Business Research Methodology (BRM 681) FACTORS INFLUENCING CONSUMER RETENTION TOWARD ROOM SERVICE: A STUDY OF PRIMULA BEACH
RESORT, KUALA TERENGGANU
In managing the business which provides pure services to the customer, company need to ensure that the service delivered is meeting with expectation and satisfied the customer. The quality of services is considered to be a critical success factor for the service companies. Service is close conceptual as well as empirical link to customer satisfaction turned it into the core marketing instrument, making it the most researched area in services marketing (Fisk et al., 1995; Bolton et al., 2000). In addition, the accumulated research has linked positively the service with profitability (Fornell, 1992). It is very important to retain the customer. But, nowadays, the service provider needs to identify other factors that lead to customer retention rather than provide a quality service. On this study, researcher has chosen Primula Beach Resort as a base company to do research on factors that influencing customer retention, and downsize the study into room services. According to the current situation, there are some factors recognized which have influence to the customer retention. There are customer satisfaction, customer trust, and product value. Currently, Primula Beach on their way for maintaining and retaining their present and existing customer. For information, overall income of Primula Beach Resort comes from the government and private function, while the rest from other customer. The problem or issue was come out after much consideration regarding the current situation face by Primula Beach Resort. As we know, the external factors such as economic condition of our country give an impact to hotel industry. In addition, there are some other factors such as instability political situation, many competitors, and so on. As companies that provide service as main output to bring profitability, customer retention is very important.
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Business Research Methodology (BRM 681)
Primula Beach Resort plan offering comfortable yet elegant accommodation and quality service, this fully equipped and also provides state of the art business and convention facilities. So that, they can build a stronger and meaningful relationship with their current and target customers. The sole purpose of a business Peter Drucker once famously claimed was ³to create a customer´. However, keeping the customer has become regarded as equally, if not more important since Dawkins and Reinchheld (1990) reported that 5 per cent increase in customer retention generated an increase in customer net value of between 25 per cent and 95 per cent across a wide range of business environment. It is so important to keeping the customer other than getting the customer. Since there are many competitors around this area, Primula Beach Resort really need to concern on how to retain their customer in order to avoid switching from them to other hotel service provider.
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Primula Beach Resort is the hotel which offers the highest room rate than other hotel in Kuala Terengganu. they really need to know the factors and on how to retain their existing customers in order to avoid the customer switching to other hotel. This topic has been chosen because there are many other competitors around the area in Kuala Terengganu. Seri Malaysia Hotel and so on. researcher has chosen retention as main concern.Business Research Methodology (BRM 681)
1. Customer retention is where they provide commitment to continue to do business or exchange with a particular
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. Primula Beach Resort has faced a problem to dealing with current situation. Furthermore. focuses on the searching and identifying the potential factors that influencing consumer retention toward room in this hotel. Furthermore. it was quite difficult for them to achieve maximum profitability. Beside that. This study is done to Primula Beach Resort. Instability of economic and political situation has given a huge impact to this hotel. On this study. it¶s also could be a useful information for the management team to get some view about their customers and take some action in order to manage their customer feeling and indirectly can reduce the problem such as customer complaints. and at the same time try to find any possible solution that could be used to solve it. it is very important for the company to keeping the customers other than getting them. which struggling to compete with each other into same target market. this result of research can be useful information to the hotel itself and the management team to help them in improving on how they retain their existing customer. The main issue here is to find which factors is most contributed to this problem. For that. As mention earlier. As noted before. Grand Continental Kuala Terengganu Hotel. Midtown Hotel.1 BACKGROUND OF STUDY
The title of the study is ³Factors Influencing Consumer Retention toward Room Service: A Study of Primula Beach Resort Terengganu´. Added with a rapid growing of competitor around Kuala Terengganu area. It included competitors such as Felda Hotel.
and higher productivity (Reichheld. reduction of costs related to product/service failures. Trust should also have a direct effect on consumer resistance to switch to another service provider when a critical incident occurs. customer satisfaction also creates very strong switching barriers.Business Research Methodology (BRM 681)
company on an ongoing basis. less price sensitive. Researcher has chose customer trust as second variable. lower price sensitivity. increased satisfaction among personnel and greater stability of the workforce. Customers would probably be reluctant to commit to a service relationship (retention) unless they have confidence in the service provider¶s ability to constantly meet their expectations in the future (reliability) and in its willingness to avoid any behavior that could be detrimental to them. vice versa. Trust implies uncertainty and vulnerability. and. 1998). The company knows their customer and what they want. higher market share. 1989). Researcher will evaluate the degree of satisfaction of customer experience after stay at room in Primula Beach Resort Terengganu. 1995). lower transaction costs. and create positive word of mouth communication (Desai and Mahajan. which considered one of the most important competitive factors for the future and one of the best indicators of a firm¶s future profits. thus lead to customer retention. customer satisfaction. Retaining existing customer also costs less than acquire new ones. Furthermore. reduction of customer turnover. Old customers also pay less attention to competing brand and advertising. reduction of marketing costs and. higher efficiency. is critical when services
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. and the initial costs of attracting the customers have already been expanded (Davidow and Uttal. better service. which is based from literature review from former researchers. positive word of mouth. Some consequences of customer satisfaction are: improvement of the firm¶s reputation and image. lastly. to support the retention. In addition. and lower cost. Customer retention also brings benefit such as retention and satisfaction. researcher has identified three variables that have influence on customer retention toward room services in Primula Beach Resort Terengganu. increased attention to customer needs in TQM planning. and as such. First.
to see whether has significant influence with retention. increase the room rate sales volume. and so on provide by Primula Beach Resort Terengganu. as well as his/her affective reactions toward it. These meanings affect consumers. consumers do not simply purchase and consume products at face value. financial issues. Moreover. and to be a leader in hotel industry in Kuala Terengganu. Researcher then measures those three variables (customer satisfaction.Business Research Methodology (BRM 681)
are intangible. products mean very little in and of themselves. and a sense of identity. In pinpointing product meanings. staff. A product¶s (or brand¶s) meaning is the consumer¶s perception or interpretation of it. When the study is complete. complex and technical for instant the products. marketers are challenged by the multitude of meanings that each product can represent. apart from the meanings described to them by consumers. That is. shared or personal or evoke a high or low emotional response. The meanings of valued possessions also are derived from enjoyment. perceptions of value and purchase behaviors. they experience them. and product value) that stated above. and objects¶ appearance. customer trust.
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. interpersonal ties. Meanings may be objective or symbolic. this valuable information can be use by the hotel for them to improve their service. Third variable used is the product value. difficult to evaluate.
Marketing Research. An Applied Orientation. When the study is complete. speed of delivery. The types of complaints that usually arise regarding room services is the cleanliness of the room.2 PURPOSE OF THE STUDY
The purpose of this study is to determine the possible factors that influencing customer retention toward room service in Primula Beach Resort. the word ³problem statement´ is define as a broad statement of the general marketing research problem and identification of its specific component. customer trust and product value towards customer retention. Research is done to investigate the problems that arise in Primula Beach Resort regarding how the hotel retains their customer. precise and succinct statement of the questions or issues that is to be investigated with the goal of finding an answer or solution.
According to textbook by Naresh K. increase the room rate sales volume. Retaining customer will reduce the customer complaints at the same time.
1. Even though Primula Beach Resort is the famous hotel in Kuala
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.Business Research Methodology (BRM 681) 1.3 PROBLEM STATEMENT
-To identify the possible factors that influencing customer retention toward room service in Primula Beach Resort. The independent variables that have been included in this study are customer satisfaction. This study also will determine the relationship between customer satisfactions. staff attitude toward customers. not enough facilities. Kuala Terengganu. customer trust and product value. problem statement means a clear. this valuable information can be use by the hotel for them to improve their service. page 35. and to be a leader in hotel industry in Kuala Terengganu. and so on. According to Sekaran (2003). Malhotra.
the problem is to determine the factors that may have possible influence of trust. customer retention management is the right method because it required little sales and advertising expenses. Furthermore. the degree of trust by the consumer. The task is increasingly difficult as consumers have greater access to information and a wide array of choices. The number of hotels in Kuala Terengganu increase year by year. 2000). One of the greatest challenges facing hotel organization today is the ever growing volume and price competition (Kandampully. and so on. The major factor that have been identify is the customer satisfaction by the customers. Those factors give impact to Primula Beach Resort and they need to find a way on how to retain their existing customer rather than getting new. 2006). In the area of technology edge. So that. There are several potential factors that can influence consumer retention toward room services in Primula Beach Resort. the current situation of our economic condition which give a big impact to the hotel industry. So in order to reduce the cost. the important issue here is more to the room. give a huge impact for the hotelling industries in Malaysia. they cannot avoid a problem in maintaining the existing customers. Price-cutting and intense promotional campaigns make the task even more complex (Edwin. and the perceive value of product to them. unstable political condition and so on. added with the services they get while stay. the current situation that arise nowadays like the increase of cost. This issue has been choosing because considering of some factor such as there are many competitors in hotel service around the area of Kuala Terengganu. Everyday managers must face the challenge of establishing and maintaining positive customer relationships. In other word the hotel will getting high profit. The major problem here is because of the other competitors. So the organizations need to retain their existing customer. As usual the main purpose of customer getting service at hotel is to spend a night with pleasure and comfortable room beside other purposes. From the above statement. low buying power. service quality staff performance on customer retention in order to continuous choosing the room services in
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.Business Research Methodology (BRM 681)
Terengganu. most organizations are seeking the right way to built and maintain long term relationship with their customers.
increased service quality by excellent service performance by staff and increased customer trust. To add more literature about factors influencing customer retention. switching barriers. Kuala Terengganu.
1. To investigate the relationship between product value and customer retention. To investigate the relationship between customer trust and customer retention.
1. Therefore can identified and improve their quality of the service that they provided To improve customers relationship between the organization and customers
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. it will help the hotel management to maintain the customer satisfaction.5 SIGNIFICANT OF THE STUDY
The importance of the study in term of practical and theoretical
Practical Significant Can measure how to retain customers toward this hotel in term of room service. customer satisfaction and customer retention toward room service in Primula Beach Resort. To give suggestions to managers on how to retain their customer.Business Research Methodology (BRM 681)
Primula Beach Resort. Meanwhile.
y y y y y
To investigate the relationship between customer satisfaction and customer retention.4 RESEARCH OBJECTIVE
The principle objective or aim of this research is to investigate the relationship between the dimensions of trust.
Business Research Methodology (BRM 681)
Provide the input of the three (3) variables which include customer satisfaction.
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. customer trust. and product value to the hotel in industry in order to have customer retention
Theoretical Significant Provide new knowledge in term of predicting of customer retention. Contribution to the existing knowledge in term of the dimension of customer retention as well as the dimension of customer delivered value.
Provide the new outcome is solving problem that has never done by other researcher before.
Customer retention is very important for the hotel in order to ensure their sustainability and growth for a long of time. the researcher will study through the journals. Many organization today having difficulty to attack new customer so the
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. Personal Communication. retention is a necessary but not sufficient component to their satisfaction. internet and newspaper. trust. commitment. and repurchase intentions. Customer retention is the mirror image of customer defection. books. We need to ensure that enable individual customer to be as satisfy as they can be. therefore. they need to be alert with the current situation and be able to respond it quickly. identification. If we are serious about helping customers succeed.0 LITERATURE REVIEW
For the preparation of literature review.
2. 2005) Retention is a strategic objective of striving to maintain long term relationship with customer. it is the hotel¶s duty to ensure that they had been able to fulfill all the customer¶s needs and wants from time to time. with the first four being emotional-cognitive retention construct. According to Chatura.Business Research Methodology (BRM 681)
2. A more elaborated definition is to define retention as the customers¶ liking.1 LITERATURE REVIEW ON CUSTOMER RETENTION
Retention can be defined as a commitment to continue to do business or exchange with a particular company on an ongoing basis. and the last two being behavioral intention (Stauss et al. January 14. 2003 the definition of customer retention is the propensity of the customer to stay with their service provider. In fact. Kahrig. willingness to recommend. 2001). magazines. article. Whenever there is crises arise. retention should be our minimal expectation for customer success that they simply return to our hotel after their first year (T. Below are some literature review chosen to help in generating the research.
and frequent contact accompanied by open dialogue. Customer retention implies a long term commitment on the part of the customer and the hotel to maintain the relationship. The strongest connections between satisfaction and retention turned out to pertain to the experiences of relationship and confidence. Our most relevant finding may be that the informant experienced and expressed the concept of satisfaction and retention using many different mental models. and differs also from management¶s understanding. The role of customer retention in a relationship strategy and it is worth emphasizing again the point that loyal customers who keep coming back are the most profitable type of customer. 1995). which could result in diminishing service quality. The question as to whether a retained customer is necessarily satisfied elicited three responses: the customer is satisfied. The development of mutual commitment is the same process as creating long term service provider-customer relationship (Wilson. Obviously these satisfied customers involve very little sales and marketing expense and thus their true profitability at the margin can be very high (Chistopher. They tend to spend more and they may even act as our ambassadors through positive word of mouth. dissatisfied customers and lower profitability. 2002). with the exception of service. Instead. 2004). 2003). or even to evaluate the goals. Complaint handling was also strongly connected to both concepts. nor is it enough
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restructure their marketing department and appoint managers to give attention to their existing customer (Rizal. the customer is not necessarily satisfied. Retention was believed to be enhanced in the same way as satisfaction. It is not enough for managers to define the concepts and establish goals for the employees. the informants experienced introduction of changes and chemistry to enhance retention. When employees perceive the concepts in different ways they value them differently. Managers should be concerned when employee understanding of key concepts differs within the organization. and it depends on how satisfaction is experienced by the customer (Hansemark C.
reflecting the degree to which the customer believes the service provider evokes positive feelings. If the product¶s performance falls short of expectation. Further. 1999. this link is fundamental to the marketing concept. 2006). Rucci et al..g. If the performance matches the expectation.Business Research Methodology (BRM 681)
for managers to guide employees on how to satisfy and retain the customers. 1995). 1993. Numerous studies in the service sector have hypothesized and empirically validated the link between satisfaction and behavioral intentions and behaviors such as customer retention and word of mouth (e.. the importance of satisfaction on retention is so well recognized that some major economies now measure satisfaction at the industry level using large sample surveys to predict customer retention and future financial performance (Fornell.. 2004) Following Cronin et al.
2. Fornell et al. 2000). If the performance falls short of expectations. They also need to evaluate and understand the employees¶ perception of the concepts. the buyer is
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. the customer is highly satisfied or delighted (Kotler. Anderson and Sullivan. 2002). which holds that satisfying customer needs and wants is the key to repeat purchase (Kotler et al. Cronin et al. the customer is satisfied. In simple term. (2000). 1992. satisfaction is a person¶s feelings of pleasure or disappointment resulting from comparing a product¶s perceived performance (or outcome) in relation to his or her expectations. If the performance exceeds expectations. satisfaction can be thought as the extent to which a product¶s perceived performance matches a buyer expectation. 1998.2 LITERATURE REVIEW ON CUSTOMER SATISFACTION
Customer satisfaction is defined as ³the individual's perception of the performance of the product or service in relation to his or her expectations´ (Schiffman and Kanuk. Indeed.. conceptualized customer satisfaction to be an evaluation of an emotion. Bansal and Taylor. In general. the customer is dissatisfied.
on the other hand.Business Research Methodology (BRM 681)
dissatisfied. exceeds expectation. also assume that retained customers are. therefore that a fundamental aim of firms is to seek to manage and increase customer satisfaction because the more satisfied customers are the greater in their retention (Aderson and Sullivan. in markets where competition was intense they found a different between the loyalty of satisfied and completely satisfied customer. it is necessary to satisfy him. Satisfaction is an extremely difficult concept to define in a few words (Johns. supports this. the higher the student satisfaction. the buyer is satisfied or
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. as satisfaction rises. Desai and Mahajan (1998). who argues that in order to retain a customer. found that where customers have choices the link between satisfaction and loyalty is linear. and not retained simply because of habit. Only one informant believed that a retained customer is necessarily satisfied. satisfied. the higher the student retention. argue that not all retained customers are satisfied. indifference or inertia. This is because by giving the superb or high quality products or services to their customers it can be considered as one of their core competencies compare than their competitors and at the same time they can retain their customers and attract new prospects. Researches conduct by Jones and Sasser Jr. Keeping customer satisfied is what leads to customer loyalty. so too does loyalty. saying they may not have achieved the kind of relationship in which they can be satisfied. Following to Chatura. Ovenden (1995). 2003. 1996). If performance matches or delighted. The connection between retention and satisfaction was experienced in many different ways. Eriksson and Löfmarck Vaghult (2000). in line with most informants¶ experience. However. it is no surprise. Satisfaction is one important element in every industry. In this case. (1995). finds a weak relationship between satisfaction and retention. Johnston (2001). whether the companies or producers offered products or services to their customers. in fact. 1993).
1999). Schneider and Bowen.. 1999). They conceptualized trust as existing when one party has confidence in a partner¶s reliability and integrity. satisfaction alone may not be adequate to ensure long-term customer commitment to a single provider.
2. 1988). which shows that firms often look beyond satisfaction to developing trust in order to ensure economically viable. Thus. et al. Recent research suggests that. interpretation of the construct in their seminal study of the commitment-trust theory of relationship marketing.3 LITERATURE REVIEW ON CUSTOMER TRUST
The researcher has conceptualized trust based on Morgan and Hunt¶s. Fornell. 2004). 1992. it may be necessary to look beyond satisfaction to other variables that strengthen retention such as trust (Hart and Johnson. in some cases. service providers may be unable to retain even those customers who are satisfied (e. (1994). (2002). satisfying customer needs and wants is the key to repeat purchase.. trust could exist at the individual level (Rotter. According to Kotler et al. 1995).. Instead. This view is consistent with research on marketing channels (e. Morgan and Hunt. when conceptualized as a dimension of service quality. the likelihood of either party ending the
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. Furthermore.g. could also be thought of as ³trust in the service itself´ (Parasuraman et al. 1967) or at the firm level (Moorman et al. Indeed. trust. 1994). 1993).g. Heskett et al. the importance of satisfaction on retention is so well recognized that some major economies now measure satisfaction at the industry level using large sample surveys to predict customer retention and future financial performance (Fornell. long-term relationships.Business Research Methodology (BRM 681)
Customer satisfaction has long been regarded as a proxy for a firm¶s success on the assumption that it is inextricably linked to customer loyalty and retention (Paul G.. Further. this recommendation is based on the premise that once trust is built into a relationship. Patterson. Further. 1985. 1994.
Following the lead of Parasuraman et al. mediates the relationship between component attitudes and future intentions. These numerous uses of the trust construct in business to customer relationships are likely to have at least partly contributed to the lack of an extensive body of literature on trusts a mediating construct in models of customer retention. (1998) suggested trust as a relational benefit. they found trust. Gwinner et al. They found that for relational customers. However.. Although the consequences of trust in business-to-business relationships have been firmly established. Gremler and Brown (1996) proposed trust as a conceptual antecedent of customer loyalty.
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. in their seminal paper on service recovery. In a study of theatre customers. indicate that service recovery (similar to complaint handling in Tax et al.Business Research Methodology (BRM 681)
relationship decreases due to high termination costs. however. Levesque and McDougall¶s (2000) recent findings. More specifically. the same cannot be said about trust in business-to-customer relationships. Garbarino and Johnson (1999) did look at trust as a driver of customer behavioral intentions. trust. (1998). 1988). studied trust in the context of consumer complaint management. they proposed trust as a confidence benefit rated highly by customers in long-term relational exchanges with service firms. many have used trust as a dimension of the service quality construct. as opposed to satisfaction. together with commitment (an indicator of future customer behavioral intentions) to be a consequence of satisfaction with complaint handling. Tax et al. (1985. Based on an analysis of both qualitative and quantitative data. 1998) could have a qualitatively different impact on trust from that on satisfaction. they segmented consumers based on their relational (purchased season tickets covering a longer period of time) and transactional orientation. Hart and Johnson (1999) offered anecdotal evidence in support of a similar argument.
as such. is that his basic motive of an exchange is satisfied by a product¶s reasonable or expected value. Ulaga and Chacour. Cronin et al. Uncles and Ehrenberg. 1994) and. Superior consumer value is the cornerstone of competitive advantage (Day and Wensley. Jaworski and Kohli.g. many authors suggested that the superior value should be considered as the most fundamental challenge for marketing strategies of organizations (e. income. and are frequently used as the basis for market segmentation (Calantone and Sawyer. 2001). 1993.g. Day. The logical and basic rule. Thus it is essential for companies to develop process and system that produce superior quality.
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. Moreover. 2000. at a competitive cost leading to customer satisfaction. A consumer¶s level of knowledge about prices in a given category may be influenced by his/her demographic background. Demographic characteristics such as age. 2000). Slater and Narver. 1978.. and gender are often presumed to influence one¶s level of product knowledge and shopping experience in certain product categories. 2001). which applies to each individual in the role of a customer. Since consumers of one particular demographic background may dominate the purchases in certain categories. Kotler. 1993. Delivering superior value to customers is considered one of the most popular concepts among business managers and academia (Ulaga and Chacour. 1997.4 LITERATURE REVIEW ON PRODUCT VALUE
According to the representative research projects higher levels of perceived value lead to higher levels in satisfaction of customers. 1990). must be the focus of knowledge acquisition. Deshpande et al. greater levels of customer loyalty and retention and to a greater success of organizations (e. it may be reasonable to expect that consumer price knowledge in a given category would vary as a function of demographics.. One reason for the keen attention placed on product quality is because of its critical relevance for delivering superior consumer value.Business Research Methodology (BRM 681)
1978). 1992). 1982). In pinpointing product meanings. Therefore. financial issues. That is. consumers do not simply purchase and consume products at face value.
RELATIONSHIP BETWEEN SATISFACTION. interpersonal ties. apart from the meanings ascribed to them by consumers. Szalay and Deese. the positive word of mouth generated through them (Reichheld and Sasser. 1991). The more satisfied customers are. 1994). Fornell. 1992). TRUST. 1991). Product value for a consumer is created when the benefits a consumer gets with a product are greater than the long-term costs a consumer is expected to have with a product (Slater and Narver. ³we cannot hope to understand consumer behavior without first gaining some understanding of the meanings that consumers attach to possessions´ (Belk. 1994) and purchase behaviors (Kleine and Kernan. products mean very little in and of themselves. 1990). 1999). Meanings may be objective or symbolic. 1980. 1990.
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. Moreover. 1988. These meanings affect consumers. AND PRODUCT VALUE TO RETENTION Customer satisfaction has traditionally been regarded as a fundamental determinant of long-term consumer behavior (Oliver. or evoke a high or low emotional response (Fournier. perceptions of value (Richins. The meanings of valued possessions also are derived from enjoyment. p. 2000) A product¶s (or brand¶s) meaning is the consumer¶s perception or interpretation of it (Kleine and Kernan. as well as his/her affective reactions toward it (Friedmann. Yi. shared or personal. 1991). and a sense of identity. 1993. Schneider and Bowen. and objects¶ appearance (Richins. 139). marketers are challenged by the multitude of meanings that each product can represent. they experience them (Holbrook and Hirschman.Business Research Methodology (BRM 681)
Product value to a consumer is a comparison of tangible and intangible benefits from the generic as well as the supplementary levels of a product and the total costs of production and usage of a product (Nilson. the greater is their retention (Anderson and Sullivan. 1986.
there has been a convergence of opinion that favorable service quality perceptions lead to improved value attributions and higher levels of sacrifices lead to reduced value (Cronin et al. When speaking about interrelations among the variables forming perceived value. greater levels of customer loyalty and retention and to a greater success of organizations (e. 1999). Cronin et al. Recent research shows that while satisfaction and trust are closely related. they are also conceptually different. satisfaction alone does not ensure continued customer patronage (Jones and Sasser. 1995). therefore. Doing so can help firms make better decisions about the relative value of investing in developing satisfaction versus trust among their customers.Business Research Methodology (BRM 681)
and the financial benefits to the firms who serve them (Fornell et al.. and also have different empirical effects on retention (Geyskens et al. it offers a cautionary note on the role of satisfaction and trusts in service failure and recovery incidents. Szymanski and Henard..g. By studying the effects of trust and satisfaction together. researcher seek to shed more light on their relative importance as well as their interaction effects on retention. 2001). and also unveils alternative means of retaining customers. The higher levels of perceived value lead to higher levels in satisfaction of customers. In particular. Further. It is no surprise. have some distinct antecedents. 2000). some argue that trust is a stronger emotion than satisfaction and that it may therefore better predict retention (e. Ulaga and Chacour. 1998. 1995). However. 2000. Hart and Johnson. 2001).
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.. that a fundamental aim of firms is to seek to manage and increase customer satisfaction.g..
and product value.1: Conceptual Framework of Factors Influencing Customer Retention toward Room ServiceTh
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. the simultaneous influence of satisfaction. The framework has it a main feature which is to examine the main effects of each of the three independent variables on retention. Kahrig (2005) .T. (1998) Garbarino & Johnson (1999) PRODUCT VALUE Cronin et al. (2001) Philip Kotler (1997)
CUSTOMER RETENTION . (2000) (Aderson and Sullivan 1993) Jones & Sasser Jr.Christopher (1993)
Figure 2. trust and product value on retention. it was found that customer retention toward room in Primula Beach Resort was influenced by customer satisfaction. Former researcher has developed a framework linking satisfaction.
These relationships and the variables are illustrated by diagram below:INDEPENDENT VARIABLE DEPENDENT VARIABLE
CUSTOMER SATISFACTION Cronin et al.Business Research Methodology (BRM 681)
2. trust and product value to customer retention. (1995) CUSTOMER TRUST Morgan & Hunt (1994) Tax et al. (2000) Ulaga and Chacour.Chatura (2003) . (2004) . customer trust. Doing so allows researcher to examine. among other things.5 CONCEPTUAL FRAMEWORK
Based on a literature review that based from the journal..Hansemark C.
Malhotra. Hypothesis 2: Customer Trust H0: There is no relationship between customer trust and customer retention.
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. be a tentative statement about relationships between two or more variables as stipulated by the theoretical framework or the analytical model (Naresh K.6 HYPOTHESES STATEMENT Hypothesis (H) is an unproven statement or proposition about a factor or phenomenon that is of interest to the researcher. H1: There is a relationship between customer satisfaction and customer retention. for example. page 53. The hypotheses are as follows:
Hypothesis 1: Customer Satisfaction H0: There is no relationship between customer satisfaction and customer retention. H1: There is a relationship between customer trust and customer retention. an Applied Orientation. HI: There is a relationship between product value and customer retention. Hypothesis 3: Product Value H0: There is no relationship between product value and customer retention.Business Research Methodology (BRM 681)
2. It may. Marketing Research.). Researcher has come out with several hypotheses regarding this research.
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. which originated by Rensis Likert. The sampling unit is accessible. The researcher used convenience sampling which is non probability sampling to get the data from the respondent. low cost. The researcher used this type of sampling because it is easy to obtain a large number of completed questionnaires quickly. Research design can be defined as framework or blueprint for obtaining the information needed to solve marketing research problem or research question. The findings and results of a conclusive research are conclusive and are used as input in decision making. This study is conclusive research where the objective is to get the conclusion from the research. It is also meant to test specific hypothesis and examine relationships between variables and to assist the decision maker in determining. It is a measurement scale with five response categories ranging from µstrongly disagree¶ to µstrongly agree¶. a researcher used 5 Likert scales. easy to measure. The type of conclusive research in the study is descriptive. which require the respondents to indicate a degree of agreement or disagreement with each of a series of statement related to the stimulus object. articles and books. and also cooperative. This research is a quantitative research where sources of information are gathered from questionnaire distributed to the customers who spend a night in room at Primula Beach Resort. evaluating. For this study.Business Research Methodology (BRM 681)
3. It specifies the detail of the procedures necessary for obtaining the information needed to structure and solve marketing research problem.0 RESEARCH DESIGN AND METHODOLOGY
3.1 INTRODUCTION ± RESEARCH DESIGN
This research attempts to analyze the relationship between the dependent and independent variables. and selecting the best course of action to take in a given situation. Most of others information and data gathered from published journals. Researcher examines whether or not the conjectured relationship can be substantiated and then bring the answers. and least time consuming of all sampling technique.
Marketing Research. The collected data will be analyzed and interpreted by using the computer software. holiday with family or friend. It may be of interest to know that attempts are sometimes made to establish cause-and-effect relationship through regression analysis. Other definition by Naresh K. which is known as Statistical Package for Social Science (SPSS). But for this study. It is used to test and answer the hypothesis constructed. The clear understanding of research problem enable researcher to identify the management problem and then start defining the objectives of the research. R-squared. the target unit is the customer that stays at the room in Primula Beach Resort.2 POPULATION
Population refers to the entire group of people. the customer in Primula Beach Resort can be divided into two separated group which consist of individual and family group and second. meeting. As mentioned earlier. 2000). normally from primary data which is available to help with this study. function. traveling. researcher will narrow the target population only to individual and family group. events. it was analyzed to find the relationship between the dependent variable and each of the independent variables. After the data was computed.0. sharing some common set of characteristics. customer retention. From the (SPSS) program. On this research. These groups come to get the room in Primula Beach Resort in various purposes such as for vacation. coefficient value-stat. government and private group. comprising the universe for the purpose of the marketing research problem. Pearson Correlation and several other important statistical tests. Version 12.
3. Malhotra. researcher will collect the data.Business Research Methodology (BRM 681)
Correlation study is adopted to delineate the important variables associated with the subject matter. This is due to some factor such as the perception
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. population refers to the aggregate of all elements. and many more purpose. the computer can provide the standard error. After defining objectives. page 328. or things of interest that the researcher wishes to investigate (Sekaran. an Applied Orientation.
The sample represents a subset of manageable size. respondents are selected because they happen to be in the right place at the right time. Often. the population is very large.
3. The selection of sampling units is left primarily to the interviewer. making a census or a complete enumeration of all the values in the population impractical or impossible. easy to measure and cooperative. Samples are collected and statistics are calculated from the samples so that one can make inferences or extrapolations from the sample to the population.Business Research Methodology (BRM 681)
of this group is different compare to other group. The sampling units are accessible. a sample is a subset of a population. The population for this research is the individual and family group of customer of Primula Beach Resort who come for many purpose. Convenience sampling is the least expensive and least time consuming of all sampling techniques. the purpose of staying. The researcher manages to get 160 respondents for the research. Convenience sampling technique is to attempts to obtain a sample of convenient elements.1 Target Population
The specific. The researcher does convenience sampling where manage to get sample from customer from government and corporate firms. a non probability sampling is chosen.3.
3. In this research. Typically.3 SAMPLING In statistics. This population comes to the hotel for
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. The researcher used convenience sampling method. complete group relevant to the research project is the best definition of target population. This process of collecting information from a sample is referred to as sampling. and their needs and wants during the stay.
3. age. Therefore. It was many potential customers who will come back to the hotel for that year. for food and beverage. defines the sampling frame as a representation of the elements of the target population. K. The hotel received 24. sample size is the actual numbers of subjects chosen as a sample to represent the population characteristics. A total of 160 questionnaires will distribute to potential respondents according to this condition. According to Sekaran (2003). (2003). Roscoe (1975) stated that sample size which is larger than 30 and less than 500 is appropriate for most research. Marketing Research. meeting. N.3 Sample Size
According to Naresh K.3. an Applied Orientation. a minimum sample size of 30 for each category is necessary. A sample is a subset of the population. It comprises some members selected from it. sampling size refers to the number of elements to be included in a study. The researcher has chose 160 customers from individual and family group that stay at room in Primula Beach Resort as the sampling frame. purpose of trip. and income level.000 until 26. where samples are to be broken into sub-samples. It consists of a list or a set of directions for identifying the target population. Researcher takes 160 respondents as a sample size. the respondents had to be the individual and family group customers of the hotel. for event or function.Business Research Methodology (BRM 681)
example to stay a night in room. For this research.
3.2 Sampling Frame
Malhotra. and race. swim at pool. Page 332.
3. marital status. gymnasium and so on.
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. 160 samples are appropriate to analyze the data in this study.000 customers per year. page 189. regardless of their gender. the researcher has selected the sampling frame that will be those customers of individual and family group that come to the Primula Beach Resort and stay at room. Malhotra.
For this research. If a negative statement toward the object were given. researcher used Likert scale to measure the attitude. ranging from ³strongly agree´ to ³strongly disagree´. and the weight of 5 is assigned to this response.K. Primary data can be defined as the data collected or produced by the researcher specifically to address the research problem. data collection method used by researcher in completing study is collected from two (2) sources that are primary data and secondary data.´ and ³strongly disagree. It was difficult to construct and more costly than secondary data.4 DATA COLLECTION METHOD
respondents indicate their own attitudes by checking how strongly they agree or disagree with carefully constructed statements about the attitudinal object. On the other hand. and most popular means for measuring attitudes.4. researcher used primary data.´ ³disagree.
3. On this study. The researchers also faced another problem such as not enough time and waste energy too. researcher has distributed a set of questionnaire to the respondent to get the primary data.´ ³agree.1 Measurement and Scales
In the research. Individuals generally choose from approximately five response alternatives: ³strongly agree. Page 40). Primary data is the data gathered and assembled specifically for the research project at hand.´ Typically. Strong agreement indicates the most favorable attitudes on the statement.´ ³neutral.Business Research Methodology (BRM 681)
3. the weights would be reversed and ³strongly disagree´ would be assigned the weight of 1. secondary data refers to the data collected for some purpose other than the problem at hand (Malhotra N. The total score is the summation of the weight assigned to an individual¶s total
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. an Applied Orientation. The Likert Scale is an extremely. Marketing Research. With the Likert scale. each scales item has five responses categories.
Items that are poor because they lack clarify or elicit mixed response patterns are eliminated from the final statement list. a large number of statements are generated and then an item analysis is performed. In the Likert procedure. Likert scales provide some advantages such as it is easy to construct and administer and respondent readily understand how to use the scale.Business Research Methodology (BRM 681)
responses. researchers. The purpose of the item analysis is to ensure that final items evoke a wide response and discriminate among those with positive and negative attitudes. This step in the questionnaire design is too often neglected by business
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Then.Business Research Methodology (BRM 681)
3. median is the central item in a group arrayed in ascending or descending while mode is the most frequently occurring phenomenon within a set of observations. Finally. Mean is the average. compute the mean. correlation and so on. the data analysis will be conducted to find out the result whether the hypotheses are significant or not. Then each one will be interpret to make it more understandable. graft and charts for easy obtain count of the number of respondent associated with values of the variables and to express in percentage term. regression test.0 software in the next step to get the result. The information based from the research would help the management of Primula Beach Resort to manage their customer very well and finally. the table. get customer retention. researcher will use Statistical Package for Social Science (SPSS) version 12. chart and graph will be developed. Then. researcher will conclude the result and make conclusion and some recommendation from the study. Further. reliability test. median and mode of the responses. Researcher will conduct a descriptive analysis which is the transformation of raw data into a form that will make them easy to understand and interpret. Tabulation is the orderly arrangement of data in a table or other summary format.5 DATA ANALYSIS AND INTERPRETATION
After get all the information through the questionnaires that distributed. Researcher used SPSS software as the tool to process the data. factor analysis. several
statistical tests were conducted for analysis such as frequency analysis. Next.
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. The data gathered through this analysis are illustrated in from of table.
Muffatto. 374-395. K. International Journal of Service Industry Management. J. 12 (9). S. 14 (1). 1272-1293. Measuring Customer Satisfaction and Employee Attitude at Forte Hotels. J. (1995).
Hansemark.Business Research Methodology (BRM 681)
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