1.1 Introduction
Customer retention strategy is the marketing oriented goals that prevent customers from competitors (Ramakrishnan, 2006). A competitive advantage and higher customer retention are the outcomes of improved customer satisfaction and greater quality of service (Dominici and Guzzo 2010). Since this increases client happiness and loyalty, a service provider's success mostly depends on the quality of its offers (Panda, 2003).
Customer satisfaction is one of the main objectives of the marketing process (Kandampully et al., 2000). Enhancing customer satisfaction has a positive effect on factors that influence the likelihood that customers will make more purchases (Choi & Chu, 2001). Regardless of whether the services meet their wants or not, customer satisfaction is the condition in which customers are happy with the offerings (Andaleeb and Conway, 2006).
This chapter will address the background information that motivated this study, the challenges that prompted it, its aim, and its objectives as a preface to subsequent sections of the study. Additional factors include the study's significance, scope, limitations, research questions and hypotheses, and the definition of technical terms.
1.2 Background of Study
Total quality management practice is a firm-wide management philosophy of continuously improving the quality of the products, services, or processes by focusing on the customers’ needs and expectations to enhance customer retention, satisfaction and firm performance. There are mixed results about the relationship between total quality management practices and customer retention, satisfaction and performance. However, this study will examine the impact of total quality management practices on customer retention and satisfaction.
The concept of total quality management practice has been developed as a result of intense global competition. Organizations with international trade and global competition have paid considerable attention to philosophies of total quality management, procedures, tools and techniques. According to Juran (2001), international competition requires higher levels of quality achievement by organizations. Total quality management is the popular area of research in management.
Total Quality Management has been practiced in diverse manufacturing industries and now there is a growing interest in the service sector, even from non-profit organizations (Nwabueze, 1998). But the service industry differs from the manufacturing industry in a number of ways, such as service intangibility, simultaneity of production, delivery and consumption, perishability, variability of expectations of the customers and the participatory role of customers in the service delivery but the main aim by both sectors is to achieve customer retention and satisfaction. Several authors have proposed models of total quality management. However, most of the models are based on theories and practices that are primarily derived from the manufacturing industry where this has been effectively practices in the recent decades.
Total quality management has become the buzz word in the management practice. It has been defined in many different ways. The International Standard ISO 8402, Quality Management and Quality Assurance-Terminology has defined total quality management as the management approach of an organization, centered on quality, based on the participation of all its members and aiming at long-term success through customer satisfaction, and benefits to all members of the organization and to society (Ljungstrom & Klefsjo, 2002). The tenets of total quality are continuous improvement, top management leadership commitment to the goal of customer satisfaction and retention, employee empowerment, and customer focus (Ugboro and Obeng, 2000).
Temtime and Solomon (2002) said that total quality management seeks continuous improvement in the quality of all processes, people, products, and services of an organization. Total quality management is also a systematic approach to management that aims to enhance value to customers by designing and continually improving organizational processes and systems (Kartha, 2004).
Customer satisfaction is the degree to which a customer feels that a firm has performed up to their expectations (Angelova and Zekiri, 2011). Another way to characterize customer happiness is as a function of expectations and disconfirmation from comparing perceived performance to expectations. Accordingly, positive or positive disconfirmation of customer expectations leads to satisfaction, while negative disconfirmation of consumer expectations leads to unhappiness (Forero et al., 2017). Therefore, in Nigeria where the research was carried out, the activities that was conducted is to examine the Impact of Total Quality Management Practices on Customer Retention and Satisfaction.
1.3 Statement of Problems
Investigation revealed that many researchers think that total quality management is old news, many of the new continuous improvement initiatives are based on total quality management philosophies. Total quality management encompasses a number of different initiatives. Juran (2001) wrote that the benefits and goals of total quality are lower costs, higher revenues, delighted customers (as seen in customer retention and satisfaction), and empowered employees. Costs can be lowered by reducing errors, reducing rework, and reducing non-value added work. Higher quality can also equate to higher revenues through satisfied customers, increased market share, improved customer retention, more loyal customers, and premium prices. Customers continue to demand higher quality goods and services. Delighted customers purchase over and over again, advertise goods and services for the company, and check first when they are going to buy anything else to see what is offered by the company they are loyal to.
However, it is not easy for management to implement total quality management, because it means a cultural overhaul (Rao, Youssef, & Stratton, 2004). Deming (1981) also attested that the benefits of better quality through improvement of the process are thus not just better quality and the long-range improvement of market-position, but also greater productivity and profit. Improvement of the process increases uniformity of output of product, reduces mistakes, and reduces waste of manpower, machine-time, and materials. Kaynak (2003) suggested that a positive relationship exists between the extent to which companies implement total quality management and performance as a result of satisfied customers.
1.4 Aim and Objectives of Study
The aim of the study is to examine the Impact of Total Quality Management Practices on Customer Retention and Satisfaction. In achieving this aim, the following specific objectives were laid out as follows:
- To examine the impact of total quality management practices on customer retention and satisfaction;
- To examine the approaches to the philosophy of total quality management; and
- To determine the factors affecting the practice of total quality management in companies.
1.5 Research Questions
The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:
- What is the impact of total quality management practices on customer retention and satisfaction?
- What are the approaches to the philosophy of total quality management?
- What are the factors affecting the practice of total quality management in companies?
1.6 Research Hypothesis
In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.
Hypothesis One
- H0: There are no significant relationship between total quality management practices and customer retention and satisfaction
- H1: There are significant relationship between total quality management practices and customer retention and satisfaction
1.7 Significance of Study
The findings from this study will educate the managements of companies on the approaches to the practice of total quality management and its subsequent effect on customer retention and satisfaction.
This research will be a contribution to the body of literature in the area of the effect of personality trait on student’s academic performance, thereby constituting the empirical literature for future research in the subject area.
1.8 Scope of Study
The scope of this research is focused on the Impact of Total Quality Management Practices on Customer Retention and Satisfaction using Chicken Republic Eatery in Edo State as a case study. This study will also cover the method of total quality management practice adopted by the selected company so as to ascertain its effect on customer retention and satisfaction.
1.9 Limitations of the Study
During the course of this study, there were some problems encountered which stood as limitations to the research work. Some of the limitations include:
- Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
- Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
- Initial Cooperation Delay from Respondents: A particular limitation of this work came as a result of the respondent refusal to offer their cooperation at the initial time they were contacted. This contributed in making the success of this research study difficult.
1.10 Definition of Terms
Customer Satisfaction:
It refers the meeting or exceeding customer expectations.
Satisfaction:
This is the customer level of approval when a company product perceived performance with his or her performance.
Impact:
This is a measure of the tangible and intangible effects on consequences of one thing or entity’s action or influence upon another.
