UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business

Nguyen Thi My Chi FACTORS AFFECTING CUSTOMER
SATISFACTION IN GROUP BUYING IN
VIETNAM
MASTER OF BUSINESS (Honours)

Ho Chi Minh City – 2013 UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
Nguyen Thi My Chi

ABSTRACT i
TABLE OF CONTENTS ii
LIST OF FIGURES iv
LIST OF TABLES v
I. INTRODUCTION 1
1. Research background 1
2. Research motivation 3
3. Research questions 4
4. Research objectives 4
II. LITERATURE REVIEW 4
1. Group buying 4
2. Service quality 6
3. Online service quality 8
4. Service quality and customer satisfaction 11
5. Price discount and customer satisfaction 12
6. Trust and customer satisfaction 13
7. Brand and customer satisfaction 13
8. Research framework 14
III. RESEARCH METHODOLOGY 16
1. Research process 16
2. Research sampling method 18
3. Measurement scales 19
4. Data collection procedure 21
5. Data analysis method 21
5.1. Descriptive analysis 21
5.2. Reliability analysis 22
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5.3. Exploratory Factor Analysis (EFA) 22
5.4. Multiple regression analysis 23

Figure D.1 Histogram of SATIS dependent variable 68
Figure D.2 Normal P-P Plot of regression standardized residual 68
Figure D.3 Scatterplot 69

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LIST OF TABLES

Table 3.1 Survey item summary 20
Table 4.1 Sample characteristics 24
Table 4.2 Cronbach’s alpha reliability test result 28
Table 4.3 KMO and Bartlett’s Test for independent variables 30
Table 4.4 Rotated Component Matrix 31
Table 4.5 Removal process during EFA 32
Table 4.6 Total Variance Explained 33
Table 4.7 Rotated Component Matrix 34
Table 4.8 Cronbach’s alpha summary after EFA 36
Table 4.9 KMO and Bartlett's Test for dependent variable 37
Table 4.10 Factor loading of satisfaction variable 37
Table 4.11 Pearson correlation coefficients between SATIS and other independent
variables 38
Table 4.12 Coefficients
a
40
Table 4.13 The summary of overall value 41
Table 4.14 ANOVA
a

get price discounts”. In addition, joining online group buying, consumers not only
get competitive advantages of quantity system price and delivery service, but also
have chances to share shopping experiences with other buyers.
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In Vietnam, according to electronic information website Maskonline, website
phagia.com appeared officially on June 2010, making an underground river to the
field of electronic commerce in the country. Some months later, many other group
buying sties were born to compete each other, as cungmua.com, muachung.vn,
nhommua.com, etc. According to Vu Hong Quang, a representative of the Southern
VC Corp. which owns muachung.com, after just 7 months of operation, his site
already has 100.000 members. Muachung.com’s main competitor, nhommua.com
has the same number of registered users but even some of the newer sites have
60.000 members. According to uncompleted statistics, up to now, Vietnamese
market has about 97 sites that offer group buying services (E-Money, 2011).
Deals sites can create a winning situation all around that give benefit to three
sites: business, coupon site and consumer. Businesses get some much needed
traffic, the coupon sites get a commission for pulling in that traffic and consumers
get a good deal. And Vietnamese are loving this model.
Group buying model adopts “tipping point” mechanism. This mechanism
requires a minimum number of participants for each deal. There are two conditions
make a transaction happens: the number of actual participants exceeds the minimum
number and the potential buyers have prepaid for the deal (Cohen, 2009). A deal
usually includes price discount of the product or service. When the number of
people reaches a certain limitation, customers will get direct discounts on goods or
services or they can buy vouchers with attractive prices (E-Money, 2011).
According to action.vn, group buying model is as a balloon inflated round
two years ago, but it is now flat and gradually has to transform to survive (May

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As the review above, there is no study focus on service quality of group
buying even it is the critical factor affecting customer satisfaction. Therefore, this
research will try to figure out how to measure service quality of a group buying
service toward customer satisfaction. It also provides the main factors along with
service quality to enhance customer satisfaction of group buying service.
3. Research questions
According to the research background and motivations outlined before, this
research aims to investigate the following questions from the experiences of buyers
in online group buying:
(1) What are online service quality dimension in group buying service and
how do they affect customer satisfaction?
(2) What are factors that affect customer satisfaction in Vietnamese group
buying service and how do they affect to customer satisfaction?
4. Research objectives
The main objective of this research is to investigate the usefulness and
applicability of theoretical model in measuring online group buying quality and
customer satisfaction:
- Analyze the method used to measure service quality of group buying and
the influence of the measure to customer satisfaction.
- Analyze factors influencing customer satisfaction in group buying in
Vietnam.

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group buying could not do like that.
Erdogmus and Cicek (2011) mentioned that there are two different types of
online group buying systems: dynamic pricing and stable pricing. In the dynamic
pricing type, the discount prices can be changed basing on the price-quantity tables
defined by the sellers. If in a predetermined time, a group of buyers could be
gathered, then consumers could get the product or service at the same discounted
price.
In the second type of the online group buying, stable pricing, “the seller
offers a certain product or service at a large discount price, but the price is static,
does not get lower as the number of the buyers increases (Erdogmus & Cicek, 2011,
p.309)”. However, the discount price is only applied when the total number of the
buyers who buy the deal is greater than the predetermined limit of the minimum
required number of buyers. Due to the second type of online group buying is a new
form of marketing at the connection of promotion and pricing and grows rapidly
(Erdogmus & Cicek, 2011), as well as it is more popular in Vietnam than the first
type, this research will focus on the context of the second type of online group
buying.
According to Zhou (2005) and Chen (2007), there are two roles in the online
group buying chain. One is main buyer or it is also called initiator. The
responsibilities of main buyer are that he/she posts the issue about the requirement
of group buying, and then calculates the qualities of demand as well as price to
order the products which are buyers expected. The other role is follower who is
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gathered in a group by main buyer. Follower is mostly consumer in online group
buying chain.
Lai (2002) pointed out one new facet of group buying model. Recently, due
to the economic situation on the world, the role of initiator in group buying is able

competence, courtesy, understanding the customer, and access.
Later, these ten dimensions were improved and reduced to five dimensions:
tangibles, reliability, responsibility, assurance, and empathy (Parasuraman et al.,
1988). Then, a new global measurement for service quality, SERVQUAL was
developed by Parasuraman et al. (1988) basing on those five dimensions. After that,
many researchers use the SERVQUAL scale to measure the service quality not only
in a specific industry but also in various service industries such as hospital, food,
train ticket, etc.
Anyway, SERVQUAL measurement is not a perfect scale in all cases.
Because the SERVQUAL measurement does not include the unique facets of online
service quality as one prior study pointed out, such as customer-to-Web-site
interactions, since this instrument was constructed based mainly on customer-to-
employee interactions. At the beginning, the five dimensions of SERVQUAL were
found to be valid in the traditional service market. However, when some academic
researchers applied the SERVQUAL scale to measure e-service quality, it has been
considered problematic and may not be quite appropriate. The reason is that there
are some differences between e-service and traditional service in some aspects, such
as the absence of sales staff, the absence of traditional tangible element, and self-
service of customers. As a result, the SERVQUAL is not suitable for measuring e-
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service quality, and it is meaningful to renovate SERVQUAL scale into a new
valuable instrument for measuring e-service quality. Below part will review some
online service quality dimensions which are developed from this scale.
3. Online service quality
Parasuraman et al. (2002) defined online service quality as the extent to
which a website facilitates efficient and effective shopping, purchasing, and
delivery. We can recognize that it includes broadly all phases of a customer’s

website including the four dimensions: ease of use, aesthetic design, processing
speed, and interactive responsiveness. Compare with the traditional dimensions of
service quality, Cox and Dale (2001) proposed six new dimensions of online
retailing service quality, including website appearance, communication,
accessibility, credibility, understanding and availability.
As we can recognize, these scales just focus on evaluating web site quality
such as design, usage and performance. It lacks of information about service
attributes completely. In addition, web site quality is just a small part in the service
quality chain of group buying model. Group buying must pay attention to other
attributes to satisfy customers besides web site quality. For example, the four
dimensions of SITEQUAL by Yoo and Donthu (2001) do not capture all aspects of
the buying process, and thus do not provide a comprehensive evaluation of a site
(Parasuraman et al., 2005).
From limitations of measuring online service quality in above analyses, in
2005, it is the first time the meaning of service is comprehensive in a research of
Parasuraman et al. because it contains all aspects of online service, in which pre-
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and post- web site service are described. About the measure of online service
quality, the one used in that research of Parasuraman (2005) named E-S-QUAL
includes all phases of a customer’s interactions with a website. There are four
dimensions of E-S-QUAL: efficiency, fulfillment, system availability and privacy.
In addition, Parasuraman et al. (2005) also developed an e-recovery service quality
scale as long as E-S-QUAL named E-RecS-QUAL as a subscale for problem
resolution with three dimensions: responsiveness, compensation and contact.
From that time, E-S-QUAL and E-RecS-QUAL become an instrument to use
popularly because of their strong effects on customer satisfaction. However,
according to Kim et al. (2006), the compensation dimension in this instrument

satisfaction is an emotional construct. It is the reason that many researchers
suggested service quality is an antecedent of satisfaction. After that, in 2003,
Woldfinbarger and Gilly discovered a positive relationship between overall service
quality and satisfaction in case of fixed web retailing; also, Montoya-Weiss et al.
found out an evidence to prove the relationship between service quality and
satisfaction by analyzing the determinants of online channel preference for a multi-
channel service provider.
One of the targets of research question in this study is that to define how
service quality dimensions affect to customer satisfaction. Yang et al. (2004) has a
study about online service quality dimensions and their relationships with
satisfaction. At the result, it confirms that the most often-cited service quality
dimensions leading to customer satisfaction are: responsiveness, ease of use
(efficiency) and service reliability (fulfillment). Yang and Tsai (2007) also have a
research that measure the affect level of E-S-QUAL scale on customer satisfaction
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and confirmed that the factors representing efficiency, fulfillment and
responsiveness have the strongest effects, followed by contact and then privacy.
Moreover, according to Kim et al. (2006), a website needs to contain many different
browser functionalities although system availability dimension is found to make a
strong impact on customer evaluation, otherwise it may lead to customer frustration
and dissatisfaction. From these points of view, we can extract the summary that
there is relationship between E-S-QUAL scale of online service quality and
customer satisfaction and can build following conceptual hypotheses:
H1a: Efficiency has a positive impact on online customer satisfaction.
H1b: Fulfillment has a positive impact on online customer satisfaction.
H1c: System availability has a positive impact on online customer
satisfaction.

customer does not trust the vendor, customer will possibly be dissatisfied with that
vendor. Deng et al. (2010) & Kim et al. (2009) think that trust will affect to
satisfaction in long term. Hence, we have this hypothesis:
H3: Trust will positively affect customer satisfaction toward group buying
service.
7. Brand and customer satisfaction
Today, brand is the official introduction of the company and the product that
company provides customers. According to Mowen (2001), brand is a promise or a
set of guidelines that reflects the image of a company, it makes customer think of
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what the company does. Brand gives the specific value to bring the company to the
market, therefore it distinguishes the company from others.
Hammond (1999) supposed that branding is a relationship that was built on
understanding and satisfaction. For example, when customers know about a famous
brand of product well, they tend to be satisfied with that product when purchasing in
that group buying site rather than other sites that have other brands of this product.
Therefore, this research proposes one more hypothesis:
H4: Brand of product or service will positively affect customer satisfaction in
group buying service.
8. Research framework
Base on above literature reviews, the relationship between factors affect to
customer satisfaction and customer satisfaction is briefly described in the figure 2.1: The hypotheses of this research include:
H1a: Efficiency positively relates to online customer satisfaction.
H1b: Fulfillment positively relates to online customer satisfaction.
H1c: System availability positively relates to online customer satisfaction.
H1d: Privacy positively relates to online customer satisfaction.
H1e: Responsiveness positively relates to online customer satisfaction.
H1f: Contact positively relates to online customer satisfaction.
H2: Price discount positively relates to online customer satisfaction.
H3: Trust will positively affect customer satisfaction toward group buying
service.
H4: Brand of product or service will positively affect customer satisfaction in
group buying service.

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III. RESEARCH METHODOLOGY
This chapter presents brief description of the research methodology used for
the research. This includes the research process, research measurement, sample
selection methods, data collection methods and data analysis methods.
1. Research process
Due to the underlying study, the researcher has simply chosen quantitative
approach for achieving the purpose of the study. Quantitative research approach is
based on the development of testable hypotheses and theory. Base on idea of
Kenova and Jonnasion (2006), quantitative investigations tend to measure “how
often” or “how much”. Through utilizing this method, the researcher would measure
service quality and the level of customer satisfaction in group buying in Vietnam.

Research problem
Research objective
Research scope
LITERATURE REVIEW
Research model
& hypotheses
Questionnaire
development
RESEARCH DESIGN
Pilot study with face-to-face
interview (n = 10)
Sampling
design
Refine measures &
measurement scale
Refine
questionnaire
Main survey
DATA ANALYSIS
Reliability testing
(Cronbach’s alpha)
Validity
testing
(EFA)
Hypothesis
testing
(regression)
Conclusion and implication