Phuong
Viet Le-Hoang
Ho Chi Minh City Open University, Vietnam
E-mail: lehoangvietphuong@gmail.com
Submission: 7/19/2019
Revision: 9/18/2019
Accept: 10/2/2019
ABSTRACT
The research aims to explore and
measure the factors affecting customer satisfaction in cargo delivery services
in Vietnam. Notably, the researchers develop a new scale to examine the effect
the customer satisfaction, and it is the price factor. To conduct the research,
the authors do group discussions and expert discussion and then analyzed 1,729
valid respondents with five factors: resource, service capacity, management
capacity, brand reputation and price. The result from Exploratory Factor
Analysis (EFA) shows that all of the independent variables have a significant
effect on customer satisfaction. In which, brand reputation is the most
influential factor, and the management capacity is the least influential
factor. Besides, the research shows that the price also effects on customer
satisfaction on cargo delivery context. Based on that, the research recommends
the necessary management solutions to increase customer satisfaction, and it
also supports the new scale and ideas to research in the new field and new
country in further research.
Keywords:
resource; service capacity; management capacity; brand reputation
and price; customer
satisfaction.
1.
INTRODUCTION
According to the Logistics Business Association
(2018), Vietnam has over 1,300 active enterprises in the logistics industry,
including foreign enterprises. The enterprises providing logistics services in
Vietnam are mostly small and medium-sized. The total revenue from logistics
services in Vietnam, it is about 20-22 billion USD/year, accounting for 20.9%
of the country's GDP. According to the World Bank Report (2018) on the
Logistics Performance Index (LPI), Vietnam ranked 39/160 countries
participating in the study, and rose to the 3rd place in ASEAN countries.
Vietnam is also a top-ranking country in emerging markets. It is the best
result that Vietnam has achieved since the World Bank has been performing LPI
ratings since 2007 up to now.
In the context of global economic
integration, when Vietnam has opened the doors to the service sector,
Vietnamese delivery businesses have to compete with foreign enterprises. In
fact, among the world's top 30 delivery companies, 25 corporations are entering
the Vietnamese market, accounting for 75% of the market share, mainly in the
areas of the high added value. On the contrary, with about a quarter of the
market share being narrow and difficult, domestic enterprises must seize each
opportunity. Not only that, the capacity of Vietnamese delivery enterprises is
limited because the quality of services cannot compare to foreign enterprises.
In order to affirm its position as
well as to achieve outstanding development in the future, and in addition to
making efforts to provide delivery services with the lowest cost, measuring
customer satisfaction on quality of delivery of companies in Vietnam is really
necessary to assess the impact of service quality factors affecting customer
satisfaction and providing solutions to improve the quality of delivery services.
This study was conducted in Vietnam on a large sample size to analyze the
factors affecting cargo delivery services.
2.
LITERATURE REVIEW AND HYPOTHESES
DEVELOPMENT
2.1.
Concepts
From the unique characteristics of the service, it makes
a difference in determining the quality of service. For tangible products, its
quality is measured by specific criteria such as features, durability,
characteristics, and so on. However, for the service, it is invisible, so the
quality of service is also invisible. Therefore, the quality of service is
assessed in the process of using service, and the process of interaction
between companies and customers using service. Besides, Lehtinen
and Lehtinen (1982) argue that there are two respects
can assess the service quality; the first is service value, and the second is
service outcome.
According to Parasuraman et al. (1988), service quality
is the level of difference between consumer expectations of services and their
perceptions of service outcomes. The SERVQUAL model of Parasuraman et al.
(1988) has applied and tested in practice by many researchers in many service
sectors in different markets such as Bojanic (1991) with audit
services, Cronin and Taylor (1992) with dry cleaning services, Dabholkar
(1996) for retail services.
In short, the quality of service through each stage is
defined in a general way: service quality relates to customer expectations and
their perceptions of the service. Every customer with different perceptions and
needs will have a sense of different service quality.
2.1.2.
Customer satisfaction
Customer satisfaction is a crucial part affecting the
success of every business in any business field
(KOTLER, 2001).
In an increasingly fierce competitive environment, especially those that
provide services, to maintain the growth, the company needs to satisfy
customers' needs. Because customer satisfaction is essential in establishing
long-term relationships between customers and service providers, the reality of
business shows that, if an enterprise gains 5% of loyal customers, the profit
will increase by 25-85%, or on average an unhappy customer will tell the
discomfort to 9 listeners, and one satisfied customer will tell 5 others about
the good feelings about the products and services of the business. Therefore,
when a business does not satisfy customers, it is not only businesses that lose
customers but also lose many potential customers
(KOTLER; KELLER, 2016).
According to Oliver (1997), customer
satisfaction is an emotion of customers in response to their experience with
some products and services. Alternatively, satisfaction is the reaction of
consumers to estimating the difference between previous expectations (or
standards for performance) and the actual expression of the product when using
it (Tse and Wilton, 1988).
2.1.3.
The relationship between
service quality and customer satisfaction
According to Pitt et al. (1995), the
relationship between satisfaction and service quality is an essential key to
measuring the satisfaction of service of the customers. Also, Bhatnagar et al. (1999) also pointed out that that customer satisfaction is
a crucial benefit to the quality of logistics services.
Other researchers, such as Parasuraman et al. (1988), Zeithaml and
Bitner (2000), offer that customer satisfaction leads to service quality.
However, Cronin and Taylor (1992) argue that service quality is the cause of
satisfaction because the quality related to service and satisfaction only
assessed after the customer uses the service. If improving service quality is
not based on customer demand, it will not satisfy customer demand for that
service.
Overall, customer satisfaction has a causal relationship
with service quality. If the service quality is too high, the level of
satisfaction exceeds expectations. Quality of service is high, and the
satisfaction level reaches the expected level, customers feel happy and
satisfied. Conversely, if the service quality is low, the satisfaction level is
lower than the expected value, the customer will be disappointed. Customer
satisfaction is a general concept, expressing their satisfaction when consuming
a service. Meanwhile, service quality only focuses on specific components of
the service (ZEITHAML; BITNER, 2000).
2.2.
Research model and hypothesis
development
From
the theoretical concepts and analyses presented above, there are many research
models on the relationship between service quality and customer satisfaction.
So, the
question is that what is the most suitable model for research in the cargo
delivery context? There are some models of service quality such as SERVQUAL
(reliability, responsiveness, assurance, empathy and tangibles) of Parasuraman
et al. (1988), SERVPERT - the development model of SERVQUAL (CRONIN; TAYLOR,
1992), ROPMIS (resources, outcomes, process, management, image, social
responsibility) of Thai and Grewa (2007).
The
ROPMIS model is most appropriate because of three reasons. Firstly, the model
is derived from the theoretical synthesis of many different models. Secondly,
the construction of the original ROPMIS model is implemented in the specific
context of the Vietnamese transport industry. While other models are mostly
tested in other industries, it shows that the application of ROPMIS model is
appropriate because it is very close to the scope of the quality of freight
forwarding research. Finally, although the ROPMIS model is not yet widely
applied, research using this model has shown positive results. Some empirical
researches have applied ROPMIS model, specifically: Research of Tran (2010),
Nguyen and Do (2013) and most recently, Yuen and Thai
(2015) directly concerned with research.
However,
the factors affecting satisfaction changes depending on the context, type of
service, and specific type of business. Therefore, in order to determine the
determinants that affect the satisfaction of customers using delivery service
in cargo company, the study has shown that resource, service capacity,
management capacity, and brand prestige are four factors affect the
satisfaction.
Besides,
perceived value is the trade-off of what customers receive (quality, benefits,
usefulness) and what they spend (price, sacrifice, and time) to buy and consume
these products and services. According to Zeithaml and Bitner (2000), customer
satisfaction is affected by customer perceptions of quality. According to Fornell et al. (1996), customer satisfaction is the result
of a perception of their perceived value, while the value is measured by the
relationship between perceived service quality and service price.
Based
on these points of view, it can be said that the satisfaction of customers with
the perception of service prices is related to each other. Customers will be
satisfied with the service when they are more satisfied with the price.
Therefore, the author proposes the price factor in the research model. This
study defines and measures the concept of service pricing from the perspective
of customers' perception of prices.
Based
on the above arguments, the author proposes the research model for research as
follows:
Figure 1: Proposed research model of the authors
According
to Tran (2010), the resource factor, including infrastructure, information
technology applications, and software for delivery services, has an impact on
customer satisfaction. Thai
and Grewal (2007) conducted their research on services in the Vietnamese
context, and the study found that resources are available elements of
equipment, equipment conditions, and the ability to track goods and the
infrastructure.
In
the previous study of Yang et al. (2009), resources
are identified as having a significant positive impact on the ability to
provide logistics services leading to improve the business performance of the
company. It is also true in research in other areas such as railway transport (NGUYEN;
DO, 2013). Therefore, this hypothesis is as follows:
·
H1: Resources have a
positive effect on customer satisfaction
Service
capacity is expressed through ensuring the commitment in the contract, limiting
errors, ensuring goods safety, the accuracy of documents and meeting customers'
demands (BUTTLE, 1996;
DOAN, 2010; YUEN;
THAI, 2015; LY, 2016, TRAN, 2010; PHAM, 2008). Besides, service capacity includes
service reliability, speed of service, ensuring the safety of goods, the
accuracy of documents, diversity, and service availability is mentioned in the
study by Thai and Grewal (2007). According to Parasuraman et al. (1985) argued
that the service capacity shows the professional about a specific business to
perform services.
·
H2: Service capacity has
a positive effect on customer satisfaction
Tran
(2010) and Huynh (2013) point out that the management
capacity has the most potent effect on customer satisfaction with the quality
of delivery services at a shipping company. According to Thai and Grewal
(2007), management capacity factors affect customer satisfaction including the
application of information technology in management and operation, effective in
management and operation, knowledge and skills in solving troubles and
accidents, understand customers' needs and requirements; having relationships
with suppliers (ports, shipping lines). Therefore, the hypothesis of the
research is:
·
H3: Management capacity
has a positive effect on customer satisfaction
According
to Thai and Grewal (2007), the brand reputation is the prestige and trust of
enterprises in the market, and it confirms the brand of business on domestic
and world markets. Nguyen and Do (2013) pointed out that the brand prestige has
the most effect on customer satisfaction on service quality in a positive
direction. Brand reputation factor is created in the process of customer
interact with infrastructure, human resources, products, and services (NGUYEN,
2013).
Therefore, this study gives the following hypothesis:
·
H4: Brand reputation has
a positive effect on customer satisfaction
According
to Zeithaml and Bitner (2000), price is what
consumers can afford to get the desired products and services. Customers often
rely on their perception of the price and feel of what they receive to assess
the quality of service they are using. The price factor is expressed through
price competition compared to other companies in the same industry (YUEN; THAI,
2015), price is flexible with market updates (TRUONG, 2015), price is suitable
for current requirements as well as deferred payment (PHAM, 2016). Therefore,
the study proposes the following hypothesis:
·
H5: Price has a positive
effect on customer satisfaction
3.
METHODOLOGY
This
research uses the qualitative research method via group discussions and expert
discussions to build research models, scales, questionnaires, and preliminary
surveys to complete research models before issuing the questionnaire. The
authors surveyed the Vice president of the Vietnam Logistics Business
Association (VLA) and surveyed ten members of the Executive Committee of VLA to
complete the group discussion.
The
quantitative research method was conducted, and it based on information
collected from the customer who already uses the cargo delivery services of
many famous companies in Vietnam. Likert scale with five levels, namely
strongly disagree, disagree, neutral, agree, and strongly agree is used to
measure the impact of factors affecting employee satisfaction, and this
research uses the convenient sampling method.
Bollen (1989), and Hair et al.
(2014) pointed out that when the study uses
Likert scale five levels with the n variables, the study should ensure a
minimum sample size of 5*n=5n. In the study, the author uses 18 observed
scales; a minimum sample size should be 18*5=90.
However, Comrey and Lee (1992) argue that the sample
sizes will give the corresponding research results: 50 is very bad, 100 is bad,
200 is pretty good, 300 is good, 500 is very good, and 1,000 is excellent.
Because the author added some new scales of the price variable in the study; as
a result, to ensure the quality of the sample, the authors decided to
distribute a total of 1,800 questionnaires.
In
particular, from January to June 2019, this research surveyed 18 prestigious
and reputable companies which do cargo delivery service in Vietnam such as: Gemadept Joint Stock Company, DHL Vietnam Global Shipping
Company, Saigon New Port Corporation, Viettel Post Corporation, Saigon Port
Joint Stock Company, Southern Logistics Corporation, DKSH Vietnam Limited
Company, Vietnam Post Corporation, SCHENKER Vietnam Limited Company, Transimex Joint Stock Company, Delta International Limited
Company, Southern International Limited Company, LACCO Global delivery and
transportation Corporation, Hung Thinh Phat Logistics
Limited Company, On Time Worldwide Logistics Vietnam Limited Company, Colombus Vietnam Limited Company, PCS Cargo Corporation,
SAFWAY Logistics Corporation.
For
each company, the author research groups directly distributed the survey
questionnaires, and the number of questionnaires for each company was 100. So
after screening data, there were 1,729 valid respondents to be used in the
quantitative analysis (accounting for 96.06%). In quantitative research, the
authors use descriptive statistical methods, assessed for reliability through
Cronbach's Alpha coefficients, EFA method, and regression to determine factors
affecting customer satisfaction in cargo delivery service.
4.
DATA ANALYSIS AND RESULTS
4.1.
Reliability test: Cronbach’s Alpha
According
to Nunnally and Bernstein (1994), the condition to accepting variables is that
Corrected Item - Total Correlation is equal or greater than 0.3 and Cronbach’s
Alpha if item deleted is equal or greater than 0.7. According to Hair et
al. (2014), new studies can accept that Cronbach’s Alpha if item deleted is
equal or greater than 0.6. So,
all of the constructs can meet requirements to analyze Exploratory Factor
Analysis (EFA).
Table 1: Results of testing the reliability of the scale
Items |
Constructs |
Corrected Item – Total
Correlation |
Cronbach’s
Alpha if item deleted |
Resource -
Cronbach’s Alpha = 0.783 |
|||
RS1 |
The company always has many vehicles to serve
customers' needs |
0.629 |
0.708 |
RS2 |
The company's website has enough information to help
customers find it easily |
0.625 |
0.711 |
RS3 |
Infrastructure, warehouse
conditions of the company are good |
0.513 |
0.767 |
RS4 |
Good ability to track the
cargo |
0.592 |
0.730 |
Service
Capacity - Cronbach’s Alpha = 0.777 |
|||
SC1 |
The company provides
services as committed |
0.412 |
0.720 |
SC2 |
The company always ensures the safety for goods (No
loss, loss, damage) |
0.631 |
0.616 |
SC3 |
The company always meets
customer needs promptly |
0.590 |
0.669 |
Management
capacity - Cronbach’s Alpha = 0.782 |
|||
MC1 |
The company applies
information technology in managing information for customers |
0.617 |
0.714 |
MC2 |
The company always
satisfactorily resolves customer complaints |
0.560 |
0.734 |
MC3 |
Having a good
relationship with customs in handling port-related matters |
0.636 |
0.706 |
MC4 |
Customers feel safe when
making transactions with the company |
0.541 |
0.752 |
Brand
reputation - Cronbach’s Alpha = 0.749 |
|||
BR1 |
The
company is trusted in the market |
0.552 |
0.694 |
BR2 |
The
company has a famous brand in the market |
0.531 |
0.716 |
BR3 |
Company
employees have polite costumes |
0.652 |
0.673 |
Price - Cronbach’s
Alpha = 0.774 |
|||
PR1 |
The current price of the
company is more competitive than other companies in the same industry |
0.607 |
0.703 |
PR2 |
The delivery price of the
company is flexibly updated according to the market |
0.583 |
0.716 |
PR3 |
The current price of the
company is in line with customer needs |
0.546 |
0.735 |
PR4 |
The company has
attractive promotions |
0.572 |
0.722 |
Customer
Satisfaction - Cronbach’s Alpha = 0.680 |
|||
CS1 |
Feel satisfied when using the company's cargo delivery
service |
0.367 |
0.618 |
CS2 |
Continue to use the
company's cargo
delivery services in the future |
0.465 |
0.676 |
CS3 |
Introduce the company's
cargo services to everyone |
0.497 |
0.661 |
4.2.
Exploratory Factor Analysis (EFA)
Table 2: Result of exploratory factor analysis
Concepts |
Items |
Component |
||||
1 |
2 |
3 |
4 |
5 |
||
Resourcs |
RS1 |
0.750 |
|
|
|
|
RS2 |
0.781 |
|
|
|
|
|
RS3 |
0.711 |
|
|
|
|
|
RS4 |
0.755 |
|
|
|
|
|
Price |
PR1 |
|
0.705 |
|
|
|
PR2 |
|
0.767 |
|
|
|
|
PR3 |
|
0.721 |
|
|
|
|
PR4 |
|
0.737 |
|
|
|
|
Management capacity |
MC1 |
|
|
0.704 |
|
|
MC2 |
|
|
0.640 |
|
|
|
MC3 |
|
|
0.745 |
|
|
|
MC4 |
|
|
0.733 |
|
|
|
Brand reputation |
BR1 |
|
|
|
0.700 |
|
BR2 |
|
|
|
0.731 |
|
|
BR3 |
|
|
|
0.839 |
|
|
Service capacity |
SC1 |
|
|
|
|
0.832 |
SC2 |
|
|
|
|
0.679 |
|
SC3 |
|
|
|
|
0.562 |
|
Eigenvalues |
1.09 |
|||||
Total Variance Explained |
14.54 |
28.54 |
42.53 |
54.56 |
64.45 |
The EFA analysis results show that The Eigenvalues value
= 1.09> 1 represents the variation part explained by each factor, the factor
that draws the most meaningful information. The total variance extracted value:
64.45% indicates that five factors explain 64.45% variation of variables in the
data, the model is appropriate — factor loading of all variable is greater than
0.5, indicating a correlation between variables for representative factors.
4.3.
Regression analysis
Regression analysis finds out the
factors that affect customer satisfaction in cargo delivery service and measure
the affecting levels of these factors. Before doing the regression analysis,
the author does compute the mean value of these factors.
RS: Resource (RS1, RS2, RS3, RS4)
SC: Service capacity (SC1, SC2, SC3)
MC: Management capacity (MC1, MC2, MC3, MC4)
BR: Brand reputation (BR1, BR2, BR3)
PR: Price (PR1, PR2, PR3, PR4)
CS: Customer satisfaction (CS1, CS2, CS3)
The following formula can describe regression
analysis model in this research:
CS = β0
+ β1*RS + β2*SC + β3*MC + β4*BR + β5*PR
Whereas, CS is dependent variable
and it can measure the customer satisfaction in cargo delivery service in
Vietnam, and RS, SC, MC, BR, PR are independent variables which can measure the
resource, service capacity, management capacity, brand reputation, and price.
Table 3: Regression results
Model |
Unstandardized Coefficients |
Standardized Coefficients |
t |
Sig. |
Collinearity |
|||
Beta |
Sd. Error |
Beta |
Tolerance |
VIF |
||||
1 |
(Constant) |
1.322 |
0.108 |
|
12.27 |
0.000 |
|
|
RS |
0.108 |
0.021 |
0.120 |
5.19 |
0.000 |
0.770 |
1.30 |
|
SC |
0.173 |
0.022 |
0.194 |
7.83 |
0.004 |
0.666 |
1.52 |
|
MC |
0.074 |
0.026 |
0.076 |
2.86 |
0.000 |
0.589 |
1.70 |
|
BR |
0.193 |
0.023 |
0.212 |
8.50 |
0.000 |
0.658 |
1.52 |
|
PR |
0.147 |
0.025 |
0.141 |
5.96 |
0.000 |
0.730 |
1.37 |
|
F |
142.98 |
|||||||
Sig. |
0.000 |
The F value = 142.98 and the sig
value of F is 0.000, and it is less than 0.05, so the research model is fit,
and the variables which use in the model have a significant statistic. Besides,
variance inflation factors (VIF) are too small, and these point out that there
is no multicollinearity in this model, so all of the independent variables do
not correlate together. What is more, the five variables such as RS, SC, MC,
BR, and PR have a significant statistic because the sig of them is less than
0.05. As a result, these variables affect the satisfaction of land plot sales
staffs.
The multiple regression model by
standardized coefficients can be identified:
CS =
0.120*RS + 0.194*SC + 0.076*MC + 0.212*BR + 0.141*PR
The result from the standardized
coefficients and regression model show that the resource, service capacity,
management capacity, brand reputation, and price affect customer satisfaction
in the cargo delivery service. Besides, these factors positively influence
customer satisfaction because the beta of all variables is positive. The result
strongly confirms that the price is the new scales that affect customer
satisfaction.
4.4.
Hypothesis testing
Table 4: Hypothesis testing
Hypothesis |
Content |
Result |
H1 |
Resources have a positive effect
on customer satisfaction |
Accepted |
H2 |
Service capacity has a positive
effect on customer satisfaction |
Accepted |
H3 |
Management capacity has a
positive effect on customer satisfaction
|
Accepted |
H4 |
Brand reputation has a positive effect
on customer satisfaction |
Accepted |
H5 |
Price has a positive effect on
customer satisfaction |
Accepted |
Figure 2: Factors affecting to customer satisfaction
5.
CONCLUSION
5.1.
Conclusion
Through
analysis, the study offers some solutions to increase customer satisfaction
with the delivery service of the cargo company. Improving customer satisfaction
helps the company retain its current customers as well as attract new customers
in the future. Since then, sales for freight delivery in the company will
increase, and create sustainable development as well as contribute to
increasing competitiveness in the market. It is also the first research on the
factors affecting satisfaction for cargo delivery services in Vietnam.
The
author adjusted the scale of service quality - ROPMIS of Thai and Grewa (2007) and the theory of price perception to measure
the quality of cargo delivery services. The results show that in the logistics
field, all five hypotheses are accepted in this study, bringing a practical
meaning to companies that provide freight delivery services. The results of the
study help the company to use these measurement scales to determine the factors
affecting customer satisfaction, and bases on that the company can have better
control and adjustment of these factors. They are thereby increasing the
company's customer satisfaction further.
Besides,
the research results show that considering each factor, customers achieve the
highest satisfaction level for brand reputation when using freight delivery
service company. The order satisfaction, in turn, is the service capacity,
price, resources and the management capacity factor. Specifically, according to
the regression equation: CS = 0.120*RS + 0.194*SC + 0.076*MC + 0.212*BR + 0.141*PR, It is clear to see the
strongest influence on customer satisfaction is brand reputation (b =
0.212).
The next variables also have a positive effect on customer satisfaction are
service capacity (b = 0.194), price (b = 0.141), resource (b = 0.120) and the least
affect factor is management capacity (b = 0.076).
Service
quality is the core factor that creates a sustainable development for business
in general as well as the cargo delivery business in particular. Therefore, the
higher the brand reputation of the company, the better the service quality is
assessed by the customer. The brand reputation, which is the strongest
influence on customer satisfaction in cargo delivery company is very
reasonable. It can be seen that customers can know and use the service that the
company is providing is thanks to the brand in the market. The stronger the
brand, the higher the trust of customers for the company, thereby contributing
to increased satisfaction.
In
summary, the study has applied a model to find the factors affecting customer
satisfaction on the quality of cargo delivery services at reputation company.
The research used the new scale, which is the price to analyze the impact of
price on cargo delivery companies in Vietnam.
5.2.
Limitation and future research
Research
has brought merit contributions to the factors affecting the customer
satisfaction of the quality of the delivery service at cargo delivery company.
However, the research paper has no limitations.
The
research surveys the customer in the large sample size (1,800 and uses 1,729
for analysis) in
Vietnam. The sample size of the research is excellent, but the data collection
time is six months. Therefore, the data used for the analysis is still skewed
by time, so the results are not the best. Therefore, when surveying with a large
sample size, future research should try to be implemented in a short period of
one to two months. It is best for one to two weeks. However, this needs to
invest more in finance as well as resources.
Secondly,
this study has developed a price scale and confirmed the relationship between
price and customer satisfaction in cargo delivery service. However, research
has only been conducted in Vietnam. Other research papers may use the results
of this study to apply to other countries or other industries related to
service quality.
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LOGISTICS
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