The Service Quality Evaluation and Improvement on Coach Customers of Coach Terminal. Sheng Wang, Ph.D. Associate Professor

Transcription

1 The Service Quality Evaluation and Improvement on Coach Customers of Coach Terminal Sheng Wang, Ph.D. Associate Professor School of Economics and Management, Chang an University Xi an, Shaanxi Province, , China Tel: Fax: Yinhai Wang, Ph.D. (Corresponding author) Professor Box Department of Civil and Environmental Engineering, University of Washington Seattle, WA Tel: (206) Fax: (206) Genyao Fan, Ph.D. Professor School of Economics and Management, Chang an University Xi an, Shaanxi Province, , China Tel: Fax: ABSTRACT Bingtao Wu Postgraduate student School of Economics and Management, Chang an University Xi an, Shaanxi Province, , China Tel: Fax: Recent reforms have separated the roles coach terminals and coach operators, with the result that coach companies have essentially become customers of the coach terminals they serve in China. Thus, improving the service quality for coach customers will in turn enhance the competitiveness of coach terminals. Based on the service quality model SERVPERF, this paper sets up a service quality evaluation system which includes 5 dimensions and 18 evaluation indicators. Further, the improved IPA method is applied to evaluate priorities to improve the coach terminal service quality with respect to the needs of coach operators. The proposed methodology is applied to a case study in southwestern China, and is demonstrated to be both practical and informative for station operators seeking to improve and promote quality of service to coach customers.

2 Key words: Transportation Economic; Service Quality of Coach Customer; SERVPERF Model; Improved IPA Method; Separation between Coach terminal and Coach Operation; Service Quality Evaluation System INTRODUCTION Recent trends in highway passenger transportation include increasing separation between the roles of coach and terminal operators in China, and a corresponding shift in the service objectives of coach terminals. While previously focused primarily on the needs of passengers, the service objectives of a coach terminal now include both passenger and coach company satisfaction. That is, as a separate legal entity with equal transaction status, coach companies are essentially the customer of the coach terminals. Though this relationship has the nature of a market in terms of independent operation and responsibility for profits and losses, it is also a form of mutually beneficial trading relationship in which both parties benefit from improvements in both coach and terminal services. By convention. the status of the two parties is independent and equal, and the transactions between them are based on the market mechanism of supply and demand. Terminals provide depot and service facilities to attract coach companies and obtain management and service fees, and coach companies select terminals according to the local of passenger market, costs, and expected profits. Therefore, the needs of coach companies, just as passengers, now determine the service objectives of coach terminals. In recent years, a great deal of research has been completed on the theories and methods for evaluating highway passenger service quality in China (Han 2014, Fu 2008, Lin 2010). However, little work has focused on service quality management in the context of the terminal/coach operator relationship, or treated the needs of coach operators as an independent service objective. Regional coach terminal monopolies are in general still strong for historical reasons, and as a result the options for coach companies is still fairly limited. That said, with the deepening reform of the highway passenger transport industry and the corresponding development of coach terminal market, competition between terminals for coach operators will be increasingly stiff. Additionally, coach transport in general is facing increased competition from high speed rail, airlines, cruise ships and other transport modes. Thus, enhancing service consciousness and attracting quality coach operator clientele is crucial for terminals to carve out their place in an increasingly complex passenger transport market. To address this need, this paper considers the needs of coach companies as the objective of service quality research for coach terminals in the hope that the resulting tools can be used to positively influence the future of the passenger transportation industry.

3 LITERATURE REVIEW Quality of service is the set of features and characteristics of formulary and potential demand that a service is able to meet. It refers to the degree of demand that the service recipient will be satisfied with. This the demander s subjective perception compares with its prior expectation (Gronroos C. 1990). In past 30 years, a great deal of progress has been made in service quality management research. Sasser et al. (1978), Juran (1974), Gronroos (1984), a. Parasuranman (1985) Wirtz and Bateson (1995), Sambandam and Lord (1995), have produced a number of works. Most notably, A. Parasuranman, Vala-rie a. Zeithaml and Leonard L. Berry (PZB) suggest that service quality depends on a customer s expectations based on prior of purchasing experience, which influences perceived quality of process and perceived quality of results. This work introduced the five dimensions for evaluating service quality in 1988, namely tangibles, reliability, responsiveness, assurance and empathy. In addition, a questionnaire was developed including 22 points of evaluation reflecting service quality according to the five dimensions. The evaluation framework based on this questionnaire is known as the service quality measurement method or SERVQUAL (A. Parausuraman, V. A. Zeithamal,and L. Berry, 1998), summarized in figure 1: SERVQUAL Tangibles Reliability Responsiveness Assurance Empathy Up-to-date equipment Respond within timeframe Inform customers when service will occur Employees are trustworthy Firms provide individualized attention Visually appealing facilities Well-dressed employees Reassuring when problems arise Dependable Prompt service from employees Employees willing to help Customers feel safe in dealings Employees are polite Employees provide individualized attention Employees understand customer needs Facilities consistent with the industry Service delivered at times promised Accurate records Employees respond to requests Employees have support to do their job well Employees have the best interests of the customer in mind Operate at convenient hours FIGURE 1 SERVQUAL MODLE Cronin & Taylor proposed the Performance Perceived Service Quality Evaluation Method (SERVPRRF method) which based on SERVRQUAL in In the SERVPRRF method, a customer s perceptions and expectations are not compared as in SERVRQUAL. Instead, the customer s perceived service quality alone is employed as the primary metric for evaluation. (J.J.Cronin, S.A.Taylor, 1994). The SERVPERF model still relies on the 5 dimensions, 22 indicators of the scale introduced in A. Parausuraman, V. A. Zeithamal,and L. Berry, This method is relative simple and easy to execute in practice, and is more

4 technically rigorous. As a result, it is well known and extensively applied in practice. Because of this, The SERVPERF model is employed here to develop a service quality evaluation system for coach operators as customer coach terminals. Compared with the general passenger service quality requirements which includes safety, economy, punctuality, convenience and comfort (Wu, 1997), coach customers have different requirements and corresponding service quality metrics. In terms of safety, safe parking, a standardized management system, and adequate facilities for orderly passenger boarding/alighting are required. In financial terms, low management fees and high passenger volumes are required. For scheduling, reasonable and reliable scheduling and low rate of departure delay are required. In terms of convenience, adequate and reasonable procedure guidelines for drivers, simple workflow procedures, and convenient lodging facilities for drivers and conductors are required. In terms of comfort, a clean and sanitary facility, courteous staff and pleasant environment are required. It is clear, then, that there are many differences in the factors influencing service quality between passenger and coach customers. Thus, it is necessary for terminals to develop service quality standards with an evaluation system with metrics and methods specifically oriented toward coach customers in order to meet the challenges of a rapidly evolving passenger transport market. SERVICE QUALITY EVALUATION SYSTEM As noted, the SERVPERF framework includes 5 dimension and 22 factors for evaluation. This paper adapts these service quality evaluation factors to develop an evaluation framework for coach customers. After reviewing and considering a great deal of relevant literature, as well as the experts interview comments on cooperative terminals, 18 evaluation factors are selected from among the 28 provided by the Delphi Expert Evaluation. The resulting service quality evaluation system for coach customer is shown in Table 1: Table 1 the service quality evaluation system of coach customer for coach terminals Main Factor Subsidiary Factor Coach Service Quality Evaluation System Tangibles Reliability Responsiveness Assurance 1. Regular routes in and out of coach terminal 2. Workflow of coach terminal 3. Parking space and management 4.Environment and sanitary condition 5. Balance account timely 6. Vehicle detection 7. Fees reasonable 8. Vehicle dispatching procedure 9. Refueling and maintenance service 10. Information service for driver and conductor 11.Launch Marking activities initiative 12.Board and lodging for driver and conductor 13. Employees attitude towards customers

5 14. Employees service awareness 15. Employees service ability Empathy 16. Vehicle dispatching impartially 17. Guiding service for passenger to get on and off bus 18. Luggage service With these evaluation factors, perceived service quality for coach customers can be measured directly using SERVPERF model. However, it should be noticed that the performance and importance of each evaluating factor is different for each customer. Thus, instead of reporting the satisfaction based strictly on the evaluating factors, the importance of every evaluating factor also should be evaluated for each customer as this is closely linked with the overall satisfaction. This paper expands on the coach terminal Service Quality Evaluation System to provide a framework for considering both perceived quality of service and relative importance of each evaluation metric. COACH TERMINAL SERVICE QUALITY EVALUATION METHOD There are many service quality evaluation methods, including AHP, DELPHI, Entropy-Weight, and others. Here, we apply the Importance-Performance Analysis(IPA)method as the evaluation framework for coach terminal service quality. This method, developed by Marilla & James (1977), asks respondents to rate each performance metric based on two standards, importance and performance. The evaluation indexes are distributed into an IPA location Map, in which importance is the x-axis and performance is the y-axis. The map is divided into 4 quadrants corresponding to different priority levels (see Figure x). This makes it is easy to identify service problems and improvement priorities. ( Martilla J A,James J C, 1977). The IPA methodology proceeds as follows: First, develop a set of evaluation metrics and scope of the assessment scores. Second, obtain the performance and importance score for each evaluation metric, and lay out the IP map according to the selected scale. Third, calculate the overall mean or median of the importance and performance scores, and with the point at which the two means cross in the IP map as the intersection of the four quadrant dividers, delineate the quadrants. Fourth, add performance metric response to the IP map according to its importance and performance score. Finally, explains the every observation variables which distributed in the four quadrants. (Shown as figure 2) In the figure 2, A response that falls in the I quadrant indicates both high performance and importance, meaning that services related to this metric should be continued as is.

6 Performance Rating Ⅱ Quadrant (Possible Overkill) Ⅲ Quadrant (Low Priority) ⅠQuadrant (Keep Up the Good Work) Ⅳ Quadrant (Concentrate Here) Importance Rating Figure 2 Importance-Performance Analysis (IPA) Responses that fall in the II quadrant are of low importance but achieved a high performance, indicating that less emphasis can be placed on services related to these metrics. Responses falling in the III are of low importance and low performance, so they should be classified as low priority for improvement. Finally, responses falling in the IV quadrant are of high importance to the respondant but achieved low performance, so this is the key area to focus improement efforts. IMPROVED IPA Although the application of IPA is widespread, its limitations are obvious. First of all, the IPA method assumes that the responses for importance and satisfaction are independent of each other, when in fact they are known to be linearly correlated with overall perception of the respondents. In practice due to the subjective evaluation of the respondents, it is difficult to insure that importance and satisfaction responses are independence of each other. Second, the IPA method requires respondents to provide two answers to the same question, increasing the burden on the respondents and directly contributing to a decline in response quality. To avoid the aforementioned limitations in measuring importance in IPA, Matzler et al. proposed improved IPA method. This method can accurately estimate the contribution of each factor to overall satisfaction, that is, "Derived Importance". The principle behind of this method is that the factor which has the most influence on overall satisfaction is also the most important factor. This method explicitly avoids above noted issues that may arise from requiring respondents to subjectively evaluating the importance of each factor ( Matzler et al. 2003). The improved IPA adopts a Partial-Least-Squares (PLS) regression model to compute out the derived Importance of every service factor by statistical data. More specifically, it uses PLS to analysis the data of

7 questionnaire and to calculate the contribution of each service factor toward overall satisfaction. A case study is developed in the following sections, in which the service quality evaluation system and improved IPA are applied to evaluate coach terminal/coach operator service quality. CASE STUDY BACKGROUND CJY Highway Passenger Center is a large state-owned enterprise in a southwestern city of China with total assets valued at over six billion yuan, more than 2000 employees, 7 seven first-class coach terminals, and more than 420 regular routes. However, under increasing competition from high-speed rail, airlines, and other passenger transportation companies, the profits of CJY are in sharp decline. In order to enhance its competitiveness in the passenger market, CJY has adjusted its business strategy, made service management improvements, and made other operational changes to insure their long-term survivability. Enhancing the service quality for coach customers is one of the service management reforms that necessitated by the separation of coach operation and terminal roles. This paper applies the SERVPERF model to develop a service evaluation system, and employs the improved IPA to evaluate the quality of coach customer service offered by the CJY passenger center. QUESTIONNAIRE DESIGN AND DATA COLLECTION Based on the coach customer service quality evaluation methodology described previously, here we develop a coach customer service quality evaluation table for CJY Passenger Center. To meet the improved IPA model requirements, one evaluation factor is added in first line of the table: the overall evaluation on service quality of the coach terminal. Other factors listed table 1 in no particular order, with a total of 19 factors (shown as attachment table 1). The Likert five points method is selected for respondents to evaluate service quality. The five degrees of satisfaction, in order from high to low, are "very satisfied", "satisfied" "general", "not satisfied, and " very dissatisfied ". The score is marked numerically from 5 to 1. 4 affiliated coach terminals affiliated with the CJY Passenger Center participated in the market survey between July 20 and July 25 in questionnaires were distributed to managers, drivers and conductors of coach companies, among which 126 were returned and 102 were deemed valid for further analysis. Cronbach's α coefficient was used to estimate the reliability of the table. A Cronbach's alpha of was calculated for the table, so the reliability is deemed acceptable. The Factor Analysis Method was used to

8 conduct a validity test. This method is based on principal component analysis and variance orthogonal rotation analysis, retain the characteristic value that more than 1, factor that its load more than 0.5, received a total of 7 major factors, the cumulative variance is %. The test value of KMO was 0.674, more than 0.5, and the Bartlett Spherical degree test approximate chi square is , the p=0.000 was less than 0.05, which indicated that the structure validity of the questionnaire was good. All analysis was completed using the SPSS statistical analysis software (Wang, 2013). SERVICE QUALITY EVALUATION OF COACH CUSTOMER The processed result of the questionnaire responses are shown in Table 2. NO. Table 2 the statistical result of service quality satisfaction Evaluation Index Performance Score mean rank Extend Importance calculated value rank X 1 Regular routes in and out of coach terminal X 2 Environment and sanitary condition X 3 Vehicle detection X 4 Workflow of coach terminal X 5 Vehicle dispatching procedure X 6 Vehicle dispatching impartially X 7 Launch Marking activities initiative X 8 Parking space and management X 9 Refueling and maintenance service X 10 Board and lodging for driver and conductor X 11 Information service for driver and conductor X 12 Fees reasonable X 13 Balance account timely X 14 Luggage service X 15 Guiding service for passenger to get on and off bus X 16 Employees service awareness X 17 Employees attitude towards customers X 18 Employees service ability

9 Mean As shown in table 2, the average service quality scores the coach customer marked for CJY Passenger Center is 3.71, which is between general and satisfactory. This indicates that the overall service quality of CJY in urgent need of improvement. In comparing the satisfaction levels of all factors, the top 5 highest ranked factors in terms of customer satisfaction are the vehicle dispatching procedure(x5), impartiality in Vehicle dispatching (X6), timely account balancing (X13), coach terminal workflow (X4) and Employee service awareness(x16). On the other hand, the 5 factors with the lowest satisfaction rating are lodging facilities for drivers and conductors (X10), marking efforts (X7), vehicle detection(x3), refueling and maintenance services (X9) and parking availability and management (X8). Next, consider the factor importance ranking based on the extended importance calculation shown in table 2. The top 5 of most important factors are reasonableness of fees (X12), impartiality in Vehicle dispatching (x6), environment and sanitation (x2), information services for drivers and conductors (X11) and timely account balancing (x13). The 5 least important factors are vehicle detection(x3), coach terminal workflow (x4), Employee service capability (x18), lodging facilities for drivers and conductors (X10) and vehicle dispatching procedures (x5). It is clear from the previous discussion that importance and performance are often not similarly ranks. This means that the factor with the highest level of satisfaction may not be most important factor according to the customer s needs. For example, the factor describing vehicle dispatching procedures (X5) is ranked first in satisfaction, and fifth from last in importance. Thus, in the next step, we address prioritization of service improvements in the CJY Passenger Center using the IPA method. LOCATION ANALYSIS BY IMPROVED IPA MAP According to the results shown in table 2, the mean performance evaluation score is 3.71, and the mean extended importance score is As previously described, a coordinate system is set up in which the horizontal axis intersects the vertical axis at ordinate (0.065, 3.71). This is the Improved IPA location map which has 4 quadrants. Every factor is placed into the map based on its mean performance mean score and extended importance value as shown in figure 3.

10 Figure 3 IPA location map The factors located in the first quadrant received both high service quality and importance scores. These factors represent good performance on key service quality factors, which should direct CJY continue their current level of effort on the services related to these factors. These factors include Impartiality in vehicle dispatching (x6), timely account balancing (x13), Environment and Sanitation (x2), Information Services for Driver and Conductor (X11) and Regular Routes In and Out of coach terminals (x1). The factors located in the second quadrant received high scores in satisfaction but low scores in importance. Services related to these factors, though currently achieving high customer satisfaction, are not of great importance for coach customers. This indicates that some resources and efforts might be more productive elsewhere in the company. The factors in this region include Vehicle Dispatching Procedures (x5), Coach terminal workflow (x4), Employee Service capability (x18), Employee Service Awareness (x16) and Employee Attitudes towards Customers (x17). The factors located in the third quadrant received low scores on both of importance and satisfaction. Thus, while the services related to these factors are in need of improvement, they should be assigned a relatively low priority. These factors include Vehicle Detection (X3), Lodging facilities for Drivers and Conductors (X10), Marking Activities (X7), Refueling and Maintenance Services (X9), Employee Service Awareness (15). The factors located in the fourth quadrant are key factors which received high importance scores but low performance scores in terms of customer s evaluation. These factors have the greatest influence on overall satisfaction of coach customers, and should be the primary focus for coach terminal service improvements. These key factors include Luggage Service (X14) and Parking availability and Management (X8). In summary, the improved IPA method is used to effectively identify and analyze service improvement priorities for coach customers. The results are clear and interpretable, and can be readily applied by the CYJ Passenger Center to enhance its service quality and competitive advantage in the highway passenger

11 transport market. In fact, promising results have already been achieved in CJY terminals by applying the result of this research. CONCLUSIONS Focusing on coach customer service quality will contribute to improvements in the competitiveness and survivability of coach terminals. The Coach Customer Service Evaluation system provides a framework for evaluating customer satisfaction based on 5 overarching service quality metrics factors and 18 subsidiary factors. When combined with the improved IPA Method, provides an innovative method for evaluating service improvement priorities to enhance the competitiveness and survivability of coach terminals. Using this evaluation system, the manager of a coach terminal can not only determine the overall satisfaction of his coach customers, but also prioritize service improvements and resource allocation. The subsidiary factors of the system should be further modified and improved in future works. REFERRENCES 1. Han Yanan, Zhou Wei. Four dimensions model for passenger transport hub operation service quality evaluation [J].Journal of Chang an University: Natural Science Edition. 2014, 34(03): Fu Qiaofeng. Comprehensive evaluation on service quality of highway passenger transportation[j]. Journal of Chang an University: Natural Science Edition. 2008, 28(04): Lin Xiaoyan. Study on passenger transportation enterprises service quality evaluation model-based on customer satisfaction theory [J]. Journal of Technology Economics (29) Gronroos C. Service management and marketing [M].Lexington Massachu setts: Lexington Bo -oks,1990: Wu Xiaoqin, Service quality characteristics and service quality system [J]. Journal of World Standardiztion & Quality Management A. Parausuraman, V. A. Zeithamal,and L. Berry, SERVQUAL:A Multiple-Item Scale for Measuring ConsumerPerceptions of Service Quality [J].Journal of Retailing, Vol. 64, No.1, Spring,1988, J.J.Cronin, S.A.Taylor. SERVPERF versus SERVQUAL: Reconciling performance-based and perce -ption-minus- Exceptions Measurement of Service Quality [J]. Journal of Marketing, Martilla J A,James J C.Importance-performance analysis[j].journal of Marketing,1977,41(1): Matzler, K., Sauerwein, E., & Heischmidt, K. A. Importance performance analysis revisited: The role of the factor structure of customer satisfaction. The Service Industries Journal, 2003, 23(2): Wang Zhouwei. The Application and Statistic Analysis Method of SPSS [M].Shanghai: Jiaotong University Press, 2013.

12 ATTACHED TABLE 1 COACH CUSTOMER SERVICE QUALITY EVALUATION TABLE No. Marking Items Like Expect Neutral Accept Dislike 1 the overall evaluation on service quality of the coach terminal Regular routes in and out of coach terminal Environment and sanitary condition Vehicle detection Workflow of coach terminal Vehicle dispatching procedure Vehicle dispatching impartially Launch Marking activities initiative Parking space and management Refueling and maintenance service Board and lodging for driver and conductor Information service for driver and conductor Fees reasonable Balance account timely Luggage service Guiding service for passenger to get on and off bus Employees service awareness Employees attitude towards customers Employees service ability