Evaluating customer satisfaction among marketing strategy of website vatgia com

It may be related to an on-going business relationship or with price-performance, satisfaction with the time or service delivery or the service experience, service context and satisfacti

A THESIS SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTSFOR THE DEGREE OF BACHELOR OF BUSINESS ADMINISTRATION

(INTERNATIONAL STANDARD PROGRAM)

Hanoi – May, 2017

VNU- UNIVERSITY OF ECONOMICS AND BUSINESS

EVALUATING CUSTOMER SATISFACTION AMONG MARKETING STRATEGY OF WEBSITE

VATGIA.COM

Supervisor’s name: Dr Nguyen Thu Ha

Student’s name: Duong Hue Thu

Student ID: 13050397

Intake: QH2013 – E

Program: International Standard

Hanoi – May 2017

TABLE OF CONTENT

BACHELOR’S THESIS OF BUSINESS ADMINISTRATION 2013-2017 i

VNU- UNIVERSITY OF ECONOMICS AND BUSINESS i

TABLE OF CONTENT i

ACKNOWLEDGEMENT iii

LIST OF FIGURES iv

LIST OF TABLES v

ABSTRACT vi

INTRODUCTION 1

1.1 Research background 1

1.2 Problem statement and research objective 1

1.3 The research objectives: 2

1.4 Methodology 2

1.5 Research structure 3

CHAPTER 1: LITERATURE REVIEW 4

1.1 MARKETING STRATEGY 4

1.1.1 DEFINITION 4

1.1.2 WHY SHOULD THE COMPANY CREATE A MARKETING STRATEGY?.4 1.1.3 7PS MARKETING STRATEGY 5

1.2 CUSTOMER SATISFACTION 11

1.2.1 CONCEPT OF CUSTOMER SATISFACTION 11

1.2.2 WHY IS CUSTOMER SATISFACTION IMPORTANT TO BUSINESSES? 16 1.2.3 CUSTOMER SATISFACTION MODELS 18

CHAPTER 2: RESEARCH METHODOLOGY 22

2.1 RESEARCH CONTEXT 22

2.1.1 OVERVIEW OF E-COMMERCE MARKET IN VIETNAM 22

2.1.2 OVERVIEW OF WEBSITE VATGIA.COM 27

2.1.3 THE MARKETING STRATEGY OF WEBSITE VATGIA.COM 33

2.2 RESEARCH SAMPLE 41

2.3 RESEARCH FRAMEWORK 42

2.4 RESEARCH SURVEY 43

2.5 MEASUREMENTS 45

CHAPTER 3: ANALYSIS 46

3.1 DATA COLLECTION 46

3.1.1 DESCRIPTIVE STATISTICS ABOUT FACTORS OF MARKETING 7PS AFFECTED ON CUSTOMER SATISFACTION 48

3.1.2 PROS AND CONS OF MARKETING STRATEGIES 60

CHAPTER 4: DISCUSSIONS 64

4.1 SUGGESTIONS TO IMPROVE SERVICE THE ELEMENTS OF MKT STRATEGY AND CUSTOMER SATISFACTION AT VATGIA.COM 64

The weaknesses have pointed out in the former, this chapter will suggest some solutions to improve each element of marketing strategy 64

4.1.1 SOLUTIONS FOR PRODUCT STRATEGY 64

4.1.2 SOLUTIONS FOR PRICE STRATEGY 64

4.1.3 SOLUTIONS FOR PLACE STRATEGY 65

4.1.4 SOLUTION FOR PROMOTION STRATEGY 65

4.1.5 SOLUTIONS FOR PEOPLE STRATEGY 66

4.1.6 SOLUTIONS FOR PROCESS STRATEGY 67

4.1.7 SOLUTIONS OF PHYSICAL EVIDENCE STRATEGY 68

4.2 EXPERIENCE LESSON FROM VATGIA.COM 68

4.2.1 WEBSITE OPTIMIZATION AND DEVELOPMENT OF INFORMATION SYSTEMS, PRODUCTS AND SERVICES RELIABLE 68

4.2.2 ALWAYS INNOVATE AND ENHANCE THE SYSTEM 68

4.2.3 INVESTMENT FOR MARKETING ACTIVITIES 69

4.2.4 ATTACHMENT TO CUSTOMER’S BENEFIT 69

CONCLUSIONS 71

REFERENCES 72

APPENDICES: QUESTIONNAIRE 74

Secondly, it is pleasure to thank Viet Nam Price Joint Stock Company and all of itsstaffs, who helped me a lot in my internship period and provided me details aboutthe company as well as support me in data collection

I am also very grateful for many participants who have spent their time for doing

my questionnaire carefully

Last but not least, thanks a lot to Faculty of Business Administration, University ofEconomics and Business, Vietnam National University for helping me in manyways during whole period of doing this thesis

Student,

Duong Hue Thu

LIST OF FIGURES

Figure 1 1 The 7 Ps Marketing mix 7

Figure 1 2 ACSI Model 19

Figure 1 3 European Customer Satisfaction Index – ECSI 21

Figure 2 1 Market share of Vietnam EC and its Growth rate 23

Figure 2 2 Major EC sites in VN 27

Figure 2 3 The Research Framework 42

Figure 3 1 Product Strategy 48

Figure 3 2 The basic benefit packages 50

Figure 3 3 The enhanced benefit packages 50

Figure 3 4 Price Strategy 51

Figure 3 5 Place Strategy 52

Figure 3 6 Promotion Strategy 53

Figure 3 7 Process Strategy 56

Figure 3 8 People Strategy 57

Figure 3 9 Physical Evidence Strategy 58

Figure 3 10 Guest Lounge of VNP Company 59

LIST OF TABLES

Table 2 1 Four types of online shopping sites in VN 24

Table 2 2 Development History of VNP Group 28

Table 2 3 The structure of survey questionnaire 43

Table 2 4 Five-point Likert scale of measurement 45

Table 3 1 The Characteristics of Gender 46

Table 3 2 The Characteristics of Age 46

Table 3 3 The Characteristics of Marital Status 47

Table 3 4 The Characteristics of Income 47

Table 3 5 The Characteristics of Life of Contract 47

Table 3 6 Comparison about services between Vatgia and rivals 49

Table 3 7 Comparison about price between Vatgia.com and rivals 52

Table 3 10 Comparison about website between Vatgia and business rivals (Data at 5/12/ 2016) 54

Table 3 8 Mean of Customer satisfaction 59

Table 3 9 Descriptive statistics of 7Ps Marketing strategy 60

This thesis examines the booth service at Viet Nam Price Joint Stock Company,carrying out the survey to assess perceived service quality of Website Vatgia.com,and then research the relationship between Marketing Strategy and customersatisfaction on booth service

The researcher attempts to investigate how 7Ps Marketing Strategy applied atVatgia.com Seven elements consist of Product, Price, Place, Promotion, People,Process and Physical Evidence It seems that Marketing Department handlesflexibly and regularly innovate marketing plan according to this model Websitevatgia.com has been proven the success of 7Ps Marketing Strategy specifically inpractice

In general, direct customers who vatgia.com provides booth services are likely to bebusinesses and suppliers They tend to select Vatgia.com as a reliable channel tobroaden their market share and explore potential customers The proposed model istested on a sample of 77 customers randomly at Vatgia.com Almost the evaluations

of customer about the strategies of Vatgia.com are positive responds Thiscontributed to create the motivation and cultivate the innovation spirit for not onlythe Board of directors but also the employees entirely

In addition, based on these findings, the thesis also gives some suggestions forVatgia.com to further improve service quality and customer satisfaction level

1.1 Research background

One of the grow in areas of E-commerce is Online Buying More and moreconsumers are turning to the World Wide Web for their shopping needs, whichgives them access to either local or international products with just a click ofthe mouse That has built the benefit for 2 sides – seller and buyer

E-commerce is the buying and selling of the goods and services online; internet isthe best source to use this tool Today the amount of trade that is conductedelectronically using e-commerce has increased with a wide spread usage of internetand technology In Vietnam, it started as buying of online services from othercountries virtually and it involved a complete trade in which service was giventhrough internet and money was transferred through credit cards to othercountry’s firm The internet is being developed rapidly since last two decades,and with relevant digital economy that is driven by information technologyalso being developed worldwide The detailed product information andimproved service attracts more and more people and changed their consumerbehavior from the traditional mode to more rely on the internet shopping

Electronic commerce is an inevitable trend of development which is the fastest wayfor businesses expanding international market Therefore the company has alwaysapplied E-commerce in the production process, business activities to rapidlyapproach market information, products, competitors and perform the electronictransactions

1.2 Problem statement and research objective

In top 5 retail websites of Vietnam currently, there were 4 websites owned bydomestic firms According to the report conducted by comScore, a research agency,Vatgia.com, Lazada.vn (foreign owned website), 5giay.vn, Enbac.com andThegioididong.com were the highest traffic retail websites in Vietnam

With the fierce struggle, to guarantee the market share, each corporation must dotarget the strategic category which be competitive advantage Vatgia.com,specifically, is familiar to the segmentation of technology, machine, mobile andaccessories In 2016, vatgia.com got the big success as obtaining the positive cashflow Therefore, it can be assessed that vatgia.com site has built the customer trustand effective business through the strategic marketing system

This research study conducted in Hanoi, focuses on investigating the factors thatinfluence the customer satisfaction related to the marketing strategy Moreover, thisstudy also provides insights into the characteristics of the respondents

1.3 The research objectives:

- Identifying the common factors of marketing strategy influenced on thecustomer satisfaction of website vatgia.com

- Building the solutions for marketing strategy to improve customersatisfaction

The research questions are following:

1 What are the common factors of marketing strategy applied by vatgia.com?

2 How do customers evaluate about the marketing strategy of websiteVatgia.com?

3 How should website Vatgia.com improve its marketing strategy?

1.4 Methodology

Quantitative research provides a measure of how people think, feel or behave in acertain way and uses statistical analysis to determine the results Quantitativeresearch methodology is used to finding the trend of customers’ perception aboutthe service provided by Vatgia company, since it will be more reliable andobjective This research uses quantitative methodology, it will provide details of inwhich factors company should focus on to increase purchase intention then boost up

sales Moreover, results will combine the secondary data and qualitative method tobuild the solutions to improve the factors of marketing strategy

1.5 Research structure

Corresponding to this process below structure is proposed for this research:

• Introduction to introduce research background, research problem, researchobjective and research questions

• Chapter 1: Literature review This chapter reviews theories and selects theresearch’s factors as well as formulates the research hypotheses and model

• Chapter 2: Research methodology This chapter provides general idea how theresearch is designed and implemented

• Chapter 3: Data analysis, result and finding discussion This chapter translates datacollected from survey, analyses data as well as discusses the result finding inconnection with theory

• Chapter 4: Conclusion, implication, limitation and future research This chapterconcludes the research finding, provides implication, further suggestion as well asresearch limitation

CHAPTER 1: LITERATURE REVIEW

1.1 MARKETING STRATEGY

1.1.1 DEFINITION

In basic terms, a marketing strategy analyzes all aspects of your sales activity andcombines it in a way so that all departments know what it going on Hence, amarketing strategy is the process that allows the organization to focus on availableresources and utilize them in the best possible manner to boost sales and gainleverage over competitors

No marketing strategy can begin without first determining the business goals Theseare the long-term objectives of the organization, i.e where it wants to see itself in,let’s say, the next five years Of course, there will be business goals for eachmarketing plan as well

1.1.2 WHY SHOULD THE COMPANY CREATE A MARKETING

STRATEGY?

To begin with, marketing strategy helps to create harmony among the organizations.Organizational efficiency improves as everyone is one the same page So theproduct development team goes hand in hand with the advertising department tocome with the most relevant marketing message Here are three additional benefits

of developing marketing strategies:

 Distribution Becomes More Efficient

Once your marketing strategy is in place, you know all the necessary details, such

as who your target customers are and what price range can you offer This will helpyou determine the most effective means of distribution For instance, if you arecatering to a younger demographic, you will have to provide purchase options formobiles and tablets using services like PayPal and credit cards Indeed, providing

your customers easy methods of shopping is a great way to boost sales and improvecustomer loyalty.

 Establish Brand Image

No business in the world can survive in the long without a solid brand image, andthis is yet another aspect where a marketing strategy helps you out A lot ofadvertising dollars are wasted when you buy media and place adverts on platformsthat do not go in line with your brand image As you develop a brand image, youwill know better than placing ads on every website and radio slot that you can getyour hands on

 Creating Products That Sell

Marketing is not only about promoting your existing line of products Marketing isgetting to the heart of your clientele and understanding their needs And if youthink that your existing products are not doing justice to the customer demand, thenyou have to redesign your offerings This is the best way to serve your clientele andsolidify your status in the market And with changing technology and economy, youwill have to reinvent yourself to stay relevant, and this is where marketing strategiesplay a major role

The bottom-line is that a marketing strategy is necessary if you are to sell the rightproducts at the right price to the right people with the right promotion anddistribution methods This also includes market research and analysis of data usingtools like PEST (Political, Economic, Social and Technological analysis) andSWOT (strengths, weaknesses, opportunities and threats) analysis

1.1.3 7PS MARKETING STRATEGY

1.1.3.1 BACKGROUND OF THE SERVICE MARKETING

More and more organizations are competing one another strategically to distinguishthemselves in the area of service and quality within a market Successful

organizations strongly focus on the service paradigm with investment in people,technology, personnel policy and remuneration systems for their employees.

This is very important as the behaviour of the employees can have a direct influence

on the quality of the service Employees represent the face and the voice of theirorganization to the customers They translate the services provision into services forthe customer across all sectors

In 1981, using the above mentioned information, Bernard H Booms and Mary J.Bitner (1981) further developed the traditional marketing mix developed by theAmerican Professor of Marketing Jerome McCarthy into the extended marketingmix or services marketing mix According to Booms and Bitner (1981) describe thatmarketing management is the concept of the marketing mix The marketing mix isnot a theory of management that has been derived from scientific analysis, but aconceptual framework which highlights the principal decisions that marketingmanager’s make in configuring their offerings to suit customers’ needs

This services marketing mix is also called the 7P model or the 7Ps of Booms andBitner This service marketing mix strategy extends the original marketing mixmodel from four to seven elements While Jerome McCarthy (1960) has onlydefined four verifiable marketing elements, the 7Ps are an extension as a result ofwhich this services marketing mix can also be applied in service companies andknowledge intensive environments

1.1.3.2 7PS MODEL

Booms and Bitner (1981) defined 7Ps of the marketing mix as follows:

Figure 1 1 The 7 Ps Marketing mix

 Promotion

This element comprises all the efforts the company or organization makes tostimulate the popularity of their product in the market, for instance by advertising,promotional programs, etc

 People

In Booms and Bitner’s service marketing mix, ‘people’ include people who aredirectly or indirectly involved in the trade of the product or service1 These aremainly customer contact employees (contact centre employees, representatives,account managers, etc.), customers, personnel and management It is mainly thecustomer contact employees who are the face of the organization and they translatethe quality into a service They are the ‘service’ providers on account of theiroccupation or entrepreneurship They include for instance stylists, hair dressers,coaches, trainers, gardeners, lawyers, contact centre employees, etc They deliver aphysical service with a visible result

Service companies are thoroughly aware that they must effectively manage thecustomer contact employees in order to monitor the quality of the service withrespect to attitudes and behavior This is very important in service companiesbecause there might be a large variable in the performance of the customer contactemployees in relation to the results of the services delivered The quality of aservice between service companies and customers (hospital intake, having a meal in

a restaurant or accountancy or management consultancy services) can vary verystrongly in addition to other important factors The lack of homogeneity in servicescreates difficulties for service companies Delivery of services often occurs during

an interaction between a customer and contact employees Attitude and behavior of

an employee create a perception of the service as experienced by the customer(customer perception) This perception may be either positive or negative It is even

more important because it can influence customer satisfaction and in turn thecustomer’s purchase intentions.

 Physical Evidence

The physical evidence within the service marketing mix refers to an environment inwhich a service comes about from an interaction between an employee and acustomer which is combined with a tangible commodity The physical evidenceincludes a representation of a service for instance brochures, company stationery,business cards, reports, company website, etc A good example is a hotel Thedesign, furnishing, lighting and decoration of a hotel as well as the appearance andthe attitudes of the employees have a certain influence on the quality of the serviceand customer experience

For example for a theme park, restaurant, or school, its ‘service scape’ or theenvironment in which the service takes places (service setting) is of crucialimportance when it concerns communicating about the service and the positiveinfluencing of customer experience This service scape includes three physicalenvironment dimensions that represent the relation between services andenvironment, namely:

- Environmental conditions such as temperature, sound, smell, etc

- Space and functions such as map, equipment, decoration, etc

- Signs, symbols and artifacts such as signature, decoration style, personaltouch, etc

As services are intangible, customers are continuously looking for concrete clues tohelp them understand the nature of the service company The more intangible theservice the more important it is to make the service around it tangible Credit cardsare a good example of tangible proof compared to the provision of (intangible)credit facilities by credit card companies and banks In conclusion, the physicalevidence serves as a visual metaphor of what the company represents, what services

it facilitates and the relations between customers and employees Anotherimportant point for consideration: satisfied customers Satisfied customers are thebest publicity for the services or products to be delivered The marketing strategymust be effective, in which satisfaction of existing customers can be communicated

to potential customers Social marketing is a useful tool in this respect It is nottangible but it supplies physical evidence with the aid of for instance a writtenrecommendation by a customer or user

 Process

The element ‘Process’ of the service marketing mix represents the activities,procedures, protocols and more by which the service in question is eventuallydelivered to the customer As services are results of actions for or with customers, aprocess involves a sequence of steps and activities to get there The element

‘process’ of the service marketing mix is an essential element within the entireservice marketing mix strategy This element comprises all activities and services inwhich the people involved play an important role.1

As a service is made up of a chain of activities, it is important to take the possiblewaiting period between the activities into consideration That is why it is importantthat marketers take care of the communication about possible delivery times and bydoing so the management of customer expectations Creating and managingeffective service process1es are for the existence of service companies Managingthe process factor is mainly due to the perish-ability of services which means thatthe services cannot be inventoried, stored for reuse or returned For instance, airlineseats that are not booked cannot be reclaimed It is therefore important that theservice companies manage demand as well as they possibly can

Another distinguishing characteristic of a process in relation to a service is theevidence to be provided to the customer and this is often a standardized orcustomized approach based on the customer’s needs and expectations Feedback

from the customer will see to the required tightening in the process with the aim tomeet the customers’ needs The delivery system and the flexibility of the employeesare two other key factors in the successful delivery of a service As services aredynamic and experiential, service companies also use a blue print method called

‘Service Blue Printing’ This process-based method provides a better management

of the service in the area of internal and external interaction, makes this transparentand ultimately this is implemented in practice

1.2 CUSTOMER SATISFACTION

1.2.1 CONCEPT OF CUSTOMER SATISFACTION

Customer satisfaction (CS) is a term that has received considerable attentionand interest among scholars and practitioners perhaps because of itsimportance as a key element of business strategy, and goal for all businessactivities especially in today’s competitive market (Anderson, Fornell, andLehmann, 1994; Gronroos, 1984; Lovelock & Wirtz, 2007) The concept hasbeen variously defined by many authors ‘‘Satisfaction is a person’s feeling

of pleasure or disappointment resulting from comparing a product’s performance(outcome) in relation to his or her expectation’’ (Kotler & Keller, 2006 p.144)

Satisfaction is a ‘‘psychological concept that involves the feeling of well-beingand pleasure that results from obtaining what one hopes for and expects from anappealing product and/or service’’ (WTO, 1985) CS is “as an attitude-likejudgement following a purchase act or a series of consumer product interactions”Youjae Yi (1990 cited in Lovelock & Wirtz 2007) CS is ‘‘a consumer’spost-purchase evaluation and affective response to the overall product or serviceexperience’’ (Oliver, 1992) ‘‘Satisfaction is merely the result of things notgoing wrong; satisfying the needs and desires of consumers.’’(Besterfield1994); CS is ‘‘an experience-based assessment made by the customer of how farhis own expectations about the individual characteristics or the overall

functionality of the services obtained from the provider have been fulfilled’’(Bruhn, 2003) According to Gyasi and Azumah (2009) satisfaction is “Theprocess of customer overall subjective evaluation of the product/servicequality against his/her expectation or desires over a time period.”

Admittedly, satisfaction is more complex to define to accurately fit everycontext and measure In the words of Oliver (1997), “everyone knows what[satisfaction] is until asked to give a definition Then it seems, nobody knows”.From marketing perspectives, customer satisfaction has multi-dimensionality Theobject of customer satisfaction may be varied and can be related to differentdimensions of multiple experiences with product/service provider (Surenshchandar

et al 2002 cited in Satari, 2007) While most definitions relate customersatisfaction to quality of a product or service offering (Kotler & Keller, 2006;www.theacsu.org), satisfaction can as well be related to other non-qualitydimensions (Singh 1991; Garland and Westbrook 1989) It may be related to an on-going business relationship or with price-performance, satisfaction with the time

or service delivery or the service experience, service context and satisfactionwith entire reputation and outlook of an organization Even with the product

or service quality there can be several dimensions

(Gronroos, 2000, 2001; Bo Edvardsson 2005), such as what product offers,product or service reliability, timeliness, friendliness of the service providers,and the like Therefore depending on the purpose one wants to achieve, onecan relate satisfaction to any object of interest In this study customersatisfaction is defined in relation to only dimensions connected to the servicequality delivered by Ghana Insurance Industry

Satisfaction can be related to attribute-specific and overall performance It isattribute-specific where it relates to a specific product or service (Cronin & Taylor,1992) For example, with Ghana Insurance Industry, satisfaction can berelated to a specific attribute such as: Comprehensive Insurance, Third Party

Insurance, Accident Indemnity, Hospitalization Insurance, Dread DiseasesPolicy, Burial & Funeral Expenses Policy, or satisfaction with the claimprocesses among others On the other hand, customer satisfaction can be related tothe overall performance of a product/service or the overall performance of anorganization’s products/services (Cronin & Taylor, 1992) The present studyrelates customer satisfaction to the overall performance of services delivered

by Ghana Insurance Industry in order to generalize the findings for managerialimplications

As to whether customer satisfaction is an outcome or a process, many earlydefinitions conceptualized satisfaction as a process which is currently thedominant view held by most scholars (Oliver, 1980; Parasuraman et al., 1988).The process perspective presupposes that customer satisfaction is a feeling ofsatisfaction that results from the process of comparing perceived performanceand one or more predictive standards, such as expectations or desires (Khalifa &Liu, 2002) This perspective is grounded in the expectancy disconfirmation theoryproposed by Richard Oliver (Oliver, 1980) The customer is satisfied if theperformance of product/service is equal to his/her expectations (positivedisconfirmation) and he/she is dissatisfied if the product/service performance isperceived to be below his/her expectation (negative disconfirmation) Ifexpectation exceeds perceived performance, the customer is highly satisfied Bytaking satisfaction as a process these definitions do not focus on satisfactionitself but things that cause satisfaction, the antecedents to satisfaction, whichoccur primarily during the service delivery process (Vavra, 1997) More recentstudies view satisfaction as an outcome or end result during the process of theconsumption of a service; it is viewed as a post-purchase experience (Vavra, 1997).This view has its roots in motivation theories that postulate that people aredriven by the desire to satisfy their needs (Maslow, 1954) or that their behavior

is directed at the achievement of relevant goals (Vroom, 1964) In this waysatisfaction is perceived as a goal to be achieved and can be described as

consumer fulfilment response (Rust & Oliver, 1994) In the context of GhanaInsurance Industry, we believe that customers, through the promotionalactivities of the Insurance in Ghana, have developed certain expectations andset of desired services of the Industry These are important in determining theirsatisfaction of the services received/given Therefore our conceptual frameworktreats satisfaction as a process not just an outcome that customers strive to achieve Another controversial issue in customer satisfaction literature is whethersatisfaction is cognitive or affective Although most scholars, notablyproponents of disconfirmation theories, view satisfaction as a process, but thenature of satisfaction process remains unclear While some authors maintain thatsatisfaction is a cognitive assessment involving a comparison of product/serviceofferings from a provider against expectations, other scholars opine that the feeling

of satisfaction represent an emotional or affective state of mind that is formedthrough the process of service delivery where customers encounter serviceexperiences that affect their emotions More recent research has found thatsatisfaction is both cognitive and affective (Edvardsson et al., 2005; Gro¨nroos,2001; Martin, et al., 2008; Oliver, 1993a; Wong, 2004) This view holds thatcustomers do not only consume an offering for which they cognitively evaluate,but their involvement in the service production and delivery process allowsthem to emotionally evaluate the service quality They argue that “ satisfaction

is naturally tied to cognitive judgments and to affective reactions elicited inconsumption” (Mano & Oliver, 1993, p 451) In this study, customersatisfaction is conceptualized as cognitive and affective

An equally debatable element in clarifying customer satisfaction concept iswhether it is subjective or objective in nature Pizam A & Ellis (1999) notedthat “a minority of researchers perceive the satisfaction process to be subjective inexpectations but objective in the perceptions of the product attributes, oroutcome.” In this light, Klaus (1985, p.21) defines satisfaction as “the customer's

subjective evaluation of a consumption experience, based on some relationshipbetween the customer's perceptions and objective attributes of the product''.Expectation and perceived performance are constructs that are in themselves subject

to external influences to some extent (Maister, 1985) Others point out that bothwhat is perceived (outcome) and what is expected are subjective andpsychological phenomena - not reality The importance of the subjective nature ofthe process cannot be overlooked The reason is that both expectations andperceptions are psychological phenomena and are susceptible to externalinfluences and manipulation To say that customers’ evaluation of a product orservice is objective implies that the evaluation is not biased in any way This is notrealistic because it is a common knowledge that customers are different andthe way they perceive a service like fire and property insurance, insurance ininternational contracts and funeral policy of an insurance firm may varyconsiderably However, according to Gyasi & Azumah (2009), each customercan be objective in their own subjective, cognitive and affective states.Therefore in this study, customer satisfaction in itself is defined as asubjective evaluation, but its measurement is approached objectively; thus,customers are supposed to be objective - expressing whatever subjective responsethey have about a product objectively without bias

Satisfaction may be viewed as Transactional or Cumulative: On the one handfrom a transactional-specific perspective, CS is based on a one time, specificpost-purchase evaluative judgement of a service encounter (Hunt, 1977; Oliver,

1977, 1980, 1993 cited in Yonggui Wang & Hing-Po Lo 2002) On the otherhand, in the cumulative CS perspective, CS is conceptualized as an overallcustomer evaluation of a product or service based on purchase andconsumption experiences over a time period (Fornell, 1992; Johnson andFornell 1991; Anderson et al., 1994a, b; cited in Yonggui Wang & Hing-Po

Lo 2002) In terms of the diagnostic and predictive value of customersatisfaction measurement, cumulative satisfaction is more useful and reliable than

transaction-specific in that it is based on series of purchase and consumptionoccasions rather than just one occasion of transaction

Customer satisfaction, in this study, is measured from the last twelve months.Therefore, the conceptual framework of this study treats CS as cumulative.Consequently, the operational definition of CS in this study is the one by Gyasiand Azumah (2009, p.g.36), “The process of customer overall subjectiveevaluation of the product/service quality against his/her expectation or desiresover a time period.”

1.2.2 WHY IS CUSTOMER SATISFACTION IMPORTANT TO

BUSINESSES?

Customer satisfaction helps companies in many ways, some of which include:

 Customer satisfaction information helps companies to evaluate their ability

in meeting customers' needs and expectations effectively (Zeithaml et al,2009)

It also helps companies to analyse the performance of an offering to customers inorder to identify areas for improvements as well as what areas customers consider to

be very important to them (Zeithaml et al, 2009)

 It’s a leading indicator of consumer repurchase intentions and loyalty

Companies can predict customer retention and loyalty as well as organisationalprofitability through satisfaction surveys Research has suggested that customersatisfaction leads to company profitability (Bei & Chiao, 2001; Heskett et al.,1997) Studies have shown a positive correlation between customer satisfaction andcustomer retention and loyalty (Zeithaml et al., 1996; Heskett et al., 1997).Reichheld (1990) asserted that customer satisfaction accounted for about 40% ofcustomer retention In the automotive service industry, customers who are satisfiedwith a dealer might buy multiple vehicles as their income and status increase

(especially high value vehicles) and also keep going back to that dealer for everyservice throughout their lifetime

 It’s a point of differentiation

In a competitive marketplace where businesses compete for customers; customersatisfaction is seen as a key differentiator Businesses who succeed in these cut-throat environments are the ones that make customer satisfaction a key element oftheir business strategy Companies who offer amazing customer experiences createenvironments where satisfaction is high and customer advocates are plenty

 It reduces negative word of mouth

Customers who are satisfied with a company's offering may tell others about it positive word-of-moth, just as dissatisfied customer also bad mouth the company toother Goodman (2009) suggested that dissatisfied customers tell on average tenpeople about the company as against 5 people by satisfied customer Goodman(2009) also asserted that it cost five times to attract a new customer than to maintain

-a current customer Therefore it is imper-ative for service businesses to s-atisfiedcustomer on a consisted basis

 It increases customer lifetime value

A study by InfoQuest found that a ‘totally satisfied customer’ contributes 2.6 timesmore revenue than a ‘somewhat satisfied customer’ Furthermore, a ‘totally satisfiedcustomer’ contributes 14 times more revenue than a ‘somewhat dissatisfiedcustomer’ Satisfaction plays a significant role in how much revenue a customergenerates for the business

Successful businesses understand the importance of customer lifetime value (CLV)

If the managers increase CLV, they can increase the returns on their marketingdollar Customer lifetime value is a beneficiary of high customer satisfaction andgood customer retention

 It’s cheaper to retain customers than acquire new ones:

This is probably the most publicized customer satisfaction statistic out there It costssix to seven times more to acquire new customers than it does to retain existingcustomers Customers cost a lot of money to acquire because marketing team spendthousands of dollars getting the attention of prospects, nurturing them into leads andclosing them into sales

1.2.3 CUSTOMER SATISFACTION MODELS

Companies try to maintain their loyalty with their customers by improving productand service quality As a result in the last decade, many national indices have beendeveloped in order to measure consumer satisfaction across a wide range oforganizations Thus, at the national level, the customer satisfaction index (CSI) isused to measure companies and organizations how they satisfy customers’ needs.The CSI’s model can be also used for comparing services and products within anindustry Most countries have set their own customer satisfaction indices to measurecustomer satisfaction and the business performance of companies and organizations.The first truly national customer satisfaction index was the Swedish CustomerSatisfaction Barometer, or SCSB, developed in 1989 The SCSB includes 31 majorSwedish industries The original Swedish Barometer used perceived value and asingle measure of customer expectations (Fornell, 1992) In Germany, the DeutscheKundenbarometer, or DK, was introduced in 1992 and as of 1994 also includes 31industries

1.2.3.1 AMERICAN CUSTOMER SATISFACTION MODEL

The American Customer Satisfaction Index (ACSI) is the national indicator of

customer evaluations of the quality of goods and services available to U.S residentssince 1994 It is the only uniform, cross-industry and government measure ofcustomer satisfaction It produces indices of satisfaction, its causes and effects, for

seven economic sectors, 39 industries, 200 private sector companies, two types oflocal government services, and the U.S Postal Service

The ACSI model is a cause-and-effect model with indices for drivers of

satisfaction on the left side (customer expectations, perceived quality, and perceivedvalue), satisfaction (ACSI) in the center, and outcomes of satisfaction on the rightside (customer complaints and customer loyalty) The indexes (shown in thediagram below) are multivariable components measured by several questions thatare weighted within the model The questions assess customer evaluations of thedeterminants of each index Indexes are reported on a 0 to 100 scale The surveyand modeling methodology quantifies the strength of the effect of the index on theleft to the one to which the arrow points on the right These arrows represent

"impacts." The ACSI model explains customer satisfaction (ACSI) on customerloyalty Looking at the indexes and impacts, users can determine which drivers ofsatisfaction, if improved, would have the most effect on customer loyalty

Figure 1 2 ACSI Model

Figure 1.2 show that overall customer satisfaction (ACSI) has three antecedents:perceived quality, perceived value, and customer expectations

- Perceived Quality is the first determinant of overall customer, which is the

served market's evaluation of recent consumption experience, and isexpected to have a direct and positive effect on overall customer satisfaction

- Perceived Value is the second determinant of overall customer, or the

perceived level of product quality relative to the price paid Perceived value

is a measure of quality relative to price paid Although price is often veryimportant to the customer's first purchase, it usually has a somewhat smallerimpact on satisfaction for repeat purchases

- Customer expectation is the third determinant of overall satisfaction, which

measures the customer's anticipation of the quality of a company's products

or services Expectations represent both prior consumption experience,which includes some no experiential information like advertising and word-ofmouth, and a forecast of the company's ability to deliver quality in thefuture

1.2.3.2 EUROPEAN CUSTOMER SATISFACTION INDEX – ECSI

It seems to distinguish European Customer Satisfaction Index – ECSI from theASCI Model With ECSI, Image and brand have impacted directly upon customerexpectation Therefore, the customer satisfaction is the cooperation of four mainfactors including image, perceived value, customer expectation, perceived qualityservice & product Usually, ACSI tends to apply for public sectors while ECSI isfamiliar for measuring products and services

Figure 1 3 European Customer Satisfaction Index – ECSI

Clearly, the strength of this approach is that it shifts the consumer experienceimmediately, enabling the study of the causal relationship among the components ofcustomer satisfaction and loyalty Therefore, the first objective of the CSI approach

is structured to explain the loyalty of customers for a particular product/service or abusiness, a country in general context, through customer satisfaction index - CSIwhen affected directly or indirectly by an image, expectations, perceived quality(product or service) and perceived value to products and services

CHAPTER 2: RESEARCH METHODOLOGY

Regarding the number of people making online purchase and shopping/sellingactivities, first, according to the survey31 conducted on 2940 Internet users in 6biggest cities in Vietnam in 2010 by Cimigo -a market research company, there are

5 main online activities done by Vietnamese internet users ( categorized by purpose

of activities) which are :

- Information gathering such as reading books, searching for jobs, research

- Online entertainment, for example: listening to music or playing onlinegames

- Online communication: for example: chatting, sending SMS or emails

- Blogging and social networking: facebook, twitter…

- Online business: online shopping, auction, e-banking

With the increase in mobile phone usage and internet penetration, e-commerceVietnam are taking the storm in Vietnam According to the Global RetailDevelopment Index (GRDI) by AT Kearney, Vietnam is ranked 11th in 2016.Unlike other more developed countries in the ASEAN region, the market is stillunsaturated despite it having one of the highest GDP growth in ASEAN As aresult, with high economic growth due to high export growth and FDI inflow, thishas resulted in the growth of the e-commerce retail sector

One reason for the boom of e-commerce Vietnam has been due to the favorableconditions in Vietnam The widespread availability of mobile phones and internet,geographical advantages, low labour costs, and high consumption demand hasallowed more people to resort through online means for trading purposes As aresult, online shopping is becoming a norm in the Vietnamese society.

Figure 2 1 Market share of Vietnam EC and its Growth rate

2.1.1.2.MARKER PLAYERS

Basically there are 4 types of sellers of online shopping sites in Vietnam, classified

by business models and type of sellers, according to Acorn and Epnion's report

Table 2 1 Four types of online shopping sites in VN

- Almost like B2B2C model

- Source of revenue: posting,

- Owned by big companies/ retailers

- Ex: Thegioididong.com, lazada.vn

- Ex: Muachung.vn, hotdeal.vn

 Classified ad sites:

This kind of website acts more like a market place where people post theiradvertisements of goods for sales These websites do not provide much support forsellers such as : page design, layout The sellers and buyers contact each otherdirectly for price bargain, product information and delivery Most of sellers areindividuals, with limited amount of goods The website makes money by collectingadvertisement fee for advertisement banners, not from sellers, and the businessmodel is more C2C rather than B2C Some well-known websites of this segment areMuare.vn, 123mua.vn

 Commercial site:

This type of website is relatively close to B2B2C model, and these sites providepayment tool and different types of service for sellers such as consultation, pagedesign Also, although the site does not deal with delivery and shipping activities,they invest money and spend time on site-administration activities such as: editingposts, protect sellers from hacker, site maintenance services, and some otherfunctions like time-setting for sellers to post their products at the time when mostpeople will be online Sellers of these sites are usually small to medium sizedbusiness owners with more variety of goods than sellers in "market places Theseshops in Vietnam collect fee on times of uploading posts (including editing), forexample sellers in Enbac.com pay 500000VND (about 18$) for 1000 times ofuploading, which is very cheap Main players of this business model are Vatgia.vn,Enbac.com

 Retail site

This type of sites also deals with B2C, however, in most of the cases, these arecompanies' official online shops which sell products directly to customers ( such asSendo.vn owned by FPT company) or sometimes they buy goods from differentcompanies, stock them and deliver directly to customers Many sites specialize in aparticular kind of goods, such as Thegioididong.com that only sells mobile phonesand phone accessories, Banmypham.vn that only sells cosmetics Customers ofthese sites are people who want to find particular goods or particular brands becausesearch engines usually categorize goods into brand, or companies' names

Besides domestic brands, in recent years, several foreign online shopping sites haveentered Vietnam, for instance: Alibaba.vn focus on B2B) from China, Ebay.vn(specialize in Auction) from US, or Lazada.vn (commercial site) from Philippines.However, all of these sites have just started since 2011, 2012 and are still at thebeginning phase Though currently there are many online shopping sites inVietnam, it is clear that there is no market leader, because the market is sofragmented and none of players appear to" have reached market share of more than

5%" according to PWC's report This is a great opportunity for a big player toparticipate in the market

 Coupon sites (most are Groupon sites)

"Groupon" is a new term combined by Group and Coupon, and is name of a famouswebsite in US The idea for Groupon's business model (or B2T- Business to Team)

is simple: if a certain number of people (predetermined) sign up for a deal (usuallycoupons, discounted tickets) in Groupon, all members will get it Otherwise, no onecan get the deal when the certain number is not reached The reason why this model

is popular is that: for customers, people are attracted by discounted gifts/tickets,usually deep discount; for business owners: they can get many loyal customers andcustomers' information data because it requires a certain number of people to makethe deal available, clear stocks, and reduce risks of giving too much discount forsales promotion

In Vietnam, "Groupon" model has become very popular since 2010 because it iseasy to imitate and "Groupon"-liked websites do not have to carry much risk, orinvest a lot of money, and Vietnamese consumers are very sensitive to price Until

2011, there are about 97 websites doing this business model in Vietnam, sold 6700deals and more than 4.2 million vouchers with the total revenue of 31.69 millionUSD37 Main players in this segment are: Muachung.vn, Nhommua.com,Cungmua.com and Hotdeal.vn …

Figure 2 2 Major EC sites in VN2.1.2 OVERVIEW OF WEBSITE VATGIA.COM

Vatgia.com (Vatgia means "Price" in Vietnamese) was established in 2006 and wasfirst launched in 2007 as one of the first players in Vietnamese e-commerce market

2007 was the time when many people believe that Vietnamese e-commerce wouldhave no future However, after 6 years of operation, it has become one of the mostsuccessful e-commerce websites in Vietnam with more than 1,200,000 peoplevisiting per day and the value of deals is estimated about 3000 billion VND ( about

143 million USD) per year From a small start-up, it now has more than 1 millionregistered users, 20000 registered online shops, and more than 500 employees Inaddition, Vietnam Price Joint Stock Company-the company which runs the site alsoowns Baokim.vn- a website which provides mobile payment service ( like Paypal),

Cucre.com ( Cuc Re means "Very Cheap")-a coupon, discounted price site, andNhanh.vn ( Nhanh means Fast)-a logistics company.

2.1.2.1 Development history & Milestones

Table 2 2 Development History of VNP Group

2007 - Official launch of the website Vatgia.com (15/7/2007)

- Received the Award IT Weeks Best Solution for E-commerce

2008 - IDG invested in VNP

- Received Sao Khue Award

- Vatgia.com entered top 20 of Vietnam Alexa

2009 - Cyber Agent invested in VNP

- Reached 300.000 users

- Vatgia.com entered top 15 of Vietnam Alexa

2010 - Launched payment gateway Bao Kim

- Launched a good-price purchase website system Cucre.vn

2011 - Received investment from Mitsui

- Launched logistics service Nhanh.vn

- Launched booking website Mytour.vn

- Vatgia.com entered top 10 Vietnam Alexa

2012 - Received investment from Recruit JV

- Reached 1 million users on Vatgia.com

- Launched 123doc.vn and Pubvn.net

- Invested in Appota, WebBNC

2013 - Developed a retail system into 18 stores

- 123doc came first in ebook

- Pubvn.net came first in HD films

- Launched sales management solution RMS Nhanh.vn

2014 - Unified the brand name VNP Group

- Developed VatgiaAd system

- Launched Vchat app

2015 - Completed the feature CPA charging on Vatgia.com

- Developed VNPU – talent incubator for VNP

- Developed Vchat to make profit

- Built operational team, mobile app team

- Developed retail management software that is provided to manyother retail businesses

2.1.2.2 Core values

 Mission: VNP was founded to make people happier on the Internet, and

bring wealth and pride to all members

 Vision: To build an “Online Eco-system” that helps “Happy shopping –

Smart business” – with the “Bottom up” culture

 Diamond principle:

- Towards yourself: Never be satisfied with the present

- Towards others: Put yourself in others' positions and treat them beyondexpectation

 Working principle: 1P, 2F, 3C, 4PDCA, 5S, 6W3H, 7P

1P: Top position

- If we cannot be number one, we cannot be anything

- Our target: To be the best in every aspect

- To achieve this, we should do what we are most passionate about and try ourbest to make maximum profit

2F: Focus, Fast

- To achieve 1P

- Focus all resources, execute as fast as possible to be number one

3C: Cười, Chào, Cảm ơn – Smile, greet, appreciate

- Friendly culture in the workplace

- Always smile when meeting colleagues, clients, partners,…

- Plan: Make a plan of what to do

- Do: do exactly as scheduled

- Check: check to make sure that the statistics are matching the plan

- Action: innovate the work to achieve the best result, and do P again

- Systemize: great a system to make each process automatic

5S: Sort, Set in order, Shine, Standardize, Sustain

- Seiri (sort): Get rid of unnecessary material (wasteful, dispensable,unreasonable, inconsistent)

- Seiton (set in order): Arrange everything according to priority Focus on themost important things

- Seiso (shine): Keep the workplace clean and pleasant

- Seiketsu (Standardize): Standardize the best practice in the work area

- Shitsuke (Sustain): Teach others through training and discipline

6W3H – SMART TARGET

- Specific (What, whom, where)

- Measurable (Who, how much, how many)

- Why: Why doing this work? What can we solve if we do this work?

- How: How can we do the work? What is the strategy?

- What: The proper plan to do the work (in this plan there have to be theanswers to: who, whom, where, when, how much, how many)

- Eg: Work proposal sample

7P (Problem, Priority, Plan, Process, Policy, People, Product)

- Problem: observe, listen and identify needs and problems

- Priority: prioritize needs and problems, decide which is the most importantand needs to be done first

- Plan: make a plan based on the 6W3H principle and priority early set

- Process: introduce a procedure for plan implementation, controlling,adjustment and evaluation

- Policy: introduce a policy on statistics, reward and punishment for peoplewho implement the plan

- People: allocate personnel with appropriate rewards, punishments andreplacement if necessary

- Product: create products, services and features to solve the problemscompletely The effort will be recognized by money

2.1.2.3.BUSINESS MODEL

According to "Vietnam E-commerce Report 2008", vatgia.com is classified intoB2C model However, according to the introduction of vatgia.com, it is in both B2Cand C2C models

The clear distinction between these two models in the trading floors in Vietnam isalso contingent Vatgia.com acts as the intermediary between the seller and thebuyer, the order will be delivered to the seller In most transactions today, thepayment and shipping are negotiated by the seller and the buyer and the transaction

is conducted Sellers when posting and promote products on vatgia.com will have topay depending on the type of service, and buyers are free intermediaries whenbuying goods on the site Vatgia.com also provides services such as the Classifiedadvertising, FAQs for the community of users Therefore, Vatgia.com can beclassified as a C2C model In some transactions, when the buyer does not trust intothe seller, vatgua.com will act as a payment intermediary, inform the seller aboutthe order status, and transfer the money to the seller upon receipt With securedbooths, buyers will be compensated by the maximum amount of VND 5,000,000 ifthe risk arises due to fault of the seller such as: failure to deliver goods, incorrectgoods, damaged goods…

2.1.2.4 PRODUCTS AND SERVICES

Vatgia.com is an e-commerce website that offers thousands of products fromthousands of different suppliers The website has successfully developed the C2Csales model and classified classifieds with over 3,000 news articles a day This isalso the main two areas of the website With thousands of stores, suppliers andretailers participating in the offering, consumers will always find the cheapest offer,

in the shortest time Consumers can vote on all products and services onwww.vatgia.com according to criteria that appropriates to each type of goods orservices