Antecedents of shopper loyalty in the vietnamese supermarkets

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Lam Hoang Vu ANTECEDENTS OF SHOPPER LOYALTY IN THE VIETNAMESE SUPERMARKETS MASTER OF BUSINESS (Honours) Ho Chi Minh City – Year 2012 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Lam Hoang Vu ANTECEDENTS OF SHOPPER LOYALTY IN THE VIETNAMESE SUPERMARKETS ID: 60340102 MASTER OF BUSINESS (Honours) SUPERVISOR: DR NGUYEN THI MAI TRANG Ho Chi Minh City – Year 2012 Running head: ANTECEDENTS OF SHOPPER LOYALTY ANTECEDENTS OF SHOPPER LOYALTY IN THE VIETNAMESE SUPERMARKETS LAM HOANG VU UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business i ANTECEDENTS OF SHOPPER LOYALTY ii ACKNOWLEDGEMENTS I would like to express my sincere thankfulness to my research advisor, Dr Nguyen Thi Mai Trang, who made me believe in myself and gave me the possibility to complete this thesis Her guidance helped me in all the time of research and writing this thesis I am sure that this thesis would not have been possible without her support I also thank Prof Nguyen Dinh Tho I am extremely grateful and indebted to him for his expert, valuable guidance, insightful comments, and encouragement extended to me I would like to express my gratitude to all ISB staffs that supported necessary materials and helped summit my papers Especially, I would like to give my special thanks my family for supporting me spiritually throughout my life Lam Hoang Vu Ho Chi Minh City, December 29, 2012 ANTECEDENTS OF SHOPPER LOYALTY ABSTRACT With a population of 91 million consumers and economic growth rate averaged 6.37 percent from 2000 until 2012, Vietnam has been an attractive foreign investment destination Moreover, consumer preference has been changing along with higher income, becoming sophisticated and improving living standard in recent years In addition, Nguyen, Nguyen, and Barrett (2007, p 228) claim that “little has been paid to transitional markets like Vietnam, where supermarkets are still a new retailing system, appealing primarily to upper class consumers in urban areas of the country” Therefore, supermarket retailers have to take advantage of new innovations to create their competitive advantages When a customer goes shop at certain supermarket, what make him/her keeping buying? And what are factors affecting his/her loyalty? The retailers had to find out the answer to identify appropriate strategies for achieving their own goals Based on that, the study was carried out to reveal the impact of service quality, product quality and assortment, layout, perceived price fairness, and convenient location on shopper loyalty The study was conducted by the survey questionnaire A sample of 420 consumers are living and working in Ho Chi Minh City The result revealed that service quality, product quality, perceived price fairness, and convenient location have positive relationships with shopper loyalty iii ANTECEDENTS OF SHOPPER LOYALTY TABLE OF CONTENTS ACKNOWLEDGEMENTS II ABSTRACT III CHAPTER 1: INTRODUCTION 1.1 BACKGROUND 1.2 RESEARCH PROBLEMS 1.3 RESEARCH QUESTIONS AND OBJECTIVES 1.4 RESEARCH DELIMITATION 1.5 THESIS STRUCTURE CHAPTER 2: LITERATURE REVIEW 2.1 SHOPPER LOYALTY 2.2 THE ANTECEDENTS OF SHOPPER LOYALY 2.2.1 Service quality 2.2.2 Product quality and assortment 2.2.3 Layout 2.2.4 Perceived price fairness 2.2.5 Convenient location 2.3 RESEARCH MODEL AND HYPOTHESES CHAPTER 3: METHODOLOGY 10 3.1 RESEARCH PROCESS 10 3.2 MEASUREMENT SCALES 11 3.2.1 Shopper loyalty 11 3.2.2 Service quality 11 3.2.3 Product quality and assortment 12 3.2.4 Layout 12 iv ANTECEDENTS OF SHOPPER LOYALTY 3.2.5 Perceived price fairness 13 3.2.6 Convenient location 13 3.3 QUALITATIVE RESEARCH 13 3.3.1 Sampling 14 3.3.2 Data collection 14 3.3.3 In-depth interviews result 14 3.4 SAMPLING METHOD 15 3.4.1 Sampling 16 3.4.2 Data collection 16 3.5 DATA ANALYSIS METHODS 16 3.5.1 Cronbach’s alpha 16 3.5.2 Exploratory Factor Analysis (EFA) 17 3.5.3 Multiple Regression Analysis 18 CHAPTER 4: DATA ANALYSIS AND RESULTS 19 4.1 DESCRIPTIVE ANALYSIS 19 4.2 MEASURE ASSESSMENT 20 4.2.1 Cronbach’s alpha 20 4.2.2 Exploratory factor analysis 21 4.3 HYPOTHESES TESTING 23 4.4 TESTING THE EFFECTS OF DEMOGRAPHIC VARIABLES 24 4.5 DISCUSSION OF FINDINGS 25 CHAPTER 5: CONCLUSION AND IMPLICATION 29 5.1 CONCLUSION 29 5.2 MANAGERIAL IMPLICATIONS 30 5.3 LIMITATION OF STUDY AND FUTURE RESEARCH 31 REFERENCES 33 v ANTECEDENTS OF SHOPPER LOYALTY APPENDICES 38 Appendix A: Questionnaire 38 Appendix B: Codified Variables 40 Appendix C: First Time Running – Eigenvalues 44 Appendix D: First Time Running – Factor Loadings 45 Appendix E: Second Time Running – Eigenvalues 46 Appendix F: Second Time Running – Factor Loadings 47 Appendix G: Third Time Running – Eigenvalues 48 Appendix H: Charts of Testing Hypotheses 49 Appendix I: Result of Affecting of Demographic Variables 51 LIST OF FIGURES Figure 2.1: A Conceptual Model Figure 3.1: Research Process 10 Figure H.1: Histogram of Shopper Loyalty 49 Figure H.2: Normal P-P Plot of Shopper Loyalty 49 Figure H.3: Scatterplot of Shopper Loyalty 50 vi ANTECEDENTS OF SHOPPER LOYALTY LIST OF TABLES Table 3.1: Scales of Shopper Loyalty 11 Table 3.2: Scales of Service Quality 12 Table 3.3: Scales of Product Quality and Assortment 12 Table 3.4: Scales of Layout 13 Table 3.5: Scales of Perceived Price Fairness 13 Table 3.6: Scales of Convenient Location 13 Table 3.7: Cronbach’s Alpha Reliability Coefficient 17 Table 4.1: Sample Description 19 Table 4.2: Reliability Analysis 20 Table 4.3: Factor Loadings 22 Table 4.4: Results of Pearson Correlation 23 Table 4.5: Results of Standard Multiple Regression 24 Table 4.6: Creating and Recoding Variables 24 Table 4.7: Results of Hypotheses Testing 26 Table I1: Model Summary of Testing Male 51 Table I2: Model Summary of Testing Younger 51 Table I3: Model Summary of Testing Student 51 Table I4: Model Summary of Testing Low Income 52 vii ANTECEDENTS OF SHOPPER LOYALTY CHAPTER INTRODUCTION This chapter introduces the background of the Vietnamese supermarket industry as well as the status of shopper loyalty The research questions and objective are proposed to explore the factors determining customer loyalty Based on these, research delimitation is proposed and thesis structure is presented 1.1 Background According to “Vietnam Retail Analysis (2008-2012)” (2010), the researchers claimed that “fast pace growth in Vietnam’s retail market has made the country an attractive destination for multinational retailers Vietnam holds the 4th position among 30 countries attracting foreign investors As per the WTO agreement, the government has removed limitation on capital invested by the foreign investors.” “The value of retail sales in Vietnam has rapidly risen over the past few years” “The retail sales are expected to surge at a CAGR of around 20% during 2010-2012.” C V (2012) states that although the nation has faced a difficult year, the retail market in 2011 still grew and made up 15-16 percent of Vietnam’s GDP with an increase of 29.3 percent over the previous year Currently, there are approximately 900 supermarkets, shopping malls, and convenience stores, along with a system of 9,000 traditional markets in Vietnam Moreover, the spending and consumption habit of Vietnamese people has change a lot in the last few years As stated in “Vietnam Retail Market Forecast to 2014” (2012), “the modern retail channels are expected to play a crucial role in future growth” Moreover, it is estimated that the retail sale will continue to grow at a CAGR of around 26% during 2012-2015 In addition, the report also mentioned that Vietnam is one of the world’s five most lucrative retail markets Therefore, Vietnam’s retail market will attract a number of foreign investors as well as international brands These researches have pointed out that Vietnam has been considered to be one of the most potential markets in Asia In addition, foreign firms (like Big C, Metro) have been ANTECEDENTS OF SHOPPER LOYALTY 38 APPENDICES Appendix A: Questionnaire I am a student of UEH’s International School of Business (ISB) And, I am conducting a study on factors affecting on shopper loyalty in Vietnamese supermarket I would appreciate for your support if you spend a few minutes to filling in this questionnaire Please note that there are no right or wrong answers A- Store information - Have you ever gone shopping at the supermarket? Yes No - Which store you go to the most often? (Please choose one store only) Big C Maximark Co.opmart Citimart Metro Lottemart Other:…………… - How often you go to this store per month? Once Twice Three times Four times Over four times B- Main contents With the following statements, please check cross (X) the number that most fits your opinion (Anchored by: Strongly disagree; Disagree; Disagree somewhat; Neutral; Agree somewhat; Agree; Strongly agree) No Service quality This store has helpful employees Item Rating scale This store has friendly employees This employees at this store(s) are polite to me This store has an adequate number of employees available to assist me This store always improve service quality In general, I am satisfied with the service offered at this store 7 My shopping experiences at this store have always been pleasant Product quality and assortment The products at this store are of high quality The products at this store are very satisfactory compared to those of other stores 10 I shop at this store because its products are superior to its competitors 11 This store has products that are not available at other stores ANTECEDENTS OF SHOPPER LOYALTY 39 No Item 12 This store has a right merchandise selection Rating scale 13 This store is well stocked across its different departments 14 This store offers the assortment of products I am looking for 15 This store has an extensive assortment of products Layout 16 Finding the products I need is easy 17 The width of the aisles at this store allow for easy cart navigation 18 It is easy to locate the different departments within this store 19 This store has a pleasing layout Perceived price fairness 20 I am satisfied with the general price level of merchandise at this store 21 This store provides a good value for the money 22 I am satisfied with the price/quality ration offered at this store Convenient location 23 This store is located where it can be easily reached 24 I am satisfied with the location of this store Shopper loyalty 25 I care about the long-term success of this store 26 I trust this store 27 I feel loyal to this store 28 I am going to my shopping in this store in next few weeks 29 I am very committed to this store 30 Shopping in this store is my first choice 31 I encourage my relatives and friends to go to this store C- Personal information - Name:……………………… Male - Gender Female - Age 18 or less 19-29 30-40 41-50 Over 50 - Career Student Housewife Free-lancer Officer Other:…… or less – 10 11-15 16 - 20 Over 20 - Income per month (million VND) ANTECEDENTS OF SHOPPER LOYALTY 40 Appendix B: Codified Variables No Name Label Measure var11 This store has helpful employees Scale var12 This store has friendly employees Scale var13 This employees at this store(s) are polite to me Scale var14 This store has an adequate number of employees available to assist me var15 This store is service oriented var16 In general, I am satisfied with the service offered at this store var17 My shopping experiences at this store have always been pleasant var21 The products at this store are of high quality var22 The products at this store are very satisfactory compared to those of other stores 10 var23 I shop at this store because its products are superior to its competitors Scale Scale Scale Scale Scale Scale Scale 11 var24 This store has products that are not available at other stores Scale 12 var25 This store has a right merchandise selection Scale 13 var26 This store is well stocked across its different departments Scale 14 var27 This store offers the assortment of products I am looking for Scale 15 var28 This store has an extensive assortment of products Scale 16 var31 Finding the products I need is easy Scale 17 var32 The width of the aisles at this store allow for easy cart navigation 18 var33 It is easy to locate the different departments within this store Scale Scale ANTECEDENTS OF SHOPPER LOYALTY No Name Label 19 var34 This store has a pleasing layout 20 var41 I am satisfied with the general price level of merchandise 41 Measure Scale Scale at this store 21 var42 This store provides a good value for the money 22 var43 I am satisfied with the price/quality ration offered at this Scale Scale store 23 Var51 This store is located where it can be easily reached Scale 24 Var52 I am satisfied with the location of this store Scale 25 var61 I care about the long-term success of this store Scale 26 var62 I trust this store Scale 27 var63 I feel loyal to this store Scale 28 var64 I am going to my shopping in this store in next few Scale weeks 29 var65 I am very committed to this store Scale 30 var66 Shopping in this store is my first choice Scale 31 var67 I encourage my relatives and friends to go to this store Scale 32 SLO Shopper loyalty Sum of var63, var64, var65, var66, and var67 33 SERV Service quality Sum of var11, var12, var13, var14, and var15 34 PROQ Product quality Sum of var22, var23, and var24 ANTECEDENTS OF SHOPPER LOYALTY No 35 Name LAY Label Layout 42 Measure Sum of var31, var32, var33, and var34 36 PRI Perceived price fairness Sum of var61, var62, and var63 37 CLO Convenient location Sum of var71 and var72 38 a1 Favorite supermarket Nominal 39 a2 Buying frequency Nominal 40 c1 Gender Nominal Male Code =1 Female Code = Age Nominal 18 or less Code = 19-29 Code = 30-40 Code = 41-50 Code = Over 50 Code = Career Nominal Student Code = Housewife Code = Free-lancer Code = 41 42 c2 c3 ANTECEDENTS OF SHOPPER LOYALTY No 43 Name c4 Label 43 Measure Officer Code = Others Code = Income per month Nominal or less Code = 5-10 Code = 11-15 Code = 16-20 Code = Over 20 Code = 44 Male Male group Recode c1 (1=1) (1=0) 45 YOG Younger group Recode c2 (1=1) (2=1) (3=0) (4=0) (5=0) 46 STU Student group Recode c3 (1=1) (2=0) (3=0) (4=0) (5=0) 47 LIN Low income group Recode c4 (1=1) (2=0) (3=0) (4=0) (5=0) ANTECEDENTS OF SHOPPER LOYALTY 44 Appendix C: First Time Running– Eigenvalues Initial Eigenvalues Component Total % of Cumulative Variance % 10.529 33.965 33.965 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 2.459 1.933 1.717 1.309 1.175 1.102 937 829 781 711 641 591 550 501 479 461 441 414 387 375 351 325 313 288 278 264 257 230 196 178 7.932 6.235 5.539 4.224 3.789 3.554 3.024 2.674 2.518 2.293 2.066 1.906 1.775 1.616 1.547 1.487 1.422 1.334 1.247 1.209 1.131 1.047 1.011 930 896 850 830 742 633 575 41.897 48.133 53.672 57.896 61.685 65.238 68.262 70.936 73.454 75.748 77.814 79.720 81.494 83.110 84.656 86.144 87.565 88.899 90.146 91.355 92.487 93.533 94.544 95.474 96.370 97.221 98.050 98.793 99.425 100.000 Extraction Sums of Squared Rotation Sums of Squared Loadings Loadings Total 10.52 2.459 1.933 1.717 1.309 1.175 1.102 Extraction Method: Principal Component Analysis % of Cumulative Variance % Total % of Variance Cumulative % 33.965 33.965 4.119 13.288 13.288 7.932 6.235 5.539 4.224 3.789 3.554 41.897 48.133 53.672 57.896 61.685 65.238 3.981 2.952 2.439 2.433 2.409 1.891 12.840 9.523 7.869 7.848 7.771 6.099 26.128 35.651 43.520 51.368 59.139 65.238 ANTECEDENTS OF SHOPPER LOYALTY 45 Appendix D: First Time Running – Factor Loading Component var11 var12 var13 var14 var15 var16 var17 var21 var22 var23 var24 var25 var26 var27 var28 var31 var32 var33 var34 var41 var42 var43 var51 var52 var61 var62 var63 var64 var65 var66 var67 727 793 767 652 701 626 571 363 259 212 021 198 078 195 190 107 191 189 241 105 122 148 136 185 113 146 148 062 202 166 074 091 068 129 137 143 184 223 083 151 185 206 178 159 171 151 081 146 131 144 199 197 241 178 209 568 663 687 623 759 760 748 124 142 197 100 110 135 217 375 138 110 121 162 235 336 094 755 693 738 736 230 076 154 205 164 184 151 144 139 096 083 -.020 124 164 134 078 078 004 095 267 754 783 699 425 373 098 046 084 162 139 044 119 055 078 084 046 159 171 117 -.145 225 148 190 067 -.089 045 129 237 412 384 182 084 108 199 566 644 639 713 221 142 096 122 093 217 070 111 139 136 078 158 123 022 098 162 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization a Rotation converged in iterations 068 038 061 159 053 084 063 195 071 051 086 063 154 142 119 111 065 165 099 792 840 811 164 216 149 089 171 162 020 178 102 193 083 164 -.107 003 137 076 184 032 017 083 100 098 008 128 149 100 154 013 173 106 130 845 784 284 327 177 193 -.032 -.075 -.024 ANTECEDENTS OF SHOPPER LOYALTY 46 Appendix E: Second Time Running – Eigenvalues Initial Eigenvalues Component Total 10 11 12 13 14 15 16 17 18 19 20 21 22 23 7.580 2.150 1.877 1.475 1.237 1.092 862 780 658 637 531 485 467 436 400 375 355 346 306 276 271 215 192 % of Cumulative Variance % 32.955 9.346 8.162 6.414 5.376 4.748 3.748 3.390 2.860 2.768 2.309 2.108 2.030 1.895 1.739 1.630 1.543 1.504 1.330 1.200 1.178 933 833 32.955 42.301 50.464 56.877 62.253 67.002 70.750 74.139 77.000 79.768 82.077 84.185 86.215 88.110 89.849 91.479 93.022 94.526 95.856 97.056 98.234 99.167 100.000 Extraction Sums of Squared Rotation Sums of Squared Loadings Loadings Total 7.580 2.150 1.877 1.475 1.237 1.092 Extraction Method: Principal Component Analysis % of Cumulative Variance % 32.955 9.346 8.162 6.414 5.376 4.748 32.955 42.301 50.464 56.877 62.253 67.002 Total 3.253 3.051 2.700 2.434 2.155 1.818 % of Cumulative Variance % 14.144 13.265 11.739 10.581 9.371 7.902 14.144 27.409 39.148 49.729 59.100 67.002 ANTECEDENTS OF SHOPPER LOYALTY 47 Appendix F: Second Time Running – Factor Loading Component var11 var12 var13 var14 var15 var22 var23 var24 var28 var31 var32 var33 var34 var41 var42 var43 var51 var52 var63 var64 var65 var66 var67 765 822 772 655 703 270 197 015 231 107 214 160 227 118 111 130 124 164 155 046 174 164 068 074 043 112 175 162 153 172 175 202 059 123 099 148 162 176 219 127 191 659 652 771 788 752 138 113 193 137 164 124 119 172 226 779 726 746 746 215 116 150 222 167 160 153 097 092 028 079 028 069 162 088 063 061 120 197 143 089 173 101 803 873 810 180 214 211 150 023 182 131 107 118 126 079 104 761 813 745 193 100 143 180 052 092 086 084 095 079 128 -.112 233 144 238 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization a Rotation converged in iterations 196 086 181 -.088 023 056 031 089 203 160 091 178 032 172 113 144 847 837 204 295 017 -.006 033 ANTECEDENTS OF SHOPPER LOYALTY 48 Appendix G: Third Time Running – Eigenvalues Initial Eigenvalues Component Total % of Cumulative Variance % Extraction Sums of Squared Rotation Sums of Squared Loadings Loadings Total % of Cumulative Variance % 7.348 33.400 33.400 7.348 33.400 2.150 9.771 43.171 2.150 9.771 1.877 8.530 51.701 1.877 8.530 1.475 6.704 58.405 1.475 6.704 1.236 5.620 64.026 1.236 5.620 1.091 4.961 68.987 1.091 4.961 804 3.654 72.641 676 3.075 75.715 639 2.906 78.621 10 535 2.430 81.051 11 488 2.218 83.269 12 470 2.137 85.406 13 451 2.048 87.454 14 406 1.846 89.300 15 377 1.713 91.013 16 355 1.614 92.628 17 347 1.576 94.204 18 306 1.393 95.597 19 278 1.263 96.861 20 273 1.243 98.104 21 218 989 99.093 22 200 907 100.000 Extraction Method: Principal Component Analysis 33.400 43.171 51.701 58.405 64.026 68.987 Total 3.208 3.024 2.652 2.398 2.123 1.771 % of Cumulative Variance % 14.583 13.747 12.056 10.900 9.648 8.051 14.583 28.330 40.386 51.287 60.935 68.987 ANTECEDENTS OF SHOPPER LOYALTY Appendix H: Charts of Testing Hypotheses Figure H1: Histogram of Shopper Loyalty Figure H2: Normal P-P Plot of Shopper Loyalty 49 ANTECEDENTS OF SHOPPER LOYALTY Figure H3: Scatterplot of Shopper Loyalty 50 ANTECEDENTS OF SHOPPER LOYALTY 51 Appendix I: Result of Affecting of Demographic Variables Table I1 Model Summary of Testing Male Model R 576a 580b R Square 332 337 Adjusted Std Error R Square of the Estimate 323 327 3.75571 3.74605 Change Statistics R Square Change 332 005 F Change df1 39.322 3.046 df2 Sig F Change 396 395 000 082 a Predictors: (Constant), Convenient location, Product quality, Service quality, Perceived price fairness, Layout b Predictors: (Constant), Convenient location, Product quality, Service quality, Perceived price fairness, Layout, Male c Dependent Variable: Shopper loyalty Table I2 Model Summary of Testing Younger Model R R Square Adjuste dR Square Std Error of the Estimate Change Statistics R Square Change F Change df1 df2 Sig F Change 576a 332 323 3.75571 332 39.322 396 000 b 580 336 326 3.74768 005 2.699 395 101 a Predictors: (Constant), Convenient location, Product quality, Service quality, Perceived price fairness, Layout b Predictors: (Constant), Convenient location, Product quality, Service quality, Perceived price fairness, Layout, Younger c Dependent Variable: Shopper loyalty Table I3 Model Summary of Testing Student Model R R Adjusted Std Error of Change Statistics Square R Square the Estimate R Square F df1 df2 Change Change Sig F Change 576a 332 323 3.75571 332 39.322 396 000 578 b 334 324 3.75429 002 1.301 395 255 a Predictors: (Constant), Convenient location, Product quality, Service quality, Perceived price fairness, Layout b Predictors: (Constant), Convenient location, Product quality, Service quality, Perceived price fairness, Layout, Student c Dependent Variable: Shopper loyalty ANTECEDENTS OF SHOPPER LOYALTY 52 Table I4 Model Summary of Testing Low Income Model R R Adjuste Square dR Square 576 a 577 b Std Error of the Estimate Change Statistics R Square Change F Change df1 df2 Sig F Change 332 323 3.75571 332 39.322 396 000 332 322 3.75876 001 359 395 549 a Predictors: (Constant), Convenient location, Product quality, Service quality, Perceived price fairness, Layout b Predictors: (Constant), Convenient location, Product quality, Service quality, Perceived price fairness, Layout, Low income c Dependent Variable: Shopper loyalty ... understand the attitudinal loyalty of Vietnamese shopper by examining the literature and determining antecedents of shopper loyalty Therefore, the study was to answer the question “How is the relationship... Summary of Testing Low Income 52 vii ANTECEDENTS OF SHOPPER LOYALTY CHAPTER INTRODUCTION This chapter introduces the background of the Vietnamese supermarket industry as well as the status of shopper. .. Chi Minh City – Year 2012 Running head: ANTECEDENTS OF SHOPPER LOYALTY ANTECEDENTS OF SHOPPER LOYALTY IN THE VIETNAMESE SUPERMARKETS LAM HOANG VU UNIVERSITY OF ECONOMICS HO CHI MINH CITY International