The research framework, hypotheses, sample, data collection, measurement and questionnaire design are to be introduced in this chapter.
Research Framework
In this study, the independent variable is airline service quality. The dependent variable is passenger loyalty. Brand equity serves as the moderator as for the relationship between airline service quality and passenger loyalty. The research framework is shown in Figure3.1.
Figure 3.1. Research Framework of This Study
Research Hypotheses
The hypotheses of this study are proposed as followed:
Hypothesis 1. Airline service quality is positively related to passenger loyalty.
Hypothesis 2. Brand equity moderates the relationship between airline service quality and passenger loyalty. Under high level of brand equity, the positive relationship between airline service quality and passenger loyalty will be stronger.
Research Procedure
This part elaborates on the processes and procedures employed and adopted to conduct this research. Several steps are specifically and clearly indicated as follows.
Airline Service
Identify the research topic
After several meetings and talks with the advisor about some topics of great interests while making efforts to go through the literature review, the topic was conclusively determined to be focused on the research which centers around a certain local airline company in Taiwan, China Airlines, on the basis of the author’s previous working experience.
Review the literature
The research author kept reading through the previous related literature which centers around service quality, brand equity and passenger loyalty while at the same time taking notes of great importance from the literature and thus formed the literature review shown here in this thesis research.
Develop the framework and instruments
Based on the determined 3 variables, service quality, brand equity and passenger loyalty, the research framework was thus formed and the questionnaire designed was as well formed based on the discussion with the advisor.
Establish the research questions and hypotheses
On the basis of the determined research framework, research questions along with the research hypotheses were deduced and formed.
Construct the research method
Quantitative research method was employed in this research thesis while SPSS and Amos were also adopted to analyze the results acquired from the questionnaires.
Conduct the pilot test
The data retrieved were conducted as the pilot test and after the confirmation of validity, the analysis of all data were afterwards conducted.
Analyze the data and discuss the findings
After the analysis of the results of data was completed, the remaining part of the research thesis was afterwards carried out.
Research Sample
Samples of the study were those who have flied with China Airlines. Since passengers’
perceived services from airlines are of great importance to the management of airline companies. Accordingly, the sample’s responses may directly and accurately reflect what aspects China Airlines has missed taking care of while what China Airlines may make efforts to maintain.
Pilot Test
The complete questionnaire is composed of 3 major parts, which are service quality, brand equity and passenger loyalty. The questionnaire was adopted and referred by the one conducted by Khatib (1998). There are 13 questions in the category of service quality, 14 questions regarding brand equity and 14 questions concerning passenger loyalty. When the questionnaires were retrieved, the internal reliability was the priority that needed dealing with so the research author conducted pilot test as the first step.
There were 40 participants filling out the questionnaire and their age ranges from 25 to 60. They were 40 full time employees who used to fly with China Airlines and among them there were 9 people who already retired, 12 people who are business travelers and 19 passengers who are employees with certain corporates. At the same time, there were 18 female passengers while there were 22 male passengers with educational background ranging from high school to Ph.D. degree.
After data were collected from these 40 participants, a reliability test was conducted by SPSS. The Cronbach alpha value of each variable were 0.75 for service quality, 0.83 for brand equity, and 0.89 for passenger loyalty.
Based on what mentioned by George and Mallery (2003), Cronbach value is in charge of
explaining the internal consistency of items, ranging from 0.6 to 0.7 is considered to be acceptable while from 0.7 to 0.8 is good. Furthermore, over 0.9 is considered excellent. As a result, the questionnaire employed in this study had a good reliability according to the results from the outcome brought out by the pilot test.
Table 3.1.
Cronbach Alpha Value of Each Variable of This Study
Variable Total item number Cronbach Alpha
Value
Service quality 13 0.75
Brand equity 14 0.83
Passenger loyalty 13 0.89
Data Collection
Data of this study was collected using an online self-administrated questionnaire. The survey contains four major sections. Section one contains questions measuring airline service quality, which are adopted from the version of questionnaire from Khatib (1998). According to his research, the Cronbach’s α coefficient of airline service quality is 0.98；Section two contains questions testing passenger loyalty from Khatib (1998) and α is 0.98. Section three contains questions testing brand equity (α = 0.90). Section four deals with respondents’
demographic information such as gender, age, educational backgrounds and so on.
Snowball and convenient sampling approach were used for data collection. Participants received an e-mail with the link directing to the webpage of the survey. At the same time, they were encouraged to forward the email to as many of their friends as possible. Data collection period lasted four months from June to September in 2017, and finally got 286 usable responses.
variable are derived from previous published studies in the literature. Since our target samples are those people who have flied with China Airlines in Taiwan, all the questions will be translate into Chinese.
Measurement
The measurements used in this study will be introduced in this section. The full questionnaire with instructions and measurements are presented in the Appendix:
Measurements and Questionnaire.
Airline Service Quality (SQ)
The measurement items were from the scale developed by Khatib (1998). The measure of airline service quality contained 13 items. An example item is: “The cabin crew are very courteous toward passengers”. The Cronbach’s alpha was 0.98. Responses were designed on a five-point Likert scale, ranging from 1 (strongly disagree) to 5 (strongly agree). Higher score indicates a greater degree of airline service quality.
Passenger Loyalty (PL)
The measurement of passenger loyalty is adopted from Khatib (1998). According to the research outcomes, the Cronbach ’s α coefficient of it is 0.98. The measurement of it contained 13 items.
Brand Equity (BE)
The measurement of brand equity is adopted from Yoo and Donthu (2001). According to the research outcomes, the Cronbach ’s α coefficient of it is 0.90. The measurement of it contained 14 items.
Data Analysis
IBM SPSS 22.0 was used to perform data analysis. CFA was used to test the reliability and validity of our measurement.
Descriptive Analysis
Descriptive statistics can help people have the whole images of the collected data. The researcher will use frequency distribution which includes numbers and percentage to show the demographic information in this study, such as gender, age, tenure, education level and position level. The mean and standard deviation will be utilized to investigate all the variables in this study, including airline service quality, passenger loyalty and brand equity.
Pearson correlation analysis
The liner relation between two continuous variables can be descripted as correlation, and researches adopt coefficient of correlation, also called Person’s product-moment correlation coefficient (Person’s r) to display the degree of the correlation. When the absolute value of Person’s r is closer to 1, the degree of the correlation is stronger. Also, the situation that the Person’s r is positive means the correlation is positive; on the contrary, the condition that the Person’s r is negative means the correlation is negative. In this study, correlation analysis was used to examine the relationship between airline service quality, passenger loyalty and brand equity.
Confirmatory factor analysis (CFA)
In order to confirm to the validity of all the questions in the questionnaire, AMOS was one of the methods that were employed.
Hierarchical regression analysis
Hierarchical regression analysis was used to examine whether the interaction between airline service quality and brand equity will have any influences on passenger loyalty which is set in order to test the hypothesis 2 of this test.
CHAPTER IV RESULTS
This chapter demonstrates the results after analyzing the data collected to examine the proposed relationship between service quality, brand equity and passenger loyalty. Hypotheses examined in this research were (1) Airline service quality is positively related to passenger loyalty, (2) Brand equity moderates the relationship between airline service quality and passenger loyalty. Under high level of brand equity, the positive relationship between airline service quality and passenger loyalty will be stronger. Correlation analysis was used to examine the relationship among variables and hierarchical regression analysis was used to examine the relationship.
Participants
Data collection was conducted via online questionnaires along with paper questionnaires
.
Participants were composed of full-time employees from different walks and industries as well as those who already retired. Those who have flied with China Airlines were eligible for filling out this questionnaire. There were 312 responses but some were invalid, which means there were 286 valid responses retrieved.
Reliability
Reliability test was conducted to ensure the quality of the questionnaire used.
There are 13 items measuring the dependent variable, service quality. The Cronbach alpha value was 0.881. For independent variable, passenger loyalty, 13 items were used to measure it and Cronbach alpha value was 0.905. Further, the Cronbach alpha value of brand equity’ 14 items was 0.907.
Table 4.1.
Reliability Scale: Service Quality, Passenger Loyalty and Brand Equity (N = 208)
Scale Item Number Cronbach Alpha Value
Service Quality 13 0.881
Passenger Loyalty 13 0.905
Brand Equity 14 0.907
In summary, most of the figure of reliability can be considered good since they are all over 0.7 according to what mentioned by George & Mallery (2003).
Descriptive Statistics
Detailed demographic information about 286 participants was provided in this part. All the elements include gender, educational background and level, occupational category, times they have fled with China Airlines and the travel purpose and so forth.
The 286 valid participants are composed of those who have flied with China Airlines, ranging from those holding managerial positions, professional retirement, employees and students. Among them, there are 102 female (49%) and 106 (51%) male participants.
Table 4.2.
Demographic Statistics (N = 208)
Item Frequency percentage%
Gender Female 102 49
Male 106 51
Educational Level
High School 2 1
Vocational School 28 13.5
Bachelor Degree 99 47.6
Master Degree 71 34.1
Doctor Degree 8 3.8
Occupation Managerial Position 45 21.6
Professional 38 18.3
Retired 21 10.1
Employee 86 41.3
Student 17 8.2
Family Visit 43 20.7
Education 5 2.4
Others 2 1
Correlation Analysis
This part examines whether correlation exists among SQ, BE and PL in order to further examines the relationship between these variables. Table 4.3 presents the mean, standard deviation, correlations, and reliability as well.
Table 4.3.
Mean, Standard Deviation, Correlation, and Reliability of Variable (N = 208)
Mean SD 1 2 3
1.SQ 4.154 0.369 (0.881)
2.PL 3.968 0.506 0.518** (0.905)
3.BE 4.145 0.437 0.505** 0.789** (0.907)
Note.*p < .05, **p < .01
SQ = Service Quality, PL = Passenger Loyalty, BE = Brand Equity
As Table 4.3 shows, we found a significant correlation between SQ and PL. (r = .518, p
< .01), a finding consistent with Khatib (1998)’s study. In addition, these SQ did correlate positively with BE (r = .505, p < .01). Finally, our analysis showed that PL was highly correlated with BE at the same time (r = .789, p < .01).
Hierarchical Regression Analysis
Table 4.4.
Results of Moderating Effect of Brand Equity for the Relationship between Service Quality and Passenger Loyalty (N = 208)
Variable Model 1
SE×BE
Notes. *p < .05, **p < .01;Two-tailed tests of significance; Dependent variable = Passenger Loyalty.
Table 4.4 presents the results of one hierarchical regression analysis for the moderating effect of brand equity on the relationship between service quality and passenger loyalty.
Hypothesis 1 stated that service quality would positively predict passenger loyalty. This hypothesis was supported as the test was significant (b = .61, p < .01). Hypothesis 2 stated that brand equity will moderate the positive relationship between service quality and passenger loyalty. However, the second hypothesis was not significant (b = -.033, p = .561).
Confirmatory Factor Analyses
As noted by Joreskog (1993), “since chi-square is N-1 times the minimum value of the fit function, the chi-square test tends to be large in large samples” (p. 309). Because of the large effect of sample size on the chi-square values (and associated p values), other fit indices were also selected to measure the fit of the tested models (Nunkoo, Gursoy, & Ramkissoon, 2013).The fit between the measurement model and data was thus assessed by the following standard indices: comparative fit index (CFI) = .919 (SQ), .79 (PL) and .69 (BE); Tucker-Lewis index (TLI) = .903 (SQ), .748 (PL) and .633 (BE). Furthermore, the root mean square error of approximation (RMSEA) = .075 (SQ), .157 (PL) and .185 (BE). All of the above indicated that the measurement model fit the data well and the overall fit indices were appropriate.
Table 4.5.
Results of Confirmatory Factor Analyses
Discussion
As expected before conducting the survey, there’s a strong positively related connection between service quality and passenger loyalty. Since as what mentioned and discussed above, once customers are satisfied with the service quality they have received, they will surely consider taking China Airlines once again whenever they have the opportunity to fly again.
That's why corporations in the aviation industry have been putting great emphasis on the importance of delivering not only professional but satisfactory services to passengers onboard.
However, the moderating factor of brand equity didn’t quite show such a strong impact on the relationship between service quality and passenger loyalty mainly because brand equity is composed of different aspects and it is also concerned with the image of a certain company in the public eye. Bias and discrimination are omnipresent in the mind set of each of us, which is quite undeniable since once our bias is formed, however ridiculous or irrational as it may seem, it is still very hard to be eliminated thoroughly as bias is nothing but habits, which can be easily formed but hard to get rid of. According to Virvilaite, Saladiene, and Bagdonaite’s theory in 2009, price is the leading factor that will definitely impose a strong impact on passenger loyalty since people always have the tendency to choose either the lowest or the most acceptable price when it comes to choosing an airline to fly with. Brand equity is comprised of several different elements such as brand awareness, brand associations, perceived quality and brand loyalty. As what mentioned above, brand equity is affected by several dimensions and people will not just take one aspect into consideration when they are about to make a purchase with a certain airline company (Indrayani, Yoshimura, & Imamura 2008). For example, people will not solely choose to fly with China Airlines simply because the cabin attendants are widely known as the most beautiful and elegant ones here in Taiwan. Furthermore, even though the symbol of plum flowers printed on the carriers of China Airlines represent the icon of the country, Taiwan, people may be patriotic but they will not choose to fly with China Airlines simply because of their patriotism towards Taiwan since one again, prices are the leading cause which will drive people to buy the tickets from a certain airline company. In addition, the market nowadays is totally free in the aviation industry, which indicates the fact that the pricing is totally determined by the airlines themselves and thus customers have the total freedom to choose whatever price they favor based on their financial status and personal propensity.
According to what Aaker (1992) mentioned, the sources to create brand equity are composed of the following factors, which are brand loyalty, brand awareness, brand
associations, and perceived quality. Among what mentioned above, brand associations, and perceived quality are of greater importance compared with the rest aspects. Furthermore, based on what Farquhar (1989) indicated, he raised 3 feasible methods to gain a better understanding and perception of brand equity, which respectively are building brand equity, borrowing brand equity and buying brand equity. Building brand equity can be achieved by the following methods mentioned below. In the first place, raising the quality of products is to build up the positive image from customers of the brand. Next, reinforcing the strength of brand association is to affect customers’ buying behaviors. Lastly, developing the consistent brand image is to build up a positive impression of the brand on the customers.
Take the 2 major local airline companies in Taiwan, EVA Airways and China Airlines for examples. The 2 companies mentioned above give off different impressions and images of perceived quality and brand associations to the customers and at the same time, the management methods are quite different in a large number of aspects. As to the perspective on perceived quality, China Airlines has been providing personal and customized services to passengers for years gone by while they have slightly failed to build a positive image and impression on passengers in regards of the safety records while EVA Airways has been well renowned for its excellent records of flight safety. As to what mentioned above, it is well-known that China Airlines used to tend to hire those pilots who served in the military and besides, the history of plane crashes around decades ago has left a somehow negative impression on the customers, which has brought about some concerns about the safety issue to some customers. As a consequence, some Taiwanese passengers will somehow choose EVA Airways to travel if budget is not a concern. Furthermore, China Airlines is somehow much more conservative in terms of marketing and publicizing since even though it seems a private company, those executives holding managerial positions are in fact delegated and assigned by Taiwanese government officials, which makes its horizon narrower in some way. On the contrary, EVA Airways is much more aware of the tastes of passengers and that's why it has
means of such as advertising and exposure on the media to make itself much more known to the public eye. To follow up, airline companies can train its employees, mainly cabin crew members, to ensure and hence reinforce its service quality as well as maintain the high level of positive interaction between passengers and flight attendants. Last but not the least, if the airline companies manage to influence passenger’s opinions and behaviors, it can therefore enhance the level of passenger loyalty, which will lead to the fact that passenger having flied with a certain airline company will recommend it to those around themselves.
To sum up, improving or reinforcing airline companies’ reputation, overall quality and image to the public eye can as well enhance their own brand equity, creating and bringing in more revenues and advantages for both the companies and the passengers. As a result, this research thesis aims to make some contributions to the aviation industry as for the perspective on brand equity.