TUMAINI UNIVERSITY

IRINGA UNIVERSITY COLLEGE

FACULTY OF BUSINESS AND ECONOMICS

ASSESING THE INFLUENCE OF SERVICE

AUGMENTATION TO CUSTOMER SATISFACTION
A CASE OF BARBERSHOP INDUSTRY AT IRINGA TOWNSHIP

A proposal submitted in partial fulfilment of the requirement for the award of

Degree in Business Administration to the Faculty of Business and Economics,
Tumaini University – Iringa University College of Tanzania.
BY

ASRA A. WANDWI

March, 2011.

SUPERVISOR: MR. YOHANA TWEVE

TABLE OF CONTENTS
 ABSTRACT

Nothing influences customer satisfaction in barbershop industry like the quality of service

and how barbers respond to customer enquiries. Owing to that truth, this enquiry intends to

assess the influence service augmentation to customer satisfaction. The study will focus on

service augmentation, quality of service augmentation, and customer appreciation of

augmented services offered by barbershops.

Sample size of 60 respondents will be drawn from barbershops and customers, both

secondary and primary data (questionnaires and interviews) will be used as means for data

collection. Purposive and convenience sampling will be used to obtain people who constitute

the sample. The obtained data will be processed and analysed using SPSS (statistical

package for social sciences) then summarised in legible and simply understandable form.
 1.0 INTRODUCTION

1.1 Introduction

In this chapter an introduction of the research will be provided. The chapter will begin with

background concerning the research area which will also show the study’s importance

followed by statement of the problem that will guide the reader to the research purpose,

hypothesis and the research questions.

1.2 Background of the study

Barbering is an ancient profession that began long before the advent of barbershops. Over the

past 6,000 years, barbers have done much more than cut hair. They have served their

communities as prominent citizens, religious figures, trendsetters, and healers.

During the nineteenth century barbering was transformed by political, global, economic,

social and technological changes to create a new competitive environment to the barbershop

industry. Of all the changes, technology has dominated the revolution. As the barbershops

increase in numbers and the augmented services increases, the number of customers has

grown substantially. The flexibility in barbershop industry is claimed to be the base for a new

industrial structure that has uprooted the medieval foundations of new barbershop systems.

The admiration of barbershop has created opportunities as well as threats for the barbers. The

significant benefits of barbershop industry are intensification of competition between barbers

for customers and it also enables customers to easily compare the terms and conditions of the

services offered by different barbershops. This tends to raise customers’ expectations about

services (barber services) and could lead to dissatisfaction and make these customers more
prone to switching to other barber services. In order to minimize risks and maximize

opportunities, barbershops would have to satisfy customers through customer retention,

loyalty and appreciation in their places so as to gain profit from barber services. It has been

proved that increased customer satisfaction leads to additional sales, lower costs, more

endurable higher prices and free recommendations. However, not all customers are profitable.

Rationally, barbershops should actively create a setting which will be conducive to profitable

customers and in order to make sure that they are satisfied.

1.3 Significance of the Research Study

The study will be worth studying for various reasons:

i. The importance of barbershop industry in Tanzania.

Since the launching of barbershop industry operations, there are a good number of

benefits that the country got from it. A good number of employments will be offered

to people, both professionals and non-professionals. Furthermore, barbershop service

providers pay tax pay, hence boosting government revenue which in turn enables the

government in delivering the best services to its people.

ii. Usefulness of the research findings for barbershop service providers.

This research will have practical significance. Once barbershop service providers

understand the influence of service augmentation on customer satisfaction, they will

design their marketing strategies to cope with the challenges of keeping profitable

customers in the

virtual market place to enjoy such relevant advantages as enormous costs savings and

increased efficiency in transaction and delivery (Furash, 1999; Mols, 1998) and, more

important, profitability (Fornell and Wernerfelt, 1988; Anderson and Sullivan, 1990).
 iii. Little research has been conducted in this area.

There has been little or no effort at all to investigate service augmentation influences

on customer satisfaction in an organization particularly barbershop industry.

1.4 Statement of the Problem

Number of barbershops in the country has been increasing significantly. With the increased

competition, little service differentiation and little switching costs, barbershop service

providers in the country find it difficult to satisfy the existing customers.

With few satisfaction programs in the barbershop market, Customers have been shifting

from one barbershop to another hence making it difficult to determine what really influences

the customer satisfaction. Barbershop service providers have not yet investigated the

importance of service augmentation as an acting factor which influences customer

satisfaction.

Furthermore, Studies on how to successfully satisfy customers in the context of barbershop

industry remain extremely insufficient, Even though other studies have been done on

customer satisfaction; the field is still in an exploratory stage. In this perspective the objective

of this research is to assess the influence of service augmentation on customer satisfaction in

barbershop industry at Iringa Township.

1.5 Research Objective

The research topic ‘assessing the influence of service augmentation on customer

satisfaction among barbershop industry stakeholders in Iringa Township’ settled on the aim of

investigating how customer satisfaction in the scope of barbershop services in Iringa

Township is influenced by service augmentation.

1.5.1 General Objective

The objective of the study is to assess the influence of service augmentation on customer

satisfaction in barbershop industry in Iringa, Tanzania.

1.5.2 Specific Objectives

i. To determine the effect of service augmentation on customer satisfaction.

ii. To determine the effect of the quality of augmented service on customer satisfaction.

iii. To determine the effect of the value of augmented service to customer satisfaction.

1.6 Research Questions

i. What is the effect of service augmentation on customer satisfaction?

ii. What is the effect of the quality augmented service on customer satisfaction?

iii. What is the effect of value of augmented service on customer satisfaction?

1.7 Limitation of the study

Under this part the researcher will include the exact challenges anticipated from this study.
These include financial problems, time, and inaccurate data due to improper response from
respondents.
2.0 LITERATURE REVIEW.

2.1 Introduction

This chapter will presents the findings of relevant literature related to customer satisfaction

practices in any organization and will present the theoretical underpinning for this study.

The researcher will consult a wide range of literature review from different sources to get the

pertinent information supporting the proposed research problem. The sources include;

Tumaini University Iringa-college, EMERALD, Google book, etc.

Several studies have shown that customer satisfaction and service augmentation are strongly

related to each other. They stress that; service augmentation has positive effects on customer

satisfaction.

2.2 Customer Satisfaction

Definitions of customer satisfaction have been widely discussed from the view of many

researchers and organizations who increasingly desire to measure it. A group of researchers of

the Centre for the Study of Social Policy (2007) conceptualize that satisfaction is based on

the customer’s experience of both contact with the organization (the moment of truth) and

personal outcomes. According to these researchers, satisfaction can be experienced in a

variety of situations and connected to both goods and services. To another extent, these

researchers defined satisfactions as a “highly personal assessment” that is greatly influenced

by “individual expectations”. This definition views “individual” element as powerful force to

create satisfaction. Likewise, many researchers (Oliver, 1981; Brady and Robertson, 2001)

conceptualize customer satisfaction as an individual’s feeling of pleasure or disappointment

resulting from comparing a product’s perceived performance (or outcome) in relation to his

or her expectations.
2.2.1 Importance of customer satisfaction

Achieving customer satisfaction can lead to many benefits to an organisation, such as,

increasing purchase hence increasing sales, increasing number of customers thus winning the

market share and satisfaction at individual level will lead to satisfaction in organisational

level and economy as a whole. Therefore, high level of customer satisfaction will lead to firm

achieving its goals, maximising profits, and gaining a larger market share which will in turn

lead into the economy of the country at large.

2.2.2 Factors affecting customer satisfaction

2.2.2.1 Service delivery

Refers to how services are being delivered to customers. Decision involves delivery includes;

frequency, speed, consistency, and care for customer’s need and wants. Quick service

delivery is likely to increase customer satisfaction.

2.2.2.2 Service quality

Refers to the degree of excellence by an organisation in delivering services to its customers.

Service quality can be measured through operation efficiency, meaning if the organisation

will discover ways to produce services or product, stop waiting time, and replace

unsatisfactory services. It’s more likely for the customers to be satisfied.

2.2.2.3 Price

Price can be an indicator which affects the customer satisfaction. Customer tends to

dissatisfied by high price. However, highly satisfied are less price sensitive. But it’s obvious,

the lower the price, the more likely customers to satisfied.

2.3 Service Augmentation

Berry (1983) defined Service Augmentation as building extras into the basic service as a

relationship marketing strategy. In this way the service is differentiated from those of the

competitors. Using "extras" as part of the service product in order to differentiate the service

has also been discussed by Levitt (1983): "Having been offered these extras, the customer

finds them beneficial and therefore prefers doing business with the company that supplies

them" (pp. 9-10).

2.3.1 Service Augmentation in Barbershop Industry

My research will focus on service augmentation on barbershop services. Augmented services

are auxiliary services, but they fulfil another mission, that is, they do not facilitate the use of the core

service, but are used to increase the value or to differentiate the service from the services of

competitors. There are several augmented services in barbershops namely; hair shampooing, haircut

styles poster (fades, military cuts, and shaved heads), atmospherics (sofa seats, music system, TVs, air

conditions etc.), as well as facial.

2.3.2.1Advantages of Service Augmentation in Barbershop Industry

Conceptual Framework

A conceptual framework better known as a theoretical framework is defined by Miles and

Huberman (1994, p.18) as “something that explains either graphically or in narrative form,

the main things to be studied – the key factors, constructs or variables- and the presumed

relationships among them”.

The conceptual framework will show the interrelationship between the research questions

stated in the first chapter and the conceptualized theories in the second chapter.

A conceptual research model will show the hypothesized relationship that exists between

various aspects of service augmentation; existence of after haircut services (hair shampoing

etc.), haircut fashion posters, music system, sofa set, etc. on customer satisfaction in the

context of barbershop industry, will be shown in Figure 1.1. The relationship of the factors

(variables) is mapped with the headed arrows indicating the direction of one factor

(independent variable) to another (dependent variable).

Figure 1.1 graphical representation of conceptual framework.

AS Quality

Customer satisfaction
Service augmentation

AS Value

Source: Developed for this research

2.4 Empirical Literature Review
 1.0 RESEARCH METHODOLOGY

3.1 Introduction

In this chapter, the research methodology that will be used in the study is described. It also

presents the geographical area where the study is to be conducted; the target population,

research design and sample are described. The instrument used to collect data and analyse

data will be explained.

3.2 Research Design

A research design is basically a logical and systematic plan prepared for conducting a
research study (kumar, 2008). The research design of a study outlines the basic approach that
researchers use to answer their research question (Polit & Beck, 2010). The research design
ensures that all aspects of the study are well addressed and implemented. There are three
possible research designs: exploratory, descriptive and casual designs.

The research design for this study is a descriptive research design. A descriptive research
refers to research studies that have as their main objective the accurate portrayal of the
characteristics of persons, situations or groups (Hungler & Polit, 2004, p.716). A descriptive
design is selected because of its high degree of representativeness and the ease in which a
researcher could obtain the participants’ opinion (Polit & Beck, 2004, p.50).

The two main types of research methods are quantitative and qualitative. Quantitative
research involves collecting and converting data in to numerical form so that statistical
calculations can be made and conclusions drawn (Freitag, 2009) whereas the qualitative
approach to research is concerend with subjective assesment of attitudes , opinions and
behavoiur (kothari, 2008).

To achieve the research objectives and to address the research problem the researcher used
both qualitative and quantitative approaches to gather information for answering the research
quaestions. The intent in using both approaches was to bring together the differing strengths
and non-overlapping weaknesses of quantitative methods with those of qualitative methods.
Thus the quantitative aproach involved the use of questionnare while the qualitative approach
involved the use of indepth interview in collection of information from respondents.
3.3 Geographical Area of Study

The study will be conducted in Kinondoni District in Dar es Salaam, Tanzania. The District is

the northernmost of the three districts in Dar es Salaam, Tanzania. Dar es Salaamcity

constitutes of three districts namely Kinondoni, Ilala, and Temeke. To the East is the Indian

Ocean and To the North and West the Pwani Region of Tanzania. Kinondoni consists of 531

square kilometres of dry land with an estimated population of 1,083,913 peoples (Tanzanian

National Census, 2002). Administratively, Kinondoni District is broken into 4 Divisions, 27

Wards, and 113 sub-wards. However, the researcher will conduct his research in several

wards of; Kinondoni, Sinza and Mwananyamala.

3.4 Target Population

A population is defined as all elements (individual, objects and events) that meet the sample

criteria for inclusion in a study (Burns and Groove, 1993). This study will target the

customers in barbershop market segment. That is, the study will focus on barbershop industry

customers who are within Kinondoni District. Tanzanian National census report of 2002

indicates that Kinondoni District has 1,083,913 peoples which will now be our target

population of the study.

3.5 Sampling technique and Sample Size

Identifying an accurate sampling method is an important issue when designing a study that

conducts a survey using questionnaire for data collection, (Hair et al, 2006). There are two

groups of sampling techniques; Probability sampling (simple random, stratified random

and cluster) where the subjects of the population have some known chance of being selected

as a sample and non-probability (convenience, judgement, purposive and snow ball) where

subject does not have any known chance of being selected as a sample. The researcher will

use two sampling techniques to obtain sample.

i. Purposive Sampling: In this technique, the researcher targeted a group of barbershops with

extra services believed to be reliable for the study.

ii. Convenience sampling: This technique was used to get people in target population who

the researcher will meet by chance and appear to show interest in the research.

iii. Sample size: Although there are several methods of determining a sample size, this

research will use a formula method suggested by (Narins, 1994) and the resulting sample

size, 61. This equation is ideally used for dichotomous variables but it is also suitable for

Likert Scales. It has also recommended that a sample size between 50 and 100 is normally

enough (Hair et al, 2006). In this research, therefore, a sample size of 60 respondents will be

considered.

3.6 Data Collection

Data for this research will be collected from the field as primary data. The following

techniques namely questionnaires and interviews will be employed to collect data.

3.6.1 Questionnaires

This is a pre formulated written set of questions to which respondents record their answers

usually within rather closely defined alternatives. The information obtained through a

questionnaire is similar to that by an interview, but the questions tend to have less depth

(Burns and Grove, 1993). The researcher will use mostly closed questions and few open-

ended questions to simplify as well as to enrich the information to be obtained from

respondents. The researcher will use self-administered questionnaires.

3.6.2 Interviews

The interview will be the other method that researcher will use to explore in depth the

required information from the interviewees. The interview was semi-structured while
allowing some degree of flexibility during the interview process to follow up issues of

interest.

3.7 Data Analysis

After the data collection, the organization and analysis of data follow. In this research,

quantitative data that will be collected using questionnaire which will be analysed using

statistical package for social sciences (SPSS) for purposes of descriptive statistics on

subjects. The data from this quantitative analysis will be presented as pie charts, tables and

bar graphs.

4.0 Research Work Plan.

Since research is a project, therefore the researcher will have to plan this project into distinct
and identifiable activities. Each activity will be arranged in accordance with time and
resources available. The field research will be carried out from March 2011 to July 2011 as
shown below by the timetable schedule.
MONTHS MARCH APRIL MAY JUNE JULY

NUMBER OF
WEEKS
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

ACTIVITIES

DATA COLLECTION

DATA EDITING

DATA ANALYSIS
REPORT
PREPARATION

REPORT
SUBMISSION

5.0 Research Financial Budget

COST DRIVES COST AMOUNT TOTAL
AMOUNT

Accommodation

2months = 3000´ 2´31= 186,000/= 186,000/=

Food

Breakfast 1000 ´62days= 62,000/=

Lunch 2500 ´62days=
155,000/=
Dinner 2500 62days=
155,000/=

372,000

Stationary& secretarial service

Printing 75pgs @700/= 52,000/=

Binding 5 report books 20,000/=

Photocopy 75pgs for 5 report@25 9,375/=

3 note books @ 2500/= 7500/=

Reams of papers A4 size 5 ´5000/= 25,000/=

2 flashes @30000/=
60,000/=

173,875
Transport

Iringa to Dar 2@15000 30,000/=

Local transport in Dar

92days@1000 92,000/=

122,000

Miscellaneous expenses 50,000/= 50,000/=

Courtesy and respondents 50,000/= 50,000/=

TOTAL COST 953,875 953,875

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Share, and Profitability: Findings from Sweden, Journal of Marketing, 58, pp. 53-66.

Berry, L. L. (1993). Relationship Marketing, in Emerging Perspectives on Services

Marketing, (Eds, Berry, L. L., Shostack, G. L. and Dupah, G.), American Marketing
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Creswell, J.W (1994). Research design, in Qualitative and Quantitative Application.

Thousands Oak, California: Sage.

Erevelles, S. & Leavitt, C. “A Comparison of Current Models of Consumer Satisfaction/

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