CUSTOMER INTEGRATION AND MARKETING SUCCESS OF AIRLINES INDUSTRY IN PORTHARCOURT METROPOLIS

Abstract

This study was on customer integration and marketing success of airline industry in portharcourt. Three objectives were raised which included: To find out the relationship between lack of motivation of the customer and marketing success of airline industry in Portharcourt, to find out the relationship between coordination overhead and marketing success of airline industry in portharcourt and to find out the relationship between loss of knowhow and marketing success of airline industry in portharcourt. The total population for the study is 75 staffs of med-view airline and Arik air. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. The data collected were presented in tables and analyzed using simple percentages and frequencies.

 

Chapter one

Introduction

1.1Background of the study

Customer integration is a concept for establishing structures that make customer orientation work. The crucial point is that the customer is the basic source of the values that an enterprise creates. Thus, processes have to be designed to integrate the requirements of the customer into the processes of the supplier (Abramovici, 2004)

Companies are successful when they identify the needs of particular market segments and offer the products and services that satisfy those needs. The marketing function studies the markets that are accessible to a company and the needs of the members of those markets

The airline industry as such first appeared in the middle of the 1920s – twenty years after the Wright Brothers’ flight at Kitty Hawk – when the early commercial airlines were carrying barely six thousand passengers a year. The industry has always been used as a positive (and sometimes also negative) benchmark for developments in marketing, customer service and, more recently, relationship marketing. Air travel has constantly found itself in the limelight thanks to its public dimension and adventurous character. For instance, just think of the numerous horror stories that have been written about all the terrible things that can happen to an airline passenger, and consider the major innovations in marketing and service areas which have stemmed directly from this industry

In its early days, the industry’s main concerns were to establish the right balance between supply and demand and to provide an excellent service for the exclusive clientele which had the desire and the financial means to fly within and outside the boundaries of their home continent. After World War II, the airline industry experienced a tremendous boom; not only because air travel for business purposes was a rapidly growing sector, but also because the idea of travelling for fun and leisure was also increasing in appeal. A growing number of national governments set up airlines and private airlines were founded in the US (which then merged to become even bigger companies). Regardless, the success of the airline industry was based on operations, i.e. owning a sufficient number of planes and controlling enough routes to serve major cities, and the development of “invisible” innovations, such as the computer reservations system (CRS).

In this competitive and globalize of airlines industry, customer of each firm is of crucial assets which the firm needs to preserve and expand for its profitability (Hanley, 2008). Many market researchers highlighted that loyal customers have an important contribution in market share and to a company’s profitability. It is undoubted the fact that loyal customers can be seen as the most vital factor of an organization to achieve the financial performance in the long-term. In addition, transforming indifferent customers into loyal ones and establishing a long-term relationship with customers is crucial for business-success. It is therefore, necessary to establish and maintain of customer loyalty as a key goal for airlines in order to promote competitive advantage in the market place. Consequently, the maintenance of significant customers is a vital target which airline management need to understand to strengthen customer loyalty for the airline market.

Customer integration is inherently suitable for services, because many services could not be provided without the customer’s contribution and active participation in the first place (Chervonnaya, 2003) The overall economic importance of customer integration is further increased by more and more traditionally manufacturing and goods oriented companies developing their business models and value propositions to include services (Dohmen, Kryvinska & Strauss, 2012). Customer integration approaches comprise one or more typical functions of the customer. These are known as customer roles. However, there is still a lack of a critical assessment of the use of individual customer roles by industry. It is well-recognised that customer integration has positive effects on companies (Büttgen, 2009). Other authors also report negative effects (Enkel, Kausch & Gassmann, 2005). When deciding whether to use customer integration and how to implement the approach, management has to consider the potential effects of the individual customer roles on the company’s processes. This includes the consideration of both positive and negative consequences of customer integration (Büttgen, 2009). Based on this background the researcher wants to investigate customer integration and marketing success of airline industry in Portharcourt

Statement of the problem

The positive effects of customer integration mainly impact the customer relationship and the efficiency and effectiveness of the business processes. Literature highlights three main factors, which are positively affected by the integration of customers: Decreased costs (Büttgen, 2009; Xue and Harker 2002), increased customer satisfaction (Auh et al. 2007), and increased market shares (Herstatt and von Hippel, 1992). While the positive factors are often discussed in the literature, there is less research on potentially negative effects. However, as Enkel et al. (2005) stated, it is necessary for a company especially the airline industry to identify the risks, which are introduced by customer integration to manage and minimise them as far as possible. Literature have identified three main problems that can arise in customer integration: Lack of motivation of the customer (Kurzmann and Reinecke, 2009), coordination overhead (Büttgen, 2009), and the loss of know-how (Enkel et al. 2005)

Objective of the study

The main objective of the study is to investigate customer integration and marketing success of airline industry in Portharcourt. The specific objectives are;

1. To find out the relationship between lack of motivation of the customer and marketing success of airline industry in Portharcourt
2. To find out the relationship between coordination overhead and marketing success of airline industry in portharcourt
3. To find out the relationship between loss of knowhow and marketing success of airline industry in portharcourt

Research Question

The following research questions are formulated to guide the study;

1. What is the relationship between lack of motivation of the customer and marketing success of airline industry in Portharcourt?
2. What is the relationship between coordination overhead and marketing success of airline industry in portharcourt?
3. What is the relationship between loss of knowhow and marketing success of airline industry in portharcourt?

Research Hypotheses

The following research hypotheses are formulated;

H1: there is no relationship between lack of motivation of the customer and marketing success of airline industry in Portharcourt

H2: there is no relationship between coordination overhead and marketing success of airline industry in portharcourt

H3: there is no relationship between loss of knowhow and marketing success of airline industry in portharcourt

Significance of the study

The study will be very significant to students, lecturers, ministry of aviation and policy makers. The study will give a clear insight on the customer integration and marketing success of airlines industry. The study will education  organizations especially on customers relationship. The study will also serve as a reference to other researchers that will embark on the related topic

Scope of the study

The scope of the study covers customer integration and marketing success of airline industry. The study will be limited to airline industry in portharcourt

Limitation of the study

Limitations/constraints are inevitable in carrying out a research work of this nature. However, in the course of this research, the following constraints were encountered thus:

1. Non-availability of enough resources (finance): A work of this nature is very tasking financially, money had to be spent at various stages of the research such resources which may aid proper carrying out of the study were not adequately available.
2. Time factor: The time used in carrying out the research work is relatively not enough to bring the best information out of it. However, I hope that the little that is contained in this study will go a long way in solving many greater problems.

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