Mansori Et Al., 2014
Mansori Et Al., 2014
Mansori Et Al., 2014
7; 2014
ISSN 1911-2017 E-ISSN 1911-2025
Published by Canadian Center of Science and Education
Received: October 1, 2013 Accepted: January 1, 2014 Online Published: March 31, 2014
doi:10.5539/ass.v10n7p57 URL: http://dx.doi.org/10.5539/ass.v10n7p57
Abstract
The changing of the global demographic trends clearly suggests a growing demand for a quality higher education.
In fact, several studies have been carried out in the past few years to explore the factors that have effects on the
customer satisfaction and its consequences in various industries. In the same manner, this study also explores the
five factors of service quality (SERVQUAL) and their relationship with the level of student satisfaction and their
loyalty as well as the intervening role of satisfaction in the relationships between SERVQUAL factors and
loyalty among undergraduate students.
The study used self-administered questionnaires to test the proposed model and data collected from 460
questionnaires were analysed. The questionnaires were distributed at various private universities and colleges in
Malaysia based on convenience sampling. The results of this study are in accordance with prior studies in this
field as SERVQUAL factors do influence the level of customers’ satisfaction in the service industry. This study
shows that the level of students overall satisfaction is mostly affected by tangibility. This finding indicates that
the physical facility on the campus plays a major role in satisfying the students. The results also show that
tangibility has the highest influence (directly and indirectly) on the students’ intention to continue to a higher
level of studies and/or spreading good word of mouth about the institution to their friends and the society.
However, to generalize the results of this study, consideration should be made to the limitation of the number of
the private institutions where the samples are collected. It is suggested that for further study, more samples
should be taken from a larger number of institutions.
Keywords: SERVQUAL, satisfaction, word of mouth, post purchase behaviour, private education, loyalty
1. Introduction
The increase in student mobility in global higher education marks an important turning point in its landscape. The
changing of the global demographic trends clearly suggests a growing demand for quality higher education. The
significant changes in the infrastructure and the system of higher education in Asia (for example, Hong Kong,
Singapore and Malaysia) have contributed to the exponential growth in supply and demand in the higher education
industry in a very short period of time (Vaz & Mansori, 2013).
Strategically geographically located, Malaysia is in the most progressive developing region in the world and has a
strong base of foreign investments. It plays an active role in international organizations such as the Organization of
Islamic Countries. The links to these types of organizations have created significant competitive advantages for the
country to become an emerging force in the global higher education industry.
In 2011, the Malaysian Government became lenient in allowing more private higher education institutions to be
a part of the local higher education industry by making an amendment to the Private Higher Education Act
(1996). Furthermore, since 2009, it has been a part of the government’s higher education policy to diversify into
the local higher education market by allowing foreign based higher education institutions to establish their
campuses locally. The Government also encourages collaboration among local and foreign higher education
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institutions. All of these changes in the education industry in recent years have created more options for students
and make the competition more intense for higher education providers.
On the other hand, due to higher household income and the increase in Malaysia’s gross domestic product (GDP)
per capita, more students are able to enrol in higher education abroad. Additionally, private colleges and
universities (PCU) have offered similar programs and thus make the implementation of a variety of strategies
harder in order to create sustainable competitive advantage. Since product diversification has became difficult
due to similar product launches by competitors, many PCUs focus on improving the quality of their services so
that they can promote their institutions through high quality services.
Providing better education experience by offering higher and better quality service can increase students’
satisfaction which can in return generate more revenue for PCUs. Previous researches have found that student
satisfaction and the retention rate in higher education has a positive relationship and therefore the same
assumptions can be applied in this study. High student satisfaction also can lead to an increment in intention to
proceed to a higher level of studies in the same institution (Anderson, Fornell, & Lehmann, 1994; Berthon,
Ewing, & Napoli, 2008)
Current literature has shown that customers, who are satisfied of company service, usually accept the higher
price which can lead to increase the margin per customer. In addition, satisfied customers tend to support the
company by spreading the good word of mouth (WOM) and increase the level of publicity of the company. As a
result monitoring and reporting the customer satisfaction level is one of the tasks of marketing division of
companies (Wangenheim & Bayon, 2007; Wilson, 2002).
Several studies have tried to explore the cause of satisfaction/dissatisfaction and its effects on companies’
profitability in different sectors of industries. However, there is not many literature are found on private
education industry and more specifically in Malaysian PUCs. Unlike other industries, the impact of the services
in education is different because the level of its quality can influence the entire career of students. Moreover in
education, the cost to switch universities or even programmes, is very high due to the diversified curriculum.
Thus, students who are dissatisfied have no choice most of the time but to proceed with their studies at the
institution despite the quality of the services provided. Under these circumstances, students may use social media
and other mediums of communication to express their dissatisfaction and this would possibly tarnish the
institution’s reputation. Therefore, private education institution policy makers should be aware of the factors that
can influence the level of the students’ satisfaction and realize how it can affect the institution.
To address this issue and to find the answer for this dilemma, the study intends to explore the relationship
between reliability, tangibility, responsiveness, empathy and assurance factors which are known as SERVQUAL
with the level of student satisfaction and student loyalty as well as the intervening role of student satisfaction in
the relationships between SERVQUAL factors and student loyalty among undergraduate students.
2. Literature Review
2.1 Concept of Service Quality
The realization of the importance of the quality in the service industry has begun since the 1980s when supply
exceeded demand significantly in many developed markets. However, the noteworthy move toward
implementation and the study of service quality only kicked off in 1990s when companies started to focus on
quality of service as the main contributor in satisfaction / dissatisfaction (Chen & Aritejo, 2008).
Parasuraman et al., (1988) begun carrying out service quality studies in the 1980s by researching different
sectors in the service industry. In their studies, a variety of aspects were explored which can be considered as
factors that can affect the service quality based on customers point of view (Parasuraman et al., 1988). Initially
they included eleven factors into their exploratory study which included reliability, responsiveness,
customization, credibility, competence, accessibility, courtesy, security, communication, tangibility and
understanding or knowing the customer. However, after analyzing the results, they only published assurance,
empathy, responsiveness, reliability, and tangibles as factors that can influence the service quality. They include
these factors in SERVQUAL which is a measurement instrument for measuring the quality in services
(Parasuraman, et al., 1988). Based on the tests done on these five dimensions of SERVQUAL in many industries
indicate that they are reliable and valid (Brysland & Curry, 2001; Kassim & Abdullah, 2010; Lee, Kim, & Ahn,
2011; Naik, Krishna, & Gantasala, 2010; Sohail, 2003; Sohail & Shaikh, 2004).
Customers’ trust and confidence in employees’ knowledge and courtesy of an organization shows that they have
confidence and assurance pertaining to the service outcome (Yap, Wong, Loh, & Bak, 2010). Assurances given
by the company to their customers (students in the case of education) means that “We are sure of what we say
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and do” (Vaz & Mansori, 2013). However, lack of confidence in the institution can occur when employees fail to
provide or update the information needed by customers and thus can reduce the level of assurance which
consequently leads to dissatisfaction. To test this issue from students’ perspectives the below hypothesis is
developed:
H1: There is a significant relationship between assurance and student satisfaction.
Empathy can be defined as a deep caring and understanding of the customers’ feelings, situations and motives. It
evokes the desire to offer help that customers need by showing sympathy and compassion that match customers’
thinking, feeling or emotions (Hodges & Klein, 2001; Kassim & Abdullah, 2010). Thus, the show of empathy by
the institutions through their services to the customers convey the message that “We feel for you”. This factor is
considerably important in the education industry since the main group of customers in institutions are young
people who can be highly emotional due to personal or study problems. Therefore, the hypothesis below is
developed to test the relationship between empathy and student satisfaction:
H2: There is a significant relationship between empathy and student satisfaction
Responsiveness refers the level of the promptness in the staffs’ response to the customers’ enquiries (Lee, et al.,
2011) by showing that “We will get it done now”. The relationship between students and their institution may
start from the time of enrolment until their convocation, and it may go on beyond that through alumni activities.
Therefore, prompt actions which are taken following the student enquiries and complaints can be a determinant
factor in determining the level of student satisfaction. Hence, the hypothesis below is developed to test this
phenomenon:
H3: There is a significant relationship between responsiveness and student satisfaction.
Reliability is related to the accuracy and dependability of the services provided (Kassim & Abdullah, 2010).
Reliability shows the company meant it when it says “We deliver what we promise”. Reliability in the education
industry refers to the promises which are made by different levels of authority such as marketing teams, faculty
members, regarding the program and teaching faculty. Any misleading information or oversell promises made by
the marketing team can create expectations which are beyond the university’s capacity to deliver which could
later lead to students’ dissatisfaction. Therefore, to test the significant influence of this factor on student
satisfaction the hypothesis below is developed:
H4: There is a significant relationship between reliability and student satisfaction
Tangibility of service addresses all companies hardware such as building, facilities, communication channels (e.g.,
notice boards) and even the staff appearance (Naik et al., 2010). In other words, the company is able to convey a
message that “We can show it to you” by providing the facilities the customers need. The availability of facilities is
one of the major factors for students to select a particular institution (Dutta & Dutta, 2009). Therefore, the quality
of service related to the provided facilities is very important in determining whether the students will be satisfied or
dissatisfied with their chosen institution. As a result, to test this issue using empirical evidence the hypothesis
below is developed;
H5: There is a significant relationship between tangibility and student satisfaction
2.2 Relationship between Service Quality, Customer Satisfaction and Loyalty
Satisfaction/dissatisfaction is the outcome of comparison between customer’s perception about the quality or
attribute of product/service and the deliverance of promise by company (Oliver, 2009). If the deliverance of the
company meets or exceeds the customer’s expectation then the customer will be either satisfied or even delighted.
However, if the company fails to meet the customer expectation, which might be created by overselling by the
sales people, the gap between customer expectation and the quality of the actual provided services can cause
dissatisfaction. Since switching course can be costly for students in the education industry, even when they are
dissatisfied of the institution’s services they have no choice but to stay with the current institution. However, the
possibility of the spreading bad word of mouth about the institution is high and this can tarnish the reputation of
the institution.
Customer loyalty can be established in many ways such as support towards a certain organization by continue
patronizing a certain provider and this leads to increment in the frequency of their purchases (Rowley, 2005;
Wilkins, Merrilees, & Herington, 2009). According to Olorunniwo et al., (2006), customers who are loyal have
an impact on the profitability and overall success of the organization in two distinctive ways. First, through
continuous liaison with the education institution by furthering their studies at higher levels in the same institution.
This can reduce the attrition rate of students and increase the profit per student by lowering the cost of marketing
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and advertising and thus reduce the organization’s operating costs. Secondly, loyal customers tend to have a
higher level of repurchase and recommendation intentions (Al-Rousan & Mohamed, 2010). In other words,
satisfied and loyal students are more likely to spread favourable comments and recommend the institution to
others. It is very importance in the education industry since recruiting new students is very costly. It is also very
difficult to carry out conventional marketing approaches (for example, advertising and promotional activities)
because the market place for education industry has became global (Vaz & Mansori, 2013).
However, despite the high importance of loyalty and student satisfaction in the education industry, not many
studies investigate the factors which can influence these issues. Moreover, most of the current studies have used
only quantitative approaches which cannot give an in depth picture of this phenomena (Vaz & Mansori, 2013).
Hence, to study the relationship between satisfaction and loyalty in the education industry from the students’
perspective the hypothesis below is developed:
H6: There is a significant relationship between student satisfaction and word of mouth.
H7: There is a significant relationship between student satisfaction and student's intention to continue a
relationship with an institution.
2.3 Theoretical Model of Study
Assurance
H1
Word of
Empathy H2
H5 Mouth
H3 Satisfaction
Tangibility
H4
H6
Reliability Intention to
H5 Continue
Responsiveness
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The validity test is done to test of validity of the employed measurement. Table 2 shows the results of the
validity test which indicates that the current instrument is valid and all variables meet the minimum thresholds
(p-value<.001 and KMO>.70). Furthermore, reliability test’s results indicate that all constructs are acceptable
since Cronbach Alphas (more than .7), average variance expected (AVE > .4) and the composite reliability
(CR>.7) of variables have met the minimum requirement (Okazaki, 2011).
The results of SEM show that Chi-square = 103.134 / D = 1. GFI= .93, CFI=.931, NFI .93, IFI=.932 and
RMSEA=.29. The results for model fit show that all indices are perfectly good except RMSEA (Hair, Black,
Babin, & Anderson, 2010). In the case of RMSEA , studies show that this index is sensitive to the number of
variables and has a tendency to suggest better model fit when the number of variables is high but CFI and TFI
would suggest a worse fit index as the number of the observed variables increase (Breivik & Olsson, 2001; Fan
& Sivo, 2007).
The results in Table 3 show that H2 (p-value= .0001 β= .187), H3 (p-value= .007, β= .126), and H5
(p-value= .0001, β= .425), are supported as all p-values are less than .05. However, H1 and H4 are rejected
because their p-values are more than .05.The results also indicate that the factor which has the highest influence
on student satisfaction is tangibility followed by empathy and responsiveness. Moreover, current results of H6
(p-value= .0001, β=. 497) and H7 (p-value= .0001, β= .37) show that student satisfaction has a positive and
significant relationship with word of mouth and student intention to continue their studies with the same
institution.
The results from Table 3 also reveal that there should be other types of relationships between the variables in the
model rather than only direct relationship. Therefore, to test the mediation effect of student satisfaction on the
relationship between SERVQUAL dimensions and post purchase behaviour among students, the model was run
without the presence of the intervening variable (satisfaction).
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Table 4. Direct relationship between SERVQUAL dimensions and post purchase behaviour factors without the
presence of intervening variable (satisfaction)
Estimate S.E. C.R. P
WOM Assurance .002 .067 .037 .971
WOM Empathy .241 .062 3.890 .001
WOM Responsiveness .176 .065 2.718 .007
WOM Reliability .142 .065 2.183 .029
WOM Tangibility .305 .074 4.107 .001
Intention Assurance .166 .090 1.840 .066
Intention Empathy .195 .084 2.315 .021
Intention Responsiveness .014 .088 .160 .873
Intention Reliability .073 .088 .821 .412
Intention Tangibility .317 .101 3.147 .002
The results in Table 4 show that the first assumption of Baron and Kenny (1986) is met since empathy,
responsiveness and tangibility are directly related with word of mouth. In addition to that, the results show a
significant relationship between empathy, tangibility with intention (p-value< .05). However the first assumption
of Baron and Kenny (1986) does not exist for other relationships as the relationships between assurance and
word of mouth, assurance and intention, responsiveness and intention and reliability and intention are not
significant (p-value> .05).
Secondly, the mediator variable is added to the model and the bootstrap test was run for 10,000 times. The results
in Table 6 show that student satisfaction has a significant mediation role in the relationship between empathy,
responsiveness and tangibility and word of mouth (Total Effects p-values< .05). In addition, as in the presence of
student satisfaction, the direct relationship of this factor and word of mouth is insignificant (see Table 6). Therefore
it can be concluded that student satisfaction can fully mediate the relationship between empathy, responsiveness
and tangibility and word of mouth (Direct effect p-value> .05).
Moreover, the results show that student satisfaction fully mediate the relationship between tangibility and
empathy with intention since the p-value of the direct relationship is more than .05 (see Table 5 and Table 6).
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Overall the results reveal that tangibility followed by empathy has the highest effect on students' intention when
they are considered to enrol in a particular institution for higher education in the future
(βTangibility= .197/p-value= .0001, βEmpathy= .146/p-value= .0001). Furthermore, the results also show that the
highest impact on students' positive word of month for an institution is tangibility followed by empathy and
responsiveness (βTangibility= .229/p-value= .001, βEmpathy= .219/p-value= .0001 and βResponsiveness= .149/
p-value= .0001) (see Table 5, 6 and7).
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