The impact of logistics service quality on customer loyalty an empirical research in vietnam

CỘNG HÒA XÃ HỘI CHỦ NGHĨA VIỆT NAM Độc lập – Tự do – Hạnh phúc ---o0o--- BẢN CAM ĐOAN Họ tên học viên: NGÔ HOÀNG THÔNG Ngày sinh : 10.07.1991 Nơi sinh : TIỀN GIANG Ngày trúng tuyển đầ

ISB-MBUS INFORMATION FORM

1 Name: NGO HOANG THONG

2 Date of Birth: 10.07.1991

3 Course year: 2018

4 Mobile: 0914 785 338

5 Email: ngohthong@gmail.com

6 Home address: 220/21 Le Van Sy, Ward 14, Dist 3, HCM

7 Occupation: Businessman Position: Businessman

8 Office name: NEW STAR LOGISTICS COMPANY LIMITED

9 Office location: 56 Yen The Street, Ward 2, Dist Tan Binh, HCM

10 How have I changed after two years studying at ISB?

After two years studying at ISB, I studied a lot of economic knowledge such as Business Accounting, Human Resources Management, Corporate Financial, Strategic Marketing, Research Design… I feel more mature, calmer and more confident when I face with problems

11 What I want to share with the juniors is:

Firstly, there will be a lot of useful knowledge for your job

Secondly, there will be many good teachers during your studying

Thirdly, there will be many best friends who you can study together

Finally, ISB is the best choice while studying MBA

WISHING YOU EVERY SUCCESS IN YOUR CHOSEN PATH!

CỘNG HÒA XÃ HỘI CHỦ NGHĨA VIỆT NAM

Độc lập – Tự do – Hạnh phúc

-o0o -

BẢN CAM ĐOAN Họ tên học viên: NGÔ HOÀNG THÔNG Ngày sinh : 10.07.1991 Nơi sinh : TIỀN GIANG Ngày trúng tuyển đầu vào năm: 2016 Là tác giả của đề tài luận văn: The Impact of Logistics Service Quality on Customer Loyalty: An Empirical Research in Vietnam Giáo viên hướng dẫn: TS Đoàn Anh Tuấn Ngành: Quản Trị Kinh Doanh Mã số: 22160046 Bảo vệ luận văn ngày : 12.11.2018 Điểm bảo vệ luận văn : 7.0 Tôi cam đoan đã chỉnh sửa nội dung luận văn thạc sĩ kinh tế với đề tài trên, theo góp ý của Hội đồng chấm luận văn thạc sĩ TP Hồ Chí Minh, ngày 20 tháng 12 năm 2018 Người cam đoan Chủ tịch Hội đồng chấm luận văn (Ký và ghi rõ họ tên) (Ký và ghi rõ họ tên) Hội đồng chấm luận văn 05 (năm) thành viên gồm : Chủ tịch :………

Phản biện 1:………

Phản biện 2: ………

Thư ký : ………

Ủy Viên : ………

CỘNG HÒA XÃ HỘI CHỦ NGHĨA VIỆT NAM

Độc lập – Tự do – Hạnh phúc

-o0o - BẢNG TỔNG HỢP NỘI DUNG CHỈNH SỬA LUẬN VĂN SAU BẢO VỆ

1 The abstract: some content is not

appropriate, for example: some concept

& the context relating to SMEs

The subject of the study is customers in small and medium logistics companies to improve the competitiveness in the logistics market in Vietnam The author focuses on this object and the contents in abstract are completely

suitable to the whole essay

Page 6

2 Hypothesis development: need to add

more clear explanation on H4

Hypothesis was added more explanation by reviewing previous research

Page 15 -17

3 The supported literature needs to be

updated by more recent studies

Be updated by some recent research Page 15-17

4 Why did you mention about gender and

age in the discussion part? Is there any

link with prior studies

During the survey, author realizes gender and age also effect customer loyalty and moved

this part for future research

Page 34

5 No need to check the relationship

between to components of one concept

=> explain

The objective of this thesis is deeply studying the interactions factors under the same components and the effect of different components The author believe that there are more new contribution into theories as well

as managerial

Page 9

HỌC VIÊN

(Ký, ghi rõ họ tên)

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-NGO HOANG THONG

THE IMPACT OF LOGISTICS

SERVICE QUALITY ON CUSTOMER

LOYALTY: AN EMPIRICAL

RESEARCH IN VIETNAM

MASTER OF BUSINESS ADMINISTRATION

Ho Chi Minh City – Year 2018.

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-NGO HOANG THONG

THE IMPACT OF LOGISTICS

SERVICE QUALITY ON CUSTOMER

LOYALTY: AN EMPIRICAL

RESEARCH IN VIETNAM

MASTER OF BUSINESS ADMINISTRATION

SUPERVISOR: DR DOAN ANH TUAN.

Ho Chi Minh City – Year 2018

Table of contents

List of figures 4

List of tables 4

Acknowledgements 5

Abstract 6

1 Introduction 7

2 Literature review and hypothesis 11

2.1 Logistics Service Quality (LSQ) 11

2.2 Satisfaction 13

2.3 Customer loyalty 13

2.4 Conceptual model and hypothesis 14

3 Research methodology 18

3.1 Research process 18

3.2 Sample Design 20

3.3 Measurement Scales 21

3.4 Data analysis method 23

3.5 Confirmatory factor analysis (CFA) 24

3.6 SEM analysis 24

4 Research results 25

4.1 Data statistical analysis 25

4.2 Scale Analysis Results 27

4.3 CFA results 27

4.4 Hypothesis Testing Results 29

5 Discussion, implication and limitation 33

5.1 Discussion 33

5.2 Managerial implication 34

5.3 Limitation and direction for future research 35

List of acronyms

- ISB: International School of Business

- HCM: Ho Chi Minh

- CFA: Confirmatory Factor Analysis

- OP LSQ: Operational Logistics Service Quality

- RL LSQ: Relational Logistics Service Quality

- SATIS: Satisfaction

- AC: Affective Commitment

- PB: Purchase Behavior

List of figures

Figure 1 - Conceptual Model……….16

Figure 2 - Research Procedure……… 17

List of tables Table 1: A descriptive Statistics of the sample……… 24

Table 2: Standardized CFA Loadings of item……… 26

Table 3: Correlation results………27

Table 4: Results from the structural model……… 28

Acknowledgements

Firstly, I would like to send my thanks Dr Doan Anh Tuan who helped and supported

me a lot in completing this thesis Besides helping me to choose this topic, he also helps

me how to find useful material for this thesis It makes me feel self-confident so I can reference previous thesis and enhance my writing thesis skills By updating new knowledge, it helps me feel strong spirit to complete this thesis In a word, Dr Doan Anh Tuan is very professional and wonderful and distributes big parts in my completing this thesis

Secondly, I would like to send my thanks other teacher who taught me in International school of Business (ISB) during whole course Each teacher gave me some knowledge; they contributed many materials to complete my thesis

Thirdly, I would like to send my thanks classmate who help me to right format with APA 6th edition In addition, I also send my thanks to attended survey persons They contributed into my success a lot

Finally, I would like to send my thanks to family; they create good condition for me to complete this thesis, especially Mr Tung Minh Tuan - Director of KHS Viet Nam, who encourages me to complete this master thesis

Abstract

Customers are one of the most important factors which help to determine to the survival

of a business The company cannot operate without customers Retaining or repeat customer are an essential for a business to grow and develop The customer base is the key area for generating profits, this allows the business to expand and grow operations; the effectiveness of corporate strategy is enhanced Developing retaining current customer will increase cross –sell and up-sell more and more Some previous studies also

show that customer satisfaction has a positive influence business strategy Therefore, the

assessment of the determinants affecting the customer satisfaction is very necessary for

the logistics service companies, especially for small & medium private logistics companies

Nowadays, customer has many different choices because of increasingly homogeneity products from different suppliers The seller has to differentiate by enhancing their customer service and procudurement Business more and more aware of the importance

of loyal customers So attaining customer loyalty is extremely difficult and the firms try our best to acheive it everyday This research build on a multidimensional construct, extend previous theory to explore correlation between affective commitment and purchase behavior The research subject is supplier – retailers context and this companies are competing against the huge corporate, so their perspective is usually ignored This research extend the generalizability of previous studies to enhance competitive advantages In addition, the research also explore the relationship between logistics

service quality and customer loyalty Finally, the research examinine the relationship between satisfaction and loyalty

1 Introduction

Today, the significance of growing and keeping relationships with clients is widely accepted in the literature Enhancing logistics services quality research, business can increase long-term relationships (Ganesan, 1994) Moreover, LSQ relationships can be a strong source of advantage because of their possibility to create high competition (Day, 2000) Customer loyalty is expanding as long-run wonderful road because new clients is discovered and it spends a lot of time, effort and money to join business with them (Mittal & Lassar, 1998) It can be cheaper maintain customer than win a new customer and business would like to develop in their own business and recognizes to expand and enhance customer loyalty (Kandampully, 1998) Reichheld, Markey Jr, & Hopton (2000) introduced that building customer loyalty with select clients was to breakthrough competitive advantage These theories are still right until nowadays and it becomes as survival competition Because products become same same and tangible products are not unique advantages of companies Beside good products, the services will create loyal customer and have to focus investment The service established from staff in the company, they need training, salary policy and great environment to adapt customer needs If there is good products only, company can’t compete with another sellers in logistics industry Logistics Industry is service field so it’s very necessary to create profit base on customer loyalty Once customer believes in company’s service, customer can

introduce to other clients Practicing to enhance customer loyalty is you have some trouble in handling shipment; it’s very easy to solve and receive sympathy from client

There are many different ways to give client trust, convenience, reliability and support within complicated relationship in big group In the energetic market, the suppliers try to find many ways to maintain and enhance customer loyalty (Flint & Mentzer, 2000) A key objective to identify key account clients and gain a better knowledge in the relationships between income and outcomes (Hennig-Thurau, Gwinner, & Gremler, 2002) This will help business to choose which client should be more focused and which client can create more profit and benefits

Moreover, the research explore to understand how and why the psychology of client effect by logistics service quality on customer loyalty which elements behind client’s psychology in decision purchase (Pritchard, Havitz, & Howard, 1999) Base on real managerial issues, a sense of loyalty is rather not clear There are some barriers between SATIS and Loyalty

The objectives of this study are to test the loyalty elements and clarify the importance

of LSQ effect on customer loyalty The main purpose is to help company understand clearly the impact of LSQ on customer loyalty The rest of this research is reviewing literature and hypotheses, existing literature on the theories of elements (LSQ, loyalty…) are reviewed from previous studies to build conceptual model The next session is research methodology to collect sample, data analysis and create code for each statement

Next two sessions are data results then research objectives are then discussed, followed

by contributions expected from the dissertation

There are some researches about customer satisfaction in logistics field such as analyzes the impact of port service quality on customer satisfaction: The case of Singapore (Bienstock, 2002) identify the Technology acceptance and satisfaction with logistics services The previous research presented the relationship between logistics service quality and customer loyalty such as analysis the Role of Logistics Service Quality in Creating Therefore, this research examines ―how logistics service quality affects customer loyalty‖, ―which is conceptualized as a causal relationship between affective commitment and purchase behavior‖ The previous study is not clear enough to explain the phenomena in complex relationships The gaps will be followed research question as below:

(i) What is the relationship between AC (the emotional component) and PB (the

behavioral component)?

(ii) What is the level effect of LSQ on customer loyalty? Whether are there

differences in supplier-retailer context?

(iii) Whether are there examine of the connection between SATIS and the

behavioral component of loyalty?

Based on the above analysis, the first objective of this research is to review previous literature by taking a ―more complex of the loyalty phenomenon, and confirmed the relationship between affective commitment and purchase behavior‖

―The affective commitment is the emotional component and the purchase behavior is the behavioral component‖ The second objective is to extend literature that investigates the impact of logistics service on customer loyalty In this paper compare with previous research, the (LSQ)-loyalty phenomenon are testing in a supplier-retailer to enhance logistics strategic tools create competitive advantage The final objective of this study is to test the possibility in nonlinear working between SATIS and the behavioral of loyalty

This research is designed in Viet Nam where there are a few of research about the impact of logistics service quality on customer loyalty In addition, this research had broadened the knowledge in both B2B in logistics field It extends the ―relationship between logistics service quality, satisfaction and the loyalty phenomenon‖ The research look at together relationship, in this research extends the knowledge by looking at these relationships with more aspect The loyalty relationship has the strength of the relationship between AC and PB, and it is also theorized that calculative commitment this relationship Beside ―there are existing measures, several new measures (based on pilot study) will be developed and tested‖ This research shows the relationship between service quality-satisfaction and loyalty relationship According to Homburg and Giering (2001), there is empirical evidence to support a more complicated structure in a form of repeat purchasing The relationships is explored previous research is more simple than this research Further the findings in this research have produced contradictory findings There are different viewpoints

about the relationship LSQ – satisfaction and customer loyalty, this research reconcile some these differing views This model indicates that there are different loyalty types that would have different strategic implications The firms should select where to complete and satisfy every customer and different market segment According to Zhao, Dröge and Stank (2001), business design to adapt their customer needs, this research explores different customer loyalty In addition, the research will be used in business platform and the result applies for their own company Lastly, developing logistics service research and building in supply chain management (Mentzer & Flint, 1997) This research is having 5 sessions Session 1 is introductions of research, session 2 is literature review and hypothesis, session 3 is research method, session 4 is research results and session 5 is limitation and conclusion

2 Literature review and hypothesis

This part presents the theory about Logistics Service Quality (LSQ), Customer

Satisfaction (CS) and Customer Loyalty (CL) The conceptual platform and hypothesis

for this research are indicated and developed

2.1 Logistics Service Quality (LSQ)

According to La Londe, Zinszer and Management (1977), customer service is scaled by accuracy, order cycle, reliability and timeliness On these days, business knows how to understand what the client needs besides mentioned aspect (Maltz & Maltz, 1998) One factor that most successful firms confirm customer perceptions (Jones, Mothersbaugh, & Beatty, 2002) (Stank, Goldsby, & Vickery, 1999) said that enhancing closeness and

providing higher level of service effectiveness in the logistics service theory In logistics field, marketing tools are applied; specially evaluate logistics service quality based on customer loyalty The evaluation of service performance is presented in marketing field The service quality scale has measured in the service marketing theory All is reviewed

by pilot study and qualitative study with perceived manager and customers (Parasuraman, Zeithaml, & Berry, 1985) This research presented several gaps between supplier customer service and client According to Parasuraman et al (1985) explored a service quality model for testing customer satisfaction and perception of service in service companies There are 2 sides of logistics service (Maltz & Maltz, 1998), the first side is basic basement relating time, delivery and inventory availability The second side is responsiveness and adapts market - driven (Collier, 1991) advised that two different measurements: an internal and an external Following (Stank et al., 1999) developed the operational and relational elements of logistics service performance Based on the existing literature, LSQ comprised two components:

The first is operational LSQ and is presented as understanding of logistics service activities which provide from suppliers that apply customer quality, efficiency It shows with the literature also The second is relational LSQ, it is confirmed as understanding of logistics service activities to adapt customer's needs, expectations and have the ability to provide service qualities In knowledge customer satisfaction is including both internal and external of logistics service quality, business should focus on what factors that makes the great impact influencing future strategic

2.2 Satisfaction

There are many previous studies defining customer satisfaction as according to Oliver (1980), Satisfaction is a function of perceived discrepancy from initial reference point Continue reading and researching, (Day, 1984) said that satisfaction is a consumer's evaluation of perceived discrepancy between prior expectations and the actual performance after its consumption Beside Wangenheim (2003) also gave his opinion that satisfaction is comparison between expected and received performance According to Oliver Richard (1997), satisfaction is consumer's feedback and the standard serves as the basis for comparison Although there have been measured in many ways, from previous research have three aspects: general affective satisfaction, confirmation of expectation, the distance from customers produces From some literature, customer satisfaction is advised the results of internal and external concept evaluation and comparison with expect standard

2.3 Customer loyalty

It is necessary to change from focus on winning new clients to focus on maintaining and improving current client to develop customer loyalty According to Bowersox and Daugherty (1995), strategic supplier in logistics field is customer loyalty improving current client to develop customer loyalty Most of previous research about customer loyalty but they are ambiguous and hard to implement (Dick & Basu, 1994) Loyalty is the strength of the relationship between a customer’s relative attitude and repeat patronage (Ellinger, Daugherty, & Plair, 1999) Loyalty is a long-term commitment to

repurchase involving both repeated patronage (repurchase intentions) and a favorable attitude (commitment to the relationship) According to Estelami (2000), Loyalty is the behavioral tendency of the consumer to repurchase from the firm According to Dick & Basu (1994), loyalty is relationship between emotions and behavior According to loyalty literature bases that concept loyalty as involving behavior and feelings, as well as Dick and Basu (1994) productive concept, loyalty is explained as the strength of the relation between a consumers’ AC toward the seller and the restatet PB with the selling company

2.4 Conceptual model and hypothesis

Relational LSQ related the customer’s perceptions about logistics company staff Operational elements included commitment as promised service dependably and accurately (Stank et al., 1999) According to Mentzer, Flint, and Hult (2001) Affective Commitment affects Purchase Behavior Loyalty

This included whether the customers understand the logistics company staff enough experience and knowledgeable, listen with their situation, and helped them resolve issues Some previous researches show that staff contacts quality affected positively operational LSQ elements ―(e.g., timeliness, order accuracy, order condition)‖ This helps company understand clearly what the customer needs Then, when leaning these needs, the supplier can focus on their guide (Stank et al., 1999)

H1: “Relational LSQ has a positive effect on Operational LSQ”

Operational and relational LSQ positively affect satisfaction According to Mentzer et al (2001), there are many descriptions of logistics service quality create customer

satisfaction so business should keep own performance such as right amount right products right place and time with right information (Coyle, Bardi, & Langley, 1996) (Lambert & Stock, 1993) With numerous measurements, there are three aspects of satisfaction, including: full satisfaction, expectations, and some real evidences According to Daugherty, Stank and Ellinger (1998) the research have both operational and relational performance have positive connect to customer satisfaction (Stank et al., 1999) indicated that the relationship between OP and CS was positively linked together, leading them to improve with higher level of consumer satisfaction Whether relationship between relational appearance and satisfaction (Stank, Goldsby, Vickery, & Savitskie, 2003) found that relational appearance proves a positive relation with satisfaction They concluded that OP is an ―order qualifier‖ Viewing LSQ from a process viewpoint (Mentzer et al., 2001) also found that for different consumer parts satisfaction was positively affected by different LSQ significance The findings are measured; there is sign to suppose that both operational LSQ and relational LSQ results satisfaction Therefore,

H2: “Operational LSQ has a positive impact on satisfaction”

H3: “Relational LSQ has a positive impact on satisfaction”

The next relationship demonstrated in the model is loyalty, already defined as the causal relationship between affective commitment and purchase behavior A number of researchers have argued that affective commitment best describes the emotional component of loyalty (Mahoney, Madrigal and Howard 2000) In the marketing channels

literatures, affective commitment expresses the extent to which channel members like to

maintain their relationship with specific partners (Geyskens et al 1996; Mattila 2004) It represents an attitudinal affective orientation and a general positive feeling toward an exchange partner that is apart from its purely instrumental worth (Ruyter and Wetzels 1999) Research suggests affective commitment is effective for developing and maintaining mutually beneficial relationship between partners (Kumar, Hibbard and Stern 1994) For this research, affective commitment is defined as the strength of emotional attachment and positive feelings that a customer has for supplier

Loyalty is also demonstrated by the purchasing pattern over time (Dick and Basu 1994) It involves the likelihood of using a supplier again in the future (Jones, Mothersbaugh and Beatty 2003), and refers to how long the customers has been using the supplier, what the share of supply is currently and will be in the future compared to other suppliers, and the likelihood of making purchases in the future Therefore, purchase behavior is defined as the likelihood of using a supplier’s products or service again in the future

Hansen and Hetn (2004) summarize loyalty by explaining that if a customer’s affective commitment is high, it should bring about a wish and motivation to continue the relationship Since this type of commitment does not include any instrumental cost- benefit evaluations, it is derived from the emotional pleasure associated with the relationship partner, and the feelings of fondness developed within the relationship As

LSQ Components Loyalty

such, affective commitment parties are inclined to maintain the relationship and exhibit repeat purchasing behavior

H4: “Affective commitment has a positive effect on purchasing behavior”

The final is the relationship between satisfaction and loyalty According to Wetzels,

De Ruyter and Van Birgelen (1998), there is the relation between SATIS and AC that more satisfied customer are more effectively committed to the selling company (Johnson, Gustafsson, Andreassen, Lervik, & Cha, 2001) argued that satisfaction affects repurchase intention behavior and strong relationship with customer loyalty also found a positive relation and suggest that AC differentiates between true loyalty and spurious loyalty ―The most important difference between the two concepts is that true loyalty is based on affective commitment and spurious loyalty is not based on any commitment at all (but may be purchase behavior based upon a lack of alternatives)‖

H5: “There is a positive relationship between SATIS and AC”

H6: “The relationship between satisfaction and purchasing behavior is positive”

H4

H6 H6 H2

Affective Commitment

H1

H3

H5

Figure 1 – Conceptual Model

3 Research methodology

This session presented research methodology which is used to do this research It will present research process, sample design, measurement scales and the technique of analyzing data

Figure 2 - Research Process

Draft questionnaire

Reliability analysis

A survey of 280

questionnaires

Final questionnaire Revision

After identifying research problem, research objectives and reviewing the literature, the draft questionnaire was shown based on measurement used in same previous studies

In research design step, there are 2 sub-steps:

Pilot survey: was conducted by interviewing 10 Logistics managers in supplier

companies about the contents, the structure of the questionnaire test the meaning of the measurement scales After that, the draft questionnaire was revised and the sample size was determined

Regarding this topic for master thesis, from 10.May.2018 to 19.May.2018, One survey was done in my New Star Logistics - 56 Yen The, Ward 2, Tan Binh District There are

15 respondents in this survey All respondents are current NSL’s customer; they are working as professional and long year experience in export -import field The purpose of this survey is to review the draft questionnaire, clarify some words and correct right words to get final questionnaire Then there is one survey with big sample will be done and get data analysis to prepare for the presentation

First of all, the survey participants were 3 members who are holding the position Sales Manager, Planning Executive and Technical Executive in Foreign Companies The reason is that they don’t have enough right to choose forwarder in their company The first mistake in the survey was to select the wrong audiences So the questionaire was forwarded to General Director or Purchasing Manager who have enough right to choose forwarder for their company In addtion, the participants suggested that it’s necessary to

add ―Couriers Express Service‖ in question 2 Part 1 and should have definition before starting each parts of questionaire

Main survey: Final questionnaire were delivered directly and indirectly to

respondents who working in Logistics Company in Ho Chi Minh City Data was collected in two weeks

In data analysis step, the collected data was used to test reliability and validity of the measurement scales by Cronbach’s alpha coefficient Then, AMOS used method to test the hypotheses proposed in this study The final step, the author discussed the findings and conclusions based on the results of the above step

3.2 Sample Design

According to Bollen (1989), the sample size should be as large as possible with the minimum should be at least five times as the number of items to be analyzed and preferably not less than 100 As there are 22 variables used for the factor analysis, the necessary sample size should be: 22*5= 110 observations In addition, for standard analysis, the required sample is recommended by (Tabachnick & Fidell, 2001) should be: n>50+8m (which m: number of independent variables) There are 04 independent variables in this research Hence the minimum sample required to run is: n>50+8*4=82 observations The sample size is 280 observations which are appropriate for this research

Samples were selected by convenience sampling method combined with criteria: respondents used to use logistics services Pilot study held 200 emails survey, along with discussions with logistics manager to develop the questionnaire in this study For the

email survey, participants from both sexes were selected During these interviews, participants were questioned on various aspects concerning the logistics services, and on how they evaluated their satisfaction to logistics service After testing the survey, the questionnaire was revised and prepared for the main survey

3.3 Measurement Scales

Operational LSQ

According to Stank et al (2003), ―Operational LSQ is defined as perceptions of logistics activities performed by service providers that contribute to consistent quality, productivity and efficiency‖ This factor was measured on a seven-point Likert-type scale ranging from 1 = Strongly Disagree to 7 = Strongly Agree in order to explore the opinion

of the respondents by statement as below:

(1): Strongly disagree; (2): Disagree (3): Fairly disagree

(4): Neutral (5): Fairly agree (6): Agree (7): Strongly Agree

3.Goods are delivered on or before the requested delivery

date

OP3

5 Supplier deals with order issues as soon as the order

arrives

OP5

Relational LSQ

―Relational LSQ is defined as the perceptions of logistics activities that bring the firm closer to its customers, in order to understand customers’ needs and expectations and have the ability to provide quality services to meet them in an efficient manner (Stank et al., 2003)‖ The statement of this factor as below:

6 ―Proactively communicate supply issues that may

delay our order‖

RL1

7 ―Cooperate with us to help us make order processing

more efficient‖

RL2

8.‖Make recommendations for continuous

improvement on an ongoing basis‖

RL3

13.The provider gives us "perfect" service SATIS3

Affective Commitment

Items adapted from previous research with prestige researchers These items measure follow by Kim & Frazier (1997) The statement for this factor as below:

15 We have developed a closer business relationship with

current logistics service provider

AC1

16 We really like doing business with current logistics

service provider

AC2

17 We are willing to put in more effort to purchase

products from current logistics service provider

19 We have purchased more logistics service products over

the last several years

PB1

21 The current service provider has been our main partner for

many years

PB3

22 We hope the current service provider will continue to work

with me in the future

PB4

3.4 Data analysis method

The data was analyzed through the SPSS software which could enable the Cronbach’s Alpha Analysis and AMOS software could able to CFA and SEM analysis

Reliability Analysis

Cronbach’s Alpha Analysis was used to test the reliability of the measurement scales is bigger 0.7 (Pallant, 2005) ―Principal Axis Factoring was used as a method to extract the factors in this study, together with Promax as a rotation technique In order to assure 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 95 and there should be a ratio of at least file cases for each of variables‖

3.5 Confirmatory factor analysis (CFA)

In testing the validity measurement of scale, some researchers have favorite to CFA because of some advantages According to CFA method allows to measures the relationship between concepts in the model together without standard error In addition,

we could test the Convergent validity, Discriminant validity without using many methods

as traditional method In order test model fit, we could use indicators as following: CMIN/df, < 3; CFI (comparative fit index) <0.9, average variance extracted (AVE) >0.5 However, based on, if model fit is good, it means it only a part of condition for scale achieve and standardize estimate >0.5

3.6 SEM analysis

Because of the covariate nature of the relation structure model, structural equation modeling (SEM) was reasoned an appropriate method to assess the research literature (Loehlin 1998) SEM offers many benefits over other statistical way such as accounting for scale error in latent variables when calculate path relationships between latent

variables In addition, SEM is ideal for comparing rival theoretical models (Garver & Mentzer, 1999), such as those presented in part 2 ―Following this introduction, the theoretical model is presented again as a structural equation model consisting only of latent variables that will be scaled as part of this research‖ The section describes the research design, including the sample ―The development of measures is discussed in next section, including measures that have been adapted from existing scales, and the procedures for developing new measures for operational and relational‖

4 Research results

The purpose of this session is to present the findings of the data analysis through the steps

of Cronbach’s alpha test, confirmatory factor analysis (CFA), theoretical model test by using SEM analysis

4.1 Data statistical analysis

The survey was conducted with 280 questionnaires collected from client using logistics

service Total were gathered from clients who were working in logistics fields, Viet Nam

In that, 80 questionnaires were uncompleted or sloppy done The usable number obtained

to put into analysis was 200 observations, obtain 71.4% feedback ratio A descriptive statistics of the sample is shown In 200 feedbacks, 49% is male and 51% female In term

of age, the majority are official employee aged from 26 to under 35 (69.5%), the age from 18 to under 25 (19.5%), the age from 36 to under 45 (9.5%) and the age above 45 is 1.5% The income is under 10 million (25%); from 10 to under 20 million (52.5%); above 45 million (22.5%) The education is high school is 74.5% and university is 25.5%

The scales were reliability tested by Cronbach’s Alpha coefficient and Confirmatory Factor Analysis (CFA) before using SEM analysis to test research hypothesis All figures showed in Table 1 as below

Table 1 A descriptive Statistics of the sample

4.2 Scale Analysis Results

Cronbach’s Alpha coefficient of reliability test was used to assess the consistency of the research’s concepts ―Firstly, items which their item- total correlation was less than 0.3 were removed and items were chosen when their Cronbach’s Alpha coefficient of reliability was from 0.6‖ Following that, factor loading of items which were less than 0.5 continued to remove

4.3 CFA results

The CFA results for research model illustrated that ―square=374.316, p=.000, square/df= 2.384, GFI=.840, TLI=.895, CFI =.913, RMSEA=.0830‖ It confirmed that these scales received an allowable fit to the data The entire standard were quite than 0.5 and significant (p<0.05) Hence, it can be concluding that these scales satisfactory with the requirement for straight equity and discriminant validity accomplishment Furthermore, these scales achieved unidimensionality due to the correlations among items error were missing All figures results presented in Table 2 as below

Chi-Table 2: Standardized CFA Loadings of item

Items M SD Loadings

t-statistic Operational LSQ

Existing service providers deliver as promised 5.30 1.412 0.821 10.471 Goods are delivered on or before the requested delivery date 4.70 1429 0.676 9.937

Supplier deals with order issues as soon as the order arrives 4.90 1.323 0.813

Relational LSQ

Proactively communicate supply issues that may delay our order 4.46 1.377 0.737 10.760

Cooperate with us to help us make order processing more

Make recommendations for continuous improvement on an

Satisfaction

In general, we are very satisfied with the service of my provider 4.88 1.259 0.821

The provider gives us "perfect" service 4.60 1.136 0.690 10.175

Affective Commitment

We have developed a closer business relationship with current

We really like doing business with current logistics service

We am willing to put in more effort to purchase products from

We want to remain a customer of current logistics service

Table 3: Correlation results

Measure Relational

LSQ

Operational LSQ Satisfaction

Affective Commitment

Purchase Behavior

** Significant at the 0.05 level

4.4 Hypothesis Testing Results

SEM was used to test the structural model All model estimation results are presented in table 4 Overall, the figure indicated that an acceptable fit to the data: ―Chi-square = 371.575, p=.000, NFI = 847, RFI =.844, IFI=0.920, TLI =0.905 and CFI = 0.920; RMSEA=.080‖ The estimation results of the relations among concepts in model were statistical significant with 95% confidence internal (p<.05) It demonstrated that theoretical model fit to data The results showed that service quality has logistics service quality contribution to satisfaction and has significant direct effect on satisfaction It could be, thus, concluded that hypotheses were all supported by the data set in this research The first hypothesis, a positive relationship between relational LSQ and operational LSQ engagement found (β =.734, p<0.001) Hypothesis 2 presented a positive relationship between operational LSQ and satisfaction (β=.594, p<.001) The estimated structural with data β=.365, p<0.001 showed that hypothesis 3 is a positive correlation between relational LSQ and satisfaction Hypothesis 5 have a positive relationship between satisfaction and affective commitment (β=.749, p<0.001)