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Archives of Business Research – Vol. 9, No. 6
Publication Date: June 25, 2021
DOI:10.14738/abr.96.10355. Pathmananathan, P. R., & Aseh, K. (2021). An Analysis of How Relationship Marketing Influences Customer Choice of Hotel Industry.
Archives of Business Research, 9(6). 191-202.
Services for Science and Education – United Kingdom
An Analysis of How Relationship Marketing Influences Customer
Choice of Hotel Industry
P. Ravindran Pathmananathan
Unies Group
Khairi Aseh
Unies Group
ABSTRACT
Relationship marketing has been recognised as an excellent way to build an
exclusive long-term relationship with their customers in today's dynamic global
industry.However, many institutions fail to systematically gauge and track
customer satisfaction and the factors shaping it. An increasing number of
institutions are making customer satisfaction a main concern. The aim of this study
is to highlight the importance of customer satisfaction in the service industry.This
study was carried out via a questionnaire involving 200 customers of hotel located
in urban areas namely, Georgetown, Penang. It can be concluded that there is a
positive relationship between customer satisfaction and customer retention.
Thus,the higher the level of customer satisfaction the higher the likelihood a
customer will repeat staying at the hotel and recommend hotels to others.
Keywords: Relationship Marketing, hotel, industry, customer, satisfaction, retention
INTRODUCTION
Marketing's focus is moving away from transactional marketing and toward relationship
marketing. Companies are starting to understand the economic benefit of secure, long-term
consumer relationships based on high levels of customer loyalty, confidence, engagement, and
retention, but marketing is perceived as a process over time rather than a sequence of
unconnected events.
In today's major industries, business is no longer about designing, selling, and distributing
goods, as it once was (Gilbert & Choi, 2003). Advocates of the conventional 4Ps marketing
strategy, i.e. price, product, location, and promotion, which relied on twigging one or more
marketing mix elements, have had unpleasant experiences of treating consumers as a "bunch"
of homogeneous market segments (Ahmad, 2000). It was discovered that Dutch Bank
capitalised on its popularity in its campaign to attract new customers by giving them cash
incentives. This bank learned later that the same customers had left the bank after the minimum
stay period had expired. As a result, conventional marketing does not properly capture the core
elements that must be emphasised in order to establish and maintain long-term relationships.
According to Gilbert and Choi (2003), relationship marketing is based on the assumption that
satisfying and maintaining clients makes economic sense because the strength and length of the
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Archives of Business Research (ABR) Vol. 9, Issue 6, June-2021
Services for Science and Education – United Kingdom
relationship is directly proportional to the resulting profitability.Furthermore, if an institution
develops and retains positive consumer relationships, it will be difficult for rivals to replace it,
providing a long-term competitive advantage. According to Zineldin (1999), successful
marketers view a first-time sale not as the end of a phase, but as the beginning of an
organization's partnership with a consumer. He goes on to argue that in order to protect added
value, a business must build and sustain long-term customer relationships.
Overview of Hotel Industry
A hotel operation's management is considered a major business operation. Larger hotels may
have a management structure similar to that of a large organisation, with a General Manager
acting as the chief executive, department heads overseeing different divisions, middle
managers, administrative staff, and line-level supervisors.Hospitality management research, a
business degree, and/or credential programmes all prepare hotel managers for work in the
industry.(Fukey.L, Kumar.J , Pathil.J, Kandappan. B, 2016)
Some hotels, such as Schloss Cecilienhof in Potsdam, Germany, have earned their renown
through tradition, by hosting significant events or people, such as the 1945 Potsdam Conference
of World War II allies Winston Churchill, Harry Truman, and Joseph Stalin.Because of its
association with the Indian independence movement, the Taj Mahal Palace & Tower in Mumbai
is one of India's most popular and historic hotels. Some establishments have given a meal or
beverage a name, such as the Waldorf Astoria in New York City, where the Waldorf Salad was
first produced, or the Hotel Sacher in Vienna, Austria, where the Sachertor was first created.
Others, such as the Hotel de Paris, where the crêpe Suzette was invented, and the Raffles Hotel
in Singapore, where the Singapore Sling cocktail was made, have become popular as a result of
dishes or cocktails created on their premises.(Maggon.M & Chaudhry.H, 2018)
A variety of hotels, such as the Ritz Hotel in London, United Kingdom, have become well-known
as a result of their association with Irving Berlin's song "Puttin' on the Ritz."The Algonquin
Hotel in New York City is known for hosting the literary group the Algonquin Round Table, and
Hotel Chelsea, also in New York City, has been the subject of a number of songs and was the site
of Nancy Spungen's stabbing (allegedly by her boyfriend Sid Vicious).In New York City, the
Waldorf Astoria and Statler hotels are both named after Muppets Statler and Waldorf.
(Udunuwara.M, 2015)
According to Previndran Singhe of the Malaysian Association of Hotels (MAH), there are strong
signs of the hotel and resorts industry's potential growth in Asia, with 1.6 billion foreign
travellers expected in the area by 2020, nearly double last year's estimates.However, much of
this is dependent on the type of programmes that are regularly offered to clients. When
customers find a lack of quality service in a hotel, they have the option of moving on to another
hotel, which has an effect on the original hotel's business. (Krataithong. J & Rakrachakarn. P,
2020)
Taking all of these factors into account, there is no question that the hotel industry plays an
important role in the business world, and the industry is developing internationally to meet the
diverse needs of customers. As a result, the right marketing relationship is crucial to keeping
the groups of customers who visit these hotels happy.Many banks around the world use
marketing partnership strategies to ensure that they can retain a pool of clients for long-term
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Pathmananathan, P. R., & Aseh, K. (2021). An Analysis of How Relationship Marketing Influences Customer Choice of Hotel Industry. Archives of
Business Research, 9(6). 191-202.
URL: http://dx.doi.org/10.14738/abr.96.10355
business, and the hotel industry should follow suit, particularly given the current competitive
global trends in the hotel and hospitality industry.This will ensure that customers who visit
these hotels build long-term relationships from which both parties will benefit in the future.
(Oteng.A, 2015)
Objective of this study
(1) To highlight how customer satisfaction lead to customer retention.
(2) To present a detailed critique on how customer satisfaction leads to customer retention.
(3) To evaluate how relationship marketing is important in increasing customer satisfaction
in the hotel industry
LITERATURE REVIEW
Relationship Marketing
Relationship marketing is based on the idea of establishing long-term and long-lasting
relationships with customers through intensified relationships. To make changes, the
traditional disconnected principles of customer management are being altered. Relationship
marketing is concerned with the supervision of a longer relationship with the consumer.This
situation has shown the factual significance of character that relationship marketing can play a
crucial role in certifying performance for marketing decisions in the future. Berry (1983) first
suggested relationship marketing as a long-term and long-lasting marketing technique. It
emphasized a long-term strategy centred on consumer retention. It is focused on keeping
customers who can have long-term benefits and be worthwhile. Relationship marketing focuses
on retaining customers rather than acquiring new customers (Congram,1987).
Barbara Jackson (1985) addressed how relationship marketing was not always successful. In
the opposite case, it would be spectacularly good. “The assertiveness of supporting a connection
with consumers is at the heart of nearly everything we do,” Emily Chien said. She described
relationship marketing as a combination of four factors: product dominance, labelling,
customer service, and detection and reward. “We do our best to ensure that the services and
experiences are based on who you are and what you want, using knowledge to earn consistent
engagement and customer feedback,” Ms. Chien said (Cara, 2001).
According to Aderson and Narus (1991), the operation of relationship marketing is to allocate
resources based on specific client desires. Certain customers need extensive coverage and will
remain with the providers for an extended period of time. Furthermore, some consumers
switch providers for unfavourable reasons. In this situation, the company may help the
customers by approving reduced rates, assuming the customer is willing to accept less service.
As a result, the consumer may be kept as an operational base as an original
partnership.Relationship marketing that is well-organized yields significant long-term and
long-lasting gains. As cited in So and Speece, improved profits contribute to increased
consumer loyalty, greater customer fidelity, motivations to use more and different services,
increased efficiency, and more recommendations (2000).Furthermore, relationship marketing
is synonymous with the uniformly favourable relationship that can be formed between
customers and hotels.
Relationship marketing (RM) aims to maintain and strengthen relationships with consumers
and other revenue-generating activities in order to achieve the goals of the Bashes Convoluted.