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Assessing the Effect of Customer Relationship Management on Hotels’ Marketing Performance: The Mediating Role of Marketing Capabilities – Evidence from Sharm El-Sheikh, Egypt
Mohammad Nabil Shaaban
Hotel Studies Department, Faculty of Tourism and Hotels, Alexandria University, 385 Mostafa Mosharafa st., Azarita, Alexandria, Egypt
Soha Ashraf Ghoneim
Hotel Studies Department, Faculty of Tourism and Hotels, Alexandria University, Alexandria, Egypt
Since customers are today’s business’ main component, Customer Relationship Management (CRM) plays a crucial role for creating valid, sustainable base of profitable customers, providing them with customized products and services, and increasing their spending, thus improving the overall hotel’s Marketing Capabilities (MC) and Marketing Performance (MP). The current research aims at studying and investigating the objectives, characteristics, dimensions, and the interchangeable correlations among CRM, MC, MP, and relevant business-related concerns. Survey questionnaire have been addressed to marketing and front office managers working in five- and four-star hotels in Sharm El-Sheikh in Egypt.
Descriptively, all the research variables were reported to be significantly above moderate, indicating that all their procedures and practices are almost always applied. Inferentially, CRM positively and significantly affected hotels’ MC and MP. In addition, MC mediated and strengthened the effect of CRM on MP. Thus, in order to maximize hotels’ MP, thorough awareness and interest should be devoted to ensuring the best utilization of their CRM practices and M. Finally, best CRM and MC practices are identified within the study’s proposed practical implications.
Key Words: Customer Relationship Management, Marketing Performance, Marketing Capabilities, Hotels in Egypt
Marketing’s basic function is to integrate customers into the design of the products and services to create affluence and add value in relationships (Zineldin, 2006). Customers are today’s business’ main component, thus, many organizations recently begin to adopt Customer Relationship Management (CRM). CRM is the most innovative method for creating valid, sustainable customer base, and has been even ranked as the second most effective management tool after strategic planning (Madhovi, 2014). CRM involves two chief roles; recognizing and acquiring profitable customers, and increasing existing customers’ spending through providing them with customized products and services, thus improving the overall customer experience, creating a competitive advantage, and enhancing the overall organizational performance (Malik and Harper, 2009; Sadek and Tantawi, 2011).
2 REVIEW OF LITERATURE
2.1 The Concept of CRM
Customer-based relationships have been thoroughly studied (Crosby et al., 1990; Morgan and Hunt, 1994; Berry, 1995; Sheth and Parvatiyar, 1995; Sin et al., 2005). CRM has several definitions (Ngai, 2005; Sin et al., 2005; Hamid, 2009; Abdullateef et al., 2010), it was regarded from different viewpoints, and it means different things to different people based on the context (Piskar and Faganel, 2009; Mohammad et al., 2013).
CRM is a customer-oriented process that enables organizations to forecast and meet customers' requirements (Petrison et al., 1993; Beckett-Camarata et al., 1998), avoid wasting money on useless marketing programs (Kim et al., 2010), acquire new, profitable customers, and to retain old customers; through maintaining a long-term relationship with them, creating value for the organization and customers (Parvatiyar and Sheth, 2001; Dyche, 2002; Rigby et al., 2002; Gummesson, 2004; Sin et al., 2005; Richard and Jones, 2008; Wang and Feng, 2012; Saarijärvi et al., 2013; Ehsani and Hashim, 2014), gathering all due customers’ information (Rigby et al., 2002; Abele, 2008; Richard and Jones, 2008; Kotler and Keller, 2012; Luck and Lancaster, 2013; Saarijärvi et al., 2013; Ehsani and Hashim, 2014). From a different perspective, CRM was approached as a technology application that brings together, processes customers’ information (Luck and Lancaster, 2013), retains and captures customers by using technology, integrated systems and human interaction skills (Bosse, 2006).
Historically, the hospitality industry used different techniques to store customer data before implementing CRM program, such as index cards, property management systems, customer history, and customer information databases, as the beginning of using marketing intelligence in the hospitality industry (Newham, 2008). CRM in hotels now utilizes internet and information technology, allowing better, easier access and retainment of customers (Haley and Watson, 2003; Green, 2006; Deighton and Kornfeld, 2007; Newham, 2008; Luck and Lancaster, 2013).
CRM thus represents natural development of marketing orientation and relationship marketing, originating from the need to effectively manage customer relationships, utilizing human actions and technology (Kohli and Jaworski, 1990; Narver and Slater, 1990; Galbreath and Rogers, 1999; Boulding et al., 2005; Ehsani and Hashim, 2014; Juuso, 2014).
2.2 Benefits of CRM
In this regard, and assuring CRM as a must-be-investigated topic, numerous researchers and practitioners have determined the main benefits of CRM including the improved ability to target, acquire, and retain profitable customers (Parvatiyar and Sheth, 2000, 2001; Winer, 2001; Rigby et al., 2002; Chen and Popovich, 2003; Croteau and Li, 2003; Thomas et al., 2004; Rigby and Ledingham, 2004; Jones et al., 2005; Maklan et al., 2005; Pan, 2005; Richards and Jones, 2008; Wang et al., 2009; Amoako et al., 2012; Vazifehdust et al., 2012; Anbuoli and Thiruvenkatraj, 2013), retrieving lost customers (Thomas et al., 2004; Rigby and Ledingham, 2004), augmenting customer-related information sharing, knowledge and feedback (Chen and Popovich, 2003; Rigby and Ledingham, 2004; Maklan et al., 2005; Pan, 2005), motivating employees to foster customer relationships (Rigby et al., 2002; Popli and Rao, 2009), reducing cost-to-serve and improving customer service efficiency (Sheth et al., 2000; Chen and Popovich, 2003; Park and Kim, 2003; Richards and Jones, 2008; Amoako et al., 2012), enhancing customer satisfaction, loyalty, and commitment (Parvatiyar and Sheth, 2000, 2001; Verhoef, 2003; Popli and Rao, 2009), and product development enhancement, better allocation of resources across the customer portfolio, and enhancing supply-chain planning and integration (Eggert et al., 2006).
Moreover, CRM enables customizing marketing plans and products and services to customers (Sheth et al., 2000; Chen and Popovich, 2003; Croteau and Li, 2003; Rigby and Ledingham, 2004; Pan, 2005; Richards and Jones, 2008; Popli and Rao, 2009; Wang et al., 2009; Amoako et al., 2012; Vazifehdust et al., 2012; Anbuoli and Thiruvenkatraj, 2013), improved efficiency and effectiveness of sales and marketing (Rivers and Dart, 1999; Croteau and Li, 2003; Rigby and Ledingham, 2004; Jones et al., 2005; Richards and Jones, 2008; Amoako et al., 2012), improved pricing (Rivers and Dart, 1999; Park and Kim, 2003; Thomas et al., 2004; Richards and Jones, 2008; Amoako et al., 2012), improving cross-selling and up-selling (Parvatiyar and Sheth, 2000, 2001; Chen and Popovich, 2003; Anbuoli and Thiruvenkatraj, 2013), and enhancing communication across multiple channels (Wilson et al., 2002; Wang et al., 2009).
2.3 CRM Components
Several components have been determined to constitute the successful application of CRM, including customer strategy, organizational strategy, value creation, business culture and relationships, human factor, process, technology, organizational structure, knowledge management (KM), and leadership (Ali et al., 2006; Melendez and Moreno, 2011; Mohebi et al., 2012; Kamalian et al., 2013). Meanwhile, several researchers have summed up all those elements into three main components; process, people, and technology (Chen and Popovich, 2003; Ali et al., 2006; Mendoza et al., 2007; Almotairi, 2008, 2010; Pedron and Saccol, 2009; Arab et al., 2010; Dhman, 2011; Mohammad and Bin Rashid, 2012).
2.4 CRM Models
Several models are presented for CRM application. The applied CRM in this research is the CRM Scale Model, developed by Sin et al. (2005), involving four dimensions; that is, customer orientation (CO); CRM organization (CRMO); KM; and technology-based CRM (TCRM).
The current study is based upon this multi-dimension CRM approach, since it conforms with the structured belief that successful CRM application is based upon the components of people, technology, and process (Chen and Popovich, 2003; Ali et al., 2006; Mendoza et al., 2007; Almotairi, 2008, 2010; Pedron and Saccol, 2009; Arab et al., 2010; Dhman, 2011; Mohammad and Bin Rashid, 2012), and that these dimensions must interact to improve organizational performance (Crosby and Johnson, 2001; Ryals and Knox, 2001; Sin et al., 2005; Yim et al., 2005; Sadek and Tantawi, 2011; Yueh et al., 2010; Abdullateef et al., 2014).
Moreover, those CRM dimensions are recent, with limited investigation endeavors in service industries (Sin et al., 2005; Yim et al., 2005; Hallin and Marnburg, 2008; Shaw and William, 2009; Abdullateef et al., 2010; Lo et al., 2010; Akroush et al., 2011; Sadek et al., 2011). In addition, many studies asserted the significance of investigating CRM dimensions in the hospitality industry (Sin et al., 2005; Tajeddini, 2010; Akroush et al., 2011; Sadek et al., 2011; Mohammad and Bin Rashid, 2012).
CO focuses on customer-centric marketing, personalization and communication, leading to positive influence and continued improvement in service experience and overall performance (Piercy, 2002; Kennedy et al., 2002; Liu et al., 2003; Sin et al., 2005; Yilmaz et al., 2005; Lee et al., 2006; Zhou et al, 2009; Asikhia, 2010; Fan and Ku, 2010; Mohammad and Bin Rashid, 2012; Mohammad et al., 2013).
CRMO concentrates on organizational structure, commitment of resources, and human resource management, thereby providing the proper service climate (Boulding et al., 2005; Sin et al., 2005; Yim et al., 2005; Payne, 2006; Ku, 2010; Mechinda and Patterson, 2011; Mohammad and Bin Rashid, 2012; Mohammad et al., 2013).
KM converts customer information into customer knowledge, thus building more sustainable relationships with them (Croteau and Li, 2003; Plessis and Boon, 2004; Stringfellow et al., 2004; Zahay and Griffin, 2004; Sin et al., 2005; Sigala, 2005; Sadek and Tantawi, 2011). Hence, hotels can better implement marketing activities and satisfy customers’ needs through building and disseminating customer knowledge (Noble and Mokwa, 1999; Mohammad et al., 2013), such as quoting room prices based on customer knowledge generated from customers’ data (Nunes and Dréze, 2006).
Finally, TCRM emphasizes utilizing technological tools in customer-centric activities (Sin et al., 2005, Dutu and Halmajan, 2011), to help provide greater and profitable personalization of products and services with better quality at lower cost, and enhance overall organizational performance (Hart, 1995; Roberts et al., 2005; Sin et al., 2005; Ozgener and Iraz, 2006; Eid, 2007; Abdullateef et al., 2011; Akroush et al., 2011; Sadek and Tantawi, 2011; Mohammad et al., 2013). Specifically, utilizing marketing-related technology is essential to the hospitality industry (Moriarty et al., 2008; Kasim and Minai, 2009; Mohammad et al., 2013).
2.5 CRM in the Hospitality Industry
Several studies investigated CRM implementation in the hospitality industry (Olsen and Connolly, 2000; Sigala, 2005; Luck and Lancaster, 2013), particularly due to its high rate of customer turnover (Sigala, 2005), increased competition (Sigala, 2005; Luck and Lancaster, 2013), rising customer expectations, increasing the costs of customer acquisition (Olsen and Connolly, 2005), and deceleration in economy and consequently in the rate of room sales (Newham, 2008). The hospitality industry is convenient for implementing CRM (Piccoli et al., 2003), since customers’ relationship continues since the early trip planning and lasts a lifetime, not just when customers check-out (Schweisberger and Chatterjee, 2001). Chen and Popovich (2003) reported a successful CRM implementation case in Ritz-Carlton, where customer preferences were collected and recorded during their stay, to provide them with the required services on their next visit to all hotels affiliated in the same chain.
More particularly pertaining to the aim of the current paper, several studies have ascertained the significant positive effect of CRM on hotels’ organizational performance. It was proved in Malaysian hotels that the aforementioned CRM dimensions impact hotels’ performance, including financial, customer-related, internal process, and learning and growth (Alshourah, 2012; Wu and Lu, 2012; Mohammad et al., 2013; Mohammed et al, 2014). Alshourah (2012) stated that CRMO and TCRM influenced CRM performance such as top management, customer data, customer information processing and CRM systems’ functionality.
A key indicator of hotels’ organizational performance is marketing performance (MP) (Morgan et al., 2002; O’Sullivan et al., 2009), which involves effectiveness, efficiency, and adaptability of marketing efforts (Morgan et al., 2002; Sirbel, 2012). Several metrics have been determined for measuring MP (Kokkinaki and Ambler, 1999; Bigne´ et al., 2001; Eusebio et al., 2006; Wu and Lu, 2012; Frösén et al., 2013), including turnover, contribution margin, profit, market share, advertising and promotional share, customer penetration, loyalty, and satisfaction, brand recognition and satisfaction, purchase intention, distribution level, profitability of intermediaries, service quality, and innovativeness. The first research hypothesis can thus be phrased as follows:
Research-Hypothesis 1: The higher the CRM Application, the higher will be the level of the hotel’s MP.
Moreover, CRM has been associated with marketing capabilities (MC). MC represents organizations’ ability to utilize resources to perform marketing activities, satisfy customers' needs (Day, 1994; Chang, 1996; Mohammed et al., 2014), simplify learning about customers, develop and adjust products and services, and manipulate marketing tactics to target new customers (Blesa and Ripollés, 2008). Mohammed et al. (2014) pointed out that MC have two types: planning and implementation. Marketing planning capabilities (MPC) enables anticipating and responding to the business environment, direct resources and efforts to cope with environmental needs, boost organizational performance, and achieve financial goals (Reed and Defillipi, 1990; Slotegraaf and Dickson, 2004; Vorhies and Morgan, 2005; Morgan et al., 2009; Chang et al., 2010). Marketing implementation capabilities (MIC) employ due resources and processes to transform marketing plans into actions that mutually enhance the organizational performance (Noble and Mokwa, 1999; Eisenhardt and Martin, 2000; White et al., 2003; Vorhies and Morgan, 2005; Kotler and Keller, 2012; Slater et al., 2010), thus increasing overall marketing effectiveness, especially in hotels (Cizmar and Weber, 2000). In light of this rationalization, the second research hypothesis is:
Research-Hypothesis 2: The higher the CRM Application, the higher will be the level of the hotel’s MC.
In addition, MC, either MPC or MIC, mediated the effect of CRM dimensions on organizational performance in Malaysian hotels (Mohammad, 2014). More particularly, TCRM dimension has been associated with hotel organizational performance (Kasim and Minai, 2009; Mohammed et al., 2014); also mediated by MC, either MPC or MIC (Mohammed et al., 2014). Also, Neil (2010) pointed out that MIC mediated the relationship between CO, procedures, and expertise; and marketing effectiveness. Similarly, MIC mediated the relationship between customer knowledge (Lee et al., 2011), and marketing strategic development (White et al., 2003); and organizational performance. Hence the third research hypothesis involves the following correlation:
Research-Hypothesis 3: The hotel’s Marketing Capabilities, as a moderator, increases the size of CRM Application’s causal effect on the hotel’s MP.
3 RESEARCH METHODOLOGY
After reviewing the relevant CRM, it is essential to supplement the theoretical part by conducting the field study.
3.1 Identifying Population
The target population for this study consisted of marketing managers and front office managers working in five- and four-star hotels in Sharm El-Sheikh in Egypt. This destination has been chosen to represent resort hotels, which have a distinguished guests’ profile, representing both vacation and business travellers, relative guests’ loyalty, and leisure-related guests’ needs and wants. It will thus be a suitable context to examine practices of CRM. Marketing and front office managers were chosen since they are directly involved in and related to detailed sales, marketing, and CRM-related activities. In addition, choosing four-star and five-star hotels provides for a homogeneous-based field study, thus guaranteeing consistent results, since those hotels are mostly uniform in their unique needs, operational circumstances, and capabilities. Also, four-star and five-star hotel are the most expected to possess the technical and managerial know-how as a basis for applying effective, sound CRM practices.
The population frame was adopted from the Egyptian Hotel Association website (http://www.egyptianhotels.org, Accessed on April 2, 2017). As the population of this study is not vast, data was collected using the census method, involving the investigation of the entire population, where the data are collected from each and every unit of the population (Saunders et al. 2016). Data have been collected in April 2017. The researcher prepared a list of 43 five-star and 61 four-star hotels in Sharm El-Sheikh, totaling 104 hotels. Among which, 49 hotels responded (19 four-star and 30 five-star), 21 hotels refused to respond, and 34 hotels were closed. The response rate is thus 70% of operating hotels at the time the study was conducted (April, 2017), which is considered a representative percentage as required for the sake of further reasonable, reliable generalization attempts, as determined by Gay & Diehl (1992) not be less than 30%. Response rate even represents 47.11% of total hotels, including closed operations.
3.2 Scale Development, Validity, Pilot Study, and Reliability
The research's survey, face-to-face researcher-administered, questionnaire involved sections on the level of application of CRM dimensions, MP, MPC and MIC; and managers’ and hotels’ profiles. Statements were derived as follows; CRM dimension of CO from Mohammed et al (2014), CRM dimensions of CRMO, KM, and TCRM from Sin et al. (2005), MP from Wu and Lu (2012), and MPC and MIC from Mohammed et al (2014). Respondents have been asked to rate each statement using a 5-point Likert scale, where "1" indicates not applied; and 5 indicates always applied.
Questionnaire’s clarity and content have been assessed through both academic experts, and then through a pilot study; through surveying managers from two five-star hotels, and one 4-star hotel in the city of Alexandria. This resulted in ensuring face and content validity, clarity of questionnaire items, rephrasing enhancements, merging similar statements, and estimating time needed to fill in each questionnaire. Moreover, after distributing the questionnaire and before analyzing data, reliability has been checked. Cronbach’s Alpha, the reliability coefficient and the most used internal consistency measure, was calculated, and it was 0.904; that is, satisfactorily higher than the typical cut point 0.70.
4 Analysis and Discussion of Research Findings
Managers' and hotels' profile characteristics is first demonstrated, followed by comprehensive descriptive and inferential analyses of research hypotheses and related variables, along with due discussion and interpretation of results.
4.1 Managers' and Hotels' Profile Characteristics
A descriptive analysis of managers' and hotels' profile characteristics is provided in Table 1, indicating the number and percentage of respondent managers according to age, years of experience in the hospitality industry, tenure in the current hotel, and education. Surveyed hotels’ data are classified as per years in operation, number of rooms, average annual occupancy percentage, number of employees, grade, and affiliation.
Table 1 Title of Example Table
4.2 Descriptive Analysis of Research Variables
A descriptive analysis of research variables is provided in Table 2, based on the scores reported by managers. Means of scores of all variables; either dependent or independent, were noted to be significantly above moderate, ranging between 4:5, indicating that all the procedures and practices of CRM dimensions, MP, and MC, either MPC or MIC, are almost always applied.
Table 2: Summary of Descriptive Analysis Results of Research Variables
This indicates that hotels’ policies and managers enjoy an elevated degree of awareness of CRM importance. This is basically attributable to the inherent necessity of the application of those procedures and practices in hotels, and managers’ elevated awareness of their importance to business survival and prosperity. This has been noticeable regardless hotels’ grade, affiliation, size, or occupancy percentage, neither managers’ personal and job-related characteristics.
Consequently, at least in this primary phase of descriptively discussing results, and according to previous studies, those hotels are most probably expected to experience CRM-related benefits, including, for instance, better customers’ retrieving, targeting and retention (Parvatiyar and Sheth, 2000, 2001; Winer, 2001; Rigby et al., 2002; Chen and Popovich, 2003; Croteau and Li, 2003; Thomas et al., 2004; Rigby and Ledingham, 2004; Thomas et al., 2004; Jones et al., 2005; Maklan et al., 2005; Pan, 2005; Richards and Jones, 2008; Wang et al., 2009; Amoako et al., 2012; Vazifehdust et al., 2012; Anbuoli and Thiruvenkatraj, 2013), enhancing customer-related knowledge and feedback (Chen and Popovich, 2003; Rigby and Ledingham, 2004; Maklan et al., 2005; Pan, 2005), improving customer satisfaction, loyalty, and commitment (Parvatiyar and Sheth, 2000, 2001; Verhoef, 2003; Popli and Rao, 2009), and product development enhancement, better allocation of resources across the customer portfolio, and enhancing supply-chain planning and integration (Eggert et al., 2006), to name but a few. CRM also facilitates tailoring marketing plans and products and services to customers (Sheth et al., 2000; Chen and Popovich, 2003; Croteau and Li, 2003; Rigby and Ledingham, 2004; Pan, 2005; Richards and Jones, 2008; Popli and Rao, 2009; Wang et al., 2009; Amoako et al.,2012; Vazifehdust et al., 2012; Anbuoli and Thiruvenkatraj, 2013).
In addition, descriptively as well, such spotted CRM elevated application level would raise hotels’ organizational performance, including MP; and MC, including both MPC and MIC (Alshourah, 2012; Wu and Lu, 2012; Mohammad et al., 2013; Mohammed et al, 2014). More meaningful, significant results would of course be proven in the subsequent inferential analysis.
4.3 Inferential Analysis of Research Hypotheses
Inferential analysis results of research variables are provided in Tables 3 through 5. Results for hypotheses 1 and 2 have been obtained through multiple and simple linear regression, while hypothesis 3 has been tested utilizing Process, by Andrew F. Hayes; Model 1, Simple Moderation Model. Analysis and further discussion of results are provided according to hypotheses.
Research-Hypothesis 1: The higher the CRM Application, the higher will be the level of the hotel’s MP.
Table 3: Summary of the Inferential Analysis of Research-Hypothesis 1
CRM application is positively correlated with hotels’ MP. The first hypothesis was supported (Sig. < 0.01, R2 = 0.634), indicating that the higher the level of CRM Application, the higher will be the level of the hotel’s MP.
This result typically conforms to previous relevant literature that stated that CRM dimensions’ significant positive effect on MP, as a main indicator of hotels’ organizational performance (Alshourah, 2012; Wu and Lu, 2012; Mohammad et al., 2013; Mohammed et al, 2014).
And proving further support for Research-Hypothesis 1, even all individual CRM dimensions were evidenced to significantly and positively affect MP. These results also conformed to previous results, where analyses showed that CRMO and TCRM are positively correlated with hotels’ MP (Sig. < 0.01), indicating that the higher the level of CRMO and TCRM Application, the higher will be the level of the hotel’s MP. Alshourah (2012) affirmed that CRMO and TCRM positively affect CRM performance and subsequent benefits involving top management, customer data, customer information processing and CRM systems’ functionality. Moreover, TCRM dimension has been associated with hotel organizational performance (Abu-Kasim and Minai, 2009; Mohammed et al., 2014).
Most important is the CRM dimension of CO, which recorded the highest effect on MP (Sig. < 0.01, R2 = 0.554) among all other dimension. This is due to that CO represents the core and main focus of CRM; that is, customer. This inference confirmed the results of many studies (Piercy, 2002; Kennedy et al., 2002; Liu et al., 2003; Sin et al., 2005; Yilmaz et al., 2005; Lee et al., 2006; Zhou et al, 2009; Asikhia, 2010; Fan and Ku, 2010; Mohammad and Bin Rashid, 2012; Mohammad et al., 2013), which determined CO’s main emphasis as being customer-centric marketing, personalization and communication, thus promoting positive influence and continued improvement in service experience and overall performance.
Therefore, and as a rational consequence of elevated hotels’ MP, hotels would enjoy enhanced effectiveness, efficiency, and adaptability of marketing efforts (Morgan et al., 2002; Sirbel, 2012), and increased rate of relevant marketing metrics, such as including turnover, contribution margin, profit, market share, advertising and promotional share, customer penetration, loyalty, and satisfaction, brand recognition and satisfaction, purchase intention, distribution level, profitability of intermediaries, service quality, and innovativeness (Kokkinaki and Ambler, 1999; Bigne´ et al., 2001; Eusebio et al., 2006; Wu and Lu, 2012; Frösén et al., 2013). Moreover, improved MP is a major stimulus of overall hotels’ organizational performance (Morgan et al., 2002; O’Sullivan et al., 2009; Alshourah, 2012; Wu and Lu, 2012; Mohammad et al., 2013; Mohammed et al, 2014).
Research-Hypothesis 2: The higher the CRM Application, the higher will be the level of the hotel’s MC.
Table 4: Summary of the Inferential Analysis of Research-Hypothesis 2
CRM application is positively correlated with hotels’ MC, either MPC or MIC. The second hypothesis was supported (Sig. < 0.01, R2 = 0.360), indicating that the higher the level of CRM Application, the higher will be the level of the hotels’ MC, MPC, and MIC. Further support for the second hypothesis is the positive and significant effect of CRM individual dimensions on MC, MPC, and MIC.
Again, and further reassuring the crucial role of the CO, it contributed to the strongest effect of CRM dimensions on MC (Sig. < 0.01, R2 = 0.296), MPC (Sig. < 0.01, R2 = 0.324), and MIC (Sig. < 0.01, R2 = 0.238), indicating hotels’ policies and managers due duty to enhance and improve CO-related practices.
These inferences go in line with previous studies that stated that successful CRM application is associated with MC, which in turn indicates hotels’ ability to employ resources to accomplish marketing tasks, satisfy customers (Day, 1994; Chang, 1996; Mohammed et al., 2014), streamline learning about customers, design and accustom products and services, and adapt marketing tactics to target new customers (Blesa and Ripollés, 2008). Moreover, enhancing MPC facilitates forecasting and reacting to the business environment, manage resources and efforts to tackle environmental needs, raise organizational performance, and achieve financial goals (Reed and Defillipi, 1990; Slotegraaf and Dickson, 2004; Vorhies and Morgan, 2005; Morgan et al., 2009; Chang et al., 2010). In addition, MIC improvements due to better CRM application enable to better convert marketing plans into concrete measures to develop organizational performance (Noble and Mokwa, 1999; Eisenhardt and Martin, 2000; White et al., 2003; Vorhies and Morgan, 2005; Kotler and Keller, 2012; Slater et al., 2010), thus increasing overall marketing effectiveness (Cizmar and Weber, 2000).
Research-Hypothesis 3: The hotel’s MC, as a moderator, significantly increases the size of CRM Application’s causal effect on the hotel’s MP.
Table 5: Summary of the Inferential Analysis of Research-Hypothesis 3
MC significantly and positively mediated the causal effect of CRM application on the hotels’ MP. The third hypothesis was supported (Sig. < 0.01, R2 = 0.6631). More specifically, interaction of MC increased that causal effect (Sig. < 0.01, R2 change = 0.0923).
This inference has been further supported through statistically proving that the causal effect of CRM application on the hotels’ MP has been mediated by MC components; that is, MPC (Sig. < 0.01, R2 = 0.6545) and MIC (Sig. < 0.01, R2 = 0.6568). That causal effect was as well increased by MPC (Sig. < 0.01, R2 change = 0.0913) and MIC (Sig. < 0.01, R2 change = 0.0872).
These results coincide with previous relevant studies that reported the significant mediation of MC, either MPC or MIC to CRM dimensions’ effect on hotels’ organizational performance (Mohammad, 2014). More specifically, MIC mediated the relationship between CO, procedures, and expertise; and marketing effectiveness (Neil, 2010). Similarly, MIC mediated the relationship between customer knowledge (Lee et al., 2011), and marketing strategic development (White et al., 2003); and organizational performance.
These results imply several inferences. First, the causal effect of CRM on MP and MC are further emphasized, as supported in the first hypothesis and second hypotheses, respectively. Second, codependent and interrelating correlations and causal effects among CRM, MP, and MC are confirmed and rationalized. Third, and most important, the essential role of MC, MPC, and MIC in hotels is endorsed, since their interaction not only significantly and positively mediated the causal effect of CRM application on the hotels’ MP, but also significantly increased that causal effect.
Thus, launching from hotels’ need not to lose CRM development and maintaining efforts in vain, to increase CRM positive effect on MC, and eventually to maximize their MP, MC should be then carefully established and maintained, both MPC and MIC. Accordingly, hotels can best acquire the previously stated MC-related benefits, such as utilizing resources to accomplish marketing tasks, satisfy customers, streamline learning about customers, design and accustom products and services, and adapt marketing tactics to target new customers (Day, 1994; Chang, 1996; Blesa and Ripollés, 2008; Mohammed et al., 2014), forecasting and reacting to business environment, manage resources and efforts to tackle environmental needs, raise organizational performance, and achieve financial goals (Reed and Defillipi, 1990; Slotegraaf and Dickson, 2004; Vorhies and Morgan, 2005; Morgan et al., 2009; Chang et al., 2010), and converting marketing plans into concrete measures to develop organizational performance, thus increasing overall marketing effectiveness (Noble and Mokwa, 1999; Cizmar and Weber, 2000; Eisenhardt and Martin, 2000; White et al., 2003; Vorhies and Morgan, 2005; Kotler and Keller, 2012; Slater et al., 2010).
In addition, and most important, hotels are better able to enhance their MP, including the enhanced effectiveness, efficiency, and adaptability of marketing efforts (Morgan et al., 2002; Sirbel, 2012), and increased turnover, contribution margin, profit, market share, advertising and promotional share, customer penetration, loyalty, and satisfaction, brand recognition and satisfaction, purchase intention, distribution level, profitability of intermediaries, service quality, and innovativeness (Kokkinaki and Ambler, 1999; Bigne´ et al., 2001; Eusebio et al., 2006; Wu and Lu, 2012; Frösén et al., 2013). Moreover, as previously concluded, enhanced MP is a key stimulus of overall hotels’ organizational performance (Morgan et al., 2002; O’Sullivan et al., 2009; Alshourah, 2012; Wu and Lu, 2012; Mohammad et al., 2013; Mohammed et al, 2014).
5 Conclusion and Recommendations
CRM dimensions’ application in Egyptian hotels has been investigated concerning its impact on their MP, and MC, both MPC and MIC. MC, MPC, and MIC were also tested for mediating role for strengthening the causal effect of CRM application on MP.
Descriptively, all the research variables were reported to be significantly above moderate, indicating that all the procedures and practices of CRM dimensions including CO, CRMO, KM, and TCRM, in addition to MP, and MC, either MPC or MIC, are almost always applied. This is basically attributable to the inherent necessity of the application of those procedures and practices in hotels, and managers’ awareness of their importance to business survival and prosperity. Consequently, those hotels are most probably expected to experience CRM-related benefits. Inferentially, hypothesized causal and mediating effects between CRM dimensions, MC, and MP have been supported, conforming to previous relevant studies, and proving that researchers’ choice of CRM dimensions and relevant practices, MP parameters, and MC aspects were the most reliable to be meaningfully correlated together.
Thus, in order to maximize MP, hotels’ policies and managers have to ensure the best utilization of their CRM and provide sound MC. For CRM application to be fruitful, managers should first, and most critical, enhance their CO through directing business objectives towards customer satisfaction, understanding, monitoring and assessing the level of commitment to customer needs and their satisfaction, increasing customers’ value, personalizing products and services, and providing good after-sales service. CRMO has to be supported through committing CRM-related expertise and resources to manage customer relationship, designing and directing the hotel structure, managers’ and employees’ attitudes towards acquiring and deepening customer relationships and satisfaction, assessing staff in terms of serving and meeting customer needs.
KM should be developed through accumulating and learning from guest history information, enabling ongoing, two-way communication with key customers through various channels. TCRM should be made effective through employing skillful technical staff to provide technical support for building customer relationships, utilizing adequate hardware and CRM-related software (i.e. Salesforce, Oracle, SAP, Zoho, and Microsoft dynamics 365), and integrating hotel's information systems across different functional areas.
Moreover, MPC should be built up through developing superior marketing planning skills, setting clear marketing goals, developing creative marketing strategies, and segmenting and targeting market effectively. MIC should also be improved through allocating marketing resources to implement marketing strategies effectively, delivering marketing programs effectively, translating general marketing strategies into detailed, specific actions and tasks, and monitoring and evaluating the outcomes of marketing strategies.
Finally, many possible ideas for future researches can be derived, mainly considering the hypothesized correlations in different settings than those of the current research. That is, the current study’s limitations are that the field study has been conducted in one city, Sharm El-Sheikh, where the prevailing business type is resort hotels. Thus, future studies should examine CRM in other cities’ hotels in order to draw more meaningful generalizations concerning commercial city hotels rather than just vacation resorts. Besides, the current research has drawn responses only from managers. Further research attempts should aim at investigating those variables, and others, using a sample of hotel guests so as to validate current study’s results. Additionally, the hospitality establishments are mostly in need to develop standard operating procedures for various strategic and operational areas of interest. Researchers are thus urged to work on developing a standardized instrument for applying CRM, making available MPC and MIC, and measuring MP.
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Charalampia AgaliotouDepartment of Interior Architecture, Decorative Arts and Design, TEI of Athens, Greece
Loukia MarthaDepartment of Interior Architecture, Decorative Arts and Design, TEI of Athens, Greece
Department of Interior Architecture, Decorative Arts and Design, TEI of Athens, Greece
This paper aims at investigating the contribution of cultural Festivals hosted in historical venues (archaeological or industrial sites) as a tourist policy instrument. More specifically, the focus is set on examining the relationship between cultural activities and the host venues in Europe as a key driver for the development of international cultural tourism.
The perception of cultural activities as expressions of aesthetic form will be examined through a brief review of international festivals. Most common aesthetic forms include theatre, performance, interventions, events taking place in urban, industrial, archaeological or historical sites. Various performances and events are linked to the architectural and natural landscape, forming living experiences, functioning as a lever for the development of alternative forms of tourism.
Key Words: cultural festival, heritage tourism, industrial heritage
This paper seeks to examine the contribution of cultural festivals taking place in architectural heritage sites to the promotion and protection of the sites themselves, and the substantial to growth of cultural tourism, following tactics of sustainable tourism development. Tourist exploitation of the area is demanded as its characteristics are largely incompatible with the one-dimensional model of promotion of mass tourism. Specifically, since the 1960s, the tourism model of 4S (sea, sand, sun, sex), which is constantly being addressed to the same type of tourist-consumer, is being used without much consideration of the new requirements of tourism. As this model tends to saturate, new innovative approaches to designing a country's tourism promotion are needed (Galanos, 2013).
2 Cultural festival and policies
A historiographical approach to festivals is the differentiation of the role of artistic festivals in relation to cultural policy. In the beginning, festivals aimed at collective entertainment. Since 1980 there has been a change as artistic festivals turn into an industry and prevail in modern societies. This spread of festivals has had an impact on economic, political, social and cultural fields. Then the model moved to the consumption of experience. Cultural strategies have led to an economy of experience.
Festivals include a series of connected events and are differentiated from those that include only one cultural event, such as a play or a concert (Falassi, 1987). At the same time, the audience participates in some type of action related to the features of the festival as a member of a wider community and finally participates during holidays and this is not characterized as a part of everyday life such as watching a play (Macmillan, 2015).
Festivals also create identity and help communities to unite by providing social stability. At the same time, they encourage artistic production and activity, and they attract more and more artists to create. They are linked to the place where they happen, resulting in festival cities, meaning cities that have created a new identity (re-branding) and have been re-positioned (re-position) in relation to international competition of cities as a tourist destination.
Urban policy making can employ the cultural festival for the development of urban tourism. In recent years, cultural festivals have been greatly multiplied by providing multiple benefits to host cities. The organizations responsible for them are seeking to compete with other festivals, while retaining their artistic features. At the same time, however, festivals have to evolve in terms of their characteristics and content, as they risk losing their originality and consequently their competitiveness. This development should be determined according to a policy framework of the festival by the organizations so that it can be determined in advance how they evolve (Quinn, 2010).
The rapid development of festivals in recent decades has turned them from cultural events to cultural spectacles. As the production of a new type of festival was difficult to start, many cities adopted the serial reproduction solution. This has led to a reduction in creativity and innovation in terms of outcome. At the same time, the festivals which originated from the copying other successful festivals, without adaptation, were less and less related to the specific features of the site were they took place, such as the architectural cultural heritage and the way of life.
Public policy related to the festival is usually related to tourism, place-marketing and economic development and secondly to cultural issues (Getz, 2009). For sustainable tourism development through the festival, a policy must be followed that takes into account the stakeholders and society, while at the same time striving to meet their equal needs. This process is particularly complex as each stakeholder has different motivations, needs, aspirations and behaviours in relation to the development and realization and management of the festivals (Dredge and Whitford, 2010).
2.1 Heritage tourism hybridisation
The classic model of cultural tourism management was based on the promotion and preservation of cultural heritage. Art as a different sector contributes to the reinforcement and promotion of tourism through cultural and artistic events. The conciliation of the two sectors to the production of a hybrid product of art and cultural heritage is an important prospect for the development of heritage tourism. The two areas present an incompatibility as the cultural heritage refers to the past and tradition, while the arts look forward to the future and to innovation (Della Lucia et al., 2016). The hybridisation of art and cultural heritage has created scepticism about its necessity and its implementation, as there are very successful policy models that focus on the traditional model of cultural heritage promotion, such as several Italian cities (Center for Strategy and Evaluation Services, 2010). For the best exploitation of cultural heritage, there is also a need for change in the social behaviour of local communities so that they interact with visitors to create cultural experiences.
According to Della Lucia et al., 2017, the consideration of a hybrid art and cultural heritage model must take into account the stakeholder parameter. This creates a scheme of complete or non complete hybridisation with parallel matching of high involvement either of the public body or other parties (stakeholders). Four different urban development models occur from this model. Public patronage, a top-down practice that corresponds to the classical model with high involvement of the public body in funding for the preservation of the cultural heritage, but also in policy-making in an interventionist way, without taking advantage of modern arts, resulting in low heritage hybridisation. According to this model, urban tourism adopts traditional management models. Keeping the involvement of heritage hybridisation low, but giving the stakeholders power, leads to the model of managerial innovation. According to this, organizational efficiency and promotion are achieved, but only traditional cultural tourism models benefit from that. If the previous model with a high stakeholder role includes heritage hybridisation, the socio-cultural innovation model emerges. According to this, culture is the driving force behind urban economic development and exploits partnerships between private and public sectors. It includes artistic festivals and hybrid artistic models that are related to the local area. As there is no strong involvement of the public body, it is difficult to develop tourism development policy centrally. Finally, the framework proposes a public driven regeneration model that adopts high hybridisation with a strong public role. According to this model, the design of cultural policy is carried out centrally and supported by the state with funding. It retains from its previous model its relationship with artistic festivals (Della Lucia et al., 2017).
The above models are schematic and aim to provide a structure that describes the role of the parties involved in the design and the degrees of freedom of mixing and engaging art in the cultural heritage. The choice by each party or community may be conscious, or it can emerge as a socio-economic process. Adopting a model and having a successful outcome implies the existence of both conditions and circumstances.
2.2 Industrial heritage tourism
The de-industrialisation of the western world, as a result of the collapse of the model of the accumulation economy, has caused most of the industrial plants to fall into disuse. Buildings are part of the industrial cultural heritage of cities as the reason for being there is to nostalgically remind them of their industrial past and the way of life that this entails. Each region has developed into different industrial sectors and therefore the industrial heritage of each city stands out from the others, creating a different narration of the history of the place and a different scenery and atmosphere of the city of aesthetics of de-industry (Hospers, 2002).
The narrative also needs the people who participated in this process, thus reviving the memory, reinforcing the sense of identity of the locals and localisation. Industrial heritage is not limited only to buildings and equipment but also to its intangible elements such as people and their stories that are the cultural value embodied in them (Firth, 2011). However, it must be kept in mind that industrial cultural heritage has not been accepted as a tourism destination despite all the efforts made by the various stakeholders. This is due to the negative image of a collapsed world as well as due to the “good old days” that do not correspond to the image of an industrial worker of survival and harsh living conditions (Hospers, 2002). Industrial cultural heritage must be seen and presented as a living heritage. The architectural environment alongside the social history of the region can be employed to overcome the concerns, producing such a content to enhance tourism promotion.
2.3 Tourism and cultural festivals
The modern consumer feels the future is uncertain due to political, economic and environmental reasons. They feel more secure in the past as they find it more authentic. Tourism uses the sense of authentic past and exploits it through the forms it is expressed and mainly promoting the cultural heritage, while improving the tourism product. Authenticity has been examined in a variety of ways and focuses on the following categories: Firstly, authentic is considered what has unaltered quality and refers to material objects. Object based authenticity is addressed throughout our study through the material cultural heritage i.e. the architectural heritage. Tourism relies heavily on tourists having new experiences, so the degree of authenticity of the experiences determines the quality of the tourism product. Experience based authenticity examines the engagement of the visitor's experience, whether it is real or based on his or her identity and feelings. The sense of authenticity is conveyed by the experience of the visitor, in the way he perceives himself as it strengthens the sense of personal authenticity. Through this process the visitor discovers elements of his identity that he can not experience in everyday life (Wang, 1999), (Brown, 2013). Experience based authenticity is sought in the activities of cultural festivals and how they are experienced, especially in interactive activities. The content of the projects can reinforce the sense of authenticity through the authenticity that results from acts that we have not yet experienced but will emerge in the future. In potential based authenticity, things are authentic now because of the future reality that is presented (Cohen-Aharoni, 2017).
3 The Avignon Festival
At this point there will be a detailed description of the Avignon Festival, as an optimal example that significantly contributed in culture, as well as in the maintenance of cultural heritage and tourism development. Avignon city, capital of the Vaucluse province, is located in the Provence district, in Southern France (map), built on the left side of the Rhone river. It has 92454 inhabitants (Kurt Salmon consulting, 2010) and is known for its architectural heritage as well as its cultural festival. Its significant architectural heritage was officially recognised as a World Heritage Site by UNESCO: 150 buildings, most of which are protected by UNESCO. In 2000, Avignon was selected as Europe’s cultural capital. Avignon’s cultural festival, held annually every July, is one of the biggest performing arts festivals in the world.
The Festival d'Avignon was created in 1947 by Jean Vilar. Since the first organisation of the Festival in September 1947, its program has include less known works of the international repertoire and modern texts. Four important phases of its evolution have been distinguished to date.
· From 1947 to 1963, for 17 consecutive years, the festival is organized by the same group with the same subjects and in the same place, the Grand Chapel of the Palais des papes.
· From 1964 to 1979, under particular political developments, (May 1968) young people, new groups, new content: Cinema, music theatre and dance enrich the content of the festival. New venues of cultural heritage host the festival. Chartreuse de Villeneuve lez Avignon, an old monastery of the twentieth century, becomes an international centre of research and creativity (CIRCA), where concerts and shows are hosted.
· From 1980 to 2003, a new period is taking place, inviting new generations of artists from around the world. Discussions and proposals about new modern pioneering forms of arts are being made. In 2003 the festival is being cancelled due to the big strikes.
· From 2004 to 2013, the festival aims at developing relationships between artistic events, place, local partners and the general public. The time of artistic activities is extended and now happen throughout the year. This enhances the cultural character of the festival by developing cultural links with the rest of Europe and the rest of the world (“Festival d’Avignon”, n.d.).
Through the festival, Avignon is now a cultural crossroads, open to all arts, with an emphasis on forefront, debates which appeal equally to all contributors: artists, creators, spectators. Everyone is invited to experience discovery, reflection of emotions. As part of the policy implemented to amplify festivals and local communities, incentives are being given to develop all arts. Communication networks are established between the University, the Artists, the citizens and public and private sector (Kurt Salmon consulting, 2010).
The festival is hosted in places of cultural heritage:
· Cour d'honneur du Palais des papes
· Cloître des Carmes
· Cloître des Célestins
· Opéra Grand Avignon
· La FabricA
· Gymnase du lycée Aubanel
· Cour du lycée Saint-Joseph
· Chapelle des Pénitents blancs
· Cour du collège Vernet
· Maison Jean Vilar
· Cloître Saint-Louis
· Jardin de la rue de Mons
· Conservatoire du Grand Avignon
· Jardin de la Vierge du lycée Saint-Joseph
· Site Louis Pasteur Supramuros de l’Université d’Avignon et des Pays de Vaucluse
· Basilique métropolitaine Notre-Dame des Doms
· Église de Roquemaure
· Collégiale Saint-Didier
· Cour du château de Vacqueyras
· Carrière de Boulbon
· Hôtel de La Mirande
· Jardins de l'Université d'Avignon et des Pays de Vaucluse
When it comes to tourism, the Avignon region is considered to be the first in attracting French tourists, accounting for 12.5% of the tourist market and second in attracting tourists outside France. Around 4,000,000 tourists visit the area annually (Kurt Salmon consulting, 2010).
The most important attraction for tourists is the international cultural festival, which with over 50 years of operation, has managed to make Avignon world-famous, increasing the number of tourists. The operation of the festival has attracted a permanent establishment of the largest number of theatres per inhabitant in France. In the city, 19 theatrical groups, a theatre opera house, a school of fine arts and a music school have been established on a permanent basis. There are 140 subsidized cultural clubs and cultural events throughout the year. The city is transformed into an international Market of European Live Show. Tourism and Culture are directly connected to Avignon.
Typical features of Avignon's cultural tourism are: The high proportion of international tourists, great coverage of tourist accommodation needs and City short break practice outside the summer season. The attractiveness of the monuments and cultural activities of the Festival have contributed to the significant development of tourism alongside culture, offering multiple benefits to the local economy and quality of life.
4 Art festival proposal, conclusion
Subsequently, we will then turn to the case of Eleusis. Today, Eleusis is a small town of about 30,000 inhabitants. It is a city of the Prefecture of Attica and headquarters of the Regional Unity of Western Attica, 20 kilometres north-west of the city centre of Athens.
Its name derives from the word "helefsis" (έλευσις), meaning place of arrival, arrival, presence. It is known for its long history of ancient and industrial too. In ancient times, for 2000 years, Eleusis has been one of the five sacred cities of Ancient Greece. Eleusis is known for the great tragic poet Aeschylus, for its relationship with the goddess Demeter and the myth of Demeter and Persephone and the Eleusinian mysteries, which attracted pilgrims from all over the known world. Today, an important archaeological site is preserved.
Since the 1880s some major industries begun to be installed in the area of Eleusis until 1971. Nowadays they are inactive, leaving empty remarkable shells that make up its architectural historical industrial heritage. This zone extends to the coastal front of the city, occupying spaces of the city and also entering its archaeological site (Belavilas et al., 2011).
Eleusis is also known for the Aeschylus Festival, which since 1975 has been housed in the industrial venues of the city. The festival lasts for a month and takes place every September, at the same time as the Eleusinian Mysteries took place in ancient times. It always happens in the same places, with the same goals and organization. Today however, Eleusis is not particularly a tourist destination.
We believe that the Aeschylus Festival can help the city and the entire region of Western Attica, contributing significantly to the development of cultural tourism. We propose the correct planning of the festival and its exploitation according to modern hybrid models, as a tool for strengthening and substantially developing tourism.
The existing promotion policy follows the public patronage model, where the management of cultural heritage and policy-making is determined by the state, while modern arts are not used in combination and therefore there is low heritage hybridisation. The existence of the Aeschylus Festival in its present form does not guarantee hybridity. In response to the problem, it is proposed to adopt the public driven regeneration model, which adds high hybridisation without changing the status of the role of the public operator. The reason is that a great deal of involvement of stakeholders, even though they are models that attract innovation, does not certify that local stakeholders will be able to respond directly to such a change. The intention is for Eleusis to appeal both to the Greek public and to an international audience which will bring increasing benefits to the local community.
The hybrid socio-cultural innovation model requires the active involvement not only of the stakeholders but of the whole society by changing social behaviour so that interaction with the visitors occurs. It implies a dynamic within society, a society with increased cultural reflexes that supports and reinforces actions around culture.
The proposal for public driven regeneration develops the current model of choosing a tourism policy from the central administration and makes it easy to move from the previous situation. Employing a hybridisation model enhances the sense of authenticity of the visitors. Until now, the approach was based mainly on object based authenticity through architectural cultural heritage. Enhancing the sense of personal authenticity will come through active participation in the actions taking place at the festival, which makes it necessary to develop artistic events through modern art forms, and also to interact with the local population. The particularity of the city of Eleusis has to be emphasized as it has an urban industrial cultural heritage. Experience has shown that these sites are suitable for their exploitation in relation to the arts and culture. The posible negative image of the declining industries can take on a new meaning associated with the arts, while, at the same time, creating a sense of nostalgia for the productive Eleusis.
Consequently, through such a prospect of evolution of the Aeschylus festival, the archaeological, industrial heritage and art will be brought into being as a whole, with an emphasis on the contemporary art of all forms, experimentation with the forefront of modern technology and the interplay. The cooperation of the Aeschylus Festival with the University Institutions located in Attica is considered necessary, strengthening and expanding the Festival's institution with research, artistic creation, creating new generations of artists. At the same time, the festival must work with all local partners (local clubs, businesses, etc.) and the general public with the aim of active citizens, exploitation of experiences, strengthening of culture and the local economy. Extroversion, communication and collaboration link the festival with international festivals, aiming at exchanging experiences and creating cultural ties.
The exploitation of the Aeschylus Festival through this type of development and progress wil lead to the enhancement of cultural tourism. A major challenge for Eleusis is its prospect as a cultural capital of Europe in 2021. Within this framework, a major concern is the upgrading of the Aeschylus Festival, which can contribute to the realization of the objectives of the cultural capital. (Eleusis 2021, 2016).
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