Cheng's Travel Case Study

It was lunch time in Singapore when a long time customer, Mr Sam Cheng, walked into the offices of Sunset Airlines and began to raising his voice angrily. He was not happy. When employees at the travel agency offered to help, he brushed them aside. He wanted to see the owner to demand his three airline tickets for a flight that night. Mr Cheng had planned to travel to Australia with his family to plan the wedding of his son in Melbourne. His son, who completed his graduate program in social sciences at RMIT University, is working in Melbourne. Hehadinvited his parents to visit and help him with planning his wedding, which would be takingplace in a few months time.

As Mr Cheng exclaimed to the owner, Mr Tarlok who had walked out of his office to meet him. "I have been getting tickets from you for the past five years, and now you make me lose face with my future daughter-in-law. If I can't leave tonight, I will have to postpone the wedding". Mr Tarlok kept his cool in front of his employees and tried in vain to calm the customer down. Mr Cheng was being unreasonable. He wanted his tickets, and nothing else mattered.

The origin of this service encounter happened a few years ago when one of Mr Cheng's business acquaintances, was himself a customer of Sunset Airlines, referred by Mr Cheng to the travel agency. Sunset Airlines is a full-service travel agency that primarily serves the corporates in Singapore and countries in the Asia Pacific region, including China and India. Through referrals Sunset Airlines had developed a significant proportion of business in the retail sector over the years with barely any promotion.

Sunset Airlines' owner Mr Tarlok, worked for Timothy Burns, a global full-service travel agency, before establishing his own business. He was with them for a decade in their Kuala Lumpur, Malaysia office. He was involved with both corporate and retail clients during that time. At Timothy Burns, Mr Tarlok experienced the peril of retail travel business in the Asian markets and has been deliberate in his attempt to target the corporate marketplace with Sunset Airlines. As with other businesses in the high-context Asian region, retail referrals are preferred. Small and medium-scale businesses welcome referrals, which provide higher marginal revenues with little effort.

Yet many small business owners, like Mr. Tarlok, deal with referrals such as Mr. Cheng's with trepidation. The reason is cultural, in that consumers develop the bonds of trust with business owners and thus expect to be served without regard for their own deficient payment habits. The situation with Cheng's dealing with Sunset Airlines is evidence of this phenomenon. Consumers expect prompt and high-quality personal service but seem reluctant to make timely payments. For various reasons, consumer expect unsecured credit for services. They seldom skip town without paying, but delayed payments has an effect on a business's cash flow situation.

At the same time. In such high-context cultural societies, repeated pleas or threats for payment are frowned upon and most business owners such as Mr. Tarlok, feel uncomfortable doing so anyway. In the past, he's tried having his employees do the job with mixed success. Loyal customers sometimes feel insulted by the approach. Travel business is personal in the region; therefore, a high level of satisfaction among customers in a prerequisite for building loyalty. Meeting or exceeding customer expectations is the name of the game.

The travel industry has been hit in recent years on several fronts. The economic downturn across the world, including in Southeast Asia, a rise in aviation fuel prices, and competition among the major carriers and the low-cost airlines have had a profound negative affect on the travel business. Additionally, the pricing pressure from airline websites, third-party consolidator sites, and meta-search sites such as Agoda.com, it istherefore easy to understand the list of the problems that contribute to travel agencies being under pressure.

Since travel site switching costs are negligible, younger customers tend to price-shop online and thus are harder to attract. Older travers, on the other hand, are generally in need of additional help with their travel arrangements and tend to value relationships they've cultivated through the years. They are not very price sensitive and thus patronizing businesses such as Sunset Airlines providing ahigher level of service and satisfaction.

But given his earlier experiences with Timothy Burns, Mr. Tarlok also feels that some consumers take advantage of this cultural peculiarity in Asia. Both his corporate accounts and retail clients are generally satisfied with his company, and 80% of them are repeat buyers. His own surveys and audits of travel-related blogs and forums confirm his belief that the company is doing well in terms of satisfaction ratings. He is fond of adding a personal touch to client interactions. For instance, he and his employeeswill call clients once they reach their destinations to make sure they have pleasant trips and reassure them of help if they needed. Concurrently, he uses these personal calls to subtly upsell local attractions or other arrangements they might need. Older clients appreciate this level of attention and often refer their friends and family to the business.

But he has had enough with a few consumers such as Mr. Cheng. He feels that their service expectations of Sunset Airlines are high, yet their reimbursement for services rendered are protracted beyond reason. Customers' vision of what they want from businesses is sometimes clouded by their unrealistic expectation of the level of service they feel they deserve within a cultural context. Mr. Cheng is not likely to delay a payment to service providers in Australia, a country he visits often. Other customer also tends to exhibit similar behaviors to different degrees, and Sunset Airlines has had to resort to intense coaxing to get paid. Legal maneuvers are rarely utilized, as they might backfire in the high-context culture of Singapore. This time, he wants to take a stand, yet not in a manner his customers or employees might find aggressive. He has to set the correct tone and be a role model that his employees expect. Mr. Tarlok wishesthat his employees will take a stand in similar situations in the future.

QUESTION ONE

Using examples from one or more airlines of your choice, explain how situational variables can be effectively used to create better customer experience and value.(12.5 marks).

QUESTION TWO

Final stage of consumer decision making involves post-purchase processes, customer satisfaction and brand loyalty. Elaborate the likely post-purchase consumer behavior (both negative and positive) of travel services such as Sunset Airlines. (12.5 marks).

QUESTION THREE

"But he (Mr Tarlok) has had enough with a few consumers such as Mr. Cheng. He feels that their service expectations of Sunset Airlines are high, yet their reimbursement for services rendered are protracted beyond reason. Customers' vision of what they want from businesses are sometimes clouded by their unrealistic expectation of the level of service they feel they deserve within a cultural context."

Do you agree or disagree with this statement? Explain your answer.(12.5 marks).

QUESTION FOUR

Covid19 has changed the way people live and travel. Evaluate how consumers' perception and attitude towards airline travel has been changed as result of Covid19? In your answer, explain how companies like Sunset Airlines could reposition themselves after Covid19 is over. Use concepts from "perception" and "attitude" to answer this question. (12.5 marks).

QUESTION FIVE

Part A: Explain the three types of reference group influences. Giving examples, explain how reference group influences can be used by Sunset Airlines to dissuade consumers like Mr Cheng who "raised his voice in anger" (7.5 marks).

Part B: Explain the notion of "invisible hand of culture" in play within the context of this case study. (5 marks).