ABSTRACT
The study examined the effect of perceived value and travellers' satisfaction amongst airline users in Imo State, Nigeria. Specifically, the study sought to examine the effect of customer perceived value of price on travellers' satisfaction amongst airlines in Imo State. Ascertain the effects of customer perceived value of airport service quality on travellers' satisfaction amongst airlines in Imo State. Identify the effects of customer perceived value of social value on travellers' satisfaction amongst airlines in Imo State. Identify the effects of customer perceived value of functional value on travellers' satisfaction amongst airlines in Imo State. Four research questions and four hypotheses guided the study. The literature reviewed for this study was under the following subheadings: conceptual framework, theoretical frameworks, empirical studies, and summary of literature reviewed. A survey research design was adopted for the study. The study was carried out in Imo State Airport. The population of this study comprised of 382 respondents, which are travellers in Imo State Airport. The sample size was determined using Cochran formula. Hence, the total sample size was 1.96. The instrument for data collection was a structured questionnaire developed by the researcher. The data was analyzed using frequency, percentage, mean, and standard deviation for research questions, while Pearson product-moment correlation coefficient was used to test the hypotheses with the help of Statistical Package for Social Science (SPSS) version 22. The results revealed that the respondents agreed that all the items were the effect of customer perceived value and travellers' satisfaction amongst airlines in Imo State. Therefore, the null hypothesis of no significant effects was rejected in all the items tested. Hence, the variables had significant effects on the customer perceived value and travellers' satisfaction amongst airlines in Imo State. The research recommends, among other things, that there should be more improvement on service reliability among airlines in Imo State.
TABLE OF CONTENTS
Cover page i
Title Page ii
Declaration iii
Certification iv
Dedication v
Acknowledgements vi
Table of Contents vii
List of Tables viii
Abstract ix
CHAPTER1:
INTRODUCTION 1
1.1
Background to the Study ............................ 1
1.2
Statement of the Problems ............................ 5
1.3
Objectives of the Study ............................ 7
1.4
Research Questions ............................ 7
1.5
Research Hypotheses ............................ 8
1.6
Significance of the Study ............................ 8
1.7
Scope of the Study ............................ 9
CHAPTER 2: REVIEW OF RELATED
LITERATURE ............................ 11
2.1
Conceptual Framework ............................ 11
2.1.1
Overview of Airport Industry ............................ 12
2.1.2
Historical Development of Air Transportation in Nigeria
............................ 14
2.1.3
Customer Perceived Value (CPV) ............................ 15
2.1.4
Customer Perception ............................ 15
2.1.5
Customer Satisfaction ............................ 15
2.1.6
Perceived Value ............................ 16
2.1.7
Effect of Customer Perceived Value and Travellers' Satisfaction
............................ 17
2.1.8
Relationship between Service Quality and Customer Satisfaction
............................ 21
2.1.9
Problems Facing Air Transportation in Nigeria ............................ 22
2.1.10
Economic and Managerial Implications of the Problems ............................
25
2.2
Theoretical Framework ............................ 26
2.2.1
Stakeholders’ Theory ............................ 26
2.2.2
The Triple Bottom Line Theory ............................ 27
2.3
Review of Empirical Literature ............................ 27
2.4
Summary of Review of Related Literature ............................ 33
CHAPTER 3: METHODOLOGY
............................ 34
3.1
Research Design ............................ 34
3.2
Area of the Study ............................ 34
3.3
Sources of Data ............................ 35
3.4
Population of the Study ............................ 35
3.5
Sample Size Determination ............................ 35
3.6
Description of the Research Instrument ............................ 36
3.7
Validation of Instrument ............................ 36
3.8
Reliability of the Research Instrument ............................ 37
3.9
Method of Data Analysis ............................ 37
CHAPTER 4: PRESENTATION AND ANALYSIS
OF DATA ............................ 38
4.1
Data Presentation ............................ 38
4.1.1
Distribution and Return of Questionnaire ............................ 39
4.1.2
Distribution of Respondents by Gender ............................ 40
4.1.3
Distribution of Respondents by Age ............................ 41
4.1.4
Distribution of Respondents by Marital Status ............................ 44
4.1.5
Distribution of Respondents by Educational Qualification
............................ 42
4.2
Data Analysis ............................ 43
4.2.1
Research Question 1 ............................ 45
4.2.2
Research Question 2 ............................ 47
4.2.3
Research Question 3 ............................ 49
4.2.4
Research Question 4 ............................ 49
4.3
Test of Hypotheses ............................ 51
Hypothesis
1: ............................ 51
Hypothesis
2: ............................ 53
Hypothesis
3: ............................ 54
Hypothesis
4: ............................ 56
4.4
Summary of Findings ............................ 57
4.5
Discussion of Findings ............................ 58
CHAPTER 5: SUMMARY, CONCLUSION AND
RECOMMENDATIONS ............................ 60
5.1
Summary ............................ 60
5.2
Conclusion ............................ 61
5.3
Recommendations ............................ 62
5.4
Limitations of the Study ............................ 62
5.5
Suggestions for Further Studies ............................ 63
References
............................ 65
Appendices
............................ 68
LIST OF TABLES
Table Contents Pages
1: Questionnaire Distribution and Return
............................ 38
2: Frequency and Percentage Distribution of
Respondents by Gender ............................ 39
3: Frequency and Percentage Distribution of
Respondents by Age ............................ 40
4: Frequency and Percentage Distribution of
Respondents by Marital Status ............................ 41
5: Frequency and Percentage Distribution of
Respondents by Educational Qualification ............................ 42
6: Mean and Standard Deviation Showing the Customer
Perceived Value of Price on Travellers' Satisfaction Amongst Airlines in Imo
State ............................ 43
CHAPTER
1
INTRODUCTION
1.1 BACKGROUND OF STUDY
Travel
is an important event in tourism. Air travel has been a boon to global tourism.
Air transport is the transportation of passengers and cargo by aircraft and
helicopters. Thus, it is a transport mode for the movement or carriage by air
of persons or goods using airplanes and helicopters (Don- Beliner 2016). The
airline industry is a major player in the world economy as it contributes
significantly to the leisure/tourism and is a key element of international
business (Tiernan, Rhodes & Waguespack, 2018). As articulated by Pius
(2017) air transport is becoming more reliable, safe, and fast, compared with
other modes of transportation, such as road, rail, and ship. The sector has
contributed immensely to nations’ economic growth, especially in emerging
economies, through tax revenues, poverty alleviation by providing employment
opportunities, and encouraging communities’ integration (Nwaogbe, Wokili,
Omoke, and Asiegbu, 2013).
Given
the fact that air transport is the nation’s gateway to the international
marketplace, the quality of service in Nigerian airport transport is becoming a
major topic for discussion by stakeholders (passengers, investors, government,
and taxpayers). Airport Council International (2014) posited that air
passengers are asking for more value for their ticket money. Improving and
sustaining service quality can no longer be ignored by providers. This
encourages private sector involvement, promotes a healthy competition within
the industry, and adds positive value to the nation’s economy (Nwaogbe et al., 2013). Service quality and
customer satisfaction are two important factors in a competitive business
environment like the air transport industry. This study focuses on service
quality as customer perceived value. More so, it is important to the industry
to understand different measures that can be used in assessing service level
and customer perception, so as to be able to meet passenger needs and
expectations effectively. This can be done by understanding the gap that exists
between expectation and customer perceived experience or value.
Customer
perceived value is defined as the consumer’s overall assessment of the utility
of a product based on perceptions of what is received and what is given (Zeithaml,
2014). Perceived value has its root in equity theory, which considers the ratio
of the consumer’s outcome/input to that of the service provider’s outcome/input
(Oliver and DeSarbo, 2018). Two essential conceptions are established with
customer perceived value (CPV). First, Customer Perceived value is a result
from the consumers’ pre-purchase perception (expectation), evaluation during
the transaction (expectation versus received), and post-purchase (after-use)
assessment (expectation versus received). Second, Customer Perceived Value
involves a divergence between the benefits received and sacrifices given. The benefits include customers’ desired value,
e.g., quality. Sacrifices, on the other hand, include monetary (price) and
non-monetary (time, effort) considerations (Monroe, 2012). Sweeney and Soutar
(2012) categorised Customer Perceived value (CPV) into four types: functional value, economic value (price
value), emotional value and social value. For a firm to maximize customers’
perceived value, it must either increase the customers’ perceived value, e.g.
quality, and/or decrease their sacrifice, e.g., price paid, time and effort to
purchase. Perceived value is critical to the success of buyer-seller
relationships e.g, customer loyalty, and consists of “the consumer’s overall
assessment of the utility of a product based on perceptions of what is received
and what is given” or the benefits received and the sacrifices made (given)
(Lemon, Rust, & Zeithaml, 2018).
On
the other hand, travellers’ satisfaction, in turn, is hypothesized to be
influenced by perceived value. Perceived value, as it has been defined herein,
is the ratio of benefits received from providers relative to the costs
sacrificed by customers. In essence, it is a variable that reflects the net
utility derived from a provider. Travellers’ satisfaction, meanwhile, is
defined as an overall positive or negative feeling about the net value of
services received from a supplier (Woo, 2019). Woo (2019) argued that perceived
value represents customer cognition of the nature of relational exchanges with
their suppliers, and satisfaction reflects customers’ overall feeling derived
from the perceived value. Satisfaction can also be a person’s feelings of
pleasure or disappointment that results from comparing a product’s perceived
performance or outcome with their expectations (Kotler & Keller, 2019). As
a matter of fact with reference to this study, satisfaction could be the
pleasure derived by someone from the consumption of goods or services offered
by another person or group of people; or it can be the state of being happy
with a situation.
One
of the trending air access services is the local airlines services which
provide low priced fares to small or limited number of services compared to
huge aircrafts passenger. This became very appealing to aviation business
because it can help people who usually travel but have limited finances. Since
their reason for acquiring such services is more on travelling, then low-cost
carriers can provide it without any delays. In the Imo State, most low-cost
carriers are 50 percent lower than that of full cost carriers. And since
limited services are offered, market tends to seek quality to these specific
services. The quality of services is a concept where the airline industry fully
understands its value to their business stability and patronage among their
customers. More so, they should know how to measure its quality through the
customers’ perspective so that they will be able to focus on their point of
weakness and carry out to attain the satisfaction of customers. Hence, being in
the industry for a long time can impact their services due to extensive
experiences in the past. So they knew that service quality can increase their
profits, customer satisfaction, low expenditures, customer patronage and
retention (Kaufman, 2016).
The
fact above on service quality lead to increase of number of operators and
perceived frequent flyers in the industry which the perceived services value
and quality often reflect the customers’ level of satisfaction with the airline
and show intention to repatronize the service (FMA, 2012). According to
Nigerian Airport Authority (FMA, 2021), from visiting family and friends to
shipping high value products, 8.3 million passengers and 181,000 tonnes of
freight travelled to, from and within Nigeria; domestically, more than 66,800
flights make over 75 million seats available to passengers, destined to 18
airports as at years 2021. Since success of airlines in Nigeria will be its
ability to identify customers’ wants and needs, gather them up and then come up
with quality service that would meet customers’ satisfaction it important that
researches on assessing the determinant of choice of airline should be
continuous as this will assist all the stakeholders survive in their strive to suppress
competition by attempting to bridge the existing gap between customers’ service
expectations and the quality of service offered by them to fly within Nigeria.
In
Nigeria, the value of consumer benefit varies because of how often they fly,
and the value a passenger attach to additional flight will in general fall.
This is consonance to the law of diminishing returns which states that
affirming that to continue after a certain level of performance has been
reached, will result in a decline in effectiveness (Case & Fair, 2014). Hence, this study examines if the Nigerian
get the value of the expected fare paid for the flight, fully satisfied with
the services delivered or the air fee exceeds the perceived value gotten from
the flight and with the less value or satisfaction gotten through air
transport, some Nigerians still choose the air transport as a preferred means
of transportation to move within Nigeria. Reviewed literature shows that
studies on the transport sector of Nigeria have focused more on issues such as
complaints handling, patronage factors, constraints and contribution to GDP
(Agu & Okpara, 2015; Ogwo & Agu, 2015; Ayantoyinbu & Ekundayo, 2015).
Thus, there is no known study that has examined the effect
of customer perceived value and travellers satisfaction amongst airline in Imo
State, Nigeria. It is this gap that this
present study stands to close in view of the importance of these dimensions in
the global competitive ranking of service providers.
1.2 STATEMENT OF PROBLEMS
Customers
assess their experience with airlines based on their travel experience,
satisfaction level, and decide whether to use the same airline. Service quality
in airline industry is relatively more challenging to measure than
in other service industries (i.e. financial sector), in which system
and work processes consist of distinct but inter-related tasks (Ghazal and Suchita,
2014). According to Chang and Keller (2012) airline services are executed
concurrently and their delivery involves many entities (such as airport
authorities), and a host of other third parties (e.g. caterer, security
operatives and aviation services providers, etc.). Accordingly, a unified
effort is required to coordinate the multiplicities of processes needed
to deliver superior service quality in the airline industry (Chang
and Keller 2012). However, the perceived value is one of the factors that have
the greatest impact on improving travellers’ satisfaction (Saleem, 2017).
In
airline industry in Imo State, travellers’ satisfaction is very important to
encourage the clients to acquire their services. The satisfaction experienced
by their passengers can be used as part of their marketing using “word of
mouth” advertising. Further, patronage can be attained when the customers are
satisfied with their experiences with the services of airlines. However, there
are issues, complaints and flight problems that the airlines are usually
encountering. Customers can often
encounter flight problems or cancellations, delays, misconnections, or any
other deviations from schedule with or without warning from the airline.
Further, baggage issues are also a concern because instances where the
passenger reaches the destination but their complained about lost, damaged or
delayed luggage, charges for excess baggage, carry-on luggage problems, and
difficulties with airline claims procedures. Addition to this, ticket
reservation and customer services gained the attention of aviation industry.
These specific needs should be maintained and solved by the airline through the
enhancement of service quality.
A review
of literature about service quality reveals that the direction of causality and
relationships among service quality, customer satisfaction and loyalty is an
important, unresolved subject matter characterized by inconsistencies and
controversies. For instance, Auh and Johnson (2015) have viewed service quality
and customer satisfaction as complementary or divergent constructs. Although
a number of researchers have examined the relationship among perceived
service quality, customer satisfaction in the airline industry
internationally (Faheed, 2013; Saha, Theingi, 2014), to the best of the
author’s knowledge no study has yet investigated these relationships
in the Imo airline industry.
Correspondingly,
a review of customer perceived value literature reveals that
a sizeable number of previous research in Nigeria paid
a relatively large amount of attention to banks and the telecommunications
industry (Olatokun and Nwonne, 2012; Moguluwa and Ode, 2013). Considering this
focus and the expected faster growth rate of air transportation
in developing countries, it appears that the sector has been given
relatively less research attention than it merits. This study seeks to address
the gap in the literature by examine the effect
of customer perceived value and travellers satisfaction amongst airline in Imo
State, Nigeria.
1.3 OBJECTIVES OF THE STUDY
The
main objective of this study is to examine the effect of customer
perceived value and travellers satisfaction amongst airline in Imo State,
Nigeria. Specifically, the study seeks to;
1. Examine the effect of customer perceived value
of Price on travellers satisfaction amongst
airline in Imo State;
2. Ascertain the effects of customer perceived value
of Airport service quality on travellers
satisfaction amongst airline in Imo State
3. Identify the effects of customer perceived value
of social value on travellers satisfaction
amongst airline in Imo State;
4. Identify the effects of customer perceived value
of functional value on travellers satisfaction
amongst airline in Imo State.
1.4
RESEARCH QUESTIONS
The following research questions
will guide the study:
1. What
are the effects of customer perceived value of
Price on travellers satisfaction amongst
airline in Imo State?
2. What
are the effects of customer perceived value of
Airport service quality on travellers
satisfaction amongst airline in Imo State?
3. What
are the effects of customer perceived value of
social value on travellers satisfaction
amongst airline in Imo State?
4. What
are the effects of customer perceived value of
functional value on travellers satisfaction
amongst airline in Imo State?
1.5 RESEARCH HYPOTHESES
The following Null hypotheses
formulated will be tested for this study. These include;
(1). customer perceived value of Price has no effect on travellers’ satisfaction
amongst airline in Imo State.
(2). customer perceived value of Airport service quality has no effect on travellers
satisfaction amongst airline in Imo State.
(3).
customer perceived value of social value has no
effect on travellers satisfaction amongst airline in Imo State.
(4).
customer perceived value of functional value has no
effect on travellers satisfaction amongst airline in Imo State.
1.4 SIGNIFICANCE
OF THE STUDY
The
findings of this study will be important to a number of stakeholders in the
airline industry namely;
1. Airline Customers: The customers of Imo airways will gain from the study, knowledge of
various services, benefits as well as prices available at Imo airways. As such, the customers will gain
knowledge of how to use the various customer-oriented services and pricing
strategies to their own advantage. Furthermore, the customers will also gain
information on some of the customer-relevant practices that Imo has which they may have modified or
terminated.
2. Imo Airline
management: The study will be of vital importance to the Imo Airline management, as it will equip them with
crucial information regarding the various factors influencing customer
perceived value towards the airline. As
such, the study will influence managerial decision making regarding customer
strategy. In fact, the information provided in the study will be fundamental in
helping the management in forming customer strategy to achieve or maintain a
competitive advantage vis-à-vis its key competitors.
3. Other Airline Service Industries: Other airline
industries especially those operating in the Nigeria market as also stand to
gain from the study. The study will provide these companies with important
information regarding market and customer trends, which they can use, develop
effective strategies. The management of other airline industry will be able to
read from the study the competitive strategies employed by Imo airline and
other competitors within the Imo State market and develop their competitive, customer perceived value that may help them improve their travellers
satisfaction amongst airline and
commitment or attract others.
4. Other researchers and academicians: The
study aims to contribute to the general literature and theory on customer
perceived value and
particularly on this pertinent factors influencing customer
perceived value in
the airline industry. As such, the study aims to aid future researchers on customer
perceived value with
relevant information that will help them understand the issue more deeply.
Furthermore, future researchers can use the information provided in the study
as part of their literature review.
1.7 SCOPE
OF THE STUDY
This
study will be delimited to examine the effect
of customer perceived value and travellers satisfaction amongst airline in Imo
State, Nigeria. The scope of this current
study includes; customer perceived value of Price,
Airport service quality, social value and functional value as
independent variable while the dependent variable to be covered is travellers
satisfaction amongst airline in Imo State.
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