SECTION 1
PROJECT PROPOSAL
Service Quality of Banking - A Case Study in Vietnamese Retail banking
PROBLEM STATEMENT
In the two decades, the Vietnamese banking industry, especially in retail banking sector, a pattern plainly in evidence is that Vietnam witnessed a sharp climb in quantity of opening checking account, cards, and substantial increasing in economics transaction through the bank (State Bank of Vietnam, 2014). Vietnam, as an Asian country and developing economy, has very specific characteristics differentiating it from other contexts used in previous studies to examine the interrelationship between service quality, customer satisfaction, and customer loyalty. Firstly, for historical reasons, the Vietnamese economy has been experiencing a transformation from a state-controlled economy to a market-driven economy since 1986 (State bank of Vietnam). Because of this fact, the premises of competitive advantages, and relationship marketing in particular, are new practices for both firms and clienteles in Vietnam (Ngo Vu & Nguyen Huan, 2016). Secondly, Vietnamese retail banking industry in particular is very different from is counterparts in Western countries or developed economies with regard to how banks compete with each other.
Vietnamese banks are considered one of the important areas to invest in source for investing, besides their traditional role of a safe place to save money (Ngo Vu & Nguyen Huan, 2016). Hence, Vietnamese banks compete largely by means of the prices of their services or interest rates for deposit and loans. Although in recent years Vietnamese banks have been heading towards building a maintainable competitive advantage via the quality of their products or services and close relationship with their customers, this shift needs time and price is still the top priority of most of the banks for competing (Ngo Vu & Nguyen Huan, 2016). Finally, the increased competition in with not only domestic firms, but international organisations, has grown up. So, various firms are forcing to review their service quality strategy because the highly educated customers and rise in standard living.
Many business companies should concentrate on more efforts to retain existing consumers rather than acquiring new customers. The reason is that the acquiring cost for new customers is higher than the retaining cost for existing customers (Nagabhushanam, 2013; Ya-Ling & Shari, 2013).
Service quality is one of significant factor that banks must concentrate on achieve their goals (Ngo Vu & Nguyen Huan, 2016; Razminia, et al., 2016; Ya-Ling & Shari, 2013 ). Such investigation is necessary if relationship quality is to be meaningful managed in the retail banking industry. Moreover, maximum customer satisfaction via excellent service quality can lead banks to achieve effective cost control and greater market value (Ya-Ling & Shari, 2013).
RESEARCH OBJECTIVES / QUESTIONS
The goal of this project is to identify the interrelationship between service quality and customer satisfaction. A significant consequence of service quality is to achieve the firm's goals in the retail banking sector in Vietnam. Another aim of this project is to investigate the role of service quality in increasing the profitable strategy of banking.
To be more specific, this project purposes to answer the research questions following:
Q 1: What do you mean by service quality?
Q 2: How does service quality relate to customer satisfaction and loyalty?
Q 3: Why does service quality play an important role in increasing bank's performance?
Q 4: How does the service quality affect the target business?
Q 5: Whether (or not) there is a link between service quality and bank's profits?
Q 6: How is the service quality's index measured?
These questions above will help to achieve the aims of this assignment, which are:
- The correlation between service quality and customer satisfaction
- Analysing the significant role of service quality in banking activities for sustainable development.
- Classifying whether or not economic effects of service quality impact on banks' profit.
JUSTICATION OF THE PROJECT
Significantly, the theory of association quality has been found to be core of sustaining a strong relationship between purchasers and wholesalers (Lewis & Soureli, 2006). In retail banking, the development of a strong, high quality customer relationship improves customer satisfaction and their loyalty is continuing to be argued in researching areas (Lewis & Soureli, 2006). Consumers are more focused on their benefit and have higher financial knowledge of services and products, which become more and more similar between all banks (Dinh & Pickler, 2012). In addition, customers will easily move to another bank if they receive the worse service, or they do not feel happy and comfortable with their providers (Dinh & Pickler, 2012). So relationship quality influences "repurchase intention, cross-buying intention, recommendation behaviour, and reduced switching behaviour to competitor offerings" (Tung & Carlson, 2013, p139).
Most of the previous research studies about impacts of service quality have been conducted in Western and developed countries, which are generally recognised as having numerous differences compared to Eastern and developing countries in terms of cultures and customers' need (Ngo Vu & Nguyen Huan, 2016). This proposal will be undertaken with the benefit of in-depth literature review and feedback from customers of specific chosen retail banking in Vietnam (via surveys and questionnaires). Those responses will inform about the significant impacts of service quality for either economic benefit or business survival. It also helps the managers in Vietnamese retail banking to develop their long term strategy for sustainable development.
From these circumstances, this research proposal produces some benefits when conducting as follows:
- It will support those who wish to understand how service quality can affect banking's performance as well as their profits.
- This research proposal will also help widen the understanding of the relationship between service quality and customer satisfaction.
- Banking managers can correlate between service quality and consumer's loyalty to decide the strategy for their sustainable development within the intense competition of the financial market.
- The outcomes were obtained from this research proposal will be of use to business owners, researchers and policy makers.
- This proposal will be extremely helpful to the retail banking in Vietnam as they can understand the effects of service quality and customer satisfaction, and whether or not there is a correlation between service quality and banking profitability. This, in turn will help them be better prepared and pro-active in making a quality strategy in the future.
SECTION 2
THEORETICAL FRAMEWORK AND RESEARCH HYPOTHESISRESEARCH METHODOLOGY
For analysing the purpose of the research proposal, various methodologies were undertaken in an efficient way. Some of the research methodologies as follows:
Literature review
The secondary data which includes the in-depth study of the relevant literature, was obtained from books, journals articles, Google scholars and researches which is the beneficial resources from various professors and researchers. The content of these documents were directed to analyse and investigate the relationship of service quality and customer's satisfaction which will lead consumer loyalty, and the influence of quality in the success of service firms not only on profit but also on sustainable development.
Survey / questionnaires (Data collection method):
The data and the information will be collected from the various sources and different surveys will be scrutinised, so that this proposal can be known as the gross job flow that are responded for the main problems. The various information sources can be used as the primary data collection by using the questionnaire. As far as the secondary data is concerned, it is also beneficial to provide a solution for the research issue.
The questionnaire will be prepared for the purposes of clarifying the service quality of the bank, located in Vietnam using surveymonkey website, which allows the survey to be distributed two languages: English and Vietnamese. The model for this questionnaire have been provided in the Appendix A and B to obtain customer's experiences on Vietnamese retail banking service.
Face-to-face technique: the main advantage of this technique is that quickly and clearly response, guarantee the accurate manner (Sekaran & Bougie, 2016).
However, this method also includes some drawback such as the cost incurring when the various sampling need to conduct, takes personal time, may has some bias.
Data analysis Method: Qualitative and Quantitative are the two main methods for data analysing. Quantitative analysis will be using diagrams such as histogram, pie chart, bar chart.
- Quantitative analysis: quantitative analysis requires a clean and structured database as a first and significant stage. Descriptive statistics can be applied for analysing quantitative data, for example testing goodness of fit, chi-square, anova, manova, and so on.
- Qualitative analysis: the use of the concept from literature can create the findings and the correlation could be investigated based on the respond from online forums and surveys.
Population of this project may include 300 customers from the five biggest Vietnamese retail banking. With the 200 samples for online questionnaire, and 100 samples for the survey by using face-to-face interview technique.
The research proposal may need to consider all the methodologies in a mixture for carrying out the research in the research appropriately. Hence, one can arrive at a correct solution for the identified problem statement. By analysing the responses which were obtained via the different surveys and the examination of the literature review, the data will be organised in the proper way.
SECTION 3
ORGANISATION OF THE STUDY
The organisation of the study is outlined below, is mentioned through some key chapters:
Chapter one will be the Research Proposal which have been mentioned in the assignment
- Chapter two will define and analyse the case study of the service quality in retail banking in general, particular in Vietnam
- Chapter three will contain the research methodology such as literature review, survey online for collecting data
Chapter four will report the Gantt and Estimated Budget of the research proposal
- Chapter five will conclusion in brief about the significant investigation and findings for consideration on the way banks should develop strategy in the long term.