Factors affecting loyalty of internet customers evidence form vietnam

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Nguyen Thi Kim Quyen FACTORS AFFECTING LOYALTY OF INTERNET CUSTOMERS: EVIDENCE FRO MASTER OF BUSINESS (Honours) Ho Chi Minh City – Year 2012 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Nguyen Thi Kim Quyen FACTORS AFFECTING LOYALTY OF INTERNET CUSTOMERS: EVIDENCE FRO ID: 60340102 MASTER OF BUSINESS (Honours) SUPERVISOR: DR DINH THAI HOANG Ho Chi Minh City – Year 2012 Loyalty of Internet customers in Vietnam - ACKNOWLEDGEMENTS I would not have been able to complete my thesis without the advice, assistance, understanding and encouragement of a number of people I would like to gratefully and sincerely acknowledge their assistance and support First of all, the most important person I would like to thank is my supervisor, Dr Dinh Thai Hoang Thanks to his valuable advice and generous guidance throughout the process of completing this thesis Secondly, I would like to express my gratefulness to Dr Nguyen Dinh Tho for his kindness in supporting me to deal with analyzing data and other issues of the thesis Furthermore, I would like to thank all of the staff at International School of Business – University of Economics Ho Chi Minh City who are always enthusiastic and give me a lot of administrative support, assistance and understanding Finally, I would like to give my gratefulness to all classmates who have been sharing with me all their knowledge and experience as well as happiness and difficulties during MBA course I would not complete my thesis without their encouragement and support In brief, it has been a long journey and I have grown in so many ways I would like to say “thank you” again for the involvement of everyone who has helped me to complete this thesis ABSTRACT For Internet service providers (ISP), it is essential for them to understand the critical factors that influence customer loyalty These issues are critical to the longterm business success of any service provider Based on the literature reviewed in the thesis, this study empirically investigates the impact of factors on customer loyalty A quantitative method via questionnaire survey was used to obtain the views of approximately 300 Internet users in Ho Chi Minh city regarding their opinions and perceptions about their current ISP and their intention to stay with them Multiple linear regression analysis was used to investigate the relationship between customer loyalty and influencing factors mentioned above According to the findings of this research, in order to retain internet service customers, providers need to take into consideration with factors such as network quality, price perception, perceived value and trust The results of this research are important for ISP to enhance and improve their competitiveness, in other words, to become successful and have more loyal customers, which will ultimately result in more profitability Keywords: customer retention, customer loyalty Loyalty of Internet customers in Vietnam -5 TABLE OF CONTENTS ACKNOWLEDGEMENTS ABSTRACT CHAPTER 1: INTRODUCTION .5 CHAPTER 1: INTRODUCTION .5 1.1 Introduction 1.2 Research background 1.3 The research objectives .7 1.4 The research questions 1.5 The research model 1.6 The research methodology 1.7 The research structure 1.8 Conclusion .8 CHAPTER 2: LITERATURE REVIEW 10 2.1 2.2 Introduction 10 Customer loyalty with internet service provider 10 2.2.1 Network quality and customer loyalty 11 2.2.2 Price perception and customer loyalty 11 2.2.3 Perceived value and customer loyalty 12 2.2.4 Trust and customer loyalty 13 2.3 Controlling factors .13 2.4 The research model 13 2.5 Conclusion 15 CHAPTER 3: RESEARCH METHODOLOGY 16 3.1 Introduction 16 3.2 The research approach 16 3.3 Measurement .16 3.4 Sample and Data collection 19 - Loyalty of Internet customers in Vietnam -6 3.5 Data analysis .20 3.6 Conclusion 22 CHAPTER 4: DATA ANALYSIS AND RESULT 23 4.1 Introduction 23 4.2 Preliminarily data analysis .23 4.2.1 Cleaning and screening data .23 4.2.2 Profile of respondents 23 4.3 Evaluating the measuring scales 25 4.4 Multiple Linear Regression analysis .32 4.4.1 Introduction 32 4.4.2 Computing variables 32 4.4.3 Assumption for Multiple Regression 32 4.4.4 Testing hypotheses .35 4.4.5 Controlling variables 37 4.5 Conclusion 39 CHAPTER 5: CONCLUSION AND IMPLICATIONS 40 1.1 Introduction 40 1.2 Conclusion 40 1.3 Implications of the study 41 1.4 Limitations and suggestions for further research 42 REFERENCES 43 APPENDIX A: QUESTIONAIRE 47 APPENDIX B: DATA ANALYSIS 53 - LIST OF FIGURES Figure 1: The theoretical model 14 Figure 2: The Histogram 33 Figure 3: The Nomal P-P Plot of Regression Standardized Residual 34 Figure 4: Scatterplot 34 LIST OF TABLES Table 1: Research questions and hypotheses .15 Table 2: Measuring scale for variables 19 Table 3: The profile of respondents 25 Table 4: The reliability statistics 27 Table 5: KMO and Barlett’s test 29 Table 6a: The pattern matrix of EFA result .30 Table 7b: The pattern matrix of EFA result .31 Table 8: The Cronbach’s alpha result - retest 31 Table 9: Collinearity statistics 35 Table 10: Hypotheses testing .36 Table 11: Regression with controlling variable of gender 37 Table 12: Regression result with controlling variable of income level .38 Table 13: Regression result with controlling variable of using experience 38 CHAPTER 1: INTRODUCTION 1.1 Introduction This research examines the driving forces of internet users’ loyalty and their intention to stay with their current provider Providers (ISP) among in existing the Internet context telecommunication sector This chapter of Service Vietnam will provide general information of research problem as well as research background, identify research objectives and research questions This chapter also briefly outlines research structure 1.2 Research background High-speed internet services are becoming more and more popular and the rapid development of information technologies affects every importance of aspect of our lives The information and communication technology is undeniable as it has been applied in various fields for the purpose of service enhancement Although basic Internet services had existed in Vietnam since the early nineties, until 1997, the first commercial Internet Service Provider (ISP) opened for business – Vietnam Data Communication Company (VDC) which belongs to Vietnam Posts & Telecommunication Groups (VNPT) Since then, Vietnam has been connected by two gateways: one in Hanoi connecting with Hong Kong and Australia, and the other in Ho Chi Minh City, which connects with the United States by Sprint Internet usage remains low in comparison with that of other Asian nations, yet connectivity has increased rapidly over the past few years, thanks to an initiative by the Ministry of Post and Telecommunications According to the internet statistic report of VNIC (Vietnam Internet Center), up to June 2012, the number of internet users in Vietnam is more than 31 million which is equivalent to the scale of 35.4 percent users per capita Over more than fifteen years of formation and development, together with the development of internet services, the number of ISPs has also remarkably increased, which leads to severe competition among ISPs, especially in a developing country like Cronin, JJ & Taylor, SA (1992) Measuring Service Quality: A Re-examination and Extension Journal of Marketing 56(3), 55 – 68 Dick, AS & Basu, K (1994) Customer loyalty: Toward an intergrated conceptual framework Academy of Marketing Science 22(2), 99- 113 Khatibi, AA, Ismail, S & Thyagarajan (2002) What Drives Customer Loyalty: An analysis from the Telecommunication industry Journal of Targeting, Measurement and Analysis for marketin 11(1), 34 – 44 Kim, H & Yoon (2004) Determinants of Subscriber Churn and Customer Loyalty in the Korean Mobile Telephony Market Telecommunication Policy 28, 751 – 65 Gotlieb, JB Grewall, D & Brown (1994) Consumer satisfaction and perceived quality: Complementary or Divergent Constructs Journal of Applied Psychology 79(6), 875 – 85 Gronroos (1990) Service management and marketing: Managing the moments of truth in service competition Jossey – Bass Inc., San Francisco, CA Gronroos (1988) Sevice quality: The six criteria of good perceived service quality Review of Business 9(3), 10 – Hair, JF, Anderson, RE, Tatham, RL & Black, WC (1998) Multivariate Data Analysis Prentice Hall, Upper Saddle River, N.J Hart, CW & Johnson, MD (1999) Growing the trust relationship Marketing Management 8(1), – 19 Hu, AW & Hwang (2006) Measuring the Effects of Consumer Switching Costs on Switching Intention in Taiwan Mobile Telecommunication Services Journal of American Academy of Business 9(1), 75 – 85 Jacoby (1975) A Brand Loyalty Concept: Comments on a Comment Journal of Marketing Research 12(4), 484-7 LeBlanc, G & Nguyen, N (1996) Cues used by customers evaluating corporate image in service firms: An empirical study in financial institutions International Journal of Service Industry Management, 7(2), 44 – 56 Lovelock, CH (1983) Classifying services to gain strategic marketing insights Journal of Marketing 47(3), – 20 Mohd R.B Yaacob (2011) Determinants of Customer Satisfaction towards Broadband Services in Malaysian 1(2), 123 – 134 Monroe, KB (1991) Pricing – Making Profitable Decisions McGraw-Hill, New York Morgan, RM & Hunt, SD (1994) The commitment-trust theory of relationship marketing Journal of Marketing 58(3), 20 -38 Murphy, JA (2001) The lifebelt: The definition guide to managing customer retention Jonh Wiley & Sons Ltd., Chichester Newman, WL (2006) Social Research Methods: Qualitative and Quantitative Approaches Pearson Education, Inc, Boston, USD Pallant (2007) SPSS Survival Manual: A Step by Step Guide to Data Analysis Using SPSS for Windows (Version 15) Allen & Unwin, Crows Nest, NSW Ranaweera, C., & Neely, A (2003) Some moderating effects on the service quality-customer retention link Internatonal Journal of Operations and Production Management 230-248 Ravald, A & Gronroos, C (1996) The Value Concept and Relationship Marketing’, European Journal of Marketing 30(2), 19 – 30 Reichheld, FF & Teal, T (1996) The Loyalty Effect Havard Business School Press, Boston Reynolds, FD, Darden, WR & Marktin, WS (1974 – 1975) Developing an image of the store-loyal customer: A life-style analysis to probe a neglected market Journal of Retailing 50(4), 73 – 84 Sekaran, U (2000) Research Methods for Business: A skill building approach John Wiley & Sons, Inc, Chichester Tabachnick, B.G & Fidell, L.S (1991) Using Multivariate Statistics 3ed, NY: HarperCollin Ticehurst, GW & Veal, AJ (2000) Business Research Methods: A Managerial Approach Pearson Education Pty Limited, Frenchs Forest, NSW Wang, Y Lo, H & Yang, Y (2004) An Integrated Framework for Service Quality, Customer Value, Satisfaction: Evidence from China’s Telecommunication Industry Information Systems Frontiers 6(4), 325-40 Woo, K.S & Fock, H.K.Y (1999) Customer satisfaction in the Hong Kong mobile phone industry Journal of Service Industry 19(3), 162 – 74 Zikmund, WG (2000) Business Research Methods Dryden Press, Fort Worth, TX APPENDIX A: QUESTIONAIRE QUESTIONAIRE Dear respondents, I am a student of the master program of International School of Business University of Economics Ho Chi Minh city I have been doing a research to identify factors whose impact on customer loyalty in telecommunication industry Please kindly share your valuable ideas about the issues in this questionnaire All your ideas shall strongly contribute to our research Section 1: Please select the appropriate answer for each question in this section: Who is your current Internet Service Provider? (Please choose only one answer – X)  VNPT Viettel FPT Others (Please specify):…………… How long have you been with your ISP? 1 to years …………  50 What is your job?  Students - 25-35 Employees Business owners Others Please specify: … What is your average income per month (VND)? Less than 5.000.000 5.000.000 – 10.000.000 Over 10.000.000 – 15.000.000 More than 15.000.000 Do you have additional comments about others factors that affect your loyalty with a ISP? Please share with us your kind ideas ………………………………………………………………………………………… ………………………………………………………………………………………… ………………………………………………………………………………………… ………………………………………………………………………………………… ………………………………………………………………………………………… Thank you so much for your contribution! Loyalty of Internet customers in Vietnam - 55 PHIẾU KHẢO SÁT Kính chào anh/chị, Tôi Nguyễn Thị Kim Quyên – học viên cao học chương trình thạc sĩ Viện Đào Tạo Quốc Tế (ISB) – Trường Đại Học Kinh Tế Tp.HCM Tôi thực đề tài nghiên cứu yếu tố tác động đến trung thành khách hàng với nhà cung cấp dịch vụ Internet thị trường thành phố Hồ Chí Minh Rất mong anh/chị dành thời gian thực bảng khảo sát bên Phần trả lời anh/chị giữ bí mật, có thơng tin tổng hợp báo cáo công bố Nếu anh/chị quan tâm đến đề tài, báo cáo sau hoàn thành gởi đến anh/chị để tham khảo Mọi đóng góp cho đề tài vui lòng gửi địa chỉ: kimquyennt@gmail.com Chân thành cảm ơn anh/chị Phần 1: Anh/ chị vui lịng chọn câu trả lời thích hợp cho câu hỏi sau: Anh/chị sử dụng dịch vụ Internet nhà cung cấp nào? (X)  VNPT Viettel FPT Khác:……………… Anh/chị sử dụng dịch vụ Internet nhà cung cấp bao lâu?  Ít năm Từ đến năm Từ đến năm Hơn năm Phần 2: Anh/chị vui lịng đánh giá mức độ đồng ý với phát biểu Anh/ chị khoanh tròn vào mức độ đánh giá theo qui ước sau: Hoàn tồn khơng đồng ý Trung lập (khơng có ý kiến) Mục NQ1 NQ2 NQ3 NQ4 PP5 PP6 PP7 Không đồng ý Hơi đồng ý Hơi không đồng ý Đồng ý Ý kiến Chất lượng mạng (Network quality) Tốc độ truyền tải liệu nhanh Tính hiệu đường truyền ln ổn định Thời gian kết nối dịch vụ đáng tin cậy Tơi kết nối mạng Internet nhanh vào lúc Quan niệm giá (Price perception) Giá dịch vụ sử dụng phù hợp Giá dịch vụ nhà cung cấp X rẻ so với nhà cung cấp khác Dịch vụ nhà cung cấp X tương xứng với Hoàn toàn đồng ý Đánh giá bạn 1 2 3 4 5 6 7 7 7 PP8 PP9 PV10 PV11 PV12 PV13 PV14 TT15 TT16 TT17 TT18 CL19 giá So với nhà cung cấp khác, dịch vụ nhà cung cấp X tương xứng với giá Tôi sẵn sàng trả nhiều tiền cho chất lượng dịch vụ tốt Giá trị cảm nhận (Perceived value) Nhân viên chăm sóc khách hàng ln có hỗ trợ cần thiết cho khách hàng Nhà cung cấp X xử lý, khắc phục cố dịch vụ cách nhanh chóng Nhà cung cấp X thông báo thông tin cần thiết để tơi sử dụng dịch vụ cách tiện lợi Tơi cảm thấy tiện lợi nhận hỗ trợ cần thiết nhà cung cấp X Nhìn chung, dịch vụ nhà cung cấp X tương xứng với giá cà , thời gian nổ lực khác Lịng tin (Trust) Tơi tin nhà cung cấp X sẵn sàng sẵn lịng hỗ trợ khách hàng Tơi tin nhà cung cấp dịch vụ thực cam kết với khách hàng Tôi tin nhà cung cấp có đủ khả kiến thức để thực nghĩa vụ với khách hàng Tôi tin nhà cung cấp ln đặt lợi ích khách hàng lên hàng đầu Lịng trung thành (Customer loyalty) Tơi giới thiệu với người khác nhà cung cấp X nhà cung cấp dịch vụ Internet 7 7 7 7 7 7 7 7 tốt Tôi tiếp tục sử dụng dịch vụ nhà cung CL20 cấp Nhà cung cấp X lựa chọn CL21 CL22 CL23 sử dụng dịch vụ Internet Tôi sẵn sàng mua dịch vụ khác cung cấp nhà cung cấp Tơi khuyến khích người thân bạn bè sử dụng dịch vụ nhà cung cấp Phần 3: Anh/chị vui lòng cung cấp số thông tin cá nhân cách chọn câu trả lời thích hợp Tơi cam đoan nội dung bảo mật sử dụng cho mục đích nghiên cứu Nam Nữ - Giới tính anh/chị: - Anh/ chị thuộc nhóm tuổi nhóm đây? < 25 - - 36 -50 >50 Nghề nghiệp anh/chị gì?  Sinh viên - 25-35 Nhân viên Chủ doanh nghiệp Nghề tự khác: ……… Thu nhập trung bình tháng (VND) anh/chị bao nhiêu?  Ít triệu Từ đến 10 triệu  Từ 10 đến 15 triệu Hơn 15 triệu Ngoài yếu tố đề cập đây, anh/chị nghĩ yếu tố ảnh hưởng đến trung thành anh/chị với nhà cung cấp dịch vụ Internet? Vui lòng chia sẻ với ý kiến quý báu anh/chị ………………………………………………………………………………………… ………………………………………………………………………………………… ………………………………………………………………………………………… ………………………………………………………………………………………… ………………………………………………………………………………………… Cám ơn anh/chị nhiều! APPENDIX B: DATA ANALYSIS I EFA Total Variance Explained Initial Eigenvalues Factor % of Cumulative Variance % 13.033 56.667 56.667 1.426 6.199 62.866 1.021 4.437 67.304 834 3.627 70.931 740 3.220 74.150 662 2.879 77.029 618 2.689 79.717 551 2.394 82.111 497 2.159 84.271 10 439 1.909 86.179 11 366 1.591 87.770 12 343 1.491 89.261 13 331 1.438 90.699 14 312 1.355 92.054 15 293 1.275 93.329 16 269 1.168 94.497 17 263 1.144 95.641 18 229 996 96.637 19 193 839 97.476 20 189 820 98.297 21 167 725 99.022 22 141 615 99.637 23 084 363 100.000 Extraction Method: Principal Axis Factoring Total Extraction Sums of Squared Loadings Total 12.727 1.077 640 516 426 % of Cumulative Variance % 55.336 55.336 4.684 60.019 2.781 62.800 2.241 65.042 1.854 66.896 Rotation Sums of Squared a Loadings Total 9.269 10.118 10.665 10.284 9.884 EFA AFTER DELETING ITEMS Factor Total Variance Explained Initial Eigenvalues Extraction Sums of Squared Loadings Rotation Sums of Squared a Total % of Variance Cumulative % Total % of Variance Cumulative % 11.224 56.118 56.118 10.925 54.625 54.625 1.308 6.542 62.660 974 4.872 59.497 1.003 5.017 67.677 627 3.137 62.634 813 4.067 71.744 501 2.505 65.139 700 3.500 75.244 448 2.239 67.378 600 2.998 78.242 594 2.968 81.210 518 2.588 83.799 433 2.163 85.962 10 380 1.901 87.863 11 359 1.796 89.660 12 320 1.602 91.261 13 311 1.555 92.816 14 278 1.388 94.204 15 272 1.361 95.565 16 251 1.255 96.820 17 200 1.000 97.820 18 181 907 98.727 19 168 838 99.565 20 087 435 100.000 Extraction Method: Principal Axis Factoring Loadings Total 8.230 9.561 8.689 8.241 7.721 II REGRESSION Model R 778 R Square Adjusted R Square 605 600 a Unstandardized Standardized Coefficients Coefficients Model B Std Error of Change Statistics the Estimate R Square Change F Change 81508 605 107.710 Beta df1 t Sig -1.476 141 (Constant) -.345 Std Error 234 Networkquality 224 071 203 3.162 002 Priceperception 376 072 309 5.211 000 Perceivedvalue 159 067 139 2.363 019 Trust 255 074 225 3.433 001 Model Correlations Collinearity Statistics Zero-order Partial Part Tolerance VIF Networkquality 693 185 119 341 2.931 Priceperception 706 297 195 399 2.507 Perceivedvalue 643 140 089 405 2.468 Trust 697 201 129 327 3.058 (Constant) REGRESSION WITH CONTROLLING VARIABLE OF GENDER Model R 784 R Square Adjusted R Square 615 608 a Model Change Statistics Std Error of the Estimate R Square Change F Change 80619 615 89.526 Unstandardized Coefficients Standardized Coefficients df1 t Sig -2.122 035 B Std Error Beta (Constant) -.507 239 Networkquality 225 070 203 3.202 002 Priceperception 378 071 311 5.305 000 Perceivedvalue 164 067 143 2.457 015 Trust 250 074 220 3.398 001 Gender 098 036 100 2.689 008 Model Correlations Collinearity Statistics Zero-order Partial Part Tolerance VIF Networkquality 693 188 119 341 2.931 Priceperception 706 302 197 399 2.508 Perceivedvalue 643 145 091 405 2.470 Trust 697 199 126 327 3.060 Gender 088 159 100 999 1.001 (Constant) REGRESSION WITH CONTROLLING VARIABLE OF USING EXPERIENCE Model R 780 R Square Adjusted R Square Std Error of the Estimate 608 601 81355 a Model Unstandardized Coefficients B Change Statistics R Square Change F Change df1 608 86.905 Standardized Coefficients Beta t Sig -.870 385 (Constant) -.217 Std Error 250 Networkquality 222 071 201 3.138 002 Priceperception 375 072 308 5.207 000 Perceivedvalue 161 067 141 2.396 017 Trust 241 075 213 3.221 001 Shortexp -.146 102 -.055 -1.435 152 Model Correlations Collinearity Statistics Zero-order Partial Part Tolerance VIF Networkquality 693 184 117 341 2.933 Priceperception 706 297 195 399 2.507 Perceivedvalue 643 142 090 405 2.469 Trust 697 189 121 321 3.112 Shortexp -.222 -.085 -.054 943 1.060 (Constant) REGRESSION WITH CONTROLING VARIABLE OF INCOME Model R 778 Adjusted R R Square Square a 606 599 Change Statistics Std Error of the Estimate 81743 Unstandardized Coefficients Model R Square Change F Change df1 606 85.747 Standardized Coefficients t Sig -1.587 114 203 3.146 002 072 309 5.194 000 162 068 142 2.395 017 Trust 253 075 223 3.395 001 Lowinco 063 101 023 622 535 B Std Error (Constant) -.387 244 Networkquality 224 071 Priceperception 376 Perceivedvalue Beta Correlations Model Collinearity Statistics Zero-order Partial Part Tolerance VIF Networkquality 693 185 118 341 2.932 Priceperception 706 297 195 399 2.507 Perceivedvalue 643 142 090 403 2.482 Trust 697 199 128 326 3.064 Lowinco 012 037 023 994 1.006 (Constant) ...UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Nguyen Thi Kim Quyen FACTORS AFFECTING LOYALTY OF INTERNET CUSTOMERS: EVIDENCE FRO ID: 60340102 MASTER OF BUSINESS... relationship between customer loyalty and its affecting factors in Vietnamese Internet service market Four factors are assumed to have positive effect on loyalty of Internet customers Data are collected... questions as follow: - What are the factors that influence customer loyalty in Internet services in Vietnam? - How these factors influence on loyalty of Internet customers? 1.5 The research model