The Concept of Customer Perceptions and Expectations With Respect To Service Quality - Essay Example

 Measuring Service Quality: TUI Abstract The present article highlights the concept of customer perceptions and expectations with respect to service quality. It lays emphasis on measurement of the same in the travel and tourism industry so as to understand the condition of business in this particular industry. A reach study was executed in order to figure out the overall service quality of the travel and tourism industry. In this research work the main difference between expectations and perceptions of the customers, who are the real consumers, are depicted. The difference is evaluated in order to examine the difference in customer perception with regard to service quality in the travel and tourism industry. The service quality of the travel and tourism industry has declined over the years with the rise in number of passengers and decrease in price of the tickets. The dimensions of service quality are also measured that are presently delivered by the industry. A comparative analysis between quality perceptions among a number of organizations in the same industry had helped in determining the gap in the quality between the perceived and expected service. The present article has focused on an exhaustive study and the findings are based on a number of tools and strategies, which is recommended for the success of the industry. These tools help in improving the service quality of the travel and tourism industries. Table of Contents Introduction 3 SERVQUAL to measure service quality 4 SERVQUAL in Tourism Industry 5 TUI AG 6 Service quality measurement system of TUI 7 Conclusion 12 Reference List 14 Introduction Academics and researchers have been constantly focusing on measurement and conceptualization of factors associated with service quality as well as its influence on the performance of businesses (Akroush, 2009). Despite the extreme importance service quality exerts on the overall strategic planning procedure and corporate success, no precise or ideal definitions have been developed surrounding the concept of service quality. The most precise and followed concept of service quality was give by Parasuraman, Zeithaml and Berry (1988) which defined service quality as “a global judgment, or attitude, relating to the superiority of the service”. Most of the researchers and academics agree to the aforementioned definition and follow it regularly. Service quality can also be explained as the overall impression of consumer regarding the relative superiority or inferiority of an organization as well as its services. Delivering unparalleled service quality required conforming to the expectations of the customers on a regular and consistent manner and offering them a better quality service that their expectations. If expectations are higher than performance of an organization, it results in customer dissatisfaction and less satisfactory perceived quality. The objective of the current article is to understand and evaluate the various customer perceptions and expectations in terms of service quality and measuring the service quality of an organization pertaining to travel and tourism industry. In order to successfully finish the research work, a research work was conducted where the overall service quality was measured by exploring the major differences between perceptions and expectations of service quality among customers and actual service quality offered by the firm (Corbitt, 2002). Moreover, the study will also explore the service quality dimensions that are at present delivered by the organization in question. A comparative study between the quality perceptions among different organizations within the same industry will help in discovering and measuring the existing quality gap between perceived and expected service. Using the exhaustive study and findings various tools and strategies will be recommended that can be helpful in enhancing the overall service quality of travel and tourism industries. SERVQUAL to measure service quality Various metrics and theories have been developed for measuring service quality. Over the years, SERVQUAL have emerged to be the most accepted and frequently used measurement function for service quality. The SERVQUAL measurement was developed by Parasuranman, Zeithaml and Berry (1988). According to this measurement function, various gaps exist within a service organization. These gaps are responsible for quality problems and subsequently dissatisfaction among the receivers of the service. Four potential service gaps were identified within service firms which further contributed to the formation of a fifth and more serious service gap. The four gaps are described as follows; Gap 1: Management perception and customer expectation gap Gap 2: Gap between management perception and service quality specification Gap 3: Gap between service-quality specifications and service delivery Gap 4: Gap between service delivery and external communication Figure 1: Service Quality Model (Source: Parasuranman, Berry and Zeithaml, 1991) In the diagram above, the model is divided into two categories. The above category views the perspectives of the customers while the lower part views the aspects from manager’s point. Therefore, the pictorial graph clearly suggests that service quality measurement means comparing the customer’s expected service (E) with the customer’s perception regarding the actual or real performance delivered by the service (P). If E is greater than P, it means negative disconfirmation and in case P is greater than E, it is termed as positive disconfirmation. The ultimate objective of any firm in the service industry is to decrease the gap between customer’s expected service and perception regarding the company’s current service. Also, it is important to note that no one strategy can be applied to every business or every issue and companies in the tourism industry will have to apply customised approaches and methodologies according to its target customers (Ueltschy, et al 2007). SERVQUAL in Tourism Industry In case of service quality measurement and tools, tourism industries are the most benefitted sectors. Many scholars and researchers in the field of tourism have suggested that service quality tools and measurements can be used for investigating the issues related to tourist dissatisfaction as well as during attempts of attracting new customers or retaining current customers (Zhao and Di Benedetto, 2013). Researchers in the field of tourism have also acknowledged the fact that high-quality service differentiates itself from its competitors and is a critical success factor for tourism companies (Atilgan, Akinci and Aksoy, 2003). Literature in the tourism industry suggests that performance of firms in this industry can be determined by assessment of their service quality (Mohamed, 2007). Furthermore, these assessments have been proved to be extremely helpful in establishing benchmarks for meeting various service quality requirements as well as influencing future decisions in terms of selecting destinations and markets (Khan, 2003). Most of the current firms in the tourism sector use and implement SERVQUAL method for service quality measurements (Pakdil and Aydin, 2007). Gilbert and Wong (2003) have redefined seven dimensions that can be helpful in determining service quality of firms. These were assurance, reliability, facilities, customization, responsiveness, employees and patterns The above discussion clearly suggests that SERVQUAL has been one of the most preferred service quality measurement tools among marketers as well as industry researchers. The above discussion also demonstrates that potential and growth of tourism in developing countries is increasing, provided they are properly challenged with adequate resources and skills. Also, significant different exist between similar companies in the tourism industry, particularly due to the unique services offered by these companies. TUI AG The company that has been taken for evaluation and analysis is TUI AG. It is a multinational tourism and travel firm from Hannover, Germany. Till 2001, the company was majorly a transportation and industrial firm TUI, 2014a). It was renamed as TUI AG in the year 2002 and since then, the company has rose to become a prominent and well-known name in the tourism sector (TUI, 2014a). At present TUI AG owns hotels, travel agencies, cruise ships, retail stores and airlines. The company also has subsidiaries in the form of TUI AG Airlines, which is the biggest holiday fleet across Europe. The conglomerate is distributed into three major sectors. These are; 1. TUI Travel including online sales, travel operating, airlines, incoming agencies, high-street outlets and tour operating. 2. TUI Hotels and Resorts 3. TUI Cruise Ships During the financial year 2013, the reported turnover of the company was 18.5 billion Euros and the overall operating earnings were found to be 762 million Euros. TUI is one of the biggest and largest firms in the travel and tourism sector. The company operates with around 3,500 travel agencies and 79 operators across 18 nations, 10 cruise ships and 12 brands of hotels across 28 nations, altogether 285 hotels (TUI, 2014b). At present, Michael Frenzel is the management chairman and CEO and Dietmar Kuhnt is the supervisory board Chairman of TUI group (TUI, 2014d). From the above description of the company, it is clear that TUI group has a long list of customers and comes across millions of customers on a daily basis (TUI, 2014c). Therefore, it is extremely important for the firm to devise strategies that will help in continued customers satisfaction and management of its service qualities. Service quality measurement system of TUI The company extensively follows SERVQUAL model of service quality measurement. Under this model, various strategies are implemented in order to ensure that every customer is served with the standard services as recognized by the industry as well as organizational objectives. Also, these strategies are regularly monitored, managed and updated, to meet the changing and growing demands of customers. The various tools implemented by the company can be described as follows; 1. Customer Research (For instance, surveys, feedback cards as well as forums) 2. Policy of customer complaints 3. Benchmarking 4. Market Research 5. Review sites for tourism customer 6. Social media platforms The objective of the above tools and strategies is to minimize the gap between management perception regarding qualities and perceived expectations and actual expectations among the customers. Each of the above tools for measuring service quality is explained in details; 1. Customer Research In order to make their business successful, TUI has been constantly trying to understand their customers as well as identify their changing demands and needs. Customer research helps the organization in choosing the right products for the right customers tailor the service marketing strategies, identify the tactics that are reliable in this changing market scenario as well as develop sales strategies based on the above information (Schultz and Block, 2012). TUI adopts various types of strategies for customer research. Some of its frequent and well-known strategies include surveys and feedback cards. These survey forms and feedback cards are presented to the customers in both online and offline form. For instance, after using the online website of the firm for booking a place or a hotel, the website requests the customers to fill the feedback card. Similarly, feedback cards are used at various customer touch points such as during hotel stays, airports, holiday destinations and transportation services. Online forums are also an effective way to interact with the customer and explore their changing needs. For instance, customer queries regarding availability of holiday destinations, discounts available and questions regarding usage of the websites can be solved in real-time, using online and live forums (Queensland Government, 2014b). Choosing right methods for customer research is critical and can be done in offline ways also. These include mystery shopping, brand testing, concept testing, price testing and customer servicing audits. Before formulating or launching any new service or offering, TUI regularly conducts brand testing, concept testing, price testing and pilot testing (Petrosillo, et al., 2007) For instance, the company conducts online feedback surveys and evaluates the potential popularity of new services that the company is going to offer. Focus groups and interviews are also conducted on a regular basis in order to evaluate the likeness towards ongoing services and offerings provided by the firm (Queensland Government, 2014b). Moreover, the company has also divided its customer profile according to their multiple demands and characteristics. Therefore, it becomes easier to manage the level of service quality needed to be maintained by the firm in order to remain competitive in this market. 2. Policy of Customer Complaints Customer complaints are highest in the service industry. This is majorly due to the fact that in a service industry, the customer receives the service only after paying for it. Thereby, the level of dissatisfaction is high and also the trust factor is very weak. Any small ignorance or mistake from the company’s side can result in customers leaving the company for competitors. In order to control this issue, TUI has launched strict customer complaints guidelines and policies for its employees and other internal members (Queensland Government, 2014c). . The complaints handling policies established by TUI are monitored closely and maintained according to the legal laws. For instance, the website of the company has a separate tab describing the details of the complaints handling policies and guidelines for customers, employees as well as various other stakeholders such as suppliers. Common complaints that the company faces are in terms of bad experience during tours, late response from the employees handling customer queries, poor servicing of clients, poor response to request for information regarding services and offerings, rude or unacceptable behaviour by staff, communication gap, repeated complaints coming from same clients, employees who are uninformed and non-compliance from the employees (Queensland Government, 2014c). As it is a service industry and the touch points between customers and employees is the highest, it is likely that customer complaints mainly arise due to certain employee or staff behaviour. Therefore, in order to reduce the likelihood of customer complaints, TUI need to first train its employees. Employee training is a regular phenomenon among all groups of TUI and in case of tourism sector, employees and staff members are trained for differentiating and excellent customer handling techniques (TUI, 2014f). 3. Benchmarking Benchmarking is a process though which a company’s performance is measured against other firms having similar market size, share and other features and belong in the same industry. Benchmarking helps in evaluating the flaws and strengths of firms and helps in establishing strategies to enhance the overall business (TUI, 2014e) Being in the service industry, TUI has been using benchmarking as a critical tool for measuring service quality. The company buys several financial and market benchmarking data for comparing its income, profitability as well as expenses against the service and tourism industry and also against the company that tops according to the industry average. Also, TUI examines and compared its financial data with other similar businesses to understand the strengths and weaknesses of its financial operations. TUI has set up an audit committee wherein the company monitors the financial and market performance of the company and provides necessary details regarding any changes in the standards or policies in the travel and tourism sector (Queensland Government, 2014d). Another strategy that TUI applies to measure the quality of its services is by benchmarking its offerings with those of its closest competitors. This helps in evaluating the differentiation TUI or its competitors have achieved by offering differentiated or unique services to its customers. This strategy also helps in monitoring the factors or features of the competitor’s offerings that might influence or attract TUI’s current customers (Queensland Government, 2014d). A unique benchmarking strategy followed by TUI is comparing the skills and capabilities of its staff members and employees to those of its competitors as well as industry best. This helps in analysing the gap between existing skill sets of employees and perceptions among the customers, that has been created due to the high services and skill sets displayed by industry best companies. This strategy subsequently helps in establishing appropriate and proper training and development programs for employees and other staff members. 4. Market Research TUI uses market research as a service quality measurement tool and it helps in targeting ideal customers, identification of unique market opportunities as well as improving the overall sales performance. Regular research on various topics such as customer satisfaction, service popularity, brand identity, brand awareness, new service development and pilot testing make the foundation for TUI’s sales planning and marketing strategies. TUI is one of the largest tourism firms across Europe and as a result, constant market research is critical for the continuous growth and development of the firm in terms of offerings, unique services and market share. The company has both in-house market research and development facilities and it also hires external market research consultants on a regular basis. Using market research as a service quality measurement tools also assists the firm in locating the business areas that needs to be changed or updated. The market research process of TUI is majorly divided into three different sets; market and industry environment, customers and competitors. Under market and industry environment, TUI covers market demographics, market trends and market size, socio-graphics and business regulations. Customer research is done by the in-house market research tool developed by TUI, customer behaviour observation, questionnaire and surveys for staff and customers, point-of-sale feedback from customers, focus groups, phone surveys, sales staff, personal interviews and data gathered from local business and market development offices. At the same time, competitor research can be done from evaluating and exploring the advertisements, price lists and competitors materials of TUI’s close competitors, business directories, licensing bodies, competitor websites and stores, chat sites and complaint blogs, suppliers, past clients, electronic mail lists and competitor prints and personal observations, 5. Review sites for tourism customer In a service industry, customer reviews have always had a great influence on the attitude of potential and current customers towards the business. With the exposure of internet, customers are using multiple platforms to express their opinions and views regarding a product or a service and these views can be both positive and negative. Therefore, TUI monitors numerous social media and online platforms such as general review websites, specialized review websites, personal blogs, retailer’s websites as well as other social media websites such as Facebook, Twitter, Google plus and Instagram (Park and Kim, 2006). According to research, while positive reviews in various online and social media websites increases the chances of customers make use of the business, negative reviews on the other hand decrease the likelihood. While general review sites are known for wide businesses, specialized review sites are made for specific industry. For instance, TripAdvisor is a well known review site among customers for tourism industry (Park and Kim, 2006). Monitoring these sites help TUI in detecting flaws and shortcoming of the company as well as its competitors which are then minimized by making appropriate strategies. TUI has employed a dedicated group of employees for tracking as well as managing online reviews. Apart from that, free services also exist that help the company in tracking and delivering various online review reports. The tasks of these employees managing social media sites are to respond to the positive reviews, effectively manage and respond to negative reviews, follow the rules of every site, develop customer review and feedback services on the company websites and manage them regularly (Queensland Government, 2014a). The employee managing customer reviews ensure that no fake positive reviews are posted. TUI employees have a unique strategy according to which the employees segregate its high-end and persistent customers, track them and regularly update them for upscale and cross scale services. 6. Social media platforms Social media services can act as an important service quality measurement tool as it helps in initiating and maintaining constant interaction between the company and its customers. TUI have created and shared online communities and social media platforms for building relationship with its customers. Social media sites such as Facebook and Twitter help in promoting the brand name TUI as well as business, explain its customers regarding current and upcoming services and goods, understanding the perception of customers regarding the brand and its business, building strong as well as long-term relationships with the present customers as well as attracting new customers (Dix, 2012). While social media helps in broad reach and is extremely cost efficient, unmanaged or improper utilization may lead to waste of expenditure and loss of time and reputation. As such, TUI maintains strict regulations and policies regarding its online promotions and campaigns. Conclusion From the above discussion it is evident that the present service quality of the travel and tourism industry can be improved with the help of a number of tools and techniques. These include customer research, which focus on extracting information and feedback from the customers regarding their needs and complaints. Policy for the customer complaints is a vital tool, which gives emphasis on the feedback of the customers in order to understand the performance of the travel and tourism industry. The performance of the travel and tourism industry can be compared with that of other industries in order to understand the difference in operation. Extensive market research will also provide ample knowledge regarding customer’s perception and expectation of the travel and tourism industry. The review sites for the tourism customers help the industry to know the complaints and experience of the customers and improve accordingly. 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Zhou, R. and Pritchard, A., 2009. Using SERVQUAL to measure the service quality of travel agencies in Guangzhou, South China. Journal of Services Research, 9(1), pp. 87-107. Read More