Maldives National University

Bachelor of Business (Management and Marketing)

Business Research Methods (BUS307)

Semester 6

Nashidha Mohamed
042735
Lecturer: Mariyam Niyaf
Date: 30th September 2017
Bachelor of Business (Management & Marketing)
BUS307 Nashidha Mohamed Id:42735

Contents
1. Abstract ................................................................................................................................................. 3
2. Introduction .......................................................................................................................................... 4
2.1 Overview of the Company .................................................................................................................. 4
2.2 Problem Statement ............................................................................................................................. 4
2.3 Research Objectives ............................................................................................................................ 5
2.4 Rationale of the Research ................................................................................................................... 5
2.5 Hypothesis........................................................................................................................................... 6
2.6 Definitions of terms ............................................................................................................................ 7
Customer Satisfaction ........................................................................................................................... 7
Customer Loyalty .................................................................................................................................. 7
Customer Retention .............................................................................................................................. 7
Quantitative Research........................................................................................................................... 7
Qualitative Research ............................................................................................................................. 7
3. Literature Review ...................................................................................................................................... 8
3.1Customer satisfaction .......................................................................................................................... 8
3.2 Why customer satisfaction is important ............................................................................................. 9
3.3 Customer Loyalty ................................................................................................................................ 9
3.4 Relationship between Customer Satisfaction and Customer Loyalty ............................................... 10
4. Research Methods .............................................................................................................................. 11
4.1 Methodological Framework .............................................................................................................. 11
Quantitative ........................................................................................................................................ 11
Qualitative ........................................................................................................................................... 11
Sample size.......................................................................................................................................... 12
4.2 Research Design ................................................................................................................................ 12
4.3 Instrumentation and data collection ................................................................................................ 13
5. Timeline and Budget ........................................................................................................................... 14
5.1 Budget ............................................................................................................................................... 14
Reference .................................................................................................................................................... 15
Annex .......................................................................................................................................................... 16

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Bachelor of Business (Management & Marketing)
BUS307 Nashidha Mohamed Id:42735

Assessment of customer satisfaction in Baraabaru plc and discovering the

relationship between customer satisfaction and customer loyalty.

1. Abstract

This project involves discovering how customer satisfaction is associated with customer loyalty
and how important customer satisfaction is for an organization to remain competitive in the
marketplace. This research proposal is made in order to find ways to make loyal and satisfied
customers in Baraabaru since there is huge competition in the island. To improve the goods and
services provided in baraabaru and to come up with the competition in Kulhudhuffushi a survey
will be carried out among the retail and wholesale customers of Baraabaru. The wholesale
customers will be chosen from a list of registered wholesale customers in Baraabaru by random
selection and will be having telephone interviews with the selected customers. To gather
information form retail customers, Online questionnaires will be shared in Baraabaru Facebook
page, Viber groups and sent through SMS.

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Bachelor of Business (Management & Marketing)
BUS307 Nashidha Mohamed Id:42735

2. Introduction

2.1 Overview of the Company

Baraabaru Private Limited is one of the leading private business organizations in Kulhudhuffushi
and nearby islands, selling wholesale and retail products, as well as working as a Maldivian
travel agency. The total number of employees working in Baraabaru is ten. Baraabaru Pvt Ltd is
owned by Ahmed Aslam, which was opened in November 1988. Firstly, Baraabaru wholesaled
only staple foods. Later on, this business widens their wholesale business to a variety of
products. In the year 2014, Baraabaru stepped up to another level by opening Baraabaru Travel
Agency, which sells Maldivian Airline tickets in Kulhudhuffushi.

2.2 Problem Statement

This research proposal aims to explore the relationship between customer satisfaction and
customer loyalty in Baraabaru wholesale and retail business. In order to become more successful
than the competitors, every business needs to find ways to retain their customers. With the help
of this research proposal, we would be able to estimate the current satisfaction level of the
customers in Baraabaru. This would help Baraabaru to identify the reasons for unsatisfied
customers and find solutions for it. Another reason for preparing this proposal is to find ways to
make the customers loyal. Since, it is difficult to retain the customers of Baraabaru because of
huge competition on the island.

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Bachelor of Business (Management & Marketing)
BUS307 Nashidha Mohamed Id:42735

2.3 Research Objectives

The main Purpose of preparing this proposal is to estimate the satisfaction level of Baraabaru and
improve the products and services provided to the customers according to the satisfaction
dimensions and to examine how satisfaction of customers is associated with loyalty. This
research aims to find answers to the following questions.

To assure whether the customers of Baraabaru is satisfied or not

To determine the reasons for not satisfied customers
To identify the reasons for dissatisfied customers
To identify the main factors determining customer satisfaction
To identify the main factors determining customer loyalty
To identify the various aspects of customer satisfaction and determine the relationship
between customer satisfaction and loyalty.
To provide appropriate recommendations to improve the products and services provided
in Baraabaru
To identify whether customer needs are fulfilled

2.4 Rationale of the Research

Gaining customer satisfaction is one of the primary objectives of businesses. As it is believed

that customer satisfaction has a significant impact on the market share, customer loyalty, and
retention. Therefore in order to be successful, every business needs to identify the main factors
that are associated with customer satisfaction and improve the areas they lack in delivering the
products and services to remain competitive in the marketplace.

Issues and concerns which are related to customers are the main aspects that every organization
needs to consider and improve. Without customers, the organization would not exist. The main
aim of the organization would be to fulfill the needs of the customers which would then help
them to generate revenue and achieve business aims. Organizations are dependent upon their
customers. If they do not develop customer loyalty and satisfaction, they could lose their
customers and could not even attract the new customers in the competitive business
environments.

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Bachelor of Business (Management & Marketing)
BUS307 Nashidha Mohamed Id:42735

In this project, I will be including the factors that affect customer satisfaction and loyalty and
analyze how customer satisfaction influences the loyalty of customers. By the end of the
research, I will be able to figure out the customer's state of mind about the products and services
provided in Baraabaru wholesale and retail business and I will also be able to get an idea of to
what extent customers are happy with the customer service provided by the employees of
Baraabaru Pvt.

Customer satisfaction is an important issue which needs to be researched as it is related to

customers which is the most important asset of any organization. Without customers,
organizations cannot achieve their business objectives. Therefore, this research would help to
generate proper suggestions to improve the customer satisfaction and find solutions for customer
dissatisfaction in Baraabaru. Furthermore, it will also help to recognize the factors that lead to
customer loyalty and see how important is customer satisfaction in relation to customer loyalty.

2.5 Hypothesis

In this proposal, I would be researching about the correlation between customer satisfaction and
loyalty. Therefore, customer satisfaction is the independent variable and customer loyalty is the
dependent variable. Hypothesis testing will be carried out with respect to customer satisfaction
and customer loyalty where the results would be generated. After developing the Null
hypotheses (H0) and Alternate Hypotheses (H1) statistical analysis would be carried out to find
the results of the predictions mentioned in the Hypotheses.

H0 = There is no significant relationship between customer satisfaction and loyalty

H1 = There is a significant relationship between customer satisfaction and loyalty

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Bachelor of Business (Management & Marketing)
BUS307 Nashidha Mohamed Id:42735

2.6 Definitions of terms

Customer Satisfaction

Customer satisfaction is a marketing term that measures how products or services supplied by a
company meet or exceeds a customers expectation. (Beard, 2014)

Customer Loyalty

Customer loyalty is the degree to which customers experience positive feelings for and exhibit
positive behaviors toward a company/brand. (Hayes, 2013)

Customer Retention

Customer retention refers to the activities and actions companies and organizations take to
reduce the number of customer defections. (Galetto, 2017)

Quantitative Research

Quantitative Research is used to quantify the problem by way of generating numerical data or
data that can be transformed into usable statistic (E.Wyse, 2011). Quantitative data collection
includes online surveys, questionnaires etc.

Qualitative Research

Qualitative Research is also called as exploratory research. It is used to gain an understanding of

underlying reasons, opinions, and motivations(E.Wyse, 2011).Some common methods of
qualitative research is focus group interviews, observations etc

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Bachelor of Business (Management & Marketing)
BUS307 Nashidha Mohamed Id:42735

3. Literature Review

3.1Customer satisfaction

Oliver (1997) specifies customer satisfaction as pleasurable fulfillment; as such, the consumer
views consumption as satisfying some need, desire, goal, etc., in which its fulfillment is
pleasurable. Customer satisfaction is very important to the success of any business. Because the
main aim of the organization would be to fulfill the needs and wants of the customers which
would help them to generate revenue and achieve business objectives. Customer satisfaction is
strongly influenced by customer expectations. The gap between perceived quality and expected
quality, called "expectancy disconfirmation" is a strong predictor of customer satisfaction
(Oliver, 1980). Customer satisfaction is a marketing term that measures how products or services
supplied by a company meet or exceeds a customer's expectation (Beard, 2014).

Customer satisfaction is defined as a customers overall evaluation of the performance of an

offering to date (Johnson and Fornell 1991). This overall satisfaction has a strong positive effect
on customer loyalty intentions across a wide range of product and service categories, including
telecommunications services (Fornell 1992; Fornell et al. 1996). It also contains a significant
affective component, which is created through repeated product or service usage (Oliver 1999).
Therefore, repeat purchases or customer retention is an important sign that shows whether
customers are satisfied or not. However, some factors like convenience in location may also be
the cause for customer retention other than being satisfied. As an overall evaluation that is built
up over time, satisfaction typically mediates the effects of product quality, service quality, and
price or payment equity on loyalty (Bolton and Lemon 1999; Fornell et al. 1996).

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Bachelor of Business (Management & Marketing)
BUS307 Nashidha Mohamed Id:42735

3.2 Why customer satisfaction is important

Customer satisfaction is important because it provides marketers and business owners with a
metric that they can use to manage and improve their businesses (Beard, 2014). Customer
satisfaction is important because it reduces negative word of mouth and satisfied customers last
longer, purchase more and they remain loyal to the business. In order to eliminate negative word
of mouth, businesses need to measure customer satisfaction on an ongoing basis. Tracking
changes in satisfaction will help you identify if customers are actually happy with the product or
service (Beard, 2014). Dulskis (2010) identifies the following consumer satisfaction factors:
service provision, its quality; accessibility; the delivery rate (efficiency); professionalism;
informative service; understanding the customer; friendly staff, their attitude, and attention; the
physical environment. Customer satisfaction plays an important role within your business.
Customer satisfaction is tightly linked to revenue and repeat purchase (Beard, 2014).

3.3 Customer Loyalty

Customer loyalty is one of the most important customer metrics in marketing due to the profit
impact of maintaining a loyal customer base (Oliver 1999). customer loyalty indicates customer
retention, the most important customer metric for firm profitability because loyalty measures
customers' intention to repurchase a product or service (Bae, 2012).

Oliver (1997) defines customer loyalty as a deeply held commitment to re-buy or re-patronize a
preferred product or service consistently in the future, despite situation influences and marketing
efforts having the potential to cause switching behaviors (p. 392).

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Bachelor of Business (Management & Marketing)
BUS307 Nashidha Mohamed Id:42735

3.4 Relationship between Customer Satisfaction and Customer Loyalty

The association between customer satisfaction and customer loyalty is one of the essential
relationships between marketing theory and practice, because loyalty impacts firms' financial
performance and value (Bae, 2012). Also, the association between customer satisfaction and
customer loyalty links customer attitudes (e.g., how much customers are satisfied with firms
product or service) to customer behavior (e.g., customers actual repurchase behavior for the
product or service) (Bae, 2012).

Early research on the association between customer satisfaction and loyalty has clearly
established a positive relationship between customer satisfaction and customer loyalty (Anderson
1996 ).

On the other hand, several studies indicate that this positive association fails to be generalizable.
Customer satisfaction does not always translate into customer loyalty (Bae, 2012). Customer
satisfaction, by itself, does not unconditionally guarantee customers actual repeated purchase
behavior; as a result, managers must try to both achieve exceptional customer satisfaction and
convert this attitude satisfaction into accordingly relevant repurchase behavior or attitude,
behavioral or attitudinal loyalty (Reichheld 1996).
Therefore, the positive relationship between customer satisfaction and loyalty applies in some
situations, but not for others (Oliver 1999).

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Bachelor of Business (Management & Marketing)
BUS307 Nashidha Mohamed Id:42735

4. Research Methods

4.1 Methodological Framework

In this research, a qualitative and quantitative method of data collection will be used to analyze
the customer satisfaction level in Baraabaru.

Quantitative

To do the quantitative analysis or descriptive research, a pre-designed questionnaire will be used.

The questionnaire will be made online by using google forms. These survey forms will be shared
Facebook, Viber groups, and SMS.

Qualitative

As a qualitative analysis, phone interviews will be used. I have chosen this method to reach more
wholesale customers. With reference to information given by the owner of Baraabaru,
(Mr.Ahmed Aslam) most of the registered wholesale customers are above 50 years. Therefore, I
have decided to conduct phone interviews with randomly selected wholesale customers.

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Bachelor of Business (Management & Marketing)
BUS307 Nashidha Mohamed Id:42735

Sample size

As Baraabaru is one of the largest organizations in Kulhudhuffushi, there will be so many

customers. Therefore, the actual number of the retail customers is unknown. Due to this, I will be
trying to collect the maximum number of responses during the time allocated for the survey.
However, the number of registered wholesale customers can be known. Hence, I will be
randomly selecting 10 wholesale customers and conduct the survey.

4.2 Research Design

Data from primary and secondary sources will be used for this research. Primary data will be
collected by using a questionnaire. While secondary sources of information will be taken from
books and websites.

In order to collect information of retail customers, quantitative research method will be done.
The survey will be conducted using convenience sampling, which is a non-probability sampling
technique.

On the other hand, to collect information of wholesale customers simple random sampling will
be used, which is called as a probability sampling technique.

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Bachelor of Business (Management & Marketing)
BUS307 Nashidha Mohamed Id:42735

4.3 Instrumentation and data collection

A survey questionnaire will be used as the main tool in conducting the research. The
questionnaire will be shared in Baraabaru Facebook page with the permission of the owner of
this organization. Also, the questionnaire will be sent in SMS and to Viber groups.To gather
information from wholesale customers, I will be conducting telephone interviews with the
registered wholesale customers of Baraabaru by selecting them randomly. While collecting data
from telephone interviews I will be filling the questionnaire with regard to the answers given by
them. As the telephone interview will be conducted in Dhivehi language the questionnaire will
be translated to Dhivehi.

The survey questionnaire will be designed using google form to conduct the survey as it is a
convenient and cheap method to use. The data collected can be automatically analyzed and can
even be exported to Excel spreadsheets. The questions will be mainly in the form of multiple
choices. Likert scales will also be used in the questionnaire and in the end an open-ended
question will be included to add any thoughts that customers want to express.

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Bachelor of Business (Management & Marketing)
BUS307 Nashidha Mohamed Id:42735

5. Timeline and Budget

Day Day 2 Day 3 Day 4 Day 5 Day 6 Day 7

1
Problem statement
Introduction
Rational of the research
Revise the objectives
and hypothesis
Literature review
Methodology
Develop questionnaire
Research design
Abstract

Submit the research

proposal

5.1 Budget

The expected budget for this survey is about MVR 300. The budget is allocated only for the
telephone interviews.

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Bachelor of Business (Management & Marketing)
BUS307 Nashidha Mohamed Id:42735

Reference

Bae, Y. H. (2012). Three essays on the customer satisfaction-customer loyalty association. Iowa
Research Online, 123.

Beard, R. (2014, January 20). Why Customer satisfaction is important. Retrieved from Client
heartbeat: http://blog.clientheartbeat.com/why-customer-satisfaction-is-important/

E.Wyse, S. (2011, September 16). what is the difference between qualitative and quantitaive
research. Retrieved from snap surveys: https://www.snapsurveys.com/blog/qualitative-vs-
quantitative-research/

Galetto, M. (2017, august 5). What is customer retention. Retrieved from ngdata:
https://www.ngdata.com/what-is-customer-retention/

Hayes, B. (2013, January 23). What is customer loyalty. Retrieved from customer think:
http://customerthink.com/what_is_customer_loyalty_part_1/

Oliver, Richard L. (1999), Whence Consumer Loyalty, Journal of Marketing, 63

(Special Issue), 33-44.

Reichheld, Frederick F. (1996), Learning from Customer Defections, Harvard Business

Review, 74, 56-69.

Anderson, Eugene W. (1996), Customer Satisfaction and Price Tolerance, Marketing

Letters, 7 (3), 256-274.

Oliver, Richard L. (1997), Satisfaction A Behavioral Perspective on the Consumer,

New York: McGraw-Hill.

Oliver, Richard L. (1999), Whence Consumer Loyalty, Journal of Marketing, 63 (Special

Issue), 33-44.

Oliver, Richard L. (1980), A Cognitive Model of the Antecedents and Consequences of

Satisfaction Decisions, Journal of Marketing Research, 17 (4), 460-469

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Bachelor of Business (Management & Marketing)
BUS307 Nashidha Mohamed Id:42735

Gustafsson, A., Johnson, M. D., & Roos, I. (2005). The Effects of Customer Satisfaction,
Relationship Commitment Dimensions, and Triggers on Customer Retention. Journal of
Marketing.

Annex

I am a student from Maldives National University (Kulhudhuffushi Campus), studying Bachelor

of Business (Management and Marketing). This survey is conducted for my Business Research
Method Project. The purpose for doing this survey is to analyze and evaluate customer
satisfaction in Baraabaru. The results will be used in my project and the information you
provided will be dealt with care and will be kept confidential.
Thank you for your participation.

1 Gender

Male

Female

2. Age

Below 18 years

18-25 years

26-35 years

36-45 years

Above 45 years

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Bachelor of Business (Management & Marketing)
BUS307 Nashidha Mohamed Id:42735

3. Select your customer category when considering Baraabaru plc.

Retail

Wholesale

Both

4. How likely is it that you would recommend this company to another person?
Not at all likely Extremely Likely

1 2 3 4 5 6 7 8 9 10

5. What are the factors that you would choose Baraabaru plc over other Shops in
Kulhudhuffushi? (Select as many as possible)

Convenient location

Friendly Staff

Faster Delivery Service

Easily Accessible (Respond to calls)

Good Quality Products

Good Reputation

Good value for money

Special offers (Discounts)

Others please specify

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Bachelor of Business (Management & Marketing)
BUS307 Nashidha Mohamed Id:42735

6. How well do the products meet your needs?

Extremely well

Very well

Somewhat well

Not so well

Not at all well

7. How would you rate the quality of the product?

Very high quality

High quality

Neither high nor low quality

Low quality

Very low quality

8. How would you rate the value for money for the products provided in Baraabaru plc?
Excellent Average Poor

1 2 3 4 5

9. How responsive are the staffs to your questions or concerns about the products and services?

Extremely responsive

Very responsive

Somewhat responsive

Not so responsive

Not at all responsive

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Bachelor of Business (Management & Marketing)
BUS307 Nashidha Mohamed Id:42735

9. How long have you been a customer of Baraabaru plc?

Purchased only Once

Less than 2 months

Two to Eight Months

1 year

3 or more years

I havent made a purchase yet

10. How likely are you to purchase any of the products in Baraabaru again?

Extremely Likely

Very Likely

Somewhat Likely

Not so Likely

Not at all Likely

11. Overall, how satisfied or dissatisfied are you with Baraabaru plc?

Very satisfied

Somewhat satisfied

Somewhat Dissatisfied

Very dissatisfied

12. Do you have other comments or concerns regarding the products and services in Baraabaru
plc?

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