MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HOCHIMINH CITY NGUYEN THI MONG VAN DETERMINANTS OF CUSTOMER SATISFACTION IN THE APARTMENT INDUSTRY THE CASE FOR THE APARTMENT INDUSTRY IN VIETNAM MASTER’S THESIS In Business Administration Ology code: 60. Tran Ha Minh Quan Ho Chi Minh City, 2012 ---------- TIEU LUAN MOI download : skknchat@gmail.com 1 Acknowledgement This research project would not have been possible without the support of many people. Firstly, I wish to express my deep sincere gratitude to my supervisor, Dr. Tran Ha Minh Quan for his invaluable advice and help.
Without him, this thesis could not have been completed. I would like to express my deepest gratitude and honor to my parents not only for the love they devote to me but also for the time which I should have devoted to them during their senior years. I am also grateful to my classmates and my colleagues, especially Le Thi Bich Dao and Ngo van Quan for all of their friendship and encouragement. I also wish to thank my friends in Becamex subsidiaries for their great support, and to the respondents, without whom, my thesis could not have been accomplished.
Finally, I am most grateful to my dear husband. He is my whole life. He is my greatest inspiration and the source of encouragement to overcome all difficulties through out the duration of this study. TIEU LUAN MOI download : skknchat@gmail.com 2 Abstract In market economy, quality of products or services is the most important tool to succeed.
The nature of the quality of goods is intended to satisfy the needs of the highest enjoyment of goods or services. Construction work in general and of apartment buildings in particular are a type of goods. The criteria for the quality of it also must be directed towards those values. However, the criteria for the quality of goods or construction in general and apartment buildings in particular is extremely diverse.
The business activities in the field of real estate are trying to improve the quality of products and services to satisfy the maximum demands of customers, especially in the apartment business. This study examined the determinants of satisfaction and the effects of customer satisfaction on word of mouth of consumers in the apartment industry in Vietnam, as well as the influence of background data on the relationship between satisfaction and word of mouth activity. This research measures the factors influencing apartment satisfaction in quantitative research methods. The scale was evaluated by the factor analysis method to explore EFA and reliability testing (Cronbach's alpha) then multiple regression analysis is used to test the research model.
This study will help to improve the strategies of real estate companies in choosing the best measures to improve the quality of their company's product, while increasing competitiveness and solidify the company's position in the marketplace. As time was short, this study focused its review on the relationship between six factors influencing their apartment construction and intention to engage in word of mouth activity. Keyword: Customer satisfaction, word of mouth, Service quality, apartment industry. TIEU LUAN MOI download : skknchat@gmail.com 3 Contents Acknowledgement.
3 List of Tables. 6 List of Figures .4 Purpose of the study.5 Objectives of the study.7 Significance of the study .8 Structure of thesis. 11 Chapter 2: LITERATURE REVIEW .2 Overall customer satisfaction.1 Concept of customer satisfaction .2 Determinants of customer satisfaction .3 Hypotheses and model .7 Relationship between customer satisfaction and word of mouth. 24 Chapter 3: RESEARCH METHODOLOGY.
25 TIEU LUAN MOI download : skknchat@gmail.1 Overall customer satisfaction scale.2 Scale to measure service quality.3 Scale to measure customer satisfaction.4 Scale to measure word of mouth .3 Data analysis techniques. 37 Chapter 4: DATA ANLYSIS AND FINDINGS .2 Exploratory factor analysis.1 Exploratory factor analysis with determinants of customer satisfaction .2 Exploratory factor analysis with overall customer satisfaction and word of mouth .4 Testing research model and hypotheses .1 Testing correlations between all constructs .2 Testing research model and hypotheses.1 The relationship between determinants of customer satisfaction in the apartment industry and customer satisfaction.2 The relationship between overall customer satisfaction and word of mouth in the apartment industry. 50 TIEU LUAN MOI download : skknchat@gmail.com 5 Chapter 5: CONCLUSIONS AND IMPLICATIONS .2 Conclusions of the study.3 Implications of the study.4 Limitations and recommendations for future research. 52 List of References.
60 Appendix 2- Observed variables. 63 Appendix 3 - Descriptive statistics of variables. 65 Appendix 4 - Reliability analysis- Cronbach’s Alpha. 66 Appendix 5 - Factor analysis.
69 Appendix 6 - Regression result. 71 TIEU LUAN MOI download : skknchat@gmail.com 6 List of Tables Table 2.1 Service quality dimension definitions (modified from Zenithal et al.1 Scale to measure service quality.2 Scale to measure customer cost .3 Scale to measure physical quality.4 Scale to measure environmental quality .5 Scale to measure project facilities .6 Scale to measure region facilities .7 Scale to measure customer satisfaction .8 Scale to measure word of mouth .1 Demographic profile of respondents .2 Reliability of measurement items .3 EFA result for construct measurement scales (2nd times) .4 Total variance explained .5 EFA result for construct measurement scales .8 Summary of hypotheses testing results.9a Model II summary. 50 TIEU LUAN MOI download : skknchat@gmail.com 7 List of Figures Figure 1.1 Structure of Thesis.1 Research model of customer satisfaction .1 Means of joining of respondents .2 Relationship between determinants of customer satisfaction in apartment industry and customer satisfaction.3 Relationship between overall customer satisfaction and word of mouth in apartment industry. 49 TIEU LUAN MOI download : skknchat@gmail.com 8 Chapter 1: INTRODUCTION 1.1 Overview This chapter presents an overview of the research, the Background to the study, Problem statement, purpose of the study, objectives of the study, research questions, significance of the study, and structure of thesis 1.2 Background to the study Customer satisfaction is one of the key issues for companies in their efforts to improve quality in the market place.
Most businesses have their own targets for being profitable. They have carefully planned and implemented strategies, but they all have something in common – a customer. Business purposes are based on customers and if the company wants to be successful, it has to concentrate on them. This means determining customers’ needs, responding to their requirements and maintaining customer satisfaction by assuring quality in company’s operations.
Besides, customer satisfaction is so important, because satisfied customers spread positive word of mouth which attracts more new customers, and then companies will sell more and gain high profits (Garson 1993, 5.) The apartment industry in Vietnam recently formed and flourished in recent years. The development of the apartment industry has contributed greatly to the urbanization of Vietnam. Currently, however, the apartment market in Vietnam has fallen in the general downturn of the economy. Project investors such as Hoang Anh Gia Lai are decreasing their prices in a number of new apartment projects as much as 40%.
Other projects such as the Discovery Complex apartment project in Hanoi, Dai Thanh project, etc. are experiencing a similar depreciation. Competition between investors is fierce among apartment products as well as other commodities in the market. Therefore, when consumers decide to buy or invest property goods, customers will consider many factors that affect their decision to buy and satisfy their life needs.
Apartment investors must understand these factors to build an effective business strategy. VNR survey data of property report (2009-2010) indicates that, the most important TIEU LUAN MOI download : skknchat@gmail.com 9 factor for customer satisfaction is the location of the project (gaining an advantage position of 71. Next is the project design factor. In addition to these factors, the decision to buy is based on the flow of information relating to apartment options before buying.
This is where word of mouth has a large influence. In order to increase sales, investors need to understand the factors affecting customer satisfaction and enhance positive communication activities to develop more new customers.3 Problem Statement The Vietnamese economy is developing in accordance with Party economic policy. The population’s incomes was increased dramatically, demand for housing along with a growing. Current, source of housing supply from many Vietnam and foreign real estate companies are quite diverse.
When Vietnam integrated into the world economy, conceptions about the apartment industry gradually changed along with the developing of the economy. Today, owning an apartment is proud choice, especially for young people because interior decorations of apartments that are modern, luxurious and similar to 4 or 5 star hotels. Each apartment is designed close to public services, such as supermarkets, Asian and European restaurants, swimming pool, multi gym, postal services, banking, kindergarten, office of the company, etc. as a miniature city, so that people can use the utility on the spot without having to go far, etc.
In order to meet this demand, many construction companies have invested in this sector. Compared to just two years ago, this year the apartment industry has diversified profusely. Due to the increased competition experienced between firms, customer satisfaction has become more important. Good product and quality differentiates between products, ensures consumer loyalty and may lead to increased market share.
In Vietnam, empirical studies on the state of customer satisfaction in the apartment industry are very scant. The increase competition in the apartment industry in Vietnam and the growth trend in real estate supply for the past decade, does not TIEU LUAN MOI download : skknchat@gmail.com 10 provide empirical support for the claim that customer are satisfied with the quality delivered by firms in the industry. It is necessary to increase understanding of the factors that drive customer satisfaction in this industry in order to provide management with empirical basis for developing effective marketing strategies.4 Purpose of the study Currently, customers spend a large amount of money to buy an apartment but the build quality and services provided are very low. In some apartment projects, after two years from purchase date, the walls are cracked, sanitary ware is rusted , etc.
despite, in the purchase apartments contract have recorded in detail of interior construction materials and structural apartment, when building investors have arbitrarily changed without notice to customers. A series of accompanying utility services such as entertainment place, parking, etc. that investors introduced to customers when signing purchase contracts that are not included in the utility of building. It is very necessary to research the service or product quality because of affecting customer satisfaction, creating belief in investing and residing in apartment.
For the above identified research problem, the main purpose of this study is to analyze the factors related to overall customer satisfaction and intention to engage in word of mouth activity in apartment industry in Vietnam.5 Objectives of the study The following are the specific objectives of this study: - To examine the determinants of customer satisfaction in the apartment industry in Vietnam. - To identify the relationship between customer satisfaction and word of mouth communication. What are the determinants of customer satisfaction in apartment industry in Vietnam? 2. Is there relationship between the customer satisfaction and word of mouth TIEU LUAN MOI download : skknchat@gmail.com 11 communication in the apartment industry in Vietnam? 1.7 Significance of the study This study is significant in evaluating customer satisfaction in the apartment industry: First, it will provide the basis for making decisions about improvements in current housing stock as well as the design and development of future housing.
Second, it will encourage housing managers, designers, and policy makers to be more accountable. Third, to policy makers the finds and results of this study will provide insights and guidance to help monitor the operations of the apartment industry in Vietnam. Forth, will show the impact on physical and psychological health of customers who reside in apartments.8 Structure of Thesis The study is organized into five chapters (Figure 1.1 Structure of Thesis METHODOLOGY LITERATURE DATA ANALYSIS REVIEW & DISCUSSION INTRODUCTION CONCLUSION Chapter one is the introductory chapter.