Factors Driving Loyalty in Airlines - Case Study Example

Factors Driving Loyalty in Airlines Name: Instruction: Factors Driving Loyalty in Airlines Introduction Loyalty in any business is considered as an important factor due to its association with customers to the business. It is the responsibility of every business to develop strategies that will not only drive customers towards essential gods and products, but also retain the customers in relations to their allegiance to the business. Some of the factors include quality of service or product and customer relations. Airline business is currently one of the upcoming sectors in the business world. This has been driven by among other factors an increase in the number of people that travel to different destinations. In addition, air travel is considered as the best alternative due to its effectiveness and efficiency in the transport industry. The main objective of this study is to conduct a literature review on the factors that drive loyalty in airlines and to provide recommendations on the possible stories that airlines can implement to ensure an improvement on the areas that attract and retain customers. Literature review Customer satisfaction Customer satisfaction has become an essential element in marketing theory. This is because the level of satisfaction is a determinant of future consumer purchases while at the same time driving customer loyalty within any business (Chen & Tseng, 2010). In the airline industry, customer satisfaction is determined by the evaluation conducted by the customer in terms of the perceived discrepancy between initial expectations and the actual performance after the service has been provided. Studies in the airline industry have provided an association between customer satisfaction and loyalty to the airlines (Park et al, 2006). It is important to note that this association can only be considered in the event that positive loyalty to an airline company is associated with its ability to enhance efficiency and effectiveness in the delivery of its services as a way of meeting customer expectations (Chou et al, 2005). The availability of service in a timely manner is also a major determinant of customer satisfaction. In marketing theory, customer satisfaction is considered as a marketing strategy as it will enable one customer to refer other potential customers to the business premises with an intention of ensuring that they experience similar satisfaction when accessing the services of a selected airline industry (Chen & Tseng, 2010). Marketing through satisfied customers is often an unintended outcome in marketing theory di to the complications associated with evaluating the degree of satisfaction in relation to that of the competitors (Chou et al 2011). It is the responsibility of the business to institute different measures that will ensure that customers are provided with the best services. This is a way of ensuring that the future comments of a customer about the business to potential customers will be advantageous to the business in terms of ensuring loyalty in terms of attracting and retaining customers (Cretu & Brodie, 2007). Quality of service Quality of service in the airline industry is critical in the development and the maintenance of a relationship between a business and its customers (Chou et al, 2011). This is because it has a significant effect on customer loyalty to service firms and customer satisfaction (Chen & Tseng, 2010). This means that the quality of service that an airline company provides to its customers is an essential determinant in success or failure of an airline company in the competitive market. In the process of determining customer loyalty to a brand, the quality of service is considered as a discrepancy between the perception of the consumer in terms of the services offered by one company and their expectations about other companies offering the same services (Park et al, 2006). Customers will conduct an evaluation on the best services and decide on which one to align themselves to while at the same time determining the company’s whose services that are supposed to avoid due to poor quality (Cretu & Brodie, 2007). The perception of customers towards the quality of an airline service is considered as a driver of customer satisfaction and brand loyalty. According to park et al (2006) the quality of services of an airline company highly influences the purchasing intentions of a customer. In addition, it also plays the role of a marketing strategy considering the likely intention that will recommend the airline to potential customers by means of perceived value and customer satisfaction. While agreeing with the role of airline service quality in enhancing brand loyalty, Chen and Hu (2012) provide more evidence by arguing that the quality of service has a direct impact on the brand loyalty since the choice by customers of one brand over another is based on the belief that the chosen brand provides better value. The perceived value of a customer is often inclusive of the differences between the benefits acquired and the cost incurred in obtaining and product or service (Park et al, 2006). The provision of superior high quality of service is linked to customer value. This is because high customer value has a positive effect on both the customers and airline employees (Nasution & Mavondo, 2008) as this is often linked with string customer orientation. This means that there is often an association between customer loyalty and customer satisfaction and hence a key determinant of purchase intention (An & Noh, 2008). It is however important to note that the provision of quality services to passengers may be necessary but not sufficient in retaining customers in an airline business since customers seek value as a combination of fares and quality (Chen & Tseng, 2010). Corporate image Corporate image is considered as an essential determinant to brand loyalty (Zins, 2001). There is often an association between perceived value and customer satisfaction (Kuo, Chang & Lai, 2008). This argument is supported by Forgas et al (2010) who argue that perceived value has a direct impact on customer loyalty. This is largely because perceived value is an essential factor in influencing customer choice of airline and customer loyalty to an airline brand. Corporate image is defined by brand image which has been recognized as an essential tenet of marketing research. This is not only because brand image plays a role as a foundation for tactical marketing mix in building long-term brand equity (Park et al, 2006). Corporate image is often defined in relation to the perception about the brand and the reflections of the brand associations in the memory of the customer. The main objective of the image in the airline industry is to ensure a revelation of a distinctive identity to ensure that an airline’s name, symbol and logo act as differentiating factors to airline’s brand from those of its competitors (Park et al, 2006). This means that the ability of a company to have to have a strong and positive corporate and brand image will help in strengthening the perceived quality as it also assist in the development of brand loyalty among potential and actual customers. Thus an airline firm that has a strong a corporate and brand image will have a strong perceived quality in terms of its services as this is essential in the development of the company’ brand loyalty (Cretu & Brodie, 2007). According to the signalling theory, a brand is often considered as a signal that symbolizes ta company’s past and present marketing stratagems (Cretu & Brodie, 2007). According to this theory, the amount of signal that a brand transmits into the minds of the customers is highly dependent on the clarity of the message that is to be communicated and the credibility of the product or service and the provider (Cretu & Brodie, 2007). This means that a strong signal will only be transmitted if in the past an airline company has been demonstrating a gradual improvement in the quality of service that it provides in addition, the strength of the signal will also be defied by the present situation of the airline in terms of the services it provides (Cretu & Brodie, 2007). It is important to note that is the brand image and the corporate image are good then this will help in sheltering the delivery of services from the perspective of the customer (An & Noh, 2009). Level of convenience Customer loyalty in airline industry is often driven by the ability of the company to ensure expediency in the provision of its services. This is largely defined by the structures instituted by an airline company in enabling the customers to easily acquire essential commodities in the airline industry such as engaging in booking airline services through the internet (Park et al, 2006). The ability of a company to institute such measures will drive more customers towards such a company considering that such services will be easy to access at the comfort of the customer (Back, 2005). Through a company’s website, an individual is able to access travelling prices, schedules, and the consumer rank choices based on their ideas on the best airlines to use for the purposes of convenient travelling (Anderson et al, 2004). It is important to note that an airline company that introduces an internet platform such as websites that are linked to other services in the hospitality industry will also be important in allowing customers to access additional services (Back, 2005). The ability of a company to respond to customer feedback in an effective manner is also definitive of the level of loyalty that customers will have towards the company (Park et al, 2006). Customer service is crucial in defining the position of a company in the airline market (An & Noh, 2009). It is important to note that customers prefer airline companies that handle their questions, ideas and suggestions concerning different matters. Through adequate and prompt response, an airline company ensures that its customers benefit from the existing structures (Anderson et al, 2004). Conclusion and recommendation A review of literature has demonstrated that there are several factors demonstrating the relationship between customer involvement and customer loyalty to an airline. Brand image has a positive relationship with customer satisfaction. This is largely because there is a perceived value in terms of the relationship between the position of the brand in the market and its ability to ensure customer satisfaction. There is also a significant relationship between customer loyalties to corporate image. There has been an indication of the existence of a link between the image of an airline, passenger satisfaction and the resultant customer loyalty. Other factors that are definitive of customer loyalty include the quality of service and the convenience of services. For an airline company to gain some form of competitive advantage, it is important to investigate the role and effects of image, as customers perceive it. In addition, airline companies must engage customers to acquire constant feedback considering that the satisfaction of customer demands is crucial in defining the loyalty levels of customers. This can also be facilitated by the ability of an airline company to institute measures in the market that earn it some advantages over other competitors in the market. References An, M., & Noh, Y. (2009). Airline customer satisfaction and loyalty: impact of in-flight service quality. Service Business, 3(3), 293-307. doi: 10.1007/s11628-009-0068-4 Anderson, E. W., Fornell, C., & Mazvancheryl, S. K. (2004). Customer satisfaction and shareholder value. Journal of Marketing,, 68(4), 172-185. Back, K.-J. (2005). The Effects of Image Congruence on Customers‟ Brand Loyalty in the Upper Middle-Class Hotel Industry. 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Relative attitudes and commitment in customer loyalty models: Some experiences in the commercial airline industry. International Journal of Service Industry Management, 12 (3), 269-294. doi: 10.1108/eum0000000005521 Read More