Customer loyalty in the Hong Kong Aviation market, A case study of Cathy Pacific Airways
Customer loyalty in the Hong Kong Aviation market: A case study of Cathy Pacific Airways
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Topic Choice Matrix
The terms or concepts to be used
In definition, customer satisfaction can be understood as an attitudinal concept which reconciles the customer expectation and actual experience. Since the customer satisfaction and customer loyalty are directly related, they can be used interchangeably. Theory or models that could be applied
The only theories that can be used to underpin this dissertation will be customer satisfaction theory. It will be used in explaining, expanding and discussing the factors affecting customer satisfaction in the Airways.
Data collection
The data collection method will be questionnaire. A questionnaire is best used in studies seeking answers for how, when, problems and to what extent. Among the information that will be collected form customers include:
Customer satisfaction and opinions
Number of times a customer has used the Airways
Is the customer willing to use the Airways in future?
Access required
After identifying the customers using Airways’ past record and guest book, 100 participants (50 fathers and 50 mothers) will be selected using stratified random sampling. Participation will be voluntary. The questionnaires will be sent prior or in advance to the selected respondents together with a return address and envelope, after contacting them and obtaining their participation in the study.
Measurements
A number of factors are likely to impact on the amount and type of collected data. Some of the factors that have been identified to cause an impact on the internal validity of a study include the following. The variety of information collected from various people and sources might contradict. For instance, in one study, the researchers found out that the management had created different environments for the customers. Another notable threat to the research validity is the method of selection that might be (though the probability cannot be determined) biased. Since participation in the study by respondents is voluntary, selection bias is likely to affect the internal validity. Instrumentation is also identified by the scholars as another factor that affects internal validity. In this threat, any change or alterations made in the measurement of variables or changes in the techniques of observation may justify changes in the measurement that is ultimately obtained. Contribution of this research
The research will be essential in determining the factors that affect customer satisfaction in various Airways. The research outcomes will be useful to all Airways and other organizations.
Introduction
There is a great paradigm shift in the contemporary business environment and this intermarried with the day-to-day economic conditions that various businesses are subjected. It becomes very essential for every business to explore the aspect of customer satisfaction thoroughly as an important aspect and process of business survival and growth. By exploring customer satisfaction, the business organizations not only gain knowledge of the customer satisfaction drivers but establish strategies to retain them and have a competing edge over the competitors in the market.
This provides the rationale upon which this dissertation examines a customer loyalty in the Hong Kong Aviation market taking a case study of Cathy Pacific Airways. The dissertation takes a multi-faceted perspective of various professional fields, deeply analyzing the concept of customer satisfaction in those fields.
2.0 Aim of the research
The main aim of the research is to examine the customer loyalty in the Hong Kong Aviation market taking a case study of Cathy Pacific Airways.
2.0.1 Objectives of the research
To examine the level of customer satisfaction in Cathy Pacific Airways. Since customer satisfaction and loyalty are directly related, the more the satisfied customers the greater the loyalty.
To determine the customer satisfaction drivers in Cathy Pacific Airways. This will help in determining the factors that contributes to customer satisfaction in the Airway.
To examine the factors affecting customer satisfaction in Cathy Pacific Airways.
To determine the percentage of repeat customers in Cathy Pacific Airways. This will help in examining the extent to which customers are satisfied with the Airway’s services.
To determine how prices in the airways affect customer retention , satisfaction and loyalty in the Airways.
3. Rationale
Knowledge of the customer satisfaction factors is a strong backbone upon which an organization can base its customer retention. This is by knowing the satisfaction drivers of the customers it has attracted. Furthermore, though there is a great significance of using customer opinions and attitudes in various fields. Not many studies have specifically focused on assessing the attitudes of customers with respect to their satisfaction with the services offered and so the importance of this research. This research in its secondary research attempts to give an assessment of the studies that have been undertaken in an attempt to investigate the relationship of the two broad dimensions of customer satisfaction and that of customer retention. These two dimensions are powerfully related when attempts are made to understand or debunk on customer satisfaction. After all, the ideological significance of endeavouring to satisfy the customer is to retain the attracted customer and attract more hence creating a pool of loyal customer in the market. The end result is strong customer base and hence formidable market dominance and so the importance of this research.
4. Theoretical framework
Customer satisfaction and retention takes a central role in present marketing theory and praxis. As such, it contains significant link between customers’ behaviours and the activities of the Airways or any company. Customer satisfaction, correspondingly, has been the object of research in more than 20,000 studies across the globe. As a result, various theories have been developed to explain this abstract construct. To date, however, consensus on that matter has not been reached.
This research examines various conceptions of the formation of customer satisfaction. For this reason, customer satisfaction paradigm is sent as the basis on which other theories are developed. Subsequently, a brief presentation and evaluation of existing methods for measuring customer satisfaction sets the focus for this research.
5.0 Literature review
The literature examines original investigations, other literature reviews, peer reviewed academic literature, research databases, reviews, journals in various academic fields and original manuscripts that relate to customer satisfaction. This is intended to bring a better understanding of the factors behind customer satisfaction in various Airways targeting Cathy Pacific Airways. One of the most recent studies, which directly involved investigation of customer satisfaction of consumer is the study carried out by SSP (2006). Since a search in the research databases produces a big number of results, the reviewed literature sources are picked on a random- sample strategy. Databases searched include the BMC research database, JAMA database among others.
In definition, customer satisfaction can be understood as an attitudinal concept which reconciles the customer expectation and actual experience (Mont & Plepys 2003). When the difference between the two aspects (for instance expectation and actual experience) is wide, then there is little satisfaction and an organization stands high chances of losing the attracted customers.
Cooper (2008) observes that because of this knowledge about customer satisfaction with the services of doctors and nurses in the field of health care services, it should therefore help in strengthening the complex intermarriage of various variables across the board with respect to satisfaction of the consumers in the healthcare industry. He further observes that consumer satisfaction will eventually lead to job satisfaction in the service providers. Put in the business setting of any other industry, what this implies is that when the customer is satisfied and the organization’s employees are made aware of the fact, they too are motivated and hence become satisfied with their job. Satisfaction of one is dependent on satisfaction of the other in one or more ways. It in part therefore stresses the significance of involving the employees in the employee satisfaction plans.
With the changing characteristics of the market platform on which business is conducted, the aspect of customer satisfaction becomes even more relevant. Online businesses that deal with clients in a virtual world would wish to know the satisfaction of their customers. This is the basis of the research article by Nusair and Kandampully (2008) which sought to establish the factors that influence customer satisfaction in online business platforms. Nusair and Kandampully (2008) conducted a survey of travel websites with respect customer satisfaction. The objective of their research study was to establish the relationship of various customer satisfaction dimensions and then attempt to investigate if the customers of the analyzed websites are actually satisfied. The researchers provide a good rationale upon which the results of their study may not attain external validity. One of the research limitation identified by the researchers and which limits external validity is that the extent to which their results could be generalized to other business websites or organizational settings is greatly impounded by the fact that they conducted the study on a sample of six travel websites. Another limitation was that the attributes of customer satisfaction could be covered only to a limited extent. This also contributes to reduced generalizability of the results.
As a component of the contemporary business model, corporations and business organizations customarily examined the consequences of changes in customer satisfaction on sales volume and customer retention (Tang & Bougoure 2007). Tang & Bougoure (2007) posit that there is an integral link connecting customer satisfaction and service quality, a link which cannot be doubted. The two researchers make an observation, which concurs with what Bates and associates (1995) had observed in their study. The two research associates observe that for a better business standing in the market and better performance, the business should aim at providing an excess of the satisfaction customers expect out of the services (Tang & Bougoure 2007). This gives an organization’s marketing department and customer service departments a fundamental challenge.
Another comprehensive research study on customer satisfaction is the research done by Conklin (2005) investigating the relationship between customer satisfaction and loyalty. The researcher gives a comprehensive approach with a systematic methodology, which aims at exploring the concept of customer retention with respect to various aspects of customer satisfaction like quality of services (that is, reliability of the services, responsiveness of the business to customer needs and assurance) and the marketing strategy adapted by the organization (promotional tactics and the channels used among other aspects). The setting for the study is the Bangkok Airport. The researcher used a 5- point rating questionnaire design to collect data related to the above mentioned aspects and subjected the data to statistical analysis.
On another perspective, the researcher also subjected customer satisfaction to analysis as an independent variable. Here, the dependent variable was the customer loyalty. Since the researcher also wanted to establish if there was any relationship between satisfaction of customers and their loyalty, he subjected the data collected to this analysis. The findings of the analysis pointed to a strong positive relationship between the two variables. The researcher therefore managed to derive a string of correlations leading to customer satisfaction. The implication of this study is that customer satisfaction as a fundamental aspect of business and welfare economics of consumer behaviour should be understood as a process (Mont & Plepys 2003).
Customer satisfaction and brand loyalty have a causal link, which means that utmost care must be borne in mind when attempts are made by business organizations to develop satisfaction strategies. An oversight may easily lead to the plan not working at all. Since the characteristics of the variables a long this causal link may not be similar across the industries and may also vary from business to business, every organization must examine directionality of its customer satisfaction thoroughly (SSP 2006).
Based on the literature review, a number of issues are evident. First, given that customer satisfaction is not a quantitatively measurable variable and it ideally depends on the behaviour of consumers, more investigative efforts should be put in understanding consumer behaviour of consumers in a particular industry, geographic location and across gender. However, it must be taken into account that consumer behaviour is not only a profound process in business interaction with the society but it also has many intervening variables which cannot be assumed. For instance, a business that wishes to gain customer loyalty without satisfaction is unlikely to succeed. On the same basis, an organization that wants to ensure a satisfied customer without examining the consumer behaviour of customer with respect to changes in quality of services offered and market approach strategies employed may also not be planning to succeed.
6. Methodology
Primary research design
The quantitative data collection method will be employed in this research. Questionnaires will be sent randomly to the Airways customers. A questionnaire is best used in studies seeking answers for how, when, problems and to what extent. A questionnaire is the appropriate quantitative method for the study because it supports the gathering of data on the measurable effects and it enables the researcher to collect data from 100 respondents.
The questionnaire takes approximately 40 minutes to finish. The questionnaires will be sent prior or in advance to the selected respondents together with a return address and envelope, after contacting them and obtaining their participation in the study. Duration of one week will be allowed for the questionnaire completion (Clarke, 2005).
Secondary research
The literature examines original investigations, other literature reviews, peer reviewed academic literature, research databases, reviews, journals in various academic fields and original manuscripts that relate to customer satisfaction. This is intended to bring a better understanding. One of the most recent studies, which directly involved investigation of customer satisfaction of consumer is the study carried out by SSP (2006). The qualitative data collection method will be secondary research materials. The questions focus on accounts of the level of satisfaction, social relations of customers, as well as on areas of need and recommendations in addressing these areas (Munhall, 2007).
Sampling
The participants of the study are the regular customers or other users who happened to use the Airway. The participants (to fill the questionnaires) will be selected randomly. After identifying the customers using Airways’ past record and guest book, 100 participants (50 fathers and 50 mothers) will be selected using stratified random sampling. This method of selection considers criteria in selecting the respondents. The criteria comprise the classification of the respondents and the number of respondents needed to represent each classification (Kabala, 2005). The specific respondents to fill the number required for each classification are selected randomly. Using this sampling method ensures that customers from different income classes and are represented proportionally.
Data Analysis
Quantitative data will be analyzed using descriptive statistics to summarize the responses and determine means and standard deviation. The analysis is aimed to determine the significance of measurable level of satisfaction or dissatisfaction of customers (Kabala, 2005). Qualitative data will be analyzed by using thematic classification and drawing implications relative to the quantitative data and the research questions. Results will be presented in tables and graphs together with textual explanations. From the analysis, the level of customers’ satisfaction and dissatisfaction will be determined. Since customer satisfaction and loyalty are directly related, the extent of customer satisfaction will show how customers are loyal.
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