Factors contributing to customer loyalty in vietnam industrial gases maket

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business --- Phan Thanh Bình FACTORS CONTRIBUTING TO CUSTOMER LOYALTY IN VIETNAM INDUSTRIAL GASES MARKET MASTER OF BU

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-

Phan Thanh Bình

FACTORS CONTRIBUTING TO CUSTOMER LOYALTY IN VIETNAM

INDUSTRIAL GASES MARKET

MASTER OF BUSINESS (Honours)

Ho Chi Minh City – Year 2014

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-

Phan Thanh Bình

FACTORS CONTRIBUTING TO CUSTOMER LOYALTY IN VIETNAM

INDUSTRIAL GASES MARKET

CONTENTS

CHAPTER 1: INTRODUCTION 1

1.1 Research Background 2

1.2 Research Problems 3

1.3 Management Prolems 4

1.4 Research Objectives 6

1.5 Research Scope 7

1.6 Structure of Research 7

CHAPTER 2 : LITERATURE REVIEW AND HYPOTHESIS 9

2.1 Definitions of Constructs 9

2.1.1 Relationship quality 9

2.1.2 Perceived service quality 10

2.1.3 Customer satisfaction 12

2.1.4 Customer loyalty 13

2.2 Relationship between the constructs 18

2.2.1 The relationship between relationship quality, customer satisfaction and customer loyalty 18

2.2.2 The relationship between perceived service quality, customer satisfaction and customer loyalty 19

2.2.3 The relationship between customer satisfaction and customer loyalty 19

2.3 Conceptual Model 21

2.4 Hypothesis 21

CHAPTER 3 : RESEARCH METHODOLOGY 23

3.1 Research Design 23

3.2 Measurement 23

3.2.1 Relationship quality 23

3.2.2 Perceived service quality 24

3.2.3 Customer satisfaction 27

3.2.4 Customer loyalty 28

3.3 Qualitative research 28

3.4 Quantitative research 29

3.4.1 Quesionnaire design 29

3.4.2 Sample size 30

CHAPTER 4 : DATA ANALYSIS AND RESULTS 32

4.1 Data Statistical Analysis 32

4.2 Reliability Test (Cronbach Alpha) 33

4.3 Exploratory Factor Analysis 36

4.4 Multiple Linear Regression 39

4.4.1 Correlation Analysis 39

4.4.2 Multiple Linear Regression analysis 41

4.5 Simple Linear Regression 46

CHAPTER 5 : CONCLUSION, IMPLICATION AND LIMITATION 49

5.1 Conclusion 49

5.2 Implication 50

5.3 Limitations 51

REFERENCES 53

APPENDIX 1A: Survey form (in English) 57

APPENDIX 1B: Survey form (in Vietnamese) 60

APPENDIX 1C: List of companies answering the survey 63

APPENDIX 2: Data analysis result - EFA 67

APPENDIX 3: Data analysis result - MLR 70

APPENDIX 4: Data analysis result - SLR 74

LIST OF FIGURES

Figure 1.1: Typical production plant, facilities and vehicles

of industrial gases industry 3

Figure 1.2: Main industrial gases manufacturers in the South of Vietnam 5

Figure 2.1: Conceptual model of business-to-business professional service quality 11

Figure 2.2: Chosing a loyalty strategy 12

Figure 2.3: The conceptual framework of customer loyalty 17

Figure 2.4: The relationship between customer satisfaction and loyalty 20

Figure 2.5: The conceptual model 21

Figure 3.1: Research process 31

LIST OF TABLES Table 2.1: Loyalty Phases with Corresponding Vulnerabilities 14

Table 2.2: Comparison between B2C and B2B by Narayandas 16

Table 2.3: Loyalty typology by Dick and Basu 17

Table 3.1: Measurement of relationship quality 24

Table 3.2: Measurement of perceived service quality 24

Table 3.3: Measurement of customer satisfaction 27

Table 3.4: Measurement of customer loyalty 28

Table 4.1: Samples characteristics 32

Table 4.2a: Cronbach alpha test 34

Table 4.2b: Cronbach alpha test (cont.) 35

Table 4.3: KMO and Bartlett's Test 36

Table 4.4: Total variance explained 37

Table 4.5: Rotated Component Matrix 38

Table 4.6: Correlations between RQ, PSQ and CL 39

Table 4.7: Correlations between RQ, PSQ and CS 40

Table 4.8: Correlations between CS and CL 41

Table 4.9: Model summary 43

Table 4.10: Anova 43

Table 4.11: Coefficients 43

Table 4.12: Model summary 44

Table 4.13: Anova 44

Table 4.14: Coefficients 44

Table 4.15: Model summary 46

Table 4.16: Anova 46

Table 4.17: Coefficients 47

Abstract

The concept of customer loyalty has been researched and applied widely in marketing, especially in consumer market However, in business-to-business context, there are not many sufficient studies to investigate deeply into this concept and its implications This paper discusses about the factors contributing to customer loyalty in Vietnam industrial gases market Among several factors found to be the antecedents of

customer loyalty, this study focuses on the two main crucial factors which are

considered as most significant to achieve customer loyalty: relationship quality and perceived service quality This study proposes a conceptual framework, in which these two constructs positively and directly impact on customer loyalty Besides,

relationship quality and perceived service also indirectly affect customer loyalty

through the customer satisfaction

A tailor-made questionnaire has been sent to 241 companies who are using industrial gases or gases service in the South of Vietnam with 149 sufficient responses The finding of this study consists with previous research that customer loyalty can be achieved and maintained through relationship quality, perceived service quality and customer satisfaction This study also points out to the industrial manufacturers in Vietnam a sufficient overview of a new approach to maintain the customer and

business in the strong competition situation

CHAPTER 1: INTRODUCTION 1.1 Research Background

Industrial Gases have been an integrated part of a variety of industries For

example, among many types of industrial gases, Carbon Dioxide (CO2) is used in carbonated soft drinks and beer, Oxygen (O2) and Acetylene (C2H2) are used in

metallurgy and shipyard, Nitrogen (N2) is used for food freezing, packaging, etc There are hundreds of industrial gases applications As a result, the industrial gases market is very large and attracts a lot of competitions

There are thousands of industrial gases companies all over the world It requires a huge investment for manufacturing plants, facilities, and vehicles Therefore, just a few multi-national industrial gases corporation take most the market shares while the others enjoy the remaining of the market acting as the distributors Some typical names can be listed, such as Messer, Air Liquid, Vijagas, Linde, SIG (100% foreign

investment company), Sovigaz (state-owned company), etc

In Vietnam, the industrial market started several decades ago More and more production facilities have been established along with the fast development of

metallurgy and shipyard industry On the market, there are the attendances of several multi-national industrial gases corporations mentioned above, who are leading the industrial gases market There are also some local state-owned or private owned

industrial gases companies with small scale production or focusing on niche market, such as the Carbon Dioxide from fermentation source

Figure 1.1: Typical production plant, facilities and vehicles of industrial gases industry (Source: Messer Group)

1.2 Research Problems

According to a research of Rauyruen, Miller & Barrett (2006), the concept of loyalty has been explored and developed for years in the consumer context and service market However, there are not many research about such concept in the business-to-business (B2B) context It is even difficult to find a clear definition of customer

loyalty in B2B market It means that deep research about customer loyalty is obviously rare in a certain section of the industry

Despite its importance and history, there is also no academic research in the industrial gases market For years, the industrial gases companies have collected the

information and perform their own study about the market for their internal use only Without the support of academic research, people who work in this industry do not have sufficient background theory to support their business

Therefore, the need of doing research in B2B market as well as the industrial gases section becomes more and more imperative It will help the industrial gases companies to set up their competitive strategies in such a tough competition

1.3 Management Problems

The outstanding development of Vietnamese economy has gone In the recent years, almost all sections of the economy face serious problems In such

circumstances, the industrial gases market has experienced its difficulties as

consequences of the economic downturn

In order to maintain its market share, the competition becomes tougher and tougher in several ways Many industrial gases companies over-invest in building new production facilities which lead to the excess industrial gases supply According a market study of Messer Vietnam (see Figure 1.2), the ratio between sales and

production capacity of most of the air-gas (consisting of oxygen, nitrogen and argon) manufacturers are less than 50% of their production capacity The bigger the capacity

is, the smaller ratio of production utilization is Searching for the cause of such

excessive supply of industrial gases market, it was supposed that the booming

development of the Vietnamese economy during the period 2003-2008, people

predicted a huge demand of industrial gases in the near future Unfortunately, the

economic situation has kept going down since 2013 until now, which seriously affects the industry

Figure 1.2: Main industrial gases manufacturers in the South of Vietnam

(Source: market research data of Messer Vietnam)

Due to recently invested high technologies of production, the product quality

among the industrial gases companies on the market, especially multi-national

companies are not very different from one another Therefore, product differentiation

is no longer an ideal strategy of any gases company, except the food-beverage carbon dioxide product which has very limit source Safety issues, vehicle, facilities, storage

tanks or cylinders are also standardized between the competitors In such situation,

some companies decided to dump the price to take customers of their competitors,

which made the competitions become stronger and stronger In fact, there are a certain number of customers who simply purchase the gases as a commodity and easily switch

to another supplier who offers cheaper price In such situation, keeping the current customers and maintain profitability of the business is the vital mission of the

industrial gases companies who are not able to apply price-dumping strategy dumping seems to be effective within a short period for the new manufacturer to enter the market However, it may lead to unfair competition In order to overcome the price competition, among several combined solutions, achieving customer loyalty becomes the most applicable and effective solution to the current problems In fact, it

Price-is widely proved that loyal customers help maintain the business and profitability Therefore, investigating the factors contributing to customer loyalty is the fundamental purpose of this study

1.4 Research Objectives

Firstly, this study will aim to identify the key factors that influence customer loyalty Price, service quality, product quality, customer relationship and customer satisfaction are among the considered list However, only some of the above factors are discovered in this paper

Secondly, the author will analyze and explore the impact of such factors on customer loyalty through a conceptual model In this study, the conceptual model defined in other empirical studies will be modified, applied and tested with the

Vietnam industrial gases market context

Finally, an applicable strategy will be proposed for the industrial gases

company to maintain its customer loyalty and achieve the business target in the

competitive situation

1.5 Research Scope

This research will be implemented to the industrial gases market in Vietnam, regardless the geographical, business size or ownership of the business

The subjective customer in this research will include the industrial gases

distributor and the end-users in several industries where industrial gases are used for their production

1.6 Structure of research

This paper consists of five chapters:

Chapter 1: Introduction This chapter introduces about the current situation of the industrial gases market in Vietnam, the management problems, research problems and research objectives of the study

Chapter 2: Literature review This chapter review the previous studies related to the topic of this paper, especially the definition of literature constructs and conceptual models

Chapter 3: Research Methodology This chapter explains how to design the

measurement scales, the survey and collect the data

Chapter 4: Data Analysis and Results This chapter shows the analysis result using the software SPSS with Cronbach alpha test, EFA and MLR analysis

Chapter 5: Conclusion, Implication and Limitation Upon the data analysis results, the relationship between the research construct will be concluded Then the author

suggests the implication of this study into the actual industrial gases market in

Vietnam Finally, there are limitations of the study that could be improved to enhance the quality of the research

CHAPTER 2: LITERATURE REVIEW AND HYPOTHESIS

This chapter discusses about the definitions of the constructs: relationship quality, perceived service quality, customer satisfaction and customer loyalty and the

relationship between these constructs discussed in other research From the literature review of previous studies, the author proposed a conceptual framework which is more appropriate to the industrial gases context in Vietnam Finally, there is a description of the hypothesis used in the conceptual framework

2.1 Definition of constructs

2.1.1 Relationship Quality

Rauyruen et al (2007) proposed four aspects of relationship quality: trust,

commitment, satisfaction and service quality Enhancing the relationship quality helps the supplier maintain customer loyalty They also emphasized that service quality would strongly enhance both purchase intentions and attitudinal loyalty

Henniq-Thurau and Klee’s (1997, p 751) described relationship quality as

“relationship quality can be seen as the degree of appropriateness of a relationship to fulfill the needs of the customer associated with the relationship” In his study, Ndubisi (2007) investigated the impact of four underpinning of relationship marketing – trust, commitment, communication and conflict handling-on customer loyalty in Malaysia Morgan and Hunt (1994) explored the theory of relationship quality based on two dimensions: trust and commitment According to these authors, trust and commitment

“lead directly to cooperative behaviors that are conducive to relationship marketing success” (Morgan and Hunt, 1994, p 22)

2.1.2 Perceived service quality

A study of Rauyruen et al (2007) showed that some authors have included service quality in their model to explain loyalty or retention, in which service quality was supposed to have positive affect on important behavioral outcomes such as loyalty Rauyruen et al (2007) also stated that previous research has confirmed that the

relationship between perceived quality and customer loyalty exists and is positive A research of Ruyter et al (1998) confirmed the positive relationship between perceived service quality and preference loyalty They also found that “the influence of

perceived service quality on reference loyalty generally varies per industry and that finding from one industry cannot be generalized to other industries”

Figure 2.1: Conceptual model of business-to-business professional service quality (Woo and Ennew, 2005)

It can be seen that most of the literature mentioned above support the idea that

customer loyalty brings certain benefits to the supplier However, Reinartz and Kumar (2002) argued about the mismanagement of customer loyalty in their research

A number of research proved that the best customers are the loyal ones (Reinartz and Kumar, 2002) And that wining customer loyalty will lead to profit In order to find out whether customer loyalty is profitable or not, it was suggested looking at the

relationship between customer longevity and companies’ profits Their research

examines the accurate of the following claims upon customer loyalty and profitability:

- It costs less to serve loyal customers

- Loyal customers pay higher prices for the same bundle of goods

- Loyal customers market the company

Finally, Reinartz and Kumar (2002) suggested treating different customers in different ways to secure the profitability and loyalty

Figure 2.2: Choosing a Loyalty Strategy (Reinartz and Kumar, 2002)

Anantharaman (2002) defined customer satisfaction as “a response (emotional or cognitive), pertains to a particular focus (expectations, product, consumption

experience), and occurs at a particular moment in time (after experience or

consumption)” (p 23)

2.1.4 Customer loyalty

Despite there are numbers of research on customer loyalty in consumer context and service market, but the concept of loyalty has not been widely studied in business-to-business context (Rauyruen et al., 2007) These authors also confirm the development

of customer loyalty is also a kind of long term investment

Oliver (1999) has cited a previous study of Oliver (1997, p.392) the definition of customer loyalty as the following:

a deeply held commitment to rebuy or repatronize a preferred product/service consistently in the future, thereby causing repetitive same-brand or same brand-set purchasing, despite situational influences and marketing efforts having the potential to cause switching behavior

In a later study, the concept loyalty is specified into four phases, which ordinarily includes: cognitive loyalty, affective loyalty, conative loyalty and action inertia

(Oliver,1999)

Table 2.1: Loyalty Phases with Corresponding Vulnerabilities (Oliver, 1999)

Cognitive Loyalty to information

such as price, features, and

so forth

Actual or imagined better competitive features or price through communication (e.g advertising) and vicarious or personal

experience Deterioration in brand features or price Variety seeking and voluntary trial

Affective Loyalty to a liking: “I buy

it because I like it.”

Cognitively induced dissatisfaction

Enhanced liking for competitive brands perhaps conveyed through imagery and association Variety seeking and voluntary trial Deteriorating performance

Conative Loyalty to an intention:

“I’m committed to buying

it.”

Persuasive counter-argumentative competitive messages Induced trial (e.g coupons, sampling, point-of-purchase promotions) Deteriorating performance

Action Loyalty to action inertia,

coupled with the

overcoming of obstacles

Induced unavailability (e.g., purchasing the entire inventory of a competitor's product from a merchant) Increased obstacles generally Deteriorating performance

stocklifts-However, the definition of loyalty proposed by Oliver is more relative to Consumer market (B2C), which is different from Business-to-Business market (B2B) According to Narayandas (2005), companies that apply consumer marketing solutions

Business-to-to business market often get poor outcomes He pointed out the differences between B2B and B2C are the number of customer, wants, transaction, product and brand The following table is a review of such comparisons:

Table 2.2: Comparison between B2C and B2B by Narayandas (2005)

Narayandas (2005) also added that the B2C marketing tools such as segmentation, communication of product features that matter to the related market segment no longer works with B2B case The product in B2B is also not easy to differentiate by their features, and that the same product can be used for several applications According to Kotler (2000), B2B market is defined as a business market where goods and services are acquired and to be used in the production of other products or services Then these products or services will be sold or rented There is a variety of characteristics of business market, including fewer buyer, larger buyer, close supplier-customer

relationship, geographically concentrated buyers, etc (Kotler, 2000)

Dick and Basu (1994) proposed typology loyalty as a two dimensional construct, including attitude and repeat patronage

Table 2.3: Loyalty typology by Dick and Basu (1994)

Rauyruen et al (2007) explained the concept customer loyalty by behavioral aspects (purchase intention) and attitudinal loyalty Bei and Chiao (2006) considered customer loyalty as continuously positive purchasing behavior of a customer towards a certain company or brand, will, clearly be affected by customer satisfaction The follow

framework describes their relationship between customer loyalty and customer

satisfaction:

Figure 2.3: The conceptual framework of customer loyalty (Bei and Chiao, 2006).

According to the framework of Bei and Chiao (2006), there is a relationship between customer satisfaction and customer loyalty However, such relationship has not been defined clearly Will customer satisfaction lead to customer loyalty or not? Or is customer satisfaction is the precedent condition of customer loyalty?

Narayandas (2005) found that loyalty offered companies several advantages He

proposed a typology of benefits, including: tangible financial benefits, nontangible financial benefits, tangible nonfinancial benefits and nontangible nonfinancial benefits

A list of behavioral characteristics of loyal customer proposed by Narayandas (2005) includes: grow the relationship, provide word-of-mouth endorsement, resist

competitors’ blandishments, pay premiums, collaborate and invest He also classified four types of customers: commodity buyers, underperformers, partners and most valuable customers

Narayandas (2005) offered effectively communicating the benefits to decision makers

of customers He also supposed that business customers display their loyalty in a predictable sequence as they move up the ladder

2.2 Relationship between the constructs

2.2.1 The relationship between relationship quality, customer satisfaction and

customer loyalty

In the business-to-business context, the relationship with customer is a crucial factor to the success of the business, especially in Vietnam and other Asian countries Many studies demonstrated that relationship significantly effects customer satisfaction This study will investigate the impact of relationship quality on customer satisfaction

H1a: Relationship quality positively impacts on customer satisfaction

Ndubisi (2007) has concluded that “relationship quality, which consists of trust,

communication, commitment and conflict handling contribute significantly to

customer loyalty” (p 102)

H2a: Relationship quality positively impacts on customer loyalty

2.2.2 The relationship between perceived service quality, customer satisfaction and customer loyalty

According to Lee et al (2000), many researchers argued that perceived service quality

is an antecedent of customer satisfaction, such as Cronin and Taylor (1992), Spreng and Mackoy (1996)

Parasuraman et al (1988) and Zeithaml et al (1990) noted that the quality of services offered will determine customer satisfaction and attitudinal loyalty (as cited by

Ravichandran et al., 2010)

H1b: Perceived service quality positively impacts on customer satisfaction

Rauyruen et al (2007) has pointed out a number of studies in which service quality was included to explain loyalty or retention Harrison-Walker (2001) also confirmed

that there is positive effect between perceived quality and customer loyalty

H2b: Perceived service quality positively impacts on customer loyalty

2.2.3 The relationship between Customer Satisfaction and Customer Loyalty

There are numbers of studies on customer satisfaction and customer loyalty and the correlation between these two concepts are widely confirmed Oliver (1999)

emphasized that a shift “from satisfaction to loyalty appears to be a worthwhile change

in strategy for most firms because business understand the profit impact of having a loyal customer base” (p 33) However, in the same study, Oliver (1999) found that although loyal consumers are most typically satisfied, the aforementioned data show that satisfaction is an unreliable precursor to loyalty

According to some studies of Athanassopouslos et al (2001), Hallowell (1996),

Silvestro and Cross (2000), that customer satisfaction and loyalty are highly

correlated However, Bennett and Rundle-Thiele (2004) and Oliver (1999) supposed that customer satisfaction and customer loyalty form two distinct constructs

Figure 2.4: The relationship between customer satisfaction and loyalty by Oliver (1999)

Cronin and Taylor (1992) investigated the conceptualization and measurement of service quality, customer satisfaction and purchase intention In this study, the authors found that satisfaction has a signification effect on purchase intentions

H3: Customer satisfaction positively impacts on customer loyalty

2.3 Conceptual Model

Based on the study of Rauyruen et al (2007) which concluded that relationship quality

is a predictor of B2B customer loyalty; the research of Woo and Ennew (2005) about the positive influences of service quality on customer satisfaction and behavior intention, a conceptual model for this paper is proposed as below:

Figure 2.5 Conceptual model

2.4 Hypothesis

- H1a: Relationship quality positively impacts on customer satisfaction

- H1b: Perceived service quality positively impacts on customer satisfaction

Relationship Quality

Perceived Service Quality

Customer Satisfaction

Customer Loyalty

H1a

H1b H2a

H2b

H3

- H2a: Relationship quality positively impacts on customer loyalty

- H2b: Perceived service quality positively impacts on customer loyalty

- H3: Customer satisfaction positively impacts on customer loyalty

CHAPTER 3: RESEARCH METHODOLOGY 3.1 Research Design

The factors that contribute to customer loyalty are determined based on existing theories from literature review The main references were taken from the studies about B2B market and some specific industries

This study was limited by investigation the relationships between companies who are using industrial gases in Vietnam market and their industrial gases suppliers

3.2 Measurement

The measurement of the four variables of the model: relationship quality, perceived service quality, customer satisfaction and customer loyalty is defined as the following:

3.2.1 Relationship quality

This study proposes that the relationship quality comprises of three dimensions,

including: trust, commitment (Rauyruen et al., 2007) and communication (Ndubisi, 2007) These are the most common dimensions proposed by different researchers on the measurement of relationship quality Regarding the four dimensions suggested by

Rauyruen et al (2007), the dimensions satisfaction and service quality are considered

as separate constructs in this paper Besides, the dimension conflict handling in the

research of Ndubisi (2007) is excluded because it seems not to be appropriate in the context of the researched industry

Table 3.1 Measurement of relationship quality

Observation scale for Relationship Quality

RQ1 Supplier has good communication with Customer

RQ2 Customer has mutual trust with Supplier

RQ3 Customer has strong commitment with Supplier

3.2.2 Perceived service quality

This paper use the theoretical SERVQUAL model developed by Parasuraman et al (1988) to measure the perceived service quality, which consists of five dimensions: tangibles, reliability, responsiveness, assurance and empathy

Table 3.2 Measurement of perceived service quality

Quality personal protective equipment (PPE)

Speed of order fulfillment

Speed response to complaints

Observation scale for Perceived Service Quality

- Tangible:

PSQ1 Supplier's employees are equipped with appropriate personal protection

equipment (PPE)

PSQ2 The website of Supplier has good appearance

PSQ3 The transportation vehicles of Supplier conform to safety regulations

- Empathy:

PSQ4 Supplier is interested in solving problems

PSQ5 Supplier performs understandable communication with Customer

PSQ6 Supplier has individual attention to Customer

- Reliability:

PSQ7 Supplier delivers goods on time

PSQ8 The range of product meets Customer's need

PSQ9 Supplier has consistency of service provided to Customer

- Responsiveness:

PSQ10 Supplier promptly fulfills Customer's order

PSQ11 Supplier promptly responds to Customer's complaint

PSQ12 Supplier promptly delivers goods to Customer

- Assurance:

PSQ13 Supplier is competent enough to supply goods to Customer

PSQ14 Supplier always provides accurate billing and invoice

PSQ15 Supplier's employees keep confidential all information related to

Satisfaction about product quality

Satisfaction about service quality

Satisfaction about price

Satisfaction about product range

Observation scale for Customer Satisfaction:

CS1 In general, Customer is satisfied with Supplier

CS2 Customer is satisfied with product quality of Supplier

CS3 Customer is satisfied with service quality of Supplier

CS4 Customer is satisfied with the price of Supplier

CS5 Customer is satisfied with the product range of Supplier

Recommend other partners

Positive comment on service

Repeat patronage behavior

Repurchase products

Intentions to continue using service in future

Observation scale for Customer Loyalty:

CL1 Customer will recommend this Supplier to other partners

CL2 Customer has positive comment on Supplier's service

CL3 Customer will continue purchasing goods from Supplier

CL4 Customer will continue using Supplier's service in the future

3.3 Qualitative research

Firstly, the measurement scale mentioned above was respectively sent to 10 companies who were using industrial gases Most of the responses showed that the responses understood correctly the content of the statement in the questionnaire The responses also agreed with the measurement scale used in the research However, some

correspondents suggested replacing the observation “Appearance of Supplier’s

employees” and “Appearance of Supplier’s transport” into safety issue to be more appropriate with the industrial gases business Therefore, two modifications of the observation scales had been modified in the official survey

3.4 Quantitative research

3.4.1 Questionnaire design

A questionnaire (in Vietnamese and English) designed upon 5-point Likert scale was sent to 241 companies who are using industrial gases in the South of Vietnam via email or fax For the questionnaire sent by email, a link to internet survey is also attached for the respondents to provide their responses quickly The list of these 241 companies was taken from the customer list of more than 300 industrial gases end-user companies in Vietnam The people who received and answered the survey should work in procurement department, technical department (related the using of industrial gases), planning department or owners of the companies (regarding small private-owned companies)

The content of the questionnaire comprises of two sections:

- Section A: general information of the response company and the respondent,

including six items as below: Company name (the customer who is using industrial gases), ownership of the response company, industry section of the response company, the longevity of the business between company and supplier, position of the

respondent and the working time of the response at such position

- Section B: the measurement scale for the research There are 27 observation variables

in the questionnaire At each observation variable, the respondent will confirm their response to the statement by choosing one number of the 5-points Likert scale:

1 = Strongly Disagree 2 = Disagree 3 = Neutral 4 = Agree 5 = Strongly Agree

For Multi-Linear Regression analysis, Tabachnick & Fidell (2007) and Green (1991) suggest the below formula, as cited by Nguyen (2013):

n ≥ 50 + 8p

Whereas, n is the minimum sample size and p is the number of independent variables

of the model Green (1991) supposed that the above formula is appropriate with p < 7

In the model of this research, there are two independent variables, so the sample size should be greater than 66

Figure 3.1 Research process

CHAPTER 4: DATA ANALYSIS AND RESULTS 4.1 Data Statistical Analysis

There are totally 152 responses collected through the on-line survey among 241

questionnaire sent In which, 3 responses have been removed because the respondents did not provide their company name Finally, 149 samples are used for data analysis in this research The response rate is 149/241 = 62%

Table 4.1 Samples characteristics

Description Frequency % Percent Valid Cumulative Percent

Table 4.1 Sample characteristics (cont.)

Description Frequency % Percent Valid Cumulative Percent

4.2 Reliability Test (Cronbach Alpha test)

Nunnally and Bernstein (1994) suggested that when Cronbach a ≥ 0.6, then the scale

is acceptable in respect of reliability If the corrected item-total correlation of a

variable is ≥ 0.30, such variable will be acceptable A scale has good reliability when Cronbach a varies between 0.7 and 0.8 If Cronbach a ≥ 0.95, many variables of the

scales measure the same content of the construct (as cited by Nguyễn (2013)) Leech

et al (2005) recommended that alpha should be above 0.70 However, lower alpha values varying from 0.60-0.69 are also used commonly in journal articles (Leech et al., 2005)

The Cronbach a of the variables in this research are summarized in the below table: