Professional Documents
Culture Documents
Introduction
As corporations increasingly are attracted to international markets to
overcome stagnant domestic market growth and stimulate revenues in
various industries, enlightened appreciation of the needs and wants of
consumers of other countries are increasingly important for those companies
espousing the marketing concept. Major airline industry competitors, seeking
to gain or expand market share globally or regionally, provide an opportunity
to explore the service expectations and perceptions of customers of different
nationalities.
Domestic market Beginning in the early 1990s, US airlines sought to overcome then stagnant
domestic markets and the limitations of existing nation-to-nation agreements
governing international service routes by establishing code-sharing alliances
with foreign airlines. ``Code-sharing'' is based on airline designators used in
airline industry computer systems; although code-sharing agreements most
commonly are recognized in airline alliances as marketing strategies, they
vary in nature based on the interests of the cooperating airlines. By virtue of
a marketing arrangement with a foreign airline, e.g. as proposed between
American Airlines and British Airways, an American Airlines ticket could be
issued to a passenger to Munich, Germany, although American Airlines does
not fly between the USA and that city. The passenger travels to Munich on
American Airlines and British Airways aircraft, without separate ticketing as
earlier had been the case. Such arrangements essentially allow airlines to
operate almost as one entity, such as the ``STAR'' alliance (involving Air
Canada, Varig, SAS, Lufthansa, Thai Airlines and United Airlines) while
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retaining their separate national identities, thus enabling the airlines to
achieve a market position other than that achievable as their national identity
suggests, and to overcome in degree the restrictions of the Chicago
Conference on International Aviation in 1944, which continues to define
freedoms allowed to airlines serving international markets.
Market share As they strive to improve market share and further enhance financial
performance through international markets, US airlines need a better
understanding of the variables likely to determine the success of new
ventures, e.g. expectations and perceptions of airline passengers from other
countries, most immediately those of the nations represented by their new
code-sharing partners. If significant variances were to be found in the
perceptions of airline passengers (by nationality) for the service quality of
the different airline groups, improvements would be needed to improve the
marketing mix to overcome noted deficiencies.
It has been widely accepted that overseas airlines are better; ``No US airline
has service `as good as most foreign airlines''' (McClenahan, 1991). Airline
service quality among US carriers has been considered an oxymoron by
many travelers, while major foreign carriers, Lufthansa German Airlines,
Swissair, British Airways and Singapore Airlines, are recognized service
quality leaders (Oneal, 1991; McClenahan, 1991), receiving enthusiastic
reviews from airline passengers for exceptional customer service. In the
absence of a service-quality focus among competing US airlines, devising
and implementing such a customer-focused marketing strategy is nonetheless
seen increasingly important to those US airlines seeking to compete in
international markets, where they confront foreign carriers recognized for
excellent customer service.
Overcome limitations Alliances with highly recognized airlines from other countries, may afford
the opportunity to overcome limitations of bilateral international agreements
and to improve service offerings. Dynamics associated with the international
operating environment increasingly requires companies to collaborate with
foreign partners for market efficiency, and responsiveness (Bartlett and
Ghoshal, 1987). Alliances are increasingly advocated as a means to
overcome obstacles and market complexities preventing companies from
achieving strategic aims, particularly in globalizing markets (Ohmae, 1989).
However, alliances are not to be seen as conveniences to be implemented
without commitment to long-run purpose; to do so is to compromise the
inherent advantages of such strategic arrangements, however, this is often
found to be the case with US-based corporations, which often abandon
alliances before achieving their original purposes (Ohmae, 1989). It may be
that contemporary alliances undertaken by otherwise competing airlines
conflict with requirements for global competition: top management may not
intend to change the fundamental way it thinks about and operates its
business (Hout et al., 1982).
Successful service quality strategies are generally characterized by customer
segmentation, customized service, guarantees, continuous customer
feedback, and comprehensive measurement of company performance. The
experience in many industries and companies demonstrates that this process,
although generally acknowledged, is not universally implemented. Market
segmentation by customer expectations, to create separate levels of service
that exceed those levels of expectations, has also been found essential to
attract customers and create customer loyalty (Porter, 1980, 1985). Knowing
accurately what customers prefer, successful service companies are able to
Expected
Service
Gap 5
Perceived
Service
Customer
Provider
Gap 4
Service External
Delivery Communications
to customers
Gap 1
Gap 3
Service Quality
Specifications
Gap 2
Management Perceptions
of Customer Expectations
found on the use of the SERVQUAL model to compare major groups of major
competitors in international airline service. Second, this study applies a portion
of the model to an international rather than a domestic setting, comparing the
expectations and perceptions of airline passengers from various countries to
airlines from Europe and the USA. It contributes to the service quality
literature by applying Gap 5 (the difference between customer perceptions and
expectations) of the SERVQUAL model to an international environment. It
provides empirical evidence of the usefulness of service models to assess
companies competing in global markets, and describes the role of nationality
in forming service quality expectations and perceptions.
Additionally, this research seeks to assess US airlines' potential to
implement a service quality-based marketing strategy, and to determine if
major US airlines are positioned to attract greater numbers of European
passengers, thereby improving market share on the transatlantic corridor, and
to suggest the potential for realizing similar opportunities in other global
markets, e.g. Asia.
Literature
Customer perceptions and expectations of service quality are increasingly
used to forecast company profitability and prospects for improved market
Research methodology
Series of propositions We focus on Gap 5 of the SERVQUAL model (Expectation-Perception Gap,
Figure 1). The conceptual framework for this aggregate study is illustrated
by Figure 2, by which we examine the expectations-perceptions gap along
the various links illustrated. We wish to examine how US and European
passengers evaluate groups of US and European airlines, examining each of
the links indicated. We propose a series of propositions to test the
expectations and perceptions along the links depicted in Figure 2. After
analyzing possible differences in the service quality expectations of
European and US passengers (Figure 2, link 5), this study assesses
differences in European and US passenger perceptions of service quality of
individual US and European airline groups (Figure 2, links 1/4 and 2/3) and
passenger group perceptions of a single airline group (Figure 2, links 1/3
and 2/4).
1
U.S. U.S.
5 6
4
2
European European
Propositions
Earlier SERVQUAL research had identified Reliability as the most
important and Tangibles as the least important of the five dimensions
influencing overall service quality ratings of service companies (Zeithaml et
al., 1990). Determining the relative importance of the same dimensions in
international airline service is an integral part of this study, and based on the
previous research, we propose that relative importance should remain the
same. In addition, we propose that nationality of passenger groups influences
perceptions and expectations of airline service quality; and therefore it is
expected that there will be differences in the expectations and perceptions by
nationality. The eight propositions to be tested are described below:
P1. The relative importance attributed to dimensions influencing customer
service quality expectations and perceptions does not vary by nationality
of airline passengers.
P2. Service quality expectations of airline service quality vary by
nationality.
P3. Service quality perceptions of airline groups vary by nationality.
P4. Overall assessments of airline service quality vary by nationality.
P5. European passengers perceive delivered service quality of US and
European airline groups to vary (Figure 2, links 2 and 3).
P6. US passengers perceive delivered service quality of US and European
airline groups to vary (Figure 2, links 1 and 4).
P7. European and US passengers perceive the US airline group to vary in
service quality (Figure 2, links 1 and 3).
P8. European and US passengers perceive the European airline group to vary
in service quality (Figure 2, links 2 and 4).
The methodology used to explore these propositions is examined based on
overall service quality. Unweighted SERVQUAL values are calculated, i.e.
SERVQUAL models
Individual airline service quality feature scores
Individual service quality An individual service quality (SERVQUAL) feature score for airline
passenger respondents is determined by calculating the difference between
passenger-assigned scores to expectation and perception statements (Gap 5)
distinguishing the five dimensions:
xijk pijk ÿ eijk
1
where ASQj represents the aggregate service quality score for each of five
dimensions (j= 1, 2, 3, 4, 5), k represents individual statements in the
respective dimension (four or five statements comprising a dimension, as
described in Appendix B), j represents the SERVQUAL dimensions (1
through 5), kj represents the number of statements in the jth dimension, and N
equals the number of respondents.
Operationalization of variables
Resulting scores in equations (1), (2), or (3) indicate the absolute difference
by which passenger expectations and perceptions of airline service quality
vary; negative airline SERVQUAL scores in the three categories (features,
dimensions, or overall) indicate the degree to which passenger perceptions of
airline service quality fail to meet expectations of service quality, a lower
negative score approaching p ± e = 0, reflecting a higher service quality
level. Individual statement differentials pinpoint features within respective
dimensions to address service quality priorities of customers, i.e. which
service characteristics or features are most (or least) important to
respondents and to address service quality deficiencies. The independent
variables (expectations and perceptions) used to assess airline passenger
service quality are operationalized using an airline passenger survey in three
languages, adapting the five SERVQUAL dimensions. The
operationalization of the expectation statements related to the five
SERVQUAL dimensions is shown in Appendix C. The operationalization of
perception statements related to these dimensions is shown in Appendix D. A
Likert seven-point scale in which (1) means ``strongly disagree'' and (7)
means ``strongly agree'' is used to measure consumer expectations and
perceptions for each of these statements.
Empirical examination
Transatlantic corridor This study focuses on groups of US and European airlines (Figure 2)
competing on the transatlantic corridor between Europe and USA[1]. As
bilateral international agreements fundamentally dictate which airlines are
allowed to compete on individual international routes (and for which reason
code-sharing initiatives have been otherwise adopted by many airlines), the
airlines and cities included in this research reflected the agreements existing
between individual governments for the airlines providing service on the
transatlantic corridor between the respective countries.
Major competing airlines were invited to participate in the research by
distributing a survey instrument to their passengers during flights between
the USA and Europe. Five airlines initially agreed to participate: American
Airlines, British Airways, Delta Air Lines, Lufthansa German Airlines, and
United Air Lines. British Airways and Delta Airlines later withdrew and
were replaced by Air Canada and Scandinavian Airlines System (SAS). As a
result of these changes the number of airports and countries through which
surveys were collected, and the nationalities represented in the research were
greatly increased. The study results are limited to US and European
passengers, Air Canada flights providing additional data from European
passengers traveling on the transatlantic corridor.
Survey instrument A common passenger survey instrument was provided for each airline's use
to collect data from international travelers on the North Atlantic corridor.
The survey was translated into French for use on Air Canada flights from
Montreal and Toronto to Frankfurt and Paris, and German for use on
Lufthansa flights from Frankfurt to New York.
Airline passengers were asked to identify the European and/or US airline on
which they most frequently traveled between the United States and Europe;
which resulted in the creation of two airline groups, creating the basis for the
study analysis by passenger groups[2]. For example a European passenger
Data analysis
Overall means analysis of service quality expectation and perceptions
dimensions were used to:
(1) determine and compare the absolute importance attributed to five service
quality dimensions by passenger (nationality) groups;
(2) directly compare aggregate European to US passenger group data; and
(3) measure passenger group assessments of airline groups service quality
overall[4].
T-tests of passenger expectations, perceptions and assessments of airline
service quality were used to test respective propositions, i.e. t-tests were used
Test of propositions
Importance of dimensions by passenger nationality
P1. The relative importance of dimensions influencing customer service
quality expectations and perceptions does not vary by the nationality of
airline passengers.
Passenger responses The relative importance of each of five service quality dimensions was
determined by passenger responses using a ratio scale of zero through 100
points, as implemented in the original SERVQUAL research (Appendix B);
means analysis of data was calculated by individual nationalities, aggregated
to reference groups (USA and Europe). The importance of SERVQUAL
dimensions in terms of mean percentage points is shown in Table I, by
nationality groups. For example 716 US respondents attributed 31.7
percentage points of importance to Reliability.
The rank order importance of dimensions for both of the passenger groups of
US and European passengers coincides with earlier research findings. Airline
passenger data parallels original SERVQUAL research results: Reliability is
the most important dimension in measuring international airline service,
followed by Responsiveness, Assurance, Empathy, and Tangibles.
This is supported by independent responses to statements ranking the
importance of service quality dimensions (Appendix B); 60 percent of
responding passengers (1,122) indicated Reliability to be the most important
service quality feature, 43 percent (803) indicated Responsiveness as the
second most important, and 47.4 percent (804) indicated Tangibles as the
least important.
We additionally did a difference in means test between the two passenger
groups. Reliability and Tangibles have statistically significant differences;
Responsiveness Assurance and Empathy do not. Nevertheless, since the rank
order of importance of service quality dimensions is found to match original
SERVQUAL research findings for both US and European passenger groups,
P1 is accepted. On the basis of this analysis, we conclude that there is no
difference in the order of importance of service quality dimensions by
nationality; Reliability is most important among the service quality
dimensions and Tangibles least.
Passenger groups
(mean value)
US Europe
SERVQUAL factor [n = 716] [n = 1,078] Difference t-value* Prob > |T|
Tangibles
1. ETAN1 5.5251 5.5288 0.0037 0.0537 0.9571
2. ETAN2 5.6997 5.5343 0.1654 ±2.7823* 0.0055
3. ETAN3 6.2318 5.8608 0.3710 ±7.2708* 0.0000
4. ETAN4 5.5307 5.3553 0.1754 ±2.8849* 0.0040
Reliability
5. EREL1 6.5056 6.5260 0.0204 0.4883 0.6254
6. EREL2 6.6927 6.6735 0.0192 ±0.5304 0.5959
7. EREL3 6.3729 6.1660 0.2069 ±4.2660* 0.0000
8. EREL4 6.5042 6.4527 0.0515 ±1.2164 0.2240
9. EREL5 6.1983 6.0222 0.1761 ±3.2324* 0.0012
Responsiveness
10. ERSP1 6.0768 5.9100 0.1668 ±3.0309* 0.0030
11. ERSP2 6.5056 6.3052 0.2004 ±5.0167* 0.0000
12. ERSP3 6.6522 6.5686 0.0836 ±2.3062* 0.0212
13. ERSP4 6.1969 6.0334 0.1635 ±3.2008* 0.0016
Assurance
14. EASR1 6.5223 6.3256 0.1967 ±4.8363* 0.0000
15. EASR2 6.5307 6.3961 0.1346 ±3.3170* 0.0012
16. EASR3 6.6173 6.3042 0.3131 ±8.0079* 0.0000
17. EASR4 6.2556 5.9490 0.3066 ±6.2854* 0.0000
Empathy
18. EEMP1 6.1494 5.8377 0.3117 -6.0839* 0.0000
19. EEMP2 6.0992 5.8377 0.2615 ±4.8260* 0.0000
20. EEMP3 6.1858 5.9174 0.2684 ±5.3651* 0.0000
21. EEMP4 6.4525 6.3265 0.1260 ±2.8011* 0.0058
22. EEMP5 6.1606 6.0538 0.1068 ±2.1463* 0.0320
Notes:
: p < 0.05; critical t-value > 1.96*
** t-values being determined using Likert seven-point scale, one being ``strongly
disagree'' and seven ``strongly agree''. [Appendix D]; t-values are calculated using
Europe-US mean values
items in the dimension being less than six on Likert seven-point scale). Both
passenger group expectation values for Tangible features (the appearance of
physical facilities, equipment, personnel and communications materials)
were lowest among the 22 service quality features, except for airline
employee appearance (ETAN3).
The differences between US and European passenger group expectations
were found to be statistically significant in 18 of 22 service quality feature
statements. On this basis, P2 is accepted. We conclude that service quality
expectations do vary by nationality.
Passenger group
Airline group Europe USA t-value
Europe ±0.7505 ±0.6258 ±2.2472*
USA ±0.8029 ±0.6596 ±2.7721*
t-value 1.4010 0.5798
Notes:
: p < 0.05; critical t-value > 1.96*
** In both row and column comparisons, mean differences are calculated as
European-US
Expectations of Responsiveness
Passengers appear to expect airline personnel to be responsive and prepared
to meet their requests, further suggesting that although passengers may
acknowledge that errors and that problems may occasionally occur, airline
employees are expected to respond to customer needs in a constructive and
considerate manner. Airlines concerned about building long-term passenger
loyalty, and sustained profits earned thereby (Reichheld and Sasser, 1990),
will not be distracted from their attention to the passenger even when
economic prosperity may obscure the need for doing so.
Expectations of Assurance
High values Both passenger groups attribute relatively high values (greater than 6 on
7-point Likert scale, Table II) to their expectations for Assurance features,
except for the European score for ``Employees in excellent airlines will have
the knowledge to answer customers' questions'' (5.9, EASR4). The emphasis
that passengers ascribe to employee behavior instilling confidence in
customers (EASR1), feeling safe in their transactions (with the airline)
(EASR2), employees being consistently courteous with customers (EASR3),
and employees having the knowledge to answer customers' questions
(EASR4), may relate to the general insecurity that many airline passengers
have for flying. Everything associated with the flight, e.g. the check-in
process, how schedule changes are handled, the conduct of airline
employees, becomes critical to passengers (Schneider and Bowen, 1995).
The significance of Assurance features is reflected in the extemporaneous
survey comments of some passengers, e.g. ``Frankfurt (staff) was not nearly
as courteous or helpful'', ``. . . European airline staff seem to be more
naturally caring'', and ``Polite, attentive staff''.
Expectations of Empathy
The Empathy features for which expectations are greatest include:
``Excellent airlines will have the best interests of the passenger at heart''
(EEMP4, Table II), and ``The employees of excellent airlines will understand
the specific needs of their customers'' (EEMP5, Table II), the scores for both
passenger groups exceeding 6. US passenger mean expectations were
statistically greater for all Empathy features than the European group.
Companies are often shown to violate the customer's best interests or
specific needs, by rationalizing the causes of complaints made by customers,
e.g. the reason for a lost reservation is explained by an employee in terms of
what the customer did wrong (Schneider and Bowen, 1995), rather than the
provider ± e.g. the airline. Thus airlines must also continue to address the
fundamental importance of Empathy-related issues in the overall delivery of
service to ensure that passenger interests and needs are served.
Expectations of Tangibles
Both passenger groups impute the lowest expectations for Tangibles among
service quality features (Table II); mean expectation values for all Tangibles
features are less than 5.7 (using the Likert seven-point disagree-agree scale)
except the US passenger group expectation for the appearance of aircraft
personnel (ETAN3, Table II).
Lowest expectations Both groups have lowest expectations among all features for ETAN1
``Excellent airlines will have modern-looking aircraft'' (Table II). The US
passenger group attributes a statistically higher expectation for the
appearance of airline office, terminal, and gate facilities (ETAN2), than the
European passenger group. The US passenger group also are found to have
statistically greater expectations than the European passenger group for
airline personnel appearance (ETAN3).
Managerial implications
It has been observed that the lure of a universal product may be false
(Ohmae, 1989), as may be the goal in alliances among international airlines.
This research suggests that there are significant service quality perception
differences among passenger groups that they would seek to attract. Since
European passengers found the service quality of US airlines to be less than
that of their own international carriers, substantial efforts may be required to
improve the service offering (changes in the marketing mix as well) in order
to attract those passengers. It is also unclear that US carriers are in fact
committed to improving their service quality through such alliances as have
been recently been created, or merely seeking to circumvent the provisions
of international laws governing their ability to reach what appear as
attractive markets. They might be inclined to abandon such alliances when
management problems and disagreements occur with their new partners
(Ohmae, 1989).
Research differences The research findings also suggest that those businesses intending to expand
their activities to international markets should carefully consider the
different levels of nationality-based expectations that may exist, carefully
research those differences to determine how marketing strategies should be
altered for the greatest effect, e.g. to structure marketing communications to
various passenger groups based on nationality, and to invest in improved
training and development of service provider staff to more effectively
respond to the expectations of customers. As Bitner et al. (1990) suggest,
companies seeking to deliver excellent service quality as a business strategy,
need to inspire their employees to meet customer needs: proper responses
can lead to increased customer satisfaction. As this research indicates, it
should not be assumed that the service delivered or delivery in one country
will meet the expectations of customers from another country.
Gain market-share On the basis of this research, customers from some countries, e.g. European
passengers as illustrated by this research, may be seen as more discerning
and critical of service than their counterparts in other countries, having
higher expectations and/or lower perceptions of service quality provided.
This research calls into question whether US airlines are positioned to
improve market share on the transatlantic corridor by employing a service
quality-based strategy because of the observed lower perception of the
service delivered by European respondents. More generally it questions
whether various service businesses can successfully enter international
markets without first refining both their service offering and delivery.
Without significant commitment to service excellence initiatives, businesses
may experience more difficulty in attracting foreign customers and
improving market share as intended. In this research, US airlines may be
seen to have greater difficulty in attracting significantly greater numbers of
European passengers on the most heavily-traveled airline route in
commercial aviation, other than through code-sharing arrangements.
However, there is a corresponding potential for European airlines to attract
greater numbers of US passengers and gain market share at the expense of
US competitors if ``open-skies''[7] treaties are implemented between the US
and European nations (and Asian as well), because of the perception of their
service offering by US passengers. In the absence of such agreements to
overcome restrictions imposed by international agreements, international
Notes
1. Chosen owing to it being the most heavily competed and traveled route in international
airline service.
2. Each passenger could evaluate a European airline that they most frequently used for
transatlantic travel, as well as a US airline flown most frequently on the transatlantic
corridor. If they had not flown one of the two airline categories, instructions were
provided to leave the associated portions of the survey blank.
3. The remaining 162 surveys were completed by passengers of other nationalities not
included in the scope of this study.
4. Tables of data supporting the individual hypotheses are available from the authors.
5. ``Paired'' refers to the match between related expectation and perception statements, e.g.
``Excellent airlines have modern-looking aircraft'' (expectation), and ``This airline has
modern-looking aircraft'' (perception).
6. This result is corroborated by the independent calculation of the quality of repective
airline groups (Table IV); the difference in European group ratings of overall service
quality of European and US airlines is not statistically significant (t = ±1.0410).
7. Bilateral ``open-skies'' treaties allow airlines of the respective nations to implement
airlines service between the countries in addition to those airlines already approved under
provisions of the Bermuda I and II agreements.
8. US passenger group perceptions of service quality, irrespective of airline group, are
greater than that of European passengers in all cases. Mean values of passenger group
percpetions by SERVQUAL features can be obtained from the authors.
References
Albrecht, K. (1992), The Only Thing That Matters, Harper Collins, New York, NY.
Albrecht, K. and Zemke, R. (1985), Service America!, Warner Books, New York, NY.
Table AI.
1. The appearance of the airline's ground facilities, aircraft, personnel ______ points
and communications materials.
2. The airline's ability to perform the promised service dependably and ______ points
accurately.
3. The airline's willingness to help customers and provide prompt ______ points
service.
4. The knowledge and courtesy of airline's employees and their ability ______ points
to convey trust and confidence.
5. The caring, individualized attention the airline provides its ______ points
customers.
TOTAL points allocated: 100 points
Table AII.
Table AIII.
Table AIV.
&