TABLE OF CONTENTS

TITLE ……………………………………………………………………………….. i

DECLARATION ……………………………………………………………….. ii

APPROVAL …………………………………………………………………….. iii

DEDICATION …………………………………………………………………. iv

ACKNOWLEDGEMENT ………………………………………………….. v

TABLE OF CONTENTS …………………………………………………. vii

LIST OF TABLES…………………………………………………………… xii

LIST OF FIGURES ………………………………………………………… xiii

ABSTRACT…………………………………………………………………… xiv

          CHAPTER ONE

          INTRODUCTION

1.1    Background of the Study …………………………………………  1

1.2Statement of the Problem ……………………………………………  5

1.3    Objective of the Study …………………………………………….  5

1.4    Research Questions ……………………………………………….  6

1.5    Research Hypotheses…………………………………………….. 6

1.6    Significance of the Study………………………………………… 7

1.7Limitations of the Study………………………………………………. 8

1.8Scope of the Study …………………………………………………….. 9

1.9Contextual Definition of Terms……………………………………. 9

          CHAPTER TWO

          LITERATURE REVIEW

2.1    The Components of CRM ……………………………………..  14

2.1.1           Key Customer Focus ……………………………………  15

2.1.2           CRM Organization ………………………………………..  17

2.1.3           Knowledge Management ……………………………..  19

2.1.4           Technology Based CRM ………………………………  20

2.2    The Impact of CRM on Organizational

Performance …………………………………………………………  22

2.2.1Impact of Key Customer Focus on

Organizational Performance …………………………  24

2.2.2Impact of CRM Organization on

  Organizational Performance…………………………   27

2.2.3Impact of Knowledge Management on Organizational

Performance ………………………………………………..  30

2.2.4Impact of Technology Based

CRM on Organizational Performance ……………  33

2.3Measuring CRM ……………………………………………………….  36

2.3.1 CRM Measurement Frameworks and

Metrics …………………………………………………………  38

2.3.2Traditional Financial Analysis of CRM  ……………………  39

2.4The Real Options ……………………………………………………..  41

2.5CLV and Customer Equity Measurements  ………………..  44

2.6The Balanced Scorecard ………………………………………….  49

2.7CRM Measurement Scale Development  …………………..  53

2.8Operational and Strategies Benefits of CRM ……………..  55

2.8.1Top Management ………………………………………………….  58

          CHAPTER THREE

          RESEARCH METHODOLOGY

3.1    Research Approach  …………………………………………….  61

3.2Sample Size ……………………………………………………………..  63

3.3Questionnaire Design and Administration  …………………  63

3.4Sources of Data ……………………………………………………….  64

3.4.1 Primary and Secondary Data………………………… 64

3.5Data Analytical Technique ………………………………………..  65

          CHAPTER FOUR

          DATA PRESENTATION AND ANALYSIS

4.1    Data Presentation  ………………………………………………..  67

4.2Data Analysis and Interpretation ……………………………….  73

4.3Test of Hypotheses  …………………………………………………  76

          CHAPTER FIVE

SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS

5.1    Summary of Findings ……………………………………………  78

5.2    Conclusion ……………………………………………………………  81

5.3    Recommendations  ………………………………………………  82

5.4Suggestions for Further Research  ……………………………  83

          BIBLIOGRAPHY …………………………………………………..  85

          APPENDICES  ……………………………………………………..  95

                                     LIST OF TABLES

Table 1:Sample Characteristics ……………………………………..  67

Table 2:Distribution Statistics and Construct reliability…….. 69

Table 3:Discriminate Validity  …………………………………………  71

                                    LIST OF FIGURES

Figure 1:Structural Model for CRM …………………………………  73

                                          ABSTRACT

Customer relationship management (CRM) is a comprehensive business and marketing strategy that integrates technology, process and business activities around the customer. CRM is assumed to lead to bottom line benefits for the organization. Advances in information and communication technologies have provided an effective platform to deliver electronic CRM functions. Despite widespread agreement that CRM can have a direct and indirect satisfaction, loyalty, sales and profit, the significance of CRM and its features in influencing customer satisfaction has not been well researched in construction firms. The thesis examines the critical success factor of CRM implementation by using a questionnaire survey to obtain data from 68 building material suppliers. Using a structural model and the evaluation technique of partial least squares the analysis revealed that CRM technological initiatives are successful when adequate top management support and accurate knowledge management capabilities, supported by a suitable information technology structure, measured by technological readiness are in place. Construction organizations who are considering the implementation of CRM technological initiatives. The need to justify the impact of CRM on organizational performance in the boardroom has never been more important. Shareholders expect value for their investments; organizations have invested large sums of money in people, processes and technology in order to imbibe the CRM culture. The promises of CRM are enormous. Yet, various organizations cry out for help over lost investments and damaged relationships. Is CRM promising too much or perhaps are the executives expecting more than they can get? Literature suggests that in order to justify the investments of CRM, there is the need to develop a universally accepted holistic framework for the measurement of CRM activities is the lack of a universally acceptable definition of CRM. The concept of CRM is multi faceted involving investments in people, processes and technology to various degrees.

                                      CHAPTER ONE

                                      INTRODUCTION

1.1    BACKGROUND OF THE STUDY

          Traditionally, `many organizations were structured around their products and service’. Emphasis was on the delivery of a good mist of the 4Ps – product, price, place and promotion. The focus was on exchange, once this was achieved, organizations were sure to remain in business. Needless to say, this was the era of transaction marketing.

          In the late 1990s however, most organizations began to realize that the 4Ps were no longer sufficient to remain in business. Products were easily copied to desired standards, price and easily matched, Product accessibility was no longer an issue and mass Promotions were no longer as effective. In many cases, customers and consumers had become more sophisticated and less responsive to the traditional marketing pressures – particularly `advertising’. This as a result of the availability of more choice, partly as a result of globalization of markets and new sources of competition. Also, many markets had reached the matured stage of their lifecycle

(Christopher, Payne and Ballantyne, 2002). The response to these changes in the business environment was that organizations began to transform themselves as well as adopt a more customer focused orientation. This lead to the emergence of relationship marketing.

          To some schools, relationship marketing is used synonymous with customer relationship marketing. This view defines relationship marketing as a management approach that enables organizations identify, attract and increase retention of profitable customers by managing relationships with them (Reinartz and Kumar, 2003). To other schools, customer relationship management involves the use of information technology (IT) in the implementation of relationship marketing strategies (Wilson et al, 2005). Customer Relationship Management is often times referred to by its acronym – `CRM’ and will henceforth be referred to as such in the present study.

          The CRM philosophy focuses on a pan-company orientation in which the specific capabilities of an organization are focused around creating and delivering value to targeted market segments in the expectation that this would developed into a relationship such that the organization is able to determine, fulfil and even predict the needs of the customer while attaining customer loyalty so as to increase profits over time (Rigby et al 2002). Thus, successful CRM activities are expected to enable organizations gather customer data swiftly, retain existing customers, identify the most valuable customer’s overtime, increase customer loyalty, acquire new customers and grow relationships with existing customers thereby placing the organization in a better financial position for the future.

          To obtain the benefits of investing in such IT applications there is a need for construction organizations to better understand and be aware of the bottom-line financial returns of business automation initiatives (Love and Irani, 2004). Moreover, having knowledge about customers and what their requirements are is deemed to be a critical for long term business success (Nargundkar and Srivastava, 2002). Yet only a small percentage of businesses have basic information about their customer (McKeen and Smith, 2003; Kale, 2004). In recognizing the need to be more customers centric many businesses have adopted CRM applications to

gather, organize, understand, anticipate, and respond to the constant evolution of customers’ requirements and demands (Reinatz and Chugh, 2002). Effective CRM is assumed to lead to bottom line benefits fro the organization. Advances in IT have provided an effective platform to deliver CRM functions. Despite widespread agreement that CRM can have a direct and indirect impact on customer.

          Many businesses operating the construction industry have been trying to respond to the demands being imposed on them by utilizing IT applications such as CRM and ERP, but immediate benefits and improvements in business performance have not been forthcoming: the `Red Queen’ syndrome. With this in mind, the research presented in this paper aims to provide material suppliers operating the construction industry with underlying knowledge to overcome the `Red Queen’ syndrome often associated with enterprise applications such as CRM and ameliorate their chances of obtaining improvements in business performance.

1.2    STATEMENT OF PROBLEM