“A communities have enabled customers to address low-level

“A
STUDY ON THE IMPACT OF ONLINE CONSUMER COMMUNITIES IN HOTEL INDUSTRY”

Prof. Avinash. B.M                                         Mr.
Sanju Dama

Assistant Professor                                         Post
Graduate

            Ramaiah Institute of Management                 Ramaiah Institute of Management

Bangalore 560054                                           Bangalore
560054

[email protected]                                        [email protected]

9448162035                                                    8296868539

 

ABSTRACT

 

This
paper empirically examines the role of online consumer communities in
influencing a customer buying behavior with reference to hotel bookings. Consumers find it difficult to choose best hotels due to
no prior experience. Hence, they depend upon the reviews and ratings given by
consumers online who have already been there i.e. through consumer communities.
Customers have turned to online communities because they offer more real-time
means to engage with a company, as opposed to more traditional communication
channels such as the phone or email.

Customer communities have provided a low-cost alternative
to using contact centers kind of customer support interactions. These
communities have enabled customers to address low-level service issues on their
own, through what is known as customer self-service or by engaging with peers
and experts. Communities are a vital element of the social business, enriching
the customer experience and enabling co-creation of customer value. Smart
businesses understand the benefits of tapping into the collective intelligence
of their customers.

The methodology used is exploratory and the sampling
technique used is convenience sampling. A standardized questionnaire was
developed and data is collected from 100 respondents directly who gave their
opinions in which majority of them agree that consumer communities influence
their buying behavior.  

 

Key words: consumer communities, exploratory, convenience sampling.

 

 

I.                  
Introduction

Online customer communities are Web-based gathering places for
customers, experts, partners and others to discuss problems, post reviews,
brainstorm new product ideas, and engage with one another about a company’s
products, services and brand. Hotel Consumers find it difficult to choose best
hotels due to no prior experience. Hence, they depend upon the reviews and
ratings given by consumers online who have already been there i.e. through
consumer communities.

Customers have turned to online communities because they offer more
real-time means to engage with a company, as opposed to more traditional
communication channels such as the phone or email. Customers in some cases also
prefer the anonymity of these online communities, where they can gripe about
poor customer service without having their opinions attached to their customer
information.

Online communities are growing in popularity as companies increasingly
rely on them for social customer support and service, marketing, sales, and
product development. Communities are a vital element of the social business,
enriching the customer experience and enabling co-creation of customer value.

From faster innovation to increased customer loyalty
to the ability to leverage brands with better marketing, a consumer community
is at the heart of an effective growth strategy. In the last decade, online
communities have taken the business world by storm. The online community market
is now approaching $1 billion in value, and it is a space that is projected to
continue to grow.

 

II.               
Literature
Review

 

Researchers attempted
to study the factors that influence the buying behavior of a consumer while
purchasing online as now a days customers are convenient shopping online rather
than going to offline store. They also made an effort to find evidence as to
why the users continue to use a particular site online and reasons that led
them to the website.

 

 

 

 

Consumer
Power: Evolution in the Digital Age

The journal
Consumer Power: Evolution in Digital Age, by Lauren I. Labrecque, Jonas vor dem
Esche, Charla Mathwick, Thomas P. Novak Charles F. Hofacker, 2013 aims to
explore the intersection of consumer behavior and digital media by clearly
defining consumer power and empowerment in Internet and social media contexts.
It aimed to examine the intersection between digital media and consumer
behavior, specific to consumer empowerment. The research methodology used for
the research was Exploratory

The major findings
were that there are four sources of consumer power (Demand, Information,
Network, and Crowd) and the Internet’s ability to empower consumers through
increased information access, choice, and options to impose market sanctions
through voice and exit.

 

Online
communities: A systematic review of factors contributing to sustainability

The journal online
communities: A systematic review of factors contributing to sustainability, by
John Cokley, Carolina Ferreira Siqueira, 2002 explains that online communities
are being used to complement or replace face-to-face interactions, especially
between widely distributed individuals. It also explores the theoretical and
practical factors that contribute to the sustainability of such communities.
The methodology used for research is Qualitative approach and case studies.

The major findings
were that the research explores the theoretical and practical factors that
enhance the sustainability of online communities. And also the stages of
community development (Potential, Coalescing, Maturing, Stewardship,
Transformation)

 

Motivations
to Participate in Online Communities

The journal
Motivations to Participate in Online Communities, by Cliff Lampe, Rick Wash,
Alcides Velasquez, Elif Ozkaya, 2010 examines the case users from the
theoretical perspectives of Uses and Gratifications and Organizational
Commitment to compare individual versus organizational motivations in user
participation. In addition, to find evidence that users may continue to
participate in a site for different reasons than those that led them to the
site. The methodology used for research is Exploratory and Interviews.

The major findings
were that both social and cognitive factors seem to be more important than
issues of usability in predicting contribution to the site. In addition,
feelings of belonging to a site are important for both anonymous and registered
users across different types of uses.

Loyalty
in Online Communities

The journal
Loyalty in Online Communities, by William L. Hamilton, Justine Zhang, Cristian
Danescu-Niculescu-Mizil, Dan Jurafsky, Jure Leskovec, 2017 aims to find out how
loyalty is manifested in user behavior, or whether certain community
characteristics encourage loyalty. In addition, provide a thorough
characterization of user loyalty in the multi-community platform. The
methodology used for the research was Exploratory and survey.

The major findings
were that the study was able to reveal how loyalty is being reflected in the
structural properties of user-user interactions. Also found consistent
behavioral differences between loyal and vagrant users, in terms of both
content they generate and the content they engage.

 

Internet
community forums: an untapped resource for consumer marketers

The journal
Internet community forums: an untapped resource for consumer marketers, by
Dennis A. Pitta and Danielle Fowler, 2005 aims to explore an emerging area in
internet practice that has implication for consumer marketers. The methodology
used for research IS Descriptive research and case studies.

The major findings
were the community forums provide information and action approaches to consumer
marketers that may increase the success, providing want-satisfying market
offerings. It also provides a series of tactics that consumer marketers may use
to maximize the value of internet community forums for their firms.

 

 

 

 

 

 

 

 

 

 

 

 

 

III.            
Statement
of the problem

Consumer communities are Web-based
gathering places for customers, experts, partners and others to discuss
problems, post reviews, brainstorm new product ideas, and engage with one
another about a company’s products, services and brand.

Hotel Consumers find it difficult to
choose best hotels due to no prior experience. Hence, they depend upon the
reviews and ratings given by consumers online who have already been there i.e.
through consumer communities.

“The study focuses on the role of consumer
communities in influencing the consumer buying behavior with reference to Hotel
industry”.

 

IV.            
Objectives
of the study

The objectives of
this study are

·        
To enlist the sources of information that
customers look before booking a hotel room.

·        
To identify the challenges faced by
customers in booking hotels

·        
To identify role and impact of consumer
communities in influencing consumer buying decision.

 

V.               
Research Gap

The research found out that there is
requirement for further study on a wider variety of platforms and required to
understand the extent to which our results generalize beyond single site. They have
a significant application in consumer marketing, but not been tested empirically,
Valuation of new products and the identification of emerging consumer wants.
The online communities are likely to lack theoretical foundations, which are
important and that consumer power through digital media is in its infancy; many
aspects are not understood well.

 

VI.            
Scope Of The Study

The
study is conducted on Hotel industry, the place where research is done is all
over India as hotel bookings can be done from any part of the country, and the
duration of the study is for 3 months i.e. from October 2017 – December 2017.

VII.         
Hypothesis

The following
hypothesis is been made.

H0: Consumer communities doesn’t plays a significant
role in influencing consumer buying decision in hotel industry

H1: Consumer communities plays a significant role in
influencing consumer-buying decision in hotel industry.

 

Hypothesis
testing is carried out with a significance level of 0.05

 

VIII.       Research Methodology

·        
Research type – Exploratory

·        
Sampling technique – Non probability
sampling

                                             
Convenience Sampling

·        
Sample size – 100

 

·        
Sources of data – Primary data

                                        
Secondary data

·        
Tools of data collection – Questionnaires

 

IX.            
Plan
of analysis

·        
Spss, Excel.

·        
Testing tool Chi square.

 

X.               
Limitations

·        
Duration of the research is less i.e. 3
months

·        
Research is done only on Hotel industry

 

 

 

 

XI.            
Data
Analysis                   

1.     
Chart
shows influence of price on customer decision making

 

Interpretation:

From
the survey, we can understand that majority of respondents who participated in
the survey consider price to great extent as they want to get to get the best
service at a lower price.

 

2.     
 Chart shows influence of security on customer
decision making

 

Interpretation:

From
the survey, we can understand that majority of respondents who participated in
the survey considers security of online transactions to greater extent as their
personal information is being uploaded and it may be misused.

3.     
 Chart shows influence of quality of
information on customer decision making

 

Interpretation:

From
the survey, we can understand that majority of respondents who participated in
the survey considers quality of information to greater extent as information
obtained from online should have quality and authenticity in it.

4.     
Chart
shows how the respondent books the hotel online

Interpretation:

From
the survey we can understand that majority of respondents who participated in
the survey prefer to book hotel online through the third party websites like
make my trip, clear trip as they offer more discounts.

 

XII.         
Hypothesis
Testing

 

Case Processing Summary

 

Cases

Valid

Missing

Total

N

Percent

N

Percent

N

Percent

Which community the respondent refers to most * Opinion written influence
the decision making

100

100.0%

0

0.0%

100

100.0%

 

 

Which community the respondent refers to most * Opinion written
influence the decision making Cross tabulation

Count 

 

Opinion written influence the decision making

Total

Strongly agree

Agree

Neutral

Disagree

Which community the respondent refers to most

Trip advisor

50

0

0

0

50

Holiday IQ

10

8

0

0

18

Price line

0

7

3

2

12

Others

0

5

12

3

20

Total

60

20

15

5

100

 

 

 

 

 

 

 

Chi-Square Tests

 

Value

df

Asymptotic Significance (2-sided)

Pearson Chi-Square

105.704a

9

.001

Likelihood Ratio

127.281

9

.037

Linear-by-Linear Association

75.976

1

.616

N of Valid Cases

100

 

 

 

Interpretation –

Since calculated p value, 0.001 is less than
significant value 0.05 we reject the null hypothesis and accept the alternate
hypothesis, as consumer communities play a significant role in influencing
consumer buying behavior.

XIII.       Findings

Ø  Majority
of respondents who participated in the survey prefer to book hotel online
through the third party websites like make my trip, clear trip as they offer
more discounts.

Ø 
Majority of respondents who participated
in the survey book hotel 2 – 3 times a year, as they prefer to take a break
from their regular works and spend time for themselves or with families.

Ø  Majority
of respondents who participated in the survey prefer to book budget hotels as
most of them travel with families, friends and want to spend more on enjoyment
rather than on booking hotels.

Ø  Majority
of respondents who participated in the survey look into hotel websites as major
source of information as they can find more relevant and authenticate
information.

Ø  Majority
of respondents who participated in the survey face the challenge of security
threat as while booking online there is possibility of your personal
information being revealed and may be misused.

 

XIV.       
Conclusion

From the above
research, we can conclude that majority of respondents prefer to book hotel
online through the third party websites as they give more offers than the
others. They also travel 2 – 3 times a year to spend some quality time with
their families and prefer hotels, which offer them more price discounts and are
in their budget ranges. Most of them prefer to look into Trip advisor to get
better information about any hotel as they provide more authentic information
than any other website. The major challenge faced by anyone booking hotel
online is security threat as others can misuse their personal information and
cause problems to them. Most of them are satisfied with their experience
booking hotels online, as it is more convenient than any other way of booking
hotels.

 

 

 

 

 

 

 

XV.          
Recommendations

Ø  Customers
should look into more authorized information before making any purchases online
due to increase in cyber thefts and hackings taking place in the recent times.

Ø  Customers
should provide the reviews without any bias as it helps others to make a
decision regarding the bookings online.

Ø  The
companies should provide more authenticated information to the consumers and
make them to feel more convenient booking online.

Ø  Companies
should address any issues raised by the customers within short duration thereby
gaining the trust of them.

 

References

Ø  Haiyi
Zhu, Jilin Chen, Tara Matthews, Aditya Pal, Hernan Badenes, Robert Kraut, “An
Ecological View of the Success of Online Communities”, March 2014.

 

Ø  William
L. Hamilton, Justine Zhang, Cristian Danescu-Niculescu-Mizil, Dan Jurafsky,
Jure Leskovec, “Loyalty in Online
Communities”, February 2017.

 

Ø  Hong
lei Li, “Virtual Community Studies: A
Literature Review, Synthesis and Research Agenda”, 2004.

 

Ø  Michael Muller, Kate Ehrlich, Tara Matthews,
Adam Perer, Inbal Ronen, and Ido Guy, “Online
Communities: Collaborating, Teaming, and Innovating through Social Media”,
2012.

 

Ø  www.ibef.org/industry/tourism-hospitality-India.aspx. 

 

Ø  www.ibef.org/industry/indian-tourism-and-hospitality-industry-analysis-presentation.

 

Ø  http://businessworld.in/article/Hospitality-Industry-In-India-A-Big-Contributor-To-Economy-s-Growth-/16-05-2017-118291.

 

Ø  http://www.indianmirror.com/Indian-industries/hotel.html.