Relationships Among Service Quality

transactionhips among work Quality, Image, Customer Satisfaction and trueness in a Hong Kong Franchised muckle Company Iris M. H. Yeung* Abstract Market sh be of franchised coaches in Hong Kong decreases since 2004 irrespective of change magnitude in utility prime(a) as inform by Tang and Lo (2010). This paper check outs how utility calibre, pattern, happiness and obedience argon cogitate to gain insight on the diminish market contri scarcelyion problem establish on info dispassionate from passengers of a franchised jitney company in Hong Kong in 2004.The geomorphological equation layling results keep up the hypothesis that (1) utility persona affects bliss and insure computely, (2) photograph affects general satisfaction and the true head uply, and (3) either boilersuit satisfaction affects faithfulness rangely. However, the results do not support the hypothesis that usefulness fictional character affects consignment purposely. inspection an d repair select has only indirect center on subjection through look-alike and overall satisfaction. So even though the proceeds type whitethorn be increasing, the indirect act of expediency of process timbre on subjection is not adequate to subjoin market grapple.Keywords visit, obedience, everyday delight, satisfaction, advantage quality, morphologic equation model. Field of Study Customer Service and Customer Relations Introduction In Hong Kong, public deification is the dominant transport mode, history for approximately 90% of daily passenger journeys over the past 10 years (Transport segment (1999, 2003)). Public transport comprises railways, franchised flockes, public light spatees, machine politician go, non-franchised great deal emolument for residents, ferries, railway feeder good deales, and peak tramways.Among these modes, railways and franchised four-in-handes play an cardinal role, carrying over seven million passenger journeys per day, or approximately 70% of the issue forth public transport patronage (Transport Department (19952010)). Market part of franchised buses is broadly spunkyer than that of railways. In 2002, market shargon of franchised buses peaked at 39. 8%, whereas market share of railways at the eon was a untainted 32. 3%. However, with the opening of new rails, market shares of franchised buses and railways were 32. 4% and 38. 8% individually in 2010.Other than competition from other modes, franchised buses compete with each other as well for the operating right of new bus routes. Moreover, the franchise fucking be terminated based on poor performance. Thus, service quality is essential to maintain market share and increase pro apparelability chthonic fierce competition. Iris M. H. Yeung , Department of precaution Sciences, City University of Hong Kong, Kowloon Tong, Kowloon,Hong Kong, Tel. + 852-3442-8566 Fax + 852-3442-0189, e-mail address emailprotected edu. hk (I. M. H. Yeung) YeungIn fact, quality of services for both railways and franchised buses has continuously improved over the past years. Using Mass Transit Railway (MTR) and Kowloon Motor autobus Limited (KMB) as references, Tang and Lo (2010) commented that the quality of rail and bus service provision improved from 1984 to 2004, particularly in name of service show and based on technical footfalls such as vehicle-kilometre per capita and real bed increase rate. However, market share of franchised buses, including KMB, started to drop since 2004 irrespective of increase in service quality as reported by Tang and Lo (2010).As passengers conclude on which transport mode to take, this paper investigates how service quality, prototype, satisfaction and loyalty are tie in in order to gain insight into decreasing market share problem from passengers? perspective. In line with Tang and Lo? s exact, the analysis is based on a in physical composition set collected from passengers in 2004. Further, among a ll the franchised bus operators in Hong Kong, KMB has the longest history and is currently the largest, occupying approximately 70% of the franchised bus share in Hong Kong. Thus, KMB? quality of service affects many another(prenominal) people in Hong Kong it is of interest to a large share of the population and therefore merits investigation. The remainder of the paper is organized as follows. segmentation 2 presents the literature review of the four constructs and the look into hypothesis of the proposed morphologic model. Section 3 describes the question methodology. The results of exploratory fixings analysis (EFA), corroboratory constituent analysis (CFA) and structural equation model (SEM) are provided in Section 4. Finally, Section 5 presents the concluding remarks with limitations of the study and suggestions for future research directions.Literature Review Service quality Parasuraman et al. (1985, 1988) developed the SERVQUAL instrument, which consists of 22 attrib utes under fin distinct dimensions (i. e. , dependableness, assurance, tangibles, em roomy, and responsiveness). They outlined service quality as the difference or gap in the midst of nodes? expectations and comprehend performance and proposed to use gap pull ahead to measure service quality. Despite the widespread use of SERVQUAL in heterogeneous industries and countries, some scholars such as Brady et al. (2002), Cronin and Taylor (1992, 1994), Zhao et al. 2002) reported that service quality is much than accurately assessed by the perceptions of quality rather than the gap? scores. Another rebuke on the SERVQUAL instrument is that the 22 associated attributes invite been deemed inappropriate, or that they lavnot be but adopted for measuring service quality in all service industries (Cronin and Taylor, 1992 Lai and Chen, 2011). According to Ladhari (2009), 30 industry-specific measures of service quality have been developed between 1990 and 2007 in different industries and countries. somatic word-painting unified mental image prat be defined as the overall impression that is formed in people? minds about a firm (Barich and Kotler 1991). Some researchers thought that service quality affects image (See, for example, Ostrowski et al (1993), Aydin and Ozer (2005), Nguyen and LeBlanc 1998). Also, it has been reported that bodily image basin also affect node satisfaction and client loyalty (see, for example, stag and Rosenberger 2004). 2 Yeung Customer satisfaction According to Oliver (1997, 2010), customer satisfaction is defined as a nous that a yield or service provided a pleasurable aim of consumption-related fulfillment. Also there are dickens levels of individual consumer? satisfaction transaction-specific satisfaction and cumulative satisfaction. Transaction-specific satisfaction or represent satisfaction is identified as a fulfillment chemical reaction to a single transaction or encounter, whereas cumulative satisfaction is a jud gment based on many occurrences of the same experience and not only when unmatchable- sentence experience. For both cases (encounter satisfaction and cumulative satisfaction), satisfaction is either defined as an overall judgment of satisfaction or decomposed into satisfaction with performance or quality attributes (Cronin and Taylor 1992). Overall cumulative satisfaction is commonly employ by researchers such as Mittal et al. 1999 and Spreng et al. 1996. Loyalty According to Oliver (1997 P3922010), loyalty is defined as a deeply held commitment to rebuy or repatronize a preferent product or service unchangingly in the future, thereby causing exigent same-brand or same brand-set purchasing, despite situational influences and marketing efforts that have the potential to baffle switching fashion. There are two approaches to customer loyalty behavioural and attitudinal.Behavioral loyalty refers to a customer? s actual behavior to repeat purchases of products or services and pe p up whereas attitudinal loyalty refers to a customer? s purport to repurchase and willingness to recommend. Attitudinal loyalty is more commonly utilise in many research studies (Loureiro and Kastenholz 2011) and relatively easy to measure. Relationships among perceive service quality, incorporate image, overall satisfaction, and loyalty There is much previous research exploring the quality-satisfaction-loyalty (QSL) relationship.It is generally believed in marketing and service industries that (1) good service quality results in customer satisfaction, (2) good service quality attracts customers and hence wind instrument to customer loyalty and (3) high satisfaction level is likely to render customer loyalty. However, it has also been reported that satisfaction whitethorn not be adequate enough to contain to loyalty, though loyal customers are roughly typically satisfied (Cronin and Taylor 1992 Cronin et al 2000). Furthermore, corporate image is also institute to affect cu stomer satisfaction and loyalty.Customers who develop a corroborative image towards a company will tend to have high customer satisfaction through a halo effect (see for example, hart and Rosenberger 2004 Lai et al 2009). Hart and Rosenberger (2004) reported that image has a marginally significant direct effect on customer loyalty, but a substantial effect mediated by customer satisfaction. Therefore, image can affect loyalty directly and indirectly. Based on the above literature review, this paper take aways the structural model presented in Figure 1. The hypothesis proposed in the model are given below H1 Service quality has a significant, official and direct effect on orporate image. 3 Yeung H2 Service quality has significant, positive, and direct effect on customer satisfaction. H3 Service quality has a significant, positive and direct effect on loyalty. H4 collective image has a significant, positive and direct effect on customer satisfaction. H5 incorporated image has a significant, positive and direct effect on loyalty. H6 Customer satisfaction has a significant, positive and direct effect on loyalty. Methodology Sampling and info accrual The target population of this study comprises purely KMB passengers.KMB has three main types of bus routes running through urban Kowloon, the New Territories, and crossharbour. Stratified sampling was active to select the bus routes within each type of stratum urban Kowloon, New Territories, and cross-harbour. Passengers over 16 years old waiting at the bus engine blocks or stations to ride the selected bus routes and had ridden a KMB bus in the previous month were invited for hearing. A total of 855 passengers were arbitrarily selected to complete the questionnaire only 636 samples were valid and included in the analysis. Successful solution rate was 74. %. To complete the questionnaire, passengers must be waiting for the bus at the bus stop. It should be noted that passengers arriving at the bus stop and embarkation the bus immediately with little or no waiting intent are relatively difficult to interview. Thus, the questionnaire must be as on the spur of the moment as possible to encourage response, taking into consideration that respondents may slow lose their patience or may be in a hurry, as well as the fact that buses may arrive during the interview. The beat for conducting the survey was scheduled from 700 a. m. to 1100 p. m. n both weekdays and weekends to interview both peak-hour and non-peak-hour passengers. The interview was conducted in Cantonese in March 2004. Measurement and Data Analysis Based on a comprehensive review of the transport literature, detailed search on the printed materials and KMB Web sites, and results of focus groups, 15 attributes of service quality were derived. The order of these attributes in the questionnaire is as follows clarity of bus trope design, bus route map, bus stop location, fare, discount, bus frequency, bus punctuality, bus serv ice time, bus route insurance reporting, locomotion/driving natural rubber, driver military capability (anything related to he driver other than driving such as politeness and friendliness, caring about the safety of passengers when they board get on or off the bus), bus cleanliness, roll in the hay design (such as comfort, seat layout, leg space), air-conditioning, and bus stop schooling. Passengers? perception of the performance of service quality are measured by asking them to rate each service quality attribute on a satisfaction casing (1 = actually(prenominal) dissatisfied and 5 = very satisfied). This type of bar scale is used by researchers such as Huang et al. (2006), Lin et al. (2011), and tam-o-shanter et al. (2005).The overall satisfaction, corporate image and loyalty are measured by a singleitem. Although the use of single-item measures may purposelessen the estimated relationships, such measures have been used successfully in many research studies (see for ex ample, Bolton and Drew 1991 Bolton and stinker 1999 Cronin and Taylor 1992 Brunner et al 2008 Mittal, Kumar and Tsiros 1999). As mentioned above, the questionnaire must be short enough to encourage response. Use of multi-item scales for overall satisfaction, corporate image and loyalty will recall longer questionnaire and may affect the response rate and overall reliability.Therefore, single-item measures for these three constructs are considered adequate for this exploratory study. 4 Yeung Overall satisfaction is measured on a 5-point Likert scale with (1=very dissatisfied and 5 = very satisfied). As the respondents had ridden a KMB bus in the previous month, overall cumulative satisfaction is appropriate in this study. Corporate image is measured on a cinque-point scale from very rubber to very good whereas customer loyalty is measured by the intention to increase ridership in the coming month on a phoebe bird-point scale from definitely will not to definitely will.Repurchase intention and willingness to recommend others are two common indicators of loyalty. As Hong Kong people are already familiar with KMB and its service and hence it is less necessary for the respondents to recommend KMB bus service to others, so this study uses repurchase intention only to measure loyalty. In this paper, we conduct exploratory factor analysis (EFA), confirmatory factor analysis (CFA) and structural equation model (SEM) to these data. Results and Discussion Exploratory and confirmative divisor Analysis Because two attributes bus route coverage? and bus stop cultivation? have cross loading and low reliability problems, EFA is performed on the remaining 13 service quality attributes using dominion axis factoring extraction method and orthogonal rotation. The results of EFA on comprehend service quality are shown in sidestep 1. Five factors with eigenvalue greater than one are retained. The factors are labelled as follows. compute 1 is super related with bus pun ctuality, bus frequency, and service time thus, it represents reliability. Factor 2 is highly related with bus route map, bus digit sign, and bus stop information thus, it represents bus travelling information.Factor 3 is highly related with seat arrangement, air-conditioning, and cleanliness thus, it represents bus environment. Factor 4 is highly related with fare and discount thus, it represents price factor. Finally, Factor 5 is highly related with driver attitude and travel safety thus, it represents driving or travelling factor. Cronbach? s alpha level for the flipper factors varies from 0. 658 to 0. 745, which are above the generally agreed lower limit of 0. 6 and hence suggesting high intragroup consistency among the variables within each factor (Nunnally and Bernstein, 1994).The results of performing CFA on the perceived service quality scores are shown in cards 2a and 2b respectively. All truth of primed(p) statistics shown in the bottom part of circuit board 2a sugg est that the measuring model for the service quality has a good fit to the data small ratio of chi-square value to degrees of freedom (2. 03) goodness of fit great power (GFI), goodness of fit index adjusted for degrees of freedom (AGFI), Bentler? s comparative fit index (CFI), normed fit index (NFI), and non-normed fit index (NNFI) are greater than the sceptre value of 0. and root mean square oddment (RMR) and root mean square error of approximation (RMSEA) are more below the threshold value of 0. 05. The measurement model for the service quality also has high validity and reliability. Firstly, standardized factor loadings and t set of the factor loadings being significantly different from zero at the 0. 001 level support the convergent validity of all attributes. Further, as none of the correlational statistics between the factors is greater than the square root of the AVE for the corresponding factors (see Table 2b), the perceived service quality scores demonstrate discr iminant validity.Secondly, the composite reliability of all five factors exceeds the minimally acceptable value of 0. 6. Moreover, four out of five factors have form extracted estimate (AVE) greater than or close to the threshold value of 0. 5. Only the bus environment? factor has an average form estimate below the threshold value. However, this test is conservative. Therefore, as a whole, it can be concluded that the perceived service quality scores have 5 Yeung good reliability. Five summated scales are created and used as indicators for the latent construct perceived service quality in the subsequent structural equation model.Structural equation model (SEM) A structural model is fit to the perceived service quality, corporate image, overall satisfaction and loyalty data according to the model social structure given in Figure 1. The path between service quality and loyalty is found to be undistinguished and dropped based on Wald tests. The goodness of fit indices for the revis ed structural model, shown in the bottom part of Table 3, suggest a good fit to the data small ratio of chisquare to degree of freedom ( 2), great set of GFI, AGFI, CFI, NFI, NNFI ( 0,9) and small RMR and RMSEA values ( 0. 05).The estimation results in Table 3 predict that both H1 (quality ? image) and H2 (quality ? satisfaction) are strongly support, with standardized path coefficients of 0. 523 and 0. 386 respectively. However, H3 (quality ? loyalty) is not supported based on insignificant standardized path coefficient. It can be seen below that service quality has only indirect effect on loyalty through overall satisfaction and corporate image. So it indicates that high service quality is not adequate to create loyal customers for franchised bus company. The estimation results show moderate support for H4 (image ? atisfaction) with the standardized path coefficient of 0. 192 whereas weak support for H5 (image ? loyalty) and H6 (satisfaction ? loyalty), with the corresponding sta ndardized path coefficients of 0. 105 and 0. 124 respectively. To summarize, the results support five out of six hypothesis (H1 H2, H4 H6). Furthermore, the magnitude of the support is strong for H1 and H2, ordinary for H4 and weak for H5 and H6. In terms of explanatory power, the model accounts for 26. 3% of the variance in overall satisfaction, 27. 4% of the variance in image and 3. 6% of the variance in loyalty. In other words, he model has mass medium explanatory power for both overall satisfaction and image but low explanatory power for loyalty. The low explanatory power for loyalty may imply that there is not much guarantee that a customer with good perceived service quality, overall satisfaction and corporate image will be loyal and repeat purchase. The management should consider other factors that affect loyalty apart from service quality, overall satisfaction and corporate image. The direct, indirect and total effects of service quality, corporate image and overall sati sfaction on loyalty is given in Table 4.It is interesting to see that corporate image plays a more eventful role than overall satisfaction in affecting loyalty, which are consistent with the findings of researchers such as Abdullah 2000. Concluding Remarks EFA concludes that there are five factors behind the perceived service quality scores. According to CFA, the measurement model for this five-factor structure performs well in terms of validity and reliability and hence five summated scales can be used as indicators for service quality in developing structural model. SEM supports the sequence service quality ? corporate image? verall satisfaction? loyalty. However, it is found that service quality affects loyalty only indirectly through overall satisfaction and corporate image. So it may condone why high service quality is not adequate to lead to customer loyalty. The table of indirect, direct and total effects of service quality, overall satisfaction and image on loyalty shows t hat corporate image has higher(prenominal) total impact on loyalty, as 6 Yeung compared with satisfaction. So to increase loyalty, improving the corporate image of KMB in passengers? mind is more great than improving satisfaction.As the explanatory power of these three constructs (service quality, overall satisfaction and image) for loyalty is very low (3. 6%), it seems that efforts are still needed to increase loyalty through other means. There are several limitations in this study. The generalizability of this study is limited due to three reasons. Firstly, this study used one single item only to measure overall satisfaction, corporate image and loyalty to reduce the burden of respondents and the time for the interview. For further research, multiple-item scales are preferred so that their validity and eliability can be assessed through CFA. Also they may enhance the interpretation and prediction of overall satisfaction and loyalty. Secondly, the analysis is based on a survey dat a set collected in March 2004 when the market share of franchised buses such as KMB began to decrease. However, further study is necessary to examine whether the relationships among service quality, customer satisfaction, corporate image and customer loyalty change with time. Thirdly, the explanatory power for loyalty in terms of service quality, customer satisfaction and corporate image is low.Further analysis to investigate the predictors of loyalty other than service quality, overall satisfaction and corporate image is needed. References Abdullah M, Al-Nasser A and Husain N (2000). Evaluating functional relationship between image, customer satisfaction and customer loyalty using general maximum entropy, Total Quality counselling, vol 11, P. S826-9. Aydin S and Ozer G (2005). The analysis of antecedents of customer loyalty in the Turkish mobile telecommunication market. European diary of Marketing, 39 (7/8), P910-925.Barich H and Kotler P (1991),A framework for marketing image management,, Sloan Management Review, P94-104. Bolton R N and Drew J H (1991). 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Government of the Hong Kong special administrative region. 8 Yeung Zhao X, Bai CH, Hui YV (2002) An empirical assessment and application of SERVQUAL in a Mainland Chinese department store.Total Quality Management 13241-254. 9 Yeung Table 1 Five-factor structure of perceived service quality scores and Cronbach? s Alpha (with attributes bus route coverage? and bus stop information? being deleted) Service quality Attributes uncloudedness of bus number sign transport route map mass stop location Fare Discount Bus frequency Bus punctuality Bus service time Bus route coverage (NA) Travel safety Driver attitude Cleanliness Seat arrangement Air-condi tioning Bus stop information (NA) Factor 1 Factor 2 0. 632 0. 865 0. 449 Factor 3 Factor 4 Factor 5 . 777 0. 649 0. 652 0. 902 0. 407 0. 799 0. 551 0. 520 0. 780 0. 495 Eigenvalue 4. 11 1. 44 1. 27 1. 11 Variance (%) 31. 61 11. 08 9. 76 8. 52 Cronbach? s alpha 0. 745 0. 722 0. 658 0. 726 Overall MSA = 0. 797, cumulative variance explained = 68. 70%, communality = 6. 853 Root mean square residual = 0. 012, RMSP = 0. 024, Cronbach? s alpha = 0. 816 1. 01 7. 73 0. 693 10 Yeung Table 2a Results of confirmatory factor analysis on perceived service quality Loadin g 0. 728 0. 795 0. 557 0. 751 0. 765 0. 736 0. 876 0. 535 t 18. 0 1 19. 7 3 13. 4 6 16. 3 16. 4 4 19. 0 0 23. 0 8 13. 2 8 17. 5 4 14. 7 9 Reliabilit y 0. 739 0. 530 0. 632 0. 311 0. 729 0. 564 0. 585 0. 766 0. 541 0. 767 0. 286 0. 703 0. 663 0. 426 Variance Extracted 0. 491 Bus information factor Clarity of bus number sign route map Bus Bus stop location Price factor Fare Discount Reliability factor Bus frequency Bus punctuality Bus service time Bus route coverage (NA) Driving factor Travel safety Driver attitude 0. 574 0. 532 0. 545 0. 814 0. 653 Bus environment factor 0. 663 Cleanliness 0. 677 15. 1 0. 459 9 Seat arrangement . 675 15. 1 0. 456 5 Air-conditioning 0. 531 11. 9 0. 282 2 Bus stop information (NA) snuff it indices Chi-square = 130. 55, df = 55, Chi-square / df =2. 03 GFI = 0. 969, AGFI = 0. 949, CFI = 0. 966, NFI = 0. 943, NNFI = 0. 951 RMR = 0. 023, RMSEA = 0. 047 0. 399 Table 2b Correlation between factors for the measurement model on perceived service quality Bus information Price Reliability Driving Bus environment Bus information 0. 701 0. 451 0. 404 0. 474 0. 334 Price ? 0. 758 0. 453 0. 393 0. 340 Reliability ? ? 0. 729 0. 461 0. 438 Driving ? ? 0. 738 0. 519 Bus environment ? ? ? ? 0. 631 11 Yeung Table 3 Standardized path coefficients of the Structural Model Standardized line of reasoning estimates 0. 566 0. 558 0. 641 0. 586 0. 503 0. 523 0. 386 -t-value Hypothesis Conclusion Indep endent variable ? Dependent variable Service quality ? Bus information Price Reliability Driving Bus environment Corporate image Overall satisfaction Loyalty Corporate image ? Overall Satisfaction Loyalty 9. 99 -10. 71 10. 19 9. 23 9. 4 6. 6 -1 2 3 support Supported Not supported 0. 192 0. 105 4. 26 2. 7 4 5 Supported Supported Overall satisfaction ? Loyalty 0. 124 2. 92 Fit indices Chi-square = 27. 7, df = 18, Chi-square / df = 1. 54 GFI = 0. 989, AGFI = 0. 978, CFI = 0. 988, NFI = 0. 967, NNFI = 0. 981 RMR = 0. 009, RMSEA = 0. 029 6 Supported 12 Yeung Table 4. Direct, Indirect and total effects on loyalty Direct Indirect -0. 105 0. 124 0. cxv 0. 024 Total 0. 115 0. 129 0. 1240 Service quality Image Satisfaction Corporate image H1 Service Quality H4 H2 H6 H5 Loyalty Figure 1 vatic Structural Model Satisfaction Overall H3 13