CUSTOMER SATISFACTION AND SERVICE QUALITY IN THE BANKING
INDUSTRY(AGRIBANK) IN HO CHI MINH

________________________

A dissertation presented to
The Faculty of Graduate School
Tarlac State University
Tarlac City

___________________________

In Partial Fulfillment
of the Requirements for the Degree
Doctor of Philosophy
Major in Business Administration

VU MINH HIEU
March 2013


Republic of the Philippines
TARLAC STATE UNIVERSITY
GRADUATE SCHOOL
Tarlac City

APPROVAL SHEET
This Dissertation of VU MINH HIEU entitled “Customer satisfaction and
service quality in the banking industry (Agribank) in Ho Chi Minh City” which
is prepared and submitted in partial fulfillment of the requirements for the Degree of
Doctor of Philosophy, Major in Business Administration, is hereby accepted.

© 2013
Vu Minh Hieu
ALL RIGHTS REVERVED

ii


ABSTRACT
Title:

CUSTOMER SATISFACTION AND SERVICE QUALITY IN THE
BANKING INDUSTRY (AGRIBANK) IN HO CHI MINH CITY.

Researcher:

VU MINH HIEU

Institution:

Tarlac State University
Tarlac City

Course:

Doctor of Philosophy

Major:

Business Administration


classmate who give me many valuable advice to complete this dissertation.
Last but not least, I must express my gratitude to my wife and children for their
enormous support, encouragement and understanding during these years of study.

iv


LIST OF FIGURES

Figure

Page

1

1. Service Quality Model......................................................... 13

2

The Gaps Model……………………………………………...

3

Determinants of Perceived Quality of Service………………. 14

4

Service quality model………………………………………... 16

5


14


LIST OF TABLES
Table

Page

1

The measurement scale on the customer satisfaction factors……. 45

2

Summary of the coded measurement scale………………………

3

Descriptive statistics of customer expectations………………….. 48

4

Descriptive statistics of the service quality scales……………….

49

5

Descriptive statistics of the price competitives scales…………...


60

11

Results of Pearson analysis of Customer Satisfaction…………...

61

12

Results of regression analysis……………………………………

65

13

Summary of the measurement scale of the customer satisfaction.. 73

vi

46


TABLES OF CONTENTS
Approval sheet………………………………………………………...……………….i
Ccopyright page……………………………………………………………………….ii
Abstract………………………………………………………………...…..……...….iii
Acknowledgments……………………………….…………………………………....iv
List of figures……………………………………………………..………………......iv

Determinants of the customer satisfaction ................................................. 40
Research methodology.................................................................................... 40
Data collection................................................................................................ 41
Primary data.............................................................................................. 41
Secondary data.......................................................................................... 41
Research design .............................................................................................. 41
Qualitative method.................................................................................... 41
Quantitative research................................................................................. 44
Questionnaire design ................................................................................. 48
IV. ANALYSIS AND FINDINGS OF DATA .................................................... 50
The descriptive statistics ................................................................................. 50

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Identifying customer needs........................................................................ 50
Factors influencing to the customer satisfaction......................................... 51
Measurement of customer satisfaction....................................................... 52
Analysis of the measurement scales ................................................................ 53
Cronback’s alpha ...................................................................................... 53
Exploratory Factor Analysis (EFA) ........................................................... 56
The generalised research model ...................................................................... 59
The research model ................................................................................... 59
Hypotheses................................................................................................ 59
Testing the research model.............................................................................. 60
Pearson’s correlation coefficient analysis .................................................. 60
Regression analysis ................................................................................... 62
ANOVA analysis ...................................................................................... 67
Findings.......................................................................................................... 68
Identifying customer needs........................................................................ 68


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CHAPTER 1
I. THE PROBLEM AND ITS BACKGROUND
Introduction
Customer satisfaction is one of the key issues for companies in their efforts to
improve quality in the market place. Most businesses have their own targets for being
profitable. They have carefully planned and implemented strategies, but they all have
something in common – a customer. Business purposes are based on customers and if
companies want to be successful, they must concentrate on them.
This means determining customers’ needs, responding to their requirements and
maintaining customer satisfaction by assuring quality in business’s operations. More
of that, customer satisfaction is so important because satisfied customers spread
positive word of mouth that attracts more new customers and then companies will sell
more and gain high profits. (Garson 1993, 5.)
Statement of the problem
In Vietnam, with the current rapid globalization and international economic
integration in the region, with the technology development and the Vietnam market
openings, with the banking sector, after nearly four years of joining the World Trade
Organization (WTO), banking system of Vietnam has made marked progress and
positive. Banks are rapidly developing in size, make technological innovation and
improve the quality of human resources in accordance with the integration process.
However,

World

Trade


City and 8 companies. Like any banks, Agribank still gains the satisfaction of their
customers but they are with different levels by customer needs and feelings. As
known, most of Agribank have same of working styles, conditions, procedures,
decorations, etc. Therefore, the service quality is also same in Agribanks in Ho Chi
Minh City.

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With the studies’ results of Ruyter et al. (1997), Brady et al. (2001) and
Sureshchandar et al. (2002) indicated that there was a certain relationship between
service quality and customer satisfaction based on different cultural background. In
addition, service quality had significantly impacts on customer satisfaction and they
were highly related.
Therefore, the study of customer satisfaction for the bank is the important work
that must be done regularly and continuously to be able to respond promptly to
changes in their needs so that we can better serve customers and always make the
customer be satisfied when using the bank services and products. The study
"Customer satisfaction and service quality in the banking industry (Agibank) in Ho
Chi Minh City" is done not out of purpose and with a hope to get more comments to
the issue of research to be more completed.
Research objectives
Based on the current situation in the operation and development of the Ho Chi
Minh City Agribank, this study is to answer the following:


Determining the customer expectations to Agribank in Ho Chi Minh City




of services for corporate customers and the feasibility will be high and significant
scale and, at the same time, they also bring more profitable for the bank comes from
the usual frequency services.
Third, as per security requirements in the operation of the bank, Vietnam has the
high country’s risk in comparison with other countries, therefore, the corporate may
be has lower risk potential with retail customers because the bank has deep
understanding in their customers’ financial situation, credit histories and changes in
their operations.
However, it is possible that findings and results will be the guideline not
only for the further research in the other banks and but also for the banking industry.

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The findings imply that service quality is not the only factors that could lead to
customer satisfaction in service sectors; that service quality dimension varies in the
different service sectors. The findings suggest that to provide quality service in order
to satisfy customers, organizations in this type of service sectors in need of improving
service quality dimensions. In addition, to provide overall satisfaction to customers,
the service sector needs to improve other factors that were given as reasons for
satisfaction. This study contributes to existing theories by confirming or adding value
to relationships that are involved in customer satisfaction, service quality, and
SERVQUAL dimensions. It provides results that could be useful to managers in
business organizations for strategic planning.
Content of the study
The study is organized in five chapters as following:
Chapter 1 is the introductory chapter. It includes the background, problem
statement, purpose of the study, objectives, research questions, importance, and
structure of thesis.
Chapter 2 reviews relevant literature, concepts and theoretical framework as

used. An researcher author defines service as “any intangible act or performance that
one party offers to another that does not result in the ownership of anything” (Kotler
& Keller, 2009). Although services contribute almost 80% to the world’s economy,
consensus on the definition of “service” is yet to be reached. “Despite more than 25
years of study, scholars in the field of service management do not agree on what a
service is. Indeed, instead of coming closer to a definition they seem to be less
certain” (Haywood- Farmer and Nollet, 1991).
Services have been defined as intangible and perishable goods, produced and
consumed simultaneously (Sasser et al., 1978), activities or series of activities of more
or less intangible nature provided as solutions to the customer’s problems (Gronroos,
1990), processes, and performances (Zeithaml and Bitner, 1996; Gronroos, 2000),
time-perishable and intangible experiences performed for a customer who acts as a
coproducer, (Fitzsimmons and Fitzsimmons, 2001) etc.
Because of the explosive development of service sectors worldwide service
quality is today considered as a driver to corporate marketing and financial

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performance (Buttle, 1996), the foundation of services marketing and the basis of
sustainable success and survival in the marketplace (Fitzsimmons and Fitzsimmons,
2001). Service excellence is no more a matter of courteousness or corporate offering
but the most decisive weapon in a firm’s quiver and the concept of service quality has
been subjected to extensive research. However, a definition of service quality is not
straightforward. Service quality is a synthetic term and no such definition can be
attempted before the term’s components are discussed.
Many of these definitions either directly or implicitly refer to the distinct
characteristics of services as compared to physical good. The most important
characteristic of services is that they are “processes consisting of a series of activities
where a number of different types of resources are used, often in direct interactions