Analysis of Customer Satisfaction at Beach Resort

Analysis of Customer Satisfaction at Beach Resort Chapter I: Introduction 1.1 Background In recent times, customers satisfaction is the main concern for every hotel and resort. Customers are now more valued and every effort is being made to keep them loyal to the resort and make them permanent visitors. The hotel industry believes that higher level of customer satisfaction may result in higher levels of repurchase. Repeat purchasing is essential to a continued stream of profitability through achieving higher levels of customer satisfaction (Oliver, 1997). The customers satisfaction can be defined as â€Å"the fulfillment response† which they feel towards given service. It has been a judgment that a product or service feature, or the product or service itself, provides (or is providing) a pleasurable level of consumption-related fulfillment, including levels of underfulfilment or overfulfilment† (Oliver, 1996, p. 14). The concept of consumer satisfaction occupies a central position in marketing thought and practice. Conceptually, satisfaction is an outcome of purchase and use results from the buyers comparison of the rewards and costs of the purchase in relation to the anticipated consequences. Operationally, satisfaction is similar to attitude in that it can be assessed as the sum of the satisfactions with the various attributes of the product or service. With due consideration of this marketing approach, every effort is being made to provide the customers with better services in order to keep them loyal and make them a repeat visitor. The customer behaviour is considered as the ultimate success scale within the industry. The hotel industry is also among those sectors which have been trying to attract customers as long term visits. For this purpose, the hotel industry consistently implies different approaches to assess the customers satisfaction level in order to introduce new methods to attract them and make them their repeat visitors. The Samui Island has many attractions for the tourists and visitors from all around the world and a great number of visitors come to the island in order to enjoy tranquil and naturally beautiful beaches, hospitality of the local population and the unique services like spa offered by the hotel industry. There are a lot of visiting places on the island like the Big Buddah, Namuang Waterfall, Hin Ta Hin Ya, Sawadee Shrine, Hin Lad Waterfall, Scuba Diving, Dinning and restaurant and Samui nightlife etc. These attractions have attracted visitors tremendously and have contributed significantly to enhance the business opportunity for the local hotels and resorts. Nora Beach is one of the most famous resorts of the Samui Island. It is a luxurious retreat in Thailand, situated in a strategic place of Koh Samaui, the 3rd largest island. The resort offers its customers a break from the hassles of the real world. The resort enjoys a spectacular hillside setting, overlooking a seclude bay just north of the world famous Chaweng Beach. It is located a few minutes from the airport and a short drive from the city centre (Nora Beach and Spa, 2007). Nora Beach Resort and Spa has strived to offer its customers excellent service over the years. 1.2 Purpose of Study The purpose of this study is to analyse the level of customers satisfaction at Nora Beach Resort, Koh Samui, Thailand. This analysis would be made by assessing customers opinion through a well designed questionnaire. Considering the results of this analysis, the study will try to suggest the strategy for achieving a desirable customers satisfaction in the light of new marketing approaches. 1.1 Objectives of Study The objectives of the study are: To understand the level of customers satisfaction by conducting a survey. To analyse the characteristics of the customers satisfaction which contribute their loyalty for the particular resort or hotel. This will be done by analysing purpose of visit, gender, age, education and other characteristics. To suggest a strategy to retain customer loyalty by adopting an effective marketing strategy. 1.4 Study Structure In order to analyse customers satisfaction with the service at Nora Beach Resort and Spa at Koh Samui, this study will review the current literature in the context of customers satisfaction and the services provided by the hotel industry. It will also examine the customers satisfaction in relation with the services provided at Nora Beach Resort and Spa through the primary data. For this purpose, in the literature review chapter, different theories relating to service, customers satisfaction and different categories of hotels will be reviewed. The methodology chapter will present philosophy and methods of research undertaken for this study. It will also describe the sampling, data collection tools and the method for data analysis. The fourth chapter will present the results of the research in relation with demographic analysis of the respondents and their satisfaction level at the Hotel. In the fifth chapter, conclusions will be made resulting from the data analysis. This researcher w ill offer recommendation to the industry with due consideration to the results of the primary data and the review of the literature. Chapter II: Literature Review 2.1 Introduction 2.2 Service The service is defined as a â€Å"prototype for service, covering the need of the customer and the design of the service†. Edvardsson and Olsson (1996, p. 149). Goldstein et al. (2002) suggest that the service concept integrates the â€Å"how† and â€Å"what† of service design while keeping both the customers needs and strategic intent of the firm in mind. In other words, the service concept gives a detailed description of what the customer needs and how the organization will deliver the service. The study of customers satisfaction in the field of general marketing has evolved into important parameters that need to be identified and understood in order to satisfy the needs and wants of customers. Since the success of a business has been linked to providing high levels of customers satisfaction, a substantial amount of effort has been focused on identifying how consumers perceive service quality in various settings. Gronroos (1982) has defined service quality as â€Å"the outcome of an evaluation process where the consumer compares his expectations with the service he perceived he has received.† Hence we can say that perceived service is measured against expected service. Service quality has been seen as the result of comparing a customers expectations prior to receiving the service with the customers experiences with the service. Wyckoff (1984) defined the concept of service quality from the companys perspective. Service quality is the degree of excellence for meeting the customers requirements, and control over the variability in achieving that excellence. 2.2.1 Service Theories According to Parasuraman, Zeithaml, and Berry (1988) the study of service in the field of general marketing has evolved into important parameters that need to be identified and understood in order to satisfy the needs and wants of customers. With growing competition and emerging of hotel industry as a high profiting business, much preference is made to deliver a quality service to the customers. The researchers have defined service quality as the result of comparing the expectation of service quality and the perception of feelings. That is, the service quality not only includes the evaluation of the service performances, but also includes the process of service (Parasuraman, Zeithaml, and Berry, 1985, 1988). According to Sherden (1988), service quality is defined as a relationship between a customer and the particular employee with whom the customer is dealing. Although the actual level of service quality is developed in the employee-customer relationship, management must ensure that customers experiences are in line with their expectations. Lovelock (1991) has defined the characteristics of service quality. According to him, service quality is that; which is delivered in a performance, in which the customer is involved in production in which other customers are often similarly involved in production (e.g., a theater) in which quality control can only be performed during delivery in which service cannot be inventoried, deliver is â€Å"realtime†, and; distribution channels are nonexistent or compressed. Examining service quality and its relationship with relevant constructs not only requires recognition of essential dimensions of service quality, but also identification of dimensions that are most meaningful to the customers in measuring the overall satisfaction. Therefore, having a better understanding of service quality is associated with considering various dimensions of service quality. Service quality dimensions or elements are those attributes that contribute to the creation of consumer expectations and perceptions of service quality. Service Quality called â€Å"SERVQUAL† is an instrument for measuring the gap between the services.† Therefore, what consumers think should be provided and what they think actually has been provided. Parasuraman, Zeithaml, and Berry (1985, 1988) initially offered ten attributes, which they regard as essential to the quality of all services. These ten dimensions were tangibles, reliability, responsiveness, communication, credibility, security, competence, courtesy, understanding/knowing the customer, and access. These ten dimensions and their descriptions served as the basic structure of the service quality domain from which items were derived for the SERVQUAL scale (Table 1). 2.2.2 Elements of Service Researchers agree that it is hard to measure customer satisfaction and the service quality as every customer perceives service from his or her own preferences (Gavin Eccles and Philip Durand, 1997). To overcome this problem of defining the service level, hotels have addressed it through star ratings, where guests can gain a perception of the quality on offer through the number of stars attached to he hotel. However, as service quality depends more on customers perception, there are different criteria used by different customer groups to evaluate service. The purpose of The SERVQUAL scale is to measure levels of service quality. In this technique, it is assumed that the levels of service quality experienced by customers are critically determined by the gap between general expectations of the service and the customers perceptions of what they actually receive from a specific service provider. The customers can evaluate the service quality from the following five factors: tangibles; reliability; responsiveness; assurance; empathy. The benefit of the SERVQUAL scale is that the management can assess and monitor the service quality and design better strategies and policies to improve it. Furthermore, understanding the customers satisfaction level and perception of service quality may yield important information influencing the design and specification of this and other, related, services provided by the organization. Finally, it helps the hotel industry in better developing future service improvements (Gavin and Durand, 1997). 2.3 Impact of Service on Customer Satisfaction The improved service quality provided to the customers enhances their loyalty to the service provider. Thus, attention has been paid to the concept of customer satisfaction as a corporate goal among academics and business practitioners (Rust Oliver, 1995). Satisfaction is a major outcome of marketing processes that culminate in purchase, and satisfaction is also thought to contribute to post-purchasing phenomena such as word-of-mouth communication, repurchase intention, and brand loyalty. Gronholdt, Martensen, and Kristensen (2000) administered a study on sixty companies and found that customer satisfaction would have significant impacts on customer loyalty. Bowen and Chen (2001) focused on the hotel industry to examine the relationship between customer satisfaction and customer loyalty. The results showed a slight increase in customer satisfaction would highly improve customer loyalty. Hence, customer satisfaction was inferred to have great impacts on customer loyalty. Moreover, Tam (2004) established an integrated framework of service quality, customer satisfaction, and perceived value, suggesting that customer satisfaction and perceived value have significant influences on customers future purchase behaviors. Anderson and Sullivan (1993) believed that customer satisfaction positively influenced repurchase intentions. Repurchase intentions is considered a possible outcome of customer loyalty. Jones and Sasser (1995) stated that customer loyalty is â€Å"a feeling of attachment to or affection for a companys people, products, or services.† Customer loyalty is often referred to as a purchase behavior, unlike customer satisfaction, which is an attitude. Repurchase behavior is a form of loyalty. Customer loyalty, a key mediating variable in explaining customer retention is concerned with the likelihood of a customer returning, making business referrals, providing strong word-of-mouth, as well as providing references and publicity (Bowen and Showemaker, 1998). Although most research on loyalty has focused on frequently purchased package goods (brand loyalty), the loyalty concept is also important for industrial goods (vendor loyalty), services (service loyalty), and retail establishment (store loyalty) Prior research has shown that ones emotions have an influence on behavior, and that one responds to an event in certain ways to maintain positive emotions (i.e. happiness) and to avoid negative emotions (i.e. depression) (Strauss and Neuhaus, 1997). Oliver, Rust, and Varki (1997) found that positive emotion led to higher levels of customer satisfaction and increased repurchase intentions. On the other hand, Andreasen (1999) found that initial negative emotion caused by a service failure results in customer exit behavior. Dick and Basu (1994) posited that true loyalty only exists when repeat patronage coexists with a high relative positive attitude. In addition to attitude, it has been argued that loyalty may also be based on cognition (Lee and Zeiss, 1980; Oliver, 1980). 2.2.4 Quality in Customer Service The quality of service provided to the customers matters a lot more not only for the customers but it is a matter of great concern for the service provider as well. Common dimensions of satisfaction with a service include service quality, product quality, price, and location. The theory suggest that the â€Å"people factor† (i.e., service quality), in terms of tangibility, reliability, responsiveness, assurance, and empathy, may be the most salient in determining overall satisfaction and repeated purchasing in service industries. Parasuraman, Zeithaml, and Berry (1988) conceptualized perceived service quality as a long-run overall evaluation about a service, whereas satisfaction was a transaction-specific evaluation. Based on these conceptualizations, they posited that incidents of satisfaction over time result in perceptions of service quality. Other researchers supported the argument that customer satisfaction leads to service quality. For example, Bitner (1990) developed a model of service encounter evaluation and empirically supported the effect of satisfaction on service quality. Bolton and Drew (1991b) also proposed that satisfaction leads to service quality. Cronin and Taylor (1992) reported that in their structural analysis for the causal relations among satisfaction, overall service quality, and purchase intention, the coefficients of path for service quality, satisfaction, and purchase intention appeared to be all significant while the coefficients of path for satisfaction, service quality, purchase intention were insignificant. Spreng and MacKoy (1996) also studied the relationship between service quality and satisfaction based on their modified Olivers (1993) satisfaction/service quality model. Their modified model fitted the data well where service quality was hypothesized to influence satisfaction. In their study, the path coefficient between two constructs appeared to be significant (t = 9.4). Woodside, Frey, and Daly (1989) supported the causal relation of service quality and satisfaction with data collected in area of health care. Several researchers stated that overall service quality is determined only by the customers perception of a service, rather than the difference between the customers expectation and actual service performance. 2.3 Customer Satisfaction The service literature has been contributed to the confusion over the relationship between consumer satisfaction and service quality. The most important that service providers need to know are how their objectives meet or exceed the customers satisfaction with their performance. The importance of this issue has been led to several recent efforts to clarify the relationship between satisfaction and service quality. The SERVQUAL measurement tool suggests that a consumers perception of service quality involves the difference between his or her expectations about the performance of a general class of service providers and his or her assessment of the actual performance of a specific firm within that class. SERVQUAL confounds customer satisfaction and customer attitude. In contrast, the SERVPERF version of the original SERVQUAL scale only concerns performance. Common dimensions of satisfaction with a service include service quality, product quality, price, and location. The theory suggest that the â€Å"people factor† (i.e., service quality), in terms of tangibility, reliability, responsiveness, assurance, and empathy, may be the most salient in determining overall satisfaction and repeated purchasing in service industries. Parasuraman, Zeithaml, and Berry (1988) conceptualized perceived service quality as a long-run overall evaluation about a service, whereas satisfaction was a transaction-specific evaluation. Based on these conceptualizations, they posited that incidents of satisfaction over time result in perceptions of service quality. Other researchers supported the argument that customer satisfaction leads to service quality. For example, Bitner (1990) developed a model of service encounter evaluation and empirically supported the effect of satisfaction on service quality. Bolton and Drew (1991b) also proposed that satisfaction leads to service quality. Cronin and Taylor (1992) reported that in their structural analysis for the causal relations among satisfaction, overall service quality, and purchase intention, the coefficients of path for service quality, satisfaction, and purchase intention appeared to be all significant while the coefficients of path for satisfaction, service quality, purchase intention were insignificant. 2.3.1 Customer Satisfaction Theories The customer satisfaction theories stress that quality of service is more important than the goods provided. Customers get satisfied mainly because of the quality and it is a psychological effect on their choice when they choose a particular hotel or resort to visit and stay. That is why one of the fastest growing segments in marketing research is the study of customer satisfaction (Dutka, 1994). When customers get satisfied with a particular service, they become loyal for it and in this way, the business have more repeat visitors. Customers satisfaction is directly linked with his or her expectancy level. The perception of customers are always different and there is no hard and fast rule to determine what kind of service satisfy more. As the satisfaction expectancies consistently change, so, there are three stages which the customers pass through before rendering satisfaction. At the first level, expectations are simple and take the form of assumptions. In the next level the expecta tion level become complex and the customer has higher expectations. At the third level customers expectorations are even higher and he or she years for something which may attract him or her and have some delightful effects rather than the normal routine services. (Service Marketing, 2007). When a customer achieves this kind of highly attracting service, he becomes a loyal and repeat customer and remains loyal until the service quality begin deteriorating. 2.3.2 Functionalities of Customer Satisfaction The functionality of customer satisfaction in the business world is that how effectively the services/goods meet the customers expectations. Therefore we can see across marketing world that each businesses success story relies on â€Å"Customer Satisfaction†. Thus the customer satisfaction has become the key element of business strategy in todays market place (Buchanan, Gilles, 1990). Although the customer satisfaction varies from an individual to individual, however certain recommend standards can be opted in-order to mitigate positively the popular perception. The common tool to opt the level of customer satisfaction is survey or collection of primary data where customer is asked to evaluate the open ended and close ended statements in accordance with the customers own perception. Thence the performance of the service/goods becomes contingent of that certain level of Customer Satisfaction. 2.3.3 Customer vs. Employee Satisfaction Satisfaction can be seen from two different perspectives. Customers satisfaction implies that they should get satisfied with the quality of service they receive while the employees satisfaction means how satisfied they are in the workplace and how they are able to serve the customers with commitment. As the satisfaction on both sides is imperative the hotel industry has not only to ensure the satisfaction of its customers but also those of their employees because without satisfaction of employees there is no justification to expect commitment of employees. Employees satisfaction may be achieved through incentives and rewards, acknowledgment of their performance and motivating them for achievement of further goals. Similarly, customers satisfaction can be achieved through offering them unique and high standard services and fostering better public relations with them. 2.4 Hotel Categories Hotels can be categorised according to the services they provide, i.e., location, facilities and services offered and clientele served. Restaurants mostly provide the customers with eating stuff but do not offer accommodation. However, hotels mainly have accommodation facilities as well as provide the customers different menus for breakfast, lunch and dinner. Some hotels offer accommodation but does not have their own chef so customers have to have their meals outside. Furthermore, the services of hotels further differ according to their location. In Thailand, usually hotels have begun to offer spa and other health facilities besides providing them normal accommodation and meals facilities. 2.4.1 Types of Hotel Most of the hotels have their own star rating. But the interesting thing is that there is no unified system to determine the service quality of the hotels. Throughout Europe, rating of hotels is determined either by government or by the private organisation according to the service they provide (Martin, 2007). There are 1 to 5 star hotels across the globe and the cost of their services differ according to their rating. For example, a four star hotel is much costly than a 1 star hotel. Similarly, four star hotel is expected to have more facilities than a 1 star hotel. A four to five star hotel may have more services and amenities, including meeting space for conferences 2.5 Nora Beach Resort and Spa 2.5.1 Information of the Hotel The Nora Beach Resort is a luxurious retreat in Thailand, situated in a strategic place of Koh Samui, the 3rd largest island, which offers its customers a break from the hassles of the real world. The resort enjoys a spectacular hillside setting, overlooking a secluded bay just north of the world-famous Chaweng Beach. It is located a few minutes from the airport and a short drive from the city centre (Nora Beach Resort and Spa, 2007). The profound services of Nora Beach Resort and Spa are as follow: Bars and Restaurants. Recreation Anodas Spa Rooms The additional supportive services of the Resort are as follow: Travel and Tours Desk. Taxi/Limousine Service. Swimming pools Laundry and Dry Cleaning. Gymnasium/Fitness Room. Baby Sitting Facilities. 2.5.2 Type of Customers The type of customers visit Nora Beach Resort and Spa are holiday makers, however the professionals on travel also frequently visit the resort. According to a study by Thailand Tourism Statistics that 87% of tourists are holiday makers at Koh Samui Island; where the Nora Beach Resort is jewel of the attraction for the holiday makers at Koh Samui Islands. These categories of visitors consist of male, female and children with age diversity from 13 to 55 years on average. They prefer Nora Beach for the reason that major attractions of Island are nearby the resort. 2.5 Conclusion In this chapter, different theories of customers satisfaction have been evaluated and reviewed. Further, the importance of service quality on customers loyalty has been discussed. Besides, the review of literature from customers perspective, different categories of hotels and the system of rating has also been discussed. The review of literature shows that with the competition in hotel industry, customers perception and expectation of service has increased to a great extent and now the hotel industry has to enhance, improve and add up more services for the customers to make them loyal to the services. Chapter III: Methodology 3.1 Introduction This chapter presents details about the methodology adopted and elaborates the chosen research philosophy, approach and strategy used and the reasons for their selection. Further, this chapter describes the sample population and how the primary data was collected and processed. It also describes the secondary data collection for the literature review. This chapter further explains the data collection tool and highlights validity, authenticity and reliability of the data collected. 3.2 Research Framework Saunders et al. (2007) define an exploratory study as a valuable means of finding out what is happening; to seek new insights; to ask questions and to assess phenomena in a new light study. Further, they define interpretivism as a theory of knowledge that depicts the methods, validity and scope of the research. This theory advocates that it is necessary for the researcher to understand difference between humans as social actors (Saunders, Lewis Thornhil, 2007). ). Hence, the study was conducted in the interpretivism philosophy, because the aim of the researcher was to know the difference of human behavior in relation with satisfaction in the service quality provided by the Nora Beach Resort and Spa. The researcher aimed to know how customers get satisfied with the service provided by the Resort and how they perceive service quality. The research strategy utilized was case study. The case study strategy has considerable ability to generate answers to the question ‘why? as well as the ‘what? and ‘how? questions (Saunders et al., 2007). In addition, a case study strategy can be very worthwhile way of exploring existing theory or to challenge an existing theory (Saunders et al., 2007). The study also sought answers to what the customers satisfaction level and how customers can be attracted to revisit the Nora Beach Resort and Spa. 3.3 Sampling The population of this research were customers who stayed in Nora Beach Resort and Spa; a total of n= 113 customers completed the survey. The sampling technique needed for the case study was non- probability sampling which are purposive and convenience. 3.4 Data Collection tool The data collection tool for this study is a well designed questionnaire consisting of three parts as questionnaires are one of the most widely used data collection techniques in the survey strategy (Saunders et al. 2007). The first part is related to the customers satisfaction consisting 15 questions based on five likert scale ranging from very satisfied, satisfied, neutral, dissatisfied and very dissatisfied. The purpose of this part is to assess the perception of customers about the quality of the Resort in relation with menu variety, room service, cleanliness etc. The second part consists general type of questions like accessibility of the Resort and the reason to choose it. The third part of the questionnaire is demographic one assessing customers gender, age occupation and the purpose of their visit. In all, there were twenty two questions asked to analyze the customers assessment and expectations regarding the facilities and services as provided at Nora Beach Resort and Spa, T hailand. 3.4 Data Collection The research was based on positivism principles with deductive approach. The questionnaire developed was placed in the guest rooms, as well as in the lobby and was collected by Ms.Napaphon Rattanarak, a proctor who was trained according to the guidelines established. Permission was granted by the resort manager to conduct this study following highest ethical standards and principles. 3.6 Data Analysis As this study aims at providing recommendations on improving service quality of Nora Beach Resort and Spa, the dully filled and returned questionnaire was analysed using SPSS, the software having good analytical capabilities. The analysis of the questionnaire offers insight about the conception of customers with regard to their perception of service quality at Nora Beach Resort and Spa. The results of this analysis will be discussed in the preceding chapter. 3.7 Conclusion This chapter has highlighted the research philosophy, techniques and methods used for this study. The study has relied over Likert Technique because in-order to assess the level of customer satisfaction the best available method was to conduct survey. The respondents were visitors to the resort staying at the Nora Beach Resort and Spa. Although the responses of the customers may be biased as their opinion may be influenced by the service provided at that very moment, yet, this research provides a lot of interesting information regarding their perception of the service quality. Chapter IV: Results 4.1 Introduction In this chapter, the researcher will show the results of the data collected from the questionnaire which were gathered from the customers/visitors of Nora Beach Resort and Spa at Koh Samui. In this section, the researcher will present the demographic information from the respondents, and will also discuss the customers response towards the questions asked about the services provided. Further, the researcher will discuss the general information analysis of the customers as to how they found the resort, why did they choose to stay at the Nora Beach Resort and Spa and whether it was their first visit or they are a repeat visitors. 4.2 Demographics There were total 113 questionnaire placed in the guest room and the lobby of the resort which the customer staying at the resort had to fill up which, in return, were collected and returned to the researcher by Ms. Napaphon, a protector trained for the purpose. All the 113 questionnaires were duly filled up and retuned y the customers. Of these 113 respondents, 56 were male (49.56 per cent) and 57 female (50.44 per cent) 4.3 Level of Analysis of Customer Satisfaction at Beach Resort Analysis of Customer Satisfaction at Beach Resort Chapter I: Introduction 1.1 Background In recent times, customers satisfaction is the main concern for every hotel and resort. Customers are now more valued and every effort is being made to keep them loyal to the resort and make them permanent visitors. The hotel industry believes that higher level of customer satisfaction may result in higher levels of repurchase. Repeat purchasing is essential to a continued stream of profitability through achieving higher levels of customer satisfaction (Oliver, 1997). The customers satisfaction can be defined as â€Å"the fulfillment response† which they feel towards given service. It has been a judgment that a product or service feature, or the product or service itself, provides (or is providing) a pleasurable level of consumption-related fulfillment, including levels of underfulfilment or overfulfilment† (Oliver, 1996, p. 14). The concept of consumer satisfaction occupies a central position in marketing thought and practice. Conceptually, satisfaction is an outcome of purchase and use results from the buyers comparison of the rewards and costs of the purchase in relation to the anticipated consequences. Operationally, satisfaction is similar to attitude in that it can be assessed as the sum of the satisfactions with the various attributes of the product or service. With due consideration of this marketing approach, every effort is being made to provide the customers with better services in order to keep them loyal and make them a repeat visitor. The customer behaviour is considered as the ultimate success scale within the industry. The hotel industry is also among those sectors which have been trying to attract customers as long term visits. For this purpose, the hotel industry consistently implies different approaches to assess the customers satisfaction level in order to introduce new methods to attract them and make them their repeat visitors. The Samui Island has many attractions for the tourists and visitors from all around the world and a great number of visitors come to the island in order to enjoy tranquil and naturally beautiful beaches, hospitality of the local population and the unique services like spa offered by the hotel industry. There are a lot of visiting places on the island like the Big Buddah, Namuang Waterfall, Hin Ta Hin Ya, Sawadee Shrine, Hin Lad Waterfall, Scuba Diving, Dinning and restaurant and Samui nightlife etc. These attractions have attracted visitors tremendously and have contributed significantly to enhance the business opportunity for the local hotels and resorts. Nora Beach is one of the most famous resorts of the Samui Island. It is a luxurious retreat in Thailand, situated in a strategic place of Koh Samaui, the 3rd largest island. The resort offers its customers a break from the hassles of the real world. The resort enjoys a spectacular hillside setting, overlooking a seclude bay just north of the world famous Chaweng Beach. It is located a few minutes from the airport and a short drive from the city centre (Nora Beach and Spa, 2007). Nora Beach Resort and Spa has strived to offer its customers excellent service over the years. 1.2 Purpose of Study The purpose of this study is to analyse the level of customers satisfaction at Nora Beach Resort, Koh Samui, Thailand. This analysis would be made by assessing customers opinion through a well designed questionnaire. Considering the results of this analysis, the study will try to suggest the strategy for achieving a desirable customers satisfaction in the light of new marketing approaches. 1.1 Objectives of Study The objectives of the study are: To understand the level of customers satisfaction by conducting a survey. To analyse the characteristics of the customers satisfaction which contribute their loyalty for the particular resort or hotel. This will be done by analysing purpose of visit, gender, age, education and other characteristics. To suggest a strategy to retain customer loyalty by adopting an effective marketing strategy. 1.4 Study Structure In order to analyse customers satisfaction with the service at Nora Beach Resort and Spa at Koh Samui, this study will review the current literature in the context of customers satisfaction and the services provided by the hotel industry. It will also examine the customers satisfaction in relation with the services provided at Nora Beach Resort and Spa through the primary data. For this purpose, in the literature review chapter, different theories relating to service, customers satisfaction and different categories of hotels will be reviewed. The methodology chapter will present philosophy and methods of research undertaken for this study. It will also describe the sampling, data collection tools and the method for data analysis. The fourth chapter will present the results of the research in relation with demographic analysis of the respondents and their satisfaction level at the Hotel. In the fifth chapter, conclusions will be made resulting from the data analysis. This researcher w ill offer recommendation to the industry with due consideration to the results of the primary data and the review of the literature. Chapter II: Literature Review 2.1 Introduction 2.2 Service The service is defined as a â€Å"prototype for service, covering the need of the customer and the design of the service†. Edvardsson and Olsson (1996, p. 149). Goldstein et al. (2002) suggest that the service concept integrates the â€Å"how† and â€Å"what† of service design while keeping both the customers needs and strategic intent of the firm in mind. In other words, the service concept gives a detailed description of what the customer needs and how the organization will deliver the service. The study of customers satisfaction in the field of general marketing has evolved into important parameters that need to be identified and understood in order to satisfy the needs and wants of customers. Since the success of a business has been linked to providing high levels of customers satisfaction, a substantial amount of effort has been focused on identifying how consumers perceive service quality in various settings. Gronroos (1982) has defined service quality as â€Å"the outcome of an evaluation process where the consumer compares his expectations with the service he perceived he has received.† Hence we can say that perceived service is measured against expected service. Service quality has been seen as the result of comparing a customers expectations prior to receiving the service with the customers experiences with the service. Wyckoff (1984) defined the concept of service quality from the companys perspective. Service quality is the degree of excellence for meeting the customers requirements, and control over the variability in achieving that excellence. 2.2.1 Service Theories According to Parasuraman, Zeithaml, and Berry (1988) the study of service in the field of general marketing has evolved into important parameters that need to be identified and understood in order to satisfy the needs and wants of customers. With growing competition and emerging of hotel industry as a high profiting business, much preference is made to deliver a quality service to the customers. The researchers have defined service quality as the result of comparing the expectation of service quality and the perception of feelings. That is, the service quality not only includes the evaluation of the service performances, but also includes the process of service (Parasuraman, Zeithaml, and Berry, 1985, 1988). According to Sherden (1988), service quality is defined as a relationship between a customer and the particular employee with whom the customer is dealing. Although the actual level of service quality is developed in the employee-customer relationship, management must ensure that customers experiences are in line with their expectations. Lovelock (1991) has defined the characteristics of service quality. According to him, service quality is that; which is delivered in a performance, in which the customer is involved in production in which other customers are often similarly involved in production (e.g., a theater) in which quality control can only be performed during delivery in which service cannot be inventoried, deliver is â€Å"realtime†, and; distribution channels are nonexistent or compressed. Examining service quality and its relationship with relevant constructs not only requires recognition of essential dimensions of service quality, but also identification of dimensions that are most meaningful to the customers in measuring the overall satisfaction. Therefore, having a better understanding of service quality is associated with considering various dimensions of service quality. Service quality dimensions or elements are those attributes that contribute to the creation of consumer expectations and perceptions of service quality. Service Quality called â€Å"SERVQUAL† is an instrument for measuring the gap between the services.† Therefore, what consumers think should be provided and what they think actually has been provided. Parasuraman, Zeithaml, and Berry (1985, 1988) initially offered ten attributes, which they regard as essential to the quality of all services. These ten dimensions were tangibles, reliability, responsiveness, communication, credibility, security, competence, courtesy, understanding/knowing the customer, and access. These ten dimensions and their descriptions served as the basic structure of the service quality domain from which items were derived for the SERVQUAL scale (Table 1). 2.2.2 Elements of Service Researchers agree that it is hard to measure customer satisfaction and the service quality as every customer perceives service from his or her own preferences (Gavin Eccles and Philip Durand, 1997). To overcome this problem of defining the service level, hotels have addressed it through star ratings, where guests can gain a perception of the quality on offer through the number of stars attached to he hotel. However, as service quality depends more on customers perception, there are different criteria used by different customer groups to evaluate service. The purpose of The SERVQUAL scale is to measure levels of service quality. In this technique, it is assumed that the levels of service quality experienced by customers are critically determined by the gap between general expectations of the service and the customers perceptions of what they actually receive from a specific service provider. The customers can evaluate the service quality from the following five factors: tangibles; reliability; responsiveness; assurance; empathy. The benefit of the SERVQUAL scale is that the management can assess and monitor the service quality and design better strategies and policies to improve it. Furthermore, understanding the customers satisfaction level and perception of service quality may yield important information influencing the design and specification of this and other, related, services provided by the organization. Finally, it helps the hotel industry in better developing future service improvements (Gavin and Durand, 1997). 2.3 Impact of Service on Customer Satisfaction The improved service quality provided to the customers enhances their loyalty to the service provider. Thus, attention has been paid to the concept of customer satisfaction as a corporate goal among academics and business practitioners (Rust Oliver, 1995). Satisfaction is a major outcome of marketing processes that culminate in purchase, and satisfaction is also thought to contribute to post-purchasing phenomena such as word-of-mouth communication, repurchase intention, and brand loyalty. Gronholdt, Martensen, and Kristensen (2000) administered a study on sixty companies and found that customer satisfaction would have significant impacts on customer loyalty. Bowen and Chen (2001) focused on the hotel industry to examine the relationship between customer satisfaction and customer loyalty. The results showed a slight increase in customer satisfaction would highly improve customer loyalty. Hence, customer satisfaction was inferred to have great impacts on customer loyalty. Moreover, Tam (2004) established an integrated framework of service quality, customer satisfaction, and perceived value, suggesting that customer satisfaction and perceived value have significant influences on customers future purchase behaviors. Anderson and Sullivan (1993) believed that customer satisfaction positively influenced repurchase intentions. Repurchase intentions is considered a possible outcome of customer loyalty. Jones and Sasser (1995) stated that customer loyalty is â€Å"a feeling of attachment to or affection for a companys people, products, or services.† Customer loyalty is often referred to as a purchase behavior, unlike customer satisfaction, which is an attitude. Repurchase behavior is a form of loyalty. Customer loyalty, a key mediating variable in explaining customer retention is concerned with the likelihood of a customer returning, making business referrals, providing strong word-of-mouth, as well as providing references and publicity (Bowen and Showemaker, 1998). Although most research on loyalty has focused on frequently purchased package goods (brand loyalty), the loyalty concept is also important for industrial goods (vendor loyalty), services (service loyalty), and retail establishment (store loyalty) Prior research has shown that ones emotions have an influence on behavior, and that one responds to an event in certain ways to maintain positive emotions (i.e. happiness) and to avoid negative emotions (i.e. depression) (Strauss and Neuhaus, 1997). Oliver, Rust, and Varki (1997) found that positive emotion led to higher levels of customer satisfaction and increased repurchase intentions. On the other hand, Andreasen (1999) found that initial negative emotion caused by a service failure results in customer exit behavior. Dick and Basu (1994) posited that true loyalty only exists when repeat patronage coexists with a high relative positive attitude. In addition to attitude, it has been argued that loyalty may also be based on cognition (Lee and Zeiss, 1980; Oliver, 1980). 2.2.4 Quality in Customer Service The quality of service provided to the customers matters a lot more not only for the customers but it is a matter of great concern for the service provider as well. Common dimensions of satisfaction with a service include service quality, product quality, price, and location. The theory suggest that the â€Å"people factor† (i.e., service quality), in terms of tangibility, reliability, responsiveness, assurance, and empathy, may be the most salient in determining overall satisfaction and repeated purchasing in service industries. Parasuraman, Zeithaml, and Berry (1988) conceptualized perceived service quality as a long-run overall evaluation about a service, whereas satisfaction was a transaction-specific evaluation. Based on these conceptualizations, they posited that incidents of satisfaction over time result in perceptions of service quality. Other researchers supported the argument that customer satisfaction leads to service quality. For example, Bitner (1990) developed a model of service encounter evaluation and empirically supported the effect of satisfaction on service quality. Bolton and Drew (1991b) also proposed that satisfaction leads to service quality. Cronin and Taylor (1992) reported that in their structural analysis for the causal relations among satisfaction, overall service quality, and purchase intention, the coefficients of path for service quality, satisfaction, and purchase intention appeared to be all significant while the coefficients of path for satisfaction, service quality, purchase intention were insignificant. Spreng and MacKoy (1996) also studied the relationship between service quality and satisfaction based on their modified Olivers (1993) satisfaction/service quality model. Their modified model fitted the data well where service quality was hypothesized to influence satisfaction. In their study, the path coefficient between two constructs appeared to be significant (t = 9.4). Woodside, Frey, and Daly (1989) supported the causal relation of service quality and satisfaction with data collected in area of health care. Several researchers stated that overall service quality is determined only by the customers perception of a service, rather than the difference between the customers expectation and actual service performance. 2.3 Customer Satisfaction The service literature has been contributed to the confusion over the relationship between consumer satisfaction and service quality. The most important that service providers need to know are how their objectives meet or exceed the customers satisfaction with their performance. The importance of this issue has been led to several recent efforts to clarify the relationship between satisfaction and service quality. The SERVQUAL measurement tool suggests that a consumers perception of service quality involves the difference between his or her expectations about the performance of a general class of service providers and his or her assessment of the actual performance of a specific firm within that class. SERVQUAL confounds customer satisfaction and customer attitude. In contrast, the SERVPERF version of the original SERVQUAL scale only concerns performance. Common dimensions of satisfaction with a service include service quality, product quality, price, and location. The theory suggest that the â€Å"people factor† (i.e., service quality), in terms of tangibility, reliability, responsiveness, assurance, and empathy, may be the most salient in determining overall satisfaction and repeated purchasing in service industries. Parasuraman, Zeithaml, and Berry (1988) conceptualized perceived service quality as a long-run overall evaluation about a service, whereas satisfaction was a transaction-specific evaluation. Based on these conceptualizations, they posited that incidents of satisfaction over time result in perceptions of service quality. Other researchers supported the argument that customer satisfaction leads to service quality. For example, Bitner (1990) developed a model of service encounter evaluation and empirically supported the effect of satisfaction on service quality. Bolton and Drew (1991b) also proposed that satisfaction leads to service quality. Cronin and Taylor (1992) reported that in their structural analysis for the causal relations among satisfaction, overall service quality, and purchase intention, the coefficients of path for service quality, satisfaction, and purchase intention appeared to be all significant while the coefficients of path for satisfaction, service quality, purchase intention were insignificant. 2.3.1 Customer Satisfaction Theories The customer satisfaction theories stress that quality of service is more important than the goods provided. Customers get satisfied mainly because of the quality and it is a psychological effect on their choice when they choose a particular hotel or resort to visit and stay. That is why one of the fastest growing segments in marketing research is the study of customer satisfaction (Dutka, 1994). When customers get satisfied with a particular service, they become loyal for it and in this way, the business have more repeat visitors. Customers satisfaction is directly linked with his or her expectancy level. The perception of customers are always different and there is no hard and fast rule to determine what kind of service satisfy more. As the satisfaction expectancies consistently change, so, there are three stages which the customers pass through before rendering satisfaction. At the first level, expectations are simple and take the form of assumptions. In the next level the expecta tion level become complex and the customer has higher expectations. At the third level customers expectorations are even higher and he or she years for something which may attract him or her and have some delightful effects rather than the normal routine services. (Service Marketing, 2007). When a customer achieves this kind of highly attracting service, he becomes a loyal and repeat customer and remains loyal until the service quality begin deteriorating. 2.3.2 Functionalities of Customer Satisfaction The functionality of customer satisfaction in the business world is that how effectively the services/goods meet the customers expectations. Therefore we can see across marketing world that each businesses success story relies on â€Å"Customer Satisfaction†. Thus the customer satisfaction has become the key element of business strategy in todays market place (Buchanan, Gilles, 1990). Although the customer satisfaction varies from an individual to individual, however certain recommend standards can be opted in-order to mitigate positively the popular perception. The common tool to opt the level of customer satisfaction is survey or collection of primary data where customer is asked to evaluate the open ended and close ended statements in accordance with the customers own perception. Thence the performance of the service/goods becomes contingent of that certain level of Customer Satisfaction. 2.3.3 Customer vs. Employee Satisfaction Satisfaction can be seen from two different perspectives. Customers satisfaction implies that they should get satisfied with the quality of service they receive while the employees satisfaction means how satisfied they are in the workplace and how they are able to serve the customers with commitment. As the satisfaction on both sides is imperative the hotel industry has not only to ensure the satisfaction of its customers but also those of their employees because without satisfaction of employees there is no justification to expect commitment of employees. Employees satisfaction may be achieved through incentives and rewards, acknowledgment of their performance and motivating them for achievement of further goals. Similarly, customers satisfaction can be achieved through offering them unique and high standard services and fostering better public relations with them. 2.4 Hotel Categories Hotels can be categorised according to the services they provide, i.e., location, facilities and services offered and clientele served. Restaurants mostly provide the customers with eating stuff but do not offer accommodation. However, hotels mainly have accommodation facilities as well as provide the customers different menus for breakfast, lunch and dinner. Some hotels offer accommodation but does not have their own chef so customers have to have their meals outside. Furthermore, the services of hotels further differ according to their location. In Thailand, usually hotels have begun to offer spa and other health facilities besides providing them normal accommodation and meals facilities. 2.4.1 Types of Hotel Most of the hotels have their own star rating. But the interesting thing is that there is no unified system to determine the service quality of the hotels. Throughout Europe, rating of hotels is determined either by government or by the private organisation according to the service they provide (Martin, 2007). There are 1 to 5 star hotels across the globe and the cost of their services differ according to their rating. For example, a four star hotel is much costly than a 1 star hotel. Similarly, four star hotel is expected to have more facilities than a 1 star hotel. A four to five star hotel may have more services and amenities, including meeting space for conferences 2.5 Nora Beach Resort and Spa 2.5.1 Information of the Hotel The Nora Beach Resort is a luxurious retreat in Thailand, situated in a strategic place of Koh Samui, the 3rd largest island, which offers its customers a break from the hassles of the real world. The resort enjoys a spectacular hillside setting, overlooking a secluded bay just north of the world-famous Chaweng Beach. It is located a few minutes from the airport and a short drive from the city centre (Nora Beach Resort and Spa, 2007). The profound services of Nora Beach Resort and Spa are as follow: Bars and Restaurants. Recreation Anodas Spa Rooms The additional supportive services of the Resort are as follow: Travel and Tours Desk. Taxi/Limousine Service. Swimming pools Laundry and Dry Cleaning. Gymnasium/Fitness Room. Baby Sitting Facilities. 2.5.2 Type of Customers The type of customers visit Nora Beach Resort and Spa are holiday makers, however the professionals on travel also frequently visit the resort. According to a study by Thailand Tourism Statistics that 87% of tourists are holiday makers at Koh Samui Island; where the Nora Beach Resort is jewel of the attraction for the holiday makers at Koh Samui Islands. These categories of visitors consist of male, female and children with age diversity from 13 to 55 years on average. They prefer Nora Beach for the reason that major attractions of Island are nearby the resort. 2.5 Conclusion In this chapter, different theories of customers satisfaction have been evaluated and reviewed. Further, the importance of service quality on customers loyalty has been discussed. Besides, the review of literature from customers perspective, different categories of hotels and the system of rating has also been discussed. The review of literature shows that with the competition in hotel industry, customers perception and expectation of service has increased to a great extent and now the hotel industry has to enhance, improve and add up more services for the customers to make them loyal to the services. Chapter III: Methodology 3.1 Introduction This chapter presents details about the methodology adopted and elaborates the chosen research philosophy, approach and strategy used and the reasons for their selection. Further, this chapter describes the sample population and how the primary data was collected and processed. It also describes the secondary data collection for the literature review. This chapter further explains the data collection tool and highlights validity, authenticity and reliability of the data collected. 3.2 Research Framework Saunders et al. (2007) define an exploratory study as a valuable means of finding out what is happening; to seek new insights; to ask questions and to assess phenomena in a new light study. Further, they define interpretivism as a theory of knowledge that depicts the methods, validity and scope of the research. This theory advocates that it is necessary for the researcher to understand difference between humans as social actors (Saunders, Lewis Thornhil, 2007). ). Hence, the study was conducted in the interpretivism philosophy, because the aim of the researcher was to know the difference of human behavior in relation with satisfaction in the service quality provided by the Nora Beach Resort and Spa. The researcher aimed to know how customers get satisfied with the service provided by the Resort and how they perceive service quality. The research strategy utilized was case study. The case study strategy has considerable ability to generate answers to the question ‘why? as well as the ‘what? and ‘how? questions (Saunders et al., 2007). In addition, a case study strategy can be very worthwhile way of exploring existing theory or to challenge an existing theory (Saunders et al., 2007). The study also sought answers to what the customers satisfaction level and how customers can be attracted to revisit the Nora Beach Resort and Spa. 3.3 Sampling The population of this research were customers who stayed in Nora Beach Resort and Spa; a total of n= 113 customers completed the survey. The sampling technique needed for the case study was non- probability sampling which are purposive and convenience. 3.4 Data Collection tool The data collection tool for this study is a well designed questionnaire consisting of three parts as questionnaires are one of the most widely used data collection techniques in the survey strategy (Saunders et al. 2007). The first part is related to the customers satisfaction consisting 15 questions based on five likert scale ranging from very satisfied, satisfied, neutral, dissatisfied and very dissatisfied. The purpose of this part is to assess the perception of customers about the quality of the Resort in relation with menu variety, room service, cleanliness etc. The second part consists general type of questions like accessibility of the Resort and the reason to choose it. The third part of the questionnaire is demographic one assessing customers gender, age occupation and the purpose of their visit. In all, there were twenty two questions asked to analyze the customers assessment and expectations regarding the facilities and services as provided at Nora Beach Resort and Spa, T hailand. 3.4 Data Collection The research was based on positivism principles with deductive approach. The questionnaire developed was placed in the guest rooms, as well as in the lobby and was collected by Ms.Napaphon Rattanarak, a proctor who was trained according to the guidelines established. Permission was granted by the resort manager to conduct this study following highest ethical standards and principles. 3.6 Data Analysis As this study aims at providing recommendations on improving service quality of Nora Beach Resort and Spa, the dully filled and returned questionnaire was analysed using SPSS, the software having good analytical capabilities. The analysis of the questionnaire offers insight about the conception of customers with regard to their perception of service quality at Nora Beach Resort and Spa. The results of this analysis will be discussed in the preceding chapter. 3.7 Conclusion This chapter has highlighted the research philosophy, techniques and methods used for this study. The study has relied over Likert Technique because in-order to assess the level of customer satisfaction the best available method was to conduct survey. The respondents were visitors to the resort staying at the Nora Beach Resort and Spa. Although the responses of the customers may be biased as their opinion may be influenced by the service provided at that very moment, yet, this research provides a lot of interesting information regarding their perception of the service quality. Chapter IV: Results 4.1 Introduction In this chapter, the researcher will show the results of the data collected from the questionnaire which were gathered from the customers/visitors of Nora Beach Resort and Spa at Koh Samui. In this section, the researcher will present the demographic information from the respondents, and will also discuss the customers response towards the questions asked about the services provided. Further, the researcher will discuss the general information analysis of the customers as to how they found the resort, why did they choose to stay at the Nora Beach Resort and Spa and whether it was their first visit or they are a repeat visitors. 4.2 Demographics There were total 113 questionnaire placed in the guest room and the lobby of the resort which the customer staying at the resort had to fill up which, in return, were collected and returned to the researcher by Ms. Napaphon, a protector trained for the purpose. All the 113 questionnaires were duly filled up and retuned y the customers. Of these 113 respondents, 56 were male (49.56 per cent) and 57 female (50.44 per cent) 4.3 Level of