International Journal of Applied Research & Studies

ISSN 2278 9480

Research Article/Survey

Customer Relationship Management and Tourism Industry, Study of

Correlation among Different Elements of CRM and Perceptual Differences
of Domestic and Outside Tourists

Authors:
1

Shakeel Ahmad Sofi*, 2 Shabir Majeed Bhat,

3

Javaid Ahmad Rather

Address For correspondence:

1
2

Research Scholar, Department of Management Studies, Central University of Kashmir, (J&K) India
Coordinator Projects, Jammu and Kashmir Entrepreneurship, Institute Sempora, Pampore (J&K) India
2
Banking Associate Jammu and Kashmir Bank, Budgam, Kashmir (J&K) India.

Abstract:
Customer relationship management is an important concept and it has greater role in tourism industry. Customer
relationship is not only about removing defections in ones own business process but how you maintain the
panel of satisfied customers ,how you are able to build strong relationship with your customers, how you are
able to transform prospect and potential customer into not only a loyal customer rather taking him to a partner
level. This study stresses on the level of customer relationship present in tourism industry in Srinagar City
where focus has been on relationship between Customer and Hotel Management. A 32 item Questionnaire has
been used to collect data from different hotels in Srinagar and it major five elements of CRM including
Customer Interaction Capability, Customer Relationship upgrading capability, Customer Win back strategies ,
CRM technology Updating and customer orientation strategies , the findings show that there significant
perceptual difference between Outside and domestic customer towards these components
Keywords: Customer Relationship Management, Challenges, Zero Defection.
INTRODUCTION
Initially the corporate were concerned only about making profits and customer needs were given less
importance and the historical concepts that used to be objectives of any business were like Selling Concept,
Product Concept, and Production concept which was basically a supply concept where people believed that
supply will create its own demand and hence go on producing as much as possible and the product concept
focused mainly on high quality product features which would definitely increase the cost of production and
hence price and as a result of high price would separate some customer groups from the potential customers list
but as time passed there started changes in policies of the business and people started giving due consideration
to customer and one of the important measures was Marketing Concept-What should be product, What should
be price, Where product is to be launched and how it is to be promoted to make customer aware about the
product itself and its features as well. So slightly the customer orientation got changed it was Mass Marketing
Initially where you as a company would go on producing as much as possible on large scale for huge no of
customers considering they are having same needs like rice for North India then from Mass Marketing policy
changed to a narrow customer segment know as segmentation where markets were segmented on the basis of
Geographic, demographic, psychographic and in Geographic segmentation customers were divided on the basis
of geography like Urban and Rural. Demographics included segmenting customers based on factors like age,
income, family style etc and Psychographic segmentation segmented customers on the basis of life style,
shakeel.sofi@ymail.com * Corresponding Author Email-Id

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personality and value system. But the customer orientations started getting more importance and
there came the concept of Customization One-to-One Marketing, not producing what company thinks but what
customers want and creating a process where company would be in a position to know more about the
individual customers needs and responds to customer complaints. The main aim of all these processes like
marketing, segmenting, customization is one that is Customer Retention and when we talk about Customer
Relationship Management its main purpose is Customer Retention .Customer Relationship Management is to
create loyal customers, it is not about creating happy customers but creating delighted customers. Customer
Relationship Management focuses on how to reduce defection in the production process because it is costly to
create new customers than maintaining loyal customers. Customer Relationship Management is a process
wherein focus is to make our suspected, first line, repeated and advocates our own partners. The main purpose
of customer relationship management is to created loyal customers, reduce the defection if any present in the
system so to have not only satisfied customers but much delighted advocates and partners. This process of
turning suspected customers into partner is shown in fig.1. This fig.1 shows what happens in business process,
first we have potential customer and he becomes our prospect and then if goes for any purchase of our products
he becomes our first line customer and if we are customer focused i.e. we want to have a deep customer
relationship then we would like our first line customer to repeat purchase and then become our client i.e. people
to whom company gives special treatment. The next challenge is to turn clients into members by starting a
membership program that offers special benefits to customers who join and turn them into advocates who
recommend the company, its products and services to others. The ultimate challenge is to turn them into
partners (Kotler, 3rd Edition). Several studies have been conducted where Levy and Weitz, authors of Retailing
Management [2007] define CRM as, A business philosophy and set of strategies, programs, and systems that
focuses on identifying and building loyalty with a retailers profit table customers.In words of Parvatiyar and
Seth (2001), CRM is a Comprehensive strategy and process of acquiring, retaining, and partnering with
selective customers to create superior value for the company and the customer. Greenleaf and Winer (2002)
have explained CRM as, Customer Relationship Management is a business strategy to select and manage
customers to optimize long-term value.Maninder S Gerewal, Managing Director, Religare Technova, (2007)
saysThe primary driver is the need to change tracks to be able to grow in the current economic environment.
The growth in the previous years meant focus on increased production and enhancing services delivery. This
focus has now changed to customer need and customer retention and the ability to cross-sell in an identified
target customer base. Dwivedy of Microsoft (2009) says, Today, getting new customers is a problem.
Retaining them is even harder, which is in direct proportion to the growth factor of CRM.( SRM
MANAGEMENT DIGEST 2010, April - 2010 ,Volume: 8).

POTENTIAL

PROSPECT
FIRST LINE CUSTOMER
INACTIVE OR
EX-CUSTOMER

REPEAT CUSTOMER

CLIENTS
MEMBERS
ADVOCATES
PARTNER

Fig.1: Figure taken from Philip Kotlers book of Marketing Management

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RESEARCH OBJECTIVES:
1. To see the perception of Domestic and International Tourists towards Customer interaction management
capability in Hotel Industry in Srinagar.
2. To see the perception of Domestic and International Tourists towards Customer relationship upgrading
capability in Hotel Industry in Srinagar.
3. To see the perception of Domestic and International Tourists towards Customer win-back capability in
Hotel Industry in Srinagar.
4. To see the perception of Domestic and International Tourists towards Customer orientation in Hotel
Industry in Srinagar.
5. To see the perception of Domestic and International Tourists towards CRM technology in Hotel Industry
in Srinagar.
6. To find relationship among different elements.
7. To suggest measures so as to have high level achievement of CRM components.
HYPOTHESIS
H1: There exists no perceptual difference between Domestic and outside tourist regarding Customer Interaction
Management Capability in Hotel Industry Srinagar.
H2: There exists no perceptual difference between Domestic and outside tourist regarding Customer
relationship upgrading capability in Hotel Industry Srinagar.
H3: There exists no perceptual difference between Domestic and outside tourists regarding Customer win Back
Capability in Hotel Industry in Srinagar.
H4: There exists no perceptual difference between Domestic and outside tourist regarding Customer
Orientation in Hotel Industry in Srinagar.
H5: There exists no perceptual difference between Domestic and outside tourist regarding CRM Technology
forgenerating loyal customer in Tourism Industry.
H6: Domestic and Outside tourists will report same overall satisfaction.
H7: There is no correlation among different components of CRM being discussed in this study.
METHODOLOGY:
A sample of 160 was randomly chosen and sample here were both Domestic and International Tourists and area
of Study was Srinagar City. The instrument carrying 32 items used by Yonggui Wang, Hui Feng, Customer
relationship management capabilities Measurement, antecedents and consequences was transformed and
utilized to get response from Tourists. Mann-Whitney U test was used to test first seven hypothesis and
correlation was used to analyze the relation among different components. All this was done in SPSS. First pilot
study was conducted on 30 hotels to check reliability, accordingly reliability analysis reported strong
chronbachs alpha whose readings are given below:-

Reliability statistics
Cronbach's
Alpha

N of Items

.735

32

The reasons for using Mann-Whitney U test were actually the variables i.e dependent non-metric variable which
was compulsive buying in this case which has been measured on 5-Point liker scale and other variable being
metric i.e. tourist whether domestic or outside , the overall results reveal average achievement of customer
relationship management .These 29 items categorized into five different components are Customer Interaction

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International Journal of Applied Research & Studies

Capability( Q1-Q5) ; Customer relationship Upgrading Capability (Q6-Q9) ;Customer Win back strategies
(Q10-Q13) ; Customer Orientation strategies ( Q14-Q17) ;CRM Technology (Q.18-Q21) and Overall
satisfaction with Hotels (Q.22-Q30 ) and finally Demographics (Q31 and Q32).The analysis was carried on type
of tourist and CRM Components and here in this study Outside tourists respondents are 63 and domestic being
97.
Mann-Whitney U Test Statistics
Table1: Ranks

Customer
Interaction

CUSTOMER
UPGRADING

CUSTOMER
WINBACK

CUSTOMER
ORIENTATION

CRM
TECHNOLOGY

CUSTOMER
SATISFACTION

TOURIST

Mean Rank

Sum of Ranks

Domestic

97

88.96

8629.00

Outside Tourist

63

67.48

4251.00

Total

160

Domestic

97

78.24

7589.50

Outside Tourist

63

83.98

5290.50

Total

160

Domestic

97

89.53

8684.50

Outside Tourist

63

66.60

4195.50

Total

160

Domestic

97

80.49

7808.00

Outside Tourist

63

80.51

5072.00

Total

160

Domestic

97

92.48

8971.00

Outside Tourist

63

62.05

3909.00

Total

160

Domestic

97

88.55

8589.50

Outside Tourist

63

68.10

4290.50

Total

160

Table.2
CUSTOMER

CRM

CUSTOMER

Customer

CUSTOMER

CUSTOMER

interaction

UPGRADING

WINBACK

Mann-Whitney U

2235.000

2836.500

2179.500

3055.000

1893.000

2274.500

-2.871

-.767

-3.066

-.002

-4.103

-2.729

Sig. (2-tailed)

.004

.443

.002

.999

.000

.006

ORIENTATION TECHNOLOGY

SATISFACTIO
N

H1: Both Domestic and Outside tourist report same satisfaction level with Customer interaction
management capability prevalent in Hotels.
To determine whether Domestic and outside tourist differ in their perception, Mann Whitney Test on Tourist
and Customer Interaction Management Capability was done .Man Whitney U test results are given above in
table 1 and table 2.Note that Z value is (-2.871) ,but at 0.05 significance level , Z is +1.96 and -196 which
means our calculated value does not lie in the acceptance region hence we reject our null Hypothesis that both
Domestic and Outside Tourist report same satisfaction with customer interaction management capability ,hence
both differ towards Interaction capability prevalent in Hotel Industry. Table 1 clearly depicts that domestic
customers show more satisfaction with customer interaction management capability than Outside tourists.

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H2: Both Domestic and Outside tourist report same satisfaction level with Customer Relationship
Upgrading capability prevalent in Hotels.
Again ANOVA was used to test this hypothesis and from fig.2 we can see that Z is (-0.767) which lies
between 1.96 and -1.96,Which lead to acceptance of Null Hypothesis that both domestic and outside tourists
report same satisfaction level with Customer upgrading capability prevalent in Hotel Industry.
H3: Both Domestic and Outside tourist report same satisfaction level with Customer Win back
capability prevalent in Hotels.
Again ANOVA was used to test this hypothesis and from fig.2 we can see that Z is (-3.066) which does not lie
between 1.96 and -1.96)
Which lead to rejection of Null Hypothesis that both domestic and outside tourists report same satisfaction level
with Customer Win back capability prevalent in Hotel Industry and hence they dont .
H4: Both Domestic and Outside tourist report same satisfaction level with Customer Orientation
capability prevalent in Hotels.
Analysis of Variance was used to test this hypothesis and from fig.2 we can see that value of Z is (-.002)
which falls in-between 1.96 and -1.96 Which lead to acceptance of Null Hypothesis that both domestic and
outside tourists report same satisfaction level with Customer orientation capability prevalent in Hotel Industry.
H5: Both Domestic and Outside tourist report same satisfaction level with CRM technology prevalent in
Hotels.
Again ANOVA was used to test this hypothesis and from fig.2 we can see that value of Z is (-4.103) which
does not lie in-between +1.96 and -1.96 and hence we reject our null hypothesis that both domestic and
outside tourists report same satisfaction level with CRM prevalent in Hotel Industry which not the case.
H6: Both Domestic and Outside tourist report same results regarding overall satisfaction prevalent in
Hotels.
As we can see in Table 2 ,we can see that the value of Z is (-2.729) which does not lie between +1.96 and -1.96
and hence we reject our null hypothesis and accordingly results show that both domestic and outside customers
report difference in their overall satisfaction towards Hotel industry in Srinagar.
CORRELATION ANALYSIS
Table 3: Correlation Table
CUSTOMER CUSTOMER
CUSTOMERU CUSTOMER ORIENTATIO SATISFACTI
PGRADING
WINBACK
N
ON

Customer
interaction
Customer
Interaction

Pearson Correlation

Sig. (2-tailed)

.646

.710

.563

.865

.000

.000

.000

.000

160

160

160

160

160

CUSTOMER Pearson Correlation

UPGRADING Sig. (2-tailed)

.646

.615

.695

.794

.000

.000

.000

160

160

160

160

160

Pearson Correlation

.710

.615

.585

.834

Sig. (2-tailed)

.000

.000

.000

.000

160

160

160

160

160

CUSTOMER Pearson Correlation

ORIENTATIO Sig. (2-tailed)
N
N

.563

.695

.585

.759

.000

.000

.000

160

160

160

160

160

CUSTOMER Pearson Correlation

SATISFACTIO Sig. (2-tailed)
N
N

.865

.794

.834

.759

.000

.000

.000

.000

160

160

160

160

CUSTOMER
WINBACK

.000

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H8: There is no correlation among different components of CRM being discussed in this study.
The correlation table 3 depicts relation among different elements indicated by Pearson Correlation and Sig.
indicates the p(value) and based on this value which if you see in same table is less than the significance level
of 0.05 .Accordingly we reject our hypothesis that there is no correlation among different components of CRM
but figures above does show significant relationamong different elements.
RECOMMENDATION:1. Hypothesis H1 clearly indicates that domestic and outside tourists show difference in Customer Interaction
Capability and as can be seen from table 1 ,Domestic tourists show more satisfaction than outside tourists
which indicates that there is problem in problem in interaction with customer primarily with outside
customer because number of cultural differences ,so Hotel management must arrange training sessions for
employees where in their customer interaction skills will be upgraded.
2. Hypothesis H2 indicates that outside tourists feel more satisfied with customer relationship up grading
capabilities in Hotel Management, it may be mainly because domestic customers dont feel any customer
relationship upgrading in terms of i.e cross selling and up selling. So these factors needed to be given due
importance Shopping Malls can be added advantage.
3.

Analysis of hypothesis H5 indicates that CRM Technology must be upgraded for outside customer as well,
this can include online customer relationship executives who can solve problems of outside tourist online
like we have in telecommunications where such things are done to have zero defections to have highly
satisfied customers.

4. Outside tourists also feel difference in Win Back strategies and we must try to make our first line customer
not only repeat customers or Advocates but take them to greater extension of win back strategy i.e make
them Partners.
5. Correlation Matrix shows positive relation among all elements and overall satisfaction, so all these
components including Customer Interaction Capabilities, Customer Relationship capabilities, Customer Win
Back , CRM Technology updation should be done and increased to greater extent to have greater overall
customer satisfaction. There should be zero defection system in place wherein complains and problems if
customer is facing be solved within no time.
6. Policy of sales should changed from profit maximization to sales maximization and due focus should on
customer repeat and it should not happen that if we have a first line customer and we are trying to get
everything from him in just one meeting which leads to failure of repeats.

References:
1. Armstrong, J.S. and Overton, T.S. (1977), Estimating nonresponsive bias in mail surveys, Journal of
Marketing Research, Vol. 17 No. 3, pp. 396-402.
2. Aaker, D.A. (1991), Managing Brand Equity, The Free Press, New York, NY.
3. Agrawal, M.L. (2003), Customer relationship management (CRM) & corporate renaissance,
Journal of Service Research, Vol. 3 No. 2, pp. 149-71.
4. Baran RJ, Galka RJ, Strunk DP (2008). Principles of customer relationship management. Mason: Thomson
South-Western.

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5. Berndt A, Du Plessis L, Klopper HB, Lubbe I, Roberts-Lombard M (2009). Starting out in marketing.
Roodepoort: Future Vision Business Consultants.
6. Becker, J.U., Greve, G. and Albers, S. (2009), The impact of technological and organizational
implementation of CRM on customer acquisition, maintenance, and retention, International Journal of
Research in Marketing, Vol. 26, pp. 207-15.
7. Bagozzi, R., P. (1995) Reflections on Relationship Marketing in Consumer Markets Journal of the
Academy of Marketing Science, 23 (fall), pp. 272-277.
8. Churchill, G.A. Jr (1979), A paradigm for developing better measures of marketing constructs, Journal of
Marketing Research, Vol.16 No. 1, pp. 64-73.
9. Conant, J.S., Mokwa, M.P. and Varadarajan, R.P. (1990), Strategic types, distinctive marketing
competencies and organizational performance: a multiple measures-based study, Strategic Management
Journal, Vol. 11 No. 5, pp. 365-83.
10. Egan J (2004). Relationship marketing, exploring relational strategies in marketing. 2nd edition. Essex:
Pearson Education Limited.
11. Fornell, C. and Larcker, D.F. (1981), Evaluating structural equation models with unobservable variables
and measurement error, Journal of Marketing Research, Vol. 18, February,pp. 39-50.
12. Grnroos C (2003). Service management and marketing a customer relationship management approach. 2 nd
edition. West Sussex: Wiley.
13. Hunt, S.D. and Morgan, R.M. (1995), The comparative advantage theory of competition, Journal o f
Marketing, Vol. 59 No. 2, pp.1-15.
14. Jayachandran, S., Sharma, S., Kaufman, P. and Raman, P. (2005), The role of relational information
processes and technology use in Customer relationship management, Journal of Marketing, Vol. 69,
October, pp. 177-92.
15. Meagher. (2002), CRM technology yet to find true use, Australian Financial Review, Vol. 17, p. 1.

Book:
Philip Kotler, Kevin Lane Keller, Abraham Koshay and Mithileshwar Jha, Marketing
Management, a South Asian Perspective.
ANNEXURE A
Respondents were asked to read the instructions carefully and details of Instrument Used in this study
are given below:
For Respondents: Kindly devote your few minutes to help complete this survey and in this questionnaire you
are being indirectly asked about the service provided by Hotels in Srinagar and this survey is being carried to
know the achievement level of customer relationship management in these hotels and accordingly provide
suggest measures for the development of Tourism and Hotel industry in particular. There is no right or wrong
answers please tick the option that you feel more suitable.

1.

We regularly meet customers to learn their current and potential needs for new products .
Strongly
Agree

Agree

Undecided

Disagree

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Strongly
Disagree

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2.

We are good at creating relationships with key customers.

Strongly
Agree

3.

Agree

Undecided

Disagree

Strongly
Disagree

Agree

Undecided

Disagree

Strongly
Disagree

Agree

Undecided

Disagree

Strongly
Disagree

Agree

Undecided

Disagree

Strongly
Disagree

Agree

Undecided

Disagree

Strongly
Disagree

Agree

Undecided

Disagree

Strongly
Disagree

Agree

Undecided

Disagree

Strongly
Disagree

We have a systematic process/approach to reestablish relationships with valued lost customers and inactive
customers.
Strongly
Agree

12.

Strongly
Disagree

We apologize or compensate in time for the inconvenience or lost that we bring to customers .
Strongly
Agree

11.

Disagree

We try to systematically extend our share of customers with high-value customers.

Strongly
Agree

10.

Undecided

We have formalized procedures for cross-selling to valuable customers

Strongly
Agree

9.

Agree

We have formalized procedures for up-selling to valuable customers.

Strongly
Agree

8.

Strongly
Disagree

We measure customer satisfaction systematically and frequently .

Strongly
Agree

7.

Disagree

We are good at maintaining relationship with key customers.

Strongly
Agree
6.

Undecided

We have a continual dialogue with each customer and use well developed methods to improve our
relationships.
Strongly
Agree

5.

Agree

We maintain an interactive two-way communication with our customers.

Strongly
Agree

4.

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Agree

Undecided

Disagree

Strongly
Disagree

When we find that customers are unhappy with the appropriateness of our product or service, we take
corrective action immediately.

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Strongly
Agree

13.

Strongly
Disagree

Agree

Undecided

Disagree

Strongly
Disagree

Agree

Undecided

Disagree

Strongly
Disagree

Our employees are encouraged to focus on customer relationships.

Strongly
Agree

16.

Disagree

In our organization, retaining customers is considered to be a top priority .

Strongly
Agree

15.

Undecided

We maintain positive relationships with migrating or unattractive customer on a regular basis.

Strongly
Agree

14.

Agree

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Agree

Undecided

Disagree

Strongly
Disagree

In our organization, customer emphasizes the importance of customer relationships .

Strongly
Agree

Agree

Undecided

Disagree

Strongly
Disagree

17.

Our senior management emphasizes the importance of customer Relationships.

Strongly
Agree
Undecided
Disagree
Strongly
Agree
Disagree

18.

We invest in technology to acquire and manage real time customer information and feedback .
Strongly
Agree

19.

Disagree

Strongly
Disagree

Agree

Undecided

Disagree

Strongly
Disagree

We have technologies that allow for one-to-one communications with potential customers.
Strongly
Agree

21.

Undecided

We have a dedicated CRM technology in place.

Strongly
Agree

20.

Agree

Agree

Undecided

Disagree

Strongly
Disagree

Relative to out competitors the quality of our information technology resources is larger.
Strongly
Agree

Agree

Undecided

Disagree

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Disagree

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22.

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How convenient is our company to use?

Extremely convenient
Very convenient
Moderately convenient
Slightly convenient
Not at all convenient
23. How professional is our company?
Extremely professional
Very professional
Moderately professional
Slightly professional
Not at all professional
24. Compared to our competitors, is our product quality better, worse, or about the same?
Much better
Somewhat better
Slightly better
About the same
Slightly worse
Somewhat worse
Much worse
25. Compared to our competitors, are our prices more reasonable, less reasonable, or about the same?
Much more reasonable
Somewhat more reasonable
Slightly more reasonable
About as reasonable
Slightly less reasonable
Somewhat less reasonable
Much less reasonable
26. How responsive is our company?
Extremely responsive
Very responsive
Moderately responsive
Slightly responsive
Not at all responsive
27. How well do the customer service representatives at our company answer your questions?
Extremely well
Very well
Moderately well
Slightly well
Not at all well

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28. Overall, are you satisfied with the employees at our company, neither satisfied nor dissatisfied
with them, or dissatisfied with them?
Extremely satisfied
Moderately satisfied
Slightly satisfied
Neither satisfied nor dissatisfied
Slightly dissatisfied
Moderately dissatisfied
Extremely dissatisfied
29. Do you like our company, neither like nor dislike it, or dislike it?
Like a great deal
Like a moderate amount
Like a little
Neither like nor dislike
Dislike a little
Dislike a moderate amount
Dislike a great deal
30. How likely are you to recommend our company to people you know ?
Extremely likely
Very likely
Moderately likely
Slightly likely
Not at all likely
31. Whether domestic tourist or Outside Tourist.
a. Domestic

b. Outside

32. Please mention your gender.

a. Male

b. Female

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