Service quaility, perceived price and customer satisfaction in higher education

Hence, an increase in University service quality or Perceived tuition leads to a higher increase in Student satisfaction extent in Non-public universities compared to Public sector.. STA

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Diep Quoc Bao

SATISFACTION IN HIGHER EDUCATION

A comparison between

Public Universities and Non-public Universities in Vietnam

Ho Chi Minh City – Year 2012

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Diep Quoc Bao

SATISFACTION IN HIGHER EDUCATION

A comparison between

Public Universities and Non-public Universities in Vietnam

ID: 60340102

SUPERVISOR: PROF NGUYEN DONG PHONG

Ho Chi Minh City – Year 2012

ABSTRACT

This study empirically examines the effects of Perceived Tuition on University Service Quality and Student Satisfaction as well as the impact of University Service Quality on Student Satisfaction toward higher education service The research also explores the moderating role of University Type variable on these relationships Structural equation modeling was used to test these impacts, utilizing a sample of 612 students in two Public universities and two Non-public universities

The results indicate that both University Service Quality and Perceived Tuition play significant role in predicting Student Satisfaction In addition, Perceived Tuition not only has a direct impact on Student Satisfaction, but also an indirect influence through University Service Quality The findings of this research also provide evidence of the differences between Public sector and Non-public sector in the influence of Perceived Tuition on University Service Quality, Student Satisfaction, and University Service Quality on Student Satisfaction Particularly, the effect of Perceived Tuition and University Service Quality on Student Satisfaction is much greater in Non-public universities compared to that in Public universities Hence, an increase in University service quality or Perceived tuition leads to a higher increase in Student satisfaction extent in Non-public universities compared to Public sector It implies that university managers have to pay attention to improve their service quality and consider the approach in pricing the service in other to satisfy their students The students are persuaded by the fitness between service quality they receive and the tuition they have

to pay for university compared to other similar tertiary institutions The research findings also engage with some limitations in the strength of measurement scale, the sampling method as well as the fitness between the research model and data It results

in the valuable directions for further researches in future

I wish to express my gratitude to the University of Economics Ho Chi Minh city who have supported me during two years for the Masters degree

Finally, I would like to thank many of my colleagues and friends from the academic and business environment who have offered valuable advice and assistance for me to accomplish my study

STATEMENT OF AUTHENTICATION

(Candidate Certificate)

I certify that the work in the thesis entitled “Service quality, Perceived price and Customer satisfaction in higher education – A comparison between Public universities and Non-public universities in Vietnam” is the result of my own research and has not been submitted for a higher degree to any university or institution other than International School of Business (ISB)

I also certify that the thesis has been written by me Any help and assistance that I have received in my thesis have been appropriately acknowledged

Signed

Date: December, 2012

Title i

Acknowledgement iii

Statement of authentication iv

Table of contents v

Appendix vii

List of Tables viii

List of Figures viii

ABSTRACT 1

Chapter 1 – INTRODUCTION 2

1.1 Higher education in Vietnam 2

1.2 Research problem statement 5

1.3 Research objectives 8

1.4 Scope of the research 8

1.5 Significance of the research 9

1.6 Organization of the thesis 9

Chapter 2 – LITERATURE REVIEW AND HYPOTHESES 11

2.1 Literatures review 12

2.1.1 Customer satisfaction 12

2.1.2 Service quality concept and measurement 12

2.1.3 Service quality in higher education 14

2.1.4 Perceived service price in higher education 16

2.1.5 Customer satisfaction 17

2.1.6 Customer satisfaction in higher education 19

2.1.7 Service quality and customer satisfaction in higher education 19

2.1.8 Perceived price and customer satisfaction in higher education 20

2.1.9 Perceived price and service quality in higher education 21

2.1.10 Moderating effect of University type (Public and Non-public universities) 22

2.2 Research model & hypotheses 24

Chapter 3 – RESEARCH METHODS 26

3.1 Research procedure 27

3.2 Qualitative research design 28

3.3 Quantitative research design 29

3.3.1 Measurement scale 29

3.3.2 Sampling 32

3.3.3 Sample size 33

3.3.4 Data analysis 34

Chapter 4 – DATA ANALYSIS AND REASEARCH RESULTS 35

4.1 Data statistical analysis 36

4.2 Cronbach’s Alpha coefficient of reliability test 36

4.3 Exploratory Factor Analysis (EFA) result 39

4.4 Confirmatory Factor Analysis (CFA) result 42

4.4.1 CFA for University Service Quality scale 42

4.4.2 CFA for Perceived Tuition scale and Student Satisfaction scale 43

4.4.3 Saturated Model 44

4.4.3.1 Discriminant validity test 45

4.4.3.2 Composite reliability and variance extracted 45

4.5 Research model test 46

4.5.1 Theoretical model test by using SEM approach 46

4.5.2 Theoretical model estimation by BOOTSTRAP 49

4.5.3 Results of Multi-group analysis 49

Chapter 5 - DISCUSSION, IMPLICATIONS AND LIMITATIONS 55

5.1 Discussion and implications of the research 56

5.2 Limitations and directions for further research 58

CONCLUSION 61

REFERENCES 62

Appendix 3.1 - Script for focus group interview 68

Appendix 3.2 - The qualitative research findings 70

Appendix 3.3 – Questionnaire 73

Appendix 4.1 - The result of EFA analysis 79

Appendix 4.2 - The result of CFA for University service quality (Sequa) scale 83

Appendix 4.3 - The result of CFA for Sequa scale (Nacadm5 excluded) 84

Appendix 4.4 - Correlations (CFA result for Sequa scale) 85

Appendix 4.5 - Saturated model 85

Appendix 4.6 - Saturated model (Tuiti5, Undst1, Undst2 excluded) 86

Appendix 4.7 - Correlations (SEM result for Saturated model) 86

Appendix 4.8 - The result for multi-group analysis of variance model and partial invariance model (University type variable) 87

Table 3.1 : Measurement scales

Table 4.1 : Descriptive statistics of the data

Table 4.2 : Cronbach’s Alpha coefficients for each measurement scale

Table 4.3 : EFA analysis result

Table 4.4 : Cronbach’ Alpha results after excluding unsatisfactory items

Table 4.5 : The results for reliability and variance extracted test

Table 4.6 : The relations among concepts in research model (standardized) Table 4.7 : The results for Bootstrap estimation

Table 4.10 : The difference between fitness indices of variance model and partial

Invariance model in term of university type (unstandardized) Table 4.11 : Relations among concepts in variant model in term of university type

(unstandardized estimates) Table 4.12 : The impacts of Perceived tuition on Student satisfaction description

(unstandardized estimates)

LIST OF FIGURES

Figure 2.1 : The model of customer satisfaction

Figure 2.2 : Research model

Figure 3.1 : Research procedure

Figure 4.1 : CFA result for University Service Quality scale (Standardized) Figure 4.2 : SEM analysis result for saturated model (Standardized estimates) Figure 4.3 : The result for theoretical model test (standardized)

Figure 4.4 : The SEM results of variance and partial invariance model

(According to University type)

Chapter 1 INTRODUCTION

1.1 Higher education in Vietnam

According to the Vietnamese Education Law in 2012, higher education covers undergraduate and postgraduate studies Undergraduate studies can lead to diploma or bachelor degrees while postgraduate studies can lead to master degrees and doctorate degrees In Vietnam higher education system, higher education institutions are structured including: Colleges can offer college programs and other lower level programs; Universities can offer college, undergraduate, master and doctorate programs as assigned by the Prime Minister; Research institutes can offer doctorate programs and in cooperating with universities can offer master programs subject to permission from the Prime Minister

In the tertiary education institutes system, Vietnam has two forms: public universities and colleges which are funded by the Government and non-public institutes which including semi-State, self-funded or private universities and colleges, regarding to Decision 9/2001/QD-BGD&DT of the Ministry of Education and Training dated 28 August, year 2001 There is a fundamental difference in managerial perspective of the Government between these two sectors The public sector has to follow strictly the regulations of the Government in tuition policies and financial aspects, according to Decree 49/2010/ND-CP of the Government dated 14 May, year 2010, while the non-public sector has more self-control

Over the past 10 years, higher education in Vietnam has experienced many changes, consisting of expansion as well as establishment of new educational institutions with diversified types and improvement in quality (Nguyen, Oliver, Priddy, 2009)

According to the statistics of Ministry of Education and Training, Vietnam have 386 universities and colleges in 2011 with 306 public institutes and 80 non-public universities and colleges This number is increasing to 409 institutes at the beginning period of the year 2012 (Vietnam education system, 2012) Nevertheless, the opportunities for higher education in Vietnam are limited and the quality control is also

an existing problem of the system (Nuffic Nesco Vietnam, 2009) The continuous increase in the number of not only public but also non-public universities and colleges

in Vietnam from 322 institutions in 2006 to 409 institutions in 2012, according to the statistics of Ministry of Education and Training from 1999 to 2012, is facing with many challenges in quality assurance The reality shows that faculty qualifications are generally low and vary significantly across forms of tertiary education institutions (Nuffic Nesco Vietnam, 2009) The report No.760 of Ministry of Education and Training (2009) conceded that it is too difficult for the Ministry of Education and Training to control all the higher education institutions in whole country Especially, in non-public sector, the managerial role of Ministry of Education and Training is very limited and not create effectiveness yet (Mai Lan, 2011)

Although non-public tertiary education is one of the most significantly developing sector of the higher education system in 21st century (Philip, 2002), the non-public higher education in Vietnam is in the crisis (Mai Lan, 2011) In an interview, the Vice Minister of Ministry of Education and Training - Bui Van Ga stated that non-public tertiary educators need to focus on improving the quality to create the prestige in society and attract more students (Vietnamese education, 2011) Quality in higher education is one of the aspects attracting more and more attentions of society and learners There is a lack of uniform development in quality between public and non-public sectors in Vietnamese higher education system

In line with quality problems, other outstanding issue in higher education between

public sector and non-public sector is the tuition - tuition is an amount of money which learners or learner„s families have to pay in order to ensure the expenditures for the educational operations – due to the non-public education institutions have more self-

right to decide the level of tuition, regarding to Decree 49/2010/ND-CP of the Government dated 14 May, year 2010, tuition is taken into the dominant consideration

of learners (Huy Lan, 2012) The Vice Minister of Ministry of Education and Training

- Bui Van Ga required the non-public education organizations have to provide explicitly about their tuition rate to help the learners have right decision in registration and avoid later dissatisfaction The students expect high service quality corresponding

to tuition of the universities (Do Hop, 2012) The relationship between service quality

in higher education and the price – tuition – which the students have to pay for service received needs to be considered adequately

In the Fundamental and Comprehensive Renovation of Higher Education during 2006−2020 addressed in Resolution 14/2005/NQ-CP of the Government dated 2 November, year 2005, the objective emphasized in building and developing quality assurance system for higher education However, Vietnamese educators and educational leaders are still confused about how to implement quality assurance and accreditation in the Vietnamese context (Nguyen, Oliver, Priddy, 2009)

Associate with the growth of higher education in quality and quantity, students have more choices for their studying and using services As the students pay for complete expenditure for their learning at tertiary institutes, they deserve the best education services to satisfy their requirements (Senthilkumar & Arulraj, 2010) Therefore, the education institutions are striving to attract customers by offering their best services and reasonable tuition rate Given this situation, a study of relationships of service

quality, price and customer satisfaction in higher education in Vietnam, especially, in the specific context of public sector and non-public sector, would be useful for practitioners and researchers

1.2 Research problem statement

The important role of service industries is increasing in line with the development of the economy in many countries (Pham & Le, 2010) Service sector attracts more and more attentions of real business world and research fields There is a variety of studies conducted to explore different service issues in order to support the real business activities as well as enrich the academic world In which, the researches of service quality, and customer satisfaction have dominated the service theories (Cronin, Brady

& Hult, 2000) The major attention is to identify the relationships among these concepts Cronin and Taylor (1992) identified that service quality is an antecedent of customer satisfaction Furthermore, the influence of service quality on customer satisfaction was more complicated because of the interaction between these concepts (Cronin et al., 2000) Moreover, customer satisfaction is not only influenced by service quality, but also the other aspects consisting product quality, price, situational factors, personal factors (Zeithaml et al., 2000, p 107) Accordingly, price is a multidimensional concept, including objective price, perceived price, monetary and nonmonetary service price (Zeithaml, 1988) A number of studies conducted popularly using perceived price, which is the perception of customer about what is sacrificed to obtain the service, instead of objective price due to the complex pricing environment of services (Chen et al, 1993) However, the price component has not been thoroughly investigated in previous empirical study (Bei & Chiao, 2001 as cited in David et al., 2007) especially in relationship with service quality and customer satisfaction

Senthilkumar and Arulraj (2010) stated that among the service sectors, higher education system has direct bearing on society for society and economic development The higher education institutes paid more and more attention to service quality and customer satisfaction as tertiary education service industry moves to the era of commercialization (Brown & Clignet, 2000, as cited in Kathleen & Julie, 2001) In comparison with commercial sector, the research of service quality in higher education field is still new (Parves & Ho, 2010) Chua (2004) explored that most of quality models studied in the business world have been adapted and applied in the education sector It may not have a single accurate definition of quality in higher education because this concept is complicated and multifaceted (Harvey & Green, 1993) It leads

to the lack of best approach to define and measure service quality (Clewes, 2003) The majority of researches in last few decades concentrated on the dimensional approach of service quality (Parves & Ho, 2010) Parasuraman et al (1985, 1988) developed the measurement scale SERVQUAL based on the concept quality is the perception minus expectation Cronin and Taylor (1992, 1994) explored the other instrument to measure service quality, namely, SERPERF – service performance – based on the perception component alone Among these scales, SERVQUAL is mostly criticized and widely applied in many industries (Ana & Rui, 2009) However, SERVQUAL and SERPERF were designed as generic measures of service quality and applied in cross industries, not for any specific field Although the use of these approaches have been tested with some degree of success in many industries, but it is important to require an instrument

to fit the specific application situation, particularly, higher education (Firdaus, 2006) These problems led to the development of new measurement scale of service quality in higher education, namely, HEDPERF – Higher Education Performance, established by Firdaus in 2006 This instrument specifically designed for higher education sector using context-specific items in this industry In order to enhance the power of HEDPERF in measuring service quality in the context of tertiary education, Firdaus

(2006) conducted a research to compare HEDPERF and SERPERF and the findings showed that HEDPERF was more reliable estimations, greater explanation, and consequently better fit than SERPERF Nevertheless, existing studies about HEDPERF have just only conducted in several countries and just in one university scope, such as Malaysia (Firdaus, 2005, 2006) and Portugal (Ana & Rui, 2009) This instrument needs

to be applied in other countries and other tertiary institution (Firdaus, 2006)

Measuring service quality and customer satisfaction in higher education context is one

of the most considerations of tertiary educators Although customer satisfaction in higher education is also not an easy task to attempt (Corneliu et al., 2010) and there is

no generally measurement scale for customer satisfaction in higher education, the majority of recent studies consider service quality as an antecedent to customer satisfaction (Garcia, 2009) In Vietnam higher education context, despite service quality and customer satisfaction are the concepts attracting many researchers to investigate the relationships among them, very few studies pay attention to adapt the new instrument HEDPERF to identify and measure the dimensions of service quality affecting to customer satisfaction, almost resent findings focus on SERVQUAL or SERPERF as well as emphasize on particularly one tertiary institution, so that the generalization is limited

Base on aforementioned analysis about the current situation of higher education in Vietnam and existing findings about service quality, price and customer satisfaction in tertiary education area, in an attempt to explore the relationships among service quality, service price and customer satisfaction toward higher education services, this study employs the dimensions of service quality in higher education context through HEDPERF scale to explain the customer satisfaction and to compare these relationship

between the two sectors: public and non-public higher education institutions In

addition, this research also puts perceived tuition as an independent variable about

perceived monetary service price dimension affecting to service quality and customer satisfaction into the research model to test these relationships All concepts will be explained and analyzed more detailed in the literature review section

1.3 Research objectives

According to above discussion, this study is formulated to obtain following objectives:

(1) To test the impact of university service quality on student satisfaction in

higher education service

(2) To test the impact of perceived tuition on student satisfaction in higher

education service;

(3) To test the impact of perceived tuition on university service quality in

higher education service;

(4) To explore the differences in above relationships of university service

quality, perceived tuition and student satisfaction between two types of university (public universities and non-public universities)

1.4 Scope of the research

The empirical setting in this particular research is the business higher education in the context of Ho Chi Minh City, Vietnam Particularly, data collected from two public universities as well as two non-public universities in Ho Chi Minh City and put into analysis and comparison The study employs the determinants of higher education service quality through the instrument scale HEDPERF and perceived price dimension – perceived tuition - to explain the impacts on customer satisfaction toward the tertiary education and ignore other antecedents of customer satisfaction The last point needs to

be mentioned is that the subject of study and observation is the under-graduate students only, not includes other customers or stakeholders of university

1.5 Significance of the research

According to the theoretical perspective, this study contributes to the application of the new measurement instrument HEDPERF into the context of higher education in Vietnam It is a meaningful outcome for the researchers in this specific service industry

as existing studies have focused on SERVQUAL and SERVPERF approaches repeatedly

Regard to the managerial implications, this finding will help higher education institutes understand obviously about the components of their service quality affecting to satisfaction of their customers as well as the link between perceived tuition and service quality, whereby they can improve their performance to increase the level of satisfaction In addition, the comparison between public sector and non-public sector aims to provide specific determinants to fit with each context It brings more valuable practical implications

1.6 Organization of the thesis

This research is constructed in five parts The first is the introduction of the study The second is the literatures review and hypotheses Following is the research method The next part is the results and limitations of the findings The conclusion comprises the final section of this research

 Chapter 1 – Introduction

This chapter reflects the current situation of higher education in Vietnam, as well as discusses about the existing researches in relationships of service quality, perceived price and customer satisfaction in tertiary education It leads to propose the research problem, research objectives and significance of this study also presented in this section

 Chapter 2 - Literatures review and hypotheses

Chapter 2 presents the theoretical foundation of the research, including the definition of each concept, namely, service quality, perceived price, customer satisfaction in higher education context and their relationship in literature From that, the hypotheses are derived and proposed for this research

 Chapter 3 - Research methods

Research method describes the way of establishment of the measures and conducting the survey This part includes two steps, qualitative research to modify draft measurement scale and quantitative research design to test the hypotheses

 Chapter 4 – Research results

Chapter 4 designed to present the findings of this research The results are exhibited corresponding to each step of the data analysis Accordingly, the research hypotheses are tested

 Chapter 5 – Discussion, Implications and Limitations

The last chapter of this study discusses the research results by affirming the exploratory values as well as connecting to the realistic conditions to suggest the practical application Lastly, the limitations are recognized to direct for further research in the future

Chapter 2 LITERATURES REVIEW AND HYPOTHESES

Introduction

Chapter 2 reviews and discusses about the theories of service quality, perceived price, customer satisfaction and the relationships among these concepts in service industries, especially in higher education context

Accordingly, the existing researches employed various approaches to measure service quality perceived by customer Among them, SERVQUAL and SERPERF are the popular instruments applied in many service fields However, the higher education service industry experienced the development of new measurement scale for service quality – HEDPERF (Firdaus, 2006), which is specifically designed for this particular environment but has not tested in many countries yet Hence, this research approaches six components of HEDPERF, namely, Non-academic aspects, Academic aspects, Reputation, Access, Understanding and Program issues to measure the construct university service quality

In regard to service price, this chapter also argues to take perceived monetary price interpreted in higher education is perceived tuition into the research model Besides, customer satisfaction concept is approached by the standpoint of primary customer of higher education service that is student satisfaction Following these arguments, a research model is set up with the hypotheses

2.1 Literatures review

2.1.1 Customers of higher education

In higher education field, the definition of customer is identified by various groups of stakeholders Weaver (1976) (as cited in Firdaus, 2006) indicated four parties of potential customers, including: the government, the administrators of Government, the teachers /academics and actual customers (learners, their families, employers, society

as a whole) Among these groups of customer, students are generally assumed to be the principal customers because they are product of learning process and the internal customer (Sirvanci, 1996) Similarly, Galloway (1998) confirmed that the primary customer in education service is the student Hence, it becomes important to identify determinants of service quality in higher education from the standpoint of students (Firdaus, 2006)

In this empirical study, it aims to utilize the determinants of service quality through HEDPERF instrument to predict the customer satisfaction based on the standpoint of students as primary customer Therefore, the concept of service quality and price are perceived by students and customer satisfaction implies to students satisfaction

2.1.2 Service quality concept and measurement

The customers-perceived service quality has been issues researched extensively (Corneliu Munteanu et al., 2010) Among the primary conceptualizations of service

quality, Lewis and Booms (1983, p.100) defined service quality as a ―measure of how well the service level delivered matches the customer‟s expectations.‖ Later,

Parasuraman et al (1985) took dimensional approach to define that service quality is a function of the differences between expectation and performance along the quality

dimensions Base on gap analysis between expected service and perceived service, they developed a service quality model, including:

Gap 1: Difference between expectation of consumers and perceptions of service

managers about those expectations;

Gap 2: Difference between perceptions of service managers about consumer‘s

expectations and service quality specifications;

Gap 3: Difference between service quality specifications and actual service

delivered to consumers

Gap 4: Difference between actual service delivery and the information

consumers received through communications about service delivery;

Gap 5: Difference between consumer‘s expectation and actual service perceived

by consumers; this gap covers the four previous gaps (Parasuraman et al,

as cited in Nitin Seth et al, 2004)

Base on this exploratory research, SERVQUAL scale is developed to measure customers‘ perceptions of service quality SERVQUAL approaches five dimensions of service quality:

(1) Tangibility (the physical appearance of facilities, personnel, and equipment materials);

(2) Reliability (the ability to perform the service accurately and dependably)

(3) Responsiveness (the ability to provide prompt service);

(4) Assurance (the ability to convey trust and confidence);

(5) Empathy (the ability to provide individualized attention to customers)

The SERVQUAL scale measures service quality through 22 items of five above dimensions (Parasuraman et al., 1988, 1991)

Although SERVQUAL is criticized by many researchers, it still seems to be the most practical model for measuring service quality (Cuthbert, 1996b) Cronin and Taylor (1992) suggested that measuring service quality through the gap model was not adequate in conceptual and operational levels so they approached service quality as derived from perception of performance only and developed the performance-based instrument to measure service quality called SERPERF In essence, SERPERF was a variant of SERVQUAL but SERPERF explained more of the variance in service quality measurement than SERVQUAL (Cronin & Taylor, 1994) Nevertheless, in the context of higher education, SERVQUAL measurement scale is more popular and applied extensively than SERPERF instrument (Ana & Rui, 2009)

2.1.3 Service quality in higher education

In higher education circumstance, the best approach to define service quality is still a considerable debate (Becket & Brookes, 2006) The studies of service quality in tertiary education develop relevant measurement instrument conceptualizing SERVQUAL or SERPERF (Parves & Ho, 2010) Many researchers have been undertaking customization of established service quality dimensions in higher education in their measurement instruments (Firdaus, 2006) Although the generic measures of service quality have had strong impacts on service quality domain in theory and practice, it may not be a subsequent instrument to assess the perceived quality in higher education context (Senthilkumar & Arulraj, 2010) It leads to the requirement of a specific service quality measurement instrument for higher education

Firdaus (2006) developed a new measuring instrument of service quality for higher education sector specifically, namely, HEdPERF – Higher Education Performance – a new and more comprehensive approach based on performance, which consists of six factors:

 Factor1: non-academic aspects This factor consists of items related to

duties undertook by non-academic staff which are necessary for students to implement their study responsibilities

 Factor2: academic aspects This factor refers solely to the responsibilities

of academics

 Factor3: reputation This factor is described by the items that suggest the

importance of tertiary institutions in developing a professional image

 Factor4: access This factor consists of items that associate with such

issues as approachability, ease of contact, availability and convenience

 Factor5: understanding This factor mentions to the attention of students

specific need regarding to counseling services as well as health services

 Factor6: programs issues This factor includes the items related to the

ability of providing various and reputable academic programs, major specializations with flexibility in structure and syllabus (Firdaus, 2006)

This instrument scale measures service quality in higher education through 41 items of six factors: non-academic aspects; academic aspects; reputation; access; programs issues; understanding and based on the standpoint of student as the primary customers

in tertiary education industry

In comparative research among measurement instruments in higher education in Portugal, Ana and Rui (2009) concluded that SERPERF and HEDPERF present the best measurement capabilities In similar study, Firdaus (2005) demonstrated the HEDPERF was generally superior measurement scale in the context of higher education Nevertheless, HEDPERF still has some of limitations One of them is the scope of the findings is just examined within a single industry, and in only one national

setting, so the power of HEDPERF scale would still be premature (Senthilkumar & Arulraj, 2010)

Founded on conceptualizing service quality in higher education, this research aims to employ the determinants of service quality in higher education through HEDPERF instrument to explain customer satisfaction because this scale is more specific as well

as comprehensive in higher education context In addition, HEDPERF was developed

in 2006 but not applied extensively in many countries and forms of higher education institutions, so it is valuable to adapt this instrument into Vietnam circumstance

2.1.4 Perceived service price in higher education

In term of price definition, Zeithaml (1988) conceptualized that price is something that must be sacrificed to obtain certain types of products or services from customers perception Indeed, price is a component of products or services and has links to other factors of customer‘s conception and behaviors in using products or services

According to the service price component, Jacoby and Olson (1977) (as cited in

Carmen et al., 2006) stated that the price includes an objective price which is the actual cost of service and the perceived price, that is found and encoded by the user of

service Whereby, it can be seen that price is multidimensional construct Zeithaml (1988) also classified price components, including following categories: objective price, perceived non-monetary price and sacrifice Among these categories, objective monetary price is frequently not the price encoded by consumers In the other hand, perceived price defined as customer perception about what is sacrificed to obtain a service (Zeithaml, 1998; Lien & Yu, 2001; Aga & Safakli, 2007 as cited in Sik et al, 2011) Accordingly, Lien and Yu (2001) stated that perceived price can be measured

by fairness of price to be paid It can be seen that customers have tendency to compare

the price of products or services, for which they have to pay, with the other offers to perceive that it is reasonable or not Hence, the customers will be more satisfactory with a product or service as they perceive that price more reasonable or cheaper

It is difficult to use objective price to determine its role due to the complex pricing environment of services, perceived price was proposed to use in many researches (Chen et al, 1993) In the higher education context, this research approaches the previous descriptions to define student perceived price as the student evaluation of what is given or sacrificed to obtain the higher education services from universities In regard to research scope, this study just employs perceived price in monetary dimension as the tuition – which is the amount of money students have to pay for higher education services received from universities Thus, service perceived price concept used in this research as the student perceived tuition

―In quality management context, customer satisfaction is often defined as a result of comparison between what one customer expects about services provided by a service provider and what one customer receives actual services by a service provider‖

(Nek et al, 2009, page 2)

In the regard of measuring customer satisfaction, there are many different approaches Cronin & Taylor (1992) measured customer satisfaction as a one-item scale that asks

Figure 2.1 – The model of customer satisfaction

Source: Zeithaml & Bitner (2000), Services Marketing, McGraw-Hill

While service quality and customer satisfaction have attracted both the researchers and practitioners attention into the exploration of their interrelations (Eshghi et al., 2008 as cited in Chingang and Lukong, 2010), price has not been thoroughly investigated in previous empirical study (Bei and Chiao, 2001 as cited in David et al., 2007)

This study attempts to analyze the customer satisfaction through the impacts of both service quality and price dimension in higher education context

2.1.6 Customer satisfaction in higher education

Customer satisfaction translated into the higher education context is that satisfaction of the student – as the principal customer of university services (Sirvanci, 1996) In a research of Corneliu et al (2010), student satisfaction was defined as evaluative summary of direct educational experience, based on the prior expectation and the perceived performance Measuring student satisfaction is not an easy task because of the lack of consensus on the definition of satisfaction as a concept with the service Hence, there is no generally accepted measurement scale for customer satisfaction in higher education (Garcia, 2009 as cited in Basherr & Ahmad, 2012)

In this applied research, the measurement scale for student satisfaction adapted from the solely customer satisfaction scale of Taylor and Baker (1994)

2.1.7 Relationship between service quality and customer satisfaction in higher education

The relationship between service quality and customer satisfaction have received great deal of attention from scholars and practitioners (Eshghi et al., 2008 as cited in Chingang & Lukong, 2010) Many scholars investigated that service quality has a significant impact on customer satisfaction (Gronroos, 1984; Parasuraman et al 1988) However, the others argued that customer satisfaction is as an antecedent to service quality (e.g AI-alak, 2006; Bitner, 1990, as cited in Basherr & Ahmad, 2012)

The higher education literature supports that student‗s perceived service quality is an antecedent to student customer satisfaction (Browne et al., 1988; Guolla, 1999; AI-alak, 2009, as cited in Basherr & Ahmad, 2012) This study follows the majority of recent researches regarding to the service quality as an antecedent to satisfaction A number of previous researches have utilized the SERVQUAL framework to explore the

student perceptions of quality and satisfaction (John Davies et al., 2007) However, it is not specific relevant to the context of student particularly It needs to identify and measure the link between performance of specific service quality dimensions and student satisfaction in higher education circumstance (Corneliu et al., 2010) For the reasons analyzed above, this research aims to employ the service quality dimensions through HEDPERF paradigm – specific measurement scale of service quality in higher education – to explain the relationship with student satisfaction Accordingly,

H1: University Service Quality has a positive impact on Student Satisfaction toward

a higher education service

2.1.8 Relationship between perceived price and customer satisfaction in higher education

The marketing theories emphasized price as an important factor of customer satisfaction (David et al., 2007) It is enhanced by the findings of Zeithaml and Bitner (1996) that the extent of satisfaction was subject to factors of service quality, product quality, price, situational factors and personal factors However, the fact is that price has received little attention when analyzing customer satisfaction (David et al., 2007)

In research of the relationship between price and customer satisfaction, the impact of price on customer satisfaction is not deniable (Zeithaml, 1988; David et al., 2007; Carmen et al., 2006) Sik et al (2011) also stated that customer perceived service quality and perceived price are two factors that have been proven empirically as customer satisfaction determinants Regard to the context of higher education, this relationship is also demonstrated by Carmen et al (2006) and Sik et al (2011), that is, the student perceived price definitely influences the level of customer satisfaction with university services Furthermore, in which, the price of obtaining service is the component that causes the greatest impact on customer satisfaction toward university services In one of attempts to test the relationship between perceived price and

customer satisfaction in higher education, this study approaches the monetary price as the actual cost of obtaining service to analyze To associate with the current situation of higher education in Vietnam, which is discussed above this study utilizes the perceived

monetary price of higher education service as the perceived tuition solely The other

categories of service price are out of the scope of the research Therefore,

H2: There is a positive impact of Perceived Tuition on Student Satisfaction toward a

higher education service

2.1.9 Relationship between perceived price and service quality in higher education

As mentioned above, price is a significant dimension in relationship with customer satisfaction beside the service quality However, the relationships among service quality, price, and customer satisfaction not only emphasize on the impacts of service quality and price on customer satisfaction, but also consider the link between price and service quality because whenever customers evaluate the value of an acquired product

or service, they usually think of the price (David et al., 2007) Yoo et al (2000) indicated that consumers use price as an important indicator of product quality Therefore, perceived price is positively related to perceived quality In higher education service sector particularly, Carmen et al (2006) also found that the price of a service is normally thought to be an indicator of service quality, the higher the perceived price, the better the service is believed to be Supporting to this influence, many researchers confirms the existence of positive relationship between the perceived price of a service and its quality (Carmen et al., 2006) Chen et al (1993) also found that the perceived price and service quality relationship is service specific

In context of higher education, the students have to pay all expenditures for universities services, so they expect the best service received to satisfy their requirements As previous analysis, a major part of total price in universities services can be considered

is tuition Whereby, this research attempts to test the impact of student perceived tuition on service quality in higher education service Base on aforementioned literature review, it is proposed that:

H3: There is a positive impact of Perceived Tuition on University Service Quality

perceived by student

2.1.10 Moderating effect of University type (Public universities and Non-public universities)

A comparison between Public sector and Non-public sector in the above relationships

of university service quality, perceived tuition and student satisfaction is also one of the research objectives It is implemented by exploring the moderating effect of University type, which consists of two types, Public sector and Non-public sector, on the impact of perceived tuition on university service quality, student satisfaction and the influence of university service quality on student satisfaction

In Vietnamese context, the establishment of Non-public universities has brought more opportunities for students to learn in higher education level as well as satisfied partly for society requirements of high educated human resources Nevertheless, the training quality of these institutions is still a carefully considered issue The students studying

in Non-public sector often have lower learning ability due to lower standards of enrolment exams compared to Public university students Moreover, the current education system in Public sector is better than that in Non-public sector regarding to the academic staff, training program, qualification of certificates In term of the tuition fees, it can be obviously seen that Public universities are sponsored by government for operation costs so that their tuition fees are much lower than the amount students have

to incur in Non-public universities Given differences leading to the effects on students learning at each type of university are inevitable Thus, many researches exploited the

differences between Public sector and Non-public sector to compare in various aspects (Noah, 2006) In a research of Ullah et al (2011) explored that students in public sector and private sector perceived differently about the quality indicators of higher education

in Pakistan Nguyen and Nguyen (2009) also employed the difference between these university types to determine the controlling effects of learning motivation on student quality of college life in Vietnam Other evidence can be mentioned is the study of Romero and Rey (2004) to analyze the competition between public and private universities according to service quality, service price and exams The findings of this research indicated that there were differences among relations of service quality, service price and student attraction ability of the public and private universities

The aforementioned discussions give foundation to propose that university type plays considerable effect in many relations among aspects of higher education This research also puts university type into analyzing moderating effect in the impact of perceived tuition on university service quality and student satisfaction as well as the impact of university service quality on student satisfaction toward higher education service comparing between public universities and non-public universities Accordingly,

H4: The impact of University Service Quality on Student Satisfaction toward a

higher education service will be affected by University type (Public and public sector)

Non-H5: The impact of Perceived Tuition on Student Satisfaction will be affected by

University type (Public sector and Non-public sector)

H6: The impact of Perceived Tuition on University Service Quality will be affected

by University type (Public sector and Non-public sector)

2.2 Research model & hypotheses

With the existing circumstance of higher education in Vietnam and literature review about the service quality, price and customer satisfaction analyzed up to now, this study aims to employ the dimensions of service quality in higher education context through HEDPERF scale (including six aspects: non-academic aspects, academic aspects, reputation factor, assess factor, program issues, understanding factors) and puts perceived tuition as an independent variable about price dimension affecting to customer satisfaction into the research model to predict the student satisfaction in higher education Besides, the study also tests the influence of perceived tuition to perceived service quality in the higher education circumstance Furthermore, this research aims to compares these relationships among service quality, tuition, and

student satisfaction between the two sectors: public and non-public higher education institutions in Vietnamese context to explore the specific differences

Figure 2.2 – Research model

H5 H6

H2(+)

H4 H3(+)

Conclusion of Chapter 2

Base on the theoretical foundation about the service quality, perceived price and customer satisfaction in higher education as well as the moderating role of university type, this chapter presents positive impact of perceived tuition on university service quality and student satisfaction as well as the positive effect of university service quality on student satisfaction It also points out the moderating effect of university types on these above relationships between public universities and non-public universities Following these discussions, a research model is set up with six hypotheses

Chapter 3 RESEARCH METHODS

Introduction

This chapter presents about the method and research design used in the current study to explore the relationships among University service quality, Perceived price and Student satisfaction toward higher education service in Vietnam The research procedure is implemented through a combination between qualitative research and quantitative research

In qualitative research, the purpose is to clarify the concepts and interpret the items in measurement scales into the higher education context based on the standpoint of student Furthermore, the necessary adjustments are conducted to enhance the power of the scales The focus-group interview technique is used with two six-participant groups

of third year and last year students in public and non-public universities, based on the interview script prepared in advance Based on the qualitative research findings, measurement scales are modified before being employed for main survey in quantitative research In regard to survey sampling, the data is collected by convenience sampling method from the under-graduate students in two public universities and two non-public universities

Chapter 3 also mentions about the procedure to analyze the data collected Accordingly, the process includes test of cronbach‘s alpha coefficient of reliability, EFA by SPSS software and CFA technique, SEM test by AMOS software

3.2 Qualitative research design

The purpose of qualitative research step was to make clear the concepts and interpret the items from measurement scale based on the standpoint of customer Hence, the necessary modification can be carried out in order to increase the power of scale In addition, this step also provided the opportunities to gain new idea, new items to enhance the research model and measurement scale

The technique employed was the focus-group interview – the most well known group interview technique - because it can provide historical information and the interaction will enrich the information for research (Donald & Pamela, 2006) It was valuable in the scenario of this research as helping researcher obtain general background about the topic, interpret existing researched findings and provide new idea for modifying and supplementing new components

The participants of focus group were the undergraduate student in public and public universities in business in HCM city It was consistent of the purpose of the research is to explore the standpoint of ―primary customer‖ of higher education service, that is student Moreover, participants were chosen from third year and last year students to make sure that they have experiences in performance of higher education service

non-The focus group was designed by 6 participants join a group, they were chosen from both public and non-public sector to ensure the generalization of the opinions In addition, the participants had not joined any interview about higher education service within nearest 6 months The general rule is keep conducting focus group interviews until no new insights are gained (Donald & Pamela, 2006) The script for interview was prepared in advance and the extracted in the appendix 3.1 The researcher led the

discussion in focus group interview The interviewees presented their private opinions according to the questions in script prepared by researcher before and criticized the previous ideas until no insights were gained The researcher recapitulated the opinions and kept the contents achieved more than or equal 2/3 agreement among interviewees

The findings of focus group interview got agreements of interviewers on some contents, indicated that they confirmed that the factors of service quality in higher education, perceived tuition suggested in measurement scale of this research are meaningful and necessary for resulting in student satisfaction However, the measurement scale has some items which are not suitable for the Vietnamese conditions, especially the current higher education environment of Vietnam They need modified, complemented to be more appropriate Detail qualitative research result is in appendix 3.2

3.3 Quantitative research design

3.3.1 Measurement scale

Measurement scale for service quality in higher education industry was adapted from Firdaus (2006) and modified through qualitative research with 37 items Perceived price scale was adapted from Carmen et al (2006) and Chen et al (1994) with 5 items and interpreted into higher education context The customer satisfaction scale was adapted from Taylor and Baker (1994) with 5 items and interpreted into higher education context These scales were five-point Likert type from 1 - strongly disagree

to 5 - strongly agree

Table 3.1 – Measurement scales

University Service Quality scale

This scale is measured through the student pleasure of non-academic aspects (relates to the duties of non-academic staff), academic aspects (relates to responsibilities of academics), reputation (reflect the professional image of the university), access (refers to the convenience, availability, approachability of the service), understanding (consists of activities in counseling and health services), program issues (associates with the variety, flexibility of the programs and specializations)

Non-academic aspects scale

Nacdm1 When I have a problem, administrative staff show a sincere interest in solving it

Nacdm2 Administrative staff provide caring and individual attention

Nacdm3 Inquiries/complaints are dealt with efficiently and promptly

Nacdm4 Administrative staff are never too busy to respond to a request for assistance

Nacdm5 When the staff promise to do something by a certain time, they do so

Nacdm6 Administrative staff show positive work attitude towards students

Nacdm7 Administrative staff communicate well with students

Nacdm8 I feel secure and confident in my dealings with this institution

Academic aspects scale

Acadm1 Academic staff have the knowledge to answer my questions relating to the course

Acadm2 Academic staff deal with me in a caring and courteous manner

Acadm3 Academic staff are never too busy to respond to my request for assistance

Acadm4 When I have a problem, academic staff show a sincere interest in solving it

Acadm5 Academic staff show positive attitude towards students

Acadm6 Academic staff communicate well in the classroom

Acadm7 Academic staff has a precise method to appraise my studying performance

Acadm8 Academic staff are highly educated and experience in their respective field

Reputation scale

Reptt1 The institution has a professional appearance/image

Reptt2 The hostel facilities and equipment are adequate and necessary

Reptt3 Academic facilities are adequate and necessary

Reptt4 Class sizes are kept to minimum to allow personal attention

Reptt5 The institution‘s graduates are easily employable

Reptt6 The institution has an ideal location with excellent campus layout and appearance

Access scale

Acces1 Students are treated equally and with respect by the staff

Acces2 The staff respect my confidentiality when I disclosed information to them

Acces3 The staff ensure that they are easily contacted by telephone

Acces4 The institution encourages and promotes the setting up of student‘s union

Acces5 The institution values feedback from students to improve service performance

Acces6 The institution has a standardized and simple service delivery procedures

Understanding scale

Undst1 Health services are adequate and necessary

Undst2 The institution operates an excellent counseling services in specializations orientation

Undst3 The institution operates an excellent counseling services in career orientation

Undst4 The institution supports you effectively in planning your studying progress

Program issues scale

Progr1 The institution offers a wide range of programs with various specializations

Progr2 The institution offers programs with flexible syllabus and structure

Progr3 The institution offers highly reputable programs

Progr4 The institution offers programs which satisfy job requirements in reality

Progr5 The programs consist of academic knowledge and applicable skills

Perceived Tuition scale

This scale is measured by the student perception of the reasonability between the tuition paid and service received from the university compared to other similar offers

Tuiti1 The tuition fees set for the university service are adequate for the work performed

Tuiti2 The tuition fees are more reasonable than other similar offers

Tuiti3 This university service is more economical than other similar offers

Tuiti4 This university service offers good products and low tuition than others

Tuiti5 I do not care about the tuition The only thing I am interested in is the quality of the

service received

Student Satisfaction scale

This scale reflects the evaluative summary of direct educational experience, based on the prior expectation and the perceived performance The result of this judgment leads to the extent of student satisfaction

Satif1 Overall, this university service matches my expectations

Satif2 This university service better than other

Satif3 Buying this university service is usually a satisfying experience

Satif4 I feel being satisfied with this university service

Satif5 I would be happy with this university service in the future

3.3.2 Sampling

The research hypotheses were tested using data set collected from under-graduate students in business higher education field in Ho Chi Minh City, Vietnam In particularly, this study aimed to collect data from the under-graduated students in business higher education of four universities in Ho Chi Minh City, including: two

public universities which were the national major universities in Ho Chi Minh City,

they were University of Economics Ho Chi Minh City (public sector), University of Economics and Law (public sector), and two non-public universities which were the universities setting high and medium tuition levels in 2012 in Non-public sector, they