A Study Of Customer Relationship Management (CRM) Practices Followed By The Hotel Industry In LUDHIANA

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A STUDY OF CUSTOMER RELATIONSHIP
MANAGEMENT (CRM) PRACTICES FOLLOWED BY
THE HOTEL INDUSTRY IN LUDHIANA
Research Project Report
Submitted to the Punjab Agricultural University
in partial fulfilment of the requirements
for the degree of
MASTER OF BUSINESS ADMINISTRATION
in
MARKETING MANAGEMENT
(Minor subject: Economics)
By
Harshal Goyal
(L-2009-BS-10-MBA)
Department of Business Management
College of Basic Sciences and Humanities
©PUNJAB AGRICULTURAL UNIVERSITY
LUDHIANA-141004
2011

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CERTIFICATE – 1
This is to certify that the project report entitled, “A study of customer relationship
management (CRM) practices followed by the hotel industry in Ludhiana” submitted for
the degree of Master of Business Administration, in the subject of Marketing Management
(Minor Subject: Economics) of Punjab Agricultural University, Ludhiana, is a bonafide
research work carried out by Harshal Goyal (L-2009-BS-10-MBA) under my supervision and
that no part of this project report has been submitted for any other degree.
The assistance and help received during the course of investigation have been
fully acknowledged.
(Dr. (Mrs.) Gagandeep Banga)
Major Advisor
Associate Professor
Deptt. of BusinessManagement
College of Basic Sciences and Humanities
Punjab Agricultural University
Ludhiana – 141 004

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CERTIFICATE II
This is to certify that the project report entitled, “A study of customer relationship
management (CRM) practices followed by the hotel industry in Ludhiana” submitted by
Harshal Goyal (L-2009-BS-10- MBA) to the Punjab Agricultural University, Ludhiana, in
partial fulfilment of the requirement for the degree of Master of Business
Administration, in the subject of Marketing Management (Minor subject: Economics)
has been approved by the external examiner along with internal examiner after an oral
examination on the same.
Internal Examiner External Examiner
(Dr. Y.P Sachdeva)
Head of the Department

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ACKNOWLEDGEMENT
First of all, I owe a debt to the Almighty by whose kindness; I have been able
to achieve a big goal of my life.
I express my heartfelt gratitude to my Major Advisor, Dr. (Mrs) Gagandeep Banga,
Associate Professor, Department of Business Management, College of Basic Sciences and
Humanities, for her dexterous guidance, inspiration, sustained encouragement, keen interest
and precious time given to me during the course of research project and in successful
completion of the manuscript.
I express my deep appreciation to, Dr. B.R.Garg, Senior Farm Economist,
Department of Economics and sociology for his expert guidance. I owe my thanks to Dr.
Pratibha Goyal, Associate Professor, Department of Business Management, Dr. Sandeep
Kapur, Professor, Department of Business Management for their valuable suggestions during
the preparation of this manuscript.
I express my sincere thanks to Dr. Y.P. Sachdeva, Professor-cum-Head, Department
of Business Management, and all other faculty members of Department of Business
Management for providing necessary facilities during the tenure of my studies.
Words at my command are inadequate to convey my sincere regards and respect
to my loving parents and my family members for their deep affection, infinite encouragement
and untiring moral support .Special thanks to all my friends for their ever encouraging
support, constant concern for my welfare and selfless sacrifices for my bright future.
Place: Ludhiana
Dated: (Harshal Goyal)

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Title of the Project Report : “A study of customer relationship management (CRM)
practices followed by the hotel industry in Ludhiana”
Name of the Student : Harshal Goyal
Admission No. : L-2009-BS-10-MBA
Major Subject : Marketing Management
Minor Subject : Economics
Name and Designation of : Dr. Gagandeep Banga
Major Advisor Associate Professor,
Department of Business Management
Degree to be awarded : M.B.A
Year of the award of degree : 2011
Total Pages in Project Report : 57+ annexure + vita
Name of the University : Punjab Agricultural University,
Ludhiana- 141004, Punjab, India
ABSTRACT
The present research was undertaken to study the Customer Relationship
Management (CRM) practices followed by selected hotels in Ludhiana and to study the
customer satisfaction with respect to the CRM practices followed by the selected Hotels. For
the purpose of the study, a sample of 10 hotels were selected from the list obtained from
Restaurant and Hotel Association of Ludhiana on random basis and 150 customers were
selected on basis of convenience. The managers/owners of the hotel and customers were
contacted to satisfy the objective of the study. It was found that most of the managers had a
positive attitude towards CRM practices and the most common activities undertaken were
studying the existing database of the customers and personal counseling. The benefits of
CRM are increased customer satisfaction and increased customer loyalty. The customers were
also satisfied with the CRM practices to some extent and referred the hotel to friends and
relatives.
Key Words: Customer Relationship Management, Hotel Industry, Customer Satisfaction.
Signature of Major Advisor Signature of the Student

CONTENTS
CHAPTER TOPIC PAGE
I. INTRODUCTION 1-10
II. REVIEW OF LITERATURE 11-17
III. RESEARCH METHODOLOGY 18-23
IV. RESULTS AND DISCUSSION 24-47
V. SUMMARY 48-54
REFERENCES 55-57
ANNEXURE i – viii
VITA
vi

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Chapter – I
Introduction
It is boom time for India's Tourism and Hospitality sector. A 5,000 year history,
culture, religion and alternative medicine fascinate both budget and luxury travellers alike.
Driven by a surge in business traveller’s arrival and a soaring interest in India as a tourist
destination, the year 2006 has been the best year till date, with foreign visitor arrivals
reaching a record 3.92 million, resulting in international tourism receipts of USD 5.7 billion.
The Department of Tourism’s resolve in promoting Indian tourism has strengthened as it
recognises it’s potential. Tourism in India is the third largest foreign exchange earner,
accounting for 2.5 per cent of GDP. The outlay on tourism development rose to Rs. 7,860
million in 2006/2007, from Rs. 3,500 million in 2003/2004, and continued to focus on the
“Atithi Devo Bhavah” campaign, targeted at the inbound foreign tourists in the country.
Translated literally this means “Guest is God”. The World Travel and Tourism Council
(WTTC) has named India along with China as one of the most fastest growing tourism
industries for the next 10 to 15 years. According to World Travel and Tourism Council
(WTTC) the Travel & Tourism Industry contributes 2.1per cent to India’s GDP. The industry
employed an estimated 24,349,000 people in 2007 (5.4per cent of total employment, or 1 in
every 18.4 jobs). (World Travel and Tourism Council, 2007)
The key driver for this growth in the Indian tourism industry has been a fast
growing economy for the last 3-4 years. Despite lagging in the basic infrastructure that
supports the tourism industry, Indian tourism industry has been showing an impressive
double-digit growth.
Hospitality is an industry with in the tourism industry. When most people think of
hospitality industry, they mostly think of hotel and restaurants. However, the true meaning of
hospitality industry is much broader in scope. According to Oxford English Dictionary,
hospitality means “the reception and entertainment of guests, visitors or strangers with
kindness and goodwill”. The word hospitality is derived from hospice, the term for medieval
of rest for travelers and pilgrims. Hospitality, then, not only includes hotels sectors and
restaurants but also include other kind of institutes that provide shelters, food or both to the
people who are away from their homes. This might include private clubs casinos, resorts, and
attractions and so on.
Hospitality, as an industry segment in itself, is a US$ 3.5 trillion service sector
within the global economy. As an engine for economic growth, the tourism and hospitality
sector cuts across the rural- urban divide, and bridges economic boundaries. According to the

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World Travel & Tourism Council’s 2007 Travel and Tourism Economic Research, the
travel and tourism sector in India generated a total demand of USD 53,544.50 million of
economic activity in 2007, accounting for nearly 5.3 per cent of GDP and 5.4 per cent of
total employment. The sector grew at a rate of 8.4 per cent in 2007 and is expected to grow
by 8 per cent per annum, in real terms, between 2008 and 2016 (Corporate Catalyst India,
2007).
The year 2007 also marked the fifth consecutive year during which India has
witnessed double-digit growth in foreign tourist arrivals. Along with the rise in foreign
tourist arrivals, foreign exchange earnings have shown a robust growth of 25.6% during
January-October 2007 to touch US$ 6.32 billion as against US$ 5.03 billion during January-
October 2006 (DPNC Consultants, 2007).
During 2009, the number of domestic tourist visits to the States/ UTs was 650 million
as compared to 563 million in 2008 and 527 millions in 2007. The contribution of top 10
States was about 88% to the total number of domestic tourist visits during 2009. During 2009,
the number of Foreign Tourist Visits (FTVs) to the States/ UTs was 13.7 million as compared
to 14.1 million in 2008 and 13.3 million in 2007. The contribution of top 10 States was about
90% to the total number of FTVs in the country during 2009. Foreign Tourist Arrivals (FTAs)
during the Month of January 2011 were 5.38 lakh as compared to FTAs of 4.91 lakh during
the month of January 2010 and 4.22 lakh in January 2009. There has been a growth of 9.7 %
in January 2011 over January 2010 as compared to a growth of 16.4 % registered in January
2010 over January 2009. The trend of significant positive growth in FTAs observed during
the year 2010 continued in January, 2011 also with a growth rate of 9.7 % (Ministry of
Tourism, 2011).
1.1 Hotel Industry
Hospitality not only includes hotels and restaurants but also relates to other kind of
institute that offers shelter, food, or both to people away from their homes. This might include
private clubs, casinos, resorts, attractions and so on. Hotels as one part of hospitality industry
has evolved from the very modest beginning of families and landowners who opened their
homes to travelers to the high rise of properties today which contain thousands of guest’s
rooms that these lodging facilities can be classified by location, by room and by the number
of rooms they contain.
Nowadays basic accommodation of a room with only a bed, a cupboard, a small table
and a wash stand has largely been replaced by rooms with en-suite bathrooms and more
commonly in United States than elsewhere climate control. Other features found may be a

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telephone, an alarm clock, a TV, and broadband internet connectivity. Food and drink may be
supplied by a mini-bar (which often includes a small refrigerator) containing snacks and
drinks ( to be paid on departure), and tea and coffee making facilities ( cups, spoons, an
electric kettle and sachets containing instant coffee, tea bags, sugar, and creamer or milk).
The Hotel Industry comprises a major part of the Tourism industry. Historically
viewed as an industry providing a luxury service valuable to the economy only as a foreign
exchange earner, the industry today contributes directly to employment (directly
employing around 0.15 million people), and indirectly facilitates tourism and commerce.
Hotels in India are broadly classified into 7 categories (five star deluxe, five-star, four
star, three star, two star, one-star and heritage hotels) by the Ministry of Tourism,
Government of India, based on the general features and facilities offered. The ratings are
reviewed every five years.
In the past five years, the hotel industry has witnesses many ups and downs. While
industry performance started to improve in the year 2005-06 and reached its peak in 2007-08,
the year 2008-09 and 2009-10 witnessed turbulent time.
According to Indian hotel industry survey 2009-10 in the first half of the year the
industry felt the effect of global financial crisis, coupled with the Mumbai terror attack which
took place in the year 2008. Overall, average occupancy across India declined by 3%, with
some cities witnessing decline of up to 15%. However the average rate of occupancy
witnessed an increase of approximate 8%. In the year 2009-10, rooms contributed 56%, F&B
and banquets 38% and others 6% to the total revenues generated compared to year 2007-08 it
was 62% for rooms, 33% for F&B and banquets and 5% from other sources.
From the major travelling cities, Bengaluru faced the major decline in its average rate
by -31% from the previous year average rate of occupancy. Pune faced a decline in the
occupancy and average rates by -18.8% and -20.8% where as Goa achieved a growth of 3%
and the average occupancy in the five-star deluxe and five-star categories of hotels was over
70%. The New Delhi was the only major city to have experience a recorded growth in
average rates by 14%. Simla is the most popular destination for domestic leisure travel. The
rates in the city remained relatively stable since it is sustained by domestic demand; however
the occupancies fell by -8.8% in the year 2009-10. All the major cities exception of Goa
continues to be weekday destinations, recording lowest occupancies on Fridays, Saturdays
and Sundays. Goa being a leisure destination, witnessed lowest occupancies on Mondays and
Tuesdays. The months of November, December, January and February continue to be the
peak season for the hotels across all the major cities in India. (Anonymous, 2009-10)

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The hotel industry is experiencing increased globalization, competition, higher
customer turnover, growing customer acquisition costs and rising customer expectations,
meaning that hotels performance and competitiveness is significantly dependent upon their
ability to satisfy customer efficiency and effectively. In the hotel industry the basic products
(rooms) are very similar, when comparing the same quality level the customer focuses are on
soft factor like personal treatment, personalization, one to one marketing and attention by the
hospitality professions. The hotel industry enjoys easy data access as the guests need to
register their name and address during check-in and in some countries, guests even need to
provide their passport data and more detailed private information. In addition, people are very
likely to share their personal preferences with hotel staff to make their stay more enjoyable.
The hotel can make use of this database combined with IT and give the guests a unique
experience. They can establish a close relationship with customers and meet their needs
perfectly. In order to be able to compete on a highly competitive market a hotel has to meet
every single customer’s needs and expectations. To do this it is important to understand the
aspects of business performance that persuade customers to become repeat purchasers and to
exhibit behavioral loyalty. (It costs five to ten times more to sell to a new customer than to an
old customer). To enhance profitability and guest satisfaction and loyalty, the organizations
(hotels) should focus on implementing Customer Relationship Management (CRM) strategies
that aim to seek, gather and store the right information, validate and share it throughout the
organization.
1.2 Customer Relationship Management
CRM model based upon customer-centric business philosophy and culture to support
effective marketing, sales, long term relationships and services process could be a lifesaver
for most business especially for hotel industry. CRM is about managing customer knowledge
to better understand and serve them. It is an umbrella concept that places the customer at the
centre of an organization. Customer service is an important component of CRM: however
CRM is also concerned with coordinating customer relations across all business functions,
points of interaction, and audiences. CRM can bring a lot of benefits for hotels such as
customer satisfaction and loyalty, increase in revenues, decrease in costs, and a sustainable
competitive advantage.
CRM involves the integration of technology and business processes used to satisfy
the needs of a customer. In terms of IT, CRM is defined as “an enterprise wide integration of
technologies and functions such as data warehouse, websites, intranet/ extranet, telephone
support system, accounting, sales, marketing and production”.

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CRM is an all-embracing approach and CRM as an IT term. CRM is an idea
regarding how a company can keep their most profitable customers by increasing the value of
interaction. The value is maximized through differentiation of the management of customer
relationships”. Another definition is formulated as follows, “basically, CRM is a notion
regarding how an organization can keep their most important customers and at the same time
reduce costs, increase the values of interaction to consequently maximize the profits”. CRM
can also be defined as “an information industry term for methodologies, software, and usually
internet capabilities that help an enterprise manage customer relationships in an organized
way” or be defined as “an all embracing approach, which seamlessly integrates sales,
customer service, marketing, field support and other functions that touch customers”. (Xu et
al, 2002)
1.3 History of CRM
The CRM term grew from the desire to combining the terms helpdesk, customer
support, ERP (Enterprise Resource Program) and data mining. It is not entirely cleared who
introduced the term to the business world but one can say that the term emerged from still
ongoing trial and error approaches.
In the beginning there was PIM, or Personal Information Manager- a limited use, all
purpose electronic diaries with basic database functionality, that you can use to start
organizing your names and addresses, and time amongst other things. The PIM slowly
morphed into the CMS, or Contact Management System, as a result of its increasing take on
by people in sales and marketing, incorporating a more specific set of requirements to help
them scale the pit.
Contact Management software became SFA, as in Sales Force Automation systems,
what now forms the cornerstone of modern CRM applications. CRM is short for Customer
Relationship Management, which is the industry term for the set of methodologies and tools
that help an enterprise manage customer relationships in an organized way.
The first CRM initiatives, launched in the early 1990s, focused mainly on call center
activities. Later, companies widened the focus to include sale and open additional channels.
CRM with requiring customer-centric business philosophy and culture to support effective
marketing, sales and service process can enable effective customer relationship, customer
satisfaction and customer loyalty. CRM has developed as an approach based on gain a 360-
degree view of the customer, having all the data from all touch points, maintaining positive
relationships with customers, increasing customer loyalty, and expanding customer lifetime

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value (Olsen, 1996). Understanding the needs of customers and offering value-added services
are recognized as factors that determine the success or failure of companies.
1.4 Benefits of CRM
The real value to the company lies in the value they create fir their customers and in
the value the customers delivers back to the company. Accordingly, it is important to mark
that the value does not lie in more information and in more advanced technology. The value
lies in the customer knowledge and how the company uses that knowledge to manage their
customer relationships. Knowledge is the sole of CRM. Unfortunately, few companies are
transforming the information to customer knowledge and therefore they miss the opportunity
to provide value to their customers. However, applied in the right way, CRM is the tool that
contributes to profit. If companies are transforming the customer data into knowledge and
then use that knowledge to build relationships it will create loyalty, followed by profits.
Companies can gain many benefits from CRM as given below:
1. Lower cost of recruiting customers- The cost of recruiting customers will decrease
since there are savings to be made on marketing, mailing, contact, follow-up, fulfillment,
services, and so on.
2. No need to recruit so many customers to preserve a steady volume of business- The
number of long-term customers will increase and consequently the need for recruiting
many new customers decreases.
3. Reduced costs of sales- The costs regarding selling are reduced owing to that existing
customers are usually more responsive. In addition, with better knowledge of channels
and distributors the relationships become more effective, as well as the costs for
marketing campaigns is reduced.
4. Higher customer profitability- The customer profitability will get higher since the
customer wallet-share increases, there is increase in up-selling, cross-selling and follow-
up sales, and more referrals comes with higher customer satisfaction among existing
customers.
5. Increased customer retention and loyalty- The customer retention increases since
customers stay longer, buy more and more frequently. The customer also takes the
initiatives, which increases the bounding relationship, and as a result the customer loyalty
increases as well.
6. Evaluation of customer profitability- The company will get to know which customers
are more profitable, the ones who never might become profitable, and which ones that
might be profitable in the future. This is very important since the key to success in any
business is to focus on acquiring customers who generate profit, and once you have found

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them, never let them go. All customers are not valuable; some may even pose danger to
business. This occurs when the customers use the company’s time, energy and resources
without generating enough business to make them worth the effort. (Mc Kim, 2002)
Hence, a company should perform CRM efforts where they will get the best possible
return, which means focusing on customers who already are or will become the company’s
most profitable customers.
1.5 Objectives of CRM in service industry
The services that an organization provides to their customers have an impact on the
customer’s perspective to an organization. The CRM objectives for service applications are
stated below:
1. Service should reduce costs and increase profitability- Create a profit center out of a
service organization using operational and customer information to reduce costs and
generate more revenues.
2. Service should improve service delivery- Create an efficient and effective service
business using integrated enterprise-wide information available in other front office and
ERP applications.
3. Service should help organizations to delight customers- Provide enhanced customer
care, service and customer information management across the organization to improve
customer satisfaction and loyalty.
4. Service should help organization to differentiate their product- Distinguish business
by offering services as a differentiator using multiple channel communications with
customers, full enterprise wide view of customer information.
1.6 4P’s of CRM in hotel industry
The CRM toolbox contains its own four P’s that are required for a successful CRM initiative
in any hotel company (Haley and Watson, 2003). These are profile, preference, precision and
property.
Profile
It is about capturing relevant information about the guests and their behavior, both observed
and reported, identifying the data elements to capture and retain represents a major tactical
decision in a hotel CRM initiative. Some of the key elements to consider in defining your
profile data include: multiple addresses and telephone numbers, payment methods, prior visit
history, some ranking measurement indicative of value to the brand, family composition,
comments, and correspondence history.

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Preferences
Preference data may be either observed or reported. One challenging thing about preferences
is that a single guest’s preferences vary according to the purpose of a given trip and the
destination. The vacationer’s preference for a room near the pool does not apply on a business
trip. The trick for the hotel is to identify what are the global preferences versus the local ones.
Precision
Precision of data input is crucial element for any CRM effort in any industry. The address and
comment fields should be scanned for accurate and standardized data input. It is almost
certain to find wild variations in abbreviations, addressing and formatting. The variation
cripples a CRM effort that attempts to match new stays with prior guest’s visits. It becomes
almost impossible for system to match the new records with the old one even if the difference
between the two records is very small. So the standardized data input is required to avoid
these variations.
Property
Many hotel enterprises use a third-party system or service as the heart if their CRM initiative.
Some of these systems are specific to the hospitality industry; others are modules of
horizontal CRM platforms from well-known vendors. Property Management Systems are
built to drive the operation, not perform detailed analyses or manage personalized
communications. In the hotel environment the measure of excellence in service is almost
comes down to a face-to-face interaction in the hotel with the guest. All the profiling and
preference capture in the world won’t help if a service delivery fails due to faulty or missing
information. As guest’s stay is completed, the stay details and any new master records must
get passed from the PMS to CRM platform. Likewise, scrubbed and summarized data must
get passed from the CRM system to the PMS to enhance service delivery and improve record
matching for the next transaction.
The four P’s described above is all tactical elements required for a successful CRM
initiative in any hotel company. However, there is a fifth element that overreaches all of the
others: management commitment to embracing CRM as a way of doing business, and thus
embracing the customer. Without deep and confirmed leadership, this kind of initiative will
go nowhere. Concerning about the level of commitment from the leadership of the enterprise,
and lack of confidence in the ability to drive effective change management, a company should
address those issues before funding and launching a CRM effort.

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1.7 Functional categories of CRM Technology
The CRM technology can be divided into three functional categories, operational CRM,
analytical CRM, and collaborative CRM.
Operational CRM
This category includes customer facing applications that integrate front, back and mobile
offices, with the purpose to increase the efficiency of customer interactions. This involves
automating business operations processes, such as order management, customer service,
marketing automation, sales-force automation, and field service. In order to succeed
employees must have the right skills and the company must have a customer centric focus.
Analytical CRM
This category involves applications that analyze customer data generated by operational tools.
The data is often stored in a data warehouse, which can be described as a large repository of
corporate data the data stored in data warehouse shall give the company information that will
allow them to provide value to their customers. Hence, it is crucial to capture the right data, a
process must be accomplished with great customer care and understanding.
Collaborative CRM
This category focuses on facilitating interaction between customers and companies. One-way
communication must be replaced by two-way communication, where the customer gets
involved early with issues affecting their future purchase behavior. In other words,
Collaborative CRM involves any CRM function that provides a point of interaction between
the customer and the supplier. For example, technologies such as electronic communication
are used to facilitate relevant, timely and personalized interaction with the customers.
1.8 Need for the study
Despite the extensive research on the implementation of CRM practices in the service
industry, there is lack of empirical studies on the implementation of the CRM practices in the
Hotel industry. It is a highly lucrative and flourishing market and a large number of players
are into this industry. Moreover, it is a very competitive market as well. Customers have been
more selective in terms of hygiene and facilities provided. To compete in such a market,
every hotelier should focus on maintaining good contacts with the customers and to satisfy
the customer to the fullest. The organized sector of the hotel industry has a good financial
support and resources available with them but the unorganized sector of the hotel industry
lacks all these advantages. Increasingly, organisations from different business sectors are

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using customer relationship management (CRM) systems to help boost sales and revenues.
Depending on the approach that they adopt in selecting and implementing such a solution,
they may have mixed results in terms of their sales and revenues.The present study will help
both the organized and unorganized sector to well understand the aspects of the CRM which
is to be adopted or changed by them to satisfy the customers. It will also help to check the
satisfaction level of the customers according to the CRM practices followed by thehoteliers.
The objectives of the study are as follow:
1. To study the Customer Relationship Management (CRM) practices followed
by selected Hotels in Ludhiana.
2. To study the customer satisfaction with respect to the Customer Relationship
Management practices followed by the selected Hotels.

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Chapter – II
Review of Literature
To emphasize the importance of undertaking the study, it is essential to present a brief
review of researches already undertaken. Only studies which have a direct or indirect bearing
on the present study have been reviewed in this chapter.
Reichheld and Sasser (1990) demonstrated across a variety of industries that profits
climb steeply when a company successfully lowers its customer defection rate. Based on an
analysis of more than 100 companies, in two dozen industries, these researchers found that
the firms could improve profits 25 percent to 85 percent by reducing customer defection by
just 5 percent.
Johnson et al (1995) developed and tested alternative models of market- level
expectations, perceived product performance, and customer satisfaction. Market performance
expectations are argued to be largely rational in nature yet adaptive to changing market
conditions. Customer satisfaction is conceptualized as a cumulative construct that is affected
by market expectations and performance perceptions in any given period and is affected by
past satisfaction from period to period.
Ennew and Binks (1996) examined the link between customer retention/defection and
service quality in the context of the U.K. banking sector and the bank’s relationships with
small business customers. They developed a framework for examining satisfaction and
retention and presented the result of some empirically research. They found support for the
hypothesis that loyalty/retention is influenced by service quality and customer relationships,
and they found that trust in the banking relationships has the largest impact on potential
defection.
Garbarino and Johnson (1999) analyzed the relationships of satisfaction, trust, and
commitment to compute satisfaction attitudes and future intention for the customer of a New
York company. For the low relational customers (individual ticket buyers and occasional
subscribers), overall satisfaction is the primary mediating between the component attitudes
and future intentions. For the relational customers (consistent subscribers), trust and
commitment, rather than satisfaction, are the mediators between component attitudes and
future intentions.
Kharbanda and Dasgupta (2001) emphasized on an increasing coverage of CRM, e-
Commerce and ERP systems on the net, it has become imperative for organization to achieve

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a totally different view of the customer to create their greater responsiveness and satisfaction.
Companies now extract previously unknown information about their customer from this
databank, collected over long duration of their operations, to better predict customer
requirements and trends. This insures better services for the customer needs. This is where
Data Mining practices create a lot of value for organization by extracting the required
information for the data stores. This study looks at the different applications designs and the
underlying technology for Data Mining applications, and also describes the different
architecture details of Data Mining application and the underlying processes that classify any
analytical process carried out on data collection as a Data Mining Process.
Parvatiyar and Sheth (2001) in their conceptual framework said that the two most
important process of Customer Relationship Management include proactive customer
business development and building partnering relationships with the most important
customer.
Shainesh (2001) described CRM as an enterprise wide initiative. According to him
CRM involves all areas and functions of the organization. It requires that all areas of the
organization to be working together in harmony towards the common goal of stronger
customer relationships. He also stated that CRM is different from traditional marketing. He
stressed that to retain customers, businesses need to customize their offerings by customizing
all elements of marketing mix. He also stated that the use of Information Technology is
imperative to bring about interaction between the customer and the organization.
Thomas (2001) emphasized that customer acquisition and retention both are
interdependent processes. He said that managers often made the customer relationship
management decisions based only on a data analysis of acquired customers. He also preset
modeling approach to estimate the length of a customer’s lifetime. Using this model, he
showed the financial impact of not accounting for the effect of acquisition on customer
retention. In addition to the model he also gave a methodology for linking customer retention.
He was of the opinion that analyzing customer retention is important for enhancing the
customer equity of the firm.
Wulf et al (2001) investigated and found that retailer-customer relationship has three
distinct intended contributions: (1) It shows that different relationship marketing tactics have
a differential impact on consumer perceptions of a retailer’s relationship investment; (2) it
demonstrates that perceived relationship investment affects relationship quality, ultimately
leading to behavioral loyalty; and (3) it reveals that the effect of perceived relationship
investment on relationship quality is contingent on a consumer’s product category
involvement and proneness to engage in retail relationships. They empirically cross-validate

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the underlying conception model by six consumer samples in a three country, transatlantic,
comparative survey that investigates two industries.
Chatterjee and Prasad (2002) addressed that the innovative way of doing business is by
focusing on customer orientation. They executed a project of engineering consultancy
industry in context of customer orientation. In their research, they concluded that the
businesses need to run with customer rather than after him. They also stated that there should
be deep commitment of employees towards customer concerns. Further, they said that the
concept of customer orientation should be key part of the overall business strategy. In their
study, they have given a framework for creating customer orientation. They have also said
that customer selectivity is very important in CRM.
Dash (2003) stressed that CRM that seeks to build, identify and maintain customer
network through interactive, individualized and value-added contents over a long period has
gained tremendous importance. He examined various aspects of marketing and practices of
Customer relations in Indian marketing context.
Reinartz and Kumar (2003) developed a framework that incorporates projected
profitability of consumers in the computation of life-time duration. Furthermore, they
identified factors under a manager’s control that explain the variation in the profitable lifetime
duration. They also compared other framework with the traditional methods such as the
recency, frequency, and monetary value framework and past customer value and illustrated
the superiority of the proposed framework. Finally, they develop several key implications that
can be of value to decision makers in managing customer relationships.
Rigby et al (2003) emphasized that while choosing a CRM technology, the
organization and processes must realign to fit the customer strategy. According to the authors,
tailoring the technology to the company's business processes and culture is just as important
as tailoring the business processes to the strategy.
Verhoef (2003) investigated the differential effects of customer relationship
perceptions and relationship marketing instruments on customer retention and customer share
development over time. Customer relationship perceptions are considered evaluations of
relationship strength and a supplier’s offering, and customer share development is the change
in customer share between two periods. The results show that affective commitment and
loyalty programs that provide economic incentives positively affect both customer and
customer share development, whereas direct mailings influence only customer share
development. However, the effect of these variables is rather small. The results also indicate

14
that firms can use the same strategies to affect both customer retention and customers share
development.
Bowman and Narayandas (2004) demonstrated how adaption and extension of the
Service-Profit Chain (SPC) to business markets can provide vendors with insights into the
process that culminates in individual customer management profitability and useful guidelines
for adapting their customer management efforts at the individual account level with an aim to
improve account profitability. The result showed the importance of accounting for decreasing
returns to customer management efforts at a given account reinforced the notion of customer
delight.
Reinartz et al (2004) conceptualized a construct of the CRM process and its
dimensions, operationalized and validated the construct, and empirically investigated the
organizational performance consequences of implementing CRM processes. Their research
questions are addressed in two cross-sectional studies across four different industries and
three countries. The first key outcome is a theoretically sound CRM process measure that
outlines three key stages: initiation, maintenance, and termination. The second key result is
that the implementation of CRM processes has a moderately positive association with both
perceptual and objective company performance.
Cao and Gruca (2005) stressed that adverse selection is an important problem for
marketers. To reduce the chances of acquiring an unprofitable customer, companies may
screen prospects who respond to marketing offers. Prospects who respond are often not
approved. At same time, prospects that are likely to be approved are unlikely to respond to a
given marketing offer. Using data from a firm’s customer relationship management system,
he showed how to target prospects that are likely to respond and to be approved. This
approach increases the number of customers who are approved and reduces the number of
applicants who defect after being turned. This method can be extended to new customer
acquisition and more effective targeting of costly promotions to migrate customers to higher
levels of lifetime value.
Lewis (2005) emphasized that the calculation of customer value without regard to
marketing policy is problematic because the value of managerial flexible and the impact of
consumer learning are neglected. He developed a structural dynamic programming model of
consumer demand that includes marketing variables and consumer expectations of
promotions. He used the estimated parameters to conduct policy experiments that yield more
accurate forecasts of customer value and to study the impact of alternative marketingpolicies.

15
Payne and Frow (2005) developed a conceptual framework for CRM that helps broaden
the understanding of CRM and its role in enhancing customer value and, as a result,
shareholder value. They explored definitional aspects of CRM and identified three alternative
perspectives of CRM. They emphasized the need for a cross-functional, process-oriented
approach that positions CRM at a strategic level. They identified five key cross-functional
CRM processes: a strategy development process, a value creation process, a multichannel
integration process, an information management process, and a performance assessment
process. They developed a new conceptual framework based on these processes and explored
the role and function of each element in the framework. The synthesis of the diverse concepts
within the literature on CRM and relationship marketing into a single, process-based
framework provides deeper insight into achieving success with CRM strategy and
implementation.
Ryals (2005) demonstrated that the implementation of CRM activities delivers greater
profits. Using calculations of the lifetime value of customers in two longitudinal case studies,
he found that customer management strategies change as more discovered about the value of
the customer. These changes lead to better firm performance. The contribution of this study is
to show that CRM works and that a relatively straightforward analysis of the value of the
customer can make a real difference.
Srinivasan and Moorman (2005) argued that a firm’s strategic commitments may be an
overlooked organizational factor that influences the rewards for a firm’s investments in CRM.
Using the context of online retailing, they considered the effects of two key strategic
commitments of online retailers on the performance effect of CRM: their bricks-and-mortar
experience and their online entry timing. They tested proposed model with a multimethod
approach that used manager ratings of firm CRM and strategic commitments and third-party
customer’s rating of satisfaction from 106 online retailers. The findings indicated that the
firms with moderate bricks-and-mortar experience are better able to leverage CRM into
superior customer satisfaction outcomes than firms either low or high bricks-and-mortar
experience. Likewise, firms with moderate online experience are better able to leverage CRM
into superior customer satisfaction outcomes than firms with low or high online experience.
These findings helped resolve disparate results about the value of CRM, and they established
the importance of examining CRM within the strategic context of the firm.
Sun et al (2006) discussed a two-step procedure comprising “adaptive learning” and
“proactive” Customer Relationship Management decisions. He also discussed three key
components for customer-centric Customer Relationship Management: adaptive learning,
forward looking and optimization. He formulated Customer Relationship Management

16
interventions as solutions to a stochastic dynamic programming problem under demand
uncertainty in which the company learns about the evolution of customer demand as well as
the dynamic effect of its marketing interventions.
Urbanskiene et al (2008) analysed client relation management system by disclosing the
role and place of relation marketing in formation of Customer Relationship Management
theoretical foundations. It reveal the support of customers and suppliers relationship based on
trust, cooperation, power distribution, communications, commitment, dependence and other
features as well as the development of customer’s loyalty.
Cailleux et al (2009) argued that luxury brands have so far been reluctant to adopt any
of the classical tools of mass marketing. One of these is customer relationship management
(CRM). Prestigious brands are, however, now starting to examine the benefits of the ‘lifelong
customer value’ approach, beyond building the social prestige of their names. The authors
examined why the luxury brands need to apply CRM systems and ‘what’ they could achieve
by doing so, and addresses ‘how’ this could be applied with the necessary adaptations if these
brands wish to keep their luxury status intact.
Ngai et al (2009) indicated that the area of customer retention received most research
attention. They related one-to-one marketing and loyalty program and also gave classification
and association model as the most commonly used models for data mining in Customer
Relationship Management. Their analysis facilitates knowledge accumulation and creation
concerning the application of data mining techniques in Customer Relationship Management.
Appiah and Kingsley (2010) stated that as the world economy becomes globalized,
competition has intensified and the differences in products have faded. Consequently,
businesses have become fixated on customer relationship management (CRM) as it has
become a central orienting point in academia and business environment with organizations
increasingly focusing on managing customer relationships as a strategic capability to achieve
market leadership and profits. In spite of the commercial significance of the concept, CRM
has been demonized by critics as a marketing or managerial fad destined to failure. This
article examines ways to improve the success and effectiveness of CRM through the
conceptualization of a framework known as CRM pyramid and to stimulate debate and
research on how to improve the success of the concept.
Dominici and Guzzo (2010) said that to be successful in the market it is not sufficient
to attract the new customers; managers must concentrate on existing customers implementing
effective policies of customer satisfaction and loyalty. In hotel industry customer satisfaction
is largely hooked upon quality of service. According to him a management approach focused

17
on customer satisfaction can improve customer loyalty, thus increasing the positive image of
the touristic destination. Hence, exploring the importance for customers of hotel attributed in
hotel selection is indispensable. The research on the topic of guest satisfaction, translates the
consideration of whether or not customers will return to a hotel or advice it to other tourists is
pivotal to success of the hospitality business. They performed a qualitative analysis of large
hotels in sicily and evaluated the overall customer satisfaction level for the hotel and for each
service supplied. They concluded by proposing improvement in customer satisfaction
management of the hotel.
A lot of work has been done relating to Customer Relationship Management, but much
review is not available to emphasize the implication of CRM and the customer satisfaction
with respect to Hotel Industry. The present research is an attempt in this direction.

18
Chapter - III
Research Methodology
This chapter describes in detail the methodology adopted for conducting study on the
Customer Relationship Management (CRM) practices followed by the Hotels in Ludhiana.
The chapter has been divided into following heads.
3.1 Research Design
3.2 Population
3.3 Sample design
3.4 Method of data collection
3.5 Data Analysis
3.6 Limitations of the study
These sections are discussed below.
3.1 Research design
A research design was formulated which guided the collection and analysis of data.
Exploratory research design was followed and survey was carried out with the help of
structured non-disguised questionnaire.
3.2 Population
The population for the first objective consisted of all the Hotels of Ludhiana. As
Ludhiana is an important industrial town and business hub and is developing at a fast
pace, a number of hotels are coming up in the city. Thus the study was restricted to Ludhiana
city. The population for the second objective consisted of all the customers of the selected
Hotels.
3.3 Sample design
A list of Hotels was taken from the Hotel and Restaurant Association of Ludhiana.
From the list, the hotels were categorised into two categories i.e. high/medium tariff category
hotels and low tariff category hotels based on the single room tariff. A sample of 10 hotels
were selected from the list of hotels on the basis of single room tariff, five hotels each from
high/ medium tariff and low tariff category based on random sampling. Five hotels selected

19
from high/medium tariff from the list obtained were Majestic Park Plaza, Hotel Mahal,
Nagpal Regency, Friends Regency and Dhodha Regency. Five hotels selected from low tariff
on the basis of random sampling from the list obtained were Novena Hotel, Vikrant Hotel,
Hallmark regency, Dyal Palace and Shampion-2000 Hotel. The managers of these hotels were
contacted and interviewed. Further, 15 customers from each of these hotels were contacted on
basis of convenient sampling, making a total of 150 customers.
3.4 Method of data collection
For fulfilling both the objectives, hotel managers and their customers were
interviewed. The primary data was collected with the help of structured, non-disguised
questionnaire. In order to satisfy both the objectives, two separate questionnaires were
prepared. The questionnaire was designed on the basis of the Customer Relationship
Marketing Model, given in figure 3.1 (Dash, 2003).
For the first objective, the data was collected with the help of structured non
disguised questionnaire from the managers/owners of the selected hotels. Questions were
asked relating to CRM practices like customer need assessment and acquisition, customer
development through personalization and customization, customer retention, new customer
referrals and benefits from CRM approach, etc.
A separate questionnaire was prepared for the second objective and 15 customers of
each hotel, total 150 customers, were contacted from the database provided by the hotels on
convenience sampling basis. The data was collected from these customers using a structured
non disguised questionnaire. Questions were asked relating to satisfaction with respect to
CRM practices followed by the hotels.
The secondary sources were in the form of journals, books, magazines and relevant
websites. Secondary data has been used wherever necessary to improve the understanding of
the concepts of CRM.
3.5 Data analysis
After collection of data, master tables were constructed which facilitated
tabulation of data in desired form and analysis of collected data was done by constructing
suitable tables and using percentage methods. Other statistical techniques used include mean
scores, single mean t-test, two mean t-test and two mean Z-tests. The questionnaire contained
closed-ended, multiple choice and ranking questions. Attitude and satisfaction were measured
on a five-point scale.

20
INPUT PROCESSING UNIT OUTPUT
Fig. 1: Customer Relationship Marketing Model
Mean score was calculated for the questions asked on a 5-point Likert scale. In case
of five-point scale, the respondents were asked to indicate their degree of satisfaction. The
scales ranged from strongly agree to strongly disagree and the scores given were as follows:
1 – Strongly disagree
2 – Disagree
3 – Neutral
4 – Agree
5 – Strongly agree
Another scale was used which ranged from great extent to least extent and the scores were
given as follows:
1-Least extent
2-Less extent
Customers need
Assessment &
Acquisition
Customer Development
through personalization &
customization
Customer Retention
& Referral New
Customers
Addition of value with
product & service
Contact &
Involvement
Intimacy & One to one
relationship
Price offers
Special facilities/
Services
Information sharing
Relationship Marketing
Commitment
Recognition
Respect
Reward
Reciprocation
Transparency
Share values
High customer
satisfaction
Increased market
share
High customer
loyalty
High customer
retention index
Life time customer

21
3-Neutral
4-Some extent
5-Great extent
Frequencies were multiplied with their respective weights and aggregate values were
found. Mean scores were found out using the following formula:
5
Mean Score = ∑( wi * fn) / n
i=1
i = 1 to 5
Where,
wi = weight attached for degree of agreement or satisfaction.
fn = associated frequency
n (10) = number of respondents in case of managers/owners
n (150)= number of respondents in case of customers
If the mean score was more than the middle point of the scale it was concluded that
respondents buy and largely tend to be satisfied with the statement or hold important the
attribute.
For the comparison between the mean of selected samples of customers from
high/medium tariff hotels and low tariff hotels, Z-test was applied. The value of Z was
calculated as follows:
Where,

22
= weighted mean score of sample 1
= weighted mean score of sample 2
S.E. = standard error
1= standard deviation of sample 1
2= standard deviation of sample 2
N1= number of respondents of sample 1
N2= number of respondents of sample 2
For the comparison between the mean obtained from managers of selected samples of
high/medium tariff hotels and low tariff hotels, t-test was applied. The value of t was
calculated as follows:
Where,
= mean of first sample
= mean of second sample
N1= number of observations in the first sample
N2= number of observations in the second sample
S= combined standard deviation
The value of S has been calculated by the following formula:
The degree of freedom = (n1 + n2 – 2)
3.5 Limitation of the study
Any study based on customer survey through a pre-designed questionnaire suffers from
the basic limitation of the possibility of difference between what is recorded and what is

23
truth, no matter how carefully the questionnaire has been designed and field
investigation has been conducted. This is because the consumer may not deliberately report
their true preferences and even if they want to do so, there are bound to be difference owing
to problems in filters of communication process. The error has been tried to be minimized by
conducting interviews, even though the research followed from following limitations:
1. The managers may not deliberately report their true attitude towards the CRM
practices followed by their companies and even if they do so, there are bound to be
differences owing to problem in filters of communication process.
2. Only ten hotels were chosen, large number could have added more
extensiveness to this research.
3. The study was to be completed in a short time thus the time
constraint reduces the extensiveness of the research.
4. The unsupportive attitude of the respondents while responding to some of the
questions requiring qualitative information may have affected the final results and
outcomes.
5. The scope of study was limited to Ludhiana only.

24
Chapter - IV
Results and Discussions
This chapter includes the analysis of the primary data collected from the
owners/managers and respondents in order to study the Customer Relationship Management
practices followed by the hotel industry in Ludhiana and the customer satisfaction with
respect to the Customer Relationship Management practices on the customers provided by the
hoteliers in Ludhiana. The chapter has been divided into four sections. The first section
presents the profile of the hotels. The second section presents the views of the
managers/owners regarding the Customer Relationship Management practices. The third
section presents the level of customer satisfaction with respect to the Customer Relationship
Management practices followed by the hotels in Ludhiana city. The fourth section presents
the discussion.
4.1 Profile of Hotel
In this section the information about the profile of the hotels is recorded. The
information given below is regarding year of establishment, number of hotels in the chain,
any other business belonging and single room tariff of the hotels.
Table 1: Profile of Hotels
Parameters Number of
respondents
(n=10)
Percentage Name
Year of establishment
Before 1990 2 20% Dhodha Regency, Novena Hotel
1990-95 3 30% Majestic Park Plaza, Dyal Palace, Vikrant Hotel
1995-2000 2 20% Hallmark Regency, Shampion-2000
2000-05 3 30% Hotel Mahal, Nagpal Regency, Friends Regency
After 2005 0 0%
Number of hotels
1 9 90% All hotels except Hotel Mahal
2 0 0%
3 1 10% Hotel Mahal
4 0 0%
>5 0 0%

25
Other business
holding
Yes
No
8
2
80%
20%
All hotels except Hotel Mahal and Hallmark
Regency
Hotel Mahal, Hallmark Regency
Single room tariff
<1000 5 50% All low tariff hotels
1000-2000 3 30% Dhodha Regency, Friends Regency, Nagpal
2000-3000 1 10% Regency
3000-4500 1 10% Hotel Mahal
>4500 0 0% Majestic Park Plaza
Table 1 show that 90% of the hotels have only one hotel in their business except
Hotel Mahal that has three hotels in India. Also 80% of the hoteliers are involved in other
business holdings too. The single room tariff for all the low tariff category of hotels is below
Rs. 1000 and in high/medium tariff category hotels it is 30% between 1000-2000 and 10 %
between 2000-3000 and 3000-4500 each.
4.2 CRM practices of Hotels
This section contains the information about the CRM practices followed by the
selected hotels in the Ludhiana city.
4.2.1 Awareness about CRM
Now a day’s CRM is a very important tool which is used by several business groups
for the maintenance of the customer base and the progress of the industry. So in this section
the awareness of the CRM among various Hotels in Ludhiana is given below.
Table 2: Awareness of hotel mangers about CRM
Awareness High/medium tariff
hotel (n=5)
Low tariff hotel
(n=5)
No. of respondents
(n=10)
Yes 5 5 10
No 0 0 0
Total 5 5 10

26
In the Table 2 the awareness among the hotel mangers regarding CRM is very good.
All the respondents were aware about the CRM practices.
4.2.2 Opinion toward CRM approach
In this section the opinions of the hotel managers/owners towards the CRM approach
is given below. The respondents were asked to rate the statements on the scale from 1 to 5
where 1 states for strongly disagree and 5 states for strongly agree.
Table 3: Opinion of managers toward CRM approach
Statement Mean Score Overall
mean
score
(n=10)
T-value p- value
High/
medium
tariff (n=5)
Low
tariff
(n=5)
It expands the customer base 5 4.4 4.7 2.45 0.07
It increases the longitivity of
customer relationship
4 4.6 4.3 2.45 0.07
It reduces the rate of
customer defection
4.6 3.8 4.2 1.79 0.12
It helps in increasing the
number of profitable
customers
3.8 3.8 3.8 0.00 1.00
It helps in easy introduction
of new product/services
4.4 3 3.7 3.50* 0.008*
It enhances the potential
worth of individual customers
in terms of their lifetime
value to company
3.4 3.8 3.6 0.89 0.40
It offers better value to
customer’s money by
constantly improving the
quality of services offered to
them
3.8 3.2 3.5 1.41 0.21
It benefits customer
selectivity approach
3.8 3.2 3.5 1.41 0.21
*Significant at 5% level of significance (t=2.56)

27
In Table 3 managers opinion towards CRM approach was that “it expands the
customer database” the most. For high/medium tariff category hotels the mean score was
highest for “it expands customer database” (=5). For the same category the next highest mean
scores was for “it reduces the rate of customer defection” (=4.6), “it helps in easy introduction
of new product/service” (=4.4) and for “it increases the longitivity of customer relationship”
(=4.0). The lowest mean score in the same category was for “it enhances the potential worth
of individual customer in terms of their lifetime value to the company” (3.4). For low tariff
category hotels the mean score was highest for “it increases the longitivity of customer
relationship” (=4.6). For the same category the next highest mean scores was for “it expands
customer database” (=4.4), “it reduces the rate of customer defection” (=3.8), “it helps in
increasing the number of profitable customers” (=3.8) and for “it enhances the potential worth
of individual customer in terms of their lifetime value to the company” (3.8). The lowest
mean score in the same category was for “it helps in easy introduction of new
product/service” (=3.0).
On the overall basis the overall mean score is highest for “it expands the customer
database” (=4.7). The next highest mean scores was for “it increases the longitivity of
customer relationship” (=4.3), “it reduces the rate of customer defection” (=4.2) and for “it
helps in increasing the number of profitable customers” (=3.8). The lowest mean score on the
overall basis was for “it benefits customer selectivity approach” (=3.5) and “it offers better
value to customer’s money by constantly improving the quality of services offered to them”
(3.5).
The t values were calculated and tested at 5% level of significance. In the above table
only one statement “it helps in easy introduction of new product/services” is found to be
significant i.e. whose value was more than 2.56. This means that there is minor difference of
opinion in the high/medium tariff and low tariff hotels.
4.2.3 Activities undertaken for customer need assessment
It is very important to work according to the customer and to know the needs of
the customers. For this the data is recorded to know the activities followed by the hotels for
the customers need assessment.

28
Table 4: Activities undertaken by hotels for customer need assessment
Statement High/ medium
tariff (n=5)
Low tariff (n=5) Total (n=10)
No. of respondents
(%)
No. of respondents
(%)
No. of respondents
(%)
Study existing
customer database
5 (100%) 5 (100%) 10 (100%)
Personal counseling 5 (100%) 3 (60%) 8 (80%)
Survey of
competitors
customer’s
3 (60%) 0 (0%) 3 (30%)
Survey of existing
customers
1 (20%) 1 (20%) 2 (20%)
Survey of potential
customers
1 (20%) 0 (0%) 1 (10%)
*Multiple choice responses
Analysis of Table 4 shows that in high/medium tariff hotels “study existing customer
database” and “personal counseling” both contributes 100% towards the activities undertaken
by the hotels for customer need assessment and “survey of competitor’s customers” is done
by 60% of the hotels. In low tariff hotels, all hotels adopt “study of existing customer
database”, 60% of the hotels believe in going for “personal counseling” for the evaluations of
customer need assessment. On overall basis i.e. in both the high/medium tariff hotels and low
tariff hotels the best method of customer need assessment is the “study of existing customer
database” as this is the method that is adopted by all the hotels.
4.2.4 Activities undertaken for acquiring customers
Once the needs of the customers are known it is equally important to use that
information for acquiring the customers. So the data is collected by the hotel
managers/owners to know what are the activities undertaken by them for the acquisition of
the customers. The respondents were asked to rate the statements over a scale from 1 to 5
where 1 states for least extent and 5 states for great extent.

29
Table 5: Activities undertaken for acquiring customers
mean
score
(n=10)
t- value p- value
High/
medium
tariff
(n=5)
Low
tariff
(n=5)
Maintain Contact and
involvement
4.6 4.4 4.5 0.58 0.58
Maintain intimacy 4.4 3 3.7 3.5* 0.008*
Information Sharing 4 3.4 3.7 2.45 0.07
Addition of value with product
or service
4 3 3.5 2.24 0.06
Providing special facilities/
Services
3.6 2.6 3.1 2.89* 0.02*
In Table 5 the activity undertaken by hotels for acquiring customers was to “maintain
contact and involvement” the most. For high/medium tariff category hotels the mean score
was highest for “maintain contact and involvement” (=4.6). For the same category the next
highest mean scores was for “maintain intimacy” (=4.4), and for “information sharing”
(=4.0). The lowest mean score in the same category was for “providing special
facilities/services” (3.6). For low tariff category hotels the mean score is highest for “maintain
contact and involvement” (=4.4). For the same category the next highest mean scores was for
“information sharing” (=3.4), and for “maintain intimacy” (3.0). The lowest mean score in the
same category was for “providing special facilities/services” (=2.6).
On the overall basis the overall mean score is highest for “maintain contact and
involvement” (=4.5). The next highest mean scores was for “maintain intimacy” (=3.7), and
for “information sharing” (=3.7). The lowest mean score on the overall basis was for
“providing special facilities/services” (=3.1).
only two statements “maintain intimacy” and “providing special facilities/services” were
found to be significant i.e. whose value was more than 2.56. This means that there is minor
difference of opinion in the high/medium tariff and low tariff hotels.

30
4.2.5 Activities undertaken for customer development through personalization and
customization
In this section the information is collected about the activities undertaken by the
hotels for customer development through personalization and customization. The respondents
were asked to rate the statements on the scale from 1 to 5 where 1 states for least extent and 5
states for great extent.
Table 6: Activities undertaken for customer development through personalization and
customization
mean
score
(n=10)
t-value p- value
High/ medium
tariff (n=5)
Low tariff
(n=5)
One to One Relationship
Marketing
4.4 4.4 4.4 0.00 1.00
Commitment towards providing
better services to customers
4.6 3.6 4.1 2.89* 0.02*
Give personal recognition to
customers
4 3.6 3.8 1.00 0.35
Transparency about company’s
policies and procedures
3.8 3.8 3.8 0.00 1.00
Reciprocation 3.8 3.2 3.5 2.12 0.07
Give rewards to customers 3.6 2.8 3.2 1.79 0.12
In Table 6 the activity undertaken by hotels for acquiring customers was to “one to
one relationship” the most. For high/medium tariff category hotels the mean score was
highest for “commitment towards providing better services to customers” (=4.6). For the
same category the next highest mean scores was for “one to one relationship” (=4.4), and for
“give personal recognition to customers” (=4.0). The lowest mean score in the same category
was for “give rewards to customers” (3.6). For low tariff category hotels the mean score is
highest for “one to one relationship” (=4.4). For the same category the next highest mean
scores was for “transparency about company’s policies and procedures” (=3.8), and for
“commitment towards providing better services to customers” (3.6). The lowest mean score in
the same category was for “providing special facilities/services” (=2.8).

31
On the overall basis the overall mean score is highest for “one to one relationship”
(=4.4). The next highest mean scores was for “commitment towards providing better services
to customers” (=4.1), and for “give personal recognition to customers” (=3.8). The lowest
mean score on the overall basis was for “providing special facilities/services” (=3.2).
only one statement “commitment towards providing better services to customers” was found
to be significant i.e. some values were more than 2.56. This means that there is minor
difference of opinion in the high/medium tariff and low tariff hotels.
4.2.6 Opinion towards activities relating to customer retention
Once we know the needs of the customers and the customer has been acquired, it is
very important to retain the customer for the future as it is known that it takes double the cost
to acquire new customer than the old one. So here, the information is collected about the
views of the hotel managers/owners upon the activities that result in customer retention. The
respondents were asked to rate the statements on the scale from 1 to 5 where 1 states for
strongly disagree and 5 states for strongly agree.
Table 7: Opinion of managers towards activities undertaken for customer retention
mean
score
(n=10)
t- value p- value
High/
medium tariff
(n=5)
Low
tariff
(n=5)
Customer complaint handling in an
effective manner
5.0 5.0 5.0 1.00 0.38
Membership of the hotel 4.8 4.6 4.7 0.63 0.55
Effective room service 4.6 4.6 4.6 0.00 1.00
Soft behavior of staff/personnel 4.6 4.4 4.5 0.58 0.58
Customized services 4.0 4.6 4.3 1.50 0.17
Sending wishes on various occasions 3.8 4.0 3.9 0.55 0.61
Special greet by the hotel
management
3.8 3.8 3.8 0.00 1.00
Accepting cancellation of
reservation by the hotel
4 3.6 3.8 1.00 0.35

32
In Table 7 the opinion of managers for activity undertaken by hotels for customer
retention was “customer complaint handling in an effective manner” the most. For
high/medium tariff category hotels the mean score was highest for “customer complaint
handling in an effective manner” (=5.0). For the same category the next highest mean scores
was for “membership if hotel” (=4.8), “effective room service” (=4.6) and for “soft behavior
of staff/personnel” (=4.6). The lowest mean score in the same category was for “special greet
by the hotel management” (3.8) and “sending wishes on various occasions” (=3.8). For low
tariff category hotels the mean score is highest for “customer complaint handling in an
effective manner” (=5.0). For the same category the next highest mean scores was for
“customized services” (=4.6), “effective room service” (=4.6) and for “membership of the
hotel” (4.6). The lowest mean score in the same category was for “accepting cancellation of
reservation by the hotel” (=3.6).
On the overall basis the overall mean score is highest for “customer complaint
handling in an effective manner” (=5.0). The next highest mean scores was for “membership
of the hotel” (=4.7), and for “effective room service” (=4.6). The lowest mean score on the
overall basis was for “accepting cancellation of reservation by the hotel” (=3.8) and “special
greet by the hotel management” (=3.8).
no statement was found insignificant i.e. no statement has value more than 2.56. This means
that there is no difference of opinion in the high/medium tariff and low tariff hotels.
4.2.7 Activities undertaken for customer retention
In this section the information is recorded about the activities undertaken by the
hotels for the purpose of customer retention.
Table 8 shows that several activities were undertaken by the hotels for the customer
retention. According to the table above three activities “Greeting the customer and paying
them due respect”, “Participating in a two-way communication, listening and recording the
customer problem” and “Provision of customer service and complaint desk” are followed by
all the hotels for the customer retention. “Talking in terms favorable to customers” is an
activity followed by 90% of the hotels and “attending customers properly” is followed by
80% of the hotels. The least followed activities were “Sending cards/wishes on special
occasions like Birthday and Anniversary” (=30%) and “Membership for the regular customers
and business houses” (=30%).

33
Table 8: Activities undertaken for customer retention
Statement High/ medium
tariff (n=5)
No.
respondents (%)
of No.
respondents (%)
of No.
respondents (%)
of
Greeting the customer
and paying them due
respect
5 (100%) 5 (100%) 10 (100%)
Provision of customer
service and complaint
desk
5 (100%) 5 (100%) 10 (100%)
Participating in a two-
way communication,
listening and recording
the customer problem
5 (100%) 5 (100%) 10 (100%)
Talking in terms
favorable to customers
5 (100%) 4 (80%) 9 (90%)
Attending
promptly
customers 5 (100%) 3 (60%) 8 (80%)
Providing
services
customers
customized
to the
3 (60%) 1 (20%) 4 (40%)
Membership for the
regular customers and
business houses
3 (60%) 0 (0%) 3 (30%)
Sending cards/wishes
on special occasions
like Birthday and
Anniversary
3 (60%) 0 (0%) 3 (30%)

34
4.2.8 Benefits obtained from CRM approach
In this section the information regarding the benefits obtained from the
implementation of the CRM approach is recorded. The respondents were asked to rate the
statements on the scale from 1 to 5 where 1 states for strongly disagree and 5 states for
strongly agree.
Table 9: Benefits obtained from CRM approach
mean
score
(n=10)
t- value p- value
High/
medium
tariff
(n=5)
Low
tariff
(n=5)
Increases customer satisfaction 4.4 3.6 4 2.31 0.05
Increased customer loyalty 4 3.4 3.7 1.50 0.17
Profitability increases 3.8 3.6 3.7 0.63 0.55
Increases market share 3.8 3.2 3.5 1.41 0.21
Enhances lifetime value of
customers
3.6 3 3.3 1.50 0.17
In Table 9 the maximum benefit obtained from CRM approach was “increased
customer satisfaction”. For high/medium tariff category hotels the mean score was highest for
“increases customer satisfaction” (=4.4). For the same category the next highest mean score
was for “increased customer loyalty” (=4.0). The lowest mean score in the same category was
for “enhances lifetime value of customers” (3.6). For low tariff category hotels the mean
score is highest for “increases customer satisfaction” (=3.6) and for profitability increases
(=3.6). The lowest mean score in the same category was for “enhances lifetime value of
customers” (=3.0).
On the overall basis the overall mean score was highest for “increases customer
satisfaction” (=4.0). The next highest mean scores was for “increased customer loyalty”
(=3.7), and for “profitability increases” (=3.7). The lowest mean score on the overall basis
was for “enhances lifetime value of customers” (=3.3).
no statement was found insignificant i.e. no statement has value more than 2.56. This means
that there is no difference of opinion in the high/medium tariff and low tariff hotels.

35
4.2.9 Information maintained about customers
It is very important to maintain the proper information about the customers and in the
hotel industry it is even a compulsion from the Government of India to maintain the records
of people visiting the hotel. So managers were asked about what kind of information about
the customers is recorded by the hotels in Ludhiana city.
Table 10: Information maintained about customers by the Hotels
Information
customers
of High/ medium
tariff (n=5)
No. of
respondents (%)
No.
respondents (%)
of No.
respondents (%)
of
Information about
customer and his
dwelling
5 (100%) 5 (100%) 10 (100%)
Information about
customer’s attitude
towards the hotel
staff and offerings
5 (100%) 1 (20%) 6 (60%)
Database about
customer’s lifestyle
and likes/dislikes
3 (60%) 0 (0%) 3 (30%)
Information about
change in
customer’s interest
1 (20%) 0 (0%) 1 (10%)
Table 10 shows that overall, all the hotels maintain the information about customer
and his dwelling and 60% of hotels also maintain information about customer’s attitude
towards the hotel staff and offerings. In case of high/medium tariff hotels also the information
about the customer’s attitude towards the hotel staff and offerings (100%) is maintained but in
low tariff hotels only 20% of respondents maintain information.

36
4.2.10 Methods for handling the complaint
Handling the customer complaints is very important in the service industry as it
results in customer satisfaction. Here the information about the complaint handling by the
hotels is recorded.
Table 11: Methods for handling the complaint
Methods High/ medium
tariff (n=5)
No. of respondents
(%)
No. of respondents
(%)
No. of respondents
(%)
Personal counseling 5 (100%) 5 (100%) 10 (100%)
Through complaint box 2 (40%) 3 (60%) 5 (50%)
Through phone 5 (100%) 2 (40%) 7 (70%)
Through direct mail 3 (60%) 0 (0%) 3 (30%)
Through intranet 0 (0%) 0 (0%) 0 (0%)
In the Table 11 the responses were collected about the methods used by the hoteliers
for the handling of the customer complaints. It was found that all the hotels carry out personal
counseling to handle the customer complaints in both the high/medium tariff hotels and in
low tariff hotels. The other method of handling customer complaint in high /medium tariff
hotel is through phone that again comes out to be 5(100%) which means it is the technique
used by all the high/medium tariff hotels and in case of low tariff hotels it is through
complaint box (60%). The least used method is intranet (0%) which is not used by any of the
hotel to handle the customer complaint.
4.3 Customer Satisfaction with respect to the CRM practices followed by the Hotels
In this section the responses were collected on various parameters to check their level
of satisfaction with respect to the practices followed by the various hotels in the Ludhiana
city.
4.3.1 Demographic profile of customer
In this the demographic profile of the customers is given below. It consists of the
information regarding the occupation, age group, family income and the gender of the
customers.

37
Table 12: Demographic profile of customers
Parameters High/ medium
tariff (n=75)
No. of respondents
(%)
No. of
respondents (%)
No. of respondents
(%)
Occupation
Business 36 (48%) 14 (19%) 50 (33%)
Salaried 11 (15%) 40 (53%)
51 (34%)
Professional 24 (32%) 12 (16%)
Others 4 (5%) 9 (12%) 36 (24%)
13 (9%)
Family income per annum
(Rs. In Lacs)
<2 0 (0%) 29 (39%) 29 (19%)
2-5 19 (25%) 37 (49%)
56 (37%)
5-10 17 (23%) 9 (12%)
>10 39 (52%) 0 (0%) 26 (17%)
39 (26%)
Age
<20 0 (0%) 4 (5%) 4 (3%)
21-30 8 (11%) 16 (21%)
24 (16%)
31-40 36 (48%) 32 (43%)
41-50 28 (37%) 17 (23%) 68 (45%)
>50 3 (4%) 6 (8%)
45 (30%)
9 (6%)
Gender
Male 51 (68%) 59 (79%) 110 (73%)
Female 24 (32%) 16 (21%)
40 (27%)

38
Table 12 shows that 48% of respondents in high/medium tariff hotels are
businessman and 32% are professionals and 53% of respondents in low tariff hotels are from
salaried class. Majority of respondents in high/medium tariff hotels belong to more than 10
lakh income groups and in low tariff hotels majority of the respondents belong to 2-5 lakh
income categories. The age group of the respondents in both the categories was almost same
(48% and 43% respectively) and belonged to the 31-40 age groups. Majority of the
respondents in both the group were males (68% in high/medium tariff hotels and 79% in low
tariff hotels).
4.3.2 Awareness of customers about CRM
In this section the awareness of the CRM among respondents in Ludhiana is given
below.
Table 13: Awareness of customers about CRM
Awareness High/medium tariff
hotel (n=75)
Low tariff hotel
(n=75)
No. of respondents
Yes 73 (97%) 35 (47%) 108 (72%)
No 2 (3%) 40 (53%) 42 (28%)
Total 75 (100%) 75 (100%) 150 (100%)
In the Table 13 the awareness among the customers regarding CRM is quiet nice. 108
respondents’ (72%) of the total respondents have knowledge about CRM. Further customers
of high/medium tariff hotel have more awareness (97%).
4.3.3 Satisfaction with CRM practices followed by hotels
In this section the satisfaction of the respondents with respect to the CRM practices
followed by the hoteliers in Ludhiana city is checked. The respondents were asked to rate the
statement over a scale from 1 to 5 where 1 stands for strongly disagree and 5 stands for
strongly agree.

39
Table 14: Satisfaction with CRM practices followed by hotels
mean
score
(n=150)
Z- value p- value
High/
medium
tariff
(n=75)
Low
tariff
(n=75)
Quick response to calls 4.3 4.0 4.2 3.23* 0.001*
Having membership of hotel
encourages customer to stay in
that hotel
4.4 3.7 4.0
5.40* 0*
Staff/Personnel appropriate
behavior
4.1 3.6 3.9 4.47*
0*
Attending customer complaints 4.0 3.7 3.9 2.09* 0.037*
Meeting the requests of guests
with in suitable time
4.2 3.6 3.9 4.84*
0*
Receiving a complimentary
juice/tea as a refreshment at
the time of check-in
4.0 3.8 3.9 1.16
0.246
Paying the bills by credit cards 4.2 3.5 3.9 4.62* 0*
Advertising about discounts and
special prices of each season
4.2 3.5 3.9
4.94*
0*
Providing customized services at
the time of check-in and during
stay
3.8 3.9 3.8 0.50
0.618
The hotel should have a user
friendly website
3.8 3.7 3.7 1.081
0.28
Offering city tour to interested
customers
3.8 3.5 3.7 3.24*
0.001*
Filling out the feedback form via
internet provides more
convenience
3.8 3.6 3.7
0.93
0.352

40
24 hours online reservation 3.8 3.5 3.7 2.61*
0.009*
Accepting cancellation of
reservation by the hotel is of
special importance
4.0 3.4 3.7
3.25*
0.001*
Reservation via internet
increases the probability of
hotel selection
3.8 3.4 3.6
3.16*
0.002*
Having baby sitter service is
necessary for the hotel
4.0 3.2 3.6 4.33*
0*
Access to hotel information via
internet
3.6 3.5 3.6 1.19
0.235
Sending welcome note from
hotel management to rooms
3.6 3.3 3.5
2.38
0.02
Applying special services like
film/music on demand
3.5 3.5 3.5 0.62
0.54
Seeing a personal welcome
message on room’s TV after
checking in
3.5 3.4 3.4
0.66
0.51
Internet services in room 3.4 3.5 3.4 0.12
0.90
Access to room service via
intranet
3.3 3.5 3.4 1.03
0.31
Sending wishes for new year,
birthday and wedding
anniversary results in more
satisfaction
3.7 3.1 3.4
3.69*
0.00*
*Significant at 5% level of significance (Z=1.96)
In Table 14 customer satisfaction with respect to the CRM practices was measured
and it was found that “quick response to calls” and “membership of the hotel” is major factors

41
that result in customer satisfaction. For high/medium tariff category hotels the mean score
was highest for “having membership of hotel encourages customer to stay in that hotel”
(=4.4). For the same category the next highest mean score was for “quick response to calls”
(=4.3), “meeting the requests of guests with in suitable time” (=4.2) and for “paying bills by
credit cards” (=4.2). The lowest mean score in the same category was for “access to room
service via intranet” (=3.3). For low tariff category hotels the mean score was highest for
“quick response to calls” (=4.0). For the same category the next highest mean scores was for
“providing customized services at the time of check-in and during stay” (=3.9), “attending
customer complaints” (=3.7), and for “the hotel should have a user-friendly website” (3.7).
The lowest mean score in the same category was for “sending wishes for new year, birthday
and wedding anniversary results in more satisfaction” (=3.1). This means that there is a major
difference in the customer satisfaction with respect to CRM in the high/medium tariff and low
tariff hotels. The Z values were calculated and tested at 5% level of significance. In the above
table many statements were found to be significant i.e. whose values were more than 1.96.
On the overall basis the overall mean score is highest for “quick response to calls”
(=4.2). The next highest mean scores was for “having membership of hotel encourages
customer to stay in that hotel” (=4.0), “it reduces the rate of customer defection” (=4.2) and
for “staff/Personnel appropriate behaviour”, “attending customer complaints”, “meeting the
requests of guests with in suitable time”, “receiving a complimentary juice/tea as a
refreshment at the time of check-in”, and “paying the bills by credit cards” each (=3.9). The
lowest mean score on the overall basis was for “seeing a personal welcome message on
room’s TV after checking in”, “internet services in room”, “access to room service via
intranet” and “sending wishes for new year, birthday and wedding anniversary results in more
satisfaction” each (=3.4).
4.3.4 Opinion about the benefits of CRM
In this section the opinion of respondents (customers) was recorded for the benefits of
CRM. Again, the customers were asked to rate the statement over a scale from 1 to 5 where 1
stands for strongly disagree and 5 stands for strongly agree.
In Table 15, according to customers the maximum benefit obtained from CRM
approach was “increased customer satisfaction”. For high/medium tariff category hotels the
mean score was highest for “increases customer satisfaction” (=4.1) and for “increased market
share” (=4.1). For the same category the next highest mean score was for “profitability
increases” (=3.9) and for “enhances lifetime value of customers” (3.6). The lowest mean
score in the same category was for “increased customer loyalty” (=3.8). For low tariff
category hotels the mean score is highest for “increases customer satisfaction” (=4.5). The

42
lowest mean score in the same category was for “increases market share” (=4.0) and for
“profitability increases” (=4.0). This means that there is no difference of opinion in the
high/medium tariff and low tariff hotels. The Z values were calculated and tested at 5% level
of significance. In the above table no statement was found insignificant i.e. no statement has
value more than 1.96.
On the overall basis the overall mean score was highest for “increases customer
satisfaction” (=4.2). The next highest mean scores was for “increases market share” (=4.1).
Rest all the statements were found to have the same overall mean score of (=4.0).
Table 15: Opinion about the benefits of CRM
mean
score
(n=150)
Z- value p- value
High/
medium
tariff
(n=75)
Low
tariff
(n=75)
Increases customer satisfaction 4.1 4.5 4.2 1.684 0.23
Increases market share 4.1 4.0 4.1 1.389 0.22
Increased customer loyalty 3.8 4.1 4.0 1.435 0.07
Profitability increases 3.9 4.0 4.0 1.273 0.15
Enhances lifetime value of
customers
3.9 4.1 4.0 1.744
0.06
*Significant at 5% level if significance (Z=1.96)
4.3.5 Services necessary during Business Trip
In this section the customer’s requirements for various services to be availed were
identified when they are on a business trip.
Table 16: Services necessary during Business Trip
Services High/medium Tariff
(n=75)
Low Tariff (n=75) Total (n=150)
Direct line of
phone
65 (87%) 70 (93%) 135 (90%)
Internet 46 (61%) 36 (48%) 82 (55%)
Xerox machine 21 (28%) 35 (47%) 56 (37%)
Fax 30 (40%) 21 (28%) 51 (34%)

43
Answering phone 14 (19%) 16 (21%) 30 (20%)
Office equipments 13 (17%) 9 (12%) 22 (15%)
Laptop 4 (5%) 3 (4%) 7 (5%)
In Table 16, the services that the customers prefer the most when they are on the
business trip were “direct line of the phone”. For high/medium tariff category hotels the
percentage was highest for “direct line of phone” (87%). For the same category the next
highest percentage was for “internet service” (61%), “fax services” (40%) and for “Xerox
machine” (28%). The lowest percentage in the same category was for “laptop” i.e. (5%). For
low tariff category hotels the percentage was highest for “direct line of phone” (93%). The
lowest percentage in the same category was for “internet” (48%) and for “Xerox machine”
(47%). On the overall basis the overall percentage was highest for “direct line of phone”
(90%). The next highest percentage was for “internet” (55%), “Xerox machine” (37%) and
for “fax services” (34%). The lowest percentage on the overall basis was found for the
“laptop” i.e. just (5%).
4.3.6 Channels preferred for interaction
This section contains the information about the channels preferred by the customers
for an interaction between the hotels and customers.
Table 17: Channels preferred for interaction by customers
Channels High/medium Tariff
(n=75)
SMS 40 (53%) 56 (75%) 96 (64%)
E-mail 33 (44%) 32 (43%) 65 (43%)
Telephone 26 (35%) 30 (40%) 56 (37%)
Receiving Letters 24 (32%) 23 (31%) 47 (31%)
In Table 17, the channel preferred by customers the most was “SMS”. For
high/medium tariff category hotels the percentage was highest for “SMS” (53%). For the
same category the next highest percentage was for “e-mail” (44%). The lowest percentage in
the same category was for “receiving letters” (32%). For low tariff category hotels the
percentage was highest for “SMS” (75%). The lowest percentage in the same category was
for “receiving letters” (31%). On the overall basis the overall percentage was highest for

44
“SMS” (64%). The next highest percentage was for “e-mail” (43%). The lowest percentage
on the overall basis was found for the “receiving letters” (37%).
4.3.7 Technique used for reservation
This section contains the information about the techniques used by the customers for
the purpose of reservation in the hotels.
Table 18: Technique used for reservation by the customer
Technique High/medium Tariff
(n=75)
No Reservation 46 (63%) 53 (71%) 99 (66%)
Travel Agency 9 (12%) 14 (17%) 23 (15%)
Phone 14 (19%) 5 (7%) 19 (13%)
Any Other 5 (7%) 4 (5%) 9 (6%)
Internet 0 (0%) 0 (0%) 0 (0%)
Total 75 (100%) 75 (100%) 150 (100%)
In Table 18, the technique used for reservation by the customers the most was “via
phone” but in most of the cases (66%) “No reservation was done by the customers”. For
high/medium tariff category hotels the percentage was highest for “no reservation” (63%).
Other than that for the same category the next highest percentage was for “via phone” (19%)
and “Travel agency” (12%). The lowest percentage in the same category was for “internet”
(0%). For low tariff category hotels the percentage was highest for “no reservation” (71%).
For the same category the next highest percentage was for “Travel agency” (17%). The lowest
percentage in the same category was for “other means like friends, relatives etc” (5%) and
“internet” (0%). On the overall basis the overall percentage was highest for “no reservation”
(66%). The next highest percentage was for “travel agency” (15%) and “via phone” (13%).
The lowest percentage for reservation on the overall basis was found for the “internet” (0%).
Any other includes with the help of family/ friends, through company agents etc.
4.3.8 Reference of Hotel
This section contains the information about the reference of the hotel given by the
customers to other people.

45
Table 19: Reference of Hotel by the customers
Referrals High/medium Tariff (n=75) Low Tariff (n=75) Total (n=150)
No Referrals 22 (29%) 48 (64%) 70 (47%)
Relatives 30 (40%) 16 (21%) 46 (31%)
Friends 26 (35%) 10 (13%) 36 (24%)
Business
Associates
17 (23%) 13 (17%) 30 (20%)
In Table 19, the no reference of the hotel was given by the customers. For
high/medium tariff category hotels the percentage was highest for “relatives” (40%). For the
same category the next highest percentage was for “references to friends” (35%) and “no
referrals” (29%). The lowest percentage in the same category was for “business associates”
(23%). For low tariff category hotels the percentage was highest for “no referrals” (64%). For
the same category the next highest percentage was for “relatives” (21%). The lowest
percentage in the same category was for “business associates and friends” (17% and 13%)
and “internet” (0%). On the overall basis the overall percentage was highest for “no
reservation” (66%). The next highest percentage was for “travel agency” (15%) and “via
phone” (13%). The lowest percentage for reservation on the overall basis was found for the
“internet” (0%).
4.3.9 Problems faced and complaint handling
This section contains the information about the number of customers who faced the
problems during their stay in the hotel and how the complaint was handled by the hotel
management. This section consists of both the objective and subjective information.
Table 20: Problems faced by the customers and its complaint handling
Customers faced problem High/medium tariff
hotels
Low tariff hotels Total respondents
Yes 12 (16%) 7 (9%) 19 (13%)
No 63 (84%) 68 (91%) 131 (87%)
Total 75 (100%) 75 (100%) 150 (100%)
In Table 20 many of the customers did not face any problem during their stay in the
hotel. In high/medium tariff hotel category only 16% of the total high/medium tariff hotel

46
category customers faced the problem and complaint about it to the hotel management. In low
tariff hotel category only 9% of the total low tariff hotel category customers faced the
problem and complaint about it to the hotel management. In total only 13% of the customers
faced problems during their stay in the hotel and 87% customers did not faced any problem
and did not complained about anything during their stay in the hotel.
4.3.10 Future Intentions regarding staying in the same Hotel
This section contains the information regarding the future intentions of the customers
for the stay in the same hotel in the future.
Table 21: Future Intention of the customer for staying in the same hotel
Customers will stay High/medium tariff
hotels
Low tariff hotels Total
respondents
Yes 58 (77%) 71 (95%) 129 (86%)
No 17 (23%) 4 (5%) 21 (14%)
Total 75 (100%) 75 (100%) 150 (100%)
In Table 21 it was recorded that most of the customers approached the same hotel for
staying in future. In high/medium tariff hotel category, 77% of the customers agreed up on
staying in the same hotel and in low tariff hotel category, 95% of the customers wanted to
stay in the same hotel in future. On overall basis, 86% of the customers responded that they
will stay in the same hotel if it is required in the future.
4.4 Discussion
This section briefly discusses the inferences from the above three sections. The
responses of hotel owners/managers and other respondents were tabulated and results were
analyzed. The opinion of hotel managers towards CRM approach and the satisfaction of
customers with respect to the CRM were studied.
Out of the total sample of the hotels 90% of the hotels were aware about the CRM
approach. Also 72% of the total sample of customers was aware about the CRM approach. All
the managers have the opinion that CRM approach helps in increasing the customer database
and gave it the maximum mean score of 5. Also in all the hotels the study of the existing
customer database is done to assess the needs of the customers. For acquiring the customers
the hoteliers goes for maintaining contact and involvement with the customer and thus rate it
with the mean score of 4.5. For the purpose of customer retention customer complaint

47
handling in an efficient manner was done by all the hotels and they ranked it most important
by giving it a mean score of 5. Also all the hotels maintain the basic information of the
customer along with his dwelling information.
The total sample of customers consists of 73% of males and 27% of females. Most of
the customers were salaried and between the age group of 31-40. According to the customers
the best way to achieve customer satisfaction is to respond quickly to the calls and the
membership of the hotel. For customers the major benefit of CRM approach is that it
increases the customer satisfaction and thus it got the mean score of 4.2. Also it was recorded
that 64% of customers think that the best method of interaction with the customer for the
advertisement is through SMS. From the above responses it is seen that 87% of the customers
did not faced any problem during their stay in the hotel and 86% of the customers prefer to
come back to the hotel for stay in the future.

48
Chapter - V
Summary
In this chapter a brief summary and conclusion of the study have been presented, so
as to understand the implications of the findings. This chapter gives the final conclusion of
the study.
CRM model based upon customer-centric business philosophy and culture to support
effective marketing, sales, long term relationships and services process could be a lifesaver
for most business especially for hotel industry. CRM is about managing customer knowledge
to better understand and serve them. It is an umbrella concept that places the customer at the
centre of an organization. Customer service is an important component of CRM: however
CRM is also concerned with coordinating customer relations across all business functions,
points of interaction, and audiences. CRM can bring a lot of benefits for hotels such as
customer satisfaction and loyalty, increase in revenues, decrease in costs, and a sustainable
competitive advantage.
CRM is an all-embracing approach and CRM as an IT term. CRM is an idea
regarding how a company can keep their most profitable customers by increasing the value of
interaction. The value is maximized through differentiation of the management of customer
relationships”. Another definition is formulated as follows, “basically, CRM is a notion
regarding how an organization can keep their most important customers and at the same time
reduce costs, increase the values of interaction to consequently maximize the profits”. CRM
can also be defined as “an information industry term for methodologies, software, and usually
internet capabilities that help an enterprise manage customer relationships in an organized
way” or be defined as “an all embracing approach, which seamlessly integrates sales,
customer service, marketing, field support and other functions that touch customers”.
The hotel industry enjoys easy data access as the guests need to register their name
and address during check-in and in some countries, guests even need to provide their passport
data and more detailed private information. In addition, people are very likely to share their
personal preferences with hotel staff to make their stay more enjoyable. The hotel can make
use of this database combined with IT and give the guests a unique experience. They can
establish a close relationship with customers and meet their needs perfectly. In order to be
able to compete on a highly competitive market a hotel has to meet every single customer’s
needs and expectations. To do this it is important to understand the aspects of business

A Study Of Customer Relationship Management (CRM) Practices Followed By The Hotel Industry In LUDHIANA

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