Evaluation of the satisfaction of course attendants of the professional production director ppd training program

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Av HOCHIMINH CITY OPEN UNIVERSITY Project EVALUATION OF THE SATISFACTION OF COURSE ATTENDANTS OF THE PROFESSIONAL PRODUCTION - DIRECTOR — PPD TRAINING PROGRAM TRƯỜNG BI HOC Ad Te.HcHL THU VIEN

Submitted in partial fulfilment of the requirement for the degree

of master in industrial business management

PHAM QUOC DU 2011

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Dissertation of Master of Industry Business Management Reported by Pham Quoc Du

Abstract

In the trend of the integration of Vietnam economic into the world economic, the

perception about the importance of manpower is a must and it also very needed for investment

the education and training in people for national development This porject is linked to the

investigation the satisfaction of the course attendants so that we understand deeply the position of the training program in oder to adapt possitively to contribute much for the edudation and training career in Vietnam

Study about the need and satisfaction of the course attendant of the training program

Professional Production Director after they completed and applied in practical condition is a big

challenge of the our training and corrdiationg team but we love this mission and made effort for this project like a process approach

Besides the economic performance that the training service with PPP brings back to the team it is also a motivation for us to contribute to the education and train carreer in Vietnam We are always ready to be challenged in tuburlent competition environment in order to level up our competitive advantage in the training business

Beyond the development the program, I myself always percept as a Associate trainer, I have to contituous improve my self not only knowledge, skills but also the attitude with the training job and the expection of the train nees that why I select this project with all my love for the course , the training team, the training center and all above is the course attendant who have toghetehr building up the managerial talents with us in the trianing process via PPP program

I am ambitious to study more and more, applied the knowledge that we we have got from the program MIMB deloyment in Vietnam with the high confidence level in order to contribute to sustainable development of myself , company as well as the society

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¡ FUROMED Dissertation of Master of Industry Business Management 4 MANAGEMENT Reported by Pham Quoc Du TABLE OF CONTENTS Statement of Authorship 2 Dedication 3 Abstract 4 Table of contents 5 7 List of tables List of charts and figures _ List of appendices 12 List of abbreviations 13 Chapter I : INTRODUCTION 14 1.1 General Introduction 14

1⁄2 Subject studied, reasons, purpose 19

1.3 Objectives of the research topic 20

1.4 _ Overall structure of the report 23

Chapter II: SERVICE QUALITY LITERATURE REVIEW 24

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FUROME OME ENT Dissertation of Master of Industry Business Management Reported by Pham Quoc Du

3.2 Scope and limitation 44

3.3 Source of information, sampling & survey option 45 3.4 Questionnaire design and Data collection 46

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Dissertation of Master of Industry Business Management

Reported by Pham Quoc Du

LIST OF TABLES

1 Table 1.1: Professional Production Director/PPD Outline 18 2 Table 1.2: PPD recruitment course attendants target and performance from 19

2008 - 2010

3 Table 3.1 Milestones of the research 41

4 Table 3.2: Summary of response during survey 49

5 Table 4.1: Gender distribution of respondents 5

6 Table 4.2 : Position handling distribution of respondents of survey 51

7 Table 4.3: Descriptive Statistics of overall result 53 8 Table 4.4: Illustration of suggestion types and quantity from respondents 55 9 Table 4.5: Illustration of the percentage of total respondents advise the 55

suggestions for improvement

10 Table 4.6: Illustration of the percentage distribution of suggestions for 56 improvement

11 Table 4.7: Coding of suggestion types from respondents 57

12 Table 4.8: Suggestion for improvement summary 63

13 Table 4.9: Descriptive statistics of the evaluation result on four driving factors 64 and level of satisfaction (part E)

14 Table 4.10: Anova analysis result of the factors and level of satisfaction (part 64

E)

15 Table 4.11: Descriptive statistics of the evaluation result of respondents on 65

factors (1), (2) (4) and level of satisfaction (part E)

16 Table 4.12: Anova analysis result of the evaluation result of respondents on 65 factors (1), (2) (4) and level of satisfaction (part E)

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17 _ Table 4.13: Descriptive statistics of the evaluation result of respondents on 66 factors (1), (2) and level of satisfaction (part E)

18 Table 4.14: Anova analysis result of the evaluation result of respondents on 66 factors (1), (2) and level of satisfaction (part E)

factors (1), (2) (4)

20 Table 4.16: Anova analysis result of the evaluation result of respondents on 67

factors (1), (2) (4)

21 Table 4.17: Descriptive statistics of the evaluation result of respondents on 68 factors (3) and level of satisfaction (part E)

22 Table 4.18: Anova analysis result of the evaluation of respondents on factors 68 (3) and level of satisfaction (part E)

23 Table 4.19: Summary of ANOVAs testing from A,B, C,D 68 24 Table 4.20: Descriptive statistics of the evaluation result of respondents on 69

elements of factor (3) documentation

25 Table 4.21: Anova analysis result of the evaluation result of respondents on 69 elements of factor (3) documentation

26 Table 4.22: Descriptive statistics of the evaluation result of respondents on 70 elements of Level of satisfaction (part E)

27 _ Table 4.23: Anova analysis result of the evaluation result of respondents on 71 elements of Level of satisfaction (part E)

elements of Level of satisfaction (part E) with condition removed course fee

element

29 Table 4.25: Anova analysis result of the evaluation result of respondents on 72 elements of Level of satisfaction (part E) with condition removed course fee

element

elements question 26, 27, 28, 30 of Levelof satisfaction (part E)

31 Table 4.27: Anova analysis result of the evaluation result of respondents on 73

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elements question 26, 27, 28, 30 of Level of satisfaction (part E)

32 Table 4.28: Descriptive statistics of the evaluation result of respondents on 74 ranking topics in training program content

33 _ Table 4.29: Anova analysis result of the evaluation result of respondents on the 74 evaluation result of respondents on ranking topics in training program content

ranking topics in training program content in the order from most to less important

35 Table 4.31: Summary the most concerned topics from respondent’s feedback 75

36 Table 4.32 : Regression Statistics of effect question 23 and 24 on question 25 76

37 Table 4.33: ANOVA testing result of question 23 and 24 on question 25 76

38 Table 4.34: Regression analysis of question 23 and 24 on question 25 76

39 Table 4.35: Regression Statistics of effect question 25 on question 28 77

40 Table 4.36: ANOVA testing result of question 25 on question 28 77

41 Table 4.37: Regression analysis of question 25 on question 28 78

42 Table 4.38: Regression Statistics of effect question 29 on question 25 78

43 Table 4.39: ANOVA testing result of question 29 on question 25 78

44 Table 4.40: Regression analysis of question 29 on question 25 79

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m EUROMED Dissertation of Master of Industry Business Management

MANAGEMENT Reported by Pham Quoc Du 45 Table 4.41: Regression Statistics Question 25 affecting whether concerns feed 79 backed 46 Table 4.42: ANOVA testing result of Question 25 affecting whether concerns 79 feed backed 47 Table 4.43: Regression analysis Question 25 affecting whether concerns feed 80 backed

48 Table 4.44: Findings from survey result analysis 83

49 Table 4 45: Summary of input from training expert in HCM city pedagogy 84

university about the program content development

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ĐT EHIENT Dissertation of Master of Industry Business Management Reported by Pham Quoc Du

LIST OF CHARTS AND FIGURES

1 Figure 1.1: PPD training program brochure — Program introduction page No 2 15

2 Figure 1.2: PPD training program brochure detailed outline — page 3 17 3 Figure 1.3: The conceptual model for research 22

4 Figure 1.4: Process of study feedback from training experts about PPD program 22

content

5 Figure 1.5: Overall structure of the report 23

6 Figure 2.1: The effect of value-adding strategies in long term relationship 28

7 Figure 2.2: Model of a process — based quality management system 32 8 Figure 2.3: The pyramid of loyalty levels 34

9 Figure 3.1 Research process 39

10 Figure 3.2: Data calculation and analysis process 43 11 Figure 3.3: Sequence of the questionnaire design process 47 12 Figure 4.1: Gender distribution of respondent chart 51 13 Figure 4.2: Position handling distribution of respondents of survey chart 52 14 Figure 4.3: Illustration the training schedule choice of respondents 54

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LIST OF APPENDICES

Appendix 1: Survey questionnaire

Appendix 2: Distribution of business types of respondents and their position in company Appendix 3: Data of Factor Content and Objectives of training program

Appendix 4: Data of Factor 2 — Training method

Appendix 5: Data of Factor 3 - Documentation of training program

Appendix 6: Data of Factor 4 — Logistic arrangement of training program Appendix 7: Data - Factor 4 — Logistic arrangement of training program Appendix 8: Data - Course attendant satisfaction level

Appendix 9: Data - Training topic ranking

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LIST OF ABBREVIATIONS

MIBM: Master of Industrial Business Management

PPD: Professional Production Director

KPI: key performance indicator

TQM: Total quality management

HACCP: Hazard Analysis Critical Control Point

GMP: Good manufacturing practice

OHSAS: Occupational Health and Safety Assessment Systems ISO: International Standard Organization

CEO : Chief Executive Officer

CPO : Chief People Officer

CMO : Chief Marketing Officer

CCO : Chief Customer Officer programs

CRM: Customer relationship Marketing

IT : Informatics technology OJT : On the job training

ERP: Enterprise Resource Planning

VICI: Vietnam Japan Cooperation institute

AOTS: Association of Oversea Technical Scholarship

SME: Small and Medium Enterprises

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Chapter I: INTRODUCTION

1.1 General Introduction

Vietnam is one of the emerging countries in Asia that has the competitive advantage of cheap labour force so Vietnam is becoming a low cost centre of manufacturing with many foreign investment especially This is one of the motive for many industrial zones with many

manufacturing facilities setting up in recently even in the time of the World economy down turn happened from late 2008 up to now but the opportunities for local labour force is also

challenged for training and developing working people particularly for direct labour and indirect manpower so called middle management that how to work and how to be suitable in term of knowledge, skill and competencies in new age of economic investment today

The training and developing for middle management is becoming a critical need as well as challenges for Vietnam because the localization of middle management is a strategic plan for most of foreign direct investment or joint venture enterprises because of low cost of operation pressure This make the middle management level in Vietnam has to develop their capability not only via working but also via attending training for professional level up

To study and be aware this opportunities from the challenge above, PACE, an institute for manager Established in 2001 and headquartered in Ho Chi Minh City, Vietnam PACE provides business education and training for business leaders and managers, and implements and develops a wide range of mission-driven not-for-profit educational projects has developed

The training program PPD — Professional Production Director is one of the public training

services of PACE for respective Manufacturing managers because PACE believes that deepening the business and management skills and knowledge of business leaders is critical for companies and organizations to become competitive, not only nationally, but also globally

while the specific professional training for technical management general or manufacturing managers is not many in Vietnam even in Southern areas where has many industrial zones as

mentioned above

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m EUROMED

_ MANAGEMENT Dissertation of Master of Industry Business Management + Reported by Pham Quoc Du

The training program introduction: Brochure of the PPD training program — Page 2 — Training program key messages to the attendants Figure 1

Chuong trinh dao tao

GIAM DOC SAN KUAT

PPD

Prelesslonal Productlon Direetor

THÀNH PHAN THAM DỰ

p là những người tham gia vào quá trình hoạch định chiến lược sản xuất của doanh nghiệp

Những người dang là Giám đốc sản xuất, Giám đốc chất lượng, Giám đốc chuỗi cung ứng;

Phó các Phòng / ban / Bộ phận liên quan đến hoạt động sản xuất và hậu cần

ác công ty trong và ngoài nước dang mong muốn được trang bị những

kiến thức và kỹ năng vẻ sản xuất và quản trị sản xuất nhằm trở thành một Giám đốc

Sản xuất chuyên nghiệp:

Những người đang là chuyên viên, chuyên trưởng, đội trưởng, những người tham gia

trực tiếp vào hoạt động sản xuất và hậu cản sản xuất của các công ty trong và ngoài nước

*_ Những người có hoài vọng trở thành “Giám đốc Sản xuã

DIEU KIỆN THAM DỰ:

chuyên nghiệp” trong tương,

Để tham dự chương trình này một cách thành công, người học cần phải có ít nhất một trong,

số những điều kiện sau:

= Da tat nghiệp dại học hoặc cao đẳng (không phân biệt chuyên ngành) »- Đã từng hoặc dang nắm giữ vị trí quản lý quan trọng trong cơng ty «- Có ít nhất 2 năm kinh nghiệm làm việc

MỤC TIÊU ĐÀO TẠO

«Giúp Học viên biết được một "Giám đốc Sản xuất" (PPD) chuyên nghiệp là người như thế nào? Biết được những ai và làm thế nào để có thể trở thành một PPD chuyên nghiệp; * Trang bị cho Học viên những tư duy và nhận thức cốt lõi nhất, những kiến thức và kỹ năng

cơ bản nhất mà bất kỳ một PPD chuyên nghiệp nào cũng cản phải trang bị MỤC TIÊU HỌC TẬP Sau khi hoàn tất chương trình học này, bạn có thể:

Hiểu được sự thay đổi về vai trò và j thế của một Giám dốc Sản xuất trong thời đại ngày nay; Hiểu được những xu hướng mới và quan trọng nhất về sản xuất t va quản trị sản xuất của i

Nắm được tư duy và kiến thức cốt lời mà một PPD trong thời đại ngày nay cần có, chẳn

hạn như: Chân dung PPD; Tổ chức Phân xưởng / Nhà máy; Chiến lược và Kế hoạch Quin lý Sản xuất & Hệ thống Quản lý Chất lượng; Một số Mô hình Quản lý Sản xuất

ý m soát Chỉ phí Sản xuất; Quản lý Hậu cẩn Sản xuất; An toàn Lao độ trường; Quản lý Đội ngũ (trong sản xuấu),

“TRƯỜNG DOAIHI NHÂN PACE - TH THÂN HỚ, CON NGƯỜI MỚI CHỌ HỀN KEM DOANH MỚI i ji: +84 (8) 3837.0208 - 2 +84 (8) S404.1173 an | PACE

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Deny Dissertation of Master of Industry Business Management

+ Reported by Pham Quoc Du

The content of page in English

TRAINING PROGRAM

Professional Production Director

PROFESSIONAL PRODUCTION DIRECTOR Participants

- Corporate management involved with company strategy planning - Production management people

- Supporting management people for production department - Potential staff with passion to become Production managers

Condition of participation

In order to to be successfully participate the program, the course attendants should satisfy one of the following conditions:

- Graduated from colleges of university with out any requirement about the disciplines

- Having been being at important position in the company - Having at least two years of working experience

Training objectives

Help the course attendants to know and understand how is a professional production

director and know who can be a professional production directors

Provide the course attendants the most core thinking’s and perceptions, knowledge, basic skills that is necessary for any Production manager always to equip

Learning objectives

After completing the course, you are able:

To understand the roles and responsibilities of an production director in new age and trends of production management in Vietnam as ‘well as the international manufacturing

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m TP EDIENT Dissertation of Master of Industry Business Management

: + Reported by Pham Quoc Du

To master the key knowledge of all topics in the program that will covey to the new age production managers need to be equipped for their profession

Chương trình đào tạo = ~ PACE | cumatesinxuar | {>| >[D Khoi déu cho thế hệ PPD mói Professional Production Director www.PACE.edu.vn ‘ CHUYÊN bé / SUBJECTS 7] Wacrunsangiaesy TT eres aero ee fraliuti Neat chức và trong chế lực Lịnhcheanh tổng thế 4 Cu hey cheek paint và xây dựng tag 4/16

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nang pháp mai nhất của thể gội về bàu cần sản xuất

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~ Giờ hi vác phẫn mến khuyến dung tong quan Iy hấu cần sán xuất

~ Em sát và cải tiến hậu cần củn xuất; các tu chỉ ánh giá và hệ thống bu cáo nội bồ | CA toà Lao động và Báo vệ Mới trưng,

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Professional Production Director/PPD Outline

` Reported by Pham Quoc Du # Subjects Duration Section] Period (hr)

1 |On Becoming a Professional Production Director (PPD) 1 4

2 |Management System of Manufacturer / Plant 2 8

3 |Production Planning & company Strategy 4 16

4 | Production Management & Quality Control System 4 16 = Production management & KPIs system

® Introduction ISO 9001 (quality management), ISO 22000 (Food safety management), TQM, HACCP, GMP

= Quality control online system and Build up Quality Monitoring Scheme based on customers/ consumer orientation)

5 | Introducing some Models of Modern Production Management 4 16

= Lean manufacturing

* Six Sigma in quality management = Just-In-Time

= 5S & Kaizen for quality and productivity improvement

6 |Managing & Controlling costs of manufacturer / plant 4 16

= Manufacturing cost with resource management : Direct labour, materials and overheads

7 | Labour Safety & Environment Protection, Introduction systems: 2 8 = OHSAS 18001 — 2000 safety management

= ISO 1400-1: Environment management

8 | Logistics Management introduction and inventory control 4 16

9 |Managing People 3 12

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1.2 Subject studied, reasons, purpose

The deployment of training program form years 2008 up to early 2011, the recruitment is not achieved objectives as mentioned below:

Target objectives Achievement Comment

1 Number of course > 03 to 04 courses per year | Below the target recruitment per year :

06 courses per year

2 Number of course > 25-30 members Below the target

attendants per course:

35 — 40 members

Table 1.2: PPD recruitment course attendants target and performance from 2008 - 2010

Based on the objective practical performance of the recruitment, we can ask many questions as follows as the problem statement above:

Question 1: The value of the course is good in perception of operation team includes: Training director (Training course design leader with Trainer’s cooperation), Trainer team, Training course management (Planning and administration manager ) but why we cannot have many attendants in the Leadership & Management segment such as: CEO - Chief Executive Officer Program, CFO - Chief Financial Officer, CPO - Chief People Officer, CMO - Chief Marketing Officer, CCO - Chief Customer Officer programs ?

Question 2: Is there any issue in relation of course attendant satisfaction about the

program?

Question 3: The investment of PACE in marketing for program such as: advertisement in

The Youth News Papers, Via communication seminars of event, direct sales but we are not

reaching the target from 2009 — 2011

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Question 4: As the preliminary analysis about the market of the southern area of Vietnam , we have the potential market but the service is not well-known and selected by direct customers

who are practioners in manufacturing areas or Indirect customers who are seeking the training

courses for their manufacturing management like CEO or Human resources managers?

1.3 Objectives of the research topic

From the questions above, I would like to set up the research in the project of graduation

MIBM 01 program as well as developing myself more about program in order to build up my knowledge, skills, competency in training professional that I want to be for my long term

career

With the limitation of time, I have been just focusing on the study of the feed back from

course attendants (trainees so called ) who had participated in the training program in six courses deployed in year 2009 — 2010 about the satisfaction of training program and try to find out some thing that is value for service

I am ambitious to contribute my effort via project as much as I can in order to know which factors are the most important and main focus from customer perception about program satisfaction in order to make more opportunities for myself as well as PACE institute and my colleagues in program delivery

I strongly believe that the satisfaction of direct customers of program will lead them to the

other complementary services provided by PACE That is the next step of their level up career path in their lives that many people are oriented to now in Vietnam

Taking the opportunity of research chance, I also plan studying the feed back of the

perception from indirect customers or so called_influencers of purchasing program service such as: Company Human Resources managers, CEO, or Training managers in some companies as

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representatives and experts in Training sector in Vietnam in order to study and help the design team to improve the training program continuously for gaining advantage competition for now

and the future in a highly competitive environment

In order to achieve these purposes, the research focuses on analyzing the developed

conceptual model from Evaluation of the satisfaction of trainees of the Professional Production Director - PPD Training Program, accordingly the following Research question and hypothesis are aimed to be tested:

1 What is level of satisfaction of course attendants about the program?

2 Hypothesis on the drivers of satisfaction

= Objectives and Content of the program = Method of training

= Documentation

= Logistic arrangement

3 What is the feed back from expert in training sector about the Program structure design and how do we anticipate the trend of program for moving forward in order to maintain and improve the competitive advantages of program

The conceptual model for research is defined base on the hypothesises of program satisfaction factors and proposed as below will be used in in-depth interview among target respondents

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m EEOC MEO ENT Dissertation of Master of Industry Business Management

Reported by Pham Quoe Du PROGRAM CONTENT & OBJECTIVES (————— TRAINING METHOD ) PROGRAM SATISFACTION CUSTOMER PERCEPTION FROM LOYALTY PROGRAM CUSTOMER DOCUMENTATION ———————' (—————— TRAINING LOGISTIC SERVICE Figure 1.3: The conceptual model for research PROGRAM DOCUMENTATION

Besides that the building up the professional level of Program design also focuses by studying and getting the advice and consult from experts in training sector in Vietnam as the process of study as following chart:

INTRODUCTION COLLECT ACTION PLAN ON

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F ED Dissertation of Master of Indust: ry Business Management

MANAGEMENT Reported by Pham Quoc Du

1.4 Overall structure of the report:

This research is divided into five chapters, chapter one is the introduction of the research project Chapter two is service quality literature review Chapter three is the research methodology that defines the method used entire the research After conducting survey, consolidating data and analyze by statistic, chapter four is content all the result analysis, the

results getting of Findings and Hypothesis testing, the outcomes contribute to the research

project that leads to the conclusion and recommendation in chapter five, the last chapter of the report The reference part includes all documents and resources that support for the project and the annex part will include questionnaire that is used for the survey of the research, those are not counted into chapters Research objectives Literature review of service quality Y Factors driving course attendant’s satisfaction

Program content Training Documentation Logistic

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¡ MANAGEMENT ` Reported by Phạm Quoc Du

Chapter Il: SERVICE QUALITY LITERATURE REVIEW

This literature review will present the theoretical foundation of customer satisfaction and

customer loyalty which consists of:

1) definition of customer satisfaction and; 2) customer loyalty;

3) maintaining and developing loyalty of customer

2.1 Service quality definition

In this research, we consider the training program is a service provided to the attendants

— direct customers

Service is not physical product Compared with physical product, service is considered

to be intangible, heterogeneous, produced and consumed concurrently, unable to be kept in

stock, etc A widely accepted definition of service is proposed by Grénroos (1990) as: “a service is a process consisting of a series of more or less intangible activities that normally, but not necessarily always, take place in interactions between the customer and service employees

and/or physical resources or goods and/or systems of the service provider, which are provided

as solutions to customer problems” (Grénroos, 2000) This definition implied that service is a process where there is interaction between customer and service provider available Hence, in a

service context, there is always a relationship between customer and service provider

In order to retain loyal customers who bring long-term profit to the firm, the key issue for service provider is to nurture this relationship in the way it manages customers by offering what customers need and want, not what it has

The quality of a service is subjectively perceived by customers during the interactions with a firm Grénroos (2000); Parasuraman et al (1988) defined service quality as the consumers’ judgment about a firm’s overall excellence or superiority What happened and

perceived by customers in the interaction process will obviously have critical impacts on

customers’ evaluation of service quality (Grénroos, 2000) Due to the special attributes of

service, the evaluation of service quality is more complex than evaluation of physical product

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quality There have been various ways for measurement of service quality proposed by previous researches and literatures The famous measurement model of service quality is SERVQUAL

developed by Parasuraman et al.(1988), who measured the differences between customer expectations and perceptions cross five determinants as follows:

° Tangibles: Appearance of physical facilities, equipment, employees and

communication materials from a service company

° Reliability: A service company’s ability to perform the promised service

dependably and accurately

° Assurance: employees’ knowledge and behaviour about courtesy and ability to convey trust and confidence

° Responsiveness: A service company is willing to help customers and provide

punctual services

° Empathy: A service company provides care and individualized attention to its

customers, as well as having convenient operating hours

Later, based on integrating previous studies and conceptual works, Grénroos (2000)

summarized seven criteria of good perceived service quality as: (1) professionalism and skills;

(2) employees’ attitudes and behaviour; (3) accessibility and flexibility;

(4) reliability and trustworthiness; (5) service recovery;

(6) serviscape; and

(7) reputation and credibility

The first criterion is outcome-related and thus a technical quality dimension; the last one

is image-related and fulfils a filtering function; and the remaining five criteria are process- related and present the functional quality dimensions

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Dent Dissertation of Master of Industry Business Management

High service quality is regarded as a key to succeed in competitive service markets

Many researchers have showed that service quality perceived by customers will directly

influence customers’ satisfaction, as well as their trust in the service firm (Parasuraman ef al., 1988; Aydin and Ozer, 2005; Ismail et al., 2006; etc.) Customers might be satisfied when a firm provides better services than their pre-purchase expectations

Customer trusts also emerge when customers perceive positive service quality from a

firm, and believe the service firm would bring preferable outcomes for them In practical

training industry which belongs to service industry, service quality is an important indicator to

assess a service provider’s performance Offering a high quality service is considered to be a visible way to create customers trust and satisfaction, as well as obtaining competitive

advantages and building a long-term relationship with customers

2.2 Perceived cost

Price is the monetary cost for a customer who buys products or services It is the critical determinant that influences customer buying decision Customers usually select their service providers strongly relying on perceived price How much consumers are willing to pay is different because of their different needs and wants, it also depend on customer’s feeling about the value of product or service Thus, the price perceptions to the same service products may

differ among individuals; “higher pricing perceived by consumers might negatively influence their purchase probabilities” (Peng and Wang, 2006) Price perception is also thought to be

“related to price searching” (Lichtenstein et al., 1993) Consumers tend to be attracted by perceived high-quality services at perceived competitive prices during the searching process

Oliver (1997) suggested that consumers often judge price relating to service quality, and

accordingly generate satisfaction or dissatisfaction, depending on the equity principle If a consumer perceives price as fairness, he or she is willing to conduct this transaction with the service provider Based on previous studies, Cheng ef al (2008) proposed that “price perception

can be measured by two dimensions: one is reasonableness of prices, which reflects the way that

price is perceived by customers comparing to that of competitors; another is value for money,

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which implies the relative status of the service provider in terms of price” In general, “high

quality services are considered to cost more than low-quality equivalents” (Chitty ef al., 2007)

Many researchers have pointed out that “price perception: influences customer satisfaction and trust” (Oliver, 1997; Peng and Wang, 2006; Cheng et al., 2008; Kim ef al., 2008) “Customer often switch mainly due to some pricing issues, e.g high price perceived, unfair or deceptive pricing practices” (Peng and Wang, 2006) Therefore, in order to increase customer satisfaction, it is essential for service providers to actively manage their customers’

price perceptions, e.g carrying out attractive pricing, offering reasonable prices mix, lower

prices without decreasing quality, etc

2.3 Value offered

“Customers will judge the value of consumption after contrasting benefits gained from products and services with their costs” (Zeithaml, 1988) “Service firms provide superior value through enhanced offers can improve customer satisfaction by increasing the customer’s perceived benefits and reducing the sacrifice so that customer retention is improved” (Ravald and Grönroos, 1996)

Ravard and Grénroos also proposed that the customer perceived value is favourable

correlation with perceived benefit and unfavourable correlation with perceived sacrifice

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` Reported by Pham Quoc Du Perceived benefits Customer perceived value = - Perceived sacrifice

The effect of value adding strategy is shown in illustration below:

Increasing the benefits/ Reducing the sacrifice

Episode

value Stimulaterepurchasing activity Safety <—rebtion—> Security Credibility Relationship ae value + Loyalty

Mutually; proftablereationslip for Supplier and Customer

Figure 2.1: The effect of value-adding strategies in long term relationship

(Source: Ravald and Grénroos, 1996)

According to figure illustration above, It is clear that “companies execute certain value- adding strategies can increase customer’s perceived benefits and reducing customer’s perceived sacrifices, which in turn stimulate customer repurchasing activities and remain in the same service provider In a long-term relationship, customer perceived value offered is related to both episodes and expectations” (Ravald and Grénroos , 1996) “When customer’s expectations are satisfied, they will feel safety, credibility, and security as perceived value in this relationship, which all together increase trust and then enhance customer’s loyalty” (Ibid)

Therefore, “companies should concern about customer’s value from customer’s point of view, and thoroughly understand customer’s value chain in order to be able to reduce customer- perceived sacrifice” (Wilson and Jantrania, 1995) “Increasing the customer benefits means adding something to the core product that the customer perceives important, beneficial and of unique value” (Annika Ravald and Christian Grénroos) In training sector, it is essential for

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provider to offer something valuable to customers in order to gain customer satisfaction and trust, which are expected to enhance customer loyalty

2.4 Promotion

According to Wikipedia, “Promotion is one of the four elements of marketing mix (product, price, promotion, distribution) It is the communication link between sellers and buyers for the purpose of influencing informing, or persuading a potential buyer's purchasing

decision” (http://en.wikipedia.org/wiki/Promotion_marketing) Promotion can be divided into two types:

¢ Above the line promotion: All the Promotion activities shown in the media (eg

television, radio, newspapers, internet, brochure ), this type of promotion is carried out

by the advertising agency and the advertiser will pay for the agency

¢ Below the line Promotion: All other promotion activities besides above the line

activities Most of these activities are direct promotion and targeted to the consumers that are not aware of above the line activities Most popular below the line activities are

sponsorship, endorsements, sampling, merchandising, direct mail, personal selling, public relation, trade shows

To create the promotion mix or promotional plan required the specification for the five sub-elements of marketing mix (personal selling, advertising, sales promotion, direct marketing, and publicity) A promotional mix specifies clearly the attention to pay for each sub-elements as

well as budget plan for it An effective promotional plan must have clear objectives, including:

increasing sales volume, successful new product launching, increasing brand equity, successful

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(2) increasing customer demands;

(3) differentiating the company product or service

The term "promotion" is originated usually used by the marketing company internally; for the public or the market, “promotion” is understood as “special offer” or “free value added” product

2.5 Customer Satisfaction

Customer satisfaction can be defined as the degree of pleasant feeling from the customers when their expectations to a product or service are properly met Corporate and

individual customers may have different purchasing behaviours towards a product or service

and therefore the measurement of customer satisfaction need to consider these differences Quality of after-sales service can also be important factor influencing to customer purchasing decision Many companies are making their effort not only for customer satisfaction, but also for customer delight, in order to increase customer loyalty

(Source: http://dictionary.bnet.com/definition/customer+satisfaction.html)

Customer satisfaction has been paid much attention among theoretical literatures and practical researches It is also an expected outcome of implementing marketing activities, as providing satisfying products or services to customers relates to success achieved in today’s tensely competitive world of business

Fornell (1992) defined “satisfaction as an overall evaluation dependent on the total purchase and consumption experience of the target product or service performance compared with repurchase expectations over time” Oliver (1997, 1999) reviewed satisfaction as pleasurable fulfilment which is sensed by customers in the consumption It means that “the

consumer senses that consumption fulfils some need, desire, goal, or so forth and that this

fulfilment is pleasurable” (Oliver, 1999, p.34) In relationship marketing literatures, customer satisfaction has also been thought to be “a key performance indicator for evaluating the quality

of a relationship between service provider and customers Customers’ expectations regarding costs and benefits of the relationship mainly depend on past experience, and satisfying

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NT GEHIENT Dissertation of Master of Industry Business Management

experiences increase the motivation and the likelihood that an individual stays in the relationship” (Mouri, 2005)

Customer perception to products or services has been widely used to measure customer satisfaction According to Li (2008), five emotions perceived by customers as below are satisfactory:

(1) Satisfaction: the products can be accepted or tolerated;

(2) Content: the products bring people with a positive and happy experience; (3) Relieved: the products remove people’s negative state;

(4) Novelty: the products bring people with freshness and exciting; (5) Surprise: the products make customer unexpectedly pleased

Furthermore, “customer satisfaction also has been measured relying on the phases of

customer relationship life cycle, which characterizes different stages of a customer relationship

and requires focus on specific target and customer expectation of different stages” (Spath and

Fahnrich, 2007)

In general, customer satisfaction enhances the quality of relationship between customers and service providers, and increases the repeat purchase behaviour

2.6 Customer perspective measure model ISO 9001:2008 & ISO 9004:2009

Why we have to apply measurement customer satisfaction? What is that for ? The purpose of measuring achievement/performance is to monitor the status of activities and thus facilitate their improvement by applying corrective actions (piloting) The ISO 9000 family of standards relate to quality management systems and are designed to help organizations ensure

they meet the needs of customers and other stakeholders The ISO 9001 requirements are clear

(chap 8), 8.2.1 Customer satisfaction the organization shall monitor information relating to customer perception as to whether the organization has met customer requirements

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Dissertation of Master of Industry Business Management Reported by Pham Quoc Du Customers {and other |“ interested |: parties) |` Customers ——¬ {and other interested L- saratacton parties) ị Key > Vaue-ancing actutios =H Intormation tow NOTE Statements in parentneses do not apply to 1SO 9901

Figure 2.2: Model of a process — based quality management system

2.7 Customer Trust

Trust is defined as a “willingness to rely on an exchange partner in whom one has

confidence” (Relationships Between Providers and Users of Market Research: The Dynamics of

Trust Within and Between Organizations, Christine Mooraaan, Gerald Zaltman, and Rohit

Deshpande, P315)

Trust is one of the most widely subjects across multi disciplines, including management, economics, philosophy and psychology Various definitions of trusts have been given in many previous literatures One general concept of trust was provided by Mayer, Davis and Schoorman (1995), who systematically studied organizational trust and defined trust as “the willingness of a party to be vulnerable to the actions of another party based on the expectation that the other will

perform a particular action important to the trusted person, irrespective of the ability to monitor

or control the other party” Geyskens and Steenkamp (1995) also summarized trust as “the extent to which a firm believes that its exchange partner is benevolent and honest” Doney and Cannon (1997) emphasized that “trust is the perceived credibility and benevolence”

Based on above definitions, trust can be understood as a “human characteristic that is based on assessment of one another’s personality traits” (Chu, 2009), “motives and behaviours” (Tian et al., 2008) In the development of trust, trusted person expectations and perception about

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trustees are involved This is suggested that “the level of trust is different significantly among

individuals based on their personal decision-making habits and characteristics” (Chu, 2009) “Trust or distrust often takes place with a relationship built up As a supplier actively

makes relationship efforts, it provides evidence to customers that the supplier can be trusted,

concerns about the customers’ interests and is willing to make sacrifices for satisfying

customers’ needs in the relationship” (Liang and Wang, 2008)

In practical business activities, the development of trust is considered to be a “critical result of establishing a long-term successful relationship between all the parties involved In face of complicated service markets, customers tend to behave and make purchasing decision depending on their previous consuming experiences” (Doney and Cannon,1997), “customers? expectations” (Anderson and Narus, 1990; Mayer et al., 1995) and “perception” (Liu et al., 2008; Gwinner ef al., 1998; Doney and Cannon, 1997) to service providers

“Investing long-term relationship with customers thus helps to develop customer trusts and improves the effective quality of a relationship in order to obtain mutual interests” (Anderson & Weitz, 1989)

“Customers with trusts in service providers’ capability would probably be willing to commit to a service relationship for meeting their expectations” (Morgan and Hunt, 1994)

“Even when the environment is changing, the customers would believe that the service

provider will take customers’ interests into account instead of doing anything harmful to the

development of relationship” (Liu ef al., 2008)

Mayer et al (1995) conceptualized organizational trust by proposing three core elements

as: trustee’s ability, trustee’s benevolence and trustee’s integrity These three dimensions have

been further supported and adopted by several researchers to operate trust in their later studies Besides, “cumulative process in a relationship was considered to construct trust on the basis of a party’s capability of implementing its obligations continuously” (Doney and Cannon,

1997; Aydin and Ozer, 2005)

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MENT Dissertation of Master of Industry Business Management Reported by Pham Quoc Du Trust is considered so important to long-term relationships and enhancing customer loyalty Many researchers have suggested that “customers” trust is a significant role in building long-term relationship and achieving customer loyalty” (Berry, 1995; Bowen and Shoemaker, 2003; Chu, 2009)

“With trust as a precursor, a customer becomes loyal to a firm and forms a commitment

to that firm” (Bowen and Shoemaker, 2003)

2.8 The loyalty concept

Customer loyalty concepts are things that make the motivation for customers to consistently choose the product or service for next time of purchase Se = Customer Keeping RT Prospect Target Prospect Customer Finding Customer Catching

Figure 2.3: The pyramid of loyalty levels

(Source: Terra L Fletcher - FletcherFreelance.com, Wednesday, June 29, 2011)

« Target prospect: include all the buyers of the product/service category in the market place Target prospect is either unaware of our product offering or having no inclination to purchase it

¢ Prospect: potential customers who have some attraction towards our organization but have not yet taken the step of doing business with us

e Customer: one-off purchasers of our products (although the segment may include some repeat customers) who have no real feelings of affinity towards our organization

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AN OME ENT Dissertation of Master of Industry Business Management Reported by Pham Quoc Du

¢ Client: repeat customers who have positive feelings of attachment towards our

organization but whose support is passive rather than active, apart from making purchase ¢ Supporter: clients who actively support our organization by recommending it to other ¢ Advocate: clients who actively support our organization by recommending it to others ¢ Partner: the strongest form of customer-supplier relationship which is sustained

because both parties see partnership as mutually beneficial

In general, customer loyalty is the final purpose that firms implement relationship

marketing to get this purpose

This study is seeking to investigate the impact of the above mentioned factors to customer loyalty, by examining the above proposed hypothesizes

All The contribution of this research is expected to build up an understanding about the

customer satisfaction of the PPD program, hypothesis test and provide a new ideas for the

author in particular and for trainer team as well as company PACE in general about the data and information from customer in order to prove that we do business but with the mission of sharing

and going with customers all the times

2.9 Customer loyalty:

There are many definitions for customer loyalty, but the customer loyalty as defined by

ICLP — the global loyalty agency seems to be most understandable According to ICLP, customer loyalty is “totality of feelings or attitudes that would incline a customer to consider the re-purchase of a particular product, service or brand or re-visit a particular company, shop or website Customer loyalty has always been critical to business success and profitability”,

(http://www iclp.com.cn/?q=customer-loyalty)

ICLP also defined three determined factors to customer loyalty; that are: relationship

strength, perceived alternatives and critical episodes

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ED Dissertation of Master of Indust ry Business Management i

MANAGEMENT ` Reported by Pham Quoc Du

And there are also many factors negative effect to customer loyalty but the four below

factors are the main and most effect:

» The customer no longer stays in the service area;

= The customer changes his need and he does not have the demand of service or product any longer;

» There are alternative products that are more suitable for the customer demand; = The critical episodes are not handled properly

Engendering and nurturing customer loyalty is very important and this is the core objective in the marketing strategy of a business Loyalty customers not only bring the benefit to the business but they are also “brand ambassadors” to spread good brand image to their friends and relatives

According to Reichheld and Sasser, when a company increases 5% customer retention,

the profit can increase from 25% to 85% depending on industry Therefore, increasing customer

loyalty help a business increase its profitability in any level

The increased profitability is associated with customer loyalty because:

= When creating a relationship, it takes acquisition costs, but the cost for maintaining a relationship is much lower

« Long-term customers tend to be less decision to switch to other product or service, and they also tend to be less sensitive with price

= Long-term customers may introduce their friends or relatives with the products or services

» Long-term customers are more likely to purchase add-ons and they will purchase

more than non-loyal customers ~

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= When a long-term customer has the habit of using the product, he rarely changes

to another brand, so it is a barrier for competitors to enter the market or gain market share

= It takes less cost to serve long-term customers than new ones as they are familiar

with the process, thus less time and expense for them to get familiar

" When customers become loyal, their behaviours to buy products are more

consistent as they are familiar with these products

= The repeated customers make easier for the employees to care and their

feedbacks to improve customer service are more reliable

= Retaining a loyal customer takes less time than acquiring a new one

For these reasons, customer loyalty is rated as the most important goal for a business in its customer relationship marketing activities (CRM) Oliver (1997, p.392) defined customer loyalty as a “deeply held commitment to rebury or re-patronize a preferred product or service

consistently in the future, thereby causing repetitive same-brand or same brand-set purchasing,

despite situational influences and marketing efforts having the potential to cause switching behaviour”, Oliver (1997, p.392)

“Customers are the driving force for profitable growth and customer loyalty can lead to profitability”, (Hayes, 2008)

The loyalty is a positive attitude of a consumer and this is the good signal for the producer or service provider about the repurchase of a product or service

For a company, the loyalty customers are considered to be the most important asset

“Attempt to make existing customers increase their purchases is one way to strengthen

the financial growth of a company” (Hayes, 2008)

Therefore, “good managers should understand that the road to growth runs through customers — not only attracting new customers, but also holding on existing customers,

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mm NT PENIENT Dissertation of Master of Industry Business Management

i Reported by Pham Quoc Du

motivating them to spend more and getting them to recommend products and services to the other people” (Keiningham et al., 2008)

There are evidences suggesting that stronger relationship commitment leads to buyers’ repeat patronage Wulf et al (2001) defined the “construct of behavioural loyalty as a composite measure based on a consumer’s purchasing frequency and amount spent at a retailer compared

with the amount spent at other retailers from whom the consumer buys”

Morgan and Hunt (1994) found significant relationships between the level of a buyer’s relationship commitment and his acquiescence, propensity to leave, and cooperation, all of which can be regarded as behavioural outcomes of relationships”

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m “ EURDMED

_ MANAGEMENT Dissertation of Master of Industry Business Management Reported by Pham Quoc Du

Chapter I: RESEARCH METHODOLOGY

3.1 Structure research:

The research will be divided into five main phases and listed in figure 3.1

PHASE 01 - Objective setting - Research planning - Sampling - Survey options PHASE 03 - Scale rating - Questionnaire design - Survey conducting - Recommendations and report | PHASE 05 - Result analysis

Figure 3.1 Research process

3.1.1 Phase 01 - Objective setting and research planning:

The starting point of investigating course attendant’s satisfaction and the program

development in order to set objective and plan the research The objectives of the research can

be translated into specific goals that are listed as follows:

1 Defining of factors affecting to course attendant’s satisfaction lead to their trust and loyalty The relation between course attendant’s satisfaction and training program factors such as Content and Objectives, Training method, Documentation, Logistics

arrangement

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Reported by Pham Quoc Du 2 Study how to develop the training program with most valuable and professional way in order to maintain the competitive advantage of training program in the turbulent

competition

Firstly, it is “what matters most important to course attendant”, which means we have to

identify course attendant’s requirements — what matters are important to course attendants and

determine whether they are satisfied or not Lots of things will be important to course attendants but some will be more important than others, so we have to measure the relative importance of course attendant’s requirements

Secondly, we need to identify whether the satisfying of course attendant’s requirements leads to their trust Many studies show that customer satisfaction will lead to customer trust, and

if customer requirements are met, the customers will give their satisfaction and trust to the

service and in general, the customer satisfaction not only helps the organization to keep their customers but also supports the organization to attract the new customers for the organization

Next, we will identify the how the cost-training fee affect to the decision of the customers to stay long with the service range of the company

Lastly, it is “doing best what matters to course attendant” Having generated what matters lead to course attendant’s loyalty, we can use them to produce some survey outcomes Since it is rarely effective to try to improve everything all at once, efforts and resources need to

be focused if they are effective, and the rating and applying 80/20 rule in this case is effective,

identifying what factor need 20% of time to improve but contribute to solve 80% of problems One matter is not less important for any project and research is to plan a strict timelines sixteen weeks is a typical time scale for a course attendant’s satisfaction investigation research

to be completed

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Research plan

= This project is taking four months (16 weeks) to complete project from August, 2011 to end of November 30, 2011 with plan as below table 3.1:

Duration Tasks to be done

04 weeks Review and set up idea & objectives project Prepare research questions

Getting the consultant and advice from academic and project supervisor

04 weeks 'Writing the research proposal with designated outline

Pilot of the project on focus group

04 weeks Review research proposal with such as methods/tools and get the approved research proposal from Professors

Conduct the primarily surveys

e Unstructed interview with three groups of course attendants e Focus interview with curriculum development experts e Primarily Analysis of data

04 weeks

Conduct the research with whole population of trainees

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3.1.2 Phase 02- Sampling & survey options:

The main parts of phase two are sampling and choosing the survey options In the sampling process, there are three problems that we need to solve to produce a reliable sample

First, in order to be reliable, a sample must be representative for our issues that had

been stated, that is course attendant’s satisfaction, We have also defined the targeted

respondents to be tested; hence, we need to choose who will be in the sample

Second, the sample must be properly selected in order to avoid bias And the last, the sample must be large enough; it can be represented for the population

About survey options, after analyzing and comparing four basic options consisting of personal interviews, telephone interviews, postal surveys and electronic surveys, we choose the

personal interviews and electronic methods (via email) to collect data as this is the best way for

us to survey for the sample group

Personal interviews (face to face) prove to be the quick, low-cost, and right targeted respondents as we come to see them or email to explain the concept and the way to survey to course attendants, conduct the survey and collect the papers right after or email feed back

3.1 3 Phase 03 — Scale rating & questionnaire design

In this phase, the Liker scale is used, it is most used in testing factors by statistical

analysis This scale is suitable for analyze the factors using Excel, the factor analysis will describe descriptive statistic, coefficients, correlations the analysis results help test the

hypothesis with high reliability and reject the hypothesis with low reliability

The questionnaire design which is the most important part in research in our way of thinking The questionnaire length is not too long or too short in order to express enough idea, 32 questions is enough for a survey questionnaire in this research