UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Nguyen Thi My Chi FACTORS AFFECTING CUSTOMER SATISFACTION IN GROUP BUYING IN VIETNAM MASTER OF BUSINESS (Honours) Ho Chi Minh City – 2013 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Nguyen Thi My Chi FACTORS AFFECTING CUSTOMER SATISFACTION IN GROUP BUYING IN VIETNAM ID: 60340102 MASTER OF BUSINESS (Honours) SUPERVISOR: Dr. Tran Ha Minh Quan Ho Chi Minh City – 2013 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com - i - ABSTRACT Recently, group buying model is developing rapidly and impressively in Vietnam as a type of online shopping. This study aims at investigating the motivations that influence customer satisfaction as well as service quality of group buying. This research will find out that service quality, brand, trust and price are critical factors influenced customer satisfaction with service quality is the most important factor.
Keywords: group buying, group buying site, customer satisfaction. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com - ii - TABLE OF CONTENTS ABSTRACT. i TABLE OF CONTENTS. ii LIST OF FIGURES.
iv LIST OF TABLES. Online service quality. Service quality and customer satisfaction. Price discount and customer satisfaction.
Trust and customer satisfaction. Brand and customer satisfaction. Research sampling method. Data collection procedure.
Data analysis method .22 LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Exploratory Factor Analysis (EFA). Multiple regression analysis. FINDING AND ANALYSIS.
Evaluation and refinement of measurement scales .1 Cronbach Alpha Reliability Analysis. Exploratory Factor Analysis (EFA). EFA for independent variables. EFA for dependent variable.
Pearson Correlation Coefficient. Testing assumptions of Multiple Regressions. Summary of hypotheses testing results. Discussions of the findings.
CONCLUSIONS AND IMPLICATIONS. Implications of this research. Research limitations and implications for future research .71 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com - iv - LIST OF FIGURES Figure 2.1 The research model and hypotheses .1 Histogram of SATIS dependent variable .2 Normal P-P Plot of regression standardized residual .69 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com - v - LIST OF TABLES Table 3.1 Survey item summary .2 Cronbach’s alpha reliability test result .3 KMO and Bartlett’s Test for independent variables .4 Rotated Component Matrix .5 Removal process during EFA .6 Total Variance Explained.7 Rotated Component Matrix .8 Cronbach’s alpha summary after EFA .9 KMO and Bartlett's Test for dependent variable .10 Factor loading of satisfaction variable .11 Pearson correlation coefficients between SATIS and other independent variables .13 The summary of overall value .15 The result of testing hypotheses .71 LUAN VAN CHAT LUONG download : add luanvanchat@agmail. INTRODUCTION In the first chapter, the background of the chosen research subject will be presented, along with problem background and the purpose of this thesis.
Finally, the research question will be addressed with the research objectives which will be clarified clearly in later parts. Research background In the past, consumers must go to the store and buy commodities directly. It takes much times and also brings the inconvenience to consumers, especially who are far away from the store. Nowadays, as the Internet has been developing, more buyers are enjoying online shopping because the Internet services are as a convenient way to shop.
Consumers can buy goods, even services, online, where makes more options for them. Consumers who have a want for some favor services or goods could be gathered when making an online shopping (J. Chen, Chen, & Song, 2002; Pi, Liao, Liu & Lee, 2011). Additionally, it offers many advantages, such as facility, rapidity, a 24-hour opening and unrestricted geography.
Due to the advantages of Internet, in the context of electronic commerce, online group buying becomes more and more popular. According to Rezabakhsh et al. (2006), “central idea of online group-buying is the aggregation of geographically dispersed consumer purchasing power from all over the countries that have a common interest in a certain product and come together on the group-buying sites to get price discounts”. In addition, joining online group buying, consumers not only get competitive advantages of quantity system price and delivery service, but also have chances to share shopping experiences with other buyers.
LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com - 2 - In Vietnam, according to electronic information website Maskonline, website phagia.com appeared officially on June 2010, making an underground river to the field of electronic commerce in the country. Some months later, many other group buying sties were born to compete each other, as cungmua. According to Vu Hong Quang, a representative of the Southern VC Corp. which owns muachung.com, after just 7 months of operation, his site already has 100.com’s main competitor, nhommua.com has the same number of registered users but even some of the newer sites have 60.
According to uncompleted statistics, up to now, Vietnamese market has about 97 sites that offer group buying services (E-Money, 2011). Deals sites can create a winning situation all around that give benefit to three sites: business, coupon site and consumer. Businesses get some much needed traffic, the coupon sites get a commission for pulling in that traffic and consumers get a good deal. And Vietnamese are loving this model.
Group buying model adopts “tipping point” mechanism. This mechanism requires a minimum number of participants for each deal. There are two conditions make a transaction happens: the number of actual participants exceeds the minimum number and the potential buyers have prepaid for the deal (Cohen, 2009). A deal usually includes price discount of the product or service.
When the number of people reaches a certain limitation, customers will get direct discounts on goods or services or they can buy vouchers with attractive prices (E-Money, 2011). According to action.vn, group buying model is as a balloon inflated round two years ago, but it is now flat and gradually has to transform to survive (May 2012). Even Groupon in the U., the first group buying model in the world, also had bitterly announced dismal sales declines in the last 6 months. In Vietnam, the LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com - 3 - group buying model is facing to changes to overcome this difficult period.
In the past, the majority of the initiators were main buyers in online group buying. However, because of the impact of global economic recession, many initiators are aggressive being the roles of vendors holding the products or services to supply to consumers. This research doesn’t focus on analyzing the reason why initiator acts as vendor, however, vendor role of initiator is considered as a part of group buying mechanism to evaluate service quality later. Research motivation Kris Ashton (2011) noted that, since many consumers are not familiar or comfortable with online payments, most vouchers are purchased by money transfer or cash on delivery.
Vouchers are often lost or delivered lately and the cost of delivery can be costly. There is also the problem of many merchants that don’t follow the rules of the contract, provide inferior service or treat voucher holders differently than they do customers that are paying full price. Summarily, they are all problems in service quality that group buying services need to focus more to survive in recent difficult environment. In previous studies, some of them discussed online group buying in operator point of view: Wei et al.
(2011) proposed a management model in online group buying’s process, Matsuo (2009) proposed an effective pricing mechanism for traders, Anand and Aron (2003) using analytical economic models to study the phenomenon of online group buying. The other discussed from consumer point of view: Liao et al. (2012) focused on consumers’ demands and preference of stuff in online group buying, Tsai et al. (2011) found out that trust in virtual community and website quality are the determinants of online group buying’s intention, etc.
LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com - 4 - As the review above, there is no study focus on service quality of group buying even it is the critical factor affecting customer satisfaction. Therefore, this research will try to figure out how to measure service quality of a group buying service toward customer satisfaction. It also provides the main factors along with service quality to enhance customer satisfaction of group buying service. Research questions According to the research background and motivations outlined before, this research aims to investigate the following questions from the experiences of buyers in online group buying: (1) What are online service quality dimension in group buying service and how do they affect customer satisfaction? (2) What are factors that affect customer satisfaction in Vietnamese group buying service and how do they affect to customer satisfaction? 4.
Research objectives The main objective of this research is to investigate the usefulness and applicability of theoretical model in measuring online group buying quality and customer satisfaction: - Analyze the method used to measure service quality of group buying and the influence of the measure to customer satisfaction. - Analyze factors influencing customer satisfaction in group buying in Vietnam. LUAN VAN CHAT LUONG download : add luanvanchat@agmail. LITERATURE REVIEW In this chapter, some literatures are reviewed concerning the online service quality.
This research will continue by presenting some popular scales such as SERVQUAL and E-S-QUAL. Finally, the purposed research model for the adoption of the group buying will be presented. Group buying Nowadays, multiple types of electronic commerce have been developing strongly. Group buying is one of those diversified types, and has made an impressive speed of progression in recent years (Matsuo, 2009).
collective buying, group purchase) has existed in marketplaces for several decades. It is defined as the purchase from a group of consumers who seeks to get products or services at the cheapest price but in the best quality. Group buying model can help many buyers gather into collective buying groups, even though they are not near or they do not know each other (Kittipong et al. In the past, members of group buying were restricted.
They could only ask for the person who they are familiar with to join group buying (Liao et al. Yuan (2004) also pointed out that the main reason of this issue is the difficulty in finding a group of people with the same demand all the time in traditional markets. Therefore, one of advantages of online group buying is that many buyers can form groups on the Internet in a short period of time and buy goods or services at a discounted price even if they don’t know each other (Matsuo, 2009). Besides, geographical limitations are also a problem in traditional market (Liang & Lim, 2011).
However, with the growth of Internet, consumers with the same interests can converge together easily through Internet without any difficulty as they meet LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Thus, the other advantage of online group buying is that online group buying can overcome the geographical limitations that the traditional group buying could not do like that. Erdogmus and Cicek (2011) mentioned that there are two different types of online group buying systems: dynamic pricing and stable pricing. In the dynamic pricing type, the discount prices can be changed basing on the price-quantity tables defined by the sellers.
If in a predetermined time, a group of buyers could be gathered, then consumers could get the product or service at the same discounted price. In the second type of the online group buying, stable pricing, “the seller offers a certain product or service at a large discount price, but the price is static, does not get lower as the number of the buyers increases (Erdogmus & Cicek, 2011, p. However, the discount price is only applied when the total number of the buyers who buy the deal is greater than the predetermined limit of the minimum required number of buyers.