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The Factors Influencing Low-cost Airline Passenger Satisfaction and Loyalty in Bangkok, Thailand
Zhicheng Qin
http://eprints.utcc.ac.th/id/eprint/1326
University of the Thai Chamber of Commerce
EPrints UTCC http://eprints.utcc.ac.th/
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The Factors Influencing Low-Cost Airline Passenger Satisfaction
and Loyalty in Bangkok, Thailand
ZHICHENG QIN
A Thesis Submitted in Partial Fulfillment of the Requirements
For the Degree of Master of Business Administration
International College
University of the Thai Chamber of Commerce
2012
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ABSTRACT
In this research, we address the following questions that are becoming
increasingly important to managers in low-cost airline industries: is there a
relationship between marketing mix and service quality with customer satisfaction
and loyalty in the context of the Thailand low-cost airline industry? If yes, how is the
relationship between these four variables?
The low-cost airline industry in Thailand is one of the largest in the Asian country
and one of the fast growing globally. Loyalty is an important issue for the
sustainability of business of the companies. Relationships with the customers should
be built well in order to achieve their satisfaction and consequently loyalty.
Furthermore, the airlines sector has its own specific circumstances to be considered in
order to earn the customer satisfaction. In this study the service marketing mix and
service quality are the most important factors that affect the low-cost airline passenger
satisfaction and loyalty in Thailand. The concept of marketing mix divided into
product and service marketing mix. In this study would focus on the service
marketing mix. The service marketing mix consists of 7 Ps (Product, Price, Place,
Promotion, People, Physical Evidence, and Process). To measure functional quality
and perceived quality satisfaction in the low-costs airline industry, there are some
models. However, in this study, the proposed model was developed by the help of the
most popular and complete service quality measurement model of SERVQUAL.
Dissertation Title The Factors Influencing Low-cost Airline Passenger
Satisfaction and Loyalty in Bangkok, Thailand.
Name Zhicheng Qin
Degree Master of Business Administration
Major Field International Business
Thesis Advisor Dr. Piraphong Foosiri
Graduate Year 2012
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The population of the study is all of the low-cost airline passengers in Don
Mueang international airport. And the survey research will be through distributed
questionnaire to low-cost airline passenger in Don Mueang international airport to
collect data. After that use the multiple regression analysis to analysis the result and
examine the relationship among above factors. Results of the study show that there
are high positive correlation between the constructs of marketing mix and service
quality with customer satisfaction and loyalty. And the research also showed that (1)
the service marketing mix factors have partially affects low-cost airline passengers
satisfaction. (2) The service quality factors have partially affects low-cost airline
passengers satisfaction. (3) The service quality factors have partially affects low-cost
airline passengers loyalty. (4) The passengers satisfaction factor affects passengers
loyalty. Finally, Understanding customers responses to airline service quality and the
factor effect the low-cost airline passenger satisfaction and loyalty, airline managers
can gain a better understanding of how to improve their service offers to satisfy
customers and improve the customer loyalty. And the results of the study can be a
useful resource for future research.
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ACKNOWLEDGEMENTS
This thesis has been written for a Master of Master of Business Administration
Department of International Business. Many people have helped me during the
process to whom, I would like to extend my appreciation and regard.
First and foremost, I would like to express my deep and sincere gratitude to my
supervisor, Dr. Piraphong Foosiri, a respectable, responsible and resourceful scholar
who has provided me with valuable guidance in every stage of the writing of this
thesis.
I would like to express my sincere and appreciation to my committee members:
Dr. Pitsamorn Kilenthong, Dr. Li Li, Dr. Theeranuch Pusaksrikit, Dr. Saran
Ratanasithi. They gave me a lot of valuable suggestions and guidance for my thesis. I
would like to thank all my teachers who have helped me to develop the fundamental
and essential academic competence.
I wish to express my profound gratitude and thanks to my father and mother and
also my sister, for their love, affection, trust, support and encouragements throughout
my life.
Last but not least, I wish to give a special thanks to my friends for their great help
as well as encouragement. I would also like to thank all the participants who
contributed to my work. Completion of this research is impossible without their
participation.
Zhicheng Qin
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TABLE OF CONTENTS
Abstract .................................................................................................................. iv
Acknowledgements ................................................................................................ vi
Table of Contents .................................................................................................. vii
List of Tables .......................................................................................................... ix
List of Figures ......................................................................................................... x
Chapter 1 Introduction ........................................................................................... 1
Research Background ............................................................................................... 2
Problem Statement .................................................................................................... 4
Research Objectives ................................................................................................. 5
Research Questions ................................................................................................... 5
Expected Benefits ..................................................................................................... 6
Scope of Research .................................................................................................... 6
Operational Definition ............................................................................................... 6
Chapter 2 Literature Review ................................................................................. 9
Theories and Literature Review .............................................................................. 10
Conceptual Framework ............................................................................................ 23
Research Hypotheses .............................................................................................. 23
Chapter 3 Research Methodology ........................................................................ 25
Research Design ..................................................................................................... 26
Population and Sample ........................................................................................... 26
Variables of the Research ....................................................................................... 27
Research Instrumentation ........................................................................................ 27
Data Collection ....................................................................................................... 28
Data Analysis ......................................................................................................... 28
Reliability Analysis ................................................................................................ 29
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TABLE OF CONTENTS (Continued)
CHAPTER 4 Data Analysis and Results .............................................................. 32
The result of Customers Background Information .................................................. 33
Level of Agreement Analysis................................................................................... 38
Analysis and Results of Hypotheses ........................................................................ 40
Chapter 5 Conclusion and Discussion ................................................................... 47
Conclusion .............................................................................................................. 48
Discussion ............................................................................................................... 50
Implication of the Study .......................................................................................... 51
Limitation and Future Research ............................................................................... 53
REFERENCES ...................................................................................................... 54
APPENDICES ....................................................................................................... 69
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LIST OF TABLES
Table 3.7.1 Reliability Test Using Cronbachs alpha ................................................ 30
Table 4.1.1 Numbers and Percentage of Respondents by Characteristics .................. 33
Table 4.2.1 Level of agreement of marketing mix factors ......................................... 39
Table 4.2.2 Level of agreement of service quality factors ......................................... 39
Table 4.2.3 Level of agreement of customer satisfaction .......................................... 40
Table 4.2.4 Level of agreement of customer loyalty ................................................. 40
Table 4.3.1 Result of hypothesis the relationship between marketing mix factors and customer
satisfaction 41
Table 4.3.2 Result of hypothesis the relationship between marketing mix factors and customer
satisfaction ................................................................................................................ 41
Table 4.3.3 Result of hypothesis the relationship between service quality factors and
customer satisfaction ............................................................................................. 42
Table 4.3.4 Result of hypothesis the relationship between service quality factors and
customer satisfaction ............................................................................................. 43
Table 4.3.5 Result of hypothesis the relationship between service quality factors and
customer loyalty ..................................................................................................... 43
Table 4.3.6 Result of hypothesis the relationship between service quality factors and
customer loyalty .................................................................................................... 44
Table 4.3.7 Result of hypothesis the relationship between customer satisfaction factor
and customer loyalty ............................................................................................... 45
Table 4.3.8 Result of hypothesis the relationship between customer satisfaction factor
and customer loyalty ................................................................................................ 45
Table 4.3.9 Summary for all hypotheses .................................................................. 46
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LIST OF FIGURES
Figure 2.2.1 Conceptual framework ......................................................................2223
Figure 4.1.1 Survey participants profile by gender ................................................... 34
Figure 4.1.2 Survey participants profile by nationality ............................................. 35
Figure 4.1.3 Survey participants profile by education level ...................................... 35
Figure 4.1.4 Survey participants profile by occupation ............................................. 36
Figure 4.1.5 Survey participants profile by income status ........................................ 37
Figure 4.1.6 Survey participants profile by flight frequency ..................................... 37
Figure 4.1.7 Survey participants profile by airlines .................................................. 38
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CHAPTER 1
INTRODUCTION
This chapter focuses on the importance of the chosen subject and its different
aspects that are to be highlighted later on as the thesis proceeds. The area that will be
investigated is related to low-cost airlines, marketing mix, service quality, customer
satisfaction and customer loyalty. The background of the problem why this specific
subject has been chosen for the research study, Furthermore, the research problem and
the purpose with this study will also be presented in this chapter.
1.1 Research Background
1.2 Problem Statement
1.3 Research Objectives
1.4 Research Questions
1.5 Expected Benefits
1.6 Scope of Research
1.7 Operation Definition
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1.1 Research Background
Low Cost Airline (or Low Fare Airline or Budget Airline) is a new business model
in the airline industry. It was first introduced by Southwest Airline (SWA) in the
United States in 1971. The success of SWA led to the spread of the model to Europe
and then to Asia. LCAs compete by offering lower fares than those of full-service
airlines. To make up for revenue lost in decreased ticket prices, the airline may charge
for extras like food, priority boarding, seat allocating, and baggage etc. Most airlines
have only a single passenger class and usually feature the Airbus 320s or Boeing
737s in their fleet of aircraft. Efficiency is the major consideration in LCAs
operation and several strategies in cutting the cost down are employed.
The domestic airline business in Thailand has been shaken by six low cost airlines
(LCAs) since December 2003. One-Two Go, hold by Orient Thai Airline, was the first
airline operating as an LCA between Bangkok and Chiang Mai. After that, in
February 2004, the second LCA took off. Thai Air Asia, a joint venture between Air
Asia (Malaysia) and Shin Corp (Thailand), started the operation. Solar Air is a low-
cost airline with its head office in Bangkok, Thailand. Its base is in Don Mueang
International Airport. It was founded in 2004. Nok Air which is a subsidiary of Thai
Airways International was launched to the Thai sky. Happy Air Travellers Co.,Ltd.,
trading as Happy Air is an airline based in Thailand, offering scheduled domestic
passenger flights out of Suvarnabhumi Airport and Phuket International Airport, as
well as charter services. It was founded on April 3, 2009. Lastly, Thai Smile Air is an
airline in Thailand, operated by Thai Airways International that began operations in
July 2012. When the ASEAN Open Sky policy comes into force and airlines will be
free to set up operations in any country within the 10-member group in 2015. More
and more low-cost airlines company will come to Thailand. The policy is likely to
create greater competition and even more financial challenges for local airlines. Now
the low-costs airlines major issues hampering progress include rising fuel costs,
increasing competition particularly from low cost carriers and slowing economic
growth in Thailand.
During the process of economic and social development, the world today is
undergoing led economy from a manufacturing society to a service-oriented change.
With the formation of the service economic and social, the services sector is facing
tremendous competitive pressure. Each of the services and service management study
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of the item theory and practice are more and more researchers concerned about. The
Airlines is a typical service industry. With the continued development of the economy,
the domestic air transport companies facing competitive pressures. A large number of
foreign airlines into the domestic aviation market through direct or indirect way. Not
only faced with the invasion of foreign airlines, but also increasingly intense
competition among domestic airlines. The aviation market has already shifted from
the strength of the market to be buying power market. With the passenger groups
increasing, the consumer requirements showing diversity and the current situation of
oversupply, led the air transport traveler choices greatly increase. Domestic civil
aviation enterprises in the low level of competition for the "price war" Those
understand the real needs of the customer. Improve service quality and marketing
strategy for airlines to improve customer satisfaction and loyalty is an important part.
Marketing mix is the efforts made by management in order to synergize a number
of activities, such as services design, pricing, communication or promotion and
providing the serviceHartono, B. 2010). Low-cost Airlines, as a typical service
industry, is expected to apply the concept of the seven aspect of service marketing
mix to arrange proper marketing strategies. Thus, it could be competing in the
business world with priority services according to the needs of its customers.
Furthermore, the application of the concept of the seven Ps of service marketing mix
would be able to give satisfaction to the customer, allowing them to keep using the
service has been provided and not switch to another place. Satisfaction towards well
integrated service marketing mix is expected to affect the customer decision of a
patient for using the same service in time to come (Rafiq, M., & Ahmed, P. K. 1992).
The concept of marketing mix divided into product and service marketing mix. The
service marketing mix consists of 7 Ps (Product, Price, Place, Promotion, People,
Physical Evidence, Process) compared to the 4 Ps (Product, Price, Place, Promotion)
of a product marketing mix (Rafiq, M., & Ahmed, P. K. 1992).
Successful service quality strategies are generally characterized by customer
segmentation, customized service, guarantees, continuous customer feedback, and
comprehensive measurement of company performance. The experience in many
industries and companies demonstrates that this process, although generally
acknowledged, is not universally implemented. Market segmentations by customer
expectations, to create separate levels of service that exceed those levels of
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expectations, have also been found essential to attract customers and create customer
loyalty (Porter, 1985).
Customer Satisfaction is one of the most important processes in airline industry
and is recognized as key to the success of business competition which is the
individuals perception of the performance of the service in relation to expectations.
Customers have drastically different expectations and the objective of airline
marketing efforts in todays fast moving world is to maximize customer satisfaction.
For this reason, airline marketers offer more products and services than ever before.
In such a highly competitive environment, customer loyalty has become an
increasingly effective means for securing a firms profitability (e.g. Reichheld &
Sasser, 1990; Reinartz & Kumar, 2002). Customers are the driving force for profitable
growth and customer loyalty can lead to profitability (Hayes, 2008). For a customer,
loyalty is a positive attitude and behavior related to the level of re-purchasing
commitment to a brand in the future (Chu, 2009). Loyal customers are less likely to
switch to a competitor solely because of price, and they even make more purchases
than non-loyal customers (Bowen and Shoemaker, 2003). Loyal customers are also
considered to be the most important assets of a company (Blackton, 1995). It is thus
essential for vendors to keep loyal customers who will contribute long-term profit to
the business organizations (Tseng, 2007). Therefore, good managers should
understand that the road to growth runs through customers not only attracting new
customers, but also holding on existing customers, motivating them to spend more
and getting them to recommend products and services to the other people
(Keiningham et al., 2008). With the objective of fostering customer loyalty, airlines
introduced loyalty schemes in the 1980s and 1990s. These so-called frequent flyer
programs award customers for flights taken with the given airline.
1.2 Problem Statement
Aviation industry is one of the fastest growing industries in the world. Aviation
industry has contributed more than anything else to the increased commerce,
communications, trade, and tourism among the industries of the world. Beside this
growth todays airline industry are facing challenges like, fuel consumption , oil
prices , air-traffic, high competition, economy crisis , aviation emission , safety ,
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design and operational challenges.
In a highly competitive circumstance like the Low-Cost Airlines marketplace, how
to provide high quality service to satisfy passengers is the core competitive advantage
for an airlines profitability and sustained development. Previous studies in the
marketing field have pointed out that service quality is one main key to determine
corporate success (Lu and Ling, 2008). Under the conditions of this fierce competition
and how to improve customer satisfaction, thereby increasing customer loyalty has
become of any airline unavoidable marketing theme and the frequent flyer program is
an important part. Because according to relevant statistical research, to attract a new
customer is roughly equivalent to the cost of maintaining an existing old customers
five times, 20% old customers often bring 80% of the profits. In general, increases
profit and growth in many ways (Chow and Reed 1997; Heskett et al. 1994) to the
extent that increasing the percentage of loyal customers by as little as 5% can increase
profitability by as much as 30% to 85%, depending upon the industry
involved(Reichheld and Sasser 1990).
But now just only a few people to do the research about the passenger loyalty in
Thailand, especially the low-cost airline passenger loyalty. Therefore, this paper aim
to study the factor effect the low-cost airline passenger loyalty in Thailand to improve
service quality and marketing strategy for airlines to improve passenger satisfaction
and loyalty.
1.3 Research Objectives
1. To study the influence of the service marketing mix on customer satisfaction.
2. To study the influence of the service quality on customer satisfaction.
3. To study the influence of the service quality on customer loyalty.
4. To study the influence of the customer satisfaction on customer loyalty.
1.4 Research questions
1. How is the influence of the service marketing mix on customer satisfaction?
2. How is the influence of the service quality on customer satisfaction?
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3. How is the influence of the service quality on customer loyalty?
4. How is the influence of the customer satisfaction on customer loyalty?
1.5 Expected Benefits
1. The study would make the airlines more understand the factor influence the
low-cost airline passenger loyalty in Thailand.
2. The result of this study will help the airlines improve service quality and
marketing strategy to improve passenger satisfaction and loyalty. Then the airlines can
development more new customers and maintain the old customers.
3. The results of this study can be the reference for the other researches to
continue this area study.
1.6 Scope of Research
1. The population: The low-cost airline passenger in Bangkok, Thailand.
2. In this study, the three target low-cost airlines were decided by draw lots. These
three low-cost airlines are Airasia airline, Nok air and Orient Thai Airline.
3. The research area: this research is planned to study the marketing strategy in
service marketing mix relate to customer satisfaction, and study relationship among
the service quality, customer satisfaction and loyalty. And customer loyalty would be
behavioral perspective and attitudinal perspective.
1.7 Operation Definition
Customer loyalty is viewed as the strength of the relationship between an
individual's relative attitude and behavior. There are two dimensions to customer
loyalty: behavioral and attitudinal.
Behavioral is a customers behavior on repeat purchases and purchasing
frequency.
Attitudinal is customers attitude toward loyalty by measuring customer
preference, buying intention, supplier prioritization and recommendation willingness.
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Customer satisfaction is a judgment that a product or service feature, or the
product or service itself, provides a pleasurable level of consumption related
fulfillment including the level of under or over fulfillment
Service quality is defined as the overall assessment of a service by the customers.
Reliability: Ability to perform the service dependably and accurately. For
example the consistency in meeting service promises which could include keeping
schedules or appointment times
Responsiveness: Willingness to assist customers. This refers to the ability of the
service to respond to individual customer requirements such as specifying delivery
times, altering aspects of the delivery process, and ensuring that customers remain.
Assurance: This includes competence, courtesy, credibility and security. This
dimension would include staff training in the use of tools and knowledge of their
service processes, customer interaction, and the perception that the service is
competent and not going to harm anyone.
Empathy: This includes access, communication and understanding. This
composite dimension is really about the communication style of the service
organization through its service personnel, its communications including leaflets,
instructions, signage and people management
Tangibles: Appearance of physical facilities, equipment, and personnel. The
elements of the service environment impact upon perceived service quality for
instance cleanliness of premises, staff appearance and the appropriateness of things
like decor, seats and on board facilities.
Marketing mix is a business tool used in marketing. There are often synonymous
with the 7Ps: price, product, promotion, place, Personnel, Process and Physical
Evidence in service marketing
Product is anything that can be offered to a market for attention, acquisition, use,
or consumption that might satisfy a want or need.
Price is the amount of money charged for a product or service, or the total values
that consumers exchange for the benefits of having or using the product or service.
Place is a set of interdependent organizations that caters to the process of making
a product available to the consumers.
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Promotion is sales promotion, advertising, personal selling, public relations and
direct marketing.
Personnel are the service employees who produce and deliver the service.
Process is the implementation of action and function that increases value for
products with low cost and high advantage to customer and is more important for
service than for goods.
Physical Evidence is the environment in which the service and any tangible
goods that facilitate the performance and communication of the service are delivered.
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CHAPTER 2
LITERATURE REVIEW
This chapter provides the literature concern to marketing mix, service quality,
customer satisfaction and customer loyalty.
2.1 Theory and Literature Review
2.1.1 Marketing mix
2.1.2 Service quality
2.1.3 Customer satisfaction
2.1.4 Customer loyalty.
2.2 Conceptual Framework
2.3 Research Hypotheses.
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2.1 Theory and Literature Review
2.1.1 Marketing mix
Today customers are very demanding than ever and it is vital for managers to
understand how apply effectively the marketing strategies for assuring the enterprise
sustainability in the fast moving competitive market. It becomes the first
responsibility of the marketing manager to critically know how combine the
diversified components of the marketing that most of the time results in the
application of the marketing-mix. In any company, there is no way that they can deal
with the customer satisfaction without understand the element of marketing-mix and
to which extend they do affect the customer satisfaction. The way marketing-mix is
understood and applied contributes in increasing companys performance through the
satisfied customer.
Marketing mix is the efforts made by management in order to synergize a number
of activities, such as services design, pricing, communication or promotion and
providing the serviceHartono, B. 2010). Low-cost Airlines as a typical service
industry is expected to apply the concept of the seven aspect of service marketing mix
to arrange proper marketing strategies. Thus, it could be competing in the business
world with priority services according to the needs of its customers. Furthermore, the
application of the concept of the seven Ps of service marketing mix would be able to
give satisfaction to the customer, allowing them to keep using the service has been
provided and not switch to another place. Satisfaction towards well integrated service
marketing mix is expected to affect the customer decision of a passenger for using the
same service in time to come (Rafiq, M., & Ahmed, P. K. 1992). The concept of
marketing mix divided into product and service marketing mix. The traditional
marketing mix originated from the marketing of goods for consumer markets and
consists of the well-known 4Ps: Price, Promotion, Place, and Product. Various
researchers (Low & Tan, 1995:38; McDonald, De Chernatony & Harris, 2001:268;
Moorthi, 2002:259 and Zeithaml & Bitner, 2000:18) mentioned the fact that the four
Ps of marketing identified by McCarthy (1960:122) are not relevant for services
marketing, but that it has to be expanded to more Ps. Judd (1997) proposes the fifth
element as People and takes thereby the human resource factor into account. Booms
and Bitner (1981) on their part created 7P's by adding Participants, Physical Evidence
and Process to the original 4P's. Thus, the service marketing mix consists of 7 Ps
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(Product, Price, Place, Promotion, People, Physical Evidence, Process) compared to
the 4 Ps (Product, Price, Place, Promotion) of a product marketing mix (Rafiq, M., &
Ahmed, P. K. 1992).
A hugely popular marketing strategy is 4Ps which comprises product, price, place and
promotion (Kotler et al., 1999). However, low-cost airline industry is a typical service
marketing which is considerably different from product marketing. Because it is a
service, production and consumption take place at the same time. Kandampully
(2002) suggests that traditional 4Ps marketing mix cannot sufficiently satisfy the
requirements of the low-cost airline market. Therefore, he has decided to expand it as
7Ps marketing mix, comprising product, place, price, promotion, people, process and
physical evidence. These seven elements can be defined as follows:
A product as defined by Armstrong and Kotler (2006), is anything that can be
offered to a market for attention, acquisition, use, or consumption that might satisfy a
want or need. As for services, according to Hirankitti, Mechinda, and Manjing (2009)
the product offer in respect of services can be explained based in two components: (1)
The core service which represents the core benefit; (2) The secondary services which
represent both the tangible and augmented product levels. The latter can be best
understood in terms of the manner of delivery of the particular service. Ferrell (2005)
opines that the product is the core of the marketing mix strategy where retailers can
offer unique attributes that differentiates their product from their competitors.
According to Borden (1984) product is characterized by quality, design, features,
brand name and sizes
According to Kotler, Armstrong, Wong, and Saunders (2008), price is the amount
of money charged for a product or service, or the total values that consumers
exchange for the benefits of having or using the product or service. Due to the
intangible nature of services, price becomes a crucial quality indicator where other
information is not lacking or absent (Zeithaml, 1981). Price is considered as the most
important measurement of repurchase intentions (Oh, 2000; Parasuraman and Grewal,
2000). In deciding to return to the service provider, the customers normally think
whether or not they received their value for money (Zeithaml, 1988). It has been
proven therefore, that customers usually buy products on the basis of price rather than
other attributes (Peter & Donnely, 2007).
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The place factor is defined by Armstrong and Kotler (2006) as a set of
interdependent organizations that caters to the process of making a product available
to the consumers. Hirankitti et al., (2009) considers place as the ease of access which
potential customer associates to a service such as location and distribution. The
strategy of place needs effective distribution of the firms products among the
channels of marketing like wholesalers or retailers (Berman, 1996). An organization
should pay attention to place decisions, because of the importance of the product and
consumption occurring at the same time and at the same place; a place that provides
all information of customer, competition, promotion action, and marketing task. It
should pay attention to how it can deliver the product at the right time and at the right
place, and which channel should be used to deliver the product (Copley, 2004).
Promotion is defined as sales promotion, advertising, personal selling, public relations
and direct marketing (Borden, 1984) - A decision of how best to relate the product to
the target market and how to persuade them to buy it (Lovelock, Patterson and
Walker, 1998). A communication program is important in marketing strategies
because it plays three vital roles: providing needed information and advice,
persuading target customers of the merits of a specific product, and encouraging them
to take action at specific times (Lovelock and Wright, 2002). Activities that cater to
promotion are advertising, sales promotions, personal selling and publicity; they can
all influence consumers way of thinking, their emotions, their experience as well as
their purchasing. Communications should be devised by marketers in such a way that
it (1) offer consistent messages about their products and (2) are placed in media that
consumers in the target market are likely to use (Munusamy and Hoo, 2008).
Promotion is a selling technique; to succeed in any marketing program, it should be
involved with communication (promotion). Promotion is very important as it provides
information, advice, and it persuades the target market. It guides and teaches the
customer to take action at a specific time and how they can use the product and get
beneficial result from it. The product advertisement can be delivered by individual
sales people, T.V, radio, internet, magazine, press, and all types of media.
Personnel factor refers to the service employees who produce and deliver the
service. It has long been a fact that many services involve personal interactions
between customers and the site's employees, and they strongly influence the
customers perception of service quality (Hartline and Ferrell, 1996: Rust, Zahorik
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and Keiningham, 1996). Personnel are keys to the delivery of service to customers. In
addition, according to Magrath (1986) customers normally link the traits of service to
the firm they work for. Personnel are also considered as the key element in a customer
centered organization as well as a way to differentiate variables with product,
services, channel, and image (Kotler, 2000). Achievement of a customer-orientation is
not possible if there is no cooperation coming from the personnel (Judd, 2001). The
interaction is important because it influences customer perception. In other words, the
actions of all the personnel normally influence success of action and function of an
organization and with more communication, training, skills, learning, and advice they
will achieve to display the optimum value of the product and the company.
Process is generally defined as the implementation of action and function that
increases value for products with low cost and high advantage to customer and is
more important for service than for goods. According to Hirankitti et al., (2009) the
pace of the process as well as the skill of the service providers are clearly revealed to
the customer and it forms the basis of his or her satisfaction with the purchase.
Therefore, process management ensures the availability and consistence of quality. In
the face of simultaneous consumption and production of the process management,
balancing services demand with service supply is extremely difficult (Magrath, 1986).
The design and the implementation of product elements are crucial to the creation and
delivering of product.
Physical Evidence factor refers to the environment in which the service and any
tangible goods that facilitate the performance and communication of the service are
delivered. This holds great importance because the customer normally judges the
quality of the service provided through it (Rafiq & Ahmed, 1995). In addition,
according to Mittal and Baker (1998), this factor also refers to the environment in
which the services production is in. Similarly, Bitner (1990) adds that other visible
surroundings can affect the impressions perceived by the customers about service
quality. The components of the service experience are called the services-cape-that
is, the ambience, the background music, the comfort of the seating, and the physical
layout of the service facility, the appearance of the staff can greatly affect a
customers satisfaction with a service experience (Rust, Zahorik and Keiningham,
1996). The environmental dcor and design also significantly influence the customers
expectations of the service (Shostack, 1977). Services normally cannot be displayed,
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therefore firms should create a suitable environment to highlight the fact to the
customers (Rathmell, 1974).
2.1.2 Service quality
For a long time, the scholars at home and abroad have deeply researched the
relationship among the service quality, customer satisfaction and loyalty. The service
quality is a kind of general experience that the customers feeling for the service
provided by the enterprises.
In service quality literature the first model to measure service quality was
presented by Gronroos (1984). Gronroos (1984, p. 27) stated that a service is an
activity or series of activities of more or less intangible nature that normally, but not
necessarily, take place in interactions between the customer and service employees
and /or systems of the service provider which are provided as solutions to customer
problems.
Gronroos used a two-dimensional model to study the quality of service. The first
dimension was technical-quality, by which the outcome of service performance was
meant. The second dimension was functional-quality, meaning subjective
perceptions of how service is delivered. Functional quality reflects consumers
perceptions of their interactions with the service providers. The model of Gronroos
compares the two dimensions of service performance with the expectations of
customers. Groonroos general conclusion was that each single customer has its own
single perception of the quality of a service
A few years later, reserachers Parasuraman et al (1985) defined service quality as:
customer perceived service quality as a global judgment or attitude related to the
superiority of a service relative to competing offerings. Based on this
conceptualization they proposed a model for measuring the quality of services, which
is called the SERVQUAL model. Parasuraman and his research team tests develop
and refine a scale for measuring service quality as perceived by customers by five
dimensions led to SERVQUAL. The first and second parts of SERVQUAL measures
customers expectations and perceptions respectively along different kinds of service
attributes grouped into five dimensions; Parasuraman (2004) defines these five
dimensions as the following: reliability, responsiveness, assurance, empathic,
tangibility.
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15
Reliability: Ability to perform the service dependably and accurately. For example
the consistency in meeting service promises which could include keeping schedules or
appointment times, completing tasks on time, ensuring that outcomes are met
(Gabbott et al 2006, 189.) Reliability covers such things as being efficient in check-in
process, showing on time performance for scheduled flights and performing service
right the first time.
Responsiveness: Willingness to assist customers. This refers to the ability of the
service to respond to individual customer requirements such as specifying delivery
times, altering aspects of the delivery process, and ensuring that customers remain
involved (Gabbott et al 2006, 190.) When employees correct problems immediately
or when they show a willingness to answer customer questions related the flight, the
airline company is demonstrating its responsiveness to the customer.
Assurance: This includes competence, courtesy, credibility and security. This
dimension would include staff training in the use of tools and knowledge of their
service processes, customer interaction, and the perception that the service is
competent and not going to harm anyone. This has also been seen to include brand
names, and reputation (Gabbott et al 2006, 189.) Customers expect a lot from their
selected brand; like knowledgeable and skillful provision of services.
Empathy: This includes access, communication and understanding. This composite
dimension is really about the communication style of the service organization through
its service personnel, its communications including leaflets, instructions, signage and
people management (Gabbott et al 2006, 190.) Talking to customers in language they
can understand, and making an effort to understand the needs of the customers (Mill
2001, 151).
Tangibles: Appearance of physical facilities, equipment, and personnel. The elements
of the service environment impact upon perceived service quality for instance
cleanliness of premises, staff appearance and the appropriateness of things like decor,
seats and on board facilities.
The idea behind the SERVQUAL model (Parasuraman et al, 1988) is that a service
provider tests his service quality by using several statements about the five predictors
of service quality. Eventually possible gaps between expected and delivered service
quality could be identified. There are five possible gaps:
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16
Gap 1-between consumer expectation and management perception
Gap 2-between management perception and service quality specification
Gap 3-between service quality specification and service delivery
Gap 4-between service delivery and external communication
Gap 5-between expected service and experienced service
Recent studies confirm the findings of Parasuraman et al (1988). For example
Cavana et al (2007) and Zeithalm, Wilson and Bitner (2008) confirm the findings. In
the view of Ziethalm et al (2008) only without one exception, service quality is also
predicted by the convenience a customer experiences. Cavana et al (2007)
furthermore stated that conveniece and reliability do not have any significant
relationship with customer satisfaction, while responsiveness, assurance and empathy
have a strong relationship. Kao (2009) suggested that service quality and its
dimensions have a direct bearing on customers evaluation of an organization and the
intentions to choose the service provider. Lai (2004) stated that there is a significantly
positive relationship between the quality of the service and customer satisfaction, as
well as with future purchase intentions of customer.
Several researchers have attempted to apply the SERVQUAL scale developed by
Parasuraman et al. (1985)
Service Quality and Satisfaction for Low Cost Carriers were studied by Ariffin,
Salleh, Norzalita, and Asbudin (2010). The results revealed that caring and tangible
was the most important dimension of service quality for low cost carriers, followed by
reliability,responsiveness, affordability and visual attractiveness. However,
only caring and tangible dimension contribute significantly to the prediction of
satisfaction on the services of low cost carriers.
Passengers Views of Service Quality in Thai Low Cost Carriers were studied by
Somwang (2008) who found the expectations of Thai low cost carriers passengers on
service quality were higher than their perceptions.
Agarwal & Dey (2010) studied the perception of travellers for the six domestic
airlines in India. The perception of Malaysian consumers of the quality of airline
services was examined by Abdullah, Manaf, & Noor (2007) using the SERVQUAL
measurement. The results of the study indicate that the most significant factors in
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17
Malaysian customers perception of service quality are Empathy, Tangibles and
Assurance. In addition, the respondents indicated that the airlines surveyed performed
better than expected on the Responsiveness dimension of service quality.
Ling, Lin & Lu (2005) developed an instrument, based on the SERVQUAL
model, to gauge the characteristics of specific cross-strait routes, in order to measure
the service quality, perceived by travellers from Taiwan and Mainland China. The
results indicated that there were significant differences between the perceptions of
Taiwanese and Mainland Chinese travellers related to cross-strait airlines, in all
service attributes.
Huang (2010) sought to improve the understanding of air passengers decision-
making processes by testing a conceptual model that considers service value, airline
service quality, satisfaction, perceived sacrifice, and behavioural intentions. Two
modelling approaches were applied: the structural equation model (SEM) and the
importance-performance analysis (IPA). The SEM results of the study showed that the
service value is the major factor that can influence the behavioural intention. IPA
results indicated that responsiveness is the most important airline service quality
attribute for passengers.
Diggines (2010) conducted a research to gain an understanding of the perceptions
South African passengers have of the low-cost carrier model and the full-service
carrier model and establish how these perceptions relate to choice of airline when
deciding to fly.
Clemes, Gan, Kao, and Choong, (2008) conducted an empirical analysis of
customer satisfaction in international air travel. The study examined which
dimensions had a positive influence on service quality and which dimensions had the
most and least important impact on service quality in international air travel, as
perceived by airline passengers.
2.1.3 Customer Satisfaction
Customer satisfaction is viewed as an important research topic by both
practitioners and academics. From a managerial point of view, customer satisfaction is
the primary source of future revenue and is regarded as the key factor in winning
market share. In the academic field, customer satisfaction has been a popular topic
since the early 1960s, reflected by the constant growth of literature on customer
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18
satisfaction. Since satisfaction was introduced as a field of study, a considerable
number of studies have focused on this concept. This is because it is conceived as the
key to business success in todays competitive landscape.
In the contemporary global and highly competitive economy, it is fatal for a
business organization to be non-customer-oriented. Indeed to survive organizations
need to produce products and services of very good quality that yield highly satisfied
and loyal customers (Fecikova, 2004). For many years customer satisfaction has been
a major goal of business organizations, since it has been deemed to affect customer
retention and companies market share (Hansemark and Albinsson, 2004).
Traditionally, satisfied customers have been thought of as less price sensitive and less
influenced by competitors, buying additional products or services and staying loyal
longer (Zineldin, 2000).
Marketing literature has focus on improvement of customer satisfaction.
Satisfaction is defined by different studies in different ways. Customer satisfaction is
defined as overall affective response to a perceived discrepancy between prior
expectation and perceived performance after consumption (Oliver, 1980). Later,
Oliver (1981) also defined satisfaction as an emotional post-consumption response for
comparing expected and actual performance. Although satisfaction has been defined
as the difference between expectation and performance, but there are differences
between quality and satisfaction. Such as, Parasuraman et al. (1991) say that
satisfaction is a decision made after experience while quality is not the same. Fornell
(1992) defined satisfaction as an overall evaluation dependent on the total purchase
and consumption experience of the target product or service performance compared
with repurchase expectations over time. Rust and Oliver (1994) defined satisfaction as
the customers fulfillment response which is an evaluation as well as an emotion-
based response to a service. Customer satisfaction is determined by defining customer
perceptions of quality, expectations and preferences (Barsky, 1995, Ch. 2). Oliver
(1997, 1999) reviewed satisfaction as pleasurable fulfillment which is sensed by
customers in the consumption. It means that the consumer senses that consumption
fulfills some need, desire, goal, or so forth and that this fulfillment is pleasurable
(Oliver, 1999, p.34).Primarily referred to as a function of pre-travel expectations and
post travel experience (Reisinger and Turner, 2003). Customer satisfaction is defined
as a customers overall evaluation of the performance of an offering to date
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19
(Gustafsson, Johnson, and Roos, 2005). Chen (2008) defining customer satisfaction
stated that it pertains to a holistic evaluation after a service delivery experience, and
acts as a consequence of satisfaction with individual attributes. Wang, Zhang, Gu, and
Zhen (2009) defined tourist satisfaction as a feeling generated both by cognitive and
emotional aspects of tourism activities as well as an accumulated evaluation of
various components and features of the destination.
Satisfaction can be obtained because of what was expected. If the supply of a firm
were according to expectations of customers, they would be satisfied. The amount of
high and low satisfaction depends upon the level of supply that meets the level of
expectation or fall above/below to that level (Gerpott, Rams & Schindler, 2001).
Satisfaction of customer is used for indication of future possible revenue (Hauser,
Simester & Wernerfelt, 1994).Customer satisfaction is the necessary foundation for
the company to retain the existing customers (Guo, Xiao & Tang, 2009). The
customers who are unsatisfied with the received services would not be expected to
have long run relationships with the company (Lin & Wu, 2011). Poor services can
also cause to dissatisfaction. Like Inherently poor services or satisfactory level of
services, which cannot achieve customer, expectation may be cause of dissatisfaction
in customers (Rust & Zahorik, 1993). Variation in the quality and value of products
and services provided to customer creates variation in customer satisfaction and that
create variation in customer loyalty (Auh & Johnson, 2005). According to (Anderson,
1994) customer satisfaction is used to measure company performance at both
internally to compensate human resource, observe performance and assign funds as
well as for externally the satisfied customer is also source of information for all stake
holders ( customers, public policy makers competitors and investors).
For developing customer satisfaction, reliability in the providing of services and
commitment to service relationships a company must attempt to increase customers
future expectations (Lin & Wu, 2011). According to Rust and Zahorik (1993)
customer satisfaction has direct impact on loyalty. Auh and Johnson (2005) Argued
that there are strong relationships between satisfaction and loyalty. Similarly, Bodet
(2008) confirmed the relationship between customer satisfaction and customer loyalty.
Shankar, Smith and Rangaswamy (2003) also provide evidence that there is positively
relationship between satisfaction and loyalty. As Kim, Jeong, Park, Park, Kim, and
Kim (2007) stated that customer satisfaction has impact on customer loyalty. Vesel
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20
and Zabkar (2009) provide evidence that customer satisfaction is one of the
significant determinants of customer loyalty. Hallowell (1996) also support that
satisfaction and loyalty are related to one another. Satisfaction is traditionally
considered as an overall affective response resulting from the use of a product or
service (Oliver 1981). It is believed to have a direct influence on customer loyalty
(Mittal and Lassar, 1998; Oliver, 1997) and repurchase behaviors (Kumar, 2002;
Mittal and Kamakura, 2001). There also are many researchers agree on a direct effect
of satisfaction on loyalty but some other researchers have focused more on identifying
moderators or mediators of the effect of satisfaction on loyalty (Abdullah et al; 2000).
Bloemer and Lemmink (1992) examined the assumed positive influence of customer
satisfaction on loyalty in a car sales context.
On another hand, customer satisfaction articles several authors show empirical
evidence for the relationship of customer satisfaction with customer loyalty (Yu &
Dean, 2001; Heskett et al, 1997; Rauyruen et al, 2007). Henkel et al (2006) found that
customers who are satisfied with a service provided are intent to increase the usage
and purchase in future times. Parasuraman, Zeithalm and Berry (1988) and Naeem
and Saif (2009) found that customer satisfaction is the outcome of service quality and
several researches have been done on the relation between service quality and
satisfaction: findings of some of these researches show that satisfaction results in
service quality (Parasuraman et al., 1988). Also, the research conducted by
Sureshchandar et al. (2002) shows that there is a two-way relation between
satisfaction and service quality.
Customer satisfaction is an important element in service delivery because
understanding and satisfying customers needs and wants can generate increased
market share from repeating customers and referrals (Barsky, 1992). Therefore, it has
a significant effect on future purchase intentions (Cronin and Taylor, 1992;
McAlexander et al., 1994) and on the formation of customer loyalty. There also are
some previous research suggests that customer satisfaction can influence customer
loyalty and future purchase intentions (Abdullah et al., 2000). Several authors have
suggests that it is the most important element of customer loyalty (Anderson and
Fornell, 1994; Cronin and Taylor, 1992; Fornell, 1992; Oliva et al., 1992; Oliver and
Linda, 1980; Reichheld, 1993).
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21
2.1.4 Customer loyalty
Loyalty in air sector depends on fulfilling completely the needs of customers in
order to attract them. There are two types of customers, the ones who are loyal to the
low-cost airline concept, and the ones who continue to prefer the traditional flag
carriers. For airlines, Customer loyalty is the most important goal of implementing
relationship marketing activities. Customer loyalty has been largely studied in
consumer and service market context. Oliver (1997, p.392) defined customer loyalty
as a deeply held commitment to rebury or repatronize a preferred product or service
consistently in the future. But a common used definition is given by customer loyalty
pioneers Dick & Basu (1994): Customer loyalty is viewed as the strength of the
relationship between an individual's relative attitude and repeat patronage (Dick and
Basu, 1994, p 16). Dick and Basu (1994) pointed out that customer loyalty is not only
a behavioral phenomenon, besides the behavior aspects, loyalty refers to the attitude
of a customer. Garland and Gendall (2004) tested the framework of Dick and Basu
and they confirmed their typologies. They stated that both attitude and behavior are
important determinants of customer loyalty. In line with Dick and Basu (1994),
Rauyruen, Miller and Barrett (2007) stated that there are two fields of research in
customer loyalty: behavioral loyalty and attitudinal loyalty. Where behavior loyalty is
focusing on the patterns of repeat purchasing and attitudinal loyalty is focusing on the
willingness to recommend a product or service and the positive word of mouth.
The behavioral perspective, purchase loyalty, strictly looks at repeat purchase
behavior and is based on the customer's purchase history. The emphasis is on past -
rather than on-future actions. Moreover, no other loyal behavioral actions such as
price tolerance, word of mouth, or complaint behavior can be interpreted (Zins, 2001).
Concentrating on the behavioral aspect of loyalty could overestimate true loyalty
(Zins, 2001). On another hand, the attitudinal perspective, in contrast, allows gain in
supplemental understanding of loyal behavior (Zins, 2001). The customer loyalty is
approached as an attitudinal construct. An Attitude denotes the degree to which a
consumer's disposition towards a service is favorably inclined. This inclination is
reflected by activities such as the customers recommending service providers to other
consumers or their commitment to repatronize a preferred service provider (Gremler
& Brown, 1996). Based on a favorable attitude towards a service provider, customers
may develop preference loyalty (De Ruyter, Wetzels & Bloemer, 1998).
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22
The principal antecedents of loyalty that have been identified are satisfaction,
(Singh and Sirdeshmukh, 2000). Satisfaction has been considered as the principal
postulate of loyalty meaning that if customers are completely satisfied it leads us to
conclude that they will be loyal. As a consequence of these experiences, when the
level of satisfaction is low, the customers level of loyalty to the airline will suffer.
When the consumer experiences an increase in satisfaction, his loyalty also increases.
Therefore, it can be concluded that the users' satisfaction with an airline is directly
influenced by users satisfaction in general.
In general, increases profit and growth in many ways (Chow and Reed 1997;
Heskett et al. 1994) to the extent that increasing the percentage of loyal customers by
as little as 5% can increase profitability by as much as 30% to 85%, depending upon
the industry involved (Reichheld and Sasser 1990)
Customer loyalty deals with customer intentions to do more business with the
vendor and to recommend that vendor to other customers (Zeithaml et al. 1996). One
way of increasing customer loyalty, suggested by case studies (e.g., Heskett et al.
1994) and by survey research (e.g., Shankar et al. 2000; Zeithaml et al. 1996) is
through superior service quality. Since quality service is something that customers
typically want and value, providing high quality service should arguably increase their
willingness to come back and do more business with the vendor. Conversely,
customers who experience low service quality will be more inclined to defect to other
vendors because they are not getting what they expect (Heskett et al. 1994; Reichheld
and Sasser 1990; Reichheld and Schefter 2000; Watson et al. 1998). Research indeed
shows that in many traditional companies, perceived service quality as measured by
adapted SERVQUAL scales, strongly and directly influences customer loyalty
(Zeithaml et al. 1996).
Several authors have advocated the importance of customer loyalty to the future
stability and growth of any organization (Parvez, 2005; Calik and Balta, 2006;
Tsoukatos and Rand, 2006; McMullan and Gilmore, 2008). Benefits of CL include
reducing the initial cost of introducing and attracting new customers, positive word of
mouth, increases in the number of purchases, and increases in the value of purchases.
In marketing theory, customer satisfaction acts as an antecedent to customer loyalty
(Zeithaml et al., 1996; Anderson and Sullivan, 1993; Kim et al., 2004; Xu et al., 2006;
Zulganef, 2006; Chadha and Kapoor, 2009; Ee Ling and De Run, 2009). A multitude
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23
of scientific articles in the Low-cost airline service industry has found that customer
satisfaction is a major driver of customer loyalty Aydin et al., 2005; Aydin and Ozer,
2006; Lim et al., 2006, Kuusik and Varblane, 2009).
2.2 Conceptual Framework
Figure 2.2.1 Conceptual framework
2.3 Research Hypotheses
Yelkur (2000) found that the critical elements in the services marketing mix
influence and positively effects customer satisfaction. Yayla (2007) find marketing
mix to have a positive effect on satisfaction and loyalty on word of mouth
communication from accounting offices in Turkey. Therefore the result of our study
supported the argument that there is a positive correlation between the marketing mix
and passenger satisfaction. So from the above mentioned model and previous research
Marketing mix Product Price Place Promotion People Process Physical Evidence
Service quality Tangibility Reliability Empathic Assurance Responsiveness
Customer
satisfaction
H1 H2
Customer loyalty Behavioral Attitudinal
H3
H4
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24
the hypotheses are developed as follow
H1: The marketing mix factors influences on customer satisfaction in the Thailand
low-cost airline industry.
From the previous research, Kao (2009) suggested that service quality and its
dimensions have a direct bearing on customers evaluation of an organization and the
intentions to choose the service provider. Lai (2004) stated that there is a significantly
positive relationship between the quality of the service and customer satisfaction, as
well as with future purchase intentions of customer. From the above mentioned model
and previous research the hypotheses are developed as follow:
H2: The service quality factors influences on customer satisfaction in the Thailand
low-cost airline industry.
Research indeed shows that in many traditional companies, perceived service
quality as measured by adapted SERVQUAL scales, strongly and directly influences
customer loyalty (Zeithaml et al. 1996). One way of increasing customer loyalty,
suggested by case studies (e.g., Heskett et al. 1994) and by survey research (e.g.,
Shankar et al. 2000; Zeithaml et al. 1996) is through superior service quality.
Therefore the result of previous study supported the argument that service quality
factors influences on customer loyalty. So in this study the hypotheses are developed
as follow:
H3: The service quality factors influences on customer loyalty in the Thailand
low-cost airline industry.
According to Rust and Zahorik (1993) customer satisfaction has direct impact on
loyalty. Auh and Johnson (2005) Argued that there are strong relationships between
satisfaction and loyalty. Similarly, Bodet (2008) confirmed the relationship between
customer satisfaction and customer loyalty. Shankar, Smith and Rangaswamy (2003)
also provide evidence that there is positively relationship between satisfaction and
loyalty. Thus, in this study, from the above mentioned model and previous research
the hypotheses are developed as follow:
H4: The customer satisfaction factor influences on customer loyalty in the
Thailand low-cost airline industry.
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CHAPTER 3
RESEARCH METHODOLOGY
This chapter presents the methodology approach of collecting and interpreting
data of this study. The topics are as following:
3.1 Research Design
3.2 Population and Sample
3.3 Variables of the Research
3.4 Research Instrumentation
3.5 Data Collection
3.6 Data Analysis
3.7 Reliability Analysis
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26
3.1 Research Design
This study investigates how is the marketing mix, service quality and passenger
satisfaction effect on low-cost airline passenger loyalty. It also explains the
relationship among these factors. Hence, in this study would use quantitative research
methodology for examining a model of the low-cost airline passenger loyalty. And the
survey research will be through distributed questionnaire to low-cost airline passenger
in Don Mueang international airport to collect data. After that use the multiple
regression analysis to analysis the result and examine the relationship among above
factors.
3.2 Population and Sample
The main purpose of this article is to study the low-cost airline passenger loyalty.
Therefore, the target population in this study is selected as the low-cost airline
passenger in Bangkok, Thailand. Because the population could not be clearly
identified, for the size of sample group in this study would be through the Cochrans
formula (1977) to select. The accepted standard is confidence level at 95% and
allowable error at 5%. Hence, the size of the sample group is calculated as following:
n = Z2 / 4e2
n = size of the sample group
Z = confidence level at 95% (= 0.05)
e = probability of error at 5%
n = 1.962 / 4 * 0.052
n = 384.16
From the calculation, the result of the sample size is 384.16, basing on the
confidence level at 95% and probability of error is 5%. Therefore, the size of sample
group set in 384 samples who extraction from the population.
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27
3.3 Variables of the research
The variable of the research in this study includes two parts: dependent variable
and independent variable.
3.3.1 The dependent variables
Dependent variables: customer satisfaction, customer loyalty, and the two measure
variables: behavioral and attitudinal were measured by using one item that required
responds on a five-point Likert-scale where 1= the least favorable responds
alternative (Highly dissatisfied/never recommended etc.) and 5= the most favorable
response alternative (very satisfied/strongly recommend etc.)
3.3.2 The independent Variable
Independent variable: marketing mix and the seven measures variables: product,
price, place, promotion, people, process and physical evidence. Service quality and
the five measure variables: reliability, responsiveness, assurance, empathic and
tangibility. Those were measured by using one item that required responds on a five-
point Likert-scale where 1= the least favorable responds alternative (Highly
dissatisfied/never recommended etc.) and 5= the most favorable response
alternative (very satisfied/strongly recommend etc.)
3.4 Research Instrumentation
In this study, the research instrument use for collecting data is the questions of
loyalty level of the passengers. It composes five parts:
Part 1 General background information sampling consisted of question about
gender, nationality, marital status, the level of education, income, flying frequency
and flying experience.
Part 2 Question about the marketing mix
In this part of the study, the marketing mix is a business tool used in marketing.
The service marketing mix consists of 7 Ps (Product, Price, Place, Promotion, People,
Physical Evidence, Process) compared to the 4 Ps (Product, Price, Place, Promotion)
of a product marketing mix (Rafiq, M., & Ahmed, P. K. 1992). Thus, there are totally
21 items be described in the questionnaire.
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28
Part 3 Question about the service quality
In this part study, Parasuraman and his research team test, develop and refine a
scale for measuring service quality as perceived by customers by five dimension led
to SERVQUAL. Parasuraman (2004) defines these five dimensions as the following:
Reliability, responsiveness, assurance, empathy and tangibles. Thus, there are 15
items be described in the questionnaire.
Part 4 Question about the passenger satisfaction
In this study the passenger satisfaction is measure by four items which describe in
the questionnaire.
Part 5 Question about the passenger loyalty
In this part study, There are two dimensions to customer loyalty: behavioral and
attitudinal (Julander et al, 1997). Thus, there are totally eight items be described in the
questionnaire.
3.5 Data Collection
The questionnaire will be translated into Thai-language and English two versions
in order to facilitate the respondent. The questionnaires are directed from 384 low-
cost airline passengers in Don Mueang international airport. And the data collection
time from December, 2012 to January, 2013. After that all data will classify input
computer waiting for analysis.
3.6 Data Analysis
The five-point Likert scale will be used to measure the each variable in this study.
The interval of range in measuring each variable calculated from weak to strong as
following:
= (highest point lowest point) / scale point
= (5 1) / 5
= 0.80
It means the interval value between each level is 0.8, the items with the interval value
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29
have been declining. The scale ranges are:
4.21 5.00 are considered as most agreement
3.41 4.20 are considered as high agreement
2.61 3.40 are considered as neutral
1.81 2.60 are considered as high disagreement
1.00 1.80 are considered as most disagreement
The researcher analysis the data collection by questionnaire then compare with
above scale ranges. Before that, using the statistical program to analysis then obtain
the result as mean and percentage. Afterwards, use descriptive statistics to analysis
part 1 (the personal information), then analysis the relationship between dependent
variables (passenger satisfaction and passenger loyalty) and independent variables
(marketing mix and service quality) by multiple linear regression.
3.7 Reliability Analysis
Reliability is an extent to which a scale produces consistent results, and is a scale
to measure the quality of an important indicator, the analysis on reliability is called
reliability analysis (Armor, 1974). Many researchers through the exam test or
questionnaire survey form to measure the research object of knowledge, ability,
personality, interest and the quality. Both papers and questionnaire form of
measurement tools, they are made by some test item consisting of the scale. Use
reliability make of scale can achieve more accurate, stable test results. Reliability
analysis has four different approaches, there is Test-retest, internal consistency
reliability, split half reliability and inter rater reliability. Internal consistency was use
in this thesis. In addition, it use Cronbachs alpha model. Internal consistency
reliability coefficient, the most popular form is Cronbachs alpha.
Cronbachs Alpha method is applied to calculate the reliability of measurement
tool e.g. questionnaire or tests which measure different characteristics. According to
Jamal & Naser (2002) a tool with Cronbachs Alpha greater than the minimum
quantity level 0.7 suggested by Nunnally (1987) is considered reasonable from
reliability aspect. Therefore, the researcher chosen 30 samples to do the pretest before
test all the 384 samples. However, the results of the coefficients calculated by using
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30
Cronbachs alpha score are show as follows:
Table 3.7.1 Reliability test using Cronbachs alpha
Variable Pre-test Main empirical
Marketing Mix
Product 0.777 0.803
Price 0.703 0.860
Place 0.788 0.770
Promotion 0.759 0.811
People 0.875 0.808
Process 0.774 0.795
Physical Evidence 0.903 0.866
Service quality
Tangible 0.722 0.737
Assurance 0.959 0.882
Empathy 0.823 0.707
Responsiveness 0.932 0.847
Reliability 0.897 0.830
Customer satisfaction
Customer satisfaction 0.891 0.894
Customer loyalty
Attitudinal 0.947 0.906
Behavioral 0.938 0.916
From the table, reliability of the variable was shown the Cronbachs Alpha score
of pre-test and actual value of all variables. The questionnaire was from the
conceptual framework of the thesis. It included four Variable Marketing Mix, Service
quality, Customer satisfaction and Customer loyalty.
The Marketing Mix included 7 variables, which are product, price, promotion,
people, process, and physical evidence. The service quality factors have 5 variables,
which is tangible, assurance, empathy, responsiveness, reliability. The third is
satisfaction factor and last one is customer loyalty. For Pre-test score was from 30 sets
of the questionnaire that the researcher collected from the customers and collected
data again from 384 questionnaires by respondents. The result as the following:
1. The pre-test value of product is 0.777 and the actual value is 0.803. Second,
the value of price is 0.703 for pre-test value and 0.860 for actual value. Third, the
value of place is 0.788 for pre-test value and 0.770 for actual value. Fourth, the value
of promotion is 0.759 for pre-test value and 0.811 for actual value. Fifth, the value of
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31
people is 0.875for pre-test value and 0.808 for actual value. Sixth the value of process
is 0.774 for pre-test value and 0.795 for actual value. The last value of price is 0.903
for pre-test value and 0.866 for actual value
2. There are the Cronbachs Alpha score for tangible at 0.772 for re-test and
0.737 for actual value. The second variable is assurance, it shown the re-test value is
0.959 and the actual value is 0.882. Third, the pre-test value of empathy is 0.823 and
0.707 for actual. Fourth, the pre-test value and actual value of responsiveness is 0.932
and 0.847. The last one is reliability, it shown the pre-test is 0.897 and 0.830 for
actual value.
3. The pre-test of customer satisfaction is 0.891 and 0.894 for actual value.
4. First, the re-test is 0.947 and actual value is 0.906 of Attitudinal. Second,
the pre-test value of Behavioral is 0.938and actual value is 0.916.
The reliability score is used to each variable of the questionnaire. If the value
equal or more than 0.7 score, it means the question is have reliability or respect. All
the pre-test value and actual value of all variables are more than 0.7.
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CHAPTER 4
DATA ANALYSIS AND RESULTS
Information analysis is considered to be the most important part of the research
process. This chapter presents the data that has been collected through quantitative
survey. Detailed information acquired from the questionnaire survey is presented and
discussed in order to prove the research objective. The researcher used the descriptive
statistics to explain the demographic characteristics by presenting the frequency and
the percentage. Use inferential statistics to analysis the dependent variable by
Multiple Regression. The researcher has directly distributed to 384 respondents in
Don Mueang international airport Bangkok, Thailand to cover the objective of the
study. The result from the respondents has consists in 3 parts as follows:
4.1 The result of Customers Background Information
4.2 Level of Agreement Analysis
4.3 Analysis and Results of Hypotheses
4.3.1 Relationship between Marketing Mix Factors and customer satisfaction
4.3.2 Relationship between Service quality Factors and customer satisfaction
4.3.3 Relationship between Service quality Factors and customer loyalty
4.3.4 Relationship between Customer Satisfaction factor and customer loyalty
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4.1 The result of customers background information
Data in this part have been organized into different types according to the
distinctive characteristics of the variables under consideration. The data are presented
in term of number and percentage of respondents as below:
Table 4.1.1 Numbers and Percentage of Respondents by Characteristics
n = 384
Item Characteristic detail No. of respondents Percentage
1 Gender
Male 206 53.6
Female 178 46.4
Total 384 100.0
2 Nationality
Thai 322 83.9
Foreigner 62 16.1
Total 384 100.0
3 Education
Diploma or lower 35 9.1
Bachelor degree 245 63.8
Master degree 89 23.2
Doctor degree or higher 15 3.9
Total 384 100.0
4 Occupation
Teacher or professor 29 7.6
Government officer 70 18.2
General employee 137 35.7
Tourist 38 9.9
Student 31 8.1
Business man 63 16.4
Other 16 4.2
Total 384 100.0
5 Income
20,000 Baht or Less than 91 23.7
20,001-50,000 Baht 193 50.3
50,001-100,000 Baht 72 18.8
More than 100,000 Baht 28 7.2
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Total 384 100.0
6 Flight frequency
1-2 times per year 119 31
3-5 times per year 119 31
More than 5 times per year 146 38
Total 384 100.0
7 Airlines
Thai Air Asia 160 41.7
Nok Air 202 52.6
Orient Thai airline 22 5.7
Total 384 100.0
The demographic detail of the 384 respondent was divided into two parts which
are: number of respondents and percentage. From Table 4.1.1, there are 7 main items
were considered in the statistic, which are gender, nationality, education, occupation,
income flight frequency and airlines.
Figure 4.1.1 Survey participants profile by gender
The gender are including male and female. There are total 206 respondents are
male and the percent is 53.6% and 178 respondents were female, the percent is 46.4%.
The proportion of each group is almost balance.
0%
54%
46%
Gender
Male Female
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Figure 4.1.2 Survey participants profile by nationality
In the nationality category have 2 groups, Thai nationality group have 322
respondents or 83.9%, and the foreigner group is about 16.1%.
Figure 4.1.3 Survey participants profile by education level
In the education group, the majority of educations respondents are bachelor degree
has 245 respondents or 63.8%, the second are the master degree has 89 respondents,
which distributed as 23.2%, and there were 35 respondents were in the group in the
0%
84%
16%
Nationality
Thai Foreigner
0%
9%
64%
23%
4%
Education
Diploma or lower Bachelor degree
Master degree Doctor degree or higher
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group of diploma or lower, or distributed as 9.1%. The last group was doctor degree
or higher group, which were15 respondents or distributed as 3.9%.
Figure 4.1.4 Survey participants profile by occupation
For the occupation item, there were 7 kinds of different occupations, such as
teacher or professors, government officer, general employee, tourist, student, business
man and others. Most occupation of respondents is general employee 35.7% and
18.2% of government officer, and for the business man there are 63 respondents
which with 16.4%, the group of tourist there were 38 respondents or 9.9%, and the
group of teacher or professor and student are 7.6 and 8.1%, and the last one is the
people who were not in the 6 groups before, there are 16 persons not into the six
groups before.
0% 8%
18%
36% 10%
8%
16% 4%
Occupation
Teacher or professor Government officer
General employee Tourist
Student Business man
Other
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Figure 4.1.5 Survey participants profile by income status
In the Income group, respondent majority in the group of respondent is between
20,001-50,000 Baht about 50.3% and second group is 20,000 Baht or Less than about
17.5%, there are 72 respondents which about 18.8% in the group who has income
between 50,001-100,000 Baht, and the last group is who has income more than
100,000 Baht, in this group there were just only 20 person, which as 7.2% of
respondents.
Figure 4.1.6 Survey participants profile by flight frequency
The flight frequency is including 3 groups, they are 1-2 times per year, 3-5 times
0%
24%
50%
19%
7%
Income
20,000 Bath or Less than 20,001-50,000 Bath
50,001-100,000 Bath -More than 100,000 Bath
0%
31%
31%
38%
Flight frequency
1-2 times 3-5 times More than 5 times
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per year, and more than 5 times per year. The large group is respondents family are
more than 5 times about 38% and the group 1-2 times and 3-5 times have the same
respondents about 119 respondents.
Figure 4.1.7 Survey participants profile by airlines
The airline is the last item of demographic. There are three groups of the airlines.
52.65 % of persons choose the Nok air as they travel transport agent, and 160 persons
choose fly with Thai Air Asia. The others ride with Orient Thai airline about 5.7%.
4.2 Level of agreement analysis
The level of agreement of respondent about affect low-cost airline passenger
satisfaction and loyalty with the independent variable marketing mix factors, service
quality factors and the dependent variable passenger satisfaction and loyalty were
presented in the table 4.2.1 to table 4.2.4.
From the table 4.2.1, the marketing mix factors had the means 3.76080 and
standard deviation as 0.49115 and it was distributed to 7 items, they were Product,
Price, Place, Promotion, People, Process and Physical Evidence. Product had the
means as 3.82990 and standard deviation as 0.59637, which was considered as agree
level.
0%
42%
52%
6%
Airlines
Thai Air Asia Nok Air