EFFECTS OF CUSTOMER RELATIONSHIP MANAGEMANT

PRACTICE ON CUSTOMER SATSFACTION: THE CASE OF

HARAR BREWERY SHARE COMPANY

MBA THESIS

ASMELASH HAILEMARIAM TEKLEHAIMANOT

SEPTEMBER 2017
HARAMAYA UNIVERSITY, HARAMAYA
EFFECTS OF CUSTOMERRELATIONSP MANAGEMANT PRACTICE
ON CUSTOMER SATSFACTION: THE CASE OF HARAR BREWERY
SHARE COMPANY

A Thesis Submitted to the Department of Management,

Postgraduate Program Directorate
HARAMAYA UNIVERSITY

In Partial Fulfillment of the Requirements for the Degree of

MASTER OF BUSINESS ADMINISTRATION

Asmelash Hailemariam

September 2017
Haramaya University, Haramaya
ii
 HARAMAYA UNIVERSITY
POSTGRADUATE PROGRAM DIRECTORATE

As thesis research advisor, I hereby certify that I have read and evaluated this thesis prepared,
under my guidance, by Asmelash Hailemariam, entitled. “Impact Of customer relationship
management on organizational performance’’: The Case of Harar Brewery Share Company, I
recommend that it should be submitted as fulfilling the Thesis requirement.
V.Satish Kumar (PhD) ________________ _____________________
Major Advisor Signature Date

As members of the Board Examiners of the Final MBA Thesis Open Defense Examination, we
certify that we have read and evaluated the thesis prepared by Asmelash Hailemariam and
examined the candidate. We recommend that the thesis be accepted as fulfilling the Thesis
requirement for the degree of Master of Business Administration (MBA).

–––––––––––––––––––––––––––– ––––––––––––––––––– ––––––––––––––––––––

Chairperson Signature Date

–––––––––––––––––––––––––––– ––––––––––––––––––––– ––––––––––––––––––

Internal Examiner Signature Date

–––––––––––––––––––––––––– ––––––––––––––––––– ––––––––––––––––––––

External Examiner Signature Date

Final approval and acceptance of the Thesis is contingent up on the submission of its final
copy to the council of studies (CGS) through the candidate’s department or school graduate
committee (DGC or SGS).

iii
 DEDICATION

I dedicate this work for my Mather Bekelech Wodebo and for my families in general.

iv
 STATEMENT OF THE AUTHOR

I hereby declare that this thesis is my work and that all sources of materials used for this thesis
have been duly acknowledged. This thesis has been submitted in partial fulfillment of the
requirements for Degree of Master’s in MBA at Haramaya University and is deposited at the
University Library to be made available to students and to others these who want as reference.
I declare that this thesis is not submitted to any other institution anywhere for the award of any
academic degree, diploma, or certificate.

Brief quotations from this thesis are allowable without special permission provided that an
accurate acknowledgement of source is made. Requests for permission for extended quotation
from or reproduction of this manuscript in whole or in part may be granted by the Head of the
school of Business and Economics or the Dean of the School of Graduate Studies when the
proposed use of material is in the interests of scholarship. In all other instances, however,
permission must be obtained from the author.

Name of Candidate: Asmelash Hailemariam Signature …………….

Place: Haramaya University, Ethiopia
Date of Submission
Department of Management

v
 BIOGRAPHYIC SKETCH

The author was born in Shashemene town, West Arisi Zone, on August 4, 1987. He completed
his primary and junior secondary education in Kara Edu located in Shashamene. He attended
high school education at Shashemene Karara Edu from 2002-2003 and he joined Preparatory
School (2004-2005). Later on, he joined Addis Ababa University 2006 and graduated B.Sc in
business (marketing and sales management) in July, 2008. After his graduation, he worked in
Hadya Zone Gimbichu woreda in preparatory school as a teacher until he joined Haramaya
University for postgraduate study in 2015.

vi
 ACKNOWLEDGEMENT

First and foremost, I would like to express my deepest gratitude, special thanks and sincere
appreciation to Satish V. Kumar (PhD), my thesis advisor; he was with me from the start. He
was suggested research topics, helped me explore my areas of interest and commitments in
assisting me in shaping this research paper. Special thanks should also go to the department of
management for all its cooperation. I also would like to thanks employees and customers of
Harar Brewery Share Company for their cooperation during data collection. I am thankful to
my mother for her supportive, unconditional love, and prayers at all times were particularly
important, which provided a constant source of inspiration to me.

vii
 ACRONYMS AND ABRIVATIONS

CRM Customer Relation Management

CL Customer loyalty
CLV Customer Life Value
CS Customer Satisfaction
ERP Enterprise Resource Planning
HRM Human Resource management
IT Information Technology
ICT Information Communication Technology
KMO Kaiser Meyer Olkin
PRM Partner relation Management
RBV Resource Based Value
SFA Self Force Authority
TQM Total Quality Management
VIF Variance Inflation Factor
RBV Resource Based Value

viii
 TABLE OF CONTENTS
DEDICATION IV

STATEMENT OF THE AUTHOR V

BIOGRAPHYIC SKETCH VI

ACKNOWLEDGEMENT VII

ACRONYMS AND ABRIVATIONS VIII

TABLE OF CONTENTS IX

LISTOFTABLES XII

LIST OF FIGURES XIII

LIST OF TABLRS IN THE APPENDIX XIV

ABSTRACT XV

1. INTRODUCTION 1

1.1. Background of the Study 1

1.2. Statement of the Problem 3

1.3. Research Questions 4

1.4. Hypothesis of the Study 4

1.5. Objective of the Study 4

1.5.1. General Objective 4

1.5.2. Specific Objective 4

1.7. Significance of the Study 5

1.8. Limitation of the Study 5

1.9. Organization of the Paper 6

2. REVIEW OF RELATED LITERATURE 7

2.1. Customer Relationship Management 7

2.2. Evolution of Customer Relationship Management 8

ix
 2.4. The Importance of Customer Relationship Management 9

2.5. Categories of Customer Relation Management 10

2.5.1. Analytical Customer relation management 10

2.5.2 .Collaborative Customer Relation Management. 10

2.5.3. Operational Customer Relationship management. 11

2.6. Theoretical Framework for CRM Capability Dimension 11

2.6.1. Customer Orientation 12

2.6.2 Customer Service Quality 13

2.6.3. Potential (key) Customer Focus 13

2.6.4. Customer Relationalship Management Process 14

2.6.5. Customer Knowledge Management 14

2.6.6. Technology Based CRM 15

2.7. Customer Satisfaction 16

2.8. Implementing of Customer Relation Management 18

2.9. Empirical Findings on Customer Relationship Management 18

3. REASERCH METHODOLOGY 19

3.1. Description of Study Area 20

3.2. Research Design 20

3.4. Sampling Technique 21

3.5. Sample Size Determination 21

3.6. Methods of Data Collection Instrument and Procedure 22

3.7. Source of Data 22

3.8. Data Quality Issue 23

3.9. Data Analysis and Tools 23

3.9.1. Model Specification 23

x
4. DATA PERESENTATION ANALYSY AND INTERPRETATION 25

4.1. Descriptive Interpretation of Sample Respondents 25

4.1.1 Response Rate 25

4.1.2 Socio Demographic factors of the Respondents 25

4.1.3. Reliability Test 29

4.1.4. Validity Test 30

4.1.5. Sampling Error 31

4.2. Ordinary logistic Regression Model Interpretation 32

4.2.1. Test of Multi-Collinearity 33

4.2.2. Chi-Squire Test 34

4.2.4. Goodness of Fit 36

4.2.5. Pseudo R-Square (R2) 36

4.2. 6. Test of Parallels Lines 37

4.3. Coefficient Interpretation Exp (ß) 38

4.4. Analysis for Open-ended Questions 39

4.5. Summary of Hypothesis Testing 40

5. SUMMARY, CONCLUSION AND RECOMMENDATION 43

5.1. Summary 43

5.2. Conclusion 44

5.3. Recommendation 46

6. REFERENCES 48

7. APPENDIX 59

xi
 LISTOFTABLES
Table Page
1.Response rate on questionnaire 28
2. Response rate on questionnaires. 36
3. Gender of respondent 36
4.Age of respondents 37
5. Working Experience of Respondents 37
6. Education Level of Respondents 38
7.KMO and Bartlett's Test 39
8.Descriptive Statistics and Scale Reliability 39
9.FactorAnalysis 41
10.Multi- Collinearity Test 42
11.Test of Controlled Variables 42
12.Model Fitting Information 44
13.Goodness of fit 46
14.Presoud R-Squire 47
15.Test of Parallel Line 47
16.Explanatory Variables Associated with Organization's Performance 48
17. Summary of Hypothesis 49

xii
 LIST OF FIGURES
Figure Page
1.Theoritical frame work 28
2.Age of Employees respondents of Harar Brewery Share Company 43
3.Educational Qualification of Employees of Harar Brewery Share Company 45
4.Educational qualification of Customer respondents 56

xiii
 LIST OF TABLRS IN THE APPENDIX
Appendix Table Page
1.Reliability Testing 72
2.Factor Loading Analysis 72
3.Non-Multy-Collinearity Test 73
4.Parameter Estimator of Customer Response 74
5.Prameter Estimetor of Employees response 78

xiv
 IMPACT P OF CUSTOMER RELATIONSIP MANAGEMENT PRACTICE
ON ORGANIZTIONAL PERFORMANCE: THE CASE OF HARAR
BREWERY SHARE COMPAY
ABSTRACT

The study specifically assessed the effect of customer relationship management on the
Customer satisfaction (the case of Harar Brewery Share Company. The objectives of the study
were to examine the effect of customer relationship management on customer satisfaction (The
case of Harar Brewery Share Company) this study was used Conveniences sampling
technique, 224 sample size has taken from a total population. The statistical population of this
study includes employees and Hotels (Customers) of Harar Brewery Share Company .In order
to collect data self administrated questionnaire has been used. The Validity of this
questionnaire has examined through KMO-Bartlett coefficients; this value is 0.83 for this
questionnaire that confirms its validity. Crnobach’s alpha coefficient has been used to
examine and confirm its reliability, that value was 0.90 for questionnaire that confirms its
reliability. In order to test Hypotheses and analysis the data ordinal logistic regression model
has been used in SPSS statistical software. However, empirical evidence shows to the effect
of CRM on customer satisfaction. The study proposes six dimensions of CRM
capabilities Customer orientation, customer service quality, potential customer focus, CRM
process CRM knowledge management, and CRM based technology. Data used to validate the
research mode were collected through closed and open ended questions. Descriptive and
infrtail statistics was used to test the research hypotheses. All CRM proposed dimensions
showed significant link to customer satisfaction. However, when all effect was considered
simultaneously, CRM organization emerged as the only significant predictor of customer
satisfaction. According to Pseudo R2 Statistical measures the model shows that 77.2% of
variance on effect of customer relation management on customer satisfaction with six
independent variables. Therefore the model shows to predict 22.8% other variables to
construct future researches.

Keywords: Customer relationship management, customer orientation, customer service

Quality, CRM technology.

xv
 1. INTRODUCTION

1.1. Background of the Study

Today’s competitive and turbulent environment the number of competitors and intensity of
competition is amplifying. As a result, the power is shifting towards the customers. Customers
are becoming the focal point and organizations are trying to satisfy the needs of their customer
through customized production with the aim of retaining the customer and sustain the long
term and flourishing relationship with their customers. (Wu et al., 2012).

The ultimate objective of customer relationship management is to better cater the customers
by knowing them and creating customer loyalty emphasized that "CRM is a relationship
orientation customer retention and superior customer value created through process
management” Customer relationship management is also known as managerial approach
which works on customer driven strategy in which different information system
provide all the necessary information which ultimately leads to superior customer satisfaction
and loyalty( Ryals and Knox ,2001)

Entirely, customer relationship management is a managerial approach which has recently

become one of the most debatable issues in the business field. It is value stating that customer
relationship management is mostly based on the belief that establishing a sustainable
relationship with customer is the basis for obtaining loyal customers who are much more
profitable than non loyal. In this concern, the successful implementation of CRM philosophy
were of great benefit to the organizations, adopting it, such organizations can secure the
benefit of increasing sales through better market segregation, modifying products and services,
attaining higher quality products, gaining access to information and employee satisfaction, and
above all, warranting ongoing customer-retention and loyalty (Verma and Chandhuri,2009).

Chaston et al. (2004) find empirical support that the adoption of customer relationship
management versus transactional marketing orientation has influence on the market
performance of small accountancy practices. Parvatiyar and Sheth (2001) consider CRM to
be ongoing process be the ongoing process of engaging in cooperative and collaborative
 2

activities and programs with immediate and end-user customers to create or enhance mutual
economic value at reduced cost. Badrinarayanan (2005) noted that the phenomenon described
by this concept is strongly supported by on-going trends in modern business. Ndubisi (2004)
reported that more and more firms are capitalizing on strong firm-customer relationship to
gain invaluable information on how best to serve customers and keep them from defecting to
competing brands. Hence, customer relationship building creates mutual rewards which
benefit both the firm and the customer. By building relationship with customers, an
organization can also gain quality sources of marketing intelligence for better planning of
marketing strategy (Eisingerich and Bell, 2006).

CRM is the process that addresses all aspect of identifying customers, creating customer
knowledge, building customer relationship and shaping their perception of the organization
and its products. In order to have a more efficiently-managed customer relationship, CRM
focuses on effectively turning information into intelligent business knowledge. That
information can come from anywhere inside or outside the firm. This requires successful
integration of multiple databases and technologies such as the internet, call centers, sales force
automation and data warehousing CRM integrates sales, marketing services, resources
planning and supply chain management through business process automation, technology
solutions, and information resources to maximize each customer’s contact. But all these
activities need to be used in combination. It is an enterprise approach to understanding and
influencing customer behavior through meaningful communications in order to improve
customer satisfaction (John and Fredrick, 2012).

Several studies have been carried out to examine the effect of customer relationship on
Customer satisfaction. Some studies investigate the contribution of IT to a CRM program and
then probe whether superior CRM capabilities are a robust indicator of customer satisfaction
Other studies conceptualize a construct for the CRM process and its dimension, next
operationalize and validate the construct, and finally investigate the organizational
performance consequence of implementing CRM process (Reinartz et al., 2004).However
,only few studies on the impact of CRM practice on performance in the context of under
developed nations have been carried out illustrated that customer relationship management is
an effective tool for achieving positive organizational performance and which reflects an
 3

increase in profit, customer satisfaction, goodwill better product and service delivery
(Thompson ,2008).As stated by Blery and Michalakopoulos (2006) CRM evolved from
business processes such as relationship marketing and the increased emphasis on improved
customer retention through the effective management of customer relationships. Thus, if CRM
practices are conceived and implemented properly, they will enable companies to retain
customers for life, get maximum value out of each customer and generate exemplary customer
bonding (Tamilarasan, 2011). Through CRM practices retaining an existing customer has
paramount importance for Brewery industry, because, the cost of winning a new customer is
five times higher than that of maintaining an existing customer (Chang, and Rosenberg, 2010)

1.2. Statement of the Problem

As long as the main target of a business company is to satisfy the needs and wants of
customers which will direct it to increase customer satisfaction. This indicates that without the
existence of customers’ relationship business activities will be ineffectual. Business owners
often concentrate on the improvement of their products; this is one of the basic features of old
theory of the production concept. Often they ignore their customer care and relationship as a
result, many of their customers shift their purchasing interests to rival business organization
who can serve them better. The problem here is that they fail to understand that customers‟
value, care and concern is far above the product quality. So organizations tend to try their best
as much as possible to retain their customers and even attract more. CRM is a management
approach that enables organizations to identify, attract, and increase satisfaction of profitable
customers through improved relationship management (Hobby and Ramkelawon, 2010).

Successful customer relationship management focuses on understanding the needs and desires
of the customers and is achieved by placing these needs at the heart of the business by
integrating them with the organization's strategy, people, technology and business processes
(Pritesh et al., 2010).Segmentation of customers based on customer profile and customer life-
cycle stage.(Mylonakis and Lindgreen. 2005) have conducted on CRM practice in some
service providing organizations like banks in abroad countries but there is no research
conducted on CRM effect on customer satisfaction in beverage manufacturing industry
 4

especially in brewery industry. Therefore this study aims to examine CRM effect on customer
satisfaction particularly in brewery Share Company with the following research questions.

1.3. Research Questions

1.To what extent does customer orientation affect level of customer satisfaction in the
organization?
2. How does a customer service quality affect customer satisfaction?
3. What is a comparative impact of CRM process on customer satisfaction?
4. To what extent does potential (key) customer focus, knowledge management, and CRM
based technology can influence customer satisfaction?

1.4. Hypothesis of the Study

H1. Customer orientation has positive and significant effect on customer satisfaction.
H2.Customer service quality has positive and significant effect on customer satisfaction.
H3.Potential customers focus positively and significantly influence customer satisfaction
H4. Customer knowledge management has positive influence on customer satisfaction.
H5.Customer relation management process positively influences on customer satisfaction.
H6.Technology based CRM has positive and significant influence on customer satisfaction.

1.5. Objective of the Study

1.5.1. General Objective

The main objective of the study was to analyze the effect of customer relation management
practice on customer satisfaction, the case of Harar Brewery Share Company

1.5.2. Specific Objective

The research has the following specific objectives

1. To assess customer orientation towards the company’s customer relationship management

practice.
 5

2. To assess customer service quality of the Harar Brewery Share Company how it affects
customer satisfaction.
3. To analyze customer relation management process and how it affect to customer
satisfaction.
4. To identify the relative influence of CRM (potential customer focus, knowledge
management, CRM based technology) on customer satisfaction.

1.6. Scope of the study

This research work focuses on the effect of customer relationship management on customer
satisfaction in Harar Brewery Share Company in Harar city. A good CRM system is very vital
and of utmost importance in every business organizations, but for the purpose of this research,
the concern of the researcher was focused on the Impact of customer relationship management
in Harar Brewery Share Company in Harar city.

1.7. Significance of the Study

The result of this study offers valuable inputs and directions for the brewery share company
management and other decision making bodies. The study also useful for policy makers and
practice and provides certain directions for future research and also gives direction for the
brewery share company to maintain the existing customer and attracting the new customer.

1.8. Limitation of the Study

In conducting out this research there was possible constraints which may occur which pose
little hindrance to the effective and successful completion of the project work by the
researcher. The study focused on assessing effect of customer relationship management
practice on customer satisfaction. The study constructed six variables that influence customer
satisfaction but, there are also variables which influence customer satisfaction. The variables
included in this study were, customer orientation, customer service quality, potential customer
focus, customer relation management process, customer knowledge management, technology
based customer relation management.These factors determine and explain 77.2% variance but,
 6

other variables not included on this study because 22.8% variance not included. Financial
constraint i.e., there was limited finance available in harnessing research materials.

1.9. Organization of the Paper

This study was organized in to five Chapters. Chapter one covers introduction, statement of
the problem, objective of the study, scope and, limitations of the study. Chapter two includes
related literature review and conceptual framework of the study. Chapter three provides
description of the study area and methodology. Chapter four includes data presentation,
analysis and interpretation and chapter five deals with summary of findings, conclusion and
recommendation of the study.
 7

2. REVIEW OF RELATED LITERATURE

2.1. Customer Relationship Management

CRM is a philosophy that encompasses the strategies, practices, and methodologies that an
organization follows when interacting with its customers, prospects and contacts (Dowling,
2002). It is a corporate level strategy that focuses on creating and maintaining effective
relationships with customers to increase their satisfaction and loyalty with the organization.
The objectives of CRM are to enhance profitability, income, and customer satisfaction.
Therefore, CRM is mainly a strategic business and process issue rather than a technical issue
(Dowling, 2002).CRM have been increasingly adopted as a core business strategy and
invested in heavily by corporations (Lindgreen et al., 2006).

Many studies are focused on components of CRM strategy, such as the link between
satisfaction and business performance (Kamakura et al. 2002), the link between customer
loyalty and profitability (Reinartz and Kumar 2000), customer profitability heterogeneity
(Niraj Gupta and Narasimhan, 2001) and customer loyalty programs (Verhoef, 2003). A
strategic approach of CRM is focused upon the development of a customer-centric business
culture dedicated to winning and keeping customers by creating and delivering value better
than competitors’ centric marketing towards a customer-centric approach (Arnett and
Badrinarayanan, 2005).

Today, Brewery industries have realized the importance of CRM and its ability to retain
existing customers and thereby maximization of customer lifetime value (Tamilarasan, 2011).
Rouholamini and Venkatesh (2011) says the relationship between Brewery Share Company
and CRM practices is such that nowadays it is almost impossible to think of the former
without the latter. This indicates that they are inseparable. It has been observed by Blery and
Michalakopoulos (2006) that CRM helped the brewery sector come closer to its customers and
emphasis was given to customers instead of sales (Rigby et al. 2003)

Chang (2007) stated that CRM involves a concerted effort to improve customer identification,
acquisition, and retention in addition to this; it aims to improve customer satisfaction, boost
customer loyalty, and consequently increase revenues from existing customers. Thus, CRM
 8

involves new and advance marketing strategies which not only retain the existing customers
but also acquire new customers (Jasola and Kapoor, 2008).

One of the original big ideas in marketing is that for firms to stay in existence, they should not
focus on selling products or services but rather on fulfilling needs (Levitt, 1960 cited in
Building et al., 2005). To do this you need to know your customers well enough to determine
what kind of relationship they want to have (Rigby et al., 2003).Successful customer
relationship management focuses on understanding the needs and desires of the customers and
is achieved by placing these needs at the heart of the business by integrating them with the
organization's strategy, people, technology and business processes (Agarwal, 2009).

2.2. Evolution of Customer Relationship Management

The emergence of customer relationship management can be traced back from 1990 as opined
by many authors (Rababah et al., 2011). Almost all authors agreed that relationship
management (RM) is the origin of CRM. In addition to that, Parvatiyar and Sheth (2001)
assert that growing intermediation process is one among the factors that gave room for the
emergence of CRM. They further affirmed that, introduction of computer and
telecommunication technologies contributed a lot towards the development of CRM
(Parvatiyar and Sheth 2001).

2.3. The Major Challenges in Implementing CRM in Organization

CRM is a sound business strategy to identify the bank’s most profitable customers and
prospects, and devotes time and attention to expanding account relationship with those
customers through individualized marketing, reprising, discretionary decision making, and
customized service through the various sales channels that the bank uses. Despite many
benefits, CRM is exposed to various problems as discussed in the following lines (Chary and
Ramesh, 2012).

1. Building and maintaining a customer database require a large investment in computer

hardware, database software, analytical programmer communication links and skilled
personnel.
 9

2. It is difficult to collect the right data, especially to capture all the occasions of company
interactions with the individual customers.
3. The difficulty of getting everyone in the company to be customer-oriented and to use the
available information. Employees find it far easier to carry on with the traditional
transaction marketing than to practice CRM.
4. Some customers do not want a Relationship with the company and they may suspect that the
company has collected that much personal information about them.
5. Marketers must be concerned about customer attitudes towards privacy and security.

2.4. The Importance of Customer Relationship Management

The importance of CRM practices and their motives stem from the establishment of a client-
oriented management that, in turn, leads to the achievement of market competitive advantages
(Mylonakis, 2009). Blery (2006) mentioned some of the other benefits from the
implementation of CRM are: it reduced costs (one supplier with a long-term relationship),
decreased complexity (a common platform for all the industry decreased the need for
integration, offered one contact point and decreased the need for technical support) and
improved operations (increased employees’ capabilities, decreased the problems of
maintenance and support because of the unique platform).This research is focused in
marketing perspective(Agarwal 2009)

The benefit of CRM in marketing approach can describe here under. a relationship-based
marketing approach include: Over time: retail beer customers tend to increase their holding of
the other products from across the range of financial products available. Long-term customer
relation is more likely to become a referral source. The longer a relationship continues; the
better a brewery company can understand the customer and his/her needs & preferences, and
so greater the opportunity to tailor products and services and cross-sell the product / service
range. Customers in long-term relationships are more comfortable with the service, the
organization, methods and procedures (Usman, 2012).

The customer relationship management process is a continuum that does not just end when a
customer is won. Rather it should continue throughout the time that the customer will last in
 10

the organization. So with this in mind, Barnes (2002), once more gives a little explanation on
what the components of customer relationship management is; the customer is the only source
of the company’s present profit and future growth. However, a good customer, who provides
more profit with less resource, is always scarce because customers are knowledgeable and the
competition for them is fierce. Sometimes it is difficult to distinguish who the real customer is
because the buying decision is frequently a collaborative activity among participants of the
decision making process (Wyner, 1999)

2.5. Categories of Customer Relation Management

CRM application architecture must combine operational (transaction-oriented business process

management) technologies and analytical (data mart-centered business performance
management) technologies. Besides, the enterprise also needs to cater to the interaction needs
of its customers across multiple channels using various collaborative technologies. A balanced
CRM approach requires that all three sides of the equation be implemented to form the CRM
backbone Parvatiyar et al, (2001). CRM can be broadly categorized under three head.

2.5.1. Analytical Customer relation management

Analytical CRM is the use of customer data for analysis, modeling and evaluation to create a
mutually beneficial relationship between the company and the customer. CRM analytics
comprises all programming that analyzes data about an enterprise’s customers and presents it
so that better and quicker business decisions can be made. Almost every organization has
collected and stored a wealth of data about their customers, suppliers, and business partner, the
differentiating factor of a successful progressive enterprise is its ability to discover valuable
information hidden in this data and transform this data into knowledge. This involves
capturing, storing, extracting, processing, analysis and interpretation of customer data to the
corporate user (Parvatiyar et al, 2001).

2.5.2 .Collaborative Customer Relation Management.

Collaborative CRM refers to the strategies and technologies that enable multi-enterprise
business process integration and content management, with the goal of creating, growing, and
 11

retaining profitable networks of customer and partner relationships. It focuses on giving

visibility into enterprise sales, service, marketing, and product development to support
customers better. This is the application of collaborative services to facilitate interactions
between the customer and the organization. Examples are portals, partner relationship manage
ment (PRM) application (Parvatiyar et al, 2001).

2.5.3. Operational Customer Relationship management.

The goal here is to achieve the automation of horizontally integrated business processes
including customer touch points, point of sales, Enterprise Resource Planning (ERP), and the
legacy systems integration. While ERP forms the back office automation, CRM covers the
front office. Typical applications include sales force automation, call center automation,
channel automation, enterprise marketing automation and proposal generation. Operational
CRM is covered by customer-facing applications that integrate the front, back, and mobile
offices, including sales force automation, enterprise marketing automation, and customer
service support. Operational CRM is capable of integrating with financial and HR suites of
ERP, thus making it possible to have end-to-end functionality from lead management to order
tracking (Wyner 1999).

2.6. Theoretical Framework for CRM Capability Dimension

According to Langerak, and Peter, (2003) in marketing management the essence of customer
relationship management philosophy originates from three concepts. Those are:-customer
orientation, relationship marketing, and database marketing. Due to the advancement of
information communication technology, these three marketing views combined together in the
paradigm of CRM. However, CRM may be used to express different perspectives at different
hierarchical arrangement of management. For instance, at the tactical level of management
customer relationship management may be related to data-base marketing or electronic
marketing; at the strategic level, customer relationship management may be understood as
customer retention or partnering with customers whereas at the theoretical level, it may be
seen as developing research paradigm in marketing most often loosely associated to existing
perspectives (Peppers and Rogers, 2010)
 12

According to Sayed H (2011), CRM is a multidimensional construct consisting of four broad

behavioral components; those are: “potential customer focus, CRM organization, knowledge
management, CRM process and technology-based CRM”. Also he investigated the four CRM
behavioral dimensions on customer satisfaction in maintaining current customers, attracting
new customers, increasing market share, enhancing the standard of sales growth and adding
the net profit standard to sales. Dimension of CRM considers their performance in terms of
combining technology, appropriate handling of potential (key) customer service quality
customer orientation , customer knowledge management and organizational efficiency in
relation with customer satisfaction of the selected brewery share company(Kotler and
Armstrong, 2004)

2.6.1. Customer Orientation

Customer orientation refers to "the set of beliefs that puts the customer's interests in order to
develop a long term profitable organization" (Deshpande. 2010). Customer orientation is the
part of the organizational culture that provides implicit values and beliefs on which norms of
accepted behavior are based (Bentum and Stone, 2005). According to Roberts et al., (2005)
customer centricity is the first requirement for CRM readiness. Unlike transaction orientation,
a relationship orientation dominates the organizations mind-set, values, and norms and thus
influences all interactions with customers (Day, 2000).

Customer orientation is defined as "the cultural propensity of the organization to undertake

customer relationship management" (Jayachandran et al., 2005). Day and Van den Bulte
(2002) found that orientation has a positive effect on customer satisfaction and considered it as
the discriminating factor of CRM capability leaders. Results of Minami and Dawson (2008);
and Yilmaz et al. (2005) demonstrated that stronger customer orientation have a positive effect
on customer satisfaction. Sin et al. (2005), Soliman (2011), and Yim et al. (2004) found key
customer focus positively affect customer satisfaction. Jayachandran et al. (2005) found
that customer centric culture influences customer satisfaction indirectly through CRM
processes. Also customer orientation showed strong influence on CRM, which in turn affect
customer satisfaction (Garrido-Moreno and Padilla-Meléndez, 2011).
 13

2.6.2 Customer Service Quality

According to Gee et al. (2008) in attempt to understand the factors that induce customer
satisfaction is the concept of service quality is increasingly common in the literature. Studies
show that customer service quality has positive impact on customer satisfaction which directly
affects customer satisfaction and also has positive significant impact on customer satisfaction
and performance of the firm. Customer service quality could be implemented by a few
methods such as, meeting customer expectation of good service level and having good quality
service and products with reasonable price, handling, and the customer compliant about the
service (Hanley, 2008)

2.6.3. Potential (key) Customer Focus

According to Shelth et al., (2000); Vandermerwe, ( 2004), potential customer focus involves
an overall customer-centric focus and continuously delivering superior and added value
through customized offers to the key customers. In today’s business environments the ultimate
goal of any key customer focus is to achieve a deep customer relationship that makes an
organization a necessary partner to its most profitable customers. The overall company
understanding and support for key customer focus encourage sales force to foster long-term
customer relationships by offering more personalized services. Evelyn and Hamadallah (2006)
stated that firms are engaged in enough amounts of transactions with significantly diverse
customers in terms of their needs, preferences and expectations. (Armstrong and Kotler, 2004)

In order to reduce the CRM challenges, most of the firms have option to formal customer
relationship management programs. CRM programs are generally classified as either database
driven refers to recognizing profitable segments through statistical techniques or customer
needs-driven refers to the use of database to supply information that benefits in the
development and keep of long-term relationships with key customers., viewed that customer’s
needs-driven customer relationship management programs are common with firms that adopt
business-to-business marketing strategies because, customers-needs-driven customer
relationship management programs improves inter-firm relationships. In summary, key
customer focus can be considered as a function of customer relationship management of a
 14

retailer’s integrity as well as firms’ ability to perform their services, to keep its promises and
commitment and in general to do the right things’ consistently( Evelyn and Hamadallah 2006)

2.6.4. Customer Relationship Management Process

CRM processes are often studied as life time stage of customer relation, namely initiation,
maintenance, retention and termination (Ngai et al., 2009; Greve and Albers, 2006; Reinartz et
al., 2004).Recently more researches shifted attention to CRM knowledge management and
knowledge management process (Abdulalem et al., 2013; Garrido-Moreno and Padilla et
al.,2010; and Li, 2003). Fewer studies have investigated relational information processes in
the context of customer relationship management (Jayachndran et al. 2005) in Nonetheless,
the literature on market orientation (Jaworski et al., 2002). Marketing information use (Menon
Varadarajan, 1992) has long acknowledged the importance of marketing information
acquisition, dissemination and use on marketing performance.

According to Jayachandran et al., (2005) CRM process refers to all the routines related
managing customer information acquisition and dissemination, so as to insure long term and
effective. Ismail et al. (2007) reported a positive relationship between CRM information recipr
ocity, Capture, and use on one hand and organizational profitability on the other hand.
Jayachandran et al. (2005) found that CRM processes positively influence customer
satisfaction and retention. Information use processes are strong predictor of new product
performance, timeliness, and creativity. Customer analysis and customer responsiveness
behaviors positively influence marketing competence (Yim et al. 2004)

2.6.5. Customer Knowledge Management

According to Salomoun et al. (2005) in today’s competitive world, knowledge is well

throughout as one of the competitive factors in global economy. It is compulsory to think and
consider for a business firms in order to attract customer as another important factor in order
to come in today’s dynamic market successfully. Despite of this customer knowledge
management can be defined as the system of attaining, allocating, and increasing the customer
knowledge among employees for making profit to the organization and customers. With the
intention of improving the organizational productivity and value, assure from delivering
 15

required products and services to the customers and acquire their satisfaction, it is compulsory
to manage the organization’s knowledge about customers.

Accordingly, it can be decided that Knowledge management is an integrative part of CRM. In

business environment firms are encouraging towards the implement of customer relationship
management applications to trail customer behavior to gain understanding into customer
tastes, preferences and evolving needs CRM applications help firms to gather and use
customer knowledge through CRM applications in order to facilitate customer employees to
record relevant information about each customer transaction. Later information is taken from
employees can be administered and converted in to customer knowledge on the base of
information processing rules and organizational policies and business organization can
segment their stored customer knowledge management with customer to allow those
customers to serve themselves by defining the service and its delivery to suits their needs
(Mithas et al., 2005).

2.6.6. Technology Based CRM

According to Abbott et al., (2001) to measure the CRM performance successfully, relevant
and reliable customer data is necessary. Therefore, to accurately gather customer data
technology has a vital role in CRM in addition to firm intelligence (Boyle, 2004). Indeed, the
development and improvement of information technology provide the ability to gather,
investigate, and share customer information which will lead to a customer satisfaction,
customer loyalty and retaining customers (Bulter, 2000).

According to Yim et al., (2005) firms will be in the position to enhance prospecting, improve
communication and sales presentations, and able to customize their product configurations by
using appropriate customer relationship management technology for data collection and
distribution. CRM technology includes all the information systems used to support front office
functions (sales, customer service, and marketing) and back office applications that deal with
data integration and analysis (Jayachandran et al., 2005). Usually companies start with isolated
applications, and as the business scale grows, they face the challenge of integrating client
information which drives the adoption of CRM software packages (Mithas, Krishnan and
 16

Fornell, 2005). CRM focus on enhancing the interactions with customers through all contact
points. CRM can also be classified according to the level of IT employment into: non-IT
assisted CRM, IT-assisted CRM, IT-automated CRM, and integrated CRM (Stephaou,
Sarmaniotis and Stafyla, 2003). The direct and indirect effect of CRM technology on
satisfaction was investigated in numerous studies (Minami and Dawson, 2008) found that
CRM data warehousing and analytical data tools positively influence performance. They also
reported a positive influence of CRM implementation on customization activities and CRM
process mediates the effects of IT on customer satisfaction (Wu and Lu, 2012).

Day and Van den Bulte (2002) found that CRM database and customer IS has no effect on
relational performance. Similarly, CRM technology infrastructure showed no direct influence
on organizational performance (Garrido-Moreno and Padilla-Meléndez, 2011; Ray et al.,
2005; Yim et al., 2004). Researchers reported mixed results concerning the moderating impact
of CRM technology. Reinartz et al. (2004) reported that CRM technology had no moderating
effect on the relationship between CRM processes and satisfaction, while found that IT
capability moderates the influence of customer orientation on satisfaction. Based on the
previous discussion it can be concluded that CRM technology is linked to customer
satisfaction (Zhu and Nakata, 2007)

2.7. Customer Satisfaction

According to Hansemark and Albinsson (2004), the major goal of business organizations is
customer satisfaction, since customer satisfaction affects customer retention and companies’
market share, profitability, sales volume. However, customer satisfaction is a complex
construct which has been defined in various ways (Hair et al., 2003; Fournier et al. 1999)
Sheth and Sisodia, 2001). Customer satisfaction is defined as customer’s response to product
or service in terms of the extent to which consumption meets expectations”. Indeed, customer
satisfaction is crucial for successful application of the marketing concept (Hair et al.
2003).According to Mithas et al. (2005), it has been found that CRM are likely to have an
effect on customer satisfaction. This, in turn, has great implications on the economic
performance of the organization the effect of CRM on customer satisfaction is due to at
least three reasons. First, CRM enables firms to customize their offerings for each customer in
 17

order to suit their individual tastes by accumulating information across customer interactions
and by processing this information to discover hidden patterns. Because CRM helps firms
customize their offerings, this will enhance the perceived quality of products and services
from a customer’s point of view (Bolton et al., 2004).CRM applications indirectly impact
customer satisfaction through their effect on perceived quality. Second, CRM also enables
firms to promote the reliability of consumption experiences through facilitating the timely
accurate processing of customer orders and requests. An improved ability to customize and a
reduced variability of the consumption experience enhance perceived quality, which positively
influence customer satisfaction.

Finally, CRM also helps firms manage customer relationships more effectively across the
stages of relationship intention, maintenance, and termination (Reinartz et al., 2004). It can be
said that customer satisfaction is a major goal of business organization, since it affects
companys’ customer retention and companies’ performance (Hansemark and Albinsson,
2004). Therefore, it is highly recognized for its crucial role (Jamal and Naser, 2002). The
effective component which is the emotional component consist of emotions, such as
happiness, surprised and disappointments(Cronin et al.,2010) ) a number of surveys confirm
the general economic benefits of customer satisfaction, which can primarily attributed to the
positive correlation between customer satisfaction & organizational performance(Levit ,2011)
Fecikova (2004) stated that loyalty of customer is considered to be a function of satisfaction
by spending more on company products and services, via repeat purchasing and recommend
the organization to other customers. Various organizations mission statements and marketing
strategies are designed around the goal of increasing customer satisfaction. In implementing
customer relationship management, a firm pursues to establish and retain a long-term
relationship with customers based on increasing full customer satisfaction as opposed to
transaction-specific customer satisfaction (Fournier, 2012).

According to Sheth and Sisodia (2001) successful customer relationship management

implementation requires a committed organizational wide in order to focus on significant
customers in customized marketing efforts to fully realize and fulfill their needs and wants on
an enduring basis. The seller’s entire organizational structure should be centered on customers,
often with customer-focused teams designed to create fully satisfying customer experiences.
 18

Successful customer relationship management activities must cultivate customer satisfaction

by continuously adapting to the evolving needs and wants of customers (Stefanou et al., 2003)

2.8. Implementing of Customer Relation Management

A successful CRM strategy cannot be implemented by simply installing and integrating a

software package, a holistic approach is needed (Dowling, 2002). This approach may include
training of employees, a modification of business processes based on customers' needs and an
adoption of relevant IT systems including software and maybe hardware and usage of IT
services that enable the organization or company to follow its CRM strategy. CRM services
can even be the acquisition of additional hardware or CRM software licenses. The term itself
is meant to describe the whole business strategy or lack of one oriented on customer needs.
The main misconception of CRM is that it is only software, instead of a whole business
strategy. To be effective, the CRM process needs to be integrated end-to end across marketing,
sales, and customer service (Dimitriadis and Stevens, 2008)

2.9. Empirical Findings on Customer Relationship Management

Most of the research conducted on Customer Relationship Management is based on evidence

from majority of prior empirical studies that were done in developed countries. Here, in this
section a certain empirical findings conducted based on developed countries are reviewed.
According to Swaminathan, (2004), the association of customer relationship management and
its customer outcome has been done by considering banks, investment companies, insurance
companies and other firms as a sample study which characterized as high degree of
relationship orientation and thus well suited for testing CRM framework.

Research has been conducted on the fundamental role of customer relationship management
on customer knowledge and customers ‘satisfaction. On this research the necessary data was
gathered from experienced managers of information technology almost from 300 institutions
working in United States of America. The finding showed that the applications of CRM have a
positive impact as they contribute to improve the knowledge of the customer and enhance the
customer satisfaction (Mithas and Frow, 2005).
 19

The theoretical frame work below indicated involves six dimensions of CRM which include
customer orientation, potential customer focus, customer service quality, CRM process,
knowledge management, and technology based CRM. This frame work is built on previous
studies (Abdullateef et al., 2010; Chang et al., 2010). Acording to( Sin et al, 2005; Wu and Lu
, 2012) while therelationship between variables in this theoretical framework is based on RBV
theory which propose that organization having valuable resources can successfully
implement business strategy to create competitive advantage consequently improve customer
satisfaction (Barney and Delwyn, 2007).

Figure2.1Theoretical frame works.

Source: Adopted from previous studies (Abdullateef et al., 2010; Chang et al, 2010; Sin et al,
2005)
 20

3. REASERCH METHODOLOGY

3.1. Description of Study Area

Harar is the capital city of the regional government of Harary which is found in eastern part of
the country. Harar city lies at latitude and longitude of 900 36’N and 41º 52’E. The city is an
industrial center, home to several markets, it has a warm and dry climate with relatively low
level of precipitation .The mean annual temperature of the Harar city is about 25.9 0c and the
average maximum temperature is 32.8 0c. Based on the 2007 census conducted by Central
Statistical Agency (CSA) of Ethiopia, the different ethnic groups live in Harar city are Oromo
(56.4%), Amhara (22.7%), Harary (8.6%) and other ethnics. The religion with the most
believers in the city is Muslim with 69% Ethiopian Orthodox, 27.1%, Protestant3.4%, Catholic
0.3%, and 0.2% followers of other religions.

3.2. Research Design

This study used cross-sectional survey research design. The survey method was used in this
study because it is efficient in collecting large amount of information within a short time.
William (2004) expressed that survey design of research is more appropriate to gather reliable
data and survey design is a research design that provides quantitative or numeric description of
trends, attitudes, opinions of participants with the intent of generalizing from sampling to a
population (Creswell ,2009). Quantitative research design strategies were used. It was
enabling to assess effect of customer relationship management on influencing customer
satisfaction and challenges of the institution in order to enhance successful customer
satisfaction.

3.3. Study Population

All the items under consideration in any field of inquiry constitute a population.
Sekeran (2001) defines a population as “the entire group of people, events, or thing of interest
that the researcher wishes to investigate”. The target population for the study consisted of 510
Employees of Harar Brewery Share Company and hotels which are customers of Harar
 21

Brewery Share Company which are found in Harar city. Quite often, it was selected 224 only a
few items from the population for the study purposes.

3.4. Sampling Technique

The researcher was interested to explore the effects of CRM on customer satisfaction on Harar
Brewery Share Company. The researcher used purposive sampling design, purposively select
eight departments from Harar Brewery Share Company namely marketing, sales, production,
logistic, IT, management, HR & finance departments and Hotels (customers).

3.5. Sample Size Determination

This Study was used simplified formula provided by Yamane (1967) which was revised on
April 2009 and again reviewed on June 2012 the sample sizes was calculated at 95%
confidence level, and withn5% level of precision. From the total 278 population 122 samples
respondents was taken from the employees of Harar Brewery Share Company and from 232
(Hotels) customers of Harar Brewery Share Company which are found in Harar city 102 was

taken. n =

Where:-

n = the sample

N = the population size

e = sample error

Where n the sample size, N is the population size, and e is the level of error. By using this
formula at 95% confidence level and 5% level of error the sample size will be obtained as
follows.

n= 244
 22

Proportional sample size from each group was calculated by using the following formula:
Where: ni- sample size for employees of Harar Brewery Share Company and hotels which are
customers of Harar Brewery Share Company, Ni represents the number of employees in the
Harar Brewery Share Company, and Hotels which are customers of Harar Brewery Share
Company. N- (population size)the Total number of employees of Harar Brewery Share
Company and customers of Harar Brewery Share Company, n- the total sample accordingly,
the Table below shows the proportionate sampling for each group, based on above given
formula.

Table 3.1 Total population and sample size of respondents

Population Sample size
Marketing and sales department 120 53
Production, Logistic and IT department 87 38
Management, HR and finance department 71 31
Hotels (Customers)of Harar Brewery Share Company 232 102
Total 510 224

Source: own survey (2017)

3.6. Methods of Data Collection Instrument and Procedure

Methods of data collection depends on standard questionnaires Lee bee (2008) which was
prepared in the form of Likert five scales was appropriate for the study of effect of customer
relationship management practice dimension by modifying in the relation to the study. For the
purpose of data collection, the researcher used closed and open-ended questions. Two set of
questionnaires were used, for the Hotels (customers) of Harar Brewery Share Company and
for employee of Harar Brewery Share Company. The questions were clearly simplified and
structured in manner in order to avoid any ambiguity and technical details.

3.7. Source of Data

The study used both primary and secondary source of data. Primary data were collected
through closed-ended open ended questions in the form of Likert five scales from employees
 23

and (Hotels) customers of Harar Brewery Share Company. Secondary source of data used for
the study were books, published journals, articles and document analysis related to the study
were also used as a reference.

3.8. Data Quality Issue

In order to collect reliable data, the researcher designed the questionnaires through an
elaborate procedure which involves a series of revisions under the guidance of the advisors.
To check the validity and reliability, the questionnaire were used chi-square, Cronbach’s alpha
statistics and correlation statistics before administration.

3.9. Data Analysis and Tools

After the data were compiled, sorted, edited, classified and then entered into the SPSS soft
ware. Once data were collected, it was necessary to use statistical techniques to analyze the
information, as this study is quantitative in nature; data were analyzed using SPSS version 20
software. The statistical tools were aligned with the objectives of the research. Chi square was
chosen as the non-parametric statistical measure (Andy, 2006). From inferential statistics,
Ordinal logistic regression model were employed to develop functional relationship among the
independent variables and dependent variable. Ordinal regression were used because it is
appropriate method to show the relationship between ordinal response variables and regressors
that are rated on five point Likert scales (Liu, 2010).

3.9.1. Model Specification

Model specification can be defined as the exercise of formally stating a model i.e. the explicit
translation of theory into mathematical equations and involves using all the available relevant
theory research and information and developing a theoretical model. Likert scale questions are
importantly regressed through ordinal logistic regression (Gujarati, 2004). Gujarati (2004)
explains this issue as follow; frequently, in survey-type research the responses are on a Likert-
type scale, such as “Strongly disagree,” “Disagree”, “Neutral”, “Agree” and “Strongly agree”.
These are ordinal scales in that there is clear ranking among the categories. As a result, ordinal
logistic regression is the preferred logistic regression type in this study. The following models
 24

are developed for the purpose of running ordered or ordinal logistic regression that is
necessarily to test the impact of predictors on organizations performance.

Therefore,

Where Y is organizational performance

Where, j indexes the cut-off points for all categories (k) of the outcome of the variables. If
multiple explanatory variable are applied to the ordinal logistic regression model,
the coefficient ß1.ß2, ß3, ß4, ß5, and ß6 indicates the rate of change of impact of customer
relationship management as customer orientation customer service quality, potential customer
focus, customer relation management process, customer knowledge management, and
technology based customer relation management.

The function yi(x) is the link function that connects the systematic components (αj+ß) of the
liner model. The αj represents a separate intercept or threshold for each cumulative
probability.χ1, χ2, χ3 χ4, χ5, and χ6 are x’s column vector for the independent variables. The
threshold and regression coefficients are unknown parameters to be established by means of
maximum likelihood method (Bender and Banner., 2000).The ordinal logistic regression
model where deciding what explanatory variables have more effect on dependent variables and
choosing the link function that would good fit the model .Therefore the study was used
complimentary log-log link function depend on dependent variable out come.
 25

4. DATA PERESENTATION ANALYSY AND INTERPRETATION

4.1. Descriptive Interpretation of Sample Respondents

4.1.1 Response Rate

As indicated in the preceding chapter of this research study attempted to examine the effect of
customer relation management on customer satisfaction of Harar Brewery Share Company. A
total of 224 questionnaires were distributed to employees and customers of the company to
assess the effect of CRM on customer satisfaction. From 122 questionnaires distributed 100%
questionnaires were filled up and returned by the employees of Harar Brewery Share
Company and 102 questionnaires were distributed to Hotels (customers) of Harar Brewery
Share Company 102 (100%) were filled. This indicates that the Harar Brewery Share
Company employees and customers under study were committed to give information relevant
to the research were conducted.

Table.2.Response Rate on Questionnaire distributed to Customers and Employees of Brewery

Share Company.
Name of organization Questionnaires Questionnaires Response rate (%)
distributed responded
Harar Brewery Share 122 122 100
Company
Customers(hotels) 102 102 100
Total 224 224 100

4.1.2 Socio-demographic factors of the respondents

According to Table 3 out of total respondents of employees of Harar Brewery Share Company
83(68%) of them were males and 39(32%) were females. This depict that males were highly
dominating working positions within the organization. This supports the statement from other
researchers that in majority of business organization the number of men employees higher than
females (Ferdnand, 2001).
 26

Table.3. Gender of employees Respondents of Harar Brewery Share Company

Gender of employee Respondents

Frequency Percent
Male 83 68
Female 39 32
Total 122 100

The figure 2 below shows the general factors of the customer respondents of Harar Brewery
Share Company , 57(55.9%) were males and 45(44.1%) were females .This indicates that the
majority of customer respondents were males from this we can depict that female customer
respondents of Harar share company was relatively low compare to male customers .

55.9
60

50 44.1

40
Female
30
Male
20

10

0
Male Female

According to Table 4 below the age interval of respondents of Harar Brewery Share Company
85(69.7%) were found in the age interval of 18-30 years. 33(27%) were found in the age
interval of 31-40 years, the remaining 4(3.3%) were found in age interval of 41-65 years.
Majority of employees were found in age interval of 18-30.From this we can conclude that
more than half of employee were young. On the other hand 60(58.8%) customer respondents
of Harar Brewery Share Company were found in the age interval of 18-30 years and 34(33.3)
were found in age interval of 31-40 years ,the reaming 8(7.8%) were found in the age interval
 27

of 41-65 years ,there is no respondents were found above age of 65 years. From this we infer
that in both respondents, number of young group was almost similar.
Table 4 Age of employee and customer respondents of Harar Brewery Share Company

Age employees respondents Age of customer respondents

Frequency Percent Frequency Percent
18-30 85 69.7 18-30 60 58.8
31-40 33 27 31-40 34 33.3
41-65 4 3.3 41-65 8 7.8
< 65 - - 61-65 0 -
Total 122 100 Total 102 100

Source: own survey (2017)

According to figure 3 below, 43(42.2%) customer respondents have 1-8 years working
experience,42(41.2%) have working experience 9-16 years ,14(13%)customer respondents
have working experience of 17-25 years ,2(1.96%) have working experience of 26-35 years
and the remaining 1(0.98%),customer respondents have working experience 36-45 years.
Therefore the majority of customer respondents have working experience 1-16 years.

50 42.2
41.2
40

30 36-45
26-35
20
13.7 17-25
10 9-16
2 1-8
0
0.98
1-8
9-16
17-25
26-35
36-45

Figure 3.Working experience of customer respondents

 28

As far as working experience of the respondents is concerned in Table 5 below, 58(47.5%)

employee respondents of Harar Brewery Share Company have work experience 1-8 years,
36(29.5%) from 9-16 years working experience and the remaining 11(9%) have working
experience of 17-25 years and 12(9.8%) have working experience 26-34 years .The remaining
5(4.1%) have 35-45 working experience .This implies that majority of employee respondents
retain in organization. This implies that Harar Brewery Share Company have low employee
turnover.

Table 5.Working experience of employee respondents of Harar Brewery Share Company

Working experience of employees

Frequency Percent
1-8 58 47.5
9-16 36 29.5
17-25 11 9
26-35 12 9.8
36-45 5 4.1
Total 122 100

Source: own survey (2017)

As far as educational qualification of employees of Harar Brewery Share Company indicated

in the figure 6, shows that, 56(45.9%) of the respondents of Harar Brewery Share Company
were degree holders, 43(35.2%) were diploma holders and 16(13.1%) were certificate holders
remaining7(5.7%) were master’s degree holders. From this data we depict that educational
status of the given individual has great value to do with efficiency and effectiveness what he/s
he performs to the organization.
 29

50 45.9
45
40 35.2
35 Certificate
30
Diploma
25
Degree
20 13.1
Masters
15
10 5.7
5
0
Certificate Diploma Degree Masters
.

Figure 2.Education level of employee respondents

According Table 6 below, majority of customer’s respondents 48(47.1%) were certificate

holders followed by degree who constitute 23(22.5%) and 28(27.5%) were diploma holders
the remaining 3(2.9%) were master holders. From this we infer that majority of the customer
respondents are certificate and degree holders.
Table.6. Educational level of customer respondents

Education level Frequency Percent

Certificate 48 47
Diploma 28 27.5
Degree 23 22.5
Masters 3 2.9
Others - -
Total 102 100
Source: own survey (2017)

4.1.3. Reliability Test

The reliability test is an important instrument to measure the degree of consistency of an

attribute (Mahon, 2002) the less the variations of the instrument produce in repeated
 30

measurement of an attribute the high its reliability Yarcheski (2002). The close the
reliability coefficient to 1 is the better.Reliability can be equated with stability consistency and
dependability of measuring tool. Cronbach’s alpha is one of the most commonly accepted
measures of reliability as it measures the internal consistency of the item in the scale.

The normal range of Cronbach’s alpha coefficient is between 0 and 1; the higher value reflects
higher degree of internal consistency. According to Kline (1999),alpha near to 0.9 represents
very high reliability, these score nears 0.7 reflects moderate level of consistency and alpha
below 0.3 indicate that the item have poor consistency .The reliability of the scales used in this
research were calculated by using Cronbach’s alpha coefficient .All Crnonbach’s alpha value
higher than 0.7 indicates the reliability stability and consistency with which the instrument
measures the concept and all the dependent and independent variables, meet the above
requirements. The alpha value for each question was summarized in Table7.

Table 7 Descriptive statistics and scale reliability.

Variable constraints Items Average mean Crnobach’s α(alpha)

Customer orientation 4 3.81 0.826
Customer service quality 3 3.80 0.901
Potential customer focus 8 3.72 0.902
Customer relation management process 3 3.22 0.890
Customer knowledge management 5 3.69 0.870
Technology based CRM 4 3.83 0.898
Customer satisfaction 3 3.79 0.90
Source ordinary logistic output: Link function complimentary log-log

4.1.4. Validity Test

According to Hair et al. (2007) defined the validity as “the degree to which a measure
accurately represents what is supposed to”. Validity is concerned with how well the concepts
are defined by the measure(s). It also refers to the extent to which an empirical measure
adequately reflects the real meaning of the concept under consideration. However, an
instrument cannot measure the attribute of interest if it is unpredictable, inconsistent, and
 31

inaccurate. Leary (2004) mentioned about four types of validity: Internal validity, External
validity, construct validity, and Statistical conclusion validity. In this study, the researcher
tried to address the construct validity through defining clearly the construct of interest and
develop valid measures that operationalize defined constructs. Construct Validity: It examines
how well a given measurement scale is measuring the theoretical construct that it is expected
to measure. It can be classified as face validity and content validity. Face validity refers to
whether the instrument is measuring what it claims to measure.

Content validity used when to find out if the entire content of the construct/ area is represented
in the test. It compare the test task with the content of the behavior such as empathy, resistance
to change, and organizational learning are difficult to define, much less measure. We can also
assess the degree to which individual items represent the construct being measured, and cover
the full range of the construct (content validity) .The exploratory factor analysis is a method
attempting to explore the underlying variables or factors in order to explain the pattern of
correlations among the observed variables. Through the exploratory factor analysis, the
indigenous variables playing a significant role in determining the variables’ change was
identified and their relations with one another and also with other variables was defined in the
form of some hypotheses. Using the factor a loading analysis, the value of component
extracted above 0.5 was all at acceptable level Sugiono (2010).
Table 8: Explanatory Factor Analysis of validity of the questionnaires
Variable NO Questions Factor loading
Customer orientation 4 0.78
Customer service quality 3 0.84
Potential customer focus 8 0.98
Customer relationship management process 3 0.88
Customer knowledge management 5 0.84
Technology based customer relationship management 4 0.87

4.1.5. Sampling Error

The Kaiser – Meyer Olkin test was used for measuring sampling precision. The KMO statistic
varies between 0 and 1.A value close to 1 indicates that patterns of correlations are relatively
 32

compact and so factor analysis should yield distinct and reliable factors(Andy
2006).According to Table 9,KMO-Bartlett test results indicate a factor analysis on this
structure’s data was accepTable.KMO statistics with a value more than 0.5 indicates that the
sampling process is adequate and significance level of zero for Bartlett’s test indicates that the
factor model being used is suitable.

Table 9 KMO and Bartlett’s test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy .829
Approx. Chi-Square 2784.565
Bartlett's Test of Sphericity df 43
Sig .000

4.2. Ordinary logistic Regression Model Interpretation

The ordinal regression model is the most common model for ordinal out comes, ordinal
regression models constrain the relationship between regressors and out comes in specific
ways that was elaborated by Anderson (1984).Suppose that category χ has positive effect as, χ
increases the lowest category decrease in probability from 1 to 0 while the highest increase 0
to 1, the probability for other categories are bell shaped with modes that increase for higher
category .In ordinal regression analysis, there are link functions, example logit and cumulative
log links, are used to build specific models.

There is no clear cut method to distinguish the preference of using different link functions.
However, the logit link is generally suitable for analyzing the ordered categorical data evenly
distributed among all categories. The complimentary log- log link may be used to analyze the
ordered categorical data when higher categories are more probable; Bender and Benner
(2000).The major decisions involved in constructing the ordinal regression models where
deciding functions that would be good to fit the model. There are many link functions which is
a transformation of the cumulative probabilities that allows estimation of the model. There are
five link functions that are used in ordinal regression model as option link function. From the
five link functions the complimentary log-log link function (log (-log (1-x)) to be used to
analyze the ordered categorical data when higher categories are more probable.
 33

Therefore,

Where, j indexes the cut-off points for all categories (k) of the outcome variable. If multiple
explanatory variables are applied to the ordinal regression model, βx is replaced by the linear
combination of ß1χ1+ß2χ2+ß3χ3+ß4χ4+ ß5χ5+ ß6χ6 ….ßiχi are Coefficient indicating rate of
change of customer orientation, customer service quality potential customer focus ,Customer
relation management process ,Customer knowledge management and Technology based
customer relation management of the organization. The function is called the link function that
connects the systematic components (i.e.) of the linear model. The alpha represents a separate

intercept or threshold for each cumulative probability.χ1, χ2, χ3, χ4, χ5 and χ6 are column

vectors for the independent variables. The threshold and regression coefficients are unknown
parameters to be estimated by means of the maximum likelihood method, Bender and Benner
(2000) and Long (2003). Constructing ordinal regression model entails several decisions.

4.2.1. Test of Multi-Collinearity

As with ordinary logistic regression model for this study the researcher was checked this
assumption with tolerance and VIF statistics. Andy (2006) suggests that a tolerance value less
than 0.1 almost certainly indicates a serious collinearity problem. (Liu, 2010) also suggests
that a VIF value greater than 10 is a cause for multi-collinearity and in these research data the
values are below 10 for all predictors. It shows from these values that there is not an issue of
collinearity between the predictor variables. This means that the derived model is likely to be
unchanged by small changes in the measured variables. In another word, these values give us
some idea as to how accurate our regression model was. Therefore, there is no the effect of
collinearity problems.
 34

Table 10 Multi-collinearity test

No Variables Tolerance VIF

1 Customer orientation 0.976 1.024
2 Customer service quality 0.984 1.016
3 Potential customer focus 0.751 1.002
4 Customer relationship management process 0.712 1.004
5 Customer knowledge management 0.861 1.016
6 Technology based customer relation management 0.712 1.009
Source: Complimentary log-log link function

4.2.2. Chi-Squire Test

According to Table 11, in each independent variable there is significant difference because
null hypothesis was rejected at the p-value .000 significant value level or less than 0.05
significant levels. There for Table11, shows that customer orientation, customer service
quality, potential customer focus, customer relationship management process, customer
knowledge management and technology based CRM, differently affect customer satisfaction.

Table 11.Chi-squre test

Variables Chi-squire Df Assump.sig

Customer orientation 175.639 11 .000
Customer service quality 231.279 9 .000
Potential(key) customer focus 116.164 7 .000
Customer relationship management process 565.525 16 .000
Customer knowledge management 188.410 4 .000
Technology based CRM 349.377 21 .000
Source: Complimentary log-log link function

4.2.3. Model Fitting Information

First, of course, need to identify the ordinal outcome variable. Then, need to decide which
predictors to use for the location component of the model. Finally, need to decide which link
function gives good fits for the data and SPSS package version 20 software were used in this
 35

research thesis to analysis the data. Selecting a link function, is helpful to examine the
distribution of values for the outcome variable, depending on data the majority of respondent’s
response category shows higher categories, especially categories 2 and 3 comparatively than
category 1. For this reason, the complementary log-log link function is suitable, since the
function focus on the higher outcome categories. In this case model indicates the parameters of
the model for which the mode fit is calculated and intercept only indicates that a model that
does not control for any predictor variables and simply fits an intercepts to predict the outcome
variable. ‘’Final’’ indicates a model that includes a specified predictor variables whose
coefficient have been estimated using an interval process that maximize the log likelihood of
the outcome. In the Table 12 below the chi-square test weather at least one of the predictors
‘regression coefficient is not equal to zero in the model the LR (Likelihood regression) chi-
squire statistics can be calculated -2*(null model) - (-*L (fitted model). 571.878-398.100
equals to 173.778, where null model is from the log likelihood with response variable in the
model and L fitted model is log likelihood from the final iteration assuming the model
convergent with all parameter.

According to De Carlo (2003) the significant chi-square statistic indicates that the model gives
a significant improvement over the baseline intercept-only model. This indicate that the model
gives better predictions than if just guessed based on the marginal probabilities for the
outcome categories. Therefore, the change in likelihood function has a chi-square distribution
even when there are cells with small observed and predicted outcomes.

Table 12 Model Fitting Information

Model -2log likelihood Chi-square Df Sig
Intercept only 571.878
Final 398.100 173.778 51 000

Link function: Complementary Log-log

 36

4.2.4. Goodness of Fit

Pearson is widely used in statistics to measure the degree of the relationship between the linear
related variables and Deviance likelihood-ratio test is also used under full maximum
likelihood. The deviance can be regarded as a measure of lack of fit between model and data.
The larger the deviance, the poorer the data will fit to the model. The null hypothesis states
that the observed data were consistent with the fitted model. The fit is said to be good if P-
value is greater than 0.05. Therefore, we want these statistics to be non-significant. A
significant result would mean that the model was significantly different from our data. As we
clearly observed from the Table 13 below, P-values for both Pearson and Deviance were >
0.05. Now, obviously, if our model is a good fit of the data then the observed and expected
frequencies should be very similar. The null hypothesis is accepted and the conclusion was
that the observed data were consistent with the estimated values in the fitted model suggests
that the model fits the data reasonably well.

The goodness-of-fit is given in Table 13 below Contains Pearson's chi-square statistic for the
model and another chi-square statistic based on the deviance. These statistics are intended to
test whether the observed data are inconsistent with the fitted model. If the significance values
are large, and then would conclude that the data and the model predictions are similar and that
we have a good model. The large value for significant shows a good model. Therefore, the
model shows that significance value is greater than that of 0.05 p-value level.

Table 13.Goodness off fit

Chi-Square Df Sig
Person 1992.995 2504 1.000
Deviance 439.084 2504 1.000

Link function: Complementary Log-log.

4.2.5. Pseudo R-Square (R2)

R2 is a statistical that will give some information about the goodness of fit of a model .In
regression, the R2 coefficient of determination is a statistical measure of how well the line
 37

approximates the real data points. An R2 of 1 indicates that the regression lines perfectly fit the
data. In Table below 14 were used to estimate the coefficient of determination. Cox and Snell
(1989) are based on the log likelihood for the model compared to the log likelihood for a
baseline model. However, with categorical outcomes, it has a theoretical maximum value of
less than 1, even for a "perfect" model. Nagelkerke (1991) is an adjusted version of the Cox &
Snell that adjusts the scale of the statistic to cover the full range from 0 to 1. McFadden (1974)
is another version, based on the log-likelihood kernels for the intercept-only model and the full
estimated model.

The model with the largest statistic is “best” according to this measure the Table 14 below
concluded that 0.772 (77.2%) shows that the model good fit. Value approximately 1 or 100%
and the model reflect 77.2% of variance on effect of customer relation management on
customer satisfaction with six independent variables such as customer orientation, customer
service quality, potential customer focus customer relation management process, customer
knowledge management, and technology based customer relation management. There for the
model shows to predict 22.8% other variable to construct future research. Therefore Table 14.
Shows the values which indicate the fitting model is good according to these measures.

Table 14 Presoud R-square

Cox and Snell .769
Nagelkerke .772
McFadden .260

4.2. 6. Test of Parallels Lines

Test of parallel lines is designed to make judgment about model adequacy. The model null
hypothesis states that the slope coefficients in the model are the same across the response
categories. As it was observed from the Table below significance is greater than 0.05 that
indicates there is no significant difference for the corresponding slope coefficients across the
response categories, suggesting that the model assumption of parallel lines was not violated in
the model. Table 15 depicts that, the test of parallel lines help whether the assumption that the
parameters are the same for all categories is reasonable. This test compares the estimated
 38

model with one set of coefficients for all categories to a model with a separate set of
coefficients for each category. Table 15 shows that the assumption is possible, where the
observed significant level is large. Therefore, null hypothesis accept this case because
observed significant value (1.00) is large than that p-value of 0.05 level.

Table15, Test of parallels line

Model -2Loglikelihood Chi-Square Df Sig
Null hypothesis .000
General .000b .000 277 1.00

4.3. Coefficient Interpretation Exp (ß)

The sign of a coefficient for a factor level is dependent upon that factor level's effect relative
to the reference categories. For covariates, positive (negative) coefficients indicate positive
(inverse) relationships between predictors and outcome. An increasing value of a covariate
with a positive coefficient corresponds to an increasing probability of being in one of the
"higher" cumulative outcome categories. For, a factor level with a greater coefficient indicates
a greater probability of being in one of the "higher" cumulative outcome categories.

Variance of the effect of customer relation management on customer satisfaction were 77.2%
The beta value of the independent variables elaborated in the following way , customer
orientation have beta value of -1.055 and exponential value of 0.348),customer service quality
have beta value of -2.014 equal to exponential value 0.133), potential customer focus have
beta value of -0.625 equal to exponential value of 0.54 customer relation management process
have beta value of -1.784 equal to exponential value 0.167,customer knowledge management
have beta value of -1.012 equal to exponential value 0.363 and technology based customer
relation management have beta value of -1.610 equal to exponential value 0.199.

In setting of effect of customer relation management, all items such as customer orientation,
customer service quality, potential customer focus customer relation management process,
customer knowledge management and Technology based customer relation management
constitute significant in explaining variance of the six independent variables towards customer
satisfaction. However, potential customer focus have beta value of (-0.625) exponential value
 39

of 0.54 predictor. This depicts that potential customer focus was a stronger predictor followed
by customer knowledge management with beta of (-1.784) exponential value of 0.363
predictor. The rest factors such as customer orientation have beta value of 0.348, technology
based customer relation management have beta value of 0.199, customer relation management
process with beta value of 0.167 and customer service quality 0.133 respectively

Table16, Explanatory variables associated with the effect of CRM on customer satisfaction.
Item Regression coefficient p-value
Customer orientation -1.005 0.012
Customer service quality -2.014 0.016
Potential customer focus -0.625 0.001
Customer relation management process -1.784 0.008
Customer knowledge management -1.012 0.001
Technology based CRM -1.610 0.004
Link function complementary log-log

4.4. Analysis for Open-ended Questions

Regarding to the good relation with customer and its importance to organizational
performance, more than half of the respondents responded that strong customer relation is
important for customer satisfaction, they informed that ,if there is strong relationship that is
establish in mutual understanding and interest the customer will happy and stay as loyal
customer with the organization for long period without switching to competitors offering and
also customers said that ,if they are satisfied by organizations offering and treatment they will
happy to refer the organizations offering is best to others. From this we depict that customer
relation should be established in mutual understanding and interest .Therefore the company
must understand the common interest of the customers and itself.

In other side regarding to question, organizations effort to create good relationship with
customer, majority of respondent responded that strong customer bondage will be created by
consistently delivering quality goods and service and also they said that if Harar Brewery
Share Company should be do what it say and they make under promise and over deliver, it the
 40

potential not only for the company not only for organizations growth but also it is best for
extra ordinary heights and delivery of quality goods and service it lay the foundation to
achieve more and separate its competitors and also create loyal customer which stay for long
period of time .For the question the way the organization improve to render service to
customer more than half of the respondents says that’’ strong relation do not happen from one
time meeting ‘’ it takes time .According to respondents it is important to create net work with
potential customer, prospective customers and existing customers is an important means of
improving customer service quality and mantling relationship and increase number of satisfied
customer.

4.5. Summary of Hypothesis Testing

H1 Customer orientation has positive and significant effect on customer satisfaction. The
result of study showed that significant relation between customer orientation and customer
satisfaction Table 16 above depicts that customer orientation has statistically significant
positive effect on customer satisfaction at 0.012 levels, accordingly hypothesis 1 could
accepted null hypothesis. Therefore the association was positive with beta value of -1.055 and
exponential value of 0.34. This indicate that the higher customer orientation, intend to higher
customer satisfaction. This study supported by Day and Van Bulte (2002) found that customer
orientation has a positive effect on customer satisfaction and Essawy and Azab (2012) found
that customer oriented organizational culture have strong positive effect on customer
satisfaction. In addition to this Wang and Feng (2012) reported that customer orientation
influence customer satisfaction directly through CRM capability.

H2, the customer service quality has significant and positive effect on customer satisfaction
Hypothesis two shows relation between customer service quality and customer satisfaction
was significant at 0.05 levels. The analysis result depicts that beta 0.133) with p-value of
0.016.Therefore hypothesis 2 was accepted and the direction of association was positive, this
implies that customer service quality is an important variable to increases customer
satisfaction.
 41

H3 Potential customer focus has positive and significant effect on customer satisfaction as
indicated in Table 11 above the association analysis of potential customer focus dimension has
positive and significant relationship on customer satisfaction with the beta coefficient value of
0.535, it is the highest of all association result of CRM variables. Therefore the result shows it
was significant at 0.05 levels. This shows that if the breweries share company focuses on
potential customers. Therefore the above hypothesis is supported by Chung and Shin (2010),
potential (key) customer focus which have statically positive effect on customer satisfaction.
In addition to this study, the research finding of Ndubisi (2007) shown that the more potential
(key) customer focus will lead high customer satisfaction and stronger market leader.

H4 Customer relation management process has positive and significant influence on customer
satisfaction: There was positive and significant association between customer relation
management process and customer satisfaction. The coefficient of customer relation
management process in ordinal regression Table 16 shown that customer relation management
process has significant and positive effect on customer satisfaction with p< 0.008 and with
exponential value of -1.012 and with beta value of 0.167, this implies that as percent increase
in customer relation management process 16.7% increase on customer satisfaction. Therefore
the above hypothesis was well accepted, the result was supported by Jayachandran et al.
(2005) found that CRM process has positive influence on customer satisfaction. Rayals (2005)
also found that CRM process has positive influence on customer satisfaction. In addition to
this Dutu and Halmajan (2011), Reinartz et al (2004), and Shavazi, Moshabaki, Hoseinin, and
Naie (2013) found that CRM process has positive influence on customer satisfaction.

H5 Customer knowledge management has positive and significant influence on customer

satisfaction: The result of ordinary regression analysis in Table 16 above clearly indicates that
customer knowledge management has significant influence on customer satisfaction with p<
0.001 and beta value of 0.363. This shows that customer knowledge management have
positive and significant influence on customer satisfaction .Therefore the above proposed
hypothesis was accepted. The result was supported by studies of Mihta’s (2005) customer
knowledge management have statistically positive and significant effect on customer
satisfaction.
 42

H6, Technology based customer relation management has positive and significant effect on
customer satisfaction: Table 14 above indicates that technology based customer relation
management has significant effect on customer satisfaction with p<0.004 significant level.
Table 16 above shows that technology based customer relationship management positively
affects customer satisfaction with exponential value of -1.610 and beta value of value of
0.199; this implies that an increase in technology based customer relation management
increase customer satisfaction. Hypotheses six was accepted, therefore using technology based
customer relation management shows significant positive effect on customer satisfaction.

Influence of technology based CRM on customer satisfaction was investigated in numerous

studies. Akroush et al (2011), Afa and Toker, (2012, and Kasim and Minani (2009) reported
that technology based CRM were significant predictor of customer satisfaction. Ordinal
regression analyses testing provided significance factors for the six hypotheses in order
to decide whether to accept or reject. These were only accepted with a significance of p <0.05.
The significance factors for accepting or rejecting the hypotheses are found in Table 15.

Table 15. Summary of hypothesis

Hypothesis p-value Result
H1: Customer orientation has significant and positive effect on 0.012 Accepted
customer satisfaction.
H2: Customer service quality has positive and significant influence 0.016 Accepted
on customer satisfaction.
H3: Potential customer focus has positive and significant influence 0.001 Accepted
on customer satisfaction.
H4: Customer knowledge management has positive and significant 0.008 Accepted
influence on customer satisfaction.
H5: Customers relation management process has positive and 0.001 Accepted
significant influence on customer satisfaction.
H6: Technology based CRM has positive and significant influence 0.004 Accepted
on customer satisfaction.
Significance at P-value < 0.005
 43

5. SUMMARY, CONCLUSION AND RECOMMENDATION

5.1. Summary

In general terms, the six customer relation management dimension shows a positive link to
customer satisfaction. The main objective of this finding was to investigate the effect of
customer relation management on customer satisfaction the case of Hara brewery Share
Company in Hara city. In this study quantitative research approach were implemented. The
target population of this study was customers and employees of Hara brewery share company.
In the study both primary and secondary data were used as source of information. Regarding
to reliability of the questions Table 9 indicates that all questions were reliable and acceptable
with Crnonbach’s alpha 0.901.

As finding of study shown , respondents agree that with six independent variables of CRM by
responding higher rate response to beta value of-0.625 equals to exponential value of 0.54
followed by customer knowledge management with beta value of-1.610 equals exponential
value of 0.363 and customer orientation, customer relation management, customer knowledge
management, customer service quality with beta value -1.610,and exponential value of 0.199
and,-1.784 exponential value of 0.167 and beta value -2,014 ,with exponential value of 0.133
respectively. The result of correlation indicates all the independent variables i.e. Customer
orientation, customer service quality, potential customer focus, customer knowledge
management, Customer relation management and technology based customer relation
management were positively and significantly affect customer satisfaction with significant
level of 0.05.In addition to this Table 16 shown the reliability of the scale used in the research
were calculated by using Crnonbach’s alpha coefficient.

All Crnonbach’s alpha value was higher than 0.7 this indicates that, the reliability, stability
and consistency of the data. In addition to this Table 9 KMO-Bartlett test result shows factor
analysis in that structure accepTable.KMO statistics, Bartlett tests with the value more than
0.5 indicates that sampling process was adequate and significant .As we observed from Table
9 P value for both Person and Deviance were > 0.05 therefore the model was good fit of the
data, then the observed data and expected data frequencies should be similar. Table 9 depicted
 44

that model fit value approximately 1 or 100% and the model reflect 77.2% of the variance on
effect of customer relation management on customer satisfaction with six independent
variables .There for the model shows to predict 22.8% variables to construct future research.

5.2. Conclusion

This finding offers clear ideas of customer relation management dimension that is stronger in
marketing and strategic marketing references’.This indicated dimensions can be used by
decision makers to help companies to attain higher customer satisfaction and it is also has
many importance in managing customer relation in order to satisfy in return to increase the
organizations performance.During the investigation the researcher used both descriptive and
ordinal logistic regression.Therefore the finding concludes that, the concept of customer
relation management well known by majority of customers and employees of Harar Brewery
Share Company.According to the study result the organization was trying to associate the
variables of customer relationship management such as customer orientation, customer service
quality, customer relationship management process, knowledge management process and
technology based customer relation management process with customer satisfaction.

From six dimensions of customer relationship management, potential Customer focus

influences highly and significantly affect customer satisfaction with beta value of-0.625 equal
to exponential value 0.543 as indicated in the result. This shows that concentration on the
potential customers leads to increases customer satisfaction. This also helps the organization to
be successful in customer satisfaction and attraction. In other words, delivering more high-
quality services for customers and powerful communicational skills between employees and
customers have more effective in attracting new customers and maintaining existing ones.

The results of this hypothesis indicate that customer relationship management orientation
influences customer satisfaction significantly. In other words, it is necessary to employees that
have necessary flexibility in creating awareness on customer mind about the benefits of
customer relationship and responding the customers and delivering the services. In the concept
of customer relationship management, it is necessary to pay attention to collect data for
categorizing customers in order to recognize the sale potentials and maintain the customers.
 45

Indeed, this concept considers the data of customer needs and wants to deliver more desirable
services for customers. The organizations that follow this model will be able to adapt
themselves with customers’ needs and wants in the shortest time and also can deliver the best
services for them.

The use of customer relationship management as a necessary organizational need for its
successfulness, because this practice is very important and necessary for organization’s
compatibility with customers’ needs. The third hypothesis of this study indicates that
knowledge management influences customer satisfaction significantly. The results of this
hypothesis confirm that knowledge management influences customer satisfaction significantly.
The sense of commitment and belonging is necessary for satisfying customers’ demand in the
employees. This is necessary that the employees have responsibility for delivering services to
the customers. All in all, these can improve customer satisfaction. This is because that the
satisfied employees have more loyalty toward their organization and hereby can improve its
approach to satisfy customers.

The employees ‘of organizational and job knowledge is attended in knowledge management
approach. This also is attended for delivering more services to the customers. On the other
hand, knowledge management is created based on the increase in the information and
employees’ knowledge about organizational environment and effective Customer satisfaction.
Flexible knowledge management is one of the most important prerequisites of organizational
success. This indicates that the system helps the organizations to adapt themselves with
customers’ needs and wants and to increase customer satisfaction.

The sixth hypothesis of this study indicates that technology-based customer relationship
management affect customer satisfaction in Harar Brewery Share Company positively and
significantly. The results of this hypothesis confirm that technology-based customer
relationship management influences customer satisfaction positively and significantly. In
addition, the use of customers’ viewpoints and perspectives can be helpful in delivering
services to the customers based on their individual information. In the participative
management model, it is suggested to use information and communication technologies in
delivering more desirable services to the customers. With regard to the rapid technology
 46

development, the organization needs these technologies. Information and communication

technologies have been attended for delivering more desirable services.The statistical
population of this study includes employees and customers of Harar Brewery Share Company.
In order to collect the data, a self-administrated questionnaire was used. Validity of this
questionnaire was examined through KMO-Bartlett tests. This value was 0.88 for the
questionnaire and confirms its validity. Also Crnonbach’s Alpha coefficient was used to
examine and confirm reliability of the questionnaire. The value was 0.90 for the questionnaire
that confirm its reliability. In order to test the hypotheses and analyze the data, ordinal logistic
regression modeling was used in SPSS, version 20 Statistical Software. The results of this
study revealed that the customer relationship management implementation influences
customer satisfaction.

Also the results show that concentration on the potential customer, customer orientation,
customer knowledge management technology-based customer relationship management,
knowledge management, customer relationship management has significant and positive effect
on Customer satisfaction. The result of complimentary log- log test indicates that potential
customer focus independent variable has the most positive effect and customer service
qualities have the least effect on customer satisfaction.

5.3. Recommendation

The study result indicates that the impact of customer relation management on customer
satisfaction the case of Harar Brewery Share Company .Based on the findings and conclusion
the following recommendation is very important for the brewery share company to increase
customer relationship practice to achieve high Customer satisfaction.

 The study result suggests that the Harar Brewery Share Company should work hard to
improve customer oriented culture. It should be needed to focus on continuous
interaction with its customers. The brewery share company should give attention for
customer implied values, norms and beliefs.

 It is also recommended from the study analysis the customer service quality is
important tool for improving customer satisfaction by satisfying the customer needs
 47

and wants it is possible to retain customers and increase customer satisfaction. There
for the Harar Brewery Share Company should focus on customer service quality.

 The finding of the research suggests that potential (key) customer focus was strong
predictor of customer relationship management. As indicated in the finding of this
research potential (key) customer focus highly affects the customer satisfaction.
Therefore it is recommended from the result of the study the Harar Brewery Share
Company should promise superior to its potential customers and the Brewery share
company should try to offer the desired satisfaction to its potential and also the
brewery share company should be able to offer customized offers in return to particular
customer desires and also the brewery share company should try to select most
profitable potential customer and segment them based on their needs and wants

 The finding also recommends the organization, the importance of communicating

customer orientated values to their employees, and building a CRM attitude throughout
the organization. For such culture to be effective it must be incorporated into the
organizations structure.

 As indicated in the finding of the research CRM process has effect’ on customer
satisfaction. Managers of the brewery share company will try to establish effective
CRM process common for customer information communication, capture, and
effective use. Those routines should be bonded to clear CRM objectives, and their
execution facilitated by the formal organization’s structure.

 The study provides evidence on the strong influence of CRM based technology on
customer satisfaction. The finding of this study directs the attention should be given by
IT managers of Harar Brewery Share Company to integrating the CRM technology
with customer relationship objectives and the brewery share company should be try to
utilize CRM soft ware, customer data base in order to provide desired customer
satisfaction to its customers.
 48

6. REFERENCES

Abbott, J., Stone, M., & Buttle, F. 2001. Customer Relationship Management in practice-a
qualitative study. Journal of Database Marketing, 9(1);- 24-34.
Abdul Alem M., Basri R., & Shaharuddin T. 2013 assessing the influence of customer
relationship management dimensions on organization performance: An empirical study
in the hotel industry. Journal of Hospitality, and Technology, 4 (3), 228- 247
Agarwal, A., Harding, D. P., & Schumacher, J. R. 2004. Organizing for CRM. Mckinsey
Quarterly, 3, 80-90.
Albert 2004, Factors influencing customer relationship management (CRM) performance in
business firms. Thesis Publish, Purdue University.
Albinsson 2004. Assessing the effects of quality, value and customer satisfaction on consumer
behavioral intentions in. Journal of Retailing, 76(2), 193-218.
Andersson, J.C., Hakansson, H. and Johansson, J. 2000. “Dynamic business relationships
within a business network context Journal of Marketing, pp. 1-15.
Andy, F. 2006. Discovering Statistic using SPSS. London: SAGE publication
Antonides,G., Amesz, B.H. and Hulscher, I.C. 1999. “Adoption of Payment Systems. A case
study of diffusion of innovations”, European Journal of Marketing, pp. 1123-1135.
Ata, U. Z., & Toker, A. 2012. The effect of customer relationship management adoption in
business-to-business markets. The Journal of Business & Marketing, 27(6), 497-507.
Bai,J.J.,Huang,S.,Rozelle,and Boswell,M.2001 Beer Battles in China: The struggle the world’s
Largest Beer market. Journal of the Economics of Beer Oxford University press.
Barnes, J.G. 2002. “The issues of establishing relationships with customers in service
companies: When are relationships feasible and what form should they take?”,
American Marketing Association and Vanderbiit University Center for Services
Marketing, pp 365-378.
Bekeile 2010 aspects of database marketing. Customer relationships management Johnson
publishers New York.
Belry and Michalakopows.2006“A Customer Relationship Management System to Target Cus
tomers at Cisco,” Journal of Electronic Commerce in Organizations, 2 (4):- 63–73.
 49

Bender and Benner.2000.Calculating ordinal regression models in SAS and surplus. Biometric
journal, 42, pp 677-699.
Bentum, R. V. & Stone, M. 2005. Customer relationship management and the impact of
corporate culture - A European study. Journal of Database Marketing & Customer
Strategy Management, 13(1), 28-54.
Bickert C.G 1992. Promotional aspects of database marketing. Customer relationships
management Johnson publishers New York.
Bolton, R. N., Katherine, N. L., & Peter C. V. 2004. The Theoretical Underpinnings of
Customer Asset Management: A Framework and Propositions for Future Research.
Journal of the Academy of Marketing Science, 271–292
Boulding, W. Staelin, R., Ehret, M. and Johnston, W.J. 2005. “A customer relationship
management roadmap: Potential pitfalls where to go “journal of marketing, pp.52-166.
Bruijin, B.2011.Alchoholic Marketing practice in Africa: Finding From Gambia, Ghana,
Nigeria and Uganda, Utretch, NE: World Health Organization.
Butler, S. 2000. Changing the game: ‘’ Customer Relationship Management in the e-world’’
Journal of Business Strategy, 21(2):-13-14.
Buttle and Maklan, 2015. "The CRM Value Chain," Marketinyg Business Review, Primetime
Publisher's Texas, pp 52-55.
Buttle, F. and Marklan, 2015. Customer relationship management: Concepts and tools.
Oxford: Elsevier Butterworth-Heinemann.
Chan and ching 2009. Customer Relationship Management on Internet and Mobile Channels:
An Analytical Framework and Research Directions. Idea Group Inc.
Chang, H. S. 2007.Critical factors and benefits in the implementation of customer
relationship management. Total Quality Management, 18 (5), 483–508.
Chang, and Rosenberg,Czepie, 2010. A mediating role of marketing capability. Journal of Bus
iness Research 63 (8): 849-855.
Chaston, I., Badger, B., Mangles, T. & Sadler, E. 2004. Relationship marketing, knowledge
Chaudhary, K. and Sharma, M. 2011. Performance of Indian public sector banks and private
sector banks: A comparative study. International journal of innovation, management
and technology, no. 3.
 50

Chen, I.J. & Popovich, K. 2003. Understanding customer relationship management: people,
process and technology. Business Process Management Journal, 9(5), 672–688.
Coltman, T., Devinney, T, & Midgley, D. 2011. Customer relationship management and firm
performance. Journal of Information Technology, 26(3), 205-219.
Conkiln, powaga and Lipovetsky .2004.Customer satisfaction Analysis: Identification of key
Drivers European Journal of operational Research, 154(3):819-827
Copulsky, J.R and Wolf, M.J .1990, p.17. Development of a Customer Centric Enterprise.
Galaxy publishers England.
Cronbach,L.J. 1951.Coefficient alpha and the internal structure of tests.
Psychometrika, 6 (3), 297-334.
Cronin, J. J. J., Brady, M. K., and Hult, G.T.M. 2010. Assessing the effects of quality, value
and customer satisfaction on consumer behavioral intentions in service environments.
Journal of Retailing, 76(2), 193-218.
Croteau, A. M., & Li, P. 2003. Critical success factors of CRM technological initiatives.
Canadian Journal of Administrative Sciences, 20(1), 21-34.
Da Silva, R.V. & Rahimi, I.D. 2007. A Critical Success Factor model for CRM
implementation.Int. J. Electronic Customer Relationship Management, 1(1), 3–15.
Dapkevicius, A. and Melnikas, B.2009. Influence of price and quality to customer
Satisfaction: keuro marketing approach .Science future of Lithuania, pp: 17-20.
Das, K. 2009. Relationship marketing research 1994-2006. An academic literature review and
classification. Marketing intelligence & planning pp. 27 no. 3
Das, S.K. 2012. Customer relationship management in banking sector: A comparative study of
Day, G. S. 2000. Managing market relationships. Journal, of Marketing Science. 28(1), 24-30.
Day, G. S., & Van den Bulte C. 2002. Superiority in customer relationship management:
consequences for competitive advantage and performance. Report No. 02-123.
Cambridge, MA: Marketing Science Institute.
Deshpandé, R., Farley, J., & Webster Jr, F. 1993. Corporate culture, customer orientation, and
innovativeness in Japanese firms. Journal of Marketing, 57 (January), 23–37.
Dimitriadis, S. and Stevens, E. 2008. “Integrated customer relationship management for
service activities”,496-511. Greenberg, P. 2001. CRM at the Speed of Light. Hindu
publishers New Delhi India.
 51

Dowling, G. 2002. “Customer Relationship Management: In B2C Markets, often less is more”,
California Management Review, . 44, No. 3, pp. 87-104.
Dutu, C. & Halmajan, H. 2011. The effect of organizational readiness on CRM and business
performance. International Journal of Computers, 1(2), 106-114.
Economics and management. Pp.44-45
Eisingerich, A.B. & Bell, S.J. 2006. Analysis paper relationship marketing in the financial
services industry. Journal of Financial Services Marketing, 10 (4):-86 – 97. European
Journal of Marketing, 39(11/12), 1264-1290.
Essawi, N. E., & Aziz, R. A. E. 2012. Determining the main dimensions that affect e–
customer relationship management readiness in the Egyptian banking industry.
International Journal of Customer Relationship Management, 6(3), 217-234.
Fecikova, I. (2004). An index method for measurement of customer satisfaction. The TQM
Magazine, 16(1), 57-66.
Fournier,S., Dobscha, S., and Mick, D.G. 1998. Preventing the premature death of relationship
marketing. Harvard Business Review, 76(1), 42–49.
Garrido-Moreno, A., & Padilla-Meléndez, A. 2011. Analyzing the impact of knowledge
management on CRM success: The mediating effects of organizational factors.
International Journal of Information Management, 31(5), 437-444.
Gujarati,D.N,.,2004.Essentials of econometrics.4th Edition.Mc GrawHill companies,Gilligia
Hair, Joseph, Robert P. Bush, and David Ortinau 2003. Marketing Research: Within a
Changing Information Environment, Boston: McGraw-Hill.
Hansemark and Albinsson, M. (2004), Customer satisfaction and retention: the experience of
individual employees. Managing Service Quality, 14(1), 40-57.
Harding, D., Cheifetz, D., Deangelo, S. & Ziegler, E. 2004. CRM’s silver lining. Marketing
Management, 13 (2), 27.
Hobby, J. (1999). Looking after the one who matters. Accountancy age, (October), 28-30
In Israel .2003, determining sample size, University of Florida.
Jamal, A., & Naser, K. 2002. Customer satisfaction and an assessment of some of the key
antecedents of customer satisfaction in retail banking. The International Journal of
Marketing, 20(4).
 52

Jasola, M. and Kapoor, S. 2008. CRM: A Competitive tool for Indian banking sector.
Communications of the IBIMA volume 5
Jaworski, B. J. & Kohli A. K. 1993. Market orientation: Antecedents and consequences.
Journal of Marketing, 57 (July), 53–71.
Jayachandran, S., Sharma, S., Kaufman, P. & Raman, P. 2005. The role of relational
information processes and technology use in customer relationship management.
Journal of Marketing, 69(4), 177-192.
Kamakurach, Wagner A., Vikas Mittal, Fernando de Rosa, and Jose Afonso Mazzon 2002,
“Assessing the Service Profit Chain,” Marketing Science, 21 (Summer), 294-317.
Kim, H. & Kim, Y. 2009. A CRM performance measurement framework: Its development
process and application. Industrial Marketing Management, 38(4), 47-489
Kotler, and Armstrong, 2009, Marketing Management (14th Ed.). New Jersey: Pearson
International Edition.
Levitt, T. (1983). After the sale is over. Harvard Business Review, 87-93
Levitt, T. (2011). After the sale is over. Harvard Business Review, 87-93.
Lindgreen, A. and Antioco,M. 2005. “Customer relationship management: The case of
European bank”, Marketing Intelligence & Planning, 23, (2), 136 – 154.
Liu, x. (2010). Ordinal Regression Analysis: Fitting the continuation Ratio Model to
Educational Data Using SPSS. North eastern Educational Research Association
Annual conference .pp. 12-16.
Management systems and e-commerce operations in small UK accountancy practices.
Journal of Marketing management, 19;-109-29.
Menon, A. & Varadarajan R. P. (1992). A model of marketing knowledge use within firms.
Journal of Marketing, 56 (4), 53-72.
Minami, C., Dawson, J. 2008. The CRM process in retail and service sector firms in Japan:
Loyal development. Journal of Retailing and Consumer Services, 2008. Pp.375–385
Mithas, S., Krishman and Fornell.2005.Why do customer relationship management
applications affect customer satisfaction?
Moorman, C. and Siranivasan 1995. Organizational market information processes: Cultural
antecedents and product outcomes. Journal of Marketing Research, 32(3), 318-336.
 53

Morgan, N.A., Vorhies, D.W., Mason, C.H. Hunt, 2015, Market Orientation, Marketing
Capabilities and Firm Performance. Strategic Management Journal, 30(8), 909 -920.
Morgan,R.M.,Hunt,SD.1994. The Commitment-Trust Theory of Relationship Marketing,
Journal of Marketing, 58, pp. 20-38
Myers, M, 2002. Developments in Customer management. Dan educational centre London.
Mylonakis, J. 2009, Customer relationship management functions: A survey of Greek bank
customer satisfaction perceptions. The Journal of Bank Management, pp, 7-31.
Narver, J. C., & Slater, F. S. 1990. The effect of a market orientation on business profitability.
Journal of Marketing, 54(4), 20–35.
Ndubisi, N.O.2004. Understanding the salience of cultural dimensions on relationship
marketing. Cross Cultural Management, 11 (3);-70-89.
Nevin, J. 1995.Issues in the perspectives of CRM. Journal of Economic and Social Research 3
:( 4) 2001, 2002 Preliminary Issue, 1-21.
Newell, F. 2000. Customer Relationship Management in the new Era of Marketing New York.
Ngai, E.W.T., Xiu, L., & Chau, D.C.K. 2009. Application of data mining techniques in
customer relationship management: A literature review and classification. Expert
Systems with Applications,36, 2592–2602.
Ojo, A.2004. Customer relation service in Nigeria. Journal of African relate studies pp, 44-58.
Oztaysi, 2011.A measurement tool for customer relationship management processes11(.6);-
943-960.
Papastathopoulou, P., Avlonitis, G., Panagopoulos N.G. 2007, Intra organizational
information and communication technology diffusion: implications for industrial
sellers and buyers. Industrial Marketing Management, 36(3), 322-336.
Parvatiyar,A.&Sheth,T.N., 2001. "Customer relationship management: Emerging practice,
process, and discipline", Journal of Economic and Social Research, 3, (2).
Paul and Gery (2003). Relationship Marketing for Health Care Providers, Journal of Health
Care Marketing, 8, 20-25
Peppers, Don, and Martha Rogers 2004. ‘’Managing Customer Relationships’’, Hoboken, NJ:
John Wiley & Sons, p.6Peppers, D., & Rogers, M., 1995. A New Marketing Paradigm,
Planning Review, 23(2), 14–18.
 54

Rababah, K, (2012), Framework for adoption of customer relationship management system in

hospital. Theses PhD published UUM
Ramkelawon, B. 2010. Customer relationship management as an integrated approach in the
banking sector: a case study of a local bank in Mauritius. International research
symposium in service management.
Reinartz, and Kumar, 2004. “The Customer Relationship Management Process: Its
Measurement and Impact on Performance". Journal of Marketing Research, 293-305.
Rgals, (2005). Customer Relationship Management (CRM).UK, Granfield University, School
of management: Prentice-Hall.
Richard, 2009. Measuring Organizational Performance: Towards Methodological Best
Practice. Journal of Management.
Rigby, D., Reicheld, F.F., & Schefter, P. 2002. Avoid the four perils of CRM. Harvard
Business Review, 80(1), 101-09.
Roberts-Lombard, Liu and Hazard, 2005. Customer retention through customer relationship
management: The exploration of two-way communication and conflict handling.
African journal of Business management, pp. 3487-3496.
Robin Garabedian, Laurianae Bergy, Zelia Pellissier, ophelie poirie and Geraldine Richard.
2010. Brand Management US Beer Market, SKEMA Business School, and paries.
Romano, Nicholas C. 2003. “Electronic Commerce Customer Relationship Management: A
research agenda, “Information technology and management, 4(2-3), pp 233-258.
Rose Beard .2014 Evolving Customer Expectations: Customer Experience and Customer
Satisfaction: Will your company adapt or Perish.
Rosenberg, L. J. and J. Czepiel 1984. "A marketing approach for customer retention." Journal
of Consumer Marketing 1(spring): pp 45-51.
Rouholamini, M. and Venkatesh, S. 2011. A study of customer relationship management in
Iranian banking industry. International journal of information technology and
knowledge management. pp. 723-729.
Ryals, L. 2005. Making customers relationship management work: The measurement and
profitable management of customer relationships. Journal of Marketing, pp, 252–261.
 55

Ryals, L., & Knox, S. 2001. Cross-functional issues in the implementation of relationship
marketing through customer relationship management. European Management
Journal, 19 (5), 534-42
Salomman, H. Kolbe, L. Duos, M., & Brenner, W. 2005.”Knowledge Management
Capabilities in CRM: Making Knowledge For, From and About Customers Work”.
Sayed H., 2011.Customer relationship management and its relationship to the marketing
performance: International Journal of Business and Social Science 2, (10):-235
Sbi and other nationalized commercial banks in India. Arth prabhand: A Journal of
Schneider, H. and Bower, U. 1995. Improving service Quality in America: Lessons learned.
The Academy of Management Executives, 8, 32-52.
Shavazi, E. T., Moshabaki, A., Hoseini, S. H., & Naiej, K. A. 2013. Customer
relationship management and organizational performance: A conceptual framework
based on the balanced scorecard (Study of Iranian banks). IOSR Journal of Business
and Management, 10 (6), 18-26.
Sheth, J. N., Sisodia, R. S., & Sharma, A. 2000. The antecedents and consequences of
customer centric marketing. Academy of Marketing Science. Journal, 28(1), 55-66.
Sin L.Y.M., Tse A.C.B. & Yim F.H.K. 2005. CRM: conceptualization and scale development.
European Journal of Marketing, 39(11/12), 1264-1290.
Soliman, H. S. 2011. Customer Relationship Management to the Marketing Performance.
International Journal of Business and Social Science, 2(10), 166-182.
Srinivasan, R. & Moorman, C. 2005. Strategic firm commitments and rewards for customer
relationship management in online retailing. Journal of Marketing, pp, 193–200.
Stefanou, C., J., Sarmaniotis, C., & Stafyla, A. 2003. CRM and customer-centric knowledge
management. Journal of Business Process Management, 9(5), 617-634.
Stone M, Ronald 3. 2004, Accelerating Customer Relationships using CRM and
relationships Technologies. Upper Saddle River, NJ: Prentice Hall.
Swaminathan, S., 2004. Customer relationship Management: its dimensions and effect of
Customer outcomes, Journal of Personal Selling & Sales Management.
Tamilarasan, R. 2011, Customer Relationship Management in Banking Services. Journal of
Advances in Management, 4(1), 23-34.
 56

Thompson (2008). Towards a holistic perspective o customer relationship management (CRM)

implementation: A case study of the Housing and Development Board, Singapore
Decision Support Systems, 42, pp.16-14
Torggle, M. (2008). The Functionality and Usage of CRM Systems. Proceedings of World
Academy of Science, Engineering and Technology, 301-309.
Usman 2012, Customer Relationship Management: Strategies and Practices In Selected Banks
Of Pakistan. International Review of Business Research Paper, 5(6), 117-132.
Verhoef, Peter C. 2003, “Understanding the Effect of Customer Relationship Management on
Customer Retention and Customer Share Development,” Journal of Marketing.
Verma and Chaduray M. 2011. A comparative study. International journal of innovation,
management and technology.
Wang, Y. & Feng, H. 2012. Customer relationship management capabilities: Measurement,
antecedents and consequences. Management Decision, 50(1), 115 – 129.
William. 2010, the logic of Qualitative survey research and its position in Field of social
research method. Journal of FQS (Forum Quantitative social research), No. 2, 2010.
Winer, R. S. 2001."A Framework for Customer Relationship management’’Calififornia
management review 43, 89-105.
Wu, S. I., & Lu, C. L. 2012. The relationship between CRM, RM, and business performance:
Study of the hotel industry in Taiwan. International Journal of Hospitality
Management, 31(2), 276-285.
Wyner, R. S., 1999. A framework for customer relationship management, California
Management Review, 43(4), 89-105
Yamane. 1967. Statistics, an introductory analysis, 8nd ed., New York: Harper and Row, cited
Yilmaz, C., Alpkan, L., & Ergun, E. 2005. Cultural determinants of customer- and learning
oriented value systems and their joint effects on firm performance. Journal of
Business Research. , 1340– 1352.
Yim, F.H., Anderson, R.E., Swaminathan, S. 2005, Customer Relationship Management: Its
Dimensions and Effect on Customer Outcomes. Journal of Personal Selling and Sales
Management, 24(4), 265–280.
Yim, Frederick H.K. 2002. “CRM Orientation: Conceptualization and Scale Development,”
Master’s thesis, Chinese University of Hong Kong.
 57

Yner, G.A. 1999. Customer Relationship Management, Marketing Research, pp. 11, No. 2,
summer, pp 39-41.
Zablah, Alex R., Danny N. Beuenger, 2003. “Customer Relationship Management: An
Explication of its Domain and Avenues for Further Inquiry" in Relationship Marketing,
Customer Relationship Management and Marketing Management. American Journal of
Marketing Research, 115-1
Zhu, Z. & Nakata, C. 2007. Reexamining the link between customer orientation and business
performance: The role of information systems. Journal of Marketing Theory and
Practice, 15(3), 187-203
 58

7. APPENDIX
 59

7. APPENDIX

Appendix 1.Reliability Testing

Variables Crnonbach’s alpha Chronbach alpha based on standardized No of items
items
1 0.840 0.841 4
2 0.920 0.922 3
3 0.942 0.942 8
4 0.910 0.914 3
5 0.868 0.870 5
6 0.899 0.901 4
7 0.754 0.772 3

Appendix Table 2 Factor loading Test

Component matrix
Variable No of Questions Factor loading Crnobach’s
Q5 0.747
Q6 0.753
Customer orientation Q7 0.789
Q8 0.822
Customer service quality Q9 0.733
Q10 0.802
Q11 0.897
Potential customer focus Q12 0.890
Q13 0.892
Q14 0.935
Q15 0.888
Q16 0.891
Q17 0.886
Q18 0.890
Q19 0.901
Q20 0.897
Customer relation Q21 0.895
management process Q22 0.853
Customer knowledge Q23 0.823
management Q24 0.841
 60

Q25 0.811
Q26 0.865
Q27 0.857
Technology based customer re Q28 0.878
lation management Q29 0.894
Q30 0.849
Q31 0.856
Organizational performance Q32 0.902
Q33 0.907
Q34 0.910

Appendix 3 .Non Multi-collinearity Test.

Appendix Table 4. Parameter Estimator of Customer Response

Model Unstandardized Standardized t Sig. Collinearity

Coefficients Coefficients Statistics
B Std. Beta Tolerance VIF
Error
Constant 1.260 .512 2.46 .015
0
Customer .030 .060 .038 .507 .007 .971 1.024
Orientation
Customer Service .033 039 .064 .851 .001 .984 1.006
Quality
Potential(key) .132 .153 .051 .324 .000 .982 1.002
Customer focus
CRM process .880 .141 .302 .415 .000 .712 1.004
Customer .093 .115 .065 .812 .009 .861 1.016
Knowledge
Management
CRM based .020 .073 .022 .279 .205 .912 1.009
Technology
 61

Estimat Std. Wald Df Sig. 95% Confidence

e Error Interval
Lower Upper
Bound Bound
[focused = 3.00] -4.349 .127 14.893 1 .000 -6.558 -2.140
[focused = 3.01] -3.739 .941 15.776 1 .000 -5.584 -1.894
[focused = 3.02] -2.796 .764 13.414 1 .000 -4.293 -1.300
[focused = 3.09] -2.598 .740 12.338 1 .000 -4.048 -1.148
[focused = 3.22] -2.275 .708 10.337 1 .001 -3.663 -.888
[focused = 3.23] -1.698 .666 6.497 1 .011 -3.004 -.392
[focused = 3.31] -1.608 .661 5.915 1 .015 -2.904 -.312
[focused = 3.32] -1.447 .653 4.913 1 .027 -2.726 -.167
[focused = 3.34] -1.370 .649 4.456 1 .035 -2.642 -.098
[focused = 3.45] -1.292 .645 4.008 1 .045 -2.557 -.027
[focused = 3.54] -1.217 .642 3.595 1 .058 -2.476 .041
[focused = 3.78] -1.145 .639 3.209 1 .073 -2.397 .108
[focused = 3.98] -1.007 .634 2.525 1 .112 -2.249 .235
[focused = 4.00] .252 .608 .171 1 .679 -.940 1.443
[focused = 4.01] 1.033 .610 2.868 1 .090 -.162 2.228
[focused = 4.02] 1.262 .612 4.255 1 .039 .063 2.461
[focused = 4.03] 1.328 .613 4.699 1 .030 .127 2.528
[focused = 4.09] 1.394 .613 5.167 1 .023 .192 2.596
Threshold
[focused = 4.11] 1.427 .614 5.407 1 .020 .224 2.629
[focused = 4.15] 1.460 .614 5.651 1 .017 .256 2.663
[focused = 4.19] 1.492 .614 5.900 1 .015 .288 2.696
[focused = 4.21] 1.558 .615 6.419 1 .011 .353 2.764
[focused = 4.22] 1.626 .616 6.966 1 .008 .418 2.833
[focused = 4.32] 1.761 .618 8.126 1 .004 .550 2.972
[focused = 4.33] 1.795 .618 8.425 1 .004 .583 3.007
[focused = 4.34] 1.828 .619 8.731 1 .003 .616 3.041
[focused = 4.35] 1.863 .619 9.051 1 .003 .649 3.077
[focused = 4.36] .933 .620 9.707 1 .002 .717 3.149
[focused = 4.55] .968 .621 10.040 1 .002 .751 3.185
[focused = 4.65] .003 .622 10.379 1 .001 .784 3.221
[focused = 4.68] .038 .622 10.724 1 .001 .818 3.257
[focused = 4.79] .073 .623 11.082 1 .001 .853 3.294
[focused = 4.86] .111 .624 11.463 1 .001 .889 3.334
[focused = 4.87] .152 .624 11.873 1 .001 .928 3.375
[focused = 4.89] .240 .626 12.789 1 .000 1.012 3.468
[focused = 4.98] -.290 .628 13.312 1 .000 1.060 3.520
 62

[time=3.00] -.103 .306 .113 1 .737 -.704 .498

[time=3.01] .427 .422 1.024 1 .312 -.401 1.255
[time=3.06] -.245 .815 .090 1 .004 -1.842 1.352
[time=3.08] -2.612 .177 4.922 1 .027 -4.920 -.304
[time=3.09] -.636 1.037 .376 1 .540 -2.668 1.396
[time=3.12] -.154 1.048 .022 1 .000 -2.208 1.900
[time=3.13] .068 1.181 .320 1 .000 -1.646 2.983
[time=3.20] .668 1.181 .320 1 .572 -1.646 2.983
[time=3.21] -1.604 .778 4.247 1 .039 -3.129 -.078
[time=3.22] 1.880 .905 4.319 1 .038 .107 3.654
[time=3.23] -.667 .566 1.391 1 .053 -1.776 .442
[time=3.32] 1.086 .934 1.353 1 .045 -.744 2.916
[time=3.33] -1.050 .801 1.716 1 .000 -2.620 .521
[time=3.43] 1.475 1.223 1.455 1 .228 -.922 3.872
[time=3.44] -.168 .560 .090 1 .065 -1.265 .929
[time=3.45] -3.276 1.100 8.864 1 .003 -5.433 -1.119
[time=3.55] 3.144 1.121 7.862 1 .005 .946 5.342
[time=3.65] .668 1.181 .320 1 .000 -1.646 2.983
[time=3.89] -.086 .632 .019 1 .091 -1.325 1.152
[time=3.98] .668 1.181 .320 1 .072 -1.646 2.983
Location
[time=3.99] -1.055 .0419 6.361 1 .012 -1.876 -.235
[time=4.00] 0a . . 0 . . .
[over=2.00] 2.301 .776 8.797 1 .003 .780 3.821
[over=2.78] 0a . . 0 . . .
[over=3.00] 1.281 .630 4.132 1 .042 .046 2.516
[over=3.02] 1.371 .819 2.802 1 .094 -.234 2.977
[over=3.08] -5.347 .041 9.735 1 .002 -8.706 -1.988
[over=3.14] 0a . . 0 . . .
[over=3.23] 1.101 .717 2.360 1 .000 -.304 2.505
[over=3.24] 1.938 1.485 1.704 1 .000 -.972 4.849
[over=3.32] 1.042 .958 1.184 1 .277 -.835 2.920
[over=3.33] 1.592 .239 1.651 1 .199 -.836 4.019
[over=3.40] -.208 1.220 .029 1 .064 -2.600 2.183
[over=3.44] 1.091 .851 1.644 1 000 -.576 2.758
[over=3.45] -1.077 .261 .730 1 .393 -3.548 1.394
[over=3.56] -.311 .914 .066 1 .000 -2.691 2.069
[over=3.88] 1.525 1.229 1.539 1 .215 -.885 3.934
[over=3.89] -.708 .968 .535 1 .465 -2.606 1.190
[over=3.99] -2.014 .0439 5.770 1 .016 -3.658 -.371
[over=4.00] 1.304 .612 4.534 1 .033 .104 2.504
 63

[over=4.23] 2.087 1.321 2.496 1 .114 -.502 4.676

[over=4.32] 2.862 1.216 5.537 1 .019 .478 5.246
[over=4.99] .668 1.181 .320 1 .572 -1.646 2.983
[over=5.00] 0a . . 0 . . .

Link function: Complementary Log-log.

Appendix Table 5. Parameter Estimates of employees response

Estimate Std. Wald Df Sig. 95% Confidence

Error Interval
Lower Upper
Bound Bound
[focused = 3.01] -4.721 1.113 17.983 1 .000 -6.903 -2.539
[focused = 3.10] -4.309 1.035 17.337 1 .000 -6.337 -2.280
[focused = 3.13] -3.757 .963 15.233 1 .000 -5.644 -1.870
[focused = 3.14] -3.550 .943 14.183 1 .000 -5.398 -1.702
[focused = 3.22] -3.229 .917 12.386 1 .000 -5.027 -1.431
[focused = 3.31] -3.099 .909 11.623 1 .001 -4.880 -1.317
[focused = 3.34] -2.981 .902 10.925 1 .001 -4.749 -1.213
[focused = 3.51] -2.872 .896 10.274 1 .001 -4.629 -1.116
[focused = 3.65] -2.772 .891 9.674 1 .002 -4.518 -1.025
[focused = 3.78] -2.679 .887 9.125 1 .003 -4.417 -.941
[focused = 3.98] -2.592 .883 8.617 1 .003 -4.323 -.862
[focused = 3.99] -2.366 .875 7.317 1 .007 -4.080 -.652
[focused = 4.00] -1.222 .849 2.073 1 .000 -2.885 .441
Threshold
[focused = 4.01] -.124 .835 .022 1 .002 -1.759 1.512
[focused = 4.02] -.054 .834 .004 1 .000 -1.688 1.581
[focused = 4.03] .116 .833 .019 1 .009 -1.516 1.748
[focused = 4.08] .150 .833 .032 1 .000 -1.482 1.782
[focused = 4.09] .321 .832 .149 1 .000 -1.309 1.951
[focused = 4.11] .356 .831 .183 1 .069 -1.274 1.985
[focused = 4.12] .390 .831 .220 1 .039 -1.239 2.020
[focused = 4.15] .425 .831 .261 1 .009 -1.204 2.054
[focused = 4.19] .460 .831 .306 1 .080 -1.169 2.089
[focused = 4.22] .600 .831 .522 1 .070 -1.028 2.229
[focused = 4.32] .672 .831 .654 1 .019 -.956 2.300
[focused = 4.34] .781 .831 .884 1 .047 -.847 2.410
[focused = 4.35] .818 .831 .969 1 .025 -.810 2.447
 64

[focused = 4.38] .855 .831 1.060 1 .003 -.773 2.484

[focused = 4.54] .932 .831 1.257 1 .062 -.697 2.561
[focused = 4.56] .971 .831 1.364 1 .043 -.659 2.600
[focused = 4.65] 1.010 .832 1.474 1 .005 -.620 2.640
[focused = 4.67] 1.048 .832 1.589 1 .008 -.582 2.679
[focused = 4.79] 1.088 .832 1.709 1 .001 -.543 2.719
[focused = 4.87] 1.128 .832 1.836 1 .005 -.504 2.759
[focused = 4.89] 1.212 .833 2.115 1 .006 -.421 2.845
[focused = 4.99] 1.343 .835 2.589 1 .008 -.293 2.980
[customer=2.00] .481 .896 .288 1 .001 -1.276 2.238
[customer=3.00] .-265 .0310 .093 1 .001 -.513 .703
[customer=3.01] -5.220 12.409 .177 1 .004 -29.541 19.101
[customer=3.20] .436 1.384 .099 1 .000 -2.277 3.149
[customer=3.21] -3.145 .832 2.948 1 .006 -6.735 .445
[customer=4.00] 0a . . 0 . . .
[relation=3.00] .552 .296 3.472 1 .000 -.029 1.133
[relation=3.06] -.182 .652 .078 1 .060 -1.460 1.095
[relation=3.08] -1.674 1.124 .218 1 .006 -3.877 .529
[relation=3.09] -1.337 1.079 .535 1 .015 -3.451 .778
[relation=3.12] -.657 1.075 .373 1 .000 -2.763 1.450
[relation=3.20] .179 1.082 .027 1 .069 -1.942 2.300
[relation=3.21] -2.354 .0322 .209 1 .004 -3.964 -.744
[relation=3.22] 6.154 .037 .248 1 .019 -18.081 30.390
[relation=3.23] -.387 1.089 .126 1 .022 -2.522 1.748
Location [relation=3.32] 1.061 1.458 .530 1 .067 -1.796 3.918
[relation=3.33] -.383 1.639 .055 1 .000 -3.596 2.830
[relation=3.43] -.206 1.073 .037 1 .048 -2.309 1.897
[relation=3.44] -1.784 .0310 7.031 1 .008 -3.102 -.465
[relation=3.45] 1.197 .478 .410 1 .022 -23.059 45.453
[relation=3.46] .615 1.238 .247 1 .019 -1.810 3.041
[relation=3.65] -2.354 .122 4.401 1 .036 -4.553 -.155
[relation=3.89] -1.701 1.371 1.539 1 .055 -4.389 .987
[relation=3.99] .924 .762 1.472 1 .005 -.569 2.417
[relation=4.00] 0a . . 0 . . .
[way=2.38] -1.012 0.033 10.964 1 .001 -7.024 -1.801
[way=3.00] -.027 .802 .001 1 .973 -1.600 1.545
[way=3.01] -1.701 1.371 1.539 1 .000 -4.389 .987
[way=3.02] .475 1.393 .117 1 .033 -2.254 3.205
a
[way=3.09] 0 . . 0 . . .
[way=3.10] .413 .033 .096 1 .057 -2.199 3.026
 65

[way=3.12] -3.088 .393 .169 1 .681 -19.202 29.377

[way=3.20] 2.120 .269 2.791 1 .000 -.367 4.607
[way=3.23] -.434 .064 .077 1 .000 -3.499 2.630
[way=3.25] .062 .129 .002 1 .008 -2.935 3.058
[way=3.32] -1.318 .1424 .856 1 .000 -4.109 1.473
[way=3.33] 2.544 .0843 1.905 1 .007 -1.068 6.156
[way=3.40] -2.253 .0343 2.816 1 .093 -4.885 .378
[way=3.44] -.684 .0312 .271 1 .602 -3.255 1.888
[way=3.45] 6.148 .0363 .247 1 .619 -18.082 30.379
[way=3.99] .286 .061 1 .005 -1.988 2.559
[way=4.00] .653 .806 .657 1 .008 -.926 2.232
[techno=3.00] -.270 .269 1.002 1 .051 -.797 .258
[techno=3.01] .239 1.148 .044 1 .835 -2.010 2.489
[techno=3.02] -1.857 .0402 6.992 1 .008 -3.234 -.481
[techno=3.03] 0a . . 0 . . .
[techno=3.08] 5.612 12.309 .208 1 .000 -18.512 29.737
[techno=3.11] -1.889 1.107 2.913 1 .088 -4.058 .280
[techno=3.12] -.450 .768 .344 1 .050 -1.955 1.054
[techno=3.13] -1.838 .0798 5.301 1 .021 -3.402 -.273
[techno=3.20] -.020 1.302 .000 1 .088 -2.571 2.531
[techno=3.23] -1.610 .0417 8.169 1 .004 -2.781 -.518
[techno=3.32] -.596 1.062 .315 1 .070 -2.677 1.485
[techno=3.33] -.031 .765 .002 1 .000 -1.530 1.469
[techno=3.40] .075 1.276 .003 1 .000 -2.427 2.576

Link function: Complementary Log-log.

Appendix Table 6. Questionnaire to be filled by Customers.

HARAMAYA YNIVESITY
COLLEGE OF BUSINESS AND ECONOMICS
DEPARTMENT OF MANAGEMENT
MBA PROGRAM
Questionnaire to be filled by Customers of Harar Brewery Share Company

Dear Respondents:-

I would like to express my deep appreciation for your generous time, honest and prompt
responses. Objective:-This questionnaire is designed to collect data about the impact of
 66

Customer Relationship Management on organizational Performance of Harar Brewery Share

Company in Harar city. The information that you offer me with this questionnaire used as a
primary data in my case study which I am conducting as a partial fulfillment of the
requirements for the degree of Masters of Business Administration (MBA) at Haramaya
University. Therefore, this research is to be evaluated in terms of its contribution to our
understanding of Customer Relationship Management and Its impact on organization’s
Performance and its contribution to improvements in the area.

General Instructions
 No need of writing your name.
 In all cases where answer options are available please tick (√) in the appropriate box.
Confidentiality
I want to assure you that this research is only for academic purpose authorized by the
Haramaya University. No other person could access the collected data. In any sort of report I
might publish, but, I can not include any information that will make it possible to identify any
respondents.

PART I: Demographic Information

1. Gender: Male Female

2. Age 18-30 30-40 40-60 60-65 above 65

3. Working Experience 1-8 9-16 17-25 26-35 36-45

4. Education level: Certificate Diploma Degree Maters PhD

PART II: Please state your level of opinion for each given statement using the following
Scales
 67

1 = Strongly Disagree 2 = Disagree 3 = Neutral 4 = Agree 5 = Strongly Agree

No Response of customer respondents towards the impact of customer Agreement

relation management on customer satisfaction. scale

Items 1 2 3 4 5

Customer Orientation

1 Harar Brewery Share Company understands well the value of the

value, belief of its customer.
The organization is competent in maintaining customer centered
2 behavior with its customer?
“I am confident that as customer can give a positive response about
3 this organization which have customer oriented behavior in the
organization.

4 There is customer centered culture within the organization.

Customer service quality

Over all, I am very satisfied with the way company performed
5

6 The organization providing quality service to increase customer

satisfaction
The organization is spreading distribution channel near to customers
7 to minimize transportation cost to customers
 68

Appendix 4. Questionnaire to be filled by Employees

HARAMAYA YNIVESITY COLLEGE OF BUSINESS AND ECONOMICS
DEPARTMENT OF MANAGEMENT
MBA PROGRAM

Questionnaire to be filled by Employees of Harar Brewery Share Company

Dear Respondents:-
I would like to express my deep appreciation for your generous time, honest and prompt
responses. Objective:-This questionnaire is designed to collect data about the impact of
Customer Relationship Management on organizational Performance of Harar Brewery Share
Company in Harar city. The information that you offer me with this questionnaire used as a
primary data in my case study which I am conducting as a partial fulfillment of the
requirements for the degree of Masters of Business Administration (MBA) at Haramaya
University. Therefore, this research is to be evaluated in terms of its contribution to our
understanding of Customer Relationship Management and Its impact on organization’s
Performance and its contribution to improvements in the area.
General Instructions
 No need of writing your name.
 In all cases where answer options are available please tick (√) in the appropriate box.

Confidentiality

I want to assure you that this research is only for academic purpose authorized by the
Haramaya University. No other person could access the collected data. In any sort of report I
might publish, but, I can not include any information that will make it possible to identify any
respondents.

PART I: Demographic Information

1. Gender: Male Female

2. Age 18-30 30-40 40-60 60-65 above 65

 69

3. Working experience 1-8 9-16 17-25 26-34 35-45

4. Education level: Certificate Diploma Degree Mater PhD

PART II: Please state your level of opinion for each given statement using the following
Scales

This part of questionnaire is filed by Employees of Harar Brewery Share Company

1 = Strongly Disagree 2 = Disagree 3 = Neutral 4 = Agree 5 = strongly agree

Response of employee’s respondents towards the effect of customer
relation management on customer satisfaction.
No 1 2 3 4 5
Potential Customers Focus
Our organization works with potential customers to customize our
8 offerings

9 Setting clear objectives and strategies for potential customers

10 Meeting and ensuring potential customer needs

11 All employees in our organization treat customers with special care.

12 The organization provides consistent quality services at different

time

13 Employees of the organization are never too busy to respond to

customers requests
Customer loyalty value is the essential criterion for potential
14 customer Selection

15 The behavior of the employees inspires confidence in customers

Customer Relation Management Process

There is interactive communications between the customers and
16
the firm in our organization( Information reciprocity)
Our organization use information to understand the needs of the
17
 70

customers and to develop appropriate responses to such needs

(Information process)
In our organization there is acquisition of information from all
18
contact points with customer( Information capture )

Customer Knowledge Management

Our organization provides channels to enable ongoing, two-way
19
communication with our key customers.

20 Our organization manages all customer communications

Our organization fully understands the needs of our potential
21
customers via knowledge learning

22 Our organization takes customer feedback seriously

23 Our organizations will replies customer feedback promptly.

Technology Based Customer Relation Management.

24 My organization maintains a comprehensive database of our
customers
25 Technically skilled person is employed to maintain customer data
base for the utilization of computer technology in building custome
r relationships
26 We disseminating information to customers through e-mail to
reduce customer waiting time
27 We communicate with our customers through telephones to meet
their urgent requests and needs
Organization’s Performance(Customer satisfaction)

28 Our organization can anticipate how to satisfy our customer’s

future preferences.
29 Our organization focus on providing distinctive service to customer

30 Understand and wish to provide quality services for customers

 71

35. Write your opinion, to what extent does good relationship with customer is important for
organizational performance?

.-----------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
36. How do you see your organization efforts to create good relationship with customers?

------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------

37. In what way the organization can improve to render service to customer?

------------------------------------------------------------------------------------------------------------------
------------------------ -----------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------