A CONCEPTUAL FRAMEWORK OF SERVICE QUALITY

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A CONCEPTUAL FRAMEWORK OF SERVICE

QUALITY, CUSTOMER SATISFACTION AND

CUSTOMER LOYALTY

R.Indra*

* Ph.D., Research Scholar, Department of Commerce (International business),

Chikkanna Government Arts College, Tirupur, Tamilnadu

Dr.C.Malleshwaran**

**Assistant Professor, Head and Department of Commerce (International Business),

Chikkanna Government Arts College, Tiruppur, Tamilnadu.

ABSTARCT

The purpose of this article is to investigate theoretical framework for service quality, customer satisfaction and

customer loyalty and develop conceptual framework for it. Even though service quality, customer satisfaction

and customer loyalty has increasingly attracted the attention of researchers, the existing research in this area is

focused on concept of service quality, customer satisfaction and customer loyalty. There is need to develop

model which incorporate the relationship between service quality, customer satisfaction and customer loyalty.

The present article act in response to this need by providing a conceptual framework for this purpose. The

researcher created this article based on extensive literature. The proposed model shows the relationship between

service quality, customer satisfaction and customer loyalty.

Keywords: Service quality, Customer satisfaction, Customer loyalty.

INTRODUCTION

The global airline industry gives administration to for all intents and purposes each side of the globe, and has

been a fundamental piece of the formation of a worldwide economy. The airline industry itself is a noteworthy

monetary power, both as far as its very own activities and its effects on related ventures, for example, air ship

assembling and the travel industry, to name however two. Hardly any different businesses create the sum and

power of consideration given to aircrafts, among its members as well as from government arrangement

producers, the media, and nearly any individual who has an account about a specific air travel

involvement.(Fariuz Romli et al.,2018)

During quite a bit of its advancement, the worldwide aircraft industry managed major mechanical advancements,

for example, the introduction of Jet planes for business use during the 1950s, trailed by the improvement of

wide-body "kind sized planes" during the 1970s. In the meantime, aircrafts were vigorously directed all through

the world, making a situation in which mechanical advances and government arrangement outweighed benefit

and rivalry. It has just been in the period since the financial deregulation of carriers in the United States in 1978

that inquiries of cost proficiency, working productivity and aggressive conduct have turned into the prevailing

issues confronting aircraft the board. With the US driving the way, airlines deregulation or possibly

"progression" has now spread to a significant part of the industrialized world, influencing both local air travel

inside every nation and, maybe more critically, the proceeding with development of a profoundly focused

universal aircraft industry.(Klophaus, Conrady and Fichert, 2012)

THE CONCEPT AND CHARACTEISTICS OF LOW COST CARRIERS

The aviation industry was regulated until 1978, there has been increase in the large number of low cost airlines

with low price to create a center of attention among the passengers (Belobaba, odani, & Barnhart, 2015). Airline

industries is faced with lot of problems like cost, rise and fall in demand and to meet with service quality

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necessities(Baker ,2013). Adding to this point today aviation sector is in competition to improve the service

quality. Lot of research has been undertaken on market share , revenues, service quality, customer satisfaction

and customer loyalty (Forges, Moliner, Sanchez & Palau, 2010).

There is an exhaustive research on low cost carriers and Full cost carriers in recent times. Numerous discrepancy

prevails between Low cost carriers and Full cost carriers. Low cost airlines reduces the expenses by removing

many traditional services.(Routledge, 2006).Saha and Theingi (2009) point out that low cost carriers has brought

up the concern on how much the traveler feel satisfied with various services. Anderson, Gong,& Lakshmanan,

(2005) explains that discrepancies in the price prevails among the passengers. Passenger who book in advance

will pay low fare and Non-Discrepenancy customer pay higher fare at last minute. Low cost carriers has no

Frills, Low fare, operate point to point from secondary airport , one type of aircraft (Ciou& chen, 2010; Loureiro

& Fialho, 2016) . The point to point method concentrates on short distances, regional, non-stop between

departure and arrival rather than connecting flights at hub and spoke.(Francis, Humphreys, Ison & aicken, 2006).

Low cost carriers capture passengers on the basis of value for money, Creating better relationship with

customers.(Rajaguru, 2016) .Coming out of low cost carriers, price of the fare has been reduced and Air travel

has become more affordable and comfortable. (de wit & Zuidberg, 2012) . Huge Low cost airlines turns into

hybrid carriers which blend low cost carriers characteristics (Klophaus, Conrady & Fichert,2012)

CHARACTERISTICS OF LOW COST CARRIERS

Characteristics

Low cost carriers

Brand

Single

Price

Low fare

Distribution

Online & Direct Booking

Check-in

e-tickets

Network

Point- to- Point

Class

Economy

Flight

No frills

Aircraft type

One

Services

No frequent flyer program

Source: Holloway (2008) and O’Connell & Williams (2005)

THE CONCEPT OF SERVICE QUALITY

Bitner & Hubbert,(1994) explains that service quality is considered to be overall performance of an

organization and its services. Service quality is very important for customer satisfaction, customer loyalty

preference of airlines. Service quality have influence on market share and profitability (Morash & Ozment, 1994)

Kotler and Keller(2009) defines Service“ Any intangible act or performance that one party offers to another that

does not result in the ownership of anything”.

Airline industry is different from other service industry in the aspect of services. An airline services

contains both tangible and intangible characteristic. Intangible services are it carries the passengers to their

desired destinations and other intangible benefit enjoyed by the passengers is on- time performance, in- flight

services and flight frequency. Shostack (1977) mentions that Airline services are intangible in nature. It does not

have physical possession of goods.

Sasser et al.,(1978) explains the different stage of service quality which consist of consistency, attitude,

Completeness, condition, availability, and training of service provider. Lehtinen and Lehtinen (1982) provides

several factors that affect service quality are physical quality, interactive quality and corporate quality. Gronroos

(1984) was first person to develop service quality model based on qualitative method. He used Technical quality,

Functional quality and corporate image as dimensions of service quality.

Service quality is the difference between service expectation and the actual service

realization.(Parasuraman et al., 1985). He analysed the service quality dimensions and GAP model for defining

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service quality. Parasuaraman et al.,1985; Lovelock and Wirtz, 2011 provides GAP Relations. The following are

the GAP

1.Knowledge Gap – Customer expectation-Management perception gap

2.The policy gap – Management perception-Service quality gap

3.The delivery gap – Service quality specifications-Service delivery gap

4.The communications gap –Service delivery- External communication gap

5.The service quality gap – Expected service-perceived service gap.

(Parasuraman et al.,1998) developed a instrument to measure the service quality in the dimensions of

tangibility, reliability, responsiveness, assurance and empathy. Review on several research indicates that there

are two types of service quality concepts: Nordic and American Approach. Nordic approach comprises of

Technical and functional quality. Technical quality is what customers get after sales services and Functional

Quality means interaction between employee and customer during service delivery.(Lau, Akbar & Fie 2005). The

American approach consist of five dimensions: reliability, responsiveness, empathy, assurance and tangibility. It

is called as SERVQUAL(Zeithaml et al 1996).This is based on Expectancy- Disconfirmation Theory.

Aydin and Yildririm, 2012; Fick and Ritchie 1991;Sultan and simpson,(2000) analyses the airline service quality

and its effect on customer satisfaction. Park et al.,(2005) explains that service quality can be divided into three

dimensions “Reliability and Customer service”, Convenience and Accessibility”, In-flight services”. Saha and

theingi (2009) evaluate airline service quality in the proportions tangibility, schedules, service provided by

ground staff and services provided by flight attendants. Airline service quality is measured on the basis of

performance, Comfort, service, food and website by Zagat, an research firm.

Shanka(2012) measures airline service quality with following five dimensions: Tangibility, Reliability,

Assurance, Empathy and Responsiveness. He found that assurance has highest impact on customer satisfaction.

Kotler and Keller (2012) examines that Customers satisfaction can be increased only when the organizations

provide better services to the customers. The study reveals that service quality influencing the customer

satisfaction and customer loyalty. Cheng and Rashid(2013) reveals that service quality leads to customer

satisfaction and finally it results in the customer loyalty.

Vein Lovelock and Wirtz (2010) reveals that Service quality is the basic for customer satisfaction and

developing customer loyalty. Cronin and Taylor (1992) investigate the relationship between the service quality

and customer satisfaction. Parasuram, Zeithaml and Berry (1994) Says that service quality and customer

satisfaction are interchangeable.

THE CONCEPT OF CUSTOMER SATISFACTION

Tse and Wilton (1998) defines customer satisfaction as “ Consumer response to the evaluation of the perceived

discrepancy between prior expectation and the actual performance of the product as perceived after its

consumption”. Customer satisfaction is explained by several theories such as expectation-Disconfirmation,

Equity theory and comparison- level theory (Skogland & Siguaw,2004) Gu and Ryan (2007) and Barsky and

Nash (2003) classifies customer satisfaction into two categories. The first category measures the satisfaction

level and find out discrepancy in service delivery. The second category reveals customer satisfaction in a

multivariate model which contains service quality; perceived value, brand image and customer loyalty.

Chen,( 2008);Zeithamal,(1998) mentions that customer satisfaction is an holistic approach ,it represents overall

response after consumption, it may vary from Dissatisfied to Satisfied. Chen (2011) mentions that customer

satisfaction is evaluation made by consumers after their purchase and experience of services. Dennet (2000)

reveals that customer satisfaction gained important context in the international business. Nadiri,Hussain, Ekiz&

Erdogan(2008) explains that customer satisfaction leads to continuous purchases and recommendation to

others.Anderson et al.,(1994) mentions that customer satisfaction result in increased market share and profit of

the organization.

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Gronroos (1984) states that satisfactions can gains from the passengers by better airline services. It is clear that

providing good services will lead to customer satisfaction. Gour(2009) explains the passengers are satisfied with

airline service quality dimensions like flight attendents; flight schedules; tangibles ; ground staff. Passengers are

satisfied with flight schedules. The satisfied passengers involve in the Word of mouth. Kim and Lee (2010)

examines that important measures for customer satisfaction are tangibles and responsiveness.

Rust and Oliver (1994) concludes that there is a positive and strong correlation between service quality and

customer satisfaction. Emerson and Grimm (1998) describes in his model that satisfied customer will turn to be

loyal customers. This will lead to customer retention and improve customer purchasing behavior. Looy et

al.,(2003) describes perceived and expected service presentation is customer satisfaction. Archan .A .R and

Subha M.V reveals that the factors of service quality that influences the passenger’s satisfaction in air transport.

The study discloses three dimensions that are correlated with passenger’s satisfaction. Cuisines, seating Safety

are the first dimensions. The second dimension is in-flight digital service quality. Back office operations is

another dimensions. In addition to it the study also explains satisfaction is based on different airlines service

offered.

Yeon and Chan (2011) reveals that customer satisfaction is more related with Repurchase intention than service

quality attributes .Neeraj Kausik, V.K. kausik and Girish Taneja reveals that Customer satisfaction is based on

the airline ticket the customer is choosing for the travel. Usman Khan and Noreen Khan(2014) reveals that

Airlines with highly satisfied passengers are getting more customers. Stank et al(1999) examines that customer

satisfaction can increase profit of the organization because it influences repurchase intention. Yee et al.,(2010)

found that employee loyalty affected service quality and service quality affects customer satisfaction. Dresner et

al.,(1995) reveals that there is a link between customer satisfaction and financial performance.

THE CONCEPT OF CUSTOMER LOYALTY

Customer loyalty is first element for success and profit of the organization because loyal customer will

purchase the service again and again. Jacoby and Kyner(1973) defines loyalty as “behavior that is assessed in a

variety of re-buy , Word of mouth and developing dimensions with the possibility of a relation.(Dehghan and

shahin, 2011).Kotler and keller(2008) defines customer loyalty as” a deeply hels commitment to re-buy or

repatronize a preferred product or services in the future despite situational influences and marketing efforts

having the potential to cause switching behavior”.

Gomez ,Arranz and Chillan (2006) found that are less price sensitive and it is easy to communicate with them.

Kottler and Keller (2012) reveals that Frequent flyers for every airline are succeed by retaining customers.

Dehghan and Shahin (2011) found five dimensions of loyalty: repurchase, resistance to switch, word of mouth,

identify services and preference for a service provider. Olsen (2007) that there are different variable that

strengthen the relationship between customer satisfaction and loyalty. The variables includes trust, commitment

and level of consumer involvement. Luo and Bhattacharya(2006),repurchase intention was a measure of online

consumers and experience. Kim and Kim (2004) states that consumer repurchase intention can affect if the

company provides detailed product information, consumer feedback and quality image can increase customer

satisfaction.

Meyer- Waarden (2008) identifies method to develop loyalty using frequent flyer program to repeat

purchase. Park, Robertson and Chung- Lung(2005) found that service quality leads to customer loyalty through

direct or mediating effect of customer satisfaction. Han, Kwortnik and Wang (2008) concludes that important

determinant of loyalty is service quality, service fairness, customer satisfaction, commitment and trust. Zhaohua,

Yaobin, Kwok and Jinlong (2010) identifies that customer satisfaction have an impact on customer loyalty

through number of factors. Andrian Gunawan (2015) examines that marketing mix has direct influences on

customer loyalty.

Wang and Tsai (2014) found that there is a positive and direct effect between brand image, perceived

value, perceived quality and loyalty. Customers expect better services which result in a habitual buying behavior.

Jones and Sasser (1995) reveals that customer loyalty comprises of recent purchase activities, re-purchase

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intention, and recommendations intention. Oliver (2014) found that customer loyalty comprises of following

division: Attitudinal and behavioral loyalty. Attitudinal loyalty is the degree of favorable disposition to a

particular company and Behavioral loyalty refers to recommendations and re-purchase of brand (Chaudhuri and

Holbrook, 2001). Reinartz and Kumar (2000) found that Loyal customer are those who strongly believe airline

will satisfy their present and future wants and they don’t book competitors airlines. This loyalty will create long

relationship between customers and airlines. Gronroos(2000) reveals that is longer interest and willingness of

customers to buy the product and use it and recommend the airlines to other. Therefore loyalty means not only

the loyal behavior but also the positive feelings towards the airlines.

Chang and Hung (2015) states that low cost carriers can increases customer loyalty through frequent flyer

program and convenient channel of booking in Asian countries. Curry and Gao(2012) found that LCC

passengers are suspicious and due to internet they are getting “Value for Money”. There is trade-off, customers

use low cost carrier’s offer price savings with service quality improvements. Chung and Hung (2013) used

behavioral loyalty to evaluate repurchase intention in low cost carriers. Behavioral loyalty is the real loyalty of

passengers to purchase.

CONCEPTUAL FRAMEWORK AND RESEARCH HYPOTHESIS

Based on the review of literature studied above, a conceptual model framework is created and figured.

This model represents the Hypothetical relationship between the constructs of airline service quality, customer

satisfaction, attitudinal loyalty and behavioral loyalty.

Influence of Airline Service quality on Customer satisfaction

Abundant research shows a positive influence of service quality on customer satisfaction. Cronin and Taylor

(1992) reveals casual relationship exist between service quality and customer satisfaction. Raditha et al.,(2015)

investigates the positive and significant relationship exist between service quality and customer satisfaction. It

means that higher the service quality, higher the customer satisfaction. Therefore it is important to study the

relationship between service quality and customer satisfaction. Based on the review hypothesis is framed as

follows:

H1: Airline service quality has positive and significant influence on customer satisfaction.

Influence of Airline customer satisfaction on Attitudinal loyalty

Forges et al.,(2010) investigates the loyalty of airline passengers who flown from London to Barcelona.

The result exposed that customer satisfaction influences customer loyalty strongly. C.K.M. Lee et al.,(2018)

inspect the attitudinal loyalty influences by customer satisfaction. It is found that airlines maintain better

relationship with customer through loyalty programme. Considering above studies the hypothesis is framed as

follows:

H2: Customer satisfaction positively influences the attitudinal loyalty of airlines.

Influence of Airline customer satisfaction on Behavioral loyalty

Behavioral loyalty is important from airlines point of view which is influenced by customer satisfaction.

Mateja Kos Koklic et al.,(2017) reveals that customer satisfaction positively influences behavioral loyalty. It is

SERVICE

QUALITY

CUSTOMER

SATISFACTION

NNNNNNNNnN

NNNNNNNN

ATTITUDINAL

LOYALTY

BEHAVIORAL

LOYALTY

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clear from the study that customer satisfaction strongly determines intention to purchase and recommend the

airline to others. Yu- chiou et al.,(2010) investigates the relationship between customer satisfaction and

behavioral loyalty. Based on previous studies it is evident to study the influence of customer satisfaction on

behavioral loyalty.

H3: Customer satisfaction influences positively behavioral loyalty.

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