Principles Of Service Operations & Organization

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Service quality is defined as the outcome of a comparison between the expectations of a service and what is perceived to have been received (Li, 2012). The need for service quality in hospitality has grown exponentially, which has led to customers to have higher expectations for the quality of service than ever before. This paper seeks to evaluate the service quality of the hotels in Yunnan province of China. Despite the growth in Yunnan’s hotel industry, there has been a considerable gap in customer satisfaction and service quality. Some common service failures include: poor communication between departments, lack of enforcement in regulations and standards and low service quality. This research uses six main objectives to evaluate the relationship between service quality and customer satisfaction. The six main objectives are:

  • Service quality has a positive effect on customer satisfaction.
  • Customer satisfaction has a positive effect on customer loyalty.
  • Service quality has a positive effect on customer loyalty.
  • Customer loyalty has a positive effect on brand image.
  • Service quality has a positive effect on brand image.
  • Customer satisfaction has a positive effect on brand image.

This study was conducted using four variables, which are service quality, customer satisfaction, customer loyalty and brand image. The variables are defined as follows:

Service quality is defined as an assessment of how well a delivered service conforms to the client’s expectations (service quality, 2019).

Customer satisfaction is defined as the degree of satisfaction provided by the services of a company as measured to the customer’s perception of the outcome to the customer’s expectations (Kotler & Keller, 2009, pp. 164).

Customer loyalty is defined as a repeat purchase behavior which is influenced by a customer’s favorable attitude towards a service. (Kotler & Keller, 2009, p. 786).

Brand Image is perceptions about a brand reflected as associations existing in the memory of the consumer (Kotler & Keller, 2009).

This research uses both qualitative and quantitative analysis to achieve unbiased results. The qualitative data was gathered using face to face interview with the customers and the quantitative was gathered via questionnaires, which was analysed using Structural equation modelling (SEM). The quantitative analysis of the data reveals the following results:

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  • The service quality has a positive effect on customer satisfaction by a factor of 0.91
  • The customer satisfaction has a positive effect on customer loyalty by a factor 0.30
  • The service quality has a positive effect on customer loyalty by a factor of 0.69
  • The customer loyalty has a positive effect on brand image by a factor of 0.75
  • The service quality has an adverse effect on brand image by a factor of 0.18
  • The customer satisfaction has a positive effect on brand image by a factor of 0.43

(Li, 2012)

This shows that each of the variables have interrelated effects on each other. The qualitative analysis is conducted to find out the following objectives: customers’ perception of target hotel, customers degree of satisfaction, customers’ loyalty to the hotel, brand image of the hotel in the customers mind, change in customer perception with change in service quality and to know the influence of service quality on customer satisfaction and loyalty. The study shows that the customers are satisfied with the hotel due to the high understanding of customer needs by the hotel resulting in high service quality. The service quality was the main deciding factor for customers to stay loyal to the hotel. The brand image was primarily dependent on good standards of service which increased their overall level of satisfaction resulting in a good brand image of the hotel. Finally, it was concluded that the service quality was a crucial factor in evaluating the loyalty to the hotel in the eyes of the customer. It was also found that customer satisfaction is influenced first rather than loyalty with respect to an increase in service quality.

The study was implemented in short term and long-term strategies for the hotels. Short term changes were implemented based on four variables. For service quality, the hotels took two approaches, which were providing better facilities like gymnasium to the guests and improve the standards of service like faster service, courtesy and employee service skills. To improve customer satisfaction, the hotels were asked to optimize their services according to customer needs. To create customer loyalty, the hotels must design the services that add value to the customers’ experience and fulfil their expectations so that they remain loyal towards the hotel and keep revisiting. All the factors mentioned above contribute to the building a better service experience for the customer, which leads to a better brand image for a hotel. Long term implementations of the study required the hotel to have an improved employee training and have value-added service trainings and language service. This helped create a welcoming environment for the guests and reduce the hierarchical nature of the organization for the employees. There is a certain limitation to this study such as the limited sample size for the survey and the interview, the static nature of the data compared to the dynamic needs of the customer and the limited scope of the literature. The research could be further improved by considering more variables and increasing the sample size.

Reaction Statement

In our opinion after reading ‘Service Is Power: Exploring Service Quality in Hotel’s Business, Yunnan, China by Xiangyu Li’ we agree with the ideas presented by the author in this research paper. The six main objectives and the four main variables of the service quality are presented in a precise manner and are sufficiently supported by the quantitative and qualitative analysis. However, we believe that the customers' perception of service quality is not limited by the four variables described in this paper. In a dynamic industry like hotels, there can be many factors that can affect the service quality and through further research and analysis, we can use the learnings to improve customer’s experience further.


The primary outcome of this study shows that even a slight change in service quality can have a positive or negative impact on a customer's experience. From a customer's perspective, the service quality of a hotel influences their satisfaction, loyalty and brand image. A positive experience will encourage the customer to return and build a positive brand image. Poor service quality destroys the perception of brand image and turns away the guest. The qualitative results were based on the data collected from 8 individuals. This data was evaluated, and the following six objectives were obtained. To understand the customer's perception of the hotel the customers were encouraged to assess the service components of the hotel. Good attitude of the staff and facilities provided by the hotel were some of the vital components of service quality improvement. The customer satisfaction is directly proportional to the service quality provided by the hotel. The environmental factors like clean environment, location, noise levels and sanitation levels play an essential role in building customer loyalty towards the hotel. The visual imagery, sense of security and unique services provided by the hotel conveys a positive brand image. A visible improvement in the service quality of the hotel creates a loyal customer, which further leads to a positive brand image for a hotel. The quantitative results utilize the 412 responses to the questionnaire (Li, 2012). This data was then interpreted using the Structural equation modelling (SEM) technique, which demonstrates a linear relationship between service quality and customer satisfaction. The service quality, tangible, reliability, responsiveness, assurance, empathy and technical quality are indicators of service qualities, as well as important factors to customer satisfaction, customer loyalty, and the negative indications about brand image.

Importance of the research

This research is critical in determining the key aspects of service quality that influence customer service expectation, customer satisfaction, customer loyalty and perception of brand image. Service quality is a developing concept which requires in-depth study however, this study focuses on limited aspects of this concept. It provides us with a better understanding of the customer needs and expectations. The hotels can use this research in improving their service quality in crucial areas which effects customer satisfaction, customer loyalty and perception of brand image. This will result in better management and service trainings for the employees ensuring higher returns for the hotel and loyal customers.


This research proves that there is a direct correlation between customer service and satisfaction. Loyalty and brand image are secondary outcomes of excellent customer service. The findings of the research were in congruence with the objectives put forward by the author. Furthermore, the application of this research in Yunnan hotels proved that improvement in service quality had a significant effect on customer satisfaction, customer loyalty and perception of brand image. The research could be further improved by improving the analysis techniques and variables such as the phycological behaviour of the customer and its relation to customer satisfaction. Some of the phycological behaviours include empathy, customer value, awareness and safety. To increase the scope of the study, different hotels in different countries and diverse group of people can be considered. With the advancement of technology the data can be collected in a faster and more accurate way helping make our research more in-depth and dynamic.


  1. Li, X. (2012). Service Is Power: Exploring Service Quality in Hotel’s Business.
  2. service quality. (2019, January 22). Retrieved from
  3. Kotler, & Keller. (2009). Marketing Management (13th ed.). New Jersey: Pearson Education International.
  4. Harris, L. C., & Goode, M. M. H. (2004). The four levels of loyalty and the pivotal role of trust: a study of online service dynamics. Journal of Retailing, 80, 139-158.
  5. Jing, T., & Baiju, Z. (2009). Study on the strategies of internal service recovery in hospitality. Journal of Harb University of Commerce, (5), 113-116. (May 10, 2009)
  6. Zeithaml, V. A. (1988). Consumer perceptions of price, quality, and value: a means-end model and synthesis of the evidence. Journal of Marketing, 52(3), 2-22.
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