Determinants of Customer Satisfaction in the Hotel Industry - Essay Example

Chapter 2 Literature Review 2 Introduction The purpose of this chapter is to review the existing literature on the theories and theoretical conceptsproposed by different scholars and researchers on customer satisfaction, customer loyalty and service quality. All of these are important in the hospitality sector. The different theoretical perspectives would help develop the framework for the study. Besides, review of prior studies help segregate what has been done from what needs to be done. It would also bring out discrepancies, if any, in different studies. Studies are relevant to particular period of study and the outcome may vary in different situations. This too can be ascertained as it would help understand the context of the study. Previous studies have been synthesized, criticized, analyzed and presented in a concise manner. The origins, history and the current trends in the hospitality sector in the UK have also been looked at in this chapter. Customer satisfaction depends on several variables in the hospitality sector which could range from location to the delivery of service by the staff. Hence the relevant factors leading to customer satisfaction in the hospitality sector have been discussed in this chapter. 2.5.1.1 Definition - Service quality While services are performances that cannot be seen, touched, tasted (Zeithaml, Parasuraman & Berry, 1985) or displayed and communicated (Zeithaml & Bitner, 2000) quality has been defined as the overall impression of the consumers of the relative inferiority and superiority of the services (Spathis, Petridou & Glaveli, 2004). This implies that service quality is a multi-dimensional concept that can mean differently to different people (Santos, 2002). Service quality is also a form of attitude that need not necessarily lead to satisfaction (Bolton & Drew, 1991; Parasuraman, Zeithaml & Berry, 1985). As per performance-based paradigm, service quality has been defined as “an attitude based on customers’ perceptions of performance (Nowark & Washburn, 1998) or perception of the service provided (Ismail, Haron, Ibrahim, Isa, 2006). Service quality is also considered an antecedent of customer satisfaction and customer satisfaction has higher influence over repeat purchase than services received. Service quality is thus a component of overall client satisfaction. Service quality has also been defined as a measure of the difference between customer expectations and the actual performance. It has also been defined as the judgment or the consumer’s global attitude of the excellence of service (Kangis & Voukelatos, 1997). Morgan (2007) argues that the process elements of the service quality are important in evaluating the service quality. This implies the interaction between the staff and the customer and how the customer receives the service determines the service quality. Customers evaluate the service by comparing their perception and the outcome with their initial expectation of service. This conforms to the definition of service quality by Lewis and Booms which states that service quality is “a measure of how well the service level delivered matches customer’s expectations” (McCormack, Neal & Triplett, 1994). Bell and Eisingerich (2007) define service quality by the two sub-dimensions of technical and functional service quality. These two terms essentially mean what other scholars have defined service quality in terms of the elements and the process. Thus, technical service quality refers to the quality of the service output while functional service quality refers to the nature of the interaction between the service provider and the customers, and the means by which the service is delivered. Further, service quality has been defined as a mixture of three elements – the quality of the consumption process, the quality of the outcomes of the process, and the image of the provider of the service (Grönroos, 2001 cited by Spathis, Petridou & Glaveli, 2004). Allred and Adams (2000) define service quality in terms of subjectivity, attitude and perception. Thus quality service must conform to customer expectations consistently. The definition of service quality can thus be surmised as a subjective experience in which the customer perception is based on the technical and functional dimensions. 2.8.1 Customer satisfaction – a post choice evaluation Customer satisfaction is a distinct construct that is influenced by two factors – experience and expectations with service performance (Ismail, Haron, Ibrahim, Isa, 2006). Past satisfaction impacts the decision to have a continuing relationship with the organization. Satisfaction and dissatisfaction has also been identified in terms of the disconfirmation of consumers’ expectations. Customer satisfaction has also been defined as the accumulated experience of a customer’s purchase and consumption experiences (Andreassen & Lindestad, 1998) cited by Ismail et al). The definition of customer satisfaction has been divided into two by Jeong and Lee (2010) – driven to outcome and driven to process. Customer satisfaction is the result of customer experience as the customer identifies whether the price paid for the service has been suitably rewarded. It is a comprehensive mental state that occurs when the emotion due to inconsistent expectation is combined with the emotion prior to the purchase experience. Ooi, Lin, Tang and Chong (2011) combine the definition of several scholars (Kotler et al, 1996; Fecíková et alm 2004; Lin et al, 2010) and define customer satisfaction as “as a person’s felt state, either pleasure or discontent, ensuing from comparing a product’s perceived performance (or outcome) in relation to the person’s expectations”. This emotional state results from customer’s interaction with the service provider over time (Wu, 2011). Wu cites Oliver’s definition which states that satisfaction is a cognitive comparison of expectations prior to consumption with the actual experience. Awan, Bukhari and Iqbal (2011) also agree that customer satisfaction is related to the size and direction of disconfirmation experience and disconfirmation experience is related to prior expectations. Customer satisfaction has been cited by Awan, Bukhari and Iqbal (2011) as [. . .] satisfaction is the consumer’s fulfillment response. It is a judgment that a product/service features, or the product or service itself, provided (or is providing) a pleasurable level of consumption-related fulfillment, including levels of under-or over fulfillment (Oliver, 1997). It has also been defined as a positive post-consumption evaluation which provides the customer with a “pleasurable level of consumption-related fulfillment” (Walsh, Evanschitzky & Wunderlich, 2008). Customer satisfaction has further been defined as "an overall evaluation based on the total purchase and consumption experience with a good or service over time" (Garbarino & Johnson, 1999). Customer satisfaction is the surprise the customer experiences after the purchase which influences his evaluation of service quality, future purchase intentions and behaviour (Bolton & Drew, 1991; Ismail et al, 2006). Customer satisfaction is related to the customer’s emotional and mental state when he receives the service delivery (Bick, Abratt & Möller, 2010). Customer Service has also been defined “as a post-choice evaluative judgment concerning a specific purchase selection” (Day 1984 cited by Salegna & Goodwin, 2005). 2.9.1 Customer Loyalty – repeated patronage Bell and Eisingerich (2007) define customer loyalty as the customer’s intent to stay with the organization, and their commitment to increase the depth and breadth of their relationship with the organization. The depth is measured in terms of increased transaction volume and breadth through increased breadth of products purchased. Loyalty has also been defined as frequency of repeat purchase or relative volume of same-brand purchasing. It is also the customer’s intent to favourably recommend the brand or company to others through word-of-mouth communication (Torres-Moraga, Vasquez-Parraga & Zamora-Gonzalez, 2008). Loyalty has further been viewed as an accumulation of experience accrued over multiple moments of truths (Balakrishnan, 2011). Kandampully and Suhartanto (2000) identify behavioural and attitudinal dimensions to customer loyalty. The behavioural dimension refers to customer’s behaviour in repeat purchases while the attitudinal dimension refers to the customer’s intention to repurchase and recommend. Bowen and Chen (2001) add the composite dimension which is a combination of the first two dimensions. Attitudinal loyalty has been defined in the perspective of a particular brand as it captures the affective and cognitive aspects of brand loyalty, such as brand preference and commitment (Pepe, Abratt & Dion, 2011). Customer loyalty has also been defined as a deeply held commitment to re-buy or re-patronise a product or service consistently in the future (Oliver, 1997 cited by Walsh, Evanschitzky & Wunderlich, 2008) thereby causing repetitive same-brand or same brand-set purchasing despite situational influences and marketing efforts having the potential to cause switching behaviour” (Oliver, 1997 cited by Donio’, Massari & Passiante, 2006). This situation would persist despite any situational influences and marketing efforts that might cause switching behaviour, which has been explained as “customers’ resistance to competitive offerings” by Torres-Moraga, Vasquez-Parraga and Zamora-Gonzalez (2008). Customer loyalty is an attitudinal commitment defined by Dick and Basu (1994) as “the strength of the relationship between an individual’s relative attitude towards an entity (brand, service, store, or vendor) and repeat patronage”. Customer loyalty is also viewed as a committed and affect-laden partnership between consumers and brands by Fournier (1998 cited by Donio’ et al). Customer loyalty has been further defined as ‘the feeling of attachment to or affection for a company’s people, products or services (Jones & Sasser, 1995 cited by Smith, 2000). Smith further (2000) cites Oliver (1999, p. 36) as elaborating that loyalty is a state when the customer fervently desires to re-buy a product or service and will have no other – pursuing this quest against all odds and at all costs. Arnold and Kristy (2000, cited by Smith, 2000) define loyalty as the state when the customer experiences repeat patronage, self stated retention, price insensitivity, resistance to counter persuasion, and the likelihood of spreading positive word of mouth. Chapter 3 Introduction Any research process is based on several factors which include the size of the sample, the time, the budget at hand and the purpose of the research. Research increase knowledge and hence it has to be a systematic and methodical process of enquiry and investigation (Amaratunga, Baldry, Sarshar & Newton, 2002). Research relies on facts, experiences, data, concepts and constructs. These concepts form a rational and symbolic system of inquiry. They even constitute the language of research thereby enabling the researcher clarity of expression. After explaining the different types of research approaches that are in practice, the justification for the chosen research method has been provided. This chapter also tabulates the difference between the quantitative and the qualitative methods of research which makes it easier for the researcher to select the research method. The instruments for collecting both primary and secondary data have been discussed in this chapter. 3.1 Aims and objectives The hospitality sector has been gaining importance due to globalization and is now an important business sector. This has also impact the academics and especially in the field of marketing customer satisfaction has been gaining importance. Consumer behaviour, lifestyle and demands undergo change on a daily basis and this poses a challenge to the hotel sector. Thus consumer satisfaction has been gaining importance. Consumer satisfaction is a post-purchase evaluation and hence it depends upon service delivery. An understanding of consumer behaviour and consumer perception of service in the UK hotel industry has become important. The hotel industry in Bournemouth has been gaining popularity because of its location as it is endowed with natural beauty. The purpose of this research is to determine what the drivers of customer satisfaction are in the hotel industry and how these could be optimally utilized in the Bournemouth hotel sector thereby leading to repeat purchase intentions (loyalty). Thus the phenomenon under study is the customer evaluation of the services received, the process of service delivery, the post-purchase emotions, the satisfaction and the dissatisfaction paradigm in the Bournemouth hotel industry. Not much of research is available on the subject in connection to the hotel industry in Bournemouth which enhances the importance of this research. An investigation into the hotel industry in the UK would help reveal the shortcomings in the Bournemouth hotel sector. The theories on service quality, customer satisfaction and loyalty would enable the researcher to develop the framework for the study. 3.5 Conclusion This chapter has evaluated the phenomenon, the different research approaches and methodology including the data collection instruments for both primary and secondary data. Since the purpose of the research is to evaluate and gain insight into the drivers of customer satisfaction in the Bournemouth hotel industry, an exploratory approach for this research was adopted. This approach was adopted as it helps to question and explore different phenomena with clarity. It also helps derive valuable relationship between variables. To analyse the situation quantitative approach was adopted as it helps measure attitude, satisfaction and commitment, which is the very purpose of this study. Besides, this approach is scientific in nature and it can prove or disprove theories. The research techniques adopted for the study are the survey and case study techniques. Surveys enable collection of large amount of data from a sizeable population at minimum cost. The case study method helps to conduct empirical investigation into a particular contemporary phenomenon and it is possible to cover a wide range of issues through this approach. Close-ended questionnaires were designed to collect primary data. The research has made the choices of approach as it was considered the best for the destination of Bournemouth. Population and sampling has not been discussed because the study focuses on Bournemouth. The findings have been presented and discussed in the next chapter after conducting extensive survey in large areas, in restaurants and pubs in the Bournemouth region. 4.8 Conclusion The rate of response to the survey questionnaire is considered very high for this study. The high rate of response also validates the data and the outcome can be said to be reliable. Overall the number of female respondents (53%) was more than the male respondents (47%). Male customers exceeded the number of female customers up to the age of 50 but after 50 more female customers frequented the hotel. In fact, with age the number of female visitors increased. Most (over 83%) respondents were well educated that had attended some university or college which suggests that the responses are authentic. Seven variables were incorporated in the survey questionnaire to ascertain the purpose of visit and location was found to be the prime reason (variable 0.368) that attracted the customers to this hotel under study. This can be arrived at because the maximum number of respondents came to the hotel on holiday. Besides, most were first-timers. The customers were only somewhat satisfied as the service quality variable was 0.101. The degree of satisfaction is ascertained after the service delivery and depending upon the degree of satisfaction re-purchase would be ascertained. In this case, most were first-timers and on holiday. Thus location appears to be the primary reason that brought customers to this hotel. The focus on the service delivery reveals that customers are satisfied with some services while not so satisfied with others. While there is improvement in politeness and courtesies, laundry and valet services have declined. Even the security at the hotel is not as per customer expectations. However, the customer experiences these only after the stay at the hotel begins. Most being first-timers, have no idea of the service quality or the security inefficiencies. They are attracted to the hotel because of the location as has been suggested due to the high variable. This conclusion is logically arrived at because it is expected that if service was taken as the primary criterion, many would not have returned due to perception of low service quality. References Allred, A.T., & Addams, H.L. (2000). Service quality at banks & credit unions. Managing Service Quality, vol. 10, no. 1, pp. 52-60 Amaratunga, D., Baldry, D., Sarshar, M., & Newton, R. (2002). Quantitative and Qualitative Research in the built environment: application of mixed research approach. 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