TAÏP CHÍ PHAÙT TRIEÅN KH&CN, TAÄP 14, SOÁ Q2 2011

RELATIONSHIPS OF SERVICE QUALITY, SERVICE VALUE AND CUSTOMER
LOYALTY - A STUDY OF DOMESTIC AIRLINE SERVICE

Tran Th Phuong Thao, Pham Ngoc Thuy
University of Technology, VNU-HCM
(Manuscript Received on April 04th, 2011, Manuscript Revised September 21st, 2011)

ABSTRACT: For several decades, improving service quality has been considered the best way
to enhance customer satisfaction that leads to increase customer loyalty. However, customer
satisfaction that is viewed as the most important factor to determine customer loyalty, does not always
lead to success. Moving marketing from customer satisfaction orientation to customer value orientation
has recently been being a central issue in service marketing. Given these situations, this study aims to
explore the relationships between service quality, service value and customer loyalty. Its purpose is to
test whether service value should be an alternative to determine customer loyalty beside customer
satisfaction. Results of SEM analysis based on a sample of 308 passengers using airlines service in Ho
Chi Minh City show that there are two factors of service quality with significantly positive impacts on
customer loyalty through such an intermediary as service value.
Key words: Service quality, service value, customer loyalty, domestic airline service, Vietnam.

1. INTRODUCTION meet customer expectations. Therefore, service
Nowadays, providing superior values of quality is an important element to contribute to
service to customers is viewed as the best way essential strategy for success and survival in
to gain competitive advantages in business competitive environment (Blackwell et al.,
world (Woodruff, 1997). Service value is 2001; Kotler, 2000), if the quality of services is
known as a critical factor that affects a not valued, it only remains the quality.
customer’s decision-making process (Rust and However, if quality is valued, then it becomes
Oliver, 1994; Sweeney et al., 1999). Heskett et the value. This value helps to determine the
al. (1994) and Jen & Hu (2003) indicated that strength and direction of the relationship that
service value is very important factor in exists between a particular service and a
differentiating a firm’s service to others. In specific customer (Frondizi, 1997). In the
addition, following the S-D logic perspective purchasing process, customers encode their
(Vargo and Lusch, 2004), some scholars stated perceptions of value as synopsis of relevant
that service and value are viewed as two service information, and purchase service
logically inseparable concepts which qualify as based on their assessment of this information.
candidates for the title as the preeminent Enhancing value is a strategy that companies
marketing concept (Gronroos, 2008; Babin and need to emphasize (Kashyap and Bojanic,
James, 2010). Thus, creation of customer value 2000), but few empirical studies have done to
becomes an important topic that takes many address the effect of service quality on service
scholars’ attention. Some of them even value (Gallarza and Saura, 2006). Therefore,
suggested moving marketing away from a this study aims to empirically test the
focus on creating customer satisfaction to relationships of service quality and service
creating customer value (Ngo and O’Cass, value in customer post purchase process, i.e.
2010). However, there are few studies that customer loyalty.
investigate the antecedents and the The empirical setting of this research is
consequences of service value (Cronin et al., domestic airline services in the transition
2000; Sweeney et al., 1999). economy of Vietnam. During recent years,
On the other hand, for the last three decades, Vietnamese airlines industry has developed
researchers and practitioners have made their quickly with various brands participating in
efforts to determine the key role of service this market. To sustain competitive advantage,
quality to customer purchase behaviors; their an appropriate strategy to attract and retain
recommendations help providers give services their customers should be developed. This
study has a hope to provide a better
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. This conceptualization was service meets customers’ expectations. Service value has been judged to be one of 2. p. concerned with their payment. service Zeithaml et al. this measurement has also been Customers who are loyal with a firm tend to subject to criticism (Asubonteng et al. 2003) and is considered as a significant factor 2. Therefore. based on what is given and received. i. Cronin research findings support the positive influence and Taylor.. others need more convenient in perceptions which researchers have generally using service. Zeithaml. However. responsiveness. assurances and influences and marketing efforts having the empathy. 1984).. 1990). Service conceptualization and measurement of service value of the same service offered might be quality perceptions have been controversial perceived differently by different customers.. others focus on 1984) and the American School (Parasuraman. Customer loyalty is considered as marketing literature and used quite widespread an important indicator of the likely success of a in many industries (Brown et al. 2000. product/service consistently in the future. The second perspective defined and customer loyalty service quality as the gap between customer’s normative expectations for the service with Loyalty is defined as “a deeply held their perceptions of the service performance commitment to rebuy or repatronize a preferred (Parasuraman. For what is received. Many studies have been defined perceived value is the customer’s undertaken to understand and identify this overall assessment of the utility of a service construct in the last three decades. Based on trade-off Zeithaml.. 34). 1996) repurchase and/or say good thing about it. However. LITERATURE BACKGROUND AND the most important elements of differentiation HYPOTHESES in service marketing strategies (Jen and Hu. also supported by Babin et al (1994) who functional quality or service process quality suggested a bi-dimensional representation of refers to the customers’ perceptions of value. 1988). and Berry 1988). Previous dimensions (Babakus and Boller. loyalty implications of service quality are still Trang 48 . lacking loyalty. SERVQUAL measurement has been potential to cause switching behavior” (Oliver. many researchers and practitioners validity of the model. and Berry. despite situational reliability.. 1992). the precise outcome and service process.1 Service quality in consumer decision making process Service quality is an important issue in (Sweeney et al. the measurement scale of consists of two dimensions. namely process value Technical quality or service outcome quality (or functional value) and outcome value (or represents the information of whether the technical value). 2000. because of only focusing on the service Although. 1993).2 Service value marketers in domestic airlines industry. business (Butcher et al. interactions that happen during service delivery 2. Parasuraman and Grewal. Service quality Gronroos (2001). there is no general theoretical delivery process and neglecting the service framework covering all aspects of customer encounter outcomes (Gronroos. 2001. The first school principle of Zeithaml (1988) and the process – posed that service quality stemed from the outcome approach that is used to conceptualize comparison of perceived service quality with the service value in this study has its root in expected service quality. 1992. interrelated components. 1999). For what is given. some are adopted are the Nordic school (Gronroos 1982. this study of service quality on customer loyalty (Cronin follows the Nordic school to investigate service et al. 1999). some customers focus on Two main dominant schools of service quality service quality. with five dimensions: tangibles. widely cited by many scholars in service 1999. Nevertheless.e. topics in service marketing literature until now. quality based on two dimensions. Zeithaml (1998) service management. 1996). 1997). Oliver. SOÁ Q2 2011 understanding of customer’s behaviors to 2.3 Relationship between service quality process. These authors provided a measurement named thereby causing repetitive same-brand or same SERVQUAL. particularly the believe that service quality is an antecedent of dependence or independence of the five loyalty (Gremler and Brown. TAÄP 14. functional and service value in this study is divided by two technical quality (Gronroos 1982. brand-set purchasing. TAÏP CHÍ PHAÙT TRIEÅN KH&CN. their time and efforts.

Given these above situations. many scholars indicated that antecedents of 2. 2000). there is no service quality and loyalty: general theoretical framework covering all H1.. proposes and test the relationship between the Sirdeshmukh et al. are five Likert H2: There is a positive impact of service type. With the emerging of S- D logic perspective (Vargo and Lusch. Although. the study by Cronin authors posit a direct impact of customer value and Taylor (1992) showed that there was no on behavioral outcome. Measurement scales for discussed in marketing service (Lee et al. 1988). service and value 3. METHODOLOGY are two logically inseparable concepts which The model and hypotheses are tested by qualify as candidates for the title as the using the data collected fromVietnamese preeminent marketing concept (Gronroos. then it becomes the value domestic airlines services). SOÁ Q2 2011 unresolved and vary across industries (Cronin stay with a provider as long as it offers them et al. passengers who have used domestic airline 2008. The result of Lee and is a significant antecedent of loyalty while Cunningham’s (1996) research in airline customer satisfaction is not (Gan et al. quality on customer loyalty towards a service. While Boulding et al. Customer value repurchase intentions. 2004).e. 2010). (1993) superior value compared to others (Khalifa.4 Relationship between service quality customer loyalty are service quality customer and service value satisfaction (Cronin et al. Thus. The marketing scholars even suggest to change scales measuring the constructs in the model from creating customer satisfaction to creating were adopted from previous studies with customer value (Ngo and O’Cass. A customer. 1996). academics who are fluent in both languages. 2.. few empirical studies have done to adjusted from those developed by Zeithaml address this relationship (Gallarza and Saura. TAÏP CHÍ PHAÙT TRIEÅN KH&CN. the two components of service value were 2005). the impact of service customer loyalty scale was adopted from quality on service value is increasingly Zeithaml et al. creation services within 6 months. 2003).. this studies empirical studies (Bolton and Drew. element in market exchange.. industry demonstrated that service quality The critical role of service value toward positively correlated with customer loyalty. 2000. The survey was of customer value becomes an important topic conducted by using convenience sampling that takes many scholars’ attention. Data Trang 49 .. There is a positive impact of service aspects of customer loyalty (Shan et al. Babin and James. 1994). (1988). 2006). service is valued. TAÄP 14. this study positive impact of service quality on the proposes and test the relationship between the perceived value.. neglecting the role of relationship between service quality and satisfaction (Zeithaml. Customers obtained and used for this study. some willingness to recommend. (1996).. However. H3. The two translators were university quality on service value. Zeithaml (1988) indicates that there is a Given this diversifying results. 2002). Zeithaml et al. and correlates positively with service value and loyalty: purchasing decisions. 2000. These scales (see Table 1). Some method with a structured questionnaire. 2010). it is translated into Vietnamese using a translated proposed that: and back-translated procedure. 1991. RESULTS which is a major contributor to purchase A total of 308 usable questionnaires are intention (Chang and Wildt. Based on the cognitive-based quality and repurchase intentions and perspective of the value construct. Measurement which helps to determine the relationship scales for the two dimensions of service quality between a particular service and a specific were adjusted from Gronroos’ scales (1982). which were 2006). Parasuraman and Grewal. necessary adjustments to accommodate the Frondizi (1997) argues that if the quality of particular empirical research context (i.5 Relationship between service value and customer loyalty Loyalty is strongly linked to customer value 4. There is a positive impact of service many researcher consider value as a core value on customer loyalty towards a service. customer loyalty has been mentioned by many Given this diversifying results. found the positive relationship between service 2004).

p=0. TAÄP 14. and 33.8% of the respondents showed factor loadings of all items on their have flied at least twice a year. p=0. convergent and discriminate from the original scales due to low loading.638 Process value In comparison with the money. CFI=0.960.7%) of the respondents pay air ticket fees 0. I would say X provides excellent service 0.000.042. time and effort I spend… The services I receive from X is good 0. TLI=0. the reliabilities for constructs ranged from 0.7% are indicates that the sample size is large enough above 35 of age. TAÏP CHÍ PHAÙT TRIEÅN KH&CN.661 X knows the kind of services its customers are looking for 0.701 0.734 Process quality I feel good about what X provides to me 0. the results of CFA indicated second was on all scales combined. The results that all measurement scales achieved showed that 1 out of 22 items were eliminated reliability. The monthly incomes of the for the analysis (Byrne. SOÁ Q2 2011 collection method is convenient sampling with terms. TLI=0. This sample consists of 55. (Vietnam Airlines.001. 2001).831 Loyalty Trang 50 .965..704 to first was on the individual scales and the 0.627 to (69. using AMOS software program maximum likelihood (ML) estimation. on the full results of SEM indicated in a good fit between measurement model which represent relations the model and data: Chi-square=173.704 Overall.805 0. Jetstar Airlines and Mekong RMSEA=0. This were achieved (Kline. the rest get money from convergent validity (Hair et al. 1999).7% are above 5 this empirical study. CFA df=113. loading Comp.967.749 0. time and effort I spend… X makes me feel good during the time I use the service 0. 2005).85.712 X gives me what I need 0.3% and 48. The their bosses. Table 1. The majority designate constructs which range from 0.776 X provides me with the benefits I want 0. among all constructs and related items. reliability Outcome quality X provides the services that customers want 0. Chi-square/df=1.830.673 The services I receive from X is reasonable 0. domestic airlines operating in Vietnam GFI=0.475.759 X knows the quality of services its customers need 0.8%.726. The HOETLER index of 257 Airlines). respondents which lower than 5 million VND the full measurement model fits the data set in accounts for 51. male and 45.4%.5% items are as follows: Chi-square=160. Scale items for all constructs Item wording Std. results showed that 4 out of 21 items were GFI=0. The (Arbuckle and Wothke.039. About 68. of 26-35 is of 35. validity.602 which were lower than 0. eliminated due to high covariance of error RMSEA=0. indicating satisfactory level of by their own money.356 to 0.719 0. The composite procedure was carried out in two stages. Consequently.943.832.537.5% female passengers on three dF=109. Chi-square/dF=1. Generally. CFI=0.693. employed to have preliminary indications of meaning that discriminant validity of all scales unidimensionality. Then confirmatory factor analysis (CFA) was The structural model was then tested using conducted. The age group of 18-25 accounts for is above the threshold value of 200 which 30.938.972.761 X gives me a positive experience during the time I use the service 0. and construct validity. The model fit indices of the full face-to-face interviews using a structured measurement model with the remaining 17 questionnaire. The results (Table 1) million VND. 2006).818 I have an enjoying time during the time I use the service 0. correlations between constructs ranged from Exploratory factor analysis (EFA) was first 0.668 Outcome value In comparison with the money.

which value. only service quality to customer would lead to few researches have tested the relationships increase customer perceived value and develop between service quality.637 explanation of service value than process value.893.01).832 I encourage friends and relatives to choose X 0.. is 0.717 I recommend X to others 0. thus. customer loyalty via service value. service components of Service quality (second-order quality and customer loyalty.889 (p=0.057. It also empirical test the service is valuable to them. the customer attitudes and behavior after standardized regression coefficients of consuming a service. service value has a direct construct. via the mediation hypothesis H1 is not supported. In addition. Moreover.e. service value and long lasting relationships with them. However. (p=0. 2008). passengers can service requires the participation of customers choose which airlines that they assess its (i. 0. TAÄP 14. this study indicates that service quality does not Therefore. providing good (Riadh and Miguel. service value.636 (p=0. where the performance of the Vietnamese airlines industry. while quality on customer loyalty. statistics also indicate that concluded that the two hypotheses H2. It supports the the understanding of the increasing importance findings of Cronin and Taylor (1992). Therefore. TAÏP CHÍ PHAÙT TRIEÅN KH&CN. which only few empirical studies have 1988) in which service value is the higher level investigated its antecedents and consequences of service quality. H3 are the indirect standardized effect of service supported by the data set in this study. p=0.010).712 I say positive things about X 0. value is one of the key determinants of For Service value (second-order construct). This notices that service greater than Outcome quality is 0. DISCUSSION In other words. This also indicates the unequal This study also confirms the role of service contributions of the two components to Service quality as an antecedent of service value. 5.647. together explains the level of customer loyalty. It indicates a full Service quality also has a significant mediating model of service quality and standardized effect on service value (β=0. Trang 51 . behavioral intentions (Durvasula et al. outcome value gives higher respectively. Theoretically this result supports investigate the role of service value in customer the four hierarchical levels in customer’s decision and choice (Sweeney et al. service value has a significant standardized service quality does not affect on customer effect on customer loyalty (β=0. For two components of Outcome value and Process value are. The empirical construct) contribute unequal to this aggregate results show that. loyalty (β=0.010).679). of service value in inseparable service Moreover. The standardized regression impact on post-purchase states of customers – coefficient of Process quality is 0. p=0.01). 2004). p=0.726 I come back to X when I need this service in the future 0. It is. The results also indicate that two relationships between service value.010). with the remarkable development of industries. airlines services). SOÁ Q2 2011 I feel close to X 0.702 The results (see Figure 1) showed that of service value.01).578 (p =0.01) and 0.687 0. the findings of this research enhance directly affect customer loyalty. However. service quality has indirectly significant impact on customer loyalty via This research attempts to empirically service value. Consequently. 1999) cognitive structure on the service (Zeithaml.. customer loyalty.761 (p=0.

Third. with an acceptable price setting. The results future researches concern. Keywords: Ch2t lư9ng d?ch vA. s1 hài lòng c5a khách hàng ñư9c xem là y u t quan tr ng nh2t dZn ñ n lòng trung thành c5a h . It is (2004).) to re-evaluate the results of this understanding the importance of service value study. K t qu. m$t s nhà nghiên c3u ñ* ngh? rRng nên t p trung vào y u t giá tr? d?ch vA mà khách hàng quan tâm thay vì t p trung làm hài lòng h .nghiên c3u cho th2y hai thành phNn ch2t lư9ng d?ch vA có -nh hư4ng tích c1c lên lòng trung thành c5a khách hàng thông qua y u t trung gian là giá tr? d?ch vA. airlines. domestic service customer loyalty. Giá tr? d?ch vA. This study provides insight in the service value substituting customer satisfaction to Beside the above contributions of this study. This helps satisfaction factor does not exist.. lòng trung thành khách hàng. SOÁ Q2 2011 managers may need to emphasize on both with customers during the service process. Service quality should be see as an conducted for passengers from all regions of encouraging factor that significant impacts on Vietnam. TAÄP 14. and interacting QUAN H GIZA CH T LƯVNG DGCH VC. Đ) ki)m ñ?nh gi. d?ch vA hàng không n$i ñ?a. the results come from a customer perceived value and leads to survey of one industry. nghiên c3u này ñư9c th1c hi n nhRm xem xét m i quan h gi a ch2t lư9ng d?ch vA. Therefore. It should be customers. REFERENCES Trang 52 . become a basic framework that customers use it also has a number of limitations that require to judge the company performance. Ph9m Ng7c Thúy Trư+ng Đ i h c Bách khoa. CONCLUSION assessment of service value to adapt their expectations. This notice Vietnam.ñ?nh trên. undertaken for fully assessment. so it needs to perform for other service industries (i. it is totally supports the co-creation value concept difficult to enhance customer loyalty if only in S-D logic perspective of Vargo and Lusch focusing on improving service quality. First. giá tr? d?ch vA và lòng trung thành c5a khách hàng. Các m i quan h này ñư9c ki)m ñ?nh v i 308 khách hàng s dAng d?ch vA hàng không n$i ñ?a Vi t Nam t#i thành ph H0 Chí Minh. M:c dù. ch2t lư9ng d?ch vA ñư9c xem là cách th3c t t nh2t ñ) gia tăng lòng trung thành khách hàng thông qua vi c làm cho h c-m th2y hài lòng. retailing service. TrBn Th Phương Th o. In service quality and service value rather than the case of domestic airlines services in focusing only on service quality. TAÏP CHÍ PHAÙT TRIEÅN KH&CN. better if the efforts are based on customers’ 6. Vi t Nam. communicating service offers. the discussion of whether the with two components of process and outcome service value can substitute customer value in contributing to the overall customer satisfaction in explaining customer loyalty is perceived value would help marketers know only based on a model in which customer how to improve their performance. also confirm that solely improving service the generalization of the results is not high due quality would not help service providers to data collected from only domestic airline sustain their long term relationship with passengers in Ho Chi Minh City. service.e. Second. GIÁ TRG DGCH VC VÀ LÒNG TRUNG THÀNH C A KHÁCH HÀNG .. banking From managerial point of view. ĐHQG-HCM TÓM T T: Trong nhi*u th p k qua. Vì th .DGCH VC HÀNG KHÔNG N I ĐGA. tuy nhiên khi khách hàng hài lòng v i d?ch vA không ph-i lúc nào h cũng trung thành v i d?ch vA ñó. service providers allocate their limited another model including this factor should be resources and efforts in delivering service.

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