CONSUMER EXPERIENCE AND DESTINATION LOYALTY IN TOURIST SITES: CASE STUDY, ENUGU STATE

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CONSUMER EXPERIENCE AND DESTINATION LOYALTY IN TOURIST SITES: CASE STUDY, ENUGU STATE

CHAPTER ONE

INTRODUCTION

1.1 Background of the study

Tourism represents a key industry in the Nigerian economy. In 2004, Nigerian received more than 12 million tourists with tourism representing approximately 8% of the GDP. Tourism also plays an important role in the Nigerian employment marketplace since more than 10% the population is employed in tourism-related sectors. Rivers State in the south of Nigeria, belongs to the top 10 travel destinations with the local economy relying mostly on the tourism-related activities and oil.

Despite the exceptionally favourable conditions for tourism (quality beaches, warm climate, hospitable and friendly community and multiculturally-attuned), Rivers State has recently experienced some difficulty in maintaining its position as a preferred travel destination. Compared to 2004, the number of tourists entering Rivers State decreased by 0.8% with lodging demand decreasing by 4.8% (AHETA, 2005).

Although several external factors could be mentioned as passive reasons for this occurrence, the current condition of tourism in Rivers State is much the result of emerging new holiday destinations that offer lower prices and, in some cases, higher quality facilities (AHETA, 2005).

Even though the study of consumer loyalty has been pointed out in the marketing literature as one of the major driving forces in the new marketing era (Brodie et al., 1997), the analysis and exploration of this concept is relatively recent in tourism research. Some studies recognize that understanding which factors increase tourist loyalty is valuable information for tourism marketers and managers (Flavian et al., 2001). Many destinations rely strongly on repeat visitation because it is less expensive to retain repeat tourists than to attract new ones (Um et al., 2006). In addition, Baker and Crompton (2000) show that the strong link between consumer loyalty and profitability is a reality in the tourism industry.

The study of the influential factors of destination loyalty is not new to tourism research. Some studies show that the revisit intention is explained by the number of previous visits (Mazurki, 1989; Court and Lupton, 1997; Petrick et al., 2001). Besides destination familiarity, the overall satisfaction that tourists experience for a particular destination is also regarded as a predictor of the tourist’s intention to prefer the same destination again (Oh, 1999; Kozak and Rimmington, 2000; Bowen, 2001; Bigné and Andreu, 2004; Alexandros and Shabbar, 2005; Bigné et al., 2005). Other studies propose more comprehensive frameworks. Bigné et al. (2001) model return intentions to Spanish destinations through destination image, perceived quality and satisfaction as explanatory variables. Yoon and Uysal (2005) use tourist satisfaction as a moderator construct between motivations and tourist loyalty.

Recently, Um et al. (2006) propose a model based on revisiting intentions that establishes satisfaction as both a predictor of revisiting intentions and as a moderator variable between this construct and perceived attractiveness, perceived quality of service and perceived value for money.

1.1 Background of the Research

Oliver (1999, p. 34) has defined loyalty as „a deeply-held predisposition to repatronize a preferred brand or service consistently in the future, thereby causing repetitive same brand purchasing, despite situational influences and marketing efforts having the potential to cause switching behavior.‟ When a customer is loyal, he or she continues to buy the same brand, tends to buy more and is willing to recommend the brand to others (Hepworth and Mateus, 1994).

Loyalty has been measured in the following ways: (1) the behavioral approach, (2) the attitudinal approach, and (3) the composite approach (Jacoby and Chestnut, 1978). The behavioral perspective defines loyalty as actual consumption, as a sequence of purchase (Brown, 1952), as proportion of market share (Cunningham, 1956), as probability of purchase (Frank, 1962), as duration, as frequency and as intensity (Se-Hyuk, 1996; Brown, 1952). This behavioral approach was viewed as producing only static outcome of a dynamic process (Dick and Basu, 1994). In contrast, the attitudinal approach goes beyond overt behavior and expresses loyalty in terms of consumers‟ strength of affection toward a brand (Backman and Crompton, 1991a). Finally, composite measures of loyalty integrate both behavioral and attitudinal dimensions. Day (1969) argues that to be truly loyal, a consumer must both purchase the brand as well as have a positive attitude toward it. This composite approach has been used a number of times in leisure settings (Backman and Crompton, 1991b; Pritchad and Howard, 1997). While this composite measurement seems to be the most comprehensive, it is not necessarily the most practical. It has serious inherent limitations, simply because of the weighting applied to both behavioral and attitudinal components.

In this study, loyalty is defined as tourists‟ intention to revisit and their recommendations to others (Oppermann, 2000; Yoon and Uysal, 2005). This loyalty refers to committed behavior that is manifested by propensity to participate in a particular recreation service (Backman and Crompton, 1991a). This definition is supported by Jones and Sasser (1995) who argued that intent to repurchase is a very strong indicator of future behavior. Apart from using intent to revisit, many tourism researchers have used tourists‟ recommendation to others as a measure of attitudinal loyalty (Chen and Gursoy, 2001; Oppermann, 2000). This research focuses on attitudinal loyalty because the purchase of a tourism product is a rare purchase (Oppermann, 1999). It does not occur on a continuous basis but rather infrequently (Jago and Shaw, 1998). It can also be covert behavior as reflected in intention to revisit in the future (Jones and Sasser, 1995).

From SAS. Retrieved 2015-07-15. Customer experience (CX) is the product of an interaction between an organization and a customer over the duration of their relationship. This interaction includes a customer’s attraction, awareness, discovery, cultivation, advocacy and purchase and use of a service. It is measured by the individual’s experience during all points of contact against the individual’s expectations. Thompson, Ed and Kolsky, Estaban (2004), Gartner asserts the importance of managing the customer’s experience.

Verhoef, Peter C (2009) said that customer experience implies customer involvement at different levels – such as rational, emotional, sensorial, physical, and spiritual. Customers respond diversely to direct and indirect contact with a company.

In the consumer marketing community, customer loyalty has long been regarded as important goal (Reicheld and Schefter, 2000). Customer loyalty is critical for business to gain competitive advantage. Firstly, it is much less expensive to retain current visitors than it is to seek new ones (Reicheld and Sasser, 1990). Further, loyal customers are more likely to create a positive word-of-mouth advertising at no extra cost to the service provider (Shoemaker and Lewis, 1999). Thirdly, it secures the relationship between customer and service provider, when the customer is faced with increasingly attractive competitive offers. Finally, loyal customers are more easily accessible than first-timers since organizations usually retain records, making targeted indirect marketing more feasible. This knowledge permits suppliers to precisely target the repeat segment and solicit direct responses to promotions (Reid and Reid, 1993).

1.2 Statement of Research Problem

In today’s dynamic and competitive global environment, planning and developing tourism attractions is only half the battle faced by destination managers considering the fact that so many destinations globally offer similar attractions, services and experiences. Destination managers also have to plan and strategize the marketing aspect of destination management. A well planned and developed tourism product and/or destination will be useless unless it attracts and retains its target market. Therefore, it is vital for managers to understand what makes customers loyal to a destination and what their expectations are so that destinations can modify their offerings, service delivery and communication strategies to meet and exceed customers’ expectations.

1. Consumer’s expectations and quality of service are not meet with.

2. The cost of service and the quality of service are not relative to each other.

3. Consumers complain that they are not welcomed as a result of lack of communication between service providers and consumers.

1.3 Objectives of the Study

As previously mentioned, both marketing scholars and practitioners need to identify and assess the relative impact of competitiveness factors and destination equity on the loyalty of tourists. In doing so, the destination marketers can properly develop strategy and manage resources efficiently. Therefore, the objectives of this research are three fold;

1. To assess the relative impact of destination equity on the loyalty of tourists and

2. To differentiate those results between the domestic tourists and the international tourists.

3. To evaluate consumers experience and irrigate tourist site.

4. To express the degree of relationship between the two variables, (consumers experience and destination loyalty).

1.4 Scope of the Study

Regression and correlation are common methods of analyzing data to provide useful information in making decision. The project covers a period of 10 years (2005-2015) thus predictions shall be made on the bases of the accuracy of the analyzed data.

There are many numerical variables to be considered in in this research work such as the income and expenditure of Rivers State on tourist destination (tourist center) on which this project work is based.

1.5 Research Hypothesis

Hypotheses are some finding which are yet to be proved. In statistics, when data are collected the purpose is to find a reasonable criterion for deciding on a proper line of action, whether the assumption is to be accepted or rejected.

Hypothesis one

H0.There is no linear regression between consumers experience and destination loyalty.

H1.There islinear regression between consumers experience and destination loyalty.

Hypothesis Two

H0.There is no association between consumers experience and destination loyalty.

H1. There exists an association between consumers experience and destination loyalty.

In order to make this decision significant, test are carried out on the hypothesis, insignificant is called the null hypothesis denoted by Ho and the assumption made against the null hypothesis is the alternative hypothesis denoted by H1.

To test hypothesis on regression coefficient,

T – statistics is applicable and it is given as:

Tcal = with n-2 d.f

1.6 Limitation of study

During the course of performing/researching this project work, the researcher encountered a lot of challenges as well as opposition which ranges from financial constraints, time factor. This factors in their own ways, slowed down the speedy progress of this work that resulted to the researcher not being able to finish the research work on time as is required

Also, within the area of study the researcher was faced with some other forms of constrains that contributed to the limitation of this researcher work, like accessibility to data, information and facts concerning the present study due to some reasons or the other, some not willing to give out information that it is to be within the workers.

1.7 Definition of Terms

i. Hypothesis: This is a statistical statement which can be true or false and whose validity can be tested. It is a statement about a population which we want to verify on the basis of the information available from a sample.

ii. Null Hypothesis: It is the hypothesis we have set for the purpose of rejection and it is denoted by Ho.

iii. Alternative Hypothesis: It is the hypothesis that has being set for the purpose of acceptance and it is denoted by Hi.

iv. Variable: This is the observable outcome of the data collected on certain phenomenon of interest through various methods.

v. Independent Variable: This is a variable that can be controlled or manipulated by a researcher in order to determine its relationship with the observed state of things.

vi. Dependent Variable: This is a variable that is observed as outcome of an experiment. It changes according to the changes or manipulation made on the input (independent variable).

vii. Free Hand Method: It is a procedure that try to draw a line that passes through or close to as many points as possible on the scattered diagram.

viii. Rank Correlation: Instead of using precise value or when such precision is unavailable, the data can be ranked in order of size, importance e.t.c.

ix. Co-Efficient of Determination: It is another significant method to determine the degree of relationship that exists between two variables. It indicates the proportion of changes in value of independent variable Y that can be predicted from change in the value of independent variable ‘X’.

x Confidence Internal: This is the interval or region within which an hypothetical value must lie before it can be accepted as a member of the population.

xi. Analysis Of Variance (ANOVA): This is a technique where by total variation present in a set of data are partitioned into several components.

xii. An Estimate: This is the value which as estimator takes for a particular sample.

xiii. Positive Correlation: This is a situation when there is simultaneous increase in the value of Y as X increases

xiv. Negative Correlation: This is a situation when increase or decrease in one variable brings about a change in the value of the other variable.

xv. Zero Correlation: This is a situation when increase or decrease in one variable brings about no change in the value of the other variable.

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