Factors influencing customer satisfaction on organic dishwashing liquid product line of layer clean vietnam company

National Economics University NEU BUSINESS SCHOOL LUONG THE QUANG Factors influencing customer satisfaction on organic dishwashing liquid product line of Layer Clean Vietnam company MASTER OF BUSINESS[.]

National Economics University NEU BUSINESS SCHOOL

LUONG THE QUANG

Factors influencing customer satisfaction on organic dishwashing liquid product line

of Layer Clean Vietnam company

MASTER OF BUSINESS ADMINISTRATION THESIS

SUPERVISOR:

ASS PROF., DR VU THANH HUNG

Ha Noi, 2017

ACKNOWLEDGEMENT

TABLE OF CONTENTS

ACKNOWLEDGEMENT 2

LIST OF FIGURES 6

LIST OF TABLES 7

EXECUTIVE SUMMARY 8

CHAPTER 1: INTRONDUCTION 10

1.1 Rationale 10

1.2 Research objectives 11

1.3 Research question 12

1.4 Research methodology 12

1.4.1 Research Process 12

1.4.2 Data collection 13

1.4.2.1 Secondary Data 13

1.4.2.2 Primary Data 13

1.4.3 Data analysis 15

1.5 Research scope 17

1.6 Thesis structure 18

CHAPTER 2: THEORETICAL BACKGROUND ON CUSTOMER SATISFACTION 19

2.1 Overview of Customer satisfaction 19

2.2 Consumer Decision Making Process 20

2.2.1 Problem Recognition (I need new trainers) 21

2.2.2 Information search 21

2.2.3 Evaluation of Alternatives 22

2.2.4 Purchase 22

2.2.5 Post Purchase satisfaction or dissatisfaction 23

2.3 Maketing program – The Marketing Mix 23

2.3.1 The Marketing Mix 4 P’s: 23

2.3.2 The extended 7 P’s: 25

2.4 Theoretical framework on customer satisfaction 26

CHAPTER 3: ANALYZING THE INFLUENCE OF FACTORS TO CUSTOMER SATISFACTION OF LAYER CLEAN VIETNAM COMPANY’S ORGANIC DISHWASHING LIQUID PRODUCT LINE 28

3.1 Overview of Layer Clean Vietnam 28

3.1.1 General information of Layer Clean Vietnam 28

3.1.2 Vision, Missions and Core Values 29

3.1.3 Competition 30

3.2 Attribute to analyze customers satisfaction of Layer Clean Vietnam company’s products 32

3.2.1 Profile of respondents: 32

3.2.1.1 Geographic: 32

3.2.1.2 Demographic 32

3.3 Analyzing factors influencing customer satisfaction 33

3.3.1 Demographic Overview 33

3.3.2 Criteria 34

3.3.2.1 Product 35

3.3.2.2 Brand 35

3.3.2.3 Design 36

3.3.2.5 Place 37

3.3.2.6 Price 37

3.3.2.7 Promotion 38

3.3.2.8 People 38

3.3.2.9 Physical Evidence 39

CHAPTER 4: RECOMMENDATION TO IMPROVE CUSTOMERS SATISFACTION 40

CONCLUSION 42

REFERENCE 43

APPENDIX 45

LIST OF FIGURES

Figure 1.1 Research Process (Source: author’s design) 12

Figure 1.2 Consumer decision making process 16

Figure 1.3: The 7ps framework 17

Figure 2.1 The Buyer Decision Making Process 20

Figure 2.2 The Marketing Mix 4 P’s 24

Figure 2.3 The Marketing Mix 7 P’s 26

LIST OF TABLES

Table 3.1 Vision, Mission and Core Values of company 29

Table 3.2 Company Shares of Home Care: % Value 2012-2016 32

Table 3.3 Top of mind awareness 33

Table 3.4 Important of each element in 7P’s 34

Table 3.5 Product’s sub-criterion 35

Table 4.1 Recommendation 41

EXECUTIVE SUMMARY

Established in 2015, Layer Clean Vietnam company runs its business with theslogan “Organic detergent products – Safety and Friendly” The main target customers ofthis business are mainly Vietnamese female Furthermore, Layer Clean Vietnam alsofocus on building business based on 3 priority factors which are Quality, Safety andEfficiency In order to support Layer Clean Vietnam to figure out the list of criteria whichcan affect to customers thus Layer Clean Vietnam company can improve their business

by understanding customers deeply and comprehensively

There are 3 main purpose of this report, firstly, it will determine what criteria will

be concerned by customers when they decide purchasing organic products Secondly, theimportance of each criterion will be evaluated Finally, this report will also figure outwhat criteria has been performed immensely by Layer Clean Vietnam

The process of this research consists of 2 stages First stage will be conductingfocus group interview in which, each group will have at 5-10 participants Secondly, indepth interview will be conducted to collect more data

In order to analyze data, there are 2 frameworks will be used which are 7Psframework and Consumer Decision Making framework These frameworks will becombined to filter and evaluate criteria

In general, customers satisfy with the quality of products but the design ofproducts had a lot of complains Moreover, the product arrangement is not helpful interms of displaying and attracting customers

However, the result of this research is limited by small sample size which cannot

be referred to the whole market The bias of responses might happen and cause inaccurateresponses

From analyzed data, an overview of how customers respond to Organic home careproducts has been made in which it not only points out the factor which has the most

customers’ experience In case of Layer Clean Vietnam company, Product is the mostimportant factor to customers due to the reason that customers are now concerning moreabout what product made off which could affect directly to the health of consumers.Beside of that, other factors also play important roles to motivate customers to purchase.For example, because of poor design, Layer Clean Vietnam company’s products are notattractive compared to other well-known products which have better design and colors.Hence, it will affect to customers’ recognition.

Finally, recommendations were given out for Layer Clean Vietnam company toconsider which factors will be focused in for investment which will help company toimprove its products or maximize customer satisfaction and experience

CHAPTER 1:

INTRONDUCTION

“Customer Satisfaction”, this phase is used to describe the level of a customer concerning

a product or service provided by a company However, this is an abstract concept inwhich it involves multiple factors such as quality of products, the quality of service oreven the attitude of staff Because of that, Customer Satisfaction becomes an intangiblefactor that can’t be measured comprehensively In general, today’s companies understandthat the success of a firm depends heavily on the level of customers satisfaction due to theexperience of customers with products or service, it could result in lifelong customers and

a lot of benefits to brand image Hence, numerous today companies are placing customersatisfaction as priority in their goal list to invest in and make it as a competitiveadvantage to increase market share On the other hand, since customer satisfaction is anintangible factor, does increasing it will maximize company’s profit? Customersatisfaction is related to experience of customers and it involves multiple aspects ofproducts and service so investing in customer satisfaction could lead to a massinvestment in all aspect Therefore, understanding which factor influencing customersatisfaction is mandatory to make investment become effective and efficient

Due to the increase of food scandal cases recently in Vietnam which were mainly caused

by chemical ingredients in products, Vietnamese consumers are increasingly looking foralternative ways to protect their health and family members from food poisoning andunwanted side effects One of that ways is replacing usual products with organic oneswhich are made from natural ingredients Consequently, it created a potential market forall organic products, including home care products such as Dishwashing, Bleach, andLaundry Care Seizing the opportunity, Layer Clean Vietnam company opened their

maximize profits are the goals for Layer Clean Vietnam company to develop theirbusiness.

This study will focus on finding out what factors can influence customers customersatisfaction because of several reasons Firstly, as stated above, organic product is a newpotential market in Vietnam, so Layer Clean Vietnam company are dealing with intensecompetition from both domestic and foreign competitors This new market has high risk

of new entry which means there will be more competitors in future will join in thismarket, hence, Layer Clean Vietnam company must keep innovating and improving theirbusiness and products in order to maintain and increase market share Therefore, LayerClean Vietnam company’s Manager concerns seriously about understanding customers’needs and wants, so they can improve products to match with customers’ expectation.This will help Layer Clean Vietnam company to keep in touch with market trends butalso create competitive advantages to compete with competitors Secondly, because ofnumerous factors contributing to customer satisfaction, investing on maximizingcustomer satisfaction without a proper strategy will result in ineffective investment and inworse case, company will have to suffer loss from its investment Therefore, Layer CleanVietnam company wants to clarify which factors will have the most contribution incustomer satisfaction in order to optimize their investment and to avoid unexpected loss

The thesis will focus on the following research objectives:

- To determine which criterion customers consider when choosing dishwashing product

- To identify level of importance of each criterion to customers

- To determine how Layer Clean Vietnam company perform for each criterion

- Give recommendations for improving and enhancing the customer satisfaction toward organic diswashing product

1.3 Research question

The research questions are prepared as below:

- What are the factors that customers concern when purchasing organic diswashing products?

- What factors are concerned the most by customers?

- What factors that has highest impact to customers when purchasing organic

diswashing products?

- What could Layer Clean Vietnam company do to improve customer satisfaction?

1.4.1 Research Process

Research process is shown and prapared as below:

Figure 1.1 Research Process (Source: author’s design)

Primary Research

Recommendation

Secondary Research

Factors which affect Customer Satisfaction

Strengths Weakness

According to the figure above, firstly, the author collects the information of

customer satisfaction concepts and customer behavior throgh literature review and

External source: Internet resources, Google Scholar, Euromonitor, onlinenewspaper

Key words:

- Vietnamese home care product reports

- Vietnamese health and wellness

- Vietnamese organic products

- Vietnamese health awareness “Layer Clean Vietnam website”

1.4.2.2 Primary Data

Due to the reason that customer satisfaction is an intangible factor, hence, Primary datawas collected through in-depth interview and group interviews In total, 24 customerswere chosen for interview Because the data needs to show customer experience andcustomer satisfaction, hence, only customers who have purchased Layer Clean Vietnamcompany’s organic products were chosen to participate in these interviews

o Identify which factors could satisfy customers and which ones dissatisfycustomers.

o Identify the reasons which make customers keep purchasing products orstop purchasing products

Survey

- Respondent: customers who have already purchased and used Layer Clean

Vietnam company’s products Some of them are also the partners with thecompany

- Sample size: 50 customers

+ Old customers and partners: 25 customers

+ New customers (Data taken from the online buyers): 25 customers

- Sampling method: The sampling is based on convenient method.

- Questionaire design: 2 Parts

+ General information

+ Factors impact customer satisfaction toward purchasing Layer Clean products

- Questionaire distribution: Email surveys can be executed quickly and

economically These surveys may contain a questionnaire in the text of themessage or include a link to a web survey, which can incorporate skip patterns.Additionally, email surveys can be tied to a specific agent interaction Responses

to email surveys can be automatically tabulated, and they are the least expensive

of the methods available (survey sent to new customers may be more than 25,when results collected are greater than 20 will stop)

1.4.3 Data analysis

Due to the reason that data from group interviews and in-depth interview is qualitativedata, it was analyzed and manipulated into table and graph for comparison purpose Toaddress the factors that affect customers’ buying process, the “Consumer decision makingprocess” framework and 7Ps will be utilized and combined in order to figure out theimportant factors According to Professional Academy (2017), the Consumer decisionmaking process is the method used to identify and track the decision-making process of acustomer from the begin to start This method consists of 5 steps: Problem Recognition,Information Search, Evaluation of Alternative, Store choice and Purchase, Post PurchaseProcess For the first steps, it’s the stage to determine the needs of customers Secondstep is Information Search which describes how customers search for information, at thisstage, customers will consider about the pros and cons in order to avoid risks The thirdstep is when customers will evaluate all the alternative products to figure out whatproduct will satisfy them the most After finish considering and evaluating products,customers will move to Purchase step to acquire products Finally, the last step is whencustomers can evaluate the performance of producers whether they are matched withcustomers’ expectation or not However, due to the concern of Layer Clean Vietnamcompany about customers’ satisfaction, only 3rd and 5th steps will be considered becausethese are only steps which have criterion can affect to customers’ experience

Figure 1.2 Consumer decision making process

According to Professional Academy (2017), the Marketing Mix or 7Ps is a tool todetermine what a product and brand can offer to customers The 7Ps contains Products;Place; Price; Promotion; People; Process and Physical evidence which are covermarketing for both goods and service However, because Layer Clean Vietnam company

is a new company which is focusing on mainly providing products and service is notcomprehensively developed, so we will evaluate the first 4Ps only, the last 3Ps will beused for recommendation

Figure 1.3: The 7ps framework

Content: The research focuses on customers’ experience and customers’

satisfaction to Layer Clean Vietnam company’s organic home care products withthe responses from customers who have already purchased and used Layer CleanVietnam company’s products, with the product of organic diswashing

- Location: No 18, Lane 17 Bui Xuong Trach, Khuong Dinh, Thanh Xuan, Hanoi

- Time:

+ The time for data collection is from April 2017 to July 2017,

+ The solutions proposed can be used within 1-2 years since 2017.

1.6 Thesis structure

Chapter 1: Introduction

Chapter 2: Theoretical background on customer satisfaction

Chapter 3: Analyzing the influence of each factors to customer satisfaction ofLayer Clean Vietnam company’s organic dishwashing liquid product line

Chapter 4: Recommendation to improve customer satisfaction

CHAPTER 2:

THEORETICAL BACKGROUND ON CUSTOMER SATISFACTION

1

2

According to Oliver (1999), customer satisfaction is the state where customer willresponse to compare the difference between their expectation and experience.Basically, customer satisfaction could be explained as the process to describerelationship between confirmation and disconfirmation In general, customers willform their expectation prior to purchasing products and then the experience withproducts’ performance will decide the level of perceived quality and it could alsoaffect to customers decision about whether the products could satisfy their needs ornot In case received performance is lower than the expectation from customer, it will

be considered as dissatisfaction If the products could perform equal or more thancustomers’ expectation, customers will consider that they are satisfied with products.However, if the performance that could exceed customers’ expectation, customerswill change to state where they feel overjoyed and it might lead to repeat purchase andloyalty

Customer satisfaction is defined as an "evaluation of the perceived discrepancybetween prior expectations and the actual performance of the product" (Tse andWilton, 1988, Oliver 1999) Satisfaction of customers with products of a company isconsidered as most important factor leading toward competitiveness and success(Hennig-Thurau and Klee, 1997) Customer satisfaction is actually how customerevaluates the ongoing performance (Gustafsson, Johnson and Roos, 2005) According

to Kim, Park and Jeong (2004) customer satisfaction is customer’s reaction to thestate of satisfaction, and customer’s judgment of satisfaction level Customer

satisfaction is very important in today’s business world as according to Deng et al.,(2009) the ability of a service provider to create high degree of satisfaction is crucialfor product differentiation and developing strong relationship with customers.

Customer satisfaction makes the customers loyal to one consumer serviceprovider Previous researchers have found that satisfaction of the customers can helpthe brands to build long and profitable relationships with their customers (Eshghi,Haughton and Topi, 2007) Though it is costly to generate satisfied and loyalcustomers but that would prove profitable in a long run for a firm (Anderson, Fornelland Mazvancheryl, 2004) Therefore, a firm should concentrate on the improvement

of service quality and charge appropriate fair price in order to satisfy their customerswhich would ultimately help the firm to retain its customers (Gustafsson, Johnson andRoos, 2005)

It is a common phenomenon that the services a brand offers and the price itcharges actually determine the level of satisfaction among its customers, than anyother measure (Turel et al 2006) Customer’s involvement is also important as whenbuyer consider the product important and invests time to seek information then itultimately enhances the satisfaction level (Russell-Bennett, McColl- Kennedy andCoote, 2007) This satisfaction may influence the concerned company by repurchase,purchase of more products, positive word of mouth and willingness of customer topay more for the particular brand Any business is likely to lose market share,customers and investors if it fails to satisfy customers as effectively and efficiently asits competitors is doing (Anderson, Fornell, and Mazvancheryl, 2004)

Figure 2.1 The Buyer Decision Making Process

(The Consumer or Buyer Decision Making Process is the method used by marketers

to identify and track the decision making process of a customer journey from start to finish It is broken down into 5 individual stages which we have decided to demonstrate with our latest decision making journey surrounding some rather sorry looking trainers)

2.2.1 Problem Recognition (I need new trainers)

The first stage of the process is working out what exactly you or the customerneeds The customer feels like something is missing and needs to address it to getback to feeling normal If you can determine when your target demographic developsthese needs or wants, it would be an ideal time to advertise to them

In our case we noticed our running trainers were looking a little worse for wearand we acknowledged the need for a new pair

2.2.2 Information search

This is the search stage of the process One that is continually changing from oldfashioned shopping around to the new shop front which is Google (other searchengines are available - apparently) Information is not only gathered about stuff and

on things but from people via recommendations and through previous experiences wemay have had with various products

In this stage a customer is beginning to think about risk management A customermight make a pro’s vs con’s list to help make their decision People often don’t want

to regret making a decision so extra time being put into managing risk may be worthit

In our case we googled trainer reviews, and searches such as “what is the besttrainer for dirt running?” among other searches as well as remembering that we didn’tlike Gola or Dunlop shoes and had a nasty experience with a pair of Filas in the 90’s.

In line with our example we started questioning if we actually needed runningshoes: are there alternatives out there? Were our original trainers that bad? Theanswers were Yes/Yes but none I liked/Yes they really were So the process was able

In our customer journey we purchased some rather nice Asics runners as we had awonderful experience with them previously, they were well priced on the market andthe marketing around Asics trainers has always linked them to being the best option

for “real athletic trainers” The positioning of the product also lent itself to where theywere purchased, a sport shop rather than a shoe shop. 

2.2.5 Post Purchase satisfaction or dissatisfaction

The review stage is a key stage for the company and for the customer likewise.Did the product deliver on the promises of the marketing/advertising campaigns? Didthe product match or exceed expectations?

If a customer finds that the product has matched or exceeded the promises madeand their own expectations they will potentially become a brand ambassadorinfluencing other potential customers in their stage 2 of their next customer journey,boosting the chances of your product being purchased again The same can be said fornegative feedback which, if inserted at stage 2, can halt a potential customer’s journeytowards your product

To finish our customer journey – we very much like the trainers we have chosen –

we would recommend them to a friend, and on purchasing our next set of trainers.would probably make a similar brand or product choice Our satisfaction has made us

a brand ambassador for the company who created our wonderful trainers

Marketing is a continually evolving discipline and as such can be one thatcompanies find themselves left very much behind the competition if they stand still fortoo long One example of this evolution has been the fundamental changes to the basicMarketing mix Where once there were 4 P’s to explain the mix, nowadays it is morecommonly accepted that a more developed 7 P’s adds a much needed additional layer ofdepth to the Marketing Mix with some theorists going even going further

Simply put the Marketing Mix is a tool used by businesses and Marketers to helpdetermine a product or brands offering The 4 P’s have been associated with theMarketing Mix since their creation by E Jerome McCarthy in 1960

2.3.1 The Marketing Mix 4 P’s:

 Product - The Product should fit the task consumers want it for, it should work and it

should be what the consumers are expecting to get

 Place – The product should be available from where your target consumer finds it

easiest to shop This may be High Street, Mail Order or the more current option via commerce or an online shop

e- Price – The Product should always be seen as representing good value for money.

This does not necessarily mean it should be the cheapest available; one of the maintenets of the marketing concept is that customers are usually happy to pay a littlemore for something that works really well for them

 Promotion – Advertising, PR, Sales Promotion, Personal Selling and, in more recent

times, Social Media are all key communication tools for an organisation These toolsshould be used to put across the organisation’s message to the correct audiences  inthe manner they would most like to hear, whether it be informative or appealing totheir emotions

Figure 2.2 The Marketing Mix 4 P’s