SERVQUAL Model: Service Quality of Lafuma Malaysia

B0602167 5/7/2010

Acknowledgement
Firstly I would like to thank God Almighty who have blessed me and given me the strength and determination when everything else was going wrong. Secondly, I would like to thank Mr. Ng Hock Soon for giving me the opportunity to work in Lafuma Malaysia and also kind enough to provide me with the details to perform this research project. Special thanks would go to Ms Rosalind for guiding and giving advices on completing this research project. As my supervisor, she has put in a considerable effort to see me complete this research project. Without her, this project would not be completed as intended. My peers in the programme, Abdifatah, Suryo Sentoso and etc will always be remembered for giving the morale support. Without them, doing this project would be dull and excruciating.

Abstract
Since its introduction, SERVQUAL has been one of the most widely used methodological tools used to measure the service quality of an industry. It measures the service quality of an industry based on Customers expectations and perception on the service that has been rendered to them. A score is derived from the differences of the expectations and perception and it would give the management an idea on the customers feedback. The use of SERVQUAL has been debated whether it would be the ultimate tool for measuring service quality. Many scholars and researchers have found the model flawed due to various reasons. They have proposed several amendments to the model itself. None the less, this model can still applicable in small-scale researches. The research topic on Lafuma Malaysias service quality with the model would certainly be useful to give a clearer picture to the management on its service quality.

Table of Contents
Table of Contents................................................................................................... 4 CHAPTER 1: Introduction........................................................................................6 1.1 Research Subject...........................................................................................7 1.2 Research Question & Objectives....................................................................9 1.3 Literature Review........................................................................................10 1.3.1 Service Quality......................................................................................10 1.3.2 Customer Service Strategy....................................................................17 1.3.3 Summary of Literature Review..............................................................20 1.4 Theoretical Framework................................................................................21 Chapter 2: Methodology.......................................................................................22 2.1 Research Methodology................................................................................23 2.1.1 Primary data..........................................................................................23 2.1.2 Secondary Data.....................................................................................27 2.2 Limitations of Research...............................................................................28 2.2.1 On Reliability ........................................................................................28 2.2.2 On Validity.............................................................................................28 2.2.2 On low response rate.............................................................................29 Chapter 3: Findings and Analysis..........................................................................30 3.1 Data Analysis of Survey...............................................................................31 3.1.1 Respondents according to their nationality...............................................31 3.1.2 Respondents according to frequency of visit.........................................32 3.1.3 SERVQUAL score on the individual basis................................................34 3.1.4 SERVQUAL Score of each statement......................................................36 3.1.5 SERVQUAL score based on each Dimension...........................................38 3.2 Interview Sessions.......................................................................................40 3.2.1 Interviewing Respondent #2................................................................40 3.1.2 Interviewing Mr Ng Hock Soon, Director of Lafuma Malaysia..................44 Chapter 4: Conclusions ........................................................................................47 4.1 General Conclusion......................................................................................48 4.2 Recommendation........................................................................................49 4

Bibliography......................................................................................................... 50 Appendixes...........................................................................................................51 Appendix 1: Data Computation of Questionnaire...............................................52 Appendix 2: Nationality of Respondents............................................................62 Appendix 3: Overall SERVQUAL Score................................................................63 Appendix 4: Pictures of Store............................................................................64 Appendix 5: SERVQUAL Questionnaire in English...............................................66 Appendix 6: SERVQUAL Questionnaire in Bahasa Malaysia (Malay Language)....72

CHAPTER 1: Introduction

1.1 Research Subject

Customer service has been one of the most important elements that businesses have to take into serious consideration. Regardless of the nature of the business, firms that provide good customer service would create customer loyalty and retention. This means that satisfied customers would patronize the same shop whenever they need to make a purchase the product or services offered by the shop. In return, firms would have a set of recurring customers. There is a positive impact on the business performance of the firm that provides good customer service. According to Zairi (2000), satisfied customers would share their positive experience with 5 or 6 people whilst dissatisfied customers would share their disastrous experience with 10 people. Thus, it would be fair to say that providing good customer service would generate more customers and more sales. Coldwell (2001) states that very satisfied customers would contribute 2.6 times more revenue than somewhat satisfied customers and 17 times more than dissatisfied customers. Lafuma Malaysia is without exception a business that needs to adhere to the importance of providing good quality of customer service. Lafuma is a French brand that specializes in outdoor equipment and apparels. The Lafuma brothers first developed their own rug sack (backpack) back in the 1930s and since then the French brand has expanded their operations worldwide. The outdoor industry is a very competitive industry with various brand offering homogenous products. Current brands that that challenges Lafuma include The North Face, Columbia Sportswear, Salomon, Patagonia and etc. Sensing there is a development opportunity of the outdoor industry; Yellowstone Sdn Bhd brought the Lafuma brand into Malaysia and opened its first shop named Lafuma Malaysia in late 2007.

So far there havent been any conducted studies to assess the outdoor apparels and equipment industry in Malaysia. However according to the Director of Yellowstone Sdn Bhd., Mr. Ng Hock Soon, the outdoor apparels and equipment industry in Malaysia is relatively small but slowly developing. Currently there are not more than 10 outdoor shops in Malaysia that carries full range of outdoor equipment and apparels. Therefore, it would be fair to say that the outdoor apparels and equipment industry is oligopolistic. Despite having a niche and being an oligopoly player, Lafuma still needs to provide quality service to maintain or improve its market positioning. The few competitors to Lafuma Malaysia in Klang Valley are Outdoor Centre in Ampang, Corezone in Petaling Jaya SS2 and World of Outdoor in The Gardens Kuala Lumpur. In this research proposal, I would be employing the SERVQUAL model to assess the service quality of Lafuma Malaysia and also identify the strategies that are currently used by the management to improve its customer service. Through my research, I hope I could identify the short comings of the customer service strategy employed and present recommendations if necessary.

1.2 Research Question & Objectives

The purpose of this research is to identify what are the customers expectations of service quality of the outdoor industry as a whole and what they perceived of Lafuma Malaysias service quality. This research would also investigate the effectiveness on the strategies the management is adopting Research Questions: What is the service quality expected and perceived by the customers of Lafuma Malaysia? What is Lafuma Malaysias current customer service and business strategy in response to the SERVQUAL model? How can Lafuma Malaysia further improve its Customer Service? Research Objectives: To measure the service of quality provided by the management to its customers using the SERVQUAL model To investigate Lafuma Malaysias current customer service and business strategy in the context of the 22 statement and 5 dimensions of the SERVQUAL model To analyse how Lafuma Malaysia can improve their customer service and business strategy based on the results of the SERVQUAL questionnaire.

1.3 Literature Review

1.3.1 Service Quality Service quality is an issue in America 1980s as it has transformed itself from a manufacturing and agricultural-based economy to a service economy. This has prompted Zeithaml, Parasuraman & Berry to conduct an exploratory research study on the subject of service quality in 1983. Phase 1 of their research was an extensive qualitative study of service customers and service-company executives that resulted in the development of a model of service quality. In phase II, by using large-scale empirical study that focused on customers perspective of the service quality model, they have developed SERVQUAL - a methodology for measuring service quality. In this phase, they also refined the conclusion of their research concerning the dimensions customers use to judge service quality. Phase III of their research was an empirical study that focused on the service providers in sectors such as appliance repair, credit cards and etc. Phase IV would centre on the topic of how customers create their expectations and key influences that affect that process.

In a competitive playing field, service quality would be a crucial success factor for firms to gain a competitive edge over competitors. The SERVQUAL model is one of the popular tools which are commonly used to measure the level of service quality. Service by itself is intangible, heterogeneous, perishable and inseparable and service quality would be a more elusive and abstract construct than product quality. Grnroos (1984) defines perceived service quality as the outcome of an evaluation process where the consumers would compare their expectations against actual performance of the service provided. Parasuraman et al (1990) would explain the difference between expected service and perceived

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service as a Gap. Parasuraman et al explains that customers perceptions of service quality are influenced by 5 gaps that are: 1. Knowledge Gap: reflection on the difference between customers expectations and the firms perception of those customer perceptions. 2. Standards gap: pertaining to the difference between the firms

perceptions of customers expectations and the service standards it sets. 3. Delivery gap: difference between the firms service standards and the actual service it provides to customers 4. Communication gap: difference between service delivery and the firms communication programme promises. 5. Service Quality Gap: difference between customer expectations and perceptions.

The SERVQUAL instrument is based on the 5th gap (service quality gap) and Parasuraman et al explains that there are 10 dimensions of service quality: Dimension 1. Tangibles Definition Appearance equipment, 2. Reliability 3. Responsiveness 4. Competence 5. Courtesy 6. Credibility 7. Security 8. Access 9. Communication of physical personal facilities, and promised

communications material Ability to perform the

service dependably and accurately Willingness to help customers and provide prompt service Possession of the required skills and knowledge to perform the service Politeness, respect considerations and friendliness of contact personnel Trustworthiness, honesty of the service provider Freedom from danger, risk or doubt Approachability and east of contact Keeping customers informed in language they can understand and listening to them 11

10.Understanding the customer

Making the effort to know customers

and their needs Table 1: Ten Dimensions of Service Quality. Source: Zeithaml, Parasuraman and Berry (1990)

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After many trials and errors, Parasuraman et al has condensed and combined the ten dimensions stated in diagram 1 into five dimensions which are assessed by 22 items in the questionnaire. The new five dimensions are: Previous Dimensions 1. Tangibles 2. Reliability 3. Responsiveness 4. Competence 5. Courtesy 6. Credibility 7. Security 8. Access 9. Communication 10.Understanding the customer Table 2: Correspondence between New Dimensions Tangibles Reliability Responsiveness

Assurance Empathy SERVQUAL dimensions and Original ten

dimensions for Evaluating Service Quality Source: Zeithaml, Parasuraman and Berry (1990)

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1.3.1.1 Using SERVQUAL Model Since its introduction, the SERVQUAL model has been used as a diagnostic methodology for investigating a firms service quality shortfalls and strengths. Ladhari (2009) has provided a list of studies that has used the SERVQUAL model in various service industries: Industry Healthcare Banking Authors Carman (1990); Headley &

Miller (1993); Lam (1997) Mels et al (1997); Lam (2002);

Zhou (2002) Fast food Lee & Ulgado (1997) Telecommunications Van der Wal et al (2002) Retail chains Parasuraman et al (1994) Information systems Jiang et al (2000) Library services Cook & Thompson (2000) Table 3: Researches that utilize SERVQUAL Source: Ladhari (2009)

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1.3.1.2 Limitations of SERVQUAL model Despite its widespread use, the SERVQUAL model and drew criticisms from other researchers. There are debates on whether the SERVQUAL model should be regarded as the ultimate tool in measuring the service quality of a firm. Buttle (1994) highlighted several shortcomings of the SERVQUAL model in terms of its Theoretical and Operational aspect. In his published work in 1996, he is cited:

Paradigmatic objections: SERVQUAL is based on a disconfirmation paradigm rather than an attitudinal paradigm; and SERVQUAL fails to draw on established economic, statistical and psychological theory.

Gaps model: there is little evidence that customers assess service quality in terms of P E gaps. Process orientation: SERVQUAL focuses on the process of service delivery, not the outcomes of the service encounter.

Theoretical Aspect

Dimensionality: SERVQUALs five dimensions are not universals; the number of dimensions comprising SQ is contextualized; items do not always load on to the factors which one would a priori expect; and there is a high degree of inter-correlation between the five RATER dimensions. Expectations: the term expectation is polysemic; consumers use standards other than expectations to evaluate SQ; and SERVQUAL fails to measure absolute SQ expectations.

Operational Aspect

Item composition: four or five items cannot capture the variability within each SQ dimension. Moments of truth (MOT): customers assessments of SQ may vary from MOT to MOT Polarity: the reversed polarity of items in the scale causes respondent error

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Scale points: the seven-point Likert scale is flawed. Two administrations: Variance extracted: two the administrations over SERVQUAL of the instrument cause boredom and confusion. score accounts for a disappointing proportion of item

variances. Table 4: Theoretical and Operational Criticism of SERVQUAL; Source: Buttle (1995)

Ladhari (2009) has also highlighted the problems of SERVQUAL through his compilation of research works. He noted: Aspect The use of difference scores The reliability of the model Remarks Consumers have a tendency to give higher score to expectations Usage of Cronbachs coefficient The convergent validity showed that alpha the

SERVQUAL model is unreliable For some studies, the factor-loading pattern of SERVQUAL demonstrated weaknesses in the convergent validity of the model. Some studies require more than 5 dimensions to measure validity the of gap the score the Poor predictive

The discriminate validity

Predictive

validity

of

instrument The emphasis on process

SERVQUAL scale for some studies Does not include the outcome and service encounter (technical

dimension) The hierarchical nature of service- Should include sub-dimensions to quality constructs form customers perception of service providers performance The use of reflective scales Should use formative scales The applicability of a generic scale Unable to apply the model as a in all settings generic scale in all settings The applicability of SERVQUAL to Only 3 dimensions are applicable to the online environment measure online services The applicability of SERVQUAL in Translation of the model into other 16

different cultural context

languages

could

result

in

measurement error due to different terminology Table 5: Limitations on the aspect of SERVQUAL model; Sources: Ladhari (2009) 1.3.2 Customer Service Strategy 1.3.2.1 Developing Customer Service Strategy Most marketing or business gurus strongly emphasize on the need to retain and build customer loyalty. Firms would need to develop a customer service strategy to gain a competitive edge over opponents. Berman & Evans (2004) suggest that retailers would need to consider the following issues before initiating the strategy: 1. What customer services are expected and what customer services can augmented for a particular retailer? 2. What level of customer service is appropriate to complement a firms image 3. Should there be a choice of customer services? 4. Should customer service be provided for free? 5. How can a retailer measure the benefits of providing customer services against their cost? 6. How can customer services be terminated? There are costs whenever a firm provides customer service. The cost of offering the customer service is reflected by the value of the customer service to the customer.
Cost of offering the customer service High Value of the High Custo mer Servic e to Low Patronage Builders High-cost activities that are the primary factors loyalties behind (e.g. customer registry) Disappointers Low Patronage Solidifiers The 'low-cost little things' that increase loyalty (e.g. courtesy, recommendation)

transaction speed, credit, gift Basics

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Expensive activities that do no real the Custo mer good (e.g. for weekday two-earner deliveries families)

Low-cost 'naturally absence

activities

that

are They

expected'. could

don't build patronage but their reduce patronage (e.g. free parking)

Table 6: Classifying Customer Services; Source: Berman & Evans (2004)

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1.3.2.2 Gaps model for improving retail service quality The Gaps model that was presented by Parasuraman et al mentioned that the first four gaps, namely knowledge gap, standards gap, delivery gap and communication gap could be internally controlled by the firm. Thus, the firm could take initiatives to narrow the gap by various methods. Levy & Weitz (2009) suggested a few factors listed in diagram 6 that firms can consider to implement in efforts to reduce the gaps Gaps Knowledge Examples of actions that can be taken Comprehensive studies Standards Delivery Communication Gauging satisfaction with individual transactions Customer Panels and Interview Interacting with customers Customer Complaints Using Technology Feedback from Store Employees Using Customer Research Commitment to Service Quality Defining the role of Service Provider Setting Service Goals Measuring Service Performance Giving information and Training Providing instrumental and emotional support Improving internal communications Empowering store employees Providing incentives Developing Novel Solutions for improving service Realistic Commitments

Managing Customer Expectations Table 7: Factors that could reduce the gap; Source: Levy & Weitz (2009)

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1.3.3 Summary of Literature Review Author Zeithaml, Parasurama n & Berry Title Findings Delivering Quality Development Service: Balancing Gap Customer Perceptions Ladhari Expectations A review of years SERVQUAL Grnroos research A service quality Service quality model and its marketing implications Shahin SERVQUAL Model of Quality Gaps and Logical Service improvement integration prioritized Levy & Weitz Retailing Management Berry Evans & Retailing Strategy of service Methods narrow gap model Strategic Customer Strategic Service approach manage customer service to to the and 20 Assessment of the Highlights the of SERVQUAL model limitations SERVQUAL model Highlights some important dimensions of service quality Identifies and more gaps of Conclusion of Instrument to and measure service quality

SERVQUAL model

quality dimensions Gap model

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1.4 Theoretical Framework

Moderating Variable WORD OF MOUTH; PERSONAL NEEDS; PAST EXPERIENCE; EXTERNAL COMMUNICATIONS

RELIABILITY EXPECTED SALES PERCEIV ED SERVICE QUALITY

ASSURANCE

TANGIBLES PERCEIVE D SERVICES

RESPONSIVENES S

EMPATHY

Independent Variable

Intervening Variable

Dependent Variable

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Chapter 2: Methodology

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2.1 Research Methodology

This research is built on the basis as an explanatory study meant to explain the relationship between the service quality expected by customers and the service quality that is perceived. This research was carried out as a single

cross-sectional on the basis of the information was collected at a specific time period of 3 months. Through this research, the relationship on both variables was identified and the information collected would be usable for Lafuma Malaysia to improve or sustain its current customer service management strategy. The research design of this topic utilised mixed method
for data collection. Both quantitative and qualitative data collection technique was employed. This was done as part of the triangulation to cross-check and verifies the reliability of the research. 2.1.1 Primary data Both qualitative and quantitative data would be collected as no research has been done on Lafuma Malaysia before. In this section, interview sessions and survey would be conducted to collect the necessary information.

2.1.1.1 Participant Observation The researcher has been working at Lafuma Malaysia since June 2009 on a part-time basis. The researcher has access to information, customer observation and conduct random unstructured interviews to understand the service quality of Lafuma Malaysia. Some information has been acquired prior to the

commencement of this research would be useful for interpretation and analysis of the data collected.

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2.1.1.2 Structured interview (Qualitative) Structured interview is conducted when it is known at the outset what information is needed. This research is based on the SERVQUAL model, and the researcher feels that gaining additional information in regard to the model would be useful. Therefore structured interview was carried out for this research as well. The structured interview questions are based on SERVQUALs 5 dimensions, namely Reliability, Assurance, Tangibility, Empathy and Reliability. The interview would be given to the customer and also to the Director of Lafuma Malaysia. The interview given to a randomly selected customer was meant to obtain additional information, particularly the customers perspective towards the 5 dimensions apart from just rating it in the SERVQUAL questionnaire. The researcher was interested to know what additional comments the customer could provide towards each statement and dimension. The researcher would also like to hear the customers viewpoint on what Lafuma could do to improve its service quality based on each question and dimension. The interview given to the director of Lafuma is to obtain information on the current strategies that are employed in relation to each statement raised in the SERVQUAL questionnaire. The information collected would be used to compare and contrast with what the customers expect and how they perceived it. It would also serve as a basis whether there is a need for Lafuma Malaysia to improve its services.

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2.1.1.3 Survey (Quantitative) A survey was conducted to collect information on the service quality of Lafuma Malaysia. The sample population would be the customers of Lafuma Malaysia and the sample size would be limited to 100. The main reason for choosing this sample size was because surveys are time consuming. The time span to complete this research is limited to 3 months (from February to May). Furthermore, the average number of customers patronizing Lafuma on a daily basis is estimated to be five. Thus, my target sample size would be set at only 100 to complete my research.

Judgemental sampling was employed as the sampling method for this research. Malhotra et al (2008) explains judgemental sampling as a nonprobability convenience-sampling technique which the population elements are selected based on the judgement of the researcher. This means that the researcher would choose the samples that he believes are appropriately representing the population based on certain elements.

For this research, the questionnaire was distributed to customers who have interacted with the employees or made a purchase at the shop. This was done because if the customers have interacted with the employees or made a purchase at the shop, only then can customers able to answer the dimensions set in the SERVQUAL questionnaire. questionnaire. If not, the customer may get confused over the

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2.1.1.4 Survey Questionnaire The design of the questionnaire is based on the SERVQUAL model designed by Parasuraman et al. As mentioned in the Literature Review section, the SERVQUAL questionnaire has a 22-item that is built on 5 dimensions. The SERVQUAL model is meant to measure the service quality expected by customers against what they perceive on the interval scale of 1 to 7 (where 1 would be strongly disagree and 7 being strongly agree).

The scale point would be understood as approval points on how good Lafuma Malaysia is in dealing with each statement. Customers would then give a weightage point on each dimension according to how important is it to them. The weight will be measure on a score of 100 points allocated by customers among the five sets of features. The Gap Score for each statement will be calculated through the subtraction of the Expectation score from the Perception score. An average (or mean) is obtained from the Gap score from the statement for each dimension. Then based on the weightage given by the customer for each 5 dimensions, the SERVQUAL score is obtained by multiplying the mean score and weightage for each dimension.

Apart from just the SERVQUAL questions, some basic demographic questions were added as well. I would need to collect demographic information to assess customers frequency to Lafuma Malaysia and analyse the background of the customers.

For the questionnaire to maintain its reliability, the languages of the questionnaires that have been distributed are in Bahasa Malaysia, Malaysias 26

official language and in English. The Bahasa Malaysia (or Malay Language) version of the questionnaire is given to Malaysian customers who may not have a good command of English. The Malay language version is prepared so that the customers could understand better of the statements and to avoid confusion. Malaysian customers are given the choice to do the questionnaire in either languages and the English version would be given to foreign customers. Samples of the SERVQUAL questionnaire in both languages are attached in the Appendix section. 2.1.2 Secondary Data The secondary data that will be used for this research are already mentioned in the Literature Review. The works of Parasuraman et al, Grnroos, and Ladhari is meant to give me a clear sight on how to apply the SERVQUAL model. Shahin (2005) has further introduced more gaps to the existing Gap model. As Lafuma Malaysia is a retailing business, Berry & Evans and Levy & Weitz are scholars who have extensive knowledge in the retailing industry and the strategies that are published by them should be put under consideration whether it is applicable in Lafumas context.

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2.2 Limitations of Research

2.2.1 On Reliability Ladhari has already highlighted that the SERVQUAL model may not be the ultimate model to measure the service quality due to some limitations. There are reliability issues regarding the model itself depending on the context of the research. Different researches have different Cronbach Coefficient values and thus its reliability is debatable. 2.2.2 On Validity During the sampling process, the validity of the questionnaires could be biased as there are a total of 50 questions or more that respondents may need to answer. This amount may hinder the respondents patience and focus to answer the questionnaire truthfully. Furthermore, each respondent may have different interpretation of the 22 items.

Some of the questions may prove to be ambiguous to the respondents. They may not fully understand what each statement implies. Sometimes the researcher would need to explain each statement to the respondents, particularly the section where respondents are required to fill up the weightage score. Often would the respondents get confused and would use a ranking system instead. Only after explanation only could the respondents provide the accurate answer. However, guiding the respondents on the survey would create participant biasness. As the observer is present, the participants may be pressured to give a more favourable respond, particularly at the perceive section of the

questionnaire.

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2.2.2 On low response rate The sample size that was initially set was 100 but the response rate was only 49% (49/100). Some customers are not interested in doing the survey. There may be various reasons to that. One of the possible reasons is that customers are in a hurry to leave once they have fulfilled their purpose of visit to the shop. Some of these customers are double-parking due to lack of parking spaces in Bangsar Baru. Thus to avoid traffic summons, they would like to leave soonest possible. Another possible reason is that customers are de-motivated when they realise that they have to do a 52-question questionnaire. They may not have the patience to do the questionnaire and thus reject the researchers request.

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Chapter 3: Findings and Analysis

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3.1 Data Analysis of Survey 3.1.1 Respondents according to their nationality

Table 8: Respondent Nationality Nationali ty Malaysia n German French Italian Finnish Russian Spanish Danish Hungaria n Swedish Portugue se Total Frequen cy 22 7 4 2 2 2 1 3 2 2 2 49 Percentage (%) 45% 14% 8% 4% 4% 4% 2% 6% 4% 4% 4% 100%

This section analyses the nationality of the respondents. Table 8 shows the nationality of the 49 respondents that participated in the survey. Among the respondents, Malaysians were the most that took the survey, with 22 in total. Malaysian customers constitute 45% of the survey whilst the remaining 55% were foreign customers. The second highest respondents were Germans that

constituted 14% and then followed by the French with 8%. The least were the Spanish with only 1 respondent that represented 2% of the sample size. Mr. Ng estimates that the ratio of Malaysian customer to foreign customers is around 50:50. Therefore, it would be fair to state that the samples would be a rough representation of the customers nationality on an actual basis.

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3.1.2 Respondents according to frequency of visit Table 9: Frequency of visit to Outdoor Shops & Lafuma Malaysia Times of Visit Once a week Once a month Few Times a month Once in Few months Only when needed Outdoor Shops 0 4 3 10 32 Percentage 8.16 6.12 20.41 65.31 N/A 1 00.00 Lafuma Malaysia 0 4 3 10 23 9 49 Percenta ge 8.16 6.12 2 0.41 4 6.94 1 8.37 10 0.00

First Time Visit to N/A Lafuma 49

This section analyses the time frame of when customers visit either Outdoor shops or Lafuma Malaysia. As shown in Table 9, it is noted that majority of the customers would visit to both Outdoor Shops & Lafuma Only when needed. This frequency explains that customers would only visit either Outdoor Shops or Lafuma when they need to purchase certain items and they have no intention of window shopping. For example, Mr X would be going for a hiking trip to Mount Kinabalu next month and he would like to purchase the essential hiking and trekking apparels and equipment. The second highest frequency of visit would be once in few months. These customers would be only visit either Outdoor shop or Lafuma once a while to have a look if there are any new promotions or new items available in the shop. According to Mr. Ng, the customers that come to Lafuma Malaysia on a monthly basis or once a month are usually paying Mr Ng a social visit. They are either the 32

friends of the director or regular customers who come for chit-chats with the director. He added that as a player of the Outdoor Industry, it is sometimes important to gain knowledge through customers who are thrilled to share their outdoor adventure experiences. Table 9 also shows that 18.37% of the customers who took the survey are on their first visit to Lafuma Malaysia. These are outdoor enthusiast who have recently heard or knew about Lafuma Malaysia. Mr. Ng explains these customers are more familiar with the other Outdoor Shops i.e. Outdoor Centre and Corezone. These two shops have longer establishments than Lafuma Malaysia. They only got to know about Lafuma by word of mouth or by coincidence when visiting Bangsar Baru. From the data collected (shown in appendix 1), the time of visit to outdoor shops is the same as Lafuma Malaysia. It can be speculated that if customers visit other outdoor shops, they would also visit Lafuma Malaysia at the same period of time.

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3.1.3 SERVQUAL score on the individual basis Table 10: Individual SERVQUAL Score Weight ed Score -0.08 1 0.76 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 0.05 -0.45 0.23 0.11 0.63 0.61 -0.83 -0.05 0.30 0.58 0.05 -0.55 0.15 -0.10 0.33 0.08 -0.41 0.29 -0.03 -0.04 -0.15 0.00 0.09 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 26 0.24 Standard Deviation 0.08 -0.42 0.35 0.02 0.03 -0.01 -0.23 -0.04 -0.04 0.19 -0.09 -0.53 0.28 0.43 0.40 0.13 -0.54 0.37 -0.34 0.13 -0.13 -0.39 5 Weight ed Score -0.61 Median 3 0.3 0.0 Mean 2 0.0

Subje ct #

Subje ct #

This section analyses the SERVQUAL Score of each customers individual ratings on the service quality of Lafuma Malaysia. Every customer gave their own score for each statement and also different weightage score based on how they feel. The table shows that the highest score that Lafuma received was 0.76 by 34

Respondent 2 and the lowest was -0.83 by Respondent 9. The scores signify customers satisfaction. A positive score would imply that Lafumas Service Quality is above customers expectations while a negative score would mean that the service quality is sub-standard. Thus, the perceived service quality for Respondent 2 is higher than his/her expectation while Respondent 9 perceives it as below his/her expectation. The mean score for this individual basis is 0.02, Median at 0.03 and the Standard Deviation is 0.35. The mean score shows that in general, the service quality that Lafuma practices has met customers expectations. The median shows that the score between the negative feedback and positive feedback is at 0.03 and the deviation from the mean is 0.35.

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3.1.4 SERVQUAL Score of each statement Table 11: SERVQUAL score for each statement Mean Expectati on 6.59 6.45 5.71 5.88 6.02 6.16 6.55 6.31 5.90 6.43 6.20 6.33 6.73 6.69 6.86 6.35 Mean Perceptio n 6.14 6.18 6.24 5.67 6.45 6.00 6.20 5.84 6.39 6.18 5.92 6.51 5.43 6.80 6.90 6.61 6.78 6.41 6.37 6.47 6.65 6.86

Service Quality Attribute # 1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 Modern-looking equipment Appeal of physical facilities Employee appearance Appeal of communication Materials Time performance Sincerity in solving problems Getting right the first time Service performance Error-free records Informing services will be performed Prompt Services Helpful Never too busy to respond Instilling confidence Feeling safe with dealings Consistent courtesy

SERVQU AL Score -0.45 -0.27 0.53 -0.20 0.43 -0.16 -0.35 -0.47 0.49 -0.24 -0.29 0.18 -1.31 0.10 0.04 0.27 -0.12 -0.22 0.29 0.22 0.02 0.06

Employee Knowledge 6.90 Shop giving individual attention 6.63 Convenient store hours Employee giving personal attention Having Customer's best interest Understanding needs of customers 6.08 6.24 6.63 6.80

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This section analyses how customers rate each of the SERVQUAL questionnaire statements. This section also examines to the importance of each statement in the case of Lafuma Malaysias service quality. Table 11 shows the mean expectation and mean perception and the un-weighted gap score for each statement. For the expectation, Statement 17 (6.90), has the highest mean of expectation followed by Statement 15 (6.86) whilst Statement 3 (5.71) has the lowest expectation. Meanwhile for the perception section, Statement 15(6.90) has the highest mean perception, followed by Statement 22 (6.86) whilst Statement 13 (5.43) has the lowest mean perception. For the SERVQUAL score section, Statement 3(0.53) scored the highest followed by Statement 9(0.49) whilst Statement 13(-1.31) scored the lowest. Statement 21 has the least gap score of (0.02) It can be deduce that with an expectation point of 6.90, employee knowledge is an important element to the 49 respondents. This mean score shows that most respondents strongly agree that employees in excellent Outdoor Shop will have the knowledge to answer customers' questions. Most customers would strongly agree that they feel safe with the transaction with Lafuma Malaysia.

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3.1.5 SERVQUAL score based on each Dimension Table 12: Weighted SERVQUAL score based on each dimensions Expectations Dimensions Tangibility Reliability Responsiven ess Assurance Empathy Total 1207 1516 1259 1313 1587 Mean 6.16 6.19 6.42 6.70 6.48 Perceived Total 1188 1513 1178 1327 1605 Mean 6.06 6.18 6.01 6.77 6.55 Mean Weighta ge 0.12 0.14 0.18 0.36 0.21 1.00 Weight ed Mean -0.012 -0.002 -0.073 0.026 0.015 -0.045

Gap Score -0.10 -0.01 -0.41 0.07 0.07 Total

This section analyses the service quality of Lafuma Malaysia based on each of the SERVQUAL dimensions. Assurance is rated with the highest-mean expectation of 6.70 followed by Empathy of 6.48. This goes the same for its Perceived score for both dimensions with 6.77 and 6.55 respectively. The mean weightage value is obtained from the scores each customer has rated for each dimension. The Gap score for each dimension is multiplied with the mean weightage to obtain a weighted mean. The highest mean weightage of 0.36 is Assurance followed by Empathy with 0.21. The least would be Tangibility with 0.12. The mean weightage score shows that customers would emphasize more on Assurance and Empathy. The remaining dimensions are seen as slightly less important. The weighted mean is then added up together and the SERVQUAL score that Lafuma Malaysia achieved was -0.045. This figure signifies that as an overall, Lafuma Malaysia has done well to provide the proper service quality. Customers feel that what they perceive is up to their satisfaction. Despite a negative score of 38

0.045, the sum is negligible as it is insignificant to claim that Lafuma Malaysia has failed to meet customers expectations.

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3.2 Interview Sessions

3.2.1 Interviewing Respondent #2 Respondent #2 who identifies himself as Mr. Chan is a Malaysian customer who visits Outdoor Shops and Lafuma Malaysia only when he needs to. He is a close friend of Mr. Ng and also a regular customer. He is an outdoor enthusiast who travels globally for outdoor activities such as Mount Kilimanjaro, Mount Kinabalu, the Himalayas and etc. His inputs and comments about Lafuma Malaysia have contributed greatly to this research. On Tangibility Mr Chan comments that Lafuma Malaysia has impressive modern-looking equipments on display. He adds that the apparels on display by the mannequins are really impressive and very technical. It makes him feel that the shop is serious in providing customers the right equipment and apparels. The items are properly categorized and there are many interesting accessories such as camping stove, water filter, headlamps and etc in the shop. They also have quick-dry towels that are convenient when travelling. He does not expect the employees to have proper uniform but does expect a certain degree of neatness, as long as it is presentable. The notice board located outside of the shop provides some useful information regarding upcoming trips or events. On Reliability Mr Chan feels that Lafuma Malaysia is rather efficient at carrying out what they promise to do depending on the situation. He gave an example of a Suunto watch he bought some time ago. The strap of the watch was damaged after wear 40

and tear and he asked Mr Ng to replace for him from the distributor. Mr Ng gave no promises when it would be done but he would inform him once he can confirm with the distributor of the watch. Once it was confirmed, Mr Ng did inform him when it would be due ready. Apart from that, the services delivered by Lafuma Malaysia are on time.

On Responsiveness So far Lafuma has been good in delivering their services. When he visits

Lafuma, Mr Ng or any other employees would be there to service him. The services rendered are up to satisfactory. However, there are times when employees would not be able to service him at all. He comments that this is understandable because sometimes during his visits, there were many other customers and the employees are busy servicing other customers. Thus he cant expect himself to be entertained 100% but he says he is not offended by it and still happy with the services. On Assurance He feels that Lafuma employees are well-trained and knowledgeable. He has consulted Mr Ng and the other employees many times on the equipment and apparels. So far he is impressed with the information provided by Lafuma Malaysia. All the things that are recommended by the shop are indeed useful. For example the Micro-fleece that he was recommended for his Himalayas trip kept him warn and comfortable. This has made him felt confident with Lafumas

products. He has no worries with the dealings or transactions at Lafuma. He adds that Lafuma employees have been fair and honest when recommending the right items to buy. He feels welcomed every time he steps into the shop as he feels that 41

the employees and Mr Ng himself are friendly. He feels that this is the most important dimension as he feels that most customers, like himself are ignorant towards the technical specification of outdoor products and they would have rely on the advice of the employees when purchasing items.

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On Empathy: Mr Chan believes that so far the employees have been sincere to him and

took no advantage of his ignorance. When he needed the proper advice, Lafuma has given him the right information. He is very satisfied with the attitude of the employees. He finds that the operating hours of Lafuma are convenient to him. He is able to visit Lafuma after his working hours, during weekends and even on public holidays

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3.1.2 Interviewing Mr Ng Hock Soon, Director of Lafuma Malaysia Mr Ng has been the director of Yellowstone Sdn Bhd, the owner of Lafuma Malaysia since its inception back in late 2007. There are 3 shareholders of Yellowstone Sdn Bhd and Mr Ng is one of them. His other two partners are dormant shareholders thus giving him the autonomy for decision making. Mr Ngs mission is making Lafuma the most recognisable brand in Malaysia and his vision is to promote outdoor activities to all Malaysians and Foreigners alike and let them feel and appreciate the wonders of nature. On Tangibility The apparels and equipment of Lafuma Malaysia are updated twice a year according to the summer and winter fashion, designed by the French and Japanese design team. The regional headquarters would send in the catalogue 8 months before the launch of each season to all distributors. Mr Ng would need to decide carefully which new items that would appeal to the Malaysian market. Some designs are so unique that majority of the Malaysians may not accept the design. Mr Ng would also do minor renovations to update the image of the shop. Mr Ng does not emphasize much on the employee uniforms. He believes that the employee should wear casually to reflect free and easy of the outdoor lifestyle. The notice board of Lafuma will be updated if there are any new upcoming Outdoor events such as hiking & trekking trips. On Reliability Lafuma would try its best to fulfil customers needs and wants. Sometimes it is difficult to let the customer know on the spot when things can be done when considering other various factors. Relating to Mr Chans case on the Suunto watch, 44

it is the distributors (Suuntos distributorship is by a different company) responsibility and Lafuma merely acts as a middle-man. Lafuma would however, try to get the distributor to do the necessary repairs soonest possible. All the information of stock, membership and sales data are stored in the computer and are backed-up every day just in case of computer technical failure. On Responsiveness All employees are taught from the day they start working in Lafuma that they are required to serve all customers that enter the shop without prejudice of favouritism. Some customers that enter the shop may not be purchasing items but everyone is taught and expected to serve the customers. All new employees need to undergo 1 month of probation period before being hired to see if they are suitable to work with Lafuma Malaysia. When asked on how many employees currently does Lafuma has, he responded that including him, there are only 4 employees. He explains that good employees are hard to find. It is hard to find employees who have both outdoor experience & knowledge and have the right interpersonal skills needed to be a salesperson. The other 3 employees (including the researcher) are only on part-time basis. Sometimes Mr Ng himself needs to manage the shop alone. He admits that this has reduced his response rate to each customer especially when there is a large crowd. However, he believes it is still manageable. On Assurance Employees that are selected to work in Lafuma are based on their background experiences. Priority is given to those who have Outdoor knowledge and experiences. However, those who are have working experiences as sales person are also welcome to apply for work provided they have the right attitude. Training is provided on the shop where Mr Ng would educate them on the 45

technical aspect of each and every item. Mr Ng explains that technical knowledge is a crucial part of the trade. If the employees fail to understand the needs of the customer or recommending the wrong equipment, the consequences can be fatal. For example if a customer is planning to go hiking at Himalayas at the temperature of minus 15C, he would need a proper fleece that could accommodate that temperature and a wind-proof jacket. If not, the customer may face the risk of hypothermia. He added that sometimes customers are unaware of the possible dangers as some of the equipments exceed their planned budget but it is our duty to convince them that these are essential items. On Empathy The shops operating hours is 11.00am to 9.00pm daily and open on public holidays. Mr Ng explains that the operating hours is to accommodate those who are busy working from 9am to 5pm and peak traffic congestion hours are from 5pm to 7pm. Thus closing at 9pm would allow them to visit the shop once the traffic congestion is over. He added for those who too busy during the weekdays, they can come visit us at weekends or public holiday. He also stresses thatmajority of the customers are ignorant towards the safety and importance of the outdoor equipment. They do not realise that by ignoring it they would pose themselves to danger. However, it is understood that some of the items are over their budget. Thus at times we do recommend customers the alternate methods. He gave an example that a pair of Gore-tex water-proof warm gloves would cost RM299. As an alternate means to those who cant afford it, we would ask customers to buy wool mittens for warmth purposes and wear gardening gloves to keep them dry. Using this alternate method would cost them only RM50.

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Chapter 4: Conclusions

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4.1 General Conclusion

Based on the SERVQUAL Score given in Chapter 3section 3.1.5, Lafuma Malaysia has performed well to meet customers expectations. The negative score that was accumulated is only marginal and thus negligible. The survey has proved what other researchers have said regarding the expectation. Customers do tend to have a higher expectation. Never the less, the service quality offered by Lafuma Malaysia has been well perceived by customers. This was substantiated with the interview session with one of the respondents and with Mr. Ng. The statement of the interviewed respondent has somewhat able to justify the SERVQUAL scores and the statement of Mr Ng on Lafumas Customer Service Strategy has met customers expectations.

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4.2 Recommendation
Not much recommendation could be offered as most of the strategy practised by Lafuma Malaysia has met the recommended strategy offered by Berry & Evans and Levy & Weitz. The researcher believes that if Lafuma Malaysia is able to maintain its Service Quality, the business operations of the firm would definitely grow further in the future.

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Bibliography
Berman, B., & Evans, J. R. (2004). Retail Management: A Strategic Approach (Ninth ed.). Upper Saddle River: Pearson Prentice Hall. Buttle, F. (1994). SERVQUAL: Review, Critique,Research Agenda. European Journal of Marketing , 30 (1), 8-32. Coldwell, J. (2001). Customer Relationship Management. (J. Shet, A. Parvatiyar, & G. Shainesh, Eds.) New Delhi: Tata-McGraw Hill. Grnroos, C. (1984). A service quality model and its marketing implications. European Journal of Marketing , 18 (4), 36-44. Ladhari, R. (2009). A review of twenty years of SERVQUAL research. International Journal of Quality and Service Sciences , 1 (2), 172-198. Levy, M., & Weitz, B. A. (2009). Retailing Management (Seventh ed.). New York: McGraw-Hill/Irwin. Malhotra, N. K., Hall, J., Shaw, M., & Oppenheim, P. (2008). Essentials of Marketing Research. Frenchs Forest: Pearson Education Australia. McNeill, P., & Chapman, S. (2005). Research Methods (3rd ed.). Oxon: Routledge. Saunders, M., Lewis, P., & Thornhil, A. (2007). Research Methods for Business Students (4th ed.). Essex: Pearson Education. Shahin, A. (2005). SERVQUAL and Model of Service Quality Gaps:. Department of Management, University of Isfahan , 10. Singh, H. (2006). The Importance of Customer Satisfaction in Relation to Customer Loyalty & Satisfaction. UCTI Working Paper . Zairi, M. (2000). Managing Customer Dissatisfaction Through Effective Complaint Management System. The TQM Magazine , 12 (5), 389-394. Zeithaml, V. A., Parasuraman, A., & Berry, L. L. (1990). Delivering Quality Service: Balancing Customer Perceptions and Expectations. New York: Free Press.

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Appendixe s

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Appendix 1: Data Computation of Questionnaire

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Appendix 2: Nationality of Respondents

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Appendix 3: Overall SERVQUAL Score

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Appendix 4: Pictures of Store

Display showing the Operating Hours of Lafuma

Board Displaying Information of Events

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Front View of the Shop

Mr Ng Servicing a regular customer

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Appendix 5: SERVQUAL Questionnaire in English

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Appendix 6: SERVQUAL Questionnaire in Bahasa Malaysia (Malay Language)

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