Introduction
Background
The airline industry is a remarkable advancement in transportation, offering efficient domestic and international travel, especially for long distances, as it surpasses cars, buses, trains, and ships in speed However, recent years have seen a surge in customer dissatisfaction, largely attributed to the rise of low-cost airlines Common complaints include subpar service levels, uncomfortable aircraft interiors, lengthy check-in processes, and issues with flight cancellations and delayed refunds.
Tiger Airways, a prominent low-cost airline, launched its operations in Vietnam on January 27, 2005, establishing an office in Hanoi to offer budget-friendly air travel options to Vietnamese customers As a low-cost carrier (LCC), it has effectively dominated the route between Saigon and Singapore In the Vietnamese market, Tiger Airways faces competition from major airlines such as Vietnam Airlines, Singapore Airlines, Garuda Indonesia, Jetstar, and Vietjet Air.
In recent years, the company has faced significant customer dissatisfaction due to poor service, uncomfortable seating, unclean aircraft interiors, and excessive additional costs These complaints have adversely affected the company's image and revenue.
This thesis aims to investigate the factors influencing customer loyalty at Tiger Airways and to propose strategies for enhancing it Additionally, it offers targeted recommendations for improving customer loyalty specifically within the Vietnamese market.
Problem Statement
Due to those reasons above, I decided to choose the topic for my thesis:
“DETERMINANTS OF CUSTOMER’S LOYALTY AT LOW COST AIRLINES - CASE TIGER AIRWAYS VIETNAM”
Based on the above background, in this study the conceptual framework as made in the image below:
Research questions
The global economy continues to face challenges, marked by unstable fuel prices and increasing competition Tiger Airways Vietnam is encountering significant difficulties, particularly with a decline in repeat customers and rising consumer complaints.
OFEN UNIVERSITY MALAYSIA spreading over websites for Tiger Airways customer reviews Most passengers give low grades and display lots of uncomplimentary opinions about Tiger Airways (Skytraxx 1999-2011 & Product review 2011).
After defining the research problem, this thesis is going to follow with research questions:
- What factors influence the customer loyalty and customer satisfaction of Tiger Airways in Vietnam?
- What are suggestions for Tiger Airways to improve its customer loyalty ?
Research objectives
This research aims to identify the key factors influencing customer loyalty towards Tiger Airways in Vietnam By analyzing the study results, the research will offer actionable suggestions to enhance service quality and boost customer satisfaction The study focuses on gathering qualitative insights through direct interviews and online surveys, aiming to uncover the specific reasons behind customer delight or disappointment Both face-to-face interviews and online surveys were employed to collect comprehensive data.
In conclusion, the aim of the thesis is:
• To identify the factors impacts customer satisfaction and customer loyalty in Tiger Airways.
• To provide suggestions for Tiger Airways to increase its customer loyalty through the research.
Research scope
This research will focus on the both local and international passengers, who have already used the service of Tiger Airways.
- All the secondary data related to Tiger Airways will be collected from 2009.
This research will utilize a survey conducted exclusively at Tan Son Nhat Airport, the busiest airport in Vietnam.
#O UM o p en UNiv;r>STv m alavsia number of passengers per day is large; therefore it is easier for author to collect survey and it does not cost much.
The research focuses on customers aged 18 to 55, as this demographic frequently travels and possesses the necessary awareness and understanding of services used.
Literature r e v i e w
Models in Services Industry
The service quality construct was assessed using the framework established by Parasuraman et al (1988), which includes five dimensions: reliability, responsiveness, assurance, empathy, and tangibility Each of these variables was evaluated using a five-point Likert scale ranging from strongly disagree (1) to strongly agree (5).
In 1985, Parasuraman pioneered research on service quality, leading to the development of a valuable tool for businesses to assess service quality through customer surveys This model garnered widespread acclaim from experts and was further refined by focusing on the concept of "perceived quality." Ultimately, perceived quality represents the most objective evaluation of service quality from the customer's perspective.
Ahmad Jaman and Kyryaki Anastasiadou conducted research on the impact of service quality dimensions on customer loyalty, utilizing the SERVQUAL model developed by Parasuraman Their findings, published in the European Journal of Marketing in 2009, explore the direct influence of expertise on customer loyalty and examine how expertise moderates the relationship between customer satisfaction and loyalty.
Perceived Value
According to Martin Ruiz et al (2007), buyers perceive value as a balance between the quality and benefits of a product and the sacrifices made in terms of price This quality/price ratio, referred to as a 'value-for-money' approach (Huber et al., 2007), is favored over more complex models for assessing perceived value The importance of price in evaluating service value is reinforced by Anderson et al (1994), who note that perceived value encompasses both monetary and nonmonetary costs, including time and risk Additionally, Zeithaml (1988) highlights that perceived value is highly subjective, varying among consumers Teboul (1991, cited in Park et al.) further emphasizes that customers believe the price they pay directly influences their expected level of quality.
In 2006, Zeithaml proposed that perceived value is subjective and varies from customer to customer, influencing their expectations of quality This variation is evident in the airline industry, where low-cost carriers focus on providing affordable fares and essential air transportation services, while network carriers offer a broader range of additional services at higher prices Ultimately, perceived value significantly enhances brand image, as customers associate it with the quality of service received.
OEEN.WNiyEMTY.M^lMIA that it is worthy when using services and they will have the positive remark about the relationship with the given brand.
Value in services is a crucial competitive factor that influences purchasing behavior, as highlighted by Zeithaml and Bitner (1996) Perceived value plays a significant role in shaping future intentions, according to Bolton and Drew (1991) Additionally, Blackwell et al (1999) provided empirical evidence demonstrating a strong connection between value and repeat purchase behavior in the pharmaceutical sector.
(2006) confirmed that there is a positive relationship between perceived value and customer satisfaction and between perceived value and loyalty in the airline industry.
According to the discussion above, there are hypotheses proposed:
Hla: Perceived Value has influence on Brand Image
Hlb: Perceived Value has influence on Trust
H ie: Perceived Value has influence on Customer Satisfaction
Hid: Perceived Value has direct influence on Customer Loyalty
Price
Price, defined as the monetary cost customers pay for products or services, plays a crucial role in influencing buying decisions (Zeithaml, 1988) Customers assess the value of what they pay, known as perceived price, which varies based on individual needs and wants (Regina et al., 2009) This perception can significantly impact purchase decisions; for instance, if customers feel they are paying more than the value received, it may deter them from buying (Peng and Wang, 2006) Conversely, positive price perceptions can lead to a higher likelihood of repurchase (Lichtenstein et al., 1993).
At OFEN University Malaysia, it is recognized that price significantly impacts customer loyalty Research indicates that price perception plays a crucial role in shaping customer satisfaction and trust (Oliver, 1997; Peng and Wang, 2006; Cheng et al., 2008; Kim et al., 2008) Customers often switch brands primarily due to pricing issues, such as perceived high prices or unfair pricing practices (Peng and Wang, 2006) To enhance customer satisfaction, service firms must effectively manage price perceptions by implementing attractive pricing strategies, offering a reasonable price mix, and ensuring lower prices without compromising quality.
According to the discussion above, there are hypotheses proposed:
H2a: Price has influence on Trust.
H2b: Price has influence on Brand Image.
H2c: Price has influence on Customer Satisfaction.
H2d: Price has direct influence on Customer Loyalty
Service Quality
Satisfaction and service quality are distinct concepts, despite their frequent interchangeability (Parasuraman et al., 1988) Satisfaction encompasses a broader scope, while service quality specifically evaluates the service dimension According to Ostrowski et al., understanding these differences is crucial for accurate assessment and improvement in customer experiences.
In 1993, it was emphasized that service quality measures must be customer-driven to bridge the gap between managerial perceptions and customer expectations Service quality is integral to brand performance and shapes customers' overall image of the brand Research, including findings by Cronin and Taylor in 1992, has established that quality service directly influences customer satisfaction This is because quality relates to the service provided, while satisfaction is assessed post-service usage Therefore, without aligning service improvements with customer needs, true customer satisfaction cannot be achieved Ultimately, service quality is a crucial determinant of customer satisfaction.
OFEN UNIVHRSTY MALAYSIA #OUM customer's choice (Ostrowski et al., 1993; Taylor & Barker, 1994; Young et al.,
In the airline industry, service quality can be measured through various dimensions, as highlighted by Nadiri et al (2008) An exploratory study by Park et al (2006) identified three key dimensions of airline service quality: reliability and customer service, in-flight service, and convenience and accessibility When an airline brand is perceived to deliver excellent service, it enhances the customer's evaluation of their relationship with the brand, fostering increased confidence and trust in the airline.
1992 also confirmed the exist of the positive relationship between service quality and customer loyalty.
According to the discussion above, there are hypotheses proposed:
H3a: Service Quality has influence on Brand Image
H3b: Service Quality has influence on Trust
H3c: Service Quality has influence on Customer Satisfaction
H3d: Service Quality has direct influence on Customer Loyalty
Brand Image
According to Barich & Kotler (1991), brand image represents the overall perception of a company in the minds of customers, shaped by various evaluations and information, including brand name, design, and product or service diversity In the context of airlines, the brand image reflects passengers' impressions formed through cumulative experiences and multiple interactions with the airline (Keller, 2003; Gronroos).
Research by Zeithaml & Bitner (1996) and Andreassen & Lindestad (1998) indicates that a company's image significantly influences customer selection, particularly when evaluating service attributes is challenging Lovelock (1984, as cited in Andreassen & Lindestad, 1998) asserts that while images can impact customer decisions, their role may be secondary in the overall assessment of service quality.
When choosing an airline, passengers often perceive competing services as nearly identical in terms of performance, price, and availability, particularly for short-haul flights, leading to a more generic service experience The evaluation of an airline's service attributes is challenging before the actual flight, making the airline's image a crucial factor in influencing customer decisions According to Park et al (2006), a strong airline image showcases unique competencies compared to competitors, highlighting the brand's distinctiveness and enhancing its appeal to customers.
A favorable image may contribute to an airline becoming a customer's preferred choice (Andreassen & Lindestad, 1998), therefore is one aspect of customer loyalty.
According to the discussion above, there is a hypothesis proposed:
H4: Brand Image has influence on Customer Loyalty
Trust
Trust is the willingness of customers to rely on a brand they find credible, stemming from their belief in the brand's good intentions and trustworthiness This perception of trust reduces customer concerns about opportunistic behavior during unforeseen circumstances, reinforcing the importance of building a trustworthy brand relationship.
When airline customers perceive their preferred airline as reliable and trustworthy, they are able to make quicker decisions, ultimately saving time and boosting their confidence in their choice Research highlights that trust is a crucial element in relationship marketing, with studies indicating a direct correlation between brand trust and both purchase loyalty and attitudinal loyalty Recent empirical findings further support the significance of brand trust in fostering customer loyalty in the airline industry.
Grayson and Ambler (1999) challenge the direct correlation between trust and customer loyalty Despite the ambiguity surrounding this relationship, Hess and Story (1995) suggest that trust is foundational to any personal relationship, whether between individuals or between consumers and brands This trust is particularly vital in service-based relationships due to the intangible nature of services.
According to the discussion above, there is a hypothesis proposed:
H5: Trust has influence on Customer Loyalty
Customer satisfaction is a crucial determinant of loyalty, as satisfied customers are more likely to repurchase and share positive feedback with others Meeting customer demands is essential, as they are the primary source of revenue and profitability for a company Therefore, prioritizing customer satisfaction can lead to increased loyalty and positive word-of-mouth.
Customer satisfaction and loyalty have a high relevance According to Oliver
Customer satisfaction, as highlighted by Kotler (2000), is the emotional response of individuals stemming from the comparison of a product's actual performance against their expectations When a company's performance exceeds customer expectations, it leads to increased satisfaction and fosters loyalty Thus, evaluating customer satisfaction through product usage is essential for understanding and enhancing customer loyalty.
When performance falls short of expectations, customer satisfaction declines Karma (2004) noted that customers feel content when actual performance exceeds their expectations, while dissatisfaction arises when it falls below Additionally, Pail et al (2009) highlighted that customers may only feel satisfied and are likely to switch to competitors offering better prices or packages.
OFEN UNIVERSITY MALAYSIA customer satisfaction is highlighted in business In general, satisfaction relates to whether the service meets the customer’s need and expectations.
According to Seines (1993), enhancing customer satisfaction is crucial for organizations to boost sales and foster customer loyalty This focus on customer satisfaction has become essential for businesses, particularly in the service industry By effectively measuring and improving customer satisfaction, companies can retain existing customers, leading to increased business effectiveness and growth (Parahoo).
Customer satisfaction plays a crucial role in enhancing long-term performance and fostering customer loyalty, as highlighted by Benner (2009) It is essential for improving production processes and strengthening end-user relationships In the airline sector, the primary goal is to deliver exceptional service and competency According to Rachel & Andy (2010), providing excellent service is vital, and the segment of fully satisfied customers is a key indicator of potential profitability Therefore, businesses must consistently measure consumer satisfaction to determine if clients are truly delighted.
Recent research by Torbica & Stroh (2001) highlights that in the airline industry, customer satisfaction is often assessed too late in the purchasing process, typically after customers have already made their payments To enhance consumer satisfaction, companies must analyze the factors influencing service and product satisfaction and adjust their strategies accordingly to maximize customer contentment.
According to the discussion above, there is a hypothesis proposed:
H6: Customer Satisfaction has influence on Customer Loyalty
Customer loyalty is a well-researched concept with various definitions and interpretations presented by different authors Understanding the nuances of loyalty is essential for businesses aiming to foster long-term relationships with their customers.
Customer loyalty is defined as the strength of the relationship between an individual's attitude towards a brand and their repeated purchases, influenced by social norms and situational factors (Dick & Basu, 1994) Oliver (1999) further describes it as a strong commitment to consistently repurchase a preferred product or service in the future, leading to repeated buying of the same brand, regardless of external influences or marketing strategies that might encourage switching.
8.2 The influences of customer loyalty on firm’s incomes:
Customer loyalty is one o f the interested topics in the marketing researches
In there, the key content focuses on the issue that customer willing to create and maintain the relationship with the service suppliers (Swan, Trawick & Carroll, 1982; Garfein, 1987; Anderson, 1998; Bolton, 1998).
In the business landscape, achieving profitability is a primary goal for companies, with loyal customers serving as a crucial asset in this pursuit Research indicates a strong correlation between customer loyalty and a firm's profitability, as loyal customers contribute to increased revenues through higher purchasing rates, premium pricing, and positive word-of-mouth marketing These customers not only make repeat purchases but also act as advocates, promoting the firm's products to their networks Additionally, fostering customer loyalty can reduce costs, as serving loyal customers is often more economical and allows for extended marketing efforts over their lifetime Ultimately, the financial benefits of customer loyalty encompass increased revenue, lower setup costs, and reduced expenses related to brand recognition.
At OFEN University Malaysia (OUM), repeat purchasing is driven by customers' familiarity with the company's staff and services, leading them to pay a premium (Zeithmal et al., 1996) This strong customer-supplier relationship not only enhances profitability through lower operating costs but also facilitates the acceptance of new marketing initiatives for products and services Additionally, satisfied customers are more likely to overlook minor errors, further solidifying their loyalty to the brand (Zeithmal, 1996).
Normal customers often select products based on personal preference, while loyal customers focus on the brand's history, future prospects, and overall success.
Customers are eager to share their thoughts on services, trusting that the firm will continually improve By actively engaging with these customers, the firm can gather precise and detailed insights to inform future marketing strategies.
Customer loyalty
Customer loyalty is a well-researched concept that has been defined and interpreted in various ways by numerous authors This diversity in definitions highlights the complexity of loyalty and its significance in marketing and business strategies.
Customer loyalty is defined by Dick & Basu (1994) as the strength of the relationship between an individual's attitude and their repeat patronage, influenced by social norms and situational factors Oliver (1999) further elaborates that customer loyalty is a deeply held commitment to consistently repurchase a preferred product or service, leading to repeated buying of the same brand despite potential influences that could prompt switching behavior.
8.2 The influences of customer loyalty on firm’s incomes:
Customer loyalty is one o f the interested topics in the marketing researches
In there, the key content focuses on the issue that customer willing to create and maintain the relationship with the service suppliers (Swan, Trawick & Carroll, 1982; Garfein, 1987; Anderson, 1998; Bolton, 1998).
In the business landscape, achieving profitability is a primary goal for companies, and loyal customers play a crucial role in this success Research indicates a direct correlation between customer loyalty and a firm's profitability, as loyal customers contribute to increased revenues through repeat purchases, willingness to pay higher prices, and positive word-of-mouth marketing These customers not only frequently buy products but also serve as advocates, introducing the brand to their friends and family Additionally, loyal customers help reduce costs, as serving them is less expensive and marketing efforts can be spread over their lifetime Ultimately, the benefits of customer loyalty include increased revenue, lower setup costs, and reduced brand recognition expenses, leading to enhanced profitability for businesses.
OFEN University Malaysia (OUM) benefits from repeat purchasing, as customers are willing to pay more due to their familiarity with the company's staff and services This strong customer-supplier relationship not only enhances profitability through lower operating costs but also facilitates the acceptance of new marketing initiatives for products and services Additionally, loyal customers tend to overlook minor mistakes, making it easier for the company to maintain a positive rapport with them.
Normal customers usually select products based on personal preference, while loyal customers focus on the brand's history, future potential, and overall success.
In 1994, customers were eager to share their thoughts on services, trusting that the firm would continually improve By engaging with these customers, the firm can obtain precise and thorough insights that will enhance their future marketing strategies.
RESEARCH MODEL AND HYPOTHEISIS
Research m odel
This article presents a newly developed model that integrates various factors and their interrelationships, aimed at enhancing understanding of customer loyalty The framework will guide a focused research study to examine how specific factors influence customer loyalty The study identifies three direct influences on customer loyalty: Trust, Brand Image, and Customer Satisfaction, alongside three indirect influences: Price, Perceived Value, and Service Quality.
Hypotheses
HI a: Perceived Value has influence on Brand Image
H lb: Perceived Value has influence on Trust
H ie: Perceived Value has influence on Customer Satisfaction
H id: Perceived Value has direct influence on Customer Loyalty
H2a: Price has influence on Brand Image
H2b: Price has influence on Trust
H2c: Price has influence on Customer Satisfaction
H2d: Price has direct influence on Customer Loyalty
H3a: Service Quality has influence on Brand Image
H3b: Service Quality has influence on Trust
H3c: Service Quality has influence on Customer Satisfaction
H3d: Service Quality has direct influence on Customer Loyalty
H4: Brand Image has influence on Customer Loyalty
H5: Trust has influence on Customer Loyalty
H6: Customer Satisfaction has influence on Customer Loyalty
OFEN UN1VER3TY MALAYSIA #OUM
Methodology
Research Method
Research methodologies can be broadly categorized into two types: quantitative and qualitative According to Bryman & Bell (2003), these methodologies represent distinct research strategies, each with its own theoretical and philosophical foundations Quantitative research focuses on statistical data, often represented by numerical figures, while qualitative research emphasizes non-numerical information, typically presented in the form of transcripts.
Bryman describes qualitative research as a shift towards understanding global communities, emphasizing the portrayal and evaluation of traditions and individual activities from the perspective of the subjects being observed.
Qualitative research, as noted by Bryman (2007), involves gathering a diverse array of observed sources, including case studies, personal experiences, reflective discussions, past interactions, and visual presentations This approach aims to elucidate both the ordinary and challenging moments that hold significance in individuals' lives.
(2001), qualitative research is a research approach that generally highlights numbers relatively in the data collation and testing; and the approach that is applied is inductive and dealt with subjective conclusions.
Quantitative methodology is fundamentally rooted in positivism and aims to establish meaningful connections between correlated variables (Malhotra & Birks, 2007) As noted by Bryman (2001), quantitative research involves the collection of statistical data, providing insights into the relationships between concepts and the overall research objectives.
In this study, the author selected two methodologies, with a primary focus on quantitative research This approach aims to identify relationships between similar elements and analyze specific issues effectively.
OFEN UNIVERSITY MALAYSIA other hand, qualitative is used to collect the secondary data The secondary data is collected from books, articles, previous research and from internet.
Primary data collection
2.1 Online survey as the data collection method:
Primary data was collected through online questionnaires distributed with the assistance of employees at Tan Son Nhat Airport and Tiger Airways' head office in Hanoi The survey was also shared on various online forums and the Tiger Airways Facebook page A 'person to person' approach was employed to maximize respondent participation, utilizing platforms like Yahoo Messenger, Facebook, and MSM for distribution The majority of responses were obtained through personal connections and support from airport and office staff, while online forum postings yielded fewer results Responses were automatically sent to the author's email, where they were meticulously checked to eliminate incomplete or incorrect answers Quantitative data analysis was conducted using SPSS software.
The self-completion questionnaire, a widely used method in business research, is designed to be user-friendly, ensuring that participants can easily follow and respond to its questions (Bryman & Bell, 2003) A key consideration for researchers is whether to utilize open or closed question formats, which significantly impacts the data collected.
Closed questions offer several advantages, including ease of answer processing, improved comparability of responses, and enhanced clarity in demonstrating relationships between variables Therefore, for this research, a closed questionnaire is selected as the preferred method.
#O UM open UNiv;r>STv malavsia
2.2 Questionnaire design and data collection:
The questionnaire consists of two sections, beginning with an introduction that outlines the survey's purpose and background In the first section, participants provide personal information by answering four questions related to their gender, age, frequency of flights with Tiger Airways, and overall use of air transportation The second section is the core of the survey, featuring seven constructs from the research model, comprising a total of 35 statements, with each construct containing five statements A 5-point Likert scale is utilized for responses, ranging from "strongly disagree" (1 point) to "strongly agree" (5 points).
„strongly agree" (5 point) All the statements in this research questionnaire is shown in Appendix A.
A pre-test was conducted to ensure the questionnaire was user-friendly and comprehensible The initial draft was reviewed by three industry experts, including a representative from Tiger Airways, who provided valuable feedback After incorporating their suggestions, the revised questionnaire was tested with 30 frequent air travelers, who assessed the clarity and ease of completion of the statements Based on their comments, the questionnaire was further refined before being finalized and distributed to a wider audience.
Sample size calculation typically involves two methods: one for means and another for proportions (Birchall, 2005-2011) However, this research did not utilize these formulas to determine the number of Tiger Airways customers needed for the survey, as it was not feasible to ascertain the exact number of customers in Vietnam who had flown with the airline Since both sample size formulas require a specific population count, a random selection of 500 individuals from the list of Tiger Airways customers in the Vietnamese market was conducted for the survey.
Reliability and Validity
The statistical instrument SPSS is used to analyze the data After collecting samples from respondents, all complete questionnaire data was input by manual into SPSS.
Critical examination of research methods is essential for assessing their reliability and validity (Finn et al., 2000) Reliability refers to the consistency of results produced by a method (Bryman & Bell, 2003), whereas validity indicates the extent to which a measuring instrument accurately reflects what it is designed to measure.
In this research, the reliability of the data was assessed using the Cronbach's Alpha test According to Hoang Trong and Mong Ngoc C N (2008), a Cronbach's Alpha value exceeding 0.6 indicates acceptable reliability.
Exploratory Factor Analysis (EFA) is a technique employed in validity testing that examines a complete set of interdependent relationships without distinguishing between dependent and independent variables (Paurav Shukla, 2010) This method is utilized in various circumstances to uncover underlying structures within data.
- To identify underlying dimensions, or factors, those explain the correlations among a set of variables.
- To identify a new, smaller, set of uncorrelated variables to replace the original set of correlated variables in subsequence multivariate analysis (regression or discriminant analysis).
- To identify a small set of salient variables from a larger set for use subsequence multivariate analysis.
3.3 Hypothesis tests: iOPEN UNIWÊB3ITYM ALAYSIA #OUM
In order to test the hypothesis, Multivariable linear regression analysis and path analysis have been used.
Linear regression analysis is a statistical method employed to identify relationships between a dependent variable and one or more independent variables (Hoang Trong, Mong Ngoc C N., 2008) This technique helps in understanding how changes in the independent variables affect the dependent variable.
The linear regression analysis is expressed in equation: y = a lx l + a2x2 + + anxn + b y: dependent variable x l, x 2 , , xn: Independent variables b: constant a l, a2, , an: slopes
In this research, regression analysis is utilized to explore the relationships between dependent and independent variables The author will follow a three-step process to apply regression for testing the hypotheses of the research model.
In the first step, we analyze how indirect factors, such as perceived value, price, and service quality, impact direct factors like brand image, trust, and customer satisfaction This involves conducting three tests to assess the relationships among these variables, specifically examining hypotheses H1a, H2a, H3a for brand image, H1b, H2b, H3b for trust, and H1c, H2c, H3c for customer satisfaction.
In Step 2, we analyze how various factors impact the target factor, specifically examining the effects of brand image, trust, and customer satisfaction on customer loyalty This step involves testing the hypotheses H4, H5, and H6 to determine the significance of these influences.
- Step 3: to ensure the existence of the influences of indirect factors (perceived value, price and service quality) on target factor (customer loyalty) through direct
OFEN UNIVERS TV MALAYSIA #OUM factors (Brand image, trust and customer satisfaction), the final regression analysis will be conducted This step tests the hypotheses H id, H2d, H3d.
Path analysis, an extension of regression analysis, is a statistical technique that evaluates the strength of direct and indirect relationships among variables (Lleras, 2005) This research utilizes path analysis to assess how indirect factors—such as perceived value, price, and service quality—interact with direct factors like brand image, trust, and customer satisfaction, ultimately influencing customer loyalty According to De Vaus (2012), the strength of these relationships is detailed in the accompanying table.
0 0 1 - 0 0 9 T riv ial re la tio n sh ip
0 1 0 - 0 2 9 L o w to m o d e ra te re la tio n sh ip
0 7 0 - 0 8 9 V e ry stro n g re la tio n sh ip
> 0 9 0 N e a rly p e rfe c t re la tio n s h ip
Interpreting Strength of Path Coefficients
Chapter 5 - Data analysis and Research results
After collecting samples, they were input into SPSS program and analyzed The results in this part show the description about respondents’ general information.
Frequency Percent Valid Percent Cumulative
Number of flight that respondents made with Tiger Airways
Data analysis and Research results 2 9 1 Sample description
Descriptive statistic
Deviatio n PR1: TG providing reasonable price 335 2,00 5,00 3,8537 ,59396
PR2: Luggage fee is reasonable 335 1,00 5,00 3,3701 ,70520
PR3: Foods and gift in flight has good price
PR4: Ticket policy is suitable with cus level
PR5: TG ticket price is more reasonable than others'
Price descriptive statistic The average mean value in the Table is 3,6 Comparing with maximum value
5, it is a good value It’s mean that, customer thought that the price policy of Tiger
Tiger Airways is perceived as a cost-effective option among airlines, with a high mean value of 4.02 for statement PR5, indicating that many respondents find its ticket prices more reasonable compared to competitors In contrast, statement PR3 received the lowest mean value of 3.10, suggesting that respondents believe the charges for in-flight food and gifts are not justified.
Deviation PV1: Feel comfortable when flying with TG
PV2: TG staffs are responsible
PV3: TG's service is commensurate with your payment
PV4: Fly with TG is better than other transportation
PV5: TG policy is rational 335 1,00 5,00 3,7045 ,6797
Perceived Value descriptive statistic iOPEN UNIWÊB3ITYM ALAYSIA #OUM
The average mean value presented in the table is 3.6818, which is relatively high compared to the average score of 3 This suggests that customers have a positive perception of Tiger Airways' value.
Deviation QLT1: TG staffs has professional attitude
QLT2: Booking and payment are easily and quickly
QLT3: TG supplies Info Clearly 335 1,00 5,00 3,6448 ,61110 QLT4: staff welcome pax enthusiastically
The average mean value of the service quality provided by Tiger Airways is approximately 3.5, indicating that respondents are not particularly impressed, especially with statement 5 (QLT5), which received the lowest average score of 2.9194 Many respondents expressed concerns about the punctuality of Tiger Airways flights, noting frequent delays for various reasons.
OFEN UNIVERS TV MALAYSIA #OUM
IM1: TG is the famous brand 335 1,00 5,00 3,5881 ,67716
IM2: T G , first flight thinking 335 1,00 5,00 2,9851 ,75209 IM3: Easy to recognize TG brand and logo
IM4: TG Ad is attractive 335 1,00 5,00 3,4239 ,77731
IM5: TG was imaged as good quality
The descriptive statistics for the brand image of Tiger Airways reveal an average mean value of 3.4299, indicating that respondents do not hold a favorable impression of the airline's image Notably, the second statement (IM2) received the lowest mean value, suggesting that Tiger Airways is not the primary airline brand that customers consider when planning air travel However, the logo of Tiger Airways is easily recognizable, as reflected in the mean value of 3.9254 for statement IM3.
N Minimu Maximu Mean Std. m m Deviation
OEEN.W NiyEM TY.M ^lM IA #OUM
TRU1: Trust in TG when deciding to fly with
TRU2: TG will develop strongly in long-term
TRU3: TG is complying with it's commitment
TRU4: Trust in the information from TG
TRU5: Flight with TG is your right decision
The mean value of 3.6926, as shown in the table, suggests a strong level of trust among respondents in Tiger Airways, indicating their belief in the airline's potential for long-term growth.
Deviation CS1 : You are satisfy with your decision flying with TG
CS2: You are satisfy with cabin attendants
CS3 : You are satisfy with TG customer service
CS4: You are satisfy with TG staffs at check-in counter
CS5: You are satisfy with TG reply when you have queries
As the result in the above table, the average mean value of Customer Satisfaction factor (3,6054) is a little high when comparing with the average point
Customers generally feel satisfied with the service provided by Tiger Airways, although this satisfaction level is moderate The highest satisfaction is noted in the check-in process, which has a mean value of 3.8597.
Deviation LY1 : Willing to fly with TG in future
LY2: Easy to ignore with
LY3: Willing to introduce TG to friends/families
LY4: Have difficult decision to choose flying with other
LY5: Willing to be TG 335 1,00 5,00 3,6537 ,68743
OFEN UN1VER3TY MALAYSIA #OUM frequent customer
Customer loya ty descriptive statistic
Customer loyalty towards Tiger Airways is indicated by a positive mean value of 3.63, suggesting that many customers intend to continue their relationship with the airline However, this loyalty is not absolute, as evidenced by a medium mean value of 3.16 for statement 4, indicating some reservations among customers.
Reliability tests
Factors Cron bach's Alpha Number of items
The analysis of customer loyalty reveals that most factors exhibit a Cronbach’s Alpha greater than 0.7, indicating that all reliability tests are acceptable and no factors have been rejected.
Validity tests
The validity test was performed twice, encompassing two distinct stages The first stage evaluated three factors: Price, Service Quality, and Perceived Value In the second stage, the focus shifted to Brand Image, Trust, and Customer Satisfaction.
The research model indicates that Price, Perceived Value, and Service Quality significantly influence each other in the first stage, necessitating three regression tests to analyze these relationships effectively.
In the initial round of Exploratory Factor Analysis (EFA), four components were extracted, accounting for a cumulative variance of 59.575% Three items, specifically QLT5, PR2, and PR3, were excluded from the analysis Consequently, 12 items remained for the final round of EFA, as detailed in the tables of results below.
Kaiser-M eyer-O lkin M easure of Sam olinq Adequacy r793
KMO and Barlett’s test for Independent variables The KMO value equal to 0,793 (>0,5) and the Sig=0 ( Cheng, T C E.; Lai, L C F and Yeung, A C L (2008), “The Driving Forces o f Customer Loyalty: A Study of Internet Service Providers in HongKong”,
> Clark, M and Payne, A (1994), “Achieving long-term customer loyalty: a strategic approach", Annual Marketing education group conference, Ulster.
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EVALUATE THE FACTORS INFLUENCING CUSTOMER LOYALTY OF
Now I am conducting a research about customer loyalty of Tiger Airways Please help me complete this questionnaire by choosing a number in each statement below All of your evaluations are very worth for me I am thankful to all of you for help.
3 How many times did you fly with Tiger Airways? a 1-2 times b 3-4 times c 4-5 times d more than 5
4 How many times have you used air transport in a year a