The impact of servicescape on customer behavioral intention a study of apartment leasing service in HCMC

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Phan Thi Tuyen THE IMPACT OF SERVICESCAPE ON CUSTOMER BEHAVIORAL INTENTION: A STUDY OF APARTMENT LEASING SERVICE IN HCMC MASTER OF BUSINESS (Honors) Ho Chi Minh City – Year 2016 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Phan Thi Tuyen THE IMPACT OF SERVICESCAPE ON CUSTOMER BEHAVIORAL INTENTION: A STUDY OF APARTMENT LEASING SERVICE IN HCMC ID: 22140062 MASTER OF BUSINESS (Honors) SUPERVISOR: Dr PHAM NGOC THUY Ho Chi Minh City – Year 2016 Acknowledgement I would like to express my deepest gratitude to ISB’s committee members, to my supervisor, Dr Pham Ngoc Thuy who have been supportive every step of this research Dr Pham Ngoc Thuy helped me pursue the route and the topics of my interests and made the whole process enjoyable She gave me guidance with details when I encountered problems She gave words of encouragement and showed tremendous understanding when I couldn’t break through Her knowledge and experience helped me set the course and made it possible for me to continue my research I also would like to send many thanks to my family who motivate me a lot during research period, to my clients, my friends and colleagues who participated in the interview and survey for this research They also gave me useful thoughts and comments on my research Their contributions make my research possible Abstract This study examines the relationship between every aspect of servicescape, service experience evaluation, and customer behavioral intentions Based on data derived from 304 customers who have leased apartments in Ho Chi Minh City (HCMC), a link was found between both the substantive and communicative aspects of the servicescape reliably predicted customers’ evaluations This research also found that a more favorable service experience evaluation positively related to behavioral intentions Theoretical contributions of this research are elucidated Moreover, managerial implications related to servicescape design, promotion strategies and service experience enhancement are discussed Keywords Servicescape, substantive staging of servicescape, communicative staging of servicescape, customer behavioral intentions, leasing service, service experience evaluation TABLE OF CONTENTS ACKNOWLEDGEMENT ABSTRACT TABLE OF CONTENTS LIST OF FIGURES LIST OF TABLES Introduction Literature review 2.1 Apartment Leasing Service in condominiums 2.2 Servicescape 2.2.1 Substantive Staging of Servicescape 11 2.2.2 Communicative Staging of Servicescape 13 2.3 Service experience evaluation 14 2.2 Behavioral intentions 16 Method 17 3.1 Procedure and sampling 17 3.2 Measurement scales 20 Data analysis and results 23 4.1 Measurement validation 23 4.2 Confirmatory Factor Analysis (CFA) 25 4.3 Hypotheses testing 30 4.4 Structural equation model (SEM) results 31 Discussions 33 5.1 Implications 34 5.2 Conclusion 35 5.3 Limitations and recommendations for future research 36 Support information 37 6.1 Result of pilot research 37 6.2 Questionnaire 40 REFERENCES APPENDIX LIST OF FIGURES Figure 1: Conceptual model 17 Figure 2: CFA result 27 Figure 3: SEM result 32 LIST OF TABLES Table 1: Descriptive statistics of sample 20 Table 2: Measurement scales 22 Table 3: Comparison between CFA threshold values and CFA results 26 Table 4: Measurement scale validity and reliability testing result 29 Table 5: Means, standard deviations, and standardized CFA loadings of items 29 Table 6: Structural paths in the model 31 Table 7: Findings of pilot research 37 Table 8: The respondent’s nationality 40 Table 9: The name of condominiums 41 Introduction Bitner (1992) introduced the concept of "servicescape" as combination of service and landscape that denotes the physical and mental environment in which customer experiences are created Servicescape is where a service provider provide services to its customers Servicescape is not only a cue for the expected service quality, but also influences customers' evaluations of other factors determining perceived service quality (Reimer & Kuehn, 2005) Nilsson and Ballantyne, 2014 stated that a servicescape does not simply impact customer perceptions of service functions and service quality, but more subtly, also impacts on the meanings a customer draws from a lot of intangible, contextual and symbolic elements of a service Servicescape or atmospherics have the means of providing the evidence that assists consumers in making subjective evaluations of service products (Hoffman & Turley, 2002) Therefore, servicescape has a direct and an indirect effect on perceived service quality, but different from service quality, servicescape has a high overall effect Servicescape has well developed theory which have been successfully tested in many service contexts such as leisure service setting (Wakefield & Blodgett, 1996), hotel industry (Countryman & Jang, 2006), retail service (Hooper et al, 2013), theme park service (Dong & Siu, 2013), etc Moreover, numerous studies have highlighted various aspects of servicescape, such as color and light, background music, as well as odors (Reimer & Kuehn, 2005) In Vietnam, some master theses studied about the effect of servicescape to customer loyalty in restaurants or in coffee shop However, servicescape of apartment leasing service in condominiums has not been paid adequate attention Leasing service is a common service in condominiums or residential buildings requiring a large amount of capital of investors It is not a high risk investment but it can be a high return investment if the investors buy the right properties In the world, roundly 40% of population lives in rental housing (Malpezzi, as cited in Amenyah & Fletcher, 2013) In Ho Chi Minh City (HCMC), recently, a large number of condominiums came into the market In 2015, the total supply was approximately 4,370 apartments from 83 projects, increasing 6% year-on-year (YoY) From 2016 to 2018, more than 67,000 units are expected to enter the market which providing around 2,200 apartments for leasing (Savills, Ho Chi Minh City Market Brief Q1 2016) With a high gross domestic product (GDP) growth rate and being considered as the most dynamic city in Viet Nam, in 2015, Ho Chi Minh City attracted US$3 billion in foreign direct investment (FDI), up 129% (YoY) Increasing FDI inflow has positively affected the demand for leasing apartments The increasing of supply and demand is a phenomenon creating a dynamic leasing apartment market Nevertheless, the rapid increasing in supply of leasing apartment service in the coming years pushes the competition among investors, developers more and more intense The lessees nowadays have strong bargaining position due to many choices of leasing apartments Furthermore, the requirements of the lessees to have a stable residence is more and more stringent They not only require to have a nice interior decoration, high quality home appliances and furniture, etc which are provided inside the apartment, they also require to have a beautiful view, peaceful and clean area, good facilities, fresh air, or how people manage the condominium, how safe and security it is, etc which are related to the landscape of service or the physical and mental environment Generally, location, surrounding development and scenic beauty are common determinants of the demand for condominium properties (Zarin & Bujang, 1999) The lessees normally prefers leasing apartment in condominiums to other types of property due to the rental, convenience, safety, environment, location, etc The lessors who invest for leasing service normally look for long term lease contracts and premium rentals leading to profitable investments Accordingly, to meet those requirements and encourage lessees to continue using service, the developers as well as lessors need to build their properties with attractive servicescape to have more competitive advantages Servicescape is considered as future’s form of intense competition in service environment (Ishaq, Bhutta, Hamayun, Danish & Hussain, 1995) Miles, Miles and Cannon (2012) state that servicescape is a part of competitive approach that should be promoted and emphasized For those reasons, this paper contributes to the literature on servicescape by examining the impact of Servicescape on behavioral intentions of leasing service in HCMC To be more specific, this paper is armed to examine: - The relationships between substantive staging and communicative staging of servicescape and service experience evaluation of customers leasing apartments in HCMC - The relationship between customers’ service experience evaluation and their behavioral intention to continue using apartment leasing service 41 Table 9: The name of condominiums Name of Frequency condominium Percent Name of Frequency Percent condominium Happy Valley 16 Riviera Point 48 Riverside Residence 20 Riverpark Residence 5,3 Sunrise City 19 6,2 42 13.5 6,6 Saigon Pearl 13 4,3 15 4,9 Estella 14 4,6 The Panorama 19 6,2 City Garden 1,0 Sky Garden 21 6,9 The manner 17 5,6 Thao Dien Pearl 1,6 1,6 Other 42 13.5 Cantavil Hoan Cau 12 3,9 Total 304 100 15,8 Icon 56 6.2 Questionnaire Dear Participants, My name is Phan Thi Tuyen, an MBA student at the International School of Business, University of Economics Ho Chi Minh City I am currently conducting a survey about the experience of leasing apartment within condominiums in Ho Chi Minh City I would appreciate your support if you could spend a few minutes to complete the following survey Your identity will remain anonymous in this survey The study will be a useful reference document for the service providers, the landlords and the tenants Please note that there are no right or wrong answers All the answers are valuable for this study 42 PART I: GENERAL INFORMATION Have you used services at any apartments in condominiums? (In this survey we only focus on the services regarding the physical environment and people The other services like internet service, tivi cable service, real estate service are out of this survey.)  Yes  No - If your answer is “No”, you can stop here Thank you for your time in completing this question If your answer is “Yes”, please continue answering the question bellows: Are you the owner of the apartment or the tenant?  The tenant  The owner - If your answer is “The owner”, you can stop here Thank you for your time in completing this question If your answer is “The tenant”, please continue answering the question bellows: How many condominiums have you leased in the last years? (Number of apartments) Your purpose to stay in the latest condominium is for:  Business  Living with family/children  Study  Travelling 43  Other:…………………… How long have you intended to lease your latest apartment?  Less than months  18 months – 24 months  months – 12 months  More than 24 months  12 months – 18 months Please give the name of condominium you lives/lived  Happy Valley  Saigon Pearl  Riviera Point  Estella  Riverside Residence  City Garden  Riverpark Residence  The manner  The Panorama  Thao Dien Pearl  Sky Garden  Cantavil Hoan Cau  Sunrise City  Other:……………  Icon 56 Please call “X” is the name of condominium in question to answer the rest of questionnaire 44 PART II: SERVICE EVALUATION Instructions: Please answer the following questions based on your most recent leasing apartment experience To what extent you agree with each of the following statements, Please circle the number that best reflects your response for each statement using the following = Neutral = Agree = Strongly agree Agree Strongly agree = Disagree Neutral = Strongly disagree Disagree 5-point scale where: Strongly disagree No 5 SUBSTANTIVE STAGING OF SERVICESCAPE The public areas (reception, lobby, gym, garden,…) are kept clean The atmosphere is peaceful The facilities (security and access system, gym, tennis court, swimming pool, children playground, lights,…) are up-to-date The architecture is attractive 5 The signs and notices displaced are helpful to me 5 The layout makes the facilities (parking lot, gym, tennis court, swimming pool, children playground…) easy to use The color scheme is attractive The style of decoration is fashionable 45 The facilities (security and access system, gym, tennis court, swimming pool, children 5 5 5 5 5 5 playground, lights…) are maintained well 10 In general, the physical environment pleases me COMMUNICATIVE STAGING OF SERVICESCAPE 11 12 13 14 15 16 17 18 The receptionists and management staff are helpful The receptionists and management staff are polite and friendly The security guards are professional Employees working in this condominium give customers personal attention The maintenance staff and security guards are passionate about work The receptionists and security guards are neat and well dressed The signage of the condominium are effective The condominium brings the local culture to the tenants SERVICE EXPERIENCE EVALUATION 19 20 My experience with this leasing apartment was memorable My experience with the leasing apartment was enjoyable 21 I had a good overall experience 22 I would like to repeat the whole experience 5 23 My money was well spent for the whole experience 46 I would definitely like to stay at this 24 condominium if I decide to live in this area in the 5 5 5 future BEHAVIORAL INTENTIONS 25 26 27 28 29 I will say positive things about “X” condominium to other people I will recommend “X” condominium to someone who seeks my advice I will encourage friends and relatives to rent apartments at “X” condominium I would consider staying “X” condominium as the first choice to lease apartment I would consider staying in “X” condominium in the next few years if I live in this area PART III: DEMOGRAPHIC INFORMATION Please provide your personal information for the purpose of statistical data I am committed that all provided information will be kept confidential What is your gender:  Male  Female Whom you live with? 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