Master Thesis
The effect of service quality on behavioral intensions in a
capital intensive tangible business to business maritime
market.
Is service quality a key growth driver for Damen Shipyards?
Name : ing. Kars Klapwijk Student no. : 6382622
Date : 24 April 2014
Course : MSc in Business Studies
Institution : Amsterdam business school, University of Amsterdam Supervisor 1 : Drs. Frank Slisser
In memory of my dear classmate Alice de Groot 12 / 12 / 1985 – 27 / 01 / 2013
Abstract
Today manufacturers are operating in constantly changing and very dynamic marketplaces thanks to - amongst others - the increasing power of the customer. Services play a key role for maintaining and developing business relationships in the emerging “manufacturing-service sector”. The major goal of this paper is to investigate the effect of “manufacturing-service quality on trust, satisfaction, loyalty and commitment and subsequently the behavioral intentions in a capital intensive tangible business to business maritime market. Manufacturing / products & services are often described in the literature but the combination in terms of product-service packages is not really available. This study combines several constructs and dimensions from other markets in order to test the fit in the maritime market.
The research design chosen for this paper is a case study focusing on the maritime market of Damen shipyards, a leading shipbuilder. A qualitative research approach was used to get better understanding of the interrelated constructs. The empirical data was gathered through semi-structured interviews with twelve respondents from eleven different countries. The results indicate that service quality is the unique value adding dimension to the product quality as it influences directly customer satisfaction, trust and loyalty via technical en functional service elements. Technical service quality can be conceptualized as dissatisfier and functional service quality as satisfier. The service mentality which is embedded in the corporate culture is part of the functional service quality and affects the behavioral intentions of the customers. Further research is required to investigate the order in technical and functional service quality as dissatisfier and satisfier and to investigate the effect of corporate culture / human capital in the maritime product-service market.
This paper can be used as a relevant source for service marketing in capital intensive product-service markets. The findings suggest that the INDSERV scale of Gounaris (2005) has a good fit with the maritime market because it enables the researcher to explore the processes of the additional services in the dynamic capital intensive maritime market. The model of Archer and Wesolowsky (1996) is tested and extended.
Acknowledgements
First of all I want to thank Damen Shipyards for the support and time given to prepare and execute the research including visits to customers in Panama, Trinidad, Curacao, Aruba and Mexico. In particular I would like to thank Sander van Oord & Mathijs Roelofs for giving me the opportunity and Kristy Groeneveld for her support before and during the visits. Then I thank my mentor dr. Frank Slisser for the guidance of my thesis.
Special thanks go out to my girlfriend Roos Meijer and my parents. Roos Meijer for “no complaining during the many hours I focused on my study” and my parents for their 21 years of support during my education.
Rotterdam, April 2014
ing. Kars Klapwijk
Table of Contents
Abstract ... 3 Acknowledgements ... 4 1 Introduction ... 7 1.1 Background ... 9 1.2 Problem statement ... 10 1.3 Boundaries ... 13 2 Literature review ... 14 2.1 Quality... 15 2.1.1 Product quality ... 15 2.1.2 Service quality ... 18 2.2 Trust ... 22 2.3 Customer value ... 24 2.4 Satisfaction ... 27 2.5 Commitment ... 28 2.6 Loyalty ... 30 2.6.1 Service loyalty ... 32 2.7 Conclusion ... 35 3 Research design ... 373.1 Single case study design ... 37
3.2 Case selection ... 38 3.3 Data collection ... 39 3.3.1 Semi-standardized interviews ... 40 3.4 Data analysis ... 43 4 Findings ... 45 4.1 Quality... 45 4.1.1 Product quality ... 45 4.1.2 Service quality ... 48 4.2 Satisfaction ... 52 4.3 Trust ... 53 4.4 Loyalty ... 55
4.4.1 Loyalty - Product quality ... 57
4.5 Behavioral intentions ... 59
4.5.1 Positive word of mouth ... 59
4.5.2 Retention ... 61 5 Discussion ... 62 5.1 Quality... 62 5.2 Satisfaction ... 66 5.3 Trust ... 66 5.4 Loyalty ... 68 5.4 Behavioral intentions ... 72
5.5 Working propositions & Revised framework ... 73
6 Conclusion & recommendations for future research ... 76
7 Limitations ... 77
References ... 78
Appendices ... 85
Appendix 1 Company background ... 85
Appendix 2 Market comparison ... 86
1
Introduction
Historically product quality was being considered as the driver to improve loyalty and the most important element of the marketing mix to repeat sales (Gounaris 2003). In the last decades however manufacturers are confronted with increasing competition and technology that became common (Gounaris 2003). Consequently it has become more difficult to distinguish (from competition) on product quality and loyalty can deteriorate quickly (Gounaris 2003). For industrial goods in particular, additional services needed to be added to make it a “solution package”
(Potter, 1989). Customers’ perception of quality is taking all aspects of the total solution into
account. In turn, manufacturers are rewarded to make all service aspects an integral part of the design and to drastically decrease the cost thereof (Lichtenthal & Long, 1998).
There’s not much marketing literature regarding service aspects of capital intensive industrial equipment (Gounaris 2003). The services business originally developed due to increasing focus on after sales maintenance & repairs to help customers, to keep them satisfied and to a keep close relationships (Wetzels, de Ruyter and van Birgelen 1998). In various segments services are playing a major role in the operational cost of the product, especially in the case of complex and capital intensive equipment where initial cost is secondary to down time, installation and maintenance costs (Hutt & Speh, 1998). Here is the opportunity for additional service support. The literature speaks about an emerging “manufacturing-service sector” (Karaomerioglu & Carlson 1999
and Pappas & Sheehan 1999).
Services comprise a broad range of activities such as design, testing, system integration, component and (raw and half fabricate) material purchasing, labeling, packaging,
warehousing, distribution, installation, assembly, repair, maintenance etc (Marceau & Martinez,
2002). These services are complementary and becoming an integral part of the offerings and
thus part of the marketing strategy. Manufacturing evolves into a ‘service’ industry (Marceau &
Although it has been recognized that support services are critical in industrial marketing, little has been written about the effect of the perceived services to the overall perceived product quality and consequently the value for the customer. This study will focus on the literature gap of the effect of the service quality on the “chain of behavioral intensions”, viz. effect of perceived product & service quality, satisfaction, trust, loyalty / commitment on behavioral intensions etc1. The defined market is different from the other tangible capital goods markets (such as airplane engines, cars / trucks etc.) as described in chapter 1.1.
Proven theoretical constructs in B2B markets are used in this study to create a sound theoretical foundation which will avoid bias. This case study will be conducted at Damen shipyards. The outcome of this study is an adapted or confirmed model.
1
1.1
Background
Many capital goods have an inherent service component. It’s mostly the end user who has to organize the servicing, maintenance & repair (Lichtenthal & Long, 1998). Customers should
consider that this inherent service component entail financial consequences like down time and maintenance (Lichtenthal & Long, 1998).
Maintenance & repair are mostly being provided after the sale of the product (Riddle 1986). Often other kinds of services are being provided along with the delivery of the product, then called a product-service package. For example a motor company selling cars offers also the financial services needed to purchase the vehicle and the services to maintain the car. The whole package is organized and financed with own resources (Marceau & Martinez 2002). Rolls Royce is another example. They sell flying hours with instead of just an airplane engine with a product guaranty. The product-service package is developed to offer the customer uptime. To ensure uptime Rolls Royce (RR) has developed a complete service portfolio. One of the most exclusive service packages of RR is TotalCare, the total solution covering service elements such as predictive maintenance planning, work-scope creation and management, and all off-wing repair and overhaul (http://www.rolls-royce.com/civil/services/totalcare/index.jsp). These examples illustrate the interdependency between manufacturing and services in the market of capital intensive goods.
Damen Shipyards’ turnover is predominantly coming from new building, see appendix 1. After sales services however is becoming more and more important according to the chairman and owner of Damen Shipyards, Mr. Kommer Damen.
“The first ship is sold by the salesman and the subsequent through our services”.
This statement confirms the impact of services on the behavioral intensions of customers in a manufacturing market.
The shipbuilding industry is being described as a conservative industry (Spoelstra 2013). Ships are not standardized products like trucks or airplanes and are not being made in a factory with an automated production line. Virtually each ship is custom made. Consequently every ship is (slightly) different. The fact that many subcontractors are being used result in a product which is a combination of many subsystems and associated brands. This makes it more difficult to deliver a complete product-service package.
The airplane and automotive industry have a standard production process and product range with standardized options to choose from. These standardized products economically enable to keep stock of most service-items like spare parts. In their market, Damen Shipyards comes closest to these kind of industries. Damen Shipyards use standardized designs enabling to build casco’s to stock and to keep stock of a diverse range of service products. There are however major differences compared to other industries regarding the economy of scale, diversity of the products and the manufacturing process, both on macro and micro scale (Appendix 2).
1.2
Problem statement
Studies about the relationship between customers and service providers have learned that a high(er) level of trust results in a more affectively committed customer (Gounaris 2003). Other known phenomena’s are the positive effects of customer satisfaction on customer retention
(Ranaweera and Prabhu 2003), on consumer spending growth ( Fornell et al. 2010) and retention being a
behavioral dimension of satisfaction, trust, commitment and loyalty (Grembler& Brown 1996;
Ranaweera and Prabhu 2003;Mathieu and Zajac 1990; Bell, Auh, Smalley 2005). Oh (1999) wrote that customer
value affects word of mouth directly and indirectly through customer satisfaction and repurchase intention.
Perceived service quality is important because it is related with satisfaction which is known to influence the firm’s performance as perceived by the customer (Gounaris 2005). Tumbull and
Moustakatos found in 1996 that trust is an important mediating variable of the perceived quality of the service.
The predominant view is that service quality influences customer satisfaction and loyalty. Empirical support is found by Cronin and Taylor (1992) that service quality is an antecedent for customer satisfaction.
Service quality is most studied in service industries like banking, accountancy, legal advisory, insurance and amongst students (Zeithaml, Berry and Parasuraman 1990; Gounaris 2002; Bell, Auh, Smalley 2005;
Olorunniwo, Hsu, Udo 2006). Figure 1 is a graphic representation of services / tangible products.
.
Manufacturing / products & services are often described in the literature but the combination in terms of product-service packages is not really available. Generally known is that the quality of products and services are each (independently) having an impact on the behavioral intensions of customers (Wetzels, de Ruyter and van Birgelen 1998; Zeithaml, Berry and Parasuraman 1990; Gounaris
2003 & 2005; Gronroos 1984), but the effects of perceived service quality on the perceived product
Literature Consultancy Manufacturing Product-service package Full - Services Tangible business
Non- tangible business No services
Banking / financial market / Insurance companies
Shipyards
Rolls – Royce aircraft engines
Damen
No -Business Services
Figure 1: Graphic representation of tangible products / services Source: Author
quality in a capital intensive tangible market, where the services are supplementary to the products, seems hardly available. On top of it has been stated that service quality is either industry or context specific and thus a service construct should not only be operational, but also context specific (Babakus and Boller 1992).
For this research an already proven framework from the automotive industry will be used. It has been developed by Archer and Wesolowsky (1996) and will be used in an extended form based on the literature. Major difference with Damen shipyards is the lack of a network of (independent) dealers as present in the automotive industry. Damen shipyards is providing its services through its own affiliate locations.
Goal of this study is to investigate the effect of service quality on satisfaction, trust,
commitment and loyalty and subsequently on the behavioral intentions in a capital intensive b2b maritime tangible market.
In addition to the validation of the framework of Archer and Wesolowsky (1996) main research question is developed to make it more practical and to contribute to the literature.
“What is the effect of service quality on trust, satisfaction and loyalty on the behavioral intentions, word of mouth and retention in a b2b capital intensive maritime tangible market?”
1.3
Boundaries
This research will use a single case study conducted at Damen shipyards More case studies should be done in the maritime tangible capital market to be able to generalize the findings and conclusions for the whole maritime market. This research will focus on two behavioral intentions: word of mouth and retention.
2
Literature review
The focus of this case study is to identify the effect of services quality on word of mouth and customer retention in a tangible capital market. There are a lot of mediating and moderating variables that influences the behavioral intentions. A literature study is conducted to
understand what the different variables are and what their effect is on the customers’ behavioral intentions. The relevant constructs for this research are:
Figure 2: Order of constructs in literature review Source: Author Quality (paragraph 2.1) Trust (paragraph 2.2) Customer value (paragraph 2.3) Satisfaction (paragraph 2.4) Loyalty (paragraph 2.6) Commitment (paragraph 2.5) Behavioral intentions
2.1
Quality
Quality of products and services (separately) are well studied constructs within the spectrum of business studies. Today product and service quality are interrelated constructs due to the development of product-service packages in the manufacturing industry. The automotive industry is a typical example due to the upcoming international competition (Davaraj, Matta and
Conlon 2000). Quality in the American automotive industry appeared a key reason for the
significant loss of market share in the 1980s. The Japanese manufacturers changed the game with high(er) quality products and services at low(er) cost (Davaraj, Matta and Conlon 2000). Also the Dutch shipbuilding industry lost significant market share in the 1980s and 1990s to relatively new competition from amongst others Japan and Korea.
(http://nl.wikipedia.org/wiki/Maritieme_geschiedenis_van_Nederland).
This research examines the effect of service quality in the shipbuilding industry. This chapter will start with literature review of product quality (2.1.1) followed by service quality (2.1.2) to get better understanding of the two interrelated constructs.
2.1.1 Product quality
Reliability and durability are mentioned in the literature as the parameters for objective product quality (Holbrook and Corfman 1984). Others define objective product quality as technical excellence and superiority (Monroe and Krishnan 1985). It’s the customer who defines the perceived quality of a product which is the customer’s judgment of the superiority of the product (Zeithaml
1988). According to Devaraj et al. (2000) perceived quality reflects the consumer’s assessment
of prominent attributes. In the study of Archer and Wesolowsky (1996) it’s being argued that these definitions refer to a higher level of abstraction along the lines of intrinsic and extrinsic product attributes. According to the authors intrinsic product attributes include performance, features, reliability, conformance, durability, serviceability, aesthetics and image. Extrinsic
product attributes include price, warranty, advertising and brand name (Garvin 1987, Archer and
Wesolowsky 1996). The service quality attributes are described in chapter 2.1.2.
A sound warranty and a maintenance service contribute to the success of durable/capital products (Mathe and Shapiro 1993). They complement to superior product quality and encourage product loyalty, retention and the dissemination of positive word-of-mouth by satisfied customers (Archer and Wesolowsky 1996). Particularly in the case of complex mechanical and electronic devices customer perceptions will evolve during the product ownership. The useful lifetime is determinant and that depends of both product and service quality. The product warranty and regular maintenance (throughout the useful lifetime) make an important
intangible contribution to the customer’s perception (Archer and Wesolowsky 1996).. It can impact the customer’s behavior positive- or negatively (Blischke and Murthy 1994, Archer and Wesolowsky 1996).
In their paper Archer and Wesolowsky (1996) proposed a framework for the automotive industry to evaluate owner perceptions of product and service quality:
Product quality Service quality
Critical incidents
Product attributes Service attributes
Satisfaction with product quality Satisfaction with service quality Intentions of owner Word of mouth Future purchase
Figure 3: Framework automotive industry Source: Archer and Wesolowsky 1996
The product owner perceives either positive or negative incidents which are outside the limits of the owner’s normal expectations and will tend to modify the owner’s opinions of the
product and service (Archer and Wesolowsky 1996). They revealed that critical incidents can be classified into five categories:
1. Reliability / durability 2. Product design 3. Cost (of services) 4. Service
5. Warranty
Incidents in categories 1 and 2 are product related and the other categories refer to services and involve interactions with the dealer / manufacturer.
Archer and Wesolowsky (1996) had a few specific findings in their research:
· More than one negative product incident have a negative impact on repeat purchase intentions from the same manufacturer.
· Negative service incidents are not excepted.
· Positive service incidents can positively influence the customer perceptions of negative product
In other words: The owners are relatively tolerant to vehicle quality incidents, but they don’t tolerate negative service incidents. Contrarily positive service incidents can lead to customer satisfaction (Rust and Oliver 1994).
In the case of a car for example, customer’s (private owners / drivers) brand and dealer loyalty, repurchase intentions and positive word of mouth are not only impacted by the product quality of the car itself. During its useful life, these factors are significantly impacted by the number of incidents/failures (hick-ups, bugs and breakdowns) but subsequently by the quality of the service provided (Devaraj et al. 2000). It can be concluded that very strong relations
exist between product and service quality, these in combination determining customer’s satisfaction, positive word of mouth and customer’s intentions to repurchase a vehicle. This example in the automotive market is to characterize mechanisms that may play a role in virtually all markets.
This research will focus on the effect of service quality in a capital intensive maritime tangible market.
2.1.2 Service quality
Service providers must interact with customers when planning and executing the services
(Edvardsson et al. 2000). In other words, customers play an important role as well. In most
situations customers perceive the servicing as an interruption of their core activities (Edvardsson
et al. 2000). Many things can go wrong due to the time and process overlap and involvement of
the customer. The way that customers perceive the quality of service, depends of the
expected versus the delivered service (Parasuraman et al. 1985). This gap can be defined along the lines of magnitude and direction (Parasuraman et al. 1985).
The gaps model, about twenty years ago developed by Zeithaml, Berry and Parasuraman and improved by Lovelock and Wirtz (services Marketing 2009), is being used by many companies and worldwide. It helped organizations to improve their services, to better satisfy customers and to distinguish from competition (Bitner, Zeithaml and Gremler 2010). This improved and extended gaps model consist of the following gaps:
Gap 1 – Knowledge gap. This is the difference between what management believes that customers expect and what customers’ actual needs and expectations are.
Gap 2 – Policy gap. This is the difference between management’s understanding of customers’ expectations and the quality standards established for service delivery.
Gap 3 – Delivery gap. This is the difference between specified service delivery standards and the actual performance of the delivery teams and service operations.
Gap 4 – Communications gap. This is the difference between what the company communicates and what it actually delivers to its customers.
Gap 5 – Perceptions gap. This is the difference between what has been delivered to the customers and what customers perceive they have received.
Gap 6 – Service quality gap. This is the difference between what customers expect to receive and their perception of the service actually delivered.
According to Lovelock and Wirtz, 1, 5 and 6 are external gaps between the customer and the organization. Gaps 2, 3 and 4 are internal gaps between various functions and departments within the organization. To my opinion an organization can influence the gaps 1, 2, 3 and 4 by improvement of their communication.
Perceived service quality has been conceptualized as the comparison of service expectations with actual performance (Wetzels, de Ruyter and van Birgelen 1998) and is important because it is related with satisfaction influencing the firm’s performance (Gounaris 2005). Trust is an important element of the perceived quality of the service (Tumbull and Moustakatos 1996).
The predominant view is that service quality influences customer satisfaction. Empirical support is found that service quality is an moderator for customer satisfaction (Cronin and Taylor
1992; Devaraj et al. 2000; Archer and Wesolowsky 1996). Service quality can be classified into two
categories (Gronroos 1984):
· Technical quality · Functional quality
Technical quality relates to the quality of the result or outcome of the service and functional quality relates to the way a service is provided (Wetzels, de Ruyter and van Birgelen 1998). In other
words, technical quality is what has been delivered and functional quality is how the customer has experienced the service.
Zeithaml, Berry and Parasuraman (1990) have conducted intensive research on service quality. After several different researches they came up with five broad attributes of service quality:
1. Tangibles; appearance of physical elements. 2. Reliability; dependable and accurate performance. 3. Responsiveness; promptness and helpfulness.
4. Assurance; credibility, security, competence and courtesy.
5. Empathy; easy access, good communications and customer understandings.
In consumer markets, the five dimensions of service quality are often measured by use of the SERQUAL scale as developed and subsequently modified by Parasuraman et al in 1991. The value of this scale in B2B markets is questionable since the lack of relevant studies
(Durvasula et al. 1999). Another scale to measure service quality is the INDSERV scale (Gounaris
2005). The 4 dimensions of the INDSERV scale are:
1. Potential quality;
a. Potential quality evaluate service attributes that are required to provide good service quality to the customer such as the supplier has required personnel, facilities, management philosophy, low personnel turn-over and uses network of partners/associates (Lee 2011; Gounaris 2005)..
2. Hard process quality;
a. Hard process quality refers to the process of delivering the service and the related perceived quality of objective issues such as the supplier keeps time schedules, honors financial agreements/stays in budgets, meets deadlines, looks at details and understands our needs (Lee 2011; Gounaris 2005).
a. Soft process quality refers to the business-relationship between the people with elements such as the supplier accepted enthusiastically, listen to our problems, open to suggestions/ideas, pleasant personality, argue if necessary and look after our interests (Lee 2011; Gounaris 2005).
4. Output quality;
a. Output quality is the impact of the service on the customer’s performance. Elements such as the supplier reaches objectives, has a notable effect, contributes to our sales/image, is creative in terms of its offering and is consistent with our strategy are part of this dimension (Lee 2011; Gounaris 2005).
This scale has a better fit with B2B markets according because the studies that applied the SERVQUAL scale in the B2B markets have mixed results (Gounaris 2005). The INDSERV scale allows the researcher to explore the process of the service to investigate what is affected by the service in a B2B environment (Lee 2011). Therefore the dimensions of the INDSEV scale will be used in this study. These dimensions can be categorized into the two categories of Gonroos (1984):
Technical quality Functional quality
Output quality Potential quality
Hard process quality Soft process quality
Table 1: Service quality dimensions Source: Gronroos 1984; Gounaris 2005
2.2
Trust
Trust is (one of) the key value(s) of a relationship and hence an important indicator to rate the quality of the relationship. The literature describes many types and forms of trust, with both behavioral and cognitive dimensions. Wilson (1994) describes trust as “a fundamental relationship building block”. Ring (1996) describes trust as “a critical element of economic exchange”. Trust implies affiliation and identification with each other with the positive effect that a lower importance is given to the rational and calculative (financial) reasons (Ruyter et al
2001). In the study of Gounaris (2003) trust is conceptualized as “the confidence of the
exchange actors in the goodwill of each other”. It brings the relationship to a higher level of moral and a high level of confidence in a partner (Ring 1996). This so called “partner’s altruism” means helping another with little or no self-interest. When describing the relationship as a “bond” then we can distinguish two categories of bonds: structural and social (Wilson &
Mummalaneni 1986).
Structural bonds result from reasons such as: economic, technical, time-based and
knowledge (Wilson & Mummalaneni 1986, Paliwoda and Thomson 1988; Halinen 1994). Social bonds result from reasons such as: the feeling of likeness, acceptance, friendship and social interactivity. This is a major difference in the vulnerability of the bonds. Breaking social bonds is easier then breaking structural bonds (Gounaris 2003). It is empirically proven that both bonds, structural and social, are present in successful relationships (Wilson et al. 1995).
In literature about social psychology, it can be found that trust can be defined by two elements: honesty and benevolence (Wetzels, de Ruyter and van Birgelen 1998). Honesty is the belief that one stands by its word and benevolence is the belief that one is interested in the company’s welfare and will not take unexpected actions which will negatively impact the company (Geyskens and Steenkamp 1995).
The results of Johnson and Grayson (2005) show that service dimensions have an positive effect on trust. Service quality is categorized into two categories based on the result or outcome of the service and how the service is provided.
This research anticipates that the elements of the technical service quality have a positive effect on structural bonds and partners benevolence because technical service quality, structural bonds and suppliers benevolence employ the business objectives. Therefore this research defined the following working proposition:
Wp1: Technical service quality has a positive impact on structural bonds and suppliers benevolence.
The perceived level of functional elements enhances the credibility of the supplier (Busch and
Wilson, 1976 in Johnson and Grayson, 2005). Therefore this research defined the following working
proposition:
Wp2: Functional service quality has a positive impact on social bonds and suppliers honesty.
The advantage of trust comes in many ways, but eventually will lead, in combination with other mediators and moderators, to a strong relationship between the customer and supplier.
2.3
Customer value
Customer value can be conceptualized as a comparison of weighted “get” versus “give” attributes (Hesket et al. 1994). Lam et al. (2004) posit customer value as: “Customer value reflects customers’ rational trade-off between the costs and benefits of using a product and service and thus is regarded as a cognition variable.
Today high value services are often being enhanced to the product offering to improve the value proposition (Gebauer and Kowalkowski 2011; Jacob and Ulaga 2008; Matthyssens and Vandenbempt 2010 in
Kindstrom et al. 2012). Very important is to communicate to customers what the benefits are of the
new offerings compared to the old situation (Anderson et al. 2007). Kindstrom et al. (2012) recommend to visualize or illustrate and to demonstrate the value of the offerings to get better understanding of the benefits thereof before, during and after the service
interaction/process (Kindstrom et al. 2012).
Kindstrom and Kowalkowski (2009) address in an earlier research the importance of visualization of an offering in all stages of the life cycle and not just the sales stage.
Kindstrom et al. (2012) identified three broad value-categories:
· Product based value · Service-based value · Relationship-based value
Product-based value is the traditional category measure along the performance, quality and price. These were thought to be the drivers to get the sales and hence were given the most attention by the manufacturer / supplier (Kindstrom et al. 2012).
Service-based value is not always easy to quantify due to their intangibility as described before. Parameters include operation costs, customization and performance consistency.
Relationship-based value is defined by Gronroos (1997) as how the supplier and customer maintain their relationship over time. Typical parameters include pro-activity, trust and long term commitment.
Anderson et al. (2007) proposed three different strategies to convey value to customers in business to business markets:
1. List all potential benefits to the customer.
2. List favorable points-of-difference vs competition. It demonstrates that the supplier recognizes that the customer has alternatives.
3. Resonating focus; communicating those benefits that a customer really appreciate and needs.
Resonating focus strategy has the greatest potential but is the most difficult strategy to manage since in depth is required regarding customer expectations (cognitive and latent) and the competitive landscape.
Four “tangibilization strategies” defined by Berry and Clark (1986), Hill et al. (2004), Mittal (1999) and Kindstrom et al. (2012). can be used to convey the value of services:
1. Envisioning (visualization)
a. Envisioning or visualization is making customers imagine what the service can do for them, what the benefits are and thus to persuade them to buy-in to it
(Kindstrom et al 2012).
2. Documentation,
a. Documentation is providing relevant information about key attributes, features and benefits of the service (Kindstrom et al 2012).
3. Association,
a. Association is lining an object, place or a person to the service (Kindstrom et al
4. Physical representation.
a. Physical representation is focusing on core attributes that are direct or peripheral parts of the service like buildings, vans and employees (Kindstrom et al 2012).
The customer rates the value of the relationship higher when the level of trust is higher (Walter
et al. 2002) and so is the customer satisfaction positively mediated by customer value (Lam et al.
2004). Perceived value is a direct antecedent of customer purchase intention and decision and
customer satisfaction (Dodds et al 1991; Zeithaml 1988; Oh 1999). Zeithaml (1988) found that perceived value is a direct consequence of service quality. Positive word of mouth is directly influenced by customer value and indirectly through satisfaction and repurchase intention. In addition
Oh (1999) found evidence as he described as: “perceived value is determined by the trade-off
between price and service quality and also by the direct and indirect influence of performance perceptions.”
Above describes that value is an intervening construct between quality, trust, commitment and purchase intention (Anderson et al. 1998; Dodds et al. 1991; Gronroos 1997; Kindstrom et al. 2012; lam et al.
2004; Mittal 1999 and Oh 1999), however this study is not using this construct as a mediator for the
reasons as proposed in the study of Devaraj et al. (2000):
· The level of abstraction of value differs from the level of abstraction of quality perception and purchase intentions (Zeithaml 1988),
· The differentiation of value and quality is difficult to distinguish in the minds of the customers (Jacoby et al. 1978),
· Value involves the comparison of give and get attributes which make it more difficult to measure (Holbrook and Corfman 1984),
2.4
Satisfaction
The traditional view is that customer satisfaction is the long-term determinant for customer behavior (Oliver 1980) and subsequently their retention (Anderson 1993). Basically customer’s spending at the same provider will depend on the degree of satisfaction related to the use or consumption of the services provided (Fornell, Rust &Dekimpe 2010).
Lam et al. (2004) describes that there are two general concepts of customer satisfaction:
· Service encounter or transaction-specific satisfaction and
· Overall or cumulative satisfaction (Bolton & Drew 1991; Cronin & Taylor 1994; Shankar et al. 2003).
This paper focuses on cumulative satisfaction - referred to as customer satisfaction – since cumulative satisfaction is the more complete indicator of a companies’ past, current and expected future performance (Lam et al. 2004; Bitner&Hubbert 1994; Oliver 1996; Rust & Oliver 1994)..
Truly satisfied customers will ‘protect’ and recommend their service provider versus other parties including other customers (Lam et al. 2004, Reichheld and Sasser 1990 and Oliver 1999). Ranaweera and Prabhu (2003) found in their research evidence for the following hypotheses:
· The higher the level of satisfaction, the higher the level of customer retention · Satisfaction will be a better predictor of customer retention than trust
Fornel, Rust and Dekimpe (2010) stated that lagged changes in customer satisfaction can significantly impact the customer’s spending growth. The latter is also being moderated by the debt service ratio (DSR) which is the customer’s ability to spend. Li, Sun and Wilcox state in their paper in 2005 that satisfaction can lead to more cross- and up-selling.
Above indicates the relative importance of satisfaction on retention, on recommending the provider to others and on customerspending. Empirical support is found that service quality is a moderator for customer satisfaction (Cronin and Taylor 1992; Devaraj et al. 2000; Archer and Wesolowsky
1996).The following working proposition is determined to investigate the effect of satisfaction
Wp3: Customer satisfaction with the service positively affects customer’s loyalty earned.
2.5
Commitment
Relationships between partners evolve through five phases according to Scanzoni in 1979.
1. Awareness (recognition potential supplier / partner), 2. Exploration (phase of exploring the relation),
3. Expansion (Increasing interdependency by increasing benefits which are obtaining for both parties),
4. Commitment (described below),
5. Dissolution (The relationship ends after dissatisfaction in the relationship)
The fourth phase of Scanzoni is the most desirable. Commitment is the stage where the customer is aiming for continuity and is willing to invest in the relationship (Gounaris 2003). Morgan and Hunt (1994) describe commitment as: “The belief of an exchange partner that the ongoing relationship with another is so important as to deserve maximum efforts at
maintaining it indefinitely”. Anderson and Weitz (1989) describe commitment in a similar way: “Commitment is the propensity for relation continuity”. Scanzoni (1979) goes one step further: “Commitment is the most advanced phase of partners’ interdependence”.
The literature describes that the level of importance of commitment is not differs for supplier and customer. Suppliers are more concerned about gaining commitment from their
customers than vice versa (Leek et al.2002). There are two different types of commitment (Mathieu
and Zajac 1990):
· Affective commitment and · Calculative commitment.
Affective commitment is based on ‘soft’ aspects like feelings; liking each other and enjoying the relation- and partnership (Buchanan 1974). Loyalty and being recognized and valued as an important partner characterize these types of organizations (Jaros et al. 1993). Verhoef (2003) stated that affective commitment is an antecedent of both customer retention and customer share development.
Calculative commitment is based on ‘hard’ aspects such as financials and hence the relative high cost associated with a switch to another supplier (Gounaris 2003).
Trust and commitment are two highly interrelated notions according to Kumar et al. (1995). They drive the structural relation between the customer and the supplier enabling a productive cooperation (Gounaris 2003).
Wp4: The more the customer trusts the service provider, the more
2.6
Loyalty
Customer loyalty is being described in several ways. For example Dick and Basu state in 1994: “True loyalty only exists when repeat patronage coexists with a high relative attitude”. Jones and Sasser state in 1995: “A feeling of attachment to or affection for a company’s people, product, or services”. Zeithaml et al. state in 1996: “Consumer’s intent to stay with an organization”. Customer loyalty is clearly an aspect of attitude (Ruyter, Wetzels and Bloemer 1998) and the positive opinion about a product and/or service to such an extent that the customer will speak positively about it and even recommend it to others (Gremler and Brown, 1996; Jain et al., 1987;
Pritchard, 1991). True loyalty leads to buying again or more from the same supplier and even to
help the supplier to succeed with others e.g. by recommending the product or service from that brand/supplier (Bell, Auh, Smalley 2005). Oliver (1997) developed a framework following the cognition-affect conation pattern. In this framework consumers are theorized to become loyal in different phases related to the attitude development structure (Oliver 1997 in Oliver 1999). At first the cognitive sense then affective, later in the conative manner and finally in “action inertia”.
Cognitive loyalty focuses on aspects of the brand performance (Oliver 1999). In this phase a consumer makes a comparison between the available brands with the available information, acquired knowledge and or on recent experiences (Oliver 1999). It is directed at costs and benefit and in case of high satisfaction the experience is getting aspects of affection (Oliver 1999).
Affective loyalty is the second phase. This phase is based on cumulative satisfaction and reflects a pleasure dimension (Oliver 1999). It’s related to a product, service, brand or
organization (Oliver 1999). This phase remains subject to switching according to the data of Oliver’s research.
The next phase of loyalty is the conative stage. This stage is also called behavioral intention stage as it is the intention to rebuy the brand based on own motivation (Oliver 1999). The last phase is action loyalty.
Action loyalty is commitment to the action of repurchase (Oliver 1999). It’s the conversion of intensions into actions and referred to as “action control” (Kuhl and Beckmann (1985) in Oliver 1999).
The above sequence still fails in analyzing full loyalty, which is the ultimate loyalty, because it is still subject to attack (Oliver 1999). Therefore he proposed a new framework:
Community/Social Support
Low High
Individual Fortitude
Low Product superiority Village envelopment
High Determined self-isolation Immersed self-identity Table 2: Framework for full loyalty
Source: Oliver 1999
Product superiority is the weakest form of loyalty in this framework. This is the previously
described view of loyalty: cognitive, affective, conative and to some extent, action terms (Oliver
1999). This loyalty is developed by high quality and / or product superiority (Oliver 1999).
Determined self-isolation is the category of customers who are determined to repurchase
on the basis of determination. This group would like to have an exclusive relationship with the brand and is not interested in other brands (Oliver 1999). The behavior of these “brand ambassadors” is that they will contribute to the brand via positive word of mouth, defend the brand and repurchase continuously (Oliver 1999).
Village envelopment is the category of customers who become loyal to be part of a certain
community (Oliver 1999). This group is about the attention, acceptance and camaraderie with other members. This concept is also named as “consumption community” (Friedman et al. 1993,
Schouten and McAlexander 1995).
Immersed self-identity is the combination of determined self-isolation and village
envelopment. This group would like to have an exclusive relationship with the brand and is supported by his social environment (Oliver 1999). This is the full loyalty category.
The relation between reciprocal satisfaction and loyalty is widely discussed in the literature. As described above satisfaction is an enabler for loyalty but to what extent? The conclusion of Oliver (1999) about the relationship can be summarized as follows: “Satisfaction is like a seed which can grow into loyalty, but like a seed that requires the nurturance of sun,
moisture and soil nutrients, satisfaction requires personal determination and social support”. Without these additional factors a satisfied consumer stays satisfied without becoming loyal.
One of these factors in a manufacturing industry could be service quality due to its effect on satisfaction, trust and commitment.
Wp5: Service quality is an additional factor in the capital intensive
tangible market to drive satisfied customers into loyal customers.
2.6.1 Service loyalty
Edvardsson et al. (2000) distinguished two forms of loyalty: loyalty earned and loyalty bought. Loyalty is ‘earned’ when customers are truly satisfied with the performance and or use of the product or services and consequently have a very positive and supportive opinion about this brand/supplier. Loyalty is ‘bought’ when customers are likely to buy again originating from financial advantage related to the purchase of the product or service like a sales promotion, extra discount, special payment terms etc. (Edvardsson et al. 2000).
This paper is focusing on earned loyalty since competing on services provides a platform to increase earned loyalty and to increase profitability (Edvardsson et al. 2000). Product focused firms tend to use the price instrument to increase loyalty whilst service providers must earn their loyalty throughout the whole service encounter.
Ruyter, Wetzels and Bloemer (1998) posit service loyalty as a multi-dimensional construct consisting of preference loyalty, price indifference loyalty and dissatisfaction response. They use the term preference loyalty for product superiority as described above and argue that
customers may develop preference loyalty based on the favorable attitude towards a service provider. They also state that perceived service quality impacts preference loyalty positively, however warn that this differs per industry and thus cannot by generalized. Price indifference loyalty implies that customers accept a premium price. Zeithaml (1990) found a positive relationship between service quality and the intention to remain loyal in case of price increase and the willingness to pay more. The last dimension is dissatisfaction response. Hirschman (1970) stated that customers who want to act after a negative service experience have two options: Communicate dissatisfaction (voice) or discontinue relationship (exit). The majority of customers are inactive, do not undertake any action and don’t communicate their dissatisfaction (Day 1984). The service recovery paradox is a well-known strategy in services marketing. Companies who are using this type of strategy want customers to express their dissatisfaction. The reason is that the service recovery paradox is defined as a situation which a customer’s post-failure satisfaction exceeds pre-failure satisfaction (McCollough and
Baradwaj 1992). Good service recovery can turn angry, frustrated customers into loyal customers
(Hart, Heskett, and Sasser (1990). A supplier able and willing to do an excellent service recovery can
resolve a possible conflict and rebuild consumer trust (Achrol 1991).
Wp6: A good service recovery, in case of product breakdown, has a positive impact on loyalty earned.
There is a relation between loyalty and switching cost in a market segment. In industries with relative low switching cost, customers will be more sensitive regarding preference and price difference. Generally speaking many service industries have relative high switching cost and hence their customers will have a higher level of loyalty (Ruyter, Wetzels and Bloemer (1998).
Technical en functional service qualities, as described in chapter 5.1, are antecedents to customer loyalty according to Gonroos in 1983. Technical service quality has a stronger effect on customer loyalty then functional service quality in a financial service organization.
Functional service quality remains important as the depth of the client-adviser relationship increases (Bell, Auh, Smalley 2005).
The most discussed behaviors arising from customer loyalty are recommending the service provider to other customers and the intention to repeat purchase or patronage the provider
(Dwyer et al. 1987; Fornell 1992; Zeithaml et al. 1996; Lam et al. 2004). This paper focusses on two behavioral
intentions as a result of loyalty: recommend the service provider to other customers and retention.
2.7
Conclusion
This study tries to combine different theoretical constructs and an already proved framework in order to test the theories and to gain new insides in the maritime market. The conceptual model is a combination of the framework of Archer and Wesolowsky (1996) and the
theoretical constructs: quality, satisfaction, trust, commitment and loyalty as described above. Font color blue are additions to the framework based on the literature.
Wp4 Wp1
Product quality Service quality
Critical incidents
Product attributes Service attributes
Intrinsic · Performance · Features · Reliability · Conformance · Durability · Serviceability · Aesthetics · image Extrinsic · Price · Warranty · Advertising · Brand name Technical quality · Output quality · Hard process quality Functional quality · Potential quality · Soft process quality
Satisfaction with product quality
Satisfaction with service quality Structural bonds . · Partners benevolence Social bonds . · Partners honesty Trust Loyalty bought . · Calculative commitment Loyalty earned . · Affective commitment Loyalty
Behavioral intensions (retention & positive word of mouth)
Wp2
Wp3
Wp5
Figure 4: Theoretical framework Source: Author
Working propositions:
Wp1: Technical service quality has a positive impact on structural bonds and suppliers benevolence.
Wp2: Functional service quality has a positive impact on social bonds and suppliers honesty.
Wp3: Customer satisfaction with the service positively affects customer’s loyalty earned.
Wp4: The more the customer trusts the service provider, the more affectively committed to the organization the customer becomes.
Wp5: Service quality is an additional factor in the capital intensive tangible market to drive satisfied customers into loyal customers.
Wp6: A good service recovery, in case of product breakdown, has a positive impact on loyalty earned.
3
Research design
A research design is needed to illustrate the way how the research questions will be answered (Saunders et al. 2009). This statement is valid for qualitative and quantitative research. Qualitative research focuses on the “what’s going on” and quantitative on the “to what extent”
(Berg 2009). Qualitative information provides a handle on what “real life” is like and gives the
researcher the possibility for understanding latent, underlying, or non-obvious issues (Miles and
Huberman 1994). Quantitative research is aimed at measuring and counting things (Berg 2009). It
provides a hold of the concepts, descriptions and characteristics of things. A case study’s questions are generally directed toward how and why considerations (Berg 2009) and that’s in line with the explorative nature of this research.
3.1
Single case study design
The research method used in this paper is a qualitative single case study with a deductive approach. Good internal validity is achieved, because of the research framework which is derived from the existing literature (Gibbert et al. 2008). “A case study strategy is very worthwhile way of exploring existing theory” (Saunders, Lewis and Thornhill 2009). The definition of a case study by Yin (2003) underlines the helpfulness of case study in understanding the context and process: “An empirical enquiry that: investigates a contemporary phenomenon within its real-life context, especially when the boundaries between phenomenon and context are not evident; and uses multiple sources of evidence”. This is also supported by Robson (2002) which defines case studies as “a strategy for doing research which involves an empirical investigation of a particular contemporary phenomenon within its real life context using multiple sources of evidence.”
This study is a single cross-sectional case study because it investigates a unique case at a particular time. A qualitative mono method design will be used to collect the data. Mono method design is using a single data collection technique and corresponding analysis
procedures (Saunders et al. 2009). Qualitative research is rich in data and contains background information. Denzin (2000) defines qualitative research as “a situated activity that locates the observer in the world, which consists of a set of interpretive, material practices that make this world visible”.
This research is investigating the fit of an adapted model in not yet investigated market.
The outcome of this study is an adapted or confirmed model.
3.2
Case selection
Several case studies have been conducted regarding the effect of service quality in a manufacturing market. The most published studied markets are the automotive (Archer and
Wesolowsky 1996) and earthmoving equipment (Froud et al. 1998). These markets have a lot of
similarities with the shipbuilding market (capital equipment), but also big differences (economies of scale & standardization) as described in appendix 2.
Shipbuilding is part of the Dutch heritage. The history of the Dutch shipbuilding industry goes way back until 16th century. After the 2nd world war the Dutch shipbuilding industry was booming with companies like Verolme, RDM, Wilton-Feijenoord, Van der Giessen de Noord, De Schelde and so on. Slowly more competition came from Japan, Korea, Singapore and China which eventually led to economic crisis and bankruptcy of many shipyards in the Dutch shipbuilding market. Damen shipyards was the first shipbuilder to grow again.
Damen shipyards is a privately owned company established in 1927 by the two Damen brothers Jan and Rien. The current chairmen Kommer Damen purchased the company from his father in 1969. Kommer Damen introduced the standardized ships (now called The Damen Standard) which has reduced costs and delivery times significantly. This concept was and still is a great success driving the vast expansion of Damen Shipyards. Today the
company has more than 6000 employees working at 35 locations worldwide. Damen Shipyards has become a leading company in the global market. From the early beginning
Damen shipyards added extensive services to their ships. Kommer Damen once said that the first vessel is sold by the salesmen and the subsequent through its services. The impact of services is clear in this statement and has similarities with the automotive industry as described by Archer and Wesolowsky (1996). The sources used for the case description above are: http://www.damen.com/en/about/a-family-history and
http://nl.wikipedia.org/wiki/Maritieme_geschiedenis_van_Nederland.
3.3
Data collection
In principle three kinds of interviews are identified (Berg 2009):
· Standardized (formal or structured) interview,
· Open / not standardized (informal or non-directive) interview and · Semi-standardized (guided-semi structured or focused) interview.
Standardized interviews are held along fixed questions intended to provoke the relative thoughts, opinions etc (Berg 2009). Open / not standardized interviews use issues where the interviewer must develop, adapt, and generate questions and follow-up probes appropriate to each given situation and the central purpose of the investigation (Berg 2009). Semi standardized interviews are a mix of both mentioned before. A semi-standardized interview permits the interviewer to probe far beyond the answers of standardized questions (Berg 2009). This “freedom” will lead to richer data which is required for this research and therefore semi-standardized interviews will be held to gain deeper insight in the relationships between the different constructs. The fit of semi-standardized interviews is good with research what is exploratory in nature (Saunders et al. 2009).
3.3.1 Semi-standardized interviews
Semi-standardized interviews comprise predetermined questions and issues formulated in the words and related tone of voice of the target audience (Berg 2009). The flexibility of a semi-standardized interview allows for structured questions, permitting comparisons across interviews and allows for spontaneously initiated issues / questions (Berg 2009). The interview questions are designed to collect data that covers and even expand the theoretical design. The questions and the corresponding construct are shown in table 4.
The sequence of the interview questions are based on the types suggested by Berg (2009):
1. Start easy, nonthreatening (demographic) questions.
2. More important questions, these questions should stick to a single concept. 3. More sensitive questions related to the topic
4. Validating questions 5. Repeat step 3 and 4.
The interview started with questions about the demographic characteristics of the interviewee and characteristics of the organization the interviewee works for. Thereafter the order of questions is based on the conceptual model starting with the final dependent variable and working back through the model to ensure that there was the opportunity to let the
interviewee tell what he / she wanted. New things can be added to the model because of this approach.
Some throw-away questions are asked throughout the interview to set the interviewing pace or to change focus in the interview. Probing questions will be asked to gain the complete stories of the subjects.
The focus group for this research is a selection of customers of Damen shipyards A sample is taken from two logical sub-units within the organizations of the customers; technical management and decision makers. Because of the two logical sub-units this study has an embedded approach (Saunders et al. 2009). Twelve customers of Damen Shipyards working for
eight different organizations in eleven different countries were interviewed. There is also a differentiation in the experience with the Damen vessels, 6 months to 40 years. This provides good external validity. The table below lists the interviewees per organization, job title and country.
Respondent No. Organization Job Title Country
1 Naviera Integral Technical and Operations
manager Mexico
2 Mammoet Project Engineer Netherlands
3
N.E.C. (National energy corporation of Trinidad and Tobago)
Manager operating assets Trinidad & Tobago 4 Petrotrin Maintenance superintendent Trinidad & Tobago
5 Intertug Vice-president commercial Colombia, Brazil, Venezuela, Honduras, Costa Rica, Mexico
6 Intertug General manager Colombia
7 K.T.K. (Kompania di Tou
Korsou) General manager Curacao
8 Aruba ports authority Nautical advisor Aruba
9 Aruba ports authority Nautical director Aruba
10 Aruba ports authority Supervisor Aruba
11 Meyers group Financial director Panama
12 Meyers group Technical manager Panama
Table 3: Interviewee details Source: Author
The average interview was about 50 minutes and is recorded. Permission to record the interview was asked before the actual interview started.
The interview started with the following standardized introduction to set the boundaries and explain certain concepts:
First of all I would kindly ask you if I have permission to record this interview. This interview will be handled as confidential. Certain concepts will be used in this interview which will be explained before the actual interview starts.
Bonds between a supplier and a customer can be defined in several ways. For this research we describe two levels of bonds: structural and social bonds. Structural bond describe the bond at a corporate level resulting from economic, technical, time-based and knowledge or
other similar reasons. Social bonds include the feeling of likeness, acceptance, friendship, social interactivity etcetera. Another concept is service quality. Service quality can be separated into two categories: technical quality and functional quality. Technical service quality relates to the quality of the result or outcome of the service and functional service quality relates to the manner in or process by which a service is provided, i.e. how the service is delivered (Wetzels, de Ruyter and van Birgelen 1998). In other words: Technical quality is the
outcome of the service and functional quality is the “human” part of the service.
# Construct
1 All Can you give a description of your role within the organization? 2 All For how long do you / your company operate with Damen vessels? 3 All Please describe in your own words what makes Damen shipyards unique? 4 All What do you think of the product-service package as a whole? Why? 5 All How would you describe your companies’ relationship with Damen? Why? 6 All How would you describe your relationship with the Damen? Why?
7
Behavioral
intentions Is Damen a potential supplier for future purchases? Why? 8
Behavioral intentions
Would you recommend Damen to other companies? Why and how would you recommend Damen shipyards?
9 loyalty Would you describe your company as loyal towards Damen? Why? 10 loyalty
How would you describe the role of service quality for the earned loyalty of your company towards Damen shipyards?
11 loyalty
Is your loyalty earned with the technical or the human aspect of the service quality? Or both? Why?
12 Trust Can you rely on Damen as your supplier? Why? (as a company / as individuals) 13
Trust How would you describe the effect of service products / quality on your trust in Damen vessels?
14
Trust How would you describe your feeling of likeness, acceptance, friendship, social interactivity with Damen shipyards? And Damen Services?
15 Trust How can a supplier as Damen increase these social bonds?
16 Satisfaction Is your company satisfied with the Damen vessels? Why? 17 Satisfaction
Are you (and your company) satisfied with the services quality? (people and technical part) Why?
18 Service quality
What is your opinion about Damen’s approach to services? (warranty, after sales, commercial projects etc)
19 Service quality How would you describe the quality of the service? 20 Service quality
How would you describe the impact of the technical quality of the service on a corporate level?
21 Service quality
How would you describe the effect of satisfaction enhanced by service quality on your opinion regarding Damen shipyards?
22 Service quality
How would you describe the actions taken by Damen services in case of product failure during the warranty period?
23 Service quality
How would you describe the actions taken by Damen services in case of product failure after the warranty period?
24 Product quality How would you describe the quality of the vessel?
Optional:
25 Trust
Damen always thinks about your companies welfare and will never take unexpected actions which negatively impact the company. Do you agree? Why?
26 Trust Damen stands by its word. Do you agree? Why? Table 4: Interview questions and constructs.
Source: Author
3.4
Data analysis
The interviews are audio recorded. The interview had to be transcribed first before analyzing the data. This improves the reliability of this study (Gibbert et al. 2008). The data analysis is done through content analysis. Content analysis is “a careful, detailed, systematic examination and interpretation of data in an effort to identify patterns, themes, biases, and meanings” (Berg &
Latin 2008; Leedy & Ormrod 2005; Neuendorf 2002 in Berg 2009). A coding scheme is used to analyze the
data which contains the following:
Topic 1 Product quality 2 Service quality 3 Satisfaction 4 Trust 5 Loyalty 6 Behavioral intentions
Topic Effect on Label Fragment [No.] Respondent No.
1 [#] 2 [#] 3 [#] 4 [#] 5 [#] 6 [#]
Table 5: Coding scheme structure Source: Author
Three tactics are used as described by Miles and Huberman (1994); noting patterns, noting relations between variables and finding intervening variables. The reliability is ensured, on basis of the four validity and reliability criteria of Gibbert, Winfried and Wicki (2008): Internal validity Construct validity External validity Rigorness The theoretical overview describes current knowledge about constructs and correlations (research framework) Results are compared with literature Semi structured interviews Interviewees with different specializations and working in different organizations in different fields of expertise. Research is transparent as interviews are transcribed in detail Probing questions to find out exactly what the interviewee means. And finally summarizing the answers
Table 6: Validity and reliability criteria Source: Gibbert, Winfried and Wicki (2008)
4
Findings
This chapter is divided into several sections which are based on the theoretical design. Each section will start with general findings of that construct followed by the moderating or
mediating effects on the dependent variables. The coding scheme which is used to analyze the interviews can be found in appendix 3.
4.1
Quality
For this research quality is divided into product and service quality in order to investigate their relationship and effect on customer intentions as described in chapter 2. During the interviews it became clear that the objective and perceived product quality in combination with the service quality before, during and after the delivery of the vessel are unique in the market and have a big impact on the relationship and behavioral intentions of the customer.
4.1.1 Product quality
The serviceability of the vessels is good because of the standardized design. Due to the standardization the customer, operating multiple vessels, is able to minimize the stock of spare parts, to reduce the number of brands and suppliers and hence to reduce cost. This standardization has also a positive effect on the conformance thanks to the global validation possibilities. The standard models are proved, trialed and improved upon.
Damen’s shipyards are spread around the world as described in appendix 2. The
interviewees had scattered opinions about this diversity in building locations. Thirty percent of the respondents think that it has a negative impact on the product quality when you build in Asia like Damen shipyards does. Seventy percent think that Damen shipyards maintains a good product quality around the globe but their preference is one built in Holland instead of – for example – China, provided that the cost are equal. In other words: the building location influences the perceived or expected product quality. One customer in particular mentioned
