The influence of relationship quality on customer loyalty a study of veterinary companies and their agencies in vietnam

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business --- Nguyen Dac Huy THE INFLUENCE OF RELATIONSHIP QUALITY ON CUSTOMER LOYALTY – A STUDY OF VETERINARY COMPANIES

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-

Nguyen Dac Huy

THE INFLUENCE OF RELATIONSHIP QUALITY ON CUSTOMER LOYALTY – A STUDY OF VETERINARY COMPANIES AND

THEIR AGENCIES IN VIETNAM

ID: 21120091

MASTER OF BUSINESS (Honours)

SUPERVISOR: Dr PHAM NGOC THUY

Ho Chi Minh City – Year 2014

ACKNOWLEDGEMENTS

Firstly, I would like to express my sincere gratitude to Dr Pham Ngoc Thuy, my Supervisor, who has given me great guidance, inspiration and especially her motivation, thanks for her valuable advice, suggestions and resources that helping me in accomplishing this study

Secondly, I would like to express my sincere thanks to all professors, tutors and officers of MBus Program for valuable lectures, academy knowledge and your experiences transfer throughout the period of courses at International School of Business

I want to express my special thanks to all my colleagues, friends, customers in veterinary medicine industry for your advice, cooperation and supports during the pilot and official survey Without your support, I could not successfully complete my thesis

Ho Chi Minh City, Vietnam,

30th Sep, 2014

Nguyen Dac Huy

ABSTRACT

In recent years, the industry of veterinary medicine in Vietnam has been developing significantly The veterinary medicine companies increasingly expand the market and enlarge their agencies system to take the company's image and products to market The purpose of attracting customers is to gain more market-share and bring more profits back to them This research is to identify the determinants affecting customer loyalty in veterinary medicine industry

This study was aimed to explore the influence of relationship quality factors on customer loyalty in veterinary medicine industry in southern of Vietnam is done through quantitative methods Formal quantitative research through interviews using a questionnaire with a sample collected in a convenient method of 230 agencies around some provinces in Southern

The research results contribute to the theoretical basis of research by understanding the meaning of the factors of relationship quality that affect consumer loyalty in veterinary medicine market Thereby, the results also provide managers with a basis for decision-making, investment options to develop new products and services in line with objectives and current strategic

Key words: Trust, Commitment, Satisfaction, Customer Loyalty

Table of Content

Acknowledgement ii Abstract iii CHAPTER 1: INTRODUCTION

List of Tables

Table 4.1: Descriptive statistics of sample ……… ……….31

Table 4.2: Reliability analysis result……….………… ……….…….33

Table 4.3: EFA analysis result for variables after handling ………… …… ……35

Table 4.4: Describe the correlation among variables ……… … …….39

Table 4.5: Multiple regression result ……… …… ……43

Table 4.6: Hypothesis testing result ……… ………… ……44

Table 4.7: Summary result of the hypotheses……… ……… ….46

List of Figures

Figure 1: Research model ……… ………10

Figure 2: Research process …… ……… …… …13

Figure 3: Research model after testing EFA ……… ………… …34

Figure 4: Multiple regression result ……… ………… 38

CHAPTER 1: INTRODUCTION 1.1 Research background

Nowaday relationship quality is a critical success factor that influences the competitiveness of an organization Relationship quality is one of the important outcomes of marketing activity.Hennig-Thurau and Alexander (1997) argued that relationship quality represents the relationship between the firms and the customers (p 737 – 764) Nowadays because of competitive environment among companies,losing customers is very costly for companies (Athanasopoulou, 2009, p 583-610).Researchers have concluded that there is more times expensive to acquire new clients than to keep existing ones So that, companies have made efforts to developing and maintaining a long-term relationships with their customers in order to create customer loyalty Scant empirical research has been completed that has examined the group environment, or the affective states within it, such as trust, commitment, satisfaction and price as explaining the effects of relationship quality

Vietnam is an agricultural country, so the livestock sector has a huge role in the economy, contributing an important part in the economic development of Vietnam During the recent years, the industry of veterinary medicine in Vietnam has been developing rapidly Recent statistics show that there are now over two hundreds veterinary medicine companies that are associated with customers systems with thousands of agencies and stores stretching from the north to the south (Yellow pages Vietnam, 2014) Several medicine companies, besides selling their products, are striving to attract and retain customers by offering the best services which are strongly based on the business relationships The companies need to understand how they can create and deliver values in business to

business relationships beyond selling products On the other side, customers need to understand how to create, build and manage portfolio of supplier relationships to develop overall return on relationships

1.2 Research problem

This study will research the influence of relationship quality and customer loyalty especially between veterinary medicine companies and their agencies in Vietnam It will focus deeply on three factors of relationship quality affect to the customer loyalty They are: trust, commitment, satisfaction If yes, how do each factor influences on customer loyalty – positive or negative?

1.3 Research objectives

The objectives of this research are to:

- Identify factors of relationship quality impacting on customer loyalty between the veterinary medicine companies and their agencies in Vietnam veterinary medicine industry

- Measure the impact levels of three factors of relationship quality namely trust, commitment, satisfaction on customer loyalty,

- Analyze the differences of those relationships between groups of duration of cooperation and number of partners

1.4 Research scope

The unit analysis in this research is organization so this research was investigated on the owners and director of the veterinary agencies

In terms of geography, this research carried out from Hue to Ca Mau province The period

of conducting the survey was last from 10 June, 2014 to early July, 2014

1.5 Research structure

The research consists of five parts:

- Chapter I: Introduction This chapter introduces the research background, management problem, research problem, research objectives, research significance, and research scope as well as research structure

- Chapter II: Literature review This chapter reviews previous related theories and research, as well as to select the research’s factors and formulate the research hypotheses and model

- Chapter III: Research methodology This chapter provides general method how the research is designed and implemented

- Chapter IV: Data analysis and findings This chapter will translate primary data collected from survey, analyze data as well as discuss the result findings in connection with literature review

- Chapter V: Conclusion, implication, limitation and future research This chapter will conclude the research finding, provide research implication and give the further suggestion as well as research limitation

CHAPTER 2: LITERATURE REVIEW

This chapter presents reviews of relevant literature related to factors of relationship quality and customer quality Throughout this chapter, variables will be established and grouped into relevant factors This chapter also mentions some previous studies and experiences related to the research topic

2.1 A brief introduction about veterinary medicine industry

The livestock sector is a key sector in the Agriculture in particularly and in the economy generally in Vietnam The development also brought the improvement in the veterinary drug manufacturing which played an important role in maintain sustainably of livestock In order to serve to the needs of farmers and farms, the companies which produce veterinary medicine was born in turns In parallel with the development of veterinary medicine companies is the appearance and development of agencies system The veterinary agencies are the customers of veterinary medicine companies The agency will distribute and sell products from the company farmers and farms which are the ultimate consumers In order to expand market share and increase total revenue, veterinary medicine companies are now built and developed their system of agents across the country Vietnam Base on that, now more farmers have been using drugs from medicine companies Veterinary Vietnam Besides, in order to cater to the diverse needs of farmers, veterinary agencies and store are distributed and sold products from many different companies Each agency can be a customer of 2 or 3 or more companies Thus consumers can select and use the most suitable products for themselves while the agencies can increase sales by doing business with many different companies With the fierce competition in the market today, the veterinary

medicine companies offer best policies for agencies in order to create and build up the good relationship with their agencies For these companies, customer loyalty is the most priority concern and important issue

On the veterinary market, the company has established a long time ago, in ten years and the agencies have the same There are many agencies who have worked closely with the company since the company first established To build loyalty from such agents, companies must have a good relationship with the agencies, must take care and have good incentives to help them develop in long term The development of agency and relationship between agency and veterinary medicine company growing higher, the company will develop in strength

Each company has different business lines, different methods to attract customers Each agency has different ways to select business partners So there should be a lot of factors that affect customer loyalty, which highlights the three factors:

Trust: customers must trust the company, have confidence in the business policies and guidelines of the company activities If the company wants to create the trust of customers, the company's products have to meet the needs of consumers, veterinary drugs which are manufactured from veterinary medicine have to be effective in the prevention and treatment

of diseases in livestocks and aquaculture

Commitment: customers have good reviews about the company, the products of the company Besides, consumers also rated the company through product quality and image of the company which was brought to them

Satisfaction: Company to attract customers, the customer must satisfy, fulfill the requests from customers Company’s product must be efficient, have a positive effect on the animal

2.2 Research Concepts

2.2.1 Relationship quality

In the past, a number of authors (e.g Dwyer and Sejo, 1987; Moorman, Gerald and Rohit, 1992) found that relationship quality was the association of trust, commitment and satisfaction These authors discussed and applied their concept in several contexts, research projects and lead to the agreement that the concept of relationship quality is the summarize construct of several different but related factors such as trust, commitment, satisfaction Therefore, this study proposes that relationship quality is combination of three components, which are: trust, commitment and satisfaction

2.2.2 Trust

Trust enables cooperative human endeavors (Fukuyama, 1996) and is vital to inter organizational relationships (Gambetta, 1988; Rousseau et al., 1998) According to Friedman, Kahn and Howe (2000) people naturally trust people, more so than technology Trust is also seen as an expression of confidence in an organizational environment This leads to cooperative behavior among individuals and groups within and between

organizations (Nandhakumar and Baskerville, 2006)

2.2.3 Commitment

There are various ideas expressed for the definition of the “commitment” concept suggested by researchers According to Morgan and Hunt (1994), commitment stems from

trust, shared values and the belief that it will be difficult to find partners that can offer the same value Commitment encourages partners to collaborate in order to preserve investments in the relationship

2.2.4 Satisfaction

Customer satisfaction is the degree to which a business’s product or service performance matches up to the expectation of the customer If the performance matches or exceeds the expectations, then the customer is satisfied, if performance is below par then the customer is dissatisfied (Roberts-Lombard, 2009) Satisfaction is a customer’s emotion when estimate the difference between expectations about the service and the receiving from actual performance

2.2.5 Customer Loyalty

According to Rauyruen, Kenneth and Nigel (2007), there are three main streams of research

in loyalty: behavioral loyalty, attitudinal loyalty and composite loyalty In the few decades ago, Tucker (1964) argued that behavior completely accounts for loyalty Loyalty in this behavioral manner is believed to be stochastic not deterministic (Uncles and Gilles, 1997)

On the other hand, attitudinal concepts can be identified as providing positive word of mouth (e.g Zeithaml, Leonard and Parasuraman, 1996) This study follows all of the above definition to fully explain the concept and the affect of relationship quality components

2.3 Hypotheses & Research model

2.3.1 Trust and customer loyalty

According to Aydin and Ozer (2005); Du Plessis (2010), trust as an element of customer loyalty has an influence on building customer loyalty Trust is also an important

factor in affecting customer loyalty When a customer trusts a business or brand, that customer is to develop a positive intention toward to the business or brand and they willing

to form a positive buying intention towards the business

Past research has shown increased trust is cited as critical for relationship success between the customer and the business (Huang and Chiu, 2006) The development of trust is effective relationship between both sides in the relationship A customer will desire and maintain a relationship with a business if he finds the benefits received to exceed the effort

in obtaining benefits Therefore, a high degree of trust may lead to increase the relationship with customer and then increase the customer loyalty in Vietnam veterinary medicine industry

H1: Trust has a positive impact on customer loyalty

2.3.2 Commitment and customer loyalty

A high level of commitment provides the circumstance in which both parties can achieve individual and mutual targets without fearing of opportunist behavior because more committed partners will take control and balance short-term problems with long-term goal achievement Higher levels of commitment are expected with relationship success (Cai and Wheale, 2004) Customers who are committed to a relationship might have a greater propensity to act because of their need to remain consistent with their commitment (Liang and Wang, 2005, p.66) More committed customers tend to form a positive overall impression of the total duration of the relationship, including different transactions, positive and negative, and these customers exhibit strong intentions to stay in the relationship (Du

Plessis, 2010) All of these statements indicate the relationship of commitment between firms and customers in veterinary industry Accordingly, our second hypothesis states:

H2: Commitment has a positive impact on customer loyalty

2.3.3 Satisfaction and customer loyalty

According to Salami (2005) the perception of performance is gained through the physical interaction with the business and the product and services of the business The customer first expectations based on needs, values, past experiences and appearance outside

of the product The perceived quality is based on those first expectations, and the choice that the customer made is then evaluated to determine satisfaction (Grounaris, Tzempelikos and Chatzipanagiotou, 2007) Finally, according to Rootman (2006), if a customer feels that

he has a satisfying relationship with the business, he may perceive the business to have a high level of service Therefore, high levels of service quality may lead to increased customer loyalty

H3: Satisfaction has a positive impact on customer loyalty

2.3.4 Moderating Effect

To increase confidence in the results, this study further examination of core demographic variables including the duration of cooperation and the number of partners of each agency with the veterinary medicine company

Duration, which is defined as the length of time that the relationship between exchange partners has existed (Doney and Cannon, 1997) In the market of veterinary in Vietnam, each company has its own system agencies and also the agencies collaborate with many different companies That leads to each company and agency have different duration

of cooperation as well as the agency has the relationships with multiple partners Therefore the difference of the duration of cooperative and the number of partners has made different influences on customer loyalty from relationship quality between companies and agencies in Vietnam veterinary medicine industry With the duration as long-term partnership, the relationship between companies and their agencies is strong and sustainable Beside that, having the more number of partners will reflect the good development of agency in the market

constructs in the research model The research methodology and data analysis procedure before having conclusions for the results of each hypothesis with empirical data

CHAPTER 3: RESEARCH METHODOLOGY

This chapter provides information related to the method applied to test the hypotheses The chapter includes five parts: general approach, research methodology, measurement scale, questionnaire explanation, data collection and sample size, and data analysis

3.1 Research Process

Step 1: This research topic with objectives was formulated

Step 2: Literature review and theories about the relationship quality and customer loyalty was reviewed

Step 3: The, a research hypothesis was developed

Step 4: A research model was formulated

Step 5: The questionnaire was developed and the sampling methodology was decided to ensure the objectives met

Step 6: The questionnaire was used to interview relevant respondent

Step 7: After completing the interview step, data was analysed and test the hypothesis and start writing the report

Step 8: Summarize the findings and come up with recommendation

Figure 2: Research process

3.2 Research methodology, collecting data and sample size

Within step 5 and step 6 above mentioned, this research phase was conducted through two phases named the qualitative and quantitative survey in the southern of Vietnam The objective of qualitative is to explore and clarify the factors of relationship quality affecting

on customer loyalty in veterinary medicine industry which was raised by previous reseachers and adjust to be more suitable to Vietnam situation After that, quantitative research was conducted based on the findings from quantitative phase was specified in the below parts

3.2.1 Step 1: Qualitative study

Before researching on a bi scale, a small group of customers will be invited for one on one interview, objective of this phase is to identify the impact factors on customer loyalty

by initially validating the factors proved by previous researchers and explore new factors in Vietnam industry In this thesis, qualitative research was conducts by group of 10 respondents through which key insights, deep-dive information about customer loyalty will

Develop research hypotheses

Build the research model

Develop

questionnaire &

sampling procedures

Conducting the research

Testing the hypotheses

Findings & recommendations

be explore In this step, 10 respondents who are the managers and owners of veterinary medicine agencies were interviewed

3.2.2 Measurement scale

The original measurement scale from previous studies was used in Qualitative stage to test their validity After listening to customers’ feedbacks, the scales for study were modified

3.2.2.1 Trust

Measurement of Trust was based on the Anderson and Narus (1986) scale Trust scale items for this study are symbolized by TRUST with Likert scale ranging from 1 (Totally disagree) to 5 (Totally agree)

The agency considers how its actions will affect customers and

company

TRUST02

Company is well-known for fair dealings

Company is very dependable, especially about important things

Although times change and the future may be somewhat uncertain,

company will support agency

Company is a faithful business partner

The agency is secure in dealing with new business situations because

company will support agency

TRUST04 TRUST05 TRUST06

TRUST07 TRUST09

3.2.2.2 Commitment

Measurement of Commitment was also based on the Anderson and Narus (1986) scales Commitment was measured by four items.Commitment scale items for this study are symbolized by COMMI

The agency is committed to the preservation of good working

relationships with company

COMMI14

The agency expect to have long term relationship with company COMMI17

3.2.2.3 Satisfaction

Satisfaction was measured using six items which were adapted from Wrestbrook

(1980) scales Satisfaction scale items for this study are symbolized by SATIS, such as:

This experience of products and services of this company is exactly

what I need

SATIS19

My choice was a wise one

If I could do it over again, I would choose products and services of

company

This experience of products and services from this company has

worked out as well as I thought it would

I’m sure it was the right thing for me to use products and service of

this company

SATIS20 SATIS21

SATIS22

SATIS23

3.2.2.4 Customer Loyalty

In the veterinary industry, customer loyalty was measured using the seven items based

on the Luarn and Lin (2013) scales Customer Loyalty scale items for this study are symbolized by LOYAL

Statement Coding

I will recommend other people to cooperate with company LOYAL25

I will say positive things to other people about the products and

services provided by company

LOYAL26

I will continue to cooperate with company even if the service charges

are increased moderately

I have strong preference to company

I will keep cooperating with company regardless of everything being

3.2.4 Step 3: Quantitative study

The quantitative questionnaire in thesis was developed basing on both applying the theoretical background as well as the modified measurement items from qualitative researches as stated The research used five-point Likert scale with 1 mean “Strongly disagree” to 5 means “Strongly agree” In addition, before the full fieldwork for quantitative, a pilot test was conducted on 10 respondents to check if all the questions are clearly stated Re-wording has been made accordingly After adjusting the questionnaire based on the feedbacks, the final quantitative questionnaire is presented in Appendix 1 ( English version) and Appendix 2 (Vietnamese version)

3.2.5 Sample size of Quantitative research

This research was conducted on a sample of 230 respondents conveniently selected Among those, only 207 ones meet the criteria respondents to answer the full questionnaire, therefore, the final sample size used for the analysis is 207 respondents A qualified respondent must currently at the position of owner or manager who serves as operation and tactical level of a veterinary medicine agency and has been in business relationship with at least one veterinary medicine company The sample size must satisfy the rule of thumb by Hair et all (2010) that the sample size should be at least 5 times the number of observed variables It measn that the minimum size must be (=5 x 2) The current sample size quantity met this critetion

The critetion for respondents are:

• Males or females

• Currently live in the southern of Vietnam (from Hue to Ca Mau province)

• Currently at the owner or manager position as operation and tactical level of a veterinary medicine agency

• Must have a business relationship with at least one veterinary medicine company

3.2.6 Sampling methodology

The target population for this survey includes the 200 to 250 veterinary medicine agencies and stores in the Southern of Vietnam which spread from Hue to Ca Mau province Questionnaire will be distributed to all the agencies and the face to face interview will be executed to the consisting of owners or directors of these agencies Among those respondents, there is around 90 % of the questionnaire qualified for the analysis

Those are unqualified including unqualified questionnaire with skipping questions or illogical answers or conflict answer Those non-qualified questionnaire were removed out of the main sample

3.2.7 Questionnaire explanation

The final questionnaire was structure into 3 main parts

• Screening: This part is to ensure the right qualified respondents selected As the target

of the survey who currently is the manager or owner of a veterinary medicine agency and has the business relationship with veterinary medicine companies Those who are not a manager or owner of any veterinary medicine agency will not go ahead answering the questions

• Main questionnaire: This part is asked to run the model to see the extension to which respondents agree with different statement in the questionnaire Those are critical parts to measure the impact of different factors of relationship quality on customer

loyalty to validate out hypothesis The main part used 5 point scale to capture customer’s agreement level on variables of all research construct including Trust, Satisfaction, Commitment and Customer Loyalty

• Other bio-data question: This part is asked to have more insights for the analysis to see the different information among each agency which will support the management decision and actions In this part, information is to capture the time agency in operation, the average sales of agency and the number of staffs in each agency

3.3 Data analysis

The collected data will be analyzed by IBM SPSS software (statistical package for social science) for statistical purpose, Version 20 which could enable the exploratory factor Analysis (EFA), Cronbach Alpha Reliability Analysis and standard Multiple Regression Analysis

3.3.1 Exploratory Factor Analysis (EFA)

The primary objectives of EFA are to determine the number of factors impacting to the measures and the strength of the relationship between each factor and each observed measure (De Coster, 2004) At first, Exploratory Factor Analysis was employed to explore the interrelationship among a set of variables so as to identify the number of underlying factors Principal Axis Factoring was used as a method to extract the factors in this study

In order to guarantee the suitability of the data for factor analysis, the following conditions should be met (Pallant, 2005):

- The sample size should be appropriate: The sample size should be at least 100 and there should be a ratio of at least file cases for each of variables Our valid responses are

207 and therefore our data set was considered valid for this Exploratory Factor Analysis

- The factorability of the data would be appropriate if:

• The Kaiser-Meyer-Olkin value (KMO) should be equal or greater than 0.5

• The Bartlett’s test of sphericity should be statistically significant: <0.05

- The number of factors were determined when:

• The components have an eigenvalue of 1 or more

• The total variance explained by these components should be above 50%

• Factor loading criteria should be 0.5 or more to ensure a practical significance

3.3.2 Reliability Analysis

Cronbach’s alpha reliability analysis method will be used for examining the reliability

of the measurement scales The scales are reliable when Cronbach’s alpha coefficient of each scale is equal to or greater than 0.7 (Pallant, 2005) Besides, those items which have the value of Corrected Item-to-total Correlation less than 0.5 could be discarded in order to improve reliability level of the measurement scale

Cronbach’s alpha is a tool for assessing the reliability of scales It was provided by Lee Cronbach in 1951 and is widely used the social science, business, and other fields The formulation of Cronbach’s alpha is:

The rule of thumb for evaluating the reliability of scales is as following:

• If α >= 0.9 then the reliability of scales is excellent;

• If 0.8 <= α < 0.9 then the reliability of scales is good

• If 0.7 <= α < 0.8 then the reliability of scales is acceptable;

• If 0.6 <= α < 0.7 then the reliability of scales is questionable;

• If 0.5 <= α < 0.6 then the reliability of scales is poor;

• If α < 0.5 then the reliability of scales is unacceptable

The Cronbach’s Alpha was invoked to test the reliability of the answer from respondents in this survey

3.3.3 Multi-linear regression analysis

Multi-linear regression is a method used to model the linear relationship between a single dependent variable and one or more independent variables The dependent variable is sometimes also called the predictable, and the independent variables the predictors Therefore, Multiple Linear Regression was used to test the research model and hypotheses

in this study In accordance with Pallant (2005), the assumptions of a multiple regression are:

- The sample size is appropriate: n > 50+8m (where m = number of independent variables)

- No multi collinearity is found

- No outliers are found or in case they are, no significant impact of outlier is found

- Normality & linearity should exist

All of these assumptions should be tested before digging into further data analysis R-square would tell us how much of the variance in the dependent variable was explained by the model

3.4 Chapter 3 summary

This chapter provides information related to the method applied to test the hypotheses The methodology used in the study is 2 phase approach: qualitative and quantitative Qualitative survey was conducted first on 10 managers and owners of veterinary medicine agencies having the business relationship with veterinary medicine companies to validate the factors influencing on customer loyalty based on previous study and to explore other factors applicable in Vietnam veterinary industry A pilot was conducted before moving to quantitative survey in some provinces spreading from Hue to Ca Mau Total size of the study is 207 respondents Respondents must currently at the position of managers or owners

of veterinary medicine agencies and have relationship with veterinary medicine companies

CHAPTER 4: DATA ANALYSIS, FINDINGS AND DISCUSSION

Research methodology was presented and the measures were preliminarily tested in chapter 3 The results from the exploratory study showed that all measures are valid This chapter outlines the official assessment of measures and hypotheses testing as well as the interpretation of the result, in particular, four parts are included in the chapter: part one briefs the descriptive data analysis; part two present the assessment of measures adopting Cronbach Alpha reliability analysis and Exploratory Factor Analysis; part three goes through the hypotheses testing, part four presents discussion of results

4.1 Descriptive data analysis

4.1.1 Descriptive analysis of Sample charateristics

As above mentioned, among 230 respondent conveniently selected, only 207 ones meet the criteria respondent to answer full questionnaire The final sample size used for the analysis is 2017 respondents have below characteristics:

Number of Partners: In this research, around 49.8% agencies have more than 10 partners

in their busisness while 38.2% have relationship with 5 – 10 veterinary medicine companies and just 12.1% agencies have connected with 1 – 5 companies The research also looked into these number to evaluate the size and capabilities of the agencies

Main Partner: Among veterinary medicine companies in Vietnam, the agencies tend to

choose the large, famous and high reputable in the market to cooperate with Pharmachemie is the company which has most chosen to be main partner by agencies with 30% Second is Vemedimcompany with 23,7% while Bayer VN is the main partner of

Bio-23.2% respondent Next are Anova and Hanvetcompany with the percentage is 13.5% and 2.4%, other companies accounted 7.2% selected by respondents

Reason of Cooperation: In this study, the main reasons of agencies to cooperate with

companies are Good Relationship and Quality Products with 34.3% and 27.5% for each reason These numbers show how important of the relationship and product quality to the customer’s mind to make the decision of cooperation Beside, Price also the issue for agencies if they want to do a business with veterinary medicine company with 20.3% choices from respondent while Brand Name and Origin have the 10.6% and 7.2%

Time of Cooperation: Most of agencies have a long time operation, times of cooperation

from 5 to 10 years is dominating with nearly 50% and more than 10 years operation have 16.9% 28% of veterinary medicine agencies have worked from 1 to 5 years while just only 5% agencies have operated under 1 year

Table 4.1: Descriptive Statistics of Sample

Percent

Cumulative Percent NUMBER OF PARTNERS

4.1.2 Descriptive analysis of the variables studies

A total number of 230 questionnaires were delivered to owners and managers of veterinary medicine agencies in southern Vietnam and collect 207 samples

The final sample size was 207 (n = 207), data were analyzed using SPSS software In assessing normality of the distribution of scores, the Sig values of all variables were than

0.05, which is quite common in large samples As the 5% trimmed mean values of all variables were not too different form the original mean values, the outliers of all variables were retained in the data file

Variables (concept study) are measured by the scale with many observed variables (multi-item scale) The form of Likert 5 point scale used to measure the concepts with 1 = strongly disagree and 5 = strongly agree Scale values obtained by taking the average of the observed variables used to represent the concepts needed research, and descriptive statistics results are presented in Table 4.1

4.2 Measurement scale assessment

4.2.1 Cronbach Alpha reliability analysis

The Reliability Test Results was shown in Table 4.2 belowe In each construct, the alpha values of the overall constructs were higher than the alpha if item deleted The highest was 818 (Customer Loyalty) and the lowest was 606 (Commitment)

Corrected Item – Total Correlation values of variables Trust, Satisfaction, Customer Loyalty were over 0.3 then the items will make a good component of a summated rating scale Highest is Customer Loyalty components

Table 4.2: Reliability Analysis result

Items-Total

Statistics

Scale Mean if Item Deleted

Scale Variance

if Item Deleted

Corrected Item-Total Correlation

Squared Multiple Correlation

Cronbach's Alpha if Item Deleted Trust

Cronbach Alpha: 639

LOYAL27 20.580 10.177 632 497 780

4.2.2 Exploratory Factor Analysis

4.2.2.1 EFA analysis results for measurement scales of independent factors (Trust, Commitment, Satisfaction) and dependent factor (Customer Loyalty)

All the independent factors and the dependent factor were run through the Principal component analysis using the Varimax with Kaiser Normalization rotation method The results showed that the variables of all factors had high loading in that factor The EFA results shown in table 4.3 revealed that the KMO values of all factors were bigger than 0.7

at the Bartlett’s Test Significance of 000 < 0.05 and therefore met the conditions required

by EFA method

Table 4.3: EFA analysis result for variables after handling

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of

Bartlett's Test of Sphericity

Approx