Impact of store image attributes on satisfaction and loyalty:
An exploratory Study of grocery shopping customers in
KLANG VALLEY, Malaysia
DEPARTMENT OF MANAGEMENT STUDIES SARANATHAN COLLEGE OF ENGINEERING TRICHY
Abstract: The study explicate that Malaysian retail sector has come across rapid changes in recent years. There will be traditional as well as new retail formats like hyper markets, convenience stores are emerged. As a result it will have an impact in consumer satisfaction and loyalty. Thus it is very important for retailers to know about which store attribute will satisfy the consumer. The objective of the study is to scrutinize the various store attributes influencing consumer satisfaction and loyalty and also to recognize the relationship between satisfaction and loyalty. Further to realize the impact of demographic factors on consumer satisfaction and loyalty. The study reveals that store attributes namely location, service, promotion, price, brand choice, packaging, store atmosphere, social experience were the dominant variable that determines the overall loyalty of the consumers towards the retail grocery store. This research acknowledged and proved the hypothesis that there is a significant relationship between satisfaction and loyalty of grocery shopping consumer. Keywords: Satisfaction, Loyalty, Store attributes, Demographic factors
Introduction Background of the study During the past years both marketing academics and practitioners have been intrigued by the relationship between satisfaction and Loyalty. Most of these studies, however, have concentrated on products (brands) and to a somewhat lesser extent of services or channel intermediaries. Surprisingly, research on the relationship between grocery retail store satisfaction and store loyalty has remained limited, both in actual number as well as in scope. Yet, in the present environment of increased competition with rapid market entry of new store concepts and formats, the managerial challenge of increasing store loyalty also presents the research challenge of a more in-depth understanding and an empirical estimation of this important type of consumer behaviour in the Klang Valley region of Malaysia. There is some evidence that store loyalty may be (positively) related to store image attributes ( Osman, 1993). However, it has remained unclear what the exact relationship between satisfaction, store image attributes and loyalty in a grocery retail setting is. For instance, one question that has been left unanswered concerns the issue whether there is a direct impact of store image attributes on retail grocery store satisfaction and store loyalty .In this study, the researcher attempt to answer this question. We propose a model that describes the impact of store image attributes on retail grocery store satisfaction and store loyalty, taking into account the effect of demographic profile on store image attributes.
Problem Statement: This study focus on consumer behavior in traditional retail stores and modern retail stores in Malaysia . it is important for the retailers know which store attributes are important and how it will affect and satisfy the consumers behaviour while buying grocery items. This study differs from the earlier studies on store choice because it considers customer store selection based on the store attributes pertaining to grocery products. Furthermore, the current study also takes into account the influence of non-store factors which are left behind by previous studies. Research Objective : The grocery sector has experienced dramatic changes in the last few decades with the emergence of new retail formats such as hypermarkets, large scale supermarkets, and convenience stores. As a result, it has affected the way consumers shop as they have more choices to choose from. Thus, it is important for the retailers know the reasons why consumers choose to shop at a particular store, and also the factors that will influence their subsequent behaviour. The objective of this study is to investigate consumer behaviour in the grocery industry. Specifically, this research aims to: To understand the demographic and rational profile of grocery shopping customers. To identify the significant store attributes for store choice decision for grocery purchase. To examine the relationship between store attributes and consumer satisfaction towards the retail store, leading to store loyalty. To develop and suggest an integrated structural measurement model, which evaluates the impact of store image attributes on consumer satisfaction and store loyalty.
FORMATS OF RETAILING
Literature Review: Consumer Behavior in the grocery industry: Jason M.carpenter et al.(2008) reveals the demographic groups and their exact selection of stores and also scrutinize the store attributes like price, competitiveness, product selection,and atmosphere as drivers of retail format preference.
Consumer demographics: Michael Tinggi et al(2012), States that consumers in the rural arears are more oriented to buy from bumiputera grocery stores whereas in city espouse to shop at mega stores.they need to satisfiy both rural and urban consumers and hold the new art of trading and strategizing in order to remain relevant.
Store image attributes: Nor, C. A. (2012) reveals that retail choice is induced by types of goods purchased.the significant deteminant of retail store choice in malaysia inclueds Store personnel and physical characterisitics of the store Advertising Convenience and merchandise choice Location Peer influence Product diversification and quality Service provided by store
Location dimension: Rosmimah Mohd Roslin et al, (2012) states that people get attracted with merchandise, the price of variety of goods offered, nearby location of the shop.
Products or brand choice: Florence Kremer, et al, (2012) reveals that the price reflection of store brand is certainly connected with retailers price reflection. This will improve the retailers brand mage in terms of values
Packaging Dimension: Silayoi et al,(2004) the packaging is evolved from the conventional function of safeguard the products from dust, break, stealing, maltreatment and worsening. Glass, metals plastics, paper and board are use as packaging material
Price Dimension: Stephan Zielke, (2010) reveals the price aspect effect the shopping intensions for diverse store format. Discount stores-wothable for price Super markets-price and value are equally important Organic food stores-value go behind by price Weekly market-price Overall price is the important factor for shopping intension
Promotion Dimension: Mara Pilar Martnez Ruiz, et al (2012),stated that the short term retail price discounts increase in brand sales of the promoted brands particulary in weekend
Service dimension: Derek Thompson (2012) reveals that, if the people buy the things online they dont bother about services otherwise service is the important aspect of retailers. Sales people behavior is having an impact in consumers shopping intensions.
Social dimension: Joseph L. Gagnon,et al, (2005), shopping can give opportunity for a social experience like seeking new friends/associates/connections.it will have an impact in buying behavior of consumers in retail stores.it will offer benefit of association with others.
Convenience Dimension: Kaufman (2011), states that consumers choose the store based on function and travel time. consumer prefer shop nearer to home.they can go for a shop while in travel to their jobs or social and recreational activities.
Store Layout: Levy et al,(2010) states that store layout is significant factor for grocery store. Because It direct and attract the consumer to shop It make a stability between sales and shopping space To make an effective merchandise appearance
Customer satisfaction: Patricia Huddleston et al, (2009) acknowledged that store layout,price,product assortment and service have a certain impact in customer satisfaction.it will be common for both the conventional and speciality store formats.
Customer Loyalty: Johan Anselmsson et al, (2009),confirmed that private labeling have an impact in buying behavior of the consumer which inturn leads to store loyalty.there is an association between perceived quality and the price the buyer willing to pay for the private label.
The relationship between stores image attributes, customer satisfaction and store loyalty
Most previous studies in retailing suggest that consumer behaviour towards a store depends on the store attributes (Linquist, 1974-1975; Hansen and Deutcher, 1977/1978; Westbrook, 1981; Osman, 2001; Doreen and Benjamin, 2003; Nguyen et al, 2010). Generally, the more favourable towards the store image, the higher the chance that the store will be preferred and visited by the consumers. However, some of the attributes may weigh more heavily than others in influencing grocery store choice decision. Thus, some store attributes are more important than others when consumers are deciding where to shop for grocery shopping. Numerous researches have been conducted to examine the impact of store attributes on customer loyalty (Bloemer and Ruyter, 1998; Osman, 2001; Nguyen et al, 2010). Most of the studies found that store attributes have a positive impact on store loyalty. It is found that the loyalty towards the store is affected by the consumers in store experience with the characteristics of the store. In other words it is important for the shopper to notice and pay attention to the attributes, in order to influence their subsequent behaviour such as re-patronage behaviour. However, a study by Bloemer and Ruyter (1998) found that store image does not directly influence store loyalty. Instead, the study suggests that the relationship of store image and store loyalty is mediated by store satisfaction. Although most of the previous studies investigated the relationship of store attributes and customer loyalty in a retail setting, Westbrook (1981) studied the effect of store attributes from a different perspective. Westbrook examined the relationship of store attributes and customer satisfaction. The study found that customer satisfaction is directly affected by their store experience with the store characteristics. On the other hand, Oliver (1999) finds that satisfaction is a necessary step in loyalty formulation. Satisfaction is often regarded as an antecedent of loyalty. It is found that the re-patronise intention will increase when the consumer satisfaction increases (Swan and Trawick, 1981; Grace and Cass, 2005). However, they found that satisfaction has an insignificant positive effect on store loyalty in the discount retail channel. So, it is worthwhile to investigate whether satisfaction has a positive impact on store loyalty. The retailers or marketer's job does not end with the consumers decision to shop at the store. It is important for the retailers to continue to monitor consumers post-purchase behaviour such as satisfaction level, which will eventually lead to his or her subsequent behaviour, such as willingness to re-patronize the store, or become a loyal, committed customer. Thus, some studies also study the relationship of store attributes, customer satisfaction and store loyalty (Bloemer, Ruyter, 1998; Doreen and Benjamin, 2003; Koo, 2003; Nguyen et al, 2010).
Research Gap:
Numerous researches have been conducted in the field of grocery industry to understand consumer behaviour. In the process of evaluating which stores to patronize in grocery purchase, consumers consider a variety of factors, often referred to in the retailing literature as store choice evaluative criteria or store image attributes. The central issue for retailers is, therefore, choice. As the outcome of the choice can only be known in the future (after using the store), it is important for retailers to understand how consumers make decisions in grocery purchase. This research addresses the research gap where no other research has not specifically captured the said nine dimensions (by keeping a comprehensive store attributes namely location, products or brand choice dimension, Store layout, packaging technology, price, promotion, store atmosphere, service dimension, social dimension, convenience dimension to ultimately capture the store image what consumers perceive) synchronized impact on customer satisfaction and store loyalty in grocery store retailing. The research also attempts to study the impact of consumer demographic variables on store attributes, satisfaction and store loyalty.
Conceptual Framework:
The demography of the people plays a major role in retail store selection. Because rural and urban people have different purchasing behavior.
The next thing is that store attributes have an impact in consumers buying behavior. store attributes like convenience, service, store layout, social experience, price, product brand image, promotion influencing much on consumer.
The store attribute should satisfiy the consumer then only the consumer stared to purchase frequently
Once a customer get satisfied he/she became loyal to that store.
Loyalty Satisfaction store attributes demography Overall the demography have an influence in store attributes so that the customer become satisfied which inturn leads to loyalty. Research method: The researcher has used descriptive research design for conducting the research. Descriptive research studies are those studies which are concerned with describing the characteristics of a particular individual, or of a group. Studies concerned with specific predictions, with narration of facts and characteristics concerning individual, group or situations are all examples of descriptive research studies. Here the researcher intends to describe the situations where the store image attributes influence the consumer purchasing of the grocery product which ends up in satisfaction and loyalty.
Age 16-25 26-35 36-45 46-55 56 & above Frequency and percent 64(22.2%) 164(56.9%) 19(6.6%) 29(10.1%) 12(4.2%) Gender Male Female Frequency and percent 57(19.8%) 231(80.2%) Marital Status Married Unmarried Living together Divorce Frequency and percent 191(66.3%) 77(26.7%) 8(2.8%) 12(4.2) Race Malay Chinese Indian Frequency and percent 169(58.7%) 74(25.7%) 45(15.6%) Education Secondary Diploma Graduates Masters Frequency and percent 11(3.8%) 172(59.7%) 102(35.4%) 3(1.0%) Income level Below RM2000 RM2001- RM3000 RM3001- RM5000 RM-5001- RM6000 RM6001 above Frequency and percent 60(20.8%) 102(35.4%) 67(23.3%) 16(5.6%) 43(14.9%) Family size 2 3 4 5 6 & above Frequency and percent 12(4.2%) 71(24.7%) 94(32.6%) 79(27.4%) 32(11.1%) Occupationn Student Self employed Private sector Professionals House wife
Frequency and Percent 6(2.1%) 44(15.3%) 206(71.5%) 28(9.7%) 4(1.4%) Frequency of grocery purchase Daily Weekly once Two weeks once 15 days once Monthly once Frequency 27(9.4%) 47(16.3%) 9(3.1%) 140(48.6%) 65(22.6%) and percent Amount of grocery purchase per month RM500- RM1000 RM1001- RM 2000 RM2001- RM 3000 RM3001- RM4000 RM4001 & above Frequency and percent 210(72.9%) 50(17.4%) 6(2.1%) 15(52%) 7(2.4%) Types of retail stores Hyper Market Super Market Super chain store Convenience store Traditional grocery store Frequency and percent 61(21.2%) 157(54.5%) 13(4.5%) 51(17.7%) 6(2.1%) Nature of purchase Cash Credit Both Frequency and percent 188(65.3%) 31(10.8%) 69(24.0%)
Hypothesis of the study: Based on the findings from previous studies, this study attempts to investigate the relationship between store attributes, store satisfaction and store loyalty. H1: Store attributes have a significant impact on customers satisfaction and loyalty. H2: Demographic profile has a significant impact on store attributes, customer satisfaction and loyalty.
FINDINGS: The findings of the demographic analysis highlights that the majority of the respondents are middle aged consumers and mostly females with married status. Ethnic composition among the respondents got dominated by Malay race followed by Chinese and Indians. The data findings also reveal that diploma holders found to be a majority in the educational qualification category .The surveyed data analysis reveals that the majority of respondents are in the income range of Rm 2001-Rm 3000, which is considered to be above the average salary level of Indianconsumers who normally has an affordable buying power on the grocery purchase.The demographic analysis also highlights that, most of the respondents belong to the family size of four, followed by five and three which clearly portray the nuclear family structure . Most of the respondents who do grocery purchase were working for private sectors. The research data analysis reveals that the grocery buying consumers make grocery purchase mostly every fifteen days once and the next highest proportion shared by consumers who make monthly purchases of grocery items. The research study also reports that, most of the consumers spend Rm 500 to Rm 1000 for their grocery purchase which got considered significant for grocery retailers . Finally , the demographic analysis reveals that most of the consumers purchase grocery items using cash purchase mode rather than credit mode, since the amount spent on grocery purchase found to be minimum .The research data extracted the factor with highest variance considered to be the important factor, which constitute the following variables namely availability of organic products ,providing targeted promotions, usage of novel technology to attract consumers, providing in store credits cards, providing easy entrance and exit to parking lot, providing shopping bus schedule to consumers ,numerous cash counters to ease out queuing, assistance to carry grocery items, providing financial service access, providing proper point of display, allowing customers to use their sweep stakes and retail store showing consistency in delivering quality service .The study also found out that the grocery stores which provides discounts, the store which is helpful and having friendly sales people,the store having convenient operating hours ,the store which got attractive merchandising ,the store offering low price was the most significant store attributes that determine the overall satisfaction of grocery retailing customers .Additionally ,the study also found out that the service image attributes namely convenience of the store, merchandise of the store, price offered by the store, availability of fresh foods, labels with nutritional information, attractive image in label, sending greetings to customers, advertisement to build customer confidence, provide durable carry bags, well assorted rest area, proper shelf display, proper selling floor layouts, variety of credit cards accepted, home/door delivery services, providing web sales and affirmative action by sales person were the dominant service attributes that determines the willingness of grocery purchasing consumers to purchase next time with the grocery retailer. Easy entrance and exit to parking lot, shopping bus schedule, long opening hours, physical facilities of the store, numerous cash counters, assistance for carrying out grocery purchase, providing financial services access, point of purchase displays, convenience provided by the store, merchandise of the store, price offered by the store were the dominant service attributes that influences consumer to recommend the grocery retail store to other customers.consumer belief that the national brands provide more value, high stock of grocery assortment to be maintained, colour and logo on the package should be culturally appropriate, assisting consumers to organize their grocery list, providing accrual promotion and redemption promotion, frequency of advertisement and promotion, separate checkout lines for preferred customers, store providing atmosphere and opportunity for a social experience were the dominant variables that determines the overall loyalty of consumers towards the retail grocery store.The study found that price is not the only consideration that weighs heavily on the minds of consumers when shopping for groceries. Health factors, product availability and in-store services , targeted promotions, provision of easy entrance and exit, packing convenience, availability of numerous cash counters, point of display, assistance in carrying groceries, sale of organic food items, innovation, user-friendly schemes to aid shopping and in-store services are also important considerations. A combination of required attributes such as convenience of the store, merchandising availability of fresh foods labeling with nutritional content information, use of attractive pictures/slogans in labeling, sending seasonal greetings to customers, advertisements, provision of durable carry bag, provision of well assorted space for relaxation, home delivery, online sales, and affirmative sales person action and reaction will have a significant effect on the loyalty.
CONCLUSION The research concludes that the overall loyalty can be enhanced if the above mentioned service image attributes get fulfilled for consumers and appropriately delivered to them. Oliver (1999) found that satisfaction is a necessary step in loyalty formulation. Satisfaction is often regarded as an antecedent of loyalty. It is found that the re-patronise intention will increase when the consumer satisfaction increases (Swan and Trawick, 1981; Grace and Cass, 2005). So, it is worthwhile to investigate whether satisfaction has a positive impact on store loyalty. Hence, this study supports the conclusions of Oliver that there is a significant relationship between satisfaction and loyalty of grocery shopping consumers , increase in satisfaction level will obviously increase the level of loyalty.
IMPLICATION AND CONTRIBUTION OF THE RESEARCH Augmenting services that improve store satisfaction alone may not by itself be sufficient to sustain store patronage. The sense of knowing which factors can build a cordon around customer satisfaction and loyalty, can only be gotten through systematic and sustained tracking of shopping patterns. The above said information in the findings and conclusions of the research should help the grocery retailers to recognise the elements that contribute to customer satisfaction from those that typically help sustain store loyalty and consequently allocate their resources towards enhancing their level of perception among consumer's mind. If the elements identified from market intelligence are strategically planned for and managed with a preparedness to sustain investment in them, grocery retail stores can look forward to their customers coming back and thereby contributes to the marketing literature by specifically capturing the significant attributes responsible for consumer grocery purchase, which also impacts consumer satisfaction and loyalty. The patterns discovered in this empirical findings correlated to the theoretical framework which have made it possible to draw some conclusions about reality i.e. the constructed research model summarises those patterns namely store attributes develop store image which brings in satisfaction and store loyalty. If retail stores deliver and manage these emerged store attributes strategically ,which will pave way for customers to develop satisfaction and loyalty towards the retail grocery stores.
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