Service convenience and customer satisfaction in vietnamese banking sector

A five point Likert scale was used to measure five items of service convenience – which include decision convenience, access convenience, transaction convenience, benefit convenience, po

Le Thi Diem Ngan

SERVICE CONVENIENCE AND CUSTOMER SATISFACTION IN

VIETNAMESE BANKING SECTOR

MASTER OF BUSINESS

Ho Chi Minh City – Year 2014

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business -

Le Thi Diem Ngan

SERVICE CONVENIENCE AND CUSTOMER SATISFACTION IN

VIETNAMESE BANKING SECTOR

true in banking sector, where going along with the open market policy, many internationals banks have come to operate In this circumstance, increasing customer satisfaction has become an important strategy for many banks Besides impact of the traditional factor is service quality, there is also the impact of service convenience on customer satisfaction

Purpose – The main purpose of this study is to examine the relationship between service convenience and customer satisfaction in Vietnamese banking sectors This study also considers the affect of each dimension of service convenience on customer satisfaction

Method – Research data was collected from 201 retail banking customers A five point Likert scale was used to measure five items of service convenience – which include decision convenience, access convenience, transaction convenience, benefit convenience, post-benefit convenience; and customer satisfaction

Findings – The research indicates that service convenience is the most important factor that affect to customer satisfaction in banking field Decision convenience, access convenience, performance convenience, and post- benefit convenience are four components

of service convenience in Vietnamese banking sector All these components have positive impact on customer satisfaction with different intensity Post-benefit convenience has a strongest affect to customer satisfaction while decision convenience has a weakest affect in compare to others factors These effects are also different between groups of customers

Research limitations – This study ignores the impact of other factors on customer satisfaction such as service quality, price … Just a specific retail retail banking customers are interviewed is another limitation of the study

Practical implication – Each stage on consumption process can please customers differently Banks should pay attention to them to design services and invest resources

CONTENTS

CHAPTER 1 INTRODUCTION 1

1.1 Research background 1

1.2 Research problem 2

1.3 Research objective 4

1.4 Research questions 5

1.5 Research scope 5

1.6 Structure of the thesis 5

CHAPTER 2 LITERATURE REVIEW, HYPOTHESES AND CONCEPTUAL MODEL 6

2.1 Theoretical background 6

2.1.1 Service convenience 6

2.1.2 Service convenience in banking industry 7

2.1.3 Customer satisfaction 8

2.1.4 The relationship between service convenience and customer satisfaction 8

2.2 Research model and hypotheses 10

2.2.1 Service convenience construct 10

2.2.2 Research model 13

CHAPTER 3 RESEARCH METHODOLOGY 15

3.1 Research process 15

3.2 Measurement 16

3.2.1 Measurement of service convenience 17

3.2.2 Measurement of customer satisfaction 18

3.3 Draft questionnaire 19

3.4 Pilot study 19

3.5 Sample selection 20

3.6 Data analysis method 21

CHAPTER 4 DATA ANALYSIS AND RESULTS 23

4.1 Descriptive analysis 23

4.1.1 Respondents’ demographics 23

4.1.2 Descriptive statistics 24

4.2 Reliability analysis 26

4.3 Testing unidimensionality 27

4.4 Measurement model test 27

4.5 Regression analysis 31

4.6 Exploring the effect of demographic variables 34

4.7 Discussion 36

CHAPTER 5 CONCLUSION 39

5.1 Findings and conclusions 39

5.2 Managerial implication 40

5.3 Limitations and suggestion 41

References 43 Appendix 1: Questionnaire

Appendix 2: Testing the unidimensionality

Appendix 3: EFA

Appendix 4: Chart of testing regression hypothesis

Appendix 5: Testing the effect of demographic variables

LIST OF TABLES

Table 1.1 Some statistic about Vietnamese banking sector 3

Table 3.1 Items used for measuring service convenience in banking sector 17

Table 4.1 Respondents’ characteristics 23

Table 4.2 Item descriptive statistics 25

Table 4.3 Internal reliability for each construct 26

Table 4.4 Factor loading for independent variables 28

Table 4.5 Factor loading for dependent variable 30

Table 4.6 Factor correlation matrix 30

Table 4.7 Model Summary 32

Table 4.8 ANOVA 33

Table 4.9 Coefficients 33

Table 4.10 Groups for testing the effect of demographic variables 34

LIST OF FIGURES Figure 2.1 Model of service convenience’s dimensions and customer satisfaction 13 Figure 3.1 Research process 16 Figure 4.1 The revised research model 31

CHAPTER 1 INTRODUCTION The aim of this chapter is providing a general view of the research The chapter begins with the introductory background and research problem which include the overview

of Vietnamese banking sector, the importance of customer satisfaction and reasons for this research Then, the research objective and research questions are identified Research scope and thesis structure are also outlined

1.1 Research background

In the recent years, going along with the development of the economy, the financial sector has also made significant growth This would expect to witness increased competitiveness, diversification The open market policy for foreign financial institutions to operate in Vietnam also makes the competition tougher Banks must pay attention to search for the method to enhance customer satisfaction, then to retain their current customers as well as attract new customers For better understanding the main concern of customers, researchers should stand in customer’s view point to search for the solution Whenever using a service, customer must sacrifice money, time, and effort Set aside the amount of money being paid by the customer, time and effort contributed by customer are captured under the construct of service convenience (Berry, Seiders, & Grewal, 2002)

In order to achieve successful and create a competitive advantage for firm, listening closely to customers' considerations is also recommended This can be achieved by identifying the most important stage of using process in which to invest and using those investments to satisfy customers

Previous studies have made to solve this problem in other service industries or in other countries Kaura (2013) suggested that both service quality and service convenience have positive impact on customer satisfaction, and this impact is different between private and public sector based on a study in India banking sector “Interest rates, fee structures and a variety of financial services and products rank far behind convenience and customer service when consumers are choosing a primary bank” (Colman,

2004, p 11) After a statistical analysis in Chinese chain restaurant, Kuo-Chien, Mu-Chen, Chia-Lin, Kuo, and Nien-Te (2010) found out the effect of service convenience on customers' post-purchasing behaviors However, there are still so few studies about this aspect in Vietnamese banking sector

1.2 Research problem

Banking industry is the vital part of the financial system which the main mission are attracting deposits and providing credits for the economy, supply services and booting the economic development Before the revolution in 1986, the Vietnamese economy in general and the banking system in particular were all under the moderator of government The Sate Bank of Vietnam operated as both a state bank and a commercial bank Since 1986, a campaign namely “Doi Moi” was launched to promote the economy to become more open and market-oriented That was the reason for the transformation of the banking system as well

The reform of the economy was started from May 1990 with two important decrees: one was the Decree on the State Bank of Vietnam, and the other was the Decree on Banks, Credit cooperative and Financial companies 2 These decrees made an important transformation of the Vietnamese banking system The State Bank of Vietnam from now on acted as a central bank, while others banks and financial companies can operate other commercial banking activities independently (Ngo, 2012)

Since this reform until now, the Vietnamese banking sector has made a significant development There was a growth not only in the number of banking institution but also the domestic credit provide for the economy, the number of transaction payment, and banking customers With 15.7% GDP in 1992, the domestic credit provided by the financial sector has reach 108.2% GDP in 2013 (World Bank, 2014) It means the banking system has played a vital role in the economic development and growth The table below provides some brief statistic about Vietnamese banking sector It implies the expanding of financial and banking sector in recent years to residents

Table 1.1 Some statistic about Vietnamese banking sector

Commercial bank branches (per 100,000

adults)

Based on a survey of MCG Management Consulting Ltd (2006) on Vietnamese banking customer reactions, half of customers may leave from Vietnamese banks to foreign bank Despite of the advantage on customers trust and cultural links, there are many reasons for this switch such as: professionalism, interest rate level, service quality, accessibility… then, banks have no option than to improve efficiency

In a competitive market place, customer satisfaction is seen as a key to long term success of any organization, and banks in particular Most of banks products and service are easy to duplicate Therefore, customer satisfaction is potentially an effective tool that banks can use to gain a strategic advantage and survive in today’s ever-increasing banking competitive environment (Kumar & Gangal, 2011) Researchers have found that customer satisfaction has a measurable impact on purchase intentions (Carter, as cited in Mandal & Bhattacharya, 2013), on customer retention (Voss & Voss, as cited in Mandal &

Bhattacharya, 2013) and on firm’s financial performance (Chalmeta, as cited in Mandal & Bhattacharya, 2013) Customers’ needs and expectations change quickly So, banks can not provide satisfaction for their customers without understanding their expectations

With the expanding of financial sector, using bank service has become a vital part of modern life More and more people have transaction with banks in many services such as deposits, money transfers, financial advisory, money exchange… through directly, ATMs, mobile banking, internet banking… Money, time, and effort are resources that customers must provide to receive value Set aside the affect of price on customers, time and efforts must sacrifice are important factors that attract customers to a specific bank Time and efforts resources are put into research under the construct of service convenience

Despite the important impact of service convenience in satisfying customers, there are not many researches about this relationship in Vietnamese “Service convenience is not

an inherent characteristic of a service being offered by the supplier but a proxy of resources being used by customers” (Thuy, 2011, p 476) Based on a research in domestic airlines customers in Vietnam, it is reinforced that “customers use the judgment of their own contribution (via convenience) to evaluate the contribution of the supplier (via service quality), and the resources contributed by both sides will co-create value for the customers” (Thuy, 2011, p 473) There is still a necessity to research about the impact of service convenience on customer satisfaction in Vietnamese banking sector

1.3 Research objective

The research objective is to examine the impact of service convenience on customer satisfaction in the context of banking services And then, explore the relative weights of various dimensions of service convenience, and how these dimensions affect customer satisfaction Besides, the research also test differences in impact of service convenience on customer satisfaction between groups of genders, bank transaction frequency … to have a better understanding of these relationships

1.4 Research questions

The main goal of the research is answering these questions:

 What are the key dimensions of service convenience in the banking service?

 Are there significant relationships between customer satisfaction and the service convenience dimensions?

1.5 Research scope

However, besides the direct impact of service convenience on customer satisfaction,

it also has the indirect impact of service convenience on customer satisfaction through other factors, such as service quality that has not been researched in this study Moreover, this study has taken into account a specific category of retail banking customers in Ho Chi Minh city Thus, it limits generalization of results to other banking populations

1.6 Structure of the thesis

The thesis consists of five chapters The first chapter provides an overview of the research It includes research background, reason why the author chooses to do this research And then, follows by research objective, questions, and limitations

Chapter 2 is the literature review This chapter explains concepts of research, such as: convenience, service convenience, satisfaction, and the relation between them Hypotheses and research model are also presented in this chapter

Chapter 3 is the research method It includes the process in which the research is done Measurements for each constructs are also introduced clearly This chapter discusses step by step ways that the data was collected: from design the questionnaire, carry pilot study, to implement the survey Data analysis method is also introduced in this chapter

Chapter 4 provides the result of analysis from the data collected from chapter 3 Data was analyzed in some methods: test the reliability, convergent, discriminant, and the relations between the independent variables and dependent variable

Chapter 5 discusses results of the data analysis It includes conclusion, practical implication, research scope and limitations This chapter also suggests some recommendations for further study in this sector

CHAPTER 2 LITERATURE REVIEW, HYPOTHESES AND

CONCEPTUAL MODEL

The aim of this section is to present the literature background of the research, and provides a theoretical framework This chapter begins with the review on the definition of service convenience, customer satisfaction, and the relationship between these concepts The chapter then indentifies service conveniences dimensions and their affects on customer satisfaction to formulate research hypothesis and model

2.1 Theoretical background

2.1.1 Service convenience

Convenience is defined by Webster (1990) as “accessible or at hand; any thing that saves works, adds to comfort, etc” Earlier, Copeland (1923) suggested the classification of convenience goods component consumer products, which consist of convenience goods, shopping goods, and specialty goods Convenience goods are taken as the savings in time and effort that consumers spend in purchasing products, rather than as an attribute of product itself Moreover, Morganosky (1986) defined convenience as the ability to accomplish a task in the shortest time with the least expenditure of human energy It consists of the time and effort consumers expend on product and service acquisition and consumption (Brown, 1990) Later on, convenience is defined as “a reduction in the amount

of consumer time and/or energy required to acquire, use and dispose of a product or service relative to the time and energy required by other offerings in the product/service class” (Brown & Mcenally, 1993) More recently, Dabholkar, Bobbitt, and Lee (2003) has researched how technology (specifically self-service technology) may enhance convenience and increase consumer satisfaction with service encounters Convenience is generally viewed as one of the most important factor to consumer behavior

Past research reveals that convenience is a multidimensional construct According to Yale and Venkatesh (1986), there are six classes of convenience: time utilization,

Another approach divides convenience into five dimensions, includes time, place, acquisition, use, and execution (Brown, 1989; 1990)

2.1.2 Service convenience in banking industry

Nowadays, most banks provide customers with similar services, like money transfer, deposits, loans, safety vault keeping, insurance etc Due to tough competition in the industry, banks are under pressure to retain customers And six events which were considerably important in order to understand the factors of bank switching were labeled as inconvenience, service failures, pricing, unacceptable behavior, attitude or knowledge of staff, involuntary mentioned incidents and attraction by competitors (Gerrard & Cunningham, 2004) So, improving service convenience is one of the key solutions to help banks improve competitive

According to Mccormick (2000), five statistically significant factors that predict 85%

of the variation among banks' core deposit growth are: the level of spreads and fees, service, branch and ATM convenience matter Banks with the largest increase in acquisition-adjusted number of branches achieved one-percentage point higher annual balance growth than the average bank Where different banks strike the balance between convenience and community warmth seems to depend mainly on their size, and related factors, which include how a bank figures the cost-benefit of making a considerable up-front investment in various kinds of hardware and software, their corporate image, and whether or not they are stockholder-owned (Brown, 1998)

Many of big banks have made great strides in listening to what their customer are asking for, reducing the number of problems customers encounter, and more importantly, improving satisfaction with fees (Anonymous, 2013) Customers today are likely to find banks of all sizes offering the level of convenience, technology, and personal service they have come to expect Levesque and McDougal (1996) suggested that with retail banking, the convenience and competitiveness of the provider’s offerings can be expected to affect a customer’s overall satisfaction and ongoing patronage The research has shown that location

is a major determinant of bank choice Underlying location are the customer benefits of

convenience and accessibility which are enabling factors that make it easy for the customer

to do business with the bank

2.1.3 Customer satisfaction

Customer satisfaction has been identified many times in previous studies However,

it is factual that, there is no specific definition of customer satisfaction Most of researchers agree that satisfaction is an evaluation or attitude that is formed by the comparison made by customer for their pre-purchase expectations of what they would receive from the product to their subjective perception of the performance they actually received (Oliver, 1980) Customer satisfaction links processes culminating purchase and consumption with post purchase phenomena such as repeat purchase, brand loyalty and attitude change (Churchill

& Surprenant, 1982) Tse and Wilton (1988) suggested that customer satisfaction is the consumer’s response to the evaluation of the perceived discrepancy between prior expectations and the actual performance of the product or service as perceived after its consumption This definition is supported by Fornell (1992) that considers satisfaction as an overall post-purchase evaluation by the consumer Another definition is that customer satisfaction is the individual’s perception of the performance of the products or services in relation to his or her expectations (Schiffman & LazarKanuk, 2004) According to Levy and Weitz (2009), customer satisfaction is a process of evaluating a product or service after consumption to discover whether customer’s expectation has been met or even exceed

Customer satisfaction has always been the most essential thing for an organization A satisfied buyer will be more likely to repurchase or at least consider repurchasing than those who are dissatisfied (Keith, 1960) Customer satisfaction has been considered as the important key to help increase the company’s profitability, market share, and return on investment (Nadiri & Hussain, 2005)

2.1.4 The relationship between service convenience and customer satisfaction

Most definitions of customer satisfaction have favored the notion of consumer satisfaction as a response to an evaluation process In a study of Giese and Cote (2000), they grouped the view of satisfaction base on time-specific to before purchase, after purchase but

before consumption, during consumption, or after consumption Another author stated in his theory that “definition of consumer satisfaction relates to a specific transaction (the difference between predicted service and perceived service) in contrast with ‘attitudes’, which are more enduring and less situational-oriented”, (Lewis, 1993, p.4-12) Meanwhile, five dimensions of service convenience reflect activities that customers engage in during the acquisition and consumption of services (Berry et al., 2002) and that tend to dominate customer satisfaction with a business The more customers experience necessary and relevant service convenient events, the stronger their satisfaction with the business will be

Previous studies have shown the relationship between service convenience and customer satisfaction Seiders, Voss, Grewal, and Godfrey (2005) reported that overall convenience interacts with satisfaction to exert a positive influence on repurchase visits and spending Service convenience has been hypothesized as having an impact on customer satisfaction and repeat purchase from a service organization (Seiders, Voss, Godfrey, & Grewal, 2007; Colwell, Aung, Kanetkar, & Holden, 2008) Service convenience provides the means for decreasing time and effort costs in the acquisition and employment of a service, which in turn enhances satisfaction evaluation (Crosby & Stephens, 1987)

A study of Kaura (2013) about the customer satisfaction of India public and private sector banks highlighted the importance of service convenience and perceived price and fairness in measuring customer satisfaction It reiterates the importance of employee behavior in customer satisfaction for both public and private sector banks The study also found that each dimension of service convenience has different impact on customer satisfaction

In Vietnam, base on a research of Thuy (2011) in airline industry, service convenience has a positive total impact on the overall satisfaction of customer Apart from the direct affect, there is also a significant indirect impact of service convenience on customer satisfaction via the mediating role of perceived service quality

If customers agree that they are satisfied and give the reasons for satisfaction as service convenience; service convenience dimension has significant relationship with service convenience and customer satisfaction, then a conclusion could be drawn that service convenience dimensions have a significant relationship with customer satisfaction

So, it is important to identify the effect of elements of service convenience to gain customer satisfaction

2.2 Research model and hypotheses

2.2.1 Service convenience construct

Consumers experience an increase in time deficiency when conducting tasks related

to the acquisition and consumption of a service (Zeithaml & Bitner, 2000) So, service convenience can be thought as a mean of adding value to consumers, by decreasing the amount and effort which a consumer must spend on the service Berry et al (2002) proposed service convenience as a multidimensional construct, and that service convenience is conceptualized as the consumers’ time and effort perceptions related to buying or using a service Berry et al (2002) presented a conceptual model of service convenience which consists of five constructs: decision convenience, access convenience, transaction convenience, benefit convenience, and post-benefit convenience This conceptualization reflects a multistage consumption process in which evaluations of convenience vary at each stage, includes: problem recognition, information search, alterative evaluation, purchase and post-purchase stages (Engel & Blackwell, 1982) Service convenience can be influenced by various factors in relation to firms, such as physical environment (Bitner, 1992), company's brand name (Berry, 2000), and the design of service system (Meuter, Ostrom, Roundtree, & Bitner, 2000)

Applying the conceptualization about service convenience above to different stages

of the consumption process, this research uses the service convenience construct of Berry et

al (2002) to analyze the impact of service convenience on customer satisfaction Five dimensions of service convenience are: decision convenience, access convenience, transaction convenience, benefit convenience, and post-benefit convenience

Decision convenience

Decision convenience is defined as the consumers’ perceived time and effort expenditure to make service purchase or use decisions When consumers recognize the need for a product or service, they are faced with the decision of which suppliers to choose In this stage, the availability and quality of information about the service provider and its competitors determine decision convenience (Zeithaml, Berry, & Parasuraman, 1996)

According to Cardozo (1965), the supplier can alter the amount of efforts customers expend to make the purchase more or less difficult by varying the amount of information provided to customers With so little information, the customers may need more effort to gather additional information With a great deal of detail information supplied, the customers may expend considerable effort to process the information The expectations that customers have regarding a product depend upon information they gather So, achieving the expectations on information easily with less effort will be a way to satisfy customer

H1: Decision convenience will result in customer satisfaction

Access convenience

Access convenience is defined as the “consumers’ perceived time and effort expenditure to initiate service delivery” (Berry et al., 2002) Access convenience is determined by the physical location, operating hours, and availability online, by phone, or in person (Meuter et al., 2000)

One example of service that creates the access convenience for customers is online store Online stores offer customers the convenience of comparison shopping and enable them to quickly access preferred goods and services And when customers can have enjoyable experience in a convenient shopping environment, not only will customer satisfaction be enhanced but their custom will be retained (Hung, Chen, & Huang, 2014) In this research, we will examine the impact of access convenience in customer satisfaction in banking sector

H2: Access convenience will result in customer satisfaction

Transaction convenience

Transaction convenience is defined as “consumers’ perceived time and effort expenditures to effect a transaction” (Berry et al, 2002) It reflects the time spend on physical or remote queues, which can be problematic for firms because wait times commonly are perceived as longer than they actually are and negatively influence overall service evaluations (Kumar, Kalwani, & Dada, 1997)

Providing convenience during the transaction stage enables the consumer to efficiently assume possession of the acquired service (Pandya, Joshi, & Ghumaliya, 2012) The more effort customers have to complete a transaction with a business, the less likely they are to bring repeat business to that company in the future

H3: Transaction convenience will result in customer satisfaction

Benefit convenience

Benefit convenience is defined as “consumers’ perceived time and effort expenditures to experience the service’s core benefit” (Berry et al, 2002) That is at the consumption stage, after a consumer has accessed and purchased the service Benefit convenience varies in importance across service categories and may be less relevant for services with high hedonic as opposed to utilitarian value (Holbrook & Lehmann, 1981)

According to Seo and Warman (2011), perceived benefit convenience and information failure among other factors in service convenience and performance failure are the most significant factors that are positively and negatively related to user satisfaction

H4: Benefit convenience will result in customer satisfaction

Post-benefit convenience

Post-benefit convenience is defined as “consumers’ perceived time and effort expenditures when reinitiating contact with a firm after the benefit stage of the service”

(Berry et al, 2002) It becomes important after the service exchange This involves the need

to contact the provider after the sale is complete to initiate the service complaints or failures, request maintenance or upgrades, or for general service support (Zeithaml & Bitner, 2000)

When customers encounter a service problem, solutions and supports from the supplier will affect the customer’s overall perception of the company’s service Customers those experiencing recent service problems but then receiving satisfactory solution have significantly higher loyalty and pay more intentions, and significantly lower switch and external response intensions, than those with unresolved problem (Zeithaml et al., 1996)

H5: Post - benefit convenience will result in customer satisfaction

2.2.2 Research model

The conceptual model constructed based on literature review representing the relationship between customer satisfaction and service convenience dimensions is presented

in the model below

Figure 2.1 Model of service convenience’s dimensions and customer satisfaction

Summary Many researchers have highlighted the importance of service convenience on measuring customer satisfaction Service convenience includes five dimensions: decision

convenience, access convenience, transaction convenience, benefit convenience, and benefit convenience They reflect five stages of consumption process: problem recognition, information search, alterative evaluation, purchase and post-purchase stages, which have been constructed to have a positive effect on customer satisfaction The research hypotheses and model are constructed based on this literature background

post-CHAPTER 3 RESEARCH METHODOLOGY The aims of this section is to explain methods used in carrying out this research This chapter begins with the research process, development of measuring concepts, and constructs of the questionnaire How to collect data and method for data analysis are also presented in this chapter

3.1 Research process

The research began with the determinant of the problem Development and competition in banking industry force banks to have solution to retain current customers as well as attract new customers Then come up with the purpose of the study is to determine the relationship between service convenience and customer satisfaction The literature review made with the first part is the definition of all constructs, then the relationship between service convenience and customer satisfaction Hypothesis and model were also built based on that There are five hypotheses with the impact of five dimensions of service convenience on customer satisfaction

Then, the measurement scale was developed for each construct to form the draft questionnaire This questionnaire was check for the clearly and suitable through a pilot study Some modifications were made before the final questionnaire was sent to participants Both e-mail survey and face to face were chosen for collecting research data

Next, quantitative data collected from the survey was used for analysis to check the impact of each dimensions of service convenience to customer satisfaction

The final part is discussion and conclusion drawn up from the result of the research

Figure 3.1 Research process

3.2.1 Measurement of service convenience

Service convenience was measured based on the service convenience dimensions

proposed by Berry et al (2002) They include decision convenience, access convenience,

transaction convenience, benefit convenience, and post-benefit convenience To measure each dimension, we referred to the scale of previous researches These items were justified

in the case of banking sector

Table 3.1 Items used for measuring service convenience in banking sector

1/ It took minimal time to get the information needed

service)

6/ It was easy to contact A bank

7/ It did not take much time to reach A bank

8/ I was able to get to A bank's location quickly

Berry et al (2002)

Access

convenience 9/ A bank was available when I needed to talk to them

10/ A bank is accessible through various ways (online, telephone, and in person)

11/ The hours of operation of A bank were convenient

Colwell et al (2008) (modified

service) Transaction

purchase

14/ I was able to complete my purchase quickly

15/ There were no problems to deal with during the purchase that added to the purchase time

Colwell et al (2008) (modified

service) 16/ I was able to get the benefits of the service with

minimal effort

17/ The service was easy to use

18/ The time required to receive the benefits of the service was appropriate

Berry et al (2002)

service)

Post-benefit

convenience

20/ A bank resolved my problem quickly

21/ It took little effort to arrange follow-up service

22/ A bank made it easy for me to resolve my problem

Berry et al (2002)

3.2.2 Measurement of customer satisfaction

Three items were used to measure customer satisfaction These measures have frequently been used in both academic and practitioner studies of customer satisfaction (Brown et al., 1993; Komunda & Osarenkhoe, 2012)

1 Considering everything, I am extremely satisfied with this bank

2 This banks always meet my expectation

3 The overall quality of the services provided by this bank is excellent

3.3 Draft questionnaire

Structure of the questionnaire consists of three main parts:

Part 1: One question aims to help respondents target to one bank to answer all questions about that bank

Part 2: The main part which includes questions based on scale of measurement was proposed for the research This part consists of 25 questions, and categorized in six groups:

- Group 1: 5 questions, from question 1 to 5: refer to decision convenience

- Group 2: 6 questions, from question 6 to 11: refer to access convenience

- Group 3: 4 questions, from question 12 to 15: refer to transaction convenience

- Group 4: 4 questions, from question 16 to 19: refer to benefit convenience

- Group 5: 3 questions, from question 20 to 22: refer to post-benefit convenience

- Group 6: 3 questions, from question 23 to 25: refer to customer satisfaction Part 3: Questions on demographics characteristics (gender, age, job, income) and the amount and experience of transaction with this bank It includes 7 multiple choice questions concerning

The survey questions were first designed in English and then were translated from English to Vietnamese

3.4 Pilot study

The measurement of all constructs was based on previous researches, which were conducted in other countries and in different industry sectors Put it in the circumstance of this study may no be suitable And the questions translated from English to Vietnamese may make some confuses for respondents To avoid these problems, a pilot study was conduct

Through qualitative research method, a pilot study was carried out 20 questionnaires were sent to 10 bank staffs who know clearly about banking services and to 10 customers

for checking These interviewees indicated some mistakes of the questionnaire such as: questions order, answers with lack of some choices, not clearly… Then, some justifications

in the questionnaire were made to make it clearly and easy to understand

3.5 Sample selection

The population of the study is the banking customers in Ho Chi Minh City- the biggest city of Vietnam Two hundred fifty customers of different banks in the public and private sectors were interviewed The convenience sampling method was used to collect the research data Firstly, the survey link was sent to reach customers because that was the simplest mean to get data However, the responds received from this method was not high Then, printed questionnaires were dropped at the customer desk of different banks

The data was collected using both online survey and paper questionnaire The online survey was set up to ensure that all respondents have to finish all questions However, for paper survey, some uncompleted questionnaires were collected Also, some errors may be made in the process of inputting the data in the worksheet To handle these problems, after inputting the data, I went through them and removed uncompleted items and outliers The remaining data was used for analyzing At the end of this step, there were 201 usable questionnaires for the next step of data analysis

Before doing the interview, we recheck the sample size for the study The minimum size was determined based on the data analysis technique Factor analysis and multi regression method were used for this research In factor analysis, sample size is usually determined based on the minimum sample size and the number of items are taken into analysis Hair, Black, Babin, Anderson, and Tatham (2006) suggested that to use factor analysis, the sample data must larger than 50, and the ratio of observations/items larger than 5:1 There are 25 items in this research, so the minimum size is 25 * 5= 125

According to Tabachnick and Fidell (2001), the minimum sample size for multiple regression is calculated as: n > 50 + 8*k, with n is the minimum sample size, and k is the number of independent variables This research had 5 independent variables, so the

3.6 Data analysis method

The study used quantitative data analysis method because the data collected was quantitative data and the goal of the study was to examine the relationship between service convenience dimensions and customer satisfaction

The data analysis began first with the descriptive statistic to summarize the data collected in table based on demographic characteristics, their means and central tendency for better understanding and examining

Then, inferential statistics was used to generalize make prediction from the result of the data To ensure the reliability and validity of the scales and constructs, Cronbach’s anpha and Exploratory Factor Analysis were used Joseph & Rosemary (2003) introduced Cronbach’s anpha as:

Cronbach’s alpha is a test reliability technique that requires only a single test administration to provide a unique estimate of the reliability for a given test Cronbach’s alpha is the average value of the reliability coefficients one would obtained for all possible combinations of items when split into two half-tests (p 84) The higher the Cronbach’s anpha is, the higher the internal reliability of variables is Factor Analysis was used for checking unidimensionality and dimensionality of the items and constructs That is a method to ensure that all items relate to the constructs that the research intends to measure And the factor loading for each item was examined to

“identify latent constructs underlying a set of manifest variables” (Norris & Lecavalier (2010), p.9)

The next step of the study involved model estimation using multiple regression The effects of service convenience dimensions on customer satisfaction were measured through the value of adjusted R square, standardized coefficients, and other indicators

Statistical Package for Social Sciences (SPSS) program was used for calculating the statistic result

Summary Scales for measuring service convenience constructs and customer satisfaction were used from previous researches, with some modified in banking sector After that, the questionnaires were sent to 250 banks’ customers in Ho Chi Minh cities for survey Then, collected data was analyzed using quantitative data analysis method

CHAPTER 4 DATA ANALYSIS AND RESULTS The aim of this section is to present the analysis for this study from the gathered data Both descriptive and inferential statistics were used for analyzing to examine the hypotheses proposing in the chapter 2

4.1 Descriptive analysis

4.1.1 Respondents’ demographics

250 people were interviewed, and 201 questionnaires (80.4%) were useable for analyzing The respondents’ characteristics were showed in the table bellowed

Table 4.1 Respondents’ characteristics

Specific banks that respondents chose to mention about were both state-owned banks and private-sector banks, and the percentages of them were approximately equal 51.7% people said about state-owned banks, while 48.3% people said about private-sector banks

Among respondents said about transaction frequently with the bank they mentioned, 77.1% people had below 10 transactions a month, 19.4% had from 10 to 20 transactions a month, while the rest 3.5% had more than 30 transactions a month Most of them have used these banks service for a long time, with 43.8% sample have used service for more than 3 years, 39.8% sample have used service for 1 to 3 years and, the rest 16.4% sample have used service under 1 year

4.1.2 Descriptive statistics

Descriptive statistic which evaluates and presents the questionnaire variables of the

Table 4.2 Item descriptive statistics

Decision1 1/ It took minimal time to get the information

needed to choose this bank

Decision2 2/ Making up my mind about what I wanted to use

was easy

Decision3 3/ The information I received from this bank made it

easy for me to choose what to use

Decision4 4/ The information that I received from this bank

was very clear and easy to read

Decision5 5/ This bank let me know the exact cost or special

offers before I bought the service

Access3 8/ I was able to get to this bank's location quickly 3.73 899 Access4 9/ This bank was available when I needed to talk to

them

Access5 10/ This bank is accessible through various ways

(online, telephone, and in person)

Access6 11/ The hours of operation of this bank were

convenient

Transaction1 12/ I did not have to make much of an effort to pay

for the service

Benefit3 18/ The time required to receive the benefits of

the service was appropriate

Benefit4 19/ This bank solved my needs without creating

other problems

Postben2 21/ It took little effort to arrange follow-up service 3.49 867 Postben3 22/ This bank made it easy for me to resolve my

problem

Satisfaction1 23/ Considering everything, I am extremely satisfied

with this bank

Satisfaction3 25/ The overall quality of the services provided by

this bank is excellent

The table above provided an overview of all respondents’ answer measured by central tendency and dispersion A five points scale was used to measure the respond with 1 was “strongly disagree” and 5 was “strongly agree” The result show that respondents tended to perceive on the positive side of scale with all means were higher than 3.00 The range of means is from 3.43 to 3.81 The standard deviations were lower than 1.00, indicating a small degree of dispersion So, the research data had a high central tendency 4.2 Reliability analysis

For checking internal reliability of the scales, the Cronbach’s anpha was used as planned in the method Cronbach’s anpha coefficient varies from o to 1 with 1 indicating perfect reliability, and 0 indicating no internal reliability Among them, Cronbach’s anpha more than 0.9 means excellent reliability, greater 0.8 means good, greater than 0.7 means acceptable, greater than 0.6 means questionable, greater than 0.5 means poor, and less than 0.5 means unacceptable (George & Mallery, 2003)

Table 4.3 Internal reliability for each construct

4.3 Testing unidimensionality

To investigate the unidimensionality of the scale, we used the factor analysis This method explores relationships between variables to confirm underlying dimensions The construct is unidimensional if the eigenvalues represent the amount of variance in all items that can be explained by a given factor The percentage of total variance explained by the first principle component is often regarded as an index of unidimensionality The higher percentage of total variance the first principle component accounts for, the closer the test is

to unidimensionality (Deng, Wells, & Hambleton, 2008)

Run the factor analysis for each construct, we saw that all eigenvalues for the first factor was quite a bit larger than the next factors And just the first factor for each construct had the initial eigenvalues more than 1 Additionally, the first factors accounted for more than half of the total variance This implied that all the constructs were undimensional 4.4 Measurement model test

The test of the measurement model included the estimation of convergent and discriminant validity of the instrument items

First, the convergent validity was evaluated by the size of the loadings of the measures on their corresponding constructs

Hair, Tatham, Anderson, & Black, 1998 recommended that a factor loading of at least 0.3 was the lowest acceptable loading for an item All constructs were divided into two groups: dependent and independent variables Run the factor analysis for each group, using the Principal axis factoring and Promax rotation method Delete a bad item which had cross-loadings and low factor loading, then rerun the factor analysis until all items had acceptable factor loadings and no cross-loading between these items

Factor analysis for independent variables

After 6 times running for independent variables, 5 items were removed They were access3, access6, benefit3, benefit4, and decision1 The remaining 17 items were grouped into 4 factors The attributed of each factor loadings were presented in table 4.4

Table 4.4 Factor loading for independent variables

Component Transaction + Benefit Post-benefit Access Decision

There were four factors formed after EFA steps: decision (4 items), access (4 items), post-benefit (3 items), and transaction – benefit (6 items) All remaining items had the factor loading in their constructs from 0.349 to 0.927 The cumulative extraction sum of squared loadings was 65.350%, it meant four factors above together accounted for 65.350% of the common variance The Kaiser-Meyer-Olkin (KMO) value was 0.914, greater than 0.5 And the Barlett’s test showed the significance with p value < 0.001 These indicated that a factor analysis could be useful for the data

Examine the questions that were merged of transaction and benefit convenience These questions were:

Transaction convenience:

1 I did not have to make much of an effort to pay for the service

2 They made it easy for me to conclude my purchase

3 I was able to complete my purchase quickly

4 There were no problems to deal with during the purchase that added to the purchase time

Benefit convenience:

1 A bank solved my needs without creating other problems

2 I was able to get the benefits of the service with minimal effort

These questions all mention about time and effort that customer have to bear during the transaction step until receive the core benefit of the service With banking service, this period is so short and close Hence, these questions were grouped into a same group

Rerun the Cronbach’s anpha for four new constructs, we had the result of Cronbach’s anpha as follow: decision (0.805), access (0.786), post-benefit (0.827), transaction – benefit (0.877) All new constructs had the Cronbach’s anpha above 0.8 except access convenience,

it implied a good internal reliability Access convenience did not have a good Cronbach’s anpha, however it still could be used for the next analysis

Factor analysis for dependent variables

For dependent variables, all 3 items loaded to one factor with the factor loading more than 0.8 The KMO value was 0.728 and the Barlett’s test also showed the significance with

p value < 0.001 That meant all 3 items of satisfaction would be keep for the next analysis

Table 4.5 Factor loading for dependent variable

Table 4.6 Factor correlation matrix

All correlations are significant at the 0.01 level (2-tailed)

All correlations were above 0.4, indicating the existing of association between these constructs At the same time, the largest correlation was 0.669, and lower than 0.7 That indicated that all five factors could be clearly distinguished from each other

To sum up, after the measurement model test, five constructs for independent variables at the beginning have been grouped into four constructs, with the merge of transaction and benefit Rename this new construct was performance convenience We had four independent variables: decision, access, performance, post benefit convenience that affect to customer satisfaction The research hypotheses have changed to:

H1: Decision convenience will result in customer satisfaction

H2: Access convenience will result in customer satisfaction

H3: Performance convenience will result in customer satisfaction

H4: Post - benefit convenience will result in customer satisfaction

The revised research model was presented in figure 4.1

4.5 The table showed a positive relationship between customer satisfaction and other variables All of these relationships were significant with p<0.001 Preliminary, these independent variables could be taken into the model to explain for customer satisfaction

Run regression analysis with customer satisfaction was dependent variable; decision convenience, access convenience, and performance convenience, and post-benefit convenience were independent variables, using ENTER method because the research’s hypothesis was that all elements of service convenience had a positive impact on customer satisfaction Table 4.6 showed the summary of the multiple regression analysis conducted

Table 4.7 Model Summary

R R Square Adjusted R Square Std Error of the Estimate

Both R Square and Adjusted R Square are used for showing the variance of dependent variable that is explained by the model However, Adjusted R Square is a better measurement than R Square because R Square always increases whenever more independent variables are adding to the model Meanwhile, Adjusted R Square can go up and down depending on whether the addition of another variable adds or does not add to the explanatory power of the model

For this model, Adjusted R Square value was 0.596 It meant elements of service convenience could explain 59.6% variance in customer satisfaction

Table 4.7 shows the ANOVA which evaluated the statistical significance of the model F calculated from the value of R square of the model had a small value of sig., so the research model was appropriate and could be used