Profitable Hotel Guest Management: The Factors Involved in and the Importance of Following a Guest Relationship Approach in the Irish Luxury Hotel Sector

Profitable Hotel Guest Management: The Factors Involved in and the Importance of Following a Guest Relationship Approach in the Irish Luxury Hotel Sector

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Inhaltsangabe:Introduction: Most literature on marketing contains an exhaustive discussion on the topic of relationship marketing and this concept is now well understood by every marketer. However, valuing customer relationships is usually viewed more vaguely as being a general, desirable and virtuous factor. Like many fields in marketing, there has been a failure to justify adopting such an approach based also on its inherent financial control measures. In this increasingly globalised marketplace (the hospitality sector), it can strike as odd that scholars and researchers have overlooked the differences in CRM handling that exist among different cultures. The aim of this dissertation is to make a contribution to closing the gap between marketing and management perspectives in terms of customer profitability, especially in the luxury hotel sector with regard to their international customer/guest base. The gap is to identify by the management and accounting which customers are profitable and to translate these insights into marketing activities. Companies can control their customer relationships and make sophisticated decisions about which customer relationships should be finished and which are worth retaining, a practice known as Customer Equity. The objectives of this work include: - Identify how investment in customer retention create a Return on Investment. - Allocating marketing spending ratios for long-term profitability. - Identify the methods that managers can use to create customer loyalty. - Explain the links between customer loyalty, customer equity and relationship marketing. - Estimate the role of quality factors within service delivery and after-sales service as above and how they affect customer retention. - Identify the effect of after-sales service as above quality on customers expectations and its impact on customer satisfaction. CRM outline is seen by some as an extended database containing useful information about customers that could be used to help extend sales, while others see it as a tool specifically designed for use on a (one-to-one) basis with each of their customers (Peppers and Rogers, 1999). To implement CRM successfully the TQM, HRM and IT management need to ensure organisational alignment (Reinartz et al., 2004). Building on this statement, Buttle (2004) spells out that: CRM needs to be established in three layers: companywide, factional and customer facing . Inhaltsverzeichnis:Table of Contents: of Figuresviii ii. Index of tablesix Abbreviationix A.Preamble11 1.Introduction11 1.1. Industry Rationale12 1.2. Outline and Methodology14 B. Literature Review15 2. Objectives of the CRM approach15 3. The development of Customer Relationship Management15 4. The forms of CRM16 4.1. Types of Operational CRM17 4.2. Types of Analytical CRM18 4.3. Communicative CRM19 4.4. Review of Types in CRM and collaborative CRM20 5. Perspectives on the Supplier and Customer Relationships21 5.1. The role and need for loyal relationships in a commercial context21 5.2. The meaning of the relationship factor from the hotel perspective23 5.3. The meaning of the relationship factor from the guest/ client perspective23 6. Development of Information Technology26 6.1. CRM Databases and Database Marketing:27 7. The need of segmentation in CRM28 7.1. Benefit segmentation29 7.2. Calculation method and techniques of customer value31 7.2.1. Calculative models31 Calculative method I: Lost-for-Good Model (Jackson, 1985)32 Calculative method II: Customer lifetime valuation by Dywer (1989)33 Calculative method III: Customer lifetime model and its application by Berger and Nasr34 Calculative method IV: Resource allocation model34 Limitations of the calculative methods36 Activity-Based Costing/ ABC analysis in CRM36 8. Hotel marketing and best practices37 8.1. Social Media and CRM in the Hotel sector38 9. Service Environment in the Hospitality Industry39 9.1. Internal Marketing40 9.2. Complaint Management and Service recovery42 C. Methodology chapter43 10. Empirical Research and techniques43 10.1. Research Question:43 10.2. Research Problem Area:43 10.3. Research Objectives:43 10.3.1. General Objectives:43 10.3.2. Specific Objectives43 10.3.3. Research Hypothesis43 10.4. Significance of the research44 10.5. Empirical Research45 10.6. Research Methodology and Methods45 10.7. Approaches to Research46 10.8. Approach to Primary Research47 10.9. Data collection method(s):48 10.10. Quantitative Research and Qualitative Research48 10.11. In-depth Interviews qualitative research49 10.11.1. In-depth interview guide49 10.11.2. Logistics of the Interview51 10.11.3. Language and Conversation51 10.12. Questionnaire Quantitative research52 10.13. Producing the online survey53 10.14. Eliminating problems by pre-testing54 10.15. Research Population and Sampling54 10.16. Ethical Issues55 10.17. Limitations of the research56 10.18. Analysis and coding57 D. Empirical Research in Execution58 11. Analysis58 12. Conclusion and Recommendation83 E. Empirical Research and Hindsight85 13. Learning styles85 13.1. Reflection on learning85 13.2. Learning outcomes87 13.3. Writing style87 13.4. Project and time management87 13.5. Qualitative and quantitative research88 13.6. Data analysis88 14. Bibliography90 15. Appendix110 Appendix ISummary of all parties in the Population110 Appendix II 117 Appendix IIIThe meaning of relationships117 Appendix IVRecency, Frequency and Monetary Value Method / (RFM) Method118 Textprobe:Text Sample: Kapitel 7.1, Benefit segmentation: Companies generally divide by geographic, demographic, socio-economic, and psychological characteristics to segment the market, although these are not efficient predictors of future purchasing behaviour (Singh and Minhas, 1996). Singh and Minhas (1996) assert that: To correct this shortcoming, benefit segmentation by factor analysis has been used for the first time to group building society customers in relation to their particular attitudes and behaviour . However, one of the most challenging issues in CRH is for hospitality managers to understand the behaviour of their guests (Reid and Bojanic, 2010). In other words, a market segment should be identifiable, meaning that it can be targeted (with products, services or market offerings); measurable, in terms of size or attractiveness; accessible and able to be served with various stimuli and/or marketing (Rizal, 2003). The focus needs to be on why the guest wants a service, and not, for example, who buys it, as in a demographic variable (Zineldin, 2000). Benefit segmentation can be used in collaboration with several other closely related segmentation bases (Weinstein, 2004). The strongest argument, however, for implementing and using benefit segmentation is based on cause-and-effect factors rather than descriptive factors (Botschen et al., 1999). Yet, as simple as this approach appears, scholars like Hoek et al. (1996) believe that: Despite sophisticated approaches to market segmentation, the selection of variables on which such studies are based involves subjective judgments . Furthermore, the initial choice of variables is in itself a categorisation of data that has no quantitative guidelines and which reflects the marketer s judgments in relation to the segmentation (Everitt, 1974). The limitations of this method can resemble those found in lifestyle and psychographic segmentation and the related research (Weinstein, 2004). In the international context, the differences between collective and individual cultures can complicate this method as well (Agarwal, et al., 2010). Although benefit segmentation may appear to be suitable within the context of one culture, if one attempts to apply it to an international scenario involving multiple cultures, different values can distort the validity of the study (de Mooij, 2003). These limitations include the lack of a theoretical foundation, lack of cross-cultural validity and shortcomings in its ability to predict behaviour. The derivation of so-called basic lifestyle dimensions is unclear as well (Grunert and BrunsAc, 1993). However, benefit segmentation has led to valuable insights into tourism and hospitality research in the past. Nevertheless, careful development of the benefit statements used as the segmentation base, informed choice of the timing, regular conducting of benefit segmentation studies to account for market dynamics, and conducting them separately for different seasons, are all factors for improvement (Frochot and Morrison, 2000). In addition, researchers using consumption benefits as a segmentation basis must determine which benefits to measure and select appropriate means of assessing their relative importance to respondents (Fuller et al., 2005). Benefit segmentation has been noted as being better at predicting and explaining behaviour than other measures, which merely describe it, such as personality and lifestyles, volumetric, demographic or geographical measures (Loker and Perdue, 1992). The focus should be on those customers who are able and willing to influence the customer value and the overall profit the most. Therefore, customers are categorised by their customer value. Benefit segmentation encompasses the whole of the customer base and can easily be adjusted to individual sectors and organisations. By utilising and identifying segments based on their importance, a hotel is able to treat guests differently and to optimise and tailor the marketing and sales budget (Grunert and BrunsAc, 1993). A hotel needs to question relationships that appear to be unprofitable or minimally profitable in terms of trade-off between revenue, cost and net profit. The so-called jay - customers , refer to dysfunctional guests who deliberately or unintentionally disrupt service in a manner that negatively affects the organisation or other hotel guests (Lovelook, 1994). Calantone and Johar (1984) point out that: Attempts to segment the travel and hospitality market by showing how different factors influenced choice in different seasons. Results showed that benefits sought for each season differ, and people seeking a combination of benefits during one season may not be the same people seeking the same benefits during another season . 7.2, Calculation method and techniques of customer value: What s a customer worth? The company that can answer this question precisely is the company with an edge in the customer-based, technology- and information-intensive economy of today. But how can an asset as intangible as customer value be measured? (Blattberg et al., 2001) A key concept in CRM is a good measurement process (Payne and Frow, 2005). Venkatesan and Kumar (2004) note that: Customer Lifetime Value (CLV) is rapidly gaining acceptance as a metric to acquire, grow, and retain the right customers in CRM. In order to enforce the customer lifetime value approach, the actual value of a customer to a particular hotel needs to be identified. The higher the value of a customer, the higher the disbursement in marketing towards that customer. There is a double significance to the practice of assessing customer value: On the one hand it contributes to corporate success and on the other hand it helps identify the investment-worthiness in terms of the desired provision. While traditional marketing budgeting is based on periodical measures over more or less arbitrarily decided lengths of time, it is often used in managerial accounting. The CLV is a measure based on investment theory. It estimates the financial worth of a customer for the entire lifetime of the relationship (Bruhn et al., 1998, p.183). A hotel needs to bear in mind that different forms of customers exist. Many hotels sell their contingent of rooms to business clients, to private customers or to resellers. The different guest categories feature a range of customer characteristics which need to be considered in order to drive customer equity and loyalty (Osenton, 2002, p.21). 7.2.1, Calculative models: This CLV method finds its roots in management accounting and views CLV as a business ratio of in- and outgoing payments. The business ratio can be calculated by adding together the income from expected business relationships, and subtracting the expected costs (Heidemann et al., 2008). The expected relationship can also be translated into the retention rate. The retention rate is the calculated probability that an individual customer will become and remain loyal to a hotel, based on previous spending behaviour (Dwyer, 1997). Overview: The following four calculative models are based on a deterministic approach. The pioneer model is Jackson s (1985), which laid the calculative foundation for later models to emerge. The second model is by Dwyer (1989), who illustrated the calculation of CLV for both customer retention and a migration situation. Berger and Nasr (1998 and 2001) presented five mathematical models of the CLV (four of them involving customer retention and the fifth involving customer migration) and launched a statistical programme model for the CLV to help managers decide on optimal distribution of the promotion budget. Blattberg and Deighton (1996) offered a mathematical model of the CLV by using an infinite horizon to help managers decide the optimal balance between customer acquisition spending and customer retention spending.Complaint Management and Service recovery Service recovery is one of the most important CRM tasks for hotels (Lo, Stahlcup and Lee, 2010). ... Service recovery actions can be taken that may repair all or some of the damage donea€. Gilly ... Complaint management is an important tool of Total Quality Management (e.g. ISO 9000) and Customer Retention and ... Parasuraman (2006) confirms the arise of a€second-order benefits (e.g. positive word of mouth and repeat purchase) fromanbsp;...

Title:Profitable Hotel Guest Management: The Factors Involved in and the Importance of Following a Guest Relationship Approach in the Irish Luxury Hotel Sector
Author: Malte Kempen
Publisher:Bachelor + Master Publication - 2012-07-01

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