The relationship between satisfaction and service quality

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INTRODUCTION

Service marketing is about refining the basic philosophy of marketing to allow the principles to be operationalized more effectively in the service sector. Many of these principles will be familiar to those involved in the marketing of goods and can be applied to the services with relatively little refinement. (Palmer, 2005)

Service quality is generally recognised as a critical success factor in a firm's endeavours to differentiate itself from competitors (Ladhari.R, 2009). Research has shown that good service quality leads to the retention of existing customers and the attraction of new ones, reduced costs, an enhanced corporate image, positive word-of-mouth recommendation, and ultimately, enhanced profitability (Berry et al., 1989; Reichheld and Sasser, 1990; Rust and Zahorik, 1993; Cronin et al., 2000; Kang and James, 2004; Yoon and Suh, 2004 sited in Ladhari.R ,2009).

Service quality and customer satisfaction are inarguably the two core concepts. ( Spreng and Mackoy, 1996 cited in Sureshchander et al, 2002).

CONSTRUCT OF SERVICE QUALITY AND CUSTOMER SATISFACTION

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Quality is an extremely difficult concept to define in a few words. Crosby, 1984 (cited in Palmer, A 2004) It has been defined as ‘conforming to requirements'. But quality can only be defined by customers and occurs when an organization supplies goods or services to a specification that satisfies their needs.

Brandi and Cronin, 2001 (Cited in Palmer, A, 2004) that the effects of services quality on consumer decision-making appear to be largely indirect and mediated by value and satisfaction.

Parasuraman et al., 1985; Anderson and Fornell, 1994 (Cited in Palmer, A, 2004) Satisfaction is a ‘post-consumption' experience which compares perceived quality with expected quality, whereas service quality refers to a global evaluation of a firm's service delivery system.

Four distinctive features of services are:-

  1. Intangible- It is because service as performances, are difficult to assess before a sale ( Lovelock, 1981; Khan, 2003 cited in Ladhari, 2009); moreover, as a result this intangibility, service providers can have difficulty in ascertaining how consumers perceive their services( Parasuraman et al., 1985).
  2. Heterogeneous- They are heterogeneous because day differ from place to place, customer to customer, day to day (Parasuraman et al., 1985; Markovic, 2006); moreover, the involvement of the customer as co-producer of service delivery means that the service provider has less control over the consistency of the service.
  3. Perishable- It is perishable because it cannot be stored or sold on another day. It has to be consumed the same day.
  4. Inseparable- It is inseparable because many of them are simultaneously produced and consumed.

These four distinctive characteristics mean that service quality is a more elusive and abstract construct that product quality. (Parasuraman et al., 1985, 1988 cited in Ladhari, 2009).

Perceived service quality is one of the highly debated and researched topic in marketing theory, the prima facie evidence for which exhibited by the considerable academic attention. Perception of service quality occur at multiple levels in a organisation- e.g with the core service, physical environment, interaction with the service provider, etc (Bitner & Hubert, 1994 cited in Sureshchander et al., 2002). On the other hand, the customer's overall satisfaction with the service of the organisation is based “on the all experiences of the the customers with the organisation.” Similar to service quality, customer satisfaction also occurs at multiple levels in an organisation. (Sureshchander et al, 2002).

For example, service quality of a health club is judged on the attributes such as whether equipment is available and in working order when needed, how responsive the staff are to customer needs. On the other hand, customer satisfaction with the health club is a broader concept that will certainly be influenced by perceptions of service quality but that will also include perception of product quality, price of membership, personal factors such as the consumer's emotional state etc (Zeithaml et al, 2006).

Service quality can thus be conceptualised as so-called ‘gap' between what consumers feel that a service should offer and their perceptions of the actual performance of the service (Parasuraman et al., 1988 sited in Ladhari, 2009). Perceived quality thus differs from “objective quality, which involves an objective assessment of a thing or an event on the basis of predetermined standards that are measurable and verifiable” (Zeithaml, 1988 sited in Ladhari, 2009). In contrast, perceived service quality involves an “overall impression of a service”; as such, it is a type of attitude (Parasuraman et al., 1988; Zeithaml, 1988; Sureshchandar et al., 2002 sited in Ladhari, 2009).

SERVQUAL MODEL

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According to Parasuraman et al., (1985 Cited in Ladhari.R, 2009), consumer's perceptions of service quality are influenced by five gaps;

  1. Gap 1- Difference between customer expectation and management perception
  2. Gap 2- Difference between management perception service quality specification
  3. Gap 3- Difference between service quality specification and service delivery
  4. Gap 4- Difference between service delivery and external communication
  5. Gap5- Difference between perceived service and expected service

Gap 5 is influenced by Gaps 1-4, which are all within the control of an organisation and therefore need to be analysed to identify any changes that should be implemented to reduce or eliminate Gap 5.

Parasuraman et al., (1985 sited in Ladhari, 2009) argued that such “gap analysis” are critical for identification of discrepancies between the provider's perception of service quality dimensions and the consumers perception of those dimensions.

Ten dimensions were subsequently collapsed into five service-quality dimensions, as follows:

  1. Tangibles (measured by four items): the appearance of physical facilities, equipment, and personnel;
  2. Reliability (five items): the ability to perform the promised service dependably and accurately;
  3. Responsiveness (four items): the willingness to help customers and provide prompt service;
  4. Assurance (four items): the knowledge and courtesy of employee and their ability to inspire trust and confidence; and
  5. Empathy (five items): the level of caring and individualised attention the firm provides to its customers.

These five dimensions are thus assessed by a total of 22 items. Each item is measured on the basis of responses to two statements that measure:

  1. The general expectations of customers concerning a service; and
  2. The perception of customers regarding the levels of service actually provided by the company within the service category.
  3. The gap score (G) is calculated on “an item-by-item basis as the difference between the raw perception-of-performance score (P) and the raw expectation score (E) for matching items; therefore, G=P-E” .Following this calculation, the greater the perception-minus-expectation score, the greater is the perceived service quality. ( Ladhari, 2009)

While the SERVQUAL instrument has been widely used, it has been subject to criticism (Asubonteng et al., 1996; Buttle, 1996 cited in Kang, 2004). SERVQUAL focuses only on service delivery process and does not address the service encounter outcomes (Gronroos,1990; Mangold and Babakus, 1991 cited in Kang, 2004). Gronroos, 1982, 1990; Parasuraman et al., 1985 argued in Kang, 2004 “that though service quality is based on multiple dimensions, there is no general agreement as to the nature of content of the dimensions (Brady and Cronin, 2001 cited in Kang, 2004)”.

(Cronin and Tylor, 1992; 1994 quoted in Buttle, 1996) that SERVQUAL is paradigmatically flawed because of its ill-judged adoption of disconfirmation model. “Perceived quality”, they claim, “is best conceptualized as an attitude”.

(Babakus and Boller, 1992 quoted in Buttle, 1996) that use of a “gap” approach to SQ measurement “intuitively appealing” but suspected that the “difference scores do not provide any additional informative beyond that already contained in the perception component of the SEVQUAL scale”. They found that the dominant contributor to the gap score was the perception score because of a generalized response tendency to rate expectations high.

Ekinci and Riley 1998 cited in Ladhari, 2010 argued that “the concept of subtraction contained in the SERVQUAL model has no equivalent in psychological function.” (Brown et al, 1993 & Peter rt al, 1993 cited in Ladhari, 2010) argued that gap scores have poor reliability and problems with variance because the reliability of a difference score decreases as the correlation between its two components increases. Brown at al, 1993 cited in Ladhari, 2010 questioned the construct validity of gap scores because such scores are unlikely to be distinct from their component scores i.e. perception and expectation.

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IMORTANCE-PERFORMANCE ANALYSIS

Importance-performance analysis compares the performance of elements of a service with the importance of each of these elements to the consumer. In practise, some researchers have used scale items which are very similar to those used in a typical SERVQUAL study. The difference occurs through with the treatment of scores. Instead of calculating a perceptions minus expectations (P-E) score, IPA analysis calculates a performance minus importance (P-I) score.

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Performance is typically evaluated on a rating scale whereas importance can be either rated by the respondents or estimated on the basis of performance (Oliver, 1997 cited in Eskildsen & Kristensen, 2006).

Hansen and Bush, 1999 quoted in Deng, 2008 that “Importance performance analysis is a simple and effective technique that assist practitioners in identifying improvement priorities for service attributes and direct quality-based marketing strategies.”

Importance-performance analysis has two implicit assumptions:

  1. Attribute performance and attribute importance are independent variables; and
  2. The relationship between attribute performance and overall performance is linear and symmetrical. ( Deng, 2008)

Prior to the purchase or use of a service the customer forms expectation as to the level of performance and these performance are compared with the perceived actual performance. The comparison may result in confirmation (when the service meets expectations) or disconfirmation (when the service does not meet the expectation). More specifically, the customer may experience positive disconfirmation if the service exceeds expectations and negative disconfirmation if the service fails to reach expectation. (Ennew et al., 1993)

IPA has been applied as an effective means of evaluating a firm's competitive position in the market, identifying improvement opportunities, and guiding strategic planning efforts (Martilla and james, 1977; Hawes and Rao, 1985; Myers, 1999 cited in Weng, 2008).

IPA has been applied within many service sectors, including banking (Joseph et al., 1999 cited in Palmer, 2005), Healthcare (Hawas and Rao, 1985 cited in Palmer, 2005), Tourism (O'Neil et al., 2002 cited in Palmer, 2005), and Education (Wright and O'Neil, 2002; Pike 2003 cited in Palmer, 2005)

The analysis is simple to calculate but their theoretical credibility has been challenged. Bacon 2003 quoted in( Palmer, 2005) suggested that importance of difference between them using the same scales ‘reflects a “rule of thumb” guide for action and that attributes that score close to the cross point on the grid may be overlooked or misinterpreted in terms of an appropriate managerial response for action. (Palmer, 2005)

Conclusions draws on the performance-importance map are usually based upon the assumption that the performance of the attribute can be changed without affecting the importance of attribute (Martilla and james, 1977; Slack, 1994; Oliver, 1997; Bacon, 2003 cited in Eskildsen & Kristensen, 2006). Based on this assumption an attribute with low performance and high importance constitutes an obvious opportunity for improvement for a company conducting a job satisfaction survey. (Slack, 1994; Oliver, 1997 cited in Eskildsen & Kristensen, 2006).

SIX SIGMA MODEL

Six sigma was developed at Motorola through the effort of reliability engineer Bill Smith in the 1980's (Brandy and Allen, 2006 cited in Pepper & Spedding, 2010). The Six sigma's popularity came through the work of Jack Welch who was the CEO of General Electric in 1995. The term “Six Sigma” refers to a “statistical measure of defect rate within a system”. ( Pepper & Spedding, 2010).

The importance of identifying key performance metrics is a recurring theme in literature. “A defect may be defined as anything which does not meet customer needs or expectations. It would be illogical to assume that all defects are equally good when we calculate the sigma capability of a process” (Antony, 2006 sited in Pepper & Spedding, 2010).

A number of articles have focussed on the importance for six sigma for services and challenges for applying this quality improvement methodology to service operations (Biolos, 2002; Patton, 2005; Hensley and Dobie, 2005; Antony, 2006; Chakrabarty and Tan, 2007; Antony et al, 2007 and kumar et al, 2008 cited in Nakhai, 2009).

Six Sigma benefits an organisation in such a way that it enables the organisation to maintain the focus on operational efficiency and magnify explicitly the impact when operations and process deviate away from the average number of defects. Six Sigma has been viewed as “shift in quality concept that revolutionized the way that organisations evaluate their processes. Its statistical approach made defects that normally would be viewed strictly as a manufacturing-type its applicability in reducing defects in production also enables the organisations to achieve high quality product with competitive superiority” (Thevnin, 2004).

Six Sigma can be considered both business strategy and science that has the aim of reducing manufacturing and service costs, and create significant improvement in customer satisfaction and bottom-line saving through combining statistical and business process methodologies into an integrated model of process, product and service improvement (Breyfogle, 1999 cited in Thomas et al, 2008).

The evolution of six sigma phenomenon and the ability that it gave organization in identifying quality challenges has provided both tangible and intangible benefits. Some define the tangible benefit as the “ability to reduce the number of defects from their processes, for example 3.4 parts per million opportunities (Henderson & Evans, 2000 cited in Thevnin, 2004). The intangible benefits have often been referred to as business initiatives that could create competitive superiority, like GE'S accomplishments (Thevnin, 2004).

Six sigma has been viewed as a “shift in quality concept that revolutionized the way that organizations evaluate their processes.” Its statistical approach made defects that normally would be viewed strictly as a manufacturing-type industry concern, a universal concept with no industry bound. Its applicability in reducing defects in production also enables the organizations to achieve high quality products with competitive superiority. (Thevnin, 2004).

SERVICE QUALITY IN AIRLINE INDUSTRY

Successful service quality is generally characterized by customer segmentation, customized service, guarantees, continuous customer feedback, and comprehensive measurement of company performance. The experience in many industries and companies demonstrates that this process, although generally acknowledged, is not universally implemented. Market segmentation by customer expectations, had also been found essential to attract customers and create customer loyalty (Porter, 1980, 1985 cited in Sultan, 2000).

Customer perception and expectations of service quality are increasingly used to forecast company profitability and prospects for improved market share.

The general importance of quality to the airline industry is recognized in the annual Airline Quality Report (Bowen & Headley, 1995 cited in Sultan, 2000) for domestic airlines, which incorporates an “internally-focused model based on financial data, fares, passenger load factors, service related issues, etc.” As service quality strategy fundamentally focuses externally on the customer and satisfaction rather than internally on company profits and costs, a distinctive and unequivocal management approach, as well as organization commitment is required (Peters and Waterman, 1982; Whiteley, 1991; Carlzon, 1989 cited in Sultan, 2000).

(Winsted, 2000 quoted in Babbar, 2008) that Customers evaluate quality of service based on the level of concern and civility and listening and understanding demonstrated by employees (Chandon et al., 1997 cited in Babbar, 2008). King and Garey, 1997 quoted in Babbar, 2008 that relational quality refers to customer's perception and evaluation of service employee's communications and behaviour such as report, courtesy, warmth, empathy and helpfulness, and involves customer's feelings and emotional states through interaction with employees.

METHODOLOGY

SERVQUAL model concentrate on 5 gaps impairing the delivery of excellent service quality, the difference between airline passenger expectations and perceptions of the service. SERVQUAL model is used to compare the performances of the groups of major competitors in international airline service, incorporating multiple passenger and airline nationalities (Sultan, 2000)

Customers were asked to self-complete the 22 statements relating to their expectations and a perceptions section consisting of a matching set of company-specific statements about service delivery. Asked on the scale from 1 (strongly agree) to 7 (strongly disagree), whether or not they agree with each statement (Palmer, 2005).

RESULTS

After looking at the SERVQUAL model analysis which is mentioned in the table 1 and 2 in the appendices for the two airline company Jet Airways and Indigo airlines, that customer travelling with Jet Airways had a competitive advantage over Indigo Airlines as the customer are treated well by the employees and they have frequent flight to the destinations which makes things convenient to the customer. Airline service quality among Indigo Airlines has been considered an oxymoron by many travellers while Jet Airways is a recognized service quality leader receiving enthusiastic reviews from airline passengers for exceptional customer service.

The SERVQUAL model was determined under service quality dimension like Tangibles, Reliability, Responsiveness, Assurance, and Empathy (Zeithaml et al., 1990 cited in Sultan, 2000).

The questionnaire comprised of 22 questions which are divided according to tangibility, reliability, responsiveness, assurance and empathy. Questions 1 to 4 are based on tangibility, 5 to 9 are based on reliability, 10 to 13 based on responsiveness, 14 to 17 on assurance and 18 to 22 are based on empathy.

So the customers were asked to fill up the questionnaire that often travels in the airlines. They agreed that Reliability id the most important SERVQUAL dimension, followed in sequence by Responsiveness, Assurance, Empathy and Tangibles.

Reliability- Reliability is deemed the most important service quality dimension and the highest mean value for expectation is attributed by both passenger groups to the reliability feature: “when a customer has a problem, an excellent airline shows a sincere interest in solving it.” (Sulan, 2000).

Reichheld and Sassar, 1990 quoted in Sultan, 2000 that “an excellent airline is always concerned about long-term passenger loyalty , and sustained profits earned thereby will not be distracted by from their attention to the passenger even when economic prosperity may obscure the need of doing so.” As in table 1 and 2, where two airline companies, namely, Jet Airways and Indigo Airline has been compared, Jet Airways holds an advantage as complete their work at a given time as compared to Indigo in which customer is not completely satisfied.

Responsiveness- Passengers appear to expect airline personnel to be responsive and prepared to meet their request, if a problem occurs, the airline employees are expected to respond to customer needs in constructive and considerate way. Employees in excellent airline are never too busy to respond to customer requests.

Assurance- Assurance has been ranked highly on the scale to their expectations for assurance features. An excellent airline will have the knowledge to answer all the customer's questions. As in the comparison between Jet Airways and Indigo Airlines, though Jet Airways is considered to be the better one but the employees of Indigo have more knowledge to answer the customer's questions. Everything associated with the flight, e.g. the check-in process, how schedule charges are handled, the conduct of airline employees, became critical to passengers (Schneider and Bowen, 1995 cited in Sultan, 2000).

Empathy- the Empathy Features for which expectations are greatest include: “Excellent airlines will have the best interest for the passengers at heart” and the “Employees of excellent airlines understand the specific needs of their customers.” Both the airline company completely satisfy their customers and the employees are well supportive and are always ready to help their customers. They give personal attention to their customers and have operating hours which are convenient to their customers. Like in the case of Jet Airways and Indigo airlines, both the companies have been rated out of 7.

Schneider and Bowen, 1995 cited in Sultan, 2000 that “Companies are often shown to violate the customer's best interests or specific needs, by rationalizing the causes of complaints made by customer, e.g. the reason for a lost reservation is explained by an employee in terms of what the customer did wrong rather than provider-e.g. the airline”.

Tangibles- The passenger group impute highest expectation for tangible among service quality feature (table 1 &2); mean expectation values for all tangible features are more than 7 for both the companies. So that means both the airline company have modern-looking craft and the adoption of high-technology in-flight entertainment capabilities indicate that airline management indicate that they focus on customer satisfaction and provide good service quality but Jet Airways have a little edge over Indigo Airlines.

CONCLUSION

Service quality is recognized as the key instrument as a customer will only stay loyal to his brand when he/she gets a good service quality and gets complete satisfaction. So providing good service quality to the customer and customer satisfaction is the ultimate aim for every industry. Like Jet Airways provide a good service quality to the customers and have a little edge over Indigo airlines. Service qualities like frequent flights and personal attention to the passenger, safety of the passenger are the most important factors which have been analyzed in this assignment and have been used with the help of SERVQUAL model which has been used to compare both the airlines.

Jet Airways has provided better perceived service quality as compared to Indigo Airlines in terms of reliability, empathy. The degree of performance for Jet Airways has corresponded to importance of customer whereas Indigo Airline has failed to reach its services to the perceived customers in airline industry.

So the management should not only focus on customer satisfaction but also target on good service quality (Sureshchander et al., 2002). The service providers should try to improve both service quality and customer satisfaction because a customer will only be satisfied only when companies have personal and passionate appreciation for their customers and understand the needs and wants of them to satisfy them.

Airline Company's keen to improve customer service quality should devote more time and money to improving reliability, and less to factors such as aircraft livery and staff uniforms because reliability is considered to be the most important factor in airline industry. (Sultan, 2000).

REFERENCES:

BOOKS

Palmer, A (2005).Principles of services marketing. 4th ed. New York: McGraw hill Education. 3.

Zeithamal, V.A., Bitner,M.J.& Gremler, D.D (2006).Service Marketing: Integrating customer focus across the firm. 4th ed. New York: McGraw hill. 108.

JOURNALS

Babbar, S & Koufteros, X. (2008). The human element in airline service quality; contact personnel and the customer.International Journal of Operations & Production Management. 28 (9), p.804-830.

Buttle, F. (1996). SERVQUAL; review, critique, research agenda.European Journal of Marketing. 30 (1), p.8-32.

Deng, W.J. (2008). Fuzzy importance-performance analysis for determining critical service attributes.International Journal of Service Industry Management. 19 (2), 252-270.

Ennew, C.T., Reed, G.V., & Binks, M.R. (1993). The importance-performance analysis and the Measurement of Service Quality.European Journal of Marketing. 27 (2), p.59-70.

Eskildsen,J.K & Kristensen,K. (2006). Enhancing importance-performance analysis.International Journal of Productivity and Performance Management. 55 (1), p.40-60.

Kang, G & James, J. (2004). Service quality dimension: an examination of gronroos's service quality model.Managing Service Quality. 14 (4), p.266-277.

Ladhari, R. (2009). A review of twenty years of SERVQUAL research.International Journal of Quality and Services Sciences. 1 (2), 172-198.

Nakhai, B & Neves, J.S. (2009). The challenges of six sigma in improving service quality.International Journal of Quality & Reliability Management. 26 (7), 663-684.

Pepper, M.P.J & Spedding, T.A. (2010). The evolution of lean Six Sigma.International Journal of Quality & Reliability Management. 27 (2), p.138-155.

Sultan, F & Simpson, M.C. (2000). International service variants: airline passenger expectations and perceptions of service quality .Journal of Services Marketing. 14 (3), p.188-216.

Sureshchander, G.S., Rajendran, C., Anantharaman, R.N. (2002). The relationship between service quality and customer satisfaction - a factor specific approach.Journal of Services Marketing. 16 (4), 363-379.

Thevnin, C. (2004). Effective management commitment enhances six sigma success.Handbook of Business Strategy. 5 (1), p.195-200.

Thomas, A., Barton, R & Byard, P. (2008). Developing a Six Sigma maintenance model. Journal of Quality in Maintenance Engineering. 14 (3), p.262-271.

Appendices.

Table A

JET AIRWAYS

Performance

Expectation

Gap

Modern-Looking aircraft

7

7

0

Terminal and gate facilities excellent

7

6

1

Airline employee will be neat appearing

7

7

0

An excellent airline's material

6

6

0

Airline promise to do something, they do so

7

7

0

When customer has a problem, airline helps them

6

6

0

Airline will perform the service right the first time

7

7

0

Excellent airline will provide their service at the time they promise

7

7

Error-free records

5

6

-1

Making customer aware of the services provided

6

6

0

Prompt-service to the customers

7

7

0

Always willing to help the customers

6

6

0

Responding quickly to the customers

7

7

0

Behaviour of the employees towards customer

6

6

0

Safety in Transaction

7

7

0

Consistently courteous with customers

6

5

1

Knowledge of employees to answer customer questions

5

5

0

Individual attention to the customers

7

7

0

Convenient operating hours to customers

6

6

0

Customer personal attention by employees of the airline

7

7

0

Providing best interest

7

5

2

Understanding the specific needs of the customers

6

6

0

(Source: Sultan, 2002)

Appendices.

Table B

INDIGO AIRLINES

Performance

Expectation

Gap

Modern-Looking aircraft

7

7

0

Terminal and gate facilities excellent

7

7

0

Airline employee will be neat appearing

6

6

0

An excellent airline's material

5

7

-2

Airline promise to do something, they do so

5

7

-2

When customer has a problem, airline helps them

6

6

0

Airline will perform the service right the first time

7

7

0

Excellent airline will provide their service at the time they promise

7

7

0

Error-free records

4

6

-2

Making customer aware of the services provided

3

6

-3

Prompt-service to the customers

6

6

0

Always willing to help the customers

6

6

0

Responding quickly to the customers

5

5

0

Behaviour of the employees towards customer

7

7

0

Safety in Transaction

6

7

-1

Consistently courteous with customers

6

6

0

Knowledge of employees to answer customer questions

7

7

0

Individual attention to the customers

6

6

0

Convenient operating hours to customers

6

6

0

Customer personal attention by employees of the airline

6

6

0

Providing best interest

7

7

0

Understanding the specific needs of the customers

7

7

0

Source: Sultan,2000)