African Journal of Business Management Vol.5 (8), pp. 3096-3108, 18 April 2011
Available online athttp://www.academicjournals.org/AJBM
ISSN 1993-8233 ©2011 Academic Journals
Full Length Research Paper
The customer market practices of the travel agency
industry in the Gauteng Province of South Africa
M. Roberts-Lombard
Department of Marketing Management, University of Johannesburg, Kingsway Campus, Auckland Park, Johannesburg,
South Africa. E-mail: [email protected]. Tel: +27 (11) 559 3031 (w). Fax: +27 (11) 559 4948 (w).
Accepted 16 February, 2011
Relationship marketing stresses the importance of continuous interaction between the seller and the
buyer in order to cultivate a long-term, mutually beneficial relationship. High interest rates, increasing
prices of basic goods and services and a weakening rand has reduced consumer spending on domestic
and international travel. Therefore, there is continued pressure on South African travel suppliers to
review their current relationship marketing practices to secure customer retention in a competitive and
volatile travel market. The purpose of the article is to indicate the current status of the customer market
practices of the travel agency industry in Gauteng, and to provide recommendations to the
management of travel agencies in the province regarding the improved application of the principles of
relationship marketing. The target population for this study was 280 travel agencies of which 170
managers and/or owners participated through personal interviews in the completion of questionnaires.
The findings of the study indicate that the owners and managers of travel agencies must create an
environment which is more accessible for the critical interaction with customers. The loyalty of
customers can be increased when customers are provided with the opportunity to share their
experiences and comments with the travel agency in an interactive manner.
Key words: Customer market, customers, customer service, relationship, customer commitment, travel
agencies.
INTRODUCTION
Researchers and managers maintain that one of the key
goals of marketing is to build and sustain strong customer
relationships. A large body of research in both business-
to-consumer (B2C) and business-to-business (B2B)
markets has established and confirms empirically that
relationship marketing (RM) investments enhance both
customer trust and commitment, and in turn these rela-
tional mediators influence customer behaviours, leading
to superior seller performance (Palmatier et al., 2009).
Providing customers with quality services and satisfying
their expectations are prevalent in services marketing
literature (Bamford and Xystouri, 2005). This idea is
based on the notion that a business can increase both its
profits and customer loyalty if it provides customers with
satisfying levels of service. As is the case with the travel
agency industry, customers often have access to a
variety of service providers. Meyer and Schwager (2007)
and Aksoy et al. (2003: 343) stipulate that service pro-
viders should determine customer expectations, satisfy
customer needs by providing quality services to them,
and retain loyal customers. Many businesses, however,
do not realise this until they have already lost customers
to competitors.
In most economic areas of the developed world,
approximately 80% of the workforce is employed in the
service sector. The service sector refers to the retail
sector, educational institutions such as schools and
universities, travel and tourism, medical, construction and
communications services (McColl et al., 1998). Service
businesses are fundamentally important to the economy
of any country, as they contribute, amongst others, to its
gross domestic product (GDP) and employment rate.
Tourism in South Africa, for example, contributes 5% to
the country’s GDP (Dikeni, 2001). Growth in the service
sector has persisted since the late 1990’s and service
industries have a large impact on national economies
(Baker, 2003: 586). Furthermore, in South Africa, the
contribution of the services sector to the country’s GDP
has increased from 55% in 1992 to 58% in 2002, while its
share in employment increased from 58% in 1992 to 64%
in 2002 (UNCTAD, 2004). The growth in the service
sector has lead to it becoming more competitive,
transforming the management and marketing of service
businesses (Baker, 2003).
For example, the number of travel agencies in South
Africa has grown by 20% since 2005 and is responsible
for the creation of 8.75% of all employment in the South
African service sector (ASATA, 2008). Currently, the
focus of service businesses is their clients and their
needs and preferences (Armstrong and Kotler, 2007).
Businesses that recognize the importance of customer
orientation create a business culture which takes into
consideration the interests of the consumer in all its
activities. Such business should consider the customer
as a partner in achieving the success of the business.
This approach is superior to short-term separate interests
which occur within a business, no matter whether it is the
interests of the employees, management or directors of
the business. Everyone’s role on the side of the business
should primarily be observed through the success of
offering value to the customer (Vranesevic et al., 2002).
Furthermore, little research has also been conducted so
far in the field of customer market relationships in the
travel agency industry in South Africa.
This article will attempt to indicate what the current
status is of the relationships which travel agencies in the
Gauteng Province have with their customer market, and
will provide recommendations to the management of
travel agencies in the province regarding the improved
application of the principles of relationship marketing to
this market. The measurement of the customer market
practices of travel agencies in Gauteng was done
according to three constructs that were developed from
the literature. For the purpose of this study, the activities
for the building of long-term relationships with customers
include aspects such as the ability of a business to
provide customers with products and services of a
superior quality, customer loyalty and commitment
implies that trust and commitment are two pre-requisites
to ensure customer retention and customer research, for
customer retention relates to the measurement of
customer preferences on a regular basis. This article will
provide a discussion on the problem statement and the
purpose of the article will be highlighted, followed by a
focus on the objectives of the study and an overview of
the theory relating to the customer market. This is
followed by a discussion of the methodology applied to
the study, and the major findings and managerial
implications which form an inherent part of the research.
Problem statement
The travel agency industry in South Africa is a dynamic
and competitive industry. The payment of commission to
Lombard 3097
travel agencies by suppliers of travel products in South
Africa was phased out from the 1st of May, 2005. This
implies that the only income stream for travel agencies
from this date is their service delivery charge to corporate
and leisure customers. This scenario necessitates the
travel agency industry to ensure that they deliver a
service to customers that will satisfy their needs in a
professional manner. Through such service delivery, the
ideal outcome should be satisfied customers (Bendix,
2005). Ward and Dagger (2007) stipulate that in any form
of relationship between customer and service provider,
the attitude of the customer towards such a relationship is
likely to be of importance. The stronger the customer thus
perceives the importance of relationships in general, the
more likely the customer is to develop a stronger
relationship with the service provider. Whilst there are
many potential dimensions to such a relationship, the
importance of these dimensions to customers may impact
on the strength of the relationship developed between the
service provider and customer.
The development, maintenance and strengthening of a
relationship with customers will depend on the customers’
perception of the importance of key relationship dimen-
sions. These dimensions will eventually influence the
relationship inclination of customers towards the esta-
blishment of a long-term relationship with the business.
The key dimensions referred to are bonding, empathy,
reciprocity, trust, friendship, recognition, thoughtfulness,
understanding, time to listen, commitment and loyalty
(depending on, amongst others, product and service
quality) and shared values (Sin et al., 2005). Therefore, it
becomes important for travel agencies to implement
customer marketing strategies based on the customers’
experience with the travel agency through their level of
relationship commitment, product quality and service
delivery. Such strategies could be to the benefit of the
travel agency in the long-term, since a satisfied customer
will communicate his/her experience to other members of
the public in a positive manner. Such customer recruit-
ment is done on behalf of the travel agency without any
financial expenditure (Bendix, 2008).
Against the brief background on the importance of
customer marketing and the travel agency industry
previously provided, the problem statement of this article
encompasses an investigation into the customer market
practices of the travel agency industry in the Gauteng
Province. More formally, the article wants to establish the
current level of relationship marketing relationships which
exist in the customer market of the travel agency industry
in Gauteng, and identify limitations in these relationships
which might exist in this market. The principles of
relationship marketing in the customer market of travel
agencies in Gauteng are identified and the application
thereof by the travel agency industry in the province
determined. Jordaan and Prinsloo (2004) stipulate that
the products and services of a business are an integral
part of its ability to satisfy the needs of customers. It
3098 Afr. J. Bus. Manage.
encompasses a combination of the design and charac-
teristics of the product which is supported by the delivery
of a quality service. The business hereby attempts to
satisfy the needs of customers with greater success com-
pared to the ability of competitors. Within the customer
market of a business, the customer must make a commit-
ment to establishing a relationship with the business
(Otto, 2004). This therefore, emphasizes the necessity for
a business to research its customer markets on a
continuous basis.
Objectives of the article
The primary objective of the article is to investigate the
customer market practices of travel agencies in Gauteng,
South Africa and to make recommendations regarding
the improved application of the principles of relationship
marketing to the customer market of travel agencies in
the province.
The secondary objectives are:
1. To determine activities travel agencies ideally prefer to
include when building long-term relationships with
customers, as well as the extent to which they currently
include these activities;
2. To determine the activities travel agencies ideally
prefer to include when building customer loyalty and
commitment, as well as the extent to which they currently
include these activities;
3. To determine the activities travel agencies ideally
prefer to include when conducting customer research to
increase customer satisfaction, as well as the extent to
which they currently include these activities;
4. To determine whether significant differences exist
between the current state with which activities are being
executed and the ideal state of activities to build long-
term relationships with customers;
5. To determine whether significant differences exist
between the current state with which activities are being
executed and the ideal state of activities to build
customer loyalty and commitment; and
6. To determine whether significant differences exist
between the current state with which activities are being
executed and the ideal state of activities when conducting
customer research to increase customer satisfaction.
Hypotheses of the article
H
1
: Travel agencies currently perform the activities
required to build long-term relationships with customers.
H
0
(1): Travel agencies do not currently perform the
activities required to build long-term relationships with
customers.
H
2
: Travel agencies currently perform the activities
required to build customer loyalty and commitment.
H
0
(2): Travel agencies do not currently perform the
activities required to build customer loyalty and
commitment.
H
3
: Travel agencies currently perform the activities
required to conduct customer research to improve
customer satisfaction.
H
0
(3): Travel agencies do not currently perform the
activities required to conduct customer research to
improve customer satisfaction.
H
4
: Significant differences exist between the means of
the current state with which activities are being performed
and the ideal state of individual activities to build long-
term relationships with customers in the travel agency
industry in Gauteng.
H
0
(4): Significant differences do not exist between the
means of the current state with which activities are being
performed and the ideal state of individual activities to
build long-term relationships with customers in the travel
agency industry in Gauteng.
H
5
: Significant differences exist between the means of
the current state with which activities are being performed
and the ideal state of individual activities to build
customer loyalty and commitment with customers in the
travel agency industry in Gauteng.
H
0
(5): Significant differences do not exist between the
means of the current state with which activities are being
performed and the ideal state of individual activities to
conduct customer research to improve customer
satisfaction in the travel agency industry in Gauteng.
H
6
: Significant differences exist between the means of
the current state with which activities are being performed
and the ideal state of individual activities to conduct
customer research to improve customer satisfaction in
the travel agency industry in Gauteng.
H
0
(6): Significant differences do not exist between the
means of the current state with which activities are being
performed and the ideal state of individual activities to
build customer loyalty and commitment with customers in
the travel agency industry in Gauteng.
H
7
: A significant difference exists between the means of
the individual statements measuring both the current and
ideal application of activities to build long-term
relationships with customers in the travel agency industry
in Gauteng.
H
0
(7): A significant difference does not exist between
the means of the individual statements measuring both
the current and ideal application of activities to build long-
term relationships with customers in the travel agency
industry in Gauteng.
H
8
: A significant difference exists between the means of
the individual statements measuring both the current and
ideal application of activities to build customer loyalty and
commitment in the travel agency industry in Gauteng.
H
0
(8): A significant difference does not exist between
the means of the individual statements measuring both
the current and ideal application of activities to build
customer loyalty and commitment in the travel agency
industry in Gauteng.
H
9
: A significant difference exists between the means of
the individual statements measuring both the current and
ideal application of activities to conduct customer
research to improve customer satisfaction in the travel
agency industry in Gauteng.
H
0
(9): A significant difference does not exist between
the means of the individual statements measuring both
the current and ideal application of activities to conduct
customer research to improve customer satisfaction in
the travel agency industry in Gauteng.
H
10
: A significant difference exists between the overall
means of the current and ideal application of activities to
build long-term relationships with customers in the travel
agency industry in Gauteng.
H
0
(10): A significant difference does not exist between
the overall means of the current and ideal application of
activities to build long-term relationships with customers
in the travel agency industry in Gauteng.
H
11
: A significant difference exists between the overall
means of the current and ideal application of activities to
build customer loyalty and commitment in the travel
agency industry in Gauteng.
H
0
(11): A significant difference does not exist between
the overall means of the current and ideal application of
activities to build customer loyalty and commitment in the
travel agency industry in Gauteng.
H
12
: A significant difference exists between the overall
means of the current and ideal application of activities to
conduct customer research to improve customer
satisfaction in the travel agency industry in Gauteng.
H
0
(12): A significant difference does not exist between
the overall means of the current and ideal application of
activities to conduct customer research to improve
customer satisfaction in the travel agency industry in
Gauteng.
Lombard 3099
Literature review
Activities for the building of long-term relationships
with customers
Relationship marketing focuses on the retention of
existing customers. By maintaining current customers, it
is suggested that costs are reduced by saving money that
would otherwise have been spent on advertising, per-
sonal selling, the setting up of new accounts, explaining
procedures to new customers and reducing costs of
inefficiencies in the customer learning process. A
relationship-orientated view of the customer takes into
account the income and profit to be earned over a long-
term relationship with a customer (Terblanche, 2007).
Ndubisi (2007) stipulates that trust and commitment are
two primary principles on which relationship marketing is
built. The level of satisfaction which a customer
experiences in a relationship with a business is directly
related to the principles of trust and commitment.
Businesses which recognize the importance of
customer orientation create a business culture which
takes into consideration the interests of the customer in
all its activities. The business should observe the
interests of the customer as a partner in achieving the
success of a business, as superior to short-term separate
interests which occur within a business, no matter
whether it is in the interests of the employees, managers
or owner of the business (Vranesevic et al., 2002).
Customer retention is therefore only possible for the
business if the principles of relationship marketing,
namely trust, honesty, commitment, open communication
channels, a focus on the interests of the customer, a
commitment to quality, the provision of added value
through products and services and the willingness to
retain customers are applied by the business, and if
relationships with customers are managed professionally
(McPherson, 2006).
Activities to build customer loyalty and commitment
Customer loyalty is increasingly being recognised by
businesses globally as a path to long-term business
profitability. Loyalty measures the value which the pur-
chase of a product or service holds for a customer. It
determines whether a customer will return to the
business for repeat purchases (Bush et al., 2007). There
are two dimensions to customer loyalty, namely the
behaviour dimension and the attitude dimension. The
behaviour dimension refers to the manner in which a
customer behaves during repeat purchasing, and
indicates over time the purchasing preference of a
customer towards a specific brand or service. The
attitude dimension, on the other hand, refers to the
intention of a customer to purchase a product or service
on a repeat basis and to recommend the product to
others. The customer who has the intention to purchase a
3100 Afr. J. Bus. Manage.
product or service on a repeat basis and who is willing to
recommend such a product or service to others, will have
a high probability of being loyal to the business
(Donovan, 2007; Kandampully and Suhartanto, 2000).
Ensuring the satisfaction of customer needs therefore,
increases the potential for customer loyalty towards the
business. This ensures the long-term growth and future
existence of the business. Satisfied and loyal customers
are therefore more profitable to the business than loyal
customers only (Lamb et al., 2008).
Activities required toconduct customer research to
improve customer satisfaction
Customer satisfaction describes the feeling that a
customer has that a product has met or exceeded his/her
expectations and can be explained in terms of the so-
called Disconfirmation Paradigm. The disconfirmation
paradigm proposes that meeting or exceeding customer
expectations leads to customer satisfaction, but
dissatisfaction results if performance (such as product
performance or employee performance) falls short of
those expectations (negative disconfirmation) (Boshoff,
2006). Hendrik et al., (2007) state that business firms that
fail to ensure customer satisfaction face dire conse-
quences. These include (over the short term) complaints,
negative word-of-mouth, switching, loss of sales, loss of
market share and eventual bankruptcy.
A business must therefore remain aware of the fact that
the individual product or service needs of customers are
primarily based on the core product or service offered by
the business, and that such a need must be satisfied in
advance. The adding of value to the product or service of
the business is therefore, determined by the knowledge
base which the business has of its customers (Jordaan
and Prinsloo, 2004). It is for this reason that market
research is of vital importance to the business, and its
marketing initiatives should provide a stronger emphasis
on the adding of value to the products and services of the
business through high quality levels of service delivery.
Each customer relationship must be approached as a
long-term investment in customers, the communication
mix must be focused on the gathering of information from
customers, and the distribution system and channels of
the business must add value to its products and services
(Jordaan and Prinsloo, 2004).
Bolton (2004) states that in customer-centric
businesses, there is a move towards supporting the
customer ‘pull’ of products and services. This change
requires that marketing departments generate sufficient
information to answer the following question, “Who are
our customers”? And then to extend this to, “What
products or services do our customers want to buy?” The
researching of customer needs empowers the business
to segment their customers more successfully, forecast
accurately against these segments, and adjust the pro-
duct or service development process to ensure that the
right product mix arrives in the market place at the right
time for the right customer groups.
METHODOLOGY
Research approach
This study made use of a quantitative research approach and a
descriptive research design. The study was also cross-sectional
since the respondents were only interviewed once.
Population and sample
The population for this study included all the travel agencies
registered with the Association of South African Travel Agents
(ASATA) in the Gauteng Province. The target population for this
study was 280 travel agencies of which 170 participated in the
study, resulting in a response rate of 61%. In terms of the small size
of the population, it was decided to conduct a census.
Research instrument
The measuring instrument used was a structured questionnaire and
was developed and validated by Roberts-Lombard (2006). The
empirical research component of the study consisted of the
completion of interviewer administered questionnaires through
personal interviews. The questionnaire consisted of two sections.
Section A incorporated closed-ended questions to gather demo-
graphic data on the profile of the travel agency. The biographical
data of the respondents was gathered through one question in this
section, namely the location of the travel agency (for example,
Pretoria or Johannesburg). Section B was in the format of a five-
point Likert-type scale, comprising 25 statements on customer
market relationship building, constituting the three constructs of the
study, namely “Activities for the building of long-term relationships”,
“Activities to build customer loyalty and commitment” and “Custo-
mer research for customer satisfaction”. The purpose of the
statements in the questionnaire was to test respondents’ current
and ideal application of identified relationship marketing principles
in the customer market of travel agencies in the Gauteng Province.
The statement’s response continuum ranged from 1 to 5, where 1
= strongly disagree; 2 = disagree; 3 = neutral; 4 = agree and 5 =
strongly agree. The current application of the customer market
principles was indicated as x(a) on the questionnaire, whilst the
ideal implication was indicated as x(b).
Structured interviews were conducted with ten owners or
managers of travel agencies in Johannesburg to pre-test the
questionnaire before its formal application as a data gathering
instrument.
Data gathering
Personal interviews were conducted with the managers and/or
owners of travel agencies in the Gauteng Province. A time frame of
forty days was used to complete the interviews. To ensure the
participation of the maximum number of population elements,
interviews were arranged on the premises of the travel agency.
Data analysis
Before the results from the survey can be analysed, it is necessary
to examine the representativity of the sample, as well as the validity
Lombard 3101
Table 1. Reliability statistics.
Measurement set
Cronbach alpha (Current application of
statements in measurement set)
Activities for the building of long-term relationships with customers 0.758
Activities to build customer loyalty and commitment 0.708
Activities required to conduct customer research to improve customer satisfaction 0.762
and reliability of the measurement sets. Doing so, assists in under-
standing the context in which results should be interpreted. This
section further describes the level of agreement of travel agencies
in the Gauteng Province with regard to the current state with which
activities are being executed and the ideal state of activities to build
long-term relationships with customers, the current state with which
activities are being executed and the ideal state of activities to build
customer loyalty and commitment, as well as the current state with
which activities are being executed and the ideal state of activities
when conducting customer research to increase customer satis-
faction, individual statement and overall mean scores for the
measurement sets as well as the significant differences between
the current and ideal measurement sets for the study. Furthermore,
the paired sample T-test was used do determine whether or not
significant differences exist between the mean responses of the
three measurement sets in the study. Considering that the
researcher relied on a 95% level of confidence, or a 5% level of
significance (? = 0.05), a p-value of less than or equal to 0.05
indicates a significant difference between the means in terms
of the paired sample T-test.
Representativity
The researcher strictly followed the sample plan as previously
described in ‘research methodology’, in order to ensure the
representativity of the sample.
Distribution of results: Skewness and kurtosis
The customer market practices of travel agencies in the Gauteng
Province were measured according to three constructs, namely
“Activities for the building of long-term relationships with custo-
mers”, “Customer loyalty and commitment” and “Customer research
for customer satisfaction”. The data was analysed to uncover the
mean scores for (a) the current application of customer market
practices and (b) the ideal implementation of customer market
practices, the standard deviation for individual statements referring
to both (a) the current application of customer market practices and
(b) the ideal implementation of customer market practices. Further-
more, to determine whether significant differences exist between
the current state with which activities are being executed, and the
ideal state of activities to build long-term relationships with
customers in the Gauteng Province, to determine whether signifi-
cant differences exist between the current state with which activities
are being executed and the ideal state of activities to build
customer loyalty and commitment amongst the customers of travel
agencies in Gauteng, and to determine whether significant
differences exist between the current state with which activities are
being executed and the ideal state of activities when conducting
customer research to increase customer satisfaction amongst travel
agency customers in Gauteng. The standard marginal homogeneity
test statistics and the p-value 0.05 are divided by 9 for the 9
statements in the first measurement set (0.005), 0.05 is divided by 9
for the second measurement set (0.005) and 0.05 is divided by 8 for
the third measurement set (0.006) in order to signal significant
differences between the means of the current and ideal state of the
three measurement sets.
Before the results can be presented, it is necessary to determine
whether the results obtained for each of the survey’s statements
show a normal distribution. The kurtosis and skewness of the
results’ distribution for each construct were examined. An activity
for which the skewness of the distribution is less than 2.00, falls
within acceptable limits of normality (West et al., 1995). All state-
ments included in the three measurement sets determining the
customer market practices of travel agencies in the Gauteng
Province fall within these limits.
Reliability
Cronbach’s alpha was used to determine the reliability of the
measurement sets which assesses the customer market practices
of travel agencies in the Gauteng Province. The measure ranges
from 0 to 1. A value of 1 indicates perfect reliability, whilst the value
of 0.6 is deemed to be the lower level of acceptability (Malhotra,
2007). The reliability statistics for the measurement sets are
presented in Table 1.
It is evident in Table 1 that the Cronbach alpha values for all
three measurement sets are above the lower limit of acceptability,
0.60. This confirms that the measurement sets used in the study
were reliable. It was also proven that the measurement instrument
proved itself reliable in a previous study. Therefore, the reliability of
the current state of affairs was assessed.
Validity
When assessing validity, the researcher determines whether a
measure used in the study actually does measure what the resear-
cher intends it to measure. As already indicated, the measurement
instrument developed and validated by Roberts-Lombard (2006)
was used in this study. The instrument was considered valid for the
purposes of the present study.
RESULTS
Table 2 provides an exposition of the customer market
practices of travel agencies in Gauteng regarding the
activities for the building of long-term relationships with
customers. The different items that constitute the con-
struct are specified, the total number of respondents
who participated in the study are highlighted, the mean
scores indicating to what extent the activities for the
building of long-term relationships with customers are
currently and should ideally be met by travel agencies in
Gauteng, are provided and the standard deviation,
standard marginal homogeneity statistic as well as the
3102 Afr. J. Bus. Manage.
Table 2. Activities for the building of long-term relationships with customers.
Item N
Mean
(a)
[x(a)]
Standard
deviation
Mean
(b)
[x(b)]
Standard
deviation
Standard
marginal
homogeneity test
statistic
P-value
We provide individual attention to the
service needs of our customers
170 4.76 0.481 4.99 0.157 -5.096 0.0000 *
We provide products and services
designed according to the needs of
our customers
170 4.38 0.615 4.85 0.356 -3.250 0.001*
We create a desire in our customers to
establish a long-term relationship with
us
170 4.26 0.874 4.74 0.529 -5.251 0.000*
Customers value the level of
satisfaction they receive from our
products
170 4.25 0.896 4.70 0.621 -4.359 0.000*
Customers value our professional
service delivery
170 4.25 0.626 4.70 0.556 -6.185 0.000*
We provide individual attention to the
product needs of our customers
170 4.03 0.368 4.43 0.629 -11.576 0.000*
We create customer satisfaction
through a continuous improvement in
service quality
170 3.92 0.449 4.41 0.563 -10.040 0.000*
We create customer satisfaction
through a continuous improvement in
product quality
170 3.92 0.449 4.41 0.563 -10.932 0.000*
We improve our service delivery to
customers by increasing our
knowledge about them
170 3.86 0.828 4.22 0.446 -7.576 0.000*
*Significant difference exists where the p-value is lower than 0.005 (0.05 ÷ 9 statements)
p- value for each item are specified.
It is evident from Table 2 that the statement “We
provide individual attention to the service needs of our
customers” obtained the highest mean score (4.76),
followed by “We provide products and services designed
according to the needs of our customers” (4.38). The
lowest mean score, 3.86, was for the statement “We
improve our service delivery to customers by increasing
our knowledge about them”.
All the statements in the measurement set “Activities
for the building of long-term relationships with customers”
illustrate a significant difference in the extent to which
travel agencies in Gauteng currently and should ideally
include the activities required to build long-term relation-
ships with customers for a p-value less than 0.005. This
implies that travel agencies in the Gauteng Province do
not currently perform the activities required to build long-
term relationships with customers as part of their
marketing strategy.
Since Table 2 illustrates that there is a significant
difference in the ability of travel agencies to currently and
ideally include all the activities required to build long-term
relationships with customers as specified in the literature,
hypothesis 1 is rejected and the null hypothesis
accepted. Hypothesis 1 (H1) states that travel agencies
currently perform the activities to build long-term
relationships with customers. The null hypothesis H
0
(1):
stipulates that travel agencies do not perform the
activities required to build long-term relationships with
customers. Furthermore, Table 2 also indicates that signi-
ficant differences exist between the means of the current
state with which activities are being performed, and the
Lombard 3103
Table 3. Activities for the building of customer loyalty and commitment.
Item N
Mean
(a)
[x(a)]
Standard
deviation
Mean
(b)
[x(b)]
Standard
deviation
Standard marginal
homogeneity test
statistic
P-value
Customer loyalty is important for our
future existence
170 4.53 0.837 4.96 0.189 -0.933 0.351
We want to ensure the long-term
loyalty and commitment of our
customers
170 4.51 0.690 4.95 0,244 1.073 0.283
A long-term relationship is
established if both our customers
and we benefit from the relationship
170 4.50 0.690 4.86 0.367 12.442 0.000*
We exist to satisfy the needs of our
customers
170 4.43 0.633 4.85 0.390 -3.773 0.000*
The retention of existing customers is
more important than the recruiting of
new ones
170 4.34 0.753 4.82 0.387 11.918 0.000*
Customer satisfaction is a pre-
requisite to ensure customer loyalty
towards us
170 4.25 0.770 4.72 0.563 -6.239 0.000*
Trust and commitment are
prerequisites for the establishment of
a long-term relationship with our
customers
170 4.24 0.637 4.64 0.481 -8.660 0.000*
The retention of our customers is
important to us
170 4.20 0.602 4.61 0.643 -10.167 0.000*
We use price as a promotional tool to
ensure the loyalty of customers
170 3.70 1.375 1.02 0.135 -.933 0.361
*Significant difference exists where the p-value is lower than 0.005 (0.05 ÷9 statements)
ideal state of individual activities to build long-term
relationships with customers in the travel agency industry
in the Gauteng Province. This therefore implies that
hypothesis 4 is accepted, whilst the null hypothesis is
rejected. Table 3 provides an exposition of the customer
market practices of travel agencies in Gauteng regarding
the activities to build customer loyalty and commitment
amongst travel agency customers in the province. The
different items that constitute the construct are specified,
the total number of respondents who participated in
the study is highlighted, the mean scores indicating to
what extent the activities to build customer loyalty and
commitment are currently and should ideally be met by
travel agencies in Gauteng, are provided, and the stan-
dard deviation, standard marginal homogeneity statistic,
as well as the p-value for each item are specified.
It is evident from Table 3 that the statement “Customer
loyalty is important for our future existence” obtained the
highest mean score (4.53), followed by “We want to
ensure the long-term loyalty and commitment of our
customers” (4.51). The lowest mean score, 3.70, was for
the statement “We use price as a promotional tool to
ensure the loyalty of customers”.
The majority of statements in the measurement set
“Activities for the building of customer loyalty and
commitment” illustrate a significant difference in the
extent to which travel agencies in Gauteng currently and
should ideally include the activities required to build
customer loyalty and commitment with customers for a p-
value less than 0.005. This implies that travel agencies in
the Gauteng Province do not currently perform the
activities required to build customer loyalty and
commitment in their marketing strategy. The Table further
illustrates that there is no significant difference in terms of
the following statements (P < 0.005):
1. Customer loyalty is important for our future existence.
2. We want to ensure the long-term loyalty and
3104 Afr. J. Bus. Manage.
Table 4. Activities required to conduct customers research to improve customer satisfaction (Customer loyalty and Commitment).
Item N
Mean
(a)
[x(a)]
Standard
deviation
Mean
(b)
[x(b)]
Standard
deviation
Standard marginal
homogeneity test
statistic
P-
value
We provide our customers with value-
added services
170 4.36 0.751 4.83 0.390 -1.044 0.296
We establish a relationship with our
customers by adding value to our product
and service offering
170 4.29 0.861 4.76 0.545 -7.458 0.000*
We provide our customers with value-
added products
170 4.17 0.701 4.58 0.520 -9.146 0.000*
We consciously create a desire for repeat
transactions with our customers
170 4.09 0.791 4.53 0.680 -8.135 0.000*
We research the needs of our customers
on a regular basis
170 4.09 0.776 4.54 0.500 -7.731 0.000*
Our marketing strategy is formulated
around the needs and wants of our
corporate market customers
170 3.98 0.903 4.42 0.531 -6.734 0.000*
Our marketing strategy is formulated
around the needs and wants of our leisure
market customers
170 3.92 0.913 4.35 0.691 -6.170 0.000*
We measure the level of customer
satisfaction on a regular basis
170 3.74 0.718 1.27 0.499 -5.864 0.000*
*Significant difference exist where the p-value is lower than 0.006 (0.05 ÷ 8 statements)
commitment of our customers.
3. We use price as a promotional tool to ensure the
loyalty of customers.
Since Table 3 illustrates that there is a significant
difference in the ability of travel agencies to perform the
activities required to build customer loyalty and commit-
ment, hypothesis 2 is rejected and the null hypothesis
accepted. Hypothesis 2 (H2) states that travel agencies
do currently perform the activities required to build
customer loyalty and commitment. The null hypothesis H
0
(2) stipulates that travel agencies do not currently
perform the activities required to build customer loyalty
and commitment as part of their marketing strategy.
Furthermore, Table 3 also indicates that significant
differences exist between the majority of the individual
means of the current state with which activities are being
performed, and the ideal state of individual activities to
build loyalty and commitment with customers in the travel
agency industry in the Gauteng Province. This therefore,
implies that hypothesis 3 is accepted, whilst the null
hypothesis is rejected.
Table 4 provides an exposition of the customer market
practices of travel agencies in Gauteng regarding the
activities required to conduct customer research to
improve customer satisfaction amongst travel agency
customers in the province. The different items that
constitute the construct are specified, the total number of
respondents who participated in the study are
highlighted, the mean scores indicating to what extent the
activities to conduct customer research to improve cus-
tomer satisfaction are currently and should ideally be met
by travel agencies in Gauteng, are provided and the
standard deviation, standard marginal homogeneity
statistic, as well as the p-value for each item are
specified.
It is evident from Table 4 that the statement “We
provide our customers with value-added services”
obtained the highest mean score (4.36), followed by “We
establish a relationship with our customers by adding
value to our product and service offering”. The lowest
mean score, 3.74, was for the statement “We measure
the level of customer satisfaction on a regular basis”.
The majority of statements in the measurement set
Lombard 3105
Table 5. Significance testing of the overall mean scores for the activities to build long-term relationships with customers, activities to build
customer loyalty and commitment and activities required to conduct customer research to improve customer satisfaction.
Customer market practices of travel agencies in Gauteng
Measurement set
Score
(Current application)
Score
(Ideal application)
P-value
Activities for the building of long-term relationships 3.76 3.90 0.000
Activities to build customer loyalty and commitment 3.82 4.30 0.000
Activities required to conduct customer research to improve customer
satisfaction
4.11 4.57 0.000
*Significant differences exists where the p-value is lower than 0.05.
“Activities required to conduct customer research to
improve customer satisfaction” illustrate a significant
difference in the extent to which travel agencies in
Gauteng currently and should ideally include the activities
required when conducting customer research to increase
customer satisfaction for a p-value less than 0.006. This
implies that travel agencies in the Gauteng Province do
not currently perform the activities required to conduct
customer research to improve customer satisfaction in
their marketing strategy. The Table further illustrates that
there is no significant difference in terms of the following
statement (P < 0.006): “We provide our customers with
value-added services”.
Since Table 4 illustrates that there is a significant
difference in the ability of travel agencies to perform the
activities required to conduct customers research to
improve customer satisfaction as part of their marketing
strategy, hypothesis 3 is rejected and the null hypothesis
accepted. Hypothesis 3 (H
3
) states that travel agencies
currently perform the activities required to conduct
customer research to improve customer service. The null
hypothesis H
0
(4) stipulates that travel agencies do not
currently perform the activities required to conduct
customer research to improve customer service. Further-
more, Table 4 also indicates that significant differences
exist between the majority of the individual means of the
current state with which activities are being performed,
and the ideal state of individual activities to conduct
customer research to improve customer satisfaction in
the travel agency industry in the Gauteng Province. This
therefore implies that hypothesis 6 is accepted, whilst the
null hypothesis is rejected.
Overall mean scores for each measurement set
Table 5 indicates whether or not significant differences
exist when it comes to the overall mean scores for the
three measurement sets representing the activities for the
building of long-term relationships with customers,
activities to build customer loyalty and commitment, and
activities required to conduct customer research to
improve customer satisfaction.
It is evident from Table 5 that there are significant
differences in the overall mean scores for the “Activities
to build long-term relationships with customers”, indi-
cating to what extent the activities to build long-term
relationships with customers in the travel agency industry
in Gauteng are currently, and should ideally be applied by
travel agencies in the province. There are also significant
differences indicated by the “Activities to build customer
loyalty and commitment” measurement set, specifying to
what extent travel agencies in Gauteng are currently and
should ideally apply these activities as part of their
marketing strategy. Finally, significant differences were
also found in the overall mean scores for the “Activities
required to conduct customer research to improve
customer satisfaction” measurement set, indicating to
what extent the activities to conduct customer research to
improve customer satisfaction amongst customers of the
travel agency industry in Gauteng, are currently, and
should ideally, be applied by travel agencies in the
province.
Hypothesis testing
Significance testing indicates whether or not the different
groups of respondents (classified by geographical
location) differ significantly in the overall means score
calculated for each measurement set (Hypotheses 10 to
12). The results of the significance testing are as follows
(detailed explanations and relevant Tables are only
included where significant differences were found to
exist):
Hypothesis 10
A significant difference exists between the overall means
of the current and ideal application of activities to build
long-term relationships with customers in the travel
agency industry in Gauteng.
Hypothesis 11
A significant difference exists between the overall means
3106 Afr. J. Bus. Manage.
of the current and ideal application of activities to build
customer loyalty and commitment in the travel agency
industry in Gauteng.
Hypothesis 12
A significant difference exists between the overall means
of the current and ideal application of activities to conduct
customer research to improve customer satisfaction in
the travel agency industry in Gauteng.
This therefore, implies that hypotheses 10 to 12 are
accepted and the null hypotheses rejected.
Managerial implications
An environment must be created that is more accessible
for critical interaction with customers. The retention of
customers can be increased if such customers are
provided with the opportunity to share their experiences
and recommendations with the business in an interactive
manner. This makes them feel part of the business
because their opinions are appreciated. Gordon (1998)
and Renton (2007) are in agreement with this empirical
finding by stating that customer participation in product
and service development must be stimulated to ensure
an increase in customer satisfaction levels. This can be
achieved through the formalization of research activities
within the business to establish customer preferences.
The customer is hereby provided with the opportunity to
communicate changing preferences, needs and wants
directly to the business. The business thereby empowers
itself to adapt its marketing strategies to the changing
preferences of its target market.
Hendrick et al. (2007) argue that the ability of a
business to compile and manage a database of its
existing customers can strengthen its relationship with its
customer base. This empowers the business to address
the problems, queries and complaints of customers in a
more professional and successful manner, and to satisfy
the needs and wants of these customers. The creation
and establishment of an intimate relationship with
customers requires a detailed knowledge of the customer
base of the business. It furthermore indicates the manner
in which the business would be willing to adhere to the
expectations of customers. This viewpoint is in correlation
with the finding of the study which stipulates that travel
agencies need to compile a more comprehensive
database of their customers. This will provide the travel
agency with personal and corporate information which
can be used to arrange follow-up telephone calls to
determine the level of customer satisfaction with the
service delivered. This aspect is especially important in
cases where the travel agency has long-term corporate
customers, and wants to determine the satisfaction levels
of these customers to ensure their retention and loyalty.
Hereby, the travel agency will enable itself to identify
problem areas speedily and to address them in a fast,
efficient and professional manner to ensure the
satisfaction of their target market.
A business must also create a desire amongst its
customers to do repeat purchases. By focusing on the
aspects following, customers can be stimulated to return
to the business for repeat purchases, namely the delivery
of a professional service to customers, the speedy
handling and resolving of customer enquiries and com-
plaints, the creation of an aesthetic environment within
which a service is delivered to the customer (this aspect
includes the appearance of employees) and the
rewarding of loyal customers through structured loyalty
programmes. A structured loyalty programme can, for
example, include a specified percentage discount for
purchases of a specific product or purchases over a
specified amount. Travel agencies must also be better
organised to ensure the increased retention of
customers. It can include the establishment of a customer
service office which receives and administrates all
customer enquiries (corporate and leisure market).
Hereby, the queries of customers can be professionally
managed to have a positive influence on the retention of
customers. However, it is important that a customer
service office should differentiate between enquiries
received from the corporate and leisure market. This
enables the travel agency to direct enquiries and com-
plaints to employees who are operating in the specific
customer market. It is furthermore recommended that the
desire for repeat purchases by customers can be
achieved by focusing on aspects such as the delivery of a
professional service to customers, the speedy
management and solution of customer enquiries, the
creation of an aesthetic environment in which the service
is delivered to the customer (this aspect also includes the
appearance of employees during the service delivery
process), and the rewarding of loyal customers through
structured loyalty programmes. A structured loyalty
programme can include a percentage discount for the
purchase of a specific product or service (for example, a
flight ticket, hotel accommodation or car rental) by the
travel agency.
Paswan et al. (2007) state that the relationship
between the business and the customer must be based
on a win-win principle to ensure that the relationship
between the two parties are long-term and constructive.
Both parties to the relationship must be co-workers in the
creation of value in the relationship, and each party must
receive added value from the relationship to ensure its
success. A long-term relationship with customers
increases the product and service innovation strategy of
the business. The intimacy between the business and its
customers is therefore developed from the successful
implementation of a relationship marketing strategy by
the business (Ugbah and Evuleocha, 2007; Tinsley,
2002).
Finally, the travel agency management must create
channels whereby it can monitor its relationships with the
corporate market. The monitoring of the travel agency’s
corporate market can be done according to four
categories. These categories are customers who are
currently profitable and illustrate the potential to remain
profitable in the future (Category A), customers that are
currently profitable, but who can become less profitable in
the future (Category B), customers who are not currently
profitable, but who illustrate the potential to become
profitable in the future (Category C), and customers who
currently or in the future do not illustrate any potential to
be profitable (Category D). Through such categorisation,
the travel agency empowers itself to manage corporate
customers more profitably, which can lead to increased
loyalty towards the travel agency.
The initiation of a coupon or card system by the
individual travel agency or the franchise holder can be
considered to reward loyal customers. This initiative can
be applied to both corporate and leisure customers of the
travel agency. In the case of the corporate market, the
four categories of corporate customers, as previously
indicated, can be used as a framework for the
implementation of a coupon or card system according to
the involvement of the corporate client with the travel
agency. For example, categories 1 and 3 must be viewed
as a priority for the implementation of such a coupon or
card system to further stimulate the loyalty of corporate
clients in these categories.
Research activities within the travel agency must also
be managed in a formalised manner to determine the
needs and satisfaction levels of customers. More
comprehensive planning must be built into the research
initiatives of the travel agency to specify its objectives
and outcomes. Product development and service delivery
must be planned around the needs and preferences of
individual customers. This aspect is especially relevant
towards the corporate market which represents a primary
source of travel agency income. The professional
management of a trust relationship with corporate
customers is central to ensure the future loyalty of the
corporate market towards the travel agency.
Travel agencies can improve their service delivery to
customers by increasing their knowledge of customers.
The importance of research is therefore re-emphasised.
The service delivery of consultants to customers can be
followed by a questionnaire of no more than ten
questions, where different aspects are measured. These
aspects are the friendliness of the travel consultant, the
approach of the travel consultant during the service
delivery process, the ability of the travel consultant to
address and manage queries, the knowledge of the travel
consultant regarding the service being delivered, the
aesthetics of the environment within which the service is
delivered, the reception provided to the customer when
he/she arrives at the travel agency, the speed with which
the service is being delivered, the recommendations of
the customer to improve the service delivery level to
Lombard 3107
him/her, general recommendations to the travel agency
regarding aspects such as aesthetics and the
appearance of the employees, and positive aspects
regarding the travel agency which the customer wants to
emphasise.
The individual travel agency or the franchise holder
must monitor the performance levels of competitors
within the travel agency industry or businesses outside
the industry on a continuous basis. This will assist the
travel agency management in the formulation of formal
customer service standards for their travel agency, or to
adapt current service delivery standards to customers. By
focusing directly on the best customer service practices
of competitors or other businesses, travel agencies will
enable themselves to improve on their customer retention
levels.
Conclusion
Globally, customers are increasingly becoming more
refined in their expectations towards a business,
emphasising the need amongst customers to establish a
more intimate and enduring relationship with a business.
Such a relationship must be characterised by the
involvement and commitment of both parties to the
relationship, the reactiveness of the business regarding
the management and resolution of customer queries and
complaints, as well as the ability of the business to pay
individual attention to customers (Clark, 2000).
This article provided a theoretical perspective on
customer marketing with specific reference to the
activities for the building of long-term relationships with
customers, customer commitment and customer loyalty,
as well as customer research to ensure customer
satisfaction. This was followed by a discussion on the
findings of the study. These findings concluded that travel
agencies do not research the needs and wants of their
customers on a continuous basis to determine their
preferences with regard to the supply of products and
services. Furthermore, there should be a stronger
emphasis on the different activities which are necessary
to ensure that travel agencies build stronger, long-term
relationships with their customers.
The article concluded with a focus on the managerial
implications of the findings. The major managerial
implications of the study were that an environment must
be created which is more accessible to the critical
interaction with customers. In addition, the customers of
travel agencies must also be provided with products and
services which are of a high quality. This will ensure that
the communication of travel agency customers to the
general public will motivate the latter to purchase from
the travel agency.
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doc_404711390.pdf
Available online athttp://www.academicjournals.org/AJBM
ISSN 1993-8233 ©2011 Academic Journals
Full Length Research Paper
The customer market practices of the travel agency
industry in the Gauteng Province of South Africa
M. Roberts-Lombard
Department of Marketing Management, University of Johannesburg, Kingsway Campus, Auckland Park, Johannesburg,
South Africa. E-mail: [email protected]. Tel: +27 (11) 559 3031 (w). Fax: +27 (11) 559 4948 (w).
Accepted 16 February, 2011
Relationship marketing stresses the importance of continuous interaction between the seller and the
buyer in order to cultivate a long-term, mutually beneficial relationship. High interest rates, increasing
prices of basic goods and services and a weakening rand has reduced consumer spending on domestic
and international travel. Therefore, there is continued pressure on South African travel suppliers to
review their current relationship marketing practices to secure customer retention in a competitive and
volatile travel market. The purpose of the article is to indicate the current status of the customer market
practices of the travel agency industry in Gauteng, and to provide recommendations to the
management of travel agencies in the province regarding the improved application of the principles of
relationship marketing. The target population for this study was 280 travel agencies of which 170
managers and/or owners participated through personal interviews in the completion of questionnaires.
The findings of the study indicate that the owners and managers of travel agencies must create an
environment which is more accessible for the critical interaction with customers. The loyalty of
customers can be increased when customers are provided with the opportunity to share their
experiences and comments with the travel agency in an interactive manner.
Key words: Customer market, customers, customer service, relationship, customer commitment, travel
agencies.
INTRODUCTION
Researchers and managers maintain that one of the key
goals of marketing is to build and sustain strong customer
relationships. A large body of research in both business-
to-consumer (B2C) and business-to-business (B2B)
markets has established and confirms empirically that
relationship marketing (RM) investments enhance both
customer trust and commitment, and in turn these rela-
tional mediators influence customer behaviours, leading
to superior seller performance (Palmatier et al., 2009).
Providing customers with quality services and satisfying
their expectations are prevalent in services marketing
literature (Bamford and Xystouri, 2005). This idea is
based on the notion that a business can increase both its
profits and customer loyalty if it provides customers with
satisfying levels of service. As is the case with the travel
agency industry, customers often have access to a
variety of service providers. Meyer and Schwager (2007)
and Aksoy et al. (2003: 343) stipulate that service pro-
viders should determine customer expectations, satisfy
customer needs by providing quality services to them,
and retain loyal customers. Many businesses, however,
do not realise this until they have already lost customers
to competitors.
In most economic areas of the developed world,
approximately 80% of the workforce is employed in the
service sector. The service sector refers to the retail
sector, educational institutions such as schools and
universities, travel and tourism, medical, construction and
communications services (McColl et al., 1998). Service
businesses are fundamentally important to the economy
of any country, as they contribute, amongst others, to its
gross domestic product (GDP) and employment rate.
Tourism in South Africa, for example, contributes 5% to
the country’s GDP (Dikeni, 2001). Growth in the service
sector has persisted since the late 1990’s and service
industries have a large impact on national economies
(Baker, 2003: 586). Furthermore, in South Africa, the
contribution of the services sector to the country’s GDP
has increased from 55% in 1992 to 58% in 2002, while its
share in employment increased from 58% in 1992 to 64%
in 2002 (UNCTAD, 2004). The growth in the service
sector has lead to it becoming more competitive,
transforming the management and marketing of service
businesses (Baker, 2003).
For example, the number of travel agencies in South
Africa has grown by 20% since 2005 and is responsible
for the creation of 8.75% of all employment in the South
African service sector (ASATA, 2008). Currently, the
focus of service businesses is their clients and their
needs and preferences (Armstrong and Kotler, 2007).
Businesses that recognize the importance of customer
orientation create a business culture which takes into
consideration the interests of the consumer in all its
activities. Such business should consider the customer
as a partner in achieving the success of the business.
This approach is superior to short-term separate interests
which occur within a business, no matter whether it is the
interests of the employees, management or directors of
the business. Everyone’s role on the side of the business
should primarily be observed through the success of
offering value to the customer (Vranesevic et al., 2002).
Furthermore, little research has also been conducted so
far in the field of customer market relationships in the
travel agency industry in South Africa.
This article will attempt to indicate what the current
status is of the relationships which travel agencies in the
Gauteng Province have with their customer market, and
will provide recommendations to the management of
travel agencies in the province regarding the improved
application of the principles of relationship marketing to
this market. The measurement of the customer market
practices of travel agencies in Gauteng was done
according to three constructs that were developed from
the literature. For the purpose of this study, the activities
for the building of long-term relationships with customers
include aspects such as the ability of a business to
provide customers with products and services of a
superior quality, customer loyalty and commitment
implies that trust and commitment are two pre-requisites
to ensure customer retention and customer research, for
customer retention relates to the measurement of
customer preferences on a regular basis. This article will
provide a discussion on the problem statement and the
purpose of the article will be highlighted, followed by a
focus on the objectives of the study and an overview of
the theory relating to the customer market. This is
followed by a discussion of the methodology applied to
the study, and the major findings and managerial
implications which form an inherent part of the research.
Problem statement
The travel agency industry in South Africa is a dynamic
and competitive industry. The payment of commission to
Lombard 3097
travel agencies by suppliers of travel products in South
Africa was phased out from the 1st of May, 2005. This
implies that the only income stream for travel agencies
from this date is their service delivery charge to corporate
and leisure customers. This scenario necessitates the
travel agency industry to ensure that they deliver a
service to customers that will satisfy their needs in a
professional manner. Through such service delivery, the
ideal outcome should be satisfied customers (Bendix,
2005). Ward and Dagger (2007) stipulate that in any form
of relationship between customer and service provider,
the attitude of the customer towards such a relationship is
likely to be of importance. The stronger the customer thus
perceives the importance of relationships in general, the
more likely the customer is to develop a stronger
relationship with the service provider. Whilst there are
many potential dimensions to such a relationship, the
importance of these dimensions to customers may impact
on the strength of the relationship developed between the
service provider and customer.
The development, maintenance and strengthening of a
relationship with customers will depend on the customers’
perception of the importance of key relationship dimen-
sions. These dimensions will eventually influence the
relationship inclination of customers towards the esta-
blishment of a long-term relationship with the business.
The key dimensions referred to are bonding, empathy,
reciprocity, trust, friendship, recognition, thoughtfulness,
understanding, time to listen, commitment and loyalty
(depending on, amongst others, product and service
quality) and shared values (Sin et al., 2005). Therefore, it
becomes important for travel agencies to implement
customer marketing strategies based on the customers’
experience with the travel agency through their level of
relationship commitment, product quality and service
delivery. Such strategies could be to the benefit of the
travel agency in the long-term, since a satisfied customer
will communicate his/her experience to other members of
the public in a positive manner. Such customer recruit-
ment is done on behalf of the travel agency without any
financial expenditure (Bendix, 2008).
Against the brief background on the importance of
customer marketing and the travel agency industry
previously provided, the problem statement of this article
encompasses an investigation into the customer market
practices of the travel agency industry in the Gauteng
Province. More formally, the article wants to establish the
current level of relationship marketing relationships which
exist in the customer market of the travel agency industry
in Gauteng, and identify limitations in these relationships
which might exist in this market. The principles of
relationship marketing in the customer market of travel
agencies in Gauteng are identified and the application
thereof by the travel agency industry in the province
determined. Jordaan and Prinsloo (2004) stipulate that
the products and services of a business are an integral
part of its ability to satisfy the needs of customers. It
3098 Afr. J. Bus. Manage.
encompasses a combination of the design and charac-
teristics of the product which is supported by the delivery
of a quality service. The business hereby attempts to
satisfy the needs of customers with greater success com-
pared to the ability of competitors. Within the customer
market of a business, the customer must make a commit-
ment to establishing a relationship with the business
(Otto, 2004). This therefore, emphasizes the necessity for
a business to research its customer markets on a
continuous basis.
Objectives of the article
The primary objective of the article is to investigate the
customer market practices of travel agencies in Gauteng,
South Africa and to make recommendations regarding
the improved application of the principles of relationship
marketing to the customer market of travel agencies in
the province.
The secondary objectives are:
1. To determine activities travel agencies ideally prefer to
include when building long-term relationships with
customers, as well as the extent to which they currently
include these activities;
2. To determine the activities travel agencies ideally
prefer to include when building customer loyalty and
commitment, as well as the extent to which they currently
include these activities;
3. To determine the activities travel agencies ideally
prefer to include when conducting customer research to
increase customer satisfaction, as well as the extent to
which they currently include these activities;
4. To determine whether significant differences exist
between the current state with which activities are being
executed and the ideal state of activities to build long-
term relationships with customers;
5. To determine whether significant differences exist
between the current state with which activities are being
executed and the ideal state of activities to build
customer loyalty and commitment; and
6. To determine whether significant differences exist
between the current state with which activities are being
executed and the ideal state of activities when conducting
customer research to increase customer satisfaction.
Hypotheses of the article
H
1
: Travel agencies currently perform the activities
required to build long-term relationships with customers.
H
0
(1): Travel agencies do not currently perform the
activities required to build long-term relationships with
customers.
H
2
: Travel agencies currently perform the activities
required to build customer loyalty and commitment.
H
0
(2): Travel agencies do not currently perform the
activities required to build customer loyalty and
commitment.
H
3
: Travel agencies currently perform the activities
required to conduct customer research to improve
customer satisfaction.
H
0
(3): Travel agencies do not currently perform the
activities required to conduct customer research to
improve customer satisfaction.
H
4
: Significant differences exist between the means of
the current state with which activities are being performed
and the ideal state of individual activities to build long-
term relationships with customers in the travel agency
industry in Gauteng.
H
0
(4): Significant differences do not exist between the
means of the current state with which activities are being
performed and the ideal state of individual activities to
build long-term relationships with customers in the travel
agency industry in Gauteng.
H
5
: Significant differences exist between the means of
the current state with which activities are being performed
and the ideal state of individual activities to build
customer loyalty and commitment with customers in the
travel agency industry in Gauteng.
H
0
(5): Significant differences do not exist between the
means of the current state with which activities are being
performed and the ideal state of individual activities to
conduct customer research to improve customer
satisfaction in the travel agency industry in Gauteng.
H
6
: Significant differences exist between the means of
the current state with which activities are being performed
and the ideal state of individual activities to conduct
customer research to improve customer satisfaction in
the travel agency industry in Gauteng.
H
0
(6): Significant differences do not exist between the
means of the current state with which activities are being
performed and the ideal state of individual activities to
build customer loyalty and commitment with customers in
the travel agency industry in Gauteng.
H
7
: A significant difference exists between the means of
the individual statements measuring both the current and
ideal application of activities to build long-term
relationships with customers in the travel agency industry
in Gauteng.
H
0
(7): A significant difference does not exist between
the means of the individual statements measuring both
the current and ideal application of activities to build long-
term relationships with customers in the travel agency
industry in Gauteng.
H
8
: A significant difference exists between the means of
the individual statements measuring both the current and
ideal application of activities to build customer loyalty and
commitment in the travel agency industry in Gauteng.
H
0
(8): A significant difference does not exist between
the means of the individual statements measuring both
the current and ideal application of activities to build
customer loyalty and commitment in the travel agency
industry in Gauteng.
H
9
: A significant difference exists between the means of
the individual statements measuring both the current and
ideal application of activities to conduct customer
research to improve customer satisfaction in the travel
agency industry in Gauteng.
H
0
(9): A significant difference does not exist between
the means of the individual statements measuring both
the current and ideal application of activities to conduct
customer research to improve customer satisfaction in
the travel agency industry in Gauteng.
H
10
: A significant difference exists between the overall
means of the current and ideal application of activities to
build long-term relationships with customers in the travel
agency industry in Gauteng.
H
0
(10): A significant difference does not exist between
the overall means of the current and ideal application of
activities to build long-term relationships with customers
in the travel agency industry in Gauteng.
H
11
: A significant difference exists between the overall
means of the current and ideal application of activities to
build customer loyalty and commitment in the travel
agency industry in Gauteng.
H
0
(11): A significant difference does not exist between
the overall means of the current and ideal application of
activities to build customer loyalty and commitment in the
travel agency industry in Gauteng.
H
12
: A significant difference exists between the overall
means of the current and ideal application of activities to
conduct customer research to improve customer
satisfaction in the travel agency industry in Gauteng.
H
0
(12): A significant difference does not exist between
the overall means of the current and ideal application of
activities to conduct customer research to improve
customer satisfaction in the travel agency industry in
Gauteng.
Lombard 3099
Literature review
Activities for the building of long-term relationships
with customers
Relationship marketing focuses on the retention of
existing customers. By maintaining current customers, it
is suggested that costs are reduced by saving money that
would otherwise have been spent on advertising, per-
sonal selling, the setting up of new accounts, explaining
procedures to new customers and reducing costs of
inefficiencies in the customer learning process. A
relationship-orientated view of the customer takes into
account the income and profit to be earned over a long-
term relationship with a customer (Terblanche, 2007).
Ndubisi (2007) stipulates that trust and commitment are
two primary principles on which relationship marketing is
built. The level of satisfaction which a customer
experiences in a relationship with a business is directly
related to the principles of trust and commitment.
Businesses which recognize the importance of
customer orientation create a business culture which
takes into consideration the interests of the customer in
all its activities. The business should observe the
interests of the customer as a partner in achieving the
success of a business, as superior to short-term separate
interests which occur within a business, no matter
whether it is in the interests of the employees, managers
or owner of the business (Vranesevic et al., 2002).
Customer retention is therefore only possible for the
business if the principles of relationship marketing,
namely trust, honesty, commitment, open communication
channels, a focus on the interests of the customer, a
commitment to quality, the provision of added value
through products and services and the willingness to
retain customers are applied by the business, and if
relationships with customers are managed professionally
(McPherson, 2006).
Activities to build customer loyalty and commitment
Customer loyalty is increasingly being recognised by
businesses globally as a path to long-term business
profitability. Loyalty measures the value which the pur-
chase of a product or service holds for a customer. It
determines whether a customer will return to the
business for repeat purchases (Bush et al., 2007). There
are two dimensions to customer loyalty, namely the
behaviour dimension and the attitude dimension. The
behaviour dimension refers to the manner in which a
customer behaves during repeat purchasing, and
indicates over time the purchasing preference of a
customer towards a specific brand or service. The
attitude dimension, on the other hand, refers to the
intention of a customer to purchase a product or service
on a repeat basis and to recommend the product to
others. The customer who has the intention to purchase a
3100 Afr. J. Bus. Manage.
product or service on a repeat basis and who is willing to
recommend such a product or service to others, will have
a high probability of being loyal to the business
(Donovan, 2007; Kandampully and Suhartanto, 2000).
Ensuring the satisfaction of customer needs therefore,
increases the potential for customer loyalty towards the
business. This ensures the long-term growth and future
existence of the business. Satisfied and loyal customers
are therefore more profitable to the business than loyal
customers only (Lamb et al., 2008).
Activities required toconduct customer research to
improve customer satisfaction
Customer satisfaction describes the feeling that a
customer has that a product has met or exceeded his/her
expectations and can be explained in terms of the so-
called Disconfirmation Paradigm. The disconfirmation
paradigm proposes that meeting or exceeding customer
expectations leads to customer satisfaction, but
dissatisfaction results if performance (such as product
performance or employee performance) falls short of
those expectations (negative disconfirmation) (Boshoff,
2006). Hendrik et al., (2007) state that business firms that
fail to ensure customer satisfaction face dire conse-
quences. These include (over the short term) complaints,
negative word-of-mouth, switching, loss of sales, loss of
market share and eventual bankruptcy.
A business must therefore remain aware of the fact that
the individual product or service needs of customers are
primarily based on the core product or service offered by
the business, and that such a need must be satisfied in
advance. The adding of value to the product or service of
the business is therefore, determined by the knowledge
base which the business has of its customers (Jordaan
and Prinsloo, 2004). It is for this reason that market
research is of vital importance to the business, and its
marketing initiatives should provide a stronger emphasis
on the adding of value to the products and services of the
business through high quality levels of service delivery.
Each customer relationship must be approached as a
long-term investment in customers, the communication
mix must be focused on the gathering of information from
customers, and the distribution system and channels of
the business must add value to its products and services
(Jordaan and Prinsloo, 2004).
Bolton (2004) states that in customer-centric
businesses, there is a move towards supporting the
customer ‘pull’ of products and services. This change
requires that marketing departments generate sufficient
information to answer the following question, “Who are
our customers”? And then to extend this to, “What
products or services do our customers want to buy?” The
researching of customer needs empowers the business
to segment their customers more successfully, forecast
accurately against these segments, and adjust the pro-
duct or service development process to ensure that the
right product mix arrives in the market place at the right
time for the right customer groups.
METHODOLOGY
Research approach
This study made use of a quantitative research approach and a
descriptive research design. The study was also cross-sectional
since the respondents were only interviewed once.
Population and sample
The population for this study included all the travel agencies
registered with the Association of South African Travel Agents
(ASATA) in the Gauteng Province. The target population for this
study was 280 travel agencies of which 170 participated in the
study, resulting in a response rate of 61%. In terms of the small size
of the population, it was decided to conduct a census.
Research instrument
The measuring instrument used was a structured questionnaire and
was developed and validated by Roberts-Lombard (2006). The
empirical research component of the study consisted of the
completion of interviewer administered questionnaires through
personal interviews. The questionnaire consisted of two sections.
Section A incorporated closed-ended questions to gather demo-
graphic data on the profile of the travel agency. The biographical
data of the respondents was gathered through one question in this
section, namely the location of the travel agency (for example,
Pretoria or Johannesburg). Section B was in the format of a five-
point Likert-type scale, comprising 25 statements on customer
market relationship building, constituting the three constructs of the
study, namely “Activities for the building of long-term relationships”,
“Activities to build customer loyalty and commitment” and “Custo-
mer research for customer satisfaction”. The purpose of the
statements in the questionnaire was to test respondents’ current
and ideal application of identified relationship marketing principles
in the customer market of travel agencies in the Gauteng Province.
The statement’s response continuum ranged from 1 to 5, where 1
= strongly disagree; 2 = disagree; 3 = neutral; 4 = agree and 5 =
strongly agree. The current application of the customer market
principles was indicated as x(a) on the questionnaire, whilst the
ideal implication was indicated as x(b).
Structured interviews were conducted with ten owners or
managers of travel agencies in Johannesburg to pre-test the
questionnaire before its formal application as a data gathering
instrument.
Data gathering
Personal interviews were conducted with the managers and/or
owners of travel agencies in the Gauteng Province. A time frame of
forty days was used to complete the interviews. To ensure the
participation of the maximum number of population elements,
interviews were arranged on the premises of the travel agency.
Data analysis
Before the results from the survey can be analysed, it is necessary
to examine the representativity of the sample, as well as the validity
Lombard 3101
Table 1. Reliability statistics.
Measurement set
Cronbach alpha (Current application of
statements in measurement set)
Activities for the building of long-term relationships with customers 0.758
Activities to build customer loyalty and commitment 0.708
Activities required to conduct customer research to improve customer satisfaction 0.762
and reliability of the measurement sets. Doing so, assists in under-
standing the context in which results should be interpreted. This
section further describes the level of agreement of travel agencies
in the Gauteng Province with regard to the current state with which
activities are being executed and the ideal state of activities to build
long-term relationships with customers, the current state with which
activities are being executed and the ideal state of activities to build
customer loyalty and commitment, as well as the current state with
which activities are being executed and the ideal state of activities
when conducting customer research to increase customer satis-
faction, individual statement and overall mean scores for the
measurement sets as well as the significant differences between
the current and ideal measurement sets for the study. Furthermore,
the paired sample T-test was used do determine whether or not
significant differences exist between the mean responses of the
three measurement sets in the study. Considering that the
researcher relied on a 95% level of confidence, or a 5% level of
significance (? = 0.05), a p-value of less than or equal to 0.05
indicates a significant difference between the means in terms
of the paired sample T-test.
Representativity
The researcher strictly followed the sample plan as previously
described in ‘research methodology’, in order to ensure the
representativity of the sample.
Distribution of results: Skewness and kurtosis
The customer market practices of travel agencies in the Gauteng
Province were measured according to three constructs, namely
“Activities for the building of long-term relationships with custo-
mers”, “Customer loyalty and commitment” and “Customer research
for customer satisfaction”. The data was analysed to uncover the
mean scores for (a) the current application of customer market
practices and (b) the ideal implementation of customer market
practices, the standard deviation for individual statements referring
to both (a) the current application of customer market practices and
(b) the ideal implementation of customer market practices. Further-
more, to determine whether significant differences exist between
the current state with which activities are being executed, and the
ideal state of activities to build long-term relationships with
customers in the Gauteng Province, to determine whether signifi-
cant differences exist between the current state with which activities
are being executed and the ideal state of activities to build
customer loyalty and commitment amongst the customers of travel
agencies in Gauteng, and to determine whether significant
differences exist between the current state with which activities are
being executed and the ideal state of activities when conducting
customer research to increase customer satisfaction amongst travel
agency customers in Gauteng. The standard marginal homogeneity
test statistics and the p-value 0.05 are divided by 9 for the 9
statements in the first measurement set (0.005), 0.05 is divided by 9
for the second measurement set (0.005) and 0.05 is divided by 8 for
the third measurement set (0.006) in order to signal significant
differences between the means of the current and ideal state of the
three measurement sets.
Before the results can be presented, it is necessary to determine
whether the results obtained for each of the survey’s statements
show a normal distribution. The kurtosis and skewness of the
results’ distribution for each construct were examined. An activity
for which the skewness of the distribution is less than 2.00, falls
within acceptable limits of normality (West et al., 1995). All state-
ments included in the three measurement sets determining the
customer market practices of travel agencies in the Gauteng
Province fall within these limits.
Reliability
Cronbach’s alpha was used to determine the reliability of the
measurement sets which assesses the customer market practices
of travel agencies in the Gauteng Province. The measure ranges
from 0 to 1. A value of 1 indicates perfect reliability, whilst the value
of 0.6 is deemed to be the lower level of acceptability (Malhotra,
2007). The reliability statistics for the measurement sets are
presented in Table 1.
It is evident in Table 1 that the Cronbach alpha values for all
three measurement sets are above the lower limit of acceptability,
0.60. This confirms that the measurement sets used in the study
were reliable. It was also proven that the measurement instrument
proved itself reliable in a previous study. Therefore, the reliability of
the current state of affairs was assessed.
Validity
When assessing validity, the researcher determines whether a
measure used in the study actually does measure what the resear-
cher intends it to measure. As already indicated, the measurement
instrument developed and validated by Roberts-Lombard (2006)
was used in this study. The instrument was considered valid for the
purposes of the present study.
RESULTS
Table 2 provides an exposition of the customer market
practices of travel agencies in Gauteng regarding the
activities for the building of long-term relationships with
customers. The different items that constitute the con-
struct are specified, the total number of respondents
who participated in the study are highlighted, the mean
scores indicating to what extent the activities for the
building of long-term relationships with customers are
currently and should ideally be met by travel agencies in
Gauteng, are provided and the standard deviation,
standard marginal homogeneity statistic as well as the
3102 Afr. J. Bus. Manage.
Table 2. Activities for the building of long-term relationships with customers.
Item N
Mean
(a)
[x(a)]
Standard
deviation
Mean
(b)
[x(b)]
Standard
deviation
Standard
marginal
homogeneity test
statistic
P-value
We provide individual attention to the
service needs of our customers
170 4.76 0.481 4.99 0.157 -5.096 0.0000 *
We provide products and services
designed according to the needs of
our customers
170 4.38 0.615 4.85 0.356 -3.250 0.001*
We create a desire in our customers to
establish a long-term relationship with
us
170 4.26 0.874 4.74 0.529 -5.251 0.000*
Customers value the level of
satisfaction they receive from our
products
170 4.25 0.896 4.70 0.621 -4.359 0.000*
Customers value our professional
service delivery
170 4.25 0.626 4.70 0.556 -6.185 0.000*
We provide individual attention to the
product needs of our customers
170 4.03 0.368 4.43 0.629 -11.576 0.000*
We create customer satisfaction
through a continuous improvement in
service quality
170 3.92 0.449 4.41 0.563 -10.040 0.000*
We create customer satisfaction
through a continuous improvement in
product quality
170 3.92 0.449 4.41 0.563 -10.932 0.000*
We improve our service delivery to
customers by increasing our
knowledge about them
170 3.86 0.828 4.22 0.446 -7.576 0.000*
*Significant difference exists where the p-value is lower than 0.005 (0.05 ÷ 9 statements)
p- value for each item are specified.
It is evident from Table 2 that the statement “We
provide individual attention to the service needs of our
customers” obtained the highest mean score (4.76),
followed by “We provide products and services designed
according to the needs of our customers” (4.38). The
lowest mean score, 3.86, was for the statement “We
improve our service delivery to customers by increasing
our knowledge about them”.
All the statements in the measurement set “Activities
for the building of long-term relationships with customers”
illustrate a significant difference in the extent to which
travel agencies in Gauteng currently and should ideally
include the activities required to build long-term relation-
ships with customers for a p-value less than 0.005. This
implies that travel agencies in the Gauteng Province do
not currently perform the activities required to build long-
term relationships with customers as part of their
marketing strategy.
Since Table 2 illustrates that there is a significant
difference in the ability of travel agencies to currently and
ideally include all the activities required to build long-term
relationships with customers as specified in the literature,
hypothesis 1 is rejected and the null hypothesis
accepted. Hypothesis 1 (H1) states that travel agencies
currently perform the activities to build long-term
relationships with customers. The null hypothesis H
0
(1):
stipulates that travel agencies do not perform the
activities required to build long-term relationships with
customers. Furthermore, Table 2 also indicates that signi-
ficant differences exist between the means of the current
state with which activities are being performed, and the
Lombard 3103
Table 3. Activities for the building of customer loyalty and commitment.
Item N
Mean
(a)
[x(a)]
Standard
deviation
Mean
(b)
[x(b)]
Standard
deviation
Standard marginal
homogeneity test
statistic
P-value
Customer loyalty is important for our
future existence
170 4.53 0.837 4.96 0.189 -0.933 0.351
We want to ensure the long-term
loyalty and commitment of our
customers
170 4.51 0.690 4.95 0,244 1.073 0.283
A long-term relationship is
established if both our customers
and we benefit from the relationship
170 4.50 0.690 4.86 0.367 12.442 0.000*
We exist to satisfy the needs of our
customers
170 4.43 0.633 4.85 0.390 -3.773 0.000*
The retention of existing customers is
more important than the recruiting of
new ones
170 4.34 0.753 4.82 0.387 11.918 0.000*
Customer satisfaction is a pre-
requisite to ensure customer loyalty
towards us
170 4.25 0.770 4.72 0.563 -6.239 0.000*
Trust and commitment are
prerequisites for the establishment of
a long-term relationship with our
customers
170 4.24 0.637 4.64 0.481 -8.660 0.000*
The retention of our customers is
important to us
170 4.20 0.602 4.61 0.643 -10.167 0.000*
We use price as a promotional tool to
ensure the loyalty of customers
170 3.70 1.375 1.02 0.135 -.933 0.361
*Significant difference exists where the p-value is lower than 0.005 (0.05 ÷9 statements)
ideal state of individual activities to build long-term
relationships with customers in the travel agency industry
in the Gauteng Province. This therefore implies that
hypothesis 4 is accepted, whilst the null hypothesis is
rejected. Table 3 provides an exposition of the customer
market practices of travel agencies in Gauteng regarding
the activities to build customer loyalty and commitment
amongst travel agency customers in the province. The
different items that constitute the construct are specified,
the total number of respondents
who participated inthe study is highlighted, the mean scores indicating to
what extent the activities to build customer loyalty and
commitment are currently and should ideally be met by
travel agencies in Gauteng, are provided, and the stan-
dard deviation, standard marginal homogeneity statistic,
as well as the p-value for each item are specified.
It is evident from Table 3 that the statement “Customer
loyalty is important for our future existence” obtained the
highest mean score (4.53), followed by “We want to
ensure the long-term loyalty and commitment of our
customers” (4.51). The lowest mean score, 3.70, was for
the statement “We use price as a promotional tool to
ensure the loyalty of customers”.
The majority of statements in the measurement set
“Activities for the building of customer loyalty and
commitment” illustrate a significant difference in the
extent to which travel agencies in Gauteng currently and
should ideally include the activities required to build
customer loyalty and commitment with customers for a p-
value less than 0.005. This implies that travel agencies in
the Gauteng Province do not currently perform the
activities required to build customer loyalty and
commitment in their marketing strategy. The Table further
illustrates that there is no significant difference in terms of
the following statements (P < 0.005):
1. Customer loyalty is important for our future existence.
2. We want to ensure the long-term loyalty and
3104 Afr. J. Bus. Manage.
Table 4. Activities required to conduct customers research to improve customer satisfaction (Customer loyalty and Commitment).
Item N
Mean
(a)
[x(a)]
Standard
deviation
Mean
(b)
[x(b)]
Standard
deviation
Standard marginal
homogeneity test
statistic
P-
value
We provide our customers with value-
added services
170 4.36 0.751 4.83 0.390 -1.044 0.296
We establish a relationship with our
customers by adding value to our product
and service offering
170 4.29 0.861 4.76 0.545 -7.458 0.000*
We provide our customers with value-
added products
170 4.17 0.701 4.58 0.520 -9.146 0.000*
We consciously create a desire for repeat
transactions with our customers
170 4.09 0.791 4.53 0.680 -8.135 0.000*
We research the needs of our customers
on a regular basis
170 4.09 0.776 4.54 0.500 -7.731 0.000*
Our marketing strategy is formulated
around the needs and wants of our
corporate market customers
170 3.98 0.903 4.42 0.531 -6.734 0.000*
Our marketing strategy is formulated
around the needs and wants of our leisure
market customers
170 3.92 0.913 4.35 0.691 -6.170 0.000*
We measure the level of customer
satisfaction on a regular basis
170 3.74 0.718 1.27 0.499 -5.864 0.000*
*Significant difference exist where the p-value is lower than 0.006 (0.05 ÷ 8 statements)
commitment of our customers.
3. We use price as a promotional tool to ensure the
loyalty of customers.
Since Table 3 illustrates that there is a significant
difference in the ability of travel agencies to perform the
activities required to build customer loyalty and commit-
ment, hypothesis 2 is rejected and the null hypothesis
accepted. Hypothesis 2 (H2) states that travel agencies
do currently perform the activities required to build
customer loyalty and commitment. The null hypothesis H
0
(2) stipulates that travel agencies do not currently
perform the activities required to build customer loyalty
and commitment as part of their marketing strategy.
Furthermore, Table 3 also indicates that significant
differences exist between the majority of the individual
means of the current state with which activities are being
performed, and the ideal state of individual activities to
build loyalty and commitment with customers in the travel
agency industry in the Gauteng Province. This therefore,
implies that hypothesis 3 is accepted, whilst the null
hypothesis is rejected.
Table 4 provides an exposition of the customer market
practices of travel agencies in Gauteng regarding the
activities required to conduct customer research to
improve customer satisfaction amongst travel agency
customers in the province. The different items that
constitute the construct are specified, the total number of
respondents
who participated in the study arehighlighted, the mean scores indicating to what extent the
activities to conduct customer research to improve cus-
tomer satisfaction are currently and should ideally be met
by travel agencies in Gauteng, are provided and the
standard deviation, standard marginal homogeneity
statistic, as well as the p-value for each item are
specified.
It is evident from Table 4 that the statement “We
provide our customers with value-added services”
obtained the highest mean score (4.36), followed by “We
establish a relationship with our customers by adding
value to our product and service offering”. The lowest
mean score, 3.74, was for the statement “We measure
the level of customer satisfaction on a regular basis”.
The majority of statements in the measurement set
Lombard 3105
Table 5. Significance testing of the overall mean scores for the activities to build long-term relationships with customers, activities to build
customer loyalty and commitment and activities required to conduct customer research to improve customer satisfaction.
Customer market practices of travel agencies in Gauteng
Measurement set
Score
(Current application)
Score
(Ideal application)
P-value
Activities for the building of long-term relationships 3.76 3.90 0.000
Activities to build customer loyalty and commitment 3.82 4.30 0.000
Activities required to conduct customer research to improve customer
satisfaction
4.11 4.57 0.000
*Significant differences exists where the p-value is lower than 0.05.
“Activities required to conduct customer research to
improve customer satisfaction” illustrate a significant
difference in the extent to which travel agencies in
Gauteng currently and should ideally include the activities
required when conducting customer research to increase
customer satisfaction for a p-value less than 0.006. This
implies that travel agencies in the Gauteng Province do
not currently perform the activities required to conduct
customer research to improve customer satisfaction in
their marketing strategy. The Table further illustrates that
there is no significant difference in terms of the following
statement (P < 0.006): “We provide our customers with
value-added services”.
Since Table 4 illustrates that there is a significant
difference in the ability of travel agencies to perform the
activities required to conduct customers research to
improve customer satisfaction as part of their marketing
strategy, hypothesis 3 is rejected and the null hypothesis
accepted. Hypothesis 3 (H
3
) states that travel agencies
currently perform the activities required to conduct
customer research to improve customer service. The null
hypothesis H
0
(4) stipulates that travel agencies do not
currently perform the activities required to conduct
customer research to improve customer service. Further-
more, Table 4 also indicates that significant differences
exist between the majority of the individual means of the
current state with which activities are being performed,
and the ideal state of individual activities to conduct
customer research to improve customer satisfaction in
the travel agency industry in the Gauteng Province. This
therefore implies that hypothesis 6 is accepted, whilst the
null hypothesis is rejected.
Overall mean scores for each measurement set
Table 5 indicates whether or not significant differences
exist when it comes to the overall mean scores for the
three measurement sets representing the activities for the
building of long-term relationships with customers,
activities to build customer loyalty and commitment, and
activities required to conduct customer research to
improve customer satisfaction.
It is evident from Table 5 that there are significant
differences in the overall mean scores for the “Activities
to build long-term relationships with customers”, indi-
cating to what extent the activities to build long-term
relationships with customers in the travel agency industry
in Gauteng are currently, and should ideally be applied by
travel agencies in the province. There are also significant
differences indicated by the “Activities to build customer
loyalty and commitment” measurement set, specifying to
what extent travel agencies in Gauteng are currently and
should ideally apply these activities as part of their
marketing strategy. Finally, significant differences were
also found in the overall mean scores for the “Activities
required to conduct customer research to improve
customer satisfaction” measurement set, indicating to
what extent the activities to conduct customer research to
improve customer satisfaction amongst customers of the
travel agency industry in Gauteng, are currently, and
should ideally, be applied by travel agencies in the
province.
Hypothesis testing
Significance testing indicates whether or not the different
groups of respondents (classified by geographical
location) differ significantly in the overall means score
calculated for each measurement set (Hypotheses 10 to
12). The results of the significance testing are as follows
(detailed explanations and relevant Tables are only
included where significant differences were found to
exist):
Hypothesis 10
A significant difference exists between the overall means
of the current and ideal application of activities to build
long-term relationships with customers in the travel
agency industry in Gauteng.
Hypothesis 11
A significant difference exists between the overall means
3106 Afr. J. Bus. Manage.
of the current and ideal application of activities to build
customer loyalty and commitment in the travel agency
industry in Gauteng.
Hypothesis 12
A significant difference exists between the overall means
of the current and ideal application of activities to conduct
customer research to improve customer satisfaction in
the travel agency industry in Gauteng.
This therefore, implies that hypotheses 10 to 12 are
accepted and the null hypotheses rejected.
Managerial implications
An environment must be created that is more accessible
for critical interaction with customers. The retention of
customers can be increased if such customers are
provided with the opportunity to share their experiences
and recommendations with the business in an interactive
manner. This makes them feel part of the business
because their opinions are appreciated. Gordon (1998)
and Renton (2007) are in agreement with this empirical
finding by stating that customer participation in product
and service development must be stimulated to ensure
an increase in customer satisfaction levels. This can be
achieved through the formalization of research activities
within the business to establish customer preferences.
The customer is hereby provided with the opportunity to
communicate changing preferences, needs and wants
directly to the business. The business thereby empowers
itself to adapt its marketing strategies to the changing
preferences of its target market.
Hendrick et al. (2007) argue that the ability of a
business to compile and manage a database of its
existing customers can strengthen its relationship with its
customer base. This empowers the business to address
the problems, queries and complaints of customers in a
more professional and successful manner, and to satisfy
the needs and wants of these customers. The creation
and establishment of an intimate relationship with
customers requires a detailed knowledge of the customer
base of the business. It furthermore indicates the manner
in which the business would be willing to adhere to the
expectations of customers. This viewpoint is in correlation
with the finding of the study which stipulates that travel
agencies need to compile a more comprehensive
database of their customers. This will provide the travel
agency with personal and corporate information which
can be used to arrange follow-up telephone calls to
determine the level of customer satisfaction with the
service delivered. This aspect is especially important in
cases where the travel agency has long-term corporate
customers, and wants to determine the satisfaction levels
of these customers to ensure their retention and loyalty.
Hereby, the travel agency will enable itself to identify
problem areas speedily and to address them in a fast,
efficient and professional manner to ensure the
satisfaction of their target market.
A business must also create a desire amongst its
customers to do repeat purchases. By focusing on the
aspects following, customers can be stimulated to return
to the business for repeat purchases, namely the delivery
of a professional service to customers, the speedy
handling and resolving of customer enquiries and com-
plaints, the creation of an aesthetic environment within
which a service is delivered to the customer (this aspect
includes the appearance of employees) and the
rewarding of loyal customers through structured loyalty
programmes. A structured loyalty programme can, for
example, include a specified percentage discount for
purchases of a specific product or purchases over a
specified amount. Travel agencies must also be better
organised to ensure the increased retention of
customers. It can include the establishment of a customer
service office which receives and administrates all
customer enquiries (corporate and leisure market).
Hereby, the queries of customers can be professionally
managed to have a positive influence on the retention of
customers. However, it is important that a customer
service office should differentiate between enquiries
received from the corporate and leisure market. This
enables the travel agency to direct enquiries and com-
plaints to employees who are operating in the specific
customer market. It is furthermore recommended that the
desire for repeat purchases by customers can be
achieved by focusing on aspects such as the delivery of a
professional service to customers, the speedy
management and solution of customer enquiries, the
creation of an aesthetic environment in which the service
is delivered to the customer (this aspect also includes the
appearance of employees during the service delivery
process), and the rewarding of loyal customers through
structured loyalty programmes. A structured loyalty
programme can include a percentage discount for the
purchase of a specific product or service (for example, a
flight ticket, hotel accommodation or car rental) by the
travel agency.
Paswan et al. (2007) state that the relationship
between the business and the customer must be based
on a win-win principle to ensure that the relationship
between the two parties are long-term and constructive.
Both parties to the relationship must be co-workers in the
creation of value in the relationship, and each party must
receive added value from the relationship to ensure its
success. A long-term relationship with customers
increases the product and service innovation strategy of
the business. The intimacy between the business and its
customers is therefore developed from the successful
implementation of a relationship marketing strategy by
the business (Ugbah and Evuleocha, 2007; Tinsley,
2002).
Finally, the travel agency management must create
channels whereby it can monitor its relationships with the
corporate market. The monitoring of the travel agency’s
corporate market can be done according to four
categories. These categories are customers who are
currently profitable and illustrate the potential to remain
profitable in the future (Category A), customers that are
currently profitable, but who can become less profitable in
the future (Category B), customers who are not currently
profitable, but who illustrate the potential to become
profitable in the future (Category C), and customers who
currently or in the future do not illustrate any potential to
be profitable (Category D). Through such categorisation,
the travel agency empowers itself to manage corporate
customers more profitably, which can lead to increased
loyalty towards the travel agency.
The initiation of a coupon or card system by the
individual travel agency or the franchise holder can be
considered to reward loyal customers. This initiative can
be applied to both corporate and leisure customers of the
travel agency. In the case of the corporate market, the
four categories of corporate customers, as previously
indicated, can be used as a framework for the
implementation of a coupon or card system according to
the involvement of the corporate client with the travel
agency. For example, categories 1 and 3 must be viewed
as a priority for the implementation of such a coupon or
card system to further stimulate the loyalty of corporate
clients in these categories.
Research activities within the travel agency must also
be managed in a formalised manner to determine the
needs and satisfaction levels of customers. More
comprehensive planning must be built into the research
initiatives of the travel agency to specify its objectives
and outcomes. Product development and service delivery
must be planned around the needs and preferences of
individual customers. This aspect is especially relevant
towards the corporate market which represents a primary
source of travel agency income. The professional
management of a trust relationship with corporate
customers is central to ensure the future loyalty of the
corporate market towards the travel agency.
Travel agencies can improve their service delivery to
customers by increasing their knowledge of customers.
The importance of research is therefore re-emphasised.
The service delivery of consultants to customers can be
followed by a questionnaire of no more than ten
questions, where different aspects are measured. These
aspects are the friendliness of the travel consultant, the
approach of the travel consultant during the service
delivery process, the ability of the travel consultant to
address and manage queries, the knowledge of the travel
consultant regarding the service being delivered, the
aesthetics of the environment within which the service is
delivered, the reception provided to the customer when
he/she arrives at the travel agency, the speed with which
the service is being delivered, the recommendations of
the customer to improve the service delivery level to
Lombard 3107
him/her, general recommendations to the travel agency
regarding aspects such as aesthetics and the
appearance of the employees, and positive aspects
regarding the travel agency which the customer wants to
emphasise.
The individual travel agency or the franchise holder
must monitor the performance levels of competitors
within the travel agency industry or businesses outside
the industry on a continuous basis. This will assist the
travel agency management in the formulation of formal
customer service standards for their travel agency, or to
adapt current service delivery standards to customers. By
focusing directly on the best customer service practices
of competitors or other businesses, travel agencies will
enable themselves to improve on their customer retention
levels.
Conclusion
Globally, customers are increasingly becoming more
refined in their expectations towards a business,
emphasising the need amongst customers to establish a
more intimate and enduring relationship with a business.
Such a relationship must be characterised by the
involvement and commitment of both parties to the
relationship, the reactiveness of the business regarding
the management and resolution of customer queries and
complaints, as well as the ability of the business to pay
individual attention to customers (Clark, 2000).
This article provided a theoretical perspective on
customer marketing with specific reference to the
activities for the building of long-term relationships with
customers, customer commitment and customer loyalty,
as well as customer research to ensure customer
satisfaction. This was followed by a discussion on the
findings of the study. These findings concluded that travel
agencies do not research the needs and wants of their
customers on a continuous basis to determine their
preferences with regard to the supply of products and
services. Furthermore, there should be a stronger
emphasis on the different activities which are necessary
to ensure that travel agencies build stronger, long-term
relationships with their customers.
The article concluded with a focus on the managerial
implications of the findings. The major managerial
implications of the study were that an environment must
be created which is more accessible to the critical
interaction with customers. In addition, the customers of
travel agencies must also be provided with products and
services which are of a high quality. This will ensure that
the communication of travel agency customers to the
general public will motivate the latter to purchase from
the travel agency.
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