The researcher tries to find out the factors which influence customer satisfaction and also tries to check the relationship between customer satisfaction and customer loyalty. A primary research was conducted to collect the responses of the customers who like travelling.
International Journal of Management (IJM) Volume 11, Issue 3, March 2020, pp 354–365, Article ID: IJM_11_03_038 Available online at http://www.iaeme.com/ijm/issues.asp?JType=IJM&VType=11&IType=3 Journal Impact Factor (2020): 10.1471 (Calculated by GISI) www.jifactor.com ISSN Print: 0976-6502 and ISSN Online: 0976-6510 © IAEME Publication Scopus Indexed SERVICE QUALITY MEASURES: HOW IT IMPACTS CUSTOMER SATISFACTION AND LOYALTY Dr Bidyut Jyoti Gogoi Indian Institute of Management Shillong, Meghalaya, India ABSTRACT Tourism is a sector which invites lot of opportunities for increase in revenue generation and development and upgradation of the local economy The change in information technology has facilitated the proliferation of information which has benefited the tourism industry at large It has facilitated the ease to know about any tourist location, compare and make travel plans Any shortcoming of a location is easily identified and can be spread out within minutes through the social media The popularity of a tourist location is dependent on the level of satisfaction a customer gets from visiting the location The level of satisfaction comes from the exposure to various touchpoints associated with the location and the service provider The service quality associated with the delivery of services plays a great role in developing competitive edge of the service provider and in defining the factors of differentiation Since popularity of any service provider depends on the ecosystem on which it operates, it is important to understand the dimensions of service quality which leads to customer satisfaction and customer loyalty The researcher tries to find out the factors which influence customer satisfaction and also tries to check the relationship between customer satisfaction and customer loyalty A primary research was conducted to collect the responses of the customers who like travelling Keywords: SERVQUAL, Customer satisfaction, Customer loyalty Cite this Article: Dr Bidyut Jyoti Gogoi, Service Quality Measures: How it Impacts Customer Satisfaction and Loyalty, International Journal of Management (IJM), 11 (3), 2020, pp 354–365 http://www.iaeme.com/IJM/issues.asp?JType=IJM&VType=11&IType=3 INTRODUCTION Tourism is a service oriented business The quality of services play an important role in developing a competitive edge in the service business specially tourism (Bhat, M.A., 2012) For sustainable development of business it is necessary to benchmark and focus on customer services, efficient marketing, employee training and improving efficiency in operations (Bhat, http://www.iaeme.com/IJM/index.asp 354 editor@iaeme.com Dr Bidyut Jyoti Gogoi M.A., 2012) The attraction of a tourist location is dependent on the thrill and excitement it creates and the popularity of the location among the customers The success of a tourist location is totally dependent on the outcome of the services provided It is highly critical to monitor and upgrade the quality of service delivery to develop efficiency and traffic volume and stay afloat in the stiff competition (Garvin, 1983; Anderson and Zeithamal, 1984; Babakus and Boller, 1992) In service domain it is seen that improvement in quality helps deliver high customer satisfaction which influences the purchase intention (Oliver, 1980; Gremler et al., 2001) of associated services Firms concentrate on issues related to servicequality issues to improve customer's satisfaction (Kumar et al., 2008) Issues related to service delivery and quality are matters of concern for the firms associated with tourism Good quality services provide a memorable customer experience (Vieira, 2005) Popularity of a firm is dependent on various factors such as quality of services, support systems, infrastructure, and efficient supply chain In this paper the research measure the response of the customers on the factors which lead to customer loyalty The dimensions of service quality are used to see their impact on customer satisfaction which may enhance the loyalty of a customer towards a service provider LITERATURE REVIEW Tourism contributes 9.6% of the Indian GDP (ET) Travel and tourism generate INR 14.1 trillion and is considered as the 7th largest tourism economy in terms of GDP (ET) Tourism has transformed from a business of developed economies to a globalized industry (Meethan, K 2003) It has an impact both in economic and social wellbeing and development It is a key component in the economic development policy at all levels in nations around the world (Sharpley, Richard and Telfer & David J 2002) It holds significant role in upgradation and development of local areas Tourism is considered as one of the fastest growing sector in the last decade Managing quality of service has been a matter of concern Different tourists have different requirements due to cultural diversities and habits It is hard to predict the requirement of a particular tourist at any particular moment of time This is where it is found that service providers struggle to provide the desired services There is a need to understand the customer perception and service requirements to bridge the gap that exists in service delivery SERVICE QUALITY DIMENSIONS Service Quality is an important attribute of customer perception (Takeuchi and Quelch, 1983) The customers judge the attributes of service quality based on their expectations and the actual performance (Lewis and Booms, 1983; Parasuraman et al., 1985, 1988; Gronroos, 1987; Mackay and Crompton, 1990) Service quality is envisioning to achieve customer satisfaction for developing positive attitude towards the services provided (Ostrowski et al., 1993) Service quality is a critical attribute to focus by the service provider for more attraction (Backman and Veldkamp, 1995) Customers associate the physical environment to evaluate the service quality due to the intangible characteristic of services (Berry, 1980; Booms and Bitner, 1981) Customer perceived quality, the difference between the service expectations and service performance, is of significant importance in determining service quality (Lewis & Booms, 1983; Gronroos, 1984; Zeithaml, 1988; Parasuraman et al., 1983, 1985, 1994) Parasuraman et al (1985, 1988, and 1994) used both qualitative and quantitative research to develop the SERVQUAL (service quality) scale which is widely used measurement instrument of service quality SERVQUAL is an instrument for measuring service quality in five dimensions (Parasuraman et al., 1988) The SERVQUAL model developed by Parasuraman et al (1998), http://www.iaeme.com/IJM/index.asp 355 editor@iaeme.com Service Quality Measures: How it Impacts Customer Satisfaction and Loyalty identifies the service quality gaps Five dimensions of service quality tangibility, reliability, responsiveness, assurance, empathy were used to access the level of service quality along each dimension and overall (Parasuraman et al., 1988, 1991) The model helps analyze the strengths and weaknesses in service delivery (Bhat, M.A., 2012) SERVQUAL is a tool for measuring and managing service quality (Buttle, F., 1996) Service quality is found to have an influence on customer satisfaction (Bolton and Drew, 1991; Boulding et al., 1993) and aids customer retention (Reichheld and Sasser, 1990) and helps spreading positive word of mouth (Buttle, F., 1996) Service quality has a direct relationship with costs (Crosby, 1979), and helps improve profitability (Buzzell and Gale, 1987; Rust and Zahorik, 1993) In order to survive today and in the future the improvement in services are critical (Badler, H 2004) Firms in the tourism sector deals with both products and services which makes it quite difficult to attain desirable customer satisfaction (Chi and Gursoy, 2009; Dotson and Allenby, 2010) Increased competition, customer demands and availability of complex products and processes has increased the demand for providing better customer services Customer Satisfaction in service quality can be measured through the dimensions of service quality (SERVQUAL) viz tangibility (appearance of physical facilities, equipment, personnel, and communication materials), reliability (ability to perform the promised service dependably and accurately), responsiveness (willingness to help customers and provide prompt service), assurance (knowledge and courtesy of employees and their ability to convey trust and confidence), and empathy (caring, individualized attention the firm provides its customers) Service quality is important to generate favorable communications (word-of mouth) and satisfaction of the customer (Lang, 2011) The research intend to see if the dimensions of service quality has a role to play in enhancing customer satisfaction Based on this premise the following hypotheses are developed H1: Tangibility has a positive influence on customer satisfaction H2: Empathy has a positive influence on customer satisfaction H3: Reliability has a positive influence on customer satisfaction H4: Responsiveness has a positive influence on customer satisfaction H5: Assurance has a positive influence on customer satisfaction CUSTOMER SATISFACTION Customer service is important for good performance of a firm (Denizci and Li, 2009; Morgan et al., 2005) Good customer service leads to customer satisfaction In the hospitality and tourism sector, studies were conducted in the areas of lodging (Gagnon and Roh, 2008; Loureiro and Kastenholz, 2011), restaurants (Andaleeb and Conway, 2006; Arora and Singer, 2006; Namkung and Jang, 2007; Qin and Prybutok, 2008; Wu and Liang, 2009; Hwang and Zhao, 2010;), and tourism (Huang and Chiu, 2006; Wu, 2007) to understand the importance customer satisfaction Customer satisfaction is an important criterion for evaluating quality (Grigoroudis and Siskos, 2010) Customer satisfaction is a factor which influences firm performance (Luo and Homburg, 2007) and used in measurement (Morgan et al., 2005) of the firm’s competitiveness Customer satisfaction has a positive impact on return on investment and return on assets (Zeithaml, 2000; Rust et al., 2002) and net profit (Manafi et al., 2011) New customer acquisition costs five times more in terms of time, money and resources to servicing an existing customer (Kotler et al, 2016) Hence it is profitable for a firm to keep a loyal customer base A loyal base of customers can be maintained only if the customers find value in the firm’s offerings http://www.iaeme.com/IJM/index.asp 356 editor@iaeme.com Dr Bidyut Jyoti Gogoi A loyal base of customers helps in spreading positive word of mouth about a location and the services associated Based on the discussion above the following hypothesis is proposed H8: Customer satisfaction has a positive influence on customer loyalty Based on the premises developed a conceptual framework is developed as depicted in Fig Tangibility Reliability Customer Satisfaction Responsiveness Customer Loyalty Assurance Empathy Figure The Conceptual Model METHODOLOGY Descriptive research methodology was used for the research A primary survey was carried out to collect data from customers who liked to travel The research was carried out using a structured questionnaire The parameters for measurement used were Tangibility (TAN), Reliability (REL), Responsiveness (RESP), Assurance (ASSUR), Empathy (EMP), Customer Satisfaction (SAT), and Customer Loyalty (LTY) The survey was conducted in Assam and Meghalaya The sample size of the survey was 408 The respondents were customers who loved to travel Random sampling method was used Variables All the variables were measured on a five point Likert’s scale, representing strongly disagree to representing strongly agree DATA ANALYSIS Data was analyzed using SPSS 22 6.1 Gender Out of 408 respondents surveyed 66.2% were male respondents and 33.8% were female respondents http://www.iaeme.com/IJM/index.asp 357 editor@iaeme.com Service Quality Measures: How it Impacts Customer Satisfaction and Loyalty 6.2 Income 36.5% of the respondents have an annual household income of less than INR LPA, 59.3% of the respondents have an annual household income INR 400001 to LPA, 3.7% of the respondents have an annual household income of INR 700001 to 10 LPA, and 0.5% of the respondents have an annual household income of INR 1000001 to 13 LPA 6.3 Factor Analysis Table 1 TAN1 TAN2 TAN3 REL1 REL2 REL3 RESP1 RESP2 RESP3 ASSUR1 ASSUR2 ASSUR3 ASSUR4 EMP1 EMP2 EMP3 SAT1 SAT2 SAT3 LTY1 LTY2 LTY3 LTY4 Structure Matrix Component 0.732 0.687 0.956 0.816 0.778 0.785 Cronbach’s Alpha 0.769 0.770 0.878 0.681 0.546 0.686 0.634 0.572 0.920 0.722 0.777 0.915 0.899 0.897 0.738 0.809 0.750 0.632 0.910 0.914 0.926 0.997 0.742 0.861 Extraction Method: Principal Component Analysis Rotation Method: Promax with Kaiser Normalization Cronbach’s Alpha value of the overall reliability is 0.764 69.9% of the variance is explained by the factors in table The items are all distributed properly under the respective constructs Thus all the items under each construct are able to define the constructs well The Cronbach’s alpha reliability of all the individual constructs are 0.77 and above The overall Cronbach’s alpha reliability is 0.764 This meets the reliability requirement for the scale adopted 6.4 Regression Analysis Regression analysis is conducted to test the relationship between 1) SAT and (TAN, REL, RESP, ASSUR, EMP) 2) POP and SAT Hence Regression is done twice as shown below: Regression Model and Regression Model The results of the regression analysis is shown below http://www.iaeme.com/IJM/index.asp 358 editor@iaeme.com Dr Bidyut Jyoti Gogoi 6.5 Regression Model Table Model Summaryb Std Error Adjusted R of the Model R R Square Square Estimate 352a 124 113 501 a Predictors: (Constant), EMP, ASSUR, TAN, REL, RESP b Dependent Variable: SAT DurbinWatson 1.079 Table Model Regression ANOVAa Sum of Squares Df 14.282 Mean Square F Sig 2.856 11.365 00001b Residual 101.037 402 251 Total 115.319 407 a Dependent Variable: SAT b Predictors: (Constant), EMP, ASSUR, TAN, REL, RESP Table Model (Constant) TAN REL RESP ASSUR EMP a Dependent Variable: SAT Coefficientsa Unstandardized Standardized Coefficients Coefficients Std B Error Beta 362 557 202 075 126 188 050 180 129 079 079 212 061 170 093 044 100 Collinearity Statistics t 649 2.681 3.751 1.639 3.485 2.136 Sig .517 008 000 102 001 033 Tolerance VIF 983 951 937 914 991 1.017 1.051 1.067 1.095 1.009 R square from table is 0.124 and standard error of the estimate is 0.501 The F test from table shows high significance The tolerance and VIF values from table is well within limits There is no sign of multicollinearity Durbin Watson value from table shows no sign of autocorrelation This shows that the model is fit 6.6 Regression Model Table Model Summaryb R Model R Square 147a 022 a Predictors: (Constant), SAT b Dependent Variable: LTY http://www.iaeme.com/IJM/index.asp 359 Adjusted R Square 019 Std Error of the Estimate 653 DurbinWatson 1.547 editor@iaeme.com Service Quality Measures: How it Impacts Customer Satisfaction and Loyalty Table Model Regression Residual Total a Dependent Variable: LTY b Predictors: (Constant), SAT ANOVAa Sum of Squares df Mean Square F Sig 3.817 3.817 8.939 003b 173.376 177.193 406 407 427 Table Model (Constant) SAT a Dependent Variable: LTY Coefficientsa Unstandardized Standardized Coefficients Coefficients Std B Error Beta 3.241 258 182 061 147 Collinearity Statistics t 12.557 2.990 Sig .000 003 Tolerance VIF 1.000 1.000 R square from table is 0.022 and standard error of the estimate is 0.653 The F test from table shows high significance The tolerance and VIF values from table is well within limits There is no sign of multicollinearity Durbin Watson value from table shows no sign of autocorrelation This shows that the model is fit 6.7 Hypotheses Test Results From the Regression Model and Regression Model analysis, the summary of the hypotheses test is given in Table below Table Summary of Hypotheses Testing Results Relationship Coefficient (β) t value p Results Accept H1 TAN → SAT 202 2.681 008 Accept H2 REL → SAT 188 3.751 000 Reject H3 RESP → SAT 129 1.639 102 Accept H4 ASSUR →SAT 212 3.485 001 Accept H5 EMP → SAT 093 2.136 033 Accept H6 SAT → POP 182 2.990 003 Note: β = standardized beta coefficients; *p< 0.05 (tested at 5% significance level) CONCLUSION Dimensions of service quality (SERVQUAL) viz Tangibility, Reliability, Assurance and Empathy has a positive influence on customer satisfaction A tourist looks out for a clean, decent and safe place to spend some quality time in his spare time or holidays A location which is attractive, has a clean image supported with reliable services and facilities makes the traveler comfortable The warm welcome by the service providers even make the trip memorable http://www.iaeme.com/IJM/index.asp 360 editor@iaeme.com Dr Bidyut Jyoti Gogoi Though Responsibility is an important parameter in improving service quality, from the analysis, it is seen that responsibility not influence customer satisfaction Though the customers perceive that the service providers should see the concerns of the customer yet it seems they not expect the same response from the service providers This may be the experience of a bad service encountered Responsibility helps the service providers to improve their brand image if they train their employees to focus on the customer’s issues It helps well if firms are able to communicate to the customers that they understand the customer concerns Customer satisfaction has a positive influence on the customer loyalty A satisfied customer spreads good word of mouth about the experience encountered The journey of the customer begins right from choosing a location to exploring the place and back home The customer remembers the good moments in the entire journey and relates it to his everyday experiences If the entire journey at the location is cherished upon, this spreads out 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Mackay and Crompton, 1990) Service quality is envisioning to achieve customer satisfaction for developing positive attitude towards the services provided (Ostrowski et al., 1993) Service quality