1 1 THE INFLUENCE OF GROUND SERVICE QUALITY AND IN FLIGHT SERVICE QUALITY ON CUSTOMER SATISFACTION: A CASE STUDY OF VIETNAM AIRLINES Student Name: Kim

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THE INFLUENCE OF GROUND SERVICE QUALITY AND IN FLIGHT

SERVICE QUALITY ON CUSTOMER SATISFACTION:

A CASE STUDY OF VIETNAM AIRLINES

Student Name: Kim Thi Thu HuyenStudent ID: 11734434Advisor: Dr. Pi-Yen ChenCo-Advisor: Dr. Ho Thuy Ngoc

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Key word: Service quality, Customer Satisfaction, Customer complaint, Airline service, ACSI model

Research Method: Quantitative Method

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Contents:

Chapter 1: Introduction

Chapter 2: Literature Review

Chapter 3: Research Design

Chapter 4: Research Result

Chapter 5: Conclusion and Implication

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CHAPTER 1 INTRODUCTION1.1 Research Background

1.1.1. Introduction to the context of the Aviation Industry in the world

- Airline industry is necessary for the world wide transportation

- It is one of the biggest industries in the world, providing remarkable amount of work places, taxation revenues to governments.

- The Airlines has challenge to face with some issues such as financial crisis and terrorism threat; deregulation of airline industry in 1990s (It is allowed low- cost carriers (LLCs) to join the Airline market); competition from other modes of transportation (high-speed trains and fuel price changes sharply

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CHAPTER 1 INTRODUCTION1.1 Research Background

1.1.2. The context of the Aviation Industry in Viet Nam and Vietnam Airlines (VNA)

- Vietnam is a prospective market with both consumer and business opportunities

- There are 06 air transport business Jetstar Pacific Airlines, VASCO, SFC (helicopter operator), VietJet Air, Air Mekong and VNA in which VNA has the largest market share.

- VNA was established by the Government since January 1956- In 2006, VNA officially became the member of IATA. - On 10/6/2010, VNA officially became the 10th member of Sky

Team. - Currently, VNA has 22 subsidiaries and affiliates. VNA has code

share agreements with Sky Team member to connect flight to 1000 destinations over the world.

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CHAPTER 1 INTRODUCTION

1.2 Research Motive:

- VNA expect to reach the level of 04 star in 2015 and 05 star in 2020. However, SKYTRAX evaluated the service quality of VNA still maintain at the level of 03 stars.

- The customers complained about VNA’s service quality

- VNA must regularly compete with other Airlines in International market as well as the domestic market.

- Nobody make research the influence of services quality on customer satisfaction in VNA before

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1.3 Research Purpose:

- Understand clearly the nature of aviation service quality and what the customers need and how to make the customers be willing to further use the service of VNA.

- Determine which service aspect needs maintaining the quality and which service aspect needs improving.

- Find out the suitable solution to overcome the weaknesses, unsuitability of each service and improve the service quality,

- Withdrawing the suitable competition strategy for VNA

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1.4 Research Questions:

1. Which factor affect Vietnam Airlines customer satisfaction?

2. How is affecting level of each factor on customer satisfaction?

3. How does the service quality affect customer satisfaction?

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1.5 Research Procedure:

Step 1: Identify Research

Step 2: Literature review

Step 3: Research Design

Step 4: Data Collection

Step 5: Data Analysis

Step 6: Research Finding

Step 7: Conclusion

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CHAPTER 2 LITERATURE REVIEW

2.1. Services in Airline Industry

- There are 07 services which generated to the Airlines Industry Services, include:

• Ticket purchase

• Check-in service

• Airports service

• Boarding service

• In-flight service

• Arrival

• Post-arrival service

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2.1. Services in Airline Industry (cont’s)

- This research only takes into account the services which directly affect to the customer from check-in to the customer on the flight.

- This mentioned service process is divided into ground services (check in service, airport service, boarding service) and in- flight services

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2.2. Service quality, Customer satisfaction

- Definition of Service quality: it can be defined only by customers and that it occurs when a service organization provides service that satisfies the customer’s needs (Metters et al., 2003). Thus, simply speaking, service quality is defined as the satisfaction of customer expectations.

- Definition of Customer satisfaction: It can be identified as the customer's evaluation of a product service in terms of whether that product or service has met the customer's expectations and demand (Valarie et al., 2006). Satisfaction can be associated with the feel of pleasure, feeling of fulfillment, ambivalence and relief with a mix of negative and positive experience.

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2.2. Service quality, Customer satisfaction (cont’s)

- Relationship between Service quality and Customer Satisfaction: They have been linked together as shown by many previous studies (Smith & Houston 1983, Kotler 1988; Kaspar & Lemmink, 1988, Lewis & Klein 1986, Bolton & Drew, 1991). These research showed that overall customer satisfaction with a service could be positive and substantial when the service quality is high this means the deliver of service is perceived as equal to or better than expected service. Nguyen (1991) states a strong relationship between satisfaction and perceived service quality.

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CHAPTER 2 LITERATURE REVIEW2.3 The evolution of satisfaction index model:2.3.1 The original SCSB (Swedish Customer Satisfaction Barometer) Model

Fornell, 1992

Peceived Performance

Value

Customer Expectations

Customer Satisfaction

(SCSB)

Cusotmer Complaint

Cusotmer Loyalty

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2.3.2 The ACSI:

The ACSI (The American Customer Satisfaction Index) model, developed in 1994 from the original SCSB model specification (for details of the ACSI survey and model see Fornell et al., 1996).

Fornell et al., 1996

Customer Expectation

Perceived Service Quality

Perceived Value


(ACSI)

Customer Loyalty

Customer Complaint

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CHAPTER 2 LITERATURE REVIEW2.3.3 European Customer Satisfaction Index – ECSI

Eklof, 2000

Perceived value

Customer satisfaction

(Perceived quality-Product)

(Perceived quality–Service)

Loyalty

Image

Expectations

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CHAPTER 3 RESEARCH DESIGN3.1 Research Model:

3.1.1. Selected model: The research will only discuss the part of ACSI, in another word, this research dispenses on last factor (customer loyalty).

Selected model as follow:

H1

H3 H4

H2


Perceived ServiceQuality

Perceived Value


(ACSI)

Customer Complaint

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CHAPTER 3 RESEARCH DESIGN

3. Research Model:

3.1.2 Reason to select the ACSI model:

- ACSI as an advanced tool can optimize the customer satisfaction and drive customer loyalty and thereby gaining profitability. It can be said that ACSI is more advanced than SCSB and both of them were developed by Claes Fornell.

- ACSI is more general than ECSI due to it make the analysis for both result of customer satisfaction (customer complaint and customer loyalty).

- Companies can use ACSI as a tool to analyze customer expectation, perceived quality of service or product and level of customers' complaint

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CHAPTER 3 RESEARCH DESIGN3.2 Research hypotheses:

- H1: Customer expectation has positive impact on Vietnam Airlines’ customer’s Perceived value.

H2: Perceived Service Quality has positive impact on Vietnam Airlines’ customer’s Perceived Value

-H3: Perceived value has positive impact on Vietnam Airlines’ customer satisfaction.

- H4: Customer satisfaction has negative impact on Vietnam Airlines’ Customer complaint

This research shall evaluate 05 services: Ground Service Quality (check-in service, airport service, boarding service) and In-flight Service Quality and one more is about the overall service. The researcher shall use 05 ACSI model to evaluate the Influence of Service Quality of each 05 mentioned services on Customer Satisfaction.

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CHAPTER 3 RESEARCH DESIGN3.3. Measurement of variables

Variables Measurement Statement Sources

Customer Expectations Overall expectation of

quality (pre-purchase)

I Expect Vietnam Airlines' Services Quality are good

Le Xue, Chun Yang (2008)

Expectation regarding customization (pre-purchase)

I expect Vietnam Airlines Services meet the passenger requirements

Expectation regarding reliability (pre-purchase)

I expect Vietnam Airlines Services are usually as good as they promise

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CHAPTER 3 RESEARCH DESIGN3.3. Measurement of variables (cont’s)


Perceived Service Quality

Overall evaluation of quality experience with service (post-purchase)

Vietnam Airlines' offering is customized to meet customer needs

Deng, Yeh, Sungc (2013)

Evaluation of customization experience (post-purchase)

Vietnam Airlines' offering is same as it's promise

Evaluation of reliability experience (post purchase)

My overall perception of service quality is satisfactory

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Perceived Value

Rating of price given quality

Vietnam Airlines has good price under given quality


Rating of quality given price - given the quality received

Vietnam Airlines has good quality under given price

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(ACSI)

Overall satisfaction - considering all customer’s experiences to date

I feel satisfactory of Vietnam Airlines overall performance


Confirmation of expectations (considering all of customer’s expectations)

Vietnam Airlines Performance has met your expectation)

Comparison to ideal The satisfaction level of Vietnam Airlines is quite close to your ideal Airlines

Customer Complaints

the customer complained to the company within specified time period

I had complained about Vietnam Airlines Services by either formal or informal way


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CHAPTER 3 RESEARCH DESIGN

3.4. Data collection and analysis- Research method: Quantitative Method- Questionaire design: 70 questions divided in 04 parts

• 10 fixed-alternative question is designed as multiple-choice answers

• 60 structured question is designed as linkert with 05 scale from “1” to “5” where “1” Strongly Disagree, "5" Strongly Agree for 05 services accordingly.

- Sample size: 250 passengers from VNA’s Frequent Flyer Program.- Sampling method: Random sampling- Data was collected by gathering questionnaires online. 134/250

respondents collected only. - The SPSS software was used to analyze the results

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CHAPTER 4 RESEARCH RESULT4.1 Sample Description- Use frequency table and charts to describe the sample4.2 Reliability and Validity of Variables- Use Cronbach’s Alpha to examine the reliability and validity of

variables- Cronbach’ Alpha (if item deleted) of all items are greater than 0.5.

There is no deleted item for all constructs. 4.3 The regression result - Regression Analysis were performed for 05 services (check in service,

airport service, boarding service, in-flight service and overall service), the result in the following charts and as follow:

• Hypotheses in Chapter 3 are true• Perceived service quality in boarding services has strongest impact on

customer satisfaction and perceived service quality in airports service has less impact on customer satisfaction.

• Customers have made complaint with all services. The complaint are much more about boarding services which related to the on-time departure.

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CHAPTER 4 RESEARCH RESULTResult of regression analysis in case of VNA’s Check-in Service



Perceived Value

Customer Satisfaction (ACSI)

Customer Complaint

0.23

0.74

0.86 -0.79

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CHAPTER 4 RESEARCH RESULTResult of regression analysis in case of VNA’s Airport Service



Perceived Value


Customer Complaint

0.44

0.36

0.85 -0.77

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CHAPTER 4 RESEARCH RESULTResult of regression analysis in case of VNA’s Boarding Service



Perceived Value


Customer Complaint

0.30

0.90

0.73 -0.72

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CHAPTER 4 RESEARCH RESULTResult of regression analysis in case of VNA’s In-flight Service



Perceived Value


Customer Complaint

0.63

0.88

0.70 -0.81

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CHAPTER 4 RESEARCH RESULTResult of regression analysis in case of VNA’s Overall Service



Perceived Value


Customer Complaint

0.71

0.85

0.79 -0.76

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CHAPTER 5 CONCLUSION5.1 Findings and Contribution

- Customer satisfaction impacted by perceived service quality. To improve the customer satisfaction, Vietnam Airlines should improve the service quality.

- Perceived service quality has stronger impact on customer satisfaction in term of check in service, boarding service and In-flight service.

- Perceived service quality has weaker impact on customer satisfaction in term of airport service due to airport service not only provided by VNA then VNA can not control of these services.

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CHAPTER 5 CONCLUSION5.2 Implication

- Check in service: Having more check-in counter, push up speed of check-in.

- Airport service: Giving the direction for passengers during the transit/connecting flight, providing the variety of shopping, essential services during delays or cancel, baggage delivery and baggage claim

- Boarding service: Flight information must be provided promptly. An extremely important factor for a flight that flight must be departs on time.

- In-flight service: Providing a various choice of food, drink and newspapers as well as the In-flight entertainment

- Empolyees: VNA pay attention to train their employees especially in Communication skills, Ability to solve problems, Ability to use computers.

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CHAPTER 5 CONCLUSION5.3 Limitation

- Customers are Vietnam Airlines Frequent Flyer Program. They are

mostly employed and they are very busy. Thus, they are not

willingness to response for the survey.

- There are some limitations with online questionnaires.

- Language is another limitation of this research

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1. Angelova, B., Measuring Customer Satisfaction with Service Quality Using American Customer Satisfaction Model (ACSI Model), Full Professor at Ss Cyril and Methodius University, Economic Institute, Prolet nr 1, Skopje- Macedonia2. Chang, Y.H. & Yeh, C.H. (2002) A Survey analysis of service quality for domestic airlines, European Journal of Operational Research, vol. 193, pp. 166-1773. Chen, F.Y. & Chang, Y.H. (2005) Examining airline service quality from a process perspective, Journal of Air Transport Management, vol. 11, pp. 79-874. Deng, W.J., Yeh, M.L., & Sungc, M.L. (2013) A Customer satisfaction index model for international tourist hotels: Integrating consumption emotions into the American Customer Satisfaction Index. International Journal of Hospitality Management 35 (2013) 133-1405. Edvardsson, B. (1992) Service breakdowns: a study of critical incidents in an airline industry, International Journal of Service Industry Management, Vol. 3 (4), pp. 17-29

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References

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THANK YOU FOR YOUR ATTENTION

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Documents

1 1 THE INFLUENCE OF GROUND SERVICE QUALITY AND IN FLIGHT SERVICE QUALITY ON CUSTOMER SATISFACTION: A CASE STUDY OF VIETNAM AIRLINES Student Name: Kim