How Does The Relationship Marketing (RM) Impact On Customer Loyalty With Special Reference To EASY MART Food City.

 

1.     Introduction

 

UN Marketing has three main companies such as hotel Grand Guardian, Easy Mart, Guardian Resort & Restaurant and they maintain two agencies. Elephant house is their main agency. Not only that they have beer agency also.

In Here They Maintain Easy Mart Retailing Outlets. Those Outlets Are Situated In Balangoda, Ratnapura, Malawa, Kuruwita And Edandawala.These Super Markets Have Many Customers When Comparing Other Super Markets.

 

1.1 Background of the study

Retailing is one of the key industries of Sri Lanka which is increasingly developing. The Retailing Industry in Sri Lanka has grown over the past 40 years into a key servicing sector contributing towards the country’s economic growth. The Sri Lankan Retailing Industry looks forward to achieve its progress through the new opportunities created in the country and develop the skills and achieve targets in the competitive global context.

EASY MART plays an important role in consumer Retailing industry in Ratnapura. It is a major player in retailing industry which included globally trusted brands of retailing, FMCG products’ & etc. Except EASY MART, Cargill’s, Chandra food city, etc are the other competitors in the industry. Comparing with the other goods that are in need in day today life, consumer FMCG products are inexpensive. In this case, customer tends to pay the amount at the same time. When the customers once deals with a company in order to fulfill the need, they tend to choose the same company to re purchase a product when a need is re-occurred. Because of this high possibility of selecting the same company to re purchase a certain production, it is vital to maintain a strong customer relationship in this industry.

The companies within Consumer retailing and industry fighting with each other to gain a great slice of market share with a globalization effect. Therefore, the companies have to face difficulties to meet the high growth of customer expectations. A vital role is being played by EASY MART in the particular industry. Recently, more than ever before, strong competition, fragmentation of markets, short life cycles of products and increasing customer awareness and complexity are the big challenges to the consumer retailing and FMCG sector. In such situation, companies of consumer retailing industry can use the relationship marketing strategy to create, maintain, and enhance strong relationships with their customers to secure their loyalty.

Although, in present EASY MART Ratnapura is being faced with a problem in customer relationship and customer loyalty. According to the complaint registry of EASY MART Ratnapura, customer complaints have been increased comparing with the previous year. And those complaints can be summarized under four main categories such as failure of trust, less commitment, poor communication and weak conflict handling. Following chart shows the analyzed summery of complaint registry of EASY MART.

Table.1Complaint registry

Categories	Number of complaints		Percentage
	2020	2021	2020	2021
failure of trust	67	80	32%	35%
less commitment	35	34	17%	15%
poor communication	69	73	33%	32%
weak conflict handling	38	41	18%	18%
Total	209	228	100%	100%

Source: complaint registry (2020, 2021)

In order to further analyze this issue, face to face interviews were conducted by using 15 respondents to obtain the qualitative information from customers about the relationship level and their loyalty towards the company and majority of respondents said that “the relationship level of company is little bit weaker in EASY MART Ratnapura". And two respondents said “they do not buy anything from EASY MART again due to the poor relationship level".

 

 

 

 

1.2 Research problem

In modern business world, companies which concentrate on managing customer relationships are being increased. Customer value creation is more essential concept in marketing from customer perception and also organizational perception. According to the Ndubisi (2006), trust, commitment, communication and conflict handling are four main indicators of relationship marketing. Thus, the customer complains registry analysis (table 1) prove that there is a problem in relationship marketing within the EASY MART Food city & repeat purchases indicate that there is a problem with customer loyalty within the company. Also face to face interview that conducted by researcher proves that there is a problem and inter- connection between relationship marketing and loyalty within the EASY MART Food city.

According to all these qualitative and quantitative information, it’s clear that there is a problem in relationship marketing within EASY MART Food city and it causes to the declining of customer loyalty. According to Singh (2002) Successful relationship marketing efforts improve customer loyalty and firm performance through stronger relational bonds. Therefore, it is important, to empirically examine the actual impact of relationship marketing on customer loyalty. Such understanding or finding will help to EASY MART Food city to establish the better management of company –customer relationship and to achieve the higher level of loyalty among customers.

Therefore, the present study is initiated How Does the Relationship Marketing (RM) impact on Customer loyalty with special reference to EASY MART Food city.

 

1.3 Research questions

Ø  Does the Relationship Marketing impact on customer loyalty?

Ø  Does the trust impact on customer loyalty?

Ø  Does the commitment impact on customer loyalty?

Ø  Does the communication impact on customer loyalty?

Ø  Does the conflict handling impact on customer loyalty?

 

 

1.4 Research objectives

Ø  To investigate the impact of Relationship Marketing on customer loyalty.

Ø  To investigate the impact of trust on customer loyalty

Ø  To investigate the impact of commitment on customer loyalty

Ø  To investigate the impact of communication on customer loyalty

Ø  To investigate the impact of conflict handling on customer loyalty

 

1.5 Research hypothesis

According to the empirical findings, i proposed the following hypothesis.

H1: There is a impact of trust on customer loyalty

H2: There is a impact of commitment on customer loyalty

H3 : There is a impact of communication on customer loyalty

H4 : There is a impact of conflict handling on customer loyalty

 

1.6 Conceptualization

A conceptual/research framework indicates how the researcher views the concept involved in a study specially the relationship between concepts. (Jais & Sebastian-Dominik, 2007, p.153)

Based on the research question, the following conceptual model has been constructed. In this model, relationship marketing was measured through commitment, trust, communication and conflict handling.

 

 

 

 

Conceptual framework

 

 

Trust

                               

Commitment

                                Trust      

Customer Loyalty

                           Commitment

Communication

                                                                                                                                   Communication

Conflict handling

 

                            Conflict handling

                           

 

Significance of the study

This research is highly significance to the each and every party to enhance their knowledge. This research is highly valuable to the company because in past time period there is nobody done this type of research. Due to that I try to do my best with regarding this research

1.7 The limitations of the study

Basically, the following limitations could be identification while doing this study.

·         The survey will be subjected to the bias and prejudices of the respondents.

·         The research will be carried out in a short span of time, where in the researcher will not be widen the study.

·         The study will not be generalized due to the fact that researcher adapted close ended questionnaires and carried out in an only one particular district in Sri Lanka.

There are more dimensions which affect the customer loyalty. But only four dimensions such as trust, commitment, communication and conflict handling were taken into consideration under the study

 

2.     Literature Review

 

2.1 Relationship marketing

The definition of relationship marketing has yet to develop and acquire meaning. Simply, new version of the transitional marketing has been identified as the Relationship Marketing. Generally Relationship Marketing refers all types of internal and external relationship but it focuses on external customer relationship (Buttle, 1996).

2.2 Customer loyalty

Loyalty can be defined as a strong feeling or support towards something. Customer loyalty is the support given by the customer to a specific organization or company. It is noted that, loyalty has been gained a considerable amount of attention over the last 80 years of marketing history. (Curtis, 2009).

 

2.3 Impact of Relationship Marketing on Customer Loyalty

According to (Bolton, et al., 2000; De Wulf et al., 2001; Verhoef, 2003), considerable number of evidences have been given by several empirical studies on the impact of relationship marketing on behavioral loyalty which affects customer retention. It is found that loyal customer relationships are the major reason to increase profitability of an organization for a firm over time (Reichheld, 2001; Mishra & Li, 2008).

2.4 The impact of Trust on loyalty

The first feature of Relationship Marketing is trust, which is identified as the most significant factor and mostly considered fact by number of authors (Morganand Hunt, 1994, Buttle, 2009).

2.5 The impact of Commitment on Loyalty

Commitment is considered as a compliment in buyer seller relationship (Moorman et al. 1993). Commitment is the important in differentiate between “stayers” and “leavers” (Wilson and Munmalananeni, 1986). The entire marketer and researcher consensus that committed relation between customer and company produce significant mutual benefits (Allen and Meyer, 1990).

2.6 The impact of Communication on Loyalty

Communication is considered as another important aspect of Relationship Marketing. Communication implies that the ability of discharging timely and trustworthy information to the customer. In the modern era, new concept of communication is two way dialogues between customer and company. It’s may be before or, after or during sell (Anderson and Nanus, 1990;  Ndubisi, 2007).

2.7 The impact of Conflict handling on loyalty

Conflicts are occurred when an individual is perceived incompatibility between his or her personal goals, needs, or desires and those of the other party. In dealing with conflict, people use different strategies to accomplish their goals. Dwyer et.al (1987) defined conflict handling as the ability of each supplier to avoid any potential conflict, solve that particular conflict before they create problems and the ability to discuss the solutions openly when the problem arises.

 

 

 

 

 

 

 

 

3. Methodology

 

3.1 Research approach

The researcher deduction method will be used as reasoning approach and expected to conduct the research in quantitative ways. Survey strategy will be selected as the research strategy for the study because researcher going to conduct the research by using quantitative type of data. Actually Surveys are the most common method of primary data collection

3.2 Population

This study addresses the impact of relationship marketing on customer loyalty with special reference to EASY MART Ratnapura Plc. Therefore the entire population of the study was consists with all the current and future customers of   EASY MART Ratnapura

3.3 Sampling units

The researcher selected current and future customers of EASY MART Ratnapura for this study. Therefore single current or future customers of EASY MART are the sample unit, who lives in Ratnapura area, different age limit, genders and different income level. However respondents who are below the age of 15 years were excluding from the research population as they are not having enough knowledge regarding research field.

 3.4 Sampling size

The total population to this study is current and future customers of EASY MART Ratnapura. So it's impossible to collect the data from all the population with the limited resources such as time, finance etc. thus following formula has been used to calculate the sample size for the research.

Sample size = (z^2* p (1-p))/c^2

Equation Sample size calculation formula

Where:

Z= confidence level (95%)

P= percentage picking a choice (0.5)

C= confidence interval (0.06)

According to the above sample selecting equation, this study requires 136 respondents as a sample. For minimize the non-responsive errors researcher has increased this sample size by 20%. According to that sample for this study is consisting with 163 respondents.

 

3.5 Sampling method

Sampling process is essential elements of research methodology for conduct a research (Kumar, 2008). Sampling technique provide an effective method that helps the researcher to reduce the size of data by considering any sub group rather than whole population (Saunders et al, 2007, p.168). This study is limited to customers of EASY MART Ratnapura.

Systematic quasi-random sampling has been adopted to select respondents to the study. According to this method every second customer to enter the EASY MART on each day of the survey, starting with the first to come through the doors at start of business, at 8.00 am. This sampling method was chosen because it permits analysis of possible selection bias or error (sher and Trull, 1996).

3.6 Data collection instrument

Primary and secondary data will be used for this study. Primary data are collected through the questionnaire from the EASY MART customers who live in Ratnapura area. And secondary data are collected from texts, journals and magazines

3.7 Analysis method

For the data analysis, hope to use Correlations, Regressions, Percentages and other Descriptive statistics methods SPSS package will be used to analyze the data of this study.  All the data will be collected and summarized according to standard format and it will easy to analyze those data

 

 

 

 

3.8 Time frame

Task	Time period	Month
		Feb				Mar				April				May				June				July
		1	2	3	4	1	2	3	4	1	2	3	4	1	2	3	4	1	2	3	4	1	2	3	4
Understand the organization & its process
Organizational issue analyzing
Referring literature
Preparing research proposal
Preparing chapter 1
Preparing chapter 2
Developing questionnaire
Data collecting
Preparing chapter 3
Preparing chapter 4
Preparing chapter 5
Finalizing research
Report submission

Source: own elaboration (2020)