A Review of the Kano Model

A Case Study of Online Travel Agencies

Malin Karlsson & Thanh Huong Le

Master’s Programme in Strategic Entrepreneurship for International Growth
School of Business and Engineering
Halmstad University, Sweden

Abstract
The e-commerce has increased over the last decades, and this have indicated a change in the
booking behaviour within tourism. The change within the tourism business is almost completed
to go from offline to online services. This has developed a new form of companies; the online
travel agencies (OTAs). As this change has been developed, not all customers is aware of the
function of the OTAs. The purpose of this study is to investigate the role of the Kano Model
when a third party is involved in the sales through a case study of three OTA sites. This study
provides a content analysis with gathered customer reviews. The main findings of this study
indicate that the five quality elements of the Kano model may be interrupted by a third party.
The customer satisfaction of the OTAs can be decreased by factors that they are not able to
control.

Keywords: Kano model, IPA, OTA, Online Travel Agencies, SLEPT, customer satisfaction

Introduction
E-commerce has developed to a role of great importance in the shopping behaviour within the
service industry (Miao et. al., 2014). Zhao et. al. (2013) explain further that also within the
tourism industry e-commerce has experienced an increase over recent years. Statistics show
that while there has been a slow growth within certain parts of the tourism e-commerce the
hotel bookings rate is still increasing (Patel, 2016). Patel (2016) explains that the growth within
e-commerce in the travel industry is due to the change from offline- to online booking
behaviour. However, as the transformation is soon to be completed a decrease in growth rate
is a natural trend within the industry. This change within the travel industry has allowed the
formation of a new type of firm; Online Travel Agencies (OTAs). OTAs allows customers to
search for tourist attractions, flights, hotels, car rentals, and everything that their vacation may
include, in one and the same website (Patel, 2016). These firms are usually working with native
marketeers as this provides a decrease in the cultural difference as well as language barriers.
By providing local expertise these companies help the tourist destination firms to attract
customers from other geographical markets than their own. The OTAs are not responsible for
the service delivery in terms of the actual vacation, they tend to handle customer service as
well as money transactions and sometimes work on commission (Patel, 2016). Patel (2016)
explains that “most of the websites function like metasearch engines that pull prices and
offerings from their network, and in some cases the websites of the providers themselves”.

As the purchases are made through a third party it is interesting to investigate if this procedure
may affect the customer satisfaction. Tontini et. al. (2013) explain that the term of satisfaction
is connected to the fulfilment of direct and indirect customer needs by the aggregation of
attributes of services or products. A common way to measure customer satisfaction is through
the Kano model (Kano, 1979). Kano (1979) divides the customer perceptions of the service
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quality into five different quality elements; attractive quality elements, one-dimensional
quality elements, must-be quality elements, indifferent quality elements, and reverse quality
elements. This model is useful when investigating the overall customer satisfaction with what’s
included in the service. However, Chen & Ko (2015) argue that the importance-performance
analysis (IPA) model is crucial to measure the willingness of the customers to purchase the
service again as it also measures the quality of service delivery.

The purpose of this study is to investigate the role of the Kano Model when a third party is
involved in the sales through a case study of three online travel agency sites. The customer
reviews of the service quality regarding three OTA website’s will be retrieved from
independent sites. These reviews will be analysed in accordance to the Kano Model. To
investigate the role of the OTAs within the customer experience, this study will also use the
importance-performance analysis model (IPA).

The Kano Model

Kano (1979) develops the 'M-H property of quality' by adapting the work of Herzberg et. al.'s
(1959) 'Motivation-Hygiene Theory'. Additionally, Kano et. al. (1984) suggest a two-way
model on quality based on customers' perception and experience. Scholars have applied the
Kano model for different purposes. Tontini (2000) proposes some modification of the Kano
model and applied to an Italian restaurant for services improvement. Matzler (1998) applied
the Kano model for product development and integrated into quality function deployment.
Schvaneveldt et. al. (1991) implemented the Kano model into banks, laundries, restaurant and
supermarkets.

The Kano model proposes that the relationship between performance of attributes and
customers' satisfaction is non-linear (Kano et. al., 1984). Much literature has been carried out
to discuss the use of this information in service management (Matlzer, 1998; Zhang & Dran,
2001; and Rashid, 2010). According to Kano et. al. (1984), Berger et. al. (1993), Nilson-Witell
and Fundin (2005), and Matzler et. al. (1996), the model provides an effective approach to
categorizing the customer attributes into different types, which are, as follows:

Quality Elements Definition

Attractive Quality These elements provide satisfaction if present, but customers still consider it
Elements acceptable when attractive quality elements are not present.

One-dimensional These elements result in satisfaction with the present circumstances, higher
Quality Elements performance leads to higher satisfaction and vice versa.

Must-Be Quality These elements relate to the basic functions of service. Customers do not
Elements recognize the presence of these elements, but the lack of these elements lead
to strong dissatisfaction.

Indifferent Quality These elements result neither in satisfaction nor dissatisfaction, whether
Elements objective performance is high or not.

Reverse Quality These elements result in dissatisfaction when fulfilled and in satisfaction
Elements when not fulfilled.
Table 1. Five categories of quality elements (Kano et. al., 1984)

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The Kano model is illustrated in Fig. 1 (Kano et. al., 1984). According to Kano et. al. (1984),
it can be described from Fig. 1 that the vertical axis of the Kano model stands for the
satisfaction and dissatisfaction users, whereas the horizontal axis stands for conditions being
sufficient or insufficient. Employing the relative relationship, the facility of the quality
elements and the perception of satisfaction of users, quality can be separated into five type;
attractive quality, one-dimensional quality, indifferent quality, must-be quality, and reverse
quality.

Fig. 1.: Kano Model (Kano et. al., 1984)

Critical Notes of the Kano Model/IPA Model

According to Mikulić and Prebezac (2016), the Kano model has gained an increased presence
within the tourism industry in recent years when integrated with the importance-performance
analaysis (IPA). Chen and Ko (2015) explain that using the Kano model alone is not sufficient
enough for the company. They argue that when combining these two models, the reliability of
its managerial implications increases. Several scholars also argue that one of main applications
of the Kano model and IPA is to improve service quality indices in the fields of restaurants,
tourism and hospitality (Tontini, 2000; Tontini et. al., 2013; Gregory & Parsa, 2013; Deng,
2017). According to a study conducted by Tontini et. al. (2013) on the service of pizzeria
restaurants, they stress on the determination of the relationship between attributes performance
and customer satisfaction as a focal point to gain market success. Mikulić and Prebezac (2016)
highlight the ‘methodological advancements' achieved from integration the Kano model with
IPA will increase the overall reliability of its managerial implications. Chen and Ko (2015)
explain that the Kano model has been used to study “tangible” travel-related services. IPA is
an extended version of the Kano model and allows to study “the perception of the visitors and
their willingness to revisit” (Chen & Ko, 2015, p. 272).

The aim of IPA, according Mikulić (2007), is to directly draw the inference of improvement
priorities from the attributes' positionings in the grid based on current level of performance.
The concept of IPA was developed by Martilla and James (1977) and divides the customer
satisfaction into two components; 1) the importance of the provided service, and 2) the quality
of the service. Chen and Ko (2015) argues further that IPA allows an opportunity to study the
competitive position a company possess on the market. Sever (2014) agrees that IPA is a great
tool to measure customer satisfaction within tourism. Chen and Ko (2015) explain that the IPA
is often divided into a matrix with four quadrants (Fig. 2.). According to Chen and Ko (2015),
it can be described that the vertical axis represents attribute importance while the horizontal

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axis represents for attribute performance (satisfaction). The means of attribute performance
and attribute importance, often employed in practice, divide the matrix into four quadrants
(Chen & Ko, 2015). Each quadrant relates to a specific characteristic, is described, according
to Chen and Ko (2015), as follows:

• Attributes fall into Quadrant I stands for key areas that need to be focused on
improvement;
• Attributes fall into Quadrant II are the strength of the firm;
• Attributes fall into Quadrant III are lower prioritized and cause no threat to the firm;
• Attributes fall into Quadrant IV are overly focused by the firm and should be reflected.
Resources should be reallocated, especially to improve attributes in Quadrant I.

Fig. 2.: The Importance-performance analysis model (revised from Chen & Ko, 2015, p. 274)

Global Communication Complexity

Anderson (2003) argues that one important tool to enhance firm’s growth is its network.
Hofstede (1980) explains that if a company has an extensive network that reaches out to
potential markets this will help the firm to gain insight in the local market-behaviour as well
as understand the barriers that a market entry may conclude. Moreover, Füller (2006) argues
that applying the Kano model to gain understanding of tourists' attitudes with regard to the
factors of environmental influences can result in more intense outcomes. Doole and Lowe
(2012) describe five different environmental influences that a company should take into
consideration when entering new markets; social & culture, legal, economic, political and
technical.

• Social & cultural influences may be language, religion and values that the country
possesses;
• Legal aspects may be laws and restrictions of communication that are specifically
adapted for the local-domestic country;
• Economic environmental influences is related to trade barriers and the local-domestic
infrastructure for trading;
• Political factors that a company should take into consideration is the attitude of the
government towards trading;

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 • Technical influences is the development of the technological infrastructure of the local-
domestic as well as the host-domestic country in which the firm may take advantage of
in order to reach the target audience.

When entering a new country market, it is important to keep the psychic distance in mind,
which implies the range of the culture differences between local-domestic and host-domestic
country (Johanson & Vahlne, 1977; Oviatt & McDougall, 1994). Johanson and Vahlne (2009)
argue further that it is by reducing the psychic distance that a firm is able to reduce the
uncertainties that the market entry entails. Madsen and Servais (1997, p. 566) however explain
that as the mobility of the population increase across nations “it creates a much higher number
of potential employees with a competence to communicate with, understand and operate in
foreign cultures”.

Methodology
In this exploratory qualitative research, a case study is conducted to gain a better understanding
of role of the Kano model for OTAs. Based on consensus in the literature the authors have
created a framework of the Kano model including critical notes from previous scholars. In
order to investigate the role of the Kano Model when a third party is involved in the sales, this
study chooses to focus on a case study of three online travel agency sites. Secondary data were
used, in the form of analysis of scientific papers, literature reviews and published research
articles that have been peer reviewed. Information about the case companies is collected based
on the theoretical framework. Data is collected from two main databases; Web of Science and
Scopus. The search words that has been used are; Kano model, Online Travel Agencies and
online tourism and the use of an additional keyword has been necessary to clarify the search
result (table 2).

Database Search Word Keyword Document Type Results

Web of Science ‘Kano Model' tourism Articles 13

Scopus ‘Kano Model' tourism Articles 118

Web of Science ‘Online Travel Agencies' - Articles 95

Scopus ‘Online Travel Agencies’ - Articles 134

Web of Science ‘Online Tourism' e-commerce All 95

Scopus ‘Online Tourism' e-commerce All 31

Table 2. Overview of data search results

The reviews are retrieved from Trustpilot.com, a website that is established to publish reviews
for online businesses. The site posts roughly 500,000 new reviews each month. In this paper,
50 reviews for each case company are gathered from the most recent reviews posted on
Trustpilot.com on 13th of February 2017. The study provides a content analysis with gathered
customer reviews.

TravelBird
TravelBird was founded in 2010 and operates on eleven different country-markets within
Europe. The company provides a connection between the hotel or service provider and the local
market (travelbird A, 2017-02-13). They offer worldwide holidays that may include just the
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hotel, tourist attractions or an all-inclusive package deal through their partners. TravelBird do
not mention that the third party is responsible for the delivery of the vacation (travelbird B,
2017-02-13).

TravelBird receives most reviews about their partner. In general, the reviews are good, however
the reviews about the partner decrease their ratings by a small margin. Customers talk about
good customer service and good prices, but mostly they mention that they had a good stay at
the hotel (table 3). (Trustpilot, A., 2017)

22 reviews of 28 reviews of the Summary of the reviews

TravelBird partner

4,64/5 stars 4,57/5 stars good service, good prices, great hotel
Table 3.: A summary of the results of extracted reviews about TravelBird

Hotels.com
Hotels.com was founded in 1991 and is a subsidiary to Expedia. This website provides their
customers with information and allows them to compare prices of hotel deals worldwide.
Hotels.com offer their services in 34 different languages. (hotels.com, 2017-02-13)

Hotels.com gets most reviews that are about their bad customer service, hidden fees and that
they fail to deliver the “best price guarantee”. They got a few reviews that talks about the
service of the hotel as well, which decrease the overall rating of the customer satisfaction (table
4). (Trustpilot, B., 2017)

41 reviews of 9 reviews of the Summary of the reviews

hotels.com partner

2,24/5 stars 2/5 stars bad customer service, hidden fees, failing to deliver
on "best price guarantee"
Table 4.: A summary of the results of extracted reviews about hotels.com

Booking.com
Booking.com was established in 1996, is part of the Priceline Group. The website provides
competitive prices for various type of property, from five-star luxury suites to small family-
run bed and breakfasts. Booking.com is available in more than 40 languages. Average
1,200,000 room nights are reserved from the website (booking.com, 2017-02-13).

Booking.com mostly receives reviews about their service and the quality of the website.
However, a few reviews are about the hotel and decrease the overall ratings (table 5).
(Trustpilot, C., 2017)

47 reviews of 3 reviews of the Summary of the reviews

booking.com partner

3,55/5 stars 3/5 stars very good experience, very bad service. comments are
mostly about the OTA
Table 5.: A summary of the results of extracted reviews about booking.com

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Discussion
OTAs is operating to make the booking process easier for the consumers (Patel, 2016). It is
possible to see a trend that each of the case companies operate in several languages, they are
using local-domestic employees to decrease the communication barriers (travelbird A, 2017;
booking.com, 2017; hotels.com, 2017; Doole & Lowe, 2012). There is different traits in how
the OTAs are trying to efficient the process and it is possible to categorise them in accordance
to the Kano model from the 150 reviews in this study. The reviews were divided in two
categories; reviews that were about the actual service of the OTA, and reviews about the
partner’s services. As we can see in the results, it happens that customers think that it is the
OTA that is also delivering the actual holiday. This happens especially in the case of
TravelBird, where they do not have any information about the external partners except
information about the hotel. The reviews show in general that the partners decrease the overall
customer satisfaction with the OTA. This implies that the OTAs have a difficulty managing
the full customer satisfaction. However, below the the elements that OTAs can control of the
customer satisfaction will be categorised in according to the Kano model. This study includes
qualitative results, therefore, the IPA model, which is inferred from quantitative results (e.g.
surveying a sample of customers’ perceptions of a service) will be discussed further regarding
managerial implication for OTAs in the conclusion.

Attractive Quality Elements

Customers in all case companies comments that the OTAs have many attractive offers on their
site (Trustpilot, A., B., C., 2017). Talking about the amount of offers exposed on the OTAs’
websites, this element may be classified as an attractive quality element as it causes satisfaction
when completed but does not cause any dissatisfaction if not achieved (Kano et. al., 1984).

One-dimensional Quality Elements

Several customers, in all OTA-reviews, mention good or bad customer service (Trustpilot, A.,
B., C., 2017). This may be accounted for as an one-dimensional quality element as it causes
satisfaction when achieved and dissatisfaction when not achieved (Kano et. al., 1984).
According to Kano et. al. (1984), another one-dimensional quality element may be when the
firm do not meet promises. For example, Hotels.com have recived a certain amount of reviews
regarding not fulfilling the promises they’ve made regarding “best price guarantee” (Trustpilot,
B., 2017). Another element that has been commented on by reviewers regarding all case
companies is the quality of the partners, customers expect a certain degree of quality according
to their own perceptions and are these fulfilled the customer will be satisfied and vise versa
(Trustpilot, A. B. C., 2017).

Must-Be Quality Elements

In the case of hotels.com several reviews were about the payment method that they use. The
customers mention that their credit card details were used in an illegal manner and that they do
not trust the OTA (Trustpilot, B., 2017). The payment security may be accounted for as a must-
be quality element because if the service work the customers do not mention it, but when it
does not work this will result in dissatisfaction among the customers (Kano et. al., 1984). This
also agrees with Tontini et. al (2013)’s argument that low performance of must-be quality
element leads to dissatisfaction of customers.

Indifferent Quality Elements

Kano et. al. (1984) explain that the indifferent quality element indicates service quality element
irrelevant to customer satisfaction when not satisfying customer's expectation. Customers do
not care whether they are fulfilled or not. This study is based on already existing reviews which
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mentions directly positive or negative feedbacks regarding the service of the OTA, and
indirectly also the partner. Therefore, it can be inferred that there are not any indifferent quality
elements found from the analysis.

Reverse Quality Elements

Patel (2016) describes that the booking process has changed from offline to online, as many,
especially in the older generation, may not always be so comfortable using online services it is
possible to say that OTAs is making it convenient for the customers through offering
comparison tools for several different tourism services on the same website. The reviews show
that some customers think that booking.com’s website is difficult to use, while others comment
on how easy it is (Trustpilot, C., 2017). To what extent the OTA is possible to provide a difficult
to use web-site may be accounted as a reverse quality element according to the Kano model, as
not all customers are alike and will have different knowledge in how to use different features
(Kano, 1979).

Conclusion
The OTAs are operating to make the booking process easier for the customers, as the booking
behaviour has changed from offline to online, and are decreasing the communication gap
between the host-domestic tourism companies and the customers. In one case of the case
companies within this study, the OTA is not clear in their communication that they are working
together with local partners which may lead to a misleading result when applying the Kano
model to their business as the customers are also reviewing the service provided by the partners.

This study has provided insight regarding what could be included in each elements of the Kano
model. Attractive quality elements may be related to the number of offers provided by the OTA.
As the one-dimensional quality elements are related to the categories in which the OTAs are
competing, these may conclude in 1) quality of the customer service, 2) promises made by the
OTA that wasn’t achieved (i.e “best price guarantee), and 3) the customers’ expectations of the
external partners. Other expectations that customers may have, that is crucial for the service, is
the must-be quality elements and may be the reliability in handling their private information
such as credit card information. The reverse quality elements for OTAs may for example be
the customer's’ perception of how easy the website is to navigate or the complexity of the
booking procedure. These elements are specific from the experience and knowledge of the
customer and may be difficult for the OTA to manage in individual cases. The indifferent
quality elements are parts of the OTAs’ services that the customers are not really
acknowledging, in order to study these elements, the OTA should list all the services elements
included and let their customers rank them in accordance to importance and performance.

In order to make a validated guide for managerial implications, a more in-depth study would
have to be conducted. An integration of the Kano model with the IPA, which is deducted from
quantitative study, would be needed to achieve ‘methodology advancement’ for the OTAs. For
instance, data from customer satisfaction questionnaire with pre-consuming measurements of
customer attribute importance are synthesized to construct a two-dimensional matrix. Besides,
it can be inferred from customer reviews data that OTAs usually receive dissatisfied feedback
regarding a third party is involved. Hence, OTAs should employ a stricter quality check on the
partners to improve customer satisfaction. This study suggests for future research to discuss
how to limit the misunderstandings between tourism firms and the OTAs as well as decrease
‘over-promised' value by the OTAs. Nonetheless, further research is needed in order to
strengthen assessment of the Kano quality elements and improve customer satisfaction
measurement tools and techniques.
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