RELATIONSHIP AMONG CUSTOMER PERCEIVED VALUE, SATISFACTION, LOYALTY AND SWITCHING COST IN INTERNET BANKING SERVICE

Transcription

1 VIETNAM NATIONAL UNIVERSITY HOCHIMINH CITY INTERNATIONAL UNIVERSITY SCHOOL OF BUSINESS RELATIONSHIP AMONG CUSTOMER PERCEIVED VALUE, SATISFACTION, LOYALTY AND SWITCHING COST IN INTERNET BANKING SERVICE In Partial Fulfilment of the Requirements of the Degree of BACHELOR OF ARTS in BUSINESS ADMINISTRATION Student s name: NGUYEN HO THANH TUNG (BABAIU10042) Advisor: NGUYEN MINH TUAN, DBA. HoChiMinh City, Vietnam 2014

2 RELATIONSHIP AMONG CUSTOMER PERCEIVED VALUE, SATISFACTION, LOYALTY AND SWITCHING COST IN INTERNET BANKING SERVICE APPROVED BY: Advisor APPROVED BY: Committee DBA. Nguyen Minh Tuan Ph.D. Pham Hong Hoa, Chairman MS. Mai The Kien, Secretary DBA. Nguyen Minh Tuan MBA. Kieu Anh Tai THESIS COMMITTEE

3 ACKNOWLEDGEMENT First of all, I would like to thank to my advisor with my sincerity DBA. Nguyen Minh Tuan for his suggestion in the time I started doing thesis. From that, I could have enough knowledge and idea to complete my thesis. His comments and support had helped me a lot in the past time. Moreover, his support about statistics process and using Amos software helped me overcome difficulties. Thanks to his advices and support, I could complete my thesis. Secondly, I would like to thank to professors and lecturers at School of Business Administration, International University for what they taught and advised me when I studied in International University. Thanks to what I learned from them, I could apply it appreciably to my thesis. I would like to thank my supporters (my family and my friends) who support and encourage me both physically and mentally. Their advices and suggestion helped me a lot during my thesis process. In particular, I would like to thank to Mr.Ho Hong Thach, Mr.Tran Nhat Anh Duy and Miss.Le Nguyen Kieu Trinh for their support when I conducted questionnaire for this research. Ho Chi Minh City, May i

4 TABLE OF CONTENTS ACKNOWLEDGEMENT... i LIST OF TABLES... iv LIST OF FIGURES... vi ABBREVIATIONS... vii ABSTRACT... viii CHAPTER 1: INTRODUCTION... 1 I. Background... 1 II. Research Objectives... 2 III. Significance of the study... 3 IV. Scope... 3 V. Limitation... 3 CHAPTER 2: LITERATURE REVIEW... 4 I. Concepts and theoretical framework Customer Loyalty Customer Perceived Value Switching Cost Customer Satisfaction... 6 II. Research model... 7 CHAPTER 3: RESEARCH METHODOLOGY... 8 I. Research Framework... 8 II. Research Design Quantitative approach Instrumentation ii

5 CHAPTER 4: DATA ANALYSIS AND DISCUSSION I. Sample Demographics II. Descriptive Statistics Customer Service Order Fulfillment Ease to Use Product Portfolio Security and Privacy Customer Perceived Value Customer Loyalty (Recommend) Customer Loyalty (Patronage) Switching Cost III. Reliability Test...32 IV. Factor Analysis...36 V. Confirmatory Factor Analysis...37 VI.Multiple-group Analysis...40 CHAPTER 5: CONCLUSION AND RECOMMENDATIONS I. Conclusion II.Recommendation III.Limitations REFERENCES APPENDIX iii

6 LIST OF TABLES Table 4.1: GENDER Table 4.2: AGE Table 4.3: JOB Table 4.4: MONTHLY INCOME Table 4.5: BANK THAT RESPONDENTS USE THE MOST Table 4.6: USAGE FREQUENCY Table 4.7: INTENDED USE Table 4.8: Descriptive Statistics of Customer Service Table 4.9: Descriptive Statistics of Order Fulfillment Table 4.10: Descriptive Statistics of Ease to Use Table 4.11: Descriptive Statistics of Product Portfolio Table 4.12: Descriptive Statistics of Security and Privacy Table 4.13: Descriptive Statistics of Customer Perceived Value Table 4.14: Descriptive Statistics of Customer Loyalty (Recommend) Table 4.15: Descriptive Statistics of Customer Loyalty (Patronage) Table 4.16: Descriptive Statistics of Switching Cost Table 4.17: Cronbach s Alpha before EFA iv

7 Table 4.18: KMO and Bartlett's Test Result Table 4.19: Measurement Model Analysis Table 4.20: Goodness-of-fit Measures (CFA) Table 4.21: Goodness-of-fit Measures (SEM) Table 4.22: Estimates of Structural Path Coefficients Table 4.23: Multiple-group Analysis v

8 LIST OF FIGURES Figure 2.1: Proposed research model... 7 Figure 3.1: Framework of the linear structural relation... 8 Figure 4.1: Respondents gender in percentage Figure 4.2: Respondents age in percentage Figure 4.3: Respondents job in percentage Figure 4.4: Respondents monthly income in percentage Figure 4.5: Respondents bank that they use the most in percentage Figure 4.6: Respondents usage frequency in percentage Figure 4.7: Respondents intended use in percentage Figure 4.8: Covariance structural model vi

9 ABBREVIATIONS SA: Customer satisfaction CS: Customer service OF: Order fulfilment EE: Ease to use PP: Product portfolio SP: Security and Privacy VA: Customer perceived value LOR: Customer loyalty (recommend) LOP: Customer loyalty (patronage) SW: Switching cost vii

10 ABSTRACT The aim of this research is to examine the relationship among customer perceived value, satisfaction, loyalty and switching cost in internet banking service. Based on previous research, a conceptual framework was developed to examine the relationship among customer perceived value, satisfaction (measuring by five factors: customer service, order fulfilment, ease to use, product portfolio and security and privacy), loyalty (recommend and patronage) and switching cost. The questionnaire was conducted in Binh Duong province with 373 respondents. This result showed customer service, ease to use and product portfolio have effect with customer satisfaction and there were relationships between customer perceived value and customer satisfaction, customer perceived value and customer loyalty (patronage), customer satisfaction and customer loyalty (patronage). However, switching cost has no relationship with customer loyalty. This research examine the relationship among customer perceived value, satisfaction, loyalty and switching cost to have some strategies to retain customer in internet banking service in the situation there are many banks offer this kind of service. Keywords: Customer service, Order fulfilment, Ease to use, Product portfolio, Security and Privacy, Customer satisfaction, Customer perceived value, Customer loyalty (recommend), Customer loyalty (patronage), Switching cost. viii

11 CHAPTER I INTRODUCTION This introduction section essentially focuses on the background of our study and the reasons that our group found on this subject. It also stated research purpose as well as the limitation and structure of the study. I. BACKGROUND Nowadays, living standard of people in large cities such as Ha Noi and Ho Chi Minh city is more and more increasing. People require more convenient and safe in services that they use and banking services are really necessary to be safe and convenient. In recent years, banking system in Vietnam had some strong changes about scale and quality of banking services. They had some services that can help their customers more convenient and flexible such as home banking, phone banking, mobile banking, internet banking, etc. Among them, internet banking was the service that was used more. Internet banking was used in almost any place with a device that can connect internet and any time. It includes some services such as managing account information and transaction statement, account within the bank or the interbank, online bill payment (electricity, water, internet, mobile phone), remittance received by ID / Passport: in and out system, recharging mobile phone or games online, etc. According to M.A Trinh Thanh Huyen, quality and quantity of banking services has improved but they still has some limitations (vietinbank.com, 2012). Hence, investigating into the service environment and evaluate the 1

12 relationship among customer perceived value, satisfaction, loyalty and switching cost to build up an appropriate strategy for internet banking service. The present study aims to investigate the relationship among customer perceived value, satisfaction, loyalty and switching cost in internet banking service. The model in this research tries to explain how it work and how this model apply to the market. Traditionally, some previous researches study about customer loyalty (Juy-Shen Chiou, 2004, Serkan Aydin et al., 2005), customer satisfaction (Eugene W.Anderson and Mary W.Sullivan, 1993, Roger Hallowell, 1996) and service quality (Dina Ribbink et al., 2004). Moreover, some researchers also had some studies about internet banking service (Margaret Tan and Thompson S.H.Teo, 2000, Bomil Suh and Ingoo Han, 2003). There have been very limited studies that research about the relationship among customer perceived value, satisfaction, loyalty and switching cost (Zhilin Yang and Robin T.Peterson, 2004, Shun Yin Lam et al, 2004). II. RESEARCH OBJECTIVE In this paper, the relationship among customer perceived value, satisfaction, loyalty and switching cost is examined to know the importance of this relationship. From that, managers can have some strategies that can grow up their business. To accomplish that, three objectives are given: To examine the factors that affect customer satisfaction in internet banking service. To measure the relationship among customer perceived value, satisfaction, loyalty and switching cost in internet banking service. To have a strategy that can improve internet banking service. This study has three main questions for each three objectives that are raised to direct this study: What are the factors that can affect customer satisfaction in internet banking service? 2

13 What are the relationship among customer perceived value, satisfaction, loyalty and switching cost in internet banking service? What are the strategies that can improve the internet banking service to retain customers? III. SIGNIFICANT OF THE STUDY Customers are the best thing that all organizations focus on. They always have many strategies to develop and retain the relationship with their customers. The main objective of this study is examining what are the important things that can develop and retain the relationship with their customers and then they will have some specific strategies for internet banking service. IV. SCOPE This study researches about the relationship among customer perceived value, satisfaction, loyalty and switching cost in internet banking service. The communication methods and data collection will be conducted in Binh Duong Province. This study result are expected to show the relationship among customer perceived value, satisfaction, loyalty and switching cost in internet banking service.and it can help internet banking service managers in banks can have some good strategies to retain customers. V. LIMITATION The first limitation is the sampling methods. This research was conducted in Binh Duong Province and mainly on the people who use internet banking service. The other limitation is lack of time and experience of the researchers, the moderating effect of switching cost are not mentioned in this research and lack of ability to access the customers and some problems during the researching process. 3

14 CHAPTER II LITERATURE This part will provides the definitions, basic describing some main concepts which are used in this research such as service quality, customer trust, customer satisfaction and customer loyalty, and the model that apply along this study. I. DESCRIBE MAIN CONCEPTS 1. Customer loyalty Customer loyalty can be defined as an attitude and behavior (Jacoby and Kyner, 1973). Reicheld and Sasser (1990) examined that customer loyalty bring to many benefit for a organization. When customers were loyal, the customer-price sensitivity is lower; organization could decrease the cost that they had to pay with close customers and decrease cost to get customers. According to Shun Yin Lam (2004), customer loyalty is evaluated by two dimensions: recommend and patronage based on the theory of Zeithaml et al. (1996). Customer 4

15 loyalty (recommend) means that after customers satisfy about the service of this firm, they will recommend or introduce for other people know this service and the other people can start using this service through their recommend. Customer loyalty (patronage) means that after customers satisfy with this service, they may continue using this service or using more services of this firm. The difference between them is that customer loyalty (recommend)will have affect to the other people, whereas with customer loyalty (patronage), customers will express their loyalty by theirself. 2. Customer perceived value Holbrook (1994) said that customer perceived value was the fundamental basis for all marketing activity. In marketing activity, customer perceived value is an important factor that can affect a lot of other factors and level of customer perceived value may change many things such as customer intention, customer loyalty, customer satisfaction, etc. Many firms around the world based on this factor to change customer behavior about these firms. Heskett et al. (1994) suggested that customer perceived value was the differences between get and give. In many fields of business, get and give are really important with customers when they use any products/services. They always have the comparison on what they must to pay and what they can receive with their alternative firms. Their decisions depend a lot on values that customers can receive (Oliver & DeSarbo, 1988). Anderson, E.W et al. (2000) proved that between customer perceived value and customer satisfaction has a positive impact. JJ Cronin Jr et al. (2000) also mentioned on the relationship between customer perceived value and customer satisfaction. However, he applied it in areal case, it was in service environments. Hence, the hypothesis about the impact of customer perceived value on customer satisfaction is developed: H1: There is a positive impact of customer perceived value on customer satisfaction. According to GHG McDougall et al. (2000), there is a positive effect of customer perceived value on customer loyalty. Like GHG MCDougall, D.Sirdeshmukh et al. (2002) also proved that customer perceived value and customer loyalty also have a positive relationship.. 5

16 Hence, the hypothesizes about customer perceived value and customer satisfaction are proposed that: H2: There is a positive impact of customer perceived value on customer loyalty (patronage). H3: There is a positive impact of customer perceived value on customer loyalty (recommend). 3. Switching cost According to Jones et al. (2000), switching cost affected to customer perception. Switching cost included time, cost and effort of customers when they have to switch to another firms. Andreason (1982) said that switching cost affected a lot to customer loyalty. The level of competitive and switching cost between firms makes customers have more choices to choice the firm that suit with their need. Switching cost is low that can affect to customer intention. In the research in 1998, Heide and Weiss also examined the relationship between switching cost and customer loyalty through money, time and effort of customers when moving to another provider. Therefore, the hypothesis about the impact of switching cost on customer loyalty is proposed that: H4: There is a positive impact of switching cost on customer loyalty (patronage). H5: There is a positive impact of switching cost on customer loyalty (recommend). 4. Customer satisfaction Anderson, Fornell and Mazvancheryl (2004) defined that customer satisfaction is the overall evaluation of the customers based on time and experience when they purchase and use a product or service. Satisfaction is one driver of recommend and repurchases intentions, Reichheld (1996) said that. When customers can receive what they expected when they buy or use a service/product, customers is most likely to be satisfied. Customer satisfaction had an important role in improving and increasing customer loyalty to help retaining customers (Yee et al., 2013). Rust and Zahorik (1993) showed the importance of customer satisfaction for the success of a firm with their products/services because it can help them retain customers and increase 6

17 competitive capacity. According to Zhilin Yan et al. (2004), the measurement scale of customer satisfaction in internet business included five factors: customer service, order fulfillment, ease to use, product portfolio and security and privacy. These factors are used to evaluate satisfaction level of customers. In the research of Oliver (1999), he proved the theory that customer satisfaction had a positive impact on customer loyalty. Moreover, Reichheld et al. (2000) applied the relationship between customer satisfaction and customer loyalty in the case of Internet e-commerce. Hence, the hypothesis will be: H7: There is a positive impact of customer satisfaction on customer loyalty (recommend). H6: There is a positive impact of customer satisfaction on customer loyalty (patronage). II. CONCEPTUAL FRAMEWORK Figure 2.1: Proposed research model (Source: Shun Yin Lam et al. (2004)) 7

18 CHAPTER III METHODOLOGY This chapter presents the methodology about how we collected and analyzed data to find out the answer for each research question. I. RESEARCH FRAMEWORK This research framework of this study is based on literature review that shows the relationship between customer perceived value, satisfaction, loyalty and switching cost. Figure 3.1: Framework of the linear structural relation 8

19 II. RESEARCH DESIGN The present study is purely quantitative in nature; therefore, survey is adopted as the main approach since this is considered popular and faster technique. 1. Quantitative approach Quantitative approach is the way that researchers develop knowledge through hypothesis and questions, using tools and observation. In the research, how many, how much, how often, who and when are the questions that quantitative approach will answer. a. Questionnaire Design In the research, questionnaire survey use to find out and develop the evidence about the relationship among customer perceived value, satisfaction, loyalty and switching cost.. Questionnaire survey is used to collect data from customers and it must be clearly and easy to understand to avoid misunderstanding. Questionnaire includes two parts: the first part asks customers about their personal information and the second part asks them some question about customer perceived value, satisfaction, loyalty and switching cost when they use internet banking service. To assess this survey, customers tick on the 5-point Likert scale that was developed by Rensis Likert. The scale ranges from Totally disagree, denoted as 1, Disagree as 2, Neutral as 3, Agree as 4, and Totally agree as 5. b. Sampling Selection Because of accessibility reasons, this study limited the population in Binh Duong Province. The total sample consisted of more than three hundred people (N=373) who used to use or are using internet banking service because three hundred sample sizes can have a objective assessment. According to Comfrey & Lee (1992), a sample size is very poor with 50, poor with 100, fair with 200 and good with 300. Staff in Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) Binh Duong Branch, Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) Binh Duong Branch, Vietnam Bank for Agriculture and Rural Development (Agribank) Di An transaction office and Investment and Industrial Development Corporation (Becamex IDC) help to conduct this research. Respondents will conduct the 9

20 questionnaire right in the bank when they go to the bank to do business with this bank and in the office (for Becamex IDC). c. Pre-pilot Test Pilot test is the step before collecting data. It mentions to the procedures and tools to detect weakness in design and instrumentation and to provide proxy data for selecting a probability sample. In this study, pilot test was conducted with 20 internet banking service users to check these questions whether they are clarify and meaningful or not. Fink (2003b in Saunders et al., 2007) suggested that 10 pilot test is the minimum. Each respondent was told about the purpose of the questions and assured of anonymity before filling in questionnaire. After testing, these questionnaires were confirmed to be clear and easy to understand. It must be clarify and not affect to the other relevant items. d. Data Collection Primary data is the main source for this study when the quantitative method was conducted. It mentions to the data that this study have through data observing or directly collecting from survey, observation or experimentation. The questionnaires were conducted by survey to get primary data. Survey was conducted by sent correctly to customers who use internet banking service at Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) Binh Duong Branch, Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) Binh Duong Branch, Vietnam Bank for Agriculture and Rural Development (Agribank) Di An transaction office and Investment and Industrial Development Corporation (Becamex IDC) Binh Duong Province with the help of staff in these companies. Respondents were required to do this survey as soon as possible and the completely survey will be collected right away. Moreover, through some related theories and researches, primary data may be also collected with carefully review. e. Data Analysis SPSS and AMOS was the statistical software that was used to analyze data such as demography, reliability, factors and relations. The relation was expressed by Pearson to discuss 10

21 about the relationship among service quality, customer satisfaction, customer trust and customer loyalty. Reliability analysis: it mentions to the level that data analysis will have the suitable result. Reliability is mentioned as the percentage of the inconsistency of the answer in the survey. Alpha Cronbach developed from 1951 and was proved as the most useful tool to analyze reliability. Factor analysis: including Exploratory Factor Analysis (EFA) and Confirmatory Factor Analysis (CFA). Factor analysis is conducted to test the relationship among variables and test whether the research model is suitable with market or not. The software Amos 20.0 was used. Structural equation modeling analysis: it is used to examine the proposition of hypothesis and the conclusion was made. 2. Instrumentation a. Customer perceived value In the research of Zhilin Yang and Robin T.Peterson (2004), they adapted questions of customer perceived value from Levesque and Mcdougall (1996) including five-item scale: compared to alternative companies, the company offers attractive product/service costs, compared to alternative companies, the company charges me fairy for similar products/ services, compared to alternative companies, the company provides more free services, comparing what I pay to what I might get from other competitive companies, I think the company provided me with good value, comparing what I pay to what I might get from other competitive companies, I think the company provides me with good value. In this research, internet banking service is apply and these items become: compared to alternative banks, this bank offers attractive product/service costs, compared to alternative banks, this bank charges me fairy for similar products/ services, compared to alternative banks, this bank provides more free services, comparing what I pay to what I might get from other competitive banks, I think this bank provided me with good value, comparing what I pay to what I might get from other competitive banks, I think this bank provides me with good value b. Customer satisfaction 11

22 In the present study, Zhilin Yang and Robin T.Peterson (2004) developed five factors affecting customer satisfaction: customer service, order fulfillment, ease to use, product portfolio and security/privacy. In customer service, he developed four-item scale: company employees have the knowledge to answer my questions, company employees properly handle any problems that arise, the contact employees understand my specific needs, employees address my complaints in a friendly manner. These items are adapted in this research and the new scale: company employees have the knowledge to answer my questions, bank employees properly handle any problems that arise, the contact employees understand my specific needs and employees address my complaints in a friendly manner In order fulfillment, he developed four-item scale: the company performs the service correctly the first time, my online transaction is always accurate, the company keeps my records accurately, the products or services I ordered were delivered to me within the time promised. The new scale when they are adapted in this research: this bank performs the service correctly the first time, my online transaction is always accurate, the company keeps my records accurately, the products or services I ordered were delivered to me within the time promised. In ease to use, he developed four-item scale: using the company s web site requires a lot of effort, all my purchasing needs are included in the menu options, the organization and structure of online content is easy to follow, the company provides most of purchasing functions that I need. After adapting, the new scale of this dimension is: using the bank s web site requires a lot of effort, all my purchasing needs are included in the menu options, the organization and structure of online content is easy to follow In product portfolio, he developed two-item scale: the company provides wide ranges of product/service packages, the company provides products/services with the features I want. The new scale of product portfolio after adapting is: this bank provides wide ranges of product/service packages, this bank provides products/services with the features I want. 12

23 In security and privacy, he developed three-item scale: I feel the risk associated with online transaction is low, the company will not misuse my personal information, I feel safe in my online transaction. The scale after adapting is: I feel the risk associated with online transaction is low, this bank will not misuse my personal information, I feel safe in my online transaction. A five-point Likert scale ranking from Totally Disagree (5) to Totally Agree (1) was used to measure members satisfaction level c. Switching cost In this dimension, Zhilin Yang and Robin T.Peterson (2004) developed three-item scale: It takes me a great deal of time and effort to get used to a new company, It costs me too much to switch to another company, in general it would be a hassle switching to another company. Based on this scale, this research adapt it in the case of internet banking service and it becomes: : It takes me a great deal of time and effort to get used to a new bank, It costs me too much to switch to another bank, in general it would be a hassle switching to another bank. A fivepoint Likert scale ranking from Totally Disagree (5) to Totally Agree (1) was used to measure members satisfaction level. d. Customer Loyalty In the present study, the customer loyalty dimension refers to express attitudinal and behavioural loyalty of the customers Zhilin Yang and Robin T.Peterson (2004) suggested six statements to scale customer loyalty. With customer loyalty (recommend), it included four statements: I say positive things about the company to other people, I would recommend the company to those who seek my advice about such matters, I would encourage friends and relatives to use the company, I would post positive messages about the company on some Internet message board. About customer loyalty (patronage), two-item scale was developed: I intend to continue to do business with the present company, I intend to do more business with the present company. Shun Yin Lam (2004) also mentioned about customer loyalty (patronage), two-item scale was: My company considers digital service provider as its first choice for courier services, My company will do more business with digital service provider in the next few 13

24 years. However, I intend to do more business with the present company and My company will do more business with digital service provider in the next few years had the same meaning and this research choose one out of this two items. After adapting this scale in the case of internet banking, the new scale of customer loyalty is: : I say positive things about this bank to other people, I would recommend this bank to those who seek my advice about such matters, I would encourage friends and relatives to use this bank, I would post positive messages about this bank on some Internet message board and I intend to continue to do business with the present bank, I intend to do more business with the present bank, I consider the bank as the first choice for internet banking service. A five-point Likert scale ranking from Totally Disagree (5) to Totally Agree (1) was used to measure members satisfaction level. 14

25 CHAP IV DATA ANALYSIS AND DISCUSSION I. SAMPLE DEMOGRAPHICS Demographic data is the generally information that can describe characteristics of the respondents who take part in answering questionnaire of this research. In this study, there are seven questions that were used to determine: gender, age, working field, monthly income, which bank that was used the most, usage frequency and intended use. A total of 373 questionnaires were conducted by both online and offline. Out of them, 304 questionnaires were valid (81.5%) because they said yes with the first questions: Up to date, have you ever used internet banking service? and 69 questionnaires were no valid (18.5%) because they said no. The final data was analyzed by SPSS software. Table 4.1: Gender Frequency Percent Valid Percent Cumulative Percent Male Valid Female Total

26 Figure 4.1: Respondents gender in percentage The pie chart shows that the percentage of male and female respondents who took part in this research. Male takes 47.4% (144 respondents) and female takes 52.6% (160 respondents) out of 304 respondents. Through this chart, female are more interested than male in internet banking service. Tables 4.2: Age Valid Frequency Percent Valid Percent Cumulative Percent Under

27 Above Total Figure 4.2: Respondents age in percentage Through this pie chart, the percentage of age is described by four ranges: under 20, 20-30, and above 40. The range of respondents who are between 20 and 30 is the largest range with 57.2% (174 respondents). The next group is the group of respondents who are between 30 and 40 with 28% (85 respondents) and less than 20 group with 8.9% (27 respondents). The smallest group in this research is above 40 group with only 5.9% (18 respondents). 17

28 Table 4.3: Job Frequency Percent Valid Percent Cumulative Percent Student Officer Valid BusinessPerson Others Total Figure 4.3: Respondents job in percentage 18

29 In term of job, most of respondents in this study are officer with 51.3% (156 respondents). The next groups are business person with 20.4% (62 respondents) and student with 17.8% (54 respondents). The respondents who are work the other jobs is the group having the lowest percentage with 10.5% (32 respondents). Table 4.4: Monthly income Income Frequency Percent Valid Percent Cumulative Percent Noincome Under5million Valid 5-10million Above10million Total

30 Figure 4.4: Respondents monthly income in percentage In this study, respondents who have the monthly income under 5 million VND is the largest group with 37.5% (114 respondents). A little bit lower group is the respondents who have the monthly income between 5 and 10 million VND with 32.6% (99 respondents). The respondents who have no income takes 17.1% (52 respondents) and the smallest group with the respondents who has monthly income more than 10 million VND with 12.8% (39) respondents. Table 4.5: Bank that respondents used the most Frequency Percent Valid Percent Cumulative Percent 20

31 Vietcombank Vietinbank Agribank BIDV Valid ACB Eximbank VPBank Others Total Figure 4.5: Bank that respondents used the most in percentage 21

32 In terms of bank that was mainly used with the respondents, Vietcombank is the bank that was used the most with 23.4% (71 respondents). The other bank that was used by the respondent: Vietinbank 18.1% (55 respondents),, Agribank 14.1% (43 respondents), BIDV 10.2% (31 respondents), ACB 7.9% (24 respondents), Eximbank 6.6% (20 respondents), VPBank 4.3% (13 respondents) and the other bank with 15.5% (47 respondents). Through this chart, respondents tend to use the big banks with their credibility and reputation like Vietcombank or Vietinbank. Table 4.6: Usage frequency Valid Frequency Percent Valid Percent Cumulative Percent Frequently Occasionally Rarely Total

33 Figure 4.6: Respondents usage frequency in percentage The figure shows that the usage frequency of respondents with internet banking service. The respondents who use it occasionally is the biggest group with 48.4% (147 respondents), the lower group is frequently group with 32.9% (100 respondents) and the lowest gourp is rarely group with 18.8% (57 respondents). Table 4.7: Intended use Valid Frequency Percent Valid Percent Cumulative Percent Remittance Payment

34 AccountInformation BankingInformation Recharging Others Total Figure 4.7: Respondents intended use in percentage The pie chart describes that the intended use of respondents to know which kind of services that they use the most. The figure shows respondents use it for remittance the most with 32.2% (98 respondents). To payment (electricity, water, internet ) takes 24.7% (75 respondents), lookup account information takes 18.4% (56 respondents), lookup banking information (interest 24

35 rates, exchange rates, location ) takes 13.2.% (40 respondents), recharging (mobile phone, games ) takes 7.2% (20 respondents) and to use the other service takes 4.3% (13 respondents). II. DESCRIPTIVE STATISTICS Descriptive statistics are used to explain and describe data in quantitative method. It mentions on mean, standard deviation, minimum value, maximum value and the number of valid questionnaires of one variable in this research. 1. Customer service Table 4.8: Descriptive Statistics of Customer Service Customer service N Min Max Mean Std. Deviation Bank employees have the knowledge to answer my questions.(cs1) Bank employees properly handle any problems that arise.(cs2) The contact employees understand my specific needs.(cs3) Employees address my complaints in a friendly manner.(cs4) Valid N 304 Average The table shows that all four items that are rated have larger mean than 3.6. It means that customers rate customer service of the bank that they use internet banking service quite good and it also means that customers quite satisfy with customer services of that bank. The item CS2 Bank employees properly handle any problems that arise has slightly lower mean than other item in customer service. 25

36 2. Order Fulfillment Table 4.9: Descriptive Statistics of Order Fulfillment Order fulfillment N Min Max Mean Std. Deviation The bank performs the service correctly the first time.(of1) My online transaction are always accurate.(of2) The bank keeps my records accurately.(of3) The services I ordered were delivered to me within the time promised.(of4) Valid N 304 Average Like customer service, order fulfillment also has larger mean than 3.6. The figure shows that customer satisfaction about order fulfillment is quite high. The item OF4 The services I ordered were delivered to me within the time promised is lower than other item. Customers may not satisfy about this item because some problems of the bank about this situation. 3. Ease to Use Table 4.10: Descriptive Statistics of Ease to Use Ease to use N Min Max Mean Std. Deviation Using the bank s wib site requires a lot of effort.(eu1) All of my needs are included in the menu

37 options.(eu2) The organization and structure of online content is easy to follow.(eu3) The bank provides most of functions that I need.(eu4) Valid N 304 Average The mean of ease to use varies from to Three items EU2 All of my needs are included in the menu options, The organization and structure of online content is easy to follow and The bank provides most of functions that I need have quite good mean. The other item EU1 Using the bank s web site requires a lot of effort has the rate only It means that customers do not care too much about this item. 4. Product Portfolio Table 4.11: Descriptive Statistics of Product Portfolio Product portfolio N Min Max Mean Std. Deviation The bank provides wide ranges of service packages.(pp1) The bank provides services with the features I want.(pp2) Valid N 304 Average

38 Both two items of product portfolio have good mean with item PP1 The bank provides wide ranges of service packages rating 3,7401, PP2 The bank provides services with the features I want rating It means that customers are glad with product portfolio. 5. Security and Privacy Table 4.12: Descriptive Statistics of Security and Privacy Security and privacy N Min Max Mean Std. Deviation I feel the risk associated with my online transaction is low.(sp1) The bank will not misuse my personal information.(sp2) I feel safe in my online transaction.(sp3) Valid N 304 Average Comparing with above variables, security and privacy has lower average mean ( ). However, the mean of each item is not low (larger than 3.4). The table shows that customers are comfortable with the security and privacy of the bank of internet banking although banking field has a lot of difficulties and challenges in the current economy. 6. Customer Perceived Value Table 4.13: Descriptive Statistics of Customer Perceived Value Customer perceived value N Min Max Mean Std. Deviation Compared to alternative banks, the bank offers attractive service costs.(va1)

39 Compared to alternative banks, the bank charges me fairy for similar services.(va2) Compared to alternative banks, the bank provides more free services.(va3) Comparing what I pay to what I might get from other competitive companies, I think the bank provided me with good value.(va4) Comparing what I pay to what I might get from other competitive companies, I think the bank provides me with good value.(va5) Valid N 304 Average The average evaluation of customer perceived value is and all items have mean larger than 3.4. Customer perceived value is a really important factor because it may be the reason for customers when they choose internet banking service provider. It can affect to the choosing decision of customers. The item VA5 Comparing what I pay to what I might get from other competitive companies, I think the bank provides me with good value means that customers care it a lot. 7. Customer Loyalty (Recommend) Table 4.14: Descriptive Statistics of Customer Loyalty (Recommend) Customer loyalty (recommend) N Min Max Mean Std. Deviation I say positive things about the bank to other people.(lor1) I would recommend the bank to those who seek

40 my advice about such matters.(lor2) I would encourage friends and relatives to use the bank.(lor3) I would post positive messages about the bank on some Internet message board.(lor4) Valid N 304 Average The mean of all items of customer loyalty (recommend) is larger than 3.3. Through this table, customer loyalty with the bank that they use internet banking service is high. However, the item LOR4 I would post positive messages about the bank on some Internet message board is lower than the others. Customers sometimes do not express their loyalty by posting message about the bank on some Internet message board. Saying positive thing to other people, recommending to the others people and encouraging friends and relatives to use the bank are used by more customers to express their loyalty. It may be because three ways are easy to perform than posting positive messages about the bank on some Internet message board. 8. Customer Loyalty (Patronage) Table 4.15: Descriptive Statistics of Customer Loyalty (Patronage) Customer loyalty (patronage) N Min Max Mean Std. Deviation I intend to continue to do business with the present bank.(lop1) I intend to do more business with the present bank.(lop2) I consider the bank as the first choice for internet

41 banking service.(lop3) Valid N 304 Average Customer loyalty (patronage) has better result than customer loyalty (recommend). The mean varies from to Customer loyalty is quite important with the bank. When customers have the loyalty with the bank, they will consider the bank as the first choice whenever they thin about internet banking service. Customers also continue to do business with the present bank and may be more business if the bank can makes a normal customer become a customer with their loyalty. 9. Switching Cost Table 4.16: Descriptive Statistics of Switching Cost Switching cost N Min Max Mean Std. Deviation It takes me a great deal of time and effort to get used to a new bank.(sw1) It costs me too much to switch to another bank.(sw2) In general it would be a hassle switching to another bank.(sw3) Valid N 304 Average Comparing with these above variables, switching cost has been rated lower with the average mean is Customers may not care about switching cost when they want to switch to another bank and switching cost may not an important issue of customers. 31

42 III. RELIABILITY TEST Reliability test is the way to test the data set of research tool whether it is reliable or not. The Cranbach s Alpha of SPSS 20.0 software is used for the reliability test in this research. In this method, the measurement scale is OK if the Cronbach s Alpha is higher than 0.7. However, Nunnally (1978), said that if the concept being studied is new for respondent, the 0.6 Cronbach s Alpha is OK. The value in corrected item-total correlation must be higher than 0.3 and any variable lower than 0.3 must be eliminated Table 4.17: Cronbach s Alpha before EFA Construct Cronbach s Item-total Items deleted Cronbach s Alpha correlation Alpha after deleting items Customer service.831 None.831 CS1 CS2 CS3 CS Order fulfillment OF1 OF2 OF3 OF4.763 None Ease to use

43 EU1 EU2 EU3 EU EU1 Product portfolio PP1 PP2 Security and privacy SP1 SP2 SP3 Customer perceived value VA1 VA2 VA3 VA4 VA5 Customer loyalty.672 None None None

44 (recommend) LOR1 LOR2 LOR3 LOR LOR2 Customer loyalty (patronage) LOP1 LOP2 LOP LOP1 Switching cost None SW1 SW2 SW a. Customer service Table 4.17 shows the reliability test of customer service. It was measure by four items. All values in corrected item-total correlation are Ok (higher than 0.3) and all values Cronbach s Alpha if item deleted are lower than b. Order fulfillment 34

45 Based on table 4.17, order fulfillment included four items that were used to evaluate order fulfillment variable. Like customer service, all values of order fulfillment satisfy both of two requires. c. Ease to use Table 4.17 describes the reliability test of ease to use that includes 4 items. The EU1 item has corrected item-total correlation is (lower than 0.3) and Cronbach s Alpha if items deleted is (higher than 0.610). Therefore, EU1 item will be deleted. The other items have significant item-total correlation. After deleting EU1, the Cronbach s Alpha is and higher than the first Cronbach s Alpha (0.61). d. Product portfolio Product portfolio included two items in the reliability test. Both values in corrected itemtotal correlation are higher than 0.3. Because product portfolio has only two items, the Cronbach s Alpha if item deleted does not exist. e. Security and privacy From table 4.17, three items of security and privacy do not been deleted because three of them have good corrected item-total correlation (higher than 0.3) and Cronbach s Alpha if item deleted (lower than 0.680). f. Customer perceived value Like security and privacy variable, customer perceived value also have good corrected item-total correlation (higher than 0.3) and Cronbach s Alpha if item deleted (lower than 0.799) that was shows by five items in reliability test in table g. Customer loyalty (recommend) In the following table 4.17, customer loyalty (recommend) is expressed by four items. The item LOR2 has corrected item-total correlation lower than 0.3 (0.246) and Cronbach s Alpha if item deleted lower than (0.645). These items will be deleted and the other three items will be entered to CFA. After deleting LOR2, the Cronbach s Alpha becomes that is higher than the first Cronbach s Alpha (0.553). h. Customer loyalty (patronage) In table 4.17, three items were used to evaluate customer loyalty (patronage). The items LOP1 has good corrected item-total correlation but the Cronbach s Alpha if item deleted is

46 (higher than 0.850), therefore, it will be deleted. The Cronbach s Alpha after deleting LOP1 is that is higher than the first Cronbach s Alpha (0.850). i. Switching cost The reliability test of switching cost was measured by three items in table All values in corrected item-total correlation (higher than 0.3) and Cronbach s Alpha if item deleted are lower than are good. In summary, after deleting these items: EU1, LOR2 and LOP1, Cronbach s Alpha of all variables are good: Customer service (0.831), Order Fulfillment (0.763), Ease to use (0.749), Product portfolio (0.672), Security and privacy (0.680), Customer perceived value (0.799), Customer loyalty (recommend) (0.645), Customer loyalty (patronage) (0.878) and Switching cost (0.715). All of items excepting EU1, LOR2 and LOP1 will be entered in CFA. IV. FACTOR ANALYSIS Factor analysis is the next step after reliability test that is used to test whether the test is valid or not. Kaiser-Meyer-Olkin and Bartlett s tests with Promax rotation will be applied. Exploratory Factor analysis (EFA) will help the model reduce some variables that are not suitable and examine the relationship among variables in this research. An appropriate EFA must have the Sig higher than 0.05, Total Variance Explained need to be over 50% and Eigenvalue of each factor must above 1. After conducting EFA step that was repeated in 4 rounds, the final result of factor analysis process has 13 variables after final round (out of 29 variables in the first round, 20 variables in the second round and 14 variables in the third round). For more detail, see Appendix D. Table 4.18: KMO and Bartlett's Test Result KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy..800 Bartlett's Test of Sphericity Approx. Chi-Square Df 406 Sig

47 V. CONFIRMATORY FACTOR ANALYSIS Table 4.19 showed the measurement model analysis to test the validity of model including four variables: customer perceived value (VA), customer satisfaction (SA), customer loyalty (patronage) (LOP) and switching cost (SW). The formula to calculate composite reliability is: : Composite reliability. : Standardized weights of the observed variables i. : Measurement error variance of observed variables i. p: Variable scale observations. Table 4.19: Measurement Model Analysis CR SW VA LOP SA AVE MSV ASV SW VA LOP SA Note: CR = composite reliability, AVE = average variance extracted. Usually, CR must be higher than 0.7 and AVE must be higher than 0.5. However, according to the research of Chun-Che Huang (2013), he based on the research of Fornell and Lacker that average variance extracted (AVE) was higher than 0.5 but 0.4 could be accept. If AVE was higher than 0.4 and less than 0.5, composite reliability must be higher than 0.6 to ensure the convergent validity. Therefore, in this case, all CR values are higher than 0.6 and all AVE values are higher than 0.4, the measurement model is ensured to continue to do the conceptual model. To examine whether the model fix or not, Chi-square (CMIN), CMIN/df, Comparative Fit Index (CFI), Tucker & Lewis Index (TLI) and Root Mean Square Error Approximation (RMSEA) are used. A model is considered suitable with the market when: CMIN/df is between 2 and 3 (Jöreskog (1969)), GFI, CFI, TLI are all equal or higher than 0.9. RMSEA is good when it is equal or lower than 0.08 and very good if it is equal or lower than