Date of Award

2015

Degree Type

Thesis

Degree Name

Doctor of Philosophy

School

School of Business

Faculty

Faculty of Business and Law

First Advisor

Professor Hugh Wilkins

Second Advisor

Dr Dale Sanders

Abstract

This study combined two significant areas in marketing, customer relationship management (CRM) and variety-seeking behaviour (VSB), which are paradoxical constructs due to their contradictory intentions. While organisations implement various customer relationship management practices with an intention of retaining customers and generating loyalty, a preference for variety-seeking behaviour can make customers switch. This study investigated the impact of variety-seeking behaviour on generating outcomes of customer relationship management practices in the hotel context, by focusing exclusively on leisure travellers.

Even though customer relationship management is widely adopted in the hotel domain, much of its discussions are on implementation related aspects, rather than on the practices that manifest due to CRM implementations. Thus, only a few studies have investigated the effectiveness of CRM from a customer point of view. Numerous factors affecting customer switching behaviour have also been discussed in the hotel literature. Variety-seeking behaviour is identified as a key factor influencing customer loyalty and switching in numerous other services in the tourism domain. However, variety-seeking behaviour in the hotel domain has not received scholarly attention.

This study investigated the customer relationship management practices experienced by leisure travellers in their hotel visits. Based on the observations from the literature, and also from studies on variety-seeking behaviour in other contexts, this study explored whether leisure travellers seek variety in the hotel context. Combining the two domains, it then investigated the impact of variety-seeking behaviour on the effectiveness of customer relationship management to generate its outcomes. In turn, it also determined the impact of customer relationship management on influencing the variety-seeking behaviour of leisure travellers.

This study adopted a sequential mixed method design. The initial qualitative stage explored the concepts in-depth, and addressed four exploratory research questions. It also generated items to initiate the subsequent quantitative phase, and to generate hypotheses. The quantitative phase involved pilot testing, validating a new measurement scale, testing the hypotheses and making generalisations to a larger population.

The qualitative phase involved five focus groups which consisted of 22 participants in total. The quantitative stage involved a survey which consisted of 400 responses. Prior to the survey a pilot test was conducted with a sample of 100 respondents. The samples for both qualitative and quantitative stages were selected based on the criterion ‘leisure travellers who have been to the same international destination two or more times’ This criterion was important in identifying hotel selection patterns which in turn provides grounds to understand variety-seeking behaviour of leisure travellers.

The qualitative findings identified numerous customer relationship management practices experienced by leisure travellers. They were categorised as: pre-encounter, encounter and post-encounter practices. It was also found that while some seek familiarity many leisure travellers do seek variety in the hotel context. The data revealed that leisure travellers can be categorised into three groups based on their degree of variety-seeking behaviour, those who visit: 1) the same location and the same hotel 2) the same location and different hotels, and 3) different locations and different hotels. They were named the familiarity/familiarity seeking group (FF), the familiarity/variety seeking group (FV), and the variety/variety seeking group (VV) respectively.

The quantitative stage commenced with validating a new measurement scale. The findings indicated that even though customer relationship management leads to word-of-mouth recommendation, it does not lead to repeat visitation. Through multi-group moderation analysis it was further identified that the outcomes of customer relationship management do not vary based on the degree of variety-seeking behaviour of travellers. The relationship between CRM and VSB was found to be two fold—while on the one hand customer relationship management leading to repeat visitation is fully mediated by the intrinsic factors affecting variety-seeking behaviour, on the other hand customer-relationship management does have a significant influence on variety-seeking behaviour.

This study contributes to the body of knowledge on customer relationship management and variety-seeking behaviour. The theoretical contribution includes the identification of the impact of customer relationship practices on generating repeat visitation and word-of-mouth and the extension of the theory of VSB to the hotel context. This study pointed to some effective segmentation dimensions and methods to improve targeted communication that can be used by hotel practitioners. The mixed method approach enhanced the methodological rigor used in realising the above contributions.

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