MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HOCHIMINH CITY …………………… Huỳnh Thị Ngọc Mai THE RELATIONSHIP BETWEEN SERVICE QUALITY, CUSTOMER SATISFACTION and CUSTOMER LOYALTY IN CLEANING SERVICE INDUSTRY An evidence of Pan Pacific Corporation MASTER’S THESIS Major: Business Administration Major Code: 60.34.05 Supervisor Dr Trần Hà Minh Quân Ho Chi Minh City 2010 ACKNOWLEDGEMENT I would like to record my most sincere appreciation and heartfelt thanks to individuals, of whom without, might not lead to the possibility of this research to be realized First and foremost, I wish to express my deep sincere gratitude to my supervisor Dr.Tran Ha Minh Quan for his guidance, encouragement and excellent advices throughout this study I would like to extend my sincere thanks to assistant Prof Nguyen Dinh Tho, Dr.Nguyen Thi Mai Trang and Dr.Dinh Cong Khai for their valuable comments and constructive suggestions I would also like to avail this opportunity to express my appreciation to Professor Nguyen Dong Phong and UEH Board of Directors for creating MBA program in English I am also thankful to all my classmates in MBA class-Bath 16, especially Ms.Nguyen Nhu Chang, Mr.Nguyen Thanh Trung, Mr.Lam Hong Phong, for their collaboration and valuable assistance throughout my study Gratitude also goes to Board of Management of Pan Pacific Corporation, colleagues for giving me supports Many thanks for Pan Pacific’s Clients who save value time to respond my survey questionnaire, without them my thesis could not have been done Last but not least, the express my profound gratitude to my beloved mother, my lover and my closest friends for being patience and never failed giving me continuous supports, spiritually and encouragement along the study i ABSTRACT In the present cleaning service industry, service quality is a vital competitive policy to keep customers support and long-term cooperation Cleaning service providers are trying to win customer satisfaction and loyalty by proving enhanced quality service The aim of this study is to examine the relationship between service quality, customer satisfaction and customer loyalty in cleaning service industry In this study, attention is paid to the measurement model of service quality in cleaning service industry based on the well-known SERVQUAL model, but with modification on the basis of focus group discussions and expert opinions to reflect the specific industry attributes and the special culture of Vietnam 158 samples were collected from Pan Pacific Corporation’s various clients in the South of Vietnam Cronbach Alpha was carried out to test the reliability of each statement and the summated scales were formulated by means of Exploratory Factor Analysis (EFA) Then, Multiple Linear Regressions test was used to test the effect of Service Quality on Customer Satisfaction and Customer Loyalty, the effect of customer satisfaction on loyalty Overall findings from this study suggest there were significant relationship between Service Quality, Customer Satisfaction and Customer Loyalty The study found that there were six dimensions of cleaning service quality including affectivity, cleaner competence, supervisor competence, tangibles, service safety, empathy and all dimensions are positively related to Customer Satisfaction The regression test also found that there was a positive direction and significant relationship between customer satisfaction on customer loyalty The results indicated that the overall service quality has significantly positive effect on overall customer loyalty Among these six dimensions except Empathy, all of them have a significantly positive effect on overall customer loyalty Keywords: cleaning service industry, service quality, customer satisfaction, customer loyalty ii TABLE OF CONTENT ACKNOWLEDGEMENT i ABSTRACT ii TABLE OF CONTENT iii Chapter 1: INTRODUCTION 1.1 Introduction about cleaning service industry 1.2 Research background: 1.3 Research problem 1.4 Research Questions 1.5 Objectives of the study 1.6 Scope of the Study 1.7 Research method 1.8 Structure of the study Chapter 2: LITERATURE REVIEW 2.1 Service quality 2.2.1 Definition of service quality 2.2.1.1 Definition of “Quality” 2.2.1.2 Definition of “Service” 2.2.1.3 Definition of “service quality” 11 2.2.2 Measurement of service quality 11 2.2.3 Cleaning service quality 16 2.2 2.2.3.1 Definition of “Cleaning” 16 2.2.3.2 Definition of cleaning service quality: 16 2.2.3.3 Determinants of cleaning service quality: 17 2.2.3.4 Cleaning quality awareness 20 Customer satisfaction 23 2.3 Customer loyalty 24 iii 2.4 Relationship between service quality, customer satisfaction and loyalty 25 2.5.1 Relationship between Service quality and customer satisfaction 25 2.5.2 Relationship between Customer Satisfaction and Loyalty 26 2.5.3 Relationship between service quality and customer loyalty 27 Chapter 3: RESEARCH METHODOLOGY 29 3.1 Research design 29 3.2 Item generation 31 3.3.1 Items to measure Service Quality 32 3.3.2 Items to measure customer satisfaction 33 3.3.3 Items to measure customer loyalty 35 3.3 Preliminary study 35 3.4 Theoretical Model 37 3.5 Main survey 37 3.5.1 Sampling 37 3.5.2 Sample size 38 3.5.3 Survey method and data collection 39 3.6 Data Analysis techniques 39 Chapter 4: DATA ANALYSIS AND RESEARCH FINDINGS 41 4.1 Descriptive statistics of sample 41 4.2 Descriptive Analysis 44 4.3 Scales assessment 44 4.4.1 Reliability Analysis Results 44 4.4.2 Exploratory factor analysis (EFA) 46 4.4.2.1 Measurement scales of cleaning service quality 46 4.4.2.2 Measurement scales of customer loyalty 51 4.4.3 Adjustment of theoretical model 54 4.4 Testing the research model and the hypotheses 55 iv 4.4.1 Testing correlations between all constructs 55 4.4.2 Testing hypotheses 56 4.5 4.4.2.1 The relationship between Cleaning Service Quality and Customer Satisfaction 56 4.4.2.2 The relationship between Customer Satisfaction and Loyalty…………58 4.4.2.3 The relationship between cleaning service quality dimensions and customer loyalty 60 DISCUSSION AND FINDINGS 63 Chapter 5: CONCLUSIONS AND IMPLICATIONS 65 5.1 Conclusions of the study 65 5.2 Implications of the study 66 5.2.1 Theoretical implications 66 5.2.2 Practical implications 66 5.3 Limitations and recommendations for further research 68 APPENDIX 1- CUSTOMER SATISFACTION FEEDBACK 69 Vietnamese 73 English 73 SOME ACTIVITIES OF CLEANING SERVICES FOR REFERENCE 76 v LIST OF TABLES Table 3.1- Measurement scales of cleaning service quality 34 Table 3.2- Measurement scales of customer loyalty .35 Table 4.1- Sample characteristics 41 Table 4.2- Descriptive Statistics 44 Table 4.3 – Reliability of the measurement instrument 46 Table 4.4 – Rotated component matrix of cleaning service quality scale 50 Table 4.5 – Total Variance Explained of customer loyal 51 Table 4.6 – EFA result for individual measurement scales .52 Table 7-Final construct measurement scales 52 Table 4.8- Summary of hypotheses .55 Table 4.9– Correlation matrix .56 Table 4.9a- Model Summary (cleaning service and customer satisfaction) 57 Table 4.9b – Coefficients 58 Table 4.10a-Model Summary ( customer satisfaction and customer loyalty) 58 Table 4.10b – Coefficients 60 Table 4.11a - Model Summary ( service quality and customer loyalty) 61 Table 11b – Coefficients 61 vi LIST OF FIGURES Figure 2.1- SERVQUAL gap analysis 13 Figure 3.1-Research process 31 Figure 3.2 - Theoretical Model .38 Figure 4.1a - Position of respondents 42 Figure 4.1b-Gender of respondents .43 Figure 4.1c - Service range of respondents 43 Figure 4.2 - Adjusted theoretical model .54 Figure 4.3- Hypothesis H1 testing result 58 Figure 4.4-Hypothesis H2 testing result 60 Figure 4.5 -Hypothesis H3 testing result 62 vii Chapter 1: INTRODUCTION This chapter begins with general introduction about cleaning service and the current study is provided with research background, research problem, research objectives and research questions are mentioned as the rationale for this study Also, scope of the current study are discussed and an introduction of the methodology to be used in this chapter At the end of the chapter, the structure of this study is provided 1.1 Introduction about cleaning service industry Nowadays, cleaning service is very popular in human life Cleaning service providers is responsible for providing all necessary management, manpower, machinery, equipment, tools, chemicals (exclusive such items, which the Landlord shall provide), which were pre-approved by the Landlord to efficiently carry out the cleaning tasks of the project in accordant with the international standard and Landlord requirements They also provides uniformed, properly trained and appropriately skilled cleaners All cleaners have a yearly health check Cleaners shall at all time while on duty be dressed in full uniform, well groomed, cleanshaven, polite and helpful Service providers maintains the minimum number of contracted cleaners and provides additional cleaners as it determines necessary for full cleaning coverage during sickness, holidays, etc Using cleaning service bring to us much advantage : high quality service, reasonable fee, the professional and well trained working force from the leading company in cleaning and property care, the modern specific cleaning equipments without any investment, maintaining the value of the property, creation a clean and beautiful working environment for both officers and visitors, avoidance from directly management to the cleaning workers and risks from its potential problems, whole hearted concentration on own business Among of many cleaning service providers in Vietnam, Pan Pacific is one leading company in this industry, with operating in over 20 cities and provinces nationwide, supplying cleaning service for more than 300 customers of many business types Pan Pacific also is among of Vietnam largest cleaning providers with over 5000 skilled employees With more than 17 years experience in cleaning service industry, Pan Pacific has developed various customer system including Commercial Buildings (office buildings, service apartments), Supermarkets and Shopping Centers, Hospitals & Medical Centers, Factories in IPs, EPZs, International Schools Especially, Pan Pacific also have many experiences in supplying regular cleaning service for typical projects with highest level national security such as; International Airports, Television Station 1.2 Research background: Going with developing real estate market and foreign investment, demand of facility management in office buildings, shopping centers, international schools, foreign factories are appeared These management services include security, property maintenance, pest controls, landscape and cleaning service In which cleaning service industry is very important to enhance quality and brand of the building Instead of organizing and managing a cleaning division, owners can contract with professional cleaning company which can provide package service including manpower, equipments, tools, chemicals A cleaning company will provide uniformed, properly trained and appropriately skilled cleaners, all cleaners have a yearly health check, cleaners shall at all time while on duty be dressed in full uniform, well groomed, clean-shaven, polite and helpful Cleaning company will provide additional cleaners as it determines necessary for full cleaning coverage during sickness, holidays, etc Cleaning company also is responsible compensating damage of property which cause of their employees when satisfaction reaches a certain level, loyalty increases dramatically; at the same time, when satisfaction declined to a certain point, loyalty dropped equally dramatically (Oliva et al., 1992) Therefore Pan Pacific should not only focus their effort to improve their Service Quality, but they also need to revisit their service and think how to satisfy their customers When testing relationship between service quality and customer loyalty, our findings confirm that that there was a positive significant relationship between the five cleaning service quality dimensions (tangibles, affectivity, cleaner competence, supervisor competence, service safety) and customer loyalty It also brought out some unexpected outcomes “empathy” one of cleaning service dimensions was not support in their relationship with customer loyalty However, it is difficult to say that empathy dimension is not important in loyalty Further study needs to be undertaken to investigate this problem Once more, by this result the study found that dimensions of service quality are different from service industries, markets and countries In general, the management should primarily focus on customer satisfaction for which service quality is an important antecedent Because the impact of perceived service quality on preference loyalty is considerably strong leading to a more favorable disposition towards the service provider and increased commitment to re-patronize if the Pan Pacific customer satisfied with the service quality offered by them, their customer will be more likely to be more loyal to them In short, Pan Pacific not only to improve their service quality, but they must also look at how to satisfied their customer to retain their customer loyalty This chapter provides the analysis results and main findings of the study Several discussion about the research results are also presented in this chapter The next chapter will draw general conclusion of the study, implications for management, theory and future research 64 Chapter 5: CONCLUSIONS AND IMPLICATIONS The previous chapter presented the analysis results and the main findings of the study At the end of chapter 4, a modified model was also proposed In this final chapter, summarized all hypotheses that will be used to answer for the research questions of this study and general conclusion will be drawn At the end implications for management, theory and future research will be addressed 5.1 Conclusions of the study Based on the findings in the chapter 4, the present study determined that there are six dimensions of cleaning service quality and their prioritization are cleaner competence, supervisor competence, affectivity, tangible facilities, service safety and empathy This result is the answer of research question The study also examined Pan Pacific Corporation’s customers via survey questionnaires, data analysis, trying to figure out relationship between service quality, customer satisfaction and customer loyalty in cleaning service industry The result showed a significantly positive relationship between overall service quality and customer satisfaction In additional, all service quality dimensions have a significantly impact on customer satisfaction Similar to examine relationship between service quality and customer satisfaction, analysis outcome presented there is a significantly positive relationship between cleaning service quality and customer satisfaction However, all service dimensions have a significant impact on customer loyalty except “empathy” The research question is supported The study also found that, there is a significantly positive between customer satisfaction and customer loyalty 65 5.2 Implications of the study 5.2.1 Theoretical implications The main purpose of this study is to gain a better understanding of relationship between service quality, customer satisfaction, customer loyalty in cleaning service sector As there is no specific model for cleaning service industry in Vietnam so far, this model is the first that provides a clear image of the dimensions that contribute to the service quality in cleaning service industry The primary contribution has been made to enrich the existing theories With regards to research methodology, this study contribute to the marketing literature a measurement scale as a useful instrument to measure quality in cleaning service Vietnam 5.2.2 Practical implications The findings of this study have important implications on the management of cleaning service industry field Cleaning services happen regularly and defining customer’s need and preference, and their related quality dimensions have increasingly become a key driving force in enhancing customers’ satisfaction and attract more customers This study identified a total of six dimensions of service quality Obviously, in order to maintain a high level of overall service quality and to strengthen competitiveness in the extremely competitive market the cleaning service providers should pay attention all these dimensions tested in this study More specifically, the following implications are recommend to cleaning service : Firstly, the findings suggest that cleaner competence and supervisor competence are critical determinants of cleaning service quality, manpower always has a important role in many industries, especially cleaning service Cleaning staffs and supervisor are people who usually work closely with customers every day A supervisor has good managerial skills, action attitude will keep the cleaning quality as standard, flexible in solving arising issues during providing cleaning service of 66 supervisor always lead to customer satisfaction and loyalty Cleaning team with good working skills, devotion attitude is always enhance a professional image of cleaning company in customer eyes, improving brand of the buildings Cleaning service companies should have professional management, good recruit and training system New cleaner should have well training before starting the works at sites Secondly, affectivity dimension which is representative of reliability and responsiveness side respect also has a key role in cleaning service quality Cleaning companies have to provide service as obligation and have prompt response to crisis, issues caused during the process of cleaning and also unforeseen customer emergencies To meet this requirement, cleaning companies not only focus on service personnel as above mention but also should have professional organization with closely coordinate between function departments, especially Sales and Operation Department The affectivity or responsiveness service dimensions implies that cleaning company should have immediately corrected actions when receiving complaints from customers Thirdly, tangibles and service safety dimensions contribute to customer satisfaction and loyalty Customers feel secure in using cleaning service with modern equipment, good tools and especially chemicals which are not effect to environment and properties Paying attention to these factors keep the property of landlord stably, showing professional image Finally, empathy was is assessed less important than others, but it is necessary component in cleaning service A good relationship with clients will let them share their thought about service quality This will help cleaning service providers correcting the issues immediately to satisfy customers 67 5.3 Limitations and recommendations for further research The findings of this study have to be interpreted considering few limitations First, data were collected only from a single cleaning service provider, so the results might not hold true for other cleaning companies Further research should attempt to replicate the findings in other contexts and more services provider Second, data collection was is limited to customer which have project in the South only, so the findings should not be generalized for all the customers of the entire country Availability sampling is another limitation of the study, However, availability sampling is quite common in the service quality and customer satisfaction literature In addition, the current study not being an experimental one it was not possible to eliminate or withhold the influence of unidentified and undesired extraneous variables from the study Hence, future researchers might consider the recommended studies to draw causal inferences more confidently and safely Finally, theoretically other variables like price perception, corporate image, switching cost etc influence customer loyalty, and including such variable(s) in the study would have made the research models more robust and interesting In future research additional variables should be incorporated 68 APPENDIX 1- CUSTOMER SATISFACTION FEEDBACK Company:…………………………………………………………………… Commentator:……………………………………………………………… Position:……………………………………………………………………… DIRECTIONS: This survey deals with your opinions of cleaning services Please show the extent to which you think firms offering cleaning services should possess the features described by each statement Do this by picking one of the five numbers next to each statement If you strongly agree that these firms should possess a feature, circle the number If you strongly disagree that these firms should possess a feature, circle If your feelings are not strong, circle one of the numbers in the middle There are no right or wrong answers All we are interested in is a number that best shows your perceptions about Pan Pacific’s cleaning services Please rate your level of agreement with the following statements by circle one number : 1.Strongly disagree No 2.Disagree 3.Neutral 4.Agree 5.Strongly agree Level of agreement Statement ☺ 10 Company fulfils the obligation rightly as commitment Company provides its services at the promised time Company has professional quality management system Company has ability to compensate for all loses and the occurred damage caused directly by cleaning staffs at all time when working fo customer Company has ability to provide extra services (external window cleaning, waxing floor, upgrade floors…) Comply with safety regulation when perform cleaning works at height 1 1 2 2 3 3 4 4 5 5 5 Company overcomes arising problem promptly Company solves quickly when receives complaints from customer Company keeps customers informed about how to solve customer complaints Schedule of cleaning work is adjusted flexibly when customer has suitable comments 1 2 3 4 5 5 69 11 12 Company is willing to help customer Company responds to customer's requests promptly 1 2 3 4 5 13 14 Company keep communication with customer regularly Company give customers attention sincerely 1 2 3 4 5 15 16 17 18 19 20 21 22 23 New staffs have good training Staff’s working skill is good Staff’s working performance is professional Staff’s working attitude is devotion Staff’s working attitude is active Supervisor has ability to control cleaning standard at site Supervisor knows how to monitor and assign staffs effectively Supervisor is good in communication Supervisor has ability to solve works quickly 1 1 1 1 2 2 2 2 3 3 3 3 4 4 4 4 5 5 5 5 24 25 26 27 28 29 30 31 32 33 Using good brand and modern equipments Using good brand chemical Using chemical friendly to environment Using chemical having technical data specification from manufacture Using chemical are not effected to customer’s property Cleaning tools are good quality Cleaning tools are specific for each working zone Company’s staffs have a neat, professional appearance Staffs uniform is good design and clean color Cleaning checklist form is specific and professional 1 1 1 1 1 2 2 2 2 2 3 3 3 3 3 4 4 4 4 4 5 5 5 5 5 34 35 36 Cleaning service quality is improved each year Cleaning quality is controlled as standard Performing full scope of work as agreement 1 2 3 4 5 37 We satisfy with cleaning service quality of Pan Pacific 38 Recommend cleaning service of Pan Pacific to someone/company who seeks your advice Consider Pan Pacific your first choice to use cleaning service Continue to use services of Pan Pacific in the next few years Pay a higher price than competitors charge for the benefits you currently receive from Pan Pacific 1 2 3 4 5 39 40 41 Thanks for your taking the time and precious opinions 70 APPENDIX 2- PHIẾU Ý KIẾN KHÁCH HÀNG Đơn vị: …………………………………………………………………………………………………………………………………………………………… Người đánh giá:………………………………………………………………………………………………………………………………………… Chức vụ:………………………………………………………………………………………………………………………………………………………… HƯỚNG DẪN : Bảng khảo sát tập trung tìm hiểu ý kiến q vị dịch vụ vệ sinh Xin vui lòng cho biết đánh giá quý vị dịch vụ vệ sinh Pan Pacific cách chọn mức độ đồng ý phát biểu Quý vị chọn số đồng ý số không đồng y với nội dung phát biểu Không có câu trả lời hay sai mà thông tin cung cấp Q vị có giá trị Vui lòng cho biết mức độ đồng ý quý vị nội dung phát biểu cách khoanh tròn vào MỘT số theo quy ước : Rất không đồng ý No 2.Không đồng ý 3.Bình thường 4.Đồng ý 5.Rất đồng ý Nội dung Mức độ đồng ý ☺ Công Ty thực vấn đề cam kết Công Ty cung cấp dịch vụ thời gian hứa Công ty có hệ thống quản lý chất lượng chuyên nghiệp Công ty có khả bồi thường khách hàng xảy hư hỏng mát nhân viên vệ sinh gây trình thực dịch vụ Công ty có khả cung cấp dịch vụ khác liên quan đến lónh vực vệ sinh ( lau kính cao, phủ keo sàn, phục hồi sàn đá đặc biệt…) Tuân thủ quy định an toàn thực công việc vệ sinh treân cao 1 2 3 4 5 5 Coâng ty tổ chức thực khắc phục cố phát sinh Công ty giải vấn đề nhanh chóng nhận phàn nàn từ khách hàng Công ty thông tin cho khách hàng tình hình giải phàn nàn Công ty linh động điều chỉnh bố trí công việc có góp ý phù hợp từ khách hàng Công ty luôn sẳn sàng hỗ trợ khách hàng cần Công ty đáp ứng nhanh yêu cầu khách hàng 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 10 11 12 71 13 Công ty thường xuyên liên lạc với khách hàng tình hình thực dịch vụ Công ty thể quan tâm khách haøng 5 Nhân viên vệ sinh huấn luyện tốt Nhân viên vệ sinh có kỹ làm việc tốt Nhân viên vệ sinh thực công việc chuyên nghiệp Nhân viên vệ sinh có thái độ làm việc tận tâm Nhân viên vệ sinh làm việc động Giám sát có khả kiểm soát tiêu chuẩn chất lượng vệ sinh theo tiêu chuẩn Giám sát có khả hướng dẫn bố trí nhân viên hiệu Giám sát có khả giao tiếp tốt với khách hàng Giám sát có khả giải công việc nhanh choùng 1 1 1 2 2 2 3 3 3 4 4 4 5 5 5 1 2 3 4 5 1 1 2 2 3 3 4 4 5 5 29 30 31 32 33 Công ty sử dụng thiết bị đại, có thương hiệu tốt Công ty sử dụng hóa chất có thương hiệu tốt Công ty sử dụng hóa chất thân thiện với môi trường Công ty sử dụng hóa chất có đặc tính kỹ thuật rõ ràng từ nhà sản xuất Công ty sử dụng hóa chất không ảnh hưởng đến tài sản khách hàng Công ty sử dụng dụng cụ vệ sinh có chất lượng tốt Công ty sử dụng dụng cụ vệ sinh riêng biệt cho khu vực Nhân viên vệ sinh có trang phục gọn gàng hình ảnh chuyên nghiệp Đồng phục nhân viên có thiết kế đẹp màu sắc phù hợp Các phiếu kiểm tra chất lượng vệ sinh chi tiết, chuyên nghiệp 1 1 2 2 3 3 4 4 5 5 34 35 36 Chất lượng dịch vụ vệ sinh cải tiến theo thời gian Chất lượng vệ sinh kiểm soát ổn định Thực đầy đủ chi tiết công việc thỏa thuận 1 2 3 4 5 37 Chúng hài lòng với dịch vu vệ sinhï Công Ty Pan Pacific 38 39 Giới thiệu dịch vụ vệ sinh Pan Pacific đến đơn vị khác Luôn cân nhắc Pan Pacific chọn lựa sử dụng dịch vụ vệ sinh Tiếp tục sử dụng dịch vụ Pan Pacific thời gian tới Sẳn sàng trả giá cao đối thủ cạnh tranh khác Pan mang 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customers loyal?, Cornell Hotel and Restaurant Administration Quarterly 2004; 45; 221 Saha, Parmita and Zhao, Yanni (2005), Relationship between online service quality and customer satisfaction, Lulea University of Technology 75 SOME ACTIVITIES OF CLEANING SERVICES FOR REFERENCE 76 77 Mop bucket Dust mop Wet mop 78 ... thing, as the right place, as the right time” ( wright 199 9, 169) In management, quality is seen as “ meeting the customer requirements” ( Oakland 199 3,5 ) 16 In the cleaning industry, cleaning. .. services include security, property maintenance, pest controls, landscape and cleaning service In which cleaning service industry is very important to enhance quality and brand of the building Instead... trying to win customer satisfaction and loyalty by proving enhanced quality service The aim of this study is to examine the relationship between service quality, customer satisfaction and customer