1.0 Title
The proposed title for the
research study is The Impact of Total
Quality Management (TQM) on Effectiveness of Customer Retention Plan in New
Zealand Professional Services. This proposal will present background
information and review related literatures about TQM. It will also present the
different methodologies, approaches and instruments which will be used and
applied in order to successfully implement the study.
2.0 Introduction
Quality is considered as an
effective strategic technique in order to improve the productivity of an
organization (Hasan and Kerr, 2003). Service quality is a multi-dimensional
construct and it is perceived as the attributes of service delivery system,
which pertains on the level of the satisfaction of the customer as well as the
connections among the different entities of the service system which describe
the service encounter (Chase and Bowen, 1991). Per se, efforts and strategies
are aimed in improvement of quality of service, which mainly focus on front-
and backend of the overall service operational (Yasin, et al., 2002).
Currently, interest in
application of TQM in service industry is increasing. This is because of the
fact that the service sector in all industrial countries are playing a vital
role in the economy, at the same time, it covers a wide range of organizations,
which include: consultancy firms, insurance, hotels, healthcare, retailers,
banking, airlines, construction firms, utilities and transport and
communication companies. The quality of service can help to improve the
competitiveness of a company because of the increase satisfaction of the
customers, thus, the company can gain competitive advantage, which will help to
maintain edge from its competitors (Hasan and Kerr, 2003).).
TQM is widely accepted in the
manufacturing industry and setting. However, in the past few years, there are
numbers of service companies in different service industries, such as
healthcare, tourism and insurance which showing interests in TQM (Hasan and
Kerr, 2003). The said interest is because of the advantages and benefits TQM
can offer to the strategic and operational aspect of the organizational
performance (Augus, Krishnan and Kadir, 2000).
2.1 Statement
of the Problem
The problem that will be
addressed in the study is the impact of TQM on the customer retention plan in
the professional services in New Zealand. The following will be the questions
to be answered in the study:
·
What
are the different factors which drive and motivate customer satisfaction and
loyalty in the service sector?
·
How
does TQM help professional service firms in New Zealand in terms of customer
retention?
·
What
is the impact of customer retention in the overall performance of companies in
the professional service sector?
2.2 Objectives
of the Study
The main aim of the study is to analyze the impact of TQM
on the effectiveness of customer retention plan in New Zealand professional
service industry. In line with this, the following are the specific objectives
of the study:
·
To
examine the current professional service sector of New Zealand;
·
To
assess the importance of service quality towards the customer relationship
aspects of companies in service sector; and
·
To
evaluate the significance of TQM towards the success of maintaining good
relationship with the customers; and
2.3 Significance
of the Study
The issue of quality is
always an important aspect in any sector or industry. This is because of the
fact that quality, particularly in the service sector is the vital factors
which connect the customers to a specific company. The quality of service being
offered by a specific company motivates customer satisfaction, loyalty and
retention, which are vital in the marketing and management aspect. This study
will be helpful in order to analyze how TQM influence the customer relationship
of organizations in the service environment. Therefore, this paper will be
helpful towards firms and companies in the service sector of New Zealand to
focus more on their TQM processes and standards in order to come up with
established and competitive customer relationship.
3.0 Literature
Review
3.1 Total
Quality Management
The
materialization of TQM is considered as one of the most important developments
in management practice in the last 20 years. TQM was first brought up into the
USA around 1980 in order to focus on the severe competitive challenge from
companies from Japan. Consequently, TQM had been recognized as a source of
competitive advantage in the world, particularly in the Western countries,
specifically in the manufacturing sector (Dean and Bowen, 1994).Different
studies, surveys and researches showed that even though TQM offer mixed results
in terms of benefits and advantages, in general, TQM help to offer advantages
for those organizations which implement it properly (Samson and Terziovski,
1999)
TQM
is considered as the process and art of managing the whole in order to
accomplish excellence. TQM can be defined as both a philosophy and a set of
guiding standards and principles which correspond to the underpinnings of an
endless improving and evolving organization. Thus, it pertains on the
implementation of different qualitative methods and human resources in order to
develop and improve all the procedures being done inside the organization, at
the same time, meet and exceed the needs of the customers in the current
environment and in the future. TQM incorporates the basic management
techniques, current improvements as well as the different technical tools under
a disciplined strategy (Talukder and Ghosh, 2004). With these, it shows that
TQM pertains on the understanding that organizations must be considered as
systems which the different processes and procedures which main goal is to
serve the customers. Therefore, TQM looks for in order to inflict standards,
acquire efficiencies and effectiveness, describe the roles of every individual
in processes as well as the organization as a whole, lessen errors and defects
by implementation of different statistical process control, and to make use of
teams in order to plan and carry out procedures in more efficient manner. It
also enables leaders who are willing to establish a culture wherein people can
describe and define their roles and responsibility pertaining on the quality
outputs towards the customers (Moghaddam and Moballeghi, 2008).
On the other hand, TQM also focus on the issues related
to customer satisfaction and guidance towards the implementation and
application of different marketing concepts. In 1980’s the issue related to the
process of constant improvement in order to satisfy the needs of customers emerged
(Churchill and Paul, 1994). The concept of total quality is considered as the
general viewpoint of management which goes well beyond the marketing
customer-perceived view of quality by counting all vital requirements and
necessities which help not just towards the perceived quality of the customer
but also towards satisfaction of the customers (Price and Chen, 1993).
3.2 Service
Quality
There are three alternative themes of service quality:
attribute theory, customer satisfaction theory and interaction theory (Chase
and Bowen, 1991).
The attribute theory presumes that service quality
chiefly mirrors the characteristics of the service delivery system, thus it
applies the framework of product quality towards the services. In addition, it
also assumes that management has a vital control over the input which defines
these attributes (Hasan and Kerr, 2003).
The customer satisfaction theory approach pertains to
service quality as the difference between the quality of service expectations
and the perceptions of reality (Parasuraman, Zeithamal and Berry 1988). Thus,
it mainly focuses towards the points-of-view of the customers, while the
attribute theory mainly focuses on the significance of the technical aspect of
the production process (Hasan and Kerr, 2003).
Lastly, the approach of interaction theory considers
service quality as the “shared experience of gain” by all participants in the
service encounters (Klaus, 1985). Therefore, the quality of service
materializes via the experience and the need satisfaction of the customers and
the employees (Hasan and Kerr, 2003).
Quality is considered as a multi-dimensional occurrence.
It is important to know the most prominent aspects of quality to guarantee
quality of product or service. According to Grongroos (1978) there are three
vital dimensions of service quality, which include the technical quality of the
result, the functional quality of the service encounter and the image of the
company. This is supported by other studies which show that service quality include
three important dimensions, which include: physical quality – the physical
attributes of the service; corporate quality – the image and attributes of the
company; and interactive quality – the connection between the employees of the
customers. On the other hand, Parasuraman, Zeithaml and Berry (1985) identified
5 determinants of service quality: tangibles, reliability, responsiveness,
empathy and assurance. Thus, Parasuraman Zeithaml and Berry (1988) enabled to
develop an instrument known as SERVQUAL which help to measure the service
quality as perceived by the customers.
3.3 TQM
and Customer
The study of Mehra, Hoffman and Sirias (2001) showed the
importance of customer focus on TQM, and stated that TQM is customer oriented.
Thus, the authors focused on the significance of the elements of customer
loyalty and customer satisfaction in TQM. Therefore, TQM must be used in order
to improve customer focus, thus, it is important to focus on satisfaction of
the customers.
With this, it shows that TQM is customer-oriented, thus
TQM is expected to focus towards customer-focus in the future. This is being
supported by different studies and literatures. The study of Chien, Su and Su
(2002) shows that for those organizations that are planning to implement TQM, it
is vital to focus first towards achievement of customer satisfaction. The
authors believed that the degree of the customer satisfaction that have
achieved is closely connected to the TQM practices of a company, consequently
it affect the overall performance of the company. In addition, the study of
Kaynak (2003) suggested that there is a need to do further research in order to
study more the relationship of TQM and the customer relations and
satisfactions. For this reason, it is reasonable to believe that
customer-focused organizations need TQM in order to improve customer focus and
their overall performance (Mehra and Ranganathan, 2008).
On the other hand, the study of Cronin and Taylor (1992)
investigated the conceptualization and measurement of service quality and its
connection with service quality, satisfaction of the customers as well as the
purchase intentions and behaviors. The result showed that the a
performance-based measure of service quality may be considered as an improved
approaches of determining the service quality construct, thus, the consumer
satisfaction has a vital impact towards the purchase intensions.
4.0 Methodology
The research will be operated
within the cross-sectional design; the researcher will collect data on more
than one case with the use of questionnaire and semi-structured interviews.
This will help in order to focus on the breath of the research. Cross-sectional
design will be applied because of the time constraints. According to Saunders
et al. (2003), cross-sectional enable to study a given phenomenon at a given
period of time. Furthermore, it can also help in order to describe the
environment and situation of a phenomenon and even compare factors in different
settings.
Descriptive method will be
utilized for this study because it will help to present the facts of the
problem as it exists during the time of the study. According to Creswell
(1994), descriptive study helps to explain the present situations based on the
impressions and reactions of the respondents involved in the research.
4.1 Data
Collection
Both primary and secondary data will be used in this
study. Primary data will be gathered by survey questionnaire and interview.
Surveys are considered as the most common types of research method for
collecting primary data (Commonwealth of Learning, 2000). This is because it
can help in order to describe and count the frequency of some important
phenomenon which helps to assess the distribution of important variables
related to population. It is planned to design the questionnaire with the use
of 5-point Liker Scale, which will enable to collect data based on the level of
agreement or disagreement of the respondents in statements given in the
questionnaire. Interviews will be done through phones in order to follow the
schedule of the respondents, at the same time, to save time and cost for both
the researcher and the respondents.
On the other hand, secondary data will be gathered from
researches, studies and literatures of past. This will be gathered from
different online libraries which include Emerald, Questia and Science Direct.
4.2 Sample
Frame
The target sample population for this research is 50
marketing staffs and managers from different professional service companies in
New Zealand. It will include sectors such as tourism or hospitality, banking
and consultancy services. The respondents will be selected via random sampling,
in order to prevent bias from the researcher. The name of the respondents and
their respective organizations will be listed in strips of paper then will be
drawn. Names of respondents who will undergo interview will also be drawn, and
then e-mail will be sent in order to acquire their approval. Then schedule of
interview will be sent.
4.3 Data
Analysis
The primary data gathered
from the respondents will be checked (to know if the questionnaires were
completed and if the answers are appropriate). Then the data will be encoded in
SPSS, statistic software/application. In connection, the following are the
statistical formulas to be used:
1. Percentage
2. Weighted
Mean
4.4 Limitation
The main limitation of the
study focus on the time spent in the study. It is important to consider that
the time to spend in the study has a direct impact to the methodologies and
instruments to be used and applied, thus it has an impact towards the result of
the study. In addition, the number of the respondents will also be an important
issues, this will affect the result of the study, particularly because it will
not cater the majority of the service companies in New Zealand.
4.5 Timetable
5.0 Conclusion
Focusing on the quality of
service had indeed become one of the primary focuses on businesses in different
sectors. This particularly important in the service sector, where in the
perception of the customers will be directly related towards the different
factors involved in the service, which include the physical aspect and the
behavior of the employees serving them, together with their total experience
and interaction with the firm. With this, TQM is also being applied by many organizations
in the world, in order to gain competitive advantage, at the same time,
focusing on the satisfaction and loyalty of the customers.
This study will help in order
to connect the TQM processes towards the effectiveness of customer retention
plan. This is important because customer retention can help in order to
maintain the position of a company in the market, which will mean continuous
increase or maintenance of level of sales and profit.
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