Abstract
This paper is on the topic of how brand image influences customer loyalty and satisfaction in the Taipei Hotel industry. The first section of this paper will discuss the background study on this topic with the comprehensive analysis related to the topic. The second section of this paper will discuss the purpose of this study, rationale and research questions related the topic. The third section of this paper will describe the methodology used to answer these questions and limitations in this study. The final section of this paper is the action plan that will summarize all topics discussed in this paper.
Background
Taiwan is a beautiful island located at the western part of the Pacific Ocean. It is easy to access from other cities and within 1-3 hours with airplane rides from Hong Kong, Shanghai, Tokyo, Seoul, Peking and Tokyo. Apart from its beautiful scenery, Taiwan also has diverse culture and gourmet. The Taiwanese government is highly active and heavily motivated for promoting development of leisure and tourism industry. The leisure and tourism industry belongs to service industry and has a significant contribution to the GDP. This is the reason why the Taiwan government promoting tourism projects for enhancing economic development of Taiwan. Accommodation for tourists is the most important and basic need for them. Therefore, hotel management and development has become a crucial issue in the hotel industry (Wang. et al). At present, tourist hotels confront the fierce competition in the external market and the threat from unstable manpower. To maintain their competitive advantage, it is important to stabilize the backbone elements such as the employees in the business department (Wu, 2006).
With the rapid growth of tourism and hospitality industry in Taiwan has led to increase in demand for labour. In response to this increasing demand, there are many tourism and hospitality programs in Taipei to keep pace with the increasing demand of the industry (Lu, 1999). Since five day work-week was initiated in Taipei, in 2003, tourism has seen immense growth. Further improvements in the transportation infrastructure make things attractive, with many private B&Bs opening all across the island. Since 2008, the three-direct transport links (postal services, transport, and trade) has become the formal target, with many direct flights available between Taipei and China. This is advantageous for more than 1 million people from Taipei, who live or work in semi-permanent basis, in the People Republic of China (PRC). This makes travelling to the PRC easier and much more convenient for tourists in Taipei than in past years (Hou, 2011). A study has shown that main determinants of satisfaction of hotel guest are the employee behaviour, timeliness and cleanliness. Also, staff quality, value and room qualities are the biggest factors regarding hotels that determine traveller’s satisfaction. Guest Complement Cards get usually distributed in all hotel rooms, a reception desk or other visible places. However, studies have revealed that many hotel chains use the guest satisfaction evaluation methods on the basis of inadequate practices for making complex and important managerial decisions (Holjevac, Marković & Raspor).
Loyalty can be developed over a length of time from consistent meeting record and sometimes by exceeding the customer’s expectations. In some cases, customer loyalty may be achieved by offering quality products with a guarantee or via free offers, low interest rates on financing, coupons, extended warranties, high value trade-ins, rebates, and through other rewards and certain incentive programs. Ultimate goal is developing happier customers who return for bookings again and can persuade others for using hotel next time they visit. This helped in making great profitability and cost savings for the company by keeping the current customers and attracting many new ones along with keeping the shareholders happy (Kotler & Gertner, 1996). Loyal customers are not swayed easily with price inducement from direct competitors, and they can usually purchase more in comparison to less loyal customers (Poku, Zakari & Soali, 2013).
Geronikolas (2012) has reported that five factors of the hotel industry that drive customers away are perceived rude and untrained staff, guest’s desire of experiencing new places, lack of cleanliness in the hotel rooms, premises or within the restaurants, price, value for money and affordability. Overall, food and beverages offered in hotels appear as the most relevant hotel tangibles and seems to be becoming highly significant in creating loyal and satisfied customer base and driving most dissatisfied customers away. Hotel industry in particular where service depends on building long-term relationship needs to focus on maintaining customer’s loyalty. In this way, loyalty is highly influenced with the service quality. As such hotels, often invest in management of their relations with customers and maintenance of their quality for ensuring that customers who are not sure about their loyalty continue remaining loyal in the long term (Rousan, Ramzi & Mohamed, 2010). Burns and Holden (1995) were the earliest proponents of tourism becoming one of the biggest global export industries in the near future.
Taipei hotel industry faces immense environmental challenges in coming years. For instance, with soaring popularity of hot spring lodges and leisure farming has increased competition in the city’s hotel industry, and some five-star luxury international hotels have changed their strategies better to compete in the current environment (Lee, Yang & Chen, 2013). Impact of tourist perception, satisfaction on loyalty and destination image has been one of the most researched topics in the tourism category. It is highly important for determining destination image at the same time taking decisions for the strategic marketing of these tourism destinations (Rajesh, 2013). As it is assumed that the result will be a positive image of the destination, loyalty to the tourist destinations and customer satisfaction is felt by the tourists and such variables (Coban, 2012).
Purpose of the study
The purpose of this paper is exploring the brand image affects customer satisfaction and customer loyalty in the case of Taipei hotel industry. To perform this case analysis, a set of five questions have been developed to analyze the impact. The hotel industry contributes highly to development and growth of Taipei. However, the main challenge is meeting and exceeding customers’ expectations with high quality service delivery for gaining customer loyalty that is the core of every business. The paper aims at exploring the interrelations between brand equity component of brand image and customer loyalty and customer satisfaction. One of the most important contemporary challenges of the hotel industry is providing customer service quality for satisfaction and maintaining their customer base and increasing the loyalty.
Loyalty is maintained by offering a competitive or differentiated product and retaining their customers. Despite the highly focused academic interest in the customer satisfaction and customer loyalty, this study would contribute by adding to the Taipei hostel industry. Also, there is no study available at present that has explored the topic of how brand image affects customer satisfaction and customer loyalty in the hotel industry based in Taipei, the capital city of Taiwan. Customers get satisfied with getting rooms and suites in big name hotels and tend remain loyal to the hotels where they have had an exceptional experience in past. It is imperative in this study to explore how brand name hotels can work effectively and efficiently in the city of Taipei to gain customer loyalty and satisfaction. This research is limited to only hotel industry based out of Taipei, and since the overall tourists had not reached 5 million until 2008, government still endeavours in pushing and promoting tourism in Taipei. Since the beginning of 2010, the relationship between mainland China and Taiwan has seen great improvement as there are many tourists coming over to visit the capital city of Taiwan.
Rationale
Hotel industry cannot be a success without presence of loyal customers. Thus, brand image is the essential factor in helping to retain customer. Brand image also plays a crucial role in satisfaction of the present customers. The perception of customer regarding the features of product and service offered at hotels is influenced by their perception about the brand and it’s branding. The main aim of brand and product management is building stronger brand image that would help in generating huge short-term and long-term profit for the hotels. So brand image has a positive impact on the customer loyalty and their commitment towards market offerings (Malik, Ghafoor & Iqbal, 2012).
Loyalty of customers critically assesses the service standards provided by the hotel industry confirming the customer’s approval of the quality of service may outcome into better brand image of the hotel industry leading to growth in terms of profit. Hotel industry recognizes the superior service quality is one of the main factors within their control that may lead to adding value leading into customer retention and loyalty. Good brand image in addition to the quality of service are the key to the ability of hotels to differentiate them from their competitors and to retain their loyal customers by gaining they’re loyalty (Schulz & Omweri, 2012).
Considering the relationship between customer and a corporation, there seems to be a strong relationship between brand image and loyalty. Brand image plays an important role in explaining any future loyalty. The effect of brand image is by far higher in comparison to another brand equity component while choosing hotels. Brand image is related positively with customer satisfaction and loyalty. Additionally, brand image and customer satisfaction with the hotel service significantly explains the variance in the customer loyalty. Brand image in relation to other factors like satisfaction has a larger effect on customer’s loyalty while customer satisfaction has limited to no significant impact on the loyalty. Brand image has certain influence on customer loyalty, while hotel’s reputation has broader influence on perception of value and customer loyalty (Hanzaee & Farsani, 2011)
Research questions
Question 1: Discover the significant relationship between corporate image and customer loyalty?
Question 2: Discover the significant relationship between corporate image and customer satisfaction? Question 3: Discover the significant relationship between brand image and overall service quality?
Question 4: Discover the significant relationship between customer satisfaction and customer loyalty?
A questionnaire survey can be used to obtain the results of the relationship between brand image and customer satisfaction and customer loyalty. A pilot study on the basis of 100 questionnaires from the regular hotel visitors in the city of Taipei can help in achieving the results of this study. There is no change needs in understanding the difference between these factors while taking the survey in the city of Taipei. When consumers get satisfied with the product/services offered to them, they are likely to recommend it to others, are less likely to switch their use to an alternative brand, and are more likely to repeat their purchase. Empirical evidence from the hotel studies has confirmed that satisfaction is strongly influenced from customer loyalty intentions such as their intention to recommend, intention to re-purchase and intention of revisiting the store.
Proposed methodology
This study is the analysis of the attributes, components and factors that involve brand image affect on customer satisfaction and loyalty in the city of Taipei in its hotel industry. This proposed study can be modified for allowing the measurement of tourist loyalty to the city of Taipei. The universal methodology basis used for this study is measuring the customer satisfaction and loyalty in the hotel industry of Taipei that depend on the brand image. This paper is based on recommendations from past studies made in a similar industry or the Taipei tourism focusing on strategic marketing topics of brand image, customer satisfaction and loyalty.
The sample for this study comprised of the customers who stayed in the hotels, in the city of Taipei. Judgemental sampling is used for specifying the sample for this study. In this method, the cases are picked that are judged as typical of the population that is targeted, assuming that judgement errors in selection tends to counterbalance each other. This study employs a survey-based method for data collection. This survey based method has several advantages particularly suitable to this research.
The main advantages are that the survey-based method collects a large amount of data regarding individual respondent at one time. Additionally, survey-based method is versatile and flexible for data collection. Survey based method can help in gathering large sample of data in efficient and quick manner. In addition, effective survey design may provide the information regarding the respondent’s attitudes, beliefs and motives; in this case it is the measure of the perceptions of hotel guests. There are several survey-based methods that help in the collection of data like personal interviews, fax surveys, telephone interviews, mail surveys, online surveys and self-administered questionnaires.
This method is deemed for collection of data from various hotels at different locations in a relatively short period. In addition, with hotel guests seeking comfort and privacy during their stay, a use of this period has allowed guests to complete a questionnaire when they feel it is time. Although it had many advantages, the self-administered questionnaire has some drawbacks, in terms of self reporting. A researcher cannot control the extent of accuracy in the responses given by them. Researcher would need the use of scales that are already tested as indicators for overcoming the viability problem.
There are some limitations that are directly related to this research specifically the issue of time constraint in getting the research done on the basis of changing industry in the city of Taipei. In addition to this, open ended research can have low response rate in comparison to a well formulated and straight forward close ended questionnaire. The hotel management can be reluctant to disclose the information about their customers let alone allow the researcher to conduct any face-face interview for the process of research in this case. Finally, open ended nature of the survey can also be another limitation of this research as customer might be reluctant to spend their time on a survey while vacationing the city of Taipei.
The Statistical Package for the Social Sciences program (SPSS) can be used for analyzing the data collected from the questionnaire. Descriptive statistics can be applied for the purpose of computing; ANOVA, the t test, standard deviations, and Mann-Whitney test can be tabulated and analyzed. After analysis of the survey results, interpretation of data helps in drawing conclusions from the findings of the study. The conclusions can be related to the research objectives and might be formulated on the basis of the statistical applications employed. Quality of analysis gets by how well data gets prepared and converted suitable for analysis. Before performing the statistical analysis for testing hypotheses, preliminary data analysis can be done for assessing any missing data, checking for SEM assumptions (multicolinierity, normality and outliers data) and assessing the non-response bias. Additionally, descriptive statistics analysis can be conducted on the construction of variables.
Action plan
• Date of Literature Review Completed
• Date of Collecting Data Completed.
• Date of Analyzing Data Completed.
• Date of First Complete Draft to Front-Line Tutor.
• Date of Revisions Completed.
• Date of Final Submission Deadline.
Conclusion
The present study aimed at affect brand image has on customer loyalty and satisfaction in the hotel industry of Taipei. The results are focused on proving that brand image has the significant impact on customer satisfaction and loyalty and research methodology of customer survey visiting Taipei based hotels has been used to prove the relationship. Service quality provided by hotels enhances the customer loyalty. Additionally, customer loyalty and service quality are significantly related to the hotel’s brand image. Identification of benefits that come with brand image helps in establishing effective marketing strategies. It is also very crucial to understand the dimensions of brand image judgments from the customer's point of view, and whether image dimensions are in accordance with the perceptions, goals, expectations and needs of customers. The customer loyalty increases their perception of the hotel’s brand image. The open ended survey can help in getting broader ideas about how customers perceive brand image as, if it affects their satisfaction and loyalty intentions towards the hotels they are visiting. In addition, this survey is also limited as it focuses only on Taipei based hotel industry and the perception of customers visiting the city. It also reduces the response rate from customers as open ended surveys are time-consuming and customers visiting Taipei for holiday would rarely take the time out for answering questions.
References
Wang, G. L., Lee, Y. J., Wu, M. F., Chang, L. Y., & Wei, S. C. (n.d.). The Study of Hotel Industry Development in Taiwan. Retrieved March 22, 2014, from http://ftp://nas.takming.edu.tw/upload/SchTarget/0006485/rs0203_ID262%20%20Hotel%20Paper.pdf
WU, T. F., TSAI, M. H., FEY, Y. H., & WU, R. T. (2006). A Study of the Relationship between Manager' s Leadership Style and Organizational Commitment in Taiwan' s International Tourist Hotels. Asian Journal of Management and Humanity Sciences, 1(3), 434-452.
Lu, Y. W. (1999, December). IMPORTANT SKILLS FOR TAIWANESE HOSPITALITY AND TOURISM. Retrieved March 22, 2014, from http://www2.uwstout.edu/content/lib/thesis/1999/1999lu.pdf
Hou, J. W. (2011, November). Impact of the Global Economic Crisis on Taipei,China’s Industrial Structure and Firm Activity. Retrieved March 22, 2014, from http://www.adbi.org/files/2011.11.22.wp323.impact.gec.taipei.china.industrial.structure.firm.pdf
Holjevac, I. A., Marković , S., & Raspor, S. (n.d.). CUSTOMER SATISFACTION MEASUREMENT IN HOTEL INDUSTRY: CONTENT ANALYSIS STUDY. Retrieved March 22, 2014, from https://bib.irb.hr/datoteka/397335.PAP039.pdf
Barsky, J. D., & Huxley, S. J. (1992). A Customer-Survey Tool: Using the Quality Sample. The Cornell Hotel and Restaurant Administration Quarterly, 33(6), 18-25.
Kotler, P. and Gertner, D. (2002). Country as Brand, Product and Beyond: A Place Marketing and Brand Management Perspective. Journal of Brand Management. 4(13). 249-261 Poku, K, Zakari, M & Soali, A. Impact of Service Quality on Customer Loyalty in the Hotel
Industry: An Empirical Study from Ghana. International Review of Management and Business Research. 2(2). 600-609
Rousan, Ramzi, M & Mohamed, B. (2010). Customer Loyalty and the Impacts of
Service Quality: The Case of Five Star Hotels in Jordan. International Journal of Human and Social Sciences. 5(13). 886-892 Geronikolas, N. (2012). Customer Defects in the Hotel Industry: The Five (5) Most Common Factors Driving Business Away. Retrieved 22 March 2014 from, http://nikgeronikolas.hubpages.com/hub/Customer-Defects-in-the-Hotel-Industry-The-Five-5-most-important-factors-driving-business-away
Burns, P.M. and Holden, A. (1995), Tourism a New Perspective, New York: Prentice Hall
Lee, Yang & Chen. (2013). Quality Dimension for Elderly Service in Taiwan Hotel
Industry. International Journal of Academic Research in Business and Social Sciences. 3(3), 80-97
Coban, S. (2012). The Effects of the Image of Destination on Tourist Satisfaction and Loyalty: The Case of Cappadocia. European Journal of Social Science, 29(2), 222-232
Rajesh, R. (2013). Impact of Tourist Perceptions, Destination Image and Tourist Satisfaction on Destination Loyalty: A Conceptual Model. Revista de Turismo y Patrimonio Cultural. 11(3), 67-78
Malik M.E., Ghafoor M.M. & Iqbal H. K. Impact of Brand Image, Service Quality and price on customer satisfaction in Pakistan Telecommunication sector. International Journal of Business and Social Science. 3(23), 123-129 Schulz, R.N. & Omweri, J.N. (2012). The Effects of Business Image on Customer Retention in Hotels in Eldoret, Kenya. European Journal of Business and Management. 4(18), 185-193
Hanzaee K.H. & Farsani F.T. (2011). The Effects of Brand Image and Perceived Public Relation on Customer Loyalty. World Applied Sciences Journal. 13 (2), 277-286
