Factors affecting employee turnover rate in a comparison between high tech organizations and construction organizations in vietnam

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Luong Dang Khoa FACTORS AFFECTING CUSTOMER LOYALTYIN THE VIETNAMESE TELECOMMUNICATION MARKET MASTER OF BUSINESS(Honours) Ho Chi Minh City - 2012 TIEU LUAN MOI download : skknchat@gmail.com UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Luong Dang Khoa FACTORS AFFECTING CUSTOMER LOYALTYIN THE VIETNAMESE TELECOMMUNICATION MARKET ID:60340102 MASTER OF BUSINESS(Honours) SUPERVISOR: Dr Nguyen Thi Nguyet Que Ho Chi Minh City –2012 TIEU LUAN MOI download : skknchat@gmail.com ACKNOWLEDGEMENT I would like to show my great gratitude to following people who made this thesis possible I consider it an honor to work with Dr Nguyen Thi Nguyet Que whose encouragement, guidance and support from the initial to the final level enabled me to develop an understanding of the subject It is a pleasure to thank my colleagues who brought sincere help during the completion of the study I owe my deepest gratitude to my family and friends who inspired me my final effort to accomplish this dissertation TIEU LUAN MOI download : skknchat@gmail.com PLAGIARISM STATEMENTS I would like to declare that, apart from the acknowledged references, this thesis either does not use language, ideas, or other original material from anyone; or has not been previously submitted to any other educational and research programs or institutions I fully understand that any writings in this thesis contradicted to the above statement will automatically lead to the rejection from the MBA program at International School of Business University of Economics, HCMC TIEU LUAN MOI download : skknchat@gmail.com COPYRIGHT STATEMENT This copy of the thesis has been supplied on condition that anyone who consults it is understood to recognize that its copyright rests with its author and that no quotation from the thesis and no information derived from it may be published without the author‟s prior consent © Luong Dang Khoa / ISB-MBUS/2010-2012 TIEU LUAN MOI download : skknchat@gmail.com ABSTRACT Purpose: This study shows us factors that contribute to customer loyalty from customers of Telecommunication service organizations in Viet Nam beside factors in original ACSI/ECSI model as: image, expectation, perceived value, satisfaction, complaint….Moreover author also considers the direct relationship between perceived service quality and customer loyalty instead of through customer satisfaction as the original ACSI and ECSI Finding: This study finds out that beside factors in original ACSI-ECSI models, service customization and communication also have positive affection to customer loyalty Beside that a direct and significant relationship between Perceived Service Quality and Customer loyalty is also recognized Design: This research has based on ACSI/ECSI model and ECSI extended models to measure Perceived Service Quality, Customization, Communication and Customer loyalty 200 questionnaires will be issued to collect data Limitations and implication: this study has its limitations in terms its scope which focused only Telecommunication organizations in Viet Nam Beside that many factors that can affect customer loyalty such as: switching cost, economic cost, transaction cost, call center, in-different services, price perception and inertia… are not mentioned in this study For business owner or directors of organizations, this study can help how to create Customer loyalty in their organizations This study is also helpful for researchers to extend its scope to other business field and other geographic areas outside VietNam Keywords: Customer loyalty, Perceived Service Quality, Service Customization, Communication TIEU LUAN MOI download : skknchat@gmail.com Table of Contents ABSTRACT Chapter 1: INRODUCTION 1.1 Research background 1.2 Research objectives 1.3 Scope of this research 1.4 Research method 1.5 Research structure Chapter 2: LITERATURE REVIEW 2.1 Introduction 2.2 Literature review 2.2.1 Customer loyalty 2.2.2 Perceived service quality 2.2.3 Service customization 2.2.4 Communication 11 2.3 Model and Hypotheses 12 2.4 Summary 12 Chapter 3: RESEARCH METHODOLOGY 13 3.1 Introduction: 13 3.2 Research process 13 3.3 Operationalization of measurement scales 14 3.4 Questionnaire Design 17 3.5 Pilot study 17 3.6 Main survey 22 3.6.1 Target population 22 3.6.2 Sample size 22 3.6.3 Sampling method 23 3.6.4 Questionnaire administration 23 3.7 Methodology of data analysis 24 TIEU LUAN MOI download : skknchat@gmail.com 3.8 Summary 24 Chapter 4: DATA ANALYSIS 25 4.1 Introduction 25 4.2 Data cleaning 25 4.3 Sample description 26 4.4 Reliability test 27 4.4.1 Customization 27 4.4.2 Perceived Service quality: 29 4.4.3 Communication 30 4.4.4 Customer loyalty 31 4.5 Factor analysis 32 4.6 Correlation and Regression 38 4.6.1 Correlation 38 4.6.2 Regression assumption testing 39 4.6.3 Regression analysis 39 4.7 Summary 44 Chapter 5: CONCLUSIONS AND IMPLICATIONS 45 5.1 Introduction 45 5.2 Findings and contributions 45 5.3 Limitations and recommendations for future research 47 TIEU LUAN MOI download : skknchat@gmail.com LIST OF TABLES Table 1: List of indicators Table 2: Results of Cronbach‟s alpha for dimension Customization (pilot test): Table 3: Results of Cronbach‟s alpha for dimension Perceived Service Quality (pilot test): Table 4: Results of Cronbach‟s alpha for dimension Communication (pilot test): Table 5: Results of Cronbach‟s alpha for dimension Loyalty (pilot test): Table 6: Characteristics Of Respondents Table 7: Results of Cronbach‟s alpha for dimension Customization (main survey): Table 8: Results of Cronbach‟s alpha for dimension Perceived Service Quality (main survey): : Table 9: Results of Cronbach‟s alpha for dimension Communication (main survey): Table 10: Results of Cronbach‟s alpha for dimension Customer loyalty (main survey): Table 11: Results of EFA testing (1st) Table 12: Results of EFA testing (2nd ) Table 13: New Factors Table 14: Results of Cronbach‟s alpha for new dimension Communication: Table 15: Results of Cronbach‟s alpha for new dimension LOYALTY: Table 16: Model summary (MLR) Table 17: Coefficients (MLR) Table 18: Model Summary (SLR) Table 19: Coefficient (SLR) Table 20: The confirmation of hypothesis TIEU LUAN MOI download : skknchat@gmail.com Chapter 1: INRODUCTION 1.1 Research background As many researchers have conducted, customer loyalty is one of the most important thing in business nowadays, and that it is more profitable to retain customers than to acquire new ones (John, Katherine & Libai, 2003; Liz LeeKelley, Gilbert & Mannicom, 2003), so how to retain customers is one of the key of success of organizations, and especially in telecommunication business in Viet Nam where the market almost nearly saturated (P.V, 2012) so customer loyalty is becoming competitive advantages for organizations to compete, develop and survive on this market On over the world many models are used to measure customer loyalty such as: Servqual, Servperf, ACSI, ECSI… Telecommunication market in VietNam is now ready for matured with biggest suppliers: Viettel, MobilePhone, Vinaphone that got more than 95% market share (P.V., 2012) and other smaller suppliers: S-Phone, VietNam Mobile, Beeline (now is called G-mobile) Telecommunication market is now becoming the game play of big Viettel, Mobifone and Vinaphone There are few differences in Vietnamese telecommunication market between now and 3-5 years ago In the past how to attract new customers is the most important thing to service providers, service providers are always try to attract new customers as much as possible, but at this time this strategy is not the most important one, and in long-term how to retain customers is much more important than attracting new customers So beside of attracting new customers, how to make customers retain to service providers are considered carefully and become the critical factors for service providers to survive and develop in this market, so research on customer loyalty and its antecedents such as perceived service quality and other factors can be a very importance for service providers (Santouridis & Trivellas, 2010, p.332) Few researchers have also researched for customer satisfaction and perceived service quality in VietNamese Telecommunication market and most of them based on TIEU LUAN MOI download : skknchat@gmail.com TIEU LUAN MOI download : skknchat@gmail.com Table: Factor Matrix 2nd Factor X Offers products and services that satisfy my specific needs ,440 X Offers products and services that I couldn’t find in another company ,490 ,576 If I changed I wouldn’t obtain products and services as customized as I have now ,452 ,626 Quality of X’s products and services is totally good ,759 X has a reliability of products and services ,709 X has a diversity of products and services ,593 X has a Global quality ,684 X’s services meet my personal requirements ,688 X keeps me constantly informed of new products and services that could be in my interest ,580 Personal service and advice of X is totally good ,549 ,592 Clearness and transparency of information provided by X ,526 ,398 Probability to choose X again if buying new product ,543 -,348 Probability to recommend X if required ,665 -,371 How much should prices be lower than X's price to change current provider ,525 -,403 -,303 -,367 Extraction Method: Principal Axis Factoring a factors extracted 16 iterations required TIEU LUAN MOI download : skknchat@gmail.com Table:Pattern Matrix 2nd Factor X Offers products and services that satisfy my specific needs ,570 X Offers products and services that I couldn’t find in another company ,782 If I changed I wouldn’t obtain products and services as customized as I have now ,761 Quality of X’s products and services is totally good ,585 X has a reliability of products and services ,511 X has a diversity of products and services ,839 X has a Global quality ,663 X’s services meet my personal requirements ,820 X keeps me constantly informed of new products and services that could be in my interest ,593 Personal service and advice of X is totally good ,865 Clearness and transparency of information provided by X ,641 Probability to choose X again if buying new product ,643 Probability to recommend X if required ,736 How much should prices be lower than X's price to change current provider ,652 Extraction Method: Principal Axis Factoring Rotation Method: Promax with Kaiser Normalization a Rotation converged in iterations TIEU LUAN MOI download : skknchat@gmail.com Table: Structure Matrix 2nd Factor X Offers products and services that satisfy my specific needs ,379 ,583 X Offers products and services that I couldn’t find in another company ,363 If I changed I wouldn’t obtain products and services as customized as I have now ,427 ,335 ,793 ,773 Quality of X’s products and services is totally good ,746 ,606 ,455 ,378 X has a reliability of products and services ,687 ,536 ,494 ,338 X has a diversity of products and services ,742 X has a Global quality ,740 ,468 ,455 X’s services meet my personal requirements ,808 ,454 ,384 X keeps me constantly informed of new products and services that could be in my interest ,506 Personal service and advice of X is totally good ,338 ,401 ,812 Clearness and transparency of information provided by X ,384 ,366 ,672 Probability to choose X again if buying new product ,342 ,669 ,380 ,314 Probability to recommend X if required ,407 ,800 ,450 ,461 How much should prices be lower than X's price to change current provider ,413 ,646 Extraction Method: Principal Axis Factoring Rotation Method: Promax with Kaiser Normalization TIEU LUAN MOI download : skknchat@gmail.com ,332 ,673 ,313 Table: Factor Correlation Matrix 2nd Factor 1,000 ,516 ,521 ,349 ,516 1,000 ,489 ,446 ,521 ,489 1,000 ,356 ,349 ,446 ,356 1,000 Extraction Method: Principal Axis Factoring Rotation Method: Promax with Kaiser Normalization TIEU LUAN MOI download : skknchat@gmail.com Results of Cronbach’s alpha for new dimension LOYALTY: Reliability Statistics Cronbach's Alpha N of Items ,742 Scale Mean if Item Deleted Scale Variance if Item Corrected Item-Total Squared Multiple Cronbach's Alpha if Deleted Correlation Correlation Item Deleted Probability to choose X again if buying new 6,41 3,076 ,572 ,352 ,663 6,37 3,753 ,634 ,404 ,595 5,93 3,805 ,517 ,279 ,713 product Probability to recommend X if required How much should prices be lower than X's price to change current provider TIEU LUAN MOI download : skknchat@gmail.com Regression B.3: Correlation Analysis Correlations CUSTOMIZ COMMUNI ATION QUALITY CATION LOYALTY CUSTOMIZATI Pearson ON Correlation ,346** ,280** ,380** ,000 ,001 ,000 138 138 138 138 ,346** ,492** ,511** ,000 ,000 Sig (2-tailed) N QUALITY Pearson Correlation Sig (2-tailed) ,000 N 138 138 138 138 ,280** ,492** ,393** Sig (2-tailed) ,001 ,000 N 138 138 138 138 ,380** ,511** ,393** Sig (2-tailed) ,000 ,000 ,000 N 138 138 138 COMMUNICATI Pearson ON Correlation LOYALTY Pearson Correlation ,000 138 ** Correlation is significant at the 0.01 level (2-tailed) Variables Entered/Removedb Model Variables Entered CUSTOMIZATION, COMMUNICATION, QUALITY a Variables Removed Method Enter a All requested variables entered b Dependent Variable: LOYALTY TIEU LUAN MOI download : skknchat@gmail.com B.4: Regression Analysis Model Summaryb Change Statistics Model Adjuste Std Error R R dR of the Square Square Square Estimate Change R ,571a ,326 2,20612 ,311 F Change ,326 Sig F df2 Change df1 21,603 134 ,000 a Predictors: (Constant), CUSTOMIZATION, COMMUNICATION, QUALITY b Dependent Variable: LOYALTY ANOVAb Sum of Squares Model df Mean Square Regression 315,429 105,143 Residual 652,172 134 4,867 Total 967,601 137 F 21,603 Sig ,000a a Predictors: (Constant), CUSTOMIZATION, COMMUNICATION, QUALITY b Dependent Variable: LOYALTY Coefficientsa Stand ardiz ed Unstandardiz Coeff ed icient Coefficients s Model B Std Error Beta (Constant) ,900 1,077 QUALITY COMMUNI CATION Collinearity Statistics Correlations t Sig ZeroTolera order Partial Part nce VIF ,836 ,405 ,260 ,061 ,361 4,295 ,000 ,511 ,348 ,305 ,711 1,407 ,190 ,100 ,156 1,894 ,060 ,393 ,161 ,134 ,744 1,344 TIEU LUAN MOI download : skknchat@gmail.com CUSTOMI ZATION ,250 ,090 ,211 2,765 ,006 ,380 ,232 ,196 ,864 1,157 a Dependent Variable: LOYALTY Collinearity Diagnosticsa Variance Proportions Model Dimension Eigenvalue Condition COMMUNI CUSTOMI Index (Constant) QUALITY CATION ZATION 3,911 1,000 ,00 ,00 ,00 ,00 ,042 9,652 ,00 ,04 ,26 ,80 ,025 12,501 ,34 ,23 ,71 ,17 ,022 13,447 ,66 ,72 ,03 ,03 a Dependent Variable: LOYALTY Residuals Statisticsa Minimum Maximum Mean Std Deviatio n N Predicted Value 4,3383 12,7297 Std Predicted Value -3,306 2,224 ,000 1,000 138 ,189 ,688 ,356 ,119 138 4,3745 12,5813 9,3450 1,52449 138 -5,83183 4,40728 ,00000 2,18183 138 Std Residual -2,643 1,998 ,000 ,989 138 Stud Residual -2,749 2,063 ,002 1,007 138 -6,30848 4,69769 -2,820 2,088 ,001 1,014 138 Mahal Distance ,016 12,350 2,978 2,774 138 Cook's Distance ,000 ,154 ,010 ,019 138 Centered Leverage Value ,000 ,090 ,022 ,020 138 Standard Error of Predicted Value Adjusted Predicted Value Residual Deleted Residual Stud Deleted Residual 9,3551 1,51737 138 ,01003 2,26351 138 a Dependent Variable: LOYALTY TIEU LUAN MOI download : skknchat@gmail.com TIEU LUAN MOI download : skknchat@gmail.com B.5: Regression Analysis Variables Entered/Removedb TIEU LUAN MOI download : skknchat@gmail.com Model Variables Removed Variables Entered CUSTOMIZATIONa Method Enter a All requested variables entered b Dependent Variable: QUALITY Model Summaryb Change Statistics Mod el R Adjusted R Square R Square ,346 ,120 a Std Error of the Estimate ,113 R Square Change F Change 3,47180 ,120 df1 18,519 df2 Sig F Change 136 ,000 a Predictors: (Constant), CUSTOMIZATION b Dependent Variable: QUALITY ANOVAb Sum of Squares Model Regression Mean Square df 223,212 223,212 Residual 1639,259 136 12,053 Total 1862,471 137 F Sig 18,519 ,000a a Predictors: (Constant), CUSTOMIZATION b Dependent Variable: QUALITY Unstandardized Coefficients Coefficientsa Standar dized Coeffici ents Model B Std Error Beta t (Constant) 12,108 1,215 9,963 CUSTOMIZ ,568 ,132 ,346 4,303 ATION a Dependent Variable: QUALITY Sig ,000 ,000 Collinearity Correlations Statistics ZeroTolera order Partial Part nce VIF ,346 ,346 ,346 1,000 Collinearity Diagnosticsa TIEU LUAN MOI download : skknchat@gmail.com 1,00 Dimen Model sion Eigenvalue Condition Index Variance Proportions (Constant) CUSTOMIZATION 1,970 1,000 ,02 ,02 ,030 8,101 ,98 ,98 a Dependent Variable: QUALITY Residuals Statisticsa Minimum Maximum Predicted Value N 20,0635 17,1812 1,27643 138 -9,38113 7,61887 ,00000 3,45910 138 Std Predicted Value -2,639 2,258 ,000 1,000 138 Std Residual -2,702 2,195 ,000 ,996 138 Residual 13,8129 Mean Std Deviation a Dependent Variable: QUALITY TIEU LUAN MOI download : skknchat@gmail.com TIEU LUAN MOI download : skknchat@gmail.com TIEU LUAN MOI download : skknchat@gmail.com ... in table Total Variance Explained 2nd (Appendix B-B2: EFA Testing) showed us that how many factors extractions: There are factors extracted These factors explained more than 68% of data variance... Cha & Bryant (1996), Marie-Paule, Anne de la Foye, Carole & Michel (2000), Makam (2009) and Tung (2010) All these factors are main factors of ACSI and ECSI model, these factors have measured in. .. there are factors extracted These factors explained more than 66% of data variance Table 11 below showed the factor loadings for each item in relation to the various factors These values in the table