The impact of service quality on cuctomer satisfaction in the hopitality industry luận văn thạc sĩ

MINISTRY OF EDUCATION AND TRAINNING
UNIVERSITY OF ECONOMICS HO CHI MINH CITY
-------------------

Nguyen Nguyen Xuan Thao

THE IMPACT OF SERVICE QUALITY
ON CUSTOMER SATISFACTION
IN THE HOSPITALITY INDUSTRY
Differences between the viewpoint of foreign and
Vietnamese customers

THESIS OF MASTER OF BUSINESS ADMINISTRATION

Ho Chi Minh City – 2012


MINISTRY OF EDUCATION AND TRAINNING
UNIVERSITY OF ECONOMICS HO CHI MINH CITY
-------------------

Nguyen Nguyen Xuan Thao

THE IMPACT OF SERVICE QUALITY
ON CUSTOMER SATISFACTION
IN THE HOSPITALITY INDUSTRY
Differences between the viewpoint of foreign and
Vietnamese customers
Subject: Master of Business Administration
Code

: 60340102

THESIS OF MASTER OF BUSINESS ADMINISTRATION

SUPERVISOR:

Assoc. Prof. Dr. NGUYEN DINH THO

Ho Chi Minh City – 2012


I

ACKNOWLEDGEMENTS
This thesis was made during 06 months from March, 2012. It becomes a
memory time in my life when having a lot of stress, difficulty and struggle between
deadlines of job and study. However, it has opened a vision for me about wildknowledge which comes from many authors who stay around in the world, having
different languages and cultures but bring me an amazing experience which I am
grateful for.
Knowledge should be accumulated gradually during the school. I would like
to say thank you to all professors in the University of Economics Ho Chi Minh City,
who already taught and trained me in MBA course.
Knowledge also comes from the sharing of friends who were sitting the same
class or incidentally appointed the same group with me. I thank you for their
sharing.
Especially, a great thank and special gratitude is addressed to Assoc. Prof.
Dr. Nguyen Dinh Tho, who directly instructs me throughout my thesis with his
conscientiousness, patience and knowledge.
Finally, I wish to thank my boss of EFS Company Ltd., and my family
members for all supporting me during my studying in University.

Nguyen Nguyen Xuan Thao
Ho Chi Minh City, October 31st 2012

Ho


II

COMMITMENT
I would like to commit that this thesis, “The impact of service quality on
customer satisfaction in the hospitality industry: Differences between the
viewpoint of foreign and Vietnamese customers”, was accomplished based on my
research seriously and independently.
The data was collected from hotels and restaurants industry in Vietnam by
the author in reality. It has clear source. Thus, the data was trustful handled and
conducted by the author.
Nguyen Nguyen Xuan Thao
Ho Chi Minh City, October 31st 2012


III

TABLE OF CONTENTS

ACKNOWLEDGEMENT .................................................................................... I
COMMITMENT ................................................................................................... II
TABLE OF CONTENTS ..................................................................................... III
LIST OF TABLES ................................................................................................ V
LIST OF FIGURES............................................................................................... V

ABSTRACT ........................................................................................................... 1
Chapter 1 INTRODUCTION.............................................................................. 2
1.1 Research Background .................................................................................... 2
1.2 Research Motivation ...................................................................................... 4
1.3 Research Objectives ....................................................................................... 5
1.4 Research Scopes ............................................................................................ 5
1.5 Structure of Research ..................................................................................... 5
Chapter 2 LITERATURE REVIEW, THEORETICAL FRAMEWORK
AND HYPOTHESES ........................................................................................... 7
2.1 Service Quality .............................................................................................. 7
2.1.1 The SERVQUAL Instrument .................................................................. 9
2.1.2 Applying SERVQUAL in the Hospitality Industry............................... 10
2.1.3 Perceived Service Quality ..................................................................... 11
2.2 Customer Satisfaction.................................................................................. 14
2.3 Theoretical Framework and Hypotheses ..................................................... 16
2.3.1 Theoretical Framework.......................................................................... 16
2.3.2 Research Hypotheses ............................................................................. 16
Chapter 3 RESEARCH METHODOLOGY ................................................... 18
3.1 Research Methodology ................................................................................ 18
3.2 Sampling Design ......................................................................................... 19
3.3 Data Collection Procedures ......................................................................... 19
3.4 Data Analyze Procedure .............................................................................. 22


IV

3.4.1 Reliability Analysis ............................................................................... 22
3.4.2 Descriptive Statistics ............................................................................. 23
3.4.3 Factor Analysis (FA) ............................................................................. 23
3.4.4 Multiple Linear Regression Analysis .................................................... 24

Chapter 4 ANALYSIS RESULT ...................................................................... 25
4.1 Respondents Demographics ........................................................................ 25
4.2 Reliability and Validity of SERQUAL Scales ............................................ 26
4.3 Dimensions of Service Quality in Hospitality Industry .............................. 28
4.4 Overall Perceived Service Quality .............................................................. 31
4.4.1 Correlation Testing ................................................................................ 31
4.4.2 Multi-Linear Regression Analysis ......................................................... 32
4.5 Hypothesis Testing and Discussions ........................................................... 35
4.6 Summary ..................................................................................................... 45
Chapter 5 CONCLUSIONS AND RECOMMENDATIONS ........................ 47
5.1. Summary of Findings ................................................................................. 47
5.2. Practical Implications ................................................................................. 48
5.3. Contributions of the Study ......................................................................... 49
5.4. Limitations and Future Research ................................................................ 50
REFERENCES ..................................................................................................... 51
APPENDIX 1 ....................................................................................................... 55
APPENDIX 2 ....................................................................................................... 61
APPENDIX 3 ....................................................................................................... 64
APPENDIX 4 ....................................................................................................... 67


V

LIST OF TABLES
Table 2.1 Five Dimensions of Service Quality .................................................. 10
Table 2.2: The Summary of Research Hypotheses .............................................. 17
Table 3.1: The Sources of Measurement Scale .................................................... 20
Table 3.2: Rules of Thumb about Cronbach‟s Alpha Coefficient Size ............... 23
Table 4.1: Demographic Characteristics of the Study ......................................... 26
Table 4.2: Cronbach‟s Alpha Measures of Variables in the Study ...................... 27

Table 4.3 KMO and Bartlett's Test of Five Independent Variables .................... 28
Table 4.4: Rotated Component Matrixa of Independent Variables ...................... 29
Table 4.5 KMO and Bartlett's Test and Component Matrix ................................ 30
Table 4.6 Correlation of Variables ....................................................................... 31
Table 4.7 ANOVAb for Construct ........................................................................ 32
Table 4.8 Model Summaryb of the Construct ...................................................... 33
Table 4.9 Coefficientsa of the Construct .............................................................. 34
Table 4.10 Overall Perceived Service Quality ..................................................... 34
Table 4.11 ANOVAb for Satisfaction .................................................................. 38
Table 4.12 Model Summaryb of Satisfaction ....................................................... 38
Table 4.13 Coefficientsa of Satisfaction............................................................... 39
Table 4.14 Coefficientsa of the Construct for Vietnamese Customers‟ Group .... 41
Table 4.15 Coefficientsa of Satisfaction for Vietnamese Customers‟ Group ...... 41
Table 4.16 Coefficientsa of the Construct for Foreign Customers‟ Group .......... 43
Table 4.17 Coefficientsa of the Satisfaction for Foreign Customers‟ Group ....... 43
Table 4.18 Comparison Customers‟ Viewpoints ................................................. 45

LIST OF FIGURES
Figure 2.1 Theoretical Framework ...................................................................... 16
Figure 4.1 Research Framework for Vietnamese Customers Group ................... 40
Figure 4.2 Research Framework for Foreign Customers Group .......................... 42


1

ABSTRACT
Vietnam is more and more attractive a lot of tourists from other countries in
the world. Since the life-style is developed rapidly, the customers have more
demands on the services, especially in their enjoyable and leisure time. The
importance of service quality for business performance has been recognized not

only in the literature but also in reality because it effects directly on customer
satisfaction which leads to the profitability for an organization.
This study examined the relationship between the components of service
quality, overall perceived service quality and customer satisfaction. The
respondents were Vietnamese and foreign customers who stayed in hotels or spent
their dining in restaurants in Ho Chi Minh City, Vietnam. The study used Statistic
Package for Social Science (SPSS) to analyze data through Exploratory Factor
Analysis (EFA) and regression analysis tools. Firstly, the research proposed a
model to analyze the effect of service quality factors in the hospitality industry on
overall perceived service quality. The five service quality variables identified in this
study were named as “tangibles”, “reliability”, “responsiveness”, “assurance” and
“empathy”. The results indicated that “reliability” and “empathy” have strong
positive effect on overall perceived service quality. Secondly, the research
investigated the impact of overall perceived service quality on customer
satisfaction. Results showed that overall perceived service quality has a
significantly effect on customer satisfaction. Finally, the research finding confirmed
that there are differences between the viewpoints of Vietnamese and foreign
customers on service quality and its impact on their satisfaction differently.
Keywords: SERQUAL, Perceived Service Quality, Customer Satisfaction,
Hospitality Industry, Vietnam.


2

CHAPTER 1
INTRODUCTION
1.1 Research Background:
The trend of world markets has changed significantly from agricultural to
service markets. In Vietnam, the service markets, especially the hospitality industry
is more and more increasing the market share caused by the growth of tourism

industry. According to the report of Vietnam National Administration of Tourism
(www.vietnamtourism.com, accessed on 20/05/2012) the revenue of tourism 2011
gains 130 trillion VND, increasing 30% over the previous year. Vietnam tourism
market has been received over 6 million oversea tourists and served for 30 million
domestic customers in 2011. Till April 2012, the number of foreign tourists has
already reached 2.5 million, increasing 22.9% over the same period last year.
Vietnam government also proposes a planning of tourism in 2012 is that receiving
6.5 million of foreign tourists (increasing 8.3% over 2011) and serving for 32
million of domestic customers (increasing 6.67% over 2011). In order to gain this
target, many strategies for developing tourism industry have been given out such as
to appeal the investment on infrastructure; to open more the tourism trading
promotion representative offices in China, Japan, Korea, Thailand, Australia,
Malaysia, France and Russia; especially Ha Long Bay just becomes the New
World‟s Natural Wonders; last but not least all other industries, e.g. hospitality
industry related to tourism should be reinforced and enhanced so that to bring the
most satisfaction to the tourists.
As all above factors, there are a lot of restaurants and hotels to be opened to
serve for this demand. Besides the services of accommodation and food are
provided by local suppliers, there are many famous international hotel and
restaurant groups to join this market in Vietnam such as Starwood, Park Hyatt,
Hilton Worldwide, Movenpick and so on. The customers have more choices about
the services and all the service businesses are trying their best to improve their


3

service quality in order to make customers more satisfied, and that can improve
profitable to the firms. Therefore, the viewpoint of customers (local and foreign
ones) about service quality should be considered and defined how to match with the
different levels of customer satisfaction.

To help the companies get more success and survival in today‟s competitive
environment, there are many researches to define about “quality”, “service quality”
“customer satisfaction”. Research shows that quality is defined as “fitness for use”
and “those product features which meet customer needs and thereby provide
customer satisfaction” (Juran and Godfrey, 1999). Service quality leads to customer
loyalty and attraction of new customers, positive word-of-mouth, employee‟s
satisfaction and commitment, enhanced corporate image, reduced cost and
increased business performance (Berry et al., 1989). Higher levels of service quality
produce higher levels of customer satisfaction, which in turn lead to higher levels of
customer patronage. Customer service quality is a crucial source of distinctive
competence and often considered a key success factor in sustaining competitive
advantage in service industries (Palmer, 2001). In the hospitality industry, to exist
in the intense competition, hospitality organizations look for ways that they can
profitably differentiate themselves. One of strategy is the delivery of high service
quality (Stevens, Knutson & Patton, 1995). Research has supported that the basic
principle that high quality goods and services are favored in the marketplace and
has suggested that high service quality performance increases customer satisfaction
(Anderson & Fornell, 1994). However, the concepts of service quality are difficult
to define, measure and maintain (Parasuraman, Zeithaml & Berry, 1985). In 1985,
Parasuraman et al., defines service quality as a function of the differences between
expectation and performance along ten major dimensions such as reliability,
responsiveness, competence, access, courtesy, communication, credibility, security,
understanding/knowing the customer, tangibles. In later research, Parasuraman et
al.(1988) revises and defines the service quality in terms of five dimensions:
tangibles, reliability, responsiveness, assurance (combining communication,


4

credibility, security, competence and courtesy), and empathy (combining

understanding and knowing the customer with accessibility). It is called
SERVQUAL instrument which becomes the most popular and commonly uses to
measure service quality across many different service settings. Besides, according
to Parasuraman et al., (1985) service quality is evaluated by the gap between
expected service and perceived service. It means the customers expect service
companies to do what they are supposed to do. They expect fundamentals, not
fanciness; performance, not promise only. At the point of service creation and
delivery, all the resources and knowledge of the provider of the service must come
together in exactly the right way to ensure an excellent service encounter for the
customer. At this point, the customers compare their expectations with actual
service delivery system performance and ultimately arrive at their perceptions of
service quality. Or, customer satisfaction as a measure of how customers perceive
services delivery (Hernon & Whitwan, 2001). In short, there are many concepts of
customer‟s satisfaction, therefore, it is not easy for the managers of hotels and
restaurants in Vietnam to define and provide a service quality in order to bring the
most satisfaction for their customers.
1.2 Research Motivation:
In the hospitality industry, most researchers are interested in maximizing
customer satisfaction; satisfied customers tend to return and make the profit to hotel
and restaurant business. The role of service quality as one of indicators for
customer‟s satisfaction and hotels‟ profitability (Kotler et al., 1996), the hospitality
organizations should consider any element or factor to fulfill their customer
satisfaction. In order to identify the impact of service quality factors on customer
satisfaction in hospitality industry in Vietnam, I want to conduct a survey to
examine the relationship between service quality and customer satisfaction. Also, I
would like to make a comparison between the viewpoint of foreigners and
Vietnamese about the service quality dimensions to understand if their perceptions


5

of service quality are same or different in two groups. Hoping that this survey can
be useful for managers working in restaurant and hotel industry in Vietnam.
1.3 Research Objectives:
The objectives of this study are as follows:
 To examine the relationship between the components of service quality
and overall perceived service quality.
 To examine the impact of overall perceived service quality on customer
satisfaction.
 To examine the moderating effect of customer viewpoints (Vietnamese
vs foreign customers) on the above relationships
1.4 Research Scopes:
The study will be focused in Ho Chi Minh City. It is a biggest city of
Vietnam where there are a lot of restaurants and hotels that the customers have
more choices in using the services. Moreover, in order to achieve the research
objectives, the questionnaire should be replied by both of foreigners and
Vietnamese customers. Ho Chi Minh City is a place having many foreigners who
come here for working and travelling.
1.5 Structure of Research:
As the common regulation of a thesis, the main structure of research is
divided into five parts. They are correlative with five chapters in general with the
main contents as follows:
 Chapter one is an introduction, will be discussed about research
background, motivation, objectives and structure of the research.
 Chapter two, namely literature review, theoretical framework and
hypotheses, will be discussed about a comprehensive literature and give out
some definitions of concepts of variables, the hypotheses between variables
and build up the framework of research.

6

 Chapter three, namely research methodology, will be described the
methodology of research, sampling design, data collection procedures and
data analysis procedures.
 Chapter four is the result of analysis. This part will be included descriptive
statistics, assessment of measurement model as well as hypothesized model
whether it has the good meaning or not.
 Chapter five consists of conclusions and recommendations. This chapter
will be discussed about summary of findings, conducted the conclusions and
implications for management, contributions of the study, limitations and
recommendation for future research.


7

CHAPTER 2
LITERATURE REVIEW, THEORETICAL FRAMEWORK
AND HYPOTHESES
The purpose of this chapter is to review and analyze previous research
related to the concepts of service quality and customer satisfaction. It provides some
definitions of service quality, SERVQUAL, the concepts of customer satisfaction
and perceived service quality. Also, this chapter states out the relationships between
variables, and main reasons lead to the framework and hypotheses of research.

2.1 Service Quality:
We can define “Service” as the interaction between the customer and the
service‟s provider. The International Standard Organization (ISO) defines a service
as a part of the total production concept. Services are often “invisibles” and for this
reason it is difficult for the supplier to explain and for the customer to analyze.

However, the concept of “Quality” must be considered from the customer
perspective because it forms the perception of quality and will determine whether
the customer satisfied or not. It is the perception of the outcome which will judge
“the service”. Bitner and Hubber (1994) say about service “The customer will
remember the comfort of the facilities, but they will also remember the interaction
they have with members of staff”. Juran, Deming and Feigenbaum share the
definition of “Quality” as “satisfying customers” or “fitness for purpose”. It means
that “quality” can be defined as the ability of the organization to determine
customer‟s requirements, and then meet or exceed their requirements. Besides,
“Quality” is defined either as the “cost to the producer and the price to the
customer” or as “meeting the customer‟s requirements in terms of quality, price and
availability”. This focus is external factors. For Blackburn (1998) “customers have
expectations and desire concerning the performance and appearance of the product
or the content of a service activity which they believe they should or could obtain


8

under given circumstances”. Furthermore for North (1998), he points out four
important characteristics about the concept of “quality” such as not absolute; not
unchangeable; not stable and quality is a "dynamic process" not a "static goal".
As the analysis above, a combination of “Service” and “Quality” – “Service
quality” is becoming too important and meaningful for service providers and also
for users as well. The service quality definitions are very close to the “customerled” definition. Therefore, service quality is a complex, elusive, subjective and
abstract concept. There are a number of different "definitions" as to what is meant
by service quality. One that is commonly used defines service quality as the extent
to which a service meets customers‟ needs or expectations (Lewis and Mitchell,
1990; Dotchin and Oakland, 1994; Asubonteng et al., 1996). Also, service quality
can be defined as the difference between customer expectations of service and
perceived service. If expectations are greater than performance, then perceived

quality is less than satisfactory and hence customer dissatisfaction occurs
(Parasuraman et al., 1985; Lewis and Mitchell, 1990). Some important definitions
of service quality are “service quality is determined by the differences between
customer‟s expectations of services provider‟s performance and their evaluation of
the services they received” (Parasuraman et al., 1985; 1988). Besides, for
Asubonteng et al. (1996) “service quality can be defined as the difference between
customers‟ expectations for service performance prior to the service encounter and
their perceptions of the service received”. Ueltschy et al. (2004) defines service
quality as the consumer‟s judgment about the overall excellence or superiority of
the service. DeMoranville and Bienstock (2003) identify service quality as a
measure to assess service performance, diagnose service problems, manage service
delivery, and as a basis for employee and corporate rewards. In summary, all
previous literatures offer many valuable contributions related to service quality.
However, in this study, we will focus on the most popular definition of service
quality of Parasuraman et al.


9

2.1.1 The SERVQUAL instrument:
In order to measure the quality service, there are many researchers to
develop a number of measurement tools. Garvin (1983) measures quality by
counting the number of internal and external failures. Internal failures are observed
before a product leaves the factory and external failures are incurred after a unit has
been installed. Quality is conformance to the customers not to the company‟s
specifications. Gronroos (1984) classifies service quality into technical and
functional quality. Technical quality is defined as an evaluation based on what the
consumers received as a result of interaction with the service provided. Functional
quality is defined as an evaluation based on how the service is provided. In 1985,
three marketing professors from Texas A&M University who are Parasuraman,

Zeithmal and Berry publish a set of services quality dimensions and these
dimensions are widely recognized by many scholars and have been used in many
service firms (Forster, 2001). In the first research, they consider ten dimensions of
service quality to determine the perceived services quality consisting of reliability,
responsiveness, competence, access, courtesy, communication, credibility, security,
understanding/knowing the customer, tangibles. However, over next three year
1988, they narrow the initial ten dimensions of service quality to five dimensions
which is called SERVQUAL. SERVQUAL (Parasuraman et al., 1988) has gained a
wide scale acceptance and has proven to be a popular measurement tool with
academicians and practitioners as well. The SERVQUAL instrument measures
service quality by examining the gap between “expectations” (the service that
customers think should be provided) and “perceptions” (what customers think
actually has been provided).
The SERVQUAL instrument has five dimensions: tangibles, reliability,
responsiveness, assurance (combining communication, credibility, security,
competence and courtesy), and empathy (combining understanding and knowing the
customer with accessibility). These dimensions are defined by the authors as
follows:


10

Table 2.1 Five Dimensions of Service Quality
Dimensions

Definitions

Tangibles

Physical facilities, equipment, appearance of personnel.

Reliability

Ability to perform the promised services dependably and
accurately

Responsiveness

Willingness to help customers and provide prompt service.

Assurance

Knowledge and courtesy of employees and their ability to
inspire trust and confidence.

Empathy

Caring, individualized attention the firm provides its
customers.

Source: Parasuraman et al. (1988)
2.1.2 Applying SERVQUAL in the Hospitality Industry:
In the hospitality industry, a variety of studies have been conducted using the
SERVQUAL model. The effectiveness of SERVQUAL in studying service quality
within hospitality industry has been well established by several researchers such as
Lee & Hing, (1995); Wuest, Tas & Emenhelser, (1996); Amstrong, Mok, Go &
Chan, (1997); etc.,.
Wuest et al. (1996) assesses that the importance of services provided by
hotels/motels as perceived by mature travelers using the SERVQUAL instrument.
The results support Parasuraman et al. (1998) earlier finding that Assurance and

Reliability are the most important dimensions of service quality in both studies.
Besides, in the Wuest et al. (1996) study, Tangibles and Responsiveness are ranked
at the third and the fourth. The least important factor is Empathy.
Amstrong et al. (1997) uses SERVQUAL to examine the impact of
expectations on service quality perceptions in Hong Kong‟s hotel industry. They
collect cross cultural samples of hotel guests in three large hotels. The study finds
that significant expectation existed between cultural groups. The Asian cultural
group is significantly different from English heritage group.


11

In the foodservice industry, Bojanie and Rosen (1994) examine the
association between service quality as perceived by restaurant clients and its service
determinant. The results imply that customer expectation exceeded the actual level
of service, as indicated by perception scores. The major difference between this
model and the original model (Parasuraman et al., 1998) that Empathy dimension is
segmented into two dimensions: Knowing customer and Accessibility. In this study,
the order of ranking is found as Assurance at the first; Reliability at the second;
Tangibles at the third; the lowest rating for Knowing customer.
The usefulness of the SERVQUAL instrument in measuring and comparing
service quality within the fine dining sector of restaurant industry is accessed by
Lee & Hing (1995). Customer‟s expectations of service quality, on all dimensions
and overall, are similar with Assurance having the highest score. Rating of
customer‟s expectation of service quality along all five dimensions is higher than
perception of service quality. The study results found that Assurance and Reliability
are the most important dimensions of service quality in restaurant business.
2.1.3 Perceived Service Quality:
Perceived service quality is defined by Parasuraman et al., (1988) as “a
global judgment or attitude, relating to the superiority of the service”. It means that

perceived service quality is an attitude of a consumer judgment on the overall
service. For Kangis and Voukelatos (1997), perceived service quality results from a
comparison of consumers‟ expectations with their perceptions of the service
actually delivered by supplier. It is the evaluation of the service performance that
customers received according to whether it meets certain standards.
As mentioned above, Parasuraman et al., (1985) service quality is evaluated
by the gap between expected service and perceived service. They consider ten
dimensions of service quality to determine the perceived services quality. In the
context of this study, the SERVQUAL instrument by Parasuraman et al., (1988) is
used to test the perceived service quality as indicator of customer satisfaction. This
model consists of five dimensions as follows:


12

 Tangibles: the appearance of physical facilities, equipment and
personnel. This dimension is referring to all facilities, equipment and
staff of hotel and restaurant.
It is very important for the hotel and restaurant organizations to be
well-prepared all facilities, equipment and the appearance of staff to appeal
the customers to use the services of the organizations. According to Lau et
al. (2005), the tangibles factor is the most important factor of hotel service
quality. They use neat appearance of staff, availability of modern equipment,
the physical facilities and material associated with service are visually
appealing such as availability of first aid facilities and instructions, free
internet access service for customers, clean and comfortable room, etc.,
Zeithaml and Bitner (2003) state that tangibles must be strengthened in
hospitality services to induce the customer return to a facility. Akbaba(2006)
states that tangibles positively affect the perceived service quality.
Based on research purpose and literature of all theories and articles

mentioned above, this is the first hypothesis:
 Hypothesis 1: Tangibles has a positive effect on overall perceived
service quality.
 Reliability: Ability to perform the promised services dependably and
accurately
Reliability is one of the most important factors towards hotel and
restaurant services because most of the customer would like to ensure that
service provider is able to perform the promised services dependably and
accurately (Zeithaml et al., 1990). In additions, according to some other
studies, besides tangible factors, there are some intangible factors such as
reliability had a direct influence on customer‟s perception of service quality.
It leads to the second hypothesis:
 Hypothesis 2: Reliability has a positive effect on overall perceived
service quality.


13

 Responsiveness: Willingness to help customers and provide prompt service.
Responsiveness is perceived to be the most important dimension
(Zeithmal et al., 1990). Therefore, it is important to make sure the employees
of service organizations are in good manners and willing to help the guests.
The better of employee service behavior, the better of service quality the
customers perceived. Therefore, the third of hypothesis as follows:
 Hypothesis 3: Responsiveness has a positive effect on overall perceived
service quality.
 Assurance: Knowledge and courtesy of employees and their ability to
inspire trust and confidence.
Most of guest will expect to have warm welcoming or guiding correct
information or appropriate identification in the certain situation. In addition,

if staff is confident on their job with in-depth occupational knowledge that
will inspire the truth and confidence to the guests towards to the firms
(Parasuraman et al., 1988). In the hospitality industry, most of customers will
expect to feel safe and secure in doing transactions with the staff of
restaurants or hotels. So, this factor can affect on the service quality the
customer perceived. Therefore, the fourth of hypothesis as below:
 Hypothesis 4: Assurance has a positive effect on overall perceived
service quality.
 Empathy: Caring, individualized attention the firm provides its customers.
This dimension is used to measure service quality based on the ability
of the management of hospitality organizations to understand the customer
needs and requirements. According to Watkins (1998), the importance of
empathy may be the root of the statement, “If ones look at who is wining, it
tends to be companies that see the guest as an individual”. Thus, the fifth of
hypothesis:
 Hypothesis 5: Empathy has a positive effect on overall perceived service
quality.


14

2.2 Customer Satisfaction:
Customer satisfaction can be defined generally as the mental effects of
comparing the customer expectations before using the service and the perceived of
actual performance after using the service (Gronroos 1982; Parasuraman et al. 1985;
Berry et al. 1990; Oliver 1997). This definition is also supported by Kotler (2003)
which states that satisfaction is a person‟s feelings of pleasure or disappointment
resulting from comparing a product‟s perceived performance (or outcome) in
relation to his or her expectation. On the other hand, customer satisfaction is
defined as a result of customer‟s evaluation to the consumption experience with the

services.
As we known, customer satisfaction/ guest satisfaction is the leading
criterion for determining the quality that is actually delivered to customers through
the product/service and by the service providers (Vavra, 1997). Simply stated,
customer satisfaction is essential for corporate survival. This creates the challenge
of maintaining high levels of service, awareness of customer expectations and
improvement in services and product. According to Barsky and Labagh (1992) and
Stevens et al., (1995), providing high quality service and enhancing customer
satisfaction are widely recognized as important factors leading to the success of
companies in the hotel, catering and tourism industries. In order to be successful in
the industry and to outweigh other competitors, hotel and restaurant providers must
provide customers with a perfect service satisfaction.
 Measuring customer satisfaction:
Customer satisfaction measurement serves two roles, providing information
and enabling communication with customers. Perhaps the primary reason for taking
the time to measure customer satisfaction is to collect information, either regarding
what customers say that needs to be done differently or to assess how well an
organization is currently meeting its customer needs (Varva, 1997). A secondary,
but no less important function of customer satisfaction measurement in hospitality
enterprises is that by surveying customers, an organization is demonstrating its


15

interest in communicating with its customers-finding out their needs, pleasures,
displeasures and overall well-being. However, it is impossible to measure the
satisfaction of every single customer, those whose opinions are solicited and others,
who observe this process, are given a sense of importance and recognition.
Cronin and Taylor (1992); Ekinci (2004) found that perceived service quality
must be antecedent of customer satisfaction. An alternative conceptualized imagines

perceived service quality as both an antecedent and a consequence of satisfaction.
Lacobucci, Ostrom and Grayson (1995) examined the issue both empirically and by
comparing structural models and determined that perceived

service quality

represents an antecedent of customer satisfaction while customer satisfaction also
offers an antecedent of perceived service quality. Caruana, Ewing and Rameseshan
(2000); Baker and Crompton (2000) suggested that in general perceived service
quality directly and significantly influences satisfaction. From that we have the next
hypothesis:
 Hypothesis 6: Overall perceived service quality has a positive effect on
customer satisfaction.
 Satisfaction level by customer demographics:
Demographic characteristics play a critical role in shaping customers‟ needs.
The service organizations take demographic characteristics as one of the major
determinants of consumers‟ buying behavior. Demographic characteristics include
customer‟s sex, age, education, occupation, sector, location of domicile, ethnicity,
etc.,. According to Amstrong et al. (1997), there are the different expectation
existed between cultural groups. However, in the limitation of the study, we just
consider on the possible influences on customer‟s satisfaction by their demographic
characteristic between foreigners and Vietnamese (country factor). So, the seventh
of hypothesis:
 Hypothesis 7: There is a different viewpoint between foreign and
Vietnamese customers on service quality and its impact on their satisfaction.


16

2.3 Theoretical Framework and Hypotheses:

2.3.1 Theoretical Framework:
Theoretical framework is mainly based on the literature review. According to
previous analysis, the constructs are integrated in a theoretical framework. The
framework guides development of the research‟s hypotheses, which examine the
relationships among variables of the research. The following is theoretical
framework:

Tangibles
H1

Reliability

Responsiveness

H2
OVERALL
PERCEIVED
SERVICE
QUALITY

H3
β2

H4

β3

Assurance
H5

β4
β5

H6

β1
β6

Empathy

CUSTOMER GROUP
(Foreigner vs Vietnamese)

Figure 2.1 Theoretical Framework

2.3.2 Research Hypotheses:
All hypotheses are summarized and listed as follows:

CUSTOMER
SATISFACTION


17

Table 2.2: The Summary of Research Hypotheses
Hypotheses

Describe Hypotheses

H1

Tangibles has a positive effect on overall perceived service quality

H2

Reliability has a positive effect on overall perceived service quality

H3

Responsiveness has a positive effect on overall perceived service
quality

H4

Assurance has a positive effect on overall perceived service quality

H5

Empathy has a positive effect on overall perceived service quality

H6

Overall perceived service quality has a positive effect on customer
satisfaction

H7

There is a different viewpoint between foreign and Vietnamese
customers on service quality and its impact on their satisfaction.

18

CHAPTER 3
RESEARCH METHODOLOGY
In this chapter, the major aspects of methodology for quantitative approach
of the study are addressed. Accordingly, this chapter will be displayed with some
parts such as research methodology, sampling design, data collection procedures
and data analysis procedures.

3.1 Research Methodology:
This study used a quantitative approach to design and investigate the
relationship among research constructs and used survey as the method of
investigation. The objective of this study was to first examine the relevance of
service quality dimensions (SERVQUAL) and overall perceived service quality in
the hospitality industry under the context of study. The next objective was to
establish the relationship of overall perceived service quality and customer
satisfaction which was determined by regression analysis. And the final objective
was to compare the differences between the viewpoint of foreign and Vietnamese
customers on service quality constructs and its impact to satisfy them.
Questionnaires were made and delivered to the respondents to collect data.
The respondents were Vietnamese or foreign guests who stayed at least one time in
a hotel or used a casual dining in a restaurant in Vietnam. Before conducting the
main survey, the pre-test of the questionnaires was done quickly by processing a
qualitative interview to know whether items in the questionnaires are reliable and
validity or not. Once the pre-test‟s result was satisfied, the main survey could be
proceeded. After being gathered, data would be analyzed by using Descriptive
Analysis, Exploratory Factor Analysis (EFA) and Multiple Linear Regression
(MLR) through by these methods the issues of research would be empirically
answered.