The influence of relationship marketing to credit card customers' loyalty at Ho Chi Minh branch Shinhan Viet Nam, 2018

MINISTRY OF EDUCATION AND TRAINING STATE BANK OF VIETNAM

BANKING UNIVERSITY HO CHI MINH CITY

LE NGOC TRAM ANH

THE INFLUENCE OF RELATIONSHIP MARKETING TO

CREDIT CARD CUSTOMERS’ LOYALTY AT HO CHI MINH

BRANCH SHINHAN VIET NAM

MAJOR: FINANCE AND BANKING

MAJOR NUMBER: 7340201

GRADUATION THESIS

HO CHI MINH - 2018

MINISTRY OF EDUCATION AND TRAINING STATE BANK OF VIETNAM

BANKING UNIVERSITY HO CHI MINH CITY

LE NGOC TRAM ANH

THE INFLUENCE OF RELATIONSHIP MARKETING TO

CREDIT CARD CUSTOMERS’ LOYALTY AT HO CHI MINH

BRANCH SHINHAN VIET NAM

MAJOR: FINANCE AND BANKING

MAJOR NUMBER: 7340201

GRADUATION THESIS

SUPERVISOR: PhD. TRAN KIM LONG

HO CHI MINH - 2018

i

ABSTRACT

Author ANH, Tram Ngoc LE

Title The influence of relationship marketing to credit card customers’

loyalty at Ho Chi Minh branch Shinhan Viet Nam

Language English

Instructor LONG, Kim TRAN

Credit card products play an essential role in Shinhan Viet Nam’s business planning

and profit and with the aim to gaining high qualify ANZ personal customers to pursue scope

of becoming a top third bank in credit card field, Shinhan Viet Nam did an M&A with ANZ

Viet Nam. But after M&A happened, Shinhan bank, especially Ho Chi Minh branch,

witnessed a significant increase in the number of withdraw customers, and an internal survey

had been done with the results pointed out the decrease in loyalty was the main reason for this

tendency. Because the backbone of credit card products is a relationship between customers

and the bank then relationship marketing had been chosen as a solution for this trend due to

the aim of this is building, maintaining and enhancing a relationship with final purpose to get

the loyalty of customers. The aim of this study was to examine the influence of relationship

marketing to the loyalty of credit card customers to see as if this is the key to solve problems

of Ho Chi Minh branch and Shinhan Bank. The study chose five underpinnings of relationship

marketing including trust, commitment, communication, conflict handling and empathy as

independent variables with loyalty as a dependent variable, by using questionnaire survey,

Cronbach’s Alpha, Exploratory Factor Analysis and Regression test, this study gave a

conclusion that all five underpinnings have a positive relationship with loyalty. Additionally,

trust, commitment and conflict handling were three underpinnings had strong affection with

loyalty while communication and empathy had a weak one. This confirmed that relationship

marketing was one of the tools to solve loyalty problem at Ho Chi Minh branch, Shinhan Viet

Nam.

Keywords: Relationship marketing, Credit Card, Loyalty, Ho Chi Minh branch Shinhan bank

ii

DECLARATION OF AUTHENCITY

Full name: Le Ngoc Tram Anh

Student class: HQ02-GE01, faculty of Banking and Finance, Banking University of Ho Chi

Minh city.

Student code: 030630140298

I declare that this thesis has been composed solely by myself and that it has not been

submitted, in whole or in part, in any previous application for a degree. Except where states

otherwise by reference or acknowledgment, the work presented is entirely my own.

Ho Chi Minh City, December 12

th 2018

Author

Le Ngoc Tram Anh

iii

ACKNOWLEDGEMENTS

Frist of all, I would like to thank all lectures at Banking University of Ho Chi Minh

City. Your enthusiastic and devoted instruction helped me to improve not only my major

knowledge but also soft skills which helps me a lot in doing the study.

Especially, my supervisor Mr. Tram Kim Long who enthusiastically instructed and

encouraged me to complete this graduation study, without you I have no direction and effort

to persuade this study.

Last but not least, I want to express my grateful to my parents who always love

unconditionaly and believe in my choices, my younger brother, friends who beside me at my

up and down mood, Jerry Nguyen who teaches me a lot about dealing with stress problems.

Ho Chi Minh City, December 12

th 2018

Author

Le Ngoc Tram Anh

iv

TABLE OF CONTENT

LIST OF TABLES AND FIGURES...................................................................................vii

LIST OF ACRONYMS......................................................................................................... vi

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

1.1. Research background .................................................................................................. 1

1.2. Research objectives...................................................................................................... 4

1.3. Research questions ................................................................................................... 4

1.4 Subject and Scope of research .................................................................................... 4

1.4.1 Subject of study ..................................................................................................... 4

1.4.2 Scope of the study.................................................................................................. 4

1.5 Analytical methods........................................................................................................... 4

1.6. Contributions of research............................................................................................ 5

1.7. Study structure............................................................................................................. 5

CHAPTER 2: LITERATURE REVIEW............................................................................. 6

2.1. Literature review ...................................................................................................... 6

2.1.1 Customer Loyalty ...................................................................................................... 6

2.1.2 Relationship marketing ........................................................................................ 7

2.2.3 Previous Research ................................................................................................. 9

CHAPTER 3: DATA AND METHODOLOGY................................................................ 15

3.1 Theoretical Model ...................................................................................................... 15

3.2 Data description ........................................................................................................ 18

3.3 Data analysis methods ............................................................................................... 20

3.3.1 Cronbach’s Alpha.................................................................................................... 20

3.3.2 Exploratory factor analysis (EFA) .................................................................... 20

3.3.3 Regression ............................................................................................................ 21

v

3.4 Study process.............................................................................................................. 21

3.5 Constructs variables .................................................................................................. 22

CHAPTER 4: STUDY RESULTS ...................................................................................... 27

4.1 Sample Description .................................................................................................... 27

4.2 Scale preliminary verification................................................................................... 29

4.2.1 Cronbach’s Alpha results........................................................................................ 29

4.2.2 EFA results............................................................................................................... 32

4.3 Adjusted Model .......................................................................................................... 36

4.4 Regression................................................................................................................... 38

4.4.1 Pearson correlation.................................................................................................. 38

4.4.2 Regression................................................................................................................. 39

4.4.3 Verify presumptions of the model.......................................................................... 40

4.4.4 Fitness of the model ................................................................................................. 45

4.4.5 Result discussion ...................................................................................................... 47

4.5 Relationship between geographic variable with loyalty........................................ 49

4.5.1 The relationship between Genre and Married Status with Loyalty ................... 49

4.5.2 The relationship between Age, Study and Income level with Loyalty................ 51

CHAPTER 5: CONCLUSION, RECOMMENDATIONS AND LIMITATIONS ........ 53

5.1 Conclusion and Recommendations .......................................................................... 53

5.1.1 Group of strong affection ................................................................................... 53

5.1.2 Group of weak affection ..................................................................................... 57

5.1.3 Other recommendation....................................................................................... 58

5.2 Limitations and suggestion for further researches................................................. 58

REFERENCES..................................................................................................................... 61

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LIST OF ACRONYMS

Abbreviations Full meaning

EFA Exploratory Factor Analysis

HCM Ho Chi Minh

VND Viet Nam Dong

SPSS Statistical package for Social Sciences

RM Relationship Marketing

KMO Kaiser-Meyer-Olkin

LO Loyalty

TR Trust

CO Commitment

COM Communication

CF Conflict handling

EM Empathy

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LIST OF TABLES AND FIGURES

Name Page

Figure 2.1: First Reference Theoretical framework............................................................... 10

Figure 2.2: Second Reference Theoretical framework .......................................................... 11

Figure 2.3: Third Reference Theoretical framework ............................................................. 12

Figure 2.4: Fourth Reference Theoretical framework ........................................................... 13

Figure 3.1: Suggestion Theoretical framework...................................................................... 15

Figure 3.2: Study process....................................................................................................... 22

Table 4.1: Descriptive Statistics............................................................................................. 28

Table 4.1.1: Reality of HCM’s branch................................................................................... 29

Table 4.2: Cronbach’s alpha results summarize .................................................................... 30

Table 4.3: RM’s First Rotated Component Matrixa test result............................................... 33

Table 4.4: RM’s Second Rotated Component Matrixa result................................................. 34

Table 4.5: RM’s KMO and Bartlett's Test result ................................................................... 35

Table 4.6: LO’s KMO and Bartlett's Test result .................................................................... 35

Table 4.7: LO’s Total Variance Explained result .................................................................. 35

Table 4.8: LO’s Component Matrixa result........................................................................... 36

Table 4.9: Adjusted scale ....................................................................................................... 36

Table 4.10: Correlations test result ........................................................................................ 38

Table 4.11: Coefficientsa test result........................................................................................ 41

Table 4.12: Model Summaryb

................................................................................................ 45

Table 4.13: Coefficientsa results............................................................................................. 46

Table 4.14: Final hypothesis.................................................................................................. 47

Table 4.15: Relationship between Genre and Loyalty........................................................... 50

Table 4.16: Males’ and Females’ loyalty............................................................................... 50

Table 4.17: Relationship between Married Status and Loyalty............................................. 51

viii

LIST OF GRAPHS

Graph 4.1: Scatterplot chart ................................................................................................... 41

Graph 4.2: Histogram chart.................................................................................................... 42

Graph 4.3: Normal P-P Plot of Regression standardized residual chart................................ 43