The Influence of Sociocultural Factors on Service Quality Perception. A Christkindlesmarkt Nuremberg Study

Table of Contents

1. Introduction

2. Theoretical Background
2.1 Christkindlesmarkt Nuremberg
2.2 Consumer behavior
2.3 Service Quality
2.3.1 Definition
2.3.2 Measurements
2.4 Sociocultural factors
2.4.1 Socioculture
2.4.2 The factors region, gender, and age
2.5 Literature Review
2.5.1 The Influence of geographic background on service quality perception
2.5.2 The Influence of gender on service quality
2.5.3 The Influence of age on service quality
2.6 Research objectives and hypothesis

3. Method
3.1 Sample
3.1.1 Sampling procedure
3.1.2 Sample characteristics
3.2 Technique
3.2.1 Data collection
3.2.2 Data analysis

4. Results
4.1 Overall Service Quality perception
4.2 Hypotheses tests

5. Discussion
5.1 Interpretation of the results
5.2 Implications and recommendations
5.3 Limitations and implications for future research.

References

Appendix A: Questionnaire

Appendix B: Figures and Tables

Abstract

This thesis investigates the quality of service at the Christkindlesmarkt Nuremberg and reveals how the sociocultural factors region, gender, and age, influence the visitors’ perception of service quality.

The first part of this thesis reviews the existing literature on service quality and the influence of the selected sociocultural factors on perception of service quality. The subsequent empirical portion was conducted through personal interviews at the Christkindlesmarkt in November and December 2016. The final sample of interviews consisted of 800 responses and was compiled by using a combination of stratified and quota sampling.

The results provide support for using a two-dimensional model to measure service quality at the Christkindlesmarkt. The conclusion of the research is that these two dimensions differ in their relative influence on the overall perception. Additionally, the analysis of the collected data implicates an influence of selected sociocultural factors on service quality perception.

Based on the findings of the study, this work provides recommendations for improvement. The results of the study enhance the understanding about the service quality on the Christkindlesmarkt Nuremberg. Overall, the findings emphasize that when investigating service quality, considering variables pertaining to the individual characteristics of the visitors and the service itself is of major importance.

List of Tables

Table 1: Most frequently mentioned aspects for improvement

Table 2: Comparison of Service Quality Perception across regions: Mean scoresand Significance Levels

Table 3: Comparison of Service Quality Perception across Genders: Mean scores and Significance Levels

Table 4: Comparison of Service Quality Perception across Age Cohorts: Mean scores and Significance Levels

Table 5: Results of the multiple regression analysis

List of Figures

Figure 1: The five dimensions of service quality

Figure 2: Summary of the dimensions of service quality

Figure 3: The influence of intrinsic and extrinsic factors on overall perceived service quality

Figure 4: Research Model

Figure 5: Survey Locations

Figure 6: Regional distribution of CKM Visitors

Figure 7: Gender distribution of CKM Visitors

Figure 8: Aggregation of the age groups into the age cohorts

Figure 9: Distribution of sociocultural characteristics within the sample

Figure 10: Dependent and independent variables for ANOVA and allocation of service quality aspects to intrinsic and extrinsic factors

Figure 11: Overall rating of the service quality and the aspects

List of Abbreviations and Symbols

Abbildung in dieser Leseprobe nicht enthalten

1. Introduction

The Christkindlesmarkt Nuremberg is the most famous Christmas market in Germany and is one of the most famous landmarks of the city. Every year, more than two million people from all over the world visit the market. However, the competition among the German Christmas markets is increasing. The markets in eastern Germany are catching up and threating the supremacy of the Christkindlesmarkt Nuremberg.

The Christkindlesmarkt is a complex service comprised of several interdependent sub-services. Visitors to the Christkindlesmarkt, especially those who are not from Nuremberg or the metropolitan area, invest time and money to see the market and can only get intangible satisfaction in return (Moutinho, 1987: 5). The visitors’ final evaluations of service quality are strongly affected by their subjective expectations and experiences (Pikkemaat and Weiermair, 2001: 70). In consideration of the fierce competition, delivering high quality service that results in satisfied customers can give the Christkindlesmarkt a sustainable competitive advantage (Shemwell et al., 1998: 155). It is therefore vital for the operators of the market to be aware of the current perception of service quality.

Due to its importance for the success of businesses, service quality and the measurement of it are frequently studied in marketing literature (Kang and James, 2004: 266). While researchers disagree on the right instrument for measuring service quality perception, the understanding of service quality as a multidimensional construct is widely accepted (Kang and James, 2004: 266). This thesis aims to assess which instrument is appropriate for evaluating the service quality at the Christkindlesmarkt and appraise the market accordingly. This research assesses the relative influence of different service quality dimensions on overall satisfaction. Therefore, the research groups different aspects of service quality on the Christkindlesmarkt and their relative influence is computed by running a multiple regression analysis.

Sociocultural analysis facilitates meeting the needs shared by members of specific groups (Schiffman et al., 2008: 379). Another important aspect this research evaluates is how the service quality on the market is perceived by different groups of visitors. Understanding the different patterns can be a base for improvement. Thus, the respondents of the study are grouped into region, age, and gender and the differences in each groups’ service quality perception were tested on significance by means of analysis of variance (ANOVA).

The results of this thesis are beneficial for the Tourism- and Congress Centre Nuremberg (CTZ) as this information might explain why the Christkindlesmarkt’s position in the rankings has declined. The operators of the market can make customized offers to different customer segments if visitors from different sociocultural backgrounds vary in their evaluation of service quality and their needs and requirements. Additionally, understanding the interrelation of all the different aspects and their relative importance will help to enhance the various sub-services. Consequently, the results can help optimize the service quality at the Christkindlesmarkt, and thus, help the market to gain attractiveness.

This thesis is structured into four sections. The first section provides background information about the Christkindlesmarkt. The second section assesses the theoretical background of service quality, its measurement, and market segmentation as an aspect of consumer behavior. The third section reviews studies dealing with the influence of region, age, and gender on service quality perception. Subsequently, the methodology used to conduct the survey is explained and the findings are presented. The last section discusses the implications of the findings and recommendations for action.

2. Theoretical Background

First, the theoretical background provides background information about the Christkindlesmarkt and its history. Next, the text defines service quality and evaluates methods to measure it. Then, the research examines the role of consumer behavior in the tourism industry. Finally, this document discusses the segmentation of the market into sub-groups, i.e. socio-cultural groups as an aspect of consumer behavior.

2.1 Christkindlesmarkt Nuremberg

The Christkindlesmarkt Nuremberg is one of the oldest Christmas markets in Germany. Its long tradition is traced back to the 16th century. After losing its importance at the end of the 19th century, the Christkindlesmarkt had a revival in the 1930s. When the market moved back to the main market square in 1933, after having been in different locations in Nuremberg over time, it became a very romanticised pre-Christmas event. An actress dressed up as a Christmas Angel representing the famous “Christkind” for the first time and there was a big opening ceremony. The market did not take place during the Second World War and was reopened in the fully destroyed old town in 1948 (Tourismus-Zentrale Nürnberg, n.d.).

Today around 180 wooden stalls decorated with red and white cloth open every year during the Advent season. The famous Christkind opens the market with a prologue every year. The Christkind is played by a 16- to 19-year-old girl elected by the population of Nuremberg. The largest part of the market takes place on the main market square. In adjoining squares, the market of sister cities and the ‘Kinderweihnacht’ a part of the market aimed especially at children, take place. Among other things, sellers offer traditional products like handmade Christmas decorations and culinary treats (Tourismus-Zentrale Nürnberg, n.d.). The importance of tradition is omnipresent at the market and is a highlight for many tourists. Little dolls made from dried prunes called “Zwetschgenmännla,” Nuremberger gingerbread, and Nuremberger bratwurst are ever-present. The Christkindlesmarkt is the most famous Christmas market in Germany (handelsblatt.com, 2012) and even internationally well known. However, the market forfeited its position in Christmas-market-rankings over the last years. While in 2013 RP-Online honored the Christkindlesmarkt as the most beautiful German Christmas market, the Handelsblatt ranked it eighth in its 2016 ranking (handelsblatt.com, 2016). These rankings likely employ subjective criteria, which makes comparison difficult. Nevertheless, a downward trend is present and warrants a closer examination of possible reasons.

2.2 Consumer behavior

Solomon (2006: 6) defined consumer behavior as “the study of the processes involved when individuals or groups select, purchase, use or dispose of products, services, ideas or experiences to satisfy needs and desires.” The study of consumer behavior deals with what, why, when, and where consumers spend their resources (time, money, effort) on consumption of products or services. Furthermore, the study examines how the consumer evaluates the good or service after the purchase (Solomon, 2006: 6). Fulfilling customer needs is the basis for many companies and service providers. Understanding consumer behavior helps them to satisfy the needs of their customers (Solomon, 2006: 8) and is vital to understand so the company becomes and stays successful.

Although it is only a subtopic of overall consumer behavior research, the study of consumer behavior in the tourism industry is very comprehensive, and a detailed discussion would go beyond the scope of this thesis. It is important to keep in mind that the consumer behavior of tourists is of special nature (Moutinho, 1987: 5). Tourism is a service industry and services comprise unique features which will be discussed in section 2.3.1. Tourists invest time and money, mostly without receiving a tangible return. Instead they pay for intangible satisfaction. More travelers are becoming more sophisticated in their vacationing behavior (Moutinho, 1987: 5). Therefore, for service providers in the tourism industry, such as the operators of the Christkindlesmarkt Nuremberg, delivering high quality service is extremely important. Background information about service quality and methods to measure it will be discussed next.

2.3 Service Quality

Service quality is one of the most intensively studied concepts in marketing literature because it has a direct effect on customer satisfaction and can result in a sustainable competitive advantage (Shemwell et al., 1998: 155). Additionally, high service quality and corresponding high customer satisfaction increases sales and profits and positively influences customer loyalty and favorable word of mouth (Lal et al., 2014: 75). But, researchers disagree about the definition of service quality, which lies in their different approaches to measure service quality. Hereinafter, common methods to measure service quality are reviewed to choose the most appropriate method to evaluate the Christkindlesmarkt.

2.3.1 Definition

With his Expectancy-Disconfirmation Paradigm, Oliver (1980) laid an important foundation for the definition of service by assuming the perceived service quality results from the difference between consumers’ perceptions and expectations of a service. This difference can be either positive or negative and results in customer satisfaction or dissatisfaction respectively. Satisfaction occurs if the perceived performance matches or exceeds the anticipated performance, and dissatisfaction occurs if the perceived performance does not match or exceed the anticipated performance (cited in Yüksel and Yüksel, 2001: 108). Over the years, the EDP has become the most popular method in customer satisfaction research, which is strongly linked with service quality research (cited in Yüksel and Yüksel, 2001: 107). Lewis and Booms (1983) define service quality as “a measure of how well the service level delivered matches customer expectations. Delivering service quality means conforming to customer expectations on a consistent basis” (cited in Parasuraman et al., 1985: 42). Several other renowned researchers (e.g. Grönroos 1984, Parasuraman et. al. 1985, 1988, 1994) also refer to comparing expectations of service with actual service performance to define service quality.

While not all researches agree on a common definition, the special nature of providing services is widely acknowledged. Compared with goods, services cannot be evaluated by indicators like durability (Parasuraman et al., 1988: 13). In their exploratory work in 1985, Parasuraman et al. named three features unique to services, namely intangibility, heterogeneity, and inseparability of production and consumption (Parasuraman et al., 1985: 42).

Service encounter

The contact situation during which the service provider delivers the service to the customer is called “service encounter” in most service management literature. The phrase “moment of truth” is often used to describe the service encounter. This phrase emphasizes that the intangibility attribute makes the contact between service provider and customer especially important. Due its intangibility, a large range of the quality attributes of a service can only be evaluated during the service delivery process. Consequently, the service encounter is the moment when perception of quality happens.

Again, no common definition for service encounter exists, but the definitions can generally be classified into narrow and broad understandings. The narrow definition restricts the service encounter to the “dyadic interaction between a customer and a service provider” (Surprenant and Solomon, 1987: 87).

Shostack’s (1985: 243) broader definition describes a service encounter as a “period of time during which a consumer directly interacts with a service.” The broader definition acknowledges the importance of all aspects of service a customer may encounter. Other than the interaction with the staff, those aspects are the physical facilities, service systems, and other customers (Bernd Stauss and Paul Mang, 1999: 330). This thesis uses the latter, broader definition. The service encounter evaluated is a visit to the Christkindlesmarkt in Nuremberg and encompasses various aspects and subservices, such as contact with several sellers, the facilities on site, and the visitor traffic.

As service quality cannot be measured objectively, various researchers have developed a universally applicable model to measure service quality, some of which is discussed hereinafter. Based on this discussion, this thesis chooses the model most appropriate to measure service quality perception on the Christkindlesmarkt.

2.3.2 Measurements

Based on the Expectancy-Disconfirmation Paradigm, Christian Grönroos (1984) introduced a pioneering model to measure service quality (Ahlert and Evanschitzky, 2003: 251; Mels et al., 1997: 174). He based his model on the assumption that “[t]he service is basically immaterial and can be characterized as an activity where production and consumption to a considerable extent take place simultaneously. In the buyer-seller interactions the service is rendered to the consumer. Clearly, what happens in these interactions will have an impact on the perceived service” (Grönroos, 1984: 38). According to Grönroos (1984: 38-39) , the perceived service quality is influenced by two dimensions of quality, namely technical and functional quality.

The technical quality dimension refers to “what the consumer receives as a result of his interactions with the firm” and is merely the technical outcome of the production process. As examples of technical quality, Grönroos (1984: 38) uses the transport of a train passenger from one place to another or the meal a customer gets in a restaurant.

The functional quality dimension describes how the consumer receives the technical outcome. Various factors such as the appearance, behavior, and performance of the service employees influence how a customer will perceive a service. Even the presence or absence of other customers and their behavior can have a favorable or unfavorable impact.

While the functional dimension is perceived and evaluated very subjectively, technical quality can be measured in an objective way due to its problem solving character (Grönroos, 1984: 39). Moreover, Grönroos (1984: 39) suggests that in some cases, the functional quality has a stronger influence than the technical quality.

The perceived service quality is also influenced by the image, which Grönroos includes as a third dimension in his model. The image can influence the perceived service quality positively or negatively, depending on what mental picture a customer already has of a service provider (Grönroos, 1984: 39). Again, the author uses the example of a restaurant. Customers tend to find excuses for a waiter’s inappropriate behavior, if they believe it to be in a very good restaurant. Correspondingly, negative experiences may be perceived to be even worse when the customer already had a bad image. During several encounters with a service provider, the customer’s image can improve (or deteriorate) if his expectations are constantly surpassed (or not fulfilled). Moreover, traditional marketing activities are used to give promises to the customers. These promises lead to increasing expectations and thus, to an increasing discrepancy between the latter and the customer’s perception of the service if the expectations are not fulfilled (Grönroos, 1984: 39). To summarize Grönroos’ model: Perceived service quality results from comparing the expected service to the perceived service and is influenced by the three factors of technical quality, functional quality, and image. Lehtinen and Lehtinen introduced the dimensions of physical quality and process quality in 1982. These two dimensions are similar to what Grönroos defined as technical quality and physical quality, respectively (Asubonteng et al., 1996: 67). These early service quality models are referred to as the European perspective (Mels et al., 1997: 173).

Grönroos theoretical model served as important pillar for the empirical approach of Parasuraman, Zeithaml and Berry (Mels et al., 1997: 173). Their “SERVQUAL” model from 1988 became one of the most popular models to measure service quality. Parasuraman et al. (1985:47) relied on information from focus group interviews to identify the criteria most commonly used to assess service quality and grouped the criteria into originally 10 dimensions. In 1988, the researchers Parasuraman, Zeithaml, and Berry generated a 97-item scale representing various facets of the 10 dimensions. By means of factors analysis, they correlated the items and dimensions and discarded items that were not clearly related to a dimension. Furthermore, they found that five of the 10 dimensions were meaningless when removing items that strongly correlated with more than one factor (Parasuraman et al., 1988: 18–20).

The result was a 22-item-scale measuring the following five dimensions:

Figure 1: The five dimensions of service quality

Source: (Berry et al., 1990: 26)

As the SERVQUAL scale is founded on the expectancy-disconfirmation paradigm, the 22 questions (or items) are asked about customer’s expectation of the service and the perceived performance of the service, resulting in a 44-item questionnaire (Parasuraman et al., 1988: 18–20).

Critical review

While many researchers have used the SERVQUAL model over the years and it dominates the service quality literature, others have challenged the model on several grounds. Two aspects of the SERVQUAL model in particular are questioned by other researchers.

One frequent problem was that many researchers were unable to replicate the original SERVQUAL structure for their purposes (O’Neill and Palmer, 2003: 187). The non-generalizability of the five-factor structure across all industries is subject to substantial criticism. Others noted that the number of dimensions appropriate to evaluate the service quality across different industries ranges from one to eight (cited in O’Neill and Palmer, 2003: 189). In further research conducted in response to criticism from Cronin and Taylor (1992), Parasuraman et al. (1994) state that the dimensions of responsiveness, assurance, and empathy overlap and could blend into a single dimension (cited in O’Neill and Palmer, 2003: 189).

Furthermore, Carman (1990: 47) investigated the relevance of the expectations performance gap as the basis for measuring service quality. He concluded that measuring consumer’s expectations can be very difficult. Also, Carman found little evidence supporting the common assumption that the difference between expectation and perception should be analyzed. As mentioned by O’Neill and Palmer (2003: 187), several researchers questioned the point of measuring expectations of first time users. Moreover, the term “expectation” may be interpreted in different ways. When asked about their expectations, some consumers may interpret “expectation” as what should be the appropriate level of service quality. Others might think of it as what would be, meaning what level of service they expect the specific service provider is actually able to provide (Lal et al., 2014: 77). Cronin and Taylor (1992, 1994) conclude that a comparison between expectations and perceptions of performance is made subconsciously when evaluating a service and suggest to drop the expectations part of the scale.

Evidently, the service quality construct is extremely complex and cannot be defined in any one way for all service encounters. Even Parasuraman et al. (1994: 122) support the modification of their SERVQUAL instrument for different service settings. For this thesis, I developed a model that takes aspects of important service quality measurement models into consideration and combines them in a manner most appropriate to measure the perceived service quality of Christkindlesmarkt visitors.

The five dimensional structure of the SERVQUAL model is not applicable on the aspects of service quality intended to be measured at the Christkindlesmarkt. However, a two-dimensional concept, which is supported by the work of several authors including Lethinen and Lehtinen (1982) and Grönroos (1983), seems to be fitting. Parasuraman et al. (1985) proposed the use of two factors in one of their early works. To summarize the three models of the researchers mentioned above, Swartz and Brown (1989:190) suggested that the three dimensions (physical, technical, and outcome quality) defined by Lehtinen and Lehtinen (1982), Grönroos (1983), and Parasuraman et al. (1985) respectively can be summarized as “What” the service delivers and are evaluated after the performance.

Customers evaluate “How” the service is delivered during the delivery. This dimension is referred to as interactive, functional, or process quality by Lehtinen and Lehtinen, Grönroos, and Berry et al.

In 1997, Mels et al. developed a solution based on the SERVQUAL model, which further supported the two-dimensional concept. They proposed two factors, namely intrinsic service quality and extrinsic service quality. Intrinsic service quality resembles the factors that were summarized as “How” in Figure 2 and comprises a combination of Parasuraman et al.’s responsiveness, assurance, empathy, and reliability dimensions.

Abbildung in dieser Leseprobe nicht enthalten

Figure 2: Summary of the dimensions of service quality

Source: Own diagram based on Schwartz and Braun (1989: 190)

Extrinsic service quality portrays the tangible aspects during the service delivery process and resembles the “What” dimensions (Mels et al., 1997: 177; Yap and Sweeney, 2007: 138–139). The original SERVQUAL model only considered the “How” part of service delivery even though others researchers such as Grönroos (1984: 42) suggested that the “What” component is a very important dimension.

Many renowned researchers, including Parasuraman et. al (1985) and Grönroos (1983), have supported the assumption that service quality can be measured by using an expectations-performance-gap model. This thesis does not doubt this approach in general as it certainly holds true in numerous service encounters. However, for measuring the service quality perception of Christkindlesmarkt visitors a simple performance based measure of service quality is more appropriate.

Based on the literature discussed above, a performance only approach based on two-dimensions will be used for this thesis. At least five different terms exist for describing each of the two dimensions. While technical and physical quality do not intuitively depict what each dimension is comprised of, the terms intrinsic and extrinsic quality are more suited to do so and are adopted in this thesis.

Abbildung in dieser Leseprobe nicht enthalten

Figure 3: The influence of intrinsic and extrinsic factors on overall perceived service quality

Source: Own diagram

2.4 Sociocultural factors

In market segmentation, an important concept in consumer behavior, the market is “[divided] into distinct subsets of consumers with common needs or characteristics (…)” (Schiffman et al., 2008: 44). Different consumer segments have been found to vary regarding their decision making processes and formation of perceptions and attitudes (Lal et al., 2014: 75). Analyzing only selected market segments allows a comprehensive understanding of the segment and thus facilitates meeting the needs shared by its members (Schiffman et al., 2008: 379). A market can be segmented into the following nine categories: Geographic, demographic, psychological, psychographic, sociocultural, use-related, usage-situation, benefit segmentation and hybrid segmentation (Schiffman et al., 2008: 46). The sociocultural segmentation is most relevant for this work and will therefore be discussed in more detail.

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