(Luận văn) relationship between service quality and customer satisfaction in life insurance services in viet nam

MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HOCHIMINH CITY - oOo - t to ng hi ep w n lo ad y th ju LÊ THỊ BÍCH ĐÀO yi pl n ua al n va ll fu RELATIONSHIP BETWEEN oi m SERVICE QUALITY AND CUSTOMER SATISFACTION nh at IN LIFE INSURANCE SERVICES IN VIET NAM z z jm ht vb k MASTER OF BUSINESS ADMINISTRATION om l.c gm an Lu n va ey t re Ho Chi Minh City – 2012 MINISTRY OF EDUCATION AND TRAINING ACKNOWLEDGEMENT UNIVERSITY OF ECONOMICS HOCHIMINH CITY - oOo - t to I would like to express my deepest gratitude to my research supervisor, Professor ng hi Pham Quoc Hung for his intensive support, valuable suggestions, guidance and ep encouragement during the course of my study w n I would like to express my sincere gratitude to all of my teachers at Faculty of lo ad Business Administration and Postgraduate Faculty, University of Econimics y th Hochiminh City for their teaching and guidance during my MBA course ju LÊ THỊ BÍCH ĐÀO yi My sincere thanks is extended to Professor Nguyen Dinh Tho, Dr Tran Ha Minh pl Quan, Dr Nguyen Thi Nguyet Que, Dr Nguyen Thi Mai Trang, Dr Nguyen Van al n ua Ngai for their valuable time as members of examination committee Their n va comments and suggestions were of great value for my study ll fu I would also like to avail this opportunity to BETWEEN express my appreciation to Professor RELATIONSHIP m SERVICE QUALITY AND CUSTOMER SATISFACTION English and Dr Tran Ha Minh Quan for his support during the course oi Nguyen Dong Phong, UEH Board of Directors for creating MBA program in nh at IN LIFE INSURANCE SERVICES IN VIET NAM z I would like to specially express my thanks to all of my classmates, my friends, and z jm ht vb my colleagues for their support and encouragement k I sincerely thank the management and staff of AIA Insurance, Prudential, Bao Viet, MAJOR: BUSINESS ADMINISTRATION Dai-ichi life, Manulife, and ACE Life insurance for contributing to this study MAJOR CODE: 60.34.05 l.c gm om Last but not least I must express my gratitude to my beloved parents, my husband encourage and support me during these years of study MASTER THESIS an Lu Nguyen Ngoc Minh and daughter Minh Anh who have always sacrificed to n va t re Ho Chi Minh City – 2012 ey SUPERVISOR : PROFESSOR PHẠM QUỐC HÙNG ACKNOWLEDGEMENT t to ng I would like to express my deepest gratitude to my research supervisor, Professor hi Pham Quoc Hung for his intensive support, valuable suggestions, guidance and ep encouragement during the course of my study w n I would like to express my sincere gratitude to all of my teachers at Faculty of lo ad Business Administration and Postgraduate Faculty, University of Econimics ju y th Hochiminh City for their teaching and guidance during my MBA course yi My sincere thanks is extended to Professor Nguyen Dinh Tho, Dr Tran Ha Minh pl al Quan, Dr Nguyen Thi Nguyet Que, Dr Nguyen Thi Mai Trang, Dr Nguyen Van n ua Ngai for their valuable time as member of examination committee Their comments n va and suggestions were of great value for my study fu ll I would also like to avail this opportunity to express my appreciation to Professor m oi Nguyen Dong Phong, UEH Board of Directors for creating MBA program in at nh English and Dr Tran Ha Minh Quan for his support during the course z z I would like to specially express my thanks to all of my classmates, my friends, and jm ht vb my colleagues for their support and encouragement k I sincerely thank the management and staff of AIA Insurance, Prudential, Bao Viet, gm Dai-ichi life, Manulife, and ACE Life insurance for contributing to this study l.c om Last but not least I must express my gratitude to my beloved parents, my husband encourage and support me during these years of study an Lu Nguyen Ngoc Minh and daughter Minh Anh who have always sacrificed to n va ey t re i t to ABSTRACT ng hi ep The present study investigated the subject of service quality and its relationship to w n customer satisfaction in the context of life insurance industry service A study of lo ad 238 respondents from six leading life insurance in Viet Nam was conducted in Ho y th Chi Minh City This research, using confirmatory factor analyses, proposes a six ju yi dimensional service-quality instrument consisting of assurance, personalized pl financial planning, competence, corporate image, tangibles and technology in life al n ua insurance A paired “t” test and the cross-tabulation procedure were also carried out n va in this study to examine the relationship between service quality and customer ll fu satisfaction The result from this paper confirmed that the two constructs are at nh to an increase in another oi m distinct, but are highly correlated, implying that an increase in one is likely to lead z z vb measurement, life insurance services k jm ht Keywords: Service quality, customer satisfaction, confirmatory factor analysis, om l.c gm an Lu n va ey t re ii TABLE OF CONTENTS t to ng hi ep ACKNOWLEDGEMENT i ABSTRACT ii TABLE OF CONTENTS iii LIST OF FIGURES iv LIST OF TABLES vi CHAPTER 1: INTRODUCTION 1.1 BACKGROUND 1.2 RESEARCH PROBLEMS 1.3 RESEARCH OBJECTIVES 1.4 RESEARCH METHODOLOGY AND SCOPE 1.5 STRUCTURE OF THE STUDY CHAPTER 2: LITERATURE REVIEW 10 2.1 INTRODUCTION 10 2.2 SERVICE QUALITY 10 2.3 CUSTOMER SATISFACTION 13 2.4 THE LINK BETWEEN SERVICE QUALITY AND CUSTOMER SATISFACTION .14 2.5 LIFE INSURANCE IN VIET NAM 16 2.6 HYPOTHESIS AND EMPIRICAL MODEL 19 CHAPTER 3: METHODOLOGY 22 3.1 INTRODUCTION 22 3.2 RESEARCH DESIGN 22 3.3 VARIABLES MEASUREMENT 22 3.3.1 Scale to measure service quality 22 3.3.2 Scale to measure customer satisfaction 25 3.4 PILOT TEST 26 3.5 MAIN SURVEY 27 3.5.1 Brand selection 27 3.5.2 Sampling 27 3.5.3 Sample size 28 3.5.4 Survey method 28 3.5.5 Data analysis techniques 28 3.6 SUMMARY 29 CHAPTER 4: EMPIRICAL RESULTS OF THE RESEARCH 30 4.1 INTRODUCTION 30 4.2 CHARACTERISTICS OF RESEARCH SAMPLES 30 4.3 SCALES ASSESSMENT 33 4.3.1 RELIABILITY TESTING 33 4.3.2 CONFIRMATORY FACTOR ANALYSIS (CFA) 33 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 iii t to ng hi ep 4.3.3 CUSTOMER SATISFACTION WITH SERVICE QUALITY CHAPTER 5: CONCLUSIONS, RECOMMENDATIONS AND LIMITATIONS 5.1 INTRODUCTION 5.2 CONCLUSIONS 5.3 RECOMMENDATIONS 5.4 LIMITATIONS REFERENCES APPENDIX APPENDIX APPENDIX APPENDIX w n lo ad 43 51 51 51 53 54 56 59 62 63 64 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 iv LIST OF FIGURES t to ng Figure 2.1: Research model 21 hi ep Figure 3.1: Research Process 23 Figure 4.1: Confirmatory factor analysis (CFA) – the initial model 36 w n Figure 4.2: CFA modified model 40 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 v LIST OF TABLES t to ng Table 4.1 : Response frequency of each brand 31 hi Table 4.2 : Demographic characteristics of the respondents 31 ep Table 4.3 : Skew and Kurtosis Values of Variables 32 Table 4.4 : Reliability of the measurement instrument 34 w n Table 4.5 : Modification Indices (Group number - Default model) 37 lo ad Table 4.6 : Standardized Regression Weights of variables (factor loadings) 39 y th Table 4.7 : CFA results – Construct loadings 41 ju Table 4.8 : Correlations matrix of variables 43 yi pl Table 4.9 : Matrices Correlations 64 ua al Table 4.10: Results of paired “t” test 44 n Table 4.11: Correlation between customer satisfaction and service quality 45 n va Table 12: Cross-tabulation results between service quality and customer ll fu satisfaction with respect to assurance 46 oi m Table 13: Cross-tabulation results between service quality and customer satisfaction with respect to personalized financial planning 47 nh at Table 14: Cross-tabulation results between service quality and customer z satisfaction with respect to competence 47 z vb Table 4.15: Cross-tabulation results between service quality and customer jm ht satisfaction with respect to tangibles 48 k Table 4.16: Cross-tabulation results between service quality and customer l.c gm satisfaction with respect to corporate image 48 Table 4.17: Cross-tabulation results between service quality and customer om satisfaction with respect to technology 49 an Lu Table 4.18: Degree of complete agreement and complete disagreement between service quality and customer satisfaction 49 n va Table 4.19: Summary of the hypotheses testing results 50 ey t re vi Service Quality and Customer Satisfaction CHAPTER 1: INTRODUCTION t to ng 1.1 BACKGROUND hi ep Service quality and customer satisfaction have long been recognized as playing a w crucial role for success and survival in today’s competitive market They are two n lo core concepts and crux of the marketing theory and practice (Spreng and Mackoy, ad 1996) A basic agreement emanating from the wide range of literature on service y th ju quality and customer satisfaction is that service quality and customer satisfaction yi are conceptually distinct but closely related constructs (Parasuraman et al., 1994; pl ua al Dabholkar, 1995; Shemwell et al., 1998; G.S Sureshchandar, 2002) n Customer satisfaction is considered a prerequisite for customer retention and va n loyalty, and obviously helps in realizing economic goals like profitability, market ll fu share, return on investment, etc (Scheuing, 1995; Reichheld, 1996; Hackl and m oi Westlund, 2000) Service quality has been described as a form of attitude -a long- at nh run overall evaluation, and service quality and attitude constructs are viewed as similar (Parasuraman et al., 1988; Zeithaml, 1988; Bitner et al., 1990; Bolton and z z Drew, 1991a, b; Cronin and Taylor, 1992; Bitner and Hubert, 1994) ht vb jm Perceptions of service quality could occur at multiple levels in an organization -e.g k with the core service, physical environment, interaction with the service providers, gm etc (Bitner and Hubert, 1994) Besides that, the customer's overall satisfaction with l.c the services of the organization is based on all the encounters or experiences of the om customers with that organization Similar to service quality, customer satisfaction an Lu can occur at multiple levels in an organization, e.g satisfaction with the contact Page ey (Shemwell et al., 1998) t re lies in delivering high quality service that will in turn result in satisfied customers n today's world of intense competition, the key to sustainable competitive advantage va person, satisfaction with the core service and satisfaction with the company In Service Quality and Customer Satisfaction The life insurance industry like many other financial services industries is facing a rapidly changing market, new technologies, economic uncertainties, fierce t to competition and more demanding customers has presented an unprecedented set of ng challenges Like other business domains, life insurance providers have started hi ep realizing that their business depends on customer service and customer satisfaction With liberalization and internationalization in insurance, service quality has become w n an important means of differentiation and path to achieve business success Such lo ad differentiation based on service quality can be a key source of competitiveness for ju y th insurance companies yi With the increasing demands of customer, insurance sector has become competitive pl Customers are becoming increasingly aware of their expectations, and demand al n ua higher standards of services, as technology is enabling them to make comparisons va quickly and accurately Their perceptions and expectations are continually evolving n and they may readily change providers if they are not satisfied with service quality fu ll they receive This makes difficult for service providers to measure and manage m oi services effectively Therefore, the life insurance providers need to reconfigure their nh at strategy and business to sustain or improve their competitive advantage Moreover, z they need to consider how to create a satisfied customer base that will not be eroded z ht vb even in the face of fierce competition The trend of insurance companies shifting jm from a product-focused view to a customer-focused one has been developing k recently as insurance products become increasingly hard to differentiate in fiercely gm l.c competitive markets Insurance companies in the world are consequently directing their strategies towards increasing customer satisfaction and loyalty through om improved service quality an Lu Numerous researchers have made theoretical and empirical contribution to the study n va of relationship service quality and customer satisfaction in various industries (like and customer satisfaction have been examined by a number of studies, but mainly at the level of aggregate constructs The conclusions that the two constructs are Page ey adequately researched In addition, the causal relationships between service quality t re banking, healthcare, education etc) However, the area of life insurance is not