AN EVALUATION OF RELATIONSHIP MARKETING STRATEGIES FOR CUSTOMER RETENTION IN THE HOSPITALITY INDUSTRY IN GHANA

Description

CHAPTER ONE

GENERAL INTRODUCTION

1.1 Background to the Study

Marketing involves organizations and individual dealings that facilitate and expedite satisfying exchange relationships in a dynamic environment through the creation, distribution, and pricing of goods, services and ideas (Dibb et al; 2001).  These dynamics continually pose challenges for marketing practitioners and academics.  The evolving of new marketing paradigms to meet the new challenges that show fort everyday is therefore not surprising. Relationship marketing is one typical example of such new techniques in marketing.

In the past, marketers had focused on creating customers, selling what they produced, without enhancing and maintaining relationship with their customers. A shift from transaction to relationship focused marketing is the order of the day. Selling is not most important; as it is only a vital aspect of marketing. In lots of service environments, there may be face-to-face interplay between service vendors and customers from which social bonds may boost. A relational point of view fits well within these contexts, the place there is possibility for companies to promote longer client tenure, and obtain the related financial advantages (Ang & Buttle, 2006). Relationship advertising is largely approved via advertising and marketing students and practitioners as a crucial a part of triumphant advertising today.  Marketers at the moment are focusing on activities geared toward growing lifelong consumers.

Marketing hold the important thing to attaining organizational targets, being extra robust competitors in integrating marketing movements, in the direction of choosing and pleasurable the wishes and wishes of target patrons by making certain repeated transactions.  Purchasers grow to be partners through lengthy-term commitments to maintain those relationships with satisfactory product offerings, innovation and worth.

At the point when firms reliably fulfill the esteemed desires of the client, the client gets to be faithful to the association. Fulfilled clients in this way get to be resources, being joined to the organizations; results in devotion that forms into long haul relationship. The need of any business is to pull in and keep their clients. Accentuation ought to in this manner be set on clients by, not just distinguishing, reckoning and fulfilling their necessities gainfully, additionally establishing so as to hold the clients, upgrading and keeping up long haul associations with them.

Relationship marketing regards clients as accomplices. The part of relationship marketing is to build up, upgrade and keep up association with clients and different partners at a benefit, so that the targets of all involved included are met; and that is finished by a common trade and satisfaction of guarantees. Further aims of relationship marketing incorporate the conveyance of managed and expanding levels of fulfillment and maintenance of those clients by the upkeep and advancement of the relationship (Christopher, 1996, Ravald & Gronroos, 1996).

According to the World Tourism Organization (WTO) statistics (2006), Ghana ranks

9^th as one of the top emerging destinations in Africa with an annual growth rate of 10% between 2000 and 2004. For example, it recorded 497,129 international tourist arrivals in 2006 as against 428,533 international tourist arrivals in 2005, an increase of 16% (Ghana Tourist Board, 2007).

Hospitality enterprises contribute a major proportion of earnings from the tourism industry in Ghana. The industry, plays a key role in ensuring the success of tourist destinations especially providing rooms accommodation for tourists, visitors and business community; foods and drinks for residents and non-residents; and conference and meetings facilities for a wide range of businesses. The concept of hospitality involves providing the service which makes the customer feel welcome –that is, the ambience, the quality of staff, service, warmth, and the contribution of the ‘comfort’ factor. It is the amalgam of hotels, restaurant, and indoor/outdoor catering services; take away, clubs, casinos and leisure center’s among others.

Hotel business is characterized as a service industry because of inherent variables, which differentiate it from other businesses. It involves a degree of professionalism and expertise from personnel. It is a high customer-contact industry because the customers and hotel personnel are directly involved in the production and consumption process except the tangibles such as food and drinks. There is a high level of interaction between the customer and the staff to ensure efficient customer quality service, satisfaction and value. Assessment by customers of hotel services takes place only after consumption of the service and this involves the various services and products rendered in addition to the physical environment of the hotel especially the external environment – how convenient, accessible, and spacious; and the internal environment of the hotel – how conducive and tastefully furnished in terms of interior decorations-the furniture, beddings toilets and the bathrooms.

Another assessment criteria is how the hotel staff are able to meet guest’s expectations-how prompt and responsive they attend to guest’s requests and needs – like room service, waiters and porters.

Hotel enterprises in Ghana are largely concentrated in the urban areas such as Accra, Tema, Tamale, Takoradi Ho, Sunyani, Cape-Coast and Kumasi.

1.2        Problem Statement

It has been observed that hotel businesses in Kumasi have been having problems of          retaining their customers. The industry has experienced several challenges in the past which includes price instability, lack of innovativeness, competitive advertising and loss of customers.  These have greatly affected the hotels in terms of their market share, profitability, market growth and competitive positions. It has therefore become important to build and maintain long-term base of committed customers who are profitable for these hotels through relationship marketing. Hotels in Ghana are making attempts to practice relationship marketing for customer retention and yet they are having problems in doing so. Such problems are the basis for building, enhancing and maintaining relationship with customers, causes of customer satisfaction, evaluating relationship building and enhancement process and critical factors necessary for customer retention in relationship marketing in hotels in Ghana. Rexmar. This clearly indicates the need to evaluate the strategies for customer retention in the hospitality industry in Ghana which is the focus of this study.

This study, therefore, evaluates customer retention strategies in relationship marketing practices in the hospitality industry in Kumasi, Ghana with Rexmar Hotel Kumasi Ghana as the case study.

1.3       Objectives of the Study

The main objective of the study is to evaluate the effectiveness of relationship marketing strategies for customer retention for mutual benefit of the organization, the stakeholders and in particular –the customers. The specific objectives include the following:

1. To identify the relationship marketing strategies that has been instituted by

Rexmar Hotel, Kumasi.

1. To examine the impact of the relationship marketing strategies on customers retention at Rexmar Hotel, Kumasi.
2. To underscore the challenges Rexmar Hotel encounters in implementing the

Relationship marketing strategies.

1.4        Research Questions

Some research questions to be answered in the study include:

1. What are the relationship marketing strategies that have been instituted by

Rexmar Hotel, Kumasi?

1. What is the impact of the relationship marketing strategies on customers’ retention at Rexmar Hotel, Kumasi? iii. What are the challenges Rexmar Hotel encounters in implementing the

Relationship marketing strategies.

1.5       Significance of the Study

The researcher is motivated by the sustainable relevance of relationship marketing in almost all service industries especially in the high-involvement industry such as the hospitality industry. It is important in hotel enterprises as it enhances relationship with customers, which ultimately lead to long-term mutual benefit in profitability, customer loyalty and stability in business operations. A study of relationship marketing in the hotel industry is important because of the significant role hotel businesses play in the socio-economic development of Kumasi.  Therefore, it is necessary for the stakeholders to be constantly aware of the development and changes in the hospitality industry. The researcher is of the view that if the research objectives are achieved, it will useful for the following parties.

To begin with, Managers of hospitality enterprises, the study will be useful to all categories and levels of hospitality firms, as a framework for understanding, study and manage customer relationships in hotel enterprises.

Also Policy Makers, The study will serve as an input for policy formulation and implementation to regulate, monitor and supervise the hospitality and tourism industry.

In addition Entrepreneurs, Prospective investors who may wish to invest in, operate and manage a hotel business. It will help to stay ahead of the competition and maximize his investment potentials.

1.6       Scope of the Study

The scope of this study will focus on relationship marketing strategies for customer retention in the hospitality industry in Kumasi, Ghana.  The study is expected to evaluate relationship marketing strategies for customer retention in the hospitability industry in Kumasi Ghana with Rexmar Hotel Kumasi as the case study.

1.7        Methodology

To achieve the purpose of the study, information will be collected using both primary and secondary data. The use of questionnaire on customers and interviews with management of the company will be used to collect primary data. Again Data will be collected from sales books, customer registration cards, customer data base, internet and other publication relevant to the study.

1.8       Limitation to Study

The study cannot cover all areas in relationship marketing because of time constraints.  Also, most of the information required relates to business issues, ethical and legal regulations made it quite difficult to access some vital information concerning the company due to uncertainty of the use of the information being gathered.

1.9       Organization of the Study

The research has been organized into five chapters. The Chapter One of the study is the introduction chapter of the study which contains general introduction of the study, the statement of the problem, objective of the study, research questions, significance of the study, the scope of the study, limitations of the study and the organization of the study.

Chapter Two consists of a thorough discussion on the existing studies conducted by various researchers on relationship marketing. It looks at the concept of relationship marketing, customer retention and effects of relationship marketing on customer retention.

Chapter Three is concerned with the research methodology which comprises the research design, the population, sample and sampling techniques, data collection instrument, administration of instrument and finally data analysis.

The Fourth Chapter of this study consists of the data analysis which was collected for the study and also comprises of the results extracted for the study.

The Concluding Chapter of this study consists of summary results, conclusion of the study, recommendations for Rexmar Hotel and interested hospitality firms such as hotels, guest house, restaurants and other recreation centers.