RESEARCH PROJECT (BMBR5103) EVALUATING THE RETAIL SERVICE QUALITY OF CELL PHONE SUPERMARKETS IN HO CHI MINH CITY STUDENT’S FULL NAME STUDENT ID INTAKE ADVISOR’S NAME & TITLE : LE KHAC THINH : CGS00018493 : SEP-2014 : Dr PHAN DINH NGUYEN Dec 2015 Advisor’s assessment Advisor’s signature LE KHAC THINH – K15A Page ABSTRACT Retail service quality plays an important role in enhancing customer satisfaction and customer loyalty, which significantly contributes to success of cell phone supermarkets Therefore, a research into factors affecting the retail service quality of cell phone supermarkets is necessary because the research finds solutions to enhance the level of retail service quality of cell phone supermarkets This research uses the Retail Service Quality Scale (RSQS) model to examine the relationship between the retail service quality and its antecedents, including physical aspects, reliability, personal interaction, problem solving and policy in cell phone supermarkets in Ho Chi Minh City (HCMC), and evaluate the level of retail service quality of cell phone supermarkets in HCMC With respect to research methodology, the research pursues positivism philosophy to have an objective view on researched subjects and uses deductive approach, survey strategy and quantitative method to achieve research objectives A technique of data collection is self-administered questionnaires which are delivered directly by hand to 150 customers of select cell phone supermarkets in HCMC and collected later The research uses a technique of data analysis which is software of SPSS 11.5 After conducting reliability test, factor analysis and multiple regression analysis, the research findings show that five factors, namely physical aspects, reliability, personal interaction, problem solving and policy have positive influences on the retail service quality of cell phone supermarkets in HCMC Among the five factors, reliability has the strongest influence on the retail service quality of cell phone supermarkets in HCMC and physical aspects have the weakest one The research findings also reveal that the current level of retail service quality of cell phone supermarkets in HCMC is low The author proposes some recommendations based on the research findings to managers of cell phone supermarkets in HCMC to improve the factors influencing on the retail service quality and enhance the level of the retail service quality of cell phone supermarkets in HCMC LE KHAC THINH – K15A Page TABLE OF CONTENTS ABSTRACT TABLE OF CONTENTS LIST OF TABLES ABBREVIATION Chapter 1: Introduction 1.1 Background of the study 1.2 Significance of the study 12 1.3 Overall research aim and individual objectives 12 1.4 Boundary of the study 13 1.5 Structure of the study 13 Chapter 2: Literature Review 15 Chapter introduction 15 2.1 Understanding of service quality 15 2.2 Dimensions of service quality 17 2.3 Factors influencing on retail service quality 18 2.3.1Understanding of retail service quality 18 2.3.2 The relationship between retail service quality and its antecedents 20 2.3.2.1 The relationship between physical aspects and retail service quality 20 2.3.2.2 The relationship between reliability and retail service quality 21 2.3.2.3 The relationship between personal interaction and retail service quality .22 2.3.2.4 The relationship between problem solving and retail service quality 22 2.3.2.5 The relationship between policy and retail service quality 23 2.4 Measurement of the level of retail service quality 24 Chapter summary 25 Chapter 3: Methodology 27 Chapter introduction 27 3.1 Research philosophy 27 3.2 Research approach 29 3.3 Research strategy 29 3.4 Research method 31 3.5 Methods of collecting data 31 3.5.1 Sources of data 31 3.5.2 Questionnaire 32 3.6 Sampling techniques 34 3.7 Technique of data analysis 35 3.8 Ethical Issues 36 3.9 Validity and reliability consideration of the research methodology 36 3.10 Limitations of the research methodology 36 Chapter summary 37 LE KHAC THINH – K15A Page Chapter 4: Finding, Discussion and analysis 38 Chapter introduction 38 4.1 Overview of cell phone supermarkets industry in HCMC 38 4.2 Demographic information 38 4.3 Reliability test 40 4.3.1 Standards of reliability test 40 4.3.2 Reliability test of retail service quality dimensions 41 4.4 Factor analysis 47 4.4.1 Standards of factor analysis 47 4.4.2 Factor analysis of retail service quality dimensions 49 4.5 Research results based on multiple regression analysis 55 4.5.1 Understanding of multiple regression analysis 55 4.5.2 The relationship between retail service quality and its antecedents in cell phone supermarkets in HCMC 55 4.5.3 The most important factor affecting retail service quality in supermarket in HCMC 58 4.6 Research results based on descriptive analysis 60 Chapter summary 69 Chapter 5: Conclusion and Recommendation 70 Chapter introduction 70 5.1 A summary of the research process 70 5.2 Conclusions 70 5.3 Contributions of the study 73 5.4 Limitations and suggestions for further research 74 5.2 Recommendations 75 Chapter summary 76 LE KHAC THINH – K15A Page LIST OF TABLES Table 1.1 – Key data of HCMC Table 2.1 – Definitions of service quality Table 4.1 – Demographic information of customers Table 4.2 – Reliability test results of dimensions of physical aspects Table 4.3 – Reliability test results of reliability dimension Table 4.4 – Reliability test results of personal interaction dimension Table 4.5 – Reliability test results of problem solving dimension Table 4.6 – Reliability test results of policy dimension Table 4.7 – Structures of the retail service quality dimensions after implementing the reliability test Table 4.8 – Results of factor analysis of physical aspects Table 4.9 – Results of factor analysis of reliability Table 4.10 – Results of factor analysis of personal interaction Table 4.11 – Results of factor analysis of problem solving Table 4.12 – Results of factor analysis of policy Table 4.13 – List of variables after factor analysis Table 4.14 – Model summary of retail service quality Table 4.15 – Coefficients of retail service quality Table 4.16 – Model summary of physical aspects Table 4.17 – Coefficients of physical aspects Table 4.18 – Model summary of reliability Table 4.19 – Coefficients of reliability Table 4.20 – Model summary of personal interaction Table 4.21 – Coefficients of personal interaction Table 4.22 – Model summary of problem solving Table 4.23 – Coefficients of problem solving Table 4.24 – Model summary of policy Table 4.25 – Coefficients of policy Table 4.26 – Descriptive results of the evaluation level of physical aspects Table 4.27 – Descriptive results of the evaluation level of reliability Table 4.28 – Descriptive results of the evaluation level of personal interaction Table 4.29 – Descriptive results of the evaluation level of problem solving Table 4.30 – Descriptive results of the evaluation level of policy Table 4.31 – Descriptive results of the level of retail service quality Table 4.32 – Results of the retail service quality level by gender Table 4.32 – Results of the retail service quality level by age Table 4.34 – Results of the retail service quality level by marital status Table 4.35 – Results of the retail service quality level by education level Table 4.36 – Results of the retail service quality level by monthly salary LE KHAC THINH – K15A Page ABBREVIATION AMMCC: Acceptance of most major credit cards CACPA: Clean, attractive and convenient public areas CFSTT: Customers feel safe in their transactions COH: Convenient operating hours EACDI: Employees’ ability of handing customer complaints directly and immediately EBICC: Employees’ behavior instills confidence in customers ECCC: Employees are consistently courteous with customers EFSTR: Error-free sales transactions and records EHKAQ: Employees have the knowledge to answer customer’s questions EGPSC: Employees give prompt service to customers ENBRR: Employees are never too busy to respond to customers’ requests ETCCT: Employees treat customers courteously on the telephone ETESP: Employees tell customers exactly when services will be performed GCIA: Giving customers individual attention GDP: Gross Domestic Product GRDI: Global Retail Development Index TM H: Hypothesis HCMC: Ho Chi Minh City HQM: High quality merchandise IAPST: Implementation ability of promises of doing something by a certain time KMO: Kaiser-Meyer-Olkin Measure of Sampling Adequate MBA: Master of Business Administration MEA: Merchandise availability MLEF: Modern-looking equipment and fixtures PCP: Plenty of convenient parking PIMS: Profit Impact of Marketing Strategies PSRFT: Performance of the service right the first time RSQS: Retail Service Quality Scale SISPC: Sincere interest in solving problems of customers SLECF: Supermarkets layout is easy for customers to find what they need SLECM: Supermarkets layout is easy for customer to move around SOTCC: Supermarkets offer their own credit cards SPSS: Statistical Package for the Social Sciences VAPF: Visually appealing physical facilities VAMSS: Visually appealing materials associated with cell phone supermarkets services LE KHAC THINH – K15A Page CHAPTER INTRODUCTION 1.1 Background of the study  Context of the study After Vietnam became an official member of World Trade Organization (WTO) in 2007, it has opened its retail market and has removed trade barriers to welcome foreign investors Fast pace growth in the Vietnamese retail market has made Vietnam become one of the world’s most attractive retail markets for multinational retailers Vietnam was the world’s fourth most attractive retail market in 2007 (A.T Kearney, 2007) and quickly became the world’s most attractive retail market in 2008 with the highest Global Retail Development Index TM (GRDI) that was highly drawing interest from large foreign retailers around the world (see figure 1.1) The opening of the Vietnamese economy has encouraged global large retailers to invest their capital in the Vietnamese retail market With a recently deregulated retail market, a robust economy and a stable political base, Vietnam is attempting to replicate China’s economic success and is stealing the spotlight from the leaders in Asian retail markets, India and China (A.T Kearney, 2008) Nowadays, there is a significant quantity of retail outlets in the Vietnamese retail markets, including over 50 cell phone supermarkets, lot of shopping centers However, the retail outlets still not meet demand in a market of nearly 90 million people The retail market in Vietnam increased by nearly 10 percent annually in Q1, 2015 (Vietnamplus, 2015) LE KHAC THINH – K15A Page Table 1.1 – Key data of Ho Chi Minh City Data of Ho Chi Minh City 2014 Core urban population, millions 7.1 Core urban area, km2 518 Core urban inhabitants/km2 13,707 9.0 Metropolitan population, millions Metropolitan area, km2 2,095 Metropolitan inhabitants/km2 4,296 Metropolitan retail sales (USD millions) 18,684 Share of national retail sales (%) 29.9 Vietnamese retail sales/capita (USD) 692 Ho Chi Minh City retail sales/capita (USD) 2,076 Source: Deloitte (2014)  Reasons for selecting the research topic Firstly, service quality plays an important role in business success of companies The link between service quality and profits is neither easily understandable nor simple (Greising, 1994) Phillips, Chang and Buzzell (1983), and Buzzell and Gale (1987) who use the Profit Impact of Marketing Strategies (PIMS) database, find that superior service quality enhances business performance via market position Terblanche (1998) recognizes that companies offering reliable and high quality services will have higher sales, lower cost and higher productivity and thus lead to higher profits than companies having low quality services This has been illustrated in figure 1.2 LE KHAC THINH – K15A Page Figure 1.2 – Roles of service quality Source: Terblanche (1998) Service quality leads to increase retention and business from existing customers Parasuraman, Zeithaml and Berry (1988), Fornell and Wernerfelt (1988), and Anderson and Sullivan (1993) recognize that there is a positive and significant relationship between customer perceptions of service quality and their purchase intention Rust, Zahorik and Keiningham (1995) indicate that service quality improvement leads to higher customer satisfaction and retention rate, greater revenue and market share, and yields greater profitability Reichheld and Sasser (1990) identify that an increase of percent in customer retention increases profits from 25 to 85 percent Customer retentions positively affects profits through cost reductions, repurchase increases, willingness to pay from medium to high prices and positive word of mouth (Zeithaml, 2000) LE KHAC THINH – K15A Page APPENDIX 11 DESCRIPTIVE STATISTICS – Physical aspect Statistics N Valid Missing 147 2.33 2.00 1.200 1.00 2.00 3.00 Mean Median Std Deviation Minimum Maximum Percentiles 25 50 75 Physical aspect Frequenc y Valid strongly disagree Disagree Neutral Agree strongly agree Total Percent Valid Percent Cumulative Percent 37 25.2 25.2 25.2 67 11 22 45.5 7.5 15.0 45.5 7.5 15.0 70.7 78.2 93.2 10 6.8 6.8 100.0 147 100.0 100.0 – Reliability Statistics N Valid Missing Mean Median Std Deviation Minimum Maximum Percentiles 25 50 75 LE KHAC THINH – K15A 147 2.63 2.00 1.350 1.00 2.00 4.00 Page 113 Reliability Frequenc y Valid strongly disagree Disagree Neutral Agree strongly agree Total Percent Valid Percent Cumulative Percent 37 25.2 25.2 25.2 47 43 31.9 5.4 29.3 31.9 5.4 29.3 57.1 62.5 91.8 12 8.2 8.2 100.0 147 100.0 100.0 – Personal interaction Statistics N Valid Missing Mean Std Deviation Minimum Maximum Percentiles 25 50 75 147 2.50 1.207 2.00 2.00 3.00 Personal interaction Frequenc y Valid strongly disagree Disagree Neutral Agree strongly agree Total Percent Valid Percent Cumulative Percent 33 22.4 22.4 22.4 52 27 25 35.4 18.4 17.0 35.4 18.4 17.0 57.8 76.2 93.2 10 6.8 6.8 100.0 147 100.0 100.0 – Problem solving Statistics N Valid Missing LE KHAC THINH – K15A 147 Page 114 Mean Std Deviation Minimum Maximum Percentiles 25 50 75 2.46 1.386 1.00 2.00 4.00 Problem solving Frequen cy Percent Valid strongly disagree Disagree Neutral Agree strongly agree Total Valid Percent Cumulativ e Percent 43 29.3 29.3 29.3 53 10 22 36.0 6.8 15.0 36.0 6.8 15.0 65.3 72.1 87.1 19 12.9 12.9 100.0 147 100.0 100.0 – Policy Statistics N Valid Missing Mean Std Deviation Minimum Maximum Percentiles 25 50 75 147 2.27 1.172 1.00 2.00 3.00 Policy Frequen cy Percent Valid strongly disagree Disagree Neutral Agree strongly agree Total LE KHAC THINH – K15A Valid Percent Cumulativ e Percent 41 27.9 27.9 27.9 62 17 18 42.2 11.6 12.2 42.2 11.6 12.2 70.1 81.7 93.9 6.1 6.1 100.0 147 100.0 100.0 Page 115 – Retail service quality Statistics N Valid Missing Mean Std Deviation Minimum Maximum Percentiles 25 50 75 147 2.43 1.255 1.00 2.00 4.00 Retail Service quality Frequen cy Percent Valid strongly disagree Disagree Neutral Agree strongly agree Total Valid Percent Cumulativ e Percent 40 27.2 27.2 27.2 51 19 27 34.7 12.9 18.4 34.7 12.9 18.4 61.9 74.8 93.2 10 6.8 6.8 100.0 147 100.0 100.0 – Overall evaluation of service quality level based on demographic informations of customers  Gender GEND ER Total female male overall evaluation of service quality level strongly disagre disagre strongly e e neutral agree agree Total 27.4% 34.2% 12.8% 18.8% 6.8% 100.0% 26.7% 36.7% 13.3% 16.7% 6.7% 100.0% 27.2% 34.7% 12.9% 18.4% 6.8% 100.0%  Age LE KHAC THINH – K15A Page 116 overall evalutation of service quality level strongly disagre disagre strongly e e neutral agree agree AG E under 21 From 21 to 30 From 31 to 40 Over 40 Total Total 15.0% 30.0% 15.0% 25.0% 15.0% 100.0% 22.9% 33.3% 14.6% 22.9% 6.3% 100.0% 29.6% 35.2% 13.0% 16.7% 5.6% 100.0% 40.0% 27.2% 40.0% 34.7% 8.0% 12.9% 8.0% 18.4% 4.0% 100.0% 6.8% 100.0%  Marital status Marita Single l Marrie status d Other Total Overall evaluation of service quality level strongly disagre disagre strongly e e neutral agree agree 26.7% 36.7% 13.3% 16.7% 6.7% Total 100.0% 27.8% 34.4% 12.2% 18.9% 6.7% 100.0% 25.9% 27.2% 33.3% 34.7% 14.8% 12.9% 18.5% 18.4% 7.4% 6.8% 100.0% 100.0%  Education level Overall evaluation of service quality level strong ly disagr disagre neutra strongly ee e l agree agree Educati Under college on level College University education Postgraduate Total LE KHAC THINH – K15A 20.0% 30.0% 15.0% 25.0% 10.0% 25.9% 33.3% 14.8% 18.5% 7.4% 28.8% 35.6% 11.9% 16.9% 6.8% 35.7% 42.9% 27.2% 34.7% 12.9% 18.4% 7.1% 14.3% 6.8% Total 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % Page 117  Monthly salary Overall evaluation of service quallity level strongl y disagre disagr neutra strongl e ee l agree y agree Month Under VND ly million salary From VND million to VND 15 million Over VND 15 million Total LE KHAC THINH – K15A Total 22.5% 32.5% 17.5% 20.0% 7.5% 100.0 % 27.3% 33.8% 13.0% 19.5% 6.5% 100.0 % 33.3% 40.0% 6.7% 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Lastly, cell phone supermarkets in HCMC with poor retail service quality have received many complaints of customers, such as inconvenience of parking, quality of the products and poor product knowledge of employees The cell phone supermarkets will retain their positions in the retail market by improving their retail service quality The level of the retail service quality of cell phone supermarkets in HCMC... between the retail service quality and its antecedents in cell phone supermarkets in HCMC - To explore the most important factor affecting the retail service quality of cell phone supermarkets in HCMC - To evaluate the level of retail service quality of cell phone supermarkets in HCMC LE KHAC THINH – K15A Page 12 1.4 Boundary of the study The research only evaluates the retail service quality of cell phone... existing cell phone supermarkets in HCMC identify factors affecting their retail service quality to enhance their retail service quality and improve their competition positions The research can help domestic and foreign investors who have intention of opening cell phone supermarkets in HCMC grasp factors affecting the retail service quality of a supermarket firmly to build the high level of the retail service. .. factor affecting the retail service quality in cell phone supermarkets and evaluate the level of retail service quality in cell phone supermarkets Figure 2.8 includes the following seven hypotheses: H1: Physical aspects have a positive relationship with the retail service quality in cell phone supermarkets H2: Reliability has a positive relationship with the retail service quality in cell phone supermarkets. .. Personal interaction has a positive relationship with the retail service quality in cell phone supermarkets H4: Problem solving has a positive relationship with the retail service quality in cell phone supermarkets H5: Policy has a positive relationship with the retail service quality in cell phone supermarkets H6: There is the level of retail service quality in cell phone supermarkets LE KHAC THINH –... with the retail service quality in cell phone supermarkets 2.4 Measurement of the level of retail service quality The RSQS model has been reliable and valid for measuring the retail service quality in many countries Mehta et al (2000) claims that the RSQS model is more applicable than other models to measure the retail service quality in hypermarkets or cell phone supermarkets In the research, the RSQS... (Dabholkar et al., 1996) To measure the level of retail service quality in cell phone supermarkets, the seventh hypothesis (H6) is considered H6: There is the level of retail service quality in cell phone supermarkets Chapter summary The theory framework is built as figure 2.8 to examine the relationship between the retail service quality and its antecedents in cell phone supermarkets, identify the. .. phone supermarkets in HCMC because of limitations of research time Among the cell phone supermarkets in HCMC, the research only focuses on domestic cell phone supermarkets chains Among the domestic cell phone supermarkets, the author only chooses the three domestic cell phone supermarkets to evaluate the overall retail service quality of cell phone supermarkets in HCMC because almost customers in HCMC often... mentions a theoretical basic of service quality that the researcher must take into consideration including the concept of service quality and the service quality dimensions In this chapter, hypotheses of the relationship retail service quality and its antecedents including physical aspects, reliability, personal interaction, problem solving and policy in cell phone supermarkets in HCMC are given and then ... employees The cell phone supermarkets will retain their positions in the retail market by improving their retail service quality The level of the retail service quality of cell phone supermarkets in. .. author decides to choose the topic of the study as follows: Evaluating retail service quality of cell phone supermarkets in Ho Chi Minh City LE KHAC THINH – K15A Page 11 1.2 Significance of the. .. reliability, personal interaction, problem solving and policy in cell phone supermarkets in Ho Chi Minh City (HCMC), and evaluate the level of retail service quality of cell phone supermarkets in HCMC With