Suggestions to improve customer satisfaction towards vat cach port’s service quality

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MINISTRY OF TRANSPORTATION MINISTRY OF EDUCATION & TRAINING
VIETNAM MARITIME UNIVERSITY
STUDENT NAME: ĐẶNG TUYẾT MAI
DISSERTATION
GLOBAL STUDIES AND MARITIME AFFAIRS
SUGGESTIONS TO IMPROVE CUSTOMER SATISFACTION
TOWARDS VAT CACH PORT’S SERVICE QUALITY
HAI PHONG – 2015
MINISTRY OF TRANSPORTATION MINISTRY OF EDUCATION & TRAINING
VIETNAM MARITIME UNIVERSITY
STUDENT NAME: ĐẶNG TUYẾT MAI
CLASS: GMA02
DISSERTATION
GLOBAL STUDIES AND MARITIME AFFAIRS
SUGGESTIONS TO IMPROVE CUSTOMER SATISFACTION
TOWARDS VAT CACH PORT’S SERVICE QUALITY
Supervisor: Vu Thi Thu Hang
Division: Global Studies and Maritime Affairs
Faculty: Economics
HAI PHONG – 2015
Suggestions to improve customer satisfaction towards Vat Cach port’s service quality
PREFACE
The work outlined in this dissertation was carried out at Vat
Cach port, where I undertook in internship, over the period from
August 2015 to the end of September 2015.
I declare that this report is my own unaided work. It has
not been submitted before.
If violated, I am solely responsible for and bear the
punishments of the Institution and University.
Student Name and Signature
Đặng Tuyết Mai
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Suggestions to improve customer satisfaction towards Vat Cach port’s service quality
ACKNOWLEDGEMENT
This internship report would not be completed without the
help and cooperation of the following people. First of all, I would
like to express my sincere appreciation and gratitude to Ms. Vũ Thị
Thu Hằng and Mr. Vũ Lê Huy for the guidelines given, which were
very helpful for me to understand and prepare the structure of the
report.
And I would like to thank all stafs of Vat Cach Port joint stock
company who gave me necessary help, support and information to
complete this report successfully.
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Suggestions to improve customer satisfaction towards Vat Cach port’s service quality
TABLE OF CONTENTS
PREFACE..............................................................................................i
ACKNOWLEDGEMENT..........................................................................ii
TABLE OF CONTENTS.........................................................................iii
LIST OF TABLES...................................................................................v
LIST OF FIGURES................................................................................vi
INTRODUCTION...................................................................................1
 The importance of research..............................................................1
 Target and research scope...............................................................2
 Methodology.....................................................................................2
 Research results...............................................................................2
 Layout of the dissertation.................................................................2
CHAPTER 1: LITERATURE REVIEW.......................................................3
1.1. Service quality and Port service quality.......................................3
1.2.1. Service quality..........................................................................3
1.2.2. Port service quality...................................................................3
1.2. Customer satisfaction..................................................................4
1.3. Relation between customer satisfaction and port service quality 5
1.4. RATER model...............................................................................6
1.5. Important - Performance matrix...................................................8
CHAPTER 2: CUSTOMER SATISFACTION TOWARDS VAT CACH PORT’S
SERVICE QUALITY..............................................................................11
2.1. Introduction about Vat Cach Joint stock company......................11
2.1.1. General information................................................................11
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Suggestions to improve customer satisfaction towards Vat Cach port’s service quality
2.1.2. Main services..........................................................................12
2.1.3. Facility 12
2.1.4. Organizational structure of Vat Cach Port...............................14
2.2. Evaluation of Customer satisfaction towards Vat Cach port’s
service quality..................................................................................16
2.2.1. Research method....................................................................16
2.2.2. Analysis of customer satisfaction towards Vat Cach port’s
service quality 19
CHAPTER 3: SUGGESTIONS TO IMPROVE CUSTOMER SATISFACTION
TOWARDS VAT CACH PORT’S SERVICE QUALITY...............................27
3.1. Identifying and analyzing prioritized factors that need to be
improved. 27
3.1.1. Factor REL3: “The port always provide service in a consistent
manner” 28
3.1.2. Factor REL5: “The port always produces error-free invoice and
related documents”..........................................................................28
3.1.3. Factor A3: “The staf uses the technology quickly and skilfully”
28
3.1.4. Factor RES2: “The port always provides satisfactory answers
towards any comments”...................................................................30
3.2. Suggestions to improve the service quality of Vat Cach Port.....30
3.2.1. Factor REL3: “The port always provides service in a consistent
manner” 30
3.2.2. Factor REL5: “The port always produces error-free invoice and
related documents”..........................................................................31
3.2.3. Factor A3: “The staf use the technology quickly and skilfully”
31
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3.2.4. Factor RES2: “The port always provide satisfactory answers
towards any comments”...................................................................32
CONCLUSION....................................................................................33
REFERENCE.......................................................................................34
APPENDIX – QUESTIONNAIRES..........................................................36
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Suggestions to improve customer satisfaction towards Vat Cach port’s service quality
LIST OF TABLES
Table 1. Vat Cach port's wharf system..................................12
Table 2. Quay system................................................................13
Table 3. The number of equipment of Vat Cach Port JSC. . .13
Table 4. List of variables..........................................................17
Table 5. Summary of the customers’ expectation score....19
Table 6. Summary of the customers’ perception score......22
Table 7. Summary of gap score between expectation and
perception...................................................................................24
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Suggestions to improve customer satisfaction towards Vat Cach port’s service quality
LIST OF FIGURES
Figure 1. Importance-Performance Matrix..............................9
Figure 2. Vat Cach JSC headquarter.......................................11
Figure 3. Organizational Structure of Vat Cach Port JSC....14
Figure 4 . Distribution of the expectation score of these
variables......................................................................................21
Figure 5. Distribution of the perception score of these
variables......................................................................................24
Figure 6. Importance-Performance matrix of individual
variables......................................................................................27
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Suggestions to improve customer satisfaction towards Vat Cach port’s service quality
INTRODUCTION
 The importance of research
It goes without saying that seaports play a vital role in the
regional and national economy. They are not only the places of
loading/unloading cargoes onto/from vessels but also the
distribution centers where value-added services take place. With
the advantage of locating near the international maritime route,
maritime transportation plays a crucial role in foreign cargo
trading of Vietnam. In recent years, because of the Government’s
open policies as well as the high growth rate of national economy,
the amount of cargoes traded through ports in Vietnam has
increased dramatically. The number of ships docking at
Vietnamese ports also rose, leading to the high demand for
services supporting for those ships. Although the volume of
exporting and importing cargoes through Vietnamese ports
increased rapidly, especially containerized cargoes, majority of
Vietnamese ports are still considered not to utilize their capacity.
The location of port, quality of equipment and facility as well as
the production management in port and transportation are the
elements causing the delay of ships docking at Vietnamese ports,
reducing cargo handling capacity, hence reducing the attraction of
Vietnamese ports to ships from outside. In addition, Vietnamese
ports also reveal several drawbacks, namely the outdated
equipment and facility which have been used for years without
being invested to upgrade or improve. Consequently, those
equipment and facility are easy to be broken and cost a long time
for repairing. Other related factors can be named as the relatively
high price and staf with insufcient ability in handling cargoes,
causing loss or damage to cargoes and low level of satisfaction
among customers.
During the time doing internship at Vat Cach Port Join Stock
Company, by interview and through self-observation, I noticed that
the company is well aware of the importance to improve service
quality in order to acquire higher satisfactory level among their
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Suggestions to improve customer satisfaction towards Vat Cach port’s service quality
customers. However, there has not been any researches on this
fields before. Therefore I decided to choose this issue of improving
customer satisfaction towards Vat Cach Port’s service quality to be
my topic for dissertation.
Contemporarily, there have already been a number of
researches looking into topics such as, the importance of seaports
in general or the measurement of port efciency. However,
research on the impacts of port service quality’s constituents on
customer satisfaction has not yet been well-investigated.
Therefore, researches on port service quality in general and
customer satisfaction towards port service quality in particular
when conducted are significant in both theory as well as practice.
 Target and research scope
Target of dissertation: This paper will assess the level of
customer satisfaction towards Vat Cach Port’s service quality and
ofer some suggestions to improve the situation.
Scope of dissertation: This paper focuses only on the port
service in Vat Cach Port, Haiphong city and uses data in 2015.
 Methodology
This report uses the RATER Model to create the list of
variables and evaluate the quality of the service. After that, an I-P
matrix will be used to determine which factors should be
prioritized for improvement.
The data used in this paper was collected from both
secondary data and primary data.
 Secondary data includes the information and figures
provided by Vat Cach Port.
 Primary data includes the assessments through the surveys
completed by Vat Cach Port’s customers for the port service
quality.
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Suggestions to improve customer satisfaction towards Vat Cach port’s service quality
 Research results
The results of the analysis carried out showed that the
services provided by Vat Cach Joint Stock Company has not met
the expectation from their customers as the expectation score
exceeded perception score. And from the I-P matrix, there are 4
prioritized factors for improvement.
 Layout of the dissertation
Chapter 1: Introduction about Vat Cach port
Chapter 2: Methodology
Chapter 3: Evaluation and suggestions to improve Vat Cach
port’s service quality
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CHAPTER 1: LITERATURE REVIEW
1.1. Service quality and Port service quality
1.2.1. Service quality
There are various definitions for the concept Service and each
researcher holds a diferent perspectives. Philip Kotler believes
that service involves the act of performance as well as the results
that one party can provide to another but does not lead to the
ownership of anything. The products of this act may or may not be
related to a physical product. Glossary of financial economics
defines ‘service’ as an action or efort performed to satisfy a need
or to fulfill a demand of individuals or collectives but diferent from
the exchange of ownership of any material goods [ CITATION Ser \l
1033 ].
In general, products of a service are characterized by being
intangible, cannot be measured precisely, difcult to control
quality and vary according to customers’ needs. Customers
receive products of a service through communicative activities,
information and feelings. More importantly, customers can only
assess a service after having bought and used its products;
therefore, validating service quality is perceived as subjective and
dependent on attitudes and ability to identify. According to the
study of Parasurman, Zeithaml and Berry, service quality is
perceived as the conclusion of a comparison between customer’s
expectations and the actual service performance. [CITATION
Aco85 \l 1033 ]. This perception shows that service quality is
related to customers’ expectations and awareness about the
service.
1.2.2. Port service quality
It is commonly accepted that the main duty of ports is
handling cargoes. However, nowadays, the business areas of ports
have been expanded. Apart from handling cargoes, ports can
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represent ship owners and cargo owners to carry out other works
relating to cargoes, such as, distributing and monitoring the cargo
transportation process.
It is hard to find a specific definition for port service, either
internationally or within Vietnam. Due to the characteristics of this
service in general as well as the diversity and complexity of port
service in particular, it is quite challenging to give a general
definition for this type of service. During the implementation
process of European Union’s General Agreement on Trade in
Services (GATS), the Union sent requests to members in which the
support services for maritime transportation were defined in
detail. In this document, port service includes cargo handling
service, cargo warehousing service, custom clearance service,
container yard service, maritime agency service.
On 11th December, 2001, Chinese government issued Decree
No. 335 - Regulations of the People's Republic of China on
International Maritime Transportation to adjust legal relationships
related to international maritime shipping business as well as
services provided by Chinese ports. In Article 2 of this decree, port
services include international maritime agency service, ship
management, cargo handling, warehousing services for exporting
cargoes, bulk cargoes and containerized cargoes forwarding
services, non-vessel-operating service and some other services.
[CITATION Placeholder1 \l 1033 ]
According to Vietnamese government’s Decree No.
30/2014/ND-CP on conditions for sea shipping sea shipping
support service business of April 14 th, 2014 regarding business
conditions for maritime service provisions, port services include
shipping agency service, sea transport agency service, maritime
brokerage service, ship supply service, cargo tallying services,
towage service, ship repairing at port service, ship cleaning
service, cargo handling at ports service, international container
transshipment service, logistics service, non-vessel-operating
service and maritime cargo warehousing service.
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1.2. Customer satisfaction
Customer satisfaction is essential for business success in
today's marketplace. There are many ways to define customer
satisfaction, depending on the characteristics of the market in
which a firm is operating in. However, there are several ways to
define customer satisfaction generally. According to the Business
dictionary, customer satisfaction is the satisfactory degree of the
goods or services provided by a company as measured by the
number of repeat customers. [ CITATION Bus \l 1033 ]
Customer satisfaction is a measure showing how products or
services provided by a business can meet or surpass the
expectation of their customers. Customer satisfaction is
considered as the number or the proportion of total customers
who have perception towards a company together with its
products, or services exceeds satisfaction goals. [CITATION
Far10 \l 1033 ]
Customer satisfaction is an abstract concept involving many
factors which can be named as product/service quality,
atmosphere of the location where the product or service is
purchased, and the price of the product or service. Business
owners often carry out surveys to gauge customer satisfaction.
Customer satisfaction is considered an important factor to any
firm because it provides business owners with a metric used to
manage and improve their businesses. It is generally admitted by
marketing managers that a customer satisfaction metric is very
useful in managing and monitoring businesses. Customer
satisfaction can be seen as a key performance indicator in any
business, and sometimes it is considered as a key diferentiator
when it comes to a competitive marketplace.
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1.3. Relation between customer satisfaction and
port service quality
It can be said that the primary target of service providers is to
satisfy their customers’ needs in order to generate profits.
Customers will continue using the services if their requirements
and expectations can be met. There are a force of service
providers assume that service quality and customer satisfaction
are the same concepts. The opponents of this idea, however, hold
a strong belief which has been proven through several researches
that service quality and customer satisfaction are two separated
concepts. Customer satisfaction is an extensive concept revealing
customers’ feeling and assessment while using the service.
Meanwhile, service quality only focuses on particular elements of
service. [ CITATION Zei00 \l 1033 ]. In order to measure how
satisfied the customers are, both customer’s expectation and
company’s performance should be taken into account [ CITATION
Nig03 \l 1033 ]. Specific requirements of customers, which are the
criterias influencing their satisfaction, need to be determined.
Subsequently, the performance of the company when providing
the services should be evaluated in order to see to what extend
the service satisfies the expectation of customers.
So far there have been a number of studies developing and
validating the relationship between service quality and satisfaction
level of customers in many service sectors. Nonetheless, the
number of research examining the explanatory level of service
quality’s factors for Customer satisfaction, especially in the
maritime sector, is still scant and deserves further investigations.
1.4. RATER model
Currently, there are several research models about Service
quality, among which the SERVQUAL (Parasuraman, 1985),
SERVPERF are two of the most popular. In the field of maritime
transport and logistics, researchers prefer the SERVQUAL and
ROPMIS, a measurement model developed and validated by Thai
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(2008), consisting of six dimensions: ‘resources’, ‘outcomes’,
‘processes’, ‘management’, ‘image’ and ‘social responsibility’.
Apart from the aforementioned models, the RATER is another
model that can be applied to measure customer satisfaction
towards port service quality. In this study, the RATER model is
adopted with measurement items revised specifically to the port
sector.
The RATER Model was created by professors Valarie Zeithaml,
A. Parasuraman, and Leonard Berry, and published in their 1990
book, "Delivering Quality Service.". The model is a simplified
version of the SERVQUAL Model, which was first created in 1988.
The RATER Model highlights five areas that customers generally
consider to be important when they use a service, including
Reliability, Assurance, Tangibles, Empathy and Responsiveness.
Focusing on these five areas can help an organization analyze and
improve the service it ofers to customers.
It is suggested that there are ten criteria and dimensions
through which service quality can be measured (Anber & Shireen,
2011), namely the followings:
 Reliability: relates to the ability of an organization to
accurately perform the services which it promises to its
clients in the proper time.
 Responsiveness: refers to the tendency and willingness of
services providers to meet the needs of customers,
immediately reply to their questions, and solve their
problems as quickly as possible.
 Competence: means that the employees of the organization
should have adequate skills and knowledge in order to
achieve their service properly.
 Accessibility: Company should provide easy access to a
service in terms of location and any other means of
communication.
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 Courtesy involves the respectful, friendly and polite treating
of employees to the clients, the well-understandings of their
feelings,etc.
 Communication: includes listening to clients, conveying
information to them clearly, and facilitating external
communication with workers.
 Credibility: can be achieved through full trust and confidence
in the service provider as well as his honesty and straight
forwardness.
 Security: depends on whether the service is free from risks
and hazards, defects or doubts so that it provides bodily
safety, financial security as well as privacy.
 Understanding/ knowing the customer: can be achievable
through the ability to pinpoint the customers' needs as well
as understanding their individual problems.
 Tangibility: includes physical aspects connected with service
such as instruments and equipment, persons, physical
facilities like buildings and nice decoration and other
observable service facilities.
Tangibility, reliability and responsiveness are considered
constant dimensions, whereas; the criterion of 'Assurance' can
includes courtesy and security. As for as 'Empathy', it includes
elements like providing service in terms of place, time,
communication, and to some extent the service provider should
understanding the customers.
Later on, researchers have integrated the aforementioned ten
dimensions into only five. These five dimensions is the RATER
model including the followings [ CITATION
MindToolsEditorialTeam \l 1033 ]:
 Reliability: refers to the ability to perform the promised
service dependably and accurately, including these criteria:
- Timeliness
- Consistency/Regularity
- Accuracy
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 Assurance: is the knowledge and courtesy of staf; their
ability to inspire trust and confidence. Assurance refers to:
- Staf competence
- Respect for stakeholders
- Credibility
- Probity and confidentiality
- Safety and security
 Tangibles: is the physical representations or images of your
service involving:
- Physical facilities
- Equipment
- Technology
- Employees
- Communication materials
 Empathy: The caring individualized attention you provide
your stakeholders. Empathy refers to:
- Access (to staf, services, information)
- Communication (clear, appropriate, timely)
- Understanding the stakeholder
- Services appropriate for stakeholders’ needs
- Individualized attention
 Responsiveness: Your willingness to help customers and to
provide prompt service. Responsiveness refers to:
- Willingness to help
- Prompt attention to requests, questions
- Problem resolution
- Complaint handling
- Flexibility
A good way of using the RATER Model is to carry out a Gap
Analysis using each of the five dimensions. After that, a plan for
improving the way that companies can serve their customers can
be conducted. Gap Analysis is useful to help researchers identify
the gap between the current situation and the future state that
they want to reach. The current situation of the company refers to
the perception scores while the future state that a service provider
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wants to reach to is related to the expectation scores. Both of
these scores are assessed by the customers through a survey
conducted by the service providers. By subtracting the
expectation scores from the perception scores, the service quality
gap scores can be obtained. Positive gap scores indicate that
customers’ perception exceeds their expectation. Negative gap
scores imply that customers’ expectation is not met by provided
services.
Service Quality (Q) = Mean score of Perception (P) – Mean score of
Expectation (E).
1.5. Important - Performance matrix
Importance-Performance Analysis (IPA) is a part of marketing
research techniques that involve the analysis of customer
attitudes toward a product or service and has been applied in
several markets. Importance-Performance Analysis was first
proposed and introduced by Martilla and James (1977) as a mean
to measure client satisfaction with a product or service. The IPA
approach recognizes satisfaction as the function of two
components: the importance of a product or service to a client and
the performance of a business in providing that service or product
[ CITATION Mar77 \l 1033 ]. In this way, IPA examines not only the
performance of an item, but also the importance of that item as a
determining factor in satisfaction to the respondent (Silva &
Fernandes, 2010). The combined client ratings for those two
components then provide an overall view of satisfaction with clear
directives for management and where to focus agency resources.
This method was considered to be a generally applicable tool
which is relatively easy to administer and interpret resulting in
extensive use among researchers and managers in various fields,
and is a way to promote the development of efective marketing
programs, because it facilitates the interpretation of data and
increases usefulness in making strategic decisions [ CITATION
Sla94 \l 1033 ][ CITATION Mat03 \l 1033 ] [ CITATION Aba07 \l 1033
]
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