Article 20
Article 20
Article 20
By
fulfillment of
(MARKETING OPTION)
BUSINESS
October, 2016
DECLARATION
I, declare hereby that this thesis submission is my own work which is in the direction
sources cited by me, have been shown and recognized by way of complete references.
Therefore, to the best of my knowledge, this study contains materials that has not
mentioned qualification by any person or persons and has also not been accepted by
Certified By:
Certified By:
ii
DEDICATION
I dedicate this work to my Parents, Mr. and Mrs. Benjamin Lamptey and to my
iii
ACKNOWLEDGEMENTS
My profound gratitude goes to the Almighty God for his guidance and love given me
I would like to thank staff and management of Ernest Chemist, Kumasi for their
Am grateful to my husband, Mr. Derrick Kwayisi Gyan, for his support all these
while.
To my supervisor Dr. Kofi Poku and his advice, time and guidance and also for the
patience shown me and awesome understanding through all the hard times faced
iv
ABSTRACT
The pharmaceuticals industry is one of the sectors of the economy of Ghana that is
marketing of its products. The pharmaceutical industry has seen a steady growth over
the years, of which most of the major industry players manufacture their own drugs
and supplement their production with imports from their international partners. This
has increased the competition in the industry and in some cases brought about unfair
competition due to the influx of fake drugs in the market. This raises the concerns of
how companies strive to improve business performance and customer service and
branding are key factors to consider. The study focused on corporate branding. The
main objective of the study was to determine the mediating effect of customer service
products. The study was conducted using customers of Ernest Chemist Ltd., Kumasi.
Two hundred and thirty customers were selected for this study. The statistical tool
used for this study was SPSS and STATA. From the findings, branding had a positive
recommended that firms improve upon their branding activities whiles strengthening
v
TABLE OF CONTENTS
DECLARATION.......................................................................................................... ii
DEDICATION.............................................................................................................iii
ACKNOWLEDGEMENTS ....................................................................................... iv
ABSTRACT .................................................................................................................. v
INTRODUCTION........................................................................................................ 1
vi
2.3.1 Concept of Branding In the Pharmaceutical Industry ........................................... 8
vii
2.11 Customer Service in the Retailing of Pharmaceutical Products .......................... 24
3.5.1 Questionnaires..................................................................................................... 37
viii
4.3 Reliability............................................................................................................... 41
REFERENCES ........................................................................................................... 53
APPENDIX ................................................................................................................. 64
ix
LIST OF TABLES
x
LIST OF FIGURES
xi
CHAPTER ONE
INTRODUCTION
The pharmaceuticals industry is one of the sectors of the economy of Ghana that is
distribution of its products. The pharmaceutical industry has seen a steady growth
over the years, of which most of the major industry players manufacture their own
drugs and supplement their production with imports from their global partners. This
has increased the competition in the industry and in some cases brought about unfair
competition due to the influx of fake drugs in the market. This raises the concern of
how companies strive to improve business performance and customer service and
make mindfulness and produce intrigue and expanded certainty among potential
from others, it has become a basic component in the company's positioning procedure.
impression in the psyche of the consumers or prospects (Kotler and Keller, 2009).
satisfaction that is, the provision of service before, during and after, with the intention
that the product or service meet up customer expectation, (Rhee and Bell, 2002).
process cannot be overstated. It is also the basis for customer satisfaction, loyalty, and
customer service is the prime factor that can separate a company from its competitors.
Therefore, to state that success in business is due to the good customer service is a
1
true saying, in other words if the customer service of any organization is very good
The purpose of this study is therefore to identify how customer service plays a
mediating role between the branding activities of a firm and its performance.
Companies all over the world whether the service or manufacturing firms, recognize
the essential role branding plays in the course of business. In the present day
strengthen their competitive advantage and thus improve the accomplishment of their
prearranged objectives.
Over the past few years, a steady growth has been recorded in the pharmaceutical
industry in Ghana, whereby major companies are either into the production of their
partners. This has resulted in increased competition and, in some cases, unfair
competition because of the invasion of counterfeit drugs on the market. This often
creates a bad image for genuine pharmaceutical companies who have high level of
wholesalers, licensed chemical stores, pharmacies, clinics, hospitals and even street
vendors as well, making its stringent quality control a serious issue. According to
Anabila and Awunyo-Vitor (2014), the pharmaceutical business has not been
convincing in utilizing the force of their brands in respect to their partners in the
items have dependably contended with each other based on functional attributes
2
(clinical and item related elements). It is against this background that branding is
increasingly necessary due to the influx of fake drugs in the system, and that branding
goes down to the very core of survival for companies and serve as a competitive
other it is expedient to create a corporate image or brand that would make the
difference.
Well established strategies in customer service are necessary in order to satisfy and
create a competitive advantage. In recent times customers demand more than ever
even to the extent that operators in the retail industry have to execute tasks in a timely
have had to distinguish winning marketing techniques that give upper hand on a
management practices. This study therefore seeks to establish the relationship that
exist between branding and organizational performance and also the effect branding
In order to evaluate the mediating role customer service plays between branding and
Chemist.
Ernest Chemist.
3
4. To determine the mediating effect of customer service on branding and
In answering the objectives for the study, the following questions were asked:
Chemist?
Ernest Chemist?
This study covers the mediating role customer service plays between branding and
The study will be of importance to academicians as the study will provide a good
basis for future research on branding strategies by pharmacies and retailing companies
at large. It will also add to the existing body of knowledge in the marketing field.
information to evaluate whether the branding strategies being adopted has an impact
on organizational performance.
This study will determine whether customer service plays a mediating role between
branding and organizational performance for the local pharmacies. It will give an idea
4
on improving their customer service strategies in order to improve its organizational
goals.
The methodology of this research described the procedures that were followed in
collecting data for the research. The survey study research was adopted for this study.
The population under the study comprised of customers of Ernest Chemist in Kumasi.
A sample size of one hundred and fifty (230) customers was drawn from a population
of five hundred (500). The customers were selected using random sampling
technique. Both primary and secondary data were utilized where the Statistical
Package for Social Sciences (SPSS) and STATA were the statistical tools utilized in
analyzing the data collected. Pearson correlation was used in analyzing the
relationships between the variables whiles multiple linear regression was used in
organizational performance.
This study was limited to the customers of Ernest Chemist Ltd., Kumasi. It was also
limited to the retailing aspect of the firm. Only the customers were used for this study
The Study is divided into Five Chapters. Chapter One consists of the background of
the study, the statement of the problem, the overview of research methodology,
objectives and research questions, scope and justification of the study. Chapter Two
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includes the literature review, Chapter Three explains the methodology used, Chapter
Four contains the analysis and discussion of results and Chapter Five consists of the
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CHAPTER TWO
LITERATURE REVIEW
2.1 Introduction
performance and how they relate with each other in order to improve businesses.
marketing may not generally be relevant for a brand's local attractiveness. The
responsibility of global marketing and maximizing items' business and helpful quality
appended. Aside from the manysided quality of the items, the part of branding in
in the item's profile, the naming, the avoidance of direct promoting of moral
medications to the patients, and short item life cycles (Lim et al., 2010).
From customer’s point of view, a branded product makes choice easier. In the absence
of branding, customers would have to go through the tedious task of having to assess
different categories of products in times of shopping. They could not have been fully
convinced of the desired products they are purchasing. A branded product ensures that
there is accuracy when searching and selecting product and also helps in its
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evaluation. When companies have strong brand, they have the privilege of charging
higher prices even when facing stiff competition. Noting the increasing understanding
tangible benefits, more organizations are expected to embrace the benefits that
When a product is branded, it identifies the company that produced the products and
thereby reducing the risk associated with after purchase dissatisfaction. Branding is
very important as it aids in targeting new markets when brand extension strategies are
used. When brands are extended several markets are reached. It also helps in the
introduction of new product lines. Consumers are known to willingly adopt new
products of popular brands. Branding also promotes the status and name of the
company.
The idea of trust is extremely important to typical brands having high association due
to high view of buying risks (Elliot and Percy, 2007). Typical brands with high
and Percy, 2007). Since pharmaceutical brands are trusted and doctors and patients
have their confidence, brands include a more prominent feeling of reason to the drug
(Lim et al., 2010). Brands that are, in a genuine sense, effective in the business sectors
A medication's dose, decency and reactions are the conceivable components that drive
medication (Sanyal and Datta, 2011). Decision of treatment is, along these lines,
8
managed by scientific premise, not branding methods (Schroff, 2003). An item's
physical attributes lead to the quality signs, i.e. natural and in addition outward, the
impacts of which further prompts quality judgment which relies on the minimization
of the difference between the desire and perception of the buyers (Sanyal and Datta,
2011). In any case, at the center of each effective brand message is the one key
advantage gotten from the most grounded item feature and which separates it from the
Pharmaceuticals was in the first place used for distinguishing tangible products but
from early 1990s, there has been a move to corporate branding, since, amongst other
reasons, organizations have recognized that their employees are also the expression of
the brand, providing a point of major difference not just through the functional values
of the brand but also its emotional values (Schultz and de Chernatony, 2002). In
better since that organization has involvement there. Kapferer (2011) argued that
brand personality and quality image were the key elements that created a status for a
drug. This then prompted arrangement of attitude to recommend and in the end
provide steady remedy of the brand for a patient. Moss and Schuiling (2004)
recommend that brand names ought to be all the more firmly connected to the
corporate name. The system can be utilized as a full name or as an umbrella name
connected to the brand name of the product (Moss and Schuiling, 2004).
a unique corporate identity (Abratt and Kleyn, 2011). The concept of corporate
9
branding has gained popularity in the marketing literature as corporate brands are said
to add value to the products and services offered by the company (Harris and de
Chernatony, 2001).
Abratt and Kleyn (2011) suggest four aspects of corporate branding that are crucial to
the development of a strong brand identity. These are visual identity, brand promise,
brand personality, and brand communication. On the other hand, Harris and de
Chernatony (2001) argue that brand vision and culture, positioning, personality,
relationships, and presentation are key components of corporate branding that builds
the four inter-related dimensions of corporate name, image, reputation, and loyalty.
The distinguishing factors between product brands and corporate brands are
considered higher strategic focus, internal as well as external targets, and inclusion of
corporate strategy (Balmer, 2001). Since corporate and product brands are context
independent, they are now recognized as distinct entities and they may also be
The general reason for corporate branding is to create a supportable brand between
the branded organization and its clients through a reasonable quality proposition
(Schultz and de Chernatony, 2002). Even though corporate and product brands have
the same reason for making separation and preferences (Knox and Bickerton, 2003),
the complex nature of the corporate connection has essential implications for the
nature of the corporate brand (Muzellec and Lambkin, 2009). According to Schroff
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pharmaceutical corporate branding is likely to be non-beneficial. A patient will rarely
ask the physician about the drug manufacturer and its record of providing safety and
The corporate brand image goes beyond the brand image of the product and ignoring
the characteristics of the product but focuses more on a defined set of values ( Aaker
and Joachimsthaler , 2000; Hatch and Schultz , 2001). The main advantages conveyed
by the corporate brands are trust, loyalty, the scientific credibility of its R & D, the
credibility of its sales force and the creation of new product launch environment
(Moss, 2001).
Brand promotion to the corporate level allows the brand of the company to show
keep the product beyond the brand equity of product (Sun, 2009). Over a period of
time, however , the trend indicates a paradigm shift among the market leaders in the
brand to a wide range of offers and enterprise services that are increasingly the basis
of differentiation among the "me -too" product brands in mature groups (Sun , 2009).
In terms of assertive sales, the company's brand strategically supports the product
brand by opening channels of communication and generates respect that will make
people listen and take note. The company's brand performs the work of the brand of
the product before the actual launch by building reputation (Colyer, 2003). For
programs must develop to help the industry overcome different challenges being
their corporate brand in order to create competitive advantage for themselves. They
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need to develop a good brand positioning so as to differentiate them from
competition.
Abratt and Kleyn (2011) suggest four aspects of corporate branding that are crucial to
the development of a strong brand identity. These are visual identity, brand promise,
brand personality, and brand communication. On the other hand, Harris and de
Chernatony (2001) argue that brand vision and culture, positioning, personality,
relationships, and presentation are key components of corporate branding that builds
the four inter-related dimensions of corporate name, image, reputation, and loyalty.
(Sinha et al., 2010). For this study, the following dimension would be used in
measuring corporate branding: Brand Awareness, perceived quality, brand loyalty and
brand associations.
(Mackay, 2001). Keller (2003, pp 17) defines brand awareness as “the customers’
ability to recall and recognize the brand as reflected by their ability to identify the
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brand under different conditions and to link the brand name, logo, symbol, and so
According to Aeker (1996), there are other higher levels of brand awareness apart
from recall and recognition. He added brand dominance, top-of-mind, and brand
opinion and brand knowledge. Keller (1993) also added that brand knowledge is the
complete set of brand association attached to the brand. Vrontis and Papasolomou
(2007) posit that powerful brands are more likely to benefit when customers’
awareness of the brand is high. Other researchers also explain that brand awareness
occurs when a potential buyer is able to identify and recall brands belonging to a
The most accepted aspect of branding is the brand association. (Aeker, 1992). They
represent reason for deciding to purchase and having loyalty for a brand. According to
Kotler and Keller, (2006), brand association consist of all brand related feelings,
thoughts, images, beliefs, experiences, attitudes and is everything associated with the
brand. There are two types of brand associations and they are organization association
and products associations (Chen, 2001). Research by Hamann et al. (2007) showed
that customers most often use and are willing to pay higher prices for branded
products when they have the opportunity to choose other products that fall into the
brand that is determined by the knowledge stored in their memory, based on past
associations. (Chen, 2001). The tangible features of the product are the functional
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linked to the brand by consumers.
associations related to the expertise of the company in the production and delivery of
Perceived quality is how the customer judges the overall superiority or excellence of a
product or service that is different from its objective quality. The objective quality of
a product or service refers to the measurable, technical and its verifiable nature,
A higher objective quality does not necessarily add any value to brand equity.
and complete judgement of objective quality, therefore they use quality attributes that
they can associate with quality (Acebro’n and Dopico, 2000). Perceived quality is
factors. They are extrinsic attributes and intrinsic attributes. The extrinsic attributes
are those related to the product, not the physical aspect (for example, brand name,
stamp of quality, store, price, packaging and product information (Bernue et al. 2003)
whiles on the other hand, the intrinsic attributes are related to the physical aspects of
the product (for example, flavor, color, appearance, form). It is very difficult in
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(Anselmsson et al., 2007).
customers become more connected to a brand, they are likely to maintain close
proximity with the brand because the presence of the attachment object offers feelings
Behavioral loyalty is seen where customer behavior in the market place is indicated
choice. Cognitive loyalty is when there's a need to make a purchase decision, a brand
comes up first in the customers mind or a customer’s first choice. The cognitive
loyalty is linked closely to the highest level of awareness. As a result, a brand must be
able to become the customer’s first choice (cognitive loyalty) and therefore must be
brand price. Price premium is identified as the basic indicator of loyalty. It is defined
as the amount a customer will pay for the brand in comparison with another brand
offering similar benefits and it may be high or low and positive or negative depending
activity or program. Daft (2000) however in his definition stated that organizational
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performance is the ability of the organization to use its resources effectively and
efficiently in order to attain its goals. Richardo (2001) also defined organizational
definitions have been propounded for organizational performance and this also brings
concept in modern management has suffered from problems associated with clarifying
its concepts in a number of areas. One was with the issue of its definition whiles the
mentioned that there was a variation between productivity and performance. He said
that productivity was a ratio representing the amount of work done in a given time frame.
were generally considered. Ricardo (2001) said that the results- oriented behavior
education and training, management development and leadership training are needed
skills and attitudes for building performance management. Therefore from the above,
there have been quite a number of debates concerning both the issue of terminology
and the conceptual bases for measuring performance. The term performance may not
be fully explained by a single measure. There have also been inconsistencies in the
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measuring organizational performance even though several researchers (Peter &
relationship and effectiveness related actions, which involves issues like employee
satisfaction and business growth must be included. The industrious drive for
amongst others (Caulkin, 2001; Seddon, 2000), who investigates the invalid
possibility of measuring much, if not most, of the parts of life and associations that
are essential. Many researchers have used several variables in the measurement of
gross profit, return on investment (ROI), return on equity (ROI), return on asset
(ROA), return on sale (ROS), stock price, liquidity and operational efficiency,
revenue growth, sales growth, export growth, market share (Gimenez, 2000). This
Performance has been theorized using non-financial and financial measures from both
perceptual and objective sources. Objectives measures included are secondary source
financial measures such as profit growth, return on investment, return on assets. They
are not biased and are useful when conducting single-industry studies because they
benchmarking analysis and trend analysis. Included among the perceptual sources are
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Most organizations use the term performance in describing a range of measurements
which include output efficiency, input efficiency and also transactional efficiency.
Every organization has its own objectives and ways for measuring organizational
performance. However, Doyle (1994) mentioned that the most commonly used tool in
supported by Nash (1993) who said that the best indicator to check whether an
organization has met its goals or not is profitability. Other researchers also supported
the use of ROE, ROA and profit margin as the common measure of performance
were those with higher return on equity and those who have made performance
management system support every facet of the organization from the top level
the objectives and strategies of the organization but were inward looking and did not
satisfaction and rating, employee rating, product quality, share of the market, and
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considered to be trailing measures of performance. However this work shall apply the
as financial data were not available due to the highly confidential nature of the
information.
and Jones (2015) define organizational performance as the actual results or output of
The success of an organization depends on the competency of its leaders and the
organizational culture those leaders create. The beliefs and values of an organization’s
leaders will always influence its performance (Soebbing et al., 2015). Ssekakubo et al.
and noted that leadership competencies can improve employee performance; this
stated that vision, integrity, openness, dedication, and creativity among leaders ensure
the two concepts. For instance, Price (2001) defined employee performance as the
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overall perception and evaluation of the work environment, and it may also be viewed
as a positive emotional status that develops from an individual’s job appraisal and job
experiences (Islam and Siengthai, 2009) Research has also focused on the subject of
and physiological needs (Schneider et al., 2003). From these studies, we deduce that
more likely to experience negative effects on their mental health status and job
experience when shopping. This is done by ensuring that the set of activities or
programs offered is more rewarding (Harris, 2010) in order that the value associated
with any product or services purchased by customers tend will increase. In modern
times, the idea that customer service is solely the ability of the retailer to meet
by supplying and delivering expert, necessary, superior services and helping on time,
during the moment the customers’ needs is served must be incorporated. Customer
service is a game plan of activities proposed to enhance the level of purchaser loyalty,
that is, the obtainment of service some time as of late, in the midst of and after so that
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the product or organization meet client wish, (Rhee and Bell, 2002). Customer service
can be considered as acknowledging what customers need and seeing that they get it.
Beyond the fact that some specific exercises that are done in the range of customer
service is marketing in nature; yet genuine customer service is every ones obligation
and not just the marketing office (Fry. L, Charles and E.Hattwich, 1998).
process where two or more people understand and share information or ideas among
customers, there need to be an understanding between the customer and the service
provider. The elements are listed as follows: Building customer intelligence, listening
Retailers always have the task of facing challenges associated with communicating
effectively with their customers and this occurs when they do not really understand
their customers. When retailers are able to intimately understand their customers, they
intelligence makes provision for understanding the customer. It involves the process
active, potential and lost customers, (Harris, 2010). Building customer intelligence
aids the retailer to better serve the different types of groups of customers in an
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2.9.2 Listening To Customers
In recent years, customers easily get emotional when expressing their sentiments with
the retailer. Service personnel must therefore provide a listening ear and also give
Marshall (2010), when the retailer gives the customer undivided attention when
complaining, they are in a good position to understand the customer’s complaints and
When a customer is being interrupted frequently, it can worsen the emotional state of
however apologizing for any inconvenience caused may be reasonable (Levy and
Weitz 2012). It is through listening that retailers would get to know and understand
created when customers feel their complaints have been fairly handled.
grievances than intangible ones. However a combination of both would please the
customer.
In modern times, customers pay attention to the time taken in order to have their
complaints resolved or have their service delivered. It is necessary for every service
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2.10 Characteristics of Customer Service
When retailers or service providers understand very well the characteristics of service,
they are in a better position to structure the service package to lure customers.
2.10.1 Perishability
Customer service cannot be kept in stock to be used in future because of its perishable
nature. Service packages which are not used today cannot be stored in order to satisfy
peak periods in demand for future purposes (Dadfar et al., 2012).The perishable
nature of service raises the issues of limited capacity in satisfying demands which
might end up lost in sales. For example, when a supermarket does not have adequate
till operators, they might lose the day’s sales if customers in the queue decide to leave
and shop elsewhere. Perishability makes service providers alert in order for them to
evaluate their service capacity in terms of their capacity and demand to meet
2.10.2 Intangibility
makes it impossible to smell it, see it, touch it, difficult to grasp, explain or
the demonstration of how service personnel handle complaints from customers. This
means that potential customers make their decisions based on past experiences and
quality services to customers in order to ensure that they spread favorable word of
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2.10.3 Simultaneity
When service is simultaneous it means that service is produced and consumed at the
same time and are inseparable. According to Du Plessis et al (2012), service delivery
cannot be separated from the provider producing it. When customer service is
inseparable, it limits the area a service can fully satisfy. This is because customers
would have to visit a particular sales outlet in order to receive a service. For example,
in a pharmacy, in order for the pharmacist to prescribe medicine for a patient, the
pharmacist and the patient must be present at the pharmacy in order for the patient to
describe his or her ailments to the pharmacist who would in turn, prescribe the
2.10.4 Heterogeneity
The heterogeneity of customer service explains that service varies from one customer
to the other, as a result the delivery of service is not consistent. This occurs because
(2003), people possess different personalities and capabilities and this makes it
in order to ensure that quality standards are implemented and reinforced in customer
service delivery.
Dadfar et al. (2012) recognized the core clients and touch focuses in pharmaceutical
marketing with retail as the last focal point. They focused on the fact that each client
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must ensure consumer loyalty at every touch point. As, rivalry turned out to be
separating themselves in from the front line when managing customers. Accordingly,
the drug stores and their nature of administration have turned into the purpose of
interest.
One of a kind attributes of pharmaceutical business sector is that the final consumer is
not the leader in picking which medication to buy (Kim and King, 2009). Besides,
hard to organize and focus on the customer (Dadfar et al., 2012). For instance, doctors
makers/shippers; retail drug stores buy drugs from merchants; the end-clients
purchase the endorsed drugs from the drug stores, and more often than not the
insurance agencies pay the medication cost. According to Bissell et al. (1997) keeping
up a pharmacy has a critical social and in addition a useful part in medicinal services
framework. Drug data and expert discussion to the customers are turning out to be
increasingly noteworthy. These capacities put the drug store in a position of going
about as the principal contact in the social insurance framework. That is, the patient
Hypothesis 1
Leiser (2004) explained that there exist many factors that attribute to the brand being
successful when extended into new markets or products categories; the prominent one
among them being brand credibility. The imagery and stature of the brand is sold
alongside with the service delivered to the customers who buy the brand, (O’Loughlin
25
and Szmigin, 2005). Pharmaceutical branding is to make mindfulness among potential
clients about the advantage of medications and drugs. The marketing procedure and
brand give people in general, prepared learning of what the item is about and makes a
state of distinguishing the brand amongst numerous other comparable items in the
market (Blackett, 2005). To add to this, the whole branding process has esteem for an
organization as it helps the business concentrate on, improve and be predictable with
its message. Also, it permits an organization to constantly test the message and check
whether it is being understood in the correct way (Malone, 2004) Making brands will
utilizing both intangible and intangible advantages. Branding can maintain brand
against non-specific items after the lapse of the patent. A solid brand will profit by
high purchaser loyalty, permitting solid deals even after the patent has lapsed. In
addition, brands will affect the conduct and state of mind of patient and specialists
Hypothesis 2
The pharmaceutical business has come late with respect to adopting branding as a
strategy to go by. Amid the early centuries, the pharmaceutical business delighted in
reliably. The accomplishment of the business relied on upon solid R&D, utilization of
patent, and a strong sales power. In any case, with development in the business
backing off, firms have been scanning for better approaches to keep up their brand
had the need to grasp marketing and branding strategies to a more prominent degree
26
than they have been previously (Blackett, 2005) Branding is an important concept in
trading activities and academic researches. It is for the same reason that successful
developmental pressures and the capability to create entry barriers for rivals. Branding
mitigates customers’ risk feeling during buying the services. Likewise, a high level
brand enhances customers’ satisfaction and loyalty degree (Kim et al., 2008).
Hypothesis 3
performance
today's economy customer service is very key in gaining competitive advantage for
2003). Research has shown year after year that, customer retention is becoming
benefits include, cost reduction, salvation of time, increase in profits and market share
companies benefit from high quality services. When the environment is highly
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2.15 Concept of Mediation
Relations between variables are regularly more complicated than basic bivariate
relations between an indicator and a paradigm. Instead these relations might be altered
by, or educated by, the expansion of a third variable in the research design. Examples
The mediation model offers a clarification for how, or why, two variables are connected,
Path diagram for the single-mediator model. Note. X= the independent variable, Y=
the dependent variable, and M= the mediating variable. The mediation model
decomposes the total effect of X on Y (c), into two parts: the indirect effect of X on
Y, quantified by ab (the product of a and b), and the direct effect of X on Y with the
Baron and Kenny (1986) laid out several requirements that must be met to form a true
mediation relationship.
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Step 1:
Conduct a simple regression analysis with X predicting Y to test for path c alone.
Regress the dependent variable on the independent variable to confirm that the
Step 2:
Conduct a simple regression analysis with X predicting M to test for path a. Regress
the mediator on the independent variable to confirm that the independent variable is a
significant predictor of the mediator. If the mediator is not associated with the
Step 3:
path b alone. Regress the mediating variable on the independent variable to confirm
Step 4:
dependent variable on both the mediator and independent variable to confirm that the
nonsignificant.
The purpose of Steps 1-3 is to establish that zero-order relationships among the
usually conclude that mediation is not possible or likely (although this is not always
true; see MacKinnon, Fairchild, & Fritz, 2007). Assuming there are significant
relationships from Steps 1 through 3, one proceeds to Step 4. In the Step 4 model,
29
some form of mediation is supported if the effect of M (path b) remains significant
supports full mediation. If X is still significant (i.e., both X and M both significantly
variable that, in turn, influences a third variable. The interceding variable, M, is the
Paths a and b are called direct impacts. The mediational impact, in which X leads to Y
through M, is known as the indirect impact. The indirect impact represents the
MacKinnon et al. (1998) and MacKinnon and Lockwood (2001) demonstrated that
tests for the mediated effect in light of normal hypothesis can yield mistaken
confidence limits and significant tests, notwithstanding, as the result of two ordinarily
conveyed variables is not itself regularly appropriated. Alternative tests taking into
variables are accessible and have been proven to beat customary techniques
The purpose of Steps 1-3 is to establish that zero-order relationships among the
usually conclude that mediation is not possible or likely (although this is not always
true; see MacKinnon, Fairchild, & Fritz, 2007). Assuming there are significant
relationships from Steps 1 through 3, one proceeds to Step 4. In the Step 4 model,
30
supports full mediation. If X is still significant (i.e., both X and M both significantly
Branding means more than establishing the name for a company or for a product line.
Branding is a long-term state of mind that requires the management of the company’s
A brand is not just a simple participant on a market, it creates and manages the market
through a vision of what the product category should be (Kapferer, 2008). According
primary reason that customers differentiate company from its competitors. So, it is
clearer to state that business success is due to the good customer service, in other
words if the customer service of any organization increase, the growth of the
organization increase in terms of sales growth, profit, brand equity and employees
growth. Since branding and customer service both have significant importance to
administering drugs, and oversee employers and workers and different customer
31
For Ghana, the pharmaceutical industry contains makers of medicines, wholesalers,
Management (2003), the pharmaceutical business sector in Ghana on the demand side
was worth around 90 million United States dollars (US$) in the year 2001. The span
be of the magnitude of US$300 million regarding sales for both locally and imported
wholesale market in the year 2008. They demonstrated that around 150 organizations
they offer these items to local wholesalers in view of their own systems. Seiter and
active drugs import and conveyance is somewhere around 200 and 300.
Given the modestly high financial development of Ghana in the course of the most
recent 25 years, the local pharmaceutical business sector has turned out to be
progressively appealing for both wholesale and retail suppliers. Local producers
represent around 30% of the market share with the rest of the 70% share supplied
mostly by Indian and Chinese pharmaceutical firms (Buabeng, 2010; Seiter and
Gyansa-Lutterodt, 2009).
advantage in today’s service economy, in addition to customers who are satisfied tend
to return for future business and sometimes assist in marketing service organization
through word-of-mouth (Areni, 2003). Previous studies has indicated that branding
32
plays a significant role in the performance of an organization. Therefore this study
seeks to introduce a mediator, customer service, and find out the impact it will make
In the study, Customer service is the mediating variable, whiles branding and
Hypothesis 1
Hypothesis 2
Hypothesis 3
performance
Hypothesis 4
relationship
33
Figure 2.2 Conceptual Framework
34
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Introduction
This chapter focuses more on the methodology used in gathering data for study and a
processes followed in order to conduct this research. The population, sample size and
details.
situation (Mcnabb, 2002). Descriptive research design involves large samples which
are used to give descriptions of an event or define attitudes, opinions or behaviors that
how customer service plays a mediating role between branding and performance.
Both quantitative and qualitative methodology were adopted the collection of data.
Quantitative methods were used because it was possible to collect some numerical
data for analysis and to help answer research questions and meet the objectives of the
Also, some of the data were not possible to collect numerically, therefore qualitative
According to Saunders et al., (2007), population is defined as the full set of cases
35
from which a sample is taken. The study was limited to customers of Ernest Chemist
Ghana and have built their brand and customer base of the years.
Data was gathered from these primary sources of respondents, that is, customers of
& Teddlie, 2003). Convenience sampling technique was used in selecting the sample
of customers. This type of nonprobability sampling involves the sample being drawn
from that part of the population which is close to hand (Tashakkori & Teddlie, 2003).
In order to select an appropriate sample size, Slovin’s (1973) sampling technique was
assumed. The formula is presented as; n = N/ [1+N (e) 2] (where n = sample size; N =
sample frame; and e = margin of error/ confidence level). From the above, population
The sample size used for the customers was two hundred and thirty (230)
36
variables. This study made used of both primary and secondary sources of data.
Secondary data refers to data that was collected by someone other than the user
(Schutt, 2006). Common sources of secondary data for social science include
and data that was originally collected for other research purposes. Primary data, by
The primary data were those that were obtained using questionnaires. Secondary
sources were those collected published documents, articles, internet sources and the
company’s records. The questionnaires were designed for the customers of the
pharmacy.
3.5.1 Questionnaires
prompts for the purpose of gathering information from respondents (Dillman, Smyth
and Christian, 2014). The questionnaires were structured in accordance with the
objectives of the study. The questions were both closed ended and open ended. The
questionnaire was divided into sections. The first section collected the demographics
data of the respondents, whiles the remaining sections were divided accordingly into
each objective. The questionnaires were handed personally to the respondents by the
researcher.
The Statistical Package for Social Sciences (SPSS) and STATA were the statistical
tool used in analyzing primary data gathered from the field. Furthermore, descriptive
statistics such as frequency distribution tables, charts, and graphs were used to
identify results collected from the field (O'Neil and Schutt, 2014). Pearson correlation
37
was used in analyzing the relationships between the variables whiles linear regression
The variables in the questionnaire was tested using the Cronbach’s Alpha for
reliability. In analyzing data collected from the respondents on the topic under
discussion, the researcher test internal consistency among the variables used for the
study. This is to enable the study to be reliable hence the use of cronbach alpha.
Devellis (2003) believed that the cronbach alpha coefficient should be above 0.7.
Cronbach alpha values above 0.7 are acceptable and values that are above 0.8 are
preferable.
38
CHAPTER FOUR
4.1 Introduction
This section highlights the results and findings of the study conducted. A total of two
hundred and thirty customers of Ernest Chemist were sampled for the study. The data
collection instrument used were questionnaires. Out of the total sample of two
hundred and thirty, one hundred and ninety five responded, hence giving the response
rate of 84.8%.
Kumasi in this study included gender, Age, Level of Education and employment
level.
39
Table 4.2 Demographics (N=195)
Frequency Percent
GENDER
Male 86 44.1
Female 109 55.9
AGE
18-30 32 16.4
31-40 64 32.8
41-55 68 34.9
56 and above 31 15.9
EDUCATION
Basic Education 33 16.9
Secondary Education 62 31.8
Tertiary 58 29.7
Non Formal 42 21.5
EMPLOYMENT
Unemployed 36 18.5
Employed 151 77.4
Retired 8 4.1
Source: Field Survey (2016)
From the table above, it can be seen that the female respondents were one hundred
and nine, representing 55.9% of the total population, the males made up a total of
eighty six (86) representing 44.1%. This illustrates that more of Ernest Chemist’s
customers are females The ages ranged between 41-55 recorded the highest number of
respondents which was sixty eight representing 34.9%. The next highest age was 31-
40 years recording sixty-four representing 32.58%. 18-30 years and 56 and above
recorded the lowest of thirty two and thirty one respectively representing 16.4% and
15.9% respectively.
29.7% had tertiary education. Respondents who had no formal education represented
21.5% whiles those who had basic education represented 16.9%. Concerning the
employment level of respondents, 77.4% were employed, whiles 18.5% and 4.1%
40
These demographic characteristics are a reflection of the customer base of Ernest
Chemist. This information can be considered when the company is planning activities
4.3 Reliability
In analyzing data collected from the respondents on the topic under discussion, the
researcher test internal consistency among the variables used for the study. This is to
enable the study to be reliable hence the use of cronbach alpha. Devellis (2003)
believed that the cronbach alpha coefficient should be above 0.7. Cronbach alpha
values above 0.7 are acceptable and values that are above 0.8 are preferable.
The respondents were asked to rate the brand, customer service and organizational
41
Table 4.4 Descriptive Summary
Variable Obs Mean Std. Dev. Min Max
Branding 195 4.1754 .418403 3.2 4.8
Customer 195 4.3477 .2435399 3.8 4.8
Organizational 195 2.2753 .431878 2 3
service
Source: Field Survey (2016)
performance
From table 4.4, the mean data of the variables were analyzed. Branding obtained a
mean score of 4.18 which is on a higher side. The items measured were the perceived
quality, the awareness of the brand, the brand association and the loyalty of the brand
by the customers. This indicates that the customers of Ernest Chemist have a high
perception towards the brand. Customers rate the brand of the pharmacy very high
and thereby giving the impression that the Brand of Ernest Chemist is high.
Customers were asked to rate the perceived quality of the products of Ernest
According to Chandler and Owen (2002) brands that are, in a genuine sense, effective
The mean for the customer service activities of Ernest Chemist recorded a score of
4.35. This indicates that customers of Ernest Chemist rate the customer service
activities very high. The items measured were divided into two sections. One section
looked at the rating of the pharmacy in terms of its organization. This included the
cleanliness of the pharmacy, the comfort and convenience of the waiting areas and
also the length of time one had to wait in order to be served. The second section
looked at the rating of the service provided by the staff or pharmacist of the
42
provision of efficient service, and the service received. This means that the company
takes its customers seriously thereby putting measures in place that would make the
customers satisfied and also meet their needs. This attests to the research done by
Tlapana (2009) indicating that in recent times customers demand more than ever even to
the extent that operators in the retail industry have to execute tasks in a timely manner and
Customers were asked to rate the performance of the company and the responses
recorded a mean score of 2.28. This is on a higher note, meaning that in the eyes of
customers, the company’s performance is rated high. The statement was posed in such
a way that respondents would rate the performance of the organization. Even though it
43
4.4 Effect of Corporate Branding on Organizational Performance
performance
Regression analysis was done to test the hypothesis. The results are indicated below in
Table 4.5
From the analysis conducted, the table indicates that branding and organizational
performance. This can be attributed to the high rating of the brand of Ernest Chemist
customers. This attests to the research done by Schuiling and Moss (2004) that a high
increase sales and improved organizational performance. That is why Blackett (2005),
in his study mentioned that pharmaceutical organizations have had the need to grasp
marketing and branding strategies to a more prominent degree than they have been
44
4.5 Effect of Customer service on Corporate Branding
Coefficients Coefficients
From table 4.5, customer service and branding are significantly related (P= -0.052; p-
service. According to the analysis customer service and branding are negatively
service of the organization. This may indicate that as companies focus more on
improving upon their brand, they may ignore their customer service activities and thus
reduce their customer service activities and vice versa. However according to Kim et
al (2008), a high level of brand would enhance customer’s satisfaction and loyalty
degree. Even though the company might have been doing well in its branding
activities, it is likely that it is rather losing focus on its customer service activities. For
mediation to take place the independent variable must be a significant predictor of the
45
4.6 Effect of Customer Service on Organizational Performance
performance
An analysis was done in order to determine the relationship between customer service
The table above indicates a positive relationship between customer service and
consistent good customer service can be challenging even if companies benefit from
high quality services. When the environment is highly competitive, companies must
satisfaction and also retain their profitable customers, thus improving the performance
include, cost reduction, salvation of time, increase in profits and market share. (Areni,
2003)
46
4.7 Mediating Effect of Customer Service on Branding and Organizational
Performance Relationship.
Unstandardized Standardized
Coefficients Coefficients
Model t Sig.
B Std. Error Beta
Organizational Performance
(Model 1; P=0.692, p-value <0.001). In model 2, it can be seen that customer service
<0.001) Model 3 also shows a significant relationship between customer service and
impacted organizational performance but there was a reduction in the impact (Model
47
exist, the independent variable must be a significant predictor of the dependent
variable, the independent variable must be a significant predictor of the mediator and
the mediator and independent variable is to confirm that the mediator is a significant
predictor of the dependent variable. According to the analysis done, all the conditions
necessary for mediation to take place have occurred. The study revealed that customer
performance.
customer service acting as a mediator does not make a greater impact. This indicates
that there are other factors that affect the performance of an organization.
Organizations must therefore not ignore the customer service activities in addition to
enhanced organizational performance. This was also supported by Asree et al. (2010)
who stated that vision, integrity, openness, dedication, and creativity among leaders
ensure that all employees succeed and that organizations perform better. Another
4.8 Summary
This study explores customer service as a mediating variable between branding and
organizational performance, following the four steps used by Baron and Kenny in
1986 to establish mediation. In the first step, the results show that branding is
48
second step, we found that branding significantly impacted with customer service (P=
-0.052 R=0.02; p-value<0.01). In the third step, we observed that customer service
affects organizational performance (P= 0.775; p-value<0.001). In the fourth and final
step, when the mediator Customer service was introduced into the equation between
variable in this study. Study conducted by Schneider et al (2003), Asree et al. (2010)
and Schneider et al (2003) all revealed that leadership competencies and employee all
49
CHAPTER FIVE
5.1 Introduction
the study as it shows they have a strong positive and significant relationship. The new
finding of this thesis is the mediating role of customer service plays in the
performance of the organization. The impact reveals a partial mediation. Below is the
The results indicated that branding and organizational performance are significantly
and positively correlated (P=0.692; p<0.01). However R square revealed that a unit
performance.
further shows that branding negatively impact on customer service. According to the
branding activities may lead to a reduction in the customer service of the organization.
50
5.2.4 Effect of Customer Service on Organizational Performance
value<0.001). From the test, customer service and organizational performance are
This suggests that customer service partially mediates the relationship between
This has proved that there exists mediation in the model which shows that customer
This indicates the presence of other factors that might affect organizational
5.3 Conclusion
From the study conducted, it can be seen that both branding and customer service
developing their brand and also putting the customer first in their activities are likely
in improving upon the branding activities of the firm as it goes a long way to affect
51
5.4 Recommendations
As part of the recommendations for this study, the following can be looked at:
Firms must ensure that they improve upon their branding experience for
Companies must ensure that they put in measures to ensure that their customer
Firms must improve upon their branding activities whiles strengthening their
good brand goes a long way to improve upon the performance of organizations
organizational performance.
performance.
Further research can be conducted to find the mediating role leadership competencies
performance.
52
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63
APPENDIX
SCHOOL OF BUSINESS
the Mediating role of Customer service. It would be very much appreciated if you
could assist us through the provision of answers to the questions below. Each
question is followed by a list of alternatives to choose from. Please tick the box and
write where appropriate. All information provided is strictly for academic purposes
BIOGRAPHIC DATA
3. Educational Background
Basic Education Secondary Education Tertiary
4. Employment status
64
B) BRANDING
How do you rate the branding activities of this pharmacy? Please tick where
appropriate.
Very Low Neutral High Very
low High
Perceived Quality
5. I trust the quality of products from this pharmacy
6. Products from this pharmacy would be of very good
quality
7. Products from this pharmacy offer excellent features
Brand Awareness
8. Some characteristics of this pharmacy come to my
mind quickly
9.I can recognize this pharmacy quickly among other
competing brands
65
C) ORGANISATIONAL PERFORMANCE
………………………………………………………………………………………
………………………………………………………………………………………
D) CUSTOMER SERVICE
23. Why did you visit this pharmacy today? To collect a prescription for:
24. How satisfied were you with the time it took to provide your prescription and/or
Thinking about any previous visits as well as todays, how would you rate the
pharmacy on the following factors? (Please tick where appropriate)
Very Fairly Neutral Fairly Very
poor poor good good
25) The cleanliness of the pharmacy
66
Including any previous visits to this pharmacy, how would you rate the
pharmacist and the other staff who work there? (Please tick where appropriate)
Very Fairly Neutral Fairly Very
pharmacist
35. Which of the following best describes how you use this pharmacy?
36. Any suggestions on how the pharmacy can improve your experience?
………………………………………………………………………………………
………………………………………………………………………………………
THANK YOU
67