Lunghwa University of Science and
Technology
Department of Business Administration
Thesis for a Master’s Degree

THE IMPACT OF HUMAN FACTORS
ON CUSTOMER SATISFATION ON
RETAIL SERVICE QUALITY AT
VIETINBANK - HANOI BRANCH

Researcher: Nguyen Ngoc Khanh

Superviser 1: Dr. Dao Tung, International School, VNU
Supervisor 2: Dr. James Cho, Lunghwa University

November 2017


Lunghwa University of Science and Technology
Approval Certificate of Master’s Degree Examination Board
This is to certify that the Master’s Degree Examination Board has approved the thesis
The Impact of Human Factors on Customer Satisfation on Retail Service Quality at
Vietinbank - Hanoi Branch published by Mr. Nguyen Ngoc Khanh in the Master
Program of Graduate School of Department of Business Administration
Master’s Degree Examination Board

Board Members:

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Advisor:

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Chair:

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Date: ………………./………………../……………


ABSTRACT

Thesis Title: The Impact of Human Factors on Customer Satisfation on Retail
Service Quality at Vietinbank - Hanoi Branch

Pages: 50

University: Lunghwa University of Science and Technology
Graduate School: Department of Business Administration
Date: …………………………

Degree: Master


Graduate Student: Nguyen Ngoc Khanh

Advisor:

Dr. Dao Tung
Dr. James Cho

Keywords:

Retail Banking Services, Retail Service Quality, Customer Satisfaction,
Human Factors, Vietinbank Hanoi Branch, Vietnam.

In the context of Vietnam's developing economy and the banking sector being
one of the more competitive, improving quality of service and enhancing customer
satisfaction tends to be an essential requirement. Specific to the nature of service
provision, the human element plays a vital role in improving quality and creating
customer satisfaction. With that in mind, and with the desire to study the human factors
in providing services of Vietinbank Hanoi branch, the research aims to assess the
impact of human factors on improving the customer satisfaction of Vietinbank Hanoi
Branch.
The study aims to achieve the following three objectives: firstly, analyse,
discuss and evaluate current state of retail services quality at Vietinbank Hanoi branch;
secondly, assess the impact of the human factors on customer satisfaction on the quality
of retail services; and thirdly, propose recommendations regarding how the human
factors can improve customer satisfaction in retail quality services, thereby allowing
expansion and development of services at Vietinbank Hanoi branch.
Based on the assessment of human factors that affect quality of service and
customer satisfaction when using the retail banking services, research has developed a
model with eight independent variables: Reliability, Empathy, Service effectiveness,

Commitment, Staff attractiveness, Staff emotions, Staff helpfulness, and Staff interaction
i


in service delivery; and studied the impacts of the above eight human factors on
customer satisfaction related to retail service quality in Vietinbank Hanoi. Based on past
research related to human factors, research hypotheses have been proposed whereby all
of the above eight human factors have a significant and positive impact on customer
satisfaction whilst using banking services.
To achieve the research objectives and test hypotheses, this research used the
method of customer survey. The scale for the main variables has been largely derived
from past research and translated into Vietnamese. A few new scales have been
developed with variables that do not have an evaluation scale (variable: staff interaction
in service delivery). A total of 32 questions were used to measure 8 independent
variables and one dependent variable. The final sample consisted of 150 clients, who
were generally experienced in using banking services, and at the time of research they
had used or were using the services of Vietinbank.
To analyse the data, this study used quantative methods to assess the reliability
of the scales (EFA analysis and Alpha Cronbach) and to test the hypotheses (multiple
regression analysis). The results of the scales’ reliability assessment show that the
scales used are reliable.
Based on the results from the survey, the study also analyzed the customer's
assessment of the human factors of Vietinbank Hanoi. The results show that customers
highly appreciate the human factors of Vietinbank (score from 3.7 to 3.92 on the scale
of 5). Customers have a fairly consistent rating on these factors.
Hypotheses testing shows that seven out of eight human factors have a positive
and significant impact on customer satisfaction (except for the staff interaction in
service delivery).
Based on the results obtained, this study provides a number of specific
recommendations to help Vietinbank Hanoi maintain and strengthen its advantages in

the human factors to enhance customer satisfaction. Limitations of this research and
possible areas for future research are also given.

ii


ACKNOWLEDGEMENT

First of all, I would like to thank Dr Dao Tung, lecturer of International School,
Vietnam

National

University

and

Dr

Jame

Cho,

Doctor

of

Business

Administration of Longhwa University, who have guided me wholeheartedly during the

preparation of this thesis.
I would like to express my gratitude to the teachers and staffs of International
School, Vietnam National University and Longhwa University for their support in
completing my thesis.
I also sincerely thank my colleagues at Vietinbank Hanoi Branch for helping me
collect the data, my classmates of FBA7, and my friends and other colleagues who have
encouraged and helped me to complete this thesis.
Their guidance, support, motivation have been extremely valuable to me and
helped me complete my thesis on time. Sincerest thanks.

Thank you!
Author
Nguyen Ngoc Khanh

iii


ABBREVIATIONS
Abbreviation

Full name

ACSI

American Customer Satisfaction Index

BIDV

Joint Stock Commercial Bank for Investment and Development
of Vietnam


ECSI

European Customer Satisfaction Index

EFA

Exploratory Factors Analysis

SBV

State Bank of Vietnam

VIETINBANK

Vietnam Joint Stock Commercial Bank for Industry and Trade

iv


TABLE OF CONTENTS
ABSTRACT .................................................................................................................. i
ACKNOWLEDGEMENT ........................................................................................... iii
ABBREVIATIONS ..................................................................................................... iv
LIST OF TABLES .................................................................................................... viii
LISTE OF FIGURES .................................................................................................. ix
CHAPTER 1: Introduction ........................................................................................... 1
1.1. Rationale and Significance of the Research Topic .............................................. 1
1.2. Purpose, Subject, and Scope of Research ........................................................... 1
1.2.1. Purpose of this Research ............................................................................. 1

1.2.2. Subject and Scope of this Research ............................................................. 2
1.3. Research Model and Variables ........................................................................... 2
1.4. Research Methodology ...................................................................................... 3
1.4.1. Data Collection Methodology ..................................................................... 3
1.4.2. Data Analysis Methodology ........................................................................ 3
1.5. Thesis Structure ................................................................................................. 3
CHAPTER 2: The Rationale for Retail Banking and the Human Factor in Creating and
Delivering Services ...................................................................................................... 5
2.1. Retail Banking Services ..................................................................................... 5
2.1.1.1 Definition of Retail Banking Services ....................................................... 5
2.1.1.2 Characteristics of Retail Banking Services ................................................ 5
2.1.1.3 Role of Retail Banking Services ................................................................ 6
2.1.2 Qualiy of Retail Banking Services and Customer Satisfaction about the Quality
of Service ................................................................................................................. 6
2.1.2.1 Definition of the Quality of Service ........................................................... 6
2.1.2.2 Some basic theoretical models on quality of service .................................. 7
2.1.2.3 Factors affecting quality of service ............................................................ 9
2.1.3 Customer Satisfaction .....................................................................................10
2.1.3.1 Definition of customer satisfaction ...........................................................10
2.1.3.2 Theoretical models on customer satisfaction.............................................11
2.1.3.3 Factors affecting customer satisfaction .....................................................13
2.1.4 The human factor affecting customer satisfaction ............................................14
2.1.4.1 Human factor from SERVQUAL model ...................................................14
v


2.1.4.2 Human factors from other research ...........................................................16
CHAPTER 3: Research Model, Hypotheses, and Methods ..........................................20
3.1 Research Model and Hypotheses........................................................................20
3.1.1. Research Model: ........................................................................................20

3.1.2. Research Hypotheses: ................................................................................20
3.2 Primary Data Collection ....................................................................................21
3.2.1 Data Collection Questionnaire.....................................................................21
3.2.2 Sampling Method ........................................................................................25
3.2.3 Data Collection ...........................................................................................25
3.3 Data Analysis Methodology ...............................................................................26
3.3.1 Scale Reliability Measurement Method .......................................................26
3.3.2 Data Analysis Method .................................................................................27
CHAPTER 4: Analysis of the impact of human factors on customer satisfaction at
Vietinbank Hanoi Branch ............................................................................................30
4.1 Introduction of Vietinbank Hanoi Branch ..........................................................30
4.1.1 Formation and development ........................................................................30
4.1.2 Products and Services Offered by the Branch ..............................................30
4.1.3 Business Situation of the Branch .................................................................31
4.2 Research findings on impacts of human factors on customer satisfaction about
quality of service .....................................................................................................33
4.2.1 Research sample .........................................................................................33
4.2.2 Assessment of measuring scale ...................................................................35
4.2.3 Findings ......................................................................................................39
CHAPTER 5: Conclusion and recommendations to enhance customer satisfaction at
Vietinbank Hanoi Branch ............................................................................................47
5.1 Orientation for business activities of Vietinbank Hanoi Branch until 2020 .........47
5.1.1 Orientation of Vietinbank ............................................................................47
5.1.2 Orientation of Vietinbank Hanoi Branch .....................................................47
5.2 Solutions on using the human factor to improve customer satisfaction in
Vietinbank Hanoi Branch ........................................................................................48
5.3 Recommendations for Vietinbank Headquarter ..................................................49
5.4. Limitations and Future Research .......................................................................50
REFERENCES............................................................................................................52
vi



APPENDICES ............................................................................................................55

vii


LIST OF TABLES
Page
Table 3.1

Measuring scale for data collection

22

Table 4.1

Results of EFA analysis on independent variables

35

Table 4.2

Alpha Cronbach results for independent variables

37

Table 4.3

EFA results on dependent variable


38

Table 4.4

Number of customers using services of other banks

39

(different from Vietinbank)
Table 4.5

Frequency of usage of Vietinbank services of the research

39

sample
Table 4.6

Customer assessment of the human factor and overall

40

satisfaction on the quality of service
Table 4.7

Coefficient of the linear regression equation

41


Table 4.8

R2 value of the regression model

41

Table 4.9

Research Hypotheses Testing Results

42

viii


LISTE OF FIGURES
Page
Figure 2.1

Five Gaps of Service Quality Model

8

Figure 2.2

The model of Customer Satisfaction Index - ACSI

12

Figure 2.3


Model of customer satisfaction ECSI

13

Figure 2.4

Model of factors affecting customer satisfaction

13

Figure 3.1

Research Model

20

Figure 4.1

Business results of Vietinbank Hanoi in the period 2013-

32

2016
Figure 4.2

Research sample information

33


Figure 4.3

Research sample information

34

ix


CHAPTER 1: INTRODUCTION
1.1. Rationale and Significance of the Research Topic
Vietnam's economic integration into the world economy poses many challenges
for commercial banks, which are to compete with multinational corporations with
financial advantages and technology. Under that circumstance, the development of retail
banking services is a way to be selected by many commercial banks. The retail banking
market of Southeast Asian countries, including Vietnam, has much potential for
development. Being one of the leading banks in Vietnam's financial system, having big
brand name and wide network in Vietnam, and to catch up with the trend of the region
and the world, Vietinbank has been focusing on promoting the retail banking sector
with the ambition to become the leading retail bank in Vietnam.
Vietnam Joint Stock Commercial Bank for Industry and Trade - Hanoi branch
(Vietinbank Hanoi branch) is the primary branch and the largest branch in the
Vietinbank network. Formerly known as Vietinbank Transaction Office 1, Vietinbank
has a long tradition of serving groups, corporations, and large enterprises across the
country. Therefore, the retail operations of VietinBank in Hanoi is often neglected and
insufficiently paid attention to. The proportion of revenue, profit from retail activities is
low, unproportionate with the branch’s potential. In addition, the human factors, which
are often considered core and significantly impactful on customer satisfaction, have not
been fully paid attention to, thus significantly affecting the quality of the retail services
and customer satisfaction.

With regards to the above mentioned reasons and to the actual activities at
Vietinbank Hanoi branch, as head of the transaction office at this branch, I chose the
topic "The Impact of Human Factors on Customer Satisfation on Retail Service Quality
at Vietinbank - Hanoi Branch" for this master's thesis.

1.2. Purpose, Subject, and Scope of Research
1.2.1. Purpose of this Research
The research focuses on synthesizing the theoretical background of retail
banking, factors affecting the quality of retail services and customer satisfaction,
particularly focusing on factors related to human – i.e. the staff. Based on that, the
1


research aims to assess Vietinbank Hanoi's retail service activities, assessing the impact
of human factors on customer satisfaction about the quality of retail services, and
proceeding to propose solutions to enhance customer satisfaction that will help
Vietinbank Hanoi expand and develop its retail banking services.

Specifically, the project aims to achieve the following basic objectives:
First, systematize the theoretical background on retail banking services
Second, analyze, discuss, and evaluate the current situation of retail banking at
Vietinbank Hanoi.
Third, assess the impact of human factors on customer satisfaction about the
quality of retail services
Fourth, propose solutions related to human factors to improve customer
satisfaction about retail banking services, thereby to expand and develop retail banking
services at Vietinbank Hanoi branch.
1.2.2. Subject and Scope of this Research
Research subject: the thesis focuses on issues related to retail banking, human
factors in service provision, and customer satisfaction in service quality (retail services)

at Vietinbank Hanoi branch.
Research scope: The topic is restricted to clients of Vietinbank Hanoi branch
within the geographical area of Hanoi city.

1.3. Research Model and Variables
The study aims to study the effect of independent variables being variables
related to different aspects of the human factor on the dependent variable being the
customer satisfaction on the quality of banking services.
In detail, the independent variables in the model include: Reliability, Empathy,
Responsiveness, Assurance, Staff attractiveness, Staff emotions, Staff helpfulness, and
Staff interaction in service delivery.
Dependent variable is customer satisfaction on the quality of retail banking
services of Vietinbank Hanoi Branch.

2


1.4. Research Methodology
1.4.1. Data Collection Methodology
To achieve the predetermined research objectives, the author uses a combination
of both secondary data and primary data collected from customers who have been using
the services of the bank.
Secondary data sources are used to synthesize the theoretical issues on service
quality, satisfaction, and factors with general influence, as well as particular human
factors that affect the quality of service and customer satisfaction; and about Vietinbank
Hanoi branch, its products, and its operations. Secondary data sources include research
articles related to research variables; annual reports of VietinBank in Hanoi, financial
reports, information disclosure, statistics offices, annual reports of Vietinbank and some
commercial banks, economic, financial and banking magazines, and information on the
development of retail banking at Vietinbank Hanoi.

Primary data source data was collected to assess the impact of human factors
within the research model on customer satisfaction on service quality of Vietinbank
Hanoi. The research will use a questionnaire to collect clients' opinions on key aspects
of the human factors, and on the clients’ customer satisfaction about the retail banking
services of Vietinbank Hanoi.
1.4.2. Data Analysis Methodology
The research will use descriptive statistics to describe the research variables;
using the reliability measuring scales such as Exploratory Factor Analysis (EFA) and
Alpha Cronbach; and linear multiple regression to evaluate the impact of independent
variables (human factors) on the dependent variable (customer satisfaction on service
quality).

1.5. Thesis Structure
The thesis is structured into five chapters:
Chapter 1: Introduction
Chapter 2: The Rationale for Retail Banking and the Human Factors in Creating
and Delivering Services
Chapter 3: Research Models and Methods
3


Chapter 4: Analysis of the impact of human factors on customer satisfaction on
retail banking services quality at Vietinbank Hanoi branch.
Chapter 5: Conclusion and Recommendations to Improve Customer Satisfaction

4


CHAPTER 2: THE RATIONALE FOR RETAIL
BANKING AND THE HUMAN FACTORS IN

CREATING AND DELIVERING SERVICES
2.1. Retail Banking Services
2.1.1.1 Definition of Retail Banking Services
According to the World Trade Organisation, retail banking is a typical service of
a bank where individual customers can physically come to the bank's branches to make
transactions and receive services such as making a deposit, taking a loan, making a
payment, checking account balance, card services, trading foreign currency, etc. In the
case of commercial banks, retail banking plays an important role in enhancing
competitiveness, expanding market share, bringing stable revenue and quality to banks.
In addition, it offers the opportunity to diversify banking products and services, crossselling opportunities with individuals and small businesses.
According to economists at the Asian Institute of Technology, retail banking is a
service providing banking products and services to individuals, small and medium
enterprises through network of branches, transaction offices, from which customers can
have direct access to banking products and services.
We can therefore understand that retail banking is a service that provides
financial products to individuals, households, small and medium enterprises.
2.1.1.2 Characteristics of Retail Banking Services
The size of the retail banking customers is large but the value of each transaction
is normally not as high.
The products of retail banking are diverse, covering nearly a whole range of
banking products such as: lending, sending money, making payments, money transfers,
guarantees, cards issuance, etc.
The development of retail banking is significantly dependant on the level of
information technology of the economy in general and the banking environment in
particular. For example, in developed countries, individuals can use the internet, smart
phones to make banking services such as money transfers, single bill payments, etc.
5


2.1.1.3 Role of Retail Banking Services

Retail banking plays an important role not only for banks, but also for the
economy of a country.
For banks, retail banking with product diversification is a stable source of
income for banks, reducing risks in banking operations, and enhancing the ability of
financial and monetary markets. .
For customers, retail banking services provide customers with a variety of
services, products, convenience, and security for customers.
For the economy, direct retail banking has transformed the economy from cashbased to non-cash, improving the state’s management effectiveness, reducing social
costs of payments and cash flows, avoiding wastefulness, losses. In addition, through
retail banking, the cash flow is enhanced and more efficient, utilizing and growing the
capital potential to help boost business, production and consumption, improving the
standards of living.

2.1.2 Qualiy of Retail Banking Services and Customer Satisfaction
about the Quality of Service
2.1.2.1 Definition of the Quality of Service
The concept of service quality and quality of retail banking
There are different definitions of quality of service today, but in general terms
the quality of service is reflected by what the customer experiences. Each customer has
different perceptions and needs, so the quality of service varies accordingly. According
to Edvardsson, Thomasson and Ovretveit (1994), quality of service is the ability to
provide a service that meets the expectations of customers and is customers’ feedback
after they have used the service. According to Lewis & Mitchell (1990) and Dotchin &
Oakland (1994), the quality of service is related to the ability of the service to meet the
needs or expectations of customers. According to Feigenbaum (1961), quality of service
is the customer's assessment based on actual experience with the product or service,
measured based on the customer's requirements - these requirements can be specified
regardless of whether it is conscious, purely subjective, or technical - and always
represent a dynamic target in a competitive market. According to Parasuraman et al.
(1985, 1988), quality of service is determined by the difference between customer

6


expectations of service and their evaluation of the service they receive. Parasuraman et
al. (1985) offers a five-gap model and five service quality components, referred to as
Servqual, which has been derived from "Service" and "Quality", and is considered by
many researchers. Servqual continues to be perfected by focusing on the concept of
"quality perception" of consumers because the quality of the customer is the most
objective assessment of quality of service.
From the above review, the quality of retail banking can be understood as the
ability to meet card services with the expectations of customers using retail services, or
in other words, all activities and added benefits that banks provide to customers with the
aim to inforce, enhance, and extend long-term partnerships with customers through the
creation of customer satisfaction.
2.1.2.2 Some basic theoretical models on quality of service
Five Gaps of Service Quality Model
Based on the results of interviews with a group of managers and customer
groups about service quality, Parasunaman et al. (1985) modeled quality of service with
five gaps in the perception of service quality of businesses and customers. These gaps
are the source of a quality level that does not meet customer expectations.
GAP 1: the difference between the customer's expectations and the perception of
businesses about customer expectations.
GAP 2: the difference between the perception of businesses about customer
expectations and the actions of businesses that reflect their standards for quality of
service.
GAP 3: the difference between the businesses’ standards for quality of service
and the actual service that the businesses deliver.
GAP 4: the difference between the actual service that businesses deliver and the
communication to the market and customers.
GAP 5: The difference between service expectations and service experiences

from the customers’ perspective.
Understanding the nature of these gaps will help businesses understand
customers more fully and deliver services that best fits customers’ expectations.

7


Figure 2.1: Five Gaps of Service Quality Model
Source: Parasuraman et al, 1985, p.44.
SERVQUAL Research Model by Parasuraman et al. (1985, 1988):
Based on the theoretical idea in Gronroos' model (1984), Parasuraman and al.
(1985) developed a composite measure, called SERVQUAL, to measure the perception
of service quality. The SERVQUAL scale consists of 22 Likert scale questions to
measure two factors simultaneously (1) expectation and (2) actual perception of
customers about service quality. Quality of service is determined by the difference
between the perceived value (after use of the service) and the value expected by the
customer (before using the service). This is one of the most commonly used models for
evaluating service quality in many different areas.
The original version of the SERVQUAL model consisted of 10 components,
including (1) access; (2) communication; (3) competence; (4) courtesy; (5) credibility;
(6) reliability; (7) responsiveness; (8) security; (9) tangibles; (10) knowing the
customer. By 1988, Parasuraman et al updated the model reducing it down to five
components (with 22 questions), including (1) reliability, (2) responsiveness, (3)
tangibles, (4) assurance, and (5) empathy. This is a common model of service quality
8


and is widely applied in marketing research. According to Parasuraman et al. (1988),
service quality can not be defined in general but rather depends on the customer's
perception of the service, and this perception must be considered based on a number of

aspects. Specifically, the five aspects of assessing service quality include:
-

Tangibles: reflected through the appearance, dress code of staff, equipment.

-

Empathy: reflected through the care dedicated to each individual customers.

-

Assurance: reflected through professionalism and politeness in delivery of
service, openness to customers.

-

Reliability: reflected through the ability to perform the service appropriately and
on time from the very first time.

-

Responsiveness: reflected through the willingness and readiness of staff to
provide timely service to customers.

With the current competition, the quality of service is an important factor for
organizations. Moreover, it is also considered vital for organisations to set themselves
apart from other organisations on the market. Quality of service will help organizations
gain competitive advantage.

SERVPERF Research Model by Cronin and Taylor (1992)

Based on the SERVQUAL model of Parasuraman et al. (1985), Cronin and
Taylor (1992) made amendments and produced the SERVPERF model, a by-product of
SERVQUAL. According to the SERVPERF model, service quality is defined as
perception of the level of fulfillment of customer needs, whilst in the original model, the
authors made a clear distinction between perception of the service quality and
expectation of service quality. This new approach has received positive appreciation
due to its simplicity and accuracy in customer assessment of service quality (Lee et al.,
2000); Brady et al., 2002). The SERVPERF measuring scale also uses 22 similar
questions as in the SERVQUAL model but it omits questions about expectations.
Similarly, the SERVPERF model is composed of five components: reliability,
responsiveness, assurance, empathy, tangibles.
2.1.2.3 Factors affecting quality of service
Past research studies show that customer assessment and perceptions of service
quality depend on a number of factors, including the factors specific to individual
9


companies, environment-related factors, and factors specific to individual customer’
characteristics.
Parasuraman et al (1985) studied and identified 10 service quality aspects
including reliability, responsiveness, competence, access, courtesy, communication,
credibility, security, knowing the customer, and tangibles. Silvestro and al. (1990) also
pointed out five other factors that affect quality of service: helpfulness, care,
commitment, functionality, integrity.
Gronroos (1990) also conducted similar research and identified six factors that
affect customer’s perception of service quality. These include professionalism and
skills, attitude and behavior, accessibility and flexibility, reliability and trustworthiness,
reputation and credibility, and recovery.
Sureshchandar et al. (2001) studied and identified five factors affecting service
quality, including: core service, human element, non-human element, tangibles, social

responsibility.
Factors that measure service quality vary greatly depending on the field of
research. The above mentioned studies point to a number of aspects associated with the
human factor in the process of creating and delivering services as a group of key factors
affecting customer perceptions of service quality.

2.1.3 Customer Satisfaction
2.1.3.1 Definition of customer satisfaction
Levesque and McDougall (1996) define customer satisfaction as the customer's
state / perception of the service provider after using their service. More specifically,
customer satisfaction is the emotional response / perception in its entirety of the
customer to the service provider on the basis of comparing the difference between what
they receive and what they had expected. This viewpoint is in line with the analyses of
Oliver (1999) and Zineldin (2000) on the nature of customer satisfaction.
Similarly, Kotler (2000) found that satisfaction is determined on the basis of
comparison between the value received from the service and customer expectations.
The author identified three states / levels of satisfaction, including: Unsatisfactory
(when the level of customer perception is lower than customer expectation), Satisfaction
(when the level of customer perception is equal to customer expectation), and Very
satisfied (when the level of customer perception is higher than customer expectation).
10


Understanding service quality is the result of understanding the gap between
service expectation and service perception; and satisfaction is also a comparison of
these two factors. When the gap between service expectation and service perception is
narrowed down to zero, then the customer satisfaction is considered attained.
Zeithaml and Bitner (2000) argue that the cost of services can greatly influence
perceptions of service quality, satisfaction and value. Zeithaml and Bitner have put
price variable into the model of customer satisfaction (in addition to 5 factors of service

quality model SERVQUAL) within the topic "Quality of service in water meter
installation in Ho Chi Minh City and recommendations ". The results show that there is
significant correlation beween the price variable and satisfaction from service quality.
Jamal and Naser (2002) described customer satisfaction as the highest fulfilment
of customer expectation, and as the perception or attitude of customers after using a
product or service.
2.1.3.2 Theoretical models on customer satisfaction
The model of American Customer Satisfaction Index - ACSI
In 1994, the American Customer Satisfaction Index (ACSI) was first published
(Fornell et al, 1996). The published ACSI model marks the evolution of the CSI system
by introducing customer satisfaction variables that are expectations, perceived quality
and perceived value. The application of customer satisfaction research is building and
strengthening customer loyalty. According to the model, one of the key factors in
building loyalty is the detection and handling of customer complaints with with regards
to their products in order to improve customer satisfaction and loyalty.
In the American Consumer Satisfaction Index (ACSI) model, perceived value is
influenced by customer perceptions and customer expectations. Then, the customer
expectations have a direct impact on customer perception. In reality, the higher the
expectations, the higher the perception of the product and vice versa.

11


Figure 2.2: The model of Customer Satisfaction Index - ACSI
Source: Fornell et al, 1996, p.8
Customer satisfaction index model of European countries:
The European Cuustomer Satisfaction Index (ECSI) model shows a number of
differences. Compared to ACSI, the image of the product or brand has a direct impact
on customer expectation. Customer satisfaction is therefore the combined effect of four
factors: image, perceived value, perceived quality of tangibles, and perceived quality of

intangibles. Typically, the ACSI is generally applicable to the public sector, whilst the
ECSI is often used to measure products, product-selling business sectors, and services
targeted for individual customers.
The goal of the ECSI model is to explain customer loyalty to a product, a
business, or a country through customer satisfaction indeces when either directly or
indirectly influenced by image, expectations, perceived value (of product or service)
and the perceived quality of the product or service.

12


Figure 2.3: Model of customer satisfaction ECSI
Source: Birkett, 2017, p.1
2.1.3.3 Factors affecting customer satisfaction
According to Nguyen Phuong Hung (2001), customer satisfaction is affected by
a number of factors, which can be categorized into four main groups: product
specification, situational circustances, and personal characteristics.

Figure 2.4: Model of factors affecting customer satisfaction
Source: Nguyen Phuong Hung (2001)
Many studies indicate that quality of service is the cause (source) of customer
satisfaction. Although there are still many concepts regarding the nature of satisfaction
that result from varing perspectives, most researchers believe that the quality of service

13


and customer satisfaction are correlated (Cronin and Taylor, 1992; Spereng et al.,
1996).
A number of recent studies have looked at the components of and factors

influencing service quality as well as the important factors affecting customer
satisfaction (Lassar et al. 2000).

2.1.4 The human factor affecting customer satisfaction
Among these factors, the human factor plays an important role because it is
present throughout and a crucial factor in the process of creating and providing services.
In addition, customers must participate in the service creation process, and have regular
interaction with staff, so the human factor as well as service creation and delivery factor
play an important role in service quality perception and customer satisfaction.
Listed hereafter are some aspects associated with the human factor that are
analyzed and recognised by past studies that affect customer perception of service
quality and customer satisfaction.
2.1.4.1 Human factor from SERVQUAL model
In the SERVQUAL model, a number of human-related factors have been
identified suggesting that the human factor plays an important role in customers’
assessment of service quality. This model mentions four human factors, including
reliability, empathy, assurance, and responsiveness.
Reliability:
Reliability refers to the ability to provide accurate, timely, and reliable service.
This requires consistency in service delivery and respect of commitment and promise to
customers. Staff and controller are the front-face to directly communicate with
customers, as well as an important factor in bringing satisfaction to customers. In order
to gain reliability, employees need to comply with a number of important criteria:
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Ensure confidentiality of customers’ personal information; prohibit its use for
any other purpose without constumers’ consent;

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Recognize and manage well the invoices, transaction documents; transfer
information clearly, accurately, and transparently; ensure service reliability in
customer perception;

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