studying customer satisfaction’s impact on customer loyalty and shirt repeating purchase behavior of urban customers in vietnam under the influence of involvement and fashion style

To discover more deeply the impact of satisfaction on loyalty and repurchase behavior, the author studies this impact under the moderation of involvement and fashion style.. Despite exte

Ministry of Education and Training

NATIONAL ECONOMICS UNIVERSITY

NATIONAL ECONOMICS UNIVERSITY

PHAM VAN TUAN

STUTYing CUSTOMER SATISFACTION’S IMPACT ON

CUSTOMER LOYALTY AND SHIRT REPeating Purchase

OF URBAN CUSTOMERS IN VIET NAM UNDER THE INFLUENCE

OF INVOLVEMENT AND FASHION STYLE

M

MAJOR: : : : BUSINESS ADMINISTRATIONBUSINESS ADMINISTRATIONBUSINESS ADMINISTRATION (marketing)(marketing)(marketing)

CODE CODE: : : : 6234623462340000111100002222

SUMMARY OF DOCTORAL THESIS

HA NOI, 2014

THE THESIS IS COMPLETED IN:

NATIONAL ECONOMICS UNIVERSITY NATIONAL ECONOMICS UNIVERSITY

Supervisors:

2 dR NGUYEN NGOC QUANG

Reviewer 1:

Reviewer2:

Reviewer3:

dR §µO TïNG

The thesis will be protected against National termination Council at National Economics University in Hanoi

On…….h……date…….month……year 2014

The thesis can be found at

1 National Library

2 National Economics University’s Library

CHAPTER 1 INTRODUCTION

1.1 Introduction of thesis

Satisfaction, loyalty and repurchase behavior are among the most basic

concepts, but always appear to be complex and not well understood in

marketing science Particularly, these concepts will need deeper investigation

and clarification in specific situations and study contexts This thesis, in

addition to directly reaching those concepts as mentioned above, mainly does

not study the concepts singly, independently and discretely, but focuses on the

impact of satisfaction on loyalty and repurchase behavior

This relationship is put in the context of Vietnam urban customers and

one typical product of fashionable shirt Moreover, this research of the

relationship is continuously and deeply discovered under the impact of two

adjustment variables (factors) of involvement and fashion style That is the

official way in which the thesis will be developed

1.2 Rationale

Customer loyalty appears to be concerned by many managers as well as

makerters Frederick J.Reichheld and W Earl Sasser stated that the

maintenance of high number of loyal customers would make more profit for the

enterprise, including: (1) Profit from high price strategy, (2) Profit from new

customer introduced through Word of Mouth; (3) Profit from marketing and

advertising cost reducing; (4) Profit from increasing product using/purchasing

number and frequency That’s why in recent decades, there have been a lot of

researchers investigating in both theory and practice to find effective methods

to build and retain customer loyalty

To make customers satisfied is one of the most important missions that

marketing managers have to do However, that’s just the first step The core

thing that firms concern is the satisfaction level that makes customers become

loyal and the loyalty level that makes customers have repurchase behavior

To discover more deeply the impact of satisfaction on loyalty and

repurchase behavior, the author studies this impact under the moderation of

involvement and fashion style Despite extensive researches that have built

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many impact evaluation models of satisfaction on loyalty and repurchase behavior in the world, it’s totally new in Vietnam, particularly when it is measured under the moderation of involvement and fashion style In addition, when it is done related to fashionable shirt, this is a totally new topic

With this purpose, the author chose the topic:” Investigating the impact of satisfaction on loyalty and repurchase behavior for shirt of Vietnamese urban customers under the impact of involvement and fashion style”

1.2 Research objectives, questions and missions

1.2.1 Research objectives

This thesis focuses on evaluating, testing the impact of satisfaction on loyalty and repurchase behavior for shirt of Vietnam urban customers, under the impact of involvement and fashion style Based on the results, this thesis gives some recommendations to enterprises producing and dealing in fashionable shirts to increase satisfaction, retain loyalty towards repurchase behavior

1.2.2 Research questions

With these above-mentioned objectives, this thesis follows these questions:

- How does satisfaction affect the expressions of loyalty and repurchase behavior?

- Which expression of loyalty (commitment, trust, word of mouth) has the strongest impact on repurchase behavior?

- Moderating variables: How do involvement and fashion styles affect the impact of satisfaction on loyalty and repurchase behavior?

1.2.3 Research missions

- Overviewing domestic and international research results about impact of satisfaction on loyalty and repurchase behavior under the moderation of involvement and fashion style

- Building model test and hypotheses

1.3 Research object and scope

- Research object The impact of Satisfaction on loyalty and repurchase behavior for shirt under the moderation of involvement and fashion style

- Research scope

Urban Customers in 2 cities: Hanoi (North) and Ho Chi Minh city (South)

1.4 Research methodology

- Secondary data: applying those methods: (1) Collecting statistical and

analytical data; (2) Analyzing and collecting theories; (3) Classifying and

systematizing theories; (4) Modelling; (5) Scientific thinking in interpretation

and inductive perspectives

- Qualitative data: Manual process (collecting ideas, counting the

frequency of important words, noting important questions, etc.)

- Quantitative data: Dealing by the method of EFA and CFA statistics and

analysis Using the method of liner structure analysis (SEM) to test the

suitability of the model and hypotheses with SPSS, AMOS version 18.0

software

1.5 New contributions

- Build the researching model on the impact of satisfaction on loyalty and

repurchase behavior under the moderation of involvement and fashion style, for

shirt in Vietnam

- Discover the impact of satisfaction on loyalty expressions (commitment,

trust, word of mouth) and impact of those expressions on repurchase behavior

- Study deeply two moderating variables: (1) Fashion style for market

segmentation and (2) Involvement to consider its domination over the impact of

satisfaction on loyalty and repurchase behavior

- Especially, investigate involvement in two aspects: Ego involvement

and Purchase involvement

- Which loyalty expression (commitment, trust, word of mouth) has the

strongest impact on repurchase behavior? Enterprises will focus their marketing

resources on that expression

- Recommend, add more basis on market segmentation and positioning

for enterprises dealing in shirts stemming from the behavior characteristics of

customer groups with different fashionable styles in the business context of

Vietnam

4

- Recommend suitable strategy orientation and propose suitable marketing solutions for enterprises dealing in fashionable shirts to increase satisfaction, maintain loyalty towards repurchase behavior

1.6 Layout

This thesis is divided into 5 chapters with the following contents:

Introduction, thesis overview, research methodology, research result, conclusion and recommendation with 150 pages including 50 tables and 29 figures

CHAPTER 2: STUDY OVERVIEW 2.1 Theoretical Background and Study Overview

Satisfaction is a multi-dimensional concept and is recognized under different aspects, including: satisfaction with the product itself, satisfaction with the sales process and satisfaction with after sales service

Brown (1992), Jamal and Kamal (2002) [69], (Oliver, 1996 [102]; E.W.Anderson, Fornell &Lehmann, 1994 [48]; E.W.Anderson & Mittal 2000 [44]) all had a conclusion: Customer satisfaction is an emotional status in which customer demand, expectation and hope about product values/benefits are lower, higher or equal to customer expectation Satisfaction is indicated to be the antecedent of loyalty and repurchase behavior for the company’s product

2.1.2 Loyalty

2.1.2.1 Theory and model

Satisfaction is a multi-dimensional concept with different and complex expressions The concept of satisfaction has been defined differently by researchers (Gretty and Thompson, [1994], Dick and Basu (1990), etc.) Overall, according to them, brand loyalty is a deep commitment leading to stable repurchase behavior for n interested service/product in the future despite different situation factors, such as marketing activities

Common models relating to satisfaction includes: model of Gounaris and Stathakopoulos (2004) [56], model of Ki-Joon Back and Sara C.Parks [73]

which argued that customers had attitudinal loyalty first, then emotional loyalty,

intention and behavioral loyalty

A number of researchers (Raruyen and Miller, 2007 [127]; Dick & Basu,

1994 [40]) accessed customer loyalty with concepts of Behavioral loyalty,

Attitudinal loyalty and composite loyalty

2.1.2.2 Loyalty expressions

Commitment

Some ideas on commitment are given by a number of researchers

(Morgan & Hunt, 1994; Miller (2007), Abdelmajid Amine (1998), Burmkrant

and Unnava (2000)) Accordingly, commitment could be identified as a

motivation to stay with a partner and willing to lose an amount of profit The

above-mentioned researchers all believed that commitment was an aspect of

loyalty

Trust

Trust is considered to be one of the critical factors for a successful

relationship between parties and an expression of loyalty Chaudhuri and

Holbrook (2001) 31], Rauyreuen (2007) [127] defined trust as the trust in a

party’s word or promise and that the party will fulfill his or her obligation in an

exchange relationship

Word of month

Word of mouth (WOM) refers to passing information orally about

consumer personal experiences with a product or service from individual to

individual WOM plays an important part in shaping consumers’ behaviors and

attitude, and forming loyalty Butcher et al (2001) indicated four variations of

customer advocacy concept: Providing positive word-of-mouth, recommending

the product/service to others, encouraging others to use the project, defending

the product provider’s virtues

2.1.3 Repurchase behavior

Some researchers assert that repurchase behavior is an expression of

loyalty (behavioral loyalty) However, in this thesis, the author will investigate

repurchase behavior as a specific concept led from loyalty

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2.2 Impact of satisfaction on loyalty and repurchase behavior

2.2.1 Impact of satisfaction on loyalty

Ruben Chumpitaz Caceres and Nicholas G Paparoidamis (European Marketing Magazine, No 41, 2007) [116] testing the impact of satisfaction on commitment and loyalty stated that: Higher customer satisfaction level for a product/servicewould generate higher commitment and trust level for that product/service Morgan and Hunt (1994) [94], Leon G.Schiffma, Leslie Lazar Kanuh & Joseph [135], Gour C.Saha and Theingi [57] shared the same opinion Overall, in the context of shirt consumption, this thesis assumes that satisfaction positively affects WOM, commitment and trust

2.2.2 Impact of loyalty on repurchase behavior

This thesis discovers loyalty and repurchase behavior as two specific concepts with 5 reasons: Customer attitude, customer inertia, demand change, multibrand loyalty and situational society factor

Based on studies of Beth Davis-Sramek, John T.Mentzer and Theodore P.Stank [24] of Lousville and Tennessee University, US (operational management magazine, No 26-2008; Wetzels et al (1998) [133]; Norizan Kassim and Nor Asiah Abdullah [99], the author indicated that: loyalty expressions including commitment, trust, wom affect repurchase behavior

2.2.3 Impact of satisfaction on repurchase behavior

In 1969, Howard & Sheth [67], Taylor and Baker (1994) [130]; Olsen (2002) [117] argued that satisfaction had an impact on repurchase behavior although these were not enough consistent evidences about this

2.3 Fashion market and the impact of satisfaction on loyalty and repurchase behavior under the influence of fashion style

2.3.1 Fashion, fashion market in Vietnam

In this part, the author describes the fashion market in Vietnam Fashion style has strong influence on customer behavior so the author chose the shirt market to conduct research in Vietnam

2.3.2 Impact of satisfaction on loyalty and repurchase behavior under the impact of fashion style

 Fashion style

Fashion style is used as a criterion on customer segmentation in many

previous studies such as studies of Shim and Bickle (1994) [123]; Sofiah Abd

Rahman; Abdul Rahman Abdul Rahim, 2006 [126], etc

The author has successfully applied the research work of Rafaeli, Dutton,

Harquail and Mackie-Lewis- 1997 Accordingly, the thesis will study the

impact of satisfaction on loyalty and repurchase behavior of 4 groups of

customers: Customer group choosing their clothes based on their individual

perspective on job title; Customer group whose emotion determines their

decisions on clothes choosing; Customer group using clothes as a tool to build

social relations and other customers group

Accordingly: The impact of satisfaction on loyalty and repurchase

behavior will be different among customer groups with different fashion styles

2.4 Impact of satisfaction on loyalty and repurchase behavior under the

impact of involvement

2.4.1 Opinions on involvement

The term “involvement” is translated into Vietnamese as the following

concepts: “sự tham gia”, “sự lôi cuốn”, “sự can dự”, “sự dính líu”, etc In this

thesis, the author will use the expression “sự dính líu” to ensure the suitability

with the research object of the thesis

Almost all of previous studies consider involvement as a

multi-dimensional construct Some first researchers in this field are Lastovicka and

Gardner (1979) [84], Traylor and Joseph (1984) [132], (Rothschild, 1979)

[115], Hupfer và Gardner, 1971 [68]; Manuel (2009) divided involvement into

two types: ego involvement (long-term) and purchase involvement (situational)

Accordingly, ego involvement is customer individual impact due to

individual experience, familiarity and professional towards the purchase and

consumption of products/services obtained from time to time Purchase

involvement is a situational involvement attached with environmental stimulus

during the process of approving customer purchase decisions There are many

different attitudes on explaining the nature and structure of involvement, in this

thesis, the author agrees with the structure of involvement proposed by

researcher Manuel (2009), which means that involvement includes: ego

8

involvement and purchase involvement At the same time, the author will use involvement as a moderating variable in the impact of satisfaction on loyalty and repurchase behavior

From that, the study assumes: Ego involvement and purchase involvement affect the impact of satisfaction on loyalty (commitment, trust, word of mouth) and repurchase behavior

2.5 Model and research hypotheses

2.5.1 Model

From overall research, the author proposes the research model presented in the thesis as follows:

Figure 2.12 Research model

H9a

H9b

H13a H13b

H14a H14b

H10a H10b

H8a H8b

H2

H3

H1

H12a H12b

H11a H11b

H5

H7

H4

H6

Commitment (2a)

Trust (2b)

Word of mouth (2c)

Loyalty (2)

Involvement (ego and purchase) and fashion style (4)

Repurchase behavior (3)

Satisfaction (1)

Involvement (ego and purchase) and fashion style (4)

2.5.2 Research hypotheses

The research model has the variables considered under different impacts:

 In studying the impact of satisfaction on loyalty:

- Independent variable: satisfaction

 In studying the impact of loyalty on repurchase behavior:

- Dependent variable: repurchase behavior

 In studying the impact of satisfaction on repurchase behavior:

- Independent variable: satisfaction

- Dependent variable: repurchase behavior

• Moderating variables

1 Ego involvement

2 Purchase involvement

3 Fashion style

Hypothesis groups

Hypothesis group studying the impact of satisfaction on loyalty and

repurchase behavior from H1 to H7

Hypothesis group related to the moderating variable of involvement

from H8 to H14

Hypothesis group related to the moderating variable of fashion style: H15

CHAPTER 3: RESEARCH METHODOLOGY 3.1 Overview of research methodology and process

3.1.1 Data collection and analysis

• Secondary data collection and analysis

Collecting, analyzing, comparing and evaluating some studies on the

impact of satisfaction on loyalty and repurchase behavior under the impact of

moderating variables of involvement and fashion style of customers from

available domestic and international sources on the contents related to the

research

• Qualitative method (in-depth interview)

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Interviewing marketing experts and fashion experts in Vietnam to preliminarily evaluate and adjust the scales used for research in the thesis

• Quantitative method Collecting primary data, analyzing primary data by SPSS software, analyzing EFA exploration factor Continuing using AMOS 18.0 software to analyze CFA confirmation factor to test the model and test the research hypotheses

3.1.2 Research process

To ensure the implementation of research objectives, the thesis will be developed and deployed under the following research process:

Figure 3.1: Research process

3.1.3 Research plan

From the above mentioned research process, the research plan will be implemented following an order of time and represented in the following table:

Theoretical background

Final research N=

1000

EFA

Cronbach’s Alpha Quantitative

preliminary research

N = 200

Amendment, supplement

In-depth interviews with experts, focus group

CFA SEM

Drafting scale 1

Final scale

Drafting scale 2

Removing observation variables with small Alpha coefficient and relation coefficent Removing observation variables with small EFA Checking extracted variance

Removing variables with small CFA; Checking the suitability of the model; Calculating the general reliability coefficient, Calculating extracted variance Checking the suitability of the model Testing the hypotheses

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Table 3.1: Research plan

interview with experts

Focus group

01/11-15/11/2013

Hanoi

Quantitative (N=200)

Direct

Hanoi

(N=1000)

Direct

Hanoi, Ho

City According to the plan, quantitative research will be organized in the 2

biggest cities in Vietnam: Hanoi and Ho Chi Minh City To ensure the fairness

and objectiveness of the research, the author will conduct the research with the

similar number of samples in two cities The interviews are also organized in

some areas with many urban citizens with the total of 29 urban districts of two

cities For each district, the author lists the areas suitable for the criteria on

selecting research samples of the thesis

3.2 Designing preliminary research and developing scale

3.2.1 Qualitative preliminary research

Qualitative preliminary research is to supplement and amend observation

variables used to measure the research concepts used in the theoretical model

suitable for the context of Vietnamese market

For the scale of involvement, the results of interviewing experts add two

more observation variables into the original scale Specifically, they are SDL_4

(The brand of my shirt helps to show my job position) and SDL_5 (I choose

shirt brands which can help me build and maintain my own image) When

developing the scale on ego involvement, the researchers state that in

Vietnamese market in particular, with the characteristic of formality respect,

with clear division among different job positions, fashionable shirts used in the

workplace can help their owners represent their job positions as well as their

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image Besides, Vietnamese people always pay much attention to clothes at the first meeting to create good impression for partners

The experts also agree with the decision of applying the research work of the postgraduates including professionals and students in Michigan and Virginia university in US ((Rafaeli, Dutton, Harquail and Mackie-Lewis- 1997) [111]) on the behavior of consuming and choosing business attire Accordingly, the thesis will study 3 customer groups with different fashion styles at Vietnamese market, as well as add 01 selection option as “other customers group” to ensure the tightness of the answers

In addition to interviewing the experts, the author also interviewing focus groups to adjust the language used in observation variables suitable and well understood for interviewees

3.2.2 Quantitative preliminary research

Quantitative preliminary research was implemented from November 20,

2013 to December 8, 2013 in Hanoi by the method of convenience sampling (N=146)

As mentioned in chapter 2, there are 6 concepts studied in this thesis including: (1) satisfaction or STM with the measurement criteria from STM_1

to STM_8, (2) commitment or CK with the measurement criteria from CK_1 to CK_14, (3) Trust or TT with the measurement criteria from TT_1 to TT_4, (4) Work of mouth or TM with the measurement criteria from TM_1 to TM_4, (5) Repurchase behavior or MLL with the measurement criteria from MLL_1 to MLL_7, (6) Involvement or SDL with the measurement criteria from SDL_1 to SDL_11

The following table summarizes the steps on developing and evaluating the scales of the final research model When evaluating the scales, the author uses the standards of Hair and ctg Accordingly, the scales are considered to be fully reliable when Cronbach Alpha coefficient reaches ≥0.6 and extracted variance is more than 50%, and the Factor Loading must be more than 0.3

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Table 3.2: Summarizing the results on preliminarily developing and

evaluating the scales

2nd evaluation result (after removing some observation variables)

Satisfaction

(STM)

removing the following observation variables:

STM_3; STM_4;

STM_6

Pass

Commitment

(CK)

removing the following observation variables:

CK_3, CK_4, CK_5, CK_7, CK_9, CK_11, CK12

Put into official research

removing the following observation variables:

TT_1

Put into official research

Word of

mouth (TM)

Ego

involvement

(SDL)

removing the following

Put into official research

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2nd evaluation result (after removing some observation variables) observation variables:

SDL_ 5 Purchase

involvement (SDL)

removing the following observation variables:

SDL_ 9

Put into official research

Repurchase behavior (MLL)

3.3 Official research

After implementing quantitative preliminary research, building and evaluating the scales, the author will implement official quantitative research with full sacles built at the previous step

3.3.1 Sampling method

Research object: all Vietnamese consumers over 18 years old; living and working in Hanoi and Ho Chi Minh City;

There are many different attitudes on identifying sample size However, the thesis uses the principle of Hair and ctg [6] which asserts that each measurement variable needs at least 5 observations The thesis uses the method

of factor analysis together with linear regression, the research model has 31 measurement variables Therefore, the minimum sample size is 155 elements The identification of sample size depends on research scope (Hanoi with 10 districts and Ho Chi Minh City with 19 districts); Population rate over 18 years old in the whole research; Population rate of district to be surveyed as compared

to those of 29 districts to be studied

Therefore, the sample size is identified to include 1000 elements, the

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sample scope for research is 7 times bigger than the required sample size as

mentioned above The author hopes that this will be an optimal sample scope to

obtain a relatively accurate description

3.3.2 Describing research sample

Table 3.26: Describing research sample (N=615)

Age

Qualification

Current

main job

Job position

CHAPTER 4: RESEARCH RESULTS 4.1 Testing the scales by the method of confirming factor analysis (CFA)

4.1.1 Testing standards following CFA method

The standards used to check the suitability of the model: CMIN/df <5

(Kettinger and Lee 1995[81]); GFI, TLI, CFI ≥ 0.9 (Bentler & Bonett,

16

1990)[23]; RMSEA ≤ 0.08 The standards evaluate the suitability of the model based on the aspects of content value including: The credibility of the scales; Being unidirectional/monad; Converge value; Difference value

4.1.2 CFA testing results

The indicators at the above mentioned table all show that the scales are suitable with market data However, the observation variables MLL_4, MLL_5, MLL_6, MLL_7 are all negative and lower than 0.5 Therefore, those observation variables will be removed from the research model to ensure the coverage value of the scales as well as of the research model

The following table 4.1 will summarize the results on retesting the general reliability coefficient and extracted variance of each scale after removing those observation variables of MLL scale

Table 4.1: Summarizing reliability and total extracted variance

Number of observation variables

General reliability coefficient

of Cronbach Alpha)

Total extracted variance

Conclusion

All scales are reliable

5

Repurchase behavior (MLL)

3

7

Purchase involvement (PUR)

5

17

4.2 Testing research model and hypotheses

4.2.1 Testing research model

Figure 4.5 Analysis results (SEM) of research model (without the impact

of moderating variables)

The research model has the following coefficients Chi-square/df= 3.746;

GFI= 0.900; TLI= 0.923; CFI= 0.934; RMSEA= 0.067, showing that the model

is suitable for market data The result on model analysis will be represented in

details in the following table 4.3:

Table 4.3: The result of model testing without the impact

of moderating variables

Estimation

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In the table: Estimate: average estimated value; SE: standard error, CR:

critical value; P: value level, ***: p < 0.001

4.2.2.1 Testing H1 to H7

With P ≤ 0.05, the impact weighting has statistical meaning In fact, the estimation result shown in Table 4.3 represents that **** or P<0.0001 and positive weighting Satisfaction has positive effect to engage, trust, word of mouth and repurchase behavior at the same time engage, trust, word of mouth has effect on repurchase behavior

The model test results in table 4.3 show that: (1) satisfaction has positive effect on engagement, trust, word of mouth of customer with brand 1.196; 1.043; 1.309 respectively (2) Engagement, trust, word of mouth have effect on repurchase behavior 0.240; 0.170; 0.36 respectively; (3) satisfaction has effect

on repurchase behavior of the brand: 0.33 As a result, hypotheses from H1 to H7 in the situation of ready-made shirt are accepted

4.1.1.1 Testing H8 to H14

H8 to H14 defines effect of ego involvement and involvement from buying process on satisfaction, loyalty and repurchase behavior This research use regression techniques of SPSS 18.0

Table 4.4: Regression result to test H8a, H9a, H10a

Model

Commitment (CK) Trust (TT) Word of mouth (TM) Regression weighting

P value

Regression weighting

P value

Regression weighting

P value Unstan

dardize

d

Differen

t from standard

Standardiz

ed

Unstandardi zed

Different from standard

Standardiz

ed

Unstanda rdized

Differe

nt from standar

d

Standardiz

ed

Constant 1.048 127 000 2.625 149 000 243 144 001 Satisfacti

on .565 .027 .627 .000 .310 .041 .330 .000 .614 .031 .603 .000 STM*E

GO .035 .006 .166 .000 .023 .010 .100 .023 .048 .007 .201 .000

Dependent variables: Commitment/Trust/Word of mouth (respectively) The table above is summarized from Appendix 4.19 – 4.21 in Appendix 4 The relationship between satisfaction and ego involvement has statistical meaning (P < 0,05) This result shows that H1 is accepted, Ho is rejected or