IMPROVING CUSTOMER SA TISFACTJON, LOYALTY AND RETENTION THROUGH RELATIONSHIP MARKETING: THE CASE OF BOTSWANA RAILWAYS
M Mmusi
Mini-Dissertation submitted for the Degree Master of Business Administration at the Mafikeng Campus of the North-West University
1111 111 11 11111111 11111 11111 111111111111111111111111111111111 060048657-
North-West Umvers1 ty Maf1keng Campus Library
Supervisor: Dr P M D J>HA TSHWANE
November 2010 OECLARA T ION
I Mmusi Mmwi declare that the mini-dissertation entitled Improving cus!omer sa li.~fac li o n . Loyally and re/enlion through Relationship J\4arkeling : the Case of Botswana Railways which r have submitlcd to the orth-West University as partial completion of the requirements set for the A!tw er
t~{ Business Administration (MBA). is my own work and has not already been submitted to any other University.
I fu lly understand that the copi es that are submitted lo r examination are the property of the University.
Mmusi Mmusi 19'" ovcmber 20 I 0
a me Date
ii .ABSTRACT
Relationship marketing reduces emphasis on the sales focus that organizations traditionally place on profitability, shifting towards a campaign that emphasizes customer relations and retention. The aim of this study is to determine how relationship marketing can be used to assist Botswana Railways to address issues pertaining to customer satisfaction, loyalty and retention, and at assessing how customers currently perceive the quality of service rendered to them.
The extant literature emphasizes that trust is the main pillar of a relationship between customers and service providers. This relationship is nurtured though constant communication to manage expectations as well as perceptions, including therein some consideration for the seven (7) P's which are central to most service marketing concepts.
Data for this study was collected by means of self-admi nistered questionnaires which were completed by a broad spectrum of Botswana Railways customers. The questions were designed around a Likert scale techt1ique, with the data then being processed using the Statistical Program for Social Sciences (SPSS).
The findings of the study reveal that although a reasonable number of customers are relatively satisfied with the service-delivery aspects they get from Botswana Railways, there was little to no communication between their businesses and Botswana Railways, and that the various aspects that are integral to the realization of relationship marketing do not exist in the organization. This is supported by the fact that most of the customers interviewed have revealed that there is no system of communicating carriage policies and informing them about new products. These findings suggest that a number of initiatives must be introduced to enable the organization to move from transactional based acti vi ties to relationship-based activities.
iii ACKNOWLEDEMENTS
This study could not have been completed without the support and encouragement of my wife, fami ly members and colleagues. PersonaiJy I feel so indebted to my supervisor Dr P. Phatshwane for her patience, valuable advice, and constructive criticism and above all for her belief in me which resulted in this piece of work. Once again, thank you. Your support is what kept me going. Special thoughts are expressed to my colleagues Mr Mooketsi Maiketso and Mr Patrick Chengeta who helped a lot with the administration of questionnaires to Botswana Railway customers, and also to Mr Godfrey Mohembere whose technological expertise did come handy when I was finalizing the document, I really appreciate your assistance. It would not be proper for me to not express my gratitude and appreciation to all those who took thei r valuable ti me to complete the questionnaires, you really have addt.:d !Some in!Sight!S to the stuJy.
iv LIST OF ABBREVIATIONS
BR : Botswana Rai lways SPSS: Statistical Program for Social Sciences WFP: World Food Program
v LIST OF TABLES
Table 4.1 (a): Di stribution of respondents in different types of business ...... 26 Table 4.2: Length of period in business ...... 28 Table 4.5: Respondents' views on attractiveness of facility ...... 31 Table 4.6: C leanliness of employees ...... 3 1 Table 4.7: C leanliness of premises ...... 32 Table 4.8: Doing things right the first time ...... 32 Table 4.9: Accuracy of records ...... 33 Table 4.1 I: Customer confidence in employee behavior...... 35 Table 4. 12: Appreciation of dealings with BR ...... 35 Table 4.13: Convenience of BR operating hours ...... 36 Table 4.14: Views of respondents on BR customer care ...... 36 Table 4.15: views of respondents on BR customer interests ...... 3 7 Table 4.16: Use of modern equipment ...... 37 Table 4. 17: Communication of carriage policies to c ustomers ...... 40 Table 4.18: BR systems of informing customers about their new products ...... 40 Table 4.19: Most dissatisfactory customer relations aspect ...... 41 Table 4.20: Year of occurrence of incidence ...... 41 Table 4.21: Steps taken to deal with incidence ...... 42 Table 4.22: Reporting of incidence to management...... 42 Table 4.23: Satisfaction with incidence handling ...... 43 Table 4.24: Aspect of most sati sfaction ...... 43 Table 4.25: Year of incidence ...... 44 Table 4.26: Reporting of incidence ...... 44
vi LIST OF FIGURES
Figure 4.1 (b): Types of business ...... 27 Figure 4.3: Usage of other modes by businesses ...... 29 Figure 4.10: Percentage of employees willingness to help ...... 34
vii TABLE OF CONTENTS Page Declaration ...... ii Abstract ...... iii Acknowledgements ...... iv
CHAPTER ONE: INTRODUCTION AND BACKGROUND ...... 1
1.0. rntroduction ...... 1
1.1 Background ...... 1
1.2 Research problem ...... 4
1.2.1 Specific objectives ...... 4
1.2.2 Research questions ...... 5
1.3 Research method ...... 5
1.4 Significance of the study ...... 5
1.5 Scope of the study ...... 5
1.6 Organization of the study ...... 6
CHAPTER TWO: LITERATURE REV lEW ...... 7
2. l Introduction ...... 7
2.1.1 Overview and conceptual frame work...... 7
2.1.2 Custon1er satisfaction ...... 8
2.1.3 Customer retention ...... 8
2.1.4 Customer loyalty ...... 9
2.1 .5 Employee contribution ...... 10
2.1.6 Application of marketing variables in railways services ...... 10
2.1. 7 Theoretical background ...... 14
2.1.7.3 Determining customer's attitudes towards Botswana Railways operations ...... 16
2.1.8 Evidence of relationship marketing: empirical studies ...... 17
2.1.9 Conclusion ...... 18
viii CHAPTER THREE: METHODOLOG¥ ...... 20
3.1 Jntroduction ...... 20
3.2 Research design ...... 20
3.3 Sampling plan ...... 20
3.4 'Data Collection ...... 21
3.5 Data Processing ...... 22
3.6 Sources of infonnation ...... 22
3.7 Pilot study ...... 22
3.7.1 Intention of the pilot study ...... 22
3.7.2 Outcomes of pilot study ...... 23
3.7.3 Conclusion ...... 25
CHARPTER FOUR: ANA LYSIS A D INTERPRETATION ...... 26
4. 1 Introduction ...... 26
4.1.1 Response rate ...... 26
4.2. Data analysis and interpretation ...... 26
Type ofBusiness ...... 26
CHARPTER FIV E: FINDINGS AND RECOMMENDATION ...... 44
5. 1 Introduction ...... 44
5.2. Research Findings ...... 44
People ...... 46
Physical ...... 47
5.3 Recommendation ...... 47
5.3 .1 . A turnaround strategy with more emphasis on building relationships with its customers .. 47
5.3.2. Staff training ...... 48
5.3.3. Customer analysis ...... 48
5.3.4. Branding ...... 48
5.3.5. Forming alliances ...... 49
5.3.6. Assets renewal and equipment refurbishmcnt...... 49
ix 5.4 Limitation of the study ...... , ...... 50
5.5 Conclusion ...... so
Bib! iography ...... 51
Annexures ...... 55
List of Tables ...... v List of Figures ...... vi List of Abbreviations ...... vii
X CHAPTER ONE: INTRODUCTION AND BACKGROUND
1.0. Introduction
Contemporary businesses operate in a changing economic environment; these changes necessitate changes in the way business is conducted. Like other organisations, Botswana Railways is affected by the dynamic changes within the logistics industry. Increased technological, marketing and customer affluence are just a few of the factors that have been cited as being important determinants of performance in the logistical industry (Chakravarti, 2009). Relationship marketing provides organisations with the opportunity of evaluating the manner in which it currently relates with its customers, as well as in assessing strategies that can be used for connecting with customers (O'Neill, 2008).This study intends to find out how relationship marketing could be used to assist Botswana Railways.
The study is divided into five chapters. The ftrst three chapters present the introduction, literature review and the methodology respectively. Chapter four presents data analysis, discussions and interpretations of the results, while the last chapter concludes by providing the recommendations. The introduction in chapter one will encompass the background information relating to the study areas.
1.1 Background
Botswana Railways is a parastatal organization with its head office located at Mahalapye, which is considered the central place between Ramatlabama in the south and Bakaranga in the north of Botswana. The organization's top management consists of a Chief Executive Officer and four (4) Directors in the areas of Finance, Corporate Services, Technical Services and Marketing and Chain Supply.
Botswana Railways is predominantly a freight service provider. It was originally a part of Rhodesia Railways, and was subsequently taken over by National Railways of Zimbabwe. In 1987 it was taken over by Botswana government and mandated to operate as a commercial unit. Botswana Railways core traffic is coal, petroleum, cement, soda ash and salt. Botswana Railways total route length is nine hundred (900) km. Six hundred and forty (640) km of this is the main line between Ramatlhabama and Bakaranga. The main line was constructed during the colonial era and until the recent opening of the new and more direct Beitbridge-Bulawayo route a significant proportion of Botswana Railway traffic was transits traffic. The remainder of the Botswana Railway lines was constructed in 1977 and
1 1990 to connect the main line with other sources of traffic from Selebi Phikwe, Morupu le and Sua Pan.
Botswana Rai lways is required to operate under a commercial mandate of Botswana Railway Act 22, 1986. S. l. l 04.1987 and it receives no direct financial support from government. Therefore the present worsening financial performance, especially the inability to generate operating profit is a cause for concern . While non-operating income continues to preserve Botswana Railways overall profitability in the short-term. However, firm marketing strategies, which take into consideration relationships marketing, are required to bring the organi zation back to operating profit.
However, developments in the business environment would not be a threat if Botswana Railways was continuously monitoring the environment to satisfy its customers through developing and implementing marketing strategies relevant to the changing environment and customer needs. Botswana Railways was, until the financial year 1994/95. a profi t-making organization as its transit traffic grew from 540 000 tons, to 84 7 000 tons between the financial years 1987/88 to 1992/93 respectively. In addition to this, profit for the years 199 1/92, 1992/93 was signif'icantly higher th an previous years. This was due to the World Food Program (WFP) supplies of drought relief destined to Botswana, Zimbabwe, Zambia and Malawi. It was during this period that Botswana Railways lost most of its local customers, as their focus was on moving transit traffic and giv ing little attention to local, imports and export traffic. This tran sit traffic was halted after the southern region received rains in 1993. The year 1994/95 saw Botswana Railways record a net loss in its financial reports because of a fall in transit traffic from above 300 000 tons to 180 000 tons. The organization has since then been experienci ng conrinuous decline in tonnage handled. this trend continued into the financial year 2004/05, according to the organization's 2008 annual report. This deve lopment was brought about by the inception of the Beitbridge route wh ich posed a competitive threat to Botswana Railways, given that prior to its establishment the railways organi~atiuns in lh~ r~gi on had made an agreement that the guiding principle for routing of traffic should be the distance that the train will travel from the point of origin of goods to destination station. Therefore, all traffic was routed through the shortest route in terms of kilometers (shortest route principle). Initially this arrangement worked for Botswana Rai Iways as the route through Botswana was the shortest. However, the situation changed after the construction of the Bulawayo Beitbridge Railway line as it was now the shortest route from the major ports in South Africa mainly the port of Durban to countries north of Botswana, this brought a negative impact on Botswana Railway's business (Halcrow Consultancy Report 2002). It therefore became evident from the financial statement of the company that something was seriously wrong. The adverse results were not only experienced on the freight traffic, passenger revenue also suffered the same fate. This development was worsened by the increase in road trucks, the continuous
2 improvements on the roads, which in turn led to an increased number of buses and reduced traveling time between major stations by almost half the time one took when traveling by rail.
Even with the onset of these logistical and infrastructural changes, the literature suggests that the developments would not have been a threat to the company if Botswana Railways customers were loyal to the organization. Kasper, Hans and Peters (2004) suggest that this problem can be addressed through relationship marketing, as it is geared to create ongoing relationships between suppliers and clients. The supplier and the c lient will benefit from relationship marketing, provided the market imposes high switching cost for changing to a different supplier or client in cases. where the market is unstable, and where the instability is accompanied by a high degree of insecurity. Therefore the ultimate goal of this intensive form of contact is to increase loyalty and retention of customers and improve the quality of the service and distribution during the process. As attested by Lovelock and Wirtz, 200 I, relationship marketing brings about customer satisfaction which leads to customer loyalty. The loyalty will be further strengthened if the two parties are committed to building a mutually benefiting relationship.
However, management realised that operational strategy in the organisation was threatened due to, a complete absence of a coherent and useful management information system to support management decision-making and business planning that is capable of building relationships. CIE Consultants in I 999 reported that there is poor capturing of data which would otherwise enable easy analysis and early identification of problems facing the organization. This makes it difficult for managers to identify and act promptly on potential problems affecting customers. This has damaged the image of the organization such that customers perceive Botswana Rai lways as offering unreliable service. Studies reveal that this challenge is not unique to Botswana Rai lways as rai lway business worldwide are trying to change their business operations as they have rea lized that their operations have been overtaken by events and no longer appeal to customers. For example, during the years 1991-1992 India Rai lways experienced a fa ll in percentage of traffic for seven major commodities constituting core sector carried by railways. As a remedy, India Railways have adopted new marketing strategies to win back traffic and improve its share of freight traffic (Business News). This strategy involved categorizing customers into groups and allocating them relationship officers solely meant to look after such customers business.
Other cases are the railways of Eastern Europe which also adopted modern commercial, market driven management techniques after determining that there is no room for complacency, as rising costs, falli ng efficiency and stagnant markets will, if unchecked, bring commercial disaster. Unfortunately, there appears to be a general lack of urgency in many of these railways as observed by Brown and Summer (2002). This is also echoed by Kasper et al, (2004) who submit that rail
3 transport's need to pay attentio n to the flexibility of the rail transport, both passenger and freight in order to make them more attractive to their present and potential users.
1.2 Research problem
Botswana Rail ways was created as a transit rai l line and as such , its profitability is directly related to transit traffic. Operating prolit for Botswana Rai lways was only recorded during immediate years following take over from National Railways of Z imbabwe where transit traffic was in excess of 300 000 tons. Over its 23 years of business, the organization has accumulated losses amounting to P4 7 million (Botswana Rail ways annual report 2004).
A number of highly reputable consultants such as Halcrow. Swedish Rail. CIE were invited to participate and contribute to improved perfo rmance. However, despite the sound advice from the consultants, attempts to implement such advice-initiatives have been fragmented and lacked cohesion. The lack of a will to implement has resulted in a progressive s lide towards un-profitabi lity at an operating level in the last five years, the primary cause of this be ing poor and withering relations with the company's customer base.
1.2.1 Specific objectives.
The specific objectives of this study are to:
• Determine whether Botswana Railways has specific strategies and policies which are intent on continually communicating with customers and bui lding long term business relationships. • Examine the customers' familiarity of with the organization's product and policies. • Determine the extent to which Botswana Rai lways· customers' expectations are satisfactorily met. • Determine the attitude of customers towards Botswana Ra ilways' operations. • Examine the opini ons of customers on how to improve customer satisfaction and business image. • Determine the effectiveness of c usto mers' relationship in building a better rai lway image. • Make recommendations on how Botswana Railways could improve towards increasing customer satisfaction, loyalty and ultimately retain such customers.
4 This will help the researcher to fi nd out if there are any relationships between Botswana Railways and its customers. If there are such relationshi ps, how can they be used to the benefit of the organization and its c ustomers? If there arc none, what sho.uld be done to establi sh them for the benefit of both the organisation and its customers?
1.2.2 Research questions • Are BR customer expectations met? • If not what can be done to ensure that they are satisfactorily met? • What kind of research can be done to determine customer's attitudes towards Botswana Railways operations? • What should be done to solicit opinions of the organizations customers on how to improve customer satisfaction and its image? • What can be done to improve customer relationships?
1.3 Research method
The researcher undertakes a questionnaire survey of mostly closed-ended questions and a few open ended questions aimed at measuring the satisfaction and dissatisfaction of customers, using the critical incidents methods. Empirical research in both service quality and service satisfaction affirms the importance of the quality of customer/employee interactions in the assessment of the overall quality and/or sati sfaction with services.
1.4 Significance of tbe study
The study seeks to assess the extent of customer satisfaction, the opinions and attitude of BR customers in relation to service provided. It even goes further to attempt to examine the familiarity of the organization's customers to the products offered and the policies which are in place to regulate such services. The researcher is aware of other studies whic h have been done in Botswana. unfortunately such studies where looking at relationship marketing for the general business community. Therefore the researcher hopes that this particular study will be of significant value to Botswana Railways as it is more focused on railway service.
1.5 Scope of the study
5 The study is mainly concerned with determining how Botswana Railways' freight traffic customers view the organization. Whether, the organization would be able to retain its current customers. The study only focused on the organizations freight customers amongst the rest of other products offered, like parcels traffic which is ad hoc and local passenger services which has been terminated except for private passenger trains which only buy the rights to use Botswana Railway line. The research is designed to highlight discrepancies existing in Botswana Railways freight service delivery from the point of view of the customer. The findings of this study wi II reflect the extent to which the customers view Botswana Railways which will either be positive or negative. The study was carried out in Gaborone., Sua Town, Selebi Phikwe, Palapye, Mahalapye and Francistown, using a questionnaire for data collection.
1.6 Organization of the study
This study will consist of five chapters'. Chapter one provide an overview of relationship marketing, including the kinds of problems for which the study is about, it also discuss the method, the scope and the significance of it. Chapter two provides the theoretical background, grouped into different categories related to variables of marketing, with more concentration on services as a product. [t looks at both customers and the producer of service and the application of the marketing variables. It concludes with a review of empirical studies. Chapter three looks at the research design, the general methodology, research instruments and procedures used for data collection and analysis. Chapter four focuses on the analysis and interpretation as well as the establishment of casual connections, similarities and groupings of items of a particular significance. Chapter five is the final chapter and it provides a brief summary of the study and a refl ection on the major findings together with the bibliography.
6 CHAPTER TWO: LI TERAT URE REVIEW
2.1 Introduction
This chapter is divided into three sub-headings namely: Overview and conceptual frame work of relationship marketing, theoretical background and empirical studies on re lationship marketing. The first sub-section deals with the general overview and the conceptual frame work on relationship marketing with an intention of helping the reader to understand and appreciate the concept of re lationship marketing. The other sub-sections examine the theoretical background and empirical studies on relationship marketing. They look into what the literature says about relatio nship marketing and also what previous researchers observed in relations to the subject.
2.l.J Overview a nd conceptual frame work
Defining Relatio11ship Marketing
Re lationships are defined in different ways, and that makes it difficult to define it in a unique and unquestionable way. Therefore, Kasper, Hans and Peters ( 1993) defined relationship by looking at the characteristics of a relationship that are mentioned in literature on relationship marketing to get an impression on what it is all about and they referred to the fo llowing: inleructiun, perivd vf time, goals, continuity, evaluation, formal and informal aspects and behavioural side.
Re latio nship marketing is essentiall y customer-centric, and is intent on going beyond merely hooking customers to the business entity, and includes strategies for strengthe ning engagement with clients, building brand loyalty, and delivering according to targeted results (0 ' Neill, 2008). Though easy to de fine, the extant literature suggests that customer relationship is represents different things to different people. A study conducted on leading business managers that are considered leaders in re lationship marketing revealed that 65% of the respondents conceptualised relationship marketing as a strategy of moving companies from being product-centric to being customer-centric and that forty percent (41 %) viewed it as making customer-related information available to customer contact personnel (Peppers and Rogers, 2004 ). The conclusions of the Peppers and Rogers study are however unilateral; that relationship marketing is lynch-pinned on strategies that entail developing relationships with customers and then generating long-term profits from such relationships.
Further to these observations, Henning-Thurau and Hansen (2000) observe that customer relationships reveal some conceptual problems, because it is not obvious how concepts of quality, satisfaction, loyalty, trust, commitment. benefits and bonds should be di fferentiated. They further affinned that
7 relationship marketing concepts relies on a move from function-based marketing to cross-function marketing, and a shift from marketing activities which have an emphasis on customer acquisition to those which emphasize customer retention. He further suggest that organizations need to destroy the traditional marketing activities, which focused on transaction, processes and acquisition of new customers, and adopt relationship marketing which has implications on customer satisfaction, customer retention, and customer loyalty and employee contribution.
Customer relationships express the notion of mutuality between businesses and people in terms of their willingness to form relationship with service/product provider. This relationship will be strengthened when they perceive benefits beyond their satisfaction (Burns and Bush 2003). On the other hand Bruhn (2003) observed that customer relationship life cycle describes idealized phases that occur regularly in relationship over time, and it enables conclusions to be drawn for relationship marketing on the basis of the relationship's intensity. l lowever, customer requirements life cycle also represents the framework within which an analysis of the customer relationship development can be conducted in the context of the customer relationship life cycle (Stauss, Chojmacki, Decker and l loffmann 200 I).
2.1.2 Customer satisfaction
Various authors have various definition of customer satisfaction. Kotler (2002) defines customer satisfaction as a person's feelings of pleasure or disappointment resulting from comparing a product perceived performance in relation to his or her expectations, whilst Hill ( 1998) view customer satisfaction as the customer perception that a service provider has met or exceeded their expectations. Companies expect their eiTort to satisfY their customers. Satisfaction can be achieved by encouraging dissatisfied customers to complain directly to management as observed by Fischer et al. ( 1999). The key to customer satisfaction in the services industry such as Botswana Railways is mostly dependent on service quality. because of the inseparability element of service. It therefore becomes important for the service marketing variables to be applied diligently.
2. 1.3 Customer retention
Fischer, Garret, Dennis, Mark and ferris ( 1999) observes that companies with high percentage of satisfi ed customers can count on lower costs and higher sales revenue because satisfied customers also tend to encourage other potential customer to do business with the company. This view is also supported by Marks ( 1997) who contends that the longer customers are retained by a company; the more profitable they become because of increased purchases, reduced operating costs, referrals, price premiums, and reduced customer acquisition costs.
8 Customer retention is an old concept which has been given very little attention, until the development of the concept of relationship marketing. Botswana Railways as an organization operating in the same environment with other organizations should improve customer retention through various ways such as rates discriminations for its customers. This discrimination should vary according to the traffic volumes offered like, the higher the volumes the lower the rate. These customer retention strategies could also be achieved by providing complementary services such as delivery/collection of goods at the doorstep of the customer's premises.
2.1.4 Customer loyalty
The retention of a customer does not necessarily mean that they are loyal; sometimes a customer may stick because he/she is not aware of altematives or because they are hostage to a long term contract (constraint based relationships). This aspect is observed by Riechheld (2001) who stresses the need for building dedication based relationships.
Bendapudi ami Berry ( 1997) observed that merely looking at how long customers have maintained relationships can be misleading because both dedication and constraints can keep customers in relationships. However, the quality of the relationships may be very different based on whether they are driven by dedication or constraints. Specifically, constraints lead at best to ma intaining the status quo. Customers who maintain relationships with service providers do so either because of constraints (customers "have to" stay in the relationsh ip) or because of genuine dedication (customers "want to" stay in the relationship). Constraint-based relationship maintenance is predicated on customers' feelings of dependence on the service provider. Dedication-based relationship maintenance also needs trust in the service provider.
Customer loyalty is therefore the company's ability to retain satisfied customers. Maintaining customer loyalty is one of the toughest challenges for any marketing department in a business enterprise, since the wants of a customer are modified at much faster rate than their needs. lt requires a business enterprise to follow a pro-active approach that includes formulating strategies for brand consolidation, researching and continuing with new product development, while implementing customer relationship management systems.
Loyalty customer programmes should be based on a simple premise, which is as a company develops stronger relationships with their best customers; those customers will stay with the company longer and become more profitable. Better customer service and faster complaint resolutions ensure strong loyalty. Information technology can also help companies achieve customer loyalty by providing tools
~; 9 l!J!!r.i for analyzing customer data to assist tn informed decision making, and managing customer relationships from the sales process through to fu lfilment and support (Stevenson, 2008).
2.1.5 Employee contribution
A positive image can only be successfully promoted if customers are satisfied, retained, and loyal to the company. However, these can only be achieved if the company employees are well trained and professionally skilled, because they will produce highly quality results due to the understanding and knowledge of what is expected ofthem. Ptau B. and Murphy I.J. (2002), supports this view since they contend that organizational performance; effecti veness and efficiency are a function of professionally trained human resources. They advocate for the importance of investing resources such as time and money in developing people, as they strongly believe that doing so pays off, not only to the individual employees, but also to organization because it can attract and retain such employees and the company wi ll reap increased productivity levels. Elswik, (2002), suggest that organizations, which offer their employees training opportunities, stand a better chance of retaining them.
2.1.6 Application of marketing variables in railways services
Marketing variables
BR is a service provider; therefore the intangibility of its service will mean that the service they provide wi ll not be O\\ncd by the consumer the same ·way that they own physical goods after they bought them. This aspect makes it more difficult for consumers to assess the product/service they get from BR. As a service industry BR employees are responsible fo r delivery of service and are directly accountable to users for service quality. In this sense. they differ fo r example from manufacturing industries, where those responsible for creation of the product are usually not visible to customers and where there is a clear distinction between production and marketing activities. For railways, as with most service industries, the production and marketing of the product (which in this case is actually a service, or services) are practically inseparable. Inevitably. a much higher proportion of the work force in service industries will be engaged in what might be termed "marketing related activities", than wi ll not be the case in manufacturing industries.
It is the un iqueness of services marketing that makes it even more fundamental to use relationship marketing with all components of a marketing mix (seven P's) will be discussed later in this section. The discussion of the marketing mix will be aimed at demonstrating how relat ionship marketing wi ll
10 assist customers to make judgments relating to quality and value in the absence of actual goods or tangible products.
Nevertheless, marketing in the rai lway environment will have the same essential focus on the twin key issues of customer satisfaclion and profitability as has marketing in any environment. Therefore, marketing is not always about sales maximization, it is, also about profit maximization, (Peppers and Rogers, 2004). Taking into account the special characteristics of railways, "marketing" in a railway environment can be defined as: a method and process for planning, mobilizing and applying the resources ofth e railways in order to satisfy customer demands and to realize a profit for the railways.
(UN, 5th September 2004). www.da.group.co.uk/geoff/relationship.htm
Within the context of the definition given above marketing includes a fu II range of activities needed to achieve voluntary and profitable exchanges of products or services between two parties. When one looks at marketing in terms of a tangible product the activities will be aimed at changing one of the four variables. On the other hand, if you look at marketing in terms of service as in the Railway s ituation then the activities will be aimed at changing one of the seven variables known as the marketing mix, with the whole intention of improving the organizations profitability. These service
variables are also referred to as the seven P 's and they are product, price, promotion, place, people, processes and physical (Marks. 1997).
Since relationship marketing is a sub-set of marketing management, it is also dependent on the seven r·s, as customer retention and loyalty which are key to establishing and maintenance of relationship with customers should be used in such a way that it will support a win-win relationship between the customer and the service deliverer, follow ing is how this P's contribute to building a lasting re lationship.
Product
The product is the service offered to both existing and prospective customers by railways. The core products of rai lway organization are transportation services. Therefore railway organizations should develop the habit of looking at their product as though they were outside marketing consultant brought in to help the company to decide whether or not they are offering the appropriate products. They should ask critical questions such as, "Is our current products or service, appropriate and suitable for the market and the customers of today?" Whenever they having difficulty in achieving their projected volumes, they need to develop the habit of assessing their business honestly and asking questions like, "Are these the right products o r services for our customers today?" Is there any product or service we are offering today that, knowing w hat we now know, we should not bring out again tomorrow? Compared to our competitors, is our product or service superior in some significant way to
11
1 anything else available? If so, what is it? If not, could we develop an area of superiority? Should we be offering this product or service at all in the current marketplace? (Marks, 1997)
Price
The price or tariff to be paid by a customer for the transport of their consignments is usually expressed as a rate per ton per ki lometer; Freight tariffs can also include charges for other services rendered by railways, such as the loading of freight consignments, in which case the charging unit will be different. Railway business like any other business must develop the habit of continually examining and re examining the prices of the services they sell to make sure they're still appropriate to the realities of the current market. Sometimes business need to lower their prices or raise them if appropriate. Many companies have found that the profitability of certain products or services doesn't justify the amount of effort and resources that go into producing them. By raising their prices, they may lose a percentage of their customers, but the remaining percentage generates a profit on every sale. Businesses often need to change their terms and conditions of sale, by spreading their price over a series of months or years, they may sell far more than they do today, and the interest they charge will be enough to make up for the delay in cash receipts. In some cases business combine products and services together with special offers and special promotions. While at times they include free additional items that cost them very little to produce but make their prices appear far more attractive to their customers.
In business, whenever a business experiences resistance or frustration in any part of its sales or marketing activities, they critically re-appraise that area. Business should be open to the possibility that their current pricing structure is not ideal for the current market. Hence they should be open to the need to revise their prices, if necessary, to remain competitive, for it to survive and thrive in a fast changing marketplace. (Marks, I 997)
Promotion
This is the result of all activities aimed at enhancing customer awareness of, and stimulating demand for products or services. Promotion includes all the ways you tell your customers about your products or services and how you then market and sell to them. Small changes in the way the business promote and sell its products can lead to dramatic changes in their results. Even small changes in the advertising can lead to immediate higher sales.
Large and small companies in every industry continually experiment with different ways of advertising, promoting, and selling their products and services. However the rule is that whatever method of marketing and sales the business is using today will, sooner or later, stop working.
12 Sometimes it will stop working for reasons which the business is aware of, and sometimes it will be for unknown reasons. In either case. the methods of marketi ng and sales will eventually stop working. and the business wi ll have to develop new sales, marketing and advertising approaches, offerings, and strategies. (Marks, 1997)
Place
Place means not j ust the locations of business facilities, but locations of all points of sale at which customers may have access to the product or service. In the case of rai lways, this will include not only passenger stations and freight terminals, but also travel agents, and freight forwarders offices and terminals. Railways like any other business must develop the habit of reviewing and reflecting upon the exact location where the customer meets the salesperson. Sometimes a change in place can lead to a rapid increase in sales.
Product or service selling many use different sell ing methods like direct selling, sending salespeople out to personally meet and talk with the prospect. Some sell by telemarketing. Some sell through catalogues or mail order. Some sell at trade shows or in retail establishments. Some sell in joint ventures with other similar products or services. Some companies use manufacturers' representatives or distributors. Many companies use a combination of one or more of these methods. In each case, the business must make the right choice about the very best location or place for the customer to receive essential buying information on the product or service needed to make a buying decision. (Marks, 1997)
People
It almost goes without saying that, in a railway organization, people are an important resource. What is required, therefore, is total customer awareness from the very top to the lowest levels of staff in the railway organization. This will require instilling customer awareness culture by senior managers . Business must develop the habit ofthi nking in terms of the people inside and outside of their business who are responsible for every element of their sales and marketing strategy and activities. This is important because every single decision and policy has to be carried out by a specific person, in a specific way. The organisations ability to select, recruit, hire and retain proper people, with skills and abilities to do the job is more important than everything else put together. Successful businesses develop the habit of thinking in terms of exactly who is going to carry out each task and responsibility. In many cases, it's not possible to move forward until you can attract and put the right person into the right position. Many of the best business plans ever developed sit on shelves today because the (people who created them) could not find the key people who could execute those plans. (Marks, 1997)
13 Processes
Railway operational processes change in response to developing competing transport modes. especially road transport. This process refers to the systems used to assist the organization in delivering the service. For instance if you phone a rai lway company and ask for a rate to transport coal from one station to the next station in another country and you get such rate in twelve hours. What was the process that allowed the railway employees to deliver such service? lf such processes are efficient they will foster consumer loyalty and confidence in the company. (Marks, 1997)
Pllysical Evidence
Physical evidence is the element of service mix which allows the consumer to make judgments on the organization. If you walk into railway station bu ildings your expectations are a clean, friendly environment. ln the passenger train if you travel first class you expect enough room to be able to sleep. Therefore physical evidence is an essential ingredient of the service mix; customers will make perceptions based on their sight of the service provision which will have an impact on the organizations perceptual plan of the service. (Marks, 1997)
Furthermore it refers to the physical evidence available to customers in the layout and presentation of railway facilities that their needs are actually being met. (UN, 5111 September 2004). www.da.group.co.uklgeoff/relationship.htm. The layout and presentation of Railways facilities was demonstrated by Lovelock and Wirtz (2004) in their observation that it was unfortunate that, customers are not always happy with the quality and value of the service they receive. People complain about late deliveries, incompetent personnel, inconvenient service hours, needlessly complicated procedures, long queues, and a host of other problems.
2.1. 7 Theoretical background
The marketing focus for many years was aimed at acquiring customers, rather than retaining them (Schneider 1980). However, Chonko, Dubinsky, Jones, and Roberts (2003) herald relationship marketing as an effective strategy to attract, maintain and enhance customer relationships. A study carried out by Morgan and Hunt (2004) revealed that relationship marketing can be used as a tool to establish, develop and maintain successful relational exchanges with customers. After conceptualizing relationship marketing they theorized that, successful relationship marketing requires relationship commitment which will bring about commitment and trust as the key mediating variables.
2.1. 7.1 Measures tllat could ensure that customer's expectations are satisfactorily met.
Relationship marketing has been described as a continuous and long-term relationship between the customer and the firm. The basic idea behind relationship management is that it must be beneficial to
14 both-parties, the customer and the service provider. For both parties, transaction costs in all stages of the service encounter will be minimised. Relationship management minimise transaction costs in several ways such as, both parties understand each other, that reduces the time it takes to make a diagnosis, it reduces diagnosis error, it reduces the need to take a defensive steps, it makes working together easier and it provides greater comfort (Kasper et al, 2004).
Botswana Railways can drastically change the way it conducts its business, to more contemporary ways of doing business, if its expectation of maximizing revenue while minimizing costs this can be achieved through introducing measures that will provide flexibility in its operations and more impottantly creating commw1ications charu1els that will allow it to be able to share its constraints and challenges with its customers. This statement is supported by Berkeley (2005) as they argued that trains are capable of transporting large numbers of containers which have come off the shipping ports. Trains are also used for the transportation of steel, wood and coal. Trains are used as they can pull a large amount and generally have a direct route to the destination. Under the right circumstances, freight transport by rail is more economic and energy efficient than by road, especially when freight is carried in bulk or over long distances. The main disadvantage of rail freight is its lack of flexibility. For this reason, rail has lost much of the freight business to road transport. Rail freight is often subject to transshipment costs since it must be transferred from one mode to another in the chain; these costs may dominate and practices such as containerization aim at minimizing these. Many governments are now trying to encourage more freight onto train·s, because of the environmental benefits that it would bring; rail transport is very energy efficient.
Kasper et al (2004) observe that in the first stages of the relationship I ife cycle, trust has to be created in order to start relationship between the customer and the service provider, and personal communication will help in establishing this trust and confidence. In the business-to-business services world, personal relations between buyer and seller appear to be crucial. Quality can be influenced by the external communication of the service organization thus stimulating or persuading customers to buy services. Communication can be used to manage expectations as well as perceptions.
2.1. 7.2 Measure used to determine the familiarity of customers to the organizations products and policies
Organizations need to know if their customers are aware of the products that they offer, to enable them to put in place marketing strategies that can be used either to inform potential customers or persuade existing customers to use more of their products. Hill (1998) observed that customer satisfaction is the most common of all marketing survey. He highlighted that measuring satisfaction and bui !ding a satisfaction survey requires at least a basic knowledge of the satisfaction measurement
15 literature, combined with your own customer satisfaction experiences. This will provide the necessary introduction to the theoretical and methodological underpinn ings of satisfaction research. He observed that customer satisfaction measures how well a company's products or services meet or exceed customer expectations. These expectations often reflect many aspects of the company's business activities including the actual product, service, company, and how the company operates in the global environment. Customer satisfaction measures are an overall psychological evaluation that is based on the customer's lifetime of product and service experience.
Satisfaction measures on the other hand involve three psychological elements for evaluation of the product or service experience: cognitive (thinking/evaluation), affective (emotional-feeling/like dislike) and behavioural (current/future actions). Customer satisfaction usually leads to customer loyalty and products repurchase (Aksoy, Keinighum and Bejou, 2008). But measuring satisfaction is not the same as measuring loyalty. Satisfaction measurement questions typically include items like: overall satisfaction measure (emotional): Overall, how satisfied are you with "the delivery of your consignment"? Satisfaction is a result of a product related experience and this question reflects the overall opinion of a consumer's experience with the product's performance. A loyalty measure (affective, behavioural): Would you recommend "Rail service" to your friends? Satisfaction can influence post-purchase/post-experience actions other than usage (such as word of mouth comrnunicatiuns and repeat purchase behaviour) l [ill, (1998).
2.1.7.3 Determining customer's attitudes towards Botswana Railways operations
Determining what influences customers attitudes towards Botswana Railways operations is essential because some of the potential determinants can be used in promoting a conducive relationship between Botswana railways, the suppliers and consignee of goods/consignments. This observation is supported by Bruhn (2003) who recognized that customer relationships are dynamic in nature, resulting in various phases in the relationship that can be presented and analyzed uniquely through the life cycle concept. The customer requi rements life cycle and the customer relationship life cycle can be the starting point for systematic modeling of relationship marketing.
The customer requirement life cycle structures the life phases of an individual organization and considers that, customers/organizations do not only have different needs and wants (Kotler 2000), these needs can also differ during different phases in each market considered. The customer requirements life cycle is valid irrespective of who you deal with. It also represents the framework within which an analysis of the customer relationship development can be conducted (Dwyer, Schurr, and Oh 1987). Bruhn (2003) also argued that since the intensity of customer attitudes can be expressed in terms of diverse constructs, a core formal difficulty surfaces when using the customer'
16 relationship life cycle to determine its ordinate, he mentioned the following three types of constructs for determining the attitude intensity as applicable to customers either in isolation or collectively. Psychological indicators that could be used are the relationship quality from the customer's perspective, behavioral indicators which are the purchasing behavior, information behavior etc, and economic indicators which show the customers profit contribution.
2.1. 7.4 Various ways ofimproving customer relationships
Customer relations management utilizes technology to improve customer service. The basis of Customer relations is to gather, organize, and utilize any information regarding customer interactions to better monitor and provide customer service. Improved customer service leads to increased sales and higher profits. In order to achieve the foregoing, Thomas (20 10) suggests that one of the strategies to improve customer relations management would be to create a customer support team. The customer support team is the gatekeeper for any customer service inquiry. Customer support captures all customer related issues and can pinpoint the sales force's customer service issues to be changed as necessary. As the gatekeeper, the customer support team is also able to quickly solve simple customer service issues and allow the sales force to focus on current projects. Most companies try to start at the ground level and work their way up with a customer service initiative and that seldom ever works. If the management doesn't offer good service to their employees and customers, chances are that the employees wi ll not offer it either. It starts at the top and then the trickledown effect takes place (Shuford 2008).
2.1.8 Evidence of relationship marketing: empirical studies
Studies in relationship marketing have been conducted in the past and reported by Ward and Dagger in 2007. They revealed that relationship strength was found to vary significantly between service products and individual customers, and the impact of duration of the relationship and the frequency of purchase on relationship strength depends greatly on the nature of the service product. They also demonstrated that some customers want a closer relationship with service providers than other customers, and this aspect significantly affects the strength of relationship perceived by the customer. In connection with the injtially growing economic relationship strength, one of the studies most often quoted is that by Reichheld and Sasser (1990), which illustrates examples of the profit made per customer as a function of the relationship length by credit card organizations, laundries, wholesalers and automobile servicing companies. Reichheld and Sasser further observed and measured a development of the relationship quality as a psychological indicator of the relationship intensity from a student's perspective at eight stages in an empirical study conducted during a tutorial at a particular university. The results showed a significant growth in the relationship quality occurring in the middle
17 , of the relationship, i.e. between the third and sixth period, and beyond that, the value balanced out at a relatively high level.
Previous studies by Winter and Preece (2002) have largely focused on the client relationship with either the contractor or professional consultants. Attracting and retaining customers as the objective of relationship marketing. It includes changing the forms of marketing from a transactional to a relationship focus, with the emphasis on customer retention, high customer service and commitment and quality being a concern for all. It is about recognising that the organisation's existing customer base as its most important asset, which has to be protected. Rather than treating customer service and quality as separate and unrelated issues, they have to be fully integrated in a truly customer focused company. The customer's perception of performance should be monitored and measured rather than merely relying on internal means of information. Not only improved relations with customers are vital for the business, but also development and enhancement of relations with supplier, is necessary. Primary focus of marketing activities rests on the client, with emphasis not only on individual sales (transactional marketing) but also on long term relationships (relationship marketing). In the interest of generating repeat business all companies studied tried to establish long-term relations with important contractors.
Having identified services marketing as being of importance, it is particularly relationship marketing that is of interest, which not only considers clients' relations but also those involving other members of the construction industry, such as suppliers, sub-contractors, consultants. The emphasis is not on bringing about exchange processes, but on building relationships (Woodruffe, 1995). This type of marketing becomes significant in those areas of service operations which cannot be provided entirely on one occasion. There are three complementary perspectives to be considered according to Christopher, et al (1991):
• Importance of customer retention • Alignment between marketing, customer service and quality • Enhancement of internal and external relationships
2.1.9 Conclusion
The above theory is summed up by Winter and Preece (2002) as they observed that internal marketing is a management philosophy of treating employees as customers. [ts main focus is on procedures, policies and process to support ultimate customer satisfaction. They ftuther observed that there is a relationship between employees and organizational profit, this relationship starts with employee satisfaction leading to employee loyalty and or retention, which then lead to employee productivity,
18 and when employees are productive the organizations external value will be realized. This external value will then lead to customer satisfaction wh ich will lead to customer loyalty and or retention. Loyal customers will then do more business with the organization which wi ll lead to business growth and business growth will result with the organization being profitable.
19 CHAPTER THREE: METHODOLOGY
3.1 Introduction
The objective o~ the study is to detennine the extent to which Botswana Railways' customers' expectations are satisfactorily met and to examine the familiarity of the customers with the organizations products and policies, the attitude of customers towards Botswana Railways operations. A Iikert summated rating method (Churchill, 1997) is used as a technique for carrying out this research. The questionnaire approach is used on all regular and ad hoc customers of Botswana Railways.
The chapter is divided into five parts namely: the research design, sampling plan, data collection, data processing, sources of information and Pilot study.
3.2 Research design
Botswana Railways is a large parastatal of Botswana Government, and much information exists about its operations, both primary and secondary data. As a novice researcher, with time constraints due to work and study requirements, the researcher's choice of methodology wi ll be quantitative research. Quantitative research is defined as a research involving the use of structured questions in which the response options have been predetennined and a large number of respondents are involved (Burns and Bush, 2003). Since the purpose of quantitative research is very specific, it is therefore found to be appropriate because the study intends to establish the company's image.
3.3 Sampling plan
A sample is defined as a representative of a large group or population deliberately selected to provide data on which conclusions and recommendations w ill be made and extended to the general population (Zikmund, 2003). Within sampling there are various strategies or schemes that are available for determining the actual sample used by a study. The sampling scheme that will be used in this study is non-probability sampling. Non-probabi lity sampling refers to the selection of a sample through a non randomized selection process where the sample is selected on the basis of their accessibility or by some purposive judgment that has been exercised by the research (Churchi ll and Lacobucci, 2002). The selected procedure will be judgment sampling. As already alluded to judgmental sampling refers to a sampling process where subjects are chosen to participate in the study with a specific purpose in mind, and the researcher has a ' hunch ' that the subjects be more for the study (Saunders, Phillip and Thornhill, 2007).
20 Only those customers who use freight traffic of Botswana Railways will be selected for questionnaire administration with expectations that they will serve the research purpose. Botswana Railways has a customer population of 27 regular customers and other who are not regular. This population is made up of large corporations [Government and Parastatals] as well as large private enterprises. Specific ways in which this judgmental sampling will be followed in this study will be as follows: • Firstly, list of all Botswana Railways customers will be obtained with appropriate permission from the headquarters in Mahalapye (regular and non regular). • Then a sample of at least 50 respondents will be required for the purpose of this study. In other words, a minimum of 50 respondents will be required for the study tci progress. Once customers have been identified they wi ll be met individually to administer a questionnaire.
3.4 Data Collection
A self-administered survey conducted through a questionnaire forms the basis of data collection process. It is intended that about 70 questionnaires will be administered in Franci.stown, Sua Pan, Selebi Phikwe and Gaborone during the month of February 2010. The questionnaire composition is aimed at finding out the following: • The degree of positive and negative perception of customers about Botswana Railways. • Characteristics that various customers attribute to the organization. • How familiar customers are with the organizations products and policies. • The degree to which customer are tempted to switch to competitors. • The kind of relationship between customers and Botswana Railways. This is ach ieved through the use of the summated rating attitude measurement. The Likert method of summated ratings overcomes criticisms about scoring and allows an expression of intensity of feelings. The method is both constructed and used in a slightly different way. The basic format of the scale for the summated ratings method is the same in both construction and use. Subjects are asked to indicate their degree of agreement or disagreement with each statement (Dillman, 2000).
21 . 3.5 Data Processing
Data collected through the use of questionnaires will be kept safe and confidential. The data will be analyzed. Analysis and .presentation of information will involve the use of diagrams tabulation and cross tabulation. The statistical program for social sciences (SPSS) is the statistical package most widely used by political scientists.
Ln order to use SPSS effectively the data was first coded. Coding is used to make it easier to analyze qualitative data. It involves assigning numbers or symbols to answers providt: 3.6 Sources of information Sources of information wil l include primary data gathered through questionnaires, secondary data from company publications, journals, marketing text books and internet will be consulted for more information on the study. The primary tool used in the study was the questionnaire. A questionnaire is defined by De Vaus, (2002) in general terms as all techniques of data collection in which each person is asked to respond to the same set of questions in a predetermined order. This wiiJ be instrumental in allowing the researcher to examine and explain the relationships between the variables. It is also the most familiar method of enquiry, is cost effective when compared to other modes of enquiry (for example interviews) and is easily analyzed with SPSS. 3. 7 Pilot study 3.7.1 Intention ofthe pilot study A pilot study has been conducted on 4 of the 27 regular customers of Botswana Railways, with the intention to find out if the questionnaire is user friendly. Although a pilot study can be used in different ways, (Baker 1994) observed that a pilot study can also be used to pre-testing or trying out a particular research instrument with the hope that it will give an advance warning about where the main research project could fail, or whether the proposed instrument is inappropriate or too complicated. 22 However, the most important reason for this pilot study is to administer the questionnaire to pilot subjects in exactly the same way as it will be administered in the main study in order to test the validity, of the questionnaire. 3.7.2 Outcomes of pilot study The findings of the pilot study are as follows: Out of the 4 companies on which piloting was done 50% stated that their type of business is mining, while the remaining 50% stated that their type of business is Oil Company and transporting fuel. The pilot study covers respondent companies located in Francistown, Selebi Phikwe, Gaborone and Sua Pan. The company based in Gaborone stated that it is also located in Francistown. Regarding the type of merchandise they deal with they indicated that it was copper and nickel, salt and soda ash, fuel and lubes and fuel products. The numbers of years the respondents have worked for the company varied from 2 to 20 years. Regarding the question: 'how long has your company been doing business with Botswana Railways?' out of the 4 companies included in the pilot test, only 3 which is 75% responded, by indicating that their companies has been doing business with Botswana Railways for 15years, 9 years and +35. On whether the company uses other modes of transport other than rail the answer was a definite yes for all respondents. On a fo llow-up to the question requesting to exp lain if the answer is yes. 25% said rail does not cope and does not reach all our areas of operation, the other 25% indicated that it is because of shortage of wagons and long turnaround times, the last 25% is a "commercial decision" while the last one which represent 25% said it is because is "cheaper and conven ient at times". On the rati ng scale, only 3 companies 75% responded to the quality of service statement with 2 of them 50% stating that they agree with the statement that service quality is good, while the remaining 25% indicated that they neither agree nor disagree. Regarding the attractiveness of facilities 75% agreed with the statement while 25% disagreed. On employees appearance three 3 which is 75% agree, while the other 25% strongly agree with the statement. On whether Botswana Railways keeps its promises 50% agree, wh ile 25% disagree and the other (25% neither agree nor disagree. 75% of the respondents disagreed with the statement "things are done right the first time" while 25% agreed. On whether employees are always willing to help, I 00% responded with a strongly agree. When asked about employees behavior instills customer confidence, 75% of the respondents indicated that they strongly agree with the statement, while 25% agree. When asked if dealing with Botswana Railways employees gives them peace of mind, 75% of the respondents i11dicated that they strongly agree with the statement, while 25% strongly agree. The results of the statement "convenient operating hours" were; 50% strongly agree, 25% agree while 25% neither agree nor disagree. 75% of 23 the respondents indicated that they strongly agree with the statement, "they have an employee who looks after our company", while 25% strongly agree. Asked if Botswana Railways have the interest of their company at heart, 75% of the respondents indicated that they agree with the statement, whi le. 25% neither agree nor disagree. When asked to respond to the statement "equipments are modern" 50% strongly disagree and the remaining 50% neither agree nor disagree. The results of the statement "carriage policies are communicated to us" attracted a response of 50% disagree, 25% agree while 25% neither agree nor disagree. On whether Botswana Railways have a system of informing its customers about their products 50% disagree, 25% agree while 25% neither agree nor disagree. Respondents were asked to think of a time when they had a very dissatisfying interaction with Botswana Railways and were given various choices (service, customer relations, efficiency and others) to choose from and 50% indicated that their dissatisfying interactions were on "service", 25% on "Customer relations" wh ile the other 25% indicated that it was on "others". All this happened in 2009. 50% reported to management, 25% did not take any action, while 25% shouted at the employee. Of the 50% who reported to management, 25% stated that they did not receive an apology, but the mistake was rectified, while the other 25% did not indicate whether corrective step were taken or not. On the question "whether the respondents were satisfied with the way the incident was handled. 50% said "yes" while the other 50% did not respond. In another statement respondent were requested to think of a time when they had a very satisfying interaction with Botswana Railways in any of the following (service, customer relations, efficiency and others) and also state the year of occurrence. 50% indicated that they were satisfied by customer relations, 25% by efficiency while the last 25% ticked both customer relations and efficiency. When presented with the statement when did this happen? 50% said 2009, 25% said Senile delivery, while the other 25% did not respond. Asked if they told somebody about' this incident 75% said "yes" while 25% did not respond. The last statement requested respondent to make any other comments and only one out of the four that piloting was done on them responded. From his comments there are clear indications that the respondent appreciates what Botswana Railways is doing for them. This is deduced from the comments like: Botswana Railway team is constantly working towards improving their service delivery. They wi ll do anything to ensure that respondent get extra product when the need arise. They even go an extra mile in facilitating meetings with our suppliers to help/lobby for better service. 24 3.7.3 Conclusion Generally all the questions were structured in what seems to be easy for respondents to understanq and asking for what they were meant to investigate. Question I and 4A in section B were not responded to by one respondent; however, it is not clear what the non-response indicates other than tbat, there were minor typing errors which were noticed on the questionnaire and were corrected. The portion "other" on the rating scale on question 5 and l 0 section B is rather ambiguous and I would suggest removing it. Although one respondent did not respond to question 7 and 8 it is not clear as to why. After analyzing th is pilot study I can now conclude that other that the minor issues raised above the questions were valid, reliable and sensitive to responded in the sense that they asked what they intended 1o ask as there is a trend that respondent are repeatedly giving same or close to same responses and were not offensive to respondents. 25 CHARPTER FOUR: ANALYSIS AND INTERPRETATION 4.1 Introduction This chapter presents data analysis, discussions and interpretation of the collected data. Data collected from both Botswana Railways regular and irregular customers. However, this data is analyzed and interpreted bearing in mind the research objectives and questions. The chapter is divided into four sections and the first section provides the organization and categorization, followe~ by presentation of results into charts, tables or graphs. This will then be interpreted and clarified with the last section dealing with contextualizing the results. 4.1.1 Response rate At the onset of the questionnaire distribution phase the intention of the researcher was to distribute 70 questionnaires. However, only 67 willing respondents were identified and furnished with the questionnaire. Ultimately 50 questionnaires we returned and used in the study. The response rate on the instrument was 75 %. 4.2. Data analysis and interpretation Type of Business The nature of BR customers is such that they are found in almost all sectors of business. The summary below presents or shows how they are represented in the various industry types for example there is only one respondent in the agricultural type of business (Botswana Agricultural Marketing Board), whi le there are four respondents in the mining type of business. This is a representation of those who responded to the questionnaire. Table 4.1 (a): Distribution of respondents in different types of business One respondent in Two respondents Three respondents Four respondents Total the industry in the industry in the industry in the industry 31 12 3 4 50 26 Figure 4.1 (b) Types of business 27 Figure 4.2 above shows that there was a single respondent to the to the questionnaire when analyzed on the basis of results, (agriculture, building materials, distribution, clothing, coal mining, construction, electricity supply, earth moving· machinery and gas). In some industry there were two· respondents (oil industry, recycling, mining, hardware and glass), at least there were three respondents in the pharmacy and four in t he manufacturi ng industries. Table 4.2: Length of period in busi11 ess Scale How long have you worked for this How long have you been doing business ~om pany with BR Valid ~9 47 Mean ~ .92 14.85 This question is interpreted using the mean method. The average period respondents have worked for their respective company is 9.92 years and the average period when BR customers have been doing business with BR is 14.85. T hi s clearly means that the majority of businesses have been doing business with BR for a prolonged period. This might mean that there is something that compels the respondents to continue doing business with BR. 28 Figure 4.3: Usage of other transport modes by businesses Frequency Figure 4.3 show that 84 % of users use other mode of transport other than Railway to supply materials. Only 16% are relying on Railway system. This is another clear indication that BR customers do not have the confid ence to give Botswana Railways all its transportation transactions. This scenario is further explained by BR customers as it is happening because the organ ization is not available at certain areas. 29 Figure 4.4: Percentage of respondents' Views on Quality of Service Quality of service 5 o- 4 o- .... r::: 3 G) o- u.... G) a.. ~ 2 o- 1 o- 118.41 11 8.41 l1o.2l I f4.11 I u I I T I I Strongly Disagree l\leutral Agree Strongly Disagree Agree Quality of service Regarding the quality of service, table 4.4 above reflects that 53% are satisfied with this factor, where as 46% are either neutral or disappointed. The participants have strong concern on the improvement side of the quality even though the parentage is much lower than those who support. From this information one is compelled to come to a conclusion that although there is a higher percentage of those who are happy with the quaJity of service a significant number of the organization consider the service to be of low quality. 30 . Table 4.5: Respondents' Views 011 Attractive11ess of Facilities Scale Frequency Percentage Strongly Disagree 13 26.5 Disagree 11 22.4 Neutral 13 26.5 Agree 8 16.3 Strongly Agree 4 8.2 Total 49 100 Mea11 = 2.57 Table 4.5 suggests that, most people view BR the facilities as being very poor. The survey shows that 49% of the participants are saying the fac ilities are not attractive enough for customer attraction. 26.5% are neutral in this factor and only 24.5% are happy about the facilities. This is a relatively low percentage when we take into consideration the fact that 49% and 26% are actually not happy with the physical appearance of the organizations facilities. Table 4. 6: Cleanli11ess of Employees Scale Frequency Percentage Strongly Disagree 0 0 Disagree 3 6 Neutral 11 22 Agree 31 62 Strongly Agree 5 10 Total 50 100 Mean =3.76 31 Table 4.6 shows that most people are happy about the cleanness of employees. 72% are happy about this factor and only 28% are either disagree or neutral. The organization should take advantage of its employees who appears clean to their customers and ensure that this positive situation actually works in the organization's favor as it shows that employees are doing their part in terms of relationship building. Table 4. 7: Cleanliness ofPr emises Scale Frequency Percentage Strongly Disagree 1 2 Disagree 11 22 Neutral 15 30 Agree 19 38 Strongly Agree 3 6 Total 50 100 Memr=3.24 Forty four percent of the respondents according to table 4.7 are either agreeing or strongly agree, with the fact that railway premises are. Thirty percent are neutral to this factor while only twenty four percent are disappointed. This question reveals that customers are happy with what employees are doing in terms of keeping the premises clean and those who are either neutral or disappointed are so because the situation might be beyond the employee's control. 32 Table 4.8: Doing Thi11gs Right the First Time Scale Frequency Percentage Strongly Disagree 7 14.3 Disagree 10 20.4 Neutral 12 24.5 Agree 17 34.7 Strongly Agree 3 6.1 Total 49 100 Mean=2.98 Figure 4.8 wanted to find-out if things are done right the first time and 40% of respondents either agree or strongly agree to the statement that things are done right the first time. 24% are neutral whi le 20% are not happy. This might mean that there are employees who are committed to the organization. While on the other hand there are employees who are disgruntled. 33 Table 4.9: Accuracy of R ecords Scale Frequency Percentage Strongly Disagree 2 4.3 Disagree 8 17.4 Neutral IS 32.6 Agree 19 41.3 Strongly Agree 2 4.3 Total 46 100 Mean=J.U Records seem to be kept accurate according to table 4.9 above as most customers 45.6% opinioned that their records are error free. 32.6% are neutral on this factor and 21.7% are not happy on their records management. Hence the respondents are content with the way records are kept. 34 Table 4. 10: Employees Willingness to Help Em.ployees are always willing to help 6 ;o- 5.o - o- -c: 4 Q) u Q; 3 ~o- a.. lss.1 l 2 :o- 1 o- l2o.4l 114.31 r 14.1r l I [6.11 I v I I I Strongly• Disagree Neutral Agree Strongly Disagree Agree Regarding this service, table 4.12 of the survey shows that 69.4% of respondents are saying the employees are willing to help (Agree, Strongly Agree). 20.4% are neither disagreeing nor agreeing and only 10.2% are disappointed of this factor. This therefore means that employees are willing to do their part and there must be some element that the organization needs to deal with in order to get this aspect right. Table 4.11: Customer Confidence in Employees Behavior Scale Frequency Percentage Strongly Disagree I 2.1 Disagree 6 12.5 Neutral 13 27.1 Agree 24 50 Strongly Agree 4 8.3 Total 48 100 35 Mean=3.5 Table 4.11 reflects an appreciation of respondents, as 58.3% have positive attitude towards this aspect and only 14.6% have negative opinion. The result actually reveals a situation where employees are more trusted than the organization, which might mean that the whole operation is silo based. Table 4. 12: Appreciation of Dealings with BR Scale Frequency Percentage Strongly Disagree I 2 D isagree 6 12.2 Neutral 15 30.6 Agree 21 42.9 Strongly Agree 5 10.2 Total 48 100 Mean=3.48 Tables 4.12 reflect that a relative number of BR customers appreciated the service that they get, as 53.1% of customers are happy and 30.6% have no specifi c opinion. 14.2% are not happy. Mostly the organizations service in this area is good. Hence the customer has more confidence on individual employees than the organization. 36 Table 4.13: Con venieuce of BR Operating Hours Scale Frequen"cy Percentage Strongly Disagree 1 2. 1 Disagree 13 27.1 Neutral 7 14.6 Agree 26 54.2 Strongly Agree I 2.1 Total 48 100 Mean = 3.27 Regarding the convenience of operating hours, majority of the participants are happy according to table 4.1 3. The survey shows that 56.3 % are either Agree or strongly agree on the operating hours and only 29.2% are inconvenienced. The respondents are making it clear that the operating ours are convenient for them. Table 4.14: Vie ws of Respondents on BR Customer Care Sca le Frequency Percentage Strongly Disagree 4 8.7 Disagree 8 17.4 Neutral 11 23 .9 Agree 18 39.1 Strongly Agree 5 10.9 Total 46 100 Metm=3.26 37 Botswana Railways employees take good care on their customers; this is confirmed by table 4.14 above. This survey shows that out of 50 respondents, 46 are saying they get good care from BR employees. Only 4 did not respond to this statement. The response is actually revealing that there is need for BR to intensify it contacts or relationship with its customers. Table 4.15: Views of R esp ondents on BR C ustomer Interest Scale Frequency Percentage Strongly Disagree 0 0 Disagree 7 14.9 Neutral 16 34 Agree 19 40.4 Strongly Agree 5 10.6 Total 47 100 Mean=3.47 This survey shows that most customers are happy the way employees of BR take care of their companies. Table 4. 15 shows more than 51 % are saying that they are happy the way employees takes care of their companies. Only 14.9% of the customers are not happy. While 34% do not have any specific opinion. 38 Table 4.16: Use of Moderfl Equipmeflf Scale Frequency Percentage Strongly Disagree 10 22.2 Disagree 24 26.7 Neutral 14 31.1 Agree 8 17.8 Strongly Agree I 2.2 . Total 45 100 Meafl=2.51 Table 4.16 clearly reflects that, most customers (48.9 %) responded that equipments are old, and are unable to cope with demands of today's business requirements, 31.1% of them do not give any specific answer to this question. While 20 % have a positive opinion on the equipments and the remaining I 0% did not respond to the statement. Table 4.17: Communication of carriage policies to customers Scale Frequency Percentage Strongly Disagree 10 21.7 Disagree 9 19.6 Neutral 12 26.1 Agree 12 26.1 Strongly Agree 3 6.5 Total 46 100 Meafl=2.76 Table 4.17 clearly reflects lack of communication; most customers note that carriage policies are not communicated to them. The survey shows that 41.3% are not happy with the communication. Only 32.6% seems to be happy with the communication aspect, 26.1% are neutral while 8% did not want to respond to the statement. 39 Table 4.18: BR System of Informing Customers about Th eir New Products Scale Frequency Percentage Strongly Disagree 15 31.9 Disagree 13 27.7 Neutral 8 17 Agree 9 19.1 Strongly Agree 2 4.3 Total 47 100 Mean=2.36 To this question, as reflected in table 4.18 above most customers (56%) were saying BR does not have a proper system of informing them (customers) of the updates. 22% seem to be happy, 16% is neutral while 6% decided not to respond. This is a serious limitation on customer relationship given that communication is the backbone of customer relations. 4.19: Most dissatisfactory Customer-Relations Aspect Dissatisfaction Frequency Percentage Service 18 58.1 Customer relations 5 16.1 Efficiency 16.1 ., Others .) 9.7 Total 31 100 The most dissatisfying aspect when dealing with BR according to table 4.19, as reflected above is service 58.1% are dissatisfied by it. The survey also reflect a high number of respondents who decided not to respond to this question, which is a worrisome trend as it might mean that they are not happy with the service or service aspects from BR. 40 Table 4.20: Year of Occurrence of Inciden ce Year Frequency Per centage 2008 I 4.5 2009 6 27.3 2010 IS 68.2 Total 22 100 Most incidents happen on 20 I 0 (68.2%), which might mean that it is a new development that might grow if not immediately attended to. On the other hand the high number of non- response by the subjects of the study, may suggest that the concepts were not well unde rstood by BR customers. Table 4. 21: S teps Taken to Deaf with Incidence Incidence Frequency Percentages Reported to management 22 73.3 Shouted at the Employee 2 6.7 Threatened to stop giving them business 3 10 Did nothing 3 10 Total 30 100 When incidents happened, most customers prefer to report to the management. Which is a good indication on the customer 's side as they let management know about this incident so that management can apply remedial action? Table 4.22: Reporting of lncidefl ce to Manageme11t Management action Frequency Percentage Did you receive an apology 15 62.5 Has the mistake been corrected 4 16.7 Management did nothing 5 20.8 Total 24 100 41 Most customers were saying they received an apology from the management (62.5%). Although there were incidents where the survey reveals that· management did nothing (20.8%), on the other hand 16.7% responded that corrective actions were taken. However, there is a concern as 52% of the respondent decided not to say anything about this statement. Table 4.23: Satisfaction with Incidence Handling Scale Frequency Percentage Yes I 1 50 No 11 50 Total 22 100 As shown in table 4.23 above, 50% of those responded are satisfied and the other 50% were not satisfied. However, there is a big number of respondents who did not respond to the question (56%) which has implications in as far as handling of complaints is concerned. Table 4.24: Aspect of Most Satisfac~ion Satisfaction Frequency Percentage Service 12 36.4 Customer relations II 33.3 Efficiency 5 15.2 Others 5 15.2 Total 33 100 Although the most satisfied aspect is service with 36.4% followed by customer relation with 33.3 %. A substantive percentage (34%) did not give any response, a situation which may suggest that some customers are yet to understand or appreciate the difference between the three words (service, customer relation and efficiency) or alternatively this might be suggesting that the company is focusing on service as an effort to retain customers. 42 Table 4.25 : Year of Incidence Year Frequency Percentage 2008 I 5.3 2009 3 15.8 2010 15 78.9 Total 19 100 Most incidents happen on 2010 (78.9 %), which might mean that it is a new development that might grow if not immediately attended to. On the other hand the high number of non- response by the subjects of the study, may suggest that the concepts were not well understood by BR customers. Table 4.26: Reporting of In cidence Scale Frequency Percentage Yes 19 73.1 No 7 26.9 Total 126 100 For this question, the majority of respondents answered with a Yes (73 .1 %). They told the incidents to others, this is a clear indication that customers can be effective in terms of communication. This effective communication can either be positive or negative depending on how the customers perceive your service. 43 CHARPTER FIVE: FINDINGS AND RECOMMENDATION. 5.1 Introduction This chapter provides the findings of this study; it also provides the recommendations that could be used for improving Botswana Railways turnover through the use of relationship marketing. It looks at whole study and tries to find out how the information used in the study wi ll be able to assist in attaining the objectives of the study. Whether BR experiences relate to other experiences as observed by various authors? The study is aimed at finding out how relationship marketing could be used to assist Botswana Railways, to be attractive to its current and potential customers, and be able to competitively do business in the every changing environment. However, this chapter provides findings and recommendation which have been derived from the information obtained from Botswana Railway customers. The findings will be interrogated further to find out if they synchronise with the literature review, and the recommendation. 5.2. Research Findings The survey reveals that majority of organizations doing business with Botswana Railways are those which deal with or handle big and bulky commodities, like mining, industrial and construction. This revelation is consistent with Berkeley (2005) as they argued that trains are capable of transporting large numbers of containers which have come off the shipping ports. Trains are also used for the transportation of steel, wood and coal. T rains are used as they can pull a large amount and generally have a direct route to the destination. The study further reveals that the respondents have been with thei r organizations for at least I 0 years on average, while the organizations that respondents work for have been doing business with Botswana Railways for a period of at least 15 years on average. T his is quite some time and it might mean that customers are happy with BR or they are compelled by certain circumstances to continue doing business with BR. This however is clarified by the results of thi s survey which shows that majority of the customers are not happy with the general service provided by Botswana Railways. The statement which is consistent with the observation by Bendapudi et al (I 997) where they asserted that, merely looking at how long customers have maintained relationships can be misleading because both dedication and constraints can keep customers in relationships. However, the quality of the relationships may be very different based on whether they are driven by dedication or constraints. Specifically, constraints lead at best to maintaining the status quo. Customers who maintain relationships with service providers do so either because of constraints (customers "have to" stay in 44 - the relationship) or because of genuine dedication (customers "want to" stay in the re lationship). Constraint-based relatio nship maintenance is predicated on custo mers' feelings of dependence on the service provider. BR Customers are concerned about the poor response from the t:nanagement when incidents are reported. This causes dissatisfactio n and is a lso contrary to the observation by Fi scher et a!. , ( 1999) which affirmed that customer satisfaction can be achieved by encouraging dissatisfi ed customers to complain directl y to management. This situation reveals a unique situation where management is less committed as compared to non-management empl oyees. Regarding a proper feedback system. majority be lieves that BR does not have proper communication system to its customers. A fact that is confirmed by Kasper et a l. (2004), When they suggested the introduction of measures that wi II provide tlexibi lity in ra il way operations and more importantly creating communicati ons channe ls that will a llow rail way operatio ns to be able to sha re its constraints and cha llenges with their custo mers. The majority of the organization customers believe that the facilities and equipment that BR is using are neither attractive nor modern or they are not up-to-date. These o ld facilities and equipments are pro bably due to the snail pace approach with which railways o rganizatio ns adopt when technology changes. Thi s statement is supported by the Brown and Sumer (2002) contention that it is an unfottunate situation as it appears that generall y there is lack of urgency in ma ny railway organizatio ns the situation echoed by Kasper et at (2004) when they talked about the lack of fl exibility of ra il transport. Overa ll the survey reveals that customer re lationships between e mployees and customers are generally satisfactory although not fully satisfied. Most custome rs said that they have good re latio nship with employees and they a lways take care of them. These findings suggest that customers are rather sympathetic w ith employees because they think employees are doing their patt, while management or the promoters of the company are not doing the ir part. This thinking is derived from the pattern of answering questions by the respondents. When they were asked about the attractiveness of the facilities and the modernity of the equipments the majority of the responde nts said both the facilities and equipments were neither attractive nor modern. On the other hand when they are asked about the employee cleanliness, willingness to help and behavior which instills confidence the majority of respondents agreed that indeed BR e mployees are trying the ir best to assist them. This finding is consistent with Reichhe ld and Sasser ( 1990) literature when they observed and measured a development of the relationship quality as a psychological indicator of the re lationship intensity from a student's perspecti ve at eight stages in an empirical study conducted during a tutoria l at a particular 45 university. The results showed a significant growth in the relationship qua lity occurring in the midd le of the relationship, i.e. between the third and sixth period, and beyond that, the value balanced out at a relatively high level. Although in this study. the findings arc clouded by the high number of those who chose to be neutral or not to respond to some questions. A closer look at this scenario suggests that. the respondent decided to use a balancing effect. As they mi ght have thought that disagree ing to questions which are directly asking about the employees would not be good as they already have developed personal relationships with them. While agreeing will not be good because it is factually incorrect. hence some chose to answer in the neutral. whi le others opted for not answering a an expression of no opinion. This demonstrates that there is a personal relationship between the employees and the customers; however, this personal relationship should be used to build effective customer relationshi p. This fin ding reveals the presence of one of the seven r ·s (People) and the absence of another ·p· (Physical) wh ich are core in relationship marketing; People The fact that customers arc positive with employees indicates that the organization's employee behave in a professional and cou11eous man ner which makes them approachable by customers. On the basis of the concern about the poor response from the management when incidents are reported, the researcher i inclined to conclude that the respondents' understanding of employees excludes management and this kind of scenario i consi tent ' ith the observation by Marks ( 1997). that it almost goes without saying that people in a railway organization are an im portan t resource. What is required, therefore. is total customer awareness from the very top to the lowest levels of staff in the rail way organi zation. Thi s will require instilling customer awareness culture by senior managers. (Which this stuc(v reveals as lacking at BoiS II'tma Railwc~rs amlthe poor response from managemenl sign!/ies lack ofcusto mer alt'areness from/he ,.e1y lOp) Businesses must deve lop the habit ofthinking in terms of the people inside and outside of the business who are responsible for every element of thei r sales and marketing strategy and activities. Th is i important because every single decision and policy has to be carried out by a specific person. in a specific way. The organi ations ability to select, recruit, hire and retain proper people, with skills and abilities to do the job is more important than everything else put together. Successful business, develop the habit of thinking in terms of exactly who is going to carry out each task and responsibil iry. In many ca es. it's not possible to move forward until you can attract and put the right person into the right position. Many of the best business plans ever developed sit on shelves today because the (people who created them) could not find the key people who could execute those plans. 46 Physical The organizational facilities fail to provide the tangible aspect of service that is expected from it in order to assist customers in their judgment of quality or perceived service quality. This finding is corroborated by Marks ( 1997), who stated that physical evidence is the element of service mix which allows the consumer to make judgments on the organization. When a customer walks into railway station buildings his/her expectations are a clean, friendly environment. In the passenger train when customers travel first class they expect that there should be enough room to be able one sleep. Therefore physical evidence is an essential ingredient of the service mix; ctistomers will make perceptions based on their sight of the service provision which will have an impact on the organizations perceptual plan of the service. What is also interesting in these findings is that the majority of customers use other mode of transport and the main reasons given are that rail does not reach certain places (fl exibility) and rail does not provide door to door delivery. This response is supported by Trai ll and Berkeley (2005) as they argued that trains are capable of transporting large numbers of containers which have come off the shipping ports. But they also observed further that the main disadvantage of rail freight is its lack of flexibility. For this reason, rail has lost much of the freight business to road transport. Which suggests that customer satisfaction, customer retention and customer loyalty are compromised. 5.3 Recommendation Like any other business operating in today's competitive environment BR should migrate from the traditional transactional way of doing business to a relationship based way of doing business in order to ensure their continual existence in the market. In order to achieve this Botswana Railways must adopt the following recommendations: 5.3.1. A turnaround strategy with more emphasis on building relationships with its customers In an attempt to strategicall y turnaround the organisation relationship marketing must be adopted, and be allowed to taking a centre stage in Botswana Railways business. The trend with contemporary organizations is to move away from the traditional transaction based relationships. Botswana Railways as pa11 ofthe business community should also move in this direction. Records at Botswana Railways reveal that there are (27) customers who have been consistently doing business with the organization. These are the customers that should be used as the base for implementation of relationship marketing. For instance Botswana Railways should categories these customers into two groups, group one should be made up of the first twelve customers in tenns of revenue or tonnage contribution and those remaining should be in group two. Nine relationship officers should then be 47 appointed and each a llocated two and five customers in group one and two respectively, with a clear mandate to specifically look after these customers and make it their own business to ensure that a win win situation is created between the organi zation and those specific customers. 5.3.2. Staff training The recommendation above ( I) should be supported by the establishment of internal marketing, which is a management philosophy of treating employees as customers. The main focus of this philosophy is to look at the organization's policies, procedurt::s ami processes to ensure that they support the ultimate customer satisfaction. To achieve this management should invest most of its time on staff training with more emphasis on attitude management and communication management. In communication management employees should be taught about the relationship between employee and profit, while in the attitude management emphasis should be on training existing staff about internal and external customers relationships, with more emphasis on internal customers treated the same way as external customers. 5.3.3. C ustomer analysis Customers are a very important element of any business BR inclusive, because of this frequent and coordinated analysis should be conducted in order to get direct feedback as the information they provi de is more valuable. BR customers' needs like any other customer's a re not static as they change all the time. Therefore BR should conduct customer frequent customer analysis to enable them to know enough about what influences them. in terms of: What prompted them to use BR serv ice? What prompted them to usc competitor's service? Will they consider using BR again if not, why not? Customer analysis will help BR to discovering who their customers really are, understanding their key needs and wants and how it can meet their specific requirements, in order to gain customer loyalty and enabling the organization to target them more strategically. T he organization should conduct research to find out about customer expectation, and how such expectations can be satisfactorily met. 5.3.4. Branding Branding has been proved to be an essential component of re lationship marketing (O'Neill, 2008; Peppers and Rogers, 2004). Since BR has only 27 regular customers, it should identify those that are able to load a complete train and dedicate a certain number of wagons to them. Then the organisation should start negotiation with such customers so that, the dedicated wagons should be branded with both brands ie BR brand and the customers brand. This will be mobile advertising and will be able to reach out to a huge number of potential customers. For instance BR trains deliver consignments in 48 various places in South Africa, Mozambique, Zambia, Zimbabwe and the Democratic Republic of Congo. These trains will provide moving bill boards in all countries that they traverse. BR should create a brand that will work on and off the rails, for instance the companies that they form alliance with should also carry BR brand, this will enable customers who are situated at places which are not closer to the railway line to be aware of the organisation. Since trains are dual directional, the brand design will have to take into consideration how the design wi ll look like when the train is going forward as well as backwards movements. 5.3.5. Forming alliances Relationship marketing should be used by BR to create the most needed flexibility and provide a door to door delivery through efficiently collaborating and making alliances with other transportation modes to make the train a more attractive alternative than it is at present. Botswana Rai lways should form alliances with neighboring railways, road transporters, clearing agents and other stakeholders like those involved in the warehousing. These collaborations wi II enable the contiguous railways to pick up loads destined for Botswana and other neighboring countries from various places like the ports and manufacturing plants and hand them over to BR at the border. Where BR will then pick them up to various destinations, For instance, those destined to places wruch are far away from the rail heads will then be handed over to road transporters at the appropriate stations, those requiring customs clearance will then be immediately cleared by the agents, while those with rail siding in their yards will be placed or delivered immediately. BR should therefore analyze and determine areas in which they can use their fac ilities to offer alternative services to different customers, for instance hiring land to be used as storage and transshipping facilities for companies which are situated at area far from rail line or foreign companies doing business in the country. Consistent with similar findings made by Chakravoni, 2009, this recommendation will enable BR to expanding its outlets and customer contact points, and also provide a one stop service for its customers as they will only have to communicate with one organi zation which will then see to it that other alliance partners go into action immediately. 5.3.6. Assets renewal a nd equipment refurbishment Most of BR assets and equipments like buildings, wagons, locomotive, machinery and other facilities have been inherited from National Railways of Zimbabwe (NRZ) during the takeover of the railways. Although locomotives and wagons where initially bought by BR prior to takeover they were used by NRZ for a period of close to ten years prior to takeover. This has resulted with BR basically starting business wi th old assets and ro ll ing stock. However, the organization did not give assets renewal and 49 • equipment refurbishment priority until they started showing signs of failures. Hence it is recommended that this important aspect of business should be given priority as it is now a concern for the customers. 5.4 Limitation of the study Although a pilot study was conducted prior, it seems that it failed to pick-up the difficulty of the questions in the questionnaire, which could be attributed to a significant number of respondents who decided to be neutral or avoided answering certain questions. Other limitations which need to be acknowledged are: Most of the questions would be understood as aimed at victimizing employees that fi nding in formation that would assist in relationship bu ilding. ln most cases people who work directly with BR were avoiding answering question preferring their supervisors to do so despite the fact that they only tend to come into picture when there is a major disruptions at railways. Some of the respondents were not so conversant with English language and their business acumen was somewhat limited. 5.5 Conclusion It is apparently clear that the majority of Botswana Railways customers are not happy with the general service provided by Botswana Railways. Their concerns are the lack of interest displayed by management when incidents are reported. The majority of these customers believe that Botswana Railways does not have proper communication system to its customers. 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(1995): Services marketing, Pitman Publishing, London Contractors- Comparing UK and German Practice http://www.brookes.ac.uklother/conmark/IJCMIV olume 02/Issue 01/02010 L.QQ£ Zikmund, G.W. (2003): Business Research Methods, 7111 Edition, Harcourt Brace College Publishers. 54 Annexure l : Questionnaire Image perception of Botswana Railways by its ·customers Section A Company information Please give your company details, by filling in the space provided below. I. Type of business ...... 2. Location ...... 3. Merchandise ...... 4. How long have you worked for this company? ...... Section B Service with Botswana Railways I. How long has your company been doing business with Botswana Railways? ...... 2. Does the company use any other mode of transport apart from rail: Yes ( ) No ( ) 3. If the answer in question two (2) above is yes, please explain why? ...... 4. Please indicate your response by a tick or a cross in the appropriate box, and then indicate your rating in relation to the adjectives or descriptive phrase. This will be your rate on how you agree or disagree with each statement in regards to Botswana Railways. 55 Strongly Disagree Neither /\gree Strongly Disagree agree nor Agree disagree A Quality of service is good 8 Facilities are attractive c Employees appear clean D Premises are kept clean E Things are done right the first time F Records are error free G Employees are always willing to help H Employees behaviour instills customer confidence I Dealing with BR gives you peace of mind J BR has convenient operating hours K BR has an employee who looks after our company L They have the interest of my company at heart M Equipme nts are modern N Carriage policies are communicated to us 0 They have a system of informing us about · their products Think of a time when you had a very dissatisfying interaction with Botswana Railways and answer the following: 56 5. What were you most dissatisfied with? Service Customer Relation Effi ciency Others 6. When did this incident happen ...... 7. What steps did you take? (tick where applicable) a) Report to management ( ) b) Shouted at the employee ( ) c) Threatened to stop giving them business ( ) d) Did nothing about it ( ) 8. If you reported the incident to management: a) Did you receive an apology ( ) b) Has the mistake been corrected ( ) c) Were you compensated ( ) d) Management did nothing ( 9. Where you satisfi ed with the way this incident was handled? Yes ( ) No ( ) Think of a time when you bad a very satisfying interaction with Botswana Railways. I 0. What were you satisfied with? Service Customer Relation Efficiency Others II. When did the incident happen? ...... 12. Did you tell somebody about it...... Other comments ...... 57