The Effect of Car Quality on After-Sales Service from the Customers’ Perspective

The Effect of Car Quality on After-Sales Service from the Customers’ Perspective

 Sajjad Kheiri

Master of Industrial Engineering, Systems Management and Efficiency of Yazd University

s.kheiri@isqi.co.ir

Seyed Mostafa Hoseinian

Master of Industrial Engineering, Systems Management and efficiency, Islamic Azad University of Karaj

m.hosseinian@isqi.co.ir

Kiomars Yagmaei

Master of Management in Information Technology, Islamic Azad University, Central Tehran Branch

k.yaghmaei@isqi.com

Corresponding Author Email: s.kheiri@isqi.co.ir

ABSTRACT

In the present competitive world, organizations are faced with new challenge, today; demand for goods is less than its supply, so organizations must raise their customer satisfaction efforts. The performance of automotive companies in customer satisfaction is also affected Iran, on the other hand the company’s customer service delivery chain, including the process of providing after-sales service, and it is expected that customers who are dissatisfied with the discontent of vehicle quality after-sales service is also reflected in the satisfaction of their sale. Therefore the purpose of this study is analyzing the effect of vehicle quality on after-sales service from the customers’ perspective. Two separate questionnaires have been designed for the survey of customers and the sample size of the 1549 car buyers that their vehicles were delivered in the summer and autumn of 2015. The results show that customer satisfaction with vehicle quality has a significant effect on their satisfaction after sales service.

Keywords: Customer Satisfaction, Quality, After-Sales Service, Structural Equation Model (SEM)

Introduction

In the present competitive world, organizations are faced with new challenge, in the past, due to the high demand of supply, manufacturers and service providers believed that they can sell their products and services under any circumstances and keep their business up and running, but with changes in the business environment (internal and external) and the increase in supply of goods and services by rival firms, organizations are seeking competitive advantage over their rivals, the most important cases which can be cited is customer satisfaction. Attracting and retaining customers is vital for continued business. An organization that attract customer satisfaction, convince them to buy and can convert them to loyal customers, is a step ahead of other organizations [1].

Customers and consumers, because of the diversity and abundance of choice are always looking for the supply of the goods or services they provide much better. In this regard, industry leaders have no choice but to respect and attract attention and customers’ satisfaction, in these circumstances, 91% of customers that their satisfaction not meted they will not come again see the organization [2], while the losing one customer is escaping another 100 customers [3]. Discovering the needs and demands of customers and meeting them before the competition is a prerequisite for success for an organization. One of the most common ways to determine the needs and demands of customers is measuring customer satisfaction.  Measuring customer satisfaction is an effective tool for controlling the overall performance of the organization and will help identify weaknesses and trying to improve them and to identify the strengths of the organization is providing senior management decisions. Also today customer satisfaction is not enough and organizations should ensure that they are loyal customers of the organization.

Focus on customer loyalty is a default to survive by any organization (manufacturing and services). When they are profitable organizations that increased customer satisfaction and increased satisfaction leads to customer loyalty [4]. Baradaran et al defined that customer satisfaction stems from three factors; perceived quality, perceived value and customer image and indices affecting customer loyalty, customer satisfaction and customer loyalty have introduced one of the main indicators [5].

The operation of a manufacturing organization is like a chain. The operational parts of an organization that will be associated with client organizations have an impact on customer satisfaction. In addition, the impact of customer satisfaction on the satisfaction of various operational sectors will also affect other sectors. Generally, in Iranian car industry, clients understanding of basic quality product that is derived from the performance of domestic manufacturing sectors and is an automotive company is not be separate from performance of after-sales service and the impact of customer satisfaction from initial product quality on after-sales service satisfaction is under investigation.

Automotive industry in Iran is one of the most important industries in the country. Vehicle manufacturers for planning and appropriate policies to improve the profitability of the organization and more requires a comprehensive understanding of the factors influencing the thinking of the organization and the customer thinking, For this purpose, we have customer satisfaction in the process and different parts that are in contact with customers and highlighted the impact of these sectors is evaluated on each other to take appropriate programs to address deficiencies in any part, or any part of the walk alongside each other in order to increase customer satisfaction and create an relevant image in the minds of their customers. With this approach, the present study uses a developed model and integrated approach using structural equation modeling to answer this question:

Is there a significant relationship between customer satisfaction of product quality and satisfaction of after-sales service in the automobile industry?

Review of literature

In recent years researchers have had a great deal of attention to customer satisfaction evaluation. But researchers usually focus on customer satisfaction with the quality of the product or provided service and it was less likely to have attention issues of customer satisfaction sales process. On the other side of a study that examines integrated satisfaction with the sales process and measures the satisfaction of the product quality and their impact on each other, has not been observed by researchers of the project.

2-1 Customer Satisfaction

Cutler defines customer satisfaction as the degree to which actual performance of a company meet the customer expectations. According to Cutler if the company meets customer expectations, customer feel satisfied otherwise he will be uncomfortable [6].

Satisfaction is customer sentiment that is obtained from the reaction of interaction with the supplier or consumer product. Satisfaction is obtained from a different understanding between customer expectations and actual performance of the product, or organization. Previous experience of consumer products has a major role in shaping expectations as well as customer experience when interacting with the supplier. In addition, customer satisfaction, their future reactions toward the organization affect, including the readiness and willingness to reuse, willingness to recommend the organization to others and willingness to pay for the product without bargaining or trying to find who offer the same product have offered a lower price. Igert and Olega, Lin and Wang have noted customer satisfaction as a strong predictor for behavior variables such as willingness to buy again, recommend to others to buy and customer loyalty [4], [5].

 

2-2 Measuring customer satisfaction

Customer satisfaction can be used to measure different models. Based on a division Pafrat Sebastian et al [7] have done, customer satisfaction measurement models were divided into two types: objective and subjective. Objective models can be measured by methods that are correlated to customer satisfaction assessment, such as market share, the number of complaints, revenue, etc. because these indicators do not include customers’ personal opinions and validity of these models is disputed. For example the sale of a product cannot be interpreted as customer satisfaction. In contrast, mental models are based on the satisfaction level of customers’ needs. In other words, these models act on the basis of customer perception of satisfaction. These models use directly from customer ideas and the approach of offering customers the satisfaction that they are closer to understanding. Figure 1 shows the classification of evaluation models of customer satisfaction.

Figure 1 shows classification of customer satisfaction measurement models [7]

The following two SERVQUAL and Kano’s model of customer satisfaction assessments are briefly explained in the literature because of their common use.

SERVQUAL model was developed in 1985 by Parasuraman and Berry, Zed, Hamel et al to measure the quality of service [8]. This model tries to measure the quality of services in environments where quality of service is a necessity to understand the customer feeling. Parasvrmn model has features that can be used for a wide variety of service environments. The original SERVQUAL model by Parasuraman, Berry, Zed, and Hamel et al in 1988 was decreased from ten indicators in five main indexes which is one of the best models to evaluate customer expectations and their perception of the quality of provided services [9]. These indicators include [10]:

  1. Physical Dimensions: equipment, staff and communication media
  2. Confidence Capability: to properly perform the promised service
  3. Responsiveness: Willingness to help customers and provide prompt service
  4. Guarantee and Assurance: knowledge and courtesy of employees and the ability to convey trust and confidence
  5. Empathy: paying attention to the individual customers

Kano model was presented for the first time in 1979 by Noriaki Kano which today is used in many models of customer satisfaction [11]. The root of this model is from Herzberg’s motivation theory in science is health [12]. Kano Analysis is a quality measurement tools for prioritizing the demands of customers based on their impact on customer satisfaction [13]. In Kano model, product features that meet the needs of customers are divided into three categories. The three requirements are:

Must-be needs (basic characteristics): This class features are in those product features that if it is satisfied, the customers significantly will be dissatisfied. On the other hand, if this needs to be provided in accordance with customer requirements, customer satisfaction does not increase [14].

One-dimensional needs (functional characteristics): The second groups of non-functional requirements are performance demands of product; it means what the ad business, newspapers and everyday people talk about the presented products. These demands are specified by the customer and meet their expressed consent and did not cause them to cause customer dissatisfaction. For example, the warranty and reasonable price of a car is in this group [15]

Attractive needs (motivational characteristics): It needs the product features that affect the level of customer satisfaction after receiving the product. Attractive needs are never explicitly stated by the customer or are not expected to satisfy, these needs will increase customer satisfaction but if the customer does not receive these features, they are not dissatisfied [14].

2-3 After-sales car service, Car Initial Quality

Car Initial Quality is customer understanding of the product and its compliance with the requirements that is defined in the first three months of vehicle ownership. In this process indicators such as housing, lobby, propulsion and fuel collection, set the suspension and powertrain, safety, HVAC, appliances, etc. is evaluated from the perspective of customers.

Similarly, the process of after-sales service car collection measures by the supplier of products with the aim of consumer protection in order to maintain the sold product is offered to customers is defined the automotive after-sales service process. In the process of after-sales service indicators such as interaction and principles of work, payment, and quality of received service, spent time, distribution and after-sales service network span are evaluated from the perspective of clients.

3- Research Objectives

The main purpose of this study is “analyzing the effects of customer satisfaction of vehicle quality satisfaction of after-sales service” and following alternative purposes:

  • Checking the weight factor of each measures of customer satisfaction of after-sales service
  • Checking the weight factor of each measures of customer satisfaction of quality

4-Research Hypotheses

According to the specified target, the tested hypothesis in this study is defined as follows.

  • H: There is a significant positive effect between customer satisfaction of vehicle quality and customer satisfaction after-sales service in the automotive industry.

For better evaluation model, satisfaction with the quality of vehicles taken from 5 overall index “Body and Cabin”, “set the driving and fuel”, “collection and transmission suspension”, “safety” and “air-conditioning and electrical appliances” and customer satisfaction of after-sales service from 5 overall index ” spent time “, “service quality”, “payment”, “interacting and principles” and “after-sales service network” is intended. Based on the assumptions, goals and explanations provided conceptual model is presented in Figure 2.

Figure 2; Conceptual Model

Figure 2: Conceptual Model

 5- Methodology

Since the purpose of research is to determine the causal relationship between independent variables and the dependent variables, thus there is an applied research and data collection method is causal-comparative and structural equation modeling type.

For the presented model two questionnaires have been completed separately and at different times by the customers.

The first questionnaire related to customer satisfaction is the quality of his vehicle, include 5 main indicator of “Body and Cabin”, “driving and fueling set”, “pending the collection and transfer of power”, “safety” and “air conditioning equipment electric which  24 questions were designed to cover these 5 overall indexes. The same method was used in this questionnaire to determine the weight and importance of the questionnaires. The questionnaire measure customer satisfaction is a standard questionnaire of vehicle quality that is designed by the company’s quality inspection standard which has been approved by the Ministry of Industry, Mine and Trade. In the design process of vehicle quality and customer satisfaction questionnaire also collected all phases of design including needs assessment, the process of identifying the appropriate range, as well as the validity and reliability of the questionnaire was conducted, a summary of this process is given in this study.

For Needs Assessment questionnaire 311 questionnaire among the customers who have been selected randomly from corporate such as ASAN Motor, ATLAS KHODRO, Iran KHODRO, Pars KHODRO, SAIPA, Kerman Motor and MODIRAN KHODRO have been completed. Lawshe technique was used for validity and for reliability 250 initial interviews was conducted for the results obtained for Cronbach’s alpha 0.791 that represents the acceptable reliability of this questionnaire.

The second survey of customer satisfaction after-sales service which include 5 main indicator of “spent time”, “service quality”, “payment”, “interaction and principles” and “extensive distribution of after-sale service network” which  11 questions were designed to cover these 5 overall indexes. The same method was used in this questionnaire to determine the weight and importance of the questionnaires. The questionnaire measure customer satisfaction is a standard questionnaire of vehicle quality that is designed by the company’s quality inspection standard which has been approved by the Ministry of Industry, Mine and Trade. In the design process of vehicle quality and customer satisfaction questionnaire also collected all phases of design including needs assessment, the process of identifying the appropriate range, as well as the validity and reliability of the questionnaire was conducted, a summary of this process is given in this study.

For Needs Assessment questionnaire 394 questionnaire among the customers who have been selected randomly from corporate such as ASAN Motor, ATLAS KHODRO, Iran KHODRO, Pars KHODRO, SAIPA, Kerman Motor and MODIRAN KHODRO have been completed. Lavashieh technique was used for validity and for reliability 200 initial interviews was conducted for the results obtained for Cronbach’s alpha 0.915 that represents the acceptable reliability of this questionnaire.

6- The statistical population and sample size

The study sample included customers who received their cars in the summer and fall of 2015, according to Cochran formula and 0.03 sampling error the maximum sample size is 1067 which in this study to cover the required volume achieved in this study by Cochran and fitness coverage Holter index (an indicator of structural equation model) 1549 has been selected [16].

(1)

In which:

N: total population

e: Percentage of sampling error

cv: Coefficient variation

n:sample size

z: Confidence ratio is determined based on the normal distribution table

7- Administrative procedure

Due to the diverse nature of the survey of vehicle quality and after-sales service process as well as surveys of the two questionnaires have been completed at two different times, but with a specific person, the first questionnaire, the questionnaire also assessed customer satisfaction of vehicle quality customer because they have enough time for using car and give proportional results to give precise answer about the quality has been completed three months after delivery of the vehicle and the second questionnaire to assess customer satisfaction questionnaire after-sales service process because amnesia may affect customer survey results and satisfaction, in the first week customer has received their car, has been completed.

8- Research Findings

In Table 1 the demographic information of statistical population is presented.

Table 1; the demographic information

The results show that significant results for 380 samples at 0.05 and 0.01 levels of the 439 samples will suffice, 1549 samples were used in this study, that the results for this indicator confirm the number of samples used for this model.

10- Structural Model

After securing the approval of the measurement model, structural equation model was developed. Figure 3 shows the structure of structural equation model with standardized values based on maximum likelihood estimation. In Table 5, the values of the regression weights (loadings) normal and standard for model variables can be observed.

Figure 3; structural equation model

Table 5: Estimated values of structural equation modeling

As it seen in Table 5, the effect of 0.44 unit satisfaction with vehicle quality on after-sales service satisfaction is significant at 0.01 level. Analyzing the loadings factor show that among after-sales service satisfaction indicators, “service quality” index has the highest load factor and then for “spent time “had the highest amount of loadings factor. Also among indicators of satisfying of quality “Car Safety” had the highest loading factor compared to other indicators that show the importance of this indicator is higher among customers.

Discussion and conclusion

This study analyzed the effects of customer satisfaction of after-sales service quality in the automobile industry in Iran. The results are debatable in two areas. First, the effect of customer satisfaction on after-sales service vehicle quality provided by a supplier of the vehicle; second is the importance of questionnaire indicators in customer satisfaction assessment

Automakers imagine that poor quality of cars can be covered in after-sales service and defects in production and vehicle quality after-sales service process has been resolved and attracts customer satisfaction. There is no doubt that after-sale services can attract customer satisfaction. But the remarkable thing is the nature of the process chain in the automotive industry of the sales process, production and quality as well as after-sales service. The results also show that customer satisfaction had significant positive effect on customer satisfaction is the after-sales service. So when the customer satisfaction after-sales service decrease, all influencing factors should be analyzed and the main problem is not just in terms of after-sales service processes. The results showed that one of the most important factors affecting customer satisfaction after-sales service is the satisfaction of quality vehicles.

On the other hand, the results of two questionnaires of loadings factor indicators show that such customers are seeking to meet their needs, that the parameters of vehicle quality index satisfactory assessment questionnaire “Safety” had the highest loading factor which reflects the importance of this indicator in terms of customer satisfaction. The results show that “safety” in vehicle quality in the eyes of customers is the top priority. It also measures satisfaction among customers of two indexes after-sales service “service quality” and “spent time ” had the highest loading factor and the greatest impact. As a result, safety precautions and ensure had an impact on customer satisfaction of vehicle quality and this effect is also reflected on their satisfaction after-sales service. And certainly, the impact on the index of “service quality” and” spent time “, that are among the most influential satisfaction indicators of after-sales service, will be more visible.

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