Maintaining Relationships in Marketing - Essay Example

MAINTAINING RELATIONSHIPS IN MARKETING: A CRITICAL REVIEW College ment and Background to Research Problem This research study would critically analyze the ways by which relationships are maintained through marketing. Generally, this strategy is referred to as Customer Relationship Management or simply, CRM. Customer relationship management (CRM) can be defined as “a set of practices that provide a consolidated, integrated view of customers across all business areas to ensure that each customer receives the highest level of service” (Collins, 2006). It is usually mediated by a set of information technologies that often aims to help in the creation of two-way exchanges with customers in order to possess an intimate knowledge of their needs, wants and buying patterns. Peter, Olson and Grunert (1999) defined CRM as “a comprehensive strategy and process of acquiring, retaining and partnering with selective customers to create superior value for the company and the customer”. According to them, CRM involves the integration of marketing, sales, customer service, and the supply-chain functions of the organization to achieve greater efficiencies and effectiveness in delivering customer value. These definitions emphasise that CRM is a comprehensive set of strategies for managing relationships with customers that relate to the overall process of marketing, sales, service, and support within the organisation. As a result, customers are given the chance to convey their preferences through the use of explicit or implicit means. In the retail industry, they make the company or organization aware of these preferences through communication lines established or through the personalized services (i.e. loyalty schemes and frequent shoppers programs) developed by the people in charge of customer relationship management. Having made aware of these preferences, companies continue to track these responses and offer their customers with products and services that are both customized and personalized. Customer loyalty and the understanding of their customers’ preferences are very hard and at the same time, take a lot of time. Because of this, the relationship established by the two becomes unique and the customers would often come back for a repeat business, one of the proofs of their loyalty to a certain company. This paper shall focus on customer relationship marketing to establish customer loyalty in the hospitality industry. Traditionally, it has been said that the products and services being offered in one hotel is very hard to differentiate from the products and services also being offered in another hotel. Hence, hotels then found ways through which they could gain the so-called competitive advantage. There are two strategies that hotel managers usually use to gain this competitive advantage, as mentioned by Kandampully and Suhartanto (2000) in their article “Customer Loyalty in the Hotel Industry: The Role of Customer Satisfaction and Image. One of the strategies used is through providing low-cost leadership through price discounting. This of course, has a negative effect on the profitability of this particular hotel (Kandampully and Suhartanto, 2000). In effect, what becomes most important in differentiating one hotel from another is the quality of its service, instead of the price. At the same time, this has also been one of the main reasons why hotels gain the loyalty of most of their customers. Another strategy being used is the development of customer loyalty by giving them with unique benefits. Undoubtedly, all hospitality managers were right in believing that it is only through satisfying their customers that they shall be able to improve their profits. However, this is still not enough. Customer satisfaction may not be able to ensure a certain company, or a certain hotel for this matter that customers will return to purchase or stay. The trend then now is not just to ensure the satisfaction of their customers but to also make sure that their customers would return to stay in their hotel (Kandampully and Suhartanto, 2000). Because of this, it has been said that relying on customer loyalty is more effective than actually having to rely on pricing strategies to keep businesses alive. According to the different studies made in relation to the said topic, a 5 percent increase in customer loyalty that is often related with customer satisfaction produces a profit increase which range from about 25 to 85 percent. Hence, managers should ensure that their services fully satisfy their customers as this is the only way that could increase their profits. In the same manner, as mentioned in one of the previous paragraphs, hotel managers should also see to it that the satisfaction their customers receive on their first transaction with their businesses should in return, ensure them of the customers’ loyalty, existing or prospective (Kandampully and Suhartanto, 2000). Research Design This research is exploratory in nature. Therefore, both the quantitative and qualitative researches were performed in order to achieve the objectives of this particular research. Quantitative research focused on obtaining the descriptive data of the participants. On the other hand, qualitative research focused on discovering the attitudes of customers towards loyalty schemes and to understand whether these schemes influence their buying decisions. The structure of applied research shall be used in order to analytically review the different customer relationship programs and its importance to the hospitality industry. Applied research is basically concerned with the application of research techniques, procedures, and methods that form the body of research methodology as applied to the collection of information about various aspects of a situation, issue, problem or information gathered can be issued for policy formation and administration. In the same manner, these articles shall be used to support an exploratory research in order to help find the weaknesses that haunt the customer relationship management programs in the hospitality industry focusing on the problems and hindrances that serve as a barrier in its efforts to establish customer loyalty. Having used the techniques of applied research, this study shall also take into one of its forms, descriptive research. Descriptive research attempts to describe systematically a situation, problem, phenomenon, service or program, or provides information about, example, the living conditions of a community, or describes attitudes towards an issue. Using this particular form of research, the researcher would look into the customer relationship management programs as a whole. It would provide information about the different programs as well as the perspectives of the customers with regard to these loyalty schemes. Qualitative Research Qualitative data shall be used throughout the whole research. This type of research shall be used in order to be more experienced and opened up to the topic of customer relationship management in the hospitality industry. It would look into the effects of CRM programs on the loyalty of the patrons. This research shall focus on written documents including magazines, books, websites, memos, annual reports, and so on. To augment, understand and better explain the statistics that will be gathered from the instrument, an investigative research of the importance of CRM, as made available in the internet, are compared vis-à-vis each other. This is because researchers who decide to utilize qualitative methods take on a subjectivist approach, suggesting that facts cannot be effectively comprehended by looking at them exclusively; they must be placed in context. It is critical that problems be considered as components of a complicated fabric or relationships, and such components may not be taken in isolation. The primary edge of the comparative analysis employed in this study is that it is impartial and easy to comprehend as compared to interviews where a researcher’s manner and tone of questioning may greatly affect the answers of the respondent and where the respondent’s internal environment (i.e. mood, current thoughts or feelings, etc.) can affect the way he/she answers the questions or the amount of information that can be gathered. Moreover, the comparative analysis used in this study lends itself to the use of a limited number of respondents, which are not required to participate actively in this mode of data procurement. The research would then use content analysis. Content analysis is a technique used for gathering and analysing the content of the documents retrieved from the World Wide Web. The content shall be sorted into themes, analysing only what is in the text as the purpose of the writer of these articles could not be very clear to the researcher. A phenomenology of marketing strategies used to maintain relationships in the hospitality industry shall also be used. A phenomenology, rooted in philosophy focuses on the lived experiences of individuals. It would be focusing on a first-person view, and interpretation of the gathered data. This will also be used in order to point out the flaws of the systems adopted by the businesses belonging to the said industry, and how these became barriers or hindrances to effective development of customer relationship management strategies. Finally, the agency-structure integration shall be analysed, making use of Anthony Giddens’ structuration theory. In surveying the society and the structure, this very popular sociologist argues that the basic domain of the study of the social sciences, according to the theory of structuration does not merely depend on the experience of an individual actor nor the experiences of the society but the social practices that has been present throughout history. This theory would help focus on social practices and how it has affected the systems of customer relationship management in the hospitality industry. Justification for Quality approach as opposed to quantitative approach The quantitative approach has several advantages – among them is the fact that they have clearer boundaries with regard to data gathering. While it is an advantage in itself, it does not come without weaknesses. For this approach to yield valid conclusions, the tool that is used for data gathering has to have acceptable psychometric properties. The construction of the research tool must be subjected to rigor and careful analysis. One other limitation for quantitative methods is the need to use a substantially large sample to be able to garner more valid results. Nonetheless, the researcher opted to use qualitative research in order to critically examine and analyze the maintenance of relationships in the hospitality industry to establish loyalty. Qualitative research in itself makes for an in-depth evaluation and analysis of human dynamics and the kind of reasons that motivate such behaviour and the reasons that revolve around such behaviour to spur out in the first place. As compared to quantitative research, the qualitative method of analysis relies on the fundamental reasons behind the reactions of people when external factors are applied to a given situation. Simply put, it investigates the why and how of decision making, relative to what is being identified by the quantitative method of analysis - what, where, and when (Denzin & Lincoln 2000). For this reason, qualitative research only requires a relatively small group as compared to the relatively large yet most of if not all of the time are random samples. Qualitative research also identifies and sorts data into relevant and helpful patterns as the foundation for organization and the basis for reporting the kind of results for data. In the same manner, Qualitative analysis is perfect point-to-point, exact description; Quantitative research is more about gathering and observing information, which has been collected from database bundle. It is recommended that qualitative data is used earlier and then Qualitative data later in and research project.. Qualitative data design emerges as the study unfolds. Quantitative data - All aspects of the study are carefully designed before data is collected. In qualitative method researcher is considered to be the main data gathering instruments, but where as in Quantitative method a researcher uses to implement tools for collecting data (EXAMPLE: Questionnaires, interviews). Qualitative data is more rich, time consuming, and less able to be generalized. Quantitative data is more efficient, able to test hypotheses, but may miss contextual detail. “In qualitative method researcher tends to become subjectively immersed in the subject matter but in quantitative method researcher tends to remain objectively separated from the subject matter. In relation to what has been mentioned above, the researcher also recognizes the fact that qualitative methods are used in order to construct the instruments and other data collection needed for a quantitative study which is only used in order to validate what has been researched using the qualitative approach. This means that the qualitative research allows for the in depth analysis of a certain issue because of its ability to cover different aspects of the study: the results and findings of previous studies and at the same time, still be able to obtain the views of new respondents through other methods such as focus group discussions and interviews. In order for this research to effectively analyze the importance of customer relationship marketing in building customer loyalty in the hospitality industry, the researcher shall interview fifty respondents who could share their personal opinions with regard to this matter. Interviews are given importance because it is the easiest method of qualitative research that could be used in the evaluation of an instructional program. In this method, it is easy to gain insight into the attitudes and perceptions of the respondents. It is because of this particular matter that this study would more specifically, make use of semi structured interviews in order to obtain the insights of their respondents. Semi structured interviews are conducted with a fairly open framework and is often perceived to be the most useful format for interviews (Zorn, n.d.). This type of interview allows for a focused, conversational, two-way communication. This could help the researcher both in giving and receiving information. It is called semi-structured because as Zorn (n.d.) mentions, “it is not highly structured, as is the case of an interview that consists of all close-ended questions, nor is it unstructured, such that the interviewee is simply given a license to talk freely whatever comes up”. Semi-structured interviews are designed in such a way that it presents the different topics and questions to the interviewee but ensures that these are designed in such a way that ideas and opinions of those being interviewed are revealed (Zorn, n.d.). In contrast with the questionnaire framework, wherein detailed questions are giving ahead of time, semi structured interviews start with more general questions or topics. Relevant topics are usually identified at first and the relationship between these topics is usually identified. Majority of the questions are created during the interview. These allowed the people from both ends to be more flexible in look into other details and issues. Semi structured interviewing make use of a special tool (i.e. matrix) which provides a framework for the interview. Benefits of Semi-Structured Interviewing The following are the benefits of performing semi-structured interviews, as mentioned by Community Forestry Field Manual 2 (2008): 1. It is less intrusive to the participants as this kind of interview encourages two-way communication. The interviewers are not the only ones who could ask the questions. In this manner, the interview becomes an extension tool. 2. It serves as a way by which previous knowledge is confirmed yet at the same time, provides the opportunity for learning. More often than not, this type of interview does not just provide answers but also reasons for the answers. 3. Interviewees could easily discuss more sensitive issues through this form of interview. 4. Outsiders could be given the chance to participate in the interview. This is essential because they are often seen as more objective than those who are inside. 5. Individual and Group interviews can optimize the strengths of both. The researcher also opted not to make use of focus group discussions because of the difficulty of obtaining the group who could provide specialized knowledge or insight into the issue being studied. In the same manner, the thematic analyses of the focus group discussions will onlyenable the research group to answer essential questions such as: What is being addressed; How it is being addressed; by whom; what are the strengths of the system; and conversely, What are the weaknesses of the current system? However, the method still does not give a clearer view of the issue at hand for it still requires the interview research tool, a more probing tool for qualitative research. References Allan, G & Skinner, C .1993. Handbook for Research Students in the Social Sciences, The Falmer Press. Collins, K. 2006. CRM Is Back With a Vengeance: Is Your Organization Ready for the Next Generation of CRM? Retrieved May 4, 2008 from http://www.gartner.com:80/2_events/conferences/crf8.jsp Collis, J. and Hussey, R. 2003. Business Research (2nd Ed.) New York: Palgrave Macmillan. Denzin, N. K., & Lincoln, Y. S. 2000. Handbook of qualitative research ( 2nd ed.). Thousand Oaks, CA: Sage Publications. Hallowell, R. 1996. The Relationships of Customer Satisfaction, Customer Loyalty and Profitability: An Empirical Study. International Journal of Service Industry Management, Vol. 7, No. 4, pp. 27-42. 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. 346-351. Matthew B. Miles, A. Michael Huberman. 1984.Qualitative data analysis: a sourcebook of new methods. CA: Sage Publications. Norman. H. 1998. Business to Business Marketing Communication, 6th edition, Kogan Pag. Peter, J. P; Olson, J. C. and Grunert, K. G. 1999. Consumer Behaviour and Marketing Strategy (European Ed.), London: McGraw-Hill. Zorn, T. n.d. Designing and Constructing Semi-structured Interviews for Research. Waikato Management School. Read More