RESEARCH PROJECT (BMBR5103) WHAT FACTORS EFFECT ON CUSTOMERS’ SATISFACTION TOWARD SERVICE QUALITY OF VUS HCM STUDENT’S FULL NAME : JAMILAH STUDENT ID : CGS00064968 INTAKE : MARCH 2016 ADVISOR’S NAME & TITLE : DOCTOR BUI PHI HUNG August 2017 Advisor’s assessment Advisor’s signature Table of Contents Acknowledgements Abstract CHAPTER ONE: INTRODUCTION 1.1 Introduction 1.2 – Research Aims 1.3– Research Question 1.4 – Justification and significant of the Study 1.5 – The Structure of the paper 1.6 – Conclusion CHAPTER TWO: LITERATURE REVIEW 2.1 Introduction 2.2 Customer disconfirmation framework 10 2.3 Service quality and customer satisfaction 13 2.4 Measure service quality 15 2.5 Theoretical framework and hypothesis 16 2.6 Hypothesis 17 2.7 Conclusion 18 CHAPTER THREE: METHODOLOGY 19 3.1 Introduction 19 3.2 Research Approach 19 3.3 Research design 23 3.4 Data collection methods 26 3.5 Validity 28 3.6 Reliability 29 3.7 Data analysis 29 3.8 Conclusion 30 CHAPTER FOUR: FINDING 32 4.1 Introduction 32 4.2 Demographics 32 4.3 Testing Reliability of the Scales 34 4.4 Exploratory Factor Analysis (EFA) 36 4.5 Total variance explained 37 4.6 Rotated component matrix 38 4.7 Pearson correlation coefficient analysis 38 4.8 Analysis of Multiple Linear Regressions 39 4.9 Verification of the suitability of the model 40 4.10 In Conclusions: 42 CHAPTER FIVE: CONCLUSION 43 5.1 Introduction 43 5.2 Methodology of the Study and Data Analysis 43 5.3 Key Findings 43 CHAPTER SIX: RECOMMENDATION 44 REFERENCES 45 APPENDICES LIST 49 Acknowledgements This master thesis represents the final accomplishment in order to graduate with a Master of Business Administration, from Open Malaysia University The topic was chosen based on my own interest and curiosity regarding what factors effects customers’ satisfaction toward service quality of VUS HCM I enjoyed working on this thesis and exploring how customer satisfaction arises in VUS HCM I acknowledge that the research outcome would not have been possible had we not worked together as a team First, I would like to thank the interviewees and respondents This study would not have been possible without their voluntary participation I especially appreciate that I gained respondents whom i did not know personally prior to this study Your support, openness, time, and willingness to help me was vital for my work Second, i would like to thank my advisor Dr Bui Phi Hung for the continuous support, his patience, motivation, enthusiasm, and knowledge for my study I could not have imagined having a better advisor and mentor for my research and study Finally, we would like to thank my families and friends for supporting me to complete the research paper Abstract Purpose- This assignment focuses on evaluating what factors affects Customers’ satisfaction toward service quality of VUS HCM by using Serqual Model of service quality Design/methodology/approach: This research adopted quantitative research to address the research questions Primary data were collected from 290 valid respons from a survey conducted in 17 VUS HCM campuses Finding: The results found that significant relationship between the five dimensions of service quality (tangibility, reliability, responsiveness, assurance, and empathy) and students’ satisfaction The finding generally indicates that the majority of students are satisfied with the service provided by VUS HCM In addition, the findings help VUS HCM make better strategic plan as to enhance student’s satisfaction in particular and it’s overall performance in general CHAPTER ONE: INTRODUCTION 1.1 Introduction Since Vietnam joined The Trans-Pacific Partnership (TPP) which is a trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam, there are many foreign companies enter Vietnam to open their business As a result, the demanding for English learning is increasingly in Vietnam English centers’ customers are derived from all background, ages, and learning purposes In response to that need, there are a lot of English schools or learning centers has been established and focus their product in training English communication skills, Grammar in all levels, IELTs, TOFL as international English proficiency certificate in Vietnam particularly in Ho Chi Minh City such as ILA, VUS, Apollo English training center, etc In today’s economy, customers demand better products, services, and value for their money In order to satisfy the customer’s requirement, companies have to understand customer feedback of their products or services Therefore, customer satisfaction surveys are conducted constantly in order to understand the wishes and needs of customers, thereby improving the quality of products and services Beside that, in recent years more and more people consider that studying abroad or working abroad would be a way for further development in Vietnam Many parents hope their children have an opportunity to go abroad to pursue their studies Passing IELTS, passing the TOFEL, passing other foreign language tests are becoming a necessary channel which leading to study abroad or work abroad For that reason language training institutions are gradually becoming a popular educational industry in Vietnam This thesis will research on the factors affect to customer’s satisfaction at VUS HCM concerning their service quality 1.2 – Research Aims This dissertation aims to explore whether the level of customer satisfaction with VUS English training service center and find out the way for improvement This thesis will find out the factors that influence a customer’s level of satisfaction and assist the case company to analyze the current situation and find out any existing problems with VUS services 1.3– Research Question VUS has many campuses which located in HCM, Ha Noi, Dong Nai and Binh Duong cities To be narrowed down and specific on the research topic, the research questions for this dissertation is focused on the factors affect to customer’s satisfaction at VUS HCM which just focused mainly on VUS HCM customers only Therefore, my research question is “what factors affect to customer’s satisfaction toward service quality of VUS HCM?” 1.4 – Justification and significant of the Study Watson et al (2015) argued that it often takes some time to build loyalty and make a profit from new customers, with resultant customer replacement costs being very high In light of this, two thoughts justified this study: customer satisfaction alone does not build customer retention or customer lifetime value (Keiningham et al., 2007), and service quality and customer satisfaction are closely linked to customer retention and market share (Dong et al., 2015) The results will contribute to previous research that has analyzed the relationship between expectations and perceptions of service quality, while measuring service quality, customer satisfaction, and customer behavioral intentions, and the relationships among these constructs Generally, the results will have far-reaching implications for all private education sector stakeholders that are involved in the delivery of education 1.5 – The Structure of the paper This dissertation will follow a logical structure to systematically answer the research question It will begin with a literature review to give general knowledge surrounding the topic of stress It will also discuss and evaluate previous research to see where this dissertation will fit within the literature The dissertation will then go on to discuss the methodology used for this research It will highlight the methods used, the sample and the limitations of the research The findings will then be presented using tables and graphs to highlight the key points found Averages and correlations will be calculated to help form an answer to the research question There will then be a chapter to discuss what has been found and to relate it back to the existing literature This will allow the researcher to draw conclusions from the data Finally, there will be a conclusion which will draw all of the data together to form an answer to the research question 1.6 – Conclusion This chapter has introduced the research and outlined the aims and relevance of it It has discussed the scope of the research and created a research question that can be investigated The next chapter will present existing literature surrounding the question “What factors affect customers’ satisfaction toward service quality of VUS HCM?” This will give background knowledge for the topic and will be informative about what has previously been investigated CHAPTER TWO: LITERATURE REVIEW 2.1 Introduction In most of the studies in which researcher’s try out surveys of the customers’ use SERVQUAL instrument, which is one of the most widely used scales for the measurement of perceived service quality Several research studies found that the service quality gaps, and the relative importance of the five dimensions of service quality, were the same for students and staff, albeit with some specific differences Reliability was the most important dimension for all customers and the greatest improvement in service quality could be achieved through improved service reliability (Smith et al., 2007) In general, studies like Hanaysha etal (2011) indicates that five dimensions of service quality have significant impacts on the student satisfaction However, Khan et al (2011) found that responsiveness, empathy and reliability are also significantly related to service quality; similarly, reliability and empathy were also found with positive relationship with customer satisfaction but according to them, responsiveness was not significantly related to customer satisfaction Likewise, service quality is significantly related to customer satisfaction (Agbor, 2011) concludes in his findings Furthermore, previous research indicates that there is a significant relationship between dimensions of service quality i.e Reliability, Assurance, Responsiveness and Empathy with satisfaction of the customers while, Tangible was having an insignificant relation with student satisfaction Khan et a (2011) have also observed that higher the level of students’ satisfaction greater will be their willingness to put great efforts towards their studies Rasli et al (2011) are of the view that to achieve the dual goals of satisfaction and loyalty, service quality in the education sector especially in universities need to be evaluated from both the internal (customers) and external (service providers) perspectives) However, Swaner & Brownell (2009-2010) criticized this view and points that strength of evidence for these outcomes, however, is weakened by the limitations of existing research In today’s competitive environment, the education has not only become a main player of 4.6 Rotated component matrix The idea of rotation is to reduce the number factors on which the variables under investigation have high loadings Rotation does not actually change anything but makes the interpretation of the analysis easier The above results show that the model of EFA (Exploratory Factor Analysis) is consistent with the data, calculated into groups of factors and these results may be used for a multiple regression analysis 4.7 Pearson correlation coefficient analysis Pearson correlation technique was used to identify the relation between the six variables Tangibility, reliability, assurance, responsiveness, assurance, empathy, student satisfaction show a positive and significant relationship towards service quality 38 Table 5: Correlations Satisfaction _Y Satisfaction_Y Pearson Correlation Reliability Responsibility _X1 ,632 Sig (2-tailed) N Reliability_X1 Pearson Correlation X2 Empathy_X3 Assurance_X4 Tangible_X5 ,544 ** 290 290 290 290 ** ,632 ,530 ** ,447 ** 290 290 290 ** ,427 ,410 ** ,409 ** 290 290 290 ** ,397 290 ,452 ** ,476 ** 290 290 290 ** ,427 ,000 ,000 ,000 N 290 290 290 290 ** ** ,000 ,000 ,409 ,427 ,000 Sig (2-tailed) ** ** 290 290 ,447 ,452 ,000 290 ** ** ,000 N ,456 ,397 ,000 ,000 ** ** 290 ,000 ,544 ,456 290 ,000 ** ** ,000 Sig (2-tailed) ,589 ,410 ,000 290 ** ** ,000 290 ,538 ,427 ,000 N Correlation ** 290 ,000 Pearson ,589 290 ,000 Correlation ** ,000 Sig (2-tailed) Pearson ,538 ,000 290 Correlation ** X5 ,000 N Pearson ,530 _X4 ,000 ,000 Correlation ** _X3 Assurance Tangible_ ,000 Sig (2-tailed) Responsibility_ Pearson _X2 Empathy ,476 ** ,483 ** ,000 290 290 ** ,483 Sig (2-tailed) ,000 ,000 ,000 ,000 ,000 N 290 290 290 290 290 290 ** Correlation is significant at the 0.01 level (2-tailed) The table shows that all variables have the Pearson correlation coefficient value > 0,5 which appears to be a positive correlation between variables Moreover, checking the satisfaction of each factor We have the sig value < 0.05, it proofs that the elements all have meaning and satisfaction hence we should be able to put these elements in multivariate regression analysis 4.8 Analysis of Multiple Linear Regressions 39 Table 6: Model Summaryb Change Statistics Std Error R Model R ,772 Adjusted Square R Square a ,595 of the R Square F Estimate Change Change ,588 ,51927 ,595 df1 83,569 df2 Sig F Durbin- Change Watson 284 ,000 1,939 a Predictors: (Constant), Tangible_X5, Responsibility_X2, Reliability_X1, Empathy_X3, Assurance_X4 b Dependent Variable: Satisfaction_Y Regression table measures the amount of total variation in dependent variable due to independent variables The value of R square in the table is 0.588 This value indicates that there is almost 58,8% variation in dependent variable (student satisfaction) due to one unit change in independent variables i.e Empathy, Assurance, Reliability, Tangibility, Responsiveness 4.9 Verification of the suitability of the model Analysis of variance (ANOVA) is a collection of statistical models used to analyze the differences among group means and their associated procedures (such as "variation" among and between groups) a Tabble 7: ANOVA Model Sum of Squares Regression Mean Square 112,670 22,534 76,579 284 ,270 189,249 289 Residual Total Df F Sig 83,569 ,000 b a Dependent Variable: Satisfaction_Y b Predictors: (Constant), Tangible_X5, Responsibility_X2, Reliability_X1, Empathy_X3, Assurance_X4 a Table 8: Coefficients Model Unstandardized Standardized Collinearity Coefficients Coefficients Statistics B (Constant) Std Error -,424 ,209 Reliability_X1 ,328 ,046 Responsibility_X2 ,181 Empathy_X3 Assurance_X4 Beta T Sig Tolerance VIF -2,029 ,043 ,325 7,068 ,000 ,673 1,486 ,051 ,162 3,573 ,000 ,695 1,439 ,187 ,048 ,178 3,896 ,000 ,681 1,468 ,244 ,051 ,225 4,752 ,000 ,636 1,572 40 Tangible_X5 ,170 ,058 ,139 2,932 ,004 ,633 1,579 a Dependent Variable: Satisfaction_Y Accreditation ANOVA from the table is to assess the relevance of the theoretical regression model The test results F = 83,569 value and Sig = 0.000