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

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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

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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

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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.

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ii 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 ... 4

1. Customer Loyalty………... 4

2. Customer Perceived Value ... 5

3. Switching Cost ... 6

4. Customer Satisfaction ... 6

II. Research model ... 7

CHAPTER 3: RESEARCH METHODOLOGY ... 8

I. Research Framework ... 8

II. Research Design ... 9

1.Quantitative approach ... 9

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CHAPTER 4: DATA ANALYSIS AND DISCUSSION ... 15

I.Sample Demographics ... 15

II. Descriptive Statistics ... 25

1.Customer Service ... ....25

2.Order Fulfillment ... .26

3.Ease to Use ... 26

4.Product Portfolio ... 27

5.Security and Privacy ... 28

6.Customer Perceived Value ... 28

7.Customer Loyalty (Recommend) ... 29

8.Customer Loyalty (Patronage) ... 30

9.Switching Cost ... 31

III.Reliability Test ...32

IV.Factor Analysis ...36

V.Confirmatory Factor Analysis ...37

VI.Multiple-group Analysis ...40

CHAPTER 5: CONCLUSION AND RECOMMENDATIONS ... 41

I.Conclusion ... 41

II.Recommendation ... 42

III.Limitations ... 43

REFERENCES ... 44

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LIST OF TABLES

Table 4.1: GENDER ... 15

Table 4.2: AGE ... 16

Table 4.3: JOB ... 18

Table 4.4: MONTHLY INCOME ... 19

Table 4.5: BANK THAT RESPONDENTS USE THE MOST ... 21

Table 4.6: USAGE FREQUENCY ... 22

Table 4.7: INTENDED USE ... 23

Table 4.8: Descriptive Statistics of Customer Service ... 25

Table 4.9: Descriptive Statistics of Order Fulfillment ... 26

Table 4.10: Descriptive Statistics of Ease to Use ... 26

Table 4.11: Descriptive Statistics of Product Portfolio ... 27

Table 4.12: Descriptive Statistics of Security and Privacy ... 28

Table 4.13: Descriptive Statistics of Customer Perceived Value ... 28

Table 4.14: Descriptive Statistics of Customer Loyalty (Recommend) ... 29

Table 4.15: Descriptive Statistics of Customer Loyalty (Patronage) ... 30

Table 4.16: Descriptive Statistics of Switching Cost ... 31

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Table 4.18: KMO and Bartlett's Test Result ... 36

Table 4.19: Measurement Model Analysis ... 37

Table 4.20: Goodness-of-fit Measures (CFA) ... 38

Table 4.21: Goodness-of-fit Measures (SEM) ... 38

Table 4.22: Estimates of Structural Path Coefficients ... 38

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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 ... 16

Figure 4.2: Respondents’ age in percentage ... 17

Figure 4.3: Respondents’ job in percentage ... 18

Figure 4.4: Respondents’ monthly income in percentage ... 20

Figure 4.5: Respondents’ bank that they use the most in percentage ... 21

Figure 4.6: Respondents’ usage frequency in percentage ... 23

Figure 4.7: Respondents’ intended use in percentage ... 24

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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)

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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.

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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

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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:

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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.

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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

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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..

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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

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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))

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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.

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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

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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

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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”

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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”.

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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 five-point 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

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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.

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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 Valid Male 144 47.4 47.4 47.4 Female 160 52.6 52.6 100.0 Total 304 100.0 100.0

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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

Frequency Percent Valid Percent Cumulative Percent

Valid

Under20 27 8.9 8.9 8.9

20-30 174 57.2 57.2 66.1

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Above40 18 5.9 5.9 100.0

Total 304 100.0 100.0

Figure 4.2: Respondents’ age in percentage

Through this pie chart, the percentage of age is described by four ranges: under 20, 20-30, 30-40 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).

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Table 4.3: Job

Frequency Percent Valid Percent Cumulative Percent Valid Student 54 17.8 17.8 17.8 Officer 156 51.3 51.3 69.1 BusinessPerson 62 20.4 20.4 89.5 Others 32 10.5 10.5 100.0 Total 304 100.0 100.0

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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 Valid Noincome 52 17.1 17.1 17.1 Under5million 114 37.5 37.5 54.6 5-10million 99 32.6 32.6 87.2 Above10million 39 12.8 12.8 100.0 Total 304 100.0 100.0

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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

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21 Valid Vietcombank 71 23.4 23.4 23.4 Vietinbank 55 18.1 18.1 41.4 Agribank 43 14.1 14.1 55.6 BIDV 31 10.2 10.2 65.8 ACB 24 7.9 7.9 73.7 Eximbank 20 6.6 6.6 80.3 VPBank 13 4.3 4.3 84.5 Others 47 15.5 15.5 100.0 Total 304 100.0 100.0

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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

Frequency Percent Valid Percent Cumulative Percent Valid Frequently 100 32.9 32.9 32.9 Occasionally 147 48.4 48.4 81.3 Rarely 57 18.8 18.8 100.0 Total 304 100.0 100.0

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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 Frequency Percent Valid

Percent Cumulative Percent Valid Remittance 98 32.2 32.2 32.2 Payment 75 24.7 24.7 56.9

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24 AccountInformation 56 18.4 18.4 75.3 BankingInformation 40 13.2 13.2 88.5 Recharging 22 7.2 7.2 95.7 Others 13 4.3 4.3 100.0 Total 304 100.0 100.0

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

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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)

304 1 5 3.6941 .87606

Bank employees properly handle any problems that arise.(CS2)

304 1 5 3.6151 .81238

The contact employees understand my specific needs.(CS3)

304 1 5 3.6875 .82316

Employees address my complaints in a friendly manner.(CS4)

304 1 5 3.7336 .87015

Valid N 304

Average 3.682575

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.

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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)

304 1 5 3.7730 .81110

My online transaction are always accurate.(OF2) 304 1 5 3.6645 .92593

The bank keeps my records accurately.(OF3) 304 1 5 3.7566 .78347

The services I ordered were delivered to me within the time promised.(OF4)

304 1 5 3.6184 .88950

Valid N 304

Average 3.703125

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)

304 1 5 3.0230 .92068

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options.(EU2)

The organization and structure of online content is easy to follow.(EU3)

304 1 5 3.5757 .87928

The bank provides most of functions that I need.(EU4)

304 1 5 3.6678 .87020

Valid N 304

Average 3.476175

The mean of ease to use varies from 3.0230 to 3.6678. 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 3.0230. 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)

304 1 5 3.7401 .81340

The bank provides services with the features I want.(PP2)

304 1 5 3.6711 .81873

Valid N 304

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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 3.6711. 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)

304 1 5 3.4539 .85857

The bank will not misuse my personal information.(SP2)

304 1 5 3.5526 .81883

I feel safe in my online transaction.(SP3) 304 1 5 3.5987 .73803

Valid N 304

Average 3.535067

Comparing with above variables, security and privacy has lower average mean (3.535067). 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)

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Compared to alternative banks, the bank charges me fairy for similar services.(VA2)

304 1 5 3.5592 .80619

Compared to alternative banks, the bank provides more free services.(VA3)

304 1 5 3.4836 .82837

Comparing what I pay to what I might get from other competitive companies, I think the bank provided me with good value.(VA4)

304 1 5 3.6053 .76782

Comparing what I pay to what I might get from other competitive companies, I think the bank provides me with good value.(VA5)

304 1 5 3.6809 .68470

Valid N 304

Average 3.58094

The average evaluation of customer perceived value is 3.58094 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)

304 1 5 3.6382 .73165

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my advice about such matters.(LOR2)

I would encourage friends and relatives to use the bank.(LOR3)

304 1 5 3.6842 .82391

I would post positive messages about the bank on some Internet message board.(LOR4)

304 1 5 3.3421 .82538

Valid N 304

Average 3.609375

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)

304 1 5 3.7533 .73681

I intend to do more business with the present bank.(LOP2)

304 1 5 3.6283 .78559

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banking service.(LOP3)

Valid N 304

Average 3.643633

Customer loyalty (patronage) has better result than customer loyalty (recommend). The mean varies from 3.5493 to 3.7533. 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)

304 1 5 3.1776 .87956

It costs me too much to switch to another bank.(SW2)

304 1 5 3.1382 .93378

In general it would be a hassle switching to another bank.(SW3)

304 1 5 3.3651 .86071

Valid N 304

Average 3.226967

Comparing with these above variables, switching cost has been rated lower with the average mean is 3.226967. 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.

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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

Alpha

Item-total correlation

Items deleted Cronbach’s

Alpha after deleting items Customer service .831 None .831 CS1 CS2 CS3 CS4 .676 .679 .680 .605 . Order fulfillment .763 None .763 OF1 OF2 OF3 OF4 .613 .585 .543 .520 Ease to use .610 1 .749

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33 EU1 EU2 EU3 EU4 .094 .501 .487 .547 EU1 Product portfolio .672 None .672 PP1 PP2 .506 .506 Security and privacy .680 None .680 SP1 SP2 SP3 .477 .530 .481 Customer perceived value .799 None .799 VA1 VA2 VA3 VA4 VA5 .613 .576 .603 .609 .509 Customer loyalty .553 1 .645

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34 (recommend) LOR1 LOR2 LOR3 LOR4 .491 .246 .417 .329 LOR2 Customer loyalty (patronage) .850 1 .878 LOP1 LOP2 LOP3 .619 .673 .882 LOP1

Switching cost 0.715 None 0.715

SW1 SW2 SW3 .517 .572 516 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 0.831.

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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 0.094 (lower than 0.3) and Cronbach’s Alpha if items deleted is 0.749 (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 0.749 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 item-total 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 4.17.

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 0.533 (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 0.645 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 0.878

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(higher than 0.850), therefore, it will be deleted. The Cronbach’s Alpha after deleting LOP1 is 0.878 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 4.17. All values in corrected item-total correlation (higher than 0.3) and Cronbach’s Alpha if item deleted are lower than 0.715 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 Eigen-value 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 3754.558

Df 406

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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 AVE MSV ASV SW VA LOP SA

SW 0.648 0.479 0.152 0.133 0.692

VA 0.737 0.484 0.410 0.289 0.390 0.696

LOP 0.879 0.784 0.306 0.225 0.363 0.553 0.885

SA 0.815 0.425 0.410 0.254 0.339 0.640 0.488 0.652

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 0.05.

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Table 4.20: Goodness-of-fit Measures (CFA)

Fit index Score Criterion Reference

X2/d.f. 1.802 Jöreskog (1969)

GFI .949 Browne and Cudeck (1993)

RMSEA 0.051 Bagozzi and Yi (1988)

TLI .952

CFI 0.963

Note: ** = acceptable, * = marginal

Based on table 4.19, the final structural equation model is fit with market with X2/d.f. = 1.802, RMSEA = 0.051, CFI = 0.963, GFI = 0.949, TLI = 0.952.

After testing CFA, SEM is conducted with the final result that showed in table 4.21 to check model fit (after deleting SW variable in the model):

Table 4.21: Goodness-of-fit Measures (SEM) Chi-square/df 1.795 < 2

GFI .948 > 0.9 TLI .952 > 0.9 CFI .963 > 0.9 RMSEA .051 < 0.8

Table 4.22: Estimates of Structural Path Coefficients

Hypothesis Path Path

estimate t-value

p-value Results

H1 Customer perceived value ---> Customer satisfaction

.640 7.168 .001*** Supported

H6 Customer satisfaction ---> Customer loyalty (patronage)

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H3 Customer perceived value ---> Customer loyalty (patronage)

.399 4.028 .001*** Supported

Note: *** p< 0.001, **p< 0.01, *p< 0.05

The impact of customer perceived value on customer satisfaction.

Through table 4.20, hypothesis 1 has strongly supported of customer perceived value on customer satisfaction with critical ratio (7.168) and absolute value (less than 0.001). The figure shows that the regression weight for customer perceived value in the prediction of customer satisfaction is significantly different from zero at the .001.

The impact of customer perceived value on customer loyalty (patronage).

Hypothesis 3 predicts the impact of customer perceived value on customer loyalty (patronage) and critical ratio (4.028) and absolute value (less than 0.001) are supported for this hypothesis. The figure shows that the regression weight for customer perceived value in the prediction of customer loyalty (patronage) is significantly different from zero at the .001.

The impact of customer satisfaction on customer loyalty (patronage).

The impact of customer satisfaction on customer loyalty (patronage) that is hypothesis 6 is supported through this figure: critical ratio 2.572 and absolute value 0.010. From the figure, the regression weight for customer satisfaction in the prediction of customer loyalty (patronage) is significantly different from zero at the .05.

Figure 4.8: Covariance structural model

Customer Satisfaction Customer Loyalty (patronage) Customer Value .640 .233 .399

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VI.MULTIPLE-GROUP ANALYSIS

In the figure 4.8, this research has examined the relationship between customer perceived value and customer satisfaction, customer perceived value and customer loyalty (patronage), customer satisfaction and customer loyalty (patronage). In this step, the differences between male and female group of the respondents who took part in the questionnaire will be test in three relationships like in figure 4.8. The next step is comparing the variable model and invariable model with two hypotheses:

H0: there is no difference between male group and female group. H1: there is difference between male group and female group. After testing, the final result is (see more in Appendix G):

Table 4.23: Multiple-group analysis

Chi-square Df

Invariable model 129.400 85

Variable model 124.181 82

Difference 5.219 3

Using Excel software to check with the formula Chidist(5.219,2) = 0.151687 > 0.05, H0 will be not rejected and invariable model is selected. Between male and female group have no difference in the customer perceived value and customer satisfaction, customer perceived value and

customer loyalty (patronage), customer satisfaction and customer loyalty (patronage).

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CHAPTER IV

CONCLUSION AND RECOMMENDATIONS

I. CONCLUSION

The purpose of this study is examining the relationship among customer perceived value, satisfaction, loyalty and switching cost. This research is tried to describe about the model. From that, through this research, banking managers can have a suitable strategy to retain customers in internet banking service. The model of this research was applied from Shun Yin Lam et al. (2004) about the relationship among customer perceived service, satisfaction, loyalty (including recommend and patronage) and switching cost in the business-to-consumer (B2C) environment and Zhilin Yang et al. (2004) about five factors that can affect customer satisfaction in the relationship among customer perceived value, satisfaction, loyalty and switching cost.

According to Zhilin Yang et al. (2004), there were five factors that affected customer satisfaction that included: customer services, order fulfillment, ease to use, product portfolio and security and privacy. In his research, all five factors affected on customer satisfaction in Internet channel. However, from the result of this research with internet banking service, the effect of these factors has differences on customer satisfaction. Only three factors affect customer satisfaction in this situation. They are customer service, ease to use and product portfolio. With customers in Internet banking service in Binh Duong province, order fulfillment and security and privacy is not affect to them.

The relationship between customer perceived value and customer satisfaction is suitable with the theory of Shun Yin Lam et al. (2004). It is right not only with internet banking service not also with many other fields in society because the more customers get from the bank, the more customers will do business with the bank.

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As well as the theory of Shun Yin Lam et al. (2004), both customer perceived value and customer satisfaction have positive impacts on customer loyalty (patronage). When customers receive what the value they want and what the value they need, it makes their loyalty increase. Customer satisfaction is the same, when customers satisfy with the service of the bank, they will have a certainly loyalty with the bank. This relationship is benefit for both of customers and the banks and this is an important thing in business. However, they don’t have any relationship with customer loyalty (recommend). Customers may not want to recommend with other people about this issue and their loyalty only expresses by patronage.

Between male and female customers in this research, they have no difference about relationship between customer perceived value and customer satisfaction, customer perceived value and customer loyalty (patronage), customer satisfaction and customer loyalty (patronage). It means that, each group of customers; they have their own opinion and behavior. The banks should concentrate on this issue.

Finally, the result shows that switching cost has no direct effect with any factors. The theory Shun Yin Lam et al. (2004) showed that switching cost have both direct and moderating effect and the theory of Zhilin Yang et al. (2004) showed the moderating effect of switching cost. This research only examines the direct effect of switching cost and the result points that switching cost has no effect with customer loyalty (both recommend and patronage).

II. RECOMMENDATIONS

Customer perceived value has an important role to both customer satisfaction and customer loyalty (patronage). Therefore, the bank should have more strategies that can bring more benefit and value from their customers comparing with the alternative banks in internet banking service. The bank should bring to customers that they are using the services with the most value by some free services or lower cost with high quality. This method will be attracted with both new customers and loyal customers.

Beside customer perceived value, customer satisfaction is also important when the bank wants to retain customers. Customers always want services with the best quality. If the banks want customers that always have loyalty, they need to improve their customer service (service and employees), ease to use (using web site easily) and product portfolio (a lot of services with

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all features customers need). If customers are more satisfy with this service, their loyalty also increases.

There are no differences between male and female customers about internet banking, so the banks should have strategy for each group of customers. Good strategies not only help both group of customers satisfy, but only help the banks have more customers and retain their loyal customers.

The main purpose of this research is having some good strategies to retain customers in internet banking service just in Binh Duong province. Therefore, it maybe not highly appreciated in banking industry in Vietnam.

In the further research, emphasizing the moderating effect of switching cost with customer perceived value, satisfaction and loyalty and identifying the solution to improve customer loyalty (recommend) are two case which need to develop and research more to clarify this relationship.

III.LIMITATIONS

Firstly, this research is conducted with the small sample size (N=304) and maybe it is not appropriate with bigger population. The model should be conducted in the bigger sample size with the joining of many banks and opinion of professors who have more knowledge about this issue.

In the research, the average variance extracted value in CFA of customer perceived value, customer satisfaction and switching costs do not good as expected. It effect to the reliability of this research. For future researches, a good sample size and data set will avoid this problem.

The measurement of customer satisfaction is also a limitation. Zhilin Yang (2004) designed and developed it in the foreign countries. Sometimes, it does not suitable with the tradition and culture of Vietnamese people. Although it may have some differences, this measurement still has contributions for this research in Vietnam.

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REFERENCES

1) A.Parasuraman et al. (1994) , “Alternative scales for measuring service quality: A comparative assessment based on psychometric and diagnostic criteria”, Journal of Retailing, Volume 70, Number 3, pp.201-230, ISSN 0022-4359

2) Albert Caruana (1999) “Service loyalty – The effects of service quality and the mediating role of customer satisfaction”, Journal of Marketing, 36, 7/8.

3) Amy Wong, Amrik Sohal, (2002) "An examination of the relationship between trust, commitment and relationship quality", International Journal of Retail & Distribution Management, Vol. 30 Iss: 1, pp.34 – 50

4) Amy Wong, Amrik Sohal, (2003) "Service quality and customer loyalty perspectives on two levels of retail relationships", Journal of Services Marketing, Vol. 17 Iss: 5, pp.495 – 513

5) Anderson, E.W & Mittal, V. (2000). Strengthening the satisfaction-profit chain.

Journal of Service Research, 3, 107-120.

6) Anderson, E.W.Fornell.C & Mazvancheryl.S.K (2004) “Customer satisfaction and shareholder value”, Journal of Marketing, 68(4), pp.172-185

7) Andreas B.Eisingerich and Simon J.Bell (2007) “Perceived service quality and customer trust – Does enhancing customers’ service knowledge matter?” Journal of Service Research.

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Updating...

References

Outline : Limitations