Improving customer satisfaction for packeged of the duc phat company in ho chi minh city

Relation between Customer Satisfaction and Service Quality..  What are quality factors to affect customer satisfaction for DUCPHAT’s packaged? How does the impact of product quality fa

ACKNOWLEDGMENTS 3

CHAPTER 1: INTRODUCTION 3

1 Reason for choosing topic .3

2 Research objectives .4

2.1 The overall goals 4

2.2 Specific objectives 4

3 Research questions .4

4 The research hypothesis 5

5 The practical significance of the subject .6

6 Structure of topic 6

CHAPTER 2: LITERATURE REVIEW 7

1 Definition Business Research 7

2 Theoretical Literature 7

2.1 Kano theory of customer satisfaction 8

2.2 Queuing theory of customer satisfaction 12

3 Empirical Literature 14

3.1 What is Customer Satisfaction? 14

3.2 Techniques to Measure Customer Satisfaction .17

3.3 Relation between Customer Satisfaction and Service Quality .17

3.4 Customer Satisfaction Index Model ( CSI Model) 18

4 Research Model 19

5 Conclusion 21

CHAPTER 3: RESEARCH METHODOLOGY 22

1 Research Framework 22

2 Research Process 23

3 Study Design 24

3.1 Qualitative Methods .24

3.2 Quantitative Methods .24

3.3 Scale construction .28

4 Methods of data analysis 30

CHAPTER 4: RESEARCH RESULTS AND DISCUSSION 33

1 Research results 33

1.1 Sample characteristics .33

1.2 Scale testing 33

2 Conclusion 42

CHAPTER 5: SUMMARY, CONCLUSION AND RECOMMENDATIONS 43 1 Summary 43

2 Conclusion 43

3 Recommendation 44

References 45

First and foremost, we would like to thank us lecture Tran Ut, her continued support andmentorship throughout program Her encouragement has been invaluable throughout this entireprocess

CHAPTER 1: INTRODUCTION

1 Reason for choosing topic.

Today, the competitive environment is becoming increasingly fierce, the wisdom of the enterprise

is to bring higher customer satisfaction than the competitors in the same industry, because thesatisfaction of customer proportional to the profits of the business which brings the success ofbusiness with customer loyalty to their brand In the business strategy of the company alwaystoward to customer and considered the most important strategy, this has made international brandssuch as Samsung, Nike, etc So how to understand and responded to customer needs satisfied, that

is the difficult question, and is the secret of each company, and tool in the competitiveenvironment And DUC PHAT is the same, since its establishment and development constantlytrying to give the best customer satisfaction with all abilities Accordingly, DUC PHAT has always

in the customer loyalty Be researching and improving for customer satisfaction has always beenmaintained and developed by DUC PHAT

With the above reason I chose topic ” IMPROVING CUSTOMER SATISFACTION FOR PACKAGED OF THE DUC PHAT COMPANY IN HO CHI MINH CITY “ to research on

the subject Business Research Method

2 Research objectives.

2.1 The overall goals

This study was conducted with the purpose of evaluating customer satisfaction of Birthday Cakepackaged of DUC PHAT company in HCM city; based on which give out a number of solutions tohelp companies and managers can summarize the experiences to further enhance product quality inorder to improve customer satisfaction to the demands and competitive environment of the society

2.2 Specific objectives

To achieve the overall objective mentioned above, research should focus on the following specificobjectives:

 Identify factors about product affecting customer satisfaction

 Measure the impact of these factors about product to customer satisfaction

 Find out the differences may have on the level of customer satisfaction for productbetween customer groups by characteristics such as: gender, age, educational level,etc…

 Proposed some solutions to improve customer satisfaction for Birthday Cake packed ofDUC PHAT’s company

3 Research questions.

To achieve the research objectives, questions to gather information that will focus on the followingmain contents:

 What are quality factors to affect customer satisfaction for DUCPHAT’s packaged?

 How does the impact of product quality factors to the satisfaction of the customers?

 Is there a difference in the level of customer satisfaction for product between customergroups by characteristics?

 From this study, work out how to improve our product to meet our customer needs?

4 The research hypothesis.

As product quality, price, packaging and label play an important role and affect customersatisfaction in their purchase process A hypothesis about the relationship between the quality oftraining and the satisfaction of participants is set out as follows:

 H1: Product quality includes factors that create good quality products The higher productquality as satisfied customer with consumer products, Hypothesis is: there is a relationshipsame way between product quality and customer satisfaction

 H2: The price is important, indispensable in commodity trading The price is a tool toincrease competitive advantage, low price will make customers happy, and the hypothesis

is the assumption that the same way between price and customer satisfaction

 H3: Packaging is a very important factor in the purchasing activities Customers will not behappy or accept poor quality packaging, not in accordance with the requirements of theproduct Hypothesis would be: is there a relationship in the same direction packaging andcustomer satisfaction

 H4: Brands play an equally important role in creating quality products for the organization.Brand has long years…, which will create customer confidence So, the higher the brand,customer more satisfied with the purchase of that product Since then, the hypothesis is set:there is the same relationship between the brand and customer satisfaction

5 The practical significance of the subject.

The practical significance of the subject will be the core base to give benefits for the followingsubjects:

 Company can improve, further improve product quality to customer satisfaction;

 Research results can help managers have a holistic view of product quality, as a basis tohelp build orientation, policies and improve product quality better, satisfy customerrequirements and society

6 Structure of topic.

Chapter 1: Introduction

Chapter 2: Literature Review

Chapter 3: Research Methodology

Chapter 4: Research Result and Discussion

Chapter 5: Summary, Conclusion and Recommendation

CHAPTER 2: LITERATURE REVIEW

1 Definition Business Research.

A systematic inquiry aimed at providing information to solve problem [Cooper and Emory (1995)defined research]

Research is the process of systematically gathering and analyzing information in order to gainknowledge and understanding [Kevin (1992) in his book entitled “Methods for BusinessResearch” stated]

An organized, systematic, databases, critical, objective, scientific inquiry or investigation into aspecific problem [Sekaran (2003) defined]

A systematic and objective process of gathering, recording and analyzing data for aid in makingdecision [Zikmund (2003) defined Business Research]

In a business context, research is defined as an organized and systematic process of investigation toaddress a specific business problem or issue

To research for this literature review, we have 2 part included theories and empirical researchesthat are relevant for understanding the customer satisfaction:

2 Theoretical Literature.

The research of theories about customer satisfaction will have three theories in the time sequence

It will be indicated clearly by Kano theory and Queuing theory that will be introduced in thissection Every theory has different outlook and the following’s detail of each theory:

2.1 Kano theory of customer satisfaction.

The Kano model is a theory of product development and customer satisfaction developed in the

80s by Professor Kano The author indicated that customer needs are never changing, this meanswith following example: As a customer who purchased a lot of music, their needs were simple Thecustomer only wanted clearer sound and something smaller to store The music industry respondedand introduced the cassette The cassette was indeed smaller It did not fade out and then back inwith that annoying “click” that my 6-track tapes used to have The customer was pleased with theircassette collection And then with no long time, the music industry introduced something called a

CD – a compact disc The CD offered better clarity, more storage capacity and the ability to jump

to specific songs, or shuffle the order of their play Best of all, one never had to rewind!

Through that as a customer, their needs changed In the move to CDs, they did not realize theirneeds had changed but the music industry, through research, keeping up with the competition andadvances in technology, delighted me with new product offerings Even today as my CDs are dustcovered because I only utilize my iPod, new advances in music technology are being made tofurther address music customer needs

According to Kano is that customer satisfaction is proportional to the extent to which the product orservice is fully functional Based on that he give the model with three types of requirements thefollowing:

 Satisfying basic needs: Allows a company to get into the market

 Satisfying performance needs: Allows a company to remain in the market

 Satisfying excitement needs: Allows a company to excel, to world class

Figure 2.1: Kano Model.

 For satisfying basic needs:

This model is the same Maslow’s needs theory to obtain high satisfaction is first to have to obtainbasic satisfaction with needs One of the main points of assessment in the Kano model is thethreshold attributes These are basically the features that the product must have in order to meetcustomer demands If this attribute is overlooked, the product is completely incomplete If a newproduct is not examined using the threshold aspects, it may not be possible to enter the market.This is the first and most important characteristic of the Kano model The product is beingmanufactured for some type of consumer base, and therefore this must be a crucial part of productinnovation Threshold attributes are simple components to a product However, if they are notavailable, the product will soon leave the market due to dissatisfaction The attribute is either there

or not An example of a threshold attribute would be a steering wheel in a vehicle The vehicle is

no good if it is not able to be steered

These needs are typically “unspoken.” If these needs are not fulfilled, the customer will beextremely dissatisfied This includes a clean bathroom, clean linens and a pleasant in the air When

we book a reservation at a hotel, we do not request a clean room but this implies our expectedabout it If this basic need is not met, we will be extremely dissatisfied

The same Maslow's needs theory to achieve safe needs must first achieve physiological needs andthis is too When achieving this satisfaction is to continue Satisfying performance needs to remain

in the market for a company Kano’s theory for this problem is that if a product or service wantsinto market is first thing which have to satisfy customer’s basic needs

 For Satisfying performance needs:

These needs are different from the basic needs, performance needs are typically “spoken”, and thismeans that customer needs are expressed Kano confirmed for this problem that if a company has ahigh-performance attributes will have a competitive advantage which compare to competitorsbecause performance attributes are those for which more is generally better, and will improvecustomer satisfaction Using the hotel example again, “spoken” needs could be Internet access, aroom away from the elevators, a non-smoking room, etc

Conversely, an absent or weak performance attribute reduces customer satisfaction The price acustomer is willing to pay for a product is closely tied to performance attributes So the higher theperformance attribute, the higher the customers will be willing to pay for the product Performanceneeds are slogan of each firm which also their business strategy for product or service toward Forexample computer needs, although laptop is more expensive than other normal computer but withits characteristics can bring everywhere so, customer is willing to buy with it this And with Coop-

Mart slogan is friends of all family and with Satisfying performance needs are right price So,companies must always find out customer’s performance needs.

This is only condition to a firm remain in the market and to allows a company to excel, to be worldclass are that company must satisfy excitement needs of customer that showed the finally type ofrequirement of Kano

 For satisfying excitement needs of customer:

This excitement needs are also typically “unspoken” and unexpected by customers but it bringresult in high levels of customer satisfaction, however their absence does not lead to dissatisfaction.Excitement attributes often satisfy latent needs – real needs of which customers are currentlyunaware Using the hotel example again, “unspoken and unexpected” are that we stay a hotel whodelighted by a freshly baked, chocolate chip cookie delivered to their room during turn-downservice, all aren’t expected and required by customer In a competitive marketplace wheremanufacturers’ products provide similar performance, providing excitement attributes that address

“unknown needs” can provide a competitive advantage Although they have followed the typicalevolution to a performance then a threshold attribute, cup holders were initially excitementattributes

Finally, we can see that out of all the attributes introduced in the Kano Model, the excitement onesare the most powerful and have the potential to lead to the highest gross profit margins Innovation

is undisputedly the catalyst in delivering these attributes to customers; we need to be able todistinguish what is an excitement today, because tomorrow it becomes a known feature and the dayafter it is used throughout the whole world

2.2 Queuing theory of customer satisfaction.

In customer satisfaction, each theory will have a different opinion of each author Similarly withKano’s customer satisfaction theory is to have Queuing theory which discusses also the effectingfactors to satisfaction The Queuing theory indicates that Speed (waiting) of service has beenshown to provide businesses a competitive advantage in the marketplace, it means clearly that theprimary issue in queuing management and customer satisfaction is not the actual amount of time acustomer waits for service, but the customer’s perception about that wait and the associated level ofsatisfaction A highly satisfied customer will be very likely to provide repeat business and spreadthe positive experience by word of mouth (advertising), resulting in increased revenues andprofitability Example: I just arrived at my local pharmacy to get a new prescription filled and topick up a few other things There is a line of five people at the register and another six peoplesitting in the waiting area By the time I get to the counter to hand the cashier my prescription, 10minutes have passed I ask how long the wait will be and I am told 35 to 40 minutes I go about myshopping and return to the pharmacy 30 minutes later Again, there are people in line at the registerand it takes me another 8 minutes to find out that my prescription is not ready Feeling weary andsomewhat frustrated, I have a seat in the waiting area As I sit there, I watch people come andpeople go At last my name is called! I pay the cashier and my pharmacy encounter is complete.However, I don’t feel good about it, and from that times, I did not come there any more, “acustomer has left”

Conversely, an unsatisfied customer will most likely not provide repeat business and will be morethan willing to share his or her bad experience with whoever will listen This will have an obviousnegative impact on profits and revenues We feel weary, un-pleasure as waiting a long time forproduct or service (delivery…)

We can see that the measurement of customer satisfaction as it relates to waiting time is highlyqualitative and subjective, and the relationship is generally inversed in nature (in general, aswaiting time decreases, satisfaction increases) This relationship was further expanded by Masterwho, in 1985, postulated that satisfaction is dependent on customer perception and customerexpectation For example, one study examined customer attitudes toward waiting times in the hoteland restaurant industry and found that over 70% of all respondents were clearly concerned aboutwaiting times In fact, those most concerned about waiting times were generally more willing topay more to avoid waiting in line and believed that quality is worth waiting for The results of thissurvey indicate that queues do affect the satisfaction level of customers and their willingness tospend In addition, this study also suggests that there is a point where a lengthy wait begins toaffect the customer’s perception of quality The main goal of queuing management is to maximizethe level of customer satisfaction with the service provided

In fact today, this theory is increasingly widespread application, especially for the companybusiness about services (bank ) At this point, we can conclude with this theory is that in order toincrease customer satisfaction, the company not only meets the demand for the products they need,but also in the quality of service for the wait Any company brings to high customer satisfactionwhich customer loyalty will also be high Satisfaction and customer loyalty is proportional to eachother All are illustrated with specific examples

Through the two showed theory above, we can understand that there are factors effected customersatisfaction which each firm should find out to satisfy their

3 Empirical Literature.

In this section will give us an overview of what the customer satisfaction is, Techniques to MeasureCustomer Satisfaction, relation between customer satisfaction and service quality, CustomerSatisfaction Index Mode

3.1 What is Customer Satisfaction?

The customer satisfaction becomes an important asset for businesses and organizations in an effort

to improve the quality of the service, to maintain loyalty, enhance the competitiveness ofenterprises In 1989, the index of measuring the level of satisfaction was first launched in Sweden(Swedish Customer Satisfaction barometer - SCSB) was established customer satisfaction index forthe purchase and consumption of products and services domestic service And in the followingyears, this index was developed and widely applied in developed countries like America - ACSI,Norway - NCSI, Denmark - DCSI and EU countries - ECSI (1998) This index can be done on thenational level (enterprise, how the industry will meet for their customers) or internal angle sector(compare the satisfaction of the business in within a sector) and a comparison between the differenttimes (to see the change) Since then, the business can know its position, the customer reviews forbusinesses to plan the business goals and strategies So to understand what customer satisfaction is,

we will have many various outlook to the concept of satisfaction by everyone, the following isdetailed outlook:

There are two principal interpretations of satisfaction as a process and satisfaction as an outcome(Parker and Mathews, 2001) Early concepts of satisfaction research have typically definedsatisfaction as a post choice evaluative judgment concerning a specific purchase decision [Oliver,1980; Churchill and Suprenant (1992) Bearden, William O and Teel (1983); Oliver and DeSarbo

(1988) But Swan and Combs (1976) were among the first to argue that satisfaction is associatedwith performance that fulfils expectations, while dissatisfaction occurs when performance fallsbelow expectations In addition, Poisz and Von Grumbkow (1988) view satisfaction as adiscrepancy between the observed and the desired This is consistent with value - percept disparitytheory (Westbrook and Reilly,1983) which was developed in response to the problem thatconsumers could be satisfied by aspects for which expectations never existed (Yi,1990) The value

- percept theory views satisfaction as an emotional response trigged by a cognitive - evaluativeprocess (Parker and Mathews, 2001) In other words, it is the comparison of the "Object" to one'svalues rather than an expectation

Besides that, we can understand customer satisfaction with other opinion: Customers want ameeting between their values (needs and wants) and the object of their evaluations (Paker andMathews, 2001) More recently, renewed attention has been focused on the nature of satisfaction:emotion, fulfillment and state (Parker and Mathews, 2001) Consequently, recent literature adds tothis perspective in two ways First, although traditional models implicitly assume that customersatisfaction is essentially the result of cognitive processes, new conceptual developments suggestthat affective processes may also contribute substantially to the explanation and prediction ofconsumer satisfaction [Fornell and Wernerfelt (1988), Westbrook (1987), Wesbrook and Oliver(1991)] Second, satisfaction should be viewed as a judgment based on the cumulative experiencemade with a certain product or service rather than a transaction - specific phenomenon (Wilton andNicisia, 1986)

There is general agreement that: Satisfaction is a person’s feelings of pleasure or disappointmentresulting from comparing a product’s perceived performance (or outcome) in relation to his or herexpectations ( Kotler,2003 p.36) Based on this review, customer satisfaction is defined as the

result of a cognitive and affective evaluation, where some comparison standard is compared to theactually perceived performance If the perceived performance exceeds expectation, customers will

be satisfied Otherwise, if the perceived expectations are met with performance, customers are in anindifferent or neutral stage

Customer satisfaction is defined as a customer’s overall evaluation of the performance of anoffering to date This overall satisfaction has a strong positive effect on customer loyalty intentionsacross a wide range of product and service categories (Gustafsson, 2005)

The satisfaction judgment is related to all the experiences made with a certain business concerningits given products, the sale process, and the after-sale service Whether the customer is satisfiedafter purchase also depends on the offer’s performance in relation to the customer’s expectation.Customers form their expectation from past buying experience, friends’ and associates’ advice, andmarketers’ and competitors’ information and promises (Kotler, 2000)

Factors which determine the extent of expectations are: customer needs, total customer value andtotal customer cost It is mentioned by researchers who study customer choice that choosing aproduct or service is only one of the stages customers go through A purchase decision isinfluenced by the buyer’s characteristics These include cultural, social, personal and psychologicalfactors In addition to the buyer’s characteristics, a purchase decision is influenced by the buyer’sdecision process The typical buying process develops through five stages: 1 new recognition; 2information search; 3 information evaluation; 4 purchase decision and 5 post-purchase evaluation(Chaston, 2001)

Searching for information is a key stage of a customer’s decision-making process and may include

a search for both internal and external information As the perceived risk of a purchase decision

increases, consumers search for more information in order to cope with uncertainties about thepotential positive or negative consequences (Jihye Park, 2005).

3.2 Techniques to Measure Customer Satisfaction

To measure customer satisfaction in market research will have 4 different techniques, it is thefollowing:

Customer satisfaction survey methodologies;

Focus group to study customer satisfaction issues;

Standardized packages for monitoring customer satisfaction and

Various computer software

But there are some problems with typical customer satisfaction measurement techniques such asfocus groups, survey methodologies and customer satisfaction software These include:

Analytical- concerned with techniques, formal procedures, systems, and so on;

Behavioral – concerned with the attitudes, beliefs, perceptions, motivation, commitmentand resulting behavior of the people involved in the process ; and;

Organizational – concerned with the Organizational structure, information flows,management style and corporate culture, i.e the context in which the process is conducted(Piercy, 1996)

3.3 Relation between Customer Satisfaction and Service Quality

The business is often said that the service quality is customer satisfaction However, many studiesshow that customer satisfaction and service quality are two distinct concepts but have closerelationship with each other Quality of service is the concept of objectivity, the nature of price and

perception, while satisfaction is a combination of the subjective component, based on feelings andemotions (Shemwell & CTG, 1998, Thongsamak, 2001).

3.4 Customer Satisfaction Index Model ( CSI Model)

For this customer satisfaction model will have 2 models which are completely different forsatisfaction, but every model has the various advantages and disadvantage, the following is detail:

Firstly, American Satisfaction Index (ACSI), perceived value is influenced by the perceived qualityand customer expectations Meanwhile, customer expectations have a direct impact on perceivedquality In fact, when the expectation is higher can feel the quality standards of the customers forthe product or vice versa Therefore, the requirements for product quality and service provided tocustomers must ensure and be satisfied on the basis of their satisfaction Customer satisfaction isformed on the basis of perceived quality, expectations and perceived value, if the quality andperceived value higher expectations will create customer loyalty, otherwise, there is a complaint orcomplaints about consumer products that they (as Figure 2.1)

Figure 2.1: The Model of American Customer Satisfaction Index – ACSI

Perceived value

Customer Satisfaction

Complaint Expectations

Following that, Model of European Satisfaction Index (ECSI) is a certain difference Comparedwith ACSI, photos of the product, the brand has a direct impact on the expectations of ourcustomers Meanwhile, customer satisfaction is the impact Synchronization of 4 factors photos,perceived value, and perceived quality of both tangible and intangible products Typically, only ofACSI is often applied to the field of application also ECSI indicators usually measure products, theindustry (Figure 2.2).

Figure 2.2: The Model of European Satisfaction Index – ECSI

4 Research Model.

On the basis of the theory and the results of previous studies are concerned, the author inherited theSERVQUAL scale by Parasuraman (2005), and edited five elements: means tangible, reliable,responsive, make security and empathy into 4 elements: product quality, price, packaging and

Expectations

brand to measure and evaluate customer satisfaction of products in inner HCM city Specifically,the elements of the quality scale were modified from the SERVQUAL scale as followings:

(1) The product quality can be adjusted from the elements inside to ensure food safety, rawmaterial for making cakes, soft cake

(2) Prices are shown a willingness to pay of customer to purchase, the comparison between whatthe product is worth to pay The lower the price the higher the competitive advantage

(3) Packaging is shown impressive product image in the minds of consumer

(4) Packaging is one of the elements that make up customer confidence with the product Goodbrand is also to affect the purchase decision

Research on the relationship between product and customer satisfaction, thought to rotate aroundthe 4 main axis (component / or subject area) reflect the new/full resolution target that the subjecthas posed These four elements have a close and intimate relationship to measure quantify thesatisfaction of the customer to buy their packed

The proposed research model to assess, measure customer satisfaction of packaged BirthdayCake on HCM city area through 4 elements: product quality, price, packaging and brand asfollows:

SERVQUAL scale by Parasurama (2005) and other same study include 4 components: productquality, price, packing and brand with purpose towards the analysis, as well as components for themeasurement of customer satisfaction are using, have used and will use packaged Birthday Cake

CHAPTER 3: RESEARCH METHODOLOGY

1 Research Framework

Figure 3.1: Framework of research on the relationship between product quality and customersatisfaction (Source: General Studies)

Issues/ Problems

 The competition between companies in the same industry

 Requirements, product requirements of the customer are increasing

 Lack of management and supervision of the company, especially thegovernment agencies, for business functions packaged bread in the place

 Expanding markets: connect multiple intermediaries wholesale & retail

 Needed supervision, management and measurement of product quality inthe sales of the government’s products, local authorities

 The competition between companies

Expected Outputs

 Meet the needs of customers

 Products attract customers

 Building a professional sales team

Outcomes CustomerSatisfaction