Perceived service quality in the air freight industry

Abstract

The study of service quality is still at its infancy. Service quality can be addressed from the service provider's perspective or from the customer's perspective. From the customer's perspective, it is known as perceived service quality. It is the result of the customer's view of a bundle of service attributes, some of which are technical whilst others are functional in nature. In this study, the attributes of service quality are elicited from the customer's perspective. The customers consist of air freight forwarders and shippers in Singapore and Malaysia. In freight distribution, other than service, price is also an important dimension. Most of the studies being conducted in freight distribution are limited to the rail and truck freight industry. In the air freight industry, the study on price and service are virtually non-existent. This study addresses both the customers and the airlines. On the customers side (consisting of air freight forwarders and shippers), it addresses the components of perceived service quality and the trade-off among price and service attributes. On the airlines' side, it also covers the trade-off among price and service attributes. This is to measure the size of the gap between the customer expectations and airline's management perceptions of those expectations. Additionally, a comparative study among the airlines is carried out on their emphasis on the key factors affecting the service production system. r The study makes use of the Repertory Grid technique, the Conjoint Analysis, and the Structured Questionnaire. The analyses are conducted using three different programs: INGRID (for the Repertory Grid technique), $FTROFF (for the Conjoint Analysis), and SPSS (for the Conjoint Analysis and the Structured Questionnaire). The research shows that there are three components of perceived service quality labelled as Predictability, Capability, and Interaction. Both the Predictability and Capability components address the technical outcome, whilst the Interaction component addresses the functional outcome. The "good" airlines are perceived to have a better performance on all the three components than the "average" and "poor" airlines. However, among the three components, the "good" airlines are perceived to perform better on the Predictability component, whereas the "average" and "poor" airlines are perceived to perform better on the Interaction component. Within the customers, there are the price sensitive and less price sensitive respondents. The price sensitive respondents place more emphasis on the core service, whereas the less price sensitive respondents place more emphasis on the peripheral services. Within the forwarding company, the price sensitive respondents comprise the top/sales managers, and the less price sensitive respondents comprise the operations personnel. For the shippers, the price sensitive respondents comprise the manufacturers of consumer electronics, whereas the less price sensitive shippers comprise the manufacturers of industrial electronics. The research shows that there is a negative gap on the core service between the customer expectations and the airline perceptions of those expectations. On the peripheral services, the gap is positive between the airlines and the top/sales managers in the forwarding company, whereas it is negative between the airlines and the operations managers in the same company. Among the three categories of airlines, the "good" airlines place more emphasis on seven key factors affecting the service production system than the "poor" airlines. Of these, four could be categorised as management factors, and they are Marketing Research Orientation, Upward Communication, Goal Setting, and Task Standardisation. The other three are operations factors, and they are Team-work, Technology-job Fit, and Perceived Control. The management key factors affect the gap between customer expectations and management perceptions of those expectations, and between management perceptions of customer expectations and the service-quality specifications. The operations key factors affect the gap between service-quality specifications and service delivery. The research has contributed to the knowledge on perceived service quality and research methodology. In addition, the research findings are useful to the airlines. The important components and attributes of perceived service quality can be used by the airlines to design the service offering. The trade-off analysis can also be used by the airlines to modify the service offering for the specific customer group. The comparative study among the airlines on their emphasis on the key factors will be useful in improving the service production system.