A

PROJECT REPORT
ON
CUSTOMER RELATIONSHIP MANAGEMENT
OF

HOTEL AWADH PALACE

Submitted in partial fulfillment of the requirement
For the award of degree
Of
Bachelor of Business Administration
Session (2016-2019)

Submitted to : Submitted by:

Neha Mathur Mam Kartik Rao
Certificate
 DECLARATION

I, Kartik Rao student of BBA 6th semester, studying at RABINDRANATH

TAGORE UNIVERSITY, Mendua, Bhojpur, near Bangrasiya chouraha, Bhopal-

chiklod Road hereby declare that the summer training report entitled “A Study of

Customer Relationship Management followed by Hotel Business in Bhopal.” is an

original work and the same has not been submitted to any other institute for the

award of any other degree.

The summer training report is not being submitted to any other university for

award of any other Degree, Diploma and fellowship.

Kartik Rao
BBA 6th semester
Rabindranath Tagore University, Bhopal
 ACKNOWLEDGEMENT

It is a matter of great satisfaction and pleasure to present this report on Customer

Relationship Management . I take this opportunity to owe my thanks to all those
involved in my training.

Firstly, I would like to thank Mr. R.K. Shrivastava (Sr. manager for giving me
the opportunity to complete my project in the organization.

I put on record my sincere thanks to my college, Rabindranath Tagore

University, Bhopal. for giving me such an opportunity. I am extremely grateful
to Neha Mathur mam for the encouragement, discussions and critical assessment
of this project.

It was a good experience for me to work with Hotel Awadh Palace, a pioneer in
the Hotel Business in Bhopal. I acknowledge my gratitude to Dr. Neha Mathur
(Dean – Department of Management, Rabindranath Tagore University), Dr.
Sangeeta Jauhari (HOD- Department of Management, Rabindranath Tagore
University) for her extended guidance, encouragement, support, motivation and
reviews without whom this project would not have been a success.

I am greatly obliged Neha Mathur who have shared their expertise and
knowledge with me without which the completion of this project would not have
been possible.

I am thankful towards the staff of Hotel Awadh Palce, those who have helped me
directly or indirectly in completing the training.

Lastly, I express my sincere gratitude towards my parents, friends for

contribution towards the project.

Above all, I thank the almighty father-God for his unconditional love that he has
shown me and the power and ability to work and complete this project.

Kartik Rao
 CONTENTS

Sr. No. TOPIC PAGE

1. INTRODUCTION

2. REVIEW OF LITERATURE

3. COMPANY PROFILE

4. RESEARCH METHODOLOGY

5. LIMITATIONS OF STUDY

6. FINDINGS AND DISCUSSION

7. SUMMARY

8. REFERENCES

9. VITA
INTRODUCTION

Customer relationship management (CRM) is a combination of people, processes, and

technology that seeks to provide understanding of customer needs, to support a business
strategy, and to build long-term relationships with customers. Successful utilization of the
integrated technology requires appropriate business processes and organizational culture to
adequately address human behavioral elements. Because it is not simply a technology solution,
success in CRM business revolves largely around people. In order to build a clearer
understanding of the content and role of the people-driven processes of CRM, this study
analyzes the literature on CRM processes and people dependencies and forms propositions
about the need for people-driven processes in CRM. It emphasizes the responsibility of
executives and operational staff in making critical decisions and using intimate communications
to conduct relationship management with their customers.

Typical people-driven processes in CRM are those that are difficult to implement or that cannot
be carried out using technology solutions alone, including such activities as planning customer
strategy, designing CRM processes, coping with customer problems, understanding customer
needs, handling intimate communications, and integrating customer responses.

Factors that affect the dependency of people-driven processes in CRM are related to customer
characteristics, the content of information, employee capabilities, and the organizational
environment. Propositions formed in this study are that the dependency on people-driven
processes in CRM is affected by

 Customer emotional needs, customer involvement in transaction processing, and the

dynamics of the customer needs
 The need for tacit customer information
 Employee experience and knowledge
 The organizational culture.
To build a clear understanding of the people-driven processes of CRM, this research
constructed propositions based on literature findings and verified them through an in-depth case
study.

The objective is to explain the effects of customer characteristics, the content of information,
employee capabilities, and the organizational environment on the dependence of people-driven
processes in CRM.

CRM model based upon customer-centric business philosophy and culture to

support effective marketing, sales, long term relationships and services process
could be a lifesaver for most business especially for hotel industry. CRM is about
managing customer knowledge to better understand and serve them. It is an
umbrella concept that places the customer at the centre of an organization.
Customer service is an important component of CRM: however CRM is also
concerned with coordinating customer relations across all business functions,
points of interaction, and audiences.

CRM can bring a lot of benefits for hotels such as customer satisfaction and
loyalty, increase in revenues, decrease in costs, and a sustainable competitive
advantage.

CRM involves the integration of technology and business processes used to

satisfy the needs of a customer. In terms of IT, CRM is defined as “an enterprise
wide integration of technologies and functions such as data warehouse, websites,
intranet/ extranet, telephone support system, accounting, sales, marketing and
production”.

CRM is an all-embracing approach and CRM as an IT term. CRM is an idea

regarding how a company can keep their most profitable customers by increasing
the value of interaction. The value is maximized through differentiation of the
management of customer relationships”. Another definition is formulated as
follows, “basically, CRM is a notion regarding how an organization can keep
their most important customers and at the same time reduce costs, increase the
values of interaction to consequently maximize the profits”.
CRM can also be defined as “an information industry term for methodologies,
software, and usually internet capabilities that help an enterprise manage
customer relationships in an organized way” or be defined as “an all embracing
approach.
Benefits of CRM

The real value to the company lies in the value they create fir their customers and
in the value the customers delivers back to the company. Accordingly, it is
important to mark that the value does not lie in more information and in more
advanced technology. The value lies in the customer knowledge and how the
company uses that knowledge to manage their customer relationships.
Knowledge is the sole of CRM.

Unfortunately, few companies are transforming the information to customer

knowledge and therefore they miss the opportunity to provide value to their
customers. However, applied in the right way, CRM is the tool that contributes to
profit. If companies are transforming the customer data into knowledge and then
use that knowledge to build relationships it will create loyalty, followed by
profits. Companies can gain many benefits from CRM as given below:

1. Lower cost of recruiting customers- The cost of recruiting customers

will decrease since there are savings to be made on marketing, mailing,
contact, follow-up, fulfillment, services, and so on.

2. No need to recruit so many customers to preserve a steady volume of

business- The number of long-term customers will increase and
consequently the need for recruiting many new customers decreases.

3. Reduced costs of sales- The costs regarding selling are reduced owing to
that existing customers are usually more responsive. In addition, with
better knowledge of channels and distributors the relationships become
more effective, as well as the costs for marketing campaigns is reduced.

4. Higher customer profitability- The customer profitability will get

higher since the customer wallet-share increases, there is increase in up-
selling, cross-selling and follow- up sales, and more referrals comes with
higher customer satisfaction among existing customers.

5. Increased customer retention and loyalty- The customer retention

increases since customers stay longer, buy more and more frequently. The
customer also takes the initiatives, which increases the bounding
relationship, and as a result the customer loyalty increases as well.
Evaluation of customer profitability- The company will get to know
which customers are more profitable, the ones who never might become
profitable, and which ones that might be profitable in the future. This is very
important since the key to success in any business is to focus on acquiring
customers who generate profit, and once you have found them, never let them go.
All customers are not valuable; some may even pose danger to business. This
occurs when the customers use the company’s time, energy and resources without
generating enough business to make them worth the effort. (Mc Kim, 2002)

Hence, a company should perform CRM efforts where they will get the best
possible return, which means focusing on customers who already are or will
become the company’s most profitable customers.

Objectives of CRM in service industry

The services that an organization provides to their customers have an impact

on the customer’s perspective to an organization. The CRM objectives for
service applications are stated below:

1. Service should reduce costs and increase profitability- Create a profit

center out of a service organization using operational and customer
information to reduce costs and generate more revenues.

2. Service should improve service delivery- Create an efficient and

effective service business using integrated enterprise-wide information
available in other front office and ERP applications.

3. Service should help organizations to delight customers- Provide

enhanced customer care, service and customer information management
across the organization to improve customer satisfaction and loyalty.

4. Service should help organization to differentiate their product-

Distinguish business by offering services as a differentiator using
multiple channel communications with customers, full enterprise wide
view of customer information.
Functional categories of CRM Technology

The CRM technology can be divided into three functional categories,

operational CRM, analytical CRM, and collaborative CRM.

Operational CRM

This category includes customer facing applications that integrate front, back
and mobile offices, with the purpose to increase the efficiency of customer
interactions. This involves automating business operations processes, such as
order management, customer service, marketing automation, sales-force
automation, and field service. In order to succeed employees must have the
right skills and the company must have a customer centric focus.

Analytical CRM

This category involves applications that analyze customer data generated by

operational tools. The data is often stored in a data warehouse, which can be
described as a large repository of corporate data the data stored in data
warehouse shall give the company information that will allow them to
provide value to their customers. Hence, it is crucial to capture the right data,
a process must be accomplished with great customer care and understanding.

Collaborative CRM

This category focuses on facilitating interaction between customers and

companies. One-way communication must be replaced by two-way
communication, where the customer gets involved early with issues affecting
their future purchase behavior. In other words, Collaborative CRM involves
any CRM function that provides a point of interaction between the customer
and the supplier. For example, technologies such as electronic
communication are used to facilitate relevant, timely and personalized
interaction with the customers.
Hotel Industry

Hospitality not only includes hotels and restaurants but also relates to other kind
of institute that offers shelter, food, or both to people away from their homes.
This might include private clubs, casinos, resorts, attractions and so on. Hotels
as one part of hospitality industry has evolved from the very modest beginning
of families and landowners who opened their homes to travelers to the high rise
of properties today which contain thousands of guest’s rooms that these lodging
facilities can be classified by location, by room and by the number of rooms
they contain.

Nowadays basic accommodation of a room with only a bed, a cupboard, a small

table and a wash stand has largely been replaced by rooms with en-suite
bathrooms and more commonly in United States than elsewhere climate
control. Other features found may be a
telephone, an alarm clock, a TV, and broadband internet connectivity. Food and
drink may be supplied by a mini-bar (which often includes a small refrigerator)
containing snacks and drinks ( to be paid on departure), and tea and coffee
making facilities ( cups, spoons, an electric kettle and sachets containing instant
coffee, tea bags, sugar, and creamer or milk).

The Hotel Industry comprises a major part of the Tourism industry. Historically
viewed as an industry providing a luxury service valuable to the economy only
as a foreign exchange earner, the industry today contributes directly to
employment (directly employing around 0.15 million people), and indirectly
facilitates tourism and commerce. Hotels in India are broadly classified into 7
categories (five star deluxe, five-star, four star, three star, two star, one-star
and heritage hotels) by the Ministry of Tourism, Government of India, based on
the general features and facilities offered. The ratings are reviewed every five
years.

In the past five years, the hotel industry has witnesses many ups and downs.
While industry performance started to improve in the year 2005-06 and reached
its peak in 2007-08, the year 2008-09 and 2009-10 witnessed turbulent time.

According to Indian hotel industry survey 2009-10 in the first half of the year the
industry felt the effect of global financial crisis, coupled with the Mumbai terror
attack which took place in the year 2008. Overall, average occupancy across
India declined by 3%, with some cities witnessing decline of up to 15%.
However the average rate of occupancy witnessed an increase of approximate
8%. In the year 2009-10, rooms contributed 56%, F&B and banquets 38% and
others 6% to the total revenues generated compared to year 2007-08 it was 62%
for rooms, 33% for F&B and banquets and 5% from other sources.

From the major travelling cities, Bengaluru faced the major decline in its average rate by -
31% from the previous year average rate of occupancy. Pune faced a decline in the
occupancy and average rates by -18.8% and -20.8% where as Goa achieved a growth of
3% and the average occupancy in the five-star deluxe and five-star categories of hotels
was over 70%. The New Delhi was the only major city to have experience a recorded
growth in average rates by 14%.

Simla is the most popular destination for domestic leisure travel. The rates in the city
remained relatively stable since it is sustained by domestic demand; however the
occupancies fell by -8.8% in the year 2009-10. All the major cities exception of Goa
continues to be weekday destinations, recording lowest occupancies on Fridays,
Saturdays and Sundays. Goa being a leisure destination, witnessed lowest occupancies on
Mondays and Tuesdays. The months of November, December, January and February
continue to be the peak season for the hotels across all the major cities in India.
(Anonymous, 2009-10).

The hotel industry is experiencing increased globalization, competition, higher customer

turnover, growing customer acquisition costs and rising customer expectations, meaning
that hotels performance and competitiveness is significantly dependent upon their ability
to satisfy customer efficiency and effectively. In the hotel industry the basic products
(rooms) are very similar, when comparing the same quality level the customer focuses are
on soft factor like personal treatment, personalization, one to one marketing and attention
by the hospitality.

The hotel industry enjoys easy data access as the guests need to register their name and
address during check-in and in some countries, guests even need to provide their passport
data and more detailed private information. In addition, people are very likely to share
their personal preferences with hotel staff to make their stay more enjoyable. The hotel
can make use of this database combined with IT and give the guests a unique experience.

They can establish a close relationship with customers and meet their needs
perfectly. In order to be able to compete on a highly competitive market a hotel
has to meet every single customer’s needs and expectations.
To do this it is important to understand the aspects of business performance that
persuade customers to become repeat purchasers and to exhibit behavioral
loyalty. (It costs five to ten times more to sell to a new customer than to an old
customer).

To enhance profitability and guest satisfaction and loyalty, the organizations

(hotels) should focus on implementing Customer Relationship Management
(CRM) strategies that aim to seek, gather and store the right information,
validate and share it throughout the organization.

Hospitality not only includes hotels and restaurants but also relates to other kind
of institute that offers shelter, food, or both to people away from their homes.
This might include private clubs, casinos, resorts, attractions and so on.

Hotels as one part of hospitality industry has evolved from the very modest
beginning of families and landowners who opened their homes to travelers to
the high rise of properties today which contain thousands of guest’s rooms that
these lodging facilities can be classified by location, by room and by the
number of rooms they contain.

Nowadays basic accommodation of a room with only a bed, a cupboard, a small

table and a wash stand has largely been replaced by rooms with en-suite
bathrooms and more commonly in United States than elsewhere climate control.
Other features found may be a telephone, an alarm clock, a TV, and broadband
internet connectivity.

Food and drink may be supplied by a mini-bar (which often includes a small
refrigerator) containing snacks and drinks ( to be paid on departure), and tea and
coffee making facilities ( cups, spoons, an electric kettle and sachets containing
instant coffee, tea bags, sugar, and creamer or milk).
The Hotel Industry comprises a major part of the Tourism industry. Historically
viewed as an industry providing a luxury service valuable to the economy only
as a foreign exchange earner, the industry today contributes directly to
employment (directly employing around 0.15 million people), and indirectly
facilitates tourism and commerce.

Hotels in India are broadly classified into 7 categories (five star deluxe, five-
star, four star, three star, two star, one-star and heritage hotels) by the Ministry
of Tourism, Government of India, based on the general features and facilities
offered. The ratings are reviewed every five years.

In the past five years, the hotel industry has witnesses many ups and downs.
While industry performance started to improve in the year 2005-06 and reached
its peak in 2007-08, the year 2008-09 and 2009-10 witnessed turbulent time.

According to Indian hotel industry survey 2009-10 in the first half of the year
the industry felt the effect of global financial crisis, coupled with the Mumbai
terror attack which took place in the year 2008.

Overall, average occupancy across India declined by 3%, with some cities
witnessing decline of up to 15%. However the average rate of occupancy
witnessed an increase of approximate 8%. In the year 2009-10, rooms
contributed 56%, F&B and banquets 38% and others 6% to the total revenues
generated compared to year 2007-08 it was 62% for rooms, 33% for F&B and
banquets and 5% from other sources.
 Review of Literature

To emphasize the importance of undertaking the study, it is essential to present a

brief review of researches already undertaken. Only studies which have a direct or
indirect bearing on the present study have been reviewed in this chapter.

Reichheld and Sasser (1990) demonstrated across a variety of industries that

profits climb steeply when a company successfully lowers its customer defection
rate. Based on an analysis of more than 100 companies, in two dozen industries,
these researchers found that the firms could improve profits 25 percent to 85
percent by reducing customer defection by just 5 percent.

Johnson et al (1995) developed and tested alternative models of market- level

expectations, perceived product performance, and customer satisfaction. Market
performance expectations are argued to be largely rational in nature yet adaptive
to changing market conditions. Customer satisfaction is conceptualized as a
cumulative construct that is affected by market expectations and performance
perceptions in any given period and is affected by past satisfaction from period to
period.

Ennew and Binks (1996) examined the link between customer retention/defection
and service quality in the context of the U.K. banking sector and the bank’s
relationships with small business customers. They developed a framework for
examining satisfaction and retention and presented the result of some empirically
research. They found support for the hypothesis that loyalty/retention is
influenced by service quality and customer relationships, and they found that trust
in the banking relationships has the largest impact on potential defection.

Garbarino and Johnson (1999) analyzed the relationships of satisfaction, trust,

and commitment to compute satisfaction attitudes and future intention for the
customer of a New York company. For the low relational customers (individual
ticket buyers and occasional subscribers), overall satisfaction is the primary
mediating between the component attitudes and future intentions. For the
relational customers (consistent subscribers), trust and commitment, rather than
satisfaction, are the mediators between component attitudes and future intentions.
Kharbanda and Dasgupta (2001) emphasized on an increasing coverage of CRM,
e- Commerce and ERP systems on the net, it has become imperative for
organization to achieve a totally different view of the customer to create their
greater responsiveness and satisfaction. Companies now extract previously
unknown information about their customer 11 from this databank, collected over
long duration of their operations, to better predict customer requirements and
trends. This insures better services for the customer needs. This is where Data
Mining practices create a lot of value for organization by extracting the required
information for the data stores. This study looks at the different applications
designs and the underlying technology for Data Mining applications, and also
describes the different architecture details of Data Mining application and the
underlying processes that classify any analytical process carried out on data
collection as a Data Mining Process.

Parvatiyar and Sheth (2001) in their conceptual framework said that the two most
important process of Customer Relationship Management include proactive
customer business development and building partnering relationships with the
most important customer.

Shainesh (2001) described CRM as an enterprise wide initiative. According to

him CRM involves all areas and functions of the organization. It requires that all
areas of the organization to be working together in harmony towards the common
goal of stronger customer relationships. He also stated that CRM is different from
traditional marketing. He stressed that to retain customers, businesses need to
customize their offerings by customizing all elements of marketing mix. He also
stated that the use of Information Technology is imperative to bring about
interaction between the customer and the organization.

Thomas (2001) emphasized that customer acquisition and retention both are
interdependent processes. He said that managers often made the customer
relationship management decisions based only on a data analysis of acquired
customers. He also preset modeling approach to estimate the length of a
customer’s lifetime. Using this model, he showed the financial impact of not
accounting for the effect of acquisition on customer retention. In addition to the
model he also gave a methodology for linking customer retention. He was of the
opinion that analyzing customer retention is important for enhancing the
customer equity of the firm.
Chatterjee and Prasad (2002) addressed that the innovative way of doing business
is by focusing on customer orientation. They executed a project of engineering
consultancy industry in context of customer orientation. In their research, they
concluded that the businesses need to run with customer rather than after him.
They also stated that there should be deep commitment of employees towards
customer concerns. Further, they said that the concept of customer orientation
should be key part of the overall business strategy. In their study, they have given
a framework for creating customer orientation.

Dash (2003) stressed that CRM that seeks to build, identify and maintain
customer network through interactive, individualized and value-added contents
over a long period has gained tremendous importance. He examined various
aspects of marketing and practices of Customer relations in Indian marketing
context.

Reinartz and Kumar (2003) developed a framework that incorporates projected

profitability of consumers in the computation of life-time duration. Furthermore,
they identified factors under a manager’s control that explain the variation in the
profitable lifetime duration. They also compared other framework with the
traditional methods such as the recency, frequency, and monetary value
framework and past customer value and illustrated the superiority of the proposed
framework. Finally, they develop several key implications that can be of value to
decision makers in managing customer relationships.

Rigby et al (2003) emphasized that while choosing a CRM technology, the

organization and processes must realign to fit the customer strategy. According to
the authors, tailoring the technology to the company's business processes and
culture is just as important as tailoring the business processes to the strategy.

Verhoef (2003) investigated the differential effects of customer relationship perceptions

and relationship marketing instruments on customer retention and customer share
development over time. Customer relationship perceptions are considered evaluations of
relationship strength and a supplier’s offering, and customer share development is the
change in customer share between two periods. The results show that affective
commitment and loyalty programs that provide economic incentives positively affect
both customer and customer share development, whereas direct mailings influence only
customer share development. However, the effect of these variables is rather small. The
results also indicate that firms can use the same strategies to affect both customer
retention and customers share development.
Bowman and Narayandas (2004) demonstrated how adaption and extension of the
Service-Profit Chain (SPC) to business markets can provide vendors with insights
into the process that culminates in individual customer management profitability
and useful guidelines for adapting their customer management efforts at the
individual account level with an aim to improve account profitability. The result
showed the importance of accounting for decreasing returns to customer
management efforts at a given account reinforced the notion of customer delight.

Reinartz et al (2004) conceptualized a construct of the CRM process and its

dimensions, operationalized and validated the construct, and empirically
investigated the organizational performance consequences of implementing CRM
processes. Their research questions are addressed in two cross-sectional studies
across four different industries and three countries. The first key outcome is a
theoretically sound CRM process measure that outlines three key stages:
initiation, maintenance, and termination. The second key result is that the
implementation of CRM processes has a moderately positive association with
both perceptual and objective company performance.

Cao and Gruca (2005) stressed that adverse selection is an important problem for
marketers. To reduce the chances of acquiring an unprofitable customer,
companies may screen prospects who respond to marketing offers. Prospects who
respond are often not approved. At same time, prospects that are likely to be
approved are unlikely to respond to a given marketing offer. Using data from a
firm’s customer relationship management system, he showed how to target
prospects that are likely to respond and to be approved. This approach increases
the number of customers who are approved and reduces the number of applicants
who defect after being turned. This method can be extended to new customer
acquisition and more effective targeting of costly promotions to migrate
customers to higher levels of lifetime value.

Lewis (2005) emphasized that the calculation of customer value without regard to
marketing policy is problematic because the value of managerial flexible and the
impact of consumer learning are neglected. He developed a structural dynamic
programming model of consumer demand that includes marketing variables and
consumer expectations of promotions. He used the estimated parameters to
conduct policy experiments that yield more accurate forecasts of customer value
and to study the impact of alternative marketing policies.
Payne and Frow (2005) developed a conceptual framework for CRM that helps
broaden the understanding of CRM and its role in enhancing customer value and,
as a result, shareholder value. They explored definitional aspects of CRM and
identified three alternative perspectives of CRM. They emphasized the need for a
cross-functional, process-oriented approach that positions CRM at a strategic
level. They identified five key cross-functional CRM processes: a strategy
development process, a value creation process, a multichannel integration
process, an information management process, and a performance assessment
process. They developed a new conceptual framework based on these processes
and explored the role and function of each element in the framework. The
synthesis of the diverse concepts within the literature on CRM and relationship
marketing into a single, process-based framework provides deeper insight into
achieving success with CRM strategy and implementation.

Ryals (2005) demonstrated that the implementation of CRM activities delivers

greater profits. Using calculations of the lifetime value of customers in two
longitudinal case studies, he found that customer management strategies change
as more discovered about the value of the customer. These changes lead to better
firm performance. The contribution of this study is to show that CRM works and
that a relatively straightforward analysis of the value of the customer can make a
real difference.

Srinivasan and Moorman (2005) argued that a firm’s strategic commitments may
be an overlooked organizational factor that influences the rewards for a firm’s
investments in CRM. Using the context of online retailing, they considered the
effects of two key strategic commitments of online retailers on the performance
effect of CRM: their bricks-and-mortar experience and their online entry timing.
They tested proposed model with a multimethod approach that used manager
ratings of firm CRM and strategic commitments and third-party customer’s rating
of satisfaction from 106 online retailers. The findings indicated that the firms
with moderate bricks-and-mortar experience are better able to leverage CRM into
superior customer satisfaction outcomes than firms either low or high bricks-and-
mortar experience. Likewise, firms with moderate online experience are better
able to leverage CRM into superior customer satisfaction outcomes than firms
with low or high online experience. These findings helped resolve disparate
results about the value of CRM, and they established the importance of examining
CRM within the strategic context of the firm.

19
Sun et al (2006) discussed a two-step procedure comprising “adaptive learning”
and “proactive” Customer Relationship Management decisions. He also discussed
three key components for customer-centric Customer Relationship Management:
adaptive learning, forward looking and optimization. He formulated Customer
Relationship Management interventions as solutions to a stochastic dynamic
programming problem under demand uncertainty in which the company learns
about the evolution of customer demand as well as the dynamic effect of its
marketing interventions.

Urbanskiene et al (2008) analysed client relation management system by

disclosing the role and place of relation marketing in formation of Customer
Relationship Management theoretical foundations. It reveal the support of
customers and suppliers relationship based on trust, cooperation, power
distribution, communications, commitment, dependence and other features as
well as the development of customer’s loyalty.

Cailleux et al (2009) argued that luxury brands have so far been reluctant to adopt
any of the classical tools of mass marketing. One of these is customer relationship
management (CRM). Prestigious brands are, however, now starting to examine
the benefits of the ‘lifelong customer value’ approach, beyond building the social
prestige of their names. The authors examined why the luxury brands need to
apply CRM systems and ‘what’ they could achieve by doing so, and addresses
‘how’ this could be applied with the necessary adaptations if these brands wish to
keep their luxury status intact.

Ngai et al (2009) indicated that the area of customer retention received most
research attention. They related one-to-one marketing and loyalty program and
also gave classification and association model as the most commonly used
models for data mining in Customer Relationship Management. Their analysis
facilitates knowledge accumulation and creation concerning the application of
data mining techniques in Customer Relationship Management.

Appiah and Kingsley (2010) stated that as the world economy becomes
globalized, competition has intensified and the differences in products have
faded. Consequently, businesses have become fixated on customer relationship
management (CRM) as it has become a central orienting point in academia and
business environment with organizations increasingly focusing on managing
customer relationships as a strategic capability to achieve market leadership and
profits. In spite of the commercial significance of the concept, CRM has been
demonized by critics as a marketing or managerial fad destined to failure.

20
Dominici and Guzzo (2010) said that to be successful in the market it is not
sufficient to attract the new customers; managers must concentrate on existing
customers implementing effective policies of customer satisfaction and loyalty. In
hotel industry customer satisfaction is largely hooked upon quality of service.
According to him a management approach focused on customer satisfaction can
improve customer loyalty, thus increasing the positive image of the touristic
destination. Hence, exploring the importance for customers of hotel attributed in
hotel selection is indispensable. The research on the topic of guest satisfaction,
translates the consideration of whether or not customers will return to a hotel or
advice it to other tourists is pivotal to success of the hospitality business. They
performed a qualitative analysis of large hotels in sicily and evaluated the overall
customer satisfaction level for the hotel and for each service supplied. They
concluded by proposing improvement in customer satisfaction management of the
hotel.

Cao and Gruca (2005) stressed that adverse selection is an important problem for
marketers. To reduce the chances of acquiring an unprofitable customer,
companies may screen prospects who respond to marketing offers. Prospects who
respond are often not approved. At same time, prospects that are likely to be
approved are unlikely to respond to a given marketing offer. Using data from a
firm’s customer relationship management system, he showed how to target
prospects that are likely to respond and to be approved. This approach increases
the number of customers who are approved and reduces the number of applicants
who defect after being turned. This method can be extended to new customer
acquisition and more effective targeting of costly promotions to migrate
customers to higher levels of lifetime value.

Lewis (2005) emphasized that the calculation of customer value without regard to
marketing policy is problematic because the value of managerial flexible and the
impact of consumer learning are neglected. He developed a structural dynamic
programming model of consumer demand that includes marketing variables and
consumer expectations of promotions. He used the estimated parameters to
conduct policy experiments that yield more accurate forecasts of customer value
and to study the impact of alternative marketing policies.

A lot of work has been done relating to Customer Relationship Management, but
much review is not available to emphasize the implication of CRM and the
customer satisfaction with respect to Hotel Industry. The present research is an
attempt in this direction.

21
Research Methodology

This chapter describes in detail the methodology adopted for conducting study on
the Customer Relationship Management (CRM) practices followed by the Hotels
in Bhopal . The chapter has been divided into following heads.

Research Design

Population

Sample design

Method of data collection

Data Analysis

Limitations of the study

22
 These sections are discussed below.

Research design

A research design was formulated which guided the collection and analysis
of data. Exploratory research design was followed and survey was carried out
with the help of structured non-disguised questionnaire.

Population

The population for the first objective consisted of all the Hotels of Bhopal.
As Bhopal is an important industrial town and business hub and is
developing at a fast pace, a number of hotels are coming up in the city. Thus
the study was restricted to Bhopal city. The population for the second
objective consisted of all the customers of the selected Hotels.

Sample design

A list of Hotels was taken from the Hotel and Restaurant Association of
Bhopal. From the list, the hotels were categorised into two categories i.e.
high/medium tariff category hotels and low tariff category hotels based on
the single room tariff. A sample of 10 hotels were selected from the list of
hotels on the basis of single room tariff, five hotels each from high/ medium
tariff and low tariff category based on random sampling. Five hotels
selected from high/medium tariff from 18 the list obtained were Majestic Park
Plaza, Hotel Awadh Palace, Nagpal Regency, Friends Regency and Dhodha
Regency. Five hotels selected from low tariff on the basis of random
sampling from the list obtained were Novena Hotel, Vikrant Hotel, Hallmark
regency, Dyal Palace and Shampion-2000 Hotel. The managers of these
hotels were contacted and interviewed. Further, 15 customers from each of
these hotels were contacted on basis of convenient sampling, making a total
of 150 customers.

Method of data collection

For fulfilling both the objectives, hotel managers and their customers were
interviewed. The primary data was collected with the help of structured, non-
disguised questionnaire. In order to satisfy both the objectives, two separate
questionnaires were prepared. The questionnaire was designed on the basis
23
of the Customer Relationship Marketing Model, given in figure 3.1 (Dash,
2003).

For the first objective, the data was collected with the help of structured non
disguised questionnaire from the managers/owners of the selected hotels.
Questions were asked relating to CRM practices like customer need
assessment and acquisition, customer development through personalization
and customization, customer retention, new customer referrals and benefits
from CRM approach, etc.

A separate questionnaire was prepared for the second objective and 15

customers of each hotel, total 150 customers, were contacted from the
database provided by the hotels on convenience sampling basis. The data was
collected from these customers using a structured non disguised
questionnaire. Questions were asked relating to satisfaction with respect to
CRM practices followed by the hotels.

The secondary sources were in the form of journals, books, magazines and
relevant websites. Secondary data has been used wherever necessary to
improve the understanding of the concepts of CRM.

Data analysis

After collection of data, master tables were constructed which facilitated

tabulation of data in desired form and analysis of collected data was done by
constructing suitable tables and using percentage methods. Other statistical
techniques used include mean scores, single mean t-test, two mean t-test and
two mean Z-tests. The questionnaire contained closed-ended, multiple choice
and ranking questions. Attitude and satisfaction were measured on a five-
point scale.

24
 INPUT PROCESSING UNIT OUTPUT

Customers need Customer Development Customer Retention

Assessment & through personalization & & Referral New
Acquisition customization Customers

Addition of value with

Relationship Marketing
product & service High customer
Commitment
satisfaction
Contact &
Recognition
Involvement Increased market
Respect share
Intimacy & One to one
Reward
relationship High customer
Reciprocation
loyalty
Price offers
Transparency
High customer
Special facilities/ Share values
retention index
Services

Life time customer

Information sharing

25
Fig. 1: Customer Relationship Marketing Model

Mean score was calculated for the questions asked on a 5-point Likert scale.
In case of five-point scale, the respondents were asked to indicate their
degree of satisfaction. The scales ranged from strongly agree to strongly
disagree and the scores given were as follows:

1 – Strongly disagree

2 – Disagree

3 – Neutral

4 – Agree

5 – Strongly agree

Another scale was used which ranged from great extent to least extent and the
scores were given as follows:

1-Least extent

2-Less extent

3- Neutral

4- Some extent

5-Great extent

20
Frequencies were multiplied with their respective weights and aggregate
values were found. Mean scores were found out using the following formula:

Mean Score = ∑( wi * fn) / n

i=1
i = 1 to 5

Where,
wi = weight attached for degree of agreement or
satisfaction. fn = associated frequency
n (10) = number of respondents in case of
managers/owners
n (150)= number of respondents in case of
customers

If the mean score was more than the middle point of the scale it was
concluded that respondents buy and largely tend to be satisfied with the
statement or hold important the attribute.
For the comparison between the mean of selected samples of customers from
high/medium tariff hotels and low tariff hotels, Z-test was applied. The value
of Z was calculated as follows:

Where,

= weighted mean score of sample 1

= weighted mean score of sample 2

S.E. = standard error

1= standard deviation of sample 1

2= standard deviation of sample 2

N1= number of respondents of sample 1

N2= number of respondents of sample 2

For the comparison between the mean obtained from managers of selected
samples of high/medium tariff hotels and low tariff hotels, t-test was applied.
The value of t was calculated as follows:

Where,

= mean of first sample

= mean of second sample

N1= number of observations in the first

sample
N2= number of observations in the
second sample
S= combined standard deviation

The value of S has been calculated by the following formula:

The degree of freedom = (n1 + n2 – 2)

Limitation of the study

Any study based on customer survey through a pre-designed questionnaire

suffers from the basic limitation of the possibility of difference between what
is recorded and what is truth, no matter how carefully the questionnaire has
been designed and field investigation has been conducted.

This is because the consumer may not deliberately report their true
preferences and even if they want to do so, there are bound to be difference
owing to problems in filters of communication process.

The error has been tried to be minimized by conducting interviews, even

though the research followed from following limitations:

 The managers may not deliberately report their true attitude

towards the CRM practices followed by their companies and
even if they do so, there are bound to be differences owing to
problem in filters of communication process.

 Only ten hotels were chosen, large number could have added
more extensiveness to this research.

 The study was to be completed in a short time thus the

time constraint reduces the extensiveness of the research.

 The unsupportive attitude of the respondents while responding to

some of the questions requiring qualitative information may have
affected the final results and outcomes.

 Time constraint is unavoidable limitation of my study.

 Financial problem is also there in completing this project in a proper way.

 As no work has been done earlier in this regard so scarcity of secondary data
is also there.

 Inadequate disclosure of information is also the problem.

The scope of study was limited to Bhopal only.

Findings and Discussions

This study includes the analysis of the primary data collected from the
owners/managers and respondents in order to study the Customer Relationship
Management practices followed by the hotel industry in Ludhiana and the
customer satisfaction with respect to the Customer Relationship Management
practices on the customers provided by the hoteliers in Ludhiana. The chapter has
been divided into four sections. The first section presents the profile of the
hotels. The second section presents the views of the managers/owners regarding
the Customer Relationship Management practices. The third section presents the
level of customer satisfaction with respect to the Customer Relationship
Management practices followed by the hotels in Ludhiana city. The fourth
section presents the discussion.

Profile of Hotel
In this section the information about the profile of the hotels is recorded. The information given
below is regarding year of establishment, number of hotels in the chain, any other business
belonging and single room tariff of the hotels.
Table 1: Profile of Hotels

Parameters Number of Percentage Name

respondents
(n=10)
Year of establishment
Before 1990 2 20% Jehan Numa Retreat, Touchwood Resort
1990-95 3 30% Amer Majestic, Amer Palace, Hotel Atishay
1995-2000 2 20% Graces Resort, Courtyard by Marriot
2000-05 3 30% Hotel Awadh Palace, Noor-us-sabah, Hotel lake
view Ashok
After 2005 0 0%
Number of hotels
1 9 90% All hotels except Hotel Awadh Palace
2 0 0%
3 1 10% Hotel Awadh Palace
4 0 0%
>5 0 0%
 Other business
holding
Yes 8 80% All hotels except Hotel Awadh Palace and Jehan
Numa Retreat, Touchwood Resort.
No 2 20%
Single room tariff
<1000 5 50% All low tariff hotels
1000-2000 3 30% Hotel lake view Ashok
2000-3000 1 10% Hotel Atishay
3000-4500 1 10% Hotel Awadh Palace
>4500 0 0%

Table 1 show that 90% of the hotels have only one hotel in their business except
Hotel Awadh Palace that has three hotels in India. Also 80% of the hoteliers are
involved in other business holdings too. The single room tariff for all the low
tariff category of hotels is below Rs. 1000 and in high/medium tariff category
hotels it is 30% between 1000-2000 and 10 % between 2000-3000 and 3000-4500
each.

CRM practices of Hotels

This section contains the information about the CRM practices followed by the
selected hotels in the Bhopal city.

Awareness about CRM

Now a day’s CRM is a very important tool which is used by several business
groups for the maintenance of the customer base and the progress of the industry.
So in this section the awareness of the CRM among various Hotels in Bhopal is
given below.

Table 2: Awareness of hotel mangers about CRM

Awareness High/medium tariff Low tariff hotel No. of respondents

hotel (n=5) (n=5) (n=10)
Yes 5 5 10
No 0 0 0
Total 5 5 10

25
In the Table 2 the awareness among the hotel mangers regarding CRM is very good.
All the respondents were aware about the CRM practices.

Opinion toward CRM approach

In this section the opinions of the hotel managers/owners towards the CRM
approach is given below. The respondents were asked to rate the statements on
the scale from 1 to 5 where 1 states for strongly disagree and 5 states for strongly
agree.

Table 3: Opinion of managers toward CRM approach

Statement Mean Score Overall T-value p- value

High/ Low mean
medium tariff score
tariff (n=5) (n=5) (n=10)
It expands the customer base 5 4.4 4.7 2.45 0.07
It increases the longitivity of 4 4.6 4.3 2.45 0.07
customer relationship
It reduces the rate of 4.6 3.8 4.2 1.79 0.12
customer defection
It helps in increasing the 3.8 3.8 3.8 0.00 1.00
number of profitable
customers
It helps in easy introduction 4.4 3 3.7 3.50* 0.008*
of new product/services
It enhances the potential 3.4 3.8 3.6 0.89 0.40
worth of individual customers
in terms of their lifetime
value to company
It offers better value to 3.8 3.2 3.5 1.41 0.21
customer’s money by
constantly improving the
quality of services offered to
them
It benefits customer 3.8 3.2 3.5 1.41 0.21
selectivity approach

26
In Table 3 managers opinion towards CRM approach was that “it expands the
customer database” the most. For high/medium tariff category hotels the mean
score was highest for “it expands customer database” (=5). For the same category
the next highest mean scores was for “it reduces the rate of customer defection”
(=4.6), “it helps in easy introduction of new product/service” (=4.4) and for “it
increases the longitivity of customer relationship” (=4.0). The lowest mean score
in the same category was for “it enhances the potential worth of individual
customer in terms of their lifetime value to the company” (3.4). For low tariff
category hotels the mean score was highest for “it increases the longitivity of
customer relationship” (=4.6). For the same category the next highest mean
scores was for “it expands customer database” (=4.4), “it reduces the rate of
customer defection” (=3.8), “it helps in increasing the number of profitable
customers” (=3.8) and for “it enhances the potential worth of individual customer
in terms of their lifetime value to the company” (3.8). The lowest mean score in
the same category was for “it helps in easy introduction of new product/service”
(=3.0).

On the overall basis the overall mean score is highest for “it expands the
customer database” (=4.7). The next highest mean scores was for “it increases the
longitivity of customer relationship” (=4.3), “it reduces the rate of customer
defection” (=4.2) and for “it helps in increasing the number of profitable
customers” (=3.8). The lowest mean score on the overall basis was for “it benefits
customer selectivity approach” (=3.5) and “it offers better value to customer’s
money by constantly improving the quality of services offered to them” (3.5).

The t values were calculated and tested at 5% level of significance. In the above
table only one statement “it helps in easy introduction of new product/services” is
found to be significant i.e. whose value was more than 2.56. This means that
there is minor difference of opinion in the high/medium tariff and low tariff
hotels.

Activities undertaken for customer need assessment

It is very important to work according to the customer and to know the needs of
the customers. For this the data is recorded to know the activities followed by the
hotels for the customers need assessment.

27
Table 4: Activities undertaken by hotels for customer need assessment

Statement High/ medium Low tariff (n=5) Total (n=10)

tariff (n=5)
No. of respondents No. of respondents No. of respondents
(%) (%) (%)
Study existing 5 (100%) 5 (100%) 10 (100%)
customer database
Personal counseling 5 (100%) 3 (60%) 8 (80%)
Survey of 3 (60%) 0 (0%) 3 (30%)
competitors
customer’s
Survey of existing 1 (20%) 1 (20%) 2 (20%)
customers
Survey of potential 1 (20%) 0 (0%) 1 (10%)
customers
*Multiple choice responses

Analysis of Table 4 shows that in high/medium tariff hotels “study existing

customer database” and “personal counseling” both contributes 100% towards the
activities undertaken by the hotels for customer need assessment and “survey of
competitor’s customers” is done by 60% of the hotels. In low tariff hotels, all
hotels adopt “study of existing customer database”, 60% of the hotels believe in
going for “personal counseling” for the evaluations of customer need assessment.
On overall basis i.e. in both the high/medium tariff hotels and low tariff hotels the
best method of customer need assessment is the “study of existing customer
database” as this is the method that is adopted by all the hotels.

Activities undertaken for acquiring customers

Once the needs of the customers are known it is equally important to use that
information for acquiring the customers. So the data is collected by the hotel
managers/owners to know what are the activities undertaken by them for the
acquisition of the customers. The respondents were asked to rate the statements
over a scale from 1 to 5 where 1 states for least extent and 5 states for great
extent.

28
Table 5: Activities undertaken for acquiring customers

Statement Mean Score Overall t- value p- value

High/ Low mean
medium tariff score
tariff (n=5) (n=10)
(n=5)
Maintain Contact and 4.6 4.4 4.5 0.58 0.58
involvement
Maintain intimacy 4.4 3 3.7 3.5* 0.008*
Information Sharing 4 3.4 3.7 2.45 0.07

Addition of value with product 4 3 3.5 2.24 0.06

or service
Providing special facilities/ 3.6 2.6 3.1 2.89* 0.02*
Services
*Significant at 5% level of significance (t=2.56)

In Table 5 the activity undertaken by hotels for acquiring customers was to

“maintain contact and involvement” the most. For high/medium tariff category
hotels the mean score was highest for “maintain contact and involvement” (=4.6).
For the same category the next highest mean scores was for “maintain intimacy”
(=4.4), and for “information sharing” (=4.0). The lowest mean score in the same
category was for “providing special facilities/services” (3.6). For low tariff
category hotels the mean score is highest for “maintain contact and involvement”
(=4.4). For the same category the next highest mean scores was for “information
sharing” (=3.4), and for “maintain intimacy” (3.0). The lowest mean score in the
same category was for “providing special facilities/services” (=2.6).

On the overall basis the overall mean score is highest for “maintain contact and
involvement” (=4.5). The next highest mean scores was for “maintain intimacy”
(=3.7), and for “information sharing” (=3.7). The lowest mean score on the
overall basis was for “providing special facilities/services” (=3.1).

The t values were calculated and tested at 5% level of significance. In the above
table only two statements “maintain intimacy” and “providing special
facilities/services” were found to be significant i.e. whose value was more than
2.56. This means that there is minor difference of opinion in the high/medium
tariff and low tariff hotels.

29
Activities undertaken for customer development through personalization and customization

In this section the information is collected about the activities undertaken by the
hotels for customer development through personalization and customization. The
respondents were asked to rate the statements on the scale from 1 to 5 where 1
states for least extent and 5 states for great extent.

Table 6: Activities undertaken for customer development through personalization and customization

Statement Mean Score Overall t-value p- value

High/ medium Low tariff mean
tariff (n=5) (n=5) score
(n=10)
One to One Relationship 4.4 4.4 4.4 0.00 1.00
Marketing
Commitment towards providing 4.6 3.6 4.1 2.89* 0.02*
better services to customers

Give personal recognition to 4 3.6 3.8 1.00 0.35

customers
Transparency about company’s 3.8 3.8 3.8 0.00 1.00
policies and procedures
Reciprocation 3.8 3.2 3.5 2.12 0.07
Give rewards to customers 3.6 2.8 3.2 1.79 0.12
*Significant at 5% level of significance (t=2.56)

In Table 6 the activity undertaken by hotels for acquiring customers was to “one to
one relationship” the most. For high/medium tariff category hotels the mean score
was highest for “commitment towards providing better services to customers”
(=4.6). For the same category the next highest mean scores was for “one to one
relationship” (=4.4), and for “give personal recognition to customers” (=4.0). The
lowest mean score in the same category was for “give rewards to customers” (3.6).
For low tariff category hotels the mean score is highest for “one to one
relationship” (=4.4). For the same category the next highest mean scores was for
“transparency about company’s policies and procedures” (=3.8), and for
“commitment towards providing better services to customers” (3.6). The lowest
mean score in the same category was for “providing special facilities/services”
(=2.8).

30
On the overall basis the overall mean score is highest for “one to one
relationship” (=4.4). The next highest mean scores was for “commitment towards
providing better services to customers” (=4.1), and for “give personal recognition
to customers” (=3.8). The lowest mean score on the overall basis was for
“providing special facilities/services” (=3.2).

The t values were calculated and tested at 5% level of significance. In the above
table only one statement “commitment towards providing better services to
customers” was found to be significant i.e. some values were more than 2.56.
This means that there is minor difference of opinion in the high/medium tariff and
low tariff hotels.

Opinion towards activities relating to customer retention

Once we know the needs of the customers and the customer has been acquired, it
is very important to retain the customer for the future as it is known that it takes
double the cost to acquire new customer than the old one. So here, the
information is collected about the views of the hotel managers/owners upon the
activities that result in customer retention. The respondents were asked to rate the
statements on the scale from 1 to 5 where 1 states for strongly disagree and 5
states for strongly agree.

Table 7: Opinion of managers towards activities undertaken for customer retention

Statement Mean Score Overall t- value p- value

High/ medium Low mean
tariff tariff score
(n=5) (n=5) (n=10)
Customer complaint handling in an 5.0 5.0 5.0 1.00 0.38
effective manner
Membership of the hotel 4.8 4.6 4.7 0.63 0.55
Effective room service 4.6 4.6 4.6 0.00 1.00
Soft behavior of staff/personnel 4.6 4.4 4.5 0.58 0.58

Customized services 4.0 4.6 4.3 1.50 0.17

Sending wishes on various occasions 3.8 4.0 3.9 0.55 0.61

Special greet by the hotel 3.8 3.8 3.8 0.00 1.00

management
Accepting cancellation of 4 3.6 3.8 1.00 0.35
reservation by the hotel

31
In Table 7 the opinion of managers for activity undertaken by hotels for customer
retention was “customer complaint handling in an effective manner” the most.
For high/medium tariff category hotels the mean score was highest for “customer
complaint handling in an effective manner” (=5.0). For the same category the
next highest mean scores was for “membership if hotel” (=4.8), “effective room
service” (=4.6) and for “soft behavior of staff/personnel” (=4.6). The lowest mean
score in the same category was for “special greet by the hotel management” (3.8)
and “sending wishes on various occasions” (=3.8). For low tariff category hotels
the mean score is highest for “customer complaint handling in an effective
manner” (=5.0). For the same category the next highest mean scores was for
“customized services” (=4.6), “effective room service” (=4.6) and for
“membership of the hotel” (4.6). The lowest mean score in the same category was
for “accepting cancellation of reservation by the hotel” (=3.6).

On the overall basis the overall mean score is highest for “customer complaint
handling in an effective manner” (=5.0). The next highest mean scores was for
“membership of the hotel” (=4.7), and for “effective room service” (=4.6). The
lowest mean score on the overall basis was for “accepting cancellation of
reservation by the hotel” (=3.8) and “special greet by the hotel management”
(=3.8).

The t values were calculated and tested at 5% level of significance. In the above
table no statement was found insignificant i.e. no statement has value more than
2.56. This means that there is no difference of opinion in the high/medium tariff
and low tariff hotels.

Activities undertaken for customer retention

In this section the information is recorded about the activities undertaken by the
hotels for the purpose of customer retention.

Table 8 shows that several activities were undertaken by the hotels for the
customer retention. According to the table above three activities “Greeting the
customer and paying them due respect”, “Participating in a two-way
communication, listening and recording the customer problem” and “Provision of
customer service and complaint desk” are followed by all the hotels for the
customer retention. “Talking in terms favorable to customers” is an activity
followed by 90% of the hotels and “attending customers properly” is followed by
80% of the hotels. The least followed activities were “Sending cards/wishes on
special occasions like Birthday and Anniversary” (=30%) and “Membership for
the regular customers and business houses” (=30%).

32
Table 8: Activities undertaken for customer retention

Statement High/ medium Low tariff (n=5) Total (n=10)

tariff (n=5)
No. of No. of No. of
respondents (%) respondents (%) respondents (%)
Greeting the customer 5 (100%) 5 (100%) 10 (100%)
and paying them due
respect
Provision of customer 5 (100%) 5 (100%) 10 (100%)
service and complaint
desk
Participating in a two- 5 (100%) 5 (100%) 10 (100%)
way communication,
listening and recording
the customer problem
Talking in terms 5 (100%) 4 (80%) 9 (90%)
favorable to customers
Attending customers 5 (100%) 3 (60%) 8 (80%)
promptly
Providing customized 3 (60%) 1 (20%) 4 (40%)
services to the
customers
Membership for the 3 (60%) 0 (0%) 3 (30%)
regular customers and
business houses
Sending cards/wishes 3 (60%) 0 (0%) 3 (30%)
on special occasions like
Birthday and
Anniversary
*Multiple choice responses

33
 Benefits obtained from CRM approach

In this section the information regarding the benefits obtained from the
implementation of the CRM approach is recorded. The respondents were asked to
rate the statements on the scale from 1 to 5 where 1 states for strongly disagree
and 5 states for strongly agree.

Table 9: Benefits obtained from CRM approach

Statement Mean Score Overall t- value p- value

High/ Low mean score
medium tariff (n=10)
tariff (n=5)
(n=5)
Increases customer satisfaction 4.4 3.6 4 2.31 0.05
Increased customer loyalty 4 3.4 3.7 1.50 0.17
Profitability increases 3.8 3.6 3.7 0.63 0.55
Increases market share 3.8 3.2 3.5 1.41 0.21
Enhances lifetime value of 3.6 3 3.3 1.50 0.17
customers
*Significant at 5% level of significance (t=2.56)

In Table 9 the maximum benefit obtained from CRM approach was “increased
customer satisfaction”. For high/medium tariff category hotels the mean score was
highest for “increases customer satisfaction” (=4.4). For the same category the
next highest mean score was for “increased customer loyalty” (=4.0). The lowest
mean score in the same category was for “enhances lifetime value of customers”
(3.6). For low tariff category hotels the mean score is highest for “increases
customer satisfaction” (=3.6) and for profitability increases (=3.6). The lowest
mean score in the same category was for “enhances lifetime value of customers”
(=3.0).

On the overall basis the overall mean score was highest for “increases customer
satisfaction” (=4.0). The next highest mean scores was for “increased customer
loyalty” (=3.7), and for “profitability increases” (=3.7). The lowest mean score on
the overall basis was for “enhances lifetime value of customers” (=3.3).

The t values were calculated and tested at 5% level of significance. In the above
table no statement was found insignificant i.e. no statement has value more than
2.56. This means that there is no difference of opinion in the high/medium tariff
and low tariff hotels.
34
Information maintained about customers

It is very important to maintain the proper information about the customers and in
the hotel industry it is even a compulsion from the Government of India to
maintain the records of people visiting the hotel. So managers were asked about
what kind of information about the customers is recorded by the hotels in Bhopal
city.

Table 10: Information maintained about customers by the Hotels

Information of High/ medium Low tariff (n=5) Total (n=10)

customers tariff (n=5)
No. of No. of No. of
respondents (%) respondents (%) respondents (%)
Information about 5 (100%) 5 (100%) 10 (100%)
customer and his
dwelling
Information about 5 (100%) 1 (20%) 6 (60%)
customer’s attitude
towards the hotel
staff and offerings
Database about 3 (60%) 0 (0%) 3 (30%)
customer’s lifestyle
and likes/dislikes
Information about 1 (20%) 0 (0%) 1 (10%)
change in
customer’s interest
*Multiple choice responses

Table 10 shows that overall, all the hotels maintain the information about
customer and his dwelling and 60% of hotels also maintain information about
customer’s attitude towards the hotel staff and offerings. In case of high/medium
tariff hotels also the information about the customer’s attitude towards the hotel
staff and offerings (100%) is maintained but in low tariff hotels only 20% of
respondents maintain information.

35
Methods for handling the complaint

Handling the customer complaints is very important in the service industry as

it results in customer satisfaction. Here the information about the complaint
handling by the hotels is recorded.

Table 11: Methods for handling the complaint

Methods High/ medium Low tariff (n=5) Total (n=10)

tariff (n=5)
No. of respondents No. of respondents No. of respondents
(%) (%) (%)
Personal counseling 5 (100%) 5 (100%) 10 (100%)
Through complaint box 2 (40%) 3 (60%) 5 (50%)
Through phone 5 (100%) 2 (40%) 7 (70%)
Through direct mail 3 (60%) 0 (0%) 3 (30%)
Through intranet 0 (0%) 0 (0%) 0 (0%)
*Multiple choice responses

In the Table 11 the responses were collected about the methods used
by the hoteliers for the handling of the customer complaints. It was found that
all the hotels carry out personal counseling to handle the customer complaints
in both the high/medium tariff hotels and in low tariff hotels. The other
method of handling customer complaint in high /medium tariff hotel is
through phone that again comes out to be 5(100%) which means it is the
technique used by all the high/medium tariff hotels and in case of low tariff
hotels it is through complaint box (60%). The least used method is intranet
(0%) which is not used by any of the hotel to handle the customer complaint.

Customer Satisfaction with respect to the CRM practices followed by the Hotels

In this section the responses were collected on various parameters to

check their level of satisfaction with respect to the practices followed by the
various hotels in the Bhopal city.

Demographic profile of customer

In this the demographic profile of the customers is given below. It

consists of the information regarding the occupation, age group, family
income and the gender of the customers.

36
Table 12: Demographic profile of customers

Parameters High/ medium Low tariff (n=75) Total (n=150)

tariff (n=75)
No. of respondents No. of No. of respondents
(%) respondents (%) (%)
Occupation
Business 36 (48%) 14 (19%) 50 (33%)
Salaried 11 (15%) 40 (53%)
51 (34%)
Professional 24 (32%) 12 (16%)
Others 4 (5%) 9 (12%) 36 (24%)

13 (9%)

Family income per annum

(Rs. In Lacs)
<2 0 (0%) 29 (39%) 29 (19%)
2-5 19 (25%) 37 (49%)
56 (37%)
5-10 17 (23%) 9 (12%)
>10 39 (52%) 0 (0%) 26 (17%)

39 (26%)

Age
<20 0 (0%) 4 (5%) 4 (3%)
21-30 8 (11%) 16 (21%)
24 (16%)
31-40 36 (48%) 32 (43%)
41-50 28 (37%) 17 (23%) 68 (45%)

>50 3 (4%) 6 (8%)

45 (30%)

9 (6%)

Gender
Male 51 (68%) 59 (79%) 110 (73%)
Female 24 (32%) 16 (21%)
40 (27%)

37
 Table 12 shows that 48% of respondents in high/medium tariff hotels
are businessman and 32% are professionals and 53% of respondents in low
tariff hotels are from salaried class. Majority of respondents in high/medium
tariff hotels belong to more than 10 lakh income groups and in low tariff
hotels majority of the respondents belong to 2-5 lakh income categories. The
age group of the respondents in both the categories was almost same (48%
and 43% respectively) and belonged to the 31-40 age groups. Majority of the
respondents in both the group were males (68% in high/medium tariff hotels
and 79% in low tariff hotels).

Awareness of customers about CRM

In this section the awareness of the CRM among respondents in Bhopal is given below.

Table 13: Awareness of customers about CRM

Awareness High/medium tariff Low tariff hotel No. of respondents

hotel (n=75) (n=75)
Yes 73 (97%) 35 (47%) 108 (72%)
No 2 (3%) 40 (53%) 42 (28%)
Total 75 (100%) 75 (100%) 150 (100%)

In the Table 13 the awareness among the customers regarding CRM is

quiet nice. 108 respondents’ (72%) of the total respondents have knowledge
about CRM. Further customers of high/medium tariff hotel have more
awareness (97%).

Satisfaction with CRM practices followed by hotels

In this section the satisfaction of the respondents with respect to the

CRM practices followed by the hoteliers in Bhopal city is checked. The
respondents were asked to rate the statement over a scale from 1 to 5 where 1
stands for strongly disagree and 5 stands for strongly agree.

38
Table 14: Satisfaction with CRM practices followed by hotels

Statement Mean Score Overall Z- value p- value

High/ Low mean
medium tariff score
tariff (n=75) (n=150)
(n=75)
Quick response to calls 4.3 4.0 4.2 3.23* 0.001*
Having membership of hotel 4.4 3.7 4.0
encourages customer to stay in
that hotel
5.40* 0*
Staff/Personnel appropriate 4.1 3.6 3.9 4.47*
behavior 0*
Attending customer complaints 4.0 3.7 3.9 2.09* 0.037*
Meeting the requests of guests 4.2 3.6 3.9 4.84*
with in suitable time 0*
Receiving a complimentary 4.0 3.8 3.9 1.16
juice/tea as a refreshment at
the time of check-in 0.246
Paying the bills by credit cards 4.2 3.5 3.9 4.62* 0*
Advertising about discounts and 4.2 3.5 3.9
4.94*
special prices of each season 0*
Providing customized services at 3.8 3.9 3.8 0.50
the time of check-in and during
stay 0.618
The hotel should have a user 3.8 3.7 3.7 1.081
friendly website 0.28
Offering city tour to interested 3.8 3.5 3.7 3.24*
customers
0.001*
Filling out the feedback form via 3.8 3.6 3.7
0.93
internet provides more
convenience 0.352

39
24 hours online reservation 3.8 3.5 3.7 2.61*

0.009*
Accepting cancellation of 4.0 3.4 3.7
3.25*
reservation by the hotel is of
special importance 0.001*
Reservation via internet 3.8 3.4 3.6
3.16*
increases the probability of
hotel selection 0.002*
Having baby sitter service is 4.0 3.2 3.6 4.33*
necessary for the hotel 0*
Access to hotel information via 3.6 3.5 3.6 1.19
internet 0.235
Sending welcome note from 3.6 3.3 3.5
2.38
hotel management to rooms
0.02
Applying special services like 3.5 3.5 3.5 0.62
film/music on demand
0.54
Seeing a personal welcome 3.5 3.4 3.4
0.66
message on room’s TV after
checking in 0.51
Internet services in room 3.4 3.5 3.4 0.12

0.90
Access to room service via 3.3 3.5 3.4 1.03
intranet
0.31
Sending wishes for new year, 3.7 3.1 3.4
3.69*
birthday and wedding
anniversary results in more
satisfaction 0.00*
*Significant at 5% level of significance (Z=1.96)

In Table 14 customer satisfaction with respect to the CRM practices

was measured and it was found that “quick response to calls” and
that result in customer satisfaction. For high/medium tariff category hotels
the mean score was highest for “having membership of hotel encourages
customer to stay in that hotel” (=4.4). For the same category the next highest
mean score was for “quick response to calls” (=4.3), “meeting the requests of
guests with in suitable time” (=4.2) and for “paying bills by credit cards”
(=4.2). The lowest mean score in the same category was for “access to room
service via intranet” (=3.3). For low tariff category hotels the mean score was
highest for “quick response to calls” (=4.0). For the same category the next
highest mean scores was for “providing customized services at the time of
check-in and during stay” (=3.9), “attending customer complaints” (=3.7),
and for “the hotel should have a user-friendly website” (3.7). The lowest
mean score in the same category was for “sending wishes for new year,
birthday and wedding anniversary results in more satisfaction” (=3.1). This
means that there is a major difference in the customer satisfaction with respect
to CRM in the high/medium tariff and low tariff hotels. The Z values were
calculated and tested at 5% level of significance. In the above table many
statements were found to be significant i.e. whose values were more than
1.96.

On the overall basis the overall mean score is highest for “quick
response to calls” (=4.2). The next highest mean scores was for “having
membership of hotel encourages customer to stay in that hotel” (=4.0), “it
reduces the rate of customer defection” (=4.2) and for “staff/Personnel
appropriate behaviour”, “attending customer complaints”, “meeting the
requests of guests with in suitable time”, “receiving a complimentary
juice/tea as a refreshment at the time of check-in”, and “paying the bills by
credit cards” each (=3.9).

The lowest mean score on the overall basis was for “seeing a personal
welcome message on room’s TV after checking in”, “internet services in
room”, “access to room service via intranet” and “sending wishes for new
year, birthday and wedding anniversary results in more satisfaction” each
(=3.4).
Opinion about the benefits of CRM

In this section the opinion of respondents (customers) was recorded for the
benefits of CRM. Again, the customers were asked to rate the statement over
a scale from 1 to 5 where 1 stands for strongly disagree and 5 stands for
strongly agree.

In Table 15, according to customers the maximum benefit obtained from

CRM approach was “increased customer satisfaction”. For high/medium
tariff category hotels the mean score was highest for “increases customer
satisfaction” (=4.1) and for “increased market share” (=4.1).

For the same category the next highest mean score was for “profitability
increases” (=3.9) and for “enhances lifetime value of customers” (3.6). The
lowest mean score in the same category was for “increased customer loyalty”
(=3.8). For low tariff category hotels the mean score is highest for
“increases customer satisfaction” (=4.5).

The lowest mean score in the same category was for “increases market
share” (=4.0) and for “profitability increases” (=4.0). This means that there is
no difference of opinion in the high/medium tariff and low tariff hotels. The
Z values were calculated and tested at 5% level of significance. In the above
table no statement was found insignificant i.e. no statement has value more
than 1.96.

On the overall basis the overall mean score was highest for “increases
customer satisfaction” (=4.2). The next highest mean scores was for
“increases market share” (=4.1). Rest all the statements were found to have
the same overall mean score of (=4.0).
Table 15: Opinion about the benefits of CRM

Statement Mean Score Overall Z- value p- value

High/ Low mean
medium
tariff score
tariff
(n=75) (n=75) (n=150)
Increases customer satisfaction 4.1 4.5 4.2 1.684 0.23
Increases market share 4.1 4.0 4.1 1.389 0.22
Increased customer loyalty 3.8 4.1 4.0 1.435 0.07
Profitability increases 3.9 4.0 4.0 1.273 0.15
Enhances lifetime value of 3.9 4.1 4.0 1.744
customers 0.06
*Significant at 5% level if significance (Z=1.96)

Services necessary during Business Trip

In this section the customer’s requirements for various services to be

availed were identified when they are on a business trip.

Table 16: Services necessary during Business Trip

Services High/medium Tariff Low Tariff (n=75) Total (n=150)

(n=75)
Direct line of 65 (87%) 70 (93%) 135 (90%)
phone
Internet 46 (61%) 36 (48%) 82 (55%)
Xerox machine 21 (28%) 35 (47%) 56 (37%)
Fax 30 (40%) 21 (28%) 51 (34%)
 Answering phone 14 (19%) 16 (21%) 30 (20%)
Office equipments 13 (17%) 9 (12%) 22 (15%)
Laptop 4 (5%) 3 (4%) 7 (5%)
*Multiple choice responses

In Table 16, the services that the customers prefer the most when they are on
the business trip were “direct line of the phone”. For high/medium tariff
category hotels the percentage was highest for “direct line of phone” (87%).
For the same category the next highest percentage was for “internet service”
(61%), “fax services” (40%) and for “Xerox machine” (28%). The lowest
percentage in the same category was for “laptop” i.e. (5%). For low tariff
category hotels the percentage was highest for “direct line of phone” (93%).
The lowest percentage in the same category was for “internet” (48%) and for
“Xerox machine” (47%). On the overall basis the overall percentage was
highest for “direct line of phone” (90%). The next highest percentage was for
“internet” (55%), “Xerox machine” (37%) and for “fax services” (34%). The
lowest percentage on the overall basis was found for the “laptop” i.e. just
(5%).

Channels preferred for interaction

This section contains the information about the channels preferred by the
customers for an interaction between the hotels and customers.

Table 17: Channels preferred for interaction by customers

Channels High/medium Tariff Low Tariff (n=75) Total (n=150)

(n=75)
SMS 40 (53%) 56 (75%) 96 (64%)
E-mail 33 (44%) 32 (43%) 65 (43%)
Telephone 26 (35%) 30 (40%) 56 (37%)
Receiving Letters 24 (32%) 23 (31%) 47 (31%)
*Multiple choice responses
 In Table 17, the channel preferred by customers the most was “SMS”.
For high/medium tariff category hotels the percentage was highest for
“SMS” (53%). For the same category the next highest percentage was for “e-
mail” (44%). The lowest percentage in the same category was for “receiving
letters” (32%). For low tariff category hotels the percentage was highest for
“SMS” (75%). The lowest percentage in the same category was for
“receiving letters” (31%). On the overall basis the overall percentage was
highest for “SMS” (64%). The next highest percentage was for “e-mail”
(43%). The lowest percentage on the overall basis was found for the
“receiving letters” (37%).

Technique used for reservation

This section contains the information about the techniques used by the
customers for the purpose of reservation in the hotels.

Table 18: Technique used for reservation by the customer

Technique High/medium Tariff Low Tariff (n=75) Total (n=150)

(n=75)
No Reservation 46 (63%) 53 (71%) 99 (66%)
Travel Agency 9 (12%) 14 (17%) 23 (15%)
Phone 14 (19%) 5 (7%) 19 (13%)
Any Other 5 (7%) 4 (5%) 9 (6%)
Internet 0 (0%) 0 (0%) 0 (0%)
Total 75 (100%) 75 (100%) 150 (100%)

In Table 18, the technique used for reservation by the customers the
most was “via phone” but in most of the cases (66%) “No reservation was
done by the customers”. For high/medium tariff category hotels the
percentage was highest for “no reservation” (63%). Other than that for the
same category the next highest percentage was for “via phone” (19%) and
“Travel agency” (12%). The lowest percentage in the same category was for
“internet” (0%). For low tariff category hotels the percentage was highest for
“no reservation” (71%). For the same category the next highest percentage
was for “Travel agency” (17%). The lowest percentage in the same category
was for “other means like friends, relatives etc” (5%) and “internet” (0%).
On the overall basis the overall percentage was highest for “no reservation”
(66%). The next highest percentage was for “travel agency” (15%) and “via
phone” (13%). The lowest percentage for reservation on the overall basis was
found for the “internet” (0%). Any other includes with the help of family/
friends, through company agents etc.

Reference of Hotel

This section contains the information about the reference of the hotel given by
the customers to other people.

Table 19: Reference of Hotel by the customers

Referrals High/medium Tariff (n=75) Low Tariff (n=75) Total (n=150)

No Referrals 22 (29%) 48 (64%) 70 (47%)
Relatives 30 (40%) 16 (21%) 46 (31%)
Friends 26 (35%) 10 (13%) 36 (24%)
Business 17 (23%) 13 (17%) 30 (20%)
Associates
*Multiple choice responses

In Table 19, the no reference of the hotel was given by the customers. For
high/medium tariff category hotels the percentage was highest for “relatives”
(40%). For the same category the next highest percentage was for “references
to friends” (35%) and “no referrals” (29%). The lowest percentage in the
same category was for “business associates” (23%).

For low tariff category hotels the percentage was highest for “no referrals”
(64%). For the same category the next highest percentage was for “relatives”
(21%). The lowest percentage in the same category was for “business
associates and friends” (17% and 13%) and “internet” (0%).

On the overall basis the overall percentage was highest for “no reservation”
(66%). The next highest percentage was for “travel agency” (15%) and “via
phone” (13%). The lowest percentage for reservation on the overall basis was
found for the “internet” (0%).
Problems faced and complaint handling

This section contains the information about the number of customers who
faced the problems during their stay in the hotel and how the complaint was
handled by the hotel management. This section consists of both the objective
and subjective information.

Table 20: Problems faced by the customers and its complaint handling

Customers faced problem High/medium tariff Low tariff hotels Total respondents
hotels
Yes 12 (16%) 7 (9%) 19 (13%)
No 63 (84%) 68 (91%) 131 (87%)
Total 75 (100%) 75 (100%) 150 (100%)

In Table 20 many of the customers did not face any problem during their stay
in the hotel. In high/medium tariff hotel category only 16% of the total
high/medium tariff hotel category customers faced the problem and complaint
about it to the hotel management.

In low tariff hotel category only 9% of the total low tariff hotel category
customers faced the problem and complaint about it to the hotel
management. In total only 13% of the customers faced problems during their
stay in the hotel and 87% customers did not faced any problem and did not
complained about anything during their stay in the hotel.
Future Intentions regarding staying in the same Hotel

This section contains the information regarding the future intentions of the
customers for the stay in the same hotel in the future.

Table 21: Future Intention of the customer for staying in the same hotel

Customers will stay High/medium tariff Low tariff hotels Total

hotels respondents
Yes 58 (77%) 71 (95%) 129 (86%)
No 17 (23%) 4 (5%) 21 (14%)
Total 75 (100%) 75 (100%) 150 (100%)

In Table 21 it was recorded that most of the customers approached the same
hotel for staying in future. In high/medium tariff hotel category, 77% of the
customers agreed up on staying in the same hotel and in low tariff hotel
category, 95% of the customers wanted to stay in the same hotel in future.

On overall basis, 86% of the customers responded that they will stay in the
same hotel if it is required in the future.
Discussion

This section briefly discusses the inferences from the above three sections.
The responses of hotel owners/managers and other respondents were
tabulated and results were analyzed. The opinion of hotel managers towards
CRM approach and the satisfaction of customers with respect to the CRM
were studied.

Out of the total sample of the hotels 90% of the hotels were aware about the
CRM approach. Also 72% of the total sample of customers was aware about
the CRM approach. All the managers have the opinion that CRM approach
helps in increasing the customer database and gave it the maximum mean
score of 5. Also in all the hotels the study of the existing customer database
is done to assess the needs of the customers. For acquiring the customers the
hoteliers goes for maintaining contact and involvement with the customer
and thus rate it with the mean score of 4.5.

For the purpose of customer retention customer complaint handling in an

efficient manner was done by all the hotels and they ranked it most important
by giving it a mean score of 5. Also all the hotels maintain the basic
information of the customer along with his dwelling information.

The total sample of customers consists of 73% of males and 27% of females.
Most of the customers were salaried and between the age group of 31-40.
According to the customers the best way to achieve customer satisfaction is to
respond quickly to the calls and the membership of the hotel.

For customers the major benefit of CRM approach is that it increases the
customer satisfaction and thus it got the mean score of 4.2. Also it was
recorded that 64% of customers think that the best method of interaction with
the customer for the advertisement is through SMS.

From the above responses it is seen that 87% of the customers did not faced
any problem during their stay in the hotel and 86% of the customers prefer to
come back to the hotel for stay in the future.
Major Findings

The major findings of the study have been divided into two sections. First
section deals with the study of the hotels managers/owners getting their
responses about the implementation of the CRM practices and the other
section consists of the response of the customers regarding their satisfaction
level with respect to the CRM practices followed by the hoteliers in Bhopal
city. T-test is applied to check the responses for the significance.

Major findings are:

 It was seen that 90% of the hotels have only one hotel in their business
except Hotel Awadh Palace that have three hotels in India. Also 80% of
the hoteliers are involved in other business holdings too.

 The awareness among the hotel mangers regarding CRM is a good. Out
of the total respondents 90% respondents were aware about the CRM
approach and practices.

 Managers opinion towards CRM approach was that “it expands the
customer database” the most. For high/medium tariff category hotels the
mean score was highest for “it expands customer database” (=5). The
lowest mean score in the same category was for “it enhances the potential
worth of individual customer in terms of their lifetime value to the
company” (3.4). For low tariff category hotels the mean score was
highest for “it increases the longitivity of customer relationship” (=4.6).

 The lowest mean score in the same category was for “it helps in easy
introduction of new product/service” (=3.0). On the overall basis the
overall mean score is highest for “it expands the customer database”
(=4.7). The t values were calculated and tested at 5% level of significance
and were found to be significant. This means that there is minor difference
of opinion in the high/medium tariff and low tariff hotels.

49
  In high/medium tariff hotels “study existing customer database” and
“personal counseling” both contributes 100% towards the activities
undertaken by the hotels for customer need assessment. In low tariff
hotels, all hotels adopt “study of existing customer database”. On overall
basis the best method of customer need assessment is the “study of
existing customer database” as this is the method that is adopted by all the
hotels.

 The activity undertaken by hotels for acquiring customers was to

“maintain contact and involvement” the most. For high/medium tariff
category hotels the mean score was highest for “maintain contact and
involvement” (=4.6). The lowest mean score in the same category was for
“providing special facilities/services” (3.6). For low tariff category hotels
the mean score is highest for “maintain contact and involvement” (=4.4).
The lowest mean score in the same category was for “providing special
facilities/services” (=2.6). On the overall basis the overall mean score is
highest for “maintain contact and involvement” (=4.5). The t values were
calculated and tested at 5% level of significance and were found to be
significant. This means that there is minor difference of opinion in the
high/medium tariff and low tariff hotels.

 The activity undertaken by hotels for acquiring customers was to “one to

one relationship” the most. For high/medium tariff category hotels the mean
score was highest for “commitment towards providing better services to
customers” (=4.6). The lowest mean score in the same category was for
“give rewards to customers” (3.6). For low tariff category hotels the mean
score is highest for “one to one relationship” (=4.4). The lowest mean score
in the same category was for “providing special facilities/services” (=2.8).
On the overall basis the overall mean score is highest for “one to one
relationship” (=4.4). The t values were calculated and tested at 5% level of
significance and were found to be significant. This means that there is
minor difference of opinion in the high/medium tariff and low tariff hotels.

 The opinion of managers for activity undertaken by hotels for customer

retention was “customer complaint handling in an effective manner” the
most. For high/medium tariff category hotels the mean score was highest
for “customer complaint handling in an effective manner” For low tariff
category hotels the mean score is highest for “customer complaint
handling in an effective manner”. overall mean score is highest for
“customer complaint handling in an effective manner” (=5.0). The lowest
50
 mean score on the overall basis was for “accepting cancellation of
reservation by the hotel” (=3.8) and “special greet by the hotel
management” (=3.8). The t values were calculated and tested at 5% level
of significance and were found insignificant. This means that there is no
difference of opinion in the high/medium tariff and low tariff hotels.

 “Greeting the customer and paying them due respect”, “Participating in a

two-way communication, listening and recording the customer problem”
and “Provision of customer service and complaint desk” are followed by
all the hotels for the customer retention.

 The maximum benefit obtained from CRM approach according to

customers was “increased customer satisfaction”. For high/medium tariff
category hotels the mean score was highest for “increases customer
satisfaction” (=4.4). The lowest mean score in the same category was for
“enhances lifetime value of customers” (3.6). For low tariff category
hotels the mean score is highest for “increases customer satisfaction”
(=3.6) and for profitability increases (=3.6). The lowest mean score in the
same category was for “enhances lifetime value of customers” (=3.0). On
the overall basis the overall mean score was highest for “increases
customer satisfaction” (=4.0). The lowest mean score on the overall basis
was for “enhances lifetime value of customers” (=3.3). The t values were
calculated and were found insignificant. This means that there is no
difference of opinion in the high/medium tariff and low tariff hotels.

 All the hotels maintain the information about customer and his dwelling.
High/medium tariff hotels also record the information about the
customer’s attitude towards the hotel staff and offerings but in low tariff
hotels only 20% of respondents maintain information.

 All the hotels carry out personal counseling to handle the customer
complaints in both the high/medium tariff hotels and in low tariff hotels.
In high /medium tariff hotel complaint is recorded through phone by all
the hotels and in low tariff hotels it is through complaint box (60%). The
least used method is intranet (0%) which is not used by any of the hotel to
handle the customer complaint.

51
 In high/medium tariff hotels 48% of respondents are businessman and
32% are professionals. 53% of respondents in low tariff hotels are from
salaried class. Majority of respondents in high/medium tariff hotels
belong to more than 10 lakh income groups and in low tariff hotels
majority of the respondents belong to 2-5 lakh income categories.

 The age group of the respondents in both the categories was almost same
(48% and 43% respectively) and belonged to the 31-40 age groups.
Majority of the respondents in both the group were males (68% in
high/medium tariff hotels and 79% in low tariff hotels).

 The awareness among the customers regarding CRM is quiet nice. 108
respondents’ (72%) of the total respondents have knowledge about CRM.

 For high/medium tariff category hotels according to the customers the

customer satisfaction with respect to the CRM the mean score was highest
for “having membership of hotel encourages customer to stay in that
hotel” (=4.4). The lowest mean score in the same category was for
“access to room service via intranet” (=3.3). For low tariff category hotels
the mean score was highest for “quick response to calls” (=4.0). The
lowest mean score in the same category was for “sending wishes for new
year, birthday and wedding anniversary results in more satisfaction”
(=3.1). On the overall basis the overall mean score is highest for “quick
response to calls” (=4.2). The Z values were calculated and tested at 5%
level of significance and were found to be significant. This means that
there is a major difference in the customer satisfaction with respect to
CRM in the high/medium tariff and low tariff hotels.

 According to customers the maximum benefit obtained from CRM

approach was “increased customer satisfaction”. For high/medium tariff
category hotels the mean score was highest for “increases customer
satisfaction” (=4.1) and for “increased market share” (=4.1). For low tariff
category hotels the mean score is highest for “increases customer
satisfaction” (=4.5). On the overall basis the overall mean score was
highest for “increases customer satisfaction” (=4.2). The Z values were
calculated and were found to be insignificant. This means that there is no
difference of opinion in the high/medium tariff and low tariff hotels.

52
 The services that the customers prefer the most when they are on the
business trip was “direct line of the phone”. For high/medium tariff
category hotels the percentage was highest for “direct line of phone”
(87%). For low tariff category hotels the percentage was highest for
“direct line of phone” (93%). On the overall basis the overall percentage
was highest for “direct line of phone” (90%). The next highest percentage
was for “internet” (55%), “Xerox machine” (37%) and for “fax services”
(34%). The lowest percentage on the overall basis was found for the
“laptop” i.e. just (5%).

 The channel preferred by customers the most was “SMS”. For

high/medium tariff category hotels the percentage was highest for “SMS”
(53%). For low tariff category hotels the percentage was highest for “e-
mail” (43%). On the overall basis the overall percentage was highest for
“SMS” (64%). The next highest percentage was for “e-mail” (43%). The
lowest percentage on the overall basis was found for the “receiving
letters” (37%).

 The technique used for reservation by the customers the most was “via
phone” but in most of the cases (66%) “No reservation was done by the
customers”. For high/medium tariff category hotels the percentage was
highest for “no reservation” (63%). Other than that for the same category
the next highest percentage was for “via phone” (19%). For low tariff
category hotels the percentage was highest for “no reservation” (71%).
The lowest percentage in the same category was for “other means like
friends, relatives etc” (5%) and “internet” (0%). On the overall basis the
overall percentage was highest for “no reservation” (66%).

 For high/medium tariff category hotels the percentage of references given

by customers was highest for “relatives” (40%). For low tariff category
hotels the percentage was highest for “no referrals” (64%). On the overall
basis the overall percentage was highest for “no reservation” (66%).

 Many of the customers did not faced any problem during their stay in the
hotel. In high/medium tariff hotel category only 16% of the total
high/medium tariff hotel category customers faced the problem and
complaint about it to the hotel management.

53
Conclusion

There has been a considerable improvement in the service delivery system of

the hotel industry and the concept of CRM has taken a new dimension and is
gaining momentum in this sector.
The present study on CRM concludes that almost all the owners/managers of
the selected hotels in Bhopal were aware about the CRM concept and are
practicing it in their respective hotels.
However, high/medium tariff hotels are practicing it at a greater extent and
low tariff hotels are practicing it according to their convenience. The
customers of both the hotel categories (high/medium tariff and low tariff)
were satisfied with the CRM practices followed by the hotels of both the
categories. But the customers of high/medium tariff hotel category were
more satisfied as compared to the customers of low tariff hotel.

The companies are undertaking various activities for acquiring customers, for
customer development through personalization and customization, and for
customer retention.

Further, CRM practices help the hoteliers to increase customer satisfaction,

win customer loyalty and retain the customers which results in increased
market share and high profitability. No doubt selected hotels are following
the CRM practices but still there is a gap between customers’ expectations
and actual CRM practices adopted. So, efforts should be made to match the
CRM practices with customer expectations and thus enabling the hotels to
reap the benefits of the same.

From this study it can be concluded that the customer relationship

management in Company is satisfactory. The company is using various CRM
practices like customization of the product, maintaining interaction with the
customers regularly and providing good quality product etc. Customer
relationship management has a certain impact on the profitability of the
company. Average sale per customer has increased 15% over the last two
years. Customer response rate towards marketing activities is also improving.
There are various factors affecting the customer relationship management
like working environment of the company, support from top management
and coordination among the departments of the company.

54
Recommendations from the study

The hoteliers should increase the facility of membership of the hotels as it increases
the great demand among the customers.

 The hotels should provide the customized services to the customer’s

needs and expectations.

 The managers should inform the customers about the new schemes of the
hotel through SMS/e-mail.

 The hotels should quickly respond to the calls of the customers and
complaint handling should be enhanced.

 The hotels should maintain the database about the customer’s family,
travelling needs, previous hotel experience (if any) and customers likes,
dislikes, lifestyle and needs.

 Customer’s education and information sharing programs may be

undertaken by the companies at regular intervals.

55
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58
 ANNEXURE I
Questionnaire for Customers

1. Name:
2. Occupation:
a. Business
b. Salaried
c. Professionals
d. Any other (Specify)
3. Family Income:
a. Less than 2,00,000
b. 2,00,001 to 5,00,000
c. 5,00,001 to 10,00,000
d. More than 10,00,000
4. Age:
a. 1-20
b. 21-30
c. 31-40
d. 41-50
e. Above 50
5. Gender:
i. Male Female
6. Which Hotel you are residing in?

7. Are you aware about the Customer Relationship Management concept?

Yes No

8. Please rate the scale from 1-5 according to your satisfaction with the CRM practices
followed by the hotel:
S. No. Statement Strongly Agree Neutral Disagree Strongly
Agree Disagree
1. Quick response to calls
2. Meeting the requests of
guests with in suitable time
3. Staff/Personnel appropriate
behavior
4. Attending customer
complaints
5. Access to hotel information
via internet
6. Filling out the feedback
form via internet provides
more convenience
7. 24 hours online reservation
8. Accepting cancellation of
reservation by the hotel is
of special importance

i
 9. Internet services in room
10. The hotel should have a
user friendly website
11. Reservation via internet
increases the probability of
hotel selection
12. Paying the bills by credit
cards
13. Seeing a personal welcome
message on room’s TV
after checking in
14. Applying special services
like film/music on demand
15. Access to room service via
intranet
16. Providing customized
services at the time of
check-in and during stay
17. Sending wishes for new
year, birthday and wedding
anniversary results in more
satisfaction
18. Advertising about discounts
and special prices of each
season
19. Having baby sitter service
is necessary for the hotel
20. Offering city tour to
interested customers
21. Sending welcome note
from hotel management to
rooms
22. Having membership of
hotel encourages customer
to stay in that hotel
23. Receiving a complimentary
juice/tea as a refreshment at
the time of check-in

9. According to you how far CRM is important for any hotel? Please rate the following:
S. Statement Strongly Agree Neutral Disagree Strongly
No. Agree Disagree
1. Increase customer
satisfaction
2. Increase market share
3. Increase customer
loyalty
4. Profitability increases
5. Enhances lifetime value
of customer

ii
10. If you want to travel for business what services do you prefer in your room?
a. Fax
b. Internet
c. Laptop
d. Direct line of phone
e. Answering phone
f. Xerox machine
g. Office equipments
h. Any Other ( )

11. In case of follow up advertising which way you prefer better? Rank in order of
preference:
Sms
E-mail
Receiving letters
Telephone

12. How did you get reservation done in this Hotel?

a. Internet
b. Phone
c. Travel agency
d. Any Other ( )

13. How was this hotel introduced to you?

a. Travel agency
b. Previous experience
c. Via internet
d. Other recommendations

14. Have you referred the hotel to any of the following?

a. Friends
b. Relative
c. Business associates
d. Any other ( )

15. Do you need more services that are offered by the hotel? If yes please specify.
Yes No

16. Have you faced any problem with regard to the hotel and its services? If yes, what?
Yes No

17. If yes, did you complain about it?

Yes No

18. If yes, was the hotel able to handle the complaint and satisfy you?
Yes No

iii
 19. Do you intend to stay in this
hotel in future? If no, why
not?
Yes