Customer Satisfaction and Loyalty in 4-Star Hotels in Geneva

recognized problem for the hospitality industry is to find a way to keep their loyal customers and earn new once. A lot of hotels create questionnaires to find out if their customers are satisfied during their stay. If the questionnaire score shows a result which is better than good, they will think that the customers are loyal to them and will always return back. Since all hotels are competing for customers, the industry needs to be aware of the competitors, since customers will shop around and stay at the hotel that gives them the best value. It is important to remember that service is something we cannot touch which means intangible. When giving service to a guest there are many ways and every individual does it differently. So service cannot be completely standardized in the same way as manufactured goods. The service delivered will vary on the service provider and the consumer of the service depending on their mood and the situation. Having loyal customers will give profitability in the long run. To always search for new clients is expensive, time consuming and takes a lot of effort (Mittal and Lasser, 1998). According to Mittal and Lasser (1998) “the longer a business firm can keep a customer, the greater the life-time revenue from that customer. Furthermore, while revenues increase from the same customer, the costs of serving him/her decline. Thus, customer retention becomes an important source of long-term business success” (p. 177-178).

2.2 Customers satisfaction:

2.2.1 Definition of customer satisfaction:

Yuksel and Rimmington (1998) “defines customer satisfaction as a post-consumption evaluative judgment concerning a product or service” (p.61). Satisfaction is a need, want and expectation formed by the customer that will be meet when product and service excided their expectations (Choi and Chu, 2000). During a hotel stay the guest has usually already formed an expectation and would match it with what they actually receive from the actual product and service performance. When a customer forms an expectation it is usually based on an earlier incident which will be compared to the existing experience in the service industry (Yuksel and Rimmington, 1998). When measuring customer’s satisfaction it is the effort accomplished by the hotel to improve the service quality which will give the property a competitive advantage. Furthermore the customer will give a positive word of mouth and the hotel will gain loyal customers. What may influence the customer’s satisfaction could be the availability of the diverse services, this means that the service industries need to stay ahead and not fall behind their competitors (Choi and Chu, 2000). “Failure to pay attention to influential attributes in choice intention may result in a customer’s negative evaluation, and may lead unfavourable word-of-mouth” (Choi and Chu, 2000, p. 118).

2.2.2 History of customer satisfaction:

The work of Yuksel and Rimmington (1998) entitled: “Customer-Satisfaction Measurement: Performance Goals” published in the Cornell Hotel and Restaurant Administration Quarterly relates that making a determination of customer satisfaction is fundamental to effective delivery of services.” The ability to judge the satisfaction levels of customer and to use that knowledge in an applicable manner provides the hospitality manager with an advantage “…over competitors via such benefits as product differentiation, increased customer retention, and positive word-of-mouth communication.” (Yuksel and Rimmington, 1998) Because of the importance of customer satisfaction a great dearth of research has been devoted to the investigation of the process by which “customers form judgments about a service experience.” (Yuksel and Rimmington, 1998) Because of this great volume of research much has been learned in relation to customer satisfaction within the services industries. Yuksel and Rimmington hold that in the attempt “to provide a theoretical explanation of the concept, academics have largely focused on conceptual issues and underlying processes, giving less attention to the more pragmatic tasks of measurement.” (1998) These authors report a study that examines “the relative validity of six alternative ways of assessing customer satisfaction.” (1998) Yuksel and Rimmington state that customer satisfaction “can be defined as a post-consumption evaluative judgment concerning a product or a service.” (1998) Yuksel and Rimmington relate that researchers have posited two methods considered basic in the investigation of “confirmation and disconfirmation paradigm and its variants. Expectancy disconfirmation, which is a derivative of adaptation-level theory, states that customers compare actual product and service performance with their prior expectations. If expectations are met or exceeded, the consumer is satisfied. If perceived performance falls short of expectations, on the other hand, dissatisfaction results.” (1998) Researchers have further proposed two methods for studying these which are the inferred approach and the direct method. Computation of the discrepancy between expectations of performance and evaluation of outcomes is the inferred approach which makes it a requirement of researchers to “deduce separate data sets relating to customer-service expectations and perceived performance. The scores for performance are then subtracted from those of expectations to form the third variable, the confirmation- disconfirmation score, which is used in subsequent analysis.” (1998)

2.2.3 Principles of customer satisfaction

Cultural difference

The work of Choi and Chu entitled: “Levels of Satisfaction Among Asian and Western Travelers” relate a study for the purpose of making an examination of “the genuine needs of Asian and Western travelers by identifying their perceptions and levels of satisfaction with the services and facilities (attributes) provided by domestic hotels in Hong Kong.” (2000) Due to the differences in culture between Asian and Western travelers “an understanding of exactly what differences exist between Asian and Western travelers, in terms of their perceptions of Hong Kong’s hotels services and facilities is tactically important for hotel operators. Specifically the study aimed to address the objectives of: (1) the development of the underlying dimensions of hotel attributes and; (2) the examination of the relative impact of the derived hotel factors in influencing the satisfaction levels of both Asian and Western travelers.” (2000) Studies of consumer behavior have emphasized that “…customer satisfaction is a major issue in the post-purchase period.” (2000) Choi and Chu relate that while customer satisfaction was defined by Oliver (1981) as “a customer’s emotional response to the use of a product or service….However, it is more likely that customer satisfaction is a complex human process that involves cognitive and affective processes, as well as other psychological and physiological influences.” (2000) Choi and Chu relate the work of Wuest et al. (1996) who are stated to have “defined perceptions of hotel attributes as the degree to which travelers find various services and faculties important in promoting their satisfaction with hotel stays. Review of the literature suggests that most travelers would consider the following hotel attributes when making a hotel choice decision: (1) cleanliness; (2) location; (3) room rate; (4) security; (5) service quality; and (6) the reputation of the hotel or chain.” (Choi and Chu, 2000) Choi and Chu relate that very little research initiatives “have taken a cultural perspective in relation to traveler’s perceptions about hotel attributes.” (2000) However, the work of Hoon (1992) noted the existence of a cross-cultural “difference in terms of expectations of hotel facilities and services.” (Choi and Chu, 2000) Hoon (2002) relate that approximately 70% of those who travel to Asia were from the Asian region itself. Travelers in the Asia Pacific region “are now more content with mid-range, moderately priced hotels rather than the exclusivity of five-star hotel accommodation.” (Choi and Chu, 2000) the work of Bauer et al. (1993) made an examination of the “differences between Asian and non-Asian travelers in relation to their demand for a wide range of hotel facilities. They found that major differences between Asian and non-Asian travelers were that Asian travelers appeared to want more entertainment facilities, for example karaoke, while their non-Asian counterparts appeared to be more concerned with the hotel’s health facilities.” (Choi and Chu, 2000) Choi and Chu (2000) report a self-administered questionnaire in Chinese, English and Japanese which had been developed on studies that were relevant. In this study the respondents rated the hotels where they had stayed on 33 hotel attributes and on a seven-point Likert Scale ranging from 1 (strongly disagree) to 7 (strongly agree). They respondents could also answer “do not know” if they had no familiarity with the services or facilities of the hotel in which they had stayed. The sample in this study included international travelers who had departed from the Hong Kong International Airport between August 13 and August 23. For the purpose of this study the Asian travelers were travelers that had come from China, Taiwan, Japan, South Korea, or South-East Asia and Western travelers were those that had come from North America, Europe, Australia and New Zealand. Of the 540 travelers invited to participate in this study 402 of the questionnaire were complete and thus able to be used in this study. Of the 402 respondents 222 or 55.2% were Asia and 180 or 45.8% were Western. Most of the respondents had stayed at medium-tariff or high-tariff hotels. 21.6% of respondents were professionals, 21.4% of respondents were in management or administrative positions, 13.2 of the respondents were self-employed and 11.2% of respondent were white-collar workers with 1.2% of respondents being blue-collar workers. The following chart shows the factor analysis results with VARIMAX rotation of traveler’s perceptions of hotel attributes in the study of Choi and Chu (2000).

Factor Analysis Results with VARIMAX Rotation of Traveler’s Perceptions of Hotel Attributes

Source: Choi and Chu (2000)

The following chart shows a ‘regression analysis results of hotel factors according to Asian and Western travellers overall satisfaction levels.

Regression Analysis Results of Hotel Factors According to Asian and Western Travelers Overall Satisfaction Levels

Source: Choi and Chu (2000)

2.3 Loyalty

2.3.1 Definition of customer loyalty

Kandampully and Suhartanto (2000) define a loyal customer as “a customer who purchases from the same service provider whenever possible, and who continues to recommend or maintain a positive attitude toward the service provider” (p. 346).

2.3.2 Loyalty dimensions

There is no easy way when clarifying a loyal customer, but it could be done by dividing customer loyalty into 3 measurements.

Behaviour

Attitudinal

Composite

The first one behavioural measurement is a customer which purchase with consistence over a time of period. His constant repeat of purchase would be an indicator of loyalty. The only dilemma is that the purchase done by the client does not result in commitment to one specific brand (Bowen and Chen 2001). “For example, a traveler may stay at a hotel because it is the most convenient location. When a new hotel opens across the street, they switch because the new hotel offers better value” (Bowen and Chen, 2001, p. 213-214). So even if a customer repeats his purchase it is not guaranteed that he is committed to one specific brand.

The attitudinal measurement focus on the loyalty, commitment and engagement a customer has towards a hotel. A guest can have a preferred hotel which he/she adores and would give the hotel the best recommendations to others. The guest will not stay at this hotel even if that would be their preference since the cost was too high for their regular basis. The last composite measurement is a combination of the first two. When measuring composite loyalty it is significant to look at how often the customer buys the product, its brand loyalty, the product preference and how often they switch brands. (Bowen and Chen, 2001)

The work of Teare (1998) entitled: “Interpreting and Responding to Customer Needs” relates that three primary areas of delivery and assurance of quality customer service is:

1) Understanding customers;

2) Designing and delivering services; and 3) Assuring total quality services. (1998; p. 1)

Teare states that consumer behavior is very unpredictable and that this is due to “individual differences and the way in which people categorize purchase decisions.” (1998) Teare states “The potential value of theory development in marketing is sometimes neglected and more often underestimated.” (1998) Teare relates that this is attributed to a “reluctance by practitioners and applied researchers to engage in academic speculation or to extend ‘intuitive’ theoretical explanations.” (1998; p. 2) Teare relates however that there “is much common ground and theoretical explanations can be considered valuable if they perform one or more of the following functions:

1) the means of classifying, organizing and integrating information relevant to the factual world of business;

2) a technique of thinking about marketing problems, and a perspective for practical application;

3) an analytical tool-kit to be drawn on as appropriate in the solution of marketing problems; and 4) the possibility to derive, in time, a number of principles, or even laws, of marketing behavior.” (1998; p. 2)

Teare relates that the customers of a hotel “might reasonably expect to receive an array of benefits from a consumption experience.” (1998; p. 2) These benefits include:

1) Meeting basic functional (or physiological) needs such as hunger, thirst, and sleep; and 2) Satisfying more complex expressive (or psychological) needs like enjoying the hotel surroundings, feeling safe, secure and relaxed; fulfilling lifestyle-related aspirations like using and appreciating luxurious facilities and selecting from an appealing choice of food and wine menus.” (Teare, 1998; p. 3)

Teare relates that in the 1990s ‘total quality management’ (TQM) was the most often used philosophy of quality management. The key principles of TQM include:

conformance to specifications;

Do it right;

Do the right thing; and Delight the customer. (Teare, 1998; p.16)

Quality management is said to provide “an infrastructure for maintaining standards and making improvements…” (Teare, 1998; p. 16) in order to make quality management work there are “an array of techniques” which are needed which include:

customer value chain analysis;

cross-functional work flow charts;

internal customer-supplier audits; and supplier partnership audits. (Teare, 1998; p.16)

Marriott’s hotel has used TQM along with the philosophy of ‘whatever it takes’ to satisfy customers. This has encouraged employees in the organization to ask questions and to proactively seek new and innovative methods in customer satisfaction in promotion of change and in challenging ineffective methods and thinking that is outdated. This has been accomplished through provision of service by employees that exceeds the expectations of customers, involvement of employees in decision making at all levels of the organization; and improved retention rates of employees which has been linked to communication that is more effective as well as feedback, training and empowerment. (Teare; 1998; paraphrased) Key measures are stated as:

Quarterly improvement on a rolling annual basis of controllable employee turnover which was monitored quarterly and internally;

Achievement of employee attitude survey target rating which were monitored annually and externally; and Success of quality initiatives through following external guidelines for quality management that is effective. (Teare, 1998; paraphrased)

History of prior loyalty studies

2.3.3 Principles of loyalty

The work of Kandampully and Suhartanto (2000) entitled: “Customer Loyalty in the Hotel Industry: The Role of Customer Satisfaction and Image” published in the International Journal of Contemporary Hospitality Management relates that: “Loyalty of a firm’s customer has been recognized as the dominant factor in a business organization’s success. This study helps us extend our understanding of the relationship between customer loyalty, customer satisfaction, and image. This is of considerable interest to both practitioners and academics in the field of hospitality management. The objective of this research is to identify the factors of image and customer satisfaction that are positively related to customer loyalty in the hotel industry. Using data collected from chain hotels in New Zealand, the findings indicate that hotel image and customer satisfaction with the performance of housekeeping, reception, food and beverage, and prices are positively correlated to customer loyalty.” (Kandampully and Suhartanto, 2000)

The work of Pizam and Ellis entitled: “Customer Satisfaction and Its Measurement in Hospitality Industries” relate that satisfaction of customer has been found to be “the cheapest means of promotion.” (1999) in the identification of customer satisfaction, a customer satisfaction measurement (CSM) program must “come from and be incorporated into the firm’s corporate culture. In today’s competitive environment on of the most important goals of corporate cultures is retaining and satisfying current and past customers. Experience shows that only customer-oriented corporations can achieve this goal. These companies focus on the needs and wants of specific target groups and then work hard to maximize satisfaction with the product or service being offered.” (Pizam and Ellis, 1999) Pizam and Ellis state that there are nine theories relating to customer satisfaction which include: (1) expectancy disconfirmation; (2) assimilation or cognitive dissonance; (3) contrast; (4) assimilation contrast; (5) equity; (6) attribution; (7) comparison-level; (8) generalized negativity; and (9) value-precept. (Oh and Park, 1997; as cited in Pizam and Ellis, 1999) the WTO in 1985 related in the work of Pizam and Ellis states that customer satisfaction “is a psychological concept that involves the feeling of well-being and pleasure that results from obtaining what one hopes for and expects from an appealing product and/or service.” (1999) Pizam and Ellis relate the work of Parasuraman et al. (1985, 1988, 1991) who identified five generic dimension of service quality that are required to be present in the delivery of the service for it to result in satisfaction of customers. Those five include:

Reliability – the ability to perform the promised services dependably and accurately;

Responsiveness – the willingness to help customers and provide prompt service;

Assurance – the knowledge and courtesy of employees as well as their ability to convey trust and confidence;

Empathy – the provision of caring, individualized attention to customers; and Tangibles – the appearance of physical facilities, equipment, personnel and communication materials. (Pizam and Ellis, 1999)

Within the framework of this model the conceptualization of service quality is as the “gap between customer expectations and the perception of the service provider’s performance.” (Pizam and Ellis, 1999) Pizam and Ellis relate the work of Naumann (1995) who made suggestion of five objectives that are the most common in customer satisfaction measures:

1) to get close to the customer – this allows one to understand “what attributes are the most important to customers [and to] find which attributes affect the customer’s decision making, the relative importance of the attributes and get a performance evaluation of how well the firm is delivering each attribute.” (Pizam and Ellis, 1999)

2) Measure continuous improvement – the attributes significant to the customer are linked directly to value-add processes in the firm and are put into a form consistent with the internal measurements used to evaluate the process. (Pizam and Ellis, 1999)

3) to achieve customer driven improvement as not all customers are equal in their value as an innovation source;

4) to measure competitive strengths and weaknesses – determination of customer perceptions of competitive choices available;

5) to link customer satisfaction measurement data to internal systems. (Pizam and Ellis, 1999)

Pizam and Ellis (1999) state that in the design of global customer satisfaction measurements that it is necessary to take into account both regional and cultural aspects. This is because significant cross-cultural differences have been found when customer satisfaction is measured. Pizam and Ellis state that while services and products “…important to Asians may be completely different from those sought by Europeans.” (1999) Culture is stated by Pizam and Ellis to have an impact on “perception, problem solving and cognition and often leads to differences in satisfaction levels for a single product between different global customers.” (Pizam and Ellis, 1999) Pizam and Ellis relates that most research on customer satisfaction has been conducted in economies that are industrialized “leaving very little research conducted in Africa, the Middle East, South America, Latin America, and large portions of Asia.” (1999)

Other factors that must be taken into account when conducting global research of customer satisfaction are factors including:

1) Differing languages;

2) Levels of literacy; and 3) Interpretations of constructs and cultural behavior. (Pizam and Ellis, 1999)

It may not be possible to use similar survey designs in different socio-cultural environments “or even within a single work environment as language and culture may not be homogeneous with a customers’ corporation of work place.” (Pizam and Ellis, 1999) Two approaches are related in the work of Pizam and Ellis. The first of these is what is termed an “Emic” approach which is “based on recognition of the differences between cultures and acknowledging the importance of each culture’s idiosyncrasies. This would constitute creating a different survey, with different questions, a different method of measurement and administration for each culture.” (Pizam and Ellis, 1999) the “Etic” approach is stated to be “based on the belief that certain industry standards, requirements, values and behaviors are continuous and transcend.” (Pizam and Ellis, 1999) This would allow for a type of universal evaluation to be developed and used in a cross-cultural manner. Caution is given however in the use of the “Emic” approach as “it is more difficult to compare results from different cultures and each cultural evaluation is highly subjective to misinterpretation by the evaluators from differing cultures.” (Pizam and Ellis, 1999) Caution is advised as well using the “Etic” approach as it must not be used in application in a manner that is unchecked or in the case where the measures are abused by “imposing them on cultures without the adaptation or sensitivity to use the evaluative materials correctly.” (Pizam and Ellis, 1999)

The work of Turner and Krizek entitled: “A Meaning-Centered Approach to Customer Satisfaction” relates a study in which proposed is a “meaning-centered approach to understanding customer satisfaction grounded in the hermeneutical tradition and informed by concepts highlighted in Herzberg’s two-factor motivation and hygiene theory.” (2006) Turner and Krizek relate that founder of Wal-Mart, Sam Walton “…articulated our culture’s prevailing attitude toward customers and customer service best: “There is only one boss. The customer. And he can fire everyone in the company from the chairman on down, simply by spending his money somewhere else.” (2007; p. 115) Turner and Krizek relates that an entire industry “…known variously as customer relationship management, customer retention management, and customer relations, among other things has grown out of a philosophy implicit in Walton’s words – to enjoy sustainable success, you must keep your customers satisfied.” (2006; p. 115) Turner and Krizek relates that assessment and monitoring of customer satisfaction “provides organizational members with valuable feedback about their company’s performance. This feedback, in turn, provides managers and other organizational stakeholders with information that has the potential for helping them retain current customers as well as develop new customers.” (2006; p. 117)

2.4 Relationship between customer satisfaction and loyalty.

The work of Lindberg-Repo entitled: “Word-of-mouth Communication in the Hospitality Industry” presents the results “of an exploratory study in the hospitality industry that aimed to develop a new framework for understanding post-purchase world-of-mouth in the relationship context.” (Lindberg-Repo, nd) Also reported is an attempt to gain new insights into word-of-mouth communication through application of the concept of “post-purchase cognitive dissonance to this framework.” (Lindberg-Repo, nd) Lindberg-Repo writes that the value of word-of-mouth referrals “has been long acknowledged by marketers. As shown in the above examples word-of-mouth referrals are perceived as a strong and meaningful source of communication among customer. The hospitality industry is particularly concerned with word-of-mouth recommendations, due to the intangible nature of its product, and the fact that it is a personal experience that forms the basis of the consumer’s assessment of the service.” (Lindberg-Repo, nd) it is related additionally in the study of Lindberg-Repo that researchers that Duncan and Moriarty (1997) researchers state: “Word-of-mouth, on which reputations are build, is probably the most powerful form of communication in the business world and it can either hurt a company’s reputation or give it a boost on the market. A company’s reputation can be only tracked through the words of its customers and other important stakeholders.” (p. 253; as cited in Lindberg-Repo, nd) Lindberg-Repo relates that research into customer loyalty indicates a “critical need to pay more attention to their referrals. (Bowen and Shoemaker, 1998; as cited in Lindberg-Repo, nd) in contrast to the very expensive planned marketing design, word-of-mouth communication which is unplanned and not manipulated by the marketer holds higher credibility among consumers than do “other sources of brand messages.” (Duncan and Moriarty, 1997; as cited in Lindberg-Repo, nd) Lindberg-Repo notes the statement of Duncan and Moriarty: “The proverbial word-of-mouth represents the unplanned messages that may either confirm or disconfirm the planned brand messages.” (1997) Duncan and Moriarty continue by stating: “These unplanned messages are not under the control of the organization and can create difficult problems in consistency with other marketing communication sources.” (1997) the following illustrates relates the range of credibility afforded to each of the communication sources reviewed in the study of Lindberg-Repo.

Credibility Rating of Sources of Communication

Marketer – communicates through four sources of brand messages

Planned Products Services Unplanned

Messages Messages advertising durability interaction and word-of-mouth events, appearance interface with news stories sales performance orgazniation research promotion distribution e.g. gossip personal pricing complaints sales design requests

PR

Customers Consistent Perception of Messages and Brand Experiences

Low Credibility

Source: Lindberg-Repo (nd)

Word-of-mouth referral hold high credibility and is considered an “unbiased source of information of an interpretive, subjective and affective nature. Word-of-mouth takes place in interaction between different people, mostly with the ones in the closest social referral groups. In other words, such interactions are pervasive in themselves with no effort on the marketer’s part.” (Lindberg-Repo, nd) the work of Gronroos holds that the interest of the consumers is within “elements of reality, as they themselves perceive it. Direct experiences of customers with products or services are of a personal nature and tend to be more vivid and graphic, and those are more available at any moment to our thinking processes. Hence, the process nature of the experience, as well the way it is communicated, adds to the memorability in the mind of the consumer.” (Lindberg-Repo, nd)

The nature of services, states Lindberg-Repo “makes them natural candidates for word-of-mouth communication for the following reasons: (1) services are characterized as intangible and inseparable from production and consumption. As a consequence, would-be customers must place greater reliance on the opinion of others when consumers are investigating possible service providers; (2) services are information driven and involve considerable interaction between the provider and the customer. Hence it will be of increasing interest that the service provider be closely tied into the word-of-mouth process to help identify and deliver services that best suit the needs and expectations of a variety of customers.” (nd) the third reason given is that since services are “dominated by experience qualities with attributes that can be meaningfully evaluated only after the purchase and during the consumption process…” (nd) it is related that the work of Berry and Parasuraman states: “In services, both post-sale marketing through orchestrating a satisfying experience for customers during which production and word-of-mouth communication (which is surrogate and supplement for customer’s direct experiences) have a prominent effect in winning customers’ loyalty.” (as cited in Lindberg-Repo, nd; p. 15)

In the context of word-of-mouth relationship marketing it is stated that this type of marketing “has emerged as an important new approach by which marketing management can achieve customer retention.” (nd) While this is not really a new approach but instead one of tradition, this approach in today’s marketing context “gives quite a different view of the exchange processes on the market compared to the static view, and it is proposed that perceived relationship quality is a core concept when analyzing service quality.” Lindberg-Repo states that the key issue from this perspective is “…to shift the focus from the effort of attracting customers to endeavors related to having customers and taking care of them. The idea is first and foremost to create customer loyalty so that a stable and mutually profitable and long-term relationship is enhanced.” (p.14) the theoretical framework of relationship marketing rests upon the ‘bonds’ which are stated to be “…exit barriers that tie the customer to the service provider and maintain the relationship. These are:

1) Legal;

2) Economic;

3) Technological;

4) Geographical;

5) Time;

6) Knowledge;

7) Social;

8) Cultural;

9) Ideological; and 10) Psychological bonds.” (Lindberg-Repo, nd; p. 19)

The primary assumption relating to the validity of the word-of-mouth referral method is that customers who are satisfied talk about it with others and the result is improved profitability since new customers are attracted to the service. It is stated that personal referrals “are responsible for 20 to 40% of new bank services.” (Lindberg-Repo, nd; p.19) it is discussed as well in this work that cognitive dissonance in the industry influences “brand switching and volatility in the marketplace…” (Lindberg-Repo, nd; p. 23)

The work of Bowen and Chen entitled: “The Relationship Between Customer Loyalty and Customer Satisfaction” relates a study conducted for the purpose of development and implementation of a method “for hotels to identify attributes that will increase customer loyalty.” (2001) Bowen and Chen relates that there are three approaches to measurement of customer loyalty which are those of:

Behavioral measurements;

Attitudinal measurement; and Composite measurements. (2001)

The measurement of behavioral factors “consider[s] consistent, repetitious purchase behavior as an indicator of loyalty.” (Bowen and Chen, 2001) the limitations in this approach include the fact that repeat purchases may not always result from psychological commitment of the brand since a traveler “may stay at a hotel because it is the most convenient location. When a new hotel opens across the street, they switch because the new hotel offers better value.” (Bowen and Chen, 2001) the attititudinal measures approach reflects the “emotional and psychological attachment inherent in loyalty.” (Bowen and Chen, 2001; p. 2) Composite measure loyalty through combination of the customer’s “product preferences, propensity of brand-switching, frequency of purchase, recency of purchase and totally amount of purchase.” (Bowen and Chen, 2001; p.2) in order to better predict the power of loyalty Bowen and Chen states that it is optimal to use both attitude and behavior approaches in making the determination. Bowen and Chen’s study concludes by stating that research supports the contentions that “there is a positive correlation between loyal customers and profitability.” (2001; p.3)

The work of Andreassen and Lindestad entitled: “Customer Loyalty and Complex Services: The Impact of Corporate Image on Quality, Customer Satisfaction and Loyalty for Customers with Varying Degrees of Service Expertise” relates that: “In today’s competitive market services and services companies within the industry are becoming increasingly similar. Differentiation through the delivery channel is difficult. A growing number of service companies have embarked on a journey of positioning through the communication channel” which includes advertising and personal selling “with the objective of building strong corporate images in order to create relative attractiveness.” (Andreassen and Lindestad, 1998; p.1) Andreassen and Lindestad speak of ‘corporate image’ and state “from the marketing literature of goods we have learned that brand reputation has been defined as a perception of quality associated with the name. On the company level, image has been defined as: “…perceptions of an organization reflected in the associations held in consumer memory.” (Keller, 1993; as cited in Andreassen and Lindestad, 1998; p. 5) Gronroos (1998) in the “perceived quality model” found that “…perceived quality is a function of expected quality” which has been generated “from market communication, image, word-of-mouth, and customer needs…and experienced quality…generated from technical quality and functional quality.” (Andreassen and Lindestad, 1998; p. 5)

Bibliography

Andreassen, Tor Wallin and Lindestad, Bodil (1998) Customer Loyalty and Complex Services: The Impact of Corporate Imagine on Quality, Customer Satisfaction and Loyalty for Customers with Varying Degrees of Service Expertise. International Journal of Service Management Vol. 9, No. 1, 1998. MCB University Press.

Bowen, John T. And Chen, Shiang-Lih (2001) the Relationship Between Customer Loyalty and Customer Satisfaction. The International Journal of Contemporary Hospitality Management. 13/5 2001. MCB University Press.

Kandampully, Jay and Suhartanto, Dwi (2000) Customer Loyalty in the Hotel Industry: The Role of Customer Satisfaction and Image. Vol. 12 Issue 6. International Journal of Contemporary Hospitality Management. Abstract Online available at http://www.emeraldinsight.com/Insight/viewContentItem.do;jsessionid=A7BB20EB4B5CF3B4A2F5E96AD85BD78B?contentType=Article&hdAction=lnkpdf&contentId=867348

Lindberg-Repo (nd) Word-of-Mouth Communication in the Hospitality Industry. CERS Center for Relationship Marketing and Service Management. Hotel School Cornell University. Online available at http://www.hotelschool.cornell.edu/chr/pdf/showpdf/chr/research/wordofmouth.pdf-my_path_info=chr/research/wordofmouth.pdf

Pizam, Abraham and Ellis, Taylor (1999) Customer Satisfaction and Its Measurement in Hospitality Enterprises. International Journal of Contemporary Hospitality Management 11/7 1999.

Teare, Richard E. (1998) Interpreting and Responding to Customer Needs. Journal of Workplace Learning. Vol.10 No.2. 1998. MCB University Press.

Turner, Paaige K. And Krizek, Robert L. (2007) a Meaning-Centered Approach to Customer Satisfaction. Management Communication Quarterly 2006; 20; 115.