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FACULTY OF COMMERCE
DEPARTMENT OF TOURISM AND HOSPITALITY
MANAGEMENT

A critique of the customer retention strategies
employed by hotels in Zimbabwe.

Proposed by:
Trevor Takura Zuze
R092242Z(PDP)

Lecturer: Njerekai C

TABLE OF CONTENTS.

Title

Page

1.1

Problem background

1

1.2

Statement of the problem

3

1.3

Research objectives

3

1.4

Research questions

3

1.5

Significance of the research

4

2.1

Literature review

4

3.1

Research methodology

7

1.7

Data analysis plan

9

4.1

Reference

11

1.0 background of the problem
Worldwide a number of factors have been attributed to the increase in the high customer defection rate. In the 1990s, service organizations turned their focus toward complaint management and recovery efforts as marketing strategies to minimize defections and boost customer retention. The way customers are served and recognized are critical fact ors in attracting, satisfying and retaining customers. Strategies that will help in retaining customers are considered critical in attaining a wide market share and repeat business. (chobaiwa et al 2010) . The hotel industry exemplifies a service industry characterized by a high degree of involvement between customers and service providers

Research by the Forum Corporation revealed that almost 70% of identifiable reasons why customers switched to competitors were associated with a dissatisfying service experience with a service provider during the service encounter. Whiteley (1991). Of the 70% of customers who switched to competitors, 21% switched because there was too little contact and individual attention from service providers, and 49% switched because the attention was poor. Indeed, problems experienced in the service encounter were the major cause of customer dissatisfaction and defection (Barsky & Labag h (1992).

Creating positive service encounters is the essence of customer loyalty, retention, and long -term relat ionships. Hence, the quality of the service provided by the service provider during the face to-face service encounter with the customer could be the deciding factor on which the customer makes a repurchase decision and is an influencing factor in the cust omer’s decision to form and maintain a long-term relationship with an organization. Bitner, Booms, & Tetreault (1990) From the viewpoint of the customer, it is often an employee who keeps or breaks the organization’s promises in the first and subsequent service encounters and, in doing so, creates a service gap (Bitner, 1995). The outcome of the interaction in the service encounter is the major cause of customer dissatisfaction and complaint and switching behavior (Keaveney, 1995).With regard to recovery efforts in the hotel industry, customers were less satisfied after a process failure (a rude receptionist), and this detracted more from satisfaction than an outcome failure such as the unavailability of a room because of overbooking (Smith, Bolton, & Wagn er, 1999). As service industries continue to grow in importance, consumers are increasingly expressing their dissatisfaction with individual service encounters. Whiteley (1991).The interaction in the service

encounter is a major focal point on which the customer evaluates the entire service organization, thus the quality of the service encounter can be an early indicator of whether an organization’s relationship with a customer is flourishing or in jeopardy. Bolton (1998). According to the 2008 Annual report in December, produced by the central statistics office, hotel occupancy levels dropped by 16%, Statistics of hotel occupancy are provided below in table 1 from January 2009 to 2010 October, according to the central statistics o ffice. Table 1

Month
2009 February

2009 May
2009 September
2009 December
2010 March
2010 June
2010 September
2010 October

Percentage of defected
customers
5
15
25
5
5
15
10
20
10

Percentage...
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