Luận văn thạc sĩ UEH internal market orientation and customer oriented behavior a study of banking

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

------------------------------

TRAN VO ANH TUYEN

INTERNAL MARKET ORIENTATION AND

CUSTOMER-ORIENTED BEHAVIOR

A Study of the Banking Industry in Ho Chi Minh City

MASTER OF BUSINESS (MBUS)

HO CHI MINH CITY_2014

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UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

------------------------------

TRAN VO ANH TUYEN

INTERNAL MARKET ORIENTATION AND

CUSTOMER-ORIENTED BEHAVIOR

A Study of the Banking Industry in Ho Chi Minh City

ID: 22120116

MASTER OF BUSINESS (MBUS)

SUPERVISOR: LE NGUYEN HAU

HO CHI MINH CITY_2014

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ACKNOWLEDGMENT

First of all, I sincerely thank the board of school, professors in

University of Economics Ho Chi Minh City, who spent effort and enthusiasm

on teaching, communicating the precious knowledge about my major during

the two years of study, as well as necessary specialized skills; so that I have full

capital for performing this research.

Next, I would specially like to send deeply gratitude to supervisor Le

Nguyen Hau, who has dedicated instructions, creates necessary and convenient

conditions, is always willing to help, gives suggestions, and advises me, in

order to choosing topic, determining the correct direction for the study and

completed thesis in the best way.

Finally, to complete the perfect and full study, I would genuinely like to

thank for getting the attention and support of selected banks in survey. They

kindly cooperate to quickly finish for collecting the accurate data, and the

model is used in study achieved high reliability. Especially, I truly thank all

tellers and individual customer relationship officers working at SeAbank-Ho

Chi Minh branch, who offer useful advices for research having practical

information.

Again, faithfully thank all those who contribute to help me complete the

study.

Yours sincerely,

Tran Vo Anh Tuyen

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ABSTRACT

The customer orientation of service personnel is often regarded as a

main determinant of service firms’ success. Namely, front-line service

employees are a primary contact point in banking settings and the way their

behaviors are perceived by customers is a critical antecedent of customer

satisfaction. For this reason, purpose of the present study is to recognize how

internal marketing orientation affects customer-oriented behavior of service

personnel in banking industry. In the paper, we have used a questionnaire with

twenty-five main questions in order to survey two hundred and fifty tellers and

individual customer relationship officers at joint stock commercial banks in Ho

Chi Minh city. Besides, a model has been designed to show the effect of

components belonging to internal marketing orientation on customer-oriented

behavior through employee commitment factor based on previous literature

review. As well as, a theoretical framework has been developed to prove

empirically with an application of regression analysis. Implications of the

findings for customers' overall satisfaction level replying on customer-oriented

behavior are discussed. From creating the motivation, capacity building, and

opportunity environment for employees show their performance, in order to

bring organizational competitiveness, lead to customer satisfaction. Finally, the

expected contribution of this study is that will be able to gain extend

knowledge about customer-employee interactions in banking industry in

Vietnam.

Keywords: Internal marketing orientation, Customer-oriented behavior,

Employee commitment, Banking industry, Frontline service employees.

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TABLE OF CONTENTS

CHAPTER 1. INTRODUCTION

1.1 Research Background ............................................................................. 1

1.2 Research Problem.................................................................................... 2

1.3 Research Objective.................................................................................. 6

1.4 Scope of the Research.............................................................................. 6

1.5 Structure of the Thesis............................................................................ 7

CHAPTER 2. LITERATURE REVIEW AND RESEARCH MODEL

2.1 Literature Review.................................................................................... 9

2.1.1 Customer-Oriented Behavior (COB)............................................. 9

2.1.2 Internal Market Orientation (IMO)................................................ 11

2.1.2.1 Internal Information Generation (IIG)............................... 13

2.1.2.2 Internal Communication (IC)............................................. 14

2.1.2.3 Internal Responsiveness (IR)............................................. 15

2.1.3 Employee commitment (EC)......................................................... 16

2.2 Hypotheses and Research Model ........................................................... 17

2.2.1 Hypotheses..................................................................................... 17

2.2.2 Conceptual Model.......................................................................... 20

CHAPTER 3. RESEARCH METHODOLOGY

3.1 Research Design....................................................................................... 22

3.1.1 Research Context and Method....................................................... 22

3.1.2 Sample selection and data collection............................................. 24

3.2 Measurement of Constructs ................................................................... 25

CHAPTER 4. RESULTS

4.1. Descriptive Statistic ................................................................................ 27

4.1.1 Description of the survey data ....................................................... 27

4.1.2 Descriptive data in the questionnaire............................................. 28

4.1.2.1 Descriptive statistic for demographic variables................. 28

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4.1.2.2 Descriptive Statistics of the Constructs ............................. 31

4.2 Results....................................................................................................... 33

4.2.1 Reliability and Validity.................................................................. 33

4.2.2 Hypotheses tests............................................................................. 36

4.2.3 Analysis of the causal relationships among the variables of the

model ............................................................................................................... 37

CHAPTER 5. CONCLUSION

5.1 Discussions and implications.................................................................. 40

5.2 Study Limitations and Future Research ............................................... 43

5.2.1 Limitations..................................................................................... 43

5.2.2 Recommendations for the future research ..................................... 44

5.3 Conclusion................................................................................................ 45

References ...................................................................................................... 47

Appendix ........................................................................................................ 69

Questionnaire................................................................................................. 71

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LIST OF TABLES AND FIGURES

Table 3.1. Measures underlying the constructs............................................... 25

Table 4.1. Descriptive Statistics of the Constructs.......................................... 31

Table 4.2. Meaning of Mean ........................................................................... 32

Table 4.3. Rating the Acceptance for Constructs of Banks ............................ 32

Table 4.4. Reliability and Convergent validity ............................................... 34

Table 4.5. The Correlation Matrix for Variables............................................. 35

Table 4.6. Summary of results......................................................................... 37

Figure 2.1. The proposed model of critical factors to customer-oriented

behavior ........................................................................................................... 21

Figure 4.1. Gender Ratio of the Banks Participating in the Survey................ 28

Figure 4.2. Education Level Ratio of the Banks Participating in the Survey

......................................................................................................................... 29

Figure 4.3. Working Time Ratio of the Banks Participating in the Survey ....

......................................................................................................................... 30

Figure 4.4. Results of causal relations of the model ....................................... 39

Appendix 1: Total Variance Explained ........................................................... 68

Appendix 2a: Model Summaryb

...................................................................... 68

Appendix 2b: Model Summaryb

...................................................................... 69

Appendix 3a: Coefficientsa

.............................................................................. 69

Appendix 3b: Coefficientsa

............................................................................. 69

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Internal Market Orientation and Customer-Oriented Behavior:

A Study of the Banking Industry in Ho Chi Minh City

1

CHAPTER 1. INTRODUCTION

1.1Research Background

In service organizations, many researchers have demonstrated that

customer preferences are influenced by interactions between employees and

customers (Bowen, 1986; Kohli & Jaworski, 1990; Gremler, Gwinner &

Brown, 2001) and have argued that an adequate focus on service personnel

(Berry, 1995) is also considered to be the important element of the firm’s

marketing mix (Nicoulaud, 1989) in an almost parallel research stream

(Gronroos, 2006). The origin of this research stream can be found as the

internal marketing (IM) concept introduced by Berry, Hensel and Burke

(1976). They have suggested that the regulations that apply to the company’s

external market are relevant for its internal market in similar way. The center of

internal marketing efforts is the management of relationship between internal

customers and internal suppliers (George, 1990; Lings, & Brooks, 1998) for

service-mindedness and customer-oriented behavior (Berry, 1981; Gronroos,

1989), and importantly for successful exchanges with external markets (Flipo,

1986). Based on this concept, not many companies succeed in implementing

IM, largely because of the inadequacy of unanimously-agreed upon definitions

and lack of clarity with respect to the operation of the IM concept (Gronroos,

1991; Greene, Walls, & Schrest, 1994). Towards this end, Lings and Greenley

(2005) have developed an instrument to measure internal market orientation

(IMO) in a retail industry and suggested that the IMO has positive

consequences in different service contexts and be examined in different cultural

settings.

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