Khóa luận tốt nghiệp tiếng anh:The Influence of Ground Service Quality and Inflight Service Quality on Customer Satisfaction: A case study of Vietnam Airlines

Shu Te UniversityCollege of ManagementGraduate School of FinanceMasterThe Influence of Ground Service Quality and Inflight Service Quality on Customer Satisfaction: A case study of Vietnam AirlinesStudentShu Te UniversityCollege of ManagementGraduate School of FinanceMasterThe Influence of Ground Service Quality and Inflight Service Quality on Customer Satisfaction: A case study of Vietnam AirlinesStudent：Kim Thi Thu HuyenAdvisor: Dr. PKim Thi Thu HuyenAdvisor: Dr. PiiYen ChenCoAdvisor: Dr. Ho Thuy NgocJune, 2014ShuTe UniversityGraduate School of FinanceThesisThe Influence of Ground Service Quality and Inflight Service Quality on Customer Satisfaction: A case study of Vietnam AirlinesKim Thi Thu HuyenJune 2014

Shu - Te University College of Management Graduate School of Finance

Master

The Influence of Ground Service Quality and In-flight Service Quality on Customer Satisfaction: A case study of

Vietnam Airlines Student： Kim Thi Thu Huyen

Advisor: Dr Pi-Yen Chen Co-Advisor: Dr Ho Thuy Ngoc

June, 2014

The Influence of Ground Service Quality and In-flight Service Quality on Customer Satisfaction: A case study of Vietnam

Airlines

Student: Kim Thi Thu Huyen Advisor: Dr Pi-Yun Chen Co-Advisor: Dr Ho Thuy Ngoc

A ThesisSubmitted toGraduate School of Finance College of ManagementShu-Te University

In Partial Fulfillment of the Requirements

for the Degree ofMaster of Business Administration

Majoring in Finance

June 2014

Shu-Te University Graduate School of Finance The Influence of Ground Service Quality and In-flight Service Quality on Customer Satisfaction: A case study of Vietnam

Airlines Student：Kim Thi Thu Huyen Advisors： Dr Pi-Yun Chen

Co-Advisor: Dr Ho Thuy Ngoc

and the level in model The research method is quantitative with multivariate statisticalanalysis steps such as: testing by Cronbach Alpha coefficient, regression analysis The online questionnaire was used for this research to collect the VietnamAirlines’ customer opinion about the Vietnam Airlines’ services From the analyzing of

134 respondents, result of the research shown that service quality had different level ofimpact on customer satisfaction at each step of service in which service quality hasextremely strong impact on customer satisfaction in term of Check-in service, Boardingservice and In-flight service Service quality has weak impact on customer satisfaction

in Airport service due to this service not only offer by Vietnam Airlines but also offer

by the other company Base on the result of the analysis, it can be concluded that theservice quality has important role for service provider such as Vietnam Airlines toimprove their competitiveness

In addition, the research results also show some suggestion for improving theVietnam Airlines services as well as indicate the limitations of the research

Keywords: Service quality, Customer Satisfaction, Customer complaint, Airline

service, ACSI model

During the performance of this thesis, I have received much assistance from thepeople who help me to complete the thesis I could not finish this thesis without helpingform them, so I wanted to express my deep gratitude to those people

First, I would like to express my most sincere thanks to the teachers of theUniversity SHU-TE and the Foreign Trade University Hanoi, Vietnam who taught meand helped me throughout the course

Next, I would like to express my special thanks to Dr Pi Yun Chen fromUniversity of SHU-TE and Dr Ho Thuy Ngoc from Foreign Trade University Hanoi,Vietnam who are my advisors and gave me guidance and useful feedback to completethe thesis

I would like to thank my MBAF4 classmates who shared document and help meduring the implementation of this research I also thanks for my colleagues who work inVietnam Airlines especially the people working in Marketing Department and Planning

& Development Department They help me to get the Vietnam Airlines serviceinformation and delivering the questionnaire to the Vietnam Airlines’ Frequent FlyerProgram’ members

I would like to thank my friend in Vietnam Airlines Informatics Department whohelp me to collect and analyze the data of this thesis

Finally, I really thank my family who gave me mobilization and encouraged meduring the learning process and the implementation of this thesis

Thank you very much!

Kim Thi Thu Huyen (MBAF4 – SHU-TE University)

Table of Contents

Abstract i

Acknowledgements iii

Table of Contents iv

List of Tables vii

List of Figures viii

CHAPTER 1 INTRODUCTION 1

1.1 Research background 1

1.1.1 Introduction to the context of the Aviation Industry in the world 1

1.1.2 The context of the Aviation Industry in Viet Nam and Vietnam Airlines 2

1.1.3 The necessity of researching the influence of service quality on Vietnam Airrlines’ customer satisfaction 4

1.2 Research motive 4

1.3 Research purposes 6

1.4 Research questions 7

1.5 Research procedure 7

CHAPTER 2 LITERATURE REVIEW 9

2.1 Services in Airline Industry 9

2.1.1 Services Chain in airlines industry 9

2.1.2 Airlines Service attributes 11

2.2 Service quality, Customer satisfaction 16

2.2.1 Service quality 16

2.2.2 Customer Satisfaction 23

2.2.3 Relationship between Airline Service quality and Customer satisfaction 26

2.3 The evolution of satisfaction index model 27

2.3.1 The original SCSB 29

2.3.2 The ACSI 30

2.3.3 The ECSI 32

CHAPTER 3 RESEARCH DESIGN 33

3.1 Research model 33

3.1.1 Selected model 33

3.1.2 Reason to select the ACSI 34

3.2 Research hypotheses 35

3.3 Measurement of variables 37

3.4 Data collection and analysis 39

3.4.1 Research method 39

3.4.2 Questionnaire design 40

3.4.3 Sampling method and sample size 43

3.4.4 Data collection 44

CHAPTER 4 RESEARCH RESULT 45

4.1 Sample description 45

4.1.1 Highlights of Vietnam Airlines’ customers 45

4.1.2 Demographic information 47

4.2 Reliability, hypothesis test and discussion 48

4.2.1 Check-in service (CI) 48

4.2.2 Airports Service (AS) 53

4.2.3 Boarding Service (BS) 58

4.2.4 In-flight Service (IS) 62

4.2.5 Overall service 66

CHAPTER 5 CONCLUSION 72

5.1 Findings and contribution 73

5.1.1 Findings for Vietnam Airlines Services 73

5.1.2 Contribution 75

5.2 Implication 76

5.2.1 Check-in service 77

5.2.2 Airport service 78

5.2.3 Boarding service 79

5.2.4 In- flight service 79

5.2.5 For Vietnam Airlines employees 79

5.3 The limitations of the research 82

References 85

Appendices 88

List of Tables

Table 1 Vietnam Airlines Fleet to 2018 3

Table 2 Service quality aspects in airline industry (multiple sources) 22

Table 3 ACSI construct, measurement, questions 38

Table 4 Respondents’ highlight 46

Table 5 Result of Reliability Test for Check-in service 48

Table 6 Data of regression PVCI from ECI, SQCI 49

Table 7 Data of regression SCI from PVCI 50

Table 8 Data of regression CI from SI 51

Table 9 Result of Reliability Test for Airport service 53

Table 10 Data of regression PVAS from EAS, SQAS 54

Table 11 Data of regression SAS from PVAS 55

Table 12 Data of regression CAS from SAS 56

Table 13 Result of Reliability Test for Boarding service 58

Table 14 Data of regression PVBS from EBS, SQBS 59

Table 15 Data of regression SBS from PVBS 59

Table 16 Data of regression CBS from SBS 60

Table 17 Result of Reliability Test for Inflight service 62

Table 18 Data of regression PVIS from EIS, SQIS 63

Table 19 Data of regression SIS from PVIS 64

Table 20 Data of regression CIS from SIS 65

Table 21 Result of Reliability Test for Overall Service 67

Table 22 Data of regression from E, SQ to PV 67

Table 23 Data of regression from PV to S 68

Table 24 Data of regression from S to C 69

List of Figures

Figure 1 Service process model 9

Figure 2 Airline passenger lifecycle 10

Figure 3 Service process 11

Figure 4 Determinants of perceived service quality 18

Figure 5 Perceived service quality model 19

Figure 6 Systems approach to service quality 20

Figure 7 Components of Customer satisfaction 24

Figure 8 SCSB model 29

Figure 9 The ACSI 31

Figure 10 The ECSI 32

Figure 11 Research model - ACSI 33

Figure 12 Gender data 47

Figure 13 Age group 47

Figure 14 Occupation data 48

Figure 15 Result of ACSI in case of Vietnam Airlines Check-in Service 53

Figure 16 Result of ACSI in case of Vietnam Airlines Airport Service 57

Figure 17 Result of ACSI in case of Vietnam Airlines Boarding Service 62

Figure 18 Result of ACSI in case of Vietnam Airlines Inflight Service 66

Figure 19 Result of ACSI in case of overall service 71

CHAPTER 1 INTRODUCTION

This chapter will give the background of the research in which introduce theAirline Industry, history of Vietnam Airlines, present the research motive, the researchpurpose and research producer

1.1 Research background

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

Airline industry is necessary for the world as without air transportation, suchindustries as leisure and tourism would be affected and international business activitieswould become much more difficult to conduct (Tiernan et al., 2008) It is one of thebiggest industries in the world, reaching turnover of 18$ billion in profits as of 2010(IATA, 2011) and 501.2$ billion (Datamonitor, 2011) and hence providingremarkable amount of work places as well as taxation revenues to governments.There are two major issues affect the airlines profit (Kostama & Toivonen, 2012):firstly, financial crisis and terrorism threat impact to the industry growth: 11.9%industry growth in 2010 and 7.8% in 2011 (Datamonitor, 2011) While the expectedrecovery is slow, Airlines Industry growth estimate to reach only 7.4% in 2015(Datamonitor, 2011) Second, deregulation of airline industry in 1990s It is allowedlow- cost carriers (LLCs) to join the Airline market with new business model It atractthe customers away from traditional airlines Deregulation introduces the new servicesand more competition within the Airline industry, as well as provide customers morechance to select their flight In 2009, LLCs accounted for 32% of total market share inEurope In addition to existence of LLCs, airline industry has some thing change duringthe last few years, such as provide e-tickets, introduction of self-service check-inmachine, etc (IATA, 2011) In addition, according to Tiernan et al (2008/1), the airlineindustry has challenge to face with a competition from other modes of transportation,such as high-speed trains

Thus, the airlines attempted to cope with the challenges They have searched forthe new generation aircraft, fuel savings equipment and modern furniture to providequality services, to attract customers market revenue distribution Numerous oldergeneration aircraft such as B747, B767, ATR72-200, B737-500, etc gradually being

replaced by modern aircraft, new generation A380, B777, A321, 600/700/800/900, ATR72-500/600, etc To meet the trend of the market, themanufacturer of the aircraft and are continuing to research the new generation aircraftsuch as B787, A350, C series In addition, the worldwide airlines should find the way toimprove their service quality

B737-1.1.2 The context of the Aviation Industry in Viet Nam and Vietnam Airlines

Vietnam is developing country in the South East of the Asia continent Thepopulation is approximately 89 million (2010) and the mainland territory is about 331thousand square kilometre With a huge number of inhabitants, Vietnam is a prospectivemarket with both consumer and business opportunities Since Viet Nam joined WorldTrade Organization (WTO) in 2007, many foreign investor coming to Viet Nam to set

up their business in many different fields Thus, Airline industry in Viet Nam has manyopportunities to grow Evidence show that there are about 16 airlines choosing VietNam as one of their destination in their routes (E-Guide, 2006)

Currently in Vietnam, there are 06 air transport business Jetstar Pacific Airlines,VASCO, SFC (helicopter operator), VietJet Air, Air Mekong and Vietnam Airlines inwhich Vietnam Airlines has the largest market share The competition on domesticmarket and international market is a challenge for Vietnam Airlines To gain the highmarket share, Vietnam Airlines is no way other than to continuously improve servicequality Studying the services quality to find out the factors that need to be improved is

a survival matter to win the global competition (Vietnam Airlines Source) However,improving the service quality is an extremely difficult task and expensive, and itrequires a deep understanding of the elements of services and solution to improve thequality of each element to meet customer satisfaction lead to build up customer loyaltyfor Vietnam Airlines

History of Vietnam Airlines started from January 1956 as Civil AviationAdministration of Vietnam was established by the Government, it marked the comingout into society of the civil Aviation sector of Vietnam At that time, the flight team wasvery small, with only 5 paddle planes IL 14, AN 2, Aero 45, etc The first domesticflight was started in 9/1956

On 27/05/1995, Vietnam Airlines Company Limited was established based onassociating 20 enterprises operating the business of aviation service, taking VietnamAirlines as the core In 2006, Vietnam Airlines officially became the member ofInternational Air Transport Association and affirmed the quality of service bearing itsinternational standard On 10/6/2010, Vietnam Airlines officially became the 10thmember of SkyTeam, one of 03 global aviation alliances (Star Alliance, SkyTeam andOneWorld) Currently, Vietnam Airlines has 22 subsidiaries and affiliates VietnamAirlines has code share agreements with Skyteam member to connect flight to 1000destinations over the world To create the premise for the sustainable development inthe future, Vietnam Airlines implemented the development strategy of flight crew underthe direction of giving priority to selecting the plane types using advanced technology inthe civil aviation sector of the world such as Airbus A350XWB, Boeing 787-9.

Table 1 Vietnam Airlines Fleet to 2018

(Vietnam Airlines Website at:

Item Aircraft type Aircraft quantity

improve the service quality The research of service quality to find out the factors ofquality can be improved better; it is a vital issue to win in the global competition.However, the improvement of service quality is a very difficult and costly work, and toimplement this work, it requires having deep knowledge about the factors constitutingthe service and measures on improving the quality of each of such factors in order tomeet the customer satisfaction, lead to the creation of customer loyalty for VNA.Therefore, researching the influence of aviation service quality (ground and in-flightservices) on customer loyalty for VNA is very necessary, thereby; it is possible topropose the solutions on improving the feeling of customers on service quality of eachfactor as well as general quality to create regular customers for VNA.

1.2 Research motive

The world leading organization on evaluating the aviation firms - SKYTRAXcarries out the evaluation on service quality of aviation firms every year based onsatisfaction level of the customers The evaluation is implemented for service fieldssuch as Airport Service, Onboard Service, Cabin Staff, for the customers of aviationfirms over 100 different countries through the questionnaire for exploring the ideas ofcustomers and it is implemented through the means such as direct interview tocustomers, online survey, and delivery of questionnaire sheet to customers or throughtravel agencies

The most recently, it was in 2012, SKYTRAX evaluated that the service quality ofVietnam Airlines had much improvement in comparison to 2011 However, in 2012 and

2013, Vietnam Airlines will still maintain at the level of 03 stars and cannot reach to thelevel of 04 stars because many service aspects must be further improved (SKYSTRAX2012)

According to the development plan of VNA from now to 2020, VNA is expected

to reach the level of 04 stars in 2015 and 05 stars in 2020 With the evaluation ofSKYTRAX, in order to reach the objective of increasing the level for its service, VNAwill need much improvement in term of service quality and in many service aspects(Vietnam Airlines Sources)

In addition to basing on the annual evaluation of SKYTRAX to compare thequality of VNA with other aviation firms in the region and in the world, VNA regularly

has surveys for exploring the ideas of customers about service quality of VNA, fromthat point; it will evaluate the satisfaction level of customers to service quality of VNA.According to the evaluation of passengers on the flights of VNA in fourth quarters in

2012, service quality of VNA was at good level The customers complained much aboutservice quality of Vietnam Airlines such as meal on the plane, entertainment system,seat, service attitude of staff, especially regular happening of delay or cancellation offlight (Vietnam airlines quarterly survey report 2012)

On the other hand, on international airlines, VNA must regularly compete withlong-term and famous aviation firms: in the region, there are Singapore Airlines, ThaiAirways, and All Nipon Airways; in the world, there are British Airway, Lufthansa, AirFrance… In Vietnamese market, at present, VNA must compete with many domesticaviation firms such as Mekong Air, Jetstar Pacific, Vietjet Air Hence, Vietnam Airlinesmust improve the service quality to satisfy at the maximum level the demand ofcustomers and consolidating and improving the competitive capacity of VNA (VietnamAirlines Sources) If not improving the service quality, it also means that VNA will losegradually the market in not only international market but also in Vietnamese market.From the past up to now, there were many researches in the field of aviation Forexample, the research on quality of aviation service such as Solution on expanding themarket of VNA by Tran Thi Phuong Hien, 2003; Improving the quality of passengerservice at Noibai Airport Services Joint-Stock Company by Le Duc Long, 2000;Evaluation target and research on product quality of VNA by Nguyen Manh Quan,

2004 However, there is no research on influence of service quality on customersatisfaction and customer loyalty As a staff of VNA, in front of the competition ofVNA and with the aspiration of contributing a part into the development of VNA, Iwould like to research this subject in order to find out essential solutions for promotingthe development of VNA in particular and aviation sector of Vietnam in general

much about service quality of VNA (iii) the competition in the international anddomestic markets is increasingly violent; therefore, it is necessary to increase thesatisfaction of customer to service quality in order to improve the competitive capacity;that is driving force for implementation of this research Besides, the implementation ofthis research subject helps us:

1 Understand clearly the nature of aviation service quality, influence of aviationservice quality on customer satisfaction Understand clearly what the customers needand how to make the customers be willing to further use the service of VNA orintroduce to friends and relatives for using the service of VNA

2 Understand clearly the feature of each service type in the aviation service seriesand require the quality corresponding to each service type; have thorough grasp ofactual situation of aviation service quality, from that point, determine which serviceaspect needs maintaining the quality and which service aspect needs improving

3 As understanding clearly the nature of factors at sections 1, 2, it is necessary tofind suitable solution to not only overcome the weaknesses, unsuitability of each servicefactor but also improve the service quality, increase the customer satisfaction, from thatpoint, increase the customer loyalty to VNA

4 From that point, withdrawing the suitable competition strategy for VNA in eachperiod to increase the market share of VNA in Vietnam, in the the region and in theworld

1.4 Research questions

This research to be done to find out the factors impacting on the customersatisfaction for Vietnam airlines in field of Ground Service and In-flight service Theaffected level of each factor impact on customer satisfaction Especially, the researchfocuses on defining the influence of Ground service quality and In-flight service quality

on Vietnam Airlines customer satisfaction Thus, the research questions are:

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?

1.5 Research procedure

To implement this research, it is necessary to implement 07 steps:

Step 1: This is the first and very important step In this step, it is necessary to putforth the following questions and answer such questions:

- What issue do we intend to research?

- The necessity of researching such issue

- Why such issue must be researched and what is the purpose of researching thatissue?

Step 2: After determining the research object, we will have to collect the report,document, previous research subjects relating to the issues which we intend to research,previous research models which were applied for the fields similar to this subject Thereare evaluations on suitability or unsuitability or previous researches if they are applied

to this research subject

Step 3: Step 2 is the premise for step 3 From the evaluations of step 2, theresearcher will have to select the most suitable model to his research subject, state thereason why the researcher selects this model It is necessary to give out the hypothesisabout relationship among the variables, build the questionnaire to carry out the survey

on the basis of measurement scale of each variable

Step 4: Carry out information collection The information collection can beimplemented through website, email or giving directly the questionnaire to subjects to

be surveyed, explored the information The questionnaire must be clear, the questionsmust be concentrated, not too long For the surveys having foreign factor, thequestionnaire must have both Vietnamese and English After finishing the survey, carryout the data collection for implementing the analysis

Step 5: After having the data, we must carry out the data update accurately to thecomputer and use software programs for data analysis The data must be analyzedaccording to each measurement scale corresponding to each variable in order to see theinfluence level to each other among the variables

Step 6: We will have evaluations on influence to each other among the variables

on the basis of the result of data analysis at step 5 in order to see whether the hypothesis

at step 3 are true or false

Step 7: From the issues discovered at step 6, we will give out the conclusions,contribution recommendations to the research subject and state the limitations of theprocess of implementing the subject research.

CHAPTER 2 LITERATURE REVIEW

Plenty of researches carry out for services, service quality and customersatisfaction This chapter aims to provide an overview of the literature in this field.Firstly, service in airlines industry is discussed to introduce the airlines serviceattribute and details relevant to airline business are added Next, the service quality,customer satisfaction in airline industry is reviewed Discussion on customersatisfaction and expectations adds to understanding of importance of customersatisfaction and explains service elements Finally, customer satisfaction model isintroduced Especially, it will describe the details of ACSI model

2.1 Services in Airline Industry

2.1.1 Services Chain in airlines industry

Gliatis and Minis (2007) define that a service is a series of processes; and each

of those processes creates a different value for a service Each value of servicedepends on service attributes (characteristics) Similarly, Chen and Chang (2005) saythat airline service as a chain of services; each service is made of a sequence ofprocesses A service process is divided into ground and in- flight services (sub-processes) Chen and Chang (2005) also suppose that both have to be evaluatedindividually, a customer is not very likely to create the difference between them.Thus, t his r e s e a r c h describe the service process from a customer’s perspective, aprocess that coverts inputs to outputs through service process when customer useair transportation Service process include of sub-processes, each of sub-processescreating towards a service in question Thus, conclusion can be made as Figure 1

Figure 1 Service process modelGronroos (1982) and Parasumaran et al (1985) suggest that the customer enterinto a service process with certain expectations, made by word of mouth priormarketing campaigns or experiences etc The expected service has an impact on theservice process itself as well as the output of the process, i.e perceived service.Perceived service quality is different between expected and perceived services asParasumaran’s (1985) gap model

Kelley (2012) suggests the service process is based on the airline passengerlifecycle, which consists of five steps as Figure 2 below

Figure 2 Airline passenger lifecycle

(Kelley, 2012)The airline passenger lifecycle evaluate the opportunities for value creation.The author assumes that an airline has an opportunity to c r e a t e value for thecustomer between each stage of lifecycle Nevertheless, Carlzon (1989) assumes thatthe cycle seems rather generalized and misses such value creation aspects likeinteraction with airline staff

The service process includes process and attributes which define what importantservice delivery of the step is Similarly to Kelley’s (2012) lifecycle model, theprocess model is evaluating what are the customer expectations of the serviceprocess, and where the value is generated Johnson et al (1995) suppose that suchapproach is helpful for realizing areas of service should be improved

The service process (Figure 3) was redesigned based on the performance ofbooking process and Finnair flights AY0715 / AY0718 (Helsinki-Prague-Helsinki) in April 2012 and make discussions with tar get group membersand their perception Decision relating to the trip even it is part of the entire

perception However, it has nothing to do with actual services that the customer faces,thus it is not taking into account.

Figure 3 Service processChang and Yeh (2002) state that way to measure service quality is to define anumber of service attributes Hence, service process is divided into 07 steps,each step represents a point where a customer may experience different types ofservices E ach step shall be appointed as service quality attributes (Chang & Yeh,2002; Gilbert & Wong, 2003; Park et al., 2004; Chen & Chang, 2005) Serviceprocess can be found from Figure 3

2.1.2 Airlines Service attributes

(1) Ticket purchase

Nowadays m o s t o f tickets purchasing a r e through travel agencies or online.Nevertheless, call centers still exist, and it is available for customer to ask forinformation and purchase the ticket there It can be assumed that the ticket purchasingmight happen at the check-in counter without direct contact with the airline before.Carlzon (1987) states the key aspect of service experience, called ‘moment of truth’was the customer firstly contact with the company’s front line employees (or, moreprecisely, first 15 seconds of it) – in case of ticket purchase, it was a booking on thephone The online booking process became much easier: t h e information isavailable 24/7 and the customer freely select between various offers, flight scheduleand different prices etc Hence, now it becomes more difficult for an airline to

compete with the others due to it is so easy to compare with various offers.

Ticket purchase include several steps: searching for information, ticket selectionand booking process Currently a number of intermediaries are available to provide asource of information for travelers, such as www.cheapoair.com , www e bo o k er s f i www.shermanstravel.com, etc Some of websites not only provide theinformation but also provide the direct ticket purchasing while the others onlyprovide information and ticket purchasing happens on other websites ore

airline own home pages The following attributes are for ticket purchasing process:

* Easily available information on ticket prices, flight schedule etc

* Ease, accuracy and speed of booking

The check-in attributes are as follow:

* Ease, accuracy and speed of check-in

* More than one check-in counter are available

* The Airline staffs are courteous and helpful in case of using regular

check-in or have trouble with check-check-in machcheck-ine

(3) Airport Services

Airport infrastructure affects customer perception of service quality (Rendeiro

& Cejas, 2006) Airport services are services occurred after check-in and finish atthe boarding Airport services consist security check, duty free shopping, restaurantservices etc and may include the services such as currency exchange kiosks, touristinformation, transportation to nearby hotels etc Also, provide the internet access toinform the delays, cancel or potential queues can be done to the customers.

Normally, passengers do not spend much time at the airport, howeverpassengers might have to spend several hours at the airport in case of transit forinternational flights In such event, variou range of services shall be required bypassengers, and, in addition to such basic things as toilets, shops, cafeterias, restauranttravelers may need places to take a short nap, kid place, wifi, place for using theircomputer, telephone charging equipment event might need showers, etc Actually,international airports with lots of flights have much more services compare to smallerlocal airports

As discussed in section 2.1.1 above, airports tend to get more innovation ofservices such as picture gallery, book shops, spa in Helsinki-Vantaa airport(discontinued due to unprofitable) etc The value added by such services is aninteresting topic to discuss, however, it is not taken into account of this research.Hence, the most important attributes for airport services process as follow:

* The airport has all necessary facilities and is clean and up-to-date

* The airline has comfortable waiting lounges

* Airport staff is courteous and helpful

(4) Boarding services

Gilbert and Wong (2003); Tiernan et al (2008) suppose that on-time service isone of the most important airlines service quality aspects, the key for success here

is on-time departure/arrival Carlzon (1987) suggests passengers evaluate the

punctuality not only by on-time arriving, but also by on-time departure Hence, itcan be said that on-time leaving and on-time arriving is a key factor of airlines servicequality (Gilbert & Wong, 2003) As commonly known, in many cases delays/cancelbeyond the direct control of an airline (e.g bad weather, strike…) In addition,Boarding service consist the services such as the facilities to access the plane, thespecial services for people who flight with kid, services for old people Thus, t he

attributes of Boarding service are as follows:

* Clearly Announcement for Boarding service

* Convenient facilities to access plane

* The flight departs at a time it promises

* In case of delay, airline immediately makes an statement and provides allnecessary information (time of waiting, possibility to receive food vouchers,accommodation or replaced flight or refund)

(5) Onboard Services

Recently, services onboard have developed Introduction of in-flight shopping anddeveloping technology that led to interact video and audio entertainment system Forexample, KLM offers various kinds of entertainment opportunities such as languagecourses, music, TV programs, books, games on its international flights (KLM.com,2012/1) In short haul flights, entertainment possibilities are usually limited and someairlines provide such as own magazines, free newspapers, online shopping etc In addition,the airlines can provide the wifi access possibilities during the flight, various option ofmeal Thus, on board services consist of the following attributes:

* The aircraft has clean and comfortable facilities and seats

* The airline has various choices of in-flight entertainment facilities/programs

* The airline offers onboard shopping with wide selection of products

* The airline offers fresh and various options of food and beverages

* The airline employees are courteous and helpful during the flight

(6) Arrival

As mentioned above in Boarding service process, on-time arrival is a key factor ofcustomer’s perception of good service quality The questions at the Boarding serviceprocess are covering the importance of arrival

(7) Post-arrival Services

Westwood et al (2000) state, another factor at arrival stage is post-arrival servicessuch as assistance upon arrival, lost & found luggage services etc Gilbert and Wong( 2003) state, the key component here is lost and found luggage (delayed, damage ormissing) Nevertheless, it is noted that often airlines outsource their luggage handing

to third party supplier (may be local airport services, or by a company provide theservice on leasing base) and thus are not directly provided by the airlines itself T hebaggage service can be impacted by a various factors such as peak day times, holidayseasons etc However, from point of view of the customer, they still think that thoseservices served by the Airlines, and thus it is necessary for the airlines to make surethat the service is good on this stage too The attributes of Post-arrival services are:

* The airline has other related partners to provide services such as travelinsurance, hotel, car rentals where you can earn extra miles or get discounts

* Promptness and accuracy of baggage delivery

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

2.2 Service quality, Customer satisfaction

2.2.1 Service quality

(1) Definition of service quality

Service quality can be defined only by customers and that it occurs when a serviceorganization provides service that satisfies the customer’s needs (Metters et al., 2003).Thus, simply speaking, service quality is defined as the satisfaction of customerexpectations However, service quality is a complex construct which has multi-dimensions or multi-facet characteristics To verify the dimensions of service quality, a

considerable number of researches have been reported during the last twenty-five years(Lee, 2010a) Specifically, Gronroos’s (1984) two-dimensional model can be described

as follows: 1) technical quality is “what a customer receives,” and 2) functional quality

is “how a service is provided or delivered.”

On the other hand, some researches conducted by Parasuraman et al (1985) inseveral industry to develop and define SERVQUAL, a multiple-item instrument toquantify customers’ assessment of a company’s service quality Their scale involvedexpectations-perceptions gap scores along five dimensions: reliability, responsiveness,assurance, empathy, and tangibles (Metters et al., 2003)

Three years later, Parasuraman and his colleagues (1988) defined perceivedservice quality as “the consumer’s judgment about the superiority or excellence of aproduct,” and confirmed the five-dimension model

Nevertheless, Cronin and Taylor (1992) and Teas (1993) argued that perceivedservice quality is superior to the “perceptions-minus-expectations” measures According

to Parasuraman et al (1988), Bolton and Drew (1991), Cronin and Taylor (1992) andLee 92010a), service quality can be described as a form of attitude that is related but notequivalent to satisfaction, which results from the comparison of expectations withperformance

Service quality has become a important factor for companies to make differencetheir products and services with other competitors Many researchers suggest thatcustomers evaluate service quality by making comparison what the customer feel forproduct/service the sellers offered and compare it against the seller's actual serviceperformance (Gronroos, 1982)

(2) Measuring Service Quality

Edvardsson (1992) states that quality is a driving force for customersatisfaction, improved competitiveness and profitability As for service quality, e.g.American Marketing Organization defines it in two ways: first, high quality service is

a providing of service that meets and exceeds the expectations of the customers;second, it is an area of study that describes and defines how services are provided tosatisfy the service recipient

Parasumaran et al (1985) suggest service quality is defined by the customer

evaluation of service outcome and service process as well as a comparison ofcustomer expectations with service performance Hence, service quality can be said

as the fulfillment between current service level and customer expectations

Park et al (2004) define service quality as a consumer’s overall impression ofefficiency of an organization and its services Thus, customer satisfaction is a changemade based on a specific service Chen & Chang (2005) suppose that service quality is

a process, and in case of airline industry, the authors classified Airlines services intoground services and in-flight services and assume that passengers’ perceptionare different for each of the processes

Measuring service quality has proven to be challenging for both theresearchers and companies due to its characteristics (Parasumaran et al., 1985;Johnson et al., 1995; Tiernan et al., 2008) Johnson et al (1995) suggested thatservice quality cannot be only measured by considering s e r v i c e p r o c e s s but a l s ohas to evaluate outcomes of service process, e.g Customer-employee interactionand employee t r a i n i n g Hence, measuring all aspects of service is im po rt an t tounderstand the service quality

Developed by Parasumaran et al in 1985, SERVQUAL is the most famousservice quality model The researchers say that quality is a comparisonbetween expectations and performance, i.e How well the service is deliveredmatches customers’ expectations Gronroos (1982) also made same statement TheSERVQUAL-model measures difference between what customers expect from theservice and how customer perceives it Parasumaran et al (1985) identifies five gaps:

* Gap 1: consumer expectation – management perception gap,

* Gap 2: management perception – service quality specifications gap,

* Gap 3: service quality specifications – service delivery gap,

* Gap 4: service delivery – external communications gap,

* Gap 5: expected service – perceived service gap

Service quality, according to this model, depends on the size of Gap 5(expected service – perceived service gap), which in its turn depends on previous fourgaps, i.e

Gap5 = f(Gap1, Gap2, Gap3, Gap4)

Parasumaran et al (1985) identifies ten key determinants of service quality tomeasure perceived service, which impact both expected and perceived services, andthrough those, affect to perceived service quality (Figure 4) Expected service is alsoimpacted by personal needs, word of mouth as well as experience.

Figure 4 Determinants of perceived service quality

(Parasumaran et al., 1985)After that, Gronroos presented another service quality model in 1982 He stated

two types of service quality: technical and functional Technical quality is what a

customer is receiving from a service He realized that the customer is interested not

only in the result of service process, but also in a process itself Thus, functional quality is the way in which the service is delivered In addition, there is image quality,

i.e corporate image Both functional and technical quality aspects generate imagequality Beside, the factors such as ideology, marketing activities as well as word-of-mouth impact on image quality These types of service quality are identified b yLehtinen and Lehtinen (1982) Based on these, Gronroos (1982) presents thefollowing model (Figure 5)

Figure 5 Perceived service quality model

(Gronroos, 1982)

In the model, Gronroos (1982) defines perceived service quality of a service

as the outcome of an evaluation process, where the consumer compares his/herexpectations with the service he/she perceives he/she has received Moreover, in hislater study Gronroos (1993) defines that measuring customer experiences providesclose approximation of service quality

Johnson et al (1995) carry out another study for measuring service quality Ameasure of overall service quality should include judgments of all components of service:inputs, processes and outputs (Figure 6), all of which play essential roles in a company’soperations Hence, in addition to outputs, a company’s inputs and processes affect acustomer

Figure 6 Systems approach to service quality

(Johnson et al., 1995)According to Johnson et al (1995), service quality relies on quality of eachthree dimensions: quality of inputs, quality of processes and quality of outputs.Input quality refers to e.g equipment that is waiting areas are clean andcomfortable, e q u i p m e n t i s up-to-date, s e r v i c e p rovider’s employee hasknowledge and skills Next, process quality is a quality of interaction betweenprovider and customer Often, customers are directly impacted by serviceproduction process; thus, availability, accessibility and service provider’s willingness

to assist are parts of process quality Output quality refers to the result of serviceprovision and includes both tangible and intangible benefits; it means changes in thecustomer’s mental/ physical state or a change in something that the customerpossesses Johnson et al (1995) tests systems and concluded that the customerevaluate quality by considering multiple aspects of output, process and input, withinput almost insignificant and output being most important Process was important intransportation industry

The perception of service quality much more depends on the expectations ofusing the services There are several models on service quality; subjectivity is thebottom dimension of service quality Although the some above models can offerstructure to the concept of service quality by dividing it into components andidentifying the gaps between how the service is perceived by the provider and thecustomer, however the models do not provide clear guidance how to measure the

service quality Chang and Yeh (2002) suggest, service quality might be measured

by identifying a number of attributes to measure expected and perceived serviceseparately and defining the gap between them

(3) Service Quality in Airline Industry

Distributing high service quality by clearly understanding customerexpectations is a key for Airlines to succeed and survive in very compe titiveenvironment (Gilbert & Wong, 2003; Chen & Chang, 2005) High level of servicequality is vital to acquire and retain loyal customers (Chang & Yeh, 2002)

H o w e v e r , service quality in airline industry is publicly discussed and o f t e ncriticized The on-time arrival rates dropped remarkable and the rate of damagebaggage reached 6.5 per 1000 passengers in 2006 (Tiernan et al., 2008/1) in US In

EU, several measures have been m a d e to innovate service quality and deregulation

of airlines industry gave EU passengers more power in case of delayed or cancelledflights to get compensation for failure of an airline to provide the service Since then,there is increasing the number of complaints as the customers have more right overtheir own flight experience (Tiernan et al., 2008/1)

Deregulation of the Airline industry in Europe in 1990s and in US in the end

of 1970s has changed the customers’ point of view on service quality In previousperiod, service quality were some variable such as flight frequency, load factors,and aircraft type (Tiernan et al., 2008/1) T oday, service quality has shiftedtowards customer satisfaction and loyalty, which results to i m p r o v e competitivecapability As service quality is more visible, passengers may use it as a basis forevaluating the overall quality of an airline (Rhoades & Waguespack, 1999).Carlzon (1987) suggests the only true assets of the airlines are their customers.Jon Carlzon, former CEO of SAS, who led the company from near bankruptcy toprofitable and successful customer-oriented carrier within just two years, says thecustomer orientation is key factor and it is a prerequisite for business profitability anddevelopment Carlzon calls ‘moment of truth’ (i.e a first contact between airlineand a customer, remote or personal, which create the impression of customer

w i t h the airline) that lead customer satisfaction as well as customer loyalty.Moreover, he states that the service quality greatly r el ie s on the first encounter,

and highlights create and shape the customer experience and perception with frontline employees Agrees with Carlzon, Babbar and Koufteros (2008) states that themost visible service for customer is the c o n t a c t t o p r o v i d e r ’ s employees.Zomerdijk and Vries (2007) define customer contact is a direct communicationbetween a customer and a service provider and has an opportunity for interaction thattakes place at a same time The researchers identify a number of important servicequality attributes in airline industry that impact customer’s perception of a servicedistribute and thus generate the image of a Airlines The attributes are summarized inTable 2 below.

Table 1. Service quality aspects in airline industry (multiple sources)

Airline Service quality aspects Researcher(s)

Interaction with contact employees/ First customer

contact Carlzon (1987); Bitner, Booms & Tetreault

(1990)Airlines reliability (safety) Fick & Ritchie (1991)Courtesy, willingness to correct errors, friendliness, task

proficiency, tolerance Mersha & Adlakha (1992)Price, timelines, check-in process, on-board services,

food quality, seat comfort, baggage transportation &

safety

Gourdin (1998); Elliot &Roach (1993)

Seat comfort, courtesy of staff, safety Tsaur, Chang & Yen

(2002)Airport location and access, frequency and timings,

punctuality, seat accessibility/ticket flexibility, airport

services, in –flight services, frequent flyer benefits

Shaw (2007)

Employee’s service, schedule, frequent flyer program,

safety & reliability, on board service, on time performance Liou & Tzeng (2007)Flight schedule, total fare, flexibility, frequent flyer

program, punctuality, catering, ground services Teichert et al (2008)Level of concern and civility, individual attention, listening

and understanding, cheerfulness, courtesy, friendliness Babbar & Koufteros (2008)Mishandled baggage, overbooking, on-time performance,

Price, Airline brand, sleep comfort Boetsch et al (2011)Based on the above table, service quality attributes can be roughly divided

into performance-related attributes (such as punctuality and safety), service-relatedattributes (on board service, courtesy of staff, baggage transportation) and basicproduct attributes (seat comfort, flight schedule etc.) Parasumaran et al (1991)suggest, continuously providing consistent, reliable and fair services is a key toachieve customer loyalty.

2.2.2 Customer Satisfaction

(1) Definition of Customer satisfaction

Customer satisfaction can be identified as the customer's evaluation of aproduct service in terms of whether that product or service has met the customer'sexpectations and demand (Valarie et al., 2006) Satisfaction can be associated with thefeel of pleasure, feeling of fulfillment, ambivalence and relief with a mix of negativeand positive experience

Customer satisfaction can be defined using the transaction specific perspective orcumulative perspective The transaction specific perspective indicates that customersatisfaction is evaluated based on the recent purchase experiences (Boulding et al.,1993) The cumulative perspective is overall evaluations This indicates that evaluations

of customer satisfaction should be based on all the purchase experiences of thecustomer, disregarding any specific purchase experience (Johnson & Fornell, 1991).Parasuraman et al (1988) argued that the cumulative perspective is more capable ofevaluating the service performance of firms and more effective in predicting consumers’post-purchase behavior (Wang et al., 2004) Among the studies of customer satisfaction

in the information industry, Lin and Wang (2006) revealed that customer satisfaction ofmobile commerce is consumer’s total response to the purchase experiences in a mobilecommerce environment Therefore, in this study, customer satisfaction is defined as thetotal consumption perception of consumers when using mobile value-added services.(2) Component of Customer satisfaction

Extensive studies on customer satisfaction have led to the development of whichexplain the components of customer satisfaction Some authors perceived satisfaction as

an overall component while others conceptualize satisfaction as a product of customer’scomparison of the perceived performance of the service with some cognitive oraffective standards such as desire, expectation, perceived value or perceived service

quality (Oliver, 1980; Parasuraman, et at., 1985; Kolter, Wong, Saunders, & Armstrong,2005; Kotler & Keller, 2006) These components are conceptualized and displayed inFigure 7 below.

Figure 7 Components of Customer satisfactionHowever, for this research the components of satisfaction measured aresatisfaction with the services offer by Airlines These are interpersonal satisfaction,satisfied with price, staff performance, ground services, in flight services and overallsatisfaction among air travellers These components are considered important in thisresearch as each of them is empirically validated to have a significant impact oncustomer satisfaction (Oliver, 1980; 1993; Parasuraman et at., 1988; Khalifa & Liu,2002)

(3) Managing Customer Satisfaction and Expectations

The important aspect of customer satisfaction is to know customer expectations.Thus, Parasumaran et al (1991) states that all the customers expect is the basicservice that provider promise to deliver, i.e Fundamental service For example,hotel visitors expect a clean and secure room and polite staff Airline customers want

Desire

Expectatio

or affective standard Perceived

Overall customer satisfaction

to travel to their destination immediately and safely Price often shows customerexpectations, customer want more and better services if they pay more than averageprice, so the authors discuss, the price should equal to the level of service that isprovided.

Hereby, it can be argued that when such carriers like Ryanair and Finnairprovide the same service (air transportation) and the same service outcome isexpected (a customer reaches final destination), the process of distributing a service

is completely discrepancy Ryanair charges low price but provides only thelimitation of services, balancing the expectations with the price (low cost carrier).Whereas, Finnair offers higher price with more and better services (as a full-networkcarrier) Perception of service quality in those airlines will be different as well as thecustomer expectations and satisfaction will be different The dual nature of servicequality can affect its understanding and management

Another way to manage service quality and customer satisfaction is to find outwhere customer satisfaction is Silvestro & Johnston (1990) identified the followingservice quality factors:

* Hygiene factors, or dissatisfier (what is expected by customer, but will

not be a source of satisfaction, e.g clean service facilities)

* Enhancing factors, or satisfiers – (factors that leads to customer satisfaction

but failure to deliver does not cause dissatisfaction)

* Dual threshold factors (if such factors are failed to deliver, will cause

customer dissatisfaction However, if delivered above the specific level will causesatisfaction)

Cadotte and Turgeon (1988) also added neutral factors, factors that are less

impact to changes in performance, i.e have no influence on service quality perception

Gummesson (1991) also adds the love factor that he assumed to be n e g l e c t from

previous service quality research It consists of t h e g e n u i n e e m p a t h y withcustomer, w i l l i n g n e s s t o serve t h e c u s t o m e r and caring p e r s o n a l i t y Jones and Sasser (1995) state that only full customer satisfaction lead to customerloyalty as well as secure long-term profitability Especially it is essential on marketswith intense competition However, there is a difference between true long-term

loyalty and false loyalty T he carrier keeps the customer happy not only byfrequent flyer miles program, but also by providing high services consistently,the loyalty is true, and customer will stay with the carrier While, f alse loyalty isadjusted by factors such as governmental regulations on competition, proprietarytechnology, high switching costs or loyalty promotion programs such as frequentflyer programs When the customer definitely satisfies with the service, they remainloyal Thus, the customer may not remain loyal and switch to another carrier, incase loyalty is false It is im po rt an t for a company to define their s targetcustomers, and deliver exactly the service that corresponds to their needs Heskett et

al (1994) define the same According to them, profit and growth are created bycustomer loyalty and loyalty in its turn is driven by customer satisfaction

Understanding customer satisfaction is necessary for any company in anyindustry to develop and gain profitable However, Carlzon (1987) defines customersare carriers’ true assets in airline industry Hence understanding and managingsatisfaction through service quality is very important, and requires larger attentionfrom carriers in completive environment nowadays

2.2.3 Relationship between Airline Service quality and Customer satisfaction

Service quality and Customer Satisfaction have been linked together as shown bymany previous studies (Smith & Houston 1983, Kotler 1988; Kaspar & Lemmink, 1988,Lewis & Klein 1986, Bolton & Drew, 1991) These research showed that overallcustomer satisfaction with a service could be positive and substantial when the servicequality is high this means the deliver of service is perceived as equal to or better thanexpected service (Nguyen, 1991) states a strong relationship between satisfaction andperceived service quality

Satisfaction with low quality can exist whenever a person’s expectation in a givensituation is low and performance is adequate to the task According to Oliver (1993),dissatisfaction with high quality can ensure when some elements of service delivery arenot up to personal standards (i.e when a person’s expectation are higher than thosenormally used to evaluate quality are)

On the other hand, literature shows that performance of the service is seen to bebetter predictor of overall service quality (Parasuraman et al., 1991; Babakus & Boller

1992) and performance alone explain most of the variation in satisfaction (Churchill &Surprenant, 1982; Bolfing & Woodruf, 1988, Tse & Wilton, 1988; Swan, 1989) Teas(1993) suggests, performance is defined as the degree to which products possess certaindesired characteristics or deliver certain benefits.

Cronin and Taylor’s (1992), Teas (1993) state that the direction of causalitybetween service quality and customer satisfaction is an important unresolved issue.Cronin and Taylor report that service quality leads to customer satisfaction and not viceversa Nevertheless, there is a lack of consensus in the literature among researchersabout causality between the two constructs Many service quality researcher report thatcustomer satisfaction leads to service quality, while customer satisfaction researcherhave an opposite causal direction between two constructs Teas (1994) argues theseconflicting perspectives may be due to the global or overall attitude focus in mostservice quality research in contrary to the transaction focus in most customersatisfaction research

2.3 The evolution of satisfaction index model

In this research, some satisfaction index model were introduced and discussedwith the purpose to find out the satisfaction index model which is suitable for VietnamAirlines in analyzing the influence of Vietnam Airlines’ service quality on VietnamAirlines’ customer satisfaction The following are satisfaction index model, which arestudies in previous researches

Established in 1989, the Swedish Customer Satisfaction Barometer (SCSB) wasthe first national customer satisfaction index for domestically purchased and consumedproducts and services (Fornell, 1992) It has researched with 130 companies from 32 ofSweden’s biggest industries The American Customer Satisfaction Index (ACSI) wasintroduced in the fall of 1994 and included approximately 200 companies from 34industries (Fornell et al., 1996) The Norwegian Customer Satisfaction Barometer wasintroduced in 1996 and, as of 1999 (Andreassen & Lervik, 1999; Andreassen &Lindestad, 1998a), reports results for 42 companies in 12 different industries (bothbusiness-to-consumer and business-to- business) The most recent development among

indices is European Customer Satisfaction Index (ECSI) researched in four industriesand 11 countries in the EU (Eklof, 2000).

In reviewing the national indices, we focus on the ACSI model specification Thismodel is an evolution of the original Swedish model, has been adopted on a smallerscale in New Zealand and Taiwan (Fornell et al., 1996) and Austria (Hackl, Scharitzer,

& Zuba, 1996), and is the basis for the models being used in Norway and the EU.Therefore, a critical evaluation of the model is important to develop the best possiblemodel specification

It should be noted that satisfaction as an overall evaluation of the consumptionexperience resolves certain modeling issues De Ruyter et al (1996) consider that whilesome studies find satisfaction to drives a general perception of quality, the others findthat perceptions of quality drive satisfaction Nevertheless, if satisfaction is an overallevaluation of performance, more quality received is necessarily as an antecedent tosatisfaction (Johnson et al., 1995) All of the models illustrated and proposed herein,see quality as a driver of satisfaction

Reviewing satisfaction as a cumulative construct also indicates how measuresexpectancy-disconfirmation As Oliver (1980) assumes, disconfirmation is a logicalantecedent to satisfaction when modeling a given transaction Contrarily, expectancy-disconfirmation is one of some possible benchmarks that customers may judge thisoverall perception when operationalizing a customer’s evaluation of their experience todate Comparisons are also taken, e.g category norms, competing products, andpersonal values, all of them should reflect cumulative satisfaction as a latent construct(Johnson & Fornell, 1991) The solution within the national models is to evaluatesatisfaction using three survey measures: overall satisfaction, expectancy-disconfirmation, and performance compare with an ideal service

2.3.1 The original SCSB

The original SCSB - Swedish Customer Satisfaction Barometer model (Fornell,1992), shown in Figure 8, contains two primary factors of satisfaction: customerexpectations regarding the performance and perceptions of a customer’s performanceexperience Thus, perceived performance is relevant to perceived value, or theperceived service quality is relative to the price or prices paid Emery (1969) defines

quality per dollar or value is a common denominator that consumers use to comparebrands and categories The basic forecast is that as perceived value increases, thesatisfaction increases.

Figure 8 SCSB model(Fornell, 1992)The other factor of satisfaction is how well the customer expected the service orproduct to deliver Customer expectations are defined as that which a customer forecast(“will” expectations) rather than a normal standard or benchmark (“should”expectations; Boulding, Kalra, Staelin, & Zeithaml, 1993)

Oliver (1980) suggests, these expectations are positively affect on customersatisfaction due to they serve as cognitive factors in the evaluation process Whileperceived performance reach more recent experience, customer expectations reach acustomer’s prior consumption experience with a company’s products or services as well

as marketing and word-of-mouth information Because expectations predict a firm’sability to provide future performance, it is stated to have a positive effect on satisfaction

in the SCSB model (Fornell, 1992) Finally, expectations should be positively related toperceived value

The consequences of satisfaction in the original SCSB model are derived fromHirschman’s (1970) exit-voice theory The theory describes situations when customerdissatisfied with the products or services of the company The company realizes itsfailure to meet customer satisfaction via two feedback mechanisms, exit and voice Thecustomer either switch or stops buying from the company, or make their complaint ofdissatisfaction to the company in an effort to receive good re-action from company

Cusotmer Complaints

Cusotmer Loyalty