1. INTRODUCTION TO THE STUDY.

The nature of most services is such that the customer is present in the delivery process.
This means that the perception of quality is influenced not only by the service outcome but also by
the service process. This study explores the relationship between service quality and customer
satisfaction on customer loyalty with regards to service provided by Holiday inn hotel.

Today, companies face their toughest competition ever. Moving from a product and
sales philosophy to a holistic marketing philosophy, however, gives them a better chance of
outperforming the competition. And the cornerstone of a well-conceived marketing orientation is strong
customer relationships. Service quality leads to higher customer loyalty. Services of hotel unfavourable
image leads to dissatisfaction. Factors like Customer perceived value (CPV) have direct effect on the
customer’s decision. Customer perceived value is the difference between the prospective customer’s
evaluation of all the benefits and all the costs of an offering and the perceived alternatives. Total
customer value is the perceived monetary value of the bundle of economic, functional, and
psychological benefits customers expect from a given market offering because of the products, services,
personnel, and image involved. Total customer cost is the perceived bundle of costs that customers
expect to incur in evaluating, obtaining, using, and disposing of the given market offering, including
monetary, time, energy, and psychic costs. In the end, the buyer will buy from the source he thinks
delivers the highest perceived value. Customer Satisfaction: Customer satisfaction is the internal
feelings of every individual which may be satisfaction or dissatisfaction resulting from the assessment
of services provided to an individual in context to customer’s anticipation by an organization improve
the service just to satisfy their customer because higher customer satisfaction will leads towards
customer loyalty. The most important concept of customer satisfaction is accepted all around the world
is the expectancy disconfirmation theory [16]. This theory was presented by Oliver in 1980, he
presented that satisfaction stage is the resultant of distinction between anticipated and supposed
performance. Satisfaction will be encouraging when the actual level of services or products is better
than the anticipated (positive disconfirmation), whereas (negative disconfirmation) when the product
or services level is lower than expected These errors can be improve by giving questionnaire to the
hotel guests and give them incentives for completion of the questionnaires.

Customer Loyalty:

The customer loyalty in their research that “customer who repurchases from the same
service provider whenever possible and who continues to recommend or maintains a positive attitude
towards the service provider.” Julander et al., (1997) explained that customer loyalty has two
magnitudes: the first one is behavioural and the other is attitudinal. The behaviour loyalty means the
customer is intend to repurchase the brand or services from the service provider over time, whereas,
attitudinal loyalty means the customer intend to repurchase and also recommend other which is the
 good sign of customer loyalty. Some empirical researches suggest that there is strong activist
relationship between customer satisfaction and the most important variable that is customer loyalty.
Moreover, service quality studies proposed that higher service quality will leads towards higher and
positive customer repurchase behaviour.

Brand Image:

The brand is one of the important assets of the company. Brand image is “brand is reflected
by the brand links held by in consumer memory”. In simple words brand image is basically what
comes into the consumers mind when brand placed in front of him. Consequently, these associations
are building up into the consumers mind from the direct experience of service they have, after those
experiences they make conclusion by contrasting their previous experiences with the company and
the set associations [2]. There are many empirical evidences that proved that customer loyalty and
brand image have positive correlation with each other .Whereas, other researches proved positive
contact on brand image by that service quality and customer satisfaction comprise positive
relationship with brand image.

Another study found that image is positively related with customer satisfaction and customer
preference in lavishness hotels. This showed that pleasing image leads towards customer preferences
and customer satisfaction whereas, unpleasing image can leads towards customer dissatisfaction.

1.1 PROBLEM STATEMENT

Quality service is defined as the judgment or perception resulting from customers‘evaluation
processes, whereby customers compare their expectations with the service they perceive they have
received. Keeping in view the significance of service quality and customer satisfaction and loyalty, a
study is designed to examine the impact of service quality as an independent variable on dependent
variables i.e. customer satisfaction and loyalty.

The major research problems are:-

 What is the level of service quality deliver of Holiday inn Hotel

 What is the Customer satisfaction and Loyalty with Holiday inn Hotel

1.2OBJECTIVES

1. To see at whether service quality has a direct and significant effect on customer satisfaction,
customer loyalty and brand image.

2. Analyse if customer loyalty has a direct and significant effect on brand image.

3. Analyse if customer satisfaction has a direct and significant effect on customer loyalty and brand
image
 4. To assess the level of service quality of the holiday.

5. To analyse the relationship of service quality and customer loyalty and satisfaction of holiday inn
hotel

6. Make recommendations based on the findings of the study that will help to address the challenges
identified by the customer.

1.3 SCOPE OF THE STUDY

In this competitive world retaining the customers has become very important; hence it has
become part and parcel of the business. Business which can adapt to quick changes and get access to
improvised technology can survive in this stuff market conditions

1. The study can be applied to understand various level of quality services provided by the
supermarkets.

2. The study help for further studies related to customer preferences and customer loyalty.

3. The present study also helps for understand the new services for improving the quality of services

1.4 RESEAERCH METHODOLOGY

Research methodology is one of the most essential elements of a research

study as it provides a framework to accomplish a research in the most efficient manner. It is a way to
systematically solve the research problem and it may be understood as a science of studying how
research is done.

Research aimed to explain the processes involved in conducting the research, from research
design, to report preparation, as well as setting up the hypothesis for the research. Firstly, the nature
of research would be identified. Then, the conceptual framework would be introduced. The research
hypothesis would be set up. Also, the research approach and data collection processes would be
clarified and all the details about the questionnaire would be discussed. Finally, some important
techniques for data entry and analysis would be introduced. By defining the research methods in a
clear and systematic manner, the research would be more organized and the mistakes could be
minimized, which was critical to the entire study.

This chapter presents the detailed plan of how the study will be conducted. It presents the
study Design, study population, sampling techniques, data sources, data collection methods and
instruments, Data presentation and interpretation of findings.

1.4.1 Study design

The study was descriptive which was undertaken to ascertain and be able to describe the
characteristics of variables of interest in a situation, and analytical based on qualitative and
 quantitative data both from primary and secondary sources. The study was based on the views of to
make conclusions and recommendations

1.4.2 Study population

The target population was the customers and staff of Holiday inn Hotel in cochin district.

1.4.3 Sampling methods

A representation number of respondents were selected among holiday Hotel customers and
staff Using purposive sampling method and this method helped the researcher to get information by
selecting the population which conforms to certain characteristics that the researcher was interested
in.

1.4.4 Sample size

The study involved 100 respondents of which 50 were employees of holiday hotel and 50
respondents were customers of the hotel. Using non statistical method for example nature of the study,
nature of sampling, nature of respondents and other field conditions

1.4.5 DATA SOURCE

 Primary Data:

The primary data was collected by means of a survey. Questionnaires were prepared and
customers of the banks at two branches were approached to fill up the questionnaires. The
questionnaire contains 20 questions which reflect on the type and quality of services provided by the
banks to the customers. The response of the customer and the is recorded on a grade scale of strongly
disagree, disagree, uncertain, agree and strongly agree for each question. The filled up information
was later analysed to obtain the required interpretation and the findings.

Collection of primary data There are several methods of collecting primary data particularly
in surveys and descriptive researches. Important ones are as follows: 1. Observation Method

2. Interview Method

3. Questionnaire

1) Observation Method:
It is the most commonly used methods especially in studies relating to behavioural sciences.
This method implies the collection of information by way of investigators own observation, without
interviewing the respondents. The information obtained relates to what is currently happening and is
not complicated by either the past behaviour or future intentions or attitudes of respondents.
2) Interview Method:
 The interview method of collecting data involves presentation of oral, verbal stimuli and
reply in terms of oral-verbal responses. This method can be used through personal interview and, if
possible, through telephone interview. Personal Interview. The method of collecting information
through personal interview is usually carried out in a structured way. As such we call this interview
as structured interviews. Such interviews involve the use of a set of predetermined questions and of
highly standardized techniques of recording. Thus, the interviewer in a structured interview follows a
rigid procedure laid down, asking questions in a given format and the order prescribed. As against it,
the unstructured interviews are characterized by flexibility of approach to questioning. Unstructured
interviews do not follow a system of pre-determined questions and standardized techniques of
recording information.

3) Questionnaire:

The researcher and the respondents do come in contact with each other if this method of
survey is adopted. Questionnaires are mailed to the respondents with a request to return after
completing the same. It is the most extensively used method in various economic and business surveys
& research. Questionnaire to be used must be prepared very carefully so that it may prove to be
effective in collecting the relevant information.

Secondary Data:

In order to have a proper understanding of the service quality of hotel a depth study was done
from the various sources such as books, a lot of data is also collected from the official websites of the
hotel and the articles from various search engines like Google, yahoo search and answers.com

1.4.6 Data instrument

(i) Interview guide, this involved a list of questions in an organized way and were given to
respondents to give their views.

Data processing, Analysis and Presentation

1 Data processing.

This included editing, tabulation and coding.

Editing; This was done to check the completed responses with purposes of detecting and
eliminating errors and identifying vital information that was essential in coding and tabulation.

Coding; This was done according to whether or not the response was a representative of the
Objective of the study and realistic to the subject matter.
 Tabulation; This involved mainly the use of simple statistical techniques like use of tables
andPercentages to test significance of the information from which meaning interpretation was Drawn.

2 Data Analysis.

This involved organization, interpretation and presentation of collected data. The researcher
usedSPSS packages to analyse the data.

3 Data presentation

This involved presenting findings in a logical and sequential way so that conclusions can be
Drawn from them. The data was presented according to research questions and research Objectives.
Tables and figures were used to present data.

STATISTICAL TOOLS USED

 Percentage Analysis
 Correlation analysis.

 Percentage Analysis

One of the simplest methods of analysis is the percentage method. It is one of the traditional
statistical tools. Through the use of percentage, the data are reduced in the standard form with the
base equal to 100, which facilitates comparison. The formula used to compute Percentage analysis
is,

Percentage of the Respondent = No. of Respondents × 100 Total No. of Respondent

 Correlation analysis

1.5 LIMITATION OF THE PROJECT

 Customers were not interested to fill up the questionnaire.

 Accuracy of the findings depends on the truth of data given by the respondents.
 Customers have not enough time to spend with researcher.
 The study is purely academic.
 Only the customers of holiday inn hotel were considered is respondents.
2.1 BACKGROUND OF THE PROBLEM
Marketing is the art of creating, satisfying customers by meeting the needs of customers and
by creating value satisfaction for them. As Peter Drucker says ―the essence of marketing is that the
entire business has to be seen from the point given of the customer‖. However, customers face a vast
array of product and brand choices prices, supplies and to understand the needs and preferences of the
customers it becomes imperative for us to carry out research together information. As retail chain
store business is gaining popularity very quickly, people engaged in this sector should pay special
attention to the growth of this sector. Customer satisfaction of this sector can be a pivotal indicator
of how well the stores are meeting the expectations of the customers.

“Quality” in a service organisation is a measure of the extent to which the service is delivered
meets customer‘s expectations because to the customer, quality is all about meeting or exceeding their
expectation.

The national quality institute web site defined quality as follows:

Quality is in the eye of the beholder. Yet we all recognize it when we See it … … Quality is
when you are satisfied with a product or service that you go out of your way to recommend it to other
people”

Customer satisfaction is a measure of how products or services supplied by a company meet

Customer expectations. It refers to the extent to which customers are happy with the products
and
 Services provided by a business. Gaining high levels of customer satisfaction is very important
to
a business because satisfied customers are likely to be loyal, make repeated orders and use a
Wide range of services offered by a business.

The need to satisfy customer for success in any commercial enterprise is very obvious. The
Income of all commercial enterprises is derived from the payments received for the products and
Services to its external customers. Customers are the sole reason for the existence of commercial
Establishments. For customer satisfaction, it is necessary to establish and maintain certain important
characteristics like quality, fair prices, and good customer handling skills, efficient delivery and
serious consideration of customer complaints.

The best way to find whether customers are satisfied is to ask them. What you ask the
customers
Is important and how when and how often you ask these questions is also important. However,
The most important thing about conducting a customer satisfaction survey is what you do with
their answers.

They also emphasizes good customer care services and has established a customer care Desk
for its customers demand and guidance. They has a customer care service policy that caters for
customer activities. The activities for which the policy was designed include efficient and timely
delivery of services, hotel guides, security, customer attention, parking space, 24 hour front desk
services, sensitivity and attention to customer needs. However, with the existence of all efforts to
ensure the best services for its customers, the hotel continues to lose customers to its competitors like
Serena and creation of new customers is below target. The Report revealed that, the customers have
complained of high prices for accommodation and customer neglect. This situation has led to
customer dissatisfaction and as a result, they are shifting their demands and loyalty to other
organizations
Providing similar services in a manner that meets their expectations.
 2.2 INTRODUCTION TO THE INDUSTRY

The hotel industry is the servicing business conducing another significant branch in the
economic development of the country. The hotel industry associates many types of industry, such as
the tourist industry, the transportation industry, and the food servicing industry. It is apparent that
every country emphasizes on the significance of this kind of industry, with a belief that this is a source
for employment, disseminating the income of the country, conducing the country’s progression,
especially the progressing country such as Thailand. It is accepted that the hotel industry brings a high
income to the country. Therefore, the government sector and the public sector should cooperate in
promoting this kind of business. Whereby, the public sector would make the investment, and the
government sector would support. It is complacent that generally the hotel industry in Thailand is
being internationally accepted, due to the modernization of the hotel and the optimum service. The
Thai amiability to foreigners avails the progression of this kind of business. The Oriental Hotel is an
example of success for Thai Hotel, in receiving the world best hotel award for eight consecutive years.
This enables the image for the Thai hotel business to become in one of the top levels in the eyes of
foreigners. Presently, various hotels expanded the network and branches, with a belief that the hotel
business is still going well in Thailand, because people are still much interested to make a tour in this
region of the world. Moreover, the booming tourist industry is enchanting people to put in more
investment. These factors would conduct a great income to the country. More people give better
interest in the study of the Hotel Academic. There was the intense teaching, training, and learning in
this subject, to concur with the growth of this business.

On the overall, this is directly advantageous to the hospitality industry. Because administrators
and the operators attained the knowledge in the hotel business administration with a correct servicing
knowledge, this would also be advantageous to other relevant business.

THE DEFINITION OF HOTEL INDUSTRY

 Hotel: The Hotel Law, 1935 Article 3, indicated that the word hotel refers to all places
constituted to receive the payment from travelers or people who quest for lodging or temporary stay.
(Preecha Daengroj, 2001:199).

The word ‘Hotel’ in the Longman Dictionary of American English (1983:335) gave a
definition of “a building where people can stay, in return for payment”. This refers to a place where
people can stay through payment.

In the New Model English-Thai Dictionary (So Sethaputra, 2002 : 349) gave the definition
that the word ‘hotel’ refers to the big hotel, the mansion, or the government offices, such as Hotel de
Ville.

 Accommodation

Before there was the word ‘hotel’ there was the word accommodation or places for travelers,
which has a more extensive meaning than the word ‘hotel’. However, the hotel is the accommodation
for travelers who wish have lodging through payment to the proprietor.

The accommodation refers to a temporary lodging, where travelers may rest and take
a sleep. The accommodation is a prime significant for the traveling, which is important for the people,
economically, culturally, and socially.

The form of accommodation should be suitably in concordance with the environment.

This might be an endemic style or a modern style, depending on the surrounding. This conduces a
diversity of accommodation formats. Therefore, the lodging has many types and many prices, with a
variety of required conveniences.

The word ‘hotel industry’ can be concluded as the business administration pertaining
to the lodging, put up to receive payments from travelers or the people who seek for a temporary stay,
with services on the food, drink, and a systematic control on the particular administration.

HOTEL BUSINESS ADMINISTRATION FORMAT

The hotel business administration has different formats depending on the policy of
servicing in each hotel, which can be classified as follows:

1. International Chain’s Hotel

This type of hotel business is the Joint Venture operation which refers to the
participation of foreign investors.

For Thailand, in the case of a joint venture, the law stipulated that the Thai people must
hold shares of not less than 51% of the registered capital.
 The hotel business in the Chain Hotel may not be a joint venture, but an
agreement between the person paying for the license and the vender of the license in all phases of
administration, right from the administrator, the policy, the marketing, and the public advertisement
through the expertise in the hotel branch. The duration of this indenture depends upon both parties,
which the purchaser must pay for the license right, the administrative expenses, and must give
dividends to the license vender. Whereby, the name of the particular hotel conglomerate, must be
shown conspicuously; such as in the case of Holiday Inn Hotel, while the Crown Plaza is the
conglomerate hotel of the Holiday Inn; the Regent Bangkok is a member of the Regent International
Hotel; the Hyatt Erawan, Bangkok, is a hotel in the Hyatt International, etc. This character cf business
is a franchise contract (details in Chapter Nine). Each hotel conglomerate would have its own branches
in every region of the world, such as the Regent Group International Hotel who has lots of hotels in
its conglomeration.

Regent Hong Kong; Regent Beverly Winsor

Regent Singapore; Regent Sydney

Regent Melbourne Regent Oakland

Regent Taipei; Regent Bangkok

Regent Fiji Regent Kuala Lumpur:

In this case, the hotel reservation system enables a direct contact with the reservation central
reservation of the Regent which is in the United States, Australia, and Europe. However, the contact
may be on the direct telephone line, or by a letter to the Sales Office of the Regent International Hotel
at Hong Kong, Tokyo, Singapore, Los Angeles, New York, London, Frankfurt, Perth, Sydney. A
direct contact to every Regent Hotel through the computer line is possible with a reservation center at
Alberque, United States.

Moreover, there is the type of companies with an agreement to buy the business
of notable hotel conglomerates, with accepted services, for the operation. Such as the Four Season
Hotels and Resorts who agreed to buy the enterprise of Regent International Hotel; while the Four
Season continues to utilize the name Regent International in the operation of the Regent International
in the Asia Pacific Region.

Such franchise business is highly successful with lots of advantages:

1) Clients procurement, and room reservations can be done for all over the world with speed
and reduced expenses;

2) Reciprocities marketing advantages;

 3) Minimized expenses in the advertisement and public relations;

4) Attains lots of capital, and enables the enterprise expansion;

5) A system with the same standard, in the servicing of food and drink, and the
accommodation;

6) The profit and loss is shared, enabling an assistance for each other, avoiding the instability
of the enterprise;

7) A service in the international standard, and generally acceptable quality;

8) The personnel are always alert in their operation, with a constant training and development.

2. Family Hotel

This business is done amongst the family or cousins. This type of administration has long
survived ever since the hotel service has begun, because it is suitable for small hotels, and need the
least administrator and personnel. Therefore, when this business is conducted within the family,
brothers and sisters would cooperate in the administration and become proprietors, such as the Family
Hotel in the United States with the name of ‘Mom and Pop’. There were less than 100 rooms, while
the hotel was owned by the head of the family. The wife and children help in the Mini-Mart, and the
Perm Parlour within the hotel, and owners would give services themselves. There are both merits and
demerits in this type of business.

Merit

 This type of business is independent, able to express one’s opinion and make the decision by
themselves.
 Need little investment
 The association between the proprietors and clients is very good.
 The work control can be done extensively, because of the limited number of personnel.

Demerit

 The opportunity to develop into a large enterprise is rare.

 This job disbursement and the work entrustment have not been systemized.
 The administrator and the personnel would join the business through the patronizing system (selected
through cousins, friends, or recommendations). In this case, the staffing may not be successful in
enrolling competent personnel, while the personnel himself might be conceited and arrogant, and
ignored the stipulated rules and regulations.
 The personnel development to a high level is limited, because there are few positions.

There is another type of administration called the Family Chain; this is also the family
business. However, the administrative may be hired to control the internal operation for the
entrepreneur, while the marketing may be done by the entrepreneur, or may make an agreement with
any private marketing company such as UT ell International who would operate the marketing for
the hotel, with the international room reservation. In this kind of business, every policy would come
from the proprietor, or the hotel committee or the administrative who received instructions from the
proprietor. When the business is successful, the proprietor would enlarge the branches to various
cities which are travel sources, both internally and externally. An example of this is The Imperial
Family, who started with the Imperial Hotel, Vidhayu Road. Later this hotel enlarged to Impalatara,
Imperial Smui, Thongsai, Boathouse, Imperial Queens Park, etc.

3 Management Contract (Management Team)

This is a contract with companies dealing with the hotel management, right from commencing
the hotel construction or after the hotel is built. The company undertaking this management, would
have its own teamwork to control the specific hotel, through the General Manager, under the
Management Contract, the undertaking company, would execute without a capital investment nor
other assets in the hotel, while the proprietor would have to be responsible for all the investment. The
hotel conglomerate would stipulated the policy, the operation procedure, the accounting, the
marketing, while the proprietor would have to pay for these expenses, and the dividends would be
apportioned according to the profit (after deducting the expenses, but not the liabilities). While in
some companies, there may be the administrative assurance called the Negative Guarantee; that is
should the output be ineffective, then the administration would be conducted free of charge. The
administrative time depends upon the covenant, and usually not less than 10 years, because the newly
constructed hotels are in the average of 3-5 first years, and are still in the Setting in Period with no
dividends. But it may still be less than 10 years, such as the Dusit Thani who signed a Management
Contract with the hotel conglomerate of Westin (Western International) in 1970 and the contract
terminated in 1972. The contract was changed from the Management Contract to the Marketing
Contract, and did not need to change the name, such as the Dusit Thani who did not use the name of
Western International, and the Rama Hotel, Silom, (1958), did not use the name of the Hilton
International.

4. TYPE OF HOTELS

Hotels can be classified in many categories as follows:

4.1 Commercial or Transient Hotel

 Commercial hotels usually situate in the Down Town with the business concourse.
Businessmen are content to accommodate in this type of hotels, because it is convenient in the
business contact, with no need for long travels, passing all the traffic jam. It is convenient because
this type of hotels are fully and conveniently accommodated, such as the food servicing, the
swimming pool, the exercise room, the tennis lawn, karaoke room, dancing room, and the conference
room. It is also near various places, which businessmen may easily make business contacts. The
communication is convenient, with all means of selectable transportation for servicing. In this type of
hotels, clients can enter and leave all the time, while they would not rest in hotels for a long time.

4.2 Resort Hotel

This is a resting hotel for tourists. These hotels would situate in the tour sources or in the
resting sources such as on the seashores, the mountains, on the riverside, near the golf course, etc.
Therefore, the conservation of natural beauty is a significant matter, because guests require contacting
the beautiful nature, and at the same time, they also need to all the conveniences and facilities.
Therefore, this type of hotel must be fully prepared for the conveniences and facilities, because the
guests only wish to rest. In the hotel, there should be the golf course, riding course, and fitness. There
should be all the exercises and activities for guests, such as the boat services, horses for riding, wind
surf, and ski lawn. All these would enable the success for resort hotels.

4.3 Residential Hotel

Residential Hotel refers to the resident and not for commercial. Therefore, the residential
hotel is the lodging, with a tenant contract and conditions between guests and the proprietor, where
there would be an accommodation for a short time, or a long time. This length of time may take a
month long, or a yearlong. However, there might be a condition that in the case of long term tenant,
should the guest be absent for a long time, such as going to upcountry for a long time, the hotel has
a right to let the room on a short basis, such as the Voldoft Astroia in New York, who are the
Residential Hotel. They have temporary guests as well as permanent guests. In this case, the hotel
conglomerate of Astroria has many branches, in Europe and in America.

4.4 Motel

Motel is the combination of the words ‘Motel’ to ‘Hotel’. This word had been initiated in the
United States before 1930. After the World War II, when the economy started to revitalize, people
sold more motor cars, and went on the travel. Travelers experienced all inconveniences in the lodging.
This is usually in town, where the traffic was congested and jammed, with no parking space. In this
case, the motel must find all the facilitation for tourists, with a parking service right next to the
bedroom, or sometimes, under the bedroom. Usually, motels do not have room services, because
guests usually come to rest for only one night, before commencing on the travel in the next morning.
Motels usually situate on the highways, and the accommodation service is executed for 24 hours.

4.5 Motor Hotel

The idea in building up Motor Hotels was initiated by Cammon Wilson, an American
designer and fixed asset developer, who set his family on a tour. He encountered a great
accommodation difficulty. After his tour, he contrived a new format for the hotel by collecting all
conveniences with the travelers who owned cars. The format of the Motor Hotel is the medium hotel
with 30 rooms to 300 rooms, accommodated with parking spaces. The parking is free to compete
with hotels that collect parking spaces. Moreover, there may be other services, such as the coffee
shop, cocktail lounge, conference room, and swimming pool.

In 1953, the Holiday Inn hotel in the United States commenced its business with 100
rooms, and presently owned over 1624 branches with 317,506,rooms in the towns, and in the vicinity.
The format of the Holiday Inn is the Motor Hotel, which was so successful that it becomes a franchise
with high popularity.

4.6 Budget Hotel

The Budget Hotel or the Economy Hotel is to serve travelers who like the economy,
cleanliness and modernity. This is usually a small size hotel, with limited rooms. An example of this
type of hotel is the Days Inn, which spread all over the United States. Sometimes, the Days Inn may
be in the same place with a service station, while giving different services. This is the same as the Ibis
in Europe and Japan. Quite a number of travelers prefer the economy hotels, especially in countries
with high cost of living, where some groups of tourists are unable to accommodate in hotels with high
services.

4.7 Condominium Apartment, Flat

The condominium is a suit condominium that is similar to an apartment or flat. The difference
is that the owner of a condominium or the particular suit has an absolute tenure right, through the
affirmative document under the agreed rules and regulations.

Condominiums were initiated in Thailand from the sky rising cost of the land and the traffic
congestion.

Presently, condominiums have a character of temporary rent, rather than a

permanent residence. This is because the Thai people are not used to stay in square and limited
rooms for a long time. However, when the problem of land and traffic increased, there would be a
more permanent residing in condominiums; while the apartments or flats are only the lodging and
rooms for rent. Where, usually in apartments and flats, there is neither facilities nor furniture, and
tenants must provide these for themselves. This is the type of long renting for months or for years.

Travelers are able to find accommodations from condominiums while traveling, and
these condominiums are called the Condotel. (The condotel is the combination of the words
‘condominium’ and ‘hotel’.) Here, they would be able to save money because many people may stay
in this place and they are also able to prepare their own food.

5. GUEST ROOMS SELLING FORMAT, AND THE FOOD SELLING FORMAT

Guest Rooms Selling Operation: The hotel proprietor or the investor must stipulate a precise
sales policy of the hotel. The applied sales format for guest rooms are generally classified into four
formats:

5.1 European Plan

The European plan or EP is the European style. In this type of business management, the room
rate would be differentiated. While other expenses, such as the food, and drinks would not be included
in the room rent. In this case, guests must arrange for their own meals.

5.2 American Plan

The American plan or AP is the American style. The AP management is the room rate
administration with an inclusive expense of the room rent and three meals. This is composed of
breakfast, lunch, and dinner, for each guest. This type of business management was initiated in
America. While in Europe, the AP Format is in the Full Pension (inclusive of room rent and meals).
Usually the food for service is presented through Table d ’Hotel, where the menu is fixed, and guests
would have little option or none at all. This is usually presented in Resort Hotel, because this type of
hotel is in the resort, away from communities, and inconvenience to find food. However, quite a
number of tourists do not appreciate the AP Management, because it is independent, with a feeling of
being enclosed in the limited space prepared by the hotel. This independent feeling impelled the AP
format to be less popular. Therefore, a new format has been schemed, with some air of the AP.

5.3 Modified American Plan or MAP

The Modified American Plan or MAP is the improved American plan. When the popularity in
the American plan was phasing out, the hotel tried to develop new methods, but would not leave out
the AP completely. Because this type of management is advantageous to the hotel. Therefore, a new
method has been revised by reducing the meal into two meals. Guests do not like to have lunch in
the hotel, because they would have to hurry back for lunch. Should they be late, then they would have
to pay for that meal without taking it, including the cost of the meal they had taken elsewhere.
However, the MAP management is still advantageous to the hotel, because guests would still have to
take breakfast and dinner in the hotel.

5.4 Half Pension, or Demi Pension (DP)

The Half Pension or Demi Pension (DP) is the application of the MAP, where the room rate,
is the combination of the room to the food and drinks of the breakfast. The guests have to find their
own lunch and dinner, either within or outside the hotel. Usually, in this case, the hotel would inform
guests that the breakfast is the Complimentary. In actual fact, the hotel already included the breakfast
into the room rate. While in some places, the hotel would not specify that this meal has to be a
breakfast, it might be any one meal that guests prefer but must be in the specific amount, i.e. the hotel
specified an amount of Bht. 100.00. In this case, guests may use the food service in the hotel restaurant
at any time of the day, within the given amount of 100 Baht.

6. HOTEL ADMINISTRATION STRUCTURE

The hotel administration is a characteristic administration. The leading hotel enterprise had
an international administration, with procedural system and policy. The hotel administration would
be classified into two large groups of:

(1) Front of the house

(2) Back of the house.

These two groups of services cannot be completely divided from each other. While the two
operations would have to coordinate and to operate concurrently and harmoniously, for the
accomplishment of the hotel business.

6.1 Front of the House

This part of service is the direct contact and association with guests, from the first second that
guests arrived, showing an intention to accommodate in the hotel. This front service is under the
superintendent of the General Manager. The front of the house is classified as follows:

6.1.1 Front Office Department:

This is a very important department, making a direct contact with guests. Should guests any
problems or require to appreciate or comment, they would go direct to the Front Office, because it is
convenient to contact and converse with other departments. Therefore, this department is the direct
 delegate to link the work and report the consequence to other departments. The operational function
of the Front Office Department:

 Reservation: This section is responsible in registering the room reservation from various sources,
with recordings, filing of reservation records, and revise on the appropriate time to make sure that
guests would have their rooms upon entering the hotel.
 Postage and Parcels: This section is to facilitate guests pertaining to the posting of letters, telegrams,
and parcels.
 Telephone: This section is to facilitate guests pertaining to the telephone both internally and
externally, and to wake guests up in the morning upon request.
 Finance and Foreign Exchange: This section relates with the Accounting Department, through the
collection from guests through their services, and also give the foreign exchange service.
 -Lost and Found: Should guests lost any of their belongings, this section would register the
notification; and should the personnel or any person found this belonging within the hotel, then the
personnel would bring it to this section in order to return to the owner.
 Inquiry: This section is to answer questions and inquiries of guests. Therefore, this section would have
to be alert with the all the movements of the hotel.

6.1.2 Uniformed service department:

This section is to provide a service guests from the first second of arrival the hotel. Therefore,
the personnel have to acquire special training to impress guests from the first instance. Personnel in
this section are:

 Doorman: The doorman is responsible in servicing guests by closing and opening the door, and to
greet guests when they light from cars.
 Porter: The porter has to coordinate with the Doorman when guests arrive the hotel. Then the Porter
would lift up the baggage or other luggage of guests and lead guests to register at the counter.
 Bellboy: This personnel would act like Porters. He would wait until guests finished their
accommodating registration at the front counter. Then the Bellboy would take guests to their rooms,
lifting their luggage and belongings as well.
 Pageboy: This person is to give services to guests at the front of the house. Generally, the Pageboy
would walk to various points where guests are expected to sit.
 -Elevator boy: This person is responsible in controlling the moving up and down of the lift, and to
advise the hallway for guests.
 Messenger: This personnel give services in sending various messages by the Front Office Department
in servicing guests.

6.1.3 Housekeeping Department:

 This section is to give facilitation pertaining to the accommodation, and the general condition
of the hotel have to be proper, clean, convenient, and sanitary; and has to be all set at all times. The
Housekeeping Depart is composed of:

 Guest Room
 Linen Room
 Minibar
 Florist
 Decoration
 Upholsterer
 Public Area
 Laundry Room

Guest Room:

The Guest Room is the core of the hotel. The personnel in this department are composed of
the Room boy, and the Room Attendant who are women responsible for cleaning the room. They are
supervised by the Floor Supervisor, while the Floor Attendant is to take care of floors in her
responsibility.

Linen Room:

This room is to store all the linen of the hotel, including all the uniform of the personnel. This
section is composed of the Linen Supervisor, giving surveillance over the Sewing Girl who repairs
the uniform of personnel and all the damaged cloths; the Linen Attendant is responsible in taking the
cloths and in allocating the cloths to various departments.

Mini-bar:

This section give services apart from the Room Service. The Mini-bar crews are responsible
for cleaning drinking glasses, storing them in places, filling in the ice cubes, and soft drinks in the
refrigerator, to keep the amount in full according to the Mini-bar Menu.

Florist:

The florist is responsible in arranging all kinds of flowers in the hotel, including the Guest
Rooms, the Dining Room, the Hall, various banquets and in offices.

Decoration:

This section is responsible in decorating the place in various occasions, on special days, and
holidays; including the decoration on the state, and conference room. Some hotels may combine this
section to the Florist.
 Upholsterer:

This section is responsible in repairing the furniture, cushion, carpet, curtains to keep the place
in the best condition at all times.

Public Area:

The Public Area refers to the place where all guests make the use of, such as the dining room,
the swimming pool, the garden, the lobby, Hie hallway, the conference room, the banquet hall, and
the fitness room. In these places, the personnel would be responsible for the cleanliness and the
tidiness all the time.

Laundry Room:

This section is responsible in the whole cleaning services of the hotel, such as all the uniform
of the personnel in the hotel, including the clothes of guests.

6.2 Back of the House

The services at the Back of the House do not usually make direct contacts with guests. This
function is only performed in offices, but it is a very important task. Various sections at the Back of
the House are:

 Sales Department
 Food and Beverage Department
 Engineering Department
 Accounting Department
 Personnel Department
 Public Relations Department
 Purchasing Department

6.2.1 Sales Department:

This department is very important in finding guests to accommodate in the hotel. The
personnel in this department must be competent in selling with good human relations. The Sales
Department is classified into:

 Guest Rooms Selling Section

 Conference Room and Banquet Room Selling Section

6.2.2 Food and Beverage Department:

This department brings a high profit to the hotel. Currently, hotels rather depend upon the total
sales from this department than the guest rooms. Therefore, this Department needs a highly competent
Administrator, and effective personnel. This department is divided as follows:
  Beverage Service
 Service
 Food Service :

This section is subdivided into:

 Catering
 Banquet Service
 Food Preparation
 Art (the place decorations entertainment and banquets)

6.2.3 Engineering Department:

This department is also called the Mechanics Department. This department works on all the
engineering work, the repair and mending, the lights, the colour, the sound, the water and electricity,
the heater, the cooler, and etc.

6.2.4 The Accounting Department:

The Accounting Department controls on the whole financing and the accounting of the hotel.
The function of this section is:

 Payroll
 Auditing
 Control and Post the Accountings

6.2.5 Personnel Department

The function of this department is to set all the policies on the personnel.

 Assemble the history and information of the personnel

 Make personnel planning for various departments
 Select, allocate, and transfer personnel
 Welfare control, the petition, and personnel relations
 Training
 Discipline penalty, and fault investigation

6.2.6 Public Relations Department

 This department is the delegate of the hotel in giving information to guests and the public. The
Public Relations Department is very important and without the public relations, the hotel business can
easily collapse. The operational factors of the public relations in the

Hospitality Industry are in three stages:

 Advertise to appraise the facts

 Propaganda to induce the belief and faith
 Instigate to arouse the operation, conducing a good association

6.2.7 Purchasing Department

This Department is responsible in purchasing everything for the hotel. Some hotels set the
purchasing in each department, or assign the administrative department to be the procurer. The
Purchasing Department needs a high reliance. Therefore the personnel in this Department have to be
honest, without the selfishness.

2.3 INTRODUCTION TO THE COMPANY

Holiday Inn is a British-owned American brand of hotels, and a subsidiary of InterContinental
Hotels Group. Founded as a U.S. motel chain, it has grown to be one of the world's largest hotel
chains, with 1,145 active hotels as of September 30, 2016. The hotel chain is based in Denham,
Buckinghamshire.
1950s–1970s Kemmons Wilson, a resident of Memphis, Tennessee, was inspired to build
his own motel after being disappointed by poor quality and inconsistent roadside accommodation
during a family road trip to Washington, D.C. The name "Holiday Inn" was coined by Wilson's
architect Eddie Bluestein as a joke during construction of the first hotel, in reference to the 1942
Christmas-themed, musical film Holiday Inn, starring Bing Crosby and Fred Astaire. Their first
hotel/motel opened in August 1952 as "Holiday Inn Hotel Courts" at 4925 Summer Avenue in
Memphis, the main highway to Nashville. In the early 1990s it was demolished, leaving behind a
plaque commemorating the site.
Wilson partnered with Wallace E. Johnson to build additional motels on the roads entering
Memphis. At the time Holiday Inn's corporate headquarters was in a converted plumbing shed owned
by Johnson. In 1953, the company built its next three hotels which, along with their first hotel, covered
the roads that led to Memphis. The second motel was built on U.S. 51 South. It was followed by
Contents
 two more in 1953, one on Highway 51 North, and another on U.S. 61. Upon Johnson's death
in 1988, Wilson was quoted as saying, "The greatest man I ever knew died today. He was the greatest
partner a man could ever have." What they started together, with Wilson later helming the project,
became the Holiday Corporation, one of the world's largest hotel groups.

By the beginning of 1956, there were 23 Holiday Inns operating with seven more due to open
by the year's end. In 1957, Wilson began marketing the chain as "Holiday Inn of America", mandating
its properties be standardized, clean, predictable, family-friendly , and readily accessible to road
travelers. The chain grew dramatically as a result, with 50 locations across the country by 1958, 100
by 1959, 500 by 1964, and the 1,000th Holiday Inn (in San Antonio, Texas) opening in 1968.
In 1965, the chain launched Holidex, a centralized reservation system where a visitor to any
Holiday Inn could obtain reservations, by teleprinter, for any other Holiday Inn location. The only
comparable systems at the time were operated by airlines (Sabre made its debut in 1963). Promoting
itself as "your host from coast to coast", Holiday Inn added a call center after AT&T's introduction of
+1800 toll-free telephone number service in 1967, and updated its systems as desktop
microcomputers, an invention of the 1970s, found their way into travel agencies .
Branded as "The Nation's Innkeeper", the chain put considerable financial pressure on
traditional motels and hotels, setting the standard for competitors like Ramada Inn, Quality Inn,
Howard Johnson's, and Best Western. By June 1972, with over 1,400 Holiday Inns worldwide, Wilson
was featured on the cover of Time magazine and the franchise's motto became "The World's
Innkeeper".

In the 1960s, Holiday Inn began franchising and opening campgrounds under the Holiday
Inn Trav-L-Park brand. These recreational campgrounds were listed in the Holiday Inn directories.

In 1963, Holiday Inn signed a long-term deal with Gulf Oil Corporation where it agreed to
accept Gulf credit cards to charge food and lodging at all of its American and Canadian hotels, in
return for Gulf building service stations on many Holiday Inn properties, particularly near major U.S.
and Interstate highways. The arrangement was copied by competing lodging chains and major oil
companies during the mid-to-late 1960s, but fell out of favor following the 1973 oil crisis. The
Gulf/Holiday Inn arrangement ended around 1982.
 In 1971, the company constructed the Holiday Inn University and Conference Center, a
teaching hotel for training new employees, in Olive Branch, Mississippi. In 1973, the company built
the Olive Branch Airport north of the University as a home base for its corporate aircraft.

The company later branched into other enterprises, including Medi-Center nursing homes,
Continental Trailways, Delta Queen, and Show-Biz, Inc., a television production company that
specialized in syndicated country music shows. Wilson also developed the Orange Lake Resort and
Country Club near Orlando and a chain called Wilson World Hotels. The acquisition of Trailways in
1968 lasted until 1979, when Holiday Inn sold Trailways to private investor Henry Lea Hillman Sr of
Pittsburgh, Pennsylvania. In the years during which Trailways was a subsidiary of Holiday Inn,
television commercials for Holiday Inn frequently showed a Trailways bus stopping at a Holiday Inn
hotel. Wilson retired from Holiday Inn in 1979. As of 2014, Wilson's family still operates hotels as
part of the Kemmons Wilson Companies of Memphis.

The Great Sign

The "Great Sign" was the roadside sign used by Holiday Inn during its original era of
expansion from the 1950s to 1970s. It was perhaps the company's most successful form of advertising.
It was extremely large and eye-catching, but was expensive to construct and operate. The
manufacturer of the sign was Balton & Sons Sign Company, and it was originally designed by sketch
artists Gene Barber and Roland Alexander. Wilson wanted a prominent sign, desiring that it be at least
50 feet (15 m) high and visible in both directions. He also wanted a changeable marquee to welcome
different groups. The original sign cost $13,000.[9] It is said that the sign's colors were selected
because they were favorites of Wilson's mother. The popularity of the sign led to many imitations,
some of which remain to this day.
 In 1982, following Wilson's departure, the Holiday Inn board of directors phased out the
"Great Sign" in favor of a cheaper back-lit sign. The decision essentially signaled the end of the
Wilson era, and Wilson considered it "the worst mistake they ever made". He loved the "Great Sign"
so much that it was engraved on his tombstone, with the marquee reading "FOUNDER" and the arrow
aimed at his name.[10] The majority of the signs were sold as scrap metal and recycled.

Several intact fragments of the famous sign have been restored and relit, mostly the Holiday
Inn top section of the sign and the marquee box. In 2006, a complete sign was found. The disassembled
sign, complete with star, marquee box, and the sign base, was discovered in a backlot in Minnesota.
On June 3, 2007, it was purchased by a neon sign restoration expert, in order to restore it to its 1950s
appearance. It would be displayed at the National Save the Neon Signs Museum in Minot, North
Dakota. An intact sign that came from a Las Vegas location stands outside of the American Sign
Museum in Cincinnati, Ohio. Another intact and operating Holiday Inn Great Sign is at The Henry
Ford Museum in Dearborn, Michigan, and yet another is with a private collector in Park Hills,
Kentucky

1980s – present Although still a healthy company, changing business

conditions and demographics saw Holiday Inn lose its market dominance in the 1980s. Holiday Inns,
Inc. was renamed "Holiday Corporation" in 1985 to reflect the growth of the company's brands,
including Harrah's Entertainment, Embassy Suites Hotels, Crowne Plaza, Homewood Suites, and
Hampton Inn. In 1988, Holiday Corporation was purchased by UK-based Bass PLC (the owners of
the Bass beer brand), followed by the remaining domestic Holiday Inn hotels in 1990, when founder
Wilson sold his interest, after which the hotel group was known as Holiday Inn Worldwide. The
remainder of Holiday Corporation (including the Embassy Suites Hotels, Homewood Suites, and
Hampton Inn brands) was spun off to shareholders as Promus Companies Incorporated. In 1990, Bass
launched Holiday Inn Express, a complementary brand in the limited service segment.

In 1997, Bass created and launched a new hotel brand, Staybridge Suites by Holiday Inn,
entering the North American upscale extended stay market. In March 1998, Bass acquired the
InterContinental brand, expanding into the luxury hotel market. In 2000 Bass sold its brewing assets
(and the rights to the Bass name) and changed its name to Six Continents PLC. InterContinental Hotels
Group (IHG) was created in 2003 after Six Continents split into two daughter companies: Mitchells
& Butlers PLC to handle restaurant assets, and IHG to focus on soft drinks and hotels, including the
Holiday Inn brand.

The brand name Holiday Inn is now owned by IHG, which in turn licenses the name to
franchisees and third parties who operate hotels under management agreements.

In 1999, the hotel that changed into the Nickelodeon Suites Resort Orlando in 2005, opened,
called "Holiday Inn".
 The iconic "Great Sign" was a familiar sight on U.S. highways in the 1950s, 1960s, and 1970s

1980s – present

Holiday Inn clock in Sutton, Greater London

Iconic Holiday Inn Sarajevo, home of foreign correspondents during 1984 Winter Olympics
and throughout of Siege of Sarajevo during Bosnian War

The Wall Street Journal reported in 2002 that the company, led by Ravi Saligram, was
producing a new 130-room "Next Generation" prototype hotel to rebuild the brand. It would include
a bistro-like restaurant and an indoor pool. The first of these prototype hotels, the Holiday Inn
Gwinnett Center, was built in Duluth, Georgia, in 2003.

HOLIDAY INN CLOCK IN SUTTON, GREATOR LONDON

On October 24, 2007, IHG announced a worldwide relaunch of the

Holiday Inn brand, which spelled trouble for the remaining motels. The relaunch was "focused on
delivering consistently best in class service and physical quality levels, including a redesigned
welcome experience [and] signature bedding and bathroom products". The first relaunched Holiday
Inn opened in the U.S. in spring 2008. Currently there are more than 2,500 relaunched Holiday Inn
brand hotels around the world, and the Holiday Inn global brand relaunch process was completed by
the end of 2010. By then, the majority of the HI motels were removed from the chain, with a few
exceptions. (In the 1980s and 1990s, HI hotels were built alongside the motel properties [i.e. Baton
Rouge, Louisiana] in order to provide more amenities and newer rooms.) When the relaunch occurred,
these motels were either demolished or closed off, even if a full-service hotel was already on site.
Today, fewer than 10 Holiday Inn motels still operate, others having been replaced by newer Holiday
Inn Express locations or having switched to other chains.
 In September 2008, IHG announced the creation of a new timeshare brand, Holiday Inn Club
Vacations, a strategic alliance with The Family of Orange Lake Resorts.

LOGOS OF HOLIDAY INN

BRANDS

 Holiday Inn – This is the most recognizable tier of service. There are two distinct types: high-rise,
full-service plaza hotels and low-rise, fullservice hotels. The former also included many high-rises
with round, central-core construction, instantly recognizable from the 1970s. Both offer a restaurant,
pools at most locations, room service, an exercise room, and functional but comfortable rooms.

 Holiday Inn Hotel & Suites – The properties offer all the amenities and services of a regular Holiday
Inn but consist of rooms mixed with suites.
 Holiday Inn Resort – The properties also offer all the amenities and services of a full-service Holiday
Inn; resorts are considered more of an advertising branding than a completely different brand. Most
Holiday Inn Resorts are located in high-leisure-tourism markets.

 Holiday Inn Club Vacations – Vacation Ownership / Timeshare villas that offer more space and
amenities than a standard hotel room. The brand was formed as part of a strategic marketing alliance
with Orange Lake Resorts, which owns 26 resorts across the United States. Orange Lake Resorts was
started by Kemmons Wilson, the founder of Holiday Inn. The company is still owned and operated
by the Wilson family .

 Holiday Inn Select – These upper-range full-service hotels cater to business travelers. In 2006 it was
announced that Holiday Inn Select hotels would be discontinued. Existing hotels may continue to
operate under the Holiday Inn Select flag until their existing license expires, however many are
converting to Crowne Plaza or regular Holiday Inn hotels, with no further marketing or advertising
based around the "Select" moniker. Several Select hotels still remain as of 2014.
 3.1 INTRODUCTION

This project entitled study on the impact of service quality on customer satisfaction and loyalty
with the special reference to HOLIDAY INN HOTEL, KOCHI. We believe that customer satisfaction
is related with the quality of service and measuring can be used like an advantage for quality
improvement. To archive this we present some theoretical background about quality, some tools for
quality improvement, some tools for measuring customer satisfaction. Our empirical findings are
focused on how our case company tried to use these approaches. During the analysis we compare
these information and we will see that they work very well with TQM, Six sigma, they use some
approaches of SERVQUAL and CSM. Also we will apply QFD that relates the customer needs and
expectations and the service characteristics, identified previously.

The results are based both in SERN-QUAL and QFD. For instance, the lack of communication
between customers and company is the main gap regarding how to measure the customer satisfaction.
Some tips about how to measure the customer satisfaction. Some tips about how to measure the
customer satisfaction and other recommendations are given at the end. The SERVQUAL and QFD
method, because we believe that both work very well together due to it becomes a powerful tool that
is telling if the customer is satisfied or not. Aside it is telling us where we should act to improve the
quality, of service and therefore the customer satisfaction. The work presented is based on the
interview with our contact person. Several observations were made regarding the measurement
method that they are using.

Study titled satisfaction level of hotel customers in Iran: (case of Parsian Esteghlal Hotel
by Neda shishavi2007) found that success of every company or Organization lies beneath the
satisfaction of their customers. This is especially obvious in hospitality sector. The success of the
company active in hospitality environment has a direct relationship with their ability to satisfy their
customers. Hotels, as one main important sector of hospitality environment, will use their customers
if they walk out the door dissatisfied. In this situation they will not hack to the hotel and they will not
suggest the hotel to their friends. This means losing customers and failure of the company (hotel).

Increasingly customers are demanding added values for the money they are spending for their
stay at a hotel. They do expect appropriate price and quality service from the staff of the hotel. They
continuously compare the price and quality of different hotels with each other in order for a hotel to
gain market share and success, hotel corporations need to review the way they are currently offering
their services. Persian Esteghlal hotel is no exception to this rule. Dominated, as it is, by semi-sate
owned operated establishment, it seems that the hotel has been somewhat backward in it approach to
its service quality and customer care over the years. This thesis presented here measures the gap
between customer expectations and perception of the services offered by staff of the hotel.
SERVQUAL instrument has been used as a tool to measure this gap which shows the level of
customer satisfaction from the services offered at the hotel.

Study titled contractual governance of Indonesia Railway system by Retno

sarisunarto2009 found that the growth of private motor vehicle grows rapidly each year have
negative impact not only for the extra contribution of air pollution but also to time wasting. That
impact can lead to decreasing of people quality life. Public transportation is one of the solutions for
the problem. Therefore, the shift from private motor vehicle user to public transportation, in other
word increasing market share of public transportation, is necessary.

One of the public transportation that can attract more market share is railways. It has large
capacity, high safety level, and free from traffic jam. Those characteristic makes railway as primary
public transportation. Indonesian railways nowadays have lot of problems and receive many
complaints from passenger.

Train travel is still coloured with the delay, limited well-condition vehicle, and unclear train
travel information that often disadvantage passengers and many of services offered were failed to
attract passengers. This conditions result in decreasing quality of services and insufficient railways
operation. This will be a barrier to Indonesian railways accomplishment in making it to be a reliable
and sustainable transport mode. Therefore, to improve market share and to improve the railway
condition, it necessary to have contractual governance with standard that can lead to customer
satisfaction and making the process improve the relationship between the stakeholders.

This lead to the problem of what is the customer satisfaction factors in using railway as their
transport, what service quality item that satisfied the passenger, and how contract can maintain the
relationship between the stakeholders. Finding in this thesis consist of several point. First, from the
customer satisfaction index, the customers of jabodetabek commuter train are not satisfied with the
service. Second, the analysis discovered that there are not satisfied with havehigh correlation with
overall satisfaction. The four factors are equipment and facility, assurance, competency, and travel
time and appearance.

The attributes is grouping into five SERVQUAL dimension. From regression analysis of
SERVQUAL dimensions there are two services items that influence the customer satisfaction;
assurance and tangibles. Third, form gap analysis there are gaps in services process that need to be
closed in order to deliver services quality which lead to customer satisfaction in railway operational.

Fourth, from contract analysis can be concluded that the present condition PT. KAI as the
operator cannot perform as it is stated in contract. This can be influenced by many factors such as; the
lack of infrastructure, the lack of vehicle, customer misbehaviour, staff misbehaviour and external
factors. In delivering service quality which can lead to the increase customer satisfaction, it is
recommended to improve the service that related to assurance and tangible items and to involves
passengers in controlling and improving railway operational. The result expected from the
improvement is the increase of overall performance of railway operation which can lead to the
increase customer satisfaction and market share. From side of contractual governance, the research
discovered that there are problem in contract clausal and relationship between DGR, PT. KAI and
people as customer complains in setting contract clausal that can make DGR, PT. KAI and people as
customer in mutualism developing relationship.

Study titled customer satisfaction with service delivery of mobile telecommunication

networks in Ghana by Simon Gyasi Nimako, Foresight Koftazumah-2009 was conducted to
assess and analyze customer satisfaction with service delivery of mobile telecommunication networks
(MTNs) with Ghana. The main problem of this study was whether customers are satisfied with service
delivery of MTNs in Ghana. The study was basically a survey that used both qualitative approaches.
A structured questionnaire was developed, pre-tested and personally administered to the target
population of individual mobile subscribers. One thousand (1000) respondents were sampled from
the target population of seven million, six hundred and four thousand and fifty-three (7604053) mobile
telecom subscribers through a satisfied random sampling.

Out of this, nine hundred and thirty-seven (937) questionnaire constituting 93.7% response
rates were got for analysis. The findings indicate that irrespective of mobile telecom network in
Ghana, customer satisfaction is low: neither equal to nor better than desire and expectation of the
customers. With respect to mobile network, customers are not satisfied with the service delivery of
mobile network A. customer satisfaction for company B is better than expected and at least equal to
the desire of the customers.

For mobile network C and D, customer satisfaction is at least equal to customer expectation
and desire. Again this study concludes that overall customer satisfaction is significantly different
among MTNs in Ghana, with customers of company B, C and D rating their satisfaction with service
quality higher than customers of company A. furthermore customer, customer satisfaction with
service quality higher than customers of the company A. Furthermore , customer satisfaction is better
than expected for thirteen (13) dimensions –items of service quality, equal to expectation for
fifteen(15) items and worse than expected for eight (8) dimension, followed by ―Empathy‖,
―Reliability‖, ―Economy‖, ―Responsiveness‖, ―Image‖ and ―Assurance‖, while ―Tangibles‖ is
found not significantly important to the customers in Ghana‘s MTNs.

Kotler defines services as ―any act or performance that one offer to another that essentially
intangible and does not result in the ownership of anything. Customer services can be defined as ―an
organization‘s ability their customer‘s needs and wants. Customer and business managers alike like
to talk about what good service is (and isn‘t), but this definition by ACA group sums up what excellent
customer service is beautifully: ―excellent customer service (is) the ability of an organization to
consistently exceed the customer‘s expectations.‖ Gefan (2002): service quality as ―the subjective
comparison that customers make between the quality of the service that want to receive and what they
actually get. ―Service quality is determined by the difference between customers‘ expectations of
service providers‘ performance and their evaluation of the services they received.

Timeliness of service means -mailing a transaction slip immediately, calling the customer back
quickly and prompt service. Accuracy means –accuracy in billing, keeping record correctly,
performing the service at the designated time. Consistency means –providing consistent services at
all time without any change. Responsiveness means -willingness to help customers and provide
prompt service when they needed. Tangible means-appearance of physical facilities, equipment,
personnel and communication personnel. Assurance indicates knowledge and courtesy of employees
and their ability to inspire trust confidence. Empathy refers to caring, individualized attention the firm
provides its customers. Communication means- keeping customer informed in language they can
understand. It also means listening to customers.

Customer relationship ensures the customer loyalty. It means the relationship of company
towards its customers‘. Technology means –the branch of knowledge that deals with the creation and
use of

technical means and their interrelations with life, society and the environment, drawing upon
such subjects as industrial arts, engineering, applied sciences and pure sciences.

Palacio, Meneses, & Perez, (2012) also empirically proved the dominant role of brand image
in predicting customer satisfaction in the hospitality industry. Moreover, the congruence between the
brand image and customers‗ self-image would enhance customer satisfaction and customers‗
preference for the brand. Furthermore, the strategic importance of customer satisfaction for
organizations is even more highlighted. In a competitive marketplace where businesses compete for
customers like in the service industry; customer satisfaction is seen as a key differentiator and
increasingly has become a key element of business strategy. It is essential for companies to effectively
manage customer satisfaction

Pimentel and Heckler (2013) found that brand image has an indirect influence on loyalty via
customer satisfaction. Moreover, brand image could have both direct and indirect effects on loyalty.
Nevertheless, brand image can be certainly viewed as a predictor of customer loyalty. Thus, in the
service industry context, a positive brand image appears to stimulate customer loyalty. It is accepted
that positive brand image contributes to enhance customer loyalty and also, customer loyalty has great
roles in building strong brand image of a company. Brand image therefore is essential for companies
to gain lifetime customer loyalty which leads to gear up organizational efficiency. Blamer (2011)
considers that the reputation of a company is associated with organizational values, purpose and
visions which can be expected as wider influences. The reputations connected with the name of
company may act as the umbrella brand for the range of services or products categories, whereas the
brand image is specific to the certain category of products. Therefore, the reputation could lead
customer loyalty because of trust that a customer can get through public relation.

3.2 THEORETICAL FRAMEWORK OF THE STUDY

In this chapter of the research, the authors gave a theoretical background of service quality,
Customer Loyalty and customer satisfaction and also explained all the factors which influence
customer satisfaction in retail industry.

Service quality:

In order for a company‘s offer to reach the customers there is a need for services. These
services depend on the type of product and it differs in the various organizations. Service can be
defined in many ways depending on which area the term is being used. An author defines service as
―any intangible act or performance that one party offers to another that does not result in the
ownership of anything‖ (Kotler & Keller, 2009). In all, service can also be defined as an intangible
offer by one party to another in exchange of money for pleasure.

Quality is one of the things that consumers look for in an offer, which service happens to be
one (Solomon 2009). Quality can also be defined as the totality of features and characteristics of a
product or services that bear on its ability to satisfy stated or implied needs (Kotler, 2002). It is evident
that quality is also related to the value of an offer, which could evoke satisfaction or dissatisfaction
on the part of the user.

Service quality in the management and marketing literature is the extent to which customers'
perceptions of service meet and/or exceed their expectations for example as defined by Zeithaml
(1990), cited in Bowen & David, 2005).

Thus service quality can intend to be the way in which customers are served in an organization
which could be good or poor. Parasuraman defines service quality as ―the differences between
customer expectations and perceptions of service‖ (Parasuraman, 1988). They argued that measuring
service quality as the difference between perceived and expected service was a valid way and could
make management to identify gaps to what they offer as services. The aim of providing quality
services is to satisfy customers. Measuring service quality is a better way to dictate whether the
services are good or bad and whether the customers will or are satisfied with it.

A researcher listed in his study: ―three components of service quality, called the 3 ―Ps‖ of
service quality‖ (Haywood 1988). In the study, service quality was described as comprising of three
elements:
 • Physical facilities, processes and procedures;

• Personal behaviour on the part of serving staff, and;

• Professional judgment on the part of serving staff but to get good quality service. ―Haywood
1988, p. 19-29).

He stated that ―an appropriate, carefully balanced mix of these three elements must be
achieved.‖ (Haywood, 1988) What constitutes an appropriate mix, according to him will, in part, be
determined by the relative degrees of labour intensity, service process customization, and contact and
interaction between the customer and the service process. From the look of things, this idea of his
could be design to fit with evaluating service quality with the employee perspective.

One of the most useful measurements of service quality is the dimensions from the
SERVQUAL model. In the creation of this model for the very first time, ―Parasuraman (1985)
identified 97 attributes which were condensed into ten dimensions; they were found to have an impact
on service quality and were regarded as the criteria that were important to access customer‘s
expectations and perceptions on delivered service

The SERVQUAL scale which is also known as the gap model by Parasuraman, (1988) has
been proven to be one of the best ways to measure the quality of services provided to customers. This
service evaluation method has been proven consistent and reliable by some authors (Brown 1993).
They held that, when perceived or experienced service is less than the expected service; it implies less
than satisfactory service quality; and when perceived service is more than expected service, the
obvious inference is that service quality is more than satisfactory (Jain, 2004).

From the way this theory is presented, it seems the idea of SERVQUAL best fits the
evaluation of service quality form the customer perspective. This is because when it is stated
―perceived‖ and ―expected‖ service, it is very clear that this goes to the person,who is going to or
is consuming the service; who definitely is the consumer/customer.The original study by Parasuraman
(1988) presented ten dimensions of service quality:

 Tangibles: the appearance of physical artefacts and staff members connected with the service
(accommodation, equipment, staff uniforms, and so on).
 Reliability: the ability to deliver the promised service.
 Responsiveness: the readiness of staff members to help in a pleasant and effective way.
 Competence: the capability of staff members in executing the service.
 Courtesy: the respect, thoughtfulness, and politeness exhibited by staff members who are in contact
with the customer.
 Credibility: the trustworthiness and honesty of the service provider.
 Security: the absence of doubt, economic risk, and physical danger.
 Access: the accessibility of the service provider.
 Communication: an understandable manner and use of language by the service provider.
 Understanding the customer: efforts by the service provider to know and understand the customer.
Customer Loyalty:
 Loyalty‘, in day-to-day life, implies an unselfish belief in institutions or unswerving
fidelity in marriage, or emotional commitment to friends. Loyalty also suggests
monogamy: one choice above all others. 2 Another definition is: ―A deeply held
commitment to rebuy or repatronize a preferred product/service consistently in the
future, thereby causing repetitive behaviour reflecting purchase of the brand despite
situational influences and marketing efforts having the potential to cause a switching
behavior.― loyalty is, in simpler terms, a reliance on a particular brand or company
even though numerous satisfactory alternatives may exist. Loyalty helps build
relationships.
 It requires that companies view customers as people first and consumers second. Trust,
commitment, ethical practices, fulfillment of promises, mutual exchange, emotional bonding,
personalization and customer orientation have been reported to be the key elements in the
relationship building process (Levitt,1986;Gronroos, 1994; Morgan,1994;
Gummesson,1994;Bejou et al,1998).
Defining Customer Loyalty

Customer loyalty is the practice of finding, attracting, and retaining your customers who
regularly purchase from you. It is different from customer satisfaction. Customer satisfaction is the
basic entry point of good business practices. Loyalty cards and programs have their rewards and
pitfalls. Rewarding customers for spending more Rupees can create a vicious cycle of creating
customers who want rewards and will look anywhere to obtain them. With loyalty cards and
programs reaching a saturation point. Software, card programs, and loyalty schemes are the tools
of customer loyalty programs but they aren't the essence of loyalty. To build loyalty, you must earn
it. Look at these 8 ways to earn more customer loyalty for business

Service quality and Customer satisfaction and Loyalty:

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

experience on a particular service encounter, (Cronin & Taylor, 1992) it is in line with the fact
that service quality is a determinant of customer satisfaction, because service quality comes
from outcome of the services from service providers in organizations.
Another author stated in his theory that ―definitions of consumer satisfaction relate to
a specific transaction (the difference between predicted service and perceived service) in
contrast with ‗attitudes‘, which are more enduring and less situational-oriented,‖ (Lewis, 1993)
This is in line with the idea of Zeithaml et al (2006).Regarding the relationship between
customer satisfaction and service quality, Oliver(1993) first suggested that service quality
would be antecedent to customer satisfaction regardless of whether these constructs were
cumulative or transaction-specific.
Some researchers have found empirical supports for the view of the point mentioned
above (Anderson & Sullivan, 1993; Fornell 1996; Spreng & Macky 1996); Where customer
satisfaction came as a result of service quality. In relating customer satisfaction and service
quality, researchers have been more precise about the meaning and measurements of
satisfaction and service quality. Satisfaction and service quality have certain things in common,
but satisfaction generally is a broader concept, whereas service quality.
Customer perceptions of quality and customer satisfaction Wilson, 2008

The above figure shows the relationship between customer satisfaction and service
quality. The author presented a situation that service quality is a focused evaluation that reflects
the customer‘s perception of reliability, assurance, responsiveness, empathy and tangibility
while satisfaction is more inclusive and it is influenced by perceptions of service quality,
product quality and price, also situational factrs and personal factors.
It has been proven from past researches on service quality and customer satisfaction
that Customer satisfaction and service quality are related from their definitions to their
relationships with other aspects in business. Some authors have agreed to the fact that service
quality determines customer satisfaction. Parasuraman (1985) in their study, proposed that
when perceived service quality is high, then it will lead to increase in customer satisfaction.
Some other authors did comprehend with the idea brought up by Parasuraman (1995) and they
acknowledged that ―Customer satisfaction is based upon the level of service quality that is
provided by the service providers‖.
 Customer satisfaction:

Those who buy the goods or services provided by companies are customers. In other words,
a customer is a stakeholder of an organization who provides payment in Exchange for the offer
provided to him by the organization with the aim of fulfilling a need and to maximise satisfaction.
Sometimes the term customer and consumer are confusing. A customer can be a consumer, but a
consumer may not necessarily be a customer. Another author explained this difference. I.e. a customer
is the person who does the buying of the products and the consumer is the person who ultimately
consumes the product (Solomon, 2009).

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

satisfaction. Satisfaction can also be a person‘s feelings of pleasure or disappointment that results
from comparing a product‘s perceived performance or outcome with their expectations (Kotler &
Keller, 2009). As a matter of fact, satisfaction could be the pleasure derived by someone from the
consumption of goods or services offered by another person or group of people; or it can be the state
of being happy with a situation. Satisfaction varies from one person to another because it is utility.
―One man‘s meal is another man‘s poison,‖ an old adage stated describing utility; thus highlighting
the fact that it is sometimes very difficult to satisfy everybody or to determine satisfaction among
group of individuals.

Client happiness, which is a sign of customer satisfaction, is and has always been the most
essential thing for any organization. Customer satisfaction is defined by one author as ―the
consumer‘s response to the evaluation of the perceived discrepancy between prior expectations and
the actual performance of the product or service as perceived after its consumption‖ (Tse & Wilton,
1988) hence considering satisfaction as an overall postpurchase evaluation by the consumer‖ (Fornell,
1992, p. 11). Some authors stated that there is no specific definition of customer satisfaction, and after
their studies of several definitions they defined customer satisfaction as ―customer satisfaction is
identified by a response (cognitive or affective) that pertains to a particular focus (i.e. a purchase
experience and/or the associated product) and occurs at a certain time (i.e. Post-purchase, post-
consumption)‖. (Giese & Cote, 2000,) This definition is supported by some other authors, who think
that consumer‘s level of satisfaction is determined by his or her cumulative experience at the point of
contact with the supplier (Suresh chander, 2002). It is factual that, there is no specific definition of
customer satisfaction since as the years passes, different authors come up with different definitions.
Customer satisfaction has also been defined by another author as the extent to which a product‘s
perceived performance matches a buyer‘s expectations (Kotler, 2002). According to Schiff man&
 Karun (2004) Customer satisfaction is measuring customer satisfaction could be very difficult at
times because it is an attempt to measure human feelings. It was for this reason that some existing
researcher presented that ―the simplest way to know how customers feel, and what they want is to
ask them‖ this applied to the informal measures (Levy, 2009).

Levy 2009 in his studies suggested three ways of measuring customer satisfaction:

 A survey where customer feedback can be transformed into Measurable quantitative data:
 Focus group or informal where discussions orchestrated by a trained moderator reveal what
customers think.
 Informal measures like reading blocs, talking directly to customers.

Asking each and every customer is advantageous in as much as the company will know
everyone‘s feelings, and disadvantageous because the company will have to collect this information
from each customer.

Concept of customer satisfaction

Customer satisfaction refers to the customer’s perception that his / her expectations have been
met. If the customer’s expectations are met, then he is satisfied, if the expectations are surpassed, then
he is delighted, but in the event that they are not met, the customer is dissatisfied (Kotler2001).
Customer satisfied is achieved when a customer’s expectations are met and this is largely influenced
by the value of customer care provided by the organization. (Kotler1995) states that in the service-
profit chain, greater service delivery, which results in satisfied and loyal customers who make repeat
purchases and refer other customers to the organization.

Conceptual framework for customer satisfaction philosophy.

The customer satisfaction philosophy acknowledges supremacy of the customer. “The

marketing concept holds that the key to achieving organizational goals consists of determining the
needs and wants of target market and delivering the desired satisfaction more efficiently and
effectively than competitors”.(kotler2001) From the above definition, one can say that the concept of
customer satisfaction fine tunes the marketing concept on customer needs and wants. The concern for
the customer and his experience with the company should pervade way and integral art of its
philosophy and usher theconcept of customer satisfaction. Customer satisfaction has become a
business word for organizations that seek distinction and excellence from others. The concept that the
customer is very important dates far back when business management studies recognized marketing
as an essential Discipline (Davidson 1972). However, in Uganda, it is still new and some
organizations are yet to embrace it. However, a satisfied customer will do the following:

 Will tell good about the product on market

 Will buy again
 Will pay less attention on other competing products
 Will leave other products and starts consuming one with more satisfaction.

Due to high demand for certain services, the providers become arrogant and then attitude is
like take it or leave it. But the supply demand reduction has changed due to the abundance of substitute
products and services to choose from. One can therefore assert that the customer is a king, in Ugandan
market and any organization that ignores him stands to regret in terms of cost sales and the demise of
such a firm will definitely come sooner than later.

Component of customer satisfaction

Customer satisfaction has been depicted as the identification and management of moment of truth.
Zemice and Albrecht, who espouses the philosophy of satisfaction, identify three components of truth
namely:

The service strategy.

Service strategy is the decision about a service that will provide it with a unique identity visa-
Vis competition. It’s also a means for creating shared value through the organization unifying purpose
for management and service priorities for the staff members. To foster customer satisfaction
orientation, a service strategy should be customer centered, enabling the business to meet the needs,
expectations and motivation of target market.

The system;

The system represents the manner in which a service is being delivered. A customer
satisfaction system should be designed to provide a maximum level of ease and convenience to
customers. This could be achieved by conducting a task analysis that identifies the service and enables
the staff to rehearse the performance required to satisfy the customer.

The people (employees)

Employees are very crucial component of the moment of truth. Employees determine the
quality of the service to be delivered. The quality of contact and service given, attitude and appearance
of the employees are crucial.

10. Customer satisfaction model.

In a maiden research on the subject of customer satisfaction, a Lancaster team (Caruana,

Legrand, Omajor 1986) grouped the various moments of truth into file interfaces namely;

 The management - customer interface. Top management does not often come into contact with most
customers. However, when dealing with key clients, there is contact. It is therefore of utmost
importance that these contacts be well managed. Management would do well to be cognitive of the
 general rule which states that the bulk of the company’s business comes from a small number of its
customers.(Goneto)
 The staff-customer interface. The staff that comes into contact with customers on a continuous basis
or by job occupation should consider and understand the customer needs on an individual basis.
Furthermore, staff that does not come into direct contact with customers should be made to realize
that they are supporting those who do come into direct contact with customers.
 The management - staff interfaces. Any organization is only as good as the Caliber of the people it
employs. Due came must therefore be paid to the recruitment, training and commitment to employees.
Welfare is order to foster a customer satisfaction orientation.
 The customer system interface. This refers to the process of delivering the services to the customers.
Management has the responsibility of designing and establishing a service delivery process that is
satisfactory to its actual and potential clientele. Management should also make sure that the
environment within the customer is to be pleasant and portrays the desired image. The customer
satisfaction model place emphasis on an active information linkage (feedback) top management and
the market management needs to know what customers want.
 Assessment of the performance of the product/ service bought. Dissatisfaction, complaints and
suggestions should be put into consideration.

Dimensions of customer Satisfaction

Satisfaction according to Hokanson (1995) is affected by many factors which include friendly
employees, courteous employees, knowledgeable employees, and helpful employees, accuracy of
billing, competitive pricing, service quality, good value and quick service. For purposes of this study,
we concentrate on nine dimensions of customer satisfaction which are Location, Additional Services,
product quality, Service Quality, Facilities, Reliability, process, Value for money, Staff and Personnel
service. Furthermore, the nine dimensions also consist of 21 elements which are used in the collection
of data and analysis of results.

a) Location

The location of any store is always very important. Location can mean convenience and
accessibility. Location can also refer to the number of stores in a particular geographical setting.
According to Martinéz-Ruiz et al (2010:280), suggest that once a location is near to the home then
transaction costs associated with purchase such as transport costs and time spent are likely to be
reduced. According to Reilly (1931) who developed Reilly law of retail gravitation which proposes
that people are drawn to larger shopping thus larger cities tend to attract more customers to shop their
than smaller ones therefore the need for supermarkets to consider location when putting up facilities.
This is further supported by Craig et al (1984)
 who use the central place theory to explain how people living far away are attracted to larger
stores which are centrally located in larger shopping malls offering more collection of goods and
services than those stores within their own vicinity offering less goods and services.

b) Additional services
This dimension will consist of four elements membership card, parking lot, baby areas and
delivery of goods. Martinéz-Ruiz et al (2010) assert that customers always look for convenience
benefit in the modern environment. Additional services are essentially important in the retail business
and play a role in determining customer satisfaction through creation of convenience. For example,
Grewal et al (2002) concur that additional services like the availability of parking can create
convenience for customers with vehicles thus leading to a positive effect on customer satisfaction.
Other additional services like the membership card/loyalty card also provide access to discounts and
promotional goods.
c) Product quality
Product quality according to Garvin (1987) is described using eight attributes which are:
Performance which is refers to a products primary operating characteristics. Features: These are
additional features which are also known as the bells and whistles of the product.

Reliability: the probability that will operate properly over a specified period of time under
stated conditions of use.

Durability: It is the amount of use a customer gets out of use of a product before it physically
deteriorates or until replacement is preferable.

Serviceability: the speed competency and courtesy of repair.

Aesthetics: How a product appeals to all the five senses of a human.

Customer perceived quality:

Customers perception of a products quality based on reputation of the firm.

d) Facilities Under this dimension we use three elements like display, music and clean and spacious
atmosphere to measure the effect of supermarket facilities on customer satisfaction.
According to Inman et al (2009) a grocery store is described as a place of sensory stimuli
where consumers find colorful product displays coupled with fruits and flowers with perfectly
displayed packages of snacks and advertisements covering the floor. They further argue that some
customers then use the in store stimuli as cues to remind them of what groceries they need and also
assert that certain consumers enter shops without the intention of buying certain goods but end up
buying a particular set of goods because the in store stimuli has triggered unrecognized needs and
desires leading to in store decision making. This is supported by Dioiri (2007) who asserts that the
sales outlets/supermarkets facilities are very important since they have the ability to influence or
 change the purchasing behavior of consumers; therefore extreme care has to be observed when making
a decision on merchandising because 70 percent of purchase decisions are made during shopping.
Terblanche & Boshoff (2004) describe supermarket facilities as the sum of elements that contribute
to a pleasant shopping atmosphere such as shop layout/ aisles that make it easy to move around, store
cleanliness and well-shaped product displays. Because of increased competition in the market,
retailers are being driven to improve their aisle and display management strategies. This is being done
to improve company share of consumer purchases and wallet. Burke (2005) asserts that aisle
management involves the effective placement of categories in the store aisles to improve customers´
shopping experience. Sirohi et al (1998:237) found that good store facility design (overall appearance
of the shop, cleanliness, departments in the right places and wide and well marked aisle directions)
leads to enhanced perceptions of overall merchandise quality. Furthermore, Yuen & Chan (2010) say
that physical aspects such as a good store layout.
e) Reliability
Reliability refers to how much trust can be afforded the supermarket staff and organization
for example through parameters like accurate billing. ―Reliability refers to the promises given by the
store. If the store cannot keep or breaks the promises, it dissatisfies customers and results in negative
word-of-mouth. In contrast, when the company is able to keep its promises, it increases customer
confidence in the store and creates customer satisfaction and lead to loyalty‖, (Yuen & Chan
2010:236).
f) Process
Process will be measured using three elements such as number of checkout counters/ express
checkout counters, opening hours and queue waiting time at counters. It is important to manage these
elements of process in service delivery as they can make or break Customer satisfaction. According
to Katz et al (1991), waiting time in a retail store is an experience that can lead to consumer
dissatisfaction. Consequently, Hui et al (1997) also assert that the former can negatively affect the
store patronage behavior of a customer. Previous research by Kumar et al (1997) finds that wait length
expectations influence satisfaction with the waiting experience thus the need to find out how
customers expectations of a wait influence their patronage decision. In their support, Taylor (1994)
also finds that greater consumer satisfaction is obtained with shorter waiting periods. Thus there is
need for supermarkets in particular to manage long queues especially during peak hours when the
traffic in the stores is heavy.
g) Value for money
According to Ciavolino & Dahlgaard (2007), Value for money is the perceived level of quality
relative to the price paid for a product or service. Value of money is based on competitive pricing of
products, discounts awarded to customers, and promotions. Cronin & Taylor (1992) claimed that
customer satisfaction is not only affected by customer services but also by price and convenience.
Additionally, several researches have been done the value for money and the value attached to it by
customers. These studies also point out the difference between price and quality and how they
 influence perceived value, customer satisfaction and customer behavior. Furthermore, Zeithaml
(1988b) says that, ―customer value for money is the overall assessment of the utility of a product
based on perceptions based on what is received and what is given‖. Quantitative studies by Keaveny
(1995) into switching behavior in services revealed results that more than half of customers defected
because of poor price perception. While Varki & Colgate (2001) study of the banking industry also
reached the same conclusion that price perception can directly influence customer satisfaction. On the
other hand, Sirohi et al (1998) define value as ―what you get for what you pay for‖. They also argue
that value in supermarket shopping is attributed to various components such as quality, service,
variety, nutrition, convenience, freshness and facilities. They liken their definition to that of earlier
studies of Hauser & Urban (1986) on the utility per dollar measure of value. Therefore, Woodruff
(1997) & Slater (1997) suggest that there is need for companies to adjust their strategies towards
delivering superior customer value as it is a strong driver of customer satisfaction, retention and
profitability.
h) Staff Employees are important for a company‟s marketing strategy.
In this paper, the authors make use of two elements namely friendly helpful staff and
knowledgeable& quick performance to explain the staff dimension. According to Gwinner et al
(2005); Liao & Chuang (2004) say that the successful implementation of a company‟s marketing
concept is to an essential degree dependent on the frontline employees because of their direct customer
interaction. While dealing with customers, employees are meant to be at their best behavior. They are
meant to act in a particular way and some acts are either positive or negative. Employee behavior is
vital in a service company since employees act as a link for the organization with its customers.
Furthermore, Gwinner et al (1998) employees represent a critical factor in developing effective
working relationships with customers. In their study, Lemmink & Mattson (1998) showed that the
degree of personal warmth displayed by service employees towards customers was related
significantly and positively to service quality perceptions and customer satisfaction.
i) Personnel service
Some researchers suggest that people like to socialize outside their homes for example Tauber
(1972) asserts that certain groups of people like o shop at particular stores because the stores offer
them opportunities to socialize with fellow shoppers and he also claims that shoppers prefer to shop
at stores where they find friendly and courteous personnel. Refers to the quality of service related to
the core products. Quality will be measured using variables like personnel service, friendly staff,
courteous and knowledgeable staff. The speed of solving problems is also an important variable. We
also keep in mind the ability of staff to offer personalize service such as being able to recognize
frequent customers and even greet them by name. Clemmer (1990) describes service quality as a third
ring of perceived value after the basic product or service and extended support services. Service can
reduce the non monetary sacrifices made by shoppers such as time and convenience and also increase
the benefits of shopping at a store in this case ICA and Coop Forum. Furthermore, perceived service
quality has been found to have positive impact on perceived service value, (Bolton & Drew 1991).