Academic journal article Asian Social Science

Retailer Service Quality and Customer Loyalty: Empirical Evidence in Vietnam

Academic journal article Asian Social Science

Retailer Service Quality and Customer Loyalty: Empirical Evidence in Vietnam

Article excerpt


This study investigates the relationship between retailer service quality and customer loyalty by conducting questionnaire survey on 664 buyers in several supermarkets in Vietnam. This questionnaire was constructed with 49 retail service quality items covering 6 service quality dimensions namely Physical aspects, Reliability, Personal Interaction, Problem solving and Policy and Information of goods, and 2 customer loyalty items. Statistical analysis results indicate the significant link between customer loyalty and such dimensions of service quality as Problem solving, Policy and Personal Interaction. From these findings, both managerial and theoretical implications have been discussed.

Keywords: service quality, retail industry, supermarket

1. Introduction

Due to undeniable impacts on organizations' performance, customer satisfaction, customer loyalty, and in turn, profitability, service quality has attracted great attention from practitioners, managers and researchers all over the world. That is the reason why studying on how to define, model, measure, collect and analysis data of service quality, has been leading to development of sound base for the researchers (Seth et al., 2005).

In Vietnam, the increasing trend of average income per capital offering many opportunities for both domestic and foreign retail enterprises. Especially, according to Vietnam Ministry of Industry and Trade, Vietnam, after joining in the World Trade Organization (WTO), committed to open its retail market to foreign investors, and allow foreign retailers to set up 100% foreign owned retail enterprises. In spite of the domination of traditional channels of retail service providers, many leading international retail brands have been making huge investment in Vietnam. Many forms of retail service providers have been developed such as business center, supermarket, grocery store, convenient store, and so on. By the end of 2013, there are 724 supermarkets in Vietnam in which 97 supermarkets are located in Hanoi (General Statistics Office of Vietnam, 2013). Experiencing the highest growth rate in the world since 2001 with 25% annual increase on average, Vietnam is currently considered as one of the most dynamic economy in South East Asia which possesses enormous advantages to attract retailers.

This situation raises a question about how retail businesses can perform better in this highly competitive market. Attaining customer loyalty which is fruitful sources of profits could be a potential answer for this question. To address this need, the study aims to examine service quality as well as its impacts on customer loyalty to find out which components of service quality significantly contribute to improve customer loyalty for retail businesses in Vietnam.

2. Literature Review

2.1 Service Quality and Service Quality Models

Gronroos (1984) and Parasuraman et al. (1985) proposed that service quality is a function of the differences between customers' expectation and their perception of the actual service received. Customers are satisfied when the perceived value meets or exceeds their expectation. In contrast, they are dissatisfied when they feel the perceived value below their expectation. This definition is accepted by a majority of academicians as well as practitioners and widely used to address research and business issues.

It cannot be denied that measuring service quality is obviously more difficult than goods' quality. The reason why is that unlike physical products, service product has a fewer tangible cues (Parasuraman et al., 1985) and also requires higher consumer involvement in the consumption process (Gronroos, 1984). Gronroos (1984) found that three dimensions including technical quality, functional quality and corporate image were critical component used to assess service quality. Then, Parasuraman et al. (1985) proposed the conceptual model namely SERVQUAL which has become the most widely used model to measure service quality for many years. …

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