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Customer relationship management in a hotel

Literature Review
The Evolution of Marketing During the industrialisation era of the 1920s, the marketing theory pointed particularly to mass marketing because of the nature of mass manufacturing and inception of mass marketing use (radio). The concept continued to expand through the 40s and 50s. It gave corporations an opportunity to approach a wide customer with different needs into buying the same product. Mass manufacturing created a gap between firms and customers. From the firms perspective, customisation was not economically viable and did not promise greater profits. Moreover, firms were not open to customerfeedback. Therefore, there was a lack of understanding about the customer service or their needs from the product apart from functionality and durability. Services marketing pioneers proposed the concept of relationship marketing as means to narrow the gap between companies and their customers. Leonard Berry was the firstscholar in services marketing who coined the phrase relationship marketing (Berry, 1983). However, the concept had been oriented towards how to acquire customers (Storbacka et al., 1994). As a result, such relationships are not necessarily long term relationships where profitability is the main goal of the relationship.

What is Customer Relationship Management? Customer relationship management is a business strategy to identify, cultivate, and maintain long-term profitable customer relationships. It requires developing a method to select your most profitable customer relationships and working to provide those customers with service quality that exceeds their expectations. (McDonald, 2002). CRM and Service Quality Service quality is essential for an organizations survival and growth. According to (Reichheld and Sasser, 1990; Parasuraman et al., 1985; Dawkins and Reichheld, 1990) providing a good quality of service is considered as the key to success in todays competitive business environment. Service quality is a form of attitude representing a long-run, overall, evaluation, which is different from customer satisfaction, a more short term, transaction specific judgment. The Customer Satisfaction-Retention-Loyalty Chain (SRLC) The satisfaction-retention-loyalty-chain (SRLC) is a key concept that needs to be understood due to its link to customer relationship management (CRM). The concept has been popular since the early 1990s, when measuring and managing customer satisfaction became important to companies (Heskett 1994). The key point is that improving the performance of service attributes will generate satisfaction (Mousavi 2001). Increased customer satisfaction levels will lead to greater customer retention rate, which is a key determinant for customer loyalty, which may increase the expected profit.

Figure 1: The service quality-customer behaviours chain

Customer satisfaction According to Anderson ( 1994 ), as customer satisfaction increases, customers repurchase intention increases as well. Customer satisfaction may be defined as the customers fulfillment response to a consumption experience. Customers would be satisfied if the outcome of the service meets expectations. Customer satisfaction is considered to be one of the most important outcomes of all marketing activities in a market-oriented firm. Moreover, Looy et al.(2003) defined customer satisfaction as the customers feeling regarding the gap between his or her expectations towards a company product or service and the perceived of the company product or service. Customer Loyalty Customer loyalty can be define as customer behavior characterized by a positive buying pattern during an extended period (measured by means of repeat purchase, frequency of purchase, wallet share or other indicators) and driven by a positive attitude towards the company and its products or services (Looy, Gemmel & Dierdonck, 2003).