Determinants of customer satisfaction in the apartment industry the cace for the apartment industry in vietnam

MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HOCHIMINH CITY NGUYEN THI MONG VAN DETERMINANTS OF CUSTOMER SATISFACTION IN THE APARTMENT INDUSTRY THE CASE FOR THE APARTMENT INDUSTRY IN VIETNAM MASTER’S THESIS In Business Administration Ology code: 60.34.01.02 Supervisor Dr Tran Ha Minh Quan Ho Chi Minh City, 2012 - - Acknowledgement This research project would not have been possible without the support of many people Firstly, I wish to express my deep sincere gratitude to my supervisor, Dr Tran Ha Minh Quan for his invaluable advice and help Without him, this thesis could not have been completed I would like to express my deepest gratitude and honor to my parents not only for the love they devote to me but also for the time which I should have devoted to them during their senior years I am also grateful to my classmates and my colleagues, especially Le Thi Bich Dao and Ngo van Quan for all of their friendship and encouragement I also wish to thank my friends in Becamex subsidiaries for their great support, and to the respondents, without whom, my thesis could not have been accomplished Finally, I am most grateful to my dear husband He is my whole life He is my greatest inspiration and the source of encouragement to overcome all difficulties through out the duration of this study Abstract In market economy, quality of products or services is the most important tool to succeed The nature of the quality of goods is intended to satisfy the needs of the highest enjoyment of goods or services Construction work in general and of apartment buildings in particular are a type of goods The criteria for the quality of it also must be directed towards those values However, the criteria for the quality of goods or construction in general and apartment buildings in particular is extremely diverse The business activities in the field of real estate are trying to improve the quality of products and services to satisfy the maximum demands of customers, especially in the apartment business This study examined the determinants of satisfaction and the effects of customer satisfaction on word of mouth of consumers in the apartment industry in Vietnam, as well as the influence of background data on the relationship between satisfaction and word of mouth activity This research measures the factors influencing apartment satisfaction in quantitative research methods The scale was evaluated by the factor analysis method to explore EFA and reliability testing (Cronbach's alpha) then multiple regression analysis is used to test the research model This study will help to improve the strategies of real estate companies in choosing the best measures to improve the quality of their company's product, while increasing competitiveness and solidify the company's position in the marketplace As time was short, this study focused its review on the relationship between six factors influencing their apartment construction and intention to engage in word of mouth activity Keyword: Customer satisfaction, word of mouth, Service quality, apartment industry Contents Acknowledgement Abstract Contents List of Tables List of Figures Chapter 1: INTRODUCTION 1.1 Overview 1.2 Research background 1.3 Problem statement 1.4 Purpose of the study 10 1.5 Objectives of the study 10 1.6 Research question 11 1.7 Significance of the study 11 1.8 Structure of thesis 11 Chapter 2: LITERATURE REVIEW 13 2.1 Overview 13 2.2 Overall customer satisfaction 13 2.2.1 Concept of customer satisfaction 13 2.2.2 Determinants of customer satisfaction 14 2.3 Hypotheses and model 16 2.3.1 Customer cost 16 2.3.2 Physical quality 17 2.3.3 Environmental quality 19 2.3.4 Project facilities 19 2.3.5 Regional facilities 20 2.3.6 Service quality 20 2.3.7 Relationship between customer satisfaction and word of mouth 22 2.4 Conclusion 24 Chapter 3: RESEARCH METHODOLOGY 25 3.1 Overview 25 3.2 Research purpose 25 3.3 Research design 26 3.4 Item generation 26 3.4.1 Overall customer satisfaction scale 26 3.4.2 Scale to measure service quality 28 3.4.3 Scale to measure customer satisfaction 29 3.4.4 Scale to measure word of mouth 34 3.5 Pilot test 34 3.6 Main study 35 3.6.1 Sampling 35 3.6.2 Sample size 36 3.6.3 Data analysis techniques 36 3.7 Conclusion 37 Chapter 4: DATA ANLYSIS AND FINDINGS 38 4.1 Overview 38 4.2 Respondents demographics 38 4.3 Scale assessment 39 4.3.1 Reliability testing (Cronbach’s Alpha) 40 4.3.2 Exploratory factor analysis 42 4.3.2.1 Exploratory factor analysis with determinants of customer satisfaction 42 4.3.2.2 Exploratory factor analysis with overall customer satisfaction and word of mouth 45 4.4 Testing research model and hypotheses 45 4.4.1 Testing correlations between all constructs 45 4.4.2 Testing research model and hypotheses 46 4.4.2.1 The relationship between determinants of customer satisfaction in the apartment industry and customer satisfaction 46 4.4.2.2 The relationship between overall customer satisfaction and word of mouth in the apartment industry 49 4.5 Conclusion 50 Chapter 5: CONCLUSIONS AND IMPLICATIONS 51 5.1 Overview 51 5.2 Conclusions of the study 51 5.3 Implications of the study 51 5.3.1 Theoretical implications 51 5.3.2 Practical implications 52 5.4 Limitations and recommendations for future research 52 List of References 54 Appendix 1- Questionnaire (Vietnamese version) 60 Appendix 2- Observed variables 63 Appendix - Descriptive statistics of variables 65 Appendix - Reliability analysis- Cronbach’s Alpha 66 Appendix - Factor analysis 69 Appendix - Regression result 71 List of Tables Table 2.1 Service quality dimension definitions (modified from Zenithal et al., 1990) 22 Table 3.1 Scale to measure service quality 29 Table 3.2 Scale to measure customer cost 32 Table 3.3 Scale to measure physical quality 32 Table 3.4 Scale to measure environmental quality 32 Table 3.5 Scale to measure project facilities 33 Table 3.6 Scale to measure region facilities 33 Table 3.7 Scale to measure customer satisfaction 33 Table 3.8 Scale to measure word of mouth 34 Table 4.1 Demographic profile of respondents 38 Table 4.2 Reliability of measurement items 41 Table 4.3 EFA result for construct measurement scales (2nd times) 43 Table 4.4 Total variance explained 44 Table 4.5 EFA result for construct measurement scales 45 Table 4.6 Correlation matrix 46 Table 4.7a Model summary 47 Table 4.7b ANOVAb 47 Table 4.7c Coefficients 48 Table 4.8 Summary of hypotheses testing results 49 Table 4.9a Model II summary 50 Table 4.9b Coefficients 50 List of Figures Figure 1.1 Structure of Thesis 12 Figure 2.1 Research model of customer satisfaction 24 Figure 3.1 Research process 27 Figure 3.2 Response rate 36 Figure 4.1 Means of joining of respondents 39 Figure 4.2 Relationship between determinants of customer satisfaction in apartment industry and customer satisfaction 47 Figure 4.3 Relationship between overall customer satisfaction and word of mouth in apartment industry 49 Chapter 1: INTRODUCTION 1.1 Overview This chapter presents an overview of the research, the Background to the study, Problem statement, purpose of the study, objectives of the study, research questions, significance of the study, and structure of thesis 1.2 Background to the study Customer satisfaction is one of the key issues for companies in their efforts to improve quality in the market place Most businesses have their own targets for being profitable They have carefully planned and implemented strategies, but they all have something in common – a customer Business purposes are based on customers and if the company wants to be successful, it has to concentrate on them This means determining customers’ needs, responding to their requirements and maintaining customer satisfaction by assuring quality in company’s operations Besides, customer satisfaction is so important, because satisfied customers spread positive word of mouth which attracts more new customers, and then companies will sell more and gain high profits (Garson 1993, 5.) The apartment industry in Vietnam recently formed and flourished in recent years The development of the apartment industry has contributed greatly to the urbanization of Vietnam Currently, however, the apartment market in Vietnam has fallen in the general downturn of the economy Project investors such as Hoang Anh Gia Lai are decreasing their prices in a number of new apartment projects as much as 40% Other projects such as the Discovery Complex apartment project in Hanoi, Dai Thanh project, etc are experiencing a similar depreciation Competition between investors is fierce among apartment products as well as other commodities in the market Therefore, when consumers decide to buy or invest property goods, customers will consider many factors that affect their decision to buy and satisfy their life needs Apartment investors must understand these factors to build an effective business strategy VNR survey data of property report (2009-2010) indicates that, the most important factor for customer satisfaction is the location of the project (gaining an advantage position of 71.2%) Next is the project design factor In addition to these factors, the decision to buy is based on the flow of information relating to apartment options before buying This is where word of mouth has a large influence In order to increase sales, investors need to understand the factors affecting customer satisfaction and enhance positive communication activities to develop more new customers 1.3 Problem Statement The Vietnamese economy is developing in accordance with Party economic policy The population’s incomes was increased dramatically, demand for housing along with a growing Current, source of housing supply from many Vietnam and foreign real estate companies are quite diverse When Vietnam integrated into the world economy, conceptions about the apartment industry gradually changed along with the developing of the economy Today, owning an apartment is proud choice, especially for young people because interior decorations of apartments that are modern, luxurious and similar to or star hotels Each apartment is designed close to public services, such as supermarkets, Asian and European restaurants, swimming pool, multi gym, postal services, banking, kindergarten, office of the company, etc as a miniature city, so that people can use the utility on the spot without having to go far, etc In order to meet this demand, many construction companies have invested in this sector Compared to just two years ago, this year the apartment industry has diversified profusely Due to the increased competition experienced between firms, customer satisfaction has become more important Good product and quality differentiates between products, ensures consumer loyalty and may lead to increased market share In Vietnam, empirical studies on the state of customer satisfaction in the apartment industry are very scant The increase competition in the apartment industry in Vietnam and the growth trend in real estate supply for the past decade, does not 58 Pushpa a/p Packia, Rosadah bt Mahamud (2008) Satisfactory Level on Civil Servant Housing Universiti Teknologi Malaysia Procter J, Richard M (2002) “Word-of-Mouth Marketing: Beyond Pester Power, Advertising and Marketing to Children, World Advertising Research Center Parkes, A., Kearns, A., & Atkinson, R (2002) What makes people dissatisfied with their neighbourhoods? 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cứu thuộc trường Đại học kinh tế TPHCM Chúng thực nghiên cứu nhằm mục đích đánh giá nhân tố định thỏa mãn khách hàng dự án hộ Viện Nam Do vậy, khơng có trả lời hay sai mà thơng tin cung cấp anh (chị) có giá trị nghiên cứu Rất mong anh(chị) trả lời đầy đủ câu hỏi mức độ xác cao Phỏng vấn lúc …… giờ, ngày ………… Phỏng vấn bởi:……………… (01) Tên người trả lời:………………(02) Điện thoại người trả lời:……………….(03) Xin cho biết mức độ đồng ý anh(chị) phát biểu theo quy ước: Hoàn toàn phản đối Phản đối Trung hòa Đồng ý Hồn tồn đồng ý ST Mã Các phát biểu Mức độ đồng ý T CUSTOMER COST COST1 Giá bán hộ hợp lý COST2 Giá loại dịch vụ chung cư (an ninh, điện, nước, rác, giữ xe, …) hợp lý COST3 Công ty hỗ trợ lãi suất vay mua hộ PHYSICAL QUALITY PHYQ1 Phòng ăn hộ thiết kế hợp lý PHYQ2 Thiết kế hộ đảm bảo hệ thống chiếu sáng đón ánh sáng PHYQ3 Chất lượng cung cấp nước ổn định PHYQ4 Hệ thống thoát nước chung cư tốt PHYQ5 Kiến trúc bên hộ sang trọng ENVIROMENT QUALITY ENVQ1 Giao thông thuận tiện đảm bảo tiêu chuẩn cứu hỏa, cứu nạn 10 ENVQ2 Khu vực hộ đảm bảo không ồn 11 ENVQ3 Vấn đề an ninh khu vực chung cư đảm bảo PROJECT FACILITIES 12 PROF1 Tiền sảnh dự án hộ rộng, hợp lý 13 PROF2 Khu vực đậu xe đảm bảo an ninh mong đợi 5 5 5 5 5 61 Cầu thang bên thiết kế hợp lý Hệ thống thang máy tốt Chất lượng, kiến trúc phía trước hộ đẹp, thu hút có điểm nhấn 17 PROF6 Căn hộ có phòng hội nghị REGION FACILITIES 18 REFA1 Có nhiều hoạt động giải trí (khu vui chơi, nhà tập thể dục đa năng, ) xung quanh khu hộ nhằm đáp ứng nhu cầu khách hàng 19 REFA2 Có nhiều dịch vụ công cộng (siêu thị, nhà ăn, bưu đện ngân hàng, trường học ) thực mang cảm giác cho khách hàng 20 REFA3 Vị trí khu hộ nằm gần khu vực mua sắm, kinh doanh (ít shop, vận chuyển cơng cộng vòng bán kính km khu trung tâm SERVICE QUALITY 21 SERQ1 Cơng ty ln đảm bảo tính qn thực việc thực 22 SERQ2 Nhân viên làm việc chuyên nghiệp, tận tình giải đáp thắc mắc khách hàng trước sau mua hộ 23 SERQ3 Công ty cung cấp dịch vụ thời gian thỏa thuận 24 SERQ4 Khi gặp vấn đề công ty thể quan tâm chân thành việc giải 25 SERQ5 Khi giao dịch , cảm thấy an tâm với Công ty OVERRALL CUSTOMER SATISFACTION 26 SAT1 Tôi thỏa mãn với định sử dụng hộ 27 SAT2 Việc lựa chọn sử dụng hộ lựa chọn sáng suốt 28 SAT3 Nếu tơi mua lại hộ lần nữa, chọn cơng ty 29 SAT4 Tơi có kinh nghiệm tốt sử dụng hộ 14 15 16 PROF3 PROF4 PROF5 WORD OF MOUTH 30 WOM1 Ý định nói vấn đề tốt với người khác 31 WOM2 Giới thiện dự án hộ với khách hàng khác 32 WOM3 5 5 5 5 5 5 5 5 5 Khuyến khích bạn bè, người thân mua hộ từ dự án 33 Xin vui lòng cho biết anh (chị) thuộc nhóm tuổi đây: 76 62 34 Xin vui lòng cho biết mức thu nhập hàng tháng anh(chị): < triệu - < 10 triệu 10 - < 15 triệu 15 - < 20 triệu ≥ 20 triệu Nam Nữ 35 Giới tính: 36 Các nguồn thơng tin ảnh hưởng tới định đầu tư hộ: Xin cám ơn anh(chị) dành thời gian hoàn tất bảng câu hỏi này! Nhà môi giới Internet Báo chí Truyền miệng Khác 63 Appendix – Observed variables Customer cost Apartment price is very reasonable Service fees in apartment (security, electric, water, garbage, parking, etc) are very reasonable Company gives support to customer interest rate for buying apartment Physical quality Kitchen of apartment is designed reasonably Apartment’s design ensure lighting ( electronic lighting and window to outside) Apartment’s water (plumbing facilities, water quality and water pressure) are good Apartment’s drainage system are good Apartment’s internal architecture is designed luxurious Environmental quality Apartment’s traffic is convenient and ensure firefighting or rescue standard 10 Apartment area are ensure no noise 11 Region security is good Project facilities 12 Apartment project’s lobby is designed wide and reasonable 13 In Apartment, parking is adequate to resident demand and security 14 Apartment project’s external staircase is designed reasonable 15 Apartment project’s lift is good 16 Front attractiveness and quality are designed beautiful 17 Project have conference room Region facilities 18 There are many recreational activities (play area, gym, etc.) around the apartments to meet customers’ needs 19 There are many public services (supermarket, cafeteria, primary schools, etc.) is really feeling for customers 20 Apartment located close to shopping areas, business (at least shops, public transportation within a km radius of the center) 64 Service quality 21 Company ensure consistency of performance and dependability of the service 22 Employees have necessary knowledge to answer my questions before, during and after the buying apartment 23 Company provides its services at the time it promises to so 24 When I have problem, Company is sympathetic in solving them 25 I feel safe in my transaction with company Overall customer satisfaction 26 I am satisfied with my decision to use this apartment 27 My choice to use this apartment was a wise one 28 If I could it over again, I’d choose a different company 29 Using this apartment has been a good experience Word of mouth 30 Intentions to say positive things to others 31 Recommend the apartments of project to another consumer 32 Encourage friends and relatives to buy the apartment from this project 65 Appendix - Descriptive Statistics of variables COST1 COST2 COST3 PHYQ1 PHYQ2 PHYQ3 PHYQ4 PHYQ5 ENVQ1 ENVQ2 ENVQ3 PROF1 PROF2 PROF3 PROF4 PROF5 PROF6 REFA1 REFA2 REFA3 SERQ1 SERQ2 SERQ3 SERQ4 SERQ5 SAT1 SAT2 SAT3 SAT4 WOM1 WOM2 WOM3 Valid N (listwise) N Minimum Maximum Mean Std Deviation 237 3.81 881 237 3.61 926 237 3.77 907 237 3.49 876 237 3.56 819 237 3.81 991 237 3.66 847 237 3.64 856 237 3.86 824 237 4.08 706 237 3.92 891 237 3.54 750 237 3.38 877 237 3.48 871 237 3.62 921 237 3.49 1.032 237 3.28 995 237 3.21 928 237 3.50 895 237 3.81 759 237 3.49 876 237 3.51 827 237 3.38 943 237 3.42 843 237 3.47 861 237 3.60 820 237 3.34 1.011 237 3.53 890 237 3.41 999 237 3.08 986 237 3.17 1.053 237 3.22 1.089 237 66 Appendix – Reliability Analysis- Cronbach Alpha 4.1 Customer cost Reliability Statistics Cronbach's Alpha N of Items 795 Item-Total Statistics Scale Mean if Item Deleted Scale Variance if Item Deleted Corrected Item-Total Correlation Cronbach's Alpha if Item Deleted cost1 7.38 2.609 648 712 cost2 7.57 2.500 639 721 cost3 7.42 2.575 629 732 4.2 Physical quality Reliability Statistics Cronbach's Alpha N of Items 843 Item-Total Statistics Scale Mean if Item Deleted Scale Variance if Item Deleted Corrected Item-Total Correlation Cronbach's Alpha if Item Deleted phyq1 14.67 8.095 609 822 phyq2 14.60 8.164 655 811 phyq3 14.35 7.483 634 819 phyq4 14.51 7.836 706 797 phyq5 14.53 7.996 656 810 4.3 Environment quality Reliability Statistics Cronbach's Alpha N of Items 782 Item-Total Statistics Scale Mean if Item Deleted Scale Variance if Item Deleted Corrected Item-Total Correlation Cronbach's Alpha if Item Deleted envq1 8.00 1.958 643 680 envq2 7.78 2.257 644 694 envq3 7.94 1.878 593 746 67 4.4 Project facilities Reliability Statistics Cronbach's Alpha N of Items 806 Item-Total Statistics Scale Mean if Item Deleted Scale Variance if Item Deleted Corrected Item-Total Correlation Cronbach's Alpha if Item Deleted prof1 17.24 12.741 357 815 prof2 17.41 10.886 615 765 prof3 17.30 10.873 623 763 prof4 17.16 10.884 573 774 prof5 17.29 10.089 620 763 prof6 17.50 10.378 600 768 4.5 Region Facilities Reliability Statistics Cronbach's Alpha N of Items 746 Item-Total Statistics Scale Mean if Item Deleted Scale Variance if Item Deleted Corrected Item-Total Correlation Cronbach's Alpha if Item Deleted refa1 7.32 2.099 555 687 refa2 7.03 2.067 615 609 refa3 6.71 2.527 560 683 4.6 Service quality Reliability Statistics Cronbach's Alpha N of Items 851 68 Item-Total Statistics Scale Mean if Item Deleted Scale Variance if Item Deleted Corrected Item-Total Correlation Cronbach's Alpha if Item Deleted serq1 13.78 7.604 727 803 serq2 13.76 8.274 615 832 serq3 13.89 7.508 674 818 serq4 13.85 8.045 654 822 serq5 13.80 8.016 641 826 4.7 Customer Satisfaction Reliability Statistics Cronbach's Alpha N of Items 757 Item-Total Statistics Scale Mean if Item Scale Variance if Item Deleted Deleted Corrected Item-Total Correlation Cronbach's Alpha if Item Deleted sat1 10.28 5.517 485 735 sat2 10.54 4.054 732 589 sat3 10.36 5.231 500 728 sat4 10.47 4.801 516 723 4.8 Word of mouth Reliability Statistics Cronbach's Alpha N of Items 662 Item-Total Statistics Scale Mean if Item Deleted Scale Variance if Item Deleted Corrected Item-Total Correlation Cronbach's Alpha if Item Deleted wom1 6.39 3.255 456 589 wom2 6.30 2.845 534 482 wom3 6.25 3.020 434 621 69 Appendix 5- Factor Analysis a Determinants of customer satisfaction KMO and Bartlett's Test 834 Kaiser-Meyer-Olkin Measure of Sampling Adequacy 2633.644 Approx Chi-Square Bartlett's Test of Sphericity df 276 Sig .000 Rotated Component Matrix(a) Component phyq4 776 phyq1 737 phyq3 705 phyq2 705 phyq5 679 serq1 834 serq3 780 serq5 774 serq4 754 serq2 737 prof2 773 prof3 752 prof5 711 prof6 711 prof4 660 cost1 801 cost3 716 cost2 663 refa2 828 refa1 821 refa3 687 envq1 716 envq2 685 envq3 684 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization 70 5.2 Customer satisfaction and Word of mouth Factor Analysis KMO and Bartlett's Test 770 Kaiser-Meyer-Olkin Measure of Sampling Adequacy Approx Chi-Square Bartlett's Test of Sphericity 459.153 21 df 000 Sig Total Variance Explained Extraction Sums of Squared Loadings Initial Eigenvalues Componen t % of Tota Varianc l e % of Cumulativ Tota Varianc e% l e Rotation Sums of Squared Loadings % of Cumulativ Tota Varianc e% l e Cumulativ e% 3.128 44.693 44.693 3.128 44.693 44.693 2.259 32.270 32.270 1.001 14.306 58.999 1.001 14.306 58.999 1.871 26.729 58.999 861 12.307 71.306 679 9.706 81.012 538 7.680 88.692 520 7.431 96.123 271 3.877 100.000 Extraction Method: Principal Component Analysis Rotated Component Matrix(a) Component sat2 867 sat4 785 sat1 619 sat3 618 wom2 794 wom1 756 wom3 667 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization a Rotation converged in iterations 71 Appendix 6-Regression result 6.1 Linearity and homoscedasticity 6.2 NORMALITY 72 ... to increased market share In Vietnam, empirical studies on the state of customer satisfaction in the apartment industry are very scant The increase competition in the apartment industry in Vietnam. .. engage in word of mouth activity in apartment industry in Vietnam 1.5 Objectives of the study The following are the specific objectives of this study: - To examine the determinants of customer satisfaction. .. Firstly, the study is descriptive in that it seeks to describe in detail the determinants of customer satisfaction in the apartment industry, thus giving an in- dept understanding of the reality of customer