Improving customer service quality for individual customers at vndirect securities joint stock company

NATIONAL ECONOMICS UNIVERSITYBUSINESS SCHOOL LUU VINH HIEN IMPROVING CUSTOMER SERVICE QUALITY FOR INDIVIDUAL CUSTOMERS AT VNDIRECT SECURITIES JOINT STOCK COMPANY Bachelor of Business A

NATIONAL ECONOMICS UNIVERSITY

BUSINESS SCHOOL

LUU VINH HIEN

IMPROVING CUSTOMER SERVICE QUALITY FOR INDIVIDUAL CUSTOMERS AT VNDIRECT SECURITIES JOINT STOCK COMPANY

Bachelor of Business Administration in English (E-BBA)

Thesis

HANOI, 2016

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NATIONAL ECONOMICS UNIVERSITY

This thesis is to fulfill the requirement of English Bachelor of BusinessAdministration (E-BBA), Business School – National Economics University (NEUBusiness School)

Firstly, I would like to express my sincerely appreciation to my supervisor –

Dr Nguyen Quoc Duy – who always gives me his dedicated guidance, instructionsand valuable comments for improvement of my study throughout the whole process

of this thesis

Secondly, I would like to thank to all teachers and staff of NEU BusinessSchools, who have provided me with their knowledge and support for more thanthree year studying here

Besides, I would like to thank VNDIRECT’s colleges, especially Mr VuHoang Viet and Ms Trinh Thanh Thuy, for their support and advices during myinternship I would like to thank all customers who helped me conduct this survey tocomplete my research Their support is an important factor to the success of thisthesis

Last but not least, I would like to express my profound gratitude to my familyand friends who have encouraged and supported me during my time studying at theE-BBA program

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TABLE OF CONTENT

ACKNOWLEDGEMENT 1

TABLE OF CONTENT 2

LIST OF TABLES 5

LIST OF CHARTS 6

LIST OF FIGURES 6

EXECUTIVE SUMMARY 7

CHAPTER 1: INTRODUCTION 9

1.1 RATIONALE 9

1.2 RESEARCH OBJECTIVES 10

1.3 RESEARCH QUESTIONS 10

1.4 RESEARCH SCOPE 10

1.5 RESEARCH METHODOLY 11

1.5.1 Secondary Data 11

1.5.2 Primary Data 11

1.5.3 Data analysis 12

1.6 STRUCTURE OF THE RESEARCH 12

CHAPTER 2: THEORETICAL BACKGROUND ON THE QUALITY OF CUSTOMER SERVICES IN SECURITIES COMPANIES 14

2.1 THEORETICAL BACKGROUND OF CUSTOMER SERVICE QUALITY 14

2.1.1 The concept of customer service 14

2.1.2 The concept of customer service quality 15

2.2 THE CONCEPT OF QUALITY OF SECURITIES COMPANY 17

2.2.1 Definition of securities company 17

2.2.2 Functions of securities companies 17

2.3 MODEL FOR MEASURING CUSTOMER SERVICE QUALITY 18

2.3.1 Service quality model of Gronroos, 1984 18

2.3.2 SERVQUAL Model of Parasuraman & ctg (1985) 20

2.3.3 SERVPERF Model of Cronin and Taylor (1992) 25

2.3.4 Model of Luong Thi Mai Huong (2015) of MBA thesis “Service quality of Nha Viet Real Estate Joint Stock Company” 27 2.4 CONCEPTUAL FRAMEWORK 29Đề án Kinh tế quốc tế

CHAPTER 3: RESEARCH METHODOLOGY 34

3.1 RESEARCH PROCESS 34

3.2 RESEARCH METHODOLOGY 35

3.2.1 Qualitative research 35

3.2.2 Quantitative research 35

3.3 DATA COLLECTION 36

3.3.1 Secondary data 36

3.3.2 Primary data 37

3.4 DATA ANALYSIS 38

3.4.1 Cronbach’s Alpha Reliability Analysis 38

3.4.2 Exploratory Factor Analysis (EFA) 38

3.4.3 Linear Regression Analysis 39

CHAPTER 4: THE RESULT OF THE RESEARCH – THE CURRENT SITUATION OF CUSTOMER SERVICE QUALITY FOR INDIVIDUAL CUSTOMERS AT VNDIRECT SECURITIES JOINT STOCK COMPANY 40

4.1 OVERVIEW OF VNDIRECT SECURITES JOINT STOCK COMPANY 40

4.1.1 Company Profile 40

4.1.2 History of Development 41

4.1.3 Functions and missions of VNDIRECT 42

4.1.4 Company Structure 44

4.1.5 VNDIRECT’s services, market and customers 44

4.2 THE ASSESSMENT OF CUSTOMER SERVICE QUALITY FOR INDIVIDUAL CUSTOMER AT VNDIRECT SECURITIES JOINT STOCK COMPANY 49

4.2.1 Research Sample Description 49

4.2.2 Respondent Profile 50

4.2.3 Cronbach’s Alpha Reliability Analysis 56

4.2.4 Exploratory Factor Analysis 59

4.2.5 Linear Regression Analysis 62

4.2.6 The current situation of customer service quality for individual customers at VNDIRECT Securities Joint Stock Company 68 4.3 CONCLUSION 75Đề án Kinh tế quốc tế

CHAPTER 5: RECOMMENDATIONS FOR IMROVING THE QUALITY OF CUSTOMER SERVICE FOR INDIVIDUAL CUSTOMERS AT VNDIRECT

SECURITIES JOINT STOCK COMPANY 78

5.1 ORIENTATIONS TO IMPROVE THE CUSTOMER SERVICE QUALITY FOR INDIVIDUAL CUSTOMERS AT VNDIRECT SECURITIES JOINT STOCK COMPANY 78

5.2 RECOMMENDATIONS AND SOLUTIONS TO IMPROVE THE CUSTOMER SERVICE QUALITY FOR INDIVIDUAL CUSTOMERS AT VNDIRECT SECURITIES JOINT STOCK COMPANY 79

5.2.1 Improving human resources and competence of staff 79

5.2.2 Improving and utilizing technology advantages 80

5.2.3 Upgrading customer database collection 81

5.2.4 Improving the Hotline and Call Center 82

5.2.5 Improving marketing strategies and creating brand image 82

5.2.6 Applying CRM system in management 83

CONCLUSION 84

REFERENCES 85

APPENDIX 1: SURVEY FORM FOR CUSTOMERS 88

APPENDIX 2: IN-DEPTH INTERVIEW QUESTIONS FOR VNDIRECT MANGAGERS 94

APPENDIX 3: DESCRITIVE STATISTICS 95

APPENDIX 4: CRONBACH’S ALPHA RELIABILITY ANALYSIS 96

APPENDIX 5: EXPLORATORY FACTOR ANALYSIS 99

APPENDIX 6: CORRELATION ANALYSIS 102

APPENDIX 7: REGRESSION ANALYSIS 103

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LIST OF TABLES

Table 4.1 Cronbach’s Alpha Reliability Analysis 57

Table 4.2 Cronbach’s Alpha Reliability Analysis Result Summary 59

Table 4.3 Rotated Components Matrix 60

Table 4.4 EFA results for Independent Variables 61

Table 4.5 EFA results for Dependent Variables “Quality of Service” 62

Table 4.6 Correlation Analysis for factors influencing customer service quality of individual customers at VNDIRECT 63

Table 4.7 Model Summary 64

Table 4.8 ANOVA analysis result 65

Table 4.9 Coefficient of Regression Model 66

Table 4.10 Hypothesis Test Results 67

Table 4.11 Customer assessment of VNDIRECT services 68

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LIST OF CHARTS

Chart 4.1 Age group of Respondents 50

Chart 4.2 Gender groups of Respondents 51

Chart 4.3 Education Level of Respondents 52

Chart 4.4 Investing experience of Respondents 52

Chart 4.5 Information Approaches of Respondents 53

Chart 4.6 Types of services used by Respondents 54

Chart 4.7 Making transactions method of Respondents 55

Chart 4.8 Frequency of using VNDIRECT services of respondents 56

Chart 4.9 Customers’ Assessment of VNDIRECT Services 74

LIST OF FIGURES Figure 2.1 The Nordic model (Gronroos,1984) 19

Figure 2.2 Customer Service Model of Parasuraman (1985) 22

Figure 2.3 Measuring Service Quality using SERVQUAL model 23

Figure 2.4 Measuring Service Quality using SERVPERF model 26

Figure 2.5 Conceptual Framework for measuring customer service quality at VNDIRECT Securities Joint Stock Company 31

Figure 3.1 Research process 34

Figure 4.1 Organization Structure of VNDIRECT 44

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EXECUTIVE SUMMARY

In the year 2000, Vietnam Stock Market was established and created amethod to strengthen the not only the development of capitalization but also theeconomy of the country The appearance of such many securities company create acompetitive environment in the stock market and requires them to continuouslydevelop and improve its competence

In this situation, VNDIRECT Securities Joint Stock Company was founded in

2007 with specialization of securities services The company has been expanding itsposition in stock market and become one of top ten Securities Company in VietnamStock Market Contribution to the success of the company is the important role ofcustomer service for individual customers In this thesis, I aim to identify the factorsinfluence to customer service and the current situation of customer service qualityfor individual customers of VNDIRECT Securities Joint Stock Company –, in order

to find some practical solutions to improve the quality of customer service forindividual customers and competitive advantages of the company

This research used secondary data collected from articles, reports, officialwebsite of VNDIRECT and primary data collected from interviews with 04 manager

of VNDIRECT and survey of 123 customers having trading account at VNDIRECT.Based on the data collected and a number of analyses, a research model of 05 factorshaving impacting on the quality of services as well as the strengths and weakness ofthe customer service system at VNDIRECT were defined

After using SPSS and Microsoft Excel for analyzing, the result shows that the

05 factors - – which are “Transactions”, “Infrastructure and Facilities”,

“Competence of Staff”, “Customer Care” and “Image of Company”- all havepositive impact on quality of service at VNDIRECT It is also revealed that currently

at VNDIRECT, the transactions process and the technology system of VNDIRECTare highly praised by the customers Fortunately, along with competence of staff,

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they are the main causes which influences the most to the quality of services forindividuals experiencing securities services at VNDIRECT However, there are stillsome problems with customer care and the telephone hotline which troublecustomers with some inconveniences, which requires VNDIRECT to haveimmediately solutions.

Being aware of these issues, a set of recommendations are suggested forimproving the situation at VNDIRECT, including human resource policies, utilizingcutting edge technology, improving staff competence (especially hotline staff) andfocusing on building brand image In these solutions, technology is significantlyemphasized because its number of applications is enormous and it is also the maincompetitive advantage compared to other companies By utilizing technology, notonly the management process will become much easier but also the investmentexperiences of the customers as well

Hopefully, these recommendations will be not only useful for the situation ofVNDIRECT Securities Joint Stock Company but also other securities companies inthe industry to help the quality of customer service become more professional andbrings the best benefits for the customers and the economy

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CHAPTER 1 INTRODUCTION1.1 RATIONALE

In the year 2000, Vietnam Stock Market was established and created amethod to strengthen the not only the development of capitalization but also theeconomy of the country By the year of 2007 and 2008, there was total of 150securities companies in Vietnam The appearance of such many securities companycreated a competitive environment in the stock market and provide a large number

of choices for the investors Furthermore, becoming a member of WTO makes theVietnam market more competitively among securities companies

In order to compete with other companies and continue to develop, it isessential for VNDIRECT Securities Joint Stock Company to maintain therelationship with current customers and attract new customers by always focus onincreasing value for the clients, especially in the quality of customer service It isalso vital to assess the current quality of services and see if whether the customer aresatisfied with these services or not In fact, the satisfaction of customers is the mostimportant tool to help boost the sales and generate profits for the company.Furthermore, understanding the current situation of customer service would alsohelp the Board of Management to have an accurate and overall view of thecompany’s service quality and develop strategies for future development This is

also the reason for the research “Improving the customer service quality for individual customer at VNDIRECT Joint Stock Company” to be conducted

Hopefully, this research will be not only useful for the situation ofVNDIRECT Securities Joint Stock Company but also other securities companies inthe industry to help the quality of customer service become more professional andbring the best benefits for the customers and the economy.Đề án Kinh tế quốc tế

1.2 RESEARCH OBJECTIVES

The purpose of the research is to:

- Define factors to measure the service quality for individual customers at VNDIRECT Securities Joint Stock Company

- Assess the factors of service quality for individual customers at VNDIRECT Securities Joint Stock Company

- Analyze the current situation of customer service quality for individual customers at VNDIRECT Securities Joint Stock Company

- Suggest several solutions and recommendations to improve the quality of customer services for individual customers at VNDIRECT Securities Joint Stock Company

1.3 RESEARCH QUESTIONS

The research aim to answers some questions to achieve the above research

objectives:

- What are the factors to measure the service quality for individual customers

at VNDIRECT Securities Joint Stock Company? How they affect the service quality for individual customers?

- What is the current situation of customer services for individual customers at VNDIRECT Securities Joint Stock Company? What are the strengths and weaknesses? What are the reasons for drawbacks?

- How to solve those problems to improve the current situation?

1.4 RESEARCH SCOPE

- Object of the research: the research focused on customer services quality for individual customers using securities services and how to deal with the Đề án Kinh tế quốc tế

problems of customer services quality at VNDIRECT Securities Joint Stock Company.

- Location: the research was implemented in the Headquarter of VNDIRECT Securities Joint Stock Company – which is located in No.1 Nguyen Thuong Hien Street, Hai Ba Trung District, Hanoi

- Time: The secondary data was collected from 2013 to the present time The primary data was conducted in November 2015

1.5 RESEARCH METHODOLY

1.5.1 Secondary Data

- The secondary data was collected from various reports, books, from sources

on Internet and from other researches to find the suitable theoretical

frameworks and research model of customer service quality

- The secondary data was also collected from reports, articles and documents about VNDIRECT Joint Stock Company to understand the current situation

of the customer service quality for individual customers of the company

1.5.2 Primary Data

- In-depth interview: 04 manager of VNDIRECT Securities Joint Stock

Company were interviewed to collect their opinions about:

o The process of securities services and some required qualities needed

in securities services

o The current situation of securities services at VNDIRECT Securities Joint Stock Company (advantages and disadvantages) and some methods to tackle challenges which the company are now facing with

o Plans for the development of the company in the future

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- Survey customers

o Method: Send survey forms to individual customers who has been using securities services at VNDIRECT Securities Joint Stock Company The survey forms were sent directly when customers came

to VNDIRECT Stock Exchange or via e-mail to answer

o Number of survey: randomly choose 150 customers who are using brokerage services at VNDIRECT Securities Joint Stock Company to

do the survey After that, 123 customer answers was collected.

o Time: the survey was carried out from 10 th November to 30 th

Regression Analysis

1.6 STRUCTURE OF THE RESEARCH

Besides Acknowledgement, Table of Contents, Abbreviations, List of Tables,List of Figures, Executive Summary, References and Appendix, the main content of the research is divided in five chapters as listed below:

Chapter 1: Introduction

Chapter 2: Literature review and theoretical background of customer services qualityChapter 3: Research methodology

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Chapter 4: The situation of customer services quality for individual customers at VNDIRECT Joint Stock Company

Chapter 5: Conclusion and recommendation to improve the customer services quality for individual customers in VNDIRECT Joint Stock Company

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CHAPTER 2 THEORETICAL BACKGROUND ON THE QUALITY OF CUSTOMER SERVICES IN SECURITIES COMPANIES

2.1 THEORETICAL BACKGROUND OF CUSTOMER SERVICE QUALITY

2.1.1 The concept of customer service

Service is a special type of product which is intangible Customers receivethe product through activities of communication, information and perception, which

is provided by the supplier Service is a popular term and there are many differentdefinition that professionals and researchers use to define what service is

According to Gronroos (1990), service is an activity or series of activities ofmore or less intangible nature that normally, but not necessarily, take place ininteractions between customer and service employees and/or physical resources orgoods and/or systems of the service provider, which are provided as solutions tocustomer problems

According to Zeithaml and Bitner (2000), service is an activity, process andmethod to create value for the customers to satisfy their need and demand

According to Kotler and Armstrong (2004), service is an activities or benefitthat businesses offered to the customers to create, strengthen and expandrelationships and cooperation with the customers

According to ISO 8402: Service is the result generated by the operationsbetween the supplier and the customer and the internal activities of the supplier tomeet the need and demand of customers

According to Philip Kotler (1997) service is an action or an activity whichcan be offered by a party to another party, which is basically intangible and cannot

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affect any ownership Service may be related to tangible product or intangibleproduct.

In general, service is a process which takes place in the interactions between thesupplier and customers to meet the demand of customers, in the way that customersdesires

2.1.2 The concept of customer service quality

According to Babakus, E and Boller, GW (1992, pages 253-268), quality ofproducts and services has been a common concern of the society Services quality ishard to define and measure and there are still not any effective method and strategy

to manage the quality of service We could not use the method of controlling andmanaging product tangible products to apply with service quality because servicehas its special characteristics which affect the process of delivering services tocustomers

According to Bowen (1986), unlike tangible products, services are intangibleproducts which are produced and consumed at the same time, in the presence of thecustomer and the service producer The involvement of the human elements duringthe delivery process increases the probability of error occurring on the part ofemployees and customers This is due to the fact that intangible behavioral processes

is not easily controlled (Bowen, 1986)

According to Parasuraman, Zeithaml and Berry (1985), service quality is theperception of customers of the services Also according to Parasuraman at el.(1988), service quality can be defined as an overall judgment of the service similar

to attitude towards the services According to Zeithaml (1987), service quality is theassessment of customers about features of a subject It is the different between theexpectation of customers of the services and the perceived services

According to Lewis and Booms (1984, page 99-107), service quality is aĐề án Kinh tế quốc tế

customers about how good the service is Creating high quality services is theprocess of offering customers with services which satisfy their expectations themost.

According to ISO 8402, service quality can be considered as “gathering thecharacteristics of an object, giving the audience the ability to satisfy therequirements outlined or potential” It also can be understood that service quality isthe satisfaction of customer as measured by differences between service expectedand service perceived

 If the performance of service achieved is higher than the performance ofservice expected, the service quality is excellent

 If the performance of service achieved is equal to the performance of serviceexpected, the service quality is good

 If the performance of service achieved is lower than the performance ofservice expected the service quality is low

If the quality is high, the customers is satisfied when using service If thequality is low, the customers is dissatisfied with the service The value which thecustomer perceived is generated by the value chain of the service offered to thecustomers, with several elements such as: the service, the staff, activities ofcompetitors and knowledge and understanding of customers about the service

The premises of service quality are the delivery process of service to thecustomers and the features of service operation, the knowledge of the customers ingeneral and their understanding about the service Therefore, service quality may beassessed through three aspects: physical quality of service (equipment, office, etc.),quality of the organization or the supplier (operational management, reliability,image, profile, etc.) and quality of delivery process (interactions between supplierand customer)

In general, there are some basic characteristics of service quality:

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- It is much more difficult to assess the quality of service compared to thequality of tangible products.

- Service quality is the result of comparison process between the expectation ofcustomer of the service and the actual performance that the supplier offer tomeet the demand and need of the customers

2.2 THE CONCEPT OF QUALITY OF SECURITIES COMPANY

2.2.1 Definition of securities company

A securities company is a company trading stocks and bonds on the behalf ofits clients Securities companies act as medium parties between buyers and sellers intransactions on the stock exchange market, bringing investment opportunities forinvestors Securities companies also have services that providing their clients withfacts that would help them on their investment decisions

The main service of securities companies is brokerage services Researching

is one of the main jobs of securities brokers They research performances of JointStock Company and securities and then categorizes these stock into differentportfolios to present to the clients As an advisor, a securities broker must know themarket trends, factors affecting movements in the stock market, analyze companies

in different industries that could influence their clients’ investments and help theirclients to make decisions

Besides brokerage services, securities companies also offer customers withother securities services such as depository, corporate finance, proprietary tradingand portfolio management

2.2.2 Functions of securities companies

There are several basic functions of Securities Company:

 Acting as a mediating party, Securities Company create a system that

flexibly mobilizes asset from inactive money sources to people who want to

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spend financial capital (through the activities of underwriting and securitiesbrokerage services).

 Creating valuating mechanism for transactions (through the auction

system): The investors could actively and objectively set the price Withinformation sources about market, businesses of companies, transactionsmechanism, investors could accurately set the price for their investments

 Creating liquidity for securities, easily transforming from securities to cash

and vice versa, which helps investors to minimize financial loss duringinvesting

 Adjusting and stabilizing securities market (through the activites of

proprietary trading and the role as a market creator): Securities Companyalso has another vital role is to interfere and adjust securities’ price.According to government’s regulations, securities companies must spend aspecific proportion of their own transactions to buy stocks whenever theprice of stock market decreases and to sell securities when the priceincreases

 Consulting investors: with their financial specialties such as financial

consulting or acting as a medium during transactions, Securities Companysales force have saved customers’ time and cost when investing in stockmarket which, as a result, also increases investing efficiency SecuritiesCompany also offer various consulting services through market researchingand providing individuals, companies and organizations with information inorder to make precise decisions, minimize risks and increase profit

 Providing the authorities with information of stock market

2.3 MODEL FOR MEASURING CUSTOMER SERVICE QUALITY

2.3.1 Service quality model of Gronroos, 1984

Gronroos developed the Nordic Model of Service Quality in 1984 Thismodel study how technical quality and function quality influence the perceived

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service quality and expected service quality, based on the model of 5 performancegap of Parasuraman The model of Gronroos (1984) shows that the perception ofcustomer about the service quality based on three main factors The first one related

to what customer feel satisfy of the service, what they achieved The second factorrelated to how they are satisfied and the third one related to image and reputation ofthe company or organization

Figure 2.1 The Nordic model (Gronroos,1984)

(Source: Zeithaml, V.A & M.J.Bitner, 2000)

 Technical Quality: including the real value that the customers achieve fromthe services that the company supply

 Functional Quality: represent the process of delivering service to thecustomers using service It includes five components: reliability, tangible,assurance, responsiveness and empathy

 Image and reputation: Image and reputation factor acts as a filter for theperception of the customer about the service The consumers could assess theĐề án Kinh tế quốc tế

past experiences It even showed more clearly when the customers often usethe service or interact with the service provided by the same supplier timeafter time or suppliers providing the same kind of service.

The model assumes that there are a direct connection between the servicequality perceived by the customers and aspects of function quality and technicalquality Furthermore, image of the company has indirect influences to quality ofperceived quality Finally, the model also supposes that quality of the service leads

to the satisfaction of consumers

In conclusion, the aim of the researches about customer service quality is tofind out the components of function quality and technical quality, the influences ofimage to the perception of the customers about the customer service quality

2.3.2 SERVQUAL Model of Parasuraman & ctg (1985)

Parasuraman & ctg (1985, 1988) was the pioneer in researching the servicequality The success of the research created an excellent method to measure andstudy customer’s evaluation of customer service quality, which would helpcompanies and businesses to enhance the quality of their service SERVQUAL iscombined by two words “Service” and “Quality” This model then continued toimprove through concentrating on the “customer’s perceived service quality” Theperception of customers is the most accurate and objective measurement of customerservice quality

According to Parasuraman & ctg (1985), in any type of service, the qualityperceived by the customers could be analyze in a model with 10 components, andthen in the early 1990s, the author refined the model, which created the acronymRATER, with five factors listed below:

 Reliability: represent the ability to supply the customers with promisedservice with a trustworthy and accurate manner right in the first occasion.Đề án Kinh tế quốc tế

It also showed in several aspects such as time, schedule or correct and to-date information.

up- Assurance: represent the knowledge and behaviors of service providersand their ability to convey confidence and trust to the customers

 Tangibles: represent the physical evidence of the service provided, such

as appearances of the staff, equipment or facilities

 Empathy: represent the ability to express concern or provide cares orattention for each individual customers

 Responsiveness: represent the readiness and willingness of employees tohelp customers by providing them with rapid and prompt services

According to SERVQUAL model, there are five gaps which affect theperceived service quality:

 Gap 1: the first gap is the difference between customer’s expectations forquality of the service and the perception of the provider about theircustomer’s expectations This is basically due to the reason that thesupplier do not understand what characteristics of the service enhancecreate quality of the service

 Gap 2: the second gap is the difference between the perceptions of theprovider about their customer’s expectations with the process ofconverting perceptions into criteria of service quality and deliver them inaccordance with customer expectations, despite the fact that they areaware of the expectations of customers

 Gap 3: the third gap occurs when the staff providing service to thecustomers could not perform under the criteria identified The role of staffinteracting directly with the customers is essential to create high qualityservice

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Figure 2.2 Customer Service Model of Parasuraman (1985)

(Source: Parasuraman, A.V.A Zeithaml, & Berry, L.L (1988))

 Gap 4: the forth gap appears when there is a difference between thecommunication and information that the customer receive about theservice and the service delivery These information might increase theexpectation of customer about the service and also decrease the quality ofservice that customer perceived if the customer are not provided with thepromised service Advertising or media play an important role in this gap

 Gap 5: the fifth gap occurs when there is a difference between theexpected quality and the quality of service that the customer actually feelwhen they consume the service According to Parasurama et al (1985),service quality depends on this fifth gap If the customer do not find anydifferences between the quality of service they expected and the quality ofservice they perceived, the service quality is considered as excellent

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Parasuraman et al (1985) suggested that service quality is a function of thefifth gap The fifth gap depends on the other four gaps Therefore, to shorten thefifth gap and increase the quality of the service, service administrators must attempt

to bridge this gap

Figure 2.3 Measuring Service Quality using SERVQUAL model

(source: Parasuraman, A.V.A Zeithaml, & Berry, L.L, 1988)

The SERVQUAL model includes 2 parts, each part has 22 statements Thefirst part aims to define the expectation of customer about the service they consumewithout considering the service supplier while the second part has the role to definethe perception of the customer about the service provided by a business which isbeing researched After that, the result shows the gap between the expectation andthe perception of customers about the service, which may be showed by thisequation:

Service quality = Level of perception – Level of expectationThe statements are:

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 TANGIBLES

o Have up-to-date equipment

o Employees are well dressed and neat in appearance

o Physical facilities are visually appealing

o The appearance of physical facilities is in keeping with the type of service

 RELIABILITY

o Show sincere interest in solving customers’ problems

o Performs the service right at the first time

o Customers feel trust in the services provided

o Provides services at the time promised

o Maintains error-free records

 RESPONSIVENESS

o Inform customers when services will be performed

o Offers prompt services to customers

o Always willing to help customers

o Readily respond to customers’ request

 ASSURANCE

o Able to instill confidence in customers

o Customers feel safe in their transactions

o Employees are courteous at all the times

o Have knowledge to answer customers’ requests

 EMPATHY

o Have convenient operating hours to all

o Employees give personal attention to all

o Employees know what customers’ needs are

o Employees have customers’ best interests at heart

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o Employees understanding customers’ needs

2.3.3 SERVPERF Model of Cronin and Taylor (1992)

After a number of researches and testing as well as applications,SERVQUAL is widely considered a meaningful measurement of customer servicequality However, according to review of Francis Buttle (1996) about SERVQUALmodel, the process of measuring with SERVQUAL is long and sometimes annoying

as the respondents have to answer 44 statements about both their expectations andperceptions (22 statement in each part of the survey), which would make themconfused Furthermore, the definition of the expectations of customers about theservice is sometimes equivocal, which would likely to make their evaluation aboutthe service to be changeable in different situations Therefore, a variation ofSERVQUAL named SERVPERF was made to overcome these troubles

Introducing by Cronin and Taylor (1992), the SERVPERF model (which isnamed by combining two words “Service” and “Performance”) measures the quality

of service only by the quality of perceived service (instead of evaluating bothexpectations and perceptions of customers like SERVQUAL) Cronin and Taylor(1992) said the best and most effective method to assess customer service quality is

to measure the quality of perceived service and researchers do not need to considerabout the expectations and weighted number assessment of five dimensions inSERVQUAL The SERVPERF model also uses 22 statements, which is similar tothose of SERVQUAL, in the questions part of customer’s perception about theservice and eliminate the customer’s expectation part in the questionnaire Croninand Taylor (1992) concluded that in the SERVPERF, service quality is showed by:

Service quality = Level of perception

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Figure 2.4 Measuring Service Quality using SERVPERF model

(Source: J, Joseph Cronin, Jr & Steven A Taylor (1992))

According to Quester and Romaniuk, 1997 (referenced by Nguyen HuyPhong and Pham Ngoc Thuy, 2007) the results of researches in the advertising andmedia industry of Australia showed that in theory, the SERVQUAL model havebetter results compared to SERVPERF However, the actual results when applyinginto reality is not in accordance with the theories In later researches, Nguyen HuyPhong and Pham Ngoc Thuy (2007) also did a comparative study of SERVQUALand SERVPERF in the Vietnamese Market and the result showed that:

 Applying SERVPERF model give the better results than SERVQUAL

 The questionnaire of SERVPERF model is a half shorter than that ofSERVQUAL, which helps saving time of respondents and avoiding thecases of customer being confusing and annoying

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 Eliminating the uncertainty of customer about the definition ofexpectations help to increase the quality of data collected, the credibilityand stability of variables.

2.3.4 Model of Luong Thi Mai Huong (2015) of MBA thesis “Service quality of

Nha Viet Real Estate Joint Stock Company”

In thesis “Service quality of brokerage service of Nha Viet Real Estate Joint

Stock Company” of Luong Thi Mai Huong (2015) – National Economics

University, the author conducted a deep research in factors influence customerservice quality of real estate brokerage service Different sources of secondary datasuch as reports, articles and researches related to real estate service quality ofVietnamese and foreign authors were well-utilized to provide theoreticalbackground for this research The primary data were also collected with in-depthinterview questions for Nha Viet’s director and sale managers and survey 200individual customer of brokerage services In this research, the author developeddimensions to measure service quality of Nha Viet brokerage service based onSERVQUAL model of Parasuraman et al, SERVPERF model of Cronin & Taylorand a number of foreign researches related to real estates The data collected wasanalyzed by SPSS software, measurement was assessed by Cronbach AlphaReliability Test and Exploratory Factor Analysis (EFA) The result helped the authorfind out 08 factors influence the quality of brokerage services of Nha Viet and thelevel of effect of each factor toward quality of brokerage services of Nha Viet

The statements are:

 COMPETENCE OF STAFF

o Employees have knowledge to answer the customers’ requests

o Employees offer prompt services

o Employees are always willing to help customers.Đề án Kinh tế quốc tế

o Employees have professional attitudes.

o Employees always have customers’ best interest at heart

 CUSTOMER CARE

o Company solve customers’ complaints quickly and satisfactorily

o Procedures are easy and convenient

o Customer service hotline work effectively

o Employees know what customers’ need are

o Warranty activities are done within the promised time

 COMMUNICATION ACTIVITIES

o Advertising activities are attractive

o Frequently provide customers with promotions

o Advertisements of company appear in almost every media

o Company often have shows to introduce products and services to customers

o Company often have meetings with customers

 IMAGE OF COMPANY

o Company has trustworthy broker services

o Employees has professional attitudes

o The transactions office are friendly

o Employees’ uniforms are nicely designed

o Website is friendly and easy to access

 TANGIBILITIES

o Company’s office are hygiene

o Facilities and equipment are modern

o Location of company is easy to find

o Company effectively apply modern technology into transactions process

Đề án Kinh tế quốc tế

 LAWS AND POLICIES

o Policies of government about real estate businesses are up-to-date

o Law system of real estate is strictly regulated

o Banks’ interest rate policies

o Activities of quality supervision and building of the authorities

 FEE

o Broker fees are competitive

o Company often provide customer with discount

o Broker fees are publicized to the customers

 PRODUCTS

o Real estate products of company have a wide range of variety

o Designing quality meets the technical requirements

o Housing products meet the demand of all type of customers

o Decorations are modern and attractive

 QUALITY OF SERVICE

o Company is trustworthy with customers

o Customers willing to introduce company’s services to relatives

o Customers always think of company when having demand for selling

or buying real estate

o Customer are always satisfied when making transactions at company

2.4 CONCEPTUAL FRAMEWORK

The research “Improving customer service quality for individual customers inVNDIRECT Joint Stock Company” is based on other researches, reports and articlesrelated to customer service quality and brokerage service quality and the results ofthose documents The theoretical background is based on service quality measuringmodels such as SERVQUAL of Parasuraman & ctg (1985), SERVPERF of Cronin

Đề án Kinh tế quốc tế

& Taylor (1992) and Gronross (1984) Combining the measuring criteria of thesethree model is necessary to have a total assessment of customer service quality forindividual customers in VNDIRECT In this context, 22 statements of 5 dimensionsSERVPERF model was applied at first to measure the perception of customer, ratherthan applying the SERVQUAL model These statements and dimensions was alsomodified and combined with measuring criteria of technical quality dimensionaccording to the model of Gronroos (1984) The results of several customer servicequality researches such as Thesis “Service quality of brokerage service of Nha VietReal Estate Joint Stock Company” of Luong Thi Mai Huong (2015), Thesis

“Improving customer services quality for individual customers at Nam HanoiBranch of Maritime Bank” of Phi Thi Le Quyen (2015), the research “SERVQUAL

or SERVPERF – A comparative study in Vietnamese supermarket” of Nguyen HuyPhong and Pham Ngoc Thuy, Ho Chi Minh City University of Technology,published in Science and Technology Development Magazine, vol.10, no.8 (2007),the research“Research of Service Quality Measuring Models” of Phan Chi Anh,Nguyen Thu Ha, Nguyen Hue Minh, University of Economics and Business –Vietnam National University, published on the magazine of University ofEconomics and Business – Vietnam National University, vol.29, no.1 (2013), theresearch “Applying SERVPERF measurement to assess service quality of mobilecommunication service in Da Nang” of Nguyen Thi Phuong Linh As a result, 6main factors (5 independent, 1 dependent) with 34 criteria was formed to create themeasuring model for customer service quality of individual customers inVNDIRECT The model is described as below:

QS= β0 + β1*IF + β2*CS + β3*CC + β4*TS + β5*IM + U i

Đề án Kinh tế quốc tế

Figure 2.5 Conceptual Framework for measuring customer service quality at

VNDIRECT Securities Joint Stock Company

(Source: Author’s idea)

 Infrastructures and facilities (IF)

o IF1 Location of VNDIRECT office is easy for customers to find andaccess to

o IF2 Operation hours is convenient to customers’ demand

o IF3 VNDIRECT office has high technology and modern equipmentand facilities (computers, stock transactions screens, website)

o IF4 VNDIRECT office is visually appealing and hygiene

o IF5 VNDIRECT effectively apply modern technology intotransactions and management process Đề án Kinh tế quốc tế

o CS4 VNDIRECT Staff has professional and polite working attitudes.

o CS5 VNDIRECT Staff always serve to bring for the best benefits forthe customers

o CS6 VNDIRECT Staff always show attentions and listen to personalinvestment demand and investment experiences of each customer

o CS7 VNDIRECT Staff instill confidence in customers

 Customer Care (CC)

o CC1 VNDIRECT solves customer’s complaints and problems quicklyand satisfactorily

o CC2 Processes are convenient and easy

o CC3 Customer service hotline take care of customers’ orderseffectively

o CC4 VNDIRECT’s securities investment workshops providebeneficial and interesting guidelines for customers

o TS3 Making transaction orders by customer service hotline system isaccurate, fast and convenient.

o TS4 Making transaction orders by online website system is accurate,fast and convenient

o TS5 Investment consulting products and services (brokerage services, securitiesnewsletters, etc.) of VNDIRECT are beneficial for customers

o TS6 Financial and transaction supporting services (advanced payment, purchaseorder guarantee, term deposit, securities lending cooperation, etc.) atVNDIRECT are beneficial for customers

o TS7 Information of securities exchange market on VNDIRECT’s website isalways up-to-dated, accurate and easy for customers to access

o TS8 Customers always feel safe and fair when making securities transactions atVNDIRECT

o TS9 VNDIRECT always keep customers’ transactions information secret andaccurate

 Image of company (IM)

o IM1 VNDIRECT provide customers with professional and trustworthy services

o IM2 VNDIRECT staff has professional style while serving customers

o IM3 Transaction environment of VNDIRECT is professionally and friendlydesigned

o IM4 VNDIRECT staff always dress neatly, staff uniform is nicely designed

o IM5 Website of VNDIRECT is nice and professionally designed

 Quality of service (QS)

o QS1 VNDIRECT is a trustworthy securities companies for customers

o QS2 Customer is willing to recommend to friends and family to useVNDIRECT’s securities services

o QS3 Customer is always think of VNDIRECT when customers want toexchange, make transactions or invest into securities

Đề án Kinh tế quốc tế

o QS4 Customer is always satisfied when making securities transactions atVNDIRECT

Đề án Kinh tế quốc tế

CHAPTER 3 RESEARCH METHODOLOGY

3.1 RESEARCH PROCESS

Figure 3.1 Research process

(Source: Author’s Idea)

Research process is carried out through six steps:

1 Conducting research on literature review and theoretical framework; colletingsecondary data

2 Form a list of dimensions to measure VNDIRECT customer service qualityĐề án Kinh tế quốc tế

3 Conducting survey with customers and in-depth interview with VNDIRECTmanagers to collect primary data.

4 Analyzing primary data collected

5 Determining the current situation of VNDIRECT customer service quality forindividual customers

6 Suggesting solutions and recommendations to improve customer servicequality At VNDIRECT Securities Joint Stock Company

3.2 RESEARCH METHODOLOGY

3.2.1 Qualitative research

First, information sources such as reports, books, article, magazine, website aboutsecurities as well as previous researches were collected to have an overall viewsabout the topic of the research

Steps of qualitative research are included:

 Define the factors influencing customer service quality for individualcustomers at VNDIRECT Securities Joint Stock Company

 Define the level of impact of the factors on customer service quality forindividual customers at VNDIRECT Securities Joint Stock Company

 Define the specific demand of customers for customer service quality forindividual customers at VNDIRECT Securities Joint Stock Company

These steps were applied to the in-depth interview with managers in order to receivetheir opinions and add to the measurement of customer service quality model Then,official research theoretical and model were developed

3.2.2 Quantitative research

The quantitative research was done by sending survey form to customers atVNDIRECT office or through email The number of respondents is 123 customers.Đề án Kinh tế quốc tế

Steps of quantitative research are included:

 Design the survey form, conducted a demo survey with 10 customers andadjusted to have appropriate questions

 Official survey: survey with the survey form (give the hard copy of survey toclients coming to VNDIRECT office or sent survey to customers by GoogleForm and email)

The measurement of survey questions is designed based on 04 basic standards:reliability, value, variety and easy-to-answer The measurement guarantee thereliability must exclude the uncertainty and provide trustworthy data In thisthesis, Likert scale with 5 level was used to measure the factors influencingcustomer service quality for individual customers of VNDIRECT

Level 5: Totally agree/ totally satisfy

Level 4: Agree/ satisfy

Level 3: Neutral/ normal

Level 2: Disagree/ dissatisfy

Level 1: Totally disagree/ totally dissatisfy

3.3 DATA COLLECTION

3.3.1 Secondary data

Secondary data used in this thesis is the data collected from within three years viaCompany’s financial reports, articles, websites information or magazine Each year,VNDIRECT announce their official annual report including information such ascompany profile, organization structure, company mission, vision or status of humanresource management Đề án Kinh tế quốc tế

3.3.2 Primary data

Primary data is collected from the evaluation of customer service qualitybased on the point of customers’ view This aims to identify the strengths andweaknesses of the customer service quality for individual customers at VNDIRECT

 Customer survey

o Survey questions: designed according to 05 factors of assessmentcustomer service quality at VNDIRECT mentioned in Chapter 2 Toget a detailed assessment, each criterion is divided into small questions– which would help the customer feel easier to answers

o Method: sent directly to customer coming to VNDIRECT office atNo.1 Nguyen Thuong Hien or sent online Google Form to customervia email

o Number of respondents: the survey form was sent to 150 customer

who have trading account at VNDIRECT As a result, 123 customer gave their answers.

o Implementation survey: the survey was carried out from 1 st November

to 30 th November 2015.

 In-depth interview with manager: the in-depth interview was carried out toreceive VNDIRECT’s manager opinions of factors influencing customerservice quality for individual customers at VNDIRECT and VNDIRECT’splans to improve individual customer service quality in the current situation.The list of interviewees is following:

o Mr Vu Hoang Viet – Director of Individual Customer ServiceDepartment

o Mrs Dam Thi Huong Sam – Marketing Manager

o Mrs Le Huong Mai – Director of Human Resource Department

o Mr Nguyen Tuan Anh – Director of Brokerage Service Department

Đề án Kinh tế quốc tế