Customer Value in Budget Airline Industry

Topics: Airline, Research, Qualitative research Pages: 10 (2934 words) Published: March 21, 2011
1. Introduction
Nowadays, in the context of very severe competition among companies, a good product is no longer a strong enough source of companies’ competitive advantage, though it is still necessary to remain competitive of companies in the market. Many companies have focused on reengineering or flattening their organization to reduce cost and increase profit but the overall results did not meet their expectation of profit. Therefore, more and more companies are accomplishing strategies to provide more preeminent customer value which will help the companies consolidate their competitive advantage and achieve long-term profitability. Companies have responded to customers’ expectation by increasing the value offered to them through improving products quality, reducing prices and intensifying customer services (Bill Dodds, 2003). In the transportation industry, there are more and more budget airlines and they are fiercely competing. Budget airlines dropped their prices to attract customers and price can be considered as a competitive advantage for budget airlines to normal airline. However, in fact, many budget airlines invest to low cost for competition rather than meet the needs of their customers. Consequently, the quality of services of budget airlines is very poor and does not meet customer’s expectations. For example, Jet star airline and Tiger airline are the budget airlines in Vietnam; they often cancel or delay their flights and often meet some problems with their airplane engine that make their customers unsatisfied and losing of trust. Therefore, in order to optimize customer loyalty and achieve long-term profitability, the budget airlines have to pay more attention to create and develop customer value.  Based on the above issue and the need for further research of this issue, thus, my research question of this problem is formulated as follows: “What factors affect customer value creating in budget airlines industry?” The purpose of this assignment is using the qualitative research method to build interview questions to collect opinion from managers of budget airlines about requisite factors such service quality and human resource training to create customer value. Based on the results from those interviews, the budget airline can consolidate and improve those factors to create added value for their service, thus, create customer value and win customer loyalty as well as achieve long term profitability.

2. Research approach
3.1 Comparison of quantitative research and qualitative research Quantitative research: Quantitative research is directed toward design quantitative observation of variables, methods of measurement, analysis and interpretation of the relationship between variables in quantitative relations. The explanation of phenomenon is based on collection analysis of previous data (Alan Bryman, et. al, 2003). Qualitative research: “Qualitative research is designed to tell the researcher how (process) and why (meaning) things happen as they do” (Donald R. Cooper, 2008). In qualitative research, researchers often use individual depth interviews, participant observation, projective techniques and document analysis etc. to explore the issues needed to do research. The difference between quantitative research and qualitative research are presented in the table 1as following:

Table 1: Comparison of quantitative research and qualitative research Quantitative research| Qualitative research|
This research method focuses on describing, explaining and predicting.| This research method focuses on deep understanding and interpreting.| The concepts are formed as separate variables.| The concepts are formed as subject, composition and classification| Data in the form of number is collected from the precise measurement.| Data in the form of worlds and images gathered from documents and observation.| Research is derived from the standard or previous assumptions. | Research is...

References: | | Cabin crew | Ariffin (2010)Ahmad Azmi M.Ariffin et al., (2010) |
| | Food & Beverage service | Rigas Doganis (2002)Ariffin (2010)Erica Sheward (2005) |
| | In-flight entertainment | Werner Delfmann et al., (2005) |
| A2.Ground service quality | Check-in process | Rigas Doganis (2002)Ariffin (2010) |
| | Luggage handling | Ahmad Azmi M.Ariffin et al., (2010) |
| | Reservation | Rigas Doganis (2002)Ariffin (2010) |
| | Complaint handling | Rigas Doganis (2002)Ariffin (2010) |
| | Customer service training | Werner Delfmann et al., 2005) |
| B2.External training program | Training with aircraft manufacturers | William Carl Howell & Susan B
| | Ground staffs to other airlines | Graham Edkins & Peter Pfister (2003) |
Source: The table is created for this assignment
Ahmad Azmi M.Ariffin, Aliah Hanim M.Salleh, Norzalita A.Aziz & Astuti Agustina Asbudin (2010), “Service Quality and Satisfaction for Low Cost Carriers”, International Review of Business Research Papers, 6(1): pp.47-56.
Alan Bryman & Emma Bell (2003), Business Research Methods, New York: Oxford University Press.
Alessandro Cento (2008), the Airline Industry: Challenges in the 21st Century, German: Physica-Verlag Heidelberg.
Arch G
Bill Dodds (2003), Managing Customer Value: Essentials of Product Quality, Customer Service, Price Decisions, the United State of America: University Press of America.
Donald R. Cooper & Pamela S.Schindler (2008), Business Research Methods, New York: McGraw-Hill Education.
Erica Sheward (2005), Aviation Food Safety, Blackwell Publishing.
Graham Edkins & Peter Pfister (2003), Innovation and Consolidation in aviation, Burlington: Ashgate Publishing.
Gursoy, D., Chen, M. & Kim, H.J. (2005), “The US airlines relative positioning based on attributes of service quality”, Tourism Management, 26(1): pp.57-67.
Pat Hanlon (2007), Global Airlines: Competition in a Transnational Industry, The United States of America: Butterworth-Heinemann
Rigas Doganis (2002), Flying off course: the economics of international airlines, London: HarperCollins Academic.
Stephen Holloway (2008), Straight and Level: Practical Airline Economics, England: Ashgate Publishing–pp.9 -25.
Uma Sekaran (2003), Research Methods for Business, a Skill Building Approach, the United States: John Wiley & Sons, Inc.
Werner Delfmann, Herbert Baum, Stefan Auerbach & Sascha Albers (2005), Strategic management in the Aviation Industry, England: Ashgate Publish.
Willy McCourt & Derek Eldridge (2003), Global Human Resource Management: Managing People in Developing and Transitional Countries, the United Kingdom: Edward Elgar Publishing
William Carl Howell & Susan B
W. Lawrence Neuman (2000), Social Research Methods: Qualitative and Quantitative Approaches, Allyn And Bacon.
Zsolt Kelemen (2003), “Latest Information technology Development in the Airline industry”, Peridica Polytechnica Ser.Transp.Eng, 31(1-2): pp. 45-52.
Understanding the importance of customer value | Customer value report (2008) Robert R.Harmon (1997) | How do you know about customer value? |
| | In your view, what factors play important role in building customer value? |
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