JOURNAL OF TOURISM AND SERVICES

Issue 24, volume 13, ISSN 1804-5650 (Online)

www.jots.cz

Perceived Value, Inter-functional Coordination, and Strategic Adaptation: The

Perspective on Selecting Travel Agencies from School Travel Plan

TangChung Kan
National Kaohsiung University of Hospitality and Tourism, Kaohsiung, TAIWAN (ROC)

Received: 10 March 2022. Revision received: 5 April 2022 Accepted: 21 June 2022

Abstract
School travel plan (STP) is a significant tourism market for travel agencies; this study explores how travel
agencies with customer orientation ability, product advantages, and high-quality service performance
affect customer perceived value and the strategic adaptation of travel agencies from a resource-based
view by moderating the effect of inter-functional coordination. Proportionate stratified sampling was
used to select teachers and administrators from junior and high schools who participated in graduation
trip selection for three years from Taiwan, and 183 samples were collected for analysis; likewise, PLS-
SEM was adopted to verify the measurements and test hypotheses in the research. The scientific results
indicate that travel agencies with customer orientation, product advantages, and high service performance
positively impact customer perceived value. Inter-functional coordination has a moderating effect on
customer perceived value and travel agency strategic adaptation. Travel agencies have customer-oriented
characteristics that can clearly understand customers’ needs and prioritize them. Constantly reviewing
customers’ needs and enhancing their perceived value can lead to increased sales volume in STP market.
Effective communication and coordination are the critical effects of cooperation between travel agencies
and other tourism industries, and travel agencies should quickly respond to schools and provide tourism
products that meet STPs’ needs in Taiwan.

Key Words: customer orientation, product advantage, service performance, perceived value, strategic
adaptation, inter-functional coordination.

JEL Classification: L83, Z32

Reference: Kan, T.C. (2022). Perceived Value, Inter-functional Coordination, and Strategic Adaptation:
The Perspective on Selecting Travel Agencies from School Travel Plan. Journal of Tourism and Services,
24(13), 236-255. 10.29036/jots.v13i24.366

1. Introduction

School travel plan (STP) may provide a significant source of physical activities and travel experience
for students in many countries (Buttazzoni, Clark, Seabrook, & Gilliland, 2019; Deligianni, Papadoulis,
Monsuur, Quddus, & Enoch, 2021; Jing, Wang, Chen, & Zha, 2018); the STP for graduation travel is an
important market for travel agencies (Hinckson, 2016; Villanueva-Meyer et al., 2015; Wen et al., 2021);
The plan was developed through collaboration among the school, community, and local tourism business
(Deligianni et al., 2021; Jing et al., 2018; Mammen, Stone, Buliung, & Faulkner, 2015), tourism product
advantage is an important condition for customers to choose the travel agency process. If travel agencies
have innovative leadership or leading product advantages, there will be more opportunities to stand out
among other competitors in choosing a cooperation process (Tari et al., 2020; Uslu & Akay, 2019). Travel
agencies with the above capabilities will become a priority for customers to choose as the cooperative
alliance. Therefore, the product advantage provided by travel agencies will affect customers’ willingness
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to cooperate, and the coordination of travel agencies’ internal organizational functions will also affect
customers’ perceived value and strategic adaptation.
Taiwan is an island-type country. The STP of junior and high school students is domestic tourism.
likewise, based on cost considerations, the STP is mainly a comprehensive group inclusive tour (Sung,
Hsiao, Huang, & Morrison, 2021; You, Chen, & Su, 2021), that is, by entrusting a travel agency to plan
the overall itinerary, to complete the good memories of the student’s study period; from the perspective
of travel agencies, facing an increasingly competitive tourism market, travel agencies must use unique
products and services to compete with other competitors (Zhang, Li, Liu, Shen, & Li, 2021). Cooperation
between travel agencies and tourism-related industries is extremely important in the process of
competition in the tourism market. When choosing partners, travel agencies should not only pay attention
to the uniqueness and advantages of tourism products but also choose partners with excellent
communication, cooperation, and interaction as possible. Cooperation and sharing resources create
market value and unique tourism products.
The gaps between the research with prior studies, In the service process of travel agencies, sales
staff are frontline employees who have contact with passengers and deliver services. Previous studies
have explored factors that influence the selection of partners in agencies (Cheng et al., 2020; You et al.,
2021; M. Zhang & Zhang, 2020). However, STP focused on the perspective of group tour competencies,
and few have focused on travel agencies’ competencies for school travel. To have leadership in the STP
market, one should establish lasting competitive advantages and a business model (Huang, 2018). In
addition, there is a relative lack of research exploring travellers’ service experiences and perceptions of
the travel industry (Brun et al., 2020). By strengthening service experience and perceived value, travel
agencies can further grasp customers’ willingness to purchase travel products, improve their service
performance, and make schools acknowledge travel agencies’ image.
Travel agencies play a role as a provider of tourism products and services in the tourism industry,
which places greater emphasis on service than other industries (Yildirim et al., 2018). Previous studies
have highlighted that to measure the factors that affect customers’ purchase intentions effectively (Chang
& Lee, 2020; Wu, Lin, & Lin, 2019), the theory of service performance and perceived value were used to
measure the enterprise’s overall service performance and identify service items for improvement and
priorities. In other words, service performance and perceived value seem to be critical issues influencing
customers’ purchase intentions. Other research on customers’ choice of travel agencies focused more on
the supply-side analysis of sales services (Chen, Weiler, Young, & Lee, 2016; Li, Hua, Fu, & Liu, 2021;
Simat, Blesic, Bozic, Avramovic, & Ivkov, 2018), and seldom explored how travel agencies’ service
performance, product advantages, and customer orientation affect the choice of travel agencies from a
customer perspective.
Travel agencies and their collaborating partners form a cooperative alliance, which is divided into
two basic conditions: division of labour and coordination (Yeh et al., 2016). Every travel agency has
existing environment and mechanism factors that affect the service model. When travel agencies interact
with other tourism-related industries, the interactive relationship of cooperative alliances is divided into
communication, adjustment, trust, and conflict resolution (Chang et al., 2019). Effective communication
and coordination between the two parties will be vital factors affecting the perception of travel agencies.
Understanding when conflicts occur is a normal phenomenon of interaction, and when problems arise,
two parties can work together to propose solutions and participate in the coordination of various policies.
The purpose of this research will analyse how travel agencies with customer orientation ability,
product advantages, and high-quality service performance of travel agencies affect the perceived value of
travel agencies on STP; an STP value famulus in the research, data collection from selection experienced
academic faculty and administrator of junior and high schools in Taiwan. A structural equation modelling
(SEM) approach was adopted in statistical analysis and hypotheses testing; finally, we discuss the finding
of the study including how the coordination of travel agencies’ organizational functions affects
customers’ perceived value and the adaptation of travel agencies’ strategies for STP.
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2. Theoretical background and literature review

2.1. Resource-based view

The resource-based view (RBV) is defined as the organization’s business activities in the market,
and its competitive advantage comes from internal core capabilities and resources (Huang, 2017;
Dobrovic et al., 2019). The competitive advantage is due to the heterogeneity and immobility of the
resources possessed by the organization. In other words, when the internal resources possessed by the
organization are valuable, scarce, not easy to imitate, and not replaceable, this leads to excellent resilience
and competitive advantages (Della Corte & Aria, 2016); a firm’s customer orientation initiatives have an
impact on firm’s knowledge creation and innovation (Pekovic, Rolland, & Gatignon, 2016; Sa, Choon-
Yin, Chai, & Joo, 2020). The core competencies and resources of an organization can be cultivated and
accumulated internally and acquired externally
The core value of the RBV is to identify, cultivate, and develop the organization’s unique resources,
and to link the organization’s competitive advantages and strategies (Hsiao et al., 2018). Tourism research
related to RBV included cultural heritage sites, cultural landscapes, events or festivals, it is regarded as
the core resource of tourism product advantages (Alonso, 2017; Nyanga, Pansiri, & Chatibura, 2020) and
destination tourism management (McDougall, Wagner, & MacBryde, 2019; Seyitoglu & Ivanov, 2020)
Organisational resources are the deeper and more basic core of strategic thinking, and how to integrate
resources to further create value to meet customers’ needs and take such needs as the orientation and the
performance of organizational development has become a fundamental issue (Camison et al., 2020; Sun
& Lee, 2019)(Campbell & Kubickova, 2020; Zhang, Ma, & Qu, 2018). Firms have unique resources to
form a competitive advantage, which helps to establish excellent product or service quality and
innovation, and further obtain customer responses, forming a positive cycle to maintain a competitive
advantage in the STP tourism market.
The RBV corrects the deviation of strategic logic thinking from the external environment of the
organization, discussing its competitive strategy from the resource viewpoint (Berenguer-Contrí et al.,
2020), The resource-based viewpoints out demonstrate the process by which companies identify specific
core capabilities from resources that can co-create customer value for their customers (Ceric,
D’Alessandro, Soutar, & Johnson, 2016). focusing on whether it has accumulated sufficient resource
advantages to establish its core competitiveness. In terms of small-scale organizations, the strategic logic
of the RBV is more legitimate (Campbell & Kubickova, 2020; Lin, 2016). Due to the lack of resources
and insufficient operational capabilities at the initial stage, organizations seek strategic cooperation and
alliances to combine external forces to solve the problem of insufficient resources.
In the process of STP choosing a cooperative alliance, novel resources are combined with the
operation of the organization and then internalized into travel agencies’ unique core resources (French,
Russell-Bennett, & Mulcahy, 2017; Wilke et al., 2019; Wong, Xu, Tan, & Wen, 2019). The
complementarity between the two parties becomes a creative synthesis, and the uniqueness of core
resources is the main factor that affects whether this cooperation can be maintained in the long term. On
the other hand, the complementarity of resources means that resources have a high degree of specificity.
With the increasing expansion of organization scale, the organization will inevitably be unable to grow
unrestrictedly due to limitations such as scale growth and time, and its growth process will inevitably
proceed in a gradual and path-dependent manner.

2.2. STP market in Taiwan

As a result of globalization and internationalization, the tourism market for young students in
Taiwan is divided into two categories: domestic tourism and outbound tourism (Lee, 2017). For students
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traveling abroad for purposes including learning experiences (Guachalla & Gledhill, 2019; Roberson,
2018). A working holiday that can make money and increase knowledge (Fang, Chien, & Walters, 2021;
Xu, Lo, & Wu, 2021), for students, traveling abroad can also experience the culture of different countries.
On the other, for middle school or high school students, domestic tourism is the mainstay due to
the pressure of further studies; previous research has pointed out that domestic tourism combining the
supply of leisure facilities with student leisure travel will encourage the market for student leisure travel,
STP focused on the perspective of group tour competencies, and few have focused on travel agencies’
competencies for school travel. To have leadership in the STP market, one should establish lasting
competitive advantages and a business model (Huang, 2018).

2.3. Customer orientation

Customer orientation is defined as the tendency of an organisation to listen to and meet customers’
needs. Customer-oriented organisations can clearly understand customers’ needs and provide products
or services based on customer standpoints. Organisations should focus on how to ensure customer
satisfaction and product or service satisfaction while pursuing maximum revenue (Tuan et al., 2019). In
a cooperative alliance, suppliers should devote efforts to solving problems for alliance partners to meet
the requirements and customers’ needs. In the process of cooperation, the satisfaction of alliance partners
is a crucial factor in the operation of suppliers. When alliance partners are satisfied with the cooperation,
they have a higher chance of repurchase intention and ignoring other competitors (Xie et al., 2020).
Travel agencies are not only service-oriented, but also customer-oriented. Previous studies have
stated that whether travel agencies can meet customers’ needs is based on their customer-oriented
thinking. Research has also evaluated whether travel agencies can clearly understand customers’ needs
and meet their needs as a priority goal. Travel agencies that are equipped with customer-oriented
characteristics can continuously self-monitor to maintain excellent service and realise their promises to
customers, formulate relevant strategies to create greater value, and at the same time attach importance
to after-sales service and continuous maintenance of customer satisfaction (Xie et al., 2020).

2.4. Perceived value

Perceived value is the difference between the benefits and costs those customers obtain from
products and services, and it is also used as the basis for purchasing decisions in the consumption process
(Gao & Bi, 2021; Kement et al., 2021). Customers’ perceived value is the antecedent of satisfaction with
travel agencies. To further realise customer buying behaviour, travel agencies must understand how
customers evaluate the value of products and services (Kim & Thapa, 2018; Luvsandavaajav & Narantuya,
2021; Unguren et al., 2021). The value perceived by customers is one of the key elements for the success
of travel agencies. Providing products or services with higher value than customers expect effectively
increases customer satisfaction.
Perceptual value can be divided into hedonic value and utilitarian value (Fang et al., 2016). Hedonic
value is defined as the personal feelings of comfort, motivation, or pleasure generated during the
consumption process. Utilitarian value emphasises the satisfaction of customers’ needs is fully achieved
in the consumption process, which is a task-oriented relationship (Ahn & Thomas, 2020). Customer
orientation is used in the consumption process between enterprises and customers. Enterprise sales staff
must meet customers’ needs as much as possible, enhance customers’ perceived value of products and
services, and then generate trust in the enterprise.
Previous research related to customer orientation and perceived value highlights that when an
enterprise has a customer-oriented concept (Sahi, Gupta, & Lonial, 2018; Tran & Vu, 2021) and focuses
on the inspection of customer needs, it can enhance the perceived value for consumers and increase sales

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(Prebensen & Xie, 2017). In the STP transactional relationship, travel agencies should pay more attention
to schools’ needs, maintain product and service consistency, and perfect after-sales service.

2.5. Product advantages

Product advantages include new product quality, features, technical performance, and ability to meet
customers’ needs, and are superior to those of competitors (Moir & Lohmann, 2018). The benefits an
organisation obtains from new products are the extent to which these are superior to competitors’
products in terms of quality, characteristics, technical performance, and the ability to satisfy
manufacturers. The literature states that in determining the value of products and services perceived by
customers, the price and cost will be estimated to measure the results of the benefits (Sainaghi et al.,
2019). Product advantages are the main basis for customers to make purchase decisions during the
consumption process.
Perceived value is the customer’s subjective judgement during the consumption process. It is defined
as product advantage or superiority, and further extends to evaluation of product advantages. Other
research has suggested that organisational innovation and product advantages have a positive impact on
organisational operating performance, and maintaining competitive products is the goal of developing
product advantages (Tsaur & Chen, 2018). What customers’ concern is utility and helpfulness brought
from the products. Therefore, enterprises should strengthen market research in intense competition, list
customer needs as product development goals, and develop products with new functions that cater to
customers.
Customers’ evaluation of products or services would be affected by the environment and experience
they are exposed to. Leadership innovation or leading product advantage provides customers more than
monetary value and more reasons to consume from a particular travel agency than other competitors
(Cheraghalizadeh & Tümer, 2017). Product advantages must be based on customers’ perceived value. In
the highly competitive tourism market, travel agencies have devoted efforts to developing their own travel
products to have better customer evaluations compared to their competitors.

2.6. Service performance

Service performance is the degree to which an organisation achieves its own objectives. It can usually
be discussed from different perspectives and is affected by the differences in operational levels and
strategies (Chou, 2019; Belas et al., 2020). Service performance is an indispensable and important
indicator of organisational operations. Previous studies present different opinions due to varying research
directions. Some research has suggested that service performance is the first condition that leads to
customer satisfaction. Other studies state that service performance is the result of customer satisfaction
(Wu et al., 2021; Onuferova & Cabinova, 2018; Unguren et al., 2021). Service performance and customer
satisfaction are two related concepts.
To effectively measure the factors that affect customers’ willingness to purchase tourism products,
previous research on service performance adopts the service performance and perceived value point,
discussing the methods used to measure the overall service performance of the travel agencies and
identifying service improvement projects and their priorities (Ye et al., 2019). Most of the relevant
research focuses on supply-side analysis, which affects customer purchase intention rather than real
demands. There is a lack of discussion on the connotation of customer service experience or service
perception value.
Enterprise service performance influences purchase intention through customers’ perceived value
toward the products and services. Other research has indicated that there is also a significant correlation
between service performance and perceived value (Bezerra & Gomes, 2019). For travel agencies, it is
necessary to improve brand image identification, employee education regarding customer service, travel
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products that meet customers’ needs, controlling service quality, and effectively responding to and
interacting with customers.

2.7. Strategic adaptation

Strategic adaptation is the actual act of pursuing a stronger competitive advantage by allying partners
with the same vision to invest capital, human or technical resources, share responsibilities and risks, and
engage in research and development in cooperation (Ahmadimanesh et al., 2019). Nowadays, increasing
numbers of organisations are beginning to develop outwards, looking for cooperation opportunities in
cross-industry alliances, hoping to create a double win market niche through the complementary
resources and technologies of partners. Organisations continue to launch diverse products and promote
the development of emerging industries under product diversification trends. Cross-industry alliances
and cooperation not only share resources and technologies, share development costs, and reduce market
uncertainty (Fong et al., 2018), but also propose innovative ideas from different perspectives and find
opportunities to enter the market, further increasing the attractiveness of the product to customers.
Strategic orientation is an organisational culture that can effectively enable organisations to create
and provide excellent value for customers, and it is also the belief that the organisation continues to
achieve excellent performance. Previous research indicated that when an organisation has a high degree
of strategic adaptation, it can create new products or services based on changes in the market or
customers’ needs, which will help improve product innovation and have a positive impact on
organisational performance. Other research has highlighted that travel agencies seek cooperative alliances
to strengthen the advantages of products and services, thereby enhancing consumers’ perceived value of
the travel industry and forming a virtuous circle of seeking cooperative alliances (Al-Aomar & Hussain,
2018).
Travel agencies have changed the previous business model from individual operations to seeking
alliance partners. Travel agencies and tourism-related industries can derive the greatest benefits through
each other’s advantages. Customers use the perceived value of products and services as the main decision-
making basis when choosing travel agencies.

2.8. Inter-functional coordination

Inter-functional coordination is regarded as the coordination of the functions and resource use of
various departments to innovate better respect and value for customers (Quintana-Deniz, et al., 2007;
Glas et al., 2019). Integrating functions and resource use can effectively develop an organisation’s
advantage, determine customer requirements, and provide products and services in a collaborative
manner (Khodadadi, 2016; Nguyen et al., 2018). In conclusion, inter-functional coordination emphasises
the interaction between various departments in the organisation, through the coordination and
cooperation of different departments, to provide products or services and create more benefits.
The prior study stated inter-functional coordination of firms can explain strategic adaptation
(Aggarwal & Wu, 2015; Chen, Kaul, & Wu, 2019; Ku, 2014) and service performance (Gurcaylilar-
Yenidogan, 2017; Ma, He, & Gu, 2021; Wan, Jiang, Qin, & Du, 2019); Furthermore, research shows
customer involvement led higher coordination cost but also show no direct positive impact on perceived
relationship quality (Albayrak, Caber, & Bideci, 2016; Gorur & Guzeller, 2021; S. Ma, Gu, Wang, &
Hampson, 2017); accordingly, the cooperation mechanism includes key performance indicator setting,
monitoring, and coordinating tasks across different organisations further to achieve the overall goal
(Buonincontri et al., 2017; Liu, Xiao, Fan, & Zhao, 2019; Mariani, 2016).
In the contents of STP, an alliance relationship is a continuous evolutionary process (Li et al., 2019).
Each cooperation process includes repeated agreements, commitments, and executions, extending the

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evaluation of customers’ perceived value under the existing environment and mechanisms between
schools and travel agencies.

3. Aim, Methodology, Methods, and Data

This study aimed to examine how travel agencies with customer orientation ability, product
advantages, and high-quality service performance of travel agencies affect Strategic adaptation with travel
agencies on STP.
This research explores how travel agencies, which are customer-oriented and possess the advantages
of tourism products and excellent service performance, affect customers’ perceived value and their
strategic adaptation in an intensively competitive market from a RBV by moderating the effect of
interfunctional coordination. The research model is depicted in Figure 1.

Figure 1. Research Model

Customer orientation Inter-functional

coordination
H1
H5
Product advantage H2 Perceived value Strategic adaptation
H4

H3
Service performance

Source: own elaboration

From the perspective of RBV, travel agencies should ensure schools can obtain products with
consistent quality and value-added services and trust that the travel agencies are committed to providing
excellent products and travel services for students, thereby enhancing the perceived value. This study,
therefore, formulates the following hypothesis:

Hypothesis 1: Customer orientation of travel agencies is a positive effect on customers’ perceived

value of travel agencies.

Therefore, when choosing travel products, products with unique attributes and competitiveness are
superior and can fulfil school needs. This constitutes the characteristics of product advantages and
accomplishes the evaluation of schools’ perception value. We therefore formulate the following
hypothesis:

Hypothesis 2: The product advantages of travel agencies is a positive effect on customers’ perceived
value of travel agencies.

In addition, travel agencies should provide education courses for frontline service employees to
improve service quality. In addition to providing excellent services, efforts should be made to clarify
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customer problems and recommend appropriate travel products that fit customers’ needs. We, therefore,
formulated the following hypothesis:
Hypothesis 3: The service performance of the travel industry is a positive effect on customers’ perceived
value of travel agencies.

When customers believe that choosing a particular travel agency can obtain better products and
value-added services, they are willing to spend more time and work hard to provide high-quality services.
It also has a positive impact on the travel agencies’ operations. Once travel agencies have been evaluated
by customers that leads to positive perceived value, they tend to prioritize service innovation and flexible
operations and are committed to market orientation. Agencies need to identify ways to cooperate with
other alliances to develop high-quality products and value-added services and make effective use of
advantages to provide customized products and services to create more opportunities in the highly
competitive tourism market. We, therefore, formulate the following hypothesis:

Hypothesis 4: Customers’ perceived value of travel agencies is a positive effect on strategic adaptation.

In the process of cooperation and interaction between school and travel agencies, effective
communication and coordination will be the key to affecting cooperation between the two parties.
Schools can use this interaction to evaluate whether the capabilities of travel agencies can meet their
needs. When problems occur, travel agencies and alliance partners can work together to solve problems,
propose solutions, and participate in coordinating various policies, and provide products to realize the
value and service of the travel agencies to schools. The more stable and long-lasting the cooperation
relationship with alliance partners, the better the cooperation and benefits. Therefore, the following
hypothesis is proposed:

Hypothesis 5: Interfunctional coordination moderates the effect of customer perceived value on the
strategic adaptation of travel agencies.

3.1. Data collection

The samples have three years’ experience of participation in graduation trips from junior and high
schools in five municipalities from Taiwan. We mailed the two research questionnaires by post (one is
for selecting experienced academic faculty, and the other is for administrators randomly) to each school
and invited those who participated (experienced academic faculty and administrator) to select STP for
three years to take part. The survey was conducted from February to April of 2020. In total, 1,200
questionnaires were sent, and 183 questionnaires were returned (a return rate of 15.25 percent). The
characteristics of the samples are listed in Table 1.

Table 1. Sample description (n=183)

Samples n %
Male 93 50.8
Gender
Female 90 49.2
21–30 25 13.7
31–40 41 22.4
Age
41–50 56 30.6
51–60 53 29
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Over 61 8 4.3
Less than 5 years 43 23.5
6–10 years 37 20.2
11–15 years 34 18.6
Years of experience
16–20 years 42 23
21–25 years 18 9.8
Over 26 years 9 4.9
University/College 165 90.2
Education
Graduate school 18 9.8
Source: own elaboration

3.2. Measures

We developed a research model based on the research purpose, theoretical basis, and related
literature. The measures used to implement the model of the structure in the study were adopted from
prior studies. We invited two professors with a background in travel industry management to translate
and review the appropriateness of the questionnaire. After the Chinese questionnaire was formed, 20
high school teachers and travel agency professionals were invited to conduct the pre-test, with minor
wording changes tailored to improve content validity. After the pre-test, the questionnaire was formally
distributed after confirming that the content could be clearly understood without difficulty in answering.
The items were rated on a five-point Likert scale ranging from 5 = strongly agree to 1 = strongly
disagree. The constructs were measured using a multi-item scale, as indicated in Table 2.

Table 2. Scale development

Factors Item Reference

Customer 1. I think this travel agency will constantly monitor commitment and Dabrowskie
orientation orientation to meet customers’ needs. t al. (2019)
2. I think this travel agency can clearly understand my needs.
3. I think meeting customers’ needs is an important goal of this
travel agency.
4. This travel agency’s strategy is driven by beliefs about how to
create greater value for customers.
5. This travel agency measures customer satisfaction systematically
and frequently.
6. This travel agency gives close attention to after-sales service.
Perceived value 1. This travel agency provides me with good products and value- Ponte et al.
added services at reasonable prices. (2015)
2. This travel agency sacrifices some time and effort for me to
provide good service.
3. Compared with other travel agencies, it is wise to choose this
travel agency.
Product 1. The products of this travel agency are superior to the competitive Tsai et al.
advantage products to meet my needs. (2005)
2. The quality of tourism products of this travel agency is better than
others.
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3. The quality of tourism products of this travel agency has unique

attributes or competitive features.
Service 1. This travel agency can help me when I need. Chuang &
performance 2. I think this travel agency can explain the features and benefits of Liao (2010)
tourism products to overcome my objections.
3. I think this travel agency can point out and relate travel products
features according to my needs.
4. I think this travel agency can approach me quickly.
5. I think this travel agency can suggest travel products that I might
like, but I did not think of.
6. This travel agency asks good questions and listen attentively to
find out what I want.
7. This travel agency is friendly and helpful.
Strategic 1. This travel agency values service innovation. Ku et al.
adaptation 2. This travel agency values operational flexibility. (2011)
3. This travel agency values innovation of service marketing strategy.
4. This travel agency is committed to market-oriented strategy.
Interfunctional 1. In the interaction with this travel agency, they regularly visit Chuang
coordination current and prospective customers. (2018)
2. In the interaction with this travel agency, communication between
alliance partners is the key to affecting customers’ perceptions.
3. The ability of travel agency works with alliance partners to meets
the needs of target market.
4. In the interaction with this travel agency, customer value and
service are created.
5. This travel agency works hard with alliance partners to solve
problems thoroughly and jointly.
Source: own elaboration

4. Results

4.1. Measurement model

The survey was conducted during the COVID-19 pandemic. The travel agencies have been severely
affected, suffering from unpaid leave, bankruptcy, and other conditions. A total of 183 valid
questionnaires were returned, which exceeded the minimum sample size requirements of partial least
squares-structural equation modelling (PLS-SEM) of at least 30 (Hair et al., 2017). Therefore, PLS-SEM
was adopted to verify the measurements and test hypotheses. The Bootstrap re-sampling method was
adopted to detect the significance of the hypothesis path in the research model, which aimed to explain
theoretical relationships in exploratory research (Hair et al., 2017) and helped explain the relationship
between factors (Hair et al., 2019).
Factor loadings provide useful metrics for research models. The reliability of each item can be
ensured by evaluating factor loading, with a value higher than 0.6 indicating a high degree of reliability;
values below 0.5 should be ignored (Tenenhaus et al., 2005; Wetzels et al., 2009). All values are greater
than 0.5, which indicates that the research model is highly dependable. The verification results are listed
in Table 3.
Composite reliability (CR) is confirmed when the combined reliability is greater than 0.7, which
means that the item has good internal consistency for the research construct and has better reliability
performance (Chin, 1998). Cronbach’s α is also one of the indicators of reliability. When Cronbach’s α is
greater than 0.7, the research item has better reliability (Choshaly & Mirabolghasemi, 2019). Furthermore,
the Heterotrait-Monotrait ratio requires that the value is under 0.9 (Henseler, 2017), as seen in Table 4.
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In addition, convergence validity should be ensured when multiple indicators are used to measure
the structure. Convergence validity can be evaluated by average variance extracted (AVE), and the AVE
of all constructs should be greater than 0.5, which means that it has sufficient convergence validity. The
AVE of individual constructs reflects the difference measured by the studied constructs. If the AVE is
less than 0.5, the squared difference of the construct measurement is less than the measurement error
(Ta, Bui, Canh, Dang, & Do, 2020), indicating the validity of a single index construct is controversial. As
presented in Table 5, the test results of the relevant indicators have reached the indicator level, and the
research constructs have combined reliability and convergent validity

Table 3. Factor loadings

Factor Item Mean STD Loading t value

CO1 3.60 0.541 0.841 36.123
CO2 3.54 0.474 0.881 51.799
Customer orientation CO3 3.49 0.499 0.866 38.782
(CO) CO4 3.49 0.498 0.867 42.149
CO5 3.49 0.479 0.878 47.854
CO6 3.50 0.463 0.886 53.873
PA1 3.87 0.493 0.870 24.150
Product advantage
PA2 3.88 0.393 0.920 67.442
(PA)
PA3 3.79 0.369 0.929 71.680
SP1 3.97 0.572 0.821 26.556
SP2 3.95 0.586 0.810 25.869
SP3 3.89 0.598 0.801 22.822
Service performance
SP4 3.68 0.520 0.854 36.724
(SP)
SP5 3.68 0.513 0.858 39.840
SP6 3.62 0.485 0.874 35.987
SP7 3.90 0.535 0.845 31.573
PV1 3.74 0.498 0.867 35.342
Perceived value (PV) PV2 3.57 0.450 0.893 48.001
PV3 3.80 0.496 0.869 37.448
IC1 3.57 0.702 0.712 12.305
IC2 3.93 0.666 0.746 16.040
Interfunctional
IC3 3.74 0.540 0.842 29.852
coordination (IC)
IC4 3.84 0.457 0.889 46.077
IC5 3.91 0.481 0.877 47.343
SA1 4.19 0.729 0.685 13.753
SA2 3.91 0.856 0.518 6.377
SA3 4.32 0.618 0.786 23.242
SA4 4.22 0.562 0.827 33.921
Strategic adaptation (SA)
SA5 4.22 0.563 0.827 32.926
SA6 4.16 0.608 0.794 23.114
SA7 4.15 0.608 0.794 23.240
SA8 4.10 0.599 0.801 26.161
Source: own elaboration

Table 4. Heterotrait-Monotrait at ratio

Constructs CO PA SP PV IC SA
Customer orientation
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Product advantage 0.34

Service performance 0.36 0.27
Perceived value 0.25 0.29 0.48
Interfunctional coordination 0.67 0.27 0.35 0.26
Strategic adaptation 0.56 0.56 0.37 0.52 0.53
Source: own elaboration

Table 5. Descriptive statistics of constructs

Factor CR rho_A Cronbach’s α AVE

CO 0.949 0.937 0.936 0.757
PA 0.933 0.897 0.892 0.822
SP 0.943 0.934 0.929 0.702
PV 0.908 0.849 0.849 0.768
IC 0.908 0.891 0.874 0.666
SA 0.915 0.907 0.893 0.578
Source: own elaboration

Discriminant validity should also evaluate the square value of AVE, which should be greater than
the correlation coefficient between the different constructs in the research framework (Gorondutse,
Arshad, & Alshuaibi, 2021; Gorondutse & Hilman, 2019). The diagonal lines in Table 6 represent each
construct. The square roots of AVE are larger than the correlation coefficients of other constructs,
indicating that there are differences between the model constructs and have sufficient discriminant
validity.

Table 6. Correlation among constructs and the square root of the AVE

Factor Mean STD CO PA SP PV IC SA AVE

CO 3.52 0.86 (0.87) 0.757
PA 3.85 0.78 0.712 (0.90) 0.822
SP 3.81 0.83 0.808 0.711 (0.84) 0.702
PV 3.70 0.83 0.773 0.737 0.732 (0.88) 0.768
IC 3.80 0.76 0.765 0.709 0.710 0.778 (0.82) 0.666
SA 4.16 0.69 0.386 0.451 0.372 0.355 0.455 (0.76) 0.578
Source: own elaboration

4.2. Structural model

The goodness of fit (GOF) in PLS-SEM can be measured by loading and R-squared (R2) as
indicators. When measuring each single indicator, R2 exceeding 0.25 can be regarded as higher GOF and
predictive accuracy (Hair, Sarstedt, Matthews, & Ringle, 2016). According to the analysis results, R2 is
higher than 0.25, so the research structure has high GOF and predictive accuracy.
The collinearity between each construct will be assessed in the research, the variance inflation factor
(VIF) was used as an evaluation indicator. If VIF is closed to 3.3, there is a collinearity problem between
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each construct (Chen, Wang, Zhang, & Zhai, 2018). As reported in Table 7, the maximum VIF of the
model is 2.59, and the VIF value among the various constructs does not exceed the maximum index of
3.3. There is therefore no problem of collinearity in this study.
In addition to R2, different indicators were also used for testing. The Q2 value is a predictive
relevance indicator. The larger the Q2 value, the higher the predictive relevance between the construct
and its path. If it is less than 0, predictive relevance is not present (Shihab, Hidayanto, & Putra, 2021). Q2
value is calculated by blindfolding. Through sample repeat measurements, some data on the dependent
variable can be deleted. The deleted data were seen as missing values and analyzed using the remaining
data points. The analysis results predict the deleted data point and understand the difference between the
removed and predicted values. The Q2 value is 0.113, which are all greater than zero, and also
demonstrates that the construct of this research should have a predictive correlation with its path.
Through the above structural model analysis results, customer orientation and product advantage
are found to significantly impact perceived value. Therefore, hypotheses H1 and H2 are both supported.
There is no significant relationship between service performance and perceived value, but the perceived
value has a considerable influence on the cooperative alliance. This research reveals the moderating
effects of inter-functional coordination between customers’ perceived value and travel agencies’ strategic
adaptation. Therefore, H5 also has a significant impact. The test results are presented in Table 7 and Fig
2.
Table 7. Hypotheses testing

β t Results
H1 Customer orientation →Perceived value 0.393 4.147** Supported
H2 Product advantage →Perceived value 0.329 3.996** Supported
H3 Service performance →Perceived value 0.181 1.881 Not Supported
H4 Perceived value →Strategic adaptation 0.055 10.501*** Supported
Perceived value * Interfunctional coordination →Strategic Supported
H5 0.164 2.605*
adaptation
*p < 0.05, **p < 0.01, *** p < 0.001
Source: own elaboration

Figure 2. The results of hypotheses testing

Customer orientation Inter-functional

coordination
4.147**
R2=0.679 R2=0.248
2.605**

(.164)
Product advantage Perceived value Strategic adaptation

3.996** 10.501***

(.055)

1.881
Service performance (.181)

Source: own elaboration

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5. Discussion

This study utilised a reliable multidimensional measure to support the application of resource-based
theory to travel agencies to obtain competitive advantages. The results indicated that travel agencies with
customer orientation, tourism product advantages, and excellent service performance all have a
significant positive impact on the evaluation of customers’ perception of value. Travel agencies have
customer-oriented characteristics that can clearly understand customers’ needs and prioritise them

5.1. Theoretical implications

This study applies RBV to STPs’ research through empirical research; customer orientation, product
advantage, and service performance supplementary description as the core competencies of travel
operators, constantly reviewing customers’ needs and enhancing their perceived value can lead to the
increased adaption of strategic collaborating between school and travel agencies; This is quite helpful for
the development strategy and marketing research of the tourism industries. Besides, Inter-functional
coordination plays a moderate role, this means that the two sides of the cooperation will effectively affect
the cooperation relationship through the adaptation of the interaction. That is, compared with other
competitors, travel agencies own tourism products and services that can better meet schools’ needs and
provide more than the value of the money they pay, and obtain more benefits so that schools can trust
the travel agencies to be better than others.

5.2 Practical implications

First, customer orientation of travel agencies will positively affect customers’ perceived value of the
travel agency, which is supported by our results (t=4.147** p<0.01). which is like prior research, such as
Sahi, Gupta, & Lonial (2018) and Tran & Vu (2021). Travel agencies should fulfil their promises to
customers, attach importance to after-sales service, and support customer satisfaction. Agencies can use
regular customer satisfaction surveys to understand the operation shortcomings that need improvement
and the advantages of continuous maintenance. Daily calls and communications received by the customer
service department should be scrutinized to understand customers’ problems and service procedures
improved to increase product and service competitiveness.
Second, the results support (t=3.996** p<0.01) that product advantages positively affect perceived
value of customers, which was also consistent with Moir & Lohmann (2018) studies. From the customers’
perspective, to examine product advantages, frontline service employees must observe the changes in
customer demand and provide immediate feedback internally. Travel agencies and related parties should
continue to create product advantages that meet customers’ needs. When customers obtain products and
services that exceed their expectations, this improves the positive perceived value further to increase sales
volume and revenue. The travel agency should cooperate with other travel industry players to observe
market trends and provide innovative products in a timely manner in response to the changes in market
and customer needs. Furthermore, agencies can set up market research departments to understand the
market structure and plan business strategies to help achieve business goals.
Third, the results support that service performance of the travel agency positively affects customers’
perceived value (t= 1.881 p>0.01) is not supported in the research; the reason may be causes another
selection conditions in STP; however, a travel agency’s service performance is to provide a full range of
services to efficiently improve the speed of STP operations and respond to school’s demand. Travel
agencies with high service performance usually have a formidable team that can cope with a significant
work capacity. Service employees are the first point of face-to-face communication with STP teams, and
agencies should continue to educate service employees and establish service process operation manuals
to avoid negligence and maintain service consistency.
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Fourth, customers’ perceived value of the travel agency significantly affects its strategic adaptation
(t=10.501*** p<0.001). In comparison Buttazzoni et al., (2019) works, when STP teams think that
choosing a particular travel agency will enable them to obtain better products and services, it highlights
the importance of service innovation and flexibility. The industry should be committed to providing
products and services that meet consumer needs and build a positive cycle. It is necessary for agencies to
actively seek out cooperation with other tourism actors and make effective use of the advantages of both
parties to provide products and services that meet customers’ needs.
Finally, this study revealed that interfunctional coordination moderates the effect of perceived value
and strategic adaptation (t=2.605* p<0.01). The type of alliance includes cooperation with the aviation,
hotel, catering, and entertainment industries/sectors. The alliance can also be a formal or long-term but
non-consolidated partnership that links tourism industry activities, which is more diversified and can
create many different service innovations. The coordination among the functions of the travel agency is
organised by different cooperative alliances. The functions and resources in the alliances must be
coordinated, and the advantages of the products sold in cooperation among agencies must be used to
provide innovativeness under current market trends.

6. Conclusions

Perceived value is the difference between customers’ benefits and costs when they obtain products
and services. It is also one of the key factors affecting the success of travel agencies. Travel agencies’
service performance directly affects purchase intention through customers’ perceived value. Travel
agencies should quickly respond to schools and provide tourism products that meet STPs’ needs.
Continually educating frontline employees to provide excellence and friendly services can effectively
encourage schools to trust those travel agencies that are committed to providing excellent products and
services.
Travel agencies with customer-oriented characteristics make customers feel they attach importance
to their needs and create greater product value. Travel agencies should evaluate customer satisfaction via
continuous prompt self-monitoring to maintain excellent service. When schools believe that a particular
travel agency can provide better products and value-added services and is willing to spend extra time and
effort to meet their needs, it positively impacts the travel agency’s operation. It encourages them to find
a way to develop a cooperative alliance to provide high-quality products and services further. Under the
customers’ perception of evaluating the interaction process between the travel agency and cooperative
alliances, the agency is motivated to provide products and services based on demand in a timely manner,
and whether there is an effective communication method to solve problems together to meet the needs
of the STP market. The cooperative alliance between travel agencies and other tourism suppliers to
deliver better product and service quality, and the alliance should be committed to solving STPs’
problems and satisfying needs.
When facing increasing competition in the STP market, travel agencies should maintain flexible
tourism product adjustments and gather food, clothing, housing, transportation, and entertainment-
related tourism products for a package sale, allowing STP to assemble their itineraries according to their
needs. For STP teams, travel agencies can also quickly adjust or reduce the itinerary according to STPs’
needs.

6.1. Limitations and future research

The COVID-19 pandemic has impacted the global tourism industries, and travel agencies are facing
the acceleration of online transactions and the polarisation of organization size and product volume. The
survey was conducted during COVID-19, and many schools stopped graduation trips, which led to
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sampling difficulty and affected the number of samples returned. As a result, further research should
expand the samples to reduce the research bias. This research is only aimed at school graduation trips the
research object, and future research should make further efforts to clarify other types of STP groups to
analyze the impact of diverse STP groups on the travel agency's perceived value evaluation model and
the strategic adaptation and functional adjustment.

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Brief description of Author/Authors:

TangChung Kan; Associate Professor

ORCID ID: https://orcid.org/0000-0003-0712-9838
Affiliation: Associate Professor, Department of Travel Management, National Kaohsiung University of
Hospitality and Tourism, No.1, Songhe Rd., Xiaogang Dist., Kaohsiung City, 81271, Taiwan (R.O.C),
www.nkuht.edu.tw.
Email: [email protected]
Dr. Kan is an Associate Professor, Department of Travel Management, National Kaohsiung University
of Hospitality and Tourism (NKUHT), Taiwan, R.O.C. He received his Ph.D. degree from the Institute
of China and Asia-Pacific Studies (ICAPS), National Sun Yat-sen University (NSYSU). His research
interests include Travel industry service quality, Customer relationship management, Tourist psychology
and behavior, Travel service industry human resource management, Regional travel competitive
advantage and strategy, Tourism development pattern, and strategy across the Taiwan strait. His papers
have been published in British Food Journal, Tourism and Hospitality Management, Journal of Quality
Assurance in Hospitality & Tourism, International Journal of Culture, Tourism and Hospitality Research,
Anatolia: An International Journal of Tourism and Hospitality Research.

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