vietnam national university, HANOI school of business Nguyen Quynh Trang Service quality and customer service performance – The case of vietnam joint stock commercial bank for private enterprises Major: Business Administration Code: 60 34 05 Master of business administration thesis Supervisors: 1.PHAM THI NHUAN 2. DANG NGOC SU, MBA Hanoi – 2007 TABLE OF CONTENTS ACKNOWLEDGEMENTS.iv TABLE OF CONTENTS.vi LIST OF ABBREVIATIONS. viii LIST OF FIGURES.ix LIST OF TABLES. Scope of work.
Data resource & processing. 4 PART 1: LITERATURE REVIEW AND RESEARCH METHODOLOGY.6 CHAPTER 1: LITERATURE REVIEW.1 The nature of services and Characteristics of services.1 Why study services?.2 What is service?.3 Characteristics of services.2 Managing service quality.2 Dimensions of service quality.3 Results of previous researches.4 The effect of employee behaviors on service quality dimensions.3 Measure of customer service performance.11 CHAPTER 2: RESEARCH METHODOLOGY.1 Method of data collection.5 Procedure of Purification, Validity and Reliability.1 Procedure of purification and validation.2 Procedure of reliability. STATUS OF VPBANK AND DATA ANALYSIS.21 CHAPTER 3: STATUS OF VPBANK.1 General overview of VPBank.1 Vision and Mission.2 Core value and Business areas.2 Foundation and development process.4 Employees and Training Programs.6 Business operation results in 2006.8 Orientation of business activities for 2007.29 CHAPTER 4: DATA ANALYSIS.1 Demographics of the sample.2 Descriptive statistics of study scales.1 Descriptive statistics for five dimensions.2 Descriptive statistics of customer satisfaction.1 Factor analysis for reliability.2 Factor analysis for empathy.3 Factor analysis for tangible.4 Factor analysis for responsiveness.5 Factor analysis for assurance.4 Analysis of Relationships.3 Multiple regressions analysis.55 PART 3: CONCLUSION AND RECOMMENDATIONS. 64 APPENDICES LIST OF ABBREVIATIONS VPBank: Vietnam Joint Stock Commercial Bank for Private Enterprises CJS Bank: Commercial Joint- Stock Bank CA's: Cronbach's Alpha VIF: Variance inflation factor CS: Customer satisfaction LIST OF FIGURES Figure 1.1 Customer Perceptions of Quality and Customer Satisfaction ………….1 VPBank's Organization Chart.2 Safety assurance ratios.3 mobilized Capital source.4 Structure of outstanding loans.1 Scree Plot of Reliability.2 Scree Plot of Empathy.3 Scree Plot of Tangible.4 Scree Plot of Responsiveness.5 Scree Plot of Assurance.48 LIST OF TABLES Table: 2.1 Measurement of five dimensions of service quality.2 Measurement of Bank's Performance.1 Demographic Descriptive Statistics.2 Descriptive Statistics for Reliability.3 Descriptive Statistics for Empathy.4 Descriptive Statistics for Tangible.5 Descriptive Statistics for Responsiveness.6 Descriptive Statistics for Assurance.7 Description Statistics of Customers' Satisfaction.9 Total Variance Explained - Reliability.10 Factor solution for Reliability.11The Total Variance Explained - Empathy.12 Factor solution for Empathy.13 Total Variance Explained - Tangible.14 Factor solution for Tangible.15 Total Variance Explained - Responsiveness.16 Factor solution for Responsiveness.17 Total Variance Explained - Assurance.18 Factor solution for Assurance.20 Results of Multiple Regressions.21 Ranking the importance of dimensions.
52 APPENDIX Appendix A: QUESTIONNAIRE.58 Appendix B: RESULTS OF DATA ANALYSIS. Rationale INTRODUCTION Joining the WTO, the Vietnam banking system has been heavily influenced by the international financial market in terms of exchange rates, interest rates and foreign currency reserves, while they must simultaneously carry out international obligations and commitments. Competition will probably become much stronger when foreign banks expand their scale and scope of operations in the Vietnamese market. Vietnamese commercial banks will need to cope with many difficulties in expanding their banking activities in the world and competing with foreign banks whose strength of capital, technology, services and global operational scale provide them with potential advantages.
Before these challenges, Vietnamese commercial banks, especially Joint Stock Commercial Banks have been giving out many strategies such as widening branches, interest competitiveness, or promotion campaigns, and so on. However, all of them recognized that service quality was critical element to attract customers and necessary for effective competition. Conscious of this fact, in recent year VPBank has placed great importance on improving service quality, thus all dimensions of service quality were concerned but the contribution level of each dimension of service quality has not identified yet. Therefore, its needs to identify the relative importance of each quality dimension which impact to customer service performance of VPBank.
Objectives & aims Objectives of study The objective of this research is to investigate the relationship between five dimensions of service quality and Customer Service Performance of VPBank. Aims of study VPBank's managers can use this instrument as a baseline for a longitudinal benchmarking program that is a means of comparing its performance from branch to branch or from year to year. Hypotheses In this study, five dimensions of service quality including reliability, empathy, tangible, responsiveness and assurance were employed to evaluate the impacts of those dimensions on customer service performance of VPBank. A below research model shows five relationships converted into five hypotheses.
Reliability Empathy Customer Service Performance of Tangible VPBank -Hanoi branch. Responsiveness Assurance Hypotheses 1: A positive relationship exits between Reliability and Customer Service Performance of VPBank - Hanoi branch. Hypotheses 2: A positive relationship exits between Empathy and Customer Service Performance of VPBank- Hanoi branch. Hypotheses 3: A positive relationship exits between Tangible and Customer Service Performance of VPBank- Hanoi branch.
Hypotheses 4: A positive relationship exits between Responsiveness and Customer Service Performance of VPBank- Hanoi branch. Hypotheses 5: A positive relationship exits between Assurance and Customer Service Performance of VPBank- Hanoi branch. Scope of work This study focuses only on identifying the relative importance of five dimensions of service quality on customer service performance of VPBank Hanoi branch. The target customers are retail customers of VPBank.
Because of the time and resources limitation to survey, this research surveys at VPBank Hanoi branch. Data resource & processing Data resource In view of the research's nature and in order to ensure the reliability of the findings, it becomes necessary to collect data from primary source. A survey was therefore undertaken through hand- distributed questionnaire technique. Questionnaires were personally delivered to and collected from customers came VPBank to implement transactions during the period of survey.
Data Processing After collecting the raw data, these data must be transformed into information that will answer the manager's question. The conversion of raw data into information requires that the data was edited and coded so the data may be transferred to a computer and SPSS software version 13.0 for Windows was used to analyze data. Each possible response to each question in the questionnaire was coded in the ways that conform to the requirements of this program. After the data was coded, the data were then ready to be analyzed.
Methods & approaches This study used quantitative method to collect information about the perceived personality through a questionnaire. All responses in questionnaire expressed in numbers analyzed quantitative. Significance For theoretical significance: The research enhances understanding of how five dimensions of service quality with customer satisfaction were. In addition, it adds to the knowledge of services marketing and research marketing.
For empirical significance: This is the first empirical study to date in VPBank to examine the relationships between five dimensions of service quality and customer service performance of VPBank at Hanoi branch. VPBank's managers can use this instrument as a baseline for a longitudinal benchmarking program. Having a baseline will give VPBank's management a means of comparing its performance from branch to branch or from year to year. Moreover, VPBank managers can use the data to determine if they are performing well or poorly in the specific aspects of the service experience.
It is much easier to improve services if management knows what needs to be improved. Having this information will help managers allocate funds or resources towards areas that most need improvement. Limitations Like other researches, this study has also several limitations. Because the scope of this research focuses only on individual customer group of VPBank, and survey test only VPBank Hanoi branch.
Moreover, this study is also limited both time and resources. Expected results The result of this study showed positive effects for reliability, empathy, tangible, responsiveness and assurance on customer service performance. Regression analysis has been applied to identify the relative importance of the quality dimensions. Standardized beta coefficients are the parameters used to determine the contribution of each dimension.
The higher the score is , the more important the dimension is. Follow –up (potential) The finding reported in this study offer several suggestions for future research. In future, researcher can cover more service categories and with large database to identify more dimensions to add to the service quality construct such as technology. Thesis structure Excluding the executive summary, introduction, references and appendixes, this thesis contains three parts The first part, named, "Literature review and research design" covers chapters one and two.
The purpose of this part is to introduce the theoretical background and the design of the study. All relevant theories: service and characteristics of service, managing service quality, and customer satisfaction were contained in chapter 1. Chapter 2 presented methodological issues such as providing an explanation of the measurement, sampling method, data collection, and procedure of purification, validity, and reliability. The second part of this study, named, "Status of VPBank and Data analysis" contains chapters three and four.
The purpose of this part is to introduce general information about VPBank in chapter 3 and chapter 4: Data analysis presented discussion of the study's finding. Finally, part three, titled "Recommendations and Conclusion" will review the findings and give recommendations for the findings. PART 1: LITERATURE REVIEW AND RESEARCH METHODOLOGY CHAPTER 1: LITERATURE REVIEW 1.1 The nature of services and Characteristics of services 1.1 Why study services? Modern economies are driven by service businesses, both large and small. Services are responsible for the creation of a substantial majority of new jobs, both skilled and unskilled, around the world.
The service sector includes a tremendous variety of different industries, including many activities provided by public and nonprofit organizations. It accounts for over half the economy in most developing countries and for over 70 percent in many highly developed economies (C.2 What is service? A service is an act or performance offered by one party to another. Although the process may be tied to a physical product, the performance is essentially intangible and does not normally result in ownership of any of the factors of production. Services are economic activities that create value and provide benefits for customers at specific times and places, as a result of bringing about a desired change in - or on behalf of - the recipient of the service.3 Characteristics of services Services have six characteristics: intangibility, heterogeneity, simultaneity, perish ability, transferability and cultural specificity (Anonymous, 1998).
Intangibility: Intangibility is a key determinant of whether an offering is or is not service. Intangibility makes services more difficult for customers to imagine and desire than goods. Because of intangible characteristic, services can not be inventoried, patented, readily displayed or communicated, and service price is difficult. Heterogeneity: Services are frequently delivered by human beings to human beings.
However, humans tend to be inconsistent in their behavior, their delivery and consumption of services. Thus, the heterogeneity connected with services is largely the result of human interaction between and among employees and customers. Because of heterogeneous characteristics, service delivery and customer satisfaction depend on employee actions. Service quality depends on many uncontrollable factors, and there is no sure knowledge that the service delivered matches what was planned and prompted.
Simultaneity: Most services are produced and consumed at the same time. Customers participate in and affect the transaction, customers affect each other, employees affect the service outcome, decentralization may be essential, and mass production is difficult. Perishability: Perishability refers to the fact that services cannot be saved, stored resold, or returned. Therefore, it is difficult to synchronize supply and demand with services, and inability to inventory.
Transferalbility: The transferalbility means that different services operations may share common components/ characteristics. In the fact, the types and sources of expectations are the same for end consumers and business customers, for pure service and product-related service, and for experienced customers and inexperienced customers. The transferalbility implies that it is important to monitor new developments not only in our industry, but also in other service industries because many lessons can be learned from other service industries. Cultural Specificity: The cultural context in which a service is consumed can be viewed as an attribute of the service itself.