This chapter introduces the background, problem statement, purpose, research questions, significance, and key term definition.
Background of the Study
The research topic of service quality has been receiving much attention in both research literature and practical fields for recent decades as the service quality is of significant importance and value when it comes to the dedication to obtainment and maintenance of market share for airline companies all over the globe (Anderson & Zeithaml, 1984; Philips & Robson, 1983). As a cabin crew with 3 different airlines, ANA, Cathay Pacific and China Airlines (All Nippon Airways based in Tokyo, Cathay Pacific Airways based in Hong Kong and China Airlines based in Taipei), service quality is one of the core values that the training courses I had received center around. Despite the fact that aviation industry should be mainly categorized as the transportation industry, people still put much emphasis on the quality of the inflight services such as the catering foods, the performance of cabin crew and even the attractiveness of the flight attendants. The great importance of service quality in any service industry can’t be disputed or questioned. Drastic changes happening in the past few years in politics, economy and technology with great influences on transportation industry in particular have made service quality a major concern for both airline companies and passengers to a certain degree.
In a sense, the quality of airline service plays a vital role in attracting much more new clients, in maintaining the level and standard of overall performance of the flight and in keeping the bond with those loyal customers, which no wonder has been emphasized for long. With fine service quality, those who haven’t flown with China Airlines will be attracted to give it a try while those who have been satisfied with the overall performance of China Airlines will become part of the factors that maintain the re-flying rate with China Airlines.
Nonetheless, the relationship between the quality of airline inflight services and passenger
current study aims to explore whether the moderating factor of brand equity will impose any effects on the relationship between the service quality of airlines and passenger loyalty. In a sense, the study can not only give suggestions to the marketing department of China Airlines on how to promote and publicize China Airlines as a well-established organization but can shed light on the HR department of China Airlines, showing them what sorts of potential employees China Airlines are to recruit to maintain and fortify the passenger loyalty (passengers’ re-flying rate).
Problem Statement
It is apparent that quite little research has been conducted regarding the topic and relationship between inflight service quality and passenger loyalty especially when it comes to the moderating effect deriving from brand equity. What’s more, there has been no specific case study revolving around China Airlines that goes deep into the correlation between the 3 items mentioned above. To be honest, the situation in China Airlines is not so much different from that with other airlines in other parts of the globe.
According to some previous academic research, the definition of a service is not an act or a specific product; in addition, its quality will be determined and judged on the basis not only of the result (technical quality) but also on the process by which services are carried out (functional quality; Gronroos, 1990; Bowen & Schneider, 1988). Accordingly, there are a large number of unique features that help us determine the differences between services and products.
The characteristics of a great diversity as for services give rise to the complicities which are deeply involved both in the assessment and in the management of service quality. To be much more specific, they complicate the aspects of both the passengers’ assessment of service quality and the service providers’ ability to take the full control over it. For decades, service quality has been increasingly regarded as one of the major factors which may impose effects to a certain degree on how to differentiate service offerings with different airlines and at the same time as a major tool to establish competitive advents. Most services require direct contact between the customers and service providers, which may suggest that besides task proficiency as for carrying out a certain duty, interpersonal skills such as friendliness, courtesy and tolerance are of considerable importance when we take the aspects of service quality into consideration, especially in high contact services where employees at the front line will leave a great influence on customer satisfaction, which may later on contribute to the level of passenger loyalty (Hobson & Denekamp, 1984; Hostage, 1975). It is widely perceived that for
every complaint received by a business from a customer, there are around 26 other customers who feel exactly the same way while failing to express their own opinions but keep the emotions deep inside instead (Headley & Choi 1992). One customer having come to feel satisfied with the services received, as a norm, tells 2 or 3 people whereas customers failing to feel content with the services tells much more people. As a result, with an eye to improving service quality, it is indispensable that customers’ opinions and thought be heard clearly since the quality of service is ultimately determined by customer perceptions. At the same time, it is also of great importance that companies listen to the service providers at the front line so as to gain a full understanding what may be important for them and how they perceive customers.
Transport firms such as airlines now have come to build a perception that service quality may well serve as a strategic tool not only to reinforce the value of the total transport service offering from the perspective of the passengers for the purpose of building an ability to differentiate the services from other competitors on the market but to try every possible way to foster passenger satisfaction.
Airlines, or can also be referred to as airways, are a major transport provider. With a new competitive environment emerging recently where price wars, frequent flyer programs and other innovative marketing strategies now have become prosperous, airlines, thus, have been pushed either voluntarily or involuntarily to introduce service development and reinforcement strategies to remain the ability to keep their competitive advantage (Kaynak, Bloom, & Leibold, 1994). The development of the customer-oriented marketing concept where customers speak the loudest according to a widely perceived belief has been an immediate response to the rapidly changing environmental conditions, switching from a seller’s market to a buyer’s market (Khatib, 1998).
With the increase in income and the convenience of transportation, passengers nowadays have become much more sophisticated about flying and thus have relatively higher expectations about the services they are about to receive onboard. The homogeneity of airline
China Airlines, also known as CAL or CI in the aviation industry, is part of the air travel market. It has been the biggest airline company in Taiwan for several decades with its good reputation. However, recently, it has been faced with challenges from other outstanding airline companies here in Taiwan, either legacy airlines or low budget airlines (also known as LCC, Low Cost Carrier). One way which China Airlines can remain its position in the aviation industry here in Taiwan and thus gain more passengers is to make sure the services delivered onboard by cabin crew members are of high quality and standard. As a consequence, providing proper and convincing answers and solutions from the perspective of both marketing and human resources requires investigation, assessment and evaluation of some specific questions which will be clarified later on.
Purpose of the Study
The major purpose and concern of the study mainly revolves around the investigation of the relationship between inflight service quality and passenger loyalty, along the way with the moderating effect of employer branding. Accordingly, the main objectives of the research study are as below.
1. To identify the major features (dimensions) of airline inflight service quality.
2. To recognize the relationship between inflight service quality and passenger loyalty.
3. To investigate the influence of brand equity on the relationship between inflight service quality and passenger loyalty.
Research Questions
According to the research purposes, this study aims to answer the following questions:
1. Is there any significant relationship between airline inflight service quality and passenger loyalty?
2. Does brand equity have a significant moderating effect on the relationship between inflight service quality and passenger loyalty?
Significance of the Study
The possibly potential contribution of the study can be viewed from the perspectives of the following aspects:
Contribution to China Airlines’ Organizational Management
This study mainly aims to remind those claiming the managerial positions at China Airlines that inflight service quality does have a strong impact on passenger loyalty, which will later on determine the profits and revenues received by China Airlines. At the same time, brand equity also leaves a significant impression on customers when it comes to choosing which airlines to fly when necessary. Thus, the study provides an aspect of great importance for China Airlines not only to put great emphasis on the improvement of inflight service quality but to make efforts to establish a corporate image that will attract customers.
Contribution to HR Practitioners
In terms of recurring and staffing, it is indispensable that companies try every possible method to hire those with the qualities and characteristics that will serve as any assistance either to reinforce the advantage existing already or to compensate for any weakness or challenges that the company has been faced with. The study aims to provide some suggestions regarding what kind of cabin crew members China Airlines exactly needs according to the dimensions of inflight service quality.
Contribution to Research Field
The study mainly focuses on the examination of the relevant literature which has been published so as to explain and develop a relatively wider understanding of inflight service quality which has a positive influence on passenger loyalty. The theoretical contribution of the study revolves around the attempt to integrate service quality and customer loyalty into the filed of aviation industry, which has rarely been emphasized before, particularly with the case of China Airlines.
Definition of Terms Airline Service Quality
Airline service quality, literally, is a set of services delivered by cabin crew members onboard, which then will be perceived by passengers to determine the level of satisfaction on the basis of the services they are offered. Service is “a social act that takes place in direct contact between the customer and representatives of the service company” (Norman, 1984, p.18).
Passenger Loyalty
Loyalty has evolved through quite a few conceptual and operational interpretations.
According to a widely-perceived belief, the multi-dimensional definition lies in nature, incorporating the attitudinal and behavioral measures of commitment and repeat purchase (Day, 1969; Jacoby, Olson, & Haddock, 1971; Muncy, 1983; Selin & Howard, 1988).
The passenger loyalty discussed in the study mainly focuses on the behavioral interpretation as a form of repeat purchasing of a particular brand over time (Brown, 1952;
Cunningham, Catlin, & De Garilhe, 1956; Tucker, 1964; Sheth, 1968).
Brand Equity
Brand equity, according to the studies which have been studied and published before, mainly concentrates on the aspect of a value premium that is derived from a product or a service with a recognizable name from a certain company when in comparison with other equivalent in the same product/service category. Brand equity for a certain product can be generated if the company is to make it memorable, superior in quality and reliability and easily recognizable for consumers. In addition, brand equity can be created if mass marketing campaigns are to be put into actual practice.
According to previous research studies, brand equity can be broken down into three basic elements, which respectively are consumer perception, negative or positive effects and the resulting value deriving from what mentioned above. It is easy to understand that brand equity is generally and initially created by consumer perception, which can be divided into two dimensions: knowledge and experience with a certain brand and its products/services. The perception held by consumers toward a certain brand directly gives rise to either positive or negative influences. A company’s products and revenues can surely benefit from the positive brand equity whereas any disadvantages may come along providing the brand equity is
negative. Lastly, the effects mentioned above may be likely to turn either into tangible or intangible value. Tangible value may be realized, which may result in the increase in revenues and profits on the condition that the effect comes in a positive way; on the other hand, either the tangible or intangible value may show the negative sign if the effect is also negative. For instance, on account of any major product recall from a certain company, the brand may show the possibility of a negative brand equity if consumers are to pay more willingly for a more generic product instead of a branded one.