Luận văn improve customer service quality the case of techcombank card service

Vietnam national university, HANOL school of business Pham Thi Huong IMPROVE CUSTOMER SERVICE QUALITY THE CASE OF TECHCOMBANK CARD SERVICE Major: Business Administration... * Yo identi

Vietnam national university, HANOL

school of business

Pham Thi Huong

IMPROVE CUSTOMER SERVICE QUALITY

THE CASE OF TECHCOMBANK CARD SERVICE

Major: Business Administration

CHAPTER 1: LITERATURE REVIEW

1.1 Service marketing mix in banks

1.1.1 Service marketing mix

1.1.2 Service marketing, mix in banks

1.2.1 Deinition Hee Hee Hee e1]

1.3.2 Wbat đeftermines customer satisfactien? ke ao 12

CHAPTER 2: TECHCOMBANK CASE STUDY

2.1 Status of Techcombank and introduction of its card service wee BS 2.1.1 Techcombank Personal cards and card services 25

2.1.1.1 Prospects of card im Vietnam market ke se 2S

2.1.1.3 Some success:

s and ambiluous plan of card development 2 2.1.2 Card issuing, using and payment Processes and activities ween BO 2.2 A review of Techcombank’s previous survey on card service: Customer

3.2.1 Buvey objectives ¬— ¬— ¬— verse BI

2.2.2.1 AHendeecs ad pÍTeel

2.2.2.2 Investigation methods: .— — — —¬- 2.3 Results ke ke ke we BF

3.2.1, Failure in Providing in line with the standards and the designed services 55

3.2.1.1 Failure to meet the technological requirements needed for the work 55

attention, resulting in poor quality in providing the consultancy to the customers, and sometimes generating the inconsistency in the customer service among the

CHAPTER 4: RECOMMENDATION

4.1 Invest more in technology for card and card management

4.2 Improve training process and focus on custamer service training for new staff

4.3 Build an ctfective mechanism on quality management saparatedly eee 80 4.4 Establish a specific team to do customer care 81

CONCLUSION

vit

LIST OF TABLES

Table M1: Elements of traditional marketing mix 6

Table 1: Rate of mercased investment capital for accompanied products and service

Table 3: Survey Syslomatic Sampling with crileria of Debit amount for 4 vities 33 Table 4: Survey feedbaeks HHu re HHu re HHu re 34 'Table 5: Survey feedback devided by amounts HHu re 34

Table 7: Total feedbacks on normal issuance time 35

Table 9: Total feedbacks on home-banking regislation sesesntnee 3G

‘Table 10° ‘Total foedbaeks on home-banking usage HHu re .36

Table 12 Average points for feedbacks on Errors 38

‘Table 13° Feedback on serviee staff 1 sesesntnee sesesntnee ee 38

‘Table 14: Feedback on service staff 2 sesesntnee sesesntnee een BB Table 15: Important/satisfaction criterion on customers’ point 39 Table 16: Customer satisfaction on service staff 39 Table 17; Salistaction degree on home-bankang service 40

Table 18 Total overall satisfaction on card service

‘Table 19 Customer satisfaction on Enthusiastic bank s†afF weed

Table 22 Customer satisfaction on main service ©TIÄe[ion wee

Card issuance productivily calculation for old machine Card issuance productivity calculation for cwrent machines Quality indicators of North collection 2009

Quality indicators of Nerth collection 2009

Comparision on cosh serving estimation with high-tech suppor!

LIST OF FIGURES

Figure 1.2; Key factors leading to provider gap Ì ¬— ¬- Figure 1.3: Key factors leading to provider gap 2 1? Figure 1.4: Key factors leading to provider gap 3 18 Figure 1.5: Koy factors leading lo provider gap 4 20 Figure 1.6; Gaps model of service quality ¬— ¬ 22 Figure 2.1: Card issue proeedue ¬— ¬— „u30

INTRODUCTION

© Necessity of the thesis

Banking operations are becoming, increasingly customer dictated, The demand for

‘banking supermalls’ offering one-stop integrated financial services is well on the rise The ability of banks to offer clients access to several markets for different classes of financial instruments has become a valuable competitive edge

Excellent cuslomer service can improve the bank's ability ta lure aMuent prospects,

clevate the bank's profitability, lower bank operation costs, and/or crcate greater

customer loyalty

Customer requirements and satisfaction are the term many people talking about nowaday The customer's requirements must be translated and quantified into

measurable targets This provides an easy way to monitor improvements, and

deciding upon the attributes that need to be concentrated on in order to improve customer satisfaction We can recognize where we need to make changes to create

improvements and delermine if these changes, aller implemented, have led lo

increased customer satisfaction "If you cannot measure it, you cannot improve it" -

Lord William Thomson Kelvin (1824-1907)

With better understanding of customers’ perceptions, comparics can determing the actions required to meet the customers' needs They can identify their own strengths

and weaknesses, where they stand in comparison to their competitors, chart out path

fulure progress and improvement Customer satisfaclion measurement helps to pronicte an increased focus on customer outcomes and stimulate improvements in

* To review available status of service quality on vard service

* To comprehend some important aspects which are related to marketing and

Customer satisfaction concept

* Yo identify the necessary to improve customer service quality for

Techcombank card service

* To provide recommendations and solutions for Techcombank to improve

customer serviee quality for Techcombank card service

© Scope of wark

The scope of study is service qualily and how to unprove service quality The

research scope is also for card customer service of THCLICOMBANK

© Methodology

The study was implemented by result of the previous TRCHCOMBANK survey, research second dala al home, system analysis and comparison method, Because off large customer number, so the study mainly used survey and analysis to solve the issues under business rules and customer behavior theory

‘The study also gather ideas of experts working in customer service and system support for card operation of TECHCOMBANK Expocially, thesis also is the fact experience of 9 years working for TECHCOMBANK up to now

Some models and information from some books, e-books, and article were used to make the line for the thesis Processes and procedures issued by TECHCOMBANK and other banks were also good refference for the study

Based on the findings, the thesis give out some key conclusions and some guideline

solutions which are focused on improving service quality by changing current GAPs

m the bank’s operation

* Contribution of the thesis

The study is of groat practical valuc, providing a comprehensive overview on banking service: Card - which is relatively new in Vietnam ‘this thesis is aimed at showing a [ull picture of card services at a bank, discussing the shoricomings and weaknesses which the Bank needs to pay due attention and timely address so as to achieve its target; Becoming Number | in a fiercely competitive market in Vietnam for the time being

The thesis also posed for such a new service like Card, it requires high technology

and huge investment in order to operate well and to salisfy the demands of targeted

customers,

CHIAPTER 1: LITERATURE REVIEW

1.1 Service markeling mix in banks

1.1.1 Service marketing mix

‘There are many different definitions of service, but by the most simple way, services are deeds, processes, and performances Although we rely on the simple

definition of services, to be aware of that over time services and the service sector

of the economy have been defined in subtly different ways Compatible wilh the

simple way, broad definition is one that defines service to inchide “all economie

activities whose output is not a physical product or construction, is generally

consumed at the time it is produced, and provides added value in forms (such as

convenience, amusement, timeliness, comfort, or health) that are essentially

intangible concems of its first purchaser.”!

A primary issue that marketers face in relation to service perishability is the ability

to inventory Demand forcasting and creative planning or capacity utilization are

therefore important and challenging decision arcas The fact that services cannot typically be returned or resold also implics a need for strong recovery strategics when things do go wrong

One of the most basic concepts in marketing is marketing mix, defined as the clemenls ax organization control that can be used lo satisfy or cormmunicate wilh customers The traditional marketing mix is composed of the four elements (four Ps): product, price, place (distribution) and promotion These elements appear as the core decision variable in many marketing text or marketing plan The notion of mix implies that all the variables are interrelated and depend on each other to some extent Murther, the marketing mix philosophy implies an optimal mix of the four

factors for a given market segment at a given point in time

‘Table M1: Llements of traditional marketing mix

Physical good | Channel types Promotion blend Flexibility

Qualily level Intermediaries - selection Tenns

Accessories Outlet location - training Differentiations

' Principle of Service Marketing, 1994, MCGew Hill

Product lines Managing channel — - Modiatypos

Sales promotion Publicity

as clerks, ticket takers, murses, and phone personnel) are involved in real time ptomotion of service even if their jobs are typically defined in terms of the operational function they perform

Expanded Mix for service:

Because services are produced and consumed simultaneously, customers are often present in the firm’s factory, interact directly with the firm's personnel, and are aclually part of service production process Also, because services are intangible, customers will oflen be looking for any tangible cuc to help (hem understand ihe

Acknowledgement of importance of these additional variables has led services marketers to adopt the concept of an expanded marketing mix for services shown in table 1.3 below:

Table M2: added elements of marketing mix?

? Service Marketing — inteprating customer focus across the firm — Valarie A Zeithaml, Mary Jo Bitner,

Dwayne D Gromler — 4° eddition

Employces Facility Flow of activitics

- Education - Statements Involvement

The emvaironment m which the service is delivered and where the firm and

customers interact, and any tangible components that facilitate performance or communication of the service

‘The actual procedures, mechanisms, and flow of activities by which the service is delivered — the service delivery and operation system

1.1.2 Service marketing mix in banks

Service marketing in banks

Marketing approach in banking, sector had taken significance after 1950 in western countries and then afler 1980 in Turkey New barking percepliveness oriented

toward market had influenced banks to create new market Banks had slarted lo perform marketing and planning techniques in banking in order to be able lo offer

their new services efficiently

Marketing scope in banking sector should be considered under the service markeling framework Performed wrarketing stralegy is the case which is

determination of the place of financial institutions on customers’ mind Bank

marketing dees not only include service selling of the bank but also is the function

which gets personalily and image for bank on its customers’ mind On the other

hand, financial marketing is the fumetion which relates uncongenitalies, differences

and non similar applications between financial institutions and judgement standards

of their customers

The reasons for marketing scope to have importance in banking and for banks to

interest in marketing subject can be arranged as’

Change in demographic structure: Differentiation of population in the number and composition affect quality and attribute of customer whom benefits from banking

services

Intense competition in financial service sector: The competition became intense due

to the growing intemational banking perceptiveness and recently being non limiting for new enterprises in the sector, Increase in liberalization of interest rates has intensified the competition

Bank's wish for increasing profit: Banks have to increase their profits to create new markets, to protect and develop their market shares and to survive on the basis of intense competition and demographic chance levels

‘The marketing, comprehension that are performed by banks since 1950 can be shown as in following five stages:

1 Promation oriented marketing comprehension

t9 Marketing comprehension based on having close relations for customers

Refornist marketing comprehension

Markeling comprehension that focused on specialiving in cerlain areas

wry Research, planning and control oriented marketing comprehension

Marketing activities of firms begin with determination of the market that they offer

their services or goods rms must find out the features of the market that it f anging market

condition While marketing manager is arranging the variables under firm’s control, she/he

* Article “Service marketing in bank3" —http:www.oppapcrs.com

should also adopt the external variables We could call the factors that affect banks’ market as technological developments, Icgal arrangements and competition

Service marketing mix in banks

Nowaday when mentioning about service marketing mix in banking, people think

about these below elements":

PRICE

‘The price which is an important component of marketing mix is named differently

in the base of transaction exchange that it takes place Banks have to estimate the prices of their services offered By performing this, they keep their relations with extant customers and lake new ones The prices in banking have names like interest, commission and exper

Rariks should be very careful in delenuiring their prices and price policies Because

kes in pricing cause customers’ shilt toward the rivals offering likewise

allenging leader” in pricing of their services

? Service Marketing — inteprating customer focus across the fim — Valarie A Zeithaml, Mary To Bitner,

Dwayne D Gromler — 4° eddition

The complexity of banking services are resulted from different kinds of them The most important feature of banking is the persuasion of customers benefiting trom

S€TVICĐS

Most banks’ services arc complex in attribute and when this feature joins the

intangibility characteristics, offerings take alsa mental intangibility in addition to physical intangibility On the other hand, value of service and benefits taken from it mostly depend on knowledge, capability and participation of customers besides

features of offerings This is resulted from the fact that production and consumption have non separable characteristics in those services

Most authors argue that those features of banking services makes personal

interaction between customer and benk obligatory and the direct distribution is the sole altemative Due to this reason, like preceding applications in recent years,

branch offices use traditional method in distribution of banking services

PROMOTION

One of the most important element of marketing mix of services is promotion which

is consist of personal selling, advertising, public relations, and selling promotional tools

PERSONAL SELLING

Due to the characteristics of banking services, personal selling is the way that most banks prefer in expanding selling and use of them

Personal selling oveurs in two ways First occurs ina way thal customer and banker

perform interaction face to face at branch office In this case, whole personnel, bank

employees, chief and office manager, takes part in selling Second ocours in a way

that customer representatives go to customers’ place Customer representatives are

specialist in banks’ services to be offered and they shape the relationship between bank and customer

ADVERTISING

Banks have too many goals which they want to achieve Those goals are for accomplishing the objectives as follows in a way that banks develop advertising campaigns and use media

1, Conceive customers to examine all kinds of services that banks offer

2 Increase use of services

3 Create well fit image about banks and services

4 Change customers’ attitudes

5, Introduce services of banks

6 Support personal selling

7 Emphasize well service

Advertising media and channels that banks prefer are newspaper, magazine radio, direct posting and outdoor ads and TV commercials In the selection of media, target market should be determined and the media that reach this target easily and cheaply must be preferred

Banks should care about following criteria for selection of media

1 Which media the larget market prefer

1 Activities of banks, results, programs, new services

2 Situation of market, govermnent decisions, fulure developments

3 The cpportumilics offered for industry branches whose development mecis

national benc!ils

PUBLIC RELATIONS

Public relations in banking should provide;

1 Establishing most effective communication system

2 Creating sympathy about relationship between bank and customer

es of bank

3 Giving broadest information about acti

It is observed that the banks in Turkey perform their own publications, magaxine and sponsoring activities

SELLING PROMOTIONAL TOOLS

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Another clement of the promotion mixes of banks is improvement of sclling Mostly uscd selling improvement tools are layout at selling point, rewarding

Satisfaction is consumer's fulfillment response Ti is a judgment that a product or

service feature, or the product or service itself, provide a pleasurable level of

conswnption-related fulfillment’

In less technical term, satisfaction is the customer’s evaluation of a product or

service in Lenn of whether that product or service has met the customer’s needs and

oxpeclations Failure to mecl needs and expectations is assumed to result in dissatisfaction with the product or service

In addition to a sense of fulfillment in the knowledge that one’s needs have been

met, satisfaction can also be related to other types of feeling, depending on the

particular context or type of service For example, satisfaction can be viewed as contentment — more of passive response that consumer may associate with services they do nol think a lol abaut or services thal they receive roulinely over lime

Satisfaction may also be associated with feelings of pleasure for services that make the consumers feel good or are associated with a sense of happiness For those services that really surprise the consumers in a positive way, satisfaction may mean

delight In some situations, where the removal of a negative leads ta satisfaction, the

consumers Tay sciale a seriss of relief with sali:

lá

jou Fimally, satisfaction

may be associated with feeling of ambivalence when there is a mix of positive and negative experiences associated with the products or services

Although consumer satisfaction tends to be measured at a particular point in time as

if it were static, satisfaction is a dynamic, moving target that may evolve over time,

influent by a variety of factors Particularly when product usage or the service

expericnes takes place over time, satisfaction may be highly variable depending on

} Service Marketing — inteprating customer focus across the firm — Valarie A Zeithaml, Mary Jo Bitner,

Dwayne D Gromler — 4° eddition

11

which point in the usage or experience cycle one is focusing on Similarly, in the case of very new services or a service not previously experienced, customer expectations may be barely forming at the point of initial purchase, these expectations will solidify as the process unfolds and the consumer begins to form his or ber perceptions Through the service cycle the consumer nay have a variety

of differont oxpericnees — some good, some not good — and cach will ultimately

impact satisfaction

1.2.2 What determines customer satisfaction?

Customer satisfaction is influenced by specific product or service features, perception of product and service quality, and price In addition, personal factor such as the customer's mood or emotional state and situational factors such as family member opinions will also influence satisfaction,

Product and service features

Customer satisfaction with a product or service is influenced significantly by the customer’s valuation of product or sorvice features For a service such as resort hotel, important feature my include the pool area, access t gold facilities, restaurants, room comfort and privacy, helpfulness and courtesy of staff, room price, and so forth In concluding satisfaction studies, most firms will determine through some means (oflen focus groups) what the important features and attributes are for their service and them measure perceptions of those features as well as overall service satisfaction

Customer emotion

Customer’s emotions also affect their perceptions of satisfaction with products and services These emotions can be stable, preexisting emotions

Specific emotions may also be included by the consumplion experience itself,

qolucn ng a consumer's salislaction with the scrvies Positive emotions such as happiness, pleasure, clation, and a sense of warm-heartodness enhanced customers” satisfaction In tum, negative emotions such as sadness, sorrow, regret, and anger

led to diminished customers’ satisfaction,

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Attrihutions for service success or failure

Attribution — the perceived cause of events — influences perceptions of satisfaction

as well When they surprise by an outcome (the service is either much better or much worse that expected), consumers tend to look for the reasons can influence their satisfactions For many services, customers take at least partial responsibility for how things tum out Fyen when customers do not lake responsibility for the outcome, customer satisfaction may be influenced by other kinds of attributions

Perceptions of equity or fairness

Customer satisfaction also is influenced by perceptions of equity and faimess Customers ask themselves: have I been treated fairly compared with other

customers? Did other customers pet better treatment, better prices, or better quality

service? Did T pay a fair price for the service? Was T ireated well in the exchange for what T paid and the effort T expended? Notion of faimess are central to customer's perceptions of satisfaction with products and services, particularly in service

recovery situations

Other consumers, family members, and coworkers

In addition to product and service features and one’s own individual feelings and beliefs, consumer satisfaction is often influenced by other people For example, salisfaction with a family vacation trip is dynamic phenomenon, influenced by reactions and expressions of individual family members over the duration of the vacation, Later, what family member express in terms of satisfaction or dissatisfaction with the trip will be influenced by stories that are retold among family and selective memories of the events In a business setting, satisfaction with

a new service or technology will be influenced not only by individuals’ personal experiences with the software itself but also by what others say about it in company,

how others use it and feel about it, and how widely it is adopted in the organization 1.3 Service quality and GAP model

Low customers perceive service, how they assess whether they have experienced quality service, and whether they are satisfied are mentioned below Customers perceive service in term of service quality and how satisfy they are overall with

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their experience Companies today recognize that they can compete more

effectively by distinguishing themselves with respect to service quality and

improved customer satisfaction

In order to find out the way to improve service quality, Companies can score

Service quality gap model to know where the process of improving service quality

begins and how customer perceive its services

Service quality gap model has been divided by 2 parts: Customer gap and provider gap

CUSTOMER GAP*

The customer gap is the difference between customer expectation and perceptions (Figure 1.1), Customer expectations are standards or reference points that customers

bring into the service experience, whereas customer perceptions are subjective

assessments of actual service experiences Customer satisfactions often consist of

what a customer believes should or will happen The sources of customer expectations are marketer-controlled factors (such as pricing, advertising, sales promises) as well as factors that marketer has limited ability to affect (innate personal needs, word-of-mouth communications, competitive offerings)

Figure 1.1: Customer gap

Gap closed to zero or perception service similar to expectation is perfect thing, but Companies tend to close customer gap to develop

PROVIDER GAPS

To close the all important customer gap, the gaps model suggests that provider gaps need to be closed These gaps occur within the organization providing the service

and include four gaps

Gap 1: Not knowing what customers expect

Ê Service Marketing — integrating customer focus across the firm — Valarie A Zeithaml, Mary Jo Bitner,

Dwayne D, Gremler — 4" eddition

Gap 2: Not selecting the right service designs and standards

Gap 3: Not delivering to service designs and standards

Gap 4: Not matching performanee to promises

More details of these gaps are provided below:

Gap 1: Not knowing what customers expect

Gap 1 defines the difference between customer expectations of service and company

understanding of thase expectations

There are many reasons for managers not being aware of what customers expect’ they tnay nol imteract directly with customers, they may be unwilling to ask about

expectations or they may be unprepared to address them When people with the authority and responsibility for setting priorities do not fally understand customers” service expectations, they may trigger a chain of bad decisions and supoptimal

resource allocations that result in perceptions of poor service quality In today changing orgatnvalions, the authority la make adjustments in service delivery is

often delegated to empowered teams and frontline people

When management or empowered employees do not acquire accurate information about customers’ expectations, provider gap 1 is large Formal and informal methods to capture information about custamer expectations must be developed

through marketing research

To minimize gap 1, Companies should focus on how to understand customers through multiple research slrategics, how Lo buill strong relaiouship with customers

and understand customer necds overtime, and how to implement recovery strategies when things go wrong

Figure 1.2 shows the key factors responsible for provider gap 1 An inadequate

marketing research orientation is one of the critical factors

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Inadequate marketing research orientation,

© Insufficient marketing research

© Research not focused on service quality

© Inadequate use of marketing research

‘© Lack of upward communication

© _Lack of interaction between management

and customers

© Insufficient communication between contact

employees and managers

o To many layers between contact personnel and top management

Insufficient relation focus

© Lack of market segmentation

© Foous on transactions rather than relationship,

© Focus on new customers rather than

relationship customers

© Inadequate service recovery

© Lack of encouragement to listen to customer complaints

© Failure to make amends when things go wrong

© No appropriaterecovery mechanisms on place to service failures

Gap 2: Not having the right service quality designs and standards

Gap 2 focuses on difference between company understanding of customer

expectations and development of customer-driven service designs and standards

Customer-driven standards are different from the conventional performance

standards that company establish for service in that they are based on pivotal

customer requirements that they are visible to and measured by customers They are

operations standards set to correspond to customer expectations and priorities rather

than to company concerns such as productivity or efficiency

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* Poor service design

‘© Unsystematic new service development process

© Vague, undefined service designs

© Failure to connect service design to service positioning

* Absence of customer-driven standards,

2 Lack of customer-driven standards

Absence of process management to focus on customer requirements

© Absence of formal process for setting service quality goals

* Inappropriate physical evidence and servicescape

© Failure to develop tangibles in line with

Figure 1.3: Key factors leading to provider gap 2

Because services are intangible, they are difficult to describe and communicate

This difficulty becomes especially evident when new services are being developed

It is critical that all people involved (managers, frontline employees, and behind-

the-scenes support staff) be working with the same concepts of the new services,

based on customer needs and expectations For a service already exists, any attempt

to improve it will also suffer unless everyone has the same vision of the service and associated issues

One of the most important ways to avoid gap 2 is to clearly design service without

oversimplification, incompleteness, subjectivity, and bias To do so, tools are

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needed to ensure that new and existing services are developed and improved in as

careful a manner as possible

The quality of services delivered by customer contact personnel is critically

influenced by the standards against which they are evaluated and compensated

Standard signals to contact personnel what the management priorities are and which

types of performance really count, When service standards are absent or when

standards in place do not reflect customer expectations, quality of services they

receive s likely to be enhanced If service standards are developed appropriately

they can have powerful positive impact on closing both gap 1 and customer gap

Gap 3: Not delivering to service designs and standards

Gap 3 is discrepancy between development of customer-driven service standards

and actual service performance by company employees

© Poor employee-technology job ft

© Inappropriate evaluation and compensation system

Lack of empowerment, perceived control, and team work,

© Customers who do not fulfill roles

© Customers who lack knowlegde of their roles and responsibility

© Customers who negatively impact each other:

‘* Problems with service intermediaries

‘© Channels conflict over objectives and performance

© Difficulty to controlling quality and consistencies,

© Tension between empowerment and control

© Failure to match supply and demand

© Failure to smooth peaks and valleys of demand

© Inappropriate customer mix

© Overreliance on price to smooth demand

Even when guidelines cxist for porforming services well and treating, customers comectly, high-quality service performance is not certainty Standards must be backed by appropriate resources (people, systems, and technology) and also must be enforced to be effective — that is, employees must be measured and compensated on the basis of performance along those slandards Thus, even standards accurately reflect customers’ cxpectations if company fails to provide support for those standards if it does not facilitate, encourage, and require their achievement standards do no good When the level of service delivery falls short of the standards, it falls short of what customers expect a3 well

Gap 4: Not matching performance to promises

Provider gap 4 illustrates the difference belween service delivery and the service provider’s external cormuunivalions Promises bade by a serviee company through ils media adverting, sales force, and other communications may potentially raise customer expectations, the standards against which customers assess service quality The discrepancy between actual and promised service therefore has an adverse

effect on customer gap

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© Ineffective management of customer expectations

0 Absence of customer expectation

management through all forms of

communication,

© Lack of adequate education for customers

© Overpromising

9 Overpromising in advertisement

© Overpromising in personal selling

© Overpromising through physical evident cues,

© Inadequate horizontal communications

© Insufficient communication between sales

Figure 1.5: Key factors leading to provider gap 4

Broken promises can occur for many reasons: overpromising in advertising or

personal selling, inadequate coordination between operation and marketing, and differencies in policies and procedures across service outlets

One of the major difficulties associated with provider gap 4 is that communications

to customer involve issues that cross organizational boundaries Because advertising

promises what people do, and because what people do can not be controlled like machines that produce physical goods can be controlled, this type of

communications involves functions other than the marketing department This type

of marketing is what we call interactive marketing — the marketing between contact

people and customer — and it must be coordinated with the conventional type of

external marketing used in product and sorvice firms Whon omployees who promote service do not fully understand the reality of service delivery, they are likely to make exaggerated promises or fail to communicate to customer aspects of the service intended to serve them well The result is poor service quality pereeplion Effectively coordinating actual service delivery with exLernal communications, therefore, narrow provider gap 4 and favorably affects customer gap as well

In summary, service quality is created from all organization's operation procedures, and it is measured by how well organization can shorten its gaps, included customer gap and provider paps The key to close provider gaps is to close gap | through gap 4and keep them closed

The [ull eomeepiual model in figure 1.6 provides clear message lo manager wishing 1o improve service quality The gap model of service quality serves as a framework for service organizations attempting to improve service quality and service marketing

In order to make it easy to define, some organizations put all gap with some clear

mat queslions and score them, then they can position their quality service and

point oul where they have to focus on to improve ther service qualily By ths way,

Gap model is called Service quality gap model audit

service +

Service quality gap model audit:

1 How well does the company understand customer expectations of | 10 =

2 How well docs the company understand customer perception af

service?

«© Is the amount and type of market research adequate to understand | excellent

cusLomer expectations of service?

© Does the company use this information in decisions about service

provision?

2 Upward communication

® Do managers and customer interact enough for management to

know what cuslomer expect?

* Do contact people tell management what customer expect?

3 Relationship foous

® To what extent, does the company understand the expectations of

different customer segments?

© To what extent does the company focus on relationships with

customer rather than transactions?

4 Service recovery

* How effective are the recavery efforts of organivalion?

© Tlow well does the organization plan for service failure?

Score for Provider gap 1

© How effective is the company’s service development process? excellent

* Llow well are new services define for customers and eruployees?

6, Presence of customer — define standard

© How ellective are the company’s serviee standard?

* Are they defined to correspond to customer expectations?

* How efivctive is the process for setting and iracking sorviee quality

goals?

7 Appropriate physical evidence and servicescape

® How appropriate, altractive and effective are the company’s

physical facilities, equipment and other tangibles?

Provider gap 3:

8 Liffective human resource policies

© How effective does the company recruit, hire train, compensate,

and empower employees?

« Is service quality delivery consistent across employees, teams, units,

and branches?

9 Liffective role fulfillment by customer

« Do customers understand thet roles and responsitihties?

© Does the company manage customers to fulfill their roles, especially

cusLomers (hal are incompatible?

10 Effective alignment with service inlermediaries

* Llow well are the service intermediaries aligned with the company?

Is thore conilicl over objectives and performances, cost and reward?

Isservice quality delivery consistent across the outlets?

11 Alignment of supply and demand

© How well is the company able to match supply with demand

fluctuation?

Score for provider gap 3

1 = poor

10 excellent

Provider gap 4:

12 Integrated service marketing communications

® How well do all company communications — inchiding the

interactions between company’s employees and customers — express the same message and level of service quality?

13 Effective management of customer expectations

© Tlow well does the company communicate to customers about what

will be provided to then?

14, Accurate promising in advertising and personal selling,

© Does the company avoid over-promising and averselling?

15 Adequate horizontal communications

® How well do differen parts of the organization comnunicale with

each other so that service quality equals what is promised?

‘The score for each gap should be compared to the maximum score possible Are

particular gaps weaker than others? Which areas in each gap need attentions?

Based on these, company will find more details and best ways to improve their

service quality

CHAPTER 2: TECHCOMBANK CASE STUDY

2.1 Status of Techcombank and introduction of its card service

2.1.1 Techcombank Personal cards and card services

Techcombank became issued bank for card from 2003 with Vietcombank support,

and ils Card Cenler was officially established from April of 2004 Al the beginning,

Techcombank has only one kind of card, that is domestic debit card named

fastaccess Ln 2005, they variated their debit card with different types such as the card for VLP/Priority customers, for Viemame airline team, or for gift Jind the

2006, they gained an agreement with Visa international institution who allow and support them to issue and make payment with visa card Up to now, they have

customized many types of card for difforent types of customers based on visa card

and domestic debit card

2.1.1.1 Prospects of card in Vietnam market

Vietmam Economy is regarded as stability and developing step be step Commercial banking system has changed much, especially in payment technology of banks which model technologies in the world have many opportmities to be brought to

Vietnam, and create chances for Vietnam to explore our product in intertationat

markel World economy with good status will promote credit card development —

one of the very convient payment method which accepted in many areas in the world and widen the location for using card and making payment

In Vietnam, there are good opportunities for technology to develop and popularize,

and this is a very good framework for card service decelopment, and then customers’ knownledge about technology will change in positive orientation,

According lo some experts, with current stalus of the economy, incomes of

Vietnamese will increase to G00 USD/year in next some years, and that fit what

Vietnamese goverment expects that Vietnamese incomes will reach 700 USDfyear

in next 10 years Hven Vietnam is one of the countries whose people has low

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incomes and the GAP between the rich the the poor is still big, but evorage incomes

of vietnamese tend to increase, and with the support of high technology and integration trend, there will be some good change in applying high-tech products

like card At this time, popolation of urban areas is about 20-30% of all the nation in

which the age under 45 still working and studying with (heir basic knowledge about scionce and technology is the potential for new development trends In the next 5-7

‘years, the range of age who are acceptable science and technology will be wider, under 50-52 years ald, and at high rate in working people in the urban areas When incomes increase, the fund for consuming, will be increase, and payment methods wilhoul cash will be applied much more

Commercial environment will positively change by development of commercial ovulors, services, supermarkets, shops, and (he resull is thal consuming lubits of people will be changed that will be good conditions for payment tools without cash One of the important thing is that legal environment tend to be more closed, and

that is a legal corridor for commercial development With this corridor, the

government opens new ways for businesses and banks to đevelop and increase

compaliuve advantages

With many good conditions above, there will be a big movement with eredil card in the next time ‘The first gain of card payment is to go over big stucks and recover users’ belief, improve payment quality compared to other around markets in the area

In the near future, cards issued by banks will fit customers at various class, its limit

jm payment will be lower than current to wider the range of consumption

domestically Card is not only for cash withdrawing, making payment for goods and

services, it also can be used to make a phone call, or can be used as citizen ID,

Beside that, POS network will be explored to serve customer need in payment Card will be used to pay for petro fees, telephone fees, tuition fees, and then e-

commerce will develop in vietmam, so card will be the most convinient method for

payment It’s estimated that there are 90% secured transactions which will be

automatically well done

2.1.1.2 The strategy to develop card

Card market in Vietname is devided into 3 banking groups: the leadings, the developings, and new conumers TECHCOMBANK is in the 2nd group — Developing Techcornbank purpose is to make market segiment, choose market target, dovclop market share, attach the GAPs that the loadings missed, and prevent newcomers to penetrace the market In Techcombank personal service strategy, card product is regarded as a driven product and card development strategy is the key slrategy, so TERCHCOMBANK draw out its action plan as below”

- Following the world trend, TECHCOMBANK will find out the partners to

eslablish new products which are modern and suilable with target custorners

- Paralleled with pushing new products, TECHCOMBANK is proactive in

promotion and quality improvement, because card service is new to vietnamese

customers, and these method will help to attract new customers and maintain them

- Improving the card management sysiem in arder to fix existant errors and advoid

tisk,

- Being huny to occupy the market share m the North, paralleled with re-designing

card product and service to penetrade in the South, exploring AM and POS system

in business center, shops, supermarkets, for transactioning and branding,

2.1.1.3 Some successes and ambituous plan of card development

‘Yo develop cards, a prerequiste on development of service accompanied must be supplemented ‘lechcombank is regarded as the leading bank in this field thanks to investing into services namely: [lombanking, T@st advance, Mobipay, F@st-i- bank, F@st saving F@saSaving is one kind of

VastSaving account can be considered as an automactic investment amount in which

customers can benefit from interest which is higher than normal one Using Fast

’ Techcombank PFS strategy, 2007

kẻ 3

Saving, customers can get other benefits of an account owner as: transaction authorization, colleteral, mortgage and other characters of a normal saving amount

Cash advance from FastSaving can he made twice a month, each one 30% of current outstanding balance Customers can withdraw money or clear account at

customer service counter arca They van take money from saving accouril by transfering such as using an order to pay or FastAcoess card via ATM to make payment

If you would like an amount of money in provision for your daily expenditure needs, to travel or buy a new TV, new car but you're waiting for next coming salary period, Fast Advance is exactly what you need Fast Advance allows customers to

wilhdraw moncy more than credit oulstanding balance im their account al

Techcombank al a certain limit (so called Advance limit) If you want to book

airplane ticket via internet, you do not need a credit card, just a fastaccess card can help you to do that Is the difference that Techcombank create to meet customer’s needs and expectation

Tn 2006, Fast Mobipay and Fast i-bank were launched, this marks a strong step

forward of Techcombank’s card achivities With these two products, cuslomers cat

buy goods and serviees anywhere all araund the world, Inmsfer money to anywhere within Vietnam without coming to point of sale or bank directly ‘Ihe capital

invested for this product is not much thanks to modem technology level and

crealive, aclive staff, especially updaled sofware system

Table 1: Rate of increased investment capital for accompanied products and service

In 2006, there was a sudden mutation in investment, thanks to strong collaboration with strategic partners in order to implement means of payment under method Mobilpay The second reason, which is more important: Techcambank did

not hesitate to put first steps in Fast i-bank payment From 2007, the investment into

avcompartied products and services with cards has been regarded indispensable in system of infrastructure investment items for card (transfer Swift, ATM/POS system, card-maker machines/PIN .)

With their ceaseless efforts, Techcombank has got some significant achievements in development of card volumes The data on number of card issued and payment volumes through several stages can be found herewith:

Table 2: Total of Card issued by years

ATM transactions value

(withdraw + transfer) (Bil) 6l2 1624 3137 7,744 6,272

POS transaction valuc

Source: Report on Card Operations

Tn paranoina, the development in rumber of card issued increased drammatically in

2007, twice in comparision with 2006, only after one year of enhancing for

investment into cards ‘he really significant leap is recorded in 2009 after HSBC took part in supporting directly Techcombank with strategy of becoming the leading

retail bank in which cards are the main product As the same, volume of payment via ATM and POS has increasing correlatively with number of cards This proves

that the capacity of card use is always in maintenance and improvement, in other

words, cards Techcombank issues have a high number of active accounts

2.1.2 Card issuing, using and payment Processes and activities

Like other activities, account opening, card issuance and payment in

‘Yechcombank comply with a general process and small-divided processes (if neccessary) In accordance with card issuance process, issuing account opening (personal account) serves as fir step and card handing over lo customers serves as

last step Personal Finance Service of Techcombank gradually launched a set of standards of transaction time for each department to ensure the implementation in accordance with customer-oriented standard system during working time ‘his will

help Techcombank improve customer service

Figure 2.1: Card issue procedure

Teller (Branches) Provide customers with

Teller (Branches) Make list & send to

Card center for issuance

z

s$”

Ỷ Card center and ‘Transfer cards to

For small-size process, the detail of transaction of cach step will be paid attention, but certain time for each step has been not standardized yet, just basing on general regulations

2.2 A review of Techcomhank’s previous survey on card service: Customer

satisfaction on card services

2.2.1 Survey objectives

Vietnam with urban population of more than 10 million is the big potential

market for card services Card service in Vietnam is the most eventful market than

ever, in which many banks are joining in Penetrating in the market in 2003, the

“Fasi-access” card of Techcombank positioned itself with 28.000 card in the end of

the year, the combination with Vietcombank card service and providing very value-

added services With the orientation of becoming a multi-functional urban bank and

the best bank, Techcombank has tried to explore the payment card as the key for

development However, because of the strick compeliuon of the market,

Techcombarik decided to build another card strategy, and the survey taken im 2006

with the title “customer satisfaction on “Fast-access” card” for 4 big cities: Ha noi,

Lai Phong, Da nang and ilo Chi Minh

Some targets set up for survey: the survey was expected to find out some factors

below:

1 Customer satisfaction on Fast-access

is) Customer evaluation on card services of Techcombank

3 Customer expectations

4 Customer behaviors

5 The structure of current, customers,

The resulis 1s an important base for Techcorbank to review ils customer service

quality provided, cvaluate features of Fast-access, and find out the realization of incentive programs of ‘l'echcombank In this survey, ‘Techcombank also wants to find out true expectations of customers on card services, so that they oan take

actions lo improve the quality thal fit customer needs

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2.2.2 Sizes and methods:

2.2.2.1 Attendees and effective zone:

“Current customers of Techeembank card service”

Total current customers’ 68.972

Criterion for survey on satisfaction of customers about card service:

1) Fa

Land aceurals money withdrawal 2) Numerous ATM locations where customers can wilhdraw money with a card

3) Prompt responses Lo customers’ requests

4) Enthusiastic bank sia(T

5) Multi-functional card

6) Effective Home-banking services

7) Informative and helpful manual

8) Incentive programs attached

9) Quick turnaround time for card issuance

10)Well-designed card

In which we found some below criterion of service quality:

v Fast and accurate money withdrawal

v Prompt responses to customers’ requests

Enthusiastic bank staf

Y BffEctive Home-banking services

Y Quick tumarourtd tine for card 1ssuance

2.2.2.2 Investigation methods:

Through letters, dircel interview saruples in Ha Noi

Method io jn aap

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n~ Z? P(1-PyE*

In which:

n—the size

4 fail-safty, 4 is defined at 95%

P the rate of satisfaction customers

1 error rate, defined at 5%

10% of customers were estimated for attention

(no feedback | unreachable | others)

So number of samples are 1.100 (customers)

Method ta choose the samples:

Systematic Sampling with criteria of Debit amount for 4 cities See below: Table 3: Survey Syslomahe Sampling with crilsria of Debit amount for 4 cities

Ho Chi STT| DEBIT AMOU: ifiiai PhongiDa Nang| Minh ‘Total