The Word of Mouth, Perceived Service Quality and Trust On Customer Loyalty in the Freight Forwarding Industry in Uganda

ABSTRACT The purpose of this study was to establish the relationship between word of mouth perceived service quality, trust and customer loyalty in freight forwarding industry. The study was guided by the following research objectives, to examine the relationship between word of mouth and customer loyalty, to examine the relationship between word of mouth and trust, to examine the relationship between trust and customer loyalty, to examine the relationship between Perceived Service quality and customer loyalty. There was need and desire to advocate for unsecured creditors, employees and tort victims to know the law governing corporate personality in order to have smooth running of business in Uganda. Many of the aforementioned were being victimized because they didn't know what was expected from the process doing business with companies and as well most companies did know how to handle certain issues regarding the remedies, entitlements of unsecured creditors, employees and tort victims in an unfortunate event of corporate insolvency. A combination of qualitative and quantitative methods were applied and data collected via interviews, questionnaires, observation and literatures review. The study relied on both secondary sources and government publications related to corporate personality. Data were summarized and coded into themes and sub-themes from which conclusions and recommendations were drawn. Among the many peculiar findings included the,ignorance of unsecured creditors, employees and tort victims about the law governing corporate personality in Uganda and enforcement of their legally established remedies in the actual abuse of the corporate personality.

TABLE OF CONTENTS

APPROVAL ........................................................................................................................................ ii

DEDICATION .................................................................................................................................... iii

ACKNOWLEDGEMENT .................................................................................................................... iv

LIST OF ACRONYMS ........................................................................................................................ X

ABSTRACT ........................................................................................................................................ xi

CHAPTER ONE .................................................................................................................................. 1

INTRODUCTION ............................................................................................................................... 1

1 . 0 Background .................................................................................................................................... 1

1.2 State1nent of the Problen1 ............................................................................................................... 4

1.3 Purpose of the Study ...................................................................................................................... 5

1.4 Objectives of study ......................................................................................................................... 5

1.5 Research Questions ........................................................................................................................ 5

1.6 Significance of the study ................................................................................................................ 5

1. 7 Scope of the Study ......................................................................................................................... 6

1.7.1 Subject Scope .............................................................................................................................. 6

1. 7.2 Tin1e Scope ................................................................................................................................. 6

1.7.3 Geographical Scope ..................................................................................................................... 6

1.8 Conceptual Framework .................................................................................................................. 6

CHAPTER TWO ................................................................................................................................. 8

LITERATURE REVIEW ..................................................................................................................... 8

2.1 Word of mouth and Customer loyalty ............................................................................................. 8

2.2 Word of 1nouth and Trust ............................................................................................................... 9

2.3 Trust and Custo1ner Loyalty ......................................................................................................... 10

2.4 Perceived Quality and Customer loyalty ....................................................................................... 11

CHAPTER THREE ........................................................................................................................... 13

METHODOLOGY ............................................................................................................................ 13

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3.1 Introduction .................................................................................................................................. 13

3.2 Research Design ........................................................................................................................... 13

3.3 Sampling Design .......................................................................................................................... 13

3.4 Target Population ......................................................................................................................... 13

3.5 Sainple size .................................................................................................................................. 13

3.6 Data Collection Procedures .......................................................................................................... 14

3.6.1 Questionnaire Design ................................................................................................................ 14

3.7 Data Quality Control .................................................................................................................... 14

3.7.1 Reliability and Validity ............................................................................................................. 14

3.8 Measurement ofvariables ............................................................................................................. 15

3.8.1 Customer loyalty ....................................................................................................................... 15

3.8.2 Word of Mouth .......................................................................................................................... 15

3.8.3 Trust ......................................................................................................................................... 15

3.8.4 Perceived Service quality ........................................................................................................... 15

3.9 Data processing and analysis ........................................................................................................ 15

3.10 Li1nitations of the study .............................................................................................................. 16

CHAPTER FOUR .............................................................................................................................. 17

RESULTS AND FINDINGS OF THE SURVEY ............................................................................... 17

4.0 Introduction .................................................................................................................................. 17

4.1 Sainple Characteristics ................................................................................................................. 17

4.11 Gender and Marital Status Distribution ....................................................................................... 17

4.1.2 Age group by Highest Level of Education Distribution .............................................................. 19

4.1.3 Business Category and Period in Business Distribution .............................................................. 22

4.2 The relationships among the variables .......................................................................................... 23

4.2.1 The relationship between word of mouth and customer loyalty .................................................. 24

4.2.2 The relationship between word of mouth and trust. .................................................................... 24

4.2.3 The relationship between trust and customer loyalty .................................................................. 24

4.2.4 The relationship between Perceived Service quality and customer loyalty .................................. 25

4.3 The Regression 1nodel .................................................................................................................. 25

4.4 ANO VA (Analysis of variance) Findings ..................................................................................... 26

4.4.1 ANOVA results for Management Rank by Variables ................................................................. 26

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4.4.2 ANOVA results for Business category by Variables .................................................................. 27

4.4.3 ANOVA results for Academic level by Variable ........................................................................ 28

4.4.4 ANOVA results for Gender by Variable .................................................................................... 29

CHAPTER FIVE ............................................................................................................................... 30

DISCUSSION, CONCLUSION AND RECOMMENDATIONS ........................................................ 30

5.1 Introduction .................................................................................................................................. 30

5.2 The relationship between word of mouth and customer loyalty ..................................................... 30

5.3 The relationship between word of mouth and trust. ....................................................................... 30

5.4 The relationship between trust and customer loyalty ..................................................................... 31

5.5 The relationship between Perceived Service quality and customer loyalty ..................................... 31

5.6 Conclusions .................................................................................................................................. 31

5. 7 Reco1n1nendations ........................................................................................................................ 32

5.8 Areas of future research ................................................................................................................ 33

REFERENCES .................................................................................................................................. 34

APPENDIX I: QUESTIONNAIRE .................................................................................................... 40