Chapter 1INTRODUCTIONThis chapter briefly discussed the study’s background

Chapter 1INTRODUCTIONThis chapter briefly discussed the study’s background, next are the problem statement, research questions, research objectives, scope and limitation, and also significant of the study.

1.1 Background of StudyIn recently, the tourism industry in whole the world is growing rapidly. Travel ; Tourism become a popular trend among the people nowadays. Tourism was described as an action or movement which made by human being, as looking at the important on the root of ‘tour’. It is well known as travel for entertainment, vacation or business purpose (Rashid, Jaafar, ; Dahalan, 2013). Tourism could support programmes to be implemented with immediate effect because it is considered as one of the immediate priority industries, and it generally provides physical and strong trading opportunities regardless of their level of development for all nations (Kushi ; Caca, 2010).
Tourism is a trend which has marked the sector for many years, in fact, the growth of tourism was stronger in emerging economies which increase for 4.3% as compared to advanced economies which increased 3.7%, in 2012. The growth of tourism can be viewed by region, Asia and the Pacific which increased 7% was the best performer (UNWTO, 2013). According to UNWTO (2017), international tourist arrivals reached 1.2 billion as it grew for the seventh consecutive year an order of uninterrupted growth not recorded since the 1960s. Africa and Asia and the Pacific regions were recorded as the strongest growth. In fact, the International tourist arrivals continuously grew and reached 1235 million.

The tourism industry has a huge impact on economic development and performances for all the nations. The World Travel ;Tourism Council (WTTC) has affirmed that Travel ; Tourism had a direct contribution to GDP by USD2, 229.8bn in 2015 which is represented for 3.0% of total GDP. Then, the forecast for 2016 aims to increase up to 3.3% which means USD2, 304.0bn, the tourism industries such as hotels, travel consultant, airlines company and other passenger transportation services which generate economic activities was primarily reflected in their Travel and Tourism: Economic Impact 2016 World Report (Turner, 2016).

Malaysia is one of the countries in Asia –Pacific and belonged to the sub-region of Southeast Asia (Asian). Tourism Malaysia had growth as a good tourist attraction because the combination of the unique characteristics of natural resources and also multicultural with multi-ethnic in Malaysia has been reinforcing through tourism policies developed and executed by the Malaysia government with the purpose to develop competitive advantages for Malaysia tourism industry (Set, 2013). Tourism SMEs in Malaysia has various type of industry and business, to gain the competitive advantage, the brand management practices should be enhanced in the tourism industry as tourism industry majority focus on the services industry such as hotel and resorts, souvenir and agents, and other services provided. The research focus on the brand management in term of brand equity and customer satisfaction for accommodation services of Tourism SMEs in Malaysia. The emergence of brand equity has enlarged the significance of marketing tactics and provided an attention for managers and researchers (Shahroodi, Kaviani, ; Abasian, 2015).

Brand equity, a major marketing asset, creates competitive advantages and improves firms’ financial performance (Liu, Wong, Tseng, Chang, & Phau, 2017). According to Aaker (1991), Customer-based Brand Equity (CBBE) as a multidimensional concept, which is “a brand that link with a set of brand assets and liabilities, the value of its name and character that added or subtracted from the products or services of the firm provided or the value to that firms’ consumers.” Therefore, the research focus on finding the most influential of brand equity dimension towards customer satisfaction on Tourism SMEs for accommodation services in Melaka State, Malaysia.

1.2 Problem StatementTourism had experienced continuously growing and excavating ?diversification to turn into as one of the economic sectors in the world with experiences fastest growing. According to the United Nations World Tourism Organization (UNWTO) (2017), the capacity of business for tourism has the same quantity to or even exceeds the oil exports, ?food products or automobiles. Tourism has become as one of the major performers in international commerce. Meanwhile, it also represents as key income sources for many developing countries. This development goes hand in hand will result in an increasing variation and competition among destinations.

Previously conducted research showed that Malaysia tourism industry was covered by a high proportion of small businesses. Thus, it faces larger obstruction than other major industry. The management practices at the enterprise level, other internal and external factors will play a key role in the performance of TSMEs and affect the future development of the tourism industry. Therefore, it is crucial for focusing on investigating the important role of management practices adopted by TSMEs (Set, 2013). However, the management practices especially the brand management which related to brand equity and customer satisfaction towards Tourism SMEs in Malaysia is important to address because a detailed understanding of brand equity from the customer’s viewpoint is critical for efficacious brand management (Tong & Hawley, 2009).

From the previous research, we knew that many conducted researches were focused on the customer-based brand equity in many industries or different countries but the fact is lack of conducted researches that focus on customer-based brand equity for Tourism SME’s in Malaysia. The researcher Shahroodi, Kaviani, & Abasian, (2015) had shown that the physical quality in the services industry and the behavior of employees does not impact the satisfaction of the customers through the experience of the brand in food product retail industry in Mazandaran province, Iran. The researchers Chow, Ling, Yen, & Hwang, (2017) had stated that the research conducted was focused on Taiwan food factories in tourism and the questionnaires which regarding measure for brand equity only suitable for food factories for tourism, and worth to discuss the model of brand equity in other types of industries. According to Odoom, Narteh and Boateng (2017), there were lack of research underpinnings in branding research for SMEs. Therefore, a research has been chosen for carrying out with the purpose of indicating the importance of four dimensions of brand equity which are brand awareness, brand loyalty, perceived quality and brand associations on customer satisfaction of tourism SMEs’ in Malaysia.

1.3 Research Questions
1. What are the characteristics profiles of the customers of Tourism SMEs?
2. What factors influences the customer satisfaction level for tourism SMEs?
3. What are the most success factors in brand equity that influence the customer satisfaction level in Tourism SMEs?
1.4 Research Objectives1. To identify the characteristics profile of the customers of Tourism SMEs.

2. To examine the factors influence on customer satisfaction level for tourism SMEs.

3. To study the most success factors in brand equity that influence the customer satisfaction level in Tourism SMEs.

1.5 Research ScopeThis research discusses the influence of customer-based brand equity towards customer satisfaction for Tourism SMEs in Malaysia. The scope of the research would cover the accommodation services which belong to the Tourism Small and Medium Enterprise (TSMEs) in Melaka such as homestay, resort or hotels. Melaka is located in Southern Region in Malaysia The researcher choose Melaka as target respondents place only due to the Melaka is a historic city which attracted many tourist as one of the highest tourist arrivals recorded as 13.7 million tourists in 2012 (Teo, Khan, & Rahim, 2014). Besides, ADDIN CSL_CITATION { “citationItems” : { “id” : “ITEM-1”, “itemData” : { “abstract” : “Malacca tourist arrivals jump 12.7% for Jan-April”, “author” : { “dropping-particle” : “”, “family” : “Bernama”, “given” : “”, “non-dropping-particle” : “”, “parse-names” : false, “suffix” : “” } , “container-title” : “theSundaily”, “id” : “ITEM-1”, “issued” : { “date-parts” : “2017” }, “page” : “5-6”, “title” : “Malacca tourist arrivals jump 12.7% for Jan-April”, “type” : “article-newspaper” }, “uris” : “http://www.mendeley.com/documents/?uuid=0dbd0189-e288-47cc-8498-9702b77290e6” } , “mendeley” : { “formattedCitation” : “(Bernama, 2017)”, “manualFormatting” : “The Sun Daily (2017)”, “plainTextFormattedCitation” : “(Bernama, 2017)”, “previouslyFormattedCitation” : “(Bernama, 2017)” }, “properties” : { “noteIndex” : 0 }, “schema” : “https://github.com/citation-style-language/schema/raw/master/csl-citation.json” }The Sun Daily (2017) had indicated that Melaka had attracted 5.38 million tourists in the Jan until April of 2017, It also indicated that domestic tourists being the largest contributor with 3.69 million and foreign tourists with 1.69 million people in the first four months of the year 2017. Besides, in the report of The British Post, Melaka also was listed in the fifth spot in “The Word’s Trendiest Holiday Destinations”.

The drive of this research was to find out the most influences elements or factors based on customer-based brand equity towards customer satisfaction for tourism SMEs accommodation services in Melaka State, Malaysia. Therefore, the characteristics profile of customers was crucial to use for investigating the view of customers. The survey questionnaires would be distributed to the customers of accommodation services in Tourism SMEs Melaka, the observation would be used.

1.6 Significant of the StudyThe significance of the research was an attempt to explore the relationship between customer-based brand equity and customer satisfaction for Tourism SMEs in Melaka, Malaysia and explore how the customer-based brand equity affects the customer satisfaction and identified the most influential customer-based brand equity elements towards customer satisfaction for tourism SMEs. This research would determine the availability of research question answers the research objective based on the concept developed and variables chosen by the researcher. Research method would support the theories and solved the problem statement by collecting data and information. The researcher gained the valuable knowledge and experiences on doing research and apply this kind of the knowledge in the real-life environment.

The point of view of the customer’s aspect is crucial for the organization management in term of decision making, strategies developed and also brand management. This research was mainly focused on identifying the factors affecting customer satisfaction by using the concept of customer-based brand equity from the customers’ perception in order to help the SMEs in Malaysia much understanding about the brand equity. This research help the readers to understand the influence of customer-based brand equity on Tourism SMEs, especially in Malaysia.
This research contributed the Tourism SMEs in Malaysia understand the importance of the brand management in terms of the brand equity as well as customer point of view and customer satisfaction. Brand management can help the enterprise or organization improve their business performance and also increase the reputation as well as generate more profit.
1.7 SummaryTourism can be defined as activities made by humans including travel and recreation or business activities. Small and Medium Enterprises (SMEs) now is not only covered in manufacturing sectors but also covered in Tourism. The tourism brings the significant benefit to the economy of countries, and the SMEs grow rapidly. To increase the capability of management for enterprise, the management skills and branding aspect should be considered. This chapter introduced the conceptualization of customer-based brand equity in Tourism SMEs. This chapter covered the background of the study, problem statement, research question and research objectives, scope and also significant of the study. The next chapter would cover the literature review for the definition of Tourism SMEs, customer-based brand equity as independent variables and also customer satisfaction as dependent variables.