Relationship Marketing - Assignment

ASSESSMENTS ON DETERMINANTS OF RELATIONSHIP MARKETING: THE CASE OF ETHIO
TELECOM, BAHIR DAR BRANCH
Department of Business Management, Faculty of Business and Economics, Woldia University, Ethiopia
ARTICLE INFO ABSTRACT
Businesses are living in a world of stiff competition. To be successful in this competition, considering
customer relationship is a requisite, and organizations need to investigate more on the determinants of
relationship marketing.
marketing on overall relationship quality of Ethio telec
employed descriptive statistics. Study population for the study was customers who are living in
Bahirdar city and customers who come to Bahirdar during the study period. Questionnaire and
interview were used as
got highest value on relationship marketing of Ethio telecom followed by trust, commitment.
However, only about half of the customers are happy with ET conflict handling.
show that ET relationship quality is good where as organizational ability in conflict handling is poor.
Copyright © 2016, Belay Mengstie. This is an open access article distributed under the Creative Commons Att
distribution, and reproduction in any medium, provided the original work is properly cited.
INTRODUCTION
Today, service delivery companies and institutions worldwide
compete due to the demands and expectations of the customers
induce a factor for the survival of their professional activities.
However, only those groups of the institutions will be more
successful that correctly recognize, customer is a valuable
investment. According to Kindye (2011), improved customer
satisfaction will lead to improved customer loyalty, which will
eventually improve profit. In order to satisfy our customers, we
have to focus on effective customer services to meet their
immediate needs. Besides Kotler (2002) stated
longer enough to satisfy customers unless we must delight
them. Hence customer satisfaction is critical to any product or
service as it is a strong predictor of customer retention,
customer loyalty and product repurchase. Relationship
marketing practice is different from transactional marketing
practice, transactional exchanges as transactions with a distinct
beginning, short duration, and sharp ending by performance,
whereas relational exchanges as exchanges with
commencement traces to previous agreements, longer duration,
and reflecting an ongoing process. Hence in the case of
Relationship marketing the solution is the relationship itself but
in transactional exchange the solution is the product in the form
*Corresponding author: Belay Mengstie,
Department of Business Management, Faculty of Business and
Economics, Woldia University, Ethiopia.
ISSN: 0975-833X
Article History:
Received 23rd January, 2016
Received in revised form
14th February, 2016
Accepted 16th March, 2016
Published online 26th April, 2016
Key words:
Ethio Telecom (ET),
Relationship Marketing.
Citation: Belay Mengstie, 2016. “Assessments on determinants of relationship marketing: the case of Ethio telecom, Bahir Dar branch
Journal of Current Research, 8, (04), 29944-29951.
RESEARCH ARTICLE
ASSESSMENTS ON DETERMINANTS OF RELATIONSHIP MARKETING: THE CASE OF ETHIO
TELECOM, BAHIR DAR BRANCH
*Belay Mengstie
Department of Business Management, Faculty of Business and Economics, Woldia University, Ethiopia
ABSTRACT
Businesses are living in a world of stiff competition. To be successful in this competition, considering
customer relationship is a requisite, and organizations need to investigate more on the determinants of
relationship marketing. The objective of the research is to assess determinants of relationship
marketing on overall relationship quality of Ethio telecom. To achieve this objective the researcher
employed descriptive statistics. Study population for the study was customers who are living in
Bahirdar city and customers who come to Bahirdar during the study period. Questionnaire and
interview were used as data collection tools. The result of the study shows that Communication has
got highest value on relationship marketing of Ethio telecom followed by trust, commitment.
However, only about half of the customers are happy with ET conflict handling.
show that ET relationship quality is good where as organizational ability in conflict handling is poor.
is an open access article distributed under the Creative Commons Attribution License, which
distribution, and reproduction in any medium, provided the original work is properly cited.
Today, service delivery companies and institutions worldwide
and expectations of the customers
induce a factor for the survival of their professional activities.
However, only those groups of the institutions will be more
successful that correctly recognize, customer is a valuable
improved customer
satisfaction will lead to improved customer loyalty, which will
eventually improve profit. In order to satisfy our customers, we
have to focus on effective customer services to meet their
Besides Kotler (2002) stated that, it is no
longer enough to satisfy customers unless we must delight
Hence customer satisfaction is critical to any product or
service as it is a strong predictor of customer retention,
customer loyalty and product repurchase. Relationship
ting practice is different from transactional marketing
practice, transactional exchanges as transactions with a distinct
beginning, short duration, and sharp ending by performance,
whereas relational exchanges as exchanges with
ious agreements, longer duration,
and reflecting an ongoing process. Hence in the case of
Relationship marketing the solution is the relationship itself but
in transactional exchange the solution is the product in the form
Department of Business Management, Faculty of Business and
of physical goods and service (Ganesan, 1994). He also
explained that Relationship marketing is more applicable,
especially for service provider
In the case of service marketing, it is process consumption than
outcome consumption. Relationship marketing is designed to
develop strong connections with customers by providing them
with information directly suited to th
by promoting open communication. This approach often results
in increased word-of-mouth activity, repeat business and a
willingness on the customer’s part to provide information to the
organization. Naudé and Buttle (2000) made
major constructs of relationship quality identified in the
literature. Based on their constructs relationship quality is a
combination of trust, commitment, communication, conflict
handling, etc.
However, according to different scholar
determinant‘s magnitude on the relationship quality of the
organizations is different. Different researchers identified
different determinants of relationship marketing on their
countries context and similarly it may be different in the cas
of our country’s experience. Moreover, as to the studies in
Ethiopian set up, the work of Negi (2010) is important to
mention. Negi has tried to see the antecedents of relational
marketing and customer loyalty in the case of Ethiopian
Telecommunications Corporation.
Available online at http://www.journalcra.com
International Journal of Current Research
Vol. 8, Issue, 04, pp.29944-29951, April, 2016
INTERNATIONAL
Assessments on determinants of relationship marketing: the case of Ethio telecom, Bahir Dar branch
z
ASSESSMENTS ON DETERMINANTS OF RELATIONSHIP MARKETING: THE CASE OF ETHIO
Department of Business Management, Faculty of Business and Economics, Woldia University, Ethiopia
Businesses are living in a world of stiff competition. To be successful in this competition, considering
customer relationship is a requisite, and organizations need to investigate more on the determinants of
The objective of the research is to assess determinants of relationship
om. To achieve this objective the researcher
employed descriptive statistics. Study population for the study was customers who are living in
Bahirdar city and customers who come to Bahirdar during the study period. Questionnaire and
. The result of the study shows that Communication has
got highest value on relationship marketing of Ethio telecom followed by trust, commitment.
However, only about half of the customers are happy with ET conflict handling. Descriptive results
show that ET relationship quality is good where as organizational ability in conflict handling is poor.
ribution License, which permits unrestricted use,
of physical goods and service (Ganesan, 1994). He also
explained that Relationship marketing is more applicable,
organization like Ethio telecom.
In the case of service marketing, it is process consumption than
outcome consumption. Relationship marketing is designed to
develop strong connections with customers by providing them
with information directly suited to their needs and interests and
by promoting open communication. This approach often results
mouth activity, repeat business and a
willingness on the customer’s part to provide information to the
organization. Naudé and Buttle (2000) made an overview of the
major constructs of relationship quality identified in the
literature. Based on their constructs relationship quality is a
combination of trust, commitment, communication, conflict
However, according to different scholars finding, each
determinant‘s magnitude on the relationship quality of the
organizations is different. Different researchers identified
different determinants of relationship marketing on their
countries context and similarly it may be different in the case
of our country’s experience. Moreover, as to the studies in
Ethiopian set up, the work of Negi (2010) is important to
mention. Negi has tried to see the antecedents of relational
marketing and customer loyalty in the case of Ethiopian
Corporation.
INTERNATIONAL JOURNAL
OF CURRENT RESEARCH
Assessments on determinants of relationship marketing: the case of Ethio telecom, Bahir Dar branch”, International

The works of Negi focus on customer loyalty in Ethiopian
mobile telecommunications sector. But the present study covers
all activities undertaken by Ethio Telecom with equal emphasis
to all determinants. Therefore, the current study assesses the
determinants of relationship marketing in Ethio Telecom
Bahirdar branch, and fills this gap by providing full
information about relationship marketing with its determinants.
Objective of the Study
The main objective of the study is to assess determinants of
relationship marketing on Ethio Telecom Bahir Dar branch.
However, there are also additional objectives that should be
addressed by this study work. Hence the following are specific
objectives of the study:
 To assess the role trust on relationship quality of Ethio
telecom
 To know the importance of commitment on relationship
quality of Ethio telecom,
 To assess the role of communication on relationship quality
of Ethio telecom,
 To assess the importance of conflict handling on
relationship quality of Ethio telecom
Literature review
Meaning and Definition of Relationship Marketing
The current conceptualization of relationship marketing
migrated from organizational behavior and industrial marketing
where interdependence between firms has been the foundation
of successful business-to-business alliances. Morgan and Hunt
(1994) define relationship marketing as all marketing activities
directed towards establishing, developing, and maintaining
successful relational exchanges. Relationship Marketing refers
to a long-term arrangement where both the buyer and seller
have an interest in providing a more satisfying exchange.
Mohammad et al. (2011) explain that Relationship marketing is
not about having a "buddy-buddy" relationship with your
customers. Customers do not want that kind of relationship.
Relationship Marketing uses the event-driven tactics of
customer retention marketing, but treats marketing as a process
over time rather than single unconnected events. By molding
the marketing message and tactics to the Lifecycle of the
customer, the Relationship Marketing approach achieves very
high customer satisfaction and is highly profitable.
Designing customer centric strategies and processes to realize
lifetime value of customers become a necessity for the
organizations shifting their focus from transactional to
relational exchange. This resulted in seeing firm-customer
relationship from strategic perspective by bringing a shift in
customer handling and retention. While, Hoffman and Bateson
(2002) define customer retention as focusing a firm’s
marketing efforts towards the existing customer base. Kotler
(2000) emphasizes upon the practice to devote marketing
efforts to retain existing customers by the firm rather than
attracting new customers, as there exist overwhelming
arguments supporting that it is more expensive to win new
customers than to keep existing ones (Negi, 2010).
Furthermore, customer replacement costs, like advertising,
promotion and sales expenses are high, and it takes time for
new customers to become profitable. In this regard Negi further
stated that relationship marketing aims to create develop and
enhance relationship with carefully targeted customers to
maximize customer value and corporate profitability.
Determinants of Relationship Marketing
The marketing literature has theorized key virtues that underpin
relationship marketing, such as trust (Morgan and Hunt, 1994),
commitment (Chan and Ndubisi, 2004), conflict handling
(Ndubisi and Chan, 2005; Dwyer et al., 1987), communication
(Ndubisi and Chan, 2005; Morgan and Hunt, 1994) and
satisfaction (Jones and Suh, 2000; Bojeia and Alwie, 2010);
relationship quality is a bundle of intangible value that
augments products or services and results in an expected
interchange between buyers and sellers. Additionally, Johnson
(1999) describes relationship quality as the overall depth and
climate of a business relationship. According to Negi (2010)
Trust’ and ‘commitment’ have been reported as the key
elements in managing relationship between the customers and
the firm. However, maintaining life-long relationships has its
roots in mutual exchange, fulfillment of promises, ethical
business practices, effective communication and emotional
bonding. Furthermore, Gronroos (1990) asserted that the
resources of the seller-personnel, technology and systems have
to be used in such a manner that the customer’s trust in the
resources evolved and thus, maintained and strengthened in
future course of action by supporting customer loyalty.
Trust
As competition deepens, products and services become more
indistinguishable, and markets become established, it is
becoming increasingly tougher for companies to distinguish
themselves from other industries. Simply offering customers
with technical solutions to problems does not be sufficient
anymore to be competitive and obtain and retain market share.
Various value-added services, which commence before the
actual operation begins, had gone far beyond it, so as to stay
competitive and develop customer loyalty. Trust can be defined
as “when one party has confidence in an exchange partner’s
reliability and integrity” (Morgan and Hunt, 1994). Trust is a
willingness to rely on an exchange partner in whom one has
confidence up on. Both definitions also highlight the
importance of strengthening mutual confidence. Johns and
Perrott further suggest that, trust leads to relationship
commitment, which is what marketers are striving to achieve.
Trust is also a key element for relationship success and tends to
be related to a number of elements such as competitive
advantage and satisfaction. In contrast with a discrete
transaction or sale, which has a beginning and end (Dwyer,
Shurr and Oh, 1987), relationship marketing is a longer-term
relationship where building trust and commitment is seen as
important. In order to compete effectively in the marketplace, it
is acknowledged that organizations need to be trusted
cooperators. In this regard Morgan and Hunt (1994) suggest
that Trust is generally important in any relationship because it
can be considered as a foundation of any relationship. It is the
main component of long-term business as well as personal
29945 Belay Mengstie. Assessments on determinants of relationship marketing: the case of Ethio telecom, Bahir Dar branch

relationships, and widely studied in the social exchange and
also in marketing literature.
Commitment
Relationship commitment is defined as “an exchange partner
believing that an ongoing relationship with another is so
important as to warrant maximum efforts at maintaining it”
(Morgan and Hunt, 1994). Commitment is seen as central
because it not only leads to such important outcomes as
decreased turnover, higher motivation, and increased
organizational citizenship behaviors, but it also results from
such things that can be influenced by the firm as recruiting and
training practices, job equity, and organizational support (Chan
et al., 2004). Commitment, as one of the important variables to
understand the strength of a marketing relationship, implies to a
higher level of obligation to make a relationship succeed and
mutually satisfying (Morgan and Hunt, 1994). Commitment,
therefore, is defined as an enduring desire to maintain a valued
relationship between business person and customers. Since
relationship quality from the customer’s perspective is
achieved through the service provider’s ability to reduce
uncertainty, firms that are highly committed to service and
relationship maintenance with customers, would be more
successful in reducing customer doubts and uncertainties and in
turn enhanced customer loyalty (Negi, 2010).
Conflict Handling
Conflict handling, as defined by Dwyer et al. (1987), is the
supplier’s ability to minimize the negative consequences of
manifest and potential conflicts. Therefore, it reflects the
supplier’s ability to avoid potential conflicts, solve manifest
conflicts before they create problems, and to discuss solutions
openly when problems arise. They concluded that the
likelihood that an individual will engage in these behaviors
depends on the degree of prior satisfaction with the
relationship, the magnitude of the person’s investment in the
relationship and an evaluation of the alternatives one has. Thus,
how conflicts are handled will ensure loyalty, as reported by
Ndubisi (2007). Morgan and Hunt (1994) clearly identify on
their research about conflict handling as a result effective
conflict handling can have a dramatic impact on customer
retention rates, redirect the spread of damaging word of mouth,
and improve end result performance. Effective resolution of
customer problems and relationship marketing are linked
closely in terms of their mutual interest in customer
satisfaction, trust, and commitment. Challenges in managing
quality, combined with the important role played by customers
in the service production process and evidence that customer
loyalty drives profitability, make conflict handling a critical
moment of truth in maintaining and developing these
relationships.
Communication
Communication can be defined as “the formal as well as
informal sharing of meaningful and timely information
between firms” (Anderson and Narus, 1990). Communication
in relationship marketing means providing information that is
trustworthy, deals with quality and fulfils promises. It is the
marketer’s task to build awareness and customer preference by
promoting quality, value, performance and other features, and
to encourage interested buyers to make purchase decisions
(Ndubisi and Chan 2005). Communication means keeping in
touch with valued customers, providing them timely and
trustworthy information on service and service changes, and
communicating proactively if a delivery problem occurs
(Ndubisi and Chan, 2005). It is also about mutual disclosure or
sharing of secrets. However, both content and style in
communication are important in building quality relationship
with customers. Anderson and Narus (1990) argued about the
view of communication as an interactive dialogue between the
company and its customers that takes place during the pre-
selling, selling, consuming and post-consuming stages.
Therefore, by assuming that when there is effective
communication between an organization and its customers,
customers will be better informed on the organization’s
initiatives and activities, thus leading to improve customer
loyalty through quality firm-customer relationship (Negi,
2010).
Summary and Identifying Knowledge Gap
Gronroos (1994) states the aim of relationship marketing as
establishing, maintaining, and enhancing relationships with
customers and other partners, at a profit, so that the objectives
of the parties involved are met. Additionally, the literature of
relationship marketing has identified a need to expand the
focus of firm-customer interaction to include relational
properties (Ndubisi, 2007; Dwyer et al., 1987), as customers
make long-term commitments in order to reduce transaction
costs. Therefore, the key objective of relationship marketing is
to foster customer loyalty, which Oliver (1999) defined as a
deeply held commitment to re-buy or re-patronize a preferred
product or service in the future, despite there are situational
influences and marketing efforts having the potential to cause
switching behavior. The review of the literature reveals the
existence of gap, and it shows that relationship marketing is not
yet fully discovered issue. Particularly in Ethiopia the concept
of relationship marketing is at its infancy level that needs
further investigation. Besides, so far to the best of the
researcher’s knowledge, there is only one study conducted on
this specific area in the context of Ethiopia, particularly in
telecom industry. Therefore, the current study will be an eye
opener for further studies in the local and regional context.
Research Methodology
This research is a descriptive research that covers the
assessment of determinants of relationship marketing. Hence
the researcher is intending to use the following methods to
collect relevant data and to handle cases related to Ethio
Telecom in general and Bahir Dar branch in particular. Both
primary and secondary data were used in the study. Primary
data was collected through questionnaire, formal and informal
interviews with, employees and customers of Ethio Telecom.
Secondary data like official documents, annual reports’ journal
articles, books and other web related materials were used in the
study. The kinds of data used as secondary sources were data
related to marketing activities and human resource aspects. The
study population was both employees and customers of Ethio
29946 International Journal of Current Research, Vol. 08, Issue, 04, pp. 29944-29951, April, 2016