FACTORS AFFECTING CUSTOMER LOYALTYIN THE VIETNAMESE TELECOMMUNICATION MARKET

customers of Telecommunication service organizations in Viet Nam beside factorsin original ACSI/ECSI model as: image, expectation, perceived value, satisfaction,complaint….Moreover autho

I consider it an honor to work with Dr Nguyen Thi Nguyet Que whoseencouragement, guidance and support from the initial to the final level enabled me

to develop an understanding of the subject

It is a pleasure to thank my colleagues who brought sincere help during thecompletion of the study

I owe my deepest gratitude to my family and friends who inspired me my finaleffort to accomplish this dissertation

either does not use language, ideas, or other original material from anyone; or hasnot been previously submitted to any other educational and research programs orinstitutions I fully understand that any writings in this thesis contradicted to theabove statement will automatically lead to the rejection from the MBA program atInternational School of Business University of Economics, HCMC

COPYRIGHT STATEMENT

without the author’s prior consent.

© Luong Dang Khoa / ISB-MBUS/2010-2012

customers of Telecommunication service organizations in Viet Nam beside factors

in original ACSI/ECSI model as: image, expectation, perceived value, satisfaction,complaint….Moreover author also considers the direct relationship betweenperceived service quality and customer loyalty instead of through customersatisfaction as the original ACSI and ECSI

Finding: This study finds out that beside factors in original ACSI-ECSI models,

service customization and communication also have positive affection to customerloyalty Beside that a direct and significant relationship between Perceived ServiceQuality and Customer loyalty is also recognized

Design: This research has based on ACSI/ECSI model and ECSI extended models

to measure Perceived Service Quality, Customization, Communication andCustomer loyalty 200 questionnaires will be issued to collect data

Limitations and implication: this study has its limitations in terms its scope

which focused only Telecommunication organizations in Viet Nam Beside thatmany factors that can affect customer loyalty such as: switching cost, economiccost, transaction cost, call center, in-different services, price perception andinertia… are not mentioned in this study For business owner or directors oforganizations, this study can help how to create Customer loyalty in theirorganizations This study is also helpful for researchers to extend its scope to otherbusiness field and other geographic areas outside VietNam

Keywords: Customer loyalty, Perceived Service Quality, Service Customization,

Communication

1.1 Research background 1

1.2 Research objectives 3

1.3 Scope of this research 3

1.4 Research method 4

1.5 Research structure 4

Chapter 2: LITERATURE REVIEW 6

2.1 Introduction 6

2.2 Literature review 6

2.2.1 Customer loyalty 6

2.2.2 Perceived service quality 7

2.2.3 Service customization 9

2.2.4 Communication 11

2.3 Model and Hypotheses 12

2.4 Summary 12

Chapter 3: RESEARCH METHODOLOGY 13

3.1 Introduction: 13

3.2 Research process 13

3.3 Operationalization of measurement scales 14

3.4 Questionnaire Design 17

3.5 Pilot study 17

3.6 Main survey 22

3.6.1 Target population 22

3.6.2 Sample size 22

3.6.3 Sampling method 23

3.6.4 Questionnaire administration 23

3.7 Methodology of data analysis 24

4.2 Data cleaning 25

4.3 Sample description 26

4.4 Reliability test 27

4.4.1 Customization 27

4.4.2 Perceived Service quality: 29

4.4.3 Communication 30

4.4.4 Customer loyalty 31

4.5 Factor analysis 32

4.6 Correlation and Regression 38

4.6.1 Correlation 38

4.6.2 Regression assumption testing 39

4.6.3 Regression analysis 39

4.7 Summary 44

Chapter 5: CONCLUSIONS AND IMPLICATIONS 45

5.1 Introduction 45

5.2 Findings and contributions 45

5.3 Limitations and recommendations for future research 47

Table 3: Results of Cronbach’s alpha for dimension Perceived Service Quality(pilot test):

Table 4: Results of Cronbach’s alpha for dimension Communication (pilot test): Table 5: Results of Cronbach’s alpha for dimension Loyalty (pilot test):

Table 6: Characteristics Of Respondents

Table 7: Results of Cronbach’s alpha for dimension Customization (main survey):Table 8: Results of Cronbach’s alpha for dimension Perceived Service Quality(main survey): :

Table 9: Results of Cronbach’s alpha for dimension Communication (mainsurvey):

Table 10: Results of Cronbach’s alpha for dimension Customer loyalty (mainsurvey):

Table 11: Results of EFA testing (1st)

Table 12: Results of EFA testing (2nd )

Table 13: New Factors

Table 14: Results of Cronbach’s alpha for new dimension Communication:

Table 15: Results of Cronbach’s alpha for new dimension LOYALTY:

Table 16: Model summary (MLR)

Chapter 1: INRODUCTION 1.1 Research background

As many researchers have conducted, customer loyalty is one of the mostimportant thing in business nowadays, and that it is more profitable to retaincustomers than to acquire new ones (John, Katherine & Libai, 2003; Liz Lee-Kelley, Gilbert & Mannicom, 2003), so how to retain customers is one of the key

of success of organizations, and especially in telecommunication business in VietNam where the market almost nearly saturated (P.V, 2012) so customer loyalty isbecoming competitive advantages for organizations to compete, develop andsurvive on this market On over the world many models are used to measurecustomer loyalty such as: Servqual, Servperf, ACSI, ECSI…

Telecommunication market in VietNam is now ready for matured with 3 biggestsuppliers: Viettel, MobilePhone, Vinaphone that got more than 95% market share(P.V., 2012) and other smaller suppliers: S-Phone, VietNam Mobile, Beeline(now is called G-mobile) Telecommunication market is now becoming the gameplay of big 3 Viettel, Mobifone and Vinaphone There are few differences inVietnamese telecommunication market between now and 3-5 years ago In the pasthow to attract new customers is the most important thing to service providers,service providers are always try to attract new customers as much as possible, but

at this time this strategy is not the most important one, and in long-term how toretain customers is much more important than attracting new customers So beside

of attracting new customers, how to make customers retain to service providers areconsidered carefully and become the critical factors for service providers tosurvive and develop in this market, so research on customer loyalty and itsantecedents such as perceived service quality and other factors can be a veryimportance for service providers (Santouridis & Trivellas, 2010, p.332) Fewresearchers have also researched for customer satisfaction and perceived servicequality in VietNamese Telecommunication market and most of them based on

original models such as: Servqual (Parasuraman, Zeithaml & Berry, 1988),Servperf (Cronin & Taylor, 1992&1994), and non of them explain directlycustomer loyalty On the world there are many models can explain directlycustomer loyalty such as ACSI (American Customer Satisfaction Index)/ ECSI(European Customer Satisfaction Index) and they are adapted bytelecommunication industry in many countries

The ACSI/ECSI model is considered well-established tool (Gronholdt, Kristensen,

& Martensen, 2000; Cassel & Jan, 2001; Vilares &Pedro, 2003), many researchers

on the world are based on ACSI/ECSI to measure customer satisfaction andcustomer loyalty, and ACSI/ECSI is really an effective instrument to measurethem This tool is adapted by American and almost European countries and inmany industries (insurance, telecommunication phones, fixed phones, carbonatedsoft drinks, public transportation, retail banking, cable TV, supermarkets, postalservices, food products, and public service) Pedro, Jörg Henseler (2012).Moreover it is also adapted by many countries and many industries in Asia such asIran (Kaveh, Seyed & Ghaedi,2012), Singapore (Yew-Wing & Bellman,2008),Korea –KCSI (Chun-Seon, Soung-Hie, & Joon-Young,2006)

ACSI/ECSI indeed is an effective tool but nowadays there are much more factorsthan the original model can affect customer loyalty These factors exist in manyresearches such as service customization (Pedro, Jörg Henseler,2012) andcommunication (Ball, Pedro & Machas,2003) These factors have a significantaffect to customer loyalty in many industries on over the world This researchfocuses on customer loyalty of telecommunication service business in Viet Nam,and is also based on ACSI (American Customer Satisfaction Index)/ ECSI(European Customer Satisfaction Index) model and partly from modified orextension ECSI model from Pedro & Jörg Henseler (2012) and Ball, Pedro &Machas (2012) In Viet Nam where businesses are still affected by relationshipand empathy, these new factors (service customization and communication) can

have a significant impact on customer loyalty so they should be checkedempirically in Vietnamese telecommunication market and managers of thesetelecommunication organizations can use this result as a reference for strategies toincrease customer loyalty

More than that in Viet Nam where perceived service quality fromtelecommunication organizations is still a problem and perceived service quality isone of the most important antecedents and predictors of customer loyalty(Santouridis & Trivellas,2010; Hyung, 2010) but in ACSI/ECSI models, customerloyalty is measured mainly by customer satisfaction and corporation image (Ball,Pedro & Machas,2003, p 1273), it does not exist in the relationship betweenperceived service quality and customer loyalty This relationship also should bechecked empirically in Vietnamese telecommunication industry

1.2 Research objectives

Based on background and problems above, objectives of this research are:

- Identify the impact of newly developed factors that did not exist in originalACSI/ECSI model such as : service customization and communication oncustomer loyalty

- Identify the directly impact of perceived service quality on customer loyaltybased on ACSI/ECSI model

- To recommend strategies for VietNamese telecommunication organizations

in increasing their customer loyalty

1.3 Scope of this research

This research focuses on customers that are using telecommunication services inViet Nam, respondents are customers who are using telecommunication serviceproviders from operators such as: Mobifone, Vinaphone, Viettel

be tested in this research

Chapter 3: Research method: This chapter present research conceptualframework, measurement instrument, method of data collection and method ofdata analysis

Chapter 4: Data analysis and results: This chapter will show the results ofquestionnaire survey

Chapter 5: Conclusion and implications Based on results of research, this chapterwill explain how marketers and managers in telecommunication market can apply

to increase customer loyalty moreover this chapter will present scopes and alsolimitations of this research and imply how to apply this research correctly alsohow to develop this research further

Chapter 2: LITERATURE REVIEW

2.1 Introduction

This chapter reviews theories and provide some studies about variables used inthis research such as: customer loyalty, perceived service quality, servicecustomization and communication This chapter also proposes hypotheses andmodel that will be tested in this study

2.2 Literature review

2.2.1 Customer loyalty

Customer loyalty topic has been measured by practitioners many years ago andconcept of loyalty construct has evolved and developed over years Caruana(2002) Customer loyalty can be described as repurchasing service, cognitionabout service and attitude about service, that mean customers will repurchaseservices from providers if they need their services, moreover with attitude aboutservices, they will use “word of mouth” to recommend these services to othercustomers, and with cognition about these services, customers will have a affectiveloyalty about services, some bias will exist As stated by Gremler & Stephen.(1996, p.173) “The degree to which a customer exhibits repeats purchasingbehaviors from service provider, possesses a positive attitudinal disposition towardthe provider, and consider using only this provider when needs for this serviceexist”

Czepiel & Gilmore (1987, as cited in Lee & Cunningham, 2001, p.116) definescustomer loyalty is an attitude of customers in continuing exchange relationshipwith service provider based on experience of these customers One anotherdefinition about customer loyalty is the intentions of customers re-use servicesfrom their current service provider based on past experiences in using services andtheir expectations about future services Lee & Cunningham (2001, p.116)

2.2.2 Perceived service quality

According to ACSI, ECSI model, perceived service quality is the evaluationbetween served market and recent consumption experience (Fornell, Johnson,Anderson, Cha & Bryant, 1996, p.9) and model of perceived service qualityinclude two parts, one is quality of services or products offered according tocustomers perception and one is belong to service featured like: after sale services,guarantees, documentation, … sometimes these 2 parts are called “hardwarequality” and “software” quality (Marie-Paule, Anne de la Foye, Carole &Michel,2000, p.362)

Another definition , perceived service quality is the result from the comparison ofcustomers between perception about the services they have used and theirexpectations of customer about these service Caruana (2002, p.813), or stated byParasuraman,Zeithaml & Berry (1988, as cited in Saif, 2012, p.69) “perceivedservice quality is defined as consumers’ judgment about a business’s overalldistinction or dominance”, and perceived service quality is used to measure theextent of services provided in comparison with customers expectations (Angelova

& Zekiri, 2011, p.245)

The same definition is defined by Jiang & Wang’s study (2006, as cited in Saif,

2012, p.69) “perceived service quality is the consumer’s evaluation of the serviceperformance received and how it compared with their expectation” and

“evaluations are not based on service attributes; rather these depend on acustomer’s feelings or memory” Saif (2012, p.69) stated So perceived servicequality can be define as how customers evaluate and experience firm’s service,and perceived service quality is therefore viewed as “the degree and direction ofdiscrepancy between consumers’ perceptions and expectations” Parasuraman,Zeithaml & Berry(1988, p.1) stated Perceived service quality is also formulated

by Saif (2012, p.70): “Perceived Service Quality = Service Perception – ServiceExpectation”

In original ACSI and ECSI model, there is no relationship between perceivedservice quality and customer loyalty, this exists a mediator role of customersatisfaction But In this study, after checking with many customers aboutperceived service quality and customer satisfaction in VietNameseTelecommunication context, author realized that there are some confuses inmeaning between perceived service quality and customer satisfaction Customersalways confuse about these two factors in interviewing

Many empirical researches show that perceived service quality is one of the key ofprofitability of company and is one dimension for customers to have repurchaseintentions (Hyung, 2010, p.4) Simon, Auh,& Smalley (2005, p.178) in theirresearches also confirm that perceived service quality ( both technical servicequality and functional service quality) has a positive relationship with customerloyalty Many other researches also confirm this hypothesis as Bloemer, Ruyter &Wetzels (1998) and Aydin & Özer (2005), Cronin, Brady, Brand, Hightower&Shemwell (1997) , Cronin, Brandy,& Hult (2000) , Levesque & McDougall(1996)and Zeithaml, Berry &Parasuraman (1996) Especially in TelecommunicationMarket many empirical researches show that perceived service quality have adirect impact on customer loyalty and is major predictor of customer loyalty(Santouridis & Trivellas, 2010, p.339; Hyung, 2010, p.4)

Based on theories and empirical researches and results from interviewing withcustomers author decides to remove satisfaction factor in original model andconsider the direct relationship between perceived service quality and customerloyalty

So author hypothesizes:

Hypothesis H1: “Perceived service quality has a positive impact on customer loyalty”

2.2.3 Service customization

There is some confusion about service customization and service personalization,but in this research, the literature of customization and personalization can be used

as the same meaning

Nowadays with development of computing and Internet, customers now becomemore demanding So many service corporations chose service customization is oneapproach for their competitive advantages; Customization has always been afeature of products and services when marketers have had the resources to usepersonalization for competitive advantage (Ball, Pedro, & Vilares, 2006, p.393).Moreover Pedro & Jörg Henseler (2012) points out that “over the past decades,there has been a growing recognition among scholars and practitioners thatproduct and service differentiation represents a source of competitive advantage”.The core idea of differentiation is to identify profitable market segments and todesign products and services to optimally satisfy the needs of the target segmentsand as a more extreme form of differentiation, the concept of customization –thatmeans the degree to which the firm’s offering is tailored to meet heterogeneouscustomers’ needs (Eugene, Fornell & Roland, 1997) The goals of customizationservices from organizations are to serve their customer needs in which resourcesthey have, as Tapscott (1997, as cited in George & David, 1999, p.19) argued andcustomization service is “ability to target individual, engages in dialogue withthem, and personalize an offering that meet their requirements”

According to statements from Peppers & Rogers(1993, as cited in Ball,Pedro &Vilares, 2006, p.393) “personalization has largely been assumed to affectsatisfaction and loyalty”, and because of the nature of personalized service, it isalways better service when organizations have focus on specific customer needs.Ball,Pedro & Vilares (2006, p.393) points out that “personalized service shouldsimply be better service than routine service that does not take the individual’sneeds into account” and “the rationale makes common sense: personalization

should produce a more satisfactory transaction, and over time, a more satisfactoryrelationship” With delighting customers through customized service, serviceproviders can make their customer satisfied because service performance is higherthan customer’s expectations so “high customization through discovery of latentneeds and provision of tailored solutions can heighten customer loyalty” asWang,Wang,Ma, & Robin (2010, p.6) argued

Moreover Ostrom & Iacobucci (1995) shows that customization is a signal of highservice quality and Ennew & Binks ‘s study (1996, as cited in Pedro & JörgHenseler 2012, p.334) also states “there is also empirical support for the notionthat customization in the service delivery process is a dimension of servicequality”

In another argument, customers tend to stay with current service supplier whenswitching cost is high or attractiveness of alternatives cannot overcomeattractiveness of offers from current supplier (Pedro & Jörg Henseler 2012) One

of reason why customization create switching cost and increase attractiveness ofcurrent offer is because customization require mutual investment in to relationship(Pedro & Jörg Henseler 2012, p.335) Customers have to invest their effort toexplain what their needs and requirements, suppliers will put their effort toexamine these needs and requirements to satisfy their customers There isexistence a renunciation of economic scale in customization (Pedro & JörgHenseler 2012, p.335) Moreover in the essence, when an attractiveness of currentoffers is increasing that mean decreasing in attractiveness of alternatives So theywill create switching cost or setup-cost (Thomas,Judy & Mahajan, 2003) becausewhen customers want to switch to other suppliers, they need to put their effort totrain new suppliers All these things will create an equity called “retention equity”(Rust, Zeithaml & Lemon, 2000) and lead to customer loyalty (Ball,Pedro &Vilares, 2006)

So with all information from these literatures, author can hypothesize:

Hypothesis H2: “Service customization has a positive impact on perceived service quality”

Hypothesis H3: “Service customization has a positive impact on customer loyalty”

2.2.4 Communication

As defined by Ball, Pedro & Machas (2004) communication is how we interactwith customers in positive way and give helpfulness to customers, “bycommunication, we refer to written communications such as personalized letters,direct mail, Web site interactions, other machine-mediated interactions, and e-mail, as well as in-person communication with service personnel before, during,and after service transactions” Ball, Pedro & Machas (2004, p.1277) , andcommunication is the key of customer satisfaction and loyalty (Nolan,1999,p.107)According to MacStravic (1987, as cited in Dawn Bendall-Lyon & Thomas, 2003,p.591) communication is important in customer’s belief and attitude and isimportant in increasing satisfaction and loyalty This communication will beconsidered in one way method, that mean this is not dialogue with customers asdefinition of Bruhn & Michael (2000, p.1024) about “customer dialogue”, this isjust one way from service organizations and not vice versa (Ball, Pedro & Machas,

2004, p.1277) There are many evidences that show communication has a highlyimpact to customer loyalty and satisfaction (Ball, Pedro & Machas, 2004), and

“helpful, clear, and personalized information and advice not only enhancesatisfaction and trust, but also loyalty, to a significant extent” (Ball, Pedro &Machas ,2004, p.1284) With the same findings from Katherine, Roland& Valarie(2001), Michael, David & Sharon (2000), Parasuraman, Leonard & Valarie (1991)proves that positive communication will lead to obtain customer loyalty

So based on literature, author hypothesizes:

Hypothesis H4: “Communication has a positive impact on customer loyalty“

2.3 Model and Hypotheses

H1: Perceived service quality has a positive impact on customer loyalty

H2: Service customization has a positive impact on perceived service quality H3: Service customization has a positive impact on customer loyalty

H4: Communication has a positive impact on customer loyalty

2.4 Summary

This chapter reviews some results of related topics which have relationshipbetween service customization and perceived service quality, and relationshipbetween service customization, communication and customer loyalty These topicsare almost based on ACSI/ECSI model and called ACSI/ECSI extended modelhowever in original ACSI/ECSI model, there is not a direct relationship between

perceive service quality and customer loyalty, but in this research author considersthis direct relationship

Chapter 3: RESEARCH METHODOLOGY 3.1 Introduction:

This chapter showed more detail about the research process, operationalization ofmeasurement scales of this research, in additional this chapter also providedinformation of sample such as: sample size, sample approach method in mainsurvey, method of data cleaning after survey Beside that this chapter providedinformation about questionnaires design, results of pilot process In the end, thischapter also provided methodology for data analysis for this research

3.2 Research process

This part showed a flowchart of methods used in this research, this chart will alsooutline steps in this chapter

3.3 Operationalization of measurement scales

Constructs in this proposal were almost based on American Customer SatisfactionIndex (ACSI model) and European Customer Satisfaction Index (ECSI model) andsome from ECSI extended model Indicators that used to measure perceivedservice quality have been used by Pedro, Jörg Henseler (2012), Turel & Serenko(2006) and Tung (2010) Customer loyalty factor was measured by indicators that

have been used in Pedro, Jörg Henseler (2012), Fornell, Johnson, Anderson, Cha

& Bryant (1996), Marie-Paule, Anne de la Foye, Carole & Michel (2000), Makam(2009) and Tung (2010) All these 2 factors are main factors of ACSI and ECSImodel, these factors have measured in the context of many countries (includeAsia) and industries (include telecommunication industry) on over the world.Service customization was measured based on Pedro & Jörg Henseler (2012) andBall, Pedro, & Vilares (2006) Indicators that used to measure communication wasbased on Ball, Pedro & Machas (2004) Five point rating scale was used tomeasure these indicators in this model (1 for lowest and 5 for highest) Tablebelow presented a detailed list of indicators used in the measurement model

Table 1: List of indicators

Service

Customization

CUS01 My service provider offers me products and

services that satisfy my specific needs (totallydisagree to totally agree)

CUS02 My service provider offers products and services

that I couldn’t find in another company (totallydisagree to totally agree)

CUS03 If I changed between service provider I wouldn’t

obtain products and services as customized as Ihave now (totally disagree to totally agree)

Quality QUA04 Quality of products and services (very low to

very high)QUA05 Reliability of products and services (very low to

very high)QUA06 Diversity of products and services (very low to

very high)QUA07 Global quality of the company (very low to very

high)QUA08 Meet personal requirements (very low to very

Communication COM09 I have an easy and satisfactory relationship with

my service provider (totally disagree to totallyagree)

COM10 The service provider keeps me constantly

informed of new products and services that could

be in my interest (totally disagree to totallyagree)

COM11 Personal service and advice of my service

provider (very low to very high)COM12 Clearness and transparency of information

provided by service provider (very low to veryhigh)

Loyalty LOY13 Probability to choose “my service provider”

again when buying new product or service (veryunlikely to very likely)

LOY14 Probability to recommend “my service provider”

if a friend or a colleague asked for your advice(very unlikely to very likely)

LOY15 If a competitive provider offers you the same

range and quality of services as you currentlyreceive, by how much should their prices belower than those you are currently paying for you

to change your current provider? (very low tovery high)

LOY16 Intentions to stay loyal to “my service provider”

3.4 Questionnaire Design

Questionnaires for this survey were based on ACSI and ECSI models from Pedro

& Jörg Henseler (2012), Turel & Serenko (2006) and ECSI extened model fromBall, Pedro & Machas (2004); Ball, Pedro, & Vilares (2006) and then modifiedand adjusted according to results by wording through interview from customers.Wording process was conducted by interviewing 10 respondents (3 from

Mobifone, 3 from Viettel, 3 from Vinaphone and 1 from Sfone) to know howmuch they understand about these questionnaires (after translated in toVietnamese), and let them show their recommendations and suggestions so thatthey and everybody can easily understand the main meaning of each questionnaire,after that through recommendations and suggestions from these customers, authorcollected and finalized this questionnaires table

Structure of questionnaires was divided in three parts:

o Part 1 was general information of the customers including main Operatorusing and Usage Period of this operator

o Part 2 included 16 statements based on ECSI and Extended ECSI instrument.Each statement is measured on a 5-point Likert scale ranging from strongly agree(5) to strongly disagree (1) to measure customer perceptions

o Part 3 was general demographic of the participants including Age, Sex,Martial status, Occupation

3.5 Pilot study

A convenience sample size with 80 questionnaires were issued to respondents andcollected (author used Google Doc to create a questionnaires table with content isthe same as content of softcopy and hardcopy version Google Doc will create alink, customers after accessing this link and complete questionnaires, results wererecorded automatically in Google Docs) to test reliability of this instrument, afterthat author rejected items that were not related in this instrument, discoveredissues and problems in structure and content of questionnaires Cronbach’s alphacoefficient was computed to test reliability of this instrument The next, EFAmethod was used to preliminarily estimate scale to test uni-dimension, convergent,

and discrimination attributes of measurement scale After Pilot study,questionnaires were used for survey in large numbers

Results of Pilot test proved the good design of questionnaires, and they were used

in main survey

Cronbach’s alpha was computed for each dimension of the model

Table 2: Results of Cronbach’s alpha for dimension Customization (pilot test):

Item-Total Statistics

Scale Mean ifItem Deleted

ScaleVariance ifItem Deleted

CorrectedItem-TotalCorrelation

Cronbach'sAlpha if ItemDeleted

According to results of Cronbach’s alpha for customization dimension from table

2 above, Cronbach’s Alpha was ,829 and with Cronbach’s alpha coefficient inrange [,70-,80] the measurement scale for this dimension had a good

reliability(Nguyen, 2011).(Check more detail at Appendix B1-Reliability Test)

Table 3: Results of Cronbach’s alpha for dimension Perceived Service Quality

CorrectedItem-TotalCorrelation

Cronbach'sAlpha ifItem DeletedQuality of X’s products

and services is totally

X has a Global quality 14,64 8,194 ,742 ,822

X’s services meet my

Cronbach's Alpha N of Items

According to results of Cronbach’s alpha for Perceived Service Quality from table

2 above, Cronbach’s Alpha was 0,864 and with Cronbach’s alpha coefficient wasgreater than 0,8 this measurement scale had a very good reliability (Check more

detail at Appendix B1-Reliability Test).

Table 4: Results of Cronbach’s alpha for dimension Communication (pilot test):

Cronbach'sAlpha ifItem DeletedHave an easy and

According to results of Cronbach’s alpha for communication dimension from table

4 above, Cronbach’s Alpha was 0,821 and with Cronbach’s alpha coefficient inrange [,70-,80] this measurement scale had a good reliability (Check more detail

at Appendix B1-Reliability Test).

Table 5: Results of Cronbach’s alpha for dimension Loyalty (pilot test):