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Challenging in Delivering Quality Services: Balancing Customer Expectations and Perceptions in Airline Industry

Case Study: Norwegian Airline

Bachelor Thesis 2012 54 Pages

Business economics - Operations Research

Excerpt

Table of Contents

Introduction

Study framework

Significance of the study

Literature review.

Behavioural Consequences of Service Quality

SERVQUAL System.

Research Approach

Research Design

Scientific Approach in Relation to Service and Quality

Delimitations

Role of Various Parties during the Research

Sampling

Data analysis

Data Processing

Outline of the Data

Data Analysis

Discussion of Results

Marketing Implication

Restrictions

Conclusions

Appendices

Work cited

Introduction

Service quality has become a major determinant of business expansion in the last few decades. With that, research for the strategies to improve customer service in all the business has been seeking large shares in the annual business budgets. The business managements have also shown great concern over the customer service in various businesses, especially the airline services. In the last decades, various practitioners, managers and researchers as well as various lobby groups have vested to launch strong campaigns and researches aimed at improving customer service. Various improvements in customer service that have been noted include cost reduction, efficiency in speed and accuracy in customer service, increasing the rate of customer satisfaction, customer loyalty and profitability. Integrated researches have been carried out to dig deeper on what improved customer service should entail (Taneja, Driving airline business strategies through emerging technology, 2002).

Generally, such studies have concluded that customer service is at a better place if it addresses the needs of the customer to almost absolute level. In normal circumstances, such can be said to have failed since they have proved inapplicable to many worldwide business sectors. This study will add more knowledge to the current researches which haven’t studied the simplest and most applicable ways to implement favourable customer service. This paper however has given directions on how to explore and substantially modify the existing customer service in the airline sector which is highly sensitive and dependent on the nature of customer service. Improved customer service must recall the need of shifting the service from conventional personalised services to web services. From the researches done in almost all the areas of business, technology has been quoted as a vital priority in advancing and modifying customer service to the better than before(Relations, 2000). Technology has also been proposed as the most reliable form of advancing gathering of information and exchange of ideas between the businesses. Technology saves time, improves efficiency of customer service and improves communication among and within the organisation in the business industry.

Most of the researches already done with intent of improving customer service in airline services always try to address the strategies of expanding organisational marginal profit. But there have been huge loopholes in studies of enhancing service quality. Very little has been done by researchers to identify service quality loopholes or notify the business management about details and components of service quality in service delivery organisations. Obviously, management in all business organisations are fighting to understand what customer satisfaction has to take on board. The same occasion has to move hand in hand with increased profitability. Researches done have achieved in providing the factors which may yield proper customer service, but on the other side failing miserably in giving directions for airline customer service improvements(Gabbott, 1997).

Conceptual models have been used for a long time in research to demonstrate the existing relationship between salient variables, which are key components of a service delivering business. The system executes the prevailing situational events to cause decision making in a particular time of business operation. The model has proved to be helpful in that it enables organisational management in identifying quality problems and helping in planning for projects aimed at improving customer service quality. Good customer service improvement plans improve efficiency, profitability and overall performance of a business in a given period of time.

This study has tried to disclose the hints which most of the researches have left out in the investigation of various service quality improvements strategies in airline services. The primary goal of this study is creating a clear understanding of what airline services are and what service quality improvement would impact in the business trend for an organisation in the airline industry(Relations, 2000). The achievement of this goal will be achieved if it convinces the airline organisation management to understanding and enhancing the quality of the business service.

Today, globalisation and liberalisation are key factors affecting the economic trends of both developing and developed countries. Airline services have therefore, proved to be effective in almost every part of the world. Despite the widespread demand for airline services in the world, competition for service delivery has also risen to high levels. Various companies offering airline services have shifted from profit maximisation to maximising profit via improved customer service satisfaction. In the airline industry, the process business transaction has received less concern than the delivery of services in the business. This has been triggered by a strong competition in the airline industry, forcing many customers to make decisions based on nature of services offered by various airline service providers (Taylor & Christensen, 1998).

In the previously done research, various changes noted include the adjustment of business service delivery from horizontal process to vertical functional approach, enhanced information delivery between and within the business sector, process flexibility, efficiency and multiplicity of activities, improvement of employees working conditions and implementing competitive strategies to fight the competitors. Many of competitive strategies haven’t been defined and their changes are mostly left open and vulnerable to technological changes and adoption by the competitors. In any case, airline service delivery companies are investing much in boosting customer awareness than improving customer service. The case ends up in an embarrassing situation where the customers join and leave the company’s services at the same time(Relations, 2000).

Study framework

The field of service quality is a fundamental topic to discuss and study about. Various definitions have since been developed to address the routes service quality improvements can follow and their specific ways of assessment. Many researches have used different methodologies to compile information which reflect the nature of what airline service quality dictates and various recommendations. Such differentiated methodologies are directed by different perspectives taken by researchers in the field. This study will work to create an understanding of quality service delivery by determining the factors that are directly or indirectly related to airline service delivery (Ziegenfuss, 2007). Although most of the factors have been addressed in earlier researches, critical analysis hasn’t proven presence in their arguments. This study will explore hardly on the following fields’

- Factors that affect service quality either positively or negatively in the airline industry. Such factors may be determined by the company management’s ability to adopt current technology in service delivery and improvement of working condition.
- Variety of services in consideration and their suitability for the business. Some services might be quality improving but not necessary for customers in the airline industry.
- The ability of the services in favour of the changing customer numbers and their increased satisfaction demand. Different customers have different perceptions over services offered and there is need to meet the expectation of most of them, if the business is to maintain a continued customer range expansion and constant profitability rate (Akpolat, 2004).
- Give and define specific directions and strategies of improving customer service quality. The study will not only mention or explore possibilities in customer service quality improvement but also suggest assessed recommendations which are highly promising to deliver improved service quality to customer in the airline industry.
- Develop a formula for assessing and measuring customer satisfaction at any time of business transaction. If the business is able to realise the level of customer satisfaction, it is easy to plan on changes for improvement or maintain the same service quality(Relations, 2000)
- Identify and project on the future of the business in service delivery. The study will try to explore the nature of the services that would be in demand in future and what customers might expect from business. Airline industry has for the last decade being flocked by avalanches of customers following development and advancement in global trade. It is expected that such customer volumes will rapidly increase in the near future, demanding for more airline services. The same case is likely or will attract more firms into the industry, creating a stiff competition for airline service delivery. The study will also explore the necessary takes to be upheld to improve customer service. Such include infrastructure, resources and financial management to withstand the demand for quality service in the airline sector (Eaton, Globalization and human resource management in the airline industry, 2001).
- Airline sector must accommodate the use of IT and other forms of technology in communication and information transfer as a strategy to improving customer service quality. It will also explore various strategies that could improve the rate of adoption of technology within and between airline businesses (Abdelghany & Abdelghany, 2009).

Significance of the study

Following deregulation of policies in the airline sector, Norway have for the last few decades being able to experience an upsurge in private domestic airlines which offer services within and in the neighbourhood of the country. The flight industry has therefore, grown drastically, leading to an increase in competition for customer airline service. The situation has not only affected the quality of airline customer service but an increase in overall demand for such services. However, despite the recommendable rise in customer service, annual passenger volume has declined over the last decade, creating a great concern to airline entrepreneurs.

Following the decline, most of the airline companies have registered losses despite intensive researches being carried out to identify customer service improvement. Such researches have recommended various strategies to airline services which most of them have proved unsuccessful (Walsh, 2011). In many airline service delivery companies, quality service has been improved through far promotion, airlines joint ventures and introduction of Frequent Flyer Program. Despite many companies implementing these strategies, there has been no means of assessing the impact they cause to the business. No research has been conducted to propose integrated evaluation tools for measuring the effectiveness of such strategies. With this, the strategies end up being void and insignificant to the business.

In some companies, service quality improvement strategies have added more losses resulting to closure of their firms in the industry. Trying to assess the impacts of the strategies has also been another pressing issue to the airline companies. Since different companies have employed different functional characteristics of service and transparency regulations, it has been difficult for researchers to frame a common trend of strategy implementation and assessment of their impacts towards the business. Contents of service quality in different firms have been different, making it hard for researchers to harmonise a single recommendation for all firms to adopt in customer service improvement (Relations, 2000). According to International Air Transport Association, customer service can be improved at seat reservation, ticket selling, airport check-in, luggage delivery, services in the cabin and subsequent services from the company on arrivals.

From a passenger’s perspective, customer service quality is determined by the frequency of airline services. In contrary, the operator’s perspectives airline industry will have to pay more attention to safety, comfort, convenience, hospitality and accuracy in service delivery in order to ensure improved customer service quality (Ziegenfuss, 2007).

This study aims at revealing preferences of domestic passengers in order to create a comprehensive forum that addresses key factors which affect passengers’ choice for airlines. The study will explore on the already mentioned determinants of decision making among the passengers. Some of such critical factors include airline facilities, safety record of the company when in service, flight costs, cabin services which may include beverages and possible delay in the airports. Factors influencing the customer choice for airlines can further be divided into three categories; nature of the trip attributes of the travellers and airline reputations. If an airline has records of insecurity, prolonged delays, and poor inflight customer service is likely to miss customer consideration in the airline industry (Shaw, 2011).

In Norway, different types of customers have differing preferences determined by their daily businesses and flight intents. Some researchers have proposed implementation of market strategies in airline service provision. This is to address varying expectations of service quality among the customer. In general, most studies done to address airline customer service quality improvement understand the degree of customer satisfaction toward different service factors offered by different airline companies. However, such studies haven’t addressed the discrepancies among passengers with respect to the extent of satisfaction and the degree of care for each determining factor in the choice behaviour hasn’t been addressed at all, leaving a gap between customer service and customer service quality (Relations, 2000). This study intends to search for critical issues through a physical research on airliners (Relations, 2000).

A comprehensive passenger survey will be used to collect the data required to reflect the truth about the customer service and quality improvement strategies to be employed. The survey will focus basically on how passengers make their choices for various airliners and the key factors which guide them in making the choice for the airliners. In making a valid data, passengers with a similar destination are suitable in giving their views, which will address the differences in services offered by different airliners and customer choice on such services. After gathering the information, Importance Performance Analysis approach will be applied to perform an analysis of the information and reflect the degree of customer satisfaction and care for different customers offered by different airliners.

This study is aimed at providing guidance to airliners and potential airline investors in selecting customer service and strategies in improving customer service quality. In general, airline managers are to benefit from this study as it explores on various ways to improve services offered by their airline companies and offer comprehensive response to their customer expectations (Relations, 2000).

Literature review

In any business, service quality improvement is mandatory and has become to be unavoidable. But to many companies, it has been hard to work with a lot of attention to detail, forcing them to rely on the passion, consistency and affection for the work in achieving quality service to customers. From many researchers who have tried to rescue service delivering companies have identified various keys to achieving desirable quality service at work;(Headley, 1992). They include;

a) Catching the voice of the clients and surveying their desires observing the services offered. The first step in implementing service quality improvement is identifying where customer expectations are not met or opportunities for such improvements. Various customer satisfaction assessment methods should be applied in collecting and analysing the customer service and their satisfaction. Capturing on customers voice is customer risk management which needs to focus on various problems, weaknesses and customer losses. Such measures are aimed at improving customer service which may lead to a positive business response. However, customer risk management must remain within the goals of the business in profit making (Spina, Albrecht, Haislmaier, & Inc, 1986).

b) Paying attention to emergencies and other awful events which interrupt customers’ expectation. The voice of the customer should help the business in identifying the process deliverables in customer terms. The business must strategize the customer service delivery process in order to understand their roles and schedules in service delivery.

c) The customers need to be served with sincerity, passion and kindness. The employees obliged to attending to the customers must be trained on how to show passion for services they offer without discrimination or prejudice. In instances where attendants have low or compromised ethics, customers tend to shift form their services for alternative operators. The business must implement a chain of people-profit-service in service delivery process. For improved customer service quality, the attendants must be enduring and ready to offer real customer service with intents of creating success for the company in general.

However, achieving quality service improvement has been faced by many challenges. The most crucial problem emanates from the business leaders since most of them are not pathological about customer service. They do not have passionate believe that customer service has substantial effect on business performance (Taneja, Driving airline business strategies through emerging technology, 2002). With this, they do not see customer service as a differentiator between companies offering similar services. Some business philosophers have thus tried to formulate theories to guide such leaders. Mahatma Gandhi said that the customer is the king, and is therefore giving the operator and opportunity to serve him. But questions have hit everyone concerned about the businesses where companies behave like republicans instead of royalists. Business leaders are challenged to put the customers’ expectations in front and centre of their thinking to pursue short-term results while continuously aligning with technology and work processes (Headley, 1992). Business leaders have in many companies proven not to be customer-focused enough.

In June 5th 2012, a well renowned writer and a business consultant Kevin Skirtz wrote an article in CSM magazine about what all service delivering companies must ensure in achieving improved customer service quality. In the article, Skirtz argued that poor customer service from the airline is basically legendary. It has turned to be a cliché. When customers get great service, they feel like they have worn a lottery. But airline services have faced lots of challenges in ensuring quality service to their customers. Such challenges are raised by the obstacles which appear on the way to achieving such service qualities.

Many companies have tried to explore intensive ways to providing remarkable service to their customers, failing frequently. In many airline companies, management try choose to overcome the challenges and at the same time take care of the customers to win their choice in making flights. The problem has been the cost to maintain the service delivery consistently to the customers despite adamant market instability. Kevin argued that there are four key areas which can greatly see the company go through a successful customer service quality improvement. Despite that the areas sound quite common to almost every company offering services and in airline services especially, they need more concentration and great attention (Relations, 2000).

a) Connecting the management with the customers- customers should be given full access to the company’s management section. At no one time should the customers be limited from accessing the management service for consultation or clarifications. It has come to be realised that most companies fail miserable as a result of poor services offered by the junior staff without the knowledge of the management. Since the customers are not given access to the management, complaints and recommendations remain unattended to. In such instances, customers prefer shifting to other operators offering a similar service but who have an improved management-customer relation. At the same time, members of the management need to go down to customer service once in a while (Relations, 2000). During such periods, they should engage in dialogues with customers and gather information regarding their satisfaction by services offered and the degree to which the business has met their expectations. It has also been analysed that when the management take time with the customers, they feel recognised and many do not realise the time they have taken in delay time. So, senior staffs are recommended to surrender some time with the customers sitting at the waiting room for the flight start. Companies whose executive managers spend time with the customers chatting are said to have drawn more customers from the companies whose managerial staff are unknown to even the most frequent customers (Goodman, 2000). The management has been convinced to interact with customer serving employees and the customers themselves as they are the people who understand even the slightest changes in the business trend in the company. As the manager, it’s very hard to get the most appropriate information needed to improving customer service by just reading the reports and financial statements about the company (Relations, 2000).

b) Involving the frequent and experienced customers in setting up customer service standards- in the airline industry, the customer is the centre of the business. Therefore, the customers are placed in a better position to understand what they want and expect from the service delivery process. But involving customers in structuring customer service standards has proven to be quite tricky in many companies. This is because different customers have differing tastes for services offered and have different expectations from the business. The management should carefully use the employees to approach the customers and engage them in dialogues to discuss about the services they get from the company (Walsh, 2011). However, such consultative conversations should not involve phone calls, since some customers would get suspicious about your calls and not give the best information. In a rare case, the management can buy the customers coffee or lunch and entertain the dialogue between the employees and the customers. This is one of the methods that have proven best results from the customers rather than conducting surveys or issuing questionnaires to the customers. To improve the rate of customer honesty over the management, senior officials must be authentic with them. What the customers have proposed in the customer service standards must be followed to the letter towards a successful quality service improvement. However, the management is encouraged to plan and execute all its businesses it can within its mission in the industry, its resources and its context of its business. The company must be informed to do as the customers demand. Many companies have lost customer volumes as a result of disregarding their opinions about the services offered. Arrogance has been noted to be the main cause of downfall of many airliners who believe that customer service quality improvement only lies within the premises of corporate headquarters.

c) Friendly involvement of employees in planning and customer service standards implementation. -Although the customers will inform the management on what they want, employees help in figuring out how such standards can best be implemented. Employees are involved in daily company’s work and are fully familiar with what how thing s work during the customer service delivery (General, 2000). They know what works well and what doesn’t yield towards he company’s mission. They are always at the business wen market changes in various times of service delivery. Since airline business is absolutely in service delivery, employees are best placed witness the business trends at the very point where the business is producing revenue. So, all adjustments in the company must in favour of the point of revenue generation point. Since the employees are the personnel at the point of service, they can tell better what can help them perform better or meet customer expectation. At the same time, anything that undermines the function and efficiency of employees must be hardly questioned and possibly, eliminated from the system (Relations, 2000). So, gathering information from the customers about the service they want delivered without the employees might not refund well. Employees must be incorporated in the process of information gathering and structuring the standards of customer service and the most appropriate implementation strategies.

d) Prioritising an increase in achievement of customer expectation- the leaders are obliged to demonstrate priority for customer service in a business. Even if the employees are constantly hardworking and innovative in customer service quality improvement, support from the leadership remains a key determinant of business success. Rarely do businesses prosper without absolute support from the top leaders. The leaders are obliged to setting the tone and give executive directions for a company’s culture and norms. To achieve great service to every customer, the top leadership will naturally work extra hard to create a culture that yields such goals. In order to offer good high quality service, the top leadership must put it as a priority in the business plan. In airline service companies, there is no alternative to have the mission achieved without top leadership engagement. In the above discussed steps towards quality service delivery, the first three steps can never be left out in a business success plan (Institute, 2001).

Kearney (1986) became the first person to carry out service quality assessment from the airline customer perspectives. He covered this field in his dissertation work which ranged the number of issues which need to be addressed in achieving customer satisfaction in airline services. Most of the studies done to dig deeper into the airline services were mostly based on economic variables and pre-deregulation which were developed as service quality assessment tools in service delivering companies. The dissertation by Kearney examined service quality from industry-based economy and marketing strategies and explorative techniques. Many researchers and marketers have proven to be focused on their attention on customer evaluation of services in an attempt to seek ways of improving service quality. Service quality measure called SERVQUAL which states that the degree and direction of the gap between the customer expectations and perceptions of actual performance levels are key determinants in quality service improvement (Sultan & Simpson, 2000). For service quality, the following essentials are considered;

- Tangibles
- Reliability
- Responsiveness
- Assurance
- Empathy

In a proposal accepted and embraced by various researchers and marketers, perceived service quality is estimated by calculating the difference between expectations and perceptions of actual service performance (Eaton, Globalization and human resource management in the airline industry, 2001). SERVQUAL has been criticised for its poor reputations in validity and reliability. The number of institutions and businesses offering services is ballooning rapidly in the economy. Service offering business has turned to be equally very competitive. Therefore, participants have compelled the researchers to explore on the concepts behind quality service and constant improvement.

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Details

Pages
54
Year
2012
ISBN (eBook)
9783656605317
ISBN (Book)
9783656605331
File size
1 MB
Language
English
Catalog Number
v269412
Institution / College
King`s College London
Grade
A
Tags
challenging delivering quality services balancing customer expectations perceptions airline industry case study norwegian

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Title: Challenging in Delivering Quality Services: Balancing Customer Expectations and Perceptions in Airline Industry