Вы находитесь на странице: 1из 21

Royal Holloway University of London

School of Management
MSc International Management
2010/2011
MN5113 International Marketing

Candidate Numbers:
0117903
0113097
0114499
0110444
0116559

Table of Contents

Executive Summary 2

Introduction 3
General Structure 5

Background 5

1
Evaluation of Topic 7

Research Method 9

Findings and Discussion 10

Conclusion 15
Recommendations 15
Limitations 16
Suggestions for Future Research 17

Bibliography 19

Executive Summary

The success of organizations is determined by various factors


such as consumer satisfaction. Thus, it is important that the level of
satisfaction experienced by consumers is measured in order to
determine how well an organization is providing for its consumers needs
and demands. The objective of the study is to measure consumer

1
satisfaction at British Airways. The company has undergone numerous
changes over the years, but research reveals that is one of the least
competitive airlines worldwide. Determining the level of consumer
satisfaction and preferences was deemed necessary in order to identify
what the problem areas are in business functions and processes and to
address these areas by pinpointing the various factors that increase
consumer satisfaction.
To fulfil the objective of the study, the quantitative method was
employed utilizing the Kano questionnaire model. The Kano
questionnaire was administered to thirty participants selected randomly
in order to determine what products or services influence consumer
satisfaction. The results of the study revealed that travel health and
safety and the quality of customer service are the primary concerns of
consumers. Although British Airways have products and services that
ensure travel health and safety in place, including customer service
strategies, the large interest of consumers on these features increase
the standard for the airline to improve its existing products and services.

Introduction

Commercial success for various organizations is determined by


many factors. However, one of the most important determinants of
success is consumer satisfaction. Consumer satisfaction may be the
result of good products and services rendered by organizations, but it
also results to other factors that create value for any organization. For

1
instance, consumer satisfaction also leads to consumer loyalty (Cochran
2003: 7-8) creating a solid consumer base that ensures long-term
profitability. The Marketing Science Institute discussed how consumer
satisfaction and profitability are important to organizations. “Corporate
strategies focused on customer satisfaction, revenue generation, and
service quality are in fact more profitable strategies” (Gronfeldt &
Strother 2006: 32).
Consumer loyalty consequently creates value for the company by
decreasing expenditure and opening various opportunities for progress
or improvement of existing services. “Evidence suggests that higher
customer satisfaction should increase customer loyalty, insulate a
company’s current market share from competitors, lower transaction
cost, reduce failure costs and thus the cost of attracting new customers,
and help build a firm’s reputation in the marketplace” (Gronfeldt &
Strother 2006: 32). Gaining consumer satisfaction and loyalty for
profitability, however, is not an easy task. Organizations must be able to
align its mission, vision, goals, and objectives, and the process or
principles through which it conducts business functions to the needs and
demands of consumers.
The desire of organizations to create value through consumer
satisfaction brings about the need for measuring consumer satisfaction.
Consumer satisfaction measurement “is justified by the customer-
orientation philosophy and the main principles of continuous
improvement of modern enterprises” (Grigoroudis & Siskos 2009: 1).
Researchers make use of various tools and strategies in order to
measure consumer satisfaction such as the KANO questionnaire. The
KANO questionnaire was designed is considered an important tool in
conducting research pertaining to marketing because it brings “a

1
different perspective to the analysis of product or service attributes
because it takes into consideration the asymmetrical and non-linear
relationship between performance and satisfaction” (Schnedlitz 2010:
80). The KANO questionnaire consists of parallel questions that
determine the feelings or behaviour of individuals toward specific
attributes if they were existent or non-existent in their experiences
(Smith 2009: 357).

General Structure
The primary objective of the research is to conduct an empirical
study that assesses consumer satisfaction and needs from a specific
organization, British Airways. The KANO questionnaire will be utilized in
order to determine what the company’s existing consumers find
satisfying or dissatisfying about British Airways’ services, and what
products or services they want or do not want from the company. The
results of the survey will be a comparison between demographical
features. Furthermore, the results of the study will be utilized in order to
create suggestions or recommendations for British Airways on how the
company should improve its products and services to increase
consumer satisfaction.

Background

British Airways prides itself in offering the company’s most


important service for its consumers, its Health and Well-being efforts.
With three specific areas of services: Medical Information, Well-being
Programme, and the Good Sleep Guide, British Airways is able to

1
observe Customer Care. Consumers will be able to communicate their
medical concerns with the crew of British Airways before departure and
shall expect to receive treatment and services in accordance to their
medical condition. The crew will also offer information and advice for
consumers before, during, and after their flights to ensure their well-
being, and a guide for good sleep will also be communicated in order to
help consumers combat jetlag (British Airways 2010b).
According to BA, “Customer satisfaction and the opinion of all our
stakeholders are key to defining our success” (British Airways 2010a).
The company utilized the Global Performance Monitor (GPM) in order to
measure customer satisfaction by determining the reaction and opinion
of the company’s consumers toward their experiences with British
Airways. The survey is being conducted on board and the company
claims that 570,000 individuals have participated to date.
The company claims that the results of the survey are utilized
efficiently in order to improve their products and services. Primary
concerns include considering the quality availability of meal options,
improvements to service routines on board, booking and check-in
options, kinds of services offered in airport lounges, the availability of
customized meal plans for non-English speaking customers, and the
enhancement of Customer Service Relationships (CSR), especially in
handling complaints from customers (British Airways 2010a).

Evaluation of Topic

1
The efforts of British Airways to improve its services for its
customers began in 1991 by hiring a management team that will oversee
CSR. According to Weiser, who then led customer management, “The
best way to pursue that goal… was by making quick amends when a
service failure occurred and by focusing the airline on spotting and
eliminating operational weaknesses that can cause service failures”
(Weiser 1995: 113). Since then, the company has earned a reputation
for effectively listening and addressing concerns.
British Airways has been receiving good feedback from its
consumers, as reported by Pine, the president for Strategic Horizons.
According to Pine, British Airways succeeded in improving customer
satisfaction by differentiating “its customers to identify those with the
highest potential value, builds extensive lifestyle profiles for each of
those customers, tracks their behaviour and needs, and then improves
its service based on what it has learned” (Pine 1996: 162). Although
British Airways was commended for employing impressive customer
services for its patrons, Pine (1996: 162), however, emphasized that the
company still lacks value-driven services to meet consumer needs and
the company is more invested in creating marketing opportunities to
expand its reach.
Gaining competitive advantage is also one of the primary concerns
that British Airways should focus on considering the continuous
evolution of the airline industry. Recent studies suggest that British
Airways is behind in terms of capacity to earn higher profit than other
airlines, which is supposed to create competitive advantage. When
compared with other airlines, British Airways earns 3 percent of profit
while Lufthansa earns 4 percent, Aer Lingus and Easyjet earn 6 percent,
and Ryanair gains 8 percent. The margin of profit earned by various

1
international airlines places British Airways at the bottom with the least
capacity of maintaining competitive advantage (Enz 2009: 117). For this
reason, British Airways should focus on creating value for the
organization in order to increase its profit and competitive advantage.
British Airways managed to make constant changes in the
company in previous years with the primary concern of creating
profitable business plans, creating efficiency Origin and Destination
(O&D) forecasts and competitive market prices, and evaluating the
quality and value that the company’s human capital is bringing in (Swift
2002: 168-169). The changes that were adopted in the company were
responses to various factors that affected change in British Airways. For
instance, Swift (2002: 169) argued that “the markets were changing with
more competition, more demands from customers, new technology
enabling new distribution models and the introduction of the no-frill
carriers”. Thus, British Airways, aside from improving business plans
and the human capital capacity, the company explored potential market
segments to expand its consumer base.
A primary consideration in improving its market segment and
expanding the company’s consumer base, as well is strengthen
consumer loyalty, is determining what kind of products and services are
appealing to them. Providing quality products and services that will
increase interest and commitment on the part of customers to establish
their partnership with the company will require intensive market
research. Research on a small-scale was the primary objective of the
study.

1
Research Method

The primary objective of the study was to determine the level of


consumer satisfaction exhibited by the customers of British Airways. By
determining the existing products and services that consumers like or
dislike and discovering other products and services that consumers
would want to receive from the company, British Airways will be able to
gain a fresh perspective on what practices and strategies to adopt in
order to improve its CSR and overall service and consequently increase
value to the company. Considering the primary objective of the study,
the quantitative method was applied making use of the KANO
questionnaire model.
The aim of a quantitative research is to generate knowledge about
a specific issue or phenomenon by utilizing various tools or techniques
for measurement. Research studies that are quantitative in nature
“generally follow a deductive approach to the generation of knowledge
using highly structure procedures and measuring instruments” (Goodwin
& Goodwin 1996: 33). To employ he quantitative approach in research,
the survey method was applied. The questionnaire was constructed by
following the KANO model.
The KANO model, invented by Noriaki Kano, was first utilized in
measuring quality of products and services in the automotive industry.
“The KANO model classifies product attributes and their importance
based on how they are perceived by customers and their effect on
Customer Service” (Chiaro, Heiss & Bucaria 2008: 252). Furthermore,
the KANO method is used to “determine the importance of customer
needs… in satisfying customer needs, a product capability or feature

1
can be characterized into four groups” (Rafinejad 2007: 76). The four
categories are the following:
1. Must have – products or services that customers think to be
important or essential in inciting customer satisfaction and high
quality service
2. Linear satisfaction – improvement in products or services that
customers think to be important or essential in inciting customer
satisfaction and high quality service
3. Delighter – products or services that customers expect
4. Indifferent – products or services that customers think to be
unimportant
Source: Rafinejad, 2007
In the KANO questionnaire for the study, ten questions were
created with functional and dysfunctional qualities. The respondents
were supposed to rate, from one to five, each question based on their
feelings or opinions: (1) I like it that way, (2) It must be that way, (3) I am
neutral, (4) I can live with it that way, and (5) I dislike it that way.
The respondents consist of thirty male and female individuals,
twenty-one years of age and above, selected randomly by availability
and their experience with British Airways. Prior to the administration of
the survey, the respondents were informed about the goals and
objectives of the study, and their consent was asked, assuring them of
the confidentiality of the reports. The survey was conducted in one
week.

Findings and Discussion

1
The results of the survey conveyed information about the products
and services offered by British Airways that consumers found important
and should be improved by the company. Table 1 below represents the
initial data gathered by tabulating the consumer responses on the
functional and dysfunctional features of the ten questions in the survey.
The results are expresses in percentages.

Where A: Attractive
Customer Requirements A M O R Q I Total Grade
1. Online reservations and customer
13.3 80.0 0.0 0.0 0.0 6.7 100.0 M
service
2. Customer service in various channels
3.3 90.0 0.0 0.0 0.0 6.7 100.0 M
(landline, mobile phone, online, etc.)
3. Customizable services 50.0 30.0 0.0 0.0 0.0 20.0 100.0 A
4. Health and safety insurance 56.7 43.3 0.0 0.0 0.0 0.0 100.0 A
5. Health and safety information 80.0 20.0 0.0 0.0 0.0 0.0 100.0 A
6. Added services at airport lounges 20.0 26.7 46.7 0.0 0.0 6.7 100.0 O
7. Rewards and compensation for bad
quality of services reported through 6.7 76.7 16.7 0.0 0.0 0.0 100.0 M
complaints, etc.
8. Sales and promotions 0.0 13.3 86.7 0.0 0.0 0.0 100.0 O
9. Partnership with other establishments
for royalty services offered to British 20.0 6.7 13.3 0.0 0.0 60.0 100.0 I
Airways customers
10. British Airways contact customers
for new information, package deals, 16.7 30.0 0.0 0.0 0.0 53.3 100.0 I
promos, discounts, etc.
M: Must-be
O: One-dimensional
R: Reverse
Q: Questionable Result
I: Indifferent

Table 1. Evaluation of Customer Requirements

Satisfaction Dissatisfaction
0.13 0.80
0.03 0.90

1
0.50 0.30
0.57 0.43
0.80 0.20
0.67 0.73
0.23 0.93
0.87 1.00
0.33 0.20
0.17 0.30
The table to the right shows results of Kano formula for satisfaction and
dissatisfaction of consumers, which were tabulated from the previous
table. The formulae used to calculate satisfaction and dissatisfaction are
A+OA+O+M+I and O+MA+O+M+I respectively. The questionnaire with
the corresponding questions is attached at the back of the report

The diagram below shows these results plotted against each other.

1
It is important to note, that because the response received
between the two genders is so similar, the results will be concluded as
total customer satisfaction, not gender divided.
Based on the results of the survey as presented in Table 1, most
of the customer requirements are attractive and considered must-haves
as products and services offered by the British Airways, which the
company must be able to work on in order to satisfy its consumers.
Consumers are attracted by products and services that have something
to do with their comfort, health and safety. The responses revealed that
the availability of customizable services such as meal plans and film
options, health and safety insurance offers, and health and safety
information are attractive. Thus, products and services that ensure their

1
travel safety and their comfort, especially in terms of receiving services
based on their preferences, generally attract consumers.
The services that are considered must haves by the consumers
have something to do with customer services. According to the
respondents, British Airways must be able to provide online ticket
reservations and customer services online, have customer service
representatives available in various channels, such as landlines, mobile
phone, and the Internet among others, and receive rewards or
compensation for receiving bad or unsatisfactory products and services
at any time. The three requirements are considered as standards set
that the consumers trust British Airways should be able to offer and
implement.
The respondents have also expressed some services that they
believe will increase the value of the company. These services or
customer requirements, also known as exciters, include added services
at airport lounges and availability of sales and promotions. Customers
are looking forward to receiving supreme services at airport lounges,
including added services in the form of food stores, gift shops,
entertainment hubs, and so on. The incorporation of these services to
the existing services offered by British Airways is expected to add more
value to the company, in terms of expanding its consumer base, as they
are the kinds of services that consumers are looking forward to
experiencing.
The kinds of services that consumers are last interested in has
something to do with British Airways’ partner establishments and
communication between the airline and its consumers in terms of
sending new information about the company. The consumers were
indifferent about the service involving the company’s partner

1
establishments. Airlines usually establish partnerships with other
companies, such as hotels, restaurants, or food products for promotional
purposes. Also, companies advertise by communicating to their
consumers by various channels, such as phones, e-mails, and letters.
News includes updates about current travel packages, tickets on sale,
new services, and so on. However, consumers have expressed their
disinterest in such kind of services.
Although partnerships and communication for marketing purposes
may be important for British Airways, the results of the survey reveal that
it does not add much value to the company. Consumers are more
interested in other services that involve their comfort, health and safety,
and the quality of customer services experienced with the company.

Conclusion
Recommendations
Based on the results of the study, improving the company’s current
products and services is highly recommended. The standards and
expectations gleaned from the results of the survey revealed that
consumer satisfaction is low and that British Airways need to exert
efforts in order to improve its services. Consumers have high
expectations, especially in terms of their travel health and safety, as well
as comfort. Receiving proper customer service is also one of the primary
concerns of the consumers.

1
A major recommendation is improving British Airways CSR
services by taking advantage of technology and social media.
Nowadays, communication is all about wireless mobile networking.
Individuals rely on their mobile phones, PDAs, laptops or netbooks, and
other wireless computing devices in order to stay connected to the World
Wide Web for easy access to needed information. Social media is the
new trend in online marketing and customer services. Various social
networking sites, blogs, and micro-blogs should be taken advantage of
not only for online marketing, but also for receiving customer feedback,
recommendations, or suggestions, and then responding to them. British
Airways should also look at creating software or applications for mobile
computing devices. For instance, the company can establish partnership
with software and application developers in order to create an
application downloadable to mobile phones, PDAs, and computers.
To address the concern of consumers about their health, safety,
and comfort, British Airways should be able to expand its existing
services. It should be incorporated to the consumer’s entire travel
experience. Apart from briefing passengers about the flight, emergency
routines, etc., the airline may provide instructional videos that the
passengers can white on board. The airline should also provide healthy
meals for passengers and allow flexible food choices especially for
passengers with specific medical conditions, such as allergies.
Experiencing safety during the flight also depends on how
accommodating the staff is. Human resources training may address this
issue.

1
Limitations
The limitations in the study are founded on the limitations of the
survey. The survey questions required specificity in terms of mentioning
the kinds of services that had to be evaluated during research. Since the
services that airlines can and should offer to their consumers are
extensive, they cannot be covered just in a single questionnaire with ten
to twenty questions. Evaluating the quality of existing products and
services and the level of consumer satisfaction will also warrant an
extensive research study, perhaps not only through a quantitative survey
or questionnaire method, but also through the use of other tools,
techniques, or methods. The qualitative method may also be applied in
order to explore the issues further.
Another limitation is the accuracy of responses by the participants.
Without other opportunities for validating the results, for instance through
interviews, the accuracy of the responses may be affected, also
influencing the results of the survey. Participant responses may also be
affected by bias based on their experiences. For instance, participants
who have so far good experiences with the company may respond
positively, but those who have bad experiences may not be able to
respond to the questions truthfully.
The number of respondents may also be a limitation. In the survey,
thirty people participated. The difference between the number of
respondents and the total number of customers that avail the products
and services offered by British Airways is large. Thus, the participant
responses do not largely reflect the perspectives, ideas, and
experiences of the majority of British Airways’ consumer base. The
results of the survey may not be entirely accurate.

1
Suggestions for Future Research
For future research, studies may be conducted extensively by
expanding on the coverage of the research. In the survey questionnaire,
only ten questions with functional and dysfunctional characteristics were
included. As previously discussed, the issues covered in the survey
were limited compared to the scope of products and services that British
Airways offers for its consumers and the prospective products and
services that the company may be able to adopt. Furthermore, the
research study may be conducted by mixing the qualitative and
quantitative methods of research. By combining the two research
methods, referring to the qualitative data may validate the quantitative
data, and the availability of comprehensive information will make the
research more valuable.
Future studies may also focus on comparing the products and
services offered by British Airways with those offered by other airlines.
The study may focus on comparing the value and competitive advantage
of British Airways with those of other airlines, and determining the level
of satisfaction of consumers for various airlines.
Considering other factors in evaluating company performance and
consumer satisfaction, such as the effects of globalization, the increase
of oil, and the continued development of technology may be included in
the research. The aforementioned factors are major issues that influence
the quality of services that airlines will be able to offer, thus, it is
important that these considerations be included in assessing the issues
about airline performance and consumer satisfaction.
The most notable suggestion, which can be concluded from our results,
is the classification of correspondents. In our case, we chose males and
females as study groups. Unfortunately, the results were too similar to
make a comparison between them. For the future research, a

1
comparison between age groups should be considered, as we believe
that people at different ages have far more differentiated needs
specifically towards BA services than genders do. A testing
questionnaire to verify this should be distributed first. If the results come
out to be similar to expectations, then all the questionnaires could be
distributed for the research.

1
Bibliography

British Airways. 2010a. Customer satisfaction. [Online].


Available at:
http://www.britishairways.com/travel/crcusthome/public/en_gb
Accessed: 13 Nov 2010.

British Airways. 2010b. Health and well-being. [Online].


Available at: http://www.britishairways.com/travel/health/public/en_gb
Accessed: 13 Nov 2010.

Chiaro, D., Heiss, C. & Bucaria, C. 2008. Between text and image:
Updating research in screen translation. Oxford, UK: John Benjamins
Publishing Company.

Cochran, C. 2003. Customer satisfaction: Tools, techniques, and


formulas for success. Boca Raton, Paton Professional.

Enz, C. A. 2009. Hospitality strategic management: concepts and cases.


Hoboken, John Wiley and Sons.

Goodwin, W. L. & Goodwin, L. D. 1996. Understanding quantitative and


qualitative research in early childhood education. New York, NY:
Teachers College Press. (Google books)

Grigoroudis, E. & Siskos, Y. 2009. Customer satisfaction evaluation:


Methods for measuring and implementing service quality. Springer.

Gronfeldt, S. & Strother, J. B. 2006. Service leadership: The quest for


competitive advantage. Thousand Oaks, Sage.

Matzler, K. et al. 1992. How to delight your customers. Journal of


Product & Brand Management, Vol. 5 Iss. 2, 6-18.

Matzler, K. et. al. 2003. The asymmetric relationship between attribute-


level performance and overall satisfaction: A reconsideration of the
importance-performance analysis. Industrial Marketing Management,
Vol. 33, Iss. 4, 271-277.

1
Pine, B. J. II. 1996. Customer service on British Airways. Harvard
Business Review, Vol. 74, Iss. 1, 162-166.

Rafinejad, D. 2007. Innovation, product development and


commercialization: case studies and key practices for market leadership.
J. Ross Publishing.

Schnedlitz, P. et al. 2010. European retail research. Springer.

Smith, M. J. 2009. Human interface and the management of information.


Springer.

Swift, A. 2002. Renaissance: A revenue management change


programme at British Airways. Journal of Revenue and Pricing
Management, Vol. 1, No. 2., 168-173.

Weiser, C. R. 1995. Championing the customer. Harvard Business


Review, Vol. 73, Iss. 6, 113.