IMPROVING CUSTOMER SATISFACTION OF AIR FREIGHT FORWARDING SERVICE QUALITY – A CASE IN ACT MULTINATIONAL TRANSPORTATION LOGISTICS CO., LTD

STATE BANK OF VIETNAM
BANKING ACADEMY
Faculty of Foreign Languages
--------

GRADUATION THESIS
IMPROVING CUSTOMER SATISFACTION OF AIR FREIGHT
FORWARDING SERVICE QUALITY – A CASE IN ACT
MULTINATIONAL TRANSPORTATION LOGISTICS CO., LTD.

Student
:
Academic Year : 2015 - 2019

Hanoi, May 2019
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DECLARATION
I hereby declare that I am sole author of this Bachelor thesis “Improving customer
satisfaction of air freight forwarding service quality – A case in ACT Multinational
Transportation Logistics Co., Ltd.”. The data, statistics and information reported in this
thesis is the result of my own work and I have not used any sources other than those
listed in bibliography. I further declare that I have not submitted this thesis in any
institution in order to obtain the degree.

Hanoi, May 2019
Signature

Chu Mai Huong

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ACKNOWLEDGEMENT
This thesis research the customer satisfaction of air freight forwarding services
from 2016 to the early four months in 2019 at ACT Multinational Transportation Co,
Ltd. Throughout the dissertation, I have received a huge of inspiration and assistance.
I would like to thank my supervisor, Mr Ngo Tung Anh, the dedicated lecturer
of Faculty of Foreign Languages Department, for his encouragement and invaluable
expertise in formulating of the research topic and giving the supportive
recommendations.
I would also like to give special thanks to my colleagues at ACT Logistics
Company for their helpful collaboration. All their supports are precious guidance and
made this time memorable.
I would like to acknowledge the supportive participants in the online survey.
Those response to the whole questionnaires and sharing their valuable experiences
greatly help me complete my dissertation. I hereby express my gratitude to all 76
customers of ACT and 55 respondents for their full supportive answer. With their
passionate support, the validation survey could not have been conducted.
In addition, I would like to thank my family, especially my grandmother for her
continuous encouragement and valuable guidance. Besides, thanks to my close
classmates, who were of great support in finding the topic and advising the survey
questions.

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TABLE OF CONTENTS

LIST OF TABLES

Table 3 1: The route from HAN with ASIA

4


LIST OF FIGURES

LIST OF ABBRIVIATIONS

5


LCL

less than container load

FCL

full container load

FRT

Freighter Aircraft

PAX

Passenger Aircraft

MAWB

Master Airway Bill

HAWB

House Airway Bill

Co

Company

Ltd

Limited

AMS

Automated Manifest System

VNACCS

Vietnam Automated Cargo And Port Consolidated
System

HS Code

Harmonized System Codes

IATA

International Air Transport Association

LIST OF APPENDIXES

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APPENDIX 1: ACT’s business report from 2016 – 2019
APPENDIX 2: ACT Planning Development Research, 2016
APPENDIX 3: ACT customer satisfaction levels questionnaire survey
APPENDIX 4: ACT customer satisfaction levels survey’s result

ABSTRACT
Logistics is a new and emerge field in Vietnam despite their enormous profit
and contribution to the development of this country. Although there has been a
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numerous local logistics companies, it still cannot meet the customer’s demand.
Therefore, service quality plays an important role in rating the logistics company as
well as gaining new customer and maintaining the loyal ones. However, service quality
is hard to evaluate, especially the new field such as logistics and freight forwarding.
Therefore, SERVQUAL model, the popular tools to assess, is based on five factors:
responsiveness, reliability, empathy, tangibles and assurance. Quantitative method was
applied by sending survey via Email for logistics companies, who are the loyal and
frequent ACT’s customers. The questionnaire are set by rating by scale from one to five
according to the level of satisfaction. 55 responses were collected after two month. The
result has shown some weakness of the service provided by ACT. From there,
enhancing the knowledge and skills of professional staff, together with the connection
of technology and 4.0 Industrial Revolution, is the prior to the solutions in order to

improve the effectiveness of air freight forwarding in ACT in particular and economy
development of Vietnam in general.
Key words: Freight forwarding, customer satisfaction, service quality, SERVQUAL
model
CHAPTER 1: INTRODUCTORY STATEMENT

1.1. Background of the study
The 21st century has seen a dramatic fall in trade barriers, intensive
globalization, and rapid growth in international trade. Companies of all sizes are
seeking to take advantage of opportunities in this new world economy, and Vietnam is
no exception. Together with the development of several innovative modes of
transportation recently, international transportation system plays an increasingly crucial
role. Along with the economic growth, import and export activities creates more
opportunities in the forwarding industry’s development.
In recent years, logistics and supply chain management have strongly developed
because of the rapidly increasing import and export activities. However, the
international transportation is not as simple as domestic transportation. Freight
forwarding, by itself, is a process, a chain management of international logistics and
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the forwarders on behalf of carrier having responsibility to deliver the commodity to
predefined destination. Many forwarding companies have been established,
specializing in providing customs clearance services, warehousing services, trucking
services and customs brokerage services. In order to achieve effective business result,
the employees must master the logistics professional qualification, affreightment
(renting a ship), customs procedures, etc.
However, it seems that this provided services do not meet the customer
requirement and satisfaction. Therefore, measuring customer satisfaction is a good way
to evaluate the quality of these service.

Throughout the Internship period at ACT Multinational Transportation Logistics
Co., Ltd, together with the support of the staffs in the company, especially the
dedicated guidance of the lecturer Ngo Tung Anh, I have decided to choose this title "
Improving customer satisfaction of air freight forwarding service quality – A case in
ACT Multinational Transportation Logistics Co., Ltd.." as my graduation thesis.

1.2. Objectives of the study
The broad objective was to study the satisfaction levels of the ACT’s customer
about air forwarding service quality
The specific objective of the study were:
• To measure the levels of satisfaction about the provided services
• To determine which model and factors are used to evaluate the services
• To determine which services are mostly used and highly satisfied by the
customers

1.3. Significance of the study
The result of the study will be of great benefit to the following:
ACT LOGISTICS COMPANY. The data and statistics are collected on the behavior
of customers toward the provided service of ACT. This result enable the company to
improve the air freight forwarding quality and the human resource. The gathered data
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help ACT understand the requirement and satisfaction in order to plan and upgrade
suitable services.
FORWARDER. The result of the study will help the forwarder evaluate the quality of
services provided by ACT, especially the ACT’s customers. The forwarder might have
more choices to use ACT’s services. Besides, it is an opportunity to gain the new
customers.
STUDENTS. This study will provide the information about the theoretical background

of air freight forwarding and logistics field. Also, this research evaluate the service
quality in every aspects of five factors of SERQUAL model. The data gathered will
also be a valuable source to help the other students.

1.4. Scope and delimitation of the study
This thesis will focus on measuring and evaluating the customer satisfaction of
ACT’s service. Due to time constraints, this graduation thesis is limited to just
mentioning the process of air freight forwarding without mentioning any other means
of transportation. Besides, the thesis focuses only on exporting goods rather than
procedures for imported goods. This topic uses the document and information of the
ACT Company within three years to refer to exporting goods of the company (from
2015 to the early four months of 2019).

1.5. Definition of terms
 Forwarder
A freight forwarder is a business, acts as an intermediary, receiving the goods of
the shippers, or consolidating multiple cargo into larger shipments, then hiring carriers
(shipping lines, airlines) to transport from the starting point to the final destination.
 Consolidator
A freight consolidator is an operator who uses the carrier as a vehicle. He groups
a small of commodities from a range of individual exporters into a full container of

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cargo and loads these collected goods under his own name to ultimately reach one or
more consignees’ end destination.
 Air Cargo
Air cargo is cargo transported by plane, otherwise known as by air. This is the
method where the cargo is delivered by a dedicated cargo plane (FRT, Cargo Air Craft,

or Freighter), or carried in the Passenger’s Plane (PAX).
 Master Airway Bill (MAWB)
Master Airway Bill is a document issued by the carrier to confirm receipt of the
shipment for air transport, usually abbreviated as MAWB. This bill is used to regulate
the relationship between air carriers and consolidators and delivery documents between
carriers and consolidators.
 House Airway Bill (HAWB)
House airway bill (HAWB) is a transport document, which is issued and signed
by a freight forwarder to the individual owners to receive the goods at the destination.
It is also known as the Forwarder’s House Airway bill. This bill is used to adjust the
relationship between the consolidation and the individual shippers.
 Manifest
Manifest is the transport document that gives a detailed summary of airway bills
issued by a carrier (or its agent) for a specific shipment. Manifest is a system to receive
cargo declarations, other relevant documents and electronic customs clearance for the
agent and forwarder.
 Customs Declaration
A customs declaration is an official document that the owner must declare about
the shipment when exporting or importing into the territory of Vietnam. Simply, if you
have goods to export or import, you must go through customs procedures, and
declaring the declaration is one of the required jobs.
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1.6. Summary
In summary, air freight forwarding has become an increasingly important sector
with the supply chain all around the world. In order to achieve effective and efficient
business systems, take advantage of human source and innovation technology will
bring more opportunity to enter new world. Therefore, improving the efficiency of
service quality is the prior action to meet the standard of the most fastidious customers.

For four chapters below, Chapter II will present the literature review of the
theoretical framework on air freight forwarding. In Chapter II, the primary topic
discussed is the factors that affect the forwarding services. In Chapter III, the thesis
discussed the research methodology and detail information of how the study was
conducted. The research results are analyzed in Chapter IV, followed by the findings
and recommendations in Chapter V.

CHAPTER 2: REVIEW OF RELATED LITERATURE
I. Theoretical and conceptual framework
2.1. General overview of forwarding
2.1.1. Freight forwarding
In international trade, goods need to be shipped to many countries ranging from
seller country to buyer country. In order for the goods’ process to be circulated quickly,
safely and economically without the involvement of the seller and buyer, it is necessary
to have the intermediaries related to the transport process, including trucking the goods
to the seaport, carrying out customs clearance procedures, loading and unloading
procedures, shipping the goods to the consignee at the port of destination ... All these
activities are generally referred to as "Forwarding".
According to Article 163 - Vietnam Commercial Law (May 23, 1997), “Freight
forwarding is a commercial activity whereby the forwarders receive goods from the

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sender, organize transportation, storage, paperwork and other related services under
authorized by shippers, carriers and other forwarders”.
In short, forwarding is a collection of operations and procedures related to the
transport process to track the commodities from the place of shipment (shipper) to the
place of delivery (consignee). The forwarding company can do services directly or
through the agents or other third parties.

2.1.2. Freight forwarder?
A freight forwarder is a business, acts as an intermediary between a shipper and
transportation services that organizes shipments for individuals and corporation to get
goods from the manufacturers to the customers at predefined destination. The freight
forwarders specialize in lowering costs and facilitating the logistics of transportation.
A freight forwarder is responsible for the transportation of goods between one
destination and another. Freight forwarding companies specialize in arranging the
whole process for their shippers, from the storage to the shipment of their merchandise.
The forwarder helps import and export business to save costs for building
warehouses, managing goods because it is possible to use warehouse and personnel of
the forwarder.

2.2. The role of forwarder in international trade
Today, due to the development of transportation, especially multimodal
transport, the forwarder not only works as an agent, a trustee, but also a transport
service provider and the carrier. The forwarder has services as the following functions:

2.2.1. Carrier
The forwarder acts as a carrier, it means that any person by whom or in whose
name a contract of carriage of goods by sea has been concluded with a shipper. They
transport goods from port of loading to port of discharge under their own or chartered
vessels. The forwarder acts as contracting carrier if he signs a contract without directly
transporting it. If he directly transports, he is the actual carrier.
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"Actual carrier" means any person to whom the performance of the carriage of
the goods, or of part of the carriage, has been entrusted by the carrier, and includes any
other person to whom such performance has been entrusted.

2.2.2. Customs Broker
Customs broker is the person who is licensed to help importers and exporters
ensure complete compliance with federal law. Every country has different laws
pertaining to their specific interests and customs brokers assist their clients by
cooperating shippers and government agencies. In some countries the license or the
professional activity is mandatory and in others not.
Customs broker will review packing lists and commercial invoices, organize and
submit necessary documentation to ensure shipments meet all legal requirements and
verify that taxes and duties have been properly calculated and paid. A customs broker
will make sure that the goods are correctly classified with the appropriate Harmonized
Code, allowing their clients to pay the lowest possible taxes and duties.

2.2.3. Cargo Consolidator:
A freight consolidator is an operator who uses the carrier as a vehicle. He groups
a small of commodities from a range of individual exporters into a full container of
cargo and loads these collected goods under his own name to ultimately reach one or
more consignees’ end destination.
It is very simple to ship goods via a freight consolidator agency. An agent or
representative will guide you throughout the process until the goods are brought to the
final destination. As a collector goods, the forwarder can act as a carrier or just an
agent.

2.2.4. Agent
Not only does the forwarder have the responsibility of the professional carrier
but also, he acts as an intermediary between the shipper and the carrier as an agent of
the carrier or of the shipper. The forwarder, under the direction of the shipper, performs
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several tasks that related to import – export procedures, such as receiving goods,
delivering goods, taking documentations, clearing customs procedures, warehousing
that basing on trust contract.

2.3. Rights and obligations of freight forwarders
The freight forwarders have the following rights and obligations:
• Receive service commission and other reasonable expenses.
• During the contract performance, the forwarder may work differently with the
instruction of the shipper in case there bring good benefits for the clients,
however it should be notified to his customers as soon as possible.
• When something occurs, it may lead to partial failure or all customer’s
instructions, the forwarder must immediately notify to his clients for
instructions.
• In case there is an agreement on the specific time to perform obligation, the
forwarder must fulfill their obligations within a reasonable time.
• When transporting the goods, the forwarder must comply with the provisions of
law and transport customs.

2.4 Responsibilities of forwarder
The main responsibility of the freight forwarder is to arrange the movement of
the cargo to its final destination point. Apart from that, the freight forwarder must
review the ready documentation including the commercial invoices and the airway bill,
prepare and process the documents for international freight forwarding.
When the forwarder acts as a trustee, the forwarder must also be responsible for
the losses caused by the third party. In this case, the forwarder usually has an
agreement with the customer about the full-service price (usually a package price), not
just a commission as an agent. Forwarders often act as mandates when performing
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tasks such as cargo consolidator, transport goods or store goods in their own
warehouse, or when using multimodal transport types.
However, the forwarder is not responsible for any loss or damage failure of
goods from the following cases:
• Customer's fault or the person entrusted by the customer.
• Fraud customer’s package and inappropriate code.
• The nature of goods.
• War or strike
• The case of force majeure, e. g: the severe weather
• In addition, the forwarder is not responsible for delays or wrong addresses

2.5. Steps of air freight forwarding
2.5.1. Prepare goods, make a booking allotment
• Receive the detail information about the commodities, including: name of the
goods, pieces, gross weight, dimensions, nature of goods, packed in cartons or
pallet?
• Check the prices with the airline and other logistics costs that related to the
shipment, including AMS, handling fee, MAWB fee
• Make a booking with the airline to need space and make booking confirmation
to the customers.
• Prepare the necessary set of documentations to make customs clearance.
• Declare and submit customs declarations together with other documents such as
sales contracts, commercial invoices, business licenses, detailed declarations
and export permits (if necessary).
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2.5.2. Inspection, fumigation, tax calculation procedures
• Verify the necessary goods and make certificate, such as Certificate of Origin,
Certificate of Quality, …

• Inspected actual goods by customs according to Customs Law.
• Calculate taxes and issue tax notices, complete customs procedures according to
the information that declares on VNACCS software and HS Code

2.5.3. Trucking the commodities to the airport
• The forwarder will fill out and sign in Booking Note and hand it to the airline
representative to sign with Cargo List
• The forwarder directly delivers the goods to the airline
• Notify the buyers of the delivery and cargo insurance if needed
• Track and trace the flight to notify to the customers whether their cargoes are
arrived or not.

2.6. Factors affecting the air freight forwarding
2.6.1. The objective factors
a. State Policy
State policy is one of the important factors directly affecting international
freight forwarding activities. The Government Decree 57 / CP allowing all businesses
to have the rights to engage in foreign trade, contributing to increase the output
productivity. But most of the goods are LCL (less than container load), so in order to
transport the cargo, the warehouse business and consolidation services will be
developed.
According to VINANET News (09 Apr, 2019), the government applied 0% tax
on imported automobile components. The Decree No. 125/2017 / ND-CP of the
Government gave 0% preferential import tax rate for imported car parts from 9 seats or
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less will apply absolute import tax of 10,000 USD/ car. However, the firms must
commit to manufacture and assemble cars to meet emission standards of level 4 in
order to apply the 0% preferential import tax rate for imported automobile components.

In case an enterprise meets all the conditions of the contract and has paid the amount of
tax larger than the amount of must – be- paid tax, the customs shall handle the overpaid
tax amounts of enterprises in accordance with the Law on Tax Administration.

b. International law
Nowadays, the global economic integration brings a lot of advantages for
Vietnamese businesses, the scope of transporting goods is not just around national
range but also across the Vietnamese’s border. Therefore, the enterprises not only
comply with the legal law of its own country but also international law.
International laws are set up to protect the right of related parties and IATA
likely plays a significant role in avoiding regulatory violations, emergency situations,
and package rejection or shipping delays. IATA stands for the International Air
Transport Association and is the official trade organization of the world’s airlines. For
air carriers, IATA provides a polled resource for scheduling, traffic and routes,
standardizing services and the creation of a worldwide public service for the air
industry. For consumers, IATA sets the international standard for services and business
practices amongst member airlines.

c. Customer demand for services
In the forwarding activities, when international trade is growing, customers
realize that the agency's agent role is becoming very limited. Customers want to be
arranged the entire transport process as well as other related services such as
consolidating, buying insurance, hiring vehicles, taking full responsibility during the
transport process in order to avoid damages and losses. Therefore, the forwarder not
only gives freight forwarding services but also provides related services in order to
shorten the delivery time and minimize the expenses and maximize the profit.

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d. The competition of forwarders
In the past ten years, the logistics industry has become more and more popular
and has an increasing important strategic position in the Vietnam's economic
development. Realizing that this is a potential field, many Logistics companies have
been launched to provide transportation, warehousing and distribution services for
import and export companies. Currently, there are more than 300 enterprises and
companies being established in the field of international freight forwarding in Vietnam.
The development of many companies creates significant competitive pressures for
other forwarders. However, the booming of forwarding companies has facilitated
import-export companies to have the best choice of services with the most premium
prices.

2.6.2. The subjective factor
a. Operational structure of enterprise
The organizational status of the enterprise will be much more effective if it is
compact, simple, suitable to the economic - technical characteristics, management
capacity of the managers than an enterprise with a loose organizational structure, which
is inconsistent with the requirements of the corporate governance apparatus.

b. Capital and facilities
Besides using capital sources to upgrade material and technical equipment for
enterprises operating in international freight forwarding, the capital must also be used
in the process of providing services such as pre- shipping allotment, customs clearance
procedures, import and export taxes paying. If there is no capital or insufficient capital,
a lot of difficulties in the process of business operations occurs.
International freight forwarding requires that the business has a certain amount
of facilities to meet the increasing and rigorous demands of its customers, namely the
warehouse system, transport vehicles and special-use vehicles, equipped with modern
communication means for communication such as computer systems connected to the
Internet, international telecommunications means and management means. Only when

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the enterprises meet the transport facilities conditions and modern technology devices
do they can compete successfully in the market to meet the demand of freight
forwarding and strongly developing as today.

c. Staff qualification
Human Resource has greatly affected international freight forwarding in all
aspect. This is because this field requires the staff have a high level of professional
skills, excellent foreign language, legal framework knowledge and sensitivity.
Customers only entrust and take full authority to the enterprises when they are ensured
with their rights in the contract. That is the reason why enhancing the employee’s skills
is the imperative actions to make profits. There has been some short- term course to
improve soft skills, such as computer program.

d. Brand and reputation of businesses
The prestige, reputation or brand of business is one of the key factors for the
survival of the business. The service quality of a business with great prestige and a
good brand name in the market will easily win customers to receive and choose more
services of unbranded businesses. The brand of the business is like a guarantee of
business with customers in creating a certain advantage of service with services of
other businesses. Especially for businesses involved in expanding international freight
forwarding markets, the brand of enterprises will make it easier for enterprises to create
trust and favor more customers.

II. Research paradigm / conceptual paradigm
2.7. Service quality
2.7.1. Service
It is hard to define exactly the definition of service which is valid for the whole

of the service sector. Regarding to the various types of service (using a vendor
machine, healthcare consultation, sending letter, air transport, computer maintenance,

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renting a car…), such attempts have always failed. Therefore, some service definitions
of well know authors are presented to offer a new goods-services definition below:
"A service is any act or performance that one party can offer to another that is
essentially intangible and does not result in ownership of anything. Its production may
or may not be tied to a physical product." (Kotler, 1987).
"A service is an activity or series of activities of more or less intangible nature
that normally, but not necessarily, take place in interactions between the customer and
service employees and/or systems of the service provider, which are provided as
solutions to customer problems." (Gronröos, 1990).
Service is special product as it certainly has unique characteristics:
• Intangibility: Unlike physical products, service cannot be heard, tasted, seen,
hold or felt before being bought. Customer only receive service as soon as it is
provided; therefore, the purchaser only search for sign of quality through the
price, brand name or review.
• Perishability: Service is considered very perishable as it cannot be stored or
preserved. Take film ticket for example, it will lose value as soon as the movie
begins.
• Inseparability: A service is inseparable from provider. Service occur
continuously, which means the process of providing and receiving service is
carried out simultaneously and at the same time with the presence of the
customer. Therefore, the quality of service is difficult to predict due to it bases
on subjective opinion of customers.
• Variability: Service quality depends on providers, time and location. For
instances, the delicious of the dishes is not good if the chef give wrong spices.

Hence, it is important for suppliers if they want to improve the service quality.
Organizations can improve quality service by investing in staff training,
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standardization and implementation processes, and monitoring and measuring
customer satisfaction regularly.

2.7.2. Quality
Like service, quality is not a simple matter to define. The definition can vary
depending on the different products, manufacturers and customer’s need. Juran (1998)
defines quality as factors of products which meet customer requirements and therefore
provide client satisfaction. Quality also means “freedom from deficiencies – freedom
from errors that require doing work over again (rework) or that result in field failures,
customer dissatisfaction, customer claims, and so on”. The important awareness is that
none products or services totally satisfy all customers. Therefore, to ensure the services
are on the standard, the enterprise must control all stages from manufacturers to
distribution. Because, just one disappointment may might damage the whole process.
Quality create the differentiations with competitors and help to gain trust from loyal
customers. If the quality basically satisfies the needs, clients will continue to use
products in the future.

2.7.3. Service quality assessment
It is not easy to give a complete definition of service quality because service
quality is intangible product and the customers only assess it after purchasing and using
them. Quality is rated not only on the result of the service but also on the whole
process. Customer assess the service quality based on attitudes, subjective and the
ability to recognize.
Because the service quality related to customer’s satisfactions and expectation
as well as their perception of the service, it is hard to assess. Usually, there are three

levels of assessment of service quality:
• Good: when customers perceive the service beyond their expectation
• Satisfactory: when the service meets expectation
• Poor: when the service is below their expectation

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The ultimate goal of all activities of the enterprises is to satisfy customers.
Together with the gradually increasing higher demands, customers have more
opportunities to choose which company satisfied them the best, and they require better
services, such as attitude of staff, fast inquiry response as well as modern equipment.
The five-gap model is considered to be specific and detailed with identification
five gaps that may cause customers to experience poor service quality. This gap
compares between the customers’ expectation and reality and also take into account the
service provided, which identifies five gaps has been formulated by Parasuraman et al
(1985, pp.41-50).
Gap 1: The gap between expectation of client and perception of management.
The basic point of this gap is that companies do not fully understand the necessary
characteristics of their own organization’s service quality as well as service delivery to
satisfy customers.
Gap 2: The gap between perception of management and service quality
specification. Even if management accurately perceive customer expectations there are
still chances of customer dissatisfaction that can be caused by the gap in planning
quality of the service according to customer expectations.
Gap 3: The gap between specification of quality and the delivery of service.
This happens when the staffs are unable to provide and meet the set service standard.
Gap 4: The gap between the delivery of service and external communications.
This happens when the promotional campaign and advertisements do not meet reality,
which will easily lose customers’ trust in the company image.

Gap 5: The gap between perceived and expected service. The service quality
assessment depends mostly on the fifth gap while this gap five is also affected by the
first four gaps above. If the customers do not feel any difference between their
expectation and reality, that service would be rated excellent.

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2.7.4. SERVQUAL model
In this thesis, SERVQUAL model are used to analyze ACT customer satisfaction
service quality.
SERVQUAL is a model that are used to manage service quality, which is
developed by Zeithaml, Parasuraman & Berry to measure quality in the service sector.
The SERVQUAL scale is abbreviated from two words SERVice - Service and
QUALity - Quality.
Originally, the authors set out ten factors; however, it narrowed down to five
factors: reliability, assurance, tangibles, empathy and responsiveness. They are also
called as RATER. Depending on the type of service quality measured, there will be
some changes to the question and the addition of factors. For example, the service
quality of banking sectors will be measured differently from logistics service quality.
Therefore, qualitative research is very important to determine the model.
The strength of this model is that the scale is available, just by changing several
questions, the research is implemented. And because this model is a general model, it is
applicable to most types of services.
However, it is noted that because this model is so popular, some lecturers are not
interested in this method. That also means that other special models should be
implemented. If applying new model structure research, it is better to combine it with
other software. However, this takes a lot of time to learn about the software, such as
SEM, AMOS or SPSS.
Parasuraman's research (1985) argues that service quality is the gap between

customer expectations of the service they are using and the actual perception of the
service they enjoy. These researchers introduced 5 service quality factors. The
questions are designed to measure the above five factors in the model. There are two
concepts: the expected aspect and actual aspect of the service they are received. When

24


the expected aspect is greater than the actual quality received, the quality of service is
calculated as low rate and via versus.
Based on the Parasuraman definition of service quality and SERVQUAL model,
the searcher assesses service quality including 25 variables of 5 components to
measure the service quality as details in APPENDIXES 1

Reliability Factors
Reliability factor are the ability to implement what was promised
•

Is the service performed on a predetermined time?

•

Does the company always support when having problems?

•

Does the company be served well?

•

Does the company try to avoid mistakes during operation?

Responsiveness Factors
Responsiveness factors indicate whether the company can react quickly and
accurately
•

Does the company give a quickly response to deal with an unusual

activity?
•

Does the company take quickly actions for customers?

•

Do the company employees meet the requirements?

Assurance Factors
Assurance factors are the ability to create believe for customers through
communication (skills, expertise and knowledge)
•

Does the behavior of staffs make customers trust?

•

Do the employees show courtesy?

•

Do the employees have qualified expertise to solve all problems?
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