Project Report: Customer Service Impact on Profitability - BUS101

This project report analyzes the critical role of customer service in the aviation industry, focusing on its impact on customer satisfaction, loyalty, and overall profitability. The report begins by identifying the importance of customer service in the current internet era, highlighting its link to product innovation, pricing, and profit generation. It then presents a case study involving United Airlines, where a passenger was forcibly removed from a flight, leading to negative publicity and potential damage to the company's reputation. The research employs interviews with airline employees to explore the effects of this incident, examining the role of cultural and ethnic biases in customer service. The report discusses data collection methods, limitations, and potential biases, emphasizing the importance of customer-centric strategies in the competitive aviation market. The findings suggest that customer satisfaction is essential for airline success, with a focus on core competencies, competitive advantages, and the need for innovation in services and technology to maintain a strong customer base. The report concludes by emphasizing the importance of addressing customer needs and expectations to foster loyalty and ensure long-term profitability.

Running Head: PROJECT REPORT 1
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1. Identifying the Issue
In the present internet era, the customer service is of utmost importance as it can directly affect
the sales of the organization. The customer service is also liked with different components such
as product innovation and pricing. It is also directly linked with the organization’s ability to
generate profits. Through customer service, the organization change the perception of the
customer’s through word of mouth. It is important to manage the experience of the customer’s in
all their interactions and track them to maintain a healthy relationship. It is important for the
business organizations to build strong positive customer experience, which can only be achieved
by involving strategy, integrating technology, developing business models and managing brands
(Arif, Gupta & Williams, 2013).
The management of the customer experience requires discipline, methodology and integration of
different processes for the cross-cultural exposure, interaction, and transaction of the company,
product, brand, and service. The customer experience requires designing, delivering, and
development of strategies, which can effectively deliver excellent customer experience. The aim
of managing the customer experience is ensuring high quality customer experience which can
increase the loyalty of the customers (Arif, Gupta & Williams, 2013). The current customers can
advocate the use of potential customers with the help of word of mouth marketing.
In the service –oriented industry, customer satisfaction is of prime importance. The civil aviation
industry is also a service-oriented industry as there is high importance of customer service in
aviation industry. The service quality increases the customer satisfaction which can build
customer loyalty. A comprehensive customer satisfaction can result when each member of
organization has an overall understanding of different customer needs and requirements. The
customer service is an important aspect of the needs and requirements of the customer and

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impacts the overall profits and the sales of the organization. The airports or aviation provide high
importance to the improvement of the service quality. In aviation industry, the services have to
focus to reduce the travel time and increase the leisure time in different areas of customer
service. The customer satisfaction is a cyclic process which can increase or decrease with time.
Therefore, it is important that the organization provide comprehensive services (Arif, Gupta &
Williams, 2013). There are two fundamental forces which can increase the profits in the aviation
industry, which are: safety and customer service.
Background to the Case
There are several aspects such as handling the customer complaints and customer safety can
attract the customer the customers towards thee airlines. There are several areas such as customer
priority, performance parameters, performance standard, and service opportunities which
evaluates the services provided to the customers (Gupta, Arif, & Williams, 2013). However,
there are several instances, in which the organization fails to provide proper customer service to
the customers. United express, a United Airlines branch treated one of the customers in a bad
manner. The airport police forcible removed one of the passenger after he refused to leave the
airplane voluntarily. The passenger has paid for the ticket and was allocated a seat; however, still
he was removed from the seat. There was a huge controversy related to the treatment of the
passenger. He was a doctor and stated that the needed to see some patients urgently. Before the
confrontation, the airline manager offered the customers travel vouchers to voluntarily leave the
flight. However, no passenger accepted.
Later, four passengers were selected to vacate the seat for the four airline employees from the
computer algorithm on a random basis. The three of the employees accepted the announcement;
however, the fourth passenger did not move from his place. The management called the airplane

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police, who forced the passenger to leave. The fourth volunteer, a 69 year old doctor, David Dao
was forced to leave, he was pushed and pulled; as a result, he suffered from various injuries to
his heads and mouth. The crew members misbehaved with the passenger. The event was
condemned by the media professionals; however, the response of the owner of the website was
very casual. There has been discussion that the passenger has been under attack because of his
Vietnamese Chinese ethnicity. It has been the most trending topic on the Chinese micro-blogging
Weibo. It damaged the reputation of the company and a large number of people avoided
travelling on the airlines. It reduced the profitability of the organization. In this regard, the
research question for the present report can be developed as:
 Is there any impact of customer service on the customer satisfaction and loyalty? Does the customer satisfaction of the organization impacts its overall profitability? Is there any cultural or ethnic bias in the services and offers provided to different
customers?
2. Description of Data Collection Methods
In the present case of United Airlines, the role of ethnic and cultural differences in the services
offered to different customers has been examined. Moreover, the importance of the customer
services in the development of customer loyalty and the overall profits of the organization has
been examined. The interview method has been adopted to answer the questions of the present
research study. Interview is one of the most popular research method which is used in answering
the research questions in several different domains (Miles & Gilbert, 2005). The present research
explores the correlation between customer satisfaction and its overall profitability. Therefore, it
is an exploratory research. The interview is a popular method which is used to explore some new
information related to the research questions. It is a qualitative research method in which the

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information obtained in qualitative in nature. In qualitative research, the information obtained
has no statistical sections; therefore, the coding of such information is quite challenging.
However, this research method is still popular as it yields some new information related to the
research (Gillham, 2001).
The interview method can be conducted in several ways such as structured interview, semi-
structured interview and unstructured interview. The basic difference between these methods is
designing of the questionnaire. In the structured interview, the questionnaire of the research is
designed beforehand (Mann, 2016). The interviewer asks the same questions and do not deviate
from them. On the other hand, in semi-structured interview, the questions of the interview are not
predetermined; however, the researcher decide the basic direction of the research. In the
unstructured interview process, neither the direction of the interview nor the questions of the
questions of the interview are decided for the interview process (Seidman, 2015). The interview
asks questions by taking lead from the previous answers of the interviewee.
In the present research, an interview has been conducted with two employees of United Airlines.
Their personal views were asked about the impact of the incident on the reputation of the
airlines. The interviewees were asked regarding the strategies of the organization to handle the
situation. The interview was analyzed with the coding strategy. It is the most common method to
code or analyze qualitative data (Gubrium & Holstein, 2002). In this method, the data from the
similar category are given similar codes and they are categorized in one section. Afterwards, the
researcher derives logical conclusion from the data under one category.
3. Limitations and Potential Bias of the Method

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Although the interview method is one of the most common method for the data collection, there
are also several bias and limitation of the method. One of the most common problem in the
interview method is the long-winded answers or the participants often wandering off the main
topic. There is also the issue of bias in the interview method. Bias can emerge from the human
interaction between the interviewee and the interviewer. The bias can also be introduced from
the side of the respondents. The respondents can give biased answers when they are familiar with
the interviewer, or they want to answer in a socially desirable manner, or if they are biased
towards the sponsor of the research. In research, several people report inaccurately on sensitive
and personal topics. Another source of bias can emerge from the researcher. Confirmation is the
most common bias which emerges from the researcher. In research, confirmation bias occurs
when the researcher forms a hypothesis and use user’s response to validate or confirm that belief.
The confirmation bias can emerge as the researcher validate or examine different hypothesis.
The cultural bias is another bias which emerges from judging and examining the culture of
different person by the values of another person (Alshenqeeti, 2014).
4. Discussion
In the service industry, the services provided to the customers is of utmost importance as it
impacts the overall customer experience. The aviation is the part of the service industry;
therefore, it is necessary that the organizations in the industry becomes customer-oriented to
increase the level of customer satisfaction. With the commercialization of both local and
international flights, the companies need to develop a competitive advantage to increase their
customer base. In the recent years, several low-cost airlines have also entered into the consumer
market which has increased the competition in the airlines industry (Arif, Gupta & Williams,
2013). With the competition, the opportunities have also increased in the industry. The

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opportunities have increased due to heightened demand in the industry, with globalization and
the growth of trade and commerce in the industry. The growth of the aviation industry has
increased the consumer demand for the better service. Over the years, the government has also
deregulated the industry and several private airlines have also entered the market due to the high
demands.
In the same regard, the interview respondents have also supported that it is important to focus on
the core competency of the organization with the growing demand in the aviation industry. With
globalization and commercialization, the demand of the business travelers has increased in
aviation. There are a large number of business consumers who regularly fly to close different
business dealings. They are very vigilant of the flight timings and punctuality and are frequent
travelers (Tsaur, Chang & Yen, 2002). Other than that, there is also increase in the number of
leisure travelers who try to seek comfort in their travel. Most of the airlines have created their
core competency and target customers accordingly.
The condition of the intense competition has resulted the companies in innovate in terms of both
services and technology. They are used to deliver better services and safety to the customers. The
traditional airlines providing all types of services are superseded by the low cost carriers as they
provide basic services at low cost (Gittell, 2003). These airlines adopt a low cost strategy with
optimal utilization of resources.
According to the research respondents, United Airlines is a low cost airline. It provides efficient
services in domestic routes. However, there are only a few competitors in the USA in the domain
of low cost flights. Therefore, the incident of forced eviction has little negative impact on the
overall sales of the organization. However, the incident has initiated the debate of cultural issues
and the company might face issues while entering the foreign markets. Moreover, several of the

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customers of Asian and African ethnicity have started avoiding the airlines. The government has
also intervened to protect the rights of the customers. It has invited criticism from international
authorities and tarnished the name of the company in front of its customers.
There are several definitions of customer satisfaction provided by different authors. The
customer satisfaction paradigm emphasize on the cognitive process which results in the
satisfaction of customers. It refers to the consumer response to the evaluation of perceived
expectation from a product or service and the actual product or service. The satisfaction is a
complex phenomenon which involves several cognitive, affective, and other psychological
dynamics. In the service industry, the customer satisfaction can be measured in two broad
categories. The first category measures the level of customer satisfaction and issues in the
service delivery. It is a diagnostic tool which can be used by the managers to find the loopholes
in the services offered by them (Huang, 2010). The next category examines the customer
satisfaction with different factors such as service quality, perceived image of the brand, and the
perceived quality. The service quality and the perceived brand value are important determinants
of the service quality. These factors are used to analyze the customer loyalty in the industry. The
customer loyalty is an important determinant and can result in repetitive customers (Skogland &
Siguaw, 2004).
The research respondents have also agreed that the customer satisfaction is an important
determinant in developing loyal customer base. When a customer is satisfied with the services of
one aviation company, then they become a frequent traveler with that airlines. The company also
try to develop loyal customer base by offering several offers, discounts and loyalty bonus.
However, manhandling and such incidence reduce the loyalty of the customers and several
customers stop taking the services of the airlines. The respondent have also suggested that the

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loyal customers bring new customers through word of mouth (Ryan & Huimin, 2007). In the
present era of social media and internet, the reviews and the responses of the customers is very
essential in maintaining the brand image and positive perception in front of customers. However,
if the organization is focused on its effective marketing strategies, then they will also be spread
quickly.
The service quality is another important aspect in increasing the overall customer satisfaction
and establishing the superiority of the product or service as compared to the other competitors. It
is also an important determinant in the customer or the brand loyalty. It can be critiqued that the
quality of service offered to different customers is important for an organization as it can
increase the customer purchase behavior and the performance of the organization as compared to
the competitors. The customer service quality is the perception of the customer related to the
functional and the technical qualities of the product (Roades & Waguespack 2008). The technical
quality refers to the features of the product which the consumer get in the interaction between the
customer and the buyer. The functional quality of the service refers to the encounter of the
customers with the employees. The service quality can also be referred as the gap between the
perception of the customer and the expectations of the performance.
The interview respondents have also supported that the service quality has several dimensions
and features and it directly impacts on the level of customer satisfaction. As per the literature,
there are several aspects of service quality such as reliability, responsiveness, assurance and
empathy. The employees familiar with the concept of customer service and service quality are
better able to satisfy their customers. When the respondents were asked about the cultural
discrimination, they stated that the organizations are quite strict about these matters (Noor,

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2005). Proper training is provided to all the employees so that they can serve the customers in a
proper manner. Moreover, if any bias occurs, it can only be a result of personal issue or bias.
5. Recommendations and Conclusion
It can be concluded that there are several strategies used by the companies in the aviation
industry to increase their profitability. The aviation companies can be categorized in two
categories, namely, low cost airlines as well as the full service airlines. The low cost airlines
emphasize on the price offered to different customers whereas the full service airlines emphasize
on the quality of services. United Airs is a low cost airline. Customer satisfaction model stress on
the cognitive process which results in the satisfaction of customers. It refers to the consumer
response to the difference between perceived expectation from a product or service and the
actual product or service. The satisfaction is a complex phenomenon which involves several
cognitive, affective, and other psychological dynamics. The interview method is selected to
obtain the views of industry experts related to the customer service in aviation.
It can be recommended that the companies in this category should focus on the prices offered to
the customers. At each flight, the company should focus on optimally utilizing the resources to
provide the customers with the lowest fare (Lovelock & Wirtz, 2007).
It can also be recommended that in case of dilemma of complex decision making, the staff
members should be careful of the legislations and the company’s policy. It is important to
provide training to the customers so that they abide by organization polices at all times
(Namkung & Jang, 2007).

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