Service quaility, perceived price and customer satisfaction in higher education

UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------

Diep Quoc Bao

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

MASTER OF BUSINESS (Honours)

Ho Chi Minh City – Year 2012


UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------

Diep Quoc Bao

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

ID: 60340102

MASTER OF BUSINESS (Honours)
SUPERVISOR: PROF. NGUYEN DONG PHONG

Ho Chi Minh City – Year 2012


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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. 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. 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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ACKNOWLEDGEMENTS

I would like to express my sincere appreciation of the advice, guidance and support that I
have received from my academic supervisors, my colleagues, and staff at ISB.

In particular, I wish to extend special thank you for the support and guidance from
Professor Nguyen Dong Phong and Assoc. Prof. Nguyen Dinh Tho. They have patiently
instructed and shared with me their experiences to help me forward on right decisions.

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

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


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STATEMENT OF AUTHENTICATION
(Candidate Certificate)

I certify that the work in the thesis entitled “Service quality, Perceived price and Customer

satisfaction in higher education – A comparison between Public universities and Nonpublic universities in Vietnam” is the result of my own research and has not been
submitted for a higher degree to any university or institution other than International
School of Business (ISB).

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

Signed

Date: December, 2012


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TABLE OF CONTENTS

Title ..................................................................................................................................... i
Acknowledgement .............................................................................................................. iii
Statement of authentication .............................................................................................. iv
Table of contents ................................................................................................................ v
Appendix........................................................................................................................... vii
List of Tables .................................................................................................................... viii
List of Figures .................................................................................................................. viii

ABSTRACT ....................................................................................................................... 1
Chapter 1 – INTRODUCTION ........................................................................................ 2
1.1. Higher education in Vietnam........................................................................................ 2
1.2. Research problem statement ......................................................................................... 5
1.3. Research objectives ...................................................................................................... 8
1.4. Scope of the research .................................................................................................... 8

1.5. Significance of the research .......................................................................................... 9
1.6. Organization of the thesis ............................................................................................. 9
Chapter 2 – LITERATURE REVIEW AND HYPOTHESES ...................................... 11
2.1. Literatures review ........................................................................................................ 12
2.1.1. Customer satisfaction .......................................................................................... 12
2.1.2. Service quality concept and measurement .......................................................... 12
2.1.3. Service quality in higher education .................................................................... 14
2.1.4. Perceived service price in higher education ....................................................... 16
2.1.5. Customer satisfaction .......................................................................................... 17
2.1.6. Customer satisfaction in higher education .......................................................... 19
2.1.7. Service quality and customer satisfaction in higher education ........................... 19
2.1.8. Perceived price and customer satisfaction in higher education .......................... 20
2.1.9. Perceived price and service quality in higher education..................................... 21
2.1.10. Moderating effect of University type (Public and Non-public universities) .... 22
2.2. Research model & hypotheses ...................................................................................... 24


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Chapter 3 – RESEARCH METHODS ............................................................................ 26
3.1. Research procedure....................................................................................................... 27
3.2. Qualitative research design ........................................................................................... 28
3.3. Quantitative research design ......................................................................................... 29
3.3.1. Measurement scale .............................................................................................. 29
3.3.2. Sampling ............................................................................................................. 32
3.3.3. Sample size ......................................................................................................... 33
3.3.4. Data analysis ....................................................................................................... 34
Chapter 4 – DATA ANALYSIS AND REASEARCH RESULTS ................................ 35
4.1. Data statistical analysis ................................................................................................. 36
4.2. Cronbach’s Alpha coefficient of reliability test ........................................................... 36

4.3. Exploratory Factor Analysis (EFA) result .................................................................... 39
4.4. Confirmatory Factor Analysis (CFA) result ................................................................. 42
4.4.1. CFA for University Service Quality scale .......................................................... 42
4.4.2. CFA for Perceived Tuition scale and Student Satisfaction scale ....................... 43
4.4.3. Saturated Model .................................................................................................. 44
4.4.3.1. Discriminant validity test .......................................................................... 45
4.4.3.2. Composite reliability and variance extracted ........................................... 45
4.5. Research model test ...................................................................................................... 46
4.5.1. Theoretical model test by using SEM approach ................................................. 46
4.5.2. Theoretical model estimation by BOOTSTRAP ................................................ 49
4.5.3. Results of Multi-group analysis .......................................................................... 49
Chapter 5 - DISCUSSION, IMPLICATIONS AND LIMITATIONS.......................... 55
5.1. Discussion and implications of the research ................................................................ 56
5.2. Limitations and directions for further research ............................................................ 58

CONCLUSION .................................................................................................................. 61
REFERENCES .................................................................................................................. 62


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APPENDIX....................................................................................................................... 68
Appendix 3.1 - Script for focus group interview ............................................................... 68
Appendix 3.2 - The qualitative research findings ............................................................. 70
Appendix 3.3 – Questionnaire ........................................................................................... 73
Appendix 4.1 - The result of EFA analysis ....................................................................... 79
Appendix 4.2 - The result of CFA for University service quality (Sequa) scale .............. 83
Appendix 4.3 - The result of CFA for Sequa scale (Nacadm5 excluded) ......................... 84
Appendix 4.4 - Correlations (CFA result for Sequa scale) ............................................... 85
Appendix 4.5 - Saturated model ....................................................................................... 85

Appendix 4.6 - Saturated model (Tuiti5, Undst1, Undst2 excluded) ................................ 86
Appendix 4.7 - Correlations (SEM result for Saturated model)........................................ 86
Appendix 4.8 - The result for multi-group analysis of variance model and partial
invariance model (University type variable) ..................................................................... 87


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LIST OF TABLES
Table 3.1

:

Measurement scales

Table 4.1

:

Descriptive statistics of the data

Table 4.2

:

Cronbach’s Alpha coefficients for each measurement scale

Table 4.3

:

EFA analysis result

Table 4.4

:

Cronbach’ Alpha results after excluding unsatisfactory items

Table 4.5

:

The results for reliability and variance extracted test

Table 4.6

:

The relations among concepts in research model (standardized)

Table 4.7

:

The results for Bootstrap estimation

Table 4.10

:

The difference between fitness indices of variance model and partial
Invariance model in term of university type (unstandardized)

Table 4.11

:

Relations among concepts in variant model in term of university type
(unstandardized estimates)

Table 4.12

:

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

LIST OF FIGURES
Figure 2.1

:

The model of customer satisfaction

Figure 2.2

:

Research model

Figure 3.1

:

Research procedure

Figure 4.1

:

CFA result for University Service Quality scale (Standardized)

Figure 4.2

:

SEM analysis result for saturated model (Standardized estimates)

Figure 4.3

:

The result for theoretical model test (standardized)

Figure 4.4

:

The SEM results of variance and partial invariance model

(According to University type)


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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 nonpublic 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 (Nguyen, Oliver, Priddy, 2009).


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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 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 21st century (Philip, 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 nonpublic sectors in Vietnamese higher education system.

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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 selfright 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.

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 (Nguyen, Oliver, 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 (Senthilkumar & 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

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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. Research problem statement
The important role of service industries is increasing in line with the development of
the economy in many countries (Pham & Le, 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 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.

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Senthilkumar and 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 & Ho, 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 & Ho, 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 & Rui, 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 order to enhance the power of
HEDPERF in measuring service quality in the context of tertiary education, Firdaus

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(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 & Rui, 2009). This instrument needs
to be applied in other countries and other tertiary institution (Firdaus, 2006).

Measuring service quality and customer satisfaction in higher education context is one
of the most considerations of tertiary educators. Although customer satisfaction 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


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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.

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.


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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 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.


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 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 methods
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 – Discussion, 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

Introduction

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

Accordingly, the existing researches employed various approaches to measure 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. Following these arguments, a
research model is set up with the hypotheses.


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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


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dimensions. Base on gap analysis between expected service and perceived service, they
developed a service quality model, including:
Gap 1: Difference between expectation of consumers and perceptions of service
managers about those expectations;
Gap 2: Difference between perceptions of service managers about consumer‘s
expectations and service quality specifications;
Gap 3: Difference between service quality specifications and actual service
delivered to consumers
Gap 4: 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).


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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 & Rui, 2009).

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 & Ho, 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 (Senthilkumar & 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:


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 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)

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 and Rui (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


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

Founded on conceptualizing service quality in higher education, this research aims 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 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


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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 and Le, 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 et al, 2009, page 2).
In the regard of measuring customer satisfaction, there are many different approaches.
Cronin & Taylor (1992) measured customer satisfaction as a one-item scale that asks