RESEARCH PROJECT (BMBR5103) THE FACTORS AFFECTING CUSTOMERS’ SATISFACTION IN VNPOST CORPORATION STUDENT’S FULL NAME : PHUNG VIET PHUONG STUDENT ID : CGS00019880 INTAKE : September, 2015 ADVISOR’S NAME & TITLE : DR BUI PHI HUNG, DBA F Advisor’s assessment Advisor’s signature ACKNOWLEDGEMENT First of all, I wish to express my most sincere gratitude and appreciation to Dr Bui Phi Hung for his initial orientation, valuable guidance, patience and encouragement throughout the development of this project I would also like to send my greatly appreciation to staffs of VNPost Express Joint Stock Company (VPC), who help me conducting the delivery and collection questionnaires by hand in shortest time as they could Third, I would like to thank all lecturers who transmitted the uncountable fund and invaluable of knowledge via all modules of MBA program designed by Open University Malaysia as well as great supports of HUTECH’s admin team I could not fulfil this MBA program without them Finally, I heartily thank to my family for their great supports and on-going encouragements I could not complete this research project without them ABSTRACT Service quality has become one of the top priorities in business nowadays because it remains customer satisfaction and loyalty, growth and profitability Factors affecting customers’ satisfaction are extremely important for businesses in finding way to fulfill satisfaction to customers thereby gaining success in sales Customer’s satisfaction appears only when the company meets the expectations and needs of customers This research reviewed main factors, including service quality, pricing and payment, distribution channel, and diversifing services, from which affected customers’ satisfaction in VNP through 150 delivery and collection of questionnaires Most of respondents, who are VNP’s customers, are companies Data collected were analyzed using SPSS 22 for Window i.e Cronbach’ alpha coefficients, factor analysis, and multiple linear regression analysis The result indicates that service quality, pricing and distribution channel are good predictors of customers satisfaction, in which distribution channel is the most important contribution, while service diversification does not meet the recommended standards of analysis However, all these factors only meet customers’ satisfaction in medium level Managers should think over to improve service quality, then lead to satisfy customers in higher level in case VNP want to survise in today dynamic market TABLE OF CONTENT CHAPTER - Introduction 1.1 Company brief introduction 1.2 Research problem statement 1.3 Purpose of the research 1.4 Scope of the research 1.5 Significance of research 1.6 Limitation of the research CHAPTER – Literature review 2.1 Definition of construct – The attributes of ECS 2.2 Factors influencing on customers’ satisfaction 2.2.1 Customers’ satisfaction 2.2.2 Customers’ satisfaction and its antecedents 2.2.2.1 The relationship between service quality and customers’ satisfaction 2.2.2.2 The relationship between price and payment and customers’ satisfaction 2.2.2.3 The relationship between distribution channel and customers’ satisfaction 10 2.2.2.4 The relationship between service diversification and customers’ satisfaction 11 2.3 How to measure customers’ satisfaction 12 CHAPTER – Research methodology 15 3.1 Data collection 15 3.2 Research method 16 3.3 Data analysis 17 CHAPTER – Research finding and analysis 18 4.1 Information of customers 18 4.2 Reliability test 19 4.3 Factor analysis 25 4.3.1 Factor analysis of Service Quality 26 4.3.2 Factor analysis of Price and Payment 27 4.3.3 Factor analysis of Distribution Channel 28 4.3.4 Factor analysis of Service Diversification 29 4.4 Result of study 31 4.4.1 Relationship between customers’ satisfaction and its antecedents 32 4.4.2 Strongest factor impacting on customers’ satisfaction 34 CHAPTER – Discussion and recommendations 36 5.1 Discussion 36 5.2 Recommendations 37 5.3 Limitations of study and further research 40 REFERENCES 42 APPENDIX 1: Questionnaire 46 APPENDIX 2: Presentation of business research 50 LIST OF TABLES TABLE 4.1 – Type of company 18 TABLE 4.2 – Size of company 19 TABLE 4.3 – Results of reliability of service quality 20 TABLE 4.4 – Results of reliability test of pricing and payment 21 TABLE 4.5 – Results of reliability test of distribution channel 22 TABLE 4.6 – Reliability test of service diversification 23 TABLE 4.7 – The structure of hypotheses after reliability test 25 TABLE 4.8 – Final component matrix of factor analysis of service quality 26 TABLE 4.9 – Final component matrix of factor analysis of price and payment 27 TABLE 4.10 – Component matrix of factor analysis of distribution channel 28 TABLE 4.11 – Component matrix of factor analysis of service diversification 29 TABLE 4.12 – Summary of factor analysis 30 TABLE 4.13 – Model summary of customers’ satisfaction 32 TABLE 4.14 – Coefficients of customers’ satisfaction (CS) 32 LIST OF FIGURES FIGURE – Measuring model for customers’ satisfaction 12 FIGURE – Theoretical framework of this research 13 FIGURE – Distribution of questionaire items 16 ABBREVIATION BSO: Breadth of service offering CCI: Call center for handling of interrogation CS: Customers’ satisfaction DC: Distribution channel DHL: DHL Express Corporation ECS: Express courier service EMS: Express Mail Service FedEx: Federal Express Corporation IIA: Investment in asset INC: International and national coverage IOS: Integration of service OTD: On-time delivery PAQ: Price appropriating with quality PBE: Pricing attaching to the brand and experience PP: Price and Payment SD: Service diversification SSS: Safety and security of shipment SQ: Service quality TNT: TNT Express Corporation ROS: Reliability of service UPS: United Parcel Service VPC: Vietnam Post Corporation CHAPTER – INTRODUCTION 1.1 Company prief introduction Vietnam Post Corporation (VPC) was established on the basis of implementing the pilot Project on establishing Vietnam Posts and Telecommunications Group (VNPT) in 2005 VPC has 67 dependent units (including 63 provincial and municipal posts, National Newspapers Distribution Company, Datapost Company, VNPost Logistics Company, Training Centre); 02 one-member limited liability companies with 100% of the charter capital held by the VPC; 03 joint-stock companies with more than 50% of charter capital held by VPC and 08 associated companies Currently, Vietnam Post is a member of the Universal Postal Union (UPU) and has close cooperation relations with almost all countries in the world They are striving to become a leading enterprise to provide post and delivery services, Finance and Retailing services in Vietnam and to be the best choice for customers 1.2 Research problem statement Express courier service (ECS) is indispensable in business activities all over the world It helps companies cuting down operating and inventory costs, and moreover, ECS plays an important role in affecting the capability of most of companies’ operations such as sales, production, customer support functions, logistics and storages Vietnam’s express industry has grown significantly in recent years thanks to the opening and booming of Vietnam economy The growth rate of courier express market in Vietnam would stay stabilize at 25%-30% in upcoming years (D&T Express, 2011) Moreover, Vietnam became the official member of World Trade Organization (WTO) since 2007; thereby leading to growth with the rapid pace of In addition, Chapter mentioned the beta (or B) in a multivariate regression analysis as coefficients to assess the contribution of these factors on CS Therefore, some recommendations are provided as follows: First, VPC’s distribution channels only covers more than 50 countries and regions, while the range of competitors such as UPS, DHL, FedEx is more than 200 countries and territories This explains why the distribution of the VPC is the most contributing factor in CS, but the average level Therefore, the management of the VPC continues to develop distribution channels by partnering with competitors worldwide in the supply, especially in countries which have no representatives of VPC Conversely, VPC will support domestic rivals offered in Vietnam In fact, VPC has supported effective partners in the distribution of goods in Vietnam However, VPC did not take advantage of this strength to improve service quality For example, VPC can cooperate with UPS in the supply in the United State and the Americas, with DHL in Asia Pacific, or with FedEx in Europe etc Second, brand experience and will support the price in customer satisfaction In fact, brand and price of VPC can not compete with rivals While the competitors' prices are flexible, and the level of prices can range from 10% to 55% depending on the volume of services used, prices are rigid and VPC epending on the volume of using service, price of EMS is rigidly and depend on pricing policies of Vietnam Post which is state company This leads that the EMS price is higher than competitors' prices in many cases It will reduce the competitiveness of the EMS is the result of the average level of satisfaction Thus, VPC 'designers should think about the size of the price and can make changes to meet customers' expectations and needs It will help improve service quality and increasing levels of CS in VPC For example, can use EMS freight consolidation provides a transportation option in an attempt to combine small shipments in a similar geographical area into a single shipment for large geographical areas order to reduce transportation costs per unit to the customer (Min, 1996) This will support VPC to improve service quality, improve competitiveness and meet customer expectations Third, the quality of VPC service is questionable Reliability of service is the best contribution for the quality of service, and are related to human resources Each employee courier should be seen as the face of direct services because they deal with, care for and build relationships with customers rather than selling everyday people, so they deserve to be respected and higher salaries It is not surprising that a policy; which encourages employees to express mental, physical and responsibilities; will lead to CS, and gain more benefits in the long term Fourth, although diversified services not meet the standards of the multiple regression analysis, but does not mean it is not important in the business operations of the company In fact, VPC service not really diverse, so diversity removal services from the regression analysis is understandable Therefore, in the near future, the managers should design more value-added service, a party to minimize risks and other parties to meet the needs and expectations of customers, while enhancing CS leads to maintain customer loyalty In conclusion, the only VPC services to meet customers in average compared with competitors, VPC market share is decreasing over time, and the competitiveness of VPC is far less than rivals such as UPS, DHL and FedEx Therefore, the management of VPC need much effort to significantly change the quality of services in the context of the current economic integration Cooperation or alliances with rivals which are the essential elements that should be considered on mutual benefits, and it is a growing trend in the global economy today, and VPC without exception 5.3 Limitations of study and further research As with any research, because the duration and lack of understanding of the authors, this study can not avoid the limitations of it can be seen as a precondition for further study Therefore, some restrictions may be recognized by the authors as follows: First, this study focuses on a narrow area in the city, especially in some central districts that are not fully representative for VPC customers overall Moreover, in conditions permitting, the sample size is 150 respondents with no probabilistic technique is not that great and totally reliable enough to empirical research In addition, the delivery and collection by hand questions to answer leading questions careless Therefore, in order to look better overall, this study should be conducted in a larger waters, and it is also the new research direction in the future Second, this study only established in the framework of a number of criteria means that service quality, pricing, distribution channels and service diversification While other criteria, which may affect the CS, not taken into account in this study means promotion, human resources, technology, etc Therefore, the reflection of the research results is completely full and quite subjective This is also a problem to be addressed in further studies Third, this study used Cronbach alpha coefficients to assess the measure, explore factor analysis, and multivariate regression analysis to test the hypothesis Meanwhile, other modern tools mentioned in chapter as GLOVAL scale, SITEQUAL, or SQ awareness BANKZOT not considered by the author Whether one of them will be more suitable, and it is a limitation of this study Fourth, the results of multiple regression were eliminated hypothesis H4 This reflects that either answer is not enough knowledge about the industry or the ECS questions suggested by the authors is unclear and confusing This is a problem, and the need to overcome in further research Chapter summary Some conclusions are mentioned relevant to four objective and five hypotheses to clarify the issues of current EMS In addition, some recommendations are also offered with its aim to develop the strengths and overcome the weaknesses in business activities of EMS Besides the author notes that the factors affecting to CS always change over the time depending on the expectations and needs of customers, especially in the current context of rapidly changing world Therefore, a further research for the same issue of this study is truly necessary REFERENCES Altinay, L and Paraskevas, A (2008) 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Retrieved April 7, 2012, from http://www.wisegeek.com/what-is-customer-loyalty.htm 41 Yin, R.K (2003) Case Study Research: Design and Methods (3rd) London: Sage 42 Yoo, B and Donthu, N (2001) Developing a Scale to Measure the Perceived Quality of an Internet Shopping Site (Sitequal) Quarterly Journal of Electronic Commerce, (1) , 31-46 43 Zeithaml, V A., & Bitner, M J (2003) Services Marketing: Integrating Customer Focus Across the Firm New York: McGraw-Hill APPENDIX 1: QUESTIONNAIRE Dear Sir/ Madam, As part of the requirements of the Masters program in Business Administration at the Open University Malaysia and University Hutech, the purpose of this survey was "to determine the factors affecting customers’ satisfaction and loyalty in Vietnam express courier industry "with a desire to serve our customers better Please help me to complete this survey Any information you provide will be handled in strictly confidence I really appreciate your time and effort Best regards, Phung Viet Phuong (Mr.) Tel: 0979.75.27.22 E-mail: vphuong.phung@yahoo.com.vn Section A: Company information – Which type is your company? (Only one choice (√) on the list) Vietnamese company Foreign company Bank Representative office Law office Shipping agency Consulate Others 2- Which size is your company? (Only one choice (√) on the list) From to 10 staffs From 10 to 30 staffs From 31 to 100 staffs Over 100 staffs 2- How much is your capital? (Only one choice (√) on the list) Under billion VND From billion to 10 billions VND From over 10 billions to 30 billions VND From over 30 billions to 100 billions VND Over 100 billions Section B: The factors impacting on satisfaction and loyalty Do you agree with below statements impacting on customer satisfaction and loyalty in Express courier service? Please stick (√) only one choice for each question in the list below: Strongly disagree Disagree Neutral Agree Strongly agree No Encode Content Service quality OTP On-time pick up 5 OTD On-time delivery ROS Reliability of service 5 Willingness to serve REC Reliable courier 11 FRC Friendly courier 12 SQ Service quality SSS CCI WNS 10 Safety and security of shipment Call center for handling of interrogation and proof of delivery Price and payment 13 FPS Flexible pricing by volume of using service 14 PAQ Pricing appropriating with quality 15 PBE 16 TPP Third-party payment 17 TLP Term of late payment 18 OLP Online payment 19 PP Price and payment Pricing attaching to the brand and experience of service providers Distribution channels 20 IIA Investment in asset 21 IIS Investment in information system 22 INC International and national coverage 23 BSO Breadth of service offering 24 ESF Extension of service facilities 25 IOS Integration of service 26 DC Distribution channel Service diversification 27 DDS Door-to-door service 28 DPS Door to airport/port service 29 PPS Airport/port to airport/port service 30 PDS Airport/port to door service 31 SD 32 CS Service diversification Customers’ satisfaction APPENDIX 2: PRESENTATION OF BUSINESS RESEARCH ... for businesses in finding way to fulfill satisfaction to customers thereby gaining success in sales Customer’s satisfaction appears only when the company meets the expectations and needs of customers. .. in this industry due to the limitations on the quality of service and value added services So, by indentifying factors affecting customer satisfaction in courier services in HCM City, the study... (ECS) is indispensable in business activities all over the world It helps companies cuting down operating and inventory costs, and moreover, ECS plays an important role in affecting the capability