The Effect of Service Quality on Student Loyalty and Student Satisfaction: An Empirical Study of Universities in Vietnam

Abstract

In recent years, there have been several studies on service quality in higher education, however, research on service quality and sustainable activities affecting student loyalty has been largely ignored in previous studies. This paper investigates the role of service quality in creating student loyalty, and how university sustainability practices and student satisfaction mediate the relationship between service quality and student loyalty. The paper draws attention to university sustainability practices and understanding its impact on student satisfaction and loyalty in Vietnamese public universities. A quantitative methodology is explored, and data was collected through an online structured questionnaire. Responses are gathered from 278 students of public universities in Ho Chi Minh City, Vietnam. Structural equation modeling is used to examine the associations between the constructs by using the PLS-SEM approach. The results show that service quality has a significant effect on university sustainability practices, student satisfaction, and student loyalty. In addition, university sustainability practices and student satisfaction also mediate the relationship between service quality and student loyalty. The author's findings may guide the key decision-makers in universities to incorporate service quality and universities' sustainability practices in their strategy and thereby improve student satisfaction and student loyalty.

1. Introduction

Higher education has been considered a service to students. In the 21st century, institutions of higher education hold one of the most important roles in shaping the future of our society. Research indicates that a strong system of higher education is a significant contributor to the country’s ability to compete in the global marketplace and is critical to our economic strength, social well-being, and position as a world leader (Tomlinson, 2017). Thus, student satisfaction becomes central to the assessment of university success (Latif et al., 2021). The ability to provide quality education, facilities, and environment for students greatly affects the survival of higher education institutions.

Successful universities need to take customer satisfaction seriously. However, Chaudhuri and Holbrook (2001) argued that satisfaction is only one factor related to the broader concept of student loyalty. Latif et al. (2021) emphasized that social responsibility is a contributing factor to improving customer loyalty. Besides, previous studies also confirmed the positive impact of corporate social responsibility on customer satisfaction, service quality, and customer loyalty (Srinaruewan et al., 2015). Besides, research on service quality affecting student satisfaction and loyalty, and university image has been carried out (Shurair & Pokharel, 2019). Although there are many studies on service quality and student satisfaction (Chaudhary & Dey, 2021), there is a lack of research on linking it with student perspectives, university sustainability activities, and student loyalty (Ozdemir et al., 2020). Therefore, this study attempts to bridge this gap in the literature, especially in an era where sustainability principles are being closely integrated with university policies and practices (Latif et al., 2021; Chaudhary & Dey, 2021).

Following this introduction, the remainder of this study is structured as follows. Section 2 discusses the literature review and hypothesis development, resulting in the development of a research model and the proposal of hypotheses. Section 3 discusses the research methodology and data. Empirical findings and discussions are presented in Section 4, followed by the conclusions and policy implications in Section 5.

2.Literature Review and Hypothesis Development

2.1.Service Quality and University’s Sustainability Practices

Parasuraman et al. (1985) proposed a concept of the relationship between service quality and customer satisfaction. Service quality is the difference between customers’ expectations and perceptions of services delivered by service firms. Evaluation of service quality and satisfaction is a comparison between what is received and what is expected. Service quality in the field of higher education is a complex and multifaceted concept. There is no consensus on the best method of measuring service quality in the field of higher education. In addition, Annamdevula and Bellamkonda (2016) emphasized that the importance of service quality in the education sector is increasing in terms of educational accountability to stakeholders. Marzo-Navarro et al. (2005) stated that service quality in the education sector is the difference between what a student perceives the actual offering and what they expect to receive. Students appreciate the university’s implementation of innovative educational programs, environmental protection, and their attitude towards employees and society. Besides, Ozdemir et al. (2020) also argued that sustainability practices and service quality in higher education have been independently studied in the literature and that an integrated approach to service quality is needed.

2.2. Service Quality and Student Satisfaction

Jones and Mahmood (2015) argued that customer satisfaction depends on their assessment of the price and quality of the product or service provided. Hence, customers’ service expectations have two levels: desired and adequate. The desired service level is the service the customer hopes to receive. It is a blend of what the customer believes “can be” and “should be.” The adequate service level is that which the customer finds acceptable. Mulyono et al. (2020) asserted that service quality has a direct impact on student satisfaction. In addition, Long et al. (2021) and Annamdevula and Bellamkonda (2016) also showed that service quality (academic facilities, teaching, administrative services, campus infrastructure) is the determining factor of student satisfaction.

2.3. Service Quality and Student Loyalty

Customer loyalty is a measure of a customer’s likeliness to do repeat business with a company or brand. It is the result of customer satisfaction, positive customer experiences, and the overall value of the goods or services a customer receives from a business. Customer loyalty can be seen as the strength of the relationship between an individual’s relative attitude and repeat patronage. The central theme of any organization is based on developing, maintaining, and enhancing customer loyalty to that organization’s products or services (Mulyono, 2020). Similarly, Marzo-Navarro et al. (2005) pointed out that student loyalty also contains a fundamental component and a behavioral component. Studies focusing on student loyalty help maintain and develop long-term relationships with both current and former students (Annamdevula & Bellamkonda, 2016). In addition, loyalty requires developing a solid relationship with students. At the same time, universities will benefit from not only having current students but also the loyalty of former students.

2.4.University Sustainability Practices and Student Satisfaction

Dean et al. (2019) emphasized that universities have promoted the goal of sustainable development through inclusion in their curricula. Examples include experiential learning activities with local communities, or partnerships with sustainability industries. However, Nejati and Nejati (2013) argued that the majority of previous studies have neglected to consider students’ perceptions about the university’s contribution to sustainability. Therefore, the role of sustainability activities of higher education institutions from the student’s point of view needs to be clarified. Universities are increasingly interested in providing students with quality and specialized programs related to sustainable development. Therefore, activities towards sustainable development have gradually spread in the universities (Velazquez et al., 2006). As a result, student satisfaction with the curriculum is increasingly improving (Von Der Heidt & Lamberton, 2011).

2.5.University Sustainability Practices and Student Satisfaction as Mediating Variables

Previous studies have confirmed that sustainability practices have a significant impact on service quality, customer satisfaction, trust, and loyalty (Dam & Dam, 2021; Lubis et al., 2021; Maignan et al., 1999). In addition to assessing the direct impact of sustainability practices on loyalty, Chomvilailuk and Butcher (2014) also showed that satisfaction plays a mediating role in understanding the impact of sustainability practices on customer loyalty. Crowther and Seifi (2013) suggested that students’ evaluations of their institutions will also be influenced by the extent to which universities implement sustainability practices. Chaudhary and Dey (2021) also reveal that university sustainability practices mediate the relationship between service quality and student satisfaction. In addition, Latif et al. (2021) and Vazquez et al. (2015) also point out that it is necessary to consider the impact of sustainability practices on student loyalty.

To address the research objectives, the following hypotheses were proposed (Figure 1).

H1: Service quality positively affects university sustain­ ability practices.

H2: Service quality positively affects student satisfaction.

H3: Service quality positively affects student loyalty.

H4: University sustainability practices positively affect student satisfaction.

H5: University sustainability practices positively affect student loyalty.

H6: Student satisfaction positively affects student loyalty.

H7: University sustainability practices significantly mediates the relationship between service quality and student satisfaction.

H8: University sustainability practices significantly mediates the relationship between service quality and student loyalty.

H9: Student satisfaction significantly mediates the relationship between service quality and student loyalty

H10: Student satisfaction significantly mediates the relationship between university sustainability practices and student loyalty.

H11: University sustainability practices and student satisfaction significantly mediates the relationship between service quality and student loyalty.

Figure 1: Research Model

3. Research Method

3.1. Research Framework

Based on the literature review, a conceptual model between service quality, university sustainability practices, student satisfaction, and student loyalty is developed for this study. The research framework is presented in Figure 1.

3.2. Data Collection

In this study, an online survey of students in ten different public universities in Ho Chi Minh City, Vietnam is conducted. Because of difficulties in accessing participants in universities during the COVID-19 epidemic, convenience sampling is used, Convenience sample is a type of non-probability sampling method where the sample is taken from a group of people easy to contact or to reach (Brown, 2010). Brown (2010) stated data collected by using convenience sampling are comparable to that obtained from a random sample because of nonsystematic variation. The number of samples is accepted because it meets the requirement of the research’s method - which demands a sample size equivalent to five times of the indicators (Hair et al., 2017). This study uses 19 indicators so the required sample is 95 (19 × 5 = 95). Data collection is performed in May 2021. Data was collected from 278 students, of which 132 were males (47%) and 146 were females (53%). The average age was 22.54 years, with a standard deviation of 4.73. Over two-thirds of students (188, 68%) were enrolled in an undergraduate program, while 90 (32%) students were enrolled in a postgraduate program.

3.3. Variables and Measures

This study has four variables, including service quality, university sustainability practices, student satisfaction, and student loyalty. The indicators to calculate those variables are adapted from previous studies. Each item is measured by a 5-point Likert scale - type (1 = strongly disagree to 5 = strongly agree). A 5-point Likert scale is a type of psychometric response scale in which responders specify their level of agreement to a statement typically in five points: (1) Strongly disagree; (2) Disagree; (3) Neither agree nor disagree; (4) Agree; (5) Strongly agree.

Service quality was measured using a five-item scale adapted from Hennig-Thurau et al. (2001). Example items include “University staff takes care to understand my request” and “The behavior of university staff instills confidence in me” University sustainability practices were calculated by using a four-item scale by Chaudhary and Dey (2021). Example items include “Sustainable university is emphasizing sustainability through support services and the sustainable university is reusing campus waste’. Satisfaction was computed by using a six-item scale by Latif et al. (2021). Example items include “My choice of university was a wise decision” and “My program offers good value for money”. Student loyalty was assessed using a four-item scale by Chaudhary and Dey (2021), following Hennig-Thurau et al. (2001). Example items include “I will recommend this university to my friends and family” and “I’d become a member of any alumni organizations at my old university”. The wording of the items from all four scales has been translated into Vietnamese and slightly adjusted to fit the current research context.

The study explores the structural model to examine the hypothesized relationships between the variables (using SmartPLS 3.2.7) (Ringle et al., 2015; Hair et al., 2017).

4. Results

4.1. Measurement Model

All the scales used in this study exceed 0.70, a benchmark proposed by Nunnally (1978) for reliability testing. For all constructs, convergent validity was assessed by using the average variance extracted (AVE) criterion of 0.50 suggested by Fornell and Larcker (1981). The operationalized constructs appear in Table 1, including their factor loading, Cronbach’s alpha, average variance extracted (AVE), and construct reliability values (CR).

Table 1: Constructs’ Factor Loadings, AVE, and Reliability Values

In the measurement model, all the loadings except SQ2, SS4, and USP4 are higher than 0.7. The factor loadings of SQ2, SS4, and USP4 are between 0.6 and 0.7, above the threshold value. Hence, the results retained all the items in the model (Hair et al., 2017). In addition, construct reliability values are greater than 0.7, hence, construct reliability was established. Besides, average variance extracted (AVE) values were also above the threshold value of 0.50.

Moreover, this study used the Heterotrait-Monotrait Ratio (HTMT) of correlation as an estimate of discriminant validity, as presented in Table 2. All values are under the prescribed limit of 0.90 (Henseler et al., 2015).

Table 2: Discriminant Validity using Heterotrait- Monotrait Ratio (HTMT) Figure 2: Structural Model with Bootstrap Values

Next, the structural model estimation through the R² adjusted value is performed to evaluate the predictive ability of the model, the results are shown in Figure 2. Arya et al. (2019) suggested that R² adjusted values greater than 30% are considered good enough in social research. Meanwhile, the R² adjusted value of student loyalty in this study is 65.6%.

Figure 2: Structural Model with Bootstrap Values

Finally, this study conducted bootstrapping to explore the significance level of the direct and mediate effects of the constructs.

4.2. Testing of Hypotheses

Hypotheses H₁, H₂, H₃ indicated that service quality has a positive impact on university sustainability practices, student satisfaction, and student loyalty. As illustrated in Table 3, the effects of these factors have values of 0.327 (p < 0.001), 0.341 (p < 0.001), and 0.465 (p < 0.001), respectively. Besides, university sustainability practices positively impact student satisfaction and student loyalty, supported by H₄ and H₅. Last but not least, student satisfaction has a positive relationship with student loyalty.

Table 3: Structural Model Results

To evaluate the mediating effect of university sustainability practices and student satisfaction in the relationship between service quality and student loyalty, further analyses were performed to confirm the indirect effects. The results are presented in Table 4. In addition, the bootstrap confidence intervals method with 5000 iterations was used to test the significance of the indirect effects.

Table 4: Indirect and Total Effects Analysis
Notes: SQ: Service Quality; USP: University Sustainability Practices; SS: Student Satisfaction; SL: Student Loyalty.

The results indicate the indirect effects of service quality on student loyalty are positive with a value of 0.172 for university sustainability practices and 0.100 for student satisfaction. In addition, student satisfaction also plays mediating role in the relationship between service quality and student loyalty, with a value of 0.079, and the relationship between university sustainability practices and student loyalty, with a value of 0.122. Specifically, university sustainability practices and student satisfaction also mediate the relationship between service quality and student loyalty, with a value of 0.040. Thus, all hypotheses H₇, H₈, H₉, H₁₀, and H₁₁ are supported.

5. Conclusion and Limitation

The main purpose of this study is to investigate relationships between service quality, university sustainability practices, student satisfaction, and student loyalty in public universities in Ho Chi Minh City, Vietnam. The study results show that service quality has a direct effect on, university sustainability practices, student satisfaction, and student loyalty. This result is in line with previous studies (Latif et al., 2021; Chaudhary & Dey, 2021). Student satisfaction and student loyalty are augmented when they perceive that the faculty are knowledgeable, take care of their requests, and instill confidence in students. In addition, higher service quality leads to better implementation of university sustainability practices. Moreover, this study also reveals that the indirect effect of service quality on student loyalty through the university sustainability practices and student satisfaction are positively significant. These findings imply that the implementation of university sustainability practices both directly and indirectly improves student loyalty if it is placed in the university in a way that increases service quality and establishes student levels of satisfaction.

The study has proposed an application model to assess service quality and university sustainability practices and its relationship with student satisfaction and loyalty. The proposed model and observed variables can be used for universities in assessing student satisfaction and loyalty. Hence, universities can build a prestigious brand name, create a good competitive advantage and develop sustainably in the future.

Although the present research provides some insights into the literature of service quality and university sustainability practices and its relationship with student satisfaction and loyalty, it has few limitations. First, convenience sampling and cross-sectional data were analyzed due to limited resources including manpower, financial resources, and time. In follow-up studies, other sampling methods, such as quota sampling or random sampling, and longitudinal research could be adopted. Besides, the respondents in this study are students in public universities in Ho Chi Minh city, Vietnam so the validity of the model cannot be generalized. Further research could look at universities in other regions or compare the differences between public and private universities.