Evaluation of Customer Satisfaction in Automobile After-sales Service based on Grey Incidence Analysis

Wang Jian-ling, Liu Si-feng, Wang Yuan-qi, Xie Nai-ming

Economics and Management College, Nanjing University of Aeronautics and Astronautics 29#, Yudao Street, Nanjing City, Jiangsu Province, 210016, China Email:WJL7520@163.com

Abstractwith rapid development of automobile industry in china, after-sales service market has captured both enterprises and scholars attention, and has been a new advantage for competition. In this paper, convenience, response, waiting time, maintenance quality and etc. characterize of after-sale service in automobile industry, the new measurement model of customer satisfaction in after-sale market is proposed, and an empirical study in automobile industry is constructed. The result shows the model is simple and high-efficiency, reveals issues clearly even with poor data, and provides decision supports for after-sales management. KeywordsAutomobile, After-sales, Customer Satisfaction, Grey Incidence

of customer satisfaction, build ideal service sequence, and do empirical research about the automobile after-sales service customer satisfaction based on grey incidence analysis. Then put forward proper strategies and recommendations to improve the enterprises management in the automobile industry, and also provide theoretical basis and decision support to the management of after-sales service. II.
LITERATURE REVIEW

I.

INTRODUCTION

The automobile industry of China has developed rapidly in recent years. The increasing number of automobiles, particularly the rapid use of private cars, has affected aftersales service market deeply. The size of China automobile after-sales service market, 120 billion RMB, of which 40% profit margins [1], make it become the most dazzling pearl in the whole automobile chain. With the growth number of cars, the after-sales service market will have a broad development. Its believed that China's after-sales service market size will reach 190 billion RMB till 2010. Improving customer satisfaction has become one of the main competitive advantages of the whole vehicle manufacturing enterprises. For example, Shanghai GM launched a after-sales service campaign called "More than you know yourself", and it is the Prototype of after-sales service brand; "Buick care" concept of the Buick after-sales service won numerous trophies and accolades; the ideas of Dong-feng Citroen brand is not only to provide quality products for users, but also provide the same care after-sales service as home. Although after-sales service market has developed rapidly, it is still in the initial stage and obviously lags behind the vigorous automobile manufactures & sales market. There are several apparent inadequate aspects in automobile industry development: costs, competition, management and technology. The automobile after-sales maintenance service is the lowest degree of customer satisfaction in Chinese service customer satisfaction surveys in 2004. In 2005 it is still the lowest in a comprehensive assessment of 10 major sectors service customer satisfaction. This paper attempts to study the content

Since Cardozo (1965) the first person introduces the word customer satisfaction to marketing, customer satisfaction has become an important indicator of enterprises achievements. Many scholars have done research about the concept of customer satisfaction, and given a relatively broad definition of customer satisfaction. For example, Fornell (1992) defines customer satisfaction as the customers overall evaluation about the product or service, and its an attitude from experiences [2]. This overall feeling of satisfaction can be directly assessed, at the same time consumers will compare the product or service to the ideal standard. Kotler (2000) believes that customer satisfaction is a level of peoples feeling state, and it is the result after consumers compare the products or services performance with the expected performance [3]. Although many scholars interpret customer satisfaction and measure customer satisfaction differently, it can be seen from the above definition that customer satisfaction is the customer's feeling state. Expectancy Disconfirmation Theory is the most widely used in the study of customers satisfaction. That is to say that the positive or negative inconsistency with comparing the consumers expectations before buy, and the performance after purchase products or services, can be used as a judgment of satisfaction or dissatisfaction. When the actual performance cannot match expectations, consumers will feel dissatisfied; when the actual performance reach expectations, consumers will feel satisfied; when actual performance is better than expectations, consumers will feel very satisfied. With the different understanding of customer satisfaction, the scholars have built a large number of customer satisfaction models. The most famous model is the customer satisfaction model combined antecedents and consequences. In such model, the factors affecting customers satisfaction, the four antecedent variables are customer expectations, product performance, inconsistency and customer satisfaction. Besides above factors, there are three post-purchase behavior

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variables. Heskek, Jones, Loveman, Sasser and Leonard (1994) believe that satisfied customers will have three R behaviors, which is customer retention (Retention), Repeat purchase (Repeat), and Referrals (Referrals). The three behaviors are customers loyalty (Loyalty) indexes. American Customer Satisfaction Index (ACSI) model is an example of these kinds, and it is the most widely used by far. The ACSI model combines the arithmetic method with the psychological perception when customers purchase goods or services, including variables of customer expectations, perceived quality, perceived value, customer complaints and customer loyalty. The index is calculated by SEM and estimated with partial least square method. In fact, services are characterized with intangibility, inseparability, heterogeneity and perish ability. The after-sales services are not only the results of marketing, but also the experience of customers. Customer satisfaction is the customer comprehensive evaluation of the products and services, and it affected by many factors, but the links between the various factors do not be fully known, that is to say there is grey on customers awareness to products &services. Therefore, we believe that Evaluation of Customer Satisfaction in Automobile After-sales Service based on Grey Incidence Analysis is of great significance. In addition, customers expectations for a car manufacturer or a brand of products or services refer to other manufacturers or brands. After-sales service satisfaction depends on the competition between the brands. All these conditions meet the requirements of Grey Incidence Analysis, so Evaluation of Customer Satisfaction in Automobile After-sales Service based on Grey Incidence Analysis is a positive trial. III.
METHODOLOGY OF RESEARCH

X 0 (1) X 0 (2) ... X 0 (n) X1 (1) X1 (2) ... X1 (n) ...... X m (1) X m (2) ... X m (n) (1)

Where, its assumed there are m evaluated objectives, and n evaluation factors. B. Transform the Viriable Sequence To the Same Dimension Generally the raw data have different dimensions or magnitude. In order to ensure the reliability of the analysis results, we need to transform the variable sequences to the same dimension with the initial value method: X i' ( k ) = X i ( k ) / X 0 ( k ) (2) C. Calculate the Sequence of Differences ,the Largest Difference and the Smallest Difference
0i (k)= X '0 (k ) Xi' (k ) (3)

Where =1, 2, ; =1, 2, . The maximum and minimum are the largest and the smallest value among the difference matrix. D. Determine the Value Weights of the Corresponding Indexes Because of with different importance, the factors have different weights accordingly. They should be determined by the views of customer and experts combined ={ k |k=1,2, ..., n} (4) Where, Wk is the weights of the factor k correspondingly. E. Compute the Incidence Coefficients

Gray system theory study objects characteristic of poor information and small sample with uncertainty, correctly describe and effectively control system by generating valuable information through some information, and grey Incidence Analysis has been applied in various areas of practical applications of gray theory. The essential idea of gey incidence is to distinguish similarity degree between many factors, after compare geometry curves of system sequences. If the geometry curves of system sequences are closer, the correlations between them are greater [4] [5]. Grey incidence analysis has been successfully applied to decision-making, forecasting, control, pattern recognition, overall assessment and model accuracy testing and diagnostic. It is the most widely used and most fruitful contents in grey system theory. From the philosophy of grey incidence, scholars define grey incidence with different viewpoints [6] [7]. There are several well-known grey incidence degree, such as Tang incidence degree, absolute incidence degree, relative incidence degree, slanting incidence degree, T- incidence degree, C-type and B-type incidence degree. Commonly the steps of Grey incidence Analysis are as following: A. Identify The Analysis Sequence In the study, with qualitative analysis, the comparative sequences (evaluated objective) and the reference sequence (evaluation criteria) are chosen, so the n +1 sequence of data matrix is as follows:

0i ( k ) =

min min 0 i ( k ) + max max 0 i ( k )

i k i k

0 i ( k ) + max max 0 i ( k )
i k

(5)

Where, is the distinguish coefficient between the value of (0, 1), and usually be assumed as 0.5. F. Compute Grey Weighted Incidence Coefficients
0i =
n k =1

k 0 i ( k )

(6)

Regardless of adopting experts advice or customers advice, it has a certain degree of subjectivity when determine the weights. The grey incidence degree of Deng is the basis of all grey incidence models. In this model different factors have the same weights. Although this situation does not comply with the actual economic problems, firstly it simplify the calculations, secondly it meets the four grey incidence Theorems. So in this paper, the grey incidence degree of Deng is adopted to calculate. G. Evaluation and Analysis According to the value of Grey weighted incidence degree, the evaluation objectives are sorted, and the greater degree shows the more favorable evaluation results.

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IV.

GREY INCIDENCE ANALYSIS OF AUTOMOBILE AFTERSALES SERVICE SATISFACTION EVALUATION

A. Choose Key Indexes Of Car Service Satisfaction Parasuraman, Zeithaml & Berry (1985) consider that service quality is a concept of the subjective awareness which is determined by the feeling of customers themselves, rather than an objective assessment. They have interviewed four industries: the banks, credit card companies, securities brokers and the maintenance factories, did research deeply, and built up 10 dimensions about service quality, then simplified to five dimensions [8]: tangible, reliability, the reaction responsiveness, assurance and empathy. Combined the research done by the customer Committee of China's Quality Commission, and J.D. Power on automobile after-sales service [9] [10] [11]. In this paper, 12 factors are chosen to examine customer satisfaction: convenience, responsiveness, waiting time, the environment matching, accessories quality, maintenance quality, staff attitude, feedback, personal service for transparent, reasonable charges and the overall evaluation. B. Determine Comparative Sequence and Reference Sequence Of After-Sales Service The investigation carried mainly at the petrol stations or automobile friends club in October 2007, Jiang-su Province of China. A total of 620 questionnaires were sent out and recycled 608 copies. Of which 582 copies were valid. To ensure the authenticity of the evaluation, the investigation targets are automobile owners. They evaluate 12 customer satisfaction factors between [0, 10] according to actual after-sales service
TABLE I. Factors Reference Sequences Audi Beijing Hyundai MercedesBenz Buick Changan Ford Volkswagen Dongfeng Peugeot Dongfeng Citroen Guangzhou Honda Hongqi Luxury Sedans Chery Chevrolet FAW Toyota Convenience Response 7.8 6.2 6.7 7.7 6.7 6.5 6.6 7.6 5.8 7.8 6.5 7.1 7.3 7.2 7.4 6.3 6.1 7.0 6.3 6.9 6.4 6.1 6.4 7.4 5.8 6.6 7.2 6.6

they perceived, and the higher scores represent the higher satisfaction (the result is shown in Table 1). The result of data analysis showed that this study involved 23 different brands and different sample sizes. In order to carry a scientific study, the brands have small sample size are not considered. SPSS 11.0 is used to calculate the mean value of factors, then the comparison sequence is built, and the maximum mean value is chosen as the reference sequence [11], which represents ideal service sequence of customer perceived. C. Compute Grey Weighted Inccidence Degree From the formula (2) to formula (6), grey weighted incidence degrees are as following:

, 02 = 0.684 , = 0.649 , = 0.841 0 9 = 0.838 0 10 = 0.717 ,

01 = 0.697
05
06

03 = 0.783
07 = 0.588

, ,

04 = 0.734

08 = 0.615

0 11 = 0.675 0 12 = 0.782

0 13 = 0.781

Sorted by degree, the result is:

06 01

09 02

03 0 11

0 12 05

0 13 08

04 07

0 10

Therefore, from strong to weak the after-sales service customer satisfactions are: Volkswagen, Guang-zhou Honda, Mercedes-Benz, Chevrolet, Dong-feng Citroen and Dong-feng Peugeot.

THE DATE OF AUTOMOBILE AFTER-SALES SERVICE SATISFACTION AND REFERENCE SEQUENCES Waiting Time 7.3 6.3 5.9 7.3 5.9 5.8 6.5 5.4 5.4 7.1 6.4 6.2 5.6 6.8 Matching Accessory Maintenance Staff Personal Transpare Reasonable Overall Feedback Environment Quality Quality Attitude Service nt Charges Charges Evaluation 7.6 6.8 6.1 7.0 5.7 7.6 6.3 6.0 6.4 7.1 6.2 6.4 6.6 7.1 7.2 6.4 5.9 7.1 5.8 7.0 6.5 6.6 6.5 7.2 6.2 6.1 6.8 6.9 7.6 6.4 5.9 6.8 6.1 7.0 7.1 6.6 6.7 7.6 5.7 6.4 6.8 7.2 8.0 6.2 6.5 7.5 6.8 7.1 6.7 7.7 7.5 8.0 6.5 7.4 7.4 7.0 6.4 5.7 5.1 5.6 5.1 5.0 5.1 4.6 4.8 6.1 4.3 4.8 5.9 6.4 6.9 5.7 5.1 6.9 4.9 5.0 5.8 5.9 5.5 6.8 5.8 5.3 6.4 6.1 8.2 7.0 7.5 8.1 7.0 5.9 7.1 8.0 6.8 7.4 7.2 7.3 8.2 7.3 7.4 5.8 5.6 6.4 5.2 6.1 6.3 5.6 5.7 6.9 5.4 5.4 6.2 7.4 6.8 5.9 5.3 6.5 5.8 5.5 5.9 5.5 6.1 6.1 5.1 5.8 6.5 6.8

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V.

CONCLUSION AND DISCUSSION

In order to describe the after-sales service market characteristics systematic and comprehensively, in this paper, 12 factors are selected such as convenience, responsiveness, waiting time, maintenance quality and etc. Then with the grey incidence degree of Deng, which is in accordance with the four grey correlation theorems, we built up Evaluation of after-sales service satisfaction model based on Grey Incidence Analysis. This model is simple for calculating, and with high efficiency. Besides above, small data are required to solve the problems. The results of the model show the sequence of after-sales service satisfaction from high to low: Volkswagen, Guangzhou Honda, Mercedes-Benz, and Chevrolet Dong-feng Citroen, and Peugeot. After grey incidence analysis, its known additionally that: 1) Ideal after-sales service sequence is a benchmark during strategy making. The ideal after-sales service provides a model in competitive market, and influence customers expectation. In turn, it affects the decision-making on management of aftersales service strategy. From Table 1, in reference sequence column, to the 12 indexes, the desired levels vary respectively. Transparent charges and the staff attitude is the first level of service indexes, if a certain brand vehicles perform unsatisfied in the first level of indicators, the Evaluation of customer satisfaction will be low. This view has been proved in the report of after-sales service quality issued by Chinese quality Commission. Visit, personal service and overall evaluation constitute the third level of service indicators, and all the automobile after-sales service is unsatisfied in these factors. If a certain brand vehicles performed better in the third level, its customer satisfaction level will be improved obviously. The remainders constitute the second level of service factors. The service providers need to improve after-sales service effectively with cost analysis. 2) The sequence of market and indexes can be used to improve the after-sales service level. For example, the Santana car had occupied the largest China's auto market, so the Manufacturer Volkswagen has a higher-level evaluation of after-sales service, and the maintenance quality and accessories quality can be guaranteed. Thus the level of consumers satisfaction is the highest, obviously in respective of environmental matching, accessories quality, the maintenance quality, staff attitude and reasonable charges. However, analysis shows that Volkswagen company performances unsatisfied in overall evaluation, the transparent charges, as well as personal services. In the future it need improve their after-sales service continuously from the market characteristics of different brands, upgrade their service level and Customer Satisfaction. Limited by the conditions, this study collects totally 582 samples. Although the sample size is large enough to meet the

requirement in statistics, the greater sample size is the better to assure applicability of the study conclusion. Secondly, this study investigates after-sales service situation of the 13 main brands. And this empirical research is not able to consider all brands in market, but Deng Correlation Coefficient adopted by this paper has the characteristics of four grey correlation theorems. If a new brand is introduced into the grey incidence analysis model, the former sequence may not satisfy. Although some scholars believe that it is reasonable to break the original balance while new elements added into the system. The problem, when a new series is introduced into the model, the former result order of Grey Incidence degree will not change, is a very meaningful research topic, and is needed to discuss in the future researches. VI.
ACKNOWLEDGEMENT

This work is supported in part by Nanjing University of Aeronautics and Astronautics under Grant S0832 092. Wang Jian-ling thanks Professor Robin Qiu for his grateful help. REFERENCES
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