The factors influencing customer satisfaction at bank for investment and development of vietnam sai gon branch bidv sai gon

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@OUM OPEN UNIVERSITY MALAYSIA RESEARCH PROJECT (BMBR5103)

THE FACTORS INFLUENCING CUSTOMER SATISFACTION AT BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM - SAI GON BRANCH

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BUSINESS RESEARCH ae a! Contents CHAPTER 1: INTRODUCTION Là HH HH HH HH HH TH TH TH TH KT TT TH nhanh tràn 5 1 Problem statemen†: Ác nh HH T9 0 9 ĐT TT Hà th ng và 5 2 Research Obj©CfÏV€: nà HH K1 TH Thế nem kh tk KH KG kh 6 3 Research QU©SfÏOPS: LH HH HH KT He HT ti ng ng it v98 KH tt rkg 6

4 Scope and methodology of researCh: c4 TH 111 11122121 1 1e HH nh th 6

CHAPTER 2: THEORETICAL FRAMEWORK - - - S22 2n n «Hành Tàn họ tì Hà tt nh ket, 7

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Abstract:

The main objective of this study is to identify all the main factors that influence the customer satisfaction in banking at the present contemporary global and highly competitive economy This research will find out that Corporate image, Tangible, Staff conduct, Service quality, Price, Credibility, Customer interaction and Convenience are critical factors influenced customer satisfaction with Corporate image, Tangible, Staff conduct and Service quality were four hypotheses that had the biggest influence on

business customer satisfaction

CHAPTER 1: INTRODUCTION 1 Problem statement:

Nowadays the trend of globalization, international and area economic integration is rapidly developing along with the development of scientific technology and the market opening Service quality, service charges, perceived value and customer satisfaction are the key sources of success in any service factory (Olorunniwo and Hsu, 2006) For many years customer satisfaction has been a major goal of business organizations, since it has been deemed to affect customer retention and companies’ market share (Hansemark and Albinsson, 2004)

Customer’s satisfaction have strong influence on the efficiency and financial performance of banks (Al-Hawari and Ward, 2006) Customer is factor that decides the existence of the bank If bank has the customer’s concern and loyalty, it will win and develop Business strategy focuses on consumers is becoming the most important business strategy Collaboration with customers in business, attracting new customers and strengthening existing customers is becoming an effective business tool with a small amount of additional cost but provides high effective business results How to bring the best satisfaction to customers always is the problem that banks have to do

with all their abilities

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Furthermore, customer satisfaction will be useful for creating customer loyalty which is necessary to maintain regular operations of the bank The improvement of service quality, perceived value, and satisfaction ensure customer loyalty (Kuo et al.,

2009; Lai et al., 2009; Wu and Liang, 2009) However, in competition, the creation of

customer loyalty is not sure that customer will stick with bank for long term Banks need to be proactive in the maintenance and development of relationships between customers and banks

Therefore, study customer satisfaction in banking sector is an important work, has to be done regularly and continuously to be able to respond promptly to the changes in customer demand, make them satisfy when using the services and products

of bank

2 Research objective:

- Investigate the factors affecting customer satisfaction

- Recommend solutions to improve customer satisfaction to BIDV Sai Gon’s services and products

3 Research questions:

- Are customers satisfied with the products and services and quality of service BIDV Sai Gon or not?

- What are factors that affect business customer satisfaction for quality of products/services provided at BIDV Sai Gon?

- What solutions can help improve business customer satisfaction for banking

product and service quality at BIDV Sai Gon in the future?

4, Scope and methodology of research: 4.1 Scope of research:

- The research project on the factors influencing the customer satisfaction at the Bank For Investment and Development of Vietnam, JSC — Sai Gon Banch

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- The research project is based on primary data and secondary from 2012 to 2014, focusing primarily on the factors related to customer satisfaction for banking product and service quality at BIDV Sai Gon

- Subjects of study are business customers, not individual customers 4.2 Limitation of research:

- Subjects of study are business customers with its own characteristics on demand service, criteria for evaluating service quality and perceiving price services to business

customers, so research results can not response used simultaneously to all customers

- Research scope limited to customers using the service at BIDV Sai Gon in Ho Chi Minh city area should not be assessed on overall customer groups in different local and potential customers may not use bank service

- Study looks at just the time and number of bank customers use, not understanding customer satisfaction in relation to business, financial resources and ethnic factors

4.3 Structure of thesis: - Chapter 1: Introduction

- Chapter 2: Theoretical framework - Chapter 3: Research design

- Chapter 4: Empirical result and discussion - Chapter 5: BIDV Sai Gon Overview

- Chapter 6: Conclusion and recommendation

CHAPTER 2: THEORETICAL FRAMEWORK

1 Customer satisfaction:

Customer satisfaction involves determining the degree to which a company’s products or services meets the requirements of the customer as an end user

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Pairot (2008) defined Customers satisfaction as the company's ability to fulfill the business, emotional, and psychological needs of its customers In the words of Oliver (1981, p.27), customer satisfaction is “the summary psychological state resulting when the emotion surrounding disconfirmed expectations is coupled with the consumer's prior feelings about the consumption experience.” Customer satisfaction has also been defined by Hunt (1977, p.459) as “an evaluation rendered that the (consumption) experience was at least as good as it was supposed to be.” Furthermore, Engel and Blackwell (1982, p.501) have opined it to be “an evaluation that the chosen alternative is consistent with prior beliefs with respect to that alternative.” It is a well- researched fact that investments in customer satisfaction, customer relationships and service quality leads to profitability and market share Rust and Zahorik (1993) Put differently, customer satisfaction leads to customer loyalty and this also leads to profitability Hallowell (1996) If customers are satisfied with a particular high quality service offering after its use, then they can be expected to engage in repeat purchase and even try line extensions and thus market share can be improved

Levesque and McDougall (1996) have empirically confirmed and reinforced the notion that consistent poor customer experience leads to a decrease in the levels of customer satisfaction and the chances of further willingness to recommend the service (i.e., word-of-mouth advertising or referrals) is lessened Previous researches have shown strong linkages between service quality dimensions and overall customer satisfaction (Anderson and Sullivan (1993)) Service quality is accepted as one of the basic factors of customer satisfaction (Parasuraman et al., (1994)) However, there is much debate whether customer satisfaction is a precursor of service quality judgements (Parasuraman et al., (1985) and Bitner et al., (1990)) or the other way round (Anderson and Sullivan, (1993)) Definitive analysis has showed that service quality cannot be divorced from the concept of customer satisfaction Recent studies have shown that satisfaction is influenced by not only perceptions of service quality but also by perceptions of product quality, and pricing factors as well as situational and personal factors (Zeithaml and Bitner, (2000)) For example, customer satisfaction with retail banking will be a broader concept and will certainly be influenced by perceptions of service quality but will also include perceptions of product quality (such as variety of deposit options available to customers), price of the products(i.e., charges charged by the bank or rates offered by the banks on various deposits), personal factors such as the

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consumers emotional state, and even uncontrollable situational factors such as weather conditions and experiences in conveying to and from the bank

2 Service quality:

2.1 Concept of service quality

For a long time, many researchers have tried to define and measure service

quality For example, Lehtinen & Lehtinen (1982) mentioned that the quality of service must be judged on two aspects, (1) the process of service provider and (2) the results of the service Grénroos (1984) also suggested that the two components of service quality are (1) technical quality, which is what customers receive and (2) functional quality, which interpret how services are provided According to Hubert (1995), before using the service, customers have formed a "script" on that service When screenplays of customers and suppliers are not identical, customers will feel dissatisfied Cronin and Tailor (1992) suggested that customer satisfaction should be reviewed in short time, and the service quality should be reviewed by the attitudes of customers for that service in a long time

However, when it comes to service quality, we can not fail to mention the huge

contribution of Parasuraman et al., (1988, 1991) Parasuraman et al., (1988, page 17) defines service quality as the difference between the consumers’ expectations of services and their perceptions of the service’s outcome

2.2 Service quality measurement

2.2.1 SERVQUAL Model

Service quality is measured by a variety of factors and accurately identifying these elements depends on the nature of services and research environment There are many authors have studied this issue, but the most popular and best known is the service quality’s review criteria of Parasuraman et al

In 1985, Parasuraman et al gave 10 decisive factors of service quality which are

listed below:

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BUSINESS RESEARCH 1 Accessibility 2 Quality of communication 3 Competence 4 Courtesy 5 Credibility 6 Reliability 7 Responsiveness 8 Security 9 Tangibles

10 Understanding the customers

In 1988, these authors initiated and used the qualitative and quantitative research to build and test the scale of service quality’s components (SERVQUAL scale) SERVQUAL scale was adjusted and tested in many different types of services SERVQUAL model was built based on the perceived standpoint of service quality as a comparison between the expected values/expectations and value which customer received SERVQUAL consider two aspects of service quality is service result and service process which were studied through 22 scales of 5 criteria: reliability, responsiveness, assurance, tangibles and empathy

a Reliability

Trust is the ability to provide service accurately, on time and reputably This requires consistency in the implementation of services and commitment as well as keeps the promise to the customer

b Responsiveness

This criterion measures the ability to solve problems quickly, handle complaints effectively, ready to help customers and satisfy the requirefhents of customers In other words, responsiveness is the feedback from service providers with what customers

want

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c Assurance

This is the factor that makes up trust for customers which is perceived through good Service quality service, technical knowledge, courtesy and social skills So that customers will feel assurance when using service of provider

d Tangibles

Tangibles are reflection outside of the physical facilities, equipment, machinery,

staffs’demeanour, documentation, manuals and information systems of service

provider In general, what all customers are directly visible to the eye and the senses can impact factors

e Empathy

Empathy is the considerable concern, care for customers, give them the most attentive treatment in order to make customer feel being always warmly welcomed

Human is core part to make up the success of this factor and the more provider cares

customers, the more empathy if customers increases 2.2.2 SERVPERF Model

Two authors Cronin and Taylor (1992) have adjusted SERVQUAL scale into SERVPERF scale They said that the evaluation of customers’ perceive for services is more important than the evaluation of customer expectations SERVPERF scale has only one group of survey questions about the customers’ awareness of the services which they received from providers

2.2.3 FSQ and TSQ Model

According to Grénroos (1984), service quality is reviewed based on two criteria: functional service quality (FSQ) and technical service quality (TSQ) and service quality is strongly affected by corporate image As a result, Grénroos gave 3 factors affecting service quality are functional service quality, technical service quality and corporate image (called FTSQ Model)

a Technical service quality

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It is the quality which customers received through access to providers and is perceived important for customers In other words, technical service quality is the result of the interaction between providers and customers in which enterprises provider service and the customers receive this service There are 5 criteria to evaluate this factor: e Problem-solving skills e =âService quality Skills  Operational proficiency e Modern equipment

e Information storage system

b Functional service quality

Functional service quality represents the service implementation process and reflects how services are provided In the relationship between the two quality’s

aspects, functional service quality plays a more important role which is represented

through 7 following criteria: e Convenience in transaction e Behaviors ¢ Service attitude ¢ Organizations of business enterprise e Customer contact e Courtesy e = Spirit of all for customers c Corporate image

Corporate image is construed as general impression of customers about

enterprises, under which, if the enterprises create a good image in the customer's mind,

they easily bypass these deficiencies occur during service using Grénroos (1984) also

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showed that corporate image was invaluable assets of enterprises and had a positive impact to the customers’ evaluation about service quality, product value and their satisfaction

Moreover, corporate image make customers more trust enterprises and become

loyal customers of enterprises (Andreassen and Lindestand, 1998) As a result, the corporate image has an impact on service quality and customer satisfaction It is noteworthy that, customers who often use the services of the enterprises will have more

accurate feeling than other customers (Johnson, Fornell, Andreassen, Lervik and Cha,

2001)

Corporate image is seen as filter device to help the relationship between customers and enterprises better and more sustainable Additionally, customers evaluate corporate image good or bad through their feeling for enterprises and compare

corporate image with other competitors However, the influence level, more or less,

depends on the specific enterprise

3 Service quality and customer satisfaction:

According to Spreng and Mackory (1996), service quality and customer satisfaction are inarguably the two concepts that are so difficult to explain in marketing theory and practice In 2001, Yang argued that when comparing the performance of a product or service with their expectations before purchasing, if it exceeds the

expectation, the satisfaction of customers would be increased However, four years

later, Saha and Zhoa (2005) gave out a new definition of satisfaction like “a collective outcome of perception, evaluation and psychological reactions to the consumption experience with a product or service”

The appraisal-emotional response-coping attitudinal framework of Bagozzi (1988) thought that service quality is a construct oriented to awareness, while satisfaction is an emotional construct It is the reason that many researchers suggested service quality is an antecedent of satisfaction After that, in 2003, Woldfinbarger and

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Gilly discovered a positive relationship between overall service quality and satisfaction in case of fixed web retailing; also, Montoya-Weiss et al found out an evidence to prove the relationship between service quality and satisfaction by analyzing the determinants of online channel preference for a multichannel service provider

4, Price and the relationship between price and customer satisfaction: Price which is showing form by the currency of goods value and services is determined based on the value of the usage and feeling of the customers on products, or services that they use Customer does not have to buy products and services with the highest quality; they will buy these products and services that make them satisfaction most Therefore, factors such as customer perception of price and cost (usage cost) will not affect the quality of services, but will impact on customer satisfaction (Cronin and Taylor, 1992)

In many previous studies on customer satisfaction, the impact of price factor received little attention compared to other criteria (Voss et al., 1998) However, with the increasingly strong competition of the market and changes in customers’ cognizance on products and services, researchers have determined that price and customer satisfaction have strong relationship (Patterson et al., 1997) Therefore, if not mention to this factor, the study of customer satisfaction will lack accuracy

When buying products or services, customers would have to pay a cost to reclaim the usage value which they need As a result, the cost then is called exchange

price in order to have desired value from products and services Only when the

perceived service quality which customers get is more than usage cost, price will be considered competitiveness and customers will be satisfied Conversely, customers will dissatisfy because they feel that they have to pay more than what they receive and the price in this case will impact negatively on customer satisfaction

This is the relationship among price, value and perceived price However, perceived price is the factor affecting customer satisfaction Maybe the price is more

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than the received value, but customers feel reasonable, they still satisfy and vice versa In the study of the relationship between perceived price and customer satisfaction, Varki and Colgate (2001) also demonstrated that these two factors interact with each other and depend on the customer's sensitivity to price as well as the relationship between the service user and the service provider In addition, to evaluate the impact of pricing factors to customer satisfaction, we need to consider more fully in the three following aspects (Maythew and Winer, 1982):

e Price compared with quality

e Price compared with competitors

e Price compared with customers’ expectations

Therefore, when considering the impact of price on customer satisfaction we need to recognize more fully that the price here include the costs and opportunity costs to get products and services as well as correlation of the price with the aspects

mentioned above Within the scope of this research, the price factor is considered as

the competitiveness of perceived price If customers perceive the higher competitiveness of price, the more they satisfy and vice versa

5 Conceptual framework and hypotheses:

5.1 Theorical model

SERVQUAL is popular model and widely used in marketing research This model is useful in generalizing criteria that measure the service quality but it has many

disadvantages (Babakus & Boller, 1992; Brown et al., 1993; Buttle, 1996; Genestre &

Herbig, 1996; Gilmore & Carson, 1992; Robinson, 1999; Hemmasi et al., 1994) and, if it is applied strictly to measure the quality of banking services, it will not appropriate in the following aspects:

e Measurement criteria are general

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BUSINESS RESEARCH a aa e¢ Focus more on measuring providing process than services implementation results

e Comparation the distance between quality expectations and perceived

quality is difficult to determine because of considering many scales and not be determined directly based on actual service performance

Therefore, measurement criteria of SERVQUAL can not be applied in all areas It must be adjusted to suit with each case study to ensure high accuracy SERVPERF model is based on SERVQUAL but more focus on quality of service performance and

also includes 5 criteria as mentioned above (reliability, responsiveness, assurance,

tangibles and empathy) So, it is also not selected as a research model

For research on customer satisfaction in the banking sector, model of technical quality and functional quality of Grénroos is more affordable (Lassar et al., 1998), by the following reasons:

Firstly, FTQS model focuses on two key aspects of service quality is the functional quality (how enterprise provide its service) and technical quality (which services enterprise provide) Bank is sector which requires communication, constant communication between customers and bank employees so the implementation process would be particularly important for customers in evaluating service quality Meanwhile SERVQUAL model did not analysis how bank provide service and which service bank provides

Secondly, as banks also offer similar services and fewer errors occur, the

customer will pay more attention to the process of service implementing to evaluate service quality of bank For the deployment of advanced services for customers, functional quality factor becomes increasingly more important because it affirms the level of services provider and marks differences between enterprise and other competitors

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Thirdly, some measurement criteria of SERVQUAL model are also considered in

FTSQ model through research scales and useful for analyzing service quality feasibly and more affordably

From the above advantages and disadvantages, author will refer FTSQ and

SERVQUAL model for this research When bulding up the model, the authors still

consider the key factor impact on customer satisfaction is the service quality (6 factors: Convenience, Tangibles, Staff Conduct, Service Portfolios, Customer Interaction, Credibility) followed by the Price Competitiveness and final is Corporate Image Convenience >= Figure 1: Theorical model 5.2 Hypotheses:

- Hypothesis 1: Convenience has positive impact on customer satisfaction - Hypothesis 2: Tangibles has positive impact on customer satisfaction - Hypothesis 3: Staff conduct has positive impact on customer satisfaction

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- Hypothesis 4: Service portfolio has positive impact on customer satisfaction - Hypothesis 5: Customer interaction has positive impact on customer

satisfaction

- Hypothesis 6: Credibility has positive impact on customer satisfaction

- Hypothesis 7: Price competitiveness has positive impact on customer satisfaction

- Hypothesis 8: Corporate image has positive impact on customer satisfaction

CHAPTER 3: RESEARCH DESIGN

1 Research methodology:

The main objective of this study is to identify all the main factors that influence business customer satisfaction at BIDV Sai Gon To do research on customer satisfaction at BIDV Sai Gon, the author will combine qualitative and quantitative research by studying the literature review and case studies on customer satisfaction Additionally, the activities policy of banks, the relationship between research and other factors will also be considered in an objective manner and synchronized to achieve precise and practical research results

2 Data collection method:

a Primary source:

- Interviews, discussions with staff/banking leaders to better understand the viewpoints and plans as well as their review about research problems

- Questionnaires received from customers The questionnaires will be sent to all the

business customers through transaction offices of BIDV Sai Gon in Ho Chi Minh city b Secondary source:

- Secondary information sources will be collected through: - Banking magazines, newspapers

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- Marketing magazines, newspapers

- Research articles about services and service quality - Activity reports of BIDV Sai Gon

- Internet

3 Qualitative research:

This is a preliminary study to screen the variables included in the model study,

examination of the scale used, refer to the comments from banks and customers about

research problems, thereby building scale studies included in the model and set the questionnaire

First, the author will prepare some questions for discussion, exchange of staff and bank management with content focused on research issues:

- Bank assessment of satisfied customers how to banking products and services - Bank of comments about service quality model in banking sector

- Bank has comments about the service quality benchmarks

- Bank has an opinion about the expectations of customers in the future - The scale of customer satisfaction is not fair presentation

- Banks use the scale to measure the level of customer satisfaction - How to bring satisfaction to our customers

On the client side, the authors randomly selected 10 customers to participate in direct interview, which recorded their opinions about banking services and their expectations for the bank

After conducting qualitative research, 8 factors of the model study of customer

satisfaction can be used for further research is quantitative study, 3 criterias for

measuring the level of customer satisfaction

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BUSINESS RESEARCH ee Variable Indicators

Convenience 1 Convenient transaction location

2 Wide agent network

3 Easy and quick transaction procedure

Tangibles 1 Modern equipment and technology

2 Attractive posters, brochures, leaflet, handouts

3 Clear and easy-understood transaction documents 4 Well dressed and Service quality

Staff conduct 1 Great interests in solving the customers’ complaints

Well-trained with high competence

Accurate and timely service implementation Always available for the services aA BB W bP Polite and consistently courteous with customers

Service portfolios 1 Rich and diversified service portfolio

2 Always provide new services to satisfy the customers’ demands Customer interaction 1 Usually contact and visit customers 2 Having hotline 24/24 3 Holding annual meeting to show appreciation for customers’ contribution 4 Consider customers’ rights as its prime concern Credibility 1 Ensure customers’ information and transaction confidentially

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BUSINESS RESEARCH a Competitive interest rate WwW k2 Reasonable transaction fees

Corporate image Always honor commitment to customers

Having great innovation and social contribution

Launching effecttive and efficient marketing activities

Boe

No

Having right stratefy for sustainable development

Customer satisfaction 1 Satisfaction level of customers with the service quality

2 Ability to meet the customers’ demands 3 Continue using services

4 Population and sample:

All of business customer at BIDV Sai Gon are the population of this study 5 Sample size:

According to DeCoster, J (2004), minimum sample size used in statistic analysis should be is equal to or greater than five times of the number of variables, but not less than 100 to generate reliable results:

n >= 100 and n >= 5k (where k is the number of variables)

This research has 28 variables, as a result, the minimum sample size required to run EFA in this research is:

n=5x28= 140

Otherwise, Tabachnick & Fidell (2001) stated that the minimum sample size in case of multiple regression should be:

n = 50+8m (where m is the number of independent variables)

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Summarily, with 28 variables and 8 independent variables, this research needs 140 samples at least to take EFA and regression Hence, 200 surveys were distributed to target respondents to take the data for analysis

6 Analysis method:

Collected data will be processed through using SPSS version 16.0 analytics tool

7 Quantitative research:

7.1 Objective:

Quantitative research was conducted to test the scale of the research model This

is a detailed analysis of collected data through questionnaires which are sent to the client to determine the logical correlation of these factors together and then give specific results of these research

7.2 Process research:

a Construction questionnaire

b Determine the number of samples needed for research

c Send to customer surveys

d Contact the client to monitor the response e Get feedback from customers

f Data processing through the use of SPSS analysis tools in the following order: ® Descriptive Analysis

e Analysis of the reliability of the scales e Factors analysis

e Building integrated research model

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One of the forms of measurement which is the most used in quantitative research is Rennis Likert scale Rennis Likert introduced scale with 5 levels from 1-5 to assess to what extent the respondents Normally, we will use the multi-aspect scale and simple aspect scale to set up scales and build up questionnaires

There are 200 questionnaires sent to business customers selected on the basis of

data banks and regional evenly distributed in the following forms: email (50) and for

arrivals transactions at the bank (150) with the support of the department: customer service, payment card service, international payments, individual customer

management

There were 154 questionnaires were collected (32 votes by mail, 122 votes from transaction counters) with response rates of 77%, while 8 votes were rejected due to invalid Therefore, the remaining number of samples to be analyzed 146 votes

Research model of this thesis consists of 8 independent variables of 28 variables Therefore, the sample size required is 140 or more The number of samples used in the study was 146 samples that should be representative of the sample is guaranteed to research performance

Thus, after the number of samples are colllected, the author will use the SPSS

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BUSINESS RESEARCH 91 | STCO3 Right service implementation at the first time Price competitiveness (TCTG) 22 | TCTGO1 | Flexible pricing policies 23 | TCTGO2 | Competitive interest rate 24 | TCTGO3 Reasonable transaction fees Corporate image (HADN) 25 | HADNOI | Always honor commitment to customers 26 | HADNO2 | Having great innovation and social contribution 27 | HADNO3_ | Launching effecttive and efficient marketing activities 2g | HADNO4 | Having right stratefy for sustainable development Customer satisfaction (SHL) 29 | SHLO1 Satisfaction level of customers with the service quality 30 | SHL02 Ability to meet the customers’ demands 31 | SHLO3 Continue using services 7.4 Questionnaire design: a Objectives:

- Study customer’ expectation for banking service at BIDV Sai Gon - Scale customer satisfaction

- Test the factors influencing customer satisfaction

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a

Questionnaire is designed by 5 parts with 02 scales of customer information, 10 scales of customer expectation, 28 scales of factors affecting customer satisfaction, 3 scales of determining level of customer satisfaction and customer recommendation (Appendix 1)

- Part 1: Customer information

+ Question 1: Time of using banking service + Question 2: Number of transaction bank - Part 2: Customer expectation

- Part 3: Factors affecting customer satisfaction - Part 4: Customer satisfaction level

+ Question 1: Overal banking service

+ Question 2: Capacity to meet customer demandes + Question 3: Continue to use banking service

- Part 5: Customer recommendation

CHAPTER 4: BIDV SAI GON OVERVIEW

1 BIDV’s introduction:

Founded on 26/04/1957, BIDV is the oldest Commercial Bank in Vietnam As a long- established bank, BIDV has funded many investment projects and key economic areas of the country Joint Stock CommercialBank for Investment and Development of Vietnam (BIDV) has also built the largest enterprise customers, while confirming the implementation of prestigous items, objectives, economic programs and social security of the country

Full name: Ngan hang TMCP Dau tu va Phat trién Viét Nam

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Bank: BIDV functions as a leading experienced bank of finance services, brokerage, loan syndication and advisory,modern, convenient banking products

Insurance: BIDV provides products for non-life insurance designed to match the overall package to customers of BIDV

Stock: BIDV provides a wide range of brokerage services, investment and investment consultant with the ability of quickly developing a system of agents to receive orders nationwide

Financial investments: BIDV includes financial leasing, security trading and capital contribution with the aim at establishing investment companies to the project; Especially, it plays a leading role in coordinating key projects of the country such as company Aviation stock leasing (VALC) development company highway (BEDC), Investment, Long Thanh International Airport

2 BIDV Sai Gon’s introduction:

BIDV Sai Gon was established since 2002, head office was placed in dynamic

economic center in Ho Chi Minh city BIDV Sai Gon is one of the branchs of Joint Stock

Commercial Bank for Investment and Development of Vietnam (BIDV) As a long

established branch, BIDV Sai Gon fully has operated functions as a commerical bank, including: loan, deposit, finance services, brokerage, advisory, foreign exchange, and

convenient banking products BIDV Sai Gon trades with corporations, big corporations, small and medium enterprises; individuals

All of human resource policies at BIDV Sai Gon that has been followed the general policies of BIDV Viet Nam, such as: recruitment process, salary, promotion, training activities, bonus, working time, holiday vacations,

a Organization structure:

—_—_—_—_——E——— rT —EE———EEEEEETeEE———————E eee EE EEE 7e

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[BUSINESS RESEARCH Earning Before Tax 2 145 144 Ss 140 & 135 130 130 125 121 120 115 110 105 2012 2013 2014

CHAPTER 5: EMPIRICAL RESULTS AND DISCUSSION

1 Determinant of customer expectations:

Result in Figure 4.1 shown 3 criteria that customers expect most of the banks in order: STT03 Easy and quick transaction procedure (Mean: 1.81); PCPV01_Great interests in solving the customers’ complaints (Mean: 1.99); (3): TCTG03_Reasonable transaction fees (Mean: 2.97) When data analysed , the most favorite expectations is measured on a scale from 1 to 3, and the others are 4 The results (Figure 4.1) shows that most customers expect from the bank is the Service quality service and reasonable prices as well as the general trend of the market that is reached will now occupy the

position certain competitive

Figure 4.1: Descriptive Statistics Of Customer Expectation N Minimum | Maximum Mean Std Deviation STTO3 146 1 4 1.81 956

errr errr reer rT TT aE eT aT ee

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BUSINESS RESEARCH IPCPV0I 146 1 4 1.99 1.003 TCTG03 146 1 4 2.97 747 STTO2 146 1 4 3.81 688 IPCPV02 146 1 4 3.85 579 IPCPV03 146 1 4 3.91 406 IHADNO1 146 l 4 3.92 398 SHH03 146 2 4 3.93 325 DMSP01 146 2 4 3.95 257 SHH0I 146 2 4 3.97 202 Valid N (listwise) 146 2 The factors affecting customer satisfaction: 2.1 Service quality:

As shown in Figure 4.2.1, in 21 variables of service quality, there are 6 variables agreed by most customers: PCPV01_ Great interests in solving the customers’ complaints (Mean: 4.01); STT03_ Easy and quick transaction procedure (Mean: 3.95);

PCPV02_Well-trained with high competence (Mean: 3.94); STCO]_ Ensure

customers’ information and transaction confidentially (Mean: 3.86), DMSPO1_ Rich and diversified service portfolio (Mean: 3.84): DMSP02_ Always provide new services to satisfy the customers’ demands (Mean: 3.82)

However, in Figure 4.2.1 also showns the level of customer agrees are not the same in the observed variables Five variables agreed at the lowest mean score: SHHO1_ Modern equipment and technology (Mean: 3.18); STTOJ_Convenient transaction location (Mean: 3.24); SHH03_Clear and easy-understood transaction

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documents (Mean: 3.26); SHH04_ Well dressed and Service quality (Mean: 3.27); and STTO2_ Wide agent network (Mean: 3.40)

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ne

2.2 Price competitiveness:

As shown in Figure 4.2.2, most customers are very interested in the price when deciding to use the service TCTGO1_ Flexible pricing policies (Mean: 3.76), TCTG03_ Reasonable transaction fees (Mean: 3.51) and TCTG02_ Competitive

interest rate (Mean 3.45)

Figure 4.2.2: Descriptive Statistics Of Price Competitiveness N Minimum |Maxinum| Mean |Std Deviation TCTG01 146 1 5 3.76 755 TCTG02 146 1 5 3.45 611 TCTG03 146 1 5 3.51 656 Valid N (listwise) 146 2.3 Corporate image :

As shown in Figure 4.2.3, the 2 most agreed variables by customers are HADNO1_ Always honor commitment to customers (Mean: 3.62) and HADNO2_ Having great innovation and social contribution (Mean: 3.51)

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BUSINESS RESEARCH oe HADN04 146 3 5 3.44 538 Valid N (listwise) 146 2.4 Customer satisfaction:

Survey results (Figure 4.2.4) shows that the level of customer satisfaction for banks is quite high, in which three variables observed scale of customer satisfaction are Mean > 3.9 said they would continue to use banking services in the future This is a good sign for the performance and reputation of the bank for many years It also requires banks need more efforts to further improve the quality of service and keeping customer satisfaction Figure 4.2.4: Descriptive Statistics Of Customer Satisfaction N Minimum|Maximum| Mean Std Deviation SHLO1 146 2 5 3.94 357 SHL02 146 2 5 3.94 393 SHL03 146 2 5 3.92 354 Valid N (listwise) 146 3 Analysis of measurement scales: 3.1 Cronbach’s alpha

Cronbach’s alpha reliability analysis method was used to test the reliability of the measurement scales The scales are reliable when Cronbach’s alpha coefficient of each scale is equal to or bigger than 0.7 (Pallant 2005), in exploratory research it may decrease to 0.6 (Robinson/Shaver/Wrightsman 1991) Besides, those items which have the value of Corrected Item-to-total Correlation less than 0.3 could be discarded in order to improve reliability level of the measurement scale

a

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BUSINESS RESEARCH

a

3.1.1 Convenience (STT):

About Convenience factor (STT), the observed variables (Figure ) have a correlation coefficient of total variable fit> 0.3 and Alpha coefficient> 0.6 (.687) to meet the requirements of reliability can be put into factor analysis Reliability Statistics Cronbach's Alpha N of Items 687 3 Item-Total Statistics

Scale Mean if | Scale Variance if] Corrected Item- |Cronbach's Alpha Item Deleted Item Deleted | Total Correlation| if Item Deleted STT01 7.28 727 542 541 STT02 7.11 6091 615 447 STT03 6.64 798 366 769 3.1.2 Tangibles (SHH):

About The tangible factor (SHH), the observed variables have a correlation coefficient of total variable fit> 0.3 and Alpha coefficient> 0.6 (.724) to meet the requirements of reliability can be put into factor analysis Reliability Statistics Cronbach's Alpha N of Items 724 4 Item-Total Statistics

Scale Mean if Item} Scale Variance if | Corrected Item- | Cronbach's Alpha

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BUSINESS RESEARCH a Item-Total Statistics

Scale Mean ifItem| Scale Variance if | Corrected Item- | Cronbach's Alpha

Deleted Item Deleted Total Correlation | if Item Deleted SHH01 11.32 1.100 482 681 SHH02 11.47 982 567 629] SHH03 11.43 1.130 480 682 SHH04 11.45 1.007 526 656 3.1.3 Staff conduct (PCPV)

About factor Staff conduct (PCPV), the observed variables are the total variable correlation coefficient fit> 0.3 and Cronbach’s Alpha reach to 0.649, so Staff conduct can be used to analyze factors Reliability Statistics Cronbach's Alpha N of Items .678 5 Item-Total Statistics

Scale Mean ifItem| Scale Variance if | Corrected Item- | Cronbach's Alpha Deleted Item Deleted Total Correlation | if Item Deleted PCPV0I 15.27 1.452 497 597 IPCPV02 15.34 1.758 337 664 PCPV03 15.48 1.534 513 596 PCPV04 15.51 1.521 489 603 IPCPV05 15.53 1.354 377 673 3.1.4 Service portfolios (DMSP)

About factor Service portfolios (DMSP), the observed variables are the total variable correlation coefficient fit> 0.3 but Cronbach’s Alpha less than 0.6 (.576), so Service portfolios could not be used to analyze factors

EEE

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BUSINESS RESEARCH ee Reliability Statistics Cronbach's Alpha N of Items 576 2 Item-Total Statistics

Scale Mean if Item| Scale Variance if | Corrected Item- | Cronbach's Alpha Deleted Item Deleted Total Correlation | if Item Deleted

DMSP01 3.38 292 428 |

DMSP02 2.97 579 428 4

a The value is negative due to a negative average covariance among items This violates reliability model assumptions You may want to check item codings

3.1.5 Customer interaction (CSKH)

About factor Customer interaction (CSKH), the observed variables are the total variable correlation coefficient fit> 0.3 and Cronbach’s Alpha reach to 0.812, so Customer interaction can be used to analyze factors Reliability Statistics Cronbach's Alpha N of Items 812 4 Item-Total Statistics

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el

3.1.6 Credibility (STC)

About factor Credibility (CSKH), the observed variables are the total variable

correlation coefficient fit > 0.3 and Cronbach’s Alpha reach to 0.911, so Credibility can

be used to analyze factors Reliability Statistics Cronbach's Alpha N of Items 911 3 Item-Total Statistics

Scale Mean if | Scale Variance if | Corrected Item- | Cronbach's Alpha if Item Deleted Item Deleted Total Correlation Item Deleted STC01 7.53 747 707 964 STC02 7.64 495 908 803 S5TC03 7.61 571 891 813 3.1.7 Price competitiveness (TCTG)

About factor Price competitiveness (TCTG), the observed variables are the total variable correlation coefficient fit > 0.3 and Cronbach’s Alpha reach to 0.917, so price competitiveness can be used to analyze factors Reliability Statistics Cronbach's Alpha N of Items 917 3 Item-Total Statistics Cronbach's Scale Mean if Item] Scale Variance if | Corrected Item- Alpha if Item

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ae

3.1.8 Corporate image (HADN):

About factor Corporate image (HADN), the observed variables (Figure 4.3.1.7) are the total variable correlation coefficient fit > 0.3 and Cronbach’s Alpha reach to 0.837, so corporate image can be used to analyze factors Reliability Statistics Cronbach's Alpha N of Items .840 4 Item-Total Statistics

Scale Mean if | Scale Variance if| Corrected Iem- | Cronbach's Alpha

Item Deleted Item Deleted | Total Correlation | if Item Deleted HADN0I 10.27 2.214 .504 .880 H 2 ADNO 10.39 2.129 799 750 N HADN13 10.57 1.999 729 772 IHADN04 10.46 2.181 709 784 3.1.9 Customer satisfaction (SHL)

About factor Customer satisfaction (SHL), the observed variables (Figure 4.3.1.9) are the total variable correlation coefficient fit > 0.3 and Cronbach’s Alpha reach to 0.795, so corporate image can be used to analyze factors Reliability Statistics Cronbach's Alpha N of Items 795 3

—————— —————E ——EE OEE EEE rE EEE sen

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BUSINESS RESEARCH ae Item-Total Statistics

Scale Mean if | Scale Variance if| Corrected Item- | Cronbach's Alpha if

Item Deleted Item Deleted | Total Correlation Item Deleted SHLO1 7.54 926 648 — -799 SHL02 7.56 869 677 677 SHL03 7.45 1.035 592 767

3.2 Exploratory Factor Analysis (EFA):

The primary objectives of EFA are to determine the number of factors affecting the measures and the strength of the relationship between each factor and each observed measure (DeCoster, J., 2004) In this research, Principal Component Analysis (PCA) was used as a method to extract the factors with Varimax as a rotation technique

The result is considered to be acceptable when following conditions are met:

« Factor analysis is appropriate to data if:

> The Kaiser-Meyer-Olkin value (KMO): 0.5 < KMO < 1

> The Bartlett’s test of sphericity is statistically significant: p < 0.05 « The number of factors is determined when:

> The components have an eigenvalue of 1 or more

> The total variance explained by these components should be above

50%

> Factor loading criteria should be 0.5 or more to ensure a practical significance

Factor Analysis is the statistical tool that has been used for data analysis In analysis part initially IKMO (Kaiser-Meyer-Olkin) and Bartlett's Test was applied to the collected data Kaiser-Meyer-Olkin Measure of Sampling Adequacy test shows the value of 0.631 and has been found significant as shown in Table 1 And it was found

en _— _

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BUSINESS RESEARCH ae out after the test that Factor Analysis can be applied on the data The KMO Test detail are as follows: Table 1: KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy 63]

Bartlett's Test of Sphericity Approx Chi-Square 2.520E3

df 325

Sig .000

The research to identify significant and smaller numbers of factors as the respondents were asked for twenty-three observed variables related to customer satisfaction have used the factor analysis technique The Principal Component Analysis extraction method was used to analyze the data with Varimax Rotation Method The extracted communalities ranged from 0.546 to 0.915

For clarity of the factor definitions, factor loadings of more than 0.500 were considered The factor analysis yielded 8 factors in all which explaining 76.841 percent of total variance as explained in Table-2 Which shows that 76.841 percent of total variance is explained by information contained in the factor matrix

Analysis gives an overview of component matrix and rotated component matrix where in Principal Component Analysis extracts the five components and the rotation

method of Varimax with Kaiser Normalization Table 2: Communalities Initial Extraction STT01 1.000 716 STT02 1.000 753 ST103 1.000 673 SHH01 1.000 553 SHH02 1.000 817

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