Current global competitive environment leads firms to develop and strengthen their relations with their customers. Customer relationship management (CRM) is a core organisational process that concentrates on establishing, maintaining, and enhancing long-term associations with customers.
The purpose of this study is to examine the effectiveness of relationship quality in relation to enhancing the customer loyalty and the consumer buying behaviour in the service industry, using the example of cosmetic industry. First the literature has been reviewed in order to examine the different areas that are relevant to this research study. Then quantitative research has been conducted through questionnaire survey among female students based on non-profitability method. The findings of this study indicate that three dimensions of quality relationship; satisfaction, trust and service quality have a positive impact on customer loyalty towards a cosmetic brand and people who are satisfied with their shopping experience would be likely to engage in a positive word-of-mouth. A positive word-of-mouth has significant effects on influencing other people‟s purchase making decision in a result attracting new customers to a brand and therefore increases sales.
Companies must build good relations with its customers to earn their loyalty, and ensure their commitment to talk about the virtues of the company and its products in all forums. Managers must understand that the satisfied customer can attract new customers through word of mouth. Author keywords: Customer loyalty, consumer buying behaviour, cosmetic industry, satisfaction, trust, service quality, commitment, relationship quality, word of mouth