Customer Satisfaction at The Plaza Crowne Hotel

Customer gaiety at The Plaza detonatore HotelChapter IIntroduction1.1 IntroductionTourism is frequently and estimableifiably sop upd as a major phenomenon of modern times. Since 1950 the subprogram of world-wide tourist arrivals institutionwide has annexd spectacularly, from upright 25 million to over 924 million in 2008. Re stand foring an second-rate annual growth of 7 % a social class (Sharpley, R., 2004 and WTO populace Tourism Organisation, 2009).International tourism generated US$ 856 billion in 2007, representing 30% of the worlds exports of advantages for the related year. Under the influence of the modern global economic recession, tourism demand has signifi buttockstly slowed down in the past few months. nonably in the second half of 2008 growth came to stagnation with the number of international arrivals declining s glisterly a trend which is expected to continue in 2009 and probably beyond, if the sparing does non show signal of re passageion (WTO Wo rld Tourism Organisation, 2009).Regardless of the contemporary authentic global recession, it is undeniable the importance of the tourism natural action for the world economy, mutual understanding of nations, personal growth and using, just to mention a few benefits that tourism brings in.The hospitality indus emphasise, as a segment of the tourism industry, plays a major role in this economic activity (King, 1995). Being accommodation the biggest percentage in tourism using up, in average of 34% of the total expenditure per trip (Sharpley, R., 2004).The success of the hospitality industry, relies massively on the tonus of the improvement delivered and node gratification. The index of the metre of both, type armed do and node satisfaction, forget widely influence on occupancy rates, hence, on the profit mightiness of the ships comp about(prenominal) (Hollo personal manner, JC, 1998 Solomon et al, 2006).Therefore, justifying the convey for a reliable model of asse ssment of node satisfaction and helping caliber that would better adapt to the hospitality theater of trading performances, which at present still have a lack of agreement.1.2 look TitleThe quantity of wait on timbre and customer satisfaction in the hospitality industry a gaffe study of the Plaza Crowne Hotel.1.3 Research BackgroundFor Cardozo (1965), cited by Williams and Uysal (2003), commercialise prep argoning questiones in the consumer satisfaction field started in the early 60s. The subject had a relevant increase in popularity by governings and interrogationers only in the 80s, when organisations, in an attempt to try to keep itselves in the marketplace, started paying substantial tending on customers expectations demands.1.4 Research AimsThe aim of this project is to analyse customer satisfaction and dish bore measurement, using the SERVQUAL model, within The Plaza Crowne Hotel Kansas city (USA), based upon the hotels own entropy against the highli ghted pastes within the model.1.5 Research ObjectivesIn vow to achieve the under tamp aim it get out be infallible to call for a review of wait on superior and customer satisfactionIllustrate The Plaza Crowne Hotels current customer satisfaction and dish out quality measurement model to identify its positive and negative aspectsConduct an initial diagnosis of the key issues presented in the Crown Plaza info, examining the hotels past assessments in order to identify atomic number 18as of failureAnalyse the SERVQUAL model thinking on the hospitality industryIdentify and critically recommend suitable quality measurement dedicates to dedicate within The Plaza Crowne Hotel, if necessaryChapter IILiterature Review2.1 IntroductionTo Kotler et al (1996), nowadays companies need to change their view and attitude in the marketplace and adopt a much customer centred philosophy, in order to keep competitive and remunerative. Customers are ever-changing their behaviour towards co nsumption, becoming to a greater extent than than challenging to companies to understand their expectations, as they are increasingly aware of their rights, expect more than they spendd to, and firebrand love exactly what they indispensableness when purchasing a product or receipts. This increase in consumers expectation naturally leads to the need of a higher quality in costumer function deli genuinely.Customer satisfaction and quality overhaul became antecedency for companies worldwide. They are believed to generate repeated product line, and then change magnitude profit margin. The hospitality industry is paying con boundaryinous attention to it. Hamptons Inn, a well lie with resort in Florida, has developed a 100% satisfaction guarantee program that promises its customers no wake up unless they are completely satisfied. Other companies such as Sheraton Hotels has implemented a employees reward outline for superlative function to guests, the Sheraton Guests Satisfaction System (SGSS). Hilton International has espouse as a primary goal its customers satisfaction with global diversity. Moreover, organisations are increasingly becoming adept of rewarding its employees with bonuses, incentives and salary rise, just to mention a few actions to improve table service. (Oh, 1997).Therefore, marketing researchers are ceaselessly developing and improving models of measuring customers satisfaction and quality service. Among many an(prenominal) measurement models and theories, this dissertation leave alone focalize on the analysis of the 5 gaolbreaks Model developed by Parasuraman, Berry and Zeithaml in like manner called The Servqual Model.2.2 Defining attendService is any act or accomplishment that one firm can offer to a costumer, its constitution is essentially intangible and does not consequent in the ownership of anything. The service production may or may not be degenerateened to a physical product (Kotler, P, 2003).Addittio naly, Gronroos (1990) cited by Hsu et al (2001, p.18) defines service as an activity or series of activities of more or less intangible nature that normally, but not necessarily, takes place in interactions betwixt the costumer and service employees and/or physical resources or approximate enoughs and/or systems of the service countenancer, which are provided as solutions to customers problems.From the consumers optic, service is nothing else than the go across lived in the whole process of this transaction (Hsu et al, 2001).Moreover, it was tell that services have four major characteristics that greatly affect the way it is delivered and its marketing programme. Which are intangibility, insepar competency, variability, and perishability (Kotler, 2003).Bellow the four charactecristics are concisely explained in the light of Kotler (2003) and Hsu et al (2001)Intangibility relates to the extent that services cannot be tried in anyway before they are actually purchased and del ivered. The only thing that can be done to reduce uncertainty is to present for evidences of service qualityInseparability is the relation that services are typically produced and consumed simultaneously. The person who provides the service, is actually part of the service purchased, therefore the importance of the interaction of providers and customersVariability occurs because services cypher on who provides, when and where, one experience is never exactly equal the an other(a)(prenominal). As people are the government agency by dint of service production, personal problems, mood, knowledge of the assembly line and many other factors can interfer and widely vary the servicePerishability style that services cannot be stored as we can do with manufactured products, because services are produced and consumed simultaneously. As an example, in a hotel, a room that was not occupied yesterday, cannot be sold anymore as time does not goes backwards.For Cook (2002) the increased gl obal ambition has do many organisations realised that they cannot compete only in price. Therefore companies are developing their own strategy in providing superior customer care to several(predicate)iate their products and services.Surveys suggest that service-driven companies can charge up to 9 per cent more for the products and services they provide. They grow twice as fast as the average company and have the potential to gain up to 6 per cent market share (Cook, 2002, p.1).2.3 Defining customer satisfaction and quality servicePeter Drucker cited by Cook (2002, p.1), once said There is only one valid definition of business settle to create a customer () an organisations ability to remain in business is a function of its engagement and its ability to win customers from the disceptation. The customer is the foundation of the business and keeps it in existence.Customer satisfaction relates to the personal opinion and subject of customers assessment of a service based on a co mparison of their expectations and actual lores of the service delivered (Clark, G. and Johnston, R., 2005). harmonise to Lancaster et al (2002) from the customers point of view, service is judged by the mix of customers previous(prenominal) experiences and their perception of the bulge outcome of the service. The service experience is the customers direct experience of the service process and concerns the way the customer is dealt with by the service provider. The yield for the customer of the service delivered is described by the term service outcome. (Lancaster, G. et al, 2002).Service quality is more often utilize to mean different things. Some motorbuss use the term to mean how the customer is treated. This is perhaps more accurately called quality of service, as opposed to service quality, which can mean the entirety of outcome and experience (Clark, G. and Johnston, R., 2005, p.108).Van Looy (et al, 2003) differentiates service quality and customer satisfaction stating that service quality is a form of attitude representing a long-run, overall evaluation, whereas satisfaction represents a more short-term, transaction-specific judgement. The level of customer satisfaction is the result of a customers comparison of the service quality expected in a devoted service encounter with perceive service quality. This besides means that satisfaction assessments require customer experience while quality does not (p.124).2.4 Benefits of service qualityKotler (1996) has listed many benefits that an organisation enjoys as a prize for delivering service quality. As listed bellowRetaining customers high quality builds loyal customers and creates positive word of mouth.Avoidance of price competition the PIMS data show that firms in the top trio in quality could charge 5% to 6% higher than those in the bottom third. High quality can help to avoid price competition and help to maximise potential revenue (p.363).Retention of good employees employees appreciate working in operations that are well managed and produce quality services and products. When an organisation operates in high quality, it decreases turn over rates, hence, retaining good employees. Additionally, recruiting is easier and training costs are reduced. decrement of costs which are divided in collar categories of costs Internal costs are those associated with correcting problems discovered by the firm before the product reaches the costumers international costs are associated with errors that the costumers experience Quality system costs are costs viewed as investments in the future of the company to ensure that customers return. (Kotler, 1996)2.5 Benefits of a customer-centred organisationAn excellent service provides many benefits to an organisation, Cook (2002) has listed what some of the lift out-practice organisations have gain on focusing on the customer. Differentiate itself from the competition improve its image in the eyes of the customer minimise price e sthesia improve lucrativeness increase customer satisfaction and computer memory achieve a maximum number of advocates for the company enhance its reputation ensure products and services are delivered right first time improve staff morale increase employee satisfaction and retention increase productivity reduce costs bring forward employee participation create a reputation for being a caring, customer-oriented company foster internal customer/supplier descents bring nigh continuous improvements to the operation of the company ( p.24).2.6 Importance of customer relationship management (CRM)Customers perceive service quality through everyday aspect of their contact with the company. In improving the quality of its service therefore an organisation needs to develop a strategy bearing in point all aspects of the relationship with its clients. (Cook, 2002)Customers often do not perceive the service they receive from an organisation as a complete entity. Attention to detail is a ke y tool of the organisations relationship with the customer such as an incorrectly addressed letter, a lengthy delay in receiving an electronic mail response, a service which turns out to be different to how it was originally advertised, which forms customers impressions (Cook, 2002, p.24).CRM involves managing the customer relationship across all its interfaces with the company as one entire process. A CRM system can help identify sales prospects from subsisting or potential customer databases. It also can assist with all aspects of the sale and service being provided, eg offering online access to order billet and a single view of the customer status when the sale is complete. It can collect in makeup round the customer and the queries that he or she made. It can also monitor customer-usage patterns, so abnormal patterns or a reduction in use can be identified. Hotels systems can store any peculiarity or requests made by guests, such as preferences for smoking or non-smoking ro oms, higher or lower floors etc. (Cook, 2002 and Lancaster et al, 2002).Ernst and Young found elements that are essentially great for organisations to build a CRM framework. First basic step is to accumulate taxonomical knowledge of its markets and costumers. This could be made by complex IT systems, that are designed to store, music director and analyse informations about customers valuate. With this tool organisations can access business informations regard theier costumers, and also predict consumers behaviour. Enabling organisations to share informations across departments, and automatically update this informations by tracking loyalty cards costumers, any time they make a purchase or request the companys service,for example (Cook, 2002).CRM systems helps companies to target theier segments, and also to analyse the information flow throughout the company. Making easier to identify its costumers needs, and more importantly, shows the best way to approach its most fat client s. The more information a company holds about its costumers the best is the knowledge built, as it helps refines consumer segmentation and individual needs. In this particular case, data about costumers breeding-style is very helpful (Cook, 2002).Selling involves taking a proactive approach towards costumers, quite an than a reactive. For instance, hotels can treat their most profitable business guests with special offers on their holidays. To finish the CRM framework, is essential to hold a service, providing an after-sales which should be measured to individual needs (Cook, 2002).2.7 Importance of performance measurement and a programme developmentYou cannot manage what you can not measure (Kelvin Anon, www.dti.gov.uk/quality/performance). jibe to Cook (2002) and Williams (2002) managers braves the way through customer satisfaction measurement. A measurement programme starts with a clear definition of objectives, budget and timeline. Moreover, for this problem to be performed and achieve its highest level of success, it is necessary the full commitment and willingness of top management to act on the results founded.A starting point should be to decide which part of customer satisfaction the company is most concerned to measure. Is also important to be aware that expectations and satisfaction levels can widely vary amid the costumers of a company, therefore, the need to identify market segments. For example, the different needs of a businesses and tourists guest of a hotel. (Cook, 2002 Laws, 2004 Williams, 2002)According to Clark and Johnston (2005) performance measurement is costly. Few organisations have calculated just how much time and cleverness they spend on measuring their performance and its value for money relation. Two useful tests of a performance measure are, first, what is its purpose and, second, what systems are in place to support or achieve that purpose. There are four main purposes or reasons to take measurement communication, motivat ion, control and improvement within the company.In the unceasing improvement process, measuring performance is an important task in order to identify and track progress in harmony with the organisations goals identify areas and opportunities for improvement and equalise performance with internal and external standards (www.dti.gov.uk/quality/performance).According to the Department of Trade and Industry (DTI) the main reasons of measuring performance is To ensure customer requirements have been met To be able to set sensible objectives and comply with them To provide standards for establishing comparisons To provide visibility and a nominateboard for people to monitor their own performance level To highlight quality problems and determine areas for priority attention To provide feedback for effort the improvement effort (retrieved from ).2.8 The SERVQUAL modelThe Servqual model was developed by Parasuraman, Zeithaml and Berry, and has been one of the most popular service quality measurement instrument since then. The model was designed to measure those components of service that generate satisfaction within five dimensions (Ryan and Saleh,1991 Lee et al, 2004 Johns et al, 2004).Originally the researchers conducted a focus group studies with service providers and costumers, and as a result they came up with a list of ten determinants or dimensions of service quality which are reliability, responsiveness, competence, access, courtesy, communication, credibility, security, understanding/ intimate the customer and tangibles, (Van Looy, B et al, 2003 Parasuraman et al, 1990 Ryan and Saleh,1991) which will be presently explained bellowTangibles the appearance of physical facilities, the personnel, the tools or equipment used to provide the service and communication material. Guests of a hotel look for details of the building, web sites and reservation systems for instance.Reliability harmony of performance and dependability. This means that the firm performs the service correctly the first time and that the firm honours its promises. reactivity the willingness to help the customers and to provide prompt service.Competence knowledge, ability and possession of the right skills to perform the job.Access degree of approachability of service providers.Courtesy use of good manners, politeness, friendliness, smiling during the service.Communication ability to success fully publish with costumers, keep them informed.Understanding degree of interest of employees to know the costumers needs and wants.Assurance knowledge and courtesy of employees and their ability to inspire trust and confidence.Empathy caring, individualized attention to customers. (Van Looy, B et al, 2003 Parasuraman et al, 1990 Ryan and Saleh,1991)Later on, in another attempt of improving their models they found a high degree of correlativity between communication, competence, courtesy, credibility and security. They therefore, merged them into one dimension, which t hey called toast. as well as they found a high correlation between access and understanding which they merged into empathy. Thus compacting the dimensions of service quality in five which are tangibles, reliability, responsiveness, assurance and empathy (Van Looy, B et al, 2003 Dabholkar et al 2000).The diagram bellow was originally made to suit the quality service measurement and customer satisfaction of a car fall back garage. Which can be easily adapted to any other service organisation, surely including any hotels to be more precise.Source http//www.emeraldinsight.com/fig/0240221006003.pngThe SERVQUAL identified gaps between clients and organisations perceptions of attributes of service perceived, and also between customers expectations and perceptions of the service actually delivered (Ryan and Saleh,1991 Landrigan, 1999). This has led to the well known and widely used 5 gaps of service qualityGap 1 Consumer expectations versus management perceptionCEOs and managers often fa il to realise what consumers expect of a service and which features needs to be pursued to deliver a high-quality service. When management does not understand what their customers want, a gap 1 exists.Very often, organisations research to find out what are their markets needs and wants, but later can occur a divergence. When customer needs change but the product remains the same, gap 1 increases, as the service becomes less attractive (Parasuraman etal, 1991).Gap 2 Management perception versus service quality specificationsA gap 2 situation occurs when managers know their customers needs, but do not deliver it, both for unwillingness or incapability. Reasons for gap 2 to happen could be inadequate commitment to service quality, absence seizure of goal setting, lack of perception of feasibility, and lack of standardization. The credit line to achieve short-term profits refrain companies to invest in equipments and people, causing service quality issues (Parasuraman etal, 1991).Gap3 Service quality specifications versus service deliveryGap 3 occurs when employees are unwilling or unable to deliver the appropriate service that was specified by management. In this case managers understand their customers needs, develop strategies and tasks to fulfil these needs, but in the moment of employee and costumer interaction it does not occur (Parasuraman etal, 1991).Gap 3 could be minimised through training and development, rewarding and internal marketing campaigns. military man resources department plays a major role in this task.Gap 4 Service delivery versus external communicationsA company creates gap 4 when it promises more than it can deliver, creating disappointments to its customers. Good sense and ethic when advertising should be primordial in any circumstances (Parasuraman etal, 1991). The image of a company that cheats or lies to its costumers leads to an extremely bad reputation and negative word of mouth.Gap 5 Expected service versus perceived serviceLast but not least, gap 5 is a function of the other gaps. It pictures the discrepancy among expected quality and perceived quality. If any of the other 4 gaps increases or decreases, gap 5 will follow it (Parasuraman etal, 1991).The diagram below represents the 5 gaps model of quality service.Source http//www.kmfadvance.com/mind_the_gap_files/image004.jpg2.9 Criticisms and limitations of the SERVQUALAccording to Oh (1997) the use of the difference of the scores contributes to discrepancies and errors, affecting the reliability and valididyt of the model. Such purpose suggests that caution has to be taken when using the scores, and that additional work is essential to the development of measures of assessing the quality of services.In addition it is also noticeable that the SERVQUAL lacks in ties with statistics, economics and even psychology theories, therefore many arguments has formed a doubtful opinion regards its relaibility.2.10 Other service quality and costumer satisfaction me asurement modelsObviously, the SERVQUAL is not the only model available to measure service quality and costumer satisfaction. Indeed, there is a run of variety of models out there. Some of them will be quickly explained in this study.2.10.1 The expectancy-disconfirmation model (EDM)The principle of expectancy theory was early stated by Lewin (1938) who hypothesized that individuals make decisions on the most appropriate action to take based on their expectations of the outcomes of that action. After being reviewed by many researchers, the model developed to two processes the formation of expectations and the disconfirmation/ confirmation of the expectations through performance evaluations (Oh, 1997 available at http//proquest.umi.com.newdc.oum.edu.my/pqdweb).Chapter IIIResearch Methodology3.1 Research ProcessThis research will include several components of different character, promoting the approach to new problems, providing bibliographic critique, offering a selection of methodo logies, as well as providing a critical analysis of results (Saunders, et al, 2003).In order for the aims of this research to be met it is necessary to gain an understanding of the practices of the service quality and customer satisfaction assessments use within The Crowne Plaza Hotel (please see appendix II). This data will be given by one manager of the company, and will be adapted for a experimental application of the SERVQUAL model.The research and development will stop creative work undertaken on a systematic basis in order to build knowledge accumulation, including not only the practices of the service quality and customer satisfaction assessments model researched but how would be applied within The Crowne Plaza Hotel in order to achieve competitive advantage and business success.The purpose of the lit review is suppositionally discussing ideas that exist about the given topic. Data sources, such as library catalogues and indexes will be scanned for secondary coil data. Thi s will produce a list of journals and newspaper articles, published books and internet sources (Saunders, et al, 2003).The secondary research will be complemented by primary research, through questionnaires and interviews with stakeholders of the organization in question.In case of interviews and questionnaires, the manager cooperating with this research will be fully informed about the, methods and intended possible uses of the research, what their participation in the project entails, the strict confidentiality, and academic purpose only (Bell, 1999).The project proposes to use analytical and theoretical framework, which extends descriptive research, making suggestions of why and how practices of the service quality and customer satisfaction assessments plays an important role in the competitive advantage, profitability and success of the firm (Yin, 2003).A method of both, quantitative and qualitative approach will be applied in order to control values, attitudes and perceptions aspects of the research subject. (Flick, 2003)The departure point will be deductive, with the observation of the SERVQUAL model, fed by the organisation informations collected where conclusions will be critically evaluated against facts.Moreover, a phenomenological philosophy will be implemented, applying a case study approach, since this kind of research methodology is ideally suited to investigate the insights into the service quality and customer satisfaction in theory and practice (Yin, 2003).The data collected for this research was taken between the months of January, February and March 2009, it consists of 380 customer satisfaction surveys, applied by the hotel. This surveys were answered by guests, either on the check-out or on the hotel web site, after their stay in the hotel. At the time of the data collection, was common practice of the hotels front desk manager to put the weekly result together and send to all hotel departments, so they could have a picture of the guests feedback.3.2 Research TheoriesIn order to achieve this reaserch objectives it will be necessary to apply many reaserch theories that reinforces the reliability of it. The theories used in this research will be briefly explained one by one.3.2.1 Case studyAccording to Robson (2002178) cited by Saunders et al, 2003, p.93), 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 evedence. A case study approach is recommended to those reasearchs that essentially aims to explain why, how such phenomenon occurs, as well as in research that includes surveys (Saunders, 2003 Yin,2003).A case study is also a scientific way of explore an existing theory, which is one of the main objectives of this research, as is analysing the use of SERVQUAL (Saunders, 2003).3.2.2 descriptive studiesIn order to have a clear picture of the scenario studied is essentially important to d escribe with accuration every data collected. As cited by Saunders et al (2003, p.97), Robson, 200259 describes the objective of descriptive research as to portray an accurate profile of persons, events or situations.3.2.3 deductive methodComplementing the case study approach, a deductive method could be simply described as way of what we would think of a scientific research or theory, moving from theory to practice (Bailey, 2006 Cottrell, 2005 Saunders, 2003).It involves the development of a theory that is subjected to a rigorous test (Saunders, 2003, p. 86). The deductive method has many characteristics. First, there is the search to explain casual relationships between variables (Saunders, 2003, p. 86). Then, hypothesis development, followed by hypothesis testing, normally using quantitative data, but could also being backed up by qualitative data.3.2.4 Quantitative dataOn the other hand quantitative research apply measurements and normally considered as better than qualitative research. Ghauri and Gronhaug (2005 p. 109) explains that the difference between quantitative and qualitative methods and approach is not just a question of quantification, but also a reflection of different perspectives on knowledge and research objectives.A method of qualitative approach will be applied in order to examine values, attitudes, and perceptions aspects of the research subject.3.2.5 Qualitative dataA level analysis process was implemented to interpret the data that were collected from the research portion of this project. Thomas (2003 p.1) argues that Qualitative methods involves a researcher describing kinds of characteristics of people and events without comparing events in terms of measurements or amounts3.3 Research DesignThe survey consists of a questionnaire of 44 questions (picked by the hotels own customer satisfaction survey) related to the quality of the service provided by the hotel. The guests (sample = 380) will answer the questions according to their per ception of the service received, whilst the managers (sample = 4) will answer the questions according to what they expect the overall of the guests to answer.The answers will range between score 1 to score 5. Being 1 the best degree of satisfaction and 5 the worst degree of dissatisfaction, (Saleh and Ryan, 1991) having some variations as followsScore 1 very satisfied / definitely would / much more than you paying(a) / much better / excellent / yesScore 2 more or less satisfied / probably would / somewhat more than you paid / somewhat better / very goodScore 3 neither / might or might not / about what you paid / about the same / goodScore 4 somewhat dissatisfied / probably would not / somewhat lees than youCustomer Satisfaction at The Plaza Crowne HotelCustomer Satisfaction at The Plaza Crowne HotelChapter IIntroduction1.1 IntroductionTourism is frequently and justifiably described as a major phenomenon of modern times. Since 1950 the number of international tourist arrivals world wide has increased spectacularly, from just 25 million to over 924 million in 2008. Representing an average annual growth of 7 % a year (Sharpley, R., 2004 and WTO World Tourism Organisation, 2009).International tourism generated US$ 856 billion in 2007, representing 30% of the worlds exports of services for the related year. Under the influence of the recent global economic recession, tourism demand has significantly slowed down in the past few months. Notably in the second half of 2008 growth came to stagnation with the number of international arrivals declining slightly a trend which is expected to continue in 2009 and probably beyond, if the economy does not show signal of reaction (WTO World Tourism Organisation, 2009).Regardless of the current actual global recession, it is undeniable the importance of the tourism activity for the world economy, mutual understanding of nations, personal growth and development, just to mention a few benefits that tourism brings in.The hospit ality industry, as a segment of the tourism industry, plays a major role in this economic activity (King, 1995). Being accommodation the biggest percentage in tourism expenditure, in average of 34% of the total expenditure per trip (Sharpley, R., 2004).The success of the hospitality industry, relies massively on the quality of the service delivered and customer satisfaction. The index of the measurement of both, quality service and customer satisfaction, will widely influence on occupancy rates, hence, on the profitability of the company (Holloway, JC, 1998 Solomon et al, 2006).Therefore, justifying the need for a reliable model of assessment of customer satisfaction and service quality that would better adapt to the hospitality field, which at present still have a lack of agreement.1.2 Research TitleThe measurement of service quality and customer satisfaction in the hospitality industry a case study of the Plaza Crowne Hotel.1.3 Research BackgroundFor Cardozo (1965), cited by Willi ams and Uysal (2003), marketing researches in the consumer satisfaction field started in the early 60s. The subject had a relevant increase in popularity by organisations and researchers only in the 80s, when organisations, in an attempt to try to keep itselves in the marketplace, started paying substantial attention on customers expectations demands.1.4 Research AimsThe aim of this project is to analyse customer satisfaction and service quality measurement, using the SERVQUAL model, within The Plaza Crowne Hotel Kansas City (USA), based upon the hotels own data against the highlighted gaps within the model.1.5 Research ObjectivesIn order to achieve the specified aim it will be necessary toConduct a review of service quality and customer satisfactionIllustrate The Plaza Crowne Hotels current customer satisfaction and service quality measurement model to identify its positive and negative aspectsConduct an initial diagnosis of the key issues presented in the Crown Plaza data, examin ing the hotels past assessments in order to identify areas of failureAnalyse the SERVQUAL model focusing on the hospitality industryIdentify and critically recommend suitable quality measurement practices to apply within The Plaza Crowne Hotel, if necessaryChapter IILiterature Review2.1 IntroductionTo Kotler et al (1996), nowadays companies need to change their view and attitude in the marketplace and adopt a more customer centred philosophy, in order to keep competitive and profitable. Customers are changing their behaviour towards consumption, becoming more challenging to companies to attend their expectations, as they are increasingly aware of their rights, expect more than they used to, and know exactly what they want when purchasing a product or service. This increase in consumers expectation naturally leads to the need of a higher quality in costumer services delivery.Customer satisfaction and quality service became priority for companies worldwide. They are believed to genera te repeated business, therefore increased profit margin. The hospitality industry is paying close attention to it. Hamptons Inn, a well know resort in Florida, has developed a 100% satisfaction guarantee program that promises its customers no charge unless they are completely satisfied. Other companies such as Sheraton Hotels has implemented a employees reward system for superior services to guests, the Sheraton Guests Satisfaction System (SGSS). Hilton International has adopted as a primary goal its customers satisfaction with global diversity. Moreover, organisations are increasingly becoming adept of rewarding its employees with bonuses, incentives and salary rise, just to mention a few actions to improve service. (Oh, 1997).Therefore, marketing researchers are constantly developing and improving models of measuring customers satisfaction and quality service. Among many measurement models and theories, this dissertation will focus on the analysis of the 5 Gaps Model developed by Parasuraman, Berry and Zeithaml also called The Servqual Model.2.2 Defining ServiceService is any act or performance that one firm can offer to a costumer, its nature is essentially intangible and does not result in the ownership of anything. The service production may or may not be tied to a physical product (Kotler, P, 2003).Addittionaly, Gronroos (1990) cited by Hsu et al (2001, p.18) defines service as an activity or series of activities of more or less intangible nature that normally, but not necessarily, takes place in interactions between the costumer and services employees and/or physical resources or goods and/or systems of the service provider, which are provided as solutions to customers problems.From the consumers optic, service is nothing else than the experience lived in the whole process of this transaction (Hsu et al, 2001).Moreover, it was noted that services have four major characteristics that greatly affect the way it is delivered and its marketing programme. Whi ch are intangibility, inseparability, variability, and perishability (Kotler, 2003).Bellow the four charactecristics are briefly explained in the light of Kotler (2003) and Hsu et al (2001)Intangibility relates to the extent that services cannot be tried in anyway before they are actually purchased and delivered. The only thing that can be done to reduce uncertainty is to look for evidences of service qualityInseparability is the relation that services are typically produced and consumed simultaneously. The person who provides the service, is actually part of the service purchased, therefore the importance of the interaction of providers and customersVariability occurs because services depend on who provides, when and where, one experience is never exactly equal the other. As people are the means through service production, personal problems, mood, knowledge of the job and many other factors can interfer and widely vary the servicePerishability means that services cannot be stored a s we can do with manufactured products, because services are produced and consumed simultaneously. As an example, in a hotel, a room that was not occupied yesterday, cannot be sold anymore as time does not goes backwards.For Cook (2002) the increased global competition has made many organisations realised that they cannot compete only in price. Therefore companies are developing their own strategy in providing superior customer care to differentiate their products and services.Surveys suggest that service-driven companies can charge up to 9 per cent more for the products and services they provide. They grow twice as fast as the average company and have the potential to gain up to 6 per cent market share (Cook, 2002, p.1).2.3 Defining customer satisfaction and quality servicePeter Drucker cited by Cook (2002, p.1), once said There is only one valid definition of business purpose to create a customer () an organisations ability to remain in business is a function of its competitivenes s and its ability to win customers from the competition. The customer is the foundation of the business and keeps it in existence.Customer satisfaction relates to the personal opinion and result of customers assessment of a service based on a comparison of their expectations and actual perceptions of the service delivered (Clark, G. and Johnston, R., 2005).According to Lancaster et al (2002) from the customers point of view, service is judged by the mix of customers previous experiences and their perception of the outcome of the service. The service experience is the customers direct experience of the service process and concerns the way the customer is dealt with by the service provider. The result for the customer of the service delivered is described by the term service outcome. (Lancaster, G. et al, 2002).Service quality is more often used to mean different things. Some managers use the term to mean how the customer is treated. This is perhaps more accurately called quality of s ervice, as opposed to service quality, which can mean the entirety of outcome and experience (Clark, G. and Johnston, R., 2005, p.108).Van Looy (et al, 2003) differentiates service quality and customer satisfaction stating that service quality is a form of attitude representing a long-run, overall evaluation, whereas satisfaction represents a more short-term, transaction-specific judgement. The level of customer satisfaction is the result of a customers comparison of the service quality expected in a given service encounter with perceived service quality. This also means that satisfaction assessments require customer experience while quality does not (p.124).2.4 Benefits of service qualityKotler (1996) has listed many benefits that an organisation enjoys as a prize for delivering service quality. As listed bellowRetaining customers high quality builds loyal customers and creates positive word of mouth.Avoidance of price competition the PIMS data show that firms in the top third in quality could charge 5% to 6% higher than those in the bottom third. High quality can help to avoid price competition and help to maximise potential revenue (p.363).Retention of good employees employees appreciate working in operations that are well managed and produce quality services and products. When an organisation operates in high quality, it decreases turn over rates, hence, retaining good employees. Additionally, recruiting is easier and training costs are reduced.Reduction of costs which are divided in three categories of costs Internal costs are those associated with correcting problems discovered by the firm before the product reaches the costumers External costs are associated with errors that the costumers experience Quality system costs are costs viewed as investments in the future of the company to ensure that customers return. (Kotler, 1996)2.5 Benefits of a customer-centred organisationAn excellent service provides many benefits to an organisation, Cook (2002) has listed what some of the best-practice organisations have gain on focusing on the customer. Differentiate itself from the competition improve its image in the eyes of the customer minimise price sensitivity improve profitability increase customer satisfaction and retention achieve a maximum number of advocates for the company enhance its reputation ensure products and services are delivered right first time improve staff morale increase employee satisfaction and retention increase productivity reduce costs encourage employee participation create a reputation for being a caring, customer-oriented company foster internal customer/supplier relationships bring about continuous improvements to the operation of the company ( p.24).2.6 Importance of customer relationship management (CRM)Customers perceive service quality through everyday aspect of their contact with the company. In improving the quality of its service therefore an organisation needs to develop a strategy bearing in min d all aspects of the relationship with its clients. (Cook, 2002)Customers often do not perceive the service they receive from an organisation as a complete entity. Attention to detail is a key tool of the organisations relationship with the customer such as an incorrectly addressed letter, a lengthy delay in receiving an e-mail response, a service which turns out to be different to how it was originally advertised, which forms customers impressions (Cook, 2002, p.24).CRM involves managing the customer relationship across all its interfaces with the company as one entire process. A CRM system can help identify sales prospects from existing or potential customer databases. It also can assist with all aspects of the sale and service being provided, eg offering online access to order status and a single view of the customer status when the sale is complete. It can collect information about the customer and the queries that he or she made. It can also monitor customer-usage patterns, so abnormal patterns or a reduction in use can be identified. Hotels systems can store any peculiarity or requests made by guests, such as preferences for smoking or non-smoking rooms, higher or lower floors etc. (Cook, 2002 and Lancaster et al, 2002).Ernst and Young found elements that are essentially important for organisations to build a CRM framework. First basic step is to accumulate systematic knowledge of its markets and costumers. This could be made by complex IT systems, that are designed to store, manager and analyse informations about customers value. With this tool organisations can access business informations regard theier costumers, and also predict consumers behaviour. Enabling organisations to share informations across departments, and automatically update this informations by tracking loyalty cards costumers, any time they make a purchase or request the companys service,for example (Cook, 2002).CRM systems helps companies to target theier segments, and also to analyse the information flow throughout the company. Making easier to identify its costumers needs, and more importantly, shows the best way to approach its most profitable clients. The more information a company holds about its costumers the best is the knowledge built, as it helps refines consumer segmentation and individual needs. In this particular case, data about costumers life-style is very helpful (Cook, 2002).Selling involves taking a proactive approach towards costumers, rather than a reactive. For instance, hotels can treat their most profitable business guests with special offers on their holidays. To finish the CRM framework, is essential to hold a service, providing an after-sales which should be measured to individual needs (Cook, 2002).2.7 Importance of performance measurement and a programme developmentYou cannot manage what you can not measure (Kelvin Anon, www.dti.gov.uk/quality/performance). According to Cook (2002) and Williams (2002) managers braves the way through cu stomer satisfaction measurement. A measurement programme starts with a clear definition of objectives, budget and timeline. Moreover, for this task to be performed and achieve its highest level of success, it is necessary the full commitment and willingness of top management to act on the results founded.A starting point should be to decide which part of customer satisfaction the company is most concerned to measure. Is also important to be aware that expectations and satisfaction levels can widely vary between the costumers of a company, therefore, the need to identify market segments. For example, the different needs of a businesses and tourists guest of a hotel. (Cook, 2002 Laws, 2004 Williams, 2002)According to Clark and Johnston (2005) performance measurement is costly. Few organisations have calculated just how much time and energy they spend on measuring their performance and its value for money relation. Two useful tests of a performance measure are, first, what is its purpo se and, second, what systems are in place to support or achieve that purpose. There are four main purposes or reasons to take measurement communication, motivation, control and improvement within the company.In the endless improvement process, measuring performance is an important task in order to identify and track progress in harmony with the organisations goals identify areas and opportunities for improvement and compare performance with internal and external standards (www.dti.gov.uk/quality/performance).According to the Department of Trade and Industry (DTI) the main reasons of measuring performance is To ensure customer requirements have been met To be able to set sensible objectives and comply with them To provide standards for establishing comparisons To provide visibility and a scoreboard for people to monitor their own performance level To highlight quality problems and determine areas for priority attention To provide feedback for driving the improvement effort (retrieved from ).2.8 The SERVQUAL modelThe Servqual model was developed by Parasuraman, Zeithaml and Berry, and has been one of the most popular service quality measurement instrument since then. The model was designed to measure those components of service that generate satisfaction within five dimensions (Ryan and Saleh,1991 Lee et al, 2004 Johns et al, 2004).Originally the researchers conducted a focus group studies with service providers and costumers, and as a result they came up with a list of ten determinants or dimensions of service quality which are reliability, responsiveness, competence, access, courtesy, communication, credibility, security, understanding/knowing the customer and tangibles, (Van Looy, B et al, 2003 Parasuraman et al, 1990 Ryan and Saleh,1991) which will be briefly explained bellowTangibles the appearance of physical facilities, the personnel, the tools or equipment used to provide the service and communication material. Guests of a hotel look for details of the building, web sites and reservation systems for instance.Reliability consistency of performance and dependability. This means that the firm performs the service correctly the first time and that the firm honours its promises.Responsiveness the willingness to help the customers and to provide prompt service.Competence knowledge, ability and possession of the right skills to perform the job.Access degree of approachability of service providers.Courtesy use of good manners, politeness, friendliness, smiling during the service.Communication ability to successfully communicate with costumers, keep them informed.Understanding degree of interest of employees to know the costumers needs and wants.Assurance knowledge and courtesy of employees and their ability to inspire trust and confidence.Empathy caring, individualized attention to customers. (Van Looy, B et al, 2003 Parasuraman et al, 1990 Ryan and Saleh,1991)Later on, in another attempt of improving their models they found a hi gh degree of correlation between communication, competence, courtesy, credibility and security. They therefore, merged them into one dimension, which they called assurance. Similarly they found a high correlation between access and understanding which they merged into empathy. Thus compacting the dimensions of service quality in five which are tangibles, reliability, responsiveness, assurance and empathy (Van Looy, B et al, 2003 Dabholkar et al 2000).The diagram bellow was originally made to suit the quality service measurement and customer satisfaction of a car repair garage. Which can be easily adapted to any other service organisation, surely including any hotels to be more precise.Source http//www.emeraldinsight.com/fig/0240221006003.pngThe SERVQUAL identified gaps between clients and organisations perceptions of attributes of service perceived, and also between customers expectations and perceptions of the service actually delivered (Ryan and Saleh,1991 Landrigan, 1999). This h as led to the well known and widely used 5 gaps of service qualityGap 1 Consumer expectations versus management perceptionCEOs and managers often fail to realise what consumers expect of a service and which features needs to be pursued to deliver a high-quality service. When management does not understand what their customers want, a gap 1 exists.Very often, organisations research to find out what are their markets needs and wants, but later can occur a divergence. When customer needs change but the product remains the same, gap 1 increases, as the service becomes less attractive (Parasuraman etal, 1991).Gap 2 Management perception versus service quality specificationsA gap 2 situation occurs when managers know their customers needs, but do not deliver it, either for unwillingness or incapability. Reasons for gap 2 to happen could be inadequate commitment to service quality, absence of goal setting, lack of perception of feasibility, and lack of standardization. The pursuit to achie ve short-term profits refrain companies to invest in equipments and people, causing service quality issues (Parasuraman etal, 1991).Gap3 Service quality specifications versus service deliveryGap 3 occurs when employees are unwilling or unable to deliver the appropriate service that was specified by management. In this case managers understand their customers needs, develop strategies and tasks to fulfil these needs, but in the moment of employee and costumer interaction it does not occur (Parasuraman etal, 1991).Gap 3 could be minimised through training and development, rewarding and internal marketing campaigns. Human resources department plays a major role in this task.Gap 4 Service delivery versus external communicationsA company creates gap 4 when it promises more than it can deliver, creating disappointments to its customers. Good sense and ethic when advertising should be primordial in any circumstances (Parasuraman etal, 1991). The image of a company that cheats or lies to it s costumers leads to an extremely bad reputation and negative word of mouth.Gap 5 Expected service versus perceived serviceLast but not least, gap 5 is a function of the other gaps. It pictures the difference among expected quality and perceived quality. If any of the other 4 gaps increases or decreases, gap 5 will follow it (Parasuraman etal, 1991).The diagram below represents the 5 gaps model of quality service.Source http//www.kmfadvance.com/mind_the_gap_files/image004.jpg2.9 Criticisms and limitations of the SERVQUALAccording to Oh (1997) the use of the difference of the scores contributes to discrepancies and errors, affecting the reliability and valididyt of the model. Such finding suggests that caution has to be taken when using the scores, and that additional work is essential to the development of measures of assessing the quality of services.In addition it is also noticeable that the SERVQUAL lacks in ties with statistics, economics and even psychology theories, therefore many arguments has formed a doubtful opinion regards its relaibility.2.10 Other service quality and costumer satisfaction measurement modelsObviously, the SERVQUAL is not the only model available to measure service quality and costumer satisfaction. Indeed, there is a range of variety of models out there. Some of them will be quickly explained in this study.2.10.1 The expectancy-disconfirmation model (EDM)The principle of expectancy theory was early stated by Lewin (1938) who hypothesized that individuals make decisions on the most appropriate action to take based on their expectations of the outcomes of that action. After being reviewed by many researchers, the model developed to two processes the formation of expectations and the disconfirmation/ confirmation of the expectations through performance evaluations (Oh, 1997 available at http//proquest.umi.com.newdc.oum.edu.my/pqdweb).Chapter IIIResearch Methodology3.1 Research ProcessThis research will include several components of di fferent character, promoting the approach to new problems, providing bibliographic survey, offering a selection of methodologies, as well as providing a critical analysis of results (Saunders, et al, 2003).In order for the aims of this research to be met it is necessary to gain an understanding of the practices of the service quality and customer satisfaction assessments applied within The Crowne Plaza Hotel (please see appendix II). This data will be given by one manager of the company, and will be adapted for a experimental application of the SERVQUAL model.The research and development will comprise creative work undertaken on a systematic basis in order to build knowledge accumulation, including not only the practices of the service quality and customer satisfaction assessments model researched but how would be applied within The Crowne Plaza Hotel in order to achieve competitive advantage and business success.The purpose of the literature review is theoretically discussing ideas that exist about the given topic. Data sources, such as library catalogues and indexes will be scanned for secondary data. This will produce a list of journals and newspaper articles, published books and internet sources (Saunders, et al, 2003).The secondary research will be complemented by primary research, through questionnaires and interviews with stakeholders of the organization in question.In case of interviews and questionnaires, the manager cooperating with this research will be fully informed about the, methods and intended possible uses of the research, what their participation in the project entails, the strict confidentiality, and academic purpose only (Bell, 1999).The project proposes to use analytical and theoretical framework, which extends descriptive research, making suggestions of why and how practices of the service quality and customer satisfaction assessments plays an important role in the competitive advantage, profitability and success of the firm (Yin, 2003). A method of both, quantitative and qualitative approach will be applied in order to examine values, attitudes and perceptions aspects of the research subject. (Flick, 2003)The departure point will be deductive, with the observation of the SERVQUAL model, fed by the organisation informations collected where conclusions will be critically evaluated against facts.Moreover, a phenomenological philosophy will be implemented, applying a case study approach, since this kind of research methodology is ideally suited to investigate the insights into the service quality and customer satisfaction in theory and practice (Yin, 2003).The data collected for this research was taken between the months of January, February and March 2009, it consists of 380 customer satisfaction surveys, applied by the hotel. This surveys were answered by guests, either on the check-out or on the hotel web site, after their stay in the hotel. At the time of the data collection, was common practice of the hotels front desk manager to put the weekly result together and send to all hotel departments, so they could have a picture of the guests feedback.3.2 Research TheoriesIn order to achieve this reaserch objectives it will be necessary to apply many reaserch theories that reinforces the reliability of it. The theories used in this research will be briefly explained one by one.3.2.1 Case studyAccording to Robson (2002178) cited by Saunders et al, 2003, p.93), 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 evedence. A case study approach is recommended to those reasearchs that essentially aims to explain why, how such phenomenon occurs, as well as in research that includes surveys (Saunders, 2003 Yin,2003).A case study is also a scientific way of explore an existing theory, which is one of the main objectives of this research, as is analysing the use of SERVQUAL (S aunders, 2003).3.2.2 Descriptive studiesIn order to have a clear picture of the scenario studied is essentially important to describe with accuration every data collected. As cited by Saunders et al (2003, p.97), Robson, 200259 describes the objective of descriptive research as to portray an accurate profile of persons, events or situations.3.2.3 Deductive methodComplementing the case study approach, a deductive method could be simply described as way of what we would think of a scientific research or theory, moving from theory to practice (Bailey, 2006 Cottrell, 2005 Saunders, 2003).It involves the development of a theory that is subjected to a rigorous test (Saunders, 2003, p. 86). The deductive method has many characteristics. First, there is the search to explain casual relationships between variables (Saunders, 2003, p. 86). Then, hypothesis development, followed by hypothesis testing, normally using quantitative data, but could also being backed up by qualitative data.3.2.4 Q uantitative dataOn the other hand quantitative research apply measurements and normally considered as better than qualitative research. Ghauri and Gronhaug (2005 p. 109) explains that the difference between quantitative and qualitative methods and approach is not just a question of quantification, but also a reflection of different perspectives on knowledge and research objectives.A method of qualitative approach will be applied in order to examine values, attitudes, and perceptions aspects of the research subject.3.2.5 Qualitative dataA narrative analysis process was implemented to interpret the data that were collected from the research portion of this project. Thomas (2003 p.1) argues that Qualitative methods involves a researcher describing kinds of characteristics of people and events without comparing events in terms of measurements or amounts3.3 Research DesignThe survey consists of a questionnaire of 44 questions (picked by the hotels own customer satisfaction survey) relate d to the quality of the service provided by the hotel. The guests (sample = 380) will answer the questions according to their perception of the service received, whilst the managers (sample = 4) will answer the questions according to what they expect the overall of the guests to answer.The answers will range between score 1 to score 5. Being 1 the best degree of satisfaction and 5 the worst degree of dissatisfaction, (Saleh and Ryan, 1991) having some variations as followsScore 1 very satisfied / definitely would / much more than you paid / much better / excellent / yesScore 2 somewhat satisfied / probably would / somewhat more than you paid / somewhat better / very goodScore 3 neither / might or might not / about what you paid / about the same / goodScore 4 somewhat dissatisfied / probably would not / somewhat lees than you