MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HOCHIMINH CITY …………………… Huỳnh Thị Ngọc Mai THE RELATIONSHIP BETW EEN SERVICE QUALITY, CUSTOMER SATISFACTION and CUSTOMER LOYALTY IN CLEANING SERVICE INDUSTRY An evidence of Pan Pacific Corporation MASTER’S THESIS Major:Business Administration Major Code:60. Trần Hà Minh Quân Ho Chi Minh City 2010 ACKNOWLEDGEMENT I would like to record my most sincere appreciation and heartfelt thanks to individuals, of whom without, might not lead to the possibility of this research to be realized. First and foremost, I wish to express my deep sincere gratitude to my supervisor Dr.Tran Ha Minh Quan for his guidance, encouragement and excellent advices throughout this study. I would like to extend my sincere thanks to assistant Prof.
Nguyen Dinh Tho, Dr.Nguyen Thi Mai Trang and Dr.Dinh Cong Khai for their valuable comments and constructive suggestions. I would also like to avail this opportunity to express my appreciation to Professor Nguyen Dong Phong and UEH Board of Directors for creating MBA program in English. I am also thankful to all my classmates in MBA class-Bath 16, especially Ms.Nguyen Nhu Chang, Mr.Nguyen Thanh Trung, Mr.Lam Hong Phong, for their collaboration and valuable assistance throughout my study. Gratitude also goes to Board of Management of Pan Pacific Corporation, colleagues for giving me supports.
Many thanks for Pan Pacific’s Clients who save value time to respond my survey questionnaire, without them my thesis could not have been done. Last but not least, the express my profound gratitude to my beloved mother, my lover and my closest friends for being patience and never failed giving me continuous supports, spiritually and encouragement along the study. i ABSTRACT In the present cleaning service industry, service quality is a vital competitive policy to keep customers support and long-term cooperation. Cleaning service providers are trying to win customer satisfaction and loyalty by proving enhanced quality service.
The aim of this study is to examine the relationship between service quality, customer satisfaction and customer loyalty in cleaning service industry. In this study, attention is paid to the measurement model of service quality in cleaning service industry based on the well-known SERVQUAL model, but with modification on the basis of focus group discussions and expert opinions to reflect the specific industry attributes and the special culture of Vietnam. 158 samples were collected from Pan Pacific Corporation’s various clients in the South of Vietnam. Cronbach Alpha was carried out to test the reliability of each statement and the summated scales were formulated by means of Exploratory Factor Analysis (EFA).
Then, Multiple Linear Regressions test was used to test the effect of Service Quality on Customer Satisfaction and Customer Loyalty, the effect of customer satisfaction on loyalty. Overall findings from this study suggest there were significant relationship between Service Quality, Customer Satisfaction and Customer Loyalty. The study found that there were six dimensions of cleaning service quality including affectivity, cleaner competence, supervisor competence, tangibles, service safety, empathy and all dimensions are positively related to Customer Satisfaction. The regression test also found that there was a positive direction and significant relationship between customer satisfaction on customer loyalty.
The results indicated that the overall service quality has significantly positive effect on overall customer loyalty. Among these six dimensions except Empathy, all of them have a significantly positive effect on overall customer loyalty. Keywords: cleaning service industry, service quality, customer satisfaction, customer loyalty. i TABLE OF CONTENT ACKNOWLEDGEMENT.ii TABLE OF CONTENT.
iii Chapter 1: INTRODUCTION.1 Introduction about cleaning service industry.5 Objectives of the study.6 Scope of the Study.8 Structure of the study.6 Chapter 2: LITERATURE REVIEW.1 Definition of service quality.1 Definition of “Quality”.2 Definition of “Service”.3 Definition of “service quality”.2 Measurement of service quality.3 Cleaning service quality.1 Definition of “Cleaning”.2 Definition of cleaning service quality:.3 Determinants of cleaning service quality:.4 Cleaning quality awareness.4 Relationship between service quality, customer satisfaction and loyalty .1 Relationship between Service quality and customer satisfaction.2 Relationship between Customer Satisfaction and Loyalty.3 Relationship between service quality and customer loyalty.27 Chapter 3: RESEARCH METHODOLOGY.1 Items to measure Service Quality.2 Items to measure customer satisfaction.3 Items to measure customer loyalty.3 Survey method and data collection.6 Data Analysis techniques.39 Chapter 4: DATA ANALYSIS AND RESEARCH FINDINGS.1 Descriptive statistics of sample.1 Reliability Analysis Results.2 Exploratory factor analysis (EFA).1 Measurement scales of cleaning service quality.2 Measurement scales of customer loyalty.3 Adjustment of theoretical model.4 Testing the research model and the hypotheses.1 Testing correlations between all constructs.1 The relationship between Cleaning Service Quality and Customer Satisfaction.2 The relationship between Customer Satisfaction and Loyalty…………58 4.3 The relationship between cleaning service quality dimensions and customer loyalty.5 DISCUSSION AND FINDINGS.63 Chapter 5: CONCLUSIONS AND IMPLICATIONS.1 Conclusions of the study.2 Implications of the study.3 Limitations and recommendations for further research.68 APPENDIX 1- CUSTOMER SATISFACTION FEEDBACK. 73 SOME ACTIVITIES OF CLEANING SERVICES FOR REFERENCE.76 5 LIST OF TABLES Table 3.1- Measurement scales of cleaning service quality.2- Measurement scales of customer loyalty.3 – Reliability of the measurement instrument.4 – Rotated component matrix of cleaning service quality scale.5 – Total Variance Explained of customer loyal.6 – EFA result for individual measurement scales. 7-Final construct measurement scales.8- Summary of hypotheses.61 6 LIST OF FIGURES Figure 2.1- SERVQUAL gap analysis.1a - Position of respondents.1b-Gender of respondents.1c - Service range of respondents.2 - Adjusted theoretical model.3- Hypothesis H1 testing result.4-Hypothesis H2 testing result.5 -Hypothesis H3 testing result.62 v Chapter 1: INTRODUCTION This chapter begins with general introduction about cleaning service and the current study is provided with research background, research problem, research objectives and research questions are mentioned as the rationale for this study. Also, scope of the current study are discussed and an introduction of the methodology to be used in this chapter.
At the end of the chapter, the structure of this study is provided.1 Introduction about cleaning service industry Nowadays, cleaning service is very popular in human life. Cleaning service providers is responsible for providing all necessary management, manpower, machinery, equipment, tools, chemicals (exclusive such items, which the Landlord shall provide), which were pre-approved by the Landlord to efficiently carry out the cleaning tasks of the project in accordant with the international standard and Landlord requirements. They also provides uniformed, properly trained and appropriately skilled cleaners. All cleaners have a yearly health check.
Cleaners shall at all time while on duty be dressed in full uniform, well groomed, clean- shaven, polite and helpful. Service providers maintains the minimum number of contracted cleaners and provides additional cleaners as it determines necessary for full cleaning coverage during sickness, holidays, etc. Using cleaning service bring to us much advantage : high quality service, reasonable fee, the professional and well trained working force from the leading company in cleaning and property care, the modern specific cleaning equipments without any investment, maintaining the value of the property, creation a clean and beautiful working environment for both officers and visitors, avoidance from directly management to the cleaning workers and risks from its potential problems, whole hearted concentration on own business. 1 Among of many cleaning service providers in Vietnam, Pan Pacific is one leading company in this industry, with operating in over 20 cities and provinces nationwide, supplying cleaning service for more than 300 customers of many business types.
Pan Pacific also is among of Vietnam largest cleaning providers with over 5000 skilled employees. With more than 17 years experience in cleaning service industry, Pan Pacific has developed various customer system including Commercial Buildings (office buildings, service apartments), Supermarkets and Shopping Centers, Hospitals & Medical Centers, Factories in IPs, EPZs, International Schools. Especially, Pan Pacific also have many experiences in supplying regular cleaning service for typical projects with highest level national security such as; International Airports, Television Station.2 Research background: Going with developing real estate market and foreign investment, demand of facility management in office buildings, shopping centers, international schools, foreign factories are appeared. These management services include security, property maintenance, pest controls, landscape and cleaning service.
In which cleaning service industry is very important to enhance quality and brand of the building. Instead of organizing and managing a cleaning division, owners can contract with professional cleaning company which can provide package service including manpower, equipments, tools, chemicals. A cleaning company will provide uniformed, properly trained and appropriately skilled cleaners, all cleaners have a yearly health check, cleaners shall at all time while on duty be dressed in full uniform, well groomed, clean-shaven, polite and helpful. Cleaning company will provide additional cleaners as it determines necessary for full cleaning coverage during sickness, holidays, etc.
Cleaning company also is responsible compensating damage of property which cause of their employees. 2 With lot of advantages bring to customer, industry cleaning service is first choice for Office Buildings, Shopping Centers, Shopping Malls, Foreign Factories, International Schools….By outsourcing, the owner can save their time to concentrate main business fields. Therefore, cleaning service industry in Vietnam has developed rapidly in recently year with a lot of customers in many fields such as : almost Office Buildings with grade A-B-C have demand of using high-class cleaning service (Bitexco Financial Tower, Saigon Centre, Metropolitan, Sunwha, Kumho…), famous shopping centers (Diamond, Parkson,…), modern factories in electricity, pharmacy, food. (Intel, P & G, Unilever, Kimberly Clack, Sanofi, Sonion…), international schools (VUS, VAS, ACG, RMIT, V-STAR, Bắc Mỹ, Việt Mỹ, Saigontech …), high-class service apartments (The Manor, Saigon Pearl, Somerset, Catavil…), Hotels ( Sheraton, Rex, Kumho,.
Number of cleaning providers also increase quickly to meet market demand. In the such competitive market, developing and keeping customer loyalty is essentially for business survival. Customer loyalty is another way to gain the best possible customer, repeat customers. Not only do repeat customers tend to spend more money but they are often the people who tend to provide the best word of mouth advertising possible.
Especially in cleaning service industry, competition is rife. Customer will not hesitate to terminate cleaning contract in the event that their needs and expectations are not met. In cleaning service, emphasis on the quality is a vital aspect in that it determines the level or degree of customer satisfaction. A cleaning service provider can reduce the detrimental impact of effective factors by first ensuring that its customers are as highly satisfied with its services as possible.
Cleaning service organizations are better positioned to reap the positive outcomes associated with having a largely satisfied customer base if they have an understanding of those factors that contribute to their customers’ satisfaction. Because meeting customers' expectations for key service quality attributes should 3 lead to satisfied customers who, in turn, will remain loyal to the service and recommend it to other potential customers.3 Research problem To evaluate how well their companies are meeting customer needs, service managers often use measurements of service quality and customer satisfaction (Dabholkar, 1995). Therefore, service quality and customer satisfaction have received much attention from service marketers and academic researchers (Spreng & MacKoy, 1996). In addition, Taylor (1997) has noted that the two constructs (service quality and customer satisfaction) have became very important for marketing theory and practice.
Oliver (1997) suggested that profit for a company (purchase/repurchase behavior by the consumer) was dependent on a sequence of three factors: Quality, satisfaction, and loyalty. Quality has a direct influence on consumer satisfaction, which can be both a cognitive and affective dimension according to Oliver. Satisfaction, in turn, has a direct influence upon the loyalty of the consumer. A review of available literature found a lot of studies regarding interrelationship of service quality on customer satisfaction and customer loyalty.
But it is lacking in studies of cleaning service, there is only one published study (Anthony M Kyengo, April 2007) examine quality control in cleaning service. In this circumstance, not only Pan Pacific but also Vietnamese cleaning service companies realize the necessity of empirical studying to examine specifically influences of their service to customers’ behavior. They need know that, what specific aspects of their services influence customers in terms of their satisfaction and their perceptions of service quality, which, in turn, lead to customer loyalty? 4 1.