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 Ho Chi Minh City – Year 2014 D NG 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 2.1.3 2.1.4 2.2 Relationship between the constructs 2.2.1 and customer loyalty 2.2.2 and customer loyalty 2.2.3 customer loyalty 2.3 Conceptual Model 2.4 Hypothesis CHAPTER : RESEARCH METHODOLOGY 3.1 Research Design 3.2 Measurement 3.2.1 3.2.2 3.2.3 3.2.4 3.3 Qualitative research 3.4 Quantitative research 3.4.1 3.4.2 CHAPTER : DATA ANALYSIS AND RESULTS 4.1 Data Statistical Analysis 4.2 Reliability Test (Cronbach Alpha) 4.3 Exploratory Factor Analysis 4.4 Multiple Linear Regression 4.4.1 4.4.2 4.5 Simple Linear Regression 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 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 C PH N CHINA STEEL SUMIKIN VI T NAM CÔNG TY TNHH THƯƠNG M I V T TƯ KHKT & D CH V ANH TRANG CHI NHÁNH CÔNG TY C CÔNG TY TNHH VARD V NG TÀU CÔNG TY TNHH CS WIND VI T NAM CƠNG TY TNHH V CƠNGTYC PH NXÂYL PD UKHÍMI NNAM CÔNG TY TNHH K CÔNG TY TNHH ROLLS - ROYCE VI T NAM CÔNG TY TNHH STRATEGIC MARINE (V) CÔNG TY TNHH MTV K T C U THÉP PEB CHI NHÁNH T NG CƠNG TY KHÍ VI T NAM - CƠNG TY KHÍ CÀ MAU CƠNG TY TNHH MƠI TRƯ NG CÔNG NGH CÔNG THÀNH CÔNG TY TNHH TM DV PCCC DNTN SX-TM-DV CÔNG TY TNHH THI T B KHOA H C K CÔNG TY TNHH THƯƠNG M I XÂY D NG D CH V CÔNG TY TNHH MHE-DEMAG VI T NAM CÔNG TY TNHH CAO SU VI T CÔNG TY TNHH HON CHUAN VIETNAM CÔNG TY TNHH MEDOCHEMIE ( VI N CÔNG TY TNHH V T TƯ KHOA H C K CÔNG TY TNHH M T THÀNH VIÊN D CH V B O V CÔNG TY LIÊN DOANH BIO-PHARMACHEMIE PHÂNVI ND TMAYT CƠNG TY C PH N BÌNH GIA LONG CÔNG TY TNHH MÊ KÔNG CÔNG TY CP THƯƠNG M I VÀ D CH V CÔNG TY TNHH CƠ KHÍ TÂN THÀNH CƠNG TY TNHH CƠNG TY TNHH TSUNG CHU ( VI T NAM) CÔNG TY TNHH S N XU T MAI NGUYÊN CÔNG TY TNHH BUREAU VERITAS CONSUMER PRODUCTS SERVICES VI T NAM CNCTYCPNÔNGS NTH CPH MQU NGNGÃI-NHÀMÁYC NVÀTINHB TS NKTÔ CÔNG TY TNHH THI T B CTY TNHH TAM SƠN PHÁT TRUNG TÂM KI M NGHI M BÌNH DƯƠNG TRUNG TÂM NGHIÊN C DOANH NGHI P TƯ NHÂN T N TỒN CƠNG TY TNHH TM-DV-CK AN HUY CÔNG TY TNHH V N T N PHÁT CÔNG TY TNHH CÔNG NGH TRUNG TÂM CHUY N GIAO CÔNG NGH CÔNG TY C PH N CÔNG NGHI P BAO BÌ NGAIMEE T NG CƠNG TY HĨA D CƠNG TY TNHH HERCULES VI T NAM CÔNG TY TNHH PHONAK OPERATION CENTER VI T NAM CÔNG TY TNHH PRESTAR INDUSTRIES VI T NAM 65 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 CÔNG TY TNHH GUYOMARCH - VN CÔNG TY C DNTN NH T VI T CÔNG TY TNHH QU C T J&F CÔNG TY TNHH OCI VI T NAM CÔNG TY TNHH S N XU T CƠ KHÍ THƯƠNG M I TÍN MINH CƠNG TY TNHH THƯƠNG M I D CH V DANH KHÔI CÔNG TY TNHH REPUBLIC BISCUIT CORPORATION VI T NAM CÔNG TY C CÔNG TY TNHH YOW GAOL ELECTRICAL ENTERPRISES VI T NAM CHI NHÁNH CÔNG TY TNHH OLAM VI T NAM T I KCN BIÊN HỊA II CƠNG TY C CƠNG TY C CÔNG TY TNHH DYNAPLAST PACKAGING ( VIETNAM) CÔNG TY TNHH HARRIS FREEMAN VI T NAM CƠNG TY CP CƠ KHÍ VÀ XÂY L CÔNG TY C CÔNG TY CP SX G NHÂN T O TI N PHÁT CÔNG TY TNHH THƯƠNG M I V T TƯ KHOA H C K CTY TNHH S N XU T THƯƠNG M I AN TH NH PHÚ CÔNG TY TNHH ACRYLIC IDEA FACTORY EAST CÔNG TY TNHH PERSTIMA VI T NAM CÔNG TY TNHH BUCKET MAN CƠNG TY TNHH ĨNG TÀU & CƠ KHÍ HÀNG H I SÀI GỊN CƠNG TY TNHH AN NGÃI CÔNG TY C 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 CÔNG TY TNHH CƠ KHÍ MƠI TRƯ NG H NG HÀ TRUNG TÂM CH T LƯ NG NÔNG LÂM TH Y S N 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 CÔNG TY TNHH BERNECKER VIET NAM CÔNG TY TNHH SX-TM-DV D NGT CÔNG TY TNHH KIAN JOO CAN (VI T NAM) DNTN SX-TM HỊA H CƠNG 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 V NH T CÔNG TY TNHH PHIL INTER PHARMA CÔNG TY TNHH THƯƠNG M I D CH V XÂY D NG TRUNG TÂM D CH V CÔNG TY TNHH CH CÔNG TY TNHH DV-TM B Y BÌNH CƠNG TY TNHH HOMER GROUP CƠNG TY TNHH WISE VISION VI T NAM 66 146 147 148 149 CÔNG TY TNHH CAO DƯƠNG CÔNG TY TNHH NIHON CANPACK ( VI T NAM) CÔNG TY TRÁCH NHI M H CÔNG TY TNHH TM DV K 67 APPENDIX DATA ANALYSIS RESULT – EFA KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy Bartlett's Test of Sphericity Component 10 11 68 12 13 14 15 16 17 18 19 20 21 22 23 Extraction Method: Principal Component Analysis Rotated Component Matrix CL4 CL3 CL2 CS3 CS1 PSQ12 PSQ10 69 PSQ11 CL1 PSQ7 PSQ5 PSQ6 RQ1 RQ2 RQ3 PSQ9 PSQ8 CS5 CS2 PSQ4 PSQ2 PSQ1 PSQ3 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization a Rotation converged in iterations 70 APPENDIX DATA ANALYSIS RESULT - MLR Descriptive Statistics CS RQ PSQ Pearson Correlation Sig (1-tailed) N 71 72 73 74 APPENDIX DATA ANALYSIS RESULT - SLR Descriptive Statistics CL CS Pearson Correlation Sig (1-tailed) N Model (Constant) CS a Dependent Variable: CL 75 76 ... 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... 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)... solution to the current problems In fact, it is widely proved that loyal customers help maintain the business and profitability Therefore, investigating the factors contributing to customer loyalty