Thesis summary: Determinants deciding the attraction of department store: The case of Ho Chi Minh city

Discover how to understand the attraction of department stores under perspective of shoppers, rather than from the perspective of operators of department stores. Since then, seeks way to measure it. Discover the determinants of customer attraction of the department stores under the perspectives of shoppers, measure the impact of these factors to the attractiveness of the department stores. Conduct shopper segmentation based on their expectations for factor of attraction of going department stores.

MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HCMC DINH TIEN MINH DETERMINANTS DECIDING THE ATTRACTION OF DEPARTMENT STORE: THE CASE OF HO CHI MINH CITY Major: Trading Code: 62.34.01.21 THESIS SUMMARY HO CHI MINH CITY – 2016 The thesis was completed in: University of Economics HCMC Tutors: Ph.D Ngo Thi Ngoc Huyen Ph.D Trieu Hong Cam Opponent 1: Opponent 2: Opponent 3: The thesis will be protected in front of the Council at: At h, , 2015 This thesis can be found at: CHAPTER 1: OVERALL INTRODUCTION 1.1 Urgency of the topic In the context of international integration of Viet Nam (VN), almost all business sectors are more or less affected which is impossible to not mention the domestic retail sector So far, the retail sector has experienced strong transformation from state owned economic sector to market-oriented competition since 1995 Total retail sales of goods and services in real prices of all country steadily increased between 1995 and 2014, from approximately VND 122,000 billion to nearly 2,945,000 billion VND (GSO, 2014) The growth was also reflected in the strong growth of number of markets, supermarkets and department stores, from a few hundred markets, 10 supermarkets and department store in 1995 to 8,547 market , 659 supermarkets and 115 department stores in 2012 (GSO, 2013) Beside that, the system also has major department stores like the Lion Corporation (Malaysia) with Parkson Department stores; Vingroup with seven department stores and Mega mall; AEON Corporation (Japan) with department stores Besides, other department stores are still operating as Diamond Plaza, Nowzone, Pandora, Cresent mall, Zen Plaza The foreign retailers who are very famous in the world are also showing their great interests to VN market in the future as Walmart (USA), Auchan (France), Carrefour (France), Tesco (UK), South Investment (Singapore) and E-Mart (South Korea) According to the forecast until 2020, VN will have 1,200 supermarkets and 180 department stores The proportion of retail sales through supermarkets and department stores will account for about 45% of total retail sales of merchandise and service revenues for the whole country (MTI, 2013) An increase in the number of trading centers results in the fact that the shopper tend to select more They prefer returing the department stores who knows how to attract them, with many diverse and numerous stores, many types of goods soled, suitable to their preferences However, it is the fact that department store can attracts such buyers, but can not attract other buyers because each customer has different characteristics and then of course their behaviours are not the same Therefore, the department store managers need to know what aspects which a department store should attract shoppers to come to them (Wong et al, 2001) Given the strong growth and the increasingly fierce competition of this kind of department stores in VN on the path of international integration, understanding the factors that attracting customers to the department stores becomes an essential and important issue not only for managers but also bring practical sense to the process of local development in improving the living standards of the people and to attract more companies engaged in this business sector In addition, in terms of academic review, the researches in the world related to the retail industry in general and department store model in particular are rich and diverse in topics, from understanding the factors that make the image of a small shop, the shopping motivation of customers, intentions and behaviors of their visit to the elements that make up the attraction of retail model whether it is located near or far from the residential areas In VN, there are many studies related to the retail industry, particularly the supermarket model, while the department store model is quite modest The studies focused largely on evaluation of customer loyalty, customer satisfaction, the required attributes of a retail store or even the articles in order to build the macro operating management policies in retail sector The review on such theory has inspired the author, besides the practical problems mentioned above in the selection of topics about factors attracting shoppers in department stores to make his thesis with the desire to contribute to the treasury of world experimental studies a typical case of emerging countries such as VN 1.2 Objectives of the study and research questions Objectives of the study Discover how to understand the attraction of department stores under perspective of shoppers, rather than from the perspective of operators of department stores Since then, seeks way to measure it Discover the determinants of customer attraction of the department stores under the perspectives of shoppers, measure the impact of these factors to the attractiveness of the department stores Conduct shopper segmentation based on their expectations for factor of attraction of going department stores Research questions What is the attraction and how to measure? For department store model, how to understand the attraction? Do factors such as human servicing, products for sales, pricing policies, promotion programs or services have an impact on attracting customers to a department stores or not? In addition to the above factors, the comfort, the convenience of shopping or space of a department store create more positive effects in attracting of a department store or not? How is the influence and impact of these factors to the attractiveness of the department store? Are there differences in the intention and behavior among diverse customers of department stores on demographic matter? The group of customers may have to a department store model? 1.3 Subjects of study and research scope Subjects of research: The attraction of a department store Research scope: On the research subjects, this study focuses only to a target group of shoppers; About retail model, this research limits in type of department store; Regarding the scope of space, this study only examines the department stores in HCM City market; Regarding the scope of time, this study conducted a survey and market observation for a period from January 2013 to June 2015 or in other words the content shown as an overall picture taken back in distance that time 1.4 Research Methodology This research project is conducted by mix-method: Qualitative research is conducted through in-depth interviews with experts and managers in the retail sector and group interviews with regular customers to department stores Quantitative research is conducted through individual interviews form of questionnaires with minimum sample size of 700 people aged 15 and older 1.5 Practical significance of research This study will contribute to generalize theory of consumer behavior Results will well serve a very important business sector of the economy- the retail sector in the context be understood as conversion economies like VN Research also helps department store managers to seize is the determining factor of the attraction of a department store, which factors are most important and less important in courts the customer's shopping Since then, administrators will develop appropriate business strategies to attract the right customer segments they want to target, satisfy their needs and better focus for the planning, service improvement and distribution of resources Finally, this research also contributes to the worldwide experiment research collections on the attractiveness of the department stores, but in a transition market like VN Also, this can also be used as a reference for academic research in the next research in the fields of retail, for university lecturers, students and fellows in commercial business sector CHAPTER 2: THE THEORETICAL BASIC AND RESEARCH MODEL 2.1 The theoretical basic 2.1.1 Theory of Motivation The motivation has long been regarded as the main cause for the personal behavior The nature of the motivation derived from the needs and satisfaction of human Can understand the motivatio as the answer to the question "Why we and what we do?" From that perspective, many researchers have developed many different theories to explain more to this motivation theory and every theory that only focus on a limited field Motivation theory is divided into two branches: the first branch concerning the internal forces within the human that is the drive reduction theory of Clark L Hull (1935), Arousal Theory of Motivation of Kendra Cherry (2015) and Instinct Theory of William McDougall; the second branch relating to external forces, such as the encouragement theory of BF Skinner (1953) Besides, there are many theories about the contents of the motivation as the theory of system need level of Abraham Maslow (1943), twofactor theory of Fredrick Herzberg (1959), the theoretical model of Clayton ERG P Alderfer (1969) and the need theory David McClelland (1961) Within the scope of this study, the relevant theories focuses on branch one and branch two This is the theoretical foundation as a basis for the explanation of human behavior to satisfy their diverse needs 2.1.1.1 Drive-reduction Theory of Motivation, Clark L Hull 1935 Drive-reduction theory became popular in the 1940s and 1950s as a way to explain the behavior, learning and motivation This theory was developed by Clark L Hull and further developed by his colleagues He developed a theory around the idea that the active body to maintain a state of balance or equilibrium Hull used the term "drive" to just stress, discomfort or stimulating demand caused by biology or physiology, and it should be reduced 2.1.1.2 Arousal Theory of Motivation, Kendra Cherry, 2015 Arousal theory shows that people can have certain actions, or reduce or increase the level of stimulation level to maintain optimal levels of mental arousal For example if the level of stimulation of a too low, they can be considered to watch an action movie or jogging If the level of excitation is too high, they will find ways to relax such as meditating or reading a novel 2.1.1.3 Instinct Theory of Motivation, William McDougall This theory suggests that all behavior is motivated by instinct Instinct is innate behavior and target oriented, rather than the result of learning or experience For example, children have an innate reflexes help them to find the nipple and nutrients from the mother, while the birds have an innate to build nests or migrate in winter 2.1.1.4 Incentive Theory of Motivation, B.F Skinner, 1953 Incentive theory shows that behavior is motivated by the desire for reward Fundamental rule of economics that increased or decreased physical motivation will control human behavior People want to something to increase material reward However, people want to decrease something, just so costs increased by the rules or penalties 2.1.1.5 Maslow’s Hierarchy of Needs Theory, 1943 Maslow said that human behavior is derived from the demand and the needs of the people arranged in a priority order from low to high importance Accordingly, the demand at higher levels wants to appear, the demand at lower levels must be satisfied before The higher demand will arise and desire to satisfy more intense when all basic needs in low importance have been met adequate 2.1.2 Factors attracting customers to department stores In the world, there are plenty of authors focused on the retail market but due to the complex nature of its appeal By chronological order, we may list the typical authors such as Martineau (1958), Lindquist (1974), Bellenger et al (1977), Howell & Rogers (1980), Nevin & Houston (1980), Gautschi (1981), Finn & Louviere (1990, 1996), Bloch et al (1994), Wakefield & Baker (1998), Wong et al (2001), Sit & et al (2003), El-Adly (2007), Diana et al (2011), Rasa & Sonata (2013) All of them focus attention on the problem to find out the factors that build up the image of a retail model, the determinants attract customers to the retail model to that adopted the measure by different criteria For example, Wong et al (2001) developed a SCATTR tool to assess the attractiveness of the shopping center under the management of the joint enterprise SCATTR Tools include twenty properties divided into five factors: location, quality and diversity, popularity, service and sales incentives Sit & et al (2003) synthesized 14 different studies of many authors from 1977 until 2001 and made seven groups typical image of a shopping center which are considered important by customers in attracting them They are commodity, accessibility, service and atmosphere like the previous author Also, Sit & et al first added three images related group entertainment needs of customers, the demand for food and safety in the mall El-Adly (2007) in the UAE - a country of many nationalities and multiculturalism discovered seven key factors to attract customers to the shopping center, there are: comfort, leisure activities , the diversity, the core characteristics of shopping centers, convenience and appearance In summary, the differences between these studies are attributes never grouping in the same way They can be separated individually but can also be combined with other attributes It all depends on the characteristics of consumer consumption in that country from which they lead to different behaviors, different assessment models for the department stores 2.1.3 The attractiveness of the department store The attraction is the researchers interpreted in two ways Firstly, in terms of physics, it is understood like gravity theory developed by Isaac Newton in 1680 By this view, there are some pioneering studies of Huff (1964) and Nakanishi & Cooper (1974) applying to the retail sector Second, in terms of social psychology study, which is the attraction, passion, willingness to overcome geographical distances and a certain amount of time to come up with something or somewhere That (Cliquet, 1997) Applications in the retail sector, the attraction is divided into two phenomena, one is the presence of a selling point to attract almost a natural way most customers, the other attraction is due from the efforts of the media program or the trade policies of point of sale (Cliquet, 1997) Summary of multiple studies show that the attractiveness of the department store is measured through many different ways, from intent to customer behavior Maenpaa et al (2008) measured the lure past the average frequency of visits by customers for a department store in a determined time period Howell & Roger (1980) measured by the number of trips a department store in a determined time period and the average frequency of visits by customers to a department store Wakefield & Baker (1998) and Wakefield & Blodgett, (1994), the environmental explore department store affect desire to stay and come back next time of purchase Sit & et al (2003) was first one to add entertainment elements in attracting customers of department stores represented by deciding department stores In terms of psychology, the attraction is also defined by scientists as the ability to activate the wake or the desires of customers, leading them to act in order to meet the individual needs as well as meet social needs (Kendra Cherry, 2015; Russell & Pratt, 1980) Ying & Cheng (2006) suggested that the wake has an impact on perceived service quality and satisfaction in the service environment to enjoy, but there is no environmental impact of utility services Department store is a service environment to enjoy, the managers always try to evoke the wake of our customers through a variety of factors such as space, decorate, display, merchandise, and senses make them go there for shopping, entertainment, stress, regain balance in your life, or at least find inspiration in life 2.1.4 Segmenting shoppers Segmenting shoppers through image properties with very thorough look and feel throughout the characteristics of each customer because individual consumers are heterogeneous in seeking benefits when shopping Each shopper is interested in various image attributes (Steenkamp and Wedel, 1991) Several academic studies have explored the contribution of image attributes for customer segmentation in the department stores Pioneering works were done by Bellenger et al (1977) as identifying two segments of the shoppers because it is economical and shoppers because of entertainment Dennis et al (2001) clasified image area of four properties (goods, accessibility, service and atmosphere) to recognize two customer segments in the shopping center as "shop" shopper and "service" shopper " 2.1.5 The concept of retail operations and department store model 2.1.5.1 The concept of retail operations Retailing is all activities related to the direct sale of products or services to end customers, serving the needs of individuals or noncommercial (Philip Kotler & Gary Armstrong, 2012) Sales in this manner is characterized by goods traffic off the field and into the consumer sector, the value and use value of goods was done Retail activities are varied in size and form from the hawkers, traditional markets to grocery stores, supermarkets, department stores, department stores, convenience stores, direct sales online, television sales, telephone sales and growing sales appear new ways as sales through vending machines and retailers at home or MLM 2.1.5.2 Model of Department store According to the decision 1371/2004/QD-BTM of the Minister of Trade of VN (now the Ministry of Industry and Trade) signed September 24, 2004 promulgating the Regulations on Supermarkets, Department stores, "Department store is type of business organization of modern, multifunctional trade business, including a combination of the type of stores, facility services, halls, meeting rooms, offices for lease layout set medium, uninterrupted in one or several adjacent buildings to meet the standards of business space, technical equipments and management skills, business organization Having served the civilized methods, conveniently meet the development needs of business operations and satisfying the demand for goods and services of customers." 2.2 Design research model 2.2.1 Designing qualitative research This study was conducted to collect qualitative data by direct observation techniques in twelve department stores selected in HCMC, which are Diamond District 1, Nowzone District 1, 3.3 Method of testing research models Main testing method used in this research is multiple linear regression, namely considering the impact of these factors contributing to the attraction (Xi) to the attraction (Y) Meanwhile, the study also tested the model through the effect of moderator variables These variables will affect the quality of the relationship between the independent variables Xi and the dependent variable Y and enhancing the scope of the regression model In this study, K-means analysis is used to segment customers according to the observed variables of the factors of attraction After the clusters have been formed, the next step will be to interpret and describe the customer segments according to the demographic characteristics and their behavior in the department stores The difference between the segments is considered significant at a significance level of less than 0:05 (Litwin, 1995) 3.4 Scale of study model A measurement scales for these concepts were also developed Specifically, the scale of the factors of attraction includes twelve ingredients: Space (8), Commodities (5), Comfort (4), Staff (4), Safety (4) , Prices (3), Additional services (3), convenience (4) Advertising (3), Places (4), Leisure (3) and Quality management (3); Scale the results of the attraction include two components: Intent and behavior (3) and Psychological status (5) A total of 56 observed variables 3.5 Preliminary investigation on assessment of scales The survey was conducted directly with lecturers of HCM City Economics University, students of International Trade and Commerce K39 of HCMC Economics University, students of Diploma in Accounting of HCM Economics University of Economics, staff of VN Collagen Drink Co., Ltd - HCMC Branch, and persons doing morning exercise at Tao Dan Cultural Park Number of questionnaires provided 180 and collected of150 satisfactory sheets Time of survey conducted to from March 01st 2015 to March 20th 2015 Results evaluating the reliability of the scale achieved from 0.779 to 0.956 Scale of "The factors of the attraction": There are SEVEN factors extracted with the total variance is 71.17%> 50% The variations in the scales are load factor> 0.5 However, in the 11 original built model, the determinants of the attraction of department stores include TWELVE factors but here on extracted by SEVEN This difference can be explained by reasons of too small sample size (n = 150) in the preliminary investigation because of saving time and costs In theory study, for small samples, we can solve by evaluating concepts together in pairs (Nguyen Dinh Tho, 2013) However, this method takes too much time when the number of concept study in this case is quite large (k = 12) Therefore, it takes about 66 pairs Therefore, with the desire to better demonstrate the suitability of the model compared to market data in HCMC, formal quantitative research still keeps TWELVE elements for verification steps but the sample size is larger many times (n = 700) Scale of "attraction": There is ONE factor may deduct the total extraction variance is 77 004%> 50% However, in the original built model, the attraction is argued and measured at TWO aspects intention - mental behavior, but here only extract one factor This shows the results of the preliminary investigation of market data showing no difference versus content and theoretical overview and qualitative results presented in chapter two Because of this difference, with the desire to better demonstrate the suitability of the model compared to market data in HCMC, formal quantitative research will be conducted to test the more obvious with larger sample sizes many times (n = 700) CHAPTER 4: ANALYSIS OF RESULTS AND MODEL ACCREDITATION 4.1 How to select respondents and approaches of respondents Option 1: Direct in twelve department stores (n1=411): Twelve interviewers allocated to twelve department stores according to criteria of close to their habitat convenient for travel because under the assignment of coordinators, they must continue access to respondents (shoppers) at the department store by day (time) and hours (time) of the week flexibly These shoppers were interviewed by a convenient method and judgment (non probability) Statistics reality reach respondents In terms of gender, with 137 out of 411 respondents were male (33.3%) and 274 out of 411 respondents were female (66.7%) In terms of age, the results are as follows: Boomers Group (1944-1961) were 21 people, Generation X group (1962-1982) with 70 people and Generation Y group (1983-2000) with 320 people 12 Option 2: Direct in enterprises (n2=146): Ten interviewers conducted the data collection in ten organizations and various enterprises in HCM City, where they are working Statistics reality reach respondents In terms of gender, 30 of 146 respondents were male (20.5%) and 116 out of 146 respondents were female (79.5%) In terms of age, the results are as follows: Boomers Group (1944-1961) with one person, Generation X group (1962-1982) with 79 people and Generation Y group (19832000) with 66 people Option 3: Indirect via Internet (Google Docs) (n3=164): Forty clues respondents are chosen based on the experience and relationships of the study After answering the online questionnaire, the clue respondents by their personal relationship with their work or in society continue to choose the next respondents to members asking them to answer Statistics reality accessible online respondents Regarding gender, male, 47 of 164 respondents (28.7%) and 117 women out of 164 respondents (71.3%) In terms of age, Generation X group (1962-1982) has 64 people and Generation Y group (1983-2000) with 100 people 4.2 Characteristics of respondents In terms of gender, in total 721 respondents, with 214 male and 507 female In terms of age, 78.9% of respondents fall in the group aged 15 to 35 years old Regarding education, the outstanding proportion are undergraduate and graduate students with the absolute number at 582/721 who responded, equivalent to 80.7% Regarding income, 391 respondents have monthly income from VND 7.5 million to VND 30 million Career with 71.4% of respondents to the employee They are public servants and office workers The second largest amount of respondents are students and students, accounting for 15.4% The rest are freelancers, housewives or the retired accounted for 13.2% 4.3 Rating reliability and value scales With the evaluation method of scale reliability and variable testing principle as described in Section 3.6.1, thirteen scales used to measure thirteen concepts in the research model will be evaluated again but with a much larger sample (n = 721) compared with the preliminary investigative steps (n = 150) The results of this assessment will serve as a basis for evaluating value 13 scale and testing research model Results evaluating the reliability of the scale achieved from 0.684 to 0.901 Scale of "The factors of attraction": Results EFA showed NINE factors extracted with the total variance extracted is 63.927%> 50% (Gerbing & Anderson, 1988) However, in the rotation matrix, with some variables lies in many factors simultaneously, as well as lower weighted factors Therefore, these variables must be in turn removed Particularly some variable weighted factor of 0.4 to 0.5 was achieved can be considered depending on the value retains its contents if it makes sense in the present scale (Nguyen Dinh Tho, 2011 ) EFA final results showed NINE factors deducted the total variance extracted is 67.847%, which means that it explains 67.847% market data In terms of value scales, nine factors demonstrate the convergence value and differentiate its value pretty well and almost reached three quarters compared with the pattern coincident research Scale of “Attractiveness”: Results EFA showed that one factor may deduct the total variance extracted is 59 185%> 50% Despite the larger number of samples (n = 721), the attractive even at angles intention - behavior or psychological state perspective also be a factor criticized That means that the official investigation results from market data showing no difference as content expressed in the overview section theory and qualitative results in chapter two Therefore, the scale of the new attraction was named the overall attraction (THTT) 4.4 Testing research model by model of multiple linear regression (MLR) The test results show that the correlation value Sig are less than 0.05 Therefore they are statistically significant Also, the relationship between the factors attracting nine of agents of attraction are positively correlated with each other and quite tight Specifically, the correlation coefficient between THTT and Management was the highest (0.608), followed respectively Convenience (0.533), staff (0.533), Goods (0.519), Safe (0,500), Program for customers (0.497), space (0.490), Advertising (0.423) and position (0.400) Results will be used to step linear regression analysis multiples In this model, the coefficient of determination Adjusted R Square (R2adj) is 0.488 This means that models multiple linear regression was developed in accordance with the data set to the extent of 48.8% or in other words, approximately 14 48.8% of the variation of attractiveness may be explained by differences of nine components, namely: Commodities, space, staff, Safety, Advertising, Location, Convenience, Customer Program and Management The remaining 51.2% of the variation is explained by other variables Overal Attraction = 0,557 + 0,133 Commodities + 0,053 Space + 0,085 Staff + 0,079 Safety + 0,020 Advertising + 0,105 Location + 0,096 Convenience + 0,060 Customer Program + 0,301 Management The regression coefficients are positive factors demonstrate the regression model positive influence on attracting customers to the shopping center of commerce However, of the nine components of the attracting factors mentioned above, there are six components achieved significance level Sig 0.05 as statistically significant They are Commodities, Staff, Safety, Location, Convenience and Management Remaining space, Advertising and Customer Programs (CTKH) with significance level greater than 0.05 so this relationship is not statistically significant The hypothesis H1, H3, H4, H6, H7, H9 accepted and H2, H5, H8 rejected Continue remove three variables as Space, Advertising and Customer Programs The model was run with six variables in the second time with Commodities, Staff, Safety, Location, Convenience and Management The result of the second time (Appendix 20 - 2nd Regression) has changed slightly compared with the one in the coefficient of determination Adjusted R Square (R2adj),, namely R2adj = 0.485 and significant changes in the coefficients regression (β) of six independent variables Overall Attraction = 0,607 + 0,161 Commodities + 0,098 Staff + 0,089 Safety + 0,109 Location + 0,120 Convenience + 0,332 Management 4.4.1 Analysis of multiple linear regression with moderator variables 4.4.1.1 Far- Near matter Calculate the distance of a near department stores is measured through space criteria: Group is the respondents chose answers from 10km or less and are respondents selected answers from 10km or more Results showed that most respondents tend to choose answers below 10km compared to where they came from This number reached over 721 616 people The remaining 105 out 15 of 721 people selected to go beyond 10km Comparing three linear regression model: (1) regression model overall appeal, (2) regression model overall attractiveness, but only consider the case of one group, (3) tissue regression overall attractiveness, but only consider the case of two groups Results showed that when looking at the environment in the 10-kilometer distance, the linear regression model building multiple matching datasets market reached 62.8 The number of factors that have a statistically significant (Sig