The Statement Airline Service Quality Development

【Abstract】As the recent emergence of the Low Cost Carriers (LLCs) in Air-line industry, service differentiation and customer satisfaction takes critical role in order to sharpen competitive edges to both Full Service Carriers (FSCs) and LLCs. The current research aims to explore the nature of service quality in airline and its relationship to customer satisfaction. Air service quality dimensions using factor analysis are classified as Ticketing and Boarding Processes, Customer Encounter Services, and Tangibles. Further, the regression analysis reveals the strength of relationships between each of service quality dimensions and customer satisfaction scales that the Ticketing and Boarding Process dimension has the strongest co-relations with customer satisfaction scales.

【Key Words】Air Service Quality, Air Service Dimensions, Customer Satisfaction

【摘要】鑒于目前低成本航空公司(廉價航空)的出現,服務的差異化和旅客的滿意度成為構化全面服務航空公司(全業務航空)和低成本航空公司(廉價航空)競爭優勢的關鍵。此次研究的主要目標是“SERVQUAL”原理揭示航空公司服務質量的本性以及其與旅客滿意度的內在聯系。

I.Introduction

As services industry is rapidly growing, service quality are simply less expensive that replacing them with new has gained increased attention from both practitioners and academia. The main objective of service marketing is keeping current customers and exploiting potential customers through providing a higher customer satisfaction, which will eventually reach maximized sales revenue. Airline industry is one of the good representations of service industry. Though the sales of industry is growing on a yearly base, the net income of an individual business is decreasing 3.4% in every year due to increased competition, especially from emergence of the low cost carrier (Oum and Yu, 1998).

Due to the fierce environment of competition, airline companies set an emphasis on increasing new customers and keeping and nurturing current customers. Increasing number of airline companies consider joining in world-class airline alliances such as “Star Alliance” or “Skyteam” in order to increase level of services from service standardization as well as to offer wider range of transportation options through code-sharing within the alliance group.

Most of airline companies set marketing strategy of reaching customer satisfaction through service differentiation from competitors. Increased service quality elevates satisfaction level of airline passengers and satisfied customers stay with the service provider longer. This positive cycle is the main theme of loyalty marketing. Every company must be able to satisfy and retain customers. That is the key to business performance. Providing high quality products/services builds strong relationships with customers and ensures future revenue streams. Using the Profit Impact of Marketing Strategy data set, Buzzell and Gale (1987) demonstrate that companies offering higher quality of service realize above the normal market share growth. Also firms in the top quartile of relative service quality achieve an average eight percent higher price premium than their competitors. (Gale, 1992)

endprint

In the 1970s, quality gurus argue that “quality is free.” That is tireless pursuit of improvement should not only increase efficiency but also increase customer satisfaction in the process, saving enough on costs and bringing in enough new and repeat business to more than cover any expenditures on quality. In the 1980s the experts began to more focus more directly on increasing customers. More recently, quality and satisfaction have been viewed not sufficient by themselves. Companies began to view loyalty as the key to profitability (Johnson &Gustafsson, 2000). The above variables are closely related causes and effects, not an independent outcome. Service quality in airline industry includes reservations, ticketing, check-in and boarding processes, baggage check-in, and in-flight services. Research in service quality has gained attentions since Parasuraman, Zeithaml, and Berry (1985) introduce a standardized service quality measurement scale, SERVQUAL. Since then, it has been applied in various industries. Among general service quality measurement instruments, SERVQUAL, in both original and modified versions, developed by Parasuraman, Zeithaml, and Berry (1985; 1988), is probably the tool that is one of the most widely used. SERVQUAL is designed to measure consumersservice quality perceptions in various industries using relative comparisons between service perceptions and expectations.

Since the emergence of LLCs in China, the air transportation industry has experienced unprecedented competition. Now two FSCs and five LLCs are competing in the industry. The market share of the LLCs is increasing from 0.1% to 27.7% in 2009 in the Chinese domestic air service industry. And the figure is expected to increase even faster. Moreover, two major FSCs in China have launched their own low cost subsidiaries in order to make adaptive changes to this new situation and to maintain their own existing market share. Thus, the environment of the Chinese air market will become increasingly competitive considering the rapid growth of new LCC entrants. Additionally, the Chinese LCC market is still in the introductory stage compared to the more mature US and European airline. In the US air market, LCCs are expected to extend their share of the market up to 40% in the near future (Rhoades & Waguespack, 2008).

As the emergence of LCCs, service differentiation becomes critically important. However, airline service research including both FSCs and LCCs is hard to find. Because of necessities raised above, this research aims to explore a service quality scale suitable for airline service. The specific research objective is to propose necessary service quality dimensions in the chosen industry and to find a relationship with customer satisfaction.

Ⅱ.Literature Review

1.Service Quality in Airline Industry

Service quality has been defined as the customers overall impression of the relative inferiority or superiority of the organization or its services (Zeithaml, Berry, & Parasuraman, 1990). Airline services come from tangible and intangible processes. The wide service range spans from air transportation, reservations, ticketing and check-ins, in-flight service, baggage check-ins, and airport services at the destination.

endprint

Newman(2001)stresses the importance of service quality in service firms that the businesses profitability and growth are fostered by customer retention. Retention is a function of customer satisfaction, which is mostly influenced by value of service quality delivered to customers. Thus, defining service quality is a key foundation for increasing firms competitiveness and profitability.

2.SERVQUAL

SERVQUAL, one of the most widely utilized service quality scales, is based upon a disconfirmation concept. The initial SERVQUAL was developed by Parasuraman, et al. (1985) as a standardized service quality measurement scale using a gap analysis. It is operationalized as Q = P E, which means service quality (Q) equals customers perception of service provision (P) minus service expectation (E).

The SERVQUAL has five dimensions of service qualities (Parasuraman et al., 1988), and it evolved from previous research done in 1985 by the same authors. From an exploratory factor analysis, Parasuraman et al. (1985) initially reveal ten potentially overlapping dimensions of service quality (see . The authors investigate service quality from four different service categories: retail banking, credit card, securities brokerage, and product repair and maintenance. The ten service quality dimensions are tangibles, reliability, responsiveness, communication, credibility, security, competence, courtesy, understanding/knowing the customer, and access. These basic domains and their descriptions serve as a foundation of SERVQUAL scale development. By using factor analysis and through the scale purification process, the ten dimensions later refine to SERVQUALs five distinctive dimensions: tangibles; reliability; responsiveness; assurance; and empathy. The first three of them keep their originality from their previous research, yet the other two dimensions (assurance and empathy) emerge from fusing the rest of the seven dimensions. Since its introduction, it has been applied in number of service industries and countries.

Dimensions Definitions

Tangibles Physical facilities, equipment, and appearance of personnel

Reliability Ability to perform the promised service dependably and accurately

Responsiveness Willingness to help customers and provide prompt service

Assurance Knowledge and courtesy of employees and their ability to inspire trust and confidence

Empathy Caring, individualized attention the firm provides its customers

Source: Parasuraman et al. (1988, p. 23)

3.Air Service Quality

As discussed previously about SERVQUAL-related criticism, one of the issues regarding SERVQUAL research is the applicability of service quality measurement scales that are developed for general purposes to a specific industry (Carman, 1990). Due to this issue, airline specific service characteristics are advised to be incorporated in addition to the original SERVQUAL items to develop a service quality scale suitable for airline services. So doing will better reflect service quality dimensions specifically related to a particular industry.

Perceived air service quality by the customer has been suggested as the main factor in sustaining an advantage in a strong competitive environment. An airlines competitive advantages are determined by the passengers perception of service quality. Research has demonstrated that the service provided is one of the foremost reasons for choosing an airline. Moreover, according to numerous airline research studies, airline service quality has an influence on service differentiation, passenger perceived value, passenger satisfaction, airline choice, and passenger behavioral intention. Consistent with previous studies, an airline which gives passengers superior quality service as compared to the perceived airline service from competitors would be a market leader (Prayag, 2007).

4. Customer Satisfaction

Customer satisfaction is understood as a consumers perceived value received from a product or service provider during his/her transactional or on-going relationships (Heskett, Sasser, & Schlesingler, 1997). Researchers defined customer satisfaction as a consumers state of being as a result of consumption experience.

Customer satisfaction can be understood as either an outcome or a process (Yi, 1990). Oliver (1997) theorizes customer satisfaction as a static concept, which is a cognitive and an affective response obtained through a current transaction or current consumption experience. His disconfirmation theory explains how consumers evaluate variables influencing consumers satisfaction. According to Olivers disconfirmation theory (Oliver, 1980), a customers satisfaction can be described as the result of a product comparison from his/her set of standards (expectation or other norm of performance) with the product performance. If the performance exceeds the standards or expectations, then increase in satisfaction is expected. And if the performance is less than the standards (expectations), decrease in satisfaction is expected. Positive or negative disconfirmation results when perceived performance deviates from the standards. Disconfirmation is thus expected to affect consumers satisfaction.

In this theory, consumer satisfaction is hypothesized primarily as a function of disconfirmation. On the other hand, the process oriented customer satisfaction examines whether the whole processes of consumption experiences achieves an expected result or not. It looks at the entire consumption processes and finds a specific process that might lead to customer satisfaction. This approach seems to draw more attention to the perceptual, evaluative, and psychological processes that combine to generate customer satisfaction (Yi, 1990, P70).

References：

[1]Brady, M.K. & Cronin, J.J. (2001), “Some new thoughts on conceptualizing perceived service quality: A hierarchical approach” Journal of Marketing, Vol.65 No.3, pp.34~49.

[2]Cronin, J.J. & Taylor, S.A. (1992), “Measuring service quality: A re-examination and extension” Journal of Marketing, Vol.56, pp.55~68.

[3]Field, A. (2005), “Discovering Statistics Using SPSS (2nd Edition)”, London; Thousand Oaks, CA; New Delhi: Sage.

[4]Hair, J.F., Black, B., Babin, B., Anderson, R.E., & Tatham, R.M. (2005), “Multivariate Data Analysis, 6th edition”, Prentice-Hall.

[5]Johnson, M.D. & Gustafsson, A. (2000), “Improving customer satisfaction, loyalty, and profit” SanFrancisco, CA: Jossery-Bass.

[6]Kim, Y., Kim, Y., & Lee, Y. (2011), “Perceived Service Quality for South Korean Domestic Airlines” Total Quality Management, Vol.22 No.10, pp.1041~1056.

[7]Lam, S.Y., Shankar, V., Erramilli, M.K., & Murthy B. (2004), “Customer value, satisfaction, loyalty, and switching costs: An illustration from business-to-business service context”Academy of Marketing Science. Journal, Vol.32, pp.293~311.

[8]Nam, S. (2008), “Exploring service dimensions: From an American and Korean banking case” The Academy of Korea Customer Satisfaction Management, Vol.10 No.3, pp.129~145.

endprint

Perceived air service quality by the customer has been suggested as the main factor in sustaining an advantage in a strong competitive environment. An airlines competitive advantages are determined by the passengers perception of service quality. Research has demonstrated that the service provided is one of the foremost reasons for choosing an airline. Moreover, according to numerous airline research studies, airline service quality has an influence on service differentiation, passenger perceived value, passenger satisfaction, airline choice, and passenger behavioral intention. Consistent with previous studies, an airline which gives passengers superior quality service as compared to the perceived airline service from competitors would be a market leader (Prayag, 2007).

4. Customer Satisfaction

Customer satisfaction is understood as a consumers perceived value received from a product or service provider during his/her transactional or on-going relationships (Heskett, Sasser, & Schlesingler, 1997). Researchers defined customer satisfaction as a consumers state of being as a result of consumption experience.

Customer satisfaction can be understood as either an outcome or a process (Yi, 1990). Oliver (1997) theorizes customer satisfaction as a static concept, which is a cognitive and an affective response obtained through a current transaction or current consumption experience. His disconfirmation theory explains how consumers evaluate variables influencing consumers satisfaction. According to Olivers disconfirmation theory (Oliver, 1980), a customers satisfaction can be described as the result of a product comparison from his/her set of standards (expectation or other norm of performance) with the product performance. If the performance exceeds the standards or expectations, then increase in satisfaction is expected. And if the performance is less than the standards (expectations), decrease in satisfaction is expected. Positive or negative disconfirmation results when perceived performance deviates from the standards. Disconfirmation is thus expected to affect consumers satisfaction.

In this theory, consumer satisfaction is hypothesized primarily as a function of disconfirmation. On the other hand, the process oriented customer satisfaction examines whether the whole processes of consumption experiences achieves an expected result or not. It looks at the entire consumption processes and finds a specific process that might lead to customer satisfaction. This approach seems to draw more attention to the perceptual, evaluative, and psychological processes that combine to generate customer satisfaction (Yi, 1990, P70).

References：

[1]Brady, M.K. & Cronin, J.J. (2001), “Some new thoughts on conceptualizing perceived service quality: A hierarchical approach” Journal of Marketing, Vol.65 No.3, pp.34~49.

[2]Cronin, J.J. & Taylor, S.A. (1992), “Measuring service quality: A re-examination and extension” Journal of Marketing, Vol.56, pp.55~68.

[3]Field, A. (2005), “Discovering Statistics Using SPSS (2nd Edition)”, London; Thousand Oaks, CA; New Delhi: Sage.

[4]Hair, J.F., Black, B., Babin, B., Anderson, R.E., & Tatham, R.M. (2005), “Multivariate Data Analysis, 6th edition”, Prentice-Hall.

[5]Johnson, M.D. & Gustafsson, A. (2000), “Improving customer satisfaction, loyalty, and profit” SanFrancisco, CA: Jossery-Bass.

[6]Kim, Y., Kim, Y., & Lee, Y. (2011), “Perceived Service Quality for South Korean Domestic Airlines” Total Quality Management, Vol.22 No.10, pp.1041~1056.

[7]Lam, S.Y., Shankar, V., Erramilli, M.K., & Murthy B. (2004), “Customer value, satisfaction, loyalty, and switching costs: An illustration from business-to-business service context”Academy of Marketing Science. Journal, Vol.32, pp.293~311.

[8]Nam, S. (2008), “Exploring service dimensions: From an American and Korean banking case” The Academy of Korea Customer Satisfaction Management, Vol.10 No.3, pp.129~145.

endprint

Perceived air service quality by the customer has been suggested as the main factor in sustaining an advantage in a strong competitive environment. An airlines competitive advantages are determined by the passengers perception of service quality. Research has demonstrated that the service provided is one of the foremost reasons for choosing an airline. Moreover, according to numerous airline research studies, airline service quality has an influence on service differentiation, passenger perceived value, passenger satisfaction, airline choice, and passenger behavioral intention. Consistent with previous studies, an airline which gives passengers superior quality service as compared to the perceived airline service from competitors would be a market leader (Prayag, 2007).

4. Customer Satisfaction

Customer satisfaction is understood as a consumers perceived value received from a product or service provider during his/her transactional or on-going relationships (Heskett, Sasser, & Schlesingler, 1997). Researchers defined customer satisfaction as a consumers state of being as a result of consumption experience.

Customer satisfaction can be understood as either an outcome or a process (Yi, 1990). Oliver (1997) theorizes customer satisfaction as a static concept, which is a cognitive and an affective response obtained through a current transaction or current consumption experience. His disconfirmation theory explains how consumers evaluate variables influencing consumers satisfaction. According to Olivers disconfirmation theory (Oliver, 1980), a customers satisfaction can be described as the result of a product comparison from his/her set of standards (expectation or other norm of performance) with the product performance. If the performance exceeds the standards or expectations, then increase in satisfaction is expected. And if the performance is less than the standards (expectations), decrease in satisfaction is expected. Positive or negative disconfirmation results when perceived performance deviates from the standards. Disconfirmation is thus expected to affect consumers satisfaction.

In this theory, consumer satisfaction is hypothesized primarily as a function of disconfirmation. On the other hand, the process oriented customer satisfaction examines whether the whole processes of consumption experiences achieves an expected result or not. It looks at the entire consumption processes and finds a specific process that might lead to customer satisfaction. This approach seems to draw more attention to the perceptual, evaluative, and psychological processes that combine to generate customer satisfaction (Yi, 1990, P70).

References：

[1]Brady, M.K. & Cronin, J.J. (2001), “Some new thoughts on conceptualizing perceived service quality: A hierarchical approach” Journal of Marketing, Vol.65 No.3, pp.34~49.

[2]Cronin, J.J. & Taylor, S.A. (1992), “Measuring service quality: A re-examination and extension” Journal of Marketing, Vol.56, pp.55~68.

[3]Field, A. (2005), “Discovering Statistics Using SPSS (2nd Edition)”, London; Thousand Oaks, CA; New Delhi: Sage.

[4]Hair, J.F., Black, B., Babin, B., Anderson, R.E., & Tatham, R.M. (2005), “Multivariate Data Analysis, 6th edition”, Prentice-Hall.

[5]Johnson, M.D. & Gustafsson, A. (2000), “Improving customer satisfaction, loyalty, and profit” SanFrancisco, CA: Jossery-Bass.

[6]Kim, Y., Kim, Y., & Lee, Y. (2011), “Perceived Service Quality for South Korean Domestic Airlines” Total Quality Management, Vol.22 No.10, pp.1041~1056.

[7]Lam, S.Y., Shankar, V., Erramilli, M.K., & Murthy B. (2004), “Customer value, satisfaction, loyalty, and switching costs: An illustration from business-to-business service context”Academy of Marketing Science. Journal, Vol.32, pp.293~311.

[8]Nam, S. (2008), “Exploring service dimensions: From an American and Korean banking case” The Academy of Korea Customer Satisfaction Management, Vol.10 No.3, pp.129~145.

endprint