What factors affect on customer satisfaction when using services at highlands coffee store pico plaza branch

RESEARCH PROJECT BMBR5103 WHAT FACTORS AFFECT ON CUSTOMER SATISFACTION WHEN USING SERVICES AT HIGHLANDS COFFEE STORE -- PICO PLAZA BRANCH?. Customer Satisfaction in Highlands Pico Pag

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RESEARCH PROJECT (BMBR5103)

WHAT FACTORS AFFECT ON

CUSTOMER SATISFACTION WHEN USING SERVICES

AT HIGHLANDS COFFEE STORE PICO PLAZA BRANCH?

STUDENT’S FULL NAME : NGUYEN TRAN BAO THU

ADVISOR’S NAME & TITLE : DR BUI PHI HUNG

August, 2017

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Advisor’s assessment

Advisor’s signature

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ACKNOWLEDGMENTS

A thesis on business administration with the topic "What factors affect on

customer satisfaction when using services at Highlands Coffee - Pico Plaza

Branch" is the result of the process of trying not to stop by myself and be helped

and motivated by teachers, friends, colleagues and relatives

I sincerely thank the leaders of HUTECH University and OUM University for

creating favorable conditions for me to complete my research work

Specially, I pay my respects and deep gratitude to Dr.Bui Phi Hung for his direct

guidance as well as providing the necessary scientific information, along with

useful tips for this thesis

Finally, I would like to thank my friends and my family for helping me in the

process of studying and doing this thesis

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TABLE OF CONTENTS

ACKNOWLEDGMENTS ii

ABBREVIATIONS vii

ABSTRACT viii

1 CHAPTER I: INTRODUCTION 1

1.1 RATIONALE 1

1.2 RESEARCH QUESTION 3

1.3 OBJECTIVE 3

1.4 METHODOLOGY 4

1.5 SCOPE 5

1.5.1 By topic: Services Quality are currently being provided by the HC 5 1.5.2 By space: Branch in Pico Plaza 5

1.6 SIGNIFICANCE OF THE RESEARCH 5

1.7 PROPOSED STRUCTURE 5

2 CHAPTER II: LITERATURE REVIEW 7

2.1 COFFEE CULTURE IN GLOBAL AND VIETNAM 7

2.1.1 Introduction 7

2.1.2 Coffee Culture in VietNam 9

2.2 CONCEPTS AND THEORETICAL FRAMEWORK 11

2.2.1 Customer Satisfaction (CS) 11

2.2.2 Determinant of Customer Satisfaction 12

2.2.3 Service Quality 14

2.2.4 SERVQUAL model 15

2.3 RESEARCH MODEL AND HYPOTHESIS 19

3 CHAPTER III : METHODOLOGY 21

3.1 RESEARCH DESIGN 21

3.2 TYPES OF DATA COLLECTED 23

3.2.1 Primary Data 23

3.2.2 Secondary Data 23

3.3 PRELIMINARY INTERVIEW 24

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3.4 PILOT STUDY 28

3.5 MAIN SURVEY 29

3.5.1 Sample size 29

3.5.2 Sampling method 29

3.6 DATA ANALYSIS TECHNIQUES 30

3.6.1 Cronbach Alpha 30

3.6.2 Exploratory Factor Analysis (EFA) 31

3.6.3 Regression Analysis 31

3.6.4 One-Way ANOVA and Independent Sample T-test: 31

4 CHAPTER IV : DATA ANALYSIS AND RESULTS 33

4.1 SAMPLE DEMOGRAPHICS 33

4.2 MAIN SURVEY RESULT 36

4.2.1 Cronbach Alpha with Scales Before EFA 36

4.2.2 EFA (Exploratory Factor Analysis) 39

4.3 REGRESSION AND HYPOTHESES TESTING RESULTS OF THE RELATIONSHIP BETWEEN SERVICE QUALITY AND CUSTOMER SATISFACTION 48

5 CHAPTER V : DISCUSSION AND CONCLUSION 55

5.1 CUSTOMER SATISFACTION AMONG DEMOGRAPHIC VARIABLES 55

5.2 DISCUSSION 57

5.2.1 TANGIBLE 57

5.2.2 RELIABILITY 57

5.2.3 ASSURANCE 58

5.2.4 RESPONSIVENESS 58

5.3 CONCLUSION 59

5.4 LIMITATION AND RECOMMENDATION FOR FURTHER RESEARCH 61

REFERENCES 62

APPENDIX 64

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LIST OF TABLES

Table 1-1 : Number of HC stores from 2002 to 2016 in VietNam 2

Table 1-2 : Southeast Asia‟s most visited coffee chains 2

Table 3-1 : Construct Measurement Scales 25

Table 4-1 : Cronbach‟s Alpha before EFA 37

Table 4-2 : EFA and Cronbach‟s Alpha after EFA of Independent variable 45

Table 4-3 : EFA and Cronbach‟s Alpha after EFA of Dependent variable 47

Table 4-4 : Correlations 49

Table 4-5 : Collinearity Diagnostics 50

Table 4-6 : Result of the relationship between service quality and satisfaction 51

Table 4-7 : Coefficients 52

Table 4-8 : Hypotheses results 54

Table 5-1 : Hypotheses results 60

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LIST OF FIGURES

Figure 1-1 : Research Process 4

Figure 2-1 : Production in selected exporting countries (2013/2014 – 2016/2017) 8

Figure 2-2 : Number and Discussion of The High-End Coffee Chain Shares at Social Media 10

Figure 2-3 : Conceptual Model of Service Quality 17

Figure 2-4 : Research Model 19

Figure 3-1 : Research Process 22

Figure 4-1 : AGE 33

Figure 4-2 : GENDER 34

Figure 4-3 : OCCUPATION 34

Figure 4-4 : MONTHLY INCOME 35

Figure 4-5 : USED TIME 35

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ABSTRACT

The purpose of this essay is to study the factors that affect customer satisfaction

when using services at the Highlands Coffee - Pico Plaza branch

A literature review was conducted to provide a theoretical framework for the

research model at the HC - Pico Plaza branch The SERVQUAL model of the

Parasuraman was selected and the questionnaire was prepared to examine

customer satisfaction through the 5 aspects of service quality at the coffee shop

After collecting and analyzing 400 valid questionnaires with SPSS software, the

results has showed that Assurance, Reliability, Responsive, Tangible ness have

the positive relationship on Customer Satisfaction

Although there are limitations of this study, this study is hoped to contribute

implications for Highlands Coffee‟s managers when they want to improve

service quality and enhance customer satisfaction

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1.1 RATIONALE

Highlands Coffee is a trademark of Viet Thai Group, established in 2002 by

David Thai Initially, there were only two stores in Hanoi and HCMC However,

three years ago, the brand was handed over to a foreign businessman, Jollibee of

the Philippines The group has spent $25 million to buy 49% of its business in

Vietnam and 60% of its Hong Kong division

Since returning to Jolibee, the coffee chain Highlands has changed dramatically

Locating in association with the brand of highlands coffee business, the former

intellectuals have been "popular", to serve more customers Highlands customers

also witnessed a change in the form of service, from "served" to "self-serving"

The design and menu of the store are also changed in the direction of

simplification

Since the opening of the first two stores in 2002, after 14 years, this chain has

increased to 130 The most is in Ho Chi Minh City with 53 stores So every 10

Highlands stores have 4 stores in Saigon The area of the bar is also very diverse,

where there are large scale, where in small scale, but overall, it is easy for

customers to find a Highlands shop In District 1 alone, the Highlands chain has

17 units, equivalent to the number of Highlands stores in Hanoi and is equal to

the total number of Starbucks stores in Vietnam

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Table 1-1 : Number of HC stores from 2002 to 2016 in VietNam

(Source:HC‟s website , 2016)

A survey by the Financial Times found that the Highlands was the second most

popular consumer brand after Trung Nguyen In spite of this, Trung Nguyen

achieved the highest position in the coffee business model in terms of scale

thanks to the strategy of covering 10,000 restaurants across Vietnam when it only

needed to sell coffee and hung the Trung Nguyen sign Considering the coffee

chain model alone, Trung Nguyen is not a rival to the Highlands

Table 1-2 : Southeast Asia’s most visited coffee chains

(Source:Financial Times, 2016)

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From the situation above, the questions need to be solved in this research are:

What factors affect on customer satisfaction when using service at

Highlands Coffee – Pico Plaza Branch?

1.3 OBJECTIVE

We need to achieve following objective of the research and that will lead to solve

the stated research questions:

 To apply SERVQUAL model for identifying the effect of service quality

on customer satisfaction

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Figure 1-1 : Research Process

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1.5 SCOPE

1.5.1 By topic: Services Quality are currently being provided by the

HC

1.5.2 By space: Branch in Pico Plaza

 To manage the services quality at HC - Pico Plaza branch, the findings

and results provide a more reliable scientific measurement and perspective

for describing and evaluating the level of their customer satisfaction with

the service they deliver

 Reflect and provide some recommendation in improving customer

satisfaction for management strategic decisions

CHAPTER I: INTRODUCTION will look at the reasons and factors the initiated

the research work It will look at the general background of the research, research

problem and objectives, brief methodology, scope and limitations which are

expected from the research work and give the overview about the structure of this

study

CHAPTER II: LITERATURE REVIEW provides introduction about coffee

culture in global and in Vietnam specifically The theoretical framework is also

presented in this chapter as well as hypotheses based on the research questions

CHAPTER III: METHODOLOGY details the research methodology design,

research procedures and data analysis Chapter 3 also gives details of the

questionnaire items and the development of the survey Also, the statistical

procedures of the SPSS programs used in the research are provided and

discussed

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CHAPTER IV: DATA ANALYSIS AND RESULTS the results of the analysis

of the data collected through the main surveys, including descriptive statistics on

the demographics of the respondents The validity and reliability of the

constructs of interest are also assessed, followed by an analysis of the data and

the results of the tested proposed model to answer the research question and

hypotheses

CHAPTER V: DISCUSSION AND CONCLUSION provides the conclusions

from the findings of this research project, based on the research questions and

hypotheses and limitations of the research Lastly, the recommendations for

further research are provided

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2.1.1 Introduction

In 850 AD - Legend has it that Ethiopian Kaldi goatskin once noticed his goats

playing around with a bush of red berries and eat those strange fruit After that,

then he noticed that his goat did not want to sleep at night after eating those

strange fruits He reported the incidents to locals then they started making drinks

with the berries and discovered that the drinks kept them awake during the day

A few centuries later, Ethiopian farmers began to cultivate and use coffee beans

by eating or fermenting in wine At this point the coffee has not been detected by

the preparation of beverages as well as processing

In the 14th century, African slave traders brought coffee from Ethiopia to Arabia

Cafe was introduced into Europe from then until the end of the 14th century

around 1475 - The world's first coffee shop was born in Constantinople

In 1600 - Coffee from the port of Mocha in Yemen was exported to Europe to

cater to the very popular cafes in the Netherlands, England and France at that

time Since then, the coffee gradually dyed brown Europe

1714 - Café appears in the United States

In the 20th century, coffee was classified as the most profitable commodity in the

world, behind only kerosene Not only that, it also becomes a favorite drink in

the world, only after water Many famous coffee houses and coffee shops were

used in colonial countries to serve the supply of coffee

Today, coffee has become one of the popular choices for soft drinks People

consume coffee everyday as a drink "keep you awake"

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According to statistics provided by the International Coffee Organization (ICO),

global coffee consumption in 2016/2017 reached 151.6 million bags and

European countries were the largest importers of coffee followed by Asia and

North America all over the world, while the largest coffee exporters are Brazil

and Vietnam

Figure 2-1 : Production in selected exporting countries (2013/2014 – 2016/2017)

(Sources: ICO‟s website, 2016)

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2.1.2 Coffee Culture in VietNam

Taking into account the history of Vietnam, it is hard to be surprised that coffee

has been affected so much Formerly a colony of France, a country famous for its

café lifestyle, France introduced coffee to Vietnam in the mid-19th century

However, in those years, the Vietnamese had Turn it into a drink of your own,

with slightly unusual but deliciously tasteless alcoholic beverages to become

mainstream Nowaday, "Taking a coffee" is an extremely popular activity in

Vietnam, catering to different needs such as dating, meeting friends, working or

simply looking for a space to relax and recharge Recognizing the great potential

of the coffee shop business service market, more and more domestic and foreign

brands appear in our country, making this market one of the service sectors in the

situation

The most intense competition at Coffee Bean & Tea Leaf or Starbucks, McCafe

in District 1, Ho Chi Minh City, coffee habitants in this area are always in a

state of inadequate seating When it first started in Vietnam, The Coffee Bean &

Tea Leaf was quite hard, however, so far this unit has 13 stores in Ho Chi Minh

City and 2 stores in Hanoi Upscale, and also only from 2013 but so far Starbucks

has 24 stores (18 in HCMC and 6 in Hanoi) Locate high-end brands to reach

foreign customers and high income earners, so Starbucks drinks always have the

highest price in Vietnam Compared with the increasing rental space in Vietnam,

especially in centers such as Hanoi and Ho Chi Minh City, the expansion of these

big brands is remarkable Besides that, without taking market share into the

hands of foreign "big guys", a number of domestic beverage brands are

increasing their presence in the market But the competition is fair to mention

prominent names such as Phuc Long, Highlands, Trung Nguyen, Saigon Café

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According to a report by market research firm Euromonitor, the model of coffee

shops in Vietnam is growing at about 7% a year In 2016, it is estimated that

there are more than 26,000 stores in the country, of which only 2% (about 500)

are in the chain model, but it is forecasted to grow strongly in the next few years

The quantity and the gradual increase compared with the model of independent

coffee shops, franchise chain

Figure 2-2 : Number and Discussion of The High-End Coffee Chain Shares at Social

Media

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2.2.1 Customer Satisfaction (CS)

Customer satisfaction (CS) is a term that received much attention and interest

among scholars and managers, emerged as a separate study area in the 1970s

(Churchill & Surprenant, 1982).because of its importance as a key element of

business strategy, and goal for all business activities especially in competitive

market (Anderson, 1994), help large and small companies realized the strategic

benefits of quality of service and service Increasing customer satisfaction has

been shown to directly affect companies‟ market share, which leads to improved

profits, positive recommendation, lower marketing expenditures (Reichheld,

1996; Heskett et al., 1997), and greatly impact the corporate image and survival

(Pizam and Ellis, 1999)

 Customer satisfaction has been the focus of considerable marketing

research, theory and practice across many industries Therefore, we can

understand satisfaction through some definitions as follows:

 Customer satisfaction as a process is defined as an evaluation between

what was received and what was expected (Oliver, 1977, 1981; Olson and

Dover, 1979; Tse and Wilton, 1988)

 CS “as an attitude-like judgment following a purchase act or a series of

consumer product interactions.” (Youjae Yi, 1990)

 Oliver‟s (1997) definition of customer satisfaction as “a judgment that a

product or service feature, or the product or service itself, provided (or is

providing) a pleasurable level of consumption-related fulfillment”

 CS is „„an experience-based assessment made by the customer of how far

his own expectations about the individual characteristics or the overall

functionality of the services obtained from the provider have been

fulfilled.‟‟ (Bruhn, 2003)

 „Satisfaction is a person‟s feeling of pleasure or disappointment resulting

from comparing a product‟s performance (outcome) in relation to his or

her expectation.‟‟ (Kotler P & Kevin L K., 2006)

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Summary, customer satisfaction is the feeling you have when your needs as a

customer are fulfilled and meet customer expectations for key quality service

attributes leading to satisfaction The whole of a service is the perception of a

person through product consumption about how much a product actually delivers

compared to what he or she expects Satisfied customers will be more likely to

use the service again or will let potential customers know about positive things

about the service (Patterson & Spreng, 1997) In turn, measuring customer

satisfaction can provide managers with relatively reliable indicators of future

customer support for their services, helping managers to develop strategies

Finalizing products and services for the business efficiently and delivering a high

surplus

2.2.2 Determinant of Customer Satisfaction

In the work of many scholars and practitioners, CS is found to be driven mostly

by the service quality and the customer service experiences (Oliver, R.L., 1980;

1993; Parasuraman, A., et al., 1988, Lovelock, 1991, 1992, 2001, 2000; Lovelock

C & Wirtz J., 2007; Gronroos, C., 1994, 2000, 2001; Yonggui Wang & Hing-Po

Lo 2002; Kotler P.& Keller K L., 2006)

Although some practitioners and researchers have used the terms "service

quality" and "satisfaction'" alternately, most researchers seem to agree that the

two constructs are distinct, although related (Parasuraman et al., 1988; Spreng &

Mackoy, 1996; Taylor & Baker, 1994) According to Zeithmal and Bitner (2003),

satisfaction is a broader concept than service quality There is strong support that

service quality and satisfaction are distinct constructs and that there is a causal

relationship between the two (McDougall & Levesque, 2000; Hurley and

Estelami, 1998)

Oliver (1997) suggested that profit for a company (purchase/repurchase behavior

by the consumer) was dependent on a sequence of three factors: Quality,

satisfaction, and loyalty Quality has a direct influence on consumer satisfaction

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McDougall and Levesque (2000) in their direct approach investigation on four

service firms (dentist clinic, automobile shop, restaurant, and haircut salon)

demonstrated that both functional and technical service quality classes have

significant impact on customer satisfaction Heskett et al (1997) conducted

studies on several service firms, such as airline, restaurants, etc and reported that

service quality, solely defined as functional quality, has consistent effect on

satisfaction and is regarded as key factor in delivering customer satisfaction

According to the expectancy disconfirmation theory (Oliver, 1980; Parasuraman,

1988), perceived service quality and customer expectations are important

determinants of customer satisfaction In this theory, customer is satisfied if the

performance is perceived to be equal to or higher than expectations (positive

disconfirmation) If the performance is perceived to be below expectation,

customer will be dissatisfied (negative disconfirmation)

The relationship between customer satisfaction and service quality is proven to

be the foundation in almost research about the customer satisfaction, because

service quality is one important determinant of customer satisfaction In

particular, at the Highlands Coffee, improving service quality will help improve

customer satisfaction at those stores, to generate high profitability for the HC

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2.2.3 Service Quality

Measuring service quality through objective criteria such as faulty segmentation

or endurance because service quality is a real progress is not easy For this

reason, the concept of quality of service is used differently according to scholars,

times and situations In the past, the term "quality" was used limited, only to

measure with product quality; However, after the service sector is expanding and

paying attention as it is, quality of service has attracted people's attention In the

harsh competition environment, if the quality of service drops, a company loses

its customers, and vice versa, when reaching its customers means good quality

Therefore, service organizations need to enhance service quality in order to gain

the trust and safety of customers To discuss the concept of service quality, we

will discuss the concept of quality The concept of quality may vary based on the

individual, purpose of use or opinion

The main features of a service, which distinguishes it from a product, are

intangibility, heterogeneity, and inseparability of production and consumption

(Parasuraman et al., 1985, 1988) Parasuraman, Zeithaml and Berry (1988)

defining the concept of service quality as ˝a form of attitude, related, but not

definitely equivalent to satisfaction, that results from a comparison of

expectations with perceptions of performance” Service quality can be defined as

a measure of how well the service delivered matches the customer expectation of

the service, customers compare their expectations about the service with what

they actually receive The result of this comparison is perceived service quality

(Parasuraman et al., 1985, 1988) Therefore, it is how customers perceive the

quality of service that should be of key concern to managers

In general, there are many models for customer satisfaction through service

quality, it is measured by SERVQUAL Model (Parasuraman, A et al.,1988),

Expectancy-Disconfirmation Model (Reisiq & Chandek, 2001), Performance

Only Model (SERVPERF) (Al-Hawari & Ward, 2006; Kandumpully, 2002;

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Kurtenbasch, 2000), Attribute Importance Model (Tontini & Silveira, 2007; Kim,

Lee & Yun, 2004), Norms Model (Fecikova, 2004), Attribution Model (Casado

& Ruiz, 2002), Affective Model (Vinhars & Sharifah, 2006), Multiple Process

Model (Bauner et al., 2002), Equity Model (Atilgan et al.,2005), European

Customer Satisfaction Index (Vilares & Coelho, 2001) and Customer Loyalty

Model (Zins, 2001)

Empirical evidence suggests that SERVQUAL has good validity and reliability

between 0.80 and 0.93 (Young et al 1994) This shows that the SERVQUAL

scale is valid and that the results obtained from a particular study are reliable, but

that the validity of the trait and reliability will vary depending on the type of

industry being evaluated

Pizam and Ellis (1999) stated that the gap that may exist between the customers'

expected and perceived service quality is a vital determinant of customer

satisfaction or dissatisfaction, and not just only a measure of the quality of the

service, that‟s why the SERVQUAL Model is still the most applicable in

measuring customer satisfaction in many organizations (Wang & Lo, 2002;

Newman, 2001)

The SERVQUAL scale conceptual framework was formed from investigations

by a group of researchers as they explored the implications of service quality

(Sasser, Olsen, and Wyckoff, 1978, Gronroos, 1982) From this qualitative

survey, researchers have shaped the concept of service quality and point out the

criteria that consumers perceive and evaluate (Parasuraman, Zeithaml, and Berry,

1985)

When examining the literature, it becomes clear that there is no consensus on

which model is more appropriate in a general sense SERVQUAL heightened the

interest of many researchers but there are some arguments against its validity

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Cronin and Taylor (1992) found that performance only based measures such as

SERVPERF may better reflect customers‟ service quality assessments and Lee et

al (2000) empirically compare SERVQUAL (performance minus expectations)

with performance-only model (SERVPERF)

Despite those criticisms, a large number of applications of SERVQUAL have

become available In addition to the applications, different types of services have

been investigated using SERVQUAL Examples of service are fast-food, airlines

and long distance telephone calls (Gupta and Chen, 1995), banking (Newman,

2001; Cui et al., 2003), web sites (Iwaarden et al., 2003), health care (Wong,

2002; Kilbourne et al., 2004), public services (Bigné et al., 2003) and hotels

(Nadiri and Hussain, 2005)

Originally Parasuraman et al (1985) identified 10 general dimensions of service

quality but, as a result of succeeding research, these were concluded into 5

categories: tangibles, reliability, responsiveness, assurance and empathy

(Parasuraman et al., 1988, 1991) with a 22-item instrument called SERVQUAL

based on the Gap Model for measuring service quality

The foundation of the model (see Figure 2.2) is a set of 4 gaps which are the

major contributors to the service quality gap which customers may perceive:

Gap Analysis Model

 Gap 1 (Consumer Expectation – Management Perception Gap): In

formulating its service delivery policy, management does not correctly

perceive or interpret consumer expectation

 Gap 2 (Management Perception – Service Quality Specification Gap):

Management does not correctly translate the service policy into rules and

guidelines for employees

 Gap 3 (Service Quality specification – service delivery Gap):

Employees do not correctly translate rules and guidelines into action

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 Gap 4 (Service Delivery – External Communications Gap): External

communications – promises made to customers – do not match the actual

service delivery

These 4 gaps emerge from an executive perspective on a service organization‟s

design, marketing and delivery of services These gaps are located throughout the

organization between frontline staff, customers and managers They, in turn,

contribute to another gap, i.e gap 5, which is the discrepancy between

customers‟ expected services and the perceived service actually delivered This

gap is a function of the other four gaps: i.e Gap 5 = f (gaps 1, 2, 3, 4)

Figure 2-3 : Conceptual Model of Service Quality

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(Source: Zeithaml, V.A., Berry, L.L., Parasuraman, A (1988), Communication

and Control Processes in the Delivery of Service Quality,

Journal of Marketing, 52, p 36)

There are of 22 items divided along the 5 dimensions as following:

1 Reliability is the ability to perform the promised services dependably and

accurately

2 Responsiveness refers to the willingness to provide help and prompt

service to customers

3 Tangibles present the appearance of physical factors such as equipment,

facilities and personnel

4 Assurance involves the knowledge and courtesy of employees and their

ability to convey trust and confidence

5 Empathy indicates providing individual attention and care to customers

The instrument empirically relies on the difference in scores as a gap between

customer's expectations (E) and the perception of the service providers'

performance (P) According to Parasuraman et al (1985), “service quality should

be measured by subtracting customer's perception scores from customer

expectation scores (Q = P - E)” The greater the positive score mark means the

greater the positive amount of service quality or the greater the negative score

mark, the greater the negative amount of the service quality

The SERVQUAL scale could be used in different service industries and contexts

However, in later work (Parasuraman et al., 1993), they did emphasize the need

for context-specific tailoring of the instrument Such context-specific tailoring of

the SERVQUAL instrument is supported by a number of other researchers

(Babakus & Boiler, 1991; Carman, 1990; Cronin & Taylor, 1992; Gagliano &

Hathcote, 1994; Howat et al., 1999; Johnson et al., 1995; Wright et al., 1992)

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From the literature review of previous researches about relationship between

service quality and customer satisfaction, SERVQUAL model is chosen because

it was proven that SERVQUAL approach is the most common method for

measuring service quality and flexibly tailored in specific context by literature

And there is one dependent variable:

 Customer satisfaction describes the level of satisfaction that customer is

experiencing with services delivered by HC - Pico Plaza branch

Figure 2-4 : Research Model

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Hypotheses are formulated in order to evaluate the level of satisfaction of the

service provided by HC in Pico Plaza, using SERVQUAL dimensions, in order

to answer the main research question (What factors affect on customer

satisfaction when using service at Highlands Coffee – Pico Plaza Branch ?:

 H1: There is a positive impact of reliability on customer satisfaction

 H2: There is a positive impact of responsiveness on customer satisfaction

 H3: There is a positive impact of tangible dimension on customer

satisfaction

 H4: There is a positive impact of assurance on customer satisfaction

 H5: There is a positive impact of empathy on customer satisfaction

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Business research methods can be classified on the basis of either function

or technique (Zikmund, 1997) Based on function, there are three types of

research including exploratory, descriptive and causal studies Based on

technique, business research can be classified into experiments, surveys and

observational studies (Zikmund, 1997) As indicated by Zikmund (1997),

descriptive research focuses on the research question starting with who, what,

when, and where with the main purpose of describing characteristics of a

population or a phenomenon, while causal studies are concerned with the

„why‟ question, about „how‟ one variable affects another (Emory 1985)

Consequently, the research question of the current study indicate that this study

combines both descriptive and causal studies

In seeking to answer the research question, the characteristics of service quality

have been investigated and described from customers‟s perspective As such,

descriptive research is more appropriate than exploratory research

In terms of research techniques, survey research was chosen to assess the

research questions (hypotheses) for this study, for 2 reasons Firstly, surveys

provide a quick, efficient and accurate means of assessing information

about a population, especially in cases where there is a lack of secondary data

(Zikmund 1997) Secondly, the survey has been the most popular method used

previously to measure service quality

Before conducting the final survey, an interview pilot with a sample size of 40

were conducted, to adjust and judge the applicability of instrument items For

this purpose, statements of the SERVQUAL instrument were modified

(Parasuraman et al.,1988) to best fit in the this context of Therefore, suggestions

are received during the preliminary study; statements were prepared and included

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in the final study (Table 3-1) Measurement for customer satisfaction is placed

separately Data collection and data analysis will be conducted and given out the

Results The research process was described as following:

Figure 3-1 : Research Process

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3.2.1 Primary Data

The primary data is statistically significant and can be used as part of a research

methodology "Data is the data that researchers come from for specific purposes

to address research problems."(Malhotra, 2007) That's what researchers collect

initially from the sample or target population

The data collected can help a company measure, evaluate and discuss data

collection results for whatever purpose information is requested Therefore, key

data can be interpreted as information obtained from sources such as personal

interviews, questionnaires or surveys with specific intentions and on a particular

topic and observation and discussion Researcher, what information is then

evaluated by that person This is a direct approach and as it is tailored to the

specific needs of the company, it is clear that it is very necessary to inform the

company that the research begins, that is, the results Used for the purpose they

initially intended It can be a long process but provide direct information In this

study, the main data used was the results from the interview and questionnaire

3.2.2 Secondary Data

“Secondary data are data collected for some purposes other than the problem at

hand.” (Malhotra, 2007) Secondary data is information that is already available

somewhere, whether it be in journals, on the internet, in a company's records or,

on a larger scale, in corporate or governmental archives Secondary data allows

for comparison of, say, several years worth of statistical information relating to,

for example, a sector of the economy, where the information may be used to

measure the effects of change or whatever it is that is being researched In this

study secondary data were collected from online articles and journals

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In this study, a preliminary interview was conducted to clarify the quality of

service provided at the HC - Pico Plaza branch Most researchers suggest that

qualitative techniques are appropriate The preliminary interview was used

because we wanted to make it clear that SERVQUAL was a way of evaluating

customers and understanding SERVQUAL in the service industry in HCMC The

interview is used to ask and discuss the quality of service that is important to

customers at this branch, especially 5-way SERVQUAL

We interviewed 40 individual customers, and the interview was developed and

used to direct the question and answer, lasting for 5 minutes with a drafted

questionnaire (see appendix 1) As a result of the interview, SERVQUAL

captures the customer's ideas in five aspects of service quality and has been used

as independent variables in the Construct Construct Scale for the pilot (see

Appendix 1.1 compared Comparison between the post-interview adjustment and

the SERVQUAL model of Parasuraman (1988)

A 5-point Likert scale has been used to measure different structures from strong

and strong disagreements This is a widely used evaluation scale that requires

respondents to indicate the level of agreement or disagreement with each

statement or question (Albaum, 1997) This rank scale is easy to construct and

manage, and respondents easily understand how to use the scale (Malhotra and

Birks, 2003) and five levels in accordance with traditional Aaker (1997)

guidelines

The questionnaire consists of 2 parts; Part 1 with questions about customer

satisfaction Part 2 contains demographic questions (age, gender, occupation,

monthly income, frequency to HC, duration of use and information affecting the

use decided) The questionnaire was completely developed in Vietnamese for

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Vietnamese clients See Table 3-1 for the final items with the definition of

questionnaires and Appendix 2 for a copy of the questionnaire

Table 3-1 : Construct Measurement Scales INDEPENDENT VARIABLES

1. RELIABILITY

REL 1 Accurate service time

REL 2 Good drink & food quality

REL 3 The promotions are applied correctly

REL 4 Suitable menu

REL 5 Get the order as required

REL 6 The product is sold at the right price

REL 7 Few errors in service process

2 RESPONSIVENESS

RES 1 Provide customer support services via Email and Facebook

RES 2 Employee are always ready to help

RES 3 Fast problem solved

RES 4 Fast purchase process

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RES 5 Employee are never too busy to meet your requirement

RES 6 The staff always check information after the order

3 TANGIBLE

TAN 1 Good Wifi system

TAN 2 Comfortable seatings

TAN 3 Convenient location

TAN 4 Good design

TAN 5 Courtesy employee‟s uniform

4 ASSURANCE

ASS 1 Employee have knowledge to answer customer‟s question

ASS 2 Employee are friendly and patient to answer customer

inquiry/complaint

ASS 3 Employee have welcome, courteous attitude

ASS 4 Good product consultant

ASS 5 Employee always protect right of customer

ASS 6 Good security

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ASS 7 Payment correctly

ASS 8 Honesty of employee

5 EMPATHY

EMP 1 Employee have pay special attention to customer

EMP 2 The store has employee who care about you

EMP 3 Employee understand customer‟s need

DEPENDENT VARIABLES

6 SATISFACTION LEVEL OF SERVICE QUALITY

CS 1 I‟m completely satisfied with the service quality at store

CS 2 I‟m completely satisfied with delivered service style of employee

CS 3 Price of product I am using really fits in its quality

CS 4 I‟m completely satisfied with the service of current at store

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