MPK701 Research Design and Analysis
Mount Deakin Ski Resort: Case Study
Unit Chair
John Hall
Submitted by:
Due Date : 15th Oct 2012
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Contents
Executive Summary ........................................................................................................................ 3
Problem definition .......................................................................................................................... 4
Background to the problem ......................................................................................................... 4
Description of the broad problem................................................................................................ 8
Research Purpose and Objectives ................................................................................................... 9
Statement of the management decision problem (MDP) ............................................................ 9
Statement of the Marketing/business research problem (MRP).................................................. 9
Specification of the Research Objectives (MRO) and decision criteria...................................... 9
Research design .............................................................................Error! Bookmark not defined.
Type and rationale of the research design ..................................Error! Bookmark not defined.
Methodology for data collection from secondary sources .........Error! Bookmark not defined.
Methodology for data collection from primary sources .............Error! Bookmark not defined.
Research Instruments .....................................................................Error! Bookmark not defined.
Questionnaire .............................................................................Error! Bookmark not defined.
Topic guide for Group Moderator ..............................................Error! Bookmark not defined.
Bibliography ..................................................................................Error! Bookmark not defined.
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Executive Summary
The purpose of this report is to elucidate the factors which are considered to be of significant
importance for tourism industry. The report begins with a detailed analysis of the secondary
data such as academic journals and articles which forms the basis for the rest of the report.
The major findings from the literature review reveals that service organisations are
increasingly differentiating themselves on the basis of customer service which in turn is
related to the perceived quality of the service offering. Positive word of mouth has a strong
influence as customers perceive it to be more credible than organisation-sponsored
communications. The past experience of the customer has a huge impact on the decision
making criteria of the consumer which in turn impacts the repeat purchase behaviour and
subsequently customer loyalty. The later part of the literature review has been related to ski
resort in particular which has focused on motivations of the customer and why they consider
visiting a ski resort for spending their leisure time which varies from different individuals.
Further the importance of place attachment and affect of promotional activity on consumer’s
decision making has been detailed which is a vital aspect in consumer decision is making
process.
In the light of above discussed factors, the Management Decision Problem is how the number
of visitors can be increased which has assisted by the marketing Research problem and
research objectives throwing light on how the strengths and factors which are most valued by
the customers can be used strategically to improve the competence of the Resort as a whole.
The report highlights the research design in which use of both the primary and secondary data
has been suggested. Quantitative and qualitative have been suggested to be taken up the
management. The report concludes with the research instruments like topic guide moderator
questionnaire which would help in the research process.
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Problem definition
Background to the problem
Last few decades have seen a transformation in how people spend their leisure time as it has
increased considerably. Researchers are consistently investigating and developing methods to
determine the attributes of tourist behaviour in the present era.
In this report our main focus is on customer satisfaction and motivation, and finding their
links with customer loyalty, recommending behaviour, service quality, pricing policy,
promotional activities etc.
Service quality and customer satisfaction are essentially the key drivers of financial
performance (Matzler et al., 2004) Heskett, Sasser and Schlesinger (1997) claim that
customer satisfaction is precursor of loyalty, which in turn leads to higher purchases, positive
recommendations and lower price sensitivity. Anderson, Fornell and Rehlman notice that
increased customer loyalty means that more customers will be retained in the future which
ensures a steady stream of future cash flow (Reichheld and Sasser 1990).
Opperman (2000) declares that from an operator or destination perspective, repeat visitation
has been intuitively used as an indicator of the positive perception of the “product” in
question which gives way to positive word-of-mouth, a critical element, as friend or family
member does not have a vested interest in the organization. Dmitrovic et al. in turn proposes
in her conceptual model of tourist satisfaction that loyalty and complaint behaviour are two
main outcomes from customer satisfaction. Opperman concludes that the behavioural
measure of loyalty by itself can be a reasonable or even good predictor of future tourism
destination choice purporting the notion that past experience has an influence on future
behaviour in a tourism destination choice context.
As outlined before, along with loyalty comes increased probability of recommendation (here
equalling recommending with positive word-of-mouth). As word of mouth is a pervasive and
influential form of communication, involving a regular exchange of information across a
wide spectrum of individuals and stakeholder groups (Haywood, 1989), Strokes, Sameera and
Lomax (2002) found several important features in nature of recommending behaviour.
Authors investigated factors that influence recommending behaviour and pointed out
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involvement (increased participation), incentives and the length of customer tenure as main
of them. Reichheld (1996) also indirectly linked recommending behaviour to length of
customer tenure by suggesting that one of the ways in which long-standing customers add
more value to a business than recent customers is by making more recommendations.
Theories of relationship marketing incorporating a ‘ladder of customer loyalty’ (Payne, 1995)
suggest as customers become more loyal they are more likely to spread positive word of
mouth (Dick and Basu, 1994).
A heavily argued approach called Net promoter Score, originally invented by Frederick
Reichheld measures customer satisfaction and is basically the net difference between number
of customers who are likely to recommend the service and those who will not. Considered to
be an easy way to measure Company’s success to deliver service that delights customers, it
became widely adopted by the managers (Keiningham 2007) B. Sharp (2008) is convinced
that no empirical evidences were given, it was an absolutely analytical finding. On his way he
has done several misleading assumptions, for example that one can halve the defection at
zero cost, as well as assuming that defection is not only perfectly possible, but can be easily
achieved. One of the serious blows to the NPS idea the double jeopardy law. “Double
jeopardy shows that it isn’t possible to radically alter defection rates without massively
shifting market share.”(Sharp, 2008) Disadvantage of NPS is that it measures brand’s
performance with the single indicator of customer loyalty. Moreover, it is crucial to bear in
mind that customers do change their opinion and can move from promoters to detractors over
the short period of time, which can change NPS and this was especially visible in the time of
the depressed economy. (Michael Feehan, Cristina Ilangakoon and Penny Mesure, 2009)
However, there is a completely different opinion, which states that NPS is not only
trustworthy, but also when gathering information to estimate it one can get much needed
information and feedback from the customers (Merrick, 2009).
As loyalty and positive word of mouth arise from high level of customer satisfaction, the
most popular and well-established view in literature is that service quality has strong
influence on customer satisfaction (Matzler et al., 2004), Hudson, Simon and Shephard,
Graham W. H.(1998), Marcjanna Augustyn and Samuel K. Ho (1998), Cronin et al., 2000;
Spreng and Mackoy, 1996). Although defining the term service quality is not easy, marketing
theorists generally accept that the concept is personal and subjective and that consumer
perceptions constitute an essential element of its conceptualization (Gonzalez et al. 2006).
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The most common definition of service quality relies on a global consumer judgment of the
superiority of the product or service (Parasuraman et al., 1988), and thereby integrates
consumer expectations of the service and perceptions of the firm providing the service
(Gronroos, 1994; Parasuraman et al., 1985). A more general application entails the use of the
SERVQUAL scale (Parasuraman et al., 1985). Consequently, recent recommendations
suggest the use of consumer perceptions to determine service quality (Cronin and Taylor,
1992). Dmitrovic (2008) in her research postulates that service quality influences perceived
value and they both affect customer satisfaction.
Perceived quality is affected by price and customer satisfaction as price elasticity decreases
as satisfaction grows which subsequently results in increased profits (LaBarbera and
Mazursky, 1983; Rust and Zahorik, 1993). One of the fundamentals of the rational economic
behaviour is that consumer is more price tolerant to the products that provide him higher
satisfaction. However, one must not disregard the fact that customer’s behaviour is complex
and is affected by numerous factors, thus firms that provide customers with the higher
satisfaction level have more price tolerant clients relatively. Also, customer satisfaction is
higher in more competitive situation, but at the same time price tolerance decreases as there
are a lot of alternatives to choose from. Therefore one cannot consider price tolerance and
customer satisfaction as identical constructs, though they are related. Anderson, E. (1995) in
his researches clearly shows that only when the unobservable effects are taken into
consideration the correlation between price tolerance and customer satisfaction is clearly
seen.
An individual’s emotional and functional attachment to a specific recreational place is a key
driver of his decisions for a choosing the particular place where he wants to spend his leisure
time.
Generally, Motivation occurs when an individual wants to satisfy a need which has been
viewed as a mixture of two factors namely Push and Pull. The former arises from socio
psychological motives whereas the latter is the result of motives aroused by the destination
and not by the tourists themselves. (Goossens, 2000).
Different reasons for motivation (reasons for visiting the ski resort) can also be referred to as
the benefits derived by the customers for visiting ski resort. For example: excitement,
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mastering skills, relaxation, social relation, leisure, self-esteem, reduced stress, fun and
enjoyment, improved mood, physical health etc (Johnson, J.R., Zucco, P., Shealy, J.E. 2000).
Other motivational factors include learning about new places and acquiring information,
learning about new cultures, stimulation seeking. However the important consideration with
stimulation seeking is that the customer is likely to get bored quickly when the task is
repeated too often (Richards, G., 1996).
Emotional needs and emotional benefits are the driving forces which help the customer
evaluate their decision eventually which often includes a cost-benefit analysis. Apart from the
above mentioned factors, imagining, day dreaming and emotions also play an important role
in decision making.
Consumers are often attracted to a place which they have seen in scenery before as they
perceive it to be of the same and also have huge anticipations attached to it. It is also
important as for resort marketers and managers as it helps them in developing attitudinal and
behavioural loyalty. It can also be argued that it forms a general idea on the consumer’s mind
that this is what they will get in return of they decide to spend. Thus, the location or the
surrounding areas have an important influence on the mind of the consumer. Customers give
special on factors like how to navigate the terrain and ancillary services like rentals, dining,
parking, lodging and the surrounding areas of the region (Zinman, J., Zitzewitz, E., 2009).
Many resorts have lot of augmented service offerings like restaurants and bars as they appeal
to the customer positively increasing probability of attending the places with more attributes
are higher. However, it may be noticed that not all the attributes would be appreciated by the
consumers and they should be customer focused and research should be done upon to know
what would be appreciated by the customers more instead of just adding it to their offerings
and increasing the price for the customer which has said to be an important factor in the first
place. The result of various studies has shown that skiers’ loyalty was directly related to the
physical environment service quality dimensions and place attachment dimension (Park &
Njite, 2010; Lee & Huang, 2009).
A promotional activity which includes advertising can be used strategically by the marketers
and in the same regards this helps the customers to have more information about the place
before actually arriving at the venue which is often backed up by positive image as it is a
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company sponsored marketing communication. This also helps in exciting the imagination of
the customer and also increasing the customer involvement.
Apart from the above factors a consumer’s spending patterns, emotional attachment to a
tourist spot, willingness to pay recreation fees, availability for substituting recreation places,
interaction quality, employees’ expertise because of potential risks involved with
skiing(safety issues), ambience and service cape, how crowded is the particular place in a
particular season, place dependence and loyalty, brand image etc can also be considered as
vital factors affecting the decision making process (Alexandris, K., Kouthouris, C., Meligdis,
A., 2006).
Description of the broad problem
Mount Deakin Ski resort is interested in knowing the key aspects of its performance and how
they can increase the customer loyalty which gets them to re-visit and also recommend the
place to others. Customer satisfaction has been regarded as the basis for this kind of
behaviour of the customer. The growth of the service industry is directly related to the value
they offer and the level of satisfaction customer derives from that. It has been noted above
that negative word of mouth has a greater impact and positive word of mouth would be
delivered only by satisfied customer who can bring a boost to the financial performance of
Mount Deakin ski resort. The recommending behaviour has been found to have positive
relationship with the tenure of the customer (how long the customer has been visiting Mount
Deakin Ski Resort). The level of Service quality can be measured and monitored using
SERVQUAL as an instrument which focuses on consumer’s perceptions and expectations.
The cost involved and the benefits received are often evaluated by customers prior to making
their decision of adopting a service or a product, thus the Mount Deakin ski resort can either
try to increase the benefits or reduce the monetary and non-monetary costs involved for the
customer.
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Research Purpose and Objectives
Statement of the management decision problem (MDP)
Management decision problem is actually what manager wants to do. Being action oriented,
it states what actions manager should take in order to reach the certain goals (Malhotra ,
2010).
In this particular research, it is more reasonable to consider the opportunity that management
team can use. So we put MDP as: “How to broaden the clientele of Mount Deakin Ski
Resort?”
Statement of the Marketing/business research problem (MRP)
The marketing research problem is essentially information oriented and determines what kind
of information is required and where such information can be obtained from. In the present
research the marketing research problem can be defined as
To determine what factors add value to the overall satisfaction of the clients and to determine
the critical success factors of the Mount Deakin Ski resort.
Specification of the Research Objectives (MRO) and decision criteria
 The Key aspects of this problem can be defined as determining strengths of Mount
Deakin Resort
 What factors are being considered by the clients as most important and that determine
that are achieving value for their money.
 Asking clients what was the most satisfying experience you are taking back after
visiting Mount Deakin Resort
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 Asking clients about where they spent most of their time in the resort which indicates
that
 Conversely, information should be found about which particular aspect was not up to
the mark to gain an insight about the weaknesses also.
Decision criteria
 The factors which are common in most of the responses should be used strategically
as to build upon the strengths to attract more clients. And also the weak factors should
be eliminated.
 The place where most of the time is the one where clients are probably enjoying
maximum. For example (Video game parlour or Bars and Restaurant).
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