“Customer satisfaction in Greek coastal shipping services”
by
Emmanuel GAVALAS
Abstract
Customer satisfaction is a fundamental concept in marketing and its pursuit an
important goal for businesses (Leavitt, 1983; Webster, 1994). By developing
knowledge from the customer satisfaction data about the way customers perceive
quality (outside-in) it will be possible to take more concrete actions for continuous
improvement. (Ton van der Wiele, et al., 2002). To measure satisfaction there are
models that are using cumulative techniques. Most known models of measuring
customer’s satisfaction are the ECSI (European model), and the ACSI (American
model). These models are measuring the causing and effecting variables and the
correlations between them. Those measurements do not improve the knowledge about
what customers really find important and how customers build their perceptions.
(Ton van der Wiele, Paul Boselie, Martijn Hesselink, 2002). This paper is proposing a
method that is measuring marketing satisfaction through criteria that are considered
the most important for the customers and provides a barometer of global and partial
(for each criterion) satisfaction index, in relation to the demanding, performance,
effectiveness and importance levels that these criteria have to consumers. In addition
the satisfaction measurement is examined through analysis of variables data that are
causing or are the effects of customer satisfaction, in order to prove further the results
and validation of the proposed method and make more accurate the managerial
implications within the specific services sector of coastal shipping in Greece.
Introduction
Greece as a nation with small mainland and a plethora of islands depends essentially
on its ferry services to maintain its economic, political and social cohesion. Coastal
shipping always was one of most important means of transportation for thousand
years so far. Greek coastal shipping ranks among the largest such operations in
Europe. The coastal shipping companies operating in this environment must first and
foremost have a market orientation if they want to compete and remain profitable
and/or even to survive. The product/services they provide have to be of superior
quality than what their competitors are offering. Customers’ (passengers) satisfaction
is a key role of coastal shipping companies. Customer satisfaction measurement is an
1
encouraging sign as customer satisfaction is at the heart of the marketing concept.
Although this measure does not appear directly on a company’s profit and loss
account, it is a fundamental condition for corporate success. The process involves the
setting of customer satisfaction criteria, the design of a questionnaire to measure
satisfaction on those criteria, the choice of which customers to interview, and the
analysis and interpretation of the results (Jobber, 2004). All the existing methods do
not measure customers’ satisfaction directly. They measure satisfaction through other
variables that are causing or effecting customers’ satisfaction. These variables are
measured directly (latent variables) or through other variables that are called manifest
variables. Although the correlation of these variables to satisfaction has been proved
in many surveys, it varies proportionally with each situation.
2.
The coastal shipping in Greece is a services unique sector that combines the
tangible element of ships that in many cases (small islands without airports) are
transportation means without competitors. However, this situation is changing fast.
Many different companies are competing now in particular the summer months,
providing a superior services product that includes transportation speed, assurance,
comfort, effective customers responding, in competing fares. The questions that arise
are: Are customers satisfied? Are companies’ actions relative to their customers’
expectations and do these actions contribute positively so as to achieve customers’
retention? Are their actions in the right direction? Are companies aware of the relative
importance that their offered services have to their customers? What are the services
that are most important to their customers and how satisfied are their customers with
different aspects of services been offered? The purpose of this research is to
accomplish a valid satisfaction measurement that can lead to valuable conclusions for
improvement actions for companies that are operating in the environment of coastal
shipping in Greece.
Literature Review
The nature and special characteristics of services
The word “service” is widely used to “indicate an industrial sector that “do[es]
things for you”. (Nick Johns, 1999). The use of a service can be characterized as a
consumption process as opposed to outcome consumption, where only the outcome of
a process is consumed or used. (Christian Grönroos, 1998). Because of the process
nature of services, the fulfilment of promises given through external marketing is
dependent on the attitudes and behaviour of a large number of part-time marketers
(Christian Grönroos, 1998). According to Bleakley and Shugan the service sector is
booming (Bleakley, 1996; Shugan, 1994). In the USA, services account for more than
70 percent of the Gross Domestic Product. In service businesses, what is given and
received is relatively intangible. Consequently, customer evaluative criteria are less
well articulated, and the appraisal of the value received is much more subjective
(Berry, 1980; Keaveney, 1995; Lovelock, 1991; Zeithaml et al., 1993).
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Services’ relationship marketing
In practice, relationship marketing originated in industrial and b-2-b markets but
today most of the relationship marketing research is being done in services marketing.
According to Evert Gummesson at the Swedish School of Economics, this is because
long-term relationships are most expensive to create and most profitable to nurture in
the service sector (Gummesson, E. 1987).
Customer retention strategies
All these benefits mean that is of the benefit of services organisations to design
customer retention strategies. Customer retention strategies used to built relationships
and tie customers closer to service firms. (D. Jobber, 2004). Some business analysts
have suggested that the cost of recruiting a new customer is five times more than the
cost of retaining an existing customer (Barsky, 1994; Reichheld and Sasser, 1990).
According to Reichheld and Sasser, 5% improvement in customer retention can cause
an increase in profitability of between 25 and 85 percent depending on the industry
(Reichheld and Sasser, 1990). However Carrol P. et al, disputes these calculations,
claiming they result from faulty cross-sectional analysis. (Carrol, P. and Reichheld, F.
1992).
Customer satisfaction
Customer satisfaction is a fundamental concept in marketing and its pursuit an
important goal for businesses (Leavitt, 1983; Webster, 1994). The necessity of
customer satisfaction has been highlighted by Piercy who admits that customer
satisfaction, “lies at the heart of all the endeavours of all organisations –both public
and private and if it does not, then it definitely should.)” (Piercy, 1995). Customer
satisfaction has been defined as the result achieved when service or product features
respond to customer needs and when the company meets or exceeds customers’
expectations over the lifetime of a product or service (Juran, 1991). Because
satisfaction is defined from the customers’ perspective, all satisfaction improvement
projects must start by defining what customers want and need from a company
(Oliver, 1981). According to Vavra, customer satisfaction is the leading criterion for
determining the quality actually delivered to customers (Vavra, 1997). Customer
satisfaction is the key factor determining how successful the organisation will be in
customer relationships (Reichheld, 1996). Positive evidence on the direct relationship
between customer satisfaction and organisational performance is found by Koska
(1990) and Nelson et al. (1992) in hospital settings with higher profitability. Other
research (Buzzell and Gale, 1987; Jacobson and Aaker, 1987; Gale, 1992; Hallowell,
1996; Fornell, 1992) shows that higher customer satisfaction translates into higher
than normal market share growth, the ability to charge a higher price, improved
customer loyalty with a strong link to improved profitability, and lower transaction
costs. Customer satisfaction is also found to be strongly correlated with repurchase
intentions, the willingness to recommend the company, and to improved cross-buying
(Reichheld, 1996; Cronin and Taylor, 1992; Parasuraman et al., 1988; Zeithaml et al.
1996; Anderson and Sullivan, 1993; Verhoef et al., 1999). However, the link between
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customer satisfaction and profits is neither straightforward nor simple (Zeithaml,
2000)
Service quality and customer satisfaction
Many authors agree that service quality and customer satisfaction are conceptually
distinct but closely related constructs (Parasuraman et al., 1994; Dabholkar, 1995;
Shemwell et al., 1998). Considerable research has focused on service quality
dimensions as the primary determinants of customer satisfaction (Parasuraman et al.,
1988; Brown et al., 1993; Zeithaml et al., 1996). Service quality has been described
as a form of attitude – a long-run overall evaluation, and the two constructs (service
quality and attitude) are viewed as similar (Parasuraman et al., 1988; Zeithaml, 1988;
Bitner et al., 1990; Bolton and Drew, 1991a, b; Cronin and Taylor, 1992; Bitner and
Hubert, 1994). As Shemwell argues in today’s world of intense competition, the key
to sustainable competitive advantage lies in delivering high quality service that will in
turn result in satisfied customers (Shemwell et al., 1998). Allport (1935) defined
attitude as “a learned predisposition to respond to an object in a consistently
favourable or unfavourable way”. Therefore if the overall judgment of the service is
based on the total quality of the service, perceptions of service quality could occur at
multiple levels in an organization – e.g. with the core service, physical environment,
interaction with the service providers, etc. (Bitner and Hubert, 1994). The global
satisfaction of a services organisation is based on customers’ experiences of the
organisation. Similarly, to service quality, customer satisfaction can occur at various
levels in an organization, e.g. satisfaction with the services providers, satisfaction
with the services tangibles and satisfaction with the whole organization. Sureshchanda
et al., (2002). The research literature on service quality has identified numerous
models by different researchers across the world. However, the SERVQUAL
instrument (Parasuraman et al., 1988), that measures service quality along five factors
with a 22-item scale, namely reliability, responsiveness, assurance, empathy and
tangibles, forms the foundation on which all other works have been built.
(Sureshchanda et al., 2002). However the conceptualization, dimensionality,
operationalization, measurement and applications of SERVQUAL have been
subjected to some severe criticisms. (Buttle, 1996). Despite the efficacy of
SERVQUAL across different service settings, there is a general agreement that the 22
items are reasonably good predictors of service quality in its wholeness. But a careful
scrutiny of the 22 items imply that the items at large deal with the element of human
interaction/intervention in the service delivery and the rest on the tangible facets of
service (such as the effect of atmospherics, design and décor elements, appearance of
equipment, employee appearance, etc.). Therefore the SERVQUAL instrument seems
to have overlooked some other important factors of service quality, namely the
service product or the core service, systematization/standardization of service delivery
(the non-human element), and the social responsibility of the service organization.
(Sureshchanda et al., 2002).
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Perceived service quality
Perceived service quality is viewed as consisting of two primary dimensions: core, the
basic service “contracted” for or promised, and relational, the way in which the
service is delivered (Grönroos, 1985; Morgan and Piercy, 1992).
The above give evidence for hypothesis 1: By having knowledge a company, about
customer satisfaction from the way customers perceive quality, it will be possible to
take concrete actions for improvement. More specifically it is hypothesised that:
H1: “Satisfaction level is positively related to customers’ satisfaction of services
quality perceptions”.
According to Morgan and Hunts’ (1994) interpretation, trust exists when one party
has confidence in a partner's reliability and integrity. According to Rotter (1967) and
Moorman et al., (1993) trust could exist at the individual level. Furthermore,
according to Parasuraman et al., (1985, 1988) trust, when conceptualised as a
dimension of service quality, could also be thought of as “trust in the service itself.”
In many cases found that service providers cannot retain their customers, even though
they are satisfied. (Heskett et al., Schneider and Bowen, 1999). This gives evidence
that satisfaction only cannot ensure long term customers’ commitment to a service
provider. Looking beyond satisfaction, trust is between the variables that can
strengthen retention. (Hart and Johnson, 1999). According to Morgan and Hunt, firms
often look beyond satisfaction to developing trust in order to ensure economically
viable long-term relationships. Further, this recommendation is based on the premise
that once trust is built into a relationship, the likelihood of either party ending the
relationship decreases due to high termination costs. (Morgan and Hunt, 1994). Those
who are not willing to trust a vendor in a competitive marketplace are unlikely to be
loyal. The importance of trust in explaining loyalty is also supported by authors as
(Lim et al., 1997). In line with the above it is hypothesised that:
H2: “Trust level is positively related to loyalty level”.
According to Hart and Johnson, the condition beyond satisfaction that ensures true
customer loyalty is total trust. They argue that the presence of trust reflects a stronger
relationship commitment than satisfaction. (Hart and Johnson, 1999). Therefore it is
hypothesized that:
H5: “Trust level is positively related to customers’ satisfaction level”.
Perceived value, according Zeithaml is defined as the consumers’ overall assessment
of what is received relative to what is given (Zeithaml, 1988). Research findings
suggests that customers who perceive that they received “value for money” are more
satisfied than customers who do not perceive they received “value for money”
(Zeithaml, 1988). According to Anderson it is asserted that perceived value has a
direct impact on how satisfied customers are with a supplier (Anderson et al., 1994)
and according to Ravald and Grönroos that satisfaction depends on perceived value
(Ravald and Grönroos, 1996). Therefore it is hypothesised that:
H3: “Customers’ satisfaction will be directly related to perceived value”.
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With the assumption that perceived value and quality contribute directly to
satisfaction and future intentions, it is considered possible when the quality of the
product/service increase, the value that comes from prices related to quality increases
respectively. Therefore it is hypothesised that:
H4: “Perceived value is positively related to services quality perceptions”
Additionally in line with the above, it is hypothesised that:
H10: “Perceived value is positively related to customers’ retention”.
Customers of service firms have specific, concrete expectations of the service retailer
(Clow et al., 1991), (Kurtz and Clow 1992-1993), (Zeithaml et a., 1993). According
to widely accepted opinion in service research, customer perceived service quality
results from how well customer expectations match actual experiences of the service
(see e.g. Grönroos, 1982; Parasuraman et al., 1988; Gummesson, 1991).
Expectations take on a normative quality when they have become established through
previously encountered situations, i.e. when the consumer can consistently anticipate
the behaviour of the service retailer (Boulding et al., 1993, Miller, 1997, Swan and
Trawick, 1980, Zeithaml et al., 1993). When expectations become well established,
they become almost obligatory. When a consumer has interacted with a service
retailer and has experienced a certain level of service that is satisfactory, the consumer
not only expects that the retailer will continue to behave so in future encounters, he or
she strongly believes that the retailer should act that way (Boulding et al., 1993).
According to Gronroos expectations are based on market communication, image
(including former experiences), word of month and customer needs. (Gronroos,
1982). In the present study the following are hypothesised:
H6: “Positive customers’ expectations are positively related to customers’
satisfaction”. And also,
H9: “Positive customers’ expectations are positive related to customers’
retention”.
In evaluating the quality of a service, the two primary dimensions of technical and
functional quality are filtered through the image that the client has for the service firm
(Cristensen, 1992, Gronroos, 19884, 1990, Haywoodfarmer, 1988). The image not
only impacts consumers′ evaluation of the service, but also impacts what they will
expect from the firm during their next service encounter (Clow 1993, Clow et al.,
Donovan and Rossiter, 1982, Kotler, 1973, Kurtz and Clow, 1991, Mazursky and
Jacoby, 1986, Zeithaml at al 1985). The image that a consumer has of a service firm is
affected by the word-of-mouth communications a consumer receives from others
(Clow et al., 1991, Gronroos, 1990, Kurtz and Clow 1991, Murray, 1991). Positive
word-of-mouth will have a positive effect on a firm’s image while negative word-ofmouth will have the opposite result. For firms a consumer has never patronized, there
is still a definite firm image and the primary determinant of that image is the opinion
of others (Clow et al., 1991). In the present research it is hypothesised that:
H7: “Company’s positive image is positively related to customers’ satisfaction”.
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Customer retention
Customer retention becomes an important source of long-term business success (Rust
and Zahorik, 1993). The longer a business firm can keep a customer, the greater the
life-time revenue from that customer. Furthermore, while revenues increase from the
same customer, the costs of serving him/her decline. Customer loyalty is a prime
determinant of long-term financial performance of firms (Jones and Sasser, 1995).
This is particularly true for service firms where increased loyalty can substantially
increase profits (Reichheld and Sasser, 1990; Reichheld, 1996). As Woodruff says,
service firms focus on achieving customer satisfaction and loyalty by delivering
superior value, an underlying source of competitive advantage (Woodruff, 1997).
Service loyalty is defined as: The degree to which a customer exhibits repeat
purchasing behaviour from a service provider, possesses a positive attitudinal
disposition toward the provider, and considers using only this provider when a need
for this service exists (Gremler and Brown, 1996). Customer disloyalty presents a
more difficult setting for understanding in Service industries than manufactured goods
industries. This is because, due to the intangible nature of the services. Heavy use of
satisfaction surveys by service industries is driven by the assumption that a satisfied
customer will return for a repurchase (Jones and Sasser, 1995). Numerous studies in
the service sector have hypothesized and empirically validated the link between
satisfaction and behavioural intentions and behaviours such as customer retention and
word of mouth (e.g. Anderson and Sullivan, 1993); (Rucci et al., 1998, Bansal and
Taylor, 1999, Connin et al., 2000). Indeed, this link is fundamental to the marketing
concept, which holds that satisfying customer needs and wants is the key to repeat
purchase (Kottler et al., 2000). In line with previous research it is hypothesised that:
H 8: “When satisfaction level is increasing, the level of customers’ retention is
increasing too”.
Measuring customer satisfaction
Customer satisfaction is the key factor determining how successful the organisation
will be in customer relationships (Reichheld, 1996). If companies want to achieve
customer satisfaction, they must measure it, because as Ho says “You cannot manage
what you cannot measure” (Ho, 1995). Measuring customer satisfaction has become
increasingly popular in the last two decades and today represents an important source
of revenue for market research firms (Oliver, 1999, p. 33; Perkins, 1993). Customer
satisfaction measurement should include understanding the gap between customer
expectations and performance perceptions, as there is a connection between
satisfaction and profitability (Brown, 1998). Before measuring, organisations can
collect and analyze appropriate data, which are considered most appropriate to
provide relevant information relating to customer satisfaction. However there is a
danger on assessing of what companies think customers probably want and what
customers really want. It is important to measure the right things, due to possibility of
wrong specifications or misinterpretations of what a customer actually wants (Kekäle,
2001). Therefore criteria for satisfaction measurement must be defined by the
customer. Measuring the performance dimensions that are not critical drivers to the
customer but to service providers is a problem. (Ingrid FeL.ikova, 2004). Customer
satisfaction research is mainly influenced by the disconfirmation paradigm
(Parasuraman et al., 1988). This paradigm states that the customer’s feeling of
satisfaction is a result of a comparison process between perceived performance and
7
one or more comparison standard, such as expectations. The customer is satisfied
when he/she feels that the product’s performance is equal to what was expected
(confirming). If the product’s performance exceeds expectations, the customer is very
satisfied (positively disconfirming), if it remains below expectations, the customer
will be dissatisfied (negatively disconfirming). Although most scholars agree on the
disconfirmation paradigm, the nature of satisfaction remains ambiguous. On the one
hand, satisfaction clearly arises from a cognitive process comparing perceived
performance against some comparison standards. On the other hand, the feeling of
satisfaction essentially represents an affective state of mind. Consequently, some
satisfaction scales tap the cognitive dimension of satisfaction, while others capture its
affective nature. The extent to which a satisfaction scale focuses on the cognitive or
the affective dimension, however, should have an impact in terms of both the
antecedents that affect satisfaction and the consequences fostered by satisfaction. (A.
Eggert, W.Ulaga, 2002).
Satisfaction and Importance value
Most customer satisfaction measurements are based on short lists of items, which
have been defined inside out. Those measurements do not improve the knowledge
about what customers really find important and how customers build their
perceptions. (Tom van der Wiele, Paul Boselie, Martijn Hesselink, 2002). We
measure value because it is important, but we also need to know how important it is.
We need to identify products/services relative importance level e.g. what kind of
quality the customers really want. Furthermore, based on the importance of the
matter, we can structure the needs into a hierarchy of primary, secondary and tertiary
needs in order to correctly determine customer satisfaction with the features that
really matter. This is the only way to find out how satisfied customers really are. .
(Ingrid FeL.ikova, 2004).
Various methods for customer satisfaction measurement
The most known satisfaction measurement models are the American and European
(ACSI) and (ECSI). In these models customer satisfaction is measured in a similar
way. For instance the ACSI approach includes a number of issues that can also be
found in other similar methods:
 It is based on an econometric model with measures of an index of satisfaction
and measures of related indices for latent variables that are general enough to be
comparable across companies, industries and sectors.
 It is measured as a ‘latent” variable using several manifest variables
(questions).
 Customer satisfaction is embedded in a system of cause –and-effect
relationships. This serves to validate the index.
 Finally, a primary objective is to estimate the effect of ACSI on customer
loyalty that is very important for future business performance.
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The “MUSA” method
The MUSA (Multicriteria Satisfaction Analysis) system is a preferencedisaggregating model. The preference disaggregation methodology is an ordinal
regression based approach (Lagrèze and Siskos, 1982; Siskos and Yannacopoulos,
1985). It is an evaluation, combining multicriteria preference disaggregation analysis
and rule induction data mining. It aggregates the individual judgments into a
collective value function, in order to evaluate the customers’ satisfaction level.
(Siskos and Grigoroudis, 2002). This model is following the principles of ordinal
regression analysis. Data with different preferences from a satisfaction survey are
aggregated in unique satisfaction functions. Customer satisfaction should be measured
in a way that client’s preferences and expectations are possible to count. The main
objective of the MUSA method is the aggregation of individual judgements into a
collective value function assuming that customer’s global satisfaction depends on a
set of criteria or variables representing service characteristic dimensions. (Siskos and
Grigoroudis, 2002) More specifically, it is assumed according to Grigoroudis and
Siskos (2001) that consumers’ global satisfaction can be explained by a set of criteria
or variables representing the product’s or service’s characteristic dimensions. The
multicriteria analysis is used for the assessment of a set of marginal satisfaction
functions in such a way that the global satisfaction criterion becomes as consistent as
possible to customers’ judgements. The customers are to provide their judgments
regarding a set of different criteria. In addition they are asked to provide their global
and their partial satisfaction for the set of specific criteria they had asked to express
their judgment. The MUSA method assesses both global and partial satisfaction of
customers and global and partial judgments of them. The data of this method are
based on the consumers’ judgments. (Grigoroudis and Siskos (2001) According to
Grigoroudis and Siskos this model can be characterized as a consumer-based method
that considers the qualitative form of customers’ judgements and preferences. Input
data can be easily collected through a rather simple and short questionnaire.
(Grigoroudis and Siskos (2001).
Results of the “MUSA” method
The main results from the aforementioned preference disaggregation approach are
focused on global and partial explanatory analysis (Grigoroudis and Siskos, 2001) and
consist of:
A. Value functions and criteria weights (Grigoroudis and Siskos, 2001)
I.
Global satisfaction index (shows the percentage level of global
customer satisfaction from a 0-100 percent range);
II.
Added value curve (the form of the curve indicates whether
customers are demanding);
The customers’ degree of demanding (neutral, demanding or non demanding
customers), is indicated with the form of the estimated value functions. Satisfaction
value functions and criteria weights considering that they show the real value, in a
normalized interval [0, 100], that customers give for each level of the global or partial
ordinal satisfaction scale: (Grigoroudis and Siskos, 2001)
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 Neutral customers: in this case, the value function has a linear form;
the more satisfied these customers express they are, the higher the
percentage of their fulfilled expectations is.
 Demanding customers: this refers to the case of a convex value
function; customers are not really satisfied unless they receive the best
quality level.
 Non- demanding customers: this refers to the case of a concave value
function; customers express that they are satisfied, although only a small
portion of their expectations is fulfilled.
III.
Criteria/sub criteria satisfaction indices (show in the range of 0-100
percent, the level of partial customer satisfaction according to the specific
criterion/sub criterion);
IV.
Weights of criteria/sub criteria (show the relative importance within
a set of criteria or sub criteria); Average improvement indices
The output of the improvement efforts depends on the importance of the satisfaction
dimensions and their contribution to satisfaction as well. The average improvement
indices can show the improvement margins on a specific criterion.
V. Demanding indices (show customers’ demand level).
Demanding indices can be used for customer behaviour analysis, and they can also
indicate the extend of company’s improvement efforts: the higher the value of the
demanding index the more the satisfaction level should be improved in order to fulfil
customers’ expectations
B. Action diagrams (Grigoroudis and Siskos, 2001)
Combining weights and average satisfaction indices a series of action diagrams can be
developed. These diagrams indicate the strong and the weak points of customer
satisfaction and define the required improvement efforts. These diagrams are also
mentioned as decision, strategic, perceptual, and performance – importance maps,
(Dutka, et al.1995). Each of these maps is divided into quadrants, according to
performance (high-low), and importance (high – low) that may be used to classify
actions. The grid can be used in order to identify priorities for improvement.
I. Status quo (low performance and low importance). Generally, no action is
required.
II. Leverage opportunity (high performance/high importance). These areas can
be used as advantages against competition.
III. Transfer resources (high performance/low importance). Company’s
resources may be of better use elsewhere.
IV. Action opportunity (low performance/high importance). These are the
criteria that require attention.
C. Improvement diagrams (Grigoroudis and Siskos, 2001)
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The action diagram (figure 4) can indicate which satisfaction dimensions should be
improved, but they cannot determine the output or the extent of the improvement
efforts. For this reason combining average improvement and demanding indices, a
series of improvement diagrams can be developed. Each of these maps is divided into
quadrants according to demanding (high/low) and effectiveness (high/low) that may
be used to rank improvement priorities. Improvement priorities are determined
according to demanding (high/low), and effectiveness (high/low):
o First priority. Direct improvement actions are included in this
quadrant, since these criteria are highly effective and customers are not
demanding.
o Second priority. The included satisfaction dimensions have either a
low demanding index or a high improvement index.
o Third priority. There are small improvement margins concerning the
satisfaction dimensions of this quadrant and therefore significant effort
is required.
Research methodology
The research decided to be limited to the geographical boundaries of Athens wider
area. The population of interest for this research is ‘citizens from the region of Attica’.
In Attica (capital’s city area), live the 35% of the whole population in Greece.
(Census, 2001). From Piraeus and Rafina the two main ports of this area depart the
majority of Greek coastal shipping ships to all destinations. . According the results of
a previous survey, from 16,095 respondents’ examining the starting point and the final
destination outcomes of passengers ships, identified that 86 percent of those who
embarked from Piraeus port are coming from the Athens wider area, while the 3
percent approximately come from Thessaloniki and 2 percent from Larissa and from
abroad. The rest areas of the country participate in lower percentages. (Athanasiou S.,
N., 2002). Thus a highest percent of Greek citizens are visiting the islands mainly the
summer period, through the closest ports of Piraeus and Rafina; so there is a
satisfactory base to ground a quantitative analysis, which would help to investigate
the extent of customers’ satisfaction preferences, on coastal shipping transportation
services through detailed and carefully designed questions. The questionnaire was
designed in that a way that could offer data that correspond to:

Behavioral and demographic characteristics of the consumers,

“MUSA” analysis

Validation analysis
To support “MUSA” analysis a part of the questionnaire (questions 6-15) is aiming at
the revealing of the quality perception that customers have for their first choice
company in five sub questions groups that correspond το each of the five quality
dimensions of Parasuraman, Berry, et al., (1988), namely tangibles, reliability,
responsiveness assurance and empathy, according to their experience. Each of the
quality dimension questions’ group is followed by a separate question that requires
the satisfaction level that consumers have for its respective quality dimension for their
11
first choice company. The total satisfaction of the consumers is questioned in a
following question directly. The assessment of a set of satisfaction criteria and the
definition of the value hierarchy is one of the most important stages of the
implemented methodology (Grigoroudis and Siskos, 2001). The hierarchical structure
of customers’ satisfaction dimensions is presented in Figure 1.1 and shows the criteria
and subcriteria used in this survey. The identification of customer preferences and the
determination of the weak and strong points of services provided in coastal shipping,
can contribute to a strategic planning for improvement of this particular sector.
The rest of the questionnaire is designed so as to reveal “latent” or “manifest”
variables to satisfaction in order to facilitate the validation analysis. The image of
first choice coastal shipping company, the extent to which customers trust this
company, the expectations that consumers have, the level of company’s
responsiveness on complains handling, the respondents intentions for retention, “word
of month”, loyalty and cost to switch to another company.
The sample size was determined to be 150 respondents, and the conducted period
from December 20th to January 10th,.
Data analysis
A general view of customer satisfaction is given through the global criterion
frequencies. Respondents seem to be quite satisfied with coastal shipping services of
their first choice company; since 54 percent of them answered that they are satisfied.
The global satisfaction function is an S-type curve, which indicates that customers are
not particularly demanding. (Figure 1.3).
Global satisfaction analysis
The results of the basic criteria are presented in Table 1.1. The relative value of
importance that each criterion has to customers is displayed. According to its indices
the tangibles criterion is far more important than the other ones (almost 41, 5 percent).
This shows how sensitive customers are in terms of tangibles. The reliability,
responsiveness, assurance and empathy have a considerable importance and were
awarded a weight of approximately 15 percent each. The remaining criteria do not
seem to play an important role in customers’ preferences (Figure 1.4). As far as the
average global satisfaction index is concerned, it has a relatively satisfactory value of
73 percent. This is mainly due to the criterion of empathy, which has the lowest
satisfaction index (41.0 percent). The tangible criterion satisfaction index is 92.3
percent while criteria of reliability, responsiveness, and assurance have considerable
high satisfaction indices (74.2, 78.7 and 78.6 percent respectively). The respective
significance index of tangibles is 41, 5 percent and has the higher position between
the other criteria posed. As far as the satisfaction index of empathy criterion
concerned, it has the lowest position 41.0 percent while the relative importance level,
for the total of respondents between the other criteria is 14, 7 percent. It means that
respondents, consider this criterion with the same approximately importance level
with criteria of reliability, responsiveness and assurance. Figure 1.5 illustrates better
how dissatisfied customers seem to be with empathy criterion. The customers total
demanding level is shown in Figure 1.6. The negative value of the average demanding
12
index (–52.0 percent) shows that customers are not particularly demanding in general
with the coastal shipping services. However, respondents declare that they are
demanding for empathy criterion even though they are not demanding with other
services dimensions. The level of customers’ demanding for empathy criterion is 29. 2
percent. (Figure 1.7). Customers declare that they are most satisfied with four of the
quality criteria of coastal shipping services (tangibles, reliability, responsiveness, and
assurance, but they appear not demanding in these quality set of criteria. While
customers are less satisfied with “empathy” quality dimension of coastal shipping
services, they appear demanding with this particular dimension. The action diagram
(figure 1.8) indicates the strong and weak points of the service. The perceptual map
presented in this diagram reveals that there is no dimension in the critical quadrant
and so no immediate improvement is required. However, attention should be paid to
the criterion of empathy as it can be characterized as a potentially critical satisfaction
dimension. Customers seem to be dissatisfied with empathy criterion (low
performance) regarding quality. Tangibles on the other hand are a strong point and are
considered to be a competitive advantage of coastal shipping services because the
high performance comes together with high importance). The responsiveness,
assurance and reliability are of high performance but low importance in the eyes of
the respondents. Therefore they need less attention. The improvement priorities
according to the improvement diagram (figure 1.9) should be focused on:


The empathy dimension of service quality in coastal shipping services given
that the average satisfaction index is particularly low. The high effectiveness
level gives reason for actions for improvement. The fact that respondents
appear very demanding means that large efforts are required for its
improvement.
With second priority for improvement due to its low effectiveness are criteria
of services quality responsiveness, assurance, reliability and tangibles whose
while the satisfaction index is low, the demanding level of customers is also
low and therefore not great effort is required for its accomplishment.
The demanding level that respondents have is critical and has an analogous impact to
the improvement of the satisfaction level (the more demanding the customers are the
more actions for improvement has the company to do in the particular demanding
direction to improve the satisfaction level of the customers). The MUSA method is
providing the “impact” indices that show the percentage of effect in the dissatisfaction
of the consumers. In the figure 1.10, the impact to the dissatisfaction that each
criterion has to the consumers, is presented. Generally the impact level is low.
However empathy appears with a noticeable percentage 8, 7% that clearly shows that
empathy has more impact to customers’ dissatisfaction.
Validation analysis
The research findings concerning the levels of the “latent” or “manifest” variables that
are antecedents, components or “results” of satisfaction level or examination of the
validation will be analyzed and compared through Kendall’s’ tau b indices and cross
tabulations. The results will give evidence for justification or reject each of the
hypotheses to be tested.
13
Hypothesis: 1“Satisfaction is positively influenced to satisfaction of services
quality perceptions”
The Kendall’s tau b indices for correlations of all sub dimensions of each of the
quality dimensions namely tangibles, reliability, responsiveness, assurance and
empathy, to the satisfaction level for the specific quality dimension and the global
satisfaction level that respondents have for their first choice company, are found
positive and significant high.
Therefore, it is concluded that total satisfaction and satisfaction level of services
quality perceptions are positively related to each other and the hypothesis that total
satisfaction is positively influenced by satisfaction level of services quality
perceptions is confirmed.
Hypothesis: 2: “Trust level is positively related to loyalty level”
Cross tabulation analysis, showed that from those respondents that declare
strongly/somewhat agree or neither agree nor disagree, with the “intention to
repurchase” they also express analogous level of “trust”. Therefore, it is concluded
that Trust and loyalty are positively related to each other and the hypothesis that
Trust is positively related loyalty is confirmed.
Hypothesis: 3:“Customers’ satisfaction will be directly related to perceived
value.”
The cross tabulations analysis showed that from those respondents that declare
“strongly/somewhat satisfied” they are also positive to price values that have for the
company, in the significant high percentage. Therefore, it is concluded that customer
satisfaction and perceived value are positively related to each other and the
hypothesis that satisfaction is positively related to perceived value is confirmed.
Hypothesis 4: “Perceived value is positively related to services quality
perceptions”
It is observed that the Kendall’s tau b values are very low, and in one case
(responsiveness 4) the value is negative. It is concluded that, there is no relationship
between prices and quality’s dimensions.
Therefore, it is concluded that perceived value and services quality perceptions are
not positively related to each other and the hypothesis that perceived value is
positively related to services quality perceptions is not confirmed.
Hypothesis 5:“Trust level is positively related to satisfaction level”
The Kendall’s tau b indices of the correlations of different trust values that
respondents express for the company of their first choice, to all satisfaction values that
14
respective to each one of the quality dimensions, and for the global satisfaction of
their first choice company, are positive, significantly high and quite similar with a few
fluctuations. In addition to Kendall’s tau b indices, cross tabulations results between
those of the respondents who are globally satisfied and they also trust the company of
their first choice, showed that from those respondents that declare “strongly
satisfied/somewhat satisfied” they also trust (in different values examined) the
company of their first choice in the percentages.
Therefore, it is concluded that satisfaction and trust are positively related to each
other and the hypothesis that trust is positively related to satisfaction is confirmed.
Hypothesis 6: “Positive customers’ expectations are positively related to
customers’ satisfaction.”
Results from cross tabulation analysis showed that respondents that declare satisfied
with the company had also positive expectations about the company of their first
choice. The results are analogous and clearly appear that values that result from
relations of neither satisfied nor dissatisfied customers”, that they also trust the
company, are significantly low and their indices cannot give safe conclusions.
Therefore, it is concluded that satisfaction and customers’ expectations are positively
related to each other and the hypothesis that customers’ satisfaction is positively
related to satisfaction is confirmed.
Hypothesis 7: “Company’s positive image is positively related to customers’
satisfaction”
Company’s image can be measured through the value of responds on the question
“1”:“the company offers the best services”. 58.5% of respondents agreed. 12% of
them agreed strongly. The Kendall’s tau b concerned with the correlations of the
company’s image and satisfaction for the quality dimensions in comparison with the
Kendall’s tau b concerned also with the correlations of company’s image with the
total satisfaction (dependent variable), appeared the same for tangibles and empathy
satisfaction values while for the satisfaction values that concern satisfaction for
reliability, responsiveness and assurance showed lower indices.
Therefore, it is concluded that company’s image and customers’ satisfaction are
positively related to each other and the hypothesis that customers’ satisfaction is
positively related to satisfaction is confirmed.
Hypothesis 8: “When satisfaction level is increasing, the level of retention is
increasing too.”
The above hypothesis will be examined through the following components of
retention:
-loyalty
-switch
Therefore we could divide the above hypothesis to the following:
15
a) Satisfaction is positively related to loyalty intentions of consumers.
b) Satisfaction is positive related to switching costs
Indices of Kendall’s tau b, correlations of different loyalty values with each of the
satisfaction values for each of the quality dimensions and the global satisfaction level,
are positive, and have quite high average level. In addition, Kendall’s’ tau b indices
from correlations between different satisfaction values and intentions to repurchase /
recommend (word of mouth) are positive and have a quite high average index. Cross
tabulations analysis showed that from those respondents that declare “strongly
/somewhat satisfied” they also agree to a high percentages not to change the services
provider due to each of the switching costs.
Therefore, it is concluded that satisfaction and customers’ loyalty and customers’
resistance to switching costs are positively related to each other and the hypothesis
that customers’ satisfaction is positively related to customers’ retention is confirmed.
Hypothesis 9: “Positive Customers expectations are positive related to
customers’ retention”
The above hypothesis examined through the following components of retention:
-loyalty
-switch
Therefore the above hypothesis could divided to the following:
a) Customers’ expectations are positively related to loyalty intentions of
consumers.
b) Customers’ expectations are positive related to switching costs
Indices of Kendall’s tau b, of two main loyalty independent variables (Intention to
repurchase / intention to recommend the company to others) with different customers
expectations are positively related and have a quite high average index.
Indices of Kendall’s tau b, of the others loyalty independent variables (as shown
above) with different customers’ expectations are positively related and have a quite
high average index. Therefore it is concluded that customers’ expectations are
positively related to customers’ loyalty. Indices of Kendall’s tau b, of the customers’
costs to switch (as shown above) with different customers’ expectations are related
positively but have a very low average index.
The results show that customers’ expectations and cost to switch the services provider
are not analogous. However, as customers’ expectations and loyalty are positively
related to each other, it is concluded that the hypothesis that customers’ satisfaction
is positively related to customers’ retention is confirmed.
Hypothesis 10: “Perceived value is positive related to customers’ retention”
The above hypothesis is examined through the following components of retention:
-loyalty
-switch
Therefore we could divide the above hypothesis to the following:
c) Perceived value is positively related to loyalty intentions of consumers.
16
d) Perceived value is positive related to switching costs
The two first (from customers’ expectations) are perceived value indices. Indices of
Kendall’s tau b, of the customers’ loyalty intentions (as shown above) with customers
perceived value, are related positively and have a quite high average index.
As from the above results is concluded that the perceived value is positively related to
customers loyalty intentions.
As from the above results it is concluded that the perceived value is not positively
related to customers’ different costs to switch to another services provider..
Indices of Kendall’s tau b, of the customers’ costs to switch the services with
customers’ perceived value, are related positively but have a low average index
The results show that customers’ perceived value and costs to switch the services
provider are not analogous. However, as customers’ perceived value and loyalty are
positively related to each other, it is concluded that the hypothesis that perceived
value is positively related to customers’ retention is confirmed.
Summary and Interpretation of Research Findings
The majority of the respondents declared that they are coastal shipping services’ users
for recreation reasons. (76, 8%). 53, 9 percent of the respondents declared that they
are satisfied with the coastal shipping services of the company of their first choice.
The shape of the demanding curve showed that they are not particularly demanding.
The global satisfaction analysis revealed that “tangibles” between the other quality
satisfaction criteria, appears most important to consumers. While its “importance”
indict of tangibles is approximately 41, 5 percent, indices of all the other quality
dimension criteria are in an average level of fifteen percent.
While the average global satisfaction index of reliability, responsiveness and
assurance is 77,1 percent, the tangibles satisfaction index is 92,3 and the empathy
41,0 percent.
The total demanding index of the respondents is -52, 0 %. However, the empathy
criterion index is positive (customers are demanding), 29, 2 %. Also, the impact level
that “empathy” has to customers’ dissatisfaction is 8,7% and its almost double that the
average level of all the others.
The strong and the week points of the service revealed that customers seem to be less
satisfied with “empathy” criterion. However the high effectiveness level of “empathy’
gives reason for improvement actions. The other criteria are of second priority for
improvement, generally.
Results of hypothesis to be tested
The above results of correlations of antecedent or effecting variables to satisfaction,
according to the findings in the coastal shipping services sector in Greece, show that
there is a significant relationship with satisfaction. More specifically it is concluded
that:
17
I. First, satisfaction values of quality dimensions are indeed suitable to be used
as criteria for satisfaction measurement as a whole for coastal shipping sector.
II. Second is concluded that those who declare that “trust” their coastal shipping
services provider they are also satisfied and loyal to the same provider.
III. Third, perceived value has a direct impact to the coastal shipping services
satisfaction and loyalty for their services provider. However there is not
indication that there is any relation to costs for switching services provider.
IV. Fourth, that perceived value is irrelevant to services quality perceptions of
coastal shipping services. Therefore, perceived value even though has a
positive impact to satisfaction, it is estimated that cannot be used as a
criterion, or a component of other criteria for satisfaction measurement.
V. The positive expectations level that customers have for their first choice
company is a precursor of the satisfaction and loyalty to their provider.
However, customers’ positive expectations are not justified that are analogous
to costs for switching their services provider.
VI. The positive image is directly related to the level of satisfaction.
VII. The more satisfied the customers are the more their retention level increases.
From the above results, it is indicated that variables results that reflect coastal
shipping customers’ attitudes on coastal shipping preferences, that causing or
effecting satisfaction are positively correlated to quality dimensions that having been
selected as satisfaction criteria in the method used for the satisfaction measurement,
and to satisfaction value. According to the existing literature this multiple indication
is giving evidence for the justification and validation of the results of satisfaction
measurement method. Therefore it is concluded that the multi criteria satisfaction
analysis (MUSA) method is providing valid results of global customers’ satisfaction.
The fact that this method appears better to the existing ones is the simultaneous
providing of the qualitative data of consumers namely preferences and importance
levels for the different services quality criteria. Moreover, selection of the quality
dimensions as criteria for satisfaction measurement is proved to be a correct choice.
The fact that satisfaction measurement is a predictor of customer retention it means
that can be used as a tool for managers and all those who are responsible for strategies
and actions planning for their organizations improvement.
Coastal shipping sector in Greece needs satisfaction measurement in a continue basis,
to identify the status level that their consumers have for their companies and specify
fields for improvement that are correspond to the customers demand and are of high
importance for their customers. The measurement through multi criteria satisfaction
analysis (MUSA) method can give a detail satisfaction index but is dependent on
criteria that are selected from the researcher and based on his judgment that they are
of most significance value to the services provider customers. In this survey the
quality dimensions’ selection as criteria for satisfaction measurement has proved to be
a correct choice, and can be a driver for future satisfaction measurements in the sector
of coastal shipping. However, this choice cannot exclude the researcher to select other
criteria in a future research.
Trust, image, and positive customers’ expectations for their services provider could be
considered as predictors of customers’ satisfaction and loyalty. Positive customers’
opinion of services perceived value is positively related to their satisfaction and
loyalty for their services provider, however it is estimated that perceived value cannot
18
be used as criterion for satisfaction measurement, due to its irrelevance with quality
dimensions satisfaction criteria.
Marketing people should never forget that satisfied customers are not bound, but are
prone to defect, because of a competitors’ offer, that is always possible in free market
and in coastal shipping sector in Greece in particular. However, it is essential to know
that, as satisfaction increases, people tend to be more loyal and also they tend to spend
more for their service provider only to keep the advantages they know and trust. Thus,
marketing managers should understand that satisfaction is not enough, but, actually,
the degree of satisfaction is what it matters. This should be the goal.
The present satisfaction measurement is considered “unique” in coastal shipping
sector that is of major importance for Greece. This kind of measurement could be re
used in the future surveys in regular time intervals. Thus it could be used as a
“barometer” of customer satisfaction to support coastal shipping transportation means
companies efforts for customers’ retention.
19
Appendix I
20
GLOBAL SATISFACTION
TANGIBLES
RELIABILITY
Ergonomic ships’
interior
RESPONSIVENESS
The company always
Keep its promises
ASSURANCE
EMPATHY
High experienced/
professional personnel
Personnel availability
Personnel
politeness
p
Sufficient trained
personnel
Personnel friendliness
Modern equipment
Accuracy on itineraries
Attractive ships;
interior
Passengers’ nee
first
Personnel willing
Safe feeling
provided
Personnel responding
Innovated ships/
Safe systems equipped
Passengers
interests first
Personnel direct
Abnegation personnel in emergency
Non stop
services
Well dressed
personnel
Special care
To unable
Sufficiency of news
providing means
Adequacy of snack bars
Figure 1.1 Hierarchical structure of customers’ satisfaction dimension
total satisfaction
60
50
40
30
Percent
20
10
0
extreme ly satisf ied
neither satisfaie d n
satisf ied
extreme ly dissatisf i
dissatisfie d
total satisfaction
5%
48,9%
33,8%
9,4%
2,9%
Figure 1.2. Global satisfaction frequencies for coastal shipping services
21
100,0
100
83,7
75,7
80
68,5
60
40
20
0,0
0
extremely dissatisf ied dissatisf
neither
ied
satisf ied nor dissatisf ied
satisf ied
extremely satisf ied
Figure 1.3. Global satisfaction function for coastal shipping services of
respondents’ first choice company
Global satisfaction analysis
CRITERION
WEIGHT AVERAGE
AVERAGE
AVERAGE
SATISFACTION DEMANDING IMPROVEMENT
INDEX (%)
INDEX (%)
INDEX (%)
TANGIBLES
41,5
92,3
-80,7
3,2
RELIABILITY
14,9
74,2
-35,5
3,8
RESPONSIVENESS 14,5
78,7
-44,8
3,1
ASSURANCE
14,5
78,6
-44,8
3,1
EMPATHY
14,7
41
29,2
8,7
Table 1.1 Results of the basic criteria
WEIGHTS OF COASTAL SHIPPING SERVICES CRITERIA
(relative importance level)
4
14%
5
15%
J TANGIBLES
3
14%
TANGIBLES 41,5
%
1
2
3
4
5
2
15%
Figure 1.4 Relative importance level of basic criteria
WHERE: 1 is tangibles
2 is reliability
3 is responsiveness
22
4 is assurance
5 is empathy
100%
Satisfaction
92,3%
74,2%
80%
78,7%
78,6%
60%
41,0%
40%
20%
0%
Tangibles
Reliability
Responsiveness
Assurance
Empathy
Figure 1.5 Criteria satisfaction levels
De m anding Inde x
-52,0%
Figure 1.6 Customers’ total demanding index
100%
Dem anding
50%
29,2%
0%
-50%
-35,5%
-44,8%
-44,8%
Reliability
Responsiveness
Assurance
-80,7%
-100%
Tangibles
Empathy
Figure 1.7 Criteria demanding levels
23
Tangibles
Responsiveness
Assurance
Reliability
Em pathy
Figure 1.8 Action diagram
low
Importance
high
Figure 1.9 Improvement diagram
100%
Im pact
80%
60%
40%
20%
3,2%
3,8%
3,1%
3,1%
Tangibles
Reliability
Responsiveness
Assurance
8,7%
0%
Empathy
Figure 1.10. Criteria impact levels
24
Appendix II
25
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