Factors contributing to customer loyalty in vietnam industrial gases maket

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Phan Thanh Bình FACTORS CONTRIBUTING TO CUSTOMER LOYALTY IN VIETNAM INDUSTRIAL GASES MARKET MASTER OF BUSINESS (Honours) Ho Chi Minh City – Year 2014 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Phan Thanh Bình FACTORS CONTRIBUTING TO CUSTOMER LOYALTY IN VIETNAM INDUSTRIAL GASES MARKET ID: 21110002 MASTER OF BUSINESS (Honours) SUPERVISOR: Dr V TH D NG Ho Chi Minh City – Year 2014 i CONTENTS CHAPTER 1: INTRODUCTION 1.1 Research Background 1.2 Research Problems 1.3 Management Prolems 1.4 Research Objectives 1.5 Research Scope 1.6 Structure of Research CHAPTER : LITERATURE REVIEW AND HYPOTHESIS 2.1 Definitions of Constructs 2.1.1 Relationship quality 2.1.2 Perceived service quality 10 2.1.3 Customer satisfaction 12 2.1.4 Customer loyalty 13 2.2 Relationship between the constructs 18 2.2.1 The relationship between relationship quality, customer satisfaction and customer loyalty 18 2.2.2 The relationship between perceived service quality, customer satisfaction and customer loyalty 19 2.2.3 The relationship between customer satisfaction and customer loyalty 19 ii 2.3 Conceptual Model 21 2.4 Hypothesis 21 CHAPTER : RESEARCH METHODOLOGY 23 3.1 Research Design 23 3.2 Measurement 23 3.2.1 Relationship quality 23 3.2.2 Perceived service quality 24 3.2.3 Customer satisfaction 27 3.2.4 Customer loyalty 28 3.3 Qualitative research 28 3.4 Quantitative research 29 3.4.1 Quesionnaire design 29 3.4.2 Sample size 30 CHAPTER : DATA ANALYSIS AND RESULTS 32 4.1 Data Statistical Analysis 32 4.2 Reliability Test (Cronbach Alpha) 33 4.3 Exploratory Factor Analysis 36 4.4 Multiple Linear Regression 39 4.4.1 Correlation Analysis 39 4.4.2 Multiple Linear Regression analysis 41 4.5 Simple Linear Regression 46 iii CHAPTER : CONCLUSION, IMPLICATION AND LIMITATION 49 5.1 Conclusion 49 5.2 Implication 50 5.3 Limitations 51 REFERENCES 53 APPENDIX 1A: Survey form (in English) 57 APPENDIX 1B: Survey form (in Vietnamese) 60 APPENDIX 1C: List of companies answering the survey 63 APPENDIX 2: Data analysis result - EFA 67 APPENDIX 3: Data analysis result - MLR 70 APPENDIX 4: Data analysis result - SLR 74 iv LIST OF FIGURES Figure 1.1: Typical production plant, facilities and vehicles of industrial gases industry Figure 1.2: Main industrial gases manufacturers in the South of Vietnam Figure 2.1: Conceptual model of business-to-business professional service quality 11 Figure 2.2: Chosing a loyalty strategy 12 Figure 2.3: The conceptual framework of customer loyalty 17 Figure 2.4: The relationship between customer satisfaction and loyalty 20 Figure 2.5: The conceptual model 21 Figure 3.1: Research process 31 LIST OF TABLES Table 2.1: Loyalty Phases with Corresponding Vulnerabilities 14 Table 2.2: Comparison between B2C and B2B by Narayandas 16 Table 2.3: Loyalty typology by Dick and Basu 17 Table 3.1: Measurement of relationship quality 24 Table 3.2: Measurement of perceived service quality 24 Table 3.3: Measurement of customer satisfaction 27 Table 3.4: Measurement of customer loyalty 28 Table 4.1: Samples characteristics 32 Table 4.2a: Cronbach alpha test 34 v Table 4.2b: Cronbach alpha test (cont.) 35 Table 4.3: KMO and Bartlett's Test 36 Table 4.4: Total variance explained 37 Table 4.5: Rotated Component Matrix 38 Table 4.6: Correlations between RQ, PSQ and CL 39 Table 4.7: Correlations between RQ, PSQ and CS 40 Table 4.8: Correlations between CS and CL 41 Table 4.9: Model summary 43 Table 4.10: Anova 43 Table 4.11: Coefficients 43 Table 4.12: Model summary 44 Table 4.13: Anova 44 Table 4.14: Coefficients 44 Table 4.15: Model summary 46 Table 4.16: Anova 46 Table 4.17: Coefficients 47 Abstract The concept of customer loyalty has been researched and applied widely in marketing, especially in consumer market However, in business-to-business context, there are not many sufficient studies to investigate deeply into this concept and its implications This paper discusses about the factors contributing to customer loyalty in Vietnam industrial gases market Among several factors found to be the antecedents of customer loyalty, this study focuses on the two main crucial factors which are considered as most significant to achieve customer loyalty: relationship quality and perceived service quality This study proposes a conceptual framework, in which these two constructs positively and directly impact on customer loyalty Besides, relationship quality and perceived service also indirectly affect customer loyalty through the customer satisfaction A tailor-made questionnaire has been sent to 241 companies who are using industrial gases or gases service in the South of Vietnam with 149 sufficient responses The finding of this study consists with previous research that customer loyalty can be achieved and maintained through relationship quality, perceived service quality and customer satisfaction This study also points out to the industrial manufacturers in Vietnam a sufficient overview of a new approach to maintain the customer and business in the strong competition situation CHAPTER 1: INTRODUCTION 1.1 Research Background Industrial Gases have been an integrated part of a variety of industries For example, among many types of industrial gases, Carbon Dioxide (CO2) is used in carbonated soft drinks and beer, Oxygen (O2) and Acetylene (C2H2) are used in metallurgy and shipyard, Nitrogen (N2) is used for food freezing, packaging, etc There are hundreds of industrial gases applications As a result, the industrial gases market is very large and attracts a lot of competitions There are thousands of industrial gases companies all over the world It requires a huge investment for manufacturing plants, facilities, and vehicles Therefore, just a few multi-national industrial gases corporation take most the market shares while the others enjoy the remaining of the market acting as the distributors Some typical names can be listed, such as Messer, Air Liquid, Vijagas, Linde, SIG (100% foreign investment company), Sovigaz (state-owned company), etc In Vietnam, the industrial market started several decades ago More and more production facilities have been established along with the fast development of metallurgy and shipyard industry On the market, there are the attendances of several multi-national industrial gases corporations mentioned above, who are leading the industrial gases market There are also some local state-owned or private owned industrial gases companies with small scale production or focusing on niche market, such as the Carbon Dioxide from fermentation source Figure 1.1: Typical production plant, facilities and vehicles of industrial gases industry (Source: Messer Group) 1.2 Research Problems According to a research of Rauyruen, Miller & Barrett (2006), the concept of loyalty has been explored and developed for years in the consumer context and service market However, there are not many research about such concept in the business-tobusiness (B2B) context It is even difficult to find a clear definition of customer loyalty in B2B market It means that deep research about customer loyalty is obviously rare in a certain section of the industry Despite its importance and history, there is also no academic research in the industrial gases market For years, the industrial gases companies have collected the 62 IV S trung thành c"a Khách hàng v$i Nhà cung c p 24 Khách hàng s+ gi i thi u cho i tác khác v Nhà cung c p 25 Khách hàng có nh ng nh n xét tích c c v Nhà cung c p 26 Khách hàng s+ ti p t c mua s n ph$m t& Nhà cung c p 1 2 3 4 5 27 Khách hàng s+ ti p t c h p tác v i Nhà cung c p t ng lai Xin chân thành c m ơn Quý Công ty Anh/Ch ã hoàn thành Phi u Kh o Sát này! 63 List of companies (industrial gases end-users answering the survey) No Company Name CÔNG TY TNHH KURABE VIET NAM NHÀ MÁY S,A B-T VI.T NAM BT CHEMICAL CÔNG TY TNHH CÔNG NGHI.P TH/C PH0M LIWAYWAY SÀI GÒN SUNTORY PEPSICO VIETNAM BEVERAGE URC VIETNAM LTD COCA-COLA BEVERAGE VIETNAM CTY TNHH SAPPORO VI.T NAM INTEL PRODUCTS VIETNAM 10 YAMATO PROTEC 11 CTY TNHH SAPPORO VIET NAM 12 SAMHO COMPANY 13 FUJITSU COMPUTER PRODUCTS OF VIETNAM 14 SISC 15 CÔNG TY TNHH THƯƠNG M3I - S4N XU5T CƠ KHÍ T.M.C 16 NESTLE VIETNAM 17 COLGATE VIETNAM 18 CƠNG TY TNHH KI6M SỐT DỊNG CH4Y ÔNG L3NH 19 CHI NHÁNH CÔNG TY C7 PH8N PHÁT TRI6N HÀNG H4I 20 CÔNG TY TNHH M-T THÀNH VIÊN GIA M9N 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 CÔNG TY TNHH SUPER POWER VI.T NAM CÔNG TY TNHH XI M:NG HOLCIM VI.T NAM CÔNG TY C7 PH8N TƯ V5N CÔNG NGH VÀ THI;T B< K= THU>T CÔNG TY C7 PH8N LILAMA 69-2 CÔNG TY TNHH THI;T B< KHOA H?C VÀ CÔNG NGH NGÂN GIANG CƠNG TY C7 PH8N D8U KHÍ MEKONG CƠNG TY TNHH K= THU>T Ô THÀNH CÔNG TY C7 PH8N S@A CH,A TÀU BI6N VÀ CÔNG NGHI.P HÀNG H4I VANG TÀU CÔNG TY TNHH TM & DV PCCC 4/10 CÔNG TY TNHH HWATA VI.T NAM CÔNG TY TNHH MINH TƯBNG CÔNG TY TNHH HỒI PHÁT CTY KÍNH N7I VIGLACERA - CHI NHÁNH T7NG CÔNG TY VIGLACERA CÔNG TY TNHH YIHUI VI.T NAM CÔNG TY C7 PH8N TI;N B- QUCC T; CÔNG TY TNHH DT TÀU BI6N DUY HOÀNG KHANG CÔNG TY TNHH I.N T@ SAMSUNG VINA CÔNG TY TNHH BÙI V:N NG? CƠNG TY TNHH MÁY MĨC THI;T B< VIMA JICA-JST BIOMASS PROJECT CÔNG TY C7 PH8N CHUÔNG VÀNG CÔNG TY CP K= NGH XÂY LEP TH; KF CÔNG TY TNHH CHUAN HO (VI.T NAM) 64 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 CÔNG TY AJINOMOTO VI.TNAM CÔNG TY TNHH HO SHIN PRECISION CÔNG TY TNHH CÔNG NGHI.P SIU CÔNG TY C7 PH8N CHINA STEEL SUMIKIN VI.T NAM CÔNG TY TNHH THƯƠNG M3I V>T TƯ KHKT & DN T4I BI6N VIHN DƯƠNG CÔNG TY C7 PH8N XÂY LEP D8U KHÍ MIIN NAM CƠNG TY TNHH K= THU>T CƠ KHÍ HÀNG H4I VINA - OFFSHORE CÔNG TY TNHH ROLLS - ROYCE VI.T NAM CÔNG TY TNHH STRATEGIC MARINE (V) CÔNG TY TNHH MTV K;T C5U THÉP PEB CHI NHÁNH T7NG CƠNG TY KHÍ VI.T NAM - CƠNG TY KHÍ CÀ MAU CÔNG TY TNHH MÔI TRƯBNG CÔNG NGH CÔNG THÀNH CÔNG TY TNHH TM DV PCCC C PHƯƠNG DNTN SX-TM-DV OÀN HÙNG VƯƠNG CÔNG TY TNHH THI;T B< KHOA H?C K= THU>T M= THÀNH CÔNG TY TNHH THƯƠNG M3I XÂY D/NG DT TƯ KHOA H?C K= THU>T GIA PHÚ CÔNG TY TNHH M-T THÀNH VIÊN DT VI.T CÔNG TY TNHH QUCC T; J&F CÔNG TY TNHH OCI VI.T NAM CƠNG TY TNHH S4N XU5T CƠ KHÍ THƯƠNG M3I TÍN MINH CƠNG TY TNHH THƯƠNG M3I DT TƯ KHOA H?C K= THU>T VÀ DU LT TƯ KHOA H?C K= THU>T CTY TNHH S4N XU5T THƯƠNG M3I AN TH3NH PHÚ CÔNG TY TNHH ACRYLIC IDEA FACTORY EAST CÔNG TY TNHH PERSTIMA VI.T NAM CƠNG TY TNHH BUCKET MAN CƠNG TY TNHH ĨNG TÀU & CƠ KHÍ HÀNG H4I SÀI GỊN CƠNG TY TNHH AN NGÃI CƠNG TY C7 PH8N XÂY LEP D8U KHÍ MIIN NAM CÔNG TY TNHH K= THU>T CƠ NHI.T VINH QUANG CÔNG TY TNHH POSCO VST CÔNG TY TNHH MTV CÔNG NGHI.P THÔNG TÂN TÂY LAN CÔNG TY TNHH DDK VI.T NAM CƠNG TY TNHH CƠ KHÍ MƠI TRƯBNG HJNG HÀ TRUNG TÂM CH5T LƯMNG NÔNG LÂM THGY S4N VÙNG CÔNG TY TNHH TM & DV TÂN HI.P PHÁT CÔNG TY TNHH BEGA CÔNG TY TNHH YUJIN VINA CÔNG TY TNHH SX TM DV ÁNH JNG CÔNG TY TNHH BERNECKER VIET NAM CÔNG TY TNHH SX-TM-DV DANG 3T CÔNG TY TNHH KIAN JOO CAN (VI.T NAM) DNTN SX-TM HÒA HMP CÔNG TY TNHH SUN-JIN STEEL VI.T NAM CÔNG TY TNHH HI-TECH WIRES ASIA CÔNG TY TNHH HUHTAMAKI VI.T NAM CÔNG TY TNHH VNNH TD CÔNG TY TNHH PHIL INTER PHARMA CÔNG TY TNHH THƯƠNG M3I D