Title: Impact Of Customer Complaint Management Of Reputation Of Hotels

Abstract

In today’s competitive business world, it has become highly important for a hotels’ management to ensure appropriate customer service through effective complaint handling. This research has been conducted with the intention of analysing the impact of customer complaint management on the reputation of hotels operating in UK. The study is conducted usinga quantitative research approach in which questionnaires were used for the purpose of data collection. The analysis has shown that there is a significant impact relating toeffective customer complaint management which influences the reputation and image of hotels. By focusing on effective complaint handling, hotel businesses can benefit from a better reputation.

CHAPTER 1: INTRODUCTION

1.1.Background

In the current and increasingly unstable environment, the customer’s voice is turning out to be more and more influential. It is said that ‘consumers are always right’. Therefore, if dissatisfaction is felt by them, action needs to be taken right away by the enterprise in order for them to receive the service they look for. Good quality service is the responsibility of consumers as much asit is of the enterprises. It is the responsibility of consumers becausecustomer feedback and complaints are very important for enterprises in order for them to understand their deficiencies. Feedback will then educate managers helping to ensure delivery of good quality service resulting in satisfied consumers who, in turn, will exhibit a strong loyalty and positivity regarding the enterprise. Even though consumers understand these days that they receive encouragement to complain, in reality they do not bother to complain if they encounter service failures (Boohene and Agyapong, 2011).

According to Xia (2013) hotels as service enterprises are confronted with the problem of the multifaceted nature of services. Undoubtedly, one in many of the key challenges which is encountered by an enterprise is developing an understanding of the standards expected by their customers. Evaluating service quality is therefore crucial in influencing customer satisfaction with service experience. A vital role is played by customer satisfaction regarding the success of the enterprises. Delighted and satisfied customers are likely to revisit, connect through a positive word of mouth and stay loyal. Some advantages which hotel businesses can profit from if they are successful in achieving a quality of service strategy are: increased profits and greater return on investments (ROI), positive word of mouth advertising, increased productivity, competitive diversity over other enterprises, as well as a better work environment and employee motivation. This research aims to identify the impact of guests’ complaint management on the reputation of hotel business.

With reference to Gyung Kim et al. (2010) it has been said that just 1 of 26 consumers who felt dissatisfaction complain in actual, however, just a fraction among those customers who complain follow a solution to their issue beyond the manufacturer, the seller, or to the agencies of government and customer groups apart from discovered in a survey that customers with the problems of service discovered that around 70% of customers completely justified in complaining do not usually do complaining. While satisfaction of customers is a significant aim to large number of enterprises and endeavouring to please customers on consistent basis, not every service offered are pleasing and result in satisfaction from the perspective of customer. Failures and breakdowns of service occur sometimes. In such events, expectations of customers will be disturbed, which might result in complaints from unpleased customers. Nevertheless, not every customer who is unpleased with the service complains in actual. When they are failed by a main service vendor, people tend to tell their colleagues, friends and family members rather than firing a complaint. This phenomenon confirms the perspective that just a small portion of damage as a result of poor service is revealed by complaints, and the potential of word of mouth approval. Apart from this, with reference to Mumford, it has been said that there are very less number of unpleased customers who actually complain, making this a worthless evaluation of customer satisfaction. Therefore, it is often thought by large number of enterprises that they have satisfied customers because they hardly ever receive any complain from their customers. Undoubtedly, very less number of customers will fire a complaint directly to the enterprise, but this doesn’t reflect that they are never going to complain others consecutively making a dissatisfaction pyramid. It has also been said by Mumford that key to success for an enterprise is held by its consumers. Just by acknowledging those in a better way will enable an enterprise to unlock its future potential. Usually, enterprises tend to take complaints lightly and emphasise more on giving a better service to its consumers. Lack of consumer feedback will lead to impossibility for an enterprise to understand whether or not they required a change and it would be rather safe to put the blame on consumers on this as they did not fire any complaint against poor quality of service by the enterprise (Van Noort et al. 2015). It is founded by Saeidi et al. (2015) that consumers who encountered flaws in service are being handled properly and quickly are satisfied more .A major role is played by customer satisfaction as quality is determined in the service location. Customer satisfaction will give a competitive edge to any enterprise that is battling against its rivals. Complaint management, in context, also provides a learning encounter for enterprises, for example, on services that need to be enhanced to give perfect quality of service. It is significantly important to notice dissatisfaction of consumers through their systematic management or handling.

Consumers who are openly encouraged to express their feeling of dissatisfaction from quality of service are interacting with organisations which could be considered as an opportunity to enhance customer / organisation communication. Therefore, complaints from customers should receive appreciation and be regarded as gifts.Enterprises generally do not make themselves ready to encounter negative feedbacks. Nevertheless, as it has been concluded by some researchers, the ratio of customer complaining to customer dissatisfaction is quite low which doesn’t facilitate the growth of society and the company. At first, large numbers of customers will be lost by the enterprise and an opportunity will be missed to close the loop holes. Secondly, bad word of mouth will takeawaya positive reputation of an enterprise. Ultimately an enterprise will not be able to enhance the quality of its products and services effectively unless they receive complaints regarding poor quality of their products and service. Moreover, when large numbers of people of a specific industry are in the above mentioned situation, industry growth will be delayed with an increased cost to society. Therefore, identifying customer complaint behaviours precisely, and administering them effectively and efficiently will boost the growth of industry (Einwiller and Steilen, 2015).

It has been seen in some hotels today that complaint management is usually disregarded by management and less managerial attention is given to the topic. It is difficult to understand this disregard and it is important for management to understand the importance of effective complaint management in order to build a good reputation in the hospitality industry. There can be a dramatic effect through customer complaint handling on retention rates of customers due to which positive word of mouth is created. It has been shown by Nikbin et al. (2011) that total expenditure of marketing can be reduced with the help of effective complaint management. This is also known as defensive marketing. In addition to this, it has been shown from previous studies that effective complaint management is considered to be highly profitable. For example, it has been found by research conducted by Technical Assistance (1986) that there can be 100% increase in return on complaint management. Consumers often think those hotels in which their complaints are managed properly are most preferable for them and they usually create a positive word of mouth for those hotels in the market (Grunwald and Hempelmann, 2010). This research is conducted in relation to examining complaint behaviour of customers and ways for hotel management to manage complaints of guests in an effective way.

1.2.Research Aim

It is critical that hospitality firms understand how to properly manage guest complaints in order to build up a consistent reputation

The aim of this research is to ascertain how hospitality firms can understand how to properly manage guest complaints in order to build a good and consistent reputation.

1.3.Research Objectives

To identify common reasons for guest complaints in high-end hotels in UK.
To evaluate different approaches used in handling complaints in high end hotels in UK.
To explore the benefits of effective guest complaint handling in the short and long term.
To ascertain management strategies which will improve guest complaint handling and improve guest satisfaction?

1.4.Rationale of Study

The goal of the hospitality industry is to increase the satisfaction level of customers. However, no matter how good the place is, there is a possibility of getting complaints from guests. This project has been carried out to evaluate the reasons and impacts of guest complaints and to provide methods of handling those complaints. It has become more crucial for hotel management to focus on effectively managing customers’ complaints. The power of consumers has been increased due to the development of the internet economy. Nowadays it has become easier for consumers to raise their voices against companies. The defection of customers is increased due to a high level of transparency in markets and fewer switching costs (Breitsohl et al. 2010). Due to the advancement in technologies, the level of interaction among guests and management of hotels has increased. Now consumers can easily file their complaint against any aspect within hotel that they dislike. In order to build better reputation of hotels, the management has to ensure effective management of complaints (Ekiz et al. 2012). This project contributes to hospitality managers and employees in improving the service. The findings of this research are intended to help management in understanding the importance of customers’ complaint management for improving the reputation of hotels.

CHAPTER 2: LITERATURE REVIEW

2.1. Introduction

This chapter is about review of different previous researches undertaken for analysing the impact of customers’complaint management on reputation of hotels. This chapter actually includes analysis of theoretical data that has been collected from different articles, books and internet sources. In this chapter, first of all some theories related to the topic are reviewed and then findings of previous researches are critically analysed,

2.2. Theoretical Underpinning

In previous researches, the study of customer complaint behaviour is done from normative managerial perspective (Cook, 2012). For providing an overview of complaint behaviour, in this section some theories related to complaint behaviour are reviewed.

The research on complaint behaviour is done in light of conventional marketing theories. The conventional view of marketing is usually dependent on transaction-oriented perspective. In a transaction, a product is delivered to customer and money is paid by customers in return of the product. If customers feel dissatisfaction with a product, then they may get involved in various complaint activities after buying that product, for example seeking redress and in the end receiving their money back (Chen, Shie and Yu, 2012).

2.2.1.Performance theories

According to Andreassen and Streukens (2013) in context of customer complaint behaviour, different theories are applied under performance theories. The most common applied theory is expectation-disconfirmation theory. According to this theory, it is argued that there is a relationship between satisfaction and size of disconfirmation experienced by a customer. The disconfirmation is relevant to initial expectations of customer. It is suggested by expectation-disconfirmation theory, it is suggested that if experience of customer is worse than expected then customer perceive service quality as poor and then that customer starts complaining. This theory has been criticised on the basis of empirical and conceptual reasons. The major area of criticism is linked with the dependence on gap score that are deduced through calculation like, the difference in between expected service and assumed service of customers.

Dependent over the exploratory research and criticism research, the development of standard-dependent tolerance was done (Berry and Parasuraman 1991). Poiesz and Bloemer (1991) recommended that it would be appropriate to expectations like a zone then being discrete points over scale. At the similar time, Berry and Parasuraman (1991) recommended that tolerance zone need to intervene in between desired level of customer and the service level that is considered as satisfied one by the consumers. The tolerance zone is the performance limit that is considered accepted by the customer. The important approach of this zone is that consumer accepts all of the variation in the boundaries zone and fluctuation do have marginal influence over assumptions of service quality. Any experience of service below the levels which are acceptable will develop frustration in customers and will enhance the complaining possibility (Heung and Lam, 2003). As compared to the measuring instrument of disconfirmation, which has static base, the tolerance zone model gives more of the measurement of quality of service and consumes much of the dynamic approaches of complaint behaviour of customer.

Prospect theory defines that how customer makes any choice in between alternative that include risk, like to make complain or not (Kahneman and Tversky 1979). The assumption of consumer of probabilities and potential results linked with the specific action can affect the behaviour of complaint. Consumers put much of the stress over negative variation. The consumer assumes that the losses will be more as compared to the gains. Asymmetric disconfirmation states that negative performance have more of the affect over purchase intention and service experience as compared to the positive performance (Kahneman and Tversky 1979; Mittal et al. 1998). Following the theory way, losses are heavier as compared to the gains; it may take service experiences for tempering the influences of negative incident. Tolerance zone, disconfirmation theory and prospect theory recommends that negative performance affect the customer more as compared to positive performances. Complaints experience from two of the negative events (unfavourable recovery and negative critical incident) given a favourable recovery. The negative incidents are heavy as compared to the recovery. This concludes important rating dips (González Bosch and Tamayo Enríquez, 2005).

2.2.2. Fairness theories

It is proposed by equity theory that behaviours and attitudes of customers are influenced by their appraisal of their support and rewards received by them. The inputs or support may comprise of factors such as a beneficial service recognition, status and experience. When it is believed by customers that there is presence of inequality in an exchange, they turn out to be regretful, disappointed or upset. Accordingly, various complaint responses might chosen by customer relying on the action which is expected to reinstate equity with lesser cost. Justice theory depends on a 3-dimensional view of fairness concept and has progressed over time to involve interactional justice (Bies and Shapiro, 1987) and distributive justice (Austin and Walster, 1974). Interactional justice refers to interpersonal attitude in the endorsement of policies and delivery of results. However, distributive justice deals with the alleged fairness of concrete consequence or outcome of a decision. Procedural justice defines whether the criteria or policies in decision making are taken as being fair or not. A comprehensive framework is offered by justice theory in order to understand the mechanism of complaint from instigation to completion (Lind and Tyler 1988; Thibaut and Walker 1975).

Both justice theory and the theory of equity propose that perceptions of equity are persuaded when comparison of outcomes, procedures and interactions is made by the customer with others or foregoing experience. The code of justice sustains that consumers, in the relationship of exchange with others, are permitted to achieve a reward which is corresponding to what has been invested by them in exchange relationship. The theory of equity enlarges this viewpoint to involve other relative conditions which may affect the alleged equity of customer’s exchange relationship (Christiansen and Tax, 2000). With respect to theories depending on equity, a supplier of service that takes into account customers as dispensable will apply an under-benefiting approach which involves either ignorance of complaints by customers, or merely provides them an answer to their question. However, a supplier of service that stresses a long-term assurance with its consumers will create an over-benefiting approach. The foundation behind over-benefiting is the expectation of gaining larger profits with the help of favourable word-of-mouth and future purchases. Undoubtedly, handling of complaint can be viewed as disappointing or delighting the consumer depending on whether expectation of consumers were exceeded or met (Gilly and Hansen, 1985).

2.2.3.Response theories

Attribution theory focuses on the cognitive procedures with the help of which a person deduces the reason of behaviour of a customer. This theory proposes that when a customer has faith in that a service firm is accountable for a damaging consequence, or trusts the service firm became unsuccessful to meet performance anticipations, then the firm should be blamed by the customers (Hollan, 2008). There are 2 main characteristics of Responsibility Judgement. These are considered to be the perception of customers about the reason of consequence, and secondly, the perception of customers about fulfilment of the expectations. The main factor emphasised by attribution theory is that the customers who complain might trust that the service provider constantly makes blunders.

Commitment theory says that customers are ready to make struggle to keep a relation with a vendor (Morgan and Hunt 1994). The theory is of view that the procedure that leads a customer towards buying decision and develops a connection. Complaint behaviour is not considered to be an incidental conduct in reaction to an adverse service experience; it is an outcome of the obligation of the customers in a relation. This theory says that complaint is the outcome of a commitment related with the buying decision and the association. Scholars have used numerous ideas when discovering and defining customer complaint conduct, though the field cannot be categorised as theory centred. The models that are centred on human relations such as the viewpoint, justice, and response concepts are all appropriate for enlightening complaint behaviour of customer. Therefore, there is a big prospective for future study to apply these theories and other social science models to complaint behaviour of customers (Morgan, 2000).

2.3. Customer Complaint

Customer complaint is considered to be a complicated mixture of psychology and conduct, connecting many characteristics such as motive, purpose and manner of performance. Thus, there are various explanations about it. It was stated by Jacoby and Jaccard that customer complaint is person’s actions to deliver destructive information about goods or services to the companies or third-entities, that specifies the characters of actions/conduct of customer complaint is to transfer damaging facts (Coussement and Van den Poel, 2008). It was stated by Tronvoll (2011) that customer complaint is a type of customer struggles for transferring the disappointment condition in their buying or consumption, which stresses the aim complaint of customer. It was revealed by Singh that there are common bases for customers’ complaint. Primarily, customer complaint is determined by their dissatisfied sensation and feeling (Lam and Tang, 2003). Additionally, customer complaint can be categorised into behavioural reactions and non-behavioural responses. Next, numerous customer complaint actions are not aggressive communally, but may happen instantaneously. Later on, Singh provided the acceptable definition and stated that when customers are not satisfied with the consumed products, determined by the dissatisfaction feeling, then wide range of behavioural or non-behavioural reactions will be observed (Tronvoll, 2007).

Every dis-satisfied customer does not show his/her dissatisfaction openly toward retailers. Few of the customers may not take any step, others can criticise the products in front of their families and relatives (for example: consumers’ associations). Sharma et al (2010) categorised CCB into 3 kinds known as direct complaint as well as third complaint along with private complaint. It is meant by direct complaint that complaints are made by customers to the individuals or organisations that are connected in dissatisfying consumption and outside of his community group such as retailers. The complaints that are made by a dissatisfied to his friends or people in the social circle are considered to be private complaints. It is meant by third-party complaint that the customers have made complaints to the person that is external to the business concern and has not played a direct role in dissatisfying customers, e.g. media as well as law associations.

The scholars are of view that the third-party complaints have not the same level as of private and direct complaints. As per Su and Bowen (2000) only a few number of customers go for third-party actions or complaints. It was stated by McQuilken and Robertson (2011) that if consumers trust that compensation is probable by complaining straight to the selling body then the complaint will not be expressed to others. As per view of Ee Kim and Lehto (2012) third party complaints are done by the customers when the harm is less and where the customers takes a distress to a government organisation, customer security group or any other official agency.

2.4. Customer Complaint Behaviour

Customer complaint basically is the mixture of psychology and behaviour; it comprises of greater number of strategies such as way of reason, motive and active. Hence, there exists greater number of interpretations in terms of intention. It is stated by Haverila and Naumann (2010) that customer behaviour in fact is personal behaviour of a consumer to transmit information in terms of products and services to firms or third parties, which represents that the significant quality of customer complaint behaviour is to transmit information that is considered negative. Customer complaint behaviour is a kind of endeavours of consumers to change the situation of discontent in purchase or consumption, which focus importantly on the behaviour of customer complaints. In outlining literature view on behaviour of customer complaint, it is reported by Sitko-Lutek et al (2010) that there is presence of various groups concerning customer complaint. At first, the significant factor of customer complaint is their unhappy feelings and perceptions. At second level, customer complaint is categorised as non-behavioural and behavioural responses. Thirdly, not all customer behaviours are aggressive, they can occur at the same time. Then a definition is presented by Singh which can be undertaken. When there is presence of displeasure of customer in terms of any product or service being used by them andinfluenced by displeasure emotion, due to this more non-behavioural feedback are created by customers. It is not necessary that all unpleased customers show their dissatisfaction regarding products or services to sellers as some customers do not bother to surf their mind in commenting They simply do not visit that enterprise again (Gelbrich and Roschk, 2010). According to Svari and Erling Olsen (2012) some customers do not do anything in this matter such as they simply do not take any action; such types of customers complain and discuss in front of their friends and relatives or even to third parties such as association of customer or courts. With respect to the complaint objects, the classification of customer complaint behaviour was done by Trappey et al (2010) in three types: direct complaint, private complaint and third complaint. Direct complaint refers to customers’ complaints to individuals or organisations involved in the displeasure of consumption and outside of the social environment such as shopkeepers. Private complaints show customer complaint behaviour which are involved directly in the displeasure of exchange and are inside of customers’ social environment such as friends and relatives; third-party complaints involves complaints of customers concerning individuals or organisations which are outside of social environment of customers and there is no direct involvement of them in displeasure of exchange such as law institution and media. However, it is exhibited by few of the research that complaints of third part are not the same as the other two parts of complaints, and in fact customers do not tend to make plea to third party initially. The third party activities are not accepted by greater number of customers.

It is stated by Ahmed and Amir (2011) that if majority of customers understand that it is likely to restore by complaining to selling enterprises in a direct way, they likely to be less complaining. It is thought by Wu (2013) that the aim of less investigation is third-party complaints in which the core concern of customers is the safety group of customers, governmental organisation, enhanced Bureau of Business or any formal party. In conjunction with this, complaint behaviour of an individual is dependent on the social standards of customers and perception role; more importantly, there is deterrent of customers to point out the service of suppliers of service and voice their complaints in case where there is less dominant power of the customer and are not able to control sufficiently, influence the expertise of service suppliers and question due to social standards or minor professional knowledge in a particular area (for instance, medicine, jurisprudence and so on). Researches associated with customer complaint behaviour distinguishes between 4 reasons which result in customers to examine the issue, few of them are defined below:

To get refund of the compensation of economic loss.
To get self-esteem back and to get rid of anger.
To help in improving the service quality (in large number of consumer’s involvement in the delivery of service like university or bank.
Because of altruistic motivation, to prevent other people experiencing the similar problems.

With the help of effective handling of complain, the employment and development of procedures can be done which implies motivating customers to return disgruntled customers to happier ones (Harris and Ogbonna, 2010).

Following the effort of complaint handling can be called as investments which help to secure the profits and to retain customers. In accordance with the processes of complaint handling, it implies to do compensation or to make apologise or excuse. In addition to this service right in the other trial attempted to make correction in what was not right (Liao 2007). In this approach Varela-Neira, Vázquez-Casielles and Iglesias (2010) divided the techniques of complaint handling into two types termed as psychological technique and tangible technique. The major objective of psychological aspects was on different actions like problems for consumers and apologises. On contrary to this, in this condition, communication is the major target; the concentration is made over the tangible approach and stress is made over the material compensation and refunding.

According to Uusitalo, Hakala and Kautonen (2011) as connections are different and the distinction is constitutive. According to the organisational perspective in the context of B2C, the major focus of complaint handling is cognition and remedy of people and problems which affect the consumers of the company. The rationale behind the customers’ protest such as reasons of initial dissatisfaction of consumers is multifaceted. Decrement in the issues of delivery, slow products and service, employee conduct, damage in the product are the major issues. The identification of various antecedents of CCB has been done. For instance, consumers’ response is dependent over type of service failure, customers’ attitude related to the emotions and complaints of consumer. The meditation of process is done with the help of factors, like making decision for if to make complaint or not. The classification of complaint reasons and intentions have been done by the researchers with the help of differentiation like whether customers suffer from the monetary loss due to the failure rate (Gallagher and Dietrich, 2014).

According to Namkung, Jang and Choi (2011), there is a justification of claims related to compensation and redressing, as there is unreasonable behaviour of some customers. However there is no involvement of these variations in examination that is provided because there is difference of intention of different complainers. In question regarding management does not include behaviour of customer. At the time of dissatisfaction of customer about some product or service, they can show different types of reactions. One choice is that they may leave the firm or make complaints about the company. The second choice is selecting public action like giving complaints and reviews of company in social media.Wang et al (2011) identified those results of modelled potential CCB and opportunities as observed through the perspective of the company.

Following Fan, Miao and Wu (2013) efforts of complaint handling should be taken as investment which assist in retaining consumers and protect profit. Complaint handling policies can mean compensation of material, excusing or apologising as well as doing core service right at second attempt correcting what is wrong. According to this, Chen, Shie and Yu (2012) did the division of strategies of complaint handling into two kinds: tangible and psychological strategy. The psychological approach emphasises the actions such as explanation of issues to consumer and apologising. In this situation, stress is implemented over communication; the tangible approach concentrates the compensation of material and refunding. Same like this, Gelbrich and Roschk (2010) recommended that process of resolution of issue involves two dimensions: functional and technical dimension. The technical dimension can be taken as the result of complaint handling, more particularly what customers gets after the efforts of service provider for fixing the issue. On contrary to this, the functional dimension is linked with the execution process. Along with it, Harris and Ogbonna (2010) stress over the prominence of dimension in process of complaint handling and depicting that the result is most important when delivering the service; yet it can be based on service kind at the point.

2.5. Customers’ Complaint Management and Reputation of Hotels

When the consumers are dissatisfied with a company, then their faithfulness to this company will reduce respectively. On the other hand, the chance of rebuying will not be minimised to zero directly as dissatisfaction demonstrates numerous degrees. Actually, there are 2 phases in buying procedure. Primarily, when the customer is satisfied with the goods then they might rebuy it. Secondly, when the customers are dissatisfied then they will focus on the second phase i.e. selection of brands other than the experienced ones. When the company becomes successful in retaining the dis-satisfied customers, by changing the reputation in front of customers, meet the needs of customers and pay compensation for damages then customers can rebuy the products of same brand. Else, “high dissatisfaction” will not buy a product from same brand (Van Doorn et al, 2010).

It is found by the researchers that managing customer direct complaints in an effective way is good for the brand. As per Álvarez, Casielles and Martín (2010) sellers make the most of complaints from customers for decreasing the buyers’ turnover and other undesirable consequences. The customers that become successful in providing proper reaction to company’s failure services are more probable to be retained, to purchase new goods, to pay price rewards, to involve in positive WOM and to suggest the firm’s services to other people (McQuilken and Robertson, 2011). It was stated by Saeidi et al (2015) that consumers are less exposed to shift and less probable to spread bad WOM to friends when their direct complaints are handled efficiently.

According to Cook (2012) related to the links of inter-organisation, care of customer and specifically the complaint management is significant factor for keeping the customer relationship satisfied. It is due to the fact that in the marketing of business to business, less customers and much of the demand make long term links which concludes in more dependence over every particular customer. Same like this, complaint management will decrease the assumed intermediaries’ risks. Based on the methodology of customer link management, viewpoints and customers of the consumers can be investigated and evaluated through including given techniques.

In research done by Einwiller and Steilen (2015) the administration of the complaints through consumers has been done related to the company. Kolmogorov-Smirnov and web-based questionnaire analysis variable was evaluated for the analysis and identification of data. This study includes the online survey for collection of data. For evaluation of complaints, Lindblomain application was included. The figures and facts describes that recent procedure does not give the assumed value and experience of customers. Same like this, the procedures are inappropriate related to the communication with customer. It is harder for them to differentiate in between feedbacks, and therefore, they don’t have much potential to make positive decisions and sorting out complaints.

The inauguration of PARA diagnostic framework was done which focuses over the redress problems related to the services through involvement of techniques of data processing. The techniques of data mining were explored for exploring the integration in between the complaints of customers and shortcomings in organisations that provide services to customers. It started with exploration and then solution is provided on identified problem. After this, organisations formulate strategies and business plans.Complaints giveopportunities to these regulatory to learn through mistakes. In the studies, the authors did the evaluation of whether the clients answer the complaints or not in various manners. Their consumers depicted that satisfied consumers and extremely loyal consumer are vulnerable to register more of the complaints (Zhao et al, 2012).

Four customers group with the objective to make complain in the research are identified as given: silent potential, silent supporter, loyal voices and pure complainer. The silent supporters (low inclination to high loyalty and complain) depicted the biggest behavioural objectives. On contrary to this, pure complainers (more inclination to low loyalty and complain) depicted the lowest behavioural objectives. This research gave an experiment dependent over the scenario to get acknowledged of the link in between services failure, levels of complaints and loyalty of customers. A bipolar scale with seven points was given for calculating the satisfaction of customer. For ensuring the consistency of levels of failure, discrepancy evaluation was integrated. Any assumption in post behaviour of consumer in the happening that is encountered with future issues was not given in this study (Chang, Khan and Tsai, 2012).

A research given by Larivet and Brouard (2010) did the evaluation of the complaints which are collected through call centres. This research includes the identification of consumers as value authors. For production of rectification of service, a decision support approach based over web was utilised by them for the evaluation of voice of customers (VOC). VOC group is significant for providing the complaints evaluation of consumers. These analysts do not involve much of the sources for communication and efficient interaction with customers to ensure that CRM has been implemented successfully. It is also necessary to consider the customer satisfaction and to do the analysis through using current data having victorious CRM. Complaints can be taken as the opportunity in the procedure which can assist in making improvement in the service quality. This research included the procedure of critical incident. Categorised complaints and gathered complaints are well identified. Along with it, the indemnities provided by the hotels and restaurants has also been analysed.

Through the technique of critical incident, the qualitative data needs to be collected through interviews and questionnaire surveys. The major reason of failure of complaint management was given by Levy, Duan and Boo (2013) who chose a case organisation for identification and classification of problems. The records of past clients were used and the level of complaints and satisfaction was analysed after the service recovery. The major perspective of this research was to assist the company to make a better link with consumers. For the collection of data, scale classification initiating from 0 to 10 and interview survey was done. Along with it, in the other research, Heung and Lam (2003) did the analysis of the dependability of complain of customer. This study also modelled and classified the customer complaints followed through communication in between organisation and consumers. The researchers utilised the analysis of text mining for collection and clarification of customers’ opinion which lead to evaluation. For attainment of this, they started the classification of customers through using voices.

Whenever consumers feel dissatisfaction with some brand, then it results in reduction in their level of loyalty. However, it is not compulsory to have to zero repurchase in case of dissatisfaction because there are different levels of dissatisfaction. There is an involvement of two levelsof purchasing by customers; first, if customer is satisfied with the product then there are chances of repurchasing that product by the same customer. In contrast to this, in case of dissatisfaction, second option is applied by the customer in which, he or she starts searching for other brands in order to fulfil his or her demand. If an organisation becomes successful in retaining dissatisfied customer, changing its image and upgrading expectations of customers then the repurchase behaviour of customer can be positively affected (Wu, 2013).

It has been indicated by previous empirical researches that there is a direct impact of effective complaint management on reputation of organisation. Yilmaz, Varnali and Kasnakoglu (2016) suggest that minimisation of complaints of customers can help in reducing turnover of customers and other relevant impacts. When appropriate response is given by organisations to customers for their complaints then it significant affects their retention level and engagement in creating positive word of mouth. Van Doorn et al (2010) found that there is less vulnerability among customers for switching and they are less likely to create negative word of mouth when companies respond their feedback in an efficient way.

2.6. Theoretical Framework

Reputation of hotels

2.7. Research Hypotheses

Ho: There is no impact of customer complaint management on reputation of hotels.

H1: There is a significant impact of customer complaint management on reputation of hotels.

2.8. Summary

It can be summarised from above analysis that from most of previous studies, it has been found that when management of organisations effectively manage complaints of customers, then this creates a positive impact on organisations. Customers generally feel satisfied and loyal to the firm that manages their complaints in an appropriate time. Moreover, the analysis has shown that if an organisation does not give response to complaints of customers effectively and in an appropriate time, then it results in creation of negative image of organisation in minds of customers.

CHAPTER 3: METHODOLOGY

3.1. Introduction

In this chapter, light is shed on research design, and methods used for undertaking the research along with the justification behind selection. There are different sub-sections of this chapter like research design, approach, data collection, data analysis, reliability and limitations.

3.2. Choice of Research Design

For fulfilling the aim of research, two research designs were considered. In accordance with Mackey and Gass (2015) on the basis of researchers’ aim of examining, kind of information needed to collect, required sample size, analysis and expected results, research designs are categorised as exploratory or conclusive. In case of exploratory research design, there is no accurate structure of research process, whereas the information is not clearly identified and data sample is not representative. In this kind of research, primary and secondary data can be used, whereas primary data is collected with the help of surveys and then analysis is done quantitatively.

In opposite to this, the aim of conclusive research is examining some hypothesis or testing the relationships between some specific variables. In this case, the process of research is well-defined and schematic, whereas the clear identification of information is done and generally in this type of research large and representative sample size is used. In addition to this, quantitative techniques are used for analysing the data. In this case, the conclusive results are obtained and can be utilised for managerial implications among practitioners (Flick, 2015).

The current study is conducted with the help of conclusive research design in which some hypotheses were formulated and then tested with the help of statistical techniques and measures. According to Gast and Ledford (2014) there are two kinds of conclusive research designs, named as cross-sectional and longitudinal research design. The cross-sectional study includes collection of data for one time whereas in case of longitudinal study the data is collected for some period of time. Longitudinal data helps in analysing change over the period of time. As this study is conducted for analysing the impact of customer complaint management on reputation of hotels, so, for analysing this, cross-sectional study is used. The data is collected for one specific time period from customers of three hotels in UK.

Figure 1: Types of data

There are two techniques that can be used for conducting a research. These techniques are qualitative and quantitative research techniques. In case of qualitative research technique, insights and detail about examined research issue is gathered. Moreover, this type of research technique is used to analyse results of quantitative research that makes scholars capable of obtaining deep understanding of investigated issue. In case of qualitative research, there are a lot of chances of having biasness in data (Billig and Waterman, 2014). According to Pickard (2012) for escaping misuse and misinterpretation of findings, qualitative research should not be used. In opposite to this, in quantitative research, hypotheses are developed and then tested with the help of quantitative data. In this type of research method, there are lesser chances of biasness and data is also generalizable and reliable. The results obtained with the help of quantitative research are conclusive in nature and can be generalized on larger size of population (Bryman and Bell, 2014).

In current study, quantitative research method is used for testingthe relationship between identified variables. The dependency of positivist or functional paradigm that governs the quantitative inquiry mode is over the perception that social reality owns the major ontological structure and that individuals can be called as the responding agents for this objective surrounding (Flick, 2015). Quantitative research includes measurement and counting of different events and it also involves analysis of body of numerical data. The major objective of the positivistic paradigm is that there is basic truth which is present in the world, which can be explained and measured scientifically. The major objectives of quantitative paradigm are the validation and reliability of measurement, and its generalization in clear assumption of causes and effects (Bryman and Bell, 2014). When the collection of research data is done as it is mainly dependent over numbers, then it becomes easier to place together and collate data into tables and charts form. When it comes to the placement in terms of charts and graphs, it becomes easier to read; as if it is being placed into pie chart it actually becomes easier to read. However there are always some of the disadvantages along with the advantages. One of the only disadvantages is that it is totally dependent over figures and so it is not updated. It is basically required to be updated because of the alteration of members(Pickard, 2012).

In addition to this, the information needed to conduct the study was collected and theoretical framework was also used in order to develop questionnaire. For finally distributing questionnaires to all respondents, pilot study was conducted in which questionnaires were distributed to 25 respondents. This assisted the researcher in improving questionnaires so that any kind of ambiguity in questionnaire can be avoided and ensuring that clear and precise answers can be provided by respondents (Keutman et al, 2015). The final questionnaire was distributed to 200 customers of hotels operating in UK and 178 filled questionnaires were got in return.

3.3. Research Approach

According to Bryman and Bell (2014) there are two approaches that can be used for conducting the research. These two approaches are inductive and deductive approach. Inductive approach is applied in studies where some particular observations of reality are executed and a theory is created with the help of this. In contrary to this, deductive approach is an opposite approach in which existing theories are used for establishing a rational relationship between concepts, through development of hypothesis and then concreting empirical evidence (Mangal and Mangal, 2013). This study is conducted on the basis of deductive research approach in which existing theories and literature were used to test formulated hypotheses. Furthermore, findings of current study are compared and contrasted with existing literature for drawing conclusions and recommendations for future research.

3.4. Construction of chosen method

In order to collect quantitative data, a survey research method was used. This technique helped researcher in obtaining opinion of respondents and describing their behavioural patterns.

Fundamentally, another benefit of survey research is related with the possibility of gaining precise and rapid primary data but covering large number of participants (Synder, 2012). Additionally, the questionnaire was designto reproduce the study hypothesis and observe customer state of mind connected to the general satisfaction with their hotel service, also customer’s anticipations from service supplier in case of service disaster and customer actions outlined in reaction toeffective/inefficient complaint supervision. Earlier the final questionnaire was developed the investigators had planned a pilot survey instrument and managed among participants of test-group to test it for uncertainties and understanding. Subsequently, numerous variations and developments were made was and then monitored by applying coefficient Cronbach’s alpha to guarantee internal reliability of items. The value of coefficient alpha was 0.788. This shows internal consistency of items is high. The questionnaire was designed in such a way that it contained 3 sections, one for studying demographics about customers, the second section includes the items related to customer complaint management and the last section was related to reputation of hotels.

For the study, a 5 point Likert scale is used for measuring the responses. Likert scale is highly useful rating scale with odd number of groups (Brubaker et al, 2012). Sekaran(2014) stated that out-dated strategies propose using scale with odd number of classes to minimise getting neutral or indifferent replies. Likert scale can easily be interpreted by researcher and the participants easily understand it. It can be sent via mail and e-mail too.

3.5. Sample

The sample for the study was 178 customers of five hotels operating in UK. The sample was selected with the help of convenient sampling technique. This technique was used as it helps in collection of expedite data and calculations can be begun easily. Moreover, the data is readily and conveniently available. The researcher can save a lot of overhead by using this sampling technique (Gast and Ledford, 2014).

3.5. Procedure

The data is collected through questionnaires from customers of hotels. The questionnaires were circulated individually and electronically. The participants were guided by the researcher. The valid answers were guaranteed because researchers helped respondents in filling the questionnaires. Researchers consider survey approach as highly effective and trustworthy method for collecting the data. The respondents were not convinced by the researcher to answer the questions. The participants fully agreed to participate in the research as sample.

3.6. Data Analysis

After gathering data from the sample, it was made sure that all of the questionnaires were filled or not. First of all, the demographic information of sample was analysed with the help of Minitab. Primarily, the responses of participants were analysed with the help of percentages as well as frequencies. Then, researcher conducted correlation analysis as well as Pearson’s coefficient to understand the connection between variables. Subsequently, linear regression analysis was conducted to recognise relationship between customer complaint management and reputation of hotels. The independent variable was complaint handling. The dependent variable was reputation of hotel.

3.7. Reliability/validity/ethical considerations

It is important to pay attention towards the ethical considerations whilecarrying out the study. There are different ethical issues that werefaced by researchers. It must be ensured by the investigator that data collected form the participants is kept private and used solely for the purpose of study. It must be ensured by the researcher that complete secrecy will be maintained. Researchers should never force anyone to fill the questionnaire and it is important that participants agree to give information. The permission of respondents should be gained first by the researcher (Gast and Ledford, 2014). Candidates will sign on the authorisation letter and will announce that they have filled the questionnaire as per their own wish and were not forced by the researcher. Furthermore, objectives and aims of questionnaire are also provided to the participants. In this research, the researcher tested the reliably of the questionnaire before giving them to the participants. The questionnaire was also discussed with the academic professionals and specialists. Furthermore, the reliability of questionnaire is tested by the investigator by focusing pilot testing. In the pilot testing, the constructed questionnaires were provided to the ten of the participants and they filled it and the researcher checked the future results of the research.

3.8. Research Limitations

The major research constraint or limitation experienced by researcher was time constraints. A lot of time was consumed by researcher in constructing the questionnaire, conducting pilot study and distributing to the participants. The data analysis procedure was also lengthy and time consuming. The participants took a lot of time in filling questionnaires and time left for analysis was quite short.

3.9. Summary

This chapter can be summarised in a way that in order to conduct a study in a successful way, it is important to identify an appropriate methodology. The present research is undertaken with the help of quantitative research technique. The research is deductive in nature in which previous theories are used for drawing conclusions. In case of quantitative research technique, questionnaire was used to collect primary data. The data is collected from customers of hotels operating in UK. The analysis of primary data is done with the help of Minitab software.

CHAPTER 4: ANALYSIS AND FINDINGS

4.1. Introduction

In this chapter, findings of the survey are presented. Though, this is the most important chapter of this research. It starts with the descriptive analysis and then it moves towards the inferential analysis where regression and correlation analysis are performed. The reliability analysis is also part of this chapter. The survey findings are presented in the form of tables and graphs.