Determinants of customer satisfaction in the apartment industry the cace for the apartment industry in vietnam

MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HOCHIMINH CITY NGUYEN THI MONG VAN DETERMINANTS OF CUSTOMER SATISFACTION IN THE APARTMENT INDUSTRY THE CASE FOR THE APARTMENT INDUSTRY IN VIETNAM MASTER’S THESIS In Business Administration Ology code: 60.34.01.02 Supervisor Dr Tran Ha Minh Quan Ho Chi Minh City, 2012 - - Acknowledgement This research project would not have been possible without the support of many people Firstly, I wish to express my deep sincere gratitude to my supervisor, Dr Tran Ha Minh Quan for his invaluable advice and help Without him, this thesis could not have been completed I would like to express my deepest gratitude and honor to my parents not only for the love they devote to me but also for the time which I should have devoted to them during their senior years I am also grateful to my classmates and my colleagues, especially Le Thi Bich Dao and Ngo van Quan for all of their friendship and encouragement I also wish to thank my friends in Becamex subsidiaries for their great support, and to the respondents, without whom, my thesis could not have been accomplished Finally, I am most grateful to my dear husband He is my whole life He is my greatest inspiration and the source of encouragement to overcome all difficulties through out the duration of this study Abstract In market economy, quality of products or services is the most important tool to succeed The nature of the quality of goods is intended to satisfy the needs of the highest enjoyment of goods or services Construction work in general and of apartment buildings in particular are a type of goods The criteria for the quality of it also must be directed towards those values However, the criteria for the quality of goods or construction in general and apartment buildings in particular is extremely diverse The business activities in the field of real estate are trying to improve the quality of products and services to satisfy the maximum demands of customers, especially in the apartment business This study examined the determinants of satisfaction and the effects of customer satisfaction on word of mouth of consumers in the apartment industry in Vietnam, as well as the influence of background data on the relationship between satisfaction and word of mouth activity This research measures the factors influencing apartment satisfaction in quantitative research methods The scale was evaluated by the factor analysis method to explore EFA and reliability testing (Cronbach's alpha) then multiple regression analysis is used to test the research model This study will help to improve the strategies of real estate companies in choosing the best measures to improve the quality of their company's product, while increasing competitiveness and solidify the company's position in the marketplace As time was short, this study focused its review on the relationship between six factors influencing their apartment construction and intention to engage in word of mouth activity Keyword: Customer satisfaction, word of mouth, Service quality, apartment industry Co Acknowledgement Abstract Contents List of Tables List of Figures Chapter 1: INTRODUCTION 1.1 Overview 1.2 Research background 1.3 Problem statement 1.4 Purpose of the study 1.5 Objectives of the study 1.6 Research question 1.7 Significance of the study 1.8 Structure of thesis Chapter 2: LITERATURE REVIEW 2.1 Overview 2.2 Overall customer satisfaction 2.2.1 Concept of customer satisfaction 2.2.2 Determinants of customer satisfaction 2.3 Hypotheses and model 2.3.1Cus 2.3.2Phy 2.3.3Env 2.3.4Proj 2.3.5Reg 2.3.6Serv 2.3.7Rela 2.4 Conclusion Chapter 3: RESEARCH METHODOLOGY 3.1 Overview 3.2 Research purpose 3.3 Research design 3.4 Item generation 3.4.1Ove 3.4.2Scal 3.4.3Scal 3.4.4Scal 3.5 Pilot test 3.6 Main study 3.6.1Sam 3.6.2Sam 3.6.3Data 3.7 Conclusion Chapter 4: DATA ANLYSIS AND FINDINGS 4.1 Overview 4.2 Respondents demographics 4.3 Scale assessment 4.3.1Reli 4.3.2Exp 4.3 satisfaction 4.3 and word of mouth 4.4 Testing research model and hypotheses 4.4.1Test 4.4.2Test 4.4 satisfaction in the apartment industry and customer satisfaction 4.4 word of mouth in the apartment industry 4.5 Conclusion Chapter 5: CONCLUSIONS AND IMPLICATIONS 51 5.1 Overview 51 5.2 Conclusions of the study 51 5.3 Implications of the study 51 5.3.1 Theoretical implications 51 5.3.2 Practical implications 52 5.4 Limitations and recommendations for future research 52 List of References 54 Appendix 1- Questionnaire (Vietnamese version) 60 Appendix 2- Observed variables 63 Appendix - Descriptive statistics of variables 65 Appendix - Reliability analysis- Cronbach’s Alpha 66 Appendix - Factor analysis 69 Appendix - Regression result 71 List of Tables Table 2.1 Service quality dimension definitions (modified from Zenithal et al., 1990) Table 3.1 Scale to measure service quality Table 3.2 Scale to measure customer cost Table 3.3 Scale to measure physical quality Table 3.4 Scale to measure environmental quality Table 3.5 Scale to measure project facilities Table 3.6 Scale to measure region facilities Table 3.7 Scale to measure customer satisfaction Table 3.8 Scale to measure word of mouth Table 4.1 Demographic profile of respondents Table 4.2 Reliability of measurement items Table 4.3 EFA result for construct measurement scales (2nd times) Table 4.4 Total variance explained Table 4.5 EFA result for construct measurement scales Table 4.6 Correlation matrix Table 4.7a Model summary Table 4.7b ANOVAb Table 4.7c Coefficients Table 4.8 Summary of hypotheses testing results Table 4.9a Model II summary Table 4.9b Coefficients List of Figures Figure 1.1 Structure of Thesis 12 Figure 2.1 Research model of customer satisfaction 24 Figure 3.1 Research process 27 Figure 3.2 Response rate 36 Figure 4.1 Means of joining of respondents 39 Figure 4.2 Relationship between determinants of customer satisfaction in apartment industry and customer satisfaction 47 Figure 4.3 Relationship between overall customer satisfaction and word of mouth in apartment industry 49 Chapter 1: INTRODUCTION 1.1 Overview This chapter presents an overview of the research, the Background to the study, Problem statement, purpose of the study, objectives of the study, research questions, significance of the study, and structure of thesis 1.2 Background to the study Customer satisfaction is one of the key issues for companies in their efforts to improve quality in the market place Most businesses have their own targets for being profitable They have carefully planned and implemented strategies, but they all have something in common – a customer Business purposes are based on customers and if the company wants to be successful, it has to concentrate on them This means determining customers’ needs, responding to their requirements and maintaining customer satisfaction by assuring quality in company’s operations Besides, customer satisfaction is so important, because satisfied customers spread positive word of mouth which attracts more new customers, and then companies will sell more and gain high profits (Garson 1993, 5.) The apartment industry in Vietnam recently formed and flourished in recent years The development of the apartment industry has contributed greatly to the urbanization of Vietnam Currently, however, the apartment market in Vietnam has fallen in the general downturn of the economy Project investors such as Hoang Anh Gia Lai are decreasing their prices in a number of new apartment projects as much as 40% Other projects such as the Discovery Complex apartment project in Hanoi, Dai Thanh project, etc are experiencing a similar depreciation Competition between investors is fierce among apartment products as well as other commodities in the market Therefore, when consumers decide to buy or invest property goods, customers will consider many factors that affect their decision to buy and satisfy their life needs Apartment investors must understand these factors to build an effective business strategy VNR survey data of property report (2009-2010) indicates that, the most important factor for customer satisfaction is the location of the project (gaining an advantage position of 71.2%) Next is the project design factor In addition to these factors, the decision to buy is based on the flow of information relating to apartment options before buying This is where word of mouth has a large influence In order to increase sales, investors need to understand the factors affecting customer satisfaction and enhance positive communication activities to develop more new customers 1.3 Problem Statement The Vietnamese economy is developing in accordance with Party economic policy The population’s incomes was increased dramatically, demand for housing along with a growing Current, source of housing supply from many Vietnam and foreign real estate companies are quite diverse When Vietnam integrated into the world economy, conceptions about the apartment industry gradually changed along with the developing of the economy Today, owning an apartment is proud choice, especially for young people because interior decorations of apartments that are modern, luxurious and similar to or star hotels Each apartment is designed close to public services, such as supermarkets, Asian and European restaurants, swimming pool, multi gym, postal services, banking, kindergarten, office of the company, etc as a miniature city, so that people can use the utility on the spot without having to go far, etc In order to meet this demand, many construction companies have invested in this sector Compared to just two years ago, this year the apartment industry has diversified profusely Due to the increased competition experienced between firms, customer satisfaction has become more important Good product and quality differentiates between products, ensures consumer loyalty and may lead to increased market share In Vietnam, empirical studies on the state of customer satisfaction in the apartment industry are very scant The increase competition in the apartment industry in Vietnam and the growth trend in real estate supply for the past decade, does not 58 Pushpa a/p Packia, Rosadah bt Mahamud (2008) Satisfactory Level on Civil Servant Housing Universiti Teknologi Malaysia Procter J, Richard M (2002) “Word-of-Mouth Marketing: Beyond Pester Power, Advertising and Marketing to Children, World Advertising Research Center Parkes, A., Kearns, A., & Atkinson, R (2002) What makes people dissatisfied with their neighbourhoods? 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cứu thuộc trường Đại học kinh tế TPHCM Chúng thực nghiên cứu nhằm mục đích đánh giá nhân tố định thỏa mãn khách hàng dự án hộ Viện Nam Do vậy, khơng có trả lời hay sai mà thơng tin cung cấp anh (chị) có giá trị nghiên cứu Rất mong anh(chị) trả lời đầy đủ câu hỏi mức độ xác cao Phỏng vấn lúc …… giờ, ngày ………… Phỏng vấn bởi:……………… (01) Tên người trả lời:………………(02) Điện thoại người trả lời:……………….(03) Xin cho biết mức độ đồng ý anh(chị) phát biểu theo quy ước: Hoàn toàn phản đối Phản đối Trung hịa Đồng ý Hồn tồn đồng ý ST T CUSTOMER COST Mã COST3 PHYSICAL QUALITY PHYQ1 PHYQ2 COST1 COST2 ENVIROMENT QUALITY PHYQ3 PHYQ4 PHYQ5 10 11 PROJECT FACILITIES 12 13 ENVQ2 ENVQ3 ENVQ1 PROF1 PROF2 61 14 15 16 PROF3 PROF4 PROF5 17 REGION FACILITIES 18 PROF6 19 REFA2 20 REFA3 SERVICE QUALITY 21 SERQ1 22 SERQ2 23 24 SERQ3 SERQ4 REFA1 25 SERQ5 OVERRALL CUSTOMER SATISFACTION 26 SAT1 27 SAT2 28 SAT3 29 SAT4 WORD OF MOUTH 30 31 32 WOM1 WOM2 WOM3 33 Xin vui lòng cho biết anh (chị) thuộc nhóm tuổi đây: 76 62 34 Xin vui lòng cho biết mức thu nhập hàng tháng anh(chị): < triệu - < 10 triệ 10 - < 15 tr 15 - < 20 tr ≥ 20 tr 35 Giới tính: Nam Nữ 36 Các nguồn thơng tin ảnh hưởng tới định đầu tư hộ: Nhà môi giới Internet Báo chí Truyền miệng Khác Xin cám ơn anh(chị) dành thời gian hoàn tất bảng câu hỏi này! 63 Appendix – Observed variables Customer cost Apartment price is very reasonable Service fees in apartment (security, electric, water, garbage, parking, etc) are very reasonable Company gives support to customer interest rate for buying apartment Physical quality Kitchen of apartment is designed reasonably Apartment’s design ensure lighting ( electronic lighting and window to outside) Apartment’s water (plumbing facilities, water quality and water pressure) are good Apartment’s drainage system are good Apartment’s internal architecture is designed luxurious Environmental quality Apartment’s traffic is convenient and ensure firefighting or rescue standard 10 Apartment area are ensure no noise 11 Region security is good Project facilities 12 Apartment project’s lobby is designed wide and reasonable 13 In Apartment, parking is adequate to resident demand and security 14 Apartment project’s external staircase is designed reasonable 15 Apartment project’s lift is good 16 Front attractiveness and quality are designed beautiful 17 Project have conference room Region facilities 18 There are many recreational activities (play area, gym, etc.) around the apartments to meet customers’ needs 19 There are many public services (supermarket, cafeteria, primary schools, etc.) is really feeling for customers 20 Apartment located close to shopping areas, business (at least shops, public transportation within a km radius of the center) 64 Service quality 21 Company ensure consistency of performance and dependability of the service 22 Employees have necessary knowledge to answer my questions before, during and after the buying apartment 23 Company provides its services at the time it promises to so 24 When I have problem, Company is sympathetic in solving them 25 I feel safe in my transaction with company Overall customer satisfaction 26 I am satisfied with my decision to use this apartment 27 My choice to use this apartment was a wise one 28 If I could it over again, I’d choose a different company 29 Using this apartment has been a good experience Word of mouth 30 Intentions to say positive things to others 31 Recommend the apartments of project to another consumer 32 Encourage friends and relatives to buy the apartment from this project 65 Appendix - Descriptive Statistics of variables COST1 COST2 COST3 PHYQ1 PHYQ2 PHYQ3 PHYQ4 PHYQ5 ENVQ1 ENVQ2 ENVQ3 PROF1 PROF2 PROF3 PROF4 PROF5 PROF6 REFA1 REFA2 REFA3 SERQ1 SERQ2 SERQ3 SERQ4 SERQ5 SAT1 SAT2 SAT3 SAT4 WOM1 WOM2 WOM3 Valid N (listwise) 66 Appendix – Reliability Analysis- Cronbach Alpha 4.1 Customer cost cost1 cost2 cost3 4.2 Physical quality phyq1 phyq2 phyq3 phyq4 phyq5 4.3 Environment quality envq1 envq2 envq3 67 4.4 Project facilities prof1 prof2 prof3 prof4 prof5 prof6 4.5 Region Facilities refa1 refa2 refa3 4.6 Service quality Reliability Statistics Cronbach's Alpha N of Items 851 68 serq1 serq2 serq3 serq4 serq5 4.7 Customer Satisfaction sat1 sat2 sat3 sat4 4.8 Word of mouth wom1 wom2 wom3 69 Appendix 5- Factor Analysis a Determinants of customer satisfaction Kaiser-Meyer-Olkin Measure of Sampling Adequacy Bartlett's Test of Sphericity phyq4 phyq1 phyq3 phyq2 phyq5 serq1 serq3 serq5 serq4 serq2 prof2 prof3 prof5 prof6 prof4 cost1 cost3 cost2 refa2 refa1 refa3 envq1 envq2 envq3 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization 70 5.2 Customer satisfaction and Word of mouth Factor Analysis KMO and Bartlett's Test Componen t Extraction Method: Principal Component Analysis 71 Appendix 6-Regression result 6.1 Linearity and homoscedasticity 6.2 NORMALITY 72 ... to increased market share In Vietnam, empirical studies on the state of customer satisfaction in the apartment industry are very scant The increase competition in the apartment industry in Vietnam. .. engage in word of mouth activity in apartment industry in Vietnam 1.5 Objectives of the study The following are the specific objectives of this study: - To examine the determinants of customer satisfaction. .. Firstly, the study is descriptive in that it seeks to describe in detail the determinants of customer satisfaction in the apartment industry, thus giving an in- dept understanding of the reality of customer