STRUCTURAL EQUATION MODELS OF SERVICE QUALITY,

CUSTOMER SATISFACTION, AND BEHAVIORAL INTENTION

IN SMALL AND MEDIUM CONSTRUCTION PROJECTS

IN THAILAND

By

Thanawat Phangchunun

Abstract

             

The research focuses on structural equation models of service quality, customer satisfaction, and behavioral intentions in small and medium construction projects in Thailand. The main objective is to recommend service provider (considered as contractor) how to improve service quality in order to achieve higher customer satisfaction and behavioral intentions such a word-of-mouth recommendation, repurchase intention, and willingness to pay more. The design for this research is quantitative approach. At initial stage, the measurement items of service quality in small and medium construction project are developed from SERVQUAL and verified by experts who are familiar in construction business with owner perspective. Twenty-three measurement items were remained in order to assess service quality. The questionnaire was developed based on these items. A total of one hundred and thirty-nine respondents completed the questionnaire. Then, exploratory factor analysis (EFA) used to assess validity and reliability construct. Confirm factor analysis (CFA) is used to explain the relationship between service quality, customer satisfaction, and behavioral intentions. The findings presented that there are four dimensions of service quality construct in small and medium construction projects in Thailand which are Reliability, Responsiveness, Assurance, and Tangibles. Further results indicate that the direct effect of service quality on behavioral intentions is not significant. However, its indirect effect seems to be stronger driver for behavioral intentions as customer satisfaction acting a mediating role. Contractor in small and medium construction projects are recommended to focus on dominant of service quality dimensions in order to improve customer satisfaction and acquire positive behavioral intentions.

Executive summary

Rationale of research

This research has been conducted to provide a Model for contractors to meet customer satisfaction.

Objectives of study

To study Service quality factor in construction business and its measurement, Client satisfaction factor in construction business and its measurement and behavior intentions factor in construction business and their measurement.

To develop Structural Equation Modeling (SEM) model which explain the behavior of factors affecting to those latent variables (service quality, client satisfaction, and behavior intentions).

Recommendation on how to improve service quality. In order to achieve customer satisfaction and behavioral intention in small and medium construction projects in Thailand.

Methodology  

In order to accomplish the objectives of this study, it is considered into three main sections; input, process, and output. This study begins with identifying the criteria for measuring service quality, customer satisfaction, and behavioral intentions.

All of them have been obtained from the literature review. Moreover, the basic concept for structural equation modeling was reviewed as well. All of these processes are considered in input stage for this research.

Findings and conclusion

Customer satisfaction is the one criterion for company success in construction business. It can lead the behavior of customer especially repurchase intention. In this study, post behavior of a customer were focused by word-of-mouth recommendation, repurchase intention, and willingness to pay more. Interestingly, customer satisfaction is significantly in order to gain market advantages and survive in the competitive environment. The level of client satisfaction is quite low according to construction industry seems to be high and increasing conflicts and disputes. Consequently, the researcher attempt to discover the factor affecting customer satisfaction and behavioral intention in construction business. One of criteria in customer satisfaction is service quality. However, it is difficult to measure service quality directly because of its characteristics such as intangibility, heterogeneity, and inseparability. Therefore, it is necessary to study how to provide high level of client satisfaction, and develop positive behavior intention by focusing factor affecting service quality. The purpose of this study was conducted to: study service quality, customer satisfaction, and behavioral intention factor as well as their measurement, develop Structural Equation Modeling (SEM) model which explain the behavior of factors affecting to those latent variables (service quality, client satisfaction, and behavior intention), and recommend how to improve service quality in order to achieve customer satisfaction and behavioral intention. 

In order to achieve the objectives of this study, the researcher conducted exploratory factor analysis (EFA) and confirm factor analysis (CFA). The measurement items for assessing service quality were gathered in literature reviews and interviewed the experts. There are 23 measurement items that will be applied in statistical analysis. The service quality scale was done by reliability test as well as factor analysis. According to the results, there are four dimensions for service quality measurement which are Reliability, Responsiveness, and Assurance. Notably, Empathy dimension fail to demonstrate a dominant role in service quality for small and medium construction project in Thailand. Subsequently, a CFA was implemented to confirm the dimensionality of the first order service quality factors (Model A: Measurement model for service quality). As a result, the objective 1 “To study service quality factors and its measurement” has been achieved. Moreover, the study of measurement in customer satisfaction and behavioral intention was disclosed by literature review and experts’ verification. The statistical test was employed in order to attain reliability and validity of the construct. Therefore, the objective 2 and 3 “To study customer satisfaction and behavioural intention factor and their measurement” have been accomplished. By implemented SEM analysis, all models in this study have achieved in model fit. In structural model (Model C) is presented the relationship among service quality gap, customer satisfaction, and behavioral intention. The results prove our hypothesis that service quality gap has negative effect to customer satisfaction.