Critical Issues in Hospitality Assignment Sample

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Critical issues in
hospitality

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“Customer relationship marketing (CRM) is an effective way to increase customer loyalty in the
hospitality industry. Discuss?”
Customer relationship marketing (CRM) is the most recent and effective way to develop
customer retention as developing good relationships with the customers have become the most
important part of hospitality industry as customer is the most important asset for this industry
(Bai, 2011). Relationship marketing is very distinct from management discipline as the
hospitality industry has completely shifted its focus from increasing revenues and market share
to maintaining customers as assets by using both marketing and non-marketing resources. Over
here various ways to increase the efficiency of the whole hospitality industry with reference to
gaining customer loyalty will be discussed. The relevance of various marketing strategies will be
seen and the ways in which they help in building customer’s trust in a product will be evaluated
so that promise of better delivery of services can be kept (Malefyt, 2009).
According to Little (2003) CRM is basically a business approach where the client
relationship with clients, customer loyalty and brand value are fabricated through preparation of
marketing strategies and designing of business activities. The impact of relationship marketing is
very high on customer loyalty especially in hospitality industry where luxury and comfort is
highly needed as to maintain regular outflow of customers (Littler, 2003). As said by Brink
(2009) the key relationship practices which are supposed to be followed in hospitality industry
are commitment, conflict handling, communication, trust and relational bonds on the loyalty
which customers share with the business. These practices have a great and significant positive
impact on developing the brand as well as customer loyalty (Brink, 2009).
Customer loyalty is the most dominant factor which decides the success of a business in
long run. Brandi (2001) also said that loyalty is derived out of the level of satisfaction and the
company’s image which the customers have or develops in their minds before they approach and
become loyal to a particular brand (Brandi, 2001). Thus customer’s loyalty is directly related to
the hospitality industry as a whole. Customers are looking for better and comfortable services
which can give them the best of the deals to make out the right value for their money. But at
present there are different service providers which have increased the option to make choices

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from all the available competitors and select the one which gives better services than the other
(Pelloni, 2004). The businesses which together make this industry work out are multi star hotels,
restaurants and food chains, travel and tour operators, escorts and guides and many other service
providers. When all of these factors work together to provide the satisfaction which a customer
expects from a business tends to develop brand loyalty and brand awareness for a business to be
renowned and known in the minds of the customer. These factors certainly will make the
organization to be the first choice of the travellers and will intend to bring in more and regular
visitors (Huddleston, 2000). Thus it can be also seen that consumers these days are more brand
aware and seek maximum satisfaction to get value of their money.
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Thorough closeness with the customers in maintained on the commercial basis by
recording and keeping their data recorded on electronic memories and follow up is done with
them. In casual marketing, the data base over here captures data and makes marketing programs
suiting the individual’s need. They are extremely tough to create because the firms can hardly
track the individual customers’ need and decide the marketing practices on the same level
(Baron, 2010). In technological marketing, various IT tools are used to serve relationship
building opportunities and use all other IT sources to communicate with the customers and

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develop the ways to make the service firm’s image strong in the minds of people. On the other
hand, referral marketing helps in developing marketing plans and implementation of the same
depending upon the referrals and also to stimulate the same (Arasli, 2007). The impact of same
may take time to get visible but will help in developing long term conflict free relationship with
the customers. Similarly live-in marketing is a alternative of marketing and advertising in which
the target consumers are allowed to enjoy the hospitality services in relaxed atmosphere which
will ultimately help in developing a non-invasive advertising (Egan, 2008).
The ways of building effective customer relationship are many which can help in getting
more of the support from customers. Hospitality industry should come out with such a marketing
plan which may help in getting more of the customer’s involvement, for instance, firs can hold
special get together, contests, events and gathering with their guests so that they can make their
stays in hotel or travel experience enjoyable (Caemmerer, 2009). This will definitely help in
building and strengthening customer relationships and will also help in building community
within the business. The work is not done by conducting such events just once, rather frequency
of the same does matter. Firms should regularly communicate with their customers so as to make
them feel valuable. Although the frequency should not be too high as this may start irritating the
customers (Waeraas, 2009).
Duffy (2003) clearly says that trust is the glue which holds the customers and maintains
relationship. Trust can be developed only by letting customers know what a business does and
whether it maintains transparency in its business operations and provides valuable and authentic
services. Thus the expectations should be met to build great customer relationships. Businesses
can publish regular newsletters on monthly basis and can provide a customer’s corner where they
can give their feedbacks and suggestions which they would recommend to be fluffed in the
business and the hospitality service they have experienced (Duffy, 2003). The brand promotion
and awareness among the mass needs to be spread and communicated through marketing
channels in the ways in which customers can understand. Whether it is a new or a well-
established business, it is very important to promote the business in the most convenient
language which can be understood by all especially in the region where marketing and promotion
is undertaken (Strydom, 2001). In further paragraph, the various segmentation of loyalty will let

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know the ways in which firms can focus on the consumer groups according to any of the
business segments.
Customer loyalty can basically be divided into four general segments namely- no loyalty,
inertia loyalty, latent loyalty and premium loyalty. These loyalty criteria are defined on the basis
of different consumer behaviour and their preferences of brands and services working in
hospitality industry. So every business must considerably learn to earn and keep its customers
loyal to ensure its long success in the market place (Steinberg, 2011). First comes no loyalty
segment where customers do not have or share any attachment with the business because they do
not expect much and do not make any severe effort to look for the best among the available
options. For example, if a person going to any country or destination just for the fact of paying
homage at any sacred place for a day or two, he won’t bother about the hotels or restaurants he
will stay or eat rather will only focus towards completion of his purpose of travelling (Sisay,
2009). Unlike types of CRM, there are different types of customer loyalty as well which designs
the base form for the whole relationship marketing processes.
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There are many factors which influence customer’s loyalty in hospitality and develop
commitment towards the product or services being provided. As per the factors defined by Yoo
(2011) the most important one among all is core offering which includes factors such as location

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and premises, types of services and products which the company sells (Yoo, 2011). These
elements play larger role in building customer loyalty as attractive locations and services are the
key seller of business and people make their primary travel and stay choice by looking at the
infrastructure only. Next comes the satisfaction level which is indeed essential for every business
to fulfil. According to a marketing survey, it has been found out that 90% of the people make the
choice of the same place and services if they feel satisfied with the same (Malefyt, 2009). Thus it
is clear that elements of market place such as opportunity to switch and inertia loyalty tend to
form the key factors in loyalty development. If the number of suppliers is high, it provides more
flexibility to the customer to switch, so more time and effort needs to be invested to make the
business create a significant effect on the minds of people and they turn to become brand loyal
(Kayaman, 2007).
Share of wallet can be one of the key factors for business’ success if the customers
become completely loyal. Totally loyal and satisfied customer will give the firm or business his
100% share of money they spend in the sector. This retaining such customer is far more
important rather than looking for creating or acquiring new customers (Caemmerer, 2009). Thus
customer relationship marketing tends to for customer become loyal to a brand and develops an
emotional link with that particular organization.
CRM has a direct and most impactful link with the customer’s loyalty. One of the facts
behind saying the same is that today the customer is more informed and furnished with
knowledge which a business can’t imagine. This has shown a drastic shift in consumer power
and has forced to bring alterations in the ways in which business has to work to enhance its
selling. Today, relationship marketing has become a wider and diversified dimension which has
been further supported by different modes and channels of marketing and those may directly help
in building strong customer loyalty (Guenzi, 2004). According to Foss (2001) the various
methods available to share strong brand loyalty can be through social media, e-mails, loyalty
programs, customer services and many more. The bottom line is that all these marketing factors
directly contribute to gain more and strong loyal consumer base. No matter how strong the
management of the firm is, it needs to be pushed by well-furnished customer services which is an
essential part of marketing and it also helps in developing loyal customer base as they feel

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completely satisfied by the services so provided (Foss, 2001). One of the cases taken by Chen
(2000) saying that a customer has booked a hotel for his wedding programs, he would require a
regular assistance for making different arrangements, at this time the relationship marketing
comes into force where the marketing department of the hotel can provide different discounts
and nominal charges for providing services and make arrangements to make the celebration
grand with less of customer’s worry and botheration. This will definitely make the person feel
satisfied and become loyal and also may suggest his family and peers to undertake future
celebration at the same place (Chen, 2000).
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REFERENCES
Baron, S., Conway, T. and Warnaby, G., 2010. Relationship Marketing: A Consumer Experience
Approach. SAGE Publications Ltd.
Brink, A. And Berndt, A., 2009. Relationship Marketing and Customer Relationship
Management. Juta and Company Ltd .
Caemmerer, B., 2009. The planning and implementation of integrated marketing
communications. Marketing Intelligence & Planning. 17(4). pp.524 – 538.
Chen, S. and Huddleston, P., 2000. A comparison of four strategies to promote fair trade
products International Journal of Retail & Distribution Management. 37(4). pp.336 – 345.
Duffy, L. D., 2003. Internal and external factors which affect customer loyalty. Journal of
Consumer Marketing. 20(5). pp.480 – 485.
Egan, J. And Harker, M., 2008. Relationship marketing. The University of California.
Foss, b. and Stone, M., 2001. Successful Customer Relationship Marketing: New Thinking, New
Strategies, New Tools for Getting Closer to Your Customers. Kogan Page Publisher .
Guenzi, P. and Pelloni, O., 2004. The impact of interpersonal relationships on customer
satisfaction and loyalty to the service provider. International Journal of Service Industry
Management. 15(4). pp.365 – 384.
Kandampully, J. and Suhartanto, D., 2000. Customer loyalty in the hotel industry: the role of
customer satisfaction and image. International Journal of Contemporary Hospitality
Management. 12(6). pp.346 – 351.
Brandi, J., 2001. Building Customer Loyalty: The 21 essential elements...in action. The Walk The
Talk Comapny.
Kayaman, R. and Arasli, H., 2007. Customer based brand equity: evidence from the hotel
industry. Emerald Group Publishing Limited.
Kotler, P., 2008. Marketing Principles. Pearson Education India.
Little, A. And Marandi, E., 2003. Relationship marketing Management. Cengage Learning
EMEA.
Malefyt, W. D. T., 2009. Understanding the Rise of Consumer Ethnography: Branding Techno
methodologies in the New Economy. American Anthropologist. 111(2), pp.201-210.

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BIBLIOGRAPHY
<http://www.mindtools.com/pages/article/newSTR_94.htm>.
<http://www.marketingdonut.co.uk/marketing/marketing-strategy>.
<http://www.tandfonline.com/doi/abs/10.1080/19368623.2012.660564?journalCode=whmm20#.
Up60XcQW3cg>.
<http://www.techopedia.com/definition/23326/customer-relationship-marketing-crm>.
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Critical Issues in Hospitality Assignment Sample

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