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CUSTOMER PERCEIVED VALUE AND CUSTOMERS SATISFACTION IN TRAVEL AGENCY IN
NIGERIA
CHAPTER ONE
1.0 Introduction
It is believed that the goal of every organization is to meet
the needs and the requirements of its stakeholders. Meeting the needs and the
requirements of the stakeholders will not only ensure the survival of the
organization but also flourish it. Customer is presumed to be one of the most
important stakeholders in any organization because without him, organizations
are not likely to succeed. Travel trade in Nigeria contributes 6.8% of
Nigeria’s GDP, INR 2,178.1 Billion to the country’s GDP, USD 18.13 Billion in
foreign exchange earnings, 3.6 % growth is foreign tourists from May 2015, 39.5
million jobs, 7.7% of its total employment. Total travel agents in Nigeria:
20,000 (approx) doing monthly business.
1.1 Background of
the Study
The success of airlines depends majorly on the ability to
identify customers’ wants and needs, and factor it in the quality service that
would meet customers’ satisfaction. Air transport is the transportation of
passengers and cargo by aircraft and helicopters.
Thus, it is a transport mode for the movement or carriage by
air of persons or goods using airplanes and helicopters (Don- Beliner 1996).
The airline industry is a major player in the world economy as it contributes
significantly to the leisure/tourism and is a key element of international
business (Tiernan, Rhodes & Waguespack, 2008), with global airline revenues
exceeding $12.9 billion as at 2006 (IATA, 2007).
The aviation industry in Nigeria is a major player in the
economy owing to its substantial contribution to ease of movement within the
country especially in the face infrastructural decay (poor and insecure road
transport system) in the recent years. Nigerian Airways was established in
October, 1958 as a joint venture between the Nigerian government’s lines and
the British Overseas Airways Corporation (BOAC) while the Nigerian Airways took
over the operation of domestic flights from the disbanded West African Airways
Corporation (WAAC) which had been operating commercial aircraft within the
country since 1946 (Filani, 1983). In 1963, the Nigerian Federal Government
bought out the other shareholders and the Nigerian government became the
sole-owner of Nigeria Airways. The airline has monopoly for providing domestic
air services in Nigeria and also the national flag carrier for international
services. According to Filani (1983), in 1976, within Nigeria several charter
companies joined the Nigeria Airways to operate additional flight in small
aircraft from Lagos to the main economic centres in the Southern and Northern
parts of the country. The Nigerian government realizing the role of air
transport in the Nation’s development made significant attempts to develop the
country’s aviation industry. The most massive was the 1975-1980 airport development
programme in which the Murtala Mohammed airport complex was about complex was
about N240 million (Filani, 1983). Six other airports in Kano, Ilorin, Kaduna,
Sokoto, Port Harcourt and Maiduguri were developed to accommodate large
aircrafts. Apart from these airports development programme the Federal
government also intensifies manpower development in the aviation industry. But
due to the efficiency of the sector, the aviation industry was liberalized to
allow private owners to compete favourable in the business.
Port Harcourt International Airport (IATA: PHC, ICAO: DNPO)
is an international airport located in Omagwa, a suburb of Port Harcourt city
in Rivers State, Nigeria. The airport consists of a single terminal with
separate facilities for international and domestic flights. In 2009, the
airport served 1,081,587 passengers, making it the third busiest airport in
Nigeria.
This lead increase of number of operators and perceived
frequent flyers in the industry which does the perceived services value and
quality often reflect the customers’ level of satisfaction with the airline and
show intention to repatronize the service (FMA, 2012).
According to Nigerian Airport Authority (FMA, 2012), from
visiting family and friends to shipping high value products, 8.3 million
passengers and 181,000 tonnes of freight travelled to, from and within Nigeria;
domestically, more than 66,800 flights make over 75 million seats available to
passengers, destined to 18 airports as at years 2011 and 2012.
Since success of airlines in Nigeria will be its ability to
identify customers’ wants and needs, gather them up and then come up with
quality service that would meet customers’ satisfaction it important that
researches on assessing the determinant of choice of airline should be
continuous as this will assist all the stakeholders survive in their strive to
supress competition by attempting to bridge the existing gap between customers’
service expectations and the quality of service offered by them to fly within
Nigeria.
In Nigeria, the value of consumer benefit varies because of
how often they fly, and the value a passenger attach to additional flight will
in general fall. This is consonance to the law of diminishing returns which
states that affirming that to continue after a certain level of performance has
been reached, will result in a decline in effectiveness (Case, Karl & Fair
Ray (1999).
1.2 Statement of
the Study
Since, the success of airlines depends majorly on customers’
whereby, without them an organization seize to exist, it is therefore,
importance to identify there wants and needs, and factor it in the quality of
service to be rendered to the customers. A major problem to the aviation
industry in general (Nigeria) is the cost of flight, the route that are
available and the durability of the aircraft in terms of the life span of the
aircraft in use.
Hence, this study examines if the Nigerian Passengers that
fly within Nigeria get the value of the expected fare paid for the flight,
fully satisfied with the services delivered or the air fee exceeds the
perceived value gotten from the flight and with the less value or satisfaction
gotten through air transport.
1. The quality of service the customers
perceived most time are not the quality of service the customer gets at the
end.
2. Quality of
service do not match to the cost of service.
1.3 Objectives of
the Study
The objective of the study is therefore to:
1) Investigate the
service delivery of Rivers state Aviation industry if its meets the customers
satisfactory and value
2) To identify
customer’s perceived value and needs, his satisfactory level.
3) Examine how the
passengers’ socio-economic status affects choice of airline.
4) Analyze the
impact of perceived value on customer satisfaction in Nigeria Aviation
Industry.
5) Analyze the
impact of service quality on customer satisfaction in Nigeria Aviation
Industry.
1.4 Research
Question(s)
This research addresses the following questions related to
services provided by airline travel agents in Rivers state:
a) Which service
quality dimensions are the best predictors of overall service quality in terms
of satisfaction in the service sector?
b) Do customers
perceive value influences their satisfaction level on the choice of airline
1.5 Research
Hypothesis
Consequently the proposed hypothesis of the study is;
H01: There is no significant relationship between service
quality and satisfaction of air travelers Nigeria.
H1: There is significant relationship between service quality
and satisfaction of air travelers Nigeria.
H02: There is no significant relationship between perceived
value and air travelers’ satisfaction in Nigerian.
H2: There is no significant relationship between perceived
value and air travelers’ satisfaction in Nigeria.
H03: Socio economic attribute of airline travelers do not
influence the choice of airline.
H3: Socio economic attribute of airline travelers does influence
the choice of airline.
1.6 Conceptual Framework
Source: researcher (2016)
1.7 Significance of
the Study
Quality is increasingly becoming a strategic issue in the
Western world (Bergman and Klefsjo, 2003). One of the main reasons for the
successes of Japanese industry in the 1970s and 1980s was that the Japanese
realized early that quality concept should emanate from the requirements and
expectations of the customers (Bergman and Klefsjo, 2003). This perception
played a vital role in bringing about success (Bergman and Klefsjo, 2003).
Today service quality has become more vital than ever before because service
providers have realized that they have to provide customer-perceived value, if
they want to stay in business. Therefore, this research work will help the
management of the Rivers state airline to manage the aviation industries to
meet up with the customer’s perceived value and satisfaction. If the management
adhere to this research guideline, then they will excel in the business
environment.
1.8 Scope of the
Study
This research work will be concentrated in the area of
business satisfactory using customer’s perceived value and needs, also this
study will be based on airline industries using the Rivers state aviation for
the study as a case study or reference point.
1.9 Limitation of
the Study
This project was constrained by the following factors:
(a) Financial
Constraints
Bearing in mind the economic state of the nation, it was
found difficult in making both ends meet, because of the exorbitant nature of
things nowadays in travelling for the collection of data needed for the
project.
(b) Time
Constraints
Looking at the interval between the resumption and vacation
of the final semester for the project to be completed, the time given seemed to
be short for the collection of required information for better work to be done.
(c)
Non-Availability of Material
During this project, it was noticed that the required
materials needed for the project are not documented. Those that were documented
lacked storage facilities where they can be reached.
1.10 Definition of
Term
Aviation is the practical aspect or art of aeronautics, being
the design, development, production, operation and use of aircraft, especially
heavier than air aircraft.
An airline is a company that provides air transport services
for traveling passengers and freight.
Customer satisfaction is a marketing term that measures how
products or services supplied by a company meet or surpass a customer's
expectation.
Consumer's perceivedthe worth that a product or service has
in the mind of the consumer. The consumer's perceived value of a good or
service affects the price that he or she is willing to pay for it. For the most
part, consumers are unaware of the true cost of production for the products
they buy.
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