Effect Of Technology Based Customer Relationship Management On Service Quality In The Telecomunications Industry In Arusha, Tanzania

ABSTRACT

Customer relationship management is a concept that was adopted by companies around 1990s. This concept cannot be ignored by companies, taking into consideration that companies are operating in a very competitive environment brought about by technological advancements and globalization in the business environment. The aim of customer relationship management is to create, nurture and maintain mutual relationships between a company and its customers so as to attain customer loyalty for long term benefits of both customers and company. Therefore, this study concentrate to establish the effect of technology based Customer Relationship Management on Service Quality, in the telecommunications industry in Arusha City in Tanzania. The research had five specific objectives. The first objective was to assess the effect of system automation on service quality, the second was to assess the effect of system functionality on service quality, the third was on establishing the effect of system user acceptance on service quality, the fourth was on examining the effect of system integration on service quality and the fifth was on determining the moderating effect of micro environment factors of competition and supplier behavior on the relationship between technology based Customer Relationship Management and Service Quality. The study used an Explanatory and Descriptive research designs. The target population of the study comprised the four telecommunications companies in Tanzania (Airtel, Tigo, Vodacom and Zantel), their respective distributors and customers with a combined total population of 26,514,895. A multi-stage sampling technique was used to draw a representative sample size of 323 respondents from the total population. The study used structured questionnaires in data collection. A total number of 226 mobile subscribers in Arusha were administered with the questionnaires and 97 respondents from mobile phone operators and their distributors in several departments. The primary data was collected on a spot basis between June and August 2014. Data obtained from the field was analyzed using both descriptive and inferential statistics. Measures of central tendency and measures of dispersion of the mean and standard deviation respectively and relevant charts were used to summarize the data. Multiple Linear regression analysis was applied to test the hypotheses. The descriptive results of the research indicate that mobile phone companies have employed the technology based CRM systems to a good extent (μ=4; δ=0.9) so as to integrate their business activities towards delivering services to customers. The results of the hypotheses tested indicate that there is no statistically significant relationship between both system automation and system functionality and service quality (β=-0.109, p=0.766 β=-0.244, p=0.584) respectively. However, the study finds that there is a statistically significant relationship between system user acceptance and service quality (β=-0.588, p=0.021) as well as system integration and service quality (β=0.814, p=0.043). The moderating variable, micro environment has influence on the relationship between the independent variables and the dependent variable. The study recommends that the mobile service organizations need to invest not only in technology based CRM but also to invest in other marketing practices since they have potential to enhance the level of service quality offered by mobile phone companies. The study concludes that for the service based companies, it is important to integrate technology based CRM resources with other aspects of the micro environment such as competition and supplier behavior for better performance. The study suggests that future research on technology based CRM needs to incorporate the aspects of individual IT users‟ demographic and psychological characteristics.