ASSESSING THE USABILITY OF MARKUS WEBSITE

Table of Contents LIST OF FIGURE 7 Purpose of study 10 Research questions 10 Object of study 10 Task Process 11 Contribution 11 CHAPTER1: LITERATURE REVIEW 12 1. 1 Usability 12 1.1.1 Concept and element of usability 12 1.1.2 Website usability concept and its elements 14 1.2. Usability evaluation method, model and tool 15 1.2.1 Category of usability evaluation method 15 1.2.2 Model of Usability evaluation 16 1.2.3 Usability measure tool. 17 1.2.4 Educational website usability measurement on user’s perspective 18 CHAPTER 2: METHEDOLOGY 21 2.1 Analysis framework 21 2.2 Research model 22 2.3 Designing questionnaire and performance test. 23 2.2.1 Questionnaire design 23 2.2.2 Designing website performance test 24 2.4 Sample and data collection. 24 2.5 Data analysis methodology 25 2.5.1 Questionnaire analysis 25 2.5.2 Website performance analysis 26 CHAPTER 3: ANALYSIS 28 3.1 Markus School introduction. 28 3.1.1 Marketing school introduction 28 3.2 Markus website operation 29 3.3 Data description. 30 3.3.1 Questionnaire based method 30 3.3.2 Website performance test 33 3.4 Data analysis 34 3.4.1 General usability point: 34 3.4.2 Usability points in term of factor factors 36 3.4.3 Website performance usability 39 CHAPTER 4: FINDING AND DISCUSSION 40 4.1 The usability of Markus website (thinkmarkus.com) 40 4.2 Suggestion for development 43 CHAPTER 5: CONCLUSTION 45 REFERANCE 46 APPENDIX 49 Questionnaire – English 49 Questionnaire – Vietnamese 52

ASSESSMENT OF SERVICE QUALITY AND CUSTOMER

SATISFACTION AT MILITARY BANK

BY MINH NGUYEN HUE

A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS

FOR THE BACHELOR DEGREE OF BUSINESS ADMINISTRATION

(INTERNATIONAL STANDARD PROGRAM)

Hanoi – May 2012

UNIVERSITY OF ECONOMICS AND BUSINESS

FACUTY OF BUSINESS ADMINISTRATION

ASSESSMENT OF SERVICE QUALITY AND CUSTOMER

SATISFACTION AT MILITARY BANK

Supervisor’s name: Dr Lien, Pham ThiStudent’s name: Minh, Nguyen HueClass: QH2008E-QTKD

Program: International Standard Program

Hanoi – May 2012

First and foremost, I wish to express my sincere thanks to my advisor

Dr Pham Thi Lien - Lecturer in Faculty of Business Administration, who was thoughtfully guiding me in writing this thesis

Secondly, I would like to thank Military Bank – Transaction Center that gave me an internship chance in the bank I especially thank Ms Tran Thi Hong Thom who was directly introducing me the field of service quality, and guiding me in measuring service quality at Transaction Center Besides, I thank to all specialists of the bank for their whole-hearted guides during my internship in Military Bank – Transaction Center Last but not least, I’m grateful to the numerous people in other departments who provided sincere helps through all my internship time I cannot thank them enough for study environment they provided

Student Nguyen Hue Minh

TABLE OF CONTENTS

LIST OF FIGURES

LIST OF TABLES

ABSTRACT

This thesis examines the banking service at Transaction Center of MilitaryBank, using SERVPERF model (Cronin & Taylor, 1992) to assess perceivedservice quality of Military Bank, and then research the relationship between servicequality and customer satisfaction on banking service’s quality

Data used in making analysis was collected from conducting survey at MilitaryBank Based on 123 valid responses from customers, the study indentified threecomponents – RELI-ASS (reliability combined with assurance),RESPONSIVENESS, and EMPATHY – which explain customers’ evaluation ofperceived service quality at Military Bank The results indicate that Military Bank’sservice quality is assessed with a fairly high level in customers’ perception.Furthermore, the relationship between these service quality components andcustomer satisfaction is also investigated through regression analysis As the result

showed, these three components of service quality have positive relationship withcustomer satisfaction in which RESPONSIVENESS has the most significant impact

on customer satisfaction level

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

Background

After more than 20 years of the renovation (from 1986), Vietnam has developeddramatically, and has achieved many significant successes Political and economicreforms transformed Vietnam from one of the poorest countries in the world with GDPper capital lower than US$100 to lower middle income country with GDP per capital

up to US$1,130 in 2010 The poor rate decreased significantly from 58% in 1993 to14.5% in 2008 Besides, other indicators of welfare also have been improved (TheWorld Bank, 2012) Vietnam has been appreciated about its development, andgradually played a more visible role on the regional and global stage

In recent years, Vietnam’s economy has been taking ongoing efforts to integrateinto the international economy Especially, joining into the World Trade Organization(2006) brought many opportunities to Vietnam, but also posed challenges for allaspects of Vietnamese economy The greatest benefit obtained from integration is thatfavorable export market for Vietnam has been expanded Vietnam’s products canfairly compete with other rivals with much less tax or quota barriers As a result,Vietnam can enhance economic through promoting export activities and attractingforeign investment Besides, one of the biggest challenges for Vietnam when it joinedWTO is the problem arising from rapid reforming process of the state sector, mainly inindustry and services The role of state sector declines while the number of foreigncompanies entering to Vietnam increases Therefore, to keep developing in long term,Vietnam need to create a stable financial condition that will facilitate the rapid growth

of domestic trade as well as international trade

Through 25 years of renovation, banking sector has had positive contributions

to stabilize financial market as well as Vietnam’s economic development At first, ithas played an important role in repelling and controlling inflation, gradually

maintaining the stability and value for money Secondly, banking sector has promotedinvestment activities which create favorable conditions for business development andexport activities Thirdly, banking sector has effectively created new jobs foremployees, contributed to improve income and reduce poverty In short, with suchroles and contributions, banking sectors should be received more and more attentionfor further development.

Statement of problem

Opening economy which requires more and more trading transactions is creatingfavorable conditions for foreign banks to enter into Vietnam as well as for domesticbanks to appear in Vietnamese market As a result, banks in Vietnam have to copewith many challenges, especially the increasingly intensive competition They have tocompete to each other not only in market share but also in the ability to comply withinternational standards of banking services Military Bank is not an exception

Main business lines of the bank sector are monetary, credit, and banking services.Products from different banks seem to be mostly similar Thus, to exist and develop inthe increasingly competition, Military Bank is required to focus more on their servicequality to attract customers and rise profitability Enhancing service quality to gaincustomer satisfaction is considered as an effective way to help Military Bank buildtheir sustainable competitive advantages From these facts, assessing the quality ofbanking services, researching relationship between service quality and customersatisfaction on banking service’s quality are necessary to develop banking service inthe future

Purpose and research questions

With thesis title “Assessment of service quality and customer satisfaction atMilitary Bank”, the purpose of this thesis is examining the banking service atTransaction Center of Military Bank, using SERVPERF model (Cronin & Taylor,1992) to assess perceived service quality of Military Bank, then research the

relationship between service quality and customer satisfaction on banking service’squality

Together with this purpose, the research will answer two questions:

- How is the quality of banking services at Military Bank?

- What is relationship between service quality and customer satisfaction at MilitaryBank?

to this Transaction center every day (about 100 customers per day on average) Datacollected from this survey was analyzed in order to find out customers’ assessmentabout Military Bank’s service quality, and the relationship between this assessmentresult and customer satisfaction

Delimitations and limitations

- Delimitations: The study confined itself to finding about banking service quality atMilitary Bank The study was conducted in Hanoi

- Limitations: This research was conducted in one Transaction office of Military Bank –No.3 Lieu Giai, Ba Dinh, Hanoi Besides, the time to carry out survey, collect surveydata as well as analyze data was limited Therefore, some analysis and conclusionsmay be still subjective and can be improved

Outline of the thesis

Besides this introduction part, the thesis is divided into 5 main chapters:

• Chapter 1: Literature review

This chapter will provide theoretical framework for the research It includesfundamental concepts about service quality and customer satisfaction as well asresearch model and its hypotheses used in this research

• Chapter 2: Research context and methodology

This chapter will describe the context where the research is conducted In addition, itwill also provide detail research method from preparing for collecting data toanalyzing data

• Chapter 3: Research results and analysis

This chapter will give description of data collected, and then show analysis resultsfrom SPSS 16.0 software

• Chapter 4: Findings and discussion

This chapter will answer two research questions by providing assessment about servicequality, and then the relationship between service quality and customer satisfaction atMilitary Bank Besides, it will also give some suggestions to further improve servicequality as well as customer satisfaction at Military Bank

CHAPTER 1: LITERATURE REVIEW1.1 Service

1.1.1 Concepts of service and bank service

Services are one of the two key components of economics - the other beinggoods - and they are consumed at the point of sale A service is a product that consists

of any activity, benefit or satisfaction that one party can offer to another for sale.Services are essentially intangible and do not result in the ownership of anything

Services’ production may or may not be tied to a physical product (Kotler et al., 2005).

Bank is a financial intermediary which performs the intermediary functionbetween two or more parties in a certain financial activities In other word, banksupports the channel flow of capital between lenders and borrowers under the indirectmethod Banking services are the various ways in which a bank can help a customersuch as operating accounts, making transfers, paying standing orders and sellingcurrency (InvestorWords.com)

From above definitions, we can conclude that banking service is similar to otherservices which all operate for profit Banking service is activities connecting suppliers

of fund to users of fund However, banking service is somehow special because itoperates in a field of monetary trading in which money is material and sources ofcapital come from outside This is a sensitive field and relates to all other businessfields as well as all aspects of life

1.1.2 Characteristics of service

According to Kotler et al., 2005, there are five main characteristics of services including intangibility, inseparability, variability, perishability, and lack of

ownership.

- Firstly, intangibility is a major characteristic of services It means services cannot bereadily displayed, so they cannot be seen, tasted, felt, heard or smelt before they arebought This is true in banking services where services offered are only what customerexperiences.

- Secondly, service inseparability means that services cannot be separated from theirproviders, whether the providers are people or machines Services are produced andconsumed at the same time Customers become a part of providing service process Inbanking services, services are created with the involvement of customer If there is nocustomer, there is no banking service made

- Thirdly, variability characteristic means that service quality may vary greatlydepending on who provides them and when, where, and how With banking sector,services are heterogeneous from producer to producer, from customer to customer, andfrom day to day

- Fourthly, service perishability means that services cannot be stored for later sale oruse They must be consumed when they are offered

- Finally, services lack of ownership The service consumers often have access to theservice for a limited time

1.2 Service quality

1.2.1 Concepts of service quality

The American Society for Quality gave the definition of quality as “the totality

of features and characteristics of a product or service that bears on its ability to satisfy

stated or implied needs” (Jay et al., 2009)

We can define quality products as goods and services that are reliable in thesense that they do the job they were designed for and do it well, which increasesperceived value, but they are also differentiated by various attributes that customers

perceive to have a higher value (Charle et al., 2004).

Service quality can be defined as the difference between customer expectations

of service and perceived service If expectations are greater than performance, then

perceived quality is less than satisfactory and hence customer dissatisfaction occurs

(Parasuraman et al., 1985; Arash Shahin)

In another way, service quality can be defined as the ability of a service toperform its functions including the overall durability, reliability, precision, ease of

operation and repair, and other valued attributes (Kotler et al., 2005).

Banking service quality is intangible and estimated highly base on customers’experience Most bank claim that the bank is in the financial industry; therefore, theytend to compete each other base on their financial capacity rather than service quality.However, existence of any business including banking is due to customers who decidethe amount of company’s sales based on their perceptions of service quality In otherwords, service quality will determine the bank’s profitability, and customers willdetermine how service quality should be In this thesis, banking service quality may bedefined as the ability to satisfy the customer’s requirements and needs This abilityincludes everything that customers think they will be received from those services likeaccurate process, affordable price, on-time delivery, attitude of staffs, etc

1.2.2 Major aspects of service quality

There are several major aspects of service quality (Jay et al., 2009):

• First is the tangible component of many services That can be understood as how wellthe service is designed and produced make a difference For example, this might behow accurate, clear, and complete your account at the bank is…etc

• Second important aspect of service quality is the service process There are 10determinants of service quality which relate to the service process: tangible, reliability,responsiveness, competence, access, courtesy, communication, credibility, security,and understanding/knowing customers An operation manager can design processesthat have these attributes to ensure their service quality

• Third, the customers’ expectations are the standard against which the service is judged.Customers’ perceptions of service quality result from a comparison of their before-service expectations with their actual-service experience In other words, servicequality is judged on the basis of whether it meets expectations Thus, companycompletely should not promise more than they can deliver.

• The final aspect of service quality is the “exceptions” There is a standard quality level

at which the regular service is delivered, such as the bank teller’s handling of atransaction However, there are “exceptions” or “problems” initiated by the customers

or by less-than-optimal operating conditions (for example, the computers cannotwork) This implies that the quality control system must recognize and have a set ofalternative plans for less-than-optimal operating conditions

Designing the product, managing the service process, matching customers’expectations to the products, and preparing for the exceptions are keys to quality

services (Jay et al., 2009).

1.2.3 Measuring service quality

Measuring quality in service sector is more difficult than measuring quality ofmanufactured sector because quality evaluations are not made solely on the outcome

of a service; they also involve evaluations of the process of service delivery

There are many service quality research models on the world nowadays

Among them, SERVQUAL (Parasuraman et al., 1985, 1988) and SERVPERF (Cronin

& Taylor, 1992) seem to be more popular

SERVQUAL scale is the gap model for assessing customer perceptions ofservice quality in service and retailing organization The gaps refer to differencesbetween customer “expectations” - (E) and “perceptions” - (P) about service quality.The gaps revealed by the executive interviews are shown in Figure 1.1 (Parasuraman

et al., 1985; Arash Shahin):

Figure 1.1: Service quality model (Parasuraman et al., 1985)

- Gap 1: The gap between customers’ expectations and management perceptions ofthose expectations This gap is a result of the lack of marketing research orientation,inadequate upward communication and too many layers of management

- Gap 2: The gap between management perceptions of consumer expectations and thefirm’s service quality specifications This gap is a result of inadequate commitment to

service quality, a perception of unfeasibility, inadequate task standardization and anabsence of goal setting.

- Gap 3: The gap between service quality specifications and actual service delivery Thisgap is a result of role ambiguity and conflict, poor employee-job fit and poortechnology-job fit, in appropriate supervisory control systems, lack of perceivedcontrol and lack of teamwork

- Gap 4: The gap between actual service delivery and external communications aboutthe service This gap is a result of inadequate horizontal communications andpropensity of over-promise

- Gap 5: The discrepancy between customer expectations and their perceptions of theservice delivered This is a result of the influences exerted from the customer side andthe shortfalls on the part of service provider In this case, customer expectations areinfluenced by the extent of personal needs, word of mouth recommendation and pastservice experiences

Service quality depends on the size of gap 5 which, in turn, depends on gap 1, gap

2, gap 3, and gap 4 We can describe this relation in the following function:

Gap 5 = f (Gap 1, Gap 2, Gap 3, Gap 4)SERVQUAL was originally measured on 10 components of service quality

(Parasuraman et al., 1985):

- Reliability: involves consistency of performance and dependability It meansthat the firm performs the service right the first time and that the firm honors itspromises

- Responsiveness: concerns the willingness or readiness of employees toprovide service It involves timeliness of service

- Competence: means possession of the required skills and knowledge toperform the service

- Access: involves approachability and ease of contact.

- Courtesy: involves politeness, respect, consideration, and friendliness ofcontact personnel (including receptionists, telephone operators, etc…)

- Communication: means keeping customers informed in language they canunderstand and listen to them It may mean that the company has to adjust its languagefor different consumers – increasing the level of sophistication with a well-educatedcustomer and speaking simply and plainly with novice

- Credibility: involves trustworthiness, believability, and honesty It involveshaving the customer’s interests at heart

- Security: is the freedom from danger, risk, or doubt

- Understanding/knowing the customers: involves making the effort tounderstand customers’ needs

- Tangibles: include the physical evidence of the service

This scale covers almost all aspects of service, but it shows the complexity ofmeasurement Therefore, by the early nineties, the authors had refined the model tomeasure five underlying dimensions termed Tangible, Reliability, Responsiveness,

Assurance, and Empathy (Fogarty et al., 2000).

SERVQUAL scale has been criticized on various conceptual and operationalgrounds Cronin and Taylor (1992) were amongst the researchers who leveledmaximum attack on the SERVQUAL scale They questioned the conceptual basis ofthe SERVQUAL scale and found it confusing with service satisfaction Therefore,they opined that “expectation” - (E) component of SERVQUAL be discarded andinstead “performance” - (P) component alone be used They proposed the SERVPERFscale Besides, Cronin and Taylor (1992) provided empirical evidence across fourindustries namely banks, pest control, dry cleaning, and fast food to corroborate the

superiority of their “performance – only” instrument (Sanjay et al., 2004).

Methodologically, the SERVPERF scale represents marked improvement over theSERVQUAL scale by reducing 50% the number of items to be measured

1.3 Service quality and customer satisfaction

1.3.1 Concepts of customer satisfaction

The definition of customer satisfaction has been widely debated asorganizations increasingly attempt to measure it Customer satisfaction can beexperienced in a variety of situations and connected to both goods and services It ishighly personal assessment that is greatly affected by customer expectations (Centerfor the study of social policy, 2007)

Philip Kotler defined customer satisfaction is the extent to which a product’sperceived performance matches a buyer’s expectations If the product performancefalls short of expectations, the buyer is dissatisfied If performance matches or exceeds

expectations, the buyer is satisfied or delighted (Kotler et al., 2005).

Customer satisfaction is an important theoretical as well as practical issue forthe marketers and consumer researchers Customer satisfaction can be considered as

the essence of success in today’s highly competitive world of business (Vanniarajan et

al., 2007)

In this research, customer satisfaction can be understood as psychological state

of customers when service they received matches or exceeds what they expected

1.3.2 Relationship between service quality and customer satisfaction

There is a distinction between service quality and customer satisfaction:perceived service quality is a global judgment or attitude relating to the superiority ofthe service, whereas customer satisfaction is related to a specific transaction

(Parasuraman et al., 1988).

However, many researchers have stressed the positive relationship between

service quality and customer satisfaction (Emari et al., 2010) Brady and Robertson

(2001) conducted research about fast food restaurants in America and Latin America

The results indicated that there was a certain relationship between service quality andcustomer satisfaction Sureshchandar et al (2002) found that service quality andcustomer satisfaction were highly related In addition, Ruyter et al (1997) tested thehealth care service and attempted to determine the relationship between service qualityand customer satisfaction The results suggested that service quality should be treated

as an antecedent of customer satisfaction From these researches, it can be concludedthat service quality and customer satisfaction have a relationship in which servicequality is an antecedent as well as an important factor impacting on customersatisfaction

1.4 Research model and scales

1.4.1 Research model

SERVQUAL model and SERFPERF model are two popular quality models inthe world They were used in research such as “Measuring service quality usingSERVQUAL model: A case study of e-retailing in Iran” by Seyed Hossein Siadat(2008), “Measuring information science system service quality with SERVQUAL:Users’ perceptions of relative importance of the five SERVPERF dimensions” byHollis Landrum et al (2009) In banking sector, there are also many studies used thesemodels to analyze data namely “Measuring service quality of banks: Scaledevelopment and validation” by Osman et al (2005), “SERVPERF analysis in retailbanking” by Vanniarajan et al (2007), “Service quality in e-banking: Comparisonbetween SERVQUAL model and GRONROOS model” by Nguyen Thi Phuong Tram(2008), “Service quality perspectives and customer satisfaction in commercial banksworking in Jordan” by Anber Abraheem Shlash Mohammad and Shireen YaseenMohammad Alhamadani (2011)

This research will use the SERVPERF scale to measure perceived performance

of banking service Five components of service quality are tangible, reliability,responsiveness, assurance, and empathy The SERVPERF score which represents the

H2H1

perceived performance on components of service quality can be expressed in thefollowing equation:

ij

Where: SQ = perceived service quality of individual “i”

k = Number of attributes/items

P = perception of individual “i” to performance of service on item “j”

In addition, the research also analyzes the relationship between service qualityand customer satisfaction This relationship is modeled as following:

1.4.2 Hypotheses

There are several hypotheses for this research model as following:

- H1: Tangible component and customer satisfaction have a positive relationship Thatmeans the higher/lower customer evaluate tangible factor, the higher/lower level ofcustomer satisfaction

Figure 1.2: Research model

- H2: Reliability component and customer satisfaction have a positive relationship Thatmeans the higher/lower customer evaluate reliability factor, the higher/lower level ofcustomer satisfaction.

- H3: Responsiveness component and customer satisfaction have a positive relationship.That means the higher/lower customer evaluate responsiveness factor, the higher/lowerlevel of customer satisfaction

- H4: Assurance component and customer satisfaction have a positive relationship Thatmeans the higher/lower customer evaluate assurance factor, the higher/lower level ofcustomer satisfaction

- H5: Empathy component and customer satisfaction have a positive relationship Thatmeans the higher/lower customer evaluate empathy factor, the higher/lower level ofcustomer satisfaction

CHAPTER 2: RESEARCH CONTEXT AND METHODOLOGY2.1 Research context

2.1.1 Military Bank

Military Commercial Joint Stock Bank (MB) was established on September 30th

1994 with the initial charter capital of 20 billion VND (Military Commercial JointStock Bank, 2011) Head office of the bank is located at No.3, Lieu Giai, Ba Dinh,Hanoi After nearly 18 years of operation and development, Military Bank is strongerand gradually asserts its reputation in the financial service industry including banking,insurance and securities With diversified service portfolios, Military Bank has rapidlyexpanded its activities to new market segments By the time of December 31st 2011,Military Bank has had 52 branches (50 branches spreading over cities and provinces inVietnam, 1 branch in Laos, and 1 branch in Cambodia); 115 transaction offices; and 4saving funds Besides, Military Bank has 5 subsidiaries and 3 associated companies(Military Commercial Joint Stock Bank, 2011)

Initially, with 20 billion VND charter capital and 25 people, Military Bankstarted its business mostly by providing financial services for some militaryenterprises Through 18 years, the number of charter capital increased by 365 times toreach 7,300 billion VND with thousands stockholders and over 4,000 staffs Totalasset of Military Bank is continuously growing with 115,182 billion VND by the time

of June 30th 2011(Military Commercial Joint Stock Bank, 2011) Military Bank nowhas stable financial capability with high competitive advantage in the financial market

Together with development process, Military Bank set clear vision, mission,and core values for themselves (Military Bank’s website)

 Vision: To be one of the leading banks in Vietnam, aim to be one of Top 3Commercial joint stock banks, to be community-oriented bank with friendlyemployees and convenient transaction network

Risk ManagementFinancial AccountingInternal Audit Sector

Branches and Transaction Offices

Big customer sectorSMEs SectorPersonal SectorTreasury SectorNetwork manage-mentAdminis-tration SectorIT Sector

 Mission: Growth substantially; create differentiation and sustainability through course

of commands; competently-trained, strongly-committed and well-organizedemployees

 Core values: Military Bank’s values are not only evident in its assets but also in theintangible values that every staff appreciates and collaborates of which include:

The activities of Military Bank comprise these following business lines:

- Provide ATM services

- Raise capital for short term, medium and long term in form of deposit

- Give short term, medium and long term loans

- Give bank guarantees services

- Top 500 Largest Enterprises in Vietnam (2011)

- “Trust and Use Award” (2011)

- “Excellent Global Payment and Cash Management 2011” awarded by HSBC

- Top 20 Excellent Brands in Vietnam (2010)

Besides, Military Bank has received many other awards in previous years

Figure 2.1: Organizational structure of Military Bank (Military

Commercial Joint Stock Bank’s prospectus, 2011)

2.1.2 Transaction Center No.3 Lieu Giai, Hanoi

Beginning to expand network activities covering Hanoi and other Northprovinces, Military Bank officially opened and operated Transaction Center at No.3,Lieu Giai, Ba Dinh District, Hanoi in 2004 The building was designed with theformation of management blocs according to new model which helped raise theeffectiveness of the bank’s activities In addition, this location is considered as theheart of Ba Dinh District which is one of the most thriving economic zones withcrowded population in Hanoi Capital With the rapid development of the economy,economic units located in this district have great potential to grow That also createsfavorable conditions for Transaction Center to access and meet the financial needs ofenterprises and residents in surrounding area Besides, Lieu Giai is known as one ofthe most beautiful streets in Hanoi With a convenient location, large and beautifularea, and a car park, Transaction Center is an ideal place to make transactions as well

as meet business partners

Like all other Military Bank’s Transaction offices, Transaction center performsall bank services within the permitted activities of Military Commercial Joint StockBank In addition, Transaction center is located at the first floor of the Head Officewhere many other business activities of the bank occur every day Therefore,customers can not only assess services which they received, but also observe andassess service quality in a more overall view

2.2 Methodology

2.2.1 Designing questionnaire

Building measurement scale based on SERVQUAL scale which is popular used

in the world Designing questionnaire referred to quality measurement scales used inprevious research such as “SERVPERF analysis in retail banking” byDr.T.Vanniarajan et al (2007), “Service quality in e-banking: Comparison betweenSERVQUAL model and GRONROOS model” by Nguyen Thi Phuong Tram (2008)

Besides, measurement scale in this research was adjusted in order to be suitable forservices in Military Bank.

Questionnaire was designed in Vietnamese, and divided into three main parts(appendix A):

- Part I asked participants which service they used in Military Bank

- Part II was designed to collect assessments from customers about perceivedservice quality of Military Bank, and their satisfaction level

- Part III included questions about customers’ basic information to classifyparticipants

Part II comprised 22 variables in total Assessing perceived service quality underSERVPERF model included 20 variables to measure 5 above components while theresearch used 2 variables to measure customer satisfaction This measurement based

on a 5-point rating scale which corresponding to 1 = strongly disagree, 2 = somewhatdisagree, 3 = neither agree nor disagree, 4 = somewhat agree, 5 = strongly agree.Customers gave points for 22 following opinions:

• Tangible:

- Employees appear fully with neat uniform

- Physical facilities in transaction center are modern and comfortable

- Equipments for transaction are suitable and utilitarian

- Materials associated with service are in full and clear

• Reliability:

- The bank keeps record correctly

- The bank performs services right at the first time

- The bank performs services exactly as what they promised

- Employees help customer solve problems in all sincerity

• Responsiveness:

- Employees expect to provide services for you

- Employees are willing to help you

- Employees respond to your requirements as soon as possible

- Employees let you know exactly when your requirements are done

• Assurance:

- You feel safe when you make transactions with the bank

- You trust employees who perform transactions

- Employees behave courteously and politely with you

- Employees have professional knowledge to perform transactions or to answerall your queries

• Empathy:

- Operating time of the bank is convenient for you

- Employees always to bring the best benefits for you

- The bank always deeply understands your needs

- The bank always gives you personal attention and care (in your birthday, NewYear, etc)

• Customer satisfaction:

- You are very satisfied with quality of services at Military Bank

- In the future, you will continue to use Military Bank’s services

2.2.2 Sampling and collecting data

According to a staff in Transaction center, there are about 100 customerscoming to Transaction center every week day Most customers are young people whocome to open bank account or card Many others come to give savings or represent fortheir company to make payment transactions

This study has 22 variables in totals According to Hair et al, (1998), cited inNguyen Thi Phuong Tram (2008), the sample size should be at least 5 respondents per

1 observed variable In order to collect at least 5 respondents per 1 observed variable,the study need to collect at the minimum sample size of 110 respondents To get thissample size, 150 questionnaires were given to customers

Method to collect data was conducting surveys with customers who come tomake transactions in Transaction center of Military Bank – No.3, Lieu Giai, Hanoi.Questionnaires were provided to customers who have free time and be ready to answersurvey questions It took each customer about 10 to 15 minutes to answer thequestionnaire Survey process was carried out from April 5th 2012 to April 14th 2012

2.2.3 Analyzing data plan

At first, data will be input and screened to identify missing samples Afterrejecting all invalid samples, data will be encoded as in the following table:

Table 2.1: Encoded data

TANGIBLE

1 TANGIBLE 1 Employees appear fully wits neat uniform

2 TANGIBLE 2 Physical facilities in transaction center are

modern and comfortable

3 TANGIBLE 3 Equipments for transaction are suitable and

utilitarian

4 TANGIBLE 4 Materials associated with service are in full and

clear

RELIABILITY

5 RELIABILITY 1 The bank keeps record correctly

6 RELIABILITY 2 The bank performs services right at the first

9 RESPONSIVENESS 1 Employees expect to provide services for you

10 RESPONSIVENESS 2 Employees are willing to help you

11 RESPONSIVENESS 3 Employees respond to your requirements as soon

as possible

12 RESPONSIVENESS 4 Employees let you know exactly when your

requirements are done

15 ASSURANCE 3 Employees behave courteously and politely with

you

16 ASSURANCE 4 Employees have professional knowledge to

perform transactions or to answer all yourqueries

19 EMPATHY 3 The bank always deeply understands your needs

20 EMPATHY 4 The bank always gives you personal attention

and care (in your birthday, New Year, etc…)

a. Reliability analysis by Cronbach’s alpha

Cronbach’s alpha is a common measure of internal consistency (reliability) of a test

or scale Internal consistency describes the extent to which all the items in a testmeasure the same concept or construct and hence it is connected to the inner-

relatedness of the items within the test (Tavakol et al., 2011) Cronbach’s alpha is

most commonly used when researcher has multiple Likert question in a survey orquestionnaire that form a scale and the researcher wishes to determine whether thescale is reliable (Laerd statistics)

The value of alpha (α) may be between negative infinity and 1 However, onlypositive values of alpha have meaning In general, alpha coefficient ranges in valuefrom 0 to 1, and the increase of this value means that the correlations between theitems increase (Amit Choudhury, 2010) Therefore, this processing data method helpsanalyst assess the reliability of scale through Cronbach’s alpha coefficient Acommonly accepted internal consistency using Conbach’s alpha is as follow:

Table 2.2: Cronbach alpha values and internal consistency (George & Mallery,

Besides assessing the reliability of scales, Cronbach’s alpha analysis also helps tocheck whether any item is not consistence with the rest of the scale through item-totalcorrelations Item-total correlation performs the correlation of one variable with others

in the same scale; the higher correlation value, the better correlation between that itemand the others Variables which have greater than 0.3 item-total correlations will be

accepted; the others which have smaller than 0.3 item-total correlations will beeliminated from analysis data.

b. Exploratory factor analysis

Exploratory factor analysis is a powerful statistical technique which is used fordata reduction and summarization The primary objectives of an exploratory factoranalysis are to determine (1) the number of common factors influencing a set ofmeasures; (2) the strength of the relationship between each factor and each observedmeasure (DeCoster, 1998)

At first, it is necessary to test the sampling adequacy of factor analysis base onKaiser-Meyer-Olkin (KMO) Measure In case of KMO has value between 0.5 and 1.0and Sig is smaller than 0.5, factor analysis is more appropriate factor analysis In case

of KMO has value smaller than 0.5 or Sig is greater than 0.5, it indicates that factoranalysis may not be appropriate

By performing exploratory factor analysis, investigator can decide the number

of factors to extract in the model The Kaiser creation states that investigator shoulduse a number of factors equal to the number of the eigenvalues of the correlationmatrix that are greater than one (DeCoster, 1998) In this research, the eigenvalues will

be plot in descending order, then the number of factor will equal to the number ofeigenvalues that occur prior and have greater than 1.0 values

An important part in exploratory factor analysis is interpreting factor matrixes.This research will use Varimax rotation process to produce multiple group factors.Factor loadings which indicate correlations between the variables and the factors arerequired to have greater than 0.5 values Then, a factor can be interpreted in terms ofthe variables that have high load on it

c. Regression analysis

Regression analysis is a modeling technique for analyzing the relationshipbetween a real-valued dependent variable Y and one or more independent variables X1,

X2, X3,…., Xk (Ragsdale, 2007) The goal in regression analysis is to identify a functionthat describes the relationship between these variables as closely as possible so that wecan assess the impact of each independent variable on dependent variable as well aspredict the change in dependent variable when there is any change in independentvariables

The regression model in this research is:

Y = b0 + b1 X1 + b2 X2,……+bk Xk + ε

Where:

- Y = Scores on the customer satisfaction towards Military Bank

- X1, X2,……, Xk = Scores on the attitude towards the quality components (tangible,reliability, responsiveness, assurance, empathy)

- b1, b2 ……, bk = Regression co-efficient of independent variables

- b0 = an intercept

- ε = an error term

At first, it is necessary to test assumptions for regression analysis The principalassumption is that there is a linearity of the relationship between dependent andindependent variables This research investigates the model with more than oneindependent variables, the correlation among independent variables (multi-collinearity) should be checked Variance inflation factor (VIF) is used to measure themulti-collinearity in this regression analysis Regression model accept variables whichhave VIF smaller than 10 If VIF for one variable is around or greater than 10, there iscollinearity associated with that variable; this variable should be removed from theregression model In addition, it is assumed that the error terms ε are independent,normally distributed random variables with mean value of 0, and constant variances

As long as these assumptions are not seriously violated, regression model will beestablished Once regression function was given, the research can investigate

relationship between service quality and customer satisfaction in Military bank square (coefficient of determination) will provide a goodness-of-fit measure Withhigher R-square value, the model is higher fit for analysis

R-CHAPTER 3: RESEARCH ANALYSIS AND RESULTS

3.1 Data description

Table 3.1: Descriptive Statistics

N Minimum Maximum Mean Std Deviation