MASTER'S THESIS Prioritizing of Airline Service Recovery Solutions

193 Pages·2008·1.99 MB·English

2008:074
M A S T E R ' S T H E S I S
Prioritizing of Airline Service
Recovery Solutions by Service
Problem Deployment Technique
with a Case Study in IranAir
Mehdi Toghian Chaharsoughi
Luleå University of Technology
Master Thesis, Continuation Courses
Marketing and e-commerce
Department of Business Administration and Social Sciences
Division of Industrial marketing and e-commerce
2008:074 - ISSN: 1653-0187 - ISRN: LTU-PB-EX--08/074--SE
Acknowledgments

This master thesis is a part of our studies in the filed of tourism and hospitality
management, in a joint program of Isfahan University-Iran and Lulea University of
Technology-Sweden.

I would like to thanks Dr. Dehghannejad, Dr.Shahin and Dr. Salehi, who offered us
new way, which was the pioneer program in this field in Iran.

Furthermore, there are several people that I would like to thanks for contributing to
the quality of this study. I would like to begin with thanking my supervisors, Dr.
Shahin and Dr. Dieke, for their essential and great guidelines through the time I
have been working on this thesis. In addition, I would like to the top managers of
the IranAir and other traveler filled this research questionnaires

Finally, I would like my loved ones. I would specially like to thank my father and
mother for their endless helps and my wife for her support during my study.
Carrying on it and passing the period of this hard work would have never been
possible without the help of one of them.

Mehdi Toghian
December. 2007
Abstract

Nowadays, the competitive world of businesses forces organizations to seriously
increase their customer satisfaction and loyalty and the leading companies have
conducted and experienced almost all of the related strategies. Meanwhile,
customer complaints management and service recovery solutions provide new
competitive advantages to the organizations and those who use more effective
solution to manage service failures is more expected to win the competition.

In this thesis, a new methodology has been proposed to prioritize service
recovery solutions, based on service failures. For this purpose, literature has
been reviewed and classified, considering its contribution to different parts of the
methodology. Two comprehensive sets of service failures and service recovery
solutions have been developed, which in turn has supported the House of Quality
(HoQ) analysis. The proposed methodology has been examined in IranAir as the
major airline in Iran. Data had been gathered from designed questionnaires a
statistically was analyzed. After computing the matrix in HoQ, The total values of
the service recovery solutions have been found and prioritized. Then they have
been compared with the priorities from managers' point of view and the
differences have been finally highlighted.
The outcomes imply that the new methodology has the capability to be
specialized for particular airlines, such as IranAir. The difference between the
results of the proposed methodology and the managers point of view outlines the
fact that the new methodology is much more effective than the traditional
approaches, in which the service recovery solutions are prioritized based on
managers' point of view. However, some recommendations and suggestions has
been presented, by which the applicability and effectiveness of the proposed
methodology is expected to increase.

Keyword: Service, Problem, Deployment, Recovery, Complaint, Failure,
Technique and Airline
Table of contents
Table of contents

1) Introduction....................................................... 1
1.1. Introduction.................................................................................2
1.2. Research Type...........................................................................2
1.3. Keyword .....................................................................................2
1.4. Problem Statement.....................................................................3
1.5. Background of Research............................................................3
1.6. Research Objectives..................................................................4
1.7 Research Originality and Value...................................................5
1.8. Research Application..................................................................6
1.9. Research Questions...................................................................6
1.10. Research type..........................................................................6
1.10.1. Research population........................................................7
1.10.2. Data collection tools.........................................................7
1.11. Chapter design.........................................................................7
1. 11.1. Chapter 2 .......................................................................7
1.11.2. Chapter 3.........................................................................7
1. 11.3. Chapter 4........................................................................8
1. 11.4. Chapter 5 .......................................................................8

2) Literature review............................................... 9
2.1. Introduction.................................................................................10
2.2. Effects of service failure on trust and commitment.....................23
2.3. Service failure and employee response......................................24
2.4. Service failures and service quality gaps analysis......................25
2.5. Reasons for customer dissatisfaction and switching behavior....27
2.6. Customer responses to service failure.......................................28
2.7. Core service failures...................................................................29
2.8. Level of service failure and service recovery..............................30
2.9. Criticality.....................................................................................31
2.10. Objective Service Failures and Consumer Complaints:
Supporting Evidence................................................................32
2.10.1. Objective Service Failures and Consumer Complaints:
Opposing Evidence..........................................................34
2.10.2 Relationships between Objective Service Failures across 36
Table of contents
2.10.3. Relationships between Objective Service Failures
and Complaints................................................................39
2.11. Complaints in the airline industry..............................................40
2.11.1. The complaints of frequent flyers.....................................43
2.11.2. Free tickets and upgrade of the flight class......................44
2.11.3. Personnel.........................................................................44
2.11.4 Card ownership......................................................................45
2.11.5. Priority services offered within the program...........................46
2.11.6. Alliances with the other airlines.............................................46
2.12. Service recovery solutions........................................................47
2.12.1. The complaining process.................................................47
2.12.2. Service recovery..............................................................49
2.13. Service recovery: from potential defector to loyalist ................57
2.14. Benefiting from service recovery and addressing complaints
and solving problems ...............................................................58
2.15. Recovery methods and Guidelines...........................................61
2.16. Service failure recovery training...............................................66
2.17. Organizational actions..............................................................70
2.18. Employee actions.....................................................................72
2.19. Service recovery options: the technology of service.................73
2.20. Attribution Theory and Justice Theory......................................75
2.21. Service recovery strategies......................................................79
2.22. The service recovery plan ........................................................84
2.23 Quality function deployment......................................................86
2.23.1 QFD and the House of quality (HoQ)................................88
2.23.2. Some of the important objectives of QFD.........................92
2.24. QFD Applications to Services...................................................93

3).Research methodology.................................... 98
3.1. Introduction.................................................................................99
3.2. New theoretical methodology.....................................................99
3.2.1. Service Problem Deployment.............................................99
3.2.2. The Problem Priority Matrix................................................100
Table of contents
3.2.3. A comprehensive HoQ for SPD..........................................103
3.2.4. A comprehensive set of service failures in the
air line industry .................................................................104
3.2.5. A comprehensive set of service recovery solutions............106
3.2.6. Questionnaire design.........................................................107
3.3. Validity of the questionnaire .......................................................107
3.4. Reliability analysis......................................................................108
3.5. Research population and sample...............................................108
3.5.1. Research population..........................................................108
3.5.2. Research sample...............................................................108
3.6. Data analysis/technique.............................................................109
3.7. Research executive framework..................................................109

4) Research Analysis............................................ 111
4.1. Introduction.................................................................................112
4.2. IranAir Company.........................................................................112
4.3. Data gathering............................................................................114
4.4. Reliability analysis......................................................................115
4.4.1. Mean and standard deviation of the data...........................115
4.4.2. One-sample t- test..............................................................115
4.4.3. Mean comparisons.............................................................118
4.4.4. Correlation analysis............................................................137
4.5. Prioritizing SRS using HoQ of SPD............................................158

5) Conclusions and recommendations....................... 165
5.1. Introduction.................................................................................166
5.2. Conclusions................................................................................167
5.3. Limitations..................................................................................169
5.4. Recommendations and suggestions for future studies...............170

References................................................................. 173

Appendices
Appendix A: Research questionnaire (Service failure questionnaire)
Appendix B: Research questionnaire (Service recovery questionnaire)
List of tables
List of tables

Table 2.1. Levels of Service Failure and Service recovery ...............32
Table 2.2. Product-Moment Correlation Coefficients between
Objective Service Failure (SF) Measures for Two Service
Industries...........................................................................38
Table2.3. Product-Moment Correlation Coefficients between
Consumer Complaints and Objective Measures of Service
Failures (SF) for Two Service............................................40
Table 2.4. Consumer complaints against top US airlines by
category ............................................................................42
Table 2.5. Complaints by flyers 2003 to 2004...................................43
Table 2.6. Getting it right the first time...............................................63
Table 2.7. Contingencies to service recovery....................................81
Table 3.1. Comprehensive set of service failures in
the airline industry............................................................105
Table 3.2. Comprehensive set of service recovery solutions
in the airline industry.........................................................106
Table 4.1. Descriptive statistics.........................................................116
Table 4.2. One sample t-test.............................................................117
Table 4.3. Means comparisons in case of gender.............................119
Table 4.4. Means comparisons in case of age..................................122
Table 4.5. Means comparisons in case of education.........................125
Table 4.6. Means comparisons in case of monthly earning...............128
Table 4.7. Means comparisons in case of job...................................131
Table 4.8. Means comparisons in case of purpose of trip.................134
Table 4.9. Correlation analysis..........................................................138
Table 4.10.Comparison of the priorities of SRS according to the
HoQ and the managers’ point of view..............................163
List of figures
List of figures

Figure 2.1. Service recovery option...................................................21
Figure 2.2. A typology of employee reactions to customer
orientation training..........................................................68
Figure 2.3. The four phases of traditional QFD.................................89
Figure 2.4. House of Quality (HoQ) in QFD.......................................92
Figure 3.1. Service Problem Deployment..........................................102
Figure 3.2. Problem-Priority Matrix....................................................103
Figure 3.3. A comprehensive HoQ for SPD.......................................104
Figure 3.4. Research executive framework.......................................110
Figure 4.1. Prioritizing SRS using HoQ of SPD.................................159
M.Toghian, M.Sc., Thesis, Chapter 1, 2007 1

CHAPTER 1
INTRODUCTION