Investigating the relationship between relationship marketing and customer loyalty (case study of selected hotels in Isfahan)

Master's Thesis in Tourism Management

Abstract

Nowadays, the importance of customer orientation has increased even more and it has been presented as the most important competitive advantage of organizations, and its role in the success and progress of businesses is undeniable. The way of doing marketing operations has changed because the fields in which marketing takes place have changed. According to the increasing growth of these changes, now the marketing of interfaces has replaced other approaches of traditional marketing. The position of organizations in today's field full of change and competition depends on accompanying and synchronizing or accepting new methodologies that are developed and expanded. The purpose of this research is to investigate the relationship between relationship marketing and customer loyalty of selected hotels in Isfahan city.

The research is a survey type. The statistical population of this research consists of customers of 3, 4 and 5 star hotels in Isfahan city. And the selected sample was 218 customers of these hotels. The data collection tool was a researcher-made questionnaire, and structural equation modeling and factor analysis were used to analyze the data. The validity of the questionnaire has been confirmed by a number of respected professors, and its reliability has been measured by Cronbach's alpha.

The findings of this research show that there is a significant relationship between relationship marketing and customer loyalty of selected hotels in Isfahan. Also, there is a direct and meaningful relationship between the aspects of relationship marketing and the loyalty of selected customers of Isfahan city.

Keywords: relationship marketing, customer loyalty, trust, commitment, communication, conflict management, competence

Introduction

Today, the intensification of competition in production and service fields is observed all over the world. Increasing competition in the field of services, in industries such as hotel, banking, insurance, etc. It is quite evident and this factor makes it more and more difficult to keep customers and increase their loyalty in this space. Therefore, providing quality services will be the main and future challenge of companies active in this field. However, providing customer satisfaction, especially in the field of services, depends on the provision of quality services. Based on the research results of researchers including Cronin and Brady [1] (2000), Fullerton [2] (2003) and . In service organizations, service quality is one of the most important effective factors in increasing the level of customer satisfaction and, as a result, customer loyalty. The service sector is undergoing changes that it has not experienced before in its history. These changes have had a tremendous impact on both the structure of the industry and the nature of competition. It is not surprising that, in this turbulent environment of accelerating change, organizations are forced to change the way they respond to the market, to focus less on products and more on customers and relationships, and to take a long-term rather than a short-term view. The intensity of competition and its complexity have forced many organizations to accept the new worldview of the concept of marketing, that is, relationship marketing. In this research, the relationship between relationship marketing and customer loyalty of selected hotels in Isfahan city has been investigated.

In this chapter, the description and statement of the research problem, the necessity and applications of the research, the goals and hypotheses of the research, the research method, the spatial and temporal domain, and the theoretical and operational definitions of the research words have been discussed. because this will reduce marketing and operational costs and increase profitability. In every organization, both production and service, customers are the most important factor for maintaining and survival of the organization. If the organization can succeed in creating loyalty by satisfying the customers, it can prepare the ground for its long-term growth and survival, which is only possible with management study and planning, and its introduction is complete understanding of the customers' wishes (Amini and Sohrabi, 2018). In the field of services, loyalty has been used to describe a customer's desire to continue working with a company for a longer period of time, to purchase and use its products and services repeatedly and preferably exclusively, and to voluntarily recommend the company's products to friends and colleagues (Lovelock Variety [3], 2011). Customer loyalty is one of the concepts that will lead to the success of organizations in today's competitive world.Loyal customers tend to buy and spend more time and money, and for this reason, organizations try to keep customers close to them in the form of loyalty programs. Customer loyalty has many benefits, such as the fact that the company can earn more income, or customers who are familiar with the product pass their satisfaction to other friends, and it also enables the consumer to make purchases through other channels such as the Internet, and this will reduce costs and increase the consumption of products (Amini and Sohrabi, 2019). Customer loyalty is generally divided into attitudinal loyalty and behavioral loyalty (Aydin and Erez 2005). Attitudinal loyalty describes the customer's attitude towards loyalty by measuring the customer's taste, purchase intention, supplier prioritization and the desire to be introduced, on the other hand, behavioral loyalty is related to the share of purchases, the frequency of purchases (Aydin and Ezer [4], 2005). Nowadays, attracting new customers is much more expensive than keeping existing customers. In order to be more efficient and effective, organizations seek to cultivate and create strong, beneficial, deep and long-term relationships with their customers. This logically requires knowledge and awareness about current customers and potential profitability of customers, customer service and product preferences, channels and priorities for contacting customers and measuring them. It also requires integrating and customizing customer interactions at all customer contact points and the ability to predict their needs in order to provide additional sales and side sales to special customers (Motmani and Jafari, 2018). Relationship marketing includes activities aimed at developing long-term and cost-effective relationships between organizations and their customers, in order to create mutual benefits for both parties (Lovelock and Wright, 2011). Each customer has a unique value to the organization, and relationship marketing can help segment existing customers based on their value to the organization. With all these interpretations, few organizations are able to use the elements of interface marketing to understand customers. Although relationships have mutual benefits, many organizations still adjust their marketing strategy based on old ideas (Motmani and Jafari, 2018). A complete knowledge of the customer, the needs and demands of the customers requires establishing a close relationship with the customers, the main goal of relationship marketing is to create close and long-term relationships in order to fully understand and know the customer and ensure his satisfaction (Dubisi and Wah, 2005).

In this research, according to the model of Dubisi and Wah [5], the variables of trust, commitment, communication, conflict management and competence are examined as the main and fundamental variables of relationship marketing.

Using relationship marketing in the hotel industry can optimize services and create more benefits for customers, therefore conducting research on the implementation of this marketing in Isfahan hotels can help to identify the situation to what extent the managers of Isfahan hotels know about the concept of relationship marketing and to what extent they have prepared the hotel personnel for such an approach. Therefore, this research determines the relationship between relationship marketing and customer loyalty of selected hotels in Isfahan.

In this research, relationship marketing dimensions that significantly place the customer at the center of their goals are classified into 5 dimensions. These 5 dimensions are: commitment, trust, communication, conflict management and competence. The challenge that has been addressed in this research is whether there is a relationship between the dimensions of relationship marketing and customer loyalty of selected hotels in Isfahan. Based on the above, model 1-1 is considered.

Commitment

Communication

Competence

Customer loyalty

Relationship marketing

Management

Conflict

Trust

1-2- The importance and value of research

The hotel industry is one of the most competitive industries, and hotel management is bound to identify the factors that make up their competitive advantage and strengthen them.  Naturally, in such a situation, traditional marketing strategies are not enough to achieve competitive advantages and maintain them, and new methods of re-evaluation are needed. The basis of these new methods is customer information.  By maintaining relationship with customers and collecting useful information from them, we can find out what kind of value our targeted market segment is really looking for in a product or service (Ahmadi and Yahyazadeh Far, 2019).