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TO IDENTIFY SIGNIFICANCE OF CRM IN RETAIL

SECTOR

MUHAMMAD ASAD SALEEM STUDENT ID: 60885

MUHAMMAD ZAIN STUDENT ID: 60885

PAKISTAN AIR FORCE - KARACHI INSTITUTE OF ECONOMICS

& TECHNOLOGY (2019)


To identify significance of CRM in Retail Sector

NO OBJECTION CERTIFICATE

This is to certify that Muhammad Asad Saleem Reg # 60885 & Muhammad Zain Uddin
Reg # 60760 are the students of this Institute for the past four years.

We have no objection for them to carry out a project work titled “To identify significance
of CRM in Retail Sector” in our institute and for submitting the same to the Faculty
“Ubedullah Amjad Ali Shaikh” PAF-KIET, as a part of fulfillment of the “Retailing”
Course/subject.

We wish them all the success.

Seal of the company Signature of the competent authority of the Institute/Organization

PAF-KIET North Campus, Karachi

Date: 13-11-2019

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To identify significance of CRM in Retail Sector

DECLARATION BY THE STUDENTS

This is to declare that we have carried out this project work our self in part fulfillment of the

“Retailing” Program of MBA PAF-KIET.

The work is original, has not been copied from anywhere else and has not been submitted to
any other University/Institute for an award of any degree/diploma.

Date: 13-11-2019

PAF-KIET North Campus Muhammad Asad Saleem

Date: 13-11-2019

PAF-KIET North Campus Muhammad Zain Uddin

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To identify significance of CRM in Retail Sector

CERTIFICATE OF SUPERVISOR

Certified that the work incorporated in this Project Report “To identify significance of

CRM in Retail Sector” submitted by Muhammad Asad Saleem Reg No. 60885 &

Muhammad Zain Uddin Reg. No. 60760 is their original work and completed under my

supervision.

Material obtained from other sources has been duly acknowledged in the Project Report.

Date: 13-11-2019 Sir Ubedullah Amjad Ali Shaikh

PAF-KIET North Campus, Karachi (Supervisor)

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Acknowledgement

With the grace of ALLAH Almighty who is the lord of the universe for whom good things
are accomplished. I am thankful to ALLAH for giving me the strength in all I do and
specifically accomplishing this project as a part of my carrier goals. May ALLAH guide me
to follow this right path.

We would like to extend our sincere thanks to our respected Sir Ubedullah Amjad
Ali Shaikh, who is well known for his vast expertise, for guiding us in the project report on
“To identify the significance of CRM in Retail Sector” further providing us e a great
opportunity to learn the implementation of the courses we had taken in a life case scenario.
We believe that this experience have not only added value to our knowledge but have also
strengthen the core knowledge of the previous courses at PAF-KIET. It was his dedication
in supervising the project that made us study and learn practical life matters in a well-defined
manner. He, with his vast experience and knowledge, lead us in every step during the course
and also in the preparation of this project report.

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Table of Contents

1. Introduction…………………...………………………...............................1

2. Objectives and Scope………………………................................................4

3. Limitations ………...……………………………........................................6

4. Theoretical Perspective …………………..…………….……....................7

5. Methodology and Procedure of Work ……………….………………….17

6. Analysis of Data ………………………………………..............................20

7. Findings, Inferences and Recommendations…………………………....36

8. Conclusion…………..…………………….................................................37

9. Summary of the Project Report………………………………………….38

10 Annexure...................................................................................................43

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ABSTRACT

Customer Relationship Management (CRM) has never been as relevant to Organizations as


they are today. The relationship between the retailer and the customer is favorable so that
organizations can flourish under all economic conditions and for customers get quality
products and services. As a result, the right customer relationship management strategies can
be applied create a strong relationship with customers and ultimately create loyal customers.
This research discusses the significance of Customer Relationship Management (CRM) in
Retail Sector. The study objectives is to recognize importance of Customer Relationship
Management (CRM) dimensions like customer satisfaction, customer loyalty and customer
data mining in Retail Sector. To recognize importance of these variables and relationship
with the retail sector. As these variables are very important to make long term relationship
in retail sector. Theoretical Conceptual framework and hypothesis are made on the basis of
literature review. This is quantitative research. The questionnaire comprises 15 questions for
gathering the data. And 5-point Likert scale is used in questions.

Key words: CRM, Retail Sector, customer satisfaction, customer loyalty, customer data
mining.

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CHAPTER 1: INTRODUCTION

1.1 BACKGROUND:

The importance of designing effective customer relations program should be the first thing
in mind of the retailing industry managers., The retailer need to know the exact stage of any
given sales process, they need to know their best prospects and leads, they need to know the
strengths and weaknesses of each member of their mobile sales team, and they need to know
all this, or any part of it, instantly Syed Ali (2007).

That's where the importance of CRM comes into its own whether it's offering discounts or
freebies; these are geared towards maintaining continued customer patronage and giving the
customers 100% satisfaction from the purchase of company product or services (Wingard,
2008). In Masterson (2007) study, managing your customer relationship is important, but is
critical for Service Businesses who rely on repeat customers, ongoing contracts and referrals.
While in Anisimova (2007) study, it mentioned that retail companies need to know the type
of customer they have.

Customer relationship has become the main medium in gaining profits by all kind of
business. Roberts (2005) stated that, the 1980’s saw the emergence of database marketing,
which was simply a catch phrase to define the practice of setting up customer service groups
to speak individually to all of a company’s customers. Businesses started to see that the
importance of having a good relationship their customers in gaining more profits. Effectively
designed customer relationship program gives a lot of benefits to the consumers as well as
profits to the retailing businesses.

Customer Relationship Management (CRM) is one of those magnificent concepts that swept
the business world in the 1990’s with the promise of forever changing the way businesses
small and large interacted with their customer bases. Roberts (2005)

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1.2 INTRODUCTION:

Customer relationship management (CRM) is an approach to manage a company's


interaction with current and potential customers. It uses data analysis about customers'
history with a company to improve business relationships with customers, specifically
focusing on customer retention and ultimately driving sales growth.

Customer Relationship management is the strongest and the most efficient approach in
maintaining and creating relationships with customers. Customer relationship management
is not only pure business but also ideate strong personal bonding within people.
Development of this type of bonding drives the business to new levels of success. Once this
personal and emotional linkage is built, it is very easy for any organization to identify the
actual needs of customer and help them to serve them in a better way. It is a belief that more
the sophisticated strategies involved in implementing the customer relationship
management, the more strong and fruitful is the business. Most of the organizations have
dedicated world class tools for maintaining CRM systems into their workplace.

The word ‘retail’ originates from a French-Italian word ‘retailer’, meaning ‘to cut a piece
off’ or ‘to break bulk’. In simple terms, it implies a first-hand transaction with the customer.

Retailing is an activity that involves buying goods or services and subsequently selling them
to the final consumer, usually in small quantities and without transformation. A retailer is a
reseller, i.e., obtains a product or service from someone in order to sell to others. Retail
services encompass a wide variety of forms (shops, electronic commerce, open markets,
etc.), formats (small shops, supermarkets, hypermarkets, etc.), products (food, nonfood,
prescription, over-the-counter drugs, etc.), legal structures (independent stores, franchises,
integrated groups, etc.), and locations (urban/rural, city center/suburbs, etc.).

Retail companies need to know what's important to their customer. Retail companies also
need to know whether your customer is transactional or long term. It is important to
distinguish the differences between long term and transactional customers because if
managers ask a transactional for too much information they will see it as an invasion of the

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retail companies’ privacy, whereas long term customers will see it as creating a more
personal relationship. Businesses need to create a balance between these two customers.

Retailing encompasses the business activities involved in selling goods and services to
consumers for their personal, family, or household use. It includes every sale to the final
consumer. Retailing is also the last stage in the distribution process (Barry Berman, Joel R.
Evans, and Retail Management: a strategic approach 2004, 3).

Retailing also involves the sale of merchandise from a fixed location, such as a store, for
direct consumption by the customer. It can be defined as an activity that ensures that
customers derive maximum value from the buying process. This involves 35 activities and
steps need to place the merchandise made elsewhere into the hands of customers or to
provide services to the customers.

Retailers organize the availability of merchandise on a large scale and supply them to
consumers on a relatively small scale. In the process, they provide the accessibility of
location and convenience of timing, size information and lifestyle support. When retailers
perform these activities, they create value for their customers, who pay for these services.
These values are created continuously through a combination of services, price, accessibility
and experience.

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CHAPTER 2: OBJECTIVE & SCOPE

PROBLEM STATEMENT:

A close relationship between customers and retailers is the key factor in the profitable
relationship between them. Long-term relationships between retailers and customers will
benefit both parties. In fact, customers are the main source of revenue for retailers and
retailers are the main places where customers can buy groceries. (McKee, 2007).

The main research problem is that many retailers do not know how to make good relationship
with customers. They should know the importance of customer relationship and it can only
be done by good customer service which make them satisfy and then they become loyal
customers.

This study aims to identify the importance of customer relationship management through
Customer Satisfaction, Customer Loyalty and Customer Data Mining in Retail Sector. A
number of past studies discussed the significance of CRM in retail sector but fewer studies
were conducted to examine the CRM significance in Pakistan.

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1.4 RESEARCH QUESTIONS:

Research Questions:

 Does Customer Satisfaction impact on Retail Sector?

 Does Customer Loyalty is important in Retail Sector?

 Does Customer Data Mining is important for Retail Sector?

1.5 RESEARCH OBJECTIVES:

Research Objectives:

 To recognize the importance Customer Satisfaction in Retail Sector.

 To recognize the importance of Customer Loyalty in Retail Sector.

 To recognize the importance of Customer Data mining in Retail Sector.

SCOPE OF THE STUDY:

To identify importance of Customer Relationship Management which are Customer


Satisfaction, Customer Loyalty and Customer Data mining in Retail Sector. Due to time and
resources constraints only four variables have been considered. These variables were
appeared repeatedly during the literature review.

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CHAPTER 3: LIMITATIONS

3.1 LIMITATION OF THE STUDY:

Importance of Customer Relationship Management in Retail Sector is a broad topic that


include large number of critical factors. Due to time and resources constraints only three
independent variable which are customer satisfaction, customer loyalty and customer data
mining and one dependent variable which is retail sector have been considered. These
variables were appeared repeatedly during the literature review.

3.2 SUGGESTIONS FOR FUTURE RECOMMENDATION:

To identify the importance of Customer Relationship Management in Retail Sector is a broad


topic which can be evaluated by the using of different independent variables. Researchers
would also be evaluate the importance of CRM in Retail sector by using different Customer
Relationship Management dimensions like Customer Feedback, Customer Promotions,
Customer Service etc.

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CHAPTER 4: LITERATURE REVIEW


4.1 DISCUSSION OF VARIABLES:

4.1.1 Customer Satisfaction:

Customer satisfaction is a measure of how a company's overall performance changes relative


to customer expectations. (Hill, Nigel, Alexander, Jim, The handbook of customer
satisfaction and loyalty measurement, 18)

Customer satisfaction depends on the perceived performance of the product compared to the
expectations of the buyer. If the product performance does not meet expectations, the
customer is dissatisfied. If the performance meets expectations, the customer is satisfied. If
the performance exceeds expectations, the customer is very satisfied and satisfied.
(Armstrong/Kotler, Marketing: an introduction, 2005, 17)

Customer service is an important part of retailing. This is an important strategic element that
allows retailers to differentiate themselves. Customer service affects the entire buying
experience. The main objective of the customer service is to provide the customer with the
satisfaction he expects from the clienteles of the company. (Kent, Tony, Ogenyj, Omar,
Retailing 2003, 433)

Figure: 4.1.1.1

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Exceeding the value offered by competitors is the key to marketing success. Consumers
decide when buying the evaluation of the values proposed by the suppliers. Once the product
has been purchased, customer satisfaction depends on the performance perceived in relation
to the expectations of the buyer. Customer satisfaction occurs when perceived performance
meets or exceeds expectations. Expectations arise from subsequent purchases, experiences
and discussions with others, as well as marketing activities for suppliers. Companies must
avoid the mistake of overestimating customer expectations with excessive advertising
claims, as this can lead to dissatisfaction if performance does not meet expectations. (David
Jobber, Principles and Practice of Marketing, 2012)

Customer satisfaction is when the value and customer service provided by a sales experience
meets or exceeds customer expectations. If expectations of value and customer service are
not met, the consumer will not be satisfied. Only very satisfied customers must be faithful
in the long run. (Levy, Michael, Wiz, Barton A, Retailing management 2004, 2)

In general, satisfaction is a person’s feelings of pleasure or disappointment that result from


comparing a product’s perceived performance (or outcome) to expectations. If the
performance falls short of expectations, the customer is dissatisfied. If it matches
expectations, the customer is satisfied. If it exceeds expectations, the customer is highly
satisfied or delighted. Customer assessments of product performance depend on many
factors, especially the type of loyalty relationship the customer has with the brand.
Consumers often form more favorable perceptions of a product with a brand they already
feel positive about.

Retail customer satisfaction should be a long-term goal and focus on an existing customer
instead of replacing unsatisfied customers with new ones. It is extremely important to satisfy
customers, because the sale of a retailer consists of two groups of customers: new customers
and frequent customers. In the retail business, acquiring new customers will likely cost five
times the satisfaction of an existing customer. Customer retention is more important than
customer attraction, and one of the key elements of customer loyalty is customer satisfaction.

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A highly satisfied customer:


- Stays longer

- Buys more as the retailer introduces new products and upgrades existing brands

- Talks favorably about the retailer and its merchandise

- Pays less attention to competing brands and advertising and is less sensitive to price

- Offers products/service ideas to the retailer

- Costs less to serve than new customers

(Kotler, Philip, Marketing insights from A to Z, 2003, 42)

Most of the companies make a huge mistake, when they are not paying enough attention to
their customer satisfaction. Keeping customers satisfied is the best competitive advantage
against competitors. Customers are loyal, prepared to pay more and are excellent external
marketers.

Here is a list of the reasons for developing long-term relationships with customers:

 Acquiring new customers can cost 5 to 10 times more than the costs involved in
satisfying and retaining current customers.

 Loyal customers tend to spend more and cost less to serve.

 Satisfied customers are likely to recommend your products and services.

 Advocates of a company are more likely to pay premium prices to a supplier they
know and trust.

 Retaining exiting customers prevents competitors from gaining market share.

 A 5 percent reduction in the customer defection rate can increase profits by 25 to 85


percent, depending on the industry.
(Sarah Cook, Customer Care 2000, 7)

Customer satisfaction surveys focus on the company's existing customers to improve


functionality against their expectations. The number or frequency of repetition of the

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purchase does not always provide information on customer satisfaction. The customer can
buy a product because there is no better or he knows no other alternative. In this case, the
customer is not tied to a company or product, but switches to another alternative as soon as
it is available.

Many retailers are systematically measuring how well they treat customers, identifying the
factors shaping satisfaction, and changing operations and marketing as a result. Wise firms
measure customer satisfaction regularly, because it is one key to customer retention. A
highly satisfied customer generally stays loyal longer, buys more as the store introduces new
and upgraded products, talks favorably to others about the store and its products, pays less
attention to competing brands and is less sensitive to price, offers product or service ideas to
the store, and costs less to serve than new customers because transactions can become
routine. Lerzan, A., Timothy, L. K., & Terry, G. V. (2005, October 1)

4.1.2 Customer’s loyalty:

Customer loyalty is the most important trading variable to explain customer loyalty.
Similarly, loyal customers help strengthen the competitive position of companies, who tend
to pay less attention to their competitors' brands and advertising, provide powerful word of
mouth and provide referrals and public relations. . (Desai and Mahajan, 1998; cited in
Ramaseshan et al., 2013)

As the market is becoming increasingly more competitive, managers and marketers are
becoming more aware of the importance of being customer-oriented in order to survive and
enhance customer loyalty (Homburg et al., 2011).

However, authors like Oliver (2010) and Walsh et al. (2008) defined customer loyalty as “a
strong commitment of the customers to re-purchase or re-patronize a chosen product or
service consistently in the future, which leads to repeat same-brand purchase, despite of the
several marketing efforts by competitors that might cause switching behavior.

Customer’s loyalty will bring more profits to the retail companies where they are willing to
keep coming to their preferred shopping place. In order to measure the customer’s loyalty,
companies should do it by measuring customer’s willingness to come again and give good

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review about the business. The most difficult part is keeping the customers. Consumers have
many motivations for choosing a product or service provider: quality and variety of products
and services, price, location convenience, and quality of customer service all factor into why
a consumer chooses to patronize a particular merchant at a particular moment (Szuts and
Toth, 2008).

Figure 4.1.2.1

The ability to retain the customers and make them loyal has been considered as a critical
issue for continued organizational success (Dekimpe et al., 1997). In general, customer
loyalty has been defined as favorable attitude towards a company’s products to buying it
constantly (Oliver, 2010). Gaining loyal customer has become the main concern of
marketing activities and goals of strategic market planning (Kotler and Armstrong, 2014;
Oliver, 2010).

Loyalty is the feature of the customer, not something that is inherent to the brand. To support
previous studies, the authors stated that there was no universally accepted definition of
customer loyalty. Alternatively, there are three general conceptualizations of loyalty: first,
an attitude that leads to a relationship with the brand; second, the introduced concepts of the
revealed behavior; and as a moderate purchase by individual characteristics, circumstances
and / or purchasing situation (Uncles et al., 2003).

Loyalty focuses on frequently purchased packages (brand loyalty), the concept of loyalty for
industrial goods (seller loyalty), services (loyalty of service) and retail stores (loyalty) is just
as important. Although the literature review shows that many studies are examining prior

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factors affecting customer loyalty, there is still a lack of research in which attempts have
been made to determine the predecessor customer retention factors in the B2B context. .
Since B2C differs from B2B in many aspects. Dick and Basu (1994)

Figure: 4.1.2.2

4.1.3 Customer Data Mining:


To manage the relationship with the customer, a company must gather the correct
information about its customers and organize them for proper analysis and action. This
information must be kept up-to-date, made available to employees and provide staff with the
necessary know-how to turn this data into products better suited to their needs. G.Saravanan
(2013)

The retail business uses data mining to create a competitive advantage. For retailers, data
mining can be used to provide information about customers' product sales, buying habits and
preferences, delivery times and performance, seasonal fluctuations, customer transit times,
and similar forward-looking data for proactive decisions. Here are some examples of how
retailers are using data mining effectively. G.Saravanan (2013)

Data mining (sometimes called data or knowledge discovery) analyzes data from different
angles and consolidates it into useful information. This information can be used to increase
revenue, reduce costs, or both. The mining software is one of the data analysis tools. Users
can analyze data in different dimensions or angles, categorize them and summarize the
relationships identified. Technically, data mining looks for correlations or patterns between
dozens of fields in large relational databases. G.Saravanan (August 12)

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Data mining can also help attract and retain retail customers. The retail sector faces intense
competition and can use data mining to better understand customer needs. Retailers can
research customers' purchase histories and find out which promotions and incentives they
use to attract customers. In a store, when a number of customers leave the competition to
compete, data mining can be used to analyze the history of their purchases and use this
information to prevent other customers from even.

Particularly in the analytical CRM dimension, data mining techniques to analyze customer
data are becoming more and more popular. In fact, the use of data mining to support the
analytical dimension of CRM is considered an emerging trend. (Ngai et al., 2009).

According to the literature search on customer identification, classification and grouping


techniques are the most commonly used. When the goal is to attract customers, classification
techniques are most often used, while when the goal is to link customers, the association and
classification are most often used. Ngai et al. (2009)

In terms of customer development, association techniques are the most common.


Nevertheless, it is well known that a combination of data mining techniques is often required
to support any CRM analytical dimension (Ngai et al., 2009).

Data mining is the process of extracting or detecting hidden patterns or information from
large databases. Data mining is motivated by the need for techniques to support the decision
maker in analyzing, understanding and visualizing the huge amounts of data that have been
gathered from business and are stored in data warehouses or other information repositories.
Data mining is an interdisciplinary domain that gets together artificial intelligence, database
management, machine learning, data visualization, mathematic algorithms, and statistics.
Berry and Linoff (2004)

The use of data mining techniques to extract meaningful information from data is very
promising. In fact, many companies have collected and stored interaction data with
customers, suppliers, and business partners. The inability to find valuable information in the

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data has prevented companies from turning this data into valuable and useful knowledge.
Berson et al. (1999)

Using data mining techniques, competitive marketing strategies can be supported by


analyzing and understanding customer behaviors and characteristics to gain and retain
customers and maximize value. Selecting appropriate data mining techniques that can extract
valuable knowledge from large client databases is essential. With careful selection, data
mining techniques are one of the best decision-making tools in customer relationship
management. Berson et al. (1999)

4.1.4 Retail Sector:


The word ‘retail’ originates from a French-Italian word ‘retailer’, meaning ‘to cut a piece
off’ or ‘to break bulk’. In simple terms, it implies a first-hand transaction with the customer.

Retailers are the final business supply chain that links manufacturers to consumers. A supply
chain is a set of firms that make and deliver a given set of goods and services to the ultimate
consumer. (Levy/Weitz, retailing management 2004, 7)

In order that retail exchange can take place, the retailer must offer to sell products and
services that are valued by customers. Retailers create value for customers by offering the
right merchandise, creating a pleasant atmosphere, decreasing shopping risks, increasing
shopping convenience and reducing price by controlling costs. (Tony Kent, Ogenyj Omar,
retailing 2003, 7)

Figure: 4.1.4.1

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Retailers provide important functions that increase the value of the product and services they
sell to consumers and facilitate the distribution of those products and services for the
manufacturers to produce them. These value-creating functions include:
1. Providing an assortment of products and service
2. Breaking bulk
3. Holding inventory
4. Providing services
(Levy/Waits, retailing management 2004, 7)

Retail companies need to know what's important to their customer. Retail companies also
need to know whether your customer is transactional or long term. It is important to
distinguish the differences between long term and transactional customers because if
managers ask a transactional for too much information they will see it as an invasion of the
retail companies’ privacy, whereas long term customers will see it as creating a more
personal relationship. Businesses need to create a balance between these two customers.

Retailing encompasses the business activities involved in selling goods and services to
consumers for their personal, family, or household use. It includes every sale to the final
consumer. Retailing is also the last stage in the distribution process (Barry Berman, Joel R.
Evans, and Retail Management: a strategic approach 2004, 3).

Retailing also involves the sale of merchandise from a fixed location, such as a store, for
direct consumption by the customer. It can be defined as an activity that ensures that
customers derive maximum value from the buying process.

Figure: 4.1.4.2

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Retailers organize the availability of merchandise on a large scale and supply them to
consumers on a relatively small scale. In the process, they provide the accessibility of
location and convenience of timing, size information and lifestyle support. When retailers
perform these activities, they create value for their customers, who pay for these services.
These values are created continuously through a combination of services, price, accessibility
and experience.

Today the retail trade comprises a wide and varied collection of outlets for goods and
services.

4.2 HYPOTHESIS DEVELOPMENT:

H0: Customer satisfaction does not depend in Retail Sector.

H1: Customer satisfaction depend in Retail Sector.

H0: Customer loyalty does not depend in Retail Sector.

H2: Customer loyalty depend in Retail Sector.

H0: Customer data mining does not depend in Retail Sector.

H3: Customer data mining depend in Retail Sector.

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CHAPTER 5: METHODOLOGY

5.1 INTRODUCTION:
The research is carried out among the Retail Sectors in Karachi. It is a quantitative research.
In any research, methodology is the essential element. It determines how research is done to
obtain accurate data effectively.

Quantitative research is the growth of the research strategy focused on Evaluation and
analysis of data collection. It also describes the use of deductive method to treat theory and
research, more emphasis on the theoretical test. Bryman and Bell (2007)

The choice of the quantitative research strategy is based on the fact that it follows a deductive
approach (from the theory). Quantitative methods were also useful because they examined
the relationship between variables measured numerically and analyzed by a chain of
statistical methods. It usually includes controls to ensure that the information is also valid in
the experimental style. As information is collected in a standardized manner, it must be
confirmed that the questions are articulated in the same way (Saunders, 2016).

5.2 THEORITICAL FRAMEWORK

a) Dependent Variable:
i) Retail Sector

b) Independent Variables:
i) Customer Satisfaction
ii) Customer Loyalty
iii) Customer Data Mining

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CONCEPTUAL FRAMEWORK

Customer Satisfaction

Customer Loyalty

Retail Sector

Customer Data
Mining

Figure: 5.2.1

5.3 DATA AND SAMPLING FRAMEWORK:


The population of this research is all employees who are working in a retail sector in Karachi.
After going through several sources, consulting with representatives of different retail sector
and research on internet the population size related to my research is approximately 10,000.

The sample size was determined by defining the population size in the Rao software.The
sample size is 370.

Research would be carried out in Retail Sector in Karachi. For checking the acceptability of
the questionnaire pilot test would be done. After the successful pilot testing the questionnaire
will circulate among employees. The data collected through this questionnaire are inspected
using SPSS software using regression and correlation interactions as a tactical method.

By using Likert scale, respondents would be given a set of questions for which they would
select Strongly Agree, Agree, Neutral, Disagree, and Strongly Disagree. Likert scale will be
used to check the relationship between variables (Dillman, Smyth, & Christian, 2014).

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5.4 STATISTICAL MODELS AND ANALYSIS:

The data collected through the questionnaire are surveyed by SPSS statistical software 20
using regression-correlation techniques as a statistical method for establishing a relationship
between independent and dependent variables.

5.5 DIAGNOSTIC ANALYSIS:

The questionnaire consists of 12 questions for data collection. In order to test the validity of
the questionnaire, the data of 37 respondents was collected for the pilot testing. The results
were analyzed by SPSS software and Cronbach's alpha comes in at 0.869, which is good and
acceptable for research.

Reliability Statistics:

Cronbach's Alpha No. of Items

0.869 15

Table: 5.5.1

5.6 ROBUSTNESS ANALYSIS:

The value of Cronbach's alpha is 0.869. Hence, we accept it and further precede our research.

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CHAPTER 6: ANALYSIS OF DATA

6.1 DEMOGRAPHICS:

Gender:

Frequency Percent

Female 37 16.3

Valid Male 190 83.7

Total 227 100.0

Table: 6.1.1

The above figure shows the gender distribution of the respondent. The total number of
respondent is 227 out of which 190 are male and 37 are female.
Age:

Table: 6.1.2

The above chart shows that 44.5% of the respondents are from 20 to 30 ages, 38.8% of the
respondent are from 30 to 40 ages, 12.8% of the respondent are from 40 to 50 age, and 4%
of the respondent are from 50 and above age group.

Experience:

Table: 6.1.3

The above chart shows that 10.6% have less than 1 year experience, 55.1% have 2 to 4 years
have experience, 19.8% have 5 to 8 year experience and only 14.5 have more than 8 years'
experience.

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6.2 CORRELETION ANALYSIS:

RELATIONSHIP BETWEEN RETAIL SECTOR AND CUSTOMER SATISFACTION:

H0: Customer satisfaction does not depend in Retail Sector.


H1: Customer satisfaction depend in Retail Sector.

1. In your opinion does customer service is an important part of retailing?

Table: 6.2.1

Graph: 6.2.1

Data has been collected from 227 respondents. According to the replies, 44.9% of
respondents rated strongly agree, 37.9% rated agree, 9.7% neutral, 7.0% disagree and 0.4%
strongly disagree.

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2. Does customer satisfaction affects the entire buying experience?

Table: 6.2.2

Graph: 6.2.2

The data has been collected from 227 respondents, according to responses out of 227
respondents 28.6% of the respondents strongly agree, 47.6% agree, 17.2% neutral, 4.8%
disagree and 1.8% strongly disagree.

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3. Do other units or departments of your Organization always co-operate with


customers when they need any assistance regarding product?

Table: 6.2.3

Graph: 6.2.3

The data has been collected from 227 respondents, according to responses out of 227
respondents 45.4% of the respondents rated strongly agree, 30% agree, 16.7% neutral, 6.2%
disagree and 1.8% strongly disagree.

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4. In your opinion if expectations of value and customer service are not met, the
consumer will not be satisfied.

Table: 6.2.4

Graph: 6.2.4

The data has been collected from 227 respondents, according to responses out of 227
respondents 33.5% of the respondents rated strongly agree, 41% agree, 14.1% neutral, 10.1%
disagree and 1.3% strongly disagree.

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After gathering data from the respondents, data is analyzed on SPPS20 where the
Correlation test and the results are as follows:

Correlations

Customer Customer Customer Data Retail Sector


Satisfaction Loyalty Mining
Pearson 1 .664 .702 .597
Customer Correlation
Satisfaction Sig. (2- tailed) .000 .000 .000
N 227 227 227 227

Correlation is significant at the 0.001 level (2-tailed)

Table: 6.2.5

Customer satisfaction do have a positive relationship with retail sector as shown in the
research work. The value .597 shows the strong positive relation between customer
satisfaction and retail sector. Strong positive relation of customer satisfaction with customer
loyalty and customer data mining. (.664) and (.702)

The p value of the independent value is 0.001. According to the p- value rule, if the value of
p < 0.005, the alternative hypothesis is accepted and the null hypothesis is rejected.

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RELATIONSHIP BETWEEN RETAIL SECTOR AND CUSTOMER LOYALTY:

H0: Customer loyalty does not depend in Retail Sector.


H2: Customer loyalty depend in Retail Sector.

5. In your opinion does customer loyalty is an important part of retailing?

Table: 6.2.6

Graph: 6.2.5

Data has been collected from 227 respondents. According to the replies, 44.9% of
respondents rated strongly agree, 37.9% rated agree, 9.7% neutral, 7.0% disagree and 0.4%
strongly disagree.

6. Does loyal customers help strengthen the competitive position of companies?

Table: 6.2.7

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Graph: 6.2.6

The data has been collected from 227 respondents, according to responses out of 227
respondents 18.5% of the respondents rated strongly agree, 38.8% agree, 28.9% neutral,
9.7% disagree and 8.2% strongly disagree.

7. Does Customer’s loyalty will bring more profits to the retail companies where
they are willing to keep coming to their preferred shopping place?

Table: 6.2.8

Graph: 6.2.7

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Data has been collected from 227 respondents. According to the replies, 44.9% of
respondents rated strongly agree, 37.9% rated agree, 9.7% neutral, 7.0% disagree and 0.4%
strongly disagree.

8. In your opinion does quality and variety of products and services, price and
location make customer loyal?

Table: 6.2.9

Graph: 6.2.8

The data has been collected from 227 respondents, according to responses out of 227
respondents 34.4% of the respondents rated strongly agree, 35.2% agree, 18.7% neutral,
7.9% disagree and 5.7% strongly disagree.

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After gathering data from the respondents, data is analyzed on SPPS20 where the
Correlation test and the results are as follows:

Correlations

Customer Customer Customer Data Retail Sector


Satisfaction Loyalty Mining
Pearson .664 1 .650 .623
Customer Correlation
Loyalty Sig. (2- tailed) .000 .000 .000
N 227 227 2227 227
Correlation is significant at the 0.001 level (2-tailed)

Table: 6.2.10

Customer loyalty do have a positive relationship with retail sector as shown in the research
work. The value .623 shows the strong positive relation between customer loyalty and retail
sector. Strong positive relation of customer loyalty with customer satisfaction and customer
data mining. (.664) and (.650)

The p value of the independent value is 0.001. According to the p- value rule, if the value of
p < 0.005, the alternative hypothesis is accepted and the null hypothesis is rejected.

RELATIONSHIP BETWEEN RETAIL SECTOR AND CUSTOMER DATA MINING:

H0: Customer data mining does not depend in Retail Sector.

H3: Customer data mining depend in Retail Sector.

9. Does your Organization use any Data Mining software?

Table: 6.2.11

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Graph: 6.2.9

The data has been collected from 227 respondents, according to responses out of 227
respondents 38.3% of the respondents rated strongly agree, 49.3% agree, 4.8% neutral, 3.1%
disagree and 4.4% strongly disagree.

10. Do you think that Data Mining of customers is useful for retailers?

Table: 6.2.12

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Graph: 6.2.10

The data has been collected from 227 respondents, according to responses out of 227
respondents 26% of the respondents rated strongly agree, 47.1% agree, 18.5% neutral, 5.7%
disagree and 2.6% strongly disagree.

11. Do you think that to manage the relationship with the customers, a company must gather
the correct information about its customers and organize them for proper analysis and
action?

Table: 6.2.13

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Graph: 6.2.11

The data has been collected from 227 respondents, according to responses out of 227
respondents 28.2% of the respondents rated strongly agree, 41.9% agree, 21.1% neutral,
5.7% disagree and 3.1% strongly disagree.

12. Does Data Mining information can be used to increase revenue and reduce

costs?

Table: 6.2.14

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Graph: 6.2.12

The data has been collected from 227 respondents, according to responses out of 227
respondents 37.0% of the respondents rated strongly agree, 47.5% agree, 8.4% neutral, 7%
disagree and 3.1% strongly disagree.

After gathering data from the respondents, data is analyzed on SPPS20 where the
Correlation test and the results are as follows:

Correlations

Customer Customer Customer Data Retail Sector


Satisfaction Loyalty Mining
Pearson .702 .650 1 .698
Customer Data Correlation
Mining Sig. (2- tailed) .000 .000 .000
N 227 227 227 227
Correlation is significant at the 0.001 level (2-tailed)

Table: 6.2.15

Customer data mining do have a positive relationship with retail sector as shown in the
research work. The value .698 shows the strong positive relation between customer data
mining and retail sector. Strong positive relation of customer data mining with customer
satisfaction and customer loyalty. (.702) and (.650)

The p value of the independent value is 0.001. According to the p- value rule, if the value of
p < 0.005, the alternative hypothesis is accepted and the null hypothesis is rejected.

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6.3 STATISTICAL RESULTS

6.3.1 REGRESSION

Coefficients
Unstandardized Coefficients Standardized T Sig.
Model Coefficients

B Std. Error Beta

Customer
1 .527 .040 .597 11.163 .000
Satisfaction

Table: 6.3.1.1

The Std. -Error demonstrates the statistics’ sampling-variations. Mostly Std. Error with large
Sample is depend on statistics-of Std. Error. Independent Variable-Std. Error is (0.040) that
Shows less sampling variation up to 4%.

The results obtained from the regression analysis are called the standardized coefficients. It
determines how much value per change will be observed in the dependent variable if there
is a unit change in the predictor value. The p value of the independent variable obtained here
is 0.000. According to the rule of p, H0 is rejected if its value is less than 0.005, and the other
alternative hypothesis is accepted.

Coefficients

Model Unstandardized Coefficients Standardized t Sig.


Coefficients

B Std. Error Beta

Customer Loyalty .494 .025 .623 11.958 .000

Table: 6.3.1.2

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The Std. -Error demonstrates the statistics’ sampling-variations. Mostly Std. Error with large
Sample is depend on statistics-of Std. Error. Independent Variable-Std. Error is (0.025) that
Shows less sampling variation up to 2.5%.

The results obtained from the regression analysis are called the standardized coefficients. It
determines how much value per change will be observed in the dependent variable if there
is a unit change in the predictor value. The p value of the independent variable obtained here
is 0.000. According to the rule of p, H0 is rejected if its value is less than 0.005, and the other
alternative hypothesis is accepted.

Coefficients

Model Unstandardized Coefficients Standardized t Sig.


Coefficients

B Std. Error Beta

1 Customer Data Mining .645 .048 .698 10.626 .000

Table: 6.3.1.3

The Std. -Error demonstrates the statistics’ sampling-variations. Mostly Std. Error with large
Sample is depend on statistics-of Std. Error. Independent Variable-Std. Error is (0.048) that
Shows less sampling variation up to 4.8%.

The results obtained from the regression analysis are called the standardized coefficients. It
determines how much value per change will be observed in the dependent variable if there
is a unit change in the predictor value. The p value of the independent variable obtained here
is 0.000. According to the rule of p, H0 is rejected if its value is less than 0.005, and the other
alternative hypothesis is accepted.

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CHAPTER 6: FINDINGS

Findings 1: Based on the responses and analysis, the finding of first variable identified that
the H1 is accepted and H0 is rejected which indicates that Customer Satisfaction depend in
Retail Sector. The results showed that the majority of the interviewees gave a agree response
There is relationship between customer satisfaction and retail sector.

Findings 2: Based on the responses and analysis, the finding of second variable identified
that the H1 is accepted and H0 is rejected which indicates that Customer Loyalty depend in
Retail Sector. The results showed that the majority of the interviewees gave a agree response
There is relationship between customer loyalty and retail sector.

Findings 3: Based on the responses and analysis, the finding of third variable identified that
the H1 is accepted and H0 is rejected which indicates that Customer Data Mining depend in
Retail Sector. The results showed that the majority of the interviewees gave a agree response
There is relationship between customer data mining and retail sector.

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CHAPTER 7: CONCLUSION

The purpose of the study was to identify the importance of customer relationship
management dimensions which are customer satisfaction, customer loyalty and customer
data mining in retail sector. As these dimensions are very important in retail sector to
establish good long term relationship.

Theoretical Conceptual framework and hypothesis are made on the basis of literature review.
This is quantitative research. The questionnaire comprises 15 questions for gathering the
data. And 5-point Likert scale is used in questions.

The first section of this chapter briefly discusses research questions, a research method used
to answer research questions. The main findings of the study will also be presented which
will be shown the results of the study. Based on the feedback and analysis drawn from the
result, the finding of this research is, all the alternative hypothesis are accepted. It means all
dimensions of Customer Relationship Management (CRM) which are customer satisfaction,
customer loyalty and customer data mining depends in retails sector to establish long term
relationship with customers.

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CHAPTER 8: SUMMARY

9.1 INTRODUCTION:

This chapter describes the findings of the research data, the implications of these findings,
and the possibilities for future research to extend the results of this work. The limits of the
study are also discussed.

The purpose of the study was to study the importance of customer relationship management
dimensions which are customer satisfaction, customer loyalty and customer data mining in
retail sector.

The first section of this chapter briefly discusses research questions, a research method used
to answer research questions. The main findings of the study will also be presented which
will be shown the results of the study.

9.2 SUMMARY OF RESEARCH METHODOLGY:

This study aimed to identify the importance of customer relationship management (CRM)
in Karachi, Pakistan. We examined the relationship between dependent variables and
independent variables. Independent variables were the customer satisfaction, customer
loyalty and customer data mining. The dependent variable was Retail sector.

Since this is quantitative research primary data was used to collect data from respondents
using a questionnaire. The questionnaire was composed of 15 questions. The questionnaire
includes various questions on customer satisfaction, customer loyalty and customer data
mining. The sample size calculated was 370 as per Rao Soft software.

SPSS20 was used to analyze the data. Pilot testing was done to check the reliability of the
questionnaire and then questionnaire sent to the respondents to collect the data. Cronbach
Alpha is used to measures the reliability of a test. If the value of Cronbach's alpha is less

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than 0.5, this is unacceptable, even if its value is between 0.5 and 0.6, reliability is considered
bad, and 0.6 to 0.7 is an acceptable range. , and if its value is between 0.7 and 0.9, it is a
reliable value. In my study, the Cronbach alpha value was 0.891, which gave good reliability
in the range of 0.7 to 0.9.

9.3 SUMMARY OF MAIN FINDINGS:

Based on the feedback and analysis drawn from the result, the finding of this research is, all
the alternative hypothesis are accepted. It means all dimensions of Customer Relationship
Management (CRM) which are customer satisfaction, customer loyalty and customer data
mining depends in retails sector to establish long term relationship with customers.

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QUESTIONNAIRE

Dear Respondent,

You have been chosen to participate in this study, which seeks to establish, the relationship

between Customer Relationship Management with Retail Sector. The study is purely

academic and any information provided will be treated for educational purpose, looking

forward for your support by providing the required information.

General Information

Email: _____________________________

Organization: _______________________

Designation: ________________________

A) Gender

☐ Male ☐ Female

B) Age of the respondent:

☐ 20 to 30 ☐ 30 to 40 ☐ 40 to 50 ☐ 50 above

C) How long you have been working in this organization

☐ Less than 1 year ☐ between 2-4 years ☐ between 5-8 years ☐ More than 8 years

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CUSTOMER SATISFACTION:

13. In your opinion does customer service is an important part of retailing?


☐ strongly agree ☐ Agree ☐ Neutral ☐ Disagree ☐ Strongly disagree

14. Does customer satisfaction affects the entire buying experience?


☐ strongly agree ☐ Agree ☐ Neutral ☐ Disagree ☐ Strongly disagree

15. Do other units or departments of your Organization always co-operate with


customers when they need any assistance regarding product?
☐ Strongly Agree ☐ Agree ☐ Neutral ☐ Disagree ☐ Strongly disagree

16. In your opinion if expectations of value and customer service are not met, the
consumer will not be satisfied.
☐ Strongly Agree ☐ Agree ☐ Neutral ☐ Disagree ☐ Strongly disagree

CUSTOMER LOYALTY:

17. In your opinion does customer loyalty is an important part of retailing?


☐ Strongly Agree ☐ Agree ☐ Neutral ☐ Disagree ☐ Strongly disagree

18. Does loyal customers help strengthen the competitive position of companies?

☐ Strongly Agree ☐ Agree ☐ Neutral ☐ Disagree ☐ Strongly disagree

19. Does Customer’s loyalty will bring more profits to the retail companies where they
are willing to keep coming to their preferred shopping place?
☐ Strongly Agree ☐ Agree ☐ Neutral ☐ Disagree ☐ Strongly disagree

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20. In your opinion does quality and variety of products and services, price and location
make customer loyal?
☐ Strongly Agree ☐ Agree ☐ Neutral ☐ Disagree ☐ Strongly disagree

CUSTOMER DATA MINING:

21. Does your Organization use any Data Mining software?

☐ Strongly Agree ☐ Agree ☐ Neutral ☐ Disagree ☐ Strongly disagree

22. Do you think that Data Mining of customers is useful for retailers?

☐ Strongly Agree ☐ Agree ☐ Neutral ☐ Disagree ☐ Strongly disagree

23. Do you think that to manage the relationship with the customers, a company must

gather the correct information about its customers and organize them for proper

analysis and action?

☐ Strongly Agree ☐ Agree ☐ Neutral ☐ Disagree ☐ Strongly disagree

24. Does Data Mining information can be used to increase revenue and reduce costs?

☐ Strongly Agree ☐ Agree ☐ Neutral ☐ Disagree ☐ Strongly disagree

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ANNEXURE

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PROJECT PROPOSAL

Name of the Student: Muhammad Asad Saleem

Registration Number: 60885

Program Name: MBA

Contact Details: 0345-2229581

Name of the Student: Muhammad Zain Uddin

Registration Number: 60760

Program Name: MBA

Contact Details: 0341-2785982

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TO IDENTIFY SIGNIFICANCE OF CUSTOMER RELATIONSHIP


MANAGEMENT (CRM) IN RETAIL SECTOR

1) Objectives_ Need & importance for the topic:

 To recognize the importance Customer Satisfaction in Retail Sector.

 To recognize the importance of Customer Loyalty in Retail Sector.

 To recognize the importance of Customer Data mining in Retail Sector.

This study aims to identify the importance of customer relationship management through
Customer Satisfaction, Customer Loyalty and Customer Data Mining in Retail Sector. A
number of past studies discussed the significance of CRM in retail sector but fewer studies
were conducted to examine the CRM significance in Pakistan.

2) Methodology and Procedure of Work:

This study aimed to identify the importance of customer relationship management (CRM)
in Karachi, Pakistan. We examined the relationship between dependent variables and
independent variables. Independent variables were the customer satisfaction, customer
loyalty and customer data mining. The dependent variable was Retail sector.

Since this is quantitative research primary data was used to collect data from respondents
using a questionnaire. The questionnaire was composed of 15 questions. The questionnaire
includes various questions on customer satisfaction, customer loyalty and customer data
mining. The sample size calculated was 370 as per Rao Soft software.

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3) Statistical Techniques:

This is quantitative research, which primarily follows deductive approach of research.


The sample size is 370, which is calculated from Rao Soft calculator. The questionnaire
comprises 15 questions for gathering the data. And 5-point Likert scale is used in
questions. To analyze the quantitative data SPSS statistics version 20 software were used.
First reliability testing of questionnaire is done after reliability testing questionnaire is
send for collection of data. Statistical analysis made by using multiple regression analysis
which includes Coefficient analysis and the Correlation analysis on the data which we
gathered with the help of respondents through questionnaire. Statistical analysis accepts
all alternate hypotheses and rejected all null hypothesis. Strongest relationship between
variables is also mention with the help of correlation analysis.

4) Guide/Faculty: Sir Ubedullah Amjad Ali Shaikh

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REFERENCES:

Chodzaza, G.E., Gombachika, H.S.H. (2013), Service quality, customer satisfaction and
loyalty among industrial customers of a public electricity utility in Malawi. International
Journal of Energy Sector Management, 7(2), 269-282.

Aaker, D.A. (1996), Building Strong Brands. New York: The Free Press. Amin, M., Isa, Z.,
Fontaine, R. (2013), Islamic banks: Contrasting the drivers of customer satisfaction on
image, trust, and loyalty of Muslim and non-Muslim customers in Malaysia. International
Journal of Bank Marketing, 31(2), 79-97.

Andreassen, T.W., Lindestad, B. (1998), Customer loyalty and complex services: The
impact of corporate image on quality, customer satisfaction and loyalty for customers with
varying degrees of service expertise. International Journal of Service Industry Management,
9(1), 7-23.

Bowen, J.T., Chen, S.L. (2001), the relationship between customer loyalty and customer
satisfaction. International Journal of Contemporary Hospitality Management, 13(5), 213-
217.

Matos, C.A., de Henrique, J.L., de Rosa, F. (2009), the different roles of switching costs on
the satisfaction-loyalty relationship. International Journal of Bank Marketing, 27(7), 506-
523

Berry, M. J. A. and Linoff, G. S. (2000). Mastering Data Mining: The Art and Science of
Customer Relationship Management. Wiley, New York, 1 edition.

Berry, M. J. A. and Linoff, G. S. (2004). Data Mining Techniques: For Mar- keting, Sales,
and Customer Relationship Management. Wiley Computer Publishing, 2 edition.

Berson, A., Smith, S., and Thearling, K. (1999). Building Data Mining Applications for
CRM. McGraw-Hill, New York.

Agresti, A. (2002) Categorical Data Analysis 2nd Edition, John Wiley and Sons Inc,
Hoboken, NJ

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Anderson, E., and Mittal, V. (2000) Strengthening the satisfaction-profit chain Journal of
Service Research, Vol. 3, November, p107-120.

Chu, J, Pike, T. (2002) What top-performing retailers know about satisfying customers:
Experience is key, IBM Institute for Business Value

Feinberg, R.A., Kadam, R., Hokama, L & Kim, I. (2002) The State of Electronic
Customer Relationship Management in Retailing. International Journal of Retail &
Distribution Management. Vol. 30, 10, pp. 470-481.

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List of Figures & Graph

1. Figure 4.1.1.1…………………………………………………………7
2. Figure 4.1.2.1……...…………………................................................11
3. Figure: 4.1.2.2…………….…….........................................................12
4. Figure: 4.1.4.1…………..…………….…….......................................14
5. Figure: 4.1.4.1…………..…………….…….......................................15
6. Figure: 5.2.1………………………………………………………….18

7. Graph 6.2.1…………………………………………………………..21
8. Graph 6.2.2…………………………………………………………..22
9. Graph 6.2.3…………………………………………………………..23
10.Graph 6.2.4…………………………………………………………..24
11.Graph 6.2.5…………………………………………………………..26
12.Graph 6.2.6…………………………………………………………..27
13.Graph 6.2.7…………………………………………………………..27
14.Graph 6.2.8…………………………………………………………..28
15.Graph 6.2.9…………………………………………………………..30
16.Graph 6.2.10…………………………………………………………31
17.Graph 6.2.11…………………………………………………………32
18.Graph 6.2.12…………………………………………………………33

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List of Tables

1. Table 5.5.1…..………………………………………………………..19
2. Table 6.1.1….……...…………………................................................20
3. Table 6.1.2…………….………...........................................................20
4. Table 6.1.3…………..……………..….…….......................................20
5. Table 6.2.1…..………………………………………………………..21
6. Table 6.2.2….……...…………………................................................22
7. Table 6.2.3…………….………...........................................................23
8. Table 6.2.4…………..……………..….…….......................................24
9. Table 6.2.5…………..…………….…….............................................25
10.Table 6.2.6…..………………………………………………………..26
11.Table 6.2.7….……...…………………................................................26
12.Table 6.2.8…………….………...........................................................27
13.Table 6.2.9…………..……………..….…….......................................28
14.Table 6.2.10…………………………………………………………..29
15.Table 6.2.11…....…………………......................................................29
16.Table 6.2.12……..…….………...........................................................30
17.Table 6.2.13…………..……………..….…….....................................31
18.Table 6.2.14…………..…………….……...........................................32
19.Table 6.2.15………….……….............................................................33
20.Table 6.3.1.1….……..……………..….…….......................................34
21.Table 6.3.1.2………………………………………………………….34
22.Table 6.2.1.3…....………………….....................................................35

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