Service reliability the key to improve customer satisfaction at HEAT phat tien 5

The organizational chart of Phat Tien Company Limited Figure 3: Customer dissatisfaction proportion of sales and service of Phat Tien from April 2019 to September 2019 Figure 4: Average

International School of Business

AT HEAD PHAT TIEN 5

MASTER OF BUSINESS ADMINISTRATION

Ho Chi Minh City – 2020

International School of Business

AT HEAD PHAT TIEN 5

MASTER OF BUSINESS ADMINISTRATION

SUPERVISOR: DR NGUYEN PHONG NGUYEN

Ho Chi Minh City – 2020

TABLE OF CONTENTS

LIST OF FIGURES 3

LIST OF TABLES 3

LIST OF ABBREVIATIONS 3

EXECUTIVE SUMMARY 4

PART 1 PROBLEM IDENTIFICATION 5

1.1 PROBLEM CONTEXT 5

1.1.1 Overview of the motorcycle market 5

1.1.2 Overview of Phat Tien Trading and Service Company Limited 5

1.1.3 Overview of HEAD Phat Tien 5 7

1.2 SYMPTOMS 8

1.3 POSSIBLE PROBLEMS 10

1.3.1 Unreliable service of repair and maintenance 10

1.3.2 Limited infrastructures and facilities 12

1.3.3 Uncompetitive prices 13

1.3.4 Insufficient support from employees 13

1.4 MAIN PROBLEM VALIDATION 14

1.4.1 Problem definition 14

1.4.2 Problem existence 15

1.4.3 Problem importance 18

1.4.3.1 Risk of financial result decrease 18

1.4.3.2 Negative WOM affecting the reputation 18

1.4.3.3 Decreased ranking in the annual assessment of Honda Vietnam 19

1.5 POTENTIAL CAUSES 20

1.5.1 Limited infrastructures and facilities 20

1.5.2 Limited capability of some technicians 20

1.5.3 Lack of management and control 21

1.5.4 Not strictly following the company’s procedure 21

PART 2 CAUSE VALIDATION AND SOLUTIONS 23

2.1 CAUSE VALIDATION 23

2.2 ALTERNATIVE SOLUTIONS 25

2.2.1 The first alternative solution: Conducting a “Quality First” campaign 25

2.2.2 The second alternative solution: Internal training and annual technical competition 27

2.3 SOLUTION SELECTION 30

2.4 ACTION PLAN IN ORGANIZATION 30

2.5 CONCLUSION 35

PART 3 SUPPORTING INFORMATION 36

3.1 INTERVIEW GUIDE 36

3.2 QUALITATIVE RESEARCH 37

3.3 QUALITATIVE RESEARCH FINDINGS 45

REFERENCES 50

LIST OF FIGURES

Figure 1 Motorcycle sales in Vietnam of the five largest brands from 2011 to 2018

Figure 2 The organizational chart of Phat Tien Company Limited

Figure 3: Customer dissatisfaction proportion of sales and service of Phat Tien from April 2019

to September 2019

Figure 4: Average service customer percentage of HEAD Phat Tien stores from April to September 2019

Figure 5: Customer satisfaction rate about Service of Phat Tien 5 and the company

Figure 6: Reasons for dissatisfaction about service at HEAD Phat Tien 5

Figure 7: The updated cause-effect map with consequences

Figure 8: Process of repair and maintenance service

Figure 9: The final cause-effect map

LIST OF TABLES

Table 1 Human resources of HEAD Phat Tien 5

Table 2 General interview framework

Table 3 Detailed interview questions

Table 4: Action plan

LIST OF ABBREVIATIONS

HEAD Honda Exclusive Authorized Dealer

HAUS Honda Approved Used Motorcycle Shop

VAMM Vietnam Association of Motorcycle Manufacturers

VNR500 Vietnam Report’s Top 500 Largest Enterprises

CSI Customer Satisfaction Index

KPI Key Performance Indicator

CRM Customer Relationship Management

PIC Person In Charge

TQM Total Quality Management

Service Reliability - the Key to Improve Customer Satisfaction at HEAD Phat Tien 5

EXECUTIVE SUMMARY

Vietnam ranks in the top list of the world about the number of people using motorbikes for daily transportation (1) The motorbike market in Vietnam is still on the growth trend despite the forecasts that it had reached a saturation point in the previous years Infrastructure limitations and high taxes are the main constraints for customers to purchase cars Hence, there

is still a demand for a motorcycle type of transportation Currently, the Vietnam motorcycle market is led by five leading manufacturers, including Honda, Yamaha, Suzuki, SYM, and Piaggio, primarily the new local electric motorcycle manufacturer of Vinfast, which makes the market much more competitive (1)

Though, according to the recording of the Customer Service department, customers using the service division of Phat Tien 5 still feedback many complaints, which takes the highest portion of 17 percent of customers interviewed in after-sale service surveys, compared

to 15 percent of the total six HEADs Still, two percentage is not a small difference because it equals up to 80 more complaints per month than the average quantity of each HEAD, considerably the dissatisfaction ratio of Phat Tien 5 increased continuously by up to 4 percent

in the recent months from July to September (Figure 4) This is the fundamental reason for the author to do more research to discover deeper the real problem and possible causes, then suggest suitable and feasible solutions to solve this problem and efficiently enhance the competitiveness of HEAD Phat Tien 5 The author uses several qualitative methods to implement this report namely in-depth interviews with heads of customer service department (Mrs Ngoc), service department (Mr Minh), HEAD’s service division (Mr Viet); several customers and data exploration from reliable internal sources; and reference from theory literature of prestigious academic journals

PART 1 PROBLEM IDENTIFICATION 1.1 PROBLEM CONTEXT

1.1.1 Overview of the motorcycle market

According to records of (3) Motorcycles Data (3), an organization that tracks motorcycle sales worldwide, Vietnam preserves its position as the fourth largest motorcycle market in the world in 2018 Vietnam is ranked behind India, China, and Indonesia in terms of motorbike sales (2) The domestic market reached an eight-year high in sales of approximately 3.38 million bikes, including both local and imported vehicles (3) Vietnam market is dominated by five leading motorcycle producers, notably Honda, Yamaha, Suzuki, SYM, and Piaggio, which take more than 97 percent of the total market Honda is the market leader in Vietnam, which accounts for 75.9 percent of the market share in 2018 and increase to 78.6 percent of market share in 2019, up nearly 3 percent Sales rose to 3.39 million new motorbikes

sold in Vietnam for the fourth year in the row last year (1), (3)

Figure 1 Motorcycle sales in Vietnam of the five largest brands from 2011 to 2018

Source: Vietnam Association of Motorcycle Manufacturers (VAMM)

1.1.2 Overview of Phat Tien Trading and Service Company Limited

Phat Tien Trading and Service Company Limited (Phat Tien) is a retail company established on January 10th, 1998, which trades and offers services of Honda motorcycles, sportbikes, and automobiles in Ho Chi Minh City, Long An province and Dong Nai province Currently, besides the headquarter in District 11, the company owns six Honda Exclusive Authorized Dealer (HEAD) stores, two Wing Service stores, the first Sport Bike showroom in Vietnam, and three Honda Automobile Dealer showrooms, with a staff of more than 900

people, and serves more than one million customers in Ho Chi Minh City and neighboring provinces (4), (5)

Each HEAD has the function of genuine Honda motorcycle business, providing genuine parts, proper maintenance and repair services, and safe driving instructions Over 20 years of operation, Phat Tien is considered as one of the leading motorcycle enterprises in Ho Chi Minh city and neighbor areas (4) Moreover, with the need to experience a variety of vehicles of customers, Phat Tien maintains its pioneer position by establishing the first genuine Honda Sport Bike Showroom in Vietnam that provides the latest Honda Sport Bike models with professional maintenance service and genuine spare parts In addition to the breakthrough development of the system of motorbike stores, Phat Tien is gradually asserting its position in the Automobile Industry with three Honda Dealers following 5S standards of Honda Vietnam including Honda Auto Bien Hoa, Honda Auto Long An, and Honda Auto Saigon - District 2 with the function of providing the latest models of Honda cars and professional maintenance service, genuine parts and especially safe driving activities to every customer

By the end of 2019, Phat Tien is the only company nationwide to have an official retail distribution network of Honda's finished products from motorcycle to sportbike and car Phat Tien is honored by Honda Vietnam in many awards and continuously ranks among the leading HEAD systems of Honda Vietnam Especially, Phat Tien is honored to be in the Top 500 Largest Private Enterprises in Vietnam (VNR500) in the past 11 years (5) The company also pays great attention to community social activities via Tri Duc Charity Fund

Figure 2 The organizational chart of Phat Tien Company Limited

1.1.3 Overview of HEAD Phat Tien 5

HEAD Phat Tien 5 was established in 2008 This store is located at 406A Le Trong Tan street, Tay Thanh ward, which is a very crowded area of Tan Phu district to the western region

of Ho Chi Minh city Its opening ceremony marked a milestone in Phat Tien company's year operating HEAD Phat Tien 5 store has taken a significant portion of sales and service customer quantities of the company for many years up to now, with the complete human

ten-resources of 57 people with details as the following table

Table 1 Human resources of HEAD Phat Tien 5

A Sales Division

2 Head of Sales Division One person

5 Registration employee (Sales) One person

B Service Division

7 Head of Service Division One person

9 Vice-Lead of Technician Two people

11 The lead of Spare Parts One person

12 Employees of Spare Parts Three people

13 Registration employee (Service) One person

C Office & Support Division

Source: Human Resource Department

1.2 SYMPTOMS

To justify the existence of somethings abnormal in the company, the thesis author has researched secondary data from the company’s internal reports of the customer service department as well as the service department to identify the symptom for further exploration

Among over 700 Honda dealers nationwide, Phat Tien is the leading one obtaining the significant market share in Vietnam and the highest in Ho Chi Minh city In the period in which the market expands less rapidly, Honda Vietnam takes strategic actions to focus on the customer satisfaction index (CSI) as their major factor in maintaining and develop customers from many competitors Following the Honda Vietnam approach, Phat Tien also considers customer satisfaction as their top priority While sales are the activities to generate short-term revenue for the time of customer's purchase only, service can create revenue and profits more sustainably for the longer term Therefore, customer satisfaction about service quality should

be the critical and strategic division for particular and severe concerns and investments from the company

However, the statistical data about customer dissatisfaction proportion of sales and service of Phat Tien from April 2019 to September 2019 consolidated by Customer Service department illustrates that dissatisfaction about service takes a significant portion up to 66 percent, as shown in Figure3 Additionally, HEAD Phat Tien 5 welcomes the highest quantity

of service customers compared to other stores of the entire company up to 22 percent, as illustrated in Figure 4

Figure 3: Customer dissatisfaction proportion of sales and service

of Phat Tien from April 2019 to September 2019

Figure 4: Average service customer percentage of HEAD Phat Tien stores

from April to September 2019

Source: Service Department Furthermore, according to the statistics data of Customer Service Department in the period of six months from April to September of 2020 as illustrated in Figure 5, we can recognize that the ratio of dissatisfied customers of Phat Tien 5 is 20 percent, which is higher

by about five percent than the average of the whole HEAD system of 15 percent

Figure 5: Customer satisfaction rate about Service of Phat Tien 5 and the company

Source: Customer Service Department The above data analysis shows that dissatisfied customer about service of HEAD Phat Tien 5 is not only high in percentage but also significant in quantity, which strongly encourages the company pays more attention to decrease customer complaint quantity and improve the customer satisfaction of the Service segment rather than the Sales segment of HEAD Phat Tien

5 Besides, the quantity of dissatisfied customers about the service of HEAD Phat Tien 5 is the

Service Customer's Satisfaction

of HEAD Phat Tien 5

Satisfied Dissatisfied

86% 86% 84% 87% 81% 83% 85% 14% 14% 16% 13% 19% 17% 15%

highest in the whole company, so the customer’s complaints about the service performance of Phat Tien 5 will affect the most significant on the whole company’s service performance

In conclusion, a low customer satisfaction rate about service of HEAD Phat Tien 5 is a noticeable symptom that requires much more attention and substantial investment to improve the current situation from the management board of the company The current motorcycle market becomes more and more competitive while the customers also demand and require a much higher level of not only product quality but also the service's quality offering from a retail store Therefore, it is the critical importance for Phat Tien 5 to figure out what are the real problems and their causes to find proper and feasible solutions to achieve the highest customer

satisfaction ratio of which they are capable

1.3 POSSIBLE PROBLEMS

Based on the above symptom analysis, the author implemented some in-depth interviews with the company’s managers of the related departments, the store’s senior and junior technicians, and several service customers selected randomly at HEAD Phat Tien 5 to discover reasons of the symptom from various perspectives as well as propose possible solutions for further steps

1.3.1 Unreliable service of repair and maintenance

Cristobal, Flavian, and Guinaliu (21) finalized that “Higher service quality generates higher customer satisfaction, and service quality and customer satisfaction determine customer loyalty” Reichheld and Sasser (22) explored that “not only that loyal customers are likely to buy additional services spread positive word-of-mouth, and pay higher prices, but they can also improve the service efficiency due to the experience curve effect” Furthermore, Oliver, Rust, and Varki (23) argued that “Customers' expectations are based on beliefs about performance from prior experience and communications about the product or service that imply a certain level of quality When perceived performance falls short of customers' expectations, dissatisfaction results, and when perceived performance exceeds customers' expectations, delight results”

Mrs Ngoc – Manager of the customer service department, stated that:

“Every day, our department receives much feedback from customers via our survey activity According to the survey result, customers often complain about the quality

of repair and maintenance most, which takes about 60 percent of total service complaints, for example, there are some cases when customers came back home, and the motorcycles have broken again, and some other cases when a problem was prepared then another part of the motorcycle became damaged; hence the

customers thought that the technicians did not prepare or maintenance their motorcycles well Time of repair and maintenance is quite long, especially in peak time on the weekends”

Similarly, Mr Minh – Manager of the service department agreed:

“As far as I am concerned, customers often complain about the quality of repair and maintenance, some customers said that the technicians did not ask the symptom

of their motorcycle carefully.” and, “I think the most important problem is the quality of repair and maintenance because many customers complain about this problem, occasionally some cases are quite serious which requires us to solve more carefully.”

Both senior and junior technicians of HEAD Phat Tien 5 – Mr Dung and Mr Quoc, had similar comments Mr Dung – a senior technician, told that:

“The most popular feedbacks from the customer come from the quality of repair and maintenance, which means I do not completely solve the motorcycle’s defect,

or one defect is solved, then another defect arises I think this is the most important problem because quality is the top priority of the company Besides, some customers feel annoying about waiting for a long time”

Besides, Mr Quoc – a junior technician also added:

“Normally, the customers complain about the quality of the repair They asked me why their motorcycle had been repaired but remained the symptoms In some cases, the inside parts need some time to match and run smoothly In these situations, I explained to the customers, but maybe my explanation was not clear, so the customers still complained I think the quality of repair is the most important problem because it affects the store’s prestige to customers

Besides, some customers complain about the long waiting time As you can see, most customers come on the weekends, so there are lots of tasks Sometimes time

to repair for the previous customer becomes extended due to additional defects identified during the task, so after the customer will generally wait for a longer time.”

“I think this is the most important problem because quality is the top priority of the company.”

Mr Tuan – a service customer of HEAD Phat Tien 5 also had the same statement:

“I think the quality of the repair is OK Once after repairing, the symptom remained despite I had carefully checked before going home On the next day, I went to the store to check again Then they double-checked and solved the defect completely.”

“Most of the times are about 30 minutes Sometimes longer for about 1 hour I think the time is quite long, but it’s fine because there are many customers and I wait in the room with an air conditioner.”

Mrs Lien – another service customer of HEAD Phat Tien 5 added:

“I think the quality is good Mostly I change lubricant and repair some small parts because my motorcycle is rarely broken.”

1.3.2 Limited infrastructures and facilities

Bowers and Swan (24) confirmed that “tangible elements (physical settings, ambiance, layout, facilities, infrastructure) of the healthcare service encounter play a major role in judging the overall service quality” Besides, Thai (25) stated that investment in good physical infrastructure could greatly enhance customer satisfaction from the provision of excellent outcomes of the service

Mrs Ngoc – Manager of the customer service department, commented that:

“Taking the smallest proportion is what the infrastructure, for example, the service waiting room is not spacious and comfortable, and some issues with the air conditioner, coffee maker machine, hygiene of waiting room or restrooms.”

“Regarding limited service facilities and area, I think because the store develops so fast that the investment may not have adapted to fulfill the demand.”

Mr Minh – Manager of the service department also confirmed that “a few customers complain about the facilities and infrastructures of the store.”

Mr Dung – a senior technician, added that:

“Quantity of motorcycle lift is limited compared to the number of customers, especially on the weekends, which makes it harder to repair for all customers at the same time.”

Besides, Mrs Lien – a service customer shared that:

“The facilities are good The waiting room is clean and fresh, with an air conditioner The store offers some coffee However, I think the service area is not wide enough”

Mr Tuan – another customer also shared his opinion:

“The waiting room is not spacious However, there is an air conditioner and some drinks to serve in the meantime And I can observe the repair process through the glass wall of the waiting room, so it’s very convenient for me.”

1.3.3 Uncompetitive prices

Phusavat and Kanchana (14) pointed six criteria, including quality, costs, delivery, flexibility, customer-focus, and know-how, have an impact on customer satisfaction in service providers in "automotive technical repairs, retails, and transportation and handling businesses” Besides, Roth S and Bösener (26) figured out that satisfied customers are willing to pay more than the actual price, and vice versa

Mrs Ngoc – manager of the customer service department, shared that “price of spare parts and fees of repair and maintenance is fairly high”

Mr Minh – manager of the service department, also agreed that “several customers said that the fee of repair and maintenance and cost of spare parts is rather high.”

Mr Tuan – a service customer, opened up about his thinking that “The prices are a little higher than small repair workshops, but I think it’s reasonable.”

1.3.4 Insufficient support from employees

Miguel, Edward, and Dick (27), and Gordon and Terrence (28) also agree that the friendliness of employees, the speed and accuracy of service, and the cleanliness of the infrastructure are the attributes affecting customer satisfaction Moreover, Bagdare and Jain (29) recommended that the ability of the retailer to create unique and pleasurable events gives the retail store a distinctive image for identification and recognition

Mr Minh – manager of the service department, stated that “some customers complain the technicians do not support them enthusiastically.”

Mrs Ngoc – manager of the customer service department, shared her opinion that “the technician’s attitude with customers is not good For example, the staff was not friendly or enthusiastic.”

Mr Dung – a senior technician, shared a case study:

“In some cases, the inside parts need some time to match and run smoothly In these situations, I explained to the customers, but maybe my explanation was not clear,

so the customers still complained.”

In summary, according to results of in-depth interviews with the company’s managers and customers, secondary data as well as research of literature, the author identified four possible problems including unreliable service of repair and maintenance, limited infrastructures and facilities, uncompetitive prices, and insufficient support from employees

These problems not only affect the symptom of low customer satisfaction but also affect each other, e.g infrastructures and facilities (insufficient motorcycle lift quantity) may affect service reliability Due to limited resources, the author focused on one main problem to proceed with further exploration, which is discussed in the next section

1.4 MAIN PROBLEM VALIDATION

According to the analysis of in-depth interviews and related literature, the author can finalize four causes affecting customer satisfaction, including unreliable service of repair and maintenance, limited infrastructures and facilities, uncompetitive prices, and insufficient support from employees

Take a deeper consideration based on the secondary data in the reports of the customer service department, unreliable service of repair and maintenance receives the highest percentage of complaints from service customers Besides, as of the interviewee’s opinions,

“quality of service is one of the criteria in the annual assessment of Honda Vietnam, so we have to take a serious concern and priority” said Mr Minh – manager of the service department, and “quality is the top priority of the company” said Mr Dung – senior technician of HEAD Phat Tien 5 Therefore, the author made a firm decision to discover further the issue of

“unreliable service of repair and maintenance” as the central problem of the thesis

“service quality as an overall judgment about the level of a service provider's performance” Gronroos (20) defined service quality “to be the outcome of consumer expectations of service and the actual service perceived by them” Nadiri and Hussain (9) concluded that service quality “increases customer satisfaction, stimulates intention to return, and inspires recommendations”

Moreover, Parasuraman et al (6), (7) developed the SERVQUAL model to measure service quality via five dimensions including tangibility which is physical facilities, equipment, and personnel’s appearance, reliability which is the ability to dependably and accurately

perform the promised service, responsiveness which is the willingness to support customers and provide prompt services, assurance which is the courtesy and knowledge of employees and the ability to inspire confidence and trust, and empathy which is individualized attention and care to provide to customers

Service Reliability

Parasuraman et al (6) firstly introduced the term “Reliability” in the 22-item instrument SERVQUAL model, which defined service reliability as the “consistency of performance and dependability” It means that the company performs the service correctly for the first time and also means that the company honors its promises, especially involving the accuracy in billing, keeping records precisely, or performing the services within the designated time

Xifei and Jin (38) also agreed that service reliability requires companies to “perform accurately and timely and avoid mistakes at their best” Companies must enhance service reliability because any service reliability issues can lead to bad customer feedback, namely negative word-to-mouth and even loss of customers

Moreover, Dabholkar, Dayle, and Joseph (39) stated that the “service reliability construct consists of mainly two dimensions that are titled as inspiring "promises" and "doing

it right" The most important reason for the concentration of this construct is intangible services, which usually require greater service reliability between customers and service providers Therefore, service reliability has a greater impact on services than on goods”

Customer satisfaction

Yoo and Park (19) stated that satisfaction is “associated with the consumer response to

a retailer’s offering and the difference between a product’s actual and expected performance” Zeithaml, Parasuraman, and Berry (10) suggested that “customer satisfaction is the outcome of the customer’s perception of the value received in a transaction or relationships, where value equals perceived service quality, compared to the value expected from transactions or relationships with competing vendors”

Orel and Kara (17) describe customer satisfaction as “the desired outcome of service encounters that involves an evaluation of whether the service has met the customer's needs and expectations” Besides, Krystallis and Chrysochou (18) also regarded customer satisfaction as

“a consequence of the customer's post-purchase evaluations of both tangible and intangible brand attributes and a key determinant of customer loyalty”

1.4.2 Problem existence

According to the symptom of high ratio of customer's dissatisfaction about service quality in Phat Tien 5, based on in-depth interviews with several managers and customers, data

from the report of the customer service department, as well as the literature, the author consume that five potential problems may be the real reasons of the symptom

The result of customer service department's survey in last six months illustrates that quality of repair and maintenance takes the highest ratio of 66 percent, the second one is the time of repair and maintenance of 10 percent, the third one is the attitude of the technicians and service division's employees of 9 percent, the fourth one is about the infrastructure of 5 percent,

and the last one is price issues of about 4 percent

Figure 6: Reasons for dissatisfaction about service at HEAD Phat Tien 5

Source: Customer Service Department Based on the secondary data, the author developed an interview guild with an objective

to have an in-depth exploration and understand the reasons that HEAD Phat Tien 5 has a low customer satisfaction rate in recent years and propose solutions to solve it The duration of the interview is from 10 to 20 minutes for each interviewee The interview’s framework and detailed questions for each targeted interviewee are listed as follows

Table 2 General interview framework

1 Overall background To understand the current business

situation of service activities at HEAD Phat Tien 5

2-3 minutes

2 Explore the causes

of low customer

satisfaction rate and

To explore the main reason for low customer satisfaction rate

Figure 8: Reasons of dissatisfaction about service

at HEAD Phat Tien 5

Quality Employee's attitude Price Time Infrastructure Others

No Key sessions Objectives Time

identify the main

reason

3 Solutions To propose suitable solutions 5-10 minutes

Table 3 Detailed interview questions

Interviewees:

✓ Managers of the related departments and HEAD Phat Tien 5s

✓ Senior and junior technicians

1 Could you please introduction about yourself? (name, age, working experience)

2 According to your experience, what are the customer’s feedback about the service at HEAD Phat Tien 5? What is the most critical feedback, and why?

3 From your point of view, what are the reasons for the problems? What is the most critical reason, and why?

4 Could you advise any suggestion to solve this problem according to your opinion?

5 From the above solutions, what is the most suitable solution, and why?

Interviewees: Customers of service division of HEAD Phat Tien 5

1 Could you please introduce yourself? (name, address)

2 Do you usually use service for your motorcycle at HEAD Phat Tien 5?

3 Are you satisfied with the service of HEAD Phat Tien 5? What is the biggest point you are not satisfied with?

According to the interview, Mrs Ngoc – manager of the customer service department, shared an overview of the customer survey her team collected:

“Every day, our department receives much feedback from customers via our survey activity According to the survey result, customers often complain about the quality

of repair and maintenance most, which takes about 60 percent of total service complaints, for example, there were some cases when customers came back home, and the motorcycles have broken again Some other situations when a problem was prepared, then another part of the motorcycle became damaged Hence the customers thought that the technicians did not prepare or maintenance their motorcycles well

Secondly, the technician’s attitude with customers is not right; for example, the staff was not friendly or enthusiastic

Thirdly, the time of repair and maintenance is quite long, especially during peak time on the weekends

Fourthly, the price of spare parts and fees of repair and maintenance is fairly high Lastly, taking the smallest proportion is what the infrastructure, for example, the service waiting room is not spacious and comfortable, and some issues with the air conditioner, coffee maker machine, hygiene of waiting room, or restrooms.”

1.4.3 Problem importance

1.4.3.1 Risk of financial result decrease

Dominici and Guzzo (12) stated that “enterprises which can rapidly understand and to satisfy customers’ needs, make greater profits than those which fail to understand and satisfy them” Sirdeshmukh and Singh (13) also reported that “customer satisfaction has a close relationship to brand loyalty as well as service quality”

Similarly, Zeithaml et al (11) also proved that customers are willing to spend more and pay a price premium for the company with higher service quality Anderson et al (15), (18) confirmed that by increasing service quality and customers' intentions, the company could increase the volume, revenues while lowering costs of marketing and sales, so increase the profits As a result, James et al (17) stated that “customer loyalty is a more important determinant of profit,” in which profit increases from 25% to 85% when customer loyalty rises 5%

Yuen and Chan (16) also advised that “managers must concentrate on retaining existing customers by implementing effective strategies towards customer satisfaction and loyalty since the cost of attracting new customers is higher than the cost of retaining existing ones”

Mrs Lien – a service customer, expressed her intention that:

“If the waiting is improved, I will continue to use service here Otherwise, I may visit another HEAD where it is convenient for me because there are a lot of other HEAD stores near my area.”

1.4.3.2 Negative WOM affecting the reputation

The customer's complaints may also affect the reputation of HEAD Phat Tien 5 Zeithaml et al (11) and Anderson et al (15) concluded that customers could say negative things with others about the problems they encountered or the low service quality of the company Moreover, Zeithaml et al (11), Strenitzerová et al (19), and Rust Roland et al (20) added that

customers tend to remain loyal to the company and recommend the company with their family and friends

Mr Dung – a junior technician, shared his concern:

“I think the quality of repair is the most important problem because it affects the store’s prestige to customers.”

1.4.3.3 Decreased ranking in the annual assessment of Honda Vietnam

In the competitive market, Honda Vietnam takes strategic actions to focus on the customer satisfaction index as its major factor in maintaining and develop customers from many competitors From a strategic perspective, customer's complaints about service will reduce the annual assessment result of Honda Vietnam and reduce the overall ranking of Phat Tien 5 among many other HEAD stores nationwide

Mr Minh – manager of the service department, raised his concern as follow:

“As you know, the quality of service is one of the criteria in the annual assessment

of Honda Vietnam, so we have to take a serious concern and priority.”

Generally, all the above possible consequences of financial result decrease, negative WOM affecting reputation and decreased ranking in the annual assessment of Honda Vietnam are the heavy pressure to encourage the company pays more serious attention about the central problem of quality of repair and maintenance to have suitable solutions as well as improve the company’s competition This emphasized the importance to improve service reliability so that HEAD Phat Tien 5 can increase customer satisfaction about service The cause-effect map has updated the consequences below

Figure 7: The updated cause-effect map with consequences

Unreliable service of

repair and maintenance

Limited infrastructures and

facilities

Low customer satisfaction about Service

at HEAD Phat Tien 5 Uncompetitive prices

Insufficient support from

employees

Financial result decrease

Negative WOM affecting

reputation

Decreased ranking with Honda Vietnam

1.5 POTENTIAL CAUSES

1.5.1 Limited infrastructures and facilities

Osibanjo, Gberevbie, Adeniji, and Oludayo (34) concluded that infrastructure, regular electricity supply/availability of office equipment are the basis for enhanced organizational productivity Besides, Marsh (35) stated that “technology and the desire to enhance productivity drive equipment purchases Processes and effectiveness can be measured to assess increased productivity.”

Mrs Ngoc – manager of the customer service, stated:

“I think it is because of significant customer visits increase on the weekends while the limited-service facilities do not have enough capacity.”

“The store develops so fast that the investment may not have adapted to fulfill the demand.”

Mr Dung – a senior technician, also agreed and added that “The most critical reason,

in my opinion, is limited motorcycle lifts in peak time.”

1.5.2 Limited capability of some technicians

McKee, Simmers, and Licata (32) revealed that “individuals who have more confidence

in their abilities tend to exert more effort to perform particular behaviors, persist longer to overcome obstacles, and set more challenging goals than those who have less confidence in their abilities.” Additionally, Rabbanee, Burford, and Ramaseshan (33) finalized that “a high-quality performance of the frontline employees contributes to customer loyalty”

Mrs Ngoc – manager of the customer service department, expressed her ideas:

“In my opinion, in some cases, the technical skills of the technicians are not good enough, especially junior ones Besides, too many customers' visits at peak time on the weekends may put the high pressure on the technicians and increase the risk of defects in repair and maintenance I think the technical skills of the technician is the most critical reason because it would benefit the service quality more sustainably in the long term.”

Mr Minh – manager of the service department, told that:

“Junior technicians do not have enough good training from senior technicians as well as the Training department.” “Moreover, the productivity of the technicians is inadequate, so it takes more time to finish each task.”

Mr Dung – a senior technician, shared his thinking that:

“For the long waiting time, I think the reasons are insufficient knowledge and skills

of the technicians, especially the junior ones.”

1.5.3 Lack of management and control

Lee and Kusumah (36) concluded that “supervision and harmonious relationships between supervisors and subordinates consistently increase employee productivity; and thus, positively influences an organization In contrast, inadequate supervision will adversely affect

an organization and employees An effective supervisory relationship requires a capable supervisor that not only demonstrates technical expertise but also has the ability and responsibility to mentor subordinates” Moreover, Bogdanski and Setliff (37) stated that

“managers must be aware that some employees desire and need regular contact with other workers and do not flourish without it Such employees do not do well in the remote context Some employees require direct supervision to ensure quality and productivity Weak employees are likely to become weaker without the guidance of the energy that others in an office can bring to them”

Mr Minh – manager of the service department, shared his concern as follows:

“There are insufficient and unregular management and control from the service department and the store’s managers.”

The cause-effect map will be updated on the list of causes of the central problem as follows

1.5.4 Not strictly following the company’s procedure

Utin and Yosepha (30) concluded that “good discipline from employees will also show that the organization can maintain and maintain the loyalty and quality of its employees, from the discipline can also be known the performance value of its employees” Also, Razak, Sarpan, and Ramlan (31) addressed that “indirect influence turns out to be smaller compared to direct influence This indicates that more effective work discipline directly affects employee performance than through motivation.”

Mr Minh – manager of the service department, figured out that:

“The final check step in the service procedure is not implemented carefully and strictly.” “I think the most critical reason is the technicians do not strictly follow the company’s procedures, especially the final check step of the chief technician because this step ensures the quality of the repair and maintenance before returning the motorcycle to customers so that it can minimize the defect and complaint rates.”

Mr Dung – a senior technician, shared his opinion:

“For the quality of repair, I think it is because of missing check in the process, and sometimes unclear explanation to customers.”

Figure 8: Process of repair and maintenance service

Source: Service Department The process of repair and maintenance service is a multiple-step process, including 15 steps in total with specific details as follows:

Step 1: Customer visits the HEAD store with the demand for motorcycle repair and maintenance

Step 2: The Vice-Lead of Technician welcomes customers and asks them for the symptoms of the problems in their motorcycle and collects some more details about the motorcycle, e.g., distance already traveled as well as customer's name and mobile phone number into his note

Step 3: The Vice-Lead of Technician's hands over the customer's motorcycle and the symptom notes for a technician to check and inform back the motorcycle status

Step 4: The Vice-Lech of Technician offers a quotation to the customer for his/her acceptance before proceeding with the repair or maintenance If no, the customer will refuse the service If yes, follow the next steps

Step 5: Service cashier creates a Repair Sheet and Warehouse-Export Sheet (if any) onto the PTS system, which is an internal system to manage service activities

Step 6 and 7: The service cashier prints the Repair Sheet and Warehouse-Export Sheet (if any) from the PTS system, then transfer these sheets to a technician

Step 8: The technician exports the spare parts in the Warehouse-Export Sheet (if any) out of the Spare part warehouse

Step 9: The warehouse employee immediately inputs the data on the Warehouse-Export Sheet (if any) on to DMS system, which is an internal system to manage spare parts warehouse

Step 10, 11, and 12: The technician proceeds the repair and maintenance If any additional spare parts or service fees occur, the technician will offer a further quotation to the customer If no, the technician continues the remaining repair and maintenance process If yes, repeat from Step 5

Step 13: Final check by the Lead Technician This is an essential step to ensure the quality of repair and maintenance is under the standards of Honda Vietnam and Phat Tien If

no, return to repair and maintenance again If yes, proceed with the next steps

Step 14: Cashier collects money from the customers according to the quotation mutually agreed, then print and give the customer a receipt of payment

Step 15: The customer finishes the process with the receipt of payment

In conclusion, the author figured out four causes leading to the main problem unreliable service of repair and maintenance including limited infrastructures and facilities, the limited capability of some technicians, lack of management and control, and not strictly following the company’s procedure These causes are not only from technicians but also from the managers and the company itself, both subjectively and objectively The following section will validate which is the main cause, then suggest suitable solutions to the company

PART 2 CAUSE VALIDATION AND SOLUTIONS 2.1 CAUSE VALIDATION

According to in-depth interviews and related literature studies, the author identifies four possible causes leading to the central problem of unreliable service of repair and maintenance namely (1) limited infrastructures and facilities, (2) limited capability of technicians, (3) lack

of management and control from the company, and (4) the technicians do not strictly follow the company’s service procedure There is the question, which is the most critical cause among the possible causes

Firstly, infrastructures and facilities play a crucial role in all services’ performance Specifically, in motorcycle service, spacious service area equipped with enough motorcycle lifts and other repair and maintenance tools are fundamental and necessary factors to ensure the technicians’ proper handling and efficiency in their job However, these are just supporting tools The technicians are the primary force to transform these facilities and infrastructures into services for customers Only technicians can satisfy the customer’s demand for repair and maintenance, not the infrastructures or facilities Therefore, this is not the main cause of the central problem

Secondly, then the limited capability of the technicians may be the main cause Either Mrs Ngoc - manager of the customer service department, Mr Minh – manager of the service department, or Mr Dung – a senior technician who agree that the capability of the technicians has a vital effect on service quality All of them admit that some technicians are lack of professional knowledge and skills, especially the junior ones Nonetheless, this issue can be resolved if these technicians receive adequate supervisor, training, and support from senior technicians as well as the service manager Therefore, this is not the main cause of the central problem

Thirdly, then lack of management and control from the company may be the main reason leading to the central problem as Lee and Kusumah (36) emphasized that the importance

of supervision and harmonious relationships between supervisors and subordinates in employee’s productivity Regular showroom visits for checking the actual situation and specific inspection results with practical advice are some of the fundamental activities to boost

up the technicians’ performance

Still, outside factors can only be effective in the first period This cannot maintain durable performance in the long term but the technicians themselves Additionally, Utin and Yosepha (30) show the importance of discipline to maintain the employee’s performance Therefore, not strictly following the company’s procedure is the main cause of the central problem, and the company should manage and support the technicians to improve their experiences via their own mistakes gradually

All four possible causes of the central problem are updated in the following cause-effect

Negative WOM affecting reputation

Decreased ranking with Honda Vietnam

Unreliable service of repair and maintenance

2.2 ALTERNATIVE SOLUTIONS

Synthesizing all the analyses above, the author determined that the technicians do not strictly follow the company’s procedure is the main cause of the central problem Hence, this part will concentrate on offering solutions for this cause The following are several suggested alternative solutions to improve the service reliability at HEAD Phat Tien 5

2.2.1 The first alternative solution: Conducting a “Quality First” campaign

Mehra and Ranganathan (40) stated that “quality improvement must become a philosophy as well as a way of life One movement which stressed this viewpoint was total quality management (TQM) TQM is defined as an organization-wide philosophy requiring all employees at every level of an organization to focus his/her efforts to help improve each business activity of the organization.” Similarly, Pattanayak, Koilakuntla, and Punyatoya (41) defined that “TQM is considered as a systems approach to management that aims to enhance value to customers by designing and continually improving organizational processes and systems”

Pattanayak et al (41) added that “due to rising importance of quality consciousness, the concept of TQM is no longer restricted to the manufacturing sector, rather it is widely applied

to the service sector as well”, and eight dimensions of TQM including “leadership, benchmarking, information and analysis system, service culture, servicescape, technology-based banking service, customer focus, and human resource focus”

A sustainable way to make the technicians follow the company’s procedure is to persuade them spontaneously to obey the process, which means the company should make the technicians deeply understanding the critical importance of service reliability for the customer, the company’s business, and the technicians themselves

Mr Minh – Manager of the Service department suggested that:

“Our service department will improve the regulations about following the service procedures by several methods including setting up specific KPI for each technician, more regular check actual situation at the store, and tightening the cooperation with the customer service department and the store.”

As “numbers talk louder than words”, service department should co-operate with the customer service department to collect customers’ feedback to have necessary data for improved tracking, and with the software, department to support in terms of technical aspects

Mrs Ngoc – Manager of Customer Service department added that:

“The quality problem requires great efforts from both sides, the related departments, and the technicians The customer service department will focus on