomes enhance a company's market share and return on investment. Moreover, it is assumed

or even well known that if any customer used the same supplier for a long period of time then,

the length of the period will lead to relationship building between the two parties. This means

that such customers may have high levels of cumulative satisfaction and the relationship strength

continues growing with the time period. Bove and Johnson, (2000) indicated that strong

relationships develop incrementally over time and that relationship duration has a positive effect

on relationship strength as trust and commitment increase as the relationship matures.

2.8The Importance of Customer Satisfaction

Due to extensive competition worldwide and the changing needs of customers, firms are forced

to understand their customers’ different needs, and to adapt their offerings accordingly (East et

al., 2008). Customer satisfaction is considered to be a prerequisite for customer retention and

loyalty, leading to profitability, market share, positive word of mouth and the company’s success

16

(Sureshchandra et al. 2002). Many studies has been made to examine the importance of

customers’ satisfaction, for example Juran Institute conducted a survey in 1994 and indicated

that 90% of top managers in more than 200 of America's largest companies agreed with the

statement: "Maximizing customer satisfaction will maximize profitability and market share,"

(Mentzer, 1995, pp.45-46).

2.9 Customer Relationship Marketing and Customer Satisfaction Researches

On the beer industry revealed that corporations know what the customers are looking for and that

value is measured through quality (Kerber, 2000). The threat of increased competition, slower

growth rates, and price pressures pushed many organizations to focus on customer satisfaction

(Kerber, 2000). In fact, the interpersonal relationship between the salesperson and the customer

can have a substantial impact on important relational outcomes for the selling firm because it

fosters customer satisfaction, commitment, and trust in the supplier, as well as repurchase

intentions, willingness to recommend the provider to other potential customers, and to provide

referrals (Johnson et al. 2003). One of the major goals of customer relationship marketing is to

identify what protocols not only satisfy customers, but what protocols delight them so that

customers want to maintain and grow a relationship with the firm (Aalton, 2004).

2.10 The Difference between this Study and other Studies

This study is distinguished from previous studies in that it addresses the topic while using more

variables, whether the independent or the dependent ones, in addition to moderating variable.

The previous studies discussed the topic from one point of view, while this study addressed the

topic from two points of view for the same organization that operates in two Zones. Although the

study benefited from the previous studies in developing the variables and the questionnaire, it

adapted most of the variables and questionnaire statement to this are

17

Chapter Three

Figure 1 conceptual framework, source: my own survey

Customer-satisfaction (meet)-getting unbiasedaccess-received betterservice- purchase beer inAgent store

Company-Distribution-Pricing-Promotion-product-promise/responsibility

Relationship

Market Performance

18

Chapter Three

Methodology

3.1. Research Design

This is a cross-sectional study with descriptivecomponent. Descriptive research designs are

appropriate when the research objectives include determination of the degree to which marketing

(or decision) variables are related to actual market phenomena. Since, the aim of this study is to

assess impact of customer relationship marking on the market performance descriptive study

design is the appropriate one. Thus, the study design waspredominately be quantitative- survey

research.

3.2. Study area

Central Gondar Zones and North Gondar Zones are located in the northern west part of Ethiopia

at a distance of 728 km and 828 km from Adis Abeba capital city of Ethiopia. The major land

form of two zones territory is: sloping to moderately steep and steeply to very steeply sloping

type.

The study was conducted in twoworedas and One Town(totally three study sites) of the two

zones of Amhara National Regional State: Debark Town and DabatWoreda from North Gondar

zone and Wogera Woreda from central Gondar zone.

3.3. Instrument of data collection:

The primary data was collected from the survey through semi-structured questionnaire, a

questionnaire type that is made up of both open ended and close ended question items.A major

advantage this questioning technique has over observation techniques is that they allow the

researcher to collect a wider array of raw data. Raw data from a survey can pertain not only to a

person’s current behavior but also to his or her state of mind or intentions. Thus, the researcher

and trained enumerators administered the questionnaire taking a procedure of "door-to-door

personal interviews where the selected samples were asked individually wherever they are found

and/or agreed to be interviewed.The questionnaire had both close ended and open ended

questions items that enabled us investigate into the both the objective and subjective experiences

of the respondents.

19

3.4. Sources of data

In this study, both the primary and secondary data were employed.

3.4.1 Primary data sources:

Primary data is firsthand raw data and structures, and have yet to receive any type of meaningful

interpretation.In order to answer the research questions, survey design was used. Hence, semi-

structured questionnaire was prepared and the data from the questionnaire was the primary

source of information to be statistically analyzed to understand the impact of customer

relationship on market performance in the target area. There are two research questions number

one included about the firm’s four phases of activity category as the early stage of development

relationship, the starting stage, once conduct in relationship marketing and the general

relationship marketing on the market performance of Dashen beer. The second research question

verified about the determinant factors that influence on the Customer Relationship marketing on

the Market Performance. These primary data were collected from sampled respondents who are

living in the selected three study areas.

3.4.2 Secondary data sources:

Secondary data sources were used to substantiate primary data.These data was extracted from

Dashen brewery and from other sources, such as journals, published and unpublished research

works.

3.5. Study population

The study was focus on the impact of customer relationship marketing. Customers of all kinds of

beer sales were enrolled to incorporate the various experiences of the respondents. Perceptibly,

since there is no sampling framethe researcher used casual outlet Customers of, like groceries,

bars, night clubs and hotels to reach into the population of the study.

3.6. Sampling technique and sample size

The target populations of this study were customers of all kinds of beer sales from Debark Town,

Dabat Woreda and Wogera Woreda.While the respondents were selected by using systematic

sampling technique. Therefore, the number of customerof Dashen beer in WogeraWoreda,

20

DabatWoreda and Debark Town are 55, 85 and 250 respectively, (Dashen Brewery Finance

Office bulletin, 2018). Thus, the sampling population was drawn from a total of 390customers.

From these study areas researcher determined the required sample size by using a formula

developed Cochran (1977).That is, to sample size (n) with desire degree of precision for the

general population, will be used in this case, population variable (p) is total population variable

and is given as;

n = ( ) Where; n-sample size,

n = ( ) P- household unit variables, expected prevalence or

proportion (In proportion of one; 10%),

n =( . ) ( . )( . )( . ) ( ) ( . ) ( . )( . )Q = (1-P)

n =( . )( . )( ) ( . )D – allowable error 0.05significance

n =.. = 102

Z – Standardize normal variable and valuedthat Corresponds to 95% degree of confidence, which

is conventional, Z value is 1.96.

Accordingly, the sample sizes that were selected from WogeraWoreda, DabatWoreda and

Debark Town are 15, 22 and 65retailers respectively. Thus, the total sample sizes of the study

are thus, 102 sampleretailersusing probability proportional to size random sampling. To make

clear, see the table below.

Table 3.1: Distribution of Sample retailers by the study areas

Towns Total HHS(N) Sample size (n) Sampling Technique

Wogera 55 15 Proportional

Dabat 85 22 Proportional

Debark 250 65 Proportional

Total 390 102 Proportional

Source: Dashen BreweryFinance Office bulletin (2018).

21

3. 7. Methods of Data Analysisand Model specification

3.7.1. Methods of Data Analysis

Since the study predominantly assumes quantitative survey design. Typically, data analysis is

conducting with the assistance of a computerized data analysis program (SPSS). Coding is then

made to assign all response categories a numerical value (for example, male=1,

female=2,)Hence, SPSS software was employed to undertake the calculations. Accordingly, a

variety of statistical test, which include means, frequencies, standard derivation, chi-square,

correlation, ANOVAs and regression, are also used to analyze data.The final output was

discussed and presented using various appropriate formats, like charts, tables, graphs, that was

accompany the written discussion.

3. 7.2. Model specification

Dependent variable:The dependent variable is marketing performance of Dashen beer in three

study sites.

Independent variables:The following variables were positively affecting customer relationship

marketing on the market performance of the dependent variables as follow:

• Consistent delivery of beer (Door to Door distribution)

• The beer Factory avail their product on time

• A beer factory sales beer in fair price

• Costly to purchase beer in Agent store

• Promotion of beer and other item for outlet

• Open communication

• Beer factory Respond quickly to any product

• Access of marketing service

• Customer expectation of beer factory is meeting

• Beer factory has a good reputation for service

The Multiple Regression model

Regression techniques have long been central to the field of economic statistics

(“econometrics”). Increasingly, they have become important to lawyers and legal policy makers

as well. The relationship between the dependent and independent variables in this case could be

best represented by multiple regressions. To explore such issues, the investigator assembles data

22

on the underlying variables of interest and employs regression to estimate the quantitative effect

of the causal variables upon the variable that they influence. The investigator also typically

assesses the “statistical significance” of the estimated relationships, that is, the degree of

confidence that the true relationship is close to the estimated relationship. Hence, the multiple

regression models were used in this study to analyze the determinant of customer relationship on

the market performance. Following Gujarati (2003) and Aldrich and Nelson (1984) the

econometric distribution function for the function ofcustomer relationship on the market

performance is specified as:

In the multiple linear regression models, Y has normal distribution with mean

Y = β0 + β1Χ1 + …+βρΧρ + σ (Υ), SD(Y) = σ (independent of X’s)…………………1

Y = customer relation market performance

The model parameters β0 + β1 + …+βρ and σ must be estimated from data.

β0 = intercept or a constant amount (what one earns with none of the parameters);

β1 … βρ = regression coefficients (coefficients of independent variables)

X1+…Xp are termed the “independent,” “explanatory,” or “exogenous” variables; σ = σ res =residual standard deviationBefore model analysis was commenced, to check the problem of multi-co linearity the Variance

Inflation Factor (VIF) for continuous explanatory variables were used in this study. Following

Gujarati (1995), VIF is defined as:

VIF (Xi) = ………………………………………………………….2

Where:

Xi = the ith quantitative explanatory variable regressed on the other quantitative explanatory

variables.

R2i = the coefficient of determination when the variable Xi regressed on the remaining

explanatory variables. If the value of VIF exceeds 10, it is used as a signal for existence of strong

multi-co linearity between continuous explanatory variables.

23

CHAPTER 4

RESULTS AND DISCUSSION

4.1 Demographic and socio-economic characteristics of sample population

Total of 102 questionnaires were distributed to the respondents all of them were

returnedquestionnaires. Therefore, the response rate of the questionnaire is 100% and valid to

analyze. The questionnaires were designed to seek information about the respondents’ sex,

age,marital status, educational status and monthly income while they selling Dashen beer.

4.2 Relationships between customer relationship marketing and market performance

All factors had a maximum ranking of 5 and a minimum ranking of 1 on the likert scale, 5 being

the strongly agree extent while 1 strongly disagree extent at all. A mean < 1.19 strongly disagree,

mean 1.50 to 2.49 disagree, mean 2.5 to 3.49 undecided, mean 3.50-4.49Agree and mean > 4.50

strongly agree.Standard deviation measured how spread out the distribution was, a standard

deviation greater than 1 indicated significant variation in the respondents while a standard

deviation of less than 1 indicated no significant variation between respondents.

The researcher realized four phases of the firm activity category to answer the first research

question on that, what is the relationship between customer relationship marketing and marketing

performance?about the firm at the Early Stages of Developing a Relationship with customers, the

Starting Relationship stage, once a relationship has been established and the General relationship

marketing criteria.

Regarding with customer relationship marketing on the market performance of Dashenbeer atthe

Early Stages of Developing a Relationship with customers was evaluated based on 15 evaluation

criteria as follow. At the early stages of developing a relationship with customers, beer factory

was not respond quickly to any problem as sample population disagreed by 1.94 mean score of

rating scale. In the same fashion, customers disagreed on the ideas that “Beer factory are

responsive to request, Beer factory delivers what then promise, Beer factory provides proactive

solutions and frequent interaction” by the mean score 2.34, 2.33, 2.07 and 2.05 rating scales

respectively, in greater significant variability. Here we can infer that the beer factory was at a

24

lower stage of market performance with customer relationship marketing with regard to its

responsibilities at early stages of developing a relationship.

In the opposite angle, the degree of customer relationship marketing performance ofthe beer

factory was in the high extent at early stages of developing a relationship, with regard to the

statementthe beer oriented customer focus, customer expectation of beer factory are meet, beer

factory are friendly attitude, beer factory offers range of products and open communication

between the firm and the customer, as the sample population agreed upon it. Furthermore,sample

population were strongly agreed about customer relationship marking on the market performance

of the beer based on the ideas the presence of well train sales man, factory workers and agent act

ethically and mutual trust between beer factory and customer 4.66, 4.56 and 4.53 mean rating

scale respectively with smaller significance variability of their ideas.However, respondents’

undecided about the evaluation criteria of the beer factory offers unbiased advice and consistent

delivery of beer to customers with their mean value of 3.31 and 3.17 rating scale.

Table 4.3 Early Stages of Developing a Relationship

No Early Stages of Developing a Relationship Mean Std. Deviation

1 Beer factory Respond quickly to any problem 1.94 1.0882 Factory workers and Agent act ethically 4.56 .6963 Well train sales man 4.66 .6824 Mutual trust between beer factory and customer 4.53 .7405 Beer factory are friendly attitude 4.21 .8006 Consistent delivery of beer 3.17 1.3367 Beer factory are responsive to request 2.34 1.0948 Customer expectation of beer factory are meet 4.24 1.0369 Beer factory delivers what then promise 2.33 1.04710 Beer factory provides proactive solutions 2.07 1.02711 Open communication 3.89 1.33412 Customer focus 4.34 .80213 Beer factory offers range of products 3.96 1.15114 Beer factory offers un biased advice 3.31 1.47615 Frequent interaction 2.05 1.172

*Mean < 1.19 strongly disagree, mean 1.50 to 2.49 disagree, mean 2.5 to 3.49 undecided, mean3.50-4.49Agree and mean > 4.50 strongly agree.

From the research findings on table 4.4 below, the starting relationship criteria results comparing

of customer relationship marketing and the firm market performance, the customers disagree on

25

the statement “beer factory has a good reputation for service”, this means the company has

performed for the political objectivity of the country in general and the TPLF in particular as the

key informants detail interviewed.Furthermore, key informants bitterly angry about Dashen

brewery in that it didn’t work on societal utility development sectors as it is a profitable firm.

The beer factory didn’t make clear for whom it produce? How much it produce? And how the

maximized profit was obtained and reached upon? There was no a clear monetary transaction of

the firm and no check and balance on responsible activities. Therefore, the beer factory should be

honest to have a good reputation for service, since customers strongly agreed (4.54 mean) that

they expected Beer factory to be honest, by slighter significant variation (std. deviation, 0.886)of

ideas between respondents. During the starting relationship, the sample population were disagree

on the evaluation criteria customer refers to another customer, by 1.75 mean value of likert

scale.

Table 4.4 Starting a Relationship

Source: survey data, 2018*Mean < 1.19 strongly disagree, mean 1.50 to 2.49 disagree, mean 2.5 to 3.49 undecided, mean3.50-4.49Agree and mean > 4.50 strongly agree.

Once a relationship has been established, three evaluation criteria were applicable as indicated in

Table 4.5. The respondents agreed with all of them, that good sales achieve with relationship,

and it is gateway to new product with relationship and feel safe with relationship indicated the

mean score of 4.39, 4.38 and 3.46 rating scale. This implies that once a relationship has been

established, customer relationship marketing on the market performances was a higher extent

and encourages the firm marketing strategy performance.

No Starting Relationship Mean Std. Deviation

1 Beer factory has a good reputation for service 1.88 1.2132 Customer expect to beer factory to be honest 4.54 0.8863 Customer refers to another customer 1.75 0.979

26

Table 4.5once a relationship has been established

No Once a relationship has been established Mean Std. Deviation

1 Good sales achieve with relationship 4.39 .8462 Gateway to new product with relationship 3.46 1.3333 Feel safe with relationship 4.38 .771


On the “General relationship marketing criteria” (table 4.6),with regard to beer are fair

priceresult indicated that the respondents disagreethat the price of the beer are not fair that

customers agreed as they costly to purchase beer in agent store. This idea is supported by

respondents disagree on the idea “beer factory knows what is important to customer”. The

standard deviation of them indicated that there was significant variation in the respondents’

points of view, since it is greater than one.These are that prices are a very important parameter

customer relationship marketing on the market performance of the firm and that is why

customers wants a better relationship with the beer factory by strongly agreed (4.51) up on it and

the standard deviation of 0.817 indicating that there is less variability in their sensitivity.We

could infer that beer had better a good relationship with customers to upgrade its marketing

performance.

Table 4.6theGeneral relationship marketing criteria

No. General Relationship Mean Std. Deviation1 Beer are fair price 2.04 1.2742 Customer wants better relationship with beer factory 4.51 .8173 Quality of service affect relationship 3.96 0.8554 Costly to purchase beer in Agent store 3.54 1.0785 The beer Factory avail their product on time 4.12 .9046 Has received better service than expected 4.01 .987 Confident in advice from beer factory 3.61 10.558 Promotion of beer and other item for outlet 3.53 1.3409 Beer factory provides value enhancing service 2.71 1.30210 Beer factory knows what is important to customer 2.25 1.01911 Focus of individual customer service 4.00 .80812 Area sales representative deal with customer 3.82 1.27713 One beer factory staff work in teams 2.83 1.50314 Cross sales of product by the beer 3.59 1.037

27


Regarding with convenient access and the quality of theservice performance of the beer those

customers agreed thatquality of service affect relationship, by 3.96 mean value of likert scale and

standard deviation of 0.855. Sample population surveys agreed that Dashen beer factory has a

good approach of giving marketing service strategy on the statement that the “beer factory avail

their product on time, confident in advice from beer factory, focus of individual customer

service, promotion of beer and other item for outlet, and cross sales of product by the beer. And

they agreed that this could be done through area sales representative deal with the customers and

as a result in general, they confirm by agreed that as they have received better service than

expected, likert scale mean value 4.01 with less variability of ideas.

However, sample households were undecided, whether the beer firm executed or not, on the

ideas “beer factory provides value enhancing service and one beer factory staff work in teams

“by greater significant variation of ideas between respondents.

4.3. Determinant factors of customer relationship marketing on market performance

The second research question is to answer the explanatory variables that influence on the market

performance. What are the determinant factors of customer relationship marketing on the

marketperformance?

Multiple regression models were applied to identify determinant factors affecting market

performance on the customer and the firm sales achievement. As the major focus of this study

aims to investigate customer relationship marketing and on the marketing performance of

Dashen brewery as they were using it so as to sale their production product, considered as the

dependent variable of the model; while the variables were listed in table 4.9 are independent

variables that determine the dependent variables.

Before fitting the model, it was important to check whether there exists serious problem of

multi-co-linearity among the hypothesized explanatory variables. The values of Variance

28

Inflation Factor /VIF/ (i.e. 2.34) for each of the continuous variables were found to be less than

ten and hence, there was no a multi-co linearity problem among all the hypothesized continuous

variables included in the model.

Determining How Well the Model Fits

In addition, goodness of fit in multiple regression analysis is measured by count R2 which

indicates the number of sample observations correctly predicted by the model. The count R2 is

interpreted based on the principle that if the predicted probability of the event is less than 0.50,

the event will not occur, and if it is greater than 0.50, the event will occur (Maddala, 1981).

Hence, the model results showed that the multiple regression model correctly predicted (R2 =

0.536) of sample households.

In the other hand, the model summary table (table 4.7) provided the R, R2, adjusted R2 and the

standard error of the estimate, which can be used to determine how well the regression model

fits the data. The value of R (0.757) is the multiple correlation coefficients indicates that a good

level of prediction, which considered to be one of the measure of the quality of the prediction of

the total market performance for the sake of their production of the household (dependent

variable). The “R Square”, (R2), column explains the coefficient of the total determination of

the model, which is the proportion of variance in the dependent variable that can be explained

by the explanatory variables. Hence, the coefficient of determination 0.573 summarized that our

independent variables explained 57.3% of the variability of our dependent variable of the total

produce their production asset. The Adjusted R-squared of 0.526 suggests that the independent

variables listed in table 4.9, fit to the model by approximately 53%.The P- value of 0.000 (Less

than 0.05) implies that the model of customer relationship marketing on the market performance

of the organization is significant at the 5 percent significance.

Table 4.7. Model Summary

Source: Field survey, 2018

Model R R Square Adjusted R Square Std. Error of the Estimate

1 0.757a 0.573 0.526 0.583

29

The F-ratio in the ANOVA table (Table 4.8), tests that the overall regression model is a good fit

for the data. The table shows that the independent variables statistically significantly predict the

dependent variable, F (10, 91) = 12.194, p < 0.000 (that is the regression model is a good fit of

the data).

Table. 4.8 ANOVA to test the model

*Significance at or < 0.05 Source: survey data, 2018Among ten factors considered in the model, three were found to have a significant impact in

determining the relationship between the customer market and market performance of Dashen

brewery in the study area. These are access of service received, a beer factory are fair price and

open communication, significant at or less than 5% probability level (table 4.9).

Estimated Model Coefficients

As it was indicated in table 4.9, there is a significance difference association between the price of

the beer factory and the customer relationship marketing on the market performanceat 5 percent

level of confidence, since the significance value (-2.323) is less than that of the level of

confidence (0.05), p (0.022). Consider the effect of the price of the beer, the standardized

coefficient, is equal to -.167, means that for each one unitincrease in price, there is a decrease on

the market performance with customer relationship marketing by 16.7 percent.Hence the

independent variable price of the beer and customer relationship marketing on the market

performance was inversely proportional. This analysis was inconsistence with in prior studies of

Louter et al., (1991) empirical results confirmed the relationship between pricing strategy

and firm performance, showing a strong positive link between pricing strategy and overall

export performance. Pricing strategy may vary market to market because of many reasons,

such as political, economic, social, technological, environmental and legal forces. Therefore, it

is these forces that have effects on pricing component of marketing strategy by control

effects on marketing, distribution, and transportation costs; taking into consideration all have

significant impact on the pricing strategy.

ANOVA

Model Sum of Squares df Mean Square F Sig.

1

Regression 41.410 10 4.141 12.194 0.000*

Residual 30.904 91 0.340

Total 72.314 101

30

The determinants of number of open communication were positive and a significant different

association for the contribution of customer relationship marketing on the market performance of

the beer of Dashen at 5% probability level, or as p (0.000) < 0.05. The coefficient of the variable

0.027 indicated that a firm of beer who had practices a one unit of open communication with a

customer positively correlated in an increasing opportunities and thereby increasing their

customer relation marketing on the firm market performance rates by 2.7 percent extent. Herein,

we can infer that a person who had frequently giving service in sales of Dashen brewer has a

probability good relationship in the purchasing of the beer assets needed at a market place,

thereby creating harmonious relationship between the customer and the firm. In the other hand

open communication aware the firm to learn the pitfall activities in advance to improve the next

activities thereby developing its lifetime. This study was congruent with many researchers have

emphasized the importance of open communication on sales, financial and customer

performance is achieved through promotional mix by gaining experience in the

opportunities and problems arising in specific export markets, boosting communication,

personalizing relationships, and cultivating a team spirit with customers abroad, and

providing timely response and immediate support to the export venture’s needs, (Tookey, 1964;

Cunningham and Spigel, 1971; Kaynak and Kothari, 1984).

Access of the firm services is another strong factor positively associated and significant with

relationship of customer market and market performance of the firm. The positive effect of

access of marketing service may indicate in the study areas, those households’ technical advice

and maintenance of materials were well aware of the advantage of market

relationshiptechnologies and thereby made a strong customer relationship marketing on the

market performance status. The coefficient of access of marketing service 0.238 revealed that a

one unit of service delivery increase to a customer increases by 23.8 percent magnitudes of

customer relationship marketing to market performance.

31

Table 4.9 multiple regression model result for determinants of market performanceModel Un-standardized

CoefficientsStandardizedCoefficients

t Sig.

B Std. Error Beta(Constant) 2.075 .466 4.455 .000*Consistent delivery of beer -.050 .046 -.079 -1.101 .274The beer Factory avail their product on time -.041 .073 -.044 -.558 .578A beer factory are fair price -.111 .048 -.167 -2.323 .022*Costly to purchase beer in Agent store .076 .057 .097 1.337 .185Promotion of beer and other item for outlet -.017 .048 -.027 -.348 .729Open communication .345 .053 .544 6.540 .000*Beer factory Respond quickly to any product -.093 .061 -.119 -1.507 .135Access of marketing service .206 .068 .238 3.049 .003*Customer expectation of beer factory are meet .123 .070 .150 1.754 .083Beer factory has a good reputation for service .081 .054 .116 1.497 .138

*Significance at or < 0.05 Source: survey data, 2018

32

Access of marketing service of the firm has some implications for service provider. In advance,

customer-related measures such as the customer’s perception of service quality and customer

satisfaction should be the primary objectives for a firm’s business strategy. In other words, beer

industries should follow a customer-oriented strategy to cope with the challenges in business

nowadays since this can improve customer relationship and thus help the firm to reduce the cost

of marketing, improve and stabilize revenues, and adapt in a timely and suitable adequate way to

changes in customers’ profiles or preferences. In addition, regular monitoring and evaluation of

the customer-related measures can help the firm to deliver the products which customers value

the most and thus also attract new customers.

33

CHAPTER FIVE

CONCLUSION AND RECOMMENDATIONS

5.1 Conclusion

The major concern of the study was to assess the customer relationship marketing on the market

performance of Dashen beer in Ambagiyorgis, Dabat and Debark towns. A total of 102

questionnaires were distributed to the respondents and 102 questionnaires were returned.

Therefore, the response rate of the questionnaire is 100 %.

On the “General relationship marketing criteria”,relationships between customer relationship

marketing and market performance with regard to “price” described as the most important

criteriain the selection of a study firm.Customersdisagree that the price of the beer are not fair,

since they agree that it was costly to purchase beer in Agent store. That is why the beer factory

didn’t know what is important to customer as they respond. As a result prices are a very

important parameter customer relationship marketing on the market performance of the firm.

The quality of theservice performance of the beer could affect marketing relationship between

the customer and the factory as the study population confirmed.Dashen beer factory has a good

approach in giving of marketing service strategy especially providing their product on time,

confident in advice from beer factory, focus of individual customer service, promotion of beer

and other item for outlet, and cross sales of product by the beer. And they agreed that this could

be done through area sales representative deal with the customers and as a result in general.

However, beer factory didn’t provide value enhancing service and team work when providing of

service for customers.

At the starting stage of relationship, customer expected to beer factory to be honest was in a

better position; however the beer has not a good reputation for service which can be checked by

referring customer to another customer. This is because at the early stages of developing a

relationship, the beer factory didn’t respond quickly to any problem, didn’t responsive to

request, didn’t delivers what then promise , didn’t provides proactive solutions and didn’t make

frequently interaction, even if there was factory workers and agent act ethically, well train sales

man and had friendly attitude between them.When once a relationship has been established,

Dashen beer was a good

34

market performance of sales achieved by relationship and leads a gateway to produce new

product with harmonious marketing relationship.

In this study it could be concluded that customer relationship marketing on the market

performance, a beer factory should be balancing of fair price, open communication and provide

access to marketing service as these affects significantly forthe market performanceof the plant.

5.2 Recommendations

Beer industry businesses development has been growing rapidly in recent decades, while

customer demands for high quality service increasing. To remain competitive, Dashen brewery

needs analyze customers’ expectation and perception towards on the market performance service

quality of its front office staff for the sake of customer relationship marketing strategy. In this

research, in order to tackle the main constraints of the customer relationship marketing on the

market performance identified during the survey and improves the satisfaction of their customers

livelihood and so as to loyal to the firm, the following recommendations have been made based

on the findings of the study;

The fairnessprice of the beer was affecting customer relationship marketing and market

performance in negative dimensions. Price determines as the most important criteria that

manifests thecustomer expected the price of the beer to be just with corresponding to the

distance it is actually located, while it was seen as discontented. Therefore, the firm

should be balancing the price of the beer with respect to its proxy of transportation costs

and production costs.

The firm should be appreciated that it provides access of marketing service for its

customers like distribution of refrigerators, Draft beer machine, gardening and frequently

visiting and giving unbiased advice which increases beer consumption rates. Therefore,

the firm should beoperating in a continuous flow and scaling up their best practices in the

existing place and transferring to other convenient marketing places to increase

marketing dimensions more than the existing current method.

Employees’ commitment & discipline should be appreciated and scaling up through short

term training. Furthermore, beer factory should be continue as it was in a good way in

consistence and on time delivery of beer as customers were satisfied by it.

35

Beer factory should be given high attention in providing value enhancing services and

standby to respond quickly to any problem through open communication and

implemented effectively and efficiently what then promised, which increases its loyalty

to customers.

5.3 Limitation and Directions for Future Research

Limitation

It does not show seasonal variation.

Limited number of study area .

The study design were only Quantitative approach

Directions

Future Researcher Should Focus On

Study design which consider seasonal variation

Include more study areas

Use both Qualitative and Quantitative approach .

36

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Appendix

Questioner (Data collection tolls)

Part 1.Demographic profile or personal information

1. Gender: Male Female2. Age: 18-27 28-37 38-47 48-57 58-67 68+3. Marital status; Married Single Divorced Widowed4. Education Level:elitret Grade 10 completed Grade 12 Completed Diploma

Degree above5. Religion:OrthodoxMuslimProtestant Catholics others----------6. Family size ------------7. Monthly income birr, 12,000 or below 12,001-24,000 24,001-36,00036,001-48,000 48,001-60,000 60,001 or Above

Part II. Questions related to general relationship marketing criteria.Please indicate the extent to which you agree or disagree with the following statement by

placing check mark (√) in the box that applies

No. I. General Relationship Strongly

disagreeDisagree Neutral Agree Strongly

agreeOther

1 A beer factory are fair price2 Customer wants better relationship with beer

factory3 Quality of service affect relationship4 Costly to purchase beer in Agent store5 The beer Factory avail their product on time

41

6 Has received better service than expected7 Confident in advice from beer factory8 Any beer factory can be counted on to do

what is right9 Promotion of beer and other item for outlet10 Beer factory provides value enhancing

service11 Beer factory knows what is important to

customer12 Focus of individual customer service13 Area sales representative deal with customer14 One beer factory staff work in teams15 Cross sales of product by the beer

II. Starting RelationshipStronglydisagree

Disagree Neutral Agree Stronglyagree

1 Beer factory has a good reputation for service2 Customer expect to beer factory to be honest3 Customer refuse to customers

III. Early Stages of Developing a Relationship

1Beer factory Respond quickly to any product

2Factory workers and Agent act ethically

3 Well train sales man

4Mutual trust between beer factory andcustomer

5 Beer factory are friendly attitude

6 Consistent delivery of beer

7 Beer factory are responsive to request

8 Customer expectation of beer factory aremeet

9 Beer factory delivers what then promise

10 Beer factory provides proactive solutions

11 Open communication

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12 Customer focus

13 Beer factory offers range of products

14 Beer factory offers un biased advice

15 Frequent interaction

IV. Once a relationship has been established

1 Good sales achieve with relationship

2 Gateway to new product with relationship

3 Feel safe with relationship

Documents

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