SERVICE QUALITY, PERCEIVED PRICE AND CUSTOMER SATISFACTION IN HIGHER EDUCATION A comparison between Public Universities and Non-public Universities in Vietnam

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ABSTRACT

This study empirically examines the effects of Perceived Tuition on University Service Quality
and Student Satisfaction as well as the impact of University Service Quality on Student
Satisfaction toward higher education service. The research also explores the moderating role of
University Type variable on these relationships. Whereby, it provides a comparison of these
impacts extent between two types of universities, Public universities and Non-public universities.
Structural equation modeling was used to test these impacts, utilizing a sample of 612 students in
two Public universities and two Non-public universities.

The results indicate that both University Service Quality and Perceived Tuition play significant
role in predicting Student Satisfaction. In addition, Perceived Tuition not only has a direct impact
on Student Satisfaction, but also an indirect influence through University Service Quality. The
findings of this research also provide evidence of the differences between Public sector and Non-
public sector in the influence of Perceived Tuition on University Service Quality, Student
Satisfaction, and University Service Quality on Student Satisfaction. Particularly, the effect of
Perceived Tuition and University Service Quality on Student Satisfaction is much greater in
Non-public universities compared to that in Public universities. Indeed, the current context of
higher education in Vietnam reveals that Non-public universities setting a much higher tuition
fee compared to Public- universities, but not have an assurance in service quality. Hence, an
increase in University service quality or Perceived tuition leads to a higher increase in Student
satisfaction extent in Non-public universities compared to Public sector. It implies that university
managers have to pay attention to improve their service quality and consider the approach in
pricing the service in other to satisfy their students. The students are persuaded by the fitness
between service quality they receive and the tuition they have to pay for university compared to
other similar tertiary institutions.

The research findings also engage with some limitations in the strength of measurement scale,
the sampling method as well as the fitness between the research model and data. It results in the

valuable directions for further researches in future.

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Chapter 1
INTRODUCTION

1.1. Higher education in Vietnam
According to the Vietnamese Education Law in 2012, higher education covers undergraduate
and postgraduate studies. Undergraduate studies can lead to diploma or bachelor degrees while
postgraduate studies can lead to master degrees and doctorate degrees. In Vietnam higher
education system, higher education institutions are structured including: Colleges can offer
college programs and other lower level programs; Universities can offer college, undergraduate,
master and doctorate programs as assigned by the Prime Minister; Research institutes can offer
doctorate programs and in cooperating with universities can offer master programs subject to
permission from the Prime Minister.

In the tertiary education institutes system, Vietnam has two forms: public universities and
colleges which are funded by the Government and non-public institutes which including semi-
State, self-funded or private universities and colleges, regarding to Decision 9/2001/QD-
BGD&DT of the Ministry of Education and Training dated 28 August, year 2001. There is a
fundamental difference in managerial perspective of the Government between these two sectors.
The public sector has to follow strictly the regulations of the Government in tuition policies and
financial aspects, according to Decree 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 with diversified types and
improvement in quality (Kim D. Nguyen, Diane E. Oliver, Lynn E. Priddy, 2009). According to
the statistics of Ministry of Education and Training, Vietnam have 386 universities and colleges

in 2011 with 306 public institutes and 80 non-public universities and colleges. This number is
increasing to 409 institutes at the beginning period of the year 2012 (Vietnam education system,
2012). Nevertheless, the opportunities for higher education in Vietnam are limited and the
quality control is also an existing problem of the system (Nuffic Nesco Vietnam, 2009). The
continuous increase in the number of not only public but also non-public universities and
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colleges in Vietnam from 322 institutions in 2006 to 409 institutions in 2012, according to the
statistics of Ministry of Education and Training from 1999 to 2012, is facing with many
challenges in quality assurance. The reality shows that faculty qualifications are generally low
and vary significantly across forms of tertiary education institutions (Nuffic Nesco Vietnam,
2009). The report No.760 of Ministry of Education and Training (2009) conceded that it is too
difficult for the Ministry of Education and Training to control all the higher education
institutions in whole country. Especially, in non-public sector, the managerial role of Ministry of
Education and Training is very limited and not create effectiveness yet (Mai Lan, 2011).

Although non-public tertiary education is one of the most significantly developing sector of the
higher education system in 21
st
century (Philip G. Altbach, 2002), the non-public higher
education in Vietnam is in the crisis (Mai Lan, 2011). In an interview, the Vice Minister of
Ministry of Education and Training - Bui Van Ga stated that non-public tertiary educators need
to focus on improving the quality to create the prestige in society and attract more students
(Vietnamese education, 2011). Quality in higher education is one of the aspects attracting more
and more attentions of society and learners. 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 the Government 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 provide
explicitly about their tuition rate to help the learners have right decision in registration and avoid
later dissatisfaction. The students expect high service quality corresponding to tuition of the
universities (Do Hop, 2012). The relationship between service quality in higher education and
the price – tuition – which the students have to pay for service received needs to be considered
adequately.

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In the Fundamental and Comprehensive Renovation of Higher Education during 2006−2020
addressed in Resolution 14/2005/NQ-CP of the Government dated 2 November, year 2005, the
objective emphasized in building and developing quality assurance system for higher education.
However, Vietnamese educators and educational leaders are still confused about how to
implement quality assurance and accreditation in the Vietnamese context (Kim D. Nguyen,
Diane E. Oliver, Lynn E. Priddy, 2009).

Associate with the growth of higher education in quality and quantity, students have more
choices for their studying and using services. As the students pay for complete expenditure for
their learning at tertiary institutes, they deserve the best education services to satisfy their
requirements (N. Senthilkumar & A. Arulraj, 2010). Therefore, the education institutions are
striving to attract customers by offering their best services and reasonable tuition rate. Given this
situation, a study of relationships of service quality, price and customer satisfaction in higher
education in Vietnam, especially, in the specific context of public sector and non-public sector,
would be useful for practitioners and researchers.

1.2. Existing studies about Service quality, Perceived Price and Customer satisfaction in
higher education

The important role of service industries is increasing in line with the development of the
economy in many countries (Pham Ngoc Thuy & Le Nguyen Hau, 2010). Service sector attracts
more and more attentions of real business world and research fields. There is a variety of studies
conducted to explore different service issues in order to support the real business activities as
well as enrich the academic world. In which, the researches of service quality, and customer
satisfaction have dominated the service theories (Cronin, Brady & Hult, 2000). The major
attention is to identify the relationships among these concepts. Cronin and Taylor (1992)
identified that service quality is an antecedent of customer satisfaction. Furthermore, the
influence of service quality on customer satisfaction was 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 the other aspects consisting product quality, price,
situational factors, personal factors (Zeithaml et al., 2000, p. 107). Accordingly, price is a
multidimensional concept, including objective price, perceived price, monetary and nonmonetary
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service price (Zeithaml, 1988). A number of studies conducted popularly using perceived price,
which is the perception of customer about what is sacrificed to obtain the service, instead of
objective price due to the complex pricing environment of services (Chen et al, 1993). However,
the price component has not been thoroughly investigated in previous empirical study (Bei &
Chiao, 2001 as cited in David et al., 2007) especially in relationship with service quality and
customer satisfaction.

N. Senthilkumar and A. Arulraj (2010) stated that among the service sectors, higher education
system has direct bearing on society for society and economic development. The higher
education institutes paid more and more attention to service quality and customer satisfaction as
tertiary education service industry moves to the era of commercialization (Brown & Clignet,
2000, as cited in Kathleen & Julie, 2001). In comparison with commercial sector, the research of
service quality in higher education field is still new (Parves Sultan & Ho Yin Wong, 2010). Chua
(2004) explored that most of quality models studied in the business world have been adapted and
applied in the education sector. It may not have a single accurate definition of quality in higher

education because 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). The majority
of researches in last few decades concentrated on the dimensional approach of service quality
(Parves Sultan & Ho Yin Wong, 2010). Parasuraman et al (1985, 1988) developed the
measurement scale SERVQUAL based on the concept quality is the perception minus
expectation. Cronin and Taylor (1992, 1994) explored the other instrument to measure service
quality, namely, SERPERF – service performance – based on the perception component alone.
Among these scales, SERVQUAL is mostly criticized and widely applied in many industries.
(Ana Brochado & Rui Cunha Marques, 2009). However, SERVQUAL and SERPERF were
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 with some 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 in higher education, namely,
HEDPERF – Higher Education Performance, established by Firdaus in 2006. This instrument
specifically designed for higher education sector using context-specific items in this industry. In
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order to enhance the power of HEDPERF in measuring service quality in the context of tertiary
education, Firdaus (2006) conducted a research to compare HEDPERF and SERPERF and the
findings showed that HEDPERF was more reliable estimations, greater explanation, and
consequently better fit than SERPERF. Nevertheless, existing studies about HEDPERF have just
only conducted in several countries and just in one university scope, such as Malaysia (Firdaus,
2005, 2006) and Portugal (Ana Brochado & Rui Cunha Marques, 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 in higher 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, the majority of recent studies consider service

quality as an antecedent to customer satisfaction (Garcia, 2009). In Vietnam higher education
context, despite service quality and customer satisfaction are the concepts attracting many
researchers to investigate the relationships among them, very few studies pay attention to adapt
the new instrument HEDPERF to identify and measure the dimensions of service quality
affecting to customer satisfaction, almost resent findings focus on SERVQUAL or SERPERF as
well as emphasize on particularly one tertiary institution, so that the generalization is limited.

Base on aforementioned analysis about the current situation of higher education in Vietnam and
existing findings about service quality, price and customer satisfaction in tertiary education area,
in an attempt to explore the relationships among service quality, service price and customer
satisfaction toward higher education services, this study employs the dimensions of service
quality in higher education context through HEDPERF 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
customer satisfaction into the research model to test these relationships. All concepts will be
explained and analyzed more detailed in the literature review section.


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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 of
university (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 the context of
Ho Chi Minh City, Vietnam. Particularly, data collected from two public universities as well as
two non-public universities in Ho Chi Minh City and put into analysis and comparison. The
study employs the determinants of higher education service quality through the instrument scale
HEDPERF and perceived price dimension – perceived tuition - to explain the impacts on
customer satisfaction toward the tertiary education 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 students only, not includes other customers or stakeholders of university.

1.5. Significance of the research
According to the theoretical perspective, this study contributes to the application of the new
measurement instrument HEDPERF into the context of higher education in Vietnam. It is a
meaningful outcome for the researchers in this specific service industry as existing studies have
focused on SERVQUAL and SERVPERF approaches repeatedly.

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

1.6. Organization of the thesis
This research is constructed in five parts. The first is the introduction of the study. The second is

the literatures review and hypotheses. Following is the research method. The next part is the
results and limitations of the findings. The conclusion comprises the final section of this
research.
 Chapter 1 – Introduction
This chapter reflects the current situation of higher education in Vietnam, as well as discusses
about the existing researches in relationships of service quality, perceived price and customer
satisfaction in tertiary education. It leads to propose the research problem, research objectives
and significance of this study also presented in this section.
 Chapter 2 - Literatures review and hypotheses
Chapter 2 presents the theoretical foundation of the research, including the definition of each
concept, namely, service quality, perceived price, customer satisfaction in higher education
context and their relationship in literature. From that, the hypotheses are derived and proposed
for this research.
 Chapter 3 - Research method
Research method describes the way of establishment of the measures and conducting the survey.
This part includes two steps, qualitative research to modify draft measurement 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 exhibited
corresponding to each step of the data analysis. Accordingly, the research hypotheses are tested.
 Chapter 5 – Discussions, Implications and Limitations
The last chapter of this study discusses the research results by affirming the exploratory values as
well as connecting to the realistic conditions to suggest the practical application. Lastly, the
limitations are recognized to direct for further research in the future.
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Chapter 2
LITERATURES REVIEW AND HYPOTHESES

Abstract

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 service quality perceived by customer. Among them, SERVQUAL and SERPERF are
the popular instruments applied in many service fields. However, the higher education service
industry experienced the development of new measurement scale for service quality –
HEDPERF (Firdaus, 2006), which is specifically designed for this particular environment but has
not tested in many countries yet. Hence, this research approaches six components of HEDPERF,
namely, Non-academic aspects, Academic aspects, Reputation, Access, Understanding and
Program issues to measure the construct university service quality. In regard to service price, this
chapter also argues to take perceived monetary price interpreted in higher education is perceived
tuition into the research model. Besides, customer satisfaction concept is approached by the
standpoint of primary customer of higher education service that is student satisfaction.

In addition, this chapter presents positive impact of perceived tuition on university service
quality and student satisfaction as well as the positive effect of university service quality on
student satisfaction based on present theoretical foundations. It also points out the moderating
effect of university types on these above relationships between public universities and non-public
universities. Following these arguments, a research model is set up with five hypotheses:
H1: University Service Quality has a positive impact on Student Satisfaction
H2: There is a positive impact of Perceived Tuition on Student Satisfaction
H3: There is a positive impact of Perceived Tuition on University Service Quality
perceived by student.
H4: The impact of Perceived Tuition on Student Satisfaction and University Service
Quality will be affected by University type (Public sector and Non-public sector)
H5: The impact of University Service Quality on Student Satisfaction toward a higher
education service will be affected by University type (Public and Non-public sector)
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2.1. Literatures review

2.1.1. Customers of higher education
In higher education field, the definition of customer is identified by various groups of
stakeholders. Weaver (1976) (as cited in Firdaus, 2006) indicated four parties of potential
customers, including: the government, the administrators of Government, the teachers
/academics and actual customers (learners, their families, employers, society as a whole). Among
these groups of customer, students are generally assumed to be the principal customers because
they are product of learning process and the internal customer (Sirvanci, 1996). Similarly,
Galloway (1998) confirmed that the primary customer in education service is the student. Hence,
it becomes important to identify determinants 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 through HEDPERF
instrument to predict the customer satisfaction based on the standpoint of students as primary
customer. Therefore, the concept of service quality and price are perceived 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 a function of the differences between
expectation and performance along the quality dimensions. Base on gap analysis between
expected service and perceived service, they developed a service quality model, including:


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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: Difference between 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 measure customers‘
perceptions of service quality. SERVQUAL approaches five dimensions of service 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 most practical
model for measuring service quality (Cuthbert, 1996b). Cronin and Taylor (1992) suggested that
measuring service quality through the gap model was not adequate in conceptual and operational
levels so they approached service quality as derived from perception of performance only and
developed the performance-based instrument to measure service quality called SERPERF. In
essence, SERPERF was a variant of SERVQUAL but SERPERF explained more of the variance
in service quality measurement than SERVQUAL (Cronin & Taylor, 1994). Nevertheless, in the
context of higher education, SERVQUAL measurement scale is more popular and applied
extensively than SERPERF instrument (Ana Brochado & Rui Cunha Marques, 2009).

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2.1.3. Service quality in higher education
In higher education circumstance, the best approach to define service quality is still a
considerable debate (Becket & Brookes, 2006). The studies of service quality in tertiary
education develop relevant measurement instrument conceptualizing SERVQUAL or SERPERF
(Parves Sultan & Ho Yin Wong, 2010). Many researchers have been undertaking customization
of established service quality dimensions in higher education in their measurement instruments
(Firdaus, 2006). Although the generic measures of service quality have had strong impacts on
service quality domain in theory and practice, it may not be a subsequent instrument to assess the
perceived quality in higher education context (N. Senthilkumar & A. Arulraj, 2010). It leads to
the requirement of a specific service quality measurement instrument for higher education.

Firdaus (2006) developed a new measuring instrument of service quality for higher education
sector specifically, namely, HEdPERF – Higher Education Performance – a new and more
comprehensive approach based on performance, which consists of six factors:
 Factor1: non-academic aspects. This factor consists of items related to duties
undertook by non-academic staff which are necessary for students to implement
their study 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 with
flexibility in structure and syllabus. (Firdaus, 2006)

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This instrument scale measures service quality in higher education through 41 items of six
factors: non-academic aspects; academic aspects; reputation; access; programs issues;
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 in Portugal, Ana
Brochado and Rui Cunha Marques (2009) concluded that SERPERF and HEDPERF present the
best measurement capabilities. In similar study, Firdaus (2005) demonstrated the HEDPERF was
generally superior measurement scale in the context of higher education. Nevertheless,
HEDPERF still has some of limitations. One of them is the scope 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 (N. Senthilkumar & A. Arulraj, 2010).

Founded on conceptualizing service quality in higher education, this research aims to employ the
determinants of service quality in higher education through HEDPERF instrument 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 education institutions, 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 that must be
sacrificed to obtain certain types of products or services from customers perception. Indeed,
price is a component of products or services and has links to other factors 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: objective price, perceived non-monetary price and sacrifice. Among these
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categories, objective monetary 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 a
service (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 the price of products or
services, for which they have to pay, with the other offers to perceive that it is reasonable or not.
Hence, the customers will be more satisfactory with 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 pricing environment
of services, perceived price was proposed to use in many researches (Chen et al, 1993). In the
higher education context, this research approaches the previous descriptions to define student
perceived price as the student evaluation of what is given or sacrificed to obtain the higher
education services from universities. In regard to research scope, this study just employs
perceived price in monetary dimension as the tuition – which is the amount of money students
have to pay for higher education services received from universities. Thus, service perceived
price concept used in this research as the student perceived tuition.

2.1.5. Customer satisfaction
In research and practice field, customer satisfaction is still an abstract and rather ambiguous
concept (Corneliu et al., 2010). Customer satisfaction towards a service is an emotional feeling
after using the service which is transaction-specific evaluation (Cheng et al.; Spreng and Singh;
Oliver, as cited in Pham Ngoc Thuy and Le Nguyen Hau, 2010). Cronin & Taylor (1992)

indicated that customer satisfaction is conceptualized on the customer‘s experience on a
particular service encounter.

―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 Kamal Yeop Yunus et al, 2009, page 2).

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Service quality
Product quality
Price
Customer satisfaction
Situational factors
Personal factors
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 item scale to measure customer
satisfaction failed to do justice of the construct because of the multidimensional nature of
customer satisfaction. While other researchers approached customer satisfaction measurement by
multiple items scale (G.S. Sureshchandar, 2002).

Zeithaml & Bitner (2000) developed a model of customer satisfaction 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 researchers and practitioners
attention into the exploration of their interrelations (Eshghi et al., 2008 as cited in Chingang and
Lukong, 2010), price has not been thoroughly investigated in previous 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 both service
quality and price dimension in higher education context.

2.1.6. Customer satisfaction in higher education
Customer satisfaction translated into the higher education context is that satisfaction of the
student – as the principal customer of university services (Sirvanci, 1996). In a research of
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Corneliu et al. (2010), student satisfaction was defined as evaluative summary of direct
educational experience, based on the prior expectation and the perceived performance.
Measuring student satisfaction is not an easy task because of the 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 in higher education (Garcia, 2009 as cited in
Basherr & Ahmad, 2012).

In this applied research, the measurement scale for student satisfaction adapted from the 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 great deal of
attention from scholars and practitioners (Eshghi et al., 2008 as cited in Chingang & Lukong,
2010). Many scholars investigated that service quality has a significant impact on customer
satisfaction (Gronroos, 1984; Parasuraman et al 1988). However, the others argued that customer
satisfaction is as an antecedent to service quality (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 an antecedent
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 recent researches regarding to the
service quality as an antecedent to satisfaction. A number of previous researches have utilized
the SERVQUAL framework to explore the student perceptions of quality and satisfaction (John
Davies et al., 2007). However, it is not specific relevant to the context of student particularly. It
needs to identify and measure the link between performance of specific service quality
dimensions and student satisfaction in higher education circumstance (Corneliu et al., 2010). For
the reasons analyzed above, this research aims to employ the service quality dimensions through
HEDPERF paradigm – specific measurement scale of service quality in higher education – to
explain the relationship with student satisfaction. Accordingly,
H1: University Service Quality has a positive impact on Student Satisfaction toward a higher
education service.
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2.1.8. Relationship between perceived price and customer satisfaction in higher education
The marketing theories emphasized price as an important factor of customer satisfaction (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, product quality, price, situational factors
and personal factors. However, the fact is that price has received little attention when analyzing
customer satisfaction (David et al., 2007). In research of the relationship between price and
customer satisfaction, the impact of price 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 service quality and perceived price are two factors that have been proven empirically
as customer satisfaction determinants. Regard to the context of higher education, this relationship
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 with university services.
Furthermore, in which, the price of obtaining service is the component that causes the greatest
impact on customer satisfaction toward university services. In one of attempts to test the
relationship between perceived price and customer satisfaction in higher education, this study
approaches the monetary price as the actual cost of obtaining service to analyze. To associate
with the current situation of higher 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 customer satisfaction
beside the service quality. However, the relationships among service quality, price, and customer
satisfaction not only emphasize on the impacts of service quality and price on customer
satisfaction, but also consider the link between price and service 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 higher education service sector particularly, Carmen et al. (2006) also found that the price of a
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service is normally thought to be an indicator of service quality, the higher the perceived price,
the better the service is believed to be. Supporting to this influence, many researchers confirms
the existence of positive relationship between the perceived price of a service and its quality
(Carmen et al., 2006). Chen et al (1993) also found that the perceived price and service quality
relationship is service specific.

In context of higher education, the students have to pay all expenditures for universities services,
so they expect the best service received to satisfy their requirements. As previous 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 perceived tuition on service quality in higher
education service. Base on aforementioned literature 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 of the research
objectives. It is implemented by exploring the moderating effect of University type, which
consists of two types, Public sector and Non-public sector, on the impact of perceived tuition on
university service quality, student satisfaction and the influence of university service quality on
student satisfaction.

In Vietnamese context, the establishment of Non-public universities has brought more
opportunities for students to learn in higher education level as well as satisfied partly for society
requirements of high educated human resources. Nevertheless, the training quality 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 of enrolment exams compared to Public
university students. Moreover, the current education system in Public sector is better than that in
Non-public sector regarding to the academic staff, training program, qualification of certificates.
In term of the tuition fees, it can be obviously seen that Public universities are sponsored by

government for operation costs so that their tuition fees are much lower than the amount students
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have to incur in Non-public universities. Given differences leading to the effects on students
learning at each type of university are inevitable. Thus, many researches exploited the
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 sector and private
sector perceived differently about the quality indicators of higher education in Pakistan. Nguyen
and Nguyen (2009) also employed the difference between these university types to determine the
controlling effects of learning motivation on student quality of college life in Vietnam. Other
evidence can be mentioned is the study of Romero and Rey (2004) to analyze the competition
between public and private universities according to service quality, service price and exams.
The findings of this research 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 plays
considerable effect in many relations among aspects of higher education. This research also puts
university type into analyzing moderating effect in the impact of perceived tuition on university
service quality and student satisfaction as well as the impact of university service quality on
student satisfaction toward higher education service comparing between public universities and
non-public universities. Accordingly,
H4: The impact of Perceived Tuition on Student Satisfaction and University Service Quality
will be affected by University type (Public sector and Non-public sector)
H5: The impact of University Service Quality on Student Satisfaction toward a higher
education service will be affected by University type (Public and Non-public sector)

2.2. Research model & hypotheses
With the existing circumstance of higher education in Vietnam and literature review about the
service quality, price and customer satisfaction analyzed up to now, this study aims to employ
the dimensions of service quality in higher education context through HEDPERF scale

(including six aspects: non-academic aspects, academic aspects, reputation factor, assess factor,
program issues, understanding factors) and puts perceived tuition as an independent variable
about price dimension affecting to customer satisfaction into the research model to predict the
student satisfaction in higher education. Besides, the study also tests the influence of perceived
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tuition to perceived service quality in the higher education circumstance. Furthermore, this
research 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.

Research model

















Figure 2.2 – Research model

Hypotheses

H1: University Service Quality has a positive impact on Student Satisfaction toward a higher
education service.
H2: There is a positive impact of Perceived Tuition on Student Satisfaction toward a higher
education service.
H3: There is a positive impact of Perceived Tuition on University Service Quality perceived
by student.
H4: The impact of Perceived Tuition on Student Satisfaction and University Service Quality
will be affected by University type (Public sector and Non-public sector)
H5: The impact of University Service Quality on Student Satisfaction toward a higher
education service will be affected by University type (Public and Non-public sector)
H4
H2(+)
H5
H3 (+)
H1 (+)
Perceived Tuition
University type
Student Satisfaction
Non-academic aspects
Academic aspects
Reputation
Access
Understanding
Program issues
University Service
Quality
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Chapter 3
RESEARCH METHOD

Abstract
This chapter presents about the method and research design used in the current study to explore
the relationships among University service quality, Perceived price and Student satisfaction
toward higher education service in Vietnam. The research procedure is implemented through a
combination between qualitative research and quantitative research.

In qualitative research, the purpose is to clarify the concepts and interpret the items in
measurement scales into the higher education context based on the standpoint of student.
Furthermore, the necessary adjustments are conducted to enhance the power of the 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 the interview script prepared in
advance.

Based on the qualitative research findings, measurement scales are modified before being
employed for main survey in quantitative research. The scale for University service quality
consists of 6 components with 37 items. The Perceived tuition and Student satisfaction are
measured by 5 items in each scale. These scales are five-point Likert from 1 - strongly disagree
to 5 - strongly agree. In regard to survey sampling, the data is collected by convenience sampling
method from the under-graduate students in two public universities and two non-public
universities. The sample size is approximate 500 respondents.

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.

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3.1. Research procedure
This study will be implemented through the combination of qualitative research and quantitative
research, which procedure is presented in Figure 3.1.


Figure 3.1 – Research procedure




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3.2. Qualitative research design
The purpose of qualitative research step is to make clear the concepts and interpret the items
from measurement scale based on the standpoint of customer. Hence, the necessary modification
can be carried out in order to increase the power of scale. In addition, this step also provides the
opportunities to gain new idea, new items to enhance the research model and measurement scale.

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

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

The focus group was designed by 6 participants join a group, they were chosen from both public
and non-public sector to ensure the generalization of the opinions. In addition, the participants
had not joined any interview about higher education service within nearest 6 months. The
general rule is keep conducting focus group interviews until no new insights are gained (Donald
& Pamela, 2006). The script for interview was prepared in advance and the extracted in the
appendix 3.1. The researcher led the discussion in focus group interview. The interviewees
presented their private opinions according to the questions in script prepared by researcher
before and criticized the previous ideas until no insights were gained. The researcher
recapitulated the opinions and kept the contents achieved more than or equal 2/3 agreement
among interviewees.



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The findings of focus group interview got agreements of interviewers on some contents,
indicated that they confirmed that the factors of service quality in higher education, perceived
tuition suggested in measurement scale of this research are meaningful and necessary for
resulting in student satisfaction. However, the measurement scale has some items which are not
suitable for the Vietnamese conditions, especially the current higher education environment of
Vietnam. They need modified, complemented to be more appropriate. Detail qualitative research
result is in appendix 3.2

3.3. Quantitative research design
3.3.1. Measurement scale
Measurement scale for service quality in higher education industry was adapted from Firdaus
(2006) and modified through qualitative research with 37 items. Perceived price scale was
adapted from Carmen et al. (2006) and Chen et al. (1994) with 5 items and interpreted into
higher education context. The customer satisfaction scale was adapted from Taylor and Baker
(1994) with 5 items and interpreted into higher education context. These scales were five-point

Likert type from 1 - strongly disagree to 5 - strongly agree.

Table 3.1 – Measurement scales
University Service Quality scale
This scale is measured through the student pleasure of non-academic aspects (relates to the duties
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 counseling and health
services), program issues (associates with the variety, flexibility of the programs and
specializations).
Non-academic aspects scale
Nacdm1
When I have a problem, administrative staff show a sincere interest in solving it
Nacdm2
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 assistance
Nacdm5
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
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Academic aspects scale

Acadm1
Academic staff have the knowledge to answer my questions relating to the course
Acadm2
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 performance
Acces6
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 orientation
Undst4
The institution supports you effectively in planning your studying progress
Program issues scale
Progr1
The institution offers a wide range of programs with various specializations
Progr2
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
Perceived Tuition scale
This scale is measured by the student perception of the reasonability between the tuition paid and
service received from the university compared to other similar offers.
Tuiti1
The tuition fees set for the university service are adequate for the work performed
Tuiti2
The tuition fees are more reasonable than other similar offers
Tuiti3
This university service is more economical than other similar offers
Tuiti4
This university service offers good products and low tuition than others
Tuiti5
I do not care about the tuition. The only thing I am interested in is the quality of the
service received