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MARKETING PRACTICES AND CONSUMER SATISFACTION IN HOSPITALITY INDUSTRY

CHAPTER ONE

INTRODUCTION

1.1    BACKGROUND OF THE STUDY

Customer satisfaction is a business philosophy which tends to the creation of value for customers, anticipating and managing their expectations, and demonstrating ability and responsibility to satisfy their needs. Quality of service and customer satisfaction is critical factors for success of any business (Gronoos, 1990; Parasuraman et al., 1988). As Valdani (2009) points out: enterprises exist because they have a customer to serve. The key to achieve sustainable advantage lies in delivering high quality service that results in satisfied customers (Shemwell et al, 1998). Service quality and customer satisfaction are key factors in the battle to obtain competitive advantage and customer retention. Customer satisfaction is the outcome of customer’s perception of the value received in a transaction or relationship, where value equals perceived service quality, compared to the value expected from transactions or relationships with competing vendors (Blanchard & Galloway, 1994; Heskett et al., 1990; Zeithaml et al., 1990). In order to achieve customer satisfaction, it is important to recognize and to anticipate customers' needs and to be able to satisfy them. Enterprises which are able to rapidly understand and satisfy customers' needs, make greater profits than those which fail to understand and satisfy them (Barsky & Nash, 2003). Since the cost of attracting new customers is higher than the cost of retaining the existing ones, in order to be successful managers must concentrate on retaining existing customers implementing effective policies of customer satisfaction and loyalty. This is especially true in the hotel industry.

Nowadays one of the biggest challenges for managers in the hotel industry is to provide and sustain customer satisfaction. Customer requirements for quality products and service in the tourism industry has become increasingly evident to professionals (Lam & Zhang, 1999; Yen & Su, 2004). Guest relationships are a strategic asset of the organization (Gruen et al., 2000) and customer satisfaction is the starting point to define business objectives. In this context, positive relationships can create customer’s higher commitment and increase their return rate. Long-term and reciprocally advantageous relationships between customers and the hotel is becoming progressively important because of the highly positive correlation between guests' overall satisfaction levels and the probability of their return to the same hotel (Choi & Chu, 2001). Hotels are increasing their investments to improve service quality and the perceived value for guests so as to achieve better customer satisfaction and loyalty, thus resulting in better relationships with each customer (Jones et al., 2007). Relationship quality has a remarkable positive effect on hotel guests’ behavior: it creates positive word of mouth (WOM) and increments repeated guest rates (Kim et al., 2001).

1.2    STATEMENT OF THE PROBLEM

Despite the relatively harsh business environment that businesses are run in Nigeria, the Divine Fountain Hotels Limited has a sustained growth and proven track record of providing superior hospitality services to its customer. It is rather worrisome that there is no existing research report that has evaluated the extent at which the service delivery at this hotel has influenced customers’ satisfaction since it was established.  The need to do this constitutes the focus of this study and the findings of this research work would be useful to all stakeholders in the hospitality and tourism industry. This  gave  rise  to  the  purpose  of  this  research  work which is to examine marketing practices and consumer satisfaction in hospitality industry.

1.3    OBJECTIVES OF THE STUDY

1.      To determine the benefits of marketing practices on consumer satisfaction in hospitality industry.

2.      To determine the challenges facing Idems Ultimate Hotel in    implementing marketing strategies on consumer satisfaction.

3.     To know whether Idems Ultimate Hotel adopt any e-marketing strategies on consumer satisfaction.

4.      To make useful recommendations based research findings.

1.4    RESEARCH QUESTIONS

          The following research questions were stated to guide this study”

1.      What are the benefits of marketing practices on consumer satisfaction in hospitality industry?

2.      Are there challenges facing Idems Ultimate Hotel in implementing marketing strategies on consumer satisfaction?

3.      Does Idems Ultimate Hotel adopt any e-marketing strategies   on consumer satisfaction?

1.5    SIGNIFICANCE OF THE STUDY

          The significance of this study can be seen in the fact that the outcome can be applied in the development of national policy framework as a guide for e-marketing (i.e. e-business) adoption. The study will improve our understanding of the following issues as they apply in the Nigerian situation.

Ø    It shows the relevance of marketing practices and consumer satisfaction in hospitality in Nigeria.

Ø    It reveals the benefits derived from adopting marketing strategies.

Ø    It addresses the challenges that prevent firms from taking advantage of marketing strategies.

Ø    It provides the basis of future research into the adoption of e-business and consumer satisfaction in Nigeria economy.

1.6    SCOPE OF THE STUDY

          The study concerns about marketing practices and consumer satisfaction in hospitality industry using Idems Ultimate Hotel, Uyo. The study will focus on the concept of e-marketing, hotel industry e-marketing as well as benefits of e-marketing and services to customer services.

1.7    LIMITATION OF THE STUDY

a)      Financial constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

b)      Time constraint: The researcher will simultaneously engage in  this study with other academic work. This consequently will cut     down on the time devoted for the research work.