Determinants of customer satisfaction on mortgate service a case study of anz bank Vietnam limited Luận văn thạc sĩ

MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS- HOCHIMINH CITY PHUNG NGUYEN THUC KHUE DETERMINANTS OF CUSTOMER SATISFACTION ON MORTGAGE SERVICE: A CASE STUDY OF ANZ BANK VIETNAM LIMITED MASTER THESIS Ho Chi Minh City- 2010        MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS- HOCHIMINH CITY Phung Nguyen Thuc Khue DETERMINANTS OF CUSTOMER SATISFACTION ON MORTGAGE SERVICE: A CASE STUDY OF ANZ BANK VIETNAM LIMITED MASTER THESIS In Finance- Banking Ology Code: 60.31.12 Supervisor Assoc. Prof. Dr. Nguyn Minh Kiu Ho Chi Minh City- 2010        ACKNOWLEDGEMENT First of all, I would like to express my deepest gratitude and sincerest thanks to Dr. Nguyen Minh Kieu, my thesis tutor, for his valuable and patient guidance, advice and support during my research. Second, I would like to thanks all professors, tutors and my classmates who gave me the academic knowledge, support, encouragement and sharing experience to help me complete this research successfully. I also express my sincere thanks to my old colleagues at ANZ Bank Vietnam Limited and all the respondents who helped me to build the qualitative research and complete the survey. Personally, I am deeply indebted my parents who always expect and encourage me much during the last three years. I could not make it without them. Ho Chi Minh City, December 2010 Phung Nguyen Thuc Khue ABSTRACT Recently banking industry has become severely competitive environment than ever before. When the banking products are easy to imitate, then the service quality becomes important and significant for banks to increase their competitive capacity. This research, therefore, focused on measuring customer satisfaction on mortgage lending service which occupies a large portion in retail lending market. ANZ Bank Vietnam Limit was chosen for a case study in consideration of their strong foothold in retail lending market after seventeen years of officially operating in Vietnam. This research attempted to figure out the most important factor influenced mortgage customer satisfaction. Based on that, the research findings provided meaningful recommendations and managerial implications for ANZ Bank Vietnam Limited’s management board. Sample of 150 respondents was selected, it was executed mostly in email and telephone interview. Collected data was analyzed by using SPSS 16.0. Main analyses were exploratory factor analysis, correlation, reliability with Cronbach’s Alpha, multiple linear regression. The result addressed that the key satisfactions of mortgage customers at ANZ Bank Vietnam Limited were Core Dimension, Relational Dimension, Price, Tangible Dimension and Customer Expertise respectively. Managerial implications for management board of ANZ Bank Vietnam Limited were provided. Subsequently, limitations of the research were discussed for future studies in related field. TABLE OF CONTENTS ACKNOWLEDGEMENTS ABSTRACT TABLE OF CONTENTS LIST OF FIGURES LIST OF TABLES LIST OF ABBREVIATIONS CHAPTER 1: INTRODUCTION 1 1.1 BACKGROUND 1 1.2 PROBLEM STATEMENT 2 1.3 RESEARCH QUESTIONS AND OBJECTIVES 4 1.4 RESEARCH METHODOLOGY 4 1.5 SCOPE AND LIMITATION 5 1.6 THE STRUCTURE OF THE STUDY 5 CHAPTER 2: LITERATURE REVIEW 7 2.1 OVERALL ON CUSTOMER SATISFACTION 7 2.2 OVERALL ON CUSTOMER SATISFACTION IN MORTGAGE LENDING 8 2.3 DETERMINANTS OF CUSTOMER SATISFACTION IN MORTGAGE LENDING 9 2.3.1 Service quality 10 2.3.2 Service price 12 2.3.3 Customer expertise 12 2.4 RESEARCH MODELS AND RESEARCH HYPOTHESES OF CUSTOMER SATISFACTION IN MORTGAGE LENDING 13 2.5 CHAPTER SUMMARY 15 CHAPTER 3: RESEARCH METHODOLOGY 16 3.1 QUALITATIVE RESEARCH STAGE 18 3.1.1 General result of the survey 19 3.1.2 Result on Core Dimension determinant 19 3.1.3 Result on Relational Dimension determinant 20 3.1.4 Result on Tangible determinant 21 3.1.5 Result on Competitive price determinant 21 3.1.6 Result on Customer Expertise determinant 22 3.2 QUANTITATIVE RESEARCH STAGE 22 3.2.1 Target population and sampling method 22 3.2.2 Data collection 23 3.2.3 The questionnaire design 23 3.2.4 Data analysis method 24 3.2.4.1 Descriptive statistic 24 3.2.4.2 Reliability testing 24 3.2.4.3 Assessment of Unidimensionality, Convergent validity and Discriminant validity 25 3.2.4.4 Multiple regression analysis 25 3.3 CHAPTER SUMMARY 25 CHAPTER 4: DATA ANALYSIS AND FINDINGS 26 4.1 SAMPLE CHARACTERISTICS 26 4.2 DATA ANALYSIS 28 4.2.1 Descriptive statistics 28 4.2.2 Reliability assessment 30 4.2.3 Evaluation the measurement scale by using exploratory factor analysis 32 4.2.4 Assessment of convergent validity and of discriminate validity 33 4.2.5 Factor analysis of dependant factor 34 4.2.6 The adjusted research model 35 4.3 TESTING OF HYPOTHESES 35 4.4 MULTIPLE REGRESSIONS 37 4.4.1 Multiple regression formula 38 4.4.2 Multiple regression result 38 4.5 DISCUSSION 40 4.5.1 Application of theoretical conceptual framework 40 4.5.1.1 The relationship between service quality and customer satisfaction 40 4.5.1.2 The relationship between price and customer satisfaction . 40 4.5.1.3 The relationship between customer expertise and customer satisfaction 40 4.5.2 The result of measuring ANZ mortgage customer satisfaction 41 4.5.2.1 Service quality 41 4.5.2.2 Price 41 4.5.2.3 Customer satisfaction 42 4.5.3 Outcomes of hypothesis test 42 4.6 CHAPTER SUMMARY 42 CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS 43 5.1 CONCLUSIONS 44 5.2 RECOMMENDATIONS 44 5.3 LIMITATION AND DIRECTION FOR FURTHER STUDIES 46 REFERENCE APPENDICES LIST OF FIGURES Figure 1.1: Research procedure 5 Figure 2.1: Conceptual framework proposed by Mc Dougall and Levesque 14 Figure 2.2: The conceptual framework proposed by Naser and Jamal 15 Figure 2.3 The conceptual framework proposed by Nguyen Dinh Tung 16 Figure 3.1: The proposed research model 17 Figure 4.1: The adjusted research model 35 LIST OF TABLES Table 3.1: General result of agreement on selected factors 19 Table 3.2: General result of agreement on Core dimension factor 20 Table 3.3: General result of agreement on Relational dimension factor 20 Table 3.4: General result of agreement on Tangible dimension factor 21 Table 3.5: General result of agreement on Price factor 21 Table 3.6: General result of agreement on Customer expertise factor 22 Table 4.1: Age of customer 26 Table 4.2: Monthly income of customers 27 Table 4.3: Customer’s employment 27 Table 4.4: Descriptive statistic 29 Table 4.5: Final result of Reliability testing of the whole mod 30 Table 4.6: Final result of Reliability testing of each factor 31 Table 4.7: The final result of Unidimensionality testing 32 Table 4.8: The analysis result of Convergent validity 33 Table 4.9: The result of factor analysis for Customer satisfaction 34 Table 4.10: Correlation matrix 36 Table 4.11: Model summary 38 Table 4.12: ANOVA 38 Table 4.13: COEFFICIENTS 39 Table 4.14: ANZ mortgage customer perception 41 LIST OF ABBREVIATIONS ANZ: ANZ Bank Vietnam Ltd. CLM: Customer Lending Manager COR: Core dimension EFA: Exploratory Factor Analysis EXP: Customer expertise H: Hypothesis HSBC: Hongkong and Shanghai Bank of China INT: Price KMO: Kaiser – Meyer – Olkin No.: Number REL: Relational dimension SAF: Customer satisfaction SPSS: Statistical package of social science Std. Deviation: Standard Deviation TAN: Tangible dimension VIF: Variance Inflation Factor [...]... to ANZ to improve customer s satisfaction on mortgage loan? Research objectives - To study about the importance of customer satisfaction on mortgage product - To analyze satisfaction level of customer on mortgage product of ANZ - To study the effect of main determinants on customer s satisfaction on mortgage lending service at ANZ - To give out appropriate comments and recommendation to improve customer. .. The Asian Banker and Finance Asia, ANZ has no official research on customer s satisfaction on its services, what is the key factor mostly effect customer s satisfaction and what to improve to increase the mortgage service quality Meanwhile, as above mention, increasing competition in mortgage lending has made the bank s knowledge on customer s need and demand the most importance and challenge Managing... price and quality Therefore, banks today have moved away from a transactional-based marketing approach to a relationship based approach that has at its core the recognition of the lifetime value of the customer Bank management tends to differentiate their business with others through service quality Customer satisfaction becomes an effective tool that banks can use to gain a strategic advantage and survive... literature about the distinction between service quality and satisfaction The service quality school view satisfaction as an antecedent of service quality, which means satisfaction with a number of individual transactions "decay" into an overall attitude towards service quality The satisfaction school holds the opposite view that assessments of service quality lead to an overall attitude towards the service. .. factors to satisfaction are also suggested in a research by Bettman and Park in 1980 This study, with the research scale of investigate customer satisfaction in mortgage lending which is an important part of retail banking, will conduct with conceptual framework basing on the suggested models of customer satisfaction in retail banking 2.3.1 Service quality There is a great deal of discussion and disagreement... better customer s satisfaction management to the bank as well 1.3 RESEARCH QUESTIONS AND OBJECTIVES Research questions - How satisfied are customers who are using mortgage lending service of ANZ? - What determinants effecting customer s satisfaction on ANZ s mortgage lending service? - How can these determinants be evaluated and influenced to customer s satisfaction? - What solution and recommendation... that they call satisfaction Obviously, there is a strong link between customer satisfaction and service quality For this reason, research on customer satisfaction is often closely associated with the measurement of quality (East, 1997) A study conducted by Leeds in 1992 showed that increased service quality or sales and professional behaviors (such as formal greetings) improved customer satisfaction. .. of Determinants of individual customer satisfaction at Maritime Bank His research area was individual customers who had current and saving accounts at Maritime Bank After investigating, the research model was given out with four independent variables having effect on individual customer satisfaction: Core Dimension, Relational Dimension, Tangible Dimension and Competitive Price Besides that, he also... customer satisfaction on mortgage product of ANZ 1.4 RESEARCH METHODOLOGY Necessary data and information for this study could be collected from two main sources: - Primary data: o In-dept interviews and discussion with Head of Mortgage, Regional Manager of Mortgage, Customer Lending Managers and other relevant departments of ANZ o Feedback from customers who are having mortgage transactions with ANZ This... operation of many foreign banks has also brought a new face to Vietnam banking industry, especially when foreign banks not only concentrate in wholesales banking, but introduce many retail products such as HSBC, ANZ, Standard Chartered Bank, Commonwealth Bank of Australia… In which mortgage is one of their most important target products to occupy retail market which is considered very potential in Vietnam . between service quality and satisfaction. The service quality school view satisfaction as an antecedent of service quality, which means satisfaction with a number of individual transactions "decay". recommendation to ANZ to improve customer s satisfaction on mortgage loan? Research objectives - To study about the importance of customer satisfaction on mortgage product. - To analyze satisfaction. price and quality. Therefore, banks today have moved away from a transactional-based marketing approach to a relationship based approach that has at its core the recognition of the lifetime value