Service quaility, perceived price and customer satisfaction in higher education , luận văn thạc sĩ

UNIVERSITY OF ECONOMICS HO CHI MINH CITYInternational School of Business ---Diep Quoc Bao SERVICE QUALITY, PERCEIVED PRICE AND CUSTOMER SATISFACTION IN HIGHER EDUCATION A comparison bet

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-Diep Quoc Bao

SERVICE QUALITY, PERCEIVED PRICE AND CUSTOMER

SATISFACTION IN HIGHER EDUCATION

A comparison between

Public Universities and Non-public Universities in Vietnam

MASTER OF BUSINESS (Honours)

Ho Chi Minh City – Year 2012

-Diep Quoc Bao

SERVICE QUALITY, PERCEIVED PRICE AND CUSTOMER

SATISFACTION IN HIGHER EDUCATION

1

-ABSTRACT

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

The results indicate that both University Service Quality and Perceived Tuition playsignificant role in predicting Student Satisfaction In addition, Perceived Tuition notonly has a direct impact on Student Satisfaction, but also an indirect influence throughUniversity Service Quality The findings of this research also provide evidence of thedifferences between Public sector and Non-public sector in the influence of PerceivedTuition on University Service Quality, Student Satisfaction, and University ServiceQuality on Student Satisfaction Particularly, the effect of Perceived Tuition andUniversity Service Quality on Student Satisfaction is much greater in Non-publicuniversities compared to that in Public universities Hence, an increase in Universityservice quality or Perceived tuition leads to a higher increase in Student satisfactionextent in Non-public universities compared to Public sector It implies that universitymanagers have to pay attention to improve their service quality and consider theapproach in pricing the service in other to satisfy their students The students arepersuaded by the fitness between service quality they receive and the tuition they have

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

in the valuable directions for further researches in future

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

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

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

Signed

Date: December, 2012

Acknowledgement iii

Statement of authentication iv

Table of contents v

Appendix vii

List of Tables viii

List of Figures viii

ABSTRACT 1

Chapter 1 – INTRODUCTION 2

1.1 Higher education in Vietnam 2

1.2 Research problem statement 5

1.3 Research objectives 8

1.4 Scope of the research 8

1.5 Significance of the research 9

1.6 Organization of the thesis 9

Chapter 2 – LITERATURE REVIEW AND HYPOTHESES 11

2.1 Literatures review 12

2.1.1 Customer satisfaction 12

2.1.2 Service quality concept and measurement 12

2.1.3 Service quality in higher education 14

2.1.4 Perceived service price in higher education 16

2.1.5 Customer satisfaction 17

2.1.6 Customer satisfaction in higher education 19

2.1.7 Service quality and customer satisfaction in higher education 19

2.1.8 Perceived price and customer satisfaction in higher education 20

2.1.9 Perceived price and service quality in higher education 21

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

2.2 Research model & hypotheses 24

vi

-Chapter 3 – RESEARCH METHODS 26

3.1 Research procedure 27

3.2 Qualitative research design 28

3.3 Quantitative research design 29

3.3.1 Measurement scale 29

3.3.2 Sampling 32

3.3.3 Sample size 33

3.3.4 Data analysis 34

Chapter 4 – DATA ANALYSIS AND REASEARCH RESULTS 35

4.1 Data statistical analysis 36

4.2 Cronbach’s Alpha coefficient of reliability test 36

4.3 Exploratory Factor Analysis (EFA) result 39

4.4 Confirmatory Factor Analysis (CFA) result 42

4.4.1 CFA for University Service Quality scale 42

4.4.2 CFA for Perceived Tuition scale and Student Satisfaction scale 43

4.4.3 Saturated Model 44

4.4.3.1 Discriminant validity test 45

4.4.3.2 Composite reliability and variance extracted 45

4.5 Research model test 46

4.5.1 Theoretical model test by using SEM approach 46

4.5.2 Theoretical model estimation by BOOTSTRAP 49

4.5.3 Results of Multi-group analysis 49

Chapter 5 - DISCUSSION, IMPLICATIONS AND LIMITATIONS 55

5.1 Discussion and implications of the research 56

5.2 Limitations and directions for further research 58

CONCLUSION 61

REFERENCES 62

Appendix 3.1 - Script for focus group interview 68

Appendix 3.2 - The qualitative research findings 70

Appendix 3.3 – Questionnaire 73

Appendix 4.1 - The result of EFA analysis 79

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

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

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

Appendix 4.5 - Saturated model 85

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

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

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

viii

-LIST OF TABLES

Table 3.1 : Measurement scales

Table 4.1 : Descriptive statistics of the data

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

Table 4.3 : EFA analysis result

Table 4.4 : Cronbach’ Alpha results after excluding unsatisfactory items

Table 4.5 : The results for reliability and variance extracted test

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

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

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

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

(unstandardized estimates)

LIST OF FIGURES

Figure 2.1 : The model of customer satisfaction

Figure 2.2 : Research model

Figure 3.1 : Research procedure

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

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

(According to University type)

Chapter 1 INTRODUCTION

1.1 Higher education in Vietnam

According to the Vietnamese Education Law in 2012, higher education coversundergraduate and postgraduate studies Undergraduate studies can lead to diploma orbachelor degrees while postgraduate studies can lead to master degrees and doctoratedegrees In Vietnam higher education system, higher education institutions arestructured including: Colleges can offer college programs and other lower levelprograms; Universities can offer college, undergraduate, master and doctorateprograms as assigned by the Prime Minister; Research institutes can offer doctorateprograms and in cooperating with universities can offer master programs subject topermission from the Prime Minister

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

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

3

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

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

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

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

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

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

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

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

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

of the universities (Do Hop, 2012) The relationship between service quality in highereducation and the price – tuition – which the students have to pay for service received needs

to be considered adequately

In the Fundamental and Comprehensive Renovation of Higher Education during2006−2020 addressed in Resolution 14/2005/NQ-CP of the Government dated 2November, year 2005, the objective emphasized in building and developing qualityassurance system for higher education However, Vietnamese educators andeducational leaders are still confused about how to implement quality assurance andaccreditation in the Vietnamese context (Nguyen, Oliver, Priddy, 2009)

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

5

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

1.2 Research problem statement

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

& Hult, 2000) The major attention is to identify the relationships among theseconcepts Cronin and Taylor (1992) identified that service quality is an antecedent ofcustomer satisfaction Furthermore, the influence of service quality on customer satisfactionwas more complicated because of the interaction between these concepts (Cronin et al.,2000) Moreover, customer satisfaction is not only influenced by service quality, but also theother aspects consisting product quality, price, situational factors, personal factors (Zeithaml

et al., 2000, p 107) Accordingly, price is a multidimensional concept, including objectiveprice, perceived price, monetary and nonmonetary service price (Zeithaml, 1988) A number

of studies conducted popularly using perceived price, which is the perception of customerabout what is sacrificed to obtain the service, instead of objective price due to the complexpricing environment of services (Chen et al, 1993) However, the price component has notbeen thoroughly investigated in previous empirical study (Bei & Chiao, 2001 as cited inDavid et al., 2007) especially in relationship with service quality and customer satisfaction

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

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

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

7

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

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

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

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

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

Base on aforementioned analysis about the current situation of higher education inVietnam and existing findings about service quality, price and customer satisfaction intertiary education area, in an attempt to explore the relationships among servicequality, service price and customer satisfaction toward higher education services, thisstudy employs the dimensions of service quality in higher education context throughHEDPERF scale to explain the customer satisfaction and to compare these relationship

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

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

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

1.3 Research objectives

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

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

higher education service

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

education service;

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

higher education service;

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

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

1.4 Scope of the research

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

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

9

-1.5 Significance of the research

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

as existing studies have focused on SERVQUAL and SERVPERF approachesrepeatedly

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

1.6 Organization of the thesis

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

This chapter reflects the current situation of higher education in Vietnam, as well asdiscusses about the existing researches in relationships of service quality, perceivedprice and customer satisfaction in tertiary education It leads to propose the researchproblem, research objectives and significance of this study also presented in thissection

 Chapter 2 - Literatures review and hypotheses

Chapter 2 presents the theoretical foundation of the research, including the definition ofeach concept, namely, service quality, perceived price, customer satisfaction in highereducation context and their relationship in literature From that, the hypotheses arederived and proposed for this research

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

 Chapter 4 – Research results

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

 Chapter 5 – Discussion, Implications and Limitations

The last chapter of this study discusses the research results by affirming the exploratoryvalues as well as connecting to the realistic conditions to suggest the practicalapplication Lastly, the limitations are recognized to direct for further research in thefuture

-11-Chapter 2 LITERATURES REVIEW AND HYPOTHESES

Introduction

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

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

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

2.1 Literatures review

2.1.1 Customers of higher education

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

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

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

2.1.2 Service quality concept and measurement

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

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

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

-13-dimensions Base on gap analysis between expected service and perceived service, theydeveloped a service quality model, including:

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

managers about those expectations;

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

expectations and service quality specifications;

Gap 3: Difference between service quality specifications and actual service

delivered to consumers

Gap 4: Differencebetween actual service delivery and the information consumers

received through communications about service delivery;

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

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

as cited in Nitin Seth et al, 2004)

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

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

materials);

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

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

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

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

The SERVQUAL scale measures service quality through 22 items of five above

dimensions (Parasuraman et al., 1988, 1991)

Although SERVQUAL is criticized by many researchers, it still seems to be the mostpractical model for measuring service quality (Cuthbert, 1996b) Cronin and Taylor(1992) suggested that measuring service quality through the gap model was notadequate in conceptual and operational levels so they approached service quality asderived from perception of performance only and developed the performance-basedinstrument to measure service quality called SERPERF In essence, SERPERF was avariant of SERVQUAL but SERPERF explained more of the variance in servicequality measurement than SERVQUAL (Cronin & Taylor, 1994) Nevertheless, in thecontext of higher education, SERVQUAL measurement scale is more popular andapplied extensively than SERPERF instrument (Ana & Rui, 2009).

2.1.3 Service quality in higher education

In higher education circumstance, the best approach to define service quality is still aconsiderable debate (Becket & Brookes, 2006) The studies of service quality in tertiaryeducation develop relevant measurement instrument conceptualizing SERVQUAL orSERPERF (Parves & Ho, 2010) Many researchers have been undertakingcustomization of established service quality dimensions in higher education in theirmeasurement instruments (Firdaus, 2006) Although the generic measures of servicequality have had strong impacts on service quality domain in theory and practice, itmay not be a subsequent instrument to assess the perceived quality in higher educationcontext (Senthilkumar & Arulraj, 2010) It leads to the requirement of a specific servicequality measurement instrument for higher education

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

-15- Factor1: non-academic aspects This factor consists of items related to

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

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

of academics

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

importance of tertiary institutions in developing a professional image

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

issues as approachability, ease of contact, availability and convenience

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

specific need regarding to counseling services as well as health services

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

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

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

in tertiary education industry

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

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

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

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

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

2.1.4 Perceived service price in higher education

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

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

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

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

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

-17-the price of products or services, for which -17-they have to pay, with -17-the o-17-ther offers toperceive that it is reasonable or not Hence, the customers will be more satisfactorywith a product or service as they perceive that price more reasonable or cheaper

It is difficult to use objective price to determine its role due to the complex pricingenvironment of services, perceived price was proposed to use in many researches(Chen et al, 1993) In the higher education context, this research approaches theprevious descriptions to define student perceived price as the student evaluation ofwhat is given or sacrificed to obtain the higher education services from universities Inregard to research scope, this study just employs perceived price in monetarydimension as the tuition – which is the amount of money students have to pay forhigher education services received from universities Thus, service perceived priceconcept used in this research as the student perceived tuition

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

(Nek et al, 2009, page 2)

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

for the customer‘s overall feeling toward the organization However, the single itemscale to measure customer satisfaction failed to do justice of the construct because ofthe multidimensional nature of customer satisfaction While other researchersapproached customer satisfaction measurement by multiple items scale(Sureshchandar, 2002) Zeithaml & Bitner (2000) developed a model of customersatisfaction which influenced by factors of service quality, product quality, price,situational factors and personal factors as the following figure.

Figure 2.1 – The model of customer satisfaction

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

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

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

-19-2.1.6 Customer satisfaction in higher education

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

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

2.1.7 Relationship between service quality and customer satisfaction in higher education

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

The higher education literature supports that student‗s perceived service quality is anantecedent to student customer satisfaction (Browne et al., 1988; Guolla, 1999; AI-alak,

2009, as cited in Basherr & Ahmad, 2012) This study follows the majority of recentresearches regarding to the service quality as an antecedent to satisfaction A number ofprevious researches have utilized the SERVQUAL framework to explore the

student perceptions of quality and satisfaction (John Davies et al., 2007) However, it isnot specific relevant to the context of student particularly It needs to identify andmeasure the link between performance of specific service quality dimensions andstudent satisfaction in higher education circumstance (Corneliu et al., 2010) For thereasons analyzed above, this research aims to employ the service quality dimensionsthrough HEDPERF paradigm – specific measurement scale of service quality in highereducation – to explain the relationship with student satisfaction Accordingly,

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

a higher education service.

2.1.8 Relationship between perceived price and customer satisfaction in higher education

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

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

-21-customer satisfaction in higher education, this study approaches the monetary price asthe actual cost of obtaining service to analyze To associate with the current situation ofhigher education in Vietnam, which is discussed above this study utilizes the perceived

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

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

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

higher education service.

2.1.9 Relationship between perceived price and service quality in higher education

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

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

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

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

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

perceived by student.

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

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

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

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

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

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

-23-differences between Public sector and Non-public sector to compare in various aspects(Noah, 2006) In a research of Ullah et al (2011) explored that students in public sectorand private sector perceived differently about the quality indicators of higher education

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

The aforementioned discussions give foundation to propose that university type playsconsiderable effect in many relations among aspects of higher education This researchalso puts university type into analyzing moderating effect in the impact of perceivedtuition on university service quality and student satisfaction as well as the impact ofuniversity service quality on student satisfaction toward higher education servicecomparing between public universities and non-public universities Accordingly,

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

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

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

University type (Public sector and Non-public sector)

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

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

2.2 Research model & hypotheses

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

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

Access

H3(+)

H2(+)

H4 Understanding

H5 H6

Figure 2.2 – Research model

Conclusion of Chapter 2

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

-26-Chapter 3 RESEARCH METHODS

Introduction

This chapter presents about the method and research design used in the current study toexplore the relationships among University service quality, Perceived price and Studentsatisfaction toward higher education service in Vietnam The research procedure isimplemented through a combination between qualitative research and quantitativeresearch

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

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

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

-28-3.2 Qualitative research design

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

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

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

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

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

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

3.3 Quantitative research design

3.3.1 Measurement scale

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

to 5 - strongly agree

-30-Table 3.1 – Measurement scales

University Service Quality scale

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

Non-academic aspects scale

Nacdm1 When I have a problem, administrative staff show a sincere interest in solving itNacdm2 Administrative staff provide caring and individual attention

Nacdm3 Inquiries/complaints are dealt with efficiently and promptly

Nacdm4 Administrative staff are never too busy to respond to a request for assistanceNacdm5 When the staff promise to do something by a certain time, they do so

Nacdm6 Administrative staff show positive work attitude towards students

Nacdm7 Administrative staff communicate well with students

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

Academic aspects scale

Acadm1 Academic staff have the knowledge to answer my questions relating to the courseAcadm2 Academic staff deal with me in a caring and courteous manner

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

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

Acadm5 Academic staff show positive attitude towards students

Acadm6 Academic staff communicate well in the classroom

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

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

Reputation scale

Reptt1 The institution has a professional appearance/image

Reptt2 The hostel facilities and equipment are adequate and necessary

Reptt3 Academic facilities are adequate and necessary

Reptt4 Class sizes are kept to minimum to allow personal attention

Reptt5 The institution‘s graduates are easily employable

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

Access scale

Acces1 Students are treated equally and with respect by the staff

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

Acces3 The staff ensure that they are easily contacted by telephone

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

Acces5 The institution values feedback from students to improve service performanceAcces6 The institution has a standardized and simple service delivery procedures

Understanding scale

Undst1 Health services are adequate and necessary

Undst2 The institution operates an excellent counseling services in specializations orientation

Undst3 The institution operates an excellent counseling services in career orientationUndst4 The institution supports you effectively in planning your studying progress

Program issues scale

Progr1 The institution offers a wide range of programs with various specializationsProgr2 The institution offers programs with flexible syllabus and structure

Progr3 The institution offers highly reputable programs

Progr4 The institution offers programs which satisfy job requirements in reality

Progr5 The programs consist of academic knowledge and applicable skills