1University of Business and Integrated Development Studies, Wa, Ghana. |
AbstractThe use of fair practices in the treatment of customers is an imperative prerequisite for companies’ success in the West African context. Thus, equity and ethical marketing practices are vital to competitive and farsighted companies. The purpose of this research is to demonstrate how fair practices contribute to companies’ profitability. In addition, the present research examines the relationships between equity, customer satisfaction, and repurchase in Small and Medium Enterprises (SMEs). This is a post-positivist research design that uses a questionnaire for data collection in two private SMEs. The data is analyzed with Sphinx IQ and SPSS. The results first confirm that there is a strong association between equity and customer satisfaction. Second, the results also confirm that there is a strong association between equity and repurchase. Thus, the recommendation is that companies in the African context should emphasize fair marketing practices to future-proof their business in the face of customer loss and ferocious competition. |
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Received: 7 March 2022 |
Funding: This study received no specific financial support. |
Competing Interests:The author declares that there are no conflicts of interests regarding the publication of this paper. |
The purpose of this research is to assist in the preclusion and eradication of unfair and unethical marketing practices in the West African business context. Thus, the present research differentiates marketing practices from the traditional marketing practices applied in the African context. Previous research has shown that managers misperceive marketing practices as selling practices (Nassè, 2021). However, there are some key differences between the two concepts; the concept of marketing notably entails fair and ethical practices and persuasion, whereas the concept of selling often ignores fairness, ethics, and persuasion in favor of immediate profit, implying aggressive marketing practices and hostility. In addition, marketing practices involve the application of rational methods, whereas selling practices are antagonistic toward customers’ needs and wants. Marketing management practices work to attract new customers (Perconte, 2003) by applying accurate business methods and by building sustainable managerial relationships. In contrast, in the African context, conflicts and incidents between businesses and customers are often common. Some authors have demonstrated that to minimize such incidents it is good to implement fairness and equity (Brewer & Selden, 2000; Kotler & Dubois, 2003; Morrisson, 2005; Nassè, 2016; Urban, 1979) to boost performance (Nassè, 2019). In the same context, Carbonell and Nassè (2021) have shown that entrepreneurial leadership, adaptation to the African business environment, organizational efficiency, and strategic positioning are key to entrepreneurial success. Nacoulma, Akouwerabou, and Nassè (2020) argued that reducing the challenging issue of business fraud could help companies to perform well by promoting a sane, competitive business environment. However, Akouwerabou (2016) demonstrated that for companies to achieve better technical efficiency, these companies must recruit highly qualified personnel that is competent to address management challenges. Nassè, Ouédraogo, Takougang, and Zidouemba (2020) proved the relationship between equity and customer satisfaction in relation to private companies’ product quality.
Until now, research on equity and customer satisfaction and repurchase in the African context has not been intensely investigated either from the perspective of private or from public companies.
Still, marketing management should reflect customers’ core needs and core expectations by valuing business ethics and fair practices (Nassè, 2012) in an apocalyptic business context (Nassè, 2021). Thus, the main research question of this paper is: Why and how does equity affect customer satisfaction and repurchase in Small and Medium Enterprises (SMEs)?
The first objective of this research is to examine the association between equity and customer satisfaction; the second is to assess the association between equity and repurchase in the SME context.
2.1. Concepts
2.1.1. Equity
Homans (1961) and Adams (1963) were the earliest scholars to set up an intuitive and critical definition of the construct of equity in the management context. Homans (1961) understood equity to be fairness, while Adams (1963) understood it to be a distributive justice that results from the comparison an individual makes between what they receive (outputs) and their own contribution to the exchange (inputs). For Nassè (2016) equity was a form of perceived fairness in the offer of products and services that persuades customers to make certain purchase decisions. In this paper, fair practices are seen as a symbol of integrity and honesty for a given company or brand. Therefore, fair practices toward customers help to improve the brand image of companies and give them a better position within a very competitive environment.
According to Hatfield, Salmon, and Rapson (2011), the construct of equity has its origins in the fact that fairness and social justice are viewed as persuasive and rewarding values that are very relevant in human society. These authors showed that social pressures cause individuals to always look for profit in relationships, in order to be at ease. Individuals feel ashamed when they perceive that the profit is more than expected, and they are frustrated when they do not experience a benefit from the relationship.
2.1.2. Customer Satisfaction
The concept of customer satisfaction denotes how happy or pleased customers are with a given company's products or services (Ladhari, 2005; Nassè et al., 2020). Thus, customer satisfaction can be very high or very low, and the level of satisfaction may help companies to reshape their products and services to address customers’ core needs and expectations.
For Majeed, Asare, Fatawu, and Abubakari (2022), customer satisfaction referred to a product or service purchasing experience within which the customer finds a certain pleasure, delight, joy, or happiness, leading to purchasing decisions and actions. Furthermore, according to authors like Ibzan, Balarabe, & Jakada (2016), customer satisfaction reflects the level of response to customers’ needs and wants, when these customers are faced with the products or services of a given company.
2.1.3. Repurchase
The concept of repurchase refers to the act of buying an item, product, or service for at least a second time (Nassè, 2015). Some authors, such as Curtis, Abratt, Dion, and Rhoades (2011), define repurchase as evidence of customer satisfaction, as well as customer loyalty to a company’s brand or to that company itself. Pratama and Giantari (2021) also showed that repurchase is an outcome of customer satisfaction. Thus, repurchase is perceptible proof that customers appreciated the previous offer or service. The construct of repurchase refers to the act of purchasing an identical product from a given company more than once (Ibzan et al., 2016).
2.2. Underpinning Theories
The theories that underlie the present research are the theory of satisfaction, the theory of repurchase, and the economic theory of purchase.
2.2.1. The Theory of Satisfaction
Vanhamme (2004); Olsen (2002); Abbasi et al. (2019) and Nassè (2021) portrayed customer satisfaction as a physical and psychological-emotional state that is displayed during an act of purchase or in the post-purchase period. For these authors, equity and emotional reactions are linked to satisfaction. In addition, these authors perceived fairness and distributive justice as antecedents of satisfaction. Thus, a satisfied customer perceives that offers are fair when that customer compares his/her investments to the quality of the received product or service. Conversely, a dissatisfied customer perceives that offers are unfair when that customer compares his/her investments to the quality of the received product or service.
2.2.2. The Theory of Repurchase
Simon (2000); Van Laethem and Body (2008) and Kitchathorn (2009) showed that satisfaction has a significant effect on repurchase. They thus established a link between equity and repurchase. For these authors, a satisfied customer has an intention to continue buying the products and services of the company in question. Furthermore, a dissatisfied customer has an intention to stop buying the products and services of the company.2.2.3. The Economic Theory of Purchase
Morrisson and Mathieu (2003); Diop (2004);Kitchathorn (2009); Van Laethem and Body (2008); Nassè (2015) and Nassè et al. (2020) emphasized that individuals purchase certain products or services when these products or services have the greatest value in terms of quality or when these products or services give absolute satisfaction at a reasonable price relative to their qualities. Thus, customers’ purchasing decisions and choices are made based on some personal economic criteria. Individualistic characteristics such as customer purchasing power and customer financial possibilities to achieve a purchase and repurchase are also significant factors to take into account.
2.3. Research Hypotheses
The conceptual framework of the research suggests that when customers perceive an offer for a product is fair they are satisfied, and will then try to repurchase the product. Conversely, the perception of an unfair offer leads to dissatisfaction and lack of repurchase. From the review of the literature, the researcher has generated two (2) pairs of hypotheses.
Nassè and Sawadogo (2019) and Nassè (2019) have shown that there is a relationship between equity and customer satisfaction in three private companies. Thus, the present research seeks to verify this hypothesis in two more private companies:
H1: Equity is strongly associated with customer satisfaction.
H0: Equity is not strongly associated with customer satisfaction.
Certain authors, such as Palmer, Beggs, and Keown-McMullan (2000) and Nassè (2016), have shown that there is a relationship between equity and customer repurchase in the restaurant sector. Thus, the present study seeks to verify the following hypothesis in the training sector and the printing sector:
H2: Equity is strongly associated with repurchase.
H0: Equity is not strongly associated with repurchase.
2.4. Fair Practices of Companies in the African Context
In the African context, some observations have shown that many companies are facing difficulties and management challenges in providing fair products or services to their customers (Nassè, 2021). In both modern and traditional marketplaces, it is common to observe cheating between business partners, as well as between companies and customers. Cheating as a form of malpractice or fraud is quite common but is always disregarded by customers because they find themselves in too vulnerable or non-empowered a position to condemn such practices. However, the lack of fair practices in companies is sometimes the result of marketing ignorance, a type of marketing myopia, or an inward-looking approach that prioritizes immediate profit. Thus, West African management practices are still focused on the concept of selling rather than on the practice of marketing. Therefore, it is common to find counterfeit products, outdated products, or illegal practices within the African business context. This situation can be explained by the lack of significant marketing research and marketing practice by managers. Another explanation for the situation is that companies do not invest their resources in product development. In addition, most companies in the African context do not make an effort to invest their resources into developing innovative products and creative services. Though most of the companies in the context are undergoing a digital revolution (Compaoré, Ouédraogo, Nassè, & Salakpi, 2021) this state of change is not leading to significant innovation because of a lack of intensive research and development initiatives. Furthermore, the lack of intensive control over products and services by the governing authorities does not put pressure on companies to improve the quality of their products or services. Finally, the growing issues of malpractice and fraud in the context caused Nacoulma et al. (2020) to recommend various strategies, such as the prevention of fraud, the identification of fraud risks, the mapping of fraud risks, and the conspicuous implementation of anti-fraud systems to eradicate fraud.
3.1. Research Design
This study is exploratory because the subject has not yet been considered in the Burkinese context. To improve the knowledge and understanding of the topic, the epistemological posture adopted is post-positivist and the approach is a quantitative one.
3.2. Research Instrument
The research instrument is a questionnaire with fourteen (14) items. The questionnaire was pretested with the customers of two private companies. This first test involved a sample of 120 respondents. The results of the pre-test were used to draft an improved version of the questionnaire that was clear and simple to understand. This improved questionnaire was then administered to the customers of the two (2) companies for a period of six months. The research instrument was, therefore, pre-tested, and some corrections were made before collecting the final data (Nassè, 2018). The questionnaire was validated by three lecturers from different universities. Post-validation of data was also conducted and revealed that the respondents reiterated the same views.
3.3. Data Collection and Data Analysis
The data was collected at the two private companies concerned in the research. Some customers were handed the questionnaire to provide their answers immediately. There was also the possibility for customers who were in a hurry to fill out this self-administered questionnaire in their free time and then return it to the researcher.
3.4. Triangulation
The research has made use of a triangulation of research analysis tools involving both the use of SPSS software and the use of Sphinx IQ software.
3.5. Sample Size
The overall sample includes 187 respondents (N1 = training center = 138 respondents; N2 = printing company = 49 respondents). To determine the necessary sample size, the following formula was used: n ꞊ (p x (1-p)) / (e / 1.96)²; in which p refers to the observed percentage, and e represents the maximum error.
n ꞊ (0.5 × (1 - 0.5)) / (e / 1.96) ² ꞊ 0.25 / (e / 1.96). ²
n ꞊ 170 respondents.
For a maximum error of 7.5%, n = 170 respondents. The total number of respondents in the present research is significant because it is 187, a figure that exceeds the required sample size.
3.6. Ethical Considerations
Some ethical requirements are key when approaching the respondents and persuading them to provide their answers during the research period. The respondents’ answers are kept confidential and are used only for the purpose of this research. The owners of the companies were approached, and the need to conduct research on the research topic was explained by the researcher; thus, they were requested to give their authorization before data collection and analysis.
The response rate is 100%; this is because the questionnaire was self-administered and the respondents were motivated to participate in the research. However, because the research concerns two companies, it was necessary to split the overall sample data N (= 187) into two different subsamples (N1 = 138 respondents; N2 = 49 respondents) as indicated in Table 1.
| Companies | Number of respondents |
| First company (Training institution) | 138 |
| Second company (Printing company) | 49 |
| Total | 187 |
The researcher has chosen to work with respondents who are at least able to understand the research purpose and give appropriate and relevant answers on the research topic. The respondents’ ages range from 10 to 55 years and above, and each has a customer purchase experience with the concerned companies stretching back some years. In addition, the respondents are women and men with an education level ranging from primary school level to university level. In terms of profession, some of the respondents work for private companies, others work for public companies, and some of the respondents are still in education and are thus unemployed. The data analysis has revealed identical relevant relationships for the two (2) private companies.
4.1. Equity and Customer Satisfaction
In the first company, the professional training institution, the crossing of “equity" and "satisfaction" shows that the relationship is very significant with a p-value <0.01, a χ² = 40.08, and a degree of freedom df = 9.00 (see Table 2).
| Variables | Results |
Conclusion |
| “Equity” and “Customer satisfaction” | p < 0.01; χ² = 40.08; df= 9.00. |
There is a strong association. |
Furthermore, for the second company, the printing company, the results show a strong association between "equity" and "satisfaction" with a p-value = 0.04, a χ² = 13.02, and a df = 9.00 (see Table 3).
| Variables | Results |
Conclusion |
| “Equity” and “Customer satisfaction” | p = 0.04; χ² = 13.02; df= 9.00. |
There is a strong association. |
The results in both Table 2 and Table 3 show that equity affects customer satisfaction. There is a strong association between "equity" and "customer satisfaction". Thus, the null hypothesis H0 is rejected and the alternative hypothesis H1 is confirmed.
4.2. Equity and Repurchase
The results for the first company (professional training institution) show a strong association between “equity" and "repurchase" with a p-value <0.01, a χ² = 39.37, and a df = 6.00 (see Table 4).
| Variables | Results |
Conclusion |
| “Equity” and “Repurchase” | p <0.01; χ² = 39.37; df = 6.00. |
There is a strong association. |
Similarly, for the second company (printing company) the results show a strong relationship between "equity" and "repurchase" with a p-value = 0.02, a χ² = 15.61, and a df = 6.00 (see Table 5)
| Variables | Results |
Conclusion |
| “Equity” and “Repurchase” | p = 0.02; χ² = 15.61; df = 6.00. |
There is a strong association. |
The results in both Table 4 and Table 5 show that equity affects repurchase. There is a strong association between "equity" and "repurchase". Thus, the null hypothesis H0 is rejected and the alternative hypothesis H2 is confirmed.
The quantitative analysis of data collected in the two companies shows that equitable practices towards customers are very satisfactory. The different observations in the two companies also show that managers put a great deal of effort into addressing the individual core needs and expectations of their customers. Thus, customer satisfaction and repurchase are found to be high, and this contributes to the success of these companies.
5.1. Equity and Customer Satisfaction
Some researchers, such as Abadi, Kabiry, and Forghani (2013), have demonstrated that branding is a key element that has a significant effect on customer satisfaction. Kant and Jaiswal (2017) confirmed the association between perceived quality and customer satisfaction; they found that perceived quality has an effect on customer satisfaction in the banking sector. In addition, Chukwuma and Ike-Elechi (2021) showed that it is the innovation of products that has a major impact on customer satisfaction. A previous study in the African context revealed the association between equity and customer satisfaction (Nassè, 2021), specifically in private companies. The present research, however, allows researchers and scholars to perceive the association between equity and customer satisfaction in two SMEs in the West African context, in the sectors of training/education and printing.
5.2. Equity and Repurchase
Previous studies have revealed that customer satisfaction is an antecedent of repurchase (Curtis et al., 2011). According to Hermawan and Yasa (2021), factors such as company atmosphere, promotion, and retail service have strong relationships with and effects on customer repurchase intentions. While Inoni (2021) demonstrated the strong association between customer satisfaction and repurchase in the restaurant sector, a previous study by Nassè (2015) revealed the association between equity, customer satisfaction, and repurchase with a comparative emphasis on three private companies. Nevertheless, the present research demonstrates the association between equity and repurchase in two SMEs in the West African context, in the sectors of training/education and printing.
This section presents the main findings, recommendations for companies, and recommendations for future research.
6.1. Main Findings
Conceptual contributions: The research enriches several concepts, including the concept of equity, the concept of customer satisfaction, and the concept of repurchase, in the West African context. The concept of equity is viewed as a fair, win-win business interchange between companies and their customers. Customer satisfaction is the customer's emotional state as expressed by pleasure, delight, joy, and gladness following the purchase of the product or service. The present research also considers the concept of repurchase to be proof of customer satisfaction based on their post-purchase experience of a given product or service. Thus, in the present study, repurchase is qualified as an act of purchase that occurs at least a second time or several times and which is profitable to the company that is providing the product or service.
Theoretical contributions: Equity has been found to affect customer satisfaction and customer repurchase in the West African context. Thus, equity affects the sales growth of Small and Medium Enterprises (SMEs). The perception of equity has positive consequences for the company in terms of repurchase. Some factors that help to explain customer motivations for fair practices include poor purchasing power, severe economic inflation, monetary depreciation, corruption, severe living conditions, and very poor economic conditions of the country.
Managerial contributions: To remain competitive in both national and international markets, managers should integrate ethical practices into their business strategy. Managers must ensure that unethical business practices are avoided in companies’ marketing management systems. First of all, it is necessary to improve the quality of products and services through research and development and to offer customers reasonable and affordable prices.
Secondly, it enhances businesses’ marketing strategy and makes them more competitive, both locally and internationally. Thus, there is a need for companies to develop strong leadership and organizational efficiency (Carbonell & Nassè, 2021) to face such management challenges. In the West African context, companies’ marketing departments should encourage fair practices by employing the necessary innovation and creativity to be competitive in both local and international markets and hence avoid fraud issues (Nacoulma et al., 2020), shortcuts, easy solutions, and malpractice.
6.2. Recommendations
6.2.1. Recommendations for Companies
In the African context, with the rise of business intelligence in many companies (Ouédraogo & Nassè, 2020), it is time for both private and public companies to consciously apply marketing practices and avoid traditional selling practices that are profitable to their brand image and solely focused on financial growth. This can help them to meet customers’ core needs and expectations and, it can help to better their relationships with customers, which is a means of reducing customer loss.
6.2.2. Recommendations for Authorities
The government should play the role of a permanent regulator and observer of competition and market interchanges. Thus, authorities need to control both the pricing and quality of products and services in the local markets. These initiatives will compel companies to use sane practices and will be tangible proof that the authorities are protecting customers’ rights by regulating the market. The authorities could, for instance, set up an auditing entity to ensure that companies meet customers’ basic needs and expectations by implementing fair practices. Thus, companies that use unfair practices, counterfeit products, and malpractices should be penalized. Similarly, companies that sell customers out-of-date or obsolete products should be reprimanded or disciplined.
6.3. Future Research
It would be interesting to conduct similar research in other contexts to see whether customers are satisfied or not satisfied.
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