Purchasing Research As A Tool For Profitability In The Service Industry

Purchasing research is the systematic design, collection, analysis and reporting of data and findings relevant to a specific purchasing situation facing the company. (Koller P 2003).
This study focused on purchasing research as a tool for profitability in the service industry, a case study of AIICO insurance company operation in Enugu metropolis.
In order to carryout the study, the following objectives amongst others were states;
To ascertain the proportion of purchasing bodget allocated to the purchasing research activities in a given period in AIICO Insurance Company.
To ascertain, if the purchasing research activities increase the number of policy holders in AIICO insurance company.
To ascertain whether purchasing research contributes to increase in profit in AIICO insurance company.
To ascertain whether purchasing research creates awareness of AIICO insurance company and its services.
Based on the stated objectives, three hypotheses were formulated, they are:-
Ho: Purchasing research does not create awareness of AIICO insurance company.
HI1 Purchasing research creates awareness of AIICO insurance company.
Ho2 purchasing research does not increases the number of policy holders
HI2 Purchasing research increases the number of policy holders
Ho3 Purchasing research does not increase profit of AIICO Insurance Company.
HI3 Purchasing research increase profit of AIICO insurance company.
Extensive literature review of textbooks, newspapers, magazines business journals and some past projects of graduated students who studied related topic of the study was carried out to source secondary data. Primary data were source from respondents comprising policy holders, management and relevant staff of AIICO insurance company in Enugu.
The sample size was determined using Topman’s formular for the policy holders of AIICO Insurance company while a census was conducted for management and relevant staff of AIICO insurance company in Enugu.
The researcher used chi-square (x2) statistical method to test the hypotheses which were earlier formulated for the study. The data collected were presented on statistical tables using frequencies and percentages for analysis.
In the process of the study, the following finding were revealed.
That AIICO insurance company at one time or the other engaged in purchasing research activities.
That the company has a purchasing research department at the headquarters only but not at the zonal offices.
That purchasing research activities increase the number of policy holders.
That purchasing research activities increase the profit level of the company.
In view of the releasing findings, recommendations on how to apply purchasing research for the success of the company were offered.
In conclusion, the ultimate aim of using purchasing research is geared towards customers satisfaction at a profit to the company, so AIICO Insurance Company is advised to continue putting purchasing research into effective use.