Research Outline And Justification

Chapter 1


Chapter Outline:-

The purpose of this first chapter is to provide an outline and justification of this research. It also illustrates the research aim and methodology used in the study. At the end of the chapter a diagrammatic representation of the structure of the dissertation is given.

Research Outline and Justification:-

One of the main contemporary challenges of organizations in service industries is providing and maintaining customer satisfaction. Service quality and customer satisfaction have increasingly been known as key factor in the battle for spirited differentiation and customer preservation. Lam and Zhang (1999) claim that awesome customer demand for quality products and service have in recent years become increasingly evident to professional in the hotel industry. Among every customer demands, service quality has been more and more accepted as a important factor in the victory of any business (Grnroos, 1990; Parasuraman et al., 1988).

The purpose of this study is to observe hotel guest comment cards (GCCs) and customer satisfaction management schemes in London hotels. This study adopts the useful content analysis approach which Gilbert and Horsnell (1998) used in their study, utilize evaluation and recording of findings based on a set of best practice criteria.

The result of this study offer hotel professionals with an appraisal of current methods of measuring and monitoring customer satisfaction in London hotels.

During the past few years, customer satisfaction and service quality have become a main part of attention to practitioners and educational researchers. Both concepts have powerful impact on business performance and customer behaviour. Service quality lead to superior profitability (Gundersen et al., 1996) and customer satisfaction (Oliver, 1997). In addition, a number of experimental study specify a positive relationship between customer satisfaction and customer loyalty (Kandampully and Suhartanto, 2000; Dimitriades, 2006; Chi and Qu, 2008; Faullant et al., 2008), as well as among customer satisfaction and positive word-of-mouth (Sderlund, 1998). Therefore, one of the key strategy for customer-focused firms is to measure and monitor service quality and customer satisfaction. Several methods are available for measuring customer satisfaction. In hotels, one of the most popular is a guest comment card (GCC). GCCs encompass the advantages of small size, easy distribution and ease. While analyzing information gathered in such a way, managers are capable of get information about the attribute that have an impact on guests' satisfaction.

Research Aim:-

The aim of this dissertation is to gain a better understanding of the service quality dimensions that affect customer satisfaction from customer prospective. In this literature part we will study several theories related to service quality and satisfaction in order to gain a clear idea about the specific area. Quality is about passion, pride, care, people, consistency, eye contact and reaction.

How can customer satisfaction be measured and monitored?

How effectively is customer satisfaction measured and monitored in fast food industry?

Research Methodology:-

To explore the above research questions an exploratory approach utilising qualitative research method was adopted. In order to collect data the case study research strategy was used. The data are collected by means of direct observation and content analysis of transactional luxury brands websites. Based on judgements the luxury brands are selected for this observation.

The Structure of the Dissertation:-

This dissertation is divided into six chapters as shown in the figure 1.1. After this chapter the next chapter introduces the concept of Quality, Customer Satisfaction and Service Quality and Quality Management System. The third chapter presents the literature review on the importance of customer satisfaction and Service Quality and Content Analysis. The fourth chapter discusses the methodology used in this thesis. The fifth chapter presents the results. The sixth chapter draws the conclusion and provide guide for future research.

Chapter 2

Definition of Quality, Customer Satisfaction and Service Quality and Quality Management System


Quality is a very important part of life today. It is important to effectively competing in business, both manufacturing and service. It plays an important role in assuring the safety of consumers. It is commonly known that the only appropriate goal in the quality function of the organization is continuous improvement (Juran, 1988).

There are several views of product quality. One is based on product features, another is based on freedom from deficiencies, and a third is based on categories. According to the product features, a luxury hotel has a higher level of quality than that of a limited-service hotel. Freedom from deficiencies is another way of viewing quality. According to this view, a limited-service hotel and a luxury hotel could both be quality products if the product they of-fered was free of deficiencies. A third view divides quality into three categories are technical quality, functional quality and societal quality (koter, Bowen, Makens, 2006).

Customer Satisfaction

The unique service quality theories are that customers are satisfied when their judgement of the service they have received equals or exceeds what they expected.

Customer satisfaction (CS) = Perceptions (P) = Expectations (E)

This is known as the gap analysis theory (zeithaml et al., 1990).

The oliver's theory has three potential satisfaction levels. These are Negative disconfirmation, Positive disconfirmation and simple confirmation.

There are several researchers who have (Oliver, 1981, Patterson and Walker, 2001) conceptualize customer satisfaction as an individual's feeling of pleasure or disappointment resulting from comparing a product's perceived performance (or outcome) in relation to his or her expectations. Generally, there are two general conceptualisations of satisfaction, namely, transaction-specific satisfaction and cumulative satisfaction (Boulding et al., 1993; Jones and Suh, 2000; Yi and La, 2004). Crompton and Mackay (1989) submitted the premise that satisfaction and service quality is not the same thing, stating ‘satisfaction is a psychological outcome emerging from an experience, where service quality is concerned by attributes of the service itself. Transaction-specific satisfaction is a customer's assessment of his or her experience and reaction towards particular service encounter (Cronin and Taylor, 1992; Boshoff and Gray, 2004), and growing satisfaction refers to the customer's overall evaluation of the spending experience towards day by day(Johnson, Anderson and Fornell, 1995).

Customer satisfaction is impinge leading by every aspect of the service delivery processes (encounter with staff, real elements, time it take the service to be delivered and whether or not it has been delivered properly) as well as the outcomes of the experience (Williams and Buswell, 2003). Growing of service organization all over the world can be readily observed and tourism and hospitality organizations are bounded by the most creative (e.g. theme parks, hotels, aquariums, fast-food outlets). Segal-Horn (1994) suggested that there is some foundation to this debate, hence the success of companies like McDonald's. Another problem of transnational operations, highlighted by Varva (1998), is one of translating centrally produced questionnaires. Satisfaction can be to a lesser or greater degree, from ‘adequate' through ‘desired' to ‘delight' (exceeding). Between ‘desired' and ‘adequate', parasuraman (1995). If customers perceive that the activity has a ‘high risk' (e.g. white water rafting) their zone of tolerance will be very narrow. (Williams and Buswell, 2003)

Service Quality

Service quality has been defined as meeting customer expectations Parasuraman et al. (1985). Parasuraman, et al. (1988:17) defines expectations ‘as desires or wants of consumers, i.e., what they experience, a service provider have to present rather than would offer." According to Zeithaml and Bitner (2003), customer expectations are the standard parameters for performance against which service experience are evaluated. Zeithaml et al. (1990: 20) argue that there are many factors which influence customer expectations namely word-of-mouth, personal needs of the customers and the latter's own past experiences. A customer with frequent experience with hotel services would be more likely to demand more of similar firms. Furthermore, external communication such as television, advertising and price helps to form expectations of customers (Zeithaml et al., 1990: 20).

Services quality is more difficult to measure than product quality due to the characteristics of intangibility, inseparability, variability and perishability (Parasuraman et al., 1985). A service is intangible and takes the form of experiences or performances (Zeithaml et al., 1985) as it is something that cannot be touched, evaluated or seen. Greater emphasis is placed on personal information sources and the customers use price as a determinant to evaluate service quality (Palmer, 1998) as the product is incorporeal. Hence, managers of hotel firms need to lessen this service complexity by enhancing tangibles cues and focus on the level of service quality delivered. Another characteristic of services is inseparability where the customer must come to the service provider to consume the service. Therefore, the customer assists not only in the delivery process but also in the production process (Eiglier and Langeard, 1987; Zeithaml et al. 1990). These interactions between the service provider and the consumer are referred to as service encounters (Shostack, 1985) in the marketing literature. They represent moments of truths (Carlzon, 1987; Albrecht, 1988; Bitner et al., 1990) where the organization can truly show what it can do and how it can meet expectations of customers. In order to reduce service failures and downfalls (Kotler et al., 1996; Palmer, 1998; Kasper et al., 1999), organizations must effectively manage these service encounters. Moreover, the characteristic of heterogeneity reflects the potential for high variability in service delivery (Zeithaml et al., 1985). This is a particular problem for service firms as the service performance is delivered by different people and the performance of people can vary from day to day (Rathmell, 1966; Carman and Langeard, 1980; Zeithaml et al., 1985; Onkvisit and Shaw, 1991). As such, service quality depends on the efficiency and effectiveness of the employees involved in service delivery.

Various methods have been used to assess service quality; however, the most widely used tool is the SERVQUAL instrument developed by Parasuraman et al. (1991). Several numbers of researchers have applied the SERVQUAL model to measure service quality in the Tourism and Hospitality industry, with modified constructs to suit specific hospitality industry situations (Saleh and Ryan, 1992; Bojanic and Rosen, 1993; Getty and Thompson, 1994; Lam and Zhang, 1998; Tsang and Qu, 2000). The SERVQUAL model is based on five dimensions of service quality: tangibles, reliability, responsiveness, assurance, empathy which are assessed using 22 statements. The level of service quality is evaluated by comparing the expected service and the perceived service. Parasuraman et al. (1988) contend that a customer will perceive that there is service quality only when the service provider meets or exceeds his/her expectations. For Ryan (1999), SERVQUAL is a simple tool for tourism managers to determine the areas of weakness in their service delivery. In a study performed in hotels, Gabbie and O'Neill (1997) found that the highest expectations of customers were related to the dimensions of reliability and assurance, while the customers did not have high expectations of the dimensions of tangibility and empathy. Fick and Ritchie (1991) have also used the SERVQUAL Instrument in three major tourism sectors; airline, restaurant and ski area service. They found that the two most important dimensions for expectations concerned reliability and assurance for all three sectors studied.

Quality Management System

An organisation will benefit from establishing an effective quality management system (QMS). The cornerstone of a quality organisation is the concept of the customer and supplier working together for their mutual benefit. For this to become effective, the customer-supplier interfaces must extend into, and outside of, the organisation, beyond the immediate customers and suppliers.

A quality culture is difficult to achieve without a context or framework. A quality management system will give that frame work, which can act as a catalyst for quality to become embedded throughout the organization. This can be seen in the BS EN ISO 9000 2000 definition of a quality management system (Williams and Buswell, 2003). There are two distinct categories of quality management systems: non-accredited and accredited.

Non-accredited quality management systems that have been devised purely by the organization and are monitored solely by them. They are also known as in-house systems. The most famous companies using in-house systems in the tourism and leisure industry are Disney and Mc Donald's. The system can be tailor-made to meet the organizations own requirements, lower costs and frequently carried out. This system is not recognized by external organizations (Williams and Buswell, 2003).

Accredited systems that have third-party certification. The ISO 9000 series is an internationally recognized quality management system that requires certification to be renewed every year. This accredited quality management system is acknowledged throughout the industry sector, or in the case of ISO 9000 series. These systems are recognized externally, Can act as an agent for change, integration of quality tools and techniques can be undertaken and continuous improvement and improvement to service delivery as well. The disadvantages of accredited quality management systems are imposed and has limitations.

International Organization for Standardization (ISO)

ISO is a worldwide federation of national standards bodies (ISO member bodies). The work of preparing International Standards is carried out through ISO technical committees, in liaison with international organisations, governmental and non-governmental bodies. ISO's most recent family of standards for quality management systems are currently in their final draft (FDIS) form, and comprises:

  • ISO/FDIS 9000:2000 - Quality management systems - Fundamentals and vocabulary
  • ISO/FDIS 9001:2000 - Quality management systems - Requirements
  • ISO/FDIS 9004:2000 - Guidelines for performance improvement

They are built around business processes, with a strong emphasis on improvement and a focus on meeting the needs of customers. The new standards originated from a regular six year review and are intended to be generic and adaptable to all kinds of organisations. The ISO 9002 and ISO 9003 are to be discontinued (but can still be used by those organisations certified against them during the three year transition period), and ISO 9001and ISO 9004 are designed to be used together, but can be used independently. The ISO Series can form the means by which a holistic management system can be implemented, into which quality, health and safety and environmental responsibility can be integrated, with the audits carried out either separately or in combination.

Customer Loyalty

Customer loyalty measures how likely customers are to return and their willingness to perform partner shipping activities for the organization. Customer satisfaction is a requisite for loyalty. The customer's expectations must be met or exceeded in order to build loyalty. However, there are several reasons why satisfied customers may not become loyal customers. First, travellers do not return to an area on a regular basis. Thus, a customer may think a hotel is great, but they never return to the hotel because they never return to the area. Second, some customers like to experience different hotels and restaurants when they return to an area. These customers may be satisfied with each hotel or restaurant, but they keep changing to gain a new experience. Third, some guests are price sensitive and will shop for the best deal. Even though they were satisfied with the last hotel, they will try out another hotel because of the deal they were offered. Finally customers expect to be satisfied with their purchase, if not; they would not have made the purchase. Thus, satisfaction ratings tend to be inflated. To develop loyal customers, managers must have extremely satisfied customers.

The important point of this discussion of satisfaction versus loyalty is that loyal customers are more valuable than satisfied customer. A satisfied customer who does not return and does not spread positive word-of-mouth has no value to the hotel. On the other hand, a loyal customer who returns and spreads positive word-of-mouth has a net present value of more than $150,000 to a luxury hotel. Managers must identify those patrons who are likely to become loyal customers and create more customer- delivered value than the competition for these customers (koter, Bowen, Makens, 2006).

How to measure customer satisfaction?

First you have to identify customers' requirements- those things that are important to customers and will determine whether or not they are satisfied. Lots of things will be important to customers but some will be more important to others, so you have to measure the relative importance of customers' requirements. Second, you have to measure satisfaction- how satisfied customers are with your organisation's performance on that same list of customer requirements (Hill, Brierley, MacDougall, 2003).

Toolbox for measuring customer satisfaction

In spite of various standpoints and theories of consumerism, different disciplines generally employ similar sets of approaches and tools for studying consumer satisfaction. The approaches can be exploratory, descriptive, comparative or interpretative, and the most common tools are consumer surveys/polls, intervie ws and focus group discussions.

  • Exploratory and descriptive approaches are usually employed for evaluating attitudes, opinions, and public understanding of various issues, i.e. health and environment, consumer attitudes towards specific instruments or coercive measures.
  • Comparative and explanatory approaches are involved in studying particular consumer behaviours, i.e. recycling; and for development of predictions of specific factors that may affect values and attitudes, which in their turn may lead to changes in behaviour.
  • Interpretative methods and envisioning are used for predicting the consequences of particular consumption patterns, i.e. dematerialised lifestyles.

Customer satisfaction surveys are a questionnaire based information collection tool to determine the level of satisfaction with various product or service features (Kessler 1996). Developing a good questionnaire is the key to collecting good quality information. Questions must be short and concise, well formulated, easy to interpret and answer, and facilitate unbiased responses. Survey techniques and questionnaire designs are well known to research community and multiple guidance from different disciplines exist (Hayes 1998).

Many methods are being used for gathering survey information. Telephone surveys are generally used to collect data from a large group of customers and to target segment markets. They are more effective in obtaining data than mail or e-mail questionnaires and can potentially provide a higher depth of data (Fetz 1996). Online surveys offer an economical and fast alternative form of surveying. They can be utilised with current customers, or the entire on-line population to provide fast feedback on satisfaction and allow quick automatic information processing.

Mail surveys are the least expensive approach, but they often have a low response rate (20-30%), which becomes problematic for the statistical reliability of the data. These surveys also do not permit follow-up questions and do not offer the depth of a telephone survey (Dickey 1998). Return cards allow getting customer response and certain possibility for measuring customer satisfaction. They proved to be especially useful if they are used in after-sale interaction with consumers, e.g. repair or service activity or warranty registration (Dickey 1998).

Monitoring customer satisfaction

Monitoring customer satisfaction is pointless exercise unless management are committed to the process likely to act on the results. The objectives of monitoring, therefore, need to be clearly defined before a programme begins, together with a budget and timetable (Sarah Cook, 2002).

Before beginning a new programme of monitoring, it is useful to review any existing information or research data which the company may have collected in the past concerning customers and customer satisfaction. Typical questions to ask are;

  • What do we know about our existing customers?
  • What do we know about their expectations?
  • How well are we meeting these expectations?
  • What will happen in future to customer requirements?
  • How do we compare to our competitors?
  • How is the market likely to change in the next three years?


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