The impact of values on customer loyalty after experiencing compensation process a study of car insurance industry in vietnam

RESEARCHBACKGROUND

MarketNon-lifeinsuranceisgrowing,inVietnam,thenon- lifeinsurancehasbeguntotakeshapein1965.From1965to1994wasa periodofnon- lifeinsuranceactivitiesexclusiveentirelywithaStateinsurancebusinessonly.Therefore, itsimpactontheeconomyislimited.Theturningpointhasimportantimplicationsforthed evelopmentofVietnam'sinsurancesectorismarkedb y 100/ND-CP decree,issued December18,1993oftheinsurance business.Vietnamnowhas29non- lifeinsurancecompanybothdomesticandforeignlicensingactivities.

Carinsuranceisalsogrowingstronglyandthebusinessislookingtobringbigrevenuesour ceforthenon- lifeinsurancecompanies,withrevenueleaderinallotherinsuranceproduct,MinhHuyen( 2013)statedthatsalesin2012reached22.7trillion.

Tobeabletocompeteandgrowinthemarketfullrigorsofthenon- lifeinsurancecompanytopayspecialattentiontoimportantfactoranddecidefactorthatis compensationservice.Therelevanceofperceivedfunctional,economic,emotional,ands ocialvalueassociatedwiththeusageofcarinsuranceisvitalinformationfornon- lifeinsurancecompaniesbecauseperceivedvaluehashighexplanatorypowerfortheloya ltyofinsured.

PROBLEMSTATEMENTANDRATIONALE

InVietnam,manypeoplestillhaveseveralquestionsbeforebuyinginsurancefortheircar. Thequestionslike:WhenIgetanaccidentdoestheinsurancecompanyattendtosupportm e?HowlongcanIgetbackmoneyfromaninsuranceclaim?

Doesinsurancecompanycomplywiththecommitmentastheypromised? Manyquesti onsanddebateisstillongoingcustomersandthepressraised,forexample,Binh,N.D.(2013)wrotethata carownerinQuangTrihasasked

XuanThanhinsurancecompaniescompensation29milliondong,aftersevenmonthsheo nlyreceived20milliondong.Aninsurancecompanyrefusedtocompensatecustomerfort hereasonoftheinsurancecontractstipulates'deadlinerequirementscompensationis180 days'andhesubmittedafterthistime,

(TungAnh,2013).Buycarinsuranceeasypayhard(2012)commentthatwhenthereisapr oblem,thecustomerisverydifficulttoreceivecompensationfrominsurance.

Everyyear,Vietnamhasthousandsoftrafficaccidents,MaiXuan(2013)showedthat,in2 012therewere36.376casesand29.318casesin2013.Inordertoreducerisks,thecarowner hastobuyinsurancefortheircars.However,whencustomerhadanaccident,theyneedtoc laimfrominsurancecompany,mostofthemarenotsatisfiedbecauseofstaffattitudes;pro ceduresforcompensation;amountofmoneycompensated,compensationprocesses et c.

KhanhHoa(2013),writethatAcustomerinDananghasvoiced"elements"BIDVInsuran ce(BIC)setfalseinformationtoevadeliabilityforcompensation.Andwecanseemore,T hyTho(2010)discussthatcustomerhavesubmitted16writtenrequeststoDragon

InsuranceCompany(BaoLong)compensationof$1.8 millionoversixmonthsbuthasonlyreceived10billionadvance.

Sotheaimofstudyistolookforthefactorsthathaveinfluencedthedecisionpsychologyan dbuyingbehaviorofcustomersforcarsinsuranceproducts.Fromthatwecandobetterand cangrowandsurviveinacompetitiveenvironmentlikethepresent,especiallywhenthefo reigninsurancecompanyareabouttobelicensedtooperateinVietnam.

Thisstudyistoidentify,measurefactorsaffectingloyaltyintentionanddeterminetherelat ionshipamongthemincarinsuranceofnon- lifeinsurancecompany.Theproposedresearchquestionsareasfollows:

Theresearchwillconducttostudytheimpactofvaluesoncustomerloyaltyintentiononcar insurance.Therefore,theresearchobjectmustbeinterestpeoplewhohaveboughtandexp eriencedthecompensationprocessofanyinsurancecompanyinHochiminhcity,andinca rinsuranceproductofnon-lifeinsurancecompany.

Innon- lifeinsuranceindustry,theempiricalstudiesoftherelationshipbetweencustomerloyalty andcarcompensationprocessarelimited.Compensationservicequalityisoneofthehigh estimportant factorsinanalyzingtheperformanceofnon

- lifeinsurance,sincetheirsurvivaldependsontheirservicequalitylevelstheyprovideforth eircustomers(PoretlaandThanassoulis,2005).Havingagoodwayinsupplyinggoodco mpensationprocessisa keytoachievecustomerloyaltywhichistheprimarygoalofbusin essorganizations,duetotheadvantagesofcustomer retention(Ehigie,2006).Thepresentresearchintendstotestwhetherthecarcustomersare happywiththecompensationprocessprovidedtothem,whichwilleventuallyleadcusto merloyaltyornot.Oneofthevitaltasksfortheinsurancecompanyistodogoodserviceco mpensation.Whathasthenon-lifeinsurancecompanydone?

Whatarethefactorsthataffectcustomerloyalty,thestudywillhelpthelifeinsurancecomp anyknowswhichfactors will influencemost thattheyneedtoinvestandfocusonit.

- Chapter1:Introducesthebackground,rationale,thescopeofresearchandthesign ificant.

- Chapter2:Theliteraturereview– theoverviewoftheframework,conceptual,theorieshistoricalresearchaboutthet opicofthethesis.Bythein- deeptheoriesreview,thestudyproposestheresearchmodelandthehypotheses.

- Chapter3:Theresearchmethodology– thischapterpresentstheresearchobjectandhowtocollectdata.Theresearchisdesi gnedfromthequestionnaireandmeasurementscaletothesamplingdesignandthe planforanalysis.

Thischapterintroducesthedefinitions,conceptsandtheoriesofcarcompensationprocess Moreover,thischapteralsostudiesrelatedtotheconceptualinordertodesigntheresearch modelandthehypothesisfortheresearch.

Incarinsurancewehavetwoproducts:thefirstiscarcivilliabilityinsuranceandthesecond iscarphysicaldamageinsurance(onewayortwowayinsurances).InthisstudyIrefertoca rphysicaldamageinsurance.

- Unexpectedaccident,beyondreasonablecontroloftheAutomobileowneranddri verinthefollowingcases:Collision,upturning,fall,fire,explosion,otherobjectsi mpactingtheautomobile.

- Forcemajeurecausedb ythenature:Storm,flood,lightning,earthquake,hail,lan dslideandTsunami.

- Prevent,limitadditionalloss,protectandtakethedamagedautomobiletotheneare stserviceagentbutnotexceeding10%ofthesuminsuredatmost.

Theinsurancecompanywillpaytheinsurancecompensationwithin15daysfromtherece iptoffullandvalidrequestdocumentforcompensationandmustnotprolongforover30da ysincasethatitisnecessarytoverifythedocuments.

- Activelyrescuing,limitingthebodilyinjuryordamagestoproperty,protectingth eaccidentscene,atthesametimemustnotifyimmediatelytothenearestPolicestat ion,insurancecompanytocoordinateinsolvingtheaccidentconsequences,Pjico (2009).

- NotifyinginwrittentotheInsurancecompanywithin05daysfromtheoccurrence ofaccident(exceptforthecasethelegitimatereasonsaregiven).Incasetheautomo bileislost,robbed,theAutomobileowner(ordriver)mustnotifyimmediatelytoth ePolicestationorthelocalauthoritywheretheeventhappenedandwithin24hours mustnotifyinwrittentoinsurancecompany.Pjico(2009)

- Notallowedtomoveoutoftheaccidentscene.Itisnotallowedtoremoveorrepairt hepropertywithouttheconsentofinsurancecompanyhasnotsurveyedtheactual damagesorinsurancecompanysurveyedbutithasnotagreedthereasonablerepai roption),exceptforthecasethatit isnecessarytoensurethesafety,preventthebodilyinjuryordamagestopropertyo rmustimplementattherequestoftheauthorizedbobby.Pjico(2009)

Party,theAutomobileownermustreservetherightofcomplaintandtransfertheri ghtofclaimingforcompensationtoinsurancecompanywithintheamountcompe nsatedbyinsurancecompanyenclosedwithallrelatednecessarydocuments.Pjic o(2009)

- TheAutomobileowner,drivermustbehonestincollectingandprovidingaccident information,documentsintheRequestdocumentforcompensationandcreatefav orableconditionsforinsurancecompanyduringthetruthfulnessverificationofsu chdocuments.Pjico(2009)

- Whentheinsuranceeventhappens,alldamagestoproperty(suchasautomobile,g oods,otherproperties….)aresurveyeddirectlybyinsurancecompanyoritsautho rizedpersoninthepresenceofAutomobileowner,driverorlegalrepresentativeof theAutomobileownerinorderto determinethecausesanddamagelevel.Thedamagesurveyfeesshallbebornbyin surancecompany.Pjico(2009)

- IncaseinsurancecompanyandAutomobileownercannotagreethecausesandda magelevel,theindependentsurveyorshallbeappointedtocarryoutthesurvey.Inc asebothpartiescannotagreetheappointmentofindependentsurveyor,eitherpart yrequirestheCourtintheplacehappeningdamagesortheresidenceplaceoftheAu tomobileownertoappointtheindependentsurveyor.Theconclusionofindepend entsurveyorisbindingonbothparties.Pjico(2009)

- Fortheaccidentswhichinsurancecompanyhasnoconditionforsurveyorhasnoa ccidentreportfromthePolice,theAutomobileowner,drivermustprovidealldetai ledinformationofthecauses,developmentsoftheaccident,damagelevelanddoc uments,damagephotos(ifany)tomakethegroundsfordeterminingcompensatio n.Pjico(2009)

Functionalvalueistheutilityderivedfromtheperceivedqualityandexpectedperformanc eofproduct(Sweeney,J C a n d S o u t a r , G N , 2 0 0 1 ).Inthispresentwerefertofunct ionalvalueofacompensationprocess,thatisthehelpful,considerateofthestaff,therespon dofinsurancecompanywhencustomersneedhelpfromthem.

Economicvalueistheutilityderivedfromtheproductduetothereductionofitspercei vedshorttermandlongtermcosts(Sweeney,J.C.andSoutar,G.N.,2 0 0 1 ).Howw eknoweconomicvaluecompensationthatarefastpayment,satisfactoryofcustomer saboutamountofpayment,timesavingandcompactprocedure.

Thatistheutilityderivedfromthefeelingsoraffectivestatesthata productgenerates(Swe eney,J.C.an d Soutar,G.N , 2001).Doescompensationprocessgivecustomerpeace ofmindandconfidence,isitsenseofsecurity,enhancedwellbeing.Thesefeelingscreatee motionalvalueincompensationprocess.

Theu t i l i t y d e r i v e d f r o m t h e p r o d u c t ’ s a b i l i t y t o e n h a n c e s o c i a l s e l f - c o n c e p t(Sweeney,J C a n d S o u t a r , G N , 2 0 0 1 ).WhenIbuyc a r insurancef r i e n d s andcolleaguesenvyme,itimprovesthewayrisktransferforsociety.W henIhavecar i nsu ra nce ithelps m e tofeel d ist in ct fromtheot he rpeople becauseIcanbeconfidencetodrive.

Customerloyaltyistheresultofanorganization’screatingabenefitforcustomerss othattheywillmaintainandincreasinglyrepeatbusinesswiththeo r g a n i z a t i o n (Anderson,&Jacobsen,2000).

WhenIhavechosentobuycarinsurance o f t h i s c o m p a n y , I musta l s o toe n c o u r a g e f r i e n d s a n d r e l a t i v e s t o buy,too.

Thepresentstudyreferstowhencustomersbuyinsuranceproducts,theinsuredg e n e r a l l y mostinterestedinwhenevertheaccidentoccurred,thestaffareveryh e l p f u l a n d c o n s i d e r a t e , a n d alwaysr e s p o n d p r o m p t l y ando n t i m e ?

Clearly,t h e s e factorsgreatlyinfluencetheloyaltyandcontinuedselecti ngnext year'si n s u r a n c e , whichisthebasisofforminghypotheses.

Intermsofe c o n o m i c compensationinsurance cangreatly influencethe cus tomers,therearemanyfactorsaffectthisproblem,thecompensationq u i c k l y andsatisfactorily,thesimplestprocedureisthefactorsdirectlyimpactt h e e c o n o m i c v a l u e a n d t h e d e c i s i o n t o c o n t i n u e t o w o r k w i t h t h e i n s u r a n c e company.

Therefore,t h e i n f l u e n c e o f economicv a l u e o n C u s t o m e r L o y a l t y m a y varyb e t w e e n thetimeofcompensationandamountofcompensation.He nce,economicvalueistherationalebehindthenextproposedhypothesis:

Anu n u s u a l i n c i d e n t o c c u r r e d o n t h e r o a d a l w a y s c r e a t e s c o n f u s i o n , mentalr e s t l e s s n e s s Theaccidentisalwaysfacedwiththelossoffinanci alande mo t i o n al impacti s verys t r o n g I n s u r a n c e i s f i n a n c i a l l y s e c u r e a n d c r e a t e c o n f i d e n c e f o r o u r c u s t o m e r s , a n d t h i s onlyr e a l l y playw h e n c o m p e n s a t i o n i n s u r a n c e givescustomerstheconfidencea ndpeaceof mindandsafety whene n g ag e d traffic.Therefore,Emotionalvalueis therationalebehindtheproposedh y p o t hesi s:

Socialvalue:whatweconsidertobeimportantinsocialinteractionsbetwee npeople.i t w a s , ‘ a p r o c e s s w h e r e b y o r g a n i z a t i o n meett h e i r n e e d s f o r g o o d s , s e r v i c e s , worksandutilitiesinawaythatachievesvalueformoneyonaw holelifeb a s i s i n termso f g e n e r a t i n g b e n e f i t s t o s o c i e t y andt h e e c o n o m y , w h i l s t m i n i m i z i ng damagetotheenvironment.

Insurancep r o v i d e s a n e f f i c i e n t mechanismo f r i s k t r a n s f e r byp o o l i n g i d i o sy n c r a t i c risks.Intechnicalterms,suchriskpooling,basedonthe lawoflarge n u m b e r s , p r o v i d e s v a l u e i n t h a t t h e p r e m i u m p a i d byi n d i v i d u a l policyholdersissmallerthanthecostofanexpectedmaximumlossoccurr ence.

Bychargingapremiumthatreflectstheunderlyingrisks,insurance providesanimportants i g n a l t o p o l i c y h o l d e r s a n d t h e e c o n o m y atl a r g e , t h e r e b y o ff er in g in c en ti v e s forriskmitigation.Insurersalso giverisk managementadviceands erv i c es toindividualsandcompanies.Therefore,S ocialValueistherationaleb eh i n d thefollowingproposedhypothesis:

Studya l s o E x p l o r e t h e d i f f e r e n c e b e t w e e n customerg r o u p s int e r m o f c a r o w n e r anddriver.Theownersarepeoplealsodrivebythemselvese veryday,i n thisgroupwecanseemostofregulationsandproceduretheycanunderstan danddoitveryeasy,butwithgroupofdriverswhoonlydrivefortheowner, withl o w e d u c a t i o n , s o i t i s d i f f i c u l t f o r themd o c o m p l e t e p r o c e d u r e a n d understandregulationsofinsurancecompany.

H5:Thereisdifference impactlevelofva l u e s andcustomerloyalty betwee no w n e r anddrivergroups.

TheconceptualframeworkguidingthepresentstudyisdepictedinFigure2.2 Basedo nt h e l i t e r a t u r e r e v ie w , h y p o t h e s i z e d r e la t i o n s a m o n g t h e la t e n t v ar i ab l es havebeenderived.

H1:FunctionalvalueisassumedtopositivelyinfluenceCustomerLoyalty.H2:Econom icvalueisassumedtopositivelyinfluenceonCustomerLoyalty.H3 : Emotionalvalueis assumedtopositivelyinfluenceonCustomerLoyalty.H 4 : Socialvalueisassumedtopo sitivelyinfluenceonCustomerLoyalty.

H5:There is d i f f e r e n c e impact l e v e l o f val ues andc u s t o m e r loyalty be t ween o w n e r anddrivergroups.

Minimal: Studying events as they normally occur Manipulationand/o r control and/orsimulation Type of investigation

- Causal Relationship Correlations Group differences

Purpose of the study - Exploration Description Hypothesis testing

Goodness of data Hypothesis testing Problem statement

Time horizon - One shot (Cross- sectional) Longitudinal

Unit of analysis (Population to be studied)

Sampling design - Probability Sample size

Chapter2 p r e s e n t e d t h e r e s e a r c h m o d e l a n d t h e r e s e a r c h h y p o t h e s e s T h i s chapterpresentstheresearchprocess,theresearchobjectandt hewaythatdataiscollected.Theresearchisdesignedfromthequestionnai retothesamplingd e s i g n andtheplanforthedataanalysis.

Ther e s e a r c h m e t h o d o l o g y i n c l u d e d t h e p h a s e o f q u a l i t a t i v e s t u d y a n d q u a n t i t a t i v e study.Thequalitativestudywasconductedbyin- depthinterviewo ff o c u s g r o u p I n t h e p h a s e o f q u a n t i t a t i v e study,t h e c o n s t r u c t i o n o f me asu r em en t s c a l e s a n d t h e d e s i g n o f q u e s t i o n n a i r e b a s e d o n s e l e c t e d a n d a d j u st e d measurementscaleswereconducted.

Finger3.1:Researchdesignandhowdatacollectionmethodfitin(Sekaran,U andB ougie,R.,2011) 3.1QUALITATIVERESEARCH

Thep u r p o s e o f q u a l i t a t i v e r e s e a r c h s t e p i s t o m a k e c l e a r t h e c o n c e p t s a n d in terpr et t h e it ems frommeasurements c a l e based o n t h e stan dpoint o f customer.H e n c e , t h e n e c e s s a r y m o d i f i c a t i o n c a n b e c a r r i e d o u t ino r d e r t o i n c r e a s e t h e p o w e r o f s c a l e I n a d d i t i o n , t h i s s t e p a l s o p r o v i d e s t h e opportunitiestogainnewidea,newitemstoenhancetheresearchmodelandm e a s u r e m e n t scale.

The technique employed was the focus-group interview – themostwell- knowng r o u p interviewtechnique- becauseitcanprovidehistoricalinformationandth e i n t e r a c t i o n w i l l e n r i c h t h e i n f o r m a t i o n f o r r e s e a r c h ( D o n a l d & Pamela,2 0 0 6 ) I t w a s v a l u a b l e i n t h e s c e n a r i o o f thisr e s e a r c h a s h e l p i n g r e s e a r c h e r obtaing e n e r a l b a c k g r o u n d a b o u t t h e t o p i c , i n t e r p r e t e x i s t i n g r e s e a r c h e d f i n d i n g s a n d p r o v i d e n e w i d e a f o r m o d i f y i n g a n d s u p p l e m e n t i n g n e w components.

Theparticipantsoffocusgroupwerethepeoplewhohasexperiencesofcompensa tionandwhoreally interestedinthisproblem,andpeoplewhow o r k e d inc o m p e n s a t i o n o f ins urancec o m p a n y , w h o u n d e r s t a n d whattheo w n er ordriverneedwhenth eyhaveaccident.

The general rule is keep conducting focusgroup interviews until no newinsightsa r e g a i n e d ( D o n a l d & P a m e l a , 2 0 0 6 ) T h e s c r i p t f o r i n t e r v i e w w a s p r e p ar e d i n a d v a n c e T h e r e s e a r c h e r l e d t h e d i s c u s s i o n i n f o c u s g r o u p interview.Theinterviewees presented theirp r i v a t e opinionsaccording tothe q u es t i o n s i n s c r i p t p r e p a r e d byr e s e a r c h e r b e f o r e a n d c r i t i c i z e d t h e p r e v i o u s i deasuntilnoinsightsweregained.

Thefindingsoffocusgroupinterviewgotagreementsofinterviewersonsomeco n tents, someothercontentsneedmodified,complementedtobemoreappr opriate.

Measurements c a l e f o r v a l u e s w a s a d a p t e d f r o m K o l l e r , F l o h , a n d Z a u n e r ( P s yc h o l o g y andmarketingDoi:10.1002/ mar)andmodifiedthroughq u a l i t a t i v e r e s e a r c h w i t h 3 7 i t e m s ( 2

CONCEPT ORIGINALSCALES CURRENTSCALES(CONTEXT) EXPLANATION Functionvalue

Definition:Theutilityderiv edfromtheperceivedq ua l i t y andexpectedp e r for m a n c e ofthep rodu ct (Sweene y, J.C.and S outar, G.N.)

Hasconsistentquality Hasdonecompensationasp r o m i s e d intheinsurancec o n t r a c t conceptsareadjustedtos uittheresearchcontext

Iswellmade Compensationprocess closely conceptsareadjustedtos uittheresearchcontext

Has an acceptables t a nd a r d ofqual

Hasanacceptablestandardofq u a l i t y Haspoorworkmanship Professionalcompensationp r o c e s s conceptsareadjustedtos uittheresearchcontext

Wouldnotlastalong time quickclaimsettlementascommi tment conceptsareadjustedtos uittheresearchcontext

Would performc on si s t en tl y

Staffisprofessional,accuratec o u n s e l i n g andalwayscomet i m e l y whencustomerhavean new conceptsunders t u d y accident.

Theprocessofcompensationo f companyXissimpleandconve nient new conceptsunders t u d y

EconomicvalueDefinitio n:T h e u t i l i t y d e r i v e d f r o m t h e p r o d u c t duetothereductionofitsp e r c e i ve d shorttermandl ong er termcosts(Sweeney,J.C

Is reasonably priced Is reasonably price Offersvalueformoney Offersvalueformoney

Is agoodproductforthep r i c e meaningfulconceptne a r l y overlapwithother concepts inthec o n t e x t ofresearch Wouldbeeconomical Wouldbeeconomical

Comparedtotheothersi n s u r a n c e , my insuranceiseconomical conceptsareadjustedtos uittheresearchcontext

Is fairly priced meaningfulconceptne a r l y overlapwithother concepts inthec o n t e x t ofresearch

Is onethatIwouldenjoy Is onethatIwouldenjoy Wouldmakemewanttousei t

Is onethatIwouldfeelre la xed aboutusing conceptdoesnotfitinth e contextofresearch

Wouldmakemefeelgood conceptdoesnotfitinth e contextofresearch Wouldgivemepleasure Wouldgivemepleasure

Is onethatIwouldfeelase ns eof security conceptsareadjustedtos uittheresearchcontext

Definition:Theutilityd er iv e dfromtheproduct’sa b i l i t y t o e n h a n c e s o c i a l s e l f -c o n c e pt (Sweeney,

Buyingcarinsurance,youhelpt o r e d u c e theeconomicburdenf o r familiesand societyashavingcaraccident conceptsareadjustedtos uittheresearchcontext

Buyingcarinsuranceis thatyou haveresponsibilitytopr o t e c t t helivesandpropertyofthemselv esandothers. conceptsareadjustedtos uittheresearchcontext

Wouldmakeagoodi mpressiononother pe opl e conceptdoesnotfitinth e contextofresearch

Customerv a l u e isassume dtobethe key d e t e r m i n a n t ofp o s t c o n s u m p t i o n i n t e n t i o n s suchasl o y a l t y a n d w o r d ofm o u t hr e c o m m e nd a t i o ns (

Inthefuture,Iwillbuyac ar fr omthisbrandagain

Inthefuture,Iwillbuyins u ra n c e fromthisCompany conceptsareadjustedtos uittheresearchcontext

I considerbuyingtheinsurance ofthiscompanyism y f i r s t choiceformy car conceptsareadjustedtos uittheresearchcontext

I recommendmycar I onlypaymyattentiontothisi n s u r a n c e company conceptsareadjustedtos uittheresearchcontext

Beforecarryingoutmaindatacollection,thestudyhadadiscussionwithexpertsi ni n s u r a n ce i n d u s t r y a t0 2 i n s u r a n ce c o m p a n i e s a b o u t us i n g t h e p r e v i o u s measurement scale.TheexpertfindthescaleisclearandfinetouseinVietnam. Howevertheresearchobjectisalmostdriversosomedefinitionsmaynoteasyfort h em tounderstandwell.Thereforethemodificationisneeded.

Thequestionnaireincludedthreeparts.Thefirstpartwasintroduced about generalinformation.Thesecondpartisthemainpart,itwascomposedbyfiveitems, thef i r s t talkaboutFunctionalvalue,thesecondaboutEconomicvalue,thethirdaboutE m ot i o n al v a l u e , t h e fo ur th ab ou tS oc ie ty valueand th ela st C u s t o m e r L o y a l t y T h e thirdpartisaboutothersinformation.

23itemofthemainpartmeasuretheimpactofvaluesoncustomerloyaltyaftere x p e r i e n c i n g compensationprocess,theywereusedLikerttypescaleon5– pointanchoredwith1=“stronglyd i s a g r e e ” , 2=“Disagree”,3=“Neutral”,4=“ Agree”,5=“stronglyagree”.

- Validitytesto f t h e measurements c a l e bythe e x p l o r a t o r y f act or analysi s( E F A )

Descriptivea n a l y s i s i s a d i s c i p l i n e t h a t d e s c r i b e s t h e mainc h a r a c t e r i s t i c s o f a co ll ectio n ofdata.Theaimofthedisciplineistosummarizeasetofda ta.Thisisunlikeinductiveanalysiswherethedataisusedtolearnabouttheentitiesthat thed at a isrepresentingorwecanlearnAdescriptiveanalysisisaconclusiontech niquethatisusedtodescribesomekeyfeaturesofdatainaresearchstudy.They giveasimplesummaryaboutasamplefromtheresearchstudy.

Accordingt o C o n n e l y ( 2 0 1 1 , p 4 5 ) , “ C r o n b a c h ’ s a l p h a i s u s e d a s o n l y o n e c r i t e ri o n f o r j u d g i n g instrumentso r s c a l e s I t o n l y i n d i c a t e s i f theitems“ h a n g t o g e t h e r ; ” it doesnotdetermineiftheya r e measuringtheattributetheya r e s u p p o s e d tomeasure. Therefore,scalesalsoshouldbejudgedontheircontentandconstruct validity”.

Thes c a l e ofresearchisu s u a l l y a s s e s s e d throughmethodsCronbach’s alphar eli ab il ity coefficient Criteria forevaluatinga standard scale is:Cronbach's Alphaanalysis:α>0.6,thecorrelationcoefficientgross>0.3(Nunnally&Burnstein,1

CronbachAlphatoohigh(>0.95),itappearsl i k e l y s u c c e s s o r i n t h e o b s e r v e d v a r i a b l e s i n t h e s c a l e T u r n e x c e s s i s observedvariablesmeasuringa conceptalmostcoincidewithothermeasurementv ar i ab l e s , similartothecaseo fmulticollinearityinregression,whereasredundantv ar i ab l e s areeliminated.

Besides,thescaleitemisomittedifthecorrecteditem- totalcorrelationinSPSSisb e l o w 0 4 – t h e t h r e s h o l d v a l u e o f c o r r e c t e d i t e m - t o t a l c o r r e l a t i o n u s e d i n t h e r es e ar c h Moreover,thescaleitemisalsotakeno utoftheoverall scaleifthevalueofC r o n b a c h ’ s A l p h a ifD e l e t e d i s h i g h e r t h a n t h e v a l u e o f o v e r a l l C r o n b a c h ’ s Alpha.

Cronbach’salphaisthemostcommonlyusedmeasurementtotestthereliabilityori n t e r n a l consistencyofpredefinedscalesusedinastudy.Thisindexwasoriginallyd e r i v e d byKu der&Richardsonfordichotomouslyscoreddata(0or1)andlatergeneralize d byCronbachtoassessanyscoringmethod.Thehigherthealphascore,t h e morer e l i a b l e t h e g e n e r a t e d s c o r e i s A h i g h a l p h a s c o r e r e p r e s e n t a h i g h vari anceo f t h e s c a l e s A s c o r e f r o m 0 7 0 t o 0 9 5 i s g e n e r a l l y c o n s i de r e d t o b e acceptabl e.

ExploratoryFatorAnalysis(EFA)isappliedtochecktheuni- dimensionalityandc o n v e r g e n t validityofmeasurement(Hau,2012).There searchusedthevalidity t e s t appliedmethodandcriteriausedinEFAasfollow:

Olkin)indexmeasurethesamplingadequacy.AccordingtoHau(2012),theKMOishigherthan0.6(practicalsignificant)to support the factor analysis,andifKMO isless than0.5indicatesitis nota b l e toprocessthefactoranalysis.

;w h i l e v a l u e s a r e g r e a t e r t h a n ± 0 5 i s n e c e s s a r y f o r p r a c t i c a l si g n i f i c an c e H o w e v e r , i t a l s o d e p e n d s o n t h e s a m p l e s i z e ; t h e r e q u i r e d factorloadingforthisresearchis0.45asper(Hung,2013).

Multiplelinearregressionanalysisisamethodforanalyzingtheeffectsofseverali n d e p e n d e n t variablesconcurrentlyonadependentvariable.Therearesomem e a s u r e m e n t s c o r e s t h a t w o u l d b e u s e d i n r e g r e s s i o n a n a l y s i s : u n - s t a n d a r d i z e d coefficientbeta,R-Square,adjustedR-quare,multi- collinearitywithVIF.

Multiple linear regressionmethodisused toanalyze andunderstandwhethertherearet h e l i n e a r c o r r e l a t i o n s amongt h e f a c t o r s Byt h i s a n a l y s i s , t h e d e p e n d e n c e v ar i an c e s can be explainedor predictedbytheindependencevariances.

Moreover,t hemultiplelinearregressionisusedtotestthehypothesesofresearch modeltof i n d o u t h o w t h e f a c t o r s F u n c t i o n a l v a l u e , Economicv a l u e , E m o t i o n a l v a l u e , S o c i et y valuehaveimpactedontheLoyaltyofcustom erwhohaveexperienceofc o m p e n s a t i o n process.

(2010,p.156)claimedthatthereisthedifferencebetweentheactualandp r e d i c t e d valuesof dependentvariable.Thatmeanstherandomerrorwill occurwhenpredictingsampledata.Itiscalledtheresidual(εore)Basedonthesestudies, themultipleregressionformulawillbe

+βnXn+εWherein:Y:isthedependentvar iablea:isconstant β:iscalledbetaweight,standardizedregressioncoefficient,orbetacoefficientX : isthepre dictorenteredintotheequationinasinglestep? ε:istheresidual

Moreover,Meyers,Gamst,andGuarino(2006,p.161)introducedthevalueofR 2 indicat inghowmuchvarianceofthedependentvariableisaccountedforbyt h e fullregressionm odel.Therefore,thehigherthevalueofR2,thegreatertheE xp lanato ry powerofthereg ressionequation(Hairetal.,2010)

- TheSig.levelofrelevantexplanatoryvariableislessthan0.05,thehypothes isissupported(Hairetal2006).

F v a l u e ( v a r i a n c e inflationfactor)indicatehowmuchofaspecificindepen dentvariableisnotex p l ai n ed byanotherindependentvariableinthemodel(Se karan&Bougie,2011).Thepossibilityofmulticollinearityexistswhen thetolerancevalueis lessthan0.1.

- Thes t a n d a r d i z e d c o e f f i c i e n t β e x p l a i n s t h e r e l a t i o n s h i p b e t w e e n t h e independentv a r i a b l e a n d d e p e n d e n t v a r i a b l e T h e p o s i t i v e β s h o w s t h e po si ti v e r e l a t i o n s h i p ofi n d e p e n d e n t v a r i a b l e a n d d e p e n d e n t v a r i a b l e , t h e negative βs h o w s t h e ne ga ti ve r e l a t i o n s h i p i nd epe nde nt va r i a b l e an ddependentvariable.Andthereisnorel ationshipiftheβvalueisequalto0.

- Theβvalueisusedtocomparetheimpactofeachindependentvariabletoap a r t i c u l a r dependentvariable.Theindependentvariablehasahighervalueofβmea nsthatindependentvariablehasastrongerinfluenceonthed ep en dent variable.

Thec h a p t e r p r e s e n t e d t h e r e s e a r c h p r o c e s s i n d e t a i l w h i c h isf o l l o w t h e quantitativeapproachsurveymethod.Therewere138observations.Thisc hapteral so ou tl in ed themethodologyfortheanalysisprocess:fromtestthemeasurements c a l e t o testingthemodelandhypotheses.Inthenext chapter,chapter4showstheresultsoftheanalysis.

Researchmethodologywaspresentedandthemeasureswerepreliminarilytestedi n chapter3.Theresultsfromtheexploratorystudyshowedthatallmeasuresarev a l i d T h i s c h a p t e r o u t l i n e s t h e o f f i c i a l a s s e s s m e n t o f measuresa n d h y p o t h e s e s t e s t i n g a s w e l l a s t h e i n t e r p r e t a t i o n o f t h e r e s u l t , i n p a r t i c u l a r , f o u r p a r t s a r e in cl ud ed int h e c h a p t e r : p a r t o n e b r i e f s t h e d e s c r i p t i v e d a t a a n a l y s i s ; p a r t t w o present theassessmentofmeasuresado pting

Cronbach’sAlphareliabilityanalysisa n d ExploratoryFactorAnalysis;partthreeg oesthroughthehypothesestesting, p a r t fourpresentsdiscussionofresults.

A total of 150 questionnaires were distributed to drivers and car owners, resulting in 145 completed samples, while 7 samples were deemed unsatisfactory The final sample size was 138, and the data were analyzed using SPSS software In assessing the normality of the distribution of scores, the significance values for all variables were greater than 0.05, which is typical in large samples Since the 5% trimmed mean values of all variables did not significantly differ from the original mean values, outliers were retained in the dataset Variables in the study were measured using a multi-item scale, employing a 5-point Likert scale ranging from 1 (strongly disagree) to 5 (strongly agree) The scale values were calculated by averaging the observed variables used to represent the concepts under investigation.

Thef i n a l q u e s t i o n n a i r e i s i n V i e t n a m e s e andw a s t o b e s h a r e f o r 3 s t a f f i n myDepartment(ThebusinessdepartmentNo57ofPjicoBenThanh)andmetocomet o Ca rpark,Garages,CompensationDepartmentwherewecouldmeetdriveroro wner tointerviewdirectly.

TheC r o n b a c h ’ s A l p h a s c o r e i s u s e d t o t e s t w h e t h e r t h e s c a l e o f 2 3 it emsa r e r e l i a b i l i t y or not.Asdiscussedinchapter3,theCronbach’sAlphascoreisr e q u i r ed atleast0.7 (Hairetal.,2006) Moreover,inordertoachievethebetterl e v e l ofreliability ,t he itemshouldbe omittedif it s Correcteditem-

TheReliabilityTestResultsshowninTable4.1provedthatallthemeasuremen tscalesw e r e r e l i a b l e R e s u l t s fromt h e o f f i c i a l a s s e s s m e n t o f t h e measur esw e r e veryc l o s e t o t h e p r e l i m i n a r y a s s e s s m e n t r e s u l t s I n e a c h c o n s t r u c t , t h e a l p h a v al ues oftheoverallconstructswerehigherthantheal phaifitemdeleted.Alltheco nstru cts werevalidintermsofCronbachAlphatest(o ver0.6);thehighestwas

TotalCorrelationvaluesofallvariableswereover0.3thentheitemwillmakeag o o d co mponentof a summatedr a t i n g scale H ig hes t is Cus to mer loyalty c o m p o n e n t s

Squared MultipleCo rrelation Functionalvalue h'sAlpha:.876 function01 27.9565 20.991 631 684 function02

EconomicvalueCr o n b ach ' s Alpha:.649 econom09 econom10 econom11 econom12

Alpha:.768 emotion13e motion14e motion15e motion16

Cronbach'sAlpha:.824 society17 society18 society19

.748 752 774 CustomerLoyaltyCr o n b ac h ' s Alpha:.932 loyalty20 loyalty21l oyalty22l oyalty23

Theresultsinabovetableshowedthattheallfactorsweretotallyqualifiedforthen e x t st eps ofanalysisastheirCronbach’sAlphapresentedtheinternalconsistencyw i t h therangefro m0.649to0.932

AfterusingCronbach’sAlphatocheck the in te rn al consistency oft h e scal e,allf i v e f a c t o r s a r e s a t i s f i e d t h e r e l i a b i l i t y c r i t e r i a T h e r e f o r e , a l l f i v e f a c t o r s a r e r e l i a b l e i n t h i s r e s e a r c h A n d t h e a n a l y s i s movestot h e n e x t s t a g e E F A (E x p l o ra t o r y FactorAnalysis)– reliabilitytestofmeasurementscale.

EFAhelpstoreducenumbersoffactorsforanalysisbygroupingthehighc o r r e l a t i o n s amongvariancesinordertoexplainthemaxamountofthecommonv ar iab l e i n t h e c o r r e l a t i o n matrixw h i c h i s u s i n g t h e m i n i m u m n u m b e r o f t h e explanatory concepts.

AlltheindependentfactorswererunthroughthePrincipalAxisFactoring,usi ngthePromaxr o t a t i o n method.Onlyt h e d e p e n d e n t f a c t o r w a s r u n t h r o u g h t h e P r i n c i p a l componentanalysis.Theresultsshowedthatthevari ablesofallfactorshadhighloadinginthatfactorandthevariablesofeachfactormeas uredonlyonecomponent.TheEFAresultsshownintable4.2revealedthattheKMOv aluesofa l l factorswerebiggerthan0.7attheBartlett’sTestSignificanceof.0 000.6,thecorrelationcoefficientgross>0.3(Nunnally&Burnstein,1