The impact of bonding, trust and satisfaction on customer commitment an empirical study of the vietnamese banking sector

MINISTRY OF EDUCATION AND TRANNING UNIVERSITY OF ECONOMICS HO CHI MINH CITY  ĐOÀN THỊ THÙY TRANG THE IMPACT OF BONDING, TRUST AND SATISFACTION ON CUSTOMER COMMITMENT: AN EMPIRICAL STUDY OF THE VIETNAMESE BANKING SECTOR MASTER THESIS HO CHI MINH CITY – 2012 MINISTRY OF EDUCATION AND TRANNING UNIVERSITY OF ECONOMICS HO CHI MINH CITY  ĐOÀN THỊ THÙY TRANG THE IMPACT OF BONDING, TRUST AND SATISFACTION ON CUSTOMER COMMITMENT: AN EMPIRICAL STUDY OF THE VIETNAMESE BANKING SECTOR MAJOR: BUSINESS ADMINITRATION MAJOR CODE: 60340102 MASTER THESIS SUPERVISOR: Assoc Prof Dr NGUYỄN ĐÌNH THỌ HO CHI MINH CITY – 2012 I ACKNOWLEDGEMENT First and foremost I would like to thank my supervisor, Assoc Prof Dr Nguyễn Đình Thọ for his guidance and support His feedback is valuable for my thesis The time of coordinating with him is the valuable opportunities that helps widen my knowledge Second, I would like to thank all of my lecturers at Business Admistration Faculty, University of Economics Ho Chi Minh City who supported my knowledge during the MBA course Third, I also thank my friends who helped me collect data for this thesis Moreover, I would like to express my appreciation to Mr Cao Quoc Viet for his guidance in analyzing data with SPSS Finally, my greatest thank would go to my family who always encourage me to finish this course Đoàn Thị Thùy Trang Ho Chi Minh, 20 October 2012 II COMMITMENT I would like to declare that this study, “The Impact of Bonding, Trust and Satisfaction on Customer Commitment: an Empirical Study of the Vietnamese Banking Sector”, was implemented based on my independent and serious studies as well as scientific researches The data was collected in reality and it has clear origins Đoàn Thị Thùy Trang Ho Chi Minh, 20 October 2012 III TABLE OF CONTENT ACKNOWLEDGEMENT I COMMITMENT II TABLE OF CONTENT III LIST OF TABLE VI LIST OF FIGURE VII ABSTRACT CHAPTER 1: INTRODUCTION .2 1.1 Research background 1.2 Statement of problem 1.3 Research questions .5 1.4 Research objectives 1.5 Research methodology 1.6 The structure of the research CHAPTER 2: LITERATURE REVIEW 2.1 The Nature and Role of Commitment 2.2 Bonding definition and impact of bonding on customer commitment 10 2.3 Trust definition and impact of trust on customer commitment 11 2.4 Satisfaction definition and impact of satisfaction on customer commitment 14 2.5 Conceptual model .16 2.6 Summary 16 CHAPTER 3: RESEARCH METHODOLOGY 17 3.1 Research design 17 3.2 Questionnaire development 18 3.2.1 Independent variables 18 3.2.2 Dependent variable: commitment .19 3.3 Questionnaire translation 20 IV 3.4 Research strategy .21 3.4.1 Qualitative pilot study 21 3.4.2 Quantitative pilot study .21 3.5 Target population .22 3.6 Sample size 22 3.7 Selecting the sample and collecting data 22 3.8 Methods of data analysis 24 3.8.1 Data cleaning .24 3.8.2 Reliability assessment of measurement scales (Cronbach’s alpha) 24 3.8.3 Validity assessment of measurement scales 25 3.8.4 Multiple Linear Regression (MLR) .25 3.9 Research process 25 3.10 Summary 26 CHAPTER 4: DATA ANALYSIS AND FINDINGS 27 4.1 Descriptions of sample .27 4.2 Reliability of the measurements 29 4.3 Exploratory factor analysis (EFA) .31 4.3.1 EFA implementation for independent variables 31 4.3.2 EFA implementation for dependent variable 34 4.4 Testing the research model and the hypothesis 34 4.4.1 Testing the correlations of the constructs 34 4.4.2 Testing Assumptions of Linear Regression .35 4.4.3 Multiple Linear Regression Analysis 36 4.5 Summary 39 CHAPTER 5: CONCLUSION 40 5.1 Discussion of findings 40 5.1.1 Bonding .41 5.1.2 Trust .41 5.1.3 Satisfaction 41 V 5.2 Practical implications 42 5.3 Contribution of the current study .45 5.4 Limitation and future research 45 REFERENCES 47 APPENDIX I .53 APPENDIX 56 APPENDIX 60 APPENDIX 69 VI LIST OF TABLE Table 3.1 Survey items ……………………………………………….……… 19 Table 4.1 Respondents’ profiles…………………………………………………28 Table 4.2 Reliability of the measurements and related decision ……… …… 30 Table 4.3 EFA results of independent variables …………………… ……… .33 Table 4.4 EFA results of dependent variables ……………………………… 34 Table 4.5 Correlations ……………………………………………………… 35 Table 4.6 MRL results using Enter technique ….…………………………… 36 Table 4.7 ANOVA ……………………………………………………….… 36 Table 4.8 Coefficients………………………………………………………… 37 Table 4.9 Results of testing hypothesis ……………………… ……………… 37 VII LIST OF FIGURE Figure 2.1 Conceptual model …………………….……………… ……… .16 Figure 3.1 Research process……………………………………….………… 25 Figure 4.1 Model with Beta values………………………… ……….……… 38 ABSTRACT To survive in a high competitive environment, banks must have marketing strategy to build a long-term relationship with their customers by improving customer commitment This thesis aimed to investigate the impact of bonding, trust and satisfaction on customer commitment in the Vietnamese banking sector by empirical evidence The thesis consisted of five chapters including introduction, literature review, research methodology, data analysis and findings, conclusion After the introduction chapter, the study indicated related literature on bonding, trust, satisfaction and the affect of these components on customer commitment Then, the research methodology introduced the procedure of the research The data analysis and findings used SPSS version 16 to analyze collected data Finally, the main conclusion and implication of the study stated in the conclusion chapter Our findings showed that bonding, trust and satisfaction had positive effect on customer commitment Among these factors, satisfaction got highest weight influence on customer commitment Trust was more important in affecting commitment compared with bonding 58 Reliability Statistics Cronbach's Alpha N of Items 820 Item-Total Statistics Scale Mean if Scale Variance if Corrected Item- Cronbach's Alpha Item Deleted Item Deleted Total Correlation if Item Deleted SATISFACTION 13.63 6.897 649 773 SATISFACTION 13.61 7.268 569 797 SATISFACTION 13.41 6.938 628 779 SATISFACTION 13.61 6.780 722 753 SATISFACTION 13.62 7.334 503 817 Appendix 2.4: Statistics and Cronbach’s alpha analysis of Commitment Statistics N COMMITMENT COMMITMENT COMMITMENT Valid 300 300 300 0 Mean 3.49 2.99 3.25 Median 4.00 3.00 3.00 3 871 918 910 Minimum 1 Maximum 5 Missing Mode Std Deviation Reliability Statistics Cronbach's Alpha 818 N of Items Item-Total Statistics Scale Mean if Scale Variance if Corrected Item- Cronbach's Alpha Item Deleted Item Deleted Total Correlation if Item Deleted COMMITMENT 6.24 2.685 666 755 COMMITMENT 6.74 2.594 646 776 COMMITMENT 6.49 2.498 702 718 59 Appendix 2.5: Statistics and Cronbach’s alpha analysis of Satisfaction after elimination of SATISFACTION Statistics N SATISFACTION SATISFACTION SATISFACTION SATISFACTION Valid 300 300 300 300 0 0 Mean 3.34 3.36 3.56 3.36 Median 3.00 3.00 4.00 3.00 3 853 836 862 820 Minimum 1 1 Maximum 5 5 Missing Mode Std Deviation Reliability Statistics Cronbach's Alpha 817 N of Items Item-Total Statistics Scale Mean if Scale Variance if Corrected Item- Cronbach's Alpha Item Deleted Item Deleted Total Correlation if Item Deleted SATISFACTION 10.27 4.293 654 762 SATISFACTION 10.26 4.614 563 804 SATISFACTION 10.06 4.308 639 769 SATISFACTION 10.26 4.293 698 742 60 APPENDIX EXPLORATORY FACTOR ANALYSIS (EFA) Appendix 3.1: The first EFA implementation of three independent variables KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy Bartlett's Test of Sphericity 941 Approx Chi-Square 2887.588 Df 190 Sig .000 Total Variance Explained Component Extraction Sums of Squared Initial Eigenvalues Total Loadings % of Cumulative Variance % Total Rotation Sums of Squared Loadings % of Cumulative Variance % Total % of Cumulative Variance % 8.631 43.156 43.156 8.631 43.156 43.156 5.137 25.685 25.685 1.734 8.671 51.827 1.734 8.671 51.827 3.218 16.089 41.773 1.087 5.434 57.261 1.087 5.434 57.261 3.098 15.488 57.261 813 4.063 61.325 779 3.894 65.219 749 3.746 68.965 686 3.430 72.394 637 3.184 75.578 575 2.874 78.452 10 531 2.657 81.109 11 512 2.562 83.671 12 464 2.321 85.992 13 443 2.216 88.208 14 427 2.137 90.344 15 383 1.914 92.259 16 339 1.695 93.954 17 328 1.639 95.593 18 310 1.550 97.143 19 293 1.464 98.607 20 279 1.393 100.000 dimension0 61 Total Variance Explained Component Extraction Sums of Squared Initial Eigenvalues Total Loadings % of Cumulative Variance % Total Rotation Sums of Squared Loadings % of Cumulative Variance % Total % of Cumulative Variance % 8.631 43.156 43.156 8.631 43.156 43.156 5.137 25.685 25.685 1.734 8.671 51.827 1.734 8.671 51.827 3.218 16.089 41.773 1.087 5.434 57.261 1.087 5.434 57.261 3.098 15.488 57.261 813 4.063 61.325 779 3.894 65.219 749 3.746 68.965 686 3.430 72.394 637 3.184 75.578 575 2.874 78.452 10 531 2.657 81.109 11 512 2.562 83.671 12 464 2.321 85.992 13 443 2.216 88.208 14 427 2.137 90.344 15 383 1.914 92.259 16 339 1.695 93.954 17 328 1.639 95.593 18 310 1.550 97.143 19 293 1.464 98.607 20 279 1.393 100.000 dimension0 Extraction Method: Principal Component Analysis 62 Rotated Component Matrix a Component BONDING 642 118 109 BONDING 665 273 275 BONDING 722 228 187 BONDING 668 149 148 BONDING 632 172 253 BONDING 692 184 187 BONDING 730 165 244 BONDING 723 153 182 BONDING 695 280 207 TRUST 439 596 007 TRUST 374 562 282 TRUST 301 606 352 TRUST 103 787 176 TRUST 099 645 441 TRUST 230 675 192 SATISFACTION 211 187 764 SATISFACTION 331 130 649 SATISFACTION 192 216 740 SATISFACTION 237 368 724 SATISFACTION 393 315 420 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization a Rotation converged in iterations 63 Component Matrix a Component BONDING 565 -.344 005 BONDING 743 -.202 -.006 BONDING 716 -.308 026 BONDING 618 -.328 -.001 BONDING 658 -.239 -.061 BONDING 672 -.308 -.005 BONDING 718 -.318 -.059 BONDING 676 -.349 -.022 BONDING 734 -.252 047 TRUST 616 -.007 411 TRUST 690 155 189 TRUST 696 264 169 TRUST 561 411 421 TRUST 617 471 132 TRUST 602 271 332 SATISFACTION 622 317 -.419 SATISFACTION 621 147 -.375 SATISFACTION 612 333 -.381 SATISFACTION 713 371 -.264 SATISFACTION 646 084 -.081 Extraction Method: Principal Component Analysis a components extracted 64 Appendix 3.2: The second EFA implementation of three independent variables (after eliminate item SATISFACTION 5) KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy Bartlett's Test of Sphericity 937 Approx Chi-Square 2737.109 Df 171 Sig .000 Total Variance Explained Component Extraction Sums of Squared Rotation Sums of Squared Loadings Loadings Initial Eigenvalues Total dimension0 % of Cumulative Variance % Total % of Cumulative Variance % Total % of Cumulative Variance % 8.244 43.390 43.390 8.244 43.390 43.390 5.023 26.435 26.435 1.729 9.102 52.493 1.729 9.102 52.493 3.173 16.702 43.138 1.084 5.705 58.198 1.084 5.705 58.198 2.861 15.060 58.198 813 4.277 62.474 775 4.077 66.551 689 3.625 70.176 678 3.569 73.745 579 3.050 76.795 556 2.926 79.721 10 519 2.733 82.454 11 498 2.621 85.076 12 452 2.378 87.454 13 428 2.251 89.704 14 387 2.036 91.740 15 360 1.894 93.635 16 328 1.726 95.360 17 310 1.633 96.993 18 293 1.541 98.534 19 279 1.466 100.000 65 Total Variance Explained Component Extraction Sums of Squared Rotation Sums of Squared Loadings Loadings Initial Eigenvalues Total dimension0 % of Cumulative Variance % Total % of Cumulative Variance % Total % of Cumulative Variance % 8.244 43.390 43.390 8.244 43.390 43.390 5.023 26.435 26.435 1.729 9.102 52.493 1.729 9.102 52.493 3.173 16.702 43.138 1.084 5.705 58.198 1.084 5.705 58.198 2.861 15.060 58.198 813 4.277 62.474 775 4.077 66.551 689 3.625 70.176 678 3.569 73.745 579 3.050 76.795 556 2.926 79.721 10 519 2.733 82.454 11 498 2.621 85.076 12 452 2.378 87.454 13 428 2.251 89.704 14 387 2.036 91.740 15 360 1.894 93.635 16 328 1.726 95.360 17 310 1.633 96.993 18 293 1.541 98.534 19 279 1.466 100.000 Extraction Method: Principal Component Analysis 66 Rotated Component Matrix a Component BONDING 643 118 110 BONDING 668 277 264 BONDING 723 230 176 BONDING 669 150 144 BONDING 634 174 255 BONDING 693 188 167 BONDING 733 169 241 BONDING 725 156 179 BONDING 696 283 194 TRUST 439 593 008 TRUST 376 568 261 TRUST 305 612 339 TRUST 105 789 173 TRUST 103 652 428 TRUST 232 678 180 SATISFACTION 217 198 766 SATISFACTION 336 138 654 SATISFACTION 199 226 744 SATISFACTION 243 380 714 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization a Rotation converged in iterations 67 Component Matrix a Component BONDING 570 -.338 -.002 BONDING 743 -.198 -.007 BONDING 717 -.303 026 BONDING 622 -.323 -.005 BONDING 662 -.233 -.070 BONDING 670 -.308 003 BONDING 723 -.311 -.064 BONDING 682 -.342 -.027 BONDING 734 -.249 048 TRUST 623 004 396 TRUST 686 157 193 TRUST 695 268 166 TRUST 565 421 408 TRUST 615 475 129 TRUST 601 277 328 SATISFACTION 622 321 -.428 SATISFACTION 622 152 -.387 SATISFACTION 613 338 -.393 SATISFACTION 709 373 -.267 Extraction Method: Principal Component Analysis a components extracted 68 Appendix 3.3: The EFA implementation of dependent variable KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy Bartlett's Test of Sphericity 713 Approx Chi-Square 314.609 Df Sig .000 Total Variance Explained Component Initial Eigenvalues Total dimension0 % of Variance Extraction Sums of Squared Loadings Cumulative % 2.201 73.377 73.377 443 14.760 88.137 356 11.863 100.000 Extraction Method: Principal Component Analysis Component Matrix a Component COMMITMENT 875 COMMITMENT 854 COMMITMENT 840 Extraction Method: Principal Component Analysis a components extracted Total 2.201 % of Variance 73.377 Cumulative % 73.377 69 APPENDIX MULTIPLE LINEAR REGRESSION ANALYSIS (MLR) Statistics BONDING N Valid TRUST SATISFACTION COMMITMENT 300 300 300 300 0 0 Mean 3.4111 3.5906 3.4042 3.2444 Median 3.3889 3.6667 3.5000 3.3333 3.56 3.83 3.50 3.00 65059 59949 67704 77077 Minimum 1.44 1.83 1.50 1.00 Maximum 5.00 5.00 5.00 5.00 Missing Mode Std Deviation Variables Entered/Removedb Model Variables Removed Variables Entered SATISFACTION, BONDING, TRUSTa Method Enter dimension0 a All requested variables entered b Dependent Variable: COMMITMENT Model Summary Model R 762 R Square 581 Std Error of the Estimate 50153 Adjusted R Square 577 a Predictors: (Constant), SATISFACTION, BONDING, TRUST ANOVAb Model Sum of Squares Regression Residual Total df Mean Square 103.176 34.392 74.454 296 252 177.630 299 a Predictors: (Constant), SATISFACTION, BONDING, TRUST b Dependent Variable: COMMITMENT F 136.729 Sig .000a 70 Correlations BONDING BONDING Pearson Correlation TRUST Sig (2-tailed) N TRUST 300 Pearson Correlation SATISFACTION COMMITMENT 632 SATISFACTION COMMITMENT 632** 587** 641** 000 000 000 300 300 300 ** 639** 000 000 ** 643 Sig (2-tailed) 000 N 300 300 300 300 ** ** 688** Pearson Correlation 587 643 Sig (2-tailed) 000 000 N 300 300 300 300 641** 639** 688** Sig (2-tailed) 000 000 000 N 300 300 300 Pearson Correlation 000 300 ** Correlation is significant at the 0.01 level (2-tailed) Coefficientsa Model Standardized Unstandardized Coefficients B Std Error (Constant) -.367 187 BONDING 330 060 TRUST 275 SATISFACTION 440 a Dependent Variable: COMMITMENT Coefficients Beta t Sig -1.964 050 279 5.463 000 069 214 3.970 000 059 386 7.488 000 71 Collinearity Diagnosticsa Model Dimension Variance Proportions SATISFACTI Eigenvalue d i m e Condition Index (Constant) BONDING TRUST ON 3.956 1.000 00 00 00 00 020 14.170 82 06 00 27 015 16.288 04 76 00 52 010 20.032 15 18 1.00 21 n dimension1 s i o n a Dependent Variable: COMMITMENT 72 ... literature on commitment and the impact of bonding, trust, satisfaction on customer commitment Bonding, trust and satisfaction are hypothesized having positive effect on customer commitment Conceptual...MINISTRY OF EDUCATION AND TRANNING UNIVERSITY OF ECONOMICS HO CHI MINH CITY  ĐOÀN THỊ THÙY TRANG THE IMPACT OF BONDING, TRUST AND SATISFACTION ON CUSTOMER COMMITMENT: AN EMPIRICAL STUDY OF THE. .. data analysis and findings, conclusion After the introduction chapter, the study indicated related literature on bonding, trust, satisfaction and the affect of these components on customer commitment