Service quality and customer service performance the case of vietnam joint stock commercial bank for private enterprises luận văn ths kinh doanh và quản lý 60 34 05

vietnam national university, HANOI school of business Nguyen Quynh Trang Service quality and customer service performance – The case of vietnam joint stock commercial bank for private enterprises Major: Business Administration Code: 60 34 05 Master of business administration thesis Supervisors: Dr.PHAM THI NHUAN DANG NGOC SU, MBA Hanoi – 2007 TABLE OF CONTENTS ACKNOWLEDGEMENTS i ABSTRACT ii TÓM TẮT iv TABLE OF CONTENTS vi LIST OF ABBREVIATIONS viii LIST OF FIGURES ix LIST OF TABLES x INTRODUCTION 1 Rationale Objectives & aims Hypotheses Scope of work Data resource & processing Methods & approaches Significance Limitations Expected results 10 Follow –up (potential) 11 Thesis structure PART 1: LITERATURE REVIEW AND RESEARCH METHODOLOGY CHAPTER 1: LITERATURE REVIEW 1.1 The nature of services and Characteristics of services 1.1.1 Why study services? 1.1.2 What is service? 1.1.3 Characteristics of services 1.2 Managing service quality 1.2.1 Service quality 1.2.2 Dimensions of service quality 1.2.2.1 Reliability 1.2.2.2 Empathy 1.2.2.3 Assurance 1.2.2.4 Responsiveness 1.2.2.5 Tangibles 10 1.2.3 Results of previous researches 10 1.2.4 The effect of employee behaviors on service quality dimensions 11 1.3 Measure of customer service performance 11 CHAPTER 2: RESEARCH METHODOLOGY 14 2.1 Study Design 14 2.2 Measures 14 2.3 Sampling 16 2.4 Data collection 17 2.4.1 Method of data collection 17 2.4.2 Questionnaire design 18 2.4.3 Questionnaire pretest 18 2.4.4 Respond rate 18 2.4.5 Procedure of Purification, Validity and Reliability 18 2.4.5.1 Procedure of purification and validation 18 2.4.5.2 Procedure of reliability 19 2.5 Summary 20 PART STATUS OF VPBANK AND DATA ANALYSIS 21 CHAPTER 3: STATUS OF VPBANK 21 3.1 General overview of VPBank 21 3.1.1 Vision and Mission 22 3.1.2 Core value and Business areas 22 3.2 Foundation and development process 23 3.3 Organization structure 25 3.4 Employees and Training Programs 26 3.5 Products & Services 26 3.6 Business operation results in 2006 26 3.7 Achievements 28 3.8 Orientation of business activities for 2007 29 CHAPTER 4: DATA ANALYSIS 31 4.1 Descriptive statistics 31 4.1.1 Demographics of the sample 31 4.1.2 Descriptive statistics of study scales 32 4.1.2.1 Descriptive statistics for five dimensions 33 4.1.2.2 Descriptive statistics of customer satisfaction 36 4.2 Reliability Test 37 4.3 Factor analysis 37 4.3.1 Factor analysis for reliability 38 4.3.2 Factor analysis for empathy 40 4.3.3 Factor analysis for tangible 42 4.3.4 Factor analysis for responsiveness 44 4.3.5 Factor analysis for assurance 46 4.4 Analysis of Relationships 48 4.4.1 Scatter grams 48 4.4.2 Collinearity problem 49 4.4.3 Multiple regressions analysis 49 4.4.4 Hypotheses Test 53 4.5 Summary 55 PART 3: CONCLUSION AND RECOMMENDATIONS 56 CONCLUSION 56 RECOMMENDATIONS 58 REFERENCES 64 APPENDICES LIST OF ABBREVIATIONS VPBank: Vietnam Joint Stock Commercial Bank for Private Enterprises CJS Bank: Commercial Joint- Stock Bank CA's: Cronbach's Alpha VIF: Variance inflation factor CS: Customer satisfaction LIST OF FIGURES Figure 1.1 Customer Perceptions of Quality and Customer Satisfaction ………… 12 Figure 3.1 VPBank's Organization Chart 25 Figure 3.2 Safety assurance ratios 27 Figure 3.3 mobilized Capital source 27 Figure 3.4 Structure of outstanding loans 28 Figure 4.1 Scree Plot of Reliability 40 Figure 4.2 Scree Plot of Empathy 42 Figure 4.3 Scree Plot of Tangible 44 Figure 4.4 Scree Plot of Responsiveness 46 Figure 4.5 Scree Plot of Assurance 48 LIST OF TABLES Table: 2.1 Measurement of five dimensions of service quality 15 Table 2.2 Measurement of Bank's Performance 16 Table 4.1 Demographic Descriptive Statistics 32 Table 4.2 Descriptive Statistics for Reliability 33 Table 4.3 Descriptive Statistics for Empathy 34 Table 4.4 Descriptive Statistics for Tangible 34 Table 4.5 Descriptive Statistics for Responsiveness 35 Table 4.6 Descriptive Statistics for Assurance 36 Table 4.7 Description Statistics of Customers' Satisfaction 36 Table 4.8 Reliability Statistics 37 Table 4.9 Total Variance Explained - Reliability 39 Table 4.10 Factor solution for Reliability 39 Table 4.11The Total Variance Explained - Empathy 40 Table 4.12 Factor solution for Empathy 41 Table 4.13 Total Variance Explained - Tangible 42 Table 4.14 Factor solution for Tangible 43 Table 4.15 Total Variance Explained - Responsiveness 44 Table 4.16 Factor solution for Responsiveness 45 Table 4.17 Total Variance Explained - Assurance 46 Table 4.18 Factor solution for Assurance 47 Table 4.19 Collinearity Statistics 49 Table 4.20 Results of Multiple Regressions 50 Table 4.21 Ranking the importance of dimensions 52 APPENDIX Appendix A: QUESTIONNAIRE 58 Appendix B: RESULTS OF DATA ANALYSIS 61 INTRODUCTION Rationale Joining the WTO, the Vietnam banking system has been heavily influenced by the international financial market in terms of exchange rates, interest rates and foreign currency reserves, while they must simultaneously carry out international obligations and commitments Competition will probably become much stronger when foreign banks expand their scale and scope of operations in the Vietnamese market Vietnamese commercial banks will need to cope with many difficulties in expanding their banking activities in the world and competing with foreign banks whose strength of capital, technology, services and global operational scale provide them with potential advantages Before these challenges, Vietnamese commercial banks, especially Joint Stock Commercial Banks have been giving out many strategies such as widening branches, interest competitiveness, or promotion campaigns, and so on However, all of them recognized that service quality was critical element to attract customers and necessary for effective competition Conscious of this fact, in recent year VPBank has placed great importance on improving service quality, thus all dimensions of service quality were concerned but the contribution level of each dimension of service quality has not identified yet Therefore, its needs to identify the relative importance of each quality dimension which impact to customer service performance of VPBank Objectives & aims Objectives of study The objective of this research is to investigate the relationship between five dimensions of service quality and Customer Service Performance of VPBank Aims of study VPBank's managers can use this instrument as a baseline for a longitudinal benchmarking program that is a means of comparing its performance from branch to branch or from year to year Hypotheses In this study, five dimensions of service quality including reliability, empathy, tangible, responsiveness and assurance were employed to evaluate the impacts of those dimensions on customer service performance of VPBank A below research model shows five relationships converted into five hypotheses Reliability Empathy Tangible Customer Service Performance of VPBank -Hanoi branch Responsiveness Assurance Hypotheses 1: A positive relationship exits between Reliability and Customer Service Performance of VPBank - Hanoi branch Hypotheses 2: A positive relationship exits between Empathy and Customer Service Performance of VPBank- Hanoi branch Hypotheses 3: A positive relationship exits between Tangible and Customer Service Performance of VPBank- Hanoi branch Hypotheses 4: A positive relationship exits between Responsiveness and Customer Service Performance of VPBank- Hanoi branch Hypotheses 5: A positive relationship exits between Assurance and Customer Service Performance of VPBank- Hanoi branch Scope of work This study focuses only on identifying the relative importance of five dimensions of service quality on customer service performance of VPBank Hanoi branch The target customers are retail customers of VPBank Because of the time and resources limitation to survey, this research surveys at VPBank Hanoi branch Data resource & processing Data resource In view of the research's nature and in order to ensure the reliability of the findings, it becomes necessary to collect data from primary source A survey was therefore undertaken through hand- distributed questionnaire technique Questionnaires were personally delivered to and collected from customers came VPBank to implement transactions during the period of survey Data Processing After collecting the raw data, these data must be transformed into information that will answer the manager's question The conversion of raw data into information requires that the data was edited and coded so the data may be transferred to a computer and SPSS software version 13.0 for Windows was used to analyze data Each possible response to each question in the questionnaire was coded in the ways that conform to the requirements of this program After the data was coded, the data were then ready to be analyzed Methods & approaches This study used quantitative method to collect information about the perceived personality through a questionnaire All responses in questionnaire expressed in numbers analyzed quantitative Significance For theoretical significance: The research enhances understanding of how five dimensions of service quality with customer satisfaction were In addition, it adds to the knowledge of services marketing and research marketing For empirical significance: This is the first empirical study to date in VPBank to examine the relationships between five dimensions of service quality and customer service performance of VPBank at Hanoi branch VPBank's managers can use this instrument as a baseline for a longitudinal benchmarking program Having a baseline will give VPBank's management a means of comparing its performance from branch to branch or from year to year Moreover, VPBank managers can use When bank implement the ideas that have been suggested, be sure to give credit to the one who submitted the idea and give some kind of appropriate award plus recognition in the company news and on bulletin boards, etc Carefully construct the physical work environment: can affect employee behaviors and emotions Providing physical activity for employees at the workplace The purpose is to encourage employees to become more physically active so they wellness contribute to the overall health and well-being of your employees, their families and the community Moreover, this way also help VPBank get more other advantages such as reducing health care costs, illness and injuries, absenteeism; enhancing recruitment and retention of healthy employees; Boosting morale in the workplace by recognizing employees Put a different twist to the "Employee of the Month" idea and create a bulletin board in a public room recognizing employees who are making a difference in the workplace or community Post their picture on the bulletin board and give monthly awards (best parking spot, off work at noon on Friday, etc) Feature them in your monthly newsletter Encouraging employees to better themselves Offer motivational CDs, books, videos, etc that they can check out through the Human Resources office Pay part (or all) of an employee's tuition if they are taking courses that will improve their work skills or pay for their books Holding meetings for example providing a social occasion, a break from routine, a chance to meet and talk with "company brass" and each other Organizing contest to spur the employees force to a special front line employee’s effort above what is normally expected REFERENCES Zeithaml,V.A, Bitner, M.J & Gremler D.D (2006) Service Marketing: Integrating Customer Focus Across the Firm, the Mc Graw-Hill, 4th edition Kotler, P.& Amstrong,G (1996) Principles of Marketing Prentice -Hall International, Inc 7th edition Burns, A.C & Bush, R.F (2005) Marketing Research: online research applications Prentice -Hall, 4th edition Kotler.P (2003) Marketing Management Prentice -Hall, 11th edition Gujati D.N (2003) Basic Econometrics, the Mc Graw-Hill, 4th edition Kumar, R (1999) Research Methodology: A Step-by-Step Guild for Beginer SAGE Publications edition 1999 Grant, D.B (2003) Customer Service, Satisfaction & Service Quality in UK Food Processing Logistics Heriot - Watt University, EH17 8TW, Edinburgh, UK Anomynous (2003), Customer Service Center, A Knowlagent White Paper Zikmund, W.G (1997) Business Research Methods 5th edition, The Dryden Press Florida 10 C.Lovelock & L.Wright Principle of Service Marketing and Management Ebook 11 Zeithaml, V.A., Parasuraman, A & Berry, L.L (1990) Delivering Quality Service: Balancing perceptions & Expectations, New York City , New York: Free Press APPENDIX A QUESTIONNAIRE No: _ The purpose of this survey is to deal your opinions about aspects of service quality and customer satisfaction about delivery services Results of this survey will be presented only in the framework of the thesis Your help is vitally important for researcher to obtain a valid result of the study For each statement, please mark the most appropriate response following the instruction in each section SECTION BACKGROUND INFORMATION Please tick your response for the following demographic data Sex: Male ○ Female ○ Age: 20-29 ○ 30-39 ○ Occupation: Business ○ Education: 40-49 ○ Student ○ High school ○ University○ 50-59 ○ Staff ○ Master○ SECTION Instructions: First evaluate the services provided A "5" represents good service, "1" is poor,"3" is average If you feel that we perform this service well Then circle "5" If you feel that we perform at a poor level, then circle "1" Please use the remaining numbers to describe less extreme feelings Dimensions Very Poor Average Good poor Very good Reliability Employees send timely information Timeliness of service Documentations are correct Employees care about resolving problems Employee is dependable Employees give customer personal attention Employees have convenient service features Employees care customer's best interest Employees understand customer's needs Employees appear neat and tidy Facilities and equipments are modern and pleasing Information material visually appealing Employees are always willing to help customer Employees give you prompt service Employees inform customer exactly when services 5 Empathy Tangible Responsiveness will be performed Employees are never busy too respond to customers' requests Assurance Employee’s behavior instills trust You feel safe in your transactions with employees Employees are courteous Employees are knowledgeable Second, please, give your overall satisfaction with the services that they receive from the bank Very Dissatisfied dissatisfied Neither Satisfied satisfied nor Very Satisfied dissatisfied Based on experience your with Bank, how satisfied have you been with delivery services? THANK FOR YOUR COOPERATION! APPENDIX B RESULTS OF DATA ANALYSIS Factor Analysis of Reliability a Component Matrix Communalities Q1 Q2 Q3 Q4 Q5 Initial 1.000 1.000 1.000 1.000 1.000 Extraction 795 770 786 826 349 Q1 Q2 Q3 Q4 Q5 Extraction Method: Principal Component Analysis Compone nt 892 877 886 909 590 Extraction Method: Principal Component Anal a components extracted Total Variance Explained Component Total 3.525 731 468 178 098 Initial Eigenvalues % of Variance Cumulative % 70.503 70.503 14.620 85.123 9.359 94.482 3.559 98.041 1.959 100.000 Extraction Sums of Squared Loadings Total % of Variance Cumulative % 3.525 70.503 70.503 Extraction Method: Principal Component Analysis Rotated Component Matrixa Scree Plot a Only one component was extracted The solution cannot be rotated Eigenvalue 1 Component Number Factor analysis of Empathy Component Matrixa Communalities Q6 Q7 Q8 Q9 Initial 1.000 1.000 1.000 1.000 Extraction 747 707 008 881 Q6 Q7 Q8 Q9 Extraction Method: Principal Component Analysis Compone nt 864 841 090 938 Extraction Method: Principal Component Analysis a components extracted Total Variance Explained Component Total 2.342 997 471 189 Initial Eigenvalues % of Variance Cumulative % 58.557 58.557 24.932 83.489 11.784 95.273 4.727 100.000 Extraction Sums of Squared Loadings Total % of Variance Cumulative % 2.342 58.557 58.557 Extraction Method: Principal Component Analysis Rotated Component Matrixa Scree Plot a Only one component was extracted The solution cannot be rotated 2.5 Eigenvalue 2.0 1.5 1.0 0.5 0.0 Component Number Factor analysis of Tangible Component Matrixa Communalities Q10 Q11 Q12 Initial 1.000 1.000 1.000 Extraction 822 805 814 Extraction Method: Principal Component Analysis Compone nt 906 897 902 Q10 Q11 Q12 Extraction Method: Principal Component Analysis a components extracted Total Variance Explained Component Initial Eigenvalues % of Variance Cumulative % 81.357 81.357 9.757 91.114 8.886 100.000 Total 2.441 293 267 Extraction Sums of Squared Loadings Total % of Variance Cumulative % 2.441 81.357 81.357 Extraction Method: Principal Component Analysis Rotated Component Matrixa a Only one component was extracted The solution cannot be rotated Scree Plot 2.5 Eigenvalue 2.0 1.5 1.0 0.5 0.0 Component Number Factor Analysis of Responsiveness Component Matrixa Communalities Q13 Q14 Q15 Q16 Initial 1.000 1.000 1.000 1.000 Extraction 805 833 520 485 Q13 Q14 Q15 Q16 Extraction Method: Principal Component Analysis Compone nt 897 913 721 697 Extraction Method: Principal Component Analysis a components extracted Total Variance Explained Component Initial Eigenvalues % of Variance Cumulative % 66.078 66.078 17.930 84.007 13.750 97.757 2.243 100.000 Total 2.643 717 550 090 Extraction Sums of Squared Loadings Total % of Variance Cumulative % 2.643 66.078 66.078 Extraction Method: Principal Component Analysis Rotated Component Matrixa Scree Plot a Only one component was extracted The solution cannot be rotated 3.0 2.5 Eigenvalue 2.0 1.5 1.0 0.5 0.0 Component Number Factor Analysis of Assurance Component Matrixa Communalities Q17 Q18 Q19 Q20 Initial 1.000 1.000 1.000 1.000 Extraction 659 582 678 749 Q17 Q18 Q19 Q20 Extraction Method: Principal Component Analysis Compone nt 812 763 823 865 Extraction Method: Principal Component Analysis a components extracted Total Variance Explained Component Total 2.668 550 468 314 Initial Eigenvalues % of Variance Cumulative % 66.700 66.700 13.753 80.452 11.708 92.160 7.840 100.000 Extraction Sums of Squared Loadings Total % of Variance Cumulative % 2.668 66.700 66.700 Extraction Method: Principal Component Analysis Rotated Component Matrixa Scree Plot a Only one component was extracted The solution cannot be rotated 2.5 Eigenvalue 2.0 1.5 1.0 0.5 Component Number SCATTERGRAMS Legend Total SCATTERGRAMS OF RELIABILITY Fit line for Total 66 Scale 5.00 120 100 80 60 4.50 40 20 CS 4.00 19 3.50 R Sq Linear = 0.671 25 3.00 3.00 3.50 4.00 Reliability 4.50 5.00 Legend Total SCATTERGRAMS OF ASSURANCE Fit line for Total Scale 5.00 66 120 100 80 60 40 4.50 20 CS 10 4.00 3.50 R Sq Linear = 0.598 25 39 3.00 3.00 3.50 4.00 4.50 5.00 Assurance Legend Total SCATTERGRAMS OF RESPONSIVENESS Scale 5.00 Fit line for Total 66 120 100 80 60 40 4.50 20 CS 57 4.00 3.50 R Sq Linear = 0.603 25 39 3.00 3.00 3.50 4.00 Responsiveness 4.50 5.00 Legend Total SCATTERGRAMS OF EMPATHY Fit line for Total Scale 5.00 66 120 100 80 60 4.50 40 20 CS 24 4.00 52 3.50 R Sq Linear = 0.569 25 39 3.00 3.00 3.50 4.00 4.50 5.00 Empathy Legend Total Fit line for Total SCATTERGRAMS OF TANGIBLE Scale 5.00 75 66 100 80 60 40 20 4.50 CS 23 4.00 3.50 R Sq Linear = 0.254 25 39 3.00 3.00 3.50 4.00 Tangible 4.50 5.00 Multiple Linear Regression Analysis b Variables Entered/Removed Model Variables Entered Assuranc e, Tangible, Empathy, Responsiv eness, Reliability Variables Removed a All requested variables entered b Dependent Variable: CS R 912a Enter a Model Summary Model Method b Adjusted R Square 826 R Square 832 Std Error of the Estimate 17720 a Predictors: (Constant), Assurance, Tangible, Empathy, Responsiveness, Reliability b Dependent Variable: CS ANOVAb Model Regression Residual Total Sum of Squares 22.312 4.521 26.833 df 144 149 Mean Square 4.462 031 F 142.122 Sig .000a a Predictors: (Constant), Assurance, Tangible, Empathy, Responsiveness, Reliability b Dependent Variable: CS Coefficientsa Model (Constant) Reliability Empathy Tangible Responsiveness Assurance a Dependent Variable: CS Unstandardized Coefficients B Std Error 387 134 284 046 149 045 085 027 236 041 140 046 Standardized Coefficients Beta 344 173 123 290 170 t 2.901 6.178 3.292 3.150 5.702 3.076 Sig .004 000 001 002 000 003 ... identifying the relative importance of five dimensions of service quality on customer service performance of VPBank Hanoi branch The target customers are retail customers of VPBank Because of the time and. .. Responsiveness and Customer Service Performance of VPBank- Hanoi branch Hypotheses 5: A positive relationship exits between Assurance and Customer Service Performance of VPBank- Hanoi branch Scope of work... LIST OF ABBREVIATIONS VPBank: Vietnam Joint Stock Commercial Bank for Private Enterprises CJS Bank: Commercial Joint- Stock Bank CA''s: Cronbach''s Alpha VIF: Variance inflation factor CS: Customer