MINISTRY OF EDUCATION AND TRAINNING UNIVERSITY OF ECONOMICS HO CHI MINH CITY ------------------- Nguyen Nguyen Xuan Thao THE IMPACT OF SERVICE QUALITY ON CUSTOMER SATISFACTION IN THE HOSPITALITY INDUSTRY Differences between the viewpoint of foreign and Vietnamese customers THESIS OF MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – 2012 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com MINISTRY OF EDUCATION AND TRAINNING UNIVERSITY OF ECONOMICS HO CHI MINH CITY ------------------- Nguyen Nguyen Xuan Thao THE IMPACT OF SERVICE QUALITY ON CUSTOMER SATISFACTION IN THE HOSPITALITY INDUSTRY Differences between the viewpoint of foreign and Vietnamese customers Subject: Master of Business Administration Code : 60340102 THESIS OF MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: Assoc. NGUYEN DINH THO Ho Chi Minh City – 2012 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com I ACKNOWLEDGEMENTS This thesis was made during 06 months from March, 2012. It becomes a memory time in my life when having a lot of stress, difficulty and struggle between deadlines of job and study. However, it has opened a vision for me about wild- knowledge which comes from many authors who stay around in the world, having different languages and cultures but bring me an amazing experience which I am grateful for.
Knowledge should be accumulated gradually during the school. I would like to say thank you to all professors in the University of Economics Ho Chi Minh City, who already taught and trained me in MBA course. Knowledge also comes from the sharing of friends who were sitting the same class or incidentally appointed the same group with me. I thank you for their sharing.
Especially, a great thank and special gratitude is addressed to Assoc. Nguyen Dinh Tho, who directly instructs me throughout my thesis with his conscientiousness, patience and knowledge. Finally, I wish to thank my boss of EFS Company Ltd., and my family members for all supporting me during my studying in University. Nguyen Nguyen Xuan Thao Ho Chi Minh City, October 31st 2012 Ho LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com II COMMITMENT I would like to commit that this thesis, “The impact of service quality on customer satisfaction in the hospitality industry: Differences between the viewpoint of foreign and Vietnamese customers”, was accomplished based on my research seriously and independently.
The data was collected from hotels and restaurants industry in Vietnam by the author in reality. It has clear source. Thus, the data was trustful handled and conducted by the author. Nguyen Nguyen Xuan Thao Ho Chi Minh City, October 31st 2012 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com III TABLE OF CONTENTS ACKNOWLEDGEMENT.
II TABLE OF CONTENTS. III LIST OF TABLES. V LIST OF FIGURES.5 Structure of Research. 5 Chapter 2 LITERATURE REVIEW, THEORETICAL FRAMEWORK AND HYPOTHESES .1 The SERVQUAL Instrument .2 Applying SERVQUAL in the Hospitality Industry.3 Perceived Service Quality .3 Theoretical Framework and Hypotheses.
16 Chapter 3 RESEARCH METHODOLOGY .3 Data Collection Procedures .4 Data Analyze Procedure. 22 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.4 Multiple Linear Regression Analysis. 24 Chapter 4 ANALYSIS RESULT .2 Reliability and Validity of SERQUAL Scales .3 Dimensions of Service Quality in Hospitality Industry .4 Overall Perceived Service Quality .2 Multi-Linear Regression Analysis .5 Hypothesis Testing and Discussions. 45 Chapter 5 CONCLUSIONS AND RECOMMENDATIONS.
Summary of Findings. Contributions of the Study. Limitations and Future Research. 67 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com V LIST OF TABLES Table 2.1 Five Dimensions of Service Quality .2: The Summary of Research Hypotheses .1: The Sources of Measurement Scale .2: Rules of Thumb about Cronbach‟s Alpha Coefficient Size .1: Demographic Characteristics of the Study .2: Cronbach‟s Alpha Measures of Variables in the Study .3 KMO and Bartlett's Test of Five Independent Variables .4: Rotated Component Matrixa of Independent Variables .5 KMO and Bartlett's Test and Component Matrix .6 Correlation of Variables .7 ANOVAb for Construct .8 Model Summaryb of the Construct .9 Coefficientsa of the Construct .10 Overall Perceived Service Quality .11 ANOVAb for Satisfaction .12 Model Summaryb of Satisfaction .13 Coefficientsa of Satisfaction.14 Coefficientsa of the Construct for Vietnamese Customers‟ Group .15 Coefficientsa of Satisfaction for Vietnamese Customers‟ Group .16 Coefficientsa of the Construct for Foreign Customers‟ Group .17 Coefficientsa of the Satisfaction for Foreign Customers‟ Group .18 Comparison Customers‟ Viewpoints.
45 LIST OF FIGURES Figure 2.1 Research Framework for Vietnamese Customers Group .2 Research Framework for Foreign Customers Group. 42 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 1 ABSTRACT Vietnam is more and more attractive a lot of tourists from other countries in the world. Since the life-style is developed rapidly, the customers have more demands on the services, especially in their enjoyable and leisure time. The importance of service quality for business performance has been recognized not only in the literature but also in reality because it effects directly on customer satisfaction which leads to the profitability for an organization.
This study examined the relationship between the components of service quality, overall perceived service quality and customer satisfaction. The respondents were Vietnamese and foreign customers who stayed in hotels or spent their dining in restaurants in Ho Chi Minh City, Vietnam. The study used Statistic Package for Social Science (SPSS) to analyze data through Exploratory Factor Analysis (EFA) and regression analysis tools. Firstly, the research proposed a model to analyze the effect of service quality factors in the hospitality industry on overall perceived service quality.
The five service quality variables identified in this study were named as “tangibles”, “reliability”, “responsiveness”, “assurance” and “empathy”. The results indicated that “reliability” and “empathy” have strong positive effect on overall perceived service quality. Secondly, the research investigated the impact of overall perceived service quality on customer satisfaction. Results showed that overall perceived service quality has a significantly effect on customer satisfaction.
Finally, the research finding confirmed that there are differences between the viewpoints of Vietnamese and foreign customers on service quality and its impact on their satisfaction differently. Keywords: SERQUAL, Perceived Service Quality, Customer Satisfaction, Hospitality Industry, Vietnam. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 2 CHAPTER 1 INTRODUCTION 1.1 Research Background: The trend of world markets has changed significantly from agricultural to service markets. In Vietnam, the service markets, especially the hospitality industry is more and more increasing the market share caused by the growth of tourism industry.
According to the report of Vietnam National Administration of Tourism (www.com, accessed on 20/05/2012) the revenue of tourism 2011 gains 130 trillion VND, increasing 30% over the previous year. Vietnam tourism market has been received over 6 million oversea tourists and served for 30 million domestic customers in 2011. Till April 2012, the number of foreign tourists has already reached 2.9% over the same period last year. Vietnam government also proposes a planning of tourism in 2012 is that receiving 6.5 million of foreign tourists (increasing 8.3% over 2011) and serving for 32 million of domestic customers (increasing 6.
In order to gain this target, many strategies for developing tourism industry have been given out such as to appeal the investment on infrastructure; to open more the tourism trading promotion representative offices in China, Japan, Korea, Thailand, Australia, Malaysia, France and Russia; especially Ha Long Bay just becomes the New World‟s Natural Wonders; last but not least all other industries, e. hospitality industry related to tourism should be reinforced and enhanced so that to bring the most satisfaction to the tourists. As all above factors, there are a lot of restaurants and hotels to be opened to serve for this demand. Besides the services of accommodation and food are provided by local suppliers, there are many famous international hotel and restaurant groups to join this market in Vietnam such as Starwood, Park Hyatt, Hilton Worldwide, Movenpick and so on.
The customers have more choices about the services and all the service businesses are trying their best to improve their LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 3 service quality in order to make customers more satisfied, and that can improve profitable to the firms. Therefore, the viewpoint of customers (local and foreign ones) about service quality should be considered and defined how to match with the different levels of customer satisfaction. To help the companies get more success and survival in today‟s competitive environment, there are many researches to define about “quality”, “service quality” “customer satisfaction”. Research shows that quality is defined as “fitness for use” and “those product features which meet customer needs and thereby provide customer satisfaction” (Juran and Godfrey, 1999).
Service quality leads to customer loyalty and attraction of new customers, positive word-of-mouth, employee‟s satisfaction and commitment, enhanced corporate image, reduced cost and increased business performance (Berry et al. Higher levels of service quality produce higher levels of customer satisfaction, which in turn lead to higher levels of customer patronage. Customer service quality is a crucial source of distinctive competence and often considered a key success factor in sustaining competitive advantage in service industries (Palmer, 2001). In the hospitality industry, to exist in the intense competition, hospitality organizations look for ways that they can profitably differentiate themselves.
One of strategy is the delivery of high service quality (Stevens, Knutson & Patton, 1995). Research has supported that the basic principle that high quality goods and services are favored in the marketplace and has suggested that high service quality performance increases customer satisfaction (Anderson & Fornell, 1994). However, the concepts of service quality are difficult to define, measure and maintain (Parasuraman, Zeithaml & Berry, 1985). In 1985, Parasuraman et al., defines service quality as a function of the differences between expectation and performance along ten major dimensions such as reliability, responsiveness, competence, access, courtesy, communication, credibility, security, understanding/knowing the customer, tangibles.
In later research, Parasuraman et al.(1988) revises and defines the service quality in terms of five dimensions: tangibles, reliability, responsiveness, assurance (combining communication, LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 4 credibility, security, competence and courtesy), and empathy (combining understanding and knowing the customer with accessibility). It is called SERVQUAL instrument which becomes the most popular and commonly uses to measure service quality across many different service settings. Besides, according to Parasuraman et al., (1985) service quality is evaluated by the gap between expected service and perceived service. It means the customers expect service companies to do what they are supposed to do.
They expect fundamentals, not fanciness; performance, not promise only. At the point of service creation and delivery, all the resources and knowledge of the provider of the service must come together in exactly the right way to ensure an excellent service encounter for the customer. At this point, the customers compare their expectations with actual service delivery system performance and ultimately arrive at their perceptions of service quality. Or, customer satisfaction as a measure of how customers perceive services delivery (Hernon & Whitwan, 2001).
In short, there are many concepts of customer‟s satisfaction, therefore, it is not easy for the managers of hotels and restaurants in Vietnam to define and provide a service quality in order to bring the most satisfaction for their customers.2 Research Motivation: In the hospitality industry, most researchers are interested in maximizing customer satisfaction; satisfied customers tend to return and make the profit to hotel and restaurant business. The role of service quality as one of indicators for customer‟s satisfaction and hotels‟ profitability (Kotler et al., 1996), the hospitality organizations should consider any element or factor to fulfill their customer satisfaction. In order to identify the impact of service quality factors on customer satisfaction in hospitality industry in Vietnam, I want to conduct a survey to examine the relationship between service quality and customer satisfaction. Also, I would like to make a comparison between the viewpoint of foreigners and Vietnamese about the service quality dimensions to understand if their perceptions LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 5 of service quality are same or different in two groups.