General Model of Consumer Behavior According to Kotler (2004)

This requires banks as well as all other product and service providers in the market to carefully segment the market and deeply understand the process and factors that affect customers' purchasing behavior.

- The quantity of demand is large but the scale of demand is small.

Because the target customers of the NHBL service are individuals, households, and SMEs, the number of customers of this type of service is very large, leading to a large and frequent number of NHBL transactions. However, the value of each transaction is often smaller than the value of NHBB transactions, only corresponding to and suitable for the needs of an individual or a SME.

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This feature gives the NHBL service an advantage over the NHBB service. The regularity and stability of retail transactions contribute to a significant source of income and sustainable growth of the bank. In addition, because the value of retail transactions is not too large, the risks contained in the transactions themselves are not much, contributing to ensuring the safety of banking operations.

- Diverse product portfolio

With the characteristics of the customer group of the NHBL service being diverse, heterogeneous needs, depending on many factors such as gender, age, culture, place of residence, etc., a bank that wants to develop the NHBL service must have a diverse and constantly developing and improving product portfolio. Both are credit products but serve the consumption needs of individuals and households, the bank offers a list of products such as: home loans, car loans, shopping loans, etc. Targeting students, the bank offers study abroad loans. Targeting SMEs, the bank offers business development loans. Both are deposit mobilization products but with different terms, different conditions for principal and interest withdrawal, there are different products. For example: non-term deposit products, 6-month term deposit products with interest withdrawal at the end of the term, one-year term deposit products with special interest rates, etc.

- Wide network of branches and distribution channels.

Because the customer group of NHBL services is individuals, households, and SMEs scattered over a large area (across the country or internationally), in order to reach all customer groups, banks must constantly expand their network of branches, offices, transaction points, and ATMs. The more branches a bank has and the wider the distribution, the more opportunities it has to contact with customers, improving its competitiveness compared to other banks.

Not only focusing on developing traditional transaction channels, new transaction channels using modern technology such as online banking, online banking... are also constantly expanding to increase convenience for customers. In areas without direct bank transaction points, customers can still conduct some normal transactions through means such as the Internet, Mobile phone... This is a characteristic of NHBL service.

- NHBL activities develop on high technology platforms.

A very important feature that determines the expansion and development of banking services is the application of scientific and technological achievements to banking activities. It is thanks to the development of science and technology, electronics, telecommunications and the Internet that new banking services can be provided more and more to all customers as today. Typical of the application of high technology to banking services are automatic withdrawal and deposit services through ATM systems and cards. Payment services by domestic and international credit cards or debit cards. Online banking services Internet banking, Home banking, Phone banking, automatic money transfer products... With the help of technology, customers can now access banking services at any time of the day, anywhere without being separated by convenient geographical locations or physical borders.

* The role of retail banking services

Banking services are increasingly showing a more important role not only for the banks providing the services but also for the overall socio-economic system and for service consumers.

- For socio-economic

In addition to the NHBB service, the NHBL service has the effect of perfecting banking and financial activities, accelerating the process of currency circulation, taking advantage of the huge potential of capital to develop the economy. The NHBB service serves customers who are companies and large corporations, while the NHBL service targets the remaining market segment which is SMEs, individuals and households. Therefore, the development of the NHBL service has ensured that the demand for banking and financial services of all customer groups is satisfied, all excess capital is utilized, the speed of currency circulation will therefore be accelerated, creating conditions for economic development. In addition, with modern means of payment, non-cash payment now has more conditions to develop than ever, helping to minimize risks, shorten time and costs, increase convenience, and improve the efficiency of life. In addition to paying bills for purchases, people can now also pay electricity, water, and road tolls through banks. Businesses can pay taxes via the Internet without having to go to the tax office or the State Treasury.

- For service-providing banks: NHBL services bring a stable and certain source of income, helping to disperse risks in the operations of banks. With a large number of customers, diverse needs, and frequent transactions, NHBL services bring a stable and sustainable source of revenue for banks. In addition, the value of small transactions and short terms help banks to quickly rotate capital, minimizing risks in the field of capital mobilization as well as lending. In addition, NHBL services play an important role in expanding the market, improving competitiveness, creating the main medium and long-term capital source for banks, contributing to diversifying banking activities.

- For customers, NHBL services bring convenience, safety, and savings to customers in the process of payment and use of their income. With diverse capital mobilization products, all surplus capital of the people is invested thoroughly and effectively, bringing income as well as ensuring the integrity of capital for the people. With retail credit products, the borrowing needs for consumption and production development of small customers are met. Modern payment methods of NHBL services help to minimize risks, inconveniences, costs and time for customers, making social life more convenient than ever.

Realizing the role and importance of retail banking services, the current trend of banks is to shift to retail banking services. Accordingly, by shifting to retail, banks will have a larger and more potential market because the demand for services of the people is still very large and diverse. High economic efficiency is brought about by products provided in large volumes, high revenue as well as dispersion of business risks, while giving banks the ability to develop and diversify products and services. Meanwhile, wholesale banks provide services to large enterprises, large projects, with stable income but high risks and limited and undiversified demand for products and services.

2.1.2. Consumer behavior

2.1.2.1. Consumer behavior

According to Kotler (1999), consumer behavior is the specific behavior of an individual when making decisions to purchase, use and dispose of products or services.

Consumer behavior is understood as the possible reactions of consumers in the process of choosing and deciding to buy goods and services. Understanding consumer behavior will help businesses provide products and services that suit consumer tastes and build appropriate marketing strategies.

Businesses study consumer behavior for the purpose of identifying

needs, preferences, and habits of consumers. Specifically, research what consumers want to buy, why they buy that product or service, buy that brand, or why they do not continue to use that product or service or that brand, how they buy, when they buy, where they buy, and the frequency and level of purchase to determine a marketing plan, promote the consumer's purchase process for the products and services that the business provides and limit the consumer's abandonment of the product or service or brand of the business to switch to another business.

Figure 2.1: General model of consumer behavior according to Kotler (2004)

(Source: Consumer Behavior, author Kotler)

According to Kotler (2004), external stimuli after passing through the buyer's black box of consciousness will create buyer responses, specifically: choosing the type of product or service, choosing the brand, choosing the business, choosing the purchase volume.

According to Hoyer (2007), consumer behavior is influenced to varying degrees by cultural, social, personal, psychological, and other factors.

2.1.2.2. Consumer behavior in the banking sector

Consumer behavior in banking is understood as the behavior of customers in searching, purchasing, using, evaluating or abandoning banking products and services. Consumer behavior in the banking sector shows that customers want to buy or choose to use products and services; the decision of customers to buy/use those products and services; the frequency of purchasing products and services and their attitudes and comments on those products and services before/during/after purchasing.

Consumers in the banking sector are customers of banks, they are the ones who buy/use banking products and services to satisfy their needs and desires. Customers of commercial banks in the retail sector

are individuals, households, organizations, small and medium enterprises.

Consumers in the retail sector at Vietnamese commercial banks have the following characteristics: (1) large number of customers and increasing demand for banking services; (2) Demand for banking products and services is very rich and diverse; (3) Continuously changing tastes in consuming new products and services due to the impact of the environment, trends and socio-economic conditions (Source: State Bank report).

Research on consumer behavior is a very important aspect that must be studied in all marketing activities and is very important in the banking sector. This helps researchers and commercial bank managers better understand customer needs in service usage decisions and also understand their post-service decisions. Customer post-service decisions are often related to assessing satisfaction with current service quality, as well as future plans to use the service, and intentions to recommend banking services to other customers. This is an important content that bank managers at different levels need to understand clearly in order to have appropriate policies to build customer loyalty. At the same time, basic theories on customer consumption behavior in the banking sector will guide the theoretical framework for approaching customer loyalty in the retail sector. It is necessary to analyze and understand the factors affecting loyalty and the level of impact of each factor.

2.1.3. Bank switching behavior

2.1.3.1. Concept of bank switching behavior

Switching behavior is viewed as a customer's abandonment of using a service (Stewart,(1994); Hirschman,(1970)). According to Bootie (1998) and Bolton and Bronkhurst (1995), switching behavior reflects a customer's decision to stop purchasing a particular service or to stop using the services of a certain company. In the banking industry, switching behavior means the customer's change from using one bank to using the services of another bank.

different Garland (2002).

2.1.3.2. Effects of switching behavior

Keaveney and Parthasarathy (2001) and Reichheld (1996) found that customer switching behavior reduces firms' revenues and profits because firms have to spend money on initial investment costs (e.g., consulting, advertising) and other costs to acquire a new customer (Colgate, Steward Fornell and Wernerfelt and Kinsella (1996); Reichheld and Sasser (1990,1987). Reichheld and Sasser (1990) showed that customer defection has a more direct and stronger impact on revenues than size, market share, and other factors. Zeithaml et al. (1996) found that customers tend to switch banks if a bank's performance deteriorates. Furthermore, customers who leave banks may spread bad word of mouth and create a negative image of the bank. Diane (2003). The fierce competition in the banking industry has made switching behavior have a great impact on the decline in market share and profitability of banks. Ennew and Binks (1996); Garland (2002); Trubik and Smith (2000) and Rust and Zahorik (1993) have also studied the impact of finance on customer retention and found that there is a strong relationship between customer loyalty and profitability in the retail banking sector. In reality, it is very difficult for a bank to meet all the requirements of its customers. Even the rate of customers leaving the bank because of not being fully satisfied is quite high. For example, in some countries, the rate for US banks was 20% in 1997 and 1998, and Europe had similar rates in the 1990s (Rongstad (1999); Shedd (1996). Colgate (1999) research found that the annual bank switching rate in New Zealand was 4%, and more than 15% of retail banking customers intended to switch to another bank. To minimize the negative effects of bank abandonment and enhance long-term customer relationships, researchers have focused their studies on the factors that motivate customers to switch banks (Matthews and Murray (2007); Gerrard and Cunningham (2004); Colgate and Hedge (2001); Keveaney (1995).

2.1.3.3. Factors affecting conversion behavior

* Price

Price is considered to be the opportunity cost of obtaining a product or service (Zeithaml, (1998). The conventional price perception incorporates both monetary and non-monetary categories (Chen, Gupta and Rom, (1994). In Keaveny's (1995) study, the "price" element includes all switching behaviors related to prices, rates, fees, charges, surcharges, service charges, penalties, promotions, coupons, and price promotions. In the financial services sector, price has a broader meaning than in other service industries. For example, in financial services, price includes fees, bank charges, deposit and lending rates Gerrard and Cunningham, (2004).

Beckett et al. (1996a) found that customers will place price in their purchasing behavior. Price is an important factor in customer choice as consumer choice is often based mainly on the price of alternatives Engel, Blackwell and Miniard, (1995). Similarly, Varki and Colgate (2001) determined that the role of price, as an indicator of efficiency, has a direct impact on customer satisfaction and behavior. Several studies have shown that price has an important impact on customer switching behavior Stewart (1998); Colgate et al. (1996); Keaveny (1995). Almossawi's (2001) experiment identified price as an important factor in bank selection for students. And price has a greater influence on the switching behavior of banking customers than other types of services Gerrard and Cunningham, (2004). In Colgate and Hedge's (2001) study on the switching behavior of bank customers in Australia and New Zealand, price was identified as the top factor in the switching decision, followed by service failure and the effects of service denial. Similar results were found in the 1989 study by Javalgi, Armaco and Hoseini. This study investigated the factors influencing the switching decision of banking customers in the United States.

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