UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Dang Van Tuan KEY FACTORS OF RETAIL SERVICE QUALITY AFFECTING SHOPPERS’ PERCEPTION OF RETAIL STORE SERVICE: SUPPERMARKETS VERSUS CONVENIENCE SHOPS IN VIET NAM ID: 22110076 MASTER OF BUSINESS SUPERVISOR: Dr. DINH THAI HOANG Ho Chi Minh City – Year 2014 1 : add luanvanchat@agmail.com LUAN VAN CHAT LUONG download Abstract The purpose of this paper was to determine shoppers’ perceptions of service quality offered in Ho Chi Minh City, Viet Nam supermarkets and small convenience shops. A cross sectional design of explorative nature was adopted for this study to evaluate the shoppers’ perception of the convenience shops and supermarkets. This research was used an existing scale to measure retail service quality and also explores the comparison between the convenience shops and supermarkets.
The objectives of this study have been achieved through study 355 completed questionnaires obtained from Ho Chi Minh City customers were used in the analysis for the main study. There are main five factors positively affect to overall evaluation of retail service quality including physical aspects, reliability, personal interaction, problem solving and policy. Principal component analysis was used for scale reduction and multiple regression analysis was used to find associations. The result of this study recommend that the competitive strategies for convenience shops are to concentrate on willingness to assist or in helping the customer, skills to solve customers’ problems and providing variety and deep assortment and improvement in cleanliness.
It coincides with customers’ suggestions for improvement such as improving on the physical facilities, displays, shop presentation and arrangement as well as in-store and environment. The competitive strategies for supermarkets are to concentrate policy and personal interaction. From these findings, managerial implications and limitation of this research have been also discussed. 2 : add luanvanchat@agmail.com LUAN VAN CHAT LUONG download CHAPTER 1: INTRODUCTION.2 Research methodology and research scope.
7 CHAPTER 2: REVIEW OF LITERATURE .1 Service quality and customers’ perception .2 Review of Service Quality Models .3 Model and hypothesis .4 Methodology of data analysis .3 Exploration factor analysis .4 Multiple regression analysis. 23 CHAPTER 4: RESEARCH RESULTS .1 Data statistical analysis .2 Cronbach’s Alpha coefficient of reliability test.3 Exploratory factor analysis (EFA) .4 Multiple regression analysis for common model.5 Hypothesis testing for Common model.6 Multiple regression analysis of supermarkets.7 Multiple regression analysis of Convenience Shops .8 Hypothesis testing of moderating effect. 40 CHAPTER 5: CONCLUSION, IMPLICATIONS, AND LIMITATIONS .1 Competitive Strategies for Convenience Shops .2 Competitive Strategies for Supermarkets .3 Limitation and for further research. 52 Appendix 1: The RSQS Items used in the Instrument.
58 Appendix 4: Test result of independence of residuals – Common Model. 61 Appendix 5: Test result of linear relationship - Common Model. 61 Appendix 6: Test result of homoscedasticity of residuals – Common Model. 62 Appendix 7: Correlation indexes – Common Model.
62 3 : add luanvanchat@agmail.com LUAN VAN CHAT LUONG download Appendix 8: Coefficients indexes – Common Model. 63 Appendix 9: Test result of Normality of residuals – Common Model. 63 Appendix 10: Test result of independence of residuals – Convenience shops. 64 Appendix 11: Test result of linear relationship - Convenience shops.
64 Appendix 12: Test result of homoscedasticity of residuals – Convenience shops. 66 Appendix 13: Correlation indexes – Convenience shops. 66 Appendix 14: Coefficients indexes – Convenience shops. 67 Appendix 15: Test result of Normality of residuals – Convenience shops.
68 Appendix 16: Test result of independence of residuals - supermarkets. 68 Appendix 17: Test result of linear relationship – supermarkets. 68 Appendix 18: Test result of homoscedasticity of residuals – supermarkets. 69 Appendix 19: Correlation indexes - supermarkets.
70 Appendix 20: Coefficient indexes - supermarkets. 71 Appendix 21: Test result of Normality of residuals – supermarkets. 71 4 : add luanvanchat@agmail.com LUAN VAN CHAT LUONG download CHAPTER 1: INTRODUCTION Retail service quality has drawn attention of researchers and managers in recent decades (Zeithaml, 2000). It has become very much important in the competitive environment and widely used by the retailers as one of the important strategy because of its impact on customer satisfaction.
The retailing industry plays a crucial role in the overall economy of Viet Nam. By satisfying customers through high quality service, business firms not only retain their current customers, but also increase their market share (Finn and Lamb, 1991). By the way, retailers have positioned themselves for all kind of customer needs and income levels especially the growing young working population. Many retailers have been upgrading themselves by re- locating to up-coming modern malls and shopping centers, providing superior shopping atmosphere and experience especially in the urban and semi urban centers.
To date, many studies on service quality relied on service quality construct and scale by Parasuraman et al. However, this application to the retail industry may not be appropriate for service quality in retailing industry, as well as not clear enough whether these retailers have fully embraced the retail concept which emphasis on proper communication, total retail experience, customer service, relationship retailing and consistent strategy. Additionally, the retailers are more forced to concentrate towards customer’s perception in the competitive environment. One of typical characteristic in retail setting, especially retail stores where there is a mix of product and service, retailers are likely to have impact on service quality more than on product quality (Dabholkar et al.
As retailers can create such effects, service quality plays a significant strategic role in creating quality perceptions. In this, the marketing decisions revolving around the target market, product assortment, services and store atmosphere, store activities and experience, procurement, price decisions, communications and location decisions which are very critical to a retailer’s success should be emphasized (Kotler & Keller, 2006). Recently, the growth in importance of service quality in the world has been influenced greatly by the changing nature of the world economies and the customers changing needs, tastes 5 : add luanvanchat@agmail.com LUAN VAN CHAT LUONG download and preferences. The move has also been fueled by the growth in consumerism, world travel and the competitive business environments.
The service quality has become a key concept in a competitive corporate strategy (Gronroos, 2001). However, there have been very few studies on retail service quality in Vietnam, especially the comparison between supermarkets and convenience shops. Therefore, the research on perception of service quality within convenience shops and supermarkets in Viet Nam is necessary to show out an overall picture of retail service quality in Viet Nam. Hence, the question is how to evaluate customer’s perception of service performance within the retail stores that needs to clarify timely and pertinent because perceived performance could influence the retail stores image, customer satisfaction and bottom-line growth.1 Problem statement Recently, many firms have come to realize that understanding, meeting and anticipating customer needs is probably the most important source of sustained competitive advantage (Vilares & Coelho, 2003).
Especially, in-depth knowledge of how to satisfy customers is very important in developing countries such as Viet Nam, where small convenience stores are struggling to compete with large supermarkets that are expanding to sub-urban areas and elsewhere. In order to gain the competitive advantage and increase organizational effectiveness, the improvement of service quality is required and needed to be paramount to focus attention, because that is only the way to make a differentiation. Excellent customer service may indeed be the best answer to countering the increasing trend of the expansion of supermarkets. The retailing sector has been the focus of much academic research and considerable attention have been directed to the way consumers think and feel about stores making up their attitudes and perceptions towards the stores.
In the world, there are some researchers have researched about this such as Ed Watkins (1976) researched on factors influencing choice of supermarkets and convenience stores to develop a marketing strategy for each, while Ryu and Han (2010) investigated the influence of quality food, service and physical environment on customer satisfaction and behavioral intention in 6 : add luanvanchat@agmail.com LUAN VAN CHAT LUONG download quick-casual restaurants in Midwestern state. This study is aimed to explore the components of retail service quality in term of supermarkets and convenience shops in Viet Nam, as well as the relationships between each of retail service quality components and customer’s overall evaluation of retail service quality. This study is also to assess shoppers’ perceptions of the quality of service provided by the convenience shops and the supermarkets in Viet Nam. Specifically, this research is to find the pertinent answers to the following questions: 1.
What are the key factors of retail service quality (convenience shops and supermarkets)? 2. What do shoppers generally consider important while shopping in a retail store? 1.2 Research methodology and research scope The survey questionnaire is originally developed in English and then translated into Vietnamese. In-depth interviews are then conducted with five convenience shoppers for each area including supermarket/ convenience shop in order to modify the Vietnamese version of the questionnaire before the survey is implemented in mass. The next step is analyzing the collected data.
The data of this research is processed using SPSS software with three main stages. First, Cronbach‟s Alpha is used to test the reliability of the measurement scale. Then, the validity of the measurement scale will be checked by Exploratory Factor Analysis (EFA). Finally, simple regression and multiple regression are employed as the main method for investigating the relationships among factors in the research model.
Ho Chi Minh City has been chosen to conduct the survey for this study since it is one of the biggest cities in Vietnam and most of international brands centralize here. Moreover, Ho Chi Minh City is also one of the wealthiest cities in Vietnam, so people who live here will have higher chance to visit supermarkets and/ or convenience shops, which are usually quite often.3 Research contribution This research complements and adds to previous research by expanding the study of retail service quality to include supermarket and convenience shop with the comparison. Therefore, this 7 : add luanvanchat@agmail.com LUAN VAN CHAT LUONG download study is very important because it offers a scale to measure service quality that is suitable for supermarkets and convenience shops and which could be modified slightly to expand whole retail industry. Based on findings in the end of this research, we hope to provide practical contributions to the retail service quality industry, particularly to owner of supermarkets and/ or convenience shops who have the intention to develop their business, especially enter Ho Chi Minh City market.
However, it is essential for owners of supermarkets and/ or convenience shops to find out effective strategies that can maximize opportunities and minimize obstacles. This study with deep understanding of consumers’ intent to use supermarkets and/ or convenience shops can help their owners have a higher chance to be successful in Ho Chi Minh City market. In summary, the findings of this study would be useful for retail brand marketers who want to penetrate the business in Ho Chi Minh City and who have already developed in the market and want to maintain the loyalty of their customers.4 Research structure This study is organized into five chapters. It starts with the introduction chapter which presents an outline of this research.
This chapter includes background of the research and research objectives. Besides, the significance that this study contributes to management practice as well as scope of the research and methodology of data analysis are also mentioned in the first chapter. Chapter two reviews and synthesizes the theories in the literature of five concepts, including physical aspects, reliability, personal interaction, problem solving and policy. This chapter also describes research model and proposed hypotheses.
Chapter third introduces research methodology used to empirically test the research model. Chapter four presents the results of data analysis.