Research contribution

This thesis shows how the importance the customers plays .It also analysis all the factors affected the customer so that which bank have focused on these factors will be the leader.

Banks should improve their products and the interest day by day to attract the customers by

innovating their marketing strategies. They should know the problems of each customers and having a good service staff to solve their problem

The data indicates that although all Vietnamese customers had very old established relationships with state-owned commercial banks, approximately half of them are willing to buy banking services from foreign banks or to put their money in foreign banks, rather than in Vietnamese banks. The main reasons for customers wanting to leave domestic banks to go with foreign banks are that they want to enjoy simple procedures, better interest rates, professionalism, more trustworthiness, ability to access to foreign networks, and better quality and facilities in foreign banks (MPI-UNDP, 2006). In contrast, nearly half of the rest do not want to switch their borrowing and depositing to foreign banks because they are mainly large state-owned enterprises that have close credit relationships with state-owned commercial banks in terms of favorable incentives. In this sense, the study of MPI-UNDP (2006, p.35) observed that: In short, the banking sector of Vietnam has not yet satisfied requirements of customers on service quality, pricing, professionalism, and reliability. Especially, state-owned commercial banks, which dominate the share of credit and loan markets, have not yet improved services that customers expect. This is an important factor leading to the weak competitiveness of the banking sector. And this also is the legacy of the centrally-planning economy with the domination of state-owned commercial banks.

It is possible that if a bank can meet customer' needs, the performance of the bank is considered to be efficient. Therefore, in order to enhance customer satisfaction, many commercial banks have willingly made great efforts to improve the quality of products and services (Anderson and Sullivan 1993).Banks should have suitable strategies and investment to obtain higher quality services and better results in customers’ perceptions. Last but not least is the matter of building and developing brand. In this study, most customers volunteered better service quality perceptions for foreign banks than for local ones. However, because all foreign banks in this study are world renowned, and most Vietnamese people (interviewees) are always fond of foreign brand-names and products/services, and while at present the number of services foreign banks provide is fewer than those local banks do, perhaps customers’ better perceptions originated from their biases and personalities. In other words, we believe that reputation and status of a bank influence customers’ and bank staff’s perceptions; and if a local bank has a better image and brand-name as well as more attractive

branding activities, surely its customers also reveal their better perceptions and feelings about its service quality.

Bank marketing strategies are planned, organized, directed, and controlled with the intentions of fulfilling some pre-determined goal. These goals can have various time spans.

For example, a particular bank may want to "introduce a new consumer loan plan" or

"increase the total number of new accounts opened by 10% over an eight month period." An action of this nature would result in returns to the short run. On the other hand, if the bank wanted to "improve its image within the community", the bank would have a longer period of time to accomplish the ultimate customer satisfaction goal.

In short, the banking sector of Vietnam has not yet satisfied requirements of customers on service quality, pricing, professionalism, and reliability. Especially, state-owned commercial banks, which dominate the share of credit and loan markets, have not yet improved services that customers expect. This is an important factor leading to the weak competitiveness of the banking sector. And this also is the legacy of the centrally-planning economy with the domination of state-owned commercial banks. This domination needs to end because "... higher concentration in banking markets may lead to less favourable conditions for customers, especially in markets for small business loans, retail deposits and payment services, ..." (Claessens and Laeven, 2004). The banking sector needs to further implement reforms to satisfy requirements of customers because, in this respect, "... customer satisfaction is related to customer loyalty, which in turn is related to profitability" (Hallowell, 1996, p.27).

However, the quality of banking products and services in the Vietnamese banking sector is still quite low because the application of information technology in banks is at a low level compared with other bank in the region. Increasing services of banks for customers is considered to increase paper work and to include heavy administrative procedures. For example, in the same bank, for some transactions, customers can only come to the same branch to conduct their transactions because databases of customers are not connected with other branches. In other words, in spite of doing transactions in the same bank, customers cannot deposit their funds in one branch, and withdraw in other places.

Moreover, due to the legacy of the centrally-planning economy, many Vietnamese banks have not yet emphasized the aspects of customer-orientation and market-orientation to their

staff in providing banking products and services to customers. As a result, quality of banking products and services is still poor. Therefore, in order to improve the quality of products and services, banks should invest much more in information technology so that customers can make their transactions in any branch in the same bank