The impact of service quality on cuctomer satisfaction in the hopitality industry luận văn thạc sĩ

MINISTRY OF EDUCATION AND TRAINNING UNIVERSITY OF ECONOMICS HO CHI MINH CITY - Nguyen Nguyen Xuan Thao THE IMPACT OF SERVICE QUALITY ON CUSTOMER SATISFACTION IN THE HOSPITALITY INDUSTRY Differences between the viewpoint of foreign and Vietnamese customers THESIS OF MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – 2012 MINISTRY OF EDUCATION AND TRAINNING UNIVERSITY OF ECONOMICS HO CHI MINH CITY - Nguyen Nguyen Xuan Thao THE IMPACT OF SERVICE QUALITY ON CUSTOMER SATISFACTION IN THE HOSPITALITY INDUSTRY Differences between the viewpoint of foreign and Vietnamese customers Subject: Master of Business Administration Code : 60340102 THESIS OF MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: Assoc Prof Dr NGUYEN DINH THO Ho Chi Minh City – 2012 I ACKNOWLEDGEMENTS This thesis was made during 06 months from March, 2012 It becomes a memory time in my life when having a lot of stress, difficulty and struggle between deadlines of job and study However, it has opened a vision for me about wildknowledge which comes from many authors who stay around in the world, having different languages and cultures but bring me an amazing experience which I am grateful for Knowledge should be accumulated gradually during the school I would like to say thank you to all professors in the University of Economics Ho Chi Minh City, who already taught and trained me in MBA course Knowledge also comes from the sharing of friends who were sitting the same class or incidentally appointed the same group with me I thank you for their sharing Especially, a great thank and special gratitude is addressed to Assoc Prof Dr Nguyen Dinh Tho, who directly instructs me throughout my thesis with his conscientiousness, patience and knowledge Finally, I wish to thank my boss of EFS Company Ltd., and my family members for all supporting me during my studying in University Nguyen Nguyen Xuan Thao Ho Chi Minh City, October 31st 2012 Ho II COMMITMENT I would like to commit that this thesis, “The impact of service quality on customer satisfaction in the hospitality industry: Differences between the viewpoint of foreign and Vietnamese customers”, was accomplished based on my research seriously and independently The data was collected from hotels and restaurants industry in Vietnam by the author in reality It has clear source Thus, the data was trustful handled and conducted by the author Nguyen Nguyen Xuan Thao Ho Chi Minh City, October 31st 2012 III TABLE OF CONTENTS ACKNOWLEDGEMENT I COMMITMENT II TABLE OF CONTENTS III LIST OF TABLES V LIST OF FIGURES V ABSTRACT Chapter INTRODUCTION 1.1 Research Background 1.2 Research Motivation 1.3 Research Objectives 1.4 Research Scopes 1.5 Structure of Research Chapter LITERATURE REVIEW, THEORETICAL FRAMEWORK AND HYPOTHESES 2.1 Service Quality 2.1.1 The SERVQUAL Instrument 2.1.2 Applying SERVQUAL in the Hospitality Industry 10 2.1.3 Perceived Service Quality 11 2.2 Customer Satisfaction 14 2.3 Theoretical Framework and Hypotheses 16 2.3.1 Theoretical Framework 16 2.3.2 Research Hypotheses 16 Chapter RESEARCH METHODOLOGY 18 3.1 Research Methodology 18 3.2 Sampling Design 19 3.3 Data Collection Procedures 19 3.4 Data Analyze Procedure 22 IV 3.4.1 Reliability Analysis 22 3.4.2 Descriptive Statistics 23 3.4.3 Factor Analysis (FA) 23 3.4.4 Multiple Linear Regression Analysis 24 Chapter ANALYSIS RESULT 25 4.1 Respondents Demographics 25 4.2 Reliability and Validity of SERQUAL Scales 26 4.3 Dimensions of Service Quality in Hospitality Industry 28 4.4 Overall Perceived Service Quality 31 4.4.1 Correlation Testing 31 4.4.2 Multi-Linear Regression Analysis 32 4.5 Hypothesis Testing and Discussions 35 4.6 Summary 45 Chapter CONCLUSIONS AND RECOMMENDATIONS 47 5.1 Summary of Findings 47 5.2 Practical Implications 48 5.3 Contributions of the Study 49 5.4 Limitations and Future Research 50 REFERENCES 51 APPENDIX 55 APPENDIX 61 APPENDIX 64 APPENDIX 67 V LIST OF TABLES Table 2.1 Five Dimensions of Service Quality 10 Table 2.2: The Summary of Research Hypotheses 17 Table 3.1: The Sources of Measurement Scale 20 Table 3.2: Rules of Thumb about Cronbach‟s Alpha Coefficient Size 23 Table 4.1: Demographic Characteristics of the Study 26 Table 4.2: Cronbach‟s Alpha Measures of Variables in the Study 27 Table 4.3 KMO and Bartlett's Test of Five Independent Variables 28 Table 4.4: Rotated Component Matrixa of Independent Variables 29 Table 4.5 KMO and Bartlett's Test and Component Matrix 30 Table 4.6 Correlation of Variables 31 Table 4.7 ANOVAb for Construct 32 Table 4.8 Model Summaryb of the Construct 33 Table 4.9 Coefficientsa of the Construct 34 Table 4.10 Overall Perceived Service Quality 34 Table 4.11 ANOVAb for Satisfaction 38 Table 4.12 Model Summaryb of Satisfaction 38 Table 4.13 Coefficientsa of Satisfaction 39 Table 4.14 Coefficientsa of the Construct for Vietnamese Customers‟ Group 41 Table 4.15 Coefficientsa of Satisfaction for Vietnamese Customers‟ Group 41 Table 4.16 Coefficientsa of the Construct for Foreign Customers‟ Group 43 Table 4.17 Coefficientsa of the Satisfaction for Foreign Customers‟ Group 43 Table 4.18 Comparison Customers‟ Viewpoints 45 LIST OF FIGURES Figure 2.1 Theoretical Framework 16 Figure 4.1 Research Framework for Vietnamese Customers Group 40 Figure 4.2 Research Framework for Foreign Customers Group 42 ABSTRACT Vietnam is more and more attractive a lot of tourists from other countries in the world Since the life-style is developed rapidly, the customers have more demands on the services, especially in their enjoyable and leisure time The importance of service quality for business performance has been recognized not only in the literature but also in reality because it effects directly on customer satisfaction which leads to the profitability for an organization This study examined the relationship between the components of service quality, overall perceived service quality and customer satisfaction The respondents were Vietnamese and foreign customers who stayed in hotels or spent their dining in restaurants in Ho Chi Minh City, Vietnam The study used Statistic Package for Social Science (SPSS) to analyze data through Exploratory Factor Analysis (EFA) and regression analysis tools Firstly, the research proposed a model to analyze the effect of service quality factors in the hospitality industry on overall perceived service quality The five service quality variables identified in this study were named as “tangibles”, “reliability”, “responsiveness”, “assurance” and “empathy” The results indicated that “reliability” and “empathy” have strong positive effect on overall perceived service quality Secondly, the research investigated the impact of overall perceived service quality on customer satisfaction Results showed that overall perceived service quality has a significantly effect on customer satisfaction Finally, the research finding confirmed that there are differences between the viewpoints of Vietnamese and foreign customers on service quality and its impact on their satisfaction differently Keywords: SERQUAL, Perceived Service Quality, Customer Satisfaction, Hospitality Industry, Vietnam CHAPTER INTRODUCTION 1.1 Research Background: The trend of world markets has changed significantly from agricultural to service markets In Vietnam, the service markets, especially the hospitality industry is more and more increasing the market share caused by the growth of tourism industry According to the report of Vietnam National Administration of Tourism (www.vietnamtourism.com, accessed on 20/05/2012) the revenue of tourism 2011 gains 130 trillion VND, increasing 30% over the previous year Vietnam tourism market has been received over million oversea tourists and served for 30 million domestic customers in 2011 Till April 2012, the number of foreign tourists has already reached 2.5 million, increasing 22.9% over the same period last year Vietnam government also proposes a planning of tourism in 2012 is that receiving 6.5 million of foreign tourists (increasing 8.3% over 2011) and serving for 32 million of domestic customers (increasing 6.67% over 2011) In order to gain this target, many strategies for developing tourism industry have been given out such as to appeal the investment on infrastructure; to open more the tourism trading promotion representative offices in China, Japan, Korea, Thailand, Australia, Malaysia, France and Russia; especially Ha Long Bay just becomes the New World‟s Natural Wonders; last but not least all other industries, e.g hospitality industry related to tourism should be reinforced and enhanced so that to bring the most satisfaction to the tourists As all above factors, there are a lot of restaurants and hotels to be opened to serve for this demand Besides the services of accommodation and food are provided by local suppliers, there are many famous international hotel and restaurant groups to join this market in Vietnam such as Starwood, Park Hyatt, Hilton Worldwide, Movenpick and so on The customers have more choices about the services and all the service businesses are trying their best to improve their service quality in order to make customers more satisfied, and that can improve profitable to the firms Therefore, the viewpoint of customers (local and foreign ones) about service quality should be considered and defined how to match with the different levels of customer satisfaction To help the companies get more success and survival in today‟s competitive environment, there are many researches to define about “quality”, “service quality” “customer satisfaction” Research shows that quality is defined as “fitness for use” and “those product features which meet customer needs and thereby provide customer satisfaction” (Juran and Godfrey, 1999) Service quality leads to customer loyalty and attraction of new customers, positive word-of-mouth, employee‟s satisfaction and commitment, enhanced corporate image, reduced cost and increased business performance (Berry et al., 1989) Higher levels of service quality produce higher levels of customer satisfaction, which in turn lead to higher levels of customer patronage Customer service quality is a crucial source of distinctive competence and often considered a key success factor in sustaining competitive advantage in service industries (Palmer, 2001) In the hospitality industry, to exist in the intense competition, hospitality organizations look for ways that they can profitably differentiate themselves One of strategy is the delivery of high service quality (Stevens, Knutson & Patton, 1995) Research has supported that the basic principle that high quality goods and services are favored in the marketplace and has suggested that high service quality performance increases customer satisfaction (Anderson & Fornell, 1994) However, the concepts of service quality are difficult to define, measure and maintain (Parasuraman, Zeithaml & Berry, 1985) In 1985, Parasuraman et al., defines service quality as a function of the differences between expectation and performance along ten major dimensions such as reliability, responsiveness, competence, access, courtesy, communication, credibility, security, understanding/knowing the customer, tangibles In later research, Parasuraman et al.(1988) revises and defines the service quality in terms of five dimensions: tangibles, reliability, responsiveness, assurance (combining communication, 61 APPENDIX CRONBACH ALPHA ANALYSIS Appendix 2.1: Cronbach Alpha analysis of Tangibles Factor Reliability Statistics Cronbach's Alpha N of Items 845 Tangible01 Tangible02 Tangible03 Tangible04 Tangible05 Item-Total Statistics Scale Cronbach's Scale Mean Variance if Corrected Alpha if if Item Item Item-Total Item Deleted Deleted Correlation Deleted 23.03 10.515 655 812 23.30 10.138 676 807 22.85 11.008 619 822 22.77 11.090 635 817 22.83 11.054 679 807 Appendix 2.2: Cronbach Alpha analysis of Responsiveness Factor Reliability Statistics Cronbach's Alpha N of Items 776 Item-Total Statistics Scale Cronbach's Scale Mean Variance if Corrected Alpha if if Item Item Item-Total Item Deleted Deleted Correlation Deleted Responsiveness1 11.64 2.589 678 623 Responsiveness2 12.01 3.173 527 785 Responsiveness3 11.80 2.538 641 666 62 Appendix 2.3: Cronbach Alpha analysis of Reliability Factor Reliability Statistics Cronbach's Alpha N of Items 779 Reliability1 Reliability2 Reliability3 Item-Total Statistics Scale Cronbach's Scale Mean Variance if Corrected Alpha if if Item Item Item-Total Item Deleted Deleted Correlation Deleted 11.54 3.035 594 728 11.50 2.580 638 676 11.67 2.504 624 694 Appendix 2.4: Cronbach Alpha analysis of Assurance Factor Reliability Statistics Cronbach's Alpha N of Items 867 Assurance1 Assurance2 Assurance3 Assurance4 Item-Total Statistics Scale Scale Mean Variance if Corrected Cronbach's if Item Item Item-Total Alpha if Item Deleted Deleted Correlation Deleted 17.61 6.302 707 835 17.70 5.946 748 818 17.70 6.779 681 845 17.44 6.475 742 821 63 Appendix 2.5: Cronbach Alpha analysis of Empathy Factor Reliability Statistics Cronbach's Alpha N of Items 890 Empathy1 Empathy2 Empathy3 Item-Total Statistics Scale Cronbach's Scale Mean Variance if Corrected Alpha if if Item Item Item-Total Item Deleted Deleted Correlation Deleted 11.30 3.784 784 845 11.41 3.768 766 862 11.30 3.899 808 826 Appendix 2.6: Cronbach Alpha analysis of Satisfaction Factor Reliability Statistics Cronbach's Alpha N of Items 950 Satisfaction1 Satisfaction2 Satisfaction3 Item-Total Statistics Scale Cronbach's Scale Mean Variance if Corrected Alpha if if Item Item Item-Total Item Deleted Deleted Correlation Deleted 12.16 3.425 886 932 12.11 3.197 931 898 12.04 3.336 866 947 64 APPENDIX EXPLORATORY FACTOR ANALYSIS (EFA) Appendix 3.1: EFA for exploring the service quality dimensions KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy Bartlett's Test of Approx Chi-Square Sphericity df Sig .899 2229.337 153 000 Total Variance Explained Component Extraction Sums of Squared Rotation Sums of Squared Loadings Loadings Initial Eigenvalues Total Dim % of Cumulative Variance % Total % of Cumulative Variance % Total % of Cumulative Variance % 7.963 44.240 44.240 7.963 44.240 44.240 3.027 16.818 16.818 1.577 8.759 52.999 1.577 8.759 52.999 2.895 16.081 32.899 1.298 7.211 60.210 1.298 7.211 60.210 2.529 14.052 46.951 1.099 6.106 66.315 1.099 6.106 66.315 2.347 13.038 59.988 1.025 5.695 72.011 1.025 5.695 72.011 2.164 12.022 72.011 711 3.951 75.961 603 3.348 79.309 540 2.999 82.308 527 2.928 85.236 10 438 2.431 87.667 11 384 2.131 89.798 12 339 1.886 91.684 13 317 1.760 93.444 14 293 1.630 95.074 15 266 1.476 96.550 16 235 1.306 97.856 17 211 1.172 99.028 18 175 972 100.000 ensi on0 Extraction Method: Principal Component Analysis 65 Rotated Component Matrixa Component 764 733 696 672 578 762 718 713 688 847 824 820 Tangible05 Tangible04 Tangible02 Tangible01 Tangible03 Assurance2 Assurance4 Assurance1 Assurance3 Empathy1 Empathy3 Empathy2 Reliability2 Reliability3 Reliability1 Responsiveness1 Responsiveness3 Responsiveness2 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization a Rotation converged in iterations 737 727 727 834 768 532 Appendix 3.2: The EFA implementation of dependent variable (Customer Satisfaction) KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy Bartlett's Test of Approx Chi-Square Sphericity df Sig .744 677.965 000 66 Total Variance Explained Component Initial Eigenvalues Extraction Sums of Squared Loadings % of Cumulative % of Cumulative Total Variance % Total Variance % 2.726 90.875 90.875 2.726 90.875 90.875 188 6.251 97.126 086 2.874 100.000 Extraction Method: Principal Component Analysis Component Matrixa Component Satisfaction2 971 Satisfaction1 950 Satisfaction3 939 Extraction Method: Principal Component Analysis a components extracted 67 APPENDIX MULTIPLE LINEAR REGRESSION ANALYSIS (MLR) Appendix 4.1: The effect of the independent variables (service quality dimensions) on the dependent variable (overall perceived service quality) OPSQ Pearson Correlation Sig (2-tailed) Correlations OPSQ TAN RES ** 428 459** 000 000 N 220 220 220 ** TAN Pearson Correlation 428 594** Sig (2-tailed) 000 000 N 220 220 220 ** ** RES Pearson Correlation 459 594 Sig (2-tailed) 000 000 N 220 220 220 ** ** REL Pearson Correlation 526 493 424** Sig (2-tailed) 000 000 000 N 220 220 220 ** ** ASR Pearson Correlation 528 627 548** Sig (2-tailed) 000 000 000 N 220 220 220 ** ** EMP Pearson Correlation 796 465 484** Sig (2-tailed) 000 000 000 N 220 220 220 ** Correlation is significant at the 0.001 level (2-tailed) REL 526** 000 ASR 528** 000 EMP 796** 000 220 493** 000 220 424** 000 220 220 627** 000 220 548** 000 220 597** 000 220 220 465** 000 220 484** 000 220 504** 000 220 547** 000 220 220 597** 000 220 504** 000 220 Variables Entered/Removedb Model Variables Variables Entered Removed Method EMPATHY, TANGIBLE, Enter RELIABILITY, RESPONSIVENESS, ASSURANCEa a All requested variables entered b Dependent Variable: Overall Perceived Service Quality 220 547** 000 220 220 68 Model R 812a Model Summaryb Adjusted R Std Error of the R Square Square Estimate 659 651 641 a Predictors: (Constant), EMPATHY, TANGIBLE, RELIABILITY, RESPONSIVENESS, ASSURANCE b Dependent Variable: Overall Perceived Service Quality ANOVAb Model Sum of Squares Regression Residual Total df Mean Square 170.187 34.037 87.899 214 411 258.086 219 F 82.868 Sig .000a a Predictors: (Constant), EMPATHY, TANGIBLE, RELIABILITY, RESPONSIVENESS, ASSURANCE b Dependent Variable: Overall Perceived Service Quality Coefficientsa Model Unstandardized Standardized Coefficients Coefficients Collinearity Correlations Statistics Std B (Constant) Error -.486 396 TAN -.034 076 RES 073 REL Beta T Sig Partial Part Tolerance VIF -1.227 221 -.025 -.444 658 -.030 -.018 505 1.982 073 053 998 320 068 040 569 1.756 190 073 137 2.622 009 176 105 585 1.710 ASR 080 078 061 1.025 307 070 041 450 2.222 EMP 776 058 680 13.349 000 674 533 613 1.631 a Dependent Variable: Overall Perceived Service Quality 69 70 71 Appendix 4.2: The effect of the independent variable (overall service quality dimensions) on the dependent variable (customer satisfaction) Variables Entered/Removedb Model Variables Variables Entered Removed Method Overall Enter Perceived Service Qualitya a All requested variables entered b Dependent Variable: SATISFACTION Model R 773a Model Summaryb Adjusted R R Square Square 597 595 Std Error of the Estimate 57262 a Predictors: (Constant), Overall Perceived Service Quality b Dependent Variable: SATISFACTION ANOVAb Model Sum of Mean Squares df Square Regression 105.788 105.788 Residual 71.482 218 328 Total 177.270 219 a Predictors: (Constant), Overall Perceived Service Quality b Dependent Variable: SATISFACTION F 322.626 Sig .000a Coefficientsa Model Unstandardized Coefficients B 1(Constant) OPSQ Standardized Coefficients Std Error 2.389 208 640 036 a Dependent Variable: SATISFACTION Beta Correlations t 773 Sig 11.508 000 17.962 000 Partial 773 Part 773 72 73 74 Appendix 4.3: The effect of the independent variables (service quality dimension) on the dependent variable (overall perceived service quality) of Vietnamese Customers Group Coefficientsa of the Construct for Vietnamese customers Model Unstandardized Standardized Coefficients Coefficients B (Constant) Std Error Collinearity Correlations Beta t Sig Partial Part Statistics Tolerance -.361 558 -.648 519 TAN -.110 096 -.087 -1.140 257 -.109 -.067 580 1.723 RES 172 107 129 1.614 109 153 094 533 1.875 REL 253 098 185 2.574 011 239 150 662 1.509 ASR -.012 109 -.009 -.109 914 -.010 -.006 511 1.958 EMP 757 083 665 9.121 000 658 533 642 1.558 a Dependent Variable: Overall Perceived Service Quality Appendix 4.4: The effect of the independent variable (overall service quality dimensions) on the dependent variable (customer satisfaction) of Vietnamese Customers Group Coefficientsa of Satisfaction Variable for Vietnamese Customers’ Group Model Unstandardized Standardized Coefficients Coefficients Correlations Std B VIF (Constant) Overall Error Beta t Sig 2.098 296 7.089 000 676 053 766 12.647 000 Perceived Service Quality a Dependent Variable: SATISFACTION Partial 766 Part 766 75 Appendix 4.5: The effect of the independent variables (service quality dimensions) on the dependent variable (overall perceived service quality) of Foreign Customers Group Coefficientsa of the Construct for Foreign Customers’ Group Model Unstandardized Standardized Coefficients Coefficients Correlations Collinearity Statistics Std B (Constant) Error -1.118 679 TAN 233 138 RES -.112 REL Beta t Sig Partial Part Tolerance VIF -1.647 103 147 1.691 094 168 099 447 2.237 103 -.085 -1.083 281 -.108 -.063 547 1.828 096 121 058 799 426 080 047 635 1.575 ASR 168 116 125 1.457 148 145 085 465 2.152 EMP 804 085 675 9.480 000 690 552 670 1.493 a Dependent Variable: Overall Perceived Service Quality Appendix 4.6: The effect of the independent variable (overall service quality dimensions) on the dependent variable (customer satisfaction) of Foreign Customers Group Coefficientsa of the Satisfaction for Foreign Customers’ Group Model Unstandardized Standardized Coefficients Coefficients Correlations Std B (Constant) Overall Error 3.347 285 499 047 Perceived Service Quality a Dependent Variable: SATISFACTION Beta t 727 Sig 11.742 000 10.732 000 Partial 727 Part 727 ...MINISTRY OF EDUCATION AND TRAINNING UNIVERSITY OF ECONOMICS HO CHI MINH CITY - Nguyen Nguyen Xuan Thao THE IMPACT OF SERVICE QUALITY ON CUSTOMER SATISFACTION IN THE HOSPITALITY INDUSTRY. .. SERVQUAL instrument in measuring and comparing service quality within the fine dining sector of restaurant industry is accessed by Lee & Hing (1995) Customer‟s expectations of service quality, on all... fulfill their customer satisfaction In order to identify the impact of service quality factors on customer satisfaction in hospitality industry in Vietnam, I want to conduct a survey to examine the