Exploring the influential factors of customer satisfaction at khanh giang general trading limited company

Shu - Te University Graduate School of Business and Administration “EXPLORING THE INFLUENTIAL FACTORS OF CUSTOMER SATISFACTION AT KHANH GIANG GENERAL TRADING LIMITED COMPANY” Student Advisor Advisor : Dang Sy Hoi : Dr Shu-Cheng Lee : Ph.D Pham Thi Lien September, 2012 ABSTRACT This thesis aims to research on the factors affecting customer satisfaction with the tire supply services of Khanh Giang J.S.C The research model is inherited from SERVQUAL model adding one new factor “competitiveness of price” The research results show that there are four factors influencing customer satisfaction with Khanh Giang company’s services, they are: (1) competitiveness of price, (2) reliability and responsiveness, (3) empathy, and (4) assurance The results also prove that for the spare parts supply services, there are no differences between different groups of customers classified by demographic criteria All of these four factors have positive and direct impact on customer satisfaction with services In addition, the research results also provide information to suggest and find solutions for increasing the satisfaction level of employees with current service quality of the company It proves that the SERVQUAL is a reliable scale applied for evaluating the quality of service and customer satisfaction Finally, the study also points out its limitations and directions for further researches Keywords: Customer satisfaction, competitiveness of price, SERVQUAL i ACKNOWLEDGMENTS To complete this thesis, I have received many helps from others people Without them, I have probably not finished my dissertation, so I would like to express my thanks to all of you, especially: I sincerely acknowledge Dr.Shu-Cheng Lee and Ph.D Pham Thi Lien who have enthusiastically guided and given me the very useful advices and comments to complete this thesis A very special thanks goes out to the teachers at Shu-Te University and Education University, Vietnam National University who guided and helped me in the process of understanding the knowledge to finish the course and then make this thesis I also would like to express my thanks to my colleagues at Khanh Giang General Trading Limited Company for enthusiastically helping me in the process of surveying and collecting data Without your helps, I would not be able to complete the thesis on time Finally, I really acknowledge all beloved members in my family for sharing and encouraging me during the course and the time when I make this thesis Specially thanks to everyone Student DANG SY HOI ii TABLE OF CONTENTS ABSTRACT ACKNOWLEDGMENTS CHAPTER 1: INTRODUCTION 1.1 Research Background 1.2 Research Motivation 1.3 Research Purposes 1.4 Research Procedure .4 CHAPTER 2: LITERATURE REVIEW 2.1 Service, service characteristics and service quality .8 2.1.1 Service 2.1.2 Service characteristics 2.1.3 Service quality 12 2.2 The relationship between service quality and customer satisfaction 13 2.3 The models of service quality and customer satisfaction 14 2.3.1 The service quality gap model 15 2.3.2 SERVQUAL model 17 2.3.3 The 4Ps’ model .19 2.4 Researches related on service quality and customer satisfaction 21 CHAPTER 3: RESEARCH METHODOLOGY 23 3.1 Background of the company 23 3.2 Research model 23 3.3 Research hypotheses 25 3.4 Measurement of variables 28 3.5 Research design 30 3.5.1 Qualitative research design 30 3.5.2 Questionnaire design 32 3.5.3 Scale selection 32 3.5.4 Sampling method 33 iv 3.6 Data analysis method 34 3.6.1 Descriptive Statistics 35 3.6.2 Scale verification 35 3.6.3 The explore factor analysis (EFA) 35 3.6.4 Naming and adjusting research model 36 3.6.5 Building the regression function 36 3.6.6 Testing the suitability of the regression model .37 3.6.7 Testing the research hypotheses 38 CHAPTER 4: RESEARCH RESULTS .39 4.1 Descriptive statistics 39 4.1.1 Sample structure by gender 39 4.1.2 Sample structure by age .40 4.1.3 Sample structure by education level .41 4.1.4 Sample structure by income 42 4.2 Results from actual data 42 4.3 Test of reliability 44 4.3.1 Testing the scales for factor “tangibles” .44 4.3.2 Testing scale reliability for the factor “reliability” .44 4.3.2 Testing scale reliability for the factor “responsiveness” .45 4.3.3 Testing scale reliability for the factor “assurance” .46 4.3.4 Testing scale reliability for the factor “empathy” .46 4.3.5 Testing scale reliability for the factor “competitiveness of price” 47 4.3.6 Testing scale reliability for the dependent variable “general satisfaction” .47 4.3.7 Result summary of scale verification 48 4.4 Explore factor analysis 48 4.4.1 Factor analysis with the independent variables 49 4.4.2 Factor analysis with the dependent variable “general satisfaction” 51 4.5 Naming and adjusting the model 51 4.5.1 Naming the first factor 51 4.5.2 Naming the factor 52 v 4.5.3 Naming the factor 53 4.5.4 Naming the factor 53 4.5.5 Naming the factor 54 4.5.6 Adjusting the research model and hypotheses 54 4.6 The correlation between variables .55 4.7 Building the regression function 57 4.7.1 Building the regression function by Enter method .57 4.7.2 Testing the suitability of the research model by OLS 58 4.7.3 Testing the research hypotheses 63 4.7.4 Retesting the research model by Stepwise method .64 4.7.5 The importance of independent variables 66 4.8 The differences between subtotals .66 4.8.1 Testing the average value of the subtotal .66 4.8.2 Testing the differences between groups of different gender 69 4.8.3 Testing the differences between groups of different age 70 4.8.4 Testing the differences between groups of different education level 72 4.8.4 Testing the differences between groups of different income 73 4.9 Detections of the research 74 CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS 76 5.1 Conclusions 76 5.2 Recommendations .77 5.3 Contributions and the importance of the research .79 5.3.1 Contributions 79 5.3.2 The importance of the research 80 5.4 Limitations 80 5.5 Directions for further researches 81 REFERENCES 82 Appendix 01 85 Appendix 02 87 vi LIST OF TABLES Table The observed variables in the study 29 Table Result summary from Descriptive Statistics 42 Table Item (HH) -Total Statistics 44 Table Item (TC) -Total Statistics .45 Table Item (DU) -Total Statistics 45 Table Item (PV) -Total Statistics .46 Table Item (CN) -Total Statistics 46 Table Item (GI) -Total Statistics 47 Table Item (HL)-Total Statistics .48 Table 10 Result summary of scale verification 48 Table11 The first Rotated Component Matrixa) 49 Table 12.The second Rotated Component Matrixa 50 Table 13 Component Matrix of factor “general satisfaction” .51 Table 14 Pearson correlation coefficient between variables 56 Table 15 Result summary of regression results by Enter .57 Table 16 Variance analysis of estimates (ANOVA) by Enter 57 Table 17 Estimated Beta coefficient of the model by Enter 58 Table 18 Spearman’s rank correlation 60 Table 19 Summary of information of the model by Stepwise 64 Table 20 Variance analysis by Stepwise 65 Table 21 Beta coefficient of variables by Stepwise .65 Table 22 One-Sample Test for the variable TU 67 Table 23 One-Sample Test for the variable PV 67 Table 24 One-Sample Test with the variable CN 67 Table 25 One-Sample Test with the variable GI 68 Table 26 One-Sample Test with the variable HL 68 Table 27 Variance analysis (ANOVA) by gender 69 Table 28 Variance analysis (ANOVA) by age .71 Table 29 Variance analysis (ANOVA) by education level 72 Table 30 Variance analysis (ANOVA) by income .73 Table 31 Summary of research hypotheses testing results 75 v LIST OF FIGURES Figure 1.4.1 Research Procedure .4 Figure 2.3.1 The Service Quality Five Gap Model .17 Figure 2.3.2 The SERVQUAL model 19 Figure 3.2.1 Research model 25 Figure 4.1.1 The sample structure by gender 40 Figure 4.1.3 The sample structure by education level 41 Figure 4.1.4 The sample structure by income .42 Figure 4.5.6 The adjusted research model .54 Figure 4.9.1 The relationship between independent variables and the dependent variable in the research model .75 vi CHAPTER INTRODUCTION This chapter will generally introduce the research thesis including: research background, research motivation, research purposes, and research procedue 1.1 Research Background Customer satisfaction is the success key to business A sucessful company one that has found a way to satify its customers and through which to achieve their goals So, to satisfy customers is an important and necessary activity for all businesses in both services and manufacturing sectors The company offers customers products and services they need and at the same time get economic benefits it desires Customer satisfaction will bring loyalty to the company, and to the company’s brand The cost to get a new customer is five times more than to keep an existing one (zoom.vn), therefore, achieving customer satisfaction is the highest principle of any companies in the field of services, especially in today's increasingly fierce competitive environment In the field of researching on service quality and customer satisfaction with service, there have been many research models, such as: Kano’s model (1980s), Gronroos' technical and functional quality model (1984), SERVQUAL model by Parasuraman et al (1988), ect In these models, the SERVQUAL is a popular model, which has been proven through many studies in different fields in the world, such as: E-commerce, internet (Samar I Swaid and Rolf T Wigand, 2007, 2009), health services (Emin Babakus W.Clynn Mangold, 1992, Mohamed M Mostafa, 2005), banking services (K.Ravichandra et al., 2010, Tram, 2008), restaurant sector (Clare Chua Chow and Peter Luk, 2005), travel services (Eda Atilgan et al., 2003, Charilaos Kouthosis and Kontatinos Alexandris, 2005), public services (Arawati Agus, 2007), education sector (Michael Stodnick and Pamela Rogers, 2008; Kien, 2008) This shows that SERVQUAL model is one of the most widely used frameworks for the measurement of service quality So the application of SERVQUAL model to measure service quality in Khanh Giang Company is in accordance Currently, the increase of transport vehicles due to increased transport demand in the economy growth has triggered a large number of vehicles, including cars That has led to the ever-increasing development of repair services as well as spare parts supply services Along with the development of these services, the competitiveness among the companies providing tire delivery service becomes more and more fierce Khanh Giang Company is no exception to that rule To survive and thrive in increasing conditions of competition, raising the quality of services provided, increasing customer satisfaction with products and services is urgently needed to create competitive advantages