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ISSN : 1598-7248 (Print)
ISSN : 2234-6473 (Online)
Industrial Engineering & Management Systems Vol.17 No.3 pp.600-612

Service Design by Identification and Prioritization of Customer Demands in Kano Model: A Step Towards the Quality Function Deployment (QFD) and the Productivity Improvement

Ali Sarafraz Ardakani, Shima Baradaran Ghannad, Mohammad Mirmohammadi Sadrabadi*, Hamed Shakerian
Department of Accounting, Payame Noor University, Tehran, Iran
Department of Industrial Management, Yazd Branch, Islamic Azad University, Yazd, Iran
Department of Accounting, Yazd Branch, University of Science and Arts, Yazd, Iran
Department of Industrial Management, Tabriz Branch, Islamic Azad University, Tabriz, Iran
Corresponding Author,
May 19, 2018 July 10, 2018 July 23, 2018


Rail Transportation is the best option of transport in many countries of the world. One of the factors that increase the share of rail passenger transportation is developing rail transportation of passenger by increasing level of customer satisfaction in this type of service. The main purpose of this paper is service design by identification and prioritization of customer demands in Kano model. The statistical population consisted of travelers who used the Iran South-East Railway services. To determine the sample size, as there was not any certain statistical test as research requirement, we used the saturated sample, so that we selected samples as long as the opinions became converged. Semi-structured interviews, interviews with experts and a questionnaire for a two-week period in January 2014 were used to collect data. The final questionnaire was compiled and its validity was confirmed after obtaining the expert’s points of view and fixing deficiencies and problems. Cronbach’s alpha coefficient was used to assess the reliability of questionnaire. Descriptive and inferential statistics were used to analyze the obtained information from the questionnaires. Kano model, QFD method in the SPSS and Excel were used for the inferential statistics. Data analysis in the Kano model and QFD method was done in Excel software; and Spss16 software was used to measure the reliability. After identifying the characteristics of service with the help of experts, quality Function Development (QFD) was used to prioritize them and finally, required services has been ranked and proper selection of personnel, upgrade facilities of rail and the exact timing of train schedules are 3 first priority, if first six priorities are done, almost half of the costumers will be satisfied.



    According to the investigation of recent development, services have been vastly expanding; and this trend will be developing with further speed in the upcoming years. The industries will become small and services become bigger. Managers in manufacturing and service enterprises in all public, cooperative and private sectors will gradually realize that the product quality cannot only differentiate them from others, but the focus should be changed from market to customer focus (Edwards, 2000). Due to the diversity and number of customers, organizations not only need to fulfill their customers’ expectations, but they should also try to find out customers’ attitudes toward organizations and the ways of delivering their services. As the result of this need, organizations are seeking to measure the service quality of this sector more than ever. Since services are not more obvious than goods and are as integral parts of service providers, the assessment of provided services is more difficult for customers than goods. Therefore, organizations require defined models, which prove the ability of service quality assessment system and provide a suitable criterion for measuring the customer (client) satisfaction level in order to measure their service quality (Alvani and Riahi, 2003). In recent years, we have seen the widespread and growing use of quality management systems in different technical, specialized and service fields in Iran. The development of customer focus culture in organizations and thus the society is one of goals of creating, deploying and using these systems (Momeni and Marmazi, 2007).

    In recent years, the fleet of rail transportation has been taken into consideration due to the higher level of security and lower cost than other fleets such as the air and road transportation, and its customers are increasing every day. This growing trend has intensified the competition among service-providing organizations. In the competition market, the increase revenue and profit earning are the reasons for the customer focus. In the public services, the customer orientation and respect to customers have been considered by legal requirements, directives or issuance of instructions. Despite the fact that earning money is very easy and guaranteed in monopoly services, there are many requirements for the customer orientation. Iran South-East Railway is not an exception. Considering the customer orientation approach of this large organization, it is significantly important to provide optimal and expected services for this huge population of customers and it has a significant impact on the productivity. Therefore, the present study listened to customers through Kano model and its combination with the QFD in this organization. In fact, all organizations need to have an understanding of customers and their desires to achieve their product’s success (whether goods or services) in order to satisfy their customers. The quality function deployment (QFD) is a technique that is now applied to meet customers’ demands and expectations and transfer them to product design or service delivery processes (Pourseyyed- Aghaei et al., 2006). In this technique, customer demands are identified and analyzed by a simple and precise process, and it leads to processes, instructions, regulations, and methods, which reflect customer demands in products /services, after performing different steps. Kano, a prominent expert in management science, classified customer requirements, or in other words the qualitative characteristics of products, into three categories namely the basic, performance and exciting requirements. In this regard, the quality engineering considers the first category as a minimum for entry into the market; the second category as the least attempt to maintain the market; and the third category as the only category that affects the creation of competitive advantage (Fazli and Alizadeh, 2008). Given that transportation systems are vital, their revenue generating depends on the service quality; and the inclusion of customer demands can lead to the significant growth. The present study integrated Kano model with the QFD. Due to the integration of these two models, the analysis, classification and prioritization of customers’ needs and requirements can be properly performed leading to the provision of products or services that are consistent with customers’ needs and requirements. The present study aimed to identify and integrate Kano model with the QFD in designing services in Iran South-East Railway.


    2.1. Service Quality and Satisfaction

    Service is a process including a series of more or less intangible activities that are naturally, but not necessarily, permanent and occur in interactions between customers and employees, or physical resources, goods and service providers to resolve customer issues (Gronroos, 2000). Customer satisfaction is generally a complete achievement of expectations (Oliver, 1997). Customer satisfaction can be considered as a special consequence of marketing activity that helps customers make purchasing decisions. Customer satisfaction is a situation in which customers feel that the product’s characteristics and their needs and expectations are met (Hauser and Clusing, 1988).

    Joseph Juran considers the quality as the “suitability for use and application,” or suitability for merchants, buyers and end user; and here a customer defines the suitability (Kazzazi and Dehghani, 2003). The service quality is an issue including dimensions such as the reliability, accountability, assurance, empathy and keeping up the appearance. These dimensions can be used to introduce the service quality gap concept. This gap is based on the difference between customer expectations of a service and perceptions of what they receive (Jane and Dominguez, 2003).

    2.2. Kano Model and its Features

    Most of previous definitions of quality including Herzberg’s definition consider the quality linear and onedimensional in the nature. Nevertheless, in the late 1970s, Professor Noriaki Kano and several other Japanese collaborators developed the Kano model to define the service quality in the field of customer needs and rejected the traditional theory, and considered the quality non-linear and two-dimensional as shown in Figure 1 (Davenport and Short, 1990).

    The definition of quality is more complicated due to the compliance of service performance quality parameters with customer satisfaction in a two-dimensional axis. Kano model, which was first introduced by Professor Noriaki Kano in Japan in 1979, received the Deming Prize in 1997, and classified customer requirements, or in other words, qualitative features of products into three categories namely basic, performance and exciting needs. In this regard, the quality engineering considers the first category as the minimum for entry into the market; the second category as the least attempt to maintain the market; and the third category as the only category that is effective in generating a competitive advantage (Sauerwein et al., 1996; Zhang and Vondran, 2001).

    2.3. QFD and House of Quality (HOQ)

    Eureka and Ryan defined the QFD as follows: A systematic way ensuring that the development of product characteristics as well as the selection and development of process equipment, methods and controls are arisen from customer and market demands (Eureka and Ryan, 1998). The QFD helps organizations to effectively focus their requests on critical issues for customers to better plan. In brief, the QFD has the following feature: Converting customer requirements into technical specifications of products, determining qualitative activities appropriate to technical specifications of products. In fact, the most important advantage of using the QFD method is to invite organizations to think and create the culture of “quality focus” and “customer focus” (Ramezanian-Pournasir, 2007).

    The House of Quality (HOQ) is the most commonly used part of the QFD. This house consists of rooms that connect the desired and well-known customer qualities, called “what things,” with technical characteristics, called “how things.” These rooms are shown by six sub-matrices including the matrix of customers’ desired qualities, the planning matrix, technical matrix and characteristics, the relationship matrix, the technical correlations and the technical matrix of the quality of house (Ettlie, 1993). Figure 2 shows a simple example of a quality of home. In this house, the customer’s desired quality (what things) are expressed by customer language and terms; and the interview process or questionnaire is the best way to obtain them. Technical characteristics (how things) are expressed by technical terms of organizations.

    Planning matrix is one of sub-matrices of the House of Quality. This matrix is used as a useful tool for initial prioritizing and re-prioritizing customer demands. The planning matrix for the house of quality, its components and its formation stages (Fazli and Alizadeh, 2008). Figure 3 shows components of planning matrix for the house of quality.

    Gupta and Srivastava (2011) conducted a research entitled “The Customer Satisfaction to Design Health Service Quality in India using Kano Model and the Quality Function Deployment (QFD).” The research indicates that the health service industry is a growing sector in India. The results of this research can help managers to develop sustainable strategies in the health sector. Chang and Kim (2010) conducted a paper entitled “The QFD framework for the service quality on health and medical information websites” and identified requirements of these websites and necessary performance indices for creating these websites. They concluded that the QFD could improve performance indices of these websites in an efficient and structured way. In 2004, Bhattacharyya and Rahman (2004) conducted a research on the hotel service and identified the gap between clients’ demands and expectations by the SERVQUAL model, and finally provided necessary qualitative features to design hotel service by the house of quality technique.


    3.1. Research Questions

    What are determinants of service quality in the rail service sector? What level of customer satisfaction does each of these factors meet? What services can meet the most important customer expectations?

    3.2. Type of Method

    The present research was applied in terms of objective as it was conducted with the aim to provide strategies to increase the service quality of railways and help the proper allocation process. It had a descriptive nature and method as it examined and described the current situation, and had a descriptive and field-survey design in terms of data collection method.

    3.3. Population and Sample

    The statistical population consisted of travelers who used the Iran South-East Railway services. The average number of daily passengers of this railroad was reported equal to 1500 people per day by managers. Sampling was used to collect data. To determine the sample size, as there was not any certain statistical test as research requirement, we used the saturated sample, so that we selected samples as long as the opinions became converged. This was accomplished by 40 simple random samples from Pardis train. Considering that 4 trains traveled in the main railway routes of Yazd, 160 healthy samples were needed, and since all questionnaires were not expected to be completed and returned by passengers, it was achieved by distributing 40 to 45 Kano questionnaires per train.

    3.4. Data Collection

    Semi-structured interviews, interviews with experts and a questionnaire for a two-week period in January 2014 were used to collect data. The questionnaire consisted of 2 sections: 1) Demographic information: This section contained information about the education level, gender, age, type of train and the travel purpose; 2) Questions (items) of the questionnaire: This section contained 47 questions The researcher identifies determinants of passengers’ satisfaction by careful examination of literature, investigating papers related to the passenger satisfaction subject, interviewing experts, and interviewing passengers, and designed a questionnaire after examining similar questionnaires and talking with experts. In designing this section, we tried to make the questionnaire as comprehensible as possible. The items of questionnaire were divided into 6 sections: physical and environmental factors (9 questions), human resource factors and response method (12 questions), equipment factors (5 questions), welfare service factors (12 questions), planning factors (3 questions) and security factors (6 questions). The group meetings with railway managers and experts were held to complete the house of quality in the QFD method and then determine the objective of demands and relationships between passengers’ demands and service characteristics. The following tools were used to increase the validity: The use of expert opinion; railway managers’ views; and the investigation of papers and books that used the Kano questionnaires. The final questionnaire was compiled and its validity was confirmed after obtaining the expert’s points of view and fixing deficiencies and problems. Cronbach’s alpha coefficient was used to assess the reliability of questionnaire. The reliability of questionnaire was desirable since the Cronbach’s alpha coefficient was more than 0.7 in Kano questionnaire.

    3.5. Data Analysis

    Descriptive and inferential statistics were used to analyze the obtained information from the questionnaires. Kano model, QFD method in the SPSS and Excel were used for the inferential statistics. Data analysis in the Kano model and QFD method was done in Excel software; and Spss16 software was used to measure the reliability.


    4.1. Identification of Customers

    Customers of the South-East Railway were first divided into two categories. First, passengers who were present at the railway stations including the origin, destination and intermediate stations; second, passengers inside the train. In this project, customers were the second group passengers (inside the train); hence, wherever we refer to customers and their needs in the present research, they are passengers inside the train.

    4.2. Identification of Customer Needs

    In the first step, we identified customers’ needs. At this stage, 63 needs were identified through interviews with passengers, staff and managers of the Southeast Railway as well as investigating papers about the passenger satisfaction in the rail transportation sector. After a final monitoring, experts eliminated a number of these factors that were similar or could be merged into other factors. Finally, 47 needs (factors) were considered for designing the Kano questionnaire and they were put into 6 groups, namely physical and environmental factors; human resource factors and response method; equipment factors; welfare factors; planning factors; and security factors.

    4.3. Evaluation and Analysis of the Kano Questionnaire

    Kano questionnaire was designed in the second step by taking into account the above-mentioned requirements as customer needs. Questionnaires were evaluated and analyzed once they were collected from customers. To do this, customers’ responses to various questions should be collected in the results matrix. Kano evaluation table was used to convert the customer feedback into the applicable inforinformation in the results matrix. This table converted each part of question into a single answer. The responses in the Kano table were categorized into six groups. In this table, M presents the mandatory needs; O: one-dimensional features, and A: Attractive features of a product. These three features are three classes of Kano modeling needs. Among the other three other features, I (indifference) occurs when a customer is almost discouraged by the presence or absence of a feature in a product. Q (qualm) indicates the time when a customer does not understand a question or the contained information in a question is incomplete, or in other words, a customer has doubts about this criterion. R (Reverse) occurs when the desired and undesirable form of the questionnaire is reversed according to customers and they have different opinions from the questionnaire designer. After extracting the answer of each question from the Kano Evaluation Table, we enter responses to the result matrix. The results matrix is described in Table 1.

    4.3.1. Classification of Factors based on the Frequency Table

    As shown in Table 1 and the data analysis of questionnaire based on the highest frequency as the simplest method of Kano questionnaire analysis, the answers were selected to each characteristic with the highest frequency and the types of needs were found by this method. The results of factor classification based on the frequency are shown in Table 1.

    According to results of the frequency table, from 47 factors, 11 factors were put in the basic group, 19 factors in the performance group, 15 factors in the exciting group and 2 factors in the indifference group. Its results are presented in Tables 4, 5 and 6.

    4.3.2. Calculation of Coefficients (Satisfaction/ Dissatisfaction) of Factors

    After taking steps in the Kano model and determining types of factors in terms of being basic, performance and exciting, now we have to calculate the customer satisfaction coefficient. Customer Satisfaction Coefficient indicates whether the presentation of a specific feature of a product results in customer satisfaction or only prevents their dissatisfaction. Different market segments usually have different needs and expectations; hence, it is sometimes unclear which features can be attributed to which requirements. It is also important to know the average impact of product or service characteristics on the customer satisfaction. Therefore, the customer satisfaction coefficient indicates how much features of products or services may affect the customer satisfaction or lead to the dissatisfaction in the absence of features. Coefficients of satisfaction and dissatisfaction were calculated using results of Table 1. Afterwards, the absolute and relative frequencies of basic, performance and exciting needs were identified in each of six groups.

    4.4. Determination of the Importance of Customer Needs

    After identifying the basic, performance and exciting needs, the questionnaire 2 was designed to determine the importance of these needs. In this questionnaire, passengers were asked to answer the questions about the importance of each need and the performance of the Southeast Railway in meeting these needs as well as the Yazd passenger terminal performance on a Likert scale. The number 1 refers to vey low importance, and number 5 means very high importance. Number 1 also means very bad performance of organizations and the number 5 is defined as very good performance. The degrees of calculated importance for each demand are presented in Table 2, 3 and 4.

    4.5. Identification of Service Features

    The services, which could be provided, were presented in Table 5 of the present papers with the aim to meet customer requirements after designing the Kano questionnaire and identifying basic, performance and exciting needs and giving results to railway engineers and experts and consulting with them.

    4.6. Formation of the House of Quality Matrix

    Inputs and parameters of the house of quality for the present study are as follows: the customers’ needs and their classification into three basic categories, namely the basic, performance and exciting needs that were identified by the Kano model. 1. Identified service characteristics, the relationship between service features and customer requirements were identified by Yazd railway engineers and experts. 2. Degrees of importance of each customer demand were obtained by distributing questionnaires among passengers. 3. Comparison of organization’s status and the competitor’s situation: Yazd passenger terminal was considered in the present study; and travelers responded to questionnaires. 4. An organization’s program to fulfill customer requirements: It was identified by giving results to railway managers. 5. Determining the initial improvement ratio, the adjusted improvement ratio, the calculation of absolute and relative importance of each qualitative demand, and the calculation of absolute and relative weights of each service. These weights can be used to prioritize customer requirements (qualitative demands) and necessary technical characteristics to fulfill these requirements as the output of QFD matrix (Tables 6 and 7).

    Using the obtained results from the QFD matrix, we can prioritize customer needs and determine technical characteristics to meet these needs. For example, the non-stop of trains at the way stations and the proportionality of ticket cost to provided services were identified as the most important customers’ needs. Furthermore, the appropriate recruitment of train personnel and improving the train welfare service were prioritized as the main service characteristics in fulfilling customers’ needs. In Chapter 5, we separately described the obtained results from this matrix. To identify the priority of customers’ needs and technical characteristics, we provided a valuable managerial insight for the Southeast Railway managers to largely satisfy and attract customers and increase their profitability and survival. Managers can focus their improvement programs on technical features that have the greatest impact on meeting customers’ needs and satisfaction. On the other hand, given the limited funding of organizations for improvement programs, these results help managers to continuously improve the service quality and make decisions at any time with the highest efficiency. Therefore, the QFD method as a qualitative tool helps organizations to effectively apply concepts such as the continuous improvement, which is one of the most important concepts in improving product and service quality, in their operational and development programs. Table 8 prioritizes customer needs as one of the research results.

    The prioritization of service characteristics to meet customer needs is another result of the present research. The research results are according to the Table 9 in the prioritization of technical characteristics.


    In the present research, we prioritized customer needs and technical characteristics of services in order to meet requirements by combining the Kano model and the QFD method. Results of this research can be used to improve the Southeast railway services and increase the customer satisfaction. Results of the present research about customer needs can be summarized as follows: 1) Non-stop of train at the way stations; the quality; proportionality of ticket cost with the provided service quality, and timely arrival of train at the station were the most important customer needs. In fulfilling these needs, the improvement of operational and managerial processes was more important than improving physical equipment. Therefore, we can expect that qualitative characteristics, which mainly emphasize the improvement of organizational processes and planning, will be effective in meeting these requirements; 2) Good quality of the heating system; handling travelers’ complaints and requests; appropriate ventilation of train environment and attention to safety issues were put in the next priorities of customer requirements; 3) The results also indicated that the attractive appearance was prioritized next for customer requirements. Therefore, The Southeast Railway can significantly increase the customer satisfaction by providing basic and performance needs, and then create a competitive advantage and retain its customers by improving the exciting needs and increasing the appearance attractiveness. The latter is one of the features of the Third World countries which usually provide services and products with low quality for fulfilling the basic and performance needs, and thus the quality improvement programs of these countries should be more focused on meeting these needs.

    The obtained results of prioritization of technical characteristics can be summarized as follows: 1) The appropriate recruitment of train personnel was the most important technical characteristic of services. The appropriate recruitment of train personnel provides the right customer service. These services include train services for customers, and train management and scheduling services. The QFD matrix indicates that the appropriate recruitment of train personnel has a significant impact on the fulfillment of many customer needs. In this regard, we can also pay special attention to issues such as the accurate and scientific formulation of a job description and conditions for recruitment as well as the exact application of staffing system and the scientific selection system, 2) Improving the train welfare services is put in the second priority of service characteristics. This feature includes cases such as the rest in coupes, proving food and snacks, and train cleanliness and hygiene. 3) The exact scheduling train schedule is put in the third priority. In fact, passengers select a transportation system that is best option for implementing their plans. In the era of communication and transportation, the exact time of train movement and non-stop at the workstations are significantly important to customers. Prioritizing the railway network on the basis of passenger demand to accelerate the two-lane crowded ways, creating the origin-destination trains, increasing the number of trains in partnership with the private sector, renovation and correction of routes in order to increase the train speed and developing the electric railway in high-traffic routes are among the solutions that can be used to better plan in this regard, and 4) Train maintenance planning is also among the most important qualitative features. The quality of all in-train services such as safety systems, cooling and heating systems, and air conditioning systems is highly dependent on the train planning and maintenance; and the regular implementation of preventive network programs and main maintenance and repairs of fleet can improve the quality of these systems.

    The results of this research can be used to prioritize Southeast Railways rail services improvement programs and to determine the policies and perspectives of the organization. Using the results of this research and taking into account organizational constraints such as budget and capacity, the organization can develop its comprehensive quality control program and institutionalize it in its operational programs.



    Kano model (Tan and Pawitra, 2001).


    House of quality.


    Components of planning matrix for the house of quality.


    Result matrix of the Kano questionnaire

    Importance of each basic need

    The Importance of each performance need

    Importance of each exciting need

    Service characteristics

    House of quality matrix (basic needs)

    Absolute and relative weights of service features

    Prioritizing Customer needs

    Prioritizing of railway services


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