The influence of relationship quality on customer loyalty a study of veterinary companies and their agencies in vietnam

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Nguyen Dac Huy THE INFLUENCE OF RELATIONSHIP QUALITY ON CUSTOMER LOYALTY – A STUDY OF VETERINARY COMPANIES AND THEIR AGENCIES IN VIETNAM ID: 21120091 MASTER OF BUSINESS (Honours) SUPERVISOR: Dr PHAM NGOC THUY Ho Chi Minh City – Year 2014 ACKNOWLEDGEMENTS Firstly, I would like to express my sincere gratitude to Dr Pham Ngoc Thuy, my Supervisor, who has given me great guidance, inspiration and especially her motivation, thanks for her valuable advice, suggestions and resources that helping me in accomplishing this study Secondly, I would like to express my sincere thanks to all professors, tutors and officers of MBus Program for valuable lectures, academy knowledge and your experiences transfer throughout the period of courses at International School of Business I want to express my special thanks to all my colleagues, friends, customers in veterinary medicine industry for your advice, cooperation and supports during the pilot and official survey Without your support, I could not successfully complete my thesis Ho Chi Minh City, Vietnam, 30th Sep, 2014 Nguyen Dac Huy ii ABSTRACT In recent years, the industry of veterinary medicine in Vietnam has been developing significantly The veterinary medicine companies increasingly expand the market and enlarge their agencies system to take the company's image and products to market The purpose of attracting customers is to gain more market-share and bring more profits back to them This research is to identify the determinants affecting customer loyalty in veterinary medicine industry This study was aimed to explore the influence of relationship quality factors on customer loyalty in veterinary medicine industry in southern of Vietnam is done through quantitative methods Formal quantitative research through interviews using a questionnaire with a sample collected in a convenient method of 230 agencies around some provinces in Southern The research results contribute to the theoretical basis of research by understanding the meaning of the factors of relationship quality that affect consumer loyalty in veterinary medicine market Thereby, the results also provide managers with a basis for decisionmaking, investment options to develop new products and services in line with objectives and current strategic Key words: Trust, Commitment, Satisfaction, Customer Loyalty iii Table of Content Acknowledgement ii Abstract iii CHAPTER 1: INTRODUCTION 1.1 Research background 1.2 Research problem 1.3 Research objectives 1.4 Research scope 1.5 Research structure CHAPTER 2: LITERATURE REVIEW 2.1 A brief introduction about veterinary medicine industry 2.2 Research Concepts 2.2.1 Relationship quality 2.2.2 Trust 2.2.3 Commitment 2.2.4 Satisfaction 2.2.5 Customer Loyalty 2.3 Hypotheses &Research model 2.3.1 Trust and customer loyalty 2.3.2 Commitment and customer loyalty 2.3.3 Satisfaction and customer loyalty 2.3.4 Moderating Effect 2.4 Research model 10 CHAPTER 3: RESEARCH METHODOLOGY 11 3.1 General approach 12 3.2 Research methodology, Data collection and sample size 13 3.2.1 Step 1: Qualitative study 13 3.2.2 Measurement scale 14 3.2.3 Step 2: Pilot 16 3.2.4 Step 3: Quantitative study 17 3.2.5 Sample size of Quantitative research 17 3.2.6 Sampling methodology 18 iv 3.2.7 Questionnaire explanation 18 3.3 Data analysis 19 3.3.1 Exploratory Factor Analysis (EFA) 19 3.3.2 Reliability Analysis 20 3.3.3 Multi-linear regression analysis 21 3.4 Chapter summary 22 CHAPTER 4: DATA ANALYSIS, FINDINGS AND DISCUSSION 23 4.1 Descriptive data analysis 23 4.1.1 Descriptive analysis of Sample charateristics 23 4.1.2 Descriptive analysis of the variables studies 25 4.2 Measurement scale assessment 26 4.2.1 Cronbach Alpha reliability analysis 26 4.2.2 Exploratory Factor Analysis 28 4.3 Hypotheses testing 34 4.3.1 Testing Assumption of Multiple Regressions 34 4.3.2 Evaluate and test the relevance of the model 35 4.3.3 Testing Hypotheses 35 4.4 Discussion 39 4.4.1 Satisfaction and Commitment 39 4.4.2 Company Trust 40 4.4.3 Customer Trust 41 4.5 Summary 42 CHAPTER 5: CONCLUSIONS AND IMPLICATIONS 43 5.1 Research overview 43 5.2 Key Findings 44 5.3 Managerial Implicamtions 44 5.4 Limitations 46 References 47 Appendices 52 v List of Tables Table 4.1: Descriptive statistics of sample ………………………… …………….31 Table 4.2: Reliability analysis result…………………….………… ……….…….33 Table 4.3: EFA analysis result for variables after handling ………… …… ……35 Table 4.4: Describe the correlation among variables ………………… … …….39 Table 4.5: Multiple regression result ……………………………… …… ……43 Table 4.6: Hypothesis testing result …………………………… ………… ……44 Table 4.7: Summary result of the hypotheses…………………… ……… .….46 vi List of Figures Figure 1: Research model …………………………………… ……………………10 Figure 2: Research process …… ……………………………………… …… …13 Figure 3: Research model after testing EFA ……………………… ………… …34 Figure 4: Multiple regression result ………………………………… ………… 38 vii CHAPTER 1: INTRODUCTION 1.1 Research background Nowaday relationship quality is a critical success factor that influences the competitiveness of an organization Relationship quality is one of the important outcomes of marketing activity.Hennig-Thurau and Alexander (1997) argued that relationship quality represents the relationship between the firms and the customers (p 737 – 764) Nowadays because of competitive environment among companies,losing customers is very costly for companies (Athanasopoulou, 2009, p 583-610).Researchers have concluded that there is more times expensive to acquire new clients than to keep existing ones So that, companies have made efforts to developing and maintaining a long-term relationships with their customers in order to create customer loyalty Scant empirical research has been completed that has examined the group environment, or the affective states within it, such as trust, commitment, satisfaction and price as explaining the effects of relationship quality Vietnam is an agricultural country, so the livestock sector has a huge role in the economy, contributing an important part in the economic development of Vietnam During the recent years, the industry of veterinary medicine in Vietnam has been developing rapidly Recent statistics show that there are now over two hundreds veterinary medicine companies that are associated with customers systems with thousands of agencies and stores stretching from the north to the south (Yellow pages Vietnam, 2014) Several medicine companies, besides selling their products, are striving to attract and retain customers by offering the best services which are strongly based on the business relationships The companies need to understand how they can create and deliver values in business to business relationships beyond selling products On the other side, customers need to understand how to create, build and manage portfolio of supplier relationships to develop overall return on relationships 1.2 Research problem This study will research the influence of relationship quality and customer loyalty especially between veterinary medicine companies and their agencies in Vietnam It will focus deeply on three factors of relationship quality affect to the customer loyalty They are: trust, commitment, satisfaction If yes, how each factor influences on customer loyalty – positive or negative? 1.3 Research objectives The objectives of this research are to: - Identify factors of relationship quality impacting on customer loyalty between the veterinary medicine companies and their agencies in Vietnam veterinary medicine industry - Measure the impact levels of three factors of relationship quality namely trust, commitment, satisfaction on customer loyalty, - Analyze the differences of those relationships between groups of duration of cooperation and number of partners 1.4 Research scope The unit analysis in this research is organization so this research was investigated on the owners and director of the veterinary agencies In terms of geography, this research carried out from Hue to Ca Mau province The period of conducting the survey was last from 10 June, 2014 to early July, 2014 1.5 Research structure The research consists of five parts: - Chapter I: Introduction This chapter introduces the research background, management problem, research problem, research objectives, research significance, and research scope as well as research structure - Chapter II: Literature review This chapter reviews previous related theories and research, as well as to select the research’s factors and formulate the research hypotheses and model - Chapter III: Research methodology This chapter provides general method how the research is designed and implemented - Chapter IV: Data analysis and findings This chapter will translate primary data collected from survey, analyze data as well as discuss the result findings in connection with literature review - Chapter V: Conclusion, implication, limitation and future research This chapter will conclude the research finding, provide research implication and give the further suggestion as well as research limitation Although times change and the future may be somewhat uncertain, you know X will support your agency / company X is honest X is a faithful business partner Your agency is secure in dealing with new business situations because we know that X will support your agency 10 The behavior of X is very consistent 11 X follows through on their promises 12 You can expect X to tell you the truth 13 You believe X to be fair in doing business with you Your agency is committed to the preservation of good working 14 relationships with X 15 Your agency believes in X as partners Your relationship with X could be described as one of high 16 commitment 17 In your agency, you expect to have long term relationship with X This is one of the best experiences I had in products and services 18 of X This experience of products and services of X is exactly what I 19 need 20 My choice was a wise one 21 If I could it over again, I would choose products and services of X This experience of products and services from this veterinary 22 company has worked out as well as I thought it would I’m sure it was the right thing for me to use products and service 23 of this veterinary company 24 25 I will transact with X again for future needs I will recommend other people to cooperate with X I will say positive things to other people about the products and 26 services provided X 54 I will continue to cooperate with X even if the service charges are 27 increased moderately 28 I have strong preference to X 29 I will keep cooperating with X regardless of everything being changed somewhat I am likely to pay a little bit more for using the products and 30 services of X 2 3 4 5 5 PART III: OTHER INFORMATION He / She tell us the following information to serve the classification and presentation of statistical data How long have the agency operated q< year q 1- years q - 10 years q> 10 years Average sales per month of the agency: q< 100 M VNĐ q100 -500 M VNĐ q 500 M – B VNĐ q> B VNĐ How many staffs working at the agency: q 1-3 persons q 4-10 persons q>10 persons Thank you so much for your kind support! 55 Appendix 2: Vietnamese Quantitative Questionnaire PHIẾU KHẢO SÁT Kính chào Anh/Chị! Tơi tên Nguyễn Đắc Huy, học viên cao học Viện Đào Tạo Quốc tế, ĐHKT TPHCM Hiện nghiên cứu mức độ gắn bó khách hàng cửa hàng / đại lý thuốc thú y công ty thuốc thú y nước Xin Anh/Chị vui lòng trả lời câu hỏi sau Lưu ý khơng có câu trả lời hay sai , tất ý kiến phản hồi có giá trị cho nghiên cứu PHẦN I: THÔNG TIN TỔNG QUÁT Cửa hàng Anh/Chị mua sản phẩm từ công ty thuốc thú y? q đến q đến 10 q > 10 Cho biết tên Cty Anh/Chị thường mua thuốc với số lượng lớn so với Cty khác? Cty …… ……………………………………………………….…… Gọi “X” công ty thuốc thú y Anh/Chị vừa nêu để trả lời câu hỏi phần sau Lý mua thuốc đây: 56 q Nguồn thuốc q Có quan hệ tốt q Khác (xin ghi rõ): …………………………….………… Thời gian Anh/Chị có quan hệ mua hàng với Cty “X”: q < năm q - năm q 5- 10 năm q > 10 năm Ô số 5: Hồn tồn đồng ý Cịn với mức độ khác đánh vào ô số 2, Cửa hàng tơi quan tâm đến lợi ích công ty X Tôi xem xét liệu hoạt động cơng ty X có ảnh hưởng đến cửa hàng X Không đồng ý Xin cho biết mức độ đồng ý Anh/Chị với phát biểu sau công ty thuốc “X” cách đánh dấu (√) vào tương ứng, với: Ơ số 1: Hồn tồn khơng đồng ý Hồn tồn khơng đồng ý PHẦN II: THÔNG TIN VỀ NHÀ CUNG CẤP 1 Tôi tin tưởng vào dịch vụ công ty X Cơng ty X biết đến giao dịch mua1 bán công Công ty X đáng tin cậy, đặc biệt các1vấn đề quan trọng Công ty X hỗ trợ cửa hàng tơi dù có vấn đề xảy tương Công ty X trung thực 1 Công ty X đối tác kinh doanh trung thành Cửa hàng tơi đảm bảo đối phó tình hình kinh doanh có X hỗ trợ cho 10 Hành vi công ty X qn 11 Cơng ty X ln thực cam kết 12 Tơi mong đợi cơng ty X nói thật với tơi 13 Tơi tin tưởng công ty X công giao dịch với 14 Cửa hàng cam kết trì quan hệ tốt đẹp với cơng ty X 57 1 1 Cửa hàng xem công ty X đối tác 16 Mối quan hệ cửa hàng tơi với cơng ty X có tính cam kết cao 5 17 Cửa hàng tơi mong muốn có mối quan hệ lâu dài với công ty X 15 18 Công ty X đáp ứng yêu cầu từ tơi cửa hàng cách nhanh chóng Quan hệ cửa hàng công ty X mong muốn 20 Tôi thực thích cơng ty X 19 Nếu tơi chọn lại, chọn hợp tác với công ty X Chất lượng sản phẩm dịch vụ công ty X mong 22 đợi 21 5 5 23 Tôi chắn việc lựa chọn cộng tác với công ty X điều đắn 24 Tôi tiếp tục giao dịch với công ty X tương lai 5 25 Tôi giới thiệu người khác hợp tác với công ty X 26 Tơi ln nói tốt cơng ty X với người khác 5 27 Tôi tiếp tục hợp tác với cơng ty X chi phí có tăng nhẹ 28 Tơi ln ưa thích mua hàng công ty X 5 29 5 Tơi trì hợp tác với cơng ty X có số thay đổi 30 Tôi sẵn sàng trả nhiều để sử dụng sản phẩm công ty X PHẦN III: THÔNG TIN KHÁC Xin Anh/Chị cho biết thêm số thơng tin sau để phân loại trình b y Thời gian hoạt động cửa hàng: q < năm năm q 1- năm q > 10 năm k ế t q u ả t h ố n g k ê c ủ a đ Doanh số bán trung bình/tháng cửa hàng: 58 q - 10 q < 100 triệu q100 – 500 triệu q 500 triệu – tỷ q > tỷ Số l ợ n g n h â n v i ê n c a q  q  Xin chân thành cám ơn hợp tác Anh/Chị! 59 Appendix 3: The result of EFA Analysis KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy Bartlett's Test of Sphericity SATIS21 SATIS23 SATIS20 COMMI17 LOYAL27 LOYAL30 LOYAL26 LOYAL25 TRUST02 TRUST01 TRUST09 TRUST06 61 Component 10 11 12 62 Appendix 4: The result of multiple regression Model R R Square Adjusted R Square Std Error of the Estimate a 377 Model (Constant) Satcom Comtrust Custrust 63 ... research the influence of relationship quality and customer loyalty especially between veterinary medicine companies and their agencies in Vietnam It will focus deeply on three factors of relationship. .. of this research are to: - Identify factors of relationship quality impacting on customer loyalty between the veterinary medicine companies and their agencies in Vietnam veterinary medicine industry... development of veterinary medicine companies is the appearance and development of agencies system The veterinary agencies are the customers of veterinary medicine companies The agency will distribute and