1.1 Background of the Study
It is observable that a number of organizations are excellent at
appearing or pretending to care for their customers. Some companies only
pay “lip service” to their customer satisfaction. Others are remote
from their customers and do not listen to them, while still some other
companies believe that because they have a customer service department
or a customer service manager, they automatically have become
customer-driven. The employees on their part behave in such a way that
suggests that they are not empowered to satisfy the customers in terms
of rendering excellent customer service.
Some food and beverages firms in Nigeria could be traced under some
or all of these conditions. It is, therefore, suspected that most of
them have not efficiently and effectively adopted Customer Relationship
Management which may have resulted in their unsatisfactory Company
performance. In the Nigerian Bottling Company Plc, Nwokah and Maclayton
(2006) observed that the company in introducing new products such as
Fanta Chapman and Black Current, which suddenly failed in the market
place was not customer centric but competitive centric resulting to the
these products in the Market place at the test marketing stage of
product development process. Nwokah (2008) further noted that these
products as cited from their bulletin were subsequently replaced with
Fanta Pineapple and Lemon. Companies are now more than ever focusing on
high customer retention and maintaining good long term customer
relationships. Customer relationships management (CRM) is a highcustomer
retention strategy. It is very important toknow more about customers’
needs and offercustomized products and services in order to improve
customer satisfaction and loyalty.
Two main strategies, collecting customers' profiles and promoting
customer participation, are used to probe customers' needs. Customer
Relationship Management (CRM) has attracted an expanded attention of
practitioners and scholars. More and more companies are adopting
customer-centric strategies, programs, tools, and technology for
efficient and effective customer relationship management. They are
realizing the need for in-depth and integrated customer knowledge in
order to build close cooperative and partnering relationships with their
emergence of new channels and technologies is significantly altering
how companies interface with their customers, a development bringing
about a greater degree of integration between marketing, sales, and
customer service functions in organizations. It is observable that a
number of organizations are excellent at appearing or pretending to care
for theircustomers. Some companies only pay “lip service” to their
customer satisfaction. Others are remote from theircustomers and do not
listen to them, while still some other companies believe that because
they have a customerservice department or a customer service manager,
they automatically have become customer-driven. Theemployees on their
part behave in such a way that suggests that they are not empowered to
satisfy the customersin terms of rendering excellent customer service.
In Nigeria, some food and beverages companies seem to have embraced
CRM and its capabilities because of the greater competition in the
industry. Large sums of money may have been invested in the promise of
this CRM. Despite the fanfare and large expenditures, CRM may not have
fulfilled its promise. While some executives view CRM as a technological
solution, they often even focus myopically on installing the latest
computer system and overlook critical business issues. According to
Nnabuko (2004), companies that view CRM as a technological “silver
bullet” fail to develop a comprehensive strategy while neglecting to
build a business case for CRM. In the food and beverages industry, the
technology or some other variables may have produced little operational
improvements and so the dimensions of their marketing performance over
the years seem not to be significant (Nwokah, 2009). When an investment
fails to meet expected return, it may probably not be because the
resources failed to perform as specified but because the customer’s need
may not have been defined upfront and the wrong decisions and plans
chosen. Smith (2007) declared that many firms have failed to create
value from CRM and dissatisfaction is growing.
Customers are the most important factors for the success of any
business but less attention has been given by many organizations in this
regard. This paper aims to evaluate the effects of CRM on Company
performance in the context of food and beverages firms in Nigeria.
1.2 Statement of Problem
Nigeria food and beverages industry are increasing in Nigeria, yet
the level of failure in their services indicate that ineffective
relationship with customer seems to be pronounced. Some of the
manufacturing firms, especially the food and beverage companies that are
still in business and are listed in Nigeria stock exchange find it
difficult pay dividend to their shareholders. Notable example include
Champion Breweries which has not paid dividend
since1988, Golden Breweries has not paid since 1997 (salandeen,
2001). Some Nigeria workers were forcefully disengaged from their
services, example Ajaokuta steel industry reduced their staff from five
thousand to one thousand in 2007, despite the above scenario, the
companies post huge figures of their accounts receivables. It is as a
result of the above problem that the researchers deemed it necessary to
examine the effect of receivables management on corporate profitability
of food and beverages manufacturing firms quoted on the Nigerian stock
Evidence from the literature suggests that employee‟s compensation
plays a key role in any organisation because it is at the heart of the
employment relationship and of critical importance to both employees and
employers. Employees typically depend on wages, salaries, and so forth
to provide a large share of their income and on benefits to provide
income and health security. Relying on Vroom (1999) expectancy theory,
several researches have confirmed positive relationship between rewards
system and performance.
However, a recent study by Aberdeen Group (2008) reveals there is
still much confusion on how to do it right observing a general lack of
visibility into many compensation programs being created, and a lot of
bad habits being brought into the process. Empirical evidence as to the
perceived influence of compensation plan on the performance of food and
beverage firms in a developing economy like Nigeria thus becomes
imperative. This study remains germane by investigating the influence of
compensation plan on the performance of selected employees in the
Nigerian quoted foods and beverages industry.
1.3 Purpose of the Study
The general purpose is to examine the Customer Relationship
Management and Company Performance while the specific sub-objectives
1. To examine the relationship between Trust and Company Performance in the Nigerian food and Beverages Industry.
2. To examine the extent to which Empathy influences Company Performance in the Nigerian food and Beverages Industry.
3 To examine extent to which Communication influences Company Performance in the Nigerian food and Beverages Industry.
1.4 Research Questions
1. To what extent does Trust influence Company Performance in the Nigerian food and Beverages Industry?
2. To what extent does Empathy influence Company Performance in the Nigerian food and Beverages Industry?
3 To what extent does Communication enhance Company Performance in the Nigerian food and Beverages Industry?
CONCEPTUAL FRAMEWORKS OF CUSTOMER RELATIONSHIP MANAGEMENT AND COMPANY PERFORMANCE IN THE NIGERIAN FOOD AND BEVERAGES INDUSTRY
Source: Conceptualized from literature, 2015
1.5 Research Hypotheses
The following null hypotheses are formulated from the above specific objectives:
H01: There is no significant relationship between Trust and market share in Nigerian food and Beverages Industry.
H02: There is no significant relationship between Trust and Customer retention in Nigerian food and Beverages Industry.
H03: There is no significant relationship between Empathy and Market Sharein Nigerian food and Beverages Industry.
Ho4: There is no significant relationship between empathy and customer retention in Nigerian food and Beverages Industry.
Ho5: There is no significant relationship between communication and market share in Nigerian food and Beverages Industry.
H06: There is no significant relationship between communication and customer retention in Nigerian food and Beverages Industry.
1.6 Significance of the Study
This study will be of benefits and interest not only to Nigerian Food
and Beverages in Nigeria, but it will be valuable to other service
sectors in Nigeria as a whole. The study will also be a source of
secondary data to other researchers who wish to conduct studies on
related issues. It will again act as mainstream for generating, keeping
and maintaining customers.
The research also provided the management of Nigerian Food and
Beverages in Nigeria with a better understanding of the CRM concept and
assisted them to improve their own service quality.
Students, Lecturers, Academia, bank Management Staff, Researchers,
and the general public will avail themselves of wealth of knowledge
offered by this study. The study will also serve as a useful reference
material for students, academicians, institutions, corporate bodies and
corporate managers who are interested in the subject of Nigerian Food
and Beverages in Nigeria.
1.7 Scope of the Study
The general scope of this study covers Customer relationship
management and company performance. The geographical scope is Rivers
State of Nigeria. The units of analysis covers randomly selected
Nigerian Food and Beverages Industry in Rivers State.
1.8 Limitation of the Study
No research work is devoid of limitations. This study in that wise,
is no exception. It therefore suffered the following constraints.
Lack of Finance: Finance was the major problem
encountered in this study by the researcher. Money to travel and source
for materials: Also, typing, making photocopies, binding the project
work constituted a problem to the researcher.
Time Constraint: The time available for this study
was not enough for me as I had to read, do assignments, write term
papers I tests engage in my private activities and prepare for my final
1.9 Definition of Terms
Customer Relationship Management: Customer
relationship management (CRM) is a term that refers to practices,
strategies and technologies that companies use to manage and analyze
customer interactions and data throughout the customer lifecycle, with
the goal of improving business relationships with customers, assisting
in customer retention and driving sales growth.
Empathy: the provision of caring, individualized attention to customers
Customer Retention:Customer retention is the
activity that a selling organization undertakes in order to reduce
customer defections. Successful customer retention starts with the first
contact an organization has with a customer and continues throughout
the entire lifetime of a relationship.
Profitability: This is a function of customer satisfaction with the firms produce or service offerings.