Managing Customer Relations in Tourism Sector
Strategies to Improve Customers Relation
Customer relationship management is a very crucial and significant task for each organization of tourism and hospitality industry. Different communication channels and strategies of an organization play an important role in making effective relations with customers. The current research study is based on managing customer relations in tourism and hospitality. For attaining the research objectives, study focuses on effective ways and communication channels of customer care. Further it also discusses the importance of teamwork, motivation and leadership styles in managing relations with customers. Marketing process of organization also affects the customer relationship management (Harrison, 2006). So, study includes role and importance of promotional mix strategies, online and social media advertising for effective customer relationship management of a company. In addition, investigation also describes the customer’s decision making process and its impact on customer relationship. Along with this, legal environment of the country and its impact on customer interface are also described in the following paragraph of the Instant Assignment Help UAE report.
The current research is based on the Starbucks which is one of the most leading organizations of hospitality. It has large number of coffee houses in all over the world which attracts large number of tourists. Further, it uses different marketing techniques and strategies to improve its relations with customers.
Starbucks not only stands for a cup of coffee but also it provides lots of high quality products and services to its customers. Its major product is coffee but it has customized and expanded its product line by different seasonal products such as hot and beverage, accessories and equipments relevant to coffee, complementary food items with its major product and tea, etc. Along with this, Starbucks also offers non food products such as coffee mugs (Boo and Bernick, 2013). Further Starbucks offers high quality, quick and friendly service to their customers. It presents those products and services which is required for that particular customers. Along with this, it provides communication services to customer about the updates of their new and existing products.
Starbucks has followed a particular quality table in which it provides appropriate products and services to satisfy the consumer’s actual needs and requirements. Different customers have different needs of coffee products such as fresh, hot, cold, flavoured, gourmet dark and decaffeinated coffees (Donohue, 2007). In addition, different customers require coffee with low-fat and organic milk. Along with this, needs and requirements of coffee products and services are also associated with the additional services for example; some customer require quick and friendly services of coffee houses of Starbucks and music playing in the store, etc. Thus, assessment of customer’s needs and requirement shows that different customers have distinct desires to satisfying their actual needs (Laesser and Finsterwalder, 2013).
Sometimes different customers have distinct need so, for maintaining effective relationship with both types of customer Starbucks needs to advice them. For example, some professional customer wants peaceful environment and soft music and some young customers required loud music at coffee house of Starbucks. In this situation, organization needs to advice both customers to listen to music CD’s of Starbucks (Paryani, 2011). This strategy will help in maintaining effective relation with both customers of the company.
Stakeholder plays an important role in success of any organization of hospitality industry. Major importance of liaising with all stakeholders of Starbucks are describing as under:
Employees are internal stakeholders of the organization. If Starbucks maintains effective relationship with all workers then it enhances quality of products and services of the company which help in retaining new and existing customers (Altinay and Paraskevas, 2008).Effective communication with shareholders facilitates appropriate source of funds which helps in increasing the manufacturing capability of the organization. It helps in managing demand and supply of the coffee as per the requirement of customers.Liaising with customers of the company is significant for analysing needs and requirements of customers for particular products and services. It helps Starbucks in producing customized products which leads to the high and strong customer care services. Communication with government assists in maintaining the legal matters of the company. Effective liaising with suppliers provides raw material with high quality and on appropriate time and quantity (Mullins, 2010).
There are different types of communication for an organization and Starbucks can use distinct methods for making effective communication with stakeholders.
Starbucks uses verbal and written communication methods for maintaining effective communication with each stakeholder of the company. For verbal communication organization uses different audio, video and various types of advertisement on different communication channels such as television, radio, internet and different social networking sites. All these tools of verbal communication include all required information of major products and services of Starbucks. Along with this, for maintaining effective customer relationship organization also comprises significant information about customized coffee products and discount offers of the company (Topolosky, 2014.). Along with this, company also uses some written communication with different stakeholders. Regarding this, Starbucks uses the techniques of direct mails and posters. Direct mails help Starbucks in maintaining effective communication with loyal customers, suppliers, employees and shareholders of the company.
Semantic barriers can occur in case of developing a misunderstanding about the Starbucks’s communication message. For example, if organization uses some wrong message for their coffee products which includes some abusive words, un-clarified assumptions and information about faulty transaction. It creates semantic barriers for Starbucks. On other hand, if company does not pay attention on customer’s requirements and their culture and beliefs then it creates psychological barriers for organization. Similarly, if company follows some inappropriate policies and regulations, then it develops organizational barriers for Starbucks (4 Different Types of Barriers to Effective Communication, 2014). Sometimes some barriers are associated with the status and characteristics of sender and receiver which makes personal barriers for Starbucks.
Starbucks has been facing different types of problems and complaints which can be resolved by appropriate measures. These are:
Lack of customer relationship management: Starbucks has been facing the problem of customer relationship management. Organization does not use effective information communication system for spreading all information about products and services to customers (Tesone, 2006). Along with this, company is not capable to obtain appropriate feedback from customers about their services. Due to this problem, company is facing the crucial problem in managing relations with customers. It can be resolved by the appropriate customer relationship management system. Starbucks can use electronic CRM system which help in communicating all information to mass population as well as online CRM will improve the ability of Starbucks to respond customer’s feedback (Brown, 2008).
Quality of the services: Due to the low quality of raw material, organization has faced the quality problem for different products and services. For maintaining high quality, organization needs to use qualitative raw material. Effective communication with supplier about the quantity, time and types of raw material help in enhancing the quality of products and services of Starbucks (Emmitt and Gorse, 2006).
Lack of high quality cocoa products: Starbucks uses cocoa seeds for producing their major products and services. These types of products affect the environment due to the availability of carbon. So, different countries have their own norms for export and import of cocoa seeds (Tsiotsou and Ratten, 2010). Thus for reducing the cost and improving the quality of cocoa seeds as well as reducing the environmental impact Starbucks organization self farmed these seeds with best farming process.
Communication have strong link with quality of the services and corporate image of the Starbucks. A good and effective communication attracts qualified and skilled staffs which help in increasing the overall performance of the company (Harrison, 2006). It leads to high quality of coffee and tea products. Consequently, strong communication with customers of the organization provides the appropriate feedback for different products and services. As per the comments of customers, Starbucks can improve their existing product line. Along with this, customer communication also helps in assessing needs and requirements of customer to Starbucks. Considering this, organization can develop customize products and services which help in improving overall quality of the merchandise. Starbucks needs to maintain effective communication with supplier about the requirements of raw material of different types and on distinct time. It also improves the production capability of Starbucks which improves the overall quality of finished goods of the organization (Donohue, 2007).
Good communication also plays an important role in developing corporate image in mind of customers of the Starbucks. If organization have good communication with customers and by which company know about the actual needs and requirements of them. In this situation organization can provide appropriate products and services which can satisfy their needs. It will help in creating trust and good corporate image in mind of customers (Topolosky, 2014). On other hand, due to the poor communication Starbucks cannot provide qualitative and satisfactory services to customers. It develops wrong corporate image about company. Including this, Starbucks uses appropriate marketing strategies for communicating different information to customers which helps in developing brand loyalty, positioning and effective corporate image in eye of all types of stakeholders which leads the effective relations with customers of the Starbucks (Emmitt and Gorse, 2006).
Presentation of the working environment plays an important role in different business operations of Starbucks.
Self presentation plays an important role for developing corporate image and customer relationship management of an organization. Self-presentation of Starbucks includes different marketing and communication strategies as well as environment of the coffee houses for customers of the company. It also includes the quality of the products and services as well as quality of services delivery to customers. Starbucks represents all information of products and services by different online channels, celebrity marketing, social media networks, etc (Altinay and Paraskevas, 2008). It is significant for developing effective communication with customers which leads to the high brand loyalty and products positioning and corporate image of organization. Along with this, it presents their products and services with high quality by using latest technological production process. It is important for retaining new and existing customers of the Starbucks. Quality of services delivery is also a most important part for Starbucks. Company uses appropriate techniques for analysing the needs and requirements of customers which helps in increasing the quality of services delivery to customers. Including this physical environment of coffee houses also comprises in the self presentation of Starbucks (Emmitt and Gorse, 2006). So, cleanliness, music, arrangements of table and chairs for seating, working staff and interiors of coffee house also influence the customer decision making process. So, thus, self presentation has positive and negative impacts on performance of the Starbucks, so, it is very important for organization.
Effective presentation of working environment is also very important for different business functions of Starbucks. For effective presentation of working environment, Starbucks has followed appropriate employment law, health and care practices for employees and suitable policies for performance appraisal (Mullins, 2010). Along with this, it provides appropriate training and development programs, flexible working hours and facilities. All such types of activities of organization attract different skilful and knowledgeable employees of the company to do work with Starbucks. Along with this, effective presentation of working environment helps in reducing the employee’s turnover and problems which leads to the high performance of the company. It also provides assistance in retaining employees of the company. All these outcomes improve the overall products quality of the products and services of the Starbucks. It influences customer to purchase coffee products of the company which leads to strong and loyal relationship with consumers (Muondo and Perkins, 2013).
Team work has their significant role in managing customer relationship of Starbucks. Customer relationship management is not such types of task which can be operated by a single person. It requires a significant involvement and positive contribution of each team member. Starbucks has assigned a particular team for managing customer relationship. Each team member has their own role for attaining objectives in effective way. Major role of team member for this task is as follows:
For effective customer relationship, Starbucks needs to form a new team. Tuchman has suggested a model for developing a new team for effective performance (Machlouzarides, 2010). As per this model team formation process at Starbucks is describing as under:
Forming: In this stage, management team of the Starbucks establishes base level for expectations and requirements. After this organization identifies similarities in different team members. In this stage all team members are agreed on common goal of customer relation and they make contact with each other (Laesser and Finsterwalder, 2013.). This stage helps in developing trust in team members. In the forming session all team members are dependent on others.
Storming: After the forming stage team formation of Starbucks move towards the storming session. In this section team member identifies power and different issues of monitoring and control. They gain new communication skills as well as they determine the requirement of resources. Further all team affiliates express their ideas and view points towards the common goal. In this stage members are more independent as compare to the previous stage.
Norming: In the stage of norming all team members are agreed on their roles and responsibilities and develop a specific process for resolving all problems (Laesser and Finsterwalder, 2013.). In this stage all decisions for customer relationship management are made through intervention and harmony building.
Performing: After the norming section all team members have clear vision and goal for improving the customer relationship of Starbucks. With effective decision making all team affiliates find appropriate solution to resolve the problem. Team members care about each other and they establish new groups with new identity (Emmitt and Gorse, 2006). They only focus on their goals. In this stage all team members tries to improve their performance.
Adjourning: After the effective performance task will be completed in this stage of the team formation. All team members feel good for their own achievement. At this stage Starbucks attain their goal of effective customer relationship management.
Employee motivation is very essential and significant in the Starbucks, some major importance are describing as under:
Herzberg has defined some factors for employee satisfaction and dissatisfaction. As per this theory Satisfaction factor for employees of Starbucks are achievements, clear roles and responsibilities, advancement, growth, work itself, appreciation, etc. Similarly, there are some dissatisfaction factors for employees of Starbucks which are company’s policies, supervision, working environment and conditions, salary, status and security and relationship with supervisions and peers (Oudan, 2007). As per this theory for motivating employees of the organization Starbucks eliminates all dissatisfaction factors. Considering this organization improves the poor and obstructive policies as well as they provide effective supervision to each employee.
It helps in improving the overall performance. Including this Starbucks also provide appropriate salary to each employee as per their roles and qualification also. They provide job security to their employees. All these factors help Starbucks in motivating employee of the company. Along with this organization also create some appropriate conditions for job satisfaction. Regarding this, organization provides opportunities for promotion and other achievements as well as appreciates them for their performance, etc (Kumar, 2010). Therefore, two factor theory of Herzberg helps Starbucks in motivating employees of the company.
Line of authority: It can be defined as chain of instruct within Starbucks that provides power to supervisors to allocate roles and responsibilities to subordinates for accomplishing different tasks. In the line of authority, supervisors have power to take decision regarding the production, sales, finance and other objectives of the star bucks. An effective relationship among line and staff authority is required for maintaining the efficiency and effectiveness in the performance of the Starbucks (Verhoef, 2003).
Need for delegation of authority at Starbucks: Delegation of authority is required at Starbucks for reducing the strong burden on the supervisors, business executives and managers of different levels.
For providing growth and development opportunities to employees. To create a team for effective customer relationship management and different other business operations (Payne and Frow, 2005).
Importance of mentoring in the induction process: In the induction process, mentoring is essential and important for each employee of the Starbucks. It helps in communicating all observations and experiences of metros within the organization which facilitates smooth working at workplace (Aaker, 2011.). It is important because it provides function training about all business operation of the Starbucks (Why Mentoring is Important, 2008). Mentoring in induction process helps new employees in dealing with criticism, disappointments, frustrations, etc. Therefore, overall mentoring is important for motivating, encouraging and guiding employees to perform all tasks effectively (Avlonitis and Indounas, 2006).
There are different reasons for arising conflicts among stakeholders and Starbucks. All these conflicts can be managed by appropriate actions. Reasons and resolutions are as follows:
Poor quality: It is the major reason for conflict between Starbucks and customers of the organization. Sometimes company is not capable to maintain the quality of coffee as per the requirements of the customers due to the unavailability of the raw materials (Charles, 2007). So, due to this problem customer dissatisfies the service quality of the organization. For resolving this problem organization needs to maintain effective customer relationship as well as improve the quality of the coffee and other products by effective monitoring and controlling process of total quality management.
Poor working environment: Starbucks have some dissatisfaction factors which affect the performance of the employees (Cao, Yong, and Thomas, 2005). These are poor working environment and employment policies. It maximizes the de-motivation among employees towards the roles and responsibilities and performance. These conditions can create conflict among employees and organization. For resolving this issue Starbucks needs to maintain effective working environment at workplace as well as improve the existing and new employment policies.
Improper interest and dividend: It is the most significant reason of conflict among shareholders and Starbucks of the organization. For resolving such type of conflict organization needs to provide appropriate interest and dividend to each share holders for their investment funds (Avlonitis and Indounas, 2006).
Delay in tax payment: Sometimes Starbucks has paid their tax after the assigning time which creates a conflict among government of the nation and organization. This issue can be resolved by the timely payment of taxes and interests as well as appropriate financial reporting of the monetary performance of the company.
Improper communication about raw material requirements: If organization does not provide actual detail of the required raw material on time than supplier cannot supply the material on time. It develops conflicts among supplier and Starbucks. By appropriate communication about quantity and quality of raw material can resolve this issue effectively (Charles, 2007).
For the coffee product, Starbucks has targeted coffee drinkers. In which they target men and women between the ages of 25 to 40. Including this, they must be living in urban areas and willing for purchase premium products of coffee (Targeted Marketing, 2012). Target population must have high income and professional carriers as well as have interest in fair trade and well fairness of society. Organization target this audience because this generation are more dedication towards the spend money on coffee products and services.
Starbucks has followed effective strategy for promoting their new and existing products and services. Organization spends 1.4% of revenue on advertising. Major channels of advertising are XM radio, online, social media networks and televisions. Further is also used physical advertising. Organization also uses personal selling for promoting products and services. Regarding this organization focuses on effective customer service and perfect cup of coffee as per the requirements of customers (Layton, 2011). Maintaining effective public relations by organization big parties with trump tower is also an effective strategy for promotion. Starbucks also uses public performance, nationwide coffee break and charitable contributions for improving relations with society. Starbucks includes the sales promotion strategy in which they provide incentive cards to loyal customers as well as develop loyalty program. All these promotional strategy helps Starbucks in promoting products and services in effective way.
Online and social media marketing is the major development area which provides customer relations opportunities to Starbucks. In the online marketing, mobile application is the most significant strategy by which organization can attract more customers. Along with this, Starbucks uses its website which includes all information about their products and services with price and images (Fleisher and Bensoussan, 2003). It helps in attracting customers and deciding products as per their requirements. In addition, organization also uses direct mail of sales promotion and special discounts to their loyal customers for making effective relationship with them. Thus, in the online marketing company’s website, mobile app and direct mails are most significant development which maintains strong association with customers of the organization.
In the social media marketing major social networking sites are Facebook, Twitter, Linked In, Google Plus, etc. Starbucks uses some particular pages on all these sites which help in increasing customer to customer communication (Rinadi, 2014). Along with this, social networking teams also provide the opportunity of mass communication with large number of customers. In these sites, purchase of the one customer influences other to buy that products and services. Starbucks posts new updates of products and services with images. Likes, share and comments and reviews of customers on these images attract more customer and helps in maintaining effective relations with organization.
Promotional campaign can be defined as series of advertisement in which Starbucks uses different marketing tools to communicate appropriate message to target market (Verhoef, 2003). Design and planning of a promotional campaign is given below:
Assessment of the marketing communication opportunities of Starbucks: In this step, Starbucks organization assesses the needs and requirements of customers. It helps in developing attractive communication message for customers. Organization assesses that customer’s taste and preference has changed as per the seasons (Nienaber and Roodt, 2008). So, organization needs to develop evergreen communication message which include all information about all products and services of Starbucks.
Decide the communication channel: For communicating developed message Starbucks chooses the online and social media channels. Both marketing channels are significant for Starbucks because it helps in targeting mass population. These channels are very low cost and time effective for Starbucks (Knox and et al, 2007).
Determine the objectives: A major objective of this promotional campaign is maintaining effective relations with customers of the organization. Along with this, organization also wants to obtain new customer as well as high sales and revenue of the company.
Identify the promotional mix: In this promotional campaign Starbucks uses sales promotion. In which it will provide a royalty card to their loyal customers which offers a cup of free coffee on 10 cups of coffee.
Create the promotional message: In this stage, Starbucks decides the content, structure, appeal and format of the message.
Develop the promotional budget: Organization uses the social media and online marketing channel which is not required high amount of budget (Payne and Frow, 2005). So, organization can obtain funds from internal sources of finance for developing promotional budget.
Determine the effectiveness of campaign: Effectiveness of the campaign can be measured by the time and cost. Along with this, promotional plan is very effective because it provides help to Starbucks in developing strong relationship with customers of the organization.
Making new customer for each purchase is very expensive for Starbucks. So, it wants to do the business with those customers who buy products and services of organization again and again. Thus, repeat business is significant techniques for reducing the overall cost of the marketing activities of the organization (Tesone, 2006). It is an example of effective relationship with customers. Thus, repeat purchase helps in improving gross margin and total sales of the Starbucks which increases the overall performance of the company also. In some times, satisfaction of repeat customers helps in attracting new customers for purchasing coffee products and services.
Starbucks uses customer feedback survey for their products and services which help in recognising the needs and requirements of the customers. Motivators and exceeding the expectations of customer also help in increasing the repeat business for Starbucks. For this organization, all those customers who are completely satisfied with their services will be most important motivator. It helps in communicating the positive experience and effectiveness of services of Starbucks to other customers (Mullins, 2010). It helps in increasing the purchase of customer again and again. On other hand, customer expectation also plays an important role in repeat business. If expectations of customer has decreased then buyers will not buy particular product of Starbucks and if expectations of customer has exceed than for satisfying needs and expectations customer will buy product again and again which leads the repeat business for Starbucks.
Customer data base is important for:
Stimulus Response model for buyer’s behaviour:
As per the buyer behaviour model, there are different market stimulus which motivates customer to buy particular products and services of the Starbucks. Competitor’s products, price, promotional strategies and place also attract the customer’s of company. Along with this, other stimuli, such as economic, political, social and technological factors also influence the customers of the Starbucks to buy particular products and services. Other than this, buyer’s characteristics and decision making process are also helped in changing the behaviour of customers towards the products and services (Buyer Behavior: Stimulus-Response Model, 2013). Buyer’s response towards the choice of product, brand, deals, purchase timing and amount and frequency are also affect the behaviour of customers of the Starbucks. Thus, buyer’s behaviour helps in motivating, encouraging and decision making of customers. It leads the effective customer relationship with organization.
Post purchase behaviour and loyalty of customer also help in developing effective customer relationship with organization. Post purchase behaviour of Starbucks’s customer includes that customer’s are satisfied or not by the particular purchase or not. If, customer is completely satisfied with coffee products of Starbucks, then consumers will come again in the coffee houses of company which leads the high performance (Aaker, 2011). If customers are not satisfied with the services of Starbucks then they will communicate negative experience with other customers also. It affects the performance of the company.
Customer loyalty includes the transactional and emotional loyalty which can be developed by the quality of services delivery of coffee products and services of Starbucks. Customer loyalty also comprises satisfaction and competition level. If organization provides high customer satisfaction by products and services then it will increase loyalty of customers. At the time of high competition Starbucks can develop the loyalty by high quality products in optimum price.
As per the Sales of Goods Act 1893 property of the sales of goods and services is transferred to another party by using the monetary transactions. As per the JOLT Act (Jobs Originated through Launching Travel), Canadian retirees can spend more than 240 days in a year in US without issuing any visa but they must be pay income and estate taxes (Oudan, 2007). As per the taxation and legislations, tourists cannot file jointly with their spouse. Nutrition Labeling and Education Act of 1990 (NLEA) and the Food Safety Modernization Act of 2010 (FSMA) has developed by the Federal Trade Commission to safety of the food and beverage products of the organizations.
As per the Exchange control Act 1962, visitors are banning to use the foreign currency within the country.
Sale of Goods and Supply of Services Act 1980 have applied for appropriate supply of finished goods and services of the organization. Legislations are focused on the appropriate presentation of all raw material used by organization. Different laws also consider the implied warranty for spare parts and servicing of the products and services (Aaker, 2011). As per the Fraud Act 2006 organization cannot use the improper presentation of different products and services in front of customers.
As per the Hotel and Restaurants Act 2006, no one can develop new hotel and restaurant on any location without any valid licence. Without any valid license no any organization can appoint travel agents at different location. As per the Employment Act hospitality and tourism organization needs to appoint tour guides and carriers with valid licences (Avlonitis and Indounas, 2006).
Current research report has concluded that Starbucks develops effective customer relation with organization by assessing the needs and requirements of different customer and providing effective and high quality service to satisfy them. Organization is facing the different communication berries such as emotional and poor messages, etc. It can be resolved by the appropriate communication management process and channels. For formulating the management account Starbucks uses the effective allocation of roles and responsibilities in the entire team. It uses the two factor theory for motivating employees of the organization which helps in increasing the overall performance of the company.
Research has also concluded that organization targets 18 to 40 years individuals to their coffee products. For promoting products and services organization has followed particular promotional campaign. It helps in marketing and advertising of products. Investigation has described significant role of repeat business in increasing the customer relationship management. Further report has found that Sales of Goods Act 1893 affects the services, delivery of products and services of Starbucks. Hotel and Restaurants Act 2006 has described that organization is required a valid licence for appointing new travel agent, guide and carriers.
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