HPT30303

PRODUCT INNOVATION

SEMESTER SEPTEMBER
SESI 2019/2020
GROUP ASSIGNMENT
“THE STUDY OF CUSTOMER TOWARDS INNOVATION
OF TECHNOLOGY IN HOTEL INDUSTRY”

LECTURE’S NAME: PUAN FADHILAHANIM ARYANI BINTI

ABDULLAH
GROUP: L1T3

GROUP MEMBERS MATRIC NO.

ZAINAB BINTI KADIR H18B0811
NUR IDAYU BINTI IZHAB H18B0803
AMIR NADZMI BIN MD NAWI H18B0813
CHE AMIERUL AZMI BIN CHE AZMI H18B0812
SA’ADATUL ADZMINA BINTI ABDUL HADI H18B0808
 Table Of Content

No Content Pages

1 Introduction 1

2 Background and Rationale 2-4

3 Research Questions and Methodology 4-6

4 Recommendation 7

5 Final Thoughts 7

6 References 8-9
I. Introduction

A book written by Jon Sundbo (1998) stated by cf. Schumpeter 1934 pointed out that
innovation as an introduction of new elements or a new combination from old elements in any
industrial organization. A study conducted by Zollschan and Hirsch, 1964 stated that the
innovation concept has been used of social, non-industrial activities for example a new type of
association on organization and it will involve social change.

We are living in the era of the 4.0 technology revolution with a wide variety of technology
applications in various industries, such as hospitality, tourism, transportation, banking,
healthcare and retail (Ostrowski, 2010). The hotel industry is not an exception. Transaction
driven by self-service technologies in hotels are becoming more common. In the hotel industry,
self-service technologies allow customers to engage in the creation and delivery of services
without the direct involvement of hotel staff. In other words, self-service technologies are
changing the business processes of the hotel industry (Lui and picolli, 2010)

Satisfaction is a person’s feeling of pleasure or disappointed resulting from comparing a

product’s perceived performance in relation to his or her expectation (Kotler, 1997). A study
that has been conducted by Morgan et al., 1996; Mc Quitty et al., 2000 describe that consumer
satisfaction has been considered one of the most important thing to construct. It is clearly stated
that customers’ satisfaction play a big role on every matter to achieve any organizational goals.
As Reichheld and Markey (2000) pointed out that customer who said they are satisfied, or very
satisfied showed that 60% and 80% will defect in most business.

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II. Background and Rationale

a. What is the conceptual framework in which your study is conducted?

From reviewing relevant literature, the research framework can be created as follows:

Innovation of technology in
hotel industry.
a) Process innovation.
b) New Technology.

Customer Satisfaction Customer Loyalty Customer Experience

a) The number of repeat
customers.
b) Emotions realized after
using service.
a) Customer’s repetitious
purchase behaviour.
b) Customer satisfaction
improve customer loyalty.
a) Critical roles played by
positive customer
experiences.
b) Service quality.

b. What propositions have you developed as a result of this framework, which you propose to
examine conceptually?

Dependent Variable: Innovation of technology in hotel industry

The usage of product innovation is assumed to be a vital strategic tool to attract and build
customer loyalty in hotel industry. Hotel customer patronage and loyalty choices may be
influenced by hotel innovation (Victorino & Verma, 2005). Hotel product innovation
dimensions and examines the extent to which each hotel innovation may be used to attract and
build customer loyalty (Shoemaker & Lewis, 1999). In moderation, innovation is widely
recognized to enhance the competitiveness of products, businesses and destinations (Hall and
Williams, 2008; Hall, 2009). This is especially true for traditional tourism purposes. This is
especially the case of traditional tourist destinations. Innovation occurs when products /
services, processes, marketing methods and organizational measures used in the operation of
the organization.

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Independent Variable: 1) Customer Satisfaction
According to English business dictionary customer satisfaction is the degree of satisfaction
provided by the goods or services of a company as measured by the number of repeat
customers. Although customer satisfaction is a new thing, researchers defined customer
satisfaction under different angles and different time. Lin, Chen and Chiu say it means
something that happens from one's perception. Where everyone is satisfied or pleased by
comparing the performance of the product that is relevant to the expectation of the person.
Satisfaction Tanford, Montgomery and Nelson refer to consumer emotions can be realized after
using the service. Hospitality employees engage in frequent interactions with customers
(Sathish and Venkatesakumar (2011). Therefore, in a key position to ensure customer
satisfaction (Tsai, 2013) and prompt repeat business and customer loyalty (Van Doorn et al,
2010).

Independent Variable: 2) Customer Loyalty

Oliver (1997) as cited in Sondoh et al. (2007:89) argued that loyal customers hold deeper
commitments to rebuy or repertories a preferred product consistently in the future, despite
situational influences and marketing efforts that have the potential to cause switching
behaviour. A management approach focused on customer satisfaction can improve customer
loyalty, thus increasing the positive image of the touristic destination. Hence, exploring the
importance for customers of hotel attributes in hotel selection is indispensable. That loyalty is
assumed to be associated with customer’s repetitious purchase behaviour as an indicator of
loyalty for product, brand or service (Bowen & Chen, 2001).

Independent Variable: 3) Customer Experience

Customer experience is an elusive and indistinct notion. The critical roles played by positive
customer experiences. It’s a difficult construct to define, let alone measure, because of its
multiple elements and individualized, personal nature. This is because each consumer is
unique. Each person brings a different background, values, attitudes, and beliefs to the
situation; everyone experiences it through individualized “rose-colored glasses”. (Bonnie J.
Knutson). Johnson et al. (2009) examine the management of service quality and emotions
across customer relationships. They find that it is important to balance service quality and price
to enhance joyful experiences. In the hospitality industry, customers interact with a service
provider over longer periods than in many other service sectors. Hotel customers often stay for
more than one night, and during the course of that stay, they may have multiple interactions

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with hotel employees. Relationship studies suggest that customer–employee relationships are
key influences.

c. If appropriate, describe yourself and indicate any biases or factors influencing your
perspectives.

An insight into the innovation activities of hotels are found in studies focused on measuring
innovation at the destination level. Such studies have shown that hotels are the most innovative
segment of the tourism offer (Jacob et al, 2003; Sundbo et al, 2007; Pikkematt and Weiermar,
2007; Pikkemaat, 2008) most often introduce technological innovations (Orfila-Sintes et al,
2005) and that innovations have positive effect on hotel image, profitability and customer
satisfaction (Jacob et al, 2003). On the other hand, a more detailed findings are found in studies
focusing on innovations in the hotel sector. Innovative technology in the hotel industry and
shows the possible relationship between innovation management and the hotel industry, special
attention is given to exploring the appropriate theoretical background.

III. Research question(s) and methodology

a) What hypothesis have you developed to be tested via literature research and critical thinking?

The background to the study problem presents what has been established by other researchers
and the perceived lack of clarity regarding innovation of technology in hotel industry.
Therefore, in order to obtain specific information required to achieve the research purpose
(Aaker, Kumar & Day, 2003:50), the key research questions pertaining to the study are as
follows:

H1 - There is relationship between the customer satisfaction and the innovation of technology
in hotel industry.

H2 - There is relationship between the customer loyalty and the innovation of technology in
hotel industry.

H3 – There is relationship between the customer experience and the innovation of technology
in hotel industry.

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 Customer Satisfaction

Innovation of
H2
Customer Loyalty technology in Hotel
Industry

Customer Experience

b) What methodology will you use to conduct this research and analysis?

Explanatory research
Explanatory research was conducted to examine the study of customer towards innovation of
technology in hotel industry. Exploratory research largely relies on quantitative methodologies
(Creswell, 2009), but the explanatory approach used in this study enabled a survey to be
undertaken, using a research instrument with both closed ended and open-ended questions
(Jennings, 2001:166). The questionnaire consists of two parts; part one consists of pre coded
questions regarding the demographic information like age, gender, income, nature of visit etc.
of the respondents. It was followed by another part that is customer experience, customer
satisfaction, and customer loyalty. Customer experience scale contains of 16 items related to
four dimensions viz., aesthetics experience (4 statements), entertainment experience (4
statements), education experience (4 statements), escapism experience (4 statements) based on
scale of previous researchers (Hosany & Witham, 2010). Four items from customer satisfaction
(Ali & Amin, 2014) and four items from customer loyalty (Gabarino & Johnson, 1999) were
used for this study. All the three constructs has been measured on 7-point Likert-type scale
by 1= strongly disagree and 7= strongly agree to express the degree of agreement. Thus,
the study used a quantitative approach. Systematic random sampling was used to assemble a
group of 242 respondents who completed a structured questionnaire of seven-point Likert scale
questions (Likert, 1932) and a few open-ended questions. The open-ended questions were
designed to obtain guest opinions and draw inferences in understanding responses from the
closed-ended questions.

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Research design
The essential prerequisite of survey design is to know what kind of information is required
(Finn, Elliott-White & Walton, 2000). This study had to answer specific research questions. To
guide the design, the research topic was thoroughly conceptualised and the existing literature
consulted. The research questions had already established boundaries to delimit the field of
investigation. The survey instrument was designed for collecting the empirical data needed to
understand the study of customer towards innovation of technology in hotel industry. The
respondents were approached to participate voluntarily in the questionnaire survey. The
questionnaire comprised a combination of mainly closed-ended and a few open-ended
questions.

The sampling technique

Sampling technique refers to the process by which researchers select a representative subset or
part of the total population that can be studied for the topic so that conclusions may be drawn
regarding the entire population (Altinay & Paraskevas, 2008:87). As reported in other
quantitative researches, sampling enables a smaller number of study elements (guests in this
study) to be studied. This makes the research more manageable, time efficient, less costly, and
potentially more accurate. The study was initially designed to collect data using an online
questionnaire which was forwarded from a specific hotel’s customer relationship management
database, but could not get the required response rate. The researcher therefore changed the
data collection technique to random systematic sampling by means of direct or personal
administration of the same questionnaire to guests staying at hotels.

c) If appropriate, include a figure (see right) portraying your process.

Explanatory The sampling

Research Design
research technique

Questionnaire

Figure 1: Quantitative Method

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IV. Recommendation

As we grew older, times are getting more advance. Technology becomes more powerful times
to times with variety of creation, usage, and more. This section contributes to the researched
work, by discussing in detail the conformity of the research finding with respect to existing
literature. Innovation of technology, hospitality industry and customer satisfaction are related
on each other. As our recommendation, innovation in term of technology in hotel industry is to
create a safety at car parking lot which can be known as car park barrier for security system.
This kind of security is using an easy technology system so that it can be easier to the customers
at the same time to make customers feel safer to park their car. This parking system can be only
accessed by using hotel’s room card; this card can be known as a key which can access to light
up the electricity system. On the other hands, closed-circuit television need to be put at every
entrance and exit way so that any cases that we do not want to happen happened. By having
this security system it is not only can secure customer’s safety but also can build a customer’s
trust to any organization which apply this security system. As the system has been applied,
hotel management no need to hire more manpower to patrol car park area. Aside from that,
hotel also can reduce or cut the cost of paying the manpower. By having this system at any
hotel or organization we can sure that all the customer will be more satisfy and also trust
between customer and the hotel can be built.

V. Final Thoughts
These three key words innovation, technology and customer satisfaction are related on each
other. Without having a customer satisfaction in any organization, the organization has failed
as they did not achieve their customer expectation on getting a good and a pleasure services.
This has been proven by a study that has been conducted by Kotler 1997 stated that satisfaction
can be defined as someone’s feeling whether it is a pleasure or disappointed resulting from
comparing product’s perceived performance in relation to his or her expectation. On the other
hands, innovation plays a big roll on any organization on their organizational goal to achieve
more profit. Innovation is a good thing to improve the organization itself and it is depends on
someone’s idea and how she or he conduct or run the company.

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VI. References

Long. P, Pham T. H. N. & Le V. H. (2018) Technology readiness and customer satisfaction in

luxury hotels.

Darlington. O & Nicholas. N. (2017) The influence of hotel product innovation on customer
loyalty in Cape Town.

Pechlaner, H. and Volgger, M. (2012) How to promote cooperation in the hospitality industry:
generating practitioner-relevant.

Feven A. T., Ibiwani Alisa Hussain & Noraini Ahmad (2016) Service Quality and Hotel’s
Customer Satisfaction: An Empirical Evidence from Ethiopia.

Peace Igwe, MSc, & Sylva Ezema Kalu, DBA. (2017) Service Innovativeness and Customer
Satisfaction of Four Star Hotels in Rivers State.

Samaan AL-Msallam (2015) Customer Satisfaction and Brand Loyalty in the Hotel Industry

Naveed, Tahir & Akhtar, Irum, Cheem & Khaliq Ur Rehman (2012) The Impact of Innovation
on Customer Satisfaction and Brand loyalty.

Gomezelj. O, D. (2016) A systematic review of research on innovation in hospitality and

tourism.

Supak. O. (2019) The impact of innovation on brand loyalty through customer satisfaction of
hotel business in Nakhon Phanom province.

(Jay. K., Tingting (Christina) Z. & Elina. J (2017) Customer experience management in
hospitality.

Hanny N. Nasution & Felix T. Mavondo (2008) Customer value in the hotel industry: What
managers believe they deliver and what customer experience.

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Sundbo, J. (2003). The theory of innovation: Entrepreneurs, technology and strategy.
Cheltenham: Edward Elgar.

Al-Shami, S., Al-Hammadi, A. H., Hammadi, A. A., Rashid, N., Al-Lamy, H., & Eissa, D.
(2019). Online social networking websites in innovation capability and hotels’performance in
Malaysia. Journal of Hospitality and Tourism Technology, Ahead-ofprint (Ahead-of-print).
doi:10.1108/jhtt-10-2018-0107

Njoroge, M., Anderson, W., & Mbura, O. (2019). Innovation strategy and economic
sustainability in the hospitality industry. The Bottom Line, 32(4), 253-268. doi:10.1108/bl-03-
2019-0080