The Impact of Customer Relationship Marketing on Market Performance: a study among Iranian telecommunication service providers

 The Impact of Customer Relationship
Marketing on Market Performance: a study
among Iranian telecommunication service
providers
Name
Supervisors:
Institution:
Abstract
While a vast number of studies have pointed out the keys of relationship
marketing practices in consumer markets, little attention has been paid to the value
the organization can get from such strategies in the B2B market. The literature
provides relatively little support for the effectiveness of relationship marketing
programs. The purpose of this research is to produce some evidence of the
association between customer relationship marketing strategies which are attraction
activities and Loyalty programs (Bonus, Contact, Customer satisfaction, Contact)
and the market performance. The proposed hypotheses are tested in the case of
telecommunication service firms, where long-term relationship is needed. This
research involved collecting data from Iranian Telecommunication managers of 105
telecommunication companies to understand the relationship exists between
attraction and loyalty programs (Bonus-Contact-Satisfaction and complaint) with
market performance of the companies and the market performance is measured by
market position, customer perception about the firm and customer’s loyalty. The
hypotheses were evaluated using a SEM analysis, which associates relationship
between attraction activities and Loyalty and interaction programs with market
performance (customers’ perceptions, market position and loyalty) by using Partial
Least Square (PLS) Techniques. The findings suggest that the effect of attraction
and loyalty programs are greater than service quality on market performance,
Furthermore, This means that, loyalty and interaction programs are more influential
on companies’ awareness and penetration in the market (market position). Attraction
activities (service quality) has greater impact on customer’s perception, however
bonus and customer satisfaction are more associated with customers’ loyalty also
customer satisfaction has grater impact on customers’ loyalty than service quality.
Keywords: Relationship Marketing, Service Marketing, Market Performance,
B2B, Telecommunication, Iran
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Acknowledgements
I have learned a lot and really enjoyed while working on this thesis .I would
like to sincerely thank all those who helped me with their valuable support during
the entire process of this thesis. I would like to thank my supervisor, Professor ……
for his helpful guidance, support and contribution. I would also like to express my
gratitude to my supervisor… who guided and helped me all along the way.
I also thank the faculty members of ……University they all gave me the honor of
attaining the Master degree. Besides also I should thank …… for his helpful ideas
and encouragement during all phases of this thesis and ……. who helped me in
editing and finalizing the thesis formatting.
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Table of Contents
Table of Contents ………………………………………………………………..…. 5
List of Tables …………………………………………………………………..…… 8
List of Figures …………………………………………………………………..….. 9
Abbreviations …………………………………………………………………..…... 10
Chapter I
1. Introduction ………………………………………………………………..…… 11
1.1. Background ………………………………………………………………..…... 11
1.1.1. Telecommunications ………………………………………………..…… 12
1.1.2. Why Relationship Marketing ………………………………………..…... 12
1.2. Problem Discussion ………………………………………………………..…... 13
1.3. Purpose and Research Questions …………………………………………..…... 13
1.4. Disposition of Thesis ………………………………………………………..…. 16
Chapter II
2. Literature Review …………………………………………………………..…... 17
2.1. Relationship Marketing Theory …………………………………………..…… 17
2.1.1. Relationship Marketing Formation ………………………………..…… 17
2.1.2. Relationship Marketing Definition ……………………………….……. 20
2.1.2.1. Business Marketing Relationship …………………………….. 20
2.1.2.2. Value Creation in Service …………………………………….. 23
2.2. Attraction, Loyalty Programs and Interaction ……………………………..…... 24
2.2.1. Customer Attraction ………………………………………………..…... 25
2.2.1.1. Service Quality ……………………………………………….. 25
2.2.1.2. Service Quality in B2B Setting …………………………….…. 28
2.2.1.3. A new model for measuring quality in B2B setting ………….. 29
2.2.1.4. Relationship Value ………………………………………….… 30
2.2.2. Customer Loyalty Programs ………………………………………….... 31
2.2.2.1. Bonus …………………………………………………………. 34
2.2.2.2. Personal Contact ……………………………………………… 34
2.2.2.3. Satisfaction …………………………………………………… 35
2.2.3. Interaction ………………………………………………………….…... 38
2.3. Relationship Marketing Outcomes ………………………………………..…… 40
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2.4. Performance ………………………………………………………………..…... 41
2.4.1. Performance Measurements ………………………………………..…... 42
2.4.2. Market Performance ………………………………………………….... 45
2.4.2.1. Market Position ………………………………………….……. 46
2.4.2.2. Customer’s Perception …………………………………….….. 46
2.4.2.2.1. Image ……………………………………………... 46
2.4.2.2.2. Personalized Relationship ………………………... 48
2.4.2.3. Customer’s Loyalty ……………………………………