In today's highly competitive marketplace,attaining customer loyalty is essential for survival in all industries.China is the fast development country in the world. The China hospitality industry is also developing in a fast pace. Many hoteliers believed that it was very important to satisfy guests when they are in the hotel. Meanwhile, to find new customers is another real goal as well. Due to the strong 留學生dissertation網competition, service providers shift their marketing strategies from creating customer acquisition to creating customer retention or customer loyalty. According to Jacoby and Chestnut (1978: 215), “increasing customer loyalty would most probably result in repeat sales and referrals, revenues, market share, growth and decrease in costs”.
This research tries to make an exploration in customer loyalty and the China hotel industry.The study is seeking to identify the importance of customer loyalty,the extent to which customer loyalty is related to satisfaction,the extent to which relationship marketing has been development in the two particular hotels in China and the effectiveness of guest loyalty programmes.Those two hotels being regarded are Zhengtian landmark hotel in the Xinjiang area, which is tourism destination in northwest of China and another one is Kunming Hotel in Kunming City, where is the centre of economy in Yunnan province.
The researcher chose this project for many reasons. First, while the interest of customer loyalty has been increasing, there has been increasing, there has been, however little research on the topic in relation to the Chinese hotel industry. It means there are only limited customer loyalty researches on China hotels. In this sense, this research tries to make an exploration in customer loyalty and the China hotel industry.
Second, the particular hotels were chosen as information availability reason. Because, the researcher has friends working in those two hotels, so they can make the author able to collect information form the hotels. Otherwise, in the midseason, most of hotels are very busy, they can’t allow the researcher to do deep research in their hotel. Fortunately, the researcher finished her interview with a hotel manager by her friend’s help.The reason of choosing these two hotels is because the researcher wants the sample coverage as wide as possible.The reason will be discussed in the methodology chapter.
1.1 Aim and Objectives
The aim of this research is to explore if and to what extent are customer loyal to the particular hotel chains in China.
1. To determine the importance of building customer loyalty and how does loyal customer benefit the hotel;
2. To determine the measurement of customer loyalty;
3. To determine the usage of customer loyalty programme;
1.2 Structure of the Dissertation#p#分頁標題#e#
1.2.1 Chapter 1
Chapter one introduces the reasons that the researcher chose this particular topic. Furthermore, it indicates the aim and objectives that have been proposed for the specific study. Finally the structure of the dissertation is presented.
1.2.2 Chapter 2
Chapter two is the review of the relevant literature. It examines the concept of customer loyalty as well as its importance in the hotel industry. In addition, Frazer-Robinson’s (1997) model of achieving customer loyalty is analysed and different ways of measuring retention. Finally, the relation between customer loyalty and customer satisfaction is examined. Meanwhile, the customer loyalty programme is introduced, their importance in the hotel sector and their effect on consumer loyalty are also be presented.
1.2.3 Chapter 3
Chapter three examines the method that the researcher used in order to be able to carry out this research. Qualitative research was thought to be the most appropriate method as the researcher wanted to explore opinions from managers. In addition, the design of the questionnaire is being described as for getting opinions from customers.
1.2.4 Chapter 4
Chapter four presents analysis and findings. In the first part, results of the interview with hotel manager are evaluated, and results of the survey are being discussed and related with similar studies presented in the literature.
1.2.5 Chapter 5
Conclusion and recommendations are the main aim of this chapter. Key points from the analysis being discussed and managerial solutions are being proposed for improving customer loyalty in the Chinese hotels. It finally enumerates some limitations of the study and proposes some further areas of the research.
This chapter is the review of the relevant literature. It examines the concept of customer loyalty as well as its importance in the hotel industry. In addition, Frazer-Robinson’s (1997) model of achieving customer loyalty is analysed and different ways of measuring retention. Finally, the relation between customer loyalty and customer satisfaction is examined. Meanwhile, the guest loyalty programme is introduced, their importance in the hotel sector and their effect on consumer loyalty are also be presented.
2.1 Definition of Customer Loyalty
Customer loyalty has emerged as a major item on the marketing management agenda. It is one of those elusive qualities that every company strives to achieve. The concept of customer loyalty is not a new invention that has emerged over recent years. As Reicheld and Teal (1996) support, the concept of customer loyalty has existed throughout the history of trade. Various authors define and examine this concept from different perspectives.
There is a perspective developed by Hawkes and Paul (1995), they explain customer loyalty as “the combination of customer behaviour and attitudes which indicate brand or company preference, thereby maximizing customer life time value”. Moreover, Gould (1995) writes that “a loyal customer is a customer who will actually recommend your company to someone else. It is someone who becomes an unpaid advocate of your business”. #p#分頁標題#e#
Gould’s statement is very important as it proves that in order for a person to risk and put his reputation at stake by recommending a company to other people means that this person is truly loyal to the specific business. Oliver (1999) argues that all these definitions suffer from the problem that they record what the customer does, but none of them really defines the psychological meaning of loyalty. Jacoby and Chestnut (1978) have explored the psychological meaning of loyalty and they conclude in Oliver’s (1999) article that “consistent purchasing as an indicator of loyalty could be invalid because of happenstance buying or a preference for convenience and that inconsistent purchasing could mask loyalty if consumers were multi-brand loyal”. (Oliver, 1999) Therefore purchasing pattern is not the only reason which shows whether a customer is loyal or disloyal. Oliver suggests that in order to define true consumer loyalty, consumer beliefs, affect, and intention within the traditional consumer attitude structure have to be assessed. It has been noticed by the researcher that the main words that came up in different authors’ definitions are: feeling of attachment, relationship, repeat patronage, commitment to rebury, customer behavior and attitude, recommend the company and customer beliefs. From these words mentioned by different authors it can be concluded that a good definition of customer loyalty should examine the customer’s actions as well as his/her attitude and beliefs.
The next section is going to examine that the relationship between customer satisfaction and customer loyalty.
2.2 Relation between Consumer Satisfaction and Loyalty
“Satisfaction may be perceived as a state of fulfillment, which is connected to reinforcement and arousal.” (Bloemer and Ko de Ruyter, 1999:318)
Satisfaction is a principal determinant of repurchase intention, which in turn affects loyalty behavior. In the hospitality industry, the focus has largely been on the influence of customer satisfaction on customer loyalty. However, even if these two concepts are directly related, the exact relationship between loyalty and satisfaction in the service industry has remained unclear, especially in the hospitality industry where consumers are highly involved with the service industry. Bloemer and Kasper (1995) state that satisfaction-loyalty relationship is not simple and straightforward. Whereas, Oliver et al. (1992) argue that the two concepts are directly related and support that with the fact when satisfaction increases above a certain level then customer loyalty will increase rapidly. Price et al. (1995) give a different view and argue that the impact of satisfaction on loyalty depends on the consumer involvement with the service. For example, satisfaction has a high impact on loyalty when consumers are highly involved with the service.
2.3 Importance of Building Customer Loyalty
Customer loyalty is the truth of a company’s success as a business. According to Keaveney (1995) and Gremler and Brown (1996), customer loyalty is regarded as an essential asset in service industry. Businesses, which realise that the customer is the reason for their existence, have more chances of success than those whose main goals are to make money. Fazer-Robinson (1997) states that “the object of a business is not to make money. The object of a business is to serve its customers”. While many companies have repeat customers, very few of them attain the goal of having customers that rave about their products and services. Customer loyalty is the extent to which customers are still with key loyalty behavior to a company even when its competitors offer more attractive prices, products and services.#p#分頁標題#e#
In the hospitality industry, interpersonal relationship plays a significant role to achieve customer loyalty. This is because the influence of perceived risk is high as customer loyalty may act as a barrier to customers’ switching behavior. Dick and Basu (1994) support the idea that intangible attributes such as reliability and confidence may play a major role in building and maintaining loyalty.
It can be argued that the main reason companies have difficulty to achieve a high degree of customer loyalty is that they misunderstand why customers are loyal. This often leads them to use incentives and promotions in ways that do not actually motivate customers to be loyal.
Strategies to retain consumers within a company are often tagged as loyalty schemes, which are supposed to rely on certain rules, methods of promotion and communication devices. It has to be noted that loyalty programmes and incentive programmes are not the same. The most important thing is to understand the customers’ buying motives and create a loyalty programme that will fulfill their needs. Loyalty schemes will be examined in the next chapter. The next section presents and discusses what makes customer loyalty.
2.4 What makes customer loyalty?
The general consensus from academics writing in this area is that satisfaction is the main determinant of loyalty. However, the strength of the relationship between satisfaction and loyalty is questioned by some authors.
Several authors argue that there is a strong positive association between customer loyalty and satisfaction. Mcllroy and Barnett (2000) refer to research that indicates that assessments of quality and satisfaction are critical in the process by which a consumer develops a positive attitude towards a particular experience and develops brand loyalty. Furthermore, Jones and Sasser (1995) believe the safest way to gain true loyalty is to seek total satisfaction.
Yoon et al. (2000) found that negative disconfirmation of prior expectations has a greater impact on overall satisfaction than positive disconfirmation (regarding salient attributes). Soderlund (1998) supports the findings of Yoon et al.(2000) and suggests the degree to which customer satisfaction impacts on loyalty differs according to where customers are in the customer satisfaction scale. And an increase in satisfaction produces a stronger effect on loyalty among customers who are at the high end of the satisfaction scale. Furthermore, Soderlund notes that when the number of alternatives is high, such as in the hospitality market, the satisfaction-loyalty link is strong when customers are satisfied; and weak when satisfaction is low. This suggests loyalty may be a productive response for satisfied customers where many alternatives exist, as consumers do not need to go through the decision-making process again.
Stewart (2002) does not attribute loyalty to satisfaction. He states that brand loyalty is about inspiration and trust as well as to believe companies are surely able to become the most successful ones. It is supported by the result of a study by Chaudhuri and Holbrook (2001), who find strong positive link between brand trust and brand affect (a brand’s potential to elicit a positive emotional response) and purchase and attitudinal loyalty.#p#分頁標題#e#
Wood (2002) believes “habit is the single biggest reason for brand choice. It is rarely talked about in marketing circles because it seems too basic a reason for purchase-and ‘habit marketing’ just doesn’t sound sexy”.
As Blackwell, Miniard and Engel (2001) explain, when making repeat purchases consumers often purchase the same brand as what they bought previously. For low-involvement products e.g. toothpaste, inertia-based habits often occur where consumers buy the same brand out of routine or convenience. For high-involvement products, such as hotel service, consumers would usually use extended problem solving upon initial purchase, involving an extensive information search and evaluation of alternatives, due to the costs and risks of a wrong decision. Enduring buying patterns based on brand loyalty are often established for such high involvement products to eliminate the requirement for extended problem solving every time consumers repurchase. In the next section, the question of what loyal customers would bring to the company will be discussed.
2.5 What are the benefits of loyal customers?
Word of mouth
The idea that loyal customers are strong advocates for companies holds a great attraction for marketers (Reinartz and Kumar, 2002). Word of mouth advertising is extremely effective and many companies justify investment in loyalty programs through profits made by new customers brought in by loyal customers (as opposed to incremental sales to loyal customers) (Reinartz and Kumar, 2002). Mcllory and Barnett (2000) state that repeat customers positively support the product and services offered and act as a marketing resource by recommending the service to friends and colleagues. They may tell up to ten people about the product/service to which they feel loyal (Mcllroy and Barnett, 2000). Research by Dick and Basu (1994) further supports the claim.
According to Parasuraman, Berry and Zeithaml (1991), a further benefit derived from loyal customers is a “goodwill” or credibility factor that encourages customer tolerance. Companies also benefit from a more open communication channel to facilitate learning about and correcting problems.
The financial value of loyal customers is well documented. Jones and Sasser (1995) believe increased customer loyalty is the single most important driver of long-term financial stability.
It is estimated that companies can boost profits by almost 100% by retaining just 5% more of their customers (Mcllroy and Barnett, 2000). Furthermore, a study shows that a 2% increase in customer retention has the same impact on profits as a 10% reduction in overheads (Murphy, 2000). These figures suggest that loyal customers are highly profitable.
It has been estimated that it takes five to seven times of time and money to replace a customer than to retain one (Marney, 2001). Customer acquisition costs include advertising, loss-leader items and other incentives to encourage initial purchase (Murphy, 2001). For the first year or two after acquisition, the money that new customers spend with the organisation is offset against acquisition costs. After this period, there is an increasing profit to be made (Murphy, 2000)#p#分頁標題#e#
Mcllory and Barnett (2000) state that the longer a customer stays with a company, the more profitable he/she becomes. Curasi and Kennedy (2002) and Strauss et al. (2001) explain that it is due to the compounding effect of customer retention over time.
Loyal customers are less expensive to target as companies already have their names and addresses (Mcllroy and Marnett, 2000). A further benefit of loyal customers is that they understand the value of the brand, thereby reducing the communication task (Seybold, 2001).
In addition, Mcllroy and Barnett (2000) claim that loyal customers may be willing to pay more. Chaudhuri and Holbrook (2001) agree, stating the “brand loyal customers may be willing to pay more for a brand because they perceive some unique value in the brand that no alternative can provide”. Others argue that “customers are loyal to one company because the cost of switching to another supplier is too high. They will therefore be willing to pay higher prices up to a point to avoid making the switch”. (Reinartz and Kumar, 2002)
However, in their study of 16,000 consumers from four different businesses, Reinartz and Kumar (2002) find no evidence to support the claim that loyal customers pay higher prices. Their research concludes that in general “it seems a loyal customer-whether corporate or consumer-is actually more price sensitive than an occasional one”. Reinartz and Kumar (2002) also assert that surveys constantly report that consumers believe loyal customers deserve lower prices.
Despite the convincing arguments regarding the profitability of loyal customers, there is research that has questioned their profitability.
It seems that there is a flaw in assuming that all loyal customers are profitable. In their study, Reinartz and Kumar (2002) found 40% of loyal customers unprofitable. Interestingly, they also found that the same percentage of profitable customers were not worth chasing as they were unlikely to buy anything in the future. This suggests that loyal customers are not necessarily the most profitable customers.
Asseal (1998) states that brand loyalty leads to greater market share when the same brand is repeatedly purchased by loyal customers. Chaudhuri and Holbrook (2001) explain that brands which are higher in purchase loyalty will also be higher in market share because of higher levels of repeat purchase by the brands users.
Having reviewed the benefits of customer loyalty, we are not surprised at the organizations that are spending considerable time and money on developing strategies to build loyalty and retain customers.
The next section will review different author’s opinions of how to measure consumer loyalty and alternative measurements will be examined.
2.6 Measuring Customer Loyalty
There are various methods of measuring customer loyalty. Frazer-Robinson (1997) believes loyalty can be measured by customers’ buying behaviour and their intention to repurchase. He adds that companies must be able to find customer’s feelings as well as their actions in order to measure it accurately. It can be argued that the problem in this case is that it is difficult to discover customers’ real feelings about a product or service. In addition, Hepworth and Mateus (1995) believe that a way of predicting customer loyalty is to quantify indicators such as “intention to keep buying the same product or service, intention to buy more products or services and willingness to recommend the product or service to other customers”. Obviously, Hepworth and Mateus think that the repurchase intention is not enough to measure loyalty. They suggest that frequency of buying behaviour and word of mouth have also to be taken under consideration in order to measure customer loyalty. #p#分頁標題#e#
Furthermore, East, Hammond and Lomax (2000) suggest that “loyalty may be expressed in behavioral and attitude”. In their article they suggest two different measurements of store loyalty and they specifically state that these two measurements are “also appropriate in other fields such as airline, hotel, and restaurant usage”. This study explores customer loyalty in the hotel sector, but it might also be worth mentioning measurements that are used in other sectors.
The first method of measuring loyalty is called “first-store loyalty” which measures customer’s expenditure in his/her first store, divided by total customer expenditure in the retail category. In the hotel sector this could be translated as in which hotel the customer is spending most money and then it is divided by total customer expenditure of the specific hotel. The second measurement is ‘first-store retention’ which basically in the hotel sector would measure whether the customer would come back to the hotel over specific period of time. Fornall (1998) supports that retention is a key concept in relationship marketing, and he states that it can be more profitable to keep existing customers than to recruit new ones.
2.7 Customer Loyalty Programme
The following section defines what customer loyalty programmes are, according to the opinions of various authors. Moreover, the scope of loyalty programmes will be examined as well as describing the two important criteria under which hotels are classified-customisation of service and information intensity-and their ways in which they influence the effectiveness of loyalty programmes.
2.7.1 Definition of Customer Loyalty Programme
Robin Clark states that loyalty programmes are “virtually anything that brings in extra profits to the more true definition of increasing the retention rate of customers by modification of their behaviour” (McDermid, 1996). Most of the loyalty programmes are combination programmes ranging from the simplest “save your till receipts” type, up to sophisticated multi-function smart card schemes. The most common ones are those in which points are collected on magnetic swipe cards and then later redeemed for discounts or gifts. In addition, Hawkes (1995:22) defines loyalty schemes as “a long-term marketing tool designed to give loyal customers collectable incentives which, when converted into rewards, make a compelling proposition to continue purchasing a company’s products or services”.
2.7.2 Loyalty Programmes
Loyalty programmes have been developed by numerous hotel groups, broadly based on the trumpeted success enjoyed by similar schemes operated by the world’s major airlines. They first achieved prominence in the airline sector and since that, have spread through the retail, car rental, hotel sector and others. One of the main scopes of this move was to focus on increased sales promotion techniques and the emergence of customer loyalty programmes followed. According to Palmer, McMahon-Beattle and Beggs (2000) loyalty programmes are usually associated with rewards given by firms in proportion to customers’ expenditure with them. It can also be argued that the majority of loyalty programmes are not directly related to the needs and motivations of individual customers which could lead to low customer perceptions of the quality of their relationship with a firm (Barnes, 1994).#p#分頁標題#e#
Loyalty programmes are used in a number of ways, including:
? Providing an incentive for repeat purchase
? Providing discounts on purchases
? Distributing coupons
? Developing client-purchase and buying-behaviour histories
? Offering customized rewards based on the customer’s profile
The main benefit of loyalty programmes is to attract business. In addition, the less obvious benefit is the collection of valuable information about customers. This can be considered as a benefit as information gathered can be used more accurately to target campaigns, offers and services. The data can also help seek out new customers with matching profiles.
Palmer, MsMahon-Beattle and Beggs (2000) classify hotels according to the two important criteria which can influence the effectiveness of a loyalty programme:
? the extent to which they offer a customised rather than a standardised service
? the extent to which they can be described as information-intensive or information-poor business.
2.7.3 Loyalty Programmes in the Hospitality Industry
Marketing drives are more common to the retail trade, but they have also taken off in the hospitality sector. The latest phrases used as marketing drives are loyalty programmes, retention marketing and smart cards. Marketing drives are one of the oldest, but most reliable methods of maintaining the marketer-customer relationship. They build loyalty to encourage repeat purchase and if managed in a disciplined fashion, can enable the market to develop and exploit a customer database that can serve as a platform for a number of marketing programmes, all aiming at sustaining the relationship. According to Ogilvie-Taylor (1995), a growing number of hotel group including Forte, Jarvis, Friendly, Toby and Consort, are becoming more aggressive in marketing and investing in loyalty programmes. Hotels offer their customer anything from a discount off their next visits, free wine or free accommodation in order to ensure that customers will come back.
Customer loyalty programmes in the hotel industry are considered to be based on reward cards.
According to Hartley (1997), the reward cards have two functions:
? Offer to guests incentives to repurchase, which encourage them to return to the hotel
? Provide the hotel with information about the guests
In more detail, the reward cards bring the customer more closely to the hotel, which leads to customer loyalty and also they help the hotels to keep track of the guest’s stay. For example, with the help of information technology, hotels gather information on guest’s frequency of stay, rates charged and preferred method of payment, room type and other services.
2.7.4 Limitations of Loyalty Programmes in the Hotel Sector
According to Ranby (1995) the majority of loyalty programmes in the hotel sector do not gather information on individual guest’s demographic status and spending patterns, but merely offer rewards according to a customer’s expenditure. The advantage of these programmes is that they are less expensive to create but on the other hand offer less opportunity for one-to-one marketing relationships which is the key method of finding out about the specific needs and wants of each customer.#p#分頁標題#e#
Furthermore it can be argued that another limitation of some loyalty schemes is that they do not truly promote communication between hotel and guest. An example of a programme, which does not encourage communication and is a common feature of a hotel loyalty scheme is the scaled reward of gifts to be earned against the number of reservations made.
In addition it has to be noted that some hotels fail to use the loyalty programmes in a structured way. For example, they might be able to collect the right information, but not have the ability to analyse the information gathered. Finally it has to be mentioned that the appropriate use of loyalty programmes depends heavily on the hotel’s ability to put them into practice.
A final limitation of a loyalty scheme is suggested by Jackie Abraham, Marketing Communications Manager of Forte Posthouses (1996). He stresses that once the scheme is in place the guests do not like to see them removed.
2.8 The Chinese Hospitality Industry
According to Anon (2001), China now has about 4,000 star hotels with an asset totaling 543.5 billion yuan and the number of five-star hotels in the Beijing city will be 40 by 2008 (Anon, 2003). Since the Chinese government adopted the policy of “reform and opening up”, the international investors regard China as a wonderland for their business. Among the world’s top 300 corporate chains ranked by Hotels Magazine in 1999, about 10 percent of them have entered China (Pine, Zhang, and Qi, 2000).
Therefore, the competition in the Chinese hospitality industry is very strong. In the face of a highly competitive environment, it has long been considered important for a hotel to choose mode of business expansion in order to achieve great success in China’s market. But meanwhile, to build a firm relationship with its customers is another big issue for the Chinese hotel industry.
In the past, due to the monopoly in the industry (especially, the hotels for overseas traveller), most of the hotels in China haven’t got any concept of customer loyalty (Pine, Zhang and Qi, 2000). But, following the development of the industry, they have considered the customer loyalty very important to them. Therefore, the whole industry is building the customer loyalty programme, they are more and more concern the loyal customer now. Some hotels are doing their own loyal customer membership card. Some big international chain hotel groups want to link their Chinese loyal programme to their international programme.
This study seeks to explore if and to what extent customers are loyal to hotel brand names in China. The research will be based on the two hotels in different part of China. One hotel has more business guests, another one is in a tourism destination. The primary goal of this research is to establish the importance of customer loyalty to hotels and the reasons that customers give for selecting those hotels. Additionally, this study aims to explore the effectiveness of the customer loyalty programmes offered by hotel to their customers. This question raised in the customer loyalty programmes section do not only examine whether or not these programmes should be applied to a specific industry, but also whether or not they do actually influence behaviour. This chapter will discuss the research design of this study and the methods used for secondary and primary research. Qualitative interview and quantitative questionnaire were chosen as the most appropriate tool for this research and the reasons for this choice will be presented in the following chapter. The unit of analysis, sampling procedures as well as the study setting and the interviewing process will also will be analysed and presented. Finally, a number of limitations faced while the research was carried out will be discussed.#p#分頁標題#e#
3.1 What is Research?
Research is the process of finding solutions to a particular problem after a through analysis of the determinants. Sekaran (2000) describes research as ‘an organised, systematic, data based, critical, objective, scientific inquiry of investigation into a specific problem, undertaken with the purpose of finding answer or solution to it’.
There are 2 types of research according to Sekaran (2000). Applied research aims at ‘applying the results of the findings to solve specific problems’ whereas fundamental research ‘is done chiefly to enhance understanding of certain problems’.
According to the research process (Sekaran, 2000), the author developed a model of the whole research process of this dissertation. (See Figure 1) Meanwhile, this chapter will be presented as the figure shows.
Figure 1. Research process of this dissertation
3.2 Objectives of Research
In order to conduct successful marketing research, the objectives of the study must be clearly defined. Without clear objectives it would be difficult for the researcher to direct all the complicated steps required in a research.
Understanding the importance of this subject the researcher defines the main purpose of this research, which is to analyse how loyalty customer is, how does loyal customer benefit the hotel, how to measure customer loyalty and is the customer loyalty programme really effective? All these questions are in the Chinese hospitality industry. Thus, the research objectives can be identified as follows:
1. To determine the importance of building customer loyalty and how does loyal customer benefit the hotel;
2. To determine the measurement of customer loyalty;
3. To determine the usage of customer loyalty programme.
3.3 Research Design
In the process of collecting data, it was decided to use techniques of in-depth interview and questionnaire in order to attain the most appropriate information in relation to the research questions used for this study. In an attempt to achieve validity, multiple sources of evidence were used, as it is required by any researcher undertaking an exploratory study. The researcher was restricted to two data gathering techniques (secondary and primary data). However, the profiles of the customers who are members of the hotel’s loyalty programmes were not available, because this information is regarded as confidential. In an attempt to compensate for this restriction of data collection concerning the customers and protect the validity of the research outcome, it was decided to collect information through interviews from the organisation members and questionnaire from their customers so that comparisons could be made on the information collected from both sides.
3.4 Secondary Research
According to Sekaran (2000) secondary data is data that already exist and do not have to be collected by the researcher. He supports that library and desk research is an established method of collecting secondary data. The benefits of this method are that it is speedy and economical as long as there is enough relevant information about the specific research problem.#p#分頁標題#e#
In conducting secondary research for the literature review, the author drew upon a variety of sources. Secondary data on consumer loyalty is widely available, as research has been done in the past on this particular issue. The Delphi technique was used in order for the researcher to gather a variety of articles, books and previous studies mainly from the library combines with statistics on tourism in China.
3.5 Primary Research
3.5.1 Qualitative Research
It was decided that a qualitative approach was most appropriate for research method study which explores if customers are loyal to particular brands, for a number of reasons. First, qualitative research serves well in understanding how things work (Bryman, 1992), it also allows the researcher to deal with complex issues concerning organisations in an exploratory manner concerning with cannot be employed in qualitative research (Marshall and Rossmann,1989) A qualitative approach is too ‘static’ to deal with ‘processual aspects of organisational reality’ (Bryman,1992).
Second, this study involved an exploration of context in order to understand the importance of consumer loyalty for the specific hotels and the way customers perceive loyalty programmes and their relationship with the specific hotels in China. Qualitative research encourages such exploration, whereas a quantitative paradigm gives little attention to the context (Bryman, 1992).
Third, as Strauss (1987) points out, qualitative research is appropriate when laying emphasis on cross-comparisons in studies of a single situation. This applies to this study as it involves comparisons between an organisation’s views and those of their customers.
Finally, it is believed that the involvement of the researcher in the process of data collection is very challenging and rewarding. Such involvement becomes possible only when undertaking qualitative research (Bryman, 1992)
3.5.2 Approaches to Qualitative Data Analysis
The primary data used in this research and which are analyzed in the next chapter were collected from two hotels in China. Miles and Huberman (1994) found in their study that there are three approaches to qualitative data analysis. The first approach that is used for this project is interpretivism. Researchers that use this approach often work with interview transcripts ‘but they are careful, often dubious, about condensing this material’. This approach does not lead to covering laws, but rather a practical understanding of meanings and actions. There are another two approaches to qualitative data analysis which are not related to this study.
3.5.3 Primary Data
In order to fulfil the purpose of this study primary data as well as secondary data was gathered. Sekaran (2000) supports that certain types of information such as the perceptions and attitudes of employees, are best obtained by talking to them, by observing events, people, and objectives, or by administering questionnaires to individuals. He adds that such data gathered for research from the actual site of occurrence of event are called primary data. Seale (1998) described the interview as ‘probably the most commonly used method in social research’. For this particular study, the researcher has chosen to collect data through qualitative interviews and questionnaire. Qualitative interviewing can be conducted by using in-depth, semi-structured or loosely structured forms of interviewing. Sekaran (2000) suggest that personal interviews can motivate respondents and clarify the questions, clear doubts and add new questions. The researcher believes that in this study the use of qualitative interviews is the most appropriate one for one of the research objective because the data needed could not be gathered in any other way. The researcher had to understand the feelings of the respondents and examine their reactions to each question. Parahoo (1997) propose that “interviewing is the most common way of gathering data because verbal communication is the most effective means available to humans with whom the individual can convey his feelings, experiences, views and intentions”. #p#分頁標題#e#
In terms of the structure of the interview, the researcher preferred a semi-structured rather than unstructured interview for the hotel staff. Jones (1985) suggests that there has to be some element of structure within the interview. Semi-structured interviews were chosen as the most appropriate tool because the researcher has to examine opinions and perceptions in order to understand the level of loyalty in the hotels in China. Therefore, personal semi-structured interview with the managerial staff in the hotel was developed in order for the researcher to be able to gather the opinion of how the hotel management views customer loyalty. Then, the researcher can compare it with the result from questionnaire from customers.
Free response interviews with the Sales& Marketing manager in the hotel was one of the researcher’s aim. In addition, the researcher tried to examine how hotel measures the customer loyalty, which is one of the objectives of this research.
3.5.4 Interview with Customers and Questionnaire Design
Part of the methodology was based upon the need to identify the main motivators of hotel customers to visit the hotel again. In addition the benefit from loyal customers will be examined in order for the author to understand whether customer loyalty can benefit the hotel and how it benefits the hotel.
The findings will be based upon the responses from those responded questionnaires from customers who would just check out a visit in the hotels. The researcher tried to interview both male and female customers of varying age and ethnic. The purpose of that will be to ensure that the sample chosen was representative of a cross-section of those guests staying in the hotel.
The whole questionnaire is consists of 5 parts. (See Appendix) From question 1 to question 7, all the questions are about demographic details. Question 1-4 present gender, age, ethnic group and occupation, the reason of asking these is the researcher wants to classify all the samples by these demographic criteria. By doing these classify, the researcher is able to assess the linkage between customer loyalty and people’s personal demographic details. Meanwhile, it can help the author analyse the data more clearly and effectively. Question 8-9 is second part of this quantitative research, the aim of these two questions is to find out if the candidate is a loyal customer or not. Question 10 and 11 wants to know how customers realise the importance of characters in a hotel. The elements which can influence customer loyalty can be assessed in this part. Customer loyalty phases and how customer loyalty benefits the hotel is could be reflected in question 12-14. It is the fourth part of this questionnaire. In the question 12, the researcher tries to determine the customer loyalty by asking them if they would do repetitious purchasing again in the future. Question 13 is actually similar to question 10 and 11, because the author wants to get the clear and surely answer of the elements which can influence customer loyalty. By using the technique of repeating questions, the aim of this question is hoped to be achieved. According to the literature argued before, mouth of words is a benefit from loyal customer. Therefore, question 14 is designed to ask the interviewee if he/she will recommend this hotel to his/her friends. The final part includes 4 questions: 15, 16, 17 and 18. This part is aimed at exploring customer loyalty programme. First, question 15 will define if the candidate knows about customer loyalty programme or not. Then, question 16 will assess the benefit for the guests from the perspective of customer. Then, in the question 17, the candidate will be defined if he/she is a member of customer loyalty programme. Finally, question 18 makes the researcher able to evaluate the limitations of customer loyalty programme.#p#分頁標題#e#
3.5.5 The Population
Zaltman and Burger (1975) define the population as a set of items that form a complete list of all subjects that are relevant to a given study. The group of people,items or units under investigation.
Sekaran (2000) states that “a sample is a subject of the population. It comprises some members selected from the population. In other words, some, but not all, elements would from the sample”. There are several sample selection procedures named: probability simple random, systematic and stratified random samples, cluster and area samples and non-probability convenience, judgement, quota and purposive samples.
In this particular study, a form of non-probability purposive sampling, convenience-sampling method was chosen. Purposive sampling means that the information needed in order to carry out this research was obtained from specific target groups. In this case the desired information had to be collected from the manager of the hotel and 32 customers from the business hotel. It can be argued that by using purposive sampling the extent to which the findings can be generalised may be very low. On the other hand it has to be noted that this is the only viable way for gathering the information needed. One of the main reasons for this choice is that it would be very difficult for the researcher to obtain interviews from a random sample as the research was carried out during the midseason when most of the hotels are busy and the managers are not willing to be interviewed. Also, in the literature review the researcher is mainly using chain hotels as examples because they are more likely to adopt customer loyalty schemes than small independent hotels.
The researcher conducted 50 surveys, fortunately, there were 32 be returned, the response rate is 64%. The reason of choosing those two hotels (one business hotel and one tourism hotel) is the researcher wants to explore the extent as wide as possible. According to the secondary research in the literature review, the researcher think it is necessary to make the sample as variable as possible. Because, the customers who visit business hotel are quite different form those guests visit tourism hotel. Therefore, the researcher decided to conduct the research in two different hotels. The researcher hopes the different samples can provide different results and the conclusion could be improved by these wide range of sample.
Convenience sampling was used in order for the researcher (with her friend’s help) to be collect information from the hotel customers who were willing to spend some time to answer the questionnaire. On the other hand, interview with the manager in the hotel was also be supported by the researcher’s relative. Otherwise, as discussion above, it is very difficult to get contact with hotel managers in this particular time. The researcher obtained information from 32 guests, in order to be able to compare their opinion with the manager’s opinion.
3.7 Data Analysis#p#分頁標題#e#
Hartley (in Cassel and Symon, 1994) suggests that the researcher should describe the data and the development of the categories in which to place processes. The data of this research was organised “around key themes” and it was then examined in order to be appropriately categorised. Categories were framed by the research questions, which derived from the literature review and were headed by two main sources as mentioned previously: 1. customer loyalty, 2. customer loyalty programmes. In order to provide the reader with a smooth flow of information to avoid confusion, it was decided to describe the views of the two resources of information separately (using categories) and interweave the results at a stage of the findings.
Even well-designed research includes factors that minimize the significance of the conclusions drawn and restrict their generalisation. The reader in the following of this study must take these factors seriously into consideration. Therefore, this research presents several limitations, which are:
1. Due to inconvenience reason, the researcher only can interview one hotel manager. It may influence the research data. But, as the researcher explained before, it is busy time for hotels, so it is very difficult to get a proper interviewee.
2. Normally, the big hotel groups have better customer loyalty programmes. But, again, because it is difficult for the researcher to get contact with them. So, the researcher decided to launch the research with two medium size hotels.
3. Because of money limitation, the researcher can’t go to China to do the research. The researcher finally decided to do the interview by phone. Frankly speaking, the telephone interview is not as direct as face to face interview. So, the data collected from the interview is limited as well.
4. The time constraints.
5. The inexperience of the researcher.
Appendix 1 :Questionnaire
Customer Loyalty Questionnaire
I am student of University of Sunderland. The purpose of this questionnaire will identify the main motivators of the hotel customers to visit the hotel again. I would be grateful if you could spend some time to answer to following questions.
Your corperation will be appreciated.
1. Gender 性別:
a. Male 男 b. Female 女
2. Age 年齡:
a.16-24 years old 16-24歲
b.25-34 years old 25-34歲
c.35-44 years old 35-44歲
d.45-54 years old 45-54歲
e. 55 and over 55歲以上
3. Ethnic group 人種:#p#分頁標題#e#
a. Chinese 中國人
b. White 白種人
c. Black 黑人
d. Asian 亞洲人
e. Others(Please specify)其它 (請列舉)___________
4. Occupation 職業:
a. Executive/Manager 經理人 b. Salesperson 銷售人員
c. Teacher/Professor 老師/教授
d. Civil servant/government 公務員
e. Student 學生 f. Self-employed 自由職業
g. Retired 退休
h. Others（Please Specify）其它 （請列舉） __________
5. Purpose of visit: 此行目的
a. Business 商務
b. Visit friends and relatives 探親訪友
c. Leisure 休閑 d. Education 學術
e. Others （Please Specify）其它 （請列舉）__________
6. Who do you usually travel with? 您通常何誰一起旅行
a. Individual 獨自 b. Couple 伴侶
c. Family 家庭 d. Friends 朋友
e. Colleagues 同事
7. How did you learn about the hotel? 您如何知道這家酒店的？
a. Relatives/Friends 從親戚和朋友那兒知道的
b. Travel agencies 旅行社
c. Magazines/Brochures 雜志和資料
d. Internet 互聯網
e. Others (Please Specify) 其它（請列舉）___________
8. Is it the first stay at this hotel? If no, how many times?
a. Yes, it is my first time 是，這是第一次
b. Second time 第二次 c. Third time 第三次
d. More________多次 (請列出)
9. When is the last time you visited the hotel in the past?
10. Please rank the following criteria as how important they are in a hotel
a. Facilities設施 b. Service 服務
c. Image形象 d. Price價格
e. Special offer 特別優惠 f. Reputation 聲譽
11. What extra treatment you want to get from the hotel?
a. Recognition 個人認知
b. Special Welcome 特別歡迎
c. Special gift 特別禮物
d. Discount 折扣
e. Others （Please Specify）其它 （請列舉）__________
12. Are you intending to visit the hotel again in the future?
a. Yes 會 b. No 不會
13. If you will visit the hotel again in the future, what makes you to choose this hotel? (Please rank the following criteria)
a. Special offer 特別優惠 b. Price 價格
c. Personnel treatment 個人服務 d. Service 服務
e. Location 位置 f. Facilities 設施
14. Will you recommend the hotel to a friend?
a. Yes 會 b. No 不會
15．Are you in any way familiar with guest loyalty programmes?#p#分頁標題#e#
a. Yes 有過 b. No 沒聽過
16. In your opinion what benefits should a guest loyalty programme offer to its members?
17. Are you a member of a guest loyalty programme?
a. Yes 是 b. No 不是
18. Do you enjoy your membership in the guest loyalty programme scheme and for which reasons?
Appendix 2 :Interview
答：價值，絕對的。 如果他們覺得：嗯，我花的錢，物有所值的話。 他們一定還會回來，對不對？除此之外，像會員制的優惠，打折也有很大影響。同時，人們也喜歡有個性化的服務。 如果你對他說：你好啊，某某先生，是不是和上次一樣呢？他們會很開心，一定還會再來。
答：對我們是肯定有好處的，要不然，我們也不會那么強調?；仡^客，其實不單單是再回來，而且他們還會向朋友宣傳。 這給我們帶來更多的客人。 但是，如果你有一次不好的經歷，你也許會對10個人講，一次愉快的經歷，也許只對一個人說，所以，我們要很小心。 利潤時他們帶給我們的另一個好處，多的客人，多的收入，就是這么簡單。
答：是，是很難。因為，沒有一個工具去做。完全是抽象的?？床灰?，摸不著，對不對？這樣，怎么進行評測呢？通常，我們用一個客人的訪問頻率進行評測。頻率越高，忠誠度越高。 另外一個辦法是，看新客人是不是老客人推薦的。 目前，就是這樣。
1. What do you understand by the term customer loyalty?
A: Customer loyalty for me, firstly, we have to provide some unique service for them to make them come back. Then, the loyal customers can contribute to our hotel by helping us to do the business better. But, fundamentally, the good service is the main thing creates the customer loyalty.
2. What are the main drivers of customer loyalty?
A: Value, definitely value. If they think: “umm, the money I spent is valuable for what I get.” They will come back again, are they? Besides this, some offer from the membership, better price is also very important. But, people would like to be greeted personally. If you say: “Good morning, Mr XX, same as last time?” it would delight them. All these will make them come back again.#p#分頁標題#e#
3. How important is customer loyalty to your hotel?
A: Absolutely very important, I can say it is very important for our revenue. Our hotel always tells its staff, to treat the returning guest nicely is very important. And maybe it will be our vision in the future.
4. Do you think customer loyalty in China is quite different from the western countries?
A: You know, it is very difficult to compare. But, I think it is same basically. May be Chinese customers concern about the price more. They always want their benefit from the hotel more tangible like discount, gift and so on. I think the others are all similar.
5. How important is customer loyalty in China?
A: As I said before, it is important in our hotel. So, I think it is important for the others as well. But, 5years ago, no one knew about the customer loyalty and what loyal customer means to the hotel. But, the whole thing changed in 5 years. We take the customer loyalty as one of the most important issue in our hotel.
6. Do you think customer loyalty can really benefit your hotel, if yes, in what extent?
A: Yes, it can really benefit us, otherwise we wouldn’t emphasis on it so much. The returning customer is not just come back only, he/she will tell his/her friends. It brings us more guests. But if you had a bad experience you go and tell 10 people about it, if you have a good experience you might only tell 1. In this case, we have to be very careful. Profit, revenue from when they repurchase is another benefit. More guests bring more money, that’s it.
7. Do you think customer loyalty is directly related to customer satisfaction?
A: Absolutely, I think customer satisfaction is the key for customer loyalty. As I said before, if you are not satisfied, you wouldn’t come back. There is no loyalty. If they are not satisfied, they will go to another hotel, it means money is gone, your reputation as well.
8. Do you think to measure customer loyalty is very difficult, why?
A: Yes, I think so. It is very difficult to measure it, because there is not a common tool to measure, and customer loyalty is totally intangible, I can't touch it, can I? So, how could I measure it? Normally, we measure it by assess the frequency of a guest’s visit. The higher frequency means the higher loyalty. Another way is to see if the guest is recommended by some regular guest. This is what we can do at the moment.
9. How do you measure customer loyalty?
A: I have already said in the last answer. We have 2 ways to measure it. One is by assessing by how many times the customer come back. Another way is measuring the customer loyalty by how many people visit our hotel by his/her recommendation.
10. In the hotel you are serving, have you got any customer loyalty programmes?
A: Yes, I think we got a plan which is what you are talking about. But, I mean, we have joined the Ctrip.com’s plan like most of others hotel as well. We can share information with others.#p#分頁標題#e#
11. What is the main reason for building customer loyalty programme?
A: Of course, more revenue. Beside this, we can build a customer profile system, which allow us to manage customers’ profile more efficient. We plan to set up individual profile for each customer who has visited our hotel. When next he/she come back, we can provide better service through the system.
12. How do you collect data on customer profile?
A: At the moment, we don’t have any programme to collect customers’ profile, everything is depends on our staff’s personal notes. But, as I said, we are planning a system about this.
13. Do you feel that customer loyalty programmes are successful at creating true loyalty?
A: Can you tell me what the true loyalty is. I mean, maybe, customer loyalty programme is a way to increase customer loyalty, but it is not guaranteed. In our experience, even our system is very old, we can give the regular guest recognition and small gift at the end of their stay. We send greeting cards signed by the general manager to our customer, it really delighted them. So, the loyalty programme is a way to create customer loyalty, but not the only way.
14. Are there any aspects of the customer loyalty programmes that you would change?
A: We still need to go further. I think we should add some facilities for disabled people and a personal safe in each room is a good idea as well. But, I think the most important thing we need to do is to add a customer data base system. It will help us a lot for sure. It will allow us to access customer’s profile easily and make our working to be more efficient.
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