THE IMPACT OF VALUE CREATION AND SATISFACTION IN AVIATION INDUSTRY IN NIGERIA

ABSTRACT

The study examined the

impact of value creation and satisfaction in aviation industry in Nigeria. The theoretical framework covered DART theory that explained how customer satisfaction will be improved using value creation. A sample size of 320 was determined from a population of 1600 respondents using Taro Yamane’s sampling technique. Data were collected through questionnaire. 320 copies of questionnaire were distributed to the respondents out of which 303 copies were found useful for data analysis. The data were analyzed using Spearman’s Rank Order Correlation Coefficient Statistic which was facilitated through the application of Statistical Package for Social Science (SPSS Version 23.0). The findings showed a significant relationship between value creation and customer satisfaction in Aviation Industry in Nigeria. Based on the findings, the study concluded that value creation affects customer satisfaction in Aviation Industry in Nigeria. Hence, the study recommended that management should place more emphases on increasing customers’ satisfaction through value creation. They should build customers’ experience through personal interaction, make strategic involvement of customers and organization in guiding the activities of the business and build an effective engagement platform with the aim to maintain personal touch across all customers to increase customer loyalty and emotive commitment which are core measures of customer satisfaction in Aviation Industry in Nigeria.

TABLE OF CONTENTS

ABSTRACT

CHAPTER ONE

INTRODUCTION

1.1 Background of the study

1.2 Statement of the Problem

1.3 Aim and Objective of the Study

1.4 Research Questions

1.5 Research Hypotheses

1.6 Significance of the Study

1.7 Scope of the study

1.8 Limitation of the Study

CHAPTER TWO

LITERATURE REVIEW

2.1 Conceptual review

2.1.1 Customer Relationship Management

2.1.2 Value creation

2.1.3 Customer Satisfaction

2.1.4 Customer Loyalty

2.1.5 Emotive Commitment

2.1.6 Impact of value creation and satisfaction

2.2 Theoretical Framework

2.3 Empirical Review

CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Research Design

3.2 Population of the study

3.3 Sample size and Sampling Techniques

3.4 Instrument design

3.5 Operational Measurement of Variables

3.6 Validity and Reliability of Instrument

3.7 Reliability of Instrument

3.8 Methods of Data Analysis

CHAPTER FOUR

RESULTS AND DISCUSSION

4.1 Results

4.2 Discussion of Findings

CHAPTER FIVE

CONCLUSION AND RECOMMENDATIONS

5.1 Conclusion

5.2 Recommendations

5.3 Contributions to Knowledge

5.4 Areas for further Research

REFERENCES

CHAPTER ONE

INTRODUCTION

1.1 Background of the study

Today’s business environments have been faced with intense competition coupled with sophisticated technology and globalization. In view of this, customers have become more sensitive by the day and this has made most organizations to place utmost priority and concern on their customers as they are the vital elements and the central of all their marketing strategy (Karakostas; Kardaras and Papathanassiou, 2015). Consumers' needs and expectations are continuously changing. Hence, customer relationship management (CRM) has become a priority for firms’ business strategy (Karakostas, 2015). Academics and practitioners opined that a relationship is necessary for firms to survive and be successful in contemporary business environments (Heinrich, 2015) (Gefen and Ridings, 2012; Ngai, 2015) reported that when organizations improve relationships with their consumers, employees and the environment it leads to improved customer loyalty and also increase profitability. (Karakostas, 2015) states that Customer Relationship Management is the management approach that seeks to create, develop, and enhance relationships with carefully targeted customers in order to maximize customer value and corporate profitability. Kuo-Chung and Chin (2012) stated that Customer relationship management (CRM) is becoming an important issue in organizations in order to gain customer loyalty, improve customer retention rates as well as increase profits.

The success of airlines depends majorly on the ability to identify customers’ wants and needs, and factor it in the quality service that would meet customers’ satisfaction. Air transport is the transportation of passengers and cargo by aircraft and helicopters.

Aviation Industry is an important transportation industry or sector in Nigeria. The industry promotes economic development and contributes greatly to the success of transportation system in Nigeria. The industry for instance employed workers and helps in reducing the level of employment in the country. When an industry like Aviation Industry has in mind to satisfy its customers always, such industry can withstand turbulent business challenges and will gain competitive advantage over others (Vilare et al., 2011). According to Kotler and Keller (2019), when customers are satisfied, they develop brand loyalty, refer other customers to patronize the brand and services. With respect to the Aviation Industry, the satisfied customer will encourage others to travel with the Airline which they derived satisfaction. As this referring process continues, the customers will develop customer loyalty and emotive commitment.

The vital area which Aviation Industry has not identify as the basic mechanism for satisfying customers lies in adopting value creation concept (Nirmali, Tajid & Azam, 2011; Ramaswamy & Ozcam, 2014). In fact, many scholars or authors have also not extensively study value creation concept as a determinant for customer satisfaction. When the study of value creation is approached as a major means of satisfying customers, the Aviation Industry and other business organizations will see the need to invite customers in creation of values for goods and services. Still on value creation, personal Interaction is developed as customers becomes friendly with the organization. They also develop trust and respect for each other; they share their views and experiences. What comes out due to personal interaction between both parties will pave way for the success of value creation since the firm (Airline) will engage such a customer in value creation initiative (Lee et al., 2012). Another important dimension is engagement platform which serves as a market or channel where customers and a firm meet to decide on how the nature and quality of products and services should be produced to meet customers’ needs (Srinivasan, & Hanssens, 2019).

It is quite obvious that many authors and researchers have conducted studies on value cocreation over the years (Spreng et al., 2021; Payne et al., 2018; Ramaswamy and Goüllart; 2020) but most of the researchers focused on manufacturing firms with no regards to the Aviation Industry which is a critical sector that needs value cocreation on services provided. Additionally, those researchers and their studies were carried out in foreign environment of which their culture may be different from firms in the domestic environment like Nigeria. Hence, the present is carried out to examine the relationship between value creation in Aviation Industry in Nigeria with the aim to fill this knowledge gap.

1.2 Statement of the Problem

Aviation industry has made a significant contribution to Nigeria's and the world's economic and tourism development. As a result of the rapid entry and exit of goods and services, the Nigerian aviation industry generates more revenue and contributes to the economy, ensures promotion and improvement of people's quality of life and living standards across the country. However, it appears that the performance of Nigeria's aviation industry is deteriorating. This is evidenced in frequent complaints by customers with respect to quality of services delivery Organization that involved customers in value creation increases their level of satisfaction but reverse is the case with Aviation Industry in Nigeria. The Industry failed in this aspect and failure to make available and necessary services inevitably lead to customer dissatisfaction. The dissatisfaction of customers was observed in frequent complaints by customers about poor service delivery, lack of provisions of adequate security and safety measures. The use of obsolete equipments and poor infrastructure is another problem. The use of second handed transport Airplanes or Aircrafts have resulted in disaster or crashed and takes many lives (e.g. Sosoliso Airline crashed). Other Airlines are no longer in operations (e.g. Changangi, ADC, Okada Airlines etc).

Poor development of skills and manpower unavailability including high cost of booking tickets were also observed. Additionally, it was noted that the Industry exhibits poor maintenance culture which is evidenced in poor lighting on Run-ways; couple with internet service failures; poor Car Hiring services and its environment; poor pharmacy/First Aid facilities and services; poor convenience facilities and poor customers and employee relationships. All of these are problems causing customers dissatisfaction in Aviation industry in Nigeria. Similar problems were identified in the foreign environment by Payne et al. (2018) that lack of value creation affects organizational growth. However, in Aviation industry in Nigeria, it was observed that these problems stemmed from lack of involving customers in value creation practice.

The manifestations of customer dissatisfaction have affected the Aviation Industry in terms of growth, sales volume, profitability, customer relationship development and technological advancement. Hence, seen Aviation Industry as an important sector for economic viability in Nigeria, any encroachment on its performance will exert a strong negative result on the economy as well. This has necessitated the present study to examine the relationship between impact of value creation and satisfaction in Aviation Industry in Nigeria to provide solutions to this problem.

1.3 Aim and Objective of the Study

The aim of this study was to examine the impact of value creation and satisfaction in aviation industry in Nigeria, while the study objectives are:

1. To examine the personal interaction, relate to customer loyalty in Aviation Industry in Nigeria.

2. TO find out how personal interaction relate to emotive commitment in Aviation Industry in Nigeria.

3. To examine the relationship between engagement platform and customer loyalty in Aviation Industry in Nigeria.

4. To find out the ways engagement platform relates to emotive commitment in Aviation Industry in Nigeria.

1.4 Research Questions

The following research questions guided the study

1. How does personal interaction relate to customer loyalty in Aviation Industry in Nigeria?

2. How does personal interaction relate to emotive commitment in Aviation Industry in Nigeria?

3. What is the relationship between engagement platform and customer loyalty in Aviation Industry in Nigeria?

4. In what ways does engagement platform relates to emotive commitment in Aviation Industry in Nigeria?

1.5 Research Hypotheses

The following research hypotheses were formed to guide the study:

1.6 Significance of the Study

The findings from the study will add meaning to the customers, future researchers, managers, stakeholders and captains of industries including other business organizations. Aviation Industry will know the need for value creation and embrace it as a strategy during planning or decision-making process on how to create value of products or services that will satisfy customers. The study will also help customers to see the reason why they must be involved in creating the value of services that will satisfy them. Future researchers will see the research findings as meaningful for future literature review. Secondly, the gap found will be useful in carrying out further research in the area of concerns.

The study was domiciled in relationship marketing and consumer behaviour because value creation emphasizes on establishing cordial relationship with customers with the aim of improving customers’ loyalty. The geographical scope of the study covered all Airports in Nigeria. The unit/level of analysis was ascertained from the individual level because it considered only internal and external customers of the Aviation Industry. Additionally, these categories of respondents are direct consumers of Aviation services of which their level of satisfaction might dictate the success of the Aviation Industry.

1.7 Scope of the study

On the basis of the subject matter, the study focused on the impact of value creation and satisfaction in aviation industry in Nigeria. The study comprised of customers (internal/external customers) in Aviation Industry in Nigeria.

1.8 Limitation of the Study

The major constraints of the study are:

Attitude of the Respondents

The unwillingness of some of the management to divulge strategic information in the name of confidentiality was limitation to this study and some of the respondents showed negative attitude towards the study by failing to supply some necessary information. But this was overcome through the use of journal published by the firms and past researcher.

Non availability of Research Materials

Being an area of concern to the government in developing the economy, coupled with the present economic crisis rocking the nation and the aviation sector, the management of some airlines withholds some information that should have been of great benefit to the researcher. This was overcome through views and contributions of analyst in the media and materials from the internet.