acceptance of islamic finance products: a study on muslim consumers attitude in a non muslim country

First Edition 2008 © ABU BAKAR HAMID, NOR HAZARINA HASHIM &

AHMAD SHARIFUDDIN SHAMSUDDIN 2008

All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical including photocopy, recording, or any information storage and retrieval system, without permission in writing from Universiti Teknologi Malaysia, Skudai, 81310 Johor Darul Tak'zim, Malaysia.

Perpustakaan Negara Malaysia Cataloguing-in-Publication Data

Customer satisfaction and service quality : challenges and issues in Malaysia / penyelenggara Abu Bakar Abdul Hamid, Nor Hazarina Hashim, Ahmad Sharifuddin Shamsuddin. Includes index ISBN 978-983-52-0697-9 1. Customer service--Malaysia. 2. Consumer satisfaction--Malaysia I. Abu Bakar Abdul Hamid, 1956-. II. Noor Hazarina Hashim. III. Ahmad Sharifuddin Shamsuddin. 658.812

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iv

iv

CONTENTS

Preface vi

Chapter 1 Acceptance of Islamic Finance Product: A Study on Muslim Consumers Attitude: In A Non Muslim Country

An Examination of the Relationship Between Student Satisfaction and Academic Performance

Applying the Student-as-Partner between Student Satisfaction and Academic Performance within the Context of Malaysian Public Institutions of Higher Learning

Choose Malaysia as Their Choice Destination

Customer-Oriented Selling Behavior, Social Values and Sales Performance: An Empirical Study of Life Insurance Agents

Customer Satisfaction and Loyalty at Retail Outlet of Major Oil and Gas Company Southern Malaysia

1

17

33

49

67

81

Chapter 2

Chapter 3

Chapter 4

Chapter 5

Chapter 6

v

101

125

Private Health Care Service An Application of SERVQUAL Model: Views of Malay Ethnic Groups

Sustaining Quality in Education Business:

Program

Chapter 7

Chapter 8

vi

vi

PREFACE

In view of the crucial and competitive market environment, marketers need to focus on customers who are highly sophisticated and informative with the current information age. Industries involved in providing individuals or organisations needs and wants have to quantum leap their expectations, be innovative and creative in providing quality products and services to satisfy the consumers.

This book will investigate and suggest recommendations and remedies for marketers to undertake precise decision making to ensure sustainability of the industries.

Foremost, the discussion emphasis on Muslim consumers in

education is becoming a commodity item where researchers are examining the relationships between student satisfaction and academic performance and applying student-as-partner model in Malaysian public institutions of higher learning.

The inspiration of the Malaysian government to attract tourism as a source of income, researchers investigate the factors

of destination.

satisfaction is the insurance and oil and gas industries. Where researchers have examined the selling behavior, social values and sales performance and customer loyalty in retail businesses.

vii

satisfy the customer quality perception. These qualities are empirically investigated in the private health care service from the views of Malay ethnic group and a theoretical framework is developed in education business.

Editors

Noor Hazarina HashimAhmad Sharifuddin ShamsuddinFaculty of Management and Human ResourceDevelopment Universiti Teknologi Malaysia2008

1Acceptance Of Islamic Finance Products:A Study On Muslim Consumers Attitude In A Non Muslim Country

1ACCEPTANCE OF ISLAMIC FINANCE

PRODUCTS: A STUDY ON MUSLIM CONSUMERS ATTITUDE IN A NON

MUSLIM COUNTRY

MOHD EFFANDI YUSOFF AHMAD SHARIFUDDIN SHAMSUDDIN

NORZAIDAHWATI ZAIDIN ROHAIZAT BAHARUN

Abstract : In accordance with the teachings of Islam which prohibit the utilisation of Riba (interest), this has led to the development of a banking approach which are based on the laws of shariah. Although these methods are not totally new or revolutionary as it has been written and practiced during the renaissance of the Islamic civilisation, it has yet to establish itself and tested in the modern world as compared to the conventional banking. Many Muslims worldwide still engage in

are staying in non-Muslim countries. There are many reasons why Muslims still engage in non-interest-free products. One of the reasons

such instruments, as most of them are not easy to get. To some extent,

products among Muslims outside the Islamic world and will explain whether there is demand for such product from Muslims staying in non Muslim countries. The study reveals that Muslims living in non Muslim countries are very much willing to change their practices from the conventional system into the new system – the Islamic

2 Customer Satisfaction and Service Quality Challenges and Issues in Malaysia 2008

Keywords: Islamic banking, consumer attitude, mudharabah, Quran, Sunnah.

INTRODUCTION

According to Mills and Presley, Islam is founded upon the notion

submission to the pattern of life revealed by God through the Quran and Sunnah. (Mills and Presley, 1999) Islam is not only about religion but a complete and comprehensive religion providing an exact

of knowledge, concept and the guidelines are the Quran and Sunnah, which have been used by the Muslims since the glorious years of Prophet Muhammad S.A.W. With reference to these guidelines, many Muslim scholars have taken an initiative, in the light of Sharia to develop a modern Islamic economy.

banks and the conventional banks? It is commonly known that the Islamic bank has strictly prohibited the use of or deals with interest.

Islamic economic order. To show the strictness of prohibition of

the Muslims of the heavy punishments if one deals with interest? Allah Almighty says:

O you, who believe, fear Allah and give up what remains due to you of interest if you are indeed Believers. And if you do not, then be warned of war (against you) by Allah and His Messenger, while if you repent you shall have your capital. Do not do wrong and you shall net be wronged. (2:278-279)

“But Allah hath permitted trade and forbidden usury” Al-Baqarah 275


“O you, who believe! Eat not up your Property among

and Trade by Mutual goodwill nor kill (or destroy) – An-Nisaa 29

transactions by saying:

Allah has cursed the one who takes Riba, the one who pays it, the one who writes the contract, and the one who witnesses the contract (reported by Ahmed, Abu Daoud, Al-Nisai, Ibn Majah, and Al-Tarmidzi)

Academy, established by the Organisation of Islamic Conference (OIC) in its second session in 1985, declared that: ‘any increase or

maturity date, in case the borrower is unable to pay, and any increase

forms of usury or Riba which is prohibited under the sharia’

others are that the creditors are not subject to any form of risk. Since Islam teaches their followers to be fair and just, both parties should be exposed to a certain elements of risk. Secondly, he also mentions that interest will encourage the capital owner to remain idle (sleeping partners) and not engage in more productive activities such as trade, agriculture and industry. He also mentioned that interest would weaken the cohesion of the society by expecting something rather than being based on charity. In addition, most of the creditors are rich and most of the debtors are poor. Therefore, by imposing interest it will make the debtor poorer as they have to pay back the principal as well as the interest. This will result in a wider gap between the two


intermediaries or Islamic banks have to play a very important part in

Ahmed (Ahmed, 2000), Islamic banks are institution that extends all types of modern banking services within an Islamic framework. Thereby the Islamic banks must involve direct participation in

addition to that, he also mentioned that the Islamic bank, just like the other banks is in the business of management of money. However the Islamic banks have responsibilities to perform a socially useful

framework.

its commitment to the principle of Islamic Sharia and to the banning of the receipt and payment of interest in any of its operations”.

those who are staying in non-Muslim countries. There are many reasons why Muslims still engage in non-interest-free products.

such products.This paper attempts to examine the attitude of Muslim

Loughborough was chosen because of several reasons.

ethnic minorities, the majority of which are Muslim people. Most


of the ethnic minorities are from Indian sub-continent such as Bangladesh, Pakistan and Africa. The number of Asian people, mostly students, is also growing. Most of them are international students who enroll in programmes lasting more than a year, meaning in the

Loughborough is situated to the North of Charnwood Forest in Leicester and is the largest settlement in Shire County. The area

industry and manufacturing especially in pharmaceutical products. The town also has a renowned University (Loughborough University) where the University supported the establishment of Science Park and has many links with industry (www.leics.gov.uk).

Statistics (ONS), and found there are 46746 residents in Loughborough. Out of this total there are only 46187 residents in household categories. The number of males in Loughborough is less than the number of females, a total of 22965 and 23781 females. The ONS believe that usually the resident population tends to change every 10 years and the percentage change from 1981 to 1991 is only 1.9% (850)(ONS: 1991 census).

categories. The categories are:

The total number of ethnic minorities populationThe age structureThe ethnic originThe economic activityThe households and dwellings

By analysing the data, information such as the level of income,

categories which are:

1.2.3.4.5.


From the data above, we can observe that the total population for the ethnic minorities in Loughborough (Asian, Black and others) is 5371 people. On the other hand, data provided by the Leicester City Council shows that the total ethnic minorities’ population in the Charnwood District in 1991 was estimated to have been 8,850. Therefore, comparing these two sets of data, it shows that the majority of the ethnic minority’s population in the Charnwood District was concentrated in Loughborough.

The objectives of this paper among others are to determine

of demand among Muslim people in Loughborough. By knowing the level of awareness, this paper intends to identify the demand from

products.

REVIEW OF LITERATURE

In 1986, from a private survey, it is estimated that the Muslim population in the Britain has reach 936 000 people compared to the

Muslims up by 36%. (Table 1)

Ethnic Origin Total Percentage

White 41,418 88.6%

Asian 4,048 8.7%

Black 308 0.7%

Other 1,015 2.2%


It is clear that the vast majority of immigrants are from a

Pakistan, both West and East, and Bangladesh in 1971 (Nielsen 1992). The reason for such an increase in the population is because of the swings in the labour market in Britain and better educational opportunities. However, this is mainly prior to 1962 when the entry

The increase in the Muslim population can also be

passing of legislation of bringing family from the country of origin to Britain (Table 2). The table shows that before 1975, the number

Table 1

Country of origin PopulationBangladeshIndiaPakistanMalaysiaArabsIranTurkeyTurkish CypriotsEast AfricaNigeriaOthersTotal

64 00084 000357 00030 000121 00050 00021 00050 00099 00025 00027 000936 000

(Taken from Nielsen 1992 p.41)


effect of the new oil wealth of certain Muslim countries. However,

to receive such support (oil money) but failed to receive it. Several

actually more than 338 since some of them are not registered with the Registrar General (Nielsen 1999, pp. 16)

or an indicator of the number of Muslim people in the area. If the

Muslim people has also increased. It can be concluded that the number of ethnic minorities

in Britain is increasing and expanding. In years to come, there is a possibility that the number of ethnic minorities will be at par with the Caucasians.

ISLAMIC FINANCE IN THE UK

Although Islamic banks have made major achievements and developments over the years, the major challenges they face should not be ignored. The challenges may slow down certain developments

comply with the principles of shariah. Thus the challenges should be critically analysed in order to improve services as well as the product

The main challenges faces by Islamic banking are the

very few acceptable investment contracts to choose from. Compared

term, low risk investment instruments, which are normally in the form


Murabaha (Vogel, 1998). Although Islamic banking is constantly

Murabaha). This shows that Mudharabah and Musharakah are

of the banking practices of Islamic banks are done on the basis of Murabahah

reasons why the use of Mudharabah and Musharakah were not widely

and act fairly towards both parties when doing business. Thus it

the Islamic banks have to develop a contract to keep the monitoring

issues arising when the lender and the investor have asymmetric

the bank and the depositors.Another challenge that Islamic banks face is the degree of

competition. There is no doubt that Islamic banking is expanding,

Conventional banks around the world have also started supplying

living in non-Muslim countries. HSBC and Citibank are two major


In terms of brand and marketing, these banks are in a better position

as the Islamic banks (Warde 2000).

as they are hampered by religious constraint. Even if they manage to introduce a new instrument, it will take a considerable time before it will be used. This is because there are sometimes gaps in communication between the bankers and the scholars regarding different perspectives or views towards the Islamic banks operations (Wilson, 2000).

instruments as a result of the government lowering the entry and exit barriers in the market. Well-established retailers such as Tesco and

loans and insurance. This phenomenon has introduced competition

have entered the market and providing the same services (Naser,

competition among domestic players has increased and it has opened up markets to the entry of foreign competitors (Wilson, 1999 & 2000). Now Islamic banks face competition not only from the conventional

pressure for the Islamic banks and they therefore have to reconsider their strategy in order to stay competitive and survive in the future.

The third challenge faced by Islamic banks is their relationship with the regulatory authorities. The importance of this issue is concerned with the supervision of banks following the bank crises faced by the banking industry from past decades. According to

to establish a strong legal system. He also mentions that there is a


This is especially true in the case of BCCI when the regulatory

conducting. This led to the collapse of the institution and a large loss to

institutions as a whole. Thus the projection of the true image of Islamic banking was tarnished and the idea of to be accepted internationally was laid on the line (Qayum, 2000). Financial fraud in the guise of Islamic banking have also thickened the image of non-viability in the eyes of the investor. There are 70 cases reported in Pakistan and 50 in Egypt where the companies misappropriated the public money

In order to prevent similar incidents from happening, the Bank of England had implemented tighter regulations on all

the depositor protection scheme under the Banking Act of 1987, which clearly violates the Shariah

Shariahadvisors will not accept guarantees of deposit value. It should be in the risk-sharing situation. However, the deposit protection scheme implemented by the Bank of England is not a complete protection

£20,000 deposit. In terms of the operation, the Bank of England stresses that the key criteria for any institution accepting deposits

the business (Wilson, 1999 & 2000). This gives opportunities for the Islamic banks to develop instruments and an operating system

METHODOLOGY


to differentiate between permanent and temporary residents, the author

also accepts for Muslim people staying in Loughborough who have intended to become permanent resident and buy a property in the town. For example, a number of students intend to stay and some of them have already bought a house in the town. People, who have purchased property as an investment, are included in the groups. The interviews

Halal shopsBookstores selling Islamic books Muslim social occasionsHalal restaurantWalking in the streets and interview those who wear skull caps and head scarves.Through Muslim addresses

There were 128 useable responses, accounting for approximately 51% response rate.

FINDINGS AND DISCUSSIONS

with mortgages and would like to have Islamic mortgages, and would they shift their current mortgages to the new institution. The response shows positive feedback to have Islamic mortgages in the area.

The most remarkable finding is that the respondents’ willingness to shift their current account to the new Islamic institution.

1.2.3.4.5.6.

7.


respondents were willing to close their existing accounts and open new account with the new Islamic institution and 31.3% would keep two separate accounts. Those who chose to keep two separate accounts

on to their existing account before shifting to the new Islamic bank.

institution among Muslims in Loughborough. However, despite the high demand of an Islamic bank, most Muslims in Loughborough did

for them to understand the operation of Islamic banks. In seeking the relationship between levels of education

The results revealed that 85.7% of respondents with higher degree

it. This contradicts the assumption that the higher education one has,

Hence it is important to educate the Muslims of Loughborough

for the products. Even though recently there are few institutions like The Islamic Foundation in Leicester and Loughborough University

the area which they can deal with.

CONCLUSIONS

proper channel of marketing strategy, the Islamic banks may


educating the customer and give more advice to them. Research and development is also essential to the development of Islamic banks in

products should be developed and can be accepted, not only to Muslim people, but also to non-Muslim customers.

REFERENCES

Ahmad, N. (2000). ‘Islamic Banking and Its Mode of Investments’ in Anthology of Islamic Banking. Institute of Islamic Banking and Insurance London. pp. 307-313

Ahsan, M. (1999). Faith and Practice. Islamic Foundation,

Ainley, M. (2000). ‘A Central Bank’s View of Islamic Banking’ in Anthology of Islamic Banking. Institute of Islamic Banking and Insurance London. pp. 508-513

for Islamic Banking In the 21st Century, Review of Islamic Economics, Journal of the International Association For Islamic Economics and the Islamic Foundation, Number 9.

paper presented in the 6th Intensive Orientation Course on Islamic Economics, Banking and Finance, Islamic Foundation,

City Council, Loughborough, Leicestershire Deakin, W.A. (1979). The Story of L’boro 1888-1914.Echo Press Ltd, pp. 36-37

Lesson in Islamic Economics SeminarProceeding No. 41 Vol. (2). Islamic Development Bank and Islamic Research and Training Institute, pp.491-506

Anthology of Islamic Banking. Institute of Islamic Banking


and Insurance London. pp.627-630Lawai, H. (2000). ‘Essentials of Successful Islamic Banking’ in

Anthology of Islamic Banking. Institute of Islamic Banking and Insurance London. pp. 102-106

Loughborough University Facts and Figures (2002).Martin, J. (2000). ‘Enhancing the Competitiveness of Islamic

Banks’ in Anthology of Islamic Banking. Institute of Islamic Banking and Insurance London. pp. 111-113

Mills, P.S. and Presley, J.R. (1999). . MacmillanPress Limited.

Modood, T. and Berthoud, R. (1997) Ethnic Minorities in Britain:Diversity and Disadvantage. Policy Studies Institute, 12-13.

Nielsen, J.S. (1992). Muslims in Western Europe. Edinburgh University Press.

Nielsen, J.S. (1999). Towards a European Islam. MacmillanPress Ltd.

a study of customer satisfaction and preferences in Jordan”, The International Journal Of Marketing, Bradford 1999

Social Focus on Ethnic Minorities”.

Owen, D. (1994). Ethnic Minorities Women and the LabourMarket: Analysis of the 1991 CensusCommission.

in Anthology of Islamic Banking. Institute of Islamic Banking and Insurance London. pp.77-82

Smith, D. (2000). ‘Islamic Finance – Past, Present and Future’ in Anthology of Islamic Banking. Institute of Islamic Banking and Insurance London. pp. 97-101

Vogel, F.E. and Hayes, S.L. (1998). Islamic Law and Finance: Religion, Risk and ReturnLondon.

Warde, I. (2000). Islamic Finance in the Global Economy. Edinburgh


University Press, pp. 151-166

Opportunities For Islamic Banking and Finance in the West: Islamic Economics Studies Vol.7 Nos.

1& 2, Islamic Development Bank and Islamic Research and Training Institute.

Wilson, R. (2000). ‘Islamic Banking and Its Impact’ in Anthologyof Islamic Banking. Institute of Islamic Banking and Insurance London. pp. 69-7

www.leics.gov.uk

17An Examination Of The Relationship BetweenStudent Satisfaction And Academic Performance

2AN EXAMINATION OF THE

RELATIONSHIP BETWEEN STUDENT SATISFACTION AND ACADEMIC

PERFORMANCE

HUAM HON TATMAGDALENE ANG CHOOI HWA

MUHAMAD JANTANNOOR HAZARINA HASHIM

ABSTRACT: The increasing attention given to student satisfaction within the context of higher education has prompted the writing of this paper. We focus on students’ academic performance with the

perspective of institutions of higher education.

Keywords: Student satisfaction; academic performance; higher

INTRODUCTION


and end users.

institutions.

satisfaction.


LITERATURE REVIEW

Student Satisfaction

to examine satisfaction as an outcome of higher education.


danger of approaching customer orientation strategies in higher

are discussed in the next section.

Academic Performance


as outcomes of higher education show that grades have a strong

program.


point average.


the interaction affected their student rating of instructors and their

environment than students with high academic achievement. Another

experience and academic performance.


RECOMMENDATION


CONCLUSION AND SUGGESTIONS FOR FUTURE STUDY

the institutions of higher education in understanding how student

Are the Relationships betweene Student Satisfaction

No

Tinto’s Model(1975)

Zimmerman’s Self-Regulated Learning Theory

(1989)

Figure 1


REFERENCES

Satisfaction with Oklahoma State University among selected groups of international students

in an executive MBA program. Journal of Education for Business, 71

Journal of Education for Business, 75

Remedial and Special Education, 27

European Joumal of Marketing, 37

The Journal Genetic Psychology, 159

students in Regina. Alberta Journal of Educational Research, 49.


academic achievement. Educational Research Quarterly, 21

College Student Journal, 34

competitive advantage. Business Horizons, 34


higher education: How academic performance affects

Contrasting academic and consumers’ interpretations.


USA.

performance and retention among African American freshmen

33Applying The Student-As-Partner Model WithinThe Context Of Malaysian Public Institutions Of Higher Learning

3APPLYING THE STUDENT-AS-PARTNER

MODEL WITHIN THE CONTEXT OF MALAYSIAN PUBLIC INSTITUTIONS

OF HIGHER LEARNING

HUAM HON TATMAGDALENE ANG CHOOI HWA

AHMAD SHARIFUDDIN SHAMSUDDIN NOR ZAFIR MD SALLEH

ABSTRACTpopulation using metaphors over the past decades (Hoffman & Kretovics, 2004). This has inevitably given rise to multiple metaphors of which three are more frequently used - “the student-as-product” (Emery et al., 2001; Srivanci, 1996); “the student-as-customer” (Comesky, Mc Cool, Byrnes, & Weber, 1992; Emery, Kramer, & Tian, 2001; Pitman, 2000; Tovote, 2001); and “the student-as-employee” (Halbesleben, Becker, & Buckley, 2003; Helms & Key, 1994). Although it seems logical to employ multiple metaphors simultaneously given the diverse nature of higher education in general (Hoffman & Kretovics, 2004), this paper aims to (i) examine the appropriateness of adopting “the student-as-customer” ideology within the Malaysian context; and (ii) propose the “student-as-

interaction between students and Malaysian public institutions of higher learning.

Keywords: Student-as-customer, student-as-partner, public institutions of higher learning, Malaysia.


INTRODUCTION

Numerous student-role metaphors have been proposed by higher

decades (Hoffman & Kretovics, 2004). Among them, three are more frequently cited. They are “the student as customer” (Comesky, Mc Cool, Byrnes, & Weber, 1992; Emery, Kramer, & Tian, 2001; Guolla, 1999; Pitman, 2000; Tovote, 2001); “the student as product” (Emery et al., 2001; Srivanci, 1996); and “the student as employee” (Halbesleben, Becker, & Buckley, 2003; Helms & Key, 1994). While these metaphors are acceptable in several situations, the very vocational nature of higher education sector lends to a more

surprising that there still is an on-going debate in the education arena as to whether students should be treated as customers, products or employees. Whichever is chosen will have important implications

employers, and hence, the strategic planning process. In Malaysia, the substantial allocation of RM12.1 billion

for the Ministry of Higher Education announced in Budget 2008 is indeed a boost to the Ministry. The allocation will undeniably spur our local universities to be on par with world class institutions of higher learning by enabling the Ministry to draw up more strategies to raise the standard of higher education. For these strategies to be effective, however, we strongly believe that the strategy formulation and implementation efforts should be preceded by a careful examination

Given this backdrop, this paper will attempt to examine the “student-as-customer” concept in the context of Malaysian public universities. First, it will summarize the extant literature that provides arguments for and against the perception of students as customers. Additionally, the paper will offer reasons as to why applying the model of student as customer is inappropriate and may even be detrimental. The paper concludes by offering the “student-as-partner” metaphor

the Malaysian context.


“Student-As-Customer” Metaphor

The general idea behind this metaphor is that students are paying for a service (education) and thus should be treated as customers of the university (Halbesleben et al., 2003). In this section, we will

frame the arguments for and against viewing students as customers

we will attempt to posit and will attempt to resolve the question as to whether we should treat students in Malaysian public universities

customer. A customer is a person who buys goods and services as

2005). The ensuing section will now review the extant literature that supports the “student-as-customer” concept.

There are many groups that can be categorized as customers of university institutions that include students, employers, families, and society (Alvarez & Rodríguez, 1997). However, there exists a general consensus among many authors (e.g., Owlia & Aspinwall, 1996; Sallis, 1993; Siu & Wilson, 1998) that it is more logical to view students as customers of these institutions since teaching is basically a service relationship (Chung & McLarney, 2000). Also, with the recent changes in universities and colleges the role of students as “customers” of higher education has received renewed interest (Modell, 2005). Lamentably, the concept of customer is not

(Navarro, Iglesias, & Torres, 2005).

when the marketing perspective was employed to evaluate education. A marketing perspective suggests that students are in role as customers since satisfaction with an educational product/service is an outcome of the exchange between instructors and students (Guolla, 1999). As a matter of fact, education researchers today frequently have promoted the view of students as customers and of education as a service that


they purchase (Halbesleben et al., 2003). If students are the customers, they are the recipients of the value-added activities provided by the educators and administrators (Orsini, 2000). As such, students, being viewed as customers, must be served and whose needs must be met if the relationship with the educational institution is to continue and be successful (Ivancevich & Ivancevich, 1992; Measelle & Egol,

business schools today should then be more market-oriented and be able to anticipate the needs of customers, while striving to meet both expressed and latent needs.

In Malaysia, the corporatisation corporatization of public universities implies that universities will now be allowed to borrow money, enter into business ventures, set up companies, and acquire and hold investment shares (Lee, 1999). An article by Abdullah (2000) discussed the corporatization exercise and underlined the general expectation that public universities and colleges today must

the changing times. Given the above, the notion of treating students as customers seems reasonable since students receive educational services from universities. This perspective too suggests that we should perhaps be running our universities more like businesses.

Similarly, there are a number of writers who are in support of this “student-as-customer” perspective. For instance, Guolla (1999) contended that students should be treated as customers since they anticipate and hope to experience a highly valued service. An empirical study by Shank, Walker, and Hayes (1995) in fact revealed that students expect to be treated with respect and common courtesy. As such, faculty should not take this important aspect of the service

marketing-sensitive environment where university students (especially non-traditional ones) expect to be treated like customers, rather than students. Hence, recent years have seen more universities making conscious efforts in ensuring the ease of most services in general using new technology and focusing more on students as customers. Another development supporting the student-as-customer argument


is the proliferation of different delivery methods for courses.Under the customer metaphor too, Franz (1998) found

students buying their education and shopping around for classes and majors. The goal of an educator now becomes to attract and retain students for the educational courses. Rising costs in education, accompanied by declining performance and productivity, indicate a need for a change to create higher education institutions that are more

of services to students, increase student satisfaction, and minimize costs for the institution (Havranek & Brodwin, 1998). In light of the aforementioned, the concept of treating students as customers is clearly plausible such that it can provide the impetus for universities to strive for excellence, while providing a conducive environment for our students to work.

The next section will examine the literature that refutes the “student-as-customer” metaphor. Although the student-as-customer metaphor has garnered much support, as noted earlier, this notion also has not been spared of criticisms that pointed to the limitations inherent in such thinking (Halbesleben et al., 2003). Thus, there has been and still is much controversy in the education arena over whether students should be treated as customers (Chung & McLarney, 2000). For instance, many researchers (e.g., Driscoll & Wicks, 1998; Scott, 1999) have cautioned against the possible danger of approaching customer orientation strategies in higher education, and some even called it a “damaging view of higher education” (e.g., Kaye, Bickle, & Birtwistle, 2006; Shelley, 2005). To these critics, such perspective could lead to a narrow vocational orientation and loss of control of the curriculum by the academicians (Elliott, Goodwin, & Goodwin,

as a “I purchase-you give me” transaction. On the contrary, students are expected to be active and produce, not merely receive (James, 2001).

While it is true that students exercise educational choices and pay for their educational opportunities, they are not simply customers. Hence, this label does not seem to go well with many in the academy


who opine that it is too businesslike to be acceptable or applicable within higher education (Driscoll & Wicks, 1998; Scrabec, 2000). Although there are some similarities between teaching and selling, the differences far outweigh them (James, 2001). Others argue that students are students; no more, no less (Hoffman & Kretovics, 2004). In reviewing the literature on students as customers, Kamvounais (1999) found that there was difficulty in utilizing customer in describing the relationship between students and universities. For instance, the central function of higher education is to offer education to students. As such, students come to gain an education and to learn. But if we perceive students having the role of customers, then is there something that can be bought by them in their pursuit of education? (Touzeau, 2005).

Undeniably, Malaysian graduate students, like other traditional customers, can shop around for higher education, taking into consideration factors such as price, convenience, reputation, services offered and value. However, this is clearly not the case with undergraduate students. Although their decisions to study at a

forms, the placement is solely determined by the University Centre Unit (UPU) of the Education Ministry. Hence, they may not be able to get into the university or even the course of their choice should they fail to meet certain standards and criteria set by the selection board. Clearly, these students can never become customers to the particular university of their choice, regardless of their ability to pay (Touzeau, 2005).

Moreover, Malaysian students must continue to prove they are making satisfactory progress while pursuing their education,

and/or scholarship money, or even worse, be dismissed. It follows that “higher education is not just a commodity to be bought; rather, it is a privilege to be earned” (Touzeau, 2005, p. 16). Since one must show his or her worthiness to become a student in a higher education institution, education cannot be likened to other generic consumer products and services. Hence, it would be illogical to view students


like we do of other traditional customers; the latter does not have to

the money to pay for it.Even if graduate students have a choice like other traditional

customers as to which university they want to attend, one important fact remains. If these students are customers, they would then have the power to affect teaching styles and course content which is the essence of customer power. Additionally, if the customer is the student, then it seems reasonable the customer should be consulted as to the content and content weight for the course (Leavell, 2006). Kerridge and Mathews (1998) similarly noted that if students were treated as just customers, the module content would be made easy, a minimum of assessment undertaken and all students would be given

scenario in our public universities in which both the course content and content weight have been predetermined by the universities--students are simply not afforded the opportunity to exercise their customer power in this respect.

Also, if students are envisioned only or primarily as consumers, then educators assume the role of panderers, devoted more to immediate satisfaction than to offering the challenge of intellectual

the thin line between serving and pandering in order to survive, and must at all costs make sure that the paying customers are happy (Houle, 2005). The irony is that the marketization, supposedly in the

and indeed, may even produce a worse experience for the student

Furthermore, it is uncommon to hear the phrase “the customer is always right” in educational settings. If the customer were always right in education, the value of performance ratings assigned to students in a course would be undermined (Aliff, 1998). This view

discrepancies in the view of education as a typical commercial


exchange. They argued that students only pay a fraction of the cost of their education, which is particularly true in the public universities and as such there exists no real commercial transaction. In addition, as noted by West (1995, p.20), “The higher education industry is one in which those who consume its product do not purchase it, those who

This statement indirectly suggests that the party that actually funds much of postsecondary education (the government) has little control over how the education is actually administered to the “customer,” further limiting the exchange (Halbesleben et al., 2003).

More importantly, if we become so customer oriented that we focus on keeping our customers happy, then we may have failed at our central objective. We will be doing a great disservice to our students and society and the nation at large by not pushing out students to strive and reach their full potential. Schwartzman (1995) pointed out that as for teaching and learning, the cost of treating students as customers carries mixed blessings. Even if students can be understood as customers in some contexts, they deserve more from educators

increasingly common model of higher education that treats students as customers analogy is harmful to both students and society. This analogy undermines educational quality because it overemphasizes

customer model encourages passive learning and deceives students about the operation of the real world. Ultimately, it threatens social and democratic values by allowing students to buy degrees instead of earning them. Although this would not be the case with Malaysian public universities, the customer framework can still be detrimental such that the quality of higher education will be compromised. But most importantly, the educational process cannot be watered down to the level of a business transaction.

RECOMMENDATION


While treating students as customers has its relevance in several different situations, this concept is still flawed in some ways, particularly in the context of Malaysian higher education. As noted earlier, a true education necessitates students to earn their degrees through sheer hard work, albeit their ability to purchase it. It follows that we should not see education merely as something to be

2006). Hence, adopting this ideology of “student-as-customer” may inadvertently compromise the traditional academic expectations of students and faculty responsibility (Shelley, 2005), and ultimately the quality of Malaysian higher education.

notion and the assumption that quality management education is the educational goal, we propose a more plausible metaphor for the Malaysian public university context. Our view is that students in Malaysian public universities would best assume the role of partners (Franz, 1998; Winer, 1999) rather than that of customers. In other words, students and the university alike must share responsibility for education. As correctly pointed out by Shelley (2005, p. 3), the paradigm “… that places a majority of responsibility for success on one side is doomed for failure…”

As depicted in Figure 1, a partnership suggests shared responsibility and mutual respect, with both students and universities working toward a set of common goals, i.e., the students to optimize their learning processes, and the universities to streamline their academic processes. Applying a model of students and the university as partners is crucial to mitigating the possible contractual hazards between both parties. Besides, the proposed partnership can ultimately

teaching environment. Therefore, the complementary processes of the integration management must be in place.

In adopting the above concept, our main focus here is primarily on making the partners more competitive in the teaching


and learning environment, and this goes well beyond treating students

may have to be proactive and learn new behaviors to adapt to the academic environment. The university, on the other hand, has to view teaching as a tool to manage student-university interactions. We concur with Ho (2003, p. 51) who noted that, “Teaching is not

which the student and the teacher help each other to learn by sharing

Figure 1: Student-as-Partner Metaphor

STUDENTS

Shared ResponsibilityMutual Respect

Integration Management

Complementary Processes

COMMON GOALS

Optimization of Student Learning Processes

Streamlining of University Academic Processes


And to a certain degree, teaching can play a pivotal role in ensuring the quality of academic processes and help provide the universities with a source of competitive advantage. Thus, as noted earlier, teaching should be viewed as solely a necessary connection

rather than as a commercial transaction. In other words, both students and the university, in partnership, are integrated via the complementary processes which in turn help in the attainment of common goals. Hence, in the educational process, educators should regard students with dignity, viewing them as distinctive individuals with different backgrounds and unique learning styles (Touzeau, 2005).

CONCLUSION

Within this framework, our students must then be challenged to take active responsibility for their own learning and to become life-long learners. Hence, applying the student-as-partner model is seen as imperative in two broad aspects: Not only would we be producing a pool of future employees who are better equipped with the skills and knowledge to compete in the demanding, diverse business world they are entering, we would also be helping our students realize their full potential and be the best they can possibly be; both of which are instrumental to the attainment of Vision 2020. We close with the words of Gibbs and Knapp (2002, p.2): “In order to survive, institutions need to understand what they are good at, what they can contribute, and

content in order to add value, and to become partners in sharing and shaping the futures of their students, researchers and benefactors.”


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between market-oriented and customer-led strategic perspectives to business school strategy. Journal of Education for Business, 75, 183-187.

Chung, E., & McLarney, C. (2000). The classroom as a service encounter: Suggestions for value creation. Journal of Management Education, 24, 484-500.

Comesky, R., McCool, S., Byrnes, L., & Weber, R. (1992). Implementing total quality management in higher education.Madison, WI: Magna Publications.

higher education: Who are the customers? Journal of Educational Management, 8, 29-36.

Driscoll, C., & Wicks, D. (1998). The customer-driven approach in business education: A possible danger? Journal of Education for Business, 74, 58-61.

Elliott, C. J., Goodwin, J. S., & Goodwin, J. C. (1994). MBAprograms and business needs: Is there a mismatch? BusinessHorizons, 35, 55-60.

Emery, C., Kramer, T., & Tian, R. (2001). Customers vs. products: Adopting an effective approach to business students, Quality Assurance in Education, 9, 110-115.

customers! Journal of Higher Education, 22, 63-69.


Gibbs, P., & Knapp, M. (2002). Marketing higher and further education. London: Kogan Page.

Guolla, M. (1999). Assessing the teaching quality to student satisfaction relationship: Applied customer satisfaction research in the classroom. Journal of Marketing Theory and Practice, 7, 87-97.

Halbesleben, J. R. B., Becker, J. A. H., & Buckley, M. R. (2003). Considering the labor contributions of students: An alternative to the student-as-customer metaphor. Journal of Education for Business, 78, 255-257.

Havranek, J. E., & Brodwin, M. G. (1998). Restructuringuniversities and colleges: The student-focused paradigm. Education, 119, 115-119.

Helms, S. & Key, C. H. (1994). Are students more than customersin the classroom? Quality Progress, 27, 97-99.

Ho, W. L. (2003). 60 strategies to inspire creativity. Singapore: Pearson Education Asia Pte Ltd.

Hoffman, K. D. & Kretovics, M. A. (2004). Students as partial employees: A metaphor for the student-institution interaction. Innovation Higher education, 29, 103-120,

Houle, A. (2005). The Merits of Student Evaluations. Chronicle of Higher Education, 51, A47.

Ivancevich, D. M. & Ivancevich, S. H. (1992). TQM in theclassroom. Management Accounting, 70, 14-15.

classroom. College and University, 77, 45-46.Kamvounais, P. (1999). Students as customers and higher

education industry: A review of the literature and the legal implications. Academy of Educational Leadership Journal.

Kaye, T, Bickel, R., & Birtwistle, T. (2006). Criticizing the imageof the student as consumer: Examining legal trends and administrative responses in the US and UK. Education and the Law, 18, 85-129.

Kerridge, J. R., & Mathews, B. P. (1998). Student rating of coursesin higher education: Further challenges and opportunities.


Assessment and Evaluation in Higher Education, 23, 71-82.Leavell, H. (2006). Acknowledging the student as the customer:

Inviting student input into course weights. Academy of Educational Leadership Journal, 10, 83-95.

Lee, M. N. N. (1999). Corporatization, privatization, and internationalization of higher education in Malaysia. In M. N. N., Lee, Private Higher Education in Malaysia (pp. 59-85). Malaysia: Sinaran Bros. Sdn Bhd.

level analysis of the construction of performance measurement practices. Accounting, Auditing & Accountability Journal, 18, 537- 563.

Navarro, M. M., Iglesias, M. P., & Torres, P. R. (2005). A new management element for universities: Satisfaction with the offered courses. The International Journal of Educational Management, 19, 505-526.

Orsini, J. N. (2000). Profound Education. Total QualityManagement, 11, S762-S766.

Owlia, M.S., & Aspinwall, E.M. (1996). Quality in highereducation: A survey. Total Quality Management, 7, 161-171.

Pitman, T. (2000). Perceptions of academics and students ascustomers: A survey of administrative staff in higher education. Journal of Higher Education Policy and Management, 22,165-175.

Sallis, E. (1993). Total Quality Management in Education. London: Kogan Page.

Schwartzman, R. (1995). Are students customers? Themetaphorical mismatch between management and education. Education, 116, 215-222.

Scott, S. V. (1999). The academic as service provider: Is theJournal of Higher Education Policy

and Management, 21, 193-202.Scrabec, Q., Jr. (2000). A quality education is not customer driven.

Journal of Education for Business, 75, 298-300.


Shank, M. D., Walker, M., & Hayes, T. (1995). Understanding professional service expectations: Do we know our students expect in a quality education? Journal of Professional Services Marketing, 13, 71-89.

Shelley, P. H. (2005). College needs to give students intensive care. Chronicle of Higher education, 51, B16.

orientation: An application in the education sector. Journalof Marketing Management, 14, 293-323.

Snare, C. E. (1997). Implications of considering student like customers? College Teaching, 45, 122.

Srivanci, M. (1996). Are students the true customers of higher education? Quality Progress, 29, 99-102.

Touzeau, L. A. (2005). Should we treat our students likecustomers? College and University, 81, 41-43.

Tovote, C. (2001). “customer” metaphor in the academic environment and the new pedagogical challenge to the libraries and librarians.Paper presented at the 67th International Federation of library Association General Conference, Boston, MA.

West, E. G. (1995). Reforming the universities: The comingupheaval in higher education in Nova Scotia and elsewhere (pp. 1-46). Atlantic Institute for Market Studies. Ottawa: Carleton University.

Winer, L. (1999). Pursuit of customer satisfaction ruins schools. Marketing News, 33, 11.

49

4FACTORS INFLUENCING

ARAB HOLIDAY MAKERS TOCHOOSE MALAYSIA AS THEIR

CHOICE DESTINATION

ROHAIZAT BAHARUNAMMAR YASSIN GHALIP

Abstractkey driver in the growth of the services sector from 2001 to 2005. Tourism has taken second spot, after manufacturing, in bringing in foreign exchange for the country. Arab travellers chose to come to Malaysia in increasing numbers because they want to spend their holiday in exotic Muslim countries rather than face suspicion in Western countries gripped by fears of terrorism. This paper attempts

trend. Descriptive research design is used and the data collection was mainly done through questionnaires. Self-completion questionnaires were distributed to Arab tourists visiting Malaysia at the peak of the September 2004 tourism season. Findings showed that the majority

and push factors in this study shown the positive image of Malaysia as a tourist destination.

INTRODUCTION

Today in many countries, tourism exports have become an important sector as a growing major source of foreign exchange earnings. In


addition to the generation of foreign exchange earnings tourism also alleviates the balance of payments problems, creates employment

investment and economic growth (Lim, 1997). With tourism emerging

many government and local authorities have become increasingly

balance of a country (Faulkner, 1997). Many countries have sought to improve their competitive position through the implementation of tourism development plan such as National Tourism Administration (NTA) activities, with an emphasis on deploying a coordinated approach to promoting their country’s image abroad.

As tourism has become an international multibillion-dollar industry, practitioners, businessmen and academics have become interested in assessing the factors affecting the success of tourism destination. In an effort to assist destination-marketing organization, many scholars have studied many aspects of the destination image construct, including factors that have an impact on destination image. On the other hand, many undeveloped, un-potential locations and rural

in Malaysia. In a recent development, Malaysia has become a favourite

destination for Arab travellers and tourists. Many Arab travellers avoid travelling to America and European countries, because they are viewed suspiciously and are disturbed, inconvenienced, and harassed, especially after the 11th September 2001, and they prefer Malaysia as one of the most appropriate country that has many attractive factors (Al-Shafai. 2002). From the review, it is discovered that there is very little published about Middle East and Arab countries as tourism destinations, the majority are focused on Egypt and Lebanon, the two famous locations for international tourists. The lack of literature seems incongruent with the purchasing power of Arab and Middle East people because Hall and Weiler (1992) said that changing in socio-demographic and a higher spending power have created a change in tourists’ values. According to the tourism highlights of World Tourism

51

Organisation (WTO), in 2004, most markets rebounded strongly, and the Middle East recorded the second biggest gains after Asia and

American and European destinations, a few studies have examined the behaviour of tourists hailing from Arab countries pertaining to western destinations. Moreover no study has examined the Arab tourist’s behaviour about Malaysia. Our study is exploratory in its

REVIEW

the reviews, research in travel and tourism has demonstrated that destination image is a valuable concept in investigating the destination selection process and contributed to our understanding of tourist behaviour (Baloglu and McCleary, 1999). Basic consumer behaviour theory suggests that consumers make product choice decisions based on the images or match an individual’s self-image (Schiffman and Kanuk, 2000). However, the destination image studies in tourism have been limited to those dealing with the image’s perceptual or cognitive component, where objective attributes or features of destinations were used as a basis for measuring destination images (Baloglu and Brinberg, 1997). Several researchers have studied destination image

variables, such as destination choice, decision making and satisfaction (Chen & Hsu 2000; Chen & Kerstetter 1999; Court & Lupton 1997). Baloglu and McCleary (1999) concluded that tourism destinations often compete on nothing more than the images held in the mind of

clusters of brand image attributes: physical environment, economic activity, business tourism facilities, accessibility, social facilities, strength of reputation, people characteristics and destination size and also found the strong association between all the attributes and the perceived quality.


On the other hand, Iso-Ahola (1982) suggested that it is a central basis in tourist behaviour study to identify motivational factors that are the reasons for and direction of behaviour. He suggested two basic motivational dimensions of leisure or tourism behaviour,

behaviour. For example, a tourist may want to make a trip to escape from his/her personal or interpersonal environment (e.g., ‘escape from routine everyday life’) and to seek out psychological (intrinsic) rewards in the personal or interpersonal dimensions (e.g., ‘adventure or friendship building’). Thus, these motivational factors explain why tourists make a trip and what type of experience, destination or activity they want.

From the review mentioned above, it is clear that there are a series of “push” factors and “pull” factors. This concept has been discussed in the tourist motivation literature. This concept involves the theory that people travel because they are pushed and pulled to so by “forces” (Baloglu and Uysal, 1996). In other words, the “forces” mentioned describe how individuals are pushed by factors to make decision to travel and how they are pulled by the destination. As

which are origin-related are intangible or intrinsic desires of the individual travelers such as desire or escape, rest and relaxation, health

are those that emerge as a result of the attractiveness of a destination as it is perceived by the traveler.

of the reciprocal relationship between push and pull factors of motivation for travel. They found that the reciprocal relationship existed between push and pull factors for Canadians. In another study done by Gilbert and Terrata (2001), they found that the most important attributes for Japanese tourists were scenery, heritage and history, culture and relaxation as factors that actually affected the decision to visit UK. Chen and Gursoy (2001), in their examination of the tourists’ destination loyalty and preferences, concluded that there was an indirect relationship between loyalty and safety, cultural

53

differences and convenience of transportation. Most recently, Law, Cheung and Lo (2004) examined the motivation for overseas travel using the concept of push and pull factors by Hong Kong travelers. They found that pull factors such as local foods, city landmarks, and scenic sites are the most important activity group when Hong Kong residents travel abroad.

In education sector related to international students, Mazzarol and Soutar (2002) investigated pull and push factors that motivate the decision to study overseas. They found that perception of an oversea course of study is better, and ability to gain entry to local course are the major pull and push factors for international students to study abroad.

From the literature review, tourists are not motivated by the single motivational forces. They want to experience more than one attribute in the destination. The authors concluded that since different varieties may emerge due to differences in demographics, socio-psychological variables, destination attributes, methodologies, and tourist culture, research with different samples should be conducted. So that very little is known about the push and pull factors that

study is to extend the literature on push and pull factors of motivation from a different cultural framework – which is in Malaysia and Arab travelers.

METHODOLOGY

In carrying out this research, descriptive research design is used and the data collection was mainly done through questionnaires. Under this method, primary data were collected through a survey conducted from Arab travelers who came to Malaysia. The contacted method used in the research was the personal interviewing. The rational for

the interviewee in a shorter period of time. In part, results there


can be no better way and means in which the question was posed. Once respondents have replied, there is generally little opportunity to go back to them to clarify responses, or to correct possible misinterpretation of questions.

was undertaken amongst a convenient sample of university’s students in the one university’s residential area. A group of ten Arabic speaking students from Arab Countries were used to pre-test the questionnaire

an “Arab” is a member of a group of people who live in the Middle

facilitated via the “back-translation” method suggested by Green and White (1976), whereby the English original is translated into the foreign language (in this case – Arabic language) and then back translated into English to check for questionnaire dissimilarities. Researcher pointed two language lecturers from Modern Language Department, University of Technology, Malaysia to do the translation and back-translation. Owing to the non-existence of sampling frames in Malaysia, a convenience sampling procedure was used in the data collection. Respondents were selected from travelers visiting the popular tourist sites and destinations, in order to eliminate the sampling errors and to ensure the representation of the population under study in the sample units. The total sample size was calculated by a formula suggested by Easterby et al (1991, pp. 46).

adopted. Substituting an evens occurrence in (1) gives the greatest

correction’ (1), ‘n’ can be adjusted to account for the size of the population or the population strata.

n1= n / (1+ (n/N))………………….. (1)

Where:

55

n = is the sample size from (1).

N = is the total population size

n1 = is the sample size required.

The simple population for this study was unknown. For this reason formula (1) used to determine how many responses would be required to produce a as following:

n = is the sample size required.P = 50% “the percent occurrence of the state/condition”: andE = 5% “the maximum error required.”

50(100-50)52n =

250025

n = = 100

The research survey was carried out at Kuala Lumpur International Airport (KLIA), and hotels and resorts in the Klang Valley area where Kuala Lumpur city is situated. During the interview, a self-administered questionnaire was directed to the travelers in completing the whole process of the survey. All the data gathered via questionnaires were edited, coded and categorized successfully, using

analyzed from 115 respondents during the period from 1st July up to 10th September 2004 as suggested by Easterby’s formula.

RESULTS


Based on the methodology, the respondents were questioned with a

been considering in their decision making to come to Malaysia. For the analysis of control variables (majority mostly demographic), all

The summaries of the variable are shown in Table 1.

Variables Frequency Percentage

Traveler’s gender:Male 81 70.4

Female 29.6

Traveler’s age group:15-24 17 14.8

49 42.6

26 22.6

45-above 20.0

Marital Status:Single 28

Married 87 75.7

Educational level:Up to Primary level 14 12.2

Up to secondary level

University level 62

Table 1.

57

The survey was done on 115 respondents; the majority of the

(14.80%) in 15-24 years. In term of marital status, majority of them were married 75.7% (87 tourists) 59 of them males and 28 females.

tourists), where 22 of them are males and 6 are females. In the matter

were educated up to primary level. Concerning the country of origin,

travelers from Saudi Arabia recorded the majority of 25.2% followed

Kuwait, and 5% from Qatar. Other Arab countries such as Bahrain,

Level of Income:Low 12 10.4

Medium 82

High 21

Countries of Origin:

Saudi Arabia 29 25.2

Yemen 21

Emirates 20 17.4

Oman 10 8.7

Kuwait 8 7.0

Qatar 5

Others* 22 29.1

Note: * from Bahrain, Iraq, Libya, Sudan, Syria, Egypt, Algeria, Jordan, Djibouti.


Jordan were represented by only 2 travelers each, and Djibouti had only one traveler.

Push and pull factors have generally been characterised as related to two separate decisions made at two separate points in time—one focusing on whether to go, the other on where to go. Many prior research efforts have focused primarily on visitors to international and overseas tourism destinations. Researchers are yet to examine how the relationship among these push and pull factors might differ as a function of socio-demographic variables. In this section the researcher analysed push and pull factors and which factors

and push factors and frameworks used in this study were selected from various studies such as Dann (1981); Iso-Ahola (1982); Yuan and McDonald (1990). The scale for reliabilities were determined by the non-standardised Cronbach alpha which is reported to be the preferred method (Morgan and Greigo, 1998) and it is the most widely used for reliability’s scale (Aron and Aron, 1994). The results showed reliabilities of pull factors are 0.9099 and 0.8290 for the push factors, which are exceeded by the minimum acceptance level of 0.7 (Nunnally, 1978).

take a vacation, natural and scenic beauty destination got a strong

imaging Malaysia for restful and relaxing with 4.6667, considering Malaysia as a safe place with 4.5810, travelled to Malaysia because it is a Muslim country with 4.5714, and for no convenience or trouble

There are factors, which scored means of 4 to less than 4.5 out of 5 scales (not strong positive image) such as friendly locals 4.4952, destination for adventure 4.4667, and environment friendly scored

considered those factors to be more important push factors than any

59

others. By using the chi-square statistics, it can be inferred that that there is no different between genders on all push factors. Details are provided in Table 2.

Table 2:Descriptive statistics of push factors

MeanStd.

Deviation

Malen =81

Femalen =34

F value

Natural and scenic beauty

4.87 .41754.67 4.44 1.654

Fascinating 4.72 .6577 4.74 4.76

Many interesting places 4.71 .6609 4.74 4.70 0.071

Restful and relaxing 4.67 .5991 4.67 4.70 0.050

Safe place 4.58 4.62 4.75 0.176

Muslim country 4.57 1.0271 4.67 4.44 1.247

No inconvenience and trouble

4.514.47 4.67 1.580

Friendly locals 4.49 .8562 4.49 4.65 0.145

Adventurous 4.47 .7852 4.51 4.47

Environmentally friendly 4.44

Pleasant climate 4.08 4.17 0.447

Different cultures in one

Different races in one 1.1804 0.585

Similar customs 1.0572

Similar lifestyles 1.1857 4.49 1.060


to access in Malaysia without any complex procedure scored mean (4.8667) out of 5 scales, satisfaction of Airline/Airport services 4.6952, attractive media 4.6476, availability and good information 4.6190, and communication technology facilities 4.5905. On the subject of pull factors which have means between 4 and less than 4.5 scales, respondents preferring to travel to Malaysia as a country of technology scored 4.4762, availability to use different types of credit card for expenses during the time of travel and tour got 4.4667, regarding advertising and promotion via Internet 4.4095, satisfaction

tourism online for more details 4.2857, quality of hotels services online 4.0762, low cost for domestic travel and transportation 4.0571, satisfaction of Malaysia travel agent 4.0476, and reservation online

to be more essential pull factors than others and the factors led them to choose Malaysia as tourism destination than any other countries.

MeanStd.

Deviation

Malen=81

Female F value

Easy to access 4.87 .4817 4.84

Satisfaction of Airline /Airports

4.694.67 4.77 0.525

Mass media (Attractive)

4.654.65 0.016

Information availability 4.62 .6260 4.58 4.70 0.700

Communicationtechnology facilities

4.59 .61544.57 0.202

Country of technology 4.48 .7856 4.52 0.815

61

Table 3: Descriptive statistics of pull factors

Using visa and credit card

4.47 .72144.47 4.47 0.000

Good Ad/promotion online

4.41 .72974.40 0.044

Satisfaction of accommodation

.88124.47

Useful destination web sites

4.20 0.549

Virtual tourism online 4.29 .8052 4.27 0.146

Quality of hotels online 4.08 4.12 0.658

Low travel cost 4.06

Satisfaction of Malaysia travel agent

4.05 .90284.04 4.06 0.019

Reservation online for domestic travel in Malaysia

4.044.08 0.520

Travel agents cooperation online

.9600

Inexpensive goods and services

1.0804.10 1.817

The availability of quality Restaurants

1.2510.925


By using cross tabulation in Chi-square analysis, the researchers found that only one variable; travel agents cooperation

level. Details of this information are shown in Table 2. Nabi and

appear to be vanishing.

DISCUSSIONS

From the summary of data analysis, significant findings have given some hints to the tourism destination management to make improvements on certain areas of tourism industry for research and development. This research tries to compare between the push and

decision making. The emerging markets from the Arab travelers offer a good opportunity for Malaysia to take advantage of their potential as a prime vacation for Arab travelers. This move will certainly help the Malaysian economy and become competitive compared with its neighbours such as Thailand, Indonesia and Singapore. The

should also be considered by tourism marketers when planning their marketing and promotional strategies in order to ensure the delivery of appropriate tourism products and services.

Push factors have been conceptualized as motivational factors or needs that arise due to disequilibria or tension in the motivational system that is, those factors motivating or creating a desire to travel.

traveler favour Malaysia because it has many attributes compared to other countries. They were considering Malaysia with a natural and scenic beauty destination, has fascinating destination, and there are many interesting places for rest and relaxation. Beside, it’s a Muslim country, which is a safe destination and has friendly locals.

Pull factors, in contrast to push factors, have been

63

conceptualised as related to the features, attractions or attributes of the destination itself. Some factors considered by Arab travellers to be more essential pull factors than others led them to choose Malaysia as tourism destination than any other countries. It is easy to access Malaysia without any complex procedure, very good services found at the Malaysia Airport, and good information and attractive media played major roles as pull factors, as well as their consideration of Malaysia because a country of technology which provided good and varied communication technology facilities and more destination and tourism information. Tourism marketers may use the push and pull factors to select a range of brand image attributes to represent and communicate a relevant and workable identity for their destinations in Malaysia.

In the context of Malaysia, Malaysia should concentrate their efforts in matching of push and pull items for marketing strategy.

promotional programmes and packages, and decision-making about Malaysia as the destination. Since the results indicated that the most

many interesting places for rest and relax, it is recommended that tourism marketers should ensure the provision of service especially at the entry points such as airports and a restful and relaxing environment to accompany the selected niche markets for Arab travelers. If this service meets the expectations of Arab travelers, they are likely to recommend the destination to their friends and relatives. Therefore, tourist marketers should develop better strategies on relationship marketing and promotion that address the above pull and push factors. In the case of gender, there was also similarity of mean responses to the push and pull factors. These results suggested that while variation in the factors may exist between genders, there was no variation in the overall factors because the destination offered a wide variety of products and services and surrounding atmosphere catering to the need and want of both genders.


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67Customer-Oriented Selling Behavior, Social Values And Sales Performance:An Empirical Study Of Life Insurance Agents

5CUSTOMER-ORIENTED SELLING

BEHAVIOR, SOCIAL VALUESAND SALES PERFORMANCE:

AN EMPIRICAL STUDY OFLIFE INSURANCE AGENTS

HUAM HON TATABU BAKAR ABDUL HAMID

ROHAIZAT BAHARUN NORZAIDAHWATI ZAIDIN

ABSTRACT: This study seeks to investigate the relationship between customer-oriented selling behavior and social values on the performance of a sample of 107 life insurance agents. The questionnaires developed By Saxe and Weitz (1982), called SOCO scale was used to examine customer-oriented selling behavior, while List of Values (LOV) developed by Kahle (1983) was used to examine

impact on the enhancement of performance of agents. But customer-oriented selling behavior has shown a positive relationship with the performance of agents. Discussion, conclusion and directions for future study are discussed.

Keywords: Customer-oriented, selling behavior, social values, performance, life insurance.

INTRODUCTION


The life insurance concept was conceived as early as 2,800 BC when it was being applied by the merchants to protect themselves against

in the business of providing individuals and organizations with protection against uncertainty of loss (risk) and return for a monetary

of the insurance industry in Malaysia did not take place until the 18th

century. After independence in 1957, nationalistic sentiments resulted in moves to control the establishment of wholly-owned subsidiaries

the situation by introducing the Insurance Act 1963. Today, the life insurance industry is Malaysia has experiencing a rapid progress over the past 25 years.

The current economic slowdown has affected the sales or performances of new life business of insurance companies in Malaysia. All categories of policies registered either negative or slow growth in new business premiums. The demand for life insurance, however, is still encouraging due to the continuous improvement of the standard living n Malaysia. More importantly, the government policies to promote national savings needed for development and favorable tax breaks for life policyholders. On the other aspect, a life insurance agent is no longer solely in increasing sales volume, rather, the prospect’s real needs become the basis of the marketing plan. It is widely recognized that a life insurance agent to engage in behaviors leading to long-term customer satisfaction (Kelly, 1992) and generate a more favorable behavioral outcomes.

Sales and marketing managers have always wanted to

force and its performance are critical to the success of almost every company. In response to this interest, marketing researchers have investigated many possible factors of sales performance over the years. Researchers have studied salespeople and the sales process and its interactions to provide insights on how to make the managers


sales performance and the strength of the relationships.In view of the crucial and competitive market environment

in life insurance industry and some of the issues are still lacking of empirical explanation, we contribute to this area by investigating the relationships between customer-oriented selling behavior, social values and sales performance. These relationships are examined in the Malaysian insurance industry, with particular focus on the life insurance agents. The primary concern of this study was to examine how far customer-oriented selling behavior and social values affect a life insurance agent’s performance. The outcome of this study may serve as guidelines to the Malaysian life insurance industry in terms of agents’ performance towards professionalism based on their personal values and selling behavior.

we provide a review of literature of our study, next; we describe the

with a discussion of the study. Finally, the limitations and suggestions for future study was discussed.

LITERATURE REVIEW

Preparing for challenges in the near future is a process that should be vigorously pushed. It is a strategic shift that should not be linked to the short-term ups and downs of a business cycle. The constantly changing landscape in today’s competitive market environment

or customers. It is critical to understand one’s customers thoroughly in order to make decisions on how to satisfy and retain them (Clark et al., 999). In a service business, such as in the life insurance business, customer satisfaction is a critical performance indicator along with measures of unit productivity and administrative effectives (Adsit et al., 1996).


of behavior. Behavior is individual activity, whereas the outcomes of the behavior are the ways in which the behaving individual’s environment is somehow different as a result of his or her behavior (Nickols, 1977). The appropriate way to measure performance

a salesperson performance appeared in 1918 to investigate the relationship between aptitude and performance. More than 50% of the pairwise correlation reported in the literature since then also use an aptitude measure as the predictor of performance. Through the emphasis given to aptitude seems logical, the empirical evidence on the strength of the relationship between aptitude and performance is weak (Churchill et al., 1985).

The life insurance sales force and its performance are critical to the success of almost every life insurance compant. Morris and

that those with a customer service focus has higher sales growth

factor could be the customer focus. In another study, Lim (1996) used annual insurance premiums collected in the previous year and persistency ratio obtained by insurance agents in Penang, Malaysia as the dimensions of the performance of a life insurance agent.

Customer-Oriented Selling Behavior

Customer-orientation has emerged as a cornerstone of the theory and practice of marketing management (Brady and Cronin, 2001). It is especially important for companies in the service industry (Hartline et al., 2000). As noted by Hoffman and Ingram (1992), being customer-oriented is akin to practicing the ‘marketing concept’ at the customer level for a service organisation

In this context, Saxe and Weitz (1982) developed a scale, namely the Selling Orientation-Customer Orientation (SOCO) scale to measure customer-oriented selling behavior of salespeople. It is a useful construct that has provided most novel insights into the


meaning and causes of a salesperson’s performance and has served as the basis for mush research. It can be viewed as the practice of the marketing concept at the level of the individual salesperson and customer. It is “the degree to which salespeople practice the marketing concept by trying to help their customers make purchase decisions that will satisfy customer needs” (Saxe & Weitz, 1982, p. 344).

They found that the practice of customer-oriented selling results in better sales performance when the customer-salesperson relationship is long term and cooperative and when the salesperson is able to help customers satisfy their needs. In 1985, Michaels and Days conducted an empirical study with buyers assessing the customer-orientation of salespeople. Their results are almost identical to those obtained when salespeople assessed their own degree of customer orientation, except that a buyer’s mean ratings are substantially lower than a salesperson’s mean ratings.

Social Values

On the other hand, Apasu and Buatsu (1983) have observed that a salesperson’s personal value system can serve as a framework for choosing among alternative models of behavior and end state. The concept of value is usually referred to a relatively small number of highly abstract social cognitions held in common by the numbers of a society that represent preferences for a certain kind of action or state of affairs (Kahle, 1984).

In 1983, Kahle developed the List of Values (LOV) as a simple operationalization of American values. The rationale for the LOV is social adaptation theory in which values help people adapt to life circumstances by directing their energies toward achieving desirable goals (Kahle, 1983, pp. 1-7). The value differences measured by the LOV are associated with differences in life-styles, consumption activities and product preferences (Kahle et al., 1986).

According to Apasu and Buatsu (1983), social values have been regarded as a potential “major construct” in explaining salesperson performance. Values are central to people’s lives, and


and behavior (Kamakura and Novak, 1992). Apasu (1987, p.1) noted that “the use of personal values to explain preferences for rewards may provide better understandings of salespersons’ behavior across time and situations.’

METHODOLOGY

Sample

The population of this study consisted of all the life insurance agents in Perak. The respondents were chosen from various selling experience background that were from those were less than one year as licensed agents to those having more than 3 years of selling experience. Using a convenience sample, a questionnaire was administered to 107 life insurance agents in Perak, Malaysia.

The sample comprised of 71 (66.4%) male agents and 36

Table 1. By age, the agents were grouped into less than 26 years old (N = 23; 21.5%), 26 to 40 years old (N = 40, 37.4%) and more than 40 years old (N = 40; 37.4%). The Chinese agents (N = 73; 68.2%) constituted an overwhelming majority of the sample.

In terms of educational level, most were at the secondary school level (N = 80, 74.8%). As for the years as licensed agent, those with more than 3 years made up more than 50% of the total agents. As well, slightly more than half of the sample (N = 58; 54.2%) were full-time agents. Interestingly, a sizable proportion of the respondents were married (N = 79; 73.8), single (N = 24; 22.4%) and others (N = 4; 3.8%).


Table1

N %

Gender

Male

female

71

36

66.4

3.6

Age

< 26 years old

26 – 40 years old

> 40 years old

23

44

40

21.5

41.1

37.4

Race

Malay

Chinese

Indian

Others

18

73

13

3

16.8

68.2

12.2

2.8

Education Level

Primary school

Secondary school

Diploma/Degree/Professional

3

80

24

2.8

74.8

22.4

Year(s) as Licensed Agent

< 1 year

1 – 3 years

> 3 years

14

36

57

13.1

33.6

53.3

Agent Status

Part-time

Full-time

49

58

45.8

54.2

Marital status

Single

Married

Others

24

79

4

22.4

73.8

3.8


MEASURES

Following Saxe and Weitz’s (1982) study, this paper used the 24 items Selling Orientation-Customer-Orientation (SOCO) scale to represent the dimensions of customer-oriented selling behavior. The respondents were asked to indicate their ratings to the statements on a 5-point rating from “True for None of My Customers” (1) to “True for All of My Customers.” The scale was found to be highly reliable,

The measures of social values were adapted from Kahle’s (1983) 9-item List of Values (LOV) scale. The nine values are self-respect, a sense of accomplishment, being well-respected, security, warm relationships with others, sense of belonging, fun and enjoyment

to indicate their ratings to the statements on a 5-point scale (1 = “Not

value (0.799) showed that this instrument is reliable as well. In this study, some of the wording of the items for both

measures were modified slightly to match the domain of life insurance agents in the local context. The life insurance agent’s sales performance was measured by his or her approved Annual First Year Premium (AFYP) in Ringgit Malaysia (RM).

MAJOR FINDINGS

As depicted is Table 2 the composite variable, customer-oriented selling behavior had a mean value of 4.25, which indicates that the agents practice a high degree of marketing concept in trying to help their customers make life insurance purchase decision that will satisfy customer needs. On the other hand, the mean value of 4.01 for social values also suggests that the agents had a high degree of importance on the listed perceived social values. The standard deviation for the two variables showed less than 1, suggest that there was less variation among life insurance agents’ perception to each variable.


The Pearson correlation analysis was also conducted to investigate all the bi-variate relationships among the variables in

correlations existed between customer-oriented selling behavior and

with sales performance.

Table2: Descriptive Analysis

Variable Mean S.D.

Customer-oriented selling behavior 4.23 0.54

Social values 4.01 0.69

Table 3

Variable AFYP

Customer-oriented selling behavior 0.49***

Social values .-0.07

***p < .001

Further, multiple regression analysis was used to explore the determinants of agents’ sale performance. A composite score based on the 24-item SOCO and 9-item LOV scales were computed and used for the regression model. As shown in Table 4, the overall regression

of the variance in performance was accounted for. Customer-oriented selling behavior ( = 0.559, p < 0.001) and social values ( = -0.179,

oriented selling behavior exhibited positive relationship and vice


versa for social values. As compared to agents who seldom practiced customer-oriented selling behavior, those who frequently practiced customer-oriented selling behavior seemed to achieve better AFYP

Independent Variable b

Customer-oriented selling b2ehavior

40074.753 0.559***

Social values -9938.885 -0.179*

(Constant) -93380.8

F 22.817***

R2 0.305

Adjusted R2 0.292

DISCUSSION & CONCLUSION

This study has revealed that the life insurance agents in Perak, Malaysia who portrayed a high level of customer-oriented selling behavior tend to be a better performer than those who portrayed lower

of Saxe and Weitz (1982) and Lim’s (1996) study, suggesting that agents who perform high degree of marketing concept by helping his or her customers or prospects to make purchase decisions that will satisfy customers’ needs tend to enhance their sales volume. In light of the highly competitive environment in the life insurance industry, it is not surprising that a highly practiced customer-oriented selling behavior agent was a better performer than the lower one.

On the contrary, an agent’s social values have shown a

*p < .05; **p < .01; ***p < .001

Table 4: Regression Results between Customer-OrientedSelling Behavior, Social Values and AFYP


The LOV developed by Kahle (1983) is unable to afford novel insights into the meaning and explanation of the enhancement of performance of life insurance agents. This clearly reveals that in life insurance business, an agent who perceived a high level of importance in his or

indirectly supports the literature (e.g., Greenberg & Baron, 1997) that

selling behavior as an important factor that positively affects sales performance among life insurance agents in Perak, Malaysia. This

customer service and support training and development programs for their agents that will enable them to move toward customer orientation. Through these programs, a long-term relationship between the agents and their prospect or customer may be built – which will lead their customers to think of them when thinking of insurance of any kinds.

On the other hand, the social values of life insurance agents

do provide the explanation into the meaning of the enhancement of sales performance if the life insurance agents do not have a high degree of customer-oriented selling behavior.

LIMITATIONS & SUGGESTIONS FOR FUTURE STUDY

limitations. The present study assumes only customer-oriented selling behavior and social values that have impact on the sales performance. There are many factors, such as training and development, job image, ethical behavior, etc; which are not taken into considerations in the present study, that may affect the relationship. In addition, the targeted population was limited only to life insurance in Perak, Malaysia.


Hence, it is not able to represent a complete generalization on the purpose of this study.

Some suggestions for future study that can help to increase

SOCO scale with life insurance customers as respondents to assess the customer orientation of the salespeople in the Malaysian context. Besides, future study is recommended by increasing the sample size

base to assess the relationship in this study.

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Brady, M. K., & Cronin, J. Jr. (2001). Customer orientation:Effects on customer service perceptions and outcome behaviors. Journal of Service Research, 3, 241-251.

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81Customer Satisfaction And Loyalty At Retail Outlet OfMajor Oil And Gas Company In Southern Malaysia

6CUSTOMER SATISFACTION

AND LOYALTY AT RETAIL OUTLETOF MAJOR OIL AND GAS COMPANY

IN SOUTHERN MALAYSIA

NOR ZAFIR MD SALLEH ABU BAKAR ABDUL HAMID

SITI ZALEHA OMAIN CHONG SHIH WEI

Abstract : The importance of customer satisfaction (CS) to the commercial success of business is widely acknowledged. CS is increasingly recognized as a key factor to be successful in the market place. The retail operator’s success rate depends on the number of customers it retained. Key success factors include the customer retention which can be determined on a CS level. This chapter attempts to identify the level of CS and loyalty at Mesra Store (Petronas); to identify the key factors contributing to CS at each stores,

store personnel are kind, helpful and friendly; the store’s ambience is cheerful and lively; store personnel are courteous with customer; store personnel are well dressed; and the store provides speed and

mostly contribute to CS at the second store were that store personnel are never too busy to respond to customer requests; store personnel always greet and smile at customers; the store provides speedy and


products; the store is never lacking in stocks; and the store is clean

of CS exists between both stores towards 8 out of 27 key factors that are used to measure CS.

Keywords: customer satisfaction, customer loyalty, convenience store, survey, store personnel

INTRODUCTION

Today’s consumers are fussier than ever and demand perfection. Achieving customer satisfaction is a primary goal of business

According to Dunne et al. (2002), a convenience store must be able to differentiate itself from the competition to become a high performer. The easiest way for the stores to differentiate themselves is to satisfy the customer needs and wants. Customer satisfaction is determined by whether the total shopping experience has met or exceeded the customers’ expectations.

their customer satisfaction to achieve customer loyalty. Customer

short-term and long-term costs associated with poor customer services (Kathryn et al., 1994). Losing a customer not only represents decrease of the long-term sales of that customer, but company also needs to spend additional costs to replace that customers or attract new customers. Knowledge of the consumer’s factors that are used to evaluate stores and an understanding of why these factors are important can help

al., 1998). The ultimate goal of customer satisfaction measurement is to improve product and service quality to serve customer better,


However, studies have shown that for most customers, shopping experiences that haven’t always met their expectations will result in an unsatisfying experience.

The research is aimed to study the customers’ satisfaction and loyalty at Mesra (Petronas) Taman Universiti and KM 11 Jalan Skudai in order to gain more knowledge about how to satisfy and retain more customers. This study also aims to discover the factors

satisfaction exist between the two stores. The stores with the high customer satisfaction can be acted as guideline for another store to improve potential weaknesses and to fortify their strengths.

CUSTOMER SATISFACTION AND LOYALTY

a process of evaluating what was received against that expected,

Generally, customer satisfaction has been described as occurring when customers react emotionally to a product or services that perceived to have met his or her desires and expectation; and in a response of

customer expectations. A customer whose experience falls below

Kanuk, 2004). Customer satisfaction will affect the customers toward patronizing the stores, so satisfaction is crucial in assessing retailer performance and mapping retail strategy.

Customer loyalty is a situation where repeat purchase behavior is accompanied by a psychological bond; relationship between relative attitudes towards an entity and repeat patronage behavior (Dick and


Basu, 1994). Generally, customer loyalty has been described as occurring when customers purchase a good or service repeated; and hold favorable attitudes towards goods or service, or towards the company supplying the good or service. Measuring total customer satisfaction is one of the safest ways to obtain this information. According to Richard (1994), the satisfaction responses typically fall in the upper end of the scale- a 4 or 5 on a scale of 1 to 5. Rather than thinking of customers as loyal or disloyal, managers would be better off treating them as three separate groups which is ‘Very Loyal’ (with combination of 5 scale of overall customer satisfaction

of satisfaction).

FACTORS THAT INFLUENCE CUSTOMER SATISFACTION IN CONVENIENCE STORES

customers look for when evaluating any product or service; which included quality, service, speed, price, reliability, convenience, availability, choice, security, support, expertise and the personal

merchandise price, personal selling, and store reputation normally

customers’ satisfaction in the sample of supermarket which are customer service, quality and value.

that are important in customer satisfaction measurement from Berry (1991), which are personal attention, tangibles, reliability and


satisfy customers, which provides more focus on customer service. There are: understanding customers; good working environment; knowledgeable stuff; convenience; the personal touch; face-to-face customer service; telephone customer service; suitable promotional material; customer service and technology; following up on a sale; internal customer service and maintaining a personal commitment to customer service. One the enduring study by Lindquist (1974)

merchandise, service, clientele, physical facilities, convenience, promotion, store atmosphere, institutional factors, and post-transaction satisfaction.

RESEARCH METHODOLOGY

An empirical study was conducted among customers of Mesra (Petronas) convenience store at Taman Universiti and KM 11 Jalan Skudai. A person-administed survey was carried out by the researchers. A structured questionnaire was used to collect the data. Only those who visited or bought items at Mesra were chosen as respondents. The questionnaire consists of 4 sections: respondent socio demographic, customer satisfaction and loyalty determination, key factors that contribute to customer satisfaction at Mesra and lastly the recommendations. There are 28 statements included in the customer satisfaction and loyalty determination part. The number of elements included in the empirical research need to be limited because of the interviewing time and respondent fatigue constraints of in-store interviews (Mitchell and Kiral, 1998). All statements employed a

of observations. The research emphasized on the customer satisfaction and

loyalty toward patronizing convenience stores. The research was


convenience, and customer service to study customer satisfaction and loyalty. However, this research focused more on customer satisfaction rather than customer loyalty. The questionnaires had been administered at the two stores. The two stores were chosen

of customer satisfaction existing between the two stores. The stores with high customer satisfaction acted as guidelines for another store to improve potential weaknesses and to fortify their strengths. A total

and answer the questionnaire.

cooperate and answer the questionnaire. The data of the study was analyzed by using Statistical Package for Social Sciences (SPSS). Multi steps were taken to analyze the data. A mean and standard deviation was used to study the customer satisfaction and loyalty. Then, multiple regression was used to identify the key factors that contribute to customer satisfaction at Mesra. 27 variables from the Section B in questionnaire were used as independent variables, and the overall customer satisfaction was used as dependent variable for regression purposes. Lastly, the Mann-Whitney rank sum test was

satisfaction existed between Mesra (Petronas) Taman Universiti and

discussion, we refer to Taman Universiti store as A and Jalan Skudai store as B.

FINDINGS

Majority respondents at Store A are Malay male, aged between 20 to 29 years old, work in the private sector, whose education level is secondary school, and have an income per month with RM1000 and


below. While the Store B comprise respondents who in the majority are Malay male, aged between 20 to 29 years old, work in the private sector, education levels are secondary school and diploma level, and have an income per month of RM1000 and below and RM1001-

at Store A, based on 5 factors; store atmosphere, product range, pricing,

factors, store atmosphere was the key factor with highest mean score,

key factors, which are store atmosphere, product range, convenience

with pricing.

the score were not dispersed. Store atmosphere was the key factor with

range, convenience, and customer services. However, customers were

Majority of the respondents at Store A were not a Mesra Card holder; had patronized the store between 1 to 2 years; frequently visited Mesra twice per week; often purchased snacks and beverages; spent between RM5.10 and RM10 each time visited Mesra; and they are willing to recommend Mesra to others. However, the level of customer loyalty at Store A can be categorized as ‘easily switched to a competitor’. Most of the respondents at Store B were not Mesra Card holders; had patronized the store less than 1 year; frequently visited Mesra once a week; often purchased beverage and snack;


spent between RM5.10 and RM10 each time they visited Mesra; and they are willing to recommend Mesra to others. The level of customer loyalty at Store B can be categorized as ‘easily switched to a competitor’.

Based on Table I, 5 variables met the entry requirement to be included in the equation are ‘Store personnel are kind, helpful and friendly’, ‘The store’s ambience is cheerful and lively’, ‘Store personnel are courteous with customers’ ‘Store personnel are

transactions’. The multiple R shows a substantial correlation between

The R-square value indicates that these 5 key factors explained 48% of the variance in the overall customer satisfaction. Table I shows that 5 key factors that mostly contribute to the customer satisfaction at Store A are ‘Store personnel are kind, helpful and friendly’ ( =

( =0.188), ‘Store personnel are courteous with customer’ ( = 0.177), ‘Store personnel are well dressed’ (

=0.124). These 5 key factors

be included in the equation are ‘Store personnel are never too busy to respond to customer requests’, ‘Store personnel always greet and

transactions’, ‘The store carries a wide selection of products’, ‘The store is never lacking in stocks’, and ‘The store is clean and tidy’. The

that mostly contribute to the customer satisfaction at Store A are ‘Store personnel are never too busy to respond to customer requests’ (at customer’ (


sales transactions’ (products’ ( =0.159), ‘The store is never lacking in stocks’ ( = 0.155), and ‘The store is clean and tidy’ ( =0.150).

store atmosphere, convenience, and customer services. Table III shows

existing between both stores toward 8 out of 27 key factors that used to measure the customer satisfaction, which are showed by the p value > 0.05. This means that the levels of satisfaction towards

store’s respondents were higher than those of Store A store. In other words, Store B store’s respondents felt that the store performed better in these eight key factors than Store A store. In terms of the store

reach the store, the store provides plenty of convenient parking, the

operated more than 12 hours everyday. In terms of customer service

too busy to respond to customer requests, store personnel are well dressed, and store personnel always greet and smile at customers.

DISCUSSION

store atmosphere, which showed the highest mean score. Through the

(Petronas) provided a clean, attractive and cheerful ambience, and


most of the respondents felt lively and comfort when they walked

(1998), who stated that the more favorable the store atmosphere, the higher the attachment of customers to the stores. Besides that,

This provides little evidence about the pricing at convenience stores which were higher than other retail stores and this was supported by Omar (1999), and Hasty and Reardon (1997) who stated that the convenience stores always charged higher prices for their products and services rather than supermarket or other stores.

(Petronas), but result of this study shows that levels of customer loyalty at both stores can be categorized as ‘easily switched to a competitor’. Customers are reasonable, but they want to be completely

easily. Some elements of their experience with the company were not

not mean they will be loyal to the store. From the multiple regressions, there were 5 keys factors that

mostly contribute to customer satisfaction at Store A. Key factors that mostly contribute to customer satisfaction at this store is ‘Store personnel are kind, helpful and friendly’, followed by ‘The store’s ambience is cheerful and lively’, ‘Store personnel are courteous with customer’, ‘Store personnel are well-dressed’, and ‘The store

kind, friendly, helpful, well-dressed and courteous store personnel; cheerful and lively store’s layout, and speed and convenient store’ transactions were the success and unique key factors of Store A to satisfy its customers. The output of the study indicates that customer service, store atmosphere, and convenience were the main factors that contribute to customer satisfaction at Store A.


to customer satisfaction. The multiple regression revealed the ‘Store personnel are never too busy to respond to customer requests’ as the key factor that mostly contribute to customer satisfaction at Store B, followed by ‘Store personnel always greet and smile at customers’,

carries a wide selection of products’, ‘The store is never lacking in

key factors were the success and unique competitive advantage for Store B to satisfy its customers. The result of the research shows that customer service, store atmosphere, convenience, and product range were the major factors that contributed to customer satisfaction at Store B. Product range become the key factor that contribute to customer satisfaction at Store B, is due to the available of ‘Coffee n’ Break’, which offered breakfast meals, hot drinks and cakes.

played a vital role in determination of customer satisfaction at both stores. The store’s layout design, product range, and price charge at all Mesra (Petronas) convenience store were mostly similar, what makes the store unique and different was customer service from the store personnel, and this is supported by the study of King and Ring (1980), which also provided insight about the importance of customer service as a criterion for customer satisfaction.

difference of customer satisfaction between both stores towards 8 out of 27 key factors that used to measure the customer satisfaction. These 8 key factors were ‘Store layout makes it easy for customers

the store’ (Convenience), ‘The store provides plenty of convenient

transactions’ (Convenience), ‘The store operated more than 12 hours everyday’ (Convenience), ‘Store personnel are never too busy to respond customer request’ (Customer Service), ‘Store personnel are well dressed’ (Customer Service), and ‘Store personnel always greet and smile at customers’ (Customer Service). This indicated that the


customer satisfaction toward ‘Store layout makes it easy for customers

had a difference store layout. Store B has ‘Coffee n’ Break’ facility but Store A store do not have. So, the space of the Store B layout was quite narrow compared to Store A’s store. In term of ‘Convenience’

both stores towards 4 key factors (Table III).

customer satisfaction toward these 4 key factors were that both stores were located at different locations; Store A’s store was located in a housing area, but the location of Store B is at a highway and near the hypermarket. Other reason was due to the difference type of customers between both stores; majority of the Store A’s customers were local residents, whereas most of the Store B’s customers come from difference location that’s were on the way going to work or

both stores. Note that the mean rank for Store B customers was higher

(Table III).

respondents. The explanation for this phenomenon is because the store personnel at Store B were trained, and more disciplined. The other reason is because of the effective and systematic hierarchy management at Store B.

CONCLUSION

Customer satisfaction information can be a critical barometer of how well a company is serving its customer. This information shows a company what it needs to do to increase its customer satisfaction level


customer is probably happy with the basic product or service but would like to be offered a consistent set of support service (Reichheld,

The study has also showed that, overall, customers of both

are categorized as “easily switched to other competitors.” They would simply shop at other places if the competitors offer more value pricing and excellent customer service. Thus the retailer should tackle them by switching them to be loyal customers. This can be done by improving the pricing strategies which was reported as the

to customer satisfaction at Store A and Store B respectively. In terms of 27 key factors used to measure customer satisfaction, only 8 key

between both stores. In addition, the customer perspective obtained from satisfaction and loyalty surveys help the organisation to prioritise those activities which will deliver the greatest competitive advantage in terms of customer satisfaction, ensuring the company makes best use of scarce resources (Drake et al., 1998).

RECOMMENDATIONS AND FURTHER RESEARCH

some aspect of the product or service. If they have the opportunity, they will defect, that means they can easily switch to a competitor.


So, it is recommended that both stores maintain and enhance the performances of these 4 factors to completely satisfy the customers. Thus, the stores need to push the level of customer loyalty from the ‘easily switched category to a competitor’ to ‘very loyal’ category. One of the programs that could increase customer loyalty includes the sweepstake program for its customers every month. For example, customers who spent RM20 above in the Mesra convenience store can involve in the sweepstake to obtain the free gift or special offers.

On the other hand, overall both store’s respondents were

key factors. It is recommended that, Mesra (Petronas) should offer discount price and sales promotion toward its certain merchandise during the festival or special occasion because low prices on promotional items tend to attract potential buyers into a store. The store should also take into consideration the pricing policies of competitors and adopt a strategy intended to better position itself for

also must be made. It is recommended that the stores should set high performance standards for the store personnel, and appraising and rewarding them accordingly to enhance the customer services. Mesra (Petronas) should also stress the need for customer service training programs to align service quality with customer expectations.

Otherwise, it’s suggesting that success factor of Store A become benchmark for Store B and vice versa. Note that, product range factor became the only success factor at Store B, but not at Store A because the availability of ‘Coffee n’ Break’ section. So, we suggest that Store A could apply the same concept to enhance the customer satisfaction towards product range factor.

satisfaction have been found between both store’s respondents under

B were higher than Store A towards these key factors except ‘Store

towards these 8 key factors than respondents at Store A. So, these 8


key factors should be adopted as a guideline and references by Store A to increase the level of customer satisfaction towards convenience store.

There are many aspects neglected in this research due to the time and cost constraint. Thus, suggestions for future research are: study the relationship between demographic factor and level of customer satisfaction towards Mesra (Petronas). Knowing different level of customer satisfaction based on different demographic variables can help the business to identify segments that have potential of growth; future research to be conducted in other geographical area within Malaysia such as Kuala Lumpur, Penang and Ipoh to provide more precise pictures toward the level of customer satisfaction; study the awareness of Mesra (Petronas) promotion strategies among the customers, and future research to be conducted between Mesra (Petronas) and other petrol stations’ convenience stores in terms of

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APPENDIX

Table I: Key Factors That Contribute ToCustomer Satisfaction At Store A

Key Factors B

Store personnel are kind, helpful and friendly

0.280 0.000

The store’s ambience is cheerful and lively

0.188

Store personnel are courteous with customer

0.151 0.177 0.027

Store personnel are well dressed

sales transactions 0.114 0.124 0.050


Table II : Key Factors That Contribute ToCustomer Satisfaction At Store B

Key Factors B

Store personnel are never too busy to respond customer request

0.184 0.002

Store personnel always greet andsmile to customer

0.122 0.177 0.022

The store provides speed and 0.021

The store carries a wide selectionof products

0.159 0.020

The store is never lack of stocks 0.114 0.155 0.018

The store is clean and tidy 0.155 0.150 0.021

Key Factors Mann-Whitney U

Mean Rank Asymp. Sig. (2-tailed)

Store Atmosphere Store layout makes it easy for customers

151.89 (Store A) 175.25 (Store B)

ConvenienceConvenience to reachthe store

The store provides plentyof convenient parking

The store provides

sales transactions

The store operated more than 12 hours everyday

11285.5 11285.5

154.04 (Store A)

175.84 (Store B)

149.24 (Store A)

0.028

0.010


Table III Customer Satisfaction between Both Stores

Customer Services Store personnel are never too busy to respond customer request

Store personnel arewell dressed

Store personnel always greet and smile to customer

11229.5

174.17 (Store B)

150.97 (Store A)

145.80 (Store A) 181.42 (Store B)

0.000

Notes: T.U –Store A; J.S – Store B

101Private Health Care Service an Application of SERVQUAL Model:Views of Malay Ethnic Groups

7PRIVATE HEALTH CARE SERVICE AN APPLICATION OF SERVQUAL MODEL:

VIEWS OF MALAY ETHNIC GROUPS

NORZAIDAHWATI ZAIDINERNEST CYRIL DE RUN

MUHAMMAD MOHSIN BUTTTIONG YEA CHING

Abstract : Malaysia is a multiethnic society creating a mosaic of religion and racial groups. The dominant ethnic group is the Malays. It is important for private medical practitioners to understand what Malay customers expect and perceive regarding the quality of health service. This study determines and measures these perceptions using SERVQUAL model. The data collected was factor analyzed on expectations and perceptions dimensions. The results showed three factors that contribute towards service quality expectation and perceptions dimensions. Tangibility & Reliability and empathy were represented in both factor analyses of perception and expectation dimensions. However, assurance was the third factor on expectation dimension.

Keywords: Malay, Private medical practitioners, Private health care, SERVQUAL, Malay

INTRODUCTION

Malaysia has a population of about 24 million and by the year


2020, the population will grow to 32 million. There will be a larger workforce and an ever-increasing urban population, putting more pressure on the existing health care system (Elaine, 2003). At the moment, Malaysia spends only about 3% of its GDP on health services, which is much lower as compared to other developing countries in the region. Yet there is hope, as there is a projected increase in government expenditure in the 9th Malaysia Plan. In

to RM 10.7 billion for the health sector in the 9th Plan which is an increase of 12.7 % (Anonymous, 2007).

Yet, even with these increases, there are still doubts. Daily, there are various newspaper reports on negligence (Chiang, 1991; Singh & John, 2003) lack of doctors (Rashidah, 1993), doctors’ shoddy services, false doctors (Hamid, 1994), as well as turning away patients

person whose primary work is to prevent disease, relief suffering and to treat the sick persons. Besides that, a doctor plays a crucial role in public medical education, medical research, planning and implementation of local and national health programs (Anonymous, 2002). There are more then six thousand private medical practitioners currently working in Malaysia, therefore its of pivotal importance for them to understand how the majority ethnic group perceive their medical service quality (Anonymous, 2002).

Consumers essentially perceive the functional quality of a service as the manner in which the service is delivered (Donabedian,

Rosenthal, 2003). Malays being the largest ethnic group in Malaysia, their views are essential to deliver expected service quality for the medical practitioner. There has been a host of models developed to

basis for existing study. SERVQUAL assumes that service quality, is critically the difference between consumers’ expectations of a service and their perceptions of the service being actually delivered (Abraham, 1999).


This study sets out to determine the current perception and expectation of the dominant ethnic group in Malaysia towards private medial practitioners utilizing SERVQUAL model. The study also sets out to determine how Malays viewed private medical service quality.

views of an important segment for medical practitioners. The main

and perception of service quality by Malay consumers on medical

discussion of the relevant literature is presented; then the methodology

and conclusions of the study where limitations and areas for future research are discussed.

LITERATURE REVIEW

Malaysia is a multiracial and multicultural society, with Malays, Chinese, Indians and numerous indigenous communities living side by side (Anonymous, 2006a). The Malaysian population in 2006

largest ethnic community (12,290,472.4 people), followed by Chinese

The Malays are Muslims by religion. A Malay in Malaysia is

among Malays (Anonymous, 2006b). Their native language is Bahasa Melayu and in practical terms is also the national language of the

Malays form the largest ethnic group in Malaysia (Nararuddin, 2001;

family unit and contacts with other ethnic groups such as Chinese


dominant ethnic group, the Malays are acutely aware of only their dominant culture (stored in dominant cultural models) that may be activated and acted on (Brumbaugh, 2002) . This may explain why Malays in Malaysia still believe in “Bomoh”, a traditional Malay

The Healthcare Sector

Health service organizations in Malaysia are still in their developing stages. There were 117 public hospitals and 224 private hospitals currently operating (Elaine, 2003). Malaysia spends only about 3% of its GDP on health services, considerably lower than other

from 2002’s budget allocation. Of this amount, RM1.79 billion will be for developing the healthcare sector, mainly for the construction of

and management of existing public healthcare services in rural areas

Private medical practitioners, either in individual capacity or group of doctors providing medical services in a private walk-in medical centre, all needed to be registered with health ministry in order to provide private medical services (Anonymous, 2002). While the Government allocated funds to improve the health infrastructure by building new hospitals and clinics, the private sector has played an enormous role in the growth of the health sector. The private doctor tends to focus on illness management and supply of services to urban citizens while the public sector emphasizes on the provision of preventive services and basic health to the poor in rural and urban areas. As the private sector assumes a more active role, a lack of healthcare personnel in the country is apparent. The growth of the private sector has stimulated the movement of healthcare personnel from the public sector to better paid jobs in the private sector (Elaine, 2003). In 2000 the doctor-population ratio was estimated around

Liu. 1994).


Customers’ Perceived Service

Previous studies have compared the services and quality of private and public doctors in rural China (Meng et al., 2000), Kenya (Abuya

of the quality of care, their willingness to provide preventive care, and the likelihood of providing over-treatment . The development of private practice was already a fact; debates related to whether government should ban privatization and limit the scale of private practice have never stopped. Arguments in favor of private practices were that the development of the private health sector could improve

by introducing competition into the health care market (Meng. et al.,

private clinics is inferior to that of public clinics (Gary. & Albert., 2006).

Service Quality and SERVQUAL

The quality of service is an indispensable factor for any service provider to attract and retain its customers (Crosby, 1979). Primarily definition of service quality was borrowed from the literature developed to address quality in a manufacturing sector. Crosby (1979)

quality by counting the incidence of “internal” failures and “external” failures. The quality of goods, which can be measured objectively by such indicators as durability and number of defects, service quality is

overall assessment of the utility of a product based on perception of what is received and what is given”. Some suggest perceived value is a peripheral component of a service (Kandampully & Mengue, 2000). Other researchers (B. R. Lewis, 1991) have argued that perceived value actually constitutes one of the integral components of the service


being offered. Zeithaml (1993) suggested that tangibles associated with the service lead to customers’ inferences about what the service should be like, and will be like, helping building customer expectation. Bebko (2000) suggested that there is a need for a better understanding of the effects of intangibility on consumers’ expectation of service quality. Researchers from previous study have tried to investigate perceptions. An examination of banking service quality suggested that the “intangible” dimension in a banking service, location, privacy, and physical safety are considered to be important by the respondents (Yourseff et al., 1996).

SERVQUAL is an instrument for measuring service quality. It begins with the assumption that service quality is critically determined by the difference between customers’ expectations of a service and their perceptions of the service actually delivered (Clonin & Taylor, 1992; Zeithaml et al., 1993). SERVQUAL begins with assuming that service quality is critically determined by the difference between customers general expectations of a service and their perceptions of the service being actually delivered (Curry & Sinclair, 2002). Previous researches on service quality and customer satisfaction found that SERVQUAL is effective in measuring service quality (Clonin & Taylor, 1992; Zeithaml et al., 1993).

The literature on customer satisfaction in a service context is mostly dominated by the SERVQUAL model. It suggested that the service quality is fundamentally a gap between the expectation in customer mind regarding a general class of a service provider and

class (Cronin & Taylor, 1992; Parasuraman et al., 1991b). Initially

However others are skeptical for a straight forward adaptation of SERVQUAL model (Carman, 1990).

The fundamental criticism of SERVQUAL is its adaptation of

attitude (Cronin & Taylor, 1992). The critiques of SERVQUAL model


argue that performance based measure is more appropriate dimension for measuring service quality because its a consumer attitude in its nature (Sureshchandar et al., 2001).

Nevertheless the intangible nature of service might have forced many researchers to conclude that service performance served as key antecedent to customer satisfaction (Patterson et al., 1997; Sharma & Ojha, 2004). However in service sector literatures major emphasize is placed on service quality. Service quality is considered as a multidimensional construct, compose of tenability, reliability, responsiveness, assurance and empathy (Parasuraman et al., 1991b). However one can argue that these dimensions can be grouped in to two, one relating to the delivery of core service and other as augmented services which help in smooth delivery of core service and help failure recovery (McDougall & Levesque, 1994). The SERVQUAL model helps service providers to identify their strengths and weaknesses,

service dimensions including reliability, responsiveness, empathy,

Previous research exploring the determinants of customer satisfaction with hospital resulted in five dimension model of “communication”, “cost”, “facility”, “competence” and “demeanor”

“performance”, “aesthetics”, “convenience”, “economy” and “reliability” as SERVQUAL dimensions (Raduan et al., 2004) .

focus on meeting customers’ needs and requirements and how well the service delivered meets their expectations (R. Lewis & Booms,

attitude relating to the overall excellence or superiority of the service”

model as the gap between expectations and perception of service performance levels (Potter et al., 1994).


The model conceptualizes service quality as a gap between customer’s expectations (E) and the perception of the service providers’ performance (P). According to the model, service quality should be measured by subtracting customer’s perception scores from customer expectation scores (Q=P-E). The greater the positive score represents the greater the positive amount of service quality or vice

The understanding of service user encounter from consumer’s perspective is highly relevant in healthcare context. Healthcare providers can establish more of a partnership rather than a paternalistic approach to their patients if the differences in expectations and perceptions are made clearer (Crosby, 1979). Consumers may provide the highest or lowest perceptions scores in the service quality of private doctors depending on the different levels of the expectations scores.

METHODOLOGY

The population of this study consists of Malays in Malaysia. The Malay population in Malaysia in July 2006 was 12,290,472 people

respondents and convenience sampling was used. A questionnaire was prepared based on (Parasuraman et al., 1991a) scale also including a section on demographics. The questionnaire measured the level

quality (SERVQUAL); Reliability, Responsiveness, Assurance, Empathy, and Tangibles from the perspective of their expectation and perception. A seven-point Likert Scale, from 1 (Strongly Disagree) to 7 (Strongly Agree) was used. The questionnaires were distributed to the customers that had visited private doctors or private hospitals in Malaysia during the last three month to the date of data collection. Data collected was analyzed using the Statistical Package of Social

means, and Factor Analysis.


FINDINGS

Reliability analysis was conducted in order to determine the level of trustworthiness of data obtained from the questionnaires and depicted in Table 1. Table 2 shows the means by each variable and combination as well as the Gap.

Table 1: Reliability of SERVQUAL Attributes

Dimension Number of Items Expectation Perception

Tangibles 3

Reliability 4 0.494

Responsiveness 4

Assurance 3 0.364

Empathy 3

Combined scale 17

Variable Perception Expectation Gap

Mean S D Mean S D

Overall 1.01 -0.30

Tangible 1.09 1.09

Have up to date facilities

1.29 -0.21

Its physical environment is appealing

1.16 1.22 -0.22

Have modern lookingequipment

4.99 1.21 1.17 -0.41

Reliability 1.07 -0.39


Provides its service at the time it promises to do so

1.23 -0.39

When it promises to do something by a certain time, it does so

1.22 1.23 -0.20

Performs the service right 1.24 -0.32

Consistent in its performance

1.22 -0.64

Responsiveness 1.10 -0.41

The personnel give me prompt service

4.92 1.24 1.31 -0.36

The personnel are never too busy to respond to my request

4.96 1.32 -0.22

The personnel are always willing to provide service

4.73 1.39

The personnel are always ready to provide service

1.31 -0.17

Assurance 1.14 -0.11

I feel safe in my visits there

1.22 1.26 -0.22


Haveknowledgeableemployees to answer my questions

1.20

The actions of its personnel instill

me

4.99 1.22 1.29 -0.16

Empathy 1.11 -0.24

Have my best interest at heart

4.96 1.26 1.29

The personnel understand my 4.92 1.19 1.26 -0.34

The personnel give me special attention

1.34

Factor analysis was conducted in order to reduce a large number of variables to a meaningful, interpretable and manageable set of factors. It allowed for the researcher to identify the main factors for expectation and perception of private medical practitioners by Malays. The KMO for expectation was 0.922, indicating that the sampling

analysis to proceed was acceptable(Anonymous., 2006). Bartlett’s

explained was 67.64% out of 3 components, namely: Component 1: Tangibility and Reliability; Component 2: Promptness and Empathy; and Component 3: Assurance.

Table 2: Expectation, Perception and Gap Means


SERVQUAL Attributes Component

1 2 3

Tangibles

Have up to date facilities

Its physical environment is appealing

Have modern looking equipment 0.724

Reliability

Provides its service at the time itpromises to do so

0.767

When it promises to do somethingby a certain time, it does so

0.762

0.703

Consistent in its performance

Responsiveness

The personnel give me prompt service 0.661

The personnel are never too busy torespond to my request

The personnel are always willingto provide service

The personnel are always readyto provide service

Assurance

I feel safe in my visits there

Have knowledgeable employeesto answer my questions

The actions of its personnel instill

Empathy

Have my best interest at heart 0.697


The personnel give me special attention 0.794

Total Variance Explained

Initial Eigenvalues 1.499

% of Variance

Cumulative % 67.640

factor analysis to proceed was acceptable (Anonymous., 2006).

Total variance explained was 70.30% out of 3 components, namely Component 1: Tangible, Reliable and Prompt, Component 2: Empathy and Component 3: Willingness and Assurance. Refer to Table 4.

Table 3: Rotated Component Matrix on Malays’ Expectations

Extraction Method: Principal Component Analysis. Rotation Method:

SERVQUAL AttributesComponent

1 2 3

Tangibles

My Medical Practitioner has up to date facilities 0.740

My Medical Practitioner physicalenvironment is appealing

My Medical Practitioner hasmodern looking equipment

0.763

Reliability

My Medical Practitioner provides itsservice at the time it promises to do so


Extraction Method: Principal Component Analysis. Rotation Method: Varimax with

Table 4: Rotated Component Matrix on Malays’ Perceptions

When my Medical Practitioner promisesto do something by a certain time, it does so

0.723

My Medical Practitioner performs the service right 0.793

My Medical Practitioner is consistentin its performance

Responsiveness

The personnel at my Medical Practitionergive you prompt service

The personnel at my Medical Practitionerare never too busy to respond to my request.

0.692

The personnel at my Medical Practitionerare always willing to provide service

The personnel at my Medical Practitionerare always ready to provide service

0.712

Assurance

I feel safe in my visits to my Medical Practitioner 0.647

My Medical Practitioner has knowledgeable employees to answer my questions

The actions of my Medical Practitioner 0.694

Empathy

My Medical Practitioner has mybest interest at heart

The personnel at my Medical

The personnel at my Medical Practitionergive me special attention

0.743

Initial Eigenvalues 9.629

% of Variance 7.442 6.220

Cumulative % 70.302


The Mean gap analysis of expectation and actual performance perception of Malays private healthcare service depict a moderate difference of quality gap between customer’s expectation and their perception regarding the actual service being delivered (Refer Table

representing a negative assessment of service quality satisfaction

respective items yield a negative gap score with the exception of one item related to employee knowledge to handle questions. Nevertheless a component wise gap mean analysis reflect that reliability and tangibility receive highest mean value for expectation. This means service reliability and tangibility are the most important component contributing towards over all service expectation. Despite both receiving a negative gap score, the highest negative gap score came from responsiveness component of service quality yielding a negative 0.41. This is quite understood in Malaysian cultural

dimension.The data was then analyzed using exploratory factor

component analysis with Varimax rotation to examine expectation part of SERVQUAL. A factor analysis was conducted to reduce the large number of variables in to manageable factors for better understanding and interpretation. The over all KMO was 0.9222,

three factors contributing 67 % of total variance. Refer Table 3. The results support the initial findings on mean values

components of SERVQUAL. This suggests that customer generate their initial expectation by examining the infrastructure of health care service provider further boosted by actual service in timely and

variance. The second factor can be labeled as empathy as it represents all empathy items with higher score as compared to responsiveness items loaded on the second factor.


The second and third factors contribute a total of more

responsiveness, empathy, and assurance. The third component is labeled as assurance as it represents three out of four items loaded from assurance component of the scale. The data suggest that private doctor’s service quality expectations can be grouped into three factors,

assurance.A separate factor analysis was conducted on perceptions of

actual service received by the respondents. The overall KMO was

resulted into three factors representing a variance of more then 70% (Refer Table 4).

The results showed a similar pattern as followed by the

is heavily loaded with empathy components which contributes more then 7% to the total variance. The third factor is loaded with two items each from assurance and responsiveness components of the

than the assurance factor. Therefore it is logical to describe the third factor as responsiveness & assurance. This factor contributes around 6% of the total variance.

DISCUSSION

The study indicated that the Malays’ expectation of health service

is’ tangible and reliability’. The second component is empathy and the third component is assurance. The Malays emphasized ‘tangibles’ like physical environment, up to date facilities, and the modern looking equipment. Simultaneously a timely and accurate service is strongly expected by the patients. These trends are similar on the perception


analysis. The second factor which represent on both expectation and perception dimension of the model is empathy. More importantly it emphasize on the special attention paid by the doctor on a patient

a service being delivered.

Table 5and perception through SERVQUAL Assessment

ConsumerAssessment

Malays’ Expectation

Malays’ Perception

Components 1Tangibles & Reliability

Tangibles &Reliability

Components 2Responsiveness&Empathy

Empathy

Components 3 AssuranceAssurance&Responsiveness

However the third factor is basically loaded with both assurance and responsiveness items from the scale on expectation and perception dimensions. However factor analysis of expectation dimension of scale is more favorable towards assurance as it contributes two items from assurance and only one item from responsiveness. On the other hand factor analysis of perception dimension of the scale resulted into equal contribution from both components of the scale. Nevertheless responsive items scored higher on this factor as compared to assurance. Regardless of this technical discussion the importance of assurance of medical practitioner knowledge and its support staff is critical for delivering quality service. Simultaneously

service quality


CONCLUSIONS

towards service quality of private doctors. Thus, private doctor should reevaluate their service quality in terms of meeting the needs of

are negative gaps between respondent’s perception and expectation

These gaps can be properly addressed by focusing on upgrading of infrastructure facilities on private clinic and hospitals. The results of this research indicated that customers expect a modern infrastructure as a prerequisite for using the services of private doctors as compared to government run hospitals. Simultaneously the reliability of the core service that is remedy from medical problems in a timely fashion increases the customer satisfaction with a particular practitioner. Health care service is mostly dealt with corrective measures than the preventive. Therefore the customers are in distress when reaching for such services with higher sensitivity. The remedy to deal with distress and heightened sensitivity is an empathetic response from the service providers. Therefore it become inevitable that customer perceives that his doctor is acting on his best interest by customizing

Managerial Implications

The results of the present study help in generating multiple practical implications for medical practitioners who are seeking to identify critical dimension to improve upon their service quality. An outdated infrastructure can greatly hamper the service quality perception. Most respondent expect modern facilities at private hospitals and medical clinics. They inferred service quality from infrastructure of a private medical facility.

medical practitioner is vital for delivering expected service quality. Any lack of delivery promises or wrong diagnoses can prove fatal


for the reputation of a medical practitioner.Nevertheless a patient encounters with many other personnel

while visiting a medical facility. This includes receptionist, laboratory staff, technician, nurses etc. The customers expect knowledgeable

trained and understand the importance of delivering quality service for their customers. Therefore medical practitioners are expected to

One of the most important service dimensions is empathy. The patients expect special individual attention complacent with their unique needs. Therefore a lack of interest on behalf of staff or doctor in addressing patient’s needs would generate negative feeling and a sense of dissatisfaction.

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125Sustaining Quality In Education Business: A Theoritical Framework

8SUSTAINING QUALITY IN EDUCATION

BUSINESS: A THEORITICALFRAMEWORK FOR DEVELOPINGA BENEFICIARIES-DRIVEN AND

RECIPIENT-FOCUSED PROGRAM

MOHD SHOKI MD ARIFF NORZAIDAHWATI ZAIDIN

HAIRI KAMIS KHALID ISMAIL

Abstract: The ISO 9001:2000 has been widely implemented in higher

to their quality of teaching and learning. Due to its concerns, the ISO 9001:2000 quality management system provides a framework

program. A model that highlights the importance of meeting

entails the integration of academic faculty’s mission, program

measurement of key performance indicators, program evaluation, continuous quality audit and continuous improvement efforts. This

code of practice as well as ISO 9001’s standard, systematic monitoring of teaching and learning process, continuous suitability of the programs with market demand and effective monitoring of students


performance that prevent inability of the students to complete their study.

INTRODUCTION

There was and still is a widespread interest in using ISO 9001:2000 because the standard general provides guidelines and contractual agreements for meeting quality requirements. The ISO 9000:2000

in nature, and has both customer requirements and customer satisfaction as an integral part of the standards (Idrus, 2001). The ISO 9001:2000 focuses on designing and establishing a quality management system in meeting and enhancing the requirements of the customers, organisations and other interested parties. Although quality management has its origin in the manufacturing industry, it is now more global in scope and permeates through all sectors of the economy including higher education institutions (HEIs). In fact, the Baldridge Award, the Deming Prize and the ISO 9000 standards been applied in an educational setting (Vandenberghe in Izadi, Kashef and Stadt, 1995).

Considering that ISO quality management is one of the approaches to achieve best practices in teaching and learning,

only focusing on quality assurance, but leads to the achievement of

this system will ensure the teaching and learning processes are of creditable standards and quality.

Implementation of ISO 9001:2000 Quality System in Higher Education Institutions

Declining graduates’ quality, increasing competition and growing higher education institutions, and funding bodies have “forced” the


higher education institutions (HEIs) to focus on quality. In Australia, a Senate inquiry have shown dramatic fall in the quality of teaching

quality of learning process. It has also shown increases in problems

& McMahon, 2001).The effectiveness of the quality concept in the other sectors

gave the momentum for higher education institutions to adapt this concept and practice it in their own domain (Kanji et. al, 1999). The successful acceptance and implementation of quality system into

and a certain level of stress to initiate a need for change (Idrus, 2001).

The ISO 9001:2000 is a model that provides a quality framework for any organisations to establish a customer orientation that is internationally recognized and can be independently assessed and certified. In the United Kingdom, many universities have implemented the standard as a means to ensure the quality of higher

Wolverhampton University. The University’s initial adopted of the

little to show at the end of the day because of the lack of focus (Doherty in Subramaniam, 1988). So that, it switched to the ISO quality management system because it was felt that an independently

compared with its competitors. It was also felt that the discipline of writing the quality manual, identifying procedures and writing work instructions would provide a much better grasp of the university’s

links.During its early years, the quality management system intended

to form the base for a TQM culture of continuous improvement across the university. Kanji (1998 in Kanji, 1999) believed that ISO 9000


could be integrated with TQM for the development of a total quality

improvement and process design. In Malaysia, the initiative to implement the ISO quality management system in public HEIs was materialised through the introduction of the Development and Administration Circular by the Malaysian Government in 1996. According to this circular, all government agencies including public HEIs, should implement MS ISO 9000 (version 1994) to ensure the delivery of quality services to customers. Recent development shows

to pledge the public on the quality of the programs, graduates, and

ISO 9001:2000 were University Technology of Malaysia, Northern University of Malaysia, University Putra of Malaysia and Faculty of Business and Economic, UPSI.

The ISO 9001:2000 quality management system is a process model with the integration of four major components as shown in Figure 1.

The Model of ISO 9001:2000 Quality Management System


The model emphasizes on the following:

The importance of identifying and understanding the needs

Commitment from top management to support the implementation of quality management system and continuous improvement.Effective utilisation of organisational resources in implementing the quality management system.The control on the product and/or service realization process to ensure all requirements are being met consistently

C

U

S

T

O

M

E

R

S

REQUIREMENT*

Quality Management SystemContinual Improvement

Management

Product Realization(and/or service)

Measurement,Analysis,

Improvement

ResourceManagement

Product/Service*Interested Parties

C

U

S

T

O

M

E

R

S

SATISFACTION*

Input Output

Figure 1

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iv

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The measurements of quality management system processes to determine the effectiveness of the system and improvement opportunities.

Application of ISO 9001:2000 in Higher Educational Setting

All the ISO 9001:2000 requirements are generic and are intended to be applicable to all organisations, regardless of type, size and

the application of ISO 9001:2000 major clauses and requirements in higher education setting.

The Major Clauses Requirements

Clause 4:QualityManagementSystem

A quality manual and procedures must be effective for implementation, monitoring, maintaining and developing of teaching and learning process.

Clause 5:ManagementResponsibility

The top management of an educational institution must demonstrate its commitment to the establishment and implementation of the quality management system for teaching and learning continuously improved.

Clause 6:ResourceManagement

equipment, utilities, hardware and software must be determined and adequately provided to ensure conformity of programs, teaching and learning process, output and graduates and quality management system

Clause 7:Product and/orservice realisation

Product and/or service realization is the process that will convert the customer requirements into an output that is acceptable to the customer and one would

processes in teaching and learning, administration and academic services.

iv


Table 1: ISO 9001:2000 Major Clauses

A Beneficiary-Driven and Client-Focused Process Model of ISO 9001:2000 for Achieving Best Practices in Teaching and Learning

best practices in teaching and learning using ISO 9001:2000 framework requires an education institution to carefully determine

the academic curriculum. Subsequently, all teaching and learning activities including evaluation and assessment methods, modules and

must be continuously monitored and adjustment has to be made on curriculum and other teaching activities accordingly. This process

Quentin (2000) refers to students as recipients, not customers. They are the ones who are directly involved in teaching and learning activities. Some argued students are internal customers since they

Clause 8:Measurement, analysis and improvements

At each step along the teaching and learning, some form of measurement and analysis has to be conducted to measure the teaching process capability, conformance

performance and quality of graduates in term of

data is gathered, an analysis needs to be done to determine whether corrective action needs to be taken place. If there is no cause for take place, the emphasis will be on the need to carry out continual improvement to ensure teaching and learning of high standard and to enhance quality of higher education.


are the ones who use services; such as supervision, class delivery, academic advising and other academic related services and receive the output of the teaching and learning process: such as modules,

recipients, as proposed by Quentin (2000) would be most appropriate. As they are directly involved in academic services and receive the teaching process output, implementing best practices in teaching and

driven and recipient focused. Designing and implementing ISO 9001:2000 for higher education should take into consideration of this

has been developed and used by the faculty.

refer to the interested parties including statutory and regulatory that faculties have to comply. These encompass industries, government agencies, and other related agencies that will employ the graduates; and professional and statutory bodies. Feedback, market analysis and needs analysis are the tools used to identify the

Input refers to the requirements stipulated by the respective

practices and must be translated into the curriculum design.Curriculum design: The designing of an academic

Teaching and learning process: To establish best practices in teaching and learning, the focus is on the 3Ps – People, Process and Product. The focus on people stresses on encouraging creativity of the classroom environment with competency


hand, focusing on product will ensure graduates of FBE met

The process involves in the teaching and learning activities is to produce quality graduates.Quality process output and services: This component

modules, and course work materials, whereas services includes the delivery of lectures, supervision, registration of subjects, marks management that given to the students or recipients. All process outputs and services must meet quality standards stipulated in the quality management system’s documents, customer’s charter and quality objectives. As a measure of quality process output and services, end of semester teaching evaluation and quality services survey were conducted to

Output: This is the ultimate product or result of teaching and

requirements in terms of knowledge, skills, attitude, and other relevant qualities.

: As a measure of the effectiveness of the teaching and learning process and the entire quality management system, surveys, assessment by professional and statutory bodies and practical training reports are gathered regularly.

In designing and establishing a quality management system, the mission of an organisation is an important input that has to be incorporated into the system. According to Quigley (1993), mission or purpose is described as what an organisation is today and what it aspires to become in the future. It provides a general direction and a means for achieving the aspired future. Goodstein, Nolan and


industries and not in others. Therefore, it involves a clear statement of what business the organisation is in and what the organisation is attempting to achieve in the industry.

The ISO 9001:2000 clause 5.3 specifically requires an organisation to establish a quality policy that is consistent with the purpose or mission of the organisation. The formulation of quality objectives that are measurable and consistent with the quality policy is a requirement of clause 5.4.1. Therefore, the development of ISO 9001:2000 quality management system for teaching and learning process should focus on the achievement of results, in relation to

commitment to the implementation of a quality management system.

the establishment of an effective academic monitoring is crucial to ensure all planned results are attained. Effective academic monitoring involves monitoring of class delivery, effectiveness of teaching, students’ performance and quality of process output. The result (data) of the monitoring activities provide an input regarding how effective

action should be taken accordingly based on analysis of the result to

standard and relevant quality objectives.Performance indicators indicate how well a process or product

measurement of key performance indicators of teaching and learning should take place. This measurement will provide information regarding effectiveness of the quality management system.

Audits are crucial to determine whether or not the quality management system has been effectively implemented and whether it is able to achieve the organisational mission. An audit is a systematic, independent and documented process for obtaining audit evidence and evaluating processes objectively. This is in order to determine


other information. An institution can implement audits and use the

standards and procedures, but also more importantly to determine the effectiveness of the quality management system in relation to it contributions towards the attainment of the organisational mission, goals and quality objectives. In fact, audit results form a key input in determining where opportunities lie for continual improvement (Cianfrani, Tsiakals and West, 2000).

Continuous improvement refers to recurring activities that

This is the key requirement for sustaining the institution’s journey towards achieving the aspired future state. Continuous improvement is also one of the eight quality management principles of ISO 9001:2000 and it should be a permanent objective of an organisation to continuously enhance the organisation overall performance and

Thus, the best practices of teaching and learning using ISO

but also taken into consideration on the integration of mission statement; the establishment of an effective academic monitoring, the measurement of key performance indicators of teaching and learning; and the implementation of continuous quality audit and the adherence to the principles and practices of continuous improvement to achieve organisational mission and strategic goals.

The Integration of Mission Statement into the Quality Management System.

To provide a sense of purpose in offering courses that meet the

A mission provides sense of purpose for the entire organisation (Goodstein, e. al. 1993). In order to achieve the mission, it must be


in a management system. Freeman (1993) and Dalela and Saurabh (1997) suggest that one essential element that should be incorporated when designing a quality assurance or a quality management system is

system must be considered by educational institutions when designing and implementing ISO 9001:2000 quality management system for teaching and learning.

The Development of Beneficiaries-driven Curriculum and Recipient-focused Process

In designing and implementing best practices in teaching and learning using ISO 9001:2000 system’s framework, it requires an educational

requirements. All the requirements will then be translated into the academic curriculum. Subsequently, all teaching and learning activities including evaluation and assessment methods, modules

be continuously monitored and adjustments be made to curriculum and other teaching activities accordingly. This is the essence of

As one of the measurements of the performance of the teaching and learning, an educational institution should monitor information

the relationships and provide full support all the way (Izadi, Kashef

is a mandatory requirement of ISO 9001:2000 as stipulated in


the practical training; needs analysis can be carried out during the course/curriculum design stage and to use questionnaires that can be distributed to the Alumni’s employers. Any suggestions, complaints and feedback have to be addressed and incorporate them into the teaching and learning process wherever appropriate. These processes align to the principles of best practices and continuous improvement.

Measuring Recipient Satisfaction

learning using ISO 9001:2000 quality management system (Figure 1) indicates that best practices in teaching and learning process should

focus regards students as recipient as they are the ones who receive

directly receive administrative and academic services from a faculty’s staff. The output of teaching and learning process includes teaching materials, modules, class delivery, project papers and other academic related services. These outputs must meet quality standards and must be consistent with the curriculum designed. This approach is consistent with ISO 9001:2000, which clearly focuses on controlling the processes of a quality management system and output of those processes. Students or recipients basically have no direct control over the curriculum, nevertheless it is very important for a faculty

assessment for measuring recipients’ satisfaction.

learning materials, continuance, organization,, teaching aids?

: Is there a variety of teaching and


organised assessments? Are students made aware of mode of assessment and whether the assessments are truly based on lectures?Teaching organisation: Has the course outlines been

they keep the delivery according to the schedule, on time?Lecturer- student relationship: Whether the lecturers are willing to listen to students’ suggestions, complaints and whether they develop good rapport.

Information on lecturer’s performance (based on the above questionnaire) has to be taken into consideration in improving the teaching and learning activities. Such improvements include

the teaching and learning process.According to Spanbauer (1992), students or recipients have

long been concerned regarding quality of higher education in term of administration and educational resources of higher education

services and adequacy of educational resources must be maintained. As Sutcliffe and Pollock (1992) suggested, student or recipients perceptions of an institute should be sought actively by all levels

resources. To keep updating with recipients’ perception of quality of education in term of services and educational resources, the respective body should conduct regular surveys and to hold a series of dialogues sessions with the students. Suggested analyses of the education survey are presented in Table 2.


Table 2: Dialogue Sessions Analyses

Attributes Means Std

Effectiveness of teaching and learning

Quality service to students (administration & staff)

Quality of facilities (availability andaccessibility of resource center, lab, ICTand quality of supporting services)

Deming (in Izadi, Kashef and Stadt, 1995) encouraged educators to create environments in which strong relationships of

separation. In fact, the TQM motto in education is to learn what the students need and constantly improve the educational processes and to deliver it consistently. By measuring and analyzing the quality of services, educational resources and effectiveness of class delivery are guaranteed. Furthermore, the faculty is able to utilise the information gathered to make corrective action and continuous improvement that will enhance recipients’ satisfaction and foster good relationship.

Table 3: Academic Monitoring System

MonitoringFocus of Monitoring Activities

Mechanismof Effective AcademicMonitoring

QualityResults

Class delivery

Student performance for a particular semester

Overall student performance


Continuous Quality Audit

to assess the effectiveness of the Quality Management System and to identify opportunities for improvement. The implementation of

In ISO 9001:2000, audits can be performed as:

on behalf of, the institution itself for internal purposes and

conformity,

institution or by other persons on behalf of the customer,

conformity with requirements such as those of MS ISO 9001:2000.

Table 4: Key Performance Indicators of Teaching and Learning

Area of Key Performance Indicators

Focus and Mechanism for Measuring Performance

Indicators

QualityResults

Programs

Process

Process output

Student performance

Graduates

Quality Services

Educational resources

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Auditing the quality management system is crucial. The audit

of the faculty’s quality management system to quality assurance standards, service standards and the effectiveness of the system in meeting the customers’ and all interested parties’ requirements. At the same time, results of the audits will also indicate nonconformities in teaching and learning processes that help the respective bodies to take immediate corrective actions.

The aim of continual improvement of ISO 9001:2000 quality management system is to increase the probability of enhancing the satisfaction of customers and other interested parties. This can be achieved through:

the implementation of correction measures to eliminate a detected nonconformity and corrective action to eliminate the cause of a detected nonconformity or other undesirable situation in order to prevent recurrence.

of a potential nonconformity or other undesirable potential situation.the improvement of quality management system processes by reviewing the quality policy and objectives, quality assurance standard, adding value to products and services to customers

Table 5

Areas of nonconformities Internal Audit External Audit

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Improvements process focuses on the 3P’s, which are Product, Process and People:

Product which covers enhancing quality of graduates and improving process products, which involves the quality of

materials and practical training.Process, which involves improvement in the teaching and learning activities in producing quality, graduates. Such improvement includes the introduction of new ways of class delivery, the enhancement of students’ evaluation methods, the adjustment of course curriculum to match changes in the needs and requirements of customers and professional bodies.People refer to those who are involved in the process of increasing the staff competency in delivering academic courses and management of academic related activities and processes.

Improvements process is carried out by taking corrective

customers and other interested parties, data on the achievement of quality objectives and suggestions from faculty staff.

CONCLUSION

The paper presents the ISO 9001:2000 quality management systems as a framework for the faculty to design and implement best practices in teaching and learning. The focus of implementing best practices in teaching and learning process using ISO 9001:2000 emphasises

Adopting best practices in teaching and learning in higher education institutions using ISO 9001:2000 will ensure that all academic

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academic monitoring, measurement, analysis and improvement of key performance indicators and activities at each step of the quality

achieved by continuously meeting their requirements.The introduction of quality assurance criteria and standards

for public HEIs by the Ministry of Education, similar to the Quality

Education System in Australia, will certainly enhance the Faculty ISO 9000 quality system adherence to common and high education standards in delivering academic courses. In continuing the quality journey and ensuring quality of the highest creditable and standards, the faculty will continuously improve its teaching and learning

with renowned education institutions to ensure it is of a world class standard.

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acceptance of islamic finance products: a study on muslim consumers attitude in a non muslim country

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