THE EFFECT OF CUSTOMER RELATIONSHIP MARKETING ON

CUSTOMER SATISFACTION: THE CASE OF ETHIOPIAN

ELECTRIC UTILITY, HAWASSA CITY

BY:

GENETU FANTA MASANE

HAWASSA UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT AND ACCOUNTING

JUNE 14, 2019

HAWASSA, ETHIOPIA
THE EFFECT OF CUSTOMER RELATIONSHIP MARKETING ON
CUSTOMER SATISFACTION: THE CASE OF ETHIOPIAN
ELECTRIC UTILITY, HAWASSA CITY

A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE

REQUIREMENT FOR MASTER OF BUSINESS
ADMINISTRATION (MBA) IN MARKETING MANAGEMENT

BY: GENETU FANTA MASANE

ADVISOR: ASFAW WASSIE (PHD)

CO-ADVISOR: ABDULAZIZ ABDELA (MBA)

HAWASSA UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT AND ACCOUNTING

JUNE 14, 2019

HAWASSA, ETHIOPIA

I
 SCHOOL OF GRADUATE STUDIES
HAWASSA UNIVERSITY

ADVISORS’ APPROVAL SHEET

This is to certify that the thesis entitled “The Effect of Customer Relationship

Marketing on Customer Satisfaction; the Case of Ethiopian Electric Utility,

Hawassa City” submitted in partial fulfillment of the requirement for the degree of

Master of Business Administration (MBA) in Marketing Management, the Graduate

program of the school of management and accounting, and has been carried out by

Genetu Fanta Masane ID.No. MKMW/729/08 under our supervision. Therefore, we

recommend that the student has fulfilled the requirements and hence here by can submit

the thesis to the school of management and Accounting.

Name of Principal Advisor Signature Date

Name of Co-advisor Signature Date

II
 ACKNOWLEDGEMENTS

This thesis is the fruit of many peoples‟ effort and contribution. Therefore, I would like
to acknowledge great contribution received form the following. The biggest thanks go to
Asfaw Wassie (PHD) and Abdulaziz Abdela (MBA) for their constrictive comments and
critical feedback in the course of preparing this thesis to final report.

I want to extend my special acknowledgement to Hadas Kassaye and several other

friends who have been helpful in the process of organizing the work. I would also like to
extend my thanks to all my key informants in Ethiopian Electric utility of Hawassa town
for devoting their precious time to furnish me with all relevant information to write up
the final thesis.

III
 Table of Contents

Acknowledgements........................................................................................................................III
Table of Contents...........................................................................................................................IV
Lists of Abbreviations..................................................................................................................VII
List of Tables...............................................................................................................................VIII
List of Figures.................................................................................................................................X
Abstract..........................................................................................................................................XI
Unit One: Introduction.....................................................................................................................1
1.1 Background of The Study....................................................................................................1
1.2 Statement of the problem.....................................................................................................4
1.3 Research Question................................................................................................................6
1.4 Objectives of the study.........................................................................................................6
1.4.1 General objective........................................................................................................6
1.4.2 Specific Objectives.....................................................................................................6
1.5. Research Hypothesis...........................................................................................................7
1.6. Significance of The Study...................................................................................................7
1.7. Delimitation of the Study....................................................................................................8
1.8. Limitation of the Study.......................................................................................................8
1.9. Organization of the Work...................................................................................................8
Chapter Two: Review of Related Literature..................................................................................10
2.1. Historical Background of Relationship Marketing...........................................................10
2.2. Definitions and goals of Relationship Marketing (RM)...................................................11
2.3. The Contribution of Relationship Marketing on Customer Satisfaction and
Retention..................................................................................................................................11
2.4. Relationship Marketing dimensions..................................................................................12
2.4.1. Trust.........................................................................................................................12
2.4.2. Commitment.............................................................................................................12
2.4.3. Communication........................................................................................................13

IV
 2.4.4. Empathy...................................................................................................................14
2.4.5. Competence..............................................................................................................14
2.4.6. Responsiveness.........................................................................................................15
2.5. Technology based CRM....................................................................................................15
2.6. Customer Satisfaction.......................................................................................................16
2.7. Attraction, Satisfaction, and Relationship Management...................................................18
2.7.1. Customer Attraction.................................................................................................18
2.7.2. Customer Retention..................................................................................................18
2.7.3. Customer Satisfaction..............................................................................................19
2.8. Conceptual framework......................................................................................................20
Chapter Three: Research Methodology.........................................................................................21
3.1. Research Design...............................................................................................................21
3.2. Target Population..............................................................................................................21
3.3. Types and Sources of Data................................................................................................22
3.4. Sampling Design...............................................................................................................22
3.5. Sample Size Determination...............................................................................................22
3.6. Data Collection Methods...................................................................................................24
3.7. Method of Data Analysis..................................................................................................25
Chapter Four: Presentation, Analysis and Discussions..................................................................24
4.1 Introduction..................................................................................................................26
4.2 Response Rate..............................................................................................................26
4.3 Reliability Test Result..................................................Error! Bookmark not defined.
4.4 General and Demographic Information.......................................................................26
4.5 Trust.............................................................................................................................28
4.6 Commitment.................................................................................................................30
4.7 Empathy.......................................................................................................................32
4.8 Responsiveness.............................................................................................................34
4.9. Communication...........................................................................................................36
4.10. Customer Satisfaction...............................................................................................38
4.11 Correlation..................................................................................................................40

V
 4.12 Regression Results.....................................................................................................42
Chapter Five: Summary of Findings , Conclusion, and Recommendations.................................48
5.1 Summary of findings..........................................................................................................48
5.3 Conclusions........................................................................................................................50
5.2 Recommendations of The Study........................................................................................50
6. References..................................................................................................................................51
7. Appendixes.................................................................................................................................59
Appendix I: Information..........................................................................................................59
Appendix II: Research Questionnaire......................................................................................60

VI
 LISTS OF ABBREVIATIONS

CAIDI Customer Average Interruption Duration Index

CRM Customer Relationship Marketing
CSPP Customer Service Policy and Procedure

EEPCO Ethiopian Electric Power Corporation

EEU Ethiopian Electric Utility
GIS Geographical Information System
GTP Growth and Transformation Plan
HVDS High Voltage distribution system.
ICS Interconnected System
ISO International Standard Organization
KA Kilo Ampere
KV Kilo Volt
KVA Kilo Volt Ampere
KW Kilo Watt
KWHM Kilo-Watt-Hour Meter
MBO Management by Objective
MW Mega Watt

PDCA Plan Do Check Act

PPBS Program planning and budgeting
SAIDI System Average Interruption Duration Index
SAIFI System Average Interruption Frequency Index

SCADA Supervisory Control and Data Acquisition System.

TQM Total Quality Management
ZBB Zero-base budgeting

VII
 LIST OF TABLES

Table 1: The total number of customers of EEU in Hawassa city comprises in 2018/2019.........23

Table 2: Reliability Results of the effect of customer relationship management on

customer satisfaction in the Ethiopian Electric Utility, Hawassa city, southern
Ethiopia in 2019. ............................................................. Error! Bookmark not
defined.4

Table 3: General and demographic information of the customer of the Ethiopian Electric
Utility, Hawassa city, southern Ethiopia in 2019..............................................................26

Table 4: Trust for services provided to the customers by Ethiopian Electric Utility of
Hawassa city, southern Ethiopia in 2019...........................................................................29

Table 5: Commitment of the Ethiopian Electric Utility of Hawassa city to its customers,
southern Ethiopia in 2019..................................................................................................30

Table 6: Empathy of the Ethiopian electric utility of Hawassa city to its customers,
southern Ethiopia in 2019..................................................................................................33

Table 7: Responsiveness of the Ethiopian electric utility of Hawassa city to its customers,
southern Ethiopia in 2019..................................................................................................35

Table 8: Communication process of Ethiopian electric utility of Hawassa city to its

customers, southern Ethiopia in 2019................................................................................37

Table 9: Customer satisfaction of the Ethiopian electric utility of Hawassa city to its
customers, southern Ethiopia in 2019................................................................................39

Table 10: Correlation of the customer satisfaction with its factors in the Ethiopian
Electric Utility of Hawassa city, southern Ethiopia in 2019..............................................40

VIII
Table 11: Tests of Normality.........................................................................................................43

Table 12: Collinearity Statistics.....................................................................................................43

............................................................................................
Table 13: Multiple regression analysis Model Summaryb 45

Table 14: ANOVAa on combined variables...................................................................................45

Table 15: Coefficientsa on combined variables..............................................................................46

IX
 LIST OF FIGURES

Figure 1: A Service satisfaction framework adopted from based on J.M. Hays and A.V
Hill.....................................................................................................................................19

Figure 2: Conceptual framework adopted from Mohammed et al(2012)......................................20

Figure 3: Occupational status of the customer of the Ethiopian Electric Utility, Hawassa
city, southern Ethiopia in 2019..........................................................................................27

Figure 4: Overall empathy of the Ethiopian Electric Utility of Hawassa city to its
customers, southern Ethiopia in 2019................................................................................32

Figure 5: Overall responsiveness of the Ethiopian electric utility of Hawassa city to its
customers, southern Ethiopia in 2019................................................................................34

Figure 6: Communication process of the customers and Ethiopian Electric Utility of

Hawassa city, southern Ethiopia in 2019...........................................................................36

Figure 7: Overall customer satisfaction of the Ethiopian electric utility of Hawassa city,
southern Ethiopia in 2019..................................................................................................38

Figure 8: Histogram of customer satisfaction................................................................................42

X
 ABSTRACT

The aim of this research is to investigate The Effect of customer relationship marketing on
customer satisfaction ;the case of Ethiopian electric utility within Hawassa City. It describes the
relationship between trust, competency, commitment, empathy, responsiveness and
communication with customer satisfaction in selected service areas in Hawassa City. Also, it
shows the gaps between customer’s expectation and perception on the service delivery system.
This study is important to consumers of the Ethiopian Electric Utility services because it
highlights the necessity to integrate customer centric management methods that placed strategic
significance on satisfying specific consumer needs. The study was conducted by cross-sectional
survey design and primarily based on data collected through structured questionnaire from 395
participants located at 3 different service centers by stratified simple random sampling technique.
Data was collected using standard questionnaire, compiled, sorted, cleaned and coded to have
the required quality, accuracy and completeness. Then the data was entered into the computer
using the SPSS v. 20.0 for analysis. Descriptive analysis was conducted to generate graphs,
charts and tables to explain and answer the research questions and the customer relationship
variables by using Pearson’s correlation, multiple regression and ANOVA analysis. This study
result revealed that the overall level of agreement on customer satisfaction of the Ethiopian
electric utility of Hawassa city was low when compared to other studies. The customer
satisfaction had a strong positive correlation with trust, commitment, empathy, responsiveness,
and communication related factors which had p-value (< 0.001). Finally, after multiple
regression analysis, customer satisfaction with the above dimensions had statistically significant
positive relation which had p-value (< 0.05) among Ethiopian electric utility organization
towards customer satisfaction at Hawassa city. The study recommends that the Ethiopian electric
utility of Hawassa branch should work hard towards customer satisfaction by building better
trust, commitment, responsiveness, empathy, and effective communication through media. It
means that they need to work hard in order to improve trust, build customer loyalty, identify
customers’ need, modify products/services to meet customers’ requirement. The utility service
center also has to improve the service responsiveness and open communication in order to
increase customer satisfaction.
Key words: customer relationship, Customer satisfaction, Ethiopian Electric Utility, Hawassa
City, south Ethiopia.

XI
 CHAPTER ONE

INTRODUCTION

1.1 Background of The Study

Ethiopia has registered inspiring GDP growth in recent years, ranging between 6% and
12% per year depending on the data source Jayne et al. (2014). It ranks as sub Saharan
Africa's second most populous country, with over 100 million people. Investments in
renewable energy resources and hydroelectric power in particular have been key drivers
of economic growth in recent years (Salami et al., 2014). The total installed electricity
power projection suggests that total generation 2014 equal to 2145 (MwBhandari et al.
2015). Demand for power has grown by 30% per year. In 2012/2013 hydro power
comprised 90% of the electricity supplied in Ethiopia (Berhanu et al., 2017).

The flourishing electricity intensive industries, commercial buildings, businesses, and the
widespread utilization of inefficient electrical appliances, coupled with the inefficiency of
the electricity utility services, not only created a huge gap between electricity demand
and supply, but also negatively affected the reliability of supply of electricity to the
country. The actual supply of electricity is not more than 60% to 70% of the total demand
(Addis Fortune, 2015). The Ethiopian Energy Agency noted that 20% of energy produced
in Ethiopia is believed to be wasted. This is equivalent to 400-megawatt power almost
equal to the electricity generated by the country's Gilgel Gibe II hydroelectric dam. So,
the energy produced becomes a loss. This creates power supply shortage. The power
produced is not used efficiently (Berhanu et al., 2017).

In the 21st century, every marketing activity must be led by principles and systematic
ways. As stated in Kotler, Armstrong, & Tait (2010). Marketing is a process by which
companies create value for customers, and build strong customer relationships, in order to
capture value from customers in return. Furthermore, Gronroos (1990)stated that
Marketing is to establish, maintain, and enhance relationships with customers and other

1
parties, at a profit, so that the objectives are met. This is achieved by a mutual exchange
and fulfillment of promise.

Customer relationship marketing (CRM) is a concept for managing a company‟s

interactions with customers, clients, and sales prospectsRoberts-Lombard & Du Plessis
(2012). It involves using technology to organize, automate, and synchronize business
processes. The objectives of CRM are to enhance profitability, income, and customer
satisfaction. Anshari & Almunawar (2012). To attain CRM, many organizations use set
of tools, technologies, and procedures to support the relationship with the customer to
enhance salesM. Anshari & M. N. Almunawar (2012).

The concept of CRM has been practiced among various service sector organizations
across the world. To site a few, the banking sector applies the concept in order to
maintain long lasting relationshipsHussain, Hussain, Hussain, & Sajid (2009), insurance
organizations to improve and maintain relationships through trustworthy behaviors,
commitment toward service and two-way communicationMuhammad Anshari &
Mohammad Nabil Almunawar (2012), Chodzaza & Gombachika (2013), the hotel
industry, to improve performance with the use of CRM dimensions Mohammed, Alem, &
Rashid (2012), the healthcare sectors to facilitate business processes by organizing,
automating and coordinating interactions with patients Muhammad Anshari &
Mohammad Nabil Almunawar (2012), nursing homes, in order to improve residents
satisfaction through improved service qualityMuhammad Anshari & Mohammad Nabil
Almunawar (2012) (Wang, 2013).

A key challenge for any service business is to deliver satisfactory outcomes to its
customers in a way that are cost effective for the company. “If customers are dissatisfied
with the quality of the service, they would not be willing to pay very much for it or even
to buy it at all if competitor offer better”Chodzaza & Gombachika (2013). Most
businesses are facing the challenge of delivering effective services which can satisfy their
customers. Most of the time, there is a gap between customer expectation and service

2
provided by the businesses. These gaps in service expectation and delivery can damage
relationships with customers.

It is already more than two decades since customer relationship marketing began to
attract attention in developing relations between customers and organizations. Today‟s
customers are significant factors in the company management with the power to change
cooperate short term and long-term strategies. Conquering markets and achieving market
leadership was no longer a company`s primary concern. Instead, activities within the
organization had to be coordinated to ensure that they contributed to the development of
mutually profitable relationships with the right customers. During the 1990s, people
became more aware of the development of buyer-seller relations and realized that the
relations had consequences for the entire organizations (Peelen2011, 4-5).

Today, Ethiopian electric utility is facing challenges with the supply needs of customers.
Hence, delivering quality service and creating customer satisfaction is expected. So, it
becomes very important for EEU to meet or exceed the target customers‟ satisfaction
with quality of services expected by themSeyoum (2012).

One important aspect of EEU operations is its dealing with customers in order to achieve
their satisfaction through determining their needs and establishing the operation system
that deliver such needsBerhanu et al. (2017). It is determined by the customer„s
perception and not by the perceptions of the providers of the serviceAfdel & Lemma
(2013).Therefore, it is important to determine customer needs to design the service for
demand requirements. Assessing customer satisfaction is an important element in all
private and public institutions on how to attract, retain and manage their
customersChodzaza & Gombachika (2013).The gaps in service expectation and delivery
can damage relationships with customers. Hence, assessing customer satisfaction of EEU
of Hawassa city with respect to the mentioned dimensions below can lead to better
assessment of its operations and continuous improvement of the service provided by it. In
order to achieve that, this current study was attempted to evaluate EEU of Hawassa

3
branch services in relation to customer satisfaction in all the three customer service
centers located in Hawassa City.

1.2 Statement of the problem

In today‟s constantly changing and turbulent business environment, providing a superior

service quality through an adequate and a strong focus on customers need is one of the
key factors enabling firms to gain a long lasting competitive advantage in winning the
market Gentile, Spiller, & Noci (2007). For this, nowadays marketers are trying to focus
more on a continuous monitoring and evaluation of service quality, involving various
innovative offerings and service developments, which have a direct influence on
customers‟ service experiencesLadhari, Pons, Bressolles, & Zins (2011). Because, for
instance, better service quality increases perceived service value and satisfaction;
improves the service provider's customer retention and financial performance; and also
enhances a firm's corporate image (Pantea, 2008).

The Ethiopian Electric Utility has been undergoing various continued transformations,
such as via Customers‟ Management System (CMS), decentralization of Accounting and
Billing system from once highly centralized down to the regional distribution offices,
districts, and customer service centers (CSCs), and Prepayment (Metering) System, in an
effort to realize its long term strategic vision of „„becoming a center of excellence in
providing quality electric service to everyone‟s doorstep and being competitive in energy
export.‟‟ The corporation has also set a mission of „„providing adequate and quality
electricity generation, transmission, distribution, and sales services, through continuous
improvement of utility management practices, and responsive to the socio-economic
development and environmental protection needs of the public‟‟ Seyoum (2012).

According to Ethiopian Electric Power Corporation (EEPCo) annual bulletin of

2011/2012, concerning quality of supply, the service quality in the electrified areas is not

satisfactory. This is due to poor design, lack of care and negligence during

implementation, and lack of scheduled maintenance. This resulted in inappropriate

4
conductor size in the distribution system, poor quality of construction, lack of

maintenance, transformer overloading, phase imbalance, extended outage times under

faulty condition, high system losses and poor safety situation has affected productive

resources like time and technicians as well as the general publicAfdel & Lemma (2013).

Previous studies indicated that services delivered by the company are below customers‟
expectation. Study done in east Addis Ababa region shows that there is poor service
quality and poor performance in service process like new power connections, complaint
handling and recovery of service failure procedure which in turn led to failure to meet
requirements in order to provide a reliable service to its customersZeritu (2010). The
other study show also ascertained that despite the company‟s limitation, there has been a
substantial gap between customers‟ expectations and perception of the service
renderedSeyoum (2012). In addition, those who adopted the new prepaid metering
system service are presenting their service dissatisfaction that the corporation does not
have customer-friendly service hours so that customers can refill their prepayment
(smart) card anytime they run in short of power (say at night and early in the morning)
Berhanu et al. (2017).

Despite the fact that quality service provision and ensuring customer satisfaction is a key
issue for all categories of customers, looking at the problems faced by customers of EEU
is indispensable. Ethiopian Electric Utility collects about 80% of its revenue from only
20% of its industrial customersAfdel & Lemma (2013). Therefore, it is important to show
for contributor of the revenue, they should be given special consideration. However,
continuous power interruption, low level of responsiveness, unable to perform the
promised service dependably and accurately and the like issues are the problems raised
by various customers of Ethiopian Electric Utility in Hawassa city. The aim of this study
is to investigate the effect of CRM dimensions on customer satisfaction so that a better
relationship marketing strategy can be recommended and to analyze the effect of
customer relationship marketing, which is the critical factor in customer relationship

5
management, and customer satisfaction and most important CRM components that
influence Customer Satisfaction in Ethiopian Electric Utility of Hawassa city.

1.3 Research Question

This research has tried to answer the following research questions listed below:

 What are the critical factors in customer relationship marketing in EEU in case of
Hawassa city?
 What relationship exists between CRM of EEU and customer satisfaction in case
of Hawassa city?
 What is the effect of CRM dimensions on customer satisfaction in case of
Hawassa city?

1.4 Objectives of the study

1.4.1 General objective

The general objective of this study is to analyze the effect of customer relationship
marketing on customer satisfaction in the Ethiopian Electric Utility, Hawassa city in
2019.

1.4.2 Specific Objectives

 To identify factors in customer relationship marketing in case of EEU of Hawassa

city.
 To analyze the relationship of CRM and customer satisfaction in case of EEU of
Hawassa city.
 To examine the effect of customer relationship marketing dimensions on customer
satisfaction in case of Hawassa city.

6
 1.5. Research Hypothesis

This study was approached with the following hypothesis:

 Ho1: Trust doesn't have significant effect on customer satisfaction.

 Ho2: Competence has no significant influence on customer satisfaction.

 Ho3: Empathy has no significant effect on customer satisfaction.

 Ho4: Responsiveness has no significant effect on customer satisfaction.

 Ho5: Communication has no significant effect on customer satisfaction.

1.6. Significance of The Study

Ethiopia is recognized as an emerging country in terms of industrial development and

economic growth. Hawassa is the fast growing city which has industry zone and
industrialization has been increasing. Due to that, power supply in terms of electricity is
the fundamental and denoted as the back bone to the economy and its development.
Therefore, the outcome of this study can provide an insight for government and decision
makers of Ethiopia Electric Utility of Hawassa branch on how to attract, retain and
manage their customers.

This study is important to different companies and industries to show gaps and fruit full
suggestions to the policy makers and researchers regarding to the service quality and the
level of customer satisfaction of EEU in Hawassa city. This kind of customer satisfaction
survey and evaluation conducted by researcher helps the company to assess the problem
areas. It is also useful to consumers of the Ethiopian Electric Utility of Hawassa city
because it has highlighted the necessity to integrate customer centric management
methods that placed strategic significance on satisfying specific consumer needs.

Additionally, the study can be used as a reference for potential researchers who would like to
further investigate the issue either in private or public organizations.

7
It is also important to the researcher as it equips him with research and analytical skills
that are important in enhancing his capability to understand real life business
management issues and enable him to be in a better position to comprehend and solve
multifaceted organizational problems in a professional manner.

1.7. Delimitation of the Study

Due to constraints in various resources such as time and finance, the scope of the study
was limited to only in three customer service centers and other supporting offices in
Hawassa city. Therefore, the findings would be limited in this regard. However, the
researcher was very much aware that more generalizable findings would have been
possible if representation of sales and marketing (service) branches located in various
regions and cities of the country were considered to a reasonable degree given the fact
that the Corporation is such a very complex and huge organization that has a
monopolistic control of power utility service locally, and nationally. The study assessed 3
customer services centers (Districts) in Hawassa city using the descriptive research
design. The data was collected with the use of questionnaire, and document techniques.

1.8. Limitation of the Study

As any research processes are not without limitations, this study has faced various
limitations. To site a few, reluctance of key respondents to supply relevant data and the
problem of non-response. Since Customer Relationship marketing is a new issue yet to be
adopted by many public organizations in Ethiopia, relevant resources such as journal
articles and previous research studies were difficult to find which the researcher was
much relied on a synthesis of the existing literature in the area and then extracting data
from key respondents of the organization under study.

1.9. Organization of the Work

In the cauterization of the thesis, chapter one contains Background of the study, problem
statement, research questions, objectives, delimitation of the study, definition of
concepts, terms and terminology, etc. Chapter two comprises the different theoretical and

8
empirical reviews of related literature; chapter three involves research design, target
population, types and sources of data, sampling design, sample size determination, and
method of data analysis; the fourth chapter also contains an analysis and discussion of
data (linking the theoretical framework, methods and evidences); the fifth chapter has a
conclusion and recommendation, and finally bibliography, and appendix.

9
 CHAPTER TWO

REVIEW OF RELATED LITERATURE

2.1.Concept of Relationship Marketing

Relationship marketing is a new phenomenon which is developed in the 21th century.

Though its definition differs, all marketers and managers apply the concept. The dramatic
change from transactional marketing to relationship marketing increases its significance
and contribution in the customer relationship marketing Lindgreen (2001). In the recent
time, relationship marketing has become known as most important strategic element of
business. It has direct impact on firm‟s strategic performance and also relationship
marketing is more effective when the relationships are more critical to customers.
Moreover, effectiveness is greater when relationships are built with an individual than a
firm Robert & Daunt (2006).

The main purposes of relationship marketing are creating and enhancing customer
relationship starting from the beginning to satisfy and retain the existing customers. In the
other way transactional marketing attempts to make the sale and acquire new customers
rather than retaining the existing customers Kotler et al. (2010). According to
Mohammed et al. (2012; Oly Ndubisi (2007; Seeman & O'Hara (2006). CRM is an
integration of marketing activities and technological resources to create strong
relationship of firms with their customers. Customer relationship marketing focuses on
building relationship, applying systematic way to collect and analyze data, and integrate
all these activities throughout the firm, and enhancing the ability of integrating these
activities throughout the network of firms that collaborate to generate customer value,
while creating share holder value for the firmHarter, Schmidt, Agrawal, & Plowman
(2013).

10
 2.2.Definitions and goals of Relationship Marketing (RM)

Relationship marketing is the process of attracting, retaining and improving relationships

with customers and terminating them when necessary. So the purpose of those
individuals involved in relationship marketing is to achieve their objective through
mutual exchange and the fulfillment of promises Gronroos (1990; Juščius & Grigaite
(2011; Ogbuji, Izogo, & Alagah (2011).

Relationship marketing deals with planning, understanding, analyzing, monitoring and

control of measures that initiate, stabilize, intensify and promote business relationships
with stakeholders, mainly with customers and the creation of mutually beneficial
relationshipsRoberts-Lombard & Du Plessis (2012). Customer relationship marketing is a
customer oriented approach and focuses on the long lasting relationship with customers
Sekaran & Bougie (2016). The objective of Customer relationship marketing is to
provide benefits and values to customers based on their requirement rather than what the
company wants to sell. To make customers loyal it requires building and developing
strong relationship.

2.3. The Contribution of Relationship

Marketing on Customer Satisfaction and
Retention

Customer retention refers to firm‟s ability on providing the required services, without
defections to profitable customers‟ to satisfy and retain themMouly Potluri & Hawariat
(2010). The main goal of effective Customer relationship marketing is retention and the
key to retention is through different means and practices to ensure repeat trade from
existing customers by satisfying their requirements better than those of competing
brandsAhmad (2011). Now a day companies are concentrated on developing strong
relationship and loyalty with their ultimate customersChodzaza & Gombachika (2013). In
the past, companies did not worry about fully satisfying and retain their customers,
because at that time customers did not have many alternative suppliers and the firm
believed on sales volume rather than satisfying and retaining customers. Effective
customer relationship marketing makes customers satisfied and delightedOly Ndubisi
11
(2007). In turn, delighted customers remain loyal and talk favorably to others about the
company and its products. Different studies indicated that there is a big difference in the
loyalty of customers who are less satisfied, somewhat satisfied, and completely
satisfiedKotler et al. (2010).

2.4.Relationship Marketing dimensions

2.4.1. Trust

Trust is the “corner stone” for building and developing long term relationship with
customers Doney, Barry, & Abratt (2007; Juščius & Grigaite (2011). According to
Chattananon & Trimetsoontorn (2009)Trust is defined as a belief or conviction about the
other party‟s intention within the relationship. In relationship marketing perspective, trust
is defined as the dimension of a business relationship marketing that determines the level
in which each party feels rely on the integrity of the promise offered by the other party.
The key issue to develop customer relationship marketing is not only obtaining a
contractual agreement, but development of mutual trust is mustClow & Kurtz (2004a).
The primary issue in gaining customer acceptance of service delivery system and process
modification is to develop customer trust and relationship. This relationship involves both
parties sharing information and working together effectively to solve problems.
Generally, trust is shown to have a positive influence on key relational outcomes &
customer retention Doney et al. (2007).

2.4.2. Commitment

Commitment is a critical issue in building customer loyalty, in identifying customers‟

need, modifying products/services to meet customers‟ requirement, and the existence of
flexibility in customer relationship is a key issue to improve the service Oly Ndubisi
(2007).

According toWhite & Yanamandram (2007), Commitment provides an enduring desire to

develop and maintain effective customer relationship. Commitment is an important

12
ingredient that determines customers from switching to an alternative service
providerKusumawati, Yanamandram, & Perera (2010).

Commitment is central issue to develop successful relationship marketing, and the level
of trust influences it. Moreover, commitment is one of the factors that enhance the level
of long-term relationship and increases customer loyalty. According to Morgan & Hunt
(2004) they also described that service providers should consider the influence of service
commitment on retaining loyal customers, and act accordingly and also show genuine
commitment to improve customer relationships. Committed customers are resistant to
competitors, attempt to convince and tell good thing about the company to other
customers and they are willing to expand their business with the brand, and to develop
their relationship with the brand over a period of time.

2.4.3. Communication

Communication is defined as a formal as well as informal exchanging and sharing of

meaningful and timely information between customers and service providersArokiasamy
& Abdullah (2013; Sin, Tse, Yau, Lee, & Chow (2002). Communication is transmitting
of message or information, through different methods, from the firm to customers and
vice versa Bosch, Tait, & Venter (2011). According to Kotler et al. (2010)describes that
word of mouth and marketing communication are considered as methods of
communication to and from clients.

Communication refers to the ability to provide timely and reliable information to

customers. Today, there is a new view of communications as an interactive conversation
between company and its customers, which takes place during the pre-selling, selling,
and post selling stagesAhmad (2011). Communication in relationship marketing is
keeping valued customers by providing timely and reliable information on the way of
services delivery system and service changes and communicating with customers if a
delivery problem occurs. Communication tells dissatisfied customers what the
organization is doing to correct the causes of dissatisfaction. When there is effective

13
communication between an organization and its customers, a better relationship was
resulted and customers were more loyal to the organization Oly Ndubisi (2007).

2.4.4. Empathy

Empathy is the ability to share and understand another person‟s state of mind or
behavior. Empathy is characterized by looking expressions of the people facial
expression or body movement, or by hearing their tone of voice, which has immediate
response on how they feel and treat them in the manner they would like to be treated Oly
Ndubisi (2004).

According to Clow & Kurtz (2004b), empathy is defined as the ability of an individual to
identify with the feelings or thoughts of another person. This skill is necessary for
organization because customer contact serve as the interaction between customers and
service provider organization. When customers have special requirements or problems,
employees should understand the problem from their point of view and should attempt to
solve it.

2.4.5. Competence

When customers perceive the organization to be competent, they are more likely to stay
with organization for longer period of time. It is assumed that competence as a
relationship marketing practice that would have positive effect on customer retention.
One major way that customers become very committed to service provider is the level of
organizational competence demonstrated by the service provider Aldlaigan & Buttle
(2005).

According to Kim & Cha (2002)competence is expressed in terms of professional

training and development of staff, organizing knowledgeable staff, ability of identifying
customer needs, having adequate knowledge of the organization products and services,
and providing quality and professional services to clients. There is positive relationship
between service providers‟ competence and its customers‟ satisfaction and
14
retentionNarteh (2009).

15
2.4.6. Responsiveness

Responsiveness is a firm‟s ability to respond to the needs and wants of its customers in
timely manner. For a firm to be responsive, it must gain deeper understanding and
profiling of customer behavior, real-time customer information and loyalty management
at Point of Service, optimized sales through cross-sell activities and rapid response to
customer‟s requirement. The firm‟s ability to respond the changing market conditions
and increase customer‟s choice, satisfaction and loyalty provides value to customers.
Showing sincerity and willingness to help customers are some of the key issues in
responsiveness and enhances customer retention Kuranchie (2010; Schneider (1995)).

2.5.Technology based CRM

CRM based technology enables organizations to plan and implement successful

marketing actions for retaining customers long-last and making them more profitable,
because of the customer database and other information-storing systems Roberts-
Lombard & Du Plessis (2012). Most CRM applications take great advantage of
technology innovations with their ability to collect and analyze data on customer patterns,
develop prediction models, respond with timely and effective customized
communications, and efficiently deliver personalized value offerings to individual
customers Wang (2013). CRM technology has also been viewed as providing the glue
that integrates front office (i.e. sales, support and marketing) and back office (i.e. order
fulfillment) applications for sales and marketing, via tools for detailed analysis and
modeling, along with the technology infrastructure to seamlessly provide a single
cohesive and comprehensive customer-facing unit Wang (2013).

Technology improves marketing capabilities by providing valuable information about

customers, which, in turn, can help both managers and employees to achieve specific
marketing goals much more effectively Roberts-Lombard & Du Plessis (2012; Wang
(2013). Similarly, noted that development of every organization in information
technology area improves its capability in collecting, saving, analyzing, and sharing

16
knowledge about customer. This leads to increase the organization‟s capability in
responding the customers‟ needs and maintaining them. The customer values analysis
and services personalization, that are the results of advances in information technologies
revolting from traditional approach to the integrated marketing systems, can be accessible
through customer information system and automation of customer support
processesMohammed et al. (2012).

With the development of sophisticated information management tools, such as database

marketing, data warehousing, data mining, and push technology, companies are striving
to seamlessly incorporate the latest technology into their CRM systems. In particular,
sales people frequently depend on continually updated software programs to better
respond to their customers and build enduring customer relationships Kotler et al. (2010).
Thus, it enables the organization to personalize its services with high quality and low cost
and help employees in contacting customersStockwell (2005).According to Bergeron
(2004; White & Yanamandram (2007), a real successful CRM should integrate
information technology (such as basics installation and applicable system) ,information
resource (such as customer data base and good interaction with customers), and
organizational resource (such as customer oriented business culture) to be effective.

2.6.Customer Satisfaction

Customer satisfaction is a concept beyond the positive effect on the organizational

efforts. Customer satisfaction is a customer‟s response, or judgments to a product or
service in terms of the extent to which consumption meets expectations. Customer
satisfaction is an important factor in customer retention. If the customer is satisfied, then
he/she may become volunteer marketer of that product or service. Customer develops an
attitude after using any product or service and it is called customer satisfaction. If there is
no difference between customer satisfaction and customer`s expectations then the
customer is satisfied, otherwise customer is not satisfied. Companies try to not only
minimize the difference between these factors but also trying to provide products and

17
services to their customers that exceed their expectations in order to retain them as loyal
customers Kusumawati et al. (2010).

According to Kotler et al. (2010)customer satisfaction depends on product‟s perceived

performance relative to a buyer‟s expectations. The customer‟s past experiences in terms
of product consumption or interaction with organization and his or her satisfaction plays
a critical role in the customer‟s future satisfaction formationLindgreen (2001). Customers
have expectations about products and services they use and these expectations are
developed from their previous buying, from friends and relatives opinionsTynan &
McKechnie (2009). There are two main approaches for customer satisfaction. Based on
the first approach, customer satisfaction is a state that resulted for customer after
consumption. The second approach implies that the satisfaction is the customer‟s
perceptual process and evaluation that is resulted from his or her personal consumption
experiences. Customer satisfaction is important and it is significant source of loyalty and
retentionChodzaza & Gombachika (2013).

Customer satisfaction has become the key critical success factor for any business entity.
Customer service is one of the main components in an organization‟s marketing strategy.
Customer service skills have to be included in the marketing mix as well, as a vital
strategy for the organization in order to ensure customer satisfactionAhmad (2011).

Customer satisfaction is an investment that the organization has to recognize as an

intangible asset of the organization's balance sheet. Firm value on the stock price as well
as CEO‟s wealth on long-term incentive compensation increases tremendously when the
customers are satisfied with the product or the service offered by the organization Harter
et al. (2013). Customer satisfaction has an incremental benefit to the organization and
therefore, the incentives of managers have to be linked with the intangible aspect of
customer satisfaction along with the performanceBhandari et al. (2015).

18
 2.7.Attraction, Satisfaction, and Relationship Marketing

According to this study, here are the relationship strategies chosen to be reviewed in this
literature. They include:

1) Customer attraction
2) Customer retention
3) Customer satisfaction
4) Relationship marketing

2.7.1. Customer Attraction

Attraction as a driver of customer commitment means something that makes the service
provider interested to a given customer or the other way round so attraction can be based
on financial technology or social constructs. Consequently, even social contacts that are
highly appreciated may form a source of attraction that can lead to a business
relationship. If attraction exists between two parties, the basis for a relationship is
developing, indeed understanding. Understanding the role of attraction in a customer
commitment decision is the key issue that little attention has been paid on the service
marketing area Gronroos (1990). Quality should play role of the chief facilitator to
achieve the objectives of relationship marketing, such a commitment to the brand,
emotional involvement and active interactionHussain et al. (2009; Morgan & Hunt
(1994).

2.7.2. Customer Retention

Customer retention is increasingly being as an important managerial issue especially in

the context of saturated market or lower growth of the number of new customers. It has
been acknowledging as a key objective of relationship marketing primarily because of its
potential in delivering superior relationship economics, i.e. it costs less to retain than to
acquire new customers. The assumption is that generalized theories, which imply
universal applicability, tend to overlook the distinctive impact of conceptualized business

19
conditions on effective customer retention strategies, the fact is that both theoreticians
and managers should consider business context in developing and implementing
customer retention strategies Aldlaigan & Buttle (2005).

With the cost of losing customer rising every day, companies continually seek new ways
to acquire, retain and increase business. Service has long been an important factor in
customer retention, and new research suggests its role in more critical than ever and was
continue to grow throughout the yearsLewis & Mitchell (1990).

2.7.3. Customer Satisfaction

Satisfaction and dissatisfaction are seen as two ends of a scale which are related to each
other but only have slightly differences from each other where the location is defined by
a comparison between expectations and outcome Pantea (2008). A customer is satisfied
when the outcome of the source meets his or her expectations and when the service
quality is more than those expectations. The service provider is having the delighted
customer contrary when the perceived overall service quality is much more than or
beyond his or her expectation. We can strongly say that the customer is dissatisfied when
products and services are bellow the perceived standard Aldlaigan & Buttle (2005; Hays
& Hill (1999).

Figure 1: A Service satisfaction framework

Source: Hays & Hill (1999)

20
“Overall satisfaction with the provision of a service that is needed by the customer is a
function of the buyer‟s degree of satisfaction with various aspects of the service
offered”Armstrong & Green (2005).Although satisfaction applies to both tangible and
intangible goods the emphasis should be on the services setting.

The expectancy disconfirmation paradigm in process theory provides the infrastructure

for the vast majority of satisfaction studies and encompasses four constructive elements
(expectation, performance, disconfirmation and satisfaction) Lindgreen (2001)(Liljander
and Strandvik, 1995).

Close relationship does exist between customer‟s loyalty and high levels of customer‟s
satisfaction which brings customer to be delighted. Firms should not only meet their
customer‟s expectations but also they should try to excite them in one or another way.
Relationship marketing replaced traditional transactions oriented approaches of
marketing by placing more emphasis on the creation of customer value by means of
developing and maintaining relationship Tynan & McKechnie (2009).

2.8.Conceptual framework

Trust

Competence
Customers
Commitment Satisfaction

Empathy

Responsivenes

Communication

Figure 2: Conceptual framework association between variables

Source: Adopted from Mohammed et al. (2012)
21
 CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Description of Study Area

This study was conducted on the Ethiopian Electric Utility of Hawassa Branch. Hawassa
is the capital city of Southern Nations, Nationalities and Peoples Regional State. The area
is located 270 km South from the capital city Addis Ababa of Ethiopia. Based on the
2007 National population and Housing Census, the current projected population of
Hawassa city is 329,734 inhabitants of whom 169,677 were males and the rest 160,057
Females. The city has three centers of electric utility services namely Service Center I, II
and III with a total customers of 12470, 14202 and 7271 respectively. According to the
Electric Utility of Hawassa Branch, these customers are classified into residential,
industrial, business, staff, and street line customers.

3.2 Research Design

The study has adapted explanatory research design. As Babbie (2011)states, explanatory
research explains causal relationship between cause and effect of a phenomenon; it aims
at explaining causal relationship between variables. Kothari (2007) poses the explanatory
research method as an empirical inquiry that investigates a contemporary phenomenon
within its real-life context; when the boundaries between phenomenon and context are
not clearly evident; and in which multiple sources of evidence are used.

3.3 Target Population

Burns and Groove (1997) argue that a target population is the entire aggregation of
respondents that meets designated set of criteriaGrove, Burns, & Gray (2012). The target
population of this study was electric service subscribers currently getting services from
EEU at Hawassa city. The target population of the study has comprised five customer
groups namely; Industrial customers, Residential customers, Business customers, Staff

22
customers, and Street light customers currently getting services at three service centers
located at Service center 1, service center 2, and service center 3 in Hawassa city.

3.4 Types and Sources of Data

Data sources used in this research was both primary and secondary. Primary data was
collected using structured questionnaire and interview for selected key informants from
customers of EEU found in Hawassa city. The sources of secondary data were from
published and unpublished materials like article journals, newsletters, manuals,
magazines, and annual reports.

3.5 Sampling Design

In order to analyze the views of customers of EEU of Hawassa city on CRM, all the 3
service centers in Hawassa city were selected using cluster sampling techniques and then
since the populations under the study is not homogeneous, stratified sampling technique
was used to classify customers on the basis of subscription (Tariff) or customer type.

After stratification as Residential Customers (Tariff 10), Business Customers (Tariff 20),
Industrial Customers (Tariff 41), staff customers (Tariff 13), and street light customers
(Tariff 30), Structured questionnaires were administered to each customer type through
simple random sampling technique in which every single element in the population has a
known and equal chance of being selected as a subject. Stratified sampling was selected
because of the nature of population as the population is classified in different
consumption and tariff level which leads to the assumption that customers perceive the
organization‟s service differently.

3.6 Sample Size Determination

Considering the level of dispersion and variance of the study population, the sample size
is determined using the following formula as it stated by Yamane (1967).

23
 𝑁
𝑛=
1 + 𝑁(𝑒2)

Where, n – designates the sample size the researcher used.

N - Designates total number of the five categories of customers in Hawassa city
e – Designates maximum variability or margin of error 5% (0.05).
1 – Designates the probability of the event occurring.
The total number of customers of EEU in Hawassa city comprises of 33,943 as shown in
the following table.

Table 1: The total number of customers of EEU in Hawassa City

Total number
Strata of Service Service Service Total no. of
of samples
customers Center 1 Center 2 Center 3 population/stratum
/stratum
Residential 10,859 11,154 5,696 27,709 322
Industrial 137 130 84 351 4
Business 2,900 1,000 1,430 5,330 62
Staff 265 120 36 421 5
Street light 41 66 25 132 2
Grand Total 12,470 14,202 7,271 33,943 395
Source: Own survey based on EEU service centers of Hawassa city, 2018/2019

33,943
n 1   395
33,943(0.05)2

Hence, the total sample size is 395. Since the number of people in each Service center is
not the same, the number of samples for each stratum was again be calculated by the
following formula:
nN1
n1 
N

Where n= total number of samples

24
N= total number of populations
N1= total number of populations in each stratum

n1 
395(27,709) n1  322
33,943

n2 395(351)
 n2  4
33,943

n3 
395(5330) n3  62
33,943

395(421)
n4 
33,943 n4  5

395(132) n5  2
n5 
33,943

3.7 Data Collection Methods

The study was primarily relied on primary data collected through standard questionnaires.
Questionnaires are applied usually for descriptive, which identify and describe the
variability in different phenomena or explanatory research, which examine and explain
relationships between variables (Saunders, Lewis, & Thornhill, 2009). The questionnaire
was prepared in line with the objectives of the study mentioned above and it was
organized in two sections. The first section was used to obtain the personal information
of the respondents and the second part deals about the existing customer relationship
marketing and customer satisfaction in EEU of Hawassa city.

A five-point Likert scale questionnaire was used to customers „of EEU of Hawassa city
and interview was scheduled to the three service center customers.
25
 3.8 Method of Data Analysis

The data gathered was organized by editing and using tables and figures. Both
Quantitative and qualitative methods of data analysis was employed. The data collected
from primary and secondary sources through interview, questionnaires and
documentation search were analyzed through relevant statistical techniques of SPSS
version 20 software.

First, responses were recorded and coded in Excel spreadsheet and then was exported to
SPSS to analyze the findings. After exporting to SPSS, the raw data concerning the
respondents‟ demographic and research variables were depicted using different tables.
After presenting the profile of respondents, the customer relationship variables were then
be processed using descriptive statics and inferential statics such as correlation, and
analysis of variance (ANOVA). The descriptive statics parts of the variables were
analyzed using means, standard deviation, and percentage whereas hypotheses of the
study were tested using analysis of variance (ANOVA). ANOVA test was also used to
test the significant mean differences between/ among respondents‟ views on CRM
variables (the dimensions) and their customer service satisfaction level. In addition to
these, multiple regression analysis was conducted so as to determine the effects of each
of the five variables of CRM on customer satisfaction.

The regression equation was:

Y = β0 + β1X1 + β2X2 + β3X3 + β4X4 + β5X5+ β6X6+ε

Where:
Y = Customer Satisfaction level X4 = Responsiveness
β0 = Constant
β1, β2, β3, β4, β5 and β6 = Coefficient of
Determination X5 = Communication
X1 = Trust X6 = Commitment
X2 = Competence ε = Error Term
X3 = Empathy

26
 3.9.Data quality management

3.9.1 Pilot Test

Before administering the questionnaires, the research instruments are pre-tested by the
researcher to ascertain the suitability of the tool before carrying out the research. A
pretest meant test for clarity and understanding of questions to test if the questions were
yield as expected. As indicated by Mugenda and Mugenda (2003) a pre-test ought to go
from 1-10%. A pilot study is undertaken on 5% of the sample population. This study
used both to construct validity and content validity. To construct validity, the
questionnaire is divided into several sections to ensure that each section assessed
information for a specific objective. To ensure content validity, the questionnaire was
subjected to go thorough examination by randomly selected service centers. They are
asked to evaluate the statements in the questionnaire for relevance and whether they are
clear and meaningful. On the basis of the evaluation, the instrument is adjusted
appropriately before subjecting it to the final data collection exercise.

3.9.2 Validity and Reliability

Table 2: Reliability Results of the effect of customer relationship marketing on customer

satisfaction EEU in Hawassa City
Constructs No. of Items Cronbach Value
Trust 5 0.907
Empathy 4 0.705
Commitment 6 0.718
Responsiveness 6 0.702
Communication 6 0.789
Customer Satisfaction 6 0.709

Source: The author's own data

24
Before large- scale administration of the instrument, the researcher conducted a pretest to
determine the reliability of the instrument. This was done by administering the
questionnaires to an identified pilot unit. Twenty respondents who would not been
included in the final sample are randomly selected for pre-testing of the questionnaire.
The feedback from the study enabled the researcher to make the necessary adjustments
on the items in the research instrument. The variables of the study is found to be
sufficient because all the constructs and composite reliability based on Cronbach's alpha
were above 0.70 set as the acceptable level minimum by Garson (2005,)and Ghaemi
(2012) as shown in the above table 2

25
 CHAPTER FOUR

PRESENTATION, ANALYSIS AND DISCUSSIONS

4.1 Introduction

This chapter covers the interpretation and presentation of the findings. It contains
response rate, demographic characteristics of the respondents and the effect of customer
relationship marketing on customer satisfaction in the Ethiopian Electric Utility, Hawassa
city.

4.2 Response Rate

The researcher targeted 395 respondents from which 391 of them returned the
questionnaires making a response rate of 98.99%. This response rate considered to be
satisfactory. According to Mugenda & Mugenda (2003), the response rate of 70% and
above is excellent. Based on the assertion, the study had 98.99%response rate is
considered to be excellent.

4.3 General and Demographic Information

Table 3: General and demographic information of the customer of the EEU in Hawassa
City
Variables Category No. (%)
Type of customer Residential Customers 319 (81.6)
Industrial Customers 4 (1.0)
Business Customers 61 (15.6)
Staff Customers 5 (1.3)
Street light Customers 2 (.5)
Gender Male 230 (58.8)
Female 161 (41.2)
Age ≤ 25 43 (11.0)
26-35 142 (36.3)

26
 36-45 113 (28.9)
46-55 53 (13.6)
56 and above 40 (10.2)
Marital Status Married 236 (60.4)
Single 154 (39.4)
Others 1 (.3)
Educational Background Primary 7 (1.8)
Secondary 73 (18.7)
Diploma 134 (34.3)
1st Degree 153 (39.1)
Masters & above 24 (6.1)
Source: The author's own data

Figure 3: Occupational status of the customer of the EEU in Hawassa City

35.0% 30.2%
30.0% 25.8% 26.9%
Percentage %

25.0%
20.0% 14.6%
15.0%
10.0%
5.0% 2.6%
0.0%
Student Private sector Own Government Others
employee Business sector
employee

Source: The author's own data

The majority of study participants, about 118 (30.2%) were owned their own business,
105 (26.9%) were government sector employees and 101(25.8%) were private sector
employees, the rest of 57 (14.6%) and 10 (2.6%) were students and others, respectively.

This section analyzed the demographic information of the individuals. The aim of doing
this was to enhance understanding of the background information of the respondents and
their personal ability to provide relevant data sought for this particular study. The type of

27
customers mainly participated in this study were about 319 (81.6%) and 61 (15.6%) from
residential customers and business customers, respectively. Respondents also asked about
their gender. From the results, majority 230 (58.8%)were male while 161 (41.2%)were
female. Concerning their age, about 142 (36.3%) were 26-35 years old and 113 (28.9%)
were 36-45years old. Regarding to marital status of the respondent‟s, majority 236
(60.4%) of them were married while 154 (39.4%) were single. The majority of study
participants by educational status of the respondents constitute about134 (34.3%) and 153
(39.1%) diploma and first-degree holders respectively. This could also mean that
respondents‟ age and their education are competent enough to participate in the study.

4.4 Descriptive results of the study variables

This section is used to analyze the descriptive results of the study variables such as Trust,
Commitment, Empathy, Responsiveness, and Communication as it is briefly described
below.

4.4.1 Trust

The researcher designed the questionnaires in to five Likert scale questions in order to
investigate the level of agreement of customers to the services offered by the EEU of
Hawassa branch . The respondents were asked to indicate the mean range of this study
level of agreement with the following statements relating to trust in the table 5 below.
The response was fated on a scale of greater than zero and less than five on which: 0.01
up to 1 = strongly disagree, 1.01 up to 2 = disagree, 2.01 up to 3 = agree, 3.01 up to 4 =
moderately agree and 4.01 up to 5 = strongly Agree. Mean and Standard deviation were
calculated and represented as shown in Table 4 below.

28
Table 4: Trust for services provided to the customer by EEU in Hawassa City
Disagree Neutral Agree
Trust items No. (%) No. (%) No. (%) Mean SD
You feel safe with the services provided at
75(19.2) 21(5.4) 295(75.4) 2.36 .802
EEU.
The Corporation fulfills its obligation/promises. 287(73.4) 48(12.3) 56(14.3) 2.24 1.010
Confident that the corporation solves problems 264(67.5) 65(16.6) 62(15.9) 2.30 1.062
Provides consistent and high-quality services 297(76.0) 47(12.0) 47(12.0) 2.09 1.007
EEU always show respect and honest 188(48.1) 80(20.5)123(31.5) 2.76 1.102
Overall Trust 192(49.1) 115(29.4) 84(21.5) 2.35 0.787

Source: The author's own data

Trust towards services provided to the customer by Ethiopian electric utility of Hawassa
city in order to get customer satisfaction constitute about half of the respondents which
means 192(49.1%) were disagreed and the mean (±SD) 2.35(±0.787) and the mean range
of the trust fall around disagree (<3.00) to moderate agree (>3.00) for trust of services
provided to the customer in Hawassa City. However, about 295 (75.4%) and with
mean(±SD) 2.36 (±0.802) were agreed that they feel safe with the services provided at
EEU of Hawassa city. The study results indicate that majority of the respondents, 287
(73.4%), 264 (67.5%) and 297 (76.0%) were disagree to the organization's fulfillment of
its obligation or promises, confident that the Electric Utility service center was able to
take care of them in case they face problems in getting electric utility, and EEU of
Hawassa city provides consistent and high-quality services at different time, respectively.
This study report in line with Doney et al. (2007) reveals that gaining customer
acceptance of service delivery system and process modification to develop customer trust
and relationship is mandatory. This relationship involves both parties in sharing
information and working together effectively to solve problems. Generally, trust is shown
to have a positive influence on key relational outcomes & customer retention as stated by
Morgan & Hunt (2004).

29
In addition to that, about half of the respondents 188 (48.1%) were disagree to the
question "EEU of Hawassa branch always show respect and honest to you". Furthermore,
for respondents need to trust services provided to the customers, the service center need
to improve the fulfillments of its obligation/promises, able to take timely care of
problems in getting electric utility, provide consistent and high-quality services at
different time, and always show respect and honest to them are required from the electric
utility service center unless that may affect customer satisfaction.

4.4.2 Commitment

Table 5: Commitment of EEU in Hawassa City

Disagree Neutral Agree

Commitment items
No. (%) No. (%) No. (%) Mean SD
EEU is always willing to help you 203(51.9) 91(23.3) 97(24.8) 2.69 .979
The company is flexible in serving your needs 234(59.8) 87(22.3) 70(17.9) 2.51 .955
Employees are consistently polite during
service contact 133(34.0)105(26.9)153(39.1) 3.00 1.075

The company gives sincere and detailed

information about all the conditions of the 185(47.3)109(27.9) 97(24.8) 2.70 1.063
service
Overall commitment 93(23.8)124(31.7)174(44.5) 2.77 .730

Source: The authors' own data

Commitment of the Ethiopian electric utility of Hawassa branch to its customers in order
to get customer satisfaction was not satisfactory as more than half of the respondents
which is 203 (51.9) were disagreed and the mean (±SD) 2.77(±0.730) and the mean range
of the trust fall around disagree (<3.00) to moderate agree (>3.00) for commitment of the
Ethiopian electric utility of Hawassa City. This result is in consistent with the study
conducted in commitment and loyalty programs that provide economic incentives

30
positively affect both customer retention and customer share development Peter C.
Verhoef (2003).

However, about 174(44.5%) of respondents for over all commitment and 153 (39.1%) of
them with (±SD), 3.00(±1.075) were agreed for employees are consistently polite during
service contact. The study results indicated that about,203 (51.9%), 234 (59.8%) and 185
(47.3%) of respondents were disagree to the corporation's willingness to help them in the
shortage of getting electric utility, flexible in serving their needs, and giving sincere and
detailed information about all the conditions of the services, respectively. This study
report in line with study conducted by Peter C. Verhoef (2003) and Oly Ndubisi (2007)
agrees on building customer loyalty, in identifying customers‟ need, modifying
products/services to meet customers‟ requirement, and the existence of flexibility in
customer relationship is a key issue to improve trust through delivery of satisfactory
services.

Furthermore, the Ethiopian Electric Utility of Hawassa branch need to improve its service
provision in order to make respondents trust the services provided by them to the
customers, need to improve its commitment by fulfilling its obligation/promises, and
always show respect and honest to them are required from organization unless that may
affect customer satisfaction. Commitment provides an enduring desire to develop and
maintain effective customer relationship with organization.

31
4.4.3 Empathy

Figure 4: Overall empathy of EEU in Hawassa City

Empathy

16.1%
37.6%
Disagree
Neutral
Agree

46.3%

Source: The authors' own data

As shown in the above figure, the overall empathy level of Ethiopian electric utility of
Hawassa branch towards its customer satisfaction constitute 181(46.3%) and 147(37.6%)
which is disagree and neutral level of agreement respectively, while only 63(16.1%)
agree with mean (±SD) 2.30 (±0.725) and the mean range of empathy falls around
disagree (<3.00) to moderate agree (>3.00) for overall empathy of the Ethiopian electric
utility in Hawassa City. This result is in consistent with study conducted in Addis Ababa
Ethiopia Zeritu (2010). In addition to that customers may have special requirements or
needs that providers should understand from their point of view and should attempt to
satisfy the needs accordingly.

32
 Table 6: Empathy of the EEU in Hawassa City

Empathy Disagree Neutral

Agree
No. Mean SD
No. (%) No. (%)
(%)
Employees understand your specific needs 194(49.6)119(30.4)78(19.9) 2.66 .952
The corporation always see things from different
231(59.1)121(30.9)39(10.0) 2.39 .843
point of view
Services are provided on the agreed time 322(82.4) 23(5.9) 46(11.8) 1.75 1.101
The working hours are flexible and comfortable 311(79.5) 40(10.2)40(10.2) 2.00 .938
The corporation is open to understand the
271(69.3) 56(14.3)64(16.4) 2.39 .952
problem
The corporation always assures working in close
298(76.2) 53(13.6)40(10.2) 2.27 .866
co-operation with customers
Overall Empathy 181(46.3)147(37.6)63(16.1) 2.30 .725

Source: The authors' own data

Empathy of the Ethiopian electric utility of Hawassa city to its customers was analyzed
and majority of the respondent disagree in which 231 (59.1%) respondents replied that
the utility service center does not always see things from different point of view, 322
(82.4%) of respondents replied that services are not provided on the agreed time, 311
(79.5%) of them replied that the working hours of the utility service center are not
flexible and comfortable to customers, 271 (69.3%) and 298 (76.2%) of the respondents
were replied that the utility service center does not always assure working in close co-
operation with customers respectively while only few parts agree with the mean (±SD)
2.30(±0.725) and the mean range of the empathy level fall around disagree (<3.00) to
moderate agree (>3.00) for services provided to the customer in Hawassa City. This
result is in consistent with study conducted in Addis Ababa Ethiopia Zeritu (2010) and
South Addis Ababa Region byAfdel & Lemma (2013) and is necessary for organization

33
because customer contact serve as the interaction between customers and service provider

34
organization. However, the Electric Utility service center doesn‟t actually understand the
specific needs and wants of the customers, does not provide services on the agreed time,
doe not assure always working in close co-operation with customers, and is not open to
understand problems of its customers. So that it should improve the service quality by
establishing ways to improve the above mentioned factors.

4.4.4 Responsiveness

Figure 5: Overall responsiveness of EEU in Hawassa City

Responsiveness
80
63.4
Percentage %

60

40
20.7
15.9
20

0
Disagree Neutral Agree

Source: The authors' own data

As figure five shows above, the overall responsiveness of the Ethiopian electric utility of
Hawassa city as reported by customers towards customer satisfaction at Hawassa city was
248 (63.4%) and 81 (20.7%) were disagree and neutral level of agreement for overall
responsiveness respectively while only 62 (15.9%) of respondents agree for overall
responsiveness of the Ethiopian electric utility in Hawassa City. This result is in
consistent with study conducted in Addis Ababa, Ethiopia byBeliyu (2012) about the
preparedness of the organization to provide improved service to satisfy the needs and
desires of customers.

35
Table 7: Responsiveness of EEU in Hawassa City

Disagree Neutral Agree

Responsiveness
No. (%) No. (%) No. (%) Mean (SD)

Employees of the corporation are never 319 (81.6) 35 (9.0) 37 (9.5) 1.68 (0.87)
busy to respond
Employees devote enough time to answer 300 (76.7) 48 (12.3) 43 (11.0) 1.89 (0.85)

Services of the corporation is done without 330 (84.4) 25 (6.4) 36 (9.2) 1.58 (0.71)
delay
Responsive to your complaints 275 (70.3) 79 (20.2) 37 (9.5) 2.10 (0.80)
Quickly solve your problems 312 (79.8) 18 (4.6) 61 (15.6) 1.66 (0.76)

Well trained staff on customer related

technologies 288 (73.7) 61 (15.6) 42 (10.7) 1.84 0.92)

Overall Responsiveness 24 (63.4) 81(20.7) 62 (15.9) 2.09 (0.89)

Source: The authors' own data

The customers were asked to give their opinions on responsiveness dimension of the
service quality offered by the Ethiopian Electric Utility of Hawassa branch. The reply of
overall responsiveness obtained were summarized in Table7 above. More than one third
of respondents 319 (81.6%) replied that employees of the organization are busy to
respond to their requests, 300 (76.7%) of respondents replied employees do not devote
enough time to answer their questions, and 330 (84.4%) of respondents replied services
of the Electric Utility center is done with delay respectively. The mean (±SD)
2.09(±0.886) and the mean range of overall responsiveness is around disagree (<3.00)
for services provided towards customer satisfaction. This result is in consistent with the
study conducted in Addis Ababa, Ethiopia by Beliyu (2012) about the preparedness of
the Electric Utility service center to provide a service that can satisfy the needs and
desires of customers. Furthermore, the responsiveness is influenced by lack of resources,
including skilled employees. An inefficient use of human, material, financial and
information (lack of persistent and reliably established network system) resources, which
are important for the functional organization, according to LR Ireland (1992), leads to

36
considerable delay in responding to customers queries, which by itself is a defect in
service and that may affect customer satisfaction.

4.4.5.Communication

Figure 6: Communication process of the Ethiopian Electric Utility of Hawassa city with
its customers, southern Ethiopia in 2019.

Communication
14.6%

33.8%
Disagree
Neutral
Agree

51.7%

Source: The author's own data

The overall communication level of the Ethiopian electric utility of Hawassa city with its
customers towards customer satisfaction is analyzed as follows: Among respondents, 132
(33.8%) and 202 (51.7%) were disagree and neutral level of agreement for overall
communication, respectively. About,57 (14.6%) agree for overall communication of the
Ethiopian electric utility in Hawassa City with its customers,(figure 6). This result is in
consistent with study conducted in east Addis Ababa Region, Ethiopia by Zeritu (2010)
which reports that the corporation has to create effective communication mechanism with
its customers internally as well as externally through effective feedback mechanisms in
order to improve its performance which in turn minimize the performance gaps in
service delivery about the level and quality of service. Over all, the Electric Utility
service centers of Hawassa city should effectively communicate with its customers about
the necessary issues and other relevant information in a way they deserve to receive.

37
Table 8: Communication process of the customer and EEU in Hawassa City
DisagreeNeutral Agree
Communication No. (%) No. (%) No. (%) Mean SD
Allows you to express your opinions freely 170(43.5)113(28.9)108(27.6) 2.76 1.134
The corporation provides clear instruction about
the service it provides to customers 191(48.8)123(31.5) 77(19.7) 2.60 1.008

Change in the policy, or any other relevant

issue the corporation communicates it clearly
244(62.4) 97(24.8) 50(12.8) 2.39 .987
with you on time
The Electric utility service/branch/ use
technology to reach to you sufficiently. 305(78.0) 34(8.7) 52(13.3) 1.96 1.115

The corporation Communicates with you based

on the way you desire 319(81.6) 45(11.5) 27(6.9) 2.10 .812

The corporation clearly communicates about the

necessary issues to you (about your right,
297(76.0) 64(16.4) 30(7.7) 2.14 .810
responsibility, and other related issues)
Overall communication 132(33.8)202(51.7) 57(14.6) 2.35 .631

Source: The author's own data

The level of communication of EEU of Hawassa city with its customers is analyzed
based on their reply obtained from them and summarized in Table 8 above. More than
one third of respondents, which is about 191 (48.8%) replied the electric utility service
center of Hawassa city does not provide clear instruction about the service it provides to
them, 244 (62.4%) of respondents replied that the center does not communicate about the
change in policy or any other relevant issues respectively. 305 (78.0%) of respondents
replied that electric utility service branch/ center does not use technology to reach to them
sufficiently, 319 (81.6%) of them of them replied the service centers do not
communicate with them based on the way they desire, and 297 (76.0%) replied the
service centers do not clearly communicates about the necessary issues to them (about
your right, responsibility, and other related issues) and the mean (±SD) 2.35(±0.631) and

38
the mean range of communication around disagree (<3.00) for the communication
services provided towards customer satisfaction.

4..4.6. Customer Satisfaction

Figure 7: Overall customer satisfaction of the of EEU in Hawassa City

10.7%
Disagree

7.4% Neutral
81.8% Agree

Source: The author's own data

As figure seven illustrates above, the overall customer satisfaction of the Ethiopian
electric utility of Hawassa city is analyzed as follows: 320 (81.8%) and 42(10.7%)
respondents were replied disagree and neutral level of agreement for overall customer
satisfaction, respectively. About, 29 (7.4%) agree for overall customer satisfaction of the
Ethiopian electric utility in Hawassa City. This is may be due to many reasons for
dissatisfactions like inadequate customer serving employees, system failure especially for
prepaid mater users, shortage of transformer spare parts, lack of transportation, and
seasonal increments on service charge were some reasons of reported from customers.

39
 Table 9: Customer satisfaction of the of EEU in Hawassa City

Customer Satisfaction Disagree Neutral Agree Mean (SD)

No. (%) No. (%) No. (%)
accessibility are
Services/products
improved 334 (85.4) 29 (7.4) 28 (7.2) 1.88 (0.85)
Consistently meets your expectation 325 (83.1) 50 (12.8) 16 (4.1) 1.91 (0.79)
positive word of mouth
Give
testimonies 316 (80.8) 59 (15.1) 16 (4.1) 1.76(0.88)

using other products and

Intend
services 49 (12.5) 43 (11.0) 299 (76.5) 3.93 (1.09)
Very pleased with what the EEU does 329 (84.1) 50 (12.8) 12 (3.1) 1.90 (0.75)
I am satisfied with the
Overall,
performance 332 (84.9) 39 (10.0) 20 (5.1) 1.80 (0.86)
Overall customer satisfaction 320 (81.8) 42 (10.7) 29 (7.4) 2.30 (0.60)

Source: The author's own data

As described in the table above, overall customer satisfaction among Ethiopian electric
utility at Hawassa city were summarized.(table 9). Majority of the respondents, about 334
(85.4%) were replied that services accessibility are not improved to satisfy their needs,
325 (83.1%) of them replied that the service quality does not consistently meets their
expectation, 316 (80.8%) of them are not confident of giving positive word of mouth
testimonies, 329 (84.1%) of them were not very pleased with what the EEU of Hawassa
city does to them, and 332 (84.9%) of respondents overall, not satisfied with the
performance of the service centers and the mean (±SD) 2.30(±0.60) and the mean range
falls around disagree (<3.00) for services provided. This study report was higher when
compared with previous studies conducted in east Addis Ababa Region, Ethiopia by
Zeritu (2010) as it reports overall satisfactions of customers on service delivery process
was 40.5%.

40
 4.5 Correlation

Correlation analysis is a measure of the degree of association between two or more

variables that obtained from the same group of subjects (Ngechu, 2004). It used when a
researcher wants to predict and describe the association between two or more variables in
terms of magnitude and direction. On the correlation of the study variable, the researcher
conducted a Pearson moment correlation.
Table 30: Correlation of the customer satisfaction with its factors in EEU of Hawassa City.

Correlationsb

Communication
Responsiveness
Commitment

Satisfaction
Customer
Empathy
Trust
Trust Pearson Correlation 1
Sig. (2-tailed)
Commitment Pearson Correlation .346** 1
Sig. (2-tailed) .000
Empathy Pearson Correlation .516** .400** 1
Sig. (2-tailed) .000 .000
Responsiveness Pearson Correlation .561** .288** .604** 1
Sig. (2-tailed) .000 .000 .000
Communication Pearson Correlation .443** .469** .462** .495** 1
Sig. (2-tailed) .000 .000 .000 .000
Customer Satisfaction Pearson Correlation .447** .302** .423** .450** .428** 1
Sig. (2-tailed) .000 .000 .000 .000 .000
**. Correlation is significant at the 0.01 level (2-tailed).
b. List wise N=391

Source: The author's own data

The association among the variables used in the study was examined using the correlation
analysis whose results are presented in the table above. Correlation coefficient is a
measure of linear association between two variables. Values of the correlation coefficient
are always between -1 and +1. A correlation coefficient of +1 indicates that two variables

41
are perfectly related in a positive linear sense; a correlation coefficient of -1 indicates that
two variables are perfectly related in a negative linear sense, and a correlation coefficient
of 0 indicates that there is no linear relationship between the two variables.

From table 11 above, Trust is positively correlated to customer satisfaction at 99% CI (r

0.447, P<0.001). This means that as trust increases customer satisfaction also increases.
These findings are in tandem with developing long term relationship with customers in
order to build trust that increases customer satisfaction Doney et al. (2007; Juščius &
Grigaite (2011). The study revealed strong positive correlation at 99% confidence level (r
0.346, P<0.001) between commitment and customer satisfaction. This finding concurs
with Zeritu (2010) and Morgan & Hunt (2004), successful service organization makes a
clear commitment to train the employees who interact with the customers.

Empathy had correlation coefficient of 0.516, the significant value was <0.001 which is
less than 0.05. Therefore, the study found to have strong positive correlation between
empathy and customer satisfaction. This finding agree with findings in Addis Ababa
,Ethiopia by Zeritu (2010) as it has reported that empathy plays a major role in customer
satisfaction. Not only that but also as shown in the above table 10, the correlation
coefficient of 0.561, was also found to be significant at less than 0.001. The study found
that there was strong positive correlation between responsiveness and customer
satisfaction. This result is similar with the study result by Beliyu (2012). The study found
that there was strong positive correlation coefficient between communication at 99%
confidence level (r 0.443, P<0.001) and customer satisfaction. This result is similar with
the study result by Arokiasamy & Abdullah (2013). which stated that Customer
satisfaction has positive association with communication in Malaysia.

42
4.6 Regression Results

4.6.1 Normality Test

For one to fit a linear model to some given data, the dependent variable (customer
satisfaction) has to be normally distributed Ghasemi & Zahedias (2012).

Figure 8: Histogram of customer satisfaction.

Source: The author's own data

As above figures show that the data was normally distributed, majority of the observed
values spread along the curve line shown in figure 8.

43
4.6.2 Kolgomorov-Smirnov test

Table 41: Tests of Normality

Kolmogorov-Smirnova Shapiro-Wilk
Statistic df Sig. Statistic df Sig.
Customer Satisfaction .112 391 .000 .976 391 .000
a. Lilliefors Significance Correction

Source: The author's own data

The Kolgomorov-Smirnov test is a non-parametric test that can be used to test the
underlying distribution of a given random variable. This was used to test whether the
dependent variable followed a normal distribution. The table 11 above shows that the
Shapiro-Wilk statistic 0.976 has a p-value of <0.001 which is less than 0.05 with 95%
confidence, the study concluded that the dependent variable customer satisfaction
followed a normal distributed. Fitting a linear model to the data was thus justified.

4.6.3 Multi-collinearity

Table 52: Collinearity Statistics

Collinearity Statistics
Model Tolerance VIF
(Constant)
Trust .608 1.646
Commitment .727 1.376
Empathy .546 1.832
Responsiveness .517 1.933
Communication .617 1.622
a. Dependent Variable: Customer Satisfaction

Source: The author's own data

Further to the reliability tests a multi-collinearity test was done at the pilot stage to ensure
that the accepted independent variables did not exhibit collinearity amongst themselves.
A situation in which there is a high degree of association between independent variables
44
is said to be a problem of multi-collinearity which results into large standard errors of the
coefficients associated with the affected variables. According to Mugenda & Mugenda
(2003), multi-collinearity can occur in multiple regression models in which some of the
independent variables are significantly correlated among themselves.

In a regression model that best fits the data, independent variables correlate highly with
dependent variables but correlate, at most, minimally with each other. This problem was
solved by ensuring that there was a large enough sample as multi-collinearity is not
known to exist in large samples. Multi-collinearity can also be solved by deleting one of
the highly correlated variables and re-computing the regression equation. From table 12
above, the tolerances are all above 0.2. If a variable has collinearity tolerance below 0.2,
it implies that 80% of its variance is shared with some other independent variables. The
variance inflation factors (VIFs) are also all below 5. The VIF is generally the inverse of
the tolerance. Multi- collinearity is associated with VIF above 5 and tolerance below 0.2.
The accepted variables were therefore determined not to exhibit multi-collinearity. Since
the accepted variables did not exhibit multi collinearity, they were fit to be used for
analysis.

4.6.4 Multiple regression analysis

The study further carried out regression analysis to establish the statistical significance
relationship between the independent variables that are trust, commitment, empathy,
responsiveness and communication on the dependent variable, which was customer
satisfaction. The regression analysis results were presented using regression model
summary tables, Analysis of Variance (ANOVA) table, and beta coefficients tables. The
ordinal categorical data collected for each variable was scored to produce total scores for
each variable that was then used for regression analysis.

45
4.6.5 Multiple regression analysis model summary

Table 63: Multiple regression analysis Model Summaryb

Change Statistics
Std. Error R
R Adjuste of the Square F Sig. F Durbin-
Model Square d R Estimate Chang Change df1 df2 Chang Watson
Square e e
1 .305 .296 .503 .305 33.730 5 385 .000 2.047
a. Predictors: (Constant), Communication, Trust, Commitment, Empathy, Responsiveness
b. Dependent Variable: Customer Satisfaction
Source: The author's own data

The value of R square is 0.305 as in table 13 above. This indicates that the independent
variables (communication, trust, commitment, empathy, responsiveness) can explain
30.5% of the variance in the dependent variable (customer satisfaction). Thus, factors not
studied in the research contribute 69.5% of project implementation. The Durbin Watson
value is 2.0 hence there is no autocorrelation problem on the regression model. This
also implies a good fit for the model.

4.6.6 ANOVAaResult

Table 74: ANOVA on combined variables

Model Sum of Squares df Mean Square Sig.

1 Regression 42.731 5 8.546 33.730 .000b
Residual 97.548 385 .253
Total 140.279 390
a. Dependent Variable: Customer Satisfaction
b. Predictors:(Constant), Communication, Trust, Commitment, Empathy, responsiveness

To test the fitness of the model in estimating the effects of the independent variables on
customer satisfaction of the Ethiopian electric utility found within Hawassa city southern
Ethiopia. The ANOVA was carried out where the statistics df (5) =33.73, P < 0.001,
which is significant at 95% confidence level was realized as it is shown in above table:
implying that the model was significantly fit to be used in predicting the effects of
independent variables on customer satisfaction. This also implies a good fit for the

46
model.

47
4.6.7 Betta Coefficientsa on combined variables

Table 85: Coefficientsa on combined variables

Unstandardized
Standardized 95.0% Confidence
Coefficients
Coefficients Interval for B
Model B Std. Error Beta t Sig. Lower Upper
(Constant) .962 .120 8.003 .000 .726 1.199
Trust .149 .042 .196 3.586 .000 .067 .231
Commitment .046 .041 .056 1.117 .265 -.035 .126
Empathy .096 .048 .117 2.027 .043 .003 .190
Responsiveness .111 .040 .165 2.786 .006 .033 .190
Communication .171 .051 .180 3.325 .001 .070 .272
a. Dependent Variable: Customer Satisfaction

Source: The author's own data

The model revealed that the independent variables namely; trust, commitment, empathy,
responsiveness and communication in the case of customer satisfaction was analyzed,
combined together and finally, trust, empathy, responsiveness and communication had
significant effects on customer satisfaction. This was established from the significant
results noted at 95% level of significance on the customer satisfaction. Trust
(p<0.001),empathy (p 0.043), responsiveness(p 0.006) and communication(p 0.001) had
statistically significant effect on the customer satisfaction. While Commitment (p=0 .265)
had no statistically significant effect on the customer satisfaction.
The study further determined the beta coefficients of independent combined variables
versus customer satisfaction. Table 15 above also presents that the standardized
coefficients of trust is 0.196. The t statics is for this coefficient is 3.59 with a p-value of
<0.001, which is less than 0.05. This p value confirms the significance of the coefficient
of trust at 95% confidence. Therefore, trust significantly influences customer satisfaction.

For testing the research hypothesis, regression results in table 15 were used. In regards to
the first hypothesis, trust has no significance effect on customer satisfaction. Therefore,
null hypothesis rejected that there is significant relationship between trust and customer
48
49
satisfaction, P (< 0.001) < 0.05. These findings are consistent with reports about trust
increases customer satisfactionDoney et al. (2007; Juščius & Grigaite (2011) and
customer acceptance of service delivery system and process modification is important to
develop customer trust and relationship as Doney et al. (2007).

Second hypothesis: states commitment has no significant impact on customer

satisfaction. Therefore, null hypothesis not rejected that there is significant relationship
while commitment (p=0.265) had no statistically significant effect on the customer
satisfaction after regression model analysis. These findings differ (is similarly related
to)from Zeritu (2010) and Morgan & Hunt (2004) which states about commitment had no
statistically significant effect on the customer satisfaction. This difference is because of
the probability of chance and some respondents bias like filling without reading, not to
answering correct or answer arbitrarily without reading each question properly may occur
in few respondents during data collection.

Regarding the third hypothesis; empathy has no significant impact on customer

satisfaction, hence the null hypothesis of the study was rejected at 0.05 significant level,
empathy (p 0.043)less than 0.05 and the study affirmed that the alternative hypothesis
that there is a positive and significant relationship between empathy and customer
satisfaction. This finding agree with in Addis Ababa Ethiopia Zeritu (2010) reported
empathy plays a major role in customer satisfaction. Forth hypothesis: Responsiveness
has no impact on customer satisfaction. Therefore, null hypothesis rejected that there is
significant relationship between customer satisfaction and responsiveness (p 0.006), <
0.05. This result is similar with the study result by Beliyu (2012).

Fifth hypothesis: Communication has no impact on customer satisfaction. Therefore, null

hypothesis rejected that there is significant relationship between customer satisfaction
and communication (p 0.001), < 0.05. These findings agree with the study result by
Arokiasamy & Abdullah (2013)customer satisfaction has positive association with
communication in Malaysia.

50
 Chapter Five
Summary of Findings, Conclusion and Recommendations
5.1 Summary of findings

This section presents the key findings as considered under each objective in the study.
The findings are based on the researcher targeted 395 respondents response with response
rate of 98.99%. The majority of the respondents were residential customers and above the
half were male. Concerning their age mean, the respondents‟ age and their education are
competent enough to participate in the study.

Trust towards services provided to the customers by Ethiopian electric utility of Hawassa
city in order to get customer satisfaction was not satisfactory which is below the
demands/requirements of customers. About half of the responses of the respondents,
192(49.1%) were disagree with the statements forwarded to them in regard to trust. This
indicates that majority of the respondents,287 (73.4%), 264 (67.5%) and 297 (76.0%)
were disagree to the statements forwarded to them in relation to trust such as the utility
service centers ability to fulfill its obligation or promises, its confidence to take care of
them in case they face problems in getting electric utility, and its ability to provide
consistent and high quality services respectively as indicated on the table 4. Therefore,
based on the analysis, trust is positively correlated to customer satisfaction at 99% CI (r
0.447, P<0.001). This means that as trust increases customer satisfaction increases as
well.

However, commitment of the Ethiopian electric utility of Hawassa city to its customers
had no statistically significant effect on the customer satisfaction after regression model
analysis as more than half of the respondents 203 (51.9) were disagree. The study
revealed strong positive correlation at 99% confidence level (r 0.346, P<0.001) between
commitment and customer satisfaction. This indicates that the organization needs to
fulfill its commitment or obligation/promises to the customers and always show respect
and honest to them as required by them from the service center unless that may affect
customer satisfaction.

51
Even though, empathy had no statistically significant effect on the customer satisfaction
after regression model analysis, the overall empathy among Ethiopian electric utility
organization towards customer satisfaction at Hawassa city was181(46.3%) and
147(37.6%) were disagree and neutral level of agreement for empathy, while only
63(16.1%) of respondents agree. Empathy had correlation coefficient of 0.516, the
significant value was <0.001 which is less than 0.05, hence the study found strong
positive correlation between empathy and customer satisfaction. This indicates that the
organization needs to understand customers‟ special requirements or needs and show
respect and honest to them is required from the Electric Utility branch unless that may
affect customer satisfaction.

Regarding to responsiveness of the Ethiopian electric utility to Hawassa city, about 248
(63.4%) and 81 (20.7%) of respondents were disagree and neutral level of agreement,
respectively. Not only that, the study found that there was strong positive correlation
coefficient between responsiveness and customer satisfaction with correlation coefficient
of 0.561 and significant at less than 0.001.This indicates that there was low preparedness
of the utility service center to provide a satisfactory level of service as the needs and
desires of its customers.

Regarding to the communication of the Ethiopian electric utility of Hawassa city to its
customers, about 132 (33.8%) and 202 (51.7%) of respondents response were disagree
and neutral level of agreement, respectively. The study found that there was strong
positive correlation coefficient between communication at 99% confidence level (r 0.443,
P<0.001) and customer satisfaction. It indicates that the utility service center had no
adequate effective communication mechanism internally as well as externally and that
may negatively affect customer satisfaction..

The overall customer satisfaction of the Ethiopian electric utility of Hawassa city to its
customers was low, which is only 29 (7.4%) of the respondents were agree for overall
customer satisfaction. This result is may be due to many reasons of dissatisfactions like
inadequate customer service by utility service center employees, system failure especially

52
for prepaid mater users, lack of technology to reach to the customers sufficiently, lack of
the means of transport to the problem sites, lack of transformers spare parts, lack of
scheduled maintenance, transformer over loading, phase imbalance, extended outage
times under faulty conditions, high system losses and poor safety situations, seasonal
increments on service charge were some of reasons reported by the customers.

5.2 Conclusions

The study concludes that the overall level of agreement on customer satisfaction of the
Ethiopian electric utility of Hawassa city to its customers was low when compared to the
other studies. The customer satisfaction had a strong positive correlation with trust,
commitment, empathy, responsiveness, communication with p-value (< 0.001). Finally,
after multiple regression analysis, customer satisfaction with trust, commitment,
responsiveness, and communication had statistically significant positive relation with p-
value (< 0.05) among Ethiopian electric utility organization and its customers towards
customer satisfaction at Hawassa city. Therefore, majority of the customers reported as
they were not satisfied with the service. This clearly indicates that the Ethiopian Electric
Utility of Hawassa city needs to improve trust, fulfill all its obligations or promises,
improve commitment, effectively communicate through available media, understand
customers‟ needs and wants and act accordingly on time to maximize customer
satisfaction.

5.3 Recommendations of The Study

This study makes the following recommendations based on the analysis and assessment
of the existing challenges towards customer satisfaction in Ethiopian Electric Utility of
Hawassa branch and its customers. The following recommendations were made. These
are:

 Ethiopian Electric Utility of Hawassa branch should improve the level of trust
through provision of trustworthy services to its customers by fulfilling all its
obligations/promises to satisfy its customers and should always show respect and

53
honesty to them in order to meet the required level of performance from the organization
unless these may affect customer satisfaction.
 Furthermore, the Electric utility branch needs to have an on time take care of
problems in getting electric utility, provide consistent and high-quality services at
different time as required from customers unless that may affect customer
satisfaction.
 The Electric Utility service branch should provide timely information through
effective communication mechanism like mass media, and other available means of
communication internally as well as externally in order to create mutual
understanding with its customers in order to increase customer satisfaction.
 The Electric Utility Branch should try to use technology in order to sufficiently and
effectively reach to the customers to provide consistent and high quality services at
different time.

54
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 7. APPENDIXES

HAWASSA UNIVERSITY
SCHOOL OF MANAGEMENT AND ACCOUNTING
MASTER OF BUSINESS ADMINISTRATION (MARKETING
MANAGEMENT)
Questionnaires to be filled by customers of Ethiopian Electric Utility,
Hawassa City.
Appendix I: Information

Dear Respondents;

I am a postgraduate student in the College of Business & Economics, Hawassa

University. As part of my academic requirements, I am currently undertaking a research
study in order to fulfill this requirement for the Master Degree in Business
administration. The title of my study is, “The effect of Customer Relationship
Management on Customer Satisfaction”. You have been chosen as one of my
participants to kindly provide the necessary information in the questionnaire below. The
information you give was treated with confidence and was only be used for the purpose
of the study.
Thank you in advance.

62
 Appendix II: Research Questionnaire

Section A. General and Demographic Information

Please respond to each item by putting a tick  mark in the box & fill in the blank with the
number which best reflects your own perception.

Part I. Demographic Profile

1. Gender: [1] Male [2] Female 

2. Age: [1] ≤ 25 [2] 26-35 [3] 36-45 [4] 46-55 [5] 56 and above 

3. Marital Status: [1] Married [2] Single  [3] Others

4. Educational Background: [1] No formal schooling [2] Primary [3] Secondary  [4]

Diploma 

[5] 1st Degree  [6] Masters & above 

5. Occupation: [1] Student  [2] Private sector employee  [3] Own Business 

[4] Government sector employee [5] Other

Part II: Please indicate the extent of your agreement or disagreement with the
following statements by putting a tick mark (√) in the appropriate box on
the five-pointLikert scale.

Note that: 1=SDA (Strongly Disagree), 2=DA (Disagree), 3=N (Neutral), 4=A (agree),
5=SA (Strongly Agree)

63
 Strongly Disagree (1)

Strongly Agree (5)

Disagree (2)

Neutral (3)

Agree (4)
Trust
1. You feel safe with the services provided at EEU.
2. The Corporation fulfills its obligation/promises.
3. I am confident that the corporation was take care of me in
case I face problems in getting electric utility.
4. EEU provides consistent and high-quality services at
different time.
5. EEU always show respect and honest to you.
Commitment
EEU is always willing to help you
The company is flexible in serving your needs
Employees are consistently polite during service contact
The company gives sincere and detailed information
about all the conditions of the service
Empathy
Employees understand your specific needs
The corporation always see things from different point of
view
Services are provided on the agreed time
The working hours are flexible and comfortable to
customers
The corporation is open to understand the problem of its
customers
The corporation always assures working in close co-
operation with customers

64
Responsiveness
Employees of the corporation are never busy to respond
to your requests.
Employees devote enough time to answer your questions
Services of the corporation is done without delay
The corporation is responsive to your complaints
The corporation is able to quickly solve your problems
Employees are well trained in using customer related
technologies
Communication
The corporation allows you to express your opinions
freely
The corporation provides clear instruction about the
service it provides to customers
When there is a change in the policy, or any other
relevant issue the corporation communicates it clearly
with you on time
The Electric utility service/branch/ use technology to
reach to you sufficiently.
The corporation communicates with you based on the
way you desire
The corporation clearly communicates about the
necessary issues to you (about your right, responsibility,
and other related issues)
Customer Satisfaction
The corporation services/products accessibility are
improved to satisfy your need
The corporation consistently meets your expectation
I am confident of giving positive word of mouth testimonies
about the corporation to others

65
I intend using other products and services of the
corporation
I am very pleased with what the corporation does for me
Overall, I am satisfied with the performance of the
corporation

66
 በኢትዮዽያ ኤሌክትርክ አገልግሎት የሀዋሳ ከተማ ኤሌክትርክ አገልግሎት
ዯንበኞች የሚሞላ መጠይቅ
ተቀጽላ 1: መረጃ

ዉዴ ምላሽ ሰጪዎች፡-

እኔ በሀዋሳ ዩኒቨርስቲ ብዝነስና እኮኖሚክስ ትምህርት ክፍል የሁሇተኛ ዱግሪ ተመራቂ ተማሪ
ነኝ፡፡የዚህ ትምህርት አካል የሆነዉን የመመረቂያ ጽሁፍ/ምርምር/ እያዯረኩ እገኛሇሁ፡፡
የማጠናበት ርዕስ፡-“የዯንበኛ ክብካቤ ግብይት በዯንበጋ እርካታ ላይ ያሇዉ ተጽኖ” የሚል ስሆን
ጥናቱን በእናንተዉ ላይ ሇማዴረግ ስሇመረጥኩኝ አስፈላጊዉን መረጃ በመስጠት እንዴትተባበሩኝ
እየጠየኩኝ የሚትሰጡኝ መረጃ በምስጥር የሚያዝ እና ሇዝህ ጥናት ዓላማ ብቻ የሚዉል መሆኑን
እገልፃሇሁ፡፡.

ተቀጽላ 2: የምርምር ጥያቄዎች ክፍል ሀ.

ጠቅላላ መረጃ

እባኮት ሇእያንዲንደ ጣያቄ  ምልክት በሳጥኑ ዉስጥ በማዴረግ አስተያየተዎን ይግሇጹ

ክፍል1. የግሇሰብ ጠቅላላመረጃ

1. ጾታ: [1] ወንድ  [2] ሴት 

2. ዕድሜ: [1] ≤ 25  [2] 26-35  [3] 36-45  [4] 46-55  [5] 56 እና በላይ 
3. የትዳር ሁኔታ: [1] ያገባ  [2] ያላገባ  [3] ሌላ
4. የትምህርት ደረጃ: [1] መሰረታዊ ትምህርት ደረጃ የለለ  [2] 1 ኛ ደረጃ [3] 2 ኛ ደረጃ 
[4] ዲፕሎማ  [5] ዲግሪ  [6] ማስተርስና ከዛ በላይ 
5. ሙያ/ሥራ: [1] ተማሪ  [2] የግል ድርጅት ሰራተኛ  [3] የግል/የራስ ስራ 
[4] የመንግስት መ/ቤት ሰራተኛ [5] ሌላ

67
 ክፍል 2: እባኮት ከዝህ በታች ለተገለጹ ጥያቄዎች መስማማቶንና አለመስማማቶን (√) ምልክት ከአምስቱ አማራጮች በአንዱ በማድረግ
መልስ ይስጡ

ያስተዉሉ: 1=SDA (በጣም አልስማማም ), 2=DA (አልስማማም), 3=N (መካከለኛ), 4=A (እስማማለሁ, 5=SA (በጣም
እስማማለሁ)

አይመሇከተኝም/ይሇፈኝ(3)
በጣም አልስማማም (1)

በጣም እስማማሇሁ(5)
እስማማለሁ (4)
አልስማማም (2)
Trust(መተማመን)
በዴርጅቱ ኤሌክትርክ አገልግሎ አስጣጥ ላይ
ዯሄንነት ይሰማሃል

ዴርጅቱ በመብራት አቅርቦት መወጣት ያሇበትን

ሃላፊነት በተገቢዉ እየተወጣ ነዉ

ኤሌክትርክ ሲቲ በሚጠቀምበት ሰዓት ችግር

ቢያጋጥመኝ ጥንቃቄ ያዯርግልኛል ብዬ እተማመናሇሁ

የኢትዮጵያ ኤልክትርክ አገልግሎት ሀዋሳ ቅርንጫፍ

ጥራት ያሇዉን አገልግሎት በቀጣይነት ይሰጣል

(ዴርጅቱ አገልግሎት በማገኝበት ጊዜ ሁለ

ያከብረኛል፣ይተማመንብኛልም

Commitment(ዝግጁነት)
ዴርጅቱ ሁሇም ልረዷችሁ ፍቃዯኛ ነዉ
ዴርጅቱ በማንኛዉም ሰዓት ልያገልግላችሁ ዝግጁ
ነዉ

የዴርጅቱ ሰራተኞች አገልግሎት በሚሰጥበት ጊዜ

ትሁት ናቸዉ

ዴርጅቱ ስሇ አገልግሎቱ ዝርዝር መረጃ ሇዯንበኛ

ይሰጣል

Empathy (መረዲት/ማስተዋል)
ዴርጅቱ ሰራተኞች እያንዲንደን ፊላጎታችሁን

68
ያስተዉላል/ይረዲል
ዴርጅቱ ሁሇም ክስተቶቸን በተሇያየ አቅጣጫ
ይረዲል/ያያል

አገልግሎት ስፈሇግ በተባሇዉ ልክ ይሰጣል

ሇዯንበኞች አገልግሎት የሚሰጥበት ሰዓት ምቹና
ተስማሚ ነዉ

ዴርጅቱ የዯንበኞችን ችግር/ቀረታ ሇማስተናገዴ

ክፍት ነዉ

ዴርጅቱ ከዯንበኞች ጋር በቅርበት ይሰራል

አይመሇከተኝም/ይሇፈኝ(3)
በጣም አልስማማም (1)

በጣም እስማማሇሁ(5)
እስማማለሁ (4)
አልስማማም (2)
Responsiveness (ቶሎ ምላሽ መስጠት)
ከዯንበኞች ሇሚቀርቡ ጥያቄዎች ምላሽ ሇመስጠት
የአገልግሎት ማዕከለ ቢዚ ሆኖ አያዉቁም

ከዯንበኛ የሚቀርበዉን ጥያቄ ሇመመሇስ ሰራተኞቹ

በቂ ጊዜ ይሰጣለ

በዴርጅቱ አገልግሎት ማዕከል የሚሰጡ አገልግሎቶች

ያሇመዘገየት ይፈፀማለ

የአገልግሎት ማዕከለ ሇቅረታዎቹ ቶሎ ምላሽ ይሰጣለ

የአገልግሎት ማዕከለ ችግር እንዲጋጠመን
ስንነግራቸዉ ወዱያዉ ይፈታለ

የዴርጅቱ ሰራተኞች በዯንበኛ አገልግሎት መስጫ

ቴክኖሎጂ የተካኑ ናቸዉ

Communication (መነጋገር/መግባባት)
ዴርጅቱ ዯንበኞቹ በአገልግሎት አሰጣጥ ዙሪያ
አስተያየት እንዴሰጡ ይጋብዛል/ይፈቅዲል

ዴርጅቱ ስሇሚሰጣቸዉ አገልግሎቶች ግልጽ መመሪያ

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ሇዯንበኛ ይሰጣል
በዴርጅቱ አሰራርና ዯንብ /መመሪያ ላይ ሇዉጥ ስኖር
ሇዯንበኛ ያሳዉቃል

ዴርጅቱ ከዯንበኛ ጋር በቂ ሁኔታ ሇመነጋገር

የሚያስችል ቴኮኖሎጂ አሇዉ

ዴርጅቱ አንተ በሚትፈልገዉ ልክ እንዯ ዯንበኛ ካንተ

ጋር ይነጋገራል/ይገነኛል

ስሇመብትና ግዳታ እንዴሁም በተሇያዩ አስፈላጊ

ጉዲዮች ዙሪያ መረጃ ይሰጣል

አይመሇከተኝም/ይሇፈኝ(3)
በጣም አልስማማም (1)

በጣም እስማማሇሁ(5)
እስማማለሁ (4)
አልስማማም (2)
Customer Satisfaction (የዯንበኛ እርካታ)
የዴርጅቱ አገልግሎት አሰጣጥ ፍላጎትን በሚያረካ
መልኩ ተሸሽሏል ብሇህ ታስባሇህ

ዴርጅቱ የሚትጠብቀዉን አገልግሎት

በሚትጠብቀዉ ልክ በቋሚነት ይሰጣል

እኔ ሇሌሎች የሀዋሳ አገልልሎት ማዕከል

መልካምነት አወራሇሁ

ዴርጅቱ ከሚሰጣዉ አገልግሎት ሌላ

ምርት/አገልግሎት ቢኖራቸዉ ይመረጣል ብየ
አስባሇሁ

ዴርጅቱ በሚያዯርገዉ ሁለ በጣም ተዯስችያሇሁ

በዴምሩ እኔ የሀዋሳ ኤሌክትርክ አገልግሎት
በሚሰጣቸዉ አገልግሎቶች ረክችያሇሁ

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