UNIVERSITY OF THE PUNJAB GUJRANWALA

CAMPUS

Submitted By
Sania Aleem 20026
Submitted To Sir Abdullah
Class BBA. Hons.
Semester 8th
Section Morning (A)
Subject Marketing
Date 22 May,2024
The role of customer relationship management in
marketing
Introduction
For the long-term in-service sector, the marketing expert is enforcing to gain client loyalty
(Javed & Cheema). Customer loyalty has been emphasised in earlier literature, but the service
industry still faces many challenges in overcoming it. High market unpredictability is the
primary cause of top management's inability to win over committed customers (Aramburu &
Pescador, 2019). Many studies from the past highlight managers' inability to increase profit and
win over a high degree of customer loyalty, but this is still because there isn't enough research in
this area. Cheng et al., 2019), they were unable to identify the elements that increase client
loyalty (Rather & Hollebeek, 2019). Because of the administration's bad policies and strategies,
the consumers' bad perception of the company, and their unhappiness with the finished product
(Wolter et al., 2017). Because management is not attracted to customers, most organisations do
not show enough concern for the needs, wants, attitudes, and trends of their customers
(Herhausen et al., 2019). As a result, a lot of businesses failed to draw in new clients and lost
their existing clientele. Because building good client relationships can help you draw in new
business and keep it over the long run. However, keeping clients happy and retaining their
loyalty requires more than just managing great relationships. In the modern era, a company's
reputation needs to be improved to maintain customer happiness and loyalty. Nonetheless,
research has rarely focused on this particular period in emerging economies. on this study,
customer happiness plays a mediating role as we investigate the significance of CRM and
business reputation on travellers' loyalty. This study increases visitor loyalty, which benefits
organisations by increasing profitability.
Furthermore, due to its critical role in determining corporate performance, client loyalty has
emerged as a notable predictor in the business sector (BahriAmmari & Bilgihan, 2019;
Paparoidamis et al., 2019). Customer loyalty, nevertheless, does not happen overnight.
Businesses must invest a great deal of effort, money, and time in it (Izogo, 2017; Nyadzayo &
Khajehzadeh, 2016; Tseng et al., 2017). Business organisations have placed a high priority on
enhancing loyalty because it is crucial to profitability. As a result, they have allocated significant
funds to human resources management (Chiang et al., 2018).
Nevertheless, a lack of strategy and a lack of resources caused many businesses to fail in gaining
the loyalty of their clients (Cheng et al., 2019; Herhausen et al., 2019; Wolter et al., 2017). A
wide range of factors, including customer engagement (So et al., 2016), product quality (Kasiri et
al., 2017), customer trust (Stathopoulou & Balabanis, 2016), satisfaction (Schirmer et al., 2018),
commitment (Tabrani et al., 2018), and other factors (Marakanon & Panjakajornsak, 2017), have
all been the subject of numerous studies that have attempted to investigate their effects on
customer loyalty.
Studies on the mediating function of customer satisfaction among Customer Relationship
Management (CRM), corporate reputation, and loyalty have been mostly overlooked despite all
the efforts. 2 R. U. Khan ET AL. Therefore, the goal of this study is to investigate how customer
satisfaction functions as a mediator between CRM and loyalty in the tourism industry, as well as
between business reputation and loyalty.
Furthermore, affluent economies have given much discussion to these aspects (Mang'unyi et al.,
2018), but emerging economies have only seldom received attention (Rahimi et al., 2017). Our
study's findings are distinct from those of studies carried out in developed economies because
organisational practices, product life cycles, and company reputations differ in developing
economies from developed economies due to differences in internal rules and regulations and in
governmental organisational policies. Despite all the efforts, not enough scholarly attention has
been paid to the mediating function that customer satisfaction plays between CRM and loyalty as
well as between company reputation and loyalty.
For example, Rather et al. (2019) found that until visitors have a sense of trust and commitment,
reputation-related factors do not directly keep their loyalty. In their tested model, they also
disclosed other mediating elements associated with pleasure. Similarly, Menidjel et al. (2019)
contended that a relationship with clients and visitors in the relevant sector is necessary for
happiness and loyalty. According to Cakici et al. (2019), investing in the connection and
satisfying aspects might lead to satisfaction and loyalty.
We thought that customer satisfaction is a good mediator to test between CRM and loyalty as
well as between corporate reputation and loyalty, based on current research work. Accordingly,
based on the explanation above, achieving the happiness element among customers can lead to
their loyalty.

Literature Review
The new study was built on the findings of earlier research since Das et al. (2018) proposed that
cultivating a special relationship with consumers can maximise long-term customer loyalty to the
business. Furthermore, Rather et al. (2019) state that consumer loyalty to the business is a
measure of how satisfied customers are with the finished product. Thus, the theory of
relationship marketing is based on the indirect relationship between customer relationships and
customer happiness as well as achieving results as client loyalty. According to the notion of
relationship marketing, customer relationship management builds strong relationships with
clients, which in turn encourages long-term commitment and fosters loyalty (Zeithaml et al.,
1996).
Additionally, this theory shows that, in comparison to those who lack loyalty, organisations that
have great customer loyalty JOURNAL OF RELATIONSHIP MARKETING 3 are far more
advantageous for profit maximisation (Berry, 1995). Due to the fact that CRM may be used to
draw in new clients, establish solid bonds with both suppliers and clients, and successfully
maintain those relationships over time through client satisfaction (Balaji, 2015). According to
Agrawal (2020), the CRM possesses the ability to increase customer satisfaction and foster
loyalty. Thus, resource-based view theory serves as the foundation for the second indirect
relationship between a company's reputation and customer loyalty through customer satisfaction
(Barney, 1991). Accordingly, RBV proposed that the primary source of competitive advantage is
organisational resources (Barney et al., 2011). Within the existing structure, client happiness and
business reputation.
Naturally, as interest in redefining the emergent framework's primary goal developed, a variety
of methods and definitions for summarising the essential elements of CRM surfaced. As to
Zablah et al. (2005), there are those who perceive CRM as a process, while others view it as a
strategy, philosophy, capability, or technology. In turn, Payne and Frow (2005, p. 168)
discovered three distinct viewpoints on CRM after examining a wide range of definitions. First,
CRM may be a tactically focused, tightly defined strategy that involves launching a particular
technology solution project. CRM could be characterised in three ways: first, as "the execution
of an integrated series of customer-oriented technology solutions"; second, more broadly and
strategically, as "a holistic approach. In recent times, there has been a growing recognition of the
strategic significance of customer relationship management (CRM). This has led to the
conceptualization of strategic CRM, which aims to maximise the lifetime value of each client to
the organisation by treating them differently (Peppard, 2000; Reichheld, 1996). According to
Payne and Frow (2005), p. 168, "improving shareholder value through the development of
appropriate relationships with key customers and customer segments" is one way that strategic
CRM is actually put into reality. The creation of customer data, tracking the most valued clients
over time, building client loyalty through interaction, offering personalised services and goods
while cutting expenses are a few of these (Rigby, Reichheld, & Schefter, 2002; Cao & Gruca,
2005).
The IDIC 14 model—identifying, distinguishing, interacting, and customizing—is another name
for this fundamental concept of strategic customer relationship management (Peppers & Rogers,
2004).
However, Waves 2 and 3 demonstrate how the research area has become fragmented and
inconsistent due to the lack of a consensus definition for CRM and the pluralistic nature of the
term. There have been inquiries made by some as to whether CRM ultimately improves company
performance (Fan & Ku, 2010; Ernst et al., 2011; Reimann, Schilke, & Thomas, 2010).
For instance, research by Reinartz et al. (2004) demonstrates that relationship beginning is the
factor that has the greatest impact on relationship maintenance, after CRM process
implementation. Nevertheless, they contend that CRM technology may potentially impair
performance (refer to Jayachandran, Sharma, Kaufman, & Raman, 2005). As noted by Mithas,
Krishnan, and Fornell (2005), our understanding of how CRM applications affect business
performance is still quite restricted. Reimann et al. (2010) conducted a study that supports the
idea that cost leadership and difference act as a mediating factor between CRM and company
performance, meaning that CRM does not directly effect firm performance. Overall, because
different viewpoints on the relationship between CRM and business performance have been
used, academics have criticised the literature's fragmented structure (Keramati, Mehrabi, &
Mojir, 2010).
A related body of literature, known as Hansotia (2002), King & Burgess (2008), Ko, Kim, Kim,
& Woo (2008), Wilson, Clark, & Smith (2005), Richard, Thirkell, & Huff (2007), Krasnikov et
al. (2009), has concentrated on the adoption and implementation of CRM, particularly from the
viewpoint of information systems (e.g., Ling & Yen, 2001; Xu, Yen, Lin, & Chou, 2002; Roh,
Ahn, & Han (2005), Chalmeta (2006), Teo, Devadoss, & Pan, 2006; Torkzadeh, Chang, &
Hansen, 2006; Chang, 2007).
Nearly 40% of the publications published between 1992 and 2002 fell into the category of IT/IS
adoption, following a study by Ngai 15 (2005). In addition, an increasing amount of research has
looked into the internal workings of the organisation, its personnel, and the human aspect of
CRM. Research on knowledge management and information exchange in businesses (Campbell,
2003; Lin, Su, & Chien, 2005; Fan & Ku, 2010) has made the case that efficient knowledge
management is a prerequisite for effective CRM (du Plessis & Boon, 2004).

CRM

Customer Customers
Satisfaction Loyalty

Company
Reputation