Service convenience and customer satisfaction in vietnamese banking sector

UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
----------------------------------------

Le Thi Diem Ngan

SERVICE CONVENIENCE AND CUSTOMER SATISFACTION IN
VIETNAMESE BANKING SECTOR

MASTER OF BUSINESS

Ho Chi Minh City – Year 2014


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UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
----------------------------------------

Le Thi Diem Ngan

SERVICE CONVENIENCE AND CUSTOMER SATISFACTION IN
VIETNAMESE BANKING SECTOR

ID: 22120058

Master of Business – MBUS 3.2
Supervisor: Assoc. Prof. Le Nguyen Hau

Ho Chi Minh City – Year 2014

Abstract
In this era of mature and intense competitive pressures, how to maintain current
customers and attract new customers has become a critical problem for firms. It is especially
true in banking sector, where going along with the open market policy, many internationals
banks have come to operate. In this circumstance, increasing customer satisfaction has
become an important strategy for many banks. Besides impact of the traditional factor is
service quality, there is also the impact of service convenience on customer satisfaction.
Purpose – The main purpose of this study is to examine the relationship between
service convenience and customer satisfaction in Vietnamese banking sectors. This study
also considers the affect of each dimension of service convenience on customer satisfaction.
Method – Research data was collected from 201 retail banking customers. A five
point Likert scale was used to measure five items of service convenience – which include
decision convenience, access convenience, transaction convenience, benefit convenience,
post-benefit convenience; and customer satisfaction.
Findings – The research indicates that service convenience is the most important
factor that affect to customer satisfaction in banking field. Decision convenience, access
convenience, performance convenience, and post- benefit convenience are four components
of service convenience in Vietnamese banking sector. All these components have positive
impact on customer satisfaction with different intensity. Post-benefit convenience has a
strongest affect to customer satisfaction while decision convenience has a weakest affect in
compare to others factors. These effects are also different between groups of customers.
Research limitations – This study ignores the impact of other factors on customer
satisfaction such as service quality, price … Just a specific retail retail banking customers
are interviewed is another limitation of the study.
Practical implication – Each stage on consumption process can please customers
differently. Banks should pay attention to them to design services and invest resources.

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CONTENTS
CHAPTER 1 INTRODUCTION ..................................................................................................... 1
1.1

Research background ........................................................................................................ 1

1.2

Research problem ............................................................................................................. 2

1.3

Research objective ............................................................................................................ 4

1.4

Research questions............................................................................................................ 5

1.5

Research scope ................................................................................................................. 5

1.6

Structure of the thesis........................................................................................................ 5

CHAPTER 2 LITERATURE REVIEW, HYPOTHESES AND CONCEPTUAL MODEL............. 6
2.1

Theoretical background..................................................................................................... 6

2.1.1

Service convenience .................................................................................................. 6

2.1.2

Service convenience in banking industry.................................................................... 7

2.1.3

Customer satisfaction................................................................................................. 8

2.1.4

The relationship between service convenience and customer satisfaction ................... 8

2.2

Research model and hypotheses ...................................................................................... 10

2.2.1

Service convenience construct ................................................................................. 10

2.2.2

Research model........................................................................................................ 13

CHAPTER 3 RESEARCH METHODOLOGY ............................................................................. 15
3.1

Research process............................................................................................................. 15

3.2

Measurement .................................................................................................................. 16

3.2.1

Measurement of service convenience ....................................................................... 17

3.2.2

Measurement of customer satisfaction...................................................................... 18

3.3

Draft questionnaire ......................................................................................................... 19

3.4

Pilot study....................................................................................................................... 19

3.5

Sample selection ............................................................................................................. 20

3.6

Data analysis method ...................................................................................................... 21

CHAPTER 4 DATA ANALYSIS AND RESULTS....................................................................... 23
4.1

Descriptive analysis ........................................................................................................ 23

4.1.1

Respondents’ demographics..................................................................................... 23

4.1.2

Descriptive statistics ................................................................................................ 24

4.2

Reliability analysis.......................................................................................................... 26


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4.3

Testing unidimensionality ............................................................................................... 27

4.4

Measurement model test ................................................................................................. 27

4.5

Regression analysis......................................................................................................... 31

4.6

Exploring the effect of demographic variables ................................................................ 34

4.7

Discussion ...................................................................................................................... 36

CHAPTER 5 CONCLUSION ....................................................................................................... 39
5.1

Findings and conclusions ................................................................................................ 39

5.2

Managerial implication ................................................................................................... 40

5.3

Limitations and suggestion.............................................................................................. 41

References .................................................................................................................................... 43
Appendix 1: Questionnaire
Appendix 2: Testing the unidimensionality

Appendix 3: EFA
Appendix 4: Chart of testing regression hypothesis
Appendix 5: Testing the effect of demographic variables


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LIST OF TABLES
Table 1.1 Some statistic about Vietnamese banking sector .............................................................. 3
Table 3.1 Items used for measuring service convenience in banking sector ................................... 17
Table 4.1 Respondents’ characteristics .......................................................................................... 23
Table 4.2 Item descriptive statistics............................................................................................... 25
Table 4.3 Internal reliability for each construct ............................................................................. 26
Table 4.4 Factor loading for independent variables........................................................................ 28
Table 4.5 Factor loading for dependent variable ............................................................................ 30
Table 4.6 Factor correlation matrix ............................................................................................... 30
Table 4.7 Model Summary ............................................................................................................ 32
Table 4.8 ANOVA ........................................................................................................................ 33
Table 4.9 Coefficients ................................................................................................................... 33
Table 4.10 Groups for testing the effect of demographic variables................................................. 34


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LIST OF FIGURES
Figure 2.1 Model of service convenience’s dimensions and customer satisfaction ......................... 13
Figure 3.1 Research process .......................................................................................................... 16
Figure 4.1 The revised research model .......................................................................................... 31

1

CHAPTER 1

INTRODUCTION

The aim of this chapter is providing a general view of the research. The chapter
begins with the introductory background and research problem which include the overview
of Vietnamese banking sector, the importance of customer satisfaction and reasons for this
research. Then, the research objective and research questions are identified. Research scope
and thesis structure are also outlined.
1.1 Research background
In the recent years, going along with the development of the economy, the financial
sector has also made significant growth. This would expect to witness increased
competitiveness, diversification. The open market policy for foreign financial institutions to
operate in Vietnam also makes the competition tougher. Banks must pay attention to search
for the method to enhance customer satisfaction, then to retain their current customers as
well as attract new customers. For better understanding the main concern of customers,
researchers should stand in customer’s view point to search for the solution. Whenever
using a service, customer must sacrifice money, time, and effort. Set aside the amount of
money being paid by the customer, time and effort contributed by customer are captured
under the construct of service convenience (Berry, Seiders, & Grewal, 2002).
In order to achieve successful and create a competitive advantage for firm, listening
closely to customers' considerations is also recommended. This can be achieved by
identifying the most important stage of using process in which to invest and using those
investments to satisfy customers.
Previous studies have made to solve this problem in other service industries or in
other countries. Kaura (2013) suggested that both service quality and service convenience
have positive impact on customer satisfaction, and this impact is different between private
and public sector based on a study in India banking sector. “Interest rates, fee

structures and a

variety

of

financial

services and products

rank

far

behind

convenience and customer service when consumers are choosing a primary bank” (Colman,


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2004, p. 11). After a statistical analysis in Chinese chain restaurant, Kuo-Chien, Mu-Chen,
Chia-Lin, Kuo, and Nien-Te (2010) found out the effect of service convenience on
customers' post-purchasing behaviors. However, there are still so few studies about this
aspect in Vietnamese banking sector.
1.2 Research problem
Banking industry is the vital part of the financial system which the main mission are
attracting deposits and providing credits for the economy, supply services and booting the
economic development. Before the revolution in 1986, the Vietnamese economy in general
and the banking system in particular were all under the moderator of government. The Sate

Bank of Vietnam operated as both a state bank and a commercial bank. Since 1986, a
campaign namely “Doi Moi” was launched to promote the economy to become more open
and market-oriented. That was the reason for the transformation of the banking system as
well.
The reform of the economy was started from May 1990 with two important decrees:
one was the Decree on the State Bank of Vietnam, and the other was the Decree on Banks,
Credit cooperative and Financial companies 2. These decrees made an important
transformation of the Vietnamese banking system. The State Bank of Vietnam from now on
acted as a central bank, while others banks and financial companies can operate other
commercial banking activities independently (Ngo, 2012).
Since this reform until now, the Vietnamese banking sector has made a significant
development. There was a growth not only in the number of banking institution but also the
domestic credit provide for the economy, the number of transaction payment, and banking
customers. With 15.7% GDP in 1992, the domestic credit provided by the financial sector
has reach 108.2% GDP in 2013 (World Bank, 2014). It means the banking system has
played a vital role in the economic development and growth. The table below provides some
brief statistic about Vietnamese banking sector. It implies the expanding of financial and
banking sector in recent years to residents.


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Table 1.1 Some statistic about Vietnamese banking sector
Year
Commercial bank branches (per 100,000
adults)
Commercial bank branches (per 1000 km2)
ATMs (per 100,000 adults)
ATMs (per 1,000 km2)
Depositors accounts with commercial banks

(per 1,000 adults)
Loan accounts with commercial banks (per
1,000 adults)
Outstanding deposits with commercial banks
as percent of GDP
Outstanding loans from commercial banks as
percent of GDP

2004
0.39

2007
1.30

2010
2.47

2013
2.49

0.07
0.02
0.00

0.27
0.22
0.04

0.55
0.55

0.12
116.87

0.60
0.78
0.19
143.83

3.82

4.08

3.60

11.94

20.88

19.59

1.16

7.25

11.13

4.43

Source: IMF, 2014.
After the US-Vietnam Bilateral Trade Agreement in 2001 and Viet Nam became an

official member of WTO in 2007, many foreign banks were granted licenses to operate in
Vietnam. The presence of 49 branches of foreign banks, 100 foreign-owned banks and 49
domestic banks enhance the competitive pressure in the banking sector.
Based on a survey of MCG Management Consulting Ltd. (2006) on Vietnamese
banking customer reactions, half of customers may leave from Vietnamese banks to foreign
bank. Despite of the advantage on customers trust and cultural links, there are many reasons
for this switch such as: professionalism, interest rate level, service quality, accessibility…
then, banks have no option than to improve efficiency.
In a competitive market place, customer satisfaction is seen as a key to long term
success of any organization, and banks in particular. Most of banks products and service are
easy to duplicate. Therefore, customer satisfaction is potentially an effective tool that banks
can use to gain a strategic advantage and survive in today’s ever-increasing banking
competitive environment (Kumar & Gangal, 2011). Researchers have found that customer
satisfaction has a measurable impact on purchase intentions (Carter, as cited in Mandal &
Bhattacharya, 2013), on customer retention (Voss & Voss, as cited in Mandal &


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Bhattacharya, 2013) and on firm’s financial performance (Chalmeta, as cited in Mandal &
Bhattacharya, 2013). Customers’ needs and expectations change quickly. So, banks can not
provide satisfaction for their customers without understanding their expectations.
With the expanding of financial sector, using bank service has become a vital part of
modern life. More and more people have transaction with banks in many services such as
deposits, money transfers, financial advisory, money exchange… through directly, ATMs,
mobile banking, internet banking…. Money, time, and effort are resources that customers
must provide to receive value. Set aside the affect of price on customers, time and efforts
must sacrifice are important factors that attract customers to a specific bank. Time and
efforts resources are put into research under the construct of service convenience.
Despite the important impact of service convenience in satisfying customers, there

are not many researches about this relationship in Vietnamese. “Service convenience is not
an inherent characteristic of a service being offered by the supplier but a proxy of resources
being used by customers” (Thuy, 2011, p. 476). Based on a research in domestic airlines
customers in Vietnam, it is reinforced that “customers use the judgment of their own
contribution (via convenience) to evaluate the contribution of the supplier (via service
quality), and the resources contributed by both sides will co-create value for the customers”
(Thuy, 2011, p. 473). There is still a necessity to research about the impact of service
convenience on customer satisfaction in Vietnamese banking sector.
1.3

Research objective
The research objective is to examine the impact of service convenience on customer

satisfaction in the context of banking services. And then, explore the relative weights of
various dimensions of service convenience, and how these dimensions affect customer
satisfaction. Besides, the research also test differences in impact of service convenience on
customer satisfaction between groups of genders, bank transaction frequency … to have a
better understanding of these relationships.


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1.4 Research questions
The main goal of the research is answering these questions:
 What are the key dimensions of service convenience in the banking service?
 Are there significant relationships between customer satisfaction and the
service convenience dimensions?
1.5 Research scope
However, besides the direct impact of service convenience on customer satisfaction,
it also has the indirect impact of service convenience on customer satisfaction through other

factors, such as service quality that has not been researched in this study. Moreover, this
study has taken into account a specific category of retail banking customers in Ho Chi Minh
city. Thus, it limits generalization of results to other banking populations.
1.6 Structure of the thesis
The thesis consists of five chapters. The first chapter provides an overview of the
research. It includes research background, reason why the author chooses to do this
research. And then, follows by research objective, questions, and limitations.
Chapter 2 is the literature review. This chapter explains concepts of research, such as:
convenience, service convenience, satisfaction, and the relation between them. Hypotheses
and research model are also presented in this chapter.
Chapter 3 is the research method. It includes the process in which the research is
done. Measurements for each constructs are also introduced clearly. This chapter discusses
step by step ways that the data was collected: from design the questionnaire, carry pilot
study, to implement the survey. Data analysis method is also introduced in this chapter.
Chapter 4 provides the result of analysis from the data collected from chapter 3. Data
was analyzed in some methods: test the reliability, convergent, discriminant, and the
relations between the independent variables and dependent variable.
Chapter 5 discusses results of the data analysis. It includes conclusion, practical
implication, research scope and limitations. This chapter also suggests some
recommendations for further study in this sector.


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CHAPTER 2

LITERATURE REVIEW, HYPOTHESES AND
CONCEPTUAL MODEL

The aim of this section is to present the literature background of the research, and

provides a theoretical framework. This chapter begins with the review on the definition of
service convenience, customer satisfaction, and the relationship between these concepts.
The chapter then indentifies service conveniences dimensions and their affects on customer
satisfaction to formulate research hypothesis and model.
2.1 Theoretical background
2.1.1 Service convenience
Convenience is defined by Webster (1990) as “accessible or at hand; any thing that
saves works, adds to comfort, etc”. Earlier, Copeland (1923) suggested the classification of
convenience goods component consumer products, which consist of convenience goods,
shopping goods, and specialty goods. Convenience goods are taken as the savings in time
and effort that consumers spend in purchasing products, rather than as an attribute of
product itself. Moreover, Morganosky (1986) defined convenience as the ability to
accomplish a task in the shortest time with the least expenditure of human energy. It
consists of the time and effort consumers expend on product and service acquisition and
consumption (Brown, 1990). Later on, convenience is defined as “a reduction in the amount
of consumer time and/or energy required to acquire, use and dispose of a product or service
relative to the time and energy required by other offerings in the product/service class”
(Brown & Mcenally, 1993). More recently, Dabholkar, Bobbitt, and Lee (2003) has
researched how technology (specifically self-service technology) may enhance convenience
and increase consumer satisfaction with service encounters. Convenience is generally
viewed as one of the most important factor to consumer behavior.
Past research reveals that convenience is a multidimensional construct. According to
Yale and Venkatesh (1986), there are six classes of convenience: time utilization,
accessibility, portability, appropriateness, handiness, and avoidance of unpleasantness.


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Another approach divides convenience into five dimensions, includes time, place,
acquisition, use, and execution (Brown, 1989; 1990).

2.1.2 Service convenience in banking industry
Nowadays, most banks provide customers with similar services, like money transfer,
deposits, loans, safety vault keeping, insurance etc. Due to tough competition in the
industry, banks are under pressure to retain customers. And six events which were
considerably important in order to understand the factors of bank switching were labeled as
inconvenience, service failures, pricing, unacceptable behavior, attitude or knowledge of
staff, involuntary mentioned incidents and attraction by competitors (Gerrard &
Cunningham, 2004). So, improving service convenience is one of the key solutions to help
banks improve competitive.
According to Mccormick (2000), five statistically significant factors that predict 85%
of the variation among banks' core deposit growth are: the level of spreads and fees, service,
branch and ATM convenience matter. Banks with the largest increase in acquisitionadjusted number of branches achieved one-percentage point higher annual balance growth
than the average bank. Where different banks strike the balance between convenience and
community warmth seems to depend mainly on their size, and related factors, which include
how a bank figures the cost-benefit of making a considerable up-front investment in various
kinds of hardware and software, their corporate image, and whether or not they are
stockholder-owned (Brown, 1998).
Many of big banks have made great strides in listening to what their customer are
asking for, reducing the number of problems customers encounter, and more importantly,
improving satisfaction with fees (Anonymous, 2013). Customers today are likely to find
banks of all sizes offering the level of convenience, technology, and personal service they
have come to expect. Levesque and McDougal (1996) suggested that with retail banking,
the convenience and competitiveness of the provider’s offerings can be expected to affect a
customer’s overall satisfaction and ongoing patronage. The research has shown that location
is a major determinant of bank choice. Underlying location are the customer benefits of


8

convenience and accessibility which are enabling factors that make it easy for the customer

to do business with the bank.
2.1.3 Customer satisfaction
Customer satisfaction has been identified many times in previous studies. However,
it is factual that, there is no specific definition of customer satisfaction. Most of researchers
agree that satisfaction is an evaluation or attitude that is formed by the comparison made by
customer for their pre-purchase expectations of what they would receive from the product to
their subjective perception of the performance they actually received (Oliver, 1980).
Customer satisfaction links processes culminating purchase and consumption with post
purchase phenomena such as repeat purchase, brand loyalty and attitude change (Churchill
& Surprenant, 1982). Tse and Wilton (1988) suggested that customer satisfaction is the
consumer’s response to the evaluation of the perceived discrepancy between prior
expectations and the actual performance of the product or service as perceived after its
consumption. This definition is supported by Fornell (1992) that considers satisfaction as an
overall post-purchase evaluation by the consumer. Another definition is that customer
satisfaction is the individual’s perception of the performance of the products or services in
relation to his or her expectations (Schiffman & LazarKanuk, 2004). According to Levy and
Weitz (2009), customer satisfaction is a process of evaluating a product or service after
consumption to discover whether customer’s expectation has been met or even exceed.
Customer satisfaction has always been the most essential thing for an organization. A
satisfied buyer will be more likely to repurchase or at least consider repurchasing than those
who are dissatisfied (Keith, 1960). Customer satisfaction has been considered as the
important key to help increase the company’s profitability, market share, and return on
investment (Nadiri & Hussain, 2005).
2.1.4 The relationship between service convenience and customer satisfaction
Most definitions of customer satisfaction have favored the notion of consumer
satisfaction as a response to an evaluation process. In a study of Giese and Cote (2000), they
grouped the view of satisfaction base on time-specific to before purchase, after purchase but


9

before consumption, during consumption, or after consumption. Another author stated in his
theory that “definition of consumer satisfaction relates to a specific transaction (the
difference between predicted service and perceived service) in contrast with ‘attitudes’,
which are more enduring and less situational-oriented”, (Lewis, 1993, p.4-12). Meanwhile,
five dimensions of service convenience reflect activities that customers engage in during the
acquisition and consumption of services (Berry et al., 2002) and that tend to dominate
customer satisfaction with a business. The more customers experience necessary and
relevant service convenient events, the stronger their satisfaction with the business will be.
Previous studies have shown the relationship between service convenience and
customer satisfaction. Seiders, Voss, Grewal, and Godfrey (2005) reported that overall
convenience interacts with satisfaction to exert a positive influence on repurchase visits and
spending. Service convenience has been hypothesized as having an impact on customer
satisfaction and repeat purchase from a service organization (Seiders, Voss, Godfrey, &
Grewal, 2007; Colwell, Aung, Kanetkar, & Holden, 2008). Service convenience provides
the means for decreasing time and effort costs in the acquisition and employment of a
service, which in turn enhances satisfaction evaluation (Crosby & Stephens, 1987).
A study of Kaura (2013) about the customer satisfaction of India public and private
sector banks highlighted the importance of service convenience and perceived price and
fairness in measuring customer satisfaction. It reiterates the importance of employee
behavior in customer satisfaction for both public and private sector banks. The study also
found that each dimension of service convenience has different impact on customer
satisfaction.
In Vietnam, base on a research of Thuy (2011) in airline industry, service
convenience has a positive total impact on the overall satisfaction of customer. Apart from
the direct affect, there is also a significant indirect impact of service convenience on
customer satisfaction via the mediating role of perceived service quality.


10

If customers agree that they are satisfied and give the reasons for satisfaction as
service convenience; service convenience dimension has significant relationship with
service convenience and customer satisfaction, then a conclusion could be drawn that
service convenience dimensions have a significant relationship with customer satisfaction.
So, it is important to identify the effect of elements of service convenience to gain customer
satisfaction.
2.2 Research model and hypotheses
2.2.1 Service convenience construct
Consumers experience an increase in time deficiency when conducting tasks related
to the acquisition and consumption of a service (Zeithaml & Bitner, 2000). So, service
convenience can be thought as a mean of adding value to consumers, by decreasing the
amount and effort which a consumer must spend on the service. Berry et al. (2002) proposed
service convenience as a multidimensional construct, and that service convenience is
conceptualized as the consumers’ time and effort perceptions related to buying or using a
service. Berry et al. (2002) presented a conceptual model of service convenience which
consists of five constructs: decision convenience, access convenience, transaction
convenience, benefit convenience, and post-benefit convenience. This conceptualization
reflects a multistage consumption process in which evaluations of convenience vary at each
stage, includes: problem recognition, information search, alterative evaluation, purchase and
post-purchase stages (Engel & Blackwell, 1982). Service convenience can be influenced by
various factors in relation to firms, such as physical environment (Bitner, 1992), company's
brand name (Berry, 2000), and the design of service system (Meuter, Ostrom, Roundtree, &
Bitner, 2000).
Applying the conceptualization about service convenience above to different stages
of the consumption process, this research uses the service convenience construct of Berry et
al. (2002) to analyze the impact of service convenience on customer satisfaction. Five
dimensions of service convenience are: decision convenience, access convenience,
transaction convenience, benefit convenience, and post-benefit convenience

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Decision convenience
Decision convenience is defined as the consumers’ perceived time and effort
expenditure to make service purchase or use decisions. When consumers recognize the need
for a product or service, they are faced with the decision of which suppliers to choose. In
this stage, the availability and quality of information about the service provider and its
competitors determine decision convenience (Zeithaml, Berry, & Parasuraman, 1996).
According to Cardozo (1965), the supplier can alter the amount of efforts customers
expend to make the purchase more or less difficult by varying the amount of information
provided to customers. With so little information, the customers may need more effort to
gather additional information. With a great deal of detail information supplied, the
customers may expend considerable effort to process the information. The expectations that
customers have regarding a product depend upon information they gather. So, achieving the
expectations on information easily with less effort will be a way to satisfy customer.
H1: Decision convenience will result in customer satisfaction.
Access convenience
Access convenience is defined as the “consumers’ perceived time and effort
expenditure to initiate service delivery” (Berry et al., 2002). Access convenience is
determined by the physical location, operating hours, and availability online, by phone, or in
person (Meuter et al., 2000).
One example of service that creates the access convenience for customers is online
store. Online stores offer customers the convenience of comparison shopping and enable
them to quickly access preferred goods and services. And when customers can have
enjoyable experience in a convenient shopping environment, not only will customer
satisfaction be enhanced but their custom will be retained (Hung, Chen, & Huang, 2014). In
this research, we will examine the impact of access convenience in customer satisfaction in
banking sector.

12

H2: Access convenience will result in customer satisfaction.
Transaction convenience
Transaction convenience is defined as “consumers’ perceived time and effort
expenditures to effect a transaction” (Berry et al, 2002). It reflects the time spend on
physical or remote queues, which can be problematic for firms because wait times
commonly are perceived as longer than they actually are and negatively influence overall
service evaluations (Kumar, Kalwani, & Dada, 1997).
Providing convenience during the transaction stage enables the consumer to
efficiently assume possession of the acquired service (Pandya, Joshi, & Ghumaliya, 2012).
The more effort customers have to complete a transaction with a business, the less likely
they are to bring repeat business to that company in the future.
H3: Transaction convenience will result in customer satisfaction.
Benefit convenience
Benefit convenience is defined as “consumers’ perceived time and effort
expenditures to experience the service’s core benefit” (Berry et al, 2002). That is at the
consumption stage, after a consumer has accessed and purchased the service. Benefit
convenience varies in importance across service categories and may be less relevant for
services with high hedonic as opposed to utilitarian value (Holbrook & Lehmann, 1981).
According to Seo and Warman (2011), perceived benefit convenience and
information failure among other factors in service convenience and performance failure are
the most significant factors that are positively and negatively related to user satisfaction.
H4: Benefit convenience will result in customer satisfaction.
Post-benefit convenience
Post-benefit convenience is defined as “consumers’ perceived time and effort
expenditures when reinitiating contact with a firm after the benefit stage of the service”

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(Berry et al, 2002). It becomes important after the service exchange. This involves the need
to contact the provider after the sale is complete to initiate the service complaints or failures,
request maintenance or upgrades, or for general service support (Zeithaml & Bitner, 2000).
When customers encounter a service problem, solutions and supports from the
supplier will affect the customer’s overall perception of the company’s service. Customers
those experiencing recent service problems but then receiving satisfactory solution have
significantly higher loyalty and pay more intentions, and significantly lower switch and
external response intensions, than those with unresolved problem (Zeithaml et al., 1996).
H5: Post - benefit convenience will result in customer satisfaction.
2.2.2 Research model
The conceptual model constructed based on literature review representing the
relationship between customer satisfaction and service convenience dimensions is presented
in the model below.

Figure 2.1 Model of service convenience’s dimensions and customer satisfaction
Summary
Many researchers have highlighted the importance of service convenience on
measuring customer satisfaction. Service convenience includes five dimensions: decision


14

convenience, access convenience, transaction convenience, benefit convenience, and postbenefit convenience. They reflect five stages of consumption process: problem recognition,
information search, alterative evaluation, purchase and post-purchase stages, which have
been constructed to have a positive effect on customer satisfaction. The research hypotheses
and model are constructed based on this literature background.

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CHAPTER 3

RESEARCH METHODOLOGY

The aims of this section is to explain methods used in carrying out this research. This
chapter begins with the research process, development of measuring concepts, and
constructs of the questionnaire. How to collect data and method for data analysis are also
presented in this chapter.
3.1 Research process
The research began with the determinant of the problem. Development and
competition in banking industry force banks to have solution to retain current customers as
well as attract new customers. Then come up with the purpose of the study is to determine
the relationship between service convenience and customer satisfaction. The literature
review made with the first part is the definition of all constructs, then the relationship
between service convenience and customer satisfaction. Hypothesis and model were also
built based on that. There are five hypotheses with the impact of five dimensions of service
convenience on customer satisfaction.
Then, the measurement scale was developed for each construct to form the draft
questionnaire. This questionnaire was check for the clearly and suitable through a pilot
study. Some modifications were made before the final questionnaire was sent to
participants. Both e-mail survey and face to face were chosen for collecting research data.
Next, quantitative data collected from the survey was used for analysis to check the
impact of each dimensions of service convenience to customer satisfaction.
The final part is discussion and conclusion drawn up from the result of the research.


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Determinant of the problem

Research purpose

Literature review

Hypothesis and model

Questionnaire

Pilot test
n=20

Final questionnaire

Data collection

Data analysis

Conclusion
Figure 3.1 Research process

3.2 Measurement
The measurement scales used in this study were multi-items five point Likert scales,
which developed and validated by previous researches, ranging from “1= strongly disagree”
to “5 = strongly agree”.


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3.2.1 Measurement of service convenience
Service convenience was measured based on the service convenience dimensions
proposed by Berry et al. (2002). They include decision convenience, access convenience,
transaction convenience, benefit convenience, and post-benefit convenience. To measure
each dimension, we referred to the scale of previous researches. These items were justified
in the case of banking sector.
Table 3.1 Items used for measuring service convenience in banking sector
Constructs

Items

Sources

1/ It took minimal time to get the information needed Berry et al. (2002)
to choose A bank.
2/ Making up my mind about what I wanted to use was
easy.
Decision
convenience

3/ The information I received from A bank made it Colwell
easy for me to choose what to use.

all

(2008) (modified

4/ The information that I received from A bank was for
very clear and easy to read.

et

banking

service)

5/ A bank let me know the exact cost or special offers
before I bought the service.
6/ It was easy to contact A bank.

Berry et al. (2002)

7/ It did not take much time to reach A bank.
Access
convenience

8/ I was able to get to A bank's location quickly.
9/ A bank was available when I needed to talk to them. Colwell

et

al.

10/ A bank is accessible through various ways (online, (2008) (modified
telephone, and in person).

for

banking

11/ The hours of operation of A bank were convenient. service)
Transaction
convenience

12/ I did not have to make much of an effort to pay for Berry
the service.
13/ They made it easy for me to conclude my

(2002).

et

al.


18

purchase.
14/ I was able to complete my purchase quickly.
15/ There were no problems to deal with during the Colwell
purchase that added to the purchase time.

et

al.

(2008) (modified
for

banking

service)
16/ I was able to get the benefits of the service with Berry
minimal effort.

et

al.

(2002).

17/ The service was easy to use.
Benefit
convenience

18/ The time required to receive the benefits of
the service was appropriate.
19/ A bank solved my needs without creating other Colwell
problems.

et

al.

(2008) (modified
for

banking

service)

20/ A bank resolved my problem quickly.
Post-benefit

21/ It took little effort to arrange follow-up service.

convenience

22/ A bank made it easy for me to resolve my

Berry et al. (2002)

problem.
3.2.2 Measurement of customer satisfaction
Three items were used to measure customer satisfaction. These measures have
frequently been used in both academic and practitioner studies of customer satisfaction
(Brown et al., 1993; Komunda & Osarenkhoe, 2012).
1. Considering everything, I am extremely satisfied with this bank
2. This banks always meet my expectation
3. The overall quality of the services provided by this bank is excellent.