OUM OPEN MALAYSIA UNIVERSITY RESEARCH PROJECT (BMBR5103) RESEARCH ABOUT FACTORS AFFECT TO CUSTOMERS’ SATISFACTION WHEN USING ATM CARD PRODUCTS AT DONGA BANK, TAN BINH BRANCH, HO CHI MINH CITY STUDENT’S FULL NAME : VO HUYNH DUC STUDENT ID : CGS00064987 INTAKE : MARCH, 2016 ADVISOR'S NAME & TITLE : DR BUI PHI HUNG AUGUST, 2017 Advisor’s assessment Advisor’s signature CONTENTS Chapter I: Introduction……………………………………………………………….1 1.1 Research background 1.2 Objectives of the study 1.3 Research Methodology 1.4 Subjects and scope of study 1.5 Structure of the Paper 1.6 Structure and content of research topics .3 Chapter II: Literature review .4 2.1 Payment card overview .4 2.1.1 Some basic concepts about payment cards 2.1.2 Card classification .4 2.2 Utilities when using the card .4 2.3 Process of issuance, payment by ATM card .5 2.4 Consumer behavior 2.5 Customer satisfaction index model 2.5.1 Building the model 2.5.2 Method of measurement of satisfaction indicators 10 2.5.3 Application of customer satisfaction index in strategic planning .11 2.5.4 Customer satisfaction 11 2.5.5 Service quality 12 2.5.6 Parasuraman service quality distance model 12 Chapter III: Research Methodology 14 3.1 Research design 14 3.1.1 Collect information 14 3.1.2 Research Methods .15 3.1.2.1 Preliminary research 15 3.1.2.2 Formal study: 15 3.2 Develop ATM service quality scale 16 3.3 Develop a measure of customer satisfaction: 17 Chapter IV: Analysis and Research Results 23 4.1 Scale analysis 23 4.1.1 Cronbach's alpha scale analysis .23 4.1.2 Factor analysis 26 4.2 Accreditation of theoretical models 28 4.2.1 Pearson correlation coefficient analysis 29 4.2.2 Regression analysis 30 4.2.3 Evaluate the quality of ATM card services currently offered by DongA Bank, Tan Binh Branch…………………………………………………………………… 33 4.2.3.1 About service efficiency and customer support 33 4.2.3.2 On tangible means 34 4.2.3.3 About credibility .35 Chapter V: Conclusion and solution .37 5.1 The proposal effectively serve and support the client 37 5.2 Conclude .39 References 40 FIGURE Figure 1: Card payment process Figure 2: Model stage decision making to purchase goods or services Figure 3: American Customer Satisfaction Index – ACSI Figure 4: European Customer Satisfaction Index – ECSI Figure 5: Theoretical model of satisfaction indicators of banks Figure 6: Strategic planning model for customer-centered customer satisfaction Figure 7: Service quality model (Parasuraman, 1988) TABLES Table 3.1: Sample sex information Table 3.2: Age sample information Table 3.3: Sample Information on educational level Table 3.4: Sample information on personal income Table 4.1: Results of the Cronbach's alpha coefficient analysis Table 4.2: Results of the analysis of the factors of the service quality scale Table 4.3: Results of factor analysis of customer satisfaction scale Table 4.4: Correlation matrix between variables Table 4.5: Results of multiple regression analysis ACRONYMS DongA Bank: Joint stock commercial bank of East Asia TC: Reliability HQ: Effective NL: Capacity DC: Empathy PT: Tangible Media HL: Satisfaction Vo Huynh Duc CHAPTER I: INTRODUCTION 1.1 Research background: The bank card market in Vietnam is currently developing very vibrant, especially domestic debit cards (ATM cards) with more than 40 banks involved in issuing these cards, including state-owned commercial banks, Joint stock commercial banks, joint venture banks and foreign bank branches With a population of over 80 million and a young population structure, Vietnam is considered a potential market for the development of this modern service Therefore, the tough competition between banks will inevitably take place to attract target customers to their banks Therefore, in order to improve competitiveness and expand market share, researching customer satisfaction when using ATM card services is an important issue that needs to be paid due attention At DongA Bank, Tan Binh Branch, there is no formal study related to the quality of ATM card services provided and the level of customer satisfaction when using these card services The bank, as a service provider, must be responsible for providing quality products, regard customers as subjects, the one who bring the income to the bank itself As for customers, they have a product of their choice that can meet and satisfy their requirements In the future, the use of non-cash payment services will become popular and close to the people of Vietnam, especially card services Therefore, banks that want to maintain and develop this service need to accurately measure the quality of their card services, thereby improving their ability to meet the increasing demands of their customers 1.2 Objectives of the study: This study provides an overview of the ATM cards of DongA Bank and thereby assesses the quality of ATM card services offered by DongA Bank The objective evaluation of customers has an important significance to help the bank go in the right direction to improve the quality of ATM card related services Specific objectives include: Page Vo Huynh Duc - Measuring the quality of ATM services of DongA Bank - Recognizing clearly the opinions of customers about the quality of ATM card services provided by the bank 1.3 Research Methodology: What research method we choose? And how to follow the process? Here we choose the quantitative method Quantitative research methods include: - Probe study: Prior to the formal study, the survey was conducted in a total of 50 clients to identify errors in the design of the questionnaire, the missing content needed to be added - Official study: Through consultations with card specialists, the variables of observation have been modified and adapted to the interviewees The official study was conducted with a sample size of 200 clients working at companies paid monthly through their accounts opened at the DongA Bank, Tan Binh Branch - What interviewing method is used?: Investigation by answering the questionnaire in the form of a letter of inquiry through colleagues working in the marketing team of Sales Department of Card Services at DongA Bank, Tan Binh Branch - Survey time and response rate? : The official study is expected early in June 2017, the survey period is about weeks, estimated response rate is over 90% because customers are interested and respond to this survey according to preliminary research - Using analytical methods? How to test the research model? This study uses factor analysis to extract the elements of quality ATM card services that affect customer satisfaction - SPSS software is used to test the research model 1.4 Subjects and scope of study: To complete this essay, we seek answers to the following questions: Page Vo Huynh Duc This study was conducted in Ho Chi Minh City Who are the interviewees? Where? In this survey, the selected respondents were employees working for companies paying salary via DongA Bank, Tan Binh Branch 1.5 Structure of the Paper: Research topics bring some practical implications: - As a service provider, will DongA Bank accurately assess the services of its ATM card to meet the needs of customers? Through this, the bank continues to have more investment in technology, people and diversification of ATM card related products in order to satisfy not only the needs and increasing demands of traditional customer, but helps to motivate potential customers, especially young people, to see the convenience of using modern means of payment - This research helps customers better understand the ATM card service that they have been using, eliminating the notion that the use of ATM cards is only to withdraw cash at the ATM From there, customers can use ATM card services in the most effective way - Other commercial banks that are issuing ATM cards or preparing to market this service may use this research as a reference in their development strategy - Other commercial banks that are issuing ATM cards or preparing to market this service may take this research as a reference in their development strategy 1.6 Structure and content of research topics In addition to the introduction and conclusion, the research topic is divided into five chapters, namely: - Chapter 1: Introduction - Chapter 2: Literature review - Chapter 3: Methodology - Chapter 4: Result - Chapter 5: Conclusion and solution Page Vo Huynh Duc CHAPTER II: LITERATURE REVIEW 2.1 Payment card overview: 2.1.1 Some basic concepts about payment cards: A payment card is a non-cash payment that the cardholder can use to withdraw cash or pay for goods or services at places where cards are accepted 2.1.2 Card classification: At present, there are following cards in the domestic payment market: - Debit card: For this card, the user does not have to deposit money into the bank account to ensure payment card The limit of the debit card is the balance on the cardholder's deposit account at the bank Debit cards usually apply to customers who have regular business relationships - Credit Card: Credit Card is the type of card that the bank gives the customer a loan to use on the card account The limit of the card is also the credit limit that the bank lends to the borrower Credit card applies to customers who qualify for a bank loan - Margin card: This type of card is applied to all customers with a deposit in the account Limit of the main card is the amount deposited by the customer to the account to use for his card 2.2 Utilities when using the card: - For issuing banks: Generate regular income for the bank issued by the annual fee that cardholders have to pay to the bank Recharging the account by cardholders to use the card facilitates banks to mobilize funds from customers' demand deposits In addition, ATMs or card accepting places also contributes to the expansion of the bank's network - For cardholders: When using the card, the cardholder is provided by a bank with a high security payment service and great convenience In addition, when the customer has a balance on the account, if the customer does not use, this balance will be entitled to interest rates of demand deposits The use of credit cards or payment cards ensures the ability to use in multiple currencies, regardless of the foreign currency of any country Page Vo Huynh Duc - For reimbursing bank: With charges such as commercial discounts, cash withdrawal fees, agent fees, reimbursing banks could get a relatively stable revenue In the card payment process, issuers usually open accounts at banks for payment This increases the amount of deposits and deposits for the reimbursing bank - For card payment accepting places: By providing advance credit to customers, the bank helps customers spend more than they can afford, which is a boost to customer purchasing power, and this will lead to higher consumer spending The service of the card accepting places is soaring When accepting payment cards, sellers are able to minimize the costs of cash management such as preservation, counting, remitting into bank accounts, enjoying bank preferences on credit, payment service 2.3 Process of issuance, payment by ATM card The process of issuing card payment is as follows: Figure 1: Card payment process (1) The customer shall make a written request for payment card issuance to the Bank (2) When the bank agrees, the card issuing bank shall carry out procedures to issue the card for customers to use and instruct the customer how to use the card (3) The cardholder presents the card to the receiver when purchasing goods or services Card receivers put into the card payment machine, the machine automatically record the payment amount and print the payment receipt (4) The person who receives the card returns the card giving the payment slip to Page Vo Huynh Duc PT02 21.4561 PT03 21.3275 PT04 21.0819 PT05 21.2924 PT06 21.3333 PT07 21.3977 Cronbach’s Alpha = 921 HL01 7.5088 HL02 7.3333 HL03 7.4269 Cronbach’s Alpha = 936 21.261 19.492 21.029 19.326 20.294 21.335 0.709 0.810 0.770 0.840 0.751 0.642 0.913 0.903 0.908 0.899 0.909 0.920 3.746 3.294 3.270 0.832 0.911 0.869 0.936 0.873 0.909 Table 4.1: Results of the Cronbach's alpha coefficient analysis 4.1.2 Factor analysis: Factor analysis is an analytical technique for minimizing and summarizing data that is useful for identifying the sets of variables that are essential for the research problem The relationship between the groups of variables that are related to each other is considered in the form of a number of fundamental factors Each observation variable is calculated as a ratio, called factor loading This coefficient tells the researcher how each measurement variable will "belong" to the factors In factor analysis, it is required that the KMO (Kaiser-Meyer-Olkin) coefficient has a large value (0.5