Sheffield Business Schoolcwstudent.vtc.edu.hk/LRC/e-dissertation_cw/pdf_files/SHU...Cathay Pacific...

Ha Chun Sing - 91206555 - Hospitality Business Management 1

Sheffield Business School

BSc (Honours) Hospitality Business

Management

Title

Cathay Pacific Airways Limited how to build up a good relationship with the

customers.

Name

Ha Chun Sing

91206555

Month Year

April 2011


Sheffield Hallam University

Sheffield Business School

Title

Cathay Pacific Airways Limited how to build up a good relationship with the

customers.

FULL NAME

Ha Chun Sing

91206555

Supervisor: Miss Dorothy Tusi

In partial fulfilment of the requirements for the degree of Bachelor of Science in

Hospitality Business Management

Month Year

April 2011


Executive Summary

In this research mainly focus on how to build up a good relationship with the

customers. Moreover, in this research I choose Cathay Pacific Airways Limited to see

how to satisfy the customers’ need and want and build up a good relationship with the

customers. As we know Cathay Pacific is one of the large airways in Hong Kong. And

Cathay Pacific Airways Limited had established in 1946. In Hong Kong it has around

65 year’s histories. It pass through a long time still can exist in this industry, it must

have something, it was doing very well. In the past Oasis Hong Kong Airlines had

used low price to satisfy the customers’ need. However, after a few years it was gone

bankrupt, at that moment Cathay Pacific still can exist without low price tickets.

Cathay Pacific should satisfy the customers others need and want not only low price

ticket so that it can exist for 65 years.

In this research, I want to find out Cathay Pacific how to increase the customers’

sense of belonging and loyalty. It is very important for the business. If the business

can have loyalty customers, it can run the business longer. This research’s objectives

are how to deal with the customers to find out what they want, second analysis

nowadays Cathay Pacific Airways Limited provide those solutions are they satisfy the

customers needs, third what actions they will do after getting the customers feedback.


Furthermore, in this study I have found much useful information in the internet.

In Cathay Pacific website it has many update official information and news. That

information can help to analysis why customers like to travel Cathay Pacific not

others airlines. Moreover, I have found some books about new thinking, new

strategies, new tools for getting closer to your customers and how to build up a

customers’ relationship and how to deliver customers satisfaction. If we want have a

good relationship with the customers, we must understand the customers what they

wants.

In this study, I have set a questionnaire for the people who had traveled Cathay

Pacific before and collect some useful information from them. When I collected those

questionnaire and after the analysis I want to find out is it most of the people after

travel Cathay Pacific has a good experience and Cathay Pacific is it satisfy their needs

and wants.

After this study, I estimated that the questionnaire result is most of the people

satisfy after travel Cathay Pacific if the customers didn’t satisfy their service, Cathay

Pacific can not get a lot of awards in those awarding ceremony such as Yahoo!

Emotive Brand (Airline category) and in the Wall Street Journal Asia's annual poll

won the First in Asia's 200 Most-Admired Companies. Moreover, I want to find out

Cathay Pacific how to increase the customers’ sense of belonging and loyalty. Hope it

can implement in others business.


Table of content

Executive Summary ....................................................................................................... 3

Table of content .............................................................................................................. 5

List of Tables .................................................................................................................. 6

List of figures ................................................................................................................. 7

Chapter 1 ........................................................................................................................ 8

Introduction ............................................................................................................ 8

Chapter 2 ...................................................................................................................... 10

Instrumental Literature Review ........................................................................... 10

Chapter 3 ...................................................................................................................... 28

Methodology ........................................................................................................ 28

Chapter 4 ...................................................................................................................... 31

Findings and Analysis .......................................................................................... 31

Chapter 5 ...................................................................................................................... 37

Conclusions and Recommendations .................................................................... 37

References .................................................................................................................... 40

Appendices ................................................................................................................... 44


List of Tables

Table 1………………………………………………………………………….p.31

Table 2…………………………………………………………………………. p.31

Table 3…………………………………………………………………………. p.32

Table 4…………………………………………………………………………. p.32

Table 5…………………………………………………………………………. p.33

Table 6…………………………………………………………………………. p.33

Table 7…………………………………………………………………………. p.35

Table 8…………………………………………………………………………. p.35

Table 9…………………………………………………………………………. p.36


List of figures

Figure 1………………………………………………………………………….p.14


Chapter 1

Introduction

Why studying in this case, it was because in hospitality industry customers were

very important for the business. Nowadays in the world there are many ranking or

awards about service quality, many companies can provide service to satisfy the

customers but not all the companies can keep a long relationship with their customers.

If the firms can promote good image into eyes of targeted customers, it can help

creating the loyalty to the customers’ mind. If the customers keep spending their

money to buy the product, the company can get more profit. In the past, in hospitality

industry didn’t focus on their service and didn’t care of the customers’ satisfaction.

The business organizations want to gain more profit form the customers. But

nowadays, most of the companies scarify certain extent of profit to maintain

customers’ satisfaction so that they would repeat buying from day to day. The firms

want to target the long term profit not the short term profit from now on. From now,

most of the companies are talking about customers oriented. Before selling the

product they need to do a research to analysis the customers needs and wants. During

selling the product they need to provide good service and selling technique. After

selling the product they need to provide a good after sell service to the customers.


Moreover, Cathay Pacific Airways Limited was a one famous airline in the world

and it had a long history in flight industry; it had done a lot of things to satisfy their

customers. So that the aim of this research aim is find a way to increase the

customers’ sense of belonging and loyalty, it will use Cathay Pacific Airways Limited

for an example. And the objectives of this research are finding out how Cathay Pacific

to deal with the customers to satisfy what they want. Second, analyses nowadays

Cathay Pacific Airways Limited provide those solutions are they satisfy the

customers’ needs. Finally, what actions Cathay Pacific will do after getting the

customers feedback.

Furthermore, in an airline company, it must face different nationality customers;

it should hard to satisfy all of them. In this study, it will focus on Cathay Pacific

Airways Limited because it is a one of the good company to build up a good

relationship with the customers and finding out Cathay Pacific Airways Limited’s

manager how to improve the customers’ relationship. In this research, it will include

50 questionnaires to ask the travelers who had traveled Cathay Pacific before. To

prove that Cathay Pacific really had done something to satisfy their customer and

keeping improve their service nowadays.


Chapter 2

Instrumental Literature Review

In this chapter, it will include the theories of service quality, customers’ thinking

such as their expectation, perception and satisfaction. After, introduce these theories,

it also include using what method to analysis how to fulfill these theories such as gap

model, SERVQUAL model and the customer loyalty system. Finally, it will talk about

Cathay Pacific had taken what actions to satisfy the customers.

What is service?

According to Kotler (1984), he defined a service is any activity or benefit that

one party can offer to another that is essentially intangible and does not result in the

ownership of anything. Its production may or may not be tied to a physical product.

Renting a hotel room, depositing money into a bank, traveling on an airplane, visiting

a psychiatrist, getting advice from a lawyer- all involve buying a service. It showed

that a wide range of activities and business can be classified as services.

What is service quality?

Berry and Parasuraman (1991) stated that service quality is the foundation for

services marketing because the core product being marketed is a performance. The

performance is the product the performance is what customers buy. A strong service


concept gives companies the opportunity to compete for customers; a strong of

service concept builds competitiveness by earning customers’ confidence and

reinforcing branding, advertising, selling and pricing. (Li,2005)

According to Parasuraman (1998), they presented that service quality is

perception resulting from a comparison of consumer expectations with actual service

performance.

Service quality dimension

According to (Gronroos, 1983), the service quality dimension aids an

understanding of customer needs and wants. When the multi-dimensional nature of

the construct has been noted, there is general agreement that quality evaluations are

made not only on the outcome of the service, but also on the process of service

delivery. The customer’s experience of the service depends on two key dimensions,

namely technical and functional quality.

Gronroos (1988) stated that technical quality has received more attention due to

tangibility and often large amount of capital tied up in elements such as service

production and delivery systems, for example, technical solutions, however, are easily

copied Functional quality, in contrast, can be used to create a competitive edge by

focusing on staff-customer relations.


Theory of the Gaps Model

According to Parasuraman (1985) perceived service quality can be defined as,

according to the model, the difference between consumers’ expectation and

perceptions which eventually depends on the size and the direction of the four gaps

concerning the delivery of service quality on the company’s side.

From Gronroos (1990), the model demonstrates how service quality emerges.

The upper part of the model includes phenomena related to the customer, the lower

part shows phenomena related to the service provider. The expected service is a

function of the customer’s past experience and personal needs and of word-of-mouth

communication. And also, it is influenced by the market communication activities of

the firm.

The experienced service, which in this model is called the perceived service, is

the outcome of a series of internal decisions and activities. Management perceptions

of customer expectations guide decisions about service delivery and production

process as a process-related quality component, and the technical solution received by

the process as an outcome-related quality component. Thus market communication

can be expected to influence the perceived service as well as the expected service

(compared the quality study by Lindqvist 1998). There are five gaps between the

customer’s expectation, perception, quality specification, service delivery and

expected service.


The key points for each gap can be summarized as follows:

Gap1: The difference between what customers expected and what

management perceived about the expectation of customers.

Gap 2: The difference between management’s perceptions of customer expectations

and the translation of those perceptions into service quality specifications and

designs.

Gap 3: The difference between specifications or standards of service quality and the

actual service delivered to customers.

Gap 4: The difference between the services delivered to customers and the promise

of the firm to customers about its service quality

Customer Gap:The difference between consumer expectations and perceptions of the

quality of the service received depending on the size and directions and

perceptions of the quality of service received depending on the size and

direction of the above 4 gaps.


figure1

The Integrated Gaps Model of Service Quality

(Parasuraman, Zeithaml, Berry 1985)


SERVQUAL model

According to Parasuraman, Zeithaml, and Berry (1985), they have developed a

comprehensive measurement instrument, known as SERVQUAL, originally devised

to measure perceived service quality. In their approach, the authors propose that

customers entertain expectations of performance on the service dimensions, observe

performance, and later form performance perceptions. These two key concepts are

then compared through difference scores or gaps.

Parasuraman et al. (1988) stated that SERVQUAL contains 22 pairs of

Likert-type items. One set of measures, containing one item from each pair, is utilized

to measure customers’ expected levels of service for a particular service industry as a

way of calibrating expectations. The second set of measures, containing the remaining

item from each pair, is intended to measure the level of service provided by a specific

service company as experienced by the consumer as a way of calibrating perceptions.

A measure of service quality is then formulated by calculating the difference scores

between the corresponding set of items such as perceptions minus expectations.

The early exploratory research of Parasuraman et al. (1985) revealed that the

primary criteria utilized by consumers in assessing service quality could be described

by 10 separate dimensions: tangibles, reliability, responsiveness, communication,

credibility, security, competence, courtesy, understanding/knowing the consumer,

access. These 10 dimensions were later combined and condensed to 5: tangibles,


reliability, responsiveness, assurance and empathy. These last two constructs,

assurance and empathy, contain items representing seven of the original dimensions –

communications, credibility, security, competence, courtesy, understanding/knowing

customers and access – that did not remain distinct after sequential testing. These

authors claim that the instrument can be utilized in a wide array of services without

modification, and that the SERVQUAL instrument has high reliability and validity.

Despite disagreement over use of both the expectations and performance

measures and the dimensionality of the SERVQUAL measurement instrument across

different industry settings, there is general agreement that the 22 items are good

predictors of overall service quality. Rust and Oliver (1994) stated that although the

SERVQUAL items measured at the level of the firm’s services appear to be good

predictors of overall perceived quality, it is also possible that the 22 items measured at

the encounter level may be good predictors of encounter satisfaction, and that when

measured as a function of multiple experiences they may be good predictors of overall

service satisfaction.

.


Customer expectation

Parasuraman, Zeithaml, Berry (1988) stated that customers’ expectation will be

affected by how well a provider performs. Influencing expectation factors included

word of mouth, personal needs, past experience, external communication and price.

First, word of mouth is including recommend from relatives, friends and other peers.

Second, personal needs means how necessary that you need the goods and services.

Third, past experience means you bought or used the product in the past. Fourth,

external communications are media that received to people through newspaper,

magazine, television, radio and etc.

Moreover, Olson and Dover (1979) defined that expectation as beliefs about a

product or service’s attributes or preference at some time in the future. However, Yi

(1991) identifies two basic conceptualizations of expectations. One version, a more

global perspective, has to do with an institutional perspective, which defines

expectations as the before consumption beliefs about the overall performance of the

product/service created by previous experience, the organization’s claims, product

information or word of mouth. The other major view of expectations has more to do

with a process internal to the customer, and is more componential.

Furthermore, Spreng et al (1996) suggest decomposing the traditional

expectations measure into two measures, the predictive expectations; beliefs about the

likelihood that attributes, benefits or outcomes are associated with a product or service,


and desires: evaluations of the desirability of an attribute, benefit or outcome, that is

the extent to which the attribute, benefit or outcome leads to the attainment of the

customer’s values. In the view, expectations are future-oriented and are considered

malleable. In contrast, desires are described as present-oriented and relatively stable.

In a test of these constructs, Spreng et al (1996) found them to be on satisfaction,

expectations had both positive and negative effects, while desires had only negative

effects.

Customer perception

According to Parasuraman (1988) stated that perception resulted from a

comparison of consumer expectation with actual service performance. For example,

customers have high expectation through television, but they got the service is

difference than their expectation. They will become dissatisfaction. That made

customer perception after all the service process.

Customer Satisfaction

According to Howard and Sheft (1969) stated that consumer satisfaction was the

buyer’s cognitive state of being adequately of inadequately rewarded for the sacrifice

he has undergone. Hunt (1979) summarized that the definition by stating that

satisfaction involved need fulfillment, pleasure, displeasure, expectation performance


interactions, evaluation of the purchase consumption experience, and evaluation of the

benefits of consumption. Oliver (1981) stated that satisfaction is a summary

psychological state resulting when the emotion surrounding disconfirmed

expectations is coupled with consumer’s prior feeling about the consumption

experience. Zeithmal and Bitner (2000) defined satisfaction as the customers’

evaluation of a product or service in terms of whether that product or service has met

their needs and expectations. Dissatisfaction with the product or service is resulted as

failure to meet the customers’ needs and expectations.

The relationship of service quality and customer satisfaction

Oliver (1981) summarize the transaction specific nature of satisfaction, and

differentiate it from the attitude; Attitude is the consumer’s relatively enduring

affective orientation for a product, store, or process while satisfaction is the emotional

reaction following a disconfirmation experience which acts on the base attitude level

and is consumption specific. Attitude is therefore measured in terms more general to

product or store and is less situational oriented. Therefore, the difference between

service quality and satisfaction in that service quality is a global judgment or attitude

relating to the superiority or excellence of the service whereas satisfaction is related to

a specific transaction. The two construct are related in that incidents of satisfaction

over time result in perceptions of service quality. If the service quality met the


customers’ perceptions they will feel satisfy. If the service quality is lower than the

customers’ perceptions they will feel dissatisfy.

The relationship of expectations and customer perception

From Sasser, Olsen, and Wyckoff (1987), Gronroos (1982), Lehtimem and

Lehtinen (1982), and Parasuraman, Zeithmal and Berry (1984), they noticed that

service quality as perceived by consumers, stems from a comparison of their

expectations of the services they will receive with their perceptions of the

expectations of the performance of firm providing of discrepancy between consumers’

perceptions and expectations the better perceptions are than expectations, the higher is

the level of perceived service quality, the worse perceptions are than expectations, the

lower is the level of perceived service quality.

According to Olive (1981), expectations are consumer defined probabilities of

the occurrence of positive and negative events if consumer engages in some behavior.

In the service quality literature, expectations are viewed as desires or wants of

consumers like what they feel a service provider should offer rather than would offer.

The consumer’s expectation in a satisfaction context represents a prediction, it is

expressed by a mean expectation value with a degree of uncertainty surrounding the

mean because the consumer is unsure about what they expect (Winer, 1985). In

contrast, since a consumer’s expectations in a service quality context represents what


he or she desires, it can be viewed as a distinct value with little or no uncertainty

surrounding it.

What is customer loyalty?

Jacoby & Chestnut (1978); Kahn & Meyer, (1991); Dick & Basu, (1994) stated

that where attempts have been made to conceptualize loyalty it has typically been

divided into 2 typologies–behavior and attitude. According to Samuelson & Sandvik

(1997) the behavioral typology to customer loyalty is primarily concerned with

measures of repeat purchase, proportion of purchases etc. Although, this is considered

to be a relevant measure, the main criticism of this typology is that it does not include

the customer’s motives for their behavior. Therefore attitudinal approaches to loyalty

have been developed. While a behavioral approach to loyalty is still valid as a

component of loyalty, it is argued that attitudinal approaches to loyalty should

supplement the behavioral approach. Dr. Ruth M Smith (2010) stated that the

attitudinal typology includes, for example, measures of commitment and trust.

Customer loyalty can be achieved in some cases by offering a quality product

with a firm guarantee. Customer loyalty is also achieved through free offers, coupons,

low interest rates on financing, high value trade-ins, extended warranties, rebates, and

other rewards and incentive programs. According to Drilling Down (2010) customers

may express high satisfaction levels with a company in a survey, but satisfaction does


not equal loyalty. Loyalty is demonstrated by the actions of the customer; customers

can be very satisfied and still not be loyal.

Development of customer loyalty program for Cathay Pacific

The Cathay Pacific passenger can join the Marco Polo Club to enjoy a world of

benefits, convenience and personalized service wherever their go. It include 24 hour

access to the worldwide toll free Marco Polo Club Service Line, priority check in and

boarding, in-flight duty-free specials on Cathay Pacific and Dragonair, latest news and

special offers via email as well as excess baggage allowances, guaranteed seats,

worldwide lounge access and exclusive benefits on one world alliance airlines for

Silver members and above. This program develops the passenger loyalty. The Club

has four tiers, including Diamond, Gold, Silver and Green. Different tier members

enjoy different rewards. It based on different members level to provide self needs to

them. It encourages them to be the company repeat customer. Moreover, the club

members have their self purchase record; Cathay Pacific can know that which

members are their loyalty customers, company can through these data to offer special

service and discount to those customers. Let the members know that they are special

of this company to increase their loyalty. Furthermore, the Marco Polo Club is an

exclusive programme organized by Cathay Pacific offers a range of privileges to our

most frequent flyers, all designed to enhance journey before, during and after flight.


Based on the theory about CLP, the Macro Polo Club balance the loyalty and reward

system in order to encourage further purchase from existing customers so as to

increase sales revenue.

Cathay Pacific satisfy the customers’ needs actions

Cathay Pacific already have many actions to satisfy the customers’ needs for

example, those video and audio entertainment in flight, those movies are available

with alternative soundtracks in English, Cantonese, Mandarin, Japanese, Korean,

Hindi, French, Italian or German; and the TV programmes are broadcast in English,

Cantonese, Mandarin, Japanese and Hindi respectively. The customer can choose

different languages to satisfy their needs. Another airline didn’t have so many

languages to let the customers to choose. Moreover, Cathay Pacific has a special

in-flight service; the customers can order the special meals, it can satisfy customers’

needs. It is because some people are partiality for a particular kind of food; they can

order the special meals for themselves. If the customers want to order the special

meals, they should orders before 24 hours before your scheduled flight.

In 1 November, 2010, Cathay Pacific Airways announced the introduction of a

new method of calculating extra a baggage charge which aims at simplify the

handling of charges for extra baggage and special baggage. The new policy ensures a

much more straightforward and transparent calculation of baggage charges, and


customers can view a easy-to-understand grid of charges through the airline’s website

which facilitates them in calculating exactly what charges they will have to pay by

referring to the zones in which their travel originates and ends.

And the most remarkable programme that Cathay launched was namely “FLY

greener offset programme”. Cathay Pacific and sister airline Dragonair were the first

Asian airlines to introduce a carbon offset programme which aims at achieving

permanent reductions in carbon emissions to ensure a greener living environment. The

programme provides passengers an opportunity to offset their carbon emissions

attributable to their journey on a non-profit basis. The programme has achieved in a

total 80,000 tonnes of CO2 offset since its launch in 2007. The new project portfolio

launched in November 2010 consists of a set of 95 small "run-of-river" hydropower

stations in Chongqing, Guizhou, Sichuan, and Yunnan provinces that link the

electricity generated into the Pearl River Delta region; a group of 23 wind turbines in

Shandong; and a "run-of-river" hydropower project in the Pearl River Delta region of

Guangdong. Apart from carbon reductions, the project was chosen for added social

and environmental benefits such as reducing local air pollution, enhancing the

productivity of local farms, and providing power and jobs to local communities.

Conclusively, it can be revealed that Cathay endeavors to establish good

relationship with the customers by not only maintaining the quality of flight services,

but also implementing various programmes in taking good care of the customers in


different aspects.

In 15 October, 2010, From October onwards, the airline's passengers traveling in

First Class will receive new First Class amenity kits of high quality products and real

benefits produced by two sophisticated brands of exceptional quality.

The airline's male passengers traveling in First Class will receive a stylish black

pouch designed by Ermenegildo Zegna, one of Italy's most famous family enterprises

and renowned fashion brands, packed with skincare products specially selected from

another Italian luxury brand, Acca Kappa.

While the new First Class travel kit for female passengers features elegant

designs by Ipa-Nima, a Vietnam-based brand, and carries skincare products by

Australian-based brand Aesop, made using plant-based ingredients of the highest

quality as well as non-botanical elements.

In 23 July, 2010, Cathay Pacific has launched one of the world’s first customized

airline applications, CX Mobile application, for the ipad. The CX Mobile application

can be downloaded free of charge from Apple’s iTunes store which offers users access

to a wide range of Cathay Pacific services and information including checking in for

flights, checking the status of flights, accessing flight schedules and managing their

bookings.


In 6 July, 2010, it has good news for the customers; it is because Cathay Pacific

Airways plans to offer in-flight broadband; cell-phone service and live television on

its aircraft from early 2012, Cathay Pacific will use the eXConnect system supplied

by Panasonic Avionics that can deliver a 50Mbit/sec. Internet stream via satellite to

aircraft. That stream will be split between passenger Internet service and crew

applications, such as the transmission of real-time flight data back to the airline's base

of operations. Moreover, the satellite link will also support data and voice cell-phone

calls and carry a handful of live TV stations and some pay-per-view programming.

Also Cathay Pacific is the first airline to offer those services in Asia.

In the recent, it had an earthquake in Japan, some Hong Kong people can not

back to Hong Kong immediately, Cathay Pacific has offered more flights from Japan

to Hong Kong; let those Hong Kong people can back to Hong Kong as soon as

possible. Furthermore, after the earthquake in Japan, most of the flights had delayed

or canceled, Cathay Pacific has a special policy for this situation. The customers can

refund all the ticket charge. Refunds are applicable to all tickets regardless of fare

type, including those sold in special sales promotions


Summary

In this chapter had introduced those theories about the service and

customers’ needs. Also it had included Cathay Pacific how to satisfy the customers. In

next chapter it will talk about how to evaluate those actions were done by Cathay

Pacific. And introduce using which method to find out the customers’ satisfaction

after traveling Cathay Pacific. Moreover, in Cathay Pacific Airways Limited, they

have two loyalty programs. For The Marco Polo Club, the company can create a

customer database which may record the flying patterns, preferences and the

demographic information of the customer which can let the marketers to form

marketing strategies, pricing and inventory management. Secondly, the company has

built up a specific channel with the customer. Once the company has any new

promotions or newsletters, the company can send to the customer directly through

email or the club magazine. Apart from that, Cathy Pacific will provide some

privilege services to the customers which can make them feel honorable and enhance

the customer satisfaction which can retain the customer and attract them to repeat

purchasing.

Another customer loyalty program is Asia Miles; Asia Miles is a loyalty program

which rewards the frequent flyer. And it can increase the average sales and also

increase the demand in low season. By rewarding the customer, the customer will

keep on purchasing from the Cathay Pacific.


Chapter 3

Methodology

Noel (2008) states that the research methodology defines what the activity of

research is, how to proceed, how to measure progress, and what constitutes success. It

provides us advancement of wealth of human knowledge, tools of the trade to carry

out research. The research methodology is a science that studying how research is

done scientifically. It is the way to systematically solve the research problem by

logically adopting various steps. Also it defines the way in which the data are

collected in a research project. However, in this study, it has some restrictions; it only

can collect 50 questionnaires or 2 interviews or focus groups. Moreover, in this study,

it will use questionnaires to collect the information by the customers, try to get the

useful information to prove that Cathay Pacific has good relationship with the

customers. In the questionnaire mainly to ask the customers are they satisfy the

service after traveling Cathay Pacific and what Cathay Pacific should improve.

Furthermore, at the above it has some news about Cathay Pacific what they

have done in the recent. The questionnaire can show that the customers are they

satisfy those changes of Cathay Pacific. Moreover, why do not use the past data to

analysis the customers’ satisfaction and try to set a questionnaire to collect the new

data. It is because the world is changing day to day the data got last year may be out

dated. So that, there is a need for researcher to find out the update information to do


the latest research for exist in this industry. In this research will collect the primary

sources and the secondary sources.

If it had more time to doing this research and didn’t have any limited such as

doing 2 interviews or 50 questionnaires. It will have more accurate evaluation, it is

because doing more questionnaires or interviews, and it will have more data to

analysis. Moreover, the questionnaire it will include the open questions, the open

question can reflect the customers’ needs and wants. After knowing their needs and

wants, it is easy to know how to improve the service to satisfy them. However, this

study had a limited time and limited questionnaire. It does not have enough time to

analysis large amount questionnaire.

Primary research

Cohen (1991,p.104) defined that primary research involves the collection of

primary data by marketing researcher or agents of the marketing researcher directly

from respondents. It is because these data must be collected firsthand, the process to

set a good questionnaire, it may be wasting a lot of time but it can collect the

information which is directly relate with the research.


There are many ways to collect the data for example, telephone interview,

personal face to face interview, mail survey, focus group, questionnaire etc.,

Boyd(1989, p.212) stated that the greatest advantage of the questionnaire method was

its versatility. Almost every problem of marketing research can be approached from

the questionnaire standpoint. Boyd also point out that questioning is usually faster and

cheaper than observing as interviewers have more control over their data gathering

activities than do observers.

Secondary research

According to Saunders, Lewis and Thornhill (2000), it stated ‘Secondary data is

often criticized for being out-dated and inconsistent’. It is because nowadays the

information is changing very fast, for example some news or journals may be

out-dated after a few months or years such as technology items ----- i-pad. After the

i –pad on sale for a few months. It already has some news about i-pad2. If want to get

an update information, find the secondary data should not a good choice. However,

secondary data, it is cheaper and easy to get it. It is because nowadays, finding the

secondary data in internet very convenient.


Chapter 4

Findings and Analysis

Table 1

Gender Percentage

Male 58%

Female 42%

Table 2

Frequency Percentage

Always(over 6 per yr) 10%

Often(3~5 per yr) 16%

Seldom(1~2per yr) 68%

Never 6%

In table 2 shows that most of the people will travel Cathay Pacific per year and

most of them will travel Cathay Pacific 1~2 times per year. Only 6% people never

travel Cathay Pacific.


Table 3

Age Percentage

18-25 12%

26-35 52%

36-45 20%

46-55 12%

56 and above 4%

Table 4

Occupation Percentage

Student 4%

White Collar 62%

Blue Collar 14%

Housewife 12%

Retired 4%

Unemployed 2%

Others 2%

In table 3 shoes that all people are over 18 years old. Most of them are in the

working age range (26~55 years old), in table 4 can show that the percentage of white

collar and blue collar are higher than other occupations. The table 3 age range of

18~25 and 56 and above percentage total is near to the table 4 percentage of student,

retired, unemployed and others.


Table 5

Education level Percentage

Primary School or Below 2%

Primary School 0%

Secondary School 20%

Certificate/Diploma 28%

University or above 50%

Table 6

Income(HKD) Percentage

< Less than $10,000 12%

$10,001 - $15,000 30%

$15,001 - $20,000 22%

$20,001 or above 36%

In table 5, it can see that most of the customers’ education level is above diploma.

It is about 78%. And the table shows that about 20% customers are above secondary

school level. Moreover, in Hong Kong secondary level or diploma level worker their

income classes are very close. Most of their income classes are $10,000~$20,000

when they are graduated. In the table 6 can show that the percentage of

$10,000~$20,000 income class is 52%. Furthermore, it has 50% customers are

university level or above. The table 6 shows that 36% customers’ income classes is

$20,001 or above, it had 18 customers in this research had $20,001 or above income.

And 16 out of 18 of them are university level or above. Only 2 of them are secondary

school level.


In this research question 3 it is about the customers’ satisfaction of in-flight

service. In the questionnaire 1 = Very dissatisfaction 2 = Dissatisfaction 3 = Fair

4= Satisfaction 5= Very satisfaction

After the analysis, the mean of the customers’ satisfaction is 3.6 and the standard

derivation is 0.84. It can show that most of the customers’ satisfaction is above average.

Moreover, in question 7 it is about the customers’ satisfaction of the Cathay

Pacific loyalty program. And the mean of the customers’ satisfaction is 3.36 and the

standard derivation is 0.5904. The loyalty system of Cathay Pacific is not bad most of

the customers feel satisfy. Furthermore, the mean of customers’ satisfaction of

in-flight service and the mean of customers’ satisfaction of the Cathay Pacific loyalty

program are very close. It can show that most of the customers after traveling Cathay

Pacific, they are satisfy the service and they will join the loyalty club. Also the

in-flight service and loyalty club can satisfy the customers’ needs at least major

customers feel it is fair not dissatisfy.


Table 7

Kind of improvement of the service No. of customers’ choice

Food and Drink 35

Safety Guideline 12

Grooming 1

In-Fight Service 39

Fight Delay Policy 11

In-Flight Entertainment 26

In-Flight Announcement 5

In table 7 it can show that most of the customers are not satisfy the food and

drink, in-flight service and the in-flight entertainment. If Cathay Pacific wants to have

high rank in customers’ satisfaction, these three things it should improve.

Table 8

Kind of information the customers

always search in CX website

No. of customers’ choice

Refund Policy 20

Promotions 33

Souvenir 11

Loyalty Club 7

Online Booking 28

Complain Method 10

Cathay Pacific History 0

Flight Delay Announcement 13

In table 8 shows that none of the customers are care about the history of Cathay

Pacific, most of the customers are concern about the promotion, online booking and

refund policy. They want have more promotion can get a lower price tickets also the

convenient of booking the seat. If Cathay Pacific wants to attract more customers, it

should put more efforts on promotion and has better refund policy than other airline.


Table 9

Kind of service should provide in loyalty

club

No. of customers’ choice

Brochure Of Other Countries Culture 16

24Hr Hotline 35

Miles Refund 12

Priority Boarding 18

Extra Baggage Quotas 18

In the table 9 it shows that most customers want the loyalty club provide 24 hour

hotline. Moreover, others services are very close, it can show that different customers

have different needs and those services are important too.


Chapter 5

Conclusions and Recommendations

After this study, it can let us know that the important of service, the customers’

satisfaction and using what method to evaluate the customers’ satisfaction. If the firms

want to satisfy the customers’ needs and wants, it should understand their perception

and expectation first if not the firms may provide wrong service to the customers. No

any gap between the firms and customers is the best.

Besides maintaining the quality of flight service, Cathay has launched a variety

of activities to establish and improve the relationship with the existing customers as

well as the potential customers.

Cathay has launched one of the world’s first customized airline applications, CX

Mobile application, for i-pad. The CX Mobile application can be downloaded free of

charge from Apple’s i-Tunes store which offers users access to a wide range of Cathay

Pacific services and information including checking in for flights, checking the status

of flights, accessing flight schedules and managing their bookings.

Cathay cooperated with 2 worldwide famous brands, Ermenegildo Zegna and

Ipa-Nima to offer the airline's passengers traveling in First Class new travel kits with

exclusively designed amenity bags. The airline's male passengers traveling in First

Class will receive a stylish black pouch designed by Ermenegildo Zegna, one of


Italy's most famous family enterprises and renowned fashion brands, packed with

skincare products specially selected from another Italian luxury brand, Acca Kappa.

While the new First Class travel kit for female passengers features elegant designs by

Ipa-Nima, a Vietnam-based brand, and carries skincare products by Australian-based

brand Aesop, made using plant-based ingredients of the highest quality as well as

non-botanical elements

Cathay announced the introduction of a new method of calculating extra baggage

charges which aims at simplifying the handling of charges for extra baggage and

special baggage. The new policy ensures a much more straightforward and transparent

calculation of baggage charges, and customers can view a easy-to-understand grid of

charges through the airline’s website which facilitates them in calculating exactly

what charges they will have to pay by referring to the zones in which their travel

originates and ends.

Moreover, this study can tell more that customer loyalty program and its

application. Nowadays, customer loyalty programs are used across the board among

service industries. Thus it is important for us to learn development of an effective

customer loyalty program. Also Cathay Pacific has a good loyalty club in the

questionnaire most of the customers are satisfy the loyalty club.

Finally, if the firms want to make more profit, it should provide the good quality

service for the customers to satisfy their needs and wants. The firms do not


misunderstand the customers’ needs and wants; it can decrease the gap of the

customers’ expectation and the firms’ service. If the firms want to have long term

relationship with the customers, it can build up a good loyalty system.


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