SUCCESS OF E-CRM PROGRAM IN BUDGET AIRLINES INDUSTRY

BY
NURAL

TABLE OF CONTENTS

1 CHAPTER 1: INTRODUCTION
1.1
1.2
1.3
1.4

1.5
1.6
1.7

Background of the study

Research Problem
Research Objectives
Significance of the study
1.4.1
To the researcher
1.4.2
To Malaysian budget airlines
1.4.3
To the respondents
1.4.4
To the budget airlines industry
1.4.5
To the aviation industry
Rationale of the study
Research questions
The scope of the study

2 CHAPTER TWO: LITRATURE REVIEW

2.1

2.2

Definition of terms
2.1.1
eCRM
2.1.2
Critical success factors of eCRM
Organization of Study

3 CHAPTER THREE: METHODOLOGY

3.1

3.2
3.3
3.4
3.5
3.6

3.7
3.8
3.9
3.10
3.11

Introduction
3.1.1
Variables
3.1.2
Independent variable
3.1.3
Dependent variable
Description of Instrument
Conceptual Framework
Research Approach
Research strategy
Data Collection Method
3.6.1
Primary Data
3.6.2
Secondary Data
Sampling strategy
Research Ethics
Reliability and Validity of Research
Reliability test
Validity
3.11.1 Face validity
3.11.2 Content Validity
1

3
7
8
9
9
10
10
10
10
11
12
12
14
14
14
14
18
20
20
20
20
20
21
23
24
25
27
27
34
35
36
37
37
38
38
39

3.12
3.13

Time frame
Conclusion of the chapter

39
39

4 CHAPTER FOUR: RESULT OF STUDY

41

4.1
4.2

Introduction
41
Descriptive analyse
42
4.2.1
Characteristics of the Respondents
42
4.2.2
Frequency of respondents toward Technological Factors in
Success of E-CRM program
47
4.2.3
Frequency of respondents toward Organizational Factors in
Success of e-CRM program
49
4.2.4
Frequency of respondents toward Organizational Factors in
Success of e-CRM program
51
4.2.5
Descriptive statistics report (characteristic part)
52
4.3
Inferential statistic
53
4.3.1
Testing hypothesis
53
5 CHAPTER FIVE : DISCUSSION
5.1
5.2
5.3
5.4
5.5

56

Introduction
Discussion
Implication
Limitations
Future Research Needs

56
56
56
56
56

6 REFRENCES

57

1
1.1

CHAPTER 1: INTRODUCTION

Background of the study

Customer relationship management (CRM) is defined as the process of developing,

attracting and maintaining customer relationship over time (Massey et al., 2001).
Traditionally, CRM is a set of systems and processes used in physical business locations
such as physical retail space and offices. It was a standard business process before
internet was introduced for communication purpose. The traditional CRM focuses on the
business-customer relationship (Chalmeta, 2006). The phrase CRM is used to refer to
the business strategy that is employed to interact with anyone it conducts business with.
This includes the sales prospects and customers. It is a system that defines the way a
business handles its marketing, sales and support projects to fulfill the goal of
strengthening existing customer relationships as well as forming new ones.

With the increasing competitive pressure and the dynamic nature of the global business
environment, many organizations are shifting from product-focused strategy to
consumer-focused strategy. In the late 1990s, internet had changed the physical retail
space or the brick-and-mortar business model (Smith, 2006). The onset of the Webbased communications had changed the way a business was conducted as well as the
way in which a business communicates with its customers. With the availability of the
internet, the customers are becoming more aware and knowledgeable of the various
opportunities available to them. The internet has enabled the customers to have an easy
access to new products as well as make comparison between the products. Customer
3

retention and loyalty have posed as challenges to the majority of the organizations as
there is an increase in competition (Uwagwuna, 2011). The customers can easily switch
to another organization by a click of the mouse.

In order to survive in this competitive world, many organizations have invested in

technologies which enable customer-focused relationship marketing strategy for
instance, new hardware, systems and web applications. It is necessary to develop new
processes to manage marketing, sales, support and customer relations using the Web for
those business processes (Schullin et al., 2004). The term CRM has been changed to
Electronic Customer Relationship Management (eCRM) which reflects the web
experience and the use of wireless web for communication (Farooqi & Dhusia, 2011).

eCRM can help to smoothen customer-related business processes via internet as well as
reduce costs of interfacing with customers drastically while achieving the primary goal
of CRM which is enhance customers experience (Uwagwuna, 2011). Many
organizations have employed eCRM features into their web portals to increase customer
loyalty, retention and satisfaction level (Feinberg & Kadam, 2002). The features include
site customization, information for first time users, mailing list, e-mailing capability,
frequently asked questions (FAQ), chat rooms, ability to complain and bulletin board.
With the implementation of eCRM, both the investor and the customer can gain various
benefits from it. Among the benefits of eCRM implementation to the investors are it
helps the investors to track the customer behaviour, match the customer behaviour with

their offers, enable quick segmentation of customer database which makes marketing
cheaper, enhance relationship with the customers, increase customer satisfaction level as

Table 1.1 The difference between CRM and

eCRM (Farooqi & Dhusia, 2011)

well as retain the customers (Jackson, 2009). On the other hand, it is convenient for the
customers and they are able to receive quality services, short transaction and quick
processing, time (Market Pain, 2013).

The differences between CRM and eCRM are shown in Table 1.1.

Among the organizations that have adopted eCRM in Malaysia are the Malaysian
Budget Airlines. As at April 2013, there are 4 budget airlines in Malaysia namely
AirAsia Sdn. Bhd., MASwings Sdn. Bhd., FlyFirefly Sdn. Bhd. and Malindo Air.
AirAsia is the first budget airline in Malaysia. It was founded in 1993. This is followed
by Firefly and MASwings which were founded in 2007 and the new entrant Malindo Air
founded in 2012. eCRM is an important feature for these three budget airlines as they
depend heavily on the internet for their sales. eCRM plays an important role for these
three airlines to attract new customers and retain customers from all around the world.
There is an increasing competition in the Budget Airlines Industry. Thus, it is necessary
to strengthen their relationships with the customers and the best way to achieve this goal
is through the internet.

1.2

Research Problem

The emergence of new budget airlines in Asia, Scoot Pte. Ltd which commenced its
operation in June 2012 has posed a challenge to Malaysian budget airlines. In addition,
Malaysian budget airlines are facing challenges from other existing budget airlines like
Jetstar Asia Airways, Tiger Airways, Lion Air and Mandala Airlines as well as other
7

full-service international airlines like Singapore Airlines, Thai Airways and Philippines
Airlines. Malaysian budget airlines also face stiff competition from MAS, Malaysias
national carrier.

Both the budget airlines and full-service airlines have to compete with each other and
among themselves. The customers have a variety of choices since there are many
airlines available now. In addition, the customers are able to compare the prices of the
tickets through the internet. All the information that the customers need regarding the
airlines can be easily found on the web. Two out of four of the Malaysian budget airlines
have some similar destinations as the newly established Scoot Ptd Ltd. For instance,
both AirAsia and Scoot Ptd. Ltd. fly to Bangkok, Gold Coast, Sydney, Seoul, Taipei and
Tokyo (Appendix 1 and 2). On the other hand, Malindo Air plans to fly to Bangkok in
the near future (Appendix 3). In order to survive in this competitive aviation industry,
Malaysian budget airlines have to find ways to attract new customers as well as retain
their old customers. eCRM is the best option to achieve these goals.

Therefore, in this study, the author wishes to find out the factors that influence the
eCRM of Malaysian budget airlines and further strengthens eCRM of Malaysian budget
airlines with the findings of the research.

1.3

Research Objectives

RO1: To analyse the factors that influence the success of eCRM program in budget
airlines industry
8

RO2: To evaluate the effectiveness of the eCRM program implemented by budget

airlines industry.

RO3:To analyse how the eCRM of budget airlines industry can be further improved to
enhance customer service and satisfaction.

RO4: To develop a conceptual framework integrating factors that influences the success
of eCRM program and its effect on customer service and satisfaction in the budget
airlines industry.

1.4

Significance of the study

The significances of the study are as follows

1.4.1

To the researcher

This study can help the researcher to gain a better understanding regarding the factors
that influences the success of eCRM program in Malaysian budget airlines. In addition,
the researcher will be able to find out what is the effective eCRM to attract new
customers as well as retain the old customers. This knowledge will be very useful for the
researcher to manage his own organization in future.

1.4.2

To Malaysian budget airlines

This study helps Malaysian budget airlines to evaluate the effectiveness of its current
eCRM in attracting new customers and in retaining its old customers. Upon completion
of this study, Malaysian budget airlines can further improve their eCRM to enhance
customer satisfaction level as well as to promote customer loyalty by overcoming its
weaknesses and strengthening its strengths.

1.4.3

To the respondents

Through this study, the respondents are able to gain a better insight of their organization.
In addition, this study can help to create awareness among the respondents regarding the
roles that they can play to make eCRM a success.

1.4.4

To the budget airlines industry

This study can serve as a reference to other budget airlines on how they can improve
their eCRM to obtain competitive advantage over their competitors.

1.4.5

To the aviation industry

This research can be used as a guideline for other airlines in the aviation industry to
improve their eCRM.

10

1.5

Rationale of the study

Electronic Customer Relationship Management (eCRM) is a business and marketing

strategy that is gaining popularity. Although studies have been done on the factors that
affect the success of eCRM, a detail study on eCRM of Malaysian budget airlines has
not been carried out. Besides, the competition in the low-cost aviation industry in Asia
has increased due to the new entrant, Scoot Ptd. Ltd. which had just started its operation
in June 2012. Besides facing increasing competition from Scoot Ptd. Ltd., Malaysian
budget airlines is also facing competition from Malaysia Airlines. In addition, AirAsia
also faces competition from other foreign airlines and their partnerships.

As such, it is essential to carry out this research to analyze the factors that contributes to
the success of eCRM program in Malaysian budget airlines. By analyzing these factors,
the researcher hopes to give suggestions to improve on the eCRM of Malaysian budget
airlines. Strengthening the eCRM of Malaysian budget airlines can help to enhance the
customer services and satisfaction. eCRM needs to be managed well in order to achieve
the goals of the organization.

By conducting this research, a conceptual framework integrating the factors that

influence the success of eCRM program and its effects of customer satisfaction can also
be done. This will give an insight to how eCRM can be implemented not only in the
budget airline industry in Malaysia but also to all the other organizations that uses online

11

marketing. Besides, the knowledge obtained from this research can be used by the
researcher to improve the management of his organization in the future.

1.6

Research questions

This paper seeks the answers for the following questions.

RQ1: What is the connection between the technological factors and the success of
eCRM program in the budget airlines industry?

RQ2: What is the connection between the organizational factors and the success of
eCRM program in the budget airlines industry?

1.7

The scope of the study

This study is conducted to examine the factors that influence the success of eCRM
program in Malaysian budget airlines. In particular, this study will analyze:-

a. The connection between the technological factor and the success of eCRM program
in the budget airlines industry.
b. The connection between the organizational factor and the success of eCRM
program in the budget airlines industry

12

However, this research has several limitations. First of all, this research only covers one
budget airline, which is AirAsia. There are 118 low-cost airlines in the world with 4
located in Malaysia (Discount Air Fares, 2013).

Another limitation of this research is the questionnaire will be distributed to 100 staffs of
AirAsia at Senai International Airport. There are 8119 staffs in AirAsia Sdn. Bhd.
(EMIS, 2012). The number of respondents in this study is limited.

Next, this research only covers two factors that influence the success of eCRM in budget
airlines industry. The two factors that will be studied are technological factor and
organizational factor. There are many critical success factors of eCRM as proposed by
various authors. These factors are shown in Table 2.

13

CHAPTER TWO: LITRATURE REVIEW

2.1

Definition of terms

2.1.1

eCRM

eCRM refers to electronic customer relationship management or customer relationship

management that is Web-based (Dyche, 2004). eCRM provides organizations with a
means to conduct relevant, interactive and personalized communications with the
customers. It uses a complete view of the customers to make decisions about channel
delivery, messaging and offers. In addition, it respects individuals preferences about
how and whether they wish to communicate with you. eCRM focuses on understanding
how the economics of customer relationships influence the business. Evolving to eCRM
from CRM requires organizational and process changes, a non-trivial technical
architecture as well as a suite of integrated applications to support both the organization
applications that automate the process and the eCRM process (Parvatiyar & Shainesh,
2008).

2.1.2

Critical success factors of eCRM

2.1.2.1 The critical success factors of eCRM that are proposed by several
researchers are as follows:-

14

15

Table 2.1: Critical success factors of eCRM

2.1.2.2

The factors that are analyzed in this research are as follows:-

a. Technological factor

I.

Relative advantage which refers to the degree to which the technology of eCRM
develops customer information that leads to improved customer service. It also
refers to how CRM technology will bring benefits to the organization when
competing with other organizations (Kittipong,2008).

II.

Compatibility refers to how well eCRM matches with the organizations

previous experiences and current requirement (Kittipong,2008).

III.

Complexity refers to the degree to which the innovation is recognised as

comparatively hard to use and understand, and therefore considered as a barrier
for adoption (Kittipong,2008).

IV.

Triability refers to the degree to which an innovation is tested according to some

limits (Kittipong,2008).

V.

Observability refers to the degree to which the outcome of an innovation can be

seen by others (Kittipong,2008).

b. Organizational factor
16

I.

Firm size refers to magnitude of an organization which includes the economies

scale and the amount of resources available to run the operations (Graubner,
2006).

II.

Organization structure refers to a structure that designate formal relationships

which includes the number of levels in the hierarchy, the span control of
managers and supervisors (Daft, 2009). It also includes grouping of individuals
into departments and the design of the systems (Daft, 2009).

III.

Organization culture is defined as a glue that holds an organization together via a

shared pattern (Inceoglu, 2002).

IV.

Organizational strategy refers to a plan of an organization to interact with the

competitive environment in order to achieve organizational goals (Daft, 2009).

V.

Top management support refers to the degree to which the top management
understands an activity in the organization and is involved in the activity (Lee,
2012).

VI.

Human resource management refers to the practices and policies involved in

carrying out the human resource aspects of a management position including
screening, recruiting, training, appraising and rewarding (Randhawa, 2007).

17

VII.

Knowledge management capabilities refers to the ability to create, integrate,

transfer and leverage related knowledge across its business units (Remenyi,
2008).

2.2

Organization of Study

This study conducted on the factors that influence the success of eCRM program in
budget airlines industry is divided into 5 chapters stated below along with other basic
components of dissertation such as abstract, acknowledgement, table of content, list of
figures and tables, reference list, and appendices:

Chapter 1
This chapter introduces how CRM evolves into eCRM and the differences between
CRM and eCRM. Chapter 1 also discusses the number of budget airlines in Malaysia
and a short introduction on these budget airlines. In addition, this chapter also includes
the research problem, research objectives, significances of this research, rationale of the
study, research questions, scope of the study and definition of terms.
Chapter 2
Chapter 2 will focus upon the views of various scholars concerning the success criteria
of eCRM. In addition, this chapter will discuss various research frameworks by different
authors that was used to explore critical success factors of eCRM. Lastly, this chapter

18

includes evaluation of key studies, gaps in the literature and the usefulness of the past
researches.
Chapter 3
The third chapter is the methodology part of the paper that encompass the research
purpose, research philosophy, research approach, research approach, project plan and
timing, research methods, data analysis, data quality (reliability and validity) and ethical
consideration applied during collection of data.
Chapter 4
Fourth chapter will conclude the results drawn from data analysis and discuss on these
results.
Chapter 5
Chapter 5 reflects the research objectives. This chapter also includes recommendations
for the budget airlines which can help to further improve their eCRM, limitations of the
research and suggestions for further research.

19

3
3.1

CHAPTER THREE: METHODOLOGY

Introduction

This chapter of research study provides detailed illustrations concerning research

methodology used to achieve research objectives. This chapter covers the discussion of
conceptual framework, research approach, research strategy, research design, data
collection methods, sampling techniques, data analysis methods, reliability and validity
of research and research ethics. At the end of the chapter, the overall summary of this
methodology chapter is provided.

3.1.1

Variables

Two independent and one dependent variables have investigated in this research, which
has explained as following.

3.1.2

Independent variable

As literature review suggested, in this research two Independent variables:

Technological Factors and Organizational Factors in Success of eCRM program

3.1.3

Dependent variable

Success of eCRM program

20

3.2 Description of Instrument

Three set of questionnaire have developed to measure variables of the study which is
shows un table below:

21

To measure Independent Variable Technological Factors in Success of

eCRM program
1 eCRM can be successfully implemented because it employs the latest
technology.
2 eCRM which has the relative advantage over its competitors in terms
of delivering accurate information to the customers is able to ensure
the success of eCRM implementation.
3 The compatibility of the eCRM to the organizations previous
experience and current requirements plays an important role in
ensuring the success of eCRM implementation.
4 An innovation that meets the needs of the customers play an important
role in determining the success of eCRM implementation.
5 eCRM is adopted well if it is compatible with individuals job
responsibility.
6 eCRM is adopted well if it is compatible with individuals value
system.
7 eCRM can be successfully adopted if it is easy to use and understand.
8 The availability of trial in eCRM enables the organization to
familiarise each of the optional and this ensures the success of eCRM
implementation.
9 Triability helps to boost confidence among the adopters and this plays
an important role in ensuring the success of eCRM implementation.
10 The positive outcomes of eCRM employment in other organizations
can help to reduce uncertainties among new adopters.
To measure Independent Variable Organizational Factors in Success of
eCRM program
11 The organization easily adopts eCRM due to its firm size.
12 Organization structure and culture influence the success of eCRM
implementation.
13 Customer-centric strategy can enhance customer satisfaction and
influences the success of eCRM.
14 Customer touch points can help the organization to understand the
customers lifestyle and thus enhances eCRM.
15 The support from the top management encourages the adoption of
eCRM among the customers.
22
16 The alignment of visions and goals of the organization can ensure the
success of eCRM.

Strongly
agree

Agree

Neither
agree

Disagree

Strongly
disagree
1

17

The success of eCRM depends on the employees who are equiped

with IT knowledge and skills.
18 Training can enhance the skills of the employees and ensure the
success of eCRM.
19 The ability to use knowledge management with technologies can
encourage the decision about strategies,product offering and how to
interact with the customers.
20 Financial resources influences the success of eCRM implementation.
To measure Dependent Variable the success of eCRM program
Do you think the airline which you are working with, eCRM is
successfully applied because
21 The organization employs the latest technology
22 of delivering accurate information to the customers
23 of innovation that meets the needs of the customers
24 it is easy to use and understand.
25 other organizations can help to reduce uncertainties among new
adopters.
26 of using Customer-centric strategy
27 the organization try to understand the customers lifestyle.
28 it is supported by the top management
29 of The alignment of visions and goals of the organization
30 the employees equipped with IT knowledge and skills.
31 of Financial resources
32 The organization employs the latest technology?

3.3

Conceptual Framework

The conceptual framework for the research study is illustrated below:

23

Technological Factors
1.
2.
3.
4.
5.

Perceived relative advantage

Compatibility
Complexity
Triability
Observability

1.
2.
3.
4.
5.
6.
7.

Success of eCRM program

in Malaysian Budget
Airlines Industry

Organizational Factors
Firm size
Organizational structure and culture
Organizational strategy
Top management support
IT knowledge
Knowledge management capabilities
Financial resources

Figure 3.1 Conceptual framework

3.4

Research Approach

The research approach is the technique which is utilized to respond to the research
questions while the appropriate selection of research approach depends on the main
purpose of the research (Goddard, Melville and Goddard 2004). It is observed that
mainly three types of research approach used for conducting the research which include
explanatory approach, descriptive approach and exploratory approach (Dawson, 2002).
The writer chose the explanatory research in order to conduct this research and to
achieve the research objectives. It is chosen as it provides the explanation for the nature
of relationships that exist between the variables. For instance, the relationship between
the critical success factors of eCRM and the success of eCRM program in Malaysian
budget airlines industry. In addition, it attempts to build as well as detailed the theories
24

and principles related to research study (Dawson, 2002; Goddard, Melville, & Goddard,
2004). Dawson (2002) stated that explanatory research strives to build theories that
explain and predict social and natural events. Furthermore, the explanatory research can
help to answer the question why

(McNabb, 2008). For instance, why the eCRM

program can be successfully implemented in Malaysian budget airlines industry.

Descriptive approach is not chosen as this method focuses on describing the phenomena
rather than explaining the reason behind the phenomena. For instance, the descriptive
approach can describe that the eCRM program is successfully implemented in Malaysian
budget airlines industry but it does not state why it is successfully implemented. On the
other hand, explanatory approach can explain the reasons behind this phenomena.

Exploratory research is not chosen because the purpose of the exploratory research is to
gain familiarity with a phenomenon. Exploratory research aims to find out how people
get along in the setting under question. It does not explicit expectations unlike
explanatory research.

3.5

Research strategy

a.

There are different research strategies that are used to conduct a research

by the researchers such as qualitative research strategy, quantitative research

strategy and triangulation research strategy.

25

In this research, quantitative research strategy is chosen. The type of quantitative

research method that is chosen is survey questionnaire. A questionnaire is a printed selfreported form designed to elicit information that can be obtained via written responses of
the participants.

The quantitative research strategy is done by carrying out multiple regression analysis
and random sampling. The quantitative research strategy is chosen as it enables the
researcher to measure and analyze the collected data. In addition, the quantitative
research strategy allows the connection between the dependent and independent variable
to be studied. Quantitative research also helps to summarize the data and allows the
researcher to analyze as well as to compare with other similar studies. It is possible to
clarify question meaning for respondents based on the response choices. Besides,
quantitative research involves fewer variables and hence the results are more accurate
and objective. Quantitative research can help to eliminate bias also. It can eliminate
irrelevant or confused answers to questions,therefore obtain a more accurate conclusions
compared to qualitative research strategy. In other words, it filters out all the external
factors and provides real results. Quantitative research in the form of close ended
questionnaires is quicker and easier for the participants to answer. Finally, quantitative
research is chosen as it helps to finalize results and can help the researcher to prove his
hypothesis as it has the ability to measure data via statistics.

26

3.6

Data Collection Method

The data collection method emphasizes on the collection of the data by using a variety of
primary and secondary sources of information. It is considered an optimal way to gather
information, in order to keep the information on record and in decision-making,
contiguous to the issues existing in the considered research (Khanzode, 2004). On the
other hand, the data collection for this research study deals with general data collection
method; therefore, primary and secondary data collection for the research is illustrated as
follows (Goddard, Melville, & Goddard, 2004):

3.6.1

Primary Data

According to Ranjit Kumar (2005) primary sources are original document such as
diaries, letters, interviews, and speeches etc. which gives first hand contemporary
account written by individual who experience or witness an event. In this study, primary
data is collected through questionnaires.

3.6.1.1 Questionnaires

The questionnaires for this study consisted of two parts. The first part includes the open
ended questions and the second part includes the close ended questions.

3.6.1.1.1

Open-ended questionnaires

27

The open-ended questionaires include the background information of the respondents.

This section will help the researcher to identify the participants and compare the
respondents in groups. The questions that are included in the open-ended questionaires
are as follows:
1. Demographic information:
i. Gender
ii. Age
iii. Race
iv. Occupation
v. Working experience with the budget airlines industry
3.4.1.1.2

Close-ended questionnaires

The close-ended questionnaires are given to 100 employees of Malaysian budget airlines
industry at Senai International Airport, Johor Bahru. The employees are selected by
using stratified random sampling whereby the employees are divided into subgroups
according to their age groups, race and occupation.

a) In this study, the writer will conduct a survey on the employees who are
categorized according to the following age group:-

b) 21 to 55 years old
28

c) 21 to 55 years old consumers are chosen as this age group falls under the
working adult category. The majority of the employees of Malaysian budget
airlines industry falls under this age group. Hence, this age group is selected by
the writer.

In Malaysia, Malays and other indigenous make up 61.4%, Chinese 23.7%, Indians
7.1% and others 7.8% (WonderfulMalaysia, 2012). Therefore, the writer selects the
sample according to race as in Figure 3.2.
21-55years old
No of Malay participants

63

No. of Chinese

28

participants
No. of Indian participants
Total no of participants

9
100

Figure 3.2 stratified random sampling

The participants include 7 Malay CEOs, 4 Chinese CEOs, 1 Indian CEO, 7 Malay
managers, 3 Chinese managers, 1 Indian manager, 7 Malay supervisors, 3 Chinese
supervisors, 1 Indian supervisor, 7 Malay pilots, 3 Chinese pilots, 1 Indian pilot, 7
Malay stewardesses, 3 Chinese stewardesses, 1 Indian stewardesses, 7 Malay customer
care officers, 3 Chinese customer care officers, 1 Indian customer care officer, 7 Malay
licensed aircraft engineers, 3 Chinese licensed aircraft engineers, 1 Indian licensed
29

aircraft engineer, 7 Malay executives, 4 Chinese executives, 1 Indian executive, 7

Malay creative designers, 4 Chinese creative designers and 1 Indian creative designer.

CEO

Manager

Supervisor

Pilot

Stewardess

Licensed
aircraft
engineer
7

Executive

Creative
designer

Customer
care
officer
7

No. of Malay
participants
No. of Chinese
participants

No. of Indian
participants

Total no. of
participants

12

11

11

11

11

11

11

11

11

Figure 3.3: Participants in the close-ended questionnaire

All items are accessed on a 5-point Likert-type scales that ranges from strongly
disagree to strongly agree to get a better response from the respondents (Clason &
Dormody, 1994). The respondents will rate each item with 5 points scale which is shown
in the following table.
Strongly agree

Agree

Neither agree nor disagree

Disagree

Strongly disagree

Figure 3.4: 5-point Likert-type scales

The distribution process includes offline process only. It involves distributing the
questionnaires in paper form at Senai International Airport, Johor Bahru. The questions
in the questionnaires are designed to identify the interrelationship of the technological
30

factors, organizational factors and the success of eCRM program in Malaysian budget
airlines industry.
3.6.1.1.2

Questionnaires for the employees of Malaysian budget airlines

There are 32 questions in the questionnaires for the employees of Malaysian budget
airlines in order to prove the 2 hypotheses that are stated in Chapter 1. They are as
follows:

31

1
To measure Independent Variable Technological Factors in Success of
eCRM program
1 eCRM can be successfully implemented because it employs the latest
technology.
2 eCRM which has the relative advantage over its competitors in terms
of delivering accurate information to the customers is able to ensure
the success of eCRM implementation.
3 The compatibility of the eCRM to the organizations previous
experience and current requirements plays an important role in
ensuring the success of eCRM implementation.
4 An innovation that meets the needs of the customers play an important
role in determining the success of eCRM implementation.
5 eCRM is adopted well if it is compatible with individuals job
responsibility.
6 eCRM is adopted well if it is compatible with individuals value
system.
7 eCRM can be successfully adopted if it is easy to use and understand.
8 The availability of trial in eCRM enables the organization to
familiarise each of the optional and this ensures the success of eCRM
implementation.
9 Triability helps to boost confidence among the adopters and this plays
an important role in ensuring the success of eCRM implementation.
10 The positive outcomes of eCRM employment in other organizations
can help to reduce uncertainties among new adopters.
To measure Independent Variable Organizational Factors in Success of
eCRM program
11 The organization easily adopts eCRM due to its firm size.
12 Organization structure and culture influence the success of eCRM
implementation.
13 Customer-centric strategy can enhance customer satisfaction and
influences the success of eCRM.
14 Customer touch points can help the organization to understand the
customers lifestyle and thus enhances eCRM.
15 The support from the top management encourages the adoption of
eCRM among the customers.
32
16 The alignment of visions and goals of the organization can ensure the

Strongly
agree

Agree

Neither
agree

Disagree

Strongly
disagree

Table 3.1Questionnaires for the employees of Malaysian budget airlines

success of eCRM.
17 The success of eCRM depends on the employees who are equiped
with IT knowledge and skills.
18 Training can enhance the skills of the employees and ensure the
success of eCRM.
19 The ability to use knowledge management with technologies can
encourage the decision about strategies,product offering and how to
interact with the customers.
20 Financial resources influences the success of eCRM implementation.
To measure Dependent Variable the success of eCRM program
Do you think the airline which you are working with, eCRM is
successfully applied because
21 The organization employs the latest technology
22 of delivering accurate information to the customers
23 of innovation that meets the needs of the customers
24 it is easy to use and understand.
25 other organizations can help to reduce uncertainties among new
adopters.
26 of using Customer-centric strategy
27 the organization try to understand the customers lifestyle.
28 it is supported by the top management
29 of The alignment of visions and goals of the organization
30 the employees equipped with IT knowledge and skills.
31 of Financial resources
32 The organization employs the latest technology?

The questionnaires will be pre-tested by 10 participants to ensure clarity and ease of

comprehension. The participants will be asked to evaluate the clarity of the wordings,
level of language in terms of sensitivity, ease of comprehension, as well as format,
length, instructions for overall survey to minimise ambiguities and
errors.

33

communication

A verbal consent will be obtained from the participants prior to distributing the
questionnaire. All participants are informed the study is on a voluntary basis and that the
information provided will be kept confidential.
3.6.2

Secondary Data

The secondary data is collected for the review of previous literature and for conducting
the background study for the research topic. The secondary data for the research study
is collected from authentic journal articles, newspaper publications, reports and books
(Goddard, Melville, & Goddard, 2004).
In order to find out information to about the factors that influence the success of eCRM
program, the writer used secondary sources obtained online. The key words used in the
search process are factors that influence eCRM and critical success factors of
eCRM.
3.5

Data analysis methods

The data analysis methods are those that are used to de-synthesize data to answer the
research questions (Goddard, Melville, & Goddard, 2004). The data analysis methods
are also utilized to break down research issue by using the collected data and
information. Usually, there are two types of data analysis methods including qualitative
and quantitative that are used in the research studies. In the qualitative data analysis, the
data are based on observation and interpretation of interview responses while in the
quantitative approach, the data are based on numerical measurements using survey data
acquired from the responses of participants (Dawson, 2002).
34

To conduct the research, quantitative analysis approach is used. The quantitative data
obtained from the questionnaires will be analysed by using SPSS 20.0. Results will be
shown in the form of tables.

Later, a report will be made based on the information obtained from the SPSS 20.0 and
secondary sources information.

In addition, the writer will examine whether the 2 hypotheses that have been formed in
Chapter 1 are accurate and a conclusion will be drawn.

3.7

Sampling strategy

The use of probability sampling enables every individual in the population to possess an
equal opportunity to be selected as a part of the sample. There are three types of
probability sampling named as random sampling, stratified sampling, and cluster
sampling (Singh, 2010). Random Sampling is obtained by selecting the consumers
randomly in which every participant has equal opportunity of being selected for the
study. Stratified Sampling permits the researcher to consider the subgroups of
participating consumers within the population. It represents the most accurate features of
the population within the same sample. Cluster Sampling is used by the researchers
when the organizations of the sample are a part of the group (Goddard, Melville, &
Goddard, 2004).

35

The sampling strategy selected for this study is stratified and random sampling. First of
all, the writer will identify the total number of employees in Malaysian budget airlines at
Senai International Airport, Johor Bahru. Later, the employees are subdivided according
to race, age group and occupation. The writer will select the employees randomly from
each subgroup as shown in Figure 3.3. A total of 100 employees will be selected
randomly to participate in the research.

The sample has equal opportunity to get

selected for participating in the research study.

3.8

Research Ethics

The research ethics refers to the implementation of several ethical principles that are
used for the safeguarding of the rights of the research participants (Goddard, Melville
and Goddard 2004).Therefore, this research is conducted after giving strong
considerations of the several ethical principles to deal with the ethical issues concerning
voluntary participation, informed consent, confidentiality, plagiarism, validity, and
reliability. However, in this research, it is ascertained that every member of the research
is participated voluntarily and research will be made and survey will be conducted with
complete authorization. However, proper citation and referencing of research material is
performed in order to avoid plagiarism issue within the research study (Dawson, 2002).
The actual name of the budget airlines are not revealed and the term Malaysian budget
airlines are used. This is a measure to safeguard the privacy and integrity of the budget
airlines concern.

36

3.9

Reliability and Validity of Research

The research is reliable and valid because it employs quantitative approach whereby it
can eliminate irrelevant or confused answers to questions. It filters out all the external
factors and provides real results. Therefore, the writer is able to obtain more accurate
conclusions compared to qualitative research strategy.

The data is reliable also because the information to be obtained from the participants is
tested using regression analysis, which is being analyzed critically under the light of
previous studies. The findings gathered from the employees of Malaysian budget airlines
are critically analyzed and the validity of such information is compared with the
information obtained from the findings of the previous studies.
Alternatively, it can be said that the research is valid and reliable based on the data and
information being gathered along with the interpretation. The data and information
provided are meeting the research aims and objectives while answering the research
questions.
3.10

Reliability test

To determine the reliability of the instrument, the questionnaires were tested using
Cronbach's alpha. The result of the pre-test and actual test is shown in tables below:

Variables

Number of Cronbach's Alpha

Items
Pre test
37

Cronbach's Alpha
actual test

Variables
Organizational Factor

Number of Cronbach's Alpha

Items
Pre test
10
.788

Cronbach's Alpha
actual test
.848

Technological Factor

10

.712

.765

Success of E- CRM

12

.742

.819

As the table shows, Alpha value for all variable ranged from .712 to .848 which is
acceptable (Cronbach, 1951). Since the internal consistency is statistically significant, all
items of measurement are accepted for actual data collection. Accordingly, all of items
which is developed to measure three variables of study, meet the reliability criteria.

3.11 Validity
Validity means that the concept we are measuring is actually what we are measuring
rather than some other concepts. Validity of written is established through an exact
process of research and development verifying the measures characteristics and
usefulness (Thyer, 2009). There is two typs of validity ,which researches have to achive:
face validity and content validity.

3.11.1 Face validity

Face validity assumes that when we look at the questionnaire the concepts intended and
is often dependent on the perception of the reviewer of the measurement instrument.
Face validity also refers to how the questionnaire looks and how a measure or procedure
appears. Asking items should be reasonable to gain the information and have to be easy
38

to understand it means the sentences structure and the vocabulary used must be suitable
for respondents to their level of understanding (Thyer, 2009). In this study, to insure that
all items are fully understanding by respondents, pre test was done.

3.11.2 Content Validity

Content validity, which includes elements of face validity is refers to evaluation items of
measure to determine if they are representative perception that the measure seeks to
examine (Thyer, 2009).

3.12

Time frame

Below is the schedule for questionnaires distribution at Senai International Airport,

Johor Bahru.
28th April 2013

Senai International Airport

Figure 3.6 10 Schedule for the questionaires on site distribution

3.13

Conclusion of the chapter

It can be concluded that the research methodology created for the research study can
enable the writer to conduct the study by using the most appropriate tools. Using these
effective tools selected in this chapter, the writer can obtain the results and findings of the
study that are presented in the next chapter.

39

40

4
4.1

CHAPTER FOUR: RESULT OF STUDY

Introduction

This chapter has contained finding and results of the study include of descriptive
analyses, interpret demographics information of participants, preliminary analyses of the
data, and the statistical analyzes used to answer the research questions. This chapter
organized into three sections: (1) characteristic of respondents, (2) descriptive analyze
and (3) inferential analyses.

During data collection, 100 employees of Malaysian budget airlines industry at Senai
International Airport, Johor Bahru have asked to respond the questionnaire.

Table 4.1. The number of send questionnaire and received respondents

Name of airline

Total

Number of send
questionnaire
100

Number of received
questionnaire
100

100

100

41

4.2

Descriptive analyse

4.2.1

Characteristics of the Respondents

In the first section of this chapter, characteristics of the respondents in term of gender,
age, race and occupation have discussed. All of characteristics of the respondents have
measured at nominal data level (The nominal level of measurement is the lowest level
out of four ways to characterize data: Nominal, Ordinal, Interval, and ratio Nominal.
Nominal level means that data we name data to remember what this level is all about.
Nominal data deals with names, categories, or labels).

Table shows the distribution of respondents.

42

Table 4.2 characteristic of respondents

Demographic Factors

Categories

Frequency

Percentages

Female
Male

46
54

46.0
54.0

21-32

42

42.0

33-44

51

51.0

45-55

7.0

Malay

63

63.0

Chinese

28

28.0

Indian

9.0

CEO

12

12.0

Manager

11

11.0

Supervisor

11

11.0

Pilot
Executive
Creative
designer
Customer care officer
Licensed aircraft engineer
Executive
Creative designer

11
11

11.0
11.0

11
11
11
11

11.0
11.0
11.0
11.0

Gender

Age

Race

Occupation

As table shows the proportion of female was 46% and proportion of male was 54 %. The
numbers of female respondents were 46 individuals, and male were 54 individuals. It
shows the majority of respondents were male and the less than half of respondents were
female.

43

From the category of age position, slightly more than half of respondents have 33-44
years old (51%), following 42% were between 22-33 years old, and have 7% were
between 45-55 years old.

In term of race categories, majority of respondents were Malay (63%) following by

Chinese (28%) and Indian (9%).

The last parametric information, which has showed Occupation of respondents, in

immediate airline indicated that respondents have different position with almost same
percentages.

Table 4.3 Descriptive statistics report (characteristic part)

Gender
Age
Race
Occupation
Valid N
(listwise)

N
100
100
100
100
100

Range
1.00
2.00
2.00
8.00

Sum
154.00
165.00
146.00
496.00

44

Mean
1.5400
1.6500
1.4600
4.9600

Std.
Deviation Variance
.50091
.251
.60927
.371
.65782
.433
2.61279
6.827

45

46

4.2.2

Frequency of respondents toward Technological Factors in Success of E-

CRM program

Items

Table 4.4. The percentage, mean and standard deviation of respondents

(variable 4: Technological Factor)
Frequency of respondents
Mean
1
2
3
4
5

eCRM can be successfully

implemented because it employs the
latest technology.

Std.
Deviation

22

47

30

4.1

.74

eCRM which has the relative

advantage over its competitors in
terms of delivering accurate
information to the customers is able
to ensure the success of eCRM
implementation.

19

31

29

20

3.5

1.04

The compatibility of the eCRM to the

organizations previous experience
and current requirements plays an
important role in ensuring the success
of eCRM implementation.

15

31

27

18

3.3

1.19

An innovation that meets the needs

of the customers play an important
role in determining the success of
eCRM implementation.

22

46

23

3.8

.91

eCRM is adopted well if it is

compatible with individuals job
responsibility.

24

42

28

3.9

.90

eCRM is adopted well if it is

compatible with individuals value
system.

23

41

27

3.8

.99

eCRM can be successfully adopted if

it is easy to use and understand.

12

32

37

15

3.5

1.019

The availability of trial in eCRM

enables the organization to
familiarise each of the optional and

15

26

40

15

3.5

1.048

47

this ensures the success of eCRM

implementation.
Triability helps to boost confidence
among the adopters and this plays an
important role in ensuring the success
of eCRM implementation.
The positive outcomes of eCRM
employment in other organizations
can help to reduce uncertainties
among new adopters.

14

35

30

21

3.6

.976

28

31

26

3.8

.919

*five-Lykert scales from (1: strongly disagree, 2: agree, 3: somehow agree, 4: disagree
and 5: strongly agree )
*Number of respondents:100

According to table above, majority of respondents have believed that eCRM can be
successfully implemented if the organization meet the criteria of technological factors
(mean ranged from 3.3 to 4.1) mean shows that the majority of respondents were almost
agree with an idea that technological factors effect on eCRM to be successful.

Standard deviation value shows how much difference exists from the average or mean
value.

48

4.2.3

Frequency of respondents toward Organizational Factors in Success of e-

CRM program
Table 4.5. The percentage, mean and standard deviation of respondents
(variable 4: Organizational Factor)
Items

Frequency of respondents
1
2
3
4
5

The organization easily adopts eCRM

due to its firm size.

Mean

Std.
Deviation

23

42

34

4.1

.78

Organization structure and culture

influence the success of eCRM
implementation.

30

36

31

3.9

.89

Customer-centric strategy can enhance

customer satisfaction and influences
the success of eCRM.

15

25

25

32

3.7

1.16

Customer touch points can help the

organization to understand the
customers lifestyle and thus enhances
eCRM.

15

50

32

4.1

.76

The support from the top management

encourages the adoption of eCRM
among the customers.

25

36

36

4.1

.86

The alignment of visions and goals of

the organization can ensure the success
of eCRM.

28

44

26

3.9

.79

The success of eCRM depends on the

employees who are equiped with IT
knowledge and skills.

33

36

25

3.8

.89

Training can enhance the skills of the

employees and ensure the success of

30

40

27

3.9

.83

49

eCRM.
The ability to use knowledge
management with technologies can
encourage the decision about
strategies,product offering and how to
interact with the customers.

22

45

29

.85

Financial resources influences the

success of eCRM implementation.

29

33

34

.94

*five-Lykert scales from (1: strongly disagree, 2: agree, 3: somehow agree, 4: disagree
and 5: strongly agree )
*Number of respondents:100

Recent table shows that majority of respondents have believed that eCRM can be
successfully implemented if the organization meet the criteria of technological factors
(mean ranged from 3.7 to 4.1) mean shows that the majority of respondents were almost
agree with an idea that organizational factors effect on eCRM to be successful.

50

4.2.4

Frequency of respondents toward Organizational Factors in Success of e-

CRM program
Table 4.6. The percentage, mean and standard deviation of respondents
(variable 4: Organizational Factor)
Items

Frequency of respondents
1
2
3
4
5

The organization employs the latest

technology

Mean

Std.
Deviation

23

48

28

4.1

.749

of delivering accurate information to

the customers

16

31

30

22

3.5

1.049

of innovation that meets the needs of

the customers

13

34

25

21

3.3

1.193

it is easy to use and understand.

25

42

25

3.8

.914

other organizations can help to

reduce uncertainties among new
adopters.

26

42

29

3.9

.90

of using Customer-centric strategy

27

42

24

3.8

.995

the organization try to understand the

customers lifestyle.

10

34

36

16

3.5

1.019

it is supported
management

14

26

38

19

3.5

1.048

12

36

29

23

3.6

.976

40

29

26

3.8

.919

of Financial resources

4.1

.74968

The organization employs the latest

technology?

3.5

1.04910

by

the

top

of The alignment of visions and goals

of the organization
the employees equipped with IT
knowledge and skills.

*five-Lykert scales from (1: strongly disagree, 2: agree, 3: somehow agree, 4: disagree
and 5: strongly agree ) *Number of respondents:100
51

According to table above, majority of respondents have believed that eCRM is

successfully implemented in the airline (mean ranged from 3.3 to 4.1) mean shows that
the majority of respondents were almost agree with an idea that eCRM is applied
successfully in the airline.

4.2.5

Descriptive statistics report (characteristic part)

Descriptive Statistics
N
100

Range
2.80

Mean
4

Std.
Deviation
.57

Technological factors of
Successful of E-CRM

100

2.90

3.7

.55

.310

Successful of E-CRM

100

3.00

3.7

.54

.301

Organizational factors of
Successful of E-CRM

Variance
.329

To know the level of agreement, the mean of all items of variables computed separately
which is shows in table above. Mean of variables scale shows that the level of
respondents agreement were high.

52

4.3

Inferential statistic

Pearson correlation was used to test the hypothesis of the study since it is a parametric
test that requires both variables (independent variable and dependent variable) to be
normally distributed.

For interpretation correlation it was referd to Guilford's rule of thumb, which interpreted
r-value as following: (Guilford, 1973) p.145

If r-value is smaller than 0.20, it will indicate almost negligible correlation.

If r-value is between 0.20 and 0.40, it will indicate low correlation.

If r-value is between 0.40 and 0.70, it will indicate moderate correlation.

If r-value is between 0.70 and 0.90, it will indicate high correlation.

If r-value is between 0.90 and 1, it will indicate very high correlation.

4.3.1

Testing hypothesis

4.3.1.1

Relationship between the technological factors and the success of eCRM

program.

HO1: There is no significant relationship between the technological factors and the
success of eCRM program.

H1: There is relationship between the technological factors and the success of eCRM
program.
53

The correlation between the technological factors and the success of eCRM program
was found to be statistically significant [ r (n:100) = .95, p=.00<.05].
These findings suggest that there is a strong positive relationship between the
technological factors and the success of eCRM program and it is statistically significant,
hence we accepted H1. The positive relationship indicated that if technological factors is
improved, E-CRM would be successful accordingly and vice versa.

Since the r-value (correlation value) is positive, it means technological factors associated
to the success of eCRM program directly. Nevertheless, according to Guilford's rule of
thumb, r-value (0.95) is between 0.90 and 1; it means there is very high correlation
between variables. P value (P=0.00<.005) also indicated that the correlation is
statistically significant.

4.3.1.2 Relationship between the organizational factors and the success of eCRM
program.

HO2: There is no significant relationship between the organizational factors and the
success of eCRM program.

H2: There is relationship between the organizational factors and the success of eCRM
program.

The correlation between the organizational factors and the success of eCRM
program was found to be statistically significant [r (n:100) = .54, p=.00<.05].
54

These findings suggest that there is a positive relationship between the organizational
factors and the success of eCRM program and it is statistically significant, hence we
accepted H2. The positive relationship indicated that if organizational factors is
improved, E-CRM would be successful accordingly and vice versa.

Since the r-value (correlation value) is positive, it means organizational factors

associated to the success of eCRM program directly. Nevertheless, according to
Guilford's rule of thumb, r-value (.54) is between 0.40 and 0.70; it means moderate
correlation between variables. P value (P=0.00<.005) also indicated that the correlation
is statistically significant.

55

CHAPTER FIVE : DISCUSSION

5.1

Introduction

5.2

Discussion

5.3

Implication

5.4

Limitations

5.5

Future Research Needs

56

REFRENCES

Cronbach, L. J. (1951). Coefficient alpha and the internal structure of tests.

Psychometrika, 16(3), 297334
Thyer, B. A. (2009). The Handbook of Social Work Research Methods. USA: SAGE.
Guildford, J. P. (1973). Fundamental statistics in psychology and education. (5th
ed.) New York: McGraw-Hill.

57