() EVALUATING DETERMINANTS OF CUSTOMER LOYALTY IN THE AIRLINES INDUSTRY THE CASE OF VIETJET AVIATION JOINT STOCK COMPANY In Partial Fulfillment of the Requirements for the Degree of MASTER OF BUSINESS.
EVALUATING DETERMINANTS OF CUSTOMER LOYALTY IN THE AIRLINES INDUSTRY - THE CASE OF VIETJET AVIATION JOINT STOCK COMPANY In Partial Fulfillment of the Requirements for the Degree of MASTER OF BUSINESS ADMINISTRATION In International Business By Ms: Truong Thuy Trang ID: MBAIU13043 International University – Vietnam National University HCMC August 2015 EVALUATING DETERMINANTS OF CUSTOMER LOYALTY IN THE AIRLINES INDUSTRY - THE CASE OF VIETJET AVIATION JOINT STOCK COMPANY In Partial Fulfillment of the Requirements of the Degree of MASTER OF BUSINESS ADMINISTRATION In International Business by Ms: Truong Thuy Trang ID: MBAIU13043 International University – Vietnam National University HCMC August 2015 Under the guidance and approval of the committee, and approved by all its members, this thesis has been accepted in partial fulfillment of the requirements for the degree Approved: Advisor PhD Ho Nhut Quang Committee member PhD Tran Tien Khoa Committee member Chairperson PhD N.N.D.Phuong PhD Mai Ngoc Khuong Committee member PhD Vo Xuan Vinh Committee member PhD Le Van Chon Acknowledge The completion of this study could not have been finished without the help and contributions of a number of people To begin with, I would like to express extremely gratitude to my advisor, PhD Ho Nhut Quang for his patience, guidance, support and valuable recommendations In the time of thesis processing, besides guides me to the right way, he has taught me much more than just finishing this study Once again, I want to thank him so much for all he done for me In addition, I would like to show gratitude to lecturers in School of Business, International University – Ho Chi Minh City, who gave me knowledge to apply in this study, especially the defense committee who read and gave comments to help me complete this research To my whole family, I am always grateful and want to express all my loving thanks to them because of their love, their encouragements and supports I would like to thank Mr Tran Huu Phuc and Mr Nguyen Xuan Hoa for their valuable encouragements when we are working out with our advisor Besides, my heartily thanks also go to my beloved boyfriend Mr Pham Thanh Quan, my close friends especially Phung Thi Diem Tram, the colleagues for their helps and advices when I need, to respondents of survey, who left the time to answer questionnaires in busy time to help me finish my thesis; to many people cared about me that listing name is not enough -i- 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 the International University – Vietnam National University Ho Chi Minh City - ii - 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 © Truong Thuy Trang/ MBAIU13043/ 2015 - iii - Table of Contents List of Tables viii List of Figures x Abstract xi Chapter One – Introduction 1 Background & Rationale Problem Statement & Problem Question Research Objectives Significant 5 Scope and Limitations Organization of the Thesis Chapter Two - Literature Review Research Concept definition 1.1 Customer Satisfaction 1.2 Customer loyalty 1.3 Perceived Quality 1.4 Perceived Value 1.5 Corporate Image 1.6 Price 10 Previous Researches 10 2.1 The Customer Satisfaction Model 10 2.2 The American Customer Satisfaction Index Model 11 2.3 Model of impacts on Customer Loyalty in commercial airlines industry 12 Conceptual Model & Hypothesis 13 - iv - Chapter Three – Research Methodology 16 Research framework 16 Research Design 17 Measurement Scale 17 Questionnaire Design 21 Sampling 21 5.1 Target Sample and Sample Size 21 5.2 Sampling Method 21 Data Analysis Techniques 22 6.1 Descriptive Statistics 22 6.2 Reliability Test 22 6.3 Exploratory Factor Analysis 23 6.4 Structure Equation Modeling 24 6.5 Confirmatory Factor Analysis 24 6.6 Bootstrap testing 25 Chapter Four - Data Analysis & Results 26 Sample Demographics 26 Descriptive Statistics 32 2.1 Perceived Quality 32 2.2 Airline Image 34 2.3 Perceived Value 35 2.4 Price 36 2.5 Customer Satisfaction 37 2.6 Customer Loyalty 38 -v- Reliability Test of Measurement Scales through Cronbach’s Alpha 39 3.1 Independent variables 40 3.2 Mediator variables 42 3.3 Dependent Variable 45 Exploratory Factor Analysis 46 4.1 Independent and Mediators Variables 46 4.2 Dependent variable 51 Group Determinants after Reliability and EFA Test 53 Structural Equation Modeling 54 6.1 Confirmatory Factor Analysis 55 6.1.1 Appropriate measure 56 6.1.2 Convergent Measure 56 6.1.3 Divergence Test 59 6.1.4 Composite Reliability and Average Variance Extracted 61 6.2 Structural Equation Modeling 64 6.2.1 Hypotheses Testing 64 6.2.1.1 Testing the existence of relationships 64 6.2.1.2 Discussion on Hypotheses Testing 69 6.2.3 The revised research model 72 6.2.4 Adjustment of SEM model 73 6.2.5 Bootstrap Test 73 Chapter Five - Conclusion And Recommendation 77 Summary of Research Findings 77 Discussion of results and Implication 77 - vi - 2.1 Discussion of results and Recommendations 77 2.1.1 Perceived Quality 77 2.1.2 Airline Image 78 2.1.3 Perceived Value 78 2.1.4 Price 79 2.1.5 Customer Satisfaction 79 2.2 Implications 79 Limitations and Suggestions for the further researches 80 References 82 Appendix 88 Appendix A: Questionnaire 88 Appendix B: Descriptive Statistics 97 Appendix C: Reliability Test 99 Appendix D: Exploratory Factor Loading (EFA) 106 Appendix E: Confirmatory Factor Analysis (CFA) 116 Appendix F: Structural Equation Modeling (SEM) 124 Appendix G: Structural Equation Modeling (SEM) after adjusted 131 Appendix H: Bootstrap Testing 139 - vii - List of Tables Table 2.1 Table of Hypotheses 13 Table 3.1 Measuring Personal Evaluation 18 Table 4.1 Sample distribution of respondents’ demographics 26 Table 4.2 Descriptive Statistics – Perceived Quality 32 Table 4.3 Descriptive Statistics – Airline Image 34 Table 4.4 Descriptive Statistics – Perceived Value 35 Table 4.5 Descriptive Statistics – Price 36 Table 4.6 Descriptive Statistics – Customer Satisfaction 37 Table 4.7 Descriptive Statistics – Customer Loyalty 38 Table 4.8 The Cronbach’s Alpha – Perceived Quality 40 Table 4.9 The Cronbach’s Alpha – Perceived Quality after deleting SVQ4 41 Table 4.10 The Cronbach’s Alpha – Price 41 Table 4.11 The Cronbach’s Alpha – Airline Image 42 Table 4.12 The Cronbach’s Alpha – Airline Image after deleting IMA4, IMA5 42 Table 4.13 The Cronbach’s Alpha – Perceived Value 43 Table 4.14 The Cronbach’s Alpha – Perceived Value after deleting PVA3, PVA5 43 Table 4.15 The Cronbach’s Alpha – Customer Satisfaction 44 Table 4.16 The Cronbach’s Alpha – Customer Satisfaction after deleting CSA4, CSA7 45 Table 4.17 The Cronbach’s Alpha – Customer Loyalty 45 Table 4.18 KMO & Barlett’s Test – Independent & Mediators variables (First round) 47 Table 4.19 The Extraction Sum of Squared Loadings – Independent & Mediator variables (First round) 47 Table 4.20 The first round of Factor Analysis – Independent & Mediator variables 48 - viii - Standardized Regression Weights IMA PVA PVA PVA CSA CSA CSA CSA CLO CLO CLO SVQ7 SVQ6 SVQ5 SVQ2 SVQ1 PRI5 PRI4 PRI3 PRI2 PRI1 IMA1 IMA2 IMA3 PVA1 PVA2 PVA4 PVA6 CSA1 CSA2 CSA3 CSA5 CSA6 CLO1 CLO2 CLO3 CLO4 CLO5 < < < < < < < < < < < < < < < < < < < < < < < < < < < < < < < < < < < < < < - SVQ SVQ IMA PRI SVQ IMA PVA PRI SVQ CSA IMA SVQ SVQ SVQ SVQ SVQ PRI PRI PRI PRI PRI IMA IMA IMA PVA PVA PVA PVA CSA CSA CSA CSA CSA CLO CLO CLO CLO CLO Estimate 237 432 198 195 151 171 467 251 486 347 084 721 795 765 815 798 759 789 658 655 630 824 711 789 757 772 775 633 806 707 736 767 743 782 806 824 789 838 - 126 - Covariances SVQ < > PRI Estimate S.E C.R P Label 235 035 6.752 *** Correlations SVQ < > PRI Estimate 475 Variances SVQ PRI d1 d2 d3 d4 e5 e4 e3 e2 e1 e10 e9 e8 e7 e6 e13 e12 e11 e14 e15 e16 e17 e18 e19 e20 e21 e22 e23 e24 Estimate S.E C.R P Label 504 064 7.939 *** 483 059 8.218 *** 446 051 8.706 *** 228 030 7.578 *** 189 025 7.509 *** 192 024 7.918 *** 465 038 12.270 *** 376 033 11.269 *** 642 055 11.755 *** 326 030 10.855 *** 287 026 11.199 *** 355 034 10.475 *** 279 029 9.737 *** 422 035 12.036 *** 436 036 12.067 *** 420 034 12.308 *** 223 030 7.380 *** 379 035 10.872 *** 255 029 8.669 *** 280 026 10.750 *** 297 029 10.426 *** 255 025 10.349 *** 484 039 12.384 *** 270 025 10.771 *** 469 038 12.260 *** 386 032 11.943 *** 303 026 11.501 *** 362 031 11.845 *** 306 026 11.905 *** 279 024 11.520 *** - 127 - e25 e26 e27 Estimate S.E C.R P Label 220 020 11.172 *** 271 023 11.792 *** 226 021 10.859 *** Squared Multiple Correlations IMA PVA CSA CLO CLO5 CLO4 CLO3 CLO2 CLO1 CSA6 CSA5 CSA3 CSA2 CSA1 PVA6 PVA4 PVA2 PVA1 IMA3 IMA2 IMA1 PRI1 PRI2 PRI3 PRI4 PRI5 SVQ1 SVQ2 SVQ5 SVQ6 SVQ7 Estimate 056 393 622 601 702 623 679 650 611 553 589 541 499 650 401 601 596 573 623 506 680 397 429 433 623 577 637 664 585 632 520 - 128 - Model Fit Summary CMIN Model Default model Saturated model Independence model NPAR 66 378 27 CMIN 587.978 000 5938.208 DF 312 351 P 000 CMIN/DF 1.885 000 16.918 RMR, GFI Model Default model Saturated model Independence model RMR 039 000 285 GFI 900 1.000 227 AGFI 879 PGFI 743 168 211 NFI Delta1 901 1.000 000 RFI rho1 889 IFI Delta2 951 1.000 000 TLI rho2 944 Baseline Comparisons Model Default model Saturated model Independence model 000 000 CFI 951 1.000 000 Parsimony-Adjusted Measures Model Default model Saturated model Independence model PRATIO 889 000 1.000 PNFI 801 000 000 PCFI 845 000 000 NCP 275.978 000 5587.208 LO 90 211.476 000 5340.694 NCP Model Default model Saturated model Independence model HI 90 348.292 000 5840.131 FMIN Model Default model Saturated model Independence model FMIN 1.508 000 15.226 F0 708 000 14.326 LO 90 542 000 13.694 HI 90 893 000 14.975 - 129 - RMSEA Model Default model Independence model RMSEA 048 202 LO 90 042 198 HI 90 054 207 PCLOSE 741 000 AIC Model Default model Saturated model Independence model AIC 719.978 756.000 5992.208 BCC 730.188 814.475 5996.385 BIC 981.912 2256.171 6099.363 CAIC 1047.912 2634.171 6126.363 ECVI Model Default model Saturated model Independence model ECVI 1.846 1.938 15.365 LO 90 1.681 1.938 14.733 HI 90 2.032 1.938 16.013 MECVI 1.872 2.088 15.375 HOELTER Model Default model Independence model HOELTER 05 235 26 HOELTER 01 248 28 - 130 - APPENDIX G: STRUCTURAL EQUATION MODELING (SEM) AFTER ADJUSTED Unstandardized estimates - 131 - Standardized estimates Estimates Regression Weights IMA PVA PVA PVA CSA CSA CSA CSA CLO CLO SVQ7 SVQ6 SVQ5 SVQ2 SVQ1 PRI5 PRI4 < < < < < < < < < < < < < < < < < - SVQ SVQ IMA PRI SVQ IMA PVA PRI SVQ CSA SVQ SVQ SVQ SVQ SVQ PRI PRI Estimate S.E C.R P Label 237 058 4.126 *** 372 057 6.502 *** 170 049 3.505 *** 174 054 3.224 001 145 057 2.540 011 186 048 3.860 *** 540 074 7.269 *** 257 054 4.763 *** 473 059 8.029 *** 377 055 6.840 *** 1.000 1.132 076 14.938 *** 1.338 093 14.368 *** 1.133 074 15.324 *** 1.003 067 15.042 *** 1.000 977 067 14.531 *** - 132 - PRI3 PRI2 PRI1 IMA1 IMA2 IMA3 PVA1 PVA2 PVA4 PVA6 CSA1 CSA2 CSA3 CSA5 CSA6 CLO1 CLO2 CLO3 CLO4 CLO5 < < < < < < < < < < < < < < < < < < < < - PRI PRI PRI IMA IMA IMA PVA PVA PVA PVA CSA CSA CSA CSA CSA CLO CLO CLO CLO CLO Estimate S.E C.R P Label 817 067 12.221 *** 823 068 12.166 *** 756 065 11.691 *** 1.000 904 068 13.224 *** 946 067 14.085 *** 1.000 1.081 075 14.451 *** 1.013 070 14.510 *** 930 079 11.847 *** 1.000 968 066 14.621 *** 955 062 15.362 *** 932 058 16.178 *** 947 061 15.572 *** 1.000 1.039 061 17.093 *** 985 056 17.546 *** 968 058 16.668 *** 1.052 059 17.911 *** Standardized Regression Weights IMA PVA PVA PVA CSA CSA CSA CSA CLO CLO SVQ7 SVQ6 SVQ5 SVQ2 SVQ1 PRI5 PRI4 < < < < < < < < < < < < < < < < < - SVQ SVQ IMA PRI SVQ IMA PVA PRI SVQ CSA SVQ SVQ SVQ SVQ SVQ PRI PRI Estimate 245 431 191 197 146 181 468 253 485 384 721 794 763 816 800 759 789 - 133 - PRI3 PRI2 PRI1 IMA1 IMA2 IMA3 PVA1 PVA2 PVA4 PVA6 CSA1 CSA2 CSA3 CSA5 CSA6 CLO1 CLO2 CLO3 CLO4 CLO5 < < < < < < < < < < < < < < < < < < < < - PRI PRI PRI IMA IMA IMA PVA PVA PVA PVA CSA CSA CSA CSA CSA CLO CLO CLO CLO CLO Estimate 658 655 630 825 710 790 757 772 776 633 804 706 736 767 744 781 806 824 790 838 Covariances SVQ < > PRI Estimate S.E C.R P Label 233 035 6.733 *** Correlations SVQ < > PRI Estimate 474 Variances SVQ PRI d1 d2 d3 d4 e5 e4 Estimate S.E C.R P Label 503 063 7.927 *** 483 059 8.217 *** 444 051 8.696 *** 229 030 7.582 *** 185 025 7.462 *** 193 024 7.913 *** 466 038 12.277 *** 377 033 11.277 *** - 134 - e3 e2 e1 e10 e9 e8 e7 e6 e13 e12 e11 e14 e15 e16 e17 e18 e19 e20 e21 e22 e23 e24 e25 e26 e27 Estimate S.E C.R P Label 645 055 11.774 *** 325 030 10.836 *** 285 026 11.168 *** 355 034 10.478 *** 279 029 9.741 *** 422 035 12.037 *** 436 036 12.067 *** 420 034 12.308 *** 222 030 7.340 *** 380 035 10.892 *** 255 030 8.624 *** 280 026 10.759 *** 297 029 10.425 *** 255 025 10.344 *** 484 039 12.386 *** 272 025 10.826 *** 469 038 12.272 *** 386 032 11.957 *** 303 026 11.524 *** 362 031 11.856 *** 306 026 11.904 *** 279 024 11.512 *** 221 020 11.176 *** 270 023 11.778 *** 226 021 10.854 *** Squared Multiple Correlations IMA PVA CSA CLO CLO5 CLO4 CLO3 CLO2 CLO1 CSA6 CSA5 CSA3 Estimate 060 391 629 598 702 624 679 650 610 553 588 541 - 135 - CSA2 CSA1 PVA6 PVA4 PVA2 PVA1 IMA3 IMA2 IMA1 PRI1 PRI2 PRI3 PRI4 PRI5 SVQ1 SVQ2 SVQ5 SVQ6 SVQ7 Estimate 499 647 401 601 596 572 624 504 680 397 429 433 623 577 640 665 583 631 519 Model Fit Summary CMIN Model Default model Saturated model Independence model NPAR 65 378 27 CMIN 591.216 000 5938.208 DF 313 351 P 000 CMIN/DF 1.889 000 16.918 RMR, GFI Model Default model Saturated model Independence model RMR 039 000 285 GFI 900 1.000 227 AGFI 879 PGFI 745 168 211 - 136 - Baseline Comparisons Model Default model Saturated model Independence model NFI Delta1 900 1.000 000 RFI rho1 888 000 IFI Delta2 951 1.000 000 TLI rho2 944 000 CFI 950 1.000 000 Parsimony-Adjusted Measures Model Default model Saturated model Independence model PRATIO 892 000 1.000 PNFI 803 000 000 PCFI 847 000 000 NCP 278.216 000 5587.208 LO 90 213.496 000 5340.694 NCP Model Default model Saturated model Independence model HI 90 350.745 000 5840.131 FMIN Model Default model Saturated model Independence model FMIN 1.516 000 15.226 F0 713 000 14.326 LO 90 547 000 13.694 HI 90 899 000 14.975 RMSEA Model Default model Independence model RMSEA 048 202 LO 90 042 198 HI 90 054 207 PCLOSE 731 000 AIC Model Default model Saturated model Independence model AIC 721.216 756.000 5992.208 BCC 731.271 814.475 5996.385 BIC 979.182 2256.171 6099.363 CAIC 1044.182 2634.171 6126.363 - 137 - ECVI Model Default model Saturated model Independence model ECVI 1.849 1.938 15.365 LO 90 1.683 1.938 14.733 HI 90 2.035 1.938 16.013 MECVI 1.875 2.088 15.375 HOELTER Model Default model Independence model HOELTER 05 235 26 HOELTER 01 247 28 - 138 - APPENDIX H: BOOTSTRAP TESTING Parameter IMA SE SE-SE Mean Bias SE-Bias TDIST < - SVQ 0.058 0.003 0.250 005 0.004 0.996014 PVA < - SVQ 0.069 0.003 0.433 002 0.005 0.998406 PVA < - IMA 0.055 0.003 0.189 -.002 0.004 0.998406 PVA < - PRI 0.075 0.004 0.200 003 0.005 0.997608 CSA < - SVQ 0.074 0.004 0.150 004 0.005 0.996811 CSA < - IMA 0.049 0.002 0.178 -.003 0.003 0.997608 CSA < - PVA 0.074 0.004 0.471 003 0.005 0.997608 CSA < - PRI 0.078 0.004 0.248 -.006 0.006 0.995217 CLO < - SVQ 0.069 0.003 0.474 -.011 0.005 0.99123 CLO < - CSA 0.069 0.003 0.394 010 0.005 0.992028 SVQ7 < - SVQ 0.032 0.002 0.723 002 0.002 0.998406 SVQ6 < - SVQ 0.027 0.001 0.796 002 0.002 0.998406 SVQ5 < - SVQ 0.029 0.001 0.760 -.004 0.002 0.996811 SVQ2 < - SVQ 0.030 0.001 0.816 0.000 0.002 SVQ1 < - SVQ 0.025 0.001 0.802 0.002 0.002 0.998406 PRI5 < - PRI 0.040 0.002 0.761 0.002 0.003 0.998406 PRI4 < - PRI 0.034 0.002 0.790 0.000 0.002 PRI3 < - PRI 0.057 0.003 0.657 -0.001 0.004 0.999203 PRI2 < - PRI 0.050 0.002 0.652 -0.003 0.004 0.997608 PRI1 < - PRI 0.047 0.002 0.630 0.000 0.003 IMA1 < - IMA 0.030 0.002 0.824 -0.001 00.002 0.999203 - 139 - Parameter SE SE-SE Mean Bias SE-Bias TDIST IMA2 < - IMA 0.034 0.002 0.707 -0.003 0.002 0.997608 IMA3 < - IMA 0.038 0.002 0.791 0.001 0.003 0.999203 PVA1 < - PVA 0.041 0.002 0.757 0.000 0.003 PVA2 < - PVA 0.036 0.002 0.771 -0.001 0.003 0.999203 PVA4 < - PVA 0.038 0.002 0.778 0.003 0.003 0.997608 PVA6 < - PVA 0.044 0.002 0.632 -0.001 0.003 0.999203 CSA1 < - CSA 0.028 0.001 0.804 0.000 0.002 CSA2 < - CSA 0.040 0.002 0.707 0.000 0.003 CSA3 < - CSA 0.036 0.002 0.738 0.003 0.003 0.997608 CSA5 < - CSA 0.033 0.002 0.763 -0.004 0.002 0.996811 CSA6 < - CSA 0.035 0.002 0.743 0.000 0.002 CLO1 < - CLO 0.024 0.001 0.783 0.002 0.002 0.998406 CLO2 < - CLO 0.025 0.001 0.806 0.000 0.002 CLO3 < - CLO 0.035 0.002 0.821 -0.003 0.003 0.997608 CLO4 < - CLO 0.033 0.002 0.789 -0.001 0.002 0.999203 CLO5 < - CLO 0.021 0.001 0.836 -0.001 0.001 0.999203 - 140 -