Factors of service quality affecting customer satisfaction of Highlands Coffee shop in Hanoi

Nghiên cứu các nhân tố của chất lượng dịch vụ ảnh hưởng đến sự hài lòng của khách hàng của quán Highlands Coffee tại Hà Nội sẽ giúp cho mọi người có cái nhìn khachs quan hơn lĩnh vực FB, về các nhân tố khiên khách hàng quan tâm, ảnh hưởng đến sự hài lòng khách hàng để cải thiện

Factors of service quality affecting customer satisfaction of Highlands Coffee shop in Hanoi The case study of FPT University GROUP Lecturer: Mrs Nguyen Hoang Phuong Linh July, 2021 Table of Contents CHAPTER 1: INTRODUCTION 1.1 Topic background Recently, coffee culture and accompanying products and services are increasingly popular in the lifestyle of Vietnamese people In this day and age, people come to a coffee shop not only to drink coffee but also to want a comfortable space, relax, or experience other services to regain balance in life Today, have many chain coffee stores opening across the country famous as Starbucks, The Coffee House, Highlands Coffee, etc Unlike other coffee business companies, Highlands coffee chooses its own direction, because the customers the company targets are people with high and moderate-income, and at the same time, the business goal of the company Highlands coffee's business goal is to lead the way to lead the high-end retail industry in Vietnam Highlands Coffee starting with packaged coffee products in Hanoi in 2000 Highlands Coffee has rapidly developed and expanded into a famous coffee shop brand and has continuously expanded its operations at home and abroad since 2002 Highlands Coffee has chosen for itself the form of chain business to apply The reality shows that this business form is very suitable to the reality and needs of customers Highlands Coffee succeeds in building a large Highlands Coffee brand while providing customers with the best products with attentive service and reasonable prices in a modern airy space Highlands Coffee is currently the most successful brand of the chain business model - a franchise-oriented business model After a long journey, Highlands Coffee has constantly improved and developed to bring delicious, comparable coffee products in a comfortable and polite space Highlands Coffee's coffee cups are not only a familiar drink but also represent a part of the modern culture of Vietnamese people Highland has not stopped growing to expand its stores across the whole country of Vietnam In 2011, Highlands Coffee had only 50 stores, by 2015 there were 75 stores By the end of March 2017, there were a total of 180 stores, spread across 14 provinces and cities in Vietnam As of September 2019, the Highlands Coffee franchise system has 296 stores in 25 provinces and cities nationwide Up to now, Highlands Coffee has had more than 300 stores and has become a familiar brand for every person In Hanoi, Highlands is a place where people often enjoy the space, affirm their own style, or simply meet and chat with friends and colleagues and enjoy together what Highlands Coffee brings again Now, Highlands Coffee has about 96 stores across the districts of Hanoi In fact, the needs of customers change constantly, and therefore, in order to best meet those needs, Highlands Coffee needs to regularly conduct marketing research activities aimed at exploring market needs as well such as surveying the level of customer satisfaction about the service quality of the chain so that there can be changes Therefore, the study of satisfaction is very necessary 1.2 Practical problems Currently, Highland Coffee's market share is decreasing significantly, mainly due to the decrease in customer satisfaction about the quality of beverage service here, especially after the incident: ''There was a mouse in the cake of Highland Coffee '' in 2008 and "Reprinting the expiry date of canned coffee" in 20112 In addition, in February 2020, customers also boycotted Highland Coffee because its employees discriminated against people with disabilities and lottery ticket sellers To strengthen its position and increase market share, it is necessary to redefine the level of customer satisfaction with beverage service at Highland Coffee 1.3 Research objectives The main purpose of this study is to determine the factors affecting customer satisfaction about the quality of beverage service at Highlands Coffee Hanoi After that, the study will give “Nghi vấn bánh Highland coffee có chuột chết - VnExpress” “Cà phê Highlands 'bắn lại hạn sử dụng” 31 nghìn sản phẩm” VietnamBiz, “Highlands Coffee bị tố đuổi khách tưởng người bán vé số” solutions and recommendations to improve the service quality of Highlands Coffee This study was achieved by carrying out the following objectives:    Identify customer satisfaction and factors affect Clearly determine the degree of influence of those factors on customer satisfaction Propose some suggestions to improve service quality in order to respond well 1.4 Research questions The questions used to find out the research objectives are as follows:  What factors affect customer satisfaction with Highland Coffee?  What are some useful recommendations for Highlands Coffee to improve its service quality at Highlands Coffee? 1.5 Research Scope The purpose of the survey is to find out the level of customer satisfaction with Highlands Coffee's service quality The scope of the study was carried out for customers using services of Highlands Coffee in Hanoi city Target sample characteristics: o o o o o o Survey type: Online survey Age: 18 – 40 Gender: Male/Female and others Expected number of respondents: over Research scope: Hanoi Occupation: Student, Office worker, Entrepreneur 1.6 Methodology and data overview In this research, Primary research includes quantitative methods used to collect through surveying then analyzed by SPSS The number of responses received is expected to be 385 and due to the Covid-19 situation, we will be sending the survey forms online We will share the survey forms on food groups on facebook forums with a large audience of students, office workers in Hanoi Secondary research was conducted through research articles, newspapers, websites, and internal data 1.7 Outline of thesis Chap 1: Introduction Chap provides all basic information about the topic background with all the required information for the research, including research objective, research question, scope, and methodology Chap 2: Literature review and theoretical models Chap presents relevant theories that underlie the development of research questions Chapter 3: Methodology Chapter explains the method for doing the research: quantitative analysis, data collection method and data analyzing method Then it was explained why research had to it Chapter analyzes data and findings From the theories of chapter Thereby, finding the factors that improve the quality of beverage service of Highlands Hanoi Chapter 5: Recommendations and Conclusion Based on the analysis of chapter 4, we will make recommendations on factors to improve the quality of beverage service of Highlands Ha Noi CHAPTER 2: LITERATURE REVIEW AND THEORETICAL MODELS I CONCEPT: Concepts of services According to Zeithaml & Britner (2000), service is the behavior, process, and way of doing a certain job in order to create use value for the customer to satisfy the needs and expectations of the customer Besides, according to Kotler & Armstrong (2004), services are activities or benefits that businesses can offer to customers in order to establish, strengthen and expand long-term relationships and cooperation with customers Based on Gronroos, he show that “service quality is the result of an evaluation process where the customer is based on a comparison of the actual service received by the customer with his or her expectations.” Agreeing with Gronroos, Parasuraman et al (1985) stated that “service quality is a form of attitude, resulting from a comparison between the actual service that customers perceive when consuming service to their expectations Service quality is related but not synonymous with customer satisfaction.” Cronin and Taylor (1992) proposed that service quality is one of the antecedents of consumer satisfaction, but service quality had less of an effect on purchase intentions than did consumer satisfaction Peter Fdrucker (1954), the father of management, defined "Customers of an enterprise are a collection of individuals, groups of people, businesses, etc., who have a need to use the product, services of the business and the desire to satisfy that need” In business, customers play a vital role in the survival of the business Customer satisfaction According to Bachelet (1995), "customer satisfaction is an emotional response by customers to their experience with a product or service" Oliva, Oliver and Bearden (1995) said that the difference, or the relationship of the value of products and services that customers receive compared to previous products and services will show customer satisfaction Similarly, Oliver (1997) states that customer satisfaction is the response of consumers to the fulfillment of their desires Sharing this view, Zeithaml and Bitner (2000) argue that, "customer satisfaction is the customer's evaluation through a product or service that meets their wants and requirements" This concept has materialized in terms of “customer satisfaction” which is an assessment measured against a product or service According to Kotler (2001), "customer satisfaction is the level of a person's sensory state resulting from a comparison of the results obtained from the consumption of a product/service and the customer's expectations." Expectations here are considered human wants or expectations, derived from personal needs, previous experiences and external information such as advertising, word of mouth information from family, friends and from seller and competitor information Similar to the above studies, Cronin and Taylor 1992 also relied on these studies to measure the "customer satisfaction" factor In the study "Measuring Service Quality: A Reexamination and Extension" Cronin and Taylor used questions to measure the variable "customer satisfaction" and used the Likert scale with levels from very dissatisfied to very satisfied Therefore, we will base on the above studies to develop our research direction II Relevant theoretical frameworks: Liu et al (2008) This is an empirical study of online shopping customer satisfaction in China The authors test the hypotheses through multiple regression analysis based on a survey of 1,001 online customers The analysis suggests that eight constructs – information quality, web site design, merchandise attributes, transaction capability, security/privacy, payment, delivery, and customer service – are strongly predictive of online shopping customer satisfaction, while the effect of response time is not significant SERVQUAL Model of Parasuraman (1988): The SERVQUAL model is built based on the view that perceived service quality is a comparison between the expected/expected values (expectations) and the perceived customer values (perception) studied through the scale The measurement includes five criterias:      Reliability Responsiveness Tangibles Assurance Empathy Patient satisfaction assessment study at Sunyani Regional Hospital, Ghana is a study using SERVQUAL model by Parasuraman et al., (1988) A total of 214 patients were used in the study The factors of service quality that affect patient satisfaction were Reliability, Communication/Personal Relationship, Assurance and Responsiveness In contrast, the Tangible and Empathic aspects scored positively, confirming the patient's impression of the service SERVPERF Model of Cronin and Taylor (1992): On the basis of Parasuraman's SERVQUAL model, Cronin and Taylor (1992) have overcome and produced the SERVPERF model, a variant of SERVQUAL According to SERVPERF model: Service quality = Perceived level The factors of service quality that affect customer satisfaction are: Reliability, Responsiveness, Assurance, Empathy, Tangibles Research data were gathered from personal interviews conducted in a medium-sized city in the southeastern United States A total of 660 usable questionnaires (all questions answered) were gathered randomly from consumers at their residences by trained interviewers during a two-week period in the summer of 1988 The sampling frame was the entire population of the city Interviewers were instructed to solicit responses randomly and were assigned city areas to prevent overlap Responses were gathered on the service quality offered by two firms in each of four industries: banking, pest control, dry cleaning, and fast food The firms and industries were chosen on the basis of the results of a convenience survey suggesting that these were the four service industries most familiar to the area's consumers  Based on the above studies on customer satisfaction, we find that customer satisfaction Highlands Coffee Hanoi will be affected by the following factors of service quality:  Reliability  Empathy  Tangibles  Service efficiency  Assurance III Hypothesis and research model Hypothesis: Hypotheses on the influence of perceived service quality factors are posed according to Parasuraman's research model, including components as follows:  H1: Reliability has a significant direct influence on customer satisfaction, when the reliability of food safety is assessed by customers, the customer satisfaction level will increase and vice versa  H2: Customer empathy as a common interest has a significant direct influence on customer satisfaction, when customer empathy about Highlands increases, customer satisfaction will increase and vice versa again  H3: Tangibles have a significant direct influence on satisfaction of customers such as beverage products, facilities, and equipment of the restaurant When the tangible assets of Highlands are appreciated by customers, the level of customer satisfaction will increase and vice versa  H4: Service efficiency has a significant direct influence on customers, when the service efficiency of Highlands staff is appreciated by customers, customer satisfaction will increase and vice versa  H5: Assurance has a significant direct influence on customer satisfaction, when the assurance of Highlands is appreciated by customers increases, the level of customer satisfaction will increase and vice versa Research model On the basis of understanding and analyzing research models on customer satisfaction, which have been widely applied in many fields, at the same time, stemming from the research objectives of the topic, and the characteristics of products and services of the company Highlands Coffee, the research model proposed to be used in the study of customer satisfaction for the quality of products and services of Highlands in Hanoi is proposed CHAPTER 3: METHODOLOGY A Data collection method I Sample size Research results are directly affected by the sample size selection stage Because larger sample muscles will yield better results reduce the likelihood of errors and appreciate the accuracy of the research results The sample size is calculated based on a 5: ratio that is very important for EFA research (Hair et al., 2012) Therefore, this study's minimum size should be at least five times depending on the quantitative of the question In this case, 24 questions mean the minimum sample size must be at least: n = * 24 = 120 Besides, Tabachnick and Fidell (1996) have created sample size assessments for six levels: • • • • • • Very poor: 50 surveys Poor: 100 surveys Fair: 200 surveys Good: 300 surveys Very good: 500 surveys Excellent: 1000 surveys In order to conduct a study on the factors of service quality of Highlands Coffee in Hanoi city affecting customer satisfaction., the target audience is those who may use service quality of Highlands Coffee in Hanoi city II Primary data Sampling methods Sampling methods are procedures conducted to select the population's elements to apply necessary tests and compliance for evaluation According to Hair (2012), there are two basic sampling designs which are: probability and nonprobability In our research, we use nonprobability sampling methods specifically convenience sampling and snowball sampling Data are collected via an online survey Firstly, we will use our personal facebook to send surveys to our friends, relatives and colleagues; then have them send it to their friends and acquaintances Second, we sent the survey form to the group "Fu-hoa lac" of FPT University, the "hoi review an co tam", “an gi bay gio nhi” and sent it by commenting the survey in the All factor scales have Cronbach’s alpha greater than 0.7 The results indicate that all measurement models are reliable III Correlation The table shows that variables are higher correlated with its main factor than other factors IV Testing hypotheses Compute Variables In the Compute variable section, we create representative variables from the following items (drawn from the results of running EFA and Cronbach Alpha): • Reliability_m is computed from items namely RELY_1, • RELY_4,RELY_3,ASSUR_1,EFFI_5 Tang_m is computed from items namely TANG_1, TANG_2, TANG_3, TANG_4, • • • EFFI_4 Empa_m is computed from items namely EMPA_1, EMPA_2, EMPA_3, EMPA_4 Effi_m is computed from items EFFI_2, EFFI_3 CS_m is computed from items CS_1,CS_2,CS_3 Table Variables entered/removed Table The table shows the variables in our analysis It means Reliability_m, Customer empathy_m, Tangibles_m, Service efficiency_m and Assurance_m are useful to predict Satisfaction_m Model summary and overall fit statistics Table The results show that the adjusted R2 of our model is 0.505 with the R2 = 0.512 This means that the linear regression explains 51.2 % of the variance in the data The Durbin-Watson d = 1.502 We can assume that there is no first order linear autocorrelation in our multiple linear regression data ANOVA table Table The F-test is highly significant (Sig < 0.05) We assume that the model explains a significant amount of the variance in Customer satisfaction Multiple linear regression: Table Based on Table, the Sig of the Tangible, Empathy and Service Efficiency are all less than 0.05, so it is concluded that these variables have an impact on the Customer Satisfaction Reliability has Sig = 0.089 > 0.05, so it is no significant impact on Customer Satisfaction So in the regression model there will be no Reliability variable Our regression model is dictated as follow: Customer satisfaction = 0.719*Tangible + 0.157*Empathy + 0.180* Efficiency The results also shows that tangibility is the strongest predictor with (β = 0.661) Efficiency (β = 0.206) and Empathy (β = 0.167) have less impact These findings help us to support or reject our hypotheses Our hypotheses that Tanibility, empathy, and efficiency are correlated with customer satisfaction are supported The hypothesis that reliability will have an effect on customer satisfaction is rejected The examination of excessive multicollinearity shows that the VIF were scrutinized All VIF values are within the range of 1.27 – 1.44 Multicollinearity problem does not influence the regression estimates V Discussion H1: Reliability has a significant direct influence on customer satisfaction, when the reliability of food safety is assessed by customers, the customer satisfaction level will increase and vice versa Based on table 5, the results show that the Reliability coefficient has no impact on customer satisfaction with Beta Standardized Coefficient = +0.081, sig = 0.089 This shows that Highlands Coffee's customers are not concerned with reliability issues with the store such as payment, information storage, H2: Customer empathy as a common interest has a significant direct influence on customer satisfaction, when customer empathy about Highlands increases, customer satisfaction will increase and vice versa again Based on table 5, the result showed that the Empathy factor significantly impacted customer satisfaction with Beta Standardized Coefficient = +0.167 , sig = 0.001 The numbers above confirm that this factor has ranked third out of factors indirectly affecting customer satisfaction, indicating that it is the least influential one of the factors examined This factor helps customers feel always cared for and treated as thoughtfully as possible In other words, this is a factor that stimulates customers to use Highlands Coffee's services on the basis of bringing them comfort and convenience H3: Tangibles have a significant direct influence on satisfaction of customers such as beverage products, facilities, and equipment of the restaurant When the tangible assets of Highlands are appreciated by customers, the level of customer satisfaction will increase and vice versa Based on table 5, the result showed that the Tangible factor significantly impacted customer satisfaction with Beta Standardized Coefficient = +0.661, sig = 0.000 The numbers above confirm that this factor has ranked first out of factors indirectly affecting customer satisfaction, indicating that it is the most influential one of the factors examined According to Parasuraman et al (1988), Cronin and Taylor (1992), have demonstrated a positive correlation between tangible factors and customer satisfaction for service quality Tangible factors also affect service quality on the basis of creating excitement and attraction for customers when coming to Highlands Coffee For individual customers, the influence of this factor is even more evident Tangibility is what customers can feel about Highlands Coffee through their senses such as the store's space layout, staff uniforms, facilities, etc Tangibility is a component of quality service, affecting service quality and thus customer satisfaction H4: Service efficiency has a significant direct influence on customers, when the service efficiency of Highlands staff is appreciated by customers, customer satisfaction will increase and vice versa Based on table 5, the result showed that the Service efficiency factor significantly impacted customer satisfaction with Beta Standardized Coefficient = +0.206, sig = 0.000 The numbers above confirm that this factor has ranked second out of factors indirectly affecting customer satisfaction, indicating that it is nearly the most influential one of the factors examined This factor is associated with the human factor in terms of professional qualifications, ability to handle business and level of efficiency at work The staff is the bridge between the bank and the customer using the service, for service industries with high requirements for customer contact, the service delivery process of the staff always plays an important role for the customer customer service quality assessment Descriptive statistics show that customers rate the service efficiency of Highlands Coffee staff with high agreement Ns: Non- significant *: Significant p < 0.05 CHAPTER 5: CONCLUSION AND RECOMMENDATIONS In our research, we analyzed the service quality factors of Highlands Coffee in Hanoi that affect customer satisfaction The results of the analysis have met the research questions and research objectives set out earlier The discussion factors include: Tangibles, reliability, empathy, service efficiency, assurance The results of the previous sections of the study have classified, evaluated and shown that in fact, there are three factors that really impact customer satisfaction (Tangibles, Empathy, Service Efficiency) and two factors (Reliability, Assurance) does not really impact customer satisfaction In which, Tangibles and Service Efficiency factors have the strongest impact on customer satisfaction Through data analysis on factors affecting customer satisfaction, we would like to make some suggestions to improve Highlands Coffee in Hanoi as follows: Regarding tangibles, eye-catching space is one of the most important factors affecting customer satisfaction Highlands Coffee still does not have enough private space for those who want to exchange work, find a quiet location Therefore, Highlands Coffee can arrange larger distances between tables, arrange bookshelves, decorate objects in between tables or have potted plants interspersed in outdoor spaces Thus, creating an airy space while helping to create privacy Highlands Coffee should also create more eye-catching check-in corners and change them regularly to make customers less boring However, it is also necessary to avoid overuse or it will cause confusion for customers Besides, when customers come to Highlands Coffee, the employees will be the one to directly contact the customers Therefore, the fact that employees dress well and neatly will also make a good impression on customers Highlands Coffee needs to pay attention to the dress code of employees, uniforms should always be neat and tidy Regarding service efficiency, one of the first factors to capture the hearts of customers is that the staff must be polite and friendly No one wants when I walk into the shop, spend money on this store but receive indifference Highlands Coffee should focus on training employees in behaving kindly towards customers A straightforward posture, bright eyes and bright smile will bring comfort to customers This is considered a must for a employee However, many coffee businesses ignore it Not only that, employees need always respect all customers, not discriminate, discriminate and evaluate customers Besides, the survey results show that Highlands Coffee's employee is too busy to respond to all customer requests in a timely manner Therefore, Highlands Coffee should invest a lot in the human factor to improve customer satisfaction by training and coaching employees to a variety of jobs Thus, when the number of customers is large, all employees in each department can support each other However, Highlands Coffee needs to add more human resources to avoid overwork From that, it is concluded that businesses with coffee business models similar to Highlands Coffee should also invest and improve more in intangibles, service efficiency to increase customer satisfaction REFERENCE Cronin, J J and Taylor, (1994), “SERVPERF versus SERVQUAL: Reconciling Performance Based and Perceptions-Minus-Expectations Measurement of Service Quality”, Journal of Marketing, Vol 58, 125-131 Cronin, J J and Taylor, (1992), “Measuring Service Quality: A Reexamination and Extension”, Journal of Marketing, Vol 56, 55-68 Parasuraman, A., Zeithaml, V.A and Berry, L.L (1988) “SERVQUAL: a multiple-item scale for measuring consumer perceptions of service quality”, Journal of Retailing, Vol 64, 12-40 Parasuraman, A., Zeithaml, V.A., and Berry, L.L (1985) “A conceptual model of service quality and its implications for future research”, Journal of Marketing, Vol 49, 41-50 Xia Liu, Mengqiao He, Fang Cao and PeiHong Xie (2008).”An Empirical study of online shopping customer satisfaction in China: a holistic perspective” Hair et al (2010), “Multivariate Data Analysi”s, 7th edition APPENDIX Measurement items Code Question Refere Scale nce CS CS1 I am satisfied my most recent decision to experience Liu et point-scale,1=Very the service at Highlands Coffee al unsatisfied, (2008) CS2 CS3 My feelings towards Highlands Coffee's employees Cronin can best be described as and 2= Unsatisfied, 3= Neither unsatisfied Taylor nor satisfied, 1992 4= Satisfied, My feelings towards Highlands Coffee's service can Cronin 5= very satisfied best be described as and Taylor 1992 RELY RELY_1 When you have problems, Highlands Coffee is Cronin 1= Strongly disagree; sympathetic and reassuring 2= Disagree; RELY_2 Highlands Coffee is dependable 3= Neither agree nor RELY_3 Highlands provides its services at the time it promises to so RELY_4 When Highlands Coffee promises to something by disagree; and Taylor 1992 4= Agree; 5= Strongly agree a certain time, it does so RELY_5 Highlands Coffee does not tell its customers exactly when services will be performed EMPA EMPA_1 Highlands Coffee does not give you individual 1= Strongly disagree; attention EMPA_2 Users will prefer to use school psychology counseling apps 2= Disagree; Cronin and Taylor 3= Neither agree nor disagree; 1992 4= Agree; EMPA_3 Highlands Coffee does not have your best interests at 5= Strongly agree heart EMPA_4 Highlands Coffee does not have operating hours convenient to all their customers TANG TANG-1 Consultants are committed to accompanying clients throughout the treatment process to increase customer satisfaction Cronin and Taylor 1= Strongly disagree; 2= Disagree; TANG-2 Continuously monitoring customer status during and after treatment will make customers more satisfied TANG-3 1992 3= Neither agree nor disagree; Highlands Coffee employees are well dressed and 4= Agree; appear neat 5= Strongly agree TANG-4 Highlands Coffee has up-to-date equipment EFFI EFFI_1 You not receive prompt service from employees of Highlands Coffee EFFI_2 Employees of Highlands Coffee are not always willing to help customers 1= Strongly disagree; Cronin and Taylor 1992 EFFI_3 Employees of Highlands Coffee are too busy to Employees of Highlands Coffee are polite EFFI_5 Employees get adequate support from Highlands Employees of Highlands Coffee not know what your needs are ASSUR ASSUR_ You can feel safe in your transactions with Highlands Coffee employees Cronin and Taylor ASSUR_ Highlands Coffee keeps its records accurately disagree; 5= Strongly agree Coffee to their jobs well EFFI_6 3= Neither agree nor 4= Agree; respond to customer requests promptly EFFI_4 2= Disagree; 1992 GENDER AGE Your gender ? Option: Male, Female Your age ? Option: 30 Option: < times/week, 2-4 times/week, > times/ week Option: 10.000.000 VND Option : Yes/No ... In order to conduct a study on the factors of service quality of Highlands Coffee in Hanoi city affecting customer satisfaction. , the target audience is those who may use service quality of Highlands. .. suggestions to improve Highlands Coffee in Hanoi as follows: Regarding tangibles, eye-catching space is one of the most important factors affecting customer satisfaction Highlands Coffee still does... service quality at Highlands Coffee? 1.5 Research Scope The purpose of the survey is to find out the level of customer satisfaction with Highlands Coffee'' s service quality The scope of the study