Impact Of Co-Creation Of Customers/Consumer Retention And Satisfaction
Chapter one of Impact Of Co-Creation Of Customers/Consumer Retention And Satisfaction
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
It is an obvious fact that every organization tends to move to a position where customer satisfaction is given a favorable consideration. In other words, customer satisfaction is a construct that must be met optimally for efficient and effective achievement of stated objectives, and for smooth continuation of business. Customer satisfaction is an integral part of organizational objectives that must be fulfilled for an organization to maintain its customers. Customers are valuable asset that must be properly kept satisfied (Day, 1994). The existence of any business oriented organization is the performance of business activities that will flow from the organization to identified target customers through the provision of need satisfying packages in order to satisfy the needs of the customers, and achieve the stated objectives set by the organization. The satisfaction of the needs of the respective customers thereby gives room for an opportunity to retain the customer and co-create customer for continuous patronage. In a similar manner, customer retention and consumer co-creation are strong indicators of organizational objectives. The level of customer retention and co-creation dictates to some extent the level of achievement of organizational, objectives (Day, 1994). In other words, if customers fail to patronize or repeat the purchase of the products of the organization, definitely sales and profitability of the organization will drop which will adversely affects the entire performance of the firm. In a nut shell, the degree at which organization retain and co-create their customers depends to a large extent the degree of satisfaction derived from the products of the organizations. Co-creation is a management initiative, or form of economic strategy, that brings different parties together (for instance, a company and a group of customers), in order to jointly produce a mutually valued outcome.
Importance of customer satisfaction in today’s dynamic corporate environment is obvious as it greatly influences customers repurchase intentions whereas dissatisfaction has been seen as a primary factor for customer’s intention to switch (Faiza, NAwaz and Khan 2001). It is therefore obvious for business organization to create and maintain favourable relationship with their customers in order to not only give room for repeat purchase but also create room for customer co-creation and retention. When there is a favourable relationship between the organization and the customers, customers tend to repeat purchase and continue patronizing the organization, thereby telling their favourable experiences with other members of the society which can have positive effect on the organization. More so, dissatisfied customers are more likely to tell people about their unfortunate experiences which will negatively affect the performance of the organization (Olajide and Israel, 2012). In other to achieve customer satisfaction, organization must be able to build and maintain long lasting relationship with customers through satisfying various customers needs and demand which resultantly motivates them to continue to do business with the organization on on-going basis. (Ibojo, 2014). Ibojo (2014) was of the view that, for an organization to constantly co-create and retain its numerous customers in this competitive global village, there is the need to strategically constantly satisfying the needs of the customers. He was of the opinion that a satisfied and retained customer will give room for repeat purchase while unsatisfied customer may decide to switch to other brands or competitive brands of other organizations. Customer satisfaction is an integral part of business objectives of any organization irrespective of the nature of the organization and however, more pronounced in business oriented organizations can be achieved through understanding the needs of the target market and the provision of needs satisfying packages in meeting and satisfying these needs at a greater extent, thus, building and maintaining long lasting and favourable relationship with the target market (Olajide and Israel, 2012). Co-created value arises in the form of personalized, unique experiences for the customer (value-in-use) and ongoing revenue, learning and enhanced market performance drivers for the firm (loyalty, relationships, customer word of mouth).
1.2 STATEMENT OF THE PROBLEM
The need to create and retain customer satisfaction has been emphasized by researchers and academicians (Ibojo, et al 2013). This is because the realization of other business objectives leans on the level and degree of satisfaction received by the target market. This is the reason why organizations are focusing on customer satisfaction, co-creation of customers and customer retention. Customer satisfaction is the foundation for any organization to co-create and retain its existing customers (Khan, 2002). He was of the opinion that customers who are satisfied are likely to have positive relationship with the organization. It is therefore necessary for organizations to make sure that all activities tend to the satisfaction of their customers. This will create a path way for customers to see the possibility of integrating their co-creation with the organization, taken into cognizance continued purchasing and repurchasing of the organization’s products.
1.3 OBJECTIVES OF THE STUDY
1. To examine the impact of co-creation of customers on satisfaction in an organization.
2. To examine the impact of consumer retention on satisfaction in an organization.
3. To examine the impact of co-creation of customers/consumer retention on consumer loyalty.
1.4 RESEARCH QUESTIONS
1. What is the impact of co-creation of customers on satisfaction in an organization?
2. What is the impact of consumer retention on satisfaction in an organization?
3. What is the impact of co-creation of customers/consumer retention on consumer loyalty?
1.5 HYPOTHESIS
Hypothesis one
HO1: There is no significant relationship between co-creation of customers and satisfaction in an organization
HA1: There is significant relationship between co-creation of customers and satisfaction in an organization
Hypothesis two
HO2: There is no significant relationship between consumer retention and satisfaction in an organization
HA2: There is significant relationship between consumer retention and satisfaction in an organization
Hypothesis three
HO3: There is no significant relationship between co-creation of customers/consumer retention and customer loyalty in an organization
HA3: There is significant relationship between co-creation of customers/consumer retention and customer loyalty in an organization
1.6 SIGNIFICANCE OF THE STUDY
The following are the significance of this study:
1. Findings from this study will be useful for the business administrators and the general public the impacts of co-creation of customers/consumer retention and satisfaction on organizational performance, and considering them as a tool for development.
2. This research will be a contribution to the body of literature in the area of the impacts of co-creation of customers/consumer retention and satisfaction, thereby constituting the empirical literature for future research in the subject area.
1.7 SCOPE/LIMITATIONS OF THE STUDY
This study will cover the relationship between the co-creation of customers, consumer retention and satisfaction in an organization.
LIMITATION OF STUDY
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).
Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.
1.8 DEFINITION OF TERMS
Customer: a person or organization that buys goods or services from a store or business
Co-creation: Co-creation is a management initiative, or form of economic strategy, that brings different parties together (for instance, a company and a group of customers), in order to jointly produce a mutually valued outcome.
Consumer: a person who purchases goods and services for personal use.
Loyalty: a strong feeling of support
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