Serqual in Ghanaian Shipping Industry

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CHAPTER ONE

GENERAL INTRODUCTION

1.1 Background to the Study

During the past decade, the service sector in Ghana has undergone major changes mainly

through the sector structural adjustment programme as part of the economic recovery

programme. Moreover, globalisation, mergers and acquisitions, and the emergence of new

technologies have contributed dramatically to stiffer competition and pressures on profitability.

In such a competitive marketplace, attracting profitable customers is an obligation of all

managers. The shipping industry is a profit-seeking institution that must provide acceptable

returns to shareholders.

Business marketers have much to gain from retention marketing. Business customers tend to be

fewer and more valuable, meaning an organization cannot afford to lose even one customer. But

how do you keep your customers active and buying from you. Basically, customers are assets

that need to be acquired before they can be managed for profit. Unless you acquire these

important assets, survival of the organization is meaningless. That is the more reason why efforts

are jeered towards retaining the consumers of an organization

The service industry in Ghana has come under intense competition in recent years. Excellent

service is therefore required to differentiate offerings in the market place. Excellent service will



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only be defined by the experience of the customer. The question now is, what is required to

attract, maintain and excite customers in the shipping industry in Ghana?

Customers are the heart of every successful business and therefore businesses need to

concentrate on customers now more than ever.

Service quality is key to any business and is one of the critical areas where a company can gain

competitive advantage.

Service quality can be used as a strategic differentiator to build a distinctive advantage which

competitors would find difficult to copy and many service sector organizations including the

shipping industry have begun to see service quality as a source of sustainable competitive

advantage. The focus on service quality would enable management to better direct their

resources to improve areas that have the most impact on customer perceptions of service quality.

A lot of researchers have devoted time to studying service quality and its relationship to critical

business outcomes. To this end, a number of studies have addressed the relationship between

service quality and customer satisfaction and it is generally believed that higher levels of service

quality lead to higher levels of customer satisfaction. The increase in the number of service

quality-customer satisfaction studies over the past few years indicates that the concept of quality

improvement has become more important year by year in the service industry and stresses the

importance of the customer’s views as an essential tool in the process of monitoring and

improving the quality of services.

Customer’s service quality perceptions are believed to influence customer satisfaction positively,

which in turn positively influences the customer’s decision to choose a specific service provider.

Customer satisfaction is the feeling or attitude of a customer towards a product or a service after



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it has been used. Customer satisfaction is said to be a key influence in the formation of a

customer’s future purchase intentions.

On the basis of the above considerations, the researcher will seek to examine the quality of

service delivery in the shipping industry using the SERVQUAL model, determine the quality

gaps and make recommendations for improvement, given the fact that only a handful of studies

have been conducted that provide insight into the quality of service in the shipping industry.

1.2 Statement of the Problem

The shipping industry like any other service industry’s goal is to provide services that satisfy the

needs of its customers. The key to satisfying these customers is to know what exactly the

customer requires, what is important to him/her and consistently delivering at a high level.

Contrary to the above scenario, the researcher found out from Maersk Ghana Limited,

Mediterranean Shipping Company (Ghana) and Delmas Shipping Ghana limited that there

continues to be complaints about the quality of service in the shipping industry. Even with the

recent huge dollar investments with the recent introduction of Maersk Line’s 4500 TEU

WAFMAX vessel service, MSC’s direct Europe service and Delmas new vessel sharing

agreements, there still seems to be a sense of dissatisfaction with these organizations. This

dissatisfaction may have adverse effects on the customer loyalty, retention and the profitability

of these organizations.

Shipping is much more than the transportation of goods by sea from point A to point B. Shipping

is a service which in addition to movement of goods from one location to the other involves the

interaction between the service provider and the customer. Interactions may include the customer

http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&ved=0CDQQFjAA&url=http%3A%2F%2Fwww.mscghana.com%2F&ei=eqIbUeuvKMTMtAa5o4CgCQ&usg=AFQjCNGcFJXPiprRWFy6i2mEJ0Gjs85lDw&sig2=-K0jTYj10uoDZ6vwVbrFrg&bvm=bv.42261806,d.Yms




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seeking freight quotations, invoices, and transit times, bills of ladings and certificates from the

shipping line.

This study therefore seeks to assess the quality of service delivered and its impact on customer

satisfaction in the selected shipping lines under study.

Company Profi les

Maersk L ine is the core liner shipping business of Danish giant the A.P. Moller – Maersk Group,

and the leading container shipping company in the world. The Maersk Line fleet comprises more

than 600 vessels, a number of containers corresponding to more than 4,100,000 TEU, 325 offices

in 125 countries comprising around 25,000 employees. In Ghana, Maersk Line is represented by

Maersk Ghana Limited with 3 offices situated in Tema, Takoradi and Kumasi. Maersk Ghana

Limited has the largest market share in Ghana of 22%.

Mediterranean Shipping Company S.A. ( MSC ) is the world's second- largest shipping line in

terms of container vessel capacity. MSC operates 451 vessels and has a capacity of

2,281,000 TEU. The Geneva- based company serves 270 ports worldwide on the six continents

with 350 local offices and employing a total of 29,000 people. In Ghana, MSC has offices

situated in Takoradi and Tema with a market share of 16%.

CMA CGM S.A. is a French container transportation and shipping company. It is the third largest

shipping company in the world with 200 shipping routes between 400 ports in 150 different

countries with its headquarters in Marseille. CMA CGM is represented in Ghana by Delmas

Shipping Ghana and has offices in Tema, Takoradi & Kumasi with a market share of 10%.

http://en.wikipedia.org/wiki/Geneva

http://en.wikipedia.org/wiki/Containerization

http://en.wikipedia.org/wiki/Container_%28cargo%29#Biggest_ISO_container_companies

http://en.wikipedia.org/wiki/Marseille







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1.3 Purpose of the Study

The purpose of the study is to provide a better understanding of how satisfaction levels among

customers in the shipping industry is by measuring service quality using the SEQVUAL model,

determining the quality gaps and making recommendations for improvement of service quality.

1.4 Objectives of the Study

The study seeks to achieve the following specific objectives:

i. Assess service quality level at the selected Shipping Lines under study using the

ServQual model

ii. Identify the service quality strategies adopted by the selected Lines under study

iii. Identify the problems encountered with the implementation of service quality

strategies in the selected Lines under study.

iv. Make recommendations based on the findings of the study

1.5 Research Questions

i. What is the level of service quality delivered at the three Lines under study

ii. What are the service quality strategies adopted by the selected lines under study?

iii. What are the problems encountered with the implementation of these service

quality strategies at the selected Lines under study?

iv. What are the recommendations to be made based on the findings of the study?



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1.6 Significance of the Study

The study seeks to investigate what is really important to the customer and suggest ways to

improve customer satisfaction among customers of Maersk Ghana Limited, Mediterranean

Shipping Company (Ghana) and Delmas Shipping Ghana and also help management to be in a

better position to identify the shortcomings of the services rendered to customers.

Moreover, the study is significant to the marketing professionals. To these professionals, the

findings and recommendations will be used as tool for enhancing other similar researches and

also serve as a secondary source of information.

Finally, the study gives recommendations which when adopted and implemented would help

Maersk Ghana Limited, Mediterranean Shipping Company (Ghana) and Delmas fashion out

policies and tailor made services to address the deficiencies and pitfalls in their service delivery.

1.7 Scope of the Study

The study is limited to the three biggest shipping lines within the Tema metropolis. They are

Maersk Ghana Limited, Mediterranean Shipping Company (Ghana) and Delmas Shipping

Ghana. The researcher focuses on the customers who experience services from these shipping

lines. The areas of service quality covered in the study are the SERVQUAL dimensions, namely

tangibles, reliability, responsiveness, assurance and empathy in relation to the service encounters

and expectations of clients.











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1.8 Methodology

Questionnaires were administered to solicit for information from respondents mainly the

customers (shippers, consignees and freight forwarders) of these selected shipping lines. Also,

interviews were carried out to solicit information from management of these shipping lines.

Non-probabilistic sampling techniques with reference to convenient sampling were employed for

the selection of the respondents. In all, 300 respondents (shippers, consignees and freight

forwarders) of the selected shipping lines in Tema were served with questionnaires. Data

obtained was analyzed using statistical tools such as SPSS and Excel application software.

1.9 Organization of the Study

This thesis is divided into five chapters. In the first chapter, a background of the study followed

by the problem area discussion, research objectives, research questions, methodology, and

research limitations is presented. In chapter two, a presentation of literature review of the

previous studies and theories is presented in order to get a deeper insight of the subject matter.

Chapter three (3) deals with the research methodology adopted for the study. This entails the

research design, selection of subjects, sampling procedure, instrumentation, mode of data

collection, pre-testing and reliability and validity.

Chapter four (4) focuses on the data analysis and findings whilst the Chapter five (5) covers the

discussion of the findings and conclusions.

Other aspects of the research will include references, the list of related academic journals,

working paper series, past thesis and relevant books that will be consulted in the research. This

will be followed by appendices which contain attachment of the administered questionnaire.



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CHAPTER TWO

LITERATURE REVIEW

2.1 Introduction

This section of the research presented relevant literature relating to the subject matter.

Specifically it reviews the nature of the shipping industry, Service Quality concepts, Customer

Satisfaction, the service quality models and other relevant issues on the subject matter.

2.11 Overview of shipping industry

The shipping industry is inter-linked with the state of the global economy. It is complex and

notoriously volatile in nature. Shipping being highly dependent on trade flows across the globe

has seen cyclic booms and busts following the fluctuations in the world’s economy. The recent

economic turmoil has resulted in shrinking container trade as global demand for raw materials

and finished goods has also dived.

Currently, there are more than one million seafarers managing around 50,000 internationally

trading ships of various types around the globe. The basic types of ships include container ships,

bulk carriers, tankers, ferries, cruise ships and specialized ships. General cargo ships make up

about 45% of the world’s fleet in terms of deadweight tonnage (dwt), 25 % tankers, 14% bulk

carriers and 12% passenger ships. The remaining 4% includes ships of specialized nature.

The total world shipping tonnage is registered in more than 150 nations with Panama leading at

173 million tons followed by Liberia (79 million tons).

Nearly 80 shipping lines provide scheduled services to Ghanaian ports, and about 25 regularly

dock at the container terminals at Tema port. Liner shipping services are provided under



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‘conference’ and ‘rate agreements’ that relate to particular trades and cover markets including

ship scheduling and tariffs. For general cargo (containerized and break-bulk), shipping services

tend to be provided based on each separate voyage.

Shipping Lines in addition to the transportation of goods from port A to port B, offer a variety of

services. These include booking for space on the vessel, documentation of shipping instructions,

invoicing of freight and demurrage charges, issuance of bills of ladings, cargo releases and

customs manifest documentation. All these activities are services that require human interaction

between the service provider and the customer.

Company Profi les

Maersk L ine is the core liner shipping business of Danish giant the A.P. Moller – Maersk Group

and the leading container shipping company in the world. The Maersk Line fleet comprises more

than 600 vessels, a number of containers corresponding to more than 4,100,000 TEU, 325 offices

in 125 countries comprising of around 25,000 employees. In Ghana Maersk Line is represented

by Maersk Ghana Limited with 3 offices situated in Tema, Takoradi and Kumasi. Maersk Ghana

Limited has the largest market share in Ghana with 20%.

Mediterranean Shipping Company S.A. ( MSC ) is the world's second- largest shipping line in

terms of container vessel capacity. MSC operates 451 vessels and has a capacity of

2,281,000 TEU. The Geneva- based company serves 270 ports worldwide on six continents.

MSC has 350 local offices and employ a total of 29,000 people. In Ghana, MSC has offices

situated in Takoradi and Tema. MSC currently holds 16% share of the Ghanaian market.

CMA CGM S.A. is a French container transportation and shipping company. It is the third largest

shipping company in the world with 200 shipping routes between 400 ports in 150 different









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countries with its headquarters in Marseille. CMA CGM is represented in Ghana by Delmas

Shipping Ghana and has offices in Tema, Takoradi & Kumasi. Delmas currently hold a market

share of 9% in Ghana.

2.2.1 Characteristics of a Service

Bateson (1985) outlines four unique characteristics of a service to be intangibility, heterogeneity,

inseparability and perishability. Unlike a product where tangible cues exist to enable consumers

evaluate the quality of the product, the quality of the service is ascertained by parameters that

largely come under the domain of “experience‟ and “credence‟ properties and are as such

difficult to measure and evaluate (Zeithaml and Bitner, 2003).

2.2.1.1 Intangibility

Schneider and White (2004) were of the view that in service marketing and management the first

characteristic is intangibility. Service unlike physical products cannot be seen, tasted, felt, heard

or smelt before they are consumed. Since services are not tangible; they do not have physical

features that appeal to customer’s senses. Their evaluation is also not possible unlike goods, it is

not possible before the actual purchase. Lovelock and Wirtz (2004) underscore that, one of the

most interesting differences between goods and services relate to tangibility. Because goods are

tangible, marketing strategies typically emphasize the tangible benefit derived from consuming a

product. On the other hand, because service is intangible marketers often try to associate them

with something tangible.





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2.2.1.2 Inseparability

Service is inseparable due to the fact that, it cannot be separated from its providers. Thus the

service provider would become part of the service. Contact with consumers is very crucial for

ensuring service quality.

2.2.1.3 Heterogeneity

Another equally important characteristic is that service is variable in character. This means

service quality depends on those providing the service as well as where, when, who, and how the

service is provided (Kim et al. 2009). The quality of an individual employee’s service varies

according to his or her energy and frame and mind at the time of each customer interaction.

How a firm handles problems resulting from service variability can dramatically affect customer

perceptions of service quality.

2.2.1.4 Perishability

According to Brady and Cronin (2001), “perishability as a character of service can be explained

by the fact that service when provided cannot be stored for future use or sale.” It is therefore

worthwhile for marketers to study these characteristics vis-a-vis the attitude of customers in

order to minimize the uncertainty associated with service provided. In this way the information

needed to avoid making mistakes in delivering quality service to customers could be reduced.



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2.2 Conceptualization of Service quality

Service quality is a central issue in services marketing and has been discussed in a number of

writings even before the well-known SERVQUAL research by Parasuraman et al. (1988).

According to Zeithaml and Bitner (1996) service quality is “the delivery of excellent or superior

service relative to customer expectations”.

Service quality is recognized as a multi-dimensional construct (Pollack, 2008) and researchers

have listed a variety of service quality determinants (Gronroos, 1990; Johnston, 1997). Gronroos

(1990) postulated two types of service quality: technical quality (i.e. what the customers actually

received from the service), and functional quality (i.e. the manner in which the service is

delivered).

Lehtinen and Lehtinen (1991) claimed that there are three service quality dimensions, namely,

physical quality, corporate quality and interactive quality. The last dimension recognizes that

service quality arises from the interaction between the service provider and service receiver and

is therefore necessary to supplement the customer-centered view of service quality which has

been the dominant paradigm to date (Svensson, 2006).

Building upon Rust and Oliver’s (1994) work, Brady and Cronin (2001) advanced the

hierarchical conceptualization of service quality. It consists of three dimensions: outcome quality

(refers to the customer’s assessment of the core service.), interaction quality (refers to the

customer’s assessment of the service delivery process), and physical environment quality (refers

to the consumer’s evaluation of any tangible aspect related to the service.



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The most popular conceptualization of service quality is SERVQUAL. It features five

dimensions: tangibility, reliability, responsiveness, empathy and assurance (Parasuraman et al.,

1988). According to the model, service quality can be measured by comparing the service

expectations of customers with their perceptions of actual performance using SERVQUAL’S 22

questions. The physical service aspects such as appearance of employees, equipment and

facilities are classified as tangibles. Reliability refers to accurate, dependable and consistent

performance of the service. The remaining three represent aspects of interaction quality:

responsiveness means being prompt and willing to serve the customer, empathy involves caring

and personalized attention as well as understanding customer needs and convenient access to the

service. Lastly the dimension of assurance comprises the competence, courtesy and credibility of

staff which generate customer trust and confidence (Pollack, 2008).

2.3 Perceived Service Quality

Grönroos (1990) defined perceived service quality as the outcome of an evaluation process,

whereby the consumer compares his expectations with the service he has received, i.e. he puts

the perceived service against the expected service. The result of this process will be the

perceived quality of service. Perceived quality thus differs from objective quality, which

involves an objective assessment of a thing or an event on the basis of predetermined standards

that are measurable and verifiable (Zeithaml, 1988).



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2.4 Customer service delivery

Service scholars have long acknowledged the vital role service orientation plays in the delivery

of services (O'Connor et al., 2000; Chung and Schneider, 2002). Further support for the

importance of service orientation in service delivery can also be inferred from other service

quality management scholars (Bitner et al., 1994), who emphasize the critical role of employee

attitudes and behavior in the creation of quality in service interactions.

The term ‘service orientation’ is generally perceived as a nebulous term: It has commonly been

used to describe personality traits, attitudes, behaviours or a service culture which supports

quality service performance. Over the years, the literature on the subject has evolved into

diverse strands of thought such as service orientation at the individual level and service

orientation at the organizational level (Homburg et al., 2002).

Service experiences are the outcomes of interactions between organizations, related

systems/processes, service employees and customers. Considerable research in marketing and

management has examined customer satisfaction with service experiences (Keaveney, 1995;

Ostrom and Iacobucci, 1995). Predominantly, most researches have focused on the roles of

employees, service processes and tangibles in creating quality service experiences for customers.

However, in many services, customers themselves have vital roles to play in creating service

outcomes and ultimately enhancing or detracting from their own satisfaction and the value

received.

This is true whether the customer is an end consumer (for example, consumers of health care,

education, personal care, or legal services) or a business (for example, organizations purchasing

maintenance, insurance, computer consulting or training services). In all of these examples,



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customers themselves participate at some level in creating the service and ensuring their own

satisfaction.

2.5 Empirical evidence

Vinh (2008), Kee-Kuo et al. (2009), Miremadi et al. (2011) have investigated in the area of

customer satisfaction. For instance, Miremadi et al. (2011) studied on the customer satisfaction

in port industry, with specific reference to Iranian Shipping. Increasing competition is forcing

businesses to pay much more attention to satisfying customer’s needs; thus trying to measure the

customer satisfaction in maritime transport industry in Iran.

Since Maritime transport is considered as one of the most important sectors in Iran. The purpose

of this study aimed at finding out the level of service quality among two most prominent

shipping companies, thus Islamic Republic of Iran Shipping Line and Maersk Line, port operator

and freight forwarders.

The purpose of this study is to measure expectation and perception of customers in the maritime

industry in Iran. The primary step is to investigate about SERVQUAL definition in maritime

industry. The study used a sample of 25 shipping companies, port operators and freight

forwarders/logistics service providers, employing and using the questionnaire obtain the score

for each of the 22 Expectation statements. Through an in-depth interview with the port manager,



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the researcher discovered the most important factors in SERVQUAL method. Research found

out the comprehensive study and found out the five generic dimensions (tangible, responsive,

assurance, empathy, reliability) which are applicable in port industry.

The researcher discovered that there was insufficient commitment to the offering of high quality

services and that maritime transport should impose standards and missions. Furthermore,

researcher found out that ambiguity in processes leads to conflict in delivering services to the

customer and that maritime transport needed an integrated control system for eliminating these

problems and also a redefinition of their processes. Finally, the study found out that, there is a

significant gap between our customer Expectations and Manager Perceptions in the Iranian port

industry. The researcher recommended that by implementing profound marketing research about

service evaluation periodically and the professional training for staff to enhance their knowledge

these issues could be addressed.

Ultimately, Witty et al. (2004) suggested that organizations must make it easier for employees to

perform their jobs and serve customers, as this endangers customer loyalty and afford

opportunities to cross- and up-sell additional products and services. What is needed is a robust

infrastructure that incorporates automated processes and tools to guarantee that the right people

have access to the right information. This not only ensures productivity but safeguards valuable

information assets while freeing your front- and back-office employees to focus on strategic

activities that ensure customer satisfaction and higher revenues (Witty et al., 2004).



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2.6 Service Quality, Customer Satisfaction and Customer Loyalty

Service quality is a concept that has aroused considerable interest and debate in research. There

are difficulties defining and measuring it with no overall consensus emerging on either

(Wisniewski, 2001). The concept of service quality originates from consumer behavior and

confirmation/disconfirmation paradigm (Gronroos, 1992). While Eshghi et al. (2008) define

service quality as the overall assessment of a service by the customers.

Indeed, customer satisfaction has for many years been perceived as key in determining why

customers leave or stay with an organization. Organizations’ need to know how to keep their

customers, even if they appear to be satisfied. Reichheld (1996) suggests that unsatisfied

customers may choose not to defect, because they do not expect to receive better service

elsewhere. Additionally, satisfied customers may look for other providers because they believe

they might receive better service elsewhere. However, keeping customers is also dependent on a

number of other factors.

Kotler and Armstrong (2012) postulate that satisfaction is the post-purchase evaluation of

products or services taking into consideration the expectations. Researchers are divided over the

antecedents of service quality and satisfaction. Whilst some believe service quality leads to

satisfaction, others think otherwise (Ting, 2004). The studies of Gilbert and Veloutsou (2006)

and Sulieman (2011) suggest service quality leads to customer satisfaction. To achieve a high

level of customer satisfaction, most researchers suggest that a high level of service quality should

be delivered by the service provider as service quality is normally considered an antecedent of

customer satisfaction. As service quality improves, the probability of customer satisfaction

increases.



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Service quality is an important tool to measure customer satisfaction (Hazlina et al., 2011).

Empirical studies show that the quality of service offered is related to overall satisfaction of the

customer. According to Jamal and Anastasiadou (2009), reliability, tangibility and empathy

positively related with customer satisfaction. Sulieman (2011) found that reliability, tangibility,

responsiveness and assurance have significant and positive relationship with customer

satisfaction. Meanwhile empathy was found to have a significant and negative effect on customer

satisfaction.

Moreover, the result of Ravichandran et al (2010) indicates responsiveness is the only significant

dimension of service quality that affects the satisfaction of customers positively. Ioanna (2002)

further proposed that product differentiation is impossible in a competitive environment like the

shipping industry. Shipping companies everywhere are delivering the same products/services to

customers. Shipping company freight rates are fixed and driven by the marketplace. Thus,

management tends to differentiate their firm from competitors through service quality. Service

quality is an imperative element impacting customers’ satisfaction level

In addition, a satisfied customer is six times more likely to repurchase a product and share his

experience with five or six other people (Grönroos, 2000); further unsatisfied customer can

banish more business from the organization than ten highly satisfied customers do (Mohsan,

2011). With higher customer satisfaction the level of loyalty increases. Tee et al. (2012) found a

significant positive relationship between customer satisfaction and customer loyalty. Other

several studies have indeed found satisfaction to be a leading factor in determining loyalty (Sit et

al., 2009; Mensah, 2010; He and Song, 2009).



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Customer loyalty is a deeply held commitment to re-buy or re-patronize a preferred product or

service consistently in the future, thereby causing repetitive purchasing of the same brand,

despite situational influences and marketing efforts. It can also be defined as the degree to which

a customer exhibits repeat purchasing behavior from a service provider, possesses a positive

attitudinal disposition toward the provider, and considers using this provider when a need for this

service arises.

Loyalty is therefore an attitude or behavior that customers explicitly vocalize or exhibit. Loyalty

has both behavioral and attitudinal dimensions (Auka, 2012). The behavioral repurchase consists

of repeated purchase of product while attitudinal loyalty refers to attitudinal commitment or

favorable attitude toward a product resulting in repeat purchasing behavior. It is a biased

purchase response resulting from an evaluative attitude favoring the purchase. Loyalty is thus

viewed as the customer’s demonstration of faithful adherence to an organization despite the

occasional error or indifferent services (Auka, 2012).

Dick and Basu (1994) conceptualize loyalty as the strength between repeat patronage and

relative attitude which results from comparing a particular brand with competing brands.

Customer loyalty is strong when a high relative attitude leads to repeat buying. A low relative

attitude leads to low repeat purchase which equals no loyalty. Loyalty in service businesses

refers to the customer’s commitment to do business with a particular organization, purchasing

their products repeatedly and recommending others to the organization’s products. Anderson and

Jacobson (2000) says that customer loyalty is actually the result of an organization creating a

benefit for customer so that they will maintain or increase their purchases from the organization.



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They indicate that true loyalty is created when the customer becomes an advocate for the

organization without incentives.

2.7 CRITICISM AGAINST THE SERVQUAL MODEL

Many criticisms have been leveled against the SERVQUAL model. One of the major

shortcomings of the model is that the five service quality dimensions are not universal and

cannot be applied in all service industries, (Ladhari, 2009). They contended that it depends on

the context in which the dimensions are applied since the definitions and the number differ. For

instance, the results of the study of Babakus & Boller (1992) on an electric and gas utility

company using SERVQUAL suggest that the dimension of this industry is one and not five. This

has been confirmed by the study of Ladhari (2009). In his case only two dimensions were found.

Buttle (1996) opines that there is but little proof that customers evaluate the quality of service on

the basis of the difference between perceptions and expectations. Alluding to this, Ladhari

(2009) intimates that researchers advance that the difference in scores do not give any additional

information beyond what already existed in the perceptions’ items. This has been supported by

the study of Babakus & Boller (1992). The results showed that the perceptions’ score was the

dominant contributor to the gap scores. Buttle (1996) further posits that the model dwells on the

process delivery but not on the outcome of the service encounter. Buttle again punched holes in

the Likert-scale. He contended that, it is defective or flawed whilst the use of the two sets of

questionnaires are tiresome and confusing. Though the model has been credited with the fact that

it furnishes information concerning the gaps between perceptions and expectations of the quality

of service, it fails to provide clues to the closure of these gaps. Kumar et al (2009) put forward



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that, the five service quality dimensions are highly inter-correlated or related. Ladhari (2009)

accentuated that the factor-loading pattern of the model unearths some weaknesses in the

convergent validity in some studies. Thus, most of the SERVQUAL’s 22 items have higher

loadings on dimensions that are different from those suggested by those who developed the

model.

2.8 SUPPORTERS OF THE SERVEQUAL MODEL

In spite to the numerous criticisms, SERVQUAL has been adopted for conducting many studies.

It is therefore held in high esteem (Buttle, 1996). The model in general lays bare the strengths

and weaknesses of the quality of service provided by organizations. In this way, areas of

weaknesses can be prioritized by the organization. Another important merit of the model is that it

serves as the standard for organizations to measure the quality of service in the same industry.

Apart from this it serves as a signal to management to take into consideration the perceptions of

both management and customers. It also helps management to know customers’ impressions

about the service being purchased. The analysis of the quality gaps assist management

immensely to draw their strategies to meet customers’ expectations (Tan & Pawitra, 2001).



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CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Introduction

The purpose of this chapter is to provide clarification and justification for the research methods

used in the study. The chapter begins with the research design, strategy etc. The chapter also

explains the questionnaire, tools used to collect the data and how the sample was analyzed.

3.2 Research Design

The design of a research work details the general plan for the conduct of the research. Detailed

below are the various methods used in this research.

3.2.1 Quantitative and Qualitative Approach

The research problem as well as the information that has been collected determines the choice of

methodology that is being used. It could either be qualitative or quantitative. Creswell (2002)

states, “A quantitative approach refers to the systematic empirical investigation of social

phenomena via statistical, mathematical or computational techniques.[1]

The objective of

quantitative research is to develop and employ mathematical models, theories and/or hypotheses

pertaining to phenomena. It employs strategies of inquiry such as experiments and surveys, and

collects data on predetermined instruments that yield statistical data.

http://en.wikipedia.org/wiki/Quantitative_research#cite_note-Given_2008-1



http://en.wikipedia.org/wiki/Mathematical_model

http://en.wikipedia.org/wiki/Theories

http://en.wikipedia.org/wiki/Hypotheses

http://en.wikipedia.org/wiki/Hypotheses

http://en.wikipedia.org/wiki/Theories

http://en.wikipedia.org/wiki/Mathematical_model




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Researchers also describe qualitative data as referring to all non-numeric data or data that has not

been quantified. Qualitative data can range from “a short list of responses to open-ended

questions in an online survey to more complex data such as transcripts of in-depth interviews or

entire policy documents“.

Qualitative research also employs strategies of inquiry such as “narratives, phenomenology,

ethnographies, grounded theory studies, or case studies” (Creswell, 2002). The researcher

collects “open-ended, emerging data with the primary intent of developing themes from the data”

(Creswell, 2002).

Yin (2003) states that "the main reason for using different approaches by researchers is the type

and the purpose of the research which has been chosen, and under what category, it is

quantitative or qualitative". Occasionally researchers use these two approaches simultaneously.

Following from the research purpose and research questions, this research was conducted under

both quantitative and qualitative approaches. Case study and survey were used in this research

because it was suitable for the research aims, which helped the researcher to providing a general

understanding of the research purpose.

The adoption of both qualitative and quantitative approaches by the researcher is justifiable since

the researcher collects data from different groups of respondents using different data collection

and analysis methods. For instance on the customers who were surveyed, data was collected

quantitatively following a predetermined set of measurement scales (based on an already

developed ServQual model).



24

Also on the part of the respondents from Management of the sampled shipping lines, qualitative

data collection methods were used. This afforded the researcher the opportunity to understand

the strategies used and the challenges encountered their quest to offer quality service to their

customers. Thus open ended questionnaires and in-depth interview were used for this purpose.

3.2.2 Descriptive research as the Research Purpose

The research purpose is a broad statement of what the research hopes to achieve. With respect to

purpose, research could be broadly divided into exploratory, descriptive and explanatory

(Saunders et al 2000, 2007).

The researcher sought to describe or portray a reality regarding customers’ satisfaction with

service quality delivery at the sampled Lines and to better understand those service quality

dimensions that customers are satisfied or dissatisfied with, so it was descriptive.

3.2.3 Research Strategy

Research strategy is a general plan of how to answer the research questions. It is mainly guided

by the research questions and research objectives, among other things. It determines to a large

extent the choice of data collection methods. The main research strategies are action research,

ethnographic studies, experiment, survey, case study, grounded theory or archival research

(Saunders et a12000, 2007; Malhotra and Birks' 2007). However this research adopted only case

study and survey as the strategies for the study. These strategies can be combined in a single



25

study for a particular purpose (Saunders et al 2007). In this study the researcher adopted case

study and survey strategies because it sought the opinion of a population about a specific subject

matter and it combined the use of qualitative and quantitative techniques.

Brief descriptions of the chosen strategies are presented below:

Survey: A survey is a type of method associated with deductive approach and is

conducted usually in business and management research to collect data that seek a

characteristic or the opinion of a target population. It allows for the collection of large

amount of data from a large population economically. It is most frequently conducted to

answer research questions relating to 'who, what, how much and how many' involved in a

problem of study. It often uses structured questionnaire and interviews.

Case study: A case study is "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" (Saunders et al 2007). It is mostly used where the purpose

is to gain a rich and an in-depth understanding of the context of the research and the

processes being enacted (Saunders et al 2007). It therefore uses multiple data collection

sources, termed triangulation. Mostly it is related explanatory and exploratory research

that seeks to find out 'why', 'what' and 'how' issues in the case context. (Yin 2003 in

Saunders et al) maintains that case studies can be single or multiple, holistic or

embedded.



26

3.3 Sources and Type of Data

Data refer to factual records, which may take the form of numbers, symbols, text, images or

sounds, used as primary sources for research, and that are commonly accepted in the research

community as necessary to validate research findings (Yin, 2003).

3.3.1 Source of Data

Data for research may come from several sources including: documents, archival records,

interviews, direct observation and participant-observation (Saunders, 2007). It should be noted

that no single source has an advantage over all the others. In fact, all the sources are highly

complementary, and a good case will therefore incorporate as many sources as possible

(Saunders et al 2007).

This study combined questionnaire administration and in-depth interviews as the instruments for

data collection.

3.3.2 Type of Data

In today's world correct information is the key to success. Data or information is of two types;

primary data and secondary data.

Primary data: are data from original source. That is first-hand information collected

from the field that has not been used before. They are usually collected through the use of

questionnaires, interviews, observation, etc,

http://www.blurtit.com/q649409.html




27

Secondary data: are also known as 'second hand' data. They are data which already exist

and might have been used before for some purpose other than the current use. They may

be from books, thesis, reports, journals, magazines, newspapers, bulletins etc.

In this study only primary data were used and were collected through in-depth interviews and

questionnaire administration.

3.4 Population and Sample Size

A population refers to the complete set of cases or elements from which a sample is taken

(Saunders et. al., 2007). The population for this study consisted of all customers who used the

services of the selected shipping lines in the Tema metropolis during the period of the study as

well as the various managers of these lines.

3.4.1 Sample Size for the Study

According to Saunders et al., (2007) conducting a census (that is using the entire population for a

study) is most often than not impractical and costly when the research is dealing with a large

population for which he or she lacks absolute control of the entities in the population and in

particular when the population is defined as infinite. Thus it is often the case that the researcher

takes a part of the population and study. That is the researcher takes a sample out of the entire

population as a representative of the whole population and used the results for analysis.

In this study, a sample size of 300 was used for the study. This was drawn from the three

selected shipping lines.





28

3.5 Sampling Techniques.

Sampling is a survey-based research where researcher needs to analyze the sample about a

population to answer the research questions or meet the research objectives. Sampling is

important if budget and time constraints prevent research from surveying the entire population.

Sample gives higher accuracy and fast result.

Sampling techniques can be classified into two types (Saunders, et al, 2007):

• Probability Sampling

• Non-Probability Sampling

Probability Sampling

In probability sampling , the sample is selected in such a way that each unit within the population

has a known chance of being selected. The advantage of probability sampling is that sampling

error can be calculated. Sampling error is the degree to which a sample might differ from the

population Probability method includes.

• Random sampling

• Systematic sampling

• Stratified sampling

Non-Probability Sampling

In non-probability sampling, the sample is selected in such a way that the chance of each unit

within the population being selected is unknown. Indeed, the selection of the subjects is random

or subjective, since the researcher relies on his/her experience and judgment. As a result, there are

no statistical techniques that allow for the measurement of sampling error, and the degree to



29

which the sample differs from the population remains unknown and therefore it is not appropriate

to project the sample characteristics to the population. Non-probability includes:

• Convenience sampling

• Judgment sampling

• Quota sampling

• Snowball sampling.

However only those used in this study (convenience and judgmental sampling) are presented in

the following subsections.

3.6.2a Convenience sampling

Convenience sampling is used when the researcher is interested in getting an inexpensive

approximation of the truth. As the name implies, the sample is selected because they are

convenient. This non-probability method is often used during preliminary research efforts to get a

gross estimate of the results, without incurring the cost or time required to select a random sample

(Saunders, et al, 2007).

3.6.2b Judgment sampling

Judgment sampling is a common non-probability method. The researcher selects the sample based

on judgment. This is usually an extension of convenience sampling. For example, a researcher

may decide to draw the entire sample from one "representative" city, even though the population

includes more than one city. When using this method, the researcher must be confident that the

chosen sample is truly representative of the entire population (Saunders, et al, 2007).



30

3.7 Data Collection tools and Procedures

Questionnaires are intensively used in the service industry and considered as the major tool for

measuring customer satisfaction. The questionnaire was prepared as a primary instrument of data

collection on customers and divided into the following two main sections: section A and section

B.

Section (A) consisted of items which presented general information about the customer and

consists of: customer’s role, customer’s chosen shipping line and how often customer frequents

the line

Section (B) includes 5 parts of 22 items. Part 1 consisted of 4 items 1-4 designed to assess

customer's expectations and perceptions of service delivered at shipping lines in relation to the

Tangibility dimension of service quality.

Part 2 of the section B consisted of 5 items designed to assess customers’ expectations and

perceptions of service delivery in the selected shipping lines in relation to the Reliability

dimension of the ServQual model adopted in this study. The third part of the section B also

consisted of 4 items corresponding to the Responsiveness dimension of the ServQual instrument

used. The fourth part was made up of 4 items representing assurance dimension of ServQual and

the final part of section B included 5 items in relation to the Empathy dimension of the ServQual

instrument. Thus each part was carefully designed to have the basic five dimensions. The 22

items follow the basic five dimensions of the SERVQUAL instrument developed by

Parasuraman et al (1988). The measurement scale used was 1-5 points Likert scale, ranging from

strongly disagree (1) to strongly agree (5). Usually in the studies of satisfaction this scale is



31

widely used and is considered valid to show the overall assessment of the organization by the

respondent (Yin, 2003). The average score for each dimension as well as the score gaps were

determined.

A total of 300 questionnaires were distributed at the three Lines and administered to customers.

The questionnaires were administered only at the customer service halls of the selected case

study shipping lines. Line management of the selected shipping lines were also interviewed.

3.8 Pilot Testing of the Survey Questionnaire

Ten customers were used as a sample for the pilot test. They were all customers from the Maersk

Ghana Limited. This was done to ensure that there is no discrepancy in the survey. It also served

to ensure that everything in the survey would be understood and was clear as well as establishing

the effectiveness of the questions. The purpose of the study was explained to the chosen

customers to ensure the survey was clear in its intent. The customers were assured of their

anonymity as well as the fact that the information gathered in the survey would be discreet.

3.9 Data Analysis

The data analysis will be conducted using SPSS v. 19, the Software Package for Social Sciences,

where the findings, will be explained by means of different statistical analyses and presented in

various graphical and tabular forms in Chapter 4 to support the analysis and interpretation.



32

CHAPTER FOUR

PRESENTATION OF RESULTS ANALYSIS AND DISCUSSION

4.1 Introduction

In this chapter, the researcher presents and analyses the results obtained from the study. Data was

collected from the customers in the shipping industry, specifically Maersk Ghana Limited,

Mediterranean Shipping Company (Ghana) and Delmas Shipping Ghana limited located in

Tema.

In order to know the categorization of the respondents, respondents were grouped to indicate

their areas of specialty.

The detailed results are presented in table 4.1 below.

Table 4.1 Role of respondents

Responses Frequency Percent

Forwarder 100 43.5

Shipper 72 31.3

Consignee 58 25.2

Total 230 100.0

Source: Field data, July, 2013.

From table 4.1 most of the respondents were confirmed to be forwarders.above. 100 (43.5%) of

them were forwarders, 72 (31.3%) shippers and the remaining 58 (25.2%) were consignees..

The figure below illustrates the results in the table 4.1.





33

Fig. 4.1: Categorization of respondents

The number of response from customers per shipping Line was also investigated by the

researcher. The results are presented in table 4.2 below.

Table 4.2. Shipping Line of Respondent


CMA CGM 68 29.6%Mediterranean Shipping Company 72 31.3%

Maersk Ghana Limited 90 39.1%

Total 230 100.0%


The shipping line with the highest number of respondents was Maersk Ghana Limited. This

accounted for 90 (39.1%) of the total respondents in the survey. This was followed by

respondents in the Mediterranean shipping company which accounted for 72 (31.3%) of

respondents and then Delmas Shipping with 68 (29.6%) respondents.

0

20

40

60

80

100

Forwarder Shipper Consignee

Categorization of Respondents

Frequency

Percent



34

Below is the graphical illustration (Fig. 4.2).

Fig. 4.2: Respondents per Shipping Line

In order better understand whether respondents had an in depth experience in services offered by

the Lines under study, the researcher also investigated the frequency of visits by respondents to

three sampled Lines.

Table 4.3: First time of visit to the line


Visiting for First Time (Yes) 28 12.17

Visiting for First Time (No) 202 87.83

Total 230 100.0


It could be observed from table 4.3 above, that most of the respondents had been at the line more

than once and that it was not their first time visiting. 202 (87.83%) of the respondents indicated

that it was not their first time of being at the line while the remaining 28 (12.17%) indicated that

it was their first time at the line

CMA CGM

30%

Mediterranean

Shipping

Company

31%

Maersk Ghana

Limited

39%

Customer breakdown per Shipping Line



35

Adding to this, the researcher also sought to break down the regularity of visits by the

respondents. The results are presented in table 4.4 below.

Table 4.4: Frequency of visit to the shipping lines


Weekly 104 45.2

Monthly 95 41.2

Once a year 31 16.6

Total 230 100.0


As to the regularity of visits to the shipping line by the respondents, 104 (45.2%) indicated that

they visit weekly, whiles 95 (41.2%) of the respondents indicated that they visit the shipping line

monthly. Also 31 (16.6 %) of the respondents said they visited the shipping line once in a year.

The figure below illustrates the results in Table 4.4

Fig. 4.3: Regularity of visit to the shipping lines

104

88

3845.2

38.2

16.6

Weekly Monthly Once a year

Regularity of visit to the shipping linesFrequency Percent



36

4.2 Reliability analysis

The reliability result produced by SPSS 19.0 indicated that the questionnaire had a total

reliability coefficient (Cronbach’s alpha) of 0.752. Again, Cronbach’s alpha value was above 0.7

for all the service quality dimensions. Guieford (1965) observes that a Cronbach’s alpha in the

range of 0.55 - 0.7 is acceptable, Cronbach’s above 0.70 indicates high reliability, and

modification of the research tool is required if the coefficient is below 0.54. It can be seen that

the reliability coefficients of the questionnaire are within the acceptable range. Overall, the

questionnaire results feature a certain degree of consistency and stability and will produce

meaningful findings in subsequent analyses.

4.3 Analysis of Service Quality Factors

Parasuraman et al, (1988) five service quality indicators were adopted for this study. The

dimensions are tangibility, reliability, responsiveness, assurance and empathy. This research

sought to determine the perceptions and expectations of the customers on the quality of the

services provided by the various shipping companies in this study.

The Service Quality was determined by su btracting the respondents’ expectations (E)

(importance attached to each of the service quality attribute assigned to the various indicators

prior to usage) from their perception of the actual performance (P) of the various attributes based

on their experience with the shipping companies. Thus, the quality gap according to Parasuraman

et al (1988) is the difference between perception (P) and expectation (E). (Q= P-E). A positive

SQ value indicates good service quality and thus leads to customers’ satisfaction. A negative SQ



37

value indicates poor service quality and that leads to customers’ dissatisfaction. The results from

the field survey on the sampled shipping companies are presented in the subsequent tables

below.

4.3.1 TANGIBILITY

Tangibility deals with the appearance of physical facilities, equipment, appearance of personnel,

and communication materials. Descriptive statistics were taken based on the expectations and the

perceptions of the customers of the sampled shipping companies. The responses were measured

on a five point Likert scale ranging from strongly Agree coded (5) to strongly disagree (1)

Table 4.5: Descriptive Statistics (Tangibility)

TANGIBILITY

N Mean (E) Mean (P) Gap

T1 - Excellent shipping lines should

have modern looking facilities that

are visually appealing (vessels,containers, buildings, computers e.t.c)

230 3.4756 4.5374 1.0618

T2 - Excellent shipping lines should

be conveniently located for easyaccess

230 3.6435 3.8565 0.213

T3 - Employees at excellent shippinglines should be neat and professional

in appearance

230 3.5261 3.8000 0.2739

T4 -Excellent shipping lines should

have good ambient conditions 230 4.3043 3.7174 -0.5869

OVERALL MEAN 3.7373 3.9778 0.2405

Source: Field data, July, 2013



38

The results presented in table 4.5 shows the respondents in the survey perceived the tangibility

dimension of service quality to be of good quality. Customers of the selected shipping lines

indicated a performance rating of 3.977 and expectation rating 3.737 for tangibility. Overall, the

results show a service quality rate of 0.240. The positive value is an indication of the level of

satisfaction among respondents concerning the physical aspect of the shipping companies in the

survey. On the individual attributes, the study reveals a positive rating for Service quality with

every single attribute of tangibility except the attribute of “good conditions which include

temperature, ventilation, noise, lighting and ambience” which had a negative value (-0.5869).

The results also revealed that the attribute “shipping lines should have modern looking facilities

that are appealing” had the highest value of 1.0618 indicating that respondents were satisfied

with the state of facililities.

4.3.2 RELIABILITY

Reliability concerns the ability with which the service provider can deliver the service

dependably and accurately. The results from the survey on the reliability dimension also

measured on the same five point Likert scale are summarized in the table below.



39

Table 4.6 Descriptive Statistics (Reliability)

RELIABILITY N Mean(E) Mean(P) Gap

R 1 - When excellent shipping lines promise to

do something by a certain time, they do. (e.g.vessel arrival, issue b/ls and invoices)

230 4.8491 2.6174 -2.2317

R 2 - Excellent shipping lines should showsincere interest in solving customer related

problems

230 4.7348 3.3565 -1.3783

R 3 – Excellent shipping companies should

perform services right the first time 230 4.6739 2.9391 -1.7348

R 4 – Excellent shipping companies should provide services at the time they promise

230 4.7686 2.9957-1.7729

R 5 -Employees of excellent shipping

companies should be trustworthy in handlingrespondents problems

230 4.6652 3.1783 -1.4869

OVERALL MEAN 4.7383 3.0174 -1.7209


From Table 4.6 above, poor service quality was evident with respect to the reliability dimension

of service quality. The overall service quality was rated (-1.7209) by the customers. This clearly

indicates that reliability services are currently below the expectations of customers in the

sampled shipping lines.

Moreover, all the attributes of reliability had negative values for service quality. The attribute

“Excellent shipping companies should provide services at the time pr omised” had the largest

negative value (-2.2317) whilst “Excellent shipping lines should show sincere interest in solving

customer related problems” had the least negative value (-1.74).



40

4.3.3 RESPONSIVENESS

Responsiveness is the willingness to help customers and provide prompt service, making

information available to customers and not appearing too busy to respond to requests. Results

from the survey on responsiveness in presented in the table below

Table 4.7 Descriptive Statistics (Responsiveness)

RESPONSIVENESS N Mean(E) Mean(P) Gap

Res1 -Excellent shipping companies’ employees

should tell customers exactly when services will

be performed

230 4.7043 2.8478 -1.8565

Res2 Excellent shipping companies should give

prompt service to customers230 4.5726 3.8261 -0.7465

Res3 Employees of excellent shipping companies

should always be willing to help customers230 4.6130 2.9348 -1.6782

Res4 Excellent shipping companies’ employees

should never be too busy to respond to customers’

requests

230 4.4826 3.9130 -0.5696

OVERALL MEAN 4.5931 3.3804 -1.2127


The overall expectation/importance rating for the responsiveness dimension is 4.59 and the

performance/experience rating is 3.38. The attribute “Employees at excellent shipping

companies’ should never be too busy to respond to customers request” had the least negative

service quality value (-0.569). In addition the attribute “Employees at excellent shipping

companies’ should tell customers exactly when services will be performed” had the highest

negative service quality value (-1.857).



41

4.3.4 ASSURANCE

Assurance dimension refers to the knowledge and courtesy of employees and their ability to

inspire trust and confidence. The results from the survey on this dimension of service quality are

shown in the table below

Table 4.8 Descriptive Statistics (Assurance)

ASSURANCE

N Mean (E) Mean (P) Gap

ASS1 - Excellent shipping companies should instill

confidence in their customers230 4.8748 3.2013 -1.673

ASS2 - Customers of excellent shipping lines shouldfeel safe in their transactions 230 4.5652 3.9917 -0.573

ASS3 - Excellent shipping companies should be

consistently courteous with customers230 4.9043 3.7826 -1.121

ASS4 – Excellent shipping companies should have the

knowledge to solve customers’ problems 230 4.7813 3.9001 -0.881

OVERALL MEAN 4.7814 3.7189 -1.0625


The descriptive statistics on the assurance dimension shows that, the expectation of the

customers as well as their perceptions both recorded relatively high means. The table above

indicates an overall importance rating of 4.78 and a performance rating of 3.71. The overall

service quality for the assurance dimension is (-1.0625) indicating that the customers see the

services provided by the sampled Lines in terms of assurance still as poor.

The attribute of assurance “Customers of excellent shipping lines should feel safe in their

transactions” had the least negative value (-0.5735) for service quality whiles the attribute

“Excellent shipping companies should instill confidence in their customers” had the highest

negative value (-1.67) indicating that the ability of the sampled lines to instill confidence in their

customers is the poorest in terms of the assurance dimension of service quality



42

4.3.5 EMPATHY

Empathy dimension deals with the caring and the individualized attention the firm provides to its

customers. Empathy also includes approachability, and the effort to understand the customer ’s

needs. Therefore, customers expect to be personally cared for, for staff to understand their wants

and needs, and to be put at the heart of the Line staff.

Presented in the table 4.9 below are the results from the survey on empathy.

Table 4.9 Descriptive Statistics (Empathy )

EMPATHY N Mean (E) Mean (P) GapEMP1 - Staff at excellent shipping companies should

give customers individual attention230 4.9174 2.8304 -2.087

EMP2 - Excellent shipping companies should have

convenient operating hours230 4.8852 2.9870 -1.8982

EMP3 - Staff at excellent shipping companies should

understand specific needs of customers230 4.8791 2.5643 -2.3148

EMP4 -Staff at excellent shipping companies should

never be too busy to respond to respondents’

request.

230 4.7891 2.2926 -2.4965

EMP5 -Staff at excellent shipping companies should

have the best interest of customer at heart.230 4.9130 2.5133 -2.3997

OVERALL MEAN4.8767 2.6375 -2.2392


For empathy dimension, five attributes were used. The results presented in table 4.9 shows that

the respondents perceive services related to the empathy dimension of service quality to be of

poor quality. Respondents surveyed indicate a perception rating of 2.63 and importance rating

4.87 for empathy. Overall, the results show a service quality rating of (-2.34). This is indicative



43

of the poor services provided by the sampled Lines in the Tema metropolis as far as the empathy

dimension of service quality is concerned.

4.4.1 Service Quality Strategies adopted by The Lines

Another objective of this study was to identify the service quality strategies adopted by the

sampled Lines in the Tema metropolis. To a achieve this, an interview guide was prepared and

interviews were conducted by the researcher with the Line managers of the sampled

organizations. In all, 9 respondents were used, thus 3 managers from each of the three Lines

were interviewed. The average duration of service in a Leadership role for the respondents was

12 years. Also, when asked what respondents considered as good quality service in their own

words, they explained that “service is said to be of good quality when it meets the customer’s

needs and can be performed “within budget”. Another response also was that service is said to be

of good quality “if it easy for the customer and efficient for us”

There were a variety of responses with regards to service quality strategies which have been

summarized as follows

Training and Competency Bui lding

In order to build competency and improve customer relations the sampled lines organize periodic

training for all staff. The continuous training of both existing and new staff in best practices in

customer service serves as a way in which employees’ relationship with customers can be

continuously improved. Monthly coaching and mentoring sessions by supervisors and managers



44

is also a way in which the shipping lines help to build up the competency of the staff in their

various job roles.

Quali ty Circle Dri ve

All three organizations in a bid to introduce continuous improvement culture in their companies

have introduced the quality circle concept. A quality circle is a volunteer group composed of

workers, usually under the leadership of their supervisor or an elected team leader, who are

trained to identify, analyze and solve work-related problems and present their solutions to

management in order to improve the performance of the organization, and motivate and enrich

the work of employees.

Network Optimization

In order to further improve transit time and get cargo to destination at the shortest time possible

Maersk Line has phased out its older PANAMAX vessels calling the port of Tema and

introduced the newer, bigger, faster and eco-friendly WAFMAX vessels. The strategic goal of

WAFMAX is to increase reliability through faster steaming and at the same time reduce cost

through its increased vessel capacity. Increased vessel capacity means that one WAFMAX vessel

can load cargo which would have previously required two PANMAX vessels to load. Increased

capacity translates directly to fewer port calls per vessel.

Delmas and MSC have also recently introduced direct service calls to and from North America

which means transit times for this particularly busy trade lane has been reduced from the

industry average of 31 days to just 14 days.

http://en.wikipedia.org/wiki/Volunteer

http://en.wikipedia.org/wiki/Worker

http://en.wikipedia.org/wiki/Management

http://en.wikipedia.org/wiki/Management

http://en.wikipedia.org/wiki/Worker

http://en.wikipedia.org/wiki/Volunteer



45

Terminal Partneri ng Program

Another strategy to improve service was to reduce the time it took for customers to receive their

goods at destination and increase container turnaround time. In order to achieve this, The Tema

Terminal Partnering Program was introduced. This is a program involving The Ghana Port

Authority, Meridian Port Services and the shipping Lines. Key achievements from this program

include the procurement of two additional Ship to Shore Cranes to increase berth productivity

and the introduction of the Fixed Berthing Window scheme to increase reliability and

predictability of vessel berthing at the Tema port

Ease of Doing Business / Ecommerce Drive.

In response to customer complaints about limited parking space, small customer service halls

with insufficient seating, Maersk Ghana Limited has relocated to the 4th

and 6th

Floors of the

plush 10 storey GPHA towers. This modern high rise building in close proximity to the Tema

port is equipped with a 150 capacity car park and spacious customer service hall with seating

capacity for 250.

To make tracking of cargo, invoicing, bookings and documentation easier and efficient for

customers, the sampled Lines have all introduced Ecommerce solutions which offer the customer

24hr availability to his invoices, bookings, shipping instructions and cargo location in real-time.

With just a click of a button, customers can access vital information in a matter of seconds at

their own convenience. This “Do it yourself” tool allows customers to print invoices, bills of

ladings and arrival notices in the comfort of their offices hence helping to reduce traffic flow at

the counters.



46

4.4.2 Challenges encountered in implementing the service quality strategies outlined

Another objective of this study was to identify some of the challenges in implementing the

service quality strategies

Lack of Senior Management commitment to quali ty and continuous improvement I ni tiatives

Unlike other service sectors, the whole concept of service quality and continuous improvement

has just recently caught on in the shipping industry. Senior management still treat quality

management as an afterthought and do not expend much resources and time on this. Initiatives of

the quality circle teams are not given much priority at management meetings. Most of the limited

resources at these Lines are geared towards commercial and operational activities. With that

being said, there is also limited budget allocated to quality management and process

improvement projects.

H igh Customer to Counter staff ratio

The interviewees pointed out that due to recent cost-cutting initiatives, their organizations have

experienced a drastic cut in staff numbers as a means to reducing administrative costs. This has

left their organizations “stretched” especially at the customer service departments. What this

means is that fewer counter staff are now serving more and more customers than before. For

example, last year saw Maersk Ghana undergo a restructuring program in the customer service

department. This lead to the reduction in the number of counter staff from 14 to 8. This makes

staff interaction with customers impersonal and mechanical.



47

H igh turnover of counter staff

It was also noted that customer service and in particular counter staff had the highest turnover

ratio in the sampled organizations. The average service duration of staff was less than two years.

Staff are usually recruited on contract basis. The frequent turnover of staff serves as a deterrent

to customer relationship building and continuous process improvement.



48

CHAPTER FIVE

SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

This chapter concludes the study. It begins with a brief summary of the study which is followed

by the major findings and conclusions. The recommendations of the study are finally presented.

5.1 Introduction

In this study, the five service quality indicator model as proposed by Parasuraman et al (1988)

was employed to assess service quality delivered at the three shipping lines within the Tema

metropolis under study.

A total sample size of 300 respondents comprising of shippers, consignees and forwarders

visiting the customer service halls of the three Lines was and 9 Line managers interviewed.

However 230 active responses were obtained and this represented an active response rate of

76.67%. Response rate from Line managers was 100%.

The major findings are summarized in the sections below followed by the conclusion and

recommendations of the study.



49

5.2 Summary of Research Findings

The summary of the finding is done in line with the research objectives of this study.

5.2.1 Nature of respondents

A majority of the respondents (83.4%) had multiple visits to the Lines under study and were in a

better position to provide better responses to the quality of the services provided by these

companies as they had experienced service offerings from them on quite a number of occasions.

5.2.2 Measuring service quality at the sampled Lines using ServQual.

The study revealed that service quality is poor based on all the dimensions used in this study

with the exception of the Tangibility dimension which had a positive overall mean service

quality score. The empathy dimension had the highest expectation rating of 4.87 which means it

was the most important service quality dimension to the customers of the sampled Lines.

Interestingly, the service quality dimension of least importance to the customers was the

tangibility dimension with an overall mean of 3.73. Thus the customers did not care as much

about the physical aspects of the organization’s facilities as they did for the care and individual

attention given to them.

Overall service quality on the various dimensions reveals that it was only the tangibility

dimension that customers were satisfied with even though this dimension happens to be the

dimension of least importance to the customers.



50

Thus, based on the ServQual model, reliability, responsiveness, assurance and empathy were

perceived to be of poor quality by the respondents.

5.2.3 Service Quality Strategies Adopted by the Shipping Lines understudied.

The findings indicate that the Lines rely heavily on strategies with Operational efficiency and

Cost leadership themes to help improve service quality. Also competency and professionalism of

staff as a strategy for ensuring service quality delivery was also observed.

5.2.4 Problems Encountered by the Shipping Lines in Implementing the Service

Quality Strategies Outlined

Lack of commitment from senior management to the quality and continuous improvement

concept was a major problem encountered in the rolling out and implementation of quality

strategies. As a result limited funding and resources are allocated for such purposes.

Also as a result of restructuring and high turnover ratio of counter staff, companies have become

“stretched” in terms of staff strength leading to a high customer to counter staff ratio. The lack of

“continuity” and high customer to staff ratio makes it extremely difficult to continuously

improve what they do on a daily basis and build valued relationships with clients



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5.3 Conclusion.

Shipping Lines need to explore the service expectations and perceptions of customers now more

than ever in order to stay competitive in the industry’s increasingly competitive environment.

Knowing accurately what customers prefer, organizations are able to give customers exactly

what they want by customizing services to “delight” them and to create a core competence from

this.

Given the financial and resource constraints under which service organizations like the shipping

industry operate in, it is essential that customer expectations and perception are properly

understood and measured and that any gaps in service quality are identified. This information

can then help management in identifying cost-effective ways of closing service quality gaps and

also prioritizing which gaps to focus on, a critical decision given scarce resources.



52

5.4 Recommendations

The following recommendations are made based on the findings of this research.

In order to better understand customer’s expectations and their perceptions, the researcher

recommends that the ServQual model be adopted as a medium for measuring service

quality in the Lines under study going forward

Line Management are encouraged to develop appropriate service quality strategies in line

with the model described and particular attention be paid to the reliability,

responsiveness, assurance and empathy dimensions of service quality.

Training of staff with special focus on enhancing communication skills and relationship

building is recommended by the researcher.

Shipping has become a standardized product with almost all the companies offering

similar products. In order for companies to differentiate themselves from one another it

is recommended that top priority be given to quality management initiatives and

shipping companies embrace the continuous improvement mindset and culture. This

should not be the job of just a few e.g. the quality circle, but an organization-wide thing

from top to bottom.

Job enrichment as a means to staff retention at the counter is recommended. Job roles

that focus on less repetitive transactional tasks and more on client handling and customer

relations are recommended. This can be achieved through outsourcing these

transactional tasks to Global service Centers as is currently being done in the banking

sector.



53

5.5 Limitations of the study and future research

The respondent coverage in this study consists of only 230 customers of three shipping

lines. This was limited by funding and the time. The generalizations to a wider

population should be taken with caution.

Further studies should be carried on customers of Ghana’s second port in Takoradi and other key

players in the shipping industry to extend the extent of knowledge in this subject area.



54

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http://www.emeraldinsight.com/1355-5855.htm






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APPENDIX 1

RELIABILITY TESTS

Case Processing Summary

N %

Cases Valid 230 100.0

Excluded 0 .0

Total 230 100.0

a. Listwise deletion based on all variables in the

procedure.

Tangibility Statistics

Cronbach's Alpha N of Items

.7451 5


N %


Excluded 0 .0

Total 230 100.0


procedure.

Reliability Statistics

Cronbach's

Alpha N of Items

.7551 5



58


N %


Excluded 0 .0

Total 230 100.0


procedure.

Responsiveness Statistics

Cronbach's

Alpha N of Items

.8410 5


N %


Excluded 0 .0

Total 230 100.0


procedure.

Assurance Statistics

Cronbach's

Alpha N of Items

.700 5



59

case Processing Summary

N %


Excluded 0 .0

Total 230 100.0

Empathy Statistics

Cronbach's

Alpha N of Items

.856 5



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APPENDIX 2:

SAMPLE QUESTIONNAIRE.

QUESTIONNAIRE FOR THE RESPONDENT

This questionnaire seeks to assess service quality in the shipping industry. Your answers would

be used for purely academic purposes and your anonymity is guaranteed.

Section (1): GENERAL CHARACTERISTICS OF RESPONDENTS

Kindly tick the most appropriate answer.

1. Role: Shipper Consignee Forwarder

2. Shipping Line:

MEDITERRANEAN SHIPPING COMPANY

CMA CGM

3. Is this your first visit to this Line?: Yes No

4. How often do you visit this Shipping Line?



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The Survey The questionnaire below is in two sections. The first section asks you

to rank all shipping lines according to your expectations i.e. what you

expect all shipping lines to provide. The second section asks you to

rank the shipping line you chose for the survey according to your

experiences and perceptions.

SECTION 2a

Expectations This section of the survey deals with your opinions of shipping lines. Please

show the extent to which you think shipping lines should posses the

following features. What the researcher is interested in here is a number that

best shows your expectations about services offered by excellent shipping

lines.

You should rank each statement as follows:

Strongly Disagree Undecided Agree Strongly

Disagree Agree

1 2 3 4 5



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Statement 1 2 3 4 5 Score

TANGIBILITY

T1 -Excellent shipping lines should have modern

looking facilities that are visually appealing (vessels,

containers, buildings, computers e.t.c)

T2 -Excellent shipping lines should be conveniently

located for easy access.

T3 – Employees at excellent shipping lines should be

neat and professional in appearance.

T4 – Conditions such as temperature, ventilation,

noise, lighting and ambience in shipping company

should be excellent.

RELIABILITY1 2 3 4 5 Score

R 1 - When excellent shipping lines promise to do

something by a certain time, they do. (e.g. vessel

arrival, issue b/ls and invoices)

R 2 When a customer has a problem, excellent shipping

lines should show a sincere interest in solving it

R 3. Excellent shipping lines should perform the service

right the first time.

R 4. Excellent shipping lines should provide the service

at the time they promise to do so.

R5. Excellent shipping lines should have employees

who are trustworthy in handling the customer ’s

problems.

RESPONSIVENESS 1 2 3 4 5 Score

Res1 - Employees of excellent shipping lines should tell

customers exactly when services will be performed

Res2 - Employees of excellent shipping lines should

give prompt service to customers.



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always be willing to help customers


never be too busy to respond to customers’ requests

ASSURANCE1 2 3 4 5 Score

ASSU1 - The behavior of employees at excellent

shipping lines should instill confidence in its customers

ASSU2 – Customers of excellent shipping lines should

feel safe in their transactions.

ASSU3 - Employees of excellent shipping lines should

be consistently courteous with customers.

ASSU4 - Employees of excellent shipping lines should

have the knowledge to solve customers’ problems

EMPATHY1 2 3 4 5 Score

EMP1 - Excellent shipping lines should give customers

individual attention

EMP2 - Excellent shipping lines should have operating

hours convenient for all their customers

EMP3 - The employees of excellent shipping lines

should understand the specific needs of their customers

EMP4 – The employees at excellent shipping lines

should never be too busy to respond to customers

requests.

EMP5 – The employees at excellent shipping lines

should have the best interest of the customer at heart.



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SECTION 2b

Perceptions

The following statements relate to your feelings about the particular

shipping line you have chosen of which you have received service from.

Please show the extent to which you believe this shipping line has the

feature described in the statement. Here, the researcher is interested in a

number from 1 to 5 that shows your perceptions about the shipping line.

You should rank each statement as follows:

Strongly Disagree Undecided Agree Strongly

Disagree Agree

1 2 3 4 5


TANGIBILITY

T1 -My shipping line has modern looking facilities that

are visually appealing (vessels, containers, buildings,

computers e.t.c)

T2 - My shipping line is conveniently located for easy

access.

T3 – Employees at my shipping line are neat and

professional in appearance.

T4 – Conditions such as temperature, ventilation,

noise, lighting and ambience in my shipping

company are excellent.



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RELIABILITY1 2 3 4 5 Score

R 1 - When my shipping line promises to do something

by a certain time, they do.(e.g vessel arrival, b/l

issuance, invoicing)

R 2 When a customer has a problem, my shipping line

shows a sincere interest in solving it

R 3. My shipping line performs the service right the first

time.

R 4. My shipping line provides the service at the time

they promise to do so.

R5. My shipping line has employees who are

trustworthy in handling the customer ’s problems.

RESPONSIVENESS 1 2 3 4 5 Score

Res1 - Employees of my shipping line tell customers

exactly when services will be performed

Res2 - Employees of my shipping line give prompt

service to customers.

Res3 - Employees of my shipping line are always

willing to help customers

Res4 - Employees of my shipping line are never too

busy to respond to customers’ requests

ASSURANCE1 2 3 4 5 Score

ASSU1 - The behavior of employees at my shipping

line instill confidence in customers

ASSU2 – Customers of my shipping line feel safe in

their transactions.

ASSU3 - Employees of my shipping line are

consistently courteous with customers.

ASSU4 - Employees of my shipping line have the



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knowledge to solve customers’ problems

EMPATHY1 2 3 4 5 Score

EMP1 - My shipping line gives customers individual

attention

EMP2 - My shipping line has operating hours

convenient for all their customers

EMP3 - The employees of my shipping line understand

the specific needs of its customers

EMP4 – The employees at my shipping line are never

too busy to respond to customers requests.

EMP5 – The employees at my shipping line have the

best interest of the customer at heart.



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INTERVIEW GUIDE FOR MANAGERS

1. How many years have you worked in leadership role for this shipping line?

.............................................................................................................

2. What constitutes quality service delivery as far as you are concerned?

…………………………………………………………………………….

…………………………………………………………………………….

……………………………………………………………………………...

……………………………………………………………………………….

………………………………………………………………………………..

………………………………………………………………………………..

3. What specific steps does your outfit take to ensure that customers are given quality services?

…………………………………………………………………………………….

…………………………………………………………………………………….

……………………………………………………………………………………..

……………………………………………………………………………………..



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4. What specific strategies the shipping line adopt to ensure that customers are satisfied with the

services they receive?

………………………………………………………………………………..

………………………………………………………………………………..

………………………………………………………………………………..

………………………………………………………………………………..

5. How does the shipping line know if customers are dissatisfied with the services provided?

………………………………………………………………………………….

…………………………………………………………………………………

………………………………………………………………………………….

…………………………………………………………………………………….

6. How does the shipping line measure the level of satisfaction of customers on the servicesdelivered?

……………………………………………………………………………………

……………………………………………………………………………………

…………………………………………………………………………………….

…………………………………………………………………………………….

…………………………………………………………………………………….



7. What specific challenges does your organization face in its quest to deliver quality service andthus to ensure customer satisfaction? Please list them.…………………………………………………………………………………….

…………………………………………………………………………………….

…………………………………………………………………………………….

…………………………………………………………………………………….

……………………………………………………………………………………..

8. What steps does your organization take in addressing the challenges listed above?……………………………………………………………………………………

…………………………………………………………………………………….

…………………………………………………………………………………….

……………………………………………………………………………………

……………………………………………………………………………………..

…………………………………………………………………………………….

9. Any other issue on service quality and customer satisfaction as far as your organization is

concerned?

……………………………………………………………………………………..

……………………………………………………………………………………..

………………………………………………………………………………………

Serqual in Ghanaian Shipping Industry

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