Improve customer service quality the case of techcombank card service

63 3.2.1.3 Difficulties in quality management and assurance....65 3.2.2 “Barking dogs seldom bite” Inconsistency in retail sales activities....68 3.2.3 The training for the customer serv

Vietnam national university, HANOI

TABLE OF CONTENTS

ACKNOWLEDGEMENTS i

ABSTRACT ii

TÓM TẮT iv

TABLE OF CONTENTS vi

LIST OF TABLES ix

LIST OF FIGURES xi

INTRODUCTION 1

CHAPTER 1: LITERATURE REVIEW 3

1.1 Service marketing mix in banks 4

1.1.1 Service marketing mix 4

1.1.2 Service marketing mix in banks 6

1.2 Customer satisfaction 11

1.2.1 Definition 11

1.2.2 What determines customer satisfaction? 12

1.3 Service quality and GAP model 13

CHAPTER 2: TECHCOMBANK CASE STUDY 25

2.1 Status of Techcombank and introduction of its card service 25

2.1.1 Techcombank Personal cards and card services 25

2.1.1.1 Prospects of card in Vietnam market 25

2.1.1.2 The strategy to develop card 27

2.1.1.3 Some successes and ambituous plan of card development 27

2.1.2 Card issuing, using and payment Processes and activities 30

2.2 A review of Techcombank’s previous survey on card service: Customer satisfaction on card services 31

2.2.1 Survey objectives 31

2.2.2 Sizes and methods: 32

2.2.2.1 Attendees and effective zone: 32

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2.2.2.2 Investigation methods: 32

2.2.3 Results 34

2.2.3.1 Total samples and feedback percentages 34

2.2.3.2 The specific Results of Customer satisfaction on card services of Techcombank 35

2.3 Focus group and in depth-interview for updated status of customer service quality 41

2.3.1 Focus group 41

2.3.2 In depth-interview 45

CHAPTER 3: FINDINGS 48

3.1 Customer GAP analysis 48

3.2 Provider GAP analysis 52

3.2.1 Failure in Providing in line with the standards and the designed services 55 3.2.1.1 Failure to meet the technological requirements needed for the work 55

3.2.1.2 Failure in providing good consultancy to let the customers see which of their needs are met and what they can request with the service 63

3.2.1.3 Difficulties in quality management and assurance 65

3.2.2 “Barking dogs seldom bite” (Inconsistency) in retail sales activities 68

3.2.3 The training for the customer service staff has not been paid proper attention, resulting in poor quality in providing the consultancy to the customers, and sometimes generating the inconsistency in the customer service among the units 70

CHAPTER 4: RECOMMENDATION 72

4.1 Invest more in technology for card and card management 72

4.2 Improve training process and focus on customer service training for new staff before having them applied 77

4.3 Build an effective mechanism on quality management saparatedly 80

4.4 Establish a specific team to do customer care 81

CONCLUSION 83

vii

LIST OF REFERENCES 84

APPENDIX 1 85

APPENDIX 2 87

APPENDIX 3 91

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LIST OF TABLES

Table M2: Added elements of marketing mix. 4

Table M1: Elements of traditional marketing mix. 6

Table 1: Rate of increased investment capital for accompanied products and service 28 Table 2: Total of Card issued by years. 29

Table 3: Survey Systematic Sampling with criteria of Debit amount for 4 cities 33 Table 4: Survey feedbacks. 34

Table 5: Survey feedback devided by amounts. 34

Table 6: Percentage on time using card. 35

Table 7: Total feedbacks on normal issuance time. 35

Table 8: Total feedbacks on quick issuance time. 36

Table 9: Total feedbacks on home-banking regislation. 36

Table 10: Total feedbacks on home-banking usage. 36

Table 11: Feedbacks on Errors. 37

Table 12: Average points for feedbacks on Errors. 38

Table 13: Feedback on service staff 1. 38

Table 14: Feedback on service staff 2. 38

Table 15: Important/satisfaction criterion on customers’ point. 39

Table 16: Customer satisfaction on service staff. 39

Table 17: Satisfaction degree on home-banking service. 40

Table 18: Total overall satisfaction on card service. 40

Table 19: Customer satisfaction on Enthusiastic bank staff. 42

Table 20: Customer satisfaction on home-banking. 43

Table 21: Customer feedbacks on errors. 43

Table 22: Customer satisfaction on main service criterion. 44

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Table 23: General satisfaction degree on card service. 44

Table 24: Customer expectation on Card service. 44

Table 25: Customer support for Card in 2009. 47

Table 26: Gap on customer satisfaction. 51

Table 27: Card issuance productivity calculation for old machine. 55

Table 28: Card issuance productivity calculation for current machines. 56

Table 29: Quality indicators of North collection 2009. 66

Table 30: Quality indicators of North collection 2009. 66

Table 31: Comparision on cost serving estimation with high-tech support. 74

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LIST OF FIGURES

Figure 1.1: Customer gap. 14

Figure 1.2: Key factors leading to provider gap 1. 15

Figure 1.3: Key factors leading to provider gap 2. 17

Figure 1.4: Key factors leading to provider gap 3. 18

Figure 1.5: Key factors leading to provider gap 4. 20

Figure 1.6: Gaps model of service quality. 22

Figure 2.1: Card issue procedure. 30

Figure 2.2: SMS workflow. 62

Figure 3.1: Grow model. 79

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 Necessity of the thesis

Banking operations are becoming increasingly customer dictated The demand for'banking supermalls' offering one-stop integrated financial services is well on therise The ability of banks to offer clients access to several markets for differentclasses of financial instruments has become a valuable competitive edge

Excellent customer service can improve the bank's ability to lure affluent prospects,elevate the bank's profitability, lower bank operation costs, and/or create greatercustomer loyalty

Customer requirements and satisfaction are the term many people talking aboutnowaday The customer's requirements must be translated and quantified intomeasurable targets This provides an easy way to monitor improvements, anddeciding upon the attributes that need to be concentrated on in order to improvecustomer satisfaction We can recognize where we need to make changes to createimprovements and determine if these changes, after implemented, have led toincreased customer satisfaction "If you cannot measure it, you cannot improve it." -Lord William Thomson Kelvin (1824-1907)

With better understanding of customers' perceptions, companies can determine theactions required to meet the customers' needs They can identify their own strengthsand weaknesses, where they stand in comparison to their competitors, chart out pathfuture progress and improvement Customer satisfaction measurement helps topromote an increased focus on customer outcomes and stimulate improvements inthe work practices and processes used within the company

 Objective:

From my intention to learn about such an interesting thing and to apply what I comprehend into a bank, my study aims:

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 To review available status of service quality on card service.

 To comprehend some important aspects which are related to marketing and Customer satisfaction concept.

 To identify the necessary to improve customer service quality for Techcombank card service.

 To provide recommendations and solutions for Techcombank to improve customer service quality for Techcombank card service.

The scope of study is service quality and how to improve service quality The

research scope is also for card customer service of TECHCOMBANK

The study was implemented by result of the previous TECHCOMBANK survey,research second data at home, system analysis and comparison method Because oflarge customer number, so the study mainly used survey and analysis to solve theissues under business rules and customer behavior theory

The study also gather ideas of experts working in customer service and systemsupport for card operation of TECHCOMBANK Expecially, thesis also is the factexperience of 9 years working for TECHCOMBANK up to now

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

Based on the findings, the thesis give out some key conclusions and some guidelinesolutions which are focused on improving service quality by changing currentGAPs in the bank’s operation

 Contribution of the thesis

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The study is of great practical value, providing a comprehensive overview onbanking service: Card - which is relatively new in Vietnam This thesis is aimed atshowing a full picture of card services at a bank, discussing the shortcomings andweaknesses which the Bank needs to pay due attention and timely address so as toachieve its target: Becoming Number 1 in a fiercely competitive market in Vietnamfor the time being.

The thesis also posed for such a new service like Card, it requires high technologyand huge investment in order to operate well and to satisfy the demands oftargeted customers

CHAPTER 1: LITERATURE REVIEW

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1.1 Service marketing mix in banks.

1.1.1 Service marketing mix.

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

of services, to be aware of that over time services and the service sector of theeconomy have been defined in subtly different ways Compatible with the simpleway, broad definition is one that defines service to include “all economic activitieswhose output is not a physical product or construction, is generally consumed at thetime it is produced, and provides added value in forms (such as convenience,amusement, timeliness, comfort, or health) that are essentially intangible concerns

of its first purchaser.”1

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

to inventory Demand forcasting and creative planning or capacity utilization aretherefore important and challenging decision areas The fact that services cannottypically be returned or resold also implies a need for strong recovery strategieswhen things do go wrong

One of the most basic concepts in marketing is marketing mix, defined as theelements an organization control that can be used to satisfy or communicate withcustomers The traditional marketing mix is composed of the four elements (fourPs): product, price, place (distribution) and promotion These elements appear as thecore decision variable in many marketing text or marketing plan The notion of miximplies that all the variables are interrelated and depend on each other to someextent Further, the marketing mix philosophy implies an optimal mix of the fourfactors for a given market segment at a given point in time

Table M1: Elements of traditional marketing mix

as clerks, ticket takers, nurses, and phone personnel) are involved in real timepromotion of service even if their jobs are typically defined in terms of theoperational function they perform.

Expanded Mix for service:

Because services are produced and consumed simultaneously, customers are oftenpresent in the firm’s factory, interact directly with the firm’s personnel, and areactually part of service production process Also, because services are intangible,customers will often be looking for any tangible cue to help them understand thenature of the service experience For example, in hotel industry, the design anddécor of hotel as well as the appearance and attitudes of its employees will influencecustomer perceptions and experiences

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

Table M2: added elements of marketing mix2

People

2Service Marketing – integrating customer focus across the firm – Valarie A Zeithaml, Mary Jo Bitner, Dwayne D Gremler – 4th eddition

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 Physical evidence.

The environment in which the service is delivered and where the firm andcustomers interact, and any tangible components that facilitate performance orcommunication of the service

 Process

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

1.1.2 Service marketing mix in banks.

Service marketing in banks.

Marketing approach in banking sector had taken significance after 1950 in westerncountries and then after 1980 in Turkey New banking perceptiveness orientedtoward market had influenced banks to create new market Banks had started toperform marketing and planning techniques in banking in order to be able to offertheir new services efficiently

Marketing scope in banking sector should

marketing framework Performed marketing

be considered under the servicestrategy is the case which is

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determination of the place of financial institutions on customers’ mind Bankmarketing does not only include service selling of the bank but also is the functionwhich gets personality and image for bank on its customers’ mind On the otherhand, financial marketing is the function which relates uncongenitalies, differencesand non similar applications between financial institutions and judgement standards

of their customers

The reasons for marketing scope to have importance in banking and for banks tointerest in marketing subject can be arranged as3:

Change in demographic structure: Differentiation of population in the number and

composition affect quality and attribute of customer whom benefits from bankingservices

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

to the growing international banking perceptiveness and recently being non limitingfor new enterprises in the sector Increase in liberalization of interest rates hasintensified the competition

Bank’s wish for increasing profit: Banks have to increase their profits to create new

markets, to protect and develop their market shares and to survive on the basis ofintense competition and demographic chance levels

The marketing comprehension that are performed by banks since 1950 can beshown as in following five stages:

1. Promotion oriented marketing comprehension

2. Marketing comprehension based on having close relations for customers

3. Reformist marketing comprehension

4. Marketing comprehension that focused on specializing in certain areas

5. Research, planning and control oriented marketing comprehension

Marketing activities of firms begin with determination of the market that they offertheir services or goods Firms must find out the features of the market that it f anging market

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

3Article “Service marketing in banks” – http://www.oppapers.com

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

Service marketing mix in banks.

Nowaday when mentioning about service marketing mix in banking, people thinkabout these below elements4:

PRICE

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

in the base of transaction exchange that it takes place Banks have to estimate theprices of their services offered By performing this, they keep their relations withextant customers and take new ones The prices in banking have names like interest,commission and expenses Price is the sole element of marketing variables thatcreate earnings, while others cause expenditure

While marketing mix elements other than price affect sales volume, price affectboth profit and sales volume directly

Banks should be very careful in determining their prices and price policies Becausemistakes in pricing cause customers’ shift toward the rivals offering likewiseservices

Traditionally, banks use three methods called “cost-plus”, “transaction volumebase” and “challenging leader” in pricing of their services

DISTRIBUTION

4Service Marketing – integrating customer focus across the firm – Valarie A Zeithaml, Mary Jo Bitner, Dwayne D Gremler – 4th eddition

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The complexity of banking services are resulted from different kinds of them Themost important feature of banking is the persuasion of customers benefiting fromservices.

Most banks’ services are complex in attribute and when this feature joins theintangibility characteristics, offerings take also mental intangibility in addition tophysical intangibility On the other hand, value of service and benefits taken from itmostly depend on knowledge, capability and participation of customers besidesfeatures of offerings This is resulted from the fact that production and consumptionhave non separable characteristics in those services

Most authors argue that those features of banking services makes personalinteraction between customer and bank obligatory and the direct distribution is thesole alternative Due to this reason, like preceding applications in recent years,branch offices use traditional method in distribution of banking services

PROMOTION

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

is consist of personal selling, advertising, public relations, and selling promotionaltools

ADVERTISING

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

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

2. Increase use of services

3. Create well fit image about banks and services

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4. Change customers’ attitudes

5. Introduce services of banks

6. Support personal selling

7. Emphasize well service

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

Banks should care about following criteria for selection of media

1. Which media the target market prefer

1. Activities of banks, results, programs, new services

2. Situation of market, government decisions, future developments

3. The opportunities offered for industry branches whose development meets national benefits

PUBLIC RELATIONS

Public relations in banking should provide;

1. Establishing most effective communication system

2. Creating sympathy about relationship between bank and customer

3. Giving broadest information about activities of bank

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

SELLING PROMOTIONAL TOOLS

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Another element of the promotion mixes of banks is improvement of selling Mostlyused selling improvement tools are layout at selling point, rewarding personnel,seminaries, special gifts, premiums, contests.

1.2 Customer satisfaction.

1.2.1 Definition.

Satisfaction is consumer’s fulfillment response It is a judgment that a product or service feature, or the product or service itself, provide a pleasurable level of consumption-related fulfillment 5

In less technical term, satisfaction is the customer’s evaluation of a product orservice in term of whether that product or service has met the customer’s needs andexpectations Failure to meet needs and expectations is assumed to result indissatisfaction with the product or service

In addition to a sense of fulfillment in the knowledge that one’s needs have beenmet, satisfaction can also be related to other types of feeling, depending on theparticular context or type of service For example, satisfaction can be viewed ascontentment – more of passive response that consumer may associate with servicesthey do not think a lot about or services that they receive routinely over time.Satisfaction may also be associated with feelings of pleasure for services that makethe consumers feel good or are associated with a sense of happiness For thoseservices that really surprise the consumers in a positive way, satisfaction may meandelight In some situations, where the removal of a negative leads to satisfaction, theconsumers may associate a sense of relief with satisfaction Finally, satisfaction may

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

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

if it were static, satisfaction is a dynamic, moving target that may evolve over time,influent by a variety of factors Particularly when product usage or the serviceexperience takes place over time, satisfaction may be highly variable depending on

5Service Marketing – integrating customer focus across the firm – Valarie A Zeithaml, Mary Jo Bitner, Dwayne D Gremler – 4th eddition

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which point in the usage or experience cycle one is focusing on Similarly, in thecase of very new services or a service not previously experienced, customerexpectations may be barely forming at the point of initial purchase; theseexpectations will solidify as the process unfolds and the consumer begins to formhis or her perceptions Through the service cycle the consumer may have a variety

of different experiences – some good, some not good – and each will ultimatelyimpact satisfaction

1.2.2 What determines customer satisfaction?

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

Product and service features

Customer satisfaction with a product or service is influenced significantly by thecustomer’s evaluation of product or service features For a service such as resorthotel, important feature my include the pool area, access t gold facilities,restaurants, room comfort and privacy, helpfulness and courtesy of staff, room price,and so forth In concluding satisfaction studies, most firms will determine throughsome means (often focus groups) what the important features and attributes are fortheir service and them measure perceptions of those features as well as overallservice satisfaction

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Attributions for service success or failure

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

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

Perceptions of equity or fairness.

Customer satisfaction also is influenced by perceptions of equity and fairness.Customers ask themselves: have I been treated fairly compared with othercustomers? Did other customers get better treatment, better prices, or better qualityservice? Did I pay a fair price for the service? Was I treated well in the exchange forwhat I paid and the effort I expended? Notion of fairness are central to customer’sperceptions of satisfaction with products and services, particularly in servicerecovery situations

Other consumers, family members, and coworkers.

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

a new service or technology will be influenced not only by individuals’ personalexperiences with the software itself but also by what others say about it in company,how others use it and feel about it, and how widely it is adopted in the organization

1.3 Service quality and GAP model.

How customers perceive service, how they assess whether they have experiencedquality service, and whether they are satisfied are mentioned below Customersperceive service in term of service quality and how satisfy they are overall with

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their experience Companies today recognize that they can compete more effectively

by distinguishing themselves with respect to service quality and improved customersatisfaction

In order to find out the way to improve service quality, Companies can scoreService quality gap model to know where the process of improving service qualitybegins and how customer perceive its services

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

CUSTOMER GAP 6

The customer gap is the difference between customer expectation and perceptions(Figure 1.1) Customer expectations are standards or reference points that customersbring into the service experience, whereas customer perceptions are subjectiveassessments of actual service experiences Customer satisfactions often consist ofwhat a customer believes should or will happen The sources of customerexpectations are marketer-controlled factors (such as pricing, advertising, salespromises) as well as factors that marketer has limited ability to affect (innatepersonal needs, word-of-mouth communications, competitive offerings)

Expected service

Figure 1.1: Customer gap

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

PROVIDER GAPS

To close the all important customer gap, the gaps model suggests that provider gapsneed to be closed These gaps occur within the organization providing the serviceand include four gaps:

Gap 1: Not knowing what customers expect

6Service Marketing – integrating customer focus across the firm – Valarie A Zeithaml, Mary Jo Bitner, Dwayne D Gremler – 4th eddition

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Gap 2: Not selecting the right service designs and standards.

Gap 3: Not delivering to service designs and standards

Gap 4: Not matching performance to promises

More details of these gaps are provided below:

Gap 1: Not knowing what customers expect.

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

There are many reasons for managers not being aware of what customers expect:they may not interact directly with customers, they may be unwilling to ask aboutexpectations or they may be unprepared to address them When people with theauthority and responsibility for setting priorities do not fully understand customers’service expectations, they may trigger a chain of bad decisions and supoptimalresource allocations that result in perceptions of poor service quality In todaychanging organizations, the authority to make adjustments in service delivery isoften delegated to empowered teams and frontline people

When management or empowered employees do not acquire accurate informationabout customers’ expectations, provider gap 1 is large Formal and informalmethods to capture information about customer expectations must be developedthrough marketing research

To minimize gap 1, Companies should focus on how to understand customersthrough multiple research strategies, how to built strong relationship with customersand understand customer needs overtime, and how to implement recovery strategieswhen things go wrong

Figure 1.2 shows the key factors responsible for provider gap 1 An inadequatemarketing research orientation is one of the critical factors

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Customer expectation

• Inadequate marketing research orientation.

o Insufficient marketing research.

o Research not focused on service quality.

o Inadequate use of marketing research.

• Lack of upward communication.

o Lack of interaction between management and customers.

G

A P

o Lack of encouragement to listen to customer complaints.

o Failure to make amends when things go wrong

o No appropriate recovery mechanisms on place to service failures.

Figure 1.2: Key factors leading

to provider gap 1

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

Gap 2 focuses on difference between company understanding of customer

expectations and development of customer-driven service designs and standards

Customer-driven standards are different from the conventional performance

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

customer requirements that they are visible to and measured by customers They areoperations standards set to correspond to customer expectations and priorities ratherthan to company concerns such as productivity or efficiency

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Customer –driven service designs and standards

Figure 1.3: Key factors leading to provider gap 2

Because services are intangible, they are difficult to describe and communicate.This difficulty becomes especially evident when new services are being developed

It is critical that all people involved (managers, frontline employees, and the-scenes support staff) be working with the same concepts of the new services,based on customer needs and expectations For a service already exists, any attempt

behind-to improve it will also suffer unless everyone has the same vision of the service andassociated issues

One of the most important ways to avoid gap 2 is to clearly design service withoutoversimplification, incompleteness, subjectivity, and bias To do so, tools are

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needed to ensure that new and existing services are developed and improved in ascareful a manner as possible.

The quality of services delivered by customer contact personnel is criticallyinfluenced by the standards against which they are evaluated and compensated.Standard signals to contact personnel what the management priorities are and whichtypes of performance really count When service standards are absent or whenstandards in place do not reflect customer expectations, quality of services theyreceive s likely to be enhanced If service standards are developed appropriatelythey can have powerful positive impact on closing both gap 1 and customer gap

Gap 3: Not delivering to service designs and standards.

Gap 3 is discrepancy between development of customer-driven service standardsand actual service performance by company employees

Figure 1.4: Key factors leading

to provider gap 3

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Even when guidelines exist for performing services well and treating customerscorrectly, high-quality service performance is not certainty Standards must bebacked by appropriate resources (people, systems, and technology) and also must beenforced to be effective – that is, employees must be measured and compensated onthe basis of performance along those standards Thus, even standards accuratelyreflect customers’ expectations, if company fails to provide support for thosestandards – if it does not facilitate, encourage, and require their achievement –standards do no good When the level of service delivery falls short of the standards,

it falls short of what customers expect as well

Gap 4: Not matching performance to promises

Provider gap 4 illustrates the difference between service delivery and the serviceprovider’s external communications Promises bade by a service company throughits media adverting, sales force, and other communications may potentially raisecustomer expectations, the standards against which customers assess service quality.The discrepancy between actual and promised service therefore has an adverseeffect on customer gap

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Figure 1.5: Key factors leading to provider gap 4

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

personal selling, inadequate coordination between operation and marketing, and

differencies in policies and procedures across service outlets

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

to customer involve issues that cross organizational boundaries Because advertising

promises what people do, and because what people do can not be controlled like

machines that produce physical goods can be controlled, this type of

communications involves functions other than the marketing department This type

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

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

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external marketing used in product and service firms When employees whopromote service do not fully understand the reality of service delivery, they arelikely to make exaggerated promises or fail to communicate to customer aspects ofthe service intended to serve them well The result is poor service qualityperception Effectively coordinating actual service delivery with externalcommunications, therefore, narrow provider gap 4 and favorably affects customergap as well.

In summary, service quality is created from all organization’s operation procedures,and it is measured by how well organization can shorten its gaps, included customergap and provider gaps The key to close provider gaps is to close gap 1 through gap

4 and keep them closed

The full conceptual model in figure 1.6 provides clear message to manager wishing

to improve service quality The gap model of service quality serves as a frameworkfor service organizations attempting to improve service quality and servicemarketing

In order to make it easy to define, some organizations put all gap with some clearmain questions and score them, then they can position their quality service and pointout where they have to focus on to improve their service quality By this way, Gapmodel is called Service quality gap model audit

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Gaps model of service quality

Customer

Customergap

Perceivedservice

Company

Gap 3Gap 1

Gap 2

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Service quality gap model audit:

1 Market research orientation

 Is the amount and type of market research adequate to understand excellent

customer expectations of service?

 Does the company use this information in decisions about service

provision?

2 Upward communication

 Do managers and customer interact enough for management to

know what customer expect?

 Do contact people tell management what customer expect?

3 Relationship focus

 To what extent does the company understand the expectations of

different customer segments?

 To what extent does the company focus on relationships with

customer rather than transactions?

Score for Provider gap 1

Provider gap 2:

 How well are new services define for customers and employees?

6 Presence of customer – define standard

 How effective are the company’s service standard?

 Are they defined to correspond to customer expectations?

 How effective is the process for setting and tracking service quality

goals?

7 Appropriate physical evidence and servicescape

 How appropriate, attractive and effective are the company’s

physical facilities, equipment and other tangibles?

Score for provider gap 2

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Provider gap 3:

and empower employees?

and branches?

customers that are incompatible?

10 Effective alignment with service intermediaries

11 Alignment of supply and demand

fluctuation?

Score for provider gap 3.

Provider gap 4:

12 Integrated service marketing communications

interactions between company’s employees and customers – expressthe same message and level of service quality?

13 Effective management of customer expectations

will be provided to them?

14 Accurate promising in advertising and personal selling

15 Adequate horizontal communications

each other so that service quality equals what is promised?

Score for provider gap 4

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

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

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

service quality

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CHAPTER 2: TECHCOMBANK CASE STUDY

2.1 Status of Techcombank and introduction of its card service

2.1.1 Techcombank Personal cards and card services.

Techcombank became issued bank for card from 2003 with Vietcombank support, and its Card Center was officially established from April of 2004 At the beginning,Techcombank has only one kind of card, that is domestic debit card named

fastaccess In 2005, they variated their debit card with different types such as the card for VIP/Priority customers, for Vietname airline team, or for gift End the

2006, they gained an agreement with Visa international institution who allow and support them to issue and make payment with visa card Up to now, they have customized many types of card for different types of customers based on visa card and domestic debit card

2.1.1.1 Prospects of card in Vietnam market.

Vietnam Economy is regarded as stability and developing step be step Commercialbanking system has changed much, especially in payment technology of bankswhich model technologies in the world have many opportunities to be brought toVietnam, and create chances for Vietnam to explore our product in internationalmarket World economy with good status will promote credit card development –one of the very convinient payment method which accepted in many areas in theworld – and widen the location for using card and making payment

In Vietnam, there are good opportunities for technology to develop and popularize,and this is a very good framework for card service decelopment, and thencustomers’ knownledge about technology will change in positive orientation

According to some experts, with current status of the economy, incomes ofVietnamese will increase to 600 USD/year in next some years, and that fit whatVietnamese goverment expects that Vietnamese incomes will reach 700 USD/year

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

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

of vietnamese tend to increase, and with the support of high technology andintegration trend, there will be some good change in applying high-tech productslike card At this time, popolation of urban areas is about 20-30% of all the nation inwhich the age under 45 still working and studying with their basic knowledge aboutscience and technology is the potential for new development trends In the next 5-7years, the range of age who are acceptable science and technology will be wider,under 50-52 years old, and at high rate in working people in the urban areas Whenincomes increase, the fund for consuming will be increase, and payment methodswithout cash will be applied much more

Commercial environment will positively change by development of commercialcenters, services, supermarkets, shops, and the result is that consuming habits ofpeople will be changed that will be good conditions for payment tools without cash.One of the important thing is that legal environment tend to be more closed, and that

is a legal corridor for commercial development With this corridor, the governmentopens new ways for businesses and banks to develop and increase compatitiveadvantages

With many good conditions above, there will be a big movement with credit card inthe next time The first gain of card payment is to go over big stucks and recoverusers’ belief, improve payment quality compared to other around markets in thearea

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

in payment will be lower than current to wider the range of consumptiondomestically Card is not only for cash withdrawing, making payment for goods andservices, it also can be used to make a phone call, or can be used as citizen ID, Beside that, POS network will be explored to serve customer need in payment Cardwill be used to pay for petro fees, telephone fees, tuition fees, and then e-commerce will develop in vietnam, so card will be the most convinient method forpayment It’s estimated that there are 90% secured transactions which will beautomatically well done

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2.1.1.2 The strategy to develop card.

Card market in Vietname is devided into 3 banking groups: the leadings, thedevelopings, and new commers TECHCOMBANK is in the 2nd group –Developing Techcombank purpose is to make market segment, choose markettarget, develop market share, attach the GAPs that the leadings missed, and preventnewcomers to penetrade the market In Techcombank personal service strategy, cardproduct is regarded as a driven product and card development strategy is the keystrategy, so TECHCOMBANK draw out its action plan as below7:

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

establish new products which are modern and suitable with target customers

- Paralleled with pushing new products, TECHCOMBANK is proactive inpromotion and quality improvement, because card service is new to vietnamesecustomers, and these method will help to attract new customers and maintain them

- Improving the card management system in order to fix existant errors and advoid risk

- Being hury to occupy the market share in the North, paralleled with re-designingcard product and service to penetrade in the South, exploring ATM and POS system

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

2.1.1.3 Some successes and ambituous plan of card development.

To develop cards, a prerequiste on development of service accompanied must besupplemented Techcombank is regarded as the leading bank in this field thanks toinvesting into services namely: Hombanking, F@st advance, Mobipay, F@st-i-bank, F@st saving F@saSaving is one kind of account developed basing onTechcombank’s modern technology and has been lauching into market since June

2004 This special product is provided by Techcombank for customers havingcurrent accounts

FastSaving account can be considered as an automactic investment amount in whichcustomers can benefit from interest which is higher than normal one Using Fast

7Techcombank PFS strategy, 2007.

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Saving, customers can get other benefits of an account owner as: transactionauthorization, colleteral, mortgage and other characters of a normal saving amount.Cash advance from FastSaving can be made twice a month, each one 30% ofcurrent outstanding balance Customers can withdraw money or clear account atcustomer service counter area They can take money from saving account bytransfering such as using an order to pay or FastAccess card via ATM to makepayment.

If you would like an amount of money in provision for your daily expenditureneeds, to travel or buy a new TV, new car but you’re waiting for next coming salaryperiod, Fast Advance is exactly what you need Fast Advance allows customers towithdraw money more than credit outstanding balance in their account atTechcombank at a certain limit (so called Advance limit) If you want to bookairplane ticket via internet, you do not need a credit card, just a fastaccess card canhelp you to do that It’s the difference that Techcombank create to meet customer’sneeds and expectation

In 2006, Fast Mobipay and Fast i-bank were launched, this marks a strong stepforward of Techcombank’s card activities With these two products, customers canbuy goods and services anywhere all around the world, transfer money to anywherewithin Vietnam without coming to point of sale or bank directly The capitalinvested for this product is not much thanks to modern technology level andcreative, active staff, especially updated software system

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

Source:: Report on card activities from 2004 to 2008

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In 2006, there was a sudden mutation in investment, thanks to strongcollaboration with strategic partners in order to implement means of payment undermethod Mobilpay The second reason, which is more important: Techcombank didnot hesitate to put first steps in Fast i-bank payment From 2007, the investment intoaccompanied products and services with cards has been regarded indispensable insystem of infrastructure investment items for card (transfer Swift, ATM/POSsystem, card-maker machines/PIN…)

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

Table 2: Total of Card issued by years

ATM transactions value

(withdraw + transfer) (Bil)

POS transaction value

(Bil)

Source: Report on Card Operations

In paranoma, the development in number of card issued increased drammatically in

2007, twice in comparision with 2006, only after one year of enhancing forinvestment into cards The really significant leap is recorded in 2009 after HSBCtook part in supporting directly Techcombank with strategy of becoming the leadingretail bank in which cards are the main product As the same, volume of paymentvia ATM and POS has increasing correlatively with number of cards This proves

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