The effect of relational benefits on customer loyalty, an empirical study of vietnamese banking industry , luận văn thạc sĩ

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business NGUYEN THI AI TRAN THE EFFECT OF RELATIONAL BENEFITS ON CUSTOMER SATISFACTION AND CUSTOMER LOYALTY: AN EMPIRICAL STUDY OF VIETNAMESE BANKING INDUSTRY MASTER OF BUSINESS (Honours) Ho Chi Minh City – Year 2014 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business NGUYEN THI AI TRAN THE EFFECT OF RELATIONAL BENEFITS ON CUSTOMER SATISFACTION AND CUSTOMER LOYALTY: AN EMPIRICAL STUDY OF VIETNAMESE BANKING INDUSTRY ID: 22110067 MASTER OF BUSINESS (Honours) SUPERVISOR: DR NGUYEN THI MAI TRANG Ho Chi Minh City – Year 2014 TABLE OF CONTENTS ACKNOWLEDGEMENT ABSTRACT TABLE OF CONTENTS LIST OF FIGURES LIST OF TABLES CHAPTER 1: INTRODUCTION 1.1 Research Background 1.2 Research Objectives 1.3 Research Scope and Research Methodology 1.4 Structure of The Research CHAPTER 2: LITERATURE REVIEW 2.1 Customer Loyalty 2.2 Customer Satisfaction 2.3 Relational Benefits 10 2.4 The Conceptual Model and Hypotheses of The Research 14 CHAPTER 3: RESEARCH METHODOLOGY 17 3.1 Research Design 17 3.1.1 The Unit of Observation 17 3.1.2 Measures of The Constructs 17 3.2 Questionnaire Design 19 3.3 Data Procedure 22 3.3.1 Qualitative Research 22 3.3.2 Quantitative Research 22 3.4 Data Analysis Method 26 CHAPTER 4: DATA ANALYSIS AND DISCUSSIONS 28 4.1 Descriptive Statistics of Samples 28 4.2 The Reliability Test: The Cronbach’s Alpha Test 29 4.3 Exploratory Factor Analysis (EFA) 33 4.4 Regression Analyses 36 4.4.1 Simple Regression Analysis 36 4.4.2 Multiple Regression Analysis 38 CHAPTER 5: CONCLUSIONS, IMPLICATIONS, AND LIMITATIONS 45 5.1 Conclusions 45 5.2 Managerial implications 46 5.3 Limitations 49 REFERENCES 50 APPENDICES 54 Appendix A: Guidelines for in-depth interviews 54 Appendix B: Questionnaire In English 56 Appendix C: Questionnaire In Vietnamese 59 Appendix D: Total variance explained in Exploratory Factor Analysis 62 Appendix E: Histogram, Normal Regression & Scatter Plot of Dependent Variable: Customer Satisfaction 64 ACKNOWLEDGEMENT I would like to give my gratefulness to my research instructor, Dr Nguyen Thi Mai Trang for her intensive support, valuable suggestions, instructions, and encouragement during the time of doing my research I would like to express my deepest gratitude to Professor Nguyen Dong Phong, Professor Nguyen Dinh Tho, Dr Tran Ha Minh Quan for their valuable time as the members of the proposal examination committee Their comments and meaningful suggestions were contributed great help for my completion of this research My sincere thanks are given to all of my teachers at International Business School – University of Economics Ho Chi Minh City for their teaching and guidance during my MBA course In addition, I would like to special express my thanks to all of my classmates, my colleagues at Samsung Vina Insurance Company Limited and my friends who are working in some banks in Ho Chi Minh City for their support and encouragement during the time I was doing my research ABSTRACT This study will examine the effect of relational benefits on customer satisfaction and consequently, the influence of customer satisfaction on customer loyalty in Vietnamese banking industry Based on the theories and measurements of those factors existed in the current liturature, and a qualitative research conducted in Vietnam, a model has been released following measurement scale of those concepts A quantitative research of 186 banking customers has been done to evaluate the measurement scale and test the model The results of Cronbach’s alpha test show that the scale is satisfactory with the allowed reliability and validity It also can indicate that the theoretical model is suitable in Vietnam banking industry and all hypotheses are accepted For specific, the study shows that customer satisfaction highly impacts on customer loyalty in Vietnamese banking industry Moreover, among relational benefits, special treatment benefits and confidence have positive impacts on customer satisfaction, however, social benefits not show the influence on customer satisfaction Besides, special treatment benefits also have been proved to have a strongest impact on customer satisfaction In general, researching of the effects of these variables will support the banks’ managers get thorough understanding of the effect of each relational benefits factors on customer satisfaction, then, help them to identify which variables are the best predictors to customer satisfaction to place emphasis on Furthermore, the study also indicates that making customers satisfied will remarkably affect to the loyalty of customers to the banks, which will help banks’ managers to release effective decisions to gain long-term loyal customers in such highly competitive marketplace in Vietnam LIST OF FIGURES Figure 2.1 Conceptual Model Figure 3.1 Research Process Figure E1 Histogram of Customer Satisfaction Figure E2 Normal Plot of Customer Satisfaction Figure E3 Scatter Plot of Customer Satisfaction LIST OF TABLES Table 3.1 The Result of Questionnaires Delivery Table 4.1 Sample Characteristics Table 4.2 Reliability Test Results Table 4.3 KMO and Bartlett's Test of Independent Variables Table 4.4 Rotated Component Matrix of Independent Variables Table 4.5 KMO and Bartlett's Test of Dependent Variables Table 4.6 Rotated Component Matrix of Dependent Variables Table 4.7 Model Summary of Simple Regression Analysis Table 4.8 ANOVA of simple regression analysis Table 4.9 Coefficients of simple regression analysis Table 4.10 Correlations matrix Table 4.11 Model Summary of multiple regression analysis Table 4.12 ANOVA of multiple regression analysis Table 4.13 Coefficients of multiple regression analysis Table 4.14 Summary of hypotheses testing result Table D1 Total Variance Explained of Independent Variables Table D2 Total Variance Explained of Dependent Variables Table D3 Model Summary b of multiple regression analysis CHAPTER 1: INTRODUCTION 1.1 Research Background The globalization of economy has created an environment more competitive than ever in Vietnam All companies, with no exception in any industries, strive to differentiate themselves from other rivals to get successful survival In this perspective, customer loyalty has emerged as an important aspect that most companies want to be strong at since it is considered as a competitive advantage for all companies to achieve stable development Regarding services industry’s aspect, achieving loyalty of customers has become much more important since the operation of service involves much on the interactions between service providers and customers In banking industry, for specific, achieving customer loyalty is a key to help banks gain sustainable competitive advantage, retain customer, grow in sales, and gain longterm customers Obviously, there are many factors affecting customer loyalty Achieving customer satisfaction is known as one of them, showing a positive impact on loyalty of customer (Zeithaml, Berry, & Parasuraman, 1996; Fornel, Johnson, Anderson, Cha, & Bryan, 1996; Selness, 1993) When customers are satisfied, they are more likely to return to those service providers and when there is an increase in satisfaction level, they will stay loyal to those companies (Anderson & Sullivan, 1993) Therefore, numerous studies have been conducted to identify and measure the components of satisfaction In Vietnam, some important factors affecting customer satisfaction have already been investigated such as service quality (Vu & Nguyen, 2008; Lam, 2012; Nguyen, 2013), service personal value (Pham & Le, 2010), brand (Nguyen, 2013; Ngo, 2012) However, little research in Vietnam has been devoted to investigate the impact of relational benefits on customer satisfaction Besides, in the world, - 2- relational benefits have been widely studied, also in banking industry (Arturo, David, & Agueda, 2007; Sergios, 2010; Maria-Eugenia, 2008), however, these studies have showed the impact of relational benefits on customer satisfaction or directly on customer loyalty only, not indicated the impact of relational benefits on customer satisfaction, and consequently the influence of customer satisfaction on customer loyalty Hence, to address the gaps as mentioned above, this study aims to investigate the effect of relational benefits on customer satisfaction, and consequently the influence of customer satisfaction on customer loyalty in Vietnamese banking industry As opposed to the marketing management, relationship marketing tends to become a flourishing field as well as a generalized alternative conception in marketing theory and practice perspective (Berry, 1983) According to Kinard and Capella (2006), a fundamental condition for a relationship to develop over time is that both the firm and the customer perceive positive outcomes, or benefits The benefits the banks receive include loyalty of customers, long-term profitability, and sales growth What the customer gets is associated with the service itself and/or with benefits that can develop from being a regular customer of the company – called relational benefits (Gwinner, Gremler & Bitner, 1998; Reynolds & Beatty, 1999) Gwinner et al (1998) and Hennig-Thurau et al (2002) reveal that service comprises of the two components: core service and relationship, however, the relationship benefits framework focuses on the relationship component and defines relational benefits as the value a customer receives over and above the core service 11 12 13 I get discount or deals from this bank that most consumers not The prices I get from this bank are better than those other customers get They services for me that they not for most - 55- customers I am placed higher on the 14 priority list when there is a line I get master service than most 15 customers This bank is a good firm to 16 business with I am satisfied with the 17 competence of salesperson of this bank I am satisfied with the service 18 quality of this bank I am satisfied with the 19 relationship with this bank In general, I am satisfied with 20 the services offered by this bank When I need to make a 21 purchase, this bank is my first choice To me, this bank is the best 22 one to business with I believe that this is my 23 favorite bank I seldom consider switching 24 to another bank I will more business with 25 this bank in the future years - 56- Appendix B: Questionnaire In English Dear Sir/ Madam, I am a student of Master of Business program at ISB – University of Economics Ho Chi Minh City Now, I am studying the service quality of Vietnamese Banking industry On this purpose, I hope you could spend time completing this short questionnaire, which takes you no longer than minutes to finish Kindly be noted that there is no right or wrong answer, all of your responses are considered valuable to me.Your personal information will be kept confidential and not be disclosed without your permission If you have any concerns or questions relating this study, please not hesitate to contact me via email address: aitrannguyen88@yahoo.com Thank you very much for your kind support PART 1: SCREENING INFORMATION Have you used the term deposit banking service in the last months? Yes If the answer is “Yes”, please keep moving on question No If the answer is “No”, please stop answering here, thank you so much for your time! Which bank are you using term deposit service most often? a Vietcombank b Asia Commercial Bank (ACB) c HSBC d Shinhan Bank Vietnam Limited e Standard Chartered Vietnam Limited f Other:……………………… Your above selected bank is considered as bank X in the following questionaire: PART 2: MAIN CONTENT - 57- To what extent you agree with each of the following statements, please indicate your answer using the following 7-point scale where: = Strongly disagree = Disagree = Fairly disagree = Neutral = Fairly agree = Agree = Strongly agree I believe there is less risk that something will go wrong I feel I can trust bank X I am confident the service will be performed correctly by bank X I have less anxiety when I use services in bank X I know what to expect from bank X I get the bank X’s highest level of service I am recognized by bank X’s employees 10 11 12 I am familiar with the employee(s) that perform the service I have developed a friendship with bank X’s employees They know my name I get discount or deals from bank X that most consumers not The prices I get from bank X are better than those other customers get They services for me that they not for 13 14 15 most customers I am placed higher on the priority list when there is a line I get master service than most customers - 58- 16 Bank X is a good firm to business with I am satisfied with the competence of salesperson of 17 bank X 18 I am satisfied with the service quality of bank X 19 I am satisfied with the relationship with bank X In general, I am satisfied with the services offered 20 by bank X 21 When I need to make a purchase, bank X is my first choice 22 To me, bank X is the best one to business with 23 I believe that this is my favorite bank 24 I seldom consider switching to another bank 25 I will more business with bank X in the future years PART 3: PERSONAL INFORMATION This section of the questionnaire refers to background or biographical information The information will allow me to classify and compare groups of respondents Gender  Male Age group in years 