CHAPTER 2 THEORETICAL FOUNDATION AND RESEARCH MODEL
2.5 RESEARCH MODEL OF DECISIVE FACTORS TOWARDS CUSTOMER
2.5.3 Research models of customer satisfaction
According to Bernd Stauss and Patricia Neuhaus (1997), we can divide levels of customer Convenience
Visibility
Service Attitude
Corporate Image
Price Competitiveness
Customer Interaction
Customer Satisfaction
Service Porfolito
Credibility
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satisfaction into three categories and they have different effects on service providers:
Demanding customer satisfaction: is the active satisfaction with responses through higher needs towards service providers. For customers who have positive satisfaction, they and service providers will have good relationship, trust each other and feel satisfied when making transactions. Moreover, they do hope that providers will have ability to meet their higher demands. Therefore, this is the customer group which is easy to become loyalty customer of enterprises only when they realize that enterprises have more improvements in providing them with services. The satisfaction factor is also expressed when customer demands are getting higher and service providers make efforts in enhancing service quality to be more completely.
Stable customer satisfaction: For customers who have stable satisfaction, they will feel comfortable and satisfied with what are happening and do not want the changes in the way of providing services of enterprises. Therefore, these customers becomecomfortable and have high reliability towardsenterprises and they are willing to continue using enterprises’
services.
Resigned customer satisfaction: Customers who have resigned customer satisfaction are less trusted in enterprises and they assume that enterprises hardly improve service quality and changes as their desires. They are satisfied not because enterprises meet their demands completely. However, they consider that they cannot require enterprises to improve better.
Therefore, they will not contribute their ideas positively or they become nonchalant with improvement efforts of enterprises.
It is noted that aside from classifying customer satisfaction, Bernd and Patricia Neuhaus affirmed that satisfaction level will greatly affect customer behaviors. Even when customers have positive satisfaction towardsenterprises, the satisfaction level is just as “satisfied”.They can come to the others and do not continue to use services of the enterprises. Only customers who have highest satisfaction level as “very satisfied”, certainly they are loyal customers and always support the enterprises.
Therefore, when we do researches on satisfaction of corporate customers, it is needful to pay attention to the thing that makes customers satisfied. In addition, making them very satisfied is much more important. For customers who have general satisfaction, they can leave enterprises anytime whereas customers who are very satisfied become loyal customers of enterprises. This understanding will help enterprises have flexible methods of service quality improvement for each different customer group.
2.5.3.2 Model to measure customer satisfaction
To measure customer satisfaction, several authors such as Hausknecht, 1990; Heskett et al, 17
1994; Jones and Sasser, 1995; Terrence Levesque and Gordon H.G McDougall, 1996 presented many different criteria. However, in order to arrive at correct conclusion about customer satisfaction towards HSBC Bank, the author used five criteria (summarized from researches of the above authors) as follows:
General service quality
Ability to meet customer demands
The level of customer satisfaction
Introduction of the Bank to the third party
Continuationto use bank services 2.6 INTRODUCTION OF HSBC BANK
The Hong Kong and Shanghai Banking Corporation (HSBC) is the founder of HSBC Group in 1959. HSBC Group is one of the largest banking and financial service institutions all over the world. The symbol of HSBC is “Honesty, Reliability and Perfect Services”.
HSBC opened its representative office in Saigon in 1870 and had operated over 100 years in Vietnam until 1975. HSBC opened an agency of the bank in Hai Phong in 1884.
This agency was upgraded to a sub-office at the beginning of the 1920s and had continued to operate until 1954. HSBC Bank also opened an additional agency in Hanoi in 1907.
HSBC Bank consolidated and strengthened the relationship with Vietnam through the opening of representative offices in Ho Chi Minh City and Hanoi in 1992. The Ho Chi Minh City representative office became a full service branch in 1995. On February 28, 2005, HSBC opened its second branch in Hanoi. The bank also established the Can Tho representative office in May of 2005.
HSBC Vietnam is always a pioneer of providing unique, diversified and creative products for customers who use personal financial services. Especially, HSBC Vietnam was the first bank and the first foreign bank in Vietnam to offer unsecured loan. In addition, it is also the first one to introduce ATM service, to open personal account and to invest in foreign countries. Moreover, it is the first bank and the first foreign bank which sells life insurance through the system of branch offices (AIA – 2001)
With considerable achievements and activities in recent years, HSBC is the largest foreign bank in Vietnam in terms of capital, transaction network, kinds of products, number of employees and customers, stable development rate, business capacity, risk management, application of modern technology, efficiency of distribution system, market penetration ability and specialized qualifications…
2.6.1 Operation of HSBC Bank
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The operations of HSBC Bank in Vietnam are very abundant and diversified including main sectors as follows:
1. Financial services for personal customers, corporations, financial institutions.
2. Commercial and consumer sponsorship, securities services and deposits.
3. Foreign exchange and capital market services, currency management, international payment.
Personal banking services
Vietnamese and foreign accounts (current and savings account)
Overdraft, consumer loan, personal loan, car loan, house loan
International ATM cards, credit cards (visa and master)
Withdrawal of cash from credit card, travel check, transfer foreign exchanges…
Corporate banking services include domestic and international customers
• Scope of supply: supply all services
• Quality of supply: top quality in Vietnam
Commercial sponsorship and working capital: guarantees (bid security, contract implementation, prepayment, factoring service, overdraft, inventory sponsorship…)
International payment: open a letter of credit, notification and confirmation, discount export documents, import and export documents collection, shipping guarantee and open backup letter of credit…
Credit activities: short-term, middle-term and long-term loans (secured and unsecured loans), syndication loan.
Currency and payment management. In the context of lacking a complete automatic interbank payment system, HSBC set up internet connection network and signed cooperation agreements with major banks in the country to meet demands of using money of customers. Besides, internet banking system of HSBC (HSBCnet) is the global system based on internet of HSBC Group that helps customers to view online account information opened at HSBC, to process internet payment, to update new information about financial market and to integrate with account system of the corporation.
Securities custody and clearing payment
HSBC is the first international bank to be offered licenses of securities custody issued by State Securities Commission of Vietnam in July of 2000 with services including custody, receipt and transfer, handling upon requests/commands of corporations, receipt of income, report on fund and investment, authorized services…
Foreign exchange service and capital market
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Forex Spot Transactions (SPOT)
Forward Transactions (FORWARD)
Swap (SWAP)
Currency Derivatives (DERIVATIVE): options transaction, interest rate swaps, currency swaps
Risk management consulting, investment tools on capital market
Forex trading
2.6.2 The development strategy “All for customer satisfaction” of HSBC Bank
During the recent years, HSBC is the bank which has impressive achievements and activities in finance sector with series of prestigious awards and more importantly, it has built the loyalty of customers towards the bank. With the principle to meet all demands of customers, Board of Directors of HSBC do believe customer satisfaction is the measurement of success and the most important target in development strategy of the bank.
Standing before the strong increase of banking operations, customer needs are getting more diversified and abundant.Thus, certainly, they will come to banks which satisfy their needs in the best way. Moreover, banks also make efforts to find their own customers and increase business efficiency. Therefore, discovering and enhancing customer satisfaction is necessary and useful for long-term development strategy, thereby proving the top position of
“Best Foreign Bank in Vietnam” that HSBC Bank has created during the recent time.
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CHAPTER 3: RESEARCH METHODS
3.1 RESEARCH PROCESS
Figure 3.1 Research process Identifying research matter
Research objectives
Theoretical foundation - Theories about service quality
- Service quality models (SERVQUAL, SERVPERF and FTSQ) - Price and satisfaction
Identifying research models and scales
Qualitative research - Discussion
- Interview
- Adjustment of modeland scales
Quantitative research - Design of questionnaire - Collection of data
Data processing - Reliability analysis
- Factors analysis
- Pearson correlation coefficient analysis - Regression analysis
- ANOVA analysis
- Establishing summary model - Testing hypotheses
Research results
Conclusion and recommendations
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3.2 DATA COLLECTION
During the research, the author used two following data sources:
3.2.1 Primary data
- Survey forms received from customers.
- The results of interviews, discussions with employees/bank managers to acquire their opinions, plans as well as their evaluations of the research matter.
3.2.2 Secondary data
Theoretical foundation and articles chosen on marketing and banking magazines are the important secondary data serving the research. The sources of secondary data collection are:
Library at University of Economics Ho Chi Minh City
Banking magazine
Marketing magazine
Reports on services and service quality
Lectures about research method and data analysis SPSS
Performance reportof HSBC Bank
Internet
3.3 RESEARCH DESIGN 3.3.1 Qualitative research 3.3.1.1 Objectives
This is the preliminary research step to select variables carefully then the author bringsthem into research model, checks used scales, consults ideas from the bank side and customers about the research matters. By that means, we will build scales to apply in research model and establish questionnaire.
3.3.1.2 Process
At first, the author will prepare some questions to discuss and communicate with employees/bank managers about contents focusing on researches on customer satisfaction such as:
How does the Bank evaluatecustomersatisfaction with bank services?
What does the bank consider about the model of service quality in banking sector?
What comments does the bank give about criteria for service quality measurement?
What does the Bank think about customer expectations in the future?
Are measurement scales of customer satisfaction reasonable or not?
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Which scales does the Bank uses to measure the level of customer satisfaction?
How does the Bank bringsatisfaction to customers?
Then,the author will conduct discussions with participants including Executive Directors, Leaders of Planning Department, Marketing, Currency Business Department, International Payment and Customer Service Department, employees of Payment Department, employees at counters, employees of Marketing Department and employees of Product Development Department.
Regarding to customers, the author randomly selected 10 customers to attend dual interviews and then record their opinions about banking services and their expectations towards the Bank.
3.3.1.3 Results
After the deployment of qualitative research, eight factors of research model about customer satisfaction are agreed and can be used for further quantitative research; five criteria to measure customer satisfaction decreased to three (removing two criteria of
“Introducing the bank to third party” and “The level of customer satisfaction”):
The general service quality
The ability to meet customer demands
Continuationto use bank services
However, scales mentioned in the research model are needed to be adjusted more properly. Therefore, through the step of qualitative research, scales which are used to measure affecting factors towards customers are identified as Table 3.1.
Through the step of qualitative research, scales are identified fully (including 28 scales of 8 affecting factors towards customer satisfaction and 3 scales used to measure the level of customer satisfaction), serving the establishment of questionnaires and further quantitative research.
3.3.2 Quantitative research 3.3.2.1 Objectives
Quantitative research is performed to recheck scales in the research model. This is the detailed analysis step of collected data through survey forms sent to customers with the purpose to identify logicality, correlations between factors, thereby coming to specific conclusion about research topic.
3.3.2.2 Process
a. Building questionnaires
b. Identifying required number of samples for the research c. Sending survey forms to customers
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d. Contacting customers to follow responses e. Collecting feedbacks from customers
f. Analyzing data through the use of analysis tool SPSS in the below order:
♦Descriptive analysis
♦ Credibility analysis of measurement scales
♦ Factors analysis
♦ Building general research model
♦Testing model through Pearson analysis, recurrent analysis and ANOVA analysis 3.3.2.3 Results
There are total 550 questionnaires sent to customers through post office (250), e-mail (200), and at counters (100) with the supports of Customer Service Department. Lists of customers received survey form through post office and e-mail are randomly selected on the ground of data system of the Bank.
After two weeks without receiving feedbacks, senders will call and ask customers directly. For survey forms at counters, customers who come to make transaction at the Bank can answer and send back to employees immediately. There are 167 survey forms received (77 forms by post office, 49 forms by e-mail and 41 forms at counters) with response ratio as 30.36%, including 25 forms eliminated due to invalidity. Therefore, the remained number of forms to analyze is 142 forms.
As a result, after collecting the appropriate number of forms, the author will use SPSS tool to analyze data with encoding measurement scales as the following table and detailed results will be represented as below:
No. Encoding Description
1 STT01 The Bank has broad dealer network.
2 STT02 Transaction procedures are easy and quick.
3 STT03 The Bank has convenient transaction locations for customers.
4 SHH01 The Bank has modern equipment and machines.
5 SHH02 The Bank has fascinating documents, books and images of services.
6 SHH03
The Bank has clear transaction documents and related documents without mistakes.
7 SHH04 Employees of the Bank dress politely and impressively.
8 PCPV01 Employees of the Bank have good qualifications.
9 PCPV02 Employees of the Bank conduct services exactly and promptly.
10 PCPV03 Employees of the Bank respond to customer questions effectively.
11 PCPV04 Employees of the Bank are willing to serve customers.
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No. Encoding Description
12 PCPV05 Employees of the Bank are tactful and considerate towards customers.
13 DMDV01 The Bank has diversified service portfolios.
14 DMDV02
The Bank is always the pioneers in providing new services to meet higher demands of customers.
15 TXKH01 The Bank has hotline to serve customers 24/24.
16 TXKH02 Employees of the Bank always contact customers regularly.
17 TXKH03
The Bank always organizes thank-you party to customers at the end of each year to recognize their contributions.
18 TXKH04 The Bank always pays attention to customer contributions.
19 STN01 The Bank conducts right service at the first time.
20 STN02
The Bank protects confidential information about customers and transactions.
21 STN03 The Bank sends bank statements regularly and promptly.
22 TCTG01 The Bank applies competitive interest rate.
23 TCTG02 Reasonable transaction fees
24 TCTG03 The Bank has flexible price policy.
25 HADN01 The Bank is always the pioneers in renovation and social activities.
26 HADN02 The Bank always keeps promises to customers.
27 HADN03 The Bank has stable development strategy.
28 HADN04 The Bankhas effective and impressive marketing activities.
29 SHL01 The general service quality
30 SHL02 The ability to meet customer demands 31 SHL03 Continuation to use bank services
Table 3.1: Summary of encoding scales
3.3.3 Design of questionnaire 3.3.3.1 Objectives
To find out customer expectations towards theBank
To measure customer satisfaction
To inspect factors affecting customer satisfaction
To identify correlations between usage time, number of transaction with customer satisfaction of the Bank
3.3.3.2 Contents
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After qualitative research, questionnaires are established with 28 measurement scales to identify factors which bring pleasure to customers and 3 scales to identify the level of customer satisfaction towardsthe Bank including 5 main parts with 8 questions.
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CHAPTER 4: RESEARCH RESULTS
4.1 DESCRIPTIVE STATISTIC ANALYSIS 4.1.1 Identifying customer’s needs
For customers, the customer’s expectations about bank are ranked as follows: (1): Quick and accurate transaction procedure; (2): Competitive price; (3): Diverse service catalogue.
After processing data, the most expected factors were given scores according to the order of priorities by the scale from 1 to 3 and other factors were given the score of 4 to make calculation.
Descriptive Statistics
N Mean
Quick and accurate transaction procedure 142 2.11
Competitive price 142 2.12
Diverse service catalogue 142 2.14
Wide network of distribution 142 2.27
Professional staffs 142 2.30
Simple procedure 142 2.66
Willingness to help customers 142 2.88
Adhere to commitment 142 3.01
Clear and transparent procedure 142 3.18
Modern infrastructure 142 3.20
Valid N (listwise) 142
Table 4.1 Descriptive statistics on customer’s expectation
4.1.2 Factors affecting customer satisfaction Service quality
In 21 scales of service quality of the Bank (Table 4.2), customers most agree with the factor TXKH04_The Bank always listens to comments (Mean: 4.60); TXKH03_the Bank annually organizes customer appreciation party (Mean: 4.24), SHH01_the Bank has modern equipment (Mean: 4.15); PCPV05_Friendly and helpful staffs (Mean : 4.08); and TXKH01_
24 hour customer service line (Mean: 4.06). However, Table 3.4 also shows that there are 05 scales which have the lowest mean, indicating various degree of customer’s agreement with the variables. These are the variables DMDV01_Diverse service catalogue (Mean : 3.42);
STT03_ the Bank has convenient location (Mean: 3.43); Simple procedure (Mean: 3.49);
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DMDV02_ New available service (Mean: 3.54); and SHH02_Appealing bank introduction
Table 4.2: Descriptive statistics on service quality scales
Price competitiveness
The result of descriptive statistics (Table 4.3) shows that customers agreed most with TCTG03_Flexible price policy (Mean: 4.25) and TCTG01_ Competitive interest (Mean:
3.81). This is the highest degree of agreement with the price factor, which indicates that customers concern about price before using service (Consistent with the result of the customer’s expectation statistics showed in Table 3.5.1.1)
Descriptive Statistics
Table 4.3: Descriptive statistics on price scale
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Corporate image
According to Table 4.4, when assessing criteria for measuring corporate image, customers agree most with two scales HADN04_The Bank has impressive and effective marketing activities (Mean: 4.66), and HADN02_The bank always adheres to commitment (Mean: 3.87)
Table 4.4: Descriptive Statistics on corporate image scales
4.1.3 Customer satisfaction measurement
Table 4.5 shows that the customer satisfaction level is very high, in which 03 observed variables of customer satisfaction have the mean value > 4.7 and customers stated that they will continue to use the Bank’s services in the future. This is a good sign for the Bank’s operation and reputation over the past years. The Bank is also required to continue to make effort in order to improve service quality and maintain customer mastication.
Descriptive Statistics Continuing to use bank’s
services
142 3 5 4.71 .566
Valid N (listwise) 142
Table 4.5 Descriptive statistics on customer satisfaction
4.2 SCALE ANALYSIS
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4.2.1 Cronbach’s alpha
Cronbach’s alpha is a statistical test to check the closeness and the correlation between observed variables. It is involved in the two aspects including the correlation of variables themselves and the correlation of the score of every single observed variable with the total score of variables of each respondent.
This method allows analyst to eliminate the inappropriate variables and minimize the amount of unwanted variables in the model. The reason is that, if not doing that, we cannot know variability and deviation of variables. According to the method, only variables with Corrected Item-Total Correction > 0.3 and the Alpha coefficient > 0.6 are acceptable and suitable to be analyzed in the next step (Nunnally and BernStein, 1994). According to many researchers, if a scale has Cronbach’s alpha >= 0.8, it is a good scale and its level of correlation will be higher. Looking at the Table 4.6, we can know the result of reliability analysis as follows:
As for the factor of CONVENIENCE, all 3 observed variables have the Corrected Item- Total Correction > 0.3 so they are chosen. Meanwhile the factor SERVICE CATALOGUE does not satisfy the condition, so it is eliminated. However, when combining two factors CONVENIENCEand SERVICE CATALOGUE, the 5 observed variables STT01, STT02, DMDV01, DMDV02 have the suitable corrected item-total correction > 0.3 and their Alpha coefficient = 0.7611, which is high (while Alpha coefficient of every single variables
As for the factor of CONVENIENCE, all 3 observed variables have the Corrected Item- Total Correction > 0.3 so they are chosen. Meanwhile the factor SERVICE CATALOGUE does not satisfy the condition, so it is eliminated. However, when combining two factors CONVENIENCEand SERVICE CATALOGUE, the 5 observed variables STT01, STT02, DMDV01, DMDV02 have the suitable corrected item-total correction > 0.3 and their Alpha coefficient = 0.7611, which is high (while Alpha coefficient of every single variables