1 Ministry of Education and Training University of Economics Ho Chi Minh City Nguyễn Thị Hạnh THE KEY FACTORS IMPACT ON CUSTOMER LOYALTY IN APL LOGISTICS VIETNAM ECONOMICS MASTER THESIS Ho Chi Minh city - 2010 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 2 Ministry of Education and Training University of Economics Ho Chi Minh City Nguyễn Thị Hạnh THE KEY FACTORS IMPACT ON CUSTOMER LOYALTY IN APL LOGISTICS VIETNAM Major: Business Administration Major Code: 60.05 ECONOMICS MASTER THESIS Supervisor: Dr. Trần Hà Minh Quân Ho Chi Minh city - 2010 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Acknowledgement I would like to express my heartfelt gratitude and deepest appreciation to my research Supervisor, Dr. Tran Ha Minh Quan for his precious guidance, share of experience, ceaseless encouragement and highly valuable suggestions throughout the course of my research. My special gratitude is extended to all instructors at Faculty of Business Administration and Postgraduate Faculty, University of Economics Ho Chi Minh City (UEH) for their support and the valuable knowledge during my study in UEH.
Many thanks to all my classmates in MBA class, Batch 16 for their valuable and enthusiastic support for this research study. Last but not least, the deepest and most sincere gratitude go to my beloved parents, my husband for their boundless support, abundant love and encouragement throughout my period of study. I, therefore, dedicate this work as a gift to them all. Tp Ho Chi Minh, 2010 Nguyen Thi Hanh LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 2 Abstract This study reports on the research results to find out what are the factors impacts to customer loyalty in APL logistics Vietnam.
A study of 212 respondents from their customer was testing. Multiple linear regression technique was used to test the hypotheses and research model. According to the results, there are three factors impact to APLL customer loyalty including: service quality and proactive improvement and the trust. They have been confirmed to have positive impacts on customer loyalty in APLL.
This study will help to APLL board of management can consider their operation, knowing what factor need to improve to keep their customer in the competitive market Key word: APLL, customer loyalty, service quality, proactive improvement LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 3 TABLE OF CONTENT Acknowledgement .2 Table of contents. 3 List of figures. 5 List of table.5 Scope and Limitation .6 Implications of research.7 Structure of the study.2 Effect of customer loyalty ……………………….2 Factors impact on customer loyalty ……………… .1 Questionnaire for service quality factors…… .2 Questionnaire for proactive improvement factor……….3 Questionnaire for the trust factor………… .4 Questionnaire for customer loyalty factor………… .37 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.7 Data analysis techniques …………… .39 Chapter 4: Research result ……… .2 Descriptive statistics of sample …….2 Characteristics of sample ……………………………… .3 Descriptive statistics of variable ………………… .3 The construct measurement scale … .2 Exploratory factor analysis for factor impact to customer loyalty.3 Verify research model ………………………………….4 Linear regression analysis ………………………….5 Testing the hypothesis ……………….2 Conclusion from the research ……………………… .3 Discussion of the research findings .5 Recommendations for further research … .62 List of References ……………………………… .67 APPENDIX 2: SPSS result.70 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 5 LIST OF FIGURES Figure 1.1: Factors impact on customer loyalty ….1: The structure of chapter 4 ……….2 Main business between customer & APLL .3: Kind of APLL customer ……… .4: Confirm model of research …….……………………52 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 6 LIST OF TABLES Table 2.1: Determinants of customer loyalty in empirical research. Adaptation of “service quality” ………….2: Adaption of proactive improvement …… .3: Adaption of the trust ………… .4: Adaption of customer loyalty .3: Exploration factors analysis.4: Dimension of customer loyalty.5: Linear regression analysis.52 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 7 CHAPTER 1: INTRODUCTION 1.
Introduction: Customer loyalty is widely accepted by market as being something that's worth nurturing, with many previous analysts and researchers are showing the value of loyalty programmers in terms of greater spending and satisfaction, more profitable customer behavior, reduced defection levels, and unique competitive advantages. But what are the main business factors that directly influence the loyalty of your customers? Investigation therefore about the factors that in influent to customer loyalty gained importance then classic marketing paradigm with its instrumental and transactional oriental proved unsuitable in the context of longer term business relationship. Just like other business, logistics service provider are faced with increasing competitive pressure that urges them to concentrate is not only on operational business processes but also on an efficient and effective customer management. In Vietnam, the 3PL industry gained 15-20% GDP, GDP Vietnam in 2006 is about US 57 billion and logistics revenue is US 8 – 11 billion.
It can be shown that there is a big revenue in logistics industry that our business should concentrate it. Therefore logistics is a major role in our industry & there are many foreign companies access to our countries to develop this field such as: DAMCO, NYK logistics, APL logistics … LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 8 APL Logistics is established from NOL group. NOL began life in 1968 as Singapore's national shipping line, wholly owned by the Singapore government, just as it was becoming clear that containerization was the way of the future. In 1997 NOL bought America's oldest shipping company, American President Lines (APL).
APL was nearly twice the size of NOL and was over of 150 years old. Now fully integrated, the NOL Group has more than 10,000 staff globally and operates two core businesses: APL, a global top-10 container transportation company and APL Logistics, which provides international end-to-end logistics services in more than 130 cities and 56 countries. APL and APL Logistics serve the international transportation and logistics needs of a diverse customer base, ranging from multinationals with highly complex supply chains to small and medium-sized importers and exporters. APL Logistics designs and operates global supply chains that deliver products to everywhere you need them.
Our innovative end-to-end solutions use data connectivity for greater visibility and control. APL Logistics provides the resources necessary to support your supply chain. Services include shipment consolidation and deconsolidation, global freight forwarding and customs management, regional warehousing and distribution networks and IT solutions that increase supply chain performance and reduce costs. APL Logistics' predecessor companies pioneered trade in China and throughout Asia more than a century and a half ago and today we are recognized as a leading innovator in worldwide logistics and technology management.
With more than 300 offices serving over 55 countries, our 4,500 seasoned logistics professionals offer local expertise throughout a truly global LUAN VAN CHAT LUONG download : add luanvanchat@agmail. As an independent unit, APL Logistics' revenues have grown to nearly $1. As a wholly owned subsidiary of the $8.2 billion NOL Group, APL Logistics offers strength and experience you can rely on. Major customer: Nike, Gap, Deichman, Charming Shoppes, Restoration Hardware, Warner Brother, 3M, Birds-Eye, Bobcat, Colgate-Palmolive, Dell Computer, General Motors, Newell Rubbermaid, Nike, Procter & Gamble, Hornbach, … Customer vendors: Li & Fung, Hungfung, Wellsum, Smart Elegant, … Figure 1.1 : Logistics process In Vietnam, APL logistics officially established in 1995 with 100 per cent foreign owned enterprise although NOL group has already entered to Vietnam market since 1992.
The offices of APL logistics are located in the key markets like Hai Phong, Hanoi, Da Nang and Ho Chi Minh City. Until now, the company has 13 years of local business experiences and holds 74 full time employees with average of 3 years experience and 70 per cent employees who are under the age of 30. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 10 APLL group investments in Vietnam also include Vietnam International Container Terminals (VICT), the first dedicated container port in Ho Chi Minh City. Research background Since the beginning of the 1990s, customer loyalty has gained importance both relationship marketing research and in business.
In business, this can be attributed to changing the market and competition-environments (Prit-chard, Havitz, and Howard 1999, p333). Due to a shift from a seller to a buyer market and because of an increasing degree to globalization, most industries find themselves confronted with new challenges. In a first phase, firms tried to face these challenges by focusing on their internal processes and organizational structures, trying to achieve cost reductions by concentrating on internal improvements. A second phase external focus follows, where firms directed attention to their customers, trying to retain existing ones and to win over new ones (churning).
Since “acquiring new customers is much more expensive than keeping them” (Stone, Woodcock, and Wilson, 1996), loyalty customer is the bedrock of any business” (Caruana 2000, p. According to Fornell (1992, p.7) and Fourier and Yao (1997, p.251) market shares have to be secured by retaining customers in markets facing low growth-rates and high competition.106), “a loyalty customer base represents a barrier to entry, a basis for a price premium time to respond to competitor innovation, and bulwark against deleterious price competition.” Baldinger and Rubinson (1997, p.14) show that “loyalty is critical to brand volume, is highly correlated to market share; consequently, understanding loyalty appears critical to any meaningful analysis of marketing strategy.” LUAN VAN CHAT LUONG download : add luanvanchat@agmail. This present study is making to find out the factors that influence to customer loyalty in the APLL Vietnam, and that will help APLL have a overview about their customer evaluation & expectation as well as put forward strategy to improve their service & keeping their customer in the competitive environment as well as crisis economic at the moment. Therefore, this study intends to address two issues: Q1: What are the factors impacts on customer loyalty in APLL.
Q2: Which factor is main impact to customer loyalty at APLL 3.1 Hypothesis Until now, there are many researchers have investigated about the factors impact to customer loyalty. According to Peter Clark, co-editor of The Wise Marketer and co-author of The Loyalty Guide report series, there are six major factors that play key roles in influencing the loyalty and commitment of customers. There are core offering, satisfaction, and elasticity level, share of wallet, the market place and demographics. Besides, Fassnacht and Daus 2004, p.5-7 have structured in three dimensions: firstly, company-related determinants refer to the supplier itself or to the goods or services offered.
It is a prerequisite for the existence of customer loyalty that the offered goods or services create utility for the customer and that they are available. In this respect, an assessment is usually performed by examining quality. In order to evaluate the price-performance ratio, customers will pay attention to prices. Customer loyalty will also be influenced by the reputation a company has and LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 12 ultimately by customer loyalty programs offered.
Secondly, relationship- related determinants play a significant role in long-term relationships. Factors regarding the interaction between supplier and customer, such as relationship quality, previous experiences, and trust are important. Commitment, which provides evidence of emotional closeness and moral or normative feelings of obligation, takes a central role in relationships. Specificity and dependence can lead to economic, psychological and social switching barriers.
Thirdly, customer-related determinants are mainly influenced by customers’ characteristics. In this respect, affect and involvement, and consequently also the importance of the good or service to the customer, are important. In addition, the effects of the market environment and competition are researched, as is the link between satisfaction and loyalty, which plays an important role in the research of customer loyalty and is often placed in one of the three dimensions. However, as most other determinants influence satisfaction, it cannot be clearly separated and should therefore be listed as a distinct category.
Base on above analyst the importance of customer loyalty & the necessary finding the main factors, we suppose below hypothesis to service this present study: H1.