Luận văn thạc sĩ UEH determinants of customer satisfaction in the personal loan service

MINISTRY OF EDUCATION AND TRAINING

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

HOANG THI THANH THANH

DETERMINANTS OF CUSTOMER SATISFACTION

IN THE PERSONAL LOAN SERVICE:

A STUDY OF PUBLIC AND PRIVATE BANKING SECTORS

IN HO CHI MINH CITY

MASTER’S THESIS

In

Business Administration

Ology Code: 60.34.01.02

Supervisor

Associate Professor NGUYEN DINH THO

Ho Chi Minh City, 2012

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ACKNOWLEGEMENT

This research project would not have been possible without the support

of many people. Firstly I would like to express my heartfelt gratitude and

deepest appreciation to my supervisor, Associate Professor Nguyen Dinh Tho

for his precious guidance, share experience, ceaseless encouragement, and

valuable suggestions throughout the course of my research.

My thanks would also go to all of my classmates, my colleagues,

especially my “old pals”, Ms. Nguyen Thi Phuong Thao and Ms. Le Thi Nhu

Huyen for all of their friendship and encouragement.

I also wish to thank my friends in Agribank, ACBank, Sacombank and

Eximbank for their great support. My thanks would also go to the respondents,

without them, my thesis could not have been done.

Finally, I would like to express my deepest gratitude and honor to my

dear parents for not only the love they devote to me but also for the time I took

from them which should have been my devotion to them in their aged time.

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ABSTRACT

This study investigates the main factors of the personal loan service affecting

customer satisfaction between public and private banks in Ho Chi Minh city. Data

analysis over a few years reveals that bank‟s performance may be evaluated in

relation to a set of satisfaction dimensions to indicate the strong and the weak points

of a business. According to the results, customer satisfaction is positively related to

the service. An interesting finding is that five components of service quality

(tangibility, reliability, responsiveness, assurance, and empathy) have a positive and

significant impact on customer satisfaction, which consists of a previous study of

Parasuraman (1991). On the other hand, brand image is an important determinant in

relation with customer satisfaction that is measured by Akviran (1994). The

different weights of customer expectation, perceived quality, and perceived value

have implications for bank managers to use them as a reference source for customer

satisfaction strategy. The research also provides a modified model of customer

satisfaction to determine the critical personal loan service dimensions in public and

private banks in Ho Chi Minh city.

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CONTENTS

ACKNOWLEGEMENT .............................................................................................1

ABSTRACT................................................................................................................2

CONTENTS................................................................................................................3

LIST OF TABLES ......................................................................................................6

LIST OF FIGURES.....................................................................................................7

CHAPTER 1: INTRODUCTION ...............................................................................8

1.1. BACKGROUND OF THE STUDY.................................................................8

1.1.1. Vietnamese banking sector........................................................................8

1.1.2. The personal loan service ..........................................................................9

1.1.3. Customer satisfaction in Vietnam............................................................11

1.2. RATIONALE OF THE RESEARCH ............................................................11

1.3. STATEMENT OF THE PROBLEM .............................................................12

1.4. RESEARCH OBJECTIVE.............................................................................13

1.5. SCOPE OF THE RESEARCH.......................................................................13

1.6. RESEARCH METHODOLOGY...................................................................14

1.6.1. Secondary data.........................................................................................14

1.6.2. Primary data.............................................................................................14

1.7. THE STRUCTURE OF THE RESEARCH...................................................14

CHAPTER 2: LITERATURE REVIEW ..................................................................16

2.1. INTRODUCTION..........................................................................................16

2.2. CUSTOMER SATISFACTION.....................................................................16

2.3. DETERMINANTS OF CUSTOMER SATISFACTION ..............................17

2.4. CUSTOMER SATISFACTION WITH THE PERSONAL LOAN SERVICE

...............................................................................................................................18

2.5. HYPOTHESES AND MODEL......................................................................18

2.5.1. Brand image.............................................................................................18

2.5.2. Customer expectation ..............................................................................19

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2.5.3. Perceived quality .....................................................................................20

2.5.4. Perceived value........................................................................................21

2.6. CONCLUSION ..............................................................................................23

CHAPTER 3: RESEARCH DESIGN.......................................................................24

3.1. INTRODUCTION..........................................................................................24

3.2. RESEARCH DESIGN ...................................................................................24

3.3. MEASUREMENT SCALE............................................................................27

3.3.1. Introduction..............................................................................................27

3.3.2. Operation of measures.............................................................................27

3.3.2.1. Scale to measure brand image...........................................................27

3.3.2.2. Scale to measure customer expectation ............................................28

3.3.2.3. Scale to measure perceived quality...................................................29

3.3.2.4. Scale to measure perceived value .....................................................30

3.4. PRILIMINARY RESEARCH........................................................................31

3.5. MAIN RESEARCH .......................................................................................32

3.5.1. Sample design..........................................................................................32

3.5.1.1. Brand selection..................................................................................32

3.5.1.2. Sampling ...........................................................................................33

3.5.1.3 Sample size ........................................................................................34

3.5.2. Survey method .........................................................................................35

3.6. CONCLUSION ..............................................................................................35

CHAPTER 4: RESEARCH RESULTS ....................................................................37

4.1. INTRODUCTION..........................................................................................37

4.2. SAMPLE CHARACTERISTICS...................................................................37

4.2.1. Final sample.............................................................................................37

4.2.2. Characteristics of sample.........................................................................38

4.3. DATA ANALYSIS ........................................................................................42

4.3.1. Reliability evaluation through Cronbach‟s Alpha ...................................43

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4.3.2. Evaluation the measurement scale by using Exploratory Factor Analysis

(EFA) .................................................................................................................46

4.3.2.1. Some rules in EFA test .....................................................................46

4.3.2.2. EFA for determinants of customer satisfaction ................................46

4.3.2.3. EFA for customer satisfaction ..........................................................48

4.3.3. Modeling Testing.....................................................................................48

4.3.3.1. Correlation coefficient analysis ........................................................48

4.3.3.2. Regression analysis...........................................................................49

4.3.3.2.1. Multiple regression assumptions................................................49

4.3.3.2.2. Regression model .......................................................................50

4.4. SUMMARY ...................................................................................................56

CHAPTER 5: CONCLUSIONS AND IMPLICATIONS ........................................57

5.1. INTRODUCTION..........................................................................................57

5.2. CONCLUSIONS FROM THE RESEARCH QUESTIONS..........................57

5.3. DICUSSIONS OF THE RESEARCH FINDINGS........................................59

5.4. CONTRIBUTIONS........................................................................................61

5.4.1. Theoretical contribution...........................................................................61

5.4.2. Methodological contribution ...................................................................63

5.5. MANAGERIAL IMPLICATIONS OF THE RESEARCH...........................64

5.5.1. Managerial implications for public banks...............................................64

5.5.2. Managerial implications for private banks..............................................65

5.6. LIMITATIONS OF THE RESEARCH AND FUTURE RESEARCH .........66

5.7. CONCLUSION ..............................................................................................67

APPENDIX 1: GROUP DISCUSSION....................................................................74

APPENDIX 2: QUESTIONNAIRE..........................................................................79

APPENDIX 3: CRONBACH‟S ALPHA ANALYSIS RESULT.............................83

APPENDIX 4: FACTOR ANALYSIS RESULT.....................................................87

APPENDIX 5: MUPTIPLE REGRESSION ASSUMPTIONS................................90

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LIST OF TABLES

Table 3.1. Measures of brand image .........................................................................28

Table 3.2. Measures of customer expectation...........................................................28

Table 3.3. Measures of perceived quality .................................................................29

Table 3.4. Measures of perceived value....................................................................30

Table 3.5. Measures of customer satisfaction ...........................................................30

Table 4.1. Sample characteristics of public banks....................................................39

Table 4.2. Sample characteristics of private banks...................................................41

Table 4.3. Reliability test of the personal loan service and customer satisfaction in

public and private banks............................................................................................43

Table 4.4. Final reliability test of the personal loan service and customer satisfaction

in public and private banks .......................................................................................45

Table 4.5. EFA analysis result of determinants in public and private banks............47

Table 4.6. EFA analysis result of customer satisfaction in public and private banks

...................................................................................................................................48

Table 4.7. Pearson correlation matrix in public and private banks...........................49

Table 4.8. Model Summary b in public and private banks.......................................51

Table 4.9. Anova b

in public and private banks........................................................51

Table 4.10. Coefficients a

in public and private banks .............................................51

Table 4.11. Model Summary b

in public banks.........................................................52

Table 4.12. Model Summary b

in private banks........................................................53

Table 4.13. Anova b

in public banks.........................................................................53

Table 4.14. Anova b

in private banks........................................................................53

Table 4.15. Coefficients a

in public banks ................................................................54

Table 4.16. Coefficients a

in private banks ...............................................................54

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LIST OF FIGURES

Figure 2.1. Research model.......................................................................................22

Figure 3.1. Research process.....................................................................................26

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CHAPTER 1: INTRODUCTION

1.1. BACKGROUND OF THE STUDY

1.1.1. Vietnamese banking sector

The banking sector in Vietnam has a significant growth rate during past two

decades along with the economic development. This banking system consists of five

commercial state-owned banks, thirty seven commercial joint-stock banks, six joint￾venture banks, thirteen 100% foreign banks, and fifty three representative branches

of foreign banks (Wikipedia, 2012). The development primarily concentrates on

commercial joint-stock and foreign banks showing the attractiveness and potential

development of Vietnam baking industry to inland investors as well as international

financial institutions.

The market changes create more challenges and difficulties for banks. The

public banks face adoption of technology and issues like credit proposals and

personal matters. Processing bad debits, finding partners to increase financial

ability, dealing with difficult issues from the tight currency policy and the limited

credit scale are carried out by the private banks. Changing the attitude of personnel

and developing strategies are justified for the strong and weak banks. All banks

must design a new plan to survive in the innovative period (Bui, 2011).

With the entry of new generation tech-savvy private banks and the expansion

of operations of foreign banks, the banking sector has become too competitive.

Well-computerized foreign banks are beginning to compete seriously with the

nationalized banks. They aim at a profitable and wealthy part of the market and, in

contrast to the nationalized banks; they do not recognize any social responsibilities

to small account holders. Almost of the banks are still controlled by Public Sector

Banks (PSBs). PSBs are still dominating the commercial banking system. To deal

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