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    ACKNOWLEDGEMENT

    I am heartily thankful to my boss, Mr. Imtiaz Hussain

    Baloch whose encouragement, guidance and support from

    the initial to the final level enabled me to get re-start my

    education and to develop an understanding of the subject.

    I offer my regards and blessings to all of those whosupported me in any respect during the completion of the

    project.

    Last but not the least; I would like to thank my family:

    my parents for giving birth to me at the first place and

    supporting me spiritually throughout my life.

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    Abstract

    The aim of this study was to identify how customer satisfaction affects business

    processes and service delivery within hotels and how it interacts with strategic issues

    confronting hotel managers.

    Customer satisfaction, a term frequently used in marketing, is a measure of how

    products and services supplied by a company meet or surpass customer expectation.

    Customer satisfaction is defined as "the number of customers, or percentage of total

    customers, whose reported experience with a firm, its products, or its services (ratings)

    exceeds specified satisfaction goals.

    Continuous improvement in a management context means a never-ending effort to

    expose and eliminate root causes of problems. Usually, it involves many incremental or

    small-step improvements rather than one overwhelming innovation

    Noor Saleem Khan

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    http://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Marketing
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    Table of Contents

    1. Acknowledgment 2

    2. Abstract 3

    3. Introduction 5

    i. Customer satisfaction 5

    ii. Continuous improvement 7

    4. PRACTICAL STUDY

    i. Scope of the Stud 13

    ii. Research Methods and Data Collection 14

    5. SWOT ANALYSIS 16

    6. Conclusion 17

    7. Recommendation 17

    8. Refernces 18

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    INTRODUCTION

    Customer satisfaction

    Customer satisfaction, a term frequently used in marketing, is a measure of how

    products and services supplied by a company meet or surpass customer expectation.

    Customer satisfaction is defined as "the number of customers, or percentage of total

    customers, whose reported experience with a firm, its products, or its services (ratings)

    exceeds specified satisfaction goals." In a survey of nearly 200 senior marketing

    managers, 71 percent responded that they found a customer satisfaction metric very

    useful in managing and monitoring their businesses.

    It is seen as a key performance indicator within business and is often part of a Balanced

    Scorecard. In a competitive marketplace where businesses compete for customers,

    customer satisfaction is seen as a key differentiator and increasingly has become a key

    element of business strategy.

    Within organizations, customer satisfaction ratings can have powerful effects. They

    focus employees on the importance of fulfilling customers expectations. Furthermore,

    when these ratings dip, they warn of problems that can affect sales and profitability.

    These metrics quantify an important dynamic. When a brand has loyal customers, it

    gains positive word-of-mouth marketing, which is both free and highly effective.

    Therefore, it is essential for businesses to effectively manage customer satisfaction. To

    be able do this, firms need reliable and representative measures of satisfaction.

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    http://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Balanced_Scorecardhttp://en.wikipedia.org/wiki/Balanced_Scorecardhttp://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Balanced_Scorecardhttp://en.wikipedia.org/wiki/Balanced_Scorecard
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    A business ideally is continually seeking feedback to improve customer

    satisfaction

    It's not a straight forward science however, as customer satisfaction will vary from

    person to person, depending on a whole host of variables which may be both

    psychological and physical. The challenge for companies in recent years has been to

    measure these perceptions. Measurement usually makes use of a feedback survey of

    some kind. Customers are asked to respond to a set of questions or statements using a

    4 or 5 point scale. The customer completes the survey by evaluating the service they

    have received in terms of their perception and expectations. Companies can compare

    the completed surveys with previous surveys to see if they are improving or getting

    worse, or benchmark their satisfaction survey results with that of other companies. The

    ultimate aim of measuring customer satisfaction must be to act on the informationgathered, close the "gaps" between the customer's perception of service and the actual

    service provided. Recent thinking by leading customer service gurus such as Dr Ken

    Blanchard concludes that customers should not be merely satisfied they should be

    delighted. That's one more challenge for companies who claim to have achieved 100%

    customer satisfaction.

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    Continuous improvement

    Continuous improvement in a management context means a never-ending effort to

    expose and eliminate root causes of problems. Usually, it involves many incremental or

    small-step improvements rather than one overwhelming innovation. From a Japanese

    perspective continuous improvement is the basis for their business culture. Continuous

    improvement is a philosophy, permeating the Japanese culture, which seeks to improve

    all factors related to the transformation process (converting inputs into outputs) on an

    ongoing basis. It involves everyone, management and labor, in finding and eliminating

    waste in machinery, labor, materials and production methods.

    The Japanese word for continuous improvement, kaizen, is often used interchangeably

    with the term continuous improvement. From the Japanese character kai, meaning

    change, and the character zen, meaning good, taken literally, it means improvement.

    Although kaizen is a Japanese concept, many U.S. firms have adopted it with

    considerable success by combining the best of traditional Japanese practices with the

    strengths of Western business practice, in other words, by merging the benefits of

    teamwork with the creativity of the individual. Some refer to its implementation in the

    West as lean manufacturing since, when combined with the principles of just-in-time(JIT), kaizen or continuous improvement forms the foundation for the concept of lean

    manufacturing.

    HISTORY OF CONTINUOUS IMPROVEMENT

    Following the defeat of Japan in World War II, America wanted to encourage the nation

    to rebuild. As with the Marshall Plan in Europe, General MacArthur asked a number of

    leading experts from the U.S. to visit Japan and advise them on how to proceed with the

    rebuilding process. As history would have it, one of these experts was Dr. W. Edwards

    Deming. Deming was a statistician with experience in census work, so he came to

    Japan to set up a census. While in Japan, he noticed some of the difficulties being

    experienced by some of the newly emerging industries. Many Japanese manufacturers

    were faced with huge difficulties stemming from a lack of investment funds, raw

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    materials, and components, and from the low morale of the nation and the workforce.

    Based on his recent experience in reducing waste in U.S. war manufacture, he began to

    offer his advice.

    By the mid-1950s, he was a regular visitor to Japan. He taught Japanese businesses toconcentrate their attention on processes rather than results; concentrate the efforts of

    everyone in the organization on continually improving imperfection at every stage of the

    process. By the 1970s many Japanese organizations had embraced Deming's advice

    and were very quickly enjoying the benefits of their actions. Most notable is the Toyota

    Production System, which spawned several business improvement practices utilized

    heavily in Japan, including JIT and Total Quality Management (TQM).

    Despite the fact that much of the foundation of continuous management and otherJapanese concepts originated in the U.S., Western firms showed little interest until the

    late 1970s and early 1980s. By then the success of Japanese companies caused other

    firms to begin to reexamine their own approaches. Hence, kaizen or continuous

    management began to emerge in the U.S. concurrent along with the increasing

    popularity and use of Japanese techniques such as JIT and TQM. In fact, continuous

    improvement is a major principle of and a goal of JIT, while it is one of the two elements

    of TQM (the other is customer satisfaction). In some organizations, quality circles have

    evolved into continuous improvement teams with considerably more authority and

    empowerment than is typically given to quality circles. In fact, management consultants

    in the West have tended to use the term kaizen to embrace a wide range of

    management practices primarily regarded as Japanese and responsible for making

    Japanese companies strong in the areas of continual improvement rather than

    innovation.

    KAIZEN ATTITUDES NECESSARY FOR IMPLEMENTATION

    Most Japanese people are, by nature or by training, very attentive to detail and feel

    obligated to make sure everything runs as smoothly as possible, whether at work or at

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    home. This attitude enhances the functionality of kaizen. However, this is not typically

    the case in the West. To encourage the kaizen attitude, organizations require a major

    change in corporate culture; one that admits problems, encourages a collaborative

    attitude to solving these problems, delegates responsibility and promotes continuous

    training in skills and development attitudes.

    The driving force behind kaizen is dissatisfaction with the status quo, no matter how

    good the firm is perceived to be. Standing still will allow the competition to overtake and

    pass any complacent firm. The founder of Honda has been quoted as saying, "In a race

    competing for a split second, one time length on the finish line will decide whether you

    are a winner or a loser. If you understand that, you cannot disregard even the smallest

    improvement." Although continuous improvement involves making incremental changes

    that may not be highly visible in the short term, they can lead to significant contributions

    in the long term.

    Organizational performance can improve from knowledge gained through experience.

    Lessons learned from mistakes mean those mistakes are less likely to be repeated,

    while successes encourage workers to try the same thing again or continue to try new

    things. While this learning process occurs throughout the system it is particularly

    important for accomplishing the long-term improvement associated with continuous

    improvement. In order for continuous improvement to be successful, the organization

    must learn from past experience and translate this learning into improved performance.

    Part of the learning process is trying new approaches, exploring new methods and

    testing new ideas for improving the various processes. So experimentation can be an

    important part of this organizational learning. Naturally, many of these worker-led

    experiments will fail, so it is important to recognize that there is some risk associated

    with this experimentation. If management is uncomfortable with risk, it may be reluctant

    to allow any real degree of experimentation. Obviously, management cannot risk

    disabling the production process itself or endanger the well-being of the workforce, but

    the complete absence of risk can reduce the vision of those involved in the continuous

    improvement process. Improvements will generally come in modest increments of

    progress. Therefore, management must recognize that some experiments will fail as

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    part of the learning process, and avoid the temptation to harshly judge the perpetrator

    as having new but unsuccessful ideas. Some even feel that it is critical to establish an

    environment that reinforces the notion that risk is good. Again, this involves consistency

    in management's attitude toward change and the empowerment of employees.

    The achievement of continuous improvement requires a long-term view and the support

    of top management. But it is also important that all levels of management actively

    support and become involved in the process. Proper support structures of training,

    management, resource allocation, measurement, and reward and incentive systems

    must be in place for successful adoption. This includes a willingness to provide financial

    support and to recognize achievements. It is desirable to formulate goals with the

    workers' help, publicize the goals, and document the accomplishments. These goals

    give the workers something tangible to strive for, with the recognition helping to

    maintain worker interest and morale.

    Kaizen also requires that all employees in the organization be involved in the process.

    Every employee must be motivated to accept kaizen as a means by which the firm can

    achieve a competitive advantage in the marketplace. All involved must push

    continuously at the margins of their expertise, trying to be better than before in every

    area. Japanese companies have been very successful with the use of teams composed

    of workers and managers. These teams routinely work together on problem solving.

    Moreover, the workers are encouraged to report problems and potential problems to the

    teams; their input is as important as that of management. In order to establish a

    problem-solving orientation, workers should receive extensive training in statistical

    process control, quality improvement, and problem solving.

    Problem solving is the driving force behind continuous improvement. Actually, it can be

    said to become a way of life or a culture that must be assimilated into the thinking of

    management and workers alike. Workers are trained to spot problems that interrupt, or

    have the potential to interrupt, the smooth flow of work through the system. When such

    problems do occur, it is important to resolve them quickly. Also, workers are trained to

    seek improvements in the areas of inventory reduction, set-up time and cost reduction,

    increasing output rate, and generally decreasing waste and inefficiency.

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    Unfortunately, workers in a continuous improvement system have more stress than their

    counterparts in more traditional systems. This stress comes not only from the added

    authority and responsibility but also from the fast pace inherent in the system. There is

    little slack built into the system and a continual push to improve. For this reason, firms

    stressing continuous improvement have suffered severe criticism from some labor

    unions.

    BENEFITS OF KAIZEN

    The benefits of continuous improvement manifest themselves in numerous ways. In an

    August 2004 article, Perry Flint examined how American Airlines' Tulsa MRO base has

    seen dramatic improvements after implementing continuous improvement initiatives.

    The base is the largest such facility in the world with some 8,000 employees and 3million square feet of docks and shops across 300 acres. Continuous Improvement

    teams in their components and avionics shop have helped reduce $1.5 million in

    inventory requirements while freeing 11,600 sq. ft. of shop space; repairing broken

    cargo door torque tubes in lieu of purchasing a new replacement has resulted in a

    savings of $250,000 per year; turnaround times for overhauls have improved more than

    38 percent, and replacing parts only as needed on the 737NG has resulted in a savings

    of $100,000.

    These improvements have been made possible through employee and union buy-in, the

    creation of employee-led work teams, and the realized benefits, after implementation, of

    employee-recommended improvements and streamlined procedures. The employee-

    driven improvements are integral to the success of the Continuous Improvement

    process. The changes are not force-fed by management, thus the employees are less

    resistant to the changes and recognize the necessity and value in implementing these

    alternative methods.

    A case history of the kaizen training implementation at Pace Micro Technology details

    the improvements after an update to a continuous improvement program, including an

    overhaul of intranet support for continuous improvement activities. These improvements

    resulted in 238 ideas registered on the continuous improvement intranet that were either

    in action or waiting for teams to begin work, after just nine months. Of those, 39 teams11

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    had completed their work and realized a financial benefit of 1.1 million. In addition,

    there was 71 percent involvement across the organization. Leadership at all levels in

    the organization has led to the success at Pace, with individuals modeling behaviors,

    encouraging and enabling others to act, inspiring a shared vision, challenging the status

    quo and taking risks.

    Through kaizen or continuous improvement, firms are able to produce better products

    and services at lower prices, thus providing greater customer satisfaction. In the long

    term, the final product will be more reliable, of better quality, more advanced, cheaper

    and more attractive to customers.

    PRACTICAL STUDY

    INDUSTRY: Hospitality Industry

    Hotel Visited: Al- Ikram Hotel and Pak Hotel Islamabad.

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    The objective of this study was to examine the ways different hotels used to get their

    customer satisfied with their services and how the how the work towards continuous

    improvement of their services.

    The areas of examination were:

    1. The business context of customer satisfaction and quality improvement.

    2. The role of customer satisfaction in quality improvement

    3. The impact of quality improvement on hotel guests.

    4. The role of quality improvement in the future.

    Scope of the Study

    The study will consider customer satisfaction as a factor external to the hotel and

    analyses Managers perceptions of the way their internal systems should and do

    respond to the requirements of customers. For the purposes of this study, the internal

    elements of the hotels, such as corporate culture, and operational processes, will be

    considered as a seamless whole which alters in response to the presence of customers.

    The impact of customer is examined from perspective of quality improvement.

    Translating need of customers into the requirements of the hotel is an important tool

    and technique to get the customer satisfaction. This technique also plays a big role in

    continuous quality improvement

    Managers were selected for the study as they are assumed to have the best broad

    overview of how their organisations are changing in response to the expectations of

    customers. They are responsible for establishing the strategic direction of their

    properties, which form the context in which decisions about customers satisfaction are

    made.

    Research Methods and Data Collection

    This part outlines the research objective, and describes the sample and data collection

    methods. It then details the data analysis process.

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    The aim of this research was to explore how managers use customers need in hotels

    for quality improvement and the way CUSTOMERS NEED affects business processes

    and service. In this research the impact of customers need was examined from the

    perspective of the hotels Managers. It is acknowledged that there are other

    stakeholders such as staff, guests, training providers and industry service providers

    whose views may differ; however, as the Managers have the responsibility for

    coordinating all functions within their hotel, they were the key informants.

    Hotels in the Sector G-7/4 Islamabad were chosen for these interviews because, hotels

    in these area of Islamabad are easily available to people.

    The purpose of this study was to understand how the Managers perceive customer

    demands within their business. Interviews allow the interviewee to describe the world as

    they experience it. As this study was exploratory, it was more appropriate to allow

    participants to determine their answers rather than supplying them, as is the case with a

    questionnaire or other closed instrument. Interviews as an extension of ordinary

    conversation allow for interaction to achieve richness and depth of understanding.

    Interviews are able to change in response to the interviewees answers.

    As these interviews had to provide information about the customers need context as

    perceived by Managers at a range of sites, a structured set of questions was prepared

    and applied to facilitate comparisons; This meant that a standard set of questions was

    used to ensure all the areas of interest were broadly covered, although these were not

    necessarily presented in the same order at each interview. In each interview, slightly

    different follow-up and probing questions, were used to clarify the context and meaning

    for the interviewee.

    The following were used as opening questions in each interview:

    1. What are the major issues facing your hotel business?

    2. In what ways does customers need affect the daily running of your business?

    3. Has this changed over the last five years? In what ways does customers need affect

    the services of hotel?

    4. What about the future? What trends do you see emerging?

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    These questions were tested in a small pilot study in Sitara Market Hotels before being

    used for the main sample. As the pilot interviews provided an adequate depth of

    information and were of an acceptable timeframe to both to the researcher and

    interviewees, the questions were carried forward into the main study unmodified.

    For continuous quality improvement through the method of translating the needs of

    customers in to the requirements of hotel, the managers and staff of the these hotels

    continuously used to ask their customer if they like their service and products. What is

    their level of satisfaction with the existing services of the hotel. What the need more to

    add in the service and product list.

    If the customers come out with some suggestion or if the customer indicates some flaws

    in the existing services the management either fixes the problem, improves it or makes

    changes if required.

    The improved and changed products and services are given active version with

    respective other customers. The progress analysis made on it whether the changes

    made was counted as quality improvement by the customer or not.

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    SWOT ANALYSIS

    Strengths:

    1. Most of the hotels are using valued traditional services even getting little support

    from modern technology.

    2. Cost effective and variety of foods are served

    3. Most of the hotels have very good locations having markets, parks and

    playground nearby.

    Weaknesses:

    1. Lack of proper interaction with foreign customers

    2. Staff with least education

    Opportunities:

    1. Growing demands of hotels and hospitality industry.

    2. Variety of services can be provided by hotels like wedding hall services, hall for

    seminar.

    3. Can use updated and online booking system.

    Threats:

    1. Prevailing Security Situation of the country

    2. Competitors

    3. Inflation

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    Conclusion

    There is growing evidence that hospitality ventures are not using customer satisfaction

    strategically and are not reaping benefits from it.This lack is mostly due to the trend of staffing of less educated persons in hotel

    industry. Further, most of the managers deliberately ignore the importance of their

    customer suggestion and needs. Considering the traditional methods of hotel

    management is not that fruitful in this age of competition.

    Translating the customer needs into the requirements of the hotel is a big challenge

    Properly focusing on the customer satisfaction can provide hospitality firms and hotels

    with a sustained competitive advantage, provided the issue of customers demand and

    satisfaction may be addressed properly.

    Recommendation

    To boost up their business hotel and hospitality industry must adopt the trend of use of

    emerging methods of quality improvements.

    The application of the translating the needs of customer into requirements has attracted

    a great amount of attention by the industry.

    Focus on the customer satisfaction must be maintained for continuous quality

    improvements. Further online system must be opted to exchange / share information

    with customers and others, because the information exchanging and sharing is a key

    part of business operations,

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    Refernces:-

    1. http://www.enotes.com/management-encyclopedia/continuous-improvement2. http://en.wikipedia.org/wiki/Customer_satisfaction

    3. http://www.google.com.pk/search?

    hl=en&sugexp=kjrmc&cp=24&gs_id=5p&xhr=t&q=fresco+customer+services&pq

    =translating+need+into+requirements+in&gs_sm=&gs_upl=&bav=cf.osb&biw=10

    24&bih=677&um=1&ie=UTF-

    8&tbm=isch&source=og&sa=N&tab=wi#um=1&hl=en&tbm=isch&sa=1&q=custo

    mer+satisfaction&pbx=1&oq=customer+satisfaction&aq=f&aqi=g10&aql=1&gs_s

    m=e&gs_upl=16153l25540l0l27130l13l13l0l9l9l0l592l1784l3-

    1.2.1l4l0&bav=on.2,or.,cf.osb&fp=13017d85f2ef798e&biw=1024&bih=677

    4. http://www.customerservicemanager.com/customer-satisfaction.htm

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    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