Download CHAPTER ONE INTRODUCTION 1.1 The Emergence of Services

CHAPTER ONE
INTRODUCTION
1.1 The Emergence of Services Marketing
The service sector is an important component of any country’s economy. It makes a
direct and significant contribution to GDP and job creation, and provides crucial inputs for the
rest of the economy, thus having a significant effect on the overall investment climate, which is
an essential determinant of growth and development. Some service sectors such as the health,
education, water and sanitation sectors are also directly relevant to achieving social development
objectives.
Many services are key inputs to all or most other business e.g. infrastructure services
such as energy, telecommunications and transportation; financial services which facilitate
transactions and provide access to finance for investment; health and education services which
contribute to a healthy, well-trained workforce; and legal and accountancy services which are
part of the institutional framework required to underpin a healthy market economy. These service
sectors are thus a key part of the investment climate, and can have a much wider impact on
overall business performance and the level of investment, and hence growth and productivity in
the economy.(OECD Global Forum on International Investment, 2008)
In addition, imports of services can significantly improve performance by bringing
greater competition, international best practice, better skills and technologies, and investment
capital. The entry of Foreign Service providers may therefore yield better services for domestic
consumers, and improve the performance and competitiveness of domestic firms. Given that
much trade in services is brought about through foreign direct investment, it can also serve to
bring much needed capital into the country. Thus it can help to stimulate investment in
3 infrastructure development for example, where government or domestic private sector funding
may have otherwise been difficult to secure (given public sector budget constraints, and the fact
that many developing countries have limited access to international capital markets)
Significant service output is created by undocumented work in domestic jobs (e.g., cook,
housekeeper, and gardener) or in small, cash based enterprises such as restaurants, laundries,
rooming houses, and taxis. Service organizations range in size from huge international
corporations like airlines, banking, insurance, telecommunications, hotel chains, and freight
transportation to a vast array of locally owned and operated small businesses, including
restaurants, laundries, taxis, optometrists, and numerous business to business ("B2B") services.
Franchised service outlets—in fields ranging from fast foods to bookkeeping combine
the marketing characteristics of a large chain that offers a standardized product with local
ownership and operation of a specific facility. Some firms that create a time sensitive physical
product, such as printing or photographic processing, are now describing themselves as service
businesses because speed, customization, and convenient locations create much of the value
added. There’s a hidden service sector, too, within many large corporations that are classified
by government statisticians as being in manufacturing, agricultural, or natural resources
industries. So called internal services cover a wide array of activities including recruitment,
publications, legal and accounting services, payroll administration, office cleaning, landscape
maintenance, freight transport, and many other tasks.
To a growing extent, organizations are choosing to outsource those internal services that
can be performed more efficiently by a specialist subcontractor. As these tasks are outsourced,
they become part of the competitive marketplace and are therefore categorized as contributing
to the service component of the economy. Even when such services are not outsourced,
4 managers of the departments that supply them would do well to think in terms of providing
good service to their internal customers. Governments and nonprofit organizations are also in
the business of providing services, although the extent of such involvement may vary widely
from one country to another, reflecting both tradition and political values. In many countries,
colleges, hospitals, and museums are publicly owned or operate on a not for profit basis, but for
profit versions of each type of institution also exist.
In world GDP of US$70.2 trillion in 2011, the share of services was 67.5 per cent, more
or less the same as in 2001. Interestingly the top 15 countries in terms of services GDP are also
the same in overall GDP in 2011. This list includes the major developed countries and Brazil,
Russia, India, and China. Among the top 15 countries with highest overall GDP in 2011, India
ranked 9th in overall GDP and 10th in services GDP. The services sector is the dominant sector
in most developed economies of the world and in some developing economies such as India. The
CAGR of the services sector GDP was 10 per cent for the period 2004-05 to 2011-12. It has
clearly outgrown both the industry and agriculture sectors. (Services sector, 2012-2013).
The percentage contribution of services sector to GDP in India for the past four years till
2011 has been in the range of 53% to 55%. In China the contribution of services to GDP for the
same time period has been in the range of 41% to 43%.( World Bank, 2011)
5 Figure 1: Sector wise share of GDP at Constant Prices % (2001-02)
Figure 2: Sector wise share of GDP at Constant Prices % (2012-13)
Figure 1 and Figure 2 show the sector wise share of GDP for agriculture, industry and
services for the period 2001-02 to 2012-13 respectively. The share of agriculture was reduced
from 22% to 14%, for industry it has remained more or less constant at 27% and for services it
has grown from 51% to 59% over a decade and more. (GDP at factor cost, 2013)
6 For over a decade and more, the services sector which comprise of Construction, Trade,
Hotels & Restaurants, Transport and Communication, Financing, Insurance, Real Estate and
Business Services and Community, Social and Personal Services have seen a meteoric rise. The
In 2011-12, though the growth of ‘trade’ decelerated to 6.5 per cent, its share improved to 16.6
per cent. The share of ‘transport by other means’ at 5.4 per cent was almost at earlier levels,
while its growth was at 8.6 per cent. Banking and insurance with marginal improvement in its
share to 5.7 per cent was the most dynamic sector in 2011-12 with a growth of 13.2 per cent on
the top of high growths in the preceding years.
‘Real estate, ownership of dwellings, and business services’ with a share of 10.8 per cent,
which is marginally higher than that of the previous year, also had robust growth of 10.3 per
cent. ‘Other services’ with a share of 7.9 per cent both in 2010-11 and 2011-12 grew at a slower
pace of 6.5 per cent in 2011-12. Among ‘other services’, the two major items are community
services, of which education, medical, and health, are the major items. (Services sector, 2012-13)
Table 1: Performance of India’s Service Sector: Some indicators
Sector
Aviation
Telecom
Tourism
Shipping
Ports
Railways
Indicators
Airline Passengers
(domestic and
international)
Telecom connections
(wireline and wireless)
Foreign Tourists arrivals
Gross tonnage of Indian
Shipping
Port Traffic
Freight traffic by
railways
Unit
2008-09
2009-10
Period
2010-11 2011-12
Million
49.5 ( a)
54.5 ( a)
64.5 ( a)
70.2 ( a)
67.5 ( a)
Lakh
Million
Million
GT
Million
Tonnes
Million
Tonnes
4297.25
5.28 (a)
6212.8
5.17 ( a)
8463.2
5.78 ( a)
9513.4
6.31 ( a)
8955.1 (b)
6.65 ( a)
9.28
9.69
10.45
11.06 ( c)
10.45 ( d)
744.02
850.03
885.45
911.68
455.77 ( e)
833.31
887.99
832.75
969.78
735.32 ( c )
2012-13
Notes: (a) calendar years, for example 2007-8 for 2007. (b) As on 31st December, 2012,
(c) April December, (d) As on 31 January 2013, (e) April-September. GT is gross tonnage; MT is metric tones
Sources: Services sector , 2012-13
7 Table 1 shows the rise of passenger traffic over a four year period starting 2008-09 from
49.5 million to 70.2 million in the domestic and international segment, a 41% rise in passenger
traffic. The year 2012-13 saw a decline of 3.8% in passenger traffic due to various reasons one
amongst it being the shutdown of the domestic carrier Kingfisher and also an economic
slowdown.
Figure 3: Market Share of Scheduled Domestic Airlines- 2012
The Figure 3 shows the market share of the domestic airlines for the year 2012 where
Indigo has the largest market share of 27%, followed by Air India (domestic) at 21 % and Spice
Jet at 20%. During this period Kingfisher Airlines was slowing down operations and later was
shut-down due to outstanding dues of around 7,000 crores. The figure shows the growth of the
low-cost carriers and the loss of market share by full service airlines.
Recently the Indian aviation market has absorbed setbacks, particularly due to outside
economics and fuel costs, but the industry remains resilient. A plethora of low-cost carriers has
8 disciplined the market and spurred a new generation of air travelers. As the economy rebounds,
the airline industry is poised to grow long-term. But the short-term forecast remains challenging.
Foreign airlines can now pick up 49 percent stake in India's domestic carriers, a step that is
expected to give a boost to cash-strapped aviation industry. This and many more airport
modernization plans will fuel the growth of the sector and hence the need to focus on it and study
it. The Jet – Etihad deal signed in April 2013, where Etihad Airlines bought a stake of 24% for
$379 million in Jet Airways will explore joint purchasing opportunities for fuel, spare parts,
equipment and catering supplies as well as external services such as insurance and technology
support. This will be a major cost-saver for Jet, which has been reeling under high fuel costs.
(Bhattacherjee, 2013)
Services’ marketing is becoming a recognized and accepted subset of the marketing
discipline. Given the growth of the service sector in economies throughout the world, and the
almost universal belief by scholars working in this area that services marketing is in certain key
respects different from goods marketing, the rapid growth of service marketing literature in
recent years is not surprising. An acceleration of academic interest and research activity in
services marketing in the years immediately ahead is to be expected and is necessary because far
more questions than answers exist at this time.
1.2 Research in Service Marketing
Vargo and Lusch, 2004 advocate that the strategy of differentiating services from goods
should be abandoned and replaced with a strategy of understanding how they are related. Service
is the common denominator in exchange, not some special form of exchange (i.e., what goods
are not); as a number of scholars (Gummesson, 1995; Kotler 1977) have noted, both goods and
services render service.
9 The definition of service-the application of specialized competences (skills and
knowledge), through deeds, processes, and performances for the benefit of another entity or the
entity itself (self-service)-that is intended to be inclusive (Vargo and Lusch 2004). It allows, if
not implies, the corollary idea that service can be provided directly or it can be provided
indirectly, through tangible goods. Manufacturing is a service, and its output is part of the
service-provision process.
Goods therefore are best thought of as appliances, which derive their value from their
ability to provide service, including the satisfaction of higher order needs. Gronroos (2000b),
who has argued “The emerging principles of services marketing will become the mainstream
principles of marketing in the future. . . . The physical goods become one element among others
in a total service offering. . . . This means that physical goods marketing and services marketing
converge, but services-oriented thinking will dominate.” (pp. 87-88)
This perspective requires rethinking marketing, if not all of economic science. It places
service rather than goods at the center of exchange. The combined broadening of the definition
of service and dispelling the four services myths (intangibility, inseparability, heterogeneity, and
perishability) is a desirable and necessary additional step in the direction of freeing marketing
from a manufacturing model.
The global services era is characterized by economies and labor force figures that are
dominated by the service sector, more customer involvement in strategic business decisions,
products that are market focused and much more responsive to the changing needs of the market
place, the emergence of technology for service provision and employee empowerment( Bateson
& Hoffman, 2011)
10 The single most researched area in services marketing to date is service quality. The
interest in service quality parallels the focus on quality, total quality management and customer
satisfaction in business during the last decade. The roots of the service quality research reside in
early conceptual work from Europe.(Gronroos, 1983; Lehtinen and Lehtinen, 1982) and
customer satisfaction theory (Oliver, 1980). The pioneering and continuing contribution of A.
Parasuraman, Leonard Berry and Valarie Zeithaml (1988) supported by the Marketing Science
Institute has produced a well-received conceptual framework (the Gaps Model) and a
measurement instrument, SERVQUAL, for assessing service quality.
Other researchers have contributed empirical studies on service satisfaction, a closely
related topic that is sometimes difficult to distinguish from service quality (Bitner, 1990; Bitner,
Booms and Tetreault, 1990; Crosby, Evans and Cowles, 1990; Olivia, Oliver and Mac Millan,
1992). While service satisfaction and service quality are clearly related, researchers do not share
common definition of the terms, nor is there clear understanding expressed in the literature of
how the two relate and this has scope for further research
Another prominent stream of research relates to service encounters or “moments of truth”
(Carlzon, 1987) .Service encounter research focuses on the interactions between customers and
employees in service firms. The research on service encounters can be divided into three primary
types. First, being the management of customer and employee interactions in service encounters
and to understanding how customers evaluate individual service encounters (Bitner, 1990;
Bitner, Booms and Tetreault, 1990) .The second research focus is on customer involvement in
service encounters and the customer’s role in service production and delivery (Goodwin, 1990;
Kelley, Donnelly and Skinner, 1990; Larsson and Bowen, 1989). The third research focus on
11 service encounters examines the role of tangibles and physical environment in the customer’s
evaluation of encounters. (Berry and Parasuraman, 1991; Bitner, 1992; Hui and Bateson, 1991)
A good deal has been written on service recovery and complaint management including
nature of complaining behavior (Halstead 1989; Johnston 1998), value of service recovery
(Barlow and Moller, 1996; Brown et al., 1996) , developing measurement instruments (Boshoff
and Leong, 1998) , elements of recovery and recovery strategies ( Johnston and Fern, 1999) ,
impact of complaint and recovery on financial performance (Johnston, 2001) and service
recovery applied to internal customers (Bowen and Johnston, 1999) .
Service Design is another topic which has assumed tremendous marketing importance
which basically looks at the actual steps involved in delivering and receiving the service. One
feature common to most of the research on new service development, service design and service
innovation is the service concept. The service concept is the core element of processes for
service design, development and innovation (Tax and Stuart, 1997) There has also been an
emergence of service blueprinting and service mapping, an area pioneered by Lynn Shostack
(1984; 1987; 1992) and Kingman-Brundage (1989; 1991).
The research on relationship marketing and customer retention has taken various forms.
For example, some research focuses on constructs, such as trust and relationship commitment
and how these constructs relate to customer satisfaction and loyalty (Crosby and Stephens, 1987;
Crosby, Evans and Cowles, 1990). Other researchers have focused on specific breakthrough
strategies for retaining customers, such as building an effective recovery strategy for service
failure situations (Berry and Parasuraman, 1991; Hart, Heskett and Sasser, 1990) or offering
service guarantees to reduce risk and build loyalty (Hart, 1988) .
12 Understanding and calculating both the long-term value of a customer and the lost
revenue-profits for defecting customers (Reichheld and Sasser, 1990) are two other research
topics that fall within the relationship marketing focus. These latter topics (recovery, guarantees,
and the cost of defecting customers) have been embraced quickly by business practitioners and
would benefit from additional academic research. . Insufficient allocation into customerretention efforts will have a greater impact on long-term customer profitability as compared to
insufficient allocation into customer-acquisition efforts (Reinartz et al., 2004).
Customer Lifetime Value (CLV) and Customer Equity were applied in financial services
initially but were then introduced in most of the service organizations based on their ability to
accurately estimate customer profitability (Berger and Nasr, 1998). Customer Relationship
Management (CRM) came into prominence because it aimed at customer contact through
various contact media which ultimately lead to the design of a mix of marketing interventions for
each customer individually ( DeWulf et al., 2001; Rust and Verhoef , 2005)
In recent years, the most important advancement has been the conceptualization of
models that focus marketing expenditures on individual customers (Reinartz et al.,2004), link
marketing investments to CLV and customer equity (Rust et al.,2004), and ultimately connect
customer equity to the market capitalization of the firm (Gupta et al.,2004) . Models have tended
increasingly to emphasize customization and personalization (Ansari and Mela, 2003), and to
draw on elements of the emerging technological environment, such as the Internet and
information service products (Jain and Kannan, 2002).
Managing services through service demand, service pricing and service guarantees has
also gained prominence. The key characteristic of service demand is that timing matters and
since service demand is perishable it is important to manage the timing. Managing demand also
13 involves strategies for pricing over time. Service guarantees provide reduce consumer risk.
(Rust and Chung, 2006)
1.3 The Emerging areas of interest in Service Marketing
As the data collection, storage, and analysis about individual customers proliferates,
concerns mount about the potentially improper use of this information, leading many consumers
to seek better protection for their privacy (Peterson, 2001). Yet, that same data collection,
storage, and analysis permits companies to customize their offerings and serve customers better.
The result is a trade-off between privacy and customization (Rust et al., 2002) and due to this
inherent conflict an optimum management policies need to be made to steer around this tradeoff.
Oliver et.al (1998) emphasized on real-time marketing being the next frontier of growth.
This approach requires receiving the needs of the customer, and then calculating and formulating
the optimal product in real time. This area needs to be developed to show how optimal real-time
marketing decisions can be made, and how customer data should be optimally stored, trading off
privacy and speed against data storage capacity.
Foundation for maintaining service relationships is the fulfillment of promises made to
customers (Gronroos, 1990). For service providers this implies three essential activities, making
realistic promises in the first place, keeping those promises during service delivery and enabling
employees and service systems to deliver promises made. All three activities are essential to
attracting and building service relationships and all three can be linked to specific services
marketing activities.
Borrowing from Gronroos (1990), Kotler (1994) has termed these essential marketing
activities as external marketing, interactive marketing and internal marketing. For service
14 organizations, all three types of marketing activities are essential for building and maintaining
relationships with customers. It is not enough to make attractive promises through effective
external marketing. These promises must be delivered often in real time, by employees and
service delivery systems. And to deliver this employees and systems must be enabled through
appropriate skills, training and the right equipment (Bitner, 1995).
Service networks is also an emerging area where an entire network of service providers is
required to provide the complete service that the customer requires (Ghosh & Craig, 1986). An
example is an airline flight which provided the airplane, pilots and crew, and the passenger
check-in, but the service will not be successful without the participations of many other service
providers, including the food caterer, air traffic controller, refueling personnel and security staff.
The need is therefore to better understand the interactions between these different dimensions of
service.
E-commerce too has made rapid strides in this domain. This opens up the important
research area of customer satisfaction, retention, word of mouth, and cross-selling online. The
need is to know not just what customers do in any particular e-commerce contact (as we see in
most existing click stream research) but also what they do across multiple contacts. We need to
investigate the kind of online and offline services required for the customer to promote growth of
the customer relationship.
Customer Experience is gaining prominence in organizations striving towards providing
favorable experiences to customers with the product or service. These experiences are further
influenced by the employee interface with the customer and the effect of servicescape on
customer experience. A number of studies have shown that the physical environment and human
15 interaction dimensions can impact consumer experiences of purchasing and consuming products
and services (Baker, 1987; Bitner, 1992; Carbone & Haeckel, 1994; Pullman & Gross, 2004).
Branding has emerged as the principal success driver for service organizations were the
company becomes the primary brand (Berry, 2000). Due to the intense competition between
services marketing organizations brand development has become crucial in services. Strong
brands are built through branding distinctiveness, message consistency, performing core services
well, connecting to customers emotionally and building trust with the brand.
The service-dominant logic of Vargo and Lusch (2008) states that service is the
fundamental basis of exchange and that the customer is a co-creator of value and all economies
are service economies, besides a few more. The logic is to provide the philosophical and
conceptual foundation for the development of service science.
The intrigue stems from the fact that service science has the potential of taking the
perspective of value co-creation and exchange beyond the market by providing a systems
orientation that takes the issues out of the economic arena and re-contextualizing them. Thus,
ironically, it has the potential of shedding light on the role of exchange between and among
service systems at different levels of analysis (e.g., individuals, organizations, social units,
nations, etc.), thus enriching marketing in ways that are difficult from its usual tighter, enterprise,
economic and normative focus.
1.4 Gaps in Service Marketing Research
Literature on contact employee and customer relationships has emerged recently. This
research documents the importance of service encounters or what Kotler calls “interactive
marketing”. As customer expectations increase, we envision frontline service employees
assuming the role of consultant and salesperson more frequently. Organizations will rely on these
16 representatives not only to provide the service but also to solve customers’ problems, gather
information on customer needs and preferences, and cross-sell additional services.
Service researchers have virtually ignored the value-added chain and instead have chosen
to focus on the final consumer. There is a need to broaden the scope of services research to
embrace topic like reverse marketing and other forms of organizational alliances. There also lies
a need of providing a service internally or looking to the external market (outsourcing) is an
additional area of needed research. Understanding the linkages between customer satisfaction
and employee satisfaction also demands further research.
Unlike tangible goods, one hundred percent quality cannot be engineered into a service,
especially when even the definition of the service is in the eyes of the customer. Hence the need
to orchestrate Service Recovery in a manner which best addresses the needs of the customer.
There lies a need to study research on consumer complaining behavior, managerial responses to
these behaviors and employee-customer complaint interactions and resolutions.
Another topic of research would be on reverse marketing where the organization needs to
set norms for their suppliers to meet and exceed the same customer satisfaction standards that
they set for themselves. The view of employees as customers and their exchanges and
relationships have been discussed in the literature but not subject to extensive research.
The current services literature is implicitly mired in the paradigm of “low tech and high
touch”. Due to the high levels of human interaction some writers have explicitly downplayed the
potential contributions of technology to services marketing. New technology is helping empower
service employees by giving them more information more quickly for use in deciding how best
to serve customers. The impact of technology on the entire service industry and organizational
structures and business methods demands further research as well (Quinn, 1992).
17 Service experts would like to see greater substantiation of the role that services and
service quality play in attaining desired business outcomes, such as profitability, customer
satisfaction and loyalty. In addition, there appears to be an interest in further explication of the
service delivery process in terms of both the customer-employee interface and the customers'
experience in general. The need exists for exploration of the relationship between services and
manufacturing, with a particular focus on the shift to services occurring among many
organizations that have typically been perceived as manufacturing concerns.(Grove, Fisk and
Joby , 2003)
Service strategy is the first step of the service design planning process and hence the
management needs to choose the desired service level. Research needs to reflect on the
determination of the service level. How does competitor offering drive the decision of the type of
relationship that the firm wishes to pursue with the customer? How should a service organization
strive to be a service leader? Should it try to be a middle-of-the-road provider or a service
laggard? (Goldstein et al., 2002)
Whatever the implications, the future of service marketing development and
improvement will depend on the management of all activity by continuously focusing on the
quality of management decision making and attention to detail in all service implementation
activities. This will entail keeping abreast of new technological developments, continuously
assessing how these may help improve service delivery, and monitoring customer needs. The
development of managerial abilities and competencies to match these managers’ challenges is
vital. Service managers need competencies to give them the ability to harness the benefits of
advancing technologies to ensure competitive service quality. Equally service managers need to
18 be effective and proactive communicators with both employees and customers, in relation to all
aspects of the business. (Gilmore, 2003)
1.5 Problem Statement
Literature in marketing, retailing and service management historically has not considered
customer experience as a separate construct. Instead researchers have focused on measuring
customer satisfaction and service quality (Parasuraman, Zeithaml and Berry, 1988; Verhoef,
Langerak and Donkers, 2007). It is not that customer experience has not been considered it has
but not as a holistic construct.
Holbrook and Hirschman (1982) theorized that consumption has experiential aspects (see
also Babin et al. 1994). Schmitt (1999) has explored how companies create experiential
marketing by having customers sense, feel, think, act and relate to a company and its brands.
Berry, Carbone and Haeckel (2002) suggest that in order for organizations to compete by
providing customers with satisfactory experience they must orchestrate all the “clues” that
people detect in the buying process.
It is therefore imperative to look at customer experience construct as holistic in nature
and involving the customer’s cognitive, affective, emotional, social and physical responses to the
retailer. This experience is created not only by those elements which the retailer can control (e.g.
service interface, retail atmosphere, assortment, price) but also by elements that are outside of
the retailer’s control (e.g. influence of others, purpose of shopping). (Verhoef et al, 2009)
Lack of research on the determinants of customer experience take us to the path were we
explore the relationship between employee interaction and customer experience. The
servicescape plays a vital role in influencing the customer experience and that too needs to be
19 explored. Finally the outcome of the service and its relationship with customer experience needs
to be researched.
The other two elements that need special focus and attention which have not been looked
at in earlier research simultaneously are Customer-to-Customer Compatibility and Self Service
Technology.
In the Indian context studying Customer Experience is relatively new and the researcher
has made an attempt to study it this gap between conceptual notion of customer experience and
the lack of empirical evidence generates a number of important questions. For example what
exactly is customer experience? What specific perceived items compose an experience from the
customer’s perspective? How are experiences measured and in what context do they exist? What
role does income of the customer play in determining the customer experience? What
relationships do the constructs like Interaction Quality, Service Environment Quality, and
Outcome Quality have with the customer experience? This gap calls for a more empirical
investigation in order to gain a better understanding of this important concept and its
relationships.
1.6 Purpose of the Study
The purpose of this study is to understand what constitutes Customer Experience of an airline
traveler and the antecedents of Customer Experience are in the Indian context. The research
questions for the study are given below:
1) What specific items define the structure of Customer Experience for an airline traveler?
2) What items constitute Interaction Quality for an airline traveler?
3) What items constitute the Service Environment Quality for an airline traveler?
4) What items constitute the Outcome Quality for an airline traveler?
20 5) What kind of relationship exists between Interaction Quality, Service Environment
Quality and Outcome Quality?
6) To understand which amongst the above three is a mediating variable?
7) Which amongst the above three has a relationship with Customer Experience?
8) What items constitute Self-Service Technology?
9) Is there a relationship between Self – Service Technology and Customer Experience?
10) What items constitute Customer-to-Customer Compatibility?
11) Is there a relationship between Customer-To-Customer Compatibility and Customer
Experience?
12) The moderating role of purpose of travel (for leisure or business) and income on
Customer Experience.
1.7 Significance of the Study
The main contribution of this study was to understand the antecedents of Customer
Experience for an airline traveler. This holistic conceptualization of the customer experience will
help the organization focus on delivering a comprehensive offering to the airline traveler in order
to provide him a favorable customer experience.
The airline industry will benefit immensely from understanding the factors which will
lead to customer experience of an airline traveler. This will in turn help them focus their
resources on areas of immediate attention and strengthen their offerings to the customers.
The research objectives are as follows:
1) To Understand the Customer Experience of an Airline Traveler
2) To study the effect of Interaction Quality and Service Environment Quality
3) To study the effect of Service Environment Quality and Outcome Quality
21 4) To study the effect of Outcome Quality on Customer Experience
5) To study the effect of the usage of Self-Service Technology on Customer Experience
6) To study the effect of Customer-to-Customer Compatibility on Customer Experience
7) The study the effect of purpose of travel and income on Customer Experience
In summary, this chapter looked at the emergence of service marketing and the research in
services marketing till date. The areas of interest in services marketing were highlighted, where
the concept of customer experience gained prominence. The gaps in services marketing research
were identified. The research questions were framed and the research objectives clearly stated.
The second chapter discusses the background and the emergence of the concept of customer
experience. The literature review looked at the importance of Interaction Quality, Service
Environment Quality and Outcome Quality in a service setting. The emergence of the role of
technology and Customer-to-Customer Compatibility was also studied. A theoretical framework
with related definitions and research hypotheses was proposed.
22