Khóa luận tốt nghiệp Quản trị kinh doanh: Assessment The Quality Of Customer Service And Satisfaction In Parkson Thai Ha

Impact of service quality factors on customer satisfaction at Parkson Thai Ha.... From these facts, assessing the quality of customer services, researchingrelationship between service qu

FACULTY OF BUSINESS AND ADMINISTRATION

ASSESSMENT THE QUALITY OF CUSTOMER SERVICE AND

SATISFACTION IN PARKSON THAI HA

Supervisor's name: Prof Dr Nguyen Van Dinh

Student’s name: Thu Nguyen Hoai

Student ID: 09050315

Intake: 2009 - 2013

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4.1 Assessment of perceived service quality at Parkson Thai Ha 32

4.2 Impact of service quality factors on customer satisfaction at Parkson Thai Ha 53 4.3 Lessons for Lotte Department SIOFG cà tt SH 35

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LIST OF TABLES

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Table 3.5: Reliability statistics of RESPONSIVENESS scale 38

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Table 3.7: Reliability statistics of EMPATHY Scale i sssscicssesascsasasecssssvesaveszes cones 40

Table 3.8: Reliability statistics of CUSTOMER SATISFACTION secale 4]

Table 3.9: Exploratory factor analysis for service quality scale KMO and Bartlett's

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Table 4.1: Perception on customer service quality at Parkson Thai Ha 55

First and foremost, I wish to express my sincere thanks to my advisor Prof Dr

Nguyen Van Dinh- Lecturer in University of Economics and Business, who wasthoughtfully guiding me in writing this thesis

Secondly, I would like to thank the limited company Lotte shopping plaza — LotteDepartment Store that gave me an internship opportunity which is really helpful,

informative and also interesting I especially thank Mr Lee Who Young was

directly introducing me the field of customer service quality Besides, I thank to all

seniors of the company for their whole-hearted caring and guides during my internship in Lotte Department Store I cannot thank them enough for study

environment they provided

Also, I would like to send thank you to the faculty of business administration- allthe lecturers, staffs and my friends who helped me a lot during four years ofuniversity and the last thanks is for my family due to their support andunconditional trust for me

Student

Nguyen Hoai Thu

Data used in making analysis was collected from conducting survey at Parkson Thai

Ha Based on 111 valid responses from customers, the study indentified fivecomponents — TANGIBLE, RESASS, EMPASS, RETAAS, and

INDIVIDUALIZATION- which explain customers’ evaluation of perceived servicequality at Parkson Thai Ha The results indicate that Parkson Thai Ha’s service

quality is assessed with a fairly high level in customers’ perception Furthermore,

the relationship between these service quality components and customer satisfaction

is also investigated through regression analysis As the result showed, these five

components of service quality have positive relationship with customer satisfaction

in which EMPASS has the most significant impact on customer satisfaction level.

In addition, based on these findings, the thesis also gives some suggestions are

given to improve the quality of customer service as the lessons for Lotte

Department Store

1 Problem Identification

In 2008, Vietnam is considered as an emerging country with the most attractive

retail market over the world The reasons are: the high growth of economy,

appropriate policies in attracting foreign investments, and the consumers which are

classified “youngest” in Asia and especially higher spending However, in 2009

Vietnam retail market was only at the 6° place of the attractiveness and dropped to

the 23th in 2011 Continuously in 2012, when the reputable consulting enterprise ofAmerica- A.T.Keraney announced Global Retail Development Index (GRDJ,

Vietnam was out of top 30 the developing countries with the activist retail market.

In spite of these challenges, many enterprises are still optimist about the potential development of this industry: both international and domestic retailers decide to join

or expand in Vietnam retail market at that time As a result, many new retail models

are introduced in Vietnam through the giants in the world, namely: BigC, Metro, Lotte Mart: shopping center- Parkson, convenient store- Ministop.Circle K or category killer with the participant of many domestic companies-Nguyen Kim, Pico, etc One of the most profitable sectors emerging with the fastdevelopment in Vietnam is the shopping centers which provide the luxuriousshopping, experience The typical names can be called as Parkson, Vincom,Diamond, and recently Trang Tien Plaza However, this segment of market isgetting hotter and more competitive over time, due to the expansion of existing

hypermarket-firms and entry of international ones, such as: Aeon (Japan) and Lotte (Korea).

Lotte group is the 5" largest conglomerate in Korea and today ranked at 1" in the

department store thanks to the provision of perfect customers service In Vietnam, lotte invested $US400 million to build the complex of offices, hotels, and department store in Hanoi- Lotte Center which will come into official operation from 6/2014 With hope of proving the shopping experience as in Korea, Lotte continues focusing on customer service which is clearly stated through strategic

mission- “friendly & best service” department store and considers this factor as its

advantage to compete the others During the time of under construction, an

investigation about the fact of customer service in Hanoi is necessary and very

helpful for Lotte to understand more about the competitors Among the rivals, Parkson Thai Ha is a case being worthy of researching because of similarity in

business model and also its significant success in Hanoi market in recent years.

Through the research, the company can get the practical lessons, weaknesses/strengths of Parkson Thai Ha, as well as deeper understanding about the consumers

Moreover, it helps Lotte plan the suitable strategies for the development in the next

year, and aiming the mentioned mission

From these facts, assessing the quality of customer services, researchingrelationship between service quality and customer satisfaction on services provided

by Parkson Thai Ha are necessary to develop Lotte department store in the future

*Note: The concept of shopping centers is divided into two different

models-department store and shopping mall They have some basic differences: whiledepartment store has island stores, common payment system; the shopping mall is often larger, with boxed stores, and separate cashiers The exemplification of

department store and shopping mall in Hanoi are Parkson and Vincom respectively.

2 Objectives & Research Questions

The writing will review the typical models of service quality measurement, then

selecting the most appropriate one for application in customer service of Parkson

Thai Ha After that, the data analysis, evaluation, and the recommendations are

given The research answers the following questions:

e Which service quality model is used to measure the quality and the customer

satisfaction to customer service on Parkson Thai Ha?

e How is the assessment of perceived quality in Parkson Thai Ha?

® What are the impacts of service quality factors to the customer satisfaction of

Parkson Thai Ha?

e What are the lessons for Lotte Department Store in pursuit of good customer

service?

3 Research Method

The dominant research method in this writing is Quantitative method Overall, the

quantitative research generally uses the scientific methods, which can include: generation of models, theories, and hypotheses; development of instruments and

methods for measurement; experimental control and manipulation of variables;

collection of empirical data; modeling and analysis of data.

Besides, the supportive methods are:

e Document studying: find out the information from the documents, writings,

news related to the topic; then select and analyze

se Consultation from the professional: receive the constructive opinions,

advices and direction from the experienced instructor in the research at theuniversity level generally as well as studying field particularly

e Mathematical statistic: collect and process the data & number during the

research, in which the analytical tool is the IBM SPSS Statistics 20 software

4 Scope & Limitation

The research focuses on the quality of customer service and the customersatisfaction of Parkson Thai Ha The assessment of the quality is conducted throughthe offline survey and the participants are customers who used the customer caringfrom their shopping experience in this department store The sample is II] people

and the information is gathered about 10 days, from April 21" 2013 to April 30"

2013

Due to the small number of the participants and limited time, the results as well as

recommendations from this research does not reach the totally accuracy and

objective The following is the limitations existing:

5

Parkson already has two locations in Hanoi and also others in some big cities(Haiphong, Ho Chi Minh City) Therefore, if Lotte Department Store

considers Parkson as one of the strong competitors in the market of retail

today, research the fact of customer service only in Parkson Thai Ha is notenough Because it cannot reflect the operation of other Parkson which leads

to lack of information and more seriously the subjective and despised state tothe rival

Although the participants were selected various as much as possible, the

range of age is quite young (18 — 25 & 26-35 years old) The responses fromthe group of older customers are still limited Besides, the difference innumber between the men and women in the survey is fairly high; therefore,the result of the analysis cannot reflect the general assessment from the

customers exactly

Structure

The research is divided into the following main parts:

Acknowledgment and Tables of Content

Introduction

Chapter 1: Literature Review This chapter will provide the theoretical

framework for the study It includes the fundamental concepts: service and

customer in general, service quality and customer satisfaction, and themodels of measurement

Chapter 2: Research Context and Methodology The necessary steps forresearch process are mentioned: design, data collection, analysis In addition,

this part provides the introduction of Parkson Thai Ha.

Chapter 3: Research Analysis & Results This part will present thedescription of data collected and give the general comment/ feedbacks

Chapter 4: Findings & Discussion The final chapter will discuss the impact

of the factors to the perceive service quality and customer satisfaction in case

of Parkson Thai Ha Then, the practical lessons and suggestions for theprovision of good customer service for Lotte Department Store will be drew.Conclusion

References

Appendix

Chapter 1: LITERATURE REVIEW

1.1 Customer Service & Importance

1.1.1 Concept of Customer Service

According to Phillip Kotler (1997), service is an action or an activity which can be

offered by a party to another party, which is basically intangible and cannot affectany ownership Service maybe related to the intangible or tangible product

Customer Service is a part included in the Service It is the provision of service to

the customer before, during and after the purchase To be more specific, the

pre-transaction factors relate to the corporate policies/ program The pre-transaction

elements are the variables directly involved in the performing the physical

distribution, like product and delivery reliability And the post-transaction ones are

generally supporting product’s usage, such as: warranty, repair, customers’complaints, etc According to Turban et.al (2002), Customer Service is a series of

activities designed to enhance the level of customer satisfaction- that is the feeling

that a product or service has met the customer expectation

Today, the customer service is also the bottom line supporting for the decision ofpurchase from the customer In both online and offline model of business,customers are looking for hassle-free, convenient, and pleasant shopping “Gone are

the days when the customer overlooked poor service because the price was

discounted Finding way to exceed the customers’ expectations is the key.”mentioned by Terry Wooten in “Providing Good Customer Service”

Another more detail description of customer service from the website About.com is:

“For a business to succeed sustainably, it must not only strive to get new customers

but must also do everything to bring back its customers This is where the customer

service of businesses comes in; they need to make every customer feel valued, andunique Every customer should be treated as if he/ she were the only customer you

are receiving for that day And also workers in customer service must very reactive

and not be quick tempered, as some customers are really very irritating”

From the research of information and my own observation to the operation ofshopping centers, a particular definition about customer service is: what customers

expect from every contact, communication and experience while shopping in the

department store Therefore, when talking to customer service, it is an aspect which

is large, detail-oriented and made up by several elements

1.1.2 Importance of Customer Service

The service excellence is one of the most important competitive differentiators in

market today No matter the enterprise deliver primarily goods or services; superior

customer service is a critical factor in both attracting and retaining the customers

Some typical benefits brought are: improved customer satisfaction; strongercustomer loyalty; increase in the number of customers attracted by favorable word-of-mouth, dollars spent by each customer per transaction, the frequency and number

of times your customers shop with you; etc

The firms nowadays almost realize the importance of customer service in their own

business; however, the provision of good customer service in fact is not easy

Therefore, a question is raised: if an enterprise fails in providing the expectedservice to customers, what the results are According to the statistics from white

house office of consumer affairs, there are about 78% of consumers who havebailed on a transaction or not made an intended purchase because of a poor service

experience Nonetheless, it is still not the worst On average, a typical business

hears from only 4% of the dissatisfied customers, while 96% don’t voice their

complaint and more seriously 91% customers will never come back Besides, news

of bad customer service often reaches more than twice as many ears as praise for agood service experience

Furthermore, a part of the employees believe that attracting a new customer is more

important than focusing on customer service to keep an old one However, the fact

is totally reversal Whereas the probability of selling to a new prospect is only from

5-20%, this number to an existing customer is up to 60-70% It is also 6-7 times

more expensive to acquire a new customer than keep a current one Another

interesting truth is on average, loyal customers are worth up 10 times as much as their first purchase.

From the mentioned evidence, it is concluded that the customer service takes morecrucial role in the run of business

1.2 Service Quality

1.2.1 Overview of Quality

Today, the concept of “quality” is very familiar and widely used in many books,

newspapers, academic documents However, not everyone understands this term

fully and accurately, as there is still much controversy around how to understand

“quality” The term “quality” has various meanings depending on the subject and

the context, such as: the quality under the perspective of the manufacturers is different than the viewpoints of customers; or the terms “product quality”, “service

quality”, “quality of system” also have their own understanding In addition, the

opinions about the quality vary because of the characteristics of people and theculture over the world Due to this complexity, there are quite many interpretation

of “quality” The followings are some highlight viewpoints about the quality

According to the European Organization for Quality Control, the quality is “thesuitability of products to the request of consumers”

Russel states that “the quality is the superiority of goods and services, particularly at

the level that it can satisfy all needs and please the customers.”

ISO, an international body for formulating standards, has defined quality as “degree

to which a set of inherent characteristics fulfills requirements” In this case: degree

refers to a level to which a product or service satisfies Therefore, a product may be classified as excellent, good or poor quality product depending upon the level of

satisfaction The inherent characteristics are those features that are a part of theproducts and responsible to achieve satisfaction And finally the requirements heremean the need of customer, need of organization & those of other interested parties(suppliers, employees, community and environment) The expectation may be statedgenerally implied or obligatory.

The quality measured by the satisfaction of needs is the general understanding from

the mentioned statements In fact, the needs always change over time, thus the

requirements of the quality also have been changing with time, space, and

conditions of use The needs are often formed from the characteristics of the

product generally which are expected from the customers, namely: usability,

aesthetics, safety and convenience

According to Gronroos (1894), the service quality should be measured basing twoelements: technical quality what the customers are given during the usage and

supporting quality- how the services are delivered

Hurbert (1995) also stated that before using any service, the customers already havetheir own expectations in their mind If their expectations are not met by the

suppliers, the customers hence are dissatisfied

Another representative view of service quality which cannot help mention is the contribution from Parasuraman, Zeithaml and Berry (1985) The authors defined

service quality is considered as the gap between the customers’ expectation ofservice and the perceived service while using

1.3 Service quality & Customer Satisfaction

1.3.1 Concept of Customer Satisfaction

According to Anton (1996), the satisfaction is the feeling state when all the needs,wants and expectations of customers throughout the process of using the product aremet or even exceeded beyond the expectations, leading to their loyalty and

additional purchase in the future.

Besides, Cadotte et al (1987) gave the more basic and understandable concept: the

satisfaction or dissatisfaction of customers is the result of the interaction between the expectations before purchase and the evaluation after purchase and usage.

Phillip Kotler (2001) defined the customer satisfaction as the extent to which theperformance of product/ service matches the buyers’ expectations Normally, theexpectations of customers are formed from the personal needs, shoppingexperiences, worth-of-mouth from friends/ colleagues, and other information of the

suppliers & competitors

In general, the differences between the perceived quality and initial expectations

will determine the level of satisfaction The consumers can feel one of three

following satisfied levels: if the actual outcome falls short of expectations, the

customers are dissatisfied If the performance matches or exceeds the buyers’

perception, they will feel satisfied or delighted

1.3.2 Relationship between Services Quality & Customer Satisfaction

Service quality and customers satisfaction are two separate concepts For example:

while the satisfaction is the combination of the subjective components, mainly

basing on the feelings and emotions; the service quality tends to be more objective,coming from the customer perception (Shemwell et al 1998) Or the idea of

Robinson (1999) is: the service quality is an attitude or global judgment about the

superiority of service, whereas the customer satisfaction is related to each specific

transaction

In fact, there is a certain relationship between the service quality and customers’

satisfaction which receives considerable support from the researchers Typically,

Parasuraman, Zeithaml, Berry, Bitner and Bolton agreed that the service quality is

positive proportional to satisfaction level Besides, the empirical study of Ruyter et

al (1997) in the health care service also suggested that service quality is considered

as an antecedent of customer satisfaction.

1.4 Model of Measurement

The quality evaluation in the service sector is not based solely on the characteristics/

performance of service brought, but also the whole process the service delivered As

a result, the service quality measurement is much challenging than product qualityone There are many model of service quality measurement today, namely: Kano,SERVQUAL, SERVPERYF, etc

1.4.1 SERVQUAL

The “service quality” variable is always difficult to define and measure However,after the SERVQUAL scale (service and quality) was published (Parasuman,

Zeithaml and Berry: 1985, 1998) and tested basing on the various theories,

SERVQUAL is seen as a useful tool which achieves high reliability The model

includes 2 parts in which each part has 22 statements tapping the differentdimensions of service quality The part one is aimed to identify the expected service

quality from the customers: the participants express their opinion about thisservice’s expectation generally, without considering the situation of particularenterprise The second part helps determine the perceived service performance from

the customers: basing on the particular service of the firm being surveyed to

evaluate The result of research identifies the gap between the customers’perception about the service quality provided by the company and their expectations

to this service quality According to the SERVQUAL model, the service quality will

be determined as:

Service quality = perceived quality — expected quality

Nowadays, the SERVQUAL scale is considered as one of the optimal and most

Figure 1.1: Service Quality Model (Parasuraman et al., 1985)

The gap 1: exist when there are the differences between the expected service

by the customers and the management perceptions of consumers’

expectations The reasons lying behind include: the insufficient marketresearch, too many layers of managements, and misunderstanding/ poorlyinterpretation about the customers’ expectation

The gap 2: management perceptions versus translation of perceptions into service quality specification, and it is also known as quality specification

gap Gap 2 is considered as the result of the inadequate commitment to theservice quality, lack of complete planning procedures, and insufficient taskstandardization

The gap 3: is also known as the service delivery gap- the differences betweenthe service delivery and service specification The possible main reasons are

namely deficiencies in the human resource policies (role ambiguity and

conflict, ineffective recruitment, improper frontline employees training, etc),

an insufficient supervisory control system

The gap 4: the service delivery versus the external communications toconsumers, or known as the market communication gap The organizations

often exaggerate the products and services provided to customers or givepromises with the best privileges, typically the promotion, special treatment.This type of program will result in raising the customers’ expectations;however, it also decrease the perceive service quality if they cannot receivewhat is promised from the enterprise The discrepancy is due to the over-

promising external marketing, failures from the suppliers in providing the

products/ services as well as quality management

The gap 5: the discrepancy between the customer expectations and

perception of service, and called as the perceived service quality gap.Customers’ expectations have been normally shaped by the personal needs,worth-of-mouth recommendations, and their own past service experiences

Service is considered as perfect when there are no any differences betweentheir expected quality and the perceived one

At first, the SERVQUAL model was build basing on the 10 components of service

quality (parasuraman et al., 1985):

e Tangible: include the physical evidence of service (outfit, appearance of

personnel; the equipments)

e Reliability: ability to perform the promised services accurately and right at

the first time

e Responsiveness: the willingness and readiness of the employees to help and

provide the prompt service to the customers

e Competence: relate to the professional knowledge and skills to provide

services These competencies are critically for the frontline employees whocontact and communicate with the customers directly

e Access: create all the best conditions for the customers in approaching to the

services, such as the limitation of time-waiting, favorable location as well as

hours of working, and ease of contact

e Courtesy: involve the warm welcoming and treatment, friendliness, respect

and politeness from all the employees (receptionist, call centers to higher

managers)

e Communication: communicate/ interpret with the buyers in the language they

can listen and understand easily

e Credibility: the capability to build the trust on the customers and make them

believe in the companies It involves in the brand, reputation of the businessand the personality of the frontline staffs

e Security: the ability to ensure the security of the consumers from the risks

relating to assets, finance, and information leakage

e Understanding the customers: mean making efforts to understand the

customers’ needs, caring to them personally, and recognize the patrons

After that, realizing that this scale of model is too complicated and time-consuming

in measuring, thus the researchers streamlined and gave the new scale SERVQUALwith only 5 factors:

e Tangibles: the appearance of physical facilities, equipment, communication

materials and personnel

e Reliability: ability to perform the promised service accurately and right at the

first time

e Responsiveness: the willingness and readiness of the employees to help and

provide the prompt service to the customers

e Assurance- the combination of competence, courtesy, credibility and

security: the knowledge, courtesy and ability of the employees to inspiretrust and confidence

e Empathy (including the access, communication, understanding the

customers): the caring and the individualized attention the firm provides to

each customer

1.4.2 SERVPERF model

Although the SERVQUAL model is confirmed to be a measurement tool of theservice quality reliably and accurately (Parasuraman et.al, 1993) and it is widelyused, it has been still exposed to numerous criticisms Cronin and Taylor (1992)were amongst the researchers who attacked the SERVQUAL scale They proposedthe new one which is referred as the “SERVPERF” model: discard the

“expectation” component and use only the factor “performance/ perceived quality”.

This model mentions that the consumers’ perception to the service performance

reflects the service quality best According to the SERVPERF model, the service

quality equals to the perceived level This statement receives the consensus from

other authors, namely Lee et al (2000), Trady et al (2002) The SERVPERF model

scale also uses 22 similar statements as the perceived performance of the customers

in SERVQUAL, ignoring the “expectation” component If the perceive performance

is high, it implies high service quality and vice versa.

1.4.3 Kano model

The Kano model was developed in the 80s and named as a professor Nokari Kano

This model gives the insights of the product attributes which are considered

important to the customers The following is the 3 main factors which really affect

the consumers’ satisfaction:

Threshold or basic attributes: the first and most important characteristic in Kano model These are the basic features which any product must have and

do not create any competitive advantage If the product or service isoverlooked and lack of these factors, they might be difficult to enter or be

accepted on the market Besides, the customers regard these factors as

prerequisites, he/she take them for granted and therefore does not explicitlydemand them Some typical examples are: the must-be requirement to thedoctor is the excellence in professional knowledge and skills, to any vehicle

is the brake

Performance attributes: associated with the performance (skill, behavioralcharacteristics, capability, etc) Regarding to these elements, the customers’satisfaction is proportional to the level of fulfillment- the higher level offulfillment, the higher consumers ‘satisfaction For example: the great sound

system, beautiful and luxurious interior will increase the satisfaction of usersbesides the basic factors (speed, brake) If these attributes are dismissed, the

consumers can be dissatisfied It implies that once this type of attribute isapplied in the product/ service, the continuance of application is necessary

In fact, this factor is usually the voice of customers: if the manufacturer can

meet their needs, they will be pleased and happy However, the price inwhich the buyers are willing to pay must be positively proportional with thesuccessful performance of these attributes This model requires the

organization to face the tradeoff: cost and improvement of the elements orchoice between the varieties of characteristics

Excitement attributes: represent for the unforeseen needs of customers, but

may yield paramount satisfaction The beauty of the excitement factors is tospur the imagination of potential customers, and helpful in discovering the

expected needs that they have never ever thought or have the idea The

product or service possessing these attributes has significant competitive

advantage over the rivals In the market of diverse products nowadays, this

characteristic acts as the wow (surprising) factor and stimulate impulsive

needs and wants in the mind of customers In comparison with the two mentioned attributes, the excitement one is powerful and most potential in

leading the high profit

The Kano model also states three other attributes, namely:

Indifferent attributes: neither good nor bad and have no influence to thesatisfaction of customers

Unsure attributes: unclear that the consumers expect to have these

characteristics in the product/ service or not

Reverse attributes: the reversal of the product/ service attributes Forexample, some customers prefer the high tech mobile with so many modern

and up-to-date functions, while others pay attention to the basic/ simple

model

1.4.4 Gronroos’s service quality model

The American perception of service quality is based mainly on the contribution ofParasuraman et al (1985, 1988) that service quality might be evaluated by thefunctional quality dimension which includes tangible, reliability, assurance,empathy and responsiveness This perspective does not account other factors ofservice quality The model of Gronroos (1982, 1990) is a complete representation of

“service quality” concept when it was introduced The model proposes that service

quality consist three dimensions: functional, technical and image The technicalaspect is “what” service is provided, while the functional one is “how” the service isprovided To be more specific, the technical factor is the quality the customers

actually receive as the outcome of interaction with the service firm and it is quite

crucial in their evaluation of service quality Besides, the functional dimension- how

the service/ technical outcome are delivered takes more important role in the mind

of customers In some cases, the “what” or technical quality might be difficult to

measure For example: in health-care service the technical competence cannot be

immediately evaluated, as it is depended on the results after a period of treatment

In such case of lacking the ability to assess the technical factor, the consumersnormally rely on the functional one- the process of health care delivery Similar tothe perspective from Lehtinen (1982), Gronroos also emphasized the role of image

in the experience of service quality The image is mainly built up by the technical,functional quality and other factors (word of mouth, pricing, public relations, etc)

As the customers continuously contact with the service firms, they normally bringtheir past experiences as well as the overall perceptions in each usage of newservice Therefore, the image is considered as another key component in the

perceived service quality model If the company can create the positive image in themind of customers, the minor mistakes will be forgiven However, if the mistakescontinue frequently, the image will be ruined In contrast, the service provider’s

image is negative; any occurrence of fault will seriously affect the run of business

In short, the image can be viewed as the filter in terms of a consumers’ perception

First is the Kano model In measurement, the Kano model develops thequestionnaire for all the attributes Each customer must answer two questions

relating to each characteristic: how to react when the product/ service have or do not

have this factor, then the information will be collected and classified into sixmentioned attributes Therefore, the Kano model is more appropriate for theengineers in developing the product: research to find out the necessary and expected

slements Furthermore, the weakness of this model is no direct method of ranking

the importance of the attributes to the customers

Next, the Gronroos’s model is the complete concept of service quality, includingthree dimensions: technical, functional and image Nonetheless, the application of

this model in evaluating the customer satisfaction to the quality of customer service

in a shopping center might be challenging Because the “image” factor is fairly

ambiguous: combination of technical, functional and outside elements (pricing,

public relations, etc) Therefore, it will be very difficult to measure and present the

accurate and reliable results

There are two models left for consideration- SERVQUAL and SERVPERF.Overall, the SERVQUAL scale is about the gap between the perception andexpectation While the perception is definable and measurable in straightforwardmanner, the expectation is subject to different interpretations (Dabholkar et al.,2000: Gronroos, 1990) The vagueness of the “expectation” factor does make theSERVQUAL model being criticized by other researchers Although the SERVPERF

scale is developed basing on the theoretical framework of SERVQUAL model, itshows marked improvement over the SERVQUAL Not only is the model more

efficient in reducing the items to be measured up to 50 percent, it has also been

empirically found superior to the SERVQUAL model in the assessment of servicequality This partly explained the significant support emerging over time forSERVPERF scale (Babakus and Botler, 1992; Bolton and Drew, 1991b; Boulding

et al., 1993) Furthermore, one study of comparison between two models in the

Vietnam retail hypermarket (Nguyen Huy Phong & Pham Ngoc Thuy, 2007) again

shows the superiority of SERVPERF scale To be more specific, SERVPERF willprovide a better result and its questionnaire is also shorter and more time saving for

the participants than SERVQUAL Therefore, the model chosen for this research is

the SERVPERF

1.5.2, Hypotheses

Five components of SERVPERF scale in measuring the customer service quality

and customer satisfaction are respectively: tangible, reliability, responsiveness,

assurance and empathy The hypotheses are as following:

HI: Tangible component and customer satisfaction have a positive

relationship That means the higher/lower customer evaluate tangible factor,the higher/lower level of customer satisfaction

H2: Reliability component and customer satisfaction have a positive

relationship That means the higher/lower customer evaluate reliability

factor, the higher/lower level of customer satisfaction

H3: Responsiveness component and customer satisfaction have a positive

relationship That means the higher/lower customer evaluate responsiveness

factor, the higher/lower level of customer satisfaction

H4: Assurance component and customer satisfaction have a positiverelationship That means the higher/lower customer evaluate assurance

factor, the higher/lower level of customer satisfaction

HS: Empathy component and customer satisfaction have a positiverelationship That means the higher/lower customer evaluate empathy factor,

the higher/lower level of customer satisfaction.

Kong, Indonesia, Mexico, Singapore and USA.

The opening of Parkson Saigontourist Plaza on June 29, 2005, marked the entrance

of Parkson as the leading department store in Asia and the first truly internationaldepartment store to be opened in Ho Chi Minh City

Today, Parkson has eight modern and successful department stores, 5 in Ho Chi

Minh City, 2 in Hanoi (Kaengnam & Thai Ha) and | in Hai Phong where shopperscan find more than 300 well-known international fashion brands that have neverbeen distributed in Vietnam prior to Parkson's entry These brands include Coach,

Shu Uemura, Bobbi Brown, MAC, La Mer, The Body Shop, Benefit, Christian Dior,Estée Lauder, Lancéme, Clinique, Shiseido, Gucci, Clarins, Lacoste, Guess, CKJeans, Esprit, Levis, Ecco, Geox, Addidas, Nike Favorite Vietnamese brands such

as Vera, Nino Maxx, N&M, An Phuoc can also be found at Parkson, creating a

booming retail hub right in the heart of these cities.

Parkson also highly focus on generating excitement for consumers by a number of

continuously innovated promotions throughout the year Besides promotions were reserved for holidays, Parkson also have special promotions for some exclusive

departments for various classes of customers such as Beauty Fair, Sports Days,

Office Fashion Fair and so forth.

to h9

Not only bring the latest fashion trends, Parkson also wants to give a hand of

contributing to community development along with many charity programs,

scholarships, environmental protection activities which have been taken place over

the years with huger scale of growing

With motto of "Parkson - Fashion, beauty and lifestyle", Parkson has quickly

asserted high position and professionalism in fashion, beauty and lifestyle to provide the high-end products and satisfy even the most seasoned consumers.

Parkson always brings the latest trend in fashion, beauty and lifestyle to its middleand middle upper class consumers under one roof

2.1.2 Achievements of Parkson

Thanks to non-stop effort in business, Parkson has received the trust of consumers

and continuously won the certificate of "The Most Favorite Brand" in consecutive

years from 2006 till 2010 awarded by Saigon Giai Phong Newspaper and Ho Chi

Minh City Department of Culture, Sports and Tourism In additional, Parkson also

won the title of "The Most Famous Brand In Vietnam” in 2008 according tostatistics from AC Nielsen and Vietnam Chamber of Commerce and Industry, “One

Of The Top Ten Best Shopping Destinations At Ho Chi Minh City” by local andforeign consumers’ vote, “One of The Top Ten Trade Services Award” in 2009 by

Vietnam Tourism Awards program of Vietnam National Administration of Tourismvoted

In 2009, Parkson was honored to receive the prize of “The Best Product of1000" Anniversary of Thang Long — Hanoi” by the National Office of IntellectualProperty of Vietnam, and “The Best Business Award 2009” organized by the

Ministry of Industry and Commerce

In 2011, Parkson was also honored with the award of "VietnamTravel LeadingBrand in HCMC 2010" by Department of Culture, Sports and Tourism voted

2.2 Methodology

2.2.1 Designing questionnaire

The questionnaire is designed through 3 steps:

e Establish the questionnaire basing on the literature review of SERVPERF

model and references from the similar researches, typically: SERVPERF

Analysis in Retail Banking, Dr.T.Vanniarajan et al (2007) and Assessment

of Service Quality and Customer Satisfaction at Military Bank by Minh

Nguyen Hue (2012)

e Receive the consultation from the mentors during the internship program and

the instructors about the draft of questionnaire

e Edit and complete the official questionnaire

The standard questionnaire often comprises 22 variables; however, themeasurement scale in this research is adjusted to be suitable for the customer

service of the department store Parkson Generally, the variables are still divided in

five main elements, namely: tangibles, responsiveness, assurance, reliability and

empathy

Questionnaire is designed in Vietnamese, and has two main parts Part lis thespecific questions in order to collect the information of customers’ the perceived

service quality as well as their general satisfaction to the customer service provided

by Parkson Part 2 includes the personal questions to classify the participants In this

case, they are about sex and age

Part 2 has 21 variables in total To be more specific, the number of variables to

measure the provided service quality from the perception of consumers is 19,whereas there are 2 variables to assess the general satisfaction level Thismeasurement is based on a likert 5-point rating scale, namely: 1= strongly disagree,

2= disagree, 3= neutral, 4= agree, and 5= strongly agree

e Tangible:

Employees appear fully with neat and professional uniform

The restroom is clean and under good-working condition

The rest chairs is well-organized; comfortable and polite

5% R & The factors: light, music, signboards, organize of the stores make the

customers be comfortable and convenient while shopping.

SN The decoration is beautiful and fashionable, always seasonal/ special

occasions updated

¥ There are many support services offered to make the shopping experience

easier and more convenient (ex: gift wrapping, ATM, delivery, alteration,

etc)

e Reliability:

v The transactions are conducted fast and accurately.

¥ The promotion programs are exactly conducted as the time and

information promised by Parkson.

e Responsiveness:

v The employees are ready and enthusiastic in helping the customers while

shopping

vé The employees respond the customers’ requirements as fast as possible.

¥ The employees let the customers know exactly when their inquiries are

resolved

e Assurance:

v The employees treat polite and professional.

Y The customers feel secure when shopping in Parkson, about: originality,

quality of the products; return and after-sale policy; etc.

v The employees have good professional knowledge to consult and answer

the inquiries

e Empathy:

Y The working hours are suitable and convenient for shopping.

v The employees are willing to consult and give the optimal solution for the

customers.

v¥ The employees show the appropriate caring (avoid following closely,

appear when the customers need help), create the comfort duringshopping.

¥ With the membership card, the customers receive the personal caring

(holiday, anniversary, birthday, etc).

¥ With membership card, the customers usually receive the information of

the programs, brands, promotions they are interested.

e General evaluation:

v As a customer of Parkson, I am satisfied with the quality of customer

service provided

v In the future, I will continue shopping in Parkson.

2.2.2 Sampling and collecting data

This study has 21 variables in total According to Hair et al, (1998), the sample size

should be at least 5 respondents per 1 observed variable Therefore, the study needs

to collect at the minimum sample size of 105 To achieve this number, 130questionnaires were given to the customers

Method to collect data was conducting surveys with customers who come forshopping in Parkson Thai Ha, Hanoi Although nowadays spread and collect theinformation online is quite popular, this study should apply an offline method due to

the nature of the shopping center In detail, the main purpose of customers when

coming to a department store is shopping; and simultaneously they use other

customer services to ensure comfortable shopping experience Therefore, to assess

the customer satisfaction and quality of customer service in Parkson Thai Haexactly should conduct surveys with people shopped and used the services of

Parkson Thai Ha Questionnaires were provided to customers who have free time

and be ready to answer questions It took each customer about 3-5 minutes to

answer the questionnaire Survey process was carried out from April 2IŸ 2013 to

April 30" 2013.

2.2.3 Analyzing data plan

At first, the data will be input and screened to identify missing samples Afterrejecting all invalid samples, data will be encoded as the following table.

Table 2.1: Encoded Data

The factors: light, music, signboards, organize of the

stores make the customers be comfortable and

convenient while shopping

6 — There are many support services offered to make the

shopping experience easier and more convenient (ex: gift wrapping, ATM, delivery, alteration, etc).

- RELIABILITY

7 RELIABILITY 1 The transactions are conducted fast and accurately.

Label Explanation

8 RELIABILITY 2 | The promotion programs are exactly conducted as the

time and information promised by Parkson.

RESPONSIVENESS

9 RESPONSIVENE | The employees are ready and enthusiastic in helping

SS1 the customers while shopping

——ễễ—ỀỄễễ

10 | RESPONSIVENE | The employees respond the customers’ requirements

IS as fast as possible.

II |RESPONSIVENE | The employees let the customers know exactly when

SS3 their inquiries are resolved

ASSURANCE

| 12 |ASSURANCEI The employees treat polite and professional.

¬—————— ¬ Ô,ÔỎ =—.

(13 | ASSURANCE2 The customers feel secure when shopping in Parkson,

| about: originality, quality of the products: return and

after-sale policy; etc.

14 | ASSURANCE3 The employees have good professional knowledge to

consult and answer the inquiries |

| l6 | EMPATHY2 The employees are willing to consult and give the

optimal solution for the customers.

I7 | EMPATHY3 The employees show the appropriate caring (avoid

following closely, appear when the customers need

T

Label Explanation

help), create the comfort during shopping

18 | EMPATHY4 With the membership card, the customers receive the

personal caring (holiday, anniversary, birthday, etc).

19 | EMPATHYS With membership card, the customers usually receive

the information of the programs, brands, promotions

they are interested.

L

CUSTOMER SATISFACTION

s T =————

20 SATISFACTIONI | As a customer of Parkson, | am satisfied with the

quality of customer service provided

SATISFACTION? | In the future, I will continue shopping in Parkson

e Reliability analysis by Cronbach’s alpha

Cronbach’s alpha is a common measure of internal consistency (reliability) of a test

or scale Internal consistency describes the extent to which all the items in a test

measure the same concept or construct and hence it is connected to the

inner-relatedness of the items within the test (Tavakol e¢ a/., 2011) Cronbach’s alpha ismost commonly used when researcher has multiple Likert question in a survey or

questionnaire that form a scale and the researcher wishes to determine whether the

scale is reliable (Laerd statistics)

The value of alpha (a) may be between negative infinity and 1 However, onlypositive values of alpha have meaning In general, alpha coefficient ranges in value

from 0 to 1, and the increase of this value means that the correlations between the

items increase (Amit Choudhury, 2010) Therefore, this processing data method

helps analyst assess the reliability of scale through Cronbach’s alpha coefficient A

commonly accepted internal consistency using Conbach’s alpha is as follow:

Table 2.2: Cronbach alpha values and internal consistency (George & Mallery,

As the table shows, an acceptable reliability score should be 0.7 or higher.

However, lower thresholds are sometimes used in the literature (Reynaldo et al.,

1999) In this research, scales which have Cronbach’s alpha coefficient greater than

or equal to 0.6 will be accepted Besides assessing the reliability of scales,

Cronbach’s alpha analysis also helps to check whether any item is not consistence

with the rest of the scale through item-total correlations Item-total correlation

performs the correlation of one variable with others in the same scale; the highercorrelation value, the better correlation between that item and the others Variableswhich have greater than 0.3 item-total correlations will be accepted; the otherswhich have smaller than 0.3 item-total correlations will be eliminated from analysis

data.

e Exploratory factor analysis

Exploratory factor analysis is a powerful statistical technique which is used for data

reduction and summarization The primary objectives of an exploratory factor

analysis are to determine (1) the number of common factors influencing a set of measures; (2) the strength of the relationship between each factor and each observed

measure (DeCoster, 1998)

At first, it is necessary to test the sampling adequacy of factor analysis base on

Kaiser-Meyer-Olkin (KMO) Measure In case of KMO has value between 0.5 and1.0 and Sig is smaller than 0.5, factor analysis is more appropriate factor analysis

In case of KMO has value smaller than 0.5 or Sig is greater than 0.5, it indicates

that factor analysis may not be appropriate.

By performing exploratory factor analysis, investigator can decide the number of

factors to extract in the model The Kaiser creation states that investigator shoulduse a number of factors equal to the number of the eigenvalues of the correlationmatrix that are greater than one (DeCoster, 1998) In this research, the eigenvalueswill be plot in descending order, then the number of factor will equal to the number

of eigenvalues that occur prior and have greater than 1.0 values

An important part in exploratory factor analysis is interpreting factor matrixes This

research will use Varimax rotation process to produce multiple group factors Factorloadings which indicate correlations between the variables and the factors are

required to have greater than 0.5 values Then, a factor can be interpreted in terms

of the variables that have high load on it.

e Regression analysis

Regression analysis is a modeling technique for analyzing the relationship between

a real-valued dependent variable Y and one or more independent variables X, X%¿,

X: X, (Ragsdale, 2007) The goal in regression analysis is to identify a function

that describes the relationship between these variables as closely as possible so that

we can assess the impact of each independent variable on dependent variable as

well as predict the change in dependent variable when there is any change inindependent variables