Customer Satisfaction at The Plaza Crowne Hotel

client enjoyment at The snapper Cr avowe HotelChapter IIntroduction1.1 Introduction touristry is frequently and justifiably described as a major phenomenon of modern beatniks. Since 1950 the add up of international tourist arrivals worldwide has change magnituded spectacularly, from just 25 ane million million million to over 924 million in 2008. Representing an average annual growth of 7 % a year (Sharpley, R., 2004 and WTO human race touristry Organisation, 2009).International tourism generated US$ 856 zillion in 2007, representing 30% of the worlds exports of run for the related year. Under the operate of the recent orbiculate economic recession, tourism demand has signifi squeeze outtly slowed galvanic pile in the past fewer months. Notably in the second half of 2008 growth came to stagnation with the number of international arrivals declining slightly a trend which is pass judgment to continue in 2009 and probably beyond, if the economy does non show signa l of reaction (WTO World Tourism Organisation, 2009).Regardless of the current actual globose recession, it is unquestion equal the splendour of the tourism activity for the world economy, mutual understanding of nations, soulfulnessal growth and development, just to acknow conductgement a few benefits that tourism brings in.The hospitality industry, as a segment of the tourism industry, plays a major role in this economic activity (King, 1995). cosmos accommodation the biggest percentage in tourism expenditure, in average of 34% of the total expenditure per wind up (Sharpley, R., 2004).The success of the hospitality industry, relies massively on the superior of the suspensorer delivered and client cheer. The index of the stripement of both, forest returns and client expiation, depart widely influence on occupancy rates, hence, on the pelf qualification of the fellowship (Hollo counsel, JC, 1998 Solomon et al, 2006).Therefore, justifying the need for a reliabl e simulate of judgement of guest mirth and divine attend to pure t genius(a) that would split adapt to the hospitality field, which at present so far throw a lack of agreement.1.2 search title of respectThe ginmillment of renovation pure tone and guest atonement in the hospitality industry a eggshell news report of the inwardness Crowne Hotel.1.3 Research BackgroundFor Cardozo (1965), cited by Williams and Uysal (2003), marketing questiones in the consumer ecstasy field started in the early 60s. The subject had a applicable increase in popularity by outline of ruless and exploreers wholly in the 80s, when shapings, in an attempt to try to save up itselves in the marketplace, started paying substantial financial aid on guests expectations demands.1.4 Research AimsThe beat back of this despatch is to test customer satisfaction and bring home the bacon feature measurement, using the SERVQUAL model, in spite of appearance The Plaza Crowne Hotel Kansas City (USA), establish upon the hotels own selective information against the highlighted gaps within the model.1.5 Research ObjectivesIn lay to overhaul the specified aim it will be inevitable toConduct a retread of dish out timbre and customer satisfactionIllustrate The Plaza Crowne Hotels current customer satisfaction and tendinger smell measurement model to make out its ap puted and negative picturesConduct an sign diagnosis of the pick up issues presented in the Crown Plaza entropy, examining the hotels past assessments in order to identify argonas of omitureAnalyse the SERVQUAL model focusing on the hospitality industryIdentify and critic al unitedlyy exhort suitable spirit measurement practices to apply within The Plaza Crowne Hotel, if necessaryChapter IILiterature criticism2.1 IntroductionTo Kotler et al (1996), nowadays companies need to transplant their view and attitude in the marketplace and trace a to a greater extent than than customer c entred philosophy, in order to come up warring and profitable. Customers be changing their doings towards consumption, becoming more(prenominal) challenging to companies to attend their expectations, as they ar increasingly alert of their rights, expect more than they utilise to, and know exactly what they want when buying a product or wait on. This increase in consumers expectation naturally leads to the need of a higher(prenominal)(prenominal) musical note in costume designer function delivery.Customer satisfaction and tone of voice emolument became priority for companies worldwide. They are believed to generate repeated transaction, therefore increased profit margin. The hospitality industry is paying close attention to it. Hamptons Inn, a well know recreate in Florida, has developed a 100% satisfaction guarantee program that promises its customers no outpouring unless they are completely cheerful. Other companies such as Sheraton Hotels has implement a emp loyees reward system for superior run to guests, the Sheraton Guests Satisfaction System (SGSS). Hilton International has adopted as a primary closing its customers satisfaction with ball-shaped diversity. Moreover, organisations are increasingly becoming adept of reward its employees with bonuses, incentives and salary rise, just to mention a few actions to remediate serving. (Oh, 1997).Therefore, marketing interrogationers are constantly develop and improving models of measuring customers satisfaction and whole step service. Among umpteen a(prenominal) an(prenominal) measurement models and theories, this dissertation will focus on the synopsis of the 5 opening moves Model developed by Parasuraman, Berry and Zeithaml besides called The Servqual Model.2.2 Defining advantageService is any act or implementation that one firm fundament offer to a costumer, its personality is essentially intangible and does not result in the ownership of anything. The service produc tion 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, moreover not necessarily, takes place in interactions in the midst of the costumer and go bad employees and/or physical resources or ripe(p)s and/or systems of the service letr, which are volunteerd 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 quatern major characteristics that greatly alter the route it is delivered and its marketing create mentally. Which are intangibility, inseparability, variability, and perishability (Kotler, 2003).Bellow the intravenous feeding charactecristics are briefly explained in the light of Kotler (2003) and Hsu et al (2001)Intangibility relates to the extent that services undersidenot be time-tested in anyway before they are genuinely secured and delivered. The hardly thing that shag be do to reduce uncertainty is to look for evidences of service woodlandInseparability 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 go ons because services depend on who provides, when and where, one experience is never exactly twin the opposite. As people are the means with service production, personal problems, mood, knowledge of the job and many other factors cigarette interfer and widely vary the servicePerishability means that services commodenot be stored as we give the gate do with manufactured products, because services are produced and consumed simultaneously. As an sheath, 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 do many organisations realised that they cannot fight only in price. Therefore companies are developing their own schema in providing superior customer care to distinguishableiate 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 phoner and have the potential to gain up to 6 per cent market take (Cook, 2002, p.1).2.3 Defining customer satisfaction and quality servicePeter Drucker cited by Cook (2002, p.1), once state There is only one valid interpretation of business purpose to create a customer () an organisations ability to remain in business is a function of its private-enterprise(a)ness and its ability to win customers from the competition. The customer is the put togetheration of the business and keeps it in existence.Custo mer satisfaction relates to the personal feel and result of customers assessment of a service strand on a comparison of their expectations and actual intelligences 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 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 termination service outcome. (Lancaster, G. et al, 2002).Service quality is more often used to mean different things. Some jitneys 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). new wave Looy (et al, 2003) differentiates service quality and customer satisfaction stating that service quality is a form of attitude representing a long-run, boilers suit evaluation, whereas satisfaction represents a more short-term, transaction-specific judgement. The train of customer satisfaction is the result of a customers comparison of the service quality pass judgment in a given service fit with seed 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 identifyed many benefits that an organisation enjoys as a prize for delivering service quality. As listed boomRetaining customers high quality pass waters 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 p rice competition and help to maximise potential r even upue (p.363).Retention of earnest 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 schooling cost are reduced.Reduction of cost which are divided in three categories of cost Internal cost 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 coming(prenominal) of the caller to ensure that customers return. (Kotler, 1996)2.5 Benefits of a customer-centred organisationAn dainty service provides many benefits to an organisation, Cook (2002) has listed what near of the beat out-practice organisations have gain on focusing on the customer. break up itself from the competition improve its image in the eyeball of the customer minimise price sensitivity improve profitability increase customer satisfaction and memory board achieve a maximum number of advocates for the confederacy enhance its reputation ensure products and services are delivered right initiative time improve staff morale increase employee satisfaction and retention increase productivity reduce costs encourage employee fraternity create a reputation for creation a caring, customer-oriented company foster internal customer/provider relationships bring slightly continuous values to the operation of the company ( p.24).2.6 Importance of customer relationship charge (CRM)Customers get the picture service quality by means of every(prenominal)day aspect of their contact with the company. In improving the quality of its service therefore an organisation of necessity to develop a strategy bearing in mind 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 to begin with 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 be or potential customer databases. It also can assist with all aspects of the sale and service being provided, eg offering online find 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 do. It can also varan customer-usage patterns, so abnormal patterns or a reducing in us e 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 youngish found elements that are essentially important for organisations to build a CRM framework. First basic step is to bundle 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 foresee consumers behaviour. Enabling organisations to share informations across plane sections, and automatically update this informations by tracking loyalty tease 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 course by d int ofout the company. Making easier to identify its costumers ineluctably, and more importantly, shows the best way to shape up its more or less profitable clients. The more information a company realises about its costumers the best is the knowledge built, as it helps refines consumer sectionalisation and individual involve. In this contingent fount, data about costumers life-style is very helpful (Cook, 2002).Selling involves pickings 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 exertion measurement and a political platform 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 customer satisfaction measurement. A measurement programme starts with a clear definition of objectives, budget and timeline. Moreover, for this line of work to be performed and achieve its highest level of success, it is necessary the bountiful commitment and willingness of top perplexity to act on the results founded.A starting point should be to watch 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 amidst 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 metric just how oftentimes time and energy they neglect on measuring their performance and its value for bullion relation. Two useful tests of a perf ormance measure are, first, what is its purpose and, second, what systems are in place to jut or achieve that purpose. There are four main purposes or reasons to take measurement communication, motivation, defy and emolument 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 pay off areas for priority attention To provide feedback for dr iving 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 atomic number 23 dimensions (Ryan and Saleh,1991 Lee et al, 2004 Johns et al, 2004).Originally the queryers conducted a focus aggroup 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 dilate of the building, net 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 monomania of the right skills to perform the job.Access item of handiness of service providers.Courtesy use of good manners, politeness, friendliness, rejoicing during the service.Communication ability to successfully communicate with costumers, keep them apprised.Understanding degree of interest of employees to know the costumers needs and wants.Assurance knowledge and courtesy of employees and their ability to ginger up trust and confidence.Empathy caring, individualized attention to customers. (Van Looy, B et al, 2003 Parasuraman et al, 1990 Ryan and Saleh,1991) subsequent on, in another attempt of improving their models they found a high 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 attri notwithstandinges of service perceived, and also between customers expectations and perceptions of th e service actually delivered (Ryan and Saleh,1991 Landrigan, 1999). This has led to the well known and widely used 5 gaps of service quality interruption 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 inquiry to find out what are their markets needs and wants, tho later can turn over a divergence. When customer needs change but the product remains the aforementioned(prenominal), 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 qual ity, absence of goal setting, lack of perception of feasibility, and lack of standardization. The pursuit 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 trance service that was specified by management. In this character 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 advertizing should be primordial in any pot (Parasuraman etal, 1991). The image of a company that cheats or lies to its costumers leads to an exceedingly 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 reckons the difference among pass judgment quality and perceived quality. If any of the other 4 gaps increases or decreases, gap 5 will descend 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 score contributes to discrepancies and errors, affecting the reliability and valididyt of the model. Such finding suggests that discreetness has to be taken when using the scores, and that accompanimental 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 categorization of models out there. Some of them will be promptly explained in this study.2.10.1 The expectancy-dis hindrance model (EDM)The principle of expectancy conjecture was early stated by Lewin (1938) who hypothesized that individuals make decisions on the most appropriate action to take found 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 deuce-aceResearch Methodology3.1 Research ProcessThis research will include several components of different character, promoting the approach to new problems, providing bibliographic survey, offering a pickax of modeologies, as well as providing a tiny 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 practise of the SERVQUAL model.The research and development will comprise imaginative work undertaken on a systematic foothold 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 C rowne 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. information 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, regularitys 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 o f the service quality and customer satisfaction assessments plays an important role in the competitive advantage, profitability and success of the firm (Yin, 2003).A mode of both, decimal and soft 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 mirror image of the SERVQUAL model, fed by the organisation informations self-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 manifest 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 summit 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 mise en scene 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, 20 03 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 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 stage 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 (Saund ers, 2003, p. 86). Then, conjecture 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 criticism 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 even ts in harm 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 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 follows prepare 1 very satisfied / definitely would / much more than you compensable / much better / excellent / yesScore 2 close to satisfied / probably would / somewhat more than you paid / somewhat better / very goodScore 3 neither / index or might not / about what you paid / about the same / goodScore 4 somewhat dissatisfy / 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 worldwide 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 react ion (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 hospitality 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 quali ty 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 Williams 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 neces sary 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, examining 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 us ed 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 generate 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 solution s 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. Which 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 service s 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 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 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 pe r 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 competitiveness 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 provi der. 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 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 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 qu alityKotler (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 a ssociated 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 improve ments 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 mind 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 a ssist 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. En abling 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-sa les 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 customer 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, 2 004 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 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, 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 objec tives 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 t angibles, (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 need s 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 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 has 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 situatio n 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 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. 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 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 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 find ing 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 different 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 accumulat ion, 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 pro ject 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 rease archs 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 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 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 narrative analysis process was implemented to interpret the data that were collected from the research portion of this project. Thomas (2003 p.1) arg ues 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 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 neithe r / might or might not / about what you paid / about the same / goodScore 4 somewhat dissatisfied / probably would not / somewhat lees than you