ABSTRACT

This research work “THE INFLUENCE OF SERVICE AND PRODUCT QUALITY ON CUSTOMER SATISFACTION”, CASE OF UBA-VENTURES PLC BAMBILI, TUBAH SUB- DIVISION CAMEROON. The study had as objectives; to evaluate the quality of services provided by the staffs and management of UBa-Ventures PLC; to determine the level of satisfaction of customers with the service and product quality of UBa-Ventures PLC and to established the relationship between service/product quality and customer satisfaction. The study was based on the null hypothesis that the quality of services and products offered by UBa-Ventures PLC has no significant influence on customer satisfaction.

Data for the study was gotten from both primary and secondary sources. 120 structured questionnaires were administered to customers of UBa-Ventures PLC who were selected through the simple random sampling technique. Data was analysed using descriptive and parametric analysis and presented using the, tables and charts. Results show that Customer service and product are of average quality with a mean average of 3.13 .

The Chi-square revealed that χ2 =9.680 and p = 0.002… with a degree of freedom = 1. The value p which is the probability of the null hypothesis being true, is much lesser than our alpha level α = 0.05 therefore, I reject the null hypothesis in favour of the alternative. This means that service and product quality has a significant influence on customer satisfaction. It is therefore recommended that the management and customer service departments of UBa-Ventures should be able to identify primary objectives of customers so that they can put in place those customer services that best satisfy them. A high level of customer satisfaction will enable UBa-Ventures PLC to maintain customer loyalty and a positive word of mouth (WOM) from the customer and hence growth of the organisation.

Key Words: product quality, Service quality, customer satisfaction, customer loyal.

CHAPTER ONE

INTRODUCTION

1.1Background of the study

The hospitality industry is constantly undergoing change, as time changes, so do the needs and expectations of customers.  Organizations continuously strive to increase their customer base. They provide products and services to fulfil different needs of the customers. The focus is now moving from short-term satisfaction to long-term relationship between the firm and its customers (Grönroos, 2000). Finding new customers is important for a business, but equally important is keeping the old customers since many researchers found that focus on customer retention has resulted in economic benefits (Buttle, 2004; Dawkins and Reichheld, 1990).

With the change of time and situation, the scenario of business world is increasingly being competitive. On the contrary, due to globalization and internationalization the competitiveness of business environment, either from national or international market, strongly motivates or develops the awareness about the consumer right along with their expectations and demands (Smith, 1989; Sellers, 1990). According to Berry (1986), it would be beneficial to categorize this concept into two identical terms as “goods” or “services”; however, in real life retailers still offer for some form of service in order to motivate and facilitate higher level of sale of goods leading to have the relative influence in customer retention.

As such, UBa Ventures PLC which is key players in this industry should update their products, especially their service and product quality to match the needs and expectations of customers to ensure a high level of customer satisfaction.  Satisfied customers are likely to be loyal, make repeated orders and use a wide ranch of service and products offered by a business.

Customer retention is considered to be the primary goal for organizations that practice relationship marketing (Coviello et al., 2002). Once a customer is retained it means that the amount of purchase grows which in turn reduces the customer replacement costs. Retained customers may pay higher prices and purchase regularly without any discount offers which is the tool used to acquire new customers (Ang & Butle, 2006). Interesting findings by Lindgreen et al. (2000) state that “it can be up to ten times more expensive to gain new customer than to retain a customer.

Customer service is an organization’s ability to supply their Customers wants and needs. Kotler (2000) defines customer service as a service that an organization can offer to a customer which is essentially intangible and does not result to the ownership of anything but brings about customer satisfaction. This therefore means that all the interactions between the service providers and customers should strive towards the satisfaction of the customer to build a long-lasting relationship. A customer is defined as anyone who receives that which is produced by an individual or organization that has value (Anshori and Langner, 2007). Customers’ expectations are continuously increasing. Customers seek out service products and producers that can satisfy their requirements. The modern concept of customer service has its roots in the craftsman Economy around the 1800s, when individuals and small groups of manufacturer have competed to produce arts and craft to meet public demands. The manufacturer could meet the customers on one to one basis and talk to customers to understand them and get all details. But then with the advent of industrial Revolution in the early 20^th century, technology was fast growing so it became difficult to provide individual needs of the customers. This was followed by an increase in the demand for goods and services after World War II in 1945.

In the 21^st century, however, there has been an increase in the number of companies involved in the provision of services, leading to high level of competition in the service industry. Customers are face with a wide variety of choices and as such they go in for the highest quality of service they can afford. Service providers are faced with task of providing those services that are going to meet the customer needs satisfactorily. Customer service and customer satisfaction have become a major area of attention to practitioners and academic researchers. This has a strong impact on customer behaviour and business performance. Service quality leads to customer satisfaction and higher profitability (Oliver, 1997). To achieve customer satisfaction, it is important to recognize and to anticipate customers’ needs and to be able to satisfy them. Enterprises which can rapidly understand and satisfy customers’ needs, make greater profits than those which fail to understand and satisfy their customers.

Customer service is the provision of service to customers before, during and after a purchase.  Customer service is a series of activities designed to enhance the level of customer satisfaction – that is, the feeling that a product or service has met the customers‟ expectation. Customer service in an organization includes reliable service, security, and parking space, customer attention and sensitivity to their needs, honesty and good attitude towards customers. Customers service are focused on making the customer comfortable creating memorable interactions in the minds of the customer and making them feel better, satisfied than they were before the transaction.

Customer satisfaction is the outcome of customers perception of the value received in a transaction, this in turn results in higher customer loyalty hence growth of the organization.  Customer loyalty is a major contributor to sustainable profit and growth. The components in the service profit chain includes: employee satisfaction, value of service, customer satisfaction, customer loyalty, profit and growth. Sadly, most mature companies often forget the things that made them successful in the first place. They lose focus on the customer and start focusing on their already made profits. They look for ways to cut cost or increase revenues, often at the expense of the customer. They forget that satisfying a customer needs continuous value innovation which is the only path to sustainable growth. This creates opportunities for new smaller companies to improve upon what made their bigger competitors successful in the first place and steal their customers. To be successful in the market it is not sufficient to attract new customers.

1.2 Clarification of Concepts

Customer: Is a person or company that receives, consumes or buys a product or service and can choose between different goods and Suppliers. Studies have shown there is a very strong relationship between customers and a business in this study, customer satisfaction will determine the quality of the product or service.

Customer Care service: Kotler, (2000) defines customer service as a service that an organization can offer to a customer which is essentially intangible and does not result in the ownership of anything but brings about customer delight and satisfaction. In other words, Customers service is a service that seeks to acquire new customers, provide superior customer satisfaction and build customer loyalty.

Product Quality: Product quality means to incorporate features that have a capacity to meet consumer needs (wants) and gives customer satisfaction by improving products (good) and making them free from any deficiencies or defects.

Product quality can also be defined as an extent to which a product succeeds to meet the needs of the customer (Lemmink & Kasper, 1994). According to product based approach, the quality is the root of economics and the variation in quality of product are the reflection for differentiation in quality (Garvin, 1984).

Customer satisfaction: Customer satisfaction is defined as measurement that determines how happy customers are with a company’s products, services, and capabilities.

Kotler, (2000) defines customer satisfaction as the extent to which a product’s perceived performance matches a buyer’s expectation. Also, customer satisfaction is typically defined as a post consumption evaluation judgment concerning a specific product or service. It is a feeling that a product or service has met the customer’s expectation.

Service: A service is any act or performance that one party can offer to another that is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product (Kotler, 2000). A service is an additional activity provided to customers, usually as part of a product package.

Service quality: Service quality can be defined as the difference between customer expectation of service and perceived service. It is the customers overall impression of the services offered by an organization or by the service personnel.

Customer loyalty: Customers loyalty is the act of choosing one company’s products and services consistently over their competitors.

Word of mouth (WOM): This refers to personal communication about products or services to their neighbors, friends and family members.

Perception: this is the process by which people select, organize and interpret information to form a meaningful picture about a product or service.

1.3 Statement of Problem

Given the complexity and highly competitive nature of the companies,  UBa Ventures are faced with the challenge of revising their customer product and service quality by increasing the number of services and improving on the quality of the already existing services and products  to provide customers with exceedingly satisfactory experience. This task is usually not an easy one for UBa Ventures PLC because Customers needs are constantly changing and management staffs for UBa Ventures should anticipate these needs to meet or exceed customers’ expectations. UBa Ventures PLC is unable to gain competitive advantage since some customers still patronise the services and products of it competitors.

Failure to do so will probably cause customers to seek the services and products of competitors. On daily basis, many Cameroonians complain loudly about poor treatment of customers by service providers. This customer is forced to move from one company to another in search of better service and product. UBa Ventures have experience low patronage from customers, which led to decrease in profitability of such organization. A common trend among customer’s who patronize the services and products of UBa Ventures  either complain of taste, colour, packaging, price of the product quality and company corporate image .the problem of how to know which to offer and to what extent as always resulted in an attempt to make consumer loyal to product.  Because of this, the following research questions were developed what influence does the service and product quality provided by the management have on UBa Ventures PLC? What is the level of satisfaction of customers with the service and product quality of UBa Ventures PLC.  What is the influence of service and product quality on customer satisfaction? It is due to this that the researcher seeks to carry out this study on the Influence of Service and product Quality on Customer Satisfaction.