Chapter I: Introduction
Nora Beach Resort is a luxurious retreat in Thailand, situated in a strategic place of Koh Samaui, the 3rd largest island, which offers its customers a break from the hassles of the real world. The resort enjoys a spectacular hillside setting, overlooking a seclude bay just north of the world famous Chaweng Beach. It is located a few minutes from the airport and a short drive from the city centre (Nora Beach and Spa, 2007).
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The Koh Samui has many attractions for the tourists. It is famous for the Full Moon party on Koh Phangan. There are also a lot of visiting places on the island like the Big Buddah, Namuang Waterfall, Hin Ta – Hin Ya, Sawadee Shrine, Hin Lad Waterfall, Scuba Diving, Dinning and restaurant and Samui nightlife etc. These attractions have attracted visitors tremendously and have contributed significantly to enhance the business opportunity for the local hotels and resorts offering services like spa. Nora Beach is one of the most famous resorts of the Samui Island.
Customer’s satisfaction is the main concern for every resort and hotel in order to keep the customers loyal to the resort and make them permanent visitors. It is believed that higher level of customer satisfaction may result in higher levels of repurchase. According to Oliver (1997), repeat purchasing is essential to a continued stream of profitability through achieving higher levels of customer satisfaction. Satisfaction can be defined as “the consumer’s fulfillment response. It has been a judgment that a product or service feature, or the product or service itself, provides (or is providing) a pleasurable level of consumption-related fulfillment, including levels of under-fulfillment or over-fulfillment” (Oliver, 1996, p. 14). The concept of consumer satisfaction occupies a central position in marketing thought and practice. Conceptually, satisfaction is an outcome of purchase and use results from the buyer’s comparison of the rewards and costs of the purchase in relation to the anticipated consequences. Operationally, satisfaction is similar to attitude in that it can be assessed as the sum of the satisfactions with the various attributes of the product or service. In the competitive market place, the organizations are striving for competence with more focus on Customer Satisfaction (Buchanan, Gilles, 1990).
In recent years, the marketing of services has changed tremendously in terms of approach and consumer behaviour. The consumer behaviour has been considered the ultimate success scale within the industry. The hotel industry is also among those sectors, which has been trying to attract customers for long term visits. For this purpose what the hotel industry needs is the effective marketing mix focused with customer satisfaction and loyalty.
Since 2003 the “holiday makers” often visit Thailand’s famous islands with turn over of 87.81% (Tourism Statistics, 2003). Koh Samuai, is often visited by “holiday makers” for its splendid beaches, whilst the famous Nora Beach Resort and Spa is the first preference of the visitors to stay and enjoy spa facilities offered by it. The Nora Beach and Resort is one of the most favorite resorts seizing customers’ satisfaction for the profound service.
1.2 Purpose of Study
The purpose of the study is to analyse the level of customers’ satisfaction at Nora Beach Resort, Koh Samui, Thailand. The study will try to suggest the strategy for achieving a desirable customers’ satisfaction in light of marketing mix.
Objectives of Study
The objectives of the study are as follow:
To understand the level of customers’ satisfaction by conducting a survey.
To analyse the characteristics of the customers’ satisfaction which contribute their loyalty for the particular resort or hotel. This will be done by analysing purpose of visit, gender, age, education and other characteristics.
To suggest a strategy to retain customer loyalty by adopting an effective marketing mix.
1.4 Study Structure
As the purpose of this study is to study and analyse the customers’ satisfaction with the case study of Nora Beach Resort and Spa at Koh Samui. For this purpose, the researcher will explore the contemporary literature on customers’ satisfaction in order to analyse the characteristics that attract and keep the customers loyal to a particular resort or hotel. Further, the customers’ satisfaction will be measured and analysed through self administered survey which were placed in the hotel lobby of the Nora Beach Resort. Further, methodology of the study will be explained in the methodology section as how the researcher collected and analysed the primary data. Finally, the results of the study will be presented that would be followed by the conclusions and recommendations.
Chapter II: Literature Review
2.1 Introduction
The analysis of the customers’ satisfaction involves many characteristics to study. While analysing the customers’ behaviour and satisfaction, one has to study 7 p’s of marketing in order to assess which factors can attract and keep loyal the customers’ with a certain resort or hotel. In the following section, this study will review the literature customers’ satisfaction in the context of the services offered by the Nora Beach Resort and Spa focusing the following seven factors:
Product
Price
Place
Promotion
People
Process
Physical Evidence
2.2 Service
The study of customers’ satisfaction in the field of general marketing has evolved into important parameters that need to be identified and understood in order to satisfy the needs and wants of customers (Parasuraman, Zeithaml, and Berry, 1988). Since the success of a business has been linked to providing high levels of customers’ satisfaction, a substantial amount of effort has been focused on identifying how consumers perceive service quality in various settings. Gronroos (1982) defined service quality as “the outcome of an evaluation process where the consumer compares his expectations with the service he perceived he has received.” In other words, perceived service is measured against expected service. Service quality has been seen as the result of comparing a customer’s expectations prior to receiving the service with the customer’s experiences with the service. Wyckoff (1984) defined the concept of service quality from the company’s perspective. Service quality is the degree of excellence for meeting the customer’s requirements, and control over the variability in achieving that excellence.
2.2.1 Service Theories
“A service is an intangible product involving a deed, performance, or an effort that cannot be physically possessed. Dominant component is intangible” (Service Marketing, 2007). Services are different from products because of their built-in characteristics which make it different from products. These characteristics include intangibility, perishability and inseparability. These characteristics make service not only different from physical goods, but they also require a greater deal of expertise in delivering them because the results of service offerings are mostly prompt and the feedback is immediately. Successfully delivering services depends upon how effectively a business promotes its service as there are higher chances of post- purchase dissonance in service offerings, if they do not meet the requirements of the customers. Sometimes services are offered as part of a package including a physical product. In that situation the quality of delivering the service depends upon the ability of the physical product. Apart from that each service experience can hardly be equal which makes services more heterogeneous in nature (Savitt, 1986).
In the hotel industry which is mostly dependent on services, it is very important that the service delivery is prompt and accurate. It is very important that the hospitality industry makes its expectations clear to its employees, as the service is delivered through them and creates a culture of service within the hotels (Verret, 2000).
2.2.2 Elements of Service
Co-ordinated marketing mix is designed in consideration of the elements of service. The elements of service are 1) Intangibility, 2) Inseparability, 3) heterogeneity, 4) Perishability. These elements of service in-fact differentiate it from goods. Hence therefore these elements create marketing challenges and opportunities as well that lead to the marketing strategy, which is different as of goods.
2.3 Impact of Service on Customer Satisfaction
Since it is not good that satisfy the customer but the services provided. This may be either the services provided independently.
The customer satisfaction is psychological state, which definitely needs a consistent measurement and analyses (Carrol, Reichheld, 1992). The customer satisfaction is directly associated with quality of service. The quality constitutes Value, Time, Access, Environment and commitment to the customer. (Carrol, Reichheld, 1992). This direct association of service to customers has created a shift in the approach. Now, the approach has been that satisfy existing customers by providing the best service quality rather imploring capital over attracting the prospect customers (Buckinx, Geert, Van den 2007).
2.2.4 Quality in Customer Service
A number of studies have been conducted in-order to measure the quality standards for the service industry. However, the service quality model as provided by Kay, Tore and Gronous has been given a priority for the instant results. For the assessment of customer satisfaction to the quality of service, the model bases the customer recent experiences in comparison of the customers’ perception or expectations (Storbacka, Strandvik, Gronroos, 1994).
The customer satisfaction is the right standard for the quality of service. A quality of service determines the business relationship and obviously the customer retention, as well. If the customer is dissatisfied with the service quality then it may end with adverse behaviours, which are customer may move away or no longer needs the service or may end with weaker relationship. Thus it is pivotal that in-order to retain customer loyalty then quality focus service needs consistent measurement and follow-up.
2.3 Customer Satisfaction
In the hospitality industry, customer satisfaction plays a crucial role because of its direct impact and proven impact on revenue generation, capability for hospitality business. Not only does customer satisfaction create a strong word -of -mouth advertising for these hotels, but it also helps them to retain their existing customers providing them with a significant opportunity to create long term relationships with their existing customer base.
2.3.1 Customer Satisfaction Theories
Customer satisfaction means that the customer is satisfied with a product or service which meets the customer’s needs, expectations and wants (Customer Service and Satisfaction, 2007). One of the fastest growing segments in marketing research is the study of customer satisfaction (Dutka, 1994). Customer loyalties are created when a customer is satisfied and once a business has established customer loyalties, it becomes one of the important components of sustainable and profitable growth. Customer satisfaction is strewn from customers’ expectations which pass through three different stages before rendering satisfaction. At level I of expectation, expectations are simple and take the form of assumptions. Level II expectations are higher than level I expectations and customers require satisfaction through service quality meeting some requirements or specifications. The levels III of expectations require organizations to delight their customers and produce something which attract customers towards its services and products. (Service Marketing, 2007). At this third stage customer satisfaction turns a customer into a loyal customer and provides opportunities for organizations to forge long- term relationships with their customers.
2.3.2 Functionalities of Customer Satisfaction
The functionality of customer satisfaction in the business world is that how effectively the services/goods meet the customers’ expectations. Therefore we can see across marketing world that each businesses success story relies on “Customer Satisfaction”. Thus the customer satisfaction has become the key element of business strategy in today’s market place (Buchanan, Gilles, 1990). Although the customer satisfaction varies from an individual to individual, however certain recommend standards can be opted in-order to mitigate positively the popular perception.
The common tool to opt the level of customer satisfaction is survey or collection of primary data where customer is asked to evaluate the open ended and close ended statements in accordance with the customers own perception. Thence the performance of the service/goods becomes contingent of that certain level of Customer Satisfaction.
2.3.3 Customer vs. Employee Satisfaction
A “cycle of success” was added to customer loyalty with employee loyalty as well (Schlesigner and Heskett, 1991). The concept suggests that customers’ satisfaction is contingent with employee ability to provide the services to customer therefore compact training and development of employees is inevitable in any service industry. The model is illustrated as follow:
Figure 2.3.3
Source: Sloan Management Review PP17-28
When employees are well trained in executing the service and well provided with corporate culture then in turn it will certainly maximize the sales volume with profit maximization. Further, it will also develop the customer loyalty, which deems necessary for the sustainability of service industry in competition.
2.3.4 Marketing of Services
Marketing is a broader concept which includes many different sub processes to make it a complete subject. Marketing mix is a critical part of the marketing process as it includes the whole gist of marketing in it. A marketing mix is generally composed of 4 P’s which include product, pricing, promotion and placement. These four P’s combine together make a complete marketing process (Netmba, 2007).
The usefulness of the marketing mix was effective in the early marketing days when physical products were the main offering of the companies. However, with the changing customer perceptions and advancements in the concepts of marketing, this combination lost its touch as more and more variations in this mix came in. Marketing mix is critical to the success of the marketing process because if there is any misbalance in the mix, then there can be serious issues which may cause the failure of the whole marketing effort. Therefore all four parts are critical and need to be effectively evaluated before deciding on their precise levels and contribution to the whole marketing mix. (Logman & Pauwels, 1998).
Marketing Mix (Services)
Product
Target Market
Price
Place
Promotion
People
Place
Physical
For the hospitality industry, the marketing mix may work in different ways as the services often do not find the media vehicles to advertise them effectively. This is often due to the fact that services because of their perishability do not provide a tangible look which can provide a sensual attraction to the customers. Secondly, the placement or the delivery channels used in the hotel industry are limited as services are consumed the same time they are being offered therefore there aren’t many delivery channels available in this sector. Also the decision of selecting a channel through which to market your service depends upon different dynamics of profit and cost weighing by the service providers (Coughlan, 1985).
Therefore, it is vital to determine customers’ satisfaction with the service of Nora Beach Resort and Spa in order to create the most efficient system for the hotel.
2.4 Hotel Categories
A hotel in itself is an institution, which provides temporary fringe facilities. The hotel services are ranked on the ability of services of restaurant, guest rooms, excellent amenities, excursion, entertainment and others.
2.4.1 Types of Hotel
The price and quality determines the type of hotel. This is indicative the type of services available by the establishment. The hotels are categorised as 1 star to 5 star, which is indicative of their hospitality and facilities available in the premises.
2.5 Nora Beach Resort and Spa
2.5.1 Information of the Hotel
The Nora Beach Resort is a luxurious retreat in Thailand, situated in a strategic place of Koh Samui, the 3rd largest island, which offers its customers a break from the hassles of the real world. The resort enjoys a spectacular hillside setting, overlooking a secluded bay just north of the world-famous Chaweng Beach. It is located a few minutes from the airport and a short drive from the city centre (Nora Beach Resort and Spa, 2007). The profound services of Nora Beach Resort and Spa are as follow:
Bars and Restaurants.
Recreation
Anodas Spa
Rooms
However, additional supportive services are as follow:
Travel and Tours Desk.
Taxi/Limousine Service.
Swimming pools
Laundry and Dry Cleaning.
Gymnasium/Fitness Room.
Baby Sitting Facilities.
2.5.2 Type of Customers
The type of customers visit Nora Beach Resort and Spa are holiday makers, however the professionals on travel also frequently visit the resort. According to a study by Thailand Tourism Statistics that 87% of tourists are holiday makers at Koh Samui Island; where the Nora Beach Resort is jewel of the attraction for the holiday makers at Koh Samui Islands. These categories of visitors consist of male, female and children with age diversity from 13 to 55 years on average. They prefer Nora Beach for the reason that major attractions of Island are nearby the resort.
2.5 Conclusion
Since 2003 the “holiday makers” often visits Thailand famous islands with turn over of 87.81% of the Thailand tourism industry (Tourism Statistics, 2003). Koh Samuai, Thailand is often visited by “holiday makers” for the splendid beaches, whilst the famous Nora Beach Resort and Spa are happened to be the tourists bustling preference. Since then is that tourist’s favorite Beach Resort seizing enough the Customer Satisfaction for the profound services? This will be analysed in the next section of the study.
Chapter III: Methodology
3.1 Introduction
The research will be intensively based on the collection of primary data and analysis of both primary and secondary data. The major reliance of the research design is collection of primary data via questionnaire and then preference will be given on Thai tourism statistics for Beach resorts in Thailand. The research is designed with more focus on customer satisfaction therefore characteristics of services as being offered to customers will also be examined that whether these services are exactly being offered according to the perception of the customers or they are variant to the customers’ needs. Therefore, the questionnaire is rightly designed in consideration of Seven Ps of marketing mix in-order to understand the quality standards of services at the par of customer satisfaction.
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The type of questions in the questionnaire is consisted of two parts. The part one tries to explore the customer satisfaction and perception regarding the service of Nora Beach Resort; however the Part two actually examines the customer reach and the personal characteristics. The part examines the quality of service as being executed at Nora Beach those are Spa, Rooms, Restaurant, Food Menu, Travel Desk and others. The second part examines the service experiences, preferences and awareness regarding the Resort services. At the end, it tries to know the demography, age and sex of the respondent as such those customers group may be fragmented in-order to understand the diversity of customers visit Nora Beach Resort.
3.2 Research Framework
The researcher has developed the questionnaire in order to collect quantitative and qualitative data. It will undergo a reliability and validity pilot test. The language of the questionnaire is English, since the majority of the guests are international. There will be three parts to the questionnaire, which will consist of list questions, rating questions and open questions. The variables of this test will be described using SPSS in order for the researcher to analyze by quantitative data analysis. For the qualitative data which supplements the quantitative data, it will be analyzed using content analysis.
3.3 Sampling
The population will be customers who stay in Nora Beach Resort and Spa; a total of n= 50 customers will complete the survey. The sampling technique needed for the case study will be non- probability sampling which are purposive and convenience.
3.4 Data Collection tool
The data collection tool is the designed questionnaire, which is consisted of twenty three questions. The collection will be through questions of open ended and close ended type. These types of questions will try to analyze the customers’ assessment and expectations regarding the facilities and services as provided at Nora Beach Resort and Spa, Thailand.
3.4 Data Collection
The research will be based on positivism principles with deductive approach. Since no evident research has been recorded yet therefore major reliance will be over the primary data collection.
The questionnaire developed will be placed in the guest rooms, as well as in the lobby and will be collected by Ms.Napaphon Rattanarak a proctor who was trained according to the guidelines established. Permission was granted by the resort manager to conduct this study following highest ethical standards and principles.
3.6 Data Analysis
This study expects to provide recommendations on improving service quality for Nora Beach Resort and Spa. The study will aim to ascertain the level of customer satisfaction with service quality; to enable the resort to gain a sustainable competitive advantage through customer satisfaction in Koh Samui, Thailand.
The analysis will examine that what are the products at frontline to the customer backed by tangible products? What is the perception of customer regarding the service? Is there customer loyalty with the service? What type of customers i.e. by age, profession, purpose and others are interested in availing the service? Thus in a nut shell following attributes will be analyzed of collected data:
The quality of service
The speed of service
The Pricing
Any Complain.
Types of Services Requirements
Customers’ Perception.
For this, responses will be evaluated on Five Point scale as shown below:
* 1(a) 2(b) 3(c) 4(d) 5(e)
Very Moderately Neutral Moderately Very
dissatisfied dissatisfied satisfied satisfied
*Evaluation Scale
An evaluation scale is designed to understand the level of customer satisfaction. The scale numbers from 1-5 is actually fragmentation of five levels of satisfaction. The collected data under each level will carefully be calculated in ratio as it is shown in equation as below:
1+ (a) +…. /5 *100; 2+ (b) +…. /5*100 …etc.
An end result will show the decree of satisfaction with particular form of service as offered at Nora Beach Resort. Finally, the collected result under each service category will be sum up and will be divided of hundred then mathematical result will show the total ration of customer satisfaction with the services provided.
3.7 Conclusion
The study has relied over Likert Technique because in-order to assess the level of customer satisfaction the best available method was to conduct survey. The respondents were visitors to the resort who availed the hospitality of the establishment. Their responses may be biased or truly reflective of the actual performance of the services as being provided at the resort. However, this provides a lot of interesting information regarding the perception of the customers. It was found that customers encourage of the new profound services at Resort, for instance; the resort has newly introduced more spacious and well decorated rooms, which were at the full satisfaction of the customers. It is significant to note here that customers prefer the room services of the resort for the reason that the location is nearer to island’s attractive spots. Contrary, it seems that employees are not as much satisfied. It was found that employees have to outback from their homes, which are far away from their duty stations. Thus resort must try to provide transport, housing facilities or special allowances in-order to reduce the travel hectic.
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