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CHAPTER ONE

INTRODUCTION

1.1.    Background to the Study

While there may be many varying answers to why human beings exist, there may be only one answer to why business organisations and or companies exist. A smart economist may generate diverse answers to this one simple question but all will boil down to one point that organisations exist because of the customer as the entire activities of every organisation is targeted towards satisfying a group and or groups of people termed consumers or customers.

Quite often, the difference between organisations that merely survive in business and those that flourish is keeping up-to-date, and fine-tuning to the dynamics of attitudes and prospects in the market place. One of such changes has been the major changes in attitudes of customers over the years. There was a time when customers were less critical and vocal if not totally satisfied when dealing with a business. This was the time when the choices available on where and who to deal with was limited. The power belonged to the business owner, customers had nowhere else to go and, therefore, customer satisfaction was not so important. This is not the case today. Today, corporations face their hardest rivalry, because they move from a product and sales viewpoint to a marketing philosophy, which gives a company a healthier chance of beating competition (Kotler, 2000). This is because today, customers are becoming increasingly more demanding, less tolerant and very critical when not having their hopes met as they have a lot of choices on where and who to deal with. As a result the power has now shifted to the customer. If they feel you cannot satisfy their expectations they will simply leave and deal with someone who will.

What a customer wants from an organisation is one important issue that is answered in this study. Assuming you go to a restaurant to eat. The waitress comes with a smile to attend to you. You go to another eatery that happens to be bigger than the former and you meet this so serious minded waitress who is all about her business. There is a tendency for you to return back to the small cafeteria and eat. It is psychological that smile alone gives you not just an internal satisfaction but also generates a sense of belonging for the customer. Hokanson (1995) notes that various factors affect customer satisfaction. Such factors include friendly employees, courteous employees, knowledgeable employees, helpful employees, accuracy of billing, billing timeliness, competitive pricing, service quality, good value, billing clarity and quick service.

According to Kotler (2003) a consumer’s buying behaviour is influenced by cultural, social, personal and psychological factors. Personal relationship with consumers generates an intimate relationship with the consumer. The customer is thereby ready to generate dialogue on and relatively pardon short comings of the product of the organisation if any. While many critics of public relations will note that all consumers needs to be satisfied is good quality product at a reasonable and or relatively low price. True, but what attracts the organisation to the public first is its image. There is a tendency to lose its customers drastically if the right imagery for your organisation is not in place.

Scholars have argued that switching costs, is one of the key moderating variable that can significantly influence customer loyalty through such determinants as customer satisfaction, (Oliver, 1993). Schneider and Bowen (1999) advocated that service business can retain customers and achieve profitability by building reciprocal relationships founded on safeguarding and affirming customer security, fairness and self-esteem. It requires that companies view customers as people first and consumers second. Levitt (1986) says that trust, commitment, ethical practices, fulfilment of promises, mutual exchange, emotional bonding, personalization and customer orientation have been reported to be the key elements in the relationship building process. This means that the customer derives real value from the relationship which translates into value for the organisation in the form of enhanced profitability, customer sustainability as a result of loyalty generated by the satisfaction of the customer over a long period of time. Angelova and Zeriki (2011) note that “Service quality and customer satisfaction are very important concepts that companies must understand if they want to remain competitive and grow”

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