ROLE OF PUBLIC RELATIONS IN ENHANCING EXTERNAL CUSTOMER SATISFACTION: A STUDY OF PEAK MILK NIGERIA

Description

CHAPTER ONE

 INTRODUCTION

1.0 Background Of Study

This research is on Role of public relations in enhancing external customer satisfaction: a study of peak milk Nigeria. While there may be many varying answers to why human beings exist, there may be only one answer to why business organizations 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 organizations exist because of the customer as the entire activities of every organization is targeted towards satisfying a group and or groups of people termed consumers or customers.

Quite often, the difference between organizations 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 organization 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: 183) a consumer’s buying behavior 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 organization 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 organization to the public first is its image. There is a tendency to lose its customers drastically if the right imagery for your organization 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 organization 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 (2011:1) note that “Service quality and customer satisfaction are very important concepts that companies must understand if they want to remain competitive and grow”

Smith, (1998) notes that consumption is the sole aim of production. This brings a question to our mind; who consumes the product? Hence, the importance of the consumer or customer in the production chain cannot be over emphasized and, therefore, there is not just a necessary but compulsory need for their maximum satisfaction as it will be key to the success of any organization and without which the day-to-day running of the organization may be a total failure.

According to Hansemark and Albinson (2004) “satisfaction is an overall customer attitude towards a service provider, or an emotional reaction to the difference between what customers anticipate and what they receive, regarding the fulfilment of some needs, goals or desire” Angelova and Zeriki (2011:1) “customer satisfaction has a positive effect on an organization’s profitability; satisfied customers form the foundation of any successful business as customer satisfaction leads to repeat purchase, brand loyalty, and positive word of mouth”. Satisfied customers provide recommendations; maintain loyalty towards the company and customers in turn are more likely to pay price premiums (Reichheld, 1996). The significance of customer loyalty in this is that it is closely related to the company’s continued survival and to strong future growth (Fornell, 1992). Satisfied customers are more likely to repeat buying products or services. They will also tend to say good things and to recommend the product or service to others.

On the other hand dissatisfied customers respond differently. Dissatisfied customers may try to reduce the dissonance by abandoning or returning the product, or they may try to reduce the dissonance by seeking information that might confirm its high value (Kotler, 2000).

In recent years, relationships between an organization and its publics have been the focal interest in public relations research and practice (Bruning and Ledingham, 2000). Public Relations helps in cementing the relationship between customers and the organisation and it is a two-way flow of value. This means that customer derives real value from the relationship which translates into value for the organisation in the form of enhanced profitability and sustainability over a long period of time. The customer can be satisfied by an organisation when:

• A good answer on problems is available;
• the customer feels that he is treated well and honestly; and
• A close communication has been created between the professional and the client.

The world has come full circle from selling to marketing and from seller’s market to buyer’s market. The customer today has the option to buy what he thinks he should and from whom, being in his best interest. Product development, technological improvement, cost optimization and excellent service facility are very important for any organisation but their importance is only if the customer appreciates it. Hence, every business begins and ends with the customer (Sugandhi, 2002). Thus, service organizations are shifting their focus from “transactional exchange” to “relational exchange” for developing mutually satisfying relationship with customers. Customer-centred organisations have a superior understanding of customers’ needs and wants, and then translate them into the capability to give customers what they really need and want which relatively transforms into customer satisfaction as it is essential for corporate survival or existence.

Conventionally, researchers of consumer behaviour have noticed that customers have advanced choice making process from a rational standpoint (Levitt,1986; Gronroos, 1994; Morgan,1994; Gummesson,1994; Bejou et al, 1998).  This leading school of thought views consumers as being cognitive and, to some extent, emotional.

There is a rising need for organisations to ensure they promote good relationship between it and its customers as satisfied customers form the foundation of any successful business because customer satisfaction leads to repeat purchase and brand loyalty. Zairi, (2000) note that, “the more customers are satisfied with products or services offered, the more are chances for any successful business as customer satisfaction leads to repeat purchase, brand loyalty, and positive word of mouth marketing. Customer satisfaction leads to repeat purchases, loyalty and customer retention”. However, we must take into account that dissatisfied customers may quickly become lost customers as well as disseminators of negative impressions of the organisation.

1.1     Problem statement

Good image for Peak Milk is informed by the level of satisfaction its publics receive from the services it offers. The PR department at Peak has been dormant and the public has not been able to know the activities of Peak.

1.2 Objectives of the study

This study aims at showing;

• The relationship between public relations and customer satisfaction.
• The relevance of public relations to customer satisfaction.
• The benefits of customer satisfaction to organisations.
• If all customers require customer-organisation relationship.
• The activities of public relations in an organisation.
• The place of public relations in an organisation.

1.3 Research Questions

• What is the relationship between public relations and customer satisfaction?
• What is the relevance of public relations to customer satisfaction?
• What are the benefits of customer satisfaction to organisations?
• Do all customers want a relationship with service provider?
• What are the activities of public relations in an organisation?
• What is the place of public relations in an organisation?

1.4. Hypothesis

H  – There is a significant relationship between public relations and customer satisfaction

H  – There is no significant relationship between public relations and customer satisfaction.

H – There is a significant relationship between customer satisfaction and customer loyalty

H – There is no significant relationship between customer satisfaction and customer loyalty.

1.5. Rationale of the Study

One of the major obligations of every organisation is to ensure the customer is satisfied. However, in the manufacturing sector is faced with many factors such as Language barrier due to the population of Lagos State using the product. This mars the performance of service delivery in the industry and relatively leads to mass dissatisfaction among the consumers of the product. This study is poised to provide how to deal with dissatisfied customers through creating a mutual relationship that promotes satisfaction.

1.6. Significance of the Study

As earlier stated, the sole reason for the existence of an organization is the customer; Sugandhi (2002) further stressed that the customer is the beginning and the end of every business buttressing the point of prominent economist Adam Smith that the customer is the sole of production. All these point to the fact that achieving customer satisfaction is often the end target of all organizations.

This study will create an understanding of how the manufacturing sectors industry can improve its business performance through service quality, customer satisfaction which leads to customer loyalty. This is aside becoming a reference point for further and future researches.

Furthermore, this study will enable organizations to better appreciate the significance and importance of various determinants of customer satisfaction in the industry.

This research presents a very useful source of solutions and information for managers and researchers in the field of public relations and customer satisfaction. The research provides new evidence on the practicality and usefulness of public relations to creating customer-organization relationship which stimulates and or fuels customer satisfaction.

1.7. Scope of the Study

This study revolves around PEAK Telsim office in Ortakoy, Lefkosia as well as students of Cyprus International University, Nicosia who patronise the manufacturing sector company.

1.8. operationalization of Terms

Public Relations: Roger Haywood (1984:3 as cited in Adegoke, 2001:1) defines public relations as “the projection of personality of the organisation. It is the two-way communications between the organisation and the audiences critical to its success”.

Customer Satisfaction: customer satisfaction is the conclusion created as a result of the comparison of customer pre–purchase expectations with post-purchase evaluation of a product or service experience (Oliver, 1997).

Enhance: this refers to improving something through an action.

Roles: this refers to the functions a thing can play in an event.