EVALUATION OF CUSTOMER SATISFACTION A CASE STUDY ON CUSTOMER CARE SERVICE AT THAI NGUYEN MOTOR TRADE AND SERVICE LIMITED LIABILITY COMPANY

A CASE STUDY ON A CASE STUDY ON CUSTOMER CARE SERVICE AT THAI NGUYEN MOTOR TRADE CUSTOMER CARE SERVICE AT THAI NGUYEN MOTOR TRADE AND SERVICE LIMITED LIABILITY AND SERVICE LIMITED LIABIL

A CASE STUDY ON

A CASE STUDY ON CUSTOMER CARE SERVICE AT THAI NGUYEN MOTOR TRADE CUSTOMER CARE SERVICE AT THAI NGUYEN MOTOR TRADE

AND SERVICE LIMITED LIABILITY AND SERVICE LIMITED LIABILITY COMPANY COMPANY

A Research Proposal Presented to the College of Business and Accountancy Central Philippine University, Philippines

In Collaboration with Thai Nguyen University of

Thai Nguyen University of Economics and Business Administration, Vietnam Economics and Business Administration, Vietnam

 NGUYEN THI TO UYE NGUYEN THI TO UYENN

October 2013

TABLE OF CONTENTS

11

1.3

1.3 Theoretical Theoretical Framework  Framework 

1.4 Conceptual 1.4 Conceptual Framework  Framework  1.5 The Operational Definitions 1.6 Significance of the Study

1.7 Scope and 1.7 Scope and Delimitation Delimitation CHAPTER 2 REVIEW OF RELATED LITERATURE 2.1 Theoretical review

2.1.1 Define of customer  2.1.2 Customer satisfaction    2.1.2.1 Customer satisfaction 2.1.2.2 Customer care

2.1.4.3

2.1.4.3 Relationship between cu Relationship between customer care and stomer care and customer satisfaction customer satisfaction

2.1.5

2.1.5 Relationship between cus Relationship between customer care and custo tomer care and customer satisfaction mer satisfaction

2.1.5.1 Customer care as a means of customer satisfaction

2.1.5.2 Fostering customer opinions as a means 2.1.5.2 Fostering customer opinions as a means of customer Satisfaction of customer Satisfaction 2.1.5.3 Customer care as a means of business survival 

2.1.6 Customer satisfaction measurement and model 2.1.6 Customer satisfaction measurement and model reasearc reasearch h

2.1.6.1

2.1.6.1 Customer Customer satisfaction satisfaction measurement  measurement   

2.1.6.2 Model reasearch of customer satisfaction measurement 

2.2

2.2 Related Related empirical empirical studies studies

CHAPTER CHAPTER 3:.METHODOLO 3:.METHODOLOGY GY 3.1.Researc

3.1.Research h Design Design

3.2 Population, Sample Size and 3.2 Population, Sample Size and Sampling Technique Sampling Technique 3.3 Research Instrument

3.4 Data 3.4 Data Gathering Procedure Gathering Procedure

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CHAPTER 1 THE PROBLEM AND ITS SETTING 1.1 Background and Rationale of the Study

Actually, in the competitive environment, customers are the most important factor of theenterprise’s existence What enterprise gains the attention and the loyalty of the customers will havesus

sustaitainabnable le devdeveloelopmepment nt ThThe e bubusinsiness ess strstrategategies ies redredirecirect t to to conconsumsumers ers are are becbecomioming ng leadleadinging

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important strategies of the business How to meet the customer’s needs as well as giving customersthe highest satisfaction are always the problem that the enterprise try to do with all their abilities.Therefore, the research on customer’s satisfaction with the products of the enterprise is an importanttask to carry out continuous and regular to be able to respond promptly to customer needs So, theenterprise can conquer the customers by makin

enterprise can conquer the customers by making them satisfied when using g them satisfied when using the enterprise product.the enterprise product

Along with the process of the liberalization trade which is taking place aggressive around the world.The enterprise recognize that the customers’s satisfaction strategic weapon which bring to theenterprise profits and market share Compared with one customer is satistified, the capacity of acustomer is very pleased with becoming a loyal customer and continue to buy or introduce the product

 product to to the the other other person person will will be be 6 6 times times higher higher The The loyalty loyalty increase increase 5% 5% like like the the enterprise’senterprise’s benefit

 benefit increase increase 25%-85% 25%-85% So, So, the the evaluation evaluation of of the the customer’s customer’s satisfaction satisfaction is is very very important important totoevery enterprises Surveys and assessments will help enterprise better understand their customers,

what they satisfied or not satisfied with the product, that helps the enterprise have the sustainabledevelopment

Honda Thai Nguyen also pays lots of attention to the customers This one was confirmed by: “Sinceits establishment in 1996 , Honda Thai Nguyen has operated on the principle of the development of the company has always been associated with the development of contribution community HondaThai Nguyen strives to provide quality products globally with reasonable prices for the highestsatisfaction of Thai Nguyen’s customers We have expanded production output and productioncapacit

capacity y , , develodevelop p trainitraining, technolong, technology gy transftransfer er , , impleimplementatimentation on of localizatioof localization n , , exporexport t and manyand manyother activities to exceed the expectations of customers and contribute to the development of industry in the country.” Therefore, understanding and satisfying customer needs is especiallyessential in the context of increasing current

During the process of internships in HondaThai Nguyen Service and Trade, Co,Ltd., I had anopportunities to study on the evaluation of quality customer care services The evaluation of the

cuscustomtomers’ers’s s satsatisfisfactaction ion on on the the cuscustomtomer care ser care servervice is vice is very imery imporportantant and bet and being ting the tohe topp priority

 priority of of the the company company So So I I was was especially especially focused focused on on the the customer customer care, care, aiming aiming to to please please thethe

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customer That why I selected the topic: “Evaluating customer’s satisfaction with the customer careservices HondaThai Nguyen Service and Trade,

services HondaThai Nguyen Service and Trade, Co,Ltd.” as my subject.Co,Ltd.” as my subject

1.2 Objectives General objective

Topic evaluate customer ‘s satisfaction with customer care services in Thai Nguyen MotorbikeService and Trade, Co,Ltd Performing this subject with a title of better caring customers because of hoping the outputs of this study may be useful for the enterprise to improve the management, thequality of services to help customer satisfaction in the future

    Specific objective  Specific objectivess

Specifically, this study aims to:

-

- Review of the theoretical basis Review of the theoretical basis for customer care and cufor customer care and customer’s satisfaction to service qstomer’s satisfaction to service quality.uality

- Evaluation and analysis of factors affecting customer satisfaction in Thai Nguyen MotorbikeService and Trade, Co,Ltd

- Proposing some solutions to promote the strengths and overcome weaknesses to improve thequality of customer care service of moto Thai Nguyen trading and service company limited

1.3 Theoretical Framework   Phan nay cho vao chuong 2 thi hop ly hon.

Con khung ly thuyet em nen ve thanh so do, tong hop lai moi quan he giua nhung van de ly thuyet lien quan den van de nghien cuu va moi quan he giua chung!

P

R  O C E S S

Research questions

* How is customer careservice provided tocustomers

* How are customer’srceptions of com’sservices

* What is the impact of understaslong company

Figure 1.Conceptual Framework of the Study

FrFrom om ththat at shshe e wawant nt to to popoinint t ouout t ththe e reremamainined ed prproboblelems ms anand d lilimimitattatioions ns of of asassesess ss cucuststomomer er satisfaction in Thai Nguyen Motorbike Service and Trade,Co.,Ltd, and proposes recommendationsand solutions to improve the quality

and solutions to improve the quality service company.service company

  1.5 The Operational Definitions

- Age:refers to years of living

- Sex: refer to know the employees male or female

-

- Emp Empoly olyee ee:: AnAn individualindividual whowho worksworks part-time part-time or or fufullll-ti-time me unundeder r aa concontractract t of of empemployloymenment,t,  whether oral or written, express or implied, and has recognized

whether oral or written, express or implied, and has recognized rightsrights andand dutiesduties Also Also calledcalled  worker worker 

- Customer: An individual or business that purchases the goods or services produced by a business.The customer is the end goal of businesses, since it is the customer who pays for supply and createsdemand Businesses will often compete through advertisements or sales in order to attract a larger customer base

- Eduacation: Education in its general sense is a form of Education in its general sense is a form of   learninglearning in which thein which the knowledgeknowledge,, skills,skills,  and

and habitshabits of a group of people are transferred from one generation to the next through teaching,of a group of people are transferred from one generation to the next through teaching,training, or research

- Address:   is a collection of information, presented in a mostly fixed format, used for describing thelocation of a building, apartment, or other structure or a plot of land, generally using

location of a building, apartment, or other structure or a plot of land, generally using  political political boundaries

 boundaries andand streetstreet names aas s rreeffeerreenncceess, , aalloonng g wwiitth h ootthheer r iiddeennttiiffiieerrs s ssuucchhas

as househouse or or apartmentapartment numbers.numbers

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- Service: Any activity or benifit that one party can offer to another that is assentially intangible anddoes not result in the

does not result in the ownership of anything.ownership of anything

- Satisfaction is as is as a a judgjudgment following a ment following a consuconsumptiomption n experexperience-iience-it t is the is the consuconsumer’s judgmenmer’s judgmenttthat a product provided (or is providing) a pleasureable level of consumption-related fulfillment(adapted from Oliver 1997)

- Customer satisfaction (CSAT): is a measure of the degree is a measure of the degree to which a product or service meets to which a product or service meets thethecustomer's expectations

- Care service:   is the provision of serviceservice toto customerscustomers before, during and after a purchasebefore, during and after a purchase

Tangibles: external representation of the physical facilities, equipment, employees and materials,information tools

Reliability:ability to make appropriate service and exactly what commitment, promise

Responsiveness:the desired level and the willing of serving our customers in a timely manner. Assurance: knowledge, expertise and elegant style of service staff, the ability to trust customers. Empathy:showing the kindnesses, the concerns to the individual client

1.6 Significance of the study

The study will help to build on the researcher’s knowledge and understanding of the study variables

It will also help the researcher to gain more skills of conducting research and this will be important

to the researcher while in office or pursuing further studies It will also help the researcher toappreciate the concept of customer care services

The study findings will help to identify and highlight the weaknesses in customer care of company

and how customer care influences customer satisfaction and how to design an appropriate customer care service programme This will help company to recover its customers after implementing the

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necessary customer care services and it will be able to compete fully with other company both localand international.

The study findings will help to build on the body of the existing literature and knowledge This willhelp to provide reference for future researchers and they will be able to carry out research with easesince this study will provide secondary data to the researchers

since this study will provide secondary data to the researchers.  

The study is also expected to add knowledge on the existing knowledge about customer careservices to the public This will help the public recognize and appreciate customer care services The public

 public especially especially customers customers of of the the company company will will be be able able recognize recognize certain certain care care services services they they arearesupposed to receive from service provide

1.7 Scope and delimitation

 Content scope:The content focuses on issues surrounding "customer satisfaction with The content focuses on issues surrounding "customer satisfaction with customer carecustomer careservices of Honda in trade limited company and service motorcycles Thai Nguyen A back up plan

to the difficulties in promoting business service quality and customer care in companies

Time scope: Research time Secondary data from 2010-2013 company Primary data collected duringthe month 11/2013

 space  space scope: scope: ResearResearch space ch space at Limited comat Limited company servpany services commices commercial and motoercial and motorcyclercycles Thais Thai Nguyen

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CHAPTER 2: REVIEW OF RELATED LITERATURE

2.1 Theoretical review 2.1 Theoretical review

We define customer satisfaction, discuss the importance of customer satisfaction in relationship withretention and loyalty and present a short review of measurement tools of customer satisfaction

2.1.1 Define of customer 

A customer (sometimes known as a client, buyer, or purchaser) is the recipient of a good,service, product, or idea, obtained from a seller, vendor, or supplier for a monetary or other valuableconsideration.[1][2] Customers are generally categorized into two types:

An intermediate customer or trade customer (more informally: "the trade") who is a dealer that purchases goods for re-sale.[3][1]

An ultimate customer who does not in turn re-sell the things bought but either passes them tothe consumer or actually is the consumer.[3][1]

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A customer may or may not also be a consumer, but the two notions are distinct, even thoughthe terms are commonly confused.[3][1] A customer purchases goods; a consumer uses them.[4][5]

An ultimate customer may be a consumer as well, but just as equally may have purchased items for someone else to consume An intermediate customer is not a consumer at all.[3][1] The situation issomewhat complicated in that ultimate

somewhat complicated in that ultimate customers of so-called industrial goods and services (who arecustomers of so-called industrial goods and services (who areentities such as government bodies, manufacturers, and educational and medical institutions) either themselves use up the goods and services that they buy, or incorporate them into other finished products, and

 products, and so are so are technically technically consumers, too consumers, too However, they However, they are are rarely rarely called called that, but that, but are are rather rather called industrial customers or business-to-business customers.[3] Similarly, customers who buyservices rather than goods are rarely called consumers.[1]

Six Sigma doctrine places (active) customers in opposition to two other classes of people: customers and non-customers Whilst customers have actively dealt with a business within a particular

not- particular recent period recent period that depends that depends from the from the product sold, not-customers product sold, not-customers are are either past either past customerscustomerswho are no longer customers or potential customers who choose to do business with the competition,and non-customers are people who are active in a different market segment entirely Geoff Tennant,

a Six Sigma consultant from the United Kingdom, uses the following analogy to explain thedifference: A supermarket's customer is the person buying milk at that supermarket; a not-customer 

is buying milk from a competing supermarket, whereas a non-customer doesn't buy milk fromsupermarkets at all but rather "has milk delivered to the door in the traditional British way".[6]

Tennant also categorizes customers another way, that is employed outwith the fields of mar

marketketinging.[7.[7] ] WhiWhilst lst the the intintermermediediate/ate/ultultimatimate e catcategoegorizarizatiotion n is is useused d by by marmarketketersers, , marmarketketregula

regulation, and tion, and econoeconomistsmists, , in the in the world of world of custocustomer service customers are mer service customers are categocategorized more rized more oftenofteninto two classes:

An external customer of an organization is a customer who is not directly connected to thatorganization.[7][8]

An internal customer is a customer who is directly connected to an organization, and is usually(bu

(but t not not necnecessessarilarily) y) intinternernal al to to the the orgorganianizatization on IntInternernal al cuscustomtomers ers are are usuusuallally y stastakehkeholdoldersers,,

employees, or shareholders, but the definition also encompasses creditors and external regulators.[9][8]

The notion of an internal customer — before the introduction of which external customerswere, simply, customers — was popularized by quality management writer Joseph M Juran, whointroduced it in the fourth edition of his Handbook (Juran 1988).[10][11][12] It has since gainedwide acceptance in the literature on total quality management and service marketing;[10] and thecustomer satisfaction of internal customers is nowadays recognized by many organizations as a precursor

 precursor to, to, and and prerequisite prerequisite for, for, external external customer customer satisfaction, satisfaction, with with authors authors such such as as Tansuhaj,Tansuhaj,Randall & McCullough 1991 arguing that service organizations that design products for internalcustomer satisfaction are better able to satisfy the needs of external customers.[13]

2.1.2 Customer satisfaction 2.1.2.1 Customer satisfaction:

Those who buy the goods or services provided by companies are customers In other words, acustomer is a stakeholder of an organization who provides payment in exchange for the offer  provided to

 provided to him him by by the the organization organization with with the the aim aim of of fulfilling fulfilling a a need need and and to to maximise maximise satisfaction.satisfaction.Sometimes the term customer and consumer are confusing A customer can be a consumer, but a

consumer may not necessarily be a customer Another author explained this difference I.e acustomer is the person who does the buying of the products and the consumer is the person whoultimately consumes the product (Solomon, 2009)

When a consumer/customer is contented with either the product or services it is termed satisfaction.Sat

Satisfisfactaction ion can can alsalso o be be a a perpersonson’s ’s feelfeelingings s of of plepleasuasure re or or disdisappappoinointmetment nt thathat t resresultults s frofrommcomparing a product’s perceived performance or outcome with their expectations (Kotler & Keller,2009) As a matter of fact, satisfaction could be the pleasure derived by someone from theconsumption of goods or services offered by another person or group of people; or it can be the state

of being

of being happhappy y with a with a situatsituation.ion.SatisfaSatisfaction varies from one ction varies from one persoperson to n to anothanother er becaubecause it se it is utility.is utility

“One man’s meal is another man’s poison,” an old adage stated describing utility; thus highlighting

the fact that it is sometimes very difficult to satisfy everybody or to determine satisfaction amonggroup of individuals.

Client happiness, which is a sign of customer satisfaction, is and has always been the most essentialthing for any organization Customer satisfaction is defined by one author as “the consumer’sresponse to the evaluation of the perceived discrepancy between prior expectations and the actual performance

 performance of of the the product product or or service service as as perceived perceived after after its its consumption” consumption” (Tse (Tse & & Wilton, Wilton, 1988,)1988,)hence considering satisfaction as an overall post-purchase evaluation by the consumer” (Fornell,1992,) Some authors stated that there is no specific definition of customer satisfaction, and after their studies of several definitions they defined customer satisfaction as “customer satisfactionisiden

isidentified by a tified by a resporesponse (cognitnse (cognitive or ive or affectiaffective) that ve) that pertaipertains to ns to a a particparticular focus (i.e ular focus (i.e a purchasea purchaseex

expeperirienence ce anand/d/or or ththe e asassosociaciateted d prprododucuct) t) anand d ococcucurs rs at at a a cecertrtain ain titime me (i(i.e.e.p.posost-t-pupurchrchasase,e, post.consumption)” (Giese

 post.consumption)” (Giese & & Cote, Cote, 2000) 2000) This This definition definition issupported issupported by by some some other other authors, authors, whowhothink that consumer

think that consumer’s level ’s level of satisfactiof satisfaction is.determion is.determined by ned by his or his or her cumulativher cumulative e experiexperience at ence at thethe point of contact with the supplier 

(Sureshchander et (Sureshchander et al., 2002al., 2002) It ) It is factual is factual that, there that, there is nis no spo specific definition ecific definition ofcustomer ofcustomer satisfactionsatisfactionsince as the years passes, different authors come up with different definitions Customer satisfactionhas also been defined by another author as the extent to which a product’s perceived performancematches a buyer’s expectations (Kotler et al., 2002) According to Schiffman & Karun (2004)Customer satisfaction is defined as “the individual’s perception of the performance of the products

or services in relation to his or her expectations” (Schiffman & Karun 2004) In a nutshell,customer sat

satisfisfactaction ion coucould ld be be the the plepleasuasure re obtobtainained ed frofrom m conconsumsuming ing an an offoffer.Ier.Impomportanrtance ce of of cuscustomtomer er satisfaction

Sometimes companies are misguidSometimes companies are misguided by the notion that custoed by the notion that customers depend on them mers depend on them The truth of theThe truth of thematter is that we very m

matter is that we very much so depenuch so depend on them d on them Many researchers and Many researchers and academia have highlightedacademia have highlightedthe importance of customers in today’s market

The level of satisfactiThe level of satisfaction a on a custocustomer has with a mer has with a compcompany has profounany has profound effects d effects StudiStudies have foundes have foundthat the level of customer’s satisfaction has a positive effect on profitability:

A totally satisfied customer contributes 2.6 times as much revenue to a company as a some whatsatisfied customer.

A totally satisfied customer contributes 17 times as much revenue as a somewhat dissatisfiedcustomer

A totally dissatisfied customer decreases revenue at a rate equal to 18 times what a totally satisfiedcustomer contributes to a company

Research has shown that when a person is satisfied with a company or service they are likely toshare their experience with other people to the order of perhaps five or six people.However,dissatisfied customers are likely to tell

dissatisfied customers are likely to tell another ten people of their unfortunate experience.With another ten people of their unfortunate experience.With socialsocialmedia readily available for consumers to tell their story to all of those online, you can easily go toTwitter or Facebook and read about someone’s experience with a company or service

However, merely focusing solely on customer satisfaction has its drawbacks in the marketplace aswel

well l For thoFor those compse companianies that focus onles that focus only y on custon customeomer r satsatisfisfactiaction run a on run a real risk a real risk a faifailinling tog todiffere

differentiate their brand from otherntiate their brand from others s In order to achieve long-term susIn order to achieve long-term sustainabtainability companility companies musties mustseek to establish ties of loyalty with consumers that are strong enough to ward off the advances of compe

competitorstitors CreatiCreating loyalty amonng loyalty among customerg customers can s can help the companhelp the company to y to increaincrease purchasese purchases of s of existing products, charge premium prices for appreciation of your added-value services, and create positive

 positive word-of-mouth word-of-mouth promotion promotion for for your your company, company, which which is is the the core core marketing marketing objective objective for for companies

CustoCustomer loyalty is much harder to mer loyalty is much harder to obtaiobtain than satisfaction than satisfaction n Even thougEven though customerh customers are s are satissatisfiedfiedwi

with th ththe e cocompmpanany y ththere ere are are seseveveraral l facfactotors rs ththat at cocoululd d caucause se ththe e cucuststomomer er to to dedefefect ct to to ththeecompe

competitiontition, such as finding a better value or the , such as finding a better value or the compcompetitor is more convenetitor is more convenient ient With that said,With that said,havin

having high levels of customeg high levels of customer satisfactir satisfaction does not always lead to customeon does not always lead to customer loyalty r loyalty HoweHowever, aver, acompany cannot achieve customer loyalty without having customer satisfaction is Thus, though

customer satisfaction does not guarantee the repurchase from a company but it does play a veryimp

importortant ant rolrole e in in achachievieving ing cuscustomtomer er loyloyaltalty y ConConducductinting g cuscustomtomer er satsatisfisfactiaction on resresearcearch h wilwilll

 provide  provide your your company company with with the the necessary necessary insight insight it it needs needs to to make make informed informed decisions decisions in in order order totoretain and increase your customer base and improve customer relationships

2.1.2.2 Customer care

Customer care service :Kotler (1998) described customer care as a service in any activity

or benefit that one party can offer to another that is essentially intangible and does not result

in the ownership of anything According to Ngahu (2001), customer care can be defined asany good service rendered to a customer in the process of selling a product or service Ngahufurther explains customer care as the “activities” which are offered to sale or are provided inconnection with the sale of goods

According to Balunywa (1995) any service rendered to a customer is the one referred to

as customer care Indeed so many scholars have attempted to described customer care but thegist of the whole concept of customer care from such definition above is that any one in business must not only concentrate

 business must not only concentrate on the product he on the product he or she is offering, or she is offering, but must accompanybut must accompany

it with great service to the targeted customers Balunywa observed that the concept of customer care is still new and most managers are yet to embrace it

Mbonigaba (1995) wrote that there is need to make customers satisfied since they help business

 business to to earn earn In In most most offices, offices, customer customer care care starts starts with with the the front front office office clerks clerks TheThesecret

secretaries at aries at the front office should be the front office should be made to made to appreappreciate the ciate the imporimportance of tance of custocustomer caremer care because this is

 because this is the best the best chance for chance for any business to crany business to create the eate the first impression of first impression of good servicegood service

Kotler (1998) observed that customer satisfaction depends on the extent to whichcustomer’s expectations about the services are fulfilled and these expectations are not static

Kotler further noted that good customer service among other things entails keeping the promises

 promises made made to to customers, customers, and and not not guaranteeing guaranteeing things things that that cannot cannot be be possible possible given given thethe

nature of the operating environment To provide an excellent service to customers, theorganization should deliver beyond the expectations

organization should deliver beyond the expectations of the customers.of the customers

Santon (1999) argues that, to provide good customer services, the organization indesigning must focus wholly on the customer This brings us to

designing must focus wholly on the customer This brings us to who actually is the who actually is the customer.customer

A customer is an individual or organization that makes a purchase decision Drucker (1994)identifies customer creation as one of the major objectives of the business Without acusto

customer, other compmer, other componentonents of s of organorganizatioization will not be n will not be viable for long viable for long OrganOrganizatioizationsnstherefore design customer care programs seeking to acquire new customers, provide superior customer satisfaction and build customer

customer satisfaction and build customer loyalty.loyalty

Caryforth Otal (1990), lists the factors of good customer care services’ 

• To gain new customers and retain old customers

• To obtain customer loyalty

• To enhance the image of the organization

According to Douglas & Connor 2003, Parasuraman et al., 1985, and Ladhari 2008, the

intangible elements of a service (inseparability, heterogeneity and perishability) are thecritical determinants influencing service quality perceived by a consumer

As Lewis and Booms (1983) have put it, “service quality is a measure of how well theservice level delivered matches customer expectations Delivering quality service meansconfirming to customer expectations on a consistent basis”.

“Because of intangibility, the firm may find it difficult to understand how consumers

 perceive  perceive their their services services & & evaluate evaluate service service quality” quality” (Zeithaml, (Zeithaml, 1981) 1981) In In order order for for aacompany’s offer to reach the customers there

company’s offer to reach the customers there is a need for services These services depend onis a need for services These services depend onthe type of product and it differs in the various organizations.Service can be defined in manyways depending on which area the term is being used.An author defines service as “anyintangible act or performance that one party offers to another that does not result in theownership of anything” (Kotler & Keller, 2009, p.789) In all, service can also be defined as

an intangible offer by one party to another in exchange of money for pleasure

Quality is one of the things that consumers look for in an offer, which service happens to beone (Solomon 2009, p 413) Quality can also be defined as the totality of features andcharacteristics of a product or services that bear on its ability to satisfy stated or impliedneeds (Kotl

needs (Kotler et er et al., 2002, p 831) It is evident that quality is also related to al., 2002, p 831) It is evident that quality is also related to the value of anthe value of anoffer, which could evoke satisfaction or dissatisfaction on the part of the user

It can be seen from the definition of “quality” and “service”, there is the presence focustomers every time which shows the vitality of customers While in “Quality” concept,Customers are considered as one dimension, or perspectives to measure, in “service”, theyare a part which cannot be missed when conducting business Therefore, this chapter will bemore focus on the understanding of “quality” from Company’s perspectives which consider customers as the driven for their qualities Any action which is directly proportional toward providing the

 providing the quality quality to to the the consumers with consumers with products, goods products, goods or or services services is is versed as versed as qualityquality

assurance (James R Evans, William M Lindsay- 2002) There are seven criteria listed byJames R Evans and William M Lindsay They are as follows

•• JJuuddggmmeennt t CCrriitteerriiaa

• PPrroodduucct t bbaasseed d ccrriitteerriiaa

• UUsseerr bbaasseed d ccrriitteerriiaa

•• VVaalluue e bbaasseed d ccrriitteerriiaa

•• MMaannuuffaaccttuurriinng g bbaasseed d ccrriitteerriiaa

•• IInntteeggrraattiinng –g –bbaasseed d ccrriitteerriiaa

•• CCuussttoommeerr- - ddrriivveen n qquuaalliittyy

Obviously, except for product based and manufacturing criteria five of these criteria left can

 be used to define quality for Service Company

 be used to define quality for Service Company From the first criteria, although customers are From the first criteria, although customers arenot called in to label

not called in to label for judgment criteria, they are for judgment criteria, they are the judge who give the last decision aboutthe judge who give the last decision aboutthe measurement of service quality These cases are also caught in user-based criteria, whencustomers are the users of the service besides the “internal customers”

Quality as the definition in dictionary in general is defines as “that which makessomething what it is, characteristic element, basic nature, kind, and the degree of excellence

of something

of something excellent, superiority” (Merriam-Webster, online dexcellent, superiority” (Merriam-Webster, online dictionary) ictionary) As this oAs this objectivebjectivedefinition, “quality” is used to define the “nature” of something and its high standard as thedegree of excellence Thus, partly, the whole phrase “quality 23 service” can be understood

as the nature of service- a form of business or business products and the excellent standard itneeds to reach or meet

As in ISO 8402-1986 standard which many business dictionaries define, “quality is thetotality of features and characteristics of a product or service that bears its ability to satisfystated or implied needs" (Business dictionary online) It is obvious that, quality concept havestrong relation to the satisfaction of customers to company products or services or customer  base is one of the main elements which should be viewed when define “quality” of especiallyservice In the book “The management and control of quality”, fifth edition by James R.Evans & William M Lindsay, the author gave the concept of quality which mention aboutthe “customer- driven quality” as “ the meeting or exceeding customer expectations” All thecompanies have desire to reach a good quality meaning that all the companies try to matchthe

their ir proproducducts ts and and serservicvice e witwith h cuscustomtomersers’ ’ satsatisfisfactactionion HoHowevwever, er, cuscustomtomer er is is alsalso o aacomplicated concept and has some categories

Theoretically, there are two types of customers including internal and external ones Inthe first type of customers- internal, the definition of final users and consumers are usuallymixed up Consumers are not compulsory to be final using the products or services For instance, in the ISS case, the owners of the building who sign the contract with ISS companyabout providing services to this building can be seen as consumers of this services, however,

the final customers who use, experience and judge the quality of ISS services quality in this building

 building are are people people who who are are working working or or have have been been using using services services inside inside this this building building andandhave advantages of the facilities there For the external customers, they are “who receivegoods or services from the supplier inside the company” (The management and control of quality”, fifth edition by James R Evans & William M Lindsay, p 15) In the ISS case theycan be the employees who work as cleaners or people who directly work to provide quality

service They receive the guides, instruction about cleaning professional skills as well asmaterial for cleaning such as chemicals, mops, etc supporting for service providing process

In all group of customers, the need of quality service and product are existing, moreover,they have relation and integration.

According to Kendrick, Michael (1994), there are thirty ingredients of quality services.Thirty points demonstrated as a long time of assembling the observations, researching and

study from the suggestion of W Wolfensberger in 1983 Generally, thirty elements listedmentioned to two main objectives: customers and service providers To provide the bestservices, the providers need to have understanding of the service and standards as well as thedemanding for their customers They also need to be provided the good materials These arementioned as “appropriate acknowledgment and support for the existential, emotional andspiritual struggles of the person served” (Thirty elements of service quality, Michael J

Kendrick PhD, 1994) For the second objective- customers, they should be participated andcooperated with service providers in process of building quality service, and they are judgesfor the valuing of the end results

for the valuing of the end results The service and person wThe service and person who designs the servho designs the service also needice also need

to reach some standards for example about the location, and accessibility

The American scholar: Zeitham VA, Parasuraman A and LB Leonard has launched the decisive factor in the quality

decisive factor in the quality of services, such as: of services, such as:

The first is reliability: the onsistency in operating, performing correctly the function from theoutset, comply with promises made to

outset, comply with promises made to customers reliable.customers reliable

The second is a sense of responsibility: the zealous or the willing of providing service at theright time, timely of the supply staff

The thirst is the capacity: Employees must have the necessary skills and knowledge to work 

in this service

The fourth is the accessiblement : It is easy to access, with the waiting time, with openinghours

The fifth is the behavior : the polite, respect, caring and friendly of staff in the enterprise withcustomers

The sixth is the communication: Inform with the customers by their own words, listen to theopinions of our customers, adjusted for how to communicate with different groups of clients,explain that the service process itself will cost how much and it help solve what problem

The seventh is the credibility: honesty, : honesty, trustworthy, reputation trustworthy, reputation of of the enterprise, the the enterprise, the personalpersonalqualification of the servants

The eighth is the safety: Client felt no danger, no risk or doubt, safe in physic, in finance,maintain the client’s confidentiality

The ninth is the customer insights: the efforts of understanding the customer's needs, keeping

in mind the specific requirements of each individual, creating the attention to the individual,identifying the regular and loyal customers of the enterprise

The tenth is the visible: the physical evidence of the service, the facilities, the appearance of staff, the equipment to conduct services, physical symbol of service

Figure 2 quality modelsThe model show the relation ship of 10 quality factors and the customer’s expectations.Thedifference between customer care and customer service From the above definition can beseen the concept of customer care consists of two parts:Firstly, customer care is customer service in a way that they want to serve.Secondly, customer care aiming to hold the existingcustomers, create customer loyalty.This makes the main difference between the two concepts

of customer care and customer service

 Normally people  Normally people often uniform often uniform entirely entirely two concept, two concept, customer care customer care is also is also customer servicecustomer serviceand reverse But it is not really so Customer service is also doing all that needed to serveclients in their desire to satisfy the needs and expectations of customers But in customer service, people do not emphasize the purpose and object of its impact Or maybe other words,the subject of customer service includes the existing customers and the potential customers,the purpose of customer service also includes maintaining existing customers and attractcustomers potential Meanwhile, customer care only focus on existing customers, aiming to

The service quality factors

Meet expectations(A=B satisfactory quality)   

A Servicesdesired

B Awareservices

keeping existing customers Customer care and customer service have the different purposesand objects of the impact The contents of the customer's implementation is applying thecustomer service to existing groups of clients So, we can give a definition of customer care:

"Customer Care is customer service aiming to maintain existing customers."

Customer care and reliability of products and services

CustoCustomer Care mer Care as well as well as many as many other marketiother marketing activities are ng activities are geared towards satisgeared towards satisfying thefying theneeds and expectations of customers Actually there are many different factors to satisfy thecustomer These factors are divided into three main groups:

The factor of product: diversity of product, price, quality

The factor of convenience: location, delivery terms and conditions of change, opening times, payment methods

The human factor: the skill level of sales, attitude of staff behavior

2.1.

2.1.4 4 Rela Relations tionship betw hip between Cus een Custome tomer Satisfa r Satisfaction an ction and Serv d Service Qual ice Quality ity

Since customer satisfaction has been considered to be based on the customer’s experience on

a particular service encounter, (Cronin & Taylor, 1992) it is in line with the fact that servicequality is a determinant of customer satisfaction, because servicequality comes from outcome

of the services from service providers in organizations.Another author stated in his theorythat “definitions of consumer satisfaction relate to a specific transaction (the difference between predicted

 between predicted service and perceived service and perceived service) in service) in contrast with ‘attitudes’, contrast with ‘attitudes’, which are morewhich are moreenduring and less situational-oriented,”(Lewis, 1993, p 4-12) This is in line with the idea of Zeithaml et al (2006, p 106-107)

RegardRegarding ing the the relatirelationshonship ip betwebetween en custocustomer mer satissatisfactiofaction n and and servicservice e qualiquality, ty, OliverOliver(1993(1993))first suggested that service quality would be antecedent to customer satisfaction regardless of whether these constructs were cumulative or transaction-specific Some researchers havefound empiri

found empirical supports for the cal supports for the view of view of the point mentioned above (Andersthe point mentioned above (Anderson & on & SulliSullivan,van,1993; Fornell et al 1996; Spreng & Macky 1996); where customer satisfaction came as aresult of service quality

In relating customer satisfaction and service quality, researchers have been more preciseabout the meaning and measurements of satisfaction and service quality Satisfaction andservice quality have certain things in common, but satisfaction generally is a broader concept,whereas service quality focuses specifically on dimensions of service.(Wilson et al., 2008, p

78) Although it is stated that other factors such as price and product quality can affectcustomer satisfaction, perceived service quality is a component of customer satisfaction(Zeithaml et al 2006, p 106-107) This theory complies with the idea of Wilson et al (2008)and

and has has beebeen n conconfirmfirmed ed by by the the defdefiniinitiotion n of of cuscustomtomer er satsatisfisfactiaction on prepresensented ted by by othother er researchers

igure 3 Customer perceptions of quality and customer satisfaction

The above The above figurfigure e showshows s the relationshthe relationship ip betweebetween n custocustomer mer satissatisfactiofaction n and service and service qualiquality.ty.The author presented a situation that service quality is a focused evaluation that reflects thecustomer’s perception of reliability,

customer’s perception of reliability, assurance, responsiveness, empathy and tangibility whileassurance, responsiveness, empathy and tangibility whilesatis

satisfaction is more faction is more incluinclusive and it sive and it is influenced by perceptiois influenced by perceptions of ns of servicservice e qualiquality, productty, productquality and price, also situational factors and personal factors.(Wilson, 2008)

It has been proven from past researches on service quality and customer satisfaction thatCu

Custstomomer er sasatitisfsfacactition on anand d seservrvicice e ququaliality ty arare e rerelalated ted frofrom m ththeieir r dedefinfinititioions ns to to ththeieir r relationships with other aspects in business Some authors have agreed to the fact that servicequality determines customer satisfaction Parasuraman et al., (1985) in their study, proposedthat when perceived service quality is high, then it will lead to increase in customer satisfaction Some other authors did comprehend with the idea brought up by Parasuraman

Productquality

Price

Situationalfactor 

Customer satisfaction

Personalfactor 

Customer loyalty

(1995) and they acknowledged that “Customer satisfaction is based upon the level of servicequality that is provided by the service providers” (Saravana &Rao, 2007, Lee et al., 2000).Looking into

Looking into this figure 1, relating it to thesthis figure 1, relating it to these authors’ views, it is e authors’ views, it is evident that definition of evident that definition of customer satisfaction involves predicted and perceived service; since service quality acted asone of the factors that influence satisfaction More evidence of this relationship has been proven by past researches

As a result of the definition of customer satisfaction presented by Lewis, 1993,, Sivadas &Baker-Prewitt 2000, used a national

Baker-Prewitt 2000, used a national random telephone survey of 542 shoppers to examine random telephone survey of 542 shoppers to examine thetherelationship between service quality, customer satisfaction, and store loyalty within the retaildepartment store context One of the results was that service quality influences relative

attitude and satisfaction with department stores They found out that there is a relationship between customer satisfaction and service quality

In line with the findings of Sivadas & Baker-Prewitt 2000,, Su et al., (2002,) in their study of customer satisfaction and service quality, found out that; these two variables are related,confirming the definitions of both variables which have always been linked They alsodictated that service quality is more abstract because it may be affected by perceptions of value or by the experiences of others that may not be so good, than customer satisfactionwhich reflects the

which reflects the custocustomer’s feelings about many encounters and experiences with servicemer’s feelings about many encounters and experiences with servicefirm Su et al., 2002 In addition to what the other researchers have found out from customer satisfaction and service quality, some other authors Wang & Hing-Po (2002), went intode

detatailils s to to brbrining g in in cucuststomomer er vavalulue e in in ththe e ststududy y of of ththe e rerelatlatioionsnshihip p bebetwtween een cucuststomomer er satis

satisfaction and faction and serviservice ce qualiquality ty Their study used Their study used SERVQSERVQUAL model UAL model in in measumeasuring servicering servicequality in China’s mobile phone market, but with modification on the basis of focus groupdiscussions and expert opinions to reflect the specific industry attributes and the special

culture of China Emphasis was then paid to the study of the dynamic relationships amongse

servrvicice e ququalialityty, , cucuststomomer er vavalulue, e, cucuststomomer er sasatitisfsfacactition on anand d ththeieir r ininflflueuencnces es on on fufututurere behaviours after

 behaviours after the key the key drivers of drivers of customer value customer value and customer satisfaction and customer satisfaction were identified.were identified.All of them were based on the development of structural equation models by using PLS-GRA

GRAPH PackaPH Package (Wang & ge (Wang & HinHing-Pg-Po, 2002o, 2002) ) ThThis is stustudy blenddy blended ed the studthe study y of of cuscustomtomer er satisfaction and service quality with customer value which added more weight to the linkage between customer satisfaction and service quality because value is what customers look in anoffer

2 2.1 1 4 4.1 1 Ga Gap M p Mod odel el of of S Ser ervvic ice Q e Qua uali lity ty (Z (Zeeit ith ham aml e l et a t al l., 2 , 20 006 06, 4 , 46 6))

SESERVRVQUQUAL AL or or RARATETER R is is a a seservrvicice e ququalalitity y frframamewewororkskserervivice ce ququaliality ty fraframemewowor r SE

SERVRVQUQUAL AL wawas s dedevevelolopeped d in in ththe e mimid-1d-198980s 0s by by ZeZeitithahamlml, , PaPararasusuramraman an & & BeBerryrry SERVQUAL means to measure the scale of Quality in the service sectors The servicequality model or the ‘GAP model’ developed by a group of authors- Parasuraman, Zeithamland Berry at Texas and North Carolina in 1985, highlights the main requirements for delivering high service quality

Figure 4.Gap Model of Service Quality

GAP 1:

Gap between consumer expectation and management perception : This gap arises when themanagement does not correctly perceive what the customers want For instance – hospitaladministrators may think patients want better food, but patients may be more concerned withthe responsiveness of the nurse Key factors leading to this gap are:

• Insufficient marketing research

• Poorly interpreted information about the audience's expectations

• Research not focused on demand quality

• Too many layers between the front line personnel and the top level management

GAP 2 :

Ga Gap p be betw twee een n ma mana nage geme ment nt pe perce rcept ptio ion n an and d se servi rvice ce qu qual alit ity y sp spec ecif ifica icati tion on :: HeHere re ththee

mamananagegemement nt mimighght t cocorrerrectctly ly pepercerceivive e whwhat at ththe e cucuststomomer er wawantnts, s, bubut t mamay y nonot t seset t aa performance

 performance standard standard An An example example here here would would be be that that hospital hospital administrators administrators may may tell tell thethenurse to respond to a request ‘fast’, but may not specify ‘how fast’.Gap 2 may occur due thefollowing reasons:

• Insufficient planning procedures

• Lack of management commitment

• Unclear or ambiguous service design

• Unsystematic new service development process

GAP 3:

Gap between service quality specification and service delivery : This gap may arise owing tothe service personnel The reasons being poor training, incapability or unwillingness to meetthe set service standard The possible major reasons for this gap are:

• Deficiencies in human resource policies such as ineffective recruitment, roleambiguity, role conflict, improper evaluation and compensation system