CHAPTER ONE

GENERAL INTRODUCTION

1.1 Background to the Study

During the past decade, the service sector in Ghana has undergone major changes mainly
through the sector structural adjustment programme as part of the economic recovery
programme. Moreover, globalisation, mergers and acquisitions, and the emergence of new
technologies have contributed dramatically to stiffer competition and pressures on profitability.
In such a competitive marketplace, attracting profitable customers is an obligation of all
managers. The shipping industry is a profit-seeking institution that must provide acceptable
returns to shareholders.

Business marketers have much to gain from retention marketing. Business customers tend to be
fewer and more valuable, meaning an organization cannot afford to lose even one customer. But
how do you keep your customers active and buying from you. Basically, customers are assets
that need to be acquired before they can be managed for profit. Unless you acquire these
important assets, survival of the organization is meaningless. That is the more reason why efforts
are jeered towards retaining the consumers of an organization

The service industry in Ghana has come under intense competition in recent years. Excellent
service is therefore required to differentiate offerings in the market place. Excellent service will

only be defined by the experience of the customer. The question now is, what is required to
attract, maintain and excite customers in the shipping industry in Ghana?
Customers are the heart of every successful business and therefore businesses need to
concentrate on customers now more than ever.

Service quality is key to any business and is one of the critical areas where a company can gain
competitive advantage.
Service quality can be used as a strategic differentiator to build a distinctive advantage which
competitors would find difficult to copy and many service sector organizations including the
shipping industry have begun to see service quality as a source of sustainable competitive
advantage. The focus on service quality would enable management to better direct their
resources to improve areas that have the most impact on customer perceptions of service quality.
A lot of researchers have devoted time to studying service quality and its relationship to critical
business outcomes. To this end, a number of studies have addressed the relationship between
service quality and customer satisfaction and it is generally believed that higher levels of service
quality lead to higher levels of customer satisfaction. The increase in the number of service
quality-customer satisfaction studies over the past few years indicates that the concept of quality
improvement has become more important year by year in the service industry and stresses the
importance of the customers views as an essential tool in the process of monitoring and
improving the quality of services.
Customers service quality perceptions are believed to influence customer satisfaction positively,
which in turn positively influences the customers decision to choose a specific service provider.
Customer satisfaction is the feeling or attitude of a customer towards a product or a service after
2

it has been used. Customer satisfaction is said to be a key influence in the formation of a
customers future purchase intentions.
On the basis of the above considerations, the researcher will seek to examine the quality of
service delivery in the shipping industry using the SERVQUAL model, determine the quality
gaps and make recommendations for improvement, given the fact that only a handful of studies
have been conducted that provide insight into the quality of service in the shipping industry.

1.2 Statement of the Problem

The shipping industry like any other service industrys goal is to provide services that satisfy the
needs of its customers. The key to satisfying these customers is to know what exactly the
customer requires, what is important to him/her and consistently delivering at a high level.

Contrary to the above scenario, the researcher found out from Maersk Ghana Limited,
Mediterranean Shipping Company (Ghana) and Delmas Shipping Ghana limited that there
continues to be complaints about the quality of service in the shipping industry. Even with the
recent huge dollar investments with the recent introduction of Maersk Lines 4500 TEU
WAFMAX vessel service, MSCs direct Europe service and Delmas new vessel sharing
agreements, there still seems to be a sense of dissatisfaction with these organizations. This
dissatisfaction may have adverse effects on the customer loyalty, retention and the profitability
of these organizations.
Shipping is much more than the transportation of goods by sea from point A to point B. Shipping
is a service which in addition to movement of goods from one location to the other involves the
interaction between the service provider and the customer. Interactions may include the customer
3

seeking freight quotations, invoices, and transit times, bills of ladings and certificates from the
shipping line.
This study therefore seeks to assess the quality of service delivered and its impact on customer
satisfaction in the selected shipping lines under study.
Company Profiles
Maersk Line is the core liner shipping business of Danish giant the A.P. Moller Maersk Group,
and the leading container shipping company in the world. The Maersk Line fleet comprises more
than 600 vessels, a number of containers corresponding to more than 4,100,000 TEU, 325 offices
in 125 countries comprising around 25,000 employees. In Ghana, Maersk Line is represented by
Maersk Ghana Limited with 3 offices situated in Tema, Takoradi and Kumasi. Maersk Ghana
Limited has the largest market share in Ghana of 22%.
Mediterranean Shipping Company S.A. (MSC) is the world's second- largest shipping line in
terms of container vessel capacity. MSC operates 451 vessels and has a capacity of
2,281,000 TEU. The Geneva-based company serves 270 ports worldwide on the six continents
with 350 local offices and employing a total of 29,000 people. In Ghana, MSC has offices
situated in Takoradi and Tema with a market share of 16%.

CMA CGM S.A. is a French container transportation and shipping company. It is the third largest
shipping company in the world with 200 shipping routes between 400 ports in 150 different
countries with its headquarters in Marseille. CMA CGM is represented in Ghana by Delmas
Shipping Ghana and has offices in Tema, Takoradi & Kumasi with a market share of 10%.

1.3 Purpose of the Study

The purpose of the study is to provide a better understanding of how satisfaction levels among
customers in the shipping industry is by measuring service quality using the SEQVUAL model,
determining the quality gaps and making recommendations for improvement of service quality.
1.4 Objectives of the Study
The study seeks to achieve the following specific objectives:
i.

Assess service quality level at the selected Shipping Lines under study using the
ServQual model

ii.

Identify the service quality strategies adopted by the selected Lines under study

iii.

Identify the problems encountered with the implementation of service quality

strategies in the selected Lines under study.

iv.

Make recommendations based on the findings of the study

1.5 Research Questions

i.

What is the level of service quality delivered at the three Lines under study

ii.

What are the service quality strategies adopted by the selected lines under study?

iii.

What are the problems encountered with the implementation of these service
quality strategies at the selected Lines under study?

iv.

What are the recommendations to be made based on the findings of the study?

1.6 Significance of the Study

The study seeks to investigate what is really important to the customer and suggest ways to
improve customer satisfaction among customers of Maersk Ghana Limited, Mediterranean
Shipping Company (Ghana) and Delmas Shipping Ghana and also help management to be in a
better position to identify the shortcomings of the services rendered to customers.

Moreover, the study is significant to the marketing professionals. To these professionals, the
findings and recommendations will be used as tool for enhancing other similar researches and
also serve as a secondary source of information.
Finally, the study gives recommendations which when adopted and implemented would help
Maersk Ghana Limited, Mediterranean Shipping Company (Ghana) and Delmas fashion out
policies and tailor made services to address the deficiencies and pitfalls in their service delivery.

1.7 Scope of the Study

The study is limited to the three biggest shipping lines within the Tema metropolis. They are
Maersk Ghana Limited, Mediterranean Shipping Company (Ghana) and Delmas Shipping
Ghana. The researcher focuses on the customers who experience services from these shipping
lines. The areas of service quality covered in the study are the SERVQUAL dimensions, namely
tangibles, reliability, responsiveness, assurance and empathy in relation to the service encounters
and expectations of clients.

1.8 Methodology
Questionnaires were administered to solicit for information from respondents mainly the
customers (shippers, consignees and freight forwarders) of these selected shipping lines. Also,
interviews were carried out to solicit information from management of these shipping lines.

Non-probabilistic sampling techniques with reference to convenient sampling were employed for
the selection of the respondents. In all, 300 respondents (shippers, consignees and freight
forwarders) of the selected shipping lines in Tema were served with questionnaires. Data
obtained was analyzed using statistical tools such as SPSS and Excel application software.
1.9 Organization of the Study

This thesis is divided into five chapters. In the first chapter, a background of the study followed
by the problem area discussion, research objectives, research questions, methodology, and
research limitations is presented. In chapter two, a presentation of literature review of the
previous studies and theories is presented in order to get a deeper insight of the subject matter.
Chapter three (3) deals with the research methodology adopted for the study. This entails the
research design, selection of subjects, sampling procedure, instrumentation, mode of data
collection, pre-testing and reliability and validity.
Chapter four (4) focuses on the data analysis and findings whilst the Chapter five (5) covers the
discussion of the findings and conclusions.
Other aspects of the research will include references, the list of related academic journals,
working paper series, past thesis and relevant books that will be consulted in the research. This
will be followed by appendices which contain attachment of the administered questionnaire.
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CHAPTER TWO

LITERATURE REVIEW
2.1 Introduction
This section of the research presented relevant literature relating to the subject matter.
Specifically it reviews the nature of the shipping industry, Service Quality concepts, Customer
Satisfaction, the service quality models and other relevant issues on the subject matter.

2.11 Overview of shipping industry

The shipping industry is inter-linked with the state of the global economy. It is complex and
notoriously volatile in nature. Shipping being highly dependent on trade flows across the globe
has seen cyclic booms and busts following the fluctuations in the worlds economy. The recent
economic turmoil has resulted in shrinking container trade as global demand for raw materials
and finished goods has also dived.
Currently, there are more than one million seafarers managing around 50,000 internationally
trading ships of various types around the globe. The basic types of ships include container ships,
bulk carriers, tankers, ferries, cruise ships and specialized ships. General cargo ships make up
about 45% of the worlds fleet in terms of deadweight tonnage (dwt), 25 % tankers, 14% bulk
carriers and 12% passenger ships. The remaining 4% includes ships of specialized nature.
The total world shipping tonnage is registered in more than 150 nations with Panama leading at
173 million tons followed by Liberia (79 million tons).
Nearly 80 shipping lines provide scheduled services to Ghanaian ports, and about 25 regularly
dock at the container terminals at Tema port. Liner shipping services are provided under
8

conference and rate agreements that relate to particular trades and cover markets including
ship scheduling and tariffs. For general cargo (containerized and break-bulk), shipping services
tend to be provided based on each separate voyage.

Shipping Lines in addition to the transportation of goods from port A to port B, offer a variety of
services. These include booking for space on the vessel, documentation of shipping instructions,
invoicing of freight and demurrage charges, issuance of bills of ladings, cargo releases and
customs manifest documentation. All these activities are services that require human interaction
between the service provider and the customer.

Company Profiles
Maersk Line is the core liner shipping business of Danish giant the A.P. Moller Maersk Group
and the leading container shipping company in the world. The Maersk Line fleet comprises more
than 600 vessels, a number of containers corresponding to more than 4,100,000 TEU, 325 offices
in 125 countries comprising of around 25,000 employees. In Ghana Maersk Line is represented
by Maersk Ghana Limited with 3 offices situated in Tema, Takoradi and Kumasi. Maersk Ghana
Limited has the largest market share in Ghana with 20%.
Mediterranean Shipping Company S.A. (MSC) is the world's second- largest shipping line in
terms of container vessel capacity. MSC operates 451 vessels and has a capacity of
2,281,000 TEU. The Geneva-based company serves 270 ports worldwide on six continents.
MSC has 350 local offices and employ a total of 29,000 people. In Ghana, MSC has offices
situated in Takoradi and Tema. MSC currently holds 16% share of the Ghanaian market.
CMA CGM S.A. is a French container transportation and shipping company. It is the third largest
shipping company in the world with 200 shipping routes between 400 ports in 150 different
9

countries with its headquarters in Marseille. CMA CGM is represented in Ghana by Delmas
Shipping Ghana and has offices in Tema, Takoradi & Kumasi. Delmas currently hold a market
share of 9% in Ghana.

2.2.1 Characteristics of a Service

Bateson (1985) outlines four unique characteristics of a service to be intangibility, heterogeneity,
inseparability and perishability. Unlike a product where tangible cues exist to enable consumers
evaluate the quality of the product, the quality of the service is ascertained by parameters that
largely come under the domain of experience and credence properties and are as such
difficult to measure and evaluate (Zeithaml and Bitner, 2003).
2.2.1.1 Intangibility
Schneider and White (2004) were of the view that in service marketing and management the first
characteristic is intangibility. Service unlike physical products cannot be seen, tasted, felt, heard
or smelt before they are consumed. Since services are not tangible; they do not have physical
features that appeal to customers senses. Their evaluation is also not possible unlike goods, it is
not possible before the actual purchase. Lovelock and Wirtz (2004) underscore that, one of the
most interesting differences between goods and services relate to tangibility. Because goods are
tangible, marketing strategies typically emphasize the tangible benefit derived from consuming a
product. On the other hand, because service is intangible marketers often try to associate them
with something tangible.

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2.2.1.2 Inseparability
Service is inseparable due to the fact that, it cannot be separated from its providers. Thus the
service provider would become part of the service. Contact with consumers is very crucial for
ensuring service quality.
2.2.1.3 Heterogeneity
Another equally important characteristic is that service is variable in character. This means
service quality depends on those providing the service as well as where, when, who, and how the
service is provided (Kim et al. 2009). The quality of an individual employees service varies
according to his or her energy and frame and mind at the time of each customer interaction.
How a firm handles problems resulting from service variability can dramatically affect customer
perceptions of service quality.

2.2.1.4 Perishability
According to Brady and Cronin (2001), perishability as a character of service can be explained
by the fact that service when provided cannot be stored for future use or sale. It is therefore
worthwhile for marketers to study these characteristics vis-a-vis the attitude of customers in
order to minimize the uncertainty associated with service provided. In this way the information
needed to avoid making mistakes in delivering quality service to customers could be reduced.

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2.2 Conceptualization of Service quality

Service quality is a central issue in services marketing and has been discussed in a number of
writings even before the well-known SERVQUAL research by Parasuraman et al. (1988).
According to Zeithaml and Bitner (1996) service quality is the delivery of excellent or superior
service relative to customer expectations.

Service quality is recognized as a multi-dimensional construct (Pollack, 2008) and researchers

have listed a variety of service quality determinants (Gronroos, 1990; Johnston, 1997). Gronroos
(1990) postulated two types of service quality: technical quality (i.e. what the customers actually
received from the service), and functional quality (i.e. the manner in which the service is
delivered).
Lehtinen and Lehtinen (1991) claimed that there are three service quality dimensions, namely,
physical quality, corporate quality and interactive quality. The last dimension recognizes that
service quality arises from the interaction between the service provider and service receiver and
is therefore necessary to supplement the customer-centered view of service quality which has
been the dominant paradigm to date (Svensson, 2006).
Building upon Rust and Olivers (1994) work, Brady and Cronin (2001) advanced the
hierarchical conceptualization of service quality. It consists of three dimensions: outcome quality
(refers to the customers assessment of the core service.), interaction quality (refers to the
customers assessment of the service delivery process), and physical environment quality (refers
to the consumers evaluation of any tangible aspect related to the service.

12

The most popular conceptualization of service quality is SERVQUAL. It features five

dimensions: tangibility, reliability, responsiveness, empathy and assurance (Parasuraman et al.,
1988). According to the model, service quality can be measured by comparing the service
expectations of customers with their perceptions of actual performance using SERVQUALS 22
questions. The physical service aspects such as appearance of employees, equipment and
facilities are classified as tangibles. Reliability refers to accurate, dependable and consistent
performance of the service. The remaining three represent aspects of interaction quality:
responsiveness means being prompt and willing to serve the customer, empathy involves caring
and personalized attention as well as understanding customer needs and convenient access to the
service. Lastly the dimension of assurance comprises the competence, courtesy and credibility of
staff which generate customer trust and confidence (Pollack, 2008).

2.3 Perceived Service Quality

Grnroos (1990) defined perceived service quality as the outcome of an evaluation process,
whereby the consumer compares his expectations with the service he has received, i.e. he puts
the perceived service against the expected service. The result of this process will be the
perceived quality of service. Perceived quality thus differs from objective quality, which
involves an objective assessment of a thing or an event on the basis of predetermined standards
that are measurable and verifiable (Zeithaml, 1988).

13

2.4 Customer service delivery

Service scholars have long acknowledged the vital role service orientation plays in the delivery
of services (O'Connor et al., 2000; Chung and Schneider, 2002). Further support for the
importance of service orientation in service delivery can also be inferred from other service
quality management scholars (Bitner et al., 1994), who emphasize the critical role of employee
attitudes and behavior in the creation of quality in service interactions.
The term service orientation is generally perceived as a nebulous term: It has commonly been
used to describe personality traits, attitudes, behaviours or a service culture which supports
quality service performance. Over the years, the literature on the subject has evolved into
diverse strands of thought such as service orientation at the individual level and service
orientation at the organizational level (Homburg et al., 2002).
Service experiences are the outcomes of interactions between organizations, related
systems/processes, service employees and customers. Considerable research in marketing and
management has examined customer satisfaction with service experiences (Keaveney, 1995;
Ostrom and Iacobucci, 1995). Predominantly, most researches have focused on the roles of
employees, service processes and tangibles in creating quality service experiences for customers.
However, in many services, customers themselves have vital roles to play in creating service
outcomes and ultimately enhancing or detracting from their own satisfaction and the value
received.

This is true whether the customer is an end consumer (for example, consumers of health care,
education, personal care, or legal services) or a business (for example, organizations purchasing
maintenance, insurance, computer consulting or training services). In all of these examples,

14

customers themselves participate at some level in creating the service and ensuring their own
satisfaction.

2.5 Empirical evidence

Vinh (2008), Kee-Kuo et al. (2009), Miremadi et al. (2011) have investigated in the area of
customer satisfaction. For instance, Miremadi et al. (2011) studied on the customer satisfaction
in port industry, with specific reference to Iranian Shipping. Increasing competition is forcing
businesses to pay much more attention to satisfying customers needs; thus trying to measure the
customer satisfaction in maritime transport industry in Iran.

Since Maritime transport is considered as one of the most important sectors in Iran. The purpose
of this study aimed at finding out the level of service quality among two most prominent
shipping companies, thus Islamic Republic of Iran Shipping Line and Maersk Line, port operator
and freight forwarders.

The purpose of this study is to measure expectation and perception of customers in the maritime
industry in Iran. The primary step is to investigate about SERVQUAL definition in maritime
industry. The study used a sample of 25 shipping companies, port operators and freight
forwarders/logistics service providers, employing and using the questionnaire obtain the score
for each of the 22 Expectation statements. Through an in-depth interview with the port manager,
15

the researcher discovered the most important factors in SERVQUAL method. Research found
out the comprehensive study and found out the five generic dimensions (tangible, responsive,
assurance, empathy, reliability) which are applicable in port industry.

The researcher discovered that there was insufficient commitment to the offering of high quality
services and that maritime transport should impose standards and missions. Furthermore,
researcher found out that ambiguity in processes leads to conflict in delivering services to the
customer and that maritime transport needed an integrated control system for eliminating these
problems and also a redefinition of their processes. Finally, the study found out that, there is a
significant gap between our customer Expectations and Manager Perceptions in the Iranian port
industry. The researcher recommended that by implementing profound marketing research about
service evaluation periodically and the professional training for staff to enhance their knowledge
these issues could be addressed.

Ultimately, Witty et al. (2004) suggested that organizations must make it easier for employees to
perform their jobs and serve customers, as this endangers customer loyalty and afford
opportunities to cross- and up-sell additional products and services. What is needed is a robust
infrastructure that incorporates automated processes and tools to guarantee that the right people
have access to the right information. This not only ensures productivity but safeguards valuable
information assets while freeing your front- and back-office employees to focus on strategic
activities that ensure customer satisfaction and higher revenues (Witty et al., 2004).

16

2.6 Service Quality, Customer Satisfaction and Customer Loyalty

Service quality is a concept that has aroused considerable interest and debate in research. There
are difficulties defining and measuring it with no overall consensus emerging on either
(Wisniewski, 2001). The concept of service quality originates from consumer behavior and
confirmation/disconfirmation paradigm (Gronroos, 1992). While Eshghi et al. (2008) define
service quality as the overall assessment of a service by the customers.
Indeed, customer satisfaction has for many years been perceived as key in determining why
customers leave or stay with an organization. Organizations need to know how to keep their
customers, even if they appear to be satisfied. Reichheld (1996) suggests that unsatisfied
customers may choose not to defect, because they do not expect to receive better service
elsewhere. Additionally, satisfied customers may look for other providers because they believe
they might receive better service elsewhere. However, keeping customers is also dependent on a
number of other factors.

Kotler and Armstrong (2012) postulate that satisfaction is the post-purchase evaluation of
products or services taking into consideration the expectations. Researchers are divided over the
antecedents of service quality and satisfaction. Whilst some believe service quality leads to
satisfaction, others think otherwise (Ting, 2004). The studies of Gilbert and Veloutsou (2006)
and Sulieman (2011) suggest service quality leads to customer satisfaction. To achieve a high
level of customer satisfaction, most researchers suggest that a high level of service quality should
be delivered by the service provider as service quality is normally considered an antecedent of
customer satisfaction. As service quality improves, the probability of customer satisfaction
increases.
17

Service quality is an important tool to measure customer satisfaction (Hazlina et al., 2011).
Empirical studies show that the quality of service offered is related to overall satisfaction of the
customer. According to Jamal and Anastasiadou (2009), reliability, tangibility and empathy
positively related with customer satisfaction. Sulieman (2011) found that reliability, tangibility,
responsiveness and assurance have significant and positive relationship with customer
satisfaction. Meanwhile empathy was found to have a significant and negative effect on customer
satisfaction.

Moreover, the result of Ravichandran et al (2010) indicates responsiveness is the only significant
dimension of service quality that affects the satisfaction of customers positively. Ioanna (2002)
further proposed that product differentiation is impossible in a competitive environment like the
shipping industry. Shipping companies everywhere are delivering the same products/services to
customers. Shipping company freight rates are fixed and driven by the marketplace. Thus,
management tends to differentiate their firm from competitors through service quality. Service
quality is an imperative element impacting customers satisfaction level
In addition, a satisfied customer is six times more likely to repurchase a product and share his
experience with five or six other people (Grnroos, 2000); further unsatisfied customer can
banish more business from the organization than ten highly satisfied customers do (Mohsan,
2011). With higher customer satisfaction the level of loyalty increases. Tee et al. (2012) found a
significant positive relationship between customer satisfaction and customer loyalty. Other
several studies have indeed found satisfaction to be a leading factor in determining loyalty (Sit et
al., 2009; Mensah, 2010; He and Song, 2009).

18

Customer loyalty is a deeply held commitment to re-buy or re-patronize a preferred product or

service consistently in the future, thereby causing repetitive purchasing of the same brand,
despite situational influences and marketing efforts. It can also be defined as the degree to which
a customer exhibits repeat purchasing behavior from a service provider, possesses a positive
attitudinal disposition toward the provider, and considers using this provider when a need for this
service arises.

Loyalty is therefore an attitude or behavior that customers explicitly vocalize or exhibit. Loyalty
has both behavioral and attitudinal dimensions (Auka, 2012). The behavioral repurchase consists
of repeated purchase of product while attitudinal loyalty refers to attitudinal commitment or
favorable attitude toward a product resulting in repeat purchasing behavior. It is a biased
purchase response resulting from an evaluative attitude favoring the purchase. Loyalty is thus
viewed as the customers demonstration of faithful adherence to an organization despite the
occasional error or indifferent services (Auka, 2012).

Dick and Basu (1994) conceptualize loyalty as the strength between repeat patronage and
relative attitude which results from comparing a particular brand with competing brands.
Customer loyalty is strong when a high relative attitude leads to repeat buying. A low relative
attitude leads to low repeat purchase which equals no loyalty. Loyalty in service businesses
refers to the customers commitment to do business with a particular organization, purchasing
their products repeatedly and recommending others to the organizations products. Anderson and
Jacobson (2000) says that customer loyalty is actually the result of an organization creating a
benefit for customer so that they will maintain or increase their purchases from the organization.

19

They indicate that true loyalty is created when the customer becomes an advocate for the
organization without incentives.

2.7 CRITICISM AGAINST THE SERVQUAL MODEL

Many criticisms have been leveled against the SERVQUAL model. One of the major
shortcomings of the model is that the five service quality dimensions are not universal and
cannot be applied in all service industries, (Ladhari, 2009). They contended that it depends on
the context in which the dimensions are applied since the definitions and the number differ. For
instance, the results of the study of Babakus & Boller (1992) on an electric and gas utility
company using SERVQUAL suggest that the dimension of this industry is one and not five. This
has been confirmed by the study of Ladhari (2009). In his case only two dimensions were found.
Buttle (1996) opines that there is but little proof that customers evaluate the quality of service on
the basis of the difference between perceptions and expectations. Alluding to this, Ladhari
(2009) intimates that researchers advance that the difference in scores do not give any additional
information beyond what already existed in the perceptions items. This has been supported by
the study of Babakus & Boller (1992). The results showed that the perceptions score was the
dominant contributor to the gap scores. Buttle (1996) further posits that the model dwells on the
process delivery but not on the outcome of the service encounter. Buttle again punched holes in
the Likert-scale. He contended that, it is defective or flawed whilst the use of the two sets of
questionnaires are tiresome and confusing. Though the model has been credited with the fact that
it furnishes information concerning the gaps between perceptions and expectations of the quality
of service, it fails to provide clues to the closure of these gaps. Kumar et al (2009) put forward
20

that, the five service quality dimensions are highly inter-correlated or related. Ladhari (2009)
accentuated that the factor-loading pattern of the model unearths some weaknesses in the
convergent validity in some studies. Thus, most of the SERVQUALs 22 items have higher
loadings on dimensions that are different from those suggested by those who developed the
model.

2.8 SUPPORTERS OF THE SERVEQUAL MODEL

In spite to the numerous criticisms, SERVQUAL has been adopted for conducting many studies.
It is therefore held in high esteem (Buttle, 1996). The model in general lays bare the strengths
and weaknesses of the quality of service provided by organizations. In this way, areas of
weaknesses can be prioritized by the organization. Another important merit of the model is that it
serves as the standard for organizations to measure the quality of service in the same industry.
Apart from this it serves as a signal to management to take into consideration the perceptions of
both management and customers. It also helps management to know customers impressions
about the service being purchased. The analysis of the quality gaps assist management
immensely to draw their strategies to meet customers expectations (Tan & Pawitra, 2001).

21

CHAPTER THREE
RESEARCH METHODOLOGY

3.1 Introduction
The purpose of this chapter is to provide clarification and justification for the research methods
used in the study. The chapter begins with the research design, strategy etc. The chapter also
explains the questionnaire, tools used to collect the data and how the sample was analyzed.

3.2 Research Design

The design of a research work details the general plan for the conduct of the research. Detailed
below are the various methods used in this research.

3.2.1 Quantitative and Qualitative Approach

The research problem as well as the information that has been collected determines the choice of
methodology that is being used. It could either be qualitative or quantitative. Creswell (2002)
states, A quantitative approach refers to the systematic empirical investigation of social
phenomena via statistical, mathematical or computational techniques.[1] The objective of
quantitative research is to develop and employ mathematical models, theories and/or hypotheses
pertaining to phenomena. It employs strategies of inquiry such as experiments and surveys, and
collects data on predetermined instruments that yield statistical data.

22

Researchers also describe qualitative data as referring to all non-numeric data or data that has not
been quantified. Qualitative data can range from a short list of responses to open-ended
questions in an online survey to more complex data such as transcripts of in-depth interviews or
entire policy documents.
Qualitative research also employs strategies of inquiry such as narratives, phenomenology,
ethnographies, grounded theory studies, or case studies (Creswell, 2002). The researcher
collects open-ended, emerging data with the primary intent of developing themes from the data
(Creswell, 2002).

Yin (2003) states that "the main reason for using different approaches by researchers is the type
and the purpose of the research which has been chosen, and under what category, it is
quantitative or qualitative". Occasionally researchers use these two approaches simultaneously.

Following from the research purpose and research questions, this research was conducted under
both quantitative and qualitative approaches. Case study and survey were used in this research
because it was suitable for the research aims, which helped the researcher to providing a general
understanding of the research purpose.

The adoption of both qualitative and quantitative approaches by the researcher is justifiable since
the researcher collects data from different groups of respondents using different data collection
and analysis methods. For instance on the customers who were surveyed, data was collected
quantitatively following a predetermined set of measurement scales (based on an already
developed ServQual model).
23

Also on the part of the respondents from Management of the sampled shipping lines, qualitative
data collection methods were used. This afforded the researcher the opportunity to understand
the strategies used and the challenges encountered their quest to offer quality service to their
customers. Thus open ended questionnaires and in-depth interview were used for this purpose.

3.2.2 Descriptive research as the Research Purpose

The research purpose is a broad statement of what the research hopes to achieve. With respect to
purpose, research could be broadly divided into exploratory, descriptive and explanatory
(Saunders et al 2000, 2007).
The researcher sought to describe or portray a reality regarding customers satisfaction with
service quality delivery at the sampled Lines and to better understand those service quality
dimensions that customers are satisfied or dissatisfied with, so it was descriptive.

3.2.3 Research Strategy

Research strategy is a general plan of how to answer the research questions. It is mainly guided
by the research questions and research objectives, among other things. It determines to a large
extent the choice of data collection methods. The main research strategies are action research,
ethnographic studies, experiment, survey, case study, grounded theory or archival research
(Saunders et a12000, 2007; Malhotra and Birks' 2007). However this research adopted only case
study and survey as the strategies for the study. These strategies can be combined in a single
24

study for a particular purpose (Saunders et al 2007). In this study the researcher adopted case
study and survey strategies because it sought the opinion of a population about a specific subject
matter and it combined the use of qualitative and quantitative techniques.
Brief descriptions of the chosen strategies are presented below:

Survey: A survey is a type of method associated with deductive approach and is

conducted usually in business and management research to collect data that seek a
characteristic or the opinion of a target population. It allows for the collection of large
amount of data from a large population economically. It is most frequently conducted to
answer research questions relating to 'who, what, how much and how many' involved in a
problem of study. It often uses structured questionnaire and interviews.

Case study: A case study is "a strategy for doing research which involves an empirical
investigation of a particular contemporary phenomenon within its real life context using
multiple sources of evidence" (Saunders et al 2007). It is mostly used where the purpose
is to gain a rich and an in-depth understanding of the context of the research and the
processes being enacted (Saunders et al 2007). It therefore uses multiple data collection
sources, termed triangulation. Mostly it is related explanatory and exploratory research
that seeks to find out 'why', 'what' and 'how' issues in the case context. (Yin 2003 in
Saunders et al) maintains that case studies can be single or multiple, holistic or
embedded.

25

3.3 Sources and Type of Data

Data refer to factual records, which may take the form of numbers, symbols, text, images or
sounds, used as primary sources for research, and that are commonly accepted in the research
community as necessary to validate research findings (Yin, 2003).

3.3.1 Source of Data

Data for research may come from several sources including: documents, archival records,
interviews, direct observation and participant-observation (Saunders, 2007). It should be noted
that no single source has an advantage over all the others. In fact, all the sources are highly
complementary, and a good case will therefore incorporate as many sources as possible
(Saunders et al 2007).

This study combined questionnaire administration and in-depth interviews as the instruments for
data collection.

3.3.2 Type of Data

In today's world correct information is the key to success. Data or information is of two types;
primary data and secondary data.

Primary data: are data from original source. That is first-hand information collected
from the field that has not been used before. They are usually collected through the use of
questionnaires, interviews, observation, etc,

26

Secondary data: are also known as 'second hand' data. They are data which already exist
and might have been used before for some purpose other than the current use. They may
be from books, thesis, reports, journals, magazines, newspapers, bulletins etc.

In this study only primary data were used and were collected through in-depth interviews and
questionnaire administration.

3.4 Population and Sample Size

A population refers to the complete set of cases or elements from which a sample is taken
(Saunders et. al., 2007). The population for this study consisted of all customers who used the
services of the selected shipping lines in the Tema metropolis during the period of the study as
well as the various managers of these lines.

3.4.1 Sample Size for the Study

According to Saunders et al., (2007) conducting a census (that is using the entire population for a
study) is most often than not impractical and costly when the research is dealing with a large
population for which he or she lacks absolute control of the entities in the population and in
particular when the population is defined as infinite. Thus it is often the case that the researcher
takes a part of the population and study. That is the researcher takes a sample out of the entire
population as a representative of the whole population and used the results for analysis.
In this study, a sample size of 300 was used for the study. This was drawn from the three
selected shipping lines.

27

3.5 Sampling Techniques.

Sampling is a survey-based research where researcher needs to analyze the sample about a
population to answer the research questions or meet the research objectives. Sampling is
important if budget and time constraints prevent research from surveying the entire population.
Sample gives higher accuracy and fast result.
Sampling techniques can be classified into two types (Saunders, et al, 2007):
Probability Sampling
Non-Probability Sampling

Probability Sampling
In probability sampling, the sample is selected in such a way that each unit within the population
has a known chance of being selected. The advantage of probability sampling is that sampling
error can be calculated. Sampling error is the degree to which a sample might differ from the
population Probability method includes.
Random sampling
Systematic sampling
Stratified sampling

Non-Probability Sampling
In non-probability sampling, the sample is selected in such a way that the chance of each unit
within the population being selected is unknown. Indeed, the selection of the subjects is random
or subjective, since the researcher relies on his/her experience and judgment. As a result, there are
no statistical techniques that allow for the measurement of sampling error, and the degree to
28

which the sample differs from the population remains unknown and therefore it is not appropriate
to project the sample characteristics to the population. Non-probability includes:
Convenience sampling

Judgment sampling

Quota sampling

Snowball sampling.
However only those used in this study (convenience and judgmental sampling) are presented in
the following subsections.

3.6.2a Convenience sampling

Convenience sampling is used when the researcher is interested in getting an inexpensive
approximation of the truth. As the name implies, the sample is selected because they are
convenient. This non-probability method is often used during preliminary research efforts to get a
gross estimate of the results, without incurring the cost or time required to select a random sample
(Saunders, et al, 2007).

3.6.2b Judgment sampling

Judgment sampling is a common non-probability method. The researcher selects the sample based
on judgment. This is usually an extension of convenience sampling. For example, a researcher
may decide to draw the entire sample from one "representative" city, even though the population
includes more than one city. When using this method, the researcher must be confident that the
chosen sample is truly representative of the entire population (Saunders, et al, 2007).

29

3.7 Data Collection tools and Procedures

Questionnaires are intensively used in the service industry and considered as the major tool for
measuring customer satisfaction. The questionnaire was prepared as a primary instrument of data
collection on customers and divided into the following two main sections: section A and section
B.
Section (A) consisted of items which presented general information about the customer and
consists of: customers role, customers chosen shipping line and how often customer frequents
the line

Section (B) includes 5 parts of 22 items. Part 1 consisted of 4 items 1-4 designed to assess
customer's expectations and perceptions of service delivered at shipping lines in relation to the
Tangibility dimension of service quality.
Part 2 of the section B consisted of 5 items designed to assess customers expectations and
perceptions of service delivery in the selected shipping lines in relation to the Reliability
dimension of the ServQual model adopted in this study. The third part of the section B also
consisted of 4 items corresponding to the Responsiveness dimension of the ServQual instrument
used. The fourth part was made up of 4 items representing assurance dimension of ServQual and
the final part of section B included 5 items in relation to the Empathy dimension of the ServQual
instrument. Thus each part was carefully designed to have the basic five dimensions. The 22
items follow the basic five dimensions of the SERVQUAL instrument developed by
Parasuraman et al (1988). The measurement scale used was 1-5 points Likert scale, ranging from
strongly disagree (1) to strongly agree (5). Usually in the studies of satisfaction this scale is
30

widely used and is considered valid to show the overall assessment of the organization by the
respondent (Yin, 2003). The average score for each dimension as well as the score gaps were
determined.
A total of 300 questionnaires were distributed at the three Lines and administered to customers.
The questionnaires were administered only at the customer service halls of the selected case
study shipping lines. Line management of the selected shipping lines were also interviewed.

3.8 Pilot Testing of the Survey Questionnaire

Ten customers were used as a sample for the pilot test. They were all customers from the Maersk
Ghana Limited. This was done to ensure that there is no discrepancy in the survey. It also served
to ensure that everything in the survey would be understood and was clear as well as establishing
the effectiveness of the questions. The purpose of the study was explained to the chosen
customers to ensure the survey was clear in its intent. The customers were assured of their
anonymity as well as the fact that the information gathered in the survey would be discreet.

3.9 Data Analysis

The data analysis will be conducted using SPSS v. 19, the Software Package for Social Sciences,
where the findings, will be explained by means of different statistical analyses and presented in
various graphical and tabular forms in Chapter 4 to support the analysis and interpretation.

31

CHAPTER FOUR
PRESENTATION OF RESULTS ANALYSIS AND DISCUSSION

4.1 Introduction

In this chapter, the researcher presents and analyses the results obtained from the study. Data was
collected from the customers in the shipping industry, specifically Maersk Ghana Limited,
Mediterranean Shipping Company (Ghana) and Delmas Shipping Ghana limited located in
Tema.
In order to know the categorization of the respondents, respondents were grouped to indicate
their areas of specialty.
The detailed results are presented in table 4.1 below.

Table 4.1 Role of respondents

Responses
Forwarder
Shipper
Consignee
Total

Frequency
100
72
58
230

Percent
43.5
31.3
25.2
100.0

Source: Field data, July, 2013.

From table 4.1 most of the respondents were confirmed to be forwarders.above. 100 (43.5%) of
them were forwarders, 72 (31.3%) shippers and the remaining 58 (25.2%) were consignees..
The figure below illustrates the results in the table 4.1.

32

Categorization of Respondents
100
80
60

Frequency

40

Percent

20
0
Forwarder

Shipper

Consignee

Fig. 4.1: Categorization of respondents

The number of response from customers per shipping Line was also investigated by the
researcher. The results are presented in table 4.2 below.

Table 4.2. Shipping Line of Respondent

Responses

Frequency

Percent

CMA CGM

68

29.6%

Mediterranean Shipping Company

Maersk Ghana Limited
Total

72
90
230

31.3%
39.1%
100.0%

Source: Field data, July, 2013.

The shipping line with the highest number of respondents was Maersk Ghana Limited. This
accounted for 90 (39.1%) of the total respondents in the survey. This was followed by
respondents in the Mediterranean shipping company which accounted for 72 (31.3%) of
respondents and then Delmas Shipping with 68 (29.6%) respondents.

33

Below is the graphical illustration (Fig. 4.2).

Customer breakdown per Shipping Line

CMA CGM
30%

Maersk Ghana
Limited
39%

Mediterranean
Shipping
Company
31%

Fig. 4.2: Respondents per Shipping Line

In order better understand whether respondents had an in depth experience in services offered by
the Lines under study, the researcher also investigated the frequency of visits by respondents to
three sampled Lines.
Table 4.3: First time of visit to the line

Responses
Visiting for First Time (Yes)
Visiting for First Time (No)

Total

Frequency
28

Percent
12.17

202
230

87.83
100.0

Source: Field data, July, 2013.

It could be observed from table 4.3 above, that most of the respondents had been at the line more
than once and that it was not their first time visiting. 202 (87.83%) of the respondents indicated
that it was not their first time of being at the line while the remaining 28 (12.17%) indicated that
it was their first time at the line
34

Adding to this, the researcher also sought to break down the regularity of visits by the
respondents. The results are presented in table 4.4 below.

Table 4.4: Frequency of visit to the shipping lines

Responses

Frequency
104
95
31
230

Weekly
Monthly
Once a year
Total

Percent
45.2
41.2
16.6
100.0

Source: Field data, July, 2013.

As to the regularity of visits to the shipping line by the respondents, 104 (45.2%) indicated that
they visit weekly, whiles 95 (41.2%) of the respondents indicated that they visit the shipping line
monthly. Also 31 (16.6 %) of the respondents said they visited the shipping line once in a year.
The figure below illustrates the results in Table 4.4

Regularity of visit to the shipping lines

Frequency

Percent

104
88
45.2

38.2

38
16.6

Weekly

Monthly

Once a year

Fig. 4.3: Regularity of visit to the shipping lines

35

4.2 Reliability analysis

The reliability result produced by SPSS 19.0 indicated that the questionnaire had a total
reliability coefficient (Cronbachs alpha) of 0.752. Again, Cronbachs alpha value was above 0.7
for all the service quality dimensions. Guieford (1965) observes that a Cronbachs alpha in the
range of 0.55 - 0.7 is acceptable, Cronbachs above 0.70 indicates high reliability, and
modification of the research tool is required if the coefficient is below 0.54. It can be seen that
the reliability coefficients of the questionnaire are within the acceptable range. Overall, the
questionnaire results feature a certain degree of consistency and stability and will produce
meaningful findings in subsequent analyses.

4.3 Analysis of Service Quality Factors

Parasuraman et al, (1988) five service quality indicators were adopted for this study. The
dimensions are tangibility, reliability, responsiveness, assurance and empathy. This research
sought to determine the perceptions and expectations of the customers on the quality of the
services provided by the various shipping companies in this study.

The Service Quality was determined by subtracting the respondents expectations (E)
(importance attached to each of the service quality attribute assigned to the various indicators
prior to usage) from their perception of the actual performance (P) of the various attributes based
on their experience with the shipping companies. Thus, the quality gap according to Parasuraman
et al (1988) is the difference between perception (P) and expectation (E). (Q= P-E). A positive
SQ value indicates good service quality and thus leads to customers satisfaction. A negative SQ
36

value indicates poor service quality and that leads to customers dissatisfaction. The results from
the field survey on the sampled shipping companies are presented in the subsequent tables
below.
4.3.1 TANGIBILITY
Tangibility deals with the appearance of physical facilities, equipment, appearance of personnel,
and communication materials. Descriptive statistics were taken based on the expectations and the
perceptions of the customers of the sampled shipping companies. The responses were measured
on a five point Likert scale ranging from strongly Agree coded (5) to strongly disagree (1)

Table 4.5: Descriptive Statistics (Tangibility)

TANGIBILITY
T1 - Excellent shipping lines should
have modern looking facilities that
are visually appealing (vessels,
containers, buildings, computers e.t.c)
T2 - Excellent shipping lines should
be conveniently located for easy
access
T3 - Employees at excellent shipping
lines should be neat and professional
in appearance
T4 -Excellent shipping lines should
have good ambient conditions
OVERALL MEAN

Mean (E)

Mean (P)

Gap

230

3.4756

4.5374

1.0618

230

3.6435

3.8565

0.213

230

3.5261

3.8000

0.2739

230

4.3043

3.7174

-0.5869

3.7373

3.9778

0.2405

Source: Field data, July, 2013

37

The results presented in table 4.5 shows the respondents in the survey perceived the tangibility
dimension of service quality to be of good quality. Customers of the selected shipping lines
indicated a performance rating of 3.977 and expectation rating 3.737 for tangibility. Overall, the
results show a service quality rate of 0.240. The positive value is an indication of the level of
satisfaction among respondents concerning the physical aspect of the shipping companies in the
survey. On the individual attributes, the study reveals a positive rating for Service quality with
every single attribute of tangibility except the attribute of good conditions which include
temperature, ventilation, noise, lighting and ambience which had a negative value (-0.5869).
The results also revealed that the attribute shipping lines should have modern looking facilities
that are appealing had the highest value of 1.0618 indicating that respondents were satisfied
with the state of facililities.

4.3.2 RELIABILITY
Reliability concerns the ability with which the service provider can deliver the service
dependably and accurately. The results from the survey on the reliability dimension also
measured on the same five point Likert scale are summarized in the table below.

38

Table 4.6 Descriptive Statistics (Reliability)

RELIABILITY
R1 - When excellent shipping lines promise to
do something by a certain time, they do. (e.g.
vessel arrival, issue b/ls and invoices)
R2 - Excellent shipping lines should show
sincere interest in solving customer related
problems
R3 Excellent shipping companies should
perform services right the first time
R4 Excellent shipping companies should
provide services at the time they promise
R5 -Employees of excellent shipping
companies should be trustworthy in handling
respondents problems
OVERALL MEAN

Mean(E)

Mean(P)

Gap

230

4.8491

2.6174

-2.2317

230

4.7348

3.3565

-1.3783

230

4.6739

2.9391

-1.7348

230

4.7686

2.9957

230

4.6652

3.1783

-1.4869

4.7383

3.0174

-1.7209

-1.7729

Source: Field data, July, 2013

From Table 4.6 above, poor service quality was evident with respect to the reliability dimension
of service quality. The overall service quality was rated (-1.7209) by the customers. This clearly
indicates that reliability services are currently below the expectations of customers in the
sampled shipping lines.
Moreover, all the attributes of reliability had negative values for service quality. The attribute
Excellent shipping companies should provide services at the time promised had the largest
negative value (-2.2317) whilst Excellent shipping lines should show sincere interest in solving
customer related problems had the least negative value (-1.74).

39

4.3.3 RESPONSIVENESS
Responsiveness is the willingness to help customers and provide prompt service, making
information available to customers and not appearing too busy to respond to requests. Results
from the survey on responsiveness in presented in the table below

Table 4.7 Descriptive Statistics (Responsiveness)

RESPONSIVENESS
Res1 -Excellent shipping companies employees
should tell customers exactly when services will
be performed
Res2 Excellent shipping companies should give
prompt service to customers
Res3 Employees of excellent shipping companies
should always be willing to help customers
Res4 Excellent shipping companies employees
should never be too busy to respond to customers
requests

Gap

Mean(E)

Mean(P)

230

4.7043

2.8478

-1.8565

230

4.5726

3.8261

-0.7465

230

4.6130

2.9348

-1.6782

230

4.4826

3.9130

-0.5696

4.5931

3.3804

-1.2127

OVERALL MEAN
Source: Field data, July, 2013

The overall expectation/importance rating for the responsiveness dimension is 4.59 and the
performance/experience rating is 3.38. The attribute Employees at excellent shipping
companies should never be too busy to respond to customers request had the least negative
service quality value (-0.569). In addition the attribute Employees at excellent shipping
companies should tell customers exactly when services will be performed had the highest
negative service quality value (-1.857).

40

4.3.4 ASSURANCE
Assurance dimension refers to the knowledge and courtesy of employees and their ability to
inspire trust and confidence. The results from the survey on this dimension of service quality are
shown in the table below
Table 4.8 Descriptive Statistics (Assurance)

ASSURANCE
N
ASS1 - Excellent shipping companies should instill
confidence in their customers
ASS2 - Customers of excellent shipping lines should
feel safe in their transactions
ASS3 - Excellent shipping companies should be
consistently courteous with customers
ASS4 Excellent shipping companies should have the
knowledge to solve customers problems

Mean (E)

Mean (P)

Gap

230

4.8748

3.2013

-1.6735

230

4.5652

3.9917

-0.5735

230

4.9043

3.7826

-1.1217

230

4.7813

3.9001

-0.8812

4.7814

3.7189

OVERALL MEAN

-1.0625

Source: Field data, July, 2013

The descriptive statistics on the assurance dimension shows that, the expectation of the
customers as well as their perceptions both recorded relatively high means. The table above
indicates an overall importance rating of 4.78 and a performance rating of 3.71. The overall
service quality for the assurance dimension is (-1.0625) indicating that the customers see the
services provided by the sampled Lines in terms of assurance still as poor.
The attribute of assurance Customers of excellent shipping lines should feel safe in their
transactions had the least negative value (-0.5735) for service quality whiles the attribute
Excellent shipping companies should instill confidence in their customers had the highest
negative value (-1.67) indicating that the ability of the sampled lines to instill confidence in their
customers is the poorest in terms of the assurance dimension of service quality
41

4.3.5 EMPATHY
Empathy dimension deals with the caring and the individualized attention the firm provides to its
customers. Empathy also includes approachability, and the effort to understand the customers
needs. Therefore, customers expect to be personally cared for, for staff to understand their wants
and needs, and to be put at the heart of the Line staff.
Presented in the table 4.9 below are the results from the survey on empathy.

Table 4.9 Descriptive Statistics (Empathy)

EMPATHY
EMP1 - Staff at excellent shipping companies should
give customers individual attention
EMP2 - Excellent shipping companies should have
convenient operating hours
EMP3 - Staff at excellent shipping companies should
understand specific needs of customers
EMP4 -Staff at excellent shipping companies should
never be too busy to respond to respondents
request.
EMP5 -Staff at excellent shipping companies should
have the best interest of customer at heart.

Gap

Mean (E)

Mean (P)

230

4.9174

2.8304

-2.087

230

4.8852

2.9870

-1.8982

230

4.8791

2.5643

-2.3148

230

4.7891

2.2926

-2.4965

230

4.9130

2.5133

-2.3997

4.8767

OVERALL MEAN

2.6375

-2.2392

Source: Field data, July, 2013

For empathy dimension, five attributes were used. The results presented in table 4.9 shows that
the respondents perceive services related to the empathy dimension of service quality to be of
poor quality. Respondents surveyed indicate a perception rating of 2.63 and importance rating
4.87 for empathy. Overall, the results show a service quality rating of (-2.34). This is indicative

42

of the poor services provided by the sampled Lines in the Tema metropolis as far as the empathy
dimension of service quality is concerned.

4.4.1 Service Quality Strategies adopted by The Lines

Another objective of this study was to identify the service quality strategies adopted by the
sampled Lines in the Tema metropolis. To a achieve this, an interview guide was prepared and
interviews were conducted by the researcher with the Line managers of the sampled
organizations. In all, 9 respondents were used, thus 3 managers from each of the three Lines
were interviewed. The average duration of service in a Leadership role for the respondents was
12 years. Also, when asked what respondents considered as good quality service in their own
words, they explained that service is said to be of good quality when it meets the customers
needs and can be performed within budget. Another response also was that service is said to be
of good quality if it easy for the customer and efficient for us

There were a variety of responses with regards to service quality strategies which have been
summarized as follows
Training and Competency Building
In order to build competency and improve customer relations the sampled lines organize periodic
training for all staff. The continuous training of both existing and new staff in best practices in
customer service serves as a way in which employees relationship with customers can be
continuously improved. Monthly coaching and mentoring sessions by supervisors and managers
43

is also a way in which the shipping lines help to build up the competency of the staff in their
various job roles.

Quality Circle Drive

All three organizations in a bid to introduce continuous improvement culture in their companies
have introduced the quality circle concept. A quality circle is a volunteer group composed of
workers, usually under the leadership of their supervisor or an elected team leader, who are
trained to identify, analyze and solve work-related problems and present their solutions to
management in order to improve the performance of the organization, and motivate and enrich
the work of employees.
Network Optimization
In order to further improve transit time and get cargo to destination at the shortest time possible
Maersk Line has phased out its older PANAMAX vessels calling the port of Tema and
introduced the newer, bigger, faster and eco-friendly WAFMAX vessels. The strategic goal of
WAFMAX is to increase reliability through faster steaming and at the same time reduce cost
through its increased vessel capacity. Increased vessel capacity means that one WAFMAX vessel
can load cargo which would have previously required two PANMAX vessels to load. Increased
capacity translates directly to fewer port calls per vessel.
Delmas and MSC have also recently introduced direct service calls to and from North America
which means transit times for this particularly busy trade lane has been reduced from the
industry average of 31 days to just 14 days.

44

Terminal Partnering Program

Another strategy to improve service was to reduce the time it took for customers to receive their
goods at destination and increase container turnaround time. In order to achieve this, The Tema
Terminal Partnering Program was introduced. This is a program involving The Ghana Port
Authority, Meridian Port Services and the shipping Lines. Key achievements from this program
include the procurement of two additional Ship to Shore Cranes to increase berth productivity
and the introduction of the Fixed Berthing Window scheme to increase reliability and
predictability of vessel berthing at the Tema port

Ease of Doing Business / Ecommerce Drive.

In response to customer complaints about limited parking space, small customer service halls
with insufficient seating, Maersk Ghana Limited has relocated to the 4th and 6th Floors of the
plush 10 storey GPHA towers. This modern high rise building in close proximity to the Tema
port is equipped with a 150 capacity car park and spacious customer service hall with seating
capacity for 250.
To make tracking of cargo, invoicing, bookings and documentation easier and efficient for
customers, the sampled Lines have all introduced Ecommerce solutions which offer the customer
24hr availability to his invoices, bookings, shipping instructions and cargo location in real-time.
With just a click of a button, customers can access vital information in a matter of seconds at
their own convenience. This Do it yourself tool allows customers to print invoices, bills of
ladings and arrival notices in the comfort of their offices hence helping to reduce traffic flow at
the counters.

45

4.4.2 Challenges encountered in implementing the service quality strategies outlined

Another objective of this study was to identify some of the challenges in implementing the
service quality strategies
Lack of Senior Management commitment to quality and continuous improvement Initiatives
Unlike other service sectors, the whole concept of service quality and continuous improvement
has just recently caught on in the shipping industry. Senior management still treat quality
management as an afterthought and do not expend much resources and time on this. Initiatives of
the quality circle teams are not given much priority at management meetings. Most of the limited
resources at these Lines are geared towards commercial and operational activities. With that
being said, there is also limited budget allocated to quality management and process
improvement projects.

High Customer to Counter staff ratio

The interviewees pointed out that due to recent cost-cutting initiatives, their organizations have
experienced a drastic cut in staff numbers as a means to reducing administrative costs. This has
left their organizations stretched especially at the customer service departments. What this
means is that fewer counter staff are now serving more and more customers than before. For
example, last year saw Maersk Ghana undergo a restructuring program in the customer service
department. This lead to the reduction in the number of counter staff from 14 to 8. This makes
staff interaction with customers impersonal and mechanical.

46

High turnover of counter staff

It was also noted that customer service and in particular counter staff had the highest turnover
ratio in the sampled organizations. The average service duration of staff was less than two years.
Staff are usually recruited on contract basis. The frequent turnover of staff serves as a deterrent
to customer relationship building and continuous process improvement.

47

CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

This chapter concludes the study. It begins with a brief summary of the study which is followed
by the major findings and conclusions. The recommendations of the study are finally presented.
5.1 Introduction
In this study, the five service quality indicator model as proposed by Parasuraman et al (1988)
was employed to assess service quality delivered at the three shipping lines within the Tema
metropolis under study.
A total sample size of 300 respondents comprising of shippers, consignees and forwarders
visiting the customer service halls of the three Lines was and 9 Line managers interviewed.
However 230 active responses were obtained and this represented an active response rate of
76.67%. Response rate from Line managers was 100%.
The major findings are summarized in the sections below followed by the conclusion and
recommendations of the study.

48

5.2 Summary of Research Findings

The summary of the finding is done in line with the research objectives of this study.
5.2.1 Nature of respondents
A majority of the respondents (83.4%) had multiple visits to the Lines under study and were in a
better position to provide better responses to the quality of the services provided by these
companies as they had experienced service offerings from them on quite a number of occasions.

5.2.2 Measuring service quality at the sampled Lines using ServQual.

The study revealed that service quality is poor based on all the dimensions used in this study
with the exception of the Tangibility dimension which had a positive overall mean service
quality score. The empathy dimension had the highest expectation rating of 4.87 which means it
was the most important service quality dimension to the customers of the sampled Lines.
Interestingly, the service quality dimension of least importance to the customers was the
tangibility dimension with an overall mean of 3.73. Thus the customers did not care as much
about the physical aspects of the organizations facilities as they did for the care and individual
attention given to them.
Overall service quality on the various dimensions reveals that it was only the tangibility
dimension that customers were satisfied with even though this dimension happens to be the
dimension of least importance to the customers.

49

Thus, based on the ServQual model, reliability, responsiveness, assurance and empathy were
perceived to be of poor quality by the respondents.
5.2.3 Service Quality Strategies Adopted by the Shipping Lines understudied.
The findings indicate that the Lines rely heavily on strategies with Operational efficiency and
Cost leadership themes to help improve service quality. Also competency and professionalism of
staff as a strategy for ensuring service quality delivery was also observed.

5.2.4 Problems Encountered by the Shipping Lines in Implementing the Service

Quality Strategies Outlined
Lack of commitment from senior management to the quality and continuous improvement
concept was a major problem encountered in the rolling out and implementation of quality
strategies. As a result limited funding and resources are allocated for such purposes.
Also as a result of restructuring and high turnover ratio of counter staff, companies have become
stretched in terms of staff strength leading to a high customer to counter staff ratio. The lack of
continuity and high customer to staff ratio makes it extremely difficult to continuously
improve what they do on a daily basis and build valued relationships with clients

50

5.3 Conclusion.
Shipping Lines need to explore the service expectations and perceptions of customers now more
than ever in order to stay competitive in the industrys increasingly competitive environment.
Knowing accurately what customers prefer, organizations are able to give customers exactly
what they want by customizing services to delight them and to create a core competence from
this.
Given the financial and resource constraints under which service organizations like the shipping
industry operate in, it is essential that customer expectations and perception are properly
understood and measured and that any gaps in service quality are identified. This information
can then help management in identifying cost-effective ways of closing service quality gaps and
also prioritizing which gaps to focus on, a critical decision given scarce resources.

51

5.4 Recommendations
The following recommendations are made based on the findings of this research.

In order to better understand customers expectations and their perceptions, the researcher
recommends that the ServQual model be adopted as a medium for measuring service
quality in the Lines under study going forward

Line Management are encouraged to develop appropriate service quality strategies in line
with the model described and particular attention be paid to the reliability,
responsiveness, assurance and empathy dimensions of service quality.

Training of staff with special focus on enhancing communication skills and relationship
building is recommended by the researcher.

Shipping has become a standardized product with almost all the companies offering
similar products. In order for companies to differentiate themselves from one another it
is recommended that top priority be given to quality management initiatives and
shipping companies embrace the continuous improvement mindset and culture. This
should not be the job of just a few e.g. the quality circle, but an organization-wide thing
from top to bottom.

Job enrichment as a means to staff retention at the counter is recommended. Job roles
that focus on less repetitive transactional tasks and more on client handling and customer
relations are recommended. This can be achieved through outsourcing these
transactional tasks to Global service Centers as is currently being done in the banking
sector.

52

5.5 Limitations of the study and future research

The respondent coverage in this study consists of only 230 customers of three shipping
lines. This was limited by funding and the time. The generalizations to a wider
population should be taken with caution.

Further studies should be carried on customers of Ghanas second port in Takoradi and other key
players in the shipping industry to extend the extent of knowledge in this subject area.

53

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Brooks, M.R. (1985), an alternative theoretical approach to the evaluation of liner shipping. Part
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Pearson, R. (1980), Container line performance and service quality, Marine Transport Centre,
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Dahlgaard, J.J., Kristensen, K., and Kanji, G.K. (1994). The Quality Journey: A Journey Without
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Emory, C.W. and Copper, D.R. (1991). Business Research Methods. Irwin, Boston, MA.

Kaynak, H. (2003). The relationship between total quality management practices and their effects
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Badri, M. A., Abdulla, M. & Al-Madani, A. (2008). Service quality assessment and application of
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Brady, M.K., and Cronin, J.J. Jr. (2001). Some new thoughts on conceptualizing perceived
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Buttle, F. (1996). SERVQUAL; review, critique, research agenda, European Journal of

Marketing, Vol. 30, Number 1, p.8-32.

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Lehtinen, U., and Lehtinen, J. (1991). Two approaches to service quality dimensions. The Service
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Malhotra, N.K., Ulgado, F.M., Agarwal, J., Shainesh, G., and Wu, L. (2005). Dimensions of
service quality in developed and developing countries: multi-country cross-cultural comparisons.
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Parasuraman A., Berry, L., & Zeithaml V. (1988). SERVQUAL: A Multiple Item Scale for
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Parasuraman A., Berry, L., & Zeithaml V. (1994). Delivery Quality Service : Balancing Customer
Perception and Expectation. New York. The Free Press.

Parasuraman, A. (2000). Superior customer service and marketing excellence: two sides of the
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Rust, R.T. & Oliver, R.L. (1994). Service quality: insights and managerial implications from the
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Schewe, C.D. and Hiam, A.W. (1998), The Portable MBA in Marketing, New York, John Wiley
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Service Excellence Development, Managing Service Quality, 11(6), Pp 418-30

Woodside, A.G., Lisa, L.F., & Daly, R.T. (1989). Linking Service Quality, Customer Satisfaction
and Behavioral Intention. Journal of Health Care Marketing 9 no.4, pp. 5-17.

Yin, R. (2003) Case Study Research: Design and Methods, SAGE Publications, Newbury

Zeithaml, V. A. (1988). Consumer perceptions of price, quality, and value: A meansend model
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Vinh V. Thai, Service quality in maritime transport www.emeraldinsight.com/1355-5855.htm.

56

APPENDIX 1
RELIABILITY TESTS
Case Processing Summary
N
Cases

Valid
Excluded
Total

%
230

100.0

.0

230

100.0

a. Listwise deletion based on all variables in the

procedure.

Tangibility Statistics
Cronbach's
Alpha

N of Items
.7451

Case Processing Summary

N
Cases

Valid
Excluded
Total

%
230

100.0

.0

230

100.0

a. Listwise deletion based on all variables in the

procedure.

Reliability Statistics
Cronbach's
Alpha

N of Items
.7551

57

Case Processing Summary

N
Cases

Valid
Excluded
Total

%
230

100.0

.0

230

100.0

a. Listwise deletion based on all variables in the

procedure.

Responsiveness Statistics
Cronbach's
Alpha

N of Items
.8410

Case Processing Summary

N
Cases

Valid
Excluded
Total

%
230

100.0

.0

230

100.0

a. Listwise deletion based on all variables in the

procedure.

Assurance Statistics
Cronbach's
Alpha

N of Items
.700

58

case Processing Summary

N
Cases

Valid
Excluded
Total

%
230

100.0

.0

230

100.0

Empathy Statistics
Cronbach's
Alpha

N of Items
.856

59

APPENDIX 2:
SAMPLE QUESTIONNAIRE.
QUESTIONNAIRE FOR THE RESPONDENT

This questionnaire seeks to assess service quality in the shipping industry. Your answers would
be used for purely academic purposes and your anonymity is guaranteed.

Section (1): GENERAL CHARACTERISTICS OF RESPONDENTS

Kindly tick the most appropriate answer.

1. Role: Shipper

Consignee

Forwarder

2. Shipping Line:

MEDITERRANEAN SHIPPING COMPANY

CMA CGM

3. Is this your first visit to this Line?: Yes

No

4. How often do you visit this Shipping Line?

60

The Survey

The questionnaire below is in two sections. The first section asks you
to rank all shipping lines according to your expectations i.e. what you
expect all shipping lines to provide. The second section asks you to
rank the shipping line you chose for the survey according to your
experiences and perceptions.

SECTION 2a
Expectations

This section of the survey deals with your opinions of shipping lines. Please
show the extent to which you think shipping lines should posses the
following features. What the researcher is interested in here is a number that
best shows your expectations about services offered by excellent shipping
lines.
You should rank each statement as follows:
Strongly

Disagree

Undecided

Agree

Disagree
1

Strongly
Agree

61

Statement

Score

Score

Score

TANGIBILITY
T1 -Excellent shipping lines should have modern
looking facilities that are visually appealing (vessels,
containers, buildings, computers e.t.c)
T2 -Excellent shipping lines should be conveniently
located for easy access.
T3 Employees at excellent shipping lines should be
neat and professional in appearance.
T4 Conditions such as temperature, ventilation,

noise, lighting and ambience in shipping company

should be excellent.
RELIABILITY
R1 - When excellent shipping lines promise to do
something by a certain time, they do. (e.g. vessel
arrival, issue b/ls and invoices)
R2 When a customer has a problem, excellent shipping
lines should show a sincere interest in solving it
R3. Excellent shipping lines should perform the service
right the first time.
R4. Excellent shipping lines should provide the service
at the time they promise to do so.
R5. Excellent shipping lines should have employees
who are trustworthy in handling the customers
problems.
RESPONSIVENESS
Res1 - Employees of excellent shipping lines should tell
customers exactly when services will be performed
Res2 - Employees of excellent shipping lines should
give prompt service to customers.

62

Statement

Score

Score

Score

Res3 - Employees of excellent shipping lines should

always be willing to help customers
Res4 - Employees of excellent shipping lines should
never be too busy to respond to customers requests
ASSURANCE
ASSU1 - The behavior of employees at excellent
shipping lines should instill confidence in its customers
ASSU2 Customers of excellent shipping lines should
feel safe in their transactions.
ASSU3 - Employees of excellent shipping lines should
be consistently courteous with customers.
ASSU4 - Employees of excellent shipping lines should
have the knowledge to solve customers problems
EMPATHY
EMP1 - Excellent shipping lines should give customers
individual attention
EMP2 - Excellent shipping lines should have operating
hours convenient for all their customers
EMP3 - The employees of excellent shipping lines
should understand the specific needs of their customers
EMP4 The employees at excellent shipping lines
should never be too busy to respond to customers
requests.
EMP5 The employees at excellent shipping lines
should have the best interest of the customer at heart.

63

SECTION 2b
The following statements relate to your feelings about the particular
Perceptions
shipping line you have chosen of which you have received service from.
Please show the extent to which you believe this shipping line has the
feature described in the statement. Here, the researcher is interested in a
number from 1 to 5 that shows your perceptions about the shipping line.
You should rank each statement as follows:
Strongly

Disagree

Undecided

Agree

Strongly

Disagree

Agree

Statement

Score

TANGIBILITY
T1 -My shipping line has modern looking facilities that
are visually appealing (vessels, containers, buildings,
computers e.t.c)
T2 - My shipping line is conveniently located for easy
access.
T3 Employees at my shipping line are neat and
professional in appearance.
T4 Conditions such as temperature, ventilation,

noise, lighting and ambience in my shipping

company are excellent.

64

RELIABILITY

Score

Score

Score

R1 - When my shipping line promises to do something

by a certain time, they do.(e.g vessel arrival, b/l
issuance, invoicing)
R2 When a customer has a problem, my shipping line
shows a sincere interest in solving it
R3. My shipping line performs the service right the first
time.
R4. My shipping line provides the service at the time
they promise to do so.
R5. My shipping line has employees who are
trustworthy in handling the customers problems.
RESPONSIVENESS
Res1 - Employees of my shipping line tell customers
exactly when services will be performed
Res2 - Employees of my shipping line give prompt
service to customers.
Res3 - Employees of my shipping line are always
willing to help customers
Res4 - Employees of my shipping line are never too
busy to respond to customers requests
ASSURANCE
ASSU1 - The behavior of employees at my shipping
line instill confidence in customers
ASSU2 Customers of my shipping line feel safe in
their transactions.
ASSU3 - Employees of my shipping line are
consistently courteous with customers.

ASSU4 - Employees of my shipping line have the

65

knowledge to solve customers problems

EMPATHY

Score

EMP1 - My shipping line gives customers individual

attention
EMP2 - My shipping line has operating hours
convenient for all their customers
EMP3 - The employees of my shipping line understand
the specific needs of its customers
EMP4 The employees at my shipping line are never
too busy to respond to customers requests.
EMP5 The employees at my shipping line have the
best interest of the customer at heart.

66

INTERVIEW GUIDE FOR MANAGERS

1. How many years have you worked in leadership role for this shipping line?
.............................................................................................................
2. What constitutes quality service delivery as far as you are concerned?
.
.
...
.
..
..
3. What specific steps does your outfit take to ensure that customers are given quality services?
.
.
..
..

67

4. What specific strategies the shipping line adopt to ensure that customers are satisfied with the
services they receive?
..
..
..
..

5. How does the shipping line know if customers are dissatisfied with the services provided?
.

.
.
6. How does the shipping line measure the level of satisfaction of customers on the services
delivered?

.
.
.

68

7. What specific challenges does your organization face in its quest to deliver quality service and
thus to ensure customer satisfaction? Please list them.
.
.
.
.
..

8. What steps does your organization take in addressing the challenges listed above?

.
.

..
.

9. Any other issue on service quality and customer satisfaction as far as your organization is
concerned?
..
..

....
.

69