(Luận văn) determinants of customer satisfaction in the personal loan service

t to MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY ng hi ep w n lo ad ju y th yi HOANG THI THANH THANH pl n ua al DETERMINANTS OF CUSTOMER SATISFACTION IN THE PERSONAL LOAN SERVICE: n va ll fu A STUDY OF PUBLIC AND PRIVATE BANKING SECTORS IN HO CHI MINH CITY oi m at nh MASTER’S THESIS z z k jm ht vb In Business Administration Ology Code: 60.34.01.02 om l.c gm Supervisor Associate Professor NGUYEN DINH THO an Lu n va ey t re Ho Chi Minh City, 2012 ACKNOWLEGEMENT t to ng hi This research project would not have been possible without the support ep of many people Firstly I would like to express my heartfelt gratitude and deepest appreciation to my supervisor, Associate Professor Nguyen Dinh Tho w n for his precious guidance, share experience, ceaseless encouragement, and lo ad valuable suggestions throughout the course of my research ju y th My thanks would also go to all of my classmates, my colleagues, yi pl especially my “old pals”, Ms Nguyen Thi Phuong Thao and Ms Le Thi Nhu al n ua Huyen for all of their friendship and encouragement va n I also wish to thank my friends in Agribank, ACBank, Sacombank and fu ll Eximbank for their great support My thanks would also go to the respondents, m oi without them, my thesis could not have been done at nh z Finally, I would like to express my deepest gratitude and honor to my z ht vb dear parents for not only the love they devote to me but also for the time I took k jm from them which should have been my devotion to them in their aged time om l.c gm an Lu n va ey t re ABSTRACT t to ng hi This study investigates the main factors of the personal loan service affecting ep customer satisfaction between public and private banks in Ho Chi Minh city Data analysis over a few years reveals that bank‟s performance may be evaluated in w n relation to a set of satisfaction dimensions to indicate the strong and the weak points lo ad of a business According to the results, customer satisfaction is positively related to ju y th the service An interesting finding is that five components of service quality (tangibility, reliability, responsiveness, assurance, and empathy) have a positive and yi pl significant impact on customer satisfaction, which consists of a previous study of al ua Parasuraman (1991) On the other hand, brand image is an important determinant in n relation with customer satisfaction that is measured by Akviran (1994) The va n different weights of customer expectation, perceived quality, and perceived value fu ll have implications for bank managers to use them as a reference source for customer m oi satisfaction strategy The research also provides a modified model of customer nh satisfaction to determine the critical personal loan service dimensions in public and at z private banks in Ho Chi Minh city z k jm ht vb om l.c gm an Lu n va ey t re CONTENTS t to ng hi ACKNOWLEGEMENT .1 ep ABSTRACT CONTENTS w n LIST OF TABLES lo ad LIST OF FIGURES ju y th CHAPTER 1: INTRODUCTION .8 1.1 BACKGROUND OF THE STUDY .8 yi pl 1.1.1 Vietnamese banking sector al ua 1.1.2 The personal loan service n 1.1.3 Customer satisfaction in Vietnam 11 va n 1.2 RATIONALE OF THE RESEARCH 11 fu ll 1.3 STATEMENT OF THE PROBLEM .12 m oi 1.4 RESEARCH OBJECTIVE .13 nh 1.5 SCOPE OF THE RESEARCH .13 at z 1.6 RESEARCH METHODOLOGY 14 z ht vb 1.6.1 Secondary data 14 jm 1.6.2 Primary data .14 k 1.7 THE STRUCTURE OF THE RESEARCH 14 gm CHAPTER 2: LITERATURE REVIEW 16 l.c 2.1 INTRODUCTION 16 om 2.2 CUSTOMER SATISFACTION .16 an Lu 2.3 DETERMINANTS OF CUSTOMER SATISFACTION 17 2.5.2 Customer expectation 19 ey 2.5.1 Brand image .18 t re 2.5 HYPOTHESES AND MODEL 18 n 18 va 2.4 CUSTOMER SATISFACTION WITH THE PERSONAL LOAN SERVICE 2.5.3 Perceived quality .20 t to 2.5.4 Perceived value 21 ng 2.6 CONCLUSION 23 hi ep CHAPTER 3: RESEARCH DESIGN .24 3.1 INTRODUCTION 24 w n 3.2 RESEARCH DESIGN 24 lo ad 3.3 MEASUREMENT SCALE 27 y th 3.3.1 Introduction 27 ju 3.3.2 Operation of measures .27 yi pl 3.3.2.1 Scale to measure brand image 27 ua al 3.3.2.2 Scale to measure customer expectation 28 n 3.3.2.3 Scale to measure perceived quality 29 va n 3.3.2.4 Scale to measure perceived value .30 fu ll 3.4 PRILIMINARY RESEARCH 31 m oi 3.5 MAIN RESEARCH .32 at nh 3.5.1 Sample design 32 3.5.1.1 Brand selection 32 z z 3.5.1.2 Sampling 33 vb jm ht 3.5.1.3 Sample size 34 3.5.2 Survey method 35 k l.c gm 3.6 CONCLUSION 35 CHAPTER 4: RESEARCH RESULTS 37 om 4.1 INTRODUCTION 37 an Lu 4.2 SAMPLE CHARACTERISTICS 37 4.2.1 Final sample .37 ey t re 4.3.1 Reliability evaluation through Cronbach‟s Alpha 43 n 4.3 DATA ANALYSIS 42 va 4.2.2 Characteristics of sample 38 4.3.2 Evaluation the measurement scale by using Exploratory Factor Analysis t to (EFA) 46 ng 4.3.2.1 Some rules in EFA test .46 hi ep 4.3.2.2 EFA for determinants of customer satisfaction 46 4.3.2.3 EFA for customer satisfaction 48 w n 4.3.3 Modeling Testing .48 lo ad 4.3.3.1 Correlation coefficient analysis 48 y th 4.3.3.2 Regression analysis 49 ju 4.3.3.2.1 Multiple regression assumptions 49 yi pl 4.3.3.2.2 Regression model .50 ua al 4.4 SUMMARY 56 n CHAPTER 5: CONCLUSIONS AND IMPLICATIONS 57 va n 5.1 INTRODUCTION 57 fu ll 5.2 CONCLUSIONS FROM THE RESEARCH QUESTIONS 57 m oi 5.3 DICUSSIONS OF THE RESEARCH FINDINGS 59 at nh 5.4 CONTRIBUTIONS 61 5.4.1 Theoretical contribution 61 z z 5.4.2 Methodological contribution 63 vb jm ht 5.5 MANAGERIAL IMPLICATIONS OF THE RESEARCH 64 5.5.1 Managerial implications for public banks .64 k l.c gm 5.5.2 Managerial implications for private banks 65 5.6 LIMITATIONS OF THE RESEARCH AND FUTURE RESEARCH 66 om 5.7 CONCLUSION 67 an Lu APPENDIX 1: GROUP DISCUSSION 74 APPENDIX 2: QUESTIONNAIRE 79 ey t re APPENDIX 5: MUPTIPLE REGRESSION ASSUMPTIONS 90 n APPENDIX 4: FACTOR ANALYSIS RESULT .87 va APPENDIX 3: CRONBACH‟S ALPHA ANALYSIS RESULT .83 LIST OF TABLES t to ng hi Table 3.1 Measures of brand image 28 ep Table 3.2 Measures of customer expectation 28 Table 3.3 Measures of perceived quality 29 w n Table 3.4 Measures of perceived value 30 lo ad Table 3.5 Measures of customer satisfaction 30 ju y th Table 4.1 Sample characteristics of public banks 39 yi Table 4.2 Sample characteristics of private banks 41 pl Table 4.3 Reliability test of the personal loan service and customer satisfaction in al ua public and private banks 43 n Table 4.4 Final reliability test of the personal loan service and customer satisfaction va n in public and private banks .45 fu ll Table 4.5 EFA analysis result of determinants in public and private banks 47 m oi Table 4.6 EFA analysis result of customer satisfaction in public and private banks nh .48 at z Table 4.7 Pearson correlation matrix in public and private banks 49 z vb Table 4.8 Model Summary b in public and private banks .51 jm ht Table 4.9 Anova b in public and private banks 51 k Table 4.10 Coefficients a in public and private banks .51 gm Table 4.11 Model Summary b in public banks 52 l.c Table 4.12 Model Summary b in private banks 53 om Table 4.13 Anova b in public banks 53 an Lu Table 4.14 Anova b in private banks 53 n Table 4.16 Coefficients a in private banks .54 va Table 4.15 Coefficients a in public banks 54 ey t re LIST OF FIGURES t to ng hi Figure 2.1 Research model .22 ep Figure 3.1 Research process .26 w n lo ad ju y th yi pl n ua al n va ll fu oi m at nh z z k jm ht vb om l.c gm an Lu n va ey t re CHAPTER 1: INTRODUCTION t to ng hi ep 1.1 BACKGROUND OF THE STUDY w 1.1.1 Vietnamese banking sector n lo ad The banking sector in Vietnam has a significant growth rate during past two y th decades along with the economic development This banking system consists of five ju yi commercial state-owned banks, thirty seven commercial joint-stock banks, six joint- pl venture banks, thirteen 100% foreign banks, and fifty three representative branches al n ua of foreign banks (Wikipedia, 2012) The development primarily concentrates on va commercial joint-stock and foreign banks showing the attractiveness and potential n development of Vietnam baking industry to inland investors as well as international ll fu financial institutions oi m at nh The market changes create more challenges and difficulties for banks The public banks face adoption of technology and issues like credit proposals and z z personal matters Processing bad debits, finding partners to increase financial vb jm ht ability, dealing with difficult issues from the tight currency policy and the limited credit scale are carried out by the private banks Changing the attitude of personnel k gm and developing strategies are justified for the strong and weak banks All banks om l.c must design a new plan to survive in the innovative period (Bui, 2011) With the entry of new generation tech-savvy private banks and the expansion an Lu of operations of foreign banks, the banking sector has become too competitive Banks (PSBs) PSBs are still dominating the commercial banking system To deal ey to small account holders Almost of the banks are still controlled by Public Sector t re contrast to the nationalized banks; they not recognize any social responsibilities n nationalized banks They aim at a profitable and wealthy part of the market and, in va Well-computerized foreign banks are beginning to compete seriously with the with the emerging situations, bankers have to shed a lot of old ideas, change in t to practices, develop customer loyalty programs, and adopt a distinct approach to meet ng the challenges ahead In a fiercely competitive market, non-price factors like hi ep customer service become more important Hence, it is desirable for banks to develop a customer-centric approach for future survival and growth Efficient and w n speedy customer service is implemented to attract the existing customers in lo ad continuing and inducing new customers to try the services offered by a bank y th Vietnamese banks have already taken lot of initiatives in this regard Further, it has ju been realized that Vietnamese banks have miles to go to capture the recent trends yi pl and to compare with the Western counterparts As a result, many banks have ua al introduced new customer friendly measures like 24-hour banking, 7-day and n anywhere banking, internet banking, extended business hours, ATM network, etc n va ll fu 1.1.2 The personal loan service m oi With years, banks are adding services to their customers The Vietnamese nh at banking industry is passing through a phase of customers market The customers z have more choices among the banks A competition has been established within the z jm ht vb banks‟ operating in Vietnam The development of business activities, manufacturing and trading, more and k l.c gm more individuals borrow a large of money from banks to manage their business It creates a large chance for banks extending personal loan service with different loan om methods such as partial loan, loan under credit limit, installment loan, etc Besides, an Lu the Pubic Sector Banks have signed the determinant to decrease the loan interest rate to 17 - 18%/year for individuals (Nguyen, 2012) The enlarged loan objects, the ey within up to 120 months ABBank is implementing the program “Easy loans – t re with the interest rate down to 19%/year It lends up maximum 80% of house value n give promotions In February, 2012 Oceanbank has the loan projects to buy houses va loosened loan conditions, and the improved liquidity make the commercial banks