ABSTRACT

ACKNOWLEDGEMENTS

At this time of completing the dissertation, I would like to gratefully acknowledgment

a number of people who have given me support to complete this research.

First and foremost, I would like to thank my supervisor, Dr Wilson Ozeum, for his

guidance, enthusiastic support, encouragement and advice throughout the research.

His strength and belief in me, allowed me to grow and develop the study to a

completion.

My sincere thanks for my family, who give me all kinds of help, valuable advice,

encouragement and support throughout, but particularly when I am stressed. Their

love has inspired me to work hard and to believe in my capabilities. Both their moral

and financial support has lessened the burdens on me and allowed me to concentrate

on my studies, especially this case study.

I would like to thank my boyfriend, Fredy Rodriguez who always encourages, advice

and cheering me up when I felt like giving up. Also, I would like to thank to all of my

friends for their help and support in the more challenging times.

I am grateful to all the respondents that took the time to complete the questionnaire.

Without these answers this dissertation would not have been possible. I would also

like to thank the Thai airways company at Heathrow, London for allowed me to

distribute questionnaires in their check-in area.

TABLE OF CONTENTS

Abstract……………………………………………………………………………….i

Acknowledgements…………………………………………………………………..ii

Chapter 1: Introduction 1.1 Introduction………………………………………………………………………

1.2 Research aims and objectives………………………………………………….....

1.3 Research Question………………………………………………………………..

1.4 History of the Airline Industry…………………………………………………...

1.5 Thai Airways International Public Company’s an overview…………………….

1.6 Scope and limitation of the research……………………………………………..

1.7 Summary…………………………………………………………………………

Chapter 2: Literature Review

2.1 Introduction………………………………………………………………………

2.2 Definitional Clarity: Customer Satisfaction……………………………………...

- Satisfaction Ratings and Measurement

2.3 Service Quality…………………………………………………………………...

- Service Quality and Customer Satisfaction

2.4 Customer Relationship Management (CRM)…………………………………….

- Strategic CRM

- Operational CRM

- Analytical CRM

2.5 Importance of Customer Retention………………………………………………

2.6 Customer Loyalty………………………………………………………………...

2.7 Service Marketing Mix’s (7’s)…………………………………………………...

2.8 Competitive advantage…………………………………………………………

- Understanding Competitive Advantage

- Roots of Competitive Advantage

- Porter’s Generic Strategies

2.9 Summary…………………………………………………………………………

Chepter3: Research Methodology

3.1 Introduction………………………………………………………………………

3.2 Research Philosophy……………………………………………………………..

- Positivism

- Phenomenology

- Realism

3.3 Research Approach……………………………………………………………….

3.4 Research Design………………………………………………………………….

- Exploratory

- Descriptive Research

3.5 Data Collection Methods…………………………………………………………

3.6 Research Instrument……………………………………………………………...

3.7 Sampling Issues…………………………………………………………………..

3.8 Sampling Technique……………………………………………………………...

- Non- Probability Sampling

- Convenience Sampling

3.9 Field work details………………………………………………………………...

3.10 Data analysis……………………………………………………………………

3.11 Limitation……………………………………………………………………….

3.12 Summary………………………………………………………………………..

Chapter 4: Presentation and Analysis

4.1 Introduction………………………………………………………………………

4.2 Data Analytic Approach: Thematic Analysis…………………………………….

4.3 Categorising the themes………………………………………………………….

Chapter 5: Conclusion and Recommendation

References.......................................................................................................................

Appendix.........................................................................................................................

Chapter 1

Introduction

1.1 Introduction

Travel and Tourism is a major industry in the world. The elements of tourism are

including attraction, accommodation, meals and transportation. The transportation is

one of the keys essentials that voyagers are often considered in terms of time and

convenience while travelling athwart countries, which is air travel. At the present

time, there are several airline companies in all countries such as British Airways, Thai

Airways International, American Airlines and Emirate etc. They are trying to improve

marketing and sale and service in economic recession period in order to customers

that are travelling have satisfy and convenience. Thai Airways International is one of

airline companies that the uniqueness of Thai culture to attract travellers to the

impression in services Thai style as that concept is “The First Choice Carrier with

Touches of Thai”. However, this chapter presents an overview of the research,

including background of the study, research aim and objectives, as well as the

structure of the dissertation.

1.2 Research Aims and Objectives

The main purpose of this research is the evaluation of customer satisfaction as a

strategic marketing tool for competitive advantage using Thai Airways as a case

study, in order to obtain this aim the following objectives were set as follow:

To review extant conceptual model and theoretical frameworks related to

customer satisfaction.

To identify the key drives of customer satisfaction as a strategic marketing

tool.

To recommend some practical ways in which customer service could be used

as a strategic tool in the airline industry.

1.3 Research Question

This research wants to focus on the question in order to conduct the problems showed

in the research work relevant question is that “how customer satisfaction as strategic

marketing tool competitive advantage to the company?”

1.4 History of the Airline Industry

Airline industry is an industry that assists the growth of economic, international

investment, world trade and plus tourism, as a result, a fundamental to the

globalization happens in several industries.

In the last ten years, travelling by air has developed by 7% annually according to the

travels made by mutually business and relaxation reasons which grew robustly

universal with the approximately listed airlines carried about 1.5 billion passengers

previous year. Regarding the leisure market, the accessibility of large airliner, for

example, Boeing 747 made it suitable and reasonably priced for people to take a trip

more to fresh and striking destinations. Then, governments in numerous developing

countries recognised the advantages of tourism towards their nationwide economies

and stimulated the improvement of infrastructure and resorts to tempt travellers from

the countries in Western Europe and North America to travel in their countries. At the

same time, as the economies of developing countries develop, their own populations

are already also turning themselves into the new international tourists of the future.

Business travel has also developed as companies are converted themselves into

increasingly international in terms of investments, supplies, production chains, and

their customers. In addition, the express growths of global trading in goods and

services as well as the international directed investment have also added to growth in

business travel.

Toward the global scale, IATA, International Air Transport Association, had

forecasted that the international air travel would grow by a regular rate of 6.6% per

year to the end of this decade and would developed over 5% annually from 2000 to

2010. These rates are comparable to those of the past ten years. In Europe and North

America, where the air travel market is previously greatly urbanized, slower growth

rate of 4%-6% is accepted. The most active growth is centred on the Asia Pacific area,

where fast-developing trade and investment are doubled with rising national wealth.

Air travel for the region has been intensifying by up to 9% per year and is predicted to

maintain to grow rapidly, even though the Asian financial crisis in 1997 and 1998 had

obstructed in continuously developing for few years. In aspects of entirety passenger

journeys, nevertheless, the major air travel markets of the upcoming period will

maintain to be in and between North America, Europe and Asia.

Airlines' prosperity is directly tied to the growth in trade and economic. During the

first half of nineteenth century, the industry experienced not simply from world

depression but travel was more miserable by the Gulf War. In 1991, the figure of

worldwide passengers failed for the first moment in time. The monetary difficulties

were intensified by airlines in excess of ordering aircraft in the popular years of the

late 1980s, directing to momentous surplus capacity in the market. IATA's member

airlines endured increasing net losses of 20.4 billion dollars from 1990 to 1994.

Since then, airlines have had to identify the necessitation for essential change to make

sure of their continued existence and success. Many airlines have tried to minimise

costs assertively, to lessen capability growth and to boost the loading factors. At a

period of transformed economic growth, such acts have come back to the industry as

an entire to profitability: IATA airlines' profits were about $5bn in 1996, which was

lower than 2% of overall revenues. This lower rate made IATA considers that it is

essential for airlines to diminish their debts, make reserves and maintain the levels of

investment. In fact, many airlines stay not making money.

To congregate the conditions of their gradually more perceptive customers, some

airlines need to spend seriously in the service quality that they present, both on the

ground and in the air. Ticket-less travel, new interactive entertainment systems, and

more relaxing seating are just some of the product enhancements were commenced to

catch the attention of and maintain customers.

A numeral of factors has been obliging airlines to develop into more efficient. In

Europe, the European Union (EU) has ruled that governments should not be permitted

to support financially their failure-making airlines. In a different place, governments'

also worries over their own finances and benefits of privatization which have led to an

ongoing transfer of ownership of airlines from the state to the private division. In

order to appeal to prospective shareholders, the airlines have to become more

proficient and competitive.

Deregulation is also inspiring contest for small or low-cost airlines. The US started

this deregulation in 1978 while following by Europe after almost 20 years later. The

EU's final stage of deregulation obtained effect in April 1997, by allocating an airline

from one member country to fly passengers within another member's national market.

Outside Europe, 'open skies' agreements began to take apart on some of the

regulations governing which carriers can fly on specific routes. Nevertheless, the

aviation commerce is categorized by well-built pro-independence sentiments towards

national 'flag carriers'. In many areas of the world, airlines will consequently continue

to encounter limitations on where they can fly and restrictions on their ownership of

overseas airlines.

In spite of this, the airline industry has ensued along the path towards globalization

and consolidation, characteristics associated with the normal development of many

other industries. It has done through the alliances and partnerships establishment

between airlines, connecting their networks to enlarge access to their customers.

Hundreds of airlines have gone into alliances, arraying from agreements in terms of

marketing and code-shares to contracts as well as the transfers of equity.

The point of view for the air travel industry is one of strong growths. Predicts

recommended that the amount of passengers would be doubled by 2010. For airlines,

the future will hold many tests. Successful airlines will be those that persist on

engaging with their costs and improvement in their products, thus securing a strong

existence is the key of world aviation markets.

The airline industry continues living in an extremely competitive market. In current

years, there has been industry-wide shakedown, which have been far-reaching effects

on the industry's trend towards developing domestic and international services. In the

history, the airline industry was at least partially government possessed. This is still

accurate in many countries, but in the U.S., all major airlines have become to be

privately held.

1.5 Thai Airways International Public Company’s an overview

Thai Airways International Public Company Limited is the only national carrier of the

Kingdom of Thailand. It manages domestic, regional and inter-continental flights

radiating from its home base in Bangkok to key destinations within Thailand and

around the world.

Thai Airways International was established in 1960 as a joint venture between

Thailand's domestic carrier, Thai Airways Company (TAC) and Scandinavian

Airlines System (SAS) with the Scandinavian carrier initially providing a 30% share

capital of two million Baht. SAS also provided operations, managerial and marketing

expertise, with training assistance aiming at building an entirely autonomous national

airline within the shortest possible time. Thai nationals, through training and

experience, were steadily able to assume full managerial responsibility and the

number of emigrant staff therefore reduced until, in 1987, expatriates accounted for

less than one percent of staff based in Thailand.

In 1960, flights were launched from Bangkok to 9 overseas destinations all within the

Asian region. Intercontinental services were commenced in 1971, to Australia,

followed by flights to Europe in 1972, and to North America in 1980. Thai Airways

International growth was significantly accelerated on April 1, 1988 as a result of its

merger with Thai Airways Company (TAC), the domestic airline, which raised the

Company's share capital from 1,400 million to 2,230 million Baht.

Thai Airways International's services the company has highlighted the unique Thai to

be known around the world and enjoy the beauty of Thai. The female flight attendants

wear uniforms that are Traditional Thai dress, while passengers board the aircraft with

saying hello in Thai style to satisfy the customer.

Furthermore, the passenger lounge for First Class and Royal Spa at Suvarnabhumi

airport that is unique as outstanding in terms of service and decorated with Thai art

and tastefully. Passengers can experience from the hospitality and service like

meekness that focus on the privacy and comfort as well as spa services, Thai Massage

and comprehensive which is different from the special lounges of other airlines.

Royal Orchid Plus of Thai Airways, which is one of promotions, is a list of points

accumulated flight that mileage travel has two forms to receive special Royal Orchid

Plus. Firstly, there are 2 types are that Eligible Qualifying Miles (EQM); getting on

the flight of Thai Airways, flights in the airline/ one ways share routes from / to

Bangkok and flights of airlines in the Star Alliance. Another is Qualifying Miles (Q

Miles); Royal Orchid Plus miles will accumulate points based on class customer

service of Thai airways and Star Alliance. Secondly, Partner Mile is retained right of

use of other services as a partner with airlines such as hotels/accommodation or other

participants. Level member of the Royal Orchid Plus has three levels as Members,

Silver and Gold. All of them are depend on collecting of mileage travel in a year.

There are currently people uses the technology extensively in addition to purchasing

tickets via the Internet and also via mobile phone by providing data and mobile

services to customers. Customers can check-in online form with all available seats

have been boarding pass in a two-dimensional bar code. They can also check flight

schedule, information reception, calculate currency, weather and information for

destination.

Thai airways had been ranged in the third place of top ten of the world’s best airlines

in year 2008. However, after that rank, the position of Thai Airways has been

significantly decreased in 2009 which caused this research to find the

recommendations to improve in the customer service in order to become the first rank

in the world’s best airlines in the future.

1.6 Scope and limitation of the research

The scope of this research is to focus on the customer satisfaction as a strategic

marketing tool for competitive advantage. Determining strategic marketing tools

which are the key drivers of customer satisfaction using Thai airways as a case study

so as to recommend and develop in customer service. The data has collected between

2006 and 2010 which includes 5years.

1.7 Summary

This chapter illustrated the overview of the airline industry, and also corporate history

of Thai Airways to understand the customer’s satisfaction to compete with rivals.

Moreover, knowledge and theories related to research’s area of interest will be

importance in the next chapter.

Chapter 2

Literature review

2.1 Introduction

In the previous chapter is the briefly introduced the overall about the background of

this research. For this chapter the research proposes conceptual frameworks that focus

on customer satisfaction for competitive advantage of the company. The following

review shows an overview of relevant literatures that lead to establish of proposed

conceptual frameworks in this topic area. The components of the concepts included as

follows below.

2.2 Definitional Clarity: Customer Satisfaction

The heart of the marketing notion is to meet consumer needs and wants. It does not

stop there. Consumer’s needs and wants should be in a way that produces consumer

satisfaction. Customers assess which proffer will distribute the most value. They form

an anticipation of value and act on it. Whether or not the offer lives up to the value

expectation affects both satisfaction and repurchase probability. Whether the buyer is

satisfied after purchasing depends upon the offer’s performance in relation to the

buyer’s expectations in general:

Customer satisfaction refers to consumer perceptions that are personally correlated

with the customer's expectations and experiences of the goods or services. When the

purchaser is completely satisfied with the performance of goods and services, the

consumer behaviour is likely to be that of repeat purchase and loyal customer. A

customer who feels dissatisfied will likely suspend such deed. The unsatisfied

customer can likely to via negative word of mouth regarding the company (Schiffman

et al. 2008).

Kotler (1999) stated that Satisfaction is a person’s emotion of delight or displeasure

ensuing from comparing a product’s perceived performance (outcome) in relation to

the person’s expectations. Consequently satisfaction is a function of perceived

performance and expectations. Hoyer and MacInnis (2001) said that satisfaction can

be associated with feelings of excitement, acceptance, relief, happiness, and delight.

Armstrong (2003) mentioned that Customer Satisfaction depends on a perceived

performance product in delivering value relative to a buyer’s expectations. If the

performance falls short of expectations, the consumer is unsatisfied. If the

performance matches the expectations, the consumer is satisfied. If the performance

exceeds expectations, the consumer is highly satisfied or delighted.

Essential in this definition is the overall that satisfaction is a relative concept

encompassing the expected customer as well as the performance of the product while

early definitions were product focused, it has since been recognised that customer

satisfaction applies equally to services as well as to any individual element of a

customer’s product or service experience. Hence, Oliver (1997, p.13) has defined

customer satisfaction as “A judgement that a product or service feature or the product

or service itself, provided a pleasurable level of consumption-related fulfilment,

including levels of under-or over- fulfilment.”

Customer’s satisfaction or dissatisfaction is the feeling a customer has about the

extent to which their experiences with an organisation have met their needs.

Consequently, Organisations cannot control completely customer satisfaction

perception. In reality, perceptions can be contradictory. It is often the case in which

customers consume the exact same product but perceive its quality very differently.

Such can be the result of different factors, such as mood and expectation that

influence perception (Cochran 2003).

Furthermore, Baron and Armstrong (2007) identifies increase customer satisfaction

could be contributed to by an improved and cheaper product and higher sales may be

influenced by lower prices or increases in market share arising from marketing

initiatives.

There are many factors that affect customer satisfaction. According to Hokanson

(1995), these factors include friendly employees, courteous employees,

knowledgeable employees, helpful employees, accuracy of billing, billing timeliness,

competitive pricing, service quality, good value, billing clarity and quick service. This

is shown in Figure 2.1 below. In order to achieve customer satisfaction, organisations

must be able to satisfy their customers needs and wants (La Barbera and Mazursky,

1983). Customers’ needs state the felt deprivation of a customer (Kotler, 2000)

whereas customers’ wants, according to Kotler (2000) refer to “the form taken by

human needs as they are shaped by culture and individual personality”.

Figure 2.1 Factors that Affect Customer Satisfaction

Source: Hokanson, S. (1995), Marketing News, p. 16

Therefore, many companies are aiming for high satisfaction because consumers who

are just satisfied will still find it easy to switch suppliers when a better offer comes

along. Those who are highly satisfied are much less ready to switch. High satisfaction

or delight creates an emotional affinity with the brand, not just a rational preference,

and this creates high consumers loyalty. Satisfied customers make repeat purchases,

and they tell others about their good experiences with the product. Customer

expectations are based on part buying experiences, the opinions of friends, and

marketer and competitor information and promises.

Overall Customer

Satisfaction

Courteous Employees

Knowledgeable Employees

Friendly Employees

Helpful Employees

Quick Service

Billing Clarity

GoodValue Service

Quality

Competitive Pricing

Billing Timeliness

Accuracy of Billing

Today’s most successful companies are raising expectations and delivering

performance to match. These companies embrace total customer satisfaction.

However, although the customer-centred firm seeks to deliver high customer

satisfaction relative to competitors, it does not attempt to maximize customer

satisfaction. Thus, the purpose of marketing is to generate customer value profitably.

Philip (1999) studies consumer satisfaction surveys that while consumers are

dissatisfied with one out of every four purchases, less than 5% of dissatisfied

consumers will complain. Most consumers will buy less or switch supplier rather than

complain. Therefore, companies can not use complaint levels as a measure of

consumer satisfaction by conducting periodic surveys. While collecting consumer

satisfaction data, it is also useful to ask additional questions to measure the

consumer’s repurchase intention, that this will normally be high if the consumer’s

satisfaction is high. It is also useful to measure the consumer’s likelihood or willing

ness to recommend the company and brand to other persons.

Organisations use a variety of tools to collect data in order to understand how

customers perceive quality in products and services. Any results or data from such

research help the organisation to improve or adapted their products and services to

enhance customer satisfaction and maintain a competitive edge against similar

businesses. There are five tools to survey customer satisfaction, as follows, (Cochran

2003):

Call reports: telephone orders or inquiries that are used in communication

with customers.

Field reports: these gather more detailed data from customers on-site.

Comment cards: this is a quick and simple way to receive feedback from

customers, mostly concerning problems in the service.

Complaint systems: this provides an easy way to know of customer

responses, but can be difficult to maintain and properly respond to customers.

Quantitative customer surveys: these are a complex tool that has been

created for understanding customers‟ views on an organisation. These surveys

provide questions and statements which are related to the performance of the

organisation’s products and services.

Satisfaction Ratings and Measurement

One of the most important parts of the marketing executive’s job is to get the entire

organisation to focus its decisions that affect how much customers are satisfied. Much

of a marketer’s time is spent creating strategies that influence satisfaction.

Satisfaction ratings provide a way for consumers to compare brands, which enable

testing companies to determine how will products perform, and allow companies to

monitor how satisfied consumers are with their goods and services. It is important to

know how they behave and why they feel as they do. Competitive advantage comes to

companies that can learn and adjust most quickly to make forces. One critical source

of information is feedback from customers. Marketers not only should measure their

own product’s performance but also should monitor that of competitors.

2.3 Service Quality

At the present time, many airline companies are trying to use various strategies to

stimulate new customers to use their services and increasing profitability.

Consequently, the airline company has to improve its service quality in order to make

customer satisfied with airline’s services.

In airline industry, the service sector regarded as an importance part of the airline

companies. Most passengers who decide to use air transportation services, not only

they concern about price they have to pay, but also they concern about service quality,

they will receive from airline companies. Service quality is a customer’s services

(Bitner and Hubbert, 1994). The relationship of service quality represented in figure

2.1, which is also highlights the relationship between five dimensions of service

quality and customer perception of service quality. Many researchers agreed that

operation of excellent passenger service quality is one source of competitive

advantage in the airline industry. Goodman (1989) goes on to state that the airline

business has to concern with service quality issues because some problems with

services quality can make customer loyalty decline by 20%. Woodruffe (1995, p.106)

suggests “the customer’s judgment of an organisation’s service based on their overall

experience of the service”. Moreover, Fitzsimmons (2006) identifies five principal

dimensions that customers use to judge service quality:

1. Reliability dimension reflects to both dependably and accurately of a firm’s

performance.

2. Responsiveness dimension concerns on the willingness to help customers

and to provide promote service.

3. Assurance dimension address the knowledge, performance skill, and

courtesy of employees as well as their ability to inspire trust and confidence in

particular brand.

4. Empathy dimension refers to the caring, understanding, and custom attention

that are given to customers.

5. Tangible dimension reflects to physical facility, equipment and staff

appearance.

Figure 2.2 shows a dimension of service quality to measure customer satisfaction and

compare customer’s expectation and experiences are not easy for airline business in

order to measure customer satisfaction with different aspects of service quality, some

airline adopted Parasuraman et al. (1985)’s survey research instrument called

SERVQUAL method, the method contain 22 expectation and perception items,

representing the five dimensions of service quality. Lovelock (2001) illustrated as

“It is based on the premise that customers can evaluate a firm’s service quality by

comparing their perceptions of its services with their expectation”.

Lovelock (2001, p.364)

Figure 2.2 Dimension of service Quality

Source: Parasuraman, Zeithaml, and Berry (1985)

Furthermore, after reviewing the customers’ need and analysing competitive situation,

possible competitive advantages and improvement strategy can be identified, and

service strategy can be designed (Huiskonen and Pirttila, 1998).

Service Quality and Customer Satisfaction

Nowadays, many airlines concern more about airline customer satisfaction than other

strategies, because of the improvement in customer satisfaction is expected to increase

customer retention, which will often convert casual customer into customer loyalty,

then lead the organisation to a greater profitability and long-term success. Zeithaml

and Bitner, (2003) highlight the relationship between customer satisfaction and

service quality concepts (figure 2.2) and state that customer satisfaction as boarder

concept, while service quality assessment normally focuses on specific dimension of

service. Moreover, they suggested that the customer perception of service quality is a

component of customer satisfaction.

Word of mouth Personal needs Past experience

Expected service

Perceived service

Dimensions of Service Quality

- Reliability- Responsiveness- Assurance- Empathy- Tangibles

Perceived Service Quality

1.) Expectation exceeded ES<PS (quality surprise)

2.) Expectation met ES=PS (satisfactory quality)

3.) Expectation not met ES>PS (Unacceptable quality)

In addition, Zeithaml and Bitner, (2003) also identify service quality is focused

evaluation of the customer’s perception to services they receive, such as interaction

quality, physical environment quality, and outcome quality. On the other hand,

customer satisfaction is more inclusive aspects, the customer satisfaction is a broad

perception influenced by service quality of airline industry are scheduled flights

depart and arrive on time, availability of flight attendants to assist the passengers, and

air crews performance, courtesy of ground staff. On the other hand, customer

satisfaction with the airline is broader concept that will certainly influence by

perception of airline service quality, but that will also include the perception of

product quality such as seat comfortable and quality of food and beverage in-flight,

air fare price, personal factor such as customer emotional and perception of equity or

fairness, and even uncontrollable situations such as flight delay or hail storm. These

elements are factor that affect to customer satisfaction to dissatisfaction.

Figure 2.3 The relationship between service and customer satisfaction

Source: Zeithaml and Bitner (2003)

ReliabilityResponsiveness

AssuranceEmpathy

Tangibles

ReliabilityResponsiveness

AssuranceEmpathy

Tangibles

ReliabilityResponsiveness

AssuranceEmpathy

Tangibles

Interaction quality

Interaction quality

Outcome quality

Service quality

Product quality

Price

Customer satisfaction

Situation factors

Personal factors

2.4 Customer Relationship Management (CRM)

Drucker (1999) said, "The purpose of a business is to create customers." it is the

importance of keeping those same customers and of growing the depth of their

relationship with them. It is a fact that most of the customers are profitable for the

business in the second year of their business with you. Customer Relationship

Management (CRM) can be the single strongest weapon the companies have to ensure

that customers become and remain loyal.

According to Anderson and Kerr (2002), Customer Relationship Management is a

comprehensive approach for creating, maintaining and expanding customer

relationship in order to make the customer satisfaction and loyalty with business as

long as possible. Kincaid (2003) gave definition of Customer Relationship

Management that is the strategic use of information, processes, technology and people

to manage the customer’s relationship with your company (Marketing, sales, services

and support) across the whole customer life cycle.

At its best, Relationship Management (RM) is characterised by a genuine concern to

meet or exceed the expectations of customers and to provide excellent service in an

environment of trust and commitment to the relationship, is that provided by Buttle

(1996).

The term CRM is being used in number of different ways. The terms CRM is used to

give details about software applications that mechanize the selling, marketing and

service functions of the business. CRM could be thought at three different levels:

Strategic CRM

Strategic CRM is more leaned towards the development of customer-focused kind of

business culture. This culture is striving to create and retain the customers by

providing them better value than competitors do. Resources are used to enhance

customer value; specific reward systems are introduced to improve employee

behaviours to increase customer satisfaction. The best among employees is one, who

would provide an outstanding value or services to the customers. It could be outlines

as “A top-down perspective on CRM which views CRM as a core customer-centric

business strategy, that aims at winning and keeping profitable customers” (Buttle,

2004, p3)

Operational CRM

Operational level of the customer relationship management deals with the front line

interaction with the customers. It could through call centres, worldwide webs, direct

emails or call, or direct sales. It is more focused on the front office business processes

like sales, marketing and customer care. A client database is settled usually, where

each interaction with customer is added up, so that customers could easily interact

with different people in the organisation, without mentioning their personal

information over again.

Customer satisfaction is usually assessed through two techniques i.e. Customer

satisfaction model and SERVQUAL for services companies.

Customer satisfaction model

This model was given by Kano, which is used as a quality management and marketing

technique to measure the client’s happiness. This model distinguishes six categories

of quality attribute, of which, first three focuses on customer satisfaction(Basic

factors, Excitement factors and Performance factors), which other three factors

mentioned by Kano are, Indifferent attributes, Questionable attributes and finally,

Reverse attributes.

Analytical CRM

Analytical CRM is focused on using the customer data to enhance the customer and

organisation value. It is based on the customer information. This data could be found

from history of the purchases made, credit scores or payments made, marketing data

taken through the surveys or loyalty schemes etc. This information helps the

organisation to identify its loyalty customers, and will help the company to get

answers of the most important questions like, customers who are most likely to switch

to the competitors, which customer would respond to certain offer, which customer

should be targeted, which part needs more sales efforts etc.

Analytical CRM, in customer’s point of view, delivers most timely, more personalised

solutions to the problems of the customers, getting the customer satisfaction in return.

In organisation’s point of view, analytical CRM provides more powerful up selling

and cross selling chances, with effective customer acquisition and retention

techniques.

2.5 Importance of Customer Retention

At present, all businesses are more severe competition because competitors will try to

add more customer base but what is the importance of business services that should

not be overlooked is to keep customers stay with us as long as possible. An

establishing which organizations were retention focused between customer acquisition

and retention, customer retention considered to be more important than acquiring new

customers, thus organisation must recognize and emphasize very much due to the

customer retention is competitive advantage. The company sees the advantage of

existing customers that can enable operators to survive in the future.

According to Buttle (2009), customer retention is the maintenance of continuous

trading relationships with customers over the long term. Customer retention is

equivalent to low defection, and it is the customer continues to purchase the product

or service over a specified time period (Blattberg et al, 2001).

Moreover, customer retention, with regard to customer satisfaction, is becoming

increasingly significant, because customers today have the opportunity to choose from

such a large range of products and services, and because the competition within

various markets is becoming ever fiercer. Following the adage that one has to invest

six times as much in a new customer as in an already existing one, companies are

discovering new potential in the building up and maintenance of a stable customer

base. This is the source of commercial success and long-term growth, (Raab et al

2008, p. 79).

Bliemel and Eggert (1998, p. 38) understand customer retention to be a, ‘System of

activities for enhancing the transaction process, on the basis of the positive

positioning of the customer, and the resultant readiness for successive purchasing.’

Homburg and Bruhn (2002, p.8)’s definition puts more emphasis on the guiding of

customer retention. They speak of customer commitment management. This,

‘Comprises all of a company’s measures which are targeted at the positive shaping of

the customer’s current behavior patterns, as well as the future intentions of the

customer with regard to the provider, or its services, in order to stabilise or expand the

future relationship with the customer’.

Furthermore, customer retention is important for any business to maintain customer

loyalty, which is to retain customers on a revenue base. One important event activities

that help maintain old customers to establish customer relationships which its costs of

doing less than finding new customers, Anderson (2002).

Conversely, finding new customers is also important for all businesses as well,

especially the business recently. The purpose of this activity is to increase the number

of new customers, included finding customers of the competitors or clients with the

ability to spend, but never use service. Consequently, the retention of old customers

and acquire new customers is essential for any business. Both these activities would

promote mutual. Although customer retention is good, customers would either

disappear or be reduced to therefore businesses must find new customers for a

replacement.

What marketers must do is the first stage of starting the business will be focused on

finding new customers because customers have not much, but when business began to

wash phase will focus on the retention of old customers and acquire new customers.

When a business is a market leader, must focus on retaining old customers rather than

finding new customers.

Given the dramatic impact that improved customer retention can have on business

profitability and the fact that many organisations continue to place too much emphasis

on customer acquisition, there is a strong need for a structured approach which

organisations can follow that leads to enhanced retention and profitability. A

framework for customer retention improvement, involving three major steps: the

measurement of customer retention; the identification of root causes of defection and

key service issues; and the development of corrective action to improve retention

following as below.

Figure 2.4 Customer retention improvement frameworks

Source: Christopher, Payne, and Ballantyne (2007)

2.6 Customer Loyalty

When an organization knows how to contact the customers will get the best

compensation. Loyal customers buy increasing continuously and tell more people

that's true customer loyalty. Competitive advantage can be achieved through customer

loyalty. This is the way to gain the best kind of customers and retain them. The retain

customers tend to spend more money and provide the best word-of-mouth advertising

(Hayes, 2008).

Customer loyalty can be defined as the totality of feelings or attitudes that would

incline a customer to consider the re-purchase of a particular product, service or brand

or re-visit a particular company, shop or website. Customer loyalty has always been

critical to business success and profitability (Passikoff, 2006).

According to Peppers and Rogers (2004), Customer loyalty who is willing to pay a

premium for Brand A over Brand B, when the products are represented virtually

equivalent, but the emphasis is on willingness, rather than on actual behaviour. In

terms of attitudes, then, increasing a customer’s loyalty is virtually equivalent to

increasing the customer’s preference for the brand. It is closely tied to product quality

and customer satisfaction. Any company wants to increase loyalty in attitudinal terms

in order to emphasis on improving its product, its image, or other elements of the

customer experience relative to its competitors.

In addition, the behavioural definition of loyalty that someone is willing to pay a

premium for Brand A over Brand B, without respect to the attitudes or preferences

STEP 1 STEP 2 STEP 3

Customer retention

measurement

Cause of defection

identification

Corrective action to improve retention

that underlie that conduct. By this definition, customers are loyal to a company if they

buy from it and then continue to buy from it. Loyalty is concerned with repurchase

activity regardless of any internally held attitudes or preferences.

In the behavioural definition, loyalty is not the cause, but the result of brand

preference. A company wants to increase customer loyalty, it will focus on whatever

tactics which will be in fact increase the amount of repurchase behaviour tactics that

can include easily without being limited to, raising consumers’ general preference for

the brand or their level of satisfaction with it (Peppers and Rogers, 2004).

Customer loyalty is determined by three factors, relationship strength, perceived

alternatives and critical episodes. Major factors that negatively affect customer

loyalty:

The customer moves out of the service area

The customer has not need a longer for the products or service

More suitable alternative providers become available

Poor handing of a critical episode

Engendering and enhancing customer loyalty is a core objective of loyalty marketing

is that businesses employ a strategy in order to increase the loyalty of customers and

other stakeholders in the drive to meet and exceed commercial objectives. The

fundamental assumption in loyalty marketing is that keeping existing customers is

considerably less expensive than acquiring new ones. Reichheld and Sasser (1990)

claimed that only a 5% improvement in customer retention can lead to an increase in

profitability between 25% and 85%. Therefore increasing of customer loyalty has a

direct relationship with increased profitability.

Due to the concordance in the purchasing behaviour of loyal customers who were

satisfied products and/or services are increasingly, the long-term customers are less

likely to change to competitors, that competitors are less likely to enter the market or

market share. Gaining new customers might come from introduce through word of

mouth by customers loyalty and loyal customers also makes employees jobs easier,

which their feeds back into improved customer service.

It is also important that marketing departments assess as best they can the profitability

of each customer or business segment, whether in a business-to-consumer or business-

to-business context, not all customers are profitable and striving to maintain the

loyalty of unprofitable customers or partners is not always commercially viable.

Analysing customers’ relationship costs with revenue can demonstrate this and it is

best business practice to terminate those relationships, which are found not to be

profitable.

2.7 Service Marketing Mix 7Ps

The service marketing mix is one of the most basic concepts in marketing term; the

concept is adaptation of traditional marketing (marketing mix). Berry defines the term

‘service products’ as a service is an intangible product involving a deed, a

performance, or an effort that cannot be physically possessed. As the definition

before, the characteristics of service product mean that they can be targeted in the

different way from others kind of products. Yet, Kotler (2005) has noticed that service

businesses are more difficult to manage if using only a traditional marketing

approach. Therefore, the traditional marketing mix (4Ps) has to be extended with

another three elements which are People, Physical evidence and Process to complete

7Ps for service. Furthermore, it defines as the major elements an organization controls

that can be used in order to satisfy, communicate, and understand more about the need

of customers. There are some service special characteristics as shown in the table

below.

Service Characteristics

characteristics Major effects Marketing implications

Intangibility Difficult for consumers to

evaluate service offering, e.g.

quality, etc. Positioning difficult

to achieve/signal

‘tangibilize’ the service

offering by managing the

‘physical evidence’ that

accompanies the service,

e.g. staff appearance,

buildings/facilities,

promotional material

Inseparability Direct contact service provider. Selection and training of

Both provider and client effect

‘quality’ of relationship.

Market may be limited by time

constraints on provider

service provider’s

personnel is essential.

Franchise/ train other

service providers. Develop

systems/ procedures for

increasing customer

throughput

Variability Difficult to ensure that service

quality level are maintained.

Customer may have ‘bad’

experiences

Ensure strict quality

control. Staff training

essential. Develop

customer care programmes

and systems.

Perishability Periods of excess demand:

period of excess supply

Manage demand and

supply, e.g. :

Differential pricing

Develop

complementary

service

Effective pre-

booking systems

Use part-time

personal

Non-ownership Customer finds it difficult to

assess advantages of purchasing

service

Stress benefits of non-

ownership in promotional

programmes

Table 2.1: service characteristics

Source: Lancaster et al (2002), Essentials of marketing, p.219

1.) Product

In marketing term, ‘product’ refers to the goods and services that the company offers

to make an attention, use or consumption for their target customers in order to satisfy

needs and wants. Some factors of product that can attract the customers are quality,

style, packaging, services, design, features, brand name, warranty, etc.

2.) Price

Price is the amount of money that the customer pays in order to get the products or

services. Some factors of price are discounts, payment period, credit terms, pricing

strategies, e.g. economy price, penetration price, Psychological price, Price skimming

etc. Price is quite sensitive for the customer. It is highly important and factor in the

customer buying decision. If the company sets the price too high for their products

(general products) and there are a lot of competitors in the market place so the

customers will compare your products with other competitors and you might lose

them finally unless your product is unique and very high in quality.

3.) Place

The third P is Place, which refers to the channel of distribution of the products from

the manufacturer until end to target customers. Place is one of the factor that is

important. If the companies present their product in the right place, it will help them

to hit the target customers easily. Some factors of place are channels, locations,

transport, types of intermediaries, order processing systems, etc.

4.) Promotion

This P refers to all the activities that present the advantages of the products and

services in order to persuade the target customers to purchase it. The main purpose of

promotion is to consider of the product features and benefits. An effective promotion

activities must be contained the clear; use simple messages and place in the right

media to reach each customer group. Promotion consists of advertising, Sales

promotion, Public relations, direct mail, advertising and personal selling.

In order to be successful in service business, there are three more extended necessary

elements will be added on

5.) People

People or staffs are an essential element to the service business condition. Woodruffe

(1995) suggests that high quality of service is very important in service marketing,

because consumer are now becoming increasingly sophisticated in their expectations

and make more higher demands for the service that they will receive from the

organizations who serve them. However, Zeithaml and Bitner (2003) has argued that

people in the services marketing mix apply not only to service provider, but also

recognize all of human actors participating in the delivery of a service including the

firm’s personnel customers, and other customers in the service environment. Some

factors of People are staff’s training (To gain a competitive advantage recruiting the

appropriate staff is the most recommended), staff appearance, staff attitude, etc.

6.) Process

“A process is a series of actions taken in order to convert inputs to something of

greater value” Finley (2000). It is neither effective nor efficient if the process does not

offer a great value. Zeithaml and Bitner (2003) has explained that the process in

service marketing mix defines as the actual procedures the customer experiences or

operation flow of activities, it gives the customers evidence on which to judge the

service. Some factors of process are ordering systems, delivery systems, etc.

7.) Physical evidence

The physical evidence is one of major factors that can influence the customer’s

perception of the service. Quote from Zeithaml and Bitner (2003, p.25) physical

evidence can be defined as

“The environment in which the service is delivered and where the firm and customer

interact, and any tangible components that facilitate performance or communication

of the service”

Some factors of physical evidence are condition of company facilities, corporate

image, etc. Physical evidence may be use as a way of assessing the product quality

before decide to purchase. Blythe (2006) has noticed that there are four generic ways

to add value through physical evidence.

1. Create physical evidence, which increases loyalty.

2. Use physical evidence to enhance brand image.

3. Use physical evidence which has an origin value of its own, e.g. a free gift.

4. Create physical evidence, which leads to further sales.

2.8 Competitive Advantage

Historically, many researchers emphasize on the competitive advantage in the past

decades. The outstanding theory among these researchers is Michael Porter’s work

although he was not the first person who discussed competitive advantage. Porter

(1985) describes that it grows out of the value a firm is able to create for its buyers

that exceeds the firm’s cost of creating it. Value is what the buyer is willing to pay,

and superior stems from offering lower prices than competitors for equivalent benefits

or providing unique benefits that more than offset a higher price. Indeed, the initial

idea of competitive advantage started from Alderson (1965) creates his own theory as

one of the companies should try to make their own character to gain the outstanding

value over the competitors which is “Dynamic Marketing Behaviour: A Functionalist

Theory of Marketing”. Alderson’s work was acceptable and respected among the

researchers at that time. After his work done, there were some more researchers

attended to define the competitive advantage. Hall (1980) and Henderson

(1983) combine the assumption that companies must find or create unique advantages

if they want to survive in a competitive environment. Later, Day and Wensley (1988)

decide their work “Assessing Advantage: A Framework for Diagnosing Competitive

superiority” which is shown that there are two sources in the process of competitive

advantage. These are superior skills and resources. A few years after these ideas

launched they were used in many further researches.

In business management term, according to Sutherland and Canwell (2004)

‘competitive advantage’ refers to a situation where company has a competency to

providing the customers better quality, value or services than other competitors.

Basically, competitive advantage would be measured and focused through low prices

but for more benefit and greater quality, higher prices are accepted as a result in this

case. Besides, in economic term, ‘competitive advantage’ exists when the revenue

exceeds costs. Company will gain competitive advantage when it offers more value of

economic than the competitor also depends on both of company’s benefit, cost of

production and so on. Whenever the company creates the economic rents they need to

earn not only just to covers costs but also getting high benefit.

Understanding Competitive Advantage

Hollensen (2003) explains that in the past competitive advantage depended on where

the company was located or where it decides to contribute its products or services.

The environments are also important especially to make the large and stable company

to be successful. Nowadays, it’s more difficult to maintain competitive advantage due

to the following reasons. Companies maintain a competitive advantage only so long

as the services they deliver and the manner they deliver them have assigned that

correspond to the main buying criteria of a substantial number of customers. The

different value of products and services of one company and its competitors is the

main factor to maintained competitive advantage as a result.

The business initiator starts with the need to combine the capabilities that is the most

crucial to make money in their business. Competitive advantage not only just defines

for the superior capabilities in every area of business but have to include others

significant capabilities that can determine how much of the benefit can its owner

earns. In short, competitive advantage comes only when companies gather

combinations of capabilities that are difficult to imitate.

Roots of Competitive Advantage

According to Hollensen (2003), an origin of competitive advantage comes from two

theoretical perspectives that are market orientation view (MOV) and the resource-

based view (RBV) (hereafter MOV and RBV) and they work in the different aspects

also provide different potential.

RBV supports inward looking and stresses the rent-earning characteristics and the

development of corporate resources and capabilities, whereas MOV is the willingness

of outward-looking adapting to market condition. RBV perspective strategies,

however, do not exploit a company’s characteristic competency are likely to be

useless, ineffective and unprofitable tools.

The resource-based view (RBV)

Gronroos (1996) has noticed, “A true transaction towards a relationship marketing

strategy requires a focus on competences and resources in the relationship because

partners in a relationship use each other’s resources”

RBV theory has its roots in economic theory (Penrose, 1959). According to

Grant (1991), the long-term competitiveness of a company depends on its resources

that differentiate from its competitors that are durable and difficult to imitate and

substitute. The company’s resources can be typically divided into two types that are

tangible and intangible resources. Tangible resources are defined as an element of a

company that can be touched, seen and some can be quantified for example raw

material, company structure and equipments. Intangible resources has the opposite

meaning as tangible resources which means the inputs of a company that can not be

touched or quantified for example trademarks, patents, copyrights, skills and

knowledge of people, ability, organisational culture, networks and company’s

renown.

Despite, operating both of resources are very useful for the company, competence-

based theorists argue that intangible resources are the important source of competitive

because of it is difficult to be seen so they are difficult to understand and imitate.

Consequently, they are most likely to be a source of competitive advantage.

Market Orientation View (MOV)

MOV or fit model is how the company accommodate its assets to get fit and properly

with the environment. Kohli and Jaworski (1990) describe that “Basically,

MOV is about adapting to the market environment”. However, it can cause an

expensive production costs if the company try to provide different customer in

different countries. Although the customers will get satisfied but the costs would be

very high depends on how distinct of the products are if compare with others

companies.

Main differences between the resource-based view (RBV) and the market

orientation view (MOV)

Marketing orientation view

(MOV)

Resource-based view

(RBV)

Basic principle Adept firm’s resources to the

requirements of its competitive

environment, i.e. to key success

factors.

Pro-active quest for environments

that allow the best exploitation of

the firm’s resources.

Strategic analysis Centred on industry structure and

market attributes

Emphasis on internal diagnosis

Formulation process Outside-in Inside-out

Source for

competitive edge

Market positioning in relation to

local competitive environment.

Firm’s idiosyncratic set of

resources and competences.

Table 2.2: The main different between RBV and MOV

Source: Hollensen (2003), Marketing Management: A Relationship Approach, p.39

As mentioned before, during the last decades studying about competitive advantage

became more well-known topic discussion among the researchers. Day and Wensley

(1988) have noticed that “it’s quite clear that there’s no common meaning for

competitive advantage neither in marketing strategy literature nor in practice”.

Hall (1980) founds that to be able to compete in an industry it is vital for every firm to

have a competitive strategy by taking offensive and defensive actions to create a

defendable position. Porter (1980) additionally explains that these strategies can be on

one hand implicit, which means that they arose through activities of the different

departments of the firm or on the other hand explicit through the development of a

planning process. There are so many discussions about competitive advantage, but

Porter’s Generic Strategies model is among the most widely discussed. It considers

competitive advantage following three strategies, which will be discussed in the next

section.

Porter’s Generic Strategies

According to Porter (1998) “A company can outperform rivals only if it can establish

a difference that can preserve”. His statement tended to proposes that a company

needs to choose one of three generic strategies as many business and non-profit

organization can beneficially follow. In order to make up his general model, these

strategies would be involved in five forces model of Porter. Sustainable competitive

advantage and higher beneficial in returns are as a result of these strategies. (White

1986, p.219)

Generic strategies are included the three basic strategies of cost leadership or cost

advantage, differentiation and focus or niche. All of these can be explained in the

different ways. Lynch (2006) illustrates that the three options can be explained by

considering two aspects of the competitive environment:

1. The source of competitive advantage: There are fundamentally only two sources

of competitive advantage, which are differentiation of products from competitors and

low costs.

2. The competitive scope of the target customers: It is possible to target the

organization’s product as a broad target covering most of the market place or to

narrow down target and focus on a niche within the market. Porter then combined

these two aspects together and created his famous Generic Strategies diagram as

shown below:

Figure 2.5 Porter’s Generic Strategies

Source: Made by researcher based on Porter, M (1985) Competitive advantage,

Low cost Differentiation

Broad Target

Narrow Target

Competitive Scope

Cost Readership Differentiation

Focus

The Free Press, New York

Cost leadership

Hall (1980) defines cost leadership as the firm offers the same service like another

firm but in the lower price. Dobson et al (2004) additionally describe cost leadership

as the firm makes an effort to be the lowest cost supplier and thus gain superior

profitability from average price-cost margin. In order to eliminate costs, low cost

producers have to exploit all the sources of cost advantage. Cost leadership approach

requires an offensive structure of cost reducing methods, profitable facilities, tight

cost of overhead control as well as avoiding the low purchasing power customers and

minimize costs in several areas like R&D, PR, customer service, advertisement and so

forth. The low- cost producers usually sell a standard, or no frills, products and place

considerable emphasis on reaping perfect cost advantage or scale from all sources

(Porter 1985, p.13).

Differentiation

“Differentiation occurs when the products of an organization respond to the needs of

some customers in the market place better than others” (Lynch, 2006, p.453). When

the company is able to makes its different products, it is able to charge a higher price

than the average price in the market place. The customers will pay more for the

differentiated product by considering from design, well known brand image, company

reputation, newly technology, better level customer service, more luxurious materials,

better performance and so forth. Achieving in company image, Moreover, quality and

reputation will not be just profitable for the company as well as a cost to the

consumers (Lumpkin et al, 2002). It has emphasized by Porter (1980) that price are

not primary target for decision making of differentiation strategy, however, a

company shouldn’t ignore the cost factor. Besides, “successful differentiation

strategies are not simply based on giving a product additional attributes to those of

rivals. Key elements in success are that consumers can see the differences, customers

are willing to pay extra for the differentiated product and rivals find it difficult to

match the quality of the product”. (Dobson et al 2004, p.57)

Furthermore, Lynch (2006) has indicated that there are two problems associated with

differentiation strategies:

1. Although a company charges the customers the higher price but it is still not clear

and difficult to estimate whether the extra costs incurred in differentiation can be

covered the cost.

2. Being the first into the market sometime is not an advantage. As soon as you are

successful in differentiated market, you may attract competitors to duplicate your

products, follow your production and enter the market segment. Due to the fact that

associated with being the first into the market often occurs a high costs, so moving

second may be additional cost advantage.

Focus

Focus is the third strategy to gain competitive advantage. This strategy sometimes

called ‘niche’. According to Porter, because of sometimes neither a cost leadership

nor a differentiation strategy is likely to meet the needs of customers throughout the

broad market. For instance, the costs of gaining low-cost leadership sometimes are not

possible to require a great number of funds. Also costs of differentiation may be very

high while serving customers in the mass market.

Moreover, under the same brand which is concerning quality, it is unreliable to

present the high quality but very cheap products. So the best way to solve this

problem is develop the new brand name. All of these reasons, focus strategy would be

approved. Focus strategy is a mixture of cost and differentiation. It mainly involved in

a different segmentation and serves the customers in specific target group by offering

different product line. As Porter describes “It rests on the choice of narrow

competitive scope within an industry. The focuser selects a segment or group of

segments in the industry and tailors its strategy to serving them to the exclusion of

others” (Porter 1985, p.15).

In the further development of Porter theory, he argued that the company might follow

this process either by using a cost leadership strategy or a differentiation:

In a cost focus approach a company seeks a cost advantage in its target

segment only.

In a differentiation focus approach seeks differentiation in its target segment

only. There are some problems with the focus strategy:

If economies of scale are important in an industry for example the car

industry, cost focus may be difficult to undertake.

Niche is so small group and may not be large enough to justify attention.

In nature, the niche is clearly specialist and may disappear over time.

All of these problems are not always difficult. In contrast, many small and medium

sizes firms have noticed that it’s the most interesting and useful strategy to explore.

(Lynch, 2006, p.455)

The risk of being stuck in the middle

As mentioned before a competitive advantage can just result on the one side from

undertaking a value creating strategy on the other hand, through the developed

implementation of the same strategy as competitors, (Bharadwaj et al, 1993). In fact,

all these strategies can help the company to achieve competitive forces but there are

some risks engage in each generic strategy. If a company fails to gain and use its

resources successfully it called ‘stuck in the middle’ which can be explained as a very

poor performance situation. If the company maintaining to follow the low cost track

as well as the differentiation strategy or focus but just have a low success in each

track then this situation can result in lacks in capital investments and also market

share. Once stuck in the middle. It needs great effort and time to recover in order to be

successful and sustainable reposition the company (Porter, 1980).

Sustainability of competitive advantage

The competitive advantage can be achieved through the company’s abilities. This can

be described when the company can do or produce something that another company

can not or can produce something better in quality but can offer the lower price. This

can determine the company’s competitive position (Barney, 1991). In addition,

Competitive advantage will only be realized when the company manages to merge

various resources in order to gain unique competency that is from special value from

the market place. In short, sustainable competitive advantage is the situation when the

company can create special valuable product as well as process and position by

achieving the economic rents for a long-term period that the competitors are unable to

duplicated or imitated (Morgan and Hunt, 1996).

In order to achieve competitive advantage, in this research there are two main factors

are involved which are consumer’s buying behaviour as well as service marketing

mix. Studying about consumer behaviour and service marketing mix helps companies

and organizations to improve their marketing strategies by understanding the

following issues

How consumers feel, think and selecting the product or service.

How the consumers are influenced by their environment e.g. family,

occupation, cultural, etc.

The customers have limitations in knowledge and information abilities

influence decisions and marketing result.

How marketers can improve and adapt their marketing campaigns and

marketing strategies to reach the consumer more effectively.

How marketers can use marketing mix in service industry appropriately to

accomplish the goal of service marketing.

In the marketing aspect, all as mentioned before can indicate that if the companies

understand the role of those factors and undertake them as the most appropriate tools.

It would be approved to show the outstanding performance of the companies also how

the company gaining competitive advantage.

2.9 Summary

The following conclusion can be drawn from this presented chapter; it is obvious that

the service business has many factors to impact on the decision of the customers use

on the satisfaction of the customer to become the customer loyalty. Thus, it is

important for marketers to understand the customer’s needs to retain those customers.

Chapter 3

Research Methodology

3.1 Introduction

The previous chapter presented a theoretical review and conceptualization of the

interrelated concepts and studied linked to the research questions as “How customer

satisfaction as strategic market tool competitive advantage to the company”. In this

chapter, a methodology for the research will be presented in order to the applied data

collection of the research. The objective of this chapter is to identify the methodology

to gather information for both primary data and secondary data. In addition, the

researcher will classify research philosophy, research approach, research design,

sampling issues, data collection methods, and research instruments. The details for

each part are demonstrated as below.

3.2 Research Philosophy

As mentioned by Saunders et al. (2009), research refers to the way people initiate the

finding of facts in a logical system. This develops their understanding, and consists of

a specific set and series of activities with tangible and intangible inputs and outputs

(Maylor and Blackmon, 2005). To conduct the research, the appropriate process

should be applied since the method of data collection has a dominant influence on

findings (Robson, 2002).

Basically, research philosophy describes a ‘theory’ of research in a specific area and

explains the assumptions that generate the research approaches (Maylor and

Blackmon 2005). Fleetwood and Ackroyd (2004) expressed that the research

philosophy can be classified into three paradigms, that is, positivism, phenomenology

(interpretivism), and realism.

3.2.1 Positivism

As quoted by Briggs and Coleman ( 2007, p.175) “ positivism is influenced be the

world of the physical sciences where it is assumed that the world has an objective

reality in which patterns, trends, and causal relationships can be observed or otherwise

discovered”, Thus it is also possible to have a study of human behaviour, speech, and

activity (Fisher,2007). The ‘resource’ researcher would argue to be external to the

data collection process as there is obviously little that able to be done to revise the

substance or the data gathered. So, the assumption is that “the researcher is

independent of and neither affects nor is affected by the subject of the research”

(Durrheim, 2006, p.114).

3.2.2 Phenomenology

“When we look at the question from the inside, as we have seen, the picture looks

different. Someone who looks from the inside we can call a phenomenologist.

Phenomenology is the philosopher’s word for reflecting on the nature of our

conscious mental life” (Veal, 2006, p.79). Some author has expanded the meaning of

the word inside that it is similar to the word “mind”. Mind is clearly returning as

acceptable scientific language in the literature” (Crewell, 2002). Phenomenologist is

based on reality rather than the numbers. It refers to the way people experience and

making sense the world (Curwin & Slater 2002). Therefore, qualitative approach will

be taken into account. One of the advantages of phenomenologist is that, because of

its highlight on the inductive compilation of large amounts of statistics, it is more

likely to pick up factors that were not part of the original research focus.

3.2.3 Realism

Within the context of realism, Dyer (2006) construed that the realism believes that

social reality is different from its human factors and can be studied as a separate

phenomenon. The realism concept must capture the nature of the human subject and

particularly the main features of self-consciousness and possession of language.

Realism is useful for a research in terms of providing an explanation, but offering less

prediction than in positivism (Fisher, 2007).

After consideration of the philosophy that needs to implemented, the philosophy that

is most appropriate in this research study is positivistic research, owing to this

research is tended to be the scientific as it is suitable for quantitative results, by

conducting a questionnaire to be the main technique for the primary data collection on

a target sample, by emphasising on close-ended question. In contrast, the researcher

has also decided to use an interview as a research strategy for qualitative data, which

it should be phenomenology. However, using an interview for primary data is an

assisting for questionnaire to explore and gain insight information on customer

satisfaction from passengers had used service of Thai Airways in order to help the

researcher to reach the aim and objectives of the research.

3.3 Research Approach

In doing research, it is essential to classify a research approach to have a

comprehensible research outline that should be accomplished. Basically, there are two

categories of research approaches, which are inductive and deductive. A deductive

characteristic is the commonest view of the nature of the relationship between theory

and research (Bryman and Bell, 2007). As noted by Lancaster (2005), a deductive

approach develops and tests out theories/hypotheses through empirical observations

In essence, it is a set of methods for using theories in real societies to examine and

measure the validity.

By contrast, an inductive approach is an approach to signify the expansion of a theory

as an outcome of the observation of empirical data (Saunders et al., 2009). In

qualitative research induction rather than deduction trends apply. Notwithstanding, as

can be expected, it is not easy to apply a solely inductive approach in practice, as it is

somewhat difficult to debar all other point of views or even to have a totally open

mind when dealing with problem (McGivern, 2009). Due to the topic of this research,

regarding the critical analysis the collaboration between public and private sectors,

In this research, the researcher applied deductive approach for data collection from

the target group by distributing questionnaire to answer the question ‘How customer

satisfaction as strategic market tool competitive advantage to the company’.

Furthermore, the researcher also gained the information from secondary data. All

information was helpful for supporting this research topic.

3.4 Research Design

According to Durrheim (2006, p34) “A research design is a strategic framework for

action that serves as a bridge between research questions and the execution or

implementation of the research. Research designs are plans that guide ‘the

arrangement of conditions for collection and analysis of data in a manner that aims to

combine relevance to the research purpose with economy in procedure”. There are

some categories of research design as below:

3.4.1 Exploratory Research

Research, in accordance to Robson (2002, p.144), an important means of finding out

“what is happening: to seek new insight: to ask questions and assess phenomena in a

new light”. Correspondingly, Marshall and Rossman (2006) noted that the purpose of

the exploratory study is to explore little-understood phenomena, and to classify or

discover significant categories of meaning, as well as to create hypotheses for further

research.

3.4.2 Descriptive Research

The object of descriptive research is “to portray an accurate profile of persons, events

or situations” (Robson, 2002). The purpose of descriptive study is to document and

explain the phenomenon of interest. The research questions usually relate to “what

are the salient actions, events, beliefs, attitudes, and social structures and processes

occurring in this phenomenon?” (Marshall and Rossman, 2006, p.139).

In this dissertation aim to evaluates of customer satisfaction as a strategic marketing

tool for competitive advantage. The researcher used descriptive research as the type of

research design by using quantitative research method to estimate customer

satisfaction that used Thai Airways service. Also, this research is focused mainly on

close-ended question for collecting the data in the limited of time.

3.5 Data Collection Methods

As Lancaster & Reynolds (2002, p.63) defined “when the data for marketing problem

cannot be found in secondary sources the company must then generate primary

information, usually though a survey involving four major step: 1.Setting objectives

for the survey 2.Developing the survey method and sample design 3.Collection of

data 4.Interpretation of data”. After the research objectives have been specified, it is

essential to generate the research design. Obviously, the research design is the map

for the entire study. This plan will denote the data required, and the methods will be

applied to collect them, as well as to analyse and interpret the outcome.

There are two classification of data collection, namely primary data and secondary

data. Primary data is gathered for a specific purpose, when the information does not

exist somewhere else, whereas secondary data is collected for another purpose.

Generally, it is desirable to search for secondary data before involving in primary data

collection method (Reid and Bojanic 2009).

Primary Data

Tackling research questions may need more than the investigation of accessible data.

In this case, primary data is required to reach the particular aim of the research

(Wrenn et al., 2002). According to Easterby-Smith et al. (2008, p.11), “primary data

is new information that is collected directly by the researcher. The value of primary

data is that it can lead to new sights and greater confidence in the outcomes of the

research”. Correspondingly, as quoted by Chisnall (2005), primary data is created for

the first time by either one or a mix together of experimentation, observation and

questionnaires.

Obviously, the target group of this research is respondents who have had experiences

using service of Thai Airways, these were decided in 50 samples. The main purpose

of the questionnaire is for investigate the customer satisfaction in Thai Airways'

service by these were distributed to respondents at Heathrow Airport area in London.

For the interview group were decided 6 respondents. This research uses both of

secondary data and primary data to match with the research purpose, secondary data

are data collected by finding at textbook, journal, website and publications from

related companies. In primary data collection, the researcher will select interview and

questionnaire technique as close-ended question to obtain information from research

respondents.

3.6 Research Instrument

There are three main instruments applied in gathering primary data, namely

questionnaire, mechanical devices, and psychological (Kotler, 2008). This research

will apply the questionnaire as the main methods gather primary data from target

group.

There are several types of questionnaire, for instance, delivery and collection, postal,

on-line, telephone and interview schedule (Dillman’s, 2007). A complete assessment

of the questionnaire is vital. Such an assessment should be applied before the final

survey work in undertaken. The particular method used will count on the nature of the

research exercise and also the population being surveyed (Lancaster and Reynold

2002).

Importantly, questionnaire may be used with other methods in a multiple research

design, for example, a questionnaire to discover customer’s attitude can be

accomplished by in-depth interviews to explore and understand their attitudes.

Additionally, questionnaires usually require less skill and sensitivity to researcher

than semi-structured or in-depth interviews (Jankowicz, 2005). There are three forms

of questions, close ended and open ended questions (Saunders et al. 2008).

The close ended questions or forced choice questions, providing a number of

alternative answers from a limited range of options, known as multiple choice

questions (Dillman, 2007). Put simply, this close ended question is about asking

respondent to select answer from given options so that it is easy to answer because

minimal writing is requested. However, it can cause bias due to given options, which

is likely to be research’s opinion instead of respondent’s one. Meanwhile, open ended

questions require respondent to give wording answer. Yet, it can also cause to reduce

the response rates (Fink, 2003).

In this research the researcher applied questionnaire which was mainly used only

close-ended question, it might not be probing analyzed. The questionnaire was

conducted by randomly surveying 50 passengers who had adequated experience in

Thai airways were distributed to respondents at the area of Thai Airways in Heathrow

Airport. The research was conducted from 5-15 December 2010 and collecting as the

same time, however the researcher drawn the questions to assure that the respondents

can be response effectively and reflect the perception of the topic. The questionnaire

was divided into three parts as follows; into personal data, customer buying behavior

and customer evaluation of satisfaction about service.

3.7 Sampling Issues

Sampling is regarded as a mini-picture of the entire group from which it is drawn and

sample size depends significantly on statistical estimation (Veal, 2006). Perfectly, the

sample should be representative, so that the researchers are able to make precise

estimates of the behaviours and thoughts of the larger population (Lancaster and

Reynold, 2002).

Nonetheless, Kotler et al. (2002) expressed that designing the sample needs three

decisions. Firstly, who is to be surveyed (what sampling unit?). Secondly, how many

people should be surveyed (what sample size?). Finally, how the people in the sample

should is selected (what sampling procedure?). Thus, using probability samples, each

population member has a known chance of being included in the sample, and

researchers can estimate confidence limits for sampling error.

3.8 Sampling Technique

According to Ruane (2005) noted that sample techniques can be divided into two

categories, that is probability and non-probability. The former provides higher

consistency and less estimating sample mistake. The later are more flexible due to the

researcher obtained more choice to make contact and select the sample.

3.8.1 Non-Probability Sampling

Even though Chisnall (2002,p.48) stated that “probability samples have been

preferred over non-probability samples as they offer a better assurance against

sampling bias”, this research still applied non-probability sampling method due to the

following reasons. The investigator can obtain the information without unnecessary

traveling. Moreover, this method is less expensive than random sampling; it is

therefore match for students. Additionally, it is administering simple as it is easy for

the research to select and control the sampling (Chisnall, 2001).

3.8.2 Convenience Sampling

According to Zikmund (2000) noted, a convenience sample was one technique that

applied any available facet of the population, matched the criteria and reached the

research. Convenience samples are used to apply as there may be inadequate patients

to form a probability sample, and their convenient accessibility and proximity to the

study. Similarly, Patton (1990) expressed that convenience sampling provides a quick,

low-cost solution, yet it is principally prone to bias. Moreover, this may be opportune

to select our friends for a specific enquiry; it is however improbable to obtain the full

range of views. Thus, in case where bias is not considered as a problem, convenience

sampling is an attractive option.

As can be expected, the research method applied in this research was non-probability.

This meant that all respondents were randomly selected. The specific sample

technique was convenience, owning to this option is used when the population is wide

and easier to the researcher to contact people, who can reply the questionnaire

(Ruane, 2005). “Other advantages that the technique selected offers are the low cost

and less time cost and less time spends on the collection data” (Veal, 2006, p.117).

3.9 Field Work Details

This research was conducted from 5-15 December 2010. A hundred questionnaires

were distributed to respondents at the area of Thai Airways in Heathrow Airport. The

problems were happened during the period of distributing the questionnaires as some

passengers have refused to cooperate with researcher to answer the questionnaire

because they have not enough time. Finally, the researcher was able to gather and

interpret 50 replied questionnaires. The survey time frame of collecting 50

questionnaire answers has started from 5-15 December 2010.

3.10 Data Analysis

Data analysis is the process of ordering and structuring the gathered data to create

knowledge (Sharp et al. 2002). Of course, data analysis is based on the research

strategy. Quantitative data from returned questionnaire will be analysed by using

Excel program. As a result, the formers were examined by applying Excel program,

which is a data processor and the latter was evaluated by the researcher to find

similarities between the perceptions and descriptions of the respondents regarding to

the role of satisfaction that influences using the service of consumer. Thus, the first

step, after all data collected, was the codification and tabulation on the Excel table.

Subsequently, using the total of each variable, the graphics were elaborated by makes

from Excel. Finally at the interpretation stage, this research analysed the data

according to the literature review.

3.11 Limitation

During conducting the research, it was discovered that there were several obstacles in

the research process. In this part, limitations of the research will be classified under

the types of data. It is rather difficult to find sources to support the research, for

example, some related textbooks were not available in university library. Also, some

of journals that matched with the information had restricted access. Owing to the time

constrain with the submitted 28 January 2011 this has necessitated the researcher

collecting the questionnaire in a shorter time period than principle.

3.12 Summary

In this chapter, methodology is indispensable for the researcher in doing the research.

This chapter began with positivism as a research philosophy with a deductive

approach. Afterward, the quantitative strategy is applied as a research strategy.

Additionally, the data collection of the research contains of secondary data and

primary data. Secondary data is concerned with textbook, publications from related

companies and the Internet, whereas primary data was conducted through

questionnaire. The methods of sampling, justification for selecting the research

instrument and sample size were described in detail. The next chapter will illustrate

and discuss the outcomes of the primary research in relation to the literature review.

Chapter 4

Analysis and Findings

4.1 Introduction

The following chapter will demonstrate the analysis of research’s main findings in the

context of literature reviewed on the significant topics. Currently, there are many

people who live in London traveling towards their countries of origin, in this case

Thailand. Chapter four exposes the answers and findings as was proposed in the

methodology; closed-end question have been sent out to respondents who have had

experiences using service of Thai airways. The main purpose of the questionnaire is

for investigate the customer satisfaction as Thai Airways service have used

conceptual models and theoretical frameworks. This chapter will be categorized into

personal data, customer buying behavior and customer evaluation of satisfaction

about service.

4.2 Data Analytic Approach: Thematic Analysis

Thematic analysis based on the identification of themes in qualitative material, often

identified by means of a coding scheme. A widely used approach to qualitative

analysis for finding out about the reality or experiences of respondents, this is similar

to interpretive content analysis, described by Braun and Clarke (2006).

Thematic Analysis of this research considers the presence of terms concepts in

addition with numerical data obtained through a survey, the data analysis in this study

is a process of ordering and structuring the gathered data to obtain information and

elaborate conclusions. Of course, in this study the data analysis is based on the

research strategy; Quantitative data obtained from a questionnaire analysed using

Excel software with the aim to show graphically the information for an easy

understanding.

As a result, the information were examined by applying Excel program, which is a

strong tool that can be used for data analysis and numerical information processor,

through this software the information was evaluated by the researcher to find

similarities between the perceptions and descriptions of the respondents regarding to

the role of satisfaction that influences using the service of consumer.

Thus, the next step after the data collection is the codification and tabulation on the

Excel software. Next, using the data of each variable were elaborated the graphics

elaborated by Excel and finally those graphs were used in interpretation stage with the

aim to extract valuable information and to obtain conclusions. With the use of this

software, selected certain information is obtained for each theme of the desired study

and appear conclusions of easy understanding, being able to discriminate and regroup

the meanings.

Researcher may easily observe that this technique is very suitable for the desired

application, i.e., samples, small, simple statistical procedures and qualitative content

analysis. As we can see, this technique does not require much time but it does require

attention to detail, therefore cause problems of interpretation and evaluation, however

it is easy to discover qualitative aspects.

4.3 Categorising the Themes

According to the stage of thematic analysis presented above, this study was directed

to stay in harmony with the range of different materials collected and put the

information in the context before the analysis and classification. The main purpose of

this study is to analyse the case of Thai Airways and make an evaluation of customer

satisfaction as a strategic marketing tool for competitive advantage.

When the researcher analyse the information, appear some external and internal

factors that may produce complications inside Thai Airways, those factors should be

anticipated by the executives who should establish evaluation systems and planning

techniques with the aim to prevent those factors affect negatively the company.

External factors which were not measured could affect the performance of the airline,

the big problems for managers is how to identify these internal or external factors,

however internal factors are more predictable because are factors that the company

can control, nevertheless those are not less important than external.

Nonetheless, the factors considered in this study are mainly internal, because are

inherent to the customer satisfaction in the services that the company offer to their

customers. Below is showed some of this important elements or factors to be

considered in future studies.

Major Themes Perceived Benefits Key Issues

Satisfaction in the

Received Services

The evaluation of all of

those services that the

airline offer to their

customers shows the level

of satisfaction and reflect

directly how should be the

productivity and

performance inside the

company, also reflect the

negative aspects that

should be improve.

- Poor or good service

in-flight “qualification”

- Bad or good customer services on ground “Qualification”

Evaluation of the

company performance

The performance of the

company is evaluated in

the economical behaviour

and reflects the financial

state, external factors such

as global political situation

or competitors can affect

the overall performance.

- Competitors

- Political situation

- Economic Situation

Consideration in

customer satisfaction

The feelings of the

customers reflect directly

how is doing the service

the company, and show

the issues that can affect

negatively the

performance.

- Evaluation of customer

satisfaction

- Evaluation of offered

services

To analyse the above table some interviews were considered to determine the factors

showed above. In those interviews was considered the opinions of some passengers

and frequent users of the Thai Airlines who reflect their experience when they make

use of the Thai Airways services.

Respondents comment

1st Comment:

As far as I used to use service, Thai Airways is the airline that has its own identity.

Plane may be adjusted up to date each other, but what feel cannot be found elsewhere

is what comes from their heart to a unique service. I feel that this feeling can feel

when we walk a long way from home and back to Thailand because as soon as we

step up to the plane as we get back home, flights on time and clean through a cabin,

food was great but seats were very uncomfortable, do not have seatback TV so

entertainment is poor.

The respondent identify the importance of the familiar feeling they have in the plane

as very important, in this case the airline is successful in making a sense of

ownership, it help with the customer loyalty.

2nd Comment:

Although Thai Airways body cannot compete against other airlines and the price is

too high, I really accept that Thai's service is unique, when I saw crews' pretty smile

as friendly, I feel comfortable to sit in and food is also unique which is highlights of

Thai Airways that made me choose to use Thai Airways service and continue to

support them. I hope they will develop a better service order to.

The respondent explain that the high price is a key factor against the company but it

guarantee the good service

3rd Comment:

Flights took off and arrived on time, staffs were friendly and attentive but we were

hugely disappointed to have barely any entertainment on the 12 hour section between

London and Bangkok just one screen at the end of the cabin which as barely visible

and not always showing anything. Seats were comfortable but food was below

average.

Problems with the In Flight Entertainment service affect the performance during the

flight; the customers consider that the IFE is a key factor for get a complete

satisfaction.

4th Comment:

Thai still use the old 747 on this route. Despite being aware of there being no IFE (In-

Flight Entertainment), the price was great (book Thai direct on their own site as it's

much cheaper than all others), outbound flight totally full. The regular seats had

great leg room. The lack of IFE on the way out was fine as I slept. My complaint was

that the crew were nowhere near as Thai as they are known for. Apart from smiles

when we boarded, the crew in our part of the cabin were all miserable during the

flight. On the return leg we were upgraded to business class. Despite it being an old

747, the cabin was new and we had our own IFE (unlike the poor people in economy).

The food was amazing. IFE selection was great. However, once again the crew in our

part of the cabin were very grumpy. Only the purser smiled and acted in a friendly

way. I love Thai though and it'll always be my first choice when flying this route.

In specific routes, the lack of IFE is a problem in tourist class and the airline should

consider upgrading the cabin to offer better performance.

5th Comment:

Thai flies its old 747 on this route. Only seat left when booked was on the lower deck

by the wall which is not so desirable, welcoming check-in staff. The plane was quite

clean, seat is okay but not best in the industry - I could somehow sleep, too little

choice for IFE, friendly and attentive crew, food was fine. Overall is that a pleasant

flight.

Some chairs should be replaced in order to offer the best comfort during the flight.

6th Comment:

On time arrivals on both legs, Thai are still using the old 747's to LHR but seats are

quite comfortable, with excellent leg room compared to some of the more modern

aircraft. Food and drinks service fine and out of the way quickly on these night

flights, but the snacks available in the Galley consisted of stale sandwiches. IFE is

extremely poor so take a good book. Aircraft is very full because of Thai's competitive

pricing. I use Thai only

Questionnaire

The following questionnaire shows the answers obtained for analysis in some of the

factors that should have in account when is made an evaluation in customer

satisfaction as a tool of marketing, the opinion of the travellers provide an idea of

those factors affecting the performance of the company. This questionnaire will be

explained briefly in the next section.

In the first section I pretend to determine the profile of the people who answered the

questionnaire, to do this I asked 5 important aspects such as gender, age, purpose of

this travel, income, and regularity of using this airline. Determine the gender is

important to obtain equal number of questionnaires of each group.

Asking the age help to determine the differences in preferences according to the age

of the respondent, young people may be interested in different services in comparison

with eldest people.

Asking the purpose of travelling help to determine how the purpose of using the

airline affects the level of acceptance in the services offered by Thai Airways. An

executive in business travelling may prefer a completely kind of services over a

tourist in holidays.

I: PROFILE QUESTIONSIn this section please tick according your perception.

1. What is your gender?

Male ___ 5 ___ Female _ 5 _____

2. How old are you?

< 21 21 - 25 26 – 30 31 - 35 36 – 40 > 40

1 3 3 2 1 0

3. What is your main purpose of travel?

STUDY BUSINESS HOLIDAYS OTHERS 3 2 4 1

4. What is the monthly income do you have?

UP TO£500

BETWEEN £500 - £1000

BETWEEN £1000 -£1500

BETWEEN £1500 - £2000

BETWEEN £2000 - £2500

MORE THAN £2500

0 4 2 1 2 1

5. How often do you make to use of Thai Airways?

ONE PER DAY

ONE PER WEEK

ONE PER MONTH

EACH 2 MONTHS

ONE PER 6 MONTHS

OCCASIONALLY

0 0 1 1 4 4

In the second section I am interested in identify if the airline ask to their customers the

same kind of questions that usually is made when is evaluated the customer services

of the companies in this sector.

People believe between fairly and strongly agree that T.A. asked or evaluated

properly the service that the airline offer and people answered that T. A. always ask in

any way the services on board but it is not strong the evaluation of services on-

ground.

II: USAGE QUESTIONS

In this section please tick according your perception. (5. STRONGLY AGREE 1. STRONGLY DISAGREE)

About what the Thai Airways company is evaluating?1- Strongly

disagree2 3 4 5- Strongly

agree6. Had the company asked you about your satisfaction level with the flight?

0 1 4 4 1

7. Had the company asked you about the performance of your flight? 0 0 5 4 18. Had the company request your intentions of using the company services in the future?

0 0 0 7 3

9. Had the company asked you about your service’s preferences in-flight?

0 0 4 5 1

10. Had Thai Airways asked you about your service’s preferences on-ground

0 2 5 3 0

11. Have you been enquired about the services that make you prefer Thai Airways over other company

0 1 4 1 4

12. Have you been enquired by Thai Airways about your reasons to fly with this company?

0 0 0 5 5

In the third section I am interested to identify the customer feeling after a flight with

T.A. People were asked about overall performance of the flight and want to detect if

the flight cause any inconvenient to flyers, also detect the level of satisfaction of T. A.

customers in one Fly.

III: ATTITUDE QUESTIONS

In this section please tick according your perception. (5. STRONGLY AGREE 0. STRONGLY DISAGREE)

1- Strongly disagree

2 3 4 5- Strongly agree

13. Did you enjoy the flight( with Thai Airways) 0 0 2 5 3

14. Are you satisfied with the performance of your flight (with Thai Airways)

0 0 1 3 6

15. In the nearest future are you considering to travel again by Thai Airways.

0 0 1 3 6

Another interest is to identify what people prefer during a trip. To identify preferences

were specifically asked aspect such as food, seat, in board services, characteristics of

the plane, customer service in the different areas or moments of the service, attitude of

the workers, and appearance of the workers.

In this section please tick according your preferences. ( you can choose one or more options)

16. What in-flight services are preferable by you (with Thai Airways)

Food Seat comfortable Cleanliness of cabin

Entertainment Flight attendant attitude

9 2 7 5 10

17. What on-ground services are preferable by you (with Thai Airways)

Check-in service Ticket service Luggage service Waiting area ( lounge)

Other

8 7 3 6 0

18. What staff service that you are impress (with Thai Airways rather than other airlines)

Welcome of flight attendants

Assistance of flight attendants

Friendliness of service

Staff grooming & uniforms

Other

5 6 9 5 1

19. What is your primary reason to fly with Thai Airways

Air fare (value of money)

Reputation On-time schedule

Safety and reliability

Good in-flight

services

Sale promotion

1 4 8 8 9 4

It is important to detect why travellers prefer the T.A. services over the competence,

this can help to improve all the service, especially in those areas where the customers

feeling denote problems in the service towards the customers.

One important aspect to be considered is the importance to remember that the

competitive advantage cannot be taken by looking the overall company as a whole;

according to Porter, this is because each one of the activities taking place within it

could contribute to create a basis for differentiation getting points for and against.

Chapter 5

Conclusion and Recommendation

5.1 Introduction

This chapter is the final part of this dissertation. It presents the evaluation of the

finding. Additionally, it explains the linking the empirical data to the research aim and

objectives and provides some recommendations as well as suggestions for future

study.

5.2 Evaluation of the Findings

The aim of this research was to investigate to the role of satisfaction that influences

using the service of customer which as strategic market tool competitive advantage of

service business which significant to the company, all information collection are

identified the relation and influence to customer satisfaction with Thai airways. The

results of the interview and questionnaire respondents make a conclusion and can give

recommendation as it relate to the satisfaction of customer using the services of Thai

Airways. The company also needs to know is that the conclusions obtained on the

basis of information assembled during the study to improve some practical ways in

which customer service as well as the company's market strategy.

This research can be seen the evidence from data collected from the interview and

questionnaire to selected customers sample who have used with Thai Airways service

about their satisfaction to improve the service in future. The passengers have point of

view that the services’ performance of Thai Airways since before flying to

destinations that could indicate identity as Thai Airways, with humble service,

helpful, friendly and caring made familiar feeling, even the uniforms of staffs at the

touch of a real Thai to the passengers impresses on first sight and meeting customer

needs. Most respondent had great experienced with ground service such as comfort to

book a ticket, smooth check-in, service in lounge, etc. The flight also is usually on

time schedule. For on board, most of people feel the hospitality and service of crews

onboard very well, including food and beverages, only a few people who do not like

the taste of food. During the trip, staffs offer snacks and sandwiches for customers.

On the other hand, there are two main the problems that passengers suffered during

the fright is that the seats were quite comfortable and the entertainments in flight were

poor for a long trip. The customers consider that the IFE is a key factor for get a

complete satisfaction, the airline should consider upgrading the cabin to offer better

performance.

Andres I’m confusing and hesitate that is collect or not please help me do all finish. I

don’t know how to do that anymore please pleaseeeeeee

This is their awards in currently years,

1. Thai Airways won the intercontinental airlines the best six consecutive years (Best

Intercontinental Airline) award from Norwegian Grand Travel Award 2010 of the

tourism industry in Norway. As a result of the customer's impression of service and

Thai Airways International's products, including a dedicated employee to made the

satisfaction to customers and ticket agents in Norway is very

2. Thai Airways won the best airline No. 2 on the best available aircraft in the world

and the best of Business Class Award No. 4 from the website Smart Travel Asia

(SmartTravelAsia.com) in the year 2010.

3. Thai Airways has been selected as 1 in 5 of the best airlines in the world at the

annual 2010 and first-class level, Business class are the best which ranked by the

Luxury Travel Magazine's Gold List 2008 of the magazine Luxury Travel Magazine

in Australia.

4. Thai Airways was awarded the airline that offers customers ground is excellent and

award Best lounges from Business Travel Trailer Awards of Germany in the year

2009 in the "direct flight and connect the flight to South East Asia and Australia. "

5. THAI was awarded the best airline 2 awards, including the best number 1 airline

in lounges for passengers with first class (Best Airline First Class Lounge), and the

best number 1 airline in the service sector in airport area (Best Airport Services) from

Sky Trax, an NGO survey of passengers and users from around the world.

6. Thai Airways has been ranked as 1 of 10 international airlines in the world's best

from the survey of the magazine and laser Travel (Travel & Leisure) of the United

States by Thai Airways was placed eighth in the order.

5.3 Linking the Empirical Data to the Research Aim and Objectives

5.4 Recommendations

Appendix

Questionnaire

I: PROFILE QUESTIONSIn this section please tick according your perception.

1. What is your gender?

Male ______ Female ______

2. How old are you?

< 21 21 - 25 26 – 30 31 - 35 36 – 40 > 40

3. What is your main purpose of travel?

STUDY BUSINESS HOLIDAYS OTHERS

4. What is the monthly income do you have?

UP TO£500

BETWEEN £500 - £1000

BETWEEN £1000 -£1500

BETWEEN £1500 - £2000

BETWEEN £2000 - £2500

MORE THAN £2500

5. How often do you make to use of Thai Airways?

ONCE A DAY

ONCE A WEEK

ONCE A MONTH

EVERY 2 MONTHS

EVERY 6 MONTHS

OCCASIONALLY

II: USAGE QUESTIONS

In this section please tick according your perception. (5. STRONGLY AGREE 1. STRONGLY DISAGREE)

About what the Thai Airways company is evaluating?1- Strongly

disagree2 3 4 5- Strongly

agree6. Had the company asked you about your satisfaction level with the flight?7. Had the company asked you about the performance of your flight?8. Had the company request your intentions of using the company services in the future?9. Had the company asked you about your service’s preferences in-flight?10. Had Thai Airways asked you about your service’s preferences on-ground 11. Have you been enquired about the services that make you prefer Thai Airways over other company12. Have you been enquired by Thai Airways about your reasons to fly with this company?

III: ATTITUDE QUESTIONS

In this section please tick according your perception. (5. STRONGLY AGREE 1. STRONGLY DISAGREE)

1- Strongly disagree

2 3 4 5- Strongly agree

13. Did you enjoy the flight( with Thai Airways)

14. Are you satisfied with performance of your flight (with Thai Airways)

15. In the nearest future are you considering to travel again by Thai Airways.

In this section please tick according your preferences. (you can choose more options)

16. What in-flight services are preferable by you (with Thai Airways)

Food and beverages

Seat comfortable Cleanliness of cabin

Entertainment Flight attendant attitude

17. What on-ground services are preferable by you (with Thai Airways)

Check-in service Ticket service Luggage service Waiting area ( lounge)

Others

18. What staff service that you are impress (with Thai Airways rather than other airlines)

Welcome of flight attendants

Assistance of flight attendants

Friendliness of service

Staff grooming & uniforms

Others

19. What is your primary reason to fly with Thai Airways

Air fare (value of money)

Reputation On-time schedule

Safety and reliability

Good in-flight

services

Sale promotion

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Website

http://www.iclployalty.com/homePage?q=customer-loyalty

http://www.customerservicebasics.com/customer-loyalty-definition.htm

http://www.thaiairways.com/about-thai/business-units-and-affiliates/en/business-units-and-affiliates.htmhttp://www.thaiairways.com/about-thai/company-profile/en/company-profile.htmhttp://www.thaiairways.com/about-thai/public-information/en/public-information-centre.htmhttp://www.thaiairways.com/about-thai/investor-relations/en/investor-relations.htmhttp://www.thaiairways.com/about-thai/corporate-governance/th/cg_principle.htmhttp://www1.thaiairways.com/procurement/supplier/home.jsphttp://www.thaiair.com/AIP_THAISHOP/defeng.jsphttp://www.thaiair.com/thai-services/on-the-ground/en/suvarnabhumi.htm

http://www.socialresearchmethods.net/kb/qualdeb.php

customer’s comments:

http://www.airlinequality.com/Forum/thai.htm http://www.hflight.net/forum/m-1252426319/

Summary of awards this year, Thai Airways International has been in 2010.

http://www.pattayadailynews.com/th/2010/09/27/%E0%B8%81%E0%B8%B2%E0%B8%A3%E0%B8%9A%E0%B8%B4%E0%B8%99%E0%B9%84%E0%B8%97%E0%B8%A2%E0%B8%95%E0%B8%B4%E0%B8%94-1-%E0%B9%83%E0%B8%99-5-%E0%B8%AA%E0%B8%B2%E0%B8%A2%E0%B8%81%E0%B8%B2%E0%B8%A3%E0%B8%9A/

http://www.krabiunited.com/news/

1145/%E0%B8%81%E0%B8%B2%E0%B8%A3%E0%B8%9A

%E0%B8%B4%E0%B8%99%E0%B9%84%E0%B8%97%E0%B8%A2%E0%B9%84%E0%

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%E0%B8%B4%E0%B9%80%E0%B8%A8%E0%B8%A9

http://www.newwavetg.com/index.php?mo=5&qid=584312

http://th.wikipedia.org/wiki/

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http://www.thaipr.net/nc/readnews.aspx?newsid=64E555836C8696E54362413D0AAA060C

Satisfaction Ranking & analysis topics include:

 

AIRPORTSCheck-In : waiting timesCheck-In : service efficiencyCheck-In : staff attitudesBoarding system efficiencyBoarding priorityArrivals : staff assistanceArrivals : bag delivery timesStandard of Transfer service

AIRLINE WEBSITEEase of site navigationSchedules, Fares, BookingProduct & Service infoLanguage optionsSeat reservation

     

 

F/C CLASS LOUNGELocation of F/C loungesLounge comfort & spaceBusiness / internet / wifi optionsFood & Beverage choicesQuality of food/catering optionsWashroom, shower facilitiesStaff : Service efficiencyStaff : Service attitudes

ONBOARD PRODUCTSeating ComfortCleanliness of CabinCleanliness of ToiletsNewspaper serviceAirline MagazinePillow, Blankets etcStandard of IFEOnboard CateringTotal Product Consistency

     

 

CABIN STAFF SERVICELanguage skillsGrooming & AppearanceService EfficiencyCabin presence thru' flightFriendliness of staffStaff interaction with PAXStaff attitudesTotal Service Consistency

http://www.airlinequality.com/Surveys/Psngr-SVY.htm

ความพึ�งพึอใจของลู กค�า เป็�นตั�วผลู�กดั�นค�ณภาพึชี�ว�ตัที่� ดั� เม! อองค"การตัระหน�กถึ�งความสำ(าค�ญของความพึ�งพึอใจของลู กค�าก*จะพึยายามค�นหาป็,จจ�ยที่� ก(าหนดัความพึ�งพึอใจของลู กค�า สำ(าหร�บน(าเสำนอบร�การที่� เหมาะสำม เพึ! อการแข/งข�นแย/งชี�งสำ/วนแบ/งตัลูาดัของธุ�รก�จบร�การ ผ �ร �บบร�การย/อมไดั�ร�บการบร�การที่� ม�ค�ณภาพึแลูะสำามารถึตัอบสำนองความตั�องการที่� ตันคาดัหว�งไว� การดั(าเน�นงานที่� ตั�องพึ� งพึาการบร�การในหลูายๆสำถึานการณ" เพึราะการบร�การในหลูายๆดั�าน ชี/วยอ(านวยความสำะดัวก แลูะแบ/งเบาภาระการตัอบสำนองความตั�องการของบ�คคลูดั�วยตันเอง

Questionnaire development.

The questionnaire was divided into five sections, the first four sections (Sections A,

B, C, and D) asked respondents to evaluate their overall experiences they received

from their last international airline flight. The questions were phrazed in the form of

statements scored on a 5-point Likert type scale, ranking from 1 “strongly disagree” to

5 “strongly agree”. For several of the questions, based on the recommendations of

Luzar, Diagne, Gan, and Henning (1995) and Lynne, Casey, Hodges, and Rahmani

(1994) the scales have been reversed coded because the questions were posed in a

negative manner. Section E contained questions regarding respondents’

sociodemographic characteristics including age, purpose of visit (business or non-

business travellers), gender, education, occupation, education, frequency of flying,

marital status, and income. Prior to distribution of survey, a pre-test of the

questionnaire was conducted by randomly surveying 30 passengers who had sufficient

experience in international air travel.

Luzar, J.E., Diagne, A., Gan, C., and Henning, B.R. (1995) “Evaluating Nature-Based Tourism Using the New EnvironmentalParadigm”, Journal of Agriculture and Applied Economics, 27, No2, pp. 544-555.39. Lynne G.D., Casey, C.F., Hodges, A., and Rahmani, M. (1994). “Conservation Technology Adoption Decisions and theTheory of Planned Behavior”, Unpublished manuscript, Department of Food and

Resource Economics, University of Florida

http://myweb.ncku.edu.tw/~cfchen99/2006-18-18passenger%20expectations

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%20study.pdf