The relationship between service quality and customer loyalty, an empirical study on pharmasy customrrs in ho chi minh city

MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY — HOANG NGOC CAM TU THE RELATIONSHIP BETWEEN SERVICE QUALITY AND CUSTOMER LOYALTY: AN EMPIRICAL STUDY ON PHARMACY CUSTOMERS IN HO CHI MINH CITY MASTER THESIS OF BUSINESS ADMINISTRATION HO CHI MINH CITY – 2012 MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY — HOANG NGOC CAM TU THE RELATIONSHIP BETWEEN SERVICE QUALITY AND CUSTOMER LOYALTY: AN EMPIRICAL STUDY ON PHARMACY CUSTOMERS IN HO CHI MINH CITY Subject: Master of Business Administration Code: 60.34.01.02 MASTER THESIS OF BUSINESS ADMINISTRATION SUPERVISOR: DR TRAN HA MINH QUAN I ACKNOWLEDGEMENT For the completion of this thesis, I would like to extend my deep gratitude to Dr Tran Ha Minh Quan, who gave me intensive support, valuable suggestion, guidance and encouragement during the time I conduct my thesis Through his guiding I found the way to conduct thesis successfully and also the way to solve research problems I also want to say thankful to my classmate at eMBA K19 for their sharing knowledge and honestly support during the time we studied and conducted thesis, their passion to finish thesis and encouragement gave me more strength to get over objection on the way to graduation Last but not least, I am grateful to my husband and my family for their warm encouragement during the time I finished the thesis Although I has tried the best to complete the thesis, but errors could not be comprehensively avoided Therefore, I am looking forward to receiving comments from respectful lecturers and friends, so that I can improve more on the quality of this thesis Hoang Ngoc Cam Tu Ho Chi Minh, 25 October 2012 II COMMITMENT I would like to commit that this thesis, “THE RELATIONSHIP BETWEEN SERVICE QUALITY AND CUSTOMER LOYALTY: AN EMPIRICAL STUDY ON PHARMACY CUSTOMERS IN HO CHI MINH CITY”, was accomplished based on my independent and serious studies and scientific researches The data was collected in reality and it has clear origins In addition to that, the data would be trust-worthily handled and it has never been released in any menu Hoang Ngoc Cam Tu III CONTENTS ACKNOWLEDGEMENT COMMITMENT CONTENTS TABLES FIGURES CHAPTER I: INTRODUCTION 1.1 1.2 1.3 1.3.1 1.3.2 Problem Statement Research Objective Contribution Academic Contribution Business Contribution 1.4 Scope and Approach 1.5 Research Structure 2.1 Service Quality 2.2 Customer Loyalty 2.3 Relationship Between Service Quality and Loyalty 3.1Research Design 3.2 Questionnaire Development 3.2.1 3.2.2 Service quality scale Customer loyalty scale 3.3 Questionnaire Translation 3.4Group Discussion 3.5 Target population 3.6 Sample size 3.7 Selecting the sample and collecting data 3.8 Method of data analysis 3.8.1 3.8.2 3.8.3 3.8.3 3.8.5 Data cleaning Reliability Confirmatory Factor Analysis (CFA) Structural Equation Model (SEM) Analysis of variance (one-way and two-way ANOVA) IV 4.1 4.2 4.3 4.3.1 4.3.2 4.4 Characteristic of qualified respondents Normality analysis Reliability of the measurements Reliable Test of Service Quality (SERVPERF) Measurement Reliable test of customer loyalty scale Confirmatory factor analysis 4.5 HYPOTHESIS TESTING 4.6 Analysis of variance 4.6.1 The effect of gender on loyalty 4.6.2 The effect of age on loyalty 4.6.3 The effect of income on loyalty 5.1 Discussion on findings 5.2 Practical implications 5.3 Contribution of the current study 5.4 Limitations and Future research REFERENCES APPENDIX TABLES Table 2-1: Five Dimensions of Service quality V Table 2-2: Loyalty Scale Table 3-1: Survey Items Used in The Study-Service Quality Scale Table 3-2: Survey Items Used in The Study-Customer Loyalty Scale Table 3-3: Assessing fit indices Table 4-1: Variables Table 4-2: Socio-demographic Characteristics of The Qualified respondents Table 4-3: Assessment of Normality Table 4-4: Reliability of Service Quality Measurement (SERVPERF scale) Table 4-5 Reliability of loyalty measurement Table 4-6: Composite reliability Table 4-7: Standardized Regression Weights – Hypothesized Model Table 4-8: Assessing Fit Indices – Modified Model Table 4-9: Regression Weights: (Group number - Default model) Table 4-10: T-test of gender toward loyalty (BI) Table 4-11: ANOVA Test Of Age Toward Loyalty Table 4-12: ANOVA Test Of Education Toward Loyalty Table 4-13: ANOVA test of income toward loyalty FIGURES Figure 2-1: The conceptual Model Figure 3-1: The research process VI Figure 3-2: The translation process Figure 4-1: CFA model Figure 4-2: SEM result (standardized estimate) CHAPTER I: INTRODUCTION 1.1 Problem Statement From 2001 to 2008, Vietnamese pharmaceutical market has increased significantly with average about 19.9% per year, especially in 2008 the growth was up to 25.5% compared to 2007 (Tan et al., 2009) In recent years, with the higher average income, Vietnamese people tend to spend more on healthcare service While average expense for medicine of Vietnamese people in 1998 was just about 5.5 USD, in 2008 the average expense for medicine was 16.5 USD and up to 19.77 USD in 2009 (Tan et al., 2009) The growth in pharmaceutical market is attributed by increasing trend in self-medication, inline with the greater awareness of health issues As end-stage in medicine distribution (along with hospitals), pharmacies has become the most important factor to ensure the good consuming medicine product to most of consumer, the best place for self-medication Especially in rural areas, where patient rather visit pharmacies than hospital for their minor health problem, pharmacies are not only places to buy drug but also places where patient can get fast and effective medicine for their simple disease At pharmacies, patient can be advised how to use medicine safety and effectively In Vietnam, when patient got health problem, most of them will go to pharmacies nearby to take some medicine; this situation make the role of pharmacies become more and more important Adapted to Ministry of Health regulation in 2007, that all pharmacies in Ho Chi Minh City should be improved to GPP (Good Pharmacy Practices) standard to increase service to consumer, pharmacies has been put in a new competition for increasing infrastructure and service quality More and more new GPP pharmacies appeared in HCM city in year 2011 with many formalism of increasing service: pharmacist or doctor available, economic price, gift for loyal customer…etc Pharmacies are doing their best to increase service quality to attract loyal customer to maximize profit Aim at understanding how to improve loyalty pharmacy customer, this research is conducted to clarify relationship between service quality and customer loyalty 1.2 Research Objective To examine if any dimension of service quality, that are tangibility, reliability, responsiveness, assurance and empathy effect on loyalty in pharmaceutical market To investigate if there is any difference on mean of loyalty of pharmaceutical consumer between demographic factors such as income, age, and gender 1.3 Contribution 1.3.1 Academic Contribution XVIII APPENDIX Appendix I: English questionnaire Dear Sir/Madam, This survey is done by the University of Economic Ho Chi Minh City The primary purpose of this study is to improve the understanding the impact service quality on customer loyalty This XIX questionnaire is completely confidential When you finish, please seal your questionnaire in the envelope provided Thank you very much A In relation with your perception, to what extent you disagree or agree with the following statements? Please circle one suitable number for each statement: Strongly disagree This pharmacy has modern equipment The installations of this pharmacy are visually agreeable The employees of this pharmacy have an agreeable aspect The equipment of this pharmacy are in view of the service This pharmacy does what it promises When I have a problem, this pharmacy demonstrates interest in it resolution This pharmacy does the service well at first time This pharmacy does the service in the promised time In this pharmacy does not commit errors 10 This pharmacy has a quickly attendance 11 The employees of this pharmacy inform you conveniently 12 The employees of this pharmacy aren’t ever occupied to answer to your questions 13 The employees of this pharmacy are always prepared to help you 14 The behavior of the employees of this pharmacy inspires confidence to the customers 15 You feel secure when you buy this pharmacy 16 The employees of this pharmacy are always pleasant XX 17 The employees of this pharmacy have sufficient knowledge’s to answer to your questions 18 This pharmacy priority is the customer 19 This pharmacy has personnel attendance 20 This pharmacy has a convenient horary 21 The employees of this pharmacy personnel attendance 22 The employees of this pharmacy answer to your more specific needs 23 I pretend to continue to be customer to this pharmacy 24 I consider this pharmacy as my first choice in pharmaceutical services 25 I have only positive things to transmit from this pharmacy 26 I recommend this pharmacy to someone that needs my advice 27 I stimulate my friends and familiars to buy in this pharmacy D Lastly, a couple of questions about you: Gender □Male : Total monthly income 5 millions and 10 millions and 15 millions and 20 millions Your education Primary/Secondary XXI High school Graduate College Post graduate Thank you very much Appendix II: Vietnamese questionnaire Kính thưa Anh/Chị/Bạn, Nghiên cứu thực học viên cao học Trường Đại Học Kinh Tế Thành Phố Hồ Chí Minh Mục đích nghiên cứu nhằm tìm hiểu vai trị chất lượng dịch vụ nhà thuốc đến lòng trung thành khách hàng Mọi thông tin quý Anh, Chị bạn cung cấp qua bảng câu hỏi để phục vụ cho nghiên cứu nói thơng tin cá nhân giữ bí mật Xin chân thành cảm ơn Xin vui lòng cho biết địa nhà thuốc (nhà thuốc X) mà Anh/Chị bạn thường mua và/ thích mua: Nhà thuốc quận/huyện:………………………… Tỉnh/thành phố:…………………………… A Xin vui lòng cho biết ý kiến phát biểu sau đâyvề nhà thuốc (nhà thuốc X) Rất không Rất đồng đồng ý ý XXII Nhà thuốc có trang thiết bị đại Cách trưng bày nhà thuốc nhìn đẹp mắt Nhân viên nhà thuốc ăn mặc gọn gàng lịch Trang thiết bị nhà thuốc đạt tiêu chuẩn để phục vụ cho dịch vụ nhà thuốc Nhà thuốc thực theo họ cam kết Khi gặp vấn đề, nhà thuốc tỏ quan tâm đến việc giúp giải vấn đề Nhà thuốc thực dịch vụ tốt lần Nhà thuốc thực dịch vụ thời gian cam kết Nhà thuốc khơng gây sai sót 10 Nhà thuốc phục vụ nhanh chóng 11 Nhân viên nhà thuốc thông tin cho cách rõ ràng dễ hiểu 12 Nhân viên nhà thuốc không bận rộn mà khơng trả lời tơi 13 Nhân viên nhà thuốc sẵn sàng giúp tôi cần 14 Ứng xử nhân viên nhà thuốc làm cho khách hàng tin cậy 15 Tôi thấy an tâm mua nhà thuốc 16 Nhân viên nhà thuốc nhã nhặn 17 Nhân viên nhà thuốc có đủ kiến thức để trả lời câu hỏi 18 Ưu tiên số nhà thuốc khách hàng 19 Nhà thuốc phục vụ theo nhu cầu riêng biệt khách hàng XXIII 20 Nhà thuốc có thời gian hoạt động thuận tiện cho tơi 21 Nhân viên nhà thuốc phục vụ theo nhu cầu riêng biệt khách hàng 22 Nhà thuốc đáp ứng nhu cầu đặc biệt tơi 23 Tơi có ý kiến tốt nhà thuốc 24 Tôi giới thiệu nhà thuốc tới người cần lời khuyên tơi 25 Tơi khuyến khích bạn bè người thân mua nhà thuốc 26 Tôi dự định tiếp tục khách hàng nhà thuốc 27 Tôi xem nhà thuốc làlựa chọn cần nhà thuốc B Xin cho biết vài thông tin Anh, Chị bạn: Giới tính: □ Nam □ Nữ Tuổi: …………… Thu nhập (triệu đồng/tháng): □ < 10 □ > 10 < 15 □ > 15 < 20 > 20 Học vấn: □ Phổ thông □ Trung Cấp □ Cao Đẳng □ Đại học □Sau đại học Xin chân thành cảm ơn quý Anh, Chị Bạn Appendix 3: Confirmatory Factor Analysis (CFA) results XXIV Model Fit Summary CMIN Model Default model Saturated model Independence model RMR, GFI Model Default model Saturated model Independence model Baseline Comparisons Model Default model Saturated model Independence model Parsimony-Adjusted Measures Model Default model Saturated model Independence model NCP Model XXV Model Default model Saturated model Independence model FMIN Model Default model Saturated model Independence model RMSEA Model Default model Independence model AIC Model Default model Saturated model Independence model ECVI Model Default model Saturated model Independence model HOELTER XXVI Model Default model Independence model Regression Weights: (Group number - Default model) TG4 TG3 TG2 TG1 RS4 RS3 Regression Weights (continue) RS3 RS2 RS1 AR4 AR3 aAR2 AR1 EM4 EM3 EM2 EM1 RE5 RE4 RE3 RE2 RE1 BI5 BI4 BI3 BI2 XXVII BI1 EM5 < - < - Correlations: TG_ TG_ TG_ TG_ RS_ AR_ EM_ APPENDIX 4: STRUCTURAL Regression Weights: RS_ < > AR_ < > Variances: TG RS AR EM RE Squared Multiple Correlations: Estimate BI 919 Appendix 4: Structural Equation Model results (continue) Model Fit Summary CMIN Model Default model Saturated model Independence model RMR, GFI Model Default model XXX Model Saturated model Independence model Baseline Comparisons Model Default model Saturated model Independence model Parsimony-Adjusted Measures Model Default model Saturated model Independence model NCP Model Default model Saturated model Independence model FMIN Model Default model Saturated model Independence model RMSEA Model Default model Independence model XXXI AIC Model Default model Saturated model Independence model ECVI Model Default model Saturated model Independence model HOELTER Model Default model Independence model ...MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY — HOANG NGOC CAM TU THE RELATIONSHIP BETWEEN SERVICE QUALITY AND CUSTOMER LOYALTY: AN EMPIRICAL STUDY ON. .. that this thesis, ? ?THE RELATIONSHIP BETWEEN SERVICE QUALITY AND CUSTOMER LOYALTY: AN EMPIRICAL STUDY ON PHARMACY CUSTOMERS IN HO CHI MINH CITY? ??, was accomplished based on my independent and serious... pharmacies in HCM city The study is conducted in main phases: pilot study and main study The purpose of the pilot study is to check the contents and to examine the measurement scales Then the main study