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IMPACT OF CUSTOMER COMPLAINTS ON MARKETING PERFORMANCE IN THE SERVICE INDUSTRY (A CASE STUDY OF MTN NIGERIA)

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

The dream of any good entrepreneur is not actually to sell what he can sell but to retain customers. In pursuance of this line of action, the customer must be placed at the centre of all marketing activities without which no marketing activity takes place. Customer satisfaction is the pivot on which all marketing activities revolves, be it in production or in marketing.

Although service oriented companies do not have any tangible good to their credit, the most effective means of measuring consumers satisfaction is by listening to their complaints. These complaints are not actually made to tarnish the image of the producers, but to improve on their services. Since the consumers do not own anything from the payment he makes, the perishable services he receives must offer enough satisfaction for the sums of money so expended.

To a good producer, these complaints will actually guide him in the planning of his product, by way of determining what his customers actually want and to the qualities they can afford to acquire. Appropriate pricing may be an outcome of a customer’s compliant. The prices at which the best service is offered could really affect its demand. If best decisions are taken in that line, the producer is likely to triumph over his competitors. Marketing concepts which involve letting the people know of the product and sending the product to where it is actually needed, will create no less impact. A good mix of product, price, place and planning will give a fantastic reap-off.

Empirical evidence has shown that service firms typically lay behind manufacturing firms in their use of marketing. In comparison to manufacturing firm, service firms appear to be generally less likely to have marketing-mix activities carried out, less likely to perform analysis in the offering area, more likely to handle their advertisement internally than to go to experts, less likely to have an overall sales plan, less likely to develop sales training progammes, less likely to use marketing research firms and consultants and less likely to spend as much on marketing when expressed as a percentage of gross sales.

There are several reasons why service firms have neglected marketing. One of this reasons is that many of them are small, so do not use expansive marketing technique because of cost. In some cases they are deemed irrelevant. Some of them are business firms like Law, Architecture, Accounting and Management consulting firms, who think it is unnecessary using professionals in other fields for their functional activities.

Most observers agree that competition in industry is becoming increasingly intense. More and more companies worldwide are searching for ways to build sustainable advantage to counter this threat. As costs rises, as productivity stagnates and as service quality deteriorates, more service firms need to take interest in marketing. More market sophistication is needed as competition intensifies. More pressure is now on service firms to increase productivity. Since the service business is highly labour intensive, cost has been rising rapidly. To this end, it is not enough to make workers work harder, but more training will provide the needed skill geared towards customer’s satisfaction. The quality of service may be improved by reducing quantity and vice versa. An increase in equipment has a lot to do with improvement in services rendered.

Imaga and Ewurum (1998).

In a nutshell, customer services should be of prime importance to service or companies, which could be improved upon by taking customers complaints very seriously and acting in the direction that will bring a better satisfaction to the customers. To this end, it is important for companies to develop customer services that are desired by customers and effective against competitors. The company has to decide the most important services to offer, the level at which services should be provided and the form each service. The service-mix can be coordinated by a customer-service department that handles complaints and adjustments, credit maintenance, technical service and customer information. Marketing need to know more about marketing service products.

According to Imaga and Ewurum (1998), service are activities or benefits that one part offers essentially as intangible product to the other and do not result in the ownership of anything. Service are not only intangibles, they are also inseparable, variable and perishable. Two main types of service can be identified viz:

v Material Service: This consists of the actual product or service, which you are selling. It is all about getting the product right.

v Personal Service: this is the way in which the material service is delivered. It is about the interaction between your employees and your customers.

It is probably the most visible part of the operation and often the part in which a company is adjudged “good of bad”. Personal service is the focus of this research work.

Though service industries have always behind in the use of marketing concepts, there is compelling need for a change in attitude.

In another alternative expression, services can be classified into People or Equipment based. A good example in this case is a Lawyer or an Accounting consultant; a motor mechanic or an aircraft used in conveying passenger. While the former is people based, the latter is equipment based. It would also need the client’s presence. In this case, a doctor needs the presence of the patient (client) for him to do his work. The motive for providing such services may differ. Private and government hospitals provide close to the same service but while the private hospital wants to maximize profit, the government hospital wants to maximize service to the people. In whatever way they are looked at, all are service oriented. Admittedly, customer complaints must be geared towards maximum satisfaction and should be treated as such. However, the pill given in one case may not be the same with another and the dosage in one may differ from the other.

Customer’s complaints should not be a threat; it should be viewed on a positive side as an instrument of change that will improve the condition of the firm, industry and the economy in general. If marketing is a means of knowing customers’ needs, providing them, and making sure it gets to the target customers is expected to improve marketing performance if well handled.

1.2 STATEMENT OF THE PROBLEM

From the study, the impact of customer complaints on the marketing of services is un-quantifiable. However, the neglect of this all-important aspect of marketing has caused untold problems to service firms, the industry in particular and the economy in general.

This is due to slack in the general performance in the industry.

A very satisfied customer might tell one or two people how pleased he is, but research has shown that a dissatisfied customer would obviously tell so many people about his ugly experiences.

This has paved way for serious economic issues among which are dissatisfaction of customer’s needs and expectations, which leads to customer sourcing for alternatives where practicable. This results to loss of customer, loss of revenue and reliance on government subvention where available. This result in low level of capacity utilization, rise in fixed costs and retrenchments. The few ones that are able to survive maintain monopoly advantage to the detriment of the consumer in particular and economy in general. What follows is that government advocate for privatization of such key but inefficient service industry. Most Nigerian entrepreneurs in the service industry are very unserious. Apart from keeping low customer relationships, they are never at their seat of businesses.

They are always globetrotting. One wonders what business has he/she in Germany/Tokyo etc. when his customers are here unsatisfied. With government enterprises, authorities that should receive and act swiftly on complaints are not easily accessible. Customers who have been humiliated by the desk attendants leave with great disappointments.

1.3 OBJECTIVES OF THE STUDY

The overall objective of the study is to ascertain the impact of customer complaints on marketing performance in the service with particular emphasis on MTN Nigeria. The specific objectives are as follows

• To establish how MTN as a service industry have fared in handling customer complaints,

• To evaluate the problem created by ineffective handling of customers’ complaints and its impact on the marketing performances of MTN.

• To understudy the nature of these complains and how they affect MTN.

• Recommendation on a lasting solution to the problems which if implemented will go a long way to solving this menace, will be propounded.

1.4 RESEARCH QUESTION

To ascertain the avenues through which MTN customers channel their complaints: the following research questions have been raised: the sub-objectives are as follows:

1. Is it necessary for customer to complain?

2. How do complaints help in either improving or demoralizing

3. The efforts to provide good and efficient services?

4. Whom should a customer complain to?

5. What is the method of complaints?

6. What benefits accrue to effective customer complaint handling?

7. How do MTN customers react to non favourable business conditions due to poor condition of services or non-response to their complaints?

8. What services marketing strategy has kept MTN company afloat despite the Nigerian economic meltdown?

9. How does management of MTN Nigeria ensure that customers are satisfied?

1.5 HYPOTHESESS

Being guided by the main purpose of this research and the need for a thorough investigation into the subject matter, the researcher formulated the following hypotheses to be tested in the study. It is therefore reasonable to insulate them as follows:

H1: Customer complaints have been given the required attention in MTN.

Ho: Customer complaints have not been given the required attention in MTN.

H1: Customer complaints if properly handled, could affect economic performance of MTN.

Ho: Customers complaints if not properly handled could affect the economic performance of MTN.

1.6 SIGNIFICANCE OF THE STUDY

This work is designed to be of immense benefit to various classes for entrepreneurs and people in the society. It will be mostly needed by researchers in the field of marketing, especially in the area of customer relation. Producers of service will need it to know how to handle customers’ complaints and satisfy them. The government may need it to make rules that would guide industries on minimum expectations by the governed shareholders and other interested parties. Employees will find it of immense benefit, because it will be handy for effective study of customers’ complaints and attitudes expected of them. This is because management efforts will be futile if the people served are not satisfied.

1.7 SCOPE OF THE STUDY

The intention of this project is to determine the influence of customer complains on the performance of services companies. To this end, various marketing strategies adopted in the service industry will be over-viewed. Various classes of complaints laid by customers and their expectation will be discussed. Methods of handling these complain to ensure satisfaction will be looked into. However, this study has no plan to go into any quantitative approach of measuring customer satisfaction and customer value determination. Even though many service industries exist within Enugu Metropolis. MTN Nigeria has been chosen because of its leading position in the communication industry, which is service oriented in Nature.

1.8 LIMITATIONS OF THE STUDY

Though deliberate effort is being made to have a worthwhile study with sufficient validity and reliability, this work should not be viewed as a final solution to customer complaints handling in service industry.

An exploratory research such as this is aimed at providing preliminary information/analysis that will give insight into the main things (factors or variables) to take for in the next aspect of the research which should be more detailed. Most of the constraints might result from natural phenomena while some are manmade. There is constraint of resources for reference purpose especially responses on collection of data. However the researcher is poised to make the research most reliably valid.

REFERENCES

Ikeagwu, E.I. (1998). Groundwork of Research Methods and Procedures; Institute for Development Studies, UNEC

Imaga, E.U.L. and Ewurum, U.J.F. (1998). Business Management Topics; Oktek Publishers, Enugu Nigeria

Onwumere J.U.J. (2009). Business & Economic Research Methods. Vougasen Limited, Enugu.