Customer Relationship Management Practices in Melbourne Hotels

This case study explores customer relationship management (CRM) practices within Melbourne's hotel sector, Victoria, focusing on the significance of CRM in enhancing customer service, revenue, and overall business performance. It investigates the implementation of CRM strategies, the challenges faced by hotels, and the impact of technology, knowledge management, and customer focus on hotel performance. The study draws from existing literature to highlight the benefits of effective CRM implementation, such as improved market segmentation, personalized services, and increased customer retention. It also addresses the research gap in the context of Melbourne hotels and aims to provide valuable insights for hotel management, policymakers, and the Victoria Tourism Industry Council (VTIC) to improve CRM practices and enhance tourist attraction. Desklib provides access to this case study along with a wealth of study resources, including past papers and solved assignments, to support students in their academic endeavors.

CRM Practices in Hotels 1
Customer Management Relationship Practices in the Hotel Sector: A Case Study of
Melbourne Hotels, Victoria
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Table of Contents
Background................................................................................................................................3
The significance of the Study.....................................................................................................3
The scope of the Study...............................................................................................................4
Problem Statement and Objectives............................................................................................5
Literature Review.......................................................................................................................6
References................................................................................................................................10

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Background
Most businesses today are facing vital issues in the area of customer service, service
provision and retention both within and without. The different features of the demographics
in addition to the increasing customer expectations are forcing entities to reconsider their
customer relationship management practices (CRM) (Meyers, Durlak, and Wandersman,
2012). The current market is characteristic of stiff competition making organizations to
devise ways to keep up with the drastic changes. Customer service is defined by Turban et al.
(2017) as a service of activities formulated to improve customer satisfaction level, which is
the understanding that a given product or service has met the expectations of the customer.
Customer service has a primary function of generating sales and increasing profit in an
organization (Jasmand, Blazevic, and de Ruyter, 2012). Thus, based on such viewpoint, the
management will be right if they incorporate as part of a general approach to systematic
improvements.
Customer care is a competitive tool that quickly distinguishes one business from the other
(Chang, Park, and Chaiy, 2010). The principle is to observe excellent customer service to
ensure significant benefits (Grove et al., 2015). Due to the ever-increasing competition in the
hospitality sector, most of the hotels are geared towards acquiring a competitive edge through
customer care (Mohammed, and Rashid, 2012). Effective implementation of customer
relationship management strategy has proved to be beneficial to those enterprises that have
adopted them; such businesses can also profit from increased revenue through improved
market segmentation, personalized services and products, improved service and product
quality, and high customer retention and loyalty (Akroush et al., 2011).
The significance of the Study
The objective of the study is to find out customer relationship management in the hotel sector
a case study of Melbourne hotels, Victoria. The research findings will establish an advanced

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understanding of the importance of customer relationship management in business activities
of the hotel sector in Melbourne and increase revenue. The outcomes of the study will be
cited as references for further research. Additionally, this study will allow scholars to
determine additional areas for research on customer relationship management in Melbourne
hotels. As a result, the quality of customer service will be improved leading to increased
sales, revenue, and corporate image. The research findings will as well be cited by
academicians and deductions made because of its contribution regarding conceptual and
theoretical frameworks in the part of customer relationship management.
The policy makers both in public and private sectors will find the outcomes and
recommendations useful to the hotels in Melbourne because they can use the empirical
information as a basis for the formulation of their policy on customer relationship
management. The findings will also be relevant to the Victoria Tourism Industry Council
(VTIC) regarding the nature of customer relationship management practices in the hotel
sector. They are to find the information related to them because better CRM practices in the
hotel sector will significantly impact tourist attraction in the nation. The hotels’ management
will also gain an understanding of the significance of CRM in the hotel sector and also re-
assess their service policies if need be to survive in the highly competitive Australian service
industry.
The scope of the Study
The scope of the survey will be limited to the study on the customer relationship management
practices in the hotels located in Melbourne, Victoria. The research will deliberate on four
theoretical models of customer relationship management namely technology-based,
knowledge management, CRM organization, and strategic customer focus. Also, customer
relationship management practices and the process will be discussed. Furthermore, this
survey will focus on five, four and three-star hotels in Melbourne. The study will collect data

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from employees from the sample hotels, especially those from the marketing and finance
department.
A semi-structured questionnaire will be designed into two parts in line with the study
objectives. Part one will be formulated to acquire demographic characteristics of the hotel
staff, whereas part two will comprise of questions that are related to customer relationship
management practices in the hospitality industry in Melbourne. The questionnaires will then
be delivered to the employees and then picked after two weeks, edited for completeness and
reliability then the data analyzed, deduced according to the objectives using SPSS.
Problem Statement and Objectives
The stiff competition in the current market requires organizations that accurately understand
the dynamic needs of the customers and can meet them by continually scanning the business
environment and providing the best quality service or products to the consumers. According
to Colquitt et al. (2011), the increasing instability of the environment implies that the future
will necessitate a high transformation level on the part of the businesses. Consequently,
enterprises are confronted with very intense competition and thus low sales volume and profit
or sometimes losses.
Reimann, Schilke, and Thomas (2010) attribute such a scenario to inadequate or absence of
customer relationship management practices. Based on our research no studies have
attempted to address CRM practices in the context of Victoria more so Melbourne. Owing to
the significance of the survey as already outlined, it is imperative that research is done on
CRM practices in Melbourne hotels. This survey is expected to fill the research gap through
the following objectives:
1. To find out the customer relationship management practices in the hospitality sector in
Melbourne

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2. To ascertain the difficulties that Melbourne hotels face in the implementation of
customer relationship management strategies.
Literature Review
Al-Azzam (2016 ) studied the relationship between customer relationship management
dimensions and performance of 50 Jordanian hotels using correlation and regression analysis
tests. The study applied an individual survey research design and with the help of a
questionnaire to gather data. The study outcomes showed a significant relationship between
the dimensions of CRM and hotel performance. The variables considered in the study include
consumer orientation, knowledge control, CRM organization and technology-based CRM.
The CRM technology had a substantial and positive association with the performance of the
hotels. The correlation tests show that technology-based CRM had the most significant
correlation of .46 followed by customer orientation (.38), knowledge management (.38) and
lastly CRM organization (.35). The correlation was significant at 0.01.
Thus, effective implementation of CRM technology has an essential role in increasing
marketing capabilities, which leads to improved business performance. The authors attribute
this to the advancement in information communication technology and the adoption of
different CRM systems that reduce internal costs. Also, the CRM system has enabled hotels
to acquire correct information from reliable sources promptly, thus allowing the hotel to
management to make appropriate decisions on the delivery of better services.
Mohammed, Rashid, and Tahir (2014) surveyed hotels in Malaysia to ascertain the
relationship between CRM technology and organization performance with the mediating role
of marketing competencies, that is strategy and execution. The dimensions of corporate
performance include financial, consumer, organizational process and education and
development. The survey applied regression and correlation test analyses. The study
outcomes show a significant positive association between CRM technology and the four

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scopes of organizational performance with the customer having the strongest correlation
of .38 followed by the corporate process (.36), financial (.35) and lastly education and
development (.30) in that order. Hence, CRM technology has an essential function in
enhancing corporate performance.
Furthermore, the outcomes of the survey show that a positive vital relationship exists between
CRM technology and marketing planning competencies and marketing enactment
competencies, with the latter being more strongly correlated than the former. There was also
a positive, important association between marketing planning competencies and marketing
enactment competencies and the different aspects of hotel performance. Concerning the
findings of mediation, there is a mediating effect of the marketing capabilities on the
association between CRM technology and the different scopes of hotel performance. The
mediating elements (marketing planning and marketing enactment competencies) had an
almost equal effect on the association between CRM technology and various aspects of hotel
performance.
The study by Hoseini and Naiej (2013) evaluated the link between CRM and clear
performance measures on the Iranian banking sector. The variables of the CRM process
included initiation and maintenance relationships (independent variable), whereas, the
performance measures were financial, consumer, organizational process, and education and
development (dependent variable). Regression factor analysis was used to test the impact of
the study variables. The outcomes show a positive relationship between the CRM processes
and the performance of banks. The strongest influence on financial performance was the
sustenance relationship process (0.95) followed by consumer-based performance (0.89). The
association between the initiation association process and education and development
performance (0.28) had the least impact.

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Kim (2012) examined the influence of the CRM process on customer parity factors and
consequently firm performance. The study applied a three-stage model; CRM process
(customer acquisition, retention, and expansion), consumer parity factors (value, brand and
relationship parity) and firm performance, with the consumer parity factors playing the
mediating role between CRM process and corporate performance. The findings indicate that
organizational CRM approaches first have an impact on parity factors, and these factors then
define the corporate performance. Customer acquisition influenced both the consumer’s value
and brand parity. However, customer retention is inversely proportion to customer
acquisition; but with a single positive impact on relationship parity.
On the other hand, customer expansion influenced the entire customer parity factors. The
findings also reveal that customer parity factors could be as well act as excellent predictors of
corporate performance. While all the customer parity factors have revealed constructive
associations with firm performance, they have been demonstrated under the criteria of
association, value, and brand parity with regard to the impact level of business performance.
Yaghoubi, Asgari, and Javadi (2017) surveyed the influence of CRM on firm productivity,
customer allegiance, satisfaction and belief in some Iranian hospitals. The study adopted a
descriptive correlation design on nurses sampled by the stratified random approach. The areas
of CRM with the most significant positive impact on customer satisfaction were customer
loyalty (0.83) and trust (0.81). The highest effect is as a result of established customer loyalty
and through the presence of patient complaint management in the health center. The diversity
of services as a component of CRM had the highest effect, and this was attributed to the
availability of consultation services and new services meeting patient expectation and needs.
The CRM dimension of Customer interaction had a significant effect (0.74) on the study
objective. The findings attributed such an important impact to the proper handling of the

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medical practitioners alongside patients and sustained dialogue with patients after they leave
the hospital. Customer identification and prioritization had a high (0.72) effect as a CRM
component. This the hospitals achieved through determining the customers who were about
to terminate their association with the hospital and then trying to retain and increase their
loyalty, thus reducing costs and improving profitability.

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References
Akroush, M.N., Dahiyat, S.E., Gharaibeh, H.S. and Abu-Lail, B.N., 2011. Customer
relationship management implementation: an investigation of a scale's generalizability and its
relationship with business performance in a developing country context. International
Journal of Commerce and Management, 21(2), pp.158-190.
Al-Azzam, A.F.M., 2016. The Impact of Customer Relationship Management on Hotels
Performance in Jordan. International Journal of Business and Social Science, 7(4), pp.422-
436. Avaialbe from: http://www.ijbssnet.com/journals/Vol_7_No_4_April_2016/23.pdf
[Accessed 24 April 2018].
Chang, W., Park, J.E. and Chaiy, S., 2010. How does CRM technology transform into
organizational performance? A mediating role of marketing capability. Journal of Business
Research, 63(8), pp.849-855.
Colquitt, J., Lepine, J.A., Wesson, M.J. and Gellatly, I.R., 2011. Organizational behavior:
Improving performance and commitment in the workplace. McGraw-Hill Irwin.
Grove, S., Fisk, R., Harris, L., Ogbanna, E., John, J., Carlson, L. and Goolsby, J., 2015.
Disservice: A Framework of Sources and Solutions. In Marketing Dynamism &
Sustainability: Things Change, Things Stay the Same… (pp. 169-172). Springer, Cham.
Hoseini, S.H.K. and Naiej, A.K., 2013. Customer Relationship Management and
Organizational Performance: A Conceptual Framework Based On The Balanced Scorecard
(Study Of Iranian Banks). Journal of Business and Management, 10(6), pp.18-26. Avaialbe
from: http://www.academia.edu/download/32138258/C01061826.pdf [Accessed 24 April
2018].

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Jasmand, C., Blazevic, V. and de Ruyter, K., 2012. Generating sales while providing service:
A study of customer service representatives' ambidextrous behavior. Journal of
Marketing, 76(1), pp.20-37.
Kim, H.S., 2012. How CRM strategy impacts organizational performance: Perspective of
customer equity drivers. Journal of Database Marketing & Customer Strategy
Management, 19(4), pp.233-244. Avaialbe from:
https://link.springer.com/article/10.1057/dbm.2012.21 [Accessed 24 April 2018].
Meyers, D.C., Durlak, J.A. and Wandersman, A., 2012. The quality implementation
framework: A synthesis of critical steps in the implementation process. American journal of
community psychology, 50(3-4), pp.462-480.
Mohammed, A.A. and Rashid, B., 2012. Customer Relationship Management (CRM) in
Hotel Industry: A framework proposal on the relationship among CRM dimensions,
Marketing Capabilities, and Hotel performance. International Review of Management and
Marketing, 2(4), p.220.
Mohammed, A.A., Rashid, B.B. and Tahir, S.B., 2014. Customer relationship management
(CRM) Technology and organization performance: is marketing capability a missing link?
An empirical study in the malaysian hotel industry. Asian Social Science, 10(9), p.197.
Avaialbe from: http://www.ccsenet.org/journal/index.php/ass/article/download/36589/20574
[Accessed 24 April 2018].
Reimann, M., Schilke, O. and Thomas, J.S., 2010. Customer relationship management and
firm performance: the mediating role of business strategy. Journal of the Academy of
Marketing Science, 38(3), pp.326-346.

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Turban, E., Outland, J., King, D., Lee, J.K., Liang, T.P. and Turban, D.C., 2017. Electronic
Commerce 2018: A Managerial and Social Networks Perspective. Springer.
Yaghoubi, M., Asgari, H. and Javadi, M., 2017. The impact of the customer relationship
management on organizational productivity, customer trust and satisfaction by using the
structural equation model: A study in the Iranian hospitals. Journal of education and health
promotion, 6. Avaialbe from: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5433632/
[Accessed 24 April 2018].