NEW TOPIC ADOPTION AND VARIOUS TECH CHARGES AND CUSTOMER

PREFERENCE IN HOSPITAL

NEED FOR THE STUDY:

Many policies of various organizations are aimed at keeping the consumer happy and

satisfied. It is very important for each and every organization to keep its consumers satisfied in

order to maintain its competitiveness in the market.

Not only does this help the organization to maintain the size of its share in the market, it

might even help it to increase the size of its share. It might also be instrumental in increasing the

overall market size. This helps in increasing the overall profitability of the organization.

It also helps the long-term survival prospects of the organization. Consumers when

viewed on the macro level exhibit similar traits. However when we take a closer look and come

down to the micro level, we find that the consumers vary as compared to one another on one

aspect or the other based on a variety of attributes (Kotler, 2003).

In the present business scenario of cutthroat competition, customer satisfaction has

become the prime concern of each and every kind of industry. Companies are increasingly

becoming customer focused. Companies can win customers and surge ahead of competitors by

meeting and satisfying the needs of the customers. World over businesses have realized that

marketing is not the only factor in attracting and retaining customers.

Other major factors responsible for the same are satisfaction through service quality and

value. Even the best marketing companies in the world fail to sell products and services that fail

to satisfy the customers’ needs. So customer satisfaction is the keyword in today’s fiercely

competitive business environment.

REVIEW OF LITERATURE:

Many studies have been conducted on the customer satisfaction. An attempt has been

made to present in brief, a review of literature on customer satisfaction in general as well as on

the customer satisfaction from hospital services.

Priscilla et al (1983) proposed a cognitive model to assess the dynamic aspect of consumer

satisfaction/ dissatisfaction in consecutive purchase behavior. They found that satisfaction have a

significant role in mediating intentions and actual behavior for five product classes that were

analyzed in the context of a three- stage longitudinal field study. They found that repurchases of

a given brand is affected by lagged intention whereas switching behavior is more sensitive to

dissatisfaction with brand consumption.

David and Wilton(1988) have extended consumer satisfaction literature by theoretically and

empirically examining the effect of perceived performance using a model first proposed by

Churchill and Surprenant, investigating how attractive conceptualizations of comparison

standards and disconfirmation capture the satisfaction formation process and exploring possible

multiple comparison processes in satisfaction formation. They suggest that perceived

performance exerts direct significant influence on satisfaction in addition to those influences

from expected performance and subjective disconfirmation.

Saha (1988) made an attempt to investigate the interrelationships between job-satisfaction, life

satisfaction, life satisfaction-over-time and health. The relationship among these four variables

and biographical variables were also examined. The study was conducted over the nurses in

Nigeria. The data was collected from the full time employees only because statements about job

satisfaction and other variables are different when supplied by retirees, part-time nurses.

Bolton and Drew (1991) proposed a model of how customers with prior experiences and

expectations assessed service levels, overall service quality and service value. They applied the

model to residential customers of local telephone services. Their study explored how customers

integrate their perceptions of a service to form an overall evaluation of that service. They

developed a multistage model of determinants of perceived service quality and service value.

The model described how customers expectations, perceptions of current performance and

disconfirmation experiences affected their satisfaction or dissatisfaction with a service, which in

turn affected their assessment of service quality and value.

Boulding et al (1993) stated that the service quality relates to the retention of customers at

aggregate level. The author has offered a conceptual model of the impact of service quality on

particular behavior that signal whether customers remain with of defect from a company. The

results of the study show strong evidence of their being influenced by service quality. The

findings also reveal difference in the nature of the service quality.

Aurora and Malhotra (1997) had done a comparative analysis of the satisfaction level of

customer of public and private sector banks, in order to help the bank management to formulate

marketing strategies to lure customers towards them and hence increase customer base.

Grewal et al had expanded and integrated prior price perceived value models within the context

of price comparison advertising. More specifically, the conceptual model explicates the effects of

advertised selling and reference prices on buyers’ internet reference prices, perceptions of

quality, acquisition value, transaction value, and purchase and search intentions. Two

experimental studies test the conceptual model. The results across these two studies, both

individually and combined, support the hypothesis that buyers’ internal reference prices are

influenced by both advertised selling and reference price as well as buyers’ perception of product

quality. The authors also find that effect of advertised selling price on buyers’ acquisition value

was mediated by their perceptions of transaction value. In addition, effects of perceived

transaction value on buyers, behavioral intentions were mediated by their acquisition value

perceptions.

Voss (1998) had examined the rule of price, performance and expectations to determine

satisfaction in service exchange. When price and performance are consistent, expectations have

an assimilation effect on performance and satisfaction judgments; when price and performance

are inconsistent, expectations have no effect on performance and satisfaction judgments. To

examine these issues authors develop a contingency model that they estimate using data from a

multimedia experimental design. The results generally support contingency framework and

provide empirical support for normative guidelines that call for creating realistic performance

expectations and offering money-back service guarantees.

Garbarino and Johnson (1999) analyze that the relationships of satisfaction, trust and

commitment to component satisfaction attitudes and future intentions for the customers of a New

York off-Broadway repertory theater company. For the relational customers ( individual ticket

buyers and occasional subscribers), overall satisfaction is the primary mediating construct

between the component attitudes and future intentions and for the high relational customers

(consistent subscribers), trust and commitment, rather than satisfaction, are the mediators

between component attitudes and future intentions.

Sharma and Chahal (1999) had done a study of patient satisfaction in outdoor services of private

health care facilities. They had done a survey to understand the extent of patient satisfaction with

diagnostic services. They have constructed a special instrument for measuring patient

satisfaction. The instrument captures the behaviour of doctors and medical assistants, quality of

administration, and atmospherics. The role of graphic characters like gender, occupation,

education, and income is also considered. Based on their findings, they also suggested strategic

actions for meeting the needs of the Customer of private health care sector more effectively. In

their study provided suggestions like becoming more friendly and understanding to the problems

of Customer, maintaining cleanliness in the units, both internally and externally, providing

regular report regarding the Customer’ progress without waiting for them to demand, conducting

surveys to know about the attitude of the Customer with regard to the employees and adopting

patient-oriented policies and procedures.

Simester et al (2000) have studied that multinational firm uses sophisticated, state-of-the-art

methods to design and implement customer satisfaction improvement programs in the United

States and Spain. Their experiments reveals a complex and surprising picture that highlights

implementation issues, a construct of residual satisfaction not captured by customer needs and

the managerial need for combining nonequivalent controls and nonequivalent dependent

variables.

Ofir and Simonson (2001) in their study found that customer evaluations of quality and

satisfaction are critical inputs in development of marketing strategies. Given the increasingly

common practice of asking such evaluations, buyers of products and services often know in

advance that they subsequently will be asked to provide their evaluations. In a series of field and

laboratory studies, the authors demonstrate that expecting to evaluate leads to less favorable

quality and satisfaction evaluations and reduces customer’s willingness to purchase and

recommend the evaluated services. The negative bias of expected evaluations is observed when

actual quality is either low or high, and it persist even when buyers are told explicitly to consider

both the positive and negative aspects.

Dholakia and Morwitz (2002) have examined the scope and persistence of the effect of

measuring satisfaction on consumer behavior over time. In an experiment conducted in a

financial services setting, they found that measuring satisfaction changes one-time purchase

behavior, changes relational customer behaviors and results in effects that increase for months

afterward and persist even a year later. Their results raised questions concerning the design,

interpretation and ethics in the conduct of applied marketing research studies.

Sharma and Chahal (2003) stated that due to increased awareness among the people patient

satisfaction had become very important for the hospitals. The authors examined the factors

related to patient satisfaction in government outpatient services in India. They said that there are

four basic components which had impact on the patient satisfaction namely, behaviour of

doctors, behaviour of medical assistants, quality of atmosphere, and quality of administration.

They also provided strategic actions necessary for meeting the needs of the Customer of the

government health care sector in developing countries.

Folkes and Patrick (2003) in their study showed converging evidence of a postivity effect in

customers’ perceptions about service providers. When the customer has little experience with the

service, positive information about a single employee leads to perception that the firm’s other

service providers are positive to a greater extent than negative information leads to perception

that the firm’s other service providers are similarly negative. Four studies were conducted that

varied in the amount of information about the service provider, the firm, and the service. The

positivity effect was supported despite differences across studies in methods as well as measures.

Vernoer (2003) had investigated the different effects of customer relationship perceptions and

relationship marketing instruments on customer retention and customer share development over

time. Customer relationship perceptions are considered evaluations of relationship strength and a

supplier’s offerings, and customer share development is the change in customer share between

two periods. The results show that affective commitment and loyalty programs that provide

economic incentives positively affect both customer retention and customer share development,

whereas direct mailings influence customer share development. However, the effect of these

variables is rather small. The results also indicate that firms can use the same strategies to affect

customer satisfaction that can have impact on both customer retention and customer share

development.

Anderson et al (2004) developed a theoretical framework that specifies how customer

satisfaction affects future customer behaviour and, in turn, the level, timing, and risk of future

cash flows. Empirically, they find a positive association between customer satisfaction and

shareholder value. They also find significant variation across industries and firms.

Reinartz et al (2004) in their study of Customer Relationship Management Process had stated

that it is very important for maintaining healthy relations with the customers in order to provide

them satisfaction. In their study, they (1) conceptualize a construct of the CRM process and its

dimensions, (2) operationalize and validate the construct, and (3) empirically investigate the

organizational performance consequences of implementing the CRM processes. Their research

questions are addressed in two cross-sectional studies across four different industries and three

countries. The key outcome is a theoretically sound CRM process measure that outlines three

key stages: initiation, maintenance, and termination.

Homburg et al (2005) conducted two experimental studies (a lab experiment and a study

involving a real usage experience over time) which reveal the existence of a strong, positive

impact of customer satisfaction on willingness to pay and they provide support for a nonlinear,

functional structure based on disappointment theory. In addition, the second examines dynamic

aspects of the relationship and provides evidence for the stronger impact of cumulative

satisfaction rather than of transaction-specific satisfaction on willingness to pay.

Mithas et al (2005) evaluates the effect of customer relationship management (CRM) on

customer knowledge and customer satisfaction. They analyze archival data of a cross-section of

U.S firms which shows that the use of CRM applications is positively associated with improved

customer knowledge and improved customer satisfaction. They also found that gains in customer

knowledge are enhanced when firms share their customer related information with their supply

chain partners.

Gustafsson et al (2005) in their study of telecommunications services examine the effect

of customer satisfaction, affective commitment, and calculative commitment on retention and the

potential for situational conditions to moderate the satisfaction-retention relationship. Their

results support consistent effects of customer satisfaction, calculative commitment and prior-

churn on retention.

Gruca and Rego (2005) strengthen the chain of effects that link customer

satisfaction to shareholder value by establishing the link between satisfaction and two

characteristics of future cash flows that determine the value of the firm to shareholders: growth

and stability. By using the longitudinal American Customer Satisfaction index and

COMPUSTAT data and hierarchical Bayesian estimation they found that satisfaction creates

shareholder value by increasing future cash flow growth and reducing its variability. They also

test the stability of findings across several firm and industry characteristics and assess the

robustness of the results using multi-measure and multi-method estimation

Thompson (2005) in his study had shown that consumers often misjudge their health

risks owing to a number of well-documented cognitive biases. These studies assume that

consumers have trust in the expert systems that culturally define safe and risky behaviours.

Consequently, this research stream does not address choice situations where consumers have

reflexive doubts toward prevailing expert risk assessments and gravitate toward alternative

model of risk reductions. This study explores how dissident health risk perceptions are culturally

constructed in the natural childbirth community, internalized by consumers as a compelling

structure of feeling, and enacted through choices that intentionally run counter to orthodox

medical risk management norms.

OBJECTIVES:

The current study is focused on examining the various factors related to Customer Preference

with the following specific objectives:

1. To study the customer expectations from hospital services in Chennai.

2. To study the customer perception of hospital services.

3. To study the degree of satisfaction of customers from hospital services.

RESEARCH METHODOLOGY:

This study describes the research methodology of the study. It includes the Research Framework,

Sample design and selection, Collection of Data, Research vehicle and Methods for analysis of

data. It also points out the limitations of present study.

To study consumers’ expectations, perception and their satisfaction level it was required to

examine the following aspects

(i) Customer expectations from the behavior of the doctors,

(ii) Customer’ expectations from the behavior of the medical assistants,

(iii) Customer’ expectations from the quality of administration of hospitals,

(iv) Customer’ expectations from the services provided by the hospitals,

(v) Customer’ perceptions for the behavior of the doctors,

(vi) Customer’ perceptions for the behavior of the medical assistants,

(vii) Customer’ perceptions for the quality of administration of hospitals,

(viii) Customer’ perceptions for the services provided by the hospitals,

(ix) Customer’ satisfaction level for the behavior of the doctors,

(x) Customer’ satisfaction level for the behavior of the medical assistants,

(xi) Customer’ satisfaction level for the quality of administration of hospitals and

(xii) Customer’ satisfaction level for the services provided by the hospitals,

RESEARCH FRAMEWORK

The present study is based on explorative and descriptive research design with the

objective of measuring the satisfaction level of Customer’ of five major private hospitals in

Chennai. The study uses both primary and secondary information. As it is clear from the

objectives of the study, the study was divided into three parts i.e. Customer’ expectations,

perceptions from the hospital services and then measuring their satisfaction level from the

hospital services. For both the first and second objective of study i.e. the customers’ expectations

and their perceptions of hospital services, primary data was collected through a structured

questionnaire. Then to meet the third objective of the study proper statistical tools were used on

the information collected for the first two objectives of the study.

SAMPLE DESIGN AND SELECTION

Population and Sample:

In view of the fact that this was a one person survey to be completed within limited

resources the present study was restricted to only those hospitals which were located in Chennai.

The population of this study comprised of the indoor Customer only. Five major private hospitals

in Chennai were selected namely:

Apollo Medical College and Hospital

MGR Medical College and Hospital

SRM Medical College and Hospital

Miot Hospital

Balaji Hospital

Selection of Respondents

From these hospitals primary data was collected from the respondents. The respondents

were either the Customer themselves or their relatives. For sample selection, a multistage

sampling procedure was followed. At the first stage, sample units consisted of total number of

general wards and private wards in the hospital. 10% of the general wards and 10% private,

wards were selected randomly. Then from each selected general ward 3 to 5 Customer were

chosen and from each selected private ward one patient was chosen. The information was

collected through a pre-designed, structured questionnaire. A sample of 80 respondents selected

from these hospitals on the basis of their convenience for the first objective and the second

objective. To suggest solutions to the problems observed during the survey is done through

secondary data.

Table: Sampling Plan

SELECTION OF WARDS

HOSPITAL (A) TOTAL

GENERAL

WARDS

SELECTE

D

GENERAL

WARDS

(10% OF

A)

(B)TOTAL

PRIVATE

WARDS

SELECTED

PRIVATE

WARDS

(10% OF A)

APOLLO 6 1 71 7

MGR 5 1 46 5

SRM 17 2 98 10

Miot 26 3 68 7

Balaji 16 2 76 18

TOTAL 70 9 359 47

SELECTION OF RESPONDENTS:

HOSPITAL RESPONDENT

FROM GENERAL

WARD

(3 TO 5 FROM

EACH)

RESPONDENTS

FROM PRIVATE

WARD

(1 FROM EACH)

TOTAL

RESPONDENTS

APOLLO 1*5=5 7*1=7 12

MGR 1*5=5 5*1=5 10

SRM 2*5=10 10*1=10 20

Miot 2*5 + 1*3=13 7*1=7 20

Balaji 2*5=10 8*1=8 18

TOTAL 43 37 80

In this way data was collected from 80 respondents that comprise of the indoor Customer

themselves or their attendants.

DATA COLLECTION:

Before an attempt was made to collect the information from the sample, the desk research

was conducted to see the literature and other library material available on the subject. Various

studies were reviewed to have a through knowledge before considering how to collect the

information from the respondents. After having the background knowledge a structured

questionnaire was prepared to obtain answer pertinent to the objectives of the study. For the

purpose of the study, eighty indoor Customer were selected and interviewed from the five private

hospitals.

Secondary data was also collected from various books, journals, magazines etc.

ANALYSIS OF DATA:

The data / information contained in the questionnaire were first transferred to master

table which facilitated tabulation of data in desired form. The collected data was then grouped

into tables and analyzed using various statistical tools like mean scores. Other statistical tool

used includes T-test for measuring whether there is significant difference between the mean

scores of attributes i.e. between expectations and perceptions of a factor. Reaction of the

respondents towards the different factors given was studied using a structured, non-disguised and

well-defined questionnaire designed for the Customer or their attendants. The questionnaire

contained rating questions. Each factor was rated over a scale of 1 to 9 i.e. likert scale was used.

The respondents were asked to rate the factors according to what they expect and what they had

perceived from the hospital services.

Mean score was calculated for the questions asked on a 9-point scale. In case of 9-point scale

where the respondents were asked to indicate their degree of importance/unimportance for

expectations and degree of bad/good for the perceptions, scores were assigned from 1to 9.

Frequencies were multiplied with their respective weights and aggregate values found out. Mean

score was calculated using the formula:

Mean Score = (∑Wifn)/n

i = 1 to 9

n = 80

Where, Wi = Weight attached for degree of importance/unimportance and good/bad.

fn = Associated frequency

n = Number of respondents

T-test was used to see whether there is significant difference between the means of a factor for

the two data samples at 5% level of significance. T-test was used because the both the data

samples were collected from the same selected individuals. First the data was collected from a

patient for his expectations from the various factors taken for the study and then from same

patient data is collected for his perceptions for the hospital services. Similarly, the data was

collected from the other Customer. So, the data in two samples was dependent as data in one

sample was collected from the same individual as in other sample.

LIMITATIONS OF THE STUDY

Any study based on consumer survey through a pre-designed questionnaire suffers from

the basic limitation of the possibility of difference between what is recorded and what is the

truth, no matter how carefully the questionnaire has been designed and field investigation has

been conducted. This is because the consumers may not deliberately report their true preferences

and even if they want to do so, there are bound to be differences owing to problems in filters of

communication process. The error has been tried to be minimized by conducting interviews

personally yet there is no full proof way of obviating the possibility of error creeping in. So, the

study suffers from some limitations also. As such generalizing the results, the following

limitations of the study should be taken into the account.

As the study was to be completed in a short time, the time factor acted as a considerable limit on

the scope and the extensiveness of the study.

The information provided by respondents may not be fully accurate due to unavoidable biases.

The lack of corporation shown by the respondents, because of this optimum number of responds

not collected, so the sample was to be shortened.

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