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CHAPTER 1

INTRODUCTION

Rationale

On the ever-changing exceeding competitive service market, having a high

customer satisfaction and more loyal customers is something great to the business

owners, and also complex to acquire. Beauty service business is one of many

businesses that play an important role in economic and social development.

Customer satisfaction is not a new business term but many companies fail to reach

their customer expectation. There are large amount of companies that went to

bankrupt because of their failure in dealing with their customer.

In Southern African, according to Gallarza and Saura (2006) that the

relationship between service quality and customer satisfaction have been found

customers complaining about inconsistency they have received over different

industries. This argument emphasis risky part of context in studies that could be

examining service quality and customer satisfaction. The importance of this is the

outcome create by studies are largely context specific and therefore a study like the

current one can generate essential knowledge that would preserve the literature

related to the variables of interest. Against of this is background of study seeks to

organize the existence or absence of relationship between the aforesaid variables in

a selected samples of hair salons drawn from the original explored hairdressing

sector of South Africa’s service industry.

In the Philippines, according to Dontigney (2014) poor customer service in

every salon, as a business centered on changing people's appearance, depends on

customer satisfaction. Most salons offer a range of products, from simple haircuts
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and coloring to facials and manicures, but also provide a number of opportunities for

customer service to break down. Every business, such as a staff member acting in a

rude or unprofessional manner, may face normal customer service problems. If a

client gets a hairstyle that he didn't ask for, a bad color in his hair, or a bad manicure,

he's almost sure to tell his friends and family about the bad experience. If the salon

develops a reputation for poor customer service, it will lose both clients and sales.

The purpose of this study is to explore the factors or elements that

significantly affect customer satisfaction through service quality of beauty salon with

regards to the focus area of Panabo City. Hence, if the beauty salon does not meet

the expectations of the customer, possibly bind to dissatisfaction. It is urgent to

conduct this kind of study for the reason that it may reveal the relationship between

service quality of beauty salon and customer satisfaction. It may lead to an

assumption of the researcher that the more the beauty salon serves a good quality of

service the more the customer will be satisfied and become loyal to the beauty salon,

it may cause an increase to the beauty salon profit.

Research Objectives

The main purpose of this study is to determine the significant relationship

between the service quality and customer satisfaction of beauty salons in Panabo

City. Specifically, this aims:

1. To determine the level of service quality of beauty salons in Panabo City in terms

of: Responsiveness

2. To determine the level of customer satisfaction of beauty salon in Panabo City in

terms of: Customers Loyalty

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3. To determine the significant relationship between service quality and customer

satisfaction of beauty salons in Panabo City.

Hypothesis

The hypothesis that there is no significant relationship between service quality

and customer satisfaction of beauty salons in Panabo City will be tested at 0.05 level

of significance.

REVIEW OF RELATED LITERATURE

Service Quality

The quality of service was described as meeting the high quality of customer

satisfaction service (Zeithmal and Bitner, 1996). It’s so difficult to measure the quality

of service because it is intangible. The complex factor in enforcing service is that

facilities are provided and at the same time have by the customer (Markovic, Rasper

and Šegaric, 2010).

Knowing the service quality aspect as predictors of full-service quality and

efficient management for active hypermarket planning and service marketing

operations (Jelčić, 2017). Service quality should only be applied to different service

environments and cultures, provided customers do the same. Research needs to be

directed towards identifying distinguishing characteristics of perceived service quality

in separate industries and finding regularities within similar industries (Suuroja,

2003).

According to Ozment and Morash (1994), the quality of service is the close

relationship between the company supporting an employee's insight into what the

quality of discharge is. Similar to the concept of Zeithaml and Bitner (1996), it
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describes the value of the high quality of service it can offer the expectation of the

customer.

Service will be printed in some ways that the term will be used to rely on that

house. Service will be published as an intangible associate degree offer from one

party to a specific one for enjoyment in exchange for money. Performance is one of

the things that shopper is looking for during a proposal, the service happens to be

one. (Kotler, 2001; Parasuraman, 1985; Saleh and Ryan,1991).

Customer Satisfaction

The main indicator of loyalty is customer satisfaction (Oliver, 1997). It's a

customer's notion of service process. This concerns the customer's inclusive

congratulations with the discharge and use of the facility (Andaleeb and Conway,

2006). In rising beauty salon, customer satisfaction plays a valuable role. However, it

is impossible that an unsatisfied customer would return to a beauty salon or

recommend it to others if the customer does not enjoy or is not pleased with the

beauty salon’s service quality. Service quality plays a vital role in customer

satisfaction generation and maintenance. The importance of the two variables has

been demonstrated in the literature on service marketing (Antony, Antony, Ghosh,

2004).

Wall and Berry, (2007) notes that interaction between beauty salon staff and

customers has been shown to be an important factor in customer satisfaction with

restaurant service, with the influence of environmental factors being equal.

According to Oliver (1981), customer satisfaction is an assessment of a product

or service's emotional consumption. Similar to the idea of Tse and Wilton (1988),
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customer satisfaction was defined as a "consumer response to assessing the

perceived difference between expectations and the after-consumption end result."

Customer satisfaction is described as emotions of satisfaction when customers

compare their perceptions of actual product and service outcomes with expectations.

Several studies show that customer satisfaction is a major determinant of customer

behavior and customer retention (Oliver, 1980; Fornell, 1992; Cronin and Taylor,

1992; Bolton and Drew, 1994).

Customer satisfaction was of great concern in marketing services as satisfaction

connects purchase and consumption with post-purchase events like change of

attitude, repeat purchase, favorable mouth and fidelity mention (Fornell, Johnson,

Anderson, Cha, and Bryant, 1996; Oliver, 1994).

Theoretical Framework

With regard to the relationship between customer satisfaction and quality of

service, Oliver (1993) stated that service quality would be a guide for customer

satisfaction, whether cumulative or transaction-specific. As customer satisfaction is

considered to be focused on the customer's experience of a particular service

interaction (Cronin & Taylor, 1992), it is consistent with the fact that quality of service

is a determinant of customer satisfaction, as quality of service is the product of

services provided by service providers in the company.

Customer satisfaction with individual services affects the customer's

satisfaction / dissatisfaction with the overall service experience. Parasuraman (1988)

describes service quality as the degree and nature of the difference between the

customer's assumptions and reasons or the extent to which the service meets or

exceeds the customer's standards.

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Customer satisfaction with individual service encounter affects the customers’

satisfaction/ dissatisfaction with the overall service experience (Johnston, 1995).

With this, the expectation and the satisfaction of the customer is relevant to the

service offer and responsiveness.

Conceptual Framework

The figure shows the research of service quality and customer satisfaction.

Independent Variable Dependent Variable

Service Quality Customer Satisfaction

 Responsiveness  Customer Loyalty
(readiness and the (expectation and
willingness of the reliability)
service)

Service quality is the independent variable that indicates how the

responsiveness of the service offered. Responsiveness is one of the factors that can

manage the quality of service, it is also stands essential role to reach customer’s

expectation, which is the readiness and willingness of employees to offer service

incorporates appropriateness of service. (Kumar and Charles, 2010)

The dependent variable which is customer satisfaction indicates how

effectively obtain the customer loyalty of the target market. There is a significant

relationship between expectation and reliability to the customer satisfaction.

According to Sharma and Stafford (2000), the feedback of the customer in the

service staff is importantly tangible in the service quality of the business. It also
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considered the expectation and reliability of the necessity on customer to the service

staff to solve the certain problem.

Significance of the study

This study is beneficial to the beauty salon owners. The result of this study

provides their perceptions and suggestion on what are the ways to improve their

service quality for them. And there is a big possibility that the customer will be

satisfied and get loyal to the beauty salon.

Also, this study is useful to the students who are leading in business related

courses and programs. It will help them to have information they need on some of

their school works.

Lastly, this study will help the future researchers. It can help them a lot to

have the ideas they need for their future studies.

Definition of terms

The terms used in the study are defined to convey the meaning and to

establish a common frame of reference.

Service Quality. Defined service as an action or activity which may be offered by a

business entity to their customers, which they can assure the customer to show how

authentic their service is. It is also the measurement on how the customer achieve or

reach their possible expectation.

Customer Satisfaction. It indicates the level of expectation toward the service nor

the product. In other words, customer satisfaction is the tool of the target market to

state of illustrate their common need. And it is also the measurement of the

performance or the quality of the business.

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CHAPTER 2

METHODOLOGY

Research Design

The researchers use quantitative non-experimental correlational design.

Correlational design is more focused on showing the relationships between two or

more variables in the same population or between the same factors (Leedy and

Ormrod, 2010).

The reason why the researchers had this kind of research design because

they want to determine and validate if the quality of service of beauty salons would

really affect the satisfaction of its customer.

Research Locale

The selected site that this research will cover is in Arguelles Street, Barangay

San Francisco, Panabo City, Davao del Norte Province. The figure below points out

the selected beauty salons of Panabo City as this study’s local which will be the

resource of the participants and the necessary data

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Population and Sample

The participants of this study include the random customers of beauty salons

in Panabo City. The researchers use random sampling technique to have the sample

data of the respondents. Wiratchai (2000) proposed a sampling of 160 respondents

is enough to clarify the level of service quality to the customer satisfaction.

Respondents Sample

Love Ur Self Beauty Salon 32

Niko’s Beauty Salon 32
Head to toe Beauty Salon 32
Carlo Reyes Beauty Salon 32
Benjoy Salon 32
Total 160

Research Instrument

Likert scale will be used to determine the level of service quality and customer

satisfaction of beauty salons in Panabo City. Lissitz & Green (1975) and Boote

(1981) suggested that a five (5) - point scale is reliable.

The following scales are used to determine the service quality.

Descriptive
Scale Interpretation
Equivalent

4.21 – 5.00 Very high The service quality is always observed.

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3.41 – 4.20 High The service quality is often observed.

2.61 – 3.40 Average/ Moderate The service quality is sometimes observed.

1.81 – 2.60 Low The service quality is rarely observed.

1.00 – 1.80 Very low The service quality is never observed.

The following scales are used to determine the business profitability.

Descriptive
Scale Interpretation
Equivalent

It measures that business profitability is

4.21 – 5.00 Very high
exceptionally manifested.

It measures that business profitability is highly

3.41 – 4.20 High
manifested.

It measures that business profitability is

2.61 – 3.40 Average/ Moderate
moderately manifested.

It measures that business profitability is poorly

1.81 – 2.60 Low
manifested.

It measures that business profitability is not

1.00 – 1.80 Very low
manifested.

Data Collection

In gathering the data, first is the researchers need to get information from the

respective beauty salon customers in Panabo City. Once the researchers get the

sample mean that have given by the owner, they will start collecting data by
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distributing their questionnaire from the random respondent. After retrieving all the

questionnaires from the respondents, the researchers will evaluate data gathered.

Statistical Tools

The following are used to measure the data:

1. Weighted mean: This will be used to determine the level of service quality in

terms of speed of service of beauty salon. Also, this will be used to determine

the level of customers satisfaction in terms of customers loyalty on beauty

salon.

2. Pearson R: This will be used to determine significant relationship of service

quality and customer satisfaction of beauty salon.

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