Service Quality Affecting on Customer Satisfaction - Kowloon Shangri-La Hong Kong - Research Paper Example

An Analysis of Service Quality Affecting on Satisfaction: A Case Study of Kowloon Shangri-La Hong Kong Table of Contents Aim 3 Objectives 3 Introduction 3 Rationale 5 Scope of Study 5 Significance of the Study 6 Organization of the Study 6 The Concept: Service Quality 7 The Concept: Customer Satisfaction 7 Relationship between Service Quality and Customer Satisfaction 8 Service Quality in Hospitality Industry 8 Customer Satisfaction in Hospitality Industry 9 Relationship between Customer Satisfaction and Service Quality in Hospitality Industry 10 Theoretical Framework (SERVQUAL Model) 11 Synthesis Evaluation 13 Research Methodology 14 Research Design 14 Research Philosophy 14 Research Approach 15 Research Method 15 Research Strategy 16 Sampling 17 Data Collection 17 Research Tools 18 Data Processing and Analysis 19 Data Presentation 19 Limitations 20 Validity and Reliability 21 Time Management 21 22 Reference List 23 Bibliography 29 Aim To examine the relationship prevailing between Food & Beverage service quality and customer satisfaction in Kowloon Shangri-La Hong Kong Objectives To apply the literature theories related to SERVQUAL and customer satisfaction (Parasuraman, Zeithaml and Berry, 1994) To establish the levels of service quality provided in Food & Beverage department towards the customers To determine the levels of customer satisfaction related to service quality To analyses the relationship existing between service quality and customers’ satisfaction Introduction It is imperative for any business to focus on customer satisfaction as an immediate source of competitive advantage. Firms are now concentrating increasingly on the aspect of service quality because there is a growing consensus that a strong relationship exists between service quality and customer satisfaction. The purpose of this dissertation is to explore the relationship prevailing between food and beverage service quality and customer satisfaction in Kowloon Shangri-La Hong Kong, a five star hotel of the Shangri-La group to find out its relative strengths along with weaknesses. Kowloon Shangri-La is a Hong Kong based world class hotel. It is a part of the Shangri-La hotels and resorts. The Shangri-La group started its operations in Singapore in 1971. Kowloon Shangri-La opened its first hotel in 1981 on 17th June. The Kuok Group was the creator of the hotels, which initially put the administration under the Western International Hotels, but soon after the opening of Kowloon, the Kuok group took the management under its own wing. The popular destination of the hotel at Tsim Sha Tsui East has made it one of the most promising hotels in the hospitality industry of Hong Kong. The hotel offers an array of services to its valuable guests. It is committed to provide its guests with environment that is lavish while functional at the same time. Apart from leisure travellers, the hotel also offers numerous facilities for business travellers, which include hosting of events, business meetings along with social functions. The team of friendly staff members within the hotel is extensively involved in making the experience of the guests visiting the hotel special and unique. In addition, the hotel is committed to deliver excellent services to the guests that would linger in their memory for a long time. The hotel places customer services central to its operations. Every individual within the hotel is devoted to render their exceptional services where the guests can relish new experience and the versatile ambience offered by the hotel (Shangri-La International Hotel Management Ltd, 2014). According to the works of the researchers like Kundampully and Suhartan (2000), it has been found that customer satisfaction act as leading criteria for determining service quality in the hospitality industry. It can be argued that, the quality of food and service provided by hotels and restaurants for the price charged can act as a distinguishing factor that sets a particular hotel aside from its competitors. Rationale The key rationale for the study is to highlight the importance of food and beverage service quality in hotels, as this can act as a sustainable source of competitive advantage. Many customers have been found to revisit hotels based on good quality of food and beverages that they receive from a particular hotel (Sulek and Hensley, 2010). It has been observed in the research works of Ladhari (2009) that the dimensions of service quality are not universal and largely depends on the type of service that is being examined. This study is keen on exploring the dimensions of SERVQUAL that is most suitable for the Kowloon Shangri-La Hong Kong. Kowloon Shangri-La is selected for the study owing to the fact that the hospitality industry in Hong Kong is growing at a rapid pace. Besides the unprecedented growth in the hospitality industry of Hong Kong, the level of competition is also augmenting rapidly due to the penetration of the domestic hospitality industry by new and emerging hotels within and outside the country. Therefore, it is anticipated that the hotel managers of Kowloon Shangri-La will be benefitted with the relevant information derived from the study and will use to raise the level of customer satisfaction and to improve the service quality of the hotel. Scope of Study This study limits itself only to the aspects of service quality of Kowloon. The application of SERVQUAL dimensions designed by Parasuraman, Zeithaml and Berry (1994) to the hospitality industry is a rather difficult job, as different researchers have found different dimensions of service quality that are applicable for different hotels (Armstrong, et al., 1997). The study primarily focuses on evaluating the wide ranging services offered by the hotel and the degree to which customers are satisfied with the services offered by it in order to determine any possible gap. According to Parasuraman, Zeithaml and Berry (1994), there are five potential elements that lead customers to experience low service quality. These gaps include divergence in the ‘consumer expectation and management perception’, ‘management perception and service quality specification’, ‘service quality specification and service delivery’, ‘service delivery and external communication’ and ‘expected service and experienced service’ (Parasuraman, Zeithaml and Berry, 1994; Shahin, n.d.). This makes the generalization of results from this study a difficult job, as the results are based on the chosen organization only. Significance of the Study This paper can be helpful for the management working at Kowloon Shangri-La Hong Kong in terms of understanding the ways based on which they can improve their components of service quality to guarantee greater customer satisfaction. The paper aims to evaluate SERVQUAL five aspects pertaining to service quality in Kowloon, which include tangibles, reliability, responsiveness, assurance and empathy (Parasuraman, Zeithaml and Berry, 1994). Organization of the Study The remaining part of the study is organized into two main sections. The first section provides a comprehensive review of the literatures regarding the chosen topic. The second part of the paper deals with the methodology that has been undertaken in the research and the final section provides a clear description of the ethical issues faced by the researcher and the ways in which these have been resolved. The Concept: Service Quality Over the previous few decades, numerous definitions of service quality have emerged. The definition provided by Gronroos (1982 cited in Dabholkar, 1996) service quality can be described as the perception of customers regarding the difference persisting between expected service and perceived service. The definition provided by Parasuraman, Zeithaml and Berry (1985) had extended the definition provided by Gronroos to include three critical dimensions. They had described that service quality is more complex for a customer to examine as compared to goods quality and consumer expectations. Service quality is further been defined as an elusive concept, which is quite difficult to measure. Thus, exploring service quality in an in-depth manner plays a major role in shaping the way in which consumers demand service performance and customers evaluate service not only on the basis of service outcome but also based on service delivery process. The Concept: Customer Satisfaction Despite multiple attempts to define the concept of customer satisfaction, there still exists no singular definition of the term. According to the definition provided by Gundersen, Heide and Olsson (1996) customer satisfaction is “post consumption evaluative judgment concerning a specific product or service”. This definition implies that customer satisfaction is a process wherein the customers compare their pre-purchase expectations with the perception of performance after purchasing and consuming the product or service. If the performance falls below the expectations of the customer, then they turn out to be dissatisfied. In case of hotel industry, it has been found that customer satisfaction is largely related to the relationship that customers share with the front line staff (Cronin and Taylor, 1992). Relationship between Service Quality and Customer Satisfaction The relationship prevailing between service quality and customer satisfaction has certainly received massive attention in the works of the previous researchers. According to the research conducted by Oliver (1997), it has been found that service quality and customer satisfaction are highly correlated and service quality can be treated as an antecedent of customer satisfaction. A close inspection of the existing literature reveals that operationalization of customer satisfaction is a rather difficult concept (Butcher, 2005). The main problem lies in the fact that both service quality and customer satisfaction are multi-faceted concepts that need to be measured in multi-faceted scales (Taylor and Baker, 1994). Service Quality in Hospitality Industry A plethora of research has been conducted in the field of service quality and multiple dimensions of the topic have been identified over the years. In order to evaluate service quality in Kowloon, the study will focus on five dimensions of service quality framework namely tangibility, reliability, responsiveness, assurance and empathy. The concept of reliability is related to prompt delivery of service (Antony and Ghosh, 2004). It is important that the service provider takes care of the service delivery contracts for further exploring the areas such as pricing and addressing of grievances. The second dimension of responsiveness in SERVQUAL is related to the agreeability shown by the service providers in providing the services. Assurance dimension of SERVQUAL is related to the trust and confidence during the provision of service. Empathy on the other hand, is created to provide unique feeling to the customers and tangibility is related to the practicality of a specific product or service (Zeithaml and Bitner, 2003). The research will be conducted particularly focusing on hotel industry owing to numerous factors. Correspondingly, the hotel industry is ascertained to be growing rapidly coupled with steady investment flow both in domestic and international hotels to improve their performance. At the same time, customers are considered as the heart of the hotel industry. To that extent, without satisfying the customers, none hotels can survive profitably in the cut throttle competitive environment. Thus, managers of hotels across the world are exerting efforts to improve their service quality for attaining greater competitive position (Saleem and Raja, 2014). Customer Satisfaction in Hospitality Industry There are nine different theories of customer satisfaction that have been developed by researchers. These include expectancy disconfirmation, contrast, assimilation-contrast, attribution, generalized negativity, value-precept, equity, attribution and cognitive dissonance (Pizam and Ellis, 1999). The theories of customer satisfaction are being increasingly applied in the hospitality industry in areas of food and lodging. In short, it can be affirmed that the concept of customer satisfaction is literally a psychological concept, which is related to the pleasure that customer obtains after his expectations regarding a purchase are met. The research conducted by Cheung and Law (1998) revealed that performance of hotel employees must directly be incorporated in the SERVQAUL dimension of hotels, as hotel employees have a direct interaction with the customers who visit the hotels. Relationship between Customer Satisfaction and Service Quality in Hospitality Industry It is extremely important to formulate special meanings and measurements of both customer satisfaction and service quality. Researchers like Spreng, Mackenzie and Olshavsky (1996) have conducted empirical studies to find out that service quality is actually an antecedent of customer satisfaction and improvement in service quality is directly related to high customer loyalty. The concept of service quality has received widespread importance in food and beverage sector of the hotel industry. It has now been widely accepted that customers want to obtain the best return from the money that they spent on food and beverages and service delivery forms an integral aspect of customer satisfaction (Choi and Chu, 2001). The research conducted by Arizon (2010 cited in Crick and Spencer, 2011) is an insightful one that has reviewed the literature of more than 32 empirical studies to reach into the final conclusion. According to this research, it has been found that, service quality in food and beverage industry is largely related to the perception of values that customer have towards hotel management. Similarly, the research conducted by Babajide (2011 cited in Abukhalifeh and Som, 2012) has shown that, in case of food and beverage department of hotels, there are two important determinants of gaps in service quality. It has been shown that the gap between expectations of consumer and perception of management as well as the gap between specification of service quality and service delivery are factors that create gap in the perceived service quality in the respective department. Notably, it has been argued that the smaller the gap, better is the service quality as well as greater is the customer satisfaction. An empirical research conducted by Nield, Kozak and LeGrys, (2000) in Romanian hotels to find the most important determinants of service quality in food and beverage department revealed few interesting facts. Their study had conducted the perception of customer satisfaction and it was found to be widely different amongst three tourist groups under study. The main components of determinants of service quality was the value for money, the serving standard of food, number and variety of dishes, speed of service delivery and presentation of food. The use of SERVQAUL model has featured in the discussion to assess the factors that are relevant for food and beverage department of hotels (Jeong and Oh, 1998). Theoretical Framework (SERVQUAL Model) SERVQUAL Model, which developed by Parasuraman, A., Zeithaml, V. A. and Berry (1985) was mainly based on the perceptions and the expectations that customers have towards quality of services provided to them. The model developed by Parasuraman, A., Zeithaml, V. A. and Berry (1985) has become a popular scale for the measurement of service quality. In this model, the difference between expectations of service quality and the perceptions of service quality is used to measure the overall level of service quality that is provided to the customers. There are 22 items of service quality that are measured under five dimensions of reliability, tangibility, responsiveness, empathy and assurance. The framework that had been adopted by Brown and Bond (1995 cited in Atilgan, Akinci and Aksoy, 2003) can be used to understand the application of SERVQUAL model in the food and beverage sector. This framework had extended the original five dimensions model of Parasuram. This model identifies seven main gaps in the literature of service quality in food and beverages sector. The model uses six different scales to measure gap in the service delivery, namely difference between expectation of customer and perception of management, perceptions of management and specification of service, specifications of service versus delivery of service, delivery of service versus external communication, gap between perceptions of customers and that if employees and finally the gap between the perception of employees and perception of management. The seventh gap in the model was related to the concept of a customer, the way in which he/she evaluates the service and this is measured by the discrepancy existing between expectancy of customers and the perceptions of their service delivery. These gap models have been widely used in literature to comprehend the ways in which service quality can be measured (Dominici and Guzzo, 2010). A similar framework has also been used in the study that has been conducted by Kundampully and Suhartanto (2000) in which they have used the dimensions of SERVQUAL developed by Parasuram. This framework can be used by the researchers to capture both the dimensions of service delivery and customer satisfaction in Kowloon Shangri-La Hong Kong pertaining to food and beverage sector. Synthesis Evaluation The quality evaluation will be carried out by comparing the quality and perceptions profile of the respondents. From the above discussion, it appears that service quality is an important aspect of customer satisfaction. Researchers are of the view that the long-term growth of hospitality industry is largely driven by the aspect of customer satisfaction (Davis, et al., 2013). Notwithstanding, the increasing popularity of SERVQUAL model has also been subjected to a number of criticism. Contextually, the model is also criticized based on conceptual and operational ground. Besides, the model is criticized based on the fact that it generally takes into account the service delivery process while it fails to recognize outcomes of the services experienced. Despite these contentions and controversies, the model is argued as a reliable predictors of overall service quality. The quality of food and beverage in the hotels remains a formidable challenge in the hospitality industry to ensure customer satisfaction (Karatepe and Ekiz, 2004). Also, it has been observed that the aspects of service quality differ according to the type of study that is undertaken. The purpose of this dissertation is to explore the relationship persisting between food and beverage service quality and customer satisfaction in Kowloon Shangri-La Hong Kong exclusively, a five star hotel of the Shangri-La group to find out the relative strengths and weakness of the organization. This research aims to supplement the existing literature that has explored the aspect of service quality in food and beverage section of hospitality industry. The results obtained from the researches have shown considerable fluctuations depending on the sample of the study. Research Methodology Research Design The research is an explanatory study, as it aims to explain the process that will be observed in the due course of research. Explanatory study has the power to explain the important exploratory variables of the research that influence the dependent variables (McBurney and White, 2009). Explanatory research also helps to understand the cause and effect relationship prevailing between variables. Though the explanatory research design is used more in the context of quantitative research, it is also applied in a qualitative research. The application of exploratory research does not provide a solution or merely highlights the aspects surrounding the research issue or topic, rather, it provides reliable information that are relevant to comprehend about the issue or a particular situation (Monroe College, 2011). Research Philosophy It has been stated that describing the theoretical research philosophy provides the groundwork for the rest of the research. There are three types of research philosophies, namely positivism, interpretivism and realism. This research plans to use the philosophy of realism. The reason for using realism is that, it is a combination of both positivist and interpretevist stance (McDaniel and Gates, 1998). Adopting a research philosophy based on realism implies acceptance of the fact that natural and social sciences are different and pre-interpretation of social reality is possible. This is in line with the interpretivist stance. Realism also supports the idea of positivism in the sense that science must be supported by empirical evidences and this logic holds true even in the case of social objects. The application of research philosophy based on realism would facilitate in exploring and constructing ideas pertaining to service quality in Kowloon that is independent from any perceptions or theories held in general (McDaniel and Gates, 1998). Research Approach According to Saunders, Lewis and Thornhil (2012), there are two different types of research approaches that can be used namely inductive research and deductive research. Adopting the research approach largely depends on the type of research paradigm chosen by the researchers. This research plans to use a mixed research approach that is based on both inductive and deductive research. This approach is based on earlier theories and models. Nine theories of customer satisfaction, which include expectancy disconfirmation, contrast, assimilation-contrast, attribution, generalized negativity, value-precept, equity, attribution and cognitive dissonance, will be tested in this research. In a deductive research, the researchers initially develop a theoretical framework and then tests the same theories by using empirical observations collected during the research. On the other hand, in an inductive approach, the researchers develop a theory by observing the empirical data that is collected during the research. This research is deductive because the researcher plans to test the already existing theory that service quality is an important antecedent of customer satisfaction. The research is also inductive because analysis of the raw data may help to construct new theories. Research Method There are two main types of research methods that are widely used by researchers’ namely quantitative research and qualitative research. A qualitative research is largely based on the interpretive power of the researcher and focuses on understanding the mind-set of the respondents used in the research. Experiences of the candidates are explored in a qualitative research. Qualitative research is most suitable for an inductive stance. A quantitative research, on the other hand, focuses on the use of mathematical and statistical techniques to answer the research question. The qualitative research method is argued to be appropriate for exploring phenomenon and wherein hypotheses are required to be tested, the qualitative method is often rejected. Quantitative research has been found to be more suitable in case of a positivist stance. This research plans to use a mixed research method. Using a mixed method is applicable because the researcher has adopted a philosophy of realism. The application of mixed method also facilitates in exploring an in-depth understanding which cannot be determined either by the single use of qualitative or quantitative methods (Gratton and Jones, 2010). Research Strategy The research strategy that will be used in this study is case study. The use of case study as a research approach is compatible to an explanatory research design. Explanatory case studies can help in separating certain social factors in a real-life scenario and provides empirical validity to the existing explanations. Case studies have been identified as one of the ways to conduct a social science research. This research also uses surveys to collect primary data from the respondents and this approach is compatible with explanatory case study approach (Malhotra, Birks and Wills, 2012). Sampling This research plans to use convenience sampling for the purpose of conducting the research. Convenience sampling is essentially a non-probability method of sampling, as respondents are selected based on their vicinity to the researchers. Critics have described this method as simplistic, yet it has been widely used by researchers in case of pilot studies and is effective in finding market trends. Correspondingly, the sample recruited in this study included 100 customers who are visiting the Café Kool in Kowloon Shangri-La Hong Kong. The same size of 100 domestic and international respondents would be recruited in order to generalize the inferences drawn on the whole population. Data Collection This research intends to use a sample of 100 customers who are visiting the Café Kool in Kowloon Shangri-La Hong Kong. The sample will consist of both domestic and international respondents who are visiting the café. The sample will contain people belonging to the age group of 25-60. The semi structured questionnaire will be framed to address each research objectives. The people will be divided into four age brackets namely 25-30, 30-40, 40-50 and 50-60. Anyone who is visiting the café will be considered as a part of the sample study. Respondents will be duly communicated about the research objectives and those willing to withdraw their names will not be forced. Research Tools The Semi Structured Questionnaire The research tool, which is to be implemented in this research process, is semi-structured questionnaire. According to the researchers like Kotler (2011), it has been observed that in an ideal semi- structured questionnaire, there exist both open ended and close-ended questions. It is quite useful to collect a huge figure of diverse responses from the candidates. The researcher plans to use a semi-structured questionnaire because this will allow collection of both qualitative and quantitative data. The pilot study will be mainly conducted based on ten questionnaires in a local café by the researcher herself to identify the weaknesses in the same and modify them accordingly. Questionnaires will be distributed to randomly selected sample respondents in a local café. The pilot study will facilitate in detecting misleading questions and poor instruction prior to the main survey is conducted. It will also serve as a test for measuring the reliability of the questionnaire framed. The semi-structured questionnaires are to be distributed among the managers of the outlet of food and beverage segment. The managers will be asked to distribute the data among the customers who are visiting the café. After two weeks, the researcher will obtain the data that has been collected by the managers from the customers. Data Processing and Analysis The mixed approach will be used to conduct this research, which signifies that both qualitative and quantitative data will be collected. In order to interpret the quantitative data, the concept of simple linear regression will be used. This will help in determining the relationship existing between service quality and customer satisfaction in a definitive manner. In addition, use of Cronbach’s alpha to test the internal consistency of the data will be duly considered. Cronbach’s alpha will be used, as this statistical technique is considered as the most convenient while at the same time, useful for comprehending the degree to which the ratings obtained from a group of respondents are analogous to measure a common dimension. The qualitative data can be represented by using descriptive statistics like pie chart and bar diagrams. The representation of qualitative data often take the form of numeric values thus, descriptive statistics such as pie chart and bar diagrams will facilitate in arranging the data in logical sequence. This will help in the pictorial representation of frequency count of the answers obtained. Judges The data will be interpreted by using SPSS software. The researcher will not use any form of video camera or recording instruments with the respondents as it might make the respondents comfortable. Data Presentation Data will be presented by using graphs and tables for easier understanding of the readers. The frequency count of the answers can be obtained easily represented by using descriptive statistics like pie chart and bar diagrams. This will help in the pictorial representation of the answers obtained. Representation of the data in the pictorial and table formats will be widely used to produce summarized results. Limitations There are three main limitations of this research. First, the sample size is relatively small, which would influence the reliability of the inferences drawn from the proposed research. Secondly, any biasness in the answer provided by the respondents would also reduce the validity and the reliability of the proposed research. Next, the study primarily focuses only on one of the organizations and eliminates others from the study. Thus, the generalization of the research conclusions to other hotels can be doubted as well. The first limitation can be improved by working on the size of the sample. It has been apparently observed that increasing the size of the sample helps in capturing the properties of the population in a better manner. The third limitation can be controlled by including more than one hotel that is similar to Kowloon Shangri-La Hong Kong so that it can help in the comparison of the type of the service quality that is expected on the part of the customers. Further research in the selected topic can be improved by increasing the size of the sample and focusing on both small and medium sized hotels in Hong Kong. It is however difficult to control the biasness of the answers, which makes it difficult to remove the third limitation. Respondents may produce biased answers and it will be difficult to obtain honest answers. The results obtained from the research are based on the small sample of Kowloon, which makes the interpretation of the results a bit restrictive. The small sample size may be unable to capture the characteristic of the entire population. Validity and Reliability There are two types of validity of a research namely internal and external validity. This research will be focused only on the aspect of internal validity only. Internal validity of a research allows checking whether the fluctuations in the dependent variables are caused only by making changes in the independent variables only. Cronbach’s alpha will be used to check the internal validity. Use of strong statistical tools and set the level of confidence ensures internal validity. The use of statistical software in interpreting the data and use of research triangulation will ensures that reliability check is followed meticulously. Time Management Time is an extremely important determinant influencing the validity and reliability of any research. Thus, time management is essential attribute for successful completion of the proposed research. In order to ensure the reliability of the proposed research, the research activities will be segregated into different time intervals. Therefore, the first week of the commencement of the research will be devoted for determining overall design of the study. Preparation of the questionnaire will be commenced in the second week and shall be continued till third week. The following fourth week will be devoted for conducting the survey. In the subsequent week or the fifth week, data will be collected from internet, journals, and government publications. The data collection process will be continued till the end of sixth week. Data obtained from the survey and the secondary sources will be analyzed for two weeks ranging from seventh week to eight week. In the ninth and the tenth week writing of the thesis will be commenced. This can be better understood with the help of the following tabular representation: Reference List Abukhalifeh, A. N. and Som, A. P. M., 2012. 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