CHAPTER NO 1

INTRODUCTION

1. Introduction
Customer Relationship Management is a strategy which is up to date domination of relationship
with consumers gains today it means a necessary component in the functioning of enterprises in
the global market.
Customer Relationship Management is not a new idea in the business world because it comes to
its mature phase and such is adopted and become a well-known trend of modern marketing and
business philosophy.
Although we can say and also verify that the Customer Relationship Management is a business
philosophy, the fact is that development, strategy, methodology and the evolution of Customer
Relationship Management is based on information technology. Development of Customer
Relationship Management is directly linked with the development of new technologies.

1.1Background of the study

Customers of all business are considered as a very attractive source of profitability, business firm
lays dawn important initiatives for the sake of development and growth assisted by improved
approaches to access customers as possible. They represent the market share and indicate the

market growth if the customers are growing continuously. Therefore if business firm wants to
earn profits and achieve a distinctive image in the market they are supposed to raise customers in
form of attracting new ones and retaining the old ones with the help of mutually applicable
offerings and support services. Marketers are developing such kinds of approaches from time to
time they offer value added services, discount services, quality products, targeting customer on
the basis of their cultural context and try to develop long lasting relationship. They are using
different techniques to reach the desired customers with fully supporting and effective manners
for the ultimate aims of the firms
There are different approaches used to target and serve with dignity the targeted customers; one
of the effective technique for raising customers from diversified classes and retaining the old
ones by giving them opportunities them to fulfill their needs up to the maximum extent that is
customer relationship management.
Pakistani markets are faced with uncertainties and barriers in different areas all around the
country among them the most recognizable are the uncertain economic conditions, inflation, law
in order, terrorism and lack of education raise extremism. Therefore the research study is
intended to investigate the role of Customer Relationship Management for the attraction of new
customers and retention of old for the betterment of the tourism industry position and customer
support services in Tourism Industry of Pakistan. With rapidly increasing worldwide
competition, now a day every company itself witness higher customer turnover, and focuses on
customer because ultimate decision is only in the hands of final customer.

Over a few decades, world has witnessed (observed) a phenomenal growth in Tourism Industry.
Development of tourism industry first time gives a large portion for companies to invest their
capital in tourism sector.
Tourism historically has been operating in a relatively stable environment for decades. But the
industry is facing tough time and tourism sector has lost a substantial proportion of business.
CRM is growing trend in tourism sector today, Tourism sector invests too much on CRM for
survival and gains a large portion of market.
There is a lot of definitions of CRM which mentioned in literature Review. In these study
researchers, they made an attempt (effort) to implement (put into practice) CRM in tourism
industry of Pakistan
Companies which are focus on tourism sector, can generate huge volume of profit and business,
but only to focus on business and profit is not so important. The most reasonable thing is to
maintain this huge volume for customer satisfaction and increase profitability of the business.
This needs a strategy which can help Tourism Industry in maintaining long term valuable
relations with their customers and offer them life time value like CRM.
Pakistan has the world of oldest civilizations such as mountain beauty and fabulous seasonal
variety, they have vast tourist potential. The Pakistan, which is full of religious places which
spread throughout the country, makes Pakistan attractive place for variety of people and
religions.
From geographic point of view Pakistan has bundle of Tourism Assets such as Coastal zone
which spread over one thousand kilometers along the Arabian sea which offer long term

development for beach resorts, diversified (expanded) natural deserts in the south and beautiful
hill stations which are located in north.
Pakistan has also potential for tourism sport s like mountain climbing and trekking. In Pakistan
PTDC is operating vigorously for tourism sector in Pakistan.

1.2Statement of Problem
Tourism Industry in Pakistan has deep stumbling blocks to attract tourists from any segment.
Such as Political instability, terrorism, lack of customer relationship. Pakistan as a developing
country needs a greater share portion of tourism industry just like other Asian countries. The
marketing literature review has extensively discussed the role of Customer Relationship
Management in the Performance of an organization. In order to look at the performance of the
Tourist Industry performance, this study aims to investigate the effects of CRM practices in the
Tourist loyalty with a mediating effect of Perceived Value of tourist of Pakistan.

Objective of the Study

This study aims to investigate the affects of CRM practices in tourism industry of Pakistan.
Specifically this study has the following objectives
1. To find out the effect on CRM practices i.e ( Tourist Satisfaction, Destination
Image, Tourist Experience and Tourist Expectation on Tourist Loyalty with the
inclusion of mediator i.e Perceived Value.
2. To find out the relationship between CRM practices i.e. ( Tourist Satisfaction,
Destination Image, Tourist Experience and Tourist Expectation, Tourist Loyalty
and Perceived value.

1.4Outline of the Study

This study is divided into five chapters. By now , the contents of the first chapter is already
presented and familiar to the reader , consequently; only the content of the following chapters
will briefly be discussed below.
The second chapter provides the reader with an overview of the literature, connecting to the three
main research questions of the study. Chapter no 3 describes and motivates the research
methodology used in this study. Chapter four comprises investigation of the observed data.
Finally chapter no five includes the whole conclusion that can be drawn from the research
observations will be given in relation to the three research questions and the chapter finishes
with implementation for additional research.