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Customer Behaviour and Selection Criteria on Alternative Taxi Service in Karachi

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Added on  2021-05-29

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This research explores the consumer behaviour toward alternative taxi in Karachi by finding insight on what consumer think and why they choose to use alternative taxi service instead of traditional taxi. The study aims to understand the customer behaviour in terms of service quality, frequency of using, period of using, purpose of using, and to determine selection criteria on choosing alternative taxi service and the most important factor those customers concerned. The findings of this research indicate the major factors that affect the satisfaction of customers in the sector and suggest improvements.

Customer Behaviour and Selection Criteria on Alternative Taxi Service in Karachi

   Added on 2021-05-29

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Chapter 1: Introduction1.1Background of researchCustomer satisfaction is expressed in different ways by different scholars. Kotler & Keller,(2009) explained that satisfaction is “a person’s feelings of pleasure or disappointment thatresults from comparing a product’s perceived performance or outcome with theirexpectations”. Authors elaborate, if performance fails to meet what is expected, then thecustomer will feel disappointed or dissatisfied whereas, if the performance is able to meet whatis expected, then the customer will feel satisfied and if the performance could exceed what isexpected, then the customer will feel very satisfied or delighted (Ibad, 2020). Based on disconfirmation point of view, Customers have positive confirmation when they findthat actual performance is somewhat equal or falls above their expected performance ofproducts and services. But when the actual performance falls below the expectation, customershave negative confirmation which leads to dissatisfaction. Hence, satisfied customers havepositive confirmation resulting in their positive feedback from products and services (Khan etal., 2018). Customer satisfaction is a function of expectations and service quality performance. It occupiesa strategic position for the well-being of a company and then existence, because a lot ofbenefits to be gained: First, many researchers agree that a satisfied customer tends to be loyal(Shaikh et al., 2019). Second, according to Anderson, Formelo & Lehmann (1994), satisfaction isa factor that would encourage positive word of mouth communication. Third, the effect ofcustomer satisfaction lets one to consider buying/using other offerings of the firm if it is able tomeet or exceed the customer’s first impression of expectation.Anderson et al. (1994) found a significant relationship between customer satisfaction andreturn on assets. High quality leads to high levels of customer retention, increase loyalty, andpositive word of mouth, which in turn are strongly related to profitability (Reichheld and Sasser,1990).
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Karachi is a big city of Pakistan that consists of more than 200 million residents. People travelaround town by using many type of transportation. One of the main public transportation thathas been used by most of the Karachi residents is taxi service. However, there are lots ofproblems happen to the users from taking this traditional taxi service such as refusal ofpassenger’s request, impolite manners of drivers, taking the indirect route, going to the wrongdestination, reckless driving etc. And the numbers of complaints keep increasing every year andseem to have no any improvement (Ibad, 2020).A taxi service carries out an important task on offering personalized service in the urbantransportation system. The inequality between the taxi supply and passenger demand is one ofthe challenges of running an effective taxi service these days (Shen, Qiu, Li & Feng, 2015). Thismakes it difficult for travelers to be picked up on time, and available taxis waste lots of time toget customers, which worsens the existing traffic congestion and the air pollution problem.Both Uber and Airlift have developed their mobile app to facilitate millions of customers inKarachi (Shen et al. 2015) and this is to deal with the above problem. The passengers can searchfor available taxis around them and make an order. They fix their locations by GPS or typing thetarget location, by which drivers can easily reach them. (Rayle et al., 2016).1.2Statement of problemCurrently there are about five companies participating in the mobile application (app) taxiservice sector to fulfill the needs of transportation of commuters. In a competitive businessenvironment, it is necessary that the service quality should be matched with the perception andexpectation of customers to satisfy their needs & cope up with rivals in the marketplace.Therefore, it is important for companies to understand their customer’s perception regardingthe quality of the service they are providing. Ling & Wang (2006) explains “customersatisfaction could be considered a comparative behavior between inputs beforehand and postobtainments”. This implies customer satisfaction measures how well an organization’s productor service meets or exceeds customer expectations. These expectations often reflect many
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