Key factors affecting horeca customers loyalty in domestic goods at ho chi minh

Research Objectives The research objectives are: - To identify factors affecting shopper Horeca customers’ loyalty in domestic goods at Viet Nam.. Teas 1993 also mentioned that perceive

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-

NGUYEN THI THANH TRANG

KEY FACTORS AFFECTING HORECA

CUSTOMERS’ LOYALTY IN

DOMESTIC GOODS

AT HO CHI MINH CITY

MASTER OF BUSINESS (Honours)

Ho Chi Minh City – Year 2014

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-

NGUYEN THI THANH TRANG

KEY FACTORS AFFECTING HORECA

MASTER OF BUSINESS (Honours)

SUPERVISOR: PhD Nguyen Dong Phong

Keywords: key factors, Horeca shoppers’ loyalty, domestic goods

Abbreviations Horeca : Hotel, Restaurant, Cafe

TABLE OF CONTENTS

ABSTRACT 1

TABLE OF CONTENT 2

CHAPTER 1: INTRODUCTION 5

1.1 RESEARCH BACKGROUND 5

1.2 RESEARCH PROBLEMS 5

1.3 RESEARCH OBJECTS 7

1.4 RESEARCH SCOPE 8

1.5 RESEARCH STRUCTURE 8

CHAPTER 2: LITERATURE REVIEW 9

2.1 B2B CUSTOMERS' LOYALTY 9

2.2 FACTORS AFFECTING HORECA CUSTOMERS' LOYALTY 10

2.2.1 PERCEIVED SERVICE QUALITY AND CUSTOMER SATISFACTION 10

2.2.1 PERCEIVED PRODUCT QUALITY AND CUSTOMER SATISFACTION 11

2.2.3 PERCEIVED PRICE AND CUSTOMER SATISFACTION 12 2.2.4 CUSTOMER RELATIONSHIP MANAGEMENT AND CUSTOMER

3

SATISFACTION 13

2.2.5 CUSTOMER SATISFACTION AND CUSTOMER LOYALTY 14

2.3 CONTROLLING FACTORS 15

2.4 RESEARCH MODEL AND HYPOTHESES 16

CHAPTER 3: METHOLOGY 18

3.1 RESEARCH PROGRESS 18

3.2 RESEARCH APPROACH 19

3.3 MEASUAREMENT SCALES 20

3.4 QUESTIONARE DESIGN 25

3.5 SAMPLE SELECTION 25

3.6 DATA COLLECTION 26

3.7 DATA ANALYSIS 27

CHAPTER 4: DATA ANALYSIS AND RESULT 29

4.1 DESCRIPTIVE ANALYSIS 29

4.2 MEASUAREMENT ASSESSMENT 30

4.2.1 CRONBACH’S ALPHA 30

4.2.2 EFA 32

4.3 EVALUATE THE MEASUREMENT SCALES BY CFA .37

4.3.1 THE CFA RESULT FOR INDEPENDENT VARIABLE 37

4.3.2 THE CFA RESULT FOR MODERATOR VARIABLE 38

4.3.3 THE CFA RESULT FOR DEPENDENT VARIABLE 39

4.3.4 THE SATURATED MODEL 40

4.3.5 THE THEORITICAL MODEL 40

4.3.6 THE BOOTSTRAP 42

4.4 HYPOTHESIS TESTING 43

CHAPTER 5: DATA ANALYSIS AND RESULT 45

5.1 CONCLUSIONS 45

5.2 IMPLICATIONS 46

5.2 LIMITATION AND FUTURE RESEARCH 48

REFERENCES 50

APPENDECIE 58

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CHAPTER 1 INTRODUCTION 1.1 Research background

According to “Vietnam National Administration of Tourism Report” (2013), in the recent years, the international visitors came to Viet Nam increase continually: 5.049.855 turns (2010), 6.014.032 turns (2011) and 6.847.678 turns (2012) Besides, attracting the number of domestic visitors rapidly 28 million (2010), 30 million (2011) and 32, 5 million (2012) Thus demand about goods for HoReCa channel is so high HoReCa is an iconic business term

which primarily refers to a sector of the food service industry, to establishments which prepare

and serve food and beverages The term is a syllabic abbreviation to the words Hotels

& Restaurant Category but to some it also may mean Hotel/Restaurant/Cafe

Capturing the trends and potential of this HoReCa segment, many companies both foreign and domestic try to achieve market share That means the domestics companies have to face the toughest challenges when the foreign firms entering Vietnam market The issues are how the domestic firms survive and develop in the local market

1.2 Research Problems

In Viet Nam, there are many high level hotels, resorts, restaurants are in business, and in parallel international visitors increase shapely, it is easy to understand the demand of HoReCa segment for goods is so large This channel always in high demand for many essential products for operational supply food, rest, entertainment, vendors are required to ensure that products bearing the luxury, elegance, safety and can provide large quantities Therefore, most of the 3-5 star

luxury hotels, restaurants, cafe, using foreign goods; the capacity of domestic manufacturers did not meet the strict requirements of this market

However, research by experts in the field of restaurants, hotels, psychology international tourists

to Vietnam always wants to enjoy the special dishes as well as Vietnamese products to try to find learn about the unique culture of Vietnam To meet this tastes, in recent years the restaurants, luxury hotels in the country have begun to look toward domestic manufacturers to order

According to a representative of the Caravelle Hotel, this hotel is increasingly focusing on Vietnamese cuisine and met with a number of vendors such as powder at the Saigon Food for the exchange of product supply issues for buffet at the hotel

Ms Pham Thi Uc My, Managing Director of River Beach Resort 4 star, said investors restaurants, hotels, resorts, firms providing travel services, resort only to trust and use of foreign goods to avoid risks in the process of serving customers, but now many Vietnam product has resonated with quality, reasonable price, more so investors tend search for local suppliers to cooperate

Horeca businesses tend not to use the products sold on the mass market to luxury class claims in the eyes, and unique visitors

At the same time, investors still hesitated choice because if you use the unqualified products, increasing quality will cause costs to change when a new product or change providers several times That's why even though this leads to long wanted to bring Vietnamese goods to promote the use of image, style of Vietnamese culture, but the hotel is very picky and does not have many local partners

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Therefore, these companies want to put products into Vietnam this channel should be carefully studied and the technical standards necessary to make distinctions new products to easily conquer this difficult customers

According to “Nielsen Shopper Trends” (2012), Vietnam has been faced with bad situation economic It has led to some changes in shoppers’ behaviors that have become more price-sensitive (www.nielsen.com) They change to look at the brand in domestic to save money It is necessary to find out the factors to which determine consumer loyalty to attract and retain customers It also helps the firms make decisions in order to select the most appropriate strategies for their goals

1.3 Research Objectives

The research objectives are:

- To identify factors affecting shopper Horeca customers’ loyalty in domestic goods at Viet Nam

- To determine the impact of each factor on shopper loyalty

Based on the research object, the main purpose of this thesis is to identify what factors have impact on Horeca shoppers’ loyalty in domestic goods at Viet Nam and examine how these factors influence their decision of buying domestic goods in Vietnam

The research questions are:

estic goods at Viet Nam?

Understanding relationship between main factors affecting customers purchase decision is an important role for domestic enterprises to satisfy customers’ demand and to have available strategies in is market segment

1.4 Research Scope

This study focuses on Horeca customers in Ho Chi Minh City; include 3-5 hotels, restaurants, and café around big center district at Ho Chi Minh City: district 1,2,3,4,5,7,10, BinhThanh, PhuNhuan, Tan Binh, Thu Duc

1.5 Research Structure

Corresponding to this process below structure is proposed for this research:

• Chapter 1: Introduction to introduce research background, research problem, research objective, research question, research scope as well as structure of the research

• Chapter 2: Literature review This chapter reviews theories and selects the research’s factors as well as formulates the research hypotheses and model

• Chapter 3: Research methodology This chapter provides general idea how the research is designed and implemented

• Chapter 4: Data analysis, result and finding discussion This chapter translates data collected from survey, analyses data as well as discusses the result finding in connection with theory

• Chapter 5: Conclusion, implication, limitation and future research This Chapter concludes the research finding, provides implication, further suggestion as well as research limitation

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CHAPTER 2 LITERATURE REVIEW

2.1 B2B (business to business) Customer Loyalty

Customer loyalty is a buyer’s overall attachment or deep commitment to a product, service, brand, or organization (Oliver 1999) Customer loyalty has a powerful impact on firms’ performance and is considered by many companies an important source of competitive advantage (Heskett, Sasser, and Schlesinger 1997; Rust, Zeithaml, and Lemon 2000; Woodruff 1997)

With loyal customers, companies can maximize their profits Loyal customers are willing to (1) purchase more frequently (price insensitivity), (2) try the firm’s new products or services (repurchase intention), (3) recommend products and services to others (word-of-mouth), and (4)

give companies suggestions (complaint behavior) (Reichheld&Sasser, 1990)

While much research has focused on customer loyalty in business-to-consumer (B2C) contexts, customer loyalty is important in business-to-business (B2B) contexts as well (Shun Yin Lam, Venkatesh Shankar, M Krishna Erramilli and Bvsan Murthy; 2004) In organizational buyer-seller relationships, loyal buyers are more likely to focus on long-term benefits and engage in cooperative actions beneficial to both partners in a relationship than disloyal buyers, thus enhancing the competitiveness of both partners and reducing transaction costs (Doney and Cannon 1997; Ganesan 1994; Morgan and Hunt 1994) Indeed, customer loyalty constitutes an underlying objective for strategic market planning (Kotler 1997)

2.2 Key factor affecting of Horeca Customer Loyalty

2.2.1 Perceived Service Quality and Customer Satisfaction

Service quality is defined as “an overall assessment of service by the customers” (Lewis and Booms, 1983, cited in Ganguli and Roy, 2010) Researchers and practitioners interest in service quality is clear, reflected in the fact that poor quality compromises a firm’s ability to effectively differentiate itself in the marketplace, potentially driving away customers (Lovelock and Wirtz, 2011) Indeed, the quality of a service is sometimes more important for customers than the cost

of acquiring that service (Ranaweera and Neely, 2003) Therefore, to satisfy customers, a service organization needs to understand how customers evaluate the quality of the service they receive and the basis on which they become loyal to that organization (Kandampully, 1998) Besides, the superiority of the service offered by an organization depends on customer perception of service quality and not on the organization’s perception of the service offered (Lobo, et al., 2007) The comparison that customers made between these expectations and the perception of the method by which the service has been delivered is known as the perceived service quality (Lehtinen and Lehtner, 1982; Lewis and Booms, 1983; Parasuraman et la., 1983, 1985, 1991, 1994; Gronroos, 1984; Zeithaml, 1987; Xu, et al., 2006, cited in Obeidat, et al., 2012)

Perceived service quality is defined as “a global judgment of attitude relating to the superiority

of a service” (Parasuraman et al., 1988, p 16) In simple words Jiang and Wang, (2006,cited in Ishtiaq, 2012) defined it as the consumer’s evaluation of the service performance received and how it compared with their expectation Consequences of perceived service quality can be identified from customers’ behavioral intentions such as repurchase intentions, word of mouth, and customer loyalty (Zeithaml, Berry, Parasuraman, 1996) Most researchers suggested that

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high service quality resulted in high customer satisfaction (Parasuraman, Zeithaml, and Berry,

1985, 1988) Teas (1993) also mentioned that perceived serviced quality was accumulation of customer satisfaction.Thus, the following hypothesis is proposed:

H1: There is a positive relationship between perceived service quality and Horeca customer’s satisfaction

2.2.2 Perceived Product Quality and Customer Satisfaction

According Garvin (1987) proposes eight dimensions of product quality such as: Performance which is refers to a products primary operating characteristics; Features: These are additional features which are also known as the bells and whistles of the product; Conformance which is described as the extent to which a product will operate properly over a specified period of time under stated conditions of use; Reliability: the probability that will operate properly over a specified period of time under stated conditions of use; Durability: It is the amount of use a customer gets out of use of a product before it physically deteriorates or until replacement is preferable; Serviceability: the speed competency and courtesy of repair; Aesthetics: How a product appeals to all the five senses of a human; Customer perceived quality: Customers perception of a products quality based on reputation of the firm

The recognition of product can be considered as an initial stage for developing customer satisfaction and creating customer loyalty (Eduardo, Arturo, and Jorge, 2008) If a product fulfils the customer’s expectations, the customer will be pleased and consider that the product is of acceptable or even high quality (Jahanshahi, Gashti, Mirdamadi, Nawaser, and Khaksar, 2011) The customer perception about a product is another important dimension which is under consideration now days in eyes of marketers What customer thinks about the quality of a

product is an important factor (Bagram& Khan, 2012) Perceived quality differs from objective quality Perceived product quality is a global assessment characterized by a high abstraction level and refers to a specific consumption setting (Zeithaml, 1988) It is the totality of features and characteristics that exist in a product which can satisfy a customer need or want Quality is a direct influence on customer satisfaction which leads a customer towards loyalty then Perceived product quality acts as a mediator between extrinsic cues and perceived customer value (Dodds

et al , 1991) Improvement in customer perceived quality will increase customer satisfaction, loyalty, and profitability (E.Gummesson, 1998) In Brucks, Zeithaml, and Naylor’s (2000) study

of the perceived quality construct of consumer’s durable goods, perceived product quality played

a crucial role affecting the purchasing choices In the satisfaction model proposed by parasuraman, Zeithaml, and Berry (1994), product quality was of same importance to affect consumer satisfaction as service quality This study then proposes the impact of product quality

on customer satisfaction:

H2: There is a positive relationship between product quality and Horeca customer’s satisfaction

2.2.3 Perceived Price and Customer Satisfaction

Originally, price has been something that seller and buyer negotiated upon purchase On the markets where supply and demand met, prices were agreed upon to secure the best deal for both seller and buyer.Price is the amount of money charged for a product or service, or the sum of the values that customers exchange for the benefits of having or using the product or service (Kotler and Armstrong, 2010) Anderson, Fornell and Lehmann (1994) also emphasized price as an important factor of consumer satisfaction, because whenever consumers evaluate the value of an acquired service, they usually think of the price (Anderson and Sullivan 1993; Athanassopoulos

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2000; Fornell 1992; Zeithaml 1988) According Zeithaml (1988) both objective price and perceived price are important factor for customers to evaluate quality Zeithaml (1988) also suggested that objective monetary price was not equal to target price in the customer’s mind The definition of price depended on customer’s viewpoint was the price customer perceived, it is the perceived price And it is meaningful more than monetary price When customers find out that the price of a service or product is suitable, it is reasonable for them continue to re-purchase (Bei and Chiao (2001) Higher pricing perceived by consumers might negatively influence their purchase probabilities (Peng and Wang, 2006) Many researchers have pointed out that price perception influences customer satisfaction and trust (Oliver, 1999; Peng and Wang, 2006; Cheng et al., 2008; Kim et al., 2008) Price policy is an aspect of consumer behavior is critical to get the satisfaction level of the consumers and their elevation to the status of consumer loyalty

(Nadanasabai , 2012) This study proposes the following:

H3: There is a positive relationship between perceived price and Horeca customer’s satisfaction

2.2.4 Customer Relationship Management and Customer Satisfaction

Customer relationship management (CRM) is a new concept within businesses that has increased its importance dramatically over the last few years, and will continue to do so in the future (Azila and Noor, 2011) CRM is a tool and process that allows an organization to identify, understand and serve customers to improve customer service, retain valuable customers, and help provide analytical capabilities (Dimitriades, 2006) CRM is the driving force that enables the characterization of customer and increases the customer value In addition, CRM helps companies to retain customer’s satisfaction and customer’s loyalty It is not only for managing

customers and for monitoring their behavior; it also has the potential to change and improve customer relationship with the service provider and increase business revenue (Dekimpe, Steenkamp, Mellens and Abeele, 1997) In addition, managing CRM will increase customer satisfaction due to the interactions between companies and clients; CRM will help companies to attract and grow new customers; and CRM will strengthen companies’ competitive advantages (Chaturvedi, 2005) CRM refers to all business activities directed towards initiating, maintaining, and developing successful long term relational exchanges (Heide, 1994; Reinartz and Kumar, 2003); the purpose of CRM is to engage in interaction with customers CRM strategy, on the other hand, is built to identify customer’s needs, wants and expectations Learning the customer demands and complaints by keeping in contact with the customers and producing solutions peculiar to the customer are the other steps of customer relationship management Accurately-directed customer relationships result in customer satisfaction (Kirmaci, 2012) Therefore, this study tests the following hypotheses:

H4: There is a positive relationship between customer relationship management and Horeca customer’s satisfaction

2.2.5 Customer Satisfaction and Customer Loyalty

Kotler (2000); Hoyer &MacInnis (2001) also define satisfaction as a person’s feelings of pleasure, excitement, delight or disappointment which results from comparing a products perceived performance to his or her expectations According to Hasemark and Albinsson (2004) cited in Singh (2006:1) “satisfaction is an overall attitude towards a product provider or an emotional reaction to the difference between what customers expect and what they actually receive regarding the fulfillment of a need”

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Customer satisfaction is considered a key driver of the long-term relationship between suppliers and buyers (Geyskens, Steenkamp, and Kumar 1999) Many studies have shown that customer satisfaction affects variables that are indicators of customer loyalty or orientation about a service than are disloyal customers (Ahluwalia, Unnava, and Burnkrant 1999) Customer satisfaction in the B2B context is often defined as a positive affective state resulting from the appraisal of all aspects of a firm’s working relationship with another firm (Geyskens, Steenkamp, and Kumar 1999)

Customer satisfaction leads to brand loyalty (Cronin, Brady, and Hult 200; Cronin and Taylor 1992; Lee 1998; McDougall and Levesque 2000) In a modification of Oliver’s definition (1997), loyalty is defined as a deeply held commitment to repeat purchases of a preferred product

or service consistently in the future, despite situational influences and marketing efforts having the potential to cause switching behavior

To distinguish customer satisfaction and customer loyalty, loyal repeat purchase behavior would

be a better measurement to eliminate any possible confusion Many related empirical studies (Cronin, Brady, and Hult 200; Cronin and Taylor 1992; Lee 1998; McDougall and Levesque 2000) reported that satisfied customers demonstrate more loyal behavior The hypothesis is to repeat the test of this relationship:

H5: There is a positive relationship between Horeca customer satisfaction and Horeca customer loyalty

2.3 Controlling factors

Customers’ inside factors: Organizational Factors (Extrinsic reward systems, Role expectations, Corporate culture and, intrinsic rewards, Cross-functional purchasing teams, Policies supporting

vertical and horizontal dimensions)) & Individual factors (Experience: new buy straight and buy, Choice of reward-Role orientation, Valence of reward, Probability perceptions) (Dwyer and Tanner, 2005)

re-2.4 Research Model and Hypotheses

Based on the above studies, a conceptual model is proposed Details about a conceptual model and it hypotheses as follows:

H1: There is a positive relationship between perceived service quality and Horeca customer satisfaction

H2: There is a positive relationship between perceived product quality and Horeca customer satisfaction

H3: There is a positive relationship between perceived price and Horeca customer satisfaction H4: There is a positive relationship between customer relationship management and Horeca customer satisfaction

H5: There is a positive relationship between Horeca customer satisfaction and Horeca customer loyalty

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Figure 2.1: A Conceptual Model

Perceived Product quality

Perceived Price policy

Perceived Service quality

Customer relationship management

Horeca Customers’

Loyalty

Customers’ inside factors:Organizational

Factor& Individual Factors

H1+

+ H2+

+++

+++

=(A nch ore

d by:

1

Stro ngly disa gree

; 2

Disa gree

; 3

Disa gree som ewh at;

4

Neu tral;

5

Agr

ee som ewh at;

6

Agr ee;

7

Stro ngly agre e)++

+

H3+

H4+

Control factore

Customer Satisfaction

H5+

+

CHAPTER 3 METHODOLOGY 3.1 Research Process

This study is conducted as given in the chart below (Figure 3.1)

Figure 3.1: Research Process

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3.2.Research Approach

This research was descriptive, which drew a picture of the topic and describes characteristics of a phenomenon or situation in its current state, namely customer loyalty Besides, the research sought to indentify relevant attributes of this phenomenon to answer the question what and how In descriptive research, correlation, developmental design, observational studies, and survey research are used For the research, survey plus observation were the suitable ways to capture the phenomenon at the moment The selected approach was based on personal observation and shopping experiences from perspectives of customers when they do their grocery

This research is used for examining the customer behavior, especially in horeca customers’ loyalty Singleton (1999) illustrated that different problems have different approaches Among of several approaches, we have two main approaches: qualitative research and quantitative research

Qualitative approach focuses on finding the insights of the employees through

interview and observation It helps to produce more in-depth and comprehensive information, use subjective information and participant observation to describe the context, or natural setting,

of the variables under consideration, as well as the interactions of the different variables in the context It seeks a wide understanding of the entire situation

Quantitative method is used to explain, predict phenomenon with measurable

variables (Leedy&Ormrod 2001:101) Quantitative research also involves data collection that is typically numeric and the researcher tends to use mathematical models to analyze data Creswell (2003:18) states, quantitative research “employ strategies of inquiry such as experimental and

surveys, and collect data on predetermined instruments that yield statistical data” According to Bryman& Bell (2007) qualitative research emphasizes on words instead of large quantification and focuses on the individuals‟ interpretations of their social world This approach also requires high involvement of participants´ observations from actual experiences (Creswell 1994)

When doing this research, I often base on two questions that I mentioned in chapter 1: What are the key factors affecting the Horeca customers’ loyalty in domestic goods at Viet Nam? And How is impact of these factors Horeca customers’ loyalty in domestic goods at Viet Nam? According to Saunders et al (2000), quantitative takes less time to complete and it is normally possible to predict accurately the time schedules whereas qualitative research can be much more prolonged Most of thesis studies were time constrained Hence, quantitative approach was the preferred approach In quantitative research, survey is a frequently used and universal approach because it covers a larger respondent population to collect data in highly economical way in comparison with qualitative And cccording to Ghauri et al (1995) qualitative methods are not just differentiated from quantitative in terms of “quantification”, but in reflecting on different perspectives, such as behavior, events, interactions, relationships among others Thus, to estimate the level of customers’ satisfaction, I also find the insights of the customers through interview and observation in fact to understand deeply about their thought, ideas and etc Therefore, it can help me overcome limitation if I combine these two above approaches, so that my research will more and more effective

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customers’loyalty These measurement scales are developed from many previous

qualifiedresearches which are published in reputed international magazines Accordingly, the items and sources of reference for each scale are presented in table below:

No Variables Literature review Measuring items

al (2008) and Peng and Wang (2006)

1 The domestic price charged is reasonable

2 The pricing policies of domestic products are attractive

3.Domestic product supplied is equivalent to its price

4 I will continue to stay with domestics products unless the price is significantly higher of the products

3 Perceived

Service

Quality

Bass (1974) cited Shun Yin Lam (2004)

1 Understanding of my business and product needs

4 Promptness in advising about any problems with merchandise

3 The domestic product company’s employees regularly meet customer to learn their current and potential needs for new products or service development

4 The domestic product companies understand my company business and give offers matching with my company’s needs

5 Customer

Satisfaction

Zeithaml et al

(1996) and Sirdeshmukh et al

(2002) And Taylor and Baker (1994)

1.In general, my company is very satisfied with the services and domestic products offered

2 Overall, domestic product companies are good companies to do business with

3 Overall, the domestic products and service comes

be online questionnaire, postal questionnaire or delivery and collection questionnaire The authors decided to adopt delivery and collection questionnaire Even though telephone or online surveys are time-saving, quicker collection and fewer efforts, respondents may not be as correctly targeted as and information is likely less reliable and administered than traditionally manual questionnaire

Questionnaires had 2 versions both in English and in Vietnamese Questionnaire consisted of structured questions (close ended) The apparent advantage of closed ended questions is that response rate is increased, time-saving for respondents and decreasing waiting cost for the surveyor Obviously, respondents usually feel reluctant to take part in the interview if they are required to answer many open questions due to time limitation and inconvenience Furthermore,

as quantitative research is deductive for which researchers were able to predict and develop model of attributive dimensions relating to research subject before handing out questionnaires to interviewees, the use of more closed ended questions are reasonable For the sake of confidentiality, respondents were not asked to reveal their personal information except for age and gender under personal information heading Questions used were brief, comprehensive and the use of jargon was avoided to increase understanding and interest of the respondents

Creating questionnaire base on the knowledge in Chapter 2 and a conceptual framework

of Ghazzawi (2008), especially replying on tree and figure Conceptual Framework of factors affect Customer Loyalty The questionnaire was divided into 6 parts: Perceived service quality, Perceived product quality, Perceived Price policy, Customer relationship management and Customer satisfaction and Customers’ Loyalty All these data were surveyed from the customers

in Ho Chi Minh The collected variables will be disposed by various statistics tests

In this survey, the customers’ loyalty is measured by a list of questions relatively to seven-point scale in the surveys; it means an interval data estimator The levels of customers about agree (Perceived service quality, Perceived product quality, Perceived Price policy, Customer relationship management and Customer satisfaction and Customers’ Loyalty) will be presented from mark 1 to 5 (Anchored by: 1 Strongly disagree; 2 Disagree; 3 Neutral; 4 Agree;

5 Strongly agree)

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3.5 Sample Selection

Process of sampling was the next issue As this is a cross-sectional study, most of the academic studies are cross sectional This is also an academic research Cross-sectional studies need less time to be completed The researchers also have limited time to complete their research work and financial resources As convenience samples are generally the cheapest and easiest to conduct Convenience sampling is most often used during the exploratory phase of a research project and is perhaps the best way of getting some basic information quickly and efficiently So, convenience sampling was used to collect data

This paper will be studied basing on the questionnaire that I carry out by Horeca customers in Ho Chi Minh City When doing this research, I pick out these customers for taking this survey randomly such as I came to each departments of Horeca (hotel, restaurant, cafe and sent the questionnaire to them I call these customers “sampling”

This study includes 23 variables, in which 19 variables are independent and 04 dependent variables According to Hair, Black, Babin, and Anderson (2010), a general rule, the sample size should be 100 or greater and the minimum sample should have a desired ratio

of 5 observations per variable

n> 100 samples and n=5k (where k = the number of variables)

Therefore, the minimum sample size is n = 5*23 = 115

For standard multiple regression analysis, Tabachnick and Fidell (1991) proposed that the desired level is:

n> 50 + 8m (where m = number of independent variables)

Hence, the required sample is:

n > 50 + 8*5 = 90

Thus, the minimum sample size is 115

In detail, there are 115 customers are picked out randomly from all department Horeca customers in Ho Chi Minh, including hotels, restaurants, café customers taking part in this survey so that they can give result for this paper

When I carried out this survey, besides the customers take the survey, they also show their thought, their beliefs by oral

3.6 Data Collection

There are two sources of data for research, namely primary and secondary data The primary data is relevant to the present study and usually collected by the researcher through communication methods or interaction with respondents and observation methods For this kind

of data, survey techniques were used to answer the research questions, which were based on a structured questionnaire Secondary data is gathered from previous studies through various sources such as articles, internet, organization’s database, government surveys and enterprises etc The advantage of secondary data is time saving and inexpensive in comparison with primary data However, secondary data may not suitable to a specific research since they are conducted for another study with different objectives (Ghauri&Gronhaug, 2007); in other words, they are universal for mass audiences Therefore, researchers should use secondary data as reference tool for the first step before proceeding with their own research

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For this research, primary data was collected in accordance with research phenomenon and design of the authors Primary data was consistent with the research purpose The approach was from the customers‟ perceptions; thus, it required interaction with customers The use of primary data from the researchers‟ own surveys was logical access to interviews and get information from targeted respondents The use of questionnaire was suitable in order to interact with respondents to get structured information and find out consumer satisfaction level from their perspectives Data collection was conducted through interactive interviews with customers

3.7 Data Analysis

This study adopted SPSS 20 for windows to analyze the data

Firstly, Descriptive Statistics: To describe the sample profile Reliability Analysis: To assess the internal consistency of the constructs examined in this study by Cronbach’s α coefficient According to Joseph (2010) it mentioned that when Cronbach’s α with values of 0.70 to 0.98

It has higher acceptability

George and Malley (2003, cited in Matkar, 2012, p 94) provide the following techniques: Cronbach’s Alpha Reliability Coefficient (adapted from George and Malley, 2003, cited in Matkar, 2012, p 94)

Cronbach’salpha Internal consistency

α ≥ 0.9 Excellent

0.8 ≤ α <0.9 Good

0.7 ≤ α <0.8 Acceptable

Finally, multiple regression analysis was conducted to analyze the relationship among variables Meyers, Gamst, and Guarino (2006, p.152) and Hair et al (2010, p.156) proposed that the multiple regression standardized score equation is as follows (with all the variables are measured

on the same metric):

Y = β1X1 + β2X2 + … + βnXn

Where in: β is called beta weight, standardized regression coefficient, or beta coefficient

X is the predictor entered into the equation in a single step

βX represents the score of a predictor and its associated beta weight

Table 4.1 shows the demographic characteristics of the sample with regards to gender, age, business field, department andexperience

Male 52 45%

Female 63 55%

Under 25 years old 10 9%

From 25 to 35 years old 47 41%

4.2.2 Exploratory factor analysis

Results showed that the Cronbach’s alpha of the scale in quality components customers’ loyalty have satisfactory reliability Alpha Since Thus, the observed variations of this scale were assessed by further analysis EFA Factor analysis is a multivariate statistical technique which defines the underlying structure among a large number of variables It aims to summarize the information contained in a large number of variables and reduce them into a smaller number of factors (Hair et al 1998)

All the variables were run through the Principal component analysis, using the varimax rotation method Details are as follows:

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First time running factor analysis, there are six factors are drawn (see table 4.3) The items with extraction sums of squared loadings are equal or more than 50% would be acceptable (Gerbing& Anderson 1988)

Rotated Component Matrix a

Component

1 2 3 4 5 6 Cusloy21 Loyalty 755

Rotation Method: Varimax with Kaiser Normalization

a Rotation converged in 11 iterations

Table 4.3: Rotated Component Matrix a

As the results from above table, rotation is converged in 6 iterations The generated factors, the attributes of each factor loadings are presented in Table 4.3 After acceptable factors

in which all variables have a significant loading on a factor have been obtained, the variables with higher loadings have a more significant impact on the factor name (Hair et al., 1998)

As shown in Table 4.3, there are six factors such as Customers’ Loyalty, Customer Relationship Management, Perceived Price Quality, Perceived Product Quality, Perceived Service Quality, and Customers’ Satisfaction These factors were summated into new variables

by the total all of the rating scores for each person on all of the variables which load highly on a factor (Hair et al., 1998) These replacement variables including one dependent variable and five independent variables were entered into the regression equation at the same time And the results are presented in the next section

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Besides, KMO is an indicator considering the appropriateness of EFA Factor analysis is used when the KMO (Kaiser-Meyer-Olkin) value is greater than 0.7 and it is inadequate if less than 0.5 (Morgan 2005) The KMO test tells whether or not enough items are predicted by each factor In this study, the KMO obtained a good number by 856, which meant that sampling of the research was adequate The Bartlett’s test should be significant with significant value of less than 0.05 In this research, the Bartlett’s test of sphericity was also suitable with significant equal 000 (p<.05), which meant that the variables were correlated highly enough to provide a reasonable basic for factor analysis

Table 4.4: KMO and Bartlett’s Test

Moreover, there have onecriterionabout the percentage Cumulative rotation sums of squared loadings According to Hair (1998), require % of cumulative should be 50% above from the result of table 4.6 , we focus on cumulative of sixth factor : 66.354% This means six factors explain 66.354% variability of observed variables and adapted with requirement

Total Variance Explained

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy

.856

Bartlett's Test of Sphericity

Approx Chi-Square 1230.443

df 253 Sig .000