UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Nguyen Tri Phu SERVICE RELIABILITY - THE KEY TO IMPROVE CUSTOMER SATISFACTION AT HEAD PHAT TIEN 5 MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – 2020 123doc UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Nguyen Tri Phu SERVICE RELIABILITY - THE KEY TO IMPROVE CUSTOMER SATISFACTION AT HEAD PHAT TIEN 5 MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: DR. NGUYEN PHONG NGUYEN Ho Chi Minh City – 2020 123doc Service Reliability - the Key to Improve Customer Satisfaction at HEAD Phat Tien 5 1 TABLE OF CONTENTS LIST OF FIGURES. 3 LIST OF TABLES. 3 LIST OF ABBREVIATIONS.
Overview of the motorcycle market. Overview of Phat Tien Trading and Service Company Limited. Overview of HEAD Phat Tien 5. Unreliable service of repair and maintenance.
Limited infrastructures and facilities. Insufficient support from employees. MAIN PROBLEM VALIDATION. Risk of financial result decrease.
Negative WOM affecting the reputation. Decreased ranking in the annual assessment of Honda Vietnam. Limited infrastructures and facilities. Limited capability of some technicians.
Lack of management and control. Not strictly following the company’s procedure. CAUSE VALIDATION AND SOLUTIONS. The first alternative solution: Conducting a “Quality First” campaign.
25 123doc Service Reliability - the Key to Improve Customer Satisfaction at HEAD Phat Tien 5 2 2. The second alternative solution: Internal training and annual technical competition 27 2. ACTION PLAN IN ORGANIZATION. QUALITATIVE RESEARCH FINDINGS.
50 123doc Service Reliability - the Key to Improve Customer Satisfaction at HEAD Phat Tien 5 3 LIST OF FIGURES Figure 1. Motorcycle sales in Vietnam of the five largest brands from 2011 to 2018 Figure 2. The organizational chart of Phat Tien Company Limited Figure 3: Customer dissatisfaction proportion of sales and service of Phat Tien from April 2019 to September 2019 Figure 4: Average service customer percentage of HEAD Phat Tien stores from April to September 2019 Figure 5: Customer satisfaction rate about Service of Phat Tien 5 and the company Figure 6: Reasons for dissatisfaction about service at HEAD Phat Tien 5 Figure 7: The updated cause-effect map with consequences Figure 8: Process of repair and maintenance service Figure 9: The final cause-effect map LIST OF TABLES Table 1. Human resources of HEAD Phat Tien 5 Table 2.
General interview framework Table 3. Detailed interview questions Table 4: Action plan LIST OF ABBREVIATIONS HEAD Honda Exclusive Authorized Dealer HAUS Honda Approved Used Motorcycle Shop VAMM Vietnam Association of Motorcycle Manufacturers VNR500 Vietnam Report’s Top 500 Largest Enterprises CSI Customer Satisfaction Index KPI Key Performance Indicator CRM Customer Relationship Management PIC Person In Charge TQM Total Quality Management 123doc Service Reliability - the Key to Improve Customer Satisfaction at HEAD Phat Tien 5 4 Service Reliability - the Key to Improve Customer Satisfaction at HEAD Phat Tien 5 EXECUTIVE SUMMARY Vietnam ranks in the top list of the world about the number of people using motorbikes for daily transportation (1). The motorbike market in Vietnam is still on the growth trend despite the forecasts that it had reached a saturation point in the previous years. Infrastructure limitations and high taxes are the main constraints for customers to purchase cars.
Hence, there is still a demand for a motorcycle type of transportation. Currently, the Vietnam motorcycle market is led by five leading manufacturers, including Honda, Yamaha, Suzuki, SYM, and Piaggio, primarily the new local electric motorcycle manufacturer of Vinfast, which makes the market much more competitive (1). Though, according to the recording of the Customer Service department, customers using the service division of Phat Tien 5 still feedback many complaints, which takes the highest portion of 17 percent of customers interviewed in after-sale service surveys, compared to 15 percent of the total six HEADs. Still, two percentage is not a small difference because it equals up to 80 more complaints per month than the average quantity of each HEAD, considerably the dissatisfaction ratio of Phat Tien 5 increased continuously by up to 4 percent in the recent months from July to September (Figure 4).
This is the fundamental reason for the author to do more research to discover deeper the real problem and possible causes, then suggest suitable and feasible solutions to solve this problem and efficiently enhance the competitiveness of HEAD Phat Tien 5. The author uses several qualitative methods to implement this report namely in-depth interviews with heads of customer service department (Mrs. Ngoc), service department (Mr. Minh), HEAD’s service division (Mr.
Viet); several customers and data exploration from reliable internal sources; and reference from theory literature of prestigious academic journals. 123doc Service Reliability - the Key to Improve Customer Satisfaction at HEAD Phat Tien 5 5 PART 1. Overview of the motorcycle market According to records of (3) Motorcycles Data (3), an organization that tracks motorcycle sales worldwide, Vietnam preserves its position as the fourth largest motorcycle market in the world in 2018. Vietnam is ranked behind India, China, and Indonesia in terms of motorbike sales (2).
The domestic market reached an eight-year high in sales of approximately 3.38 million bikes, including both local and imported vehicles (3). Vietnam market is dominated by five leading motorcycle producers, notably Honda, Yamaha, Suzuki, SYM, and Piaggio, which take more than 97 percent of the total market. Honda is the market leader in Vietnam, which accounts for 75.9 percent of the market share in 2018 and increase to 78.6 percent of market share in 2019, up nearly 3 percent. Sales rose to 3.39 million new motorbikes sold in Vietnam for the fourth year in the row last year (1), (3).
Motorcycle sales in Vietnam of the five largest brands from 2011 to 2018 Source: Vietnam Association of Motorcycle Manufacturers (VAMM) 1. Overview of Phat Tien Trading and Service Company Limited Phat Tien Trading and Service Company Limited (Phat Tien) is a retail company established on January 10th, 1998, which trades and offers services of Honda motorcycles, sportbikes, and automobiles in Ho Chi Minh City, Long An province and Dong Nai province. Currently, besides the headquarter in District 11, the company owns six Honda Exclusive Authorized Dealer (HEAD) stores, two Wing Service stores, the first Sport Bike showroom in Vietnam, and three Honda Automobile Dealer showrooms, with a staff of more than 900 123doc Service Reliability - the Key to Improve Customer Satisfaction at HEAD Phat Tien 5 6 people, and serves more than one million customers in Ho Chi Minh City and neighboring provinces (4), (5). Each HEAD has the function of genuine Honda motorcycle business, providing genuine parts, proper maintenance and repair services, and safe driving instructions.
Over 20 years of operation, Phat Tien is considered as one of the leading motorcycle enterprises in Ho Chi Minh city and neighbor areas (4). Moreover, with the need to experience a variety of vehicles of customers, Phat Tien maintains its pioneer position by establishing the first genuine Honda Sport Bike Showroom in Vietnam that provides the latest Honda Sport Bike models with professional maintenance service and genuine spare parts. In addition to the breakthrough development of the system of motorbike stores, Phat Tien is gradually asserting its position in the Automobile Industry with three Honda Dealers following 5S standards of Honda Vietnam including Honda Auto Bien Hoa, Honda Auto Long An, and Honda Auto Saigon - District 2 with the function of providing the latest models of Honda cars and professional maintenance service, genuine parts and especially safe driving activities to every customer. By the end of 2019, Phat Tien is the only company nationwide to have an official retail distribution network of Honda's finished products from motorcycle to sportbike and car.
Phat Tien is honored by Honda Vietnam in many awards and continuously ranks among the leading HEAD systems of Honda Vietnam. Especially, Phat Tien is honored to be in the Top 500 Largest Private Enterprises in Vietnam (VNR500) in the past 11 years (5). The company also pays great attention to community social activities via Tri Duc Charity Fund. The organizational chart of Phat Tien Company Limited 123doc Service Reliability - the Key to Improve Customer Satisfaction at HEAD Phat Tien 5 7 1.
Overview of HEAD Phat Tien 5 HEAD Phat Tien 5 was established in 2008. This store is located at 406A Le Trong Tan street, Tay Thanh ward, which is a very crowded area of Tan Phu district to the western region of Ho Chi Minh city. Its opening ceremony marked a milestone in Phat Tien company's ten- year operating. HEAD Phat Tien 5 store has taken a significant portion of sales and service customer quantities of the company for many years up to now, with the complete human resources of 57 people with details as the following table.
Human resources of HEAD Phat Tien 5 No. Human resources Quantity 1 Store Manager One person A Sales Division 2 Head of Sales Division One person 3 Vice Head of Sales Two people 4 Salesman Ten people 5 Registration employee (Sales) One person 6 Cashier (Sales) Three people B Service Division 7 Head of Service Division One person 8 Lead of Technician One person 9 Vice-Lead of Technician Two people 10 Technicians 12 people 11 The lead of Spare Parts One person 12 Employees of Spare Parts Three people 13 Registration employee (Service) One person 14 Cashier (Service) Five people C Office & Support Division 15 Accounting Four people 16 Security Eight people 17 Cleaners Two people Total 57 people Source: Human Resource Department 123doc Service Reliability - the Key to Improve Customer Satisfaction at HEAD Phat Tien 5 8 1. SYMPTOMS To justify the existence of somethings abnormal in the company, the thesis author has researched secondary data from the company’s internal reports of the customer service department as well as the service department to identify the symptom for further exploration. Among over 700 Honda dealers nationwide, Phat Tien is the leading one obtaining the significant market share in Vietnam and the highest in Ho Chi Minh city.
In the period in which the market expands less rapidly, Honda Vietnam takes strategic actions to focus on the customer satisfaction index (CSI) as their major factor in maintaining and develop customers from many competitors. Following the Honda Vietnam approach, Phat Tien also considers customer satisfaction as their top priority. While sales are the activities to generate short-term revenue for the time of customer's purchase only, service can create revenue and profits more sustainably for the longer term. Therefore, customer satisfaction about service quality should be the critical and strategic division for particular and severe concerns and investments from the company.
However, the statistical data about customer dissatisfaction proportion of sales and service of Phat Tien from April 2019 to September 2019 consolidated by Customer Service department illustrates that dissatisfaction about service takes a significant portion up to 66 percent, as shown in Figure3. Additionally, HEAD Phat Tien 5 welcomes the highest quantity of service customers compared to other stores of the entire company up to 22 percent, as illustrated in Figure 4.