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 Factors and Customers Satisfaction of Budget Hotel
Customers in China
Yang Yu
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FACTORS AND CUSTOMER SATISFACTION OF BUDGET HOTEL
CUSTOMERS IN CHINA
MS. YANG YU
A Thesis Submitted in Partial Fulfillment of the Requirements
For the Degree of Master of Business Administration
Department of International Business
International College
University of the Thai Chamber of Commerce
2012
Thesis title
Name
Degree
Major title
Thesis adviser
Graduate Year
Factors and Customers Satisfaction of Budget Hotel Customers
in China
Yang Yu
Master of Business Administration
International Business
Assistant Professor Dr. Arisara Seyanont
2012
ABSTRACT
The purpose of this research was to study the customer perception toward
marketing mix (7P’s), customer satisfaction and customer loyalty of budget hotel in
China. The researcher distributed 450 questionnaires during the month of September to
October to the customers who stayed at budget hotel in China. There were 400
questionnaires completed and usable. Collected data from questionnaires processed by
computer program in terms of frequency, mean, standard deviation and regression.
Results showed that customer perception toward product/service and promotion had a
positive impact on custom satisfaction, and customer satisfaction had a positive impact
on customer loyalty. The budget hotel operators can use the result to determine their
target market, make a good marketing mix plan to make the customer satisfaction and
loyalty.
iv
ACKNOWLEDGEMENTS
I would like to express my gratitude to all those who helped me during the
writing of this thesis.
My deepest gratitude goes first and foremost to my thesis advisor Assistant
Professor Dr. Arisara Seyanont, for her constant encouragement and guidance, for her
time, patient, steady support, statistical proficient and direction throughout my thesis
study. Without her patient instruction, insightful criticism and expert guidance, the
completion of this thesis would not have been possible.
I would also like to state my heartfelt gratitude to my committee member: Dr.
Pitsamorn Kilenthong, Assistant Professor Dr. Pranee Eamlaorpakdee, Dr. Rojanasak
Chomvilailuk, Assistant Professor Dr. Li Li, Assistant Professor Dr. Wanrapee
Banchuenvijit, Dr. Phusit Wonglorsaichon and Associate Professor Sriaroon Resanond
for their kindly comment and useful suggestions during the implementation process of
this study.
Loves and thanks go to my dear parents for their love, strongly support,
encouragement, understanding, great confidence and contribution all through these years.
I also owe my sincere gratitude to all my friends in China and here at UTCC
who have contributed to the completeness of this master thesis. Thanks for their time,
support and assistance and for sharing this great MBA experience with me.
v
TABLE OF CONTENTS
Page
iv
ABSTRACT
ACKNOWLEDGEMENTS
v
TABLE OF CONTENTS
vi
LIST OF TABLES
ix
LIST OF FIGURES
xi
Chapter
1. Introduction
1.1 Background of Research
1.2 Problem Statement
1.3 Research Objective
1.4 Research Question
1.5 Scope of Study
1.6 Expected Benefits
1.7 Definition of Terms
1
1 4
6
6
7
7
8
2. Literature Review
2.1. Budget Hotel
2.1.1 Definition of Budget Hotel
2.1.2 Characteristic of Budget Hotel
2.1.3 Full Service Hotel VS Budget Hotel (Limited Service Hotel)
2.2. Customer Perception
vi
10
11
11
12
14
16
TABLE OF CONTENTS (CONTINUED)
2.3 Marketing Mix (7P’s)
2.3.1 Product/Service
2.3.2 Price
2.3.3 Place
2.3.4 Promotion
2.3.5 People
2.3.6 Process
2.3.7 Physical Evidence
2.4 Customer Satisfaction
2.5 Customer Loyalty
2.6 Conceptual Framework and Hypotheses
2.6.1 Conceptual Framework
2.6.2 Hypotheses
Page
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21
21
22
23
24
25
26
27
30
35
35
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3. Methodology
3.1 Research Design
3.2 Population and Sampling Design
3.2.1 Population
3.2.2 Sampling
3.3 Research Instrument
3.4 Data Collection
3.5 Data Analysis
3.6 Reliability Analysis
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37
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41
38
40
42
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4. Data Analysis and Results
4.1 Analyze the Demography Profile of the Respondents
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47
vii
TABLE OF CONTENTS (CONTINUED)
Page
4.2 Analyze the Agreement Level of Customer Perception Toward Marketing
Mix (7P’s), Customer Satisfaction and Customer Loyalty
51
4.3 Data Analyze
73
77
4.4 Hypothesis Summary
5. Conclusion, Discussion and Recommendation
5.1 Conclusion of Findings
5.2 Discussion
5.3 Management Implication
5.4 Research Recommendations
5.5 Limitation & Further Research
REFERENCES
78
79
82
83
85
87
89
APPENDICES
A. Budget hotels, cities and the address of 15 budget hotels
B. Questionnaire (English version)
C. Questionnaire (Chinese version)
101
106
114
BIBIOGRAPHY
119
viii
LIST OF TABLES
Table
2.1
3.1
3.2
3.3
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
4.10
4.11
4.12
4.13
4.14
4.15
Characteristics for a budget hotel
The tourists in 5 cities in 2011
Plan and actual collected questionnaires
Reliability of the variable (Cronbach’s Alpha)
Respondents of customers by gender
Respondents of customers by age
Respondents of customers by education level
Respondents of customers by income
Respondents of customers by times stay at budget hotel
Analysis of the agreement level of product/service of customer perception
toward marketing mix (7P’s)
Analysis of the agreement level of price of customer perception toward
marketing mix (7P’s)
Analysis of the agreement level of place of customer perception toward
marketing mix (7P’s)
Analysis of the agreement level of promotion of customer perception
toward marketing mix (7P’s)
Analysis of the agreement level of people of customer perception
toward marketing mix (7P’s)
Analysis of the agreement level of process of customer perception
toward marketing mix (7P’s)
Analysis of the agreement level of physical evidence of
customer perception toward marketing mix (7P’s)
Analysis of the agreement level of customer perception toward
marketing mix (7P’s)
Analysis of the agreement level of customer satisfaction
Analysis of the agreement level of customer loyalty
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Page
13
37
41
44
47
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48
49
50
52
54
56
58
60
62
64
66
69
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LIST OF TABLES (CONTINUED)
Table
4.16 Regression analyses between customer perception toward
marketing mix (7P’s) and customer satisfaction
4.17 Regression analyses between customer satisfaction
and customer loyalty
4.18 The summary for all hypotheses
x
Page
73
75
77
LIST OF FIGURES
Figure
2.1 Information Processing for Consumer Decision Making
2.2 The Seven P’s of the Marketing Mix
2.3 Conceptual Framework
xi
Page
17
20
35
1
CHAPTER 1
INTRODUCTION
1.1Background of research
The travel and hospitality industry in China has witnessed a robust growth in
recent years. The number of leisure, business and VFR tourists (visiting friends and
relatives tourists) in 2011 in China had reached about 2.64 billion person/times that a
rise of 12% and with an estimated about 1.93 trillion Yuan in revenue, representing an
increase of 21% over the previous year. A large number of tourists create a prerequisite
for the rapid development of budget hotel industry in China (The Analysis of Budget
Hotel, 2012).
With the strong growth of China’s economy and the improvement of Chinese
citizen’s material conditions, the Chinese have higher demands for living quality, they
hope the open field of vision and to keep up with the pace of the times, thus, the
tourism consumption becomes the important way for Chinese citizen to relax, to know
the world, and to obtain new knowledge in their leisure time. On the other hand, the
rapid development of domestic traffic facilities (airport, highway and railway
construction) in recent years, greatly shorten the time to tourism destination, and make
the domestic and outbound tourism more convenient and efficient.
2
The origin of the budget hotel may be traced back to the 1920s in the US
(Shen, 2006:61). While the budget hotel has developed worldwide and the terms
‘budget’ or ‘limited service’ or ‘economy’ are used frequently throughout the hospitality
industry, there exists no standardized, widely accepted definition of this segment
(Davidson, 1993:61; Gilbert & Arnold, 1989:61; Gilbert & Lockwood, 1990:61; Justus,
1991:61; Roper & Carmouche, 1989:61; Senior & Morphew, 1990:61).
The fast development of tourism economy and the constant change in market
demand mean that budget hotel has become one of the hottest fields in hotel industry.
The huge potential of residents travel and the vigorous development of small and
medium-sized enterprise business activities are the results of the rapid growth of
China’s economy, as well as the sustained growth of residents’ disposable income.
More leisure time because of the implementation of two-day weekend and the
adjustment of the public holiday also make it possible that the domestic large-scale
mass tourism image began to form and Chinese residents become the subject of mass
leisure tourism consumption. Low price and superior quality are the first standards
when they choose lodging place, so clean, cheap, can provide basic services are the
primary requirements for lodging facilities for tourists, and these requirements are the
unique advantages of budget hotel.
Since 1997, the first truly budget hotel brand—Jin Jiang Inn born in Shanghai
in Chinese market, three camps of budget hotel industry have taken shape in China.
The first main one is the national local brand budget hotel, such as Home Inn, Jin
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Jiang Inn, Motel 168, 7 Days Inn, Han Ting (Yan, 2006). The second main one is the
regional characteristics budget hotel brand, such as Shanshui fashion hotel, Juzi hotel,
Wanjiahao hotels, etc. The third main one is the international hotel management group,
such as the Ibis hotels of French Accor Hotel brands and the Super 8 in the United
States (The research report of budget hotel market in China, 2011).
Hua et al. (2009: 60) stated that the 2008 Olympic Games in Beijing and the
2010 World Exposition in Shanghai had stimulated the development of budget hotels
in China. According to Mr. Changjiang Yu, the director of Beijing Tourism Bureau that,
Beijing needed to renovate more than 200 no-star or low-class hotels before the end
of 2007 to accommodate more than half million domestic tourists during the 2008
Olympics, this stimulation the budget hotel in China to a large extent development.
In 2009, with domestic economic recovery, tourism hotel industry begun to
rise up, and budget hotel industry head into the rapid recovery stage .By late 2009, the
number of budget hotel chain brand has reached 303, the total budget hotel has
reached 3757, it increased by 952 hotels with an increase of 33.94% when compared
with the same period in 2008 (Xiao et al., 2011).
In 2010, the important year of Shanghai World Expo, this World Expo further
enhanced the development of budget hotel industry in China, the total revenue of
budget hotel industry amounted to 18 billion Yuan, increased by 30% from 2009. In
2010 budget hotel industry reached 5120 hotels and the number of guest room
reached 564000 rooms (Xiao et al., 2011).
4
In the first half of 2011, China budget hotel market scale has reached 10
billion Yuan, year-on-year growth of 20%. In the third quarter of 2011, China’s new
budget hotel reached 1523 hotels, newly increased 144095 rooms, respectively
increase by 29.75% and 26.48% from the end of 2010 (Xiao et al., 2011).
Budget hotel has high growth potential, especially embodied in the sustainable
growth ability. Budget hotel is the young growth group of China hotel industry that with
a powerful long-term growth potential. Benefit from leisure tourism and booming
development of business travel market, and China budget hotel has a bright prospect.
1.2 Problem statement
With the constant development of china economy, business activities between
enterprises become more and more frequently and also the tourist market in China
become more and more active. A new hotel state-budget hotel catering to the new
customer demand, it has been supposed to have great development potential, which
turns to be one of the hot spot of investment. Because of the intense competition
between budget hotels and the purpose to gain sustainable competitive advantage, a
fierce battle for customer resource opened. The focus of this competition mainly falls
on the “customers”, the budget hotel which has fully satisfied customers, and won the
customers’ trust, it has had the advantageous weapons to win this smokeless war (Qin,
2007).
Tseng (2007:1) stated that, as the competitive environment becomes more
5
turbulent, the most important issue the sellers face is no longer to provide excellent,
good quality products or services, but also to keep loyal customers who will contribute
long-term profit to organizations and to compete in the overcrowded and interactive
marketplace, marketers are forced to look beyond the traditional 4Ps of marketing
strategy, which are no longer enough to be implemented for achieving competitive
advantage. Satisfaction towards well integrated service marketing mix is expected to
affect the customer’s decision of a patient for using the same service in time to come
(Rafiq & Ahmed, 1992). And McCarthy (1964:4) defined the marketing mix as a
combination of all of the factors at a marketing manger’s command to satisfy the target
market. In addition, McCarthy and Perreault (1987:4) defined the marketing mix as the
controllable variables that an organization can co-ordinate to satisfy its target market.
Thus, in this study, the researcher studied the 7P’s (Product, Price, Place, Promotion,
People, Physical Evidence, Process) instead of 4 P’s (Product, Price, Place, and
Promotion) of a product marketing mix (Rafiq & Ahmed, 1992). Furthermore, Customer
Satisfaction is recognized as key to the success of business competition which is the
individual’s perception of the performance of the service in relation to expectations
(Aleksieva, 2010:1).
Customer loyalty was also of great importance in hotel industry. It is often
shaped by positive experience by the customer during his/her stay in a hotel (Mason
et al., 2006:7; Nasution & Mavondo, 2008:7). And it is easy to realize that the retention
of the guests is proportional with the profit of the hotel - a 5 % increase in the guest
6
retention rate could lead to a 35-95% profit increase (Zeithaml & Bitner, 1996:31).
Hence, good marketing strategy is essential in operating a successful business.
And it is also very important for each firm to strive to make customers satisfaction in
order to retain loyal customers who will bring long-term profit and create competitive
advantage in return.
Thus, this paper aimed to study the customer perception toward marketing
mix (7P’s), customer satisfaction and customer loyalty of budget hotel in China and
improve these performance indicators by improving marketing strategy.
1.3Research objective
1. To study customer perception toward marketing mix (7P’s) that related to
customer satisfaction in budget hotel.
2. To study customer satisfaction that related to customer loyalty in budget
hotel.
1.4 Research question
1. How does customer perception toward marketing mix (7P’s) that related to
customer satisfaction in budget hotel?
2. How does customer satisfaction that related to customer loyalty in budget
hotel?
7
1.5 Scope of study
This paper studied the customer perception, customer satisfaction and
customer loyalty to budget hotel in China. This study was related to customer
perception toward marketing mix (7P’s), customer satisfaction and customer loyalty of
budget hotel in China. The data was collected from customers who have stayed at the
3 budget hotels (APPENDIX A) (7 Days Inn, Jin Jiang Inn, Green Tree Inn) in 5 cities
(APPENDIX A) (Beijing, Shanghai, Wuhan, Guangzhou, and Guilin) in China. Period of
this study is September 25th - October 26th, 2012.
1.6 Expected benefits
1. To have a better study of how to write thesis, how to collect data and how
to analysis the collected data.
2. To have a clear study of customer perception toward marketing mix (7P’s)
for budget hotel in China.
3. To have a better understanding of customer satisfaction and customer
loyalty in budget hotel in China.
4. Expect that the obtain results will provide useful information for the budget
hotel industry in China.
5. Expect that this study can be used as a source of information for the future
study in related field.
8
1.7 Definition of terms
The definitions of terms that are relevant to this study are listed as below:
Budget hotel is the hotel that focus on the customers who are middle and
small enterprise business people (business travelers), leisure and self-help tourists
(leisure travelers), it is small and medium-sized hotel with moderate house price. The
“budget” means “cost” and “worth”. It refers to the “price” rather than just in the sense
of “cheap”.
Customers in this study are the customers who stay at the 3 budget hotels
(7 Days Inn, Jin Jiang Inn, Green Tree Inn) in 5 cities (Beijing, Shanghai, Wuhan,
Guangzhou, and Guilin) in China.
Customer loyalty is the likelihood of previous customers to continue to stay at
the budget hotel, is the measure of success of the supplier in retaining a long term
relationship with the customer, refers to the degree of loyalty of customers.
Customer perception means the customers’ beliefs concerning the service
received from budget hotels in China from marketing mix (7P’s).
Customer satisfaction is what customers estimate the service that they
received from the budget hotel during the stay. It’s the feeling of well-being and
pleasure that what customers get from what they hopes for and expects from the
appealing service.
Marketing mix (7P’s) is a business tool used in marketing; it refers to a
model of crafting and implementing marketing strategies. It stresses the blending or
9
“mixing” of various factors in such a way that both organizational and consumer (target
market) objectives are attained. In this research study marketing mix comprises of 7P’s
which are product/service, price, place, promotion, people, process, and physical
evidence.
9
CHAPTER 2
LITERATURE REVIEW
This chapter studied the concept theory and literature concern to support of this
study as follows:
2.1 Budget Hotel
2.2 Customer perception
2.3 Marketing mix (7P’s)
2.4 Customer satisfaction
2.5 Customer loyalty
2.6 Conceptual Framework
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2.1. Budget Hotel
2.1.1 Definition of budget hotel
What is budget hotel? Till now still do not have a precise definition on budget
hotels. Budget hotel is relatively price cheaper when compared with luxury hotels and
budget hotel just provide basic services and facilities (Teng, 2010: 6). Budget hotel is
the hotel that focus on customers who are middle and small enterprise business
people, leisure and self-help tourists, house prices moderate, small and medium-sized
hotel (Xiao et al., 2011).
Budget hotels are usually considered as the 1 star hotels because they
provide lodging at very cheaper price varies from $30-$40/room/night, some with
breakfast offered in this price. The guest rooms are with very limited facilities, like
single bed, water bottle and iron board. The location is usually near highways and
Exits. Long term lodging with cheap price is also served. Some examples are as
follows: Super 8 motel, America’s best value inn, Motel 6 and Studio 6 (Budget hotel,
2012).
Budget Hotel is a hotel format that compare with the traditional Full Service
Hotel (Markel, 2012). The most prominent characteristics of budget hotel is the cheap
prices, and its “b&b” (bed + breakfast) service mode. Budget hotel first appeared in
United States in the 1950s, and it is quite a mature hotel form in European and
American countries today (Budget hotel, 2012).
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2.1.2 Characteristic of Budget hotel
As a new hotel state, budget hotel is the product of economic and social
development, it is different from the full service hotel in upper-class society, budget
hotel catering to meet the general populace travel and lodging demand of the product
facilities. Because of reduced facilities and services, the main characteristic of budget
hotels is the supply of a basic service with low price. Budget hotel focus on customers
who are salesmen, intermediate level businessmen, technicians and professionals,
because this group of customers travel for business, preferring lower price, but make a
point on comfort instead of sophistication because of the short staying (Bezerra & Melo,
2003: 8411). The basic characteristics of budget hotel are as follows in Table 2.1:
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Table 2.1 Characteristics for a budget hotel
Location
Size and
diversity
Lobby
Guest rooms
Parking
i. The areas along the roads close to or at the entrance of the city
are more suitable.
ii. Location in strategic points must be considered for stops on long
trips.
iii. In cities, out of commercial areas, should be located close to train,
bus stations or subway.
i. Facilities are limited, only the room, reception, office, a small snack
bar, and a room for equipments.
ii. A small laundry. As an alternative, laundry services can be
contracted or a medium laundry company which also supplies
service to a group of hotels of the same chain can be used.
iii. In order to avoid elevators, a horizontal architecture must be
preferred.
i. Must be only a reception and a small resting area.
i. The number of guest rooms must be reduced (ranging from 60 to a
little more than 100 approximately).
ii. The guest rooms can be smaller or bigger than similar ones in
upper categories depending on the clients’ characteristics.
iii. Special guest rooms for handicapped people must be supplied.
iv. In hotels aimed to working travelers, the guest room as well as the
bathroom can be significantly smaller.
v. Guest rooms with only one bed can be fitted with guest rooms
containing two beds.
vi. It is important to suit furniture for small guest rooms, making a
careful project for available area.
i. The number of parking spaces must be enough and equivalent to
the number of rooms.
Source: Andrade et al., (2000: 8414).
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2.1.3 Full Service Hotel VS Budget Hotel (Limited Service Hotel)
Budget hotel is a new type of hotel that it is a modern hotel existence to meet
demand changes in tourism market; it is opposed to the traditional full service hotel
(Scott, 2012).
Scott (2012) stated that hotels are classified into two main categories,
limited-service hotel and full-service hotel. A limited-service hotel is a free-standing
property hotel that does not provide extra services such as restaurants, front desk staff,
and housekeeping or provide all facilities. A full-service hotel is differentiated by a
variety of services when compare to budget hotel (limited service hotel). Customers at
full-service properties have more choices, for instance, an extra restaurant and
beverage service that consist of cocktail lounges, formal restaurants, and coffee bars
and so on. The large full-service hotels may have a small shopping center with retail
shops and gift boutiques to provide convenience to customers who stay at the hotel.
There will be laundry service and valet service, swimming pool, fitness center, health
spa and even beauty salons. A newsstand and cosmetics counter may also be offered.
Even more, they may also offer more service you may have not thought about. The
largest of the full-service hotels may offer a wide array or unique and accommodating
services that will be good for larger groups, businesses, commercial activities and
celebration event.
In addition, according to the study online about Full Service vs. Limited Service
Hotels (Markel, 2012), the one ostensible difference between full service and limited
15
service hotels is limited service hotels do not have an attached restaurant that full
service hotels have.
The difference between full service hotels and limited service hotels (Markel,
2012) are as following:
(1) Restaurants and Food
One feature of full service hotels is restaurant. The Hilton Inn exhibits its
upscale dining venues, such as the Chandler, an all-day lobby bar AZ location’s
steakhouse “The Grill” and a cafe offering chocolate candy and coffee. Even if
customers stay in room, full service hotels provide dedicated room service with an
extensive menu. However, budget hotel does not have its own restaurant, does not
provide food or related service. But, this doesn't mean limited service hotels never
offer food or beverage to their customers. For instance, the 7 Days Inn offers bedtime
milk to customers.
(2) Services and Facilities
Full service hotels offer more in services and accommodations. Customers
can expect 24-hour valet service, dry cleaning, heated pools and saunas, swimming
poor, well-equipped fitness centers, and high-speed internet service. The rooms should
feature high-end furniture, appliances, and top-of-the-line television with premium cable
service.
However, limited service hotels just have some service and facilities to offer,
such as pools, which may not be heated and guests shouldn't expect a spa.
16
(3) Price
Limited service hotels have an advantage in price. The price of budget hotel is
much more cheaply when compare to full service hotel. For example, a stay in 7 Days
Inn might cost 117 Yuan/night, but a stay in Hilton spent at least 1690 Yuan/night.
2.2 Customer perception
Parasuramn et al. (1985:41) indicated that consumer perception was defined
as customer’s belief that related to the received service. And Kotler (2001:22), Thang
& Tan (2003) defined perception as the process by which an individual selects,
organizes, and interprets information inputs to create a meaningful picture of the world,
each person perceives the world differently, and perceptions are manifested as
attitude.
2.2.1 Model of nature of consumer perception
Figure 2.1 as below illustrated the model of nature of consumer perception to
explain how marketer gets into consumer decision making by customer perception, this
model help to get a better understanding of effective communication between
customer perception and products.
17
Information Processing for Consumer Decision Making
Information Process for Consumer Decision Making
Exposure
Random
Deliberate
Perception
Attention
LowInvolvement
HighInvolvement
Interpretation
LowInvolvement
HighInvolvement
Short-term
Long-term
Memory
Active problem
sloving
Stored experiences,
Values, decisions
rules, feelings
Purchase and Consumption decisions
Figure 2.1: Information Processing for Consumer Decision Making
Sources: Consumer Behavior Building Marketing Strategy (Hawkins et al., 2004:43)
Information processing – Information processing is a series of activities by
which stimuli are perceived, transformed into information and stored. Figure 2.1
18
showed four major steps/stages that include exposure, attention, interpretation and
memory.
Exposure – It occurs when one’s senses deduct any external cues from
various things. The exposure to ads is the starting point of information processing.
Hawkins et al. (2004:44) stated that, exposure occurs when a stimulus comes
within range of one’s sensory receptor nerves, for an individual to be exposed to a
stimulus requires only that the stimulus be placed within the person’s relevant
environment.
Attention – When the sense organization sends a message to the brain, the
information analyze start immediately. To get one’s attention depends on stimulus
factors, individual factors and situational factors.
Interpretation – Because interpretation is based on what individuals expect to
see in light of one’s previous experience, the interpretation of stimuli is uniquely
individual. Stimuli are often highly ambiguous. When stimuli are highly ambiguous,
individuals usually interpret them in such a way that they serve to fulfill personal needs,
interests, and wishes.
Individual characteristics – Ratneshwar (2001:45) stated that marketing
stimuli just meaning as individuals interpret them. Individuals are not passive
interpreters of marketing and other messages, but actively assign meaning was based
on one’s demands, desires, expectations and experiences. The negative publicity from
19
consumers’ interpretations is depend on their prior commitment to the brand involved
(Ahluwalia et al., 2000: 45).
Memory – Memory is the short term use of the meaning for immediate
decision making or the longer-term retention of the meaning.
2.2.2 The relationship between customer perception and customer satisfaction
Parasuraman (1995:38) indicated that perception is one important factor in
customer satisfaction. Kotler et al. (1999: 24) stated that customer satisfaction is a
result of what customers think will happen (expectations), interacting with what
customer think did happen (perceptions), if the product’s performance falls short of the
customers’ expectations, the buyer is dissatisfied; if performance matches expectations,
the buyer is satisfied; if performance exceeds expectations, the buyer is delight (Kotler
et al., 1999: 24).
2.3 Marketing mix (7P’s)
Marketing mix was the set of marketing tools that use to pursue its marketing
objective in the target market (Kolter et al., 1994:23). As the set of controllable,
marketing mix was regarded as the tactical marketing tools that the firm blends to
produce the response it wants in the target market (Kolter & Armstrong, 2001:23).
The term marketing mix refers to the four major areas of decision making in
the marketing process that are blended to obtain the results desired by the
20
organization. The marketing mix consists of everything the firm can do to influence the
demand for the product or service. The four elements of the marketing mix are
sometimes referred to the 4P’s of marketing that include product/service, price, place
and promotion (Kotler, 2000:36).
Furthermore, in marketing, the 7P’s refer to the product, price, promotion, place,
people, process and physical evidence that make up the marketing mix. They are an
extension of the basic 4P's.
Booms and Bitner (1981:51) advised to add 3 more element about serviceon
that include people, process and physical evidence on the basis of traditional market
marketing theory 4P’s. “People” refers to the employees of the organization with whom
customers come into contact with. “Process” is the processes and systems that within
the organization that affects its marketing process. “Physical evidence” is elements
within the store that include the store front, the staff uniforms, signboards, etc.
Figure 2.2: The Seven P’s of the Marketing Mix
(Source: Marketing and the 7 P's, 2012)
21
2.3.1 Product /Service
Product is the core element of the marketing mix strategy that retailers can
offer unique attributes that differentiates their product from their competitors (Ferrell,
2005:13). And product is characterized by quality, design, features, brand name and
sizes (Borden, 1984:13).
Product is anything that can be offered to a market for attention, use,
acquisition, or consumption that might satisfy a want or need (Armstrong & Kotler,
2006:13). It is a physical good, service, idea, person or place or any combination of
goods and/or services that offered to meet and satisfy the needs, wants, requirement
of consumers. Hence, a product is something tangible or intangible that can be offered
for purchase or use by consumers. A tangible product is one that consumers can
actually touch, such as food and beverages. An intangible product is a service that
cannot be touched, such as room service.
The products of budget hotel are very simple; the core products are the guest
room, and related service, budget hotel also provide simple food and beverage, for
instance, 7 Days Inn provide bedtime milk for customers for free.
2.3.2 Price
Price is the second element in the marketing mix. The price of a product or
service is amount of money that consumers are willing to pay to obtain the right to use
the product or service (Kotler et al., 2008:36). Price is the amount of money charged for
22
a product or service, or the sum of the values that consumers exchanges for the benefit
of having or using the product or service (Kotler & Armstrong, 2001:12). In addition,
price is the amount of all values that consume for exchange of human satisfaction.
Further more, price is inclusion in making purchase decisions of services (Kotler,
2004:11). Economic often assume that lower price for the same product will result in
more sales than higher prices (Hawkins et al., 2001:15).
The price of budget hotel is very cheap when compare with luxury hotels such
as Hilton Hotel, the lower price is one important factor that has impact on customer.
The price of 7 Days Inn per night is about 117 Yuan, Jin Jiang Inn is about 108 Yuan
and Green Tree Inn is about 149 Yuan (the prices of these 3 budget hotels are
different in different cities and different times).
2.3.3 Place
Place is a set of interdependent organizations that caters to the process of
making a product available to consumers (Armstrong & Kotler, 2006: 14). Place was
regarded as the location or where a product/service can be found for use of
consumption. Moreover, place can also be described as availability of a
product/service. This availability means where the product is located in the market or
how often the product can be found (Williams, 2010:14).
Budget hotels usually located in a place with a complete set facilities, such as
convenience store. The place with convenience traffic is also very significant, such as
23
located near bus station, railway station and downtown to make the travel of tourists
become more convenient. Nowadays, there also have budget hotels which located
near school or universities to provide convenient service to students, their friends or
family members, and also provide convenience to teachers.
2.3.4 Promotion
Borden (1984:14) stated that promotion is defined as sales promotion,
advertising, direct marketing, personal selling and public relations. Promotion is a
decision of how best to relate the product to the target market and persuade them to
buy it (Lovelock et al., 1998:14). Promotion included various ways of communicating to
customers of what the hotel should offer and promotion contained a variety of activities,
such as branding, advertising, direct promotion mail, public relationship, corporate
identity, special offers and exhibitions (Behera, 2008; Marketing and the 7 P's, 2012).
Promotion is a plan with the objective to increase sales of product or services
within a short period; it helps to stimulate customers to make decisions of buying a
product or service in the market (Ogeniy, 2009:16).
A communication program was significant in marketing strategies, because it
plays three vital roles: providing needed information and advice, persuading target
customers of the merits of a specific product, and encouraging them to take action at
specific times (Lovelock & Wright, 2002:15).
The active promotion activities in budget hotel are as following: make
24
advertisement on TV, internet, newspapers and website, etc; distribute loyalty card
(VIP Card) to retain customers that make customers come back to consume next time,
take reservation online and get special discount, etc.
2.3.5 People
People are essential in service delivery. People factors is one factor that
influence customer’s satisfaction (Iselin & Judy, 2004:230). Sometimes, the best food
may not seem equally delicious if the waitress is in a sour mood but a smile always
helps. Intensive training for the human resources on how to handle customers and
how to deal with contingencies is crucial the success of business.
People refer to the service employees who produce and deliver the service and
they strongly influence the customer’s perception (Hartline & Ferrell, 1996:13; Rust &
Zahorik, 1996:13). All people who directly or indirectly involved in the consumption of a
service are an important part of the extended marketing mix. In hotel industry, people
refer to the customers, employees/staffs, management and everybody else who
involved in it (Behera, 2008). Every time the employees/staffs come into contact with a
customer, an impression is made immediately. Make sure it is a good impression by
having properly trained, the reputation of the hotel was rests in the hands of
well-motivated staff who with a good attitude (Marketing and the 7 P's, 2012).
The basic element to any service provision is the use of appropriate staff and
people. Engaging the right staff and people and training them appropriately in the
25
delivery of their service is basic necessary if the organization wants to obtain a form of
competitive advantage. The employees who have directed interact with customers
affect decision making of customers. Staff should have service knowledge, appropriate
interpersonal skills, and good attitude to provide the service that consumers are paying
for. Many organizations in British aim to apply for the investors in people accreditation
to tell consumers that staffs, are take care off by the company and they are trained to
certain standards (Service Marketing Mix, 2012).
2.3.6 Process
Process was generally defined as the implementation of action and function
that increase value for products with low cost and high advantage to customer and it is
more important for service than for goods. Processes are important to deliver a quality
service. Services being intangible, processes become all the more crucial to ensure
standards are met with. Process mapping ensures that your service is perceived as
being dependable by your target segment. Process in service is the actual procedures,
mechanisms, and flow of activities that service delivery, operating system (Booms &
Bitner, 1981:52).
The pace of the process as well as the skill of the service providers are
clearly revealed to customers and it forms the basis of his/her satisfaction with the
purchase (Hirankitti, 2009: 16). Process refers to the methods and process of
providing a service and is hence essential to have a thorough knowledge on whether
26
the services are helpful to the customers, whether the services are provided in time,
whether the customers are informed in hand about the services and many such things
(Behera, 2008). Process is refers to the systems used to assist the organization in
delivering service. The process of giving service is essential to customer satisfaction.
Issues such as the information given to customers, waiting times and the helpfulness
of staff are all vital to keep customers happy. What customers interested in is getting
good service, but not the details of how the business runs. The hotel business will run
most smoothly for customers if there are processes in place that the staff understands
(Marketing and the 7 P's, 2012).
2.3.7 Physical evidence
Booms & Bitner (1981:52) stated that physical evidence is the environment in
which the service delivered and where the firm and customer interact, and any tangible
components that facilitate performance or communication of service.
Physical evidence is the element of the service mix which allows the
consumer to make judgments on the organization again. If customers choose to have
service in a restaurant, what they expect is a clean, friendly environment. Physical
evidence is a significant ingredient of the service mix, customers will make perceptions
based on their sight of the service provision which will have an impact on the
organizations perceptual plan of the service.
Unlike a product, a service can’t be experienced before it is delivered. It is
27
mean that there can be an element of risk for customers choosing to use a service.
Any uncertainty can be reduced by helping potential customers to ‘see’ what they are
going to buy (Marketing and the 7 P's, 2012).
In the hotel business, monotonously similar building exteriors and interiors are
not always appreciated. And one way to provide reassurance is the recognizable
consistency in uniform design.
2.4 Customer Satisfaction
2.4.1 Theoretical Foundations for Customer Satisfaction
Satisfaction was defined as an overall evaluation of performance based on all
prior experiences with a firm. (Jones et al., 2000: 222).
Confirmation-disconfirmation theory
Customer satisfaction was defined as a post purchase evaluative judgment
concerning a specific buying decision (Homburg & Giering, 2001:223) According to the
confirmation-disconfirmation paradigm; customers assess their levels of satisfaction by
comparing their actual experiences with their previous experiences, expectations, and
perceptions of the product’s performance (Oliver, 1980:222). The theory postulates that
three outcomes of this evaluation are possible:
(1) Confirmation occurs when the actual performance matches the standard,
leading to a neutral feeling;
(2) Positive disconfirmation occurs when the performance is better than the
28
standard, which then leads to satisfaction; and
(3) Negative disconfirmation occurs when the performance is worse than the
standard, which then leads to dissatisfaction.
2.4.2 Literature Review of Customer Satisfaction
Customer satisfaction is the feeling of well-being and pleasure that what
customers get from what they hopes for and expects from the appealing service. It’s a
business philosophy that tends to the creation of value for customers, to anticipate,
manage their expectations, and demonstrate ability and responsibility to satisfy the
needs of them. And it is just like the outcome of customer’s perception of the value
that they received in a transaction or relationship, where value equals perceived
service quality when compared to the value what customers expected with the
competing vendors (Blanchard & Galloway, 1994:3; Heskett, 1990:3; Zeithaml, et at.,
1990:3).
Satisfaction is the level of enjoyment or disappointment, originating from
expectation of the product. Satisfaction is the consumer’s fulfillment response. It is a
judgment that a product or service feature, or the product or service itself, provided (or
is providing) a pleasurable level of consumption-related fulfillment, including levels of
under or over-fulfillment (Oliver, 1997:39)
Qualities of service and customer satisfaction are critical factors for success of
any business (Grönoos, 1990:3 & Parasuraman, 1988:3). As Valdani (2009:3) pointed
29
out that enterprise exist because they have customers to serve. The budget hotel exists,
because the need of large group of business travelers and leisure travelers, and this
group of people is still increase.
Customer satisfaction can help to identify the critical factor that affect
customers' purchase experience and post-purchase behavior such as subsequent
purchase and favorable word of mouth (WOM) publicity (Berkman & Gilson, 1986:5;
Choi & Chu, 2001:5; Fornell, 1992:5; Halstead & Page, 1992:5; Knutson, 1988:5; Pizam,
1994:5). A guest, who satisfied to the product or service, promotes positive WOM free
and with effect and credibility that are superior to those of conventional advertising (Lee,
et al., 2006, Tarn, 2005, & Villanueva, et al., 2008).
2.4.3 The relationship between customer satisfaction and customer loyalty
Hua et al. (2009:70) indicated that, in order to maintain relationship with
customers, budget hotel has to think about customer satisfaction and customer loyalty,
since these two factors determine whether the company’s relationship with customers
is tight or stable.
Customer satisfaction is the starting point to build customer loyalty; it is a
loyalty stock that will improve image of corporate, therefore a long-term relationship
(Gandolfo, 2010:5). Customers’ satisfaction affects customers’ loyalty directly. In
business activities, companies make great effort to improve customers’ satisfaction,
reducing customer dissatisfaction, attracting new customers, and maintaining existing
30
customers (Anna, 2006:9). Satisfaction or dissatisfaction is more than a reaction to the
actual performance quality of a product or service. It is affected by prior expectations
regarding the level of quality.
Hallowell (1996:20) stated that there is a connection between customer
satisfaction, customer loyalty and profitability. Customer satisfaction improves
profitability increased. However, there are some customers who will never be satisfied
or will never be profitable to the product or service of budget hotel, the corporate should
not waste energy and budget to satisfy all customers, the customers should focus on
are the customers who can satisfy in a profitable way (Anna, 2006:21).
According to Schiffman and Kanuk (2004:129) stated that, the objective of
providing value to customers continuously and more effectively than competitors is to
have and to retain highly satisfied customers. Satisfaction has been widely studied as
a predictor of customer loyalty (Cronin et al., 2000:129; Fornell et al., 1996:129; Yang
& Peterson, 2004:129). Satisfaction has a strong positive effect on customer loyalty
intentions across a wide range of product and service categories (Gustafsson,
2005:129). Anderson and Srinivasan (2003:129) indicated that, it is an important factor
for a long-term relationship between a firm and a customer.
2.5 Customer Loyalty
2.5.1 Theoretical Foundations for Customer Loyalty
Loyalty has been defined as a deeply held commitment to re-buy or
31
re-patronize a preferred product or service consistently in the future, thereby causing
repetitive same-brand-set purchasing, despite situational influences’ and marketing
efforts’ having the potential to cause switching behaviour (Chaudhuri & Holbrook,
2001:224). Customer loyalty consists of both an attitudinal commitment to the
relationship, such as price insensitivity, and other, more-overt loyalty behavior, such as
positive word of mouth and repeat patronage (Oliver, 1999:224). Comparison-level
theory and the patronage literature provide the theoretical underpinnings for the loyalty
construct. As discussed previously, the standard by which someone determines his or
her satisfaction with a service and, hence, whether that person should switch or remain
in that relationship is founded on comparison-level theory. The manner in which a
service experience is assessed is based largely on the next-best alternative relationship.
As soon as the current level of outcomes drops below the perceived comparison level
for alternatives, the customer is motivated to leave the relationship (Thibaut & Kelley,
1959:224). Thus, guests who are satisfied with a service when compared with available
alternatives should report greater loyalty to that service than dissatisfied guests. The
reverse is also true when guests are dissatisfied.
2.5.2 Literature Review of Customer Loyalty
There is no globally agreed definition of loyalty. Loyalty can be defined as
something that consumer may show to brands, services, and product categories such
as hotel room (Uncles et al., 2003:30).
32
Uncles et al. (2003:30) also proposed 3 concept of loyalty.
(1) First, it’s the attitude that customers leads to a relationship with the brand.
(2) It is an express in terms of revealed behavior, such as, the pattern of the
stay before.
(3) It is the buying behavior that moderated by the individual’s characteristics,
circumstances and/or the purchase situation.
While Oliver (1997:30) defined customer loyalty as a deeply commitment to
re-purchase or epitomize a preferred product/service consistently in the future, thereby
causing repetitive same - brand or same brand - set purchasing, despite situational
influences and marketing efforts having the potential to cause switching behavior.
The customer loyalty is very important in the hotel industry. It is often shaped
by positive experience by the customer during his/her stay in a hotel (Mason et al.,
2006:7; Nasution & Mavondo, 2008:7). And it is easy to realize that the retention of the
guests is proportional with the profit of the hotel - a 5 % increase in the guest retention
rate could lead to a 35-95% profit increase (Zeithaml & Bitner, 1996:31). To focus on
customer loyalty in the hotel industry in order to increase the number of customers or
rent volume by raising booking or usage levels and /or increasing the range of services
used by guests. To corporate with the brand of the hotel and current customers is also
a good way to maintain the current customer base.
Reichheld (2001:21) stated that the longer a customers stay with the company,
33
the more valuable the customer becomes, since long-term customers are less price
sensitive. And this kind of customers tends to spend more money on product/service of
the company. In addition, the loyal customers have benefit that they will say the positive
things about the hotel to others; it’s a good and free advertising for hotel. Thus, repeat
guests are the richest source of hotel’s revenues and profit. Hence, the key to
sustaining a long term business success in the hotel industry is continue pay attention
to customer loyalty (Oh, 2000:31).
But a guest satisfies with your hotel service, it does not mean that he or she
will stay in your hotel next time or he or she will be your loyal guest. Thus, we should
know that what is the loyalty? Why is it important to the hotel industry? And in what way
a hotel can gain guest?
The conceptualization of the loyalty construct has evolved over the years. In
the early days, when mentioned to loyalty is about brand loyalty with respect to
tangible good. Cunningham (1956:14) defined brand loyalty simply as the proportion of
purchases of a household devoted to the brand that customers purchased most often.
Cunningham (1961:14) was focus more on store as opposed to brand loyalty using the
same measures. And Day (1969:14) argued that there is more to band loyalty than just
consistent buying of the same brand. Dick and Basu (1994:27) introduce the opinion of
relative attitudes into the definition of different types of loyalty; they use the product
appraisal (relative attitude) as the attitudinal component for the development of a
composite index of loyalty following the tradition of Day (1969:15). High relative
34
attitudes paired with a high repeat patronage result in loyalty; however the same
patronage ratio together with a low relative attitude would define spurious loyalty.
Venetis and Ghauri (2004:15) suggest that even if customers do not feel affective
commitment they would still be inclined to stay if the good quality of agency produces.
Moreover Guenzi and Pelloni (2004:16) provided further support to the
evidence that one of the fundamental divers of customer loyalty in service market is
customer satisfaction.
Actively monitoring and managing customer satisfaction should be a priority
for service managers. They found strong support for the notion that the good
interpersonal relationships between customer and front-line employees are a very
important component of the overall offering of the service provider. Because front-line
employees they positively affect customer satisfaction and loyalty towards the firm, but
also because that a powerful tool for reducing the risk of customers’ switching
behaviors when other customers leave the service provider. On the other hand, the
closeness customer-to-employee relationship is also risky for the firm to the risk of
losing customers that front-line employees switch to a competitor (Guenzi & Pelloni,
2004:16).
Therefore, it is important to improve employee’s responsiveness by increasing
staff’s motivations, improving communicate skills, attitude training, improving
knowledge of the service itself and also the organizational policies in budget hotel.
35
2.6 Conceptual Framework and Hypotheses
2.6.1 Conceptual Framework
The conceptual framework was conducted based on the literature review to
study about “Factors and customer satisfaction of budget hotel customers in China”.
Customer perception toward
Marketing mix (7P’s)
1. Product/Service
2. Price
3. Place
4. Promotion
5. People
6. Process
7. Physical evidence
H1
Customer
satisfaction
H2
Customer
loyalty
Figure 2.3: Conceptual Framework
2.6.2 Hypotheses
H1 : Customer perception toward marketing mix (7P’s) has positive impact on customer
satisfaction.
H2: Customer satisfaction has positive impact on customer loyalty.
36
CHAPTER 3
METHODOLOGY
This chapter reported several steps of research methodology as follows:
3.1 Research Design
3.2 Population and Sampling Design
3.3 Research Instrument
3.4 Data Collection
3.5 Data Analysis
3.6 Reliability analysis
37
3.1 Research Design
In order to conduct the research, the information was collected from
customers who stayed at the budget hotel in China. The questionnaire of this study
was adapted from the results of Factor Analysis of Critical Success Factors and
Customer Expectation in Budget Hotel Segment — A Case study of China (Hua,
2009:70).
3.2 Population and Sampling Design
3.2.1 Population
The population of this study based on the tourist numbers in 5 cities (Beijing,
Shanghai, Guangzhou, Wuhan and Guilin) in China, 2011. According to the data from
China Travel Service Head Office in 2011, there were about 719,880,000 tourists in
these 5 cities (China Travel Service, 2011).
Table 3.1: The tourists in 5 cities in 2011
City
Arrival of Tourists (2011)
Beijing
210,000,000
Shanghai
231,000,000
Guangzhou
133,000,000
Wuhan
118,000,000
Guilin
27,880,000
Total
719,880,000
Source: China Travel Service, 2011
38
3.2.2 Sampling
To determine the sample size for this study, the research uses Yamane
sample size table (Yanmane, 1973:75) to specify the appropriate sample size as
following:
n = N/ (1+Ne2)
n = sample size
N is population
e2 = probability of error that is 0.05 or 5 % (at 95 % confidence level).
Thus, the sample size can be caudated according to the recommendation as
follow:
n = 719,880,000/ (1+ 719,880,000 × 0.052) = 399.9
With N = 719,880,000
e = 5% (95% confidence)
Therefore, the sample size should be at least 400 customers.
3.3 Research Instrument
In this study, the questionnaire was designed in English and Chinese
language. And the instrument that uses for this research was as following:
39
1) Study questionnaire information from journal, thesis, statistics and other document
related.
2) Constant questionnaire that use for this research are as following:
Part 1: Demography profile
This part consisted of 5 questions. Including the brand of budget hotel, the
city that customer stays at, age, gender, education, income and times stay at budget
hotel.
Part 2: Customer perception toward marketing mix (7P’s)
This part consisted of 44 questions that include product/service 10 questions,
price 5 questions, place 6 questions, promotion 8 questions, people 7 questions,
process 4 questions and physical evidence 4 questions.
Part 3: Customer satisfaction. This part consisted of 9 questions.
Part 4: Customer loyalty. This part consisted of 7 questions.
According to Aaker (1991:55; 1996:42) and keller (2000:42), the researcher
used the five point Likert Scale method to measure the agreement level in Part 2, part
3, part 4 of this questionnaire by
5= Strongly Agree;
4= Agree;
3= Neutral;
2= Disagree;
1= Strongly Disagree
40
3.4 Data Collection
The researcher used convenience sampling method in collecting data at three
budget hotels (7 Days Inn, Jin Jiang Inn and Green Tree Inn) which these budget
hotels are five cities (Beijing, Shanghai, Guangzhou, Wuhan and Guilin) in China. The
researcher distributed 450 questionnaires form September 25th to October 26th, 2012.
The questionnaires were distributed by team researcher after get permission
from general manager at each budget hotel. Survey questionnaires were placed at the
front desk, the front desk manager/staff randomly asked customers who had just check
out to fill out the questionnaire. The researcher collected questionnaires in Wuhan city
and the other team researcher help to collected questionnaires in other four cities
(Beijing, Shanghai, Guangzhou and Guilin).
41
Table 3.2: Plan and actual collected questionnaires
Budget hotel
7
Plan
Days Actual
Inn
Respond
rate%
Jin
Plan
Jiang Actual
Inn
Respond
rate%
Green Plan
Tree
Actual
Inn
Respond
rate%
Total Plan
Actual
Beijing
30
26
Respond
rate%
Plan
Actual
Respond
rate%
City
Shanghai Guang zhou
30
30
26
27
Wuhan
30
27
Guilin
30
28
Total
150
134
86.67
86.67
90.00
90.00
93.33
89.33
30
26
30
27
30
27
30
28
30
27
150
135
86.67
90.00
90.00
93.33
90.00
90.00
30
30
30
30
30
150
27
90.00
26
86.67
26
86.67
26
86.67
26
86.67
131
87.33
90
79
90
79
90
80
90
81
90
81
450
400
87.78
87.78
88.89
90.00
90.00
88.89
450
400
88.89
From Table 3.2, this researcher collected 450 questionnaires from the budget
hotel customers (7 Days Inn: 150 customers; Jin Jiang Inn: 150 customers; Green
Tree Inn: 150 customers). And from the 450 questionnaires, the completed and usable
questionnaires were 400 questionnaires, there were 88.89% completed questionnaires.
42
In 7 Days Inn in Beijing distributed 30 and usable 26, in Shanghai distributed
30 and usable 26, in Guangzhou distributed 30 and usable 27, in Wuhan distributed
30 and usable 27 and in Guilin distributed 30 and usable 28.
In Jin Jiang Inn in Beijing distributed 30 and usable 26, in Shanghai
distributed 30 and usable 27, in Guangzhou distributed 30 and usable 27, in Wuhan
distributed 30 and usable 28 and in Guilin distributed 30 and usable 27.
And in Green Tree Inn in Beijing distributed 30 and usable 27, in Shanghai
distributed 30 and usable 27, in Guangzhou distributed 30 and usable 27, in Wuhan
distributed 30 and usable 26 and in Guilin distributed 30 and usable 26.
3.5 Data Analysis
Evaluative criteria for the question items with positive meaning, the interval for
breaking the range in measuring each is calculated by
N (Width of the range)
=
Maximum – Minimum
Level
=
5–1
5
=
0.8
43
The researcher analyzed the agreement level of customer perception toward
marketing mix (7P’s), customer satisfaction and customer loyalty by calculating the
mean scores in the following ranges:
4.21 – 5.00 are considered as strongly agree
3.41 – 4.20 are considered as agree
2.61 – 3.40 are considered as neutral
1.81 – 2.60 are considered as disagree
1.00 – 1.80 are considered as strongly disagree
There were 3 parts of statistic analysis as following:
Part 1: Descriptive statistics analysis. The researcher used frequency and
percentage to describe the demography characteristics that include gender, age,
education and income.
Part 2: Agreement level analysis. The researcher used mean and standard
deviation to describe the agreement level of marketing mix (7p’s), customer
satisfaction and customer loyalty.
Part 3: Hypothesis testing. The researcher used multiple regression to find the
relationship between customer perception toward marketing mix (7P’s) and customer
satisfaction. The researcher used simple regression to find the relationship between
customer satisfaction and customer loyalty.
44
3.6 Reliability analysis
Reliability refers to the extent to which measurements of the particular test are
repeatable (Molhotra & Birks, 1999: 57). This means that the outcomes of the
measurement must be consistent with repeated sequences of measuring. The
reliability of measure will be great when the level of consistency in repeated
sequences is great.
A pre-test research instrument handed out with 30 customers to check the
clarity of each question. To prove the confident of the questionnaire researcher use
Cronbach’s Alpha to analyze the data. Nunnaly (1978) has indicated 0.7 to be an
acceptable reliability coefficient. The result of Cronbach’s validity instrument by
Cronbach for 30 questionnaire sampling and 400 questionnaires are as the table
below:
Table 3.3: Reliability of the variable (Cronbach’s Alpha)
Variable
Customer perception toward
marketing mix (7P’s)
1. Product/Service
2. Price
3. Place
4. Promotion
5. People
6. Process
7. Physical evidence
Customer satisfaction
Customer loyalty
Pre-test (30)
Actual (400)
.771
.889
.886
.869
.868
.874
.737
.843
.886
.832
.755
.852
.841
.912
.863
.796
.835
.829
45
Table 3.3 showed the pre-test and actual validity by Cronbach’s Alpha. All the
numbers of standard is greater than standardized definition at 0.70, thus, the
questionnaires for this research is validity.
46
CHAPTER 4
DATA ANALYSIS AND RESULTS
The objective of this chapter was to analysis and interprets data from
questionnaire in order to answer the research objectives.
In this chapter, the results of the data analyses consisted in 4 parts as follows:
4.1: Analyze the demography profile of the respondents, such as gender, age,
education level, income and times stay at budget hotel (frequency, percentage).
4.2: Analyze the agreement level of marketing mix (7P’s), customer satisfaction
and customer loyalty (mean, SD).
4.3: Data analysis. Hypothesis Testing followed by briefing explanting and
research objectives (Regression).
4.4: Hypothesis summary
47
4.1: Analyze the demography profile of the respondents
Table 4.1: Respondents of customers by gender
Gender
Male
Frequency%
Female
Frequency%
Total
Frequency%
7 Days Inn
56
14.0
78
19.5
134
33.5
Budget Hotel
Jin Jiang Inn
73
18.3
62
15.5
135
33.8
Total
Green Tree Inn
73
18.3
58
14.5
131
32.8
202
50.5
198
49.5
400
100.0
Table 4.1 showed that, of the 400 qualified answers, there are 202 persons
are male, accounted for 50.5% and the rest 198 respondents are female, accounted
for 49.5%.
Table 4.2: Respondents of customers by age
Age
Under 20 years old
Frequency%
20-30 years old
Frequency%
31-40 years old
Frequency%
Over 40 years old
Frequency%
Total
Frequency%
7 Days Inn
7
1.8
114
28.5
11
2.8
2
0.5
134
33.5
Budget Hotel
Jin Jiang Inn Green Tree Inn
7
20
1.8
5.0
89
74
22.3
18.5
30
28
7.5
7
9
9
2.3
2.3
135
131
33.8
32.8
Total
34
8.5
277
69.3
69
17.2
20
5.0
400
100.0
48
Table 4.2 showed that, the customer age 20-30 years was the largest, with
277 customers, accounted for 69.3% of the total number of customers. The second
largest group was 31-40 years old, with 69 customers, accounted for 17.2%. The age
under 20 years old was 34 customers, accounted for 8.5%. The age over 40 years old
formed the smallest, with 20 customers, accounted for 5.0%.
The maximum range of age in 7 Days Inn, Jin Jiang Inn and Green Tree Inn
was 20-30 years old with 114, 90 and 74 customers, accounted for 28.5%, 22.3% and
18.5%.
Table 4.3: Respondents of customers by education level
Education level
High School/Lower
Frequency%
Bachelor’s degree
Frequency%
Master’s degree
Frequency%
Doctor degree
Frequency%
Total
Frequency%
7 Days Inn
16
4.0
96
24.0
22
5.5
0
0.0
134
33.5
Budget Hotel
Jin Jiang Inn Green Tree Inn
6
24
1.5
6.0
90
75
22.5
18.8
37
26
9.3
6.5
2
6
0.5
1.5
135
131
33.8
32.8
Total
46
11.5
261
65.3
85
21.2
8
2.0
400
100.0
Table 4.3 showed that bachelor’s degree was the largest group with 261
customers, accounted for 65.3% of the total number of customers. The second largest
49
group was master’s degree, with 85 customers, accounted for 21.2%. The high
school/lower was 46, accounted for 11.5%. The doctor degree formed the smallest,
with 8 customers, accounted for 2.0%.
The maximum range of age in 7 Days Inn, Jin Jiang Inn and Green Tree Inn
was bachelor’s degree with 96, 90 and 75 customers, accounted for 24.0%, 22.5%
and 18.8%.
Table 4.4: Respondents of customers by income
Income
(RMB/Year)
Under 12,000
Frequency%
12,000-24,000
Frequency%
24,001-36,000
Frequency%
Over 36,000
Frequency%
Total
Frequency%
7 Days Inn
39
9.8
35
8.7
40
10.0
20
5.0
134
33.5
Budget Hotel
Jin Jiang Inn Green Tree Inn
24
34
6.0
8.5
34
33
8.5
8.3
40
29
10.0
7.3
37
35
9.3
8.7
135
131
33.8
32.8
Total
97
24.3
102
25.5
109
27.2
92
23.0
400
100.0
Table 4.4 showed that income 24,001-36,000 RMB/Year was the largest
group with 109 customers, accounted for 27.2% of the total number of customers. The
second largest group was 12,000-24,000 RMB/Year, with 102 customers, accounted
for 25.5%. The under 12,000 RMB/Year was 97 customers, accounted for 24.3%. The
50
over 36,000 RMB/Year formed the smallest, with 92 customers, accounted for 23.0%.
The maximum range of age in 7 Days Inn and Jin Jiang Inn was
24,001-36,000 RMB/Year with 40 and 40 customers, accounted for 10.0% and 10.0%.
And for Green Tree Inn was over 36,000 RMB/Year with 35 customers, accounted for
8.7%.
Table 4.5: Respondents of customers by times stay at budget hotel
Times stay at budget
hotel
(per year)
1 time
Frequency%
2 times
Frequency%
3 times
Frequency%
4 times
Frequency%
5 times
Frequency%
More than 5 times
Frequency%
Total
Frequency%
7 Days Inn
27
6.7
35
8.7
27
6.8
15
3.8
24
6.0
6
1.5
134
33.5
Budget Hotel
Jin Jiang Inn Green Tree Inn
15
3.8
35
8.8
20
5.0
20
5.0
14
3.5
31
7.8
135
33.8
19
4.8
33
8.3
13
3.2
24
6.0
16
4.0
26
6.5
131
32.8
Total
61
15.2
103
25.8
60
15.0
59
14.7
38
9.5
79
19.8
400
100.0
Table 4.5 showed that 2 times was the largest group with 103 customers,
accounted for 25.8% of the total number of customers. The second largest group was
51
more than 5 times, with 79 customers, accounted for 19.8%. The 1 time was 61,
accounted for 15.2%. The 3 times was 60, accounted for 15.0%. The 4 times was 59,
accounted for 14.7%.The 5 times formed the smallest, with 38 customers, accounted
for 9.5%.
The maximum range of age in 7 Days Inn, Jin Jiang Inn and Green Tree Inn
was 2 times with 35, 35 and 33 customers, accounted for 8.7%, 8.8% and 8.3%.
4.2: Analyze the agreement level of customer perception toward marketing mix
(7p’s), customer satisfaction and customer loyalty.
The following data analysis results showed the level of agreement related to 3
issues that include customer perception toward marketing mix (7p’s), customer
satisfaction and customer loyalty.
52
Table 4.6: Analysis of the agreement level of product/service of customer perception toward marketing mix (7P’s)
Product/service
7 Days Inn
Jin Jiang Inn
Green Tree Inn
Mean SD Level of Mea SD Level of Mean
SD
Level of Mean
Agreement n
Agreement
Agreement
Total
SD
Level of
Agreement
1. Clean and comfortable
guest room
2. Good atmosphere in
guest room
3. Variety of facilities in
guest room (e.g. TV,
Telephone,
Air-condition,
refrigerator)
4. Standard hotel design
5. Size of guest room
6. Choice of room type
for customers
7. Design/look of guest
room
8. Smoking and
non-smoking rooms
9. Consistent service
standard
10. Customers’ safety
and security
Total
4.04
.750
Agree
3.97 .712
Agree
3.82
.685
Agree
3.95
.720
Agree
3.87
.793
Agree
3.79 .767
Agree
3.5
.915
Agree
3.72
.839
Agree
.
3.90
825
Agree
4.01 .586
Agree
3.91
.547
Agree
3.94
.665
Agree
3.63
3.63
3.56
.829
.782
.800
Agree
Agree
Agree
3.81 .735
3.61 .773
3.56 .852
Agree
Agree
Agree
3.53
3.21
3.31
.787
.966
.953
Agree
Neutral
Neutral
3.66
3.49
3.48
.791
.864
.875
Agree
Agree
Agree
3.51
.829
Agree
3.62 .752
Agree
3.54
.704
Agree
3.56
.763
Agree
3.51
.924
Agree
3.82 .953
Agree
3.62
1.099
Agree
3.65
Agree
3.62
.883
Agree
3.69 .859
Agree
3.34
1.014
Neutral
3.55
1.00
0
.930
3.81
.911
Agree
3.85 .797
Agree
3.59
.822
Agree
3.75
.850
Agree
3.71
.832
Agree
3.77
Agree
3.537
.8492
Agree
3.67
.83
Agree
.78
Agree
52
53
Table 4.6 showed the agreement level of product/service of customer
perception toward marketing mix (7P’s) in 7 Days Inn, Jin Jiang Inn and Green Tree Inn.
The mean score product/service at 7 Days Inn (mean= 3.71 and SD=0.832), Jin Jiang
Inn (mean= 3.77 and SD=0.78) and Green Tree Inn (mean= 3.537 and SD=0.8492). All
these 3 budget hotels were considered as the agree level of the agreement level.
In 7 Days Inn, “clean and comfortable guest room” (mean=4.04 and SD= 0.750)
in agree level is the highest of product/service. “Design/look of guest room” (mean=
3.51 and SD= 0.829) and “smoking and non-smoking rooms” (mean= 3.51 and SD=
0.924) are the lowest that in agree level.
In Jin Jiang Inn, “variety of facilities in guest room (e.g. TV, Telephone,
Air-condition, refrigerator.)” in agree level (mean= 4.01 and SD= 0.586) is the highest
level of product/service, “choice of room type for customers” (mean = 3.56, SD = 0.852)
is the lowest that in agree level.
In Green Tree Inn, “variety of facilities in guest room (e.g. TV, Telephone,
Air-condition, refrigerator)” (mean=3.91 and SD= 0.547) in agree level is the highest
level of product/service, “size of guest room” (mean=3.21 and SD= 0.966) is the lowest
that in neutral level.
54
Table 4.7: Analysis of the agreement level of price of customer perception toward marketing mix (7P’s)
Price
1. Reasonable price
2. Lower price than
similar other hotels
(e.g. motel,
bungalow,
guesthouse, home
stay…)
3. Value money for
customer paid
4. Good price range
for guest room
5. Consistent price
policy
Total
Jin Jiang Inn
Green Tree Inn
7 Days Inn
Mean SD Level of Mean SD Level of Mean
SD
Level of Mean
Agreement
Agreement
Agreement
3.91 .930
Agree
4.10 .766
Agree
4.16
.858
Agree
4.06
Total
SD
Level of
Agreement
.858
Agree
3.34
.943
Neutral
3.57
.787
Agree
3.6
.698
Agree
3.51
.823
Agree
3.61
.917
Agree
3.67
.810
Agree
3.57
.832
Agree
3.62
.853
Agree
3.61
.875
Agree
3.70
.840
Agree
3.47
.88
Agree
3.60
.868
Agree
3.54
.742
Agree
3.72
.719
Agree
3.8
.673
Agree
3.69
.718
Agree
3.60
.881
Agree
3.75
.78
Agree
3.72
.7882
Agree
3.69
.82
Agree
54
55
Table 4.7 showed the agreement level of price of customer perception toward
marketing mix (7P’s) in 7 Days Inn, Jin Jiang Inn and Green Tree Inn. The mean score
price at 7 Days Inn (mean= 3.60 and SD=0.881), Jin Jiang Inn (mean= 3.75 and
SD=0.78) and Green Tree Inn (mean= 3.72 and SD=0.7882). All these 3 budget hotels
were considered as the agree level of the agreement level.
In 7 Days Inn, “’reasonable price” (mean=3.91 and SD= 0.930) in agree level is
the highest of price. “Lower price than similar other hotels” (e.g. motel, bungalow,
guesthouse, home stay…) (mean= 3.34 and SD= 0.943) is the lowest that in neutral
level.
In Jin Jiang Inn, “reasonable price” (mean= 4.01 and SD= 0.586) in agree level
is the highest of price. “Lower price than similar other hotels” (e.g. motel, bungalow,
guesthouse, home stay…) (mean = 3.57, SD = 0.787) is the lowest that in agree level.
In Green Tree Inn, “reasonable price” (mean=4.16 and SD= 0.858) in agree
level is the highest of price. “Good price range for guest room” (mean=3.47 and SD=
0.88) is the lowest that in agree level.
56
Table 4.8: Analysis of the agreement level of place of customer perception toward marketing mix (7P’s)
Place
Mean
1. Size of hotel
network
2. Geographic
coverage of hotel
network
3. Central
sales/reservation
system
4. Convenient
location
5. Convenient
transportation with
signs
6. Enough parking
area
Total
3.70
7 Days Inn
SD
Level of
Agreement
.901
Agree
Jin Jiang Inn
Mean
SD
Level of
Agreement
3.64
.903
Agree
Mean
3.47
Green Tree Inn
SD
Level of
Agreement
.797
Agree
Mean
Total
SD
3.60
.873
Level of
Agreement
Agree
3.84
.824
Agree
3.71
.897
Agree
3.52
.727
Agree
3.69
.828
Agree
3.73
.860
Agree
3.81
1.018
Agree
3.4
.958
Neutral
3.65
.962
Agree
3.91
.699
Agree
4.09
.717
Agree
4
.582
Agree
4.00
.672
Agree
3.75
.856
Agree
3.92
.881
Agree
3.69
.805
Agree
3.79
.852
Agree
3.61
.813
Agree
3.61
.898
Agree
3.38
.924
Neutral
3.54
.883
Agree
3.76
.83
Agree
3.80
.89
Agree
3.5767
.7988
Agree
3.71
.84
Agree
56
57
Table 4.8 showed the agreement level of place of customer perception toward
marketing mix (7P’s) in 7 Days Inn, Jin Jiang Inn and Green Tree Inn. The mean score
place at 7 Days Inn (mean= 3.76 and SD=0.83), Jin Jiang Inn (mean= 3.80 and
SD=0.89) and Green Tree Inn (mean= 3.5767 and SD=0.7966). All these 3 budget
hotels were considered as the agree level of the agreement level.
“Convenient location” of all these 3 budget hotels in agree level is the highest
of place. 7 Days Inn (mean=3.91 and SD= 0.699), Jin Jiang Inn (mean= 4.09 and SD=
0.717) and Green Tree Inn (mean=4 and SD= 0.582). “Enough parking” of 7 Days Inn
(mean= 3.61 and SD= 0.898), Jin Jiang Inn (mean = 3.61, SD = 0.787) in agree level
and Green Tree Inn (mean=3.38 and SD= 0.924) is the lowest that in the neutral level.
58
Table 4.9: Analysis of the agreement level of promotion of customer perception toward marketing mix (7P’s)
Promotion
1. Customer
loyalty/repeat
business
2. Attractive
advertisements or
promotions
3. Benefit for
members
4. Corporate
contracts
5. Strong brand
difference
6. Online
reservation get
discount
7. Loyalty card (VIP
card) gets more
discount
8. Special
promotional
activities on
special day
(Teachers’ day,
Mothers’ day, etc)
Total
Mean
7 Days Inn
Jin Jiang Inn
Green Tree Inn
SD Level of Mean
SD
Level of Mean
SD
Agreement
Agreement
Level of
Agreement
Mean
Total
SD
Level of
Agreement
3.66
.833
Agree
3.78
.687
Agree
3.76
.634
Agree
3.73
.723
Agree
3.49
.811
Agree
3.67
.999
Agree
3.79
.909
Agree
3.65
.916
Agree
3.69
.903
Agree
3.76
.815
Agree
3.58
.723
Agree
3.68
.819
Agree
3.38
.874
Neutral
3.59
.925
Agree
3.15
.946
Neutral
3.38
.931
Agree
3.37
.761
Neutral
3.74
.712
Agree
3.63
.624
Agree
3.58
.718
Agree
3.76
.959
Agree
3.81
.784
Agree
3.57
.795
Agree
3.72
.854
Agree
3.95
.852
Agree
3.76
.916
Agree
3.67
.827
Agree
3.80
.872
Agree
3.53
.915
Agree
3.33
1.000
Neutral
3.15
.915
Neutral
3.34
.955
Neutral
3.60
.86
Agree
3.68
.85
Agree
3.5375 .7966
Agree
3.61
.85
Agree
58
59
Table 4.9 showed the agreement level of promotion of customer perception
toward marketing mix (7P’s) in 7 Days Inn, Jin Jiang Inn and Green Tree Inn. The mean
score promotion at 7 Days Inn (mean= 3.60 and SD=0.86), Jin Jiang Inn (mean= 3.68
and SD=0.85) and Green Tree Inn (mean= 3.5375 and SD=0.7966). All these 3 budget
hotels were considered as the agree level of the agreement level.
In 7 Days Inn, “loyalty card (VIP card) gets more discount” (mean=3.95 and
SD= 0.852) in agree level that is the highest of promotion. “Strong brand difference”
(mean= 3.37 and SD= 0.761) is the lowest that in neutral level.
In Jin Jiang Inn, “online reservation get discount” (mean = 3.81 and SD = 0.784)
in agree level that is the highest of price. “Special promotional activities on special day
(Teachers’ day, Mothers’ day etc.)” (mean = 3.33, SD = 1.000) is the lowest that in
neutral level.
In Green Tree Inn, “attractive advertisements or promotions” (mean = 3.79 and
SD = 0.909) in agree level that is the highest of price. “Corporate contracts” (mean =
3.15 and SD = 0.946) and “special promotional activities on special day (Teachers’ day,
Mothers’ day etc.)” (Mean = 3.15 and SD = 0.915) are the lowest that in agree level.
60
Table 4.10: Analysis of the agreement level of people of customer perception toward marketing mix (7P’s)
People
Mean
1. Friendly staff
2. Staff has
knowledge and
skill
3. Staff has the
ability to provide
prompt services
4. Staff is willing to
serve
5. Adequate staff
provide service
6. Speed of guest
service
7. Efficiency of
guest service
Total
3.88
7 Days Inn
SD
Level of
Agreement
.859
Agree
Jin Jiang Inn
Mean SD
Level of
Agreement
3.85 .877
Agree
Green Tree Inn
Mean
SD
3.71
.818
Level of
Agreement
Agree
Mean
Total
SD
3.82
.853
Level of
Agreement
Agree
3.68
.855
Agree
3.57
.778
Agree
3.47
.727
Agree
3.58
.791
Agree
3.75
.853
Agree
3.72
.911
Agree
3.62
.759
Agree
3.70
.844
Agree
3.70
.966
Agree
3.85
.806
Agree
3.63
.852
Agree
3.73
.880
Agree
3.72
.872
Agree
3.65
.858
Agree
3.44
.824
Agree
3.61
.858
Agree
3.83
.818
Agree
3.94
.790
Agree
3.98
.718
Agree
3.92
.777
Agree
3.83
.854
Agree
3.84
.897
Agree
3.63
.871
Agree
3.77
.878
Agree
3.77
.87
Agree
3.78
.85
Agree
3.64
.7956
Agree
3.73
.84
Agree
60
61
Table 4.10 showed the agreement level of people of customer perception
toward marketing mix (7P’s) in 7 Days Inn, Jin Jiang Inn and Green Tree Inn. The mean
score people at 7 Days Inn (mean= 3.77 and SD=0.87), Jin Jiang Inn (mean= 3.78 and
SD=0.85) and Green Tree Inn (mean= 3.64 and SD=0.7956). All these 3 budget hotels
were considered as the agree level of the agreement level.
In 7 Days Inn, “friendly staff” (mean=3.88 and SD= 0.859) in agree level is the
highest of people. “Staff has knowledge and skill” (mean= 3.68 and SD= 0.855) is the
lowest that in agree level.
In Jin Jiang Inn, “speed of guest service” (mean = 3.94 and SD = 0.790) in
agree level is the highest of people. “Staff has knowledge and skill” (mean = 3.57, SD =
0.778) is the lowest that in agree level.
In Green Tree Inn, “speed of guest service” (mean = 3.98 and SD = 0.718) in
agree level is the highest of people. “Adequate staff provide service” (mean = 3.44 and
SD = 0.824) are the lowest that in agree level.
62
Table 4.11: Analysis of the agreement level of process of customer perception toward marketing mix (7P’s)
Process
Mean
1. Staffs handle
customer’s
reservation
efficiently
2. Staffs give careful
and thorough
service to
customers
3. Staffs give
prompt services to
customers
4. Staffs provide
service at the
promised time
Total
7 Days Inn
SD
Level of
Agreement
Jin Jiang Inn
Mean SD
Level of
Agreement
Mean
Green Tree Inn
SD
Level of
Agreement
Mean
Total
SD
Level of
Agreement
3.88
.776
Agree
3.95
.756
Agree
3.98
.769
Agree
3.94
.766
Agree
3.87
.913
Agree
3.92
.723
Agree
3.79
.772
Agree
3.86
.806
Agree
3.77
.917
Agree
3.85
.652
Agree
3.89
.787
Agree
3.84
.792
Agree
3.83
.761
Agree
3.86
.693
Agree
3.86
.752
Agree
3.85
.734
Agree
3.84
.84
Agree
3.89
.71
Agree
3.88
.77
Agree
3.87
.77
Agree
62
63
Table 4.11 showed the agreement level of process of customer perception
toward marketing mix (7P’s) in 7 Days Inn, Jin Jiang Inn and Green Tree Inn. The mean
score process at 7 Days Inn (mean= 3.84 and SD=0.84), Jin Jiang Inn (mean= 3.89
and SD=0.71) and Green Tree Inn (mean= 3.88 and SD=0.77). All these 3 budget
hotels were considered as the agree level of the agreement level.
In 7 Days Inn, “staffs handle customer’s reservation efficiently” (mean=3.88 and
SD= 0.776) in agree level that is the highest of process. “Staffs give prompt services to
customers” (mean= 3.83 and SD= 0.84) is the lowest that in agree level.
In Jin Jiang Inn, “staffs handle customer’s reservation efficiently” (mean= 3.95
and SD= 0.756) in agree level that is the highest of process. “Staffs give prompt
services to customers” (mean = 3.85, SD = 0.652) is the lowest that in agree level.
In Green Tree Inn, “staffs handle customer’s reservation efficiently” (mean=3.98
and SD= 0.769) in agree level that is the highest of process. “Staffs give careful and
thorough service to customers” (mean=3.79 and SD=0.772) are the lowest that in agree
level.
64
Table 4.12: Analysis of the agreement level of physical evidence of customer perception toward marketing mix (7P’s)
Physical
evidence
1. Good facilities
2. Staff has
clean, neat
uniforms
3. Appealing
hotel
atmosphere and
decoration
4. The visually
attractive
outdoor
surroundings
Total
Jin Jiang Inn
Green Tree Inn
7 Days Inn
Mean
SD
Level of Mean SD
Level of
Mean SD
Agreement
Agreement
3.81
.851
Agree
3.73 .821
Agree
3.47 .694
Level of
Agreement
Agree
Mean
3.68
Total
SD
Level of
Agreement
.804
Agree
3.99
.795
Agree
3.77
.753
Agree
3.68
.767
Agree
3.81
.780
Agree
3.59
.959
Agree
3.53
.845
Agree
3.32
.888
Neutral
3.48
.904
Agree
3.78
.921
Agree
3.59
.757
Agree
3.63
.817
Agree
3.67
.836
Agree
3.79
.88
Agree
3.65
.79
Agree
3.525
.7915
Agree
3.66
.83
Agree
64
65
Table 4.12 showed the agreement level of physical evidence of customer
perception toward marketing mix (7P’s) in 7 Days Inn, Jin Jiang Inn and Green Tree Inn.
The mean score physical evidence at 7 Days Inn (mean= 3.79 and SD=0.88), Jin Jiang
Inn (mean= 3.65 and SD=0.79) and Green Tree Inn (mean= 3.525 and SD=0.7915). All
these 3 budget hotels were considered as agree level of the agreement level.
“Staff has clean, neat uniforms” of these 3 budget hotels in agree level is the
highest of physical evidence. 7 Days Inn (mean=3.99 and SD= 0.795), Jin Jiang Inn
(mean= 3.77 and SD= 0.753) and Green Tree Inn (mean=3.68 and SD= 0.767).
“Appealing hotel atmosphere and decoration” of 7 Days Inn (mean= 3.59 and SD=
0.959), Jin Jiang Inn (mean = 3.53, SD = 0.845) in agree level and Green Tree Inn
(mean=3.32 and SD=0.888) in neutral level are the lowest.
66
Table 4.13: Analysis of the agreement level of customer perception toward marketing mix (7P’s)
Marketing mix
(7P’s)
Jin Jiang Inn
Green Tree Inn
7 Days Inn
Mean
SD
Level of Mean SD
Level of
Mean SD
Level of
Agreement
Agreement
Agreement
3.71
.832
Agree
3.77 .78
Agree
3.537 .8492
Agree
3.60
.881
Agree
3.75 .78
Agree
3.72 .7882
Agree
3.76
.83
Agree
3.80 .89
Agree
3.5767 .7988
Agree
3.60
.86
Agree
3.68 .85
Agree
3.5375 .7966
Agree
3.77
.87
Agree
3.78 .85
Agree
3.64 .7956
Agree
3.84
.84
Agree
3.89 .71
Agree
3.88
.77
Agree
3.79
.88
Agree
3.65 .79
Agree
3.525 .7915
Agree
1.Product/Service
2.Price
3.Place
4.Promotion
5.People
6.process
7.Physical
evidence
Total
3.7242 0.8561
Agree
3.7783 0.81
Agree
3.6485 .7997
Agree
Mean
3.67
3.69
3.71
3.61
3.73
3.87
3.66
Total
SD
Level of
Agreement
.83
Agree
.82
Agree
.84
Agree
.85
Agree
.84
Agree
.77
Agree
.83
Agree
3.7057 0.8257
Agree
66
67
Table 4.13 showed the agreement level of customer perception toward
marketing mix (7P’s) in 7 Days Inn, Jin Jiang Inn and Green Tree Inn.
The mean score “product/service” at 7 Days Inn (mean= 3.71 and SD=0.832),
Jin Jiang Inn (mean= 3.77 and SD=0.78) and Green Tree Inn (mean= 3.537 and
SD=0.8492). All these 3 budget hotels were considered as the agree level of the
agreement level.
The mean score “price” at 7 Days Inn (mean= 3.60 and SD=0.881), Jin Jiang
Inn (mean= 3.75 and SD=0.78) and Green Tree Inn (mean= 3.72 and SD=0.7882). All
these 3 budget hotels were considered as the agree level of the agreement level.
The mean score “place” at 7 Days Inn (mean= 3.76 and SD=0.83), Jin Jiang
Inn (mean= 3.80 and SD=0.89) and Green Tree Inn (mean= 3.5767 and SD=0.7966).
All these 3 budget hotels were considered as the agree level of the agreement level.
The mean score “promotion” at 7 Days Inn (mean= 3.60 and SD=0.86), Jin
Jiang Inn (mean= 3.68 and SD=0.85) and Green Tree Inn (mean= 3.5375 and
SD=0.7966). All these 3 budget hotels were considered as the agree level of the
agreement level.
The mean score “people” at 7 Days Inn (mean= 3.77 and SD=0.87), Jin Jiang
Inn (mean= 3.78 and SD=0.85) and Green Tree Inn (mean= 3.64 and SD=0.7956). All
these 3 budget hotels were considered as the agree level of the agreement level.
The mean score “process” at 7 Days Inn (mean= 3.84 and SD=0.84), Jin
Jiang Inn (mean= 3.89 and SD=0.71) and Green Tree Inn (mean= 3.88 and SD=0.77).
All these 3 budget hotels were considered as the agree level of the agreement level.
68
The mean score “physical evidence” at 7 Days Inn (mean= 3.79 and
SD=0.88), Jin Jiang Inn (mean= 3.65 and SD=0.79) and Green Tree Inn (mean= 3.525
and SD=0.7915). All these 3 budget hotels were considered as agree level of the
agreement level.
In the total of customer perception toward marketing mix (7P’s),
“product/service” (mean= 3.67 and SD=0.83), “price” (mean= 3.69 and SD=0.82),
“place” (mean= 3.71 and SD=0.84), “promotion” (mean= 3.61 and SD=0.85), “people”
(mean= 3.73 and SD=0.84), “process” (mean= 3.87 and SD=0.77) and “physical
evidence” (mean= 3.66 and SD=0.83), were considered as the agree level of the
agreement level.
The overall customer perception toward marketing mix (7P’s) (mean= 3.7057
and SD= 0.8257), was considered as the agree level of the agreement level.
69
Table 4.14: Analysis of the agreement level of customer satisfaction
Customer
satisfaction
1. I am satisfied
with the guest
room
2. I am satisfied
with the price
3. I am satisfied
with the location
4. I am satisfied
with the
promotion
5. I am satisfied
with the staff
6. I am satisfied
with the service
7. I am satisfied
with the
atmosphere
8. Overall, I am
satisfied with this
budget hotel
9. Overall, I am
satisfied with
service quality in
budget hotel
Total
Mean
Jin Jiang Inn
7 Days Inn
SD
Level
Mean SD
Level
of
of
Agreement
Agreement
Mean
Green Tree Inn
SD
Level
of
Agreement
Mean
Total
SD
Level
of
Agreement
3.67
.680
Agree
3.78
.709
Agree
3.73
.669
Agree
3.73
.686
Agree
3.54
.837
Agree
3.61
.680
Agree
3.45
.736
Agree
3.54
.755
Agree
3.66
.822
Agree
3.66
.830
Agree
3.53
.797
Agree
3.62
.817
Agree
3.37
.763
Neutral
3.49
.742
Agree
3.63
.694
Agree
3.50
.739
Agree
3.55
.828
Agree
3.73
.651
Agree
3.73
.702
Agree
3.67
.734
Agree
3.65
.869
Agree
3.86
.735
Agree
3.73
.795
Agree
3.75
.804
Agree
3.57
.709
Agree
3.61
.680
Agree
3.4
.687
Neutral
3.53
.697
Agree
3.49
.763
Agree
3.58
.640
Agree
3.47
.648
Agree
3.52
.686
Agree
3.54
.762
Agree
3.42
.617
Agree
3.37
.647
Neutral
3.44
.680
Agree
3.56
.78
Agree
3.64
.70
Agree
3.56
.7083
Agree
3.59
.73
Agree
69
70
The Table 4.14 showed the level of agreement on customer satisfaction in 7
Days Inn, Jin Jiang Inn and Green Tree Inn.
The mean score and SD of customer satisfaction for 7 Days Inn (mean= 3.56
and SD= 0.78), Jin Jiang Inn (mean= 3.64 and SD= 0.70), and Green Tree Inn (mean=
3.56 and SD= 0.7083). All these 3 budget hotels were considered as agree level of the
agreement level.
In 7 Days Inn, “I am satisfied with the guest room” (mean=3.67 and SD= 0.680)
in agree level that is the highest of process. “I am satisfied with the promotion” (mean=
3.37 and SD= 0.763) is the lowest that in neutral level.
In Jin Jiang Inn, “I am satisfied with the service” (mean= 3.86 and SD= 0.735)
in agree level that is the highest of process. “Overall, I am satisfied with service quality
in budget hotel” (mean = 3.42, SD = 0.617) is the lowest that in agree level.
In Green Tree Inn, “I am satisfied with the guest room” (mean=3.73 and SD=
0.669), “I am satisfied with the staff” (mean=3.73 and SD= 0.702) and “I am satisfied
with the service” (mean = 3.73 and SD =0.795) in agree level that is the highest of
process. “Overall, I am satisfied with service quality in budget hotel” (mean=3.37 and
SD=0.647) are the lowest that in neutral level.
The total of customer satisfaction was considered as agree level shown at
mean= 3.59 and SD= 0.73.
71
Table 4.15: Analysis of the agreement level of customer loyalty
Customer loyalty
1. I share the
pleasure staying
experience about
this budget hotel
with others
2. I share the
positive ideas
about this budget
hotel with others
3. I share the
positive
information about
this budget hotel
with others
4. I say the positive
things about this
budget hotel to
others
5. I will keep
staying in this
budget hotel next
time
6. I will recommend
my friends to stay
in this budget
hotel
7. Overall, I will be
the loyal
customer
Total
Jin Jiang Inn
Green Tree Inn
7 Days Inn
Level
Level
Level
of
Mean SD
of
SD
of
Mean
Mean
Mean
SD
Agreement
Agreement
Agreement
Total
SD
Level
of
Agreement
3.37
.761
Neutral
3.68
.816
Agree
3.53
.778
Agree
3.53
.794
Agree
3.29
.866
Neutral
3.64
.749
Agree
3.6
.698
Agree
3.51
.788
Agree
3.60
.824
Agree
3.61
.692
Agree
3.41
.711
Agree
3.54
.748
Agree
3.70
.859
Agree
3.61
.586
Agree
3.56
.681
Agree
3.63
.718
Agree
3.68
.800
Agree
3.65
.736
Agree
3.4
.676
Neutral
3.58
.749
Agree
3.53
.829
Agree
3.74
.
763
Agree
3.73
.821
Agree
3.67
.808
Agree
3.24
3.49
.768
.82
Neutral
Agree
3.55
3.64
.631
.71
Agree
Agree
3.47
.705
3.5286 .7243
Agree
Agree
3.42
3.55
.714
.76
Agree
Agree
71
72
The Table 4.15 showed the level of agreement on customer satisfaction in 7
Days Inn, Jin Jiang Inn and Green Tree Inn.
The mean score and SD of customer loyalty for 7 Days Inn (mean= 3.49 and
SD= 0.82), Jin Jiang Inn (mean= 3.64 and SD= 0.71), and Green Tree Inn (mean=
3.5286 and SD= 0.7243). All these 3 budget hotels were considered as agree level of
the agreement level.
In 7 Days Inn, “I say the positive things about this budget hotel to others”
(mean=3.70 and SD= 0.859) in agree level that is the highest of process. “Overall, I will
be the loyal customer” (mean= 3.24 and SD= 0.768) is the lowest that in neutral level.
In Jin Jiang Inn, “I will recommend my friends to stay in this budget hotel”
(mean= 3.74 and SD= 0.763) in agree level that is the highest of process. “Overall, I will
be the loyal customer” (mean = 3.55, SD = 0.631) is the lowest that in agree level.
In Green Tree Inn, “I will recommend my friends to stay in this budget hotel”
(mean=3.73 and SD= 0.821), “I will keep staying in this budget hotel next time”
(mean=3.4 and SD=0.676) are the lowest that in neutral level.
The total of customer loyalty was considered as agree level shown at mean=
3.55 and SD= 0.76.
73
4.3: Data analysis. Hypothesis Testing followed by briefing explanting and research
objectives.
Hypothesis 1: Customer perception toward marketing mix (7p’s) and customer
satisfaction
H1: Customer perception toward marketing mix (7P’s) has a positive impact on customer
satisfaction.
Table 4.16: Regression analyses between customer perception
toward marketing mix (7P’s) and customer satisfaction
Model summary
Adjusted R Square
Std. Error of the Estimate
.659
.434
.424
.36601
a. Predictors: (Constant), product/service, price, place, promotion, people, process and
physical evidence
ANOVA (b)
R
a
R Square
Sum of Squares df
Mean Square
F
Sig.
Regression
40.273
7
5.753 42.946 .000a
Residual
52.514
392
.134
Total
92.787
399
a. Predictors: (Constant), product/service, price, place, promotion, people, process and
physical evidence
b. Dependent Variable: customer satisfaction
* The mean difference is significant at the .05 level.
74
Coefficients (a)
Standardized t
Unstandardized
Coeffienents
Coeffienents
B
Std. Error Beta
(Constant)
1.294
.148
product/service
.229
.050
.250
Price
.018
.043
.022
Place
-.037
.043
-.050
Promotion
.304
.049
.371
People
.073
.053
.102
Process
-.021
.044
-.028
Physical evidence
.064
.045
.087
a. Predictors: (Constant), customer satisfaction
* The mean difference is significant at the .05 level.
Sig.
8.773
4.622
.411
-.871
6.271
1.359
-.474
1.433
.000
.000
.681
.384
.000
.175
.636
.153
The result of the multiple regression analysis, as presented in Table 4.16
indicated that the value of Adjusted R2 = 0.424, indicating that 42.4% of the variation in
the customer satisfaction was influenced by customer perception toward marketing mix
(7P’s). The significant level of regression was 0.000 (sig < 0.05), the significant level of
product/service and promotion were 0.000 (sig < 0.05). The results indicated that H1:
customer perception toward marketing mix (7P’s) has a positive impact on customer
satisfaction was supported. Furthermore, customer perception toward product/service
and customer perception toward promotion were statistically significant. Thus, customer
perception toward product/service and customer perception toward promotion were
significantly associated with customer satisfaction.
75
Hypothesis 2: Customer satisfaction and customer loyalty
H2: Customer satisfaction has a positive impact on customer loyalty.
Table 4.17: Regression analyses between customer satisfaction and customer loyalty
Model summary
Adjusted R Square
Std. Error of the Estimate
R
R Square
a
.627
.393
.392
.41716
a. Predictors: (Constant), customer satisfaction
ANOVA (b)
Mean Square
F
Sig.
Sum of Squares df
Regression
44.850
1
44.850 257.728 .000a
Residual
69.261
398
.174
Total
114.111
399
a. Predictors: (Constant), customer satisfaction
b. Dependent Variable: customer loyalty
* The mean difference is significant at the .05 level.
Coefficients (a)
Unstandardized
Standardized t
Sig.
Coeffienents
Coeffienents
B
Std. Error
Beta
(constant)
1.059
.157
6.755 .000
Customer satisfaction
.695
.043
.627 16.054 .000
a. Predictors: (Constant), customer loyalty
* The mean difference is significant at the .05 level.
76
The single regression analysis was performed to examine the relationship
between customer satisfaction and customer loyalty. According to the result presented
in Table 4.17, it was found that the significant level was 0.000 (sig < 0.05) and the
customer satisfaction was correlated 39.2% (Adjusted R2 = 0.392) with customer loyalty,
indicating the marked relationship was existed between customer satisfaction and
customer loyalty. This meant that the customer loyalty was influenced by their
satisfaction. Therefore, H2: Customer satisfaction has a positive impact on customer
loyalty was supported.
77
4.4: Hypothesis summary
The summary of the result of hypothesis testing analyses in budget hotels
(7 Days Inn, Jin Jiang Inn and Green Tree Inn) in China (Beijing, Shanghai, Guangzhou,
Wuhan and Guilin) was showed as follow:
H1 was the Hypotheses testing between customer perception toward marketing
mix (7P’s) and customer satisfaction, and H2 was the Hypotheses testing between
customer satisfaction and customer loyalty.
Table 4.18: The summary for all hypotheses
Hypotheses
Result
Customer perception toward marketing mix (7p’s) and customer satisfaction
H1: Customer perception toward marketing mix (7p’s) has a positive impact Supported
on customer satisfaction.
Customer perception toward product/service and promotion has a positive impact on
custom satisfaction.
Customer perception toward price, place, people, process and physical evidence have a
negative impact on customer satisfaction.
Customer loyalty and customer satisfaction
H2: Customer satisfaction has a positive impact on customer loyalty.
Supported
78
CHAPTER 5
CONCLUSION, DISCUSSION AND RECOMMENDATION
The results reported in chapter 4 were discussed in greater detail in chapter 5.
The chapter is presented in five sections as follows:
5.1 Conclusion of findings
5.2 Discussion
5.3 Management implication
5.4 Research recommendations
5.5 Limitation and further research
79
5.1 Conclusion of findings
5.1.1 Demography characteristics
Based on 400 usable data from customers who stay at three budget hotels (7
Days Inn, Jin Jiang Inn and Green Tree Inn) in five cities (Beijing, Shanghai,
Guangzhou, Wuhan and Guilin) in China, we can find that the number of male
customers and female customers are almost the same (male 202, female 198), most of
customers are 20-30 years old, education of bachelor’s degree, income 24,001-36,000
RMB/Year, stay at budget hotel 2 times/Year.
5.1.2 Customer perception toward marketing mix (7P’s)
Marketing mix (7P’s) consisted of 7 elements that are product/service, price,
place, promotion, people, process and physical evidence. The results of data analysis
on level of agreement are as follow:
Most respondents of product/service in 7 Days Inn and Green Tree Inn were
“clean and comfortable guest room” in agree level, in Jin Jiang Inn is “variety of facilities
in guest room (e.g. TV, Telephone, Air-condition, refrigerator)” in agree level.
Most respondents of price in these 3 budget hotels were “reasonable price in
agree level”.
Most respondents of place in these 3 budget hotels were “convenient location
in agree level”.
80
Most respondents of promotion in 7 Days Inn were “loyalty card (VIP card) gets
more discount” in agree level, in Jin Jiang Inn is “online reservation gets discount” in
agree level and in Green Tree Inn were “attractive advertisements or promotions” in
agree level.
Most respondents of people in 7 Days Inn were “friendly staff” in agree level, in
Jin Jiang Inn and Green Tree Inn is “high speed of guest service” in agree level.
Most respondents of process in these 3 budget hotels were “staff handle
customer’s reservation efficiently” in agree level.
Most respondents of physical evidence in these 3 budget hotels were “staff has
clean, neat uniforms” in agree level.
Most respondents of marketing mix (7P’s) in 7 Days Inn and Jin Jiang Inn were
is process in agree level, and in Green Tree Inn was place in agree level.
5.1.3 Customer satisfaction
Most respondents of customer satisfaction in 7 Days Inn were “I am satisfied
with the guest room” in agree level, in Jin Jiang Inn were “I am satisfied with the
service” in agree level and in Green Tree Inn were “I am satisfied with the guest room,
staff and service” in agree level.
81
5.1.4 Customer loyalty
Most respondent of customer loyalty in 7 Days Inn were “I say the positive
things about this budget hotel to others” in agree level, in Jin Jiang Inn and Green Tree
Inn were “I will bring my friends to stay in this budget hotel” in agree level.
5.1.5 Hypotheses conclusion
Hypothesis 1: Customer perception toward marketing mix (7p’s) and customer
satisfaction
This hypothesis was designed to identify the relationship between customer
perception toward marketing mix (7P’s) and customer satisfaction. The result of this
hypothesis test showed that customer perception toward marketing mix (7P’s:
product/service, price, place, promotion, people, process, and physical evidence) has a
positive impact on customer satisfaction. Further more, customer perception toward
product/service and promotion had a positive impact on custom satisfaction. However,
customer perception toward price, place, people, process and physical evidence had a
negative impact on customer satisfaction.
Hypothesis 2: Customer satisfaction and customer loyalty
H2: Customer satisfaction has a positive impact on customer loyalty.
This hypothesis was designed to identify the relationship between customer
satisfaction and customer loyalty. The result of this hypothesis test showed that
82
customer satisfaction has a positive impact on customer loyalty.
5.2 Discussion
5.2.1 The relationship between customer perception toward marketing mix (7P’s)
and customer satisfaction
This research studied the customer perception toward marketing mix (7p’s) that
involved product/service, price, promotion, place, people, process and physical evidence.
The result showed that customer perception toward product/service and promotion had
a positive impact on custom satisfaction. For the dimension of product/service, the most
important factors that have impact on customer satisfaction were guest room and
service. The product/service strategy of budget hotel was to provide clean and
comfortable guest room with variety of facilities (e.g. TV, Telephone, Air-condition,
refrigerator), to create pleasant atmosphere in guest room, provide variety of guest
room type, and ensure customers’ safety and security and so on. This finding related to
Oliver (1997:39) that satisfaction was a judgment that a product or service feature, or
the product or service itself.
Ogeniy (2009:16) stated that promotion is a plan with the objective to increase
sales of product or services within a short period; it helps to stimulate customers to
make decisions of buying a product or service in the market. In this study, the
discussion of promotion showed that the most important factor that affect customer
satisfaction were promotion activities, for instance, loyalty card (VIP card) to get more
83
discount, online reservation get discounts and the benefit for members and etc.
5.2.2 The relationship between customer satisfaction and customer loyalty
The findings in this study also showed that customer satisfaction had a positive
impact on customer loyalty. It related with the previous research from (Gandolfo, 2010:5)
that customer satisfaction is the starting point to build customer loyalty. It was a loyalty
stock that will improve image of corporate in a long-term relationship. In business
activities, making great effort to improve customers’ satisfaction, reducing customer
dissatisfaction are very important in attracting new customers, and maintaining existing
customers.
5.3 Management implication
For the management of budget hotel, to make a good marketing mix plan is the
most important. And based on the result of this research, the target market of budget
hotel industry should focus on:
Young people age 20-30.
Both female and male customers.
Bachelor’s degree.
Income of over 12,000 RMB/Year.
84
Marketing strategy
Based on the result of regression analysis in Chapter 4 that just two elements,
product/service and promotion had a positive impact on customer satisfaction, thus, the
researcher had some implication in these two elements as following:
Product/service strategy
The core products of budget hotel are guest room and service. The
product/service strategy of budget hotel is to provide clean and comfortable guest room
with variety of facilities (e.g. TV, Telephone, Air-condition, refrigerator). Pleasant
atmosphere in guest room, variety of guest room types, and ensuring customers’ safety
and security are also essential.
Promotion strategy
Promotion is an effective way to sale product/service or attracts customers.
Attractive advertisement is necessary to make customer know and understand who you
are and what product/service do you have, it is the key factor to encourage customers
to make purchase decisions. To make customers be satisfied and be loyalty, the loyalty
card (VIP card) is feasible, because of loyalty card (VIP card) can make customers feel
that they are honorable and can get special discount than other ordinary customers who
don’t have. Establishing cooperative relationship with companies or organizations is a
good way to keep customers. With the fast development of e-business, there are more
85
and more online reservation customers, satisfy and keep online customers, give them
special discount when they make reservations online.
5.4 Research recommendations
The research studied the influence of customer perception toward marketing
mix (7P’s) to customer satisfaction and also the influence of customer satisfaction to
customer loyalty. It is expected that the obtain results will provide useful information to
improve the budget hotel industry in China. This study can be used as a source of
information for the future study in related fields. And according to the results of this
research, researcher had some recommendations as following:
5.4.1 Demography characteristics
Based on analysis result of 400 collected data from customers who stay at
three budget hotels (7 Days Inn, Jin Jiang Inn and Green Tree Inn) in China (Beijing,
Shanghai, Guangzhou, Wuhan and Guilin), the researcher found that the number of
male customers and female customers are almost the same (male 202, female 198),
most of customers are young people about 20-30 years old, education of bachelor’s
degree, income of 24,001-36,000 RMB/Year, stay at budget hotel 2 times/Year. Thus,
the customers of budget hotel should focus on 20-30 years old young people.
86
5.4.2 Customer perception toward marketing mix (7P’s)
Based on the result of agreement level from Chapter 4, marketing mix (7P’s)
part that include product/service, price, place, promotion, people, process, and physical
evidence.
About the product/service, the agreement level of “size of guest room” in agree
level is the lowest (mean = 3.49). About the price, the agreement level of “lower price
than similar other hotels (e.g. motel, bungalow, guesthouse, home stay…)” in agree
level is the lowest (mean = 3.51). About the place, the agreement level of “Enough
parking area” in agree level is the lowest (mean = 3.54). About the promotion, the
agreement level of “Special promotional activities on special day (Teachers’ day,
Mothers’ day, etc)” in neutral level is the lowest (mean = 3.34). About the people, the
agreement level of “Staff has knowledge and skill” in agree level is the lowest (mean =
3.58). About the people, the agreement level of “Staffs give prompt services to
customers” in agree level is the lowest (mean = 3.84). About the physical evidence, the
agreement level of “Appealing hotel atmosphere and decoration” in agree level is the
lowest (mean = 3.48). So these are questions that budget hotel operators should solve.
These findings can help budget hotel operators to make decisions for new
marketing strategy. Such as, provide more suitable size of guest room, make new
suitable price strategy, prepare enough parking area, do more special promotion on
special days, train staffs or hire staffs who have knowledge and skill, decorate the
budget hotel more appealing.
87
5.4.3 Marketing mix (7P’s) and customer satisfaction
Based on the result of regression analysis in Chapter 4 that customer
perception toward marketing mix (7p’s) had a positive impact on customer satisfaction.
Further more, product/service and promotion had a positive impact on customer
satisfaction. Budget hotel operators should focus on product/service in lodging business,
such as the guest room. To provide clean and comfortable guest room, variety of
facilities in guest room to meet customers’ needs and make them be satisfied. Budget
hotel operators should focus on promotion in lodging business, such as: distribute
loyalty card (VIP card), give discount for online reservation customers, and make
attractive advertisements or promotions to attract customers.
5.5 Limitation and further research
There are a few limitations associated with this study.
First, the various backgrounds of customers. Some customers need more explain
to understand the questionnaire. Thus, these respondents may make some errors that
influence the accurate rate of the answers.
Second, the substantial questionnaires made respondents take a long time to fill
out it. Some impatient respondents fill out the questionnaires in hurry that without his
/her real feelings, this may affect the accurate rate of the answers.
Third, the sampling group used in this study was limited, further research may
encompass respondents in more budget hotels, such as Home Inn, Motel 168, Super 8,
88
Han Ting Hotel, Ibis in China and in more cities.
Finally, this research studied about customer perception toward marketing mix
(7P’s), the further research could study customer perception toward 8p’s.
89
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APPENDIX A
BUDGET HOTELS, CITIES AND ADDRESS OF 15 BUDGET HOTELS
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The introduction of the 3 budget hotels (7 Days Inn, Jin Jiang Inn and Green
Tree Inn) and 5 cities (Beijing, Shanghai, Guangzhou, Wuhan and Guilin) that studied in
this research are as following:
The introduction of 3 budget hotels that 7 Days Inn, Jin Jiang Inn and Green Tree
Inn:
7 Days Inn: 7 Days Group Holdings Limited, operating as 7 Days Inn since
2005 in China. It is a Chinese budget hotel chain. Haizhu District in Guangzhou is the
headquarters creative industry zone of 7 Days Inn. In 2008, it ranked as China's
fifth-biggest hotel chain; the business plan of 7 Days Inn is to triple their number of
locations to 200. The CEO of 7 Days Inn is Zheng Nanyan.
Jing Jiang Inn: Jin Jiang Inn is the first and largest budget hotel chain in China
that runs by Jin Jiang Inn Company. Since the found of Jin Jiang Inn in 1996, Jin Jiang
Inn has been committed to be the professional model within the budget hotel chain
industry in along time. It aims to provide guests/customers with comfortable,
professional, and economy hotels. Since the year 2011, the total number of Jin Jiang
Inn hotels has increased to 696 in over 160 cities around China.
Green Tree Inn: a professional hotel management group in China that was
founded in 2004 by Alex Xu along with a number of American investment enterprises.
The goal of Green Tree Inn is establishing high-quality, high-value business-oriented
hotels. They provide affordable lodging in convenient, safe locations for their
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guests/customers, while at the same time creating a satisfying work environment for
their employees. Green Tree Inns is currently ranked the number one foreign chain of
budget hotels and is in the top five of all budget chain hotels in China. Today, Green
Tree Inns has hotels in major cities such as Beijing, Shanghai and in addition to 180
other cities in China. They have over 600 operational hotels and own more than 1,000
hotels in total.
The introduction of 5 cities that Beijing, Shanghai, Guangzhou, Wuhan and Guilin:
Beijing: the capital city of China. Beijing is both a crystallization of China's
proud history and also a gateway to China's future. The capital city during the Liao,
Yuan, Ming and Qing Dynasties, Beijing has long been the political, cultural, and
diplomatic center of China. It is now an international metropolis, home to 11 million
people from all walks of life. Beijing attracts large numbers of domestic and foreign
tourists, businessmen.
Shanghai: the largest city of China, one of the four municipalities, China’s
national center city, China's economy, science and technology, industry, finance, trade,
exhibition and shipping center. Shanghai is located in China's mainland coastline middle
Yangtze estuary, has the largest foreign trade port and the biggest industrial base in
China. Shanghai is a newly emerging tourist city, there are deep modern urban culture
and numerous historical sites, held the world expo in 2010. Jiangnan tradition and
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immigration into the cultural fusion, and gradually formed a unique Shanghai regional
culture. Shanghai has become an international metropolis.
Guangzhou: now China's third largest city, south gate of China, the national
center city of China, and the international metropolis that state council positioning.
Guangzhou cuisine is famous in the world. Guangzhou is the provincial capital of
Guangdong, is the region economy, finance, trade, culture, family and traffic hub,
education center in south China.And it is the largest and oldest foreign trading ports in
South China, the world famous port city of China, one of historical and cultural
city.China's main foreign open cities, as the window of foreign trade, there are many
foreigners, be called "the third world capital", is the biggest cities of Chinese overseas.
Guilin: the world famous scenic city and famous historical and cultural city.
Guilin is the most important tourist city of guangxi zhuang autonomous region. As the
third largest city in guangxi, Guilin enjoys the “landscape enjoys” and has large
numbers of domestic and foreign tourists .
Wuhan: the provincial capital of Hubei province, is the only vice provincial city
in the central part of China, the most metropolis and center city in central China area,
and a large city of the middle and lower reaches of Changjiang River. Wuhan is the
important industrial city and economic center of the middle and lower reaches of
Changjiang River region, China's important cultural and educational center, and also to
be the national important transport hub. Attracted many businessmen，students from all
over the country and even all over the world.
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Table: The address of 15 budget hotels
7 Days Inn
Beijing
Building 13, Xi Si Huan Zhong Lu, Fengtai District (Wukesong Branch)
Shanghai
No.999, Zhonghuaxin Rd. (Shanghai Railway station Branch)
Guangzhou No.270, Huan Shi Zhong Lu, Yuexiu Distribution
(Guangzhou Railway Station Branch)
Wuhan
No. 15, Tuochuang Building, Canglongdao,Yangqiaohu Rd.,
Jiangxia District (Hubei University of Economic Branch)
Guilin
No.41, Jiangan Rd., Qixing District (Qixing Park Branch)
Jin Jiang Inn:
Beijing
Building 1, leisure shopping plaza, Qianxi Street,Dianchang Rd,
Fengtai District
Shanghai
No.500,Hutai Rd. (Shanghai Railway Station Branch)
Guangzhou No.3, Yongfu Rd.,Yuexiu District
Wuhan
No.147, Zhangzhidong Rd., Wuchang District
Guilin
No.50, Qixing Rd.,Qixing District
Green Tree Inn:
Beijing
Shanghai
Guangzhou
Wuhan
Guilin
No.63-1, Xi Si Huan Nan Lu, Fengtai District
No.40, Anhua Rd., Changning District (Shanghai Zhongshan Park Brand)
No.138, Gangbei Rd., Baiyun District (Airport Rd. Brand)
No.68, Ziyangdong Rd., Wuchang District
(Wuchang Railway Station Brand)
No.25, Zhongnanshan Rd., Xiangshan District
(Guilin Railway Station Brand)
106
APPENDIX B
QUESTIONNAIRE
(ENGLISH VERSION)
107
QUESTIONNAIRE
No. ___
My name is Yang Yu. I am a student who studies MBA Program in International
Business at The University of the Thai Chamber of Commerce, in Bangkok, Thailand. I
am doing a research, as the topic of my thesis is “Factors and customer satisfaction
of budget hotel customers in China”. I would be grateful if you fill in the questionnaire
in order to complete the research process. The information acquired from this
questionnaire will be confidentially used for academic purpose only. Thank you!
1. What budget hotel did you stay?
(1) 7 Days Inn
(2) Jin Jiang Inn
(3) Green Tree Inn
2. What city of budget hotel did you stay?
(1) Beijing
(2) Shanghai
(4) Wuhan
(5) Guilin
(3) Guangzhou
Part 1: Demographic profile
that related with your answer.
Please check（√）in the
1. Gender
(1) Male
2. Age
(1) Under 20 years old
(2) 20-30 years old
(3) 31-40 years old
(4) Over 40 years old
(2) Female
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3. Education level
(1) High School/Lower _ __ (2) Bachelor’s degree
(3) Master’s degree
(4) Doctor degree
4. Income (RMB/Year) (RMB: Yuan)
(1) Under 12,000
(2) 12,000-24,000
(3) 24,001-36,000
(4) Over 36,000
5. How many times do you stay at budget hotel per year?
(1) 1 time
(2) 2 times
(3) 3 times
(4) 4 times
(5) 5 times
(6) More than 5 times
Part 2: Customer perception toward marketing mix (7P’s)
Please check the degrees that best describe of agree or disagree with each statement
in the following, base on the budget hotel that you stay.
Please check（√）in one of the boxes below in the following scale:
1=strongly disagree; 2=disagree; 3=neutral; 4=agree; 5=strongly agree
No.
1 2 3 4 5
Product/Service
1.
Comfortable guest room
2.
Clean guest room
3.
Good atmosphere in guest room
4.
Good quality of product in guest room
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No.
5.
1 2 3 4 5
Variety of facilities in guest room (e.g. TV, Telephone,
Air-condition, refrigerator.)
6.
Standard hotel design
7.
Size of guest room
8.
Choice of room type for customers
9.
Design/look of guest room
10. Added-value facilities in guest room
11. Smoking and non-smoking rooms
12. Consistent service standard
13. Customers’ safety and security
Price
1.
Reasonable price
2.
Lower price than similar other hotels (e.g. motel, bungalow,
guesthouse, home stay…)
3.
Value money for customer paid
4.
Good price range for guest room
5.
Consistent price policy
Place
1.
Size of hotel network
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No.
1 2 3 4 5
2.
Geographic coverage of hotel network
3.
Central sales/reservation system
4.
Convenient location
5.
Convenient transportation with signs
6.
Enough parking area
Promotion
1.
Customer loyalty/repeat business
2.
Attractive advertisements or promotions
3.
Benefit for members
4.
Corporate contracts
5
Strong brand difference
6.
Online reservation get discount
7.
Loyalty card (VIP card) gets more discount
8.
Special promotional activities on special day (Teachers’ day,
Mothers’ day e.t.c)
People
1.
Friendly staff
2.
Staff has knowledge and skill
3.
Staff has the ability to provide prompt services
111
No.
1 2 3 4 5
4.
Staff is willing to serve
5.
Adequate staff provide service
6.
Speed of guest service
7.
Efficiency of guest service
Process
1.
Staffs handle customer’s reservation efficiently
2.
Staffs give careful and thorough service to customers
3.
Staffs give prompt services to customers
4.
Staffs provide service at the promised time
Physical evidence
1.
Good facilities
2.
Staff has clean, neat uniforms
3.
Appealing hotel atmosphere and decoration
4.
The visually attractive outdoor surroundings
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Part 3: Customer satisfaction
Please check the degree that best describe you’re agree or disagree with each
statement in the following, base on the budget hotel that you stay.
Please check（√）in one of the boxes below in the following scale:
1=strongly disagree; 2=disagree; 3=neutral; 4=agree; 5=strongly agree
No.
1 2 3 4 5
1.
I am satisfied with the guest room
2.
I am satisfied with the price
3.
I am satisfied with the location
4.
I am satisfied with the promotion
5.
I am satisfied with the staff
6.
I am satisfied with the service
7.
I am satisfied with the atmosphere
8.
Overall, I am satisfied with this budget hotel
9.
Overall, I am satisfied with service quality in budget hotel
113
Part 4: Customer loyalty
Please check the degree that best describe you’re agree or disagree with each
statement in the following, base on the budget hotel that you stay.
Please check（√）in one of the boxes below in the following scale:
1=strongly disagree; 2=disagree; 3=neutral; 4=agree; 5=strongly agree
No.
1.
1 2 3 4 5
I share the pleasure staying experience about this budget
hotel with others
2.
I share the positive ideas about this budget hotel with others
3.
I share the positive information about this budget hotel with
others
4.
I say the positive things about this budget hotel to others
5.
I will keep staying in this budget hotel next time
6.
I will recommend my friends to stay in this budget hotel
7.
Overall, I will be the loyal customer
Thank you very much for your time!!!
114
APPENDIX C
QUESTIONNAIRE
(CHINESE VERSION)
115
调查问卷表
No. ___
研究题目: “中国经济型酒店顾客的满意度及相关因素”
1.您居住的经济型酒店是？
(1) 7 天连锁酒店
(2) 锦江之星
2.您居住的经济型酒店的城市是？
(1) 北京
(2) 上海
(3) 格林豪泰
(3) 广州
(4) 武汉
(5) 桂林
第一部分：人口统计/个人资料
请在符合您的选项的
1. 性别
上打“√”。
___(1) 男性
2. 年龄
(1)20 岁以下
3. 教育程度
(1) 高中/以下
___(2) 女性
(2)20-30 岁
_ _(2) 学士
4. 年收入: （人民币：元）
(1) 低于 12,000 元
(3) 24,001-36,000 元
5. 您每年入住经济型酒店的次数？
(1) 1 次
(2) 2 次
(4) 4 次
(5) 5 次
(3)31-40 岁
(3) 硕士
(4)40 岁以上
(4) 博士
(2) 12,000-24,000 元
(4) 高于 36,000 元
(3) 3 次
(6) 5 次以上
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第二部分：对酒店营销（7P）的感知
请根据您居住的经济型酒店的情况做出您的选择。请在以下的表格中打“√” 。
1=非常不同意；2=不同意；3=中立；4=同意；5=非常同意
题号
1 2 3 4 5
产品/服务
1.
舒适的客房
2.
干净的客房
3.
客房内良好的气氛
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
1.
2.
3.
4.
5.
1.
2.
3.
4.
5.
6.
1.
2.
3.
4.
5.
6.
7.
客房内优质的产品
客房内多样的设施设备(如：电视、电话、空调、冰箱等)
有规格的酒店设计
客房大小
房间类型选择
客房设计
客房内的附加设施设备
吸烟和禁烟客房
始终如一的服务标准
顾客的安保
价格
价格公道
比其它同类酒店更低的价格 (如：汽车旅馆, 平房, 招
待所, 寄宿家庭…)
消费物有所值
良好的客房价格范围
始终如一的价格政策
地点、分销渠道
酒店的网络规模
酒店的网络覆盖范围
销售中心/预订系统
便利的位置
便利的交通标志
充足的停车位
促销
回头客带来生意
吸引人的广告或活动
会员福利
商务合同、合作
强大的品牌差异
网上预订获折扣
优惠卡 (会员卡) 得到更多折扣
117
题号
8.
1.
2.
3.
4.
5.
6.
7.
1.
2.
3.
4.
1.
2.
3.
4.
1
2
3
4 5
促销
特别日子的特别活动 (教师节、母亲节等)
人员
友好的员工
员工有知识、有技能
员工有能力提供快捷的服务
员工乐意服务
提供服务的员工人数充足
客服速度
客服效率
服务过程
员工有效率地处理预定
员工给予顾客细致周到的服务
员工给予顾客快捷的服务
员工在约定的时间内为顾客服务
有型展示
良好的设施设备
员工有干净、整洁的工作服
吸引人的酒店气氛和装潢
直观生动的周围环境
第三部分: 顾客满意度
请根据您居住的经济型酒店的情况做出您的选择。请在以下的表格中打“√” 。
1=非常不同意；2=不同意；3=中立；4=同意；5=非常同意
题号
1.
2.
3.
4.
5.
6.
7.
8.
9.
1
我对客房满意
我对价格满意
我对地点满意
我对促销满意
我对员工满意
我对服务满意
我对酒店气氛满意
全部，我对这间经济型酒店很满意
全部，我对这间经济型酒店的服务质量很满意
2
3
4 5
118
第四部分: 顾客忠诚度
请根据您居住的经济型酒店的情况做出您的选择。请在以下的表格中打“√” 。
1=非常不同意；2=不同意；3=中立；4=同意；5=非常同意
题号
1.
2.
3.
4.
5.
6.
7.
1
我与他人分享居住在这间经济型酒店的愉快的经历
我与他人分享关于这间经济型酒店的积极的理念
我与他人分享关于这间经济型酒店的正面的信息
我对他人说关于这间经济型酒店值得肯定的方面
我下次还会继续住这间经济型酒店
我会带我朋友来住这间经济型酒店
全部，我会成为忠诚顾客
非常感谢您的时间! ! !
2
3
4 5
119
BIOGRAPHY
Ms. Yang Yu was born on 04 June 1990. She received a Bachelor Degree in
Liberal Arts, majoring in Hotel and Tourism Management from North Bangkok
University in 2011.