Developing quality of brokerage service at 164821

UNIVERSITE LIBRE DE BRUXELLES NATIONAL ECONOMICS UNIVERSITY Vietnam – French Community of Belgium Master Programmes MASTER IN BUSINESS MANAGEMENT THESIS DEVELOPING QUALITY OF BROKERAGE SERVICE AT VNDIRECT SECURITIES COMPANY Prepared by Vu Thi Anh Thu Hanoi 2009 ACKNOWLEDGEMENT I would like to express utmost gratitude to my tutor, Dr Pham Thi Dinhh at division of Insurance of National Economics University for her advice and guidance during the period of writing this thesis I would also like to thank VNDirect’s employees who provided me all useful information and also supported me during the process My gratitude also goes to all respondents for their time and willingness to participate in this study Finally, my heartfelt thank is especially for my parents and my husband for their motivation and supports during my study at Vietnam – French Community of Belgium Master Programmer Hanoi, March 2009 Vu Thi Anh Thu EXECUTIVE SUMMARY Quality of service has been considered as an important and effective factor to the success of any organization Therefore, all of organizations, particular service organizations must attempt to develop quality of their services The purpose of this thesis is to measure, assess and analysis quality of brokerage service at VNDirect Securities Company by establishing and applying the appropriate measurement tools The theories have been chosen to consider to deal with are service quality, customer service, customer satisfaction, measurement of service quality, conceptual models of service quality The SERVQUAL Model with dimensions was applied to see how customers satisfy with service performance 200 questionnaires with 26 attributes were developed to examine various aspects of service quality for securities brokerage The collected data then analyzed by Microsoft Excel and SPSS Research results indicate that in general quality of brokerage service at VNDirect still not meet the expectation of customers as they range from 3.28 to 3.76, in which Reliability and Empathy dimensions receive the lowest scores and fall into the Scale of “ Nor Dissatisfied; Nor Satisfied” From these weaknesses, recommendations are offered to increase the quality of service and promote customer satisfaction It is suggested that manager should focus on information offered to customers, knowledge of securities brokers, and speed of order processing, specific needs of customers More importantly, an integrated Customer Relationship Management (CRM) should be applied for the development of service quality TABLE OF CONTENT ACKNOWLEDGEMENT i EXECUTIVE SUMMARY .ii TABLE OF CONTENT iii INTRODUCTION 1 Rationalize .1 Research Objectives Scope of the thesis Research Methodology Thesis Structure .2 CHAPTER I: LITERATURE REVIEW I.1 Service and Conceptual Model of Service Quality I.1.1 Introducing service and service quality I.1.2 Service quality model I.1.3 Determinants of service quality .7 I.1.4 Service Quality and Customer Satisfaction .8 I.1.5 The SERVQUAL Model- Measurement of Service Quality I.2 Introducing Concepts of Securities Brokerage Service 11 I.2.1 Definition and Functions .11 I.2.2 Classification of Securities Brokerage Service 12 I.2.3 Introduction of Vietnamese Securities Market 13 CHAPTER II: VNDIRECT AND ITS SECURITIES BROKERAGE SERVICE .16 II.1 Overview of VNDirect Securities Company .16 II.1.1 Company Background 16 II.1.2 Organization 16 II.1.3 Business activities 17 II.2 Overview of Securities Brokerage Service 19 II.2.1 Activities of Securities Brokerage Service 19 II.2.2 Securities Brokerage Service Performance 21 II.2.3 SWOT Analysis of Brokerage Service 26 CHAPTER III: ANALYZING AND EVALUATING CUSTOMER SATISFACTION OF SERVICE QUALITY 29 III.1 Data Collection of the Research 29 III.1.1 Sampling Size 29 III.1.2 Distribution of questionnaire .29 III.1.3 The formulation of questionnaire 30 III.2 Data Analysis from Questionnaires Collected 31 III.2.1 Method of analyzing 31 III.2.2 Analysis and Findings 33 III.3 Conclusion 41 CHAPTER IV: RECOMMENDATIONS FOR DEVELOPING QUALITY OF BROKERAGE SERVICE AT VNDIRECT 43 IV.1 Providing more information to customers 43 IV.2 Training stock brokers knowledge and skills in serving customers 44 IV.3 Continuing to up-grade information technology .44 IV.4 Understanding specific needs of customers .45 IV.5 Applying an integrated Customer Relationship Management (CRM) 46 CONCLUSION .49 REFERENCE 51 APPENDIX .1 Appendix 1: Vietnamese version of questionnaire on brokerage service at VNDirect Appendix 2: English version of questionnaire on bokerage service at VNDirect .4 Appendix 3: Descriptives Statistics .7 INTRODUCTION Rationalize After seven years’ foundation and challenges, the Vietnamese securities market has gained initially encouraging results It is considered as a significant capital source for the economic development of Vietnam Enterprises have been provided more financial instruments for attracting long term capital to promote business and production activities with reasonable fees; investors (individual and organization) have more chances to make full use of their investment capital in a safety and efficient manner Following the operation of Securities market, the introduction of many securities companies has partly met the increasingly demand of investors Among all business activities, Securities brokerage is the fundamental service that all the securities companies offer to the customers However, the mushroom growth of the securities companies leads to a fierce competition among securities companies Accordingly, many attractive offerings have been given to attract customers so they can easily move to other companies regarding the best offers As a matter of fact, service quality is considered one of the most critical factors influencing the company’s business Securities companies should constantly improve its quality of brokerage service to keep existing customers as well as attract new ones That’s why the thesis with title “Developing quality of Securities Brokerage Service at Indirect Securities Company” is chosen The study in this thesis will help to understand customer’s perception of service quality and identify areas for further development Research Objectives This study aims to achieve the following objectives:  First, describing securities brokerage service at VNDirect  Second, understanding customer’s perception of service quality at VNDirect  Evaluating the quality of VNDirect’s customer service basing on the proposed theories  Third, proposing recommendations to develop quality of brokerage service at VNDS Scope of the thesis  Target customers are individual local customers who have had transaction with VNDirect  It focuses only on brokerage service, not other business activities  Questionnaires are conducted in Ha Noi city Research Methodology In this research, both primary data and secondary data methods are used in combination  Secondary data: The information for the thesis will be obtained from the following Sources: Websites (VNDirect, SSC….), articles, company’s reports, online-library, etc…  Primary data: Survey is chosen as the research technique in this study to measure the quality of brokerage service at VNDirect Questionnaires are designed and delivered to customers for their assessment of the quality of brokerage service at VNDirect Securities and also find out the customers’ needs Questionnaires are formulated in accordance with the theoretical framework consisting of the Service Quality Gap and the SERVQUAL dimension Then the data is analyzed with tools of Microsoft excel and software “Statistical Package for Social Sciences” (SPSS) Thesis Structure The thesis consists of chapters: Chapter I: “Literature Review”, this chapter discusses about the theories concerning to service quality, service quality dimensions This chapter also introduces general concepts of securities brokerage service Chapter II: “VNDS and its securities brokerage service”, this chapter gives an overall picture of VNDS- its background, organization and business activities More important, it will help to understand the situation of VNDirect’s brokerage service Chapter III: “Analyzing and Evaluating customer satisfaction on service quality at VNDS”, this chapter is a combination of customer’s survey on VNDirect service quality and the theories in chapter I in order to conduct an analysis using SPSS calculation Chapter IV: “Recommendation for development of securities brokerage service at VNDS”, this chapter generates recommendation basing on findings from chapter These recommendations may help the companies to improve areas regarding service quality CHAPTER I: LITERATURE REVIEW This chapter introduces the theories and models that are related to the researched problem This chapter will give the concepts of service, service quality gap and measurement and concepts of securities brokerage services in order to have an idea about the researched problem I.1 Service and Conceptual Model of Service Quality I.1.1 Introducing service and service quality What is service? Service is behavioral rather than physical entities, and has been described as deeds, performances and effort Some definitions for the service as follows: Service is attitudes, process and functions ( Zeithaml & Bitner, 1996, P.50) Service is an act or activity, necessarily immovable and intangible, suggested by one transaction party to another one that would lead to the ownership of no external object Service products may attach to physical goods or not ( Kotler & Amstrong, 1990, P.809) Services include recognizable and necessarily immovable activities which meet a need and its attachment to good sale or other services is not of necessity (Stanton, 1986) A series of intangible, activities through interactions between customers and service employees or physical resources/goods and service companies which are presented as a solution for customers’ problems ( Gronroos, 1990, P.279) A service is a package of explicit and implicit benefits performed with a supporting facility and using facilitating goods ( Sasser et al, 1978) Many definitions have been proposed for services, but all share the common characteristics as intangibility and immediate consumption Service quality According to Jan Carlzon (2000), Service quality is a matter of knowing your customers, designing service to meet customer’s needs, and finally managing the service production and delivery process to customer Chakrapani C (1998) stressed that ‘There is a difference between customer expectations and what the management delivers Therefore, the perceptions of service served may be different from what expected; as management may fail to deliver what customers want” Service quality perception result from a compression of customer’s expectation with actual service performance and quality evaluations are not made solely on the outcome of a service delivered ( Roslina AB Wahid 2001) In order to improve the quality of a specific service industry, it is necessary to make a comparison between customer’s expectation about a service and their perception of the way the service has been performed of that service industry I.1.2 Service quality model The service quality of a firm is tested at each service that customers receive Customers always compare the perceived service with the expected service If the perceived service falls bellow the expected service, customers will disappointed Parasuraman et al (1985) formulated the “Service Quality Model” that highlights the main requirements for delivering high service quality The model, shown in figure 1, identifies five gaps that cause unsuccessful delivery: Gap 1, consumer expectation- management perception gap: management may have inaccurate perceptions of what customers actually expect It requires the appropriate management processes, market analysis tools and attitude Gap 2, service quality specification gap: There may be an inability on the part of the management to translate customer expectations into service quality specifications This gap relates to aspects of service design Gap 3, service delivery gap: guidelines for service delivery not guarantee high-quality service delivery or performance Reasons for this include lack of sufficient support for the frontline staff, process problems, or frontline/contact staff performance variability Gap 4, external communication gap: customers’ expectations are affected by statements made by company representatives and advertisements Gap 5, perceived service- expected service gap: this gap occurs when the customer misperceives the service quality Word- of- mouth communication Personal needs Past experience