Service quality mediated the relationship between the CRM performance dimensions (key customer focus, CRM knowledge management, CRM organization, and CRM-based technology) and the marketing performance of Jordanian hotels.
1. Resource-Based View (RBV) Theory and Contingency Theory
The resource-based view theory analyses and construes the resources that organizations have in order to comprehend the ways in which organizations attain a sustainable competitive advantage. Barney
[21][1] indicated that at the core of the RBV theory lies the notion that each firm possesses inimitable attributes that can act as sources of superior performance and competitive advantage. In this regard, resources that cannot be transferred or purchased without difficulty, or those that would call for a comprehensive learning curve or a drastic transformation in the climate and culture of the organization, would probably be more specific or unique to a particular organization. Such resources would be deemed challenging to replicate. Relevantly, Conner
[22][2] indicated that the performance variance among firms is determined by their ownership of unique inputs and competences. In this regard, the RBV theory proposes that an organization can be viewed as an ensemble of resources, including organizational, physical, and human resources
[21,23][1][3]. Additionally, Barney
[21][1] stated that, in the achievement of superior performance, the resources of organizations that are deemed to be rare, valuable, hard to replicate and hard to replace constitute the primary source of sustainable competitive advantage. In the assurance of competitive advantage and sustainable performance, a resource must satisfy the valuable, rare, imperfect imitability, and non-substitutability (VRIN) criteria, as detailed below:
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Valuable (V): Valuable resources are those that provide strategic value to a firm. Such resources assist a firm in taking advantage of market prospects, or in easing the reduction of market threats. Notably, the ownership of a resource that does not add or improve to a firm’s value would be fruitless.
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Rare (R): Organizations should be in possession of resources that are hard to find among current and potential rivals. It is, therefore, crucial to be in possession of resources that are rare or unique in order to gain a competitive advantage. Possessing resources that several other firms in the marketplace also possess cannot give a competitive advantage because firms cannot devise and employ a business strategy that is unique by using resources that are also held by rivals.
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Imperfect imitability (I): A firm that has resources that have imperfect imitability is at an advantage because rivals cannot copy or imitate those resources easily. Among the attributes associated with imperfect imitability are obstacles to obtaining the resource, an unclear link between competence and competitive advantage, and the intricacy of such a resource. However, the holding of certain resources can only lead to a sustained competitive advantage if their non-possession means and reflects their non-acquirement.
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Non-substitutability (N): This criterion indicates the impossibility of substituting a given resource with an alternative resource. This means that the use of an alternative resource will not result in the achievement of the exact desired performance. The possession of valuable resources should allow a firm to do things and act in ways that increase sales and margins, and decrease costs, or increase a firm’s financial value
[21][1]. Resources can be perceived as carrying value when they allow a firm to perceive or use strategies which lead to better efficiency and effectiveness
[21][1].
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Notably, the application of RBV theory allows firm managers to gain an understanding as to why competences are viewable as the most important asset of a firm. At the same time, managers can appreciate how those assets are of value in business performance improvement. As posited by RBV theory, attributes associated with past experiences, organizational culture and competencies are integral to a firm’s success
[24][4].
Luthans and Stewart
[25][5] stated that the contingency approach refers to the identification and development of functional relationships between the environment, organization (culture), knowledge management, communication intensity and performance. Sirmon, Hitt, Ireland and Gilbert
[26][6] stated that the contingency view posits that the effectiveness of decision-making is dictated by the competitiveness and structural settings of an organization, and the performance effects of ‘fit’ thus become the focal point.
The integration of contingency theory and RBV provide an explanation of the relationship among the variables. Based on the contingency theory, environmental factors lead to superior performance. Specifically, in this study, contingency theory explains the effect of CRM performance dimensions (i.e., key customer focus, knowledge management, CRM organization, and CRM-based technology) on marketing performance. Meanwhile, RBV theory explains the capability resources as they relate to attaining a competitive advantage. Specifically, the theory explains the effect of CRM performance dimensions (i.e., key customer focus, knowledge management, CRM organization, and CRM-based technology) on service quality, as well as the mediating role of service quality between CRM performance and marketing performance.
2. Research Framework and Hypothesis Development
2.1. Relationship between CRM Performance and Marketing Performance
According to Albakri and Hadi
[27][7] and Martensen and Grønholdt
[28][8], marketing performance refers to a group of activities which are integral to the accomplishment of the strategic objectives of marketing management. Additionally, Drohan, Lynch and Foley
[29][9] stated the need for results quantification in the reporting of the performance level of an organization. In this regard, key performance indicators can be employed by an organization to make sure that it is reaching its goal of demonstrating the expected marketing performance.
The term “CRM” encompasses, on the one hand, a business strategy and, on the other hand, the software that is acquired by companies to manage customer relationships; in the context of companies in the hotel industry, CRM is therefore deemed to be a fitting strategy. According to Zineldin
[30][10], the use of CRM in marketing among hotels facilitates the development of interactive relationships with customers, as well as the ability to fulfil the needs and preferences of individual customers. Within the hospitality industry, CRM is now an important tool, and as mentioned by Madhovi and Dhliwayo
[31][11], CRM is seen as the next most effective management tool after strategic planning. In fact, the applicability of CRM has increased, owing to the increased competition following to the world’s recovery from the recent economic slump. Furthermore, Vallabh, Radder and Venter
[32][12] stated that, in a world that is currently very competitive, CRM seems to be among the most imperative strategies to employ in the attainment of competitive advantage.
Past CRM studies have proven that organizations that effectively implement CRM can go on to reap the benefits from CRM, and thereby become better
[33,34][13][14]. Additionally, Benedettini, Swink and Neely
[35][15] indicated that such customers continue to purchase the same services or products, as well as other related and/or costlier offerings. Furthermore,
[36][16] stated that considering that it costs much less to serve loyal customers, improving customer loyalty and retention would reduce the expenses related to marketing. Indeed, CRM performance was found to positively and significantly affect marketing performance by several previous studies, including that of Soliman
[36][16], who reported a positive link between CRM and marketing performance. In particular, the author indicated that, in financial institutions, CRM dimensions influence marketing performance positively. Relevantly, Shaaban and Ghoneim
[37][17] reported that CRM performance has an impact on a business’s marketing performance. Consequently, marketing performance and growth criteria have been drawn. A positive impact of CRM performance on marketing performance was also reported by Albakri and Hadi
[27][7]. Moreover, a similar impact of CRM performance dimensions on marketing performance was also reported by Ewnetu
[38][18], who studied the effect of CRM performance dimensions on marketing performance.
2.2. Relationship between Key Customer Focus and Marketing Performance
Employee satisfaction, innovation, and customer satisfaction seem to be considerably affected by customer focus
[39][19], and according to Yaacob
[40][20], this results in a better awareness of marketing performance. Additionally, the author reported that the structural model in his study demonstrated that there is an indirect link between customer focus and customer satisfaction. Notably, the author found that customer satisfaction is impacted by employee satisfaction, and employee satisfaction also facilitates the impact of customer focus on inventiveness
[41][21]. In other words, employees’ satisfaction, inventiveness, and customer satisfaction greatly affect the attainment of marketing performance. On the other hand, Nwokah
[42][22] found a strong and positive link between the three constructs of customer focus, competitor focus and marketing performance. The authors drew two major inferences from their results. The first one is dedicated to scholars concerning the examination of the link between customer focus, competitor focus and marketing performance in two firms. In earlier marketing concept studies, the general assumption was that the application of a key customer focus strategy would result in better marketing performance
[43][23]. This assumption seems to be valid, because a positive significant link between customer orientation and an organization’s marketing performance has been reported in a number of studies
[27,44][7][24].
2.3. Relationship between CRM Knowledge Management and Marketing Performance
Knowledge can help a firm to generate value for itself and for its customers as well. Relevantly, knowledge management, also known as KM competency, can assist firms in improving their business approaches and procedures. Moreover, KM facilitates the establishment of an effective CRM system, as it can be used to ensure that the most ideal organizational structure is realized, and that both organizational resources and human resource management are dedicated to achieving this goal. However, in the CRM process, contacting people is generally regarded as the most difficult task. The internal market, therefore, plays an important role in customer-focused customer services delivery, and as described by Akroush, Dahiyat, Gharaibeh and Abu-Lail,
[33][13] and Namjoyan, Esfahani and Haery
[45][25], in any organization it is the result of communication between human resource management and marketing. The relationship between marketing performance and KM was studied by Raeeszadeh, Gilaninia and Homayounfar
[46][26], and they found that marketing performance seems to be significantly and positively affected by KM. Additionally, in their comparative analysis, the authors mentioned that organizations are facing a significant challenge in terms of fully understanding KM and its method of implementation.
Moreover, human resources and KM seem to be positively and significantly linked together; in fact, many KM systems have met with failure because the human aspect was overlooked. Relevantly, a meaningful relationship between customer KM and marketing competencies was reported by Fan and Ku
[46][26] who found that KM can also significantly empower firms in their strategic decision-making. Moreover, as indicated in some other past studies
[33[13][27][28],
47,48], firms with successful KM can effectively form positive and superior customer relationships, and such relationships affect marketing performance in a positive manner.
Past studies by Almotairi
[49][29]; Chang, Wang and Arnett
[50][30]; and Ahmad
[51][31] suggested that the positive link between CRM knowledge management and marketing performance is attributable to RBV theory
[21][1]. Meanwhile, in any organization, the importance of knowledge management in CRM as an aspect of CRM performance has also been proposed in a study performed by Alghasawneh, Akhorshaideh, Alharafsheh, Ghasawneh, Al-Gasawneh and Al-Hadid
[52][32]. Furthermore, the positive link between knowledge management (KM) and some variables has been highlighted by several studies, for instance, between KM and market share and customer satisfaction as in Sin, Alan and Yim
[44][24], and between KM and customer satisfaction as in Masa’deh, Almajali, Alrowwad and Obeidat
[53][33].
2.4. Relationship between CRM Organization and Marketing Performance
The impact of CRM organization on marketing performance has been explored by several past works. For instance, from their examination of the effect of CRM on marketing performance, Namjoyan, Esfahani and Haery
[45][25], and Shaaban and Ghoneim
[37][17] concluded that CRM organization affects marketing performance. Meanwhile, the link between CRM organization, marketing competencies and performance was explored by Mohammed and Rashid
[54][34], and they concluded that the capacity of CRM organization plays a role in the implementation of the four dimensions of CRM. Furthermore, according to the authors, CRM implementation leads to better marketing performance. Furthermore, the authors proposed a conceptual model which proves the link between CRM organization that employs CRM dimensions, and marketing performance. As such, in respect to CRM application, an organization’s eagerness to change its approach to business procedures becomes a major challenge. Notably, a lot of organizations have expressed a passion for providing the type of customer service that would strengthen their relationship with customers. Nevertheless, as indicated by Akroush, Dahiyat, Gharaibeh and Abu-Lail
[33][13]; Albakri and Hadi
[27][7]; and Wali, Wright, Nwokah and Reynolds
[55][35], organizations have not been making sufficient efforts to do so, and their failure has reduced the effectiveness of CRM implementation, impeding the achievement of improved marketing performance.
2.5. CRM-Based Technology and Marketing Performance
The incorporation of technology into marketing components (e.g., product placement, market segmentation, target segment choice, awareness of customer conduct, sales control, marketing campaign management, and market awareness) positively impacts marketing strategy and performance
[56][36]. Due to advances in IT, organizations can conduct comprehensive customer value analysis and provide customized services to customers. This could further enhance the marketing systems development, and could thus greatly contribute to CRM success and marketing performance
[10,44,57][37][24][38]. The significant positive impact of technology-based CRM on organizational and marketing performance has been reported by a number of studies
[33,44,58][13][24][39]. In the context of hotels, Mohammed and Rashid
[54][34] found a significant and positive link between CRM technology and performance. Furthermore, Al-Azzam
[7][40] stated that organizational performance can be improved by such a positive contribution.
3. Relationship between CRM Performance and Service Quality
Past studies on service quality are expansive, especially regarding its measurement in diverse private and public sectors all over the world, and the sectors that have most commonly been covered are the airline, banking, hotel and restaurant sectors. In the cur-rent environment of global economic decline, marketing performance and service quality seem to be the most important factors for the retention, productivity and profitability of businesses in general. Consequently, the contribution of service quality seems to be the most crucial factor to consider in any investigation of the outcomes of business services as expected and perceived by the customer
[59][41]. In this regard, Allon and Babich
[60][42] stated that service quality is of the utmost importance for both the customers and the companies in the manufacturing, service and retail sectors.
Past studies have found a positive association between CRM performance and service quality in the banking industry and educational institutions
[7,16][40][43]. Moreover, the authors found that service quality and CRMP dimensions (i.e., key customer focus, CRM organization, KM, and technology-based CRM) are significantly and positively linked. According to Wali, Uduma and Wright
[61][44], the relationship between CRM and service quality in educational institutions (universities) seems to be positive and significant. Meanwhile, in Jordan’s banking sector, Huang, Ho and Chen
[6][45] affirmed that there is a strong relationship between CRM and service quality. The authors further indicated that CRM significantly affects the service quality of Jordanian hotels.
3.1. Relationship between Key Customer Focus and Service Quality
Ryding
[62][46] indicated that the currently turbulent business environment and intensifying customer influence compel organizations to employ customer-focused strategies, especially those that involve the application of innovative technology to form customer relationships. Furthermore, as today’s business environment has changed into one that is becoming increasingly aggressive, Ngo and Nguyen
[63][47] argued that there is a need for organizations to opt for customer-focused strategies that foster the positive significance of paradigms linked to customers, including service quality, customer satisfaction, and customer loyalty. The authors further stated that such an approach would increase performance. Meanwhile, Irfan and Kee
[64][48] empirically tested the link between key customer focus and service quality. The authors used the structural equation modelling (SEM) approach to test the relationships of the criteria. The results showed that there is a significant positive association between the two constructs. Similarly, Ghandour, Deans and Benwell
[65][49], and Abd Rahim Romle, Zakaria, Zakinuddin, Zolkepli and Daud
[66][50] also concluded that there is a positive link between key customer focus and service quality. These studies further stated that customers’ opinions can enhance the services that a company provides.
3.2. Relationship between CRM Knowledge Management and Service Quality
Organizations could benefit from the knowledge of customers, as this knowledge could be used in the formation of new concepts, and in the continuous improvement of the provided services or products. Such knowledge could also assist organizations in improving their efficiency and reputation. Accordingly, Azhar
[67][51] indicated the importance of increasing and pledging service quality along with customer knowledge, because these factors could all help organizations to fulfill customer requirements, particularly in terms of service effectiveness.
The obtained results showed that Knowledge Management (KM) has a positive effect on both CRM and service quality. The authors also found that CRM has a positive impact on service quality. In the context of hotels, Lo, Stalcup and Lee
[68][52] proposed that new knowledge concerning present and potential customers needs to be acquired in order to improve service quality. Moreover, the authors stated that such knowledge must be dispersed throughout the entire organization. In line with the above, Torbati, Jokar and Liravi
[69][53] reported that KM has a positive and significant impact on service quality improvement, and the authors additionally highlighted that diverse KM dimensions impact service quality improvement the most. Similarly, it was reported by Goldman, Harris and Omer
[70][54] that the link between KM and service quality is positive, but varies based on the accessibility of expert professionals. Meanwhile, the outcomes of a multiple linear regression analysis presented in Khafajy, Alzoubi and Aljanabee
[71][55] demonstrated that KM processes have a positive significant impact on service quality dimensions in the context of banking, implying that an increase in interest among the management of commercial banks in all KM processes could facilitate the improvement of the service quality in this sector.
3.3. Relationship between CRM Organization and Service Quality
In guiding organizations in their accomplishment of goals and a sustainable competitive advantage, Asgari and Omrani
[16][43] highlighted the importance of the management and organization of the company by the organization managers. For the managers of these organizations, the authors indicated the importance of increasing their capacities in this domain. Managers need to be well versed in organizational strategy, and to provide an easy, updated and interactive environment in order to allow the sharing and management of knowledge among the various parties in the organization. The application of CRM in organizations undeniably affects service quality in a positive manner. Among organizations, there seems to be a general tendency to follow approaches that allow them to achieve a competitive advantage over their opponents, as can be observed from their use of approaches that promote organization and their focus on internal service quality. Accordingly, Pasebani, Mohammadi and Yektatyar
[72][56] mentioned that service quality is among the crucial elements that facilitate efficiency in a dynamic and changing organization, and that organizational culture and internal service quality seem to have a positive and significant correlation with each other. Similarly, in the context of healthcare organizations, Habidin, Ali, Janudin, Zainol, Mustaffa and Hudin
[73][57] mentioned the importance of patient focus as a factor of organizational success. Notably, there seems to be a difference in the viewpoints of healthcare providers and patients, because patients make their own judgements about the services they receive. In fact, it is challenging to satisfy the expectations of patients even when a healthcare provider provides them with various facilities and services. Hence, the provision of a service that is superior to what the patient expects can help the healthcare provider to improve their service quality. Essentially, CRM can be described as a strategy that organizations employ to retain their customers and maintain a good relationship with their customers.
3.4. Relationship between CRM-Based Technology and Service Quality
Kotler and Armstrong
[74][58] claimed that the proliferation of IT-centred services has led customers to expect the consistent provision of higher service quality. The link between technology-empowered service delivery and electronic or web-based service quality has been highlighted by several prior studies, including Collier and Bienstock
[75][59], and Zeithaml, Berry and Parasuraman
[5][60]. Regarding the use of technology-based services, Ombati, Magutu, Nyamwange and Nyaoga
[76][61], in their study on the situation in Arusha, provided an example of the use of kiosks with touch screens that customers can use to request takeout food. Another example is the provision by banks of the use of wide networks of automated teller machines in offering customers numerous banking services. In the case of telecommunications companies, the authors concluded that the link between technology-based CRM and service quality is affected by microenvironmental factors. The authors additionally stressed the importance of service-based companies in establishing strategies to appropriately adapt to the external environment. In a study that attempted to understand the impact of technology-based CRM on service quality, Foya, Kilika, Muathe and Herman Foya
[77][62] found that technology-based CRM has a positive impact on service quality. Furthermore, in two works that examined the manners in which technology impacts agents’ incentives, and subsequently service quality, Malkawi
[78][63] showed that the concept of a moral hazard among taxi and Uber drivers in respect to the performance of route detours led to a positive effect of technology on service quality.
4. Relationship between Service Quality and Marketing Performance
Bowie, Buttle, Brookes and Mariussen
[79][64], and Chumpitaz and Paparoidamis
[80][65] stated that service quality drives the economic and marketing performance of the organization. Furthermore, the issue of service quality in the government sector was studied by Akroush
[81][66]. The authors reported that in this sector, particularly in developing nations, increasing importance is being placed on the quality of the services provided. The service quality and marketing performance were measured, and a positive significant relationship between service quality and marketing performance was noted by the authors.
5. The Mediating Role of Service Quality
Ferreira and Fernandes
[82][67] stated that there is a lack of studies regarding the exploitation of resources and capabilities that can contribute to the resolution of arising problems, considering the conditions under which the capability resource value and awareness combination contribute to firms’ performance levels. The authors further stated that the studies on the effect of the competitive advantage in this relationship are also insufficient. Furthermore, from the perspective of Amit and Schoemaker
[23][3], resources require use and/or exploration in an efficient manner in order to build up capacities. Thus, a determined resource may have the potential to contain a valuable service, but this service will only ever remain latent prior to its utilization through the means of a relevant capacity. Furthermore, according to Newbert
[83][68] and Barney
[21][1], the resource-based view theory (RBV) stated that whenever a combination of resources/capacities is proven, companies may then attain a competitive advantage, before highlighting how the rarer respective combinations could result in greater returns to the company in terms of competitive advantage and performance. Amit and Schoemaker
[23][3] also revealed that the resources require use and exploration in efficient manners in order to build up capacities. Thus, a determined resource may have the potential to contain a valuable service for the purpose of building the capacities and linkage between the resources/capabilities and performance.
According to Baron and Kenny
[84][69], a mediator variable is a variable that reveals the association between a predictor variable and a criterion variable. Mediators inform how or why something works. Furthermore, the mediator is considered to be an intervening variable which illustrates the association among a predictor variable and a criterion variable. The conditions to assume any variable as a mediator (M) are through testing it between two variables, X and Y. Mediators are persistent in the relationship between the variables, as proven through the previous studies in which the researchers had to find previous literature that presented a positive impact between the independent variable (X) and dependent variable (Y), as well an appositive impact between the independent variable (X) and mediator (M), and likewise, a positive impact between the mediator (X) and the dependent variable (Y). In case the literature supports these relationships, you can use the M as a mediator in the research to test it. As for the service quality, there were some studies that tested it as a mediator between different variables, and the field of this study that found so is as shown below.
Osarenkhoe, Birungi Komunda and Mbiito Byarugaba
[85][70] found that service quality mediated the relationship between customer complaint behaviour and customer loyalty. Furthermore, Akroush
[86][71] concluded that service quality plays a mediating role in the relationship between technical quality and bank performance. Similar findings were also discovered in a study conducted by Manohar
[87][72], who revealed that service quality mediated the link between service innovation and customer word of mouth. Furthermore, Alghamdi and Bach
[56][36] stated that the use of service quality, as a mediator variable, was a means to intensify the strength of the positive association between internal marketing dimensions as the independent variable and job satisfaction as the dependent variable.
Based on the previous relationships that mentioned the relationship between variables that are similar to this study and the mediator usage conditions, the current study will examine service quality as a mediator in the relationship between CRMP dimensions (key customer-focus, CRM knowledge management, CRM organization, CRM-based technology) and marketing performance in Jordanian hotels.