Therefore this study Is an attempt to provide a value conceptual model that explains the theoretical linkages existing between CRM dimensions and hotel performance. This study serves not only to clarify the relationship between CRM dimensions and hotel performance, but also to explain the mediation role of marketing capabilities in this relationship. Keywords: CRM; Marketing capability; Hotel industry JELL Classifications: MOM; ALL ALL 1.
Introduction undoubtedly, CRM has recently become one of the most controversial Issues and a focal-point In the business field (Ballard and Dollars, 2010; Becker et al. , 2009; Diametrical and Steven, 2008; Congener and Iraq, 2006). It Is worth mentioning that CRM is mainly based on the belief that establishing a sustainable relationship with customers is the cornerstone for obtaining loyal customers who are much more profitable than non -loyal ones (Dowling, 2002).
In this regard, the successful implementation of CRM strategy will be of great benefit to the organizations, adopting it, as such organizations can reap the benefit of Increasing sales through better market segmentation, customizing products and services, obtaining higher quality products, gaining access to information and employee satisfaction, and above all, ensuring long-lasting customer-retention and loyalty (Lombardi, 2009; Congener and Iraq, 2006; Stockades, 2007; Versa and Chandler, 2009). Moreover , we have to bear In mind that recent studies on the CRM selectively focus on some service sectors , such as banking (e. . Karakas et al. 2011; Becker , Grave, and Labels 2009; Did, 2007; Hussein et al. , 2009; Crosstalk et al. , 2009; Sin, TTS and Him 2005), telecommunication (e. G. Limitation, 2009: Bellied et al. , 2010), healthcare (e. G. Consequently, there is still a marked lack of research on CRM in the hospitality industry (Luck and Stephenson, 2009; Www and Lu, 2012). So it is not a surprise to find Vogue’s highlighting this concept. He says, although there is ever-increasing use of CRM in the tourism sector, there are still limited researches investigating its variety of applications in such significant industry (Pogo, 2011).
Furthermore, several researches refer to the importance of making studies on CRM dimensions in the hotel sector (Karakas et al. , 2011; Sadie et al. , 2011; Sin et al. , 2005). As a result of that, it is reasonable to lead the conclusion that it is not only very little attention has been given to the CRM dimensions in the hotel industry, but there is also plenty of opportunity for extending the literature about CRM dimensions and hotel performance, both theoretically and empirically. International Review of Management and Marketing, Volvo. 2, No. 4, 2012, up. 220-230 221 2.
Customer Relationship Management (CRM) In this connection, it is worth noting that the concept of CRM can be defined in different ways. It also means different things to different people; depending on the working environment it has been used in (Barn et al. , 2008; Dimidiates and Steven, 2008; Pissarro and Fagan, 2009). Therefore, there is no single correct definition of CRM (Abdullah et al. , 2010; Humid, 2009; Angina, 2005). However, to enrich the literature about CRM, this study will define it as ” a strategic approach that enables organizations to use internal resources (I. . Technology, people, and process) to engage the relationship with customers for the whole of their lives cycles, in order to create a competitive advantage and improve an organization’s performance”. 2. 1 CRM and Hotel industry Despite the fact that CRM brings lasting benefits to organizations, as a whole, some of them gain profits from implementing it more than others; CRM brings benefits to the organizations that generate a lot of information about customers (Bose, 2000; Kettle, 2002; Unguent et al. , 2007).
In addition to this, Gross (2004) that service organizations for their intrinsic characteristics of the production and consumption re inseparable elements necessary to build relationships with customers. Accordingly, CRM will be ideally suited to the hotel industry, especially when implementing it successfully and effectively, taking into our account that hotels receive a lot of data about customers. Such data can be transformed into useful knowledge about them (Kettle, 2002; Line and Us, 2003; Unguent et al. 2007; Insulation and Moved, 2008; Deep and Olsen, 2000). Suffice it to say that hotel industry, like any business sector has to be highly competitive to be able to do well in the business environment, therefore, it is of vital importance for it to encourage behavioral patterns of continuous re-purchase and to retain customers last longer. Thus , it is evident that such ambitious aims can only be achieved through implementing CRM , which will result in establishing fruitful relationship between organizations and their customers (Postulation’s et al. 2007; Verdure et al. , 2009). Customer expectations, price-sensitive travelers, more sophisticated clients, uncertain market and less brand loyalty are all key factors, which strongly urge hotels to focus n CRM as a useful strategy. Needless to say, CRM is widely considered as one of the most effective ways to facilitate developing and expanding the customers’ base that , in turn , will assist in enhancing profitability and guest loyalty (Melanomas, 2009; stall, 2005; stall and commonly, 2004; www and u, 2011). 2. 2.
CRM Dimensions It is a proven fact that the multi- dimensions concept of CRM can be considered relatively new, because of the only few studies, which are made on the CRM dimensions of some service sectors such as banking (Karakas et al. , 2011; Sadie et al. , 2011; Sin et al. 2005; Vim, Anderson, and Examination, 2005) and contact centers (Obdurately et al. , 2010), thus the range of information on this concept is quite limited. To drive the point home, it can be said that CRM consists of four broad behavioral dimensions (Sin et al. 2005; Him et al. , 2005). These behavioral dimensions are: key customer focus, CRM organizations, Knowledge management and technology -based CRM. It is essential that all of these dimensions must work systematically in an organization to guarantee its improved performance (Fox and stead, 2001; Sin et al. , 2005; Him et al. , 2005). In this regard, Obdurately et al. (2010) investigation on the impact of CRM dimensions on call -centers in Malaysia can be taken as a typical example.
He declares that customer orientation, as one of the CRM dimensions, is more comprehensive than key customer focus. His argument receives much support from several studies that consider customer – orientation as one of the most important dimensions of CRM (e. G. Wang, Hung, Chem.., and Line, 2010). Furthermore, several researches highlight the important effects of conducting studies on CRM dimensions in the hotel sector (e. G. Karakas et al. 2011; Sadie et al. , 2011; Sin et al. , 2005).
Consequently, this study is being done with the aim of filling the gap that has been left because of the very little attention given to the above- mentioned dimensions in the hotel industry. Therefore, it is logical to go into details of about CRM dimensions as follows: 2. 2. 1 Customer Orientation It is important in the first instance to confirm that the main purpose behind customer -oriented behaviors is to increase customer long-lasting satisfaction and to create customer-loyalty.
Therefore, studies have demonstrated that good customer – oriented behaviors, in an organization, definitely Customer Relationship Management (CRM) in Hotel Industry : A framework Proposal on the Relationship among CRM Dimensions, Marketing Capabilities, and Hotel Performance ensures a tremendously positive impact on its performance (Kim, 2008; Wilma et al. , 2005). Similarly, King and Burgess (2008) reach the conclusion that customer orientation is a crucial factor in the successful implementation of CRM.
Moreover, current researches have revealed that service firms, like hotels, require a and their performance (Kim et al. , 2006; McLaughlin et al. 2002; Sin et al. , 2005). As in the service oriented organization, the delivery of service in a hotel occurs when there is interaction between service providers and the service encounter (Kiwi Lee et al. , 2006). Hence in order to enhance service experience, hoteliers need to focus on customer interaction. Customer oriented can be achieved through a positive relationship between customer and service provider.
Research has supported that customer orientation leads to increase organizational performance (Khakis, 2010; Lieu et al. , 2003; Chou et al, 2009). Furthermore customer orientation is also one of the rarest beneficial sources, it helps organization to understand customer, and hence it helps in delivering an appropriate plan to satisfy customer needs (Lieu et al. , 2003) Furthermore, several studies revealed that there is a relationship between customer orientation and marketing planning capabilities (Morgan, Ivories, and Mason, 2009; Plundered and Speed, 1996).
Besides this, the beneficial influence of customer orientation strategy on marketing-planning capabilities, this strategy also influences the successful implementations of marketing actions or innovations (Slater and Nearer, 1998). Hence, we note that despite the numerous positive impacts of customer – orientation on organizations performance, the fact remains that there is still a shortage of literature about customer – orientation impact on hotel performance (Sin et al. 2006; Addition, 2010). 2. 2. 2 CRM organization First and foremost, to enhance service employees to conduct customer- oriented behaviors, organizations have to develop an appropriate working environment for service in work, for instance, providing staff with the modern tools, and technology, customer-satisfaction tracking and complaints management systems, inspirational dervish, and appropriate rewards systems.
As a result of the previous supportive working conditions, organizations can ensure the required customer oriented behaviors of their employees (Mechanic and Patterson, 2011) The researchers also argue that CRM cannot be successful even if the organizations enjoy the most advanced technology and adapt a customer – oriented approach, unless the project is completely integrated by them ( Sin et al. , 2005; Him et al. , 2005) Further, as a confirmation for this point UK (2010) stress that CRM success does not only require technological quality or systems, but it also requires an effective service incept as well as suitable operation procedures.
Thus, the success of CRM implementation relies on the active involvement of the employees in the organization itself (Building, Stalin, Ret, and Johnston, 2005; Payne, 2006; Tamarinds, 2011). Therefore, we can say that CRM organization has to be an essential means through which firms effect fundamental changes in the way they organize their actual business processes for employees and customers ( Sin et al 2005; Him et al. , 2005).
Inevitably, all the organization resources (such as marketing capabilities, policies, ultra, and organization structure) have to be integrated in order to implement CRM successfully and, in turn, to improve organizations performance. Previous studies also declare the positive impact of CRM organization on customer retention (Him et al. , 2005), financial and marketing performance (Crouch et al. , 2011; Sin et al. , 2005). Moreover, Richards and Jones (2008) argue that CRM organization may influence distribution.
In this regard, it has also been reported that many hotel chains cleverly and flexibly quote their room prices according to the customer data that were elected previously (Nines and Dryzee, 2006). It goes without saying that Knowledge about customers plays a vital role in CRM, taking into our consideration the fact that the main purpose behind collecting data about customers is to get a clear image about them from different perspectives (Sin et al. , 2005).
Therefore, organizations can authenticate such data to be able to establish and develop beneficial relationship with their customers (Shay and Griffin, 2004). 2. 2. 3 Knowledge Management Needless to say that useful information about customers can be gathered through interactions with them or from different touch points within the organization itself (Brahmas et al. , 2003), and the criterion for deciding whether CRM is successful or not , is to effectively transform customer information into customer knowledge (Plisses and Boon, 2004; Astringently et al. 2004). In this connection, we can say that managing knowledge effectively can greatly help an organization to have success in building better customer relationship, resulting in a positive impact on organization performance (Abductees et al. , 2010; Karakas et al. , 2011; Sin et al. , 2005; Him et al. 2005). We have to take into our account that the success of relationship management is heavily dependent on collecting and analyzing customers’ information, as such information is used for developing highly personalized offerings (Kigali, 2005).
As a matter of fact, it is necessary for organizations to remain competitive, and this aim cannot be achieved unless they enjoy wide knowledge about their market, explore and make use of their existing knowledge about their customers. Hence, Lo et al. , (2010) recommend investigating the impact of knowledge management dimension on tool industry in future research. In this case, researchers state that there is limited research that explains the role of knowledge management in the hospitality context (Hailing and Marinara, 2008; Shaw and William, 2009).
Meanwhile, hotels that enjoy a lot of customer’s knowledge to be disseminated among their different departments are more likely to implement successful marketing activities for meeting their customer needs (Noble and Mohawk, 1999). Moreover, Fan and UK (2010) indicate that customer knowledge management is firmly associated with marketing capabilities, ND it greatly enables organizations to take strategic managerial decisions for improving their performance. 2. 2. Technology Based CRM Tutu and Helmsman (2011) are of the opinion that CRM strategy will end in failure if the information technology is not used properly, thus the suitable use of technology in marketing is one of the greatest opportunities in hotel industry, because of the fact that it is important to get the right information from the right people at the right time , so that the right decisions can be made and lour the services can be rendered (Deep and Olsen, 2000; Morality-Jones et al. 2008 ). In support with that view, Assam performance, because hotels need to use information technology for improving their performance . N this regard, new technologies are considered as the core drivers for change (Mightier, 2003). Furthermore, several studies, made about the impact of information technology on organization performance report similar findings about the positive role of information technology in CRM strategy. In other words, these studies revealed that many customer-centric strategies cannot achieve their goals , without the help of information technology (Obdurately et al. 2010; Did, 2007; Congener and Iraq, 2006; Kigali, 2005; Sin et al. , 2005; Yeah et al. , 2010).
Consequently, CRM based technology enables organizations to plan and implement successful marketing actions for retaining customers long-last and making them more profitable , because of the customer database and other information-storing systems (Roberts, Lieu, and Hazard, 2005). Additionally, Change , Park , and Coach (2010) confirm that CRM technology improves marketing capabilities by providing valuable information about customers, which, in turn, will help both managers and employees to achieve specific marketing Laos much more effectively .
Moreover, they also recommend investigating separately the mediating impact of marketing planning capabilities and the implementation of marketing capabilities on the relationship between CRM and organizations performance. Therefore, this study is intended to clarify the mediating role of planning and marketing capabilities in the relationship between CRM dimensions and hotel performance. Additionally , this study is also designed to be more comprehensive than the study of Change et al. (201 1), because it will investigate the mediating effect of marketing viability between each dimension of CRM , not only CRM technology and hotel performance. 24 3. Marketing -Planning Capabilities In fact, literature about organizational capabilities has indicated a positive relationship between capabilities in general, and firm performance (Day, 1994). Therefore, it is not accidental that Agglomerates and Dickson (2004) defines marketing planning capabilities as the firm’s ability to expect and react to the changes in the market environment for the purpose of directing its resources actions to work towards the alignment of the firm with the environment and the achievement of organizational financial goals .
Hence, Agglomerates and Dickson find out that marketing -planning capabilities have a positive influence on the firm’s performance. In this regard, Sharkskin et al. , (2009) say that developing marketing-capabilities will lead to better organizational performance. Similarly, Ivories et al. , (2009) conclude that both specialized and strategies. Most importantly, these types of marketing capabilities and their integration are significant drivers of market effectiveness.
Therefore, customer- centric strategies influence the marketing capabilities of the organizations and leads o improved organizational performance. Moreover, Plundered and speed (1996) assert that marketing -planning capabilities enable organizations to adopt a market orientation or customer orientation approaches and take appropriate actions accordingly. In this regard, Morgan et al. (2009) declares that market orientation is working in association with marketing capabilities to generate economic profitability, and may be considered as a source of competitive edge.
Furthermore, the collaboration between the organization’s customer orientation and its marketing capabilities is positively related to its business performance , because it dads to the creation of casual ambiguity, making it difficult for competitors to determine the firm’s competitive advantage (Reed and Defiling, 1990). Furthermore, numerous studies have also found that marketing planning capabilities have a positive influence on organizational performance (Change et al. , 2010; Morgan et al. 2009; Agglomerates and Dickson, 2004; Voices and Morgan, 2005). 4. Marketing Implementation Capability Marketing implementation capability is the process that transforms plans into actions; thus, marketing implementation capabilities play a vital role to improve organizational performance through transforming marketing strategy plan to actions (Kettle and Keller, 2009). Voices and Morgan (2005) reveal that marketing implementation capabilities positively affect organizational performance.
It is believed that, marketing implementation capabilities is one of the main factors that influence marketing effectiveness in hotel organization that leads to improved hotel performance (Cinema and Weber, 2000). Consequently, numerous studies have found a significant positive relationship between marketing implementation capabilities and organization performance (Voices and Morgan, 2005; White et al. 2003). In line with these results, marketing implementation capabilities are found to have a direct significant positive influence on organizational performance in manufacturing and service firms (Salter et al. 2010). Similarly, Neil (2010) contends that implementation of marketing capabilities play a mediating role on the relationship between organizational memory (e. G. Customer orientation, procedures, and expertise) and marketing effectiveness in the organization. Additionally, Lee et al. , (2011) empirically find that marketing implementation capabilities play a significant editing effect on the relationship between customer knowledge and organization performance. They contend that customer knowledge is critical to the development and implementation of marketing programs which leads to improved firm’s performance.
Furthermore, marketing implementation capabilities have a significant mediating effect on the relationship between marketing strategic development and organization performance (White et al. , 2003). Thus, a hotel’s ample knowledge of customers will enable it to recognize one of a kind characteristic of target markets and to develop suitable strategies for it. It can be stated that the knowledge of customers’ perception and utility of products, can be utilized for the development White, 1999). Moreover, Lee et al. 2011) state that better execution of an organization’s marketing program compared to its competitors depends on its skill to adapt to various customer preferences. Hence, those organizations that are more knowledgeable of their customers’ preferences have more probability to 225 increase and hone their skills in recognizing opportunities and achieving optimum potential through the implementation of an effective marketing program (Noble and Mohawk, 1999). Additionally, Sharkskin et al. (2009) refer to the point that successful implementation of CRM can play a key role in developing marketing capabilities.
That’s mean CRM antecedents the development of marketing capabilities in the organization. Moreover, Change et al. (2010) found that marketing capabilities (planning and implementation) have a mediation impact on the relationship between CRM technology and organization performance. Thus, it can be said that marketing capabilities is an integrated process, designed to make use of corporate knowledge, skills and resources. It enables businesses to meet their customer’s needs in a better way, through value added services to their products (Aziza et al. , 2009). 5.
Hotel Performance CRM dimensions evaluation was assessed in a number of ways, including customer satisfaction (Abductees et al. , 2010), market effectiveness and financial performance (Sin et al. , 2005), customer performance and financial performance (Karakas et al. , 2011), and customer retention and sales growth (Him et al. , 2005). The use of other dimensions of performance is beneficial as suggested by previous studies (Sin et al. , 2005). Therefore, this study will use the Balance Scorecard (BBS) dimensions to evaluate the impact of CRM dimensions on hotel performance.
The present study uses a Balance Score Card (BBS) dimension to evaluate hotel performance because financial figures cannot provide a full understanding of CRM impact and result and therefore the total performance perspective should be employed in the evaluation of CRM results (Www and Hung, 2007). In addition, existing literature reveals that the use of balance score card(BBS) to evaluate the impact of CRM on business performance is critical because it is a useful tool to provide an in PPTP understanding of enterprise’s total operation performance (Www and Lu, 2012; www and Hung, 2007). 6.
Theoretical Background and Conceptual Model The proposed model of this study conceptualizes the relationship among CRM dimensions, marketing planning and marketing implementation capabilities, and hotel performance. The relationship is based on the resource based view that suggests that the performance of the firm is influenced by its internal resources and capabilities; a firm obtains better performance by making more effective use of its resources than competitors. This model involves four dimensions of CRM which include customer orientation, is built on previous studies (Obdurately et al. , 2010; Change et al. , 2010; Sin et al. 2005; Www and Lu, 2012) while the relationship between variables in this model is based on RIB theory which proposes that organizations having valuable resources can successfully implement business strategy to create competitive advantage and consequently improve organization performance (Barney and Deadly, 2007). (See figure 1). Figure 1 . Conceptual Model of the influence of CRM Dimensions on Hotel performance Customer orientation Marketing planning abilities Financial perspective Customer perspective CRM organization Internal process perspective Knowledge management Technology based CRM Marketing implementation Learning and growth 226 7.
Conclusion and Recommendation In conclusion, this study has provided a theoretical model to show the firm relationship between CRM dimensions, marketing capabilities and hotel performance. It contributes enormously to the body of knowledge, as it provides a comprehensive framework that is used for explaining the impact of the CRM four relationship management neither has been fully verified, nor empirically assessed to determine the strength of the relationship between dimensions of customer- relationship management and hotel industry performance.
Moreover, this study uniquely extends the body of knowledge by explaining the theoretical possibilities of the mediating role of marketing capabilities (planning and implementation) in the relationship between CRM dimensions and hotel performance. It is worth mentioning that this paper will also raise awareness among hotel managers to pay more attention to CRM dimensions, marketing capabilities, and assist them in improving hotel performance and competitiveness. However, the fact mains that this study has its limitations.
