The role of customer value within the service quality, customer satisfaction and behavioural intentions relationships: an empirical examination in the Indonesian higher education sector

All countries in the world are now moving towards a knowledge-based economy. The performance of the higher education sector of any nation should be of great significance as it influences the nation's competitiveness. With respect to competitiveness, the issue of quality and satisfaction has heightened concerns among higher education circles in Indonesia. Nevertheless, both service quality and satisfaction constructs are not without critiques and questions on the roles that both constructs play. In general services, quality and satisfaction do not always relate to the economic returns. Customers do not always concerns on offerings with the highest quality. Many customers express high satisfaction ratings but still consider to spending elsewhere for different reasons. This has prompted calls for the introduction of a more dynamic construct called 'customer value' to better predict behavioural outcomes and assist competitive advantage. The research gap in this thesis is therefore an empirically testing the integrative model of service quality, customer satisfaction, customer value and behavioural intentions in the higher education sector. The proposed integrative model was empirically examined by collecting data from undergraduate students in the five Universities in Yogyakarta, Indonesia. Exploratory Factor Analysis and Confirmatory Factor Analysis using Partial Least Squares were applied to test the measurement model and structural model proposed in this thesis. To the academic literature, the proposed model provides a comprehensive picture of the relationships among the key constructs (SQ, CS, CV and BI), and therefore allowing to see the relative impacts of subsequent consequential variables. The findings identified the determinants of service quality and customer value specific to higher education, as well as confirm the relationships proposed from the conceptual model. In particular, the findings showed the dominant role of customer value on behavioural intentions, compared to that exerted by service quality and customer satisfaction. Customer value also has a stronger influence on customer satisfaction than service quality. The inclusion of customer value has increased the predictive power in explaining behavioural intentions. The findings provide valuable guidelines for practitioners in this field by assisting them to better understand the determinants and the nature of their relationships, in relation to expected organisational outcomes and enhance competitive advantage of the university. The ultimate contribution of this study would assist universities to provide their best services according to the aspirations of university students at large.