Petrcaived justice in service recovery and recovery satisfiction and customer loyalty a studyof education service in viet nam , luận văn thạc sĩ

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ************* PHAM THI MAI PHUONG PERCEIVED JUSTICE IN SERVICE RECOVERY AND RECOVERY SATISFACTION AND CUSTOMER LOYALTY: A STUDY OF EDUCATION SERVICES IN VIET NAM MASTER OF BUSINESS (by Honour) Ho Chi Minh City-Year 2013 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ************* PHAM THI MAI PHUONG PERCEIVED JUSTICE IN SERVICE RECOVERY AND RECOVERY SATISFACTION AND CUSTOMER LOYALTY: A STUDY OF EDUCATION SERVICES IN VIET NAM ID: 22110047 MASTER OF BUSINESS (by Honour) SUPERVISOR Dr NGUYEN DONG PHONG Ho Chi Minh City-Year 2013 ACKNOWLEDGEMENTS I would like to express my deeply sincere gratitude to my Supervisor, Dr.Nguyen Dong Phong, for his valuable, enthusiastic guidance and advice on effective method He helps me to understand the research method thoroughly His value experience and professional knowledge give me opportunities to recognize issues deeply His inspiration to me played an important role in finishing my research Furthermore, I would like to express my gratitude to Dr Nguyen Thai Hoang; his excited lectures encouraged me to explore more how to apply research method to a research Besides, I would like to thanks to respondents who have supported me a lot in answering questionnaire and interview, which really help me to complement my research Another source of motivation I would like to thank is my classmates ISB Mbus 2011 for a mutual support by sharing, discussing ideas, knowledge and experiences in the term of research And an honorable mention I want to send my gratitude to my family, friends for their understanding and helping to collect data for completing my thesis Ho Chi Minh City, Viet Nam th 05 Jan, 2014 Pham Thi Mai Phuong i ABSTRACT The purpose of this research is to empirically investigate the relationships of Service Recovery (Interactional Justice, Procedure Justice, and Distributive Justice) and Customer Satisfaction, between Customer Satisfaction and customer Loyalty The empirical setting is implemented in the English teaching Service in a developing economy of Viet Nam, particularly in Ho Chi Minh City The findings of this study reveal that Vietnamese Customers who perceive Interactional Justice, Procedure Justice, and Distributive Justice feel satisfied after complaining Customers consider perception of Distributive is the most important to response their behavior and attitude towards English teaching service after encountering a service failure They appreciate resolving of complaints by outcomes which they received compared to what they required Besides, Consumers also observe treatment and response of employees when they complaint to Centers Customers expect courteous and respectful communication from employees when they response with customer’s problem A good attitude with caring and concerning about what customers experienced and uncomfortable is good criteria for customers to evaluate Service Recovery of Center Study also found that procedure of Service Recovery is more efficient when Center train employees how to communicate with customers to make them tell their problems Because, it is very difficult to know how customers value service if they not discuss anything about this The research affirm that Satisfaction of Customer after handling complaints impacting on customer Loyalty significantly Thus, this result contributes to the literature review of studies in English teaching Service that Service Recovery is always an important factor to improve the customer satisfaction and customer Loyalty Key words: service recovery, perceived justice, recovery satisfaction, customer loyalty ii TABLE OF CONTENTS ACKNOWLEDGEMENT ABSTRACT TABLE OF CONTENTS LIST OF FIGURES LIST OF TABLES CHAPTER 1: INTRODUCTION 1.1 RESEARCH BACKGROUND 1.2 PROBLEM IDENTIFICATION 1.3 RESEARCH OBJECTIVES AND QUESTION 1.4 SIGNIFICANCE OF THE RESEARCH 1.5 RESEARCH SCOPE 1.6 RESEARCH METHODOLOGY 1.7 LIMITATION 1.8 THESIS STRUCTURE CHAPTER 2: LITERATURE REVIEW AND CONCEPTUAL MODEL 2.1 SERVICE RECOVERY 2.1.1 Interactional Justice 11 2.1.2 Procedural Justice 11 2.1.3 Distributive Justice 12 2.2 CUSTOMER SATISFACTION AND CUSTOMER LOYALTY 13 2.2.1 Customer Satisfaction 13 2.2.2 Customer Loyalty 14 2.3 CONCEPTUAL MODEL 16 CHAPTER 3: RESEARCH METHODOLOGY 17 iii 3.1 QUANLITATIVE RESEARCH ………………………………………………………… 3.2 CONSTRUCTION OF MEASUREMENT 17 3.2.1 Measurement Scale of Interactional Justice 18 3.2.2 Measurement Scale of Procedural Justice 19 3.2.3 Measurement Scale of Distributive Justice 20 3.2.4 The measurement of customer satisfaction after handling complaint 21 3.2.5 The measurement of Customer Loyalty 21 3.3 DATA COLLECTION 22 3.3.1 Source of data 22 3.3.2 Questionnaire 22 3.4 SAMPLE 24 3.5 DATA COLLECTION PROCEDURE 25 3.6 DATA ANALYSIS 26 CHAPTER 4: RESULTS OF DATA ANALYSIS AND DISCUSSION 28 4.1 SAMPLE DISCRIPTION 28 4.1.1 Name of English center respondents used to experienced 29 4.1.2 Cost of English center respondent used 29 4.1.3 The profession, gender and age of respondents 30 4.2 RELIABILITY ANALYSIS OF MEASUREMENT SCALES 31 4.2.1 Reliability analysis result of measurement scale of Interactional Justice 31 4.2.2 Reliability result of measurement scale of Procedural Justice 32 4.2.3 Reliability analysis result of measurement scale of Distributive Justice 33 4.2.4 Reliability analysis result of measurement scale of Recovery Satisfaction 34 4.2.5 Reliability analysis result of measurement scale of Loyalty 35 4.3 EXPLORATORY FACTOR ANALYSIS 36 4.3.1 EFA for group of predictors 36 4.3.2 EFA for group of items of Customer Satisfaction and Loyalty measurement Scale 38 iv 4.4 MULTIPLE REGRESSION ANALYSIS 40 4.4.1 Revised Conceptual Model 40 4.4.2 Multiple Regression Testing Assumptions 40 4.4.3 Multiple Regression Analysis 45 4.5 DISCUSSION 50 CHAPTER 5: CONCLUSION AND MANAGERIAL IMPLICATION 52 5.1 CONCLUSION 52 5.2 MANAGERIAL IMPLICATION 53 5.3 LIMITATION 55 REFERENCES 56 APPENDICES 59 APPENDIX 1: SURVEY FORM 59 APPENDIX 2: RESULTS F CRONBACH’S ANPHA 63 APPENDIX 3: RESULTS OF EFA 79 APPENDIX 4- RESULTS OF MULTIPLE REGRESSION 91 v LIST OF FIGURES Figure 1: Conceptual Model Figure 2: The process of research Figure 3: Name of English center respondents used to experienced Figure 4: Tuition fees of English course respondents used to experienced Figure 5: Gender and age of respondents Figure 6: Profession of respondents Figure 7: Revised Conceptual Model vi LIST OF TABLES Table 1: List of Interviewers Table 2: Measurement Scale of Interactional Justice Table 3: Measurement Scale of ProcedureJustice Table 4: Measurement Scale of DistributiveJustice Table 5: Measurement Scale of customer satisfaction after handling complaint Table 6: Measurement Scale of Customer Loyalty Table 7: The result of delivery questionnaires Table 8: Cronbach’s Alpha of scale of Interactional Justice Table 9: Cronbach’s Alpha of scale of ProceduralJustice Table 10: Cronbach’s Alpha of Scale of Distributive Justice Table 11: Cronbach’s Alpha of Scale of Satisfaction Table 12: Cronbach’s Alpha of Scale of Loyalty Table 13: EFA result of Predictors Table 14: EFA result of Satisfaction and Loyalty Table 15: Results of Multiple Regression Analysis Table 16: Result of Simple Regression Analysis vii Chapter 1: Introduction CHAPTER 1: INTRODUCTION 1.1 RESEARCH BACKGROUND Today, the number of language center increase significantly every year, accounting for 40% of kind of culture center in Viet Nam while the number of student studying in the language center stand for 70% compare to others This proved that second language was and is getting become more important in our life Since Viet Nam has joined WTO, there were many foreign companies invested in Viet Nam This leads to local company need more human resources have ability to use English Ho Chi Minh City is the biggest city in Viet Nam, which is united culture center, developed economic, and education Therefore, there are a lot of English centers opened to meet demand of English studying for millions of students and employees Besides local English centers, many international group built and developed a chain of English center such as Ila, AMA…They are big competitors to VUS, Outer-space language, VAS, and others Due to developed society, expectation of customer about service becomes higher They demand more strict requirements Therefore, the possibility which the service producers deliver services in failure is bigger Service failure is defined as those situations when the service fails to live up to the customer‟s expectations (Michel, 2001) It is clear that service failure is inevitable When customers dissatisfy with service received then they will respond by reaction such as emotional reaction (anger, disappointment, regret) or behavior reaction (complaining, negative mouth to mouth or switching of these providers to others) The bad case is that they will negative mouth to mouth of services It is coined that mouth to mouth advertising is very effective and quick Thus, the important is providers have to handle complaints and resolve problems to maintain customers and avoid negative word of mouth Recently there have been many studies about this problem, they found out remedy for service failure which helps company change lose to win The one of effective therapies to ease customer dissatisfaction is service recovery When firms handle complaint and failures effectively this can have a great effect on customer retention rates, defect the spread of damaging word of mouth and improve bottom-line performance (Morrisson and Huppertz, 2010) However, the degree of success might depend on the type of service Appendices Summary Item Statistics N of Items Inter-Item Correlations Item-Total Statistics Scale Mean if Item Deleted INTER2 INTER3 INTER4 INTER5 INTER6 Appendices APPENDIX 3: RESULTS OF EFA KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy Bartlett's Test of Sphericity Communalities INTER2 INTER3 INTER4 INTER5 INTER6 PRO7 PRO8 PRO9 PRO10 PRO11 PRO12 DIS13 DIS14 Appendices Extraction Method: Principal Component Analysis Total Variance Explained Compo Initial Eigenva nent Total 10 11 12 13 Appendices Total Variance Explained Component 10 11 12 13 Extraction Method: Principal Component Analysis Component Matrix INTER2 INTER3 INTER4 INTER5 INTER6 PRO7 PRO8 PRO9 Appendices a PRO10 PRO11 PRO12 DIS13 DIS14 Extraction Method: Principal Component Analysis a a components extracted Rotated Component Matrix INTER2 INTER3 INTER4 INTER5 INTER6 PRO7 PRO8 PRO9 PRO10 PRO11 PRO12 DIS13 DIS14 a Appendices Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization a a Rotation converged in iterations Component Transformation Matrix Compo nent Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy Bartlett's Test of Sphericity Communalities SAT17 SAT18 SAT19 LOY21 LOY22 Appendices Extraction Method: Principal Component Analysis Total Variance Explained Compo Initial Eigenva nent Total Total Variance Explained Component Appendices Extraction Method: Principal Component Analysis Component Matrix a Component SAT17 828 -.248 SAT18 849 -.249 SAT19 839 -.294 LOY21 849 328 LOY22 813 473 Extraction Method: Principal Component Analysis a a components extracted Rotated Component Matrix Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization a a Appendices a Rotation converged in iterations Component Transformation Matrix Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization Appendices APPENDIX 4- RESULTS OF MULTIPLE REGRESSION ANOVA a Model Regression Residual Total a Dependent Variable: SAT b Predictors: (Constant), DIS, INTER, PRO Coefficients a Model (Constant) INTER PRO DIS Coefficients a Model (Cons INT PR DI Appendices Collinearity Diagnostics a Mo Dimens del ion 1 a Dependent Variable: SAT a Dependent Variable: SAT Predicted Value Std Predicted Value Standard Error of Predicted Value Adjusted Predicted Value Residual Std Residual Stud Residual Deleted Residual Stud Deleted Residual Mahal Distance Cook's Distance Centered Leverage Value Appendices a Dependent Variable: SAT a Dependent Variable: LOY b All requested variables entered M od el a Predictors: (Constant), SAT b Dependent Variable: LOY Model a Dependent Variable: LOY b Predictors: (Constant), SAT Appendices Coefficients a (Constant ) SAT Model (Cons SAT a Dependent Variable: LOY Collinearity Diagnostics Mo del a Appendices a Dependent Variable: LOY Residuals Statistics a Predicted Value Residual Std Predicted Value Std Residual Dependent Variable: LOY Appendices ... commonly as consumer‟s behavioral loyalty and attitudinal loyalty (Parasuraman et al ., 2005) Behavioral loyalty is expressed as repeated transactions, or called percentage of total transactions in category)... that interactional justice can be divided into two dimension in analyzing comprised Interactional treatment and informational justice (Colquitt, 2001; Mattila and Cranage, 2005) Informational justice. .. grouped as expected, except item PRO12 was in factor including items INTER 2,INTER3,INTER 4, INTER 5, INTER6 instead of factor including PRO 7, PRO 8, PRO 9, PRO1 0, PRO11 Because there was a little changed