Tài liệu Determinants of customer satisfaction in life insurance companies

Business Assignment: Method Assignment ABSTRACT This paper aims to propose and analyze four dimensional quality instruments which is affecting on satisfaction of customers in life insurance companies as well as provide some solutions to satisfy the customer in this industry. It is suggested to investigate the effects of the proposed service quality instruments on customer satisfaction (‘service quality’, ‘Brand quality, ‘Product quality’, and ‘Functional quality’). The proposed framework attempts to provide a blueprint for appropriate course of action (by life insurance service providers) to create a base of satisfied customers through quality services. All mentioned-information from the paper is based on the expectation from 282 potential customers and some existing customers who have at least one policy with particular life insurance companies. Key words: customer satisfaction, customer’s complaints, service, customers, life insurance companies. Dam Xuan Thuy Page 1 Business Assignment: Method Assignment CHAPTER 1: INTRODUCTION Customer behavior is changing rapidly. Technology, and in particular the growth of online and social media, is driving a fundamental shift in customer expectations in terms of how products are marketed, priced, sold and serviced, and how companies are perceived. Customer satisfaction is always a question mark in minds of sellers as it is very difficult to find that what exactly customer wants from the seller. Customers have particular opinions on their purchase or consumption experience from a product or service they use. Nowadays, many organizations are realizing that time have been passed to keep the customers only on price, but need to fulfill their desires, expectations and needs in relation to the service. Though customers are the main concern and precious asset that is why most of the companies are thinking their current and future needs by analyzing customer satisfaction. Life insurance players have started realizing that their business depends on customer satisfaction. Moreover, in today’s competitive environment delivering high quality service is the key for a sustainable competitive advantage. Customer satisfaction does have a positive effect on an organization’s profitability. Success in business is strongly related to the customer satisfaction factor. Customer is the life of a business, means a business cannot be imagined without customer. Therefore, it is really an important element to deal with a great care, otherwise failure in this challenging task can bring disaster which destroys the existence of a company in the market. The more customers are satisfied with products or services offered, the more are chances for any successful business as customer satisfaction leads to repeat purchase, brand loyalty, and positive word of mouth marketing. Customer satisfaction leads to repeat purchases, loyalty and to customer retention (Zairi, 2000). 1.1. Problem statement When the business is much more challenging and competitive, companies benefit is relatively higher from customer satisfaction (Jobber, 2010). Most of the companies Dam Xuan Thuy Page 2 Business Assignment: Method Assignment are shifting from product oriented to service oriented to make their customers satisfied. Companies are paying their attention on customers’ needs and desires to ensure better services to keep customers with them. So, nowadays companies are much more concerned about customer´s expectations and what they are providing to customers. (Kotler and Armstrong 2008, p. 218). As many other financial services, the life insurance industry is facing a rapidly changing market, new technologies, economic uncertainties, fierce competition and more demanding customers and the changing climate has presented an unprecedented set of challenges. Just like companies of other business domains, life insurance also considers their customers as the most important assets. It is not like other fast-moving industry, insurance product is intangible one, this is one of the issues that these companies have to gain trust from the customers. Vietnam's insurance market with recent years has strong growth, increasing diversified products, improving service quality thanks to the political, economic stability, it includes open policy making Vietnam become an attractive market for investors. Actually, life insurance is relatively young in Vietnam market – just for fifteen years. This industry is very potential for exiting companies and new entrances, that’s the reason why many commercial and state banks start to look at this market, some of them has started the joint-venture entity by co-operating with multi-national and experienced financial institutes (e.g: BIDV with Metlife, Viet Tin Bank with Aviva with, etc…). Beside that, some potential new entrances start to build their business by meeting with the Government for a discussion. Life insurance providers increasingly recognize that today's customers who insist on improvements in quality of services have many alternatives and, therefore, may more readily change providers if not satisfied. This is evident from the not so uncommon practice of ‘policy lapses’ readily embraced by dissatisfied policy holders. Due to the intensive competition leading to improved service making customer satisfaction is the top concern of the life insurance companies. Furthermore, a fit financial investment product to the customer’s needs is also very important. This paper is also focused on agent forces, they are called Financial Dam Xuan Thuy Page 3 Business Assignment: Method Assignment Consultant (FC) in life insurance industry, this force is the first one to approach and build the company’s image with the customer as insurance product is invisible one, just based on the trust, relationship and company reputation. Whatever good product, price, however, the representative for the firm and company’s capability are the most important factors that bring the customer to make decision or select the insurance products. Beside the mentioned-factors, customer service staff from some big life insurance companies (e.g. Prudential, Manulife, AIA, Dai-ichi Life) often receive lots of questions and complaints from customers that life insurance companies make very little effort to retain them at the point of lapse, no caring program such as small gifts or congratulation card on special days, level of repeat purchase is very low, and with a few exceptions. Moreover, customers do not fully understand the product as well as policy they purchased as they tendency to build relationships with providers who they trust and make it convenient for them. Therefore, some FCs have abused their existing relationship, not provided clearly consultation to the customers before signing the policy. Customers do not have enough information about the product they select for themselves or their beloved ones as most of FCs has tendency to introduce positive points of the products/policy than clear mention the terms or conditions which the customer may lose if they do not commit to the policy. They do not have good impression on FC’s behavior. This leads to the disappointment from the customers with the insurance agent, creates difficult approach for agents with the customer at the first time for an appointment if they do not know each other before. This study is to give a chance for life insurance companies listening to the voice of the customer as well as find out the factors affect on customer satisfaction. 1.2. Research objectives The main objective of this study was to identify the determinants of customer satisfaction as well as the key factors affecting the customer satisfaction when they decide to become a policy owner; and provide some solutions to improve the satisfaction of the customer. Specifically, this study was conducted to achieve the three objectives in the following: Dam Xuan Thuy Page 4 Business Assignment: Method Assignment - Identifying the key factors affecting the customer satisfaction in life insurance companies; - Determining level of satisfaction; - Proposing some recommendations to improve the customer satisfaction. 1.3. Research questions The study focus on answering the following question: - What are the key factors affecting the customer satisfaction in life insurance companies? - How do we measure the customer satisfaction? - What are the solutions to improve the satisfaction of customers? 1.4. Scope of the Research The object and scope of research are existing and potential customers in Ho Chi Minh City. The potential customers may or may not been a policyholder with any life insurance company. The study focuses on aspects of customer satisfaction. x Time: conduct survey during one month from July 10th to August 15th, 2014. x Space: Expect having 282 respondents. CHAPTER 2: LITERATURE REVIEW AND HYPOTHESES 2.1. Framework of thesis The thesis consists of five sections as the key sections briefing the theory to understand the definition of customer, types of customer, benefit of customer satisfaction; the factors affecting on satisfaction of the customers; measurement of customer satisfaction; and development of customer relationship. This part is also shared some studies and models of customer satisfaction. Dam Xuan Thuy Page 5 Business Assignment: Method Assignment 2.2. Customer Satisfaction 2.2.1. What is customer? Customer can be an individual person or organization. Individual customers purchase products and services for their own users or for others like a gift (Kardes et at. 2008, 8) whereas, “Organizational consumers purchase goods and services in order to produce other goods or services, resell them to other organizations or to individual consumers and help manage and run their organizations”. According to McNearly (1994), the customer can be something else by following below descriptions. These description can be overlooked by some of the organizations even can be treated as being irrelevant. Customer is a person or organization that a marketer believes will benefit from the goods and services offered by the marketer’s organization. As this definition suggests, a customer is not necessarily someone who is currently purchasing from the marketer. In fact, customers may fall into one of three customer groups: existing customers, current customers, potential customers. As a result of competitive market and more intensive nowadays in life insurance industry, customers are searching more information about the products and services. The companies which are meeting up the expectations of the customers are being able to keep them in future business, ability of purchase repeat will be increased. 2.2.2. Types of customers There are lots of classification methods to differentiate types of customers. For instance, the two principal categories are divided as external customers and internal customers (Grigoroudis & Siskos, 2010, 9). 2.2.2. External customers: refers to the customers in a marketplace who are paying for the final products and services. 2.2.3. Internal customers: refers to the customers within the organization who get the output directly from the company or even from the suppliers. Dam Xuan Thuy Page 6 Business Assignment: Method Assignment 2.3. Definition of customer satisfaction Customer satisfaction measures how well the expectations of a customer concerning a product or service provided by the company have been met. When customers are satisfied, they will continue their business and will not try to find out another one. This is the business strategic matter, is called customer satisfaction. According to Chuck, customer satisfaction is the fulfillment of the customer’s enjoyment attained when products or services meet their needs and expectations (Chuck 1998, 3). Tse and Wilton (1988) elaborated hunt definition where they said “customer satisfaction is a process of consumer’s response to the evaluation of the perceived discrepancy between prior expectations and the actual performance of the product as perceived after its consumption”. According to Kotler, customer satisfaction is the response with pleasure or disappointment for the performance of certain product or service related to individual expectations (Kotler 2008, 36). “A customer is satisfied once his/her needs, real or perceived are met or exceeded” (Gerson 1993,13). Another author (Hunt, 1977) defines customer satisfaction as a process of evaluation rendered that the experience was at least as good as it was supposed to be. Customer satisfaction is the most important element of marketing. In order to achieve, enhance and maximize customer satisfaction requires a lot of tangible and intangible resources. Moreover, customer satisfaction is the key determinant of success in the service industry (Bigne JE, Sanchez, 2009 and Bruhn M. Georgi D., 2011). Satisfaction is only achieved when the needs and expectations of customers are met or exceed. Obviously, customer is vital of the company, the growth of the life insurance companies depend on the number of customers called policy owners. Focusing on the customer’s perceptions of service quality as it helps in developing strategies that lead to customer satisfaction, especially in the this industry where they are looking at the life time value of the customer base rather Dam Xuan Thuy Page 7 Business Assignment: Method Assignment than focusing on the cost of transactions. Some researchers argued that service quality is the antecedent of customer satisfaction. Everyone is trying to improve quality of its products. Thus, an analysis of service quality perceptions from customers’ perspective is of paramount importance in the today’s competitive environment. So, the present study is an attempt to identify the determinants of customer satisfaction in life insurance companies, determining affect factors and how to improve the level of satisfaction. Many empirical studies have shown that customer satisfaction secures future revenues (Bolton, 1998; Fornell, 1992), reduces future transactions costs (Reichheld and Sasser, 1990), decreases price elasticity (Anderson, 1996), and minimizes the likelihood of customers defecting if quality falters (Anderson and Sullivan, 1993). Customer satisfaction is regarded as customers can get more benefits than their cost (Liu and Yen, 2010). Shamsuzzaman, Md. (2012) to determined the customer satisfaction levels of National life Insurance Company limited (NLICL), Khulna branch and to recommend suggestions. Shahzan Khan (March 2013) emphasized the role of relation base marketing contribution towards customer value which leads customer satisfaction. Relation base marketing is social process between seller and buyer. The value added services can further be enriched with help of relation base marketing. Norsk Kundebarometer showed in the automobile industry, out of 76% customers who were satisfied, 78% were also loyal (Kristensen et al., 1998). Thus since the cost of attracting new customers are higher than the cost of keeping the current customers, satisfaction and loyalty. Timm (1990) stated that an average company loses 20% of its customers annually due to the dissatisfaction. Reichheld and Sasser (1990) found that as customer loss decreased by 5%, profitability increased by 35% to 85% depending on the industry. Previous researchers have given significant importance to customer satisfaction. Satisfaction can be defined as a features or characteristics that can full the either a need or want of a consumer in better way than competitors. Kamal Gulati, Arvind Kumar, V. Ravi (2012) measured the difference between customers’ perceptions and expectations based on five generic dimensions. Parasuraman et al. According Dam Xuan Thuy Page 8 Business Assignment: Method Assignment to Hansemark and Albinson (2004) “satisfaction is an overall customer attitude towards a service provider, or an emotional reaction to the difference between what customers anticipate and what they receive, regarding the fulfillment of some needs, goals or desire“. Customer loyalty on the other hand refers to a deeply held commitment to re-buy a preferred product or service in the future despite situational influences and marketing efforts having the potential to cause switching behavior (Oliver, 1997). There are many definition of customer satisfaction, however, the satisfaction always link with following elements: x Attitude toward the service providers; x Customer’s expectation of the ability to meet its expectation; x Value of service and results of the service implementation x Intent of willing to continue using the service. 2.4. Benefits of customer satisfaction Customer satisfaction will keep company business growing as they are buying more products at a time. Along with these activities they are also referring the company to their family members, friends and others. When the customers satisfy, then the referrals are increased, and switching to competitor is reduced, the company’s revenue and profit are increased. In life insurance companies, the first policy is just to start the journey of building relationship, there are many potential customers who are their relatives, friends or colleagues. These potential customers will evaluate the company’s service before they join as a policy owner. When the customer are satisfied, the opportunities of further relationships are increased in the future. Forrester (2014) once again found a high correlation between customer experience and consumers’ loyalty to a company. Firms with high Customer Experience Index (CXi) scores have more customers who purchase again, don’t switch to competitors, and recommend the company. Dam Xuan Thuy Page 9 Business Assignment: Method Assignment Customer satisfaction will bring the company to achieve the target. Customer satisfaction has a positive effect on an organization’s profitability. Customer satisfaction leads to repeat purchases, loyalty and to customer retention (Zairi, 2000). Reduced price sensitivity Reduced switching to competitors Increased profits Increased repeat purchase Increased referrals Figure 1: The benefits of customer satisfaction 2.5. The factors affecting on satisfaction of the customers From literature review, there are many factors that affect customer satisfaction. Such factors include friendly employees, courteous employees, knowledgeable employees, helpful employees, service quality, (Hokanson, 1995). From the studies carried out in many countries, factors like: service quality, and perceived value, are the key constructs affecting the customer’s satisfaction with mobile services. Studies also point out that customer satisfaction results ultimately in trust, price tolerance, and customer loyalty. Therefore, building customer relationship is a backbone for all organizations in general, and companies in life insurance industries in particular. Issues like: customer satisfaction, service quality, customer perception, customer loyalty, are the main concerns of the nowadays in Dam Xuan Thuy Page 10 Business Assignment: Method Assignment service companies, which improves organization’s performance and translates into more profits. 2.5.1. SERVQUAL model Reliability Responsiveness Tangibles Satisfaction Assurance Empathy Figure 2: Relationship between service quality and customer satisfaction Model (SERVQUAL, Parasuraman, 1998) 2.5.2. Perceive service quality model Perceive service quality Expectation Market information Experience Picture Picture Word of mouth Customer needs Knowledge of customer Dam Xuan Thuy Results / Technical Quality Process / Functional Quality Page 11 Business Assignment: Method Assignment Figure 3: Perceive Service Quality Model (Gronroos, 2000) 2.6. Level of satisfaction measurement 2.6.1. Measuring customer satisfaction Any company can measure the level of customer satisfaction by using the Philip Kotler’s (2003, 64) four methods for tracking and measuring customer satisfaction. According to Kotler that there are different reasons those can satisfy customers but each and every improvement of service and product does not necessarily satisfy the customers or increase company’s profit. Firsly, suggestions and complaints to the company are to register and store including the complimentary customer service numbers and emails through some specific system so that they can be used in the future for a betterment of communication between customers and the company. Secondly, a customer satisfaction survey is to implement which carries out the satisfaction level whenever customers are satisfied or not. Based on the customer’s feedback through conducting survey, the companies can change their business strategy or make any improvement. Thirdly, manager can hire some people to buy the products or services so that latter on the company can evaluate the people’s buying experience. And finally, companies can find out the customers, who have already left their products, asking the reasons behind their dissatisfaction. In addition, the companies need to equip the system to track the customer losing rate. Customer satisfaction is the key factor determining how successful an organization will be in customer relationship; therefore, it is very important to measure it (Fecikova, 2004): x Satisfied customers are more likely to share their experiences with other people, even up to five or six people. In the same vein, dissatisfied customers are more likely to tell ten other people of their unfortunate experience. x It is important to realize that many customers do not complain, and this will differ from one industry sector to another. Dam Xuan Thuy Page 12 Business Assignment: Method Assignment x If people believe that dealing with customer satisfaction/complaints is costly, they need to realize that it costs as much as 25 per cent more to recruit new customer. Satisfied customers are more likely to return to those who have supported them while dissatisfied customers are more likely to go elsewhere next time. Therefore, retention of satisfied customers is the key to organizational survival (Fecikova, 2004). The starting points for effectively measuring a customer satisfaction are the Following steps (Fecikova, 2004): - Customer identification: they are the purpose of company activities instead of their depending on a firm, organizations very much depend on them. Accurate information about the customers can help the company to provide products and services with match their needs. Customer can be defined both internal (employees) and external customers (is seen as a cause-and-effect relationship) - Understanding what customer satisfaction includes and what it means; - Defining what needs to be measured: many companies identify the level of customer satisfaction through the number of direct complaints by phone, email or even at premise; number of product support problem calls; number of returned products and the reason of returning. The criteria for the measurement of customer satisfaction must be defined by the customer (Fecikova, 2004). From life insurance companies, measurement of customer satisfaction is the repeat of purchasing insurance products or introduction to relatives or friends. It also includes no evil tidings from media, newspapers; - Choosing the measurement method: appropriate methodology needs to be found to gather and explore customer feedback. The methods to use include questionnaires by emails, by post, direct interviews, telephone interviews, marketing research and so on. The validity and relevance of the data gathered through these methods also varies. However, the most commonly method for satisfaction is using prepared questionnaires. Customers are give more service related questions is asking them to evaluate their satisfaction using scales from 1 to 5 such as how likely they are to choose company’s service, how likely Dam Xuan Thuy Page 13 Business Assignment: Method Assignment they are to recommend the firm to others, how they satisfy with the service quality of the company, profession of staff/agents, etc…). It is also to ensure the answers are truthful and to be filled in by a person who is competent to respond. Usually, the effective method is conducting customer satisfaction survey. By surveying regularly, companies can develop their whole business strategy as to satisfy customers (Lin and Jones, 1997, 4). Companies try to maintain their loyalty with their customers by improving product and service quality. As a result in the last decade, many national indices have been developed in order to measure consumer satisfaction. Thus, at the national level, the customer satisfaction index (CSI) is used to measure companies and organizations how they satisfy customers’ needs. Kritensen et al. 1998 performed analyses based on data from the American Customer Satisfaction Index 1994 (NQRC, 1995). The result showed a strong correlation between customer satisfaction and loyalty. Customer loyalty will help to increase company’s revenue as they will introduce the financial plan to their friends, relatives. 2.6.2. Customer relationship development Customers are the heart of a business because if the product cannot satisfy them then the customers will not buy anymore as a result the company will not be able to run the business and get profits. It means that the company has to make the strong working relationship with customers in mean of mutual support, trust, and goals. Through market analysis, treating the customers’ complaints in a positive way, ensuring the quality products or services can increase the sales, keeping the good relationship with customers can increase repeat purchase in future. It may increase having good relationship with support staffs such as receptionist or a department secretary might be such kind of decision maker, this because potential customers before buying products, some of them would like to take other peoples’ opinions and this kind of customer behavior affects selling too much. Internal relationship among the employees is also important as well as customer relationship because every company has different departments and these departments are figuring out Dam Xuan Thuy Page 14 Business Assignment: Method Assignment the whole business market of the company. Such as market research and finance departments can give market views of the products on different factors. Atmosphere of the working environment of a company is an important issue for establishing good relationship strategy because if the company management has the good relationship and open communication then they can share their opinions, different information to improve the products and services. CHAPTER 3: CURRENT SITUATION 3.1. Overview of Life Insurance industry In the tough social economy raises new factor stimulating demand for life insurance. Recently, the image of European people is published on mass media having struggle life such as: employment, health, education, housing, published on mass media. Moreover, trouble of essential commodities has been increased such as food, medicine, school fees, petrol, electricity and water has made Vietnamese people consider for savings, especially for education, medical treatment, housing for children, and for themselves at retirement age. Beside that, the attract idle money channel from residential as securities, real estate, savings in the bank, gold and dollars are less attractive has made people choose life insurance products, they would have accumulation, moderate profitability, protecting from the natural disasters, accidents and disease occur. Therefore, life insurance market in Vietnam in 2013 had significant growth. And reached 11.052 billion, increased 19.5% compared to the same period of last year in the first six month of the year 2014 (data announced from Ministry of Finance). Actually, Vietnam is very potential market in Asia, a market with population of 87 billion people and only 10% of them having life insurance contract, while at least 30% of families in Vietnam is capable of participating insurance based on their stable income. Dam Xuan Thuy Page 15 Business Assignment: Method Assignment 3.2. Necessity of life insurance Individual’s safety needs is eternal in our society. Through our life, people always find the way to protect themselves for unexpected circumstances. Social and health insurance is applied in many countries with the purpose is to ensure that people has standard of benefits, however, subjects covered and scope are limited. People are interested in other issues in their life such as satisfaction of the demands in the life. In fact that people do not always see all positive living conditions. There are many such cases have difficulty unexpected illness, accident, lost or reduced income. So, in order to avoid any financial difficulties, ensuring stability of life for individuals and their families, prepare good conditions in the future such as education for children, life insurance products can solve these problem in the people’s life. In general, there are four major threats to the people’s security, they are: unemployment, loss of employment ability, death and old age. Life insurance is the only tool that contains the above-mentioned elements against these threats. 3.3. Market share The market continues to be dominated by five or six now (Prudential, Bao Viet, Manulife, AIA, Dai-ichi, ACE, these businesses accounted for approximately 90% of sales of new mining contracts. Most of the leading enterprises always increase Dam Xuan Thuy Page 16 Business Assignment: Method Assignment new sales and this was quite a large proportion of the total growth of the whole industry. In the year of 2013, total revenue was estimated at 22,650 billion with growth of 23.1% in the first quarter, growth chart 26%. Last year, Sunlife PVI achieved special revenue reaching to 1,000 billion which is contributed significantly to the growth of life insurance industry. Total amount of insurance benefits payment was 8,095 billion, the total amount of investments into the national economy about 81,000 billion up 24%. The total number of insurance contracts reached 5,204,727, number contracts increased 9.2%. Revenue (interest) of investment activities was estimated at 8,778 billion, and the average interest rates paid out at these companies were 10.5% which is than the bank deposit rates. This shows that purchasing life insurance would bring a better protection and interest for the insured. CHAPTER 4: RESEARCH METHODOLOGY This section will describe hypothesis of research model, proposed research model, an overview of data collection and its procedure which help researcher consolidate the factor affecting customer satisfaction; and the last part will be mentioned on the reliability and validity. 4.1. Hypothesis for research model The hypothesized research model is based on an assessment of factors affecting on customer satisfaction when they use the service or purchase a life insurance product. In this research model has four factors affecting on satisfaction including: - Service quality: has positive relationship with customer satisfaction - Brand quality: has positive relationship with customer satisfaction - Product quality: has positive relationship with customer satisfaction - Functional quality: has positive relationship with customer satisfaction. The questionnaires consist of five parts, each of which serves a different purpose. Dam Xuan Thuy Page 17 Business Assignment: Method Assignment It tested the independent variables (Functional Quality, Product quality, Brand Quality, and Service Quality), the dependent variable (customer satisfaction), and demographic factors. The data collected through the questionnaires were cleaned, encrypted and input into the Statistical Package for Social Sciences (SPSS) system. The target population for the study consisted of non-policy owners and policy owners who have purchased particular insurance products or used to experience the service quality of life insurance companies. Service Quality Brand Quality Satisfaction Product Quality S Functional Quality Fingure 4: Proposed research model The equations show the relationship between these factors and the level of customer satisfaction with the following format: Y = E0 + E1X1 + E2 X2 + E3 X3 + E4 X4 Y is the dependent variable represents the predicted value of the satisfaction level of customers. - E0, E1, E2, E3, E4, are the regression coefficient. - X1, X2, X3, X4, are the independent variables in the following order: Service Quality, Brand Quality, Product Quality, and Functional Quality. Dam Xuan Thuy Page 18 Business Assignment: Method Assignment Based on the theory of customer satisfaction and the results of previous relevant researchers, a conceptual model is proposed. According to Gronhaug & Ghauri (2005, 40) research methodology refers to the collection of data and analysis. Several rules and procedures are being used as the tools or ways to solution of a specific problem or task. Problem / Task Solution/Answer Method Figure 5: The use of research method (Gronhaug & Ghauri 2005, 40) Research method can be either qualitative or quantitative so one has to decide which method should be implemented before starting any research. Qualitative method does not contain numeric characteristics, it is an interpretation and rational. In this process oriented research method, the analysis of the data mostly depends upon the skills and knowledge of the researcher (Ghauri and Gronhaug 2010, 103105.). According to Philip Kotler et.al. (2008) qualitative research is based on gathering qualitative data or information and understanding them on the basis of attitudes, feelings and motivations of the product users (Kotler et al, 2008, 335). On the other hand, according to Malhotra (2005, 43) quantitative research is based on numerical character and is aimed at qualifying the data through statistical analysis. 4.2. Factors affecting on satisfaction 4.2.1. Service quality An assessment of how well a delivered service conforms to the customer’s expectations. Service business operators often assess the service quality provided to their customers in order to improve their service, to quickly identify problems, and to better assess customer satisfaction. Dam Xuan Thuy Page 19 Business Assignment: Method Assignment i) Service Services include all economic activities which are intangible, not physically apparent like products, which provide value to the customer. Service has become very crucial in all business industries due to globalization and the information technology developments. Services are now seen almost to every part of our life, starting from the most essential demands. Service is not bound to only service based businesses, but it is found on all companies strategic tools for gaining a competitive advantage. Service quality is an assessment of how well a delivered service conforms to the customer’s expectation. Gronroos (2001) offer a comprehensive definition of services as “an activity or series of activities of a more or less intangible nature than normal, but not necessarily, take place in the interaction between the customer and service employee and/or physical resources or goods and/or system of service provider which are provided as solution to customer’s complaints. ii) Quality Quality plays a significant role in determining and influencing customer satisfaction as well as measure the level of satisfaction. Quality is one of the most expected aspects by customers of almost all service product (Urban, 2009). Before quality can be managed it must be defined (Roneau, et al., 2006). Quality is the main construct forming satisfaction and making the background of customer’s perceived value, therefore, it is useful to take an in-depth look at the nature of quality. Quality of services can be the difference between success and failure in both service and manufacturing firms. Service quality, customer satisfaction and customer value have become the main concern of both manufacturing and service organizations in the increasingly intensified competition for customers in today's customer-centered era (Wang et al., 2004). As a result, many organizations are paying increasing attention to improve service quality. Service quality improvements will lead to customer satisfaction and cost management that result in improved profits (Stevenson, 2002). Dam Xuan Thuy Page 20