The impact of store images on consumer loyalty luận văn thạc sĩ

MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY YZ NGUYEN VAN CUONG THE IMPACT OF STORE IMAGES ON CONSUMER LOYALTY MASTER OF BUSINESS ADMINISTRATION THESIS Ho Chi Minh City, July 2011 MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY YZ NGUYEN VAN CUONG THE IMPACT OF STORE IMAGES ON CONSUMER LOYALTY Major: Business Administration Major code: 60.34.05 MASTER OF BUSINESS ADMINISTRATION THESIS Supervisor: DR NGUYEN DINH THO Ho Chi Minh City, July 2011 ACKNOWLEDGEMENTS Firstly, I would like to express my sincere gratitude to my supervisor, Dr Nguyen Dinh Tho for the patient, dedicated guidance and valuable suggestions for this thesis over the past few months Also, I am particularly grateful for Mr Tran Khoa Van – GfK Managing Director and GfK management board who inspire the study and contribute valuable figures about retailer evolution in Vietnam Next, I would like thanks to my colleagues Mr Huynh Phuoc Cuong – Senior Manager of Retail Management and Mrs Nguyen Ngoc Lan Huong – Senior Research Manager in helping me to conduct and analyze the qualitative study I also would to express my gratitude to management boards of the three consumer electronics retailers: Nguyen Kim, Thien Hoa and Cho Lon for the keen support in letting me collect shopper information during the qualitative research My heartiest thanks are also sent to Mrs Pham Thi Thanh Nhan, senior assistant of Charles Sturt University Australia (CSU) for her non-stop support on books and online journal article Finally, I would like to send my deep appreciation to more than 500 postgraduate students of University of Economics Ho Chi Minh City, who contributed valuable ideas and assessment for the whole pilot and main survey Ho Chi Minh City, Vietnam July, 2011 Nguyen Van Cuong i ABSTRACT The area of consumer loyalty has received considerable attention during the past few years, both in academic and practice area Many retail research has been conducted to answer for the questions such as: what is the most accurate definitions of consumer loyalty; are there any models/ generalizations when investigating consumer loyalty; what the management implications would be for those researches There are many antecedent factors affecting consumer loyalty, store image dimensions were discovered to be among the most important loyalty drivers In order to indentify the key determinant image elements and understand their derived importance, this study was implemented The research successfully explored the significant relationship between Store Service (Employee Service and After-sales Service), Store Facilities (Physical Facilities and Store Atmosphere), Product & Marketing Communication (Merchandising and Advertising & Promotions), Perceived Price and Store Convenience with Consumer Loyalty Also, these independent factors were also discovered that they not equally affect on consumer loyalty One qualitative study with in-depth interview and one pilot study were performed before the main survey was conducted in Ho Chi Minh City to assess modern trade consumer electronics retailers The study revealed that five key factors (Store Service, Store Facilities, Product & Marketing Communication, Perceived Price and Store Convenience) positively affect consumer loyalty Besides, the study suggested that Store Facilities and Product & Marketing Programs were the two most important factors to be invested in modern retailing industry ii TABLE OF CONTENTS CHAPTER INTRODUCTION 1.1 Research background 1.2 Problem statement 1.3 Research questions 1.4 Research objectives 1.5 Research scope 1.6 Research methodology and design 1.7 The significance of research 1.8 Thesis structure 1.9 Summary CHAPTER LITERATURE REVIEW and THEORETICAL MODEL 2.1 Consumer loyalty definitions 2.2 Store image definitions 2.2.1 Store convenience 2.2.2 Physical facilities 10 2.2.3 Perceived price 11 2.2.4 Employee service 11 2.2.5 Advertising and promotions 12 2.2.6 After-sales service 12 2.2.7 Store atmosphere 13 2.2.8 Merchandising 13 2.3 Store image studies 14 2.4 The relationship between store images and consumer loyalty 15 2.5 Theoretical model and hypotheses 16 2.5.1 Theoretical model 16 2.5.2 Hypotheses 17 2.6 Summary 19 iii CHAPTER RESEARCH METHODOLOGY 21 3.1 Research process 21 3.2 Qualitative Study 22 3.2.1 Objectives 22 3.2.2 Methodology 23 3.2.3 Sample size and target respondent 23 3.2.4 In-depth interview content 23 3.2.5 Qualitative result 24 3.3 Measurement 26 3.3.1 Measure of consumer loyalty 26 3.3.2 Measure of store convenience 27 3.3.3 Measure of physical facilities 27 3.3.4 Measure of perceived price 27 3.3.5 Measure of employee service 28 3.3.6 Measure of advertising and promotions 28 3.3.7 Measure of after-sales service 28 3.3.8 Measure of store atmosphere 28 3.3.9 Measure of merchandising 29 3.4 Quantitative Pilot study 29 3.4.1 Objectives 29 3.4.2 Methodology 29 3.4.3 Target respondent and sample size 29 3.4.4 Pilot study content 30 3.4.5 Pilot study result 30 3.5 Model and hypotheses modification 34 3.5.1 Model modification 34 3.5.2 Hypotheses modification 36 3.5.3 Variables 36 iv 3.6 Main survey 37 3.6.1 Methodology 37 3.6.2 Target respondent and sample size 37 3.6.3 Questionnaire content 38 3.6.4 Data analysis method 38 3.7 Summary 40 CHAPTER DATA ANALYSIS AND RESULT 42 4.1 Sample characteristics 42 4.2 Cronbach’ alpha reliability analysis 44 4.3 Exploratory factor analysis 46 4.4 Multiple linear regression 49 4.5 Hypotheses assessment and discussion 51 4.6 Summary 53 CHAPTER CONCLUSIONS AND IMPLICATIONS 55 5.1 Conclusions 55 5.2 Managerial implications 56 5.2.1 Store facilities 56 5.2.2 Product and marketing communications 56 5.2.3 Perceived price 57 5.2.4 Store service 57 5.2.5 Store convenience 57 5.3 Limitations and future research 58 5.3.1 Research limitations 58 5.3.2 Future research 58 5.4 Summary 59 REFERENCES 60 APPENDIX 1: Overview of Vietnam Retailing Market 63 APPENDIX 2: Data analysis 64 v APPENDIX 3: Questionnaire 69 LIST OF TABLES Table 3-1: Qualitative result – important factor to retain loyal customers 24  Table 3-2: Qualitative result – important factor to retain loyal customers 25  Table 3-3: Cronbach alpha result for pilot study 31  Table 3-4: Rotated component matrix for pilot study 33  Table 4-1: Descriptive analysis 42  Table 4-2: Average number in one household and average household monthly income 44  Table 4-3: Cronbach alpha result for main survey 44  Table 4-4: EFA rotated component matrix for main survey 47  Table 4-5: Total variance explained 48  Table 4-6: KMO and Bartlett’s Test 49  Table 4-7: Regression model summary 49  Table 4-8: ANOVA F test 50  Table 4-9: Multiple linear regression result for main survey 50  Table 1-1: Vietnam retail outlet evolution of home technology product 63  Table 1-2: Organized/ chain store vs independent channel evolution 63  Table 1-3: Ranking of Retail Market Attractiveness 63  Table 4-10: Descriptive statistic 64  Table 4-11: Correlation between Consumer loyalty, Store Service, Store Facilities, Product & Marketing Communication, Store Convenience and Perceived Price 65  Table 4-12: Communalities 66  vi LIST OF FIGURES Figure 2-1: Theoretical model 17  Figure 3-1: Research Process 22  Figure 3-2: Modified theoretical model 36  Figure 4-1: Result of multiple linear regression 51  Figure 4-2: EFA Scree Plot 64  Figure 4-3: Histogram of Consumer Loyalty 67  Figure 4-4: Normal P-P Plot of Consumer Loyalty 67  Figure 4-5: Scatter plot of Consumer Loyalty 68  vii CHAPTER INTRODUCTION 1.1 Research background In recent years, the rapid growth of retailers in both quantity and channels (supermarket, hypermarket, exclusive single brand stores) has resulted in a corresponding increase in the competition between retailers The understanding of what motivates consumers to purchase from one stores rather than another becomes increasingly important to retail stores design and management (Black et al., 2002) In Asia, retailing has been still one of the most attractive industries over the past few years Vietnam, an emerging country with a dynamic economy and a potential entry market with more than 85 million people, will be a prosperous land to invest According to the Global Retail Development Index 2010 of American consulting company AT Kearney, Vietnam was ranked as the 14th in 30 countries having the most attractive retailing industry worldwide The retailing industry is still considered as an attractive industry because Vietnam has a young population and promises a robust growth of the industry Furthermore, after joining WTO, Vietnamese government continued encouraging and supporting local retailers to participate and expand in the regional retailing industry to keep pace with neighbor countries like Thailand, Singapore or Malaysia The growing of retail industry in Vietnam is recorded to be in both channel and outlet development Firstly, regarding number of outlet, according GfK Vietnam (see appendix 1, table 1.1), the total number of retailers selling technology products is expected to increase significantly in 2011 (44%) compared to 2010 Of which, telecom group (mobile phone retailer) has the largest number of retail store (19,347 outlets) Secondly, modern trade channels continued to emerge despite the dominance of traditional channels Consumers have been interested in shopping at supermarkets, hypermarkets and convenience stores because of their pleasant environment as well as their diversified product ranges In addition, modern trade channels try their best to offer consumers a more competitive price to compete with traditional channels Consumers also preferred to come to modern consumer electronics stores because they could freely look, touch and try products that they wanted GfK retail audit recorded a positive growth in revenue ... (1958) conducts one of the earliest studies about store images and describes store image as ? ?the personality of the store and the manner in which the store is presented in a personal mind” Over the. .. on the research questions, this study was implemented to identify the store image drivers of consumer loyalty to achieve the following objectives • Explores the impact of store image dimensions... 1993) describes consumer loyalty from similarity and contrast theory Once the customers are loyal to their stores, they will remain loyal as long as the core attributes of the stores fit perceived