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

 

 

ABSTRACT

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

 

1    INTRODUCTION 

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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