The key factors impact on customer loyalty in APL logistics VIETNAM luận văn thạc sĩ

1 Ministry of Education and Training University of Economics Ho Chi Minh City Nguyễn Thị Hạnh THE KEY FACTORS IMPACT ON CUSTOMER LOYALTY IN APL LOGISTICS VIETNAM ECONOMICS MASTER THESIS Ho Chi Minh city - 2010 Ministry of Education and Training University of Economics Ho Chi Minh City Nguyễn Thị Hạnh THE KEY FACTORS IMPACT ON CUSTOMER LOYALTY IN APL LOGISTICS VIETNAM Major: Business Administration Major Code: 60.34.05 ECONOMICS MASTER THESIS Supervisor: Dr Trần Hà Minh Quân Ho Chi Minh city - 2010 Acknowledgement I would like to express my heartfelt gratitude and deepest appreciation to my research Supervisor, Dr Tran Ha Minh Quan for his ceaseless precious encouragement guidance, and share highly of experience, valuable suggestions throughout the course of my research My special Faculty of gratitude is Business extended to Administration all and instructors at Postgraduate Faculty, University of Economics Ho Chi Minh City (UEH) for their support and the valuable knowledge during my study in UEH Many thanks to all my classmates in MBA class, Batch 16 for their valuable and enthusiastic support for this research study Last but not least, the deepest and most sincere gratitude go to my beloved parents, my husband for their boundless support, abundant love and encouragement throughout my period of study I, therefore, dedicate this work as a gift to them all Tp Ho Chi Minh, 2010 Nguyen Thi Hanh Abstract This study reports on the research results to find out what are the factors impacts to customer loyalty in APL logistics Vietnam A study of 212 respondents from their customer was testing Multiple linear regression technique was used to test the hypotheses and research model According to the results, there are three factors impact to APLL customer loyalty including: service quality and proactive improvement and the trust They have been confirmed to have positive impacts on customer loyalty in APLL This study will help to APLL board of management can consider their operation, knowing what factor need to improve to keep their customer in the competitive market Key word: APLL, customer loyalty, service quality, proactive improvement TABLE OF CONTENT Acknowledgement Abstract Table of contents List of figures List of table Chapter 1: Introduction 1.1 Introduction 1.2 Research background 10 1.3 Research questions 11 1.4 Research methodology 13 1.5 Scope and Limitation 13 1.6 Implications of research 13 1.7 Structure of the study 14 Chapter Literature Review 16 2.1 Customer loyalty……………… .………………………….… 16 2.1.1 Definition ………………………… .……………….……… 16 2.1.2 Effect of customer loyalty ……………………… ….17 2.2 Factors impact on customer loyalty ……………… …………… 18 2.2.1 Service quality…………………………………… ………….24 2.2.2 Proactive improvement………………………… ……25 2.2.3 The trust…………………………………………………… … 27 2.3 Research model .…………………………………… 30 Chapter 3: Methodology 31 3.1 Research process………………………… .32 3.2 Research design………………………………………… …… 33 3.2.1 Research object………………………………… ……33 3.2.2 Research method…………………………… …………… 33 3.3 Questionnaire design………………………………… …… 34 3.3.1 Questionnaire for service quality factors…… ……………….34 3.3.2 Questionnaire for proactive improvement factor……… …….35 3.3.3 Questionnaire for the trust factor………… ……………….36 3.3.4 Questionnaire for customer loyalty factor………… ……… 37 3.4 Pretest interview……………………………………… .……….37 3.5 Sample…………………………………………… …………38 3.6 Survey method …………………………………………… …… 38 3.7 Data analysis techniques …………… …………………39 3.8 Conclusion …………………………………… …………….39 Chapter 4: Research result ……… ………………………… 40 4.1 Introduction ……………………… ………………………40 4.2 Descriptive statistics of sample …… ……………………… 41 4.2.1 Final sample ……………………………… ………………41 4.2.2 Characteristics of sample ……………………………… 41 4.2.3 Descriptive statistics of variable ………………… ………….42 4.3 The construct measurement scale … .………………………….44 4.3.1 Reliability testing ………………………………… …………46 4.3.2 Exploratory factor analysis for factor impact to customer loyalty.48 4.3.3 Verify research model ………………………………… 51 4.3.4 Linear regression analysis ………………………… .… 51 4.3.5 Testing the hypothesis ……………… ……………………54 Chapter 5: Conclusion ……………………………………….56 5.1 Summary ………………… ……………………………………56 5.2 Conclusion from the research ……………………… ……………57 5.3 Discussion of the research findings ………………………… 58 5.4 Managerial implications ………………………… .………61 5.5 Recommendations for further research … ………………….62 List of References ……………………………… …………63 APPENDIX 1: Questionnaire ………………………………… 67 APPENDIX 2: SPSS result ………………………………… 70 LIST OF FIGURES Figure 1.1 Logistics process …………………… …………………… Figure 2.1: Factors impact on customer loyalty … ………………… 24 Figure 3.1: Research process …………… .……………………… 32 Figure 4.1: The structure of chapter ……… ………………….40 Figure 4.2 Main business between customer & APLL ……………41 Figure 4.3: Kind of APLL customer ……… …………………42 Figure 4.4: Confirm model of research …… ……………………52 LIST OF TABLES Table 2.1: Determinants of customer loyalty in empirical research 20 Table-3.1 Adaptation of “service quality” ………….… ……….35 Table 3.2: Adaption of proactive improvement …… .…………… 36 Table 3.3: Adaption of the trust ………… .………………… 37 Table 3.4: Adaption of customer loyalty …………………… 37 Table 4.1: Descriptive statistics …… ………………………… 43 Table 4.2: Reliability statistics … .…………………………………47 Table 4.3: Exploration factors analysis ……………………… 50 Table 4.4: Dimension of customer loyalty …………… 51 Table 4.5: Linear regression analysis .…………………………… 52 Table 4.5: Coefficients analys……………… ….52 CHAPTER 1: INTRODUCTION Introduction: Customer loyalty is widely accepted by market as being something that's worth nurturing, with many previous analysts and researchers are showing the value of loyalty programmers in terms of greater spending and satisfaction, more profitable customer behavior, reduced defection levels, and unique competitive advantages But what are the main business factors that directly influence the loyalty of your customers? Investigation therefore about the factors that in influent to customer loyalty gained importance then classic marketing paradigm with its instrumental and transactional oriental proved unsuitable in the context of longer term business relationship Just like other business, logistics service provider are faced with increasing competitive pressure that urges them to concentrate is not only on operational business processes but also on an efficient and effective customer management In Vietnam, the 3PL industry gained 15-20% GDP, GDP Vietnam in 2006 is about US 57 billion and logistics revenue is US – 11 billion It can be shown that there is a big revenue in logistics industry that our business should concentrate it Therefore logistics is a major role in our industry & there are many foreign companies access to our countries to develop this field such as: DAMCO, NYK logistics, APL logistics … APL Logistics is established from NOL group NOL began life in 1968 as Singapore's national shipping line, wholly owned by the Singapore government, just as it was becoming clear that containerization was the way of the future In 1997 NOL bought America's oldest shipping company, American President Lines (APL) APL was nearly twice the size of NOL and was over of 150 years old Now fully integrated, the NOL Group has more than 10,000 staff globally and operates two core businesses: APL, a global top-10 container transportation company and APL Logistics, which provides international end-to-end logistics services in more than 130 cities and 56 countries APL and APL Logistics serve the international transportation and logistics needs of a diverse customer base, ranging from multinationals with highly complex supply chains to small and medium-sized importers and exporters APL Logistics designs and operates global supply chains that deliver products to everywhere you need them Our innovative end-to-end solutions use data connectivity for greater visibility and control APL Logistics provides the resources necessary to support your supply chain Services include shipment consolidation and deconsolidation, global freight forwarding and customs management, regional warehousing and distribution networks and IT solutions that increase supply chain performance and reduce costs APL Logistics' predecessor companies pioneered trade in China and throughout Asia more than a century and a half ago and today we are recognized as a leading innovator in worldwide logistics and technology management With more than 300 offices serving over 55 countries, our 4,500 seasoned logistics professionals offer local expertise throughout a truly global 66 Lam, S Y., Shankar, V., Erramilli, M K., and Murthy, B (2004): Customer Value, Satisfaction, Loyalty, and Switching Costs: An Illustration From a Business-to-Business Service Context, in: Journal of the Academy of Marketing Science 32(3): 293-311 Richardson, H L (1995): Logistics help for the challenged, in: Transportation & Distribution 36(1): 60-74 Yi, Y and Jeon, H (2003): Effects of Loyalty Programs on Value Perception, Program Loyalty, and Brand Loyalty, in: Journal of the Academy of Marketing Science 31(3): 229-240 Zhu, J., Lean, H S., and Ying, S K (2002): The Third-Party Logistics Services and Globalization of Manufacturing, in: International Planning Studies 7(1): 89-104 Parasuraman, A., Zeithaml, V A., and Berry, L L (1988): SERVQUAL: A Multiple-Item Scale for Measuring Consumer Perceptions of Service Quality, in: Journal of Retailing 64(1): 12-40 Wallace, D W., Giese, J L., and Johnson, J L (2004): Customer retailer loyalty in the context of multiple channel strategies, in: Journal of Retailing 80(4): 249-263 Wallenburg, C M and Weber, J (2005): Structural Equation Modelling as a Basis for Theory Development within Logistics and Supply Chain Management Research, in: Kotzab, H., Seuring, S., Müller, M., and Reiner, G., Research Methodologies in Supply Chain Management, Heidelberg, New York: 171-186 67 APPENDIX 1: QUESIONAIRE Thank you for your answer in our study Below questions is only focus on your thinking about logistics service & there is not a right or wrong answer Your answers are very valuable for our study Your personal information will be process by general report There is not a answer is shown external Thanks again for your support General information: ( write by inverviewer) Inverviewer name: ……………………………… Date: ……………………………………………… Code: ……………………………………………… 2.Question about logistics serivce in your business Please advise your agree level for below question by mark only ONE to the number Very agree Agree Neutral Disagree Very disagree I Service quality Overall, APLL offers excellent services APLL offer high service quality APLL offers great performance APLL their work smoothly & efficiency We are very satisfied with the way we interact with APLL The relationship with APLL is good II Proactive improvement APLL put strong effort into continuously optimizing logistics processes APLL continuously makes suggestions for improvements of activities, even those outside its direct responsibility 68 When the situation changes, APLL by itself modifies the logistics activities and processes, if this is useful and necessary APLL shows initiative by approaching us with suggestions for improvement APLL shows a high level of innovation III Trust APLL keeps promises it makes to our firm Regarding problem, APLL is always honest with us APLL correctly carries out tasks that we cannot directly control APLL is trustworthy APLL staff is a highly knowledgeable manager APLL staff speaks the same language we We trust APLL staff to keep our best interests in mind IV Customer loyalty We will continue using APLL in the future Right now, we intend to extend existing contracts with APLL In the future, we will use APLL more than we now When we outsource additional services, we will first offer them to APLL, before starting a bidding process We will introduce APLL to my partners V Question to your company operation Which services does your selected in APLL 69 Logistics information system International Freight forwarding Inventory control / Management Others Your company operation Garment Footwear Industrial equipment Electronics and related instruments Others What your position President/ CEO / COO Vice president logistics Im-Export employee Others For how many years have you been working for this company Under year - years - years Over years Which below logistics company you have used except APLL Damco NYK Logistics Kuehne & Nagel Panalpina Other *** The end *** 70 APPENDIX : SPSS RESULT Reliability of service quality Scale: ALL VARIABLES Case Processing Summary N % Cases Valid 212 100.0 Excluded(a) 0 Total 212 100.0 a Listwise deletion based on all variables in the procedure Reliability Statistics Cronbach's Alpha 897 N of Items Item Statistics Mean s1 - Overall, APLL offers excellent services s2 - APLL offer high service quality s3 - APLL offers great performance s4 - APLL their work smoothly & efficiency s5 - We are very satisfied with the way we interact with APLL s6 - The relationship with APLL is good Scale Statistics Mean 19.21 Variance 29.464 Std Deviation 5.428 Std Deviation 3.09 1.113 212 3.10 1.176 212 3.19 1.154 212 3.27 1.052 212 3.33 1.094 212 3.23 1.087 212 N of Items Reliability of Proactive improvement Case Processing Summary N Cases Valid Excluded( a) Total 212 % 100.0 0 N 212 100.0 a Listwise deletion based on all variables in the procedure 71 Reliability Statistics Cronbach's Alpha 889 N of Items Item Statistics Mean p1 - APLL put strong effort into continuously optimizing logistics processes p2 - APLL continuously makes suggestions for improvements of activities, even those outside its direct responsibility p3 - When the situation changes, APLL by itself modifies the logistics activities and processes, if this is useful and necessary p4 - APLL shows initiative by approaching us with suggestions for improvement p5 - APLL shows a high level of innovation Std Deviation N 3.28 999 212 3.28 1.033 212 3.34 1.025 212 3.42 1.052 212 3.45 1.081 212 Item-Total Statistics Scale Mean if Item Deleted p1 - APLL put strong effort into continuously optimizing logistics processes p2 - APLL continuously makes suggestions for improvements of activities, even those outside its direct responsibility p3 - When the situation changes, APLL by itself modifies the logistics activities and processes, if this is useful and necessary p4 - APLL shows initiative by approaching us with suggestions for improvement p5 - APLL shows a high level of innovation Scale Variance if Item Deleted Corrected ItemTotal Correlation Cronbach's Alpha if Item Deleted 13.49 12.592 713 868 13.49 12.109 761 857 13.42 12.312 734 863 13.35 12.069 748 860 13.32 12.238 693 873 72 Scale Statistics Mean 16.77 Variance 18.643 Std Deviation 4.318 N of Items Reliability of trust Scale: ALL VARIABLES Case Processing Summary N Cases Valid Excluded( a) Total 212 % 100.0 0 212 100.0 a Listwise deletion based on all variables in the procedure Reliability Statistics Cronbach's Alpha 894 N of Items Item Statistics Mean t1 - APLL keeps promises it makes to our firm t2 - Regarding problem, APLL is always honest with us t3 - APLL correctly carries out tasks that we cannot directly control t4 - APLL is trustworthy t5 - APLL staff is a highly knowledgeable manager t6 - APLL staff speaks the same language we t7 - We trust APLL staff to keep our best interests in mind Std Deviation N 3.35 1.181 212 3.38 1.200 212 3.49 1.174 212 3.68 1.240 212 3.34 1.224 212 3.17 1.192 212 3.51 1.170 212 Item-Total Statistics Scale Mean if Item Deleted t1 - APLL keeps promises it makes to our firm t2 - Regarding problem, APLL is always honest with us Scale Variance if Item Deleted Corrected ItemTotal Correlation Cronbach's Alpha if Item Deleted 20.58 31.174 785 867 20.55 31.548 737 873 73 t3 - APLL correctly carries out tasks that we cannot directly control t4 - APLL is trustworthy t5 - APLL staff is a highly knowledgeable manager t6 - APLL staff speaks the same language we t7 - We trust APLL staff to keep our best interests in mind 20.44 33.262 612 888 20.25 31.345 724 874 20.58 31.514 722 875 20.76 33.283 598 889 20.42 32.557 674 880 Scale Statistics Mean 23.93 Variance 42.929 Std Deviation 6.552 N of Items Reliability of customer loyalty Case Processing Summary N Cases Valid Excluded( a) Total 212 % 100.0 0 212 100.0 a Listwise deletion based on all variables in the procedure Reliability Statistics Cronbach's Alpha 898 N of Items Item Statistics Mean L1 - We will continue using APLL in the future L2 - Right now, we intend to extend existing contracts with APLL L3 - In the future, we will use APLL more than we now L4 - When we outsource additional services, we will first offer them to APLL, before starting a bidding process L5 - We will introduce APLL to my partners Std Deviation N 3.14 1.060 212 3.07 1.097 212 3.06 1.040 212 3.13 1.080 212 3.11 1.094 212 74 Item-Total Statistics Scale Mean if Item Deleted Scale Variance if Item Deleted Corrected ItemTotal Correlation Cronbach's Alpha if Item Deleted 12.37 13.391 770 870 12.44 13.375 736 878 12.45 13.604 756 874 12.38 13.620 715 883 12.40 13.246 759 873 L1 - We will continue using APLL in the future L2 - Right now, we intend to extend existing contracts with APLL L3 - In the future, we will use APLL more than we now L4 - When we outsource additional services, we will first offer them to APLL, before starting a bidding process L5 - We will introduce APLL to my partners Scale Statistics Mean 15.51 Variance 20.488 Std Deviation 4.526 N of Items Factor Analysis Correlation Matrix s1 s1 s2 s3 s4 s5 s6 p1 p2 p3 p4 p5 t1 t2 t3 t4 t5 t6 t7 S2 s3 s4 s5 s6 p1 p2 p3 p4 76 48 54 38 502 71 47 55 70 44 45 58 46 34 46 39 45 1.00 47 45 47 1.00 55 45 55 1.00 47 71 61 47 58 75 42 56 61 36 55 51 38 51 40 42 43 35 37 53 42 37 42 36 44 40 41 40 44 40 50 46 47 41 47 71 61 1.00 50 57 49 45 42 46 34 27 52 509 441 417 446 473 584 755 570 1.00 603 408 531 446 488 371 397 511 1.00 67 62 54 55 67 62 54 55 76 48 54 38 50 43 45 42 42 35 37 46 37 1.00 61 49 60 71 47 55 50 50 44 54 48 45 35 40 47 44 61 1.00 59 47 70 44 45 46 44 48 46 42 42 41 40 41 48 49 58 1.00 48 58 46 34 47 41 46 37 47 41 35 46 46 50 60 47 48 1.00 40 39 45 41 44 42 40 38 35 43 41 35 46 p5 t1 t2 t3 t4 t5 t6 t7 45 42 42 35 37 46 37 44 54 48 45 48 46 42 42 46 37 47 41 42 40 38 35 42 36 38 42 56 55 51 43 61 51 40 35 57 49 45 42 60 40 53 44 1.00 43 44 35 43 1.00 72 54 44 72 1.00 52 35 54 52 1.00 43 64 61 46 44 61 56 37 43 54 46 50 50 57 56 52 35 41 35 43 37 53 42 46 48 43 64 61 46 1.00 69 36 60 40 40 46 41 37 42 36 34 37 44 61 56 37 69 1.00 60 53 47 41 46 35 44 40 41 27 39 43 54 46 50 36 60 1.00 39 44 48 50 46 40 44 40 52 51 50 57 56 52 60 53 39 1.00 43 75 KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy Bartlett's Test of Sphericity Approx Chi-Square df Sig .894 2657.950 153 000 Total Variance Explained Comp onent 10 11 12 13 14 15 16 17 18 Initial Eigenvalues Extraction Sums of Squared Loadings % of Cumulative % of Cumulative Variance % Variance % Total Total 9.166 50.920 50.920 9.166 50.920 50.920 1.498 8.321 59.241 1.498 8.321 59.241 1.217 6.763 66.003 1.217 6.763 66.003 773 4.292 70.295 725 4.029 74.324 690 3.832 78.156 610 3.391 81.546 516 2.864 84.410 464 2.580 86.990 455 2.529 89.519 360 1.999 91.518 323 1.795 93.313 303 1.683 94.996 273 1.518 96.514 204 1.133 97.647 184 1.023 98.670 125 693 99.364 115 636 100.000 Extraction Method: Principal Component Analysis Rotation Sums of Squared Loadings % of Cumulativ Variance e% Total 4.162 23.124 23.124 4.090 22.724 45.847 3.628 20.156 66.003 76 Scree Plot 10 Eigenvalue 2 10 11 12 13 14 15 16 17 18 Component Number Factor Analysis of customer loyalty Correlation Matrix L1 Correlation L2 L3 L4 L5 L1 1.000 656 620 762 576 L2 656 1.000 628 556 681 L3 620 628 1.000 571 756 L4 762 556 571 1.000 573 L5 576 681 756 573 1.000 77 KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy Bartlett's Test of Sphericity 814 Approx Chi-Square Df Sig 660.129 10 000 Total Variance Explained Initial Eigenvalues Extraction Sums of Squared Loadings Component Total % of Variance Cumulative % 3.552 71.047 71.047 602 12.038 83.085 390 7.808 90.894 264 5.278 96.172 191 3.828 100.000 Extraction Method: Principal Component Analysis Total 3.552 % of Variance 71.047 Scree Plot Eigenvalue 1 Component Number Cumulative % 71.047 78 Component Matrix(a) Component L1 - We will continue using APLL in the future 858 L2 - Right now, we intend to extend existing contracts with APLL 835 L3 - In the future, we will use APLL more than we now 849 L4 - When we outsource additional services, we will first offer them to APLL, before starting a bidding process 819 L5 - We will introduce APLL to my partners 852 Extraction Method: Principal Component Analysis a components extracted Regression Variables Entered/Removed(b) Model Variables Entered Variables Removed REGR factor score for analysis 1, REGR factor score for analysis 1, REGR factor score for analysis 1(a) a All requested variables entered b Dependent Variable: REGR factor score for analysis Method Enter Model Summary Mo del Adjusted R Std Error of R R Square Square the Estimate Change Statistics R Square Sig F R Square F Change F Change df1 df2 Change Change Change 771(a) 594 588 64188982 594 101.369 a Predictors: (Constant), REGR factor score for analysis 1, REGR factor score for analysis 1, REGR factor score for analysis ANOVA(b) Model Regression Residual Total Sum of Squares 125.299 85.701 211.000 df 208 211 Mean Square 41.766 412 F 101.369 Sig .000(a) df1 208 df2 000 79 a Predictors: (Constant), REGR factor score for analysis 1, REGR factor score for analysis 1, REGR factor score for analysis b Dependent Variable: REGR factor score for analysis Coefficients(a) Unstandardized Coefficients Model (Constant) REGR factor score for analysis REGR factor score for analysis REGR factor score for analysis B -1.22E-16 Std Error 044 Standardized Coefficients t Sig Beta B 000 Std Error 1.000 386 044 386 8.726 000 530 044 530 11.992 000 405 044 405 9.174 000 a Dependent Variable: REGR factor score for analysis THE NEW RESEARCH IN THESIS : THE KEY FACTORS IMPACT ON CUSTOMER LOYALTY IN APL LOGISTICS VIETNAM Customer loyalty is widely accepted by market as being something that's worth nurturing, with many previous analysts and researchers are showing the value of loyalty programmers in terms of greater spending and satisfaction, more profitable customer behavior, reduced defection levels, and unique competitive advantages But what are the main business factors that directly influence the loyalty of your customers? Investigation therefore about the factors that in influent to customer loyalty gained importance then classic marketing paradigm with its instrumental and transactional oriental proved unsuitable in the context of longer term business relationship The questionare was interviewed to APLL customer Multiple linear regression technique was used to test the hypotheses and research model According to the results, there are three factors impact to APLL customer loyalty including: service quality and proactive improvement and the trust They have been confirmed to have positive impacts on customer loyalty in APLL This study will help to APLL board of management can consider their operation, knowing what factor need to improve to keep their customer in the competitive market ...2 Ministry of Education and Training University of Economics Ho Chi Minh City Nguyễn Thị Hạnh THE KEY FACTORS IMPACT ON CUSTOMER LOYALTY IN APL LOGISTICS VIETNAM Major: Business Administration... sampling and processing data, presents analyzing the data collected and the findings of the research 15 Chapter 5: Conclusion and Implication points out conclusion and implication from the findings... based on the research questions and hypotheses This chapter also discusses the implications, contributions and limitations of the research in the world of business administration In addition, the