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An Examination of the Relationship Among Store Image Attributes Customer Satisfaction and Loyalty Behaviour
The purpose of the study is to examine the significance relationship among store image attributes, consumer satisfaction, behavioral response and intentions. A structured questionnaire was successfully distributed to 600 respondents, who had made purchases from sixty retail formats operated in Delhi and Gurugram belonging to the domain of Shopping Malls, Hypermarket, Supermarket, Department Stores, Discount stores and Category Killers through systematic stratified sampling for the collection of data. Factor analysis was used to determine how many factors related to dimensions of store image as perceived by customers towards retail formats were being measured by the instrument. Correlation analysis was employed to examine the significance relationship among store image attributes, customer satisfaction, behavioral response and intentions. The results of the study are concluded that customer satisfaction is significantly associated with the entire fourteen facets store image, whereas word-of-mouth communication, intention to switch, and customers’ loyalty intention are partially significant with store image attributes, furthermore word-of-mouth communication, intention to switch, and customers’ loyalty intention are also significantlycorrelated with customers’ satisfaction.
Keywords:Retail store, Store Image, Customer Satisfaction, behavioral Intention,
Paper Type: Research paper
With the changing behaviour of Indian customers due to favorable demography, higher disposable income of middle-class consumers, increasing number of working women, easier consumer credit with low interest rates, high brand consciousness, rising internet penetration, aggressive marketing by companies and change in consumption pattern with high aspiration levels allowing them to spend more on new products and brands have also changed the growth scenario of retail sector in India, furthermore India as a developing economy has availability of resources, ease access to credit, rapid real estate infrastructural development, political stability, and safe environment for investment is the growing key drivers of retail sector. In the year 2013, the Indian retail sector was estimated at USD 520 billion with largest employees in the country and by 2018, the sector is likely to grow at a compound annual growth rate (CAGR) of 13 per cent to reach a size of USD 950 billion (PwC research, 2014). But on the other side margin of retailers have started to decrease due to dynamic market structure and world-wide stiff competition, therefore, store image, customer satisfaction and subsequently store loyalty have gained great importance in the retail stores setting, which aim to survive in the competitive market. The concept of store image has an important role on the success of retailing organisation, because it’s not only create true image of store which leads to sales and profitability of retailers, but also significantly influence customer’s preference towards store, customers’ satisfaction with the store (Theodoris and Chatzipanagiotu, 2009), and store loyalty (Bloemer and Ruyter, 1998; Bloemer and Odekerken-Schroder, 2002), moreover customer satisfaction, which has been considered by many firms to be a powerful intangible asset for competitive advantage in the global arena (Ueltschy et al., 2009) and loyal consumers offer a steady streamof revenue to firm by remaining loyal and rejecting competitor offerings (Rauyruen and Miller, 2007). Therefore retail organisations work hard to build the positive store image of its goods and services through huge spending on advertisements and sales attempts. After the reviewing of existing literature, it is found that most of the studies on retail sector are reported from developed countries and no studies were identified to examine the relationship among store image attributes, customer satisfaction and loyalty behaviour collectively in the context of retail store setting in India. Thus, the validity of theories and previous findings on customer satisfaction and loyalty behaviour needs to be tested in different economy and socio cultural environment in order to assess their universal applicability, so the present study aims to fill this gap and the findings of this study will be of interest with existing and would-be multinational and domestic retailers of organised retail sector in India.
This research explores the relationship among three major constructs namely store image, customer satisfaction and loyalty behaviour towards retail store formats. The major past research on these constructs are reviewed below.
Store image has been recognised firstly by Martineau (1958), defined store image as the personality of retail store composed of psychologicalandfunctional attributes and retail store image is represented by a multi-attribute construct (James et al., 1976; Marks, 1976). Store image can be considered as customers’ overall perception towards a store based on the tangible and intangible stores’ features (Osman, 1993; Faircloth et al., 2001; Jin and Kim, 2003).Hartman and Spiro (2005) stated store image as result of the impression of the whole perceived and expected experience in customers’ memory that gained currently or in the past. Yoo and Chang (2005) categorize the most important store image attributes which are concluded through many researches are product (quality, price, and diversity), store atmosphere, store facilities, store service (sales personnel service and loan service), store brand, facilities (ease of shopping, transportation) and promotion.Customer satisfaction is a function of the difference between a customer’s expectations prior to purchase and their perception of the same product and service after purchase (Oliver, 1977; Anderson and Sullivan, 1993). Literature confirms that customersatisfactionhasthreestages:thepre-salesstagewhenexpectationsareabout theproduct, service, benefits, priceandavailability;thesalesperiodstage whencustomer experiencestheenvironment,theproduct,typeofservice, delivery,qualityandredress frombuying;theafter-salesstage whenthecustomerexpectssupport oradvice, replacementorrefund,repairorusesthecomplaintsprocedures and is one of the tools to increase value for customers (Sivadas and Baker-Prewitt, 2000). Morschett et al. (2005) found that customers satisfaction is affected by physical environment, various service aspects such as cashiers, queues, traffic and trolleys, the moments of contact with personnel and the core offer i.e. product variety, assortment, quality and pricing policy of store.Whilethesatisfiedcustomer may influence otherstobuy,on other side dissatisfied customers may lead complaints,legalactionornegativeword-of-mouthcommunication(Engel et al. 1990).Customer loyalty is a situation where repeat purchase behaviour is accompanied by a psychological bond, repeat purchase intentions and behaviours. Day (1969) defined loyalty as a favourable attitude of a customer towards a brand in addition to purchase it repetitively. Loyal customers are less likely to move to other firms and make more buying as compared to less loyal customers (Baldinger and Rubinson, 1996) and they recommends the product or service to others (Pearson, 1996), moreover loyalty is the combination of intention to repurchase, willingness to pay more and positive word-of-mouth communication (Cronin and Taylor, 1992; Zeithaml et al., 1996; Yoon et al., 2010). Reviewed of extant literature has been found as product range, store ambience, attractive layout, in-store promotion, frequent loyalty programmes, price and convenience are the key drivers of loyalty behaviour (Sirohi et al., 1998; Koo, 2003; Miranda et al., 2005), moreover interactionbetweencustomersandsalespersonscouldhaveastrong impactonretailcustomerloyalty(Darian et al., 2001).The behavioral loyalty includes positive word-of-mouth communication andwillingness to recommend to others (Andreassen andLindestad, 1998; Rauyruen and Miller, 2007), while attitudinal loyalty intention consists repurchase intention,demonstrating resistance to switch to the competitors (Cronin and Taylor, 1992; Prus and Brandt, 1995), and even willingness to pay a price premium (Narayandas, 1996; Zeithaml, Berryand Parasuraman, 1996).
Regarding store image attributes and their relationship with customer satisfaction and loyalty behaviour various researches have been done and Demirgunes (2014) explained that product related attributes influence positively to customer satisfaction towards retail store, more extensively product assortment was the single most significant variable affecting the store image, customer satisfaction and choice of retail format across hypermarkets, supermarkets, conventional store and discount stores (Carpenter and Moore, 2006) and apparel stores (Anselmsson, 2006). However physical evidence or facilities (Groeppel-Klein and Germelmann, 2003), promotion factors (Carroll et al.,2007), sales personnel (Darian et al., 2001), and store design & ease factors have been found significant toward store image and customer satisfaction (Turhan, 2014). Price is found most important store image attribute for customers to decide where to shop (Desai and Talukdar, 2003), and price levels of products have been also found to be a significant reason to determine the choice of retail format across different customer groups (Carpenter and Moore, 2006). Naderian (2012) examined the effect of store image attributes on customer satisfaction among Malaysian customers towards 7-Eleven retail stores and found merchandise as most significant attribute influencing customer satisfaction followed by price, personnel and store atmosphere, because 7-Eleven store provides different products at low prices,easy accessibility, valuable information and customer handling than other small and local supermarkets. Thomas (2013) proposed and validated a model linking customer satisfaction, retail store image and loyalty of the customers of supermarket stores in Cochin and confirmed that product quality is most important dimension of store image which influence customer satisfaction closely, followed by store service, price of products, and product assortment in Indian context and store image to impact store loyalty indirectly through the customer satisfaction as mediator role.Watanabe (2013) conducted a study on supermarket customers at Brazil and as result product, personnel, and prices were found significant in relation to customers’ satisfaction, whereas environment and promotions were not significant for the determination of customer satisfaction and reason can be that the half of the sample was from lower class (almost 50 per cent),and low income group attaches low expectations and importance to the dimension environment especially in the case Brazil , where the purchasing power is low compared to developed countries. Roy and Ghosh (2014) developed and validated a scale to investigated the image of apparel store on customer satisfaction and their visit frequency in Indian context and found that factors such as people, merchandize, physical evidence, conviences, promotions and brand strengthen the composition of apparel store image and increase customer satisfaction and patronage by increasing visit frequency.
Based on the reviewed of marketing literature on store image attributes, customer satisfaction and customer loyalty behaviour the conceptual framework of this study preliminary consisted of two sections: the first section concerning with the attributes of store image as perceived by the customers, towards various retail formats (Shopping Malls, Hypermarket, Supermarket, Department Stores, Discount stores and Category Killers). In this section store image was categorized in fourteen dimensions namely “merchandise contains three items”, “service contains four items”, “shopping atmosphere contains four items”, “pricing contains four items”, “product innovation contains three items”, “sales personnel competence contains seven items”, “reliability contains six items”, “physical evidence contains eleven items”, “convenience contains four items”, “location contains four items”, “after sale services contains four items”, “product availability contains three items”, “crowding contains two items”, and “peripheral services contains two items”. The second part includes “customers’ satisfaction contains three items” and customer loyalty towards retail formats. In the study customer loyalty was comprised of three aspects: “customers’ behavioral response (word-of-mouth communication) contains three items”, “customers’ intention to switch contains four items and “customers’ loyalty intention contains four items”. This research explores the linkages among three major constructs namely store image, customer satisfaction and loyalty behaviour and main emphasis of the present study is to examine the significance relationship among store image attribute, consumer satisfaction, behavioral response and intentions.
The purpose of the study is to examine the significance relationship among store image attribute, consumer satisfaction, behavioral response and intentions. A structured questionnaire was successfully distributed to 600 respondents, who had made purchases from sixty retail formats operated in Delhi and Gurugram belonging to the domain of Shopping Malls, Hypermarket, Supermarket, Department Stores, Discount stores and Category Killers through systematic stratified sampling for the collection of data, reason being Delhi and Gurugram as the area has a high migrated and heterogeneous residents with various dimensions such as religious, caste, traditions, social hierarchy, language, literacy, education, occupation and income etc. Out of 600 distributed questionnaires, 461 questionnaires were filled by respondents, 84 incomplete questionnaires were not used for analysis and 377 questionnaires were valid ones; thus the effective recovery rate was 62.83 per cent and respondents were personally administered. The five-point Likert Scale was used to with 1 indicating “strongly disagree” and 5 indicating “strongly agree” examining the store image attributes, customers’ satisfaction, behavioral response and intentions towards retail store formats. SPSS (Version17.0) was used for analysis in this study. Internal consistency analysis was used to access the reliability of measurements. Cronbach’s α-value is commonly used for this purpose and α-value must be higher than 0.70 (Nunnally, 1978). Factor analysis was used to determine how many factors related to dimensions of store image as perceived by customers towards retail formats were being measured by the instrument. Correlation analysis was employed to examine the significance relationship among store image attribute, consumer satisfaction, behavioral response and intentions. Percentage, mean and standard deviation were also used to explain the direction of variable.
A.Internal Consistency Analysis
Internal consistency was used to assess the reliability of the measurements (five constructs) depicting the degree to which they indicate a common latent (unobserved) construct. The value of each variable, as measured by each statement on the five point Likert scale, was computed using the reliability analysis procedure. Description of the variables (V1 to V5) those used in the study are shown in Table-1.
Table-1: Description of the Store Image,Customers’Satisfaction,Behavioral Response
and Intentions Related Variables with Internal Consistency Results
The alpha values range from 0.8238 to 0.8942, which indicates an internal consistency with the alpha value of more than 0.70, so no items were dropped from above list. These results are therefore acceptable and are a reliable measure of the constructs. Overall, this section of the instrument has been proven to be an acceptable instrument through this test.
From a total of 377 respondents, the representation was noted higher of male respondents (54.11 per cent), who were married (35.81 per cent), Bachelor degree(22.81 per cent), in the age group of 25-35 years (26.00 per cent) and 36-45 years (15.12 per cent), belonging to salaried class (28.65 per cent) and earn more than rupees 10 lakhs (22.55 per cent) being surveyed from the premises of Malls (11.94 per cent), Department Stores (5.57 per cent), Discount Stores (8.49 per cent) or Category Killer Stores (11.41 per cent) as compared to their female counterparts under study. On the other side, female representation was slightly higher of those holding master degree or above (25.20 per cent), within an annual income group of rupees5-10 lakhs (18.04 per cent) and who participated from the premises of Hypermarkets (10.34 per cent) or Supermarkets (9.55 per cent) in the survey (table-2).
Table 2: Retail Formats-wise Distribution of Surveyed Customers and their
Furthermore, out of 377 respondents, 20.95 per cent from the premises of Shopping Malls, 19.36 per cent from Category Killers, 19.10 per cent from Hypermarkets, 17.51 per cent from Supermarkets, 12.47 per cent from Discount Stores and 10.61 per cent from Department Stores, were the participants in the final survey.
Using the sample of 377 responses, a factor analysis was used to analyze the data using principal component analysis as the extraction method and varimax as a technique of rotation to determine how many factors were being measured by the instrument.
Table 3: Factor Analysis of Indicators Used for Assessing Store Image as Perceived by
It was revealed that fourteen factors of store image account for 62 per cent of the variance in the instrument. Two of the factors that accounted for smaller amounts of variance were consolidated with other factors reducing the instrument to fourteen factors. The fourteen factors were the following: Merchandise; Service; Shopping atmosphere; Pricing; Product innovation; Sales personnel competence; Reliability; Physical evidence; Convenience; Location; After Sale Service; Product availability; Crowding; and Peripheral Services. Table-3 depicts the loading of the 61 items on each factor (for factor loading greater than .50). Moreover, the 61-item instrument had a reliability of 0.82. The result also indicate 67 percentage of variance in Merchandise, 61 percentage of variance in Service, 63 percentage of variance in Shopping atmosphere, 58 percentage of variance in Pricing, 63 percentage of variance in Product innovation, 61 percentage of variance in Sales personnel competence, 62 percentage of variance in Reliability, 68 percentage of variance in Physical evidence, 61 percentage of variance in Convenience, 57 percentage of variance in Location, 65 percentage of variance in After Sale Service, 58 percentage of the variance in Product availability, 66 percentage of variance in Crowding, and 58 percentage of the variance in Peripheral Services.
Inter-correlations among all the fourteen attributes of retail store image, customer satisfaction, behavioral response and intentions was performed to check the significance relationship among store image attribute, customer satisfaction, behavioral response and intentionssummarized in table-4.As expected all the dependent variables are significantly correlated at p < 0.05, except‘word-of-mouth communication’ with ‘loyaltyintention’, ‘pricing’, ‘physical evidence’, ‘location’, ‘after sales service’, ‘crowding’, ‘product availability’ and ‘peripheral services’; ‘intention to switch’ with ‘service’, ‘shopping atmosphere’, ‘pricing’, ‘product innovation’, ‘physical evidence’, ‘convenience’, ‘after sales service’, ‘product availability’ and ‘peripheral services’; and ‘loyaltyintention’ with ‘pricing’, ‘product innovation’, ‘reliability’, ‘crowding’, ‘product availability’ and ‘peripheral services’, moreover, all the independent variables are negatively correlated with ‘intention to switch’. The result of the study also reported that all dependent variable are significantly correlated at p < 0.05, with merchandise and sales personnel competence; while only customers’ satisfaction is significantly correlated with pricing, product availability and peripheral services.Customers’ satisfaction is most significantly correlated with merchandise andshopping atmosphere followed by sales personnel competence, after sales services, product availability, conviences, service, location, crowding and reliability among store image attributes (table-4). Furthermore word of mouth communication is most significantly correlated with service and merchandise; intention to switch is most significantly correlated with reliability and merchandise, whereas loyalty intention is most significantly correlated with shopping atmosphere and merchandise among store image attributes. The result of study also showed that extremely significant correlation exist between “product innovation and pricing” and “sales personnel competence and crowding”.
Table-4: Means, Standard Deviations and Inter Correlations among Retail Store Image attributes, Customers’ Satisfaction, behavioral
Response and Intentions(N=377)
Annotations: *p ≤ .05; r=Value of correlation coefficient; NS= Not Significant; Mean= Weighted Mean Score; S.D = Standard Deviation;and N = Number of respondents
The results of the study are concluded into several points. First, Customer satisfaction is significantly associated with the entire fourteen facets store image, whereas word-of-mouth communication, intention to switch, and customers’ loyalty intention are partially significant with store image attributes. Customers’ satisfaction is most significantly correlated with merchandise and shopping atmosphere followed by sales personnel competence, after sales services, product availability, conviences, service, location, crowding, reliability and etc. among store image attributes, the results somewhat similar to Clottey et al. (2008) where the antecedents of customer satisfaction stood as price, product assortment, product quality and store service. So the managers are need to emphasis on tangible attributes such as product quality and assortment, layout of store to make customers move easily around the store and to find products and other facilities conveniently and not to make shelves too high), after sale service such as implementing appropriate exchange and refund policy towards defective products, moreover various offers and promotional scheme on products, so that retail store may compete with online retailers also. Second, concerning word-of-mouth communication the result shows that store attributes such as service and merchandise are most important, which make an intuitive sense that if retail store is enable to provide products as per the expectations of customers, consequently customers will act as a store ambassador for the publicity of store. Third, reliability isreverse and significantlycorrelated with intention to switch to other store, because customers’ prerequisite is trust and safe environment for shopping at a store about surely the requiring products will availiable, error-free sales transaction, committed about services offers and discounts on sales, trustworthy sales personnel and etc., which leads to stop the defection behaviour of customers to other stores. Fourth, the attributes such as shopping atmosphere, merchandise, sales personnel competence, service and after sales service leads to loyalty intention towards store and these findings are similar with (Anselmsson, 2006; Theodoridis and Chatzipanagiotou, 2009).Furthermore word-of-mouth communication, intention to switch, and customers’ loyalty intention are also significantlycorrelated with customers’ satisfaction. This makes intuitive sense as the customer satisfaction with the store image is increasing, he/she is going to make more word-of-mouth communication and intention to switching on other store will decrease whereas possibility of loyalty of the customers to purchase from same retail store will also increase.This study, however, has some limitations also. Since the present study was conducted with a limited sample of Delhi and Gurugram, the results cannot generalize to the entire metropolitan and smart cities in India. Future research should gather a sample of retail customers from various metropolitan and smart cities across the country in order to generalize the relationship among store image attributes, customers’ satisfaction, customers’ behavioral response (word of mouth communication), customers’ intention to switch and customers’ loyalty intention. Moreover future research might include studies to identify factors influencing customer satisfaction and loyalty in other retail environments such as food courts, restaurants and hotel industry.
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