Chapter I. THE PROBLEM AND ITS BACKGROUND
III. METHODS OF STUDY AND SOURCES OF DATA
Introduction
The previous chapter presents the theoretical research framework and this chapter presents research methodology used to build and measure scales.
The research model
Figure 6. Research Process
RESEARCH ISSUES
LITERATURE REVIEW
1. Service, service quality, customer satisfaction 2. Price and its influences and relations to customer satisfaction
3. The model of service quality
RESEARCH MODEL
PRELIMINARY RESEARCH
ALIGNMENT MEASUREMENT
MODEL ADJUSTMENT
OFFICIAL STUDIES (Questionnaire)
DATA ANALYSIS
1. Descriptive statistics, Assessment scale 2.Adjustment model
3.EFA analysis
CONCLUSIONS & RECOMMENDATIONS
IMPLICATIONS TO THE STUDY TO AGRIBANK’S ADMINISTRATION
Figure 7. Conceptual Paradigm of the study
As stated above, the SERVQUAL model is a popular model and is used in many studies, but there are still many disadvantages (Babakus & Boller, 1992; Brown et al, 1993; Buttle, 1996; Genestre & Herbig, 1996; Gilmore & Carson, 1992; Robinson, 1999; Hemmasi et al, 1994). With the author, Iin case, SERVQUAL is fully applied to measure the bank service quality, it would be inappropriate and should be adjusted in terms of the followings:
Difficult in the feasibility because the measurement scale is generally
Much concentrating to the measurement process than service performance
Uncaring to external factors and marketing activities but only focusing on the internal factors
Difficult in determination on the comparison between the perceived and expected quality due to many dimensions to be considered and indirect determination based on the actual service implementation
The SERVPERF model focuses on implemented quality and including five dimensions as mentioned above (Reliability, Efficiency, Tangibles, Assurance and Empathy) also should not be selected as research model for this study.
CUSTOMER SATISFACTION
SERVICE QUALITY AMONG AGRIBANKS
For the studies on customer satisfaction in the banking industry, the technical quality and functional quality model of Grửnroos may become more suitable (Lassar et al, 1998) by following causes:
First, the FTSQ model concentrates into two main aspects of service quality as the functional quality (how the bank performs services) and technical quality (what services the bank provide). For the banking service, it requested the high-contact service between customers and its staff. Therefore, the process of how to perform services is particularly important for customers in service quality measurement.
Meanwhile, the SERVQUAL model does not analysis to provide what and how bank services provide.
Second, in case, banks are providing the same services with less error-prone, customers will pay more attention to the process of how to perform services for service quality measurement. For the launching high-class service to customers, the functional quality factor becomes more and more important because it will confirm bank’s level and the service differentiation between competitors.
Third, some of scales/dimensions of the SERVQUAL model are included and measured in the FTSQ model to make the study more feasible and reasonable.
With those above mentioned advantages and disadvantages, the SERVQUAL model and FTSQ are reference sources to this study. First, when establishing the model, the key factors influencing to customer satisfaction, the six factors of Tangibles, Courtesy, Corporate Image, Reliability, service portfolio, customer contacts/interactions are highly concerned and then the price factor is also concerned, and the final is the corporate image with detailed measurement dimensions and adjustments. Research model is established as follows:
Figure 8. Factors for research model Hypotheses
H1: The more convenient, the higher satisfaction
H2: The better tangible, the higher satisfaction
H3: The better courtesy, the higher satisfaction
H4: The more service portfolios, the higher satisfaction
H5: The more customer contacts/interactions, the higher satisfaction
H6: The better price competitiveness, the higher satisfaction
H7: The higher reliability, the higher satisfaction
H8: The better corporate image, the higher satisfaction The measurement model of the customer satisfaction The descriptive model
According to Bernd Stauss and Patricia Neuhaus (1997), the level of customer satisfaction can be classified into three categories with different impacts on service providers: Demanding customer satisfaction; stable customer satisfaction and Resigned customer satisfaction:
Courtesy
Reliability
Services portfolios
Customer contact
Price competitiveness
Corporate image Conveniences Tangibles
Customer satisfaction
For the demanding customer satisfaction: this is the positive satisfaction and getting feedback through the increasing demand on for the corporate. For customers with positive satisfactions, they and service providers will have good relationships, mutual creditability, and satisfactions for their businesses. In addition, they also expect the corporate to reach their more and more increasing demands. Therefore, this group of customers is easy to become loyal customers with the evidence of the service quality improvement. More of that, with the non-stop increased requests from customers on the service quality, the corporate must improve the service quality.
For the stable customer satisfaction: For customers with the stable satisfaction, they will feel comfortable and satisfied with what is happening and do not want a change in the provision of the corporate service. Therefore, those customers are pleasant, high creditability with the corporate and will be happy to continue to use services.
For the resigned customer satisfaction: with customers with resigned satisfaction, they gain less creditability to the corporate and they think the corporate is difficult to improve or change the service quality with their requests. They feel acceptable. That is not for reaching their needs but because the corporate cannot improve the service quality. Therefore, they would not actively contribute comments or lukewarm efforts to improve the business.
In addition to the classification of customer satisfaction, Bernd Stauss and Patricia Neuhaus confirm the customer satisfaction has a great impact on customer behavior.
Even if customers have a positive satisfaction at the level of “normal satisfaction - satisfied”, they will easily move to other corporations and do not continue to use services. Only customer satisfaction with the highest satisfaction "very satisfied", they will certainly be loyal customers.
Therefore, for the study on customer satisfaction, it should be paid attention to how to make customers feel completely satisfied. This understanding will help the corporate measure to improve service quality flexible for different customers.
Determinants of the customer satisfaction
For measurement of customer satisfaction, many reseachers (such as Hausknecht, 1990; Heskett et al, 1994; Jones and Sasser, 1995; Terrence Levesque and Gordon HG McDougall,, 1996) came up with different criteria and dimensions. However, to have more conclusions that are accurate on customer satisfaction, the author has used five dimensions (generalized from researches of the mentioned above authors) as follows: Overall service quality, ability to meet customer needs, level of customer satisfaction, introduction to the third party, and continuity to use bank services
Research methodology
On the implementation of this study on customer satisfaction for Ho Chi Minh City Agribank, the author has been combined many research methodologies such as qualitative research, quantitative research, descriptive study etc. ... On the basis of the literature reviews and case studies on the customer satisfaction with the detailed measurement dimension as described in Chapter 1. In addition, the bank operation policies, the relationships between the study and other factors are also considered objectively to achieve accurate and practical research results.
As normal, the study of "customer satisfaction" is a survey one including customer feedback gathered, which is the most important source of information used in this study.
For survey research, data collection will be more objectivity by researcher’s limited opinion. Therefore, the analysis process and data process will provide high
reliable results, which can be applied to future studies and researches with more samples.
Data collection
For this study, the data has been collected from the following source:
Primary data: There are two sources. They are from customer questionnaires and results of interviews and discussions with staff / managers of the bank to gain the better understanding, points of views and plans as well as their perceptions to the study.
Secondary data: The literature review is important sources of secondary data for the study. Information sources are from researches and studies in libraries (national library and university libraries), Journals of Banking, Journals of Marketing, Presentations about the service and the service quality, lectures on research methodology and SPSS and from the Internet.
Research design Qualitative method Research objectives
This is a preliminary research to filter variables to analyze, test dimensions/scales, consult comments from the bank and customers about research problems, thereby, scales and survey/ questionnaires have been established.
Research process
First, some questions have been prepared to be discussed with staff / managers of the bank on the content of customer satisfaction such as:
The bank’s evaluation on level of the customer satisfaction with services
Comments on the service quality model in the banking sector.
Comments on service quality dimensions
Comments on customer expectations in the future
The dimensions’ logicality
Any other scale and dimensions are used
The method to achieve customer satisfaction
After that, discussions / interviews are conducted with participants including Directors, department leaders, tellers, and other staff of Ho Chi Minh City Agribank.
More of that, ten customers have been selected randomly to participate in face to face interviews to discover their opinions on the service quality and their expectations to the bank.
Results
After conducting this research, 8 factors in customer satisfaction model concurred by customers are used for further quantitative research; five scales factors for measuring the level of customer satisfaction will be decreased to 3 (2 of "introduction to the third party" and "customer satisfaction" have been removed). They are the overall service quality, ability to meet customer requirements and the continuity to use bank services.
However, that measurement scale outlined in the model needs to be adjusted accordingly. Therefore, after the qualitative research, factors influencing to customer satisfaction are defined as follows:
1. Convenience (CON)
a. The bank has convenience branch/ locations b. The bank has agents available for business needs c. The bank has simple procedure for doing business 2. Tangible (TAN)
a. The bank has modern equipment and technology
b. The bank has well-displayed poster, brochures, handout, leaflets c. The documents are clear and easy to understand with error-free d. The bank staff are professional and well-dressed
3. Staff courtesy (COU)
a. The bank staff show great interests in problem-solving b. The bank staff are well-trained with high competence c. The bank performs services accurately in a timely manner.
d. The bank staff are always available for services
e. The bank staff are polite and consistently courteously with customers 4. Service portfolio (POR)
a. The bank offers a complete range of service
b. The bank is always a pioneer in providing new services for customers 5. Customer contact (INT)
a. The bank staff usually contact and visit customers
b. The bank has hotline 24/24 for customer inquires’ answers
c. The bank has annual meeting to show appreciation for customers’ contribution d. The bank considers customers rights as their prime concerns
6. The competitive price (PRI)
a. The bank has flexible pricing policies b. The bank collects reasonable charges c. The bank offer competitive interest rates 7. Reliability (REL)
a. The bank ensures information confidential b. The bank statements are sent regularly
c. The bank provides the service right at the first time 8. Business Image (IMA)
a. The bank honors commitment to customers
a.b. The bank has great innovation and social contribution
c. The bank launch marketing activities effectively and efficiently d. The bank has right strategy for the sustainable development
With this study, the full scale is determined (including 28 of 8 scale factors for customer satisfaction and 3 scale for measuring the level of customer satisfaction) for the establishment of the questionnaire and the quantitative research.
Quantitative research Research objectives
Quantitative research has been conducted to test dimensions in the research
model. This is a detailed analysis of the data collected from questionnaires sent to customers to determine the logical relationship among these factors and then send out results.
Research process
a. Establishment of questionnaires
b. Determination of the number of samples needed for research c. Delivery of questionnaires to customers
d. Track responsiveness results with customers e. Feedback collection from customers
f. Data processing with SPSS analysis tools in the following order:
Descriptive analysis
Analysis of the scale reliability
Exploratory Factor Analysis
Development of integrated research model
Model testing with the Pearson analysis, regression and ANOVA analysis Results
One of the most common measurement scale used in the quantitative study is Rennis Likert (1932) scale with 5-level scale from 1-5 to find out the level of assessment of the respondents. With the support of the customer service department, a total of 250 questionnaires were sent to customers via postal mail and at the service counter. List of customers are randomly selected in the data of the bank.
After two weeks without customers’ feedback, the customer service department
will contact with customers for the responsiveness. 167 questionnaires were collected with the responsiveness rate of 66.8%, of which 25 were missing samples. The invalid respondents are of which are not enough answer to all questions or wrong answers to questionnaires. Therefore, the remaining number of samples is used in this study to analyze at 142 questionnaires.
According to Hair et al., (1998), cited in Nguyen Thi Phuong Tram (2008), the sample size should be at least 5 responses per 1 observed variable. The study needs to collect at the minimum sample size of 140 responses or more. The number of samples used in the study was 142 samples and they would be appropriate and sample representative of the sample to ensure the implementation of the study.
No. Code Interpretation Convenience
1 CON01 The bank has agents available for business needs 2 CON02 The bank has simple procedure for doing business 3 CON03 The bank has convenience branch/ locations
Tangibles
4 TAN01 The bank has modern equipment and technology
5 TAN02 The bank has well-displayed posters, brochure, handouts…
6 TAN03 The documents are clear and easy to understand 7 TAN04 The bank staff look professional and are well-dressed
Courtesy
8 COU01 The bank staff are well-trained with high competence 9 COU02 The bank perform services accurately in a timely manner 10 COU03 The bank staff show great interests in problem-solving 11 COU04 The bank staff are always available for services
12 COU05 The bank staff are polite and consistently courteously with customers
Business Image
13 IMA01 The bank has great innovation and social contribution 14 IMA02 The bank honors commitment to customers
15 IMA03 The bank has right strategy for the sustainable development 16 IMA04 The bank launch marketing activities effectively and
efficiently
Price competitiveness
17 PRI01 The bank offer competitive interest rates 18 PRI02 The bank collects reasonable charges 19 PRI03 The bank has flexible pricing policies
Customer contact
20 INT01 The bank has hotline 24/24 for customer inquires’ answers 21 INT02 The bank staff usually contact and visit customers
22 INT03 The bank has annual meeting to show appreciation for customers’ contribution
23 INT04 The bank considers customers rights as their prime concerns Service portfolio
24 POR01 The bank offers a complete range of service
25 POR02 The bank is always a pioneer in providing new services for customers
Reliability
26 REL01 The bank provides the service right at the first time 27 REL02 The bank ensures information confidential
28 REL03 The bank statements are sent regularly
Table 1. the The measurement scale on the customer satisfaction factors After appropriate samples are collected, SPSS is used to analyze the data with the scale encoded and results as follows:
No. Code Interpretation
1. CON01 The bank has agents available for business needs 2. CON02 The bank has simple procedure for doing business 3. CON03 The bank has convenience branch/ locations 4. TAN01 The bank has modern equipment and technology
5. TAN02 The bank has well-displayed posters, brochure, handouts…
6. TAN03 The documents are clear and easy to understand 7. TAN04 The bank staff are professional and well-dressed 8. COU01 The bank staff are well-trained with high competence 9. COU02 The bank perform services accurately in a timely manner 10. COU03 The bank staff show great interests in problem-solving 11. COU04 The bank staff are always available for services
12. COU05 The bank staff are polite and consistently courteously with customers
13. POR01 The bank offers a complete range of service
14. POR02 The bank is always a pioneer in providing new services for customers
15. INT01 The bank has hotline 24/24 for customer inquires’ answers 16. INT02 The bank staff usually contact and visit customers
17. INT03 The bank has annual meeting to show appreciation for customers’ contribution
18. INT04 The bank considers customers rights as their prime concerns 19. REL01 The bank provides the service right at the first time
20. REL02 The bank ensures information confidential 21. REL03 The bank statements are sent regularly 22. PRI01 The bank offer competitive interest rates 23. PRI02 The bank collects reasonable charges 24. PRI03 The bank has flexible pricing policies
25. IMA01 The bank has great innovation and social contribution 26. IMA02 The bank honors commitment to customers
27. IMA03 The bank has right strategy for the sustainable development 28. IMA04 The bank launch marketing activities effectively and efficiently 29. CSL01 Overall service quality
30. CSL02 Ability to meet customer needs 31. CSL03 Continuity to use bank services
Table 2. Summary of the coded measurement scale Questionnaire design
Objectives of the questionnaire
Discovery of customer expectations to the bank
Measurement the level of customer satisfaction
Testing factors influencing to customer satisfaction
Determination of the correlation between time use, the number of banks and customer satisfaction
Content of the questionnaire
After the quantitative research, a questionnaire (Appendix A) was established with 28 dimensions of factors achieving customer satisfaction and three scales (from descriptive research) to determine the level of customer satisfaction with the bank as follows:
1. Section 1: Some customer information
Q1: The seniority with the bank service
Q2: The number of banks that customers to do business 2. Section 2: Customer expectations to the bank
3. Section 3: The factors influencing to customer satisfaction 4. Section 4: The level of customer satisfaction
Q1: Overall service quality
Q2: Ability to meet customer needs
Q3: Continuity to use bank services 5. Section 5: Customer recommendations
CHAPTER 4