UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business --------------------------------- Nguyen Thi Hoang Linh CUSTOMER CENTRIC MARKETING: EMPIRICAL EVIDENCE FROM LOGISTICS SECTOR IN VIETNAM MASTER OF BUSINESS (Honours) Ho Chi Minh City – 2015 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business --------------------------------- Nguyen Thi Hoang Linh CUSTOMER CENTRIC MARKETING: EMPIRICAL EVIDENCE FROM LOGISTICS SECTOR IN VIETNAM ID: 22120093 MASTER OF BUSINESS (Honours) SUPERVISOR: NGO VIET LIEM Ho Chi Minh City – 2015 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ACKNOWLEDGEMENTS I would not have been able to complete my thesis without the advice, assistance, understanding and encouragement of my supervisor, my family and my friends. I would like to gratefully and sincerely acknowledge their assistance and support. First of all, the most important person I would like to thank is my supervisor, Mr. NGO VIET LIEM.
Thanks to his valuable advice and generous guidance throughout the journey of this thesis, so that I can finish my thesis. Secondly, I would like to thank all of the staff at International School of Business – University of Economics Ho Chi Minh City who are always enthusiastic and give me a lot of administrative support, assistance and understanding. Furthermore, I would like to express my grateful thanks to my friends and all the respondents who participated in filling the questionnaires and provided the valuable information for this study. Finally, I would like to give my gratefulness to all classmates who have been sharing with me all their knowledge and experience as well as happiness and difficulties during MBA course.
I would not complete my thesis without their encouragement and support. Personally, I wish to express my deep gratitude to my parents and my brother for their spiritual support and encouragement during the time of study. In brief, it has been a long journey and I have grown in so many ways. I would like to say ―thank you‖ again for the involvement of everyone who has helped me to complete this thesis.
LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com -i- ABSTRACT Following the report of World Bank (2014), performance logistics index in Vietnam is lower than the other countries: Singapore, Malaysia, Thailand, China; additional, in the future, logistics industry in Vietnam face to a higher competition when TPP allow foreigner companies invest in Vietnam easier. Hence, manager has to find the right strategy and the best solution to improve their performance and keep the market share. According to theories and the previous studies, customer-centric marketing consistently entails two critical actions which are helpful for companies in this condition: understanding and meeting individual customers satisfaction. The paper explores some mediating factors (customer orientation and relationship marketing activities) affect and direct affect from job satisfaction to sales performance in logistics companies in Vietnam.
Through this thesis, logistics manager can understand more about characteristics of human in logistics area, then they can make decision about HR strategy and benefits to improve both sales performances and the organizational performance. The result shows that customer orientation and relationship marketing also has a mediating affect to relationship between job satisfaction and sales performance positive. But customer orientation has a higher mediating affect to relationship between job satisfaction and sales performance than relationship marketing variable. However, adding both customer orientation and relationship marketing activities, relationship between job satisfaction and sales performance will be negative.
It means managers also have to pay attention highly to employee who has high performance in logistics area. When employees have a higher performance, they will have a difference reaction with new coming period. Key words: customer centricity, sales performances, job satisfaction, customer relationship marketing, customer management, customer orientation. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com -ii- TABLE OF CONTENT TABLE OF CONTENT LIST OF FIGURES Chapter 1.5 Significance of research .1 Customer centric marketing .2 Employee job satisfaction .4 Customer relationship marketing activities .6 Theoretical model and hypothesis .2 Employee job satisfaction and sales performances .3 Employee job satisfaction, customer orientation and sales performance .4 Employee job satisfaction, customer marketing relationship activities and sales performance 24 Chapter 3.1 Research sampling method .1 Demographics profile of respondents .2 Internal consistency reliability.
38 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.1 Result of model 1 .2 Result of model 2 .4 Result of control variables. Discussion, implications and limitations .2 Discussion and implications .3 Limitation and direction for future research. 54 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com -iii- LIST OF FIGURES Figure 1. Type of logistics.
Model 1–the path coefficient. Path coefficient – Model 2. 46 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com -iii- LIST OF TABLE Table 3-1a. Scale of Employee Job Satisfaction.
30 Table 3-1b Scale of Customer Orientation. Scale of Relationship marketing activities. Scale of Sales performance. Item-Total Statistics of pilot study.
Distribution of the sample – sales person. Distribution of the sample – company. Factor loading of Model 1. Factor loading of Model 2.
Composite reliability of model 1. Cronbach alpha of model 2. Composite reliability of model 2. Convergent validity of model 1.
Convergent validity of model 2. Fornell Larcker Criterion Analysis. T-statistics of Path coefficient (Inner Model ) – Model 1. T-statistics of Outer loadings – Model 1.
T-statistics of Path coefficient (Inner Model ) – Model 2. T-statistics of Outer loadings – Model 2. Test of Homogeneity of Variances. Anova of control variables.
48 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com -iv- APPENDIX Questionnaire for pilot study. 64 Questionnaire for main survey. 68 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Chapter 1: INTRODUCTION. Logistics defined as a part of Supply Chain Management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services and related information to ship cargoes/shipment from the point of origin to the point of consumption (Supply Chain Management, n.
According to decree No.140/2007/ND-CP, the Vietnamese Government (2007) divided logistics by 4 groups of services: - Transportation: airway, roadway, railway, shipping and pipeline. - Forwarding: Container loading and unloading. - Warehouse: Cold chain, bonded warehouse - Other value added service: customs clearance, packing – inspection – fumigation, IT management. Type of logistics Page | 1 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com The objective of logistics activities is to move goods from their point of origin to the point of consumption while conforming to customer requirements.
Logistics is a significant component of global trade. The lower the logistics cost and the greater the quality of logistics services available, the higher the amount of world trade being conducted. Logistics typically include the following key elements was shown in the report (World Bank, 2014): - Infrastructure: ports, terminals, railway, roads. - Operations: warehousing, storage, local distribution, trucking.
- Services: freight forwarders and customs brokers. Among the above types of logistics, the most common one is transportation, which occupies about 40% to 60% of logistics cost. Transportation can take the form of many combinations of modes and routes. Logistics Situation of Vietnam.
Page | 2 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Because Vietnam is developing countries, Vietnam’s economy heavily depends on import and export activities. According to data from the World Bank and General Statistics Office (GSO), in 2013, imports and exports of goods and services accounted for 77.5% of GDP, respectively. Over the past 13 years, the trend of annual GDP growth rate was quite in line with the trend of imports and exports annual growth rate. The average growth rate of GDP from 2000 to 2013 was 6.4% and has recently slowed down.
From 2014 to 2019, the International Monetary Fund (IMF) projects the growth rate of Vietnam’s GDP range from 5.0% per annum, meanwhile the growth rate in the volume of both imports and exports will decrease gradually from 18% to 8% in 2019. Also according to the World Bank (2014), the key advantages of Vietnam’s economy over the past 20 years were its rapidly expanding labor force and a shift in economic activity away from agriculture and towards the higher-productivity sectors of manufacturing and services. However, these drivers of economic growth are diminishing and are in need of substitutes by within-sector productivity improvements. One of them would be the improvement of the logistics system or logistics capacity.
Obviously, the more that logistics develop, the more transaction costs decrease which in turn leads to more competitiveness within the country. Vietnam’s international trade is expected to increase 18% in 2014 due to the coming of many free trade agreements between the borders such as the Trans-Pacific Partnership (TPP), Free trade agreements (FTA) of Vietnam - European Union (EU). These agreements are considered strong leverage to boost Vietnam’s economy as well as its international trade, which in turn will push up the logistics sector. Vietnam Logistics Association (VLA) (2014) (previously known as the Vietnam Freight Forwarder Association (VIFFAS)) stated that there are more than 1,200 enterprises in the logistics sector.
However, except the SOE, most of the enterprises are very small with a contributed capital from VND4 billion (USD187 thousand) to VND6 Page | 3 LUAN VAN CHAT LUONG download : add luanvanchat@agmail. There are about 25 multinational logistics companies in Vietnam (e. DHL, UPS, FedEx, etc.), that account for 70% to 80% of market share. Meanwhile, most of Vietnam’s logistics companies only serve as sub-contractors or agencies for foreign companies.
The logistics outsourcing ratio of Vietnamese corporations is still low at 25% to 30%, which is much lower than China (63%) and Japan (40%). However, 70% to 80% of the logistics market belongs to 25 foreign companies among the 1,200 logistics companies that operate in Vietnam. Further, as some segments of the logistics market opens fully to foreign companies in accordance with WTO commitments, the growth opportunity for Vietnamese players will narrow. In current situation, global logistics companies keep 70% - 80% market share in Vietnam; SME (small and medium enterprises) only keep 20% - 30% market share.
In the future, when TPP is applied and market opened more, there will be a lot of foreigners invest in Vietnam. It brings a lot of challenges to SMEs in Vietnam, they meet an intense competition situation to keep current sales and expand market share in the future.2 Problem statement When TPP open and a lot of agreement will be signed in the future, a lot of foreign companies will open office in Vietnam. These issues lead to competition will be higher. From now, logistics companies in Vietnam have to evaluate and find out the suitable strategy to keep their quality services to maintain their revenue.
Especially, managers should know which factors affect revenue and customer satisfaction in order to find out a good decision in human resources. In theory, customer centricity is a business strategy that involves looking at a company from the perspective of customers. It helps SMEs keep their revenue and market share (William, 2014). This strategy can fix for SMEs in logistics in this current scene.
One advantage of customer-centricity is it can allow companies to recognize and take advantage of opportunities for growth, such as unfulfilled customer needs. Another potential benefit of a customer-centric business strategy is that it can increase customer Page | 4 LUAN VAN CHAT LUONG download : add luanvanchat@agmail. The purpose of customer-centricity is to find out what customers like and don't like to better fulfill those needs and eliminate sources of irritation. Companies that don't focus on existing customers run the risk of losing customers to competitors that offer similar products and better overall buying experiences.
While resisting the implementation of customer-centric changes might save money in the short term, it can result in declining market share and lower profit in the long term.