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In the current situation of recovery of the global crisis, most consumers assess the value of the service they receive against the value of money they spend. Consumer perception of the service quality and the ways to improve the service quality are of vital important to the sustainability and profit of any organisation .But the low cost carriers (LCC) are providing cheap fares for flights with less services to the customer are making higher profit than the traditional flag carriers and other airlines .Consumption of this service raise question about the customer satisfaction that is happening and the role of service and its perception In the LCC industry. I am trying to shed light to this particular market segment by highlighting the role Ryanair.
Ryanair is one the largest airlines in the world with over 63 Mn customers, 950 routes connecting 150 destinations with over 1200 flights each day across 26 countries (Ryanair annual report, 2009).They are the only profit making airlines and their motto is low cost and high volume and higher profit, with a lower profit margin for each customer. They have higher profit and lower costs and the cost comes down by 20% percent in each year by their various low cost strategies. These low cost strategies had considerable effect on the consumer services and policies. The research about consumer perception and expectation in the Ryanair found to be quite interesting and relevant and is this is why I am choosing this particular topic.
The paper is a research proposal for successfully completing my Master of Business Administration In university of Wales Lampeter, UK. The proposal starts with a relevant title with a brief introduction of the chosen topic .This is followed by the reason for the choices of the particular topic. The aim and the objectives of the research are clearly mentioned thereafter. The following part is a literature review and it analyses the most relevant literatures related to the topic of consumer perception and satisfaction. The Research methodologies along with the data analysis for this research are mentioned thereafter. The expected findings of the research are mentioned In the end.
"Consumer expectation and Perception of service and its quality in Low Cost Carriers (LCC)- A study based on Ryanair "
The dissertation is for finding out the the level of expectation of the LCC customers and up to what level are they satisfied. This will shed light to the recent success of the LCC like Ryanair. The literature review is done to understand the issues and views regarding the consumer expectation and satisfaction in general and particularly in the airline industry. The topic becomes more relevant as the sector is a service industry where the quality of service is assessed by the provided and experienced quality by the customer who consumes the service. The analysis that is being carried out is empirical and the research on the consumer perception and satisfaction of the Ryanair will expose the performance of the organisation in the LCC service industry. Even though the prevalence of high competition and the economic issue in the airline industry Ryanair was the only company to post a profit in the recession period continuously. The research will also reveal their consumer strategies and the reasons for their huge success.
Aims and Objectives
Aim: The dissertation tries to reveal the consumer perception and satisfaction in the LCC market with the analysis of Ryanair. The process will also reveal the expectation levels of the consumers in the LCC industry and particularly in the Ryanair. Various factors which have an impact in customer perception of the quality, both technical and functional quality is analysed and reviewed. Factors like the behaviour of the employees in service encounters and the impact of the service provisioning are taken into consideration for a better understanding of the chosen topic and its relevance.
Objectives of the study:
Analyse the literature review that is associated with the customer perception and expectation in the airline industry.
Analyse whether the accelerated profit earned is a part of the growth of the LCC market and the role and impact of Ryanair strategies in consumer perception and satisfaction.
Analyse the role of Ryanair and along with its competitors
Use of various research methods to understand the consumer perceptions and the factors that cause consumer expectations and the level of that.
Factors that need to be improved in the customer service of the LCC market will be identified and explained.
To analyse the service quality perceived it is important to understand the expected and perceived service quality by the customer in the end. For this purpose the GAP model proposed by Parasuraman et al (1985) is used. They contend that 'GAPS' do exists when customer expectation are perceived by management (gap 1), when the perceived expectation are put as service quality specification (gap 2), service delivery (gap 3), when external communications happen to the customer (gap 4) and the gap between the perceived and expected service quality by the customer (gap 5).The final gap, that is the gap 5 is a function of all the other gaps and will be reflected in the perceived service quality by the customer. They further assert that there are several factors that the customers take into account of the organisation while making a valuation of the service quality. Reliability, responsiveness, competence, access, courtesy, communication, credibility, security, understanding of customer needs, tangibles in the service encounter. These factors do have an impact on the perceived service quality by the customer. Sultan and Simpson (2000) further assert that out of these 10 factors, 5 factors are extremely important for the airline industry which the customers use frequently to evaluate the perceived service quality. They support the usage of the model in the airline industry also. These factors are reliability, Responsiveness, Assurance, Empathy and Tangibles out of which reliability is the highest factor. Chau and Kao (2009) supported these factors and did further study on this area. Their findings revealed there exists significant gaps between the expected and perceived service quality by the customers making the gap 5 big in the case of airline industry. They further contend that there is a huge scope of improvement for all airlines careers including the low cost carriers and failure to do so will result in alternate choices made by the customers on the use of airlines. He further asserts the importance of pricing and he value of the service the customer is getting for the particular price. Such comparisons are normal and increases the gap.
Frost and Kumar (2000) assert another factor that effect the final service quality in the airline environment. They contend that in airline industry the internal service quality by the internal service suppliers and customers (employees) play a major role in the perceived service quality of the customers. They also support the 5 factors that needed to be considered to maintain the high service quality and to reduce the gap 5. Johnston (1995) also support the importance of aforementioned 5 factors in any service environment.
Ryanair is a highly profitable organisation for the past decade and the LCC market has been growing significantly during this period with Ryanair making the most out of it. Ryanair strategy is to keep the cost down and does not bother too much for the customer satisfaction part. They perform all the measures which are needed to keep their cost down. Their strategies include flying to secondary airports, extra charges for baggage, online check in, charges for on board food and water etc. They transfer all these cost cuts to their fares and make the fares cheaper for the customers. But they do this by deteriorating their service quality to their customers. Due to this the gap between the expected and measured service quality that prevails Ryanair is not considered as a best service provider. In fact they are the worst brand in UK according to Family brands Poll (2009).In spite of all these Ryanair is posting profits in each quarter and the link between profits and customer satisfaction becomes questionable in the case of Ryanair which makes this study very interesting and relevant.
Ryanair strategies are very different from their competitors and specially from the traditional carriers whom they are competing with right now for acquiring their market share. They have used the global recession to attract more international European customers with their low fare strategy offering strict competition to the traditional carriers.
In order to analyse the data which is required to analyse customer perceptions and satisfaction in the UK , various research methodologies have to be used
Interviews: This method is mainly used for internal research and is a source of primary data. The interview or internal research will be with few managers of the customer service department of the Ryanair. The interviews will try to highlight or to give an insight on the view of customer service by the managers and what corporate culture Ryanair practice, the attitude of the employees etc. Although this is the easiest way to find out it is sometimes difficult to get a clear view of what's happening by interviewing some of the managers and their view points. In fact their view might be different from the actual real view is. So the relevance of data from these meeting are questionable and cannot be applied from a wider context.
Questionnaires: These are the most efficient way of analysing data from customers and employees without much hassle. Moreover I will be able to create a questionnaire with a distinct set of questions which will aptly suit my topic. I can also design it according to the need of data required and can be done separately for customers and employees of the firm. This will give a much better view customer perception and satisfaction and will be able to analyse the data appropriately. The issue with the questionnaire is the lengthy time it will take of getting a response and analysis of the data. Also completion of the questionnaire depends on the personal who is doing it and it varies according to the person haste.
Book Review: reading of books and other articles related to the section of customer perception and satisfaction contributes to the external research that is being undertaken by me .These books and articles will be precisely in the field of airlines to conform to the chosen topic
Internet Research: A source of secondary research which will help in vast analysis of data particularly as Ryanair stories are celebrated vastly by the media. This will help a lot in accumulation of data for customer perception and satisfaction in the case of Ryanair.
Documents: They will provide with details with organisational data like the annual report, investor report and financial report required for data analysis.
Data Analysis : Both Quantitative and Qualitative anaylsis has to be performed for data analysis.
Quantitative analysis: It is related to the number of data or units of different data. Charts, tables, graphs are derived from the data. Various methods like project management can be used for analysis of data obtained. The data can be obtained from various reports and from the information gathered from questionnaire.
Qualitative analysis: Qualitative data gathered from the interview, questionnaire are analysed on the basis of the quality of description. Usage of computer software is recommended because this will reduce complexity and provide flexibility for the usage and processing of data
Form and structure of presentation of the dissertation
The report will be in written format which will include tables, charts and graphs which are used for analysis.
Findings-Projected The report is projected to analyse the particular topic its applicability and for finding the scope of improvement of it.
Research Time Table