Thông tin tài liệu
DETERMINANTS OF CUSTOMER LOYALTY IN RETAIL BANKING
A case study of BIDV’s branches and transaction offices in Lam Dong Province
In Partial Fulfillment of the Requirements of the Degree of
MASTER OF BUSINESS ADMINISTRATION
In MARKETING
By
Student’s name: Ms: NGUYEN TRAN TRA LINH (MBA04019)
Advisor: DR. NGUYEN QUYNH MAI
International University - Vietnam National University HCMC
August 2013
DETERMINANTS OF CUSTOMER LOYALTY IN RETAIL BANKING
A case study of BIDV’s branches and transaction offices in Lam Dong Province
In Partial Fulfillment of the Requirements of the Degree of
MASTER OF BUSINESS ADMINISTRATION
In MARKETING
By
Ms: Nguyen Tran Tra Linh
ID: MBA04019
International University - Vietnam National University HCMC
August 2013
Under the guidance and approval of the committee, and approved by all its members, this
thesis has been accepted in partial fulfillment of the requirements for the degree.
Approved:
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---------------------------------------------
Dr. Mai Ngoc Khuong - Chairman
Dr. Nguyen Quynh Mai - Advisor
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Dr. Nguyen Quynh Mai - Secretary
Dr. Ho Thi Bich Van – Examiner 2
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Dr. Nguyen Quang Trung – Examiner 1
Dr. Tu Van Binh - Member
Acknowledge
To complete this thesis, I have been benefited from the following people:
First of all, I would like to express deep gratitude to my advisor, Dr. Nguyen
Quynh Mai, School of Business, International University, Hochiminh City, for her
effective academic advisory and her encouragement.
Secondly, I would like to send my sincere thank you to the professors and
lecturers at School of Business Administration, International University. The knowledge
and skills that I have learned from them are useful to complete this thesis.
My thanks also go to my friends, other students of MBA111, who are doing their
theses at the same time with me, for your share and encouragement.
I would like to thank managers and employees at BIDV‟s branches and
transaction offices in Lam Dong Province, for their enthusiasm and help.
Last but not least, I would like to express great gratitude to my parents and my
sister who give me encouragement and financial support through the whole course. They
have supported me with all the love.
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Plagiarism Statements
I would like to declare that, apart from the acknowledged references, this thesis
either does not use language, ideas, or other original material from anyone; or has not
been previously submitted to any other educational and research programs or institutions.
I fully understand that any writings in this thesis contradicted to the above statement will
automatically lead to the rejection from the MBA program at the International University
– Vietnam National University Hochiminh City.
ii
Copyright Statement
This copy of the thesis has been supplied on condition that anyone who consults it
is understood to recognize that its copyright rests with its author and that no quotation
from the thesis and no information derived from it may be published without the author‟s
prior consent.
© Nguyen Tran Tra Linh/ MBA04019/2011-2013
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Table of Contents
CHAPTER ONE – INTRODUCTION .........................................................................1
1.
Background...........................................................................................................1
1.1.
Overview of the banking industry in Vietnam ................................................1
1.2.
Overview of the banking industry in Lam Dong Province ..............................2
1.3.
BIDV‟s general Information and the network in Lam Dong Province .............3
1.3.1.
General Information of BIDV .................................................................3
1.3.2.
BIDV‟s network in Lam Dong Province .................................................4
2.
Research Problem .................................................................................................5
3.
Research Question ................................................................................................7
4.
Research Objective ...............................................................................................7
5.
Scope And Limitation ..........................................................................................7
6.
Significance Of The Study ....................................................................................8
7.
Structure Of Thesis ...............................................................................................8
CHAPTER TWO – LITERATURE REVIEW ............................................................9
1.
2.
Customer Loyalty .................................................................................................9
1.1.
Definition.......................................................................................................9
1.2.
Importance of Customer Loyalty .................................................................. 10
1.3.
Customer Loyalty Index ............................................................................... 11
Factors influence Customer Loyalty .................................................................... 12
2.1.
Customer Satisfaction .................................................................................. 13
2.2.
Service Quality ............................................................................................ 13
2.2.1.
Concept ................................................................................................ 13
2.2.2.
Impact of service quality on customer loyalty ....................................... 14
2.2.3.
Service Quality Measurement ............................................................... 14
2.2.4.
Service Quality Measurement in the banking industry ........................... 15
2.3.
Corporate Image .......................................................................................... 16
2.4.
Customer Trust ............................................................................................ 16
2.5.
Switching Costs ........................................................................................... 17
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CHAPTER THREE – RESEARCH METHODOLOGY ........................................... 18
1.
Research Model & Hypotheses ........................................................................... 18
2.
Research Process................................................................................................. 21
3.
Measurement Design........................................................................................... 21
4.
5.
3.1.
Customer Loyalty Measurement................................................................... 22
3.2.
Customer Satisfaction Measurement ............................................................ 22
3.3.
Service Quality Measurement ...................................................................... 22
3.4.
Corporate Image Measurement .................................................................... 24
3.5.
Customer Trust Measurement ...................................................................... 24
3.6.
Switching costs Measurement ...................................................................... 24
Questionnaire Design .......................................................................................... 25
4.1.
First draft of Questionnaire .......................................................................... 25
4.2.
Pilot Test ..................................................................................................... 25
4.3.
Final format of Questionnaire ...................................................................... 28
Data Collection Method ...................................................................................... 29
5.1.
Sample ......................................................................................................... 29
5.2.
Sample Size ................................................................................................. 29
5.3.
Sampling...................................................................................................... 31
6.
Data Analysis Method ......................................................................................... 32
7.
Validity And Reliability ...................................................................................... 35
CHAPTER FOUR – DATA ANALYSIS .................................................................... 36
1.
Sample Demographic .......................................................................................... 36
2.
Descriptive Statistics ........................................................................................... 39
2.1.
Customer Loyalty ........................................................................................ 40
2.2.
Customer Satisfaction .................................................................................. 42
2.3.
Service Quality ............................................................................................ 43
2.4.
Corporate Image .......................................................................................... 45
2.5.
Customer Trust ............................................................................................ 47
2.6.
Switching Costs ........................................................................................... 48
3.
Reliability Test ................................................................................................... 50
4.
Exploratory Factor Analysis (EFA) ..................................................................... 51
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5.
Confirmatory Factory Analysis (CFA) ................................................................ 54
6.
Correlation Testing ............................................................................................. 56
7.
Structural Equation Modeling (SEM) .................................................................. 58
8.
Multi-Group Structural Equation Modeling (MGSEM) ....................................... 62
9.
One-Way ANOVA Testing ................................................................................. 64
CHAPTER FIVE – CONCLUSION AND RECOMMENDATION .......................... 67
1.
2.
Conclusion .......................................................................................................... 67
1.1.
Customer Loyalty & Customer Loyalty Index .............................................. 68
1.2.
Factors influencing Customer Loyalty – Model Results ............................... 69
Recommendations ............................................................................................... 72
2.1.
Applying Lean Six Sigma for banking business ........................................... 74
2.2.
Building multi-channel system ..................................................................... 75
2.3.
Enhancing banking infrastructure ................................................................. 76
2.4.
Improving employee performance ................................................................ 76
2.4.1.
Communication .................................................................................... 77
2.4.2.
Employee appearance ........................................................................... 78
2.5.
3.
Managing Corporate Image .......................................................................... 78
Limitation & Further Research Direction ............................................................ 80
REFERENCE .............................................................................................................. 81
APPENDIX .................................................................................................................. 92
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List of Tables
Table 1.1: BIDV‟s network in Lam Dong Province.................................................... 4
Table 3.1: Customer Loyalty Measurement .............................................................. 22
Table 3.2: Customer Satisfaction Measurement ....................................................... 22
Table 3.3: Service Quality Measurement - SERVQUAL Measurement .................... 23
Table 3.4: Service Quality Measurement – SYSTRA-SQ Measurement ................... 23
Table 3.5: Corporate Image Measurement................................................................ 24
Table 3.6: Customer Trust Measurement ................................................................. 24
Table 3.7: Switching costs Measurement ................................................................. 24
Table 3.8: First pilot test‟s result – Cronbach‟s Alpha .............................................. 26
Table 3.9: Second pilot test‟s result – Cronbach‟s Alpha.......................................... 27
Table 3.10: Final format of Questionnaire ................................................................ 29
Table 4.1: Customer Loyalty descriptive statistics ................................................... 40
Table 4.2: Customer Satisfaction descriptive statistics ............................................. 42
Table 4.3: Service Quality descriptive statistics ....................................................... 43
Table 4.4: Corporate Image descriptive statistics ..................................................... 45
Table 4.5: Customer Trust descriptive statistics ....................................................... 47
Table 4.6: Switching Costs descriptive statistics ...................................................... 48
Table 4.7: Reliability test‟s result - Cronbach's Alpha .............................................. 50
Table 4.8: Pattern matrix of variables ...................................................................... 52
Table.4.9: CFA Result - Standardized Regression Weights ...................................... 55
Table 4.10: Correlations testing result ...................................................................... 57
Table 4.11: Coefficient of correlation (r).................................................................. 57
Table 4.12: Regression Weights of Model 1............................................................. 59
Table 4.13: Regression Weights of Model 2............................................................. 60
Table 4.14: Model 2 - Squared Multiple Correlation ................................................ 61
Table 4.15: Model 2 - Regression Weights .............................................................. 61
Table 5.1: Five steps of Lean Six Sigma .................................................................. 74
Table 5.2: The Trust Creation Process ..................................................................... 78
Table 5.3: Strategic Brand Management Process ...................................................... 80
Table E.1: Cronbach‟s Alpha of Customer Loyalty ................................................ 110
Table E.2: Item-Total Statistics of Customer Loyalty ............................................ 110
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Table E.3: Cronbach‟s Alpha of Customer Satisfaction .......................................... 110
Table E.4: Item-Total Statistics of Customer Satisfaction ...................................... 110
Table E.5: Cronbach‟s Alpha of Service Quality .................................................... 110
Table E.6: Item-Total Statistics of Service Quality ................................................ 110
Table E.7: Cronbach‟s Alpha of Corporate Image .................................................. 111
Table E.8: Item-Total Statistics of Corporate Image ............................................... 111
Table E.9: Cronbach‟s Alpha of Customer Trust .................................................... 111
Table E.10: Item-Total Statistics of Customer Trust............................................... 111
Table E.11: Cronbach‟s Alpha of Switching Cost .................................................. 111
Table E.12: Item-Total Statistics of Switching Costs.............................................. 111
Table F.1: Round 1 - KMO and Bartlett's Test ....................................................... 113
Table G.2: Round 1 - Total Variance Explained ..................................................... 113
Table G.3: Round 1 - Pattern Matrix ...................................................................... 114
Table G.4: Round 2 - KMO and Bartlett's Test ...................................................... 114
Table G.5: Round 2 - Total Variance Explained ..................................................... 114
Table G.6: Round 2 - Pattern Matrix ...................................................................... 115
Table G.7: Round 3 - KMO and Bartlett's Test ...................................................... 115
Table G.8: Round 3 - Total Variance Explained ..................................................... 116
Table G.9: Round 3 - Pattern Matrix ...................................................................... 116
Table G.10: Round 4 - KMO and Bartlett's Test .................................................... 116
Table G.11: Round 4 - Total Variance Explained ................................................... 117
Table G.12: Round 4 - Pattern Matrix .................................................................... 117
Table G.13: EFA‟s result - Cronbach‟s Alpha of Service Quality........................... 118
Table G.14: EFA‟s result - Item-Total Statistics of Service Quality ....................... 118
Table J.1: Education level – Test of Homogeneity of Variances ............................. 121
Table J.2: Education level – ANOVA .................................................................... 121
Table J.3: Income – Test of Homogeneity of Variances ......................................... 121
Table J.4: Income – ANOVA................................................................................. 121
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List of Figures
Figure 2.1: Net Promoter Score Equation ................................................................. 11
Figure 2.2: Determinants of Perceived Service Quality ............................................ 15
Figure 3.1: Research model ..................................................................................... 18
Figure 3.2: Research process ................................................................................... 21
Figure 4.1: The percentage gender of BIDV‟s customers ......................................... 36
Figure 4.2: The percentage education level of BIDV‟s customers ............................ 36
Figure 4.3: The percentage monthly income of BIDV‟s customers........................... 37
Figure 4.4: The percentage job categories of BIDV‟s customers .............................. 37
Figure 4.5: The length of working relationship between customers and BIDV ......... 38
Figure 4.6: Multichannel of BIDV ........................................................................... 38
Figure 4.7: Categories of BIDV‟s Products and Services ......................................... 39
Figure 4.8: Questionnaire response on Customer Loyalty ........................................ 40
Figure 4.9: Questionnaire response on Customer Satisfaction .................................. 42
Figure 4.10: Questionnaire response on Service Quality .......................................... 44
Figure 4.11: Questionnaire response on Corporate Image ........................................ 46
Figure 4.12: Questionnaire response on Customer Trust .......................................... 47
Figure 4.13: Questionnaire response on Switching Costs ......................................... 49
Figure 4.14: CFA result ........................................................................................... 54
Figure 4.15: Revised Model ..................................................................................... 56
Figure 4.16: SEM result – Model 1 .......................................................................... 59
Figure 4.17: SEM result – Model 2 .......................................................................... 60
Figure 4.18: Final research model ............................................................................ 62
Figure 4.19: MGSEM result – invariant model and
variant model of Female/Male group ....................................................................... 63
Figure 4.20: MGSEM result – P-value ..................................................................... 64
Figure 4.21: Radar chart - Customer Loyalty & Education level .............................. 65
Figure 4.22: Radar chart - Customer Loyalty & Income ........................................... 66
Figure 5.1: Recommendations for enhancing BIDV‟s customer loyalty ................... 73
Figure E.1: The Trust Equation .............................................................................. 112
Figure G.1: MGSEM result – invariant model and
variant model of Low/Medium/High Income group ............................................... 119
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Abstract
Purpose: Customer loyalty plays important role in retail banking because of its
high interaction with customers. When the market is increasingly competitive, especially
in the context of economic recession, more and more banks try to find how to retain their
loyal customers and focus on factors enhancing customer loyalty. Therefore, the main
purpose of this research is to investigate the factors that influence customer loyalty.
Design/methodology/approach: In the research a causal modeling approach was
used and a conceptual model was proposed after an extensive review of the literature.
Data was collected from 377 habitual customers of BIDV‟s branches and transaction
offices in Lam Dong Province. Descriptive statistics, reliability test, factor analysis
(including EFA and CFA), correlation testing, structural equation modeling, and OneWay ANOVA testing were applied to analyze and confirm the conceptual model
proposed in this research. Besides, Net-Promoter Score was calculated to provide
valuable insights into the real situation of BIDV‟s customer loyalty in this region.
Findings: The research finds that service quality, customer trust, and corporate
image positively impact on customer loyalty. Furthermore, service quality and customer
satisfaction are regarded as a component because they tend to overlap in the long term.
Practical implications: The research can be used for a reference aim and
reliability suggestions to enhance the customer loyalty of BIDV‟s branches and
transaction offices in Lam Dong Province.
Keywords: customer loyalty, retail banking, service quality
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CHAPTER ONE – INTRODUCTION
The first aim of this research is to investigate customer loyalty towards BIDV’s
branches and transaction offices in Lam Dong Province. This chapter firstly introduces
an overview of the banking industry in Vietnam and BIDV. Then the research problem,
the research question and the research objectives, scope and limitation, the significance
of this study and the structure of this thesis are presented.
1. Background
1.1.
Overview of the banking industry in Vietnam
The banking system is regarded as the “lifeblood” of the economy and plays the
most important role in the financial intermediation system. According to The State Bank
of Vietnam (http://www.sbv.gov.v), economy heavily depends on the banking sector.
The worst performance of the banking industry inevitably leads the economy into a
rapidly weak situation; and vice versa, the banking system is in an easily vulnerable
position because of the economic instability. Furthermore, in the context of the deeper
international integration, the Vietnam banking system should be strengthened and
developed to take new opportunities and faced many difficulties and challenges.
The banking industry in Vietnam is regulated by The State Bank of Vietnam
(SBV), which has the object of ensuring effective administration, supervision, regulation
and controls the banking businesses in Vietnam. Nowadays, competition in this industry
has greatly increased as many new entrants have joined the industry. At the end of 2012,
the banking industry includes 5 state-owned credit institutions, 34 joint-stock commercial
banks, 4 joint-venture banks, 50 branches of foreign banks, 49 representative offices of
1
foreign banks, 5 wholly foreign-owned banks, 18 finance companies and 12 leasing
companies. There is information on the SBV‟s web site (http://www.sbv.gov.vn).
There are four remarkable periods in more two decades of major reform in this
industry. Firstly, from 1990 to 1996, the quantity and sorts of credit institution
dramatically increased, which had the objective of meeting a surge in demand of financial
service. During the second period, 1997 – 2005, the two-level banking system which had
just formed was consolidated and reorganized in the context of the Asian financial crisis.
During the next period, from 2006 to 2010, higher charter capital and tighter regulation
were on the way. Besides, wholly foreign-owned were appeared. Finally, from 2011 till
now, the banking sector has faced many difficulties and challenges in the context of
global economic crisis. The system of credit institutions has exposed the financial
weaknesses and vulnerabilities, especially increased bad debts. In this situation, SBV
took decisive and consistent management measures to ensure liquidity, the stability of the
money, forex and gold markets, to reduce lending rates, and to restructure the banking
sector. There is information on the SBV‟s web site (http://www.sbv.gov.vn).
1.2.
Overview of the banking industry in Lam Dong Province
According to SBV (http://www.sbv.gov.v), the activities of the banking industry
which mainly boost capital mobilization and investment contribute to promoting
sustainable region's economic and social development in The Central Highland in general
and Lam Dong Province in particular.
In a meeting of the Central Highland Steering Committee on July 22th 2013 at
Lam Dong Province, it is reported that capital mobilization reaches VND 66 680 billion
increased of 5.27% compared to those in 2012. However, at the end of June 2013, the
2
total credit balance in the region is VND 112 008 billion increased of 7.2% compared to
those in 2012. Moreover, the banking sector importantly focuses on boosting agricultural
production and investing projects related industrial plants such as rubber, coffee, pepper,
and etc. which are known as one of the main competitive advantages of the Central
Highland. There is information on the SBV‟s web site (http://www.sbv.gov.vn).
In sum, the role of the banking industry in the Central Highland and also Lam
Dong Province is to mobilize financial capital in economics, to contribute to reinforce
competitive advantages of this region, to promote poverty alleviation and to enhance life
standard and to gradually change the rural image of this region.
1.3.
BIDV’s general Information and the network in Lam Dong Province
1.3.1. General Information of BIDV
BIDV (formerly named the Bank for Construction of Vietnam) is a state-owned
commercial bank established on 26 April 1957. On 24 June 1981, this bank was renamed
as the Bank for Investment and Construction of Vietnam, and was renamed again as the
Bank for Investment and Development of Vietnam on 14 November 1990. Following the
policy of restructuring state-owned enterprises, BIDV was subsequently restructured into
a state-owned corporation effective from 21 September 1996. BIDV is now a joint-stock
commercial bank which officially started its operations since 01 May 2012. There is
information on the BIDV‟s web site (http://bidv.com.vn).
The Head Office of the Bank is located in BIDV Tower, 35 Hang Voi Street,
Hoan Kiem District, Hanoi, Vietnam. BIDV has developed a wide network, covering 63
provinces and cities nationwide, including 117 branches and 432 transaction offices,
3
which is one of the top three commercial banks with the most extensive network in
Vietnam. There is information on the BIDV‟s web site (http://bidv.com.vn).
In spite of difficulties in the business environment, BIDV has still ensured its
growth in terms of scale and total operating incomes increased. According to the BIDV‟s
annual report, as at 31 December 2012, BIDV‟s total assets reached VND 484.785 billion
increased of 19.5% compared to those in 2012. Moreover, this bank has focused on safe
operation by making sufficient provision for credit losses, strengthening financial
capacity, and operating expenses as well as complying with SBV prudent regulation.
In order to become a leading and modern retail bank, BIDV‟s numerous retail
banking activities were undertaken on the basis of newly-enhanced retail banking
management techniques and the adoption of a customer-focused retail banking model at
every branch, expanding and improving the quality of traditional and modern distribution
channels, and upgrading the IT infrastructure and platform. As the result, by the end of
2012, retail funding reached VND 179,128 billion marking an impressive year over year
increase of 38.64% and accounted for 49.76% of total fund mobilization compared to
45% in 2011.There is information on the BIDV‟s web site (http://bidv.com.vn).
1.3.2. BIDV’s network in Lam Dong Province
Branch/ Transaction Office
Lam Dong Branch
- Chi Lang Transaction office
- Da Lat Transaction office
- Don Duong Transaction office
- Duc Trong Transaction office
Bao Loc Branch
- Bao Lam Transaction office
- Di Linh Transaction office
Address
30 Tran Phu, Da Lat City
- 26 Chi Lang Street, Ward 9, Da Lat City
- 42, Hoa Binh Street, Ward 9, Da Lat City
- 281, 2/4 Street, Thanh My Town, Don Duong District
- 25, Tran Hung Dao Street, Duc Trong District
52 Le Thi Pha Street, Bao Loc City
- Loc Thang Town, Bao Loc City
- 619, Hung Vuong Street, Di Linh District
Table 1.1: BIDV‟s network in Lam Dong Province (Source: http://bidv.com.vn)
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2. Research Problem
In the previous researches, it is strongly clear that loyalty in the services sector is
more difficult to conceptualize than in the product sector due to the characteristics of
services (Lee & Cunningham, 2001; Mittal & Lassar, 1998). For instance, intangibility
and lack of standardization might influence reliability and confidence which play major
roles in building or maintaining loyalty (Bloemer et al., 1998; Dick & Basu, 1994).
However, theoretical and empirical researches have continued to investigate service
loyalty, because customer loyalty is considered the backbone of service organizations
(Gremler & Brown, 1996; Ruyter et al., 1997). More specifically, customer loyalty plays
very crucial role in helping lower marketing costs, solicit more customers, and effectively
operates trading leverage (Aaker, 1992), and is also a key factor in winning market share
and developing sustainable competitive advantages (Jones et al., 2007; Lee et al., 2011;
Lin & Wang, 2006;).
In financial services, nowadays, the traditional product-oriented bank is becoming
increasingly customer-oriented, which concentrates on customer loyalty as its main goal.
In fact, the banking industry specific issues and characteristics affect consumer behavior
and attitude, which play very important roles in the formation of bank loyalty (Javalgi &
Moberg, 1997; Lewis & Soureli, 2006). Moreover, in the retail banking which have high
interaction with customers, there are very slight differences in financial services and
products between retail banks. It is shown that customer loyalty has obvious importance
to all retail banks in the highly competitive market (Beerli et al., 2004). Besides, during
the period of the global economic crisis and recession, customers who have become
increasingly sophisticated and knowledgeable can be expected to become even less loyal
5
with a tendency to open their new accounts in many banks (Jones et al., 2007). Therefore,
managers always try to find how to retain their current customers and concentrate on
factors which enhances customer loyalty.
There are not many researches on customer loyalty of BIDV in the list of
Research Topics on the web site of BIDV Training School (http://bts.bidv.com.vn/).
Although some topics seem to be relevant to bank loyalty, they have just embarked on
building loyalty programs, for example, “The Points Rewards Program for customers
who have saving accounts at BIDV named Earn Points, Get Rewards”, “The Promotion
Program for customer use products and services at BIDV named Loyal Customer". There
is information on the BIDV Training School‟s website (http://bts.bidv.com.vn/).
Furthermore, by observation and mystery shopper as well, BIDV‟s branches and
transaction offices in Lam Dong Province have not conducted any survey of customer
satisfaction and customer loyalty.
Additionally, the environment of the bank industry in Lam Dong Province is
increasingly competitive. According to information from The State Bank – Lam Dong
Branch, before 2000, there were just few branches and transaction offices of state-owned
banks, such as: Vietinbank, Agribank and BIDV. However, from 2000 to now, the
banking industry has undergone drastic changes in the quantity of credit institutions
system. Many branches and transactions of other banks were established and have
developed, including Asia Commercial Bank (ACB), DongA Bank (EAB), Vietnam
International Bank (VIB), Eximbank, Techcombank, Sacombank, and etc.
In sum, a significant gap exists in BIDV‟s branches and transaction offices in
Lam Dong Province which should be investigated in order to propose highly effective
6
solutions and wise strategies what leads customers to become loyal toward this bank.
Therefore, the subject of customer loyalty of BIDV‟s branches and transaction offices in
Lam Dong Province has to be received much-needed attention. If customer loyalty and
factors enhancing customer loyalty are investigated, BIDV‟s customer loyalty in this
region can be improved and enhanced.
3. Research Question
For these above-mentioned reasons, the research seeks to answer the following
question: What factors that influence the customer loyalty in BIDV’s branches and
transaction offices in Lam Dong province?
4. Research Objective
Here are two main objectives of this research.
To define the factors that influence customer loyalty of BIDV‟s branches and
transaction offices in Lam Dong Province;
To propose recommendations to enhance customer loyalty of BIDV‟s branches
and transaction offices in Lam Dong Province
5. Scope And Limitation
This research was conducted from March 2013 to August 2013, in Lam Dong
Province and Ho Chi Minh City. There are three kinds of customers in BIDV including
individual customers, corporate customers and financial institution. This research focuses
on determining the loyalty of individual customers in retail banking of eight branches and
transaction offices of BIDV in Lam Dong Province.
The in-depth interviews with experienced managers of BIDV‟s branches and
transaction offices in Lam Dong Provinces who understand their own customers more
7
than anyone can not be conducted because of the time limitation. Therefore, the
recommendations of this research cannot be proposed specifically for each banking
business of branches and transaction office of BIDV in Lam Dong Province.
6. Significance Of The Study
It is expected to find out which factors improve customer loyalty in retail banking.
By determining these factors, the research can be used for a reference aim and reliability
suggestions in order to enhance the customer loyalty of BIDV‟s branches and transaction
offices in Lam Dong Province.
7. Structure Of Thesis
This research is structured and organized in five chapters as follows:
Chapter 1 – Introduction: Introducing the thesis topic and a brief background
about it, and then following by problem statement, research question, research objectives,
scope and limitations, the significance of the research, and finally structure of the thesis.
Chapter 2 – Literature Review: Presenting the related literature concerning
customer loyalty and customer loyalty in retail banking.
Chapter 3 – Research Methodology: Providing detail instrument of research
model, research process, measurements and questionnaire design, data collection method
and data analysis method.
Chapter 4 – Discussions and Findings: Analyze collected data and interpret into
the findings of the research
Chapter 5 – Conclusion and Recommendations: Draw out conclusion and
propose recommendations to enhance customer loyalty of BIDV‟s branches and
transaction offices in Lam Dong Province.
8
CHAPTER TWO – LITERATURE REVIEW
The purpose of this chapter is to list some literatures relevant to this research.
The chapter begins with the definition and the importance of customer loyalty, and then
follows by the net-promoter score which is popularly used to calculate customer loyalty
in companies. Next, the most important and popular factors which influence customer
loyalty are presented. These factors are customer satisfaction, service quality, corporate
image, customer trust and switching cost.
1. Customer Loyalty
1.1.
Definition
The concept of customer loyalty has been received much consideration and
attention from both academics and practitioners in many industries. Although there are so
many different definitions about customer loyalty, there seem to be two basic approaches.
One is the behavioral approach and another is the attitudinal approach.
Firstly, in the behavioral approach, Oliver (1999) defined customer loyalty as: “…
to re-buy product or service consistently in the future, thereby causing repetitive same
brand or same brand-set purchasing, despite situational influences and marketing efforts
having the potential to cause switching behavior.” In order words, customers who repeat
purchase behavior such as amount of purchases, frequency of purchase and amount of
brand switching have been regarded as loyal (Mercier, 2000; Zins, 2001).
In contrast, the attitudinal approach incorporates consumer attitudes, preferences
and disposition towards brands which allows greater insight into loyal behavior (Javalgi
& Moberg, 1997). In addition, Reichheld (2003) defined customer loyalty as: “… to
make an investment or personal sacrifice in order to strengthen a relationship with a
9
supplier who treats him well and gives him good value in the long term even if the
supplier does not offer the best price in a particular transaction. Consequently, customer
loyalty is about much more than to repeat purchases.” He also explained that a customer
making frequent repeat purchases might not be loyal, and emphasized that a loyal
customer might not buy again and again because of a decrease in his or her need for a
product or service.
Other researchers suggested that loyalty is formed both by the customer‟s attitude
and behavioral intentions (Pedersen & Nysveen, 2001) and so it should be measured as a
combination of attitudinal and behavioral dimensions (Dick & Basu, 1994).
In sum, customer loyalty in this research is defined both the customer’s behavior
which is to make frequent repeat purchases consistent in the future and customer’s
attitude which is to make an investment or personal sacrifice in order to remain a longterm relationship with a company.
1.2.
Importance of Customer Loyalty
When markets become increasingly competitive, more and more companies
recognize the importance of retaining current customers and are increasingly concerned
to develop and maintain customer loyalty (McMullan & Gilmore, 2008). It is clear that it
is always costly to attract new customers. Indeed, it takes five times as much effort, time
and money to attract a new customer than to keep an existing customer (Kotler et al.,
1996). Specifically, customer loyalty enables companies to reduce operational and
marketing costs (Griffin, 1995) to guarantee income, to increase market share (Meidan,
1996); to maximize the level of profitability (Rauyruen & Miller, 2007) and can boost
employees‟ morale and productivity (Lee & Cunningham, 2001). Besides, customer
10
loyalty can lead to price indifference, favorable word-of-mouth communication,
endorsements and customer referrals, and resistance to competition (Barnes & Howlett,
1998). In sum, other factors besides customer loyalty play roles in driving a company‟s
growth–economics; however, customer loyalty is clearly one of the most important
drivers of growth (Reichheld, 2003).
1.3.
Customer Loyalty Index
Among of ways measuring customer loyalty, using Net-Promoter Score (NPS) is
very effective for a company to produce a clear measure of an organization's performance
through its customers' eyes.
Net Promoter Score (NPS) is a customer loyalty metric introduced by Reichheld,
(2003). NPS provides valuable insights into how to get more promoters and fewer
detractors and a clear measure of an organization‟s performance through its customers‟
eyes. According to Bain & Company, NPS has been adopted by several companies,
including E.ON, Philips, GE, Apple Retail, American Express, Amazon, Rackspace, TD
Bank, Harley-Davidson, Charles Schwab, Zappos, Costco, Vanguard, and Dell.
This below equation is how we calculate a Net Promoter Score for a company.
Figure 2.1: Net Promoter Score Equation (Source: http://www.netpromotersystem.com)
11
Firstly, asking customers “How likely is it that you would recommend our
company to a friend or colleague?” is to count up the ratio of promoters to detractors. The
answer is settled on a scale which 10 means “extremely likely” to recommend, 5 means
neutral, and 0 means “not at all likely”. Based on the responses on a 0 to 10 rating scale,
the company‟s customers can be divided into three categories including “promoters” (910 rating–extremely likely to recommend), “passively satisfied” (7-8 rating), and
“detractors” (0-6 rating–extremely unlikely to recommend). More specifically,
“promoters” are loyal enthusiasts who keep buying from a company and urge their
friends to do the same, “passives” are satisfied but unenthusiastic customers who can be
easily wooed by the competition, and “detractors” are unhappy customers trapped in a
bad relationship. Then NPS is calculated by subtracting the percentage of detractors from
the percentage of promoters (Reichheld, 2003).
According to Bain & Company, a company that gains world-class loyalty receives
NPS of 75% to more than 80% and an average firm has an NPS efficiency of only 5
percent to 10 percent; while a firm has a negative NPS meaning that they are creating
more detractors than promoters.
2. Factors influence Customer Loyalty
Customer loyalty in service may be affected by many different variables which
vary among services, according to the specific characteristics of each service industry
(Harrison, 2000; Lewis & Soureli, 2006). In the retail banking industry, the most
important and popular variables are customer satisfaction, service quality, corporate
image, customer trust and switching costs (Athanassopoulos, 1997; Beerli. et al., 2004;
Blanchard & Galloway, 1994; Lewis & Soureli, 2006; Newman & Cowling, 1996).
12
2.1.
Customer Satisfaction
Customer satisfaction has been receiving more attention in researches. Oliver
(1997) defined customer satisfaction as “consumers‟ post-purchase evaluation and
affective response to the overall product or service experience”. Jamal and Naser (2002)
described customer satisfaction as the full meeting of customer expectation towards
service or a product after using. Egan (2004) put the definitions of several authors
together and stated that customer satisfaction as a psychological process of evaluating
perceived performance outcomes based on predetermined expectations.
Many studies have found that higher levels of customer satisfaction could lead to
greater customer loyalty (Anderson & Sullivan, 1993; Beerli et al, 2004; Bolton & Drew,
1991; Boulding et al., 1993; Fornell, 1992; Levesque, & McDougall, 1996; Lewis &
Soureli, 2006). It is strongly clear customer satisfaction, in the highly competitive market,
is regarded as the substance of organizational success, because customer satisfaction can
lead to customer retention and then to profitability for the organization (Jamal & Naser,
2002). Therefore, enhancing customer satisfaction should be a key driver for firms in
building and improving customer loyalty.
2.2.
Service Quality
2.2.1. Concept
Service quality is a concept that has aroused considerable interest and debate in
researches because of the difficulties in both defining it and measuring it (Wisniewski,
2001). Service quality is commonly defined as the difference between customer
expectations of service and perceived service (Asubonteng et al., 1996; Lewis &
Mitchell, 1990; Wisniewski & Donnelly, 1996). If expectations are greater than
13
performance, perceived quality is less than satisfactory and hence customer
dissatisfaction occurs (Lewis & Mitchell, 1990; Parasuraman et al., 1985).
2.2.2. Impact of service quality on customer loyalty
The previous studies on customer loyalty have acknowledged that service quality
has both direct and indirect effects on customer loyalty (Olsen, 2002). These researches
have also indicated that service quality influences organizational performance, including
increasing sales profit, remaining competitive advantage, improving current customer
relations, attracting new potential customers, winning market share, enhancing corporate
image and finally promoting customer loyalty (Caruana, 2002; Duncan & Elliot, 2002,
Ehigie, 2006; Fisher, 2001; Kish, 2000; Levesque & Mc. Dougal, 1996; Newman, 2001;
Szymigin & Carrigan, 2001). To sum up, the success of a service provider depends on its
high service quality which has a positive effect on customer loyalty (Panda, 2003).
2.2.3. Service Quality Measurement
The measurement service quality allows for comparison before and after changes
and the establishment of clear standards for service quality. Edvardsen et al. (1994) stated
that the starting point in developing service quality is to analyze and measure it. The
model of service quality developed by Parasuraman et al. (1985) is the most popular
model for measuring service quality. There are 5 major gaps in the service quality model;
however, this research focuses on investigating the Gap5 between customer expectations
and their perceptions of the service quality, which is as a result of the influences exerted
from the customer side and the shortfalls on the part of the service provider.
Parasuraman et al (1985) initially identified ten key determinants of service
quality,
including
Reliability,
Responsiveness,
14
Competence,
Access,
Courtesy,
Communication, Credibility, Security, Understanding, Tangibles. However, Parasuraman
et al (1988) mentioned that SERVQUAL with five dimensions can better help in
assessing the expectations of customers and service quality perceptions. It focuses on the
core value which managers need to take attention and action in order to improve service
quality. The following figure is the determinants of service quality with five dimensions.
Determinants of
service quality
1. Tangibles
2. Reliability
3. Responsiveness
4. Assurance
5. Empathy
Word of Mouth
Communication
Personal Needs
Past Experience
Expected Service
GAP 5
Perceived
Service Quality
Perceived Service
Figure 2.2: Determinants of Perceived Service Quality
2.2.4. Service Quality Measurement in the banking industry
Although most of the studies of the banking industry have measured service
quality by applying the SERVQUAL model (Athanassopoulos, 1997; Blanchard &
Galloway, 1994; Marshall & Smith, 1999; Newman & Cowling, 1996), a number of
researchers have developed and validated new scales for this industry. Among of these
researches, SYSTRA-SQ is one of new well-known measures of bank service quality,
especially for the retail banking, which was developed by Aldaigan & Buttle (2002). The
patrimony, reliability and validity of the scale in their research demonstrated that
SYSTRA-SQ is a measure of high utility for the retail banking.
SYSTRA-SQ measurement consists of four dimensions, including service system
quality (containing the functional quality attributes and the technical organizational
attributes), behavioral service quality, service transactional accuracy and machine service
15
quality. These items were categorized against the technical and functional service quality
schema proposed by Grönroos (1978, 1982, 1990, 1994, 1997, 1999, 2000, and 2006).
2.3.
Corporate Image
Corporate image is described as the overall impression on the mind of the public
about a firm (Barich & Kotler, 1991). According to MacInnis and Price (1987), corporate
image is the result of an evaluation process, which stems from ideas, feelings and
consumption experiences with an organization retrieved from memory and transformed
into mental images (Yuille & Catchpole, 1977).
In the researches, corporate image is demonstrated to positively affect customer
loyalty (Johnson et al., 2001; Juhl et al., 2002; Kristensen et al., 2000; Lewis & Soureli,
2006; Nguyen & LeBlanc, 2001). Although a customer does not have enough information
about a firm, information obtained from different sources such as advertisements and
word of mouth not only retains loyal customers but also attracts new customers (Bloemer
et al, 1998; Lewis & Soureli, 2006; Nguyen & LeBlanc, 1998). Therefore, corporate
image is considered as an antecedent of customer loyalty.
2.4.
Customer Trust
The trust appears when a party believes that the other party‟s actions would result
in positive outcomes for itself, and therefore to develop some form of positive behavioral
intention towards the other party (Anderson & Narus, 1990; Aydin & Ozer, 2005).
Accordingly, when customers trust a company, they are to form a positive buying
intention towards the company (Lau & Lee, 1999). Moreover, to trust a company,
customers should not only perceive positive outcomes but also believe that these positive
outcomes will continue in the future (Aydin & Ozer, 2005).
16
It is claimed that there is a positive relationship between customer trust and
customer loyalty in previous research (Chaudhuri & Holbrook, 2001; Gundlach &
Murphy, 1993; Lau & Lee, 1999). Trust reflects the credibility (Ganesan, 1994), which
affects the long-term orientation of a customer by reducing the customer‟s perception of
risk (Erdem et al., 2002; Ganesan, 1994). Specifically, trust reduces uncertainty in an
environment in which consumers feel vulnerable and unsafe, as they know that they can
rely on the trusted brand (Chaudhuri & Holbrook, 2001). Therefore, customer trust has
been recognized as an important role in enhancing customer loyalty.
2.5.
Switching Costs
Switching costs are defined as one-time costs facing the buyer when switching
from one company to another company (Porter, 1998). Besides objectively measurable
monetary costs, switching costs may also consist of the time, relationship and
psychological effort when customers decide to become loyal customers of a new service
provider (Bloemer et al., 1998; Klemperer, 1987).
The benefit of switching cost is to prevent consumers from switching service
providers (Ganesh et al., 2000; Keaveney & Parthasarathy, 2001). This is why switching
costs can be regarded as barriers that deter customers from demanding a rival firm‟s
brand (Aydin & Ozer, 2005). In the context of a market having switching costs,
customers select a service provider from a number of functionally identical brands, and
then they continue buying the same brand even competing brands become cheaper. In
other words, the customer behaves loyally toward the service provider (Klemperer,
1987). For these reasons, switching costs are a factor that directly influences customer
loyalty (Bloemer et al., 1998; Burnham et al., 2003; Jones et al., 2002; Lee et al., 2001).
17
CHAPTER THREE – RESEARCH METHODOLOGY
This chapter presents the methodological detail instrument used in conducting
this research and provides a justification for steps taken. The chapter begins with the
research model & hypotheses, the research process, and then follows by measurements
and questionnaire design. Finally, data collection method (including sample, sample size
and sampling), and data analysis method is presented.
1. Research Model & Hypotheses
After reviewing above-mentioned literature, a casual model is proposed in which
the dependent variable is Customer Loyalty and independent variables regarded as the
antecedents of loyalty are Customer Satisfaction, Corporate Image, Customer Trust and
Switching Costs. Further, the indirect effect of Service Quality on Customer Loyalty via
Customer Satisfaction is supported.
H5.1
Service Quality
Customer Satisfaction
H1
H5.2
Corporate Image
Customer Trust
Switching Costs
H2
Customer
Loyalty
H3
H4
Figure 3.1: Research model
The research hypotheses of the research model are as below.
Effect of Customer Satisfaction on Customer Loyalty: In the researches of
customer loyalty in retail banking, Beerli et al. (2004) strongly affirmed that the
relationship between satisfaction and loyalty is positive and statistically significant,
which satisfaction has a greater weightier on loyalty than switching costs. This strong
18
relationship is demonstrated again in the research of Lewis & Soureli (2006).
Furthermore, a substantial amount of research concludes that satisfaction is an important
determinant of customer loyalty (Asuncion et al., 2004; Bearden & Teel, 1983; Cronin &
Taylor, 1992; Dick & Basu, 1994; Drake et al., 1998; Moutinho & Smith, 2000; Nguyen
& LeBlanc, 1998; Oliver, 1997).
H1: There is a positive impact of Customer Satisfaction on Customer Loyalty.
Effect of Corporate Image on Customer Loyalty: It is clear that the image of a
bank can play a very important role in retaining loyal customers and attracting new
customers as well (Bloemer et al., 1998; Nguyen & LeBlanc, 1998). The positive and
statistically significant relationship between corporate image and customer loyalty is
confirmed in the studies (Johnson et al., 2001; Juhl et al., 2002; Kristensen et al., 2000;
Lewis & Soureli, 2006; Nguyen & LeBlanc, 2001). Hence, if the image of a bank is
better, its impact on customer loyalty is greater.
H2: There is a positive impact of Corporate Image on Customer Loyalty.
Effect of Customer Trust on Customer Loyalty: Because of the emotional nature
of customer loyalty, customer trust in the service provider‟s reliability and integrity is
extremely important (Bejou et al., 1998; Pedersen & Nysveen, 2001). In the research of
Lewis & Soureli (2006), it is strongly evidence that customer loyalty is affected by
customer trust. This relationship is also proved in other researches (Ballester & Aleman,
2001; Chaudhuri & Holbrook, 2001; Gundlach & Murphy, 1993; Lau & Lee, 1999).
Therefore, the greater customer trust is, the greater customer loyalty is.
H3: There is a positive impact of Customer Trust on Customer Loyalty.
19
Effect of Switching Costs on Customer Loyalty: Switching costs include monetary
costs, time, relationship and the psychological effort generated from the uncertainty of
building a working relationship with a new service provider (Ruyter et al., 1998). In retail
banking, the positive and significant relationship between switching costs and customer
loyalty is demonstrated in the research of Beerli et al. (2004). Moreover, other researches
also insist that switching costs can be significantly influential in determining customer
loyalty (Andreassen & Lindestad, 1998; Aydin & Ozer, 2005; Bloemer et al., 1998;
Burnham et al., 2003; Dawes & Swailes, 1999; Harrison, 2000; Jones et al., 2002; Lee &
Cunningham, 2001; Jones et al., 2002). Hence, customer loyalty is greater if switching
costs are greater.
H4: There is a positive impact between Switching Costs on Customer Loyalty.
Effects of Service Quality on Customer Satisfaction: There are researches
reporting a causal link between service quality and customer satisfaction (Anderson &
Sullivan, 1993; Bolton & Drew, 1991; Cronin & Taylor, 1992). In retail banking, it is
strongly proved that there is a relationship between customer satisfaction and customer
loyalty (Berlin et al., 2004; Lewis & Soureli, 2006). While customer satisfaction is an
antecedent of service quality in the research of Beerli et al. (2004), service quality is an
antecedent of customer satisfaction in the research of Lewis & Soureli (2006). Here are
set of hypotheses for this relationship.
H5.1: Service Quality has a positive impact on Customer Satisfaction.
H5.2: Customer Satisfaction has a positive impact on Service Quality.
H5.3: There exists a bidirectional relationship between Service Quality and
Customer Satisfaction.
20
2. Research Process
Literature review &
Research model
First draft of
Questionnaire
First pilot test
Questionnaire
adjustment
Second pilot test
Final format of
Questionnaire
Data collection
- Sample: BIDV’s customers in Lam Dong Province
- Sample size: 377
- Sampling: Cluster
-
Data Analysis
Reliability Test
EFA, CFA
Correlation testing
SEM
MGSEM,
One-Way ANOVA
Objective 1:
Objective 2:
To define the
factors that
influence
customer loyalty
To propose
recommendations
to enhance
customer loyalty
Figure 3.2: Research process
In this phase of research, it is divided into four main steps:
- Step1: Review related literature to create the research model and design questionnaire
- Step2: Conduct two pilot tests which both qualitative and quantitative methods are
used to confirm the model and to refine questionnaire
- Step3: Conduct a survey and analyze data
- Step4: Draw out conclusion and propose recommendations
3. Measurement Design
Measurements were based on the literature review of previous researches and
semi-structured interviews with some bank employees and customers in the pilot tests.
21
3.1.
Customer Loyalty Measurement
Measurement
Description
Customers recommend a
Word of mouth bank to their friends,
colleague or family.
Customers continue using
Re-buying
the product / service in the
product/service
future
Customers would not
Priority
hesitate to choose a bank
when they have new need.
Customers are consistent
Consistency
with a bank even though a
better bank is offered.
Author/Source
Reichheld (2003), Aydin & Ozer
(2005), Lewis & Soureli (2006), Afsar
et al. (2010)
Reichheld (2003), Aydin & Ozer
(2005), Lewis & Soureli (2006), Afsar
et al. (2010),
Aydin & Ozer (2005), Lewis &
Soureli (2006), Jamal & Anastasiadou
(2009), Afsar et al. (2010)
Aydin & Ozer (2004), Lewis &
Soureli (2006), Jamal & Anastasiadou
(2009), Afsar et al. (2010)
Table 3.1: Customer Loyalty Measurement
3.2.
Customer Satisfaction Measurement
Measurement
Overall
satisfaction
Fulfilled
demand
Comparison
Ideal bank
Description
Author/Source
Moutinho & Smith, (2000), Beerli et al.
(2004), Jamal & Anastasiadou (2009),
Afsar et al. (2010)
Beerli et al. (2004), Lewis & Soureli
(2006), Jamal & Anastasiadou (2009),
Afsar et al. (2010)
Customer are generally
satisfied with a bank
A bank fulfills the
customer‟s demand
A bank gains more
satisfaction than others
from customers
It is an ideal bunk in the
customer‟s mind
Beerli et al. (2004), Lewis & Soureli
(2006), Jamal & Anastasiadou (2009)
Lewis & Soureli (2006), Jamal &
Anastasiadou (2009),
Table 3.2: Customer Satisfaction Measurement
3.3.
Service Quality Measurement
Firstly, SERVQUAL Measurement, a well-known scale created by Parasuraman
et al. (1988) is applied. In retail banking, most of empirical studies have measured service
quality by adapting the SERVQUAL model (Blanchard & Galloway, 1994; Marshall &
Smith, 1992). However, the result of reliability test in the first pilot test is rather bad.
22
For this reason, SYSTRA-SQ Measurement, which is a new measurement of bank
service quality in retail banking developed by Aldaigan & Buttle (2002), was applied
with the result that the value of Cronbach‟s Alpha is good in the final pilot test.
SERVQUAL Measurement
Measurement
Reliability
Responsiveness
Assurance
Empathy
Tangible
Description
Ability to perform the promised service dependably
and accurately
Willingness to help customers and provide prompt
service
Knowledge and courtesy of employees and their
ability to inspire trust and confidence.
Caring, individualized attention the firm provides its
customers
Physical facilities, appearance of personnel and
equipment
Author/Source
Parasuraman
et al. (1988)
Table 3.3: Service Quality Measurement – SERVQUAL Measurement
SYSTRA-SQ Measurement
Measurement
Description
This factor focuses on machines and equipment
Machine service quality. It relates to their reliability and performance
quality
in terms of satisfactory output when used by
customers.
Service system
The functional quality attributes include listening to
quality
customers, ease of availability and accessibility,
(functional
speed of response and organizational appearance.
performance)
Service system The technical organizational attributes include quality
quality
of advice, flexibility and customized service
(technical
solutions, promise fulfillment, employee
performance)
empowerment and customer updating on service.
It is composed of behavioral attributes such as
Behavioral
politeness, courtesy, friendliness and helpfulness of
service quality the employee. It also contains the employee‟s service
attitude
Service
It is derived from the customer‟s experience of the
transaction
frequency of errors in transactions and employees‟
accuracy
mistakes when performing service for customers.
Author/Source
Aldaigan &
Buttle (2002)
Table 3.4: Service Quality Measurement – SYSTRA-SQ Measurement
23
3.4.
Corporate Image Measurement
Measurement
Sustainability
Description
A bank is stable and firmly
established
Innovation
A bank is innovative and forwardlooking.
Business ethic
A bank does business in an ethical
way
Market leader
A bank is a leading bank in the
banking industry.
Author/Source
Aydin & Ozer (2005), Lewis &
Soureli (2006), Souiden et al.
(2006)
Aydin & Ozer (2005), Lewis &
Soureli (2006), Souiden et al.
(2006)
Lewis & Soureli (2006), Souiden et
al. (2006)
Aydin & Ozer (2005), Lewis &
Soureli (2006), Souiden et al.
(2006)
Table 3.5: Corporate Image Measurement
3.5.
Customer Trust Measurement
Measurement
Description
Credibility
Customers believe the information
from a bank
How customers perceive the
consistency of the bank‟s actions,
and these actions connection with
its words
How secure or safe the customers
feel sharing with a bank.
A bank acts to the best interest of
customers
Reliability
Intimacy
Self-interest
Author/Source
Aydin & Ozer (2005), Pedersen &
Nysveen (2001), Lewis & Soureli
(2006),
Aydin & Ozer (2005), Pedersen &
Nysveen (2001), Lewis & Soureli
(2006)
Pedersen & Nysveen (2001),
Aydin & Ozer (2005)
Pedersen & Nysveen (2001),
Aydin & Ozer (2005)
Table 3.6: Customer Trust Measurement
3.6.
Switching costs Measurement
Measurement
Selection
Time
Money
Relationship
Description
Customers are undecided about
which bank to choose
It is time-consuming to do business
with a new bank
It is costly to do business with a
new bank
Customer bother to establish a new
working relationship
Author/Source
Lewis & Soureli (2006), Beerli et
al. (2004)
Aydin & Ozer (2005), Lewis &
Soureli (2006)
Aydin & Ozer (2005), Lewis &
Soureli (2006)
Aydin & Ozer (2005), Lewis &
Soureli (2006)
Table 3.7: Switching costs Measurement
24
4. Questionnaire Design
The questionnaire is designed to match with the objectives of the study and
conceptual framework.
4.1.
First draft of Questionnaire
The first draft of the questionnaire includes two parts, which one is customer‟s
evaluation on loyal and the antecedents of loyal and another is customer‟s information.
In the first part, there are six components including Customer Loyalty (with 4
statements), Service Quality (with 5 statements based on SERVQUAL Measurement),
Customer Satisfaction (with 4 statements), Corporate Image (with 4 statements) and
Customer Trust (with 4 statements), Switching costs (with 4 statements). Ten-point
Likert-scale, ranged from 0 (extremely likely to disagree/Not at all likely to disagree) to
10 (extremely likely to agree) is used. In sum, there are total 25 statements in this part,
which describe the customer‟s experience on the constructs of the research model.
In the second part, customer‟s information is asked including age, gender,
education level, job situation, and income. Besides, the information between customers
and BIDV is also exploited with the contents of the length of working relationship,
transaction channel and products/services which customers usually use.
4.2.
Pilot Test
In order to perfect the questionnaire for a survey, both qualitative and quantitative
methods are used for a pilot test.
Firstly, semi-structured interviews were conducted to six employees and
customers at the Lam Dong Branch in May 2013. The objectives of this step are to
confirm interviewees‟ understanding definitions in the questionnaire and to select the
25
appropriate items of Service Quality based on SERVQUAL measurement on the list.
Finally, some words were changed to make definitions intelligible and illuminating.
Secondly, a customer survey was conducted to check the reliability of
measurements. Data is obtained from 39 customers who use BIDV‟s service/product
many times per year and all their relationships with this bank are over 6 months. This
survey is conducted at the Lam Dong Branch in May 2013. Then, the data was checked
by using Cronbach‟s Alpha value if a scale is reliable or not. Because the sample is small,
EFA (Exploratory factor analysis) cannot be used at that time. The result of the
preliminary study is as the below table.
Variable
Customer Loyalty
Customer Satisfaction
Service Quality
Corporate Image
Customer Trust
Switching Costs
Cronbach’s Alpha
.830
.731
.702
.811
.839
.945
N of Item
4
4
5
4
4
4
Table 3.8: First pilot test‟s result – Cronbach‟s Alpha
According to Table 3.8, the value of Cronbach‟s Alpha of Service Quality is
0.702, which seems to be not good. This is why SYSTRA-SQ, a new measure of bank
service quality in retail banking developed by Aldaigan & Buttle (2002) were chosen to
replace SERVQUAL measurement. For the new measurement, it was examined again
through qualitative and quantitative methods like the first pilot test. Besides, the
Cronbach‟s Alpha of Switching Costs is nearly 0.95, which should be readjusted.
To select appropriate items of Service Quality based on SYSTRA-SQ
measurement on the list, in the qualitative method of the second pilot test, semistructured interviews were conducted to eight employees and customers at the BIDV‟s
branch at Lam Dong Branch. Beside, this step is also to confirm how customers
26
understand the definitions in the questionnaire. Finally, some words were changed to
make the definitions more intelligible than that in the first pilot test; and some items were
replaced and some new items were added to refine measurements.
Finally, the questionnaire adjusted from semi-structure interviews‟ result is used
for the next step of the second pilot test. The purpose of this survey is to check the
reliability of measurements and to establish the final format of questionnaire for the fullscale study. In this quantitative method, data are obtained from 42 habitual customers
whose length of working relationship with BIDV‟s branch or transaction office is over 6
months. This survey is conducted at the Lam Dong Branch. Then, reliability test was
used to exam the reliability of measurements and the result of the preliminary study is as
the below table.
Variable
Customer Loyalty
Customer Satisfaction
Service Quality
Corporate Image
Customer Trust
Switching costs
Cronbach’s Alpha
.835
.832
.843
.882
.866
.914
N of Item
4
4
5
4
4
4
Table 3.9: Second pilot test‟s result – Cronbach‟s Alpha
Table 3.9 shows that the reliability statistics of all measurement factors in the
pilot test. It shows that the minimum value of Cronbach‟s Alpha is 0.832 (of Customer
Satisfaction), and the maximum value is 0.914 (of Switching costs). All these Cronbach‟s
Alpha values are higher than 0.8 which makes this research more reliable for conducting
the full-scale study. Besides, there is no value of Corrected Item-Total Correlation which
is lower than 0.3. The detailed reliability test‟s result of the second pilot test is displayed
in Appendix B. Therefore, all the measurement‟s items of constructs are kept in the
formal questionnaire.
27
4.3.
Final format of Questionnaire
Based on the result of two pilot tests, the first draft of the questionnaire was
redesigned and refined to make all words in statements more intelligible and all items of
measurements appropriate for conducting a full-scale study. The final format of the
questionnaire has the same structure like the first draft of questionnaire covering
customer‟s evaluation on loyal and the antecedents of loyal and customer‟s information.
In the first part, there are 25 statements with 10 points Likert-scale which 0 means
“Not at all likely to disagree” to recommend, 5 means “neutral”, and 10 means
“extremely likely to agree” displayed in the below table.
IMAGE
CORPORATE
SERVICE
QUALITY
CUSTOMER
SATISFACTION
CUSTOMER
LOYLATY
Variable
Measurement
Word of mouth
Re-buying
product/service
Code
CLO1
Priority
CLO3
Consistency
CLO4
Overall satisfaction
CSA1
Fulfilled demand
CSA2
Comparison
Ideal bank
Machine service
quality
Functional
performance
Technical
performance
Behavioral service
quality
Service transaction
accuracy
Sustainability
Innovation
Business ethic
Market leader
CSA3
CSA4
CLO2
SQA1
Statement
I would recommend BIDV to friends/family/others.
I intend to do more business with BIDV in the next
years.
I consider BIDV as my first choice for future
purchases.
Even a better bank is recommended, my preference
for this bank would not change.
In general, I am satisfied with BIDV based on my
experiences.
From my experiences, BIDV does really meet my
needs.
I am satisfied with BIDV more than other banks.
BIDV is close to expectations of my ideal bank.
BIDV has modern and convenient facilities and
equipment.
SQA2
BIDV has quick and simple application procedures.
SQA3
BIDV has flexible and customized service solution.
SQA4
BIDV‟s employees are polite, helpful, and friendly.
SQA5
CIM1
CIM2
CIM4
CIM5
There is no error in transactions and employee‟s
mistakes when I conduct banking business at BIDV.
BIDV is a stable and firmly established bank.
BIDV is an innovative and forward-looking.
BIDV bank does business in an ethical way
BIDV is a leading bank in the banking industry.
28
CUSTOMER
TRUST
SWITCHING
COSTS
Credibility
CTR1
Reliability
CTR2
Intimacy
CTR3
Self-interest
Selection
Time
Money
Relationship
CTR4
SWC1
SWC2
SWC3
SWC4
I believe the message/information of BIDV
I believe my accounts/banking transactions are safe
with BIDV
I believe that BIDV‟s employees keep my
information secret.
I believe that BIDV has my best interests at heart.
I am hesitant to choose which other bank to use
I think it would take a lot of time to change a bank.
I think it would take lots of money to change a bank.
I have invested a lot in the relationship with BIDV.
Table 3.10: Final format of Questionnaire
Based on the items of constructs, and to avoid the language barrier the initial
Vietnamese draft of the questionnaire was designed. Then the questionnaires are
translated into English for the report. Appendix C & Appendix D are shown Vietnamese
and English versions of the questionnaire.
5. Data Collection Method
5.1.
Sample
The target sample is the BIDV‟s customers who are living in Lam Dong Province
and have experience with branches and transaction offices of this bank in this region.
According to Keller (1993) suggested that loyalty is established in customer‟s mind when
the favorable attitude of customers for the brand of services or products are manifested in
repeated purchasing behavior. Therefore, the sample will be chosen and collected from
BIDV‟s customers in Lam Dong Province who have used the banking service at least 3
times that are confirmed from the opinions of BIDV‟s employees and customers in the
above-mentioned pilot tests.
5.2.
Sample Size
The sample size is taken by determining the population proportion in studies.
Specifically, McClave et al. (2006) stated that the use of the population proportion was
29
presented to determine the amount of a sample size to preset the whole group of
population which can be used for unknown population. In this research, it is impossible to
get the number of proportion exactly. For this reason, the formula developed by Smith
(2011) is referred to calculate the sample size.
Formula
𝑝𝑞𝑧 2
𝑁=
𝐸2
In which:
N stands for Necessary sample size
z2 stands for The Square of the confidence interval in standard error units
Here is the Z for the most common confidence levels: (90% Z = 1.645); (95%
Z = 1.96); (99% Z = 2.326).
The sample size is normally determined with 95% confidence level (Zikmund,
2003). The level of risk is called by sampling error to be the level of precision.
In this case, the confidence level is 95%. It means that 95 out of 100 samples
have true population value.
p is the estimated proportion of success. For a conservative approach, let p = 0.5
(Levine et al., 1999) q = (1 – p)
E2 is the square of the maximum allowance for error between the true proportion
and sample proportion. The allowable error is usually 0.05 or 5% (Hanley and
LippmanHand, 1983)
Finally, the total sample is estimated as below:
𝑁=
𝑝𝑞𝑧 2
0.5 1 − 0.5 (1.96)2
=
= 384.16
𝐸2
0.052
30
Besides, a ratio of ten responses per free parameters is required to obtain
trustworthy estimates (Bentler & Chou, 1987). Others suggest a rule of thumb of ten
subjects per item in scale development is prudent (Flynn & Pearcy, 2001). However, if
data is found to violate multivariate normality assumptions, the number of respondents
per estimated parameter increases to 15 (Bentler & Chou 1987; Hair, 1998). In this
research, each of the constructs to be measured had four to five items and there are total
25 items. Therefore, a sample size from 250 to 375 is required. However, a sample size
exceeding 400 to 500 becomes „too sensitive‟, as almost any difference is detected,
making all goodness-of-fit measures indicate a poor fit (Hair, 1998).
In conclusion, the sample size is collected to round up to 300 to 400 respondents
in order to get the result more reliable for this research.
5.3.
Sampling
For this study, Cluster Sampling is the most suitable selection of categories of the
probability sampling methods. First, it is impossible to have the list of BIDV‟s customers
in Lam Dong Province because its rule of the banking industry is to keep customer‟s
information secret and secure. Besides, there are total 8 branches and transaction offices
geographically distributed in Lam Dong Province that is easily divided into clusters.
According to Sekaran & Bougie (2010), population in cluster sampling is divided
into clusters, in which a cluster is a natural aggregation of elements in a population and
then randomly some clusters are drawn from the group. In a selected cluster, all elements
may be selected for study or a random sample can be further drawn from the cluster.
Similarly, Hyndman (2008) also defined that “A cluster sample is a probability sample in
which each sampling unit is a collection, or cluster, of elements. The population is
31
divided into clusters and one or more of the clusters is chosen at random and sampled.
Sometimes the entire cluster is sampled, on other occasions a simple random sample of
the chosen clusters is taken…”
In this study, population was divided into 8 clusters which correspond with 8
branches and transaction offices of BIDV in Lam Dong Province. To obtain from 300 to
400 questionnaires, each cluster was expected to be collected more than 50
questionnaires. A survey with a total of 800 questionnaires was conducted at 8 branches
and transaction office of BIDV during nearly a six – week period in Lam Dong Province.
Some branches and transaction office allowed the researcher to contact customers, while
others just received questionnaires and let their employees send them to their customers
and then gave them back to the researcher.
Finally, data collected from 8 branches and transaction offices of BIDV in Lam
Dong Province were 480 questionnaires. However, 103 respondents are not appropriate
for the research because they did not complete their questionnaires. Therefore, the final
sample consists of 377 habitual customers of BIDV‟s branches and transaction offices in
Lam Dong Province. The sample size is between 300 and 400 indicated that data may be
reliable for this research.
6. Data Analysis Method
Valid questionnaires were coded, and then the raw collected data will be
processed by SPSS and AMOS software. Data go through these analysis methods:
Descriptive statistics: The goal of descriptive statistics is to summarize and to
present numerical information in a manner that is illuminating and useful. In this
32
research, this technique is used to evaluate Customer Loyalty, Customer Satisfaction,
Service Quality, Corporate Image, Customer Trust and Switching Costs.
Reliability test: Reliability test through Cronbach‟s alpha as a method that is
frequently used that assessing the consistency of the entire scale. Geogry & Mallery
(2003) provide that the following rules of thumb: “_> 0.9 – Excellent, _>0.8 – Good;
_>0.7 – Acceptable, _>0.6 – Questionable, >0.5 – Poor, and _ 15
million
14.6%
≤5
>10 million
15
37.7%
million
19.4%
>5 - 10
million
28.4%
Retirement
1.3%
Enterprise
owner
18.1%
Employment
52.5%
Unemployment
& Seeking
employment
0.8%
Trading
25.7%
Figure 4.3: The percentage of monthly
income BIDV‟s customers
Figure 4.4: The percentage job categories
of BIDV‟s customers
Analyzing the subgroups of job categories and income are always mentioned in
the researches which their subject is to mainly focus on customer behavior. According to
Figure 4.3, the percentage of customers whose monthly income is over 10 million is just
34%. Figure 4.4 shows that about 52.5% of customers are in “employment”.
Figure 4.5 shows that just 15.7% of customers have remained their working
relationships with BIDV for over 5 years. This is explained that BIDV‟s branches and
transactions in Lam Dong Province are not successful to build consumer loyalty as well
as to attract potential customers even though they have existed in this region for more
than 10 years since the opening day.
37
61%
23.3%
15.7%
< 1 year
1 year - 5 years
> 5 years
Figure 4.5: The length of working relationship between customers and BIDV
100.0%
73.2%
58.1%
ATM
Online
0%
Branch
Call Center
Figure 4.6: Multichannel of BIDV
According to the response of 377 respondents, all of them usually come to
branches or transaction offices to conduct their banking transactions. It is shown that
retail branches still remain a core banking channel in Lam Dong Province. While
contacting with the bank through call center is entirely not interested by customers
because of its nature of security and too complicated process. Furthermore, these
branches and transaction in this region do not really improve the quality of call center
over the past years; even some do not have this channel. For example, call center service
has just implemented at Duc Trong District in July 2013. This is why customers are not
familiar with call centers of the bank. Figure 4.6 shows that more than 50% of customers
spend time in online to execute their transactions. This is proved that customers have a
tendency to rely more heavily on direct channels when technology rapidly changes the
way consumers behave and interact.
In the increasingly competitive market of the banking industry, there is slightly
difference which exists in financial services and products among banks. However, the
38
diversification of products and services is one of the competitive advantages that can
enable customers more loyal with a bank.
Card Service
66%
Wire transferring
61.4%
Saving account
57.9%
E-bank
56.3%
Account service
44.0%
Loan
Others
31.6%
6.7%
Figure 4.7: Categories of BIDV‟s Products and Services
Figure 4.7 shows that three kinds of services and products that customer use most
are card service, wire transferring and saving account in this retail banking market.
Besides, more and more customers use e-bank because of its effectiveness, convenience
and simple registering procedure.
2. Descriptive Statistics
Descriptive statistics are used to describe the basic features of the data. This
technique shows us an estimate of the center of a distribution of value. In this research,
mean is the average of customer‟s evaluation level on the performance of BIDV‟s
branches and transaction offices in Lam Dong Province based on variables.
In questionnaire design, ten-point Likert-scale, ranged from 0 to 10 is used for
customer‟s selection, which corresponds with ten levels of the customer‟s evaluation.
However, to make it clearer and simpler the level of the customer‟s evaluation on each
statement, it is divided into three levels based on Reichheld‟s viewpoint (2003), which
are alternately “promoters” (9-10 rating), “passively satisfied” (7-8 rating), and
“detractors” (0-6 rating).
39
2.1.
Customer Loyalty
All the four items of Customer Loyalty (CLO1–Word of mouth, CLO2–Rebuying
product/service, CLO3–Priority, CLO4–Consistency) have medium mean value. “Rebuying product/service” and “Priority” have higher scores among of four items while
“Word of mouth” and “Consistency” have lower scores. The values of the standard
deviation are from 1.270 to 1.280 (< =1.67), which shows the relatively similar
evaluation of almost customers in term of Customer Loyalty.
Item
Consistence
Mean
Std. Deviation
Minimum
Maximum
6.98
1.280
2
10
CLO1
CLO3
Word of mouth
Priority
7.00
7.30
1.238
1.207
5
4
10
10
CLO2
Re-buying product/service
7.42
1.270
5
10
Code
CLO4
Table 4.1: Customer Loyalty descriptive statistics
According to Table 4.1, it is shown that loyal in the customer behavior is better
expressed than in the customer‟s attitude. In other words, customers are willing to
continue using products/services or select BIDV for their new demand in the future.
However, they are not too eager to recommend this bank to their friends, colleague or
their family; and they are also hesitant to choose BIDV if a better bank is offered.
Consistency
31%
Word of mouth
34%
Priority
26%
Re-buying product/service
23.9%
0%
58.9%
10.1%
54.9%
11.1%
62.9%
11.1%
56.2%
20%
40%
Detractors
60%
19.9%
80%
Passively satisfied
Figure 4.8: Questionnaire response on Customer Loyalty
40
100%
Promoters
Figure 4.8 is shown that more than 50% of customers are passively satisfied in
each statement about Customer Loyalty. It is able to say that they have a tendency to
become loyal customers; however, it does not mean BIDV‟ customer loyalty is really
good because of the very low percentage of promoters (just about 10% to 20%), and high
percentage of detractors (from 23.9% to 31%).
Based on the given definition of bank loyalty and research findings, the
percentage of customers regarded as detractors is about 20%-30% of the total. This shows
that they are not true loyalty. They are not willing to recommend the bank to their family,
friends and/or colleague even though they have the intention to continue using BIDV‟s
products/services and to consider BIDV as their first choice for future purchase. In
addition, they are lacking in emotional attachment or commitment to their banks and they
are willing to defect to competitor banks that serve them better than BIDV.
However, just 10%-20% customers regarded as promoters can be characterized as
really truly loyal, since they are willing to provide good referrals about the bank to
others, and are more resolute in their selections when a better bank is offered. Moreover,
they want to be remaining customers of their bank, and would consider it as their main
choice for future purchases.
With the response score, Net-Promoter Score (NPS) of BIDV‟s branches and
transaction office in Lam Dong Province is calculated in the following equation:
NPS = %Promoter - %Detractor = 11.1% - 34% = - 22.9%
It is clear that BIDV‟s branches and transaction offices in Lam Dong Province
have a negative Net-Promoter Score, which means that they are creating more detractors
than promoters. Therefore, it is vital to improve customer loyalty of BIDV‟s branches
41
and transaction offices in Lam Dong Province as fast as possible in the increasingly
competitive market, if they do not want to lose their loyal customers to their competitors.
Frequencies or Descriptives of Descriptive Statistics is commonly used to analyze
customer loyalty, for example, the research of Lewis & Soureli (2006). Besides this
technique, in this research, NPS is used to assert the reliability of these findings again.
Moreover, this NPS shows the real situation of BIDV‟s customer loyalty in this region,
which has to be improved and developed in order to retain current customers.
2.2.
Customer Satisfaction
All the four items of Customer Satisfaction (CSA1–Overall satisfaction, CSA2–
Fulfilled demand, CSA3–Comparision, CSA4–Ideal bank) have also medium mean
values. The lowest score is “Ideal bank” and the highest score is “Overall satisfaction”.
The values of the standard deviation are from 1.168 to 1.348 (< =1.67), which means
that most of customers have the same evaluations in term of Customer Satisfaction.
Code
Item
Mean
Std. Deviation
CSA4
CSA2
CSA3
CSA1
Ideal bank
Fulfilled demand
Comparison
Overall satisfaction
6.92
7.45
7.48
7.65
1.168
1.182
1.288
1.348
Minimum Maximum
3
4
4
4
9
10
10
10
Table 4.2: Customer Satisfaction descriptive statistics
Ideal bank
32.4%
Fulfilled demand
22.0%
Comparison
21.0%
Overall satisfaction
20.4%
0%
59.9%
7.7%
58.9%
54.4%
24.7%
49.6%
20%
Detractors
40%
19.1%
30.0%
60%
Passively satisfied
80%
Promoters
Figure 4.9: Questionnaire response on Customer Satisfaction
42
100%
Table 4.2 & Figure 4.9 show BIDV well serves customers because there are 30%
of promoters when asking about their overall satisfaction toward BIDV and the mean
value of this item is the highest in all of Customer Satisfaction dimensions. However, it is
clear BIDV‟s branches and transaction offices do not meet customer expectation because
the mean value of the variable CSA2 is 7.45. In fact, BIDV‟s loyal customers are truly
unsatisfied with its service quality as well as performance. For example, its banking
facilities are not as modern and convenient than other banks; or the frequency of errors in
transactions and employees‟ mistake is rather high. For this reason, the mean value of
“Comparison” is just 7.48, which partly explains that the percentage of loyal customers
having over five-year working relationship with BIDV is 15.7%. Therefore, BIDV has to
make a full effort to become the ideal bank in the customer's mind.
2.3.
Service Quality
All measurements in Service Quality (SQA1–Machine service quality, SQA2–
Service system quality/functional performance, SQA3–Service system quality/technical
performance, SQA4–Behavioral service quality, SQA5–Service transaction accuracy)
score pretty high. In these, “Service system quality – Functional performance” and
“Behavioral service quality” score highest. The values of the standard deviation are from
0.983 to 1.205 (< =1.67), which shows that there are too much different between most
of customer‟ evaluations about Service Quality.
Code
SQA5
SQA1
SQA3
SQA4
SQA2
Item
Service transaction accuracy
Machine service quality
Technical performance
Behavioral service quality
Functional performance
Mean
7.20
7.51
7.71
7.82
7.98
Std. Deviation
.983
1.205
1.182
1.070
1.084
Minimum
5
4
4
5
5
Table 4.3: Service Quality descriptive statistics
43
Maximum
9
10
10
10
10
As the above-mentioned mean values of Customer Satisfaction, it is obvious that
mean values of Service Quality are from 7.20 to 7.98. It is explained that Service Quality
has a positive impact on Customer Satisfaction which is proved in studies in retail
banking. (Beerli et al., 2004; Lewis & Soureli., 2006; Jamal & Anastasiadou, 2009)
Service transaction accuracy
Machine service quality
14.3%
Behavioral service quality
10.9%
Detractors
22.0%
58.4%
27.3%
61.5%
27.6%
55.7%
9.3%
0%
7.2%
59.9%
18.0%
Technical performance
Functional performance
70.3%
22.5%
20%
40%
Passively satisfied
35.0%
60%
80%
100%
Promoters
Figure 4.10: Questionnaire response on Service Quality
According to Nielsen (2012), 67% of Vietnamese consumers choose the bank
because of its quick and simple application procedure. It is also true in this region that
the mean value of BIDV‟ service system quality – functional performance shown
through its application procedure is among the highest of these dimensions of Service
Quality. Additionally, the percentage of promoters make up 35% and it is just 9.3% of
detractors. The remaining item of service system quality, technical performance shown
through flexible and customized solution has the third highest score. In fact, BIDV
employees try their best to serve their customers and BIDV‟s management has its
customer‟s best interest at heart.
The quality of behavioral service performed by BIDV‟s employees is positively
evaluated by its customers. In general, BIDV‟s employees are polite and helpful.
However, friendliness and openness is not homogeneous in all branches and transaction
44
offices. In some transaction offices, employees are not always smile on customers or
they are too formal and impersonal when communicating with customers. For this
reason, its mean value is higher than other items but is not the highest in all of them.
“Service transaction accuracy” which its mean value is the lowest and only 7.2%
of respondents are promoters should be improved. High frequency of errors in
transactions and employees‟ mistake can enable customers to reduce their trust as well
as loyalty towards a bank. Besides, the mean value of “Machine service quality” is also
low. In fact, banking facilities is not satisfied with customers. For example, parking is
not convenient for customers when they come to conduct transactions at branches and
transaction offices; or it takes more than 15 minutes for customers to receive the SMS
from mobile banking service.
2.4.
Corporate Image
All measurements in Corporate Image (CIM1–Innovation, CMI2–Sustainability,
CIM3– Business ethic, CIM4–Market leader) have high mean value. The lowest score is
“Innovation” and the highest score is “Market leader”. The values of the standard
deviation are from 0.996 to 1.091 (< =1.67), which shows that there are nearly
completed similarity between most of customer‟ awareness of Corporate Image.
Code
Item
Mean
Std. Deviation
Minimum
Maximum
CIM2
CIM3
CIM1
CIM4
Innovative
Business ethic
Sustainability
Market leader
7.85
8.02
8.10
8.13
1.091
1.030
.906
.996
4
5
5
6
10
10
10
10
Table 4.4: Corporate Image descriptive statistics
According to “The Annual Report of Credibility Index Vietnam 2012” released
by the Vietnam Chamber of Commerce and Industry and the Corporate Rating Company,
45
BIDV was awarded an A rating – the highest given to a commercial bank in Vietnam.
This is why BIDV‟s loyal customers in Lam Dong Province think of its branches and
transaction offices as the leading, sustainable, ethical and innovative bank.
Innovation
10.0%
58.4%
31.6%
Business ethic
7.4%
54.9%
37.7%
Sustainability
4.0%
60.2%
35.8%
Market leader
5.3%
57.0%
37.7%
0%
20%
Detractors
40%
Passively satisfied
60%
80%
100%
Promoters
Figure 4.11: Questionnaire response on Corporate Image
The first awareness of BIDV‟s image in almost loyal customers asked is the
leading bank in banking sector in this region. It is easily understood that BIDV is one of
five state-owned banks in Vietnam regarded as the greatest triumphs of this banking
industry and sustainable banks as well. However, the image of BIDV regarded as an
innovative and forward-looking bank is not clearly defined in the customer‟s mind. That
shows through the lowest mean value and just 31.6% of promoters.
According to VnEconomy‟s web site, in Vietnam, more and more bank officials
and employees have recently been prosecuted for violating the law and professional
ethics such as the fraudulent appropriation of money from customers or withdrawing
money from banks. These cases have been sounding the alarm for the problems of
business ethics in the banking system. Therefore, customers quickly decide to choose
another better bank if their current bank has a bad reputation in business ethic. For this
reason, it is an extremely important to take a hard concern of business ethic to build a
strong bank‟s image. Indeed, BIDV really rather well control this subject. That is why
46
there are 37.7% of promoters in BIDV‟s loyal customers, although the mean value of
Business Ethic is the third highest.
2.5.
Customer Trust
All the four items of Customer Trust (CTR1–Credibility, CTR2–Reliability,
CTR3–Intimacy and CTR4–Sefl-interest) have also pretty high mean values. In these,
“Reliability” and “Credibility” score highest. The values of the standard deviation are
from 1.159 to 1.263 (< =1.67), which means that almost of loyal customers have the
nearly similar level of trust in BIDV.
Code
CTR3
CTR4
CTR1
CTR2
Item
Intimacy
Self-interest
Credibility
Reliability
Mean
7.34
7.39
7.82
7.83
Std. Deviation
1.241
1.263
1.126
1.159
Minimum Maximum
3
10
3
10
5
10
5
10
Table 4.5: Customer Trust descriptive statistics.
Intimacy
24.2%
Self-interest
24.1%
57.8%
18.0%
55.2%
20.7%
Credibility
13.3%
54.9%
31.8%
Reliability
13.3%
55.4%
31.3%
0%
20%
Detractors
40%
Passively satisfied
60%
80%
100%
Promoters
Figure 4.12: Questionnaire response on Customer Trust
Building and boosting customer trust are one of the biggest challenges for all
banks in this industry in everywhere. Based on the research of Lewis and Soureli (2006),
it is able to say that the more customers trust in their bank, the more loyal they are.
According to Table 4.5 and Figure 4.12 show that BIDV‟s customer trust might be pretty
good through the fairly high mean values. It means that BIDV customers believe the
47
message or information provided by BIDV and they also trust that their accounts or
banking transactions are safe with this bank. However, 24.2% of loyal customers could
not trust BIDV‟s employee not to tell their information to someone. Furthermore, making
customers believe that management has the customer‟s best interest at heart is still a big
challenge for BIDV, while just 18% of loyal customers totally trust in this statement and
Self-Interest has the lowest mean value. Hence, what is the real situation of BIDV‟s
customer trust in this region?
To evaluate BIDV‟s customer trust more exactly, the Trust equation (Green,
2007) is referred. The trust score for BIDV‟s branches and transaction offices is 8.81
displayed in Appendix F whereas theoretical maximum is 30. It is partially explained that
just 15.7% of customers in total sample have remained their relationships with BIDV for
over 5 years. However, this trust score cannot compare with the standard trust score of
the retail banking based on all banks in Lam Dong Province because of the research
limitation. Therefore, this trust score in theory might be evaluated lower than it in reality.
In sum, it is obviously that customer trust is one of the biggest challenges that all banks in
general and BIDV in particular are now facing.
2.6.
Code
SWC1
SWC2
SWC4
SWC3
Switching Costs
Item
Selection
Time
Relationship
Money
Mean
6.14
6.36
6.48
6.53
Std. Deviation
1.877
1.718
1.731
1.715
Minimum Maximum
1
10
0
10
0
10
0
10
Table 4.6: Switching Costs descriptive statistics
All measurements in Switching Costs (SWC1–Seletion, SWC2–Money, SWC3–
Time and SWC4–Relationship) have also low mean values. The lowest score is
48
“Selection” and “Money” and “Relationship” score highest. The values of the standard
deviation are from 1.715 to 1.877 (> =1.67), which shows that customer‟ evaluations
vary considerably in term of Switching Costs.
Selection
51.0%
Time
40.8%
53.6%
8.2%
32.6%
13.8%
Relationship
50.4%
35.0%
14.6%
Money
49.6%
36.1%
14.3%
0%
20%
Detractors
40%
Passively satisfied
60%
80%
100%
Promoters
Figure 4.13: Questionnaire response on Switching Costs
The low mean values of Switching Costs dimensions and about 50% of customers
are detractors shown on each statement prove that customers in this region are not
hesitant to change their bank even though it is time-consuming and costly to build new
working relationship with a new bank. Besides, the nature of the increasingly competitive
market in this industry that is slightly different existing among banks contributes to grow
customer‟s switching intention.
Among of Switching Costs, Money and Relationship are the considerable factors
if a customer wants to change from his or her current bank to a better bank. Therefore, if
a bank tries to remain a good long-term relationship with customers and conducts an
appropriate pricing strategy, switching other banks might not happen. Most customers in
Lam Dong Province whose education level is “College or University” are more
knowledgeable about banks so that they easily decide to select a new bank. Besides, they
are also willing to spend time on doing new procedures in that bank. In conclusion, the
nature of low switching costs this region should be importantly considered.
49
3. Reliability Test
To test the reliability of the sample data, Cronbach‟s Alpha is popularly used as a
measure of the internal consistency of a test score for a sample of examinees. Moreover,
it is necessary to calculate and report Cronbach‟s Alpha when using a Likert-type scale
(Gliem & Gliem, 2003). Below table shows the reliability statistics of all measurement
factors in this research.
Variable
Customer Loyalty
Customer Satisfaction
Service Quality
Corporate Image
Customer Trust
Switching costs
Cronbach’s Alpha
.918
.867
.876
.919
.941
.897
N of Item
4
4
5
4
4
4
Table 4.7: Reliability test‟s result – Cronbach‟s Alpha
Table 4.7 shows that the minimum value of Cronbach‟s Alpha is 0.867 (of
Customer Satisfaction), and highest value is 0.941 (of Customer Trust). All of
Cronbach‟s Alpha values in this full-scale study are better than these initial values in the
pilot tests. Based on the above-mentioned rules of thumb of Geogry & Mallery (2003),
these Cronbach‟s alpha values of Customer Satisfaction, Service Quality, and Switching
Cots are good, which makes this research worth for further study. The very high value of
Cronbach‟s alpha of Customer Loyalty, Corporate Image, and Customer Trust are ranked
excellent in this rule-of-thumb. Besides, these values do not exceed 0.95, which proves
that there is no significant multicollinearity (Bland & Alman, 1997). This result
demonstrates that the measurement scale is well designed and trustworthy. Moreover, the
values of corrected item-total correlation in all factors show no item should be deleted
because they could not increase the current result. Therefore, all the items of each factor
should be kept in this research, which was displayed in more detail in Appendix E.
50
4. Exploratory Factor Analysis (EFA)
Exploratory Factor Analysis is a technique to evaluate interdependence. It studies
all interrelationships without defining variables to be dependent or independent. In this
research, EFA is applied to test the model with The Kaiser-Meyer-Olkin (KMO) and
Bartlett‟s test by using the Principal Axis Factoring with Promax rotation. KMO is an
index used to examine the appropriateness of factor analysis. High values (between 0.5
and 1.0) with statistical significance value (sig < 0.05) indicate the factor analysis is
appropriate. In other words, values below 0.5 imply that factor analysis may not be
appropriate (Gerbing & Anderson, 1988; Rietveld & Van Hout 1993; Field, 2000).
Gerbing & Anderson (1988) insist that Principal-Axis Factoring is relatively equal
in their capacities to extract the correct model and is more commonly reported in social
and behavioral science research reports than Principal Components with Varimax
rotation. To ensure the practical significance of EFA, Factor Loading should be equal or
higher than 0.5 (Hair et al., 1998), Total Variance Explained is over 50% (Gerbing &
Andension, 1998).
In this research, the factor analysis process is repeated in 4 rounds shown in
Appendix G due to the cross-factor loading of the variables. In all 4 rounds of the factor
analysis process, each KMO is about 0.9 (>0.5) with statistical significance (sig = .000)
and each Total Varian Explained is over 70% (>50%) which prove the appropriateness of
factor analysis.
In the first round, 6 initial components are converted into 5 components. Item
SQA5 is deleted because of cross-loading factor and 24 remaining items are kept for the
next step. In the second round, 5 previous components still play the main role. Item
51
CSA2 is removed because of cross-loading factor and there are 23 remaining items. In
the third round, 5 these components continue to be 5 major components. Item CSA4 is
excluded because of cross-loading. Finally, these 22 variables are tested again in the final
round. The result of the round is described in the following table.
SQA3
SQA4
CSA1
SQA2
CSA3
SQA1
CIM1
CIM3
CIM2
CIM4
CLO3
CLO4
CLO2
CLO1
SWC3
SWC4
SWC2
SWC1
CTR4
CTR3
CTR2
CTR1
1
.849
.815
.812
.800
.784
.567
Pattern Matrixa
Factor
2
3
4
5
.903
.870
.830
.815
.977
.823
.791
.778
.928
.825
.819
.751
.999
.979
.674
.672
Extraction Method: Principal Axis Factoring.
Rotation Method: Promax with Kaiser Normalization.
a. Rotation converged in 5 iterations.
Table 4.8: Pattern matrix of variables
According to Table 4.8, the factor analysis has pulled out 5 major factors from 22
variables whereas the number of factors in the initial research model is 6. Two factors
including Customer Satisfaction and Service Quality are grouped into a component.
Because the number items of Service Quality are more than the number items of
Customer Satisfaction, the new component is named Service Quality which includes
52
CSA1, CSA3, SQA1, SQA2, SQA3 and SQA4. Its value of Cronbach‟s Alpha is 0.907
without deleted items increasing the current result displayed in Appendix E. Besides,
Table 4.13 is also shown that items of 4 remaining factors which are alternatively
Customer Image, Customer Loyalty, Switching Costs, and Customer Trust are initially
kept as a final format of the questionnaire.
There has been much debate in the literature regarding the overlap and distinction
between customer satisfaction and service quality. According to the research of Beerli et
al. (2004) and Lewis & Soureli, 2006), Customer Satisfaction and Service Quality are
commonly separated, which have the strong causal relationship. Furthermore, Anderson
et al. (1994) clarify the distinction between satisfaction and service quality. Besides,
service quality is considered an antecedent of customer satisfaction (Gotlieb et al, 1994).
Whereas, Dabholkar et al. (1993, 1995, 1996) proposed to examine overlap or
distinctions between customer satisfaction and service quality and concluded that they
tend to be distinct factors in the short term, but tend to overlap in the long term.
Based on the standpoint of Dabholkar et al. (1993, 1995, 1996), Customer
Satisfaction and Service Quality are regarded as a component in this research because our
target sample of this research is BIDV‟s habitual customers. Most of them have a longterm working relationship with BIDV‟s branches and transaction offices in Lam Dong
Province. The findings and conclusions of Dabholkar et al. (1993, 1995, 1996) prove the
reliability and validity of the research, even though the overlap between customer
satisfaction and service quality has not appeared in the previous studies. Besides, that
also positively contributes towards Dabholkar‟s conclusions about the relationship
between customer satisfaction and service quality in a long time in her study.
53
5. Confirmatory Factory Analysis (CFA)
Confirmatory Factory Analysis is a better method to assess the validity and
reliability of measures (Bagozzi & Foxall, 1996). The goodness-of-fit of CFA is used to
further assess the unidimensionality and convergent validity among the constructs.
Figure 4.14: CFA result
CFA is applied with following indexes: Chi-square, Chi-square/df, Comparative
Fit Index (CFI), Tucker & Lewis Index (TLI), Root Mean Square Error Approximation
54
(RMSEA). All factors are reliability for the next analyzing steps if GFI, TLI and CFI are
equal or above 0.9 (Bentler & Bonett, 1980); Chi-square/df is equal or lower 2 (Chisquare/df ≤3 can be accepted in some cases) (Carmines & McIver, 1981); and RMSEA is
equal or lower 0.08 (RMSEA ≤ 0.05 is excellent) (Steiger, 1990).
Therefore, these evidences which are GFI = 0.931, TLI = 0.981, CFI = 0.984
(>0.9), Chi-square/df = 1.669 ( 10 million – 15 million
> 5 million – 10 million
> 15 million
High school or less
College/University
Vocational training
Master or higher
Education level
105
< 1 year
The length of
working relationship
1 year – 5 years
> 5 years
The times of banking
transaction
≥ 3 times
< 3 times
Branch
Call centre
Channels
ATM
Online
Saving account
E-bank
Account service
Card service
Wire transferring
Others
Products/Services
Loan
THANKS FOR YOUR HELP!
106
Appendix D: Survey Questionnaire (Vietnamese version)
Kính chào Anh/Chị!
Hiê ̣n tại tôi đang thực hiê ̣n đề tài nghiên cứu về lòng trung thành của khách hàng tại các
chi nhánh/văn phòng giao di ̣ch của ngân hàng BIDV tại Tỉnh Lâm Đồng. Rất mong Anh/Chị dành
ra vài phút đ ể giúp tôi trả lời những câu hỏi dưới đây. Tấ t cả mọi 107han107 tin sẽ được giữ bí
mật và phục vụ duy nhấ t cho mục đích nghiên cứu.
Xin chân thành cảm ơn Anh/Chị!
Xin Anh/Chị vui lòng chỉ chọn 1 ô mà Anh /Chị cảm thấy đúng nhất , phù hợp nhất cho
mỗi phát biể u dưới đây. Anh/Chị có thể khoanh tròn vào con số , hay đánh dấ u hoă ̣c .
Mức điể m từ 1 tới 10, trong đó:
-
Mức 0: là mức thấ p nhấ t , là mức mà Anh/Chị cảm thấy hoàn toàn không đồ ng ý .
-
Mức 5: là mức bình thường , là mức mà Anh/Chị cảm thấy bình thường
-
Mức 10: là mức cao nhấ t, là mức mà Anh/Chị cảm thấy hoàn toàn đồng ý .
CHẤT LƯỢNG DICH
VỤ CỦ A NGÂN HÀ NG
̣
Cơ sở vâ ̣t chấ t, trang thiế t bi ̣của BIDV hiê ̣n
đa ̣i, tiê ̣n nghi.
0
1
2
3
4
5
6
7
8
9
10
Quy trin
̀ h thủ tu ̣c ta ̣i BIDV nhanh chóng , đơn
giản.
0
1
2
3
4
5
6
7
8
9
10
Các vấn đề của tôi tại BIDV được giải quyết
thỏa đáng, linh hoạt.
0
1
2
3
4
5
6
7
8
9
10
Nhân viên BIDV luôn tỏ ra lich
̣ sự, nhiê ̣t tiǹ h
và thân thiê ̣n với tôi.
0
1
2
3
4
5
6
7
8
9
10
Không có sai sót xảy ra trong quá trình giao
dịch tại BIDV.
0
1
2
3
4
5
6
7
8
9
10
Thời gian qua, đánh giá chung, tôi hài lòng về
BIDV.
0
1
2
3
4
5
6
7
8
9
10
BIDV đã đáp ứng đươ ̣c nhu cầ u của tôi.
0
1
2
3
4
5
6
7
8
9
10
So các ngân hàng khác , tôi hài lòng về ngân
hàng BIDV hơn.
0
1
2
3
4
5
6
7
8
9
10
1
2
3
4
5
6
7
8
9
10
1
2
3
4
5
6
7
8
9
10
SỰ HÀ I LÒNG CỦ A KHÁCH HÀ NG
BIDV đáp ứng đươ ̣c mong đơ ̣i của tôi về 1
0
ngân hàng lý tưởng .
HÌNH ẢNH/THƯƠNG HIÊU
̣ NGÂN HÀ NG
BIDV là mô ̣t ngân hàng phát triể n bề n vững
và ổn định.
0
107
BIDV là mô ̣t ngân hàng đổ i mới và tiên tiế n .
0
1
2
3
4
5
6
7
8
9
10
0
1
2
3
4
5
6
7
8
9
10
0
1
2
3
4
5
6
7
8
9
10
Tôi tin vào những thông tin đươ ̣c cung cấ p từ
BIDV.
0
1
2
3
4
5
6
7
8
9
10
Tôi tin vào sự an toàn, chính xác khi giao dịch
với BIDV.
0
1
2
3
4
5
6
7
8
9
10
0
1
2
3
4
5
6
7
8
9
10
0
1
2
3
4
5
6
7
8
9
10
Tôi phân vân khi quyế t đinh
̣ cho ̣n la ̣i mô ̣t
ngân hàng mới .
0
1
2
3
4
5
6
7
8
9
10
Sẽ tốn tiền nếu chuyể n sang ngân hàng khác .
0
1
2
3
4
5
6
7
8
9
10
Sẽ tốn thời gian nế u chuyể n sang ngân hàng
khác
0
1
2
3
4
5
6
7
8
9
10
Tôi đầ u tư quá nhiề u vào những mố i quan hê ̣
tại BIDV.
0
1
2
3
4
5
6
7
8
9
10
Tôi khuyên gia đin
̀ h , người thân, bạn bè lựa
chọn BIDV.
0
1
2
3
4
5
6
7
8
9
10
Tôi sẽ tiế p tu ̣c sử du ̣ng dich
̣ vu ̣ của BIDV .
0
1
2
3
4
5
6
7
8
9
10
Nế u có nhu cầ u mới, BIDV luôn là sự lựa
chọn đầu tiên.
0
1
2
3
4
5
6
7
8
9
10
Dù được giới thiệu 1 ngân hàng tố t hơn, tôi
vẫn cho ̣n BIDV.
0
1
2
3
4
5
6
7
8
9
10
BIDV là mô ̣t ngân hàng kinh doanh có đa ̣o
đức
BIDV là mô ̣t ngân hàng hàng đầ u ta ̣i Viê ̣t
Nam.
NIỀM TIN CỦ A KHÁCH HÀ NG
Tôi tin nhân viên BIDV giữ bí mâ ̣t các thông
tin cá nhân của tôi.
Tôi tin BIDV luôn đă ̣t lơ ̣i ić h khách hàng lên
trên hế t .
CHI PHÍ CHUYỂN ĐỔI
SỰ TRUNG THÀ NH CỦ A KHÁCH HÀ NG
THÔNG TIN CÁ NHÂN
Nghề nghiê ̣p:
Sinh viên/Học Sinh
Làm chủ doanh nghiệp
Không đi làm & đang tim
̀ viê ̣c
Về hưu
Làm thuê (công chức Nhà
Nước, nhân viên công ty…)
Thu nhập trung bình
hàng tháng:
Buôn bán, Tự kinh doanh…
Từ 5 triê ̣u trở xuố ng
Từ trên 10 triê ̣u – 15 triê ̣u
Từ trên 5 triê ̣u – 10 triê ̣u
Từ trên 15 triê ̣u
108
Trình độ học vấn:
Cấ p ba hoă ̣c thấ p hơn
Đa ̣i ho ̣c/Cao đẳ ng
Trung cấ p nghề
Cao ho ̣c và trên cao ho ̣c
Dưới 1 năm
Thời gian giao dich
̣
với ngân hàng:
1 năm – 5 năm
Trên 5 năm
Số lầ n giao dich:
̣
< 3 lầ n
≥ 3 lầ n
Chi nhánh/Phòng giao dịch
Kênh giao dich
̣ với
ngân hàng:
Gọi tới trung tâm khách hàng
ATM
Truy câ ̣p trang Web Ngân Hàng/Internet banking…
Các sản phẩm /dịch
vụ sử dụng:
Tiế t Kiê ̣m
E-bank/Ngân hàng điê ̣n tử
Tài khoản và Tiền Gửi
Dịch vụ thẻ: Thẻ ATM, Visa…
Chuyể n Tiề n/Nhâ ̣n tiề n
Dịch vụ khác
Vay (tín dụng)
Giới Tính:
Nữ
Nam
XIN CHÂN THÀ NH CẢM ƠN CÁC ANH/CHỊ!
109
Appendix E: Reliability Test’ result of the full-scale study
Customer Loyalty
Cronbach‟s Alpha
N of Items
.918
4
Table E.1: Cronbach‟s alpha of Customer Loyalty
CLO1
CLO2
CLO3
CLO4
Scale Mean if Item
Scale Variance if
Corrected ItemCronbach‟s Alpha if
Deleted
Item Deleted
Total Correlation
Item Deleted
21.71
11.756
.792
.900
21.28
11.501
.801
.897
21.40
11.582
.849
.881
21.73
11.422
.804
.896
Table E.2: Item-Total Statistics of Customer Loyalty
Customer Satisfaction
Cronbach‟s Alpha
N of Items
.867
4
Table E.3: Cronbach‟s alpha of Customer Satisfaction
CSA1
CSA2
CSA3
CSA4
Scale Mean if Item
Scale Variance if
Corrected ItemCronbach‟s Alpha
Deleted
Item Deleted
Total Correlation
if Item Deleted
21.86
9.884
.725
.829
22.06
10.893
.713
.833
22.03
10.262
.718
.831
22.59
10.903
.724
.829
Table E.4: Item-Total Statistics of Customer Satisfaction
Service Quality
Cronbach‟s Alpha
N of Items
.876
5
Table E.5: Cronbach‟s alpha of Service Quality
SQA1
SQA2
SQA3
SQA4
SQA5
Scale Mean if Item
Scale Variance if
Corrected ItemDeleted
Item Deleted
Total Correlation
30.70
13.103
.684
30.24
13.251
.773
30.51
12.985
.721
30.40
13.624
.729
31.02
14.755
.636
Table E.6: Item-Total Statistics of Service Quality
110
Cronbach‟s Alpha
if Item Deleted
.857
.834
.847
.845
.866
Corporate Image
Cronbach‟s Alpha
N of Items
.919
4
Table E.7: Cronbach‟s alpha of Corporate Image
CIM1
CIM2
CIM3
CIM4
Scale Mean if Item
Scale Variance if
Corrected ItemDeleted
Item Deleted
Total Correlation
24.01
7.899
.857
24.26
7.335
.772
24.08
7.333
.841
23.98
7.670
.803
Table E.8: Item-Total Statistics of Corporate Image
Cronbach‟s Alpha
if Item Deleted
.884
.912
.886
.899
Customer Trust
Cronbach‟s Alpha
N of Items
.941
4
Table E.9: Cronbach‟s alpha of Customer Trust
CTR1
CTR2
CTR3
CTR4
Scale Mean if Item
Scale Variance if
Corrected ItemDeleted
Item Deleted
Total Correlation
22.56
11.645
.860
22.55
11.482
.852
23.04
10.974
.850
22.99
10.681
.877
Table E.10: Item-Total Statistics of Customer Trust
Cronbach‟s Alpha
if Item Deleted
.923
.925
.920
.917
Switching Costs
Cronbach‟s Alpha N of Items
.897
4
Table E.11: Cronbach‟s alpha of Switching Cost
SWC1
SWC2
SWC3
SWC4
Scale Mean if Item Scale Variance if
Corrected ItemCronbach‟s Alpha if
Deleted
Item Deleted
Total Correlation
Item Deleted
19.38
21.980
.704
.894
19.16
22.398
.771
.867
18.99
21.447
.850
.838
19.04
22.350
.766
.868
Table E.12: Item-Total Statistics of Switching Costs
111
Appendix F: The Trust Equation
Figure F.1: The Trust Equation
Trust is the sum of Credibility, Reliability and Intimacy, divided by SelfOrientation.
The Trust Score of BIDV‟s branches and transaction offices in Lam Dong Province:.
TRUST SCORE = (Credibility + Reliability + Intimacy) / (1 – Self-Interest)
TRUST SCORE = (7.83 + 7.82 + 7.34)/ (1-7.39) = 8.81
112
Appendix G: The result of EFA in 4 rounds
ROUND 1
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
Approx. Chi-Square
Bartlett‟s Test of Sphericity
df
Sig.
Table G.1: Round 1 – KMO and Bartlett‟s Test
Initial Eigenvalues
.920
9281.662
300
.000
Extraction Sums of Squared Loadings
Factor
Rotation Sums of
Squared Loadingsa
% of
Cumulative
% of
Cumulative
Total
Variance
%
Variance
%
1
11.457
45.828
45.828
11.167
44.667
44.667
2
3.044
12.175
58.003
2.753
11.011
55.678
3
1.905
7.619
65.622
1.612
6.446
62.124
4
1.443
5.771
71.392
1.168
4.673
66.797
5
1.134
4.537
75.929
.916
3.664
70.460
6
.760
3.041
78.970
7
.582
2.327
81.297
8
.510
2.040
83.336
9
.484
1.934
85.271
10
.445
1.781
87.052
11
.379
1.517
88.569
12
.343
1.370
89.939
13
.314
1.257
91.196
14
.301
1.202
92.398
15
.276
1.106
93.504
16
.274
1.095
94.599
17
.266
1.065
95.664
18
.215
.861
96.525
19
.201
.804
97.329
20
.182
.726
98.056
21
.163
.652
98.708
22
.151
.605
99.313
23
.135
.539
99.853
24
.025
.099
99.951
25
.012
.049
100.000
Extraction Method: Principal Axis Factoring.
When factors are correlated, sums of squared loadings cannot be added to obtain a total variance.
Total
Table G.2: Round 1 – Total Variance Explained
1
CSA4
CSA3
SQA3
CSA1
CSA2
SQA2
SQA4
SQA5
SQA1
CIM1
Factor
3
2
.796
.791
.783
.772
.768
.756
.740
.712
.694
.214
.897
113
4
5
Total
9.425
7.838
7.608
8.007
2.994
CIM3
.867
CIM2
.823
CIM4
.809
CLO3
.907
CLO4
.795
CLO1
.751
CLO2
.746
CTR4
CTR3
CTR1
CTR2
SWC3
SWC4
SWC2
SWC1
Extraction Method: Principal Axis Factoring.
Rotation Method: Promax with Kaiser Normalization.
Rotation converged in 6 iterations.
.969
.941
.679
.678
.928
.824
.820
.751
Table G.3: Round 1 - Pattern Matrix
ROUND 2
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
Approx. Chi-Square
Bartlett's Test of Sphericity
df
Sig.
.918
8872.857
276
.000
Table G.4: Round 2 - KMO and Bartlett's Test
Initial Eigenvalues
Factor
Total
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
10.988
3.043
1.789
1.440
1.118
.656
.573
.488
.478
.439
.371
.315
.310
.287
.276
.273
.264
.204
.185
.177
.153
.135
.025
.012
% of
Variance
45.785
12.681
7.455
5.999
4.658
2.734
2.388
2.035
1.993
1.830
1.546
1.311
1.292
1.195
1.152
1.136
1.100
.851
.770
.736
.639
.562
.103
.051
Cumulative
%
45.785
58.466
65.921
71.920
76.577
79.311
81.699
83.734
85.726
87.557
89.103
90.414
91.706
92.901
94.052
95.188
96.288
97.139
97.909
98.645
99.284
99.846
99.949
100.000
Extraction Sums of Squared Loadings
Total
10.706
2.753
1.491
1.175
.912
% of
Variance
44.607
11.469
6.213
4.896
3.800
Cumulative
%
44.607
56.076
62.289
67.185
70.985
Table G.5: Round 2 - Total Variance Explained
114
Rotation Sums of
Squared Loadingsa
Total
8.892
7.643
7.480
7.866
2.982
1
SQA3
CSA1
CSA3
SQA2
SQA4
CSA2
CSA4
SQA1
CIM1
CIM3
CIM2
CIM4
CLO3
CLO4
CLO1
CLO2
CTR4
CTR3
CTR2
CTR1
SWC3
SWC4
SWC2
SWC1
Factor
3
2
.825
.807
.803
.781
.773
.727
.717
.667
4
5
.202
.899
.869
.823
.810
.937
.812
.771
.764
.989
.961
.673
.672
.928
.824
.819
.752
Extraction Method: Principal Axis Factoring.
Rotation Method: Promax with Kaiser Normalization.
a. Rotation converged in 6 iterations.
Table G.6: Round 2 - Pattern Matrix
ROUND 3
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
Approx. Chi-Square
Bartlett's Test of Sphericity
df
Sig.
.915
8475.993
253
.000
Table G.7: Round 3 - KMO and Bartlett's Test
Initial Eigenvalues
Factor
Total
1
2
3
4
5
6
7
8
9
10
11
10.486
3.043
1.674
1.439
1.111
.573
.545
.486
.472
.437
.368
% of
Variance
45.593
13.231
7.277
6.256
4.829
2.492
2.368
2.111
2.051
1.900
1.601
Cumulative
%
45.593
58.824
66.101
72.357
77.186
79.678
82.045
84.156
86.207
88.108
89.709
Extraction Sums of Squared Loadings
Total
10.211
2.752
1.372
1.180
.906
115
% of
Variance
44.394
11.966
5.967
5.130
3.939
Cumulative
%
44.394
56.360
62.327
67.457
71.396
Rotation Sums of
Squared Loadingsa
Total
8.250
7.419
7.241
2.974
7.716
12
.311
1.354
91.063
13
.309
1.344
92.407
14
.287
1.246
93.653
15
.275
1.196
94.849
16
.267
1.159
96.008
17
.221
.962
96.970
18
.188
.819
97.790
19
.177
.768
98.558
20
.159
.690
99.248
21
.136
.591
99.838
22
.025
.108
99.947
23
.012
.053
100.000
Extraction Method: Principal Axis Factoring.
a. When factors are correlated, sums of squared loadings cannot be added to obtain a total variance.
Table G.8: Round 3 - Total Variance Explained
1
SQA3
CSA1
CSA3
SQA4
SQA2
CSA4
SQA1
CIM1
CIM3
CIM2
CIM4
CLO3
CLO4
CLO2
CLO1
SWC3
SWC4
SWC2
SWC1
CTR4
CTR3
CTR2
CTR1
Factor
3
2
.844
.813
.811
.802
.784
.664
.600
4
5
.221
.900
.869
.823
.809
.958
.822
.778
.775
.927
.824
.819
.752
.987
.965
.687
.685
Extraction Method: Principal Axis Factoring.
Rotation Method: Promax with Kaiser Normalization.
Rotation converged in 6 iterations.
Table G.9: Round 3 - Pattern Matrix
ROUND 4
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
Approx. Chi-Square
Bartlett's Test of Sphericity
df
Sig.
Table G.10: Round 4 - KMO and Bartlett's Test
116
.909
8182.350
231
.000
Initial Eigenvalues
Factor
% of
Variance
45.599
13.828
7.097
6.529
5.026
2.582
2.313
2.184
2.051
1.831
1.532
1.415
1.354
1.254
1.214
1.007
.862
.804
.730
.618
.113
.056
Total
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
10.032
3.042
1.561
1.436
1.106
.568
.509
.481
.451
.403
.337
.311
.298
.276
.267
.222
.190
.177
.161
.136
.025
.012
Extraction Sums of Squared Loadings
Cumulative
%
45.599
59.427
66.524
73.053
78.079
80.661
82.975
85.159
87.210
89.041
90.573
91.987
93.341
94.595
95.809
96.817
97.679
98.483
99.213
99.831
99.944
100.000
Total
9.766
2.751
1.263
1.182
.906
% of
Variance
44.390
12.506
5.740
5.372
4.119
Rotation Sums of
Squared Loadingsa
Cumulative
%
44.390
56.896
62.636
68.008
72.126
Table G.11: Round 4 - Total Variance Explained
1
SQA3
SQA4
CSA1
SQA2
CSA3
SQA1
CIM1
CIM3
CIM2
CIM4
CLO3
CLO4
CLO2
CLO1
SWC3
SWC4
SWC2
SWC1
CTR4
CTR3
CTR2
CTR1
Factor
3
2
4
5
.849
.815
.812
.800
.784
.567
.903
.870
.830
.815
.977
.823
.791
.778
.928
.825
.819
.751
.999
.979
.674
.672
Table G.12: Round 4 - Pattern Matrix
117
Total
7.690
7.249
6.996
2.969
7.503
SERVICE QUALITY – Cronbach’s Alpha
Cronbach's Alpha
N of Items
.907
6
Table G.13: EFA‟s result - Cronbach‟s Alpha of Service Quality
Scale Mean if Item
Deleted
SQA1
SQA2
SQA3
SQA4
CSA1
CSA3
38.64
38.18
38.44
38.34
38.50
38.67
Scale Variance if
Item Deleted
25.854
25.677
25.003
26.022
23.341
24.486
Corrected ItemTotal Correlation
Cronbach's Alpha if
Item Deleted
.663
.781
.764
.757
.789
.728
Table G.14: EFA‟s result - Item-Total Statistics of Service Quality
118
.902
.886
.888
.890
.884
.893
Appendix H: The result of MGSEM
EDUCATION LEVEL:
Invariant model of Low/Medium/High Income group
Variant model of Low/Medium/High Income group
Figure G.1: MGSEM result – invariant model and variant model of Low/Medium/High Income group
119
P-Value = 0.799 > 0.05
120
Appendix J: The result of One-Way ANOVA Testing
EDUCATION LEVEL
Customer Loyalty
Levene Statistic
.436
df1
df2
3
373
Sig.
.727
Table J.1: Education level - Test of Homogeneity of Variances
Customer Loyalty
Between Groups
Within Groups
Total
Sum of Squares
35.137
315.572
350.710
df
Mean Square
11.712
.846
3
373
376
F
13.844
Sig.
.000
Table J.2: Education level – ANOVA
INCOME
Customer Loyalty
Levene Statistic
.461
df1
3
df2
373
Sig.
.710
Table J.3: Income - Test of Homogeneity of Variances
Customer Loyalty
Between Groups
Within Groups
Total
Sum of Squares
18.865
331.845
350.710
df
Mean Square
3
6.288
373
.890
376
Table J.4: Income - ANOVA
121
F
7.068
Sig.
.000
[...]... branches and transaction offices in Lam Dong Province 5 Scope And Limitation This research was conducted from March 2013 to August 2013, in Lam Dong Province and Ho Chi Minh City There are three kinds of customers in BIDV including individual customers, corporate customers and financial institution This research focuses on determining the loyalty of individual customers in retail banking of eight branches. .. answer the following question: What factors that influence the customer loyalty in BIDV’s branches and transaction offices in Lam Dong province? 4 Research Objective Here are two main objectives of this research To define the factors that influence customer loyalty of BIDV‟s branches and transaction offices in Lam Dong Province; To propose recommendations to enhance customer loyalty of BIDV‟s branches. .. branches and transaction offices of BIDV in Lam Dong Province The in- depth interviews with experienced managers of BIDV‟s branches and transaction offices in Lam Dong Provinces who understand their own customers more 7 than anyone can not be conducted because of the time limitation Therefore, the recommendations of this research cannot be proposed specifically for each banking business of branches and transaction. .. and transactions of other banks were established and have developed, including Asia Commercial Bank (ACB), DongA Bank (EAB), Vietnam International Bank (VIB), Eximbank, Techcombank, Sacombank, and etc In sum, a significant gap exists in BIDV‟s branches and transaction offices in Lam Dong Province which should be investigated in order to propose highly effective 6 solutions and wise strategies what leads... mobilization compared to 45% in 2011.There is information on the BIDV‟s web site (http://bidv.com.vn) 1.3.2 BIDV’s network in Lam Dong Province Branch/ Transaction Office Lam Dong Branch - Chi Lang Transaction office - Da Lat Transaction office - Don Duong Transaction office - Duc Trong Transaction office Bao Loc Branch - Bao Lam Transaction office - Di Linh Transaction office Address 30 Tran Phu, Da Lat... environment of the bank industry in Lam Dong Province is increasingly competitive According to information from The State Bank – Lam Dong Branch, before 2000, there were just few branches and transaction offices of state-owned banks, such as: Vietinbank, Agribank and BIDV However, from 2000 to now, the banking industry has undergone drastic changes in the quantity of credit institutions system Many branches and. .. and indirect effects on customer loyalty (Olsen, 2002) These researches have also indicated that service quality influences organizational performance, including increasing sales profit, remaining competitive advantage, improving current customer relations, attracting new potential customers, winning market share, enhancing corporate image and finally promoting customer loyalty (Caruana, 2002; Duncan... banking management techniques and the adoption of a customer- focused retail banking model at every branch, expanding and improving the quality of traditional and modern distribution channels, and upgrading the IT infrastructure and platform As the result, by the end of 2012, retail funding reached VND 179,128 billion marking an impressive year over year increase of 38.64% and accounted for 49.76% of total... the main purpose of this research is to investigate the factors that influence customer loyalty Design/methodology/approach: In the research a causal modeling approach was used and a conceptual model was proposed after an extensive review of the literature Data was collected from 377 habitual customers of BIDV‟s branches and transaction offices in Lam Dong Province Descriptive statistics, reliability... transaction office of BIDV in Lam Dong Province 6 Significance Of The Study It is expected to find out which factors improve customer loyalty in retail banking By determining these factors, the research can be used for a reference aim and reliability suggestions in order to enhance the customer loyalty of BIDV‟s branches and transaction offices in Lam Dong Province 7 Structure Of Thesis This research .. .DETERMINANTS OF CUSTOMER LOYALTY IN RETAIL BANKING A case study of BIDV’s branches and transaction offices in Lam Dong Province In Partial Fulfillment of the Requirements of the Degree of MASTER... individual customers in retail banking of eight branches and transaction offices of BIDV in Lam Dong Province The in- depth interviews with experienced managers of BIDV‟s branches and transaction offices. .. network in Lam Dong Province Branch/ Transaction Office Lam Dong Branch - Chi Lang Transaction office - Da Lat Transaction office - Don Duong Transaction office - Duc Trong Transaction office Bao
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