Quality, University Image, Satisfaction and Loyalty

European Journal of Education and Learning, Vol.12, 2012 ISSN(paper)2668-3318 ISSN(online)2668-361X www.BellPress.
org
Quality, University Image, Satisfaction and Loyalty : A Study of a Distance Graduate Study Program
Suciati1 Nur Hidayah2 1. Graduate Study Programs, Universitas Terbuka (Indonesia Open University) 2. Muhammadiyah University, Jakarta, Indonesia
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E-mail of the corresponding author : psuciati@ut.ac.id
Abstract As competitions between universities to attract students become intense, securing student loyalty has become an important issue in higher education. Universitas Terbuka (Indonesia Open University), for 28 years has enjoyed the status as the only distance education institution in Indonesia, however this condition will change with the implementation of a new legislation by the Government 2012, permitting universities to offer e-learning programs, and dual-methods education programs. Competition for students may become an issue to be addressed creatively by UT. Student loyalty is a dynamic phenomenon with many factors playing significant roles. This study explains the effect of studentsperception of program quality, brand image, and student satisfaction on student loyalty. This survey was conducted during 2011, involving 108 graduates of the Graduate Study Program at Universitas Terbuka. The findings demonstrate that student loyalty is influenced by the program quality, brand (the university) image and student satisfaction, individually or simultaneously. Program quality does not have a direct effect on student loyalty, while brand image and student satisfaction have direct effect on loyalty. However, program quality does influence student satisfaction. Keywords: quality, university image, satisfaction, loyalty, graduate study. 1. Introduction Student loyalty is becoming an increasingly important and strategic issue for higher education institutions (Helgesen & Nesset, 2007; Sauer & ODonnell, 2006). Competitions between universities to attract students become intense. Especially with the diminishing budget from the government, universities have to find revenue from students tuition. To achieve this purpose, many universities have actively launched promotiomalefforts to uplift the image of the university and to attract new students. Nevertheles the efforts of recruiting new students should not neglect students who are already in the system. To put it differently, maintaining the loyalty of students in the pipeline is not less important than new students recruitment. Research in the business sector indicates that retaining existing students (customer) and selling additional products (to the same students), is less costly than the acqusition for new recruits (Chu,Tsai, & Ho, 2007; Pendharkar, 2009). As an open and distance education institution, Universitas Terbuka (The Indonesia Open University) has confronted similar challenges at national and global levels. Under the stipulation of the (new government legislation) Education Constitution 2012, which allows and encourages universities in Indonesia to offer study programs in dual modes system and e-learning programs, Universitas Terbuka is nolonger enjoy the status as the only distance education provider in Indonesia. With the availlability of e-learning programs offered by other conventional public and private universities, UT students may at a certain phase of their learning decides to transfer to other universities. Indonesia has been a potential and promising market for universities abroad. In the long run obviously UT will also face competitions with similar educational programs from other countries, Information indicating student unwillingness to re-register or taking other study program of the university, besides reducing the revenues for the university, may also an indication of some problem with the university service.
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European Journal of Education and Learning, Vol.12, 2012 ISSN(paper)2668-3318 ISSN(online)2668-361X www.BellPress.org
Student loyalty has a dynamic nature, subjected to many factors, such as perception of quality (Patric, 2004), brand image (Beckwith & Lehman, 1975) and satisfaction (Hoyt & Howell, 2011) . The influencing factors are termed as the drivers of loyalty (Helgesen & Nesset, 2007). The student perception of the university service quality may influence satisfaction and their loyalty to the university (Helgesen & Nesset, 2007), in the forms of intent to re-register or take a higher level of study program offered by the university. University reputation as an overall attitude held by students also has a positive impact on customer satisfaction (Johnson et al., 2001; Oliver, 1997). Students hold a certain perception about the university, whether the university has a good reputation or not. Student perception of reputation is very important to attract and retain students (Standifird, 2005). Based on this schema of thinking, this study aims to explore the dynamics of student loyalty, in relation to program quality, the brand image of the institution, and student satisfaction.
2. Literature Review Studies of loyalty and customer satisfaction for goods and service is abundant (Zeithaml, Bitner & Gremler, 2006). Structural models to explore customer satisfaction, loyalty and related antecedents, such as product or service quality and brand image have been extensively used. Some principles derived from these studies will benefit the efforts to market education, and in exploring whether the principles and findings in the business sector are transferable to education domain, or on the contrary, there is a different dynamics in the education sector compared to goods and service in business. In education institution students are the major customers, however it should be understood that other stakeholders such as parents, employers, and the government, also constitute education customers (Marzo-Navarro, Pedraja-Iglesias, & Rivera-Torres, 2005). In this study students become the source of data and information. 2.1. Program Quality Quality is characterized as an overall customer cognitive judgement about the excellence of a product or service across several areas, such as performance, courtesy, reliability, responsiveness, etc. (Petric, 2004; Parasuraman, Zeithaml and Berry,1988). Drawing from Parasuraman domains of quality, this study uses the concept of program quality to include the dimensions of product and service. The student perception of the program quality will likely influence their satisfaction toward the program itself and the university in general, and ultimately it will determine their decision whether to discontinue or re-purchase the service. If they decide to continue using the service, they may plan to reregister for the following semester, take another program, or attend a higher level program in the university. Program quality includes indicators related to the learning service typical of distance education program, incorporating Parasuramans SERVQUAL factors of empathy, assurance, responsiveness and reliability. In a distance education system, it is imperative for students to have good learning skills and persistence to study independently and resourcefully. However, these qualities alone may not be sufficient for effective learning, since students will also need supportive and condusive learning environment. In this respects, program quality will incorporate students perception of the learning material, the overall learning experience in face-to-face and online tutorials, assessments, the thesis advising, and thesis defence. 2.2. Brand image Brand identity for a university refers to how the institution wants to be, and is perceived by prospective students, the existing students, alumni, legislators, and the public (Lawlor, 1998). To enlarge scope and reach the targeted students, many universities intentionally develop a unique image. The Indonesia Open University builds an image by introducing a motto making higher education
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open to all,which is appealing to prospective students who lack the opportunity to study due to work responsibilities or distance . Brand is also understood as a reputation, the principles and goals the organization aspiring for, and as what an individual may expect when using the services of the organization (MacMillan, Money, Downing, & Hillenbrand, 2005). The students perception of university reputation is very important to attract and retain students (Standifird, 2005). 2.3. Student Satisfaction Various definitions of customer satisfaction essentially refer to the judgement of the service performance as pleasurable or disappointing to ones expectation (Kotler & Keller, 2006; Oliver, 1997). In other words, customer satisfaction represents a summary of affective state or a subjective judgement based on the customers experiences compared with expectations. In education domain, Elliot and Healy (2001) proposed that student satisfaction is an attitude that results from the evaluation of the students experiences regarding educational services. 2.4. Student Loyalty Customer loyalty in understood in different ways (Lam, Shankar, Erramilli, & Murthy, 2004; Oliver, 1997). As an example,Oliver defines customer loyalty as a deeply held commitment to rebuy or repatronize a preferred product or service consistently in the future, despite the fact that situational influences and marketing efforts having the potential to cause switching behavior (Oliver, 1997, p. 392). whereas Lam et al. (2004) see it as a buyers overall attachment or deep commitment to a product, service, brand, or organization (p. 294). An educational institution benefits from having loyal students not only when students are still within the study program, but also long after they complete the program. In other words, student loyalty refers to loyalty both during and after a students period of study at an educational institution (Hennig-Thurau et al., 2001). 3. Methods
The study aims to test the causal relationship between perceived program quality, university image, and student loyalty. This study employs a two-step confirmatory analysis to test the hypotheses of the theoretical model shown in Figure 1. Path analysis will be used to test the causal relationship of the variables. The data was collected using questionnaires incorporating 58 item measures of 4 variables. A four-point Likert scale was used, with a range of 1 as strongly disagree, and 4 as strongly agree. The questions were developed based on their experience of learning in a distance education institution. One hundred and eight students graduating from graduate programs at Universitas Terbuka within the period of 2011 returned the questionnaires. Seventy -six percent of the students are male. The means age of the respondent is 42, with a range of 29 to 60. Measures for variables in the questionnaire include questions based on the indicators. The program quality incorporates statements such as tutors are competent to conduct online tutorials, face-to-face tutorials are conducted according to the academic schedule, tutors respond promptly to students queries and difficulties, the assessment scheme is fair, the (printed) learning material has sufficient depth of subtance, the learning material is relevant to real problems, and the thesis advisors gives feedback not more than a week. The university image is measured by questions such as UT has a distinctive characteristic compared to conventional universities, UT is well-known by the society, I am proud to be an alumnae of UT, and UT trains students to be independent and self-initiated learners. Satisfaction is measured by statements such as, I am satisfied with the quality of the tutors, I am satisfied that I reap more benefit compared to the cost, and I am satisfied that learning at UT broaden my perspectives as learners. The loyalty indicators include statements such as, I chose to study at UT with a belief it will help me to reach my goal, If I am offered an option to study
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by several universities, I will choose UT, I prefer to study at UT because it produces high independency to work and learn, I often share my good experience of learning at UT with my friends, I recommend my friends to study at UT, If I have the means I will study for a higher degree at UT. The reliability of the instrument is reported in Table 1. Table 1. Summary of Alpha and Average Means Variable Learning Service Quality Brand Image Satisfaction Loyalty Number of Items 16 Alpha 0.83 Average Mean 3.2
13 14 15
0.83 0.89 0.97
3.2 3.2 3.3
4. Findings 4.1. Mean scores of variables and implications Table 2 reporting the descriptive data of the variables. The means of the variable varies due also to the number of question items. Based on the number of questions for each variable, the maximum expected score for service quality is 64, university image 52, satisfaction 56, and loyalty 60. Table 2. Statistics of the variables Minimu m 34.00 28.00 32.00 30.00 Maximu m 64.00 52.00 56.00 60.00 Std. Deviatio Varianc n e 5.50 30.248 5.01 5.30 6.43 25.193 28.072 41.453
Program Quality University Image Satisfaction Loyalty Valid N (list wise)
N 108 108 108 108 108
Mean 50.435 2 41.175 9 44.722 2 48.620 4
The distance between the means and the maximum expected score can be visually depicted as follows. 4.2. Mean score for program quality The mean score for program quality is included in agood category. However the mean score is still far from the category very good as depicted by the following figure.
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50.4 Good Very Good 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 Figure1. The range of score for category good and very good for service quality The range of score for good and very good category is 48 to 64. The mean score 50.4 is closer to the low end of the scale than the high end of the scale. There are 13.7 points difference to very good compared to 1.6 difference to 48 as the lowest score for good category. 4.3. Mean score for the university image Mean score for university image is 41.18, which indicates a positive judgement. Strong 41.18 Very Strong
37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 Figure 2. The range of score for good and very good category for university image. The range of score for good and very good category is 39 to 52. The mean score 41.18 is closer to the low end of the scale than the high end of the scale. There are 10.82 points difference to very good compared to 2.18 difference to 39 as the lowest score for good category. 4.4. Mean score for satisfaction The mean score for satisfaction is 44.72 which falls within the satisfied category. Satisfied 42 44.72 43 44 45 46 47 48 49 50 Very Satisfied 51 52 53 54 55 56
Figure 3. The range of score for good and very good category for student satisfaction The range of quality score for good and very good category is 42 to 56. The mean score 44.72 is closer to the low end of the scale than the high end of the scale. There are 11.28 points difference to very good compared to 2.72 difference to 42 as the lowest score for good category.
4.5. Mean score for student loyalty The mean score for student loyalty is 48.62, which is closer to the low end of the scale than the high end of the scale. There is 11.38 points difference to very loyal compared to 2.62 difference to 45 as the lowest score for loyal category. This score implies the loyalty level of students is far from being convincing.
Loyal 46 47
48.62 48 495 50 51 52 53 54 55 56 57
Very Loyal 58 59 60
Figure 4. The range of score for loyal and very loyal category for student satisfaction
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Based on the size of mean scores, all variables are still far from the optimum score. The scores represent students perception and expectation . Based on the proportion of distance from the mean score to the optimum score, program quality shows the farthest distance, which is 85 %, compared to the university image (83%), satisfaction (80%), and loyalty (75%). Program quality seems to be the first pick for improvement.
5. Model analysis Analysis for the path model is conducted in several steps; (1) based on correlation matrix suggests a revised a causal model, (2) conduct levels of multiple regression analysis for the full model, and (3) analyze the path model. Table 3 Correlation Matrix for Variable Variable Program quality (X1) University image (Y1) Satisfaction (Y2) Loyalty (Z) Note ** p< 0.001 n = 108 Table 3 shows that the correlations between variables are positive and significant, even though the strength of the correlations, which are less than .70, are moderate. 5.1. Path Model Program quality (X1) 1 .619** .683** .417** University Image (Y1) .619** 1 .657** .575** Satisfaction (Y2) .683** .657** 1 .622** Loyalty (Z) .417** .575** .622** 1
Program Quality (X1)
Satisfaction (Y2)
Loyalty (Z)
University Image (Y1)
Figure 5. Path Model To determine the direct, indirect effect, and the total effect of program quality (X1), University image (Y1), and Student satisfaction (Y2), on Loyalty, path analysis is employed using the following hypothesis.
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Ho: pi = 0 (there is no direct influence of exogenous variables on endogenous variables). HA: pi > 0 (there is a direct effect of exogenous variables on endogenous variables). To test the hypotheses using path analysis requires three equations as follows. 1. Y1 = p1X1 + e1 2. Y2 = p2X1 + p3Y1 + e2 3. Z = p5X1 + p6Y1 + p4Y2 + e3 5.2. Effect of program quality on university image Table 4 Model Summary R Adjusted R Square Square 1 .619a .384 .378 a. Predictors: (Constant), program quality Model R Std. Error of the Estimate 3.95881
Equation 1, Y1 = p1X1 + e1, based on the Model Summary of Table 4, R Square = 0.378, then e1 = (1-0.387) = 0.783, which means that 78.3 % of the university image variable cannot be predicted by program quality. Table 5 Coefficients of Program quality on University image Coefficients Model Unstandardized Coefficients B Std. Error 1 (Constant) 12.66 3.530 3 Program quality .565 .070 a. Dependent Variable: University image Standardized Coefficients Beta t Sig.
3.587 .619 8.124
.001 .000
Table 5 shows that Standardized Beta Coefficients = 0.619 is p1 or path coefficients in equation 1 = b1, that is the value of the direct influence of program quality on the university image. Then equation 1 becomes Y1 = 0.619 X1 + e1. 5.3. Effect analysis for Program quality and university image on satisfaction Table 6 Model Summary Model R Adjusted R Std. Error of Square Square the Estimate 1 .745a .555 .547 3.56645 a. Predictors: (Constant), university image, quality
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From Table 6 known R Square 0.555, then e2 = (1-0.555) = 0.667, meaning 66.7% of student satisfaction is not accounted for program quality and university image. Table 7 F Test Results Sum of df Mean Squares Square 1 Regression 1668.113 2 834.056 Residual 1335.554 105 12.720 Total 3003.667 107 a. Predictors: (Constant), program quality, university image b. Dependent Variable: student satisfaction ANOVAb Model F 65.573 Sig. .000a
Program quality and university image has a positive and significant simultaneous effect on student satisfaction, as shown in Table 7.
Table 7 Coefficients for program quality, university image on student satisfaction Coefficientsa Model 1
(Constant) Program quality University .400 .088 image a. Dependent Variable: Student satisfaction
Unstandardized Coefficients B Std. Error 6.460 3.368 .432 .080
Standardized Coefficients Beta .448 .379
t 1.918 5.407 4.575
Sig. .058 .000 .000
Equation 2, Y2 = p2X1 + p3Y1 + e2, p2 = 0.448 and p3 = 0.379. The path coefficients indicated by the Standardized Beta Coefficients. Thus, equation 2 becomes Y2 = 0.448X1 + 0.379Y1+ e2.
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5.4. Effect of program quality, university image and satisfaction on Loyalty Table 9 Model Summary Adjusted Std. Error of R the Estimate Square 1 .665a .443 .426 4.87578 a. Predictors: (Constant), program quality, university image, and satisfaction Model R R Square
As shown in Table 9, R Square = 0.443, thus e3 = (1- 0.443) = 0.746, meaning that 74.6 % of student loyalty is not accounted for program quality, university image and satisfaction. Table 10 F test results for Program quality, University image, Student Satisfaction and Loyalty Sum of df Mean F Sig. Squares Square 1 Regression 1963.018 3 654.339 27.524 .000a Residual 2472.417 104 23.773 Total 4435.435 107 a. Predictors: (Constant), program quality, university image, and satisfaction, b. Dependent Variable: student loyalty Table 13 shows that the results of test F = 27.524 > 4, 0000, and the probability is <0.05, which means program quality, university image, and student satisfaction have a positive and significant simultaneously effect on Student loyalty of UTs Graduate Program. Table 11 Coefficients for program quality, university image and satisfaction on student loyalty Coefficientsa Model 1 Unstandardized Coefficients B Std. Error 11.804 4.684 -.140 .123 .420 .131 .133 Standardized Coefficients Beta -.119 .328 .489 t 2.520 -1.131 3.207 4.450 Sig. .013 .261 .002 .000 ANOVAb Model
(Constant) Program quality University image Satisfaction .594 a. Dependent Variable: Loyalty
Based on the coefficients of Table 11, Equation 3, Z = p5X1 + p6Y1 + p4Y2 + e3 become Z = - 0.119 X1 + 0.328 Y1 + 0.489 Y2 + e3.
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5.5. Summary of analysis The previous equation analysis can be summarized as follows. 1. Y1 = 0.619 X1 + e1; e1 = 0.783 2. Y2 = 0.448X1 + 0.379Y1+ e2; e2 = 0.667 3. Z = - 0.119 X1 + 0.328 Y1 + 0.489 Y2 + e3; e3 = 0.746 Based on the coefficients the path model can be depicted as Figure 6.
Program quality 0.667
(X1)
e2
0.746 p2=0.448*** p5= - 0.119
e3
Loyalty (Z)
p1=0.619*** Satisfaction (Y2) p4=0.489*** p6=0.328**
0.783
p3=0.379 *** University Image (Y1)
e1
Figure 6. Path Model The path model displays direct and indirect effect through intervening variables Y1 and Y2. The size of indirect effects through intervening variables is the multiplication of direct influence to and from intervening variables. Indirect effect of X1 to Y2 via Y1 = p1x p3. Indirect effect of X1 into Z via Y1 = p1x p6 and trough Y2 = p2 x p4, and the indirect effect of Y1 to Z via Y2 = p3 x p4. The total effect can be determined by adding the direct and indirect effects. The result of the multiplication on direct effects and indirect effects, and the sum of effects is in Table 12. Table 12 Direct and Indirect influence between the variables Variables X1 Y1 X1 Y2 Y1 Y2 X1 Z Y2 Z Y1 - Z Direct Effects p1 .619 p2 .448 p3 .379 p5 .-119 p4 .489 p6 .328 indirect effects through variable (Y1) (Y1) (Y2) .235 .203 .185 (Y2) Total Effects .683 .541 .513
.219
6. Discussion
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It is interesting to note that in this research program quality does not influence student loyalty (p5 = 0.119, p > 0.05). Research finding examining the relationship between quality and loyalty varies, even in contradiction. The finding of this research supports the conclusion of Cronin and Taylor (1992) that quality did not appear to have a significant (positive) effect on repurchase intention, which is an indicator of loyalty, eventhough (service) quality is an antecedent of satisfaction. The measures of quality in this research maybe not sensitive and accurate enough to capture program quality nature, since the instrument for data collection is based on the subjective perception of the alumnae. Cronin suggested to use the performance-based measure of quality to better measure the quality construct. On the other hand, Boulding et al.(1993) conclude there is a positive effect of quality on repurchase intention and willingness to recommend. Program quality appears to have a significant effect on the university image. The program and service quality experienced by students obviously effect the student perception of the image projected by the university. The Indonesia Open University holds an image as the one and only university in Indonesia which has saved thousands of citizens from inability to pursue higher education, by employing flexible learning modus. Alumnae often emphatically express appreciation for the opportunity to study at UT. And yet this savior image still needs to be complemented by a reputation as a university which offers good program and high service quality. In the graduate study context it is in the forms of smooth processing of academic information needed by students, timely and quality interaction in tutorials and thesis advising, etc. Program quality and brand image directly influence student satisfaction. This findings supported other research on satisfaction. Satisfaction is basically created by student evaluation on their learning experience, whether the university delivers its promises in terms of program implementation, and the promise embedded in the image of the university as producer of self-initiative and independent lifelong learners. Satisfaction and university image have direct influence on loyalty (p4 = 0.489, p6 = 0.328). This finding supports the currently held belief and findings of other research ((Standifird, 2005; Brown & Mazzarol). This relationship is crucial. Customer satisfaction is a prerequisite for customer loyalty. Satisfied customer means good promotion, since they willingly campaign for the university through word of mouth to the benefit of the university. Conversely, beware of dissatisfied customers. They may express their disappointment not only to the university, but also to prospective students and society at large, to the detriment of the university. In the marketing theory, quality of services is very influential on the strength of the brand image of the service provider. Likewise, the quality of service is very influential on customer satisfaction. If the service is bad, then the customer will be disappointed and will consequently move to a competitor. Marketing management principles can be applied to marketing education programs with adjustments in accordance with the characteristics of the institution. Afterall, education is a service industry. Therefore, employing principles of marketing and service management of the business world, such as strategy to improve service quality, to build a strong brand image, to bring satisfaction to the customers and to build customer loyalty , will be very applicable to attract and retain students.
7. Conclusion Student loyalty strategically determines university sustainability. This study confirms the relationship of drivers of loyalty, that: a). Student loyalty is influenced by the program quality, the university image, and student satisfaction; and b). Student loyalty is directly influenced by university image and student satisfaction. As a consequence, the graduate program of will have to accelerate efforts to improve the quality of the program and the service to students. In any opportunity, the university need
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to work for strengthening the image and reputation of the university, making the students proud and confidence with the university. Without any doubt, the main focus for educational institutions is academic quality, but we can always learn from Shattock (2004: ix) that Successful universities are successful primarily because of their teaching and research, not because of their management, but good management can over time provide the conditions in which teaching and research can flourish, .... just as poor management can undermine teaching and research and precipitate institutional decline. And we may add that good management of program quality, the university image and student satisfaction will lead to student loyalty , which mean sustainability and growth.
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European Journal of Education and Learning, Vol.12, 2012 ISSN(paper)2668-3318 ISSN(online)2668-361X www.BellPress.

E-mail of the corresponding author : psuciati@ut.ac.id

0.83 0.89 0.97

3.2 3.2 3.3

Program Quality University Image Satisfaction Loyalty Valid N (list wise)

N 108 108 108 108 108

Mean 50.435 2 41.175 9 44.722 2 48.620 4

Program Quality (X1)

University Image (Y1)

3.587 .619 8.124

Unstandardized Coefficients B Std. Error 6.460 3.368 .432 .080

Standardized Coefficients Beta .448 .379

t 1.918 5.407 4.575

Sig. .058 .000 .000

p1=0.619* Satisfaction (Y2) p4=0.489* p6=0.328**

p3=0.379 *** University Image (Y1)

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