relationship between service quality, perceived value, satisfaction

ijcrb.webs.com

INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS

COPY RIGHT © 2012 Institute of Interdisciplinary Business Research 788

DECEMBER 2012

VOL 4, NO 8

RELATIONSHIP BETWEEN SERVICE QUALITY, PERCEIVED

VALUE, SATISFACTION AND REVISIT INTENTION IN HOTEL

INDUSTRY

Muhammad Ahmad Raza

Service Quality Coordinator

NetSole Technologies

Ahmad Nabeel Siddiquei

Lecturer/Student Advisor,

Air University Multan Campus, Pakistan

Prof. Dr. Hayat M. Awan

Campus Director

Air University Multan Campus

Khurram Bukhari

Lecturer

Bahauddin Zakariya University

Abstract

The work is considered to find the relationship between service quality, perceived value and customer satisfaction

and repurchase intentions in luxury hotel management in Pakistan. The purpose of this studyis to find dimensions of

service quality and perceived value in hotel industry environment. Survey Questionnaires are used to collect data

from 125 luxury hotel customers of Pakistan. After analysis of collected data three dimensions of service quality are

identified which is service consistency, service convenience and customer demand fulfillment. This study also

enabled to identifytwo dimensions of perceived value which are functional and symbolic.We also found that

perceived value and service quality have important and positive relationship with satisfaction and revisit intentions.

The paper is one of the first papers to investigate the thorough relationship among all these important factors in

Pakistani hotel industry context. It has implications for both the managers and owners of hotel as to what is the

quality and satisfaction criterion of customers.

Keywords: SERVQUAL, Perceived Value, Satisfaction, Behavioral intentions, Hotel Industry, Pakistan

INTRODUCTION

In the era of globalization almost every company is facing fierce competition. Customer satisfaction is the one

important tool to capture competitive advantage. There are many ways to create customer satisfaction. But we will

focus on two main variables in this research. One is perceived value which is often used as customer value. Second

factor is quality of product/service. Literature provides solid ground to consider these two variables important in

creating customer satisfaction.(Shemwell, 1988) explained that customer satisfaction can be created through high

services quality.(.According to (Zeithaml, Berry, & Parasuraman, 1996)providing quality service is considered as an

essential strategy for success in today‟s competitive environment (A. Parasuraman, 1985; Zeithaml, Berry, &

Parasuraman, 1996).They used five dimensions of service quality in there research. Result showed that service

quality can be measured in five dimensions which are tangibility, reliability, responsiveness, assurance, empathy.

This study proved as classical tool for research in service quality. Many authors used this tool to test these

dimensions in different environment. Perceived value also act as an important tool in customer satisfaction based on

different studies. (Petric, 2004)emphasizes that perceived value is important factor related with customer satisfaction

and repurchase intention (Zeithaml 1988 p.14)defined perceived value as “the consumer‟s overall assessment of the

utility of a product based on perceptions of what is received and what is given”. (Cronin, Brady, & Hult, 2000) study

show that perceived value is the most significant factor for repurchase intention. Perceived value is often mixed with

customer satisfaction in literature but both are different.Difference of opinion exists among authors. Perceived value

often used as a synonym of customer satisfaction but (Woodruff,1997) explains that perceived value can occur at

any stage of purchase, including repurchase.(Oliver, 1981) belived thatsatisfaction should be considered as post

ijcrb.webs.com



DECEMBER 2012

VOL 4, NO 8

purchase evaluation. Different authors present different dimensions to measure perceived value. (Zeithaml,1988)

defined perceived value in monetary terms and presented four dimension of perceived value. These are low price,

what customer demand, value is quality received for the price paid and final dimension is related with what

customers get reference and how much they paid.

But (Sweeney & Soutar, 2001) presented perceived value as multi-dimensional. They provide four sub dimensions

of perceived value which are quality, emotional, social, functional value. As a matter of fact service quality and

perceived value is very different from each other still widely searched as collectively by many authors in SER-

PERVAL form. (Woodruff & Gardia, 1996) explained that customer perceived value investigates the interaction

between product and service while service quality focused generally on services. Due to the interrelated and

complex relationship among these variables there is need of study which should explore better understanding of

dimensions and relationships of these variables. This study will focus on luxury hotel industry of Pakistan as this

relationship is yet to be discovered in Pakistani environment.

Firstly this study will find out different dimensions of these variables. Secondly study will explore complex

relationship among all these variables.

LITERATURE REVIEW

Services are different from physical products. Because services are intangible, cannot be stored. But the purpose of

both are same, to satisfy human needs and wants. Services are part of our life from long time but difference between

services and commodities are first identified by Fisher in 1935. He used term “tertiary sector” for services and then

it was used by Judd in1965. He named as services “experiential possession. (Parasuraman, Zeithaml, & Berry, 1985)

defined servicesas multidimensional. These dimensions are intangibility, heterogeneity, and inseparability of

production and consumption.(Crosby, 1979) explains that due to the intangible nature of services we cannot measure

services by durability and number of defects. Due to the heterogeneity service quality measurement become more

challenging. But (Parasuraman & Zeithaml, SERQUAL, 1988) provide multiple frame work to measure service

quality which is called SERQUAL. (Parasuraman, Zeithaml, & Berry, 1985) found ten dimensions of service quality

which are more explanatory and well defined. These dimensions are reliability, responsiveness, tangibles, security,

competence, creditability, access, communication, access, and understanding of customer. (Parasuraman &

Zeithaml, SERQUAL,1988) conducted another research to clarify the concept of quality in which they had produced

22 items scale to measure service quality. In this scale they minimized dimensions to only five. These were

Assurance, Empathy, Tangibles, reliability and responsiveness. . There scale is the most popular in checking service

quality across many service sectors due to its generic nature. Many authors use SERVQUAL and other approaches

to measure service quality in hotel industry.

. (Saleha & Ryanb, 1992) performed a study and identified five dimensions of service quality in hotel setting. But

these dimensions are different from SERVQUAL instrument. These were reassurance; avoid sarcasm, empathy,

conviviality and tangibles. This study also revealed the fact that hospitality or conviviality has largest variance. (Lee

& Hing, 1995) used SERVQUAL in their research. Sample was taken from Chinese and French restaurants. They

found all dimensions significant with original SERVQUAL model. But in French restaurants scores of

responsiveness, reliability and assurance were high. While Chinese had gave more importance to tangibles,

reliability and assurance respectively.

Till now the authors are using model of (Parasuraman & Zeithaml,1988) work. In which they measure service

quality by using perception minus expectation score. Mean total 44 items are used to check service quality; 22 for

expectation before the service and 22 for perception after the service. This measurement tool is more complex and

required more time of respondent so (Mei, Dean, & White, 1999) argued that single scale is enough for the service

quality check. “(Babakus and Boller, 1992) &(Brown et al., 1993) found single scale more valid and reliable.

(Parasuraman et al., 1991) published their own one-column scale format which cuts the questionnaire size in half

and reduces the time required for completion”. (Mei, Dean, & White, 1999) add some more dimensions in

SERVQUAL in order to create new model for hotel industry called HOLSERV. They used 27 items to measure

service quality. They also include overall service quality question (10 point scale). Result suggested three variables

for measurement of service quality in hotel industry. These are employees, tangibles and reliability. (Akbaba, 2006)

used SERQUAL with modifications in wording .He also used 5 point scales from very low to very high, different

than 7 point scale in original SERVQUAL model. Overall 29 service quality attributes are added related to

SERQUAL model. The E-P gap model is used to measure results. This study identified five service quality

dimensions that represent the evaluative criteria customers use to assess service quality of the business hotels named

as „„tangibles‟‟, „„adequacy in service supply‟‟, „„understanding and caring‟‟, „„assurance‟‟, and „„convenience‟‟

(Akbaba, 2006). The findings of this study indicated that the most important factor in predicting business travelers‟

overall service quality evaluation was „„tangibles‟‟, followed by „„understanding and caring‟‟, „„adequacy in service

supply‟‟, „„assurance‟‟, and „„convenience‟‟ respectively. “. (Wilkins, Merrileesa, & Heringtona, 2007) research

ijcrb.webs.com



DECEMBER 2012

VOL 4, NO 8

explores important aspects of service quality in hotel industry. They used hierarchal model approach to check

service quality attributes relation. They concluded that there are three main types of service quality which are

psychical product, service experience and quality food & beverages. They criticized the applicability of SERQUAL

in hotel industry environment. They advocated that there tool is easy and more practical than SERVQUAL. Hotel

manager can easily Control and Plan service quality using their 3 dimensions. But again SERVQUAL with some

modification can be better tool to implement than other tools. After overall assessment of literature we decided to

use (Akbaba, 2006) model with slight modification according to local enviornment.

Perceived Value

Customer value is becoming important factor in business success. (Woodruff R. , 1997) explained that CV is

considered as basic requirement for long term success. Customer value is very broad topic and every author defind

in different ways. Some popular definitions in history are following.

(Zeithaml, 1988) “Perceived value is a customer‟s overall assessment of the utility of a product

based on perceptions of what is received and what is given.”

(Gale, 1994) “Customer value is market perceived quality adjusted for the relative price of

your product. [It is] your customer‟s opinion of your products (or services) as

compared to that of your competitors.”

(Holbrook,

1994)

Customer value is “a relativistic (comparative, personal, situational)

preference characterizing a subject‟s [consumer‟s] experience of interacting

with some object … i.e., any good, service, person, place, thing, event, or

idea.”

(Woodruff,

1997)

Customer value is a “customer‟s perceived preference for and evaluation of

those products attributes, attribute performance, and consequences arising

from use that facilitate (or block) achieving the customer‟s goals and purposes

in use situations.”

Source: (Albert Graf, 2008)

Customer value can be seen from two perspectives. One from company side and while other is customer perspective

(Albert Graf, 2008). Because our research is considered with customers so we will only focus on customer

perspective. From customer side the value is defined as “Value generated by a company‟s Product or service as

perceived by the customer” (Albert Graf, 2008). Customer value can be divided in to two Broad categories;

Perceived customer value and desired customer Value (Albert Graf, 2008). Perceived Customer value is defined as

tradeoff between benefits and sactifices with reference to performance of product or serivce (Zeithaml V. ,1988;

Gale, 1994).Percived value is one of most important factors to achieve competitive advantage in business

(Parasuraman, 1997). Many authors have done perceived value research in tourism and hospitablity industry (Chang

and Wildt 1994; Bolton and Drew 1991; Jayanti and Ghosh 1996; Oh 1999; Petrick and Backman 2002; Petrick,

Backman, and Bixler 1999)” (Petric, 2004). But focus was not on dimensions of percieved value. (Zeithaml V. ,

1988) presented four dimension of value. These are low price, what customer demand, value is quality received for

the price paid and final dimension is related with what customer get reference and how much they paid. Perceived

value is considered as one-dimensional in past. But actually every person has its own perception of value. One factor

which is defined by Zeithaml related to monetary value is not enough to explain the Perceived value. A more

sophisticated measure is required to measure perceived value of customers. (Sweeney & Soutar, 2001) suggested

five dimensions which are following

Emotional value “the utility derived from the feelings or

affective states that a product generates”

Social value (enhancement of social

self-concept)

“the utility derived from the product‟s ability

to enhance social self-concept”

Functional value (price/value for

Money)

“the utility derived from the product due to

the reduction of its perceived short term and

longer term costs”

Functional value (performance/

quality)

“the utility derived from the perceived quality

and expected performance of the product”

Source: (Sweeney & Soutar, 2001)

ijcrb.webs.com



DECEMBER 2012

VOL 4, NO 8

(Petric J. A., 2002) presented, tested and validated five dimensions of perceived value. These dimensions are

“quality, emotional response, monetary price, behavioral price, reputation”. The difference between (Petric J. A.,

2002) SER-PERVAL and (Sweeney & Soutar, 2001) PERVAL is that Petric use reputation instead of social

dimension and also divide price into two sub components which are moneatery and behavioral price. Other authors

also worked on perceived quality multi dimensions. Some of the examples are following

(Sweeney & Soutar, 2001) found that emotional value is more important as related to functional value in durable

goods. (Mathwick, Malhotra, & Rigdon, 2001) developed EVS to assess consumer experiential value in the catalog

and internet shopping setting. They include Visual appeal, entertainment, escapism, enjoyment, efficiency and

economic value factors. But the most related measurement related to services is provided by (Petric, 2002).(Po-

Tsang Chen, 2009).suggested that perceived value can be divided in to two broad dimensions which are functional

and symbolic. (Rintama¨ki, Kanto, Kuusela, & Spence, 2006) defined three broad constructs of customer perceived

value; “utilitarian, Social and hedonic”. Utilitarian component is like functional value as defined by other authors.

Social value is related with status and self esteem and hedionic is related with emotional value of person.

Customer Satisfaction and Behavioral Intentions

(Oliver, 1981) defines Customer satisfaction as an emotional response to the use of a product or service. Satisfaction

is best defined as “an evaluation between what was received and what was expected” (Parker & Mathews, 2001).

There is no single definition of satisfaction. So we should really on basis that satisfaction is some thing related with

Post purchase evaluation. Post- purchase intention means that consumer will purchase your service again (Zeithaml,

Berry, & Parasuraman, 1996). There is another dimension of post purchase behavior which is word of mouth given

by (Cronin, Brady, & Hult, 2000). There are many researches which support relationship between satisfaction and

repurchase intentions (Choia & Chub, 2001) (Gill, Byslma, & Ouschan, 2007) (Paul & Geoffrey N., 2009).

(Eggert & Ulaga, 2002) believes that customer satisfaction is another important construct for the loyality, behavioral

intentions and word of mouth. But the problem is that some authors support value framework to measure

performance but others support satisfaction. Perceived value is often mixed with customer satisfaction in literature

but both are different. The main difference is that perceived value can occur at any stage of purchase, including

repurchase but satisfaction in post purchase behavior (Woodruff, 1997). Perceived value is ancedent of customer

satisfaction (Eggert & Ulaga, 2002) (Kuo, Wub, & Deng, 2009) (Paul & Geoffrey N., 2009) and satisfaction is

ancedent of repurchase intention (Eggert & Ulaga, 2002) (Kuo, Wub, & Deng, 2009). The perceived value have

positive relationship with behavioral intentions (Sweeney & Soutar, 2001) (Gill, Byslma, & Ouschan, 2007) (Kuo,

Wub, & Deng, 2009) (PETRICK, 2004). On the other hand authors also support that Service quality has positive

relationship with behavioral intention (González, Comesaña, & Brea, 2007) (Zeithaml, Berry, & Parasuraman, The

Behavioral Consequences of Service Quality, 1996) (Ismail, Abdullah, & Francis, 2009) (Kuo, Wub, & Deng,

2009).

(Po-Tsang Chen, 2009) explores relationship between service quality attributes and perceived value in Australian

coffee industry. They used five service quality dimensions to measure service quality but they are different from

SERQUAL. They quoted that “Pettijohn et al. (1997) found that quality, cleanliness and value to be the three most

important attributes in fast food restaurants, while atmosphere and menu variety were relatively unimportant”. These

dimensions are perceived service, coffee quality, beverages, atmosphere, and extra benefit, where perceived service

is most important and extra benefits are least important respectively. (Ismail, Abdullah, & Francis, 2009) study

relationship between service quality, perceived value and satisfaction. They used only three dimensions of

SERQUAL which are empathy, assurance and responsiveness to measure service quality in Malaysian public

institutions of higher learning. This study found that only empathy is significant with perceived value for customer

satisfaction.

Research Methodology

In order to find relationship between service qualities, perceived value, and customer satisfaction and repurchase

intentions, the study investigates the relationship between all variables. First of all we will draw new dimensions of

service quality and perceived value for hotel industry environment. Because still there are no universal dimensions

exist to measure these two variables in hotel industry specifically. We will use factor analysis in order to find these

dimensions. Secondly we will check relationship between each variable with other. Thirdly we will find that

perceived value has any moderating effect on service quality and satisfaction relationship or not. We will use

LISERL 8.8 to find this complex relationship. Finally, we will explore that perceived value is good predictor of

revisit intentions or satisfaction. Because no consensus exist in literature to measure revisit intentions.

Research Hypothesis

H1: There is positive relationship between service quality and perceived value Dimensions

H2: There is positive relationship between perceived value dimensions and satisfaction

H3: There is positive relationship between satisfaction and service quality dimensions

ijcrb.webs.com



DECEMBER 2012

VOL 4, NO 8

H4: There is positive relationship between service quality dimensions and Repurchase Intention

H5: There is positive relationship between perceived value dimensions and Repurchase Intention

H6: Positive relationship exist between customer satisfaction and behavioral intensions

H7: Perceived value dimensions are moderating variable between satisfaction and service quality factor

Research Design and Methodology

This study is exploratory type. In which we will find clear relation between all these variables. First of all we have

studied literature to find theories and dimensions of these variables. After analyzing literature we have found

different dimensions of service quality perceived value and of other variables. After reviewing literature we come on

a point there is no consensus on the relationship of these four variables. Individual relationships are checked in

various studies. Recently some studies focus on the relationship of these variables. Because the complex relationship

between these variables required more research. (Kuo, Wub, & Deng, 2009) has done research on the relationship

of all four variables but the study was in different context. But the problem with this instrument is that it is not of

generic nature and cannot be implement in all sectors.(Ismail, Abdullah, & Francis, 2009) provided excellent tool

for measurement in context of hotel industry envionrnment.These dimensions are more generic in nature and also

widely tested in literature.(Ismail, Abdullah, & Francis, 2009) also found relationship between service quality and

satisfaction. They use percieved value as a moderating variable between service quality dimensions and satisfaction.

We will use modified test model of (Kuo, Wub, & Deng, 2009) in hotel industry context, secondly we will also test

(Ismail, Abdullah, & Francis, 2009). Thirdly this study will also test SERV-PERVAL and SERQUAL in context of

hotel industry of pakistan. This type of relationship is still unexplored in pakistani hotel context. So this study is

important to find relationship of these variables .

The proposed model is:

MODEL 1

MODEL 2

Survey Instrument

The questionnaire was designed according to related literature as discussed in literature review. Questionnaire was

divided into three parts. First part is related to service quality dimensions. SERVQUAL used by (Akbaba, 2006) was

adopted with some modification in text and questions. Further one item is taken from (Sulek and Hensley, 2003) to

measure fairness of wait effect on service quality. 30 items are included in first part to measure service quality

dimensions presented by (Parasuraman, et al., 1988). These dimensions are tangibles, reliability, responsiveness,

assurance and empathy. All items were on 7 point likert scale ranging from strongly agree “1” from strongly

H4

Service Quality

(SQ) H3

Customer Satisfaction

(CS) H1 Behavioral Intentions

(RI) H6

H2

Perceived Value

(PV) H5

H7 Custoer Satisfaction

(CS)

Perceived

Value

Value

(PV)

Service Quality

H2

ijcrb.webs.com



DECEMBER 2012

VOL 4, NO 8

disagree “7”. Second part is related with perceived value measurement. (PETRICK, 2004) SERV-PERVAL with

modification in writing and items were used to measure perceived value. SERV-PERVAL has five sub-dimensions

which are “quality, emotional response, monetary price, behavioral price and reputation.” (PETRICK, 2004). 22

items were used to measure service quality. All items were on 7-point likert scale. Part 3 consist of 8 items. These

items were related with age, occupation, service package availed, monthly income, frequency of visit, overall

satisfaction and revisit intention. Satisfaction, frequency of visit and repurchase intention were also measured on 7-

point likert scale.

Research Design and Sample

Self-administrated Survey Questionnaires were used to conduct research. Pilot testing were done to check

questionnaires. The respondents of pilot testing were luxury hotel customers. After this testing some words and

phrases were modified to create better understanding. Sample of 150 customers was taken from five big cities of

Pakistan.

Data Collection

The questionnaire was given to all luxury hotel customers when they were checking out from hotel. Researcher

assists the respondents in questionnaire completion.. 124 questionnaires data were collected completely. Other

incomplete questionnaires were discarded.

Data Analysis

Statistical Process for Social Sciences (SPSS) version 17 and LISREL 8.8 were used for data analysis purpose. First

factor analysis was used to better understand dimensions. Service quality dimensions and perceived value

dimensions were analyzed individually with CFA. Then new factors were used to find relationship between all three

variables. Regression test was used to check relationship of variables. Co-relation test were also used to see

relationship among related variables. LISREL is used to check moderating relationships of variables on satisfaction

and revisit intentions.

Factor analysis

Factor analysis with principal component procedure is used to understand the structure of sub dimensions of service

quality and perceived value with varimax rotation. In CFA of service quality total variance explained by all three

factors is 42 %. Items with greater value from.50 is selected, table 1 shows the new factors. In SERV-PERVAL

analysis total variance explained by two factors is 52 % and item with greater value than .70 are selected. Table 2

shows the result of SERV-PERVAL two factors.

Table 1: SERVQUAL

Factors 1 2 3

Factor 1 : Service Consistency

The service units of the hotel have adequate capacity .715

The hotel has modern looking equipment .783

The atmosphere and equipment are comfortable and appropriate for

purpose of stay

.828

The equipment of the hotel works properly without causing

breakdowns

.786

The hotel performs the services right at the first time .630

The hotel provides the services at the time it promises to do so .735

Factor 2 : Service Convenience

Employees are always willing to serve customers .783

Employees are always available when needed .834

The hotel keeps accurate records .648

The hotel is also convenient for disabled guests .706

It is easy to access to the hotel (transportation, loading and

unloading area, car parking area, etc.)

.650

Factor 3 : Customer Need Fulfillment

ijcrb.webs.com



DECEMBER 2012

VOL 4, NO 8

Materials associated with the hotel are adequate and sufficient .697

Food and beverages served are hygienic, adequate and Sufficient .576

Employees have knowledge to provide information and assistance

to guests in areas they would require

.614

Employees of the hotel understand the specific needs of guests .541

The hotel provides its guests a safe and secure place .588

The hotel has visually appealing buildings and facilities .663

Table 2: PERVAL

Factors

Components

1 2

Functional Value:

Hotel services are worth the money .752

Hotel services are fairly priced .742

Hotel service are reasonably priced .802

Hotel is economical .802

Symbolic Value:

Hotel has good reputation .906

Quality of this hotel is Outstanding. .723

Hotel is well thought of .754

Hotel is reputable .744

Statistical Analysis

Independent 2 tail t-test is used to see the difference among gender on all variables. We see results in accordance

with 3 dimensions of service quality, 2 dimensions of perceived value and with the performance variables. These

variables include frequency of visit, satisfaction and repurchase intentions.

Frequency of visit has no significant difference among males and females. Overall satisfaction also has no

significant difference among groups and equal variance is assumed here. All variables show no significant

difference among groups except service consistency where sig. (0.016). Secondly in symbolic value and service

consistency equal variances are not assumed because Levene's test shows significance level less than 0.05 in both

cases.

ijcrb.webs.com



DECEMBER 2012

VOL 4, NO 8

Table 3: Levene's Test for Equality of Variances

One way ANOVA test (table 4) shows that there is significant difference among different age group in perceiving

function value, symbolic value and service consistency. Other variables have no difference among age groups. But

satisfaction has some difference among age groups but not significant enough. There is no significance difference

among all variables in different occupation groups. Satisfaction in only variable which has significant difference in

service availed group. Revisit, convenience and customer need fulfillment is equally important for all income

groups. But in other variables significant difference exist in choices.

On the other hand if we see that frequency of visit, revisit intentions, service convenience and customer need

fulfillment have no difference regardless of age, occupation, package availed and monthly income. Satisfaction

varies only in different income groups and as well in different packages availed groups. Perceived functional value

and service consistency is different in different age and monthly income groups.

Further, post hock LSD test show that the difference in perceived functional and symbolic value as well as in service

consistency exists in 45-54 age groups. In package availed three categories are significantly difference with other

groups. Banquet hall customers are significantly different with Package2 (accommodation+ full meals) and package

3 (all services) in overall satisfaction. Package 1 (accommodation + one meal) are also significantly different from

package 2 and 3 in overall satisfaction. In monthly income all groups are very diverse and different from each other

in overall satisfaction, perceived value dimensions and in service consistency factors.

Table 4: One Way ANOVA

Age Occupation Package/

Services

Availed

Monthly

Income

Sig. Sig. Sig. Sig.

Frequency of visits .477 .705 .071 .087

Overall satisfaction .109 .494 .003 .019

Revisit Intentions .471 .611 .100 .366

Perceived functional Value .021 .633 .065 .008

Perceived symbolic Value .006 .591 .973 .019

Service consistency .009 .290 .066 .011

Service convenience .524 .131 .068 .281

Customer need fulfillment .849 .553 .524 .469

Correlation and Regression Analysis

F Sig. t df Sig. (2-

tailed)

Frequency of visits Equal variances assumed .953 .331 1.402 122 .164

Equal variances not assumed 1.498 43.194 .141

Overall satisfaction Equal variances assumed 1.111 .294 .697 122 .487

Equal variances not assumed .630 34.921 .533

Revisit Intentions Equal variances assumed .030 .863 -.008 122 .994

Equal variances not assumed -.007 36.856 .994

Functional Value Equal variances assumed 1.410 .237 1.347 122 .180


Symbolic Value Equal variances assumed 6.179 .014 .660 122 .510

Equal variances not assumed .809 55.259 .422

Service Consistency Equal variances assumed 16.626 .000 1.893 122 .061


Service

Convenience

Equal variances assumed .148 .701 -.309 122 .758


Customer Need

Fulfillment

Equal variances assumed .043 .836 -.360 122 .720


ijcrb.webs.com



DECEMBER 2012

VOL 4, NO 8

Correlation analysis (table 5) is done to see relationship between all variables. There is significant relationship

between service consistency and service convenience with perceived value factors. But Consistency has positive

relationship with both dimensions while Convenience has negative but significant relationship. Now why there is

negative relationship exist. First of all we have many money related dimensions in functional value. We assume that

more cost mean more convenience. For example, hotels have some special services for disable guests but they

charge some extra money.

Table 5: Correlations

Regression analysis

All dimensions of perceived value are significantly related with service quality dimensions. Perceived value

dimensions were considered as dependent on service quality dimensions. Multivariate test shows the significant

relationship among all variables. Customer need fulfillment had weak relationship with perceived value in

comparison with other service quality factors. Regression is used to see relationship between functional value

dimension with service quality dimensions (table 6).

There is significant relationship exists between these variables with r-square value of .563. But again the

relationship of service convenience, customer need fulfillment with functional value is negative. The reason is same

Frequency

of visits

Overall

satisfaction

revisit

intention

Symbolic

Value

Consistency Convenience functiona

l Value

Customer

need

Fulfillment

Frequency of

visits

Pearson

Correlation

1 .205* .138 .338** .434** -.187* .415** -.106

Sig. (2-tailed) .022 .124 .000 .000 .037 .000 .240

N 125 125 125 125 125 125 125 125

Overall

satisfaction

Pearson

Correlation

.205* 1 .672** .433** .553** .019 .418** .089

Sig. (2-tailed) .022 .000 .000 .000 .837 .000 .324

N 125 125 125 125 125 125 125 125

Revisit

Intentions

Pearson

Correlation

.138 .672** 1 .281** .434** .067 .261** .191*

Sig. (2-tailed) .124 .000 .002 .000 .456 .003 .033

N 125 125 125 125 125 125 125 125

Symbolic

Value

Pearson

Correlation

.338** .433** .281** 1 .552** -.450** .506** -.028

Sig. (2-tailed) .000 .000 .002 .000 .000 .000 .754

N 125 125 125 125 125 125 125 125

Consistency Pearson

Correlation

.434** .553** .434** .552** 1 -.036 .691** .088

Sig. (2-tailed) .000 .000 .000 .000 .688 .000 .332

N 125 125 125 125 125 125 125 125

Convenience Pearson

Correlation

-.187* .019 .067 -.450** -.036 1 -.278** .035

Sig. (2-tailed) .037 .837 .456 .000 .688 .002 .699

N 125 125 125 125 125 125 125 125

Functional

Value

Pearson

Correlation

.415** .418** .261** .506** .691** -.278** 1 -.095

Sig. (2-tailed) .000 .000 .003 .000 .000 .002 .290

N 125 125 125 125 125 125 125 125

Customer

Need

Fulfillment

Pearson

Correlation

-.106 .089 .191* -.028 .088 .035 -.095 1

Sig. (2-tailed) .240 .324 .033 .754 .332 .699 .290

N 125 125 125 125 125 125 125 125

*. Correlation is significant at the 0.05 level (2-tailed).

**. Correlation is significant at the 0.01 level (2-tailed).

ijcrb.webs.com



DECEMBER 2012

VOL 4, NO 8

as described in correlation. Customer need fulfillment is also negative here. The reason behind this result is there is

difference between what customer perceived and what they actually receive. Regression test of symbolic value with

service quality factors have shown same results. The relationship is significant and value of r-square (.493) show

good fit. But the relationship with convenience and demand fulfillment is also negative here. Secondly VIF values

are also lower enough to show that there is no multi linearity issue. So H1 is not supported here because two

dimensions show negative relationship.

Table 6: Relationship between Service quality dimensions and Perceived Value Dimensions

Source Dependent

Variable

Type III

Sum of

Squares

Df Mean

Square

F Sig.

Service

Consistency

Functional

Value

69.845 1 69.845 132.53

7

.000

Symbolic

Value

26.471 1 26.471 69.235 .000

Service

Convenience

Functional

Value

8.961 1 8.961 17.004 .000

Symbolic

Value

16.648 1 16.648 43.542 .000

Customer Need

Fulfillment

Functional

Value

3.151 1 3.151 5.978 .016

Symbolic

Value

.334 1 .334 .873 .352

a. R Squared = .563 (Adjusted R Squared = .552)

b. R Squared = .493 (Adjusted R Squared = .480)

Table 7: Overall Satisfaction

Unstandardized

Coefficients

Standardized

Coefficients

t Sig. Collinearity

Statistics

B Std.

Error

Beta Toleranc

e

VIF

(Constant) 1.001 .302 3.31

6

.001

Functional

Value

.305 .104 .268 2.92

7

.004 .744 1.344

Symbolic

Value

.429 .132 .297 3.24

8

.002 .744 1.344

a. Dependent Variable: Overall satisfaction after availing hotels of specified hotel

Regression test of satisfaction with perceived value factors showed significant and positive relationship (table 7).

Secondly value of r-square is good enough to show fair model fit. So H2 is true.

Service consistency only shows significant relationship with satisfaction but there is positive relationship with all

variables. H3 is also found true here that there is positive relationship between satisfaction and service quality.

Next the relationship between service quality and repurchase intentions also shows same result like satisfaction.

Results shows that only one dimension has a significant result which is service consistency but again the positive

relationship proved our H4. Another variable is customer need fulfillment which is important but still insignificant.

Result of regression test show that symbolic value is more important for revisit intentions then functional one. Also

significant relationship is found with symbolic value. There is positive relationship exists between perceived value

and revisit intention. So we can accept the H5.

Regression results shows relationship between satisfaction and revisit intentions are strongly significant and positive

(sig= 0.000, beta =10.007). The value of r-square is .453 and there is only one independent variable which is

satisfactions. So, model shows good fit and prove our hypothesis that there is significant relationship exist in revisit

intention and satisfaction. If people are satisfied then they would likely to have revisit intentions.

Model 2

Now we will check model 2. For the model 2 we use special technique to analyze results. After conducting

hierarchical analysis we found that in fixed factors package is significant and have positive relationship (b=.210

ijcrb.webs.com



DECEMBER 2012

VOL 4, NO 8

p<.05). Table 8 is used to explore comprehensive relationship between service quality, satisfaction. Secondly we

will also analyze moderating effect of perceived value in this relation. These are beta value of regression analysis.

The significant values are highlighted.

First of all we analyzed all controlling variables with satisfaction. Only package availed is the significant factor

which has impact on satisfaction. With the change is package availed the satisfaction varies

In M2 service consistency and symbolic value are significant with customer satisfaction. Consistency is very

important aspect of every service environment and also proved here. Secondly in our case which is luxuries hotel

symbolic value is important contributor of satisfaction which is quite true. Our dissertation suggests that people want

symbolic value after visiting luxuries hotels.

M3 column analyze moderating relationship of perceived value. Overall model show good fit but no variable show

significance in this model. We have used LISREL to thoroughly analyze relationship between these variables.

Table 8: Moderating Relationship of Perceived Value on satisfaction

Variables Satisfaction

M 1 M 2 M 3

Controlling Variables

Gender .015 .032 .025

Age .119 .007 -.027

Occupation -.092 -.078 -.077

Package .210* .152 .156

Monthly income .108 .149 .129

Independent Variable

Service Consistency (s1) .289* -.389

Service Convenience (s2) .146 -.060

Customer Need Fulfillment (s3) .082 .023

Perceived Functional Value (p1) .045 -.540

Perceived Symbolic Value (p2) .319* -.035

Moderating Variables

Perceived functional x service consistency .057

Perceived functional x service convenience .100

Perceived functional x customer need fulfillment .030

Perceived symbolic x customer need fulfillment .001

Perceived symbolic x service consistency .296

Perceived symbolic x service convenience .025

R2 .109 .395 .419

R2 Adjusted .070 .340 .330

F 2.807 7.19 4.686

R2 change .109 .395 .419

LISREL Analysis

Service Quality (S.Q)

Service quality is our broad construct and important part of dissertation. We have taken many variables to measure

service quality in hotel environment. After applying factor analysis we are able to find three dimensions of service

quality which are important in luxury hotel environment. These three variables are shown in the figure.

Service Consistency (s.Consis)

Service Convenience (s.conven)

Customer Need Fulfillment (s.need)

All three variables are further divided into some measurable questions. These questions can be found in appendix

along with questions in survey questionnaire.

Perceived Value (P.V)

Perceived value is another important variable involved in our dissertation. 22 questions are asked to measure

perceived value. After factor analysis we are able to find two dimension of perceived value which is important in

luxury hotel environment. These are symbolic and Functional Value. Functional Value is related with monetary

aspect while symbolic means social and emotional value here.

ijcrb.webs.com



DECEMBER 2012

VOL 4, NO 8

Functional Value (P.fun)

Symbolic Value (P.sym)

Satisfaction (O.S)

Satisfaction is measured by only one variable which is overall satisfaction. 7 scale Semantic scale is used to

measure satisfaction.

Behavioral Intentions (B.I)

Behavioral intentions are also measured with single item. We use 7 scale likert scales to measure satisfaction. Scale

ranges from strongly agree to strongly disagree.

Figure 2 (LISREL Analysis Model 1)

ijcrb.webs.com



DECEMBER 2012

VOL 4, NO 8

The following diagram Figure 2 is showing different variables and their relationship. We will summarize all

variables and these relationships one by one.

Figure 3 is same like figure 2 but few relationship are added in this figure. As shown in there. The new relations are

in different colors.

The new relations are actually measuring effect of perceived value and service quality dimensions on satisfaction

and behavioral intentions individually. It means effect of service consistency, service convenience and Customer

demand fulfillment on satisfaction and behavioral intentions. It also measure effect of Symbolic and functional value

on satisfaction and behavioral intentions separately.

Figure 3 (LISREL Analysis Model 2)

ijcrb.webs.com



DECEMBER 2012

VOL 4, NO 8

Relationship between Service Quality and Perceived Value

The results shows highly significant and strong relationship between these two variables (sig= .00025 beta=

5873.46).

Relationship between Satisfaction, Service Quality and Perceived Value

If we see the overall effect of all variables (Dimensions of both Service quality and perceived value) on satisfaction.

Service consistency is the most important and significant dimension which has indirect effect on satisfaction. In

other words consistency effect on perceived value and ultimately this effect convert into satisfaction. These results

are match with our previous results.

On the other side if we see combine relationship of service quality and perceived value with satisfaction without

sub-dimensions as shown in figure 2( i.e Consistency etc) then perceived value (sig= .034 beta= 980.10) and service

quality (sig= .061 beta= 583) both has significant and positive relationship with satisfaction.

Relationship between Behavioral intentions, Satisfaction, Service Quality and Perceived Value

In overall relationship of other three variables (including sub-dimensions) with Behavioral intentions (figure 3).

There is no variable which have significant indirect effect on behavioral intentions.

But when we see individual relationship of each variable with behavioral intentions still there is weak relationship

exist. But when we see independent relationship of each variable with behavioral intentions then almost all

variables have significant relationship. Satisfaction has strongest relationship among all variables.

Critical Indices

Critical indices are also used to see impact of different factors on service quality and perceived Value both.

Table 9: SERQUAL Critical Indices

Tier I Critical

0.298666667 Food and beverages served are hygienic, adequate and Sufficient

0.317333333 The hotel provide accurate record

0.317333333 The material associated with hotel is adequate

0.354666667 The hotel provides its guests a safe and secure place

0.354666667 The hotel provides consistent services

0.364 Employees have knowledge to provide information and assistance to

guests in areas they would require

0.373333333 Getting information about the facilities and services of the hotel is easy

(reaching information via phone, internet, etc

Tier II Supporting

0.429333333 Modern looking Equipment

0.429333333 Atmosphere and equipment

0.438666667 Adequate Capacity

0.438666667 the hotel have visually appealing building

0.457333333 Employees of the hotel understand the specific needs of guests

0.513333333 Employees are willing to serve customer

0.522666667 Employees are always there when required

0.569333333 The course material is modern and updated

0.588 services right at first time

0.588 services provided on promise time

Tier III Maintaining

0.634666667 The hotel and its facilities have operating hours

0.784 The hotel is also convenient for disable guests

0.802666667 It is easy to access hotel transport, parking etc

0.877333333 Hotel provides proper control to you in selection

Table 9 shows that 21 factors which are extracted from factor analysis and also important for service quality of

luxury hotels in Pakistan. There are three types of tiers here. Tier I as name shows that most critical for success.

Tier II factors are important in nature but not critical. Controlling these factors can give you extra advantage in

managing service quality.

Tier III factors are least important but still these factors have impact on success of any hotel.

Service Quality

Critical

ijcrb.webs.com



DECEMBER 2012

VOL 4, NO 8

First of all hygienic food and adequate food is most important factor in luxury hotels. Without providing hygienic

food no restaurant can become successful in fact cannot even run their operations. So its very logical and important

thing in this industry. Secondly accurate records are another important factor, because mostly people booked their

room in advance. Let suppose that you go to hotel and they refuse to accommodate you due to loss of record then

you would surely not visit that hotel again. Safety and security is burning issue in Pakistan especially in luxury

hotels. People count security as critical factor in any hotel environment. Now moving towards other critical factors,

consistency is the critical factor in any service environment regardless of industry. Consistency is challenges as well

as important factor for success in all service environments. Last factors are related to information and assistance. If

you provide your customer right information at right time then you can only maintain your service quality level.

Simple point is that without known to any service how customer can avail it.

Supporting

Supporting factors are also important for any business success. These factors are related with Physical facilities like

environment, capacity. These factors also include employee interaction that there are able to guide customer and

can understand need of customer or not. They are always willing to serve customer or not. Last thing included in tier

II is timing of service which is very important factor. Now day‟s people want their service on time. This factor may

be critical in other environment but due to cultural aspects this comes in supporting factors.

Maintaining

This Tier include factors which are least important for example as shown in table that hotel should be provide

services in all operating hours, convenient for disable guest. We all know that transportation is not big issue for

luxury customers that why its weight age is low. Last factor which is proper control is important factor but every

hotel has its restriction so it is least important factor.

Table 10: Perceived Value Critical Indices

TIER I Critical

0.1960 Hotel is well thought of

0.2800 Hotel is reputable

0.3080 Hotel services are easy to buy

0.3453 Hotel has good reputation

0.3733 Hotel is well respected

0.4480 Hotel is very dependable

0.4760 Quality of this hotel is Outstanding.

0.4853 Hotel is very consistent

0.4947 Hotel is very reliable

TIER II Supporting

0.5413 Hotel service are reasonably priced

0.5693 Hotel is economical

0.5787 Hotel services are fairly priced

0.5880 I feel good by visiting this hotel.

0.5880 Hotel services appears to be a good bargain

TIER III Maintaining

0.6347 Hotel services gives me pleasure

0.7000 Hotel services required little effort to buy

0.7093 Hotel gives me a sense of joy

0.7373 By using services of this hotel I feel delighted

0.7373 Hotel services are worth the money

0.7373 Hotel services required little energy to be availed

0.8307 Hotel services gives me happiness

Perceived Value

Critical

There are total 21 factors to measure perceived value. Social values along with overall aspects of service quality are

critical factors in luxury hotel environment. Customer of luxury hotels usually believe in social and emotional value

then monetary one.

Supporting

ijcrb.webs.com



DECEMBER 2012

VOL 4, NO 8

Tier II include all factors related to monetary benefit. People want good bargain. In other words they want service

what they paid for.

Maintaining

Tier III is related with emotional value factors. It shows that it is not essential that people want pleasure every time

they visit hotel. The reason can be that many people visit hotel for many reasons for example meeting, dinner ,just

stay etc or we can say that every customer not visit for entertainment purpose or to spend their holidays.

Discussion and Conclusion

We used SPSS 17, LISREL 8.8 and Critical indices for data analysis. All tools are used for different purpose. First

of all we have done factor analysis in SPSS to reduce factors. Factor analysis reveals3 dimensions of service quality

and 2 dimensions of perceived value.Then correlation, regression analysis are used to see relationship between these

variables. The findings of the research show that there is relationship between all these variables. But the

relationship is very complex. First of all three dimensions of service quality discovered from this study. These

dimensions are service consistency, service convenience and customer demand fulfillment. Service consistency is

not new one because this dimension is explored by many authors including Parasuman et al. This dimension is also

not new but very rare in literature. This study explores Service convenience as new dimension of service quality.

Customer need fulfillment is new dimension discovered from this research. More researches in different industries

and environments are required to prove importance of these dimensions. In perceived value, we find only two

dimensions. These two dimensions are functional which is related with monetary value and other is symbolic which

is related with social and emotional value. Our results confirmed the research of (Po-Tsang Chen, 2009).

Secondly, this research finds relationship among service quality, perceived value, satisfaction and revisit intention in

hotel industry. First of all the relationship between service quality dimensions and perceived value dimensions is

significant. But only one dimension (service consistency) has positive relationship. Regression and LISREL both

shows same result that there is significant relationship between these two variables. . Then we find that perceived

value is important and has positive relationship with satisfaction and revisit intentions individually..Further,

symbolic value is more important than functional one in revisit intentions, if analyzed individually. Our hypothesis

(H2,H5) are proved true.

Service quality has positive and significant relationship with both satisfaction and revisit intentions. But one

dimension has strong influence which is service consistency. It is very obvious that due to consistent services people

are more satisfied and likely to visit again and again. But if we see indirect or moderating effect with LISREL then

only service consistency has effect on satisfaction among all service quality and perceived value factorsso our

hypothesis H4, H5 also find true.

But still there are many limitations exist. More service quality dimensions may reveal different and improved

results. New service dimensions are required to find this complex relationship. Satisfaction and revisit positive

relationship proved true. Another important thing is that satisfaction and perceived value both have strong and

positive relationship with revisit intentions. But satisfaction has more intense relationship than perceived value.

The conclusions drawn from study must consider following limitations. First thing is that sample is only collected

from luxuries hotels of Pakistan. So preferences of other hotels can change results. Another thing is that sample is

only collected from urban areas of Pakistan. Result may vary in other countries as well in rural areas. Another

limitation can be that we have only used uni- dimensional SERQUAL. Multi-dimensional may provide different

results.

For future research, we suggest that more research is required to find relationship among all four variables.

Secondly, new dimensions are required in the field of hotel industry to see service quality, perceived value and

satisfaction.

ijcrb.webs.com



DECEMBER 2012

VOL 4, NO 8

References

Akbaba, A. (2006). Measuring service quality in the hotel industry:A study in a business hotel in Turkey. Hospitality

Management , 25, 170-192.

Albert Graf, P. M. (2008). 58 (1).

Choia, T. Y., & Chub, R. (2001). Determinants of hotel guests‟ satisfaction and repeat patronage in the Hong Kong

hotel industry. Hospitality Management , 20, 277-297.

CRONIN, J. J., BRADY, M. K., & HULT, G. T. (2000). Assessing the Effects of Quality, Value, and Customer

Satisfaction on Consumer Behavioral Intentions in Service Environments. Journal of Retailing, 76 (2), 193-218.

Crosby, P. (1979). Quality Is Free. McGraw-Hill, New York, NY.

Donald J. Shemwell, U. Y. (1988). Customer-service provider relationships: an empirical test of a model of service

quality, satisfaction and relationship-oriented outcomes. Vol. 9 (Iss: 2, pp.155 - 168).

Eggert, A., & Ulaga, W. (2002). Customer perceived value: a substitute for satisfaction in business markets? Journal

of Business & Industrial Marketing, 17 (2/3), 107-118.

Gale, B. T. (1994). Managing Customer Value: Creating quality and service that. Gill, D., Byslma, B., & Ouschan,

R. (2007). Customer perceived value in a cellar door visit: the impact on behavioural intentions (Vol. 19).

González, M. E., Comesaña, L. R., & Brea, J. A. (2007). Assessing tourist behavioral intentions through perceived

service quality and customer satisfaction. Journal of Business Research , 60, 153-160.

Holbrook, M. (1994). The Nature of Customer Value. In: Service Quality.

Ismail, A., Abdullah, M. M., & Francis, S. K. (2009). Exploring the relationships among service quality

features,perceived value and customer satisfaction. Journal of industrial Engineering and Management , 2 (1), 230-

250.

Kuo, Y.-F., Wub, C.-M., & Deng, W.-J. (2009). The relationships among service quality, perceived value, customer

satisfaction,and post-purchase intention in mobile value-added services. Computers in Human Behavior, 25, 887-

896.

Lee, Y. L., & Hing, N. (1995). Measuring quality in restaurant operations: an application of the SERVQUAL

instrument. International Journal of Hospitality Management, 14 (3-4), 293-310.

Lin, C.-H., Sher, P. J., & Sher, P. J. (2005). Past progress and future. International Journal of Service, 16 (4), 318-

336

Mathwick, C., Malhotra, N., & Rigdon, E. (2001). Experiential value: conceptualization,measurement and

application in the catalog and internet shopping environment. Journal of Retailing, 77 (1), 39-56.

Mei, A. W., Dean, A. M., & White, C. J. (1999). Analysing service quality in the hospitality industry. Managing

Service Quality, 9 (2), 136 – 143

Oliver, R. (1981). Measurement and evaluation of satisfaction processes in retail settings. Journal of retailing, 57,

25-48.

Parasuraman, A. (1997). Reflections on gaining competitive advantage through customer value. Journal of the

Academy of Marketing Science, 25 (2).

Parasuraman, A., & Zeithaml, V. A. (1988). SERQUAL- A multi item scale to measure consumer perception of

service Quality. Journal of Retailing , 64 (1).

Parasuraman, A., Zeithaml, V. A., & Berry, L. L. (1985). A Conceptual Model of Service Quality and Its

Implications for Future Research. The Journal of Marketing, 49 (4), 41-50.

Parker, C., & Mathews, B. P. (2001). Customer satisfaction: contrasting academic and consumers' interpretations.

Marketing Intelligence & Planning , 19 (1), 38-44

Paul, W., & Geoffrey N., S. (2009). VALUE, SATISFACTION AND BEHAVIORAL INTENTIONS IN AN

ADVENTURE TOURISM CONTEXT. Annals of Tourism Research, 36 (3), 413-438.

Petric, J. A. (2002). Development of a multi-dimensional scale for measuring the perceived. Journal of Leisure

Research, 34 (2).

Petric, J. F. (2004). First Timers‟ and Repeaters‟ Perceived Value. 43 (29-38).

PETRICK, J. F. (2004). First Timers‟ and Repeaters‟ Perceived Value. Journal of Travel Research, 43, 29-83.

Po-Tsang Chen, H.-H. H. (2009). How determinant attributes of service quality influence customer perceived value:

An empirical investigation of the Australian coffee outlet industry.

Rintama¨ki, T., Kanto, A., Kuusela, H., & Spence, M. T. (2006). Decomposing the value of department store

shopping into utilitarian, hedonic and social dimensions. International Journal of Retail & Distribution

Management, 34 (1), 6-24.

Saleha, F., & Ryanb, C. (1992). Client perceptions of hotels: A multi-attribute approach. Tourism Management, 13

(2), 163-168.

ijcrb.webs.com



DECEMBER 2012

VOL 4, NO 8

Sweeney, J. C., & Soutar, G. N. (2001). Consumer perceived value: The development of a multiple scale Item.

Journal of Retailing, 77 (2)

Wilkins, H., Merrileesa, B., & Heringtona, C. (2007). Towards an understanding of total service quality in hotels.

International Journal of Hospitality Management, 26 (4), 840-853

Woodruff, R. B., & Gardia, S. (1996). Know Your Customer: New Approaches to Customer Value and Satisfaction.

Blackwell Publishers Ltd. .

Woodruff, R. (1997). Customer value: The next source for competitive advantage. 25 (2).

Zeithaml, V. A., Berry, L. L., & Parasuraman, A. (1996). The Behavioral Consequences of Service Quality. The

Journal of Marketing, 60 (2), 31-46.

Zeithaml, V. (1988). Consumer Perceptions of Price, Quality, and Value. 55 (2-22)

Documents

relationship between service quality, perceived value, satisfaction