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CUSTOMER DELIGHT: KEY WORD IN AIRLINE INDUSTRY

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  • Navinchandra Mehta Institute of Technology and Development

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Purpose: A need has arrived for the airline industry to go beyond offering price discounts, tour packages and air miles to enhance customer experience. The research paper attempts to gain insight in how different customer delight strategies can be implemented by the airline industry to survive in the highly competitive global market'. Currently airline industry's customization is starting and ending at the booking platform (mobile/app/website/travel agent) and food preferences. As a result of advent in information, technology and communication customers are hoarded with public relations and marketing messages', social media advertisements and continuous repetitive mails. Time has come to go beyond the customer expectations and delight the tech savvy customers with the unexpected service excellence to gain and retain customer loyalty. Methodology: For this purpose a survey was carried out among customers who are frequent flyers of airlines in Mumbai catering to domestic and international domain. Primary data was collected by means of semi-structured interviews and a questionnaire. Secondary data was collected by means of various published paper and electronic sources. The sampling method used was convenience sampling. Research methodology used is explanatory research. The data was collected and analysed in order to understand if gap exists between customer expectations and perception (Parasuraman, 1988; Chenet et al., 2000, Rizzo et al., 1970) of services delivered by the frontline personnel of the airline industry and to further find out on the strategies that can be implemented for customer delight. Results: The findings revealed that gap exists between customer expectation and customer perception of service delivered by the frontline personnel in the airline industry. The implications of the study also reveal that for customer delight, employee delight (Heskett et al., 2003) is essential as employees are the one's who control the emotional responses of the customers. (Kahn, 1964; Suprenant and Solomon, 1987)
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NCRD’s Business Review : e-Journal, Volume 2, Issue 2 (Jan-Dec 2016) ISSN: 2455-0264
http://ncrdsims.edu.in/businessreview.php Page 1
CUSTOMER DELIGHT: KEY WORD IN AIRLINE INDUSTRY
Prof. Kasturi Naik
Assistant Professor
Mumbai University‘s DES NMITD;
SCSVMV University
Prof. Renuka Savant
Assistant Professor
Mumbai University‘s DES NMITD;
Pacific University
ABSTRACT
Purpose: A need has arrived for the airline industry to go beyond offering price discounts, tour
packages and air miles to enhance customer experience. The research paper attempts to gain
insight in how different customer delight strategies can be implemented by the airline industry to
survive in the highly competitive global market’. Currently airline industry’s customization is
starting and ending at the booking platform (mobile/app/website/travel agent) and food
preferences. As a result of advent in information, technology and communication customers are
hoarded with public relations and marketing messages’, social media advertisements and
continuous repetitive mails. Time has come to go beyond the customer expectations and delight
the tech savvy customers with the unexpected service excellence to gain and retain customer
loyalty.
Methodology: For this purpose a survey was carried out among customers who are frequent
flyers of airlines in Mumbai catering to domestic and international domain. Primary data was
collected by means of semi-structured interviews and a questionnaire. Secondary data was
collected by means of various published paper and electronic sources. The sampling method
used was convenience sampling. Research methodology used is explanatory research. The data
was collected and analysed in order to understand if gap exists between customer expectations
and perception (Parasuraman, 1988; Chenet et al., 2000, Rizzo et al., 1970) of services delivered
by the frontline personnel of the airline industry and to further find out on the strategies that can
be implemented for customer delight.
Results: The findings revealed that gap exists between customer expectation and customer
perception of service delivered by the frontline personnel in the airline industry. The
implications of the study also reveal that for customer delight, employee delight (Heskett et al.,
2003) is essential as employees are the one’s who control the emotional responses of the
customers. (Kahn, 1964; Suprenant and Solomon, 1987)
Keywords: Airline Industry, Frontline Employee, Customer Delight, Emotional Responses,
Customer Perception.
1. INTRODUCTION
Experts point out that continued high growth in an industry can be an issue because it strains
systems and governance processes that needs time to mature and to be institutionalized. The
airline industry constitutes the fastest growing industry in India and is facing the above
mentioned problem (Bailey et al. 1985)
Airline Industry is likely to be the next big thing for services in this decade. The industry is very
diverse, with several sub-segments, each displaying its own unique characteristics. The airline
industry players need to be excellent in every facet of operations as the market is highly
competitive at every level and re-defining itself every day. It is mainly service oriented industry
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so employees especially frontline personnel who do have influence on customers flying decision
are the key people to its success.
The scenario however, is not as rosy as it looks, for this sector with enormous potential. Like any
other industry during its growth phase, this industry is also going through its share of turbulence.
Nowa-days the main USP of any industry especially service industry goes beyond customer
satisfaction to customer delight. When it comes to services how a customer perceives the service
effectiveness i.e. gap between expected & perceived service quality will affect satisfaction &
retention level of customers. Customer delight does not include only delivering the desired
product or service it also includes how the product or service is delivered along with the after
sales service provided.
The research paper attempts to gain insight in how different customer delight strategies can be
implemented by the airline industry to survive in the highly competitive global market‘ with the
focus on how frontline personnel can contribute towards the provision of customer delight
parameter.
2. BRIEF SURVEY OF LITERATURE
2.1 Service Quality
Service quality is explained in general as the level to which a particular service matches with the
customer expectations or desires (Lewis and Mitchell, 1990; Dotchin and Oakland, 1994a;
Asubonteng et al., 1996; Wisniewski and Donnelly, 1996). Service quality is thus quantified by
measuring the gap between customer expectations of service and customer perceptions of
service. (Parasuraman et al. 1985).
2.1.1. Model of Service Quality Gaps
The service quality gap model contributed by Parasuraman et al., 1985; Curry, 1999; Luk and
Layton, 2002 identifies 7 gaps with respect to service quality. The gap model is one of the best
models in the services literature (Brown and Bond, 1995). The seven gaps identified in the
service quality concept, are briefed in Figure 2.
Gap1: Customers’ expectations versus management perceptions: gap existing as a result of
lack of proper upward communication, structure and marketing research orientation.
Gap2: Management perceptions versus service specifications: gap existing as a result of
improper quality control with respect to services
Gap3: Service specifications versus service delivery: gap existing as a result of presence of job
role stressors lack of teamwork, employee job fit and technology job -fit, along with improper
supervisory control mechanisms.
Gap4: Service delivery versus external communication: gap existing as a result of improper
communication among the same levels in the organization and under-delivering.
Gap5: The discrepancy between customer expectations and their perceptions of the service
delivered: gap existing as a result of the difference between what customers feel service
providers should provide i.e. customers expectation and what customers perceive service
providers actually provide i.e. customer perception.
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Gap6: The discrepancy between customer expectations and employees’ perceptions: gap
arising when the frontline service providers are not able to understand what customer‘s
expectations are.
Gap7: The discrepancy between employee’s perceptions and management perceptions: gap
arising when the managers and the service providers are not able to understand what customer‘s
expectations are.
Figure 2.1: Model of Service quality gaps (Parasuraman et. al., 1985; Curry, 1999; Luk &
Layton, 2002)
The first six gaps (Gap 1, Gap 2, Gap 3, Gap 4, Gap 6 and Gap 7) are viewed as functions of the
way in which service is delivered, whereas Gap 5 relates to the customer and as such is
considered to be the actual measure of service quality. The SERVQUAL model used in research
paper applies to Gap 5.
2.1.2. SERVQUAL Model
One service quality measurement model that has been applied widely is the SERVQUAL model
developed by Parasuraman et al . (1985, 1986); Zeithaml et al. (1990). It measures the service
quality i.e. service effectiveness by measuring the customers' expectations i.e. what customer
wants from a particular service provider before a service encounter and customers perceptions
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(what customer perceives he/she received) of the actual service delivered and then finding if
there is any significant gap between the two (Gronroos, 1982; Lewis and Booms, 1983;
Parasuraman et al. 1985).
The difference between customer expectations and customer perceptions is known as the gap
which is the measure of customers‘ perception of service quality as shown on figure 2.2 below:
Figure 2.2: Measuring Service effectiveness using SERVQUAL Model (Kumar et. al., 2009)
The customers‘ expectations are under the control of the service provider as depicted in figure
2.2. The gap 5 in the figure represents the difference between customers ‗expectations and
customers‘ perceptions which is referred to as the perceived service quality (Kumar et al., 2009,
p.214). This research under study focuses on the measurement of this gap, the difference
between airline industry customers‘ expectations and perceptions of service.
The SERVQUAL model has five generic dimensions as stated below (Van Iwaarden et al.,
2003):
(1) Tangibles: Physical facilities, equipment and appearance of personnel.
(2) Reliability: Ability to perform the promised service dependably and accurately.
(3) Responsiveness: Willingness to help customers and provide prompt service.
(4) Assurance (including competence, courtesy, credibility and security): Knowledge and
courtesy of employees and their ability to inspire trust and confidence.
(5) Empathy (including access, communication, understanding the customer): Caring and
individualized attention that the firm provides to its customers.
In the SERVQUAL instrument, 22 statements/attributes measure the performance across these
five dimensions, using a seven point likert scale taking into account both customer expectations
and perceptions (Gabbie and O'neill, 1996) . Customers‘ rate statements on service attribute in
terms of their expectations and the perceptions (Zeithaml & Bitner 2009). The level of service
quality is derived at by subtracting the average score obtained from the expectations section to
that obtained from the perceptions section (Weitz and Wessley, 2002). For the purpose of the
research under study modified version of SERVQUAL model with 15 attributes is used after
taken into consideration the suggestions for HR professionals and line managers in airline
industry.
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Parasuraman et al., (1988, p.17) states that expectation is perceived in different manner in both
satisfaction literature and service quality literature. In satisfaction literature, expectations are
considered as predictions by customers about the future i.e. what they think is likely to happen
during a particular transaction. On the other hand in service quality literature, customer
expectations means what customer wants or what customer feels the service provider should
offer. For this research service quality definition is taken into consideration.
Customer perception is framed on the encounter of the customers with organization. Even the
quality of service encounter in other firms can have impact on customer perception (Mersha,
1992). According to Zeithaml et al., 1990 customer‘s perception of service quality is formed on
the basis of the comparison of their expectations i.e. what customers feel service provider should
offer with the customer perception i.e. what the customer feels they actually experience.
2.3. Customer Delight
Customer delight is amazing a customer by exceeding his or her expectations and thus creating a
positive touching service experience. Customer delight generally leads to spread of positive word
of mouth. Customer delight have direct impact on sales and profitability of the organization as it
helps to provide a competitive advantage (Gross and Scott, 2004).In the past customer
satisfaction has been seen as a key performance indicator. Customer satisfaction measures the
extent to which the expectations of a customer are met as against their perception. However, it
has been revealed that mere customer satisfaction does not create brand loyalty nor does it
encourage positive word of mouth.
One of the important element which helps in creation of customer delight especially in service
industry like airline industry is the service encounter interaction between customers and the
frontline personnel. The interaction is the greatest source of opportunities to create delight as it
can be personalized and tailored to the specific needs and wishes of the customer (Seth et al.
2005). The front line personnel can astonish the customers by showing a sincere personal interest
in the customer, offer small attentions that might please or find a solution specific to particular
needs. Thus front-line personnel are able to develop a relationship between the customer and the
brand.
3. DATA & RESEARCH METHODOLOGY
For this purpose a survey was carried out among customers who are frequent flyers of airlines in
Mumbai catering to domestic and international domain. Primary data was collected by means of
semi-structured interviews and a questionnaire. Secondary data was collected by means of
various published paper and electronic sources. The sampling method used was convenience
sampling. Research methodology used is explanatory research. The data was collected and
analysed in order to understand if gap exists between customer expectations and perception
(Parasuraman, 1988; Chenet et al., 2000, Rizzo et al., 1970) of services delivered by the frontline
personnel of the airline industry and to further find out on the strategies that can be implemented
for customer delight.
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3.1 Research Design
The research design used is explanatory
Sr.
No.
Research
Questions
Research
Objective
Hypotheses
Questionnaire
1.
Do gap exist
between
customer
expectations
and customer
perception of
service
effectiveness
delivered by
frontline
employees?
To examine if
gap exist
between
customer
expectations
and customer
perception of
service
effectiveness
delivered by
frontline
personnel
Hypothesis 1
There is no gap
between
customer
expectation and
customer
perception of
service
effectiveness
A fifteen-item,
sevenpoint scale
that measures
customer
expectations &
customer perception
of service quality
Table 3.1: Research Methodology Flow
3.2. Sampling design
The basic purpose of sampling is extrapolation from the part to the whole—from ―the
sample‖ to ―the population.‖ (The population is also referred to as ―the universe.‖) There is an
immediate corollary: the sample must be chosen to fairly represent the population. Methods for
choosing samples are called ―designs.‖ There are 2 studies involved in this research
Study 1: Gap between customer expectation & customer perception of service effectiveness
For Study 1 following sampling design strategy is used:
A total of 1000 survey were received from the respondents who are the frequent flyers of the
airlines in Mumbai catering to domestic and international domain with a response rate of 50%.
The following equation is used to calculate the sample size (S):
The following equation is used to calculate the sample size (S):
S = [z2 p (1-p) /e2] (Yamane, 1967)
{s = the sample size
z = the number relating to the degree of confidence = 1.96
p = an estimate of the proportion of people falling into the group with respect to the population =
0.5 (maximum variability)
e = the proportion of error to be accepted = 0.05}
= [(1.96) (1.96) (0.5)(0.5)/(0.05)(0.05)]
= 385
Now it can also be seen from the pilot survey conducted that the response rate of the sample
selected is 50%, thus the final sample size will be calculated as follows:
Sample Size= 385*2
= 770
Thus for study 1 and study 2 the number of respondents should be at least 770. In this study the
number of respondents is 1000.
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4. DATA ANALYSIS AND INTERPRETATION
H1 : There is no gap between customer expectation and customer perception of service
effectiveness
4.1 Data Analysis and Interpretation
The findings of the analysis are presented next. Table 4.1 shows the results for the respondents‘
expectations and perceptions of service effectiveness factors delivered by frontline sales
personnel and also the service quality gap.
Attributes
Expectations
Perception
Gap
Mean
Mean
AMBIENCE
4.60
3.65
-0.95
EMPLOYEE APPEARANCE
4.79
3.78
-1.03
TIMELINESS
4.45
3.65
-0.80
PROBLEM SOLVING ATTITUDE
4.41
3.80
-0.61
EXTRA-ASSISTANCE
4.76
3.76
-1.00
PROMPT SERVICE
4.80
3.41
-1.39
INSTILLS TO CONFIDENCE & SAFETY
4.88
3.79
-1.09
ACCURACY OF SERVICE
4.55
3.68
-0.87
KNOWLEDGE OF PRODUCTS
4.60
3.88
-0.72
POLITENESS
4.59
4.23
-0.36
WILLINGNESS TO HELP CUSTOMERS
4.45
3.80
-0.65
MULTITASKING ATTITUDE
4.77
3.67
-1.10
EASE OF SERVICE
4.48
3.80
-0.68
CONSISTENT SERVICE
4.65
3.70
-0.95
AVAILABILITY OF STAFF
4.78
3.69
-1.09
Overall mean for 15 attributes
4.64
3.50
-1.14
Table 4.1: Gap Analysis between Customer expectations and perception using Mean Value analysis
Mean Value Analysis
A comparison of customers‘ perceptions of service effectiveness with their expectations is done
using the mean value analysis.
Customers‘ expectations and perceptions are measured on a 15 item, seven point Likert-type
scale, where the higher the score, the greater the expectation (perception) of service effectiveness
delivered by the frontline employees. The mean scores of customers‘ expectations ranged from
4.41 to 4.88. The highest expectations were regarding the behavior of the employees which
instills confidence and safety, followed by prompt service. Thus it can be seen that customers
expect the frontline personnel behavior to instill confidence and safety, which requires total
clarity about the product and services on the part of the employees. The next expectation
parameter is prompt service delivered by frontline personnel.
The mean scores of customers‘ perceptions ranged from 3.41 to 4.23. The lowest perception item
is ―prompt service‖ with a mean of 3.41, on the other hand the customer expectation of this item
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have mean of 4.23. On the other hand, customers‘ highest perception item is politeness with a
mean of 4.23. The overall mean score for service effectiveness perceptions items is 3.50.
According to the results in Table 4.1, customers‘ expectations are higher than their perceptions
of delivered service effectiveness. Thus, the SERVEFF gap is negative for all service
effectiveness attributes. The widest gap is for the item prompt service―, and the customer
expectation of this item is the highest. Finally, the overall SERVEFF gap is -1.14. These results
imply that service effectiveness delivered by the frontline personnel in the airline industry should
be improved, because all service effectiveness attributes were assessed below customers‘
expectations and now customers are not only focusing on their satisfaction but also focusing on
new key word ―Customer delight‖.
5. DISCUSSION & SUMMARY
The airline industry should manage customer expectations. The findings of the study have
revealed that there is gap between customers‘ expectation and perception of service effectiveness
delivered by frontline personnel in airline industry. Thus there is need bridge the gap for
improved customer satisfaction which will lead to customer retention and customer loyalty.
6. LIMITATION OF EMPIRICAL STUDY
This dissertation provides insight into both theoretical and managerial implications. However, as
is true with any study, the findings of this dissertation should be viewed with caution due to the
following limitations. The current study is limited by the length of the survey instrument and
confidentiality with respect to names of the customers from which data is obtained as per their
request.
7. DIRECTION FOR FUTURE RESEARCH
The findings of the study provide an insight into the customer expectations and customers
perception of service effectiveness delivered by the frontline personnel along with the gap that
exist between the two. This would provide a future scope of research with respect to the reasons
for existence of the gap and the means that can be implemented by the management to bridge the
gap depending on the reasons for the existence of the gap. A need has arrived for the airline
industry to go beyond offering price discounts, tour packages and air miles to enhance customer
experience. The research paper attempts to gain insight in how different customer delight
strategies can be implemented by the airline industry to survive in the highly competitive global
market‘. Currently airline industry‘s customization is starting and ending at the booking platform
(mobile/app/website/travel agent) and food preferences. As a result of advent in information,
technology and communication customers are hoarded with public relations and marketing
messages‘, social media advertisements and continuous repetitive mails. Time has come to go
beyond the customer expectations and delight the tech savvy customers with the unexpected
service excellence to gain and retain customer loyalty.
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Article
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As sales of store brands increase, retailers are shifting their store branding strategies by raising store brand prices, extending their store brand assortments to high-risk categories, and marketing store brands in high retail image formats. The purpose of the research is to explore the effects of these changes on consumers’ judgments of store brands. The conceptual framework is derived from pricing, prospect, and information processing theories. It is tested in two experiments. The study finds that consumers’ use of price information varies by decision-making context. In particular, price-based effects for store brands are moderated by the contextual factors of category risk and retail image.
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The use of a variety of measures of service quality in the private sector as critical indicators of both organizational performance and general customer satisfaction is widely accepted and has given rise to considerable empirical research. Organizations operating within the public sector-health care organizations, local government, police, emergency services, government agencies-have also come to realize that customer service and quality are critical strategic issues in the late 1990s. However, it is also widely recognized that such public sector organizations face particular difficulties in measuring service quality. In this article, the authors discuss the major issues public sector organizations need to address in their search for an adequate measure of service quality, assess the potential of the SERVQUAL instrument for the public sector and report on an application of the instrument to a public library service.