What factors affect on customer satisfaction when using services at highlands coffee store pico plaza branch

RESEARCH PROJECT (BMBR5103) WHAT FACTORS AFFECT ON CUSTOMER SATISFACTION WHEN USING SERVICES AT HIGHLANDS COFFEE STORE PICO PLAZA BRANCH? STUDENT’S FULL NAME : NGUYEN TRAN BAO THU STUDENT ID : CGS00064977 INTAKE : MARCH 2016 ADVISOR’S NAME & TITLE : DR BUI PHI HUNG August, 2017 Advisor’s assessment Advisor’s signature Customer Satisfaction in Highlands Pico Page i/ 73 ACKNOWLEDGMENTS A thesis on business administration with the topic "What factors affect on customer satisfaction when using services at Highlands Coffee - Pico Plaza Branch" is the result of the process of trying not to stop by myself and be helped and motivated by teachers, friends, colleagues and relatives I sincerely thank the leaders of HUTECH University and OUM University for creating favorable conditions for me to complete my research work Specially, I pay my respects and deep gratitude to Dr.Bui Phi Hung for his direct guidance as well as providing the necessary scientific information, along with useful tips for this thesis Finally, I would like to thank my friends and my family for helping me in the process of studying and doing this thesis Customer Satisfaction in Highlands Pico Page ii/ 73 TABLE OF CONTENTS ACKNOWLEDGMENTS ii ABBREVIATIONS vii ABSTRACT viii CHAPTER I: INTRODUCTION 1.1 RATIONALE 1.2 RESEARCH QUESTION 1.3 OBJECTIVE 1.4 METHODOLOGY 1.5 SCOPE 1.5.1 By topic: Services Quality are currently being provided by the HC 1.5.2 By space: Branch in Pico Plaza 1.6 SIGNIFICANCE OF THE RESEARCH 1.7 PROPOSED STRUCTURE CHAPTER II: LITERATURE REVIEW 2.1 2.1.1 Introduction 2.1.2 Coffee Culture in VietNam 2.2 CONCEPTS AND THEORETICAL FRAMEWORK 11 2.2.1 Customer Satisfaction (CS) 11 2.2.2 Determinant of Customer Satisfaction 12 2.2.3 Service Quality 14 2.2.4 SERVQUAL model 15 2.3 COFFEE CULTURE IN GLOBAL AND VIETNAM RESEARCH MODEL AND HYPOTHESIS 19 CHAPTER III : METHODOLOGY 21 3.1 RESEARCH DESIGN 21 3.2 TYPES OF DATA COLLECTED 23 3.2.1 Primary Data 23 3.2.2 Secondary Data 23 3.3 PRELIMINARY INTERVIEW 24 Customer Satisfaction in Highlands Pico Page iii/ 73 3.4 PILOT STUDY 28 3.5 MAIN SURVEY 29 3.5.1 Sample size 29 3.5.2 Sampling method 29 3.6 DATA ANALYSIS TECHNIQUES 30 3.6.1 Cronbach Alpha 30 3.6.2 Exploratory Factor Analysis (EFA) 31 3.6.3 Regression Analysis 31 3.6.4 One-Way ANOVA and Independent Sample T-test: 31 CHAPTER IV : DATA ANALYSIS AND RESULTS 33 4.1 SAMPLE DEMOGRAPHICS 33 4.2 MAIN SURVEY RESULT 36 4.2.1 Cronbach Alpha with Scales Before EFA 36 4.2.2 EFA (Exploratory Factor Analysis) 39 4.3 REGRESSION AND HYPOTHESES TESTING RESULTS OF THE RELATIONSHIP BETWEEN SERVICE QUALITY AND CUSTOMER SATISFACTION 48 CHAPTER V : DISCUSSION AND CONCLUSION 55 5.1 CUSTOMER SATISFACTION AMONG DEMOGRAPHIC VARIABLES 55 5.2 DISCUSSION 57 5.2.1 TANGIBLE 57 5.2.2 RELIABILITY 57 5.2.3 ASSURANCE 58 5.2.4 RESPONSIVENESS 58 5.3 CONCLUSION 59 5.4 LIMITATION AND RECOMMENDATION FOR FURTHER RESEARCH 61 REFERENCES 62 APPENDIX 64 Customer Satisfaction in Highlands Pico Page iv/ 73 LIST OF TABLES Table 1-1 : Number of HC stores from 2002 to 2016 in VietNam Table 1-2 : Southeast Asia‟s most visited coffee chains Table 3-1 : Construct Measurement Scales 25 Table 4-1 : Cronbach‟s Alpha before EFA 37 Table 4-2 : EFA and Cronbach‟s Alpha after EFA of Independent variable 45 Table 4-3 : EFA and Cronbach‟s Alpha after EFA of Dependent variable 47 Table 4-4 : Correlations 49 Table 4-5 : Collinearity Diagnostics 50 Table 4-6 : Result of the relationship between service quality and satisfaction 51 Table 4-7 : Coefficients 52 Table 4-8 : Hypotheses results 54 Table 5-1 : Hypotheses results 60 Customer Satisfaction in Highlands Pico Page v/ 73 LIST OF FIGURES Figure 1-1 : Research Process Figure 2-1 : Production in selected exporting countries (2013/2014 – 2016/2017) Figure 2-2 : Number and Discussion of The High-End Coffee Chain Shares at Social Media 10 Figure 2-3 : Conceptual Model of Service Quality 17 Figure 2-4 : Research Model 19 Figure 3-1 : Research Process 22 Figure 4-1 : AGE 33 Figure 4-2 : GENDER 34 Figure 4-3 : OCCUPATION 34 Figure 4-4 : MONTHLY INCOME 35 Figure 4-5 : USED TIME 35 Customer Satisfaction in Highlands Pico Page vi/ 73 ABBREVIATIONS  HC: Highlands Coffee  HCMC: Ho Chi Minh City  CS: Customer Satisfaction  ASS: Assurance  RES: Responsiveness  REL: Reliability  EMP: Empathy  TAN: Tangible  SERVQUAL: Service Quality Model Customer Satisfaction in Highlands Pico Page vii/ 73 ABSTRACT The purpose of this essay is to study the factors that affect customer satisfaction when using services at the Highlands Coffee - Pico Plaza branch A literature review was conducted to provide a theoretical framework for the research model at the HC - Pico Plaza branch The SERVQUAL model of the Parasuraman was selected and the questionnaire was prepared to examine customer satisfaction through the aspects of service quality at the coffee shop After collecting and analyzing 400 valid questionnaires with SPSS software, the results has showed that Assurance, Reliability, Responsive, Tangible ness have the positive relationship on Customer Satisfaction Although there are limitations of this study, this study is hoped to contribute implications for Highlands Coffee‟s managers when they want to improve service quality and enhance customer satisfaction Customer Satisfaction in Highlands Pico Page viii/ 73 CHAPTER I: INTRODUCTION 1.1 RATIONALE Highlands Coffee is a trademark of Viet Thai Group, established in 2002 by David Thai Initially, there were only two stores in Hanoi and HCMC However, three years ago, the brand was handed over to a foreign businessman, Jollibee of the Philippines The group has spent $25 million to buy 49% of its business in Vietnam and 60% of its Hong Kong division Since returning to Jolibee, the coffee chain Highlands has changed dramatically Locating in association with the brand of highlands coffee business, the former intellectuals have been "popular", to serve more customers Highlands customers also witnessed a change in the form of service, from "served" to "self-serving" The design and menu of the store are also changed in the direction of simplification Since the opening of the first two stores in 2002, after 14 years, this chain has increased to 130 The most is in Ho Chi Minh City with 53 stores So every 10 Highlands stores have stores in Saigon The area of the bar is also very diverse, where there are large scale, where in small scale, but overall, it is easy for customers to find a Highlands shop In District alone, the Highlands chain has 17 units, equivalent to the number of Highlands stores in Hanoi and is equal to the total number of Starbucks stores in Vietnam Customer Satisfaction in Highlands Pico Page 1/ 73 Table 4-5 : Collinearity Diagnostics Variance Proportions Condition (Constant Model Dimension Eigenvalue Index ) ASS TAN REL RES 1 4.874 1.000 00 00 00 00 00 046 10.301 07 55 04 12 11 036 11.611 04 38 01 00 83 027 13.369 10 02 95 15 01 017 16.956 79 06 00 73 05 a Dependent Variable: CS Autocorrelation‟ and „multicollinearity‟ are the basic problems of regression analysis When Table 4-6 presents for model summary, the evaluation can be made as follows: The Durbin-Watson test is a widely used method of testing for autocorrelation The Durbin-Watson Statistic is used to test for the presence of serial correlation among the residuals The value of the Durbin-Watson statistic ranges from to As a general rule of thumb, the residuals are uncorrelated is the Durbin-Watson statistic is approximately A value close to indicates strong positive correlation, while a value of indicates strong negative correlation DurbinWatson should be between 1.5 and 2.5 indicating the values are independent (Durbin and Watson, 1971) As shown in the relevant tables Durbin-Watson value of model is 1.643, between 1.5 and 2.5, showing the absence of auto correlation Customer Satisfaction in Highlands Pico Page 50/ 73 Table 4-6 : Result of the relationship between service quality and satisfaction Model Summaryb Model R 736a Adjusted R Square Square 542 R Std Error of Durbinthe Estimate Watson 537 42311 1.643 a Predictors: (Constant), RES, REL, ASS, TAN b Dependent Variable: CS ANOVAb Model Sum of Squares df Mean Square F 105.910 000a Regressio 75.842 n 18.961 Residual 64.091 358 179 Total 139.933 362 Sig a Predictors: (Constant), RES, REL, ASS, TAN Customer Satisfaction in Highlands Pico Page 51/ 73 The above model summary indicates that the model explains 54.2 % of the variability in the dependent variable, also F value and significance level (Sig = 0.00) indicates that the independent variables: Service Quality (RES, TAN, ASS, REL) explain a highly significant effected to the variation in the dependent variable, CS If Tolerance value in Table 4-7 is above 0.1, it indicates that the multiple correlation with other variables is low, and the inverse of Tolerance: VIF value is less than 2, means that we have not violated the multicollinearity assumption (Julie Pallant, 2008) In this case, Tolerance values are all above 0.6 (>0.1) and the VIF values are all less than 2, then we have not violate the multicollinearity Table 4-7 : Coefficients Unstandardized Coefficients Model B (Constant) 563 Std Error Standardized Coefficients Beta 138 Collinearity Statistics t Sig Tolerance VIF 4.089 000 ASS 193 032 249 5.987 000 740 1.351 TAN 287 035 346 8.226 000 723 1.384 REL 231 037 255 6.317 000 783 1.277 RES 109 033 147 3.326 001 658 1.520 a Dependent Variable: CS Customer Satisfaction in Highlands Pico Page 52/ 73 The above p-values are very small (Sig < 0.05) indicate that TANGIBLE has the greatest influence (0.287) on the dependent variable (Julie Pallant, 2008): Customer Satisfaction, then RELIABLILITY, ASSURANCE and RESPONSIVENESS The direction of influence is positive and thus, supports H1, H2, H3, H4 that there is a strong relationship between factors of Service Quality and Customer Satisfaction which can explain by linear equation as follow: CS = 0.563 + 0.287TAN + 0.231REL + 0.193ASS + 0.109RES The Main Question and Hypotheses are answered and the model was adjusted as following: Customer Satisfaction in Highlands Pico Page 53/ 73 Table 4-8 : Hypotheses results What factors affect on customer satisfaction when using services at Highlands Coffee – Pico plaza branch Hypothesis Results H1 There is a positive impact of reliability on customer satisfaction Support H2 There is a positive impact of responsiveness on customer satisfaction Support H3 There is a positive impact of tangible dimension on customer satisfaction Support H4 There is a positive impact of assurance on customer satisfaction Support H5 There is a positive impact of empathy on customer satisfaction Not - Support Customer Satisfaction in Highlands Pico Page 54/ 73 CHAPTER V : DISCUSSION AND CONCLUSION 5.1 CUSTOMER SATISFACTION AMONG DEMOGRAPHIC VARIABLES In the survey that we conducted on 400 customer, the personal information was divided into separate demographic groups Through the ANOVA / T-Test analysis, it is possible to compare somewhat the level of customer satisfaction among demographic variables We used the ANOVA method (with the gender group uses T-Test method) and obtained the following results (according to the appendix):  AGE: Sig in Levene Test> 0.05 and Sig in ANOVA Test> 0.05: Customers were divided into age groups from low to high in the survey, and were compared the level of satisfaction with the service quality The results showed no difference in CS among the age groups when they are using service at this branch  GENDER: using T-Test to determine the satisfaction of the service quality at HC, we can confirm that the satisfaction of men is more than that of women through the coefficients and charts in the attached appendix This can be explained for different reasons Currently in the coffee chains in Vietnam, the Highlands is one of the few coffee chains with black coffee made by phin,not by machine, making coffee taste more bold, meet the interests of men in Vietnam Besides, the price for a small black coffee size is 29 thousand VND, a reasonable price for customers with a large coffee brand as Highlands At the same time, women are more likely with more detailed assessments, more influencing factors to satisfy themselves when using services at HC, Pico branch  OCCUPATION: Sig in Levene Test> 0.05 and Sig in ANOVA Test> 0.05: This ratio indicates that the level of satisfaction of service quality at HC – Pico branch among occupational groups of customers in the survey was similar More specifically, CS is not affected much by their own work  MONTHLY INCOME: Sig in Levene Test> 0.05 and Sig in ANOVA Test