CHAPTER I

INTRODUCTION

Due to Globalization, Liberalization, Privatization marketers focused on

traditional mode of marketing to segment and acquire free customers from its
target segments, using the tools and techniques developed for mass marketing in
the industrial era, as a way to engender growth.

In the competitive environments this provides highly in effective. There

is a different approach to business that involves relationship marketing where the
customer is at the centre of all business activity and the organization are how
desperately trying to restructure their processes around the needs of their
strategically significant customers.

The dynamic of the business ecosystem have changed the way in which
the companies and business both are in relationship management and the stream
lining of their operations. Relationship marketing is emerging as the core
marketing activities for business operating in fiercely competitive environments.
In average business, spend six times more to acquire new customers then to keep
them. The good business people have always understood the relationship
between happy customers that come back again and again and creating long term
sustainable profitability, Therefore, many firms are now paying more attention to
their relationship with existing customers to retain them and increase their share
of customers’ purchases. The practice of relationship marketing also has to
potential to improve marketing productivity through improved marketing
efficiencies and effectiveness (Mukesh Chaturvedi, Abhinav Chaturvedi, 2005).

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 Retaining and developing customers has long been a critical success factor
for businesses. In that sense, Customer Relationship Management is not new,
previously falling under the guise of customer’s satisfaction. Worldwide, service
organizations have been pioneers in developing customer’s retention strategies.

Loyalty has become important over the past few years because of the
increased competition within respective industries. Companies infer “loyalty” to
have a similar meaning and have developed strategic marketing and advertising
efforts around creating a connection between the company and its customers.
The hospitality industry, the number of accommodation choices from which
customers can choose cannot be any more apparent. In realizing the ongoing
competitiveness that is to occur the industry, many hotel corporations have
shifted their focus to relationship marketing, particularly through the concept of
loyalty and increased bargaining power consumers are obtaining, hotel
corporations are realizing the key to their success will be to foster strategic
relationship marketing efforts, particularly through the usage of loyalty
measures. As an hotelier in the industry, it is important to offer products or
services that enable sustainability in the industry. At the same time, it is
important to be knowledgeable of the guests who patronize your hotel(s).
Knowing their needs and demands, and utilizing this information for product or
service implementation purposes, will go towards long-term sustainability and
loyalty creation efforts. It is also important to give considerable attention to the
efficiency of the facilities and services provided. Customers expect service to be
delivered in an expedient manner (Danna Liang 2008).

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1.2 What is mean by Customer Relationship Management

Customer relationship management (CRM) refers to the practices,

strategies and technologies that companies use to manage, record and evaluate
customer interactions in order to drive sales growth by deepening and enriching
relationships with their customer bases.

Customer relationship management (CRM) is a term that refers to

practices, strategies and technologies that companies use to manage and analyze
customer interactions and data throughout the customer lifecycle, with the goal
of improving business relationships with customers, assisting in customer
retention and driving sales growth. CRM systems are designed to compile
information on customers across different channels or points of contact between
the customer and the company which could include the company's website,
telephone, live chat, direct mail, marketing materials and social media. CRM
systems can also give customer-facing staff detailed information on customers'
personal information, purchase history, buying preferences and concerns.

Definition of Customer Relationship Management

(i) Berry defined relationship marketing as “attracting, maintaining and

enhancing customer relationship”.
(ii) Gronroos has expressed that “the goal of relationship marketing is to
establish, maintain and enhance relationships with customers and other
parties at a profit as such the objectives of the parties involved are met”.
(iii) “Relationship marketing is an integrated effort to identify, maintain and
build up a network with individual consumers and to continuously
strengthen the network for the mutual benefit of both sides, through
interactive , individualized and value-added contracts over a long period
of time” - Shani and Chlalasani.

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1.3 COMPONENTS OF CUSTOMER RELATIONSHIP MANAGEMENTS

1.3.1 Customer Trust

Firm belief or confidence in honesty, integrity, reliability, justice of

another person or thing. Confident expectation, anticipation, or hope as in trust
in the future. Most companies believe they are trustworthy but only measure up
to the first definition. They want to be known as a company that is honest,
reliable and fair. They expect their products live up to expectations and when
they don't, they think, they treat customers equitably. Customer trust is a
precondition for prosperity. Yet, most businesses act as if customer trust
develops because the business believes it is honest. Build only a shallow type of
trust that does not lead to profitable relationships and loyalty. Where customers
increasingly value the relationship. Now is an excellent time to aggressively and
systematically work at building customer trust. Virtually all businesses have
been tainted by the general rise in societal distrust of companies.

The growth of the hotel industry has allowed for information intensive,
intangible and impersonal characteristics on the hotel’s website thereby creating
uncertainties to customers. Alternatively, previous research suggests that
customers’ preferences can be easily influenced by information cues that
facilitate the creation of initial trust. Hotel related attributes such as; accuracy
and reliability of information content on the hotel’s website, price, advertising,
distinct features, brand name, logo, symbol, etc., serve as cues for customers to
develop initial trust (John Todor Augu 2006).

1.3.2 Management Activity

Welcoming the hotel customer and answering their customer enquiries,

serving customer and helping their hotel customers to achieve the customer
satisfaction. First and foremost, to enhance service employees to conduct

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customer- oriented behaviors, Organizations have to develop an appropriate
working environment for service in work, for instance, providing staff with the
modern tools, and technology, customer-satisfaction tracking and complaints
Management systems, inspirational leadership, and appropriate rewards systems.
As a result of the previous supportive working conditions, organizations can
ensure the required customer (Abdul Alem Mohammed, Basri Bin Rashid 2012).

1.3.3 Customer Retention

Customer retention is the activity that a selling organization undertakes in

order to reduce customer defections. Successful customer retention starts with
the first contact a hotel has with a customer and continues throughout the entire
lifetime of a relationship. Hotel ability is to attract and retain new customers, is
not only related to its product or services, but strongly related to the way it
services its existing customers and the reputation it creates within and across the
hotel place.

Customer retention is more than giving the customer what they expect.
It’s about exceeding their expectations so that they become loyal advocates for
your hotel customer. Creating puts customer ‘customer value rather than
maximizing profits and shareholder value at the center of the business strategy’
the key differentiation in a competitive environment is often the delivery of a
consistently high standard customer service (Reicheld, Frederick, 1996).

Customer retention refers to the percentage of customer relationships that,

once established, a business is able to maintain on a long-term basis. Customer
retention is a simple concept. Customer retention refers to the percentage of
happy customers who feel important and are regularly communicated with in the
right way will keep coming back. It is a major contributing factor in the net
growth rate of businesses.

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 A variety of strategies are available to small business owners seeking to
improve their customer retention rates of course, the most basic tools for
retaining customers are providing superior product and service quality. High-
quality products and services minimize the problems experienced by customers
and create goodwill towards the company, which in turn increases customers'
resistance to competitors' overtures. However, it is important that small business
owners not blindly seek to improve their customer retention rate. Instead, they
must make sure that they are targeting and retaining the right customer, the ones
who generate high profits. In short, customer retention should not be a stand-
alone program but should be seen as part of an overall customer relations
management.

1.3.4 Customer Satisfaction

Customer satisfaction measures how well the expectations of a customer

concerning a product or service provided by their company have been me
Customer satisfaction is an abstract concept and involves such factors as the
quality of the product and the quality of service provided, the atmosphere of the
location where the product or service is purchased, and the price of the product
or service. Businesses often use customer satisfaction surveys to gauge customer
satisfaction. Typical areas addressed in the surveys include. Quality of product,
Value of product relative to price - a function of quality and price, Time issues,
such as product availability, availability of sales assistance, time waiting at
checkout, and delivery time, Atmosphere of store, such as cleanliness,
organization, and enjoyable shopping environment, Service personnel issues,
such as politeness, attentiveness and helpfulness, Convenience, such as location,
parking, and hours of operation (Shawn Grimsley).

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1.4 Customer Loyalty

The growth of hotel industry’s offer intensified competition and forced

companies to look for new ways of attracting and retaining customers. Customer
acquisition is an important indicator of quality for companies in this sector, once
its main offering is the marketing of comfort and resting that represents
intangible sensations that will be evaluate only after the customer’s experience
with the company.

According to Lovelock and Wirtz (2006, p. 293), fidelity in the business

context corresponds to the provision of a customer to continue patronizing a
company in a long run, to buy and use their goods and services repeatedly and,
preferably exclusively, and to recommend their products and services to friends
and colleagues. (Sao Carlos, Sp, Brazil, 2010).

The conquest and loyalty are related to their relationship with the
company, which must be built over the negotiations and based on the details of
these transactions. The tangible aspects are extremely relevant in the hotel
industry, thus they propitiate customer's welfare in the consumption of the
service, however, the intangible aspects, such as attendance of employees and
actions of the relationship practiced by the company, are those that allow
differentiating the organization in relation to its major competitors.

Customer loyalty definition there is no globally agreed definition of

loyalty. Loyalty can be defined as something that consumers may exhibit to
brands, services, and product categories such as hotel's room and activities such
as travelling (Uncles, et. al., 2003).

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 The growth of hotel industry’s offer intensified competition and forced
companies to look for new ways of attracting and retaining customers. Customer
acquisition is an important indicator of quality for companies in this sector, once
its main offering is the marketing of comfort and resting that represents
intangible sensations that will be evaluate only after the customer’s experience
with the company.

According to Lovelock and Wirtz (2006, p. 293), fidelity in the business

context corresponds to the provision of a customer to continue patronizing a
company in a long run, to buy and use their goods and services repeatedly and,
preferably exclusively, and to recommend their products and services to friends
and colleagues.

The conquest and loyalty are related to their relationship with the
company, which must be built over the negotiations and based on the details of
these transactions. The tangible aspects are extremely relevant in the hotel
industry, thus they propitiate customer's welfare in the consumption of the
service, however, the intangible aspects, such as attendance of employees and
actions of the relationship practiced by the company, are those that allow
differentiating the organization in relation to its major competitors. Customer
loyalty very important for the hotel industry to retain the customers and covert
them as a loyalty customers (Sao Carlos, Sp, Brazil, 2010).

1.5 What is Hotel Industry?

Food, accommodation and clothing are the three most essential things of
human. Hotel or hotel Industry alone provides two basic things: food and
accommodation. So, what is hotel or hotel Industry, Hotel is a part of the
hospitality industry which is an umbrella term for a broad variety of service
industries including, but not limited to, hotels, restaurants and casinos. Hotel is

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often referred as a “Home away from home”. If we consider the meaning of hotel
in the dictionary, a hotel is a building where you pay to have a room to sleep in
and where you can eat meals (Cambridge Dictionary) or a hotel is an
establishment that provides paid lodging on a short-term basis.

According to A.M. Sheela, the author of the book “Economics of Hotel

Management”, hotel is the place where the tourist stops being the traveler and
become a guest. Hotel usually offer a full range of accommodations and
services, which may includes suites, public dinning, banquet facilities, lounges
and entertainment facilities. It is considered as an industry whose main aim is
also to make profits for the hoteliers, though this may change at times. Hence a
hotel should provide food, beverage and lodging to travelers on payment and has
in turn the right to refuse if the traveler is drunk, not follow the rule of hotels or
not pay the service fee. Traditional hotels provide rooms, banquets and
restaurants. Additional hotels get revenues also from telephone call services,
laundry services, travel services, internet services and recreational, entertainment
activities in the hotels (Alessandro Brun, Le Na Student 2009/2010).

1.6 History of Hotel Industry

The hotel may be one of the oldest industries in the world. The history of
hotels is connected closely to civilizations of mankind. According to some
documents, the first inn was appeared in the sixth century B.C when some
couples provide large halls for travelers to drink and the entire service was done
by the owners. To other documents, since early biblical times, the Greeks
developed thermal baths in villages for rest. Later, the Romans built mansions to
provide accommodation for the government business. The first thermal baths in
England, Switzerland and the Middle East were developed by the Romans. In
the middle Ages, religious built inns to cater for their colleagues on the move.
At the beginning, inns did not offer meals. They only provide shelter and allow

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horses to be changed more easily. Travelling became popular and the impact of
the industrial revolution in England spread widely that led to the change from
social or governmental travel to business travel.

The need for quick and clean service all the time was emerged. The birth
of hotel industry took place in Europe. At the beginning of the fifteenth century,
in France, the first time, there was a law required that hotels keep a register.
During this period, first guide books for travelers were also published. English
rules for inns also introduced at that time. At the same time, around 1500
thermal spas were developed in Carlsbad and Marienbad. However, the real
growth of the modern hotel industry took place in USA by the opening of the
City Hotel in New York in the year 1794. It emerged the wave of hotel building
activity in different cities. Some of the best hotels of the USA were built in this
era, but the real boom came in the early of 20th century. This period also saw a
beginning of chain operations under the guidance of E.M Sattler which would
spread all the continents. It involved big investments, big profits and trained
professionals to manage the hotel business. Nowadays, architects, designers,
developers, engineers, managers, etc realize that taste of guests could be
different, according to their wishes or needs. Therefore, they have to catch new
trends, define better criteria, present modern standards in order to improve
quality of life in hotels (Alessandro Brun, Le Na Student 2009/2010).

1.7 Hotel Industry in Chennai is evolved through and has history of more
than a century

The first recognized hotel in the city, The Imperial Hotel, which later
became The Connemara Hotel, was established in 1854, on the eastern banks of
River Cooum, still continues to be a landmark heritage hotel in the city. Taken
over from Spencer’s International Hotel by IHCL in 1984, the hotel today adorns

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Vivanta by Taj – Connemara branding. Indian luxury hospitality brands were the
first to recognize the potential of the city. Taj Group set up their first hotel in
Chennai, The Taj Coromandel, in 1974. When ITC Group forayed into the
hospitality segment with a hotel in Chennai. They launched Welcom group
Sheraton Chola in 1975 in the city. From mid-70s, there was an influx of many
mid-scale hotels into the city for few years. The Savera Hotels, Adayar Park by
TTK Group, which later became ITC Park Sheraton, Residency Group, GRT
Hotels, all local groups with interest in various other industries ventured into
hotels and set up mid-scale hotels across the city. Trident was the first hotel to
come up close to Chennai airport in the 80’s, followed by Le Meridien in the
90’s. Last two to three years have been quite eventful as far as luxury
hospitality is concerned. Lot of upscale and upper upscale hotels have entered
into the market changing the whole profile of the destination. Hilton opened
their Guindy property, followed by two developments by Hyatt – Hyatt Regency
and Park Hyatt, ITC Group opened their most luxurious property, ITC Grand
Chola, The Leela Palace by Hotel Leela ventures, The Westin by Starwood
Hotels, etc. are among the notable ones.

Hotel industry in Chennai, similar to other metro cities in the country, had
its up and downs in terms of demand and supply. From a largely under-supplied
market scenario few years ago, the sudden glut of new supplies has created a sort
of excess supply of hotel rooms in the city. Between 2008 and 2012, the
city’s organized room inventory has increased almost to 32 per cent. There were
2,400 branded hotel rooms in the city in 2006-07, the number has exceeded 6,000
by Starwood hotels, etc. These are the notable ones in 2012-13.

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1.8 Type of Hotel Industry

There are two ways to categorize hotels: by functions or by star ratings By

functions, hotel has been classified into several types as follows: • Commercial
Hotel • Airport Hotel • Conference Center • Economy Hotel • Suite or All-Suite
Hotel • Residential Hotel or Apartment Hotel • Casino Hotel • Resort Hotel -
Commercial Hotel: A chain of hotels which have standardized service and
amenity structures:

1.8.1 Airport Hotel: Hotel near the airport but it does not have to be connected
or adjacent to the airport (although some are); it could be located up to five miles
away. Most airport hotels have a shuttle to and from the terminals (Charlyn
Keating Chisholm, about.com. guide).

1.8.2 Conference Center: A specialized hotel (usually in a less busy but easily
accessible location) designed and built almost exclusively to host conferences,
exhibitions, large meetings, seminars, training sessions, etc. A conference center
often also provides office facilities and a range of leisure activities (Business
dictionary).

1.8.3 Economy Hotel: A hotel offering few amenities (J.K. Krishan, “Dictionary
of Tourism”, Gyan Books, 2005) - Suite or All-Suite Hotel: A hotel in which
every rooms has an attached living room and/or kitchen.

1.8.4 Residential Hotel or Apartment Hotel: A serviced apartment complex

uses a hotel-style booking system. It is similar to renting an apartment, but with
no fixed contracts and occupants can 'check-out' whenever they wish
(Wikipedia).

1.8.5 Casino Hotel: A business establishment combines a casino and a hotel or a

building that houses both a hotel and a casino.

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1.8.6 Resort Hotel: A hotel caters primarily to vacationers and tourist and
typically offers more recreational amenities and services in a more aesthetically
pleasing setting, than other hotels. These hotels are located in attractive and
natural tourism destinations and their clientele are groups and couples that like
adventure with sophistication and comfort. The attractions vary depending on
the region and some might offer golf, tennis, scuba diving and, depending on the
natural surroundings, may also arrange other recreational activities.

1.9 Star Ratings, Hotel has been classified into several types as follows:

• Five Star Hotel • Four Star Hotel • Three Star Hotel • Two Star Hotel • One
Star Hotel • No Category Hotels

1.9.1 Five Star Hotel: Luxury hotels; most expensive hotels/resorts in the world;
numerous extras to enhance the quality of the client's stay, for example, some
have private golf courses and even a small private airport (“Hotel Glossary of
Terms”, Marsh).

1.9.2 Four Star Hotel: First class hotels; expensive (by middle-class standards);
has all of the previously mentioned services; has many "luxury" services, for
example, massages or a health spa (“Hotel Glossary of Terms”, Marsh).

1.9.3 Three Star Hotel: Middle class hotels; moderately priced; has daily maid
service, room service, and may have dry-cleaning, internet access and a
swimming pool (“Hotel Glossary of Terms”, Marsh).

1.9.4 Two Star Hotel: Budget hotels; slightly more expensive; usually has maid
service daily (“Hotel Glossary of Terms”, Marsh).

1.9.5 One Star Hotel: Low budget hotels; inexpensive; may not have maid
service or room service (“Hotel Glossary of Terms”, Marsh).

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1.9.6 No Category Hotels: These hotels include motels, cottages, bungalows and
others with limited services.

However, these hotels represent 41% of the total hotel market share.
(“Hotel Glossary of Terms”, Marsh) 1.4 Growth and latest trends in 2009. Due
to the economic downturn in the whole world, the hotel industry faced many
difficulties which revealed in the decrease in all the financial indicators in almost
countries all over the world. To overcome the downturn, hoteliers had to apply
many methods to cut down the cost as much as they could as well as strike to
balance with impact on the customer satisfaction (Alessandro Brun, Le Na
Student 2009/2010).

1.10 Need and Importance

Building and strengthening relationship with the customer is vital in Hotel

Industry. The Hotel Industries build up and maintain firm relationship with their
customers it is hard for their competitors to beat them. The most significant area
for hotels in these days is to make their customers loyal. It depends on lifelong
relationship, with their customers as the customer groups, generally profits also
grow so customer loyalty ultimately increases hotel industries profits.

Hotel industries basic purpose is to make profit and to remain successful

and making customers loyal. Loyal customer contributes more profits. Loyal
customers also recommended their family and friends through word of mouth,
hotels are able to acquire for retaining more customers. Increasingly customers’
retention increases more profits. Customer loyalty is more important than leads
to number of customers in hotels.

The research study helps to improve the customer’s relationship

management application and to make their customers loyal to overcome high
competition.

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1.11 Statement of the Problem

To overcome high competition in the Hotel Industries, need to strengths

relationship with their customer to make their customers loyal, Hotel should
focus constantly on building relationship with their customers, because it is the
only competitive advantages remaining to them.

Globalization results in through competition between organizational and

formed a climate of continuous change, gaining and retaining customers as
become vital for the success of Hotel industries customers. Now have more
awareness and choice of various products and services due to newer channels of
communication like internet then ever before. So due to increased customer
awareness, customers are more demanding and those hotels having strong
relationship with their customers have strong competitive edge over other Hotels.
Customer loyalty, which is the major focus of customer relationship
management, gives these hotels a competitive advantage over other hotels.

It is also a fact that acquiring new customers costs more than to retain the
existing customers. In order to overcome high competition in hotels, building
customers loyalty is a challenging area faced by hotels these days. The researcher
will try to find out the major factor that affect customer loyalty, which is a focus
of customer relationship management for overcoming high competition in the
hotel industry for mutual benefits of customers and hotels.

Customer relationship management creating customer trust through

effective management activities by hotel industry and also help to retain the
customer and satisfy the customer at maximum extent in this research the
researcher framed four variable customer trust, management activities, customer
retention, customer satisfaction, these factor help to identify the customer
relationship management and customer loyalty.

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1.12 Scope of the Study
This study will provide the insight in the hotel industry and the steps
being taken by them to improve their relationship with their guest/customer.
From the study, one can infer the present scenario of the practices and programs
being followed by the leading players in this sector and the steps being followed
by them to enhance customer satisfaction, customer retention, customer loyalty
and brand images in the minds of the customer. Today customer relationship
management in hotel industry is now growing moments. The customer
relationship management limited to obtain maximum satisfaction of customer
and converted in customer loyalty in turn gives new growth in hotel industry.
The research tries to find and to analyze the hotel industry needs
expectations, the prerequisites of successful customer relationship management
programs are often developed in a black box, initially considering some customer
input, but then focusing on technology. A detailed customer requirement analysis
helps to ascertain the positioning of customer relationship management products
and identify the very needs of hotel organizations.
The research investigates collaborative and operational customer
relationship management targeting the customer relationship side of customer
relationship management in general business. Analytical customer relationship
management is touched, as it is the base for customer evaluation and segment
identification. To explore those theoretical issues, selective white papers and
credible web customer relationship management portals. Theoretical findings are
compared to the hotel industry’s specific needs. This is supported by the field
research, which specifically targets executives and marketing specialists in the
lodging industry. Customer relationship management enhances customer
retention strategies as well as convert them in to loyalty customer. The present
study has the scope to explain the nature of relationship between the customer
relationship management and customer satisfaction and customer loyalty.

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1.13 Objectives of the Study

To study the socio- economic profile of hotel customers and their hotel
visiting details
To study about the customer relationship management practices in hotel
industry.
To identify the factors influencing customer relationship management
practices in hotel industry.
To study the loyalty among the hotel customers in the study area.
To analyze the influence of customer relationship management practices
on customer loyalty.
To study the influence of personal variables and hotel details of customers
on their customer relationship management perception and loyalty.
To offer systematic for effective functioning of customer relationship
management.

1.14 Hypotheses

The factors of customer relationship management do not differ

significantly.
There is no significant influence of customer relationship management on
customer loyalty.
There is no influence of demographic variables on customer relationship
management and loyalty.
There is no significant difference among hotel status with respect to
customer relationship management and customer loyalty.

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1.15 Limitations of Study

The study focuses only customer relationship management and customer

loyalty in hotel industries.
The study is limited to only star hotels.
Due to time constraint and the cost, the study is restricted only to Chennai
city.
The researcher undertook the study during the period 2011-2014.

1.16 Area of the Study

The Chennai city has been chosen for undertaking the present study in
view of its distinct and unique historical importance. Moreover, it is the work
place as well as the domicile of the researcher. The features of Chennai city are
as under.

Chennai, formerly known as Madras is a city on the east coast of Southern

India, situated on the shores of Bay of Bengal. This capital of the state of
Tamilnadu is India’s fourth largest metropolitan city and one of the 35th largest
metropolitan areas in the world with a metropolitan population of about 7.4
million in 2005. The city is a large commercial and industrial centre in India and
is known for its cultural heritage. Chennai city is governed by the corporation of
Chennai. Chennai city has a population of 46,81,087 according to 2011 census.
Among them, Male population is 23,35,844 and Female population is 23,10,888.
It consists of 15 zones and is divided into 155 wards for enforcing clean
administration and providing welfare measures. The metropolitan region of
Chennai covers many suburbs that are part of Kancheepuram and Thiruvallur
Districts.

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 Chennai has a diversified industrial base. It is the base for over 40% of
India’s automotive industry. Moreover, Chennai service sector is traditionally
dominated by Finance and Banking. Also, Chennai is now an important hub for
software and Information Technology companies.

1.17 Methodology

In securing the most effective results from the present study, a

methodology has been framed in relation to the area of the study, products
covered in the study, data collection, sampling, and statistical tools.

1.17.1 Data of the Study

The data comprises of two vital parts: Primary and Secondary. The
primary data is devoted to gather the perception and opinion of the respondents
with respect to conceptual relationship between Customer Relationship
Management and its sources. The secondary data is pertaining to extensive
theoretical knowledge relating to the concepts of Customer Relationship
Management and its sources.

1.17.2 Questionnaire Design

After reviewing national and international literature the researcher

identified predominant gap this gap is useful to design the questionnaires. It
consist of three parts the first part details with personal variable of hotel
customers. The second part enumerates the CRM practices in the star hotels and
the third part aim at ascertaining customer loyalty towards hotels. The quality
consists of both optional type and likerts five points scale statements. The five
points range scale from strongly agree and strongly disagree.

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1.17.3 Sources of data

The primary data is collected from the respondents on the basis of their
perceptions to different thought provoking insights relating to the concepts of
brand equity, contained in the well defined questionnaire. The sources of
secondary data comprises of books, journals, periodicals, reports, theses and
websites.

1.17.4 Population of study

Populations consist of star hotels ranking from one star to five star and
others. The following table indicates distribution of star hotels in Chennai city.

Star Hotel No. of Hotels

One Star 30

Two Stars 15

Three Stars 20

Four Stars 20

Five Stars 15

1.17.5 Sample Size

Sample size consisting of 510 customers of hotel industry in Chennai city.

1.17.6 Sample Selection

To make the sample more balanced relating to life styles occupation,

gender, cultural and socio-economic status of Chennai residents viz.,
Government employees, Private employees, Businessman, Self-employed,
Housewives and students, a Convenience Sampling technique has been executed.
All the 15 zones of Chennai Corporation are taken up for the study.

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1.17.7 Sample Collection

An undisguised, structured and close ended questionnaire with

dichotomous and multiple choice questions is prepared. A pilot study has been
conducted on 50 respondents to make the questionnaire empathetic and
sympathetic. Forty eight statements have been selectively formulated from the
literature survey to facilitate the respondents in perceiving impact of customer
relationship management and customer loyalty in hotels five point scale. The
reliability and validity tests are used to secure conformity of the statements given
to the respondents. The reliability is obtained through Cronbach Alpha Model
and validity by Hotelling’s T-Square test. The following table exhibits the
computed value relating to validity and reliability.

No. of Cronbach Hotelling’s T-

Variable Sig.
Statements Alpha Value Square value
Service Facilities 14 0.876 450.12 0.000
Customer Staff
13 0.765 342.56 0.000
Relationship
Customer Retention 11 0.811 398.12 0.000
Customer Convenience 14 0.799 238.98 0.000
Technology in CRM 7 0.787 334.89 0.000
Customer Loyalty 5 0.808 352.93 0.000

The computed Cronbach Alpha values of all elements are significant at

5% level. Hence all the statements are highly reliable in fact findings approach.
The significance of Hotelling’s T-Square value indicates that the statements are
possessing high internal consistency suitable for applying multivariate tests in the
study.

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1.18 Statistical tools

The following statistical tools are used in the analysis: Factor Analysis,
Cluster analysis, Linear multiple regression analysis, Non parametric test, chi-
squire test, analysis of association, One way analysis of variance, T test, Simple
percentage of analysis, Structural equation model (SEM).

1.19 Chapter Arrangements

The study is presented in six chapters.

Chapter I briefs Introduction, Scope of the study, Statement of the

Problems, Objectives, Hypothesis and Methodology.

Chapter II deals with the Literature reviews - presents the nature, concept
and definitions of customer relationship management, the needs, objectives, key
problems in the areas of CRM in Hotel industries, customer loyalty and their
related review of literature.

Chapter III - Conceptual frame work of CRM and customer loyalty and
profile of hotel industries.

Chapter IV – Customer Relationship Management – An analysis of

customers in Hotel Industries.

Chapter V – Customer Relationship Management and Customer loyalty –

An analysis in Hotel Industries.

Chapter VI presents summary, findings, suggestions and conclusion.

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