1 CHAPTER 1: INTRODUCTION The introduction chapter brings an interest to the subject of the study by starting with a discussion on the background information. The definition of the research problem and the purpose of the study are also presented. This chapter also presents the significance and scope of the study. Finally, the organization of the report is presented to give the reader an overview of the structure of the thesis. 1.1 Overview of the Grocery Industry Retail is the largest single industry in most countries throughout the world, with the grocery sector being most important in terms of value and volume (Burt and Sparks, 1994). The sale of groceries has traditionally been the venue of the traditional provision shop located in the neighbourhood. However, much to the dismay of traditional retailers, most of the grocery products can now be found at many places such as discount stores, supercentres, specialty grocers, warehouse clubs, convenience stores, Internet retailers and drug stores (Morganosky, 1997; Kim and Jin, 2001; Carpenter and Moore, 2006). In addition to grocery products, some of the retailers such as hypermarkets, supercentres, and discount stores also offer a wide variety of other product categories such as apparel, household goods, pharmaceuticals, cosmetics, home furnishing and sporting goods in the same place. This move offers the consumers the convenience of ―one-stop shopping‖ as they no longer need to shop at various places or stores for several products. Thus, the consumers
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1
CHAPTER 1: INTRODUCTION
The introduction chapter brings an interest to the subject of the study by
starting with a discussion on the background information. The definition of the
research problem and the purpose of the study are also presented. This
chapter also presents the significance and scope of the study. Finally, the
organization of the report is presented to give the reader an overview of the
structure of the thesis.
1.1 Overview of the Grocery Industry
Retail is the largest single industry in most countries throughout the world,
with the grocery sector being most important in terms of value and volume
(Burt and Sparks, 1994). The sale of groceries has traditionally been the
venue of the traditional provision shop located in the neighbourhood.
However, much to the dismay of traditional retailers, most of the grocery
products can now be found at many places such as discount stores,
the grocery industry in Malaysia. The market share of traditional stores (small
grocery) has dropped from 60.8 percent in 2002 to 43.7 percent in 2007.
However, a few studies (see Lim et. al, 2003; Nielsen Company, 2007) found
that the traditional retailers still have an advantage in rural areas and smaller
towns. They are losing their market share in larger towns and cities only. Due
to the rapid growth of the modern retail format, retailers need to react to the
changes in order to continue to survive in this competitive industry.
Although there are various types of retail formats that offer similar products, it
was determined that each type of retail format has different store attributes,
which can drive the store choice process for at least one major market
segment. For instance, hypermarkets and supercentres are well-known for
their low price and large assortment, while convenience stores, as the name
implies, are a convenience oriented store. Following that, it is very important
for grocery retailers to use a different strategy to differentiate from their
competitors.
Although consumers often show patronage to various stores, they do have a
primary connection to a ―main store‖ that captures the majority of their
purchases. Woodside and Trappey (1992) found that consumers decide their
primary store based on the attributes of the store. They found that consumers
could quickly name a store when asked what store comes to their mind for
specific attributes such as ―lowest price‖, or ―most convenient‖ to them. Thus,
it is important for the retailers to delve into the factors that will affect
consumers shopping behaviour.
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Store image attributes are important as they will affect consumers‘ behaviour
towards the store (Woodside and Trappey, 1992). Consumers will prefer to
shop at stores that have attributes that can satisfy their needs. For example,
busy people will prefer to shop at convenience stores, as this retail format is
known for its long operating hours such as open 24 hours per day. On the
other hand, those who prefer low price tend to shop more at hypermarkets as
this format is known for its low pricing. The consumers are more likely to shop
and buy at the store if they are satisfied with the store attributes. Hence, it is
important for the retailers to know which store attributes are important and
how it will affect the consumers‘ behaviour.
1.3 Research Objective
The Malaysian grocery sector has experienced dramatic changes in the last
few decades with the emergence of new retail formats such as hypermarkets,
large scale supermarkets, and convenience stores. As a result, it has affected
the way consumers shop as they have more choices to choose from. Thus, it
is important for the retailers to know the reasons why consumers choose to
shop at a particular store, and also the factors that will influence their
subsequent behaviour. The objective of this study is to investigate consumer
behaviour in the grocery industry. Specifically, this research aims to:
1. understand consumer grocery shopping pattern
2. examine the impact of store attributes on store choice
3. identify the factors that affect consumer behaviour towards the store
4. examine the relationship between store attributes, consumer
satisfaction towards the store and store loyalty
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1.4 Research Questions
This study attempts to answer the following questions:
1. Which retail format is shopped at most often by consumers?
2. Which store attributes are perceived as most important by consumers
when making their store choice decision?
3. What are the factors (store attributes) that affect consumers‘
satisfaction and loyalty behaviour?
1.5 Significance of the Study
There have been a significant amount of studies that examine the issues of
consumer shopping behaviour and retail marketing strategies to tackle the
intense competition in the present retail channel in the grocery industry.
However, most of the studies have been conducted in Western countries such
as the United States of America, United Kingdom and European countries.
Thus, it is crucial for the retailers to gain a better understanding of the grocery
consumers in Malaysia.
In light of the emergence of many new grocery formats, consumers now have
more choice to compare and decide where to shop for their groceries.
However, most previous studies focus on one or a limited perspective only.
For example, Farhangmehr et. al. (2000) examined the consumers perception
of hypermarkets and traditional retail stores in Portugal; Seiders and Tigerts
(2000) on the supercentres; Koo (2003) and Jin and Kim (2003) have
examined the discount retail environment in Korea. As such, this study will be
helpful in giving a better picture of the retail industry as it has focused on four
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main channels (hypermarket, supermarket, convenience store and traditional
stores) found in Malaysia.
In addition, this study highlights the importance of store attributes in the
retailing environment. Many researchers have identified that store attributes
play an important role in affecting consumer‘s store choice decision. Thus,
through the identification of the store attributes perceived by consumers,
retailers can establish better marketing strategies for their store.
1.6 Scope of the Study
The grocery sector is used in this study to measure consumer‘s behaviour in
the industry. This is because, as mentioned at the beginning of this chapter,
grocery is the most important sector in terms of volume and value in the
retailing industry. Based on Euromonitor‘s Retailing Report in Malaysia
(2008), four main retail formats (hypermarket, supermarket, convenience
store, and traditional grocery store) are selected to determine the preferred
grocery store format in Malaysia.
The study was conducted in the Klang Valley using non probability and
convenience sampling. The Klang Valley was chosen due to the number and
large variety of choice of formats available and also its highly dense
population (KPMG, 2006).
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In order to understand the factors that will drive consumers to revisit the store
again, store attributes have been chosen as the factor that will determine
consumer‘s loyalty towards the store.
1.7 Organization of the Report
This report consists of six chapters. It is organized as follows:
Chapter 1: The introduction chapter brings an interest to the subject of the
study by starting with a discussion on the background information. The
definition of the research problem and the purpose of the study are also
presented in this chapter. In addition, the significance and scope of the study
is also discussed. Finally, the disposition is presented to give the reader an
overview of the thesis.
Chapter 2: The chapter explains about the retailing industry. The chapter
starts with an overview of the retailing industry. The definition of various types
of retail channels are also presented here. It is then followed by a discussion
on the retail sector in Malaysia. Finally, the development of the grocery
market in Malaysia is also presented.
Chapter 3: This chapter will review the literature that is related to this study.
The chapter starts with the introduction about consumer behaviour in the
grocery industry. It is followed by store image, customer satisfaction and store
loyalty. Finally, the relationship of store image, customer satisfaction and
store loyalty is discussed.
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Chapter 4: This chapter outlines the methodology employed in the study. It
begins with a review of the research framework. Then, it provides the
hypotheses developed in this study. Thereafter, the design of the research
instrument and measurements instruments will be discussed. Finally, the data
analysis techniques used are also presented.
Chapter 5: This chapter presents the findings of the survey. It begins with a
description of the general characteristics of the respondents. This is followed
by an analysis on the shopping habits of the respondents. The results of the
validity test and reliability test are also discussed. It is followed by a test on
the hypotheses developed in the previous chapter. After that, the effect of
store attributes on consumer behaviour is also discussed. Finally, the
consumer preference structure of the retail channel is presented.
Chapter 6: The final chapter will provide the conclusion for this research. First,
an overview of the study will be provided. Thereafter, the summary of the
major findings, marketing implications, limitations of the study and further
suggestion are presented. Finally, the chapter ends with the concluding
remarks of the study.
1.8 Conclusion
This chapter discusses the introduction of the study, which includes the
research problem, purpose of the study, importance of the study, research
scope and the thesis organization. Following that, in Chapter 2, an overview
of the retailing industry will be provided.
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Figure 1.1: Organization of the Report
Chapter 1
Introduction
2.0 Introduction
2.1 Retailing 2.2 Retail Sector in Malaysia 2.3 Development of the Grocery Sector In
Malaysia 2.4 Conclusion
1.0 Introduction
1.1 Overview of the Grocery Industry 1.2 Research Problem 1.3 Research Objectives 1.4 Research Questions 1.5 Significance of the Study 1.6 Scope of the Study 1.7 Organization of the Report 1.8 Conclusion
Chapter 6
Conclusion & Implications
6.0 Introduction 6.1 Overview of the Study 6.2 Summary of the Research Result 6.3 Marketing Implication 6.4 Limitation of the Study 6.5 Suggestion for Future Research 6.6 Concluding Remarks
5.0 Introduction 5.1 Demographic Profile of Respondents 5.2 Consumers‘ Grocery Shopping Pattern 5.3 Validity Test 5.4 Reliability Test 5.5 Test of Hypothesis 5.6 Multiple Regression Analysis 5.7 Consumer‘s Preference Structure 5.8 Conclusion
Chapter 5
Data Analysis
4.0 Introduction 4.1 Research Framework 4.2 Hypotheses Development 4.3 Research Design 4.4 Measurement Instrument 4.5 Data Analysis Techniques 4.6 Conclusion
Chapter 4
Research
Methodology
3.0 Introduction 3.1 Consumer Behaviour in Grocery Shopping 3.2 Store Image 3.3 Store Attributes 3.4 Customer Satisfaction 3.5 Customer Loyalty 3.6 The Relationship of Store Image,
Customer Satisfaction and Store Loyalty 3.7 Conclusion
Chapter 3
Literature Review
Chapter 2
Retailing Industry
in Malaysia
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CHAPTER 2- RETAILING INDUSTRY IN MALAYSIA
The chapter explains about the retailing industry. The chapter starts with an
overview of the retail industry. The definition of various types of retail
channels are also presented here. It is then followed by a discussion on the
retail sector in Malaysia. Finally, the development of the grocery market in
Malaysia is also presented.
2.1 Retailing
Retailing refers to business activities that are involved in selling goods and
services to consumers for their personal, family and household consumption
only, and not used for business purposes (Miller and Layton, 2000). This
includes every sale to the final consumer, ranging from food to household
items to movie tickets. It can be large, sophisticated chains of specialized
stores, like Toys ―R‖ Us, to individual merchants like fruit sellers at the wet
market.
Retail trade has been categorized in many ways. Guy (1980) has classified
retail trade into three groups: (1) convenience goods, which includes
groceries and daily provisions, (2) shopping or comparison goods, which
refers to more expensive products that are bought at less regular intervals,
and (3) specialty goods, which are unique items that appeal to the higher
income level segment. Other scholars (see Lamb et al, 2004; Armstrong et al,
2005) have classified the retail establishment based on ownership, level of
service, product assortment, and price. Goldman and Hino (2005) have
divided the retail trade depending on size – large scale or small scale. The
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small scale retailers are also referred to as the traditional retail store where
they include the single propriety stores, wet market, and mini market. Whilst
the large scale retailers, which are also known as the modern retailers include
superstores, department stores, hypermarkets, and discount stores.
Traditionally, there were only various distinct types of retail store, with each
offering different product assortments, types of service, and price level,
according to its customers‘ shopping preferences. Thus, it was easy to
categorize them. However, in recent decades, retailers have experimented
with alternative formats that make it harder to classify them, as they are
offering similar product ranges. For instance, supermarkets are expanding
their non-food items, drugstores are becoming more like convenience stores,
and discounters are adding groceries. Nevertheless, many stores can still be
grouped into the following retail types.
A department store carries a wide variety of shopping and specialty goods,
including apparel, cosmetics, house wares, and electronics products. Some
departmental stores even attached a supermarket (Miller and Layton, 2000).
A superstore or hypermarket is a very large store that aims at meeting
consumers‘ total needs for routinely purchased food and non-food items. It
carries personal care products, alcoholic beverages and tobacco products,
stationary and sewing supplies, hardware items, garden products, some
clothing some leisure-time products and offers household services such as
dry cleaning, laundry and shoe repairs (Miller and Layton, 2000).
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A discount store is a retailer that competes on the basis of low price, high
turnover and high volume (Miller and Layton, 2000).
Supermarkets are large, low cost, low margin, high volume, self-service stores
that cater to serve the consumer‘s total needs for food and household
products (Miller and Layton, 2000).
Specialty stores are stores that carry narrow product lines with a deep
assortment within those lines. They specialize in a given type of merchandise.
Examples include children‘s clothing, candy, baked goods, gourmet coffee,
and organic foods (Miller and Layton, 2000).
Convenience stores are small stores that are located near residential areas,
open long hours seven days a week, and carry a limited line of high turnover
convenience products at slightly higher prices (Miller and Layton, 2000).
2.2 Retail Sector in Malaysia
The rapid expansion of the Malaysian economy over the last few decades,
combined with external and social influences has led to a boom in the retail
industry. Consequently, the retail industry in Malaysia is highly fragmented, as
there are a lot of retailers entering the competitive market each year.
Moreover, more and more international companies are aiming at having a
share in this industry by opening more outlets to strengthen their position in
the world.
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In Malaysia, retailing continues to be dominated by store based retailing, as
the concept of non-store retailing is far less established. The store based
retailing was reported to be worth about RM80 million in 2007, which is about
89% of the market share (Table 2.1). The non-store retailing includes vending,
catalogue shopping, Internet shopping and direct selling, which are less
established and less acceptable in Malaysia.
Table 2.1: Sales in Retailing by Sector: Value 2002-2007
were used. The items in this section originated from Koo (2003). Koo used
two different variables to measure store loyalty – consumer commitment and
revisit intention. However, this study has combined it as a single variable.
The last section was designed to collect the demographic information of the
respondents. Examples of the demographic variables measured include
gender, ethnicity, age, marital status, occupation, education level, income and
household size. The demographic variables were measured using the closed-
ended multiple choice format.
4.5 Data Analysis Techniques
Statistical analysis of the data collected from the survey was accomplished
using the statistical package for social sciences—SPSS version 15.0
software. Data was first entered into the software and was then screened to
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exclude any incomplete response or correct the errors found in the data file. A
summary of the data analysis used in this study is listed in Table 4.1.
Table 4.1: Summary of Types of Analysis Used for Questionnaire
Type of Analysis
Type of Statistics
Section of Questionnaire Objective of Analysis
Descriptive Frequency Analysis, mean and standard deviation
Section 1: Grocery shopping pattern Section 5: Demographics of the respondents
To understand the profile of the respondents and their shopping pattern
Normality Test
Kurtosis, skewness analysis and histogram chart
Section 2: Store attributes Section 3: Customer satisfaction Section 4: Store loyalty
To ensure that the data collected is normally distributed
Validity Test
Factor analysis
Section 2: Store attributes Section 3: Customer satisfaction Section 4: Store loyalty
To ensure that all the variables are not correlated to one another.
Reliability Test
Cronbach‘s alpha
Section 2: Store attributes Section 3: Customer satisfaction Section 4: Store loyalty
To ensure the scale of the measurement are reliable
Bivariate and multiple analysis
Pearson‘s correlation and multiple regression
Section 2: Store attributes Section 3: Customer satisfaction Section 4: Store loyalty
To understand the relationship between store attributes, customer satisfaction and store loyalty
One-way analysis of variance
ANOVA Section 1: Grocery shopping pattern Section 2: Store attributes
To compare the mean score of store attributes among the primary shoppers of different formats.
The normality test was performed at the beginning stage by using SPSS
software in order to determine whether the variables are normally distributed
and also to determine whether the parametric or non-parametric test could be
used in this study.
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Factor analysis and Cronbach‘s Alpha were conducted to ensure that all the
variables are valid and reliable. This is to ensure that the variables are not
correlated with one another and the scale of measurement is reliable.
Regression analysis was performed in order to test the relationships of the
dependent variables and independent variables. In this study, simple linear
regression and multiple linear regressions with stepwise method was used.
Pearson correlation was used to evaluate the linear relationship between two
variables. On the other hand, multiple linear regressions were used to explore
the relationship between one dependent variable and a number of
independent variables.
ANOVA was used to compare the mean score of store attributes among the
primary shoppers of different formats. This is to understand the factors that
attract the primary shoppers to shop at the particular retail format.
4.6 Conclusion
This chapter provides an overview of the research design, framework and
hypothesis developed for the study. An overview of the questionnaire has also
been discussed. This chapter also discusses the research instrument,
sampling procedure, data collection and data analysis used to conduct the
study.
In the following chapter, the findings of the research will be discussed. It also
identifies the significance of each of the hypotheses as stated in the chapter.
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CHAPTER 5 – DATA ANALYSIS
This chapter presents the findings of the survey. It begins with a description of
the general characteristics of the respondents. This is followed by an analysis
of the respondents shopping habits. The results of the validity and reliability
tests are also discussed, followed by a test on the hypotheses developed in
the previous chapter. After that, the effect of store attributes on consumer
behaviour is also discussed. Finally, the consumer preference structure of the
retail channel is also presented.
5.1 Demographic Profiles of Respondents
In the data collection process, 380 questionnaires were distributed to
acquaintances within the Klang Valley. However, only 343 questionnaires
were returned. This yielded a return rate of 90.3 percent. Out of which, 27 set
of questionnaires were rejected due to incomplete answers. As a result, the
final questionnaires analyzed consisted of 316 respondents, which yielded a
response rate of 83.2 percent.
Based on the data collected, a demographic profile of the respondents was
constructed. A completed profile of the respondents who participated in the
survey is presented in Table 5.1. Descriptive analysis was carried out in order
to understand the respondents‘ characteristics in number and percentage
form.
There were more females answering the questionnaire than males as 54.7 of
the respondents are female while 45.3 percent are male. In terms of ethnic
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group, 43.4 percent of the respondents are Malay, followed by 38.6 percent
Chinese, 16.1 percent Indian and 1.9 percent other races. From the figures, it
can be seen that participation among the three races is not distributed
according to the composition of the Malaysian population. This is because the
study adopted non probability and convenience sampling method. However,
the disparity of questionnaire distribution among the races is not significant for
the findings as the study is not aimed at any particular ethnic group or any
analysis based on ethnic groups in Malaysia.
Table 5.1: Demographics Profile of the Respondents
Frequency Percentage
Gender Male 143 45.3
Female 173 54.7
Total 316 100
Ethnic Group Malay 137 43.4
Chinese 122 38.6
Indian 51 16.1
Other 6 1.9
Total 316 100
Age (years) 20 and below 14 4.4
21 - 30 years 152 48.1
31 - 40 years 96 30.4
41 - 50 years 34 10.8
51 - 60 years 13 4.1
above 60 years 7 2.2
Total 316 100
Marital Status Single 167 52.8
Married 132 41.8
Divorced/widow 17 5.4
Total 316 100
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Table 5.1: Continued
Frequency Percentage
Highest Level of Education Secondary school 53 16.8
Diploma 51 16.1
Bachelor Degree 156 49.4
Post Graduate Degree 51 16.1
Others 5 1.6
Total 316 100
Occupation Professional 52 16.46
Manager 65 20.57
Executive 123 38.92
Clerical staff 34 10.76
Full time student 30 9.49
Currently not working/ Retiree 8 2.53
Others 4 1.27
Total 316 100
Monthly Income Below RM 2,000 80 25.3
RM 2,001 - RM 4,000 118 37.3
RM 4,001 - RM 6,000 71 22.5
RM 6,001 - RM 8,000 27 8.5
Above RM 8,000 20 6.3
Total 316 100
Size of Household 1 – 2 80 25.3
3 – 4 116 36.7
5 – 6 88 27.9
7 and above 32 10.1
Total 316 100
A high proportion of the respondents were within the age group of 21 to 30
years (48.1 percent). Slightly less than a third of the respondents (30.4
percent) were within the 31 to 40 years group. The remainder of the sample
came from the age group of 41 to 50 years (10.8 percent), below 21 years
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(4.4 percent), 51 to 60 years (4.1 percent) and those above 60 years (2.2
percent). In terms of marital status, the largest group fell into the single
category, forming 52.8 percent of the sample. This was followed by 41.8
percent married respondents, while 5.4 percent of respondents were divorced
or widowed.
The education level of the respondents shows that most the people have
education up to college or university. About 49.4 percent of the sample were
bachelor degree holders. Another 16.8 percent were diploma holders, 16.8
percent were secondary school holders, and 16.1 were post graduate holders.
The main reason for the high proportion of the degree holders in the sample
was probably due to the characteristics of urban population.
As most of the respondents have a high education level, it is not surprising
that the results also show that most of them held high positions in their office.
About 38.9 percent of the respondents have acquired an executive position,
while 20.6 percent of the sample were at managerial level. Professional and
clerical staff constituted 16.5 percent and 9.5 percent of the sample,
respectively. Another 2.5 percent of the respondents were retired or
unemployed at the time of survey.
Statistics on the monthly personal income of the respondents show that a
large proportion of the respondents have an income in the range of RM2,001
to RM4,000 (37.3 percent). About one-fourth (25.3 percent) of the
respondents indicated that they have a monthly income of less than RM2,000,
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while 22.5 percent reported figures in the range of RM4,001 to RM6,000.
Another 8.5 percent of the respondents said that they earned between
RM6,001 to RM8,000. The remaining 6.3 percent earn more than RM8,000
per month.
In terms of size of household, the largest group fell into the range of three to
four members in a family (36.7 percent). The second largest group were those
with five to six family members at 27.8 percent. This was followed by those
with less than 3 family members at 25.3 percent, while the remaining 10.1
percent have more than six family members.
5.2 Consumer’s Grocery Shopping Pattern
This section examines the grocery shopping pattern of the respondents.
Specifically, the following habit will be examined: the frequency of the
respondents shop for the groceries, the amount of time the respondents
spend during a visit, the proportion of the monthly expenditure for groceries
(See table 5.2). Besides that, it also determines the frequency of shopping at
the four different retail formats (See Table 5.3), and the respondent‘s
preference between the four retail formats (see Table 5.4).
With regards to the frequency of visiting a grocery store, the study found that
the majority of the respondents (52.8 percent) shopped 2 to 3 times per month
for groceries. This was followed by respondents who shop less than 2 times
per month (20.9 percent). The remaining respondents shopped at least 4 to 5
times per month (18.7 percent) or more than 6 times per month (7.6 percent).
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This finding shows that grocery shopping might eventually become a major
activity among Malaysians.
Table 5.2: Consumer’s Grocery Shopping Pattern
Frequency Percentage
How often do you shop for groceries for your household (per month)?
0-1 time 66 20.9
2-3 times 167 52.8
4-5 times 59 18.7
More than 6 times 24 7.6
Total 316 100
How much time you spend at the store each time?
Less than 30 minutes 46 14.6
30 – 60 minutes 169 53.5
60 – 90 minutes 79 25.0
More than 90 minutes 22 7.0
Total 316 100
How much money do you spend on groceries per month?
Less than RM 100 51 16.1
RM 101 – RM 200 82 26.0
RM 201 – RM 300 79 25.0
RM 301 – RM 400 44 13.9
RM 401 – RM 500 25 7.9
More than RM 500 35 11.1
Total 316 100
How do you usually go to the store?
Car 282 89.2
Walk 16 5.1
Public Transportation 18 5.7
Total 316 100
The study found that more than half of the respondents (53.5 percent) spent
about 30 to 60 minutes during the store visit. About one fourth (25.0 percent)
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of the respondents indicated that they spent about 60 to 90 minutes per visit.
Another 14.5 percent of the respondents said that they spent less than 30
minutes to conduct their grocery shopping. The remaining 7.0 percent of the
respondents indicated that they spent more than 90 minutes in the store each
time.
Concerning the monthly expenditure of the respondents examined, about 26
percent of the respondents indicated that they spent around RM101 to RM200
for groceries, while another 25 percent spent between RM201 to RM300 per
month. Nearly 16.1 percent of the respondents mentioned that they spend
less than RM100 per month for groceries. Another 13.9 percent of the
respondents indicated that the grocery expenditure was in the range of
RM301 to RM400 per month, while 11.1 percent of the sample spend more
than RM500 per month. The remaining 7.9 percent of the respondents spend
between RM401 and RM500 per month. This finding shows that Malaysian
consumers spend quite a significant proportion of their monthly expenditure
on groceries.
The study found that most of the respondents (89.2 percent) use private
transportation such as a car to conduct their grocery shopping. More than 10
percent of the respondents use other modes such as public transportation
(5.7 percent) or walking (5.1 percent). This finding indicates that most of the
respondents have private transportation and that it is more convenient for
them to use a car for their groceries.
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In relation to the frequency of shopping at each type of different retail format,
Table 5.3 indicates that most people have visited the four different types of
retail format before. This finding supports Woodside and Trappey‘s study in
1992, where consumers do not just depend on one single store for their
groceries. They will usually shop at different types of retail format to fulfil their
needs and wants.
Table 5.3: Frequency of shopping at the four different retail formats
How frequent do you shop for groceries at the following retail formats?
Frequency Hyper-market
Super- market
Convenience Store
Traditional Store
Always
Frequency 111 53 8 23
Percentage 35.1 16.8 2.5 7.3
Often
Frequency 106 108 48 49
Percentage 33.5 34.2 15.2 15.5
Occasionally
Frequency 75 107 124 85
Percentage 23.7 33.9 39.2 26.9
Rarely
Frequency 24 43 120 132
Percentage 7.6 13.6 38 41.8
Never
Frequency 0 5 16 27
Percentage 0 1.6 5.1 8.5
Table 5.3 shows that about two-thirds of respondents always or often shop for
groceries at hypermarkets, respectively at 35.1 percent and 33.5 percent.
Another 23.7 percent of the respondents shop at hypermarkets occasionally
and 7.65 percent of the respondents rarely shop at hypermarkets. None of the
respondents indicated that they have never shopped at a hypermarket before.
As for supermarkets, the majority of the respondents were found to shop often
(34.2 percent) in that retail format. Another 33.9 percent of the respondents
indicated that they shop occasionally in supermarkets. Only 16.8 percent of
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the respondents reported that they always shopped in supermarkets. About
13.6 percent of the respondents mentioned that they rarely shopped in
supermarkets, while the remaining 5.1 percent of respondents indicated that
they never shop in supermarkets.
In terms of convenience store, the survey found that the frequency of
shopping in that format is low. About 39.2 percent of the respondents
mentioned that they shop at convenience stores occasionally. Another 38
percent of the respondents mentioned that they rarely shop in convenience
stores, while 5.1 percent of the respondents reported that they never shop in
convenience stores. Only 15.2 percent of the respondents indicated that they
often shop in convenience stores, and the remaining 2.5 percent always shop
in that format.
As for traditional stores, the majority of the respondents were found to rarely
shop at the store (41.8 percent) and 8.5 percent never shop at traditional
stores. However, 26.9 percent of the respondents were found to shop
occasionally in traditional stores, while 15.5 percent of the respondents
reported to shop often in traditional stores. The remaining 7.3 percent of the
respondents indicated that they always shop in traditional stores.
The study also examines consumers‘ preference of store based on their
ranking (See Table 5.4). It was found that 61.1 percent of the respondents
rank hypermarkets as their most preferred format. This was followed by
supermarkets at 26.3 percent, traditional stores at 7.6 percent and
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convenience stores at 5.1 percent. A total of 47.8 percent of the respondents
rank supermarkets as their second most preferred format. It was not
surprising to find that 60.1 percent of the respondents rank traditional stores
as their least preferred format choice. As mentioned in a few researches,
traditional stores are losing their market share to the new retail format as they
are unable to compete with them in terms of price and product range.
Table 5.4: Retail Format preference ranking
Rank the format choice according to your preference (1 as your most preferred store, 4 as your least preferred store)
Ranking
Hyper- market
Super- market
Convenience Store
Traditional Store
1
Frequency 193 83 16 24
Percentage 61.1 26.3 5.1 7.6
2
Frequency 71 151 61 33
Percentage 22.5 47.8 19.3 10.4
3
Frequency 30 51 167 69
Percentage 9.5 16.1 52.8 21.8
4
Frequency 22 31 72 190
Percentage 7 9.8 22.8 60.1
The results of this finding show that more and more people choose to shop at
hypermarkets. It also determines that they prefer hypermarkets to the other
three retail formats. This finding supports the results found by Morgonasky
(1997), and Seiders and Tigert (2000), where hypermarkets pose a significant
threat to traditional grocery stores.
5.3 Validity Test
The validity test is carried out to ensure that the instrument is tapping the right
concept (Cavana et al, 2001). In other words, it is to confirm that the
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questions in the questionnaire are measuring the intended concept and not
something else. In most studies, factor analysis was used to reduce a large
number of related variables to a more manageable number. However, in this
study, factor analysis is used to avoid any inter-correlations among the
variables as the items in each of the variable are adopted from numerous
sources. A principal components factor analysis was performed on the total
set of 41 items.
Prior to performing factor analysis, the Kaiser-Mayor-Okin (KMO) measure of
sampling adequacy and Bartlett‘s test of Sphericity were used to determine
the suitability of the data for factor analysis. According to Tabachnick and
Fidell (1996), Bartlett‘s test of Sphericity should be significant (p<.05) in order
for the factor analysis to be considered appropriate, while the minimum value
for a good factor analysis is 0.6 for Kaiser-Mayor-Okin (KMO) index. In this
study, the KMO value is 0.867 and the Bartlett‘s test of Sphericity is significant
(p=.000), therefore it is appropriate to conduct factor analysis (See Table 5.5).
Table 5.5: KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .867
Bartlett's Test of Sphericity Approx. Chi-Square 6266.717 df 861 Sig. .000
Kaiser‘s criterion was used to determine the number of factors to retain for
further investigation. Using this rule, only factors with an eigenvalue of 1.0 or
more were retained (Pallent, 2001). In this study, only nine components
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recorded eigenvalues above 1. The nine components explain a total of 62.78
percent of the variance. However, after varimax rotation (which was able to
provide a clearer and easier manner to interpret the factor) was performed,
only eight components were retained (See Table 5.6). This is because out of
the three items loaded in component nine, two of the items have a higher
loading on other factors. Thus, this left only one item in component nine.
Therefore, the item ―Availability of Private Brand‖ in component nine was
excluded from further analysis. Some of the items have dual loadings on more
than one factor, however, only the one with the highest loading was taken into
consideration.
Table 5.6: Summary of Factor Analysis
Factor and Variables Factor
Loading
Factor 1(Product)
The availability of well-known brands 0.752
The store has a variety of product range 0.687
The availability of your favourite item 0.641
The availability of alternative item if your favourite item is not there 0.542
Factor 2 (Promotion)
The store always offers discount and promotion 0.775 The store advertises the promotion in local newspapers or mailers or flyers 0.766 The store always organizes special events (Japanese food fair, Organic Food Fair) 0.754
The store always conducts sampling activities 0.725
The store has a loyalty programme (Member Card) 0.684
Factor 3 (Store Atmosphere)
The store layout makes it easy for you to move around 0.827
The store layout makes it easy for you to find what you need 0.794
The store provides plenty of convenient parking 0.694
The store is clean 0.618
The shelf is not too high to pick up merchandise with hands 0.605
The merchandise display is very attractive 0.561
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Table 6.6: Continued
Factor and Variables Factor
Loading
Factor 4 (Location)
The store is located near to your work place or home 0.610
The store is located in residential area 0.728
The location of the store is easily accessible 0.696
The store is located near to other places which you visit often 0.690
Factor 5 (Price)
The store has overall lower prices than its competitors 0.802
The price is competitive 0.724
The store employing an "everyday low price" strategy 0.694
The price is reasonable for the value of the product 0.674
Factor 6 (Service)
The employees provide prompt services 0.843
The employees are helpful 0.826
The store insists on error-free sales transactions and records 0.803
The store has operation hours convenient to you 0.747
The store has a return or exchange policy 0.695
The store has fast check-out services 0.653
The store accepts most major credit cards 0.603
Factor 7 (Satisfaction)
The store does a good job of satisfying my needs 0.796
The store meets my expectation 0.760
I believe that using this store is a very satisfying experience 0.743
I am satisfied with my decision to shop at this store 0.704
I made a wise judgement to shop at this store 0.683
Factor 8 (Loyalty)
I will be very likely to shop at this store in the future 0.779
I will frequently shop at this store in the future 0.764
I intend to shop at this store again in the future 0.735
I plan to maintain my shopping at this store 0.704
Shopping in this store is my first choice or priority 0.665
5.4 Reliability Test
A reliability test is conducted to ensure that the instrument measures are
consistent and stable over time (Cavana et al., 2001). In other words, the
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reliability of the measure is without bias (error free) and, hence, ensures
consistent measurement across time and across the various items in the
instruments.
In this study, the reliability of the standardized scales was confirmed using
Cronbach‘s coefficient alpha. The higher the coefficients, the better the
measuring instruments. However, according to Pallant (2001), Cronbach's
alpha should be at least 0.70 to be considered as acceptable. Besides the
Cronbach‘s Alpha, it is also important to study Corrected Item-Total
Correlation in order to identify the degree to which each item correlates with
the total value (Pallant, 2001).
Table 5.7: Summary of Reliability Statistics
Variable Cronbach’s Alpha N of items
Product 0.761 4
Store Atmosphere 0.788 6
Location 0.749 4
Pricing 0.815 4
Services 0.887 7
Promotion 0.822 5
Satisfaction 0.882 6
Loyalty 0.860 5
In this study, all the Cronbach‘s alpha coefficients show a value higher than
0.07, except for the ―Product‖ variable, which only has an alpha value of 0.670
(See Table 5.7). However, after studying the Correlated Item-Total
Correlations, one of the items in the product ―The availability of private brand‖
was removed due to the low item-total correlations. This supports the finding
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in the validity test, as it was loaded alone in a different component. After
removing the item, the alpha value for ―product‖ became 0.761, which then
met the minimum acceptable requirement.
5.5 Test of Hypotheses
5.5.1 Relationship of store attributes, customer satisfaction and store
loyalty
Correlation analysis is used to examine the relationship between two
variables in a linear fashion (Pallet, 2001). This study used the Pearson
product-moment correlation coefficients to measure the relationship of the
store attributes (products, location, store atmosphere, promotion, price and
services), customer satisfaction and store loyalty. In terms of the strength of
the relationships between the two variables, Cohen (1988) has suggested
some guidelines to determine whether the relationship of the variables is
small, medium or large (as per Table 5.8).
Table 5.8: Strength of Relationship between Two Variables
Value of Pearson Correlation (r) Strength of the Relationship
r = .10 to .29 or r = -.10 to -.29 Small
r = .30 to .49 or r = -.30 to -.49 Medium
r = .50 to 1.0 or r = -.50 to -1.0 Large
The summary of the correlation and significance are indicated in Table 5.9.
The results show that all the items in hypothesis 1 are supported. It is shown
that various store attributes have a positive impact on store loyalty. The
strength of the relationship ranges from weak to medium. More specifically,
the strength of the relationships is in the following ranking, from the strongest
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to the weakest. Product (r = .483, p =.000), price (r = .385, p = .000), services
(r= .256, p = .000), location (r= .239, p = .000), promotion (r = .224, p = .000)
and physical facilities (r= .173, p = 002). This result is meaningful and
confirms the result of Nguyen et al (2007), and Koo (2003), where store
attributes have a positive impact on store loyalty. However, it contradicts
Bloemer and Ruyter (1998), who found that attributes of the stores does not
have a direct influence on store loyalty.
Table 5.9: Summary of Correlation Analysis
Variables Pearson Correlation Sig
Strength of the relationship
Store Attributes and Loyalty
Product and Loyalty 0.483** 0.000 Medium
Store atmosphere and Loyalty 0.173** 0.002 Weak
Location and Loyalty 0.239** 0.000 Weak
Price and Loyalty 0.385** 0.000 Medium
Services and Loyalty 0.256** 0.000 Weak
Promotion and Loyalty 0.224** 0.000 Weak
Store Attributes and Satisfaction Product and Satisfaction 0.423** 0.000 Medium
Store atmosphere and Satisfaction 0.214** 0.009 Weak
Location and Satisfaction 0.291** 0.000 Weak
Price and Satisfaction 0.413** 0.000 Medium
Services and Satisfaction 0.357** 0.000 Medium
Promotion and Satisfaction 0.284** 0.000 Weak
Satisfaction and Loyalty 0.583** 0.000 Strong
** Correlation is significant at the 0.01 level (2-tailed).
* Correlation is significant at the 0.05 level (2-tailed).
The results suggest that hypothesis 2 is supported. All the store images
measured in this study have a positive influence on customer satisfaction.
More specifically, product (r = .423, p =.000), price (r = .413 p = .000),
services (r= .357, p = .000), location (r= .291, p = .000), and promotion (r =
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.284, p = .000) and store atmosphere (r= .214, p = 009), are statistically
significant in affecting customer satisfaction towards the store. The
relationship of the attributes and satisfaction range from weak to medium, with
product having the strongest relationship with satisfaction, while physical
facilities has the weakest relationship with customer satisfaction. The results
are consistent with Westbrook (1981), Bleomer and Ruyter (1998), and
Doreen and Benjamin (2003), who suggested that store images have a direct
impact on satisfaction.
It is also shown that customer satisfaction has a significant strong positive
effect on store loyalty (r = .583, p = .000). The results imply that hypothesis 3
is supported. The result indicates that if customers are satisfied with the store,
they are more likely to become loyal customers. This supports previous
studies regarding the relationship between store satisfaction and store loyalty
(Bloemer and Ruyter, 1998; Grace and Cass, 2005), and also confirms the
theory that satisfaction is the key to forming customer loyalty. However, the
result contradicts Koo (2003), who found that customer satisfaction has an
insignificant effect on store loyalty.
In summary, all of the result supported the hypotheses.
Table 5.10: Summary of Result for Hypothesis
Hypothesis Status
H1: Store attributes have a significant impact on store loyalty
H1a: Products has a significant impact on store loyalty Supported
H1b: Store atmosphere has a significant impact on store loyalty Supported
H1c: Location has a significant impact on store loyalty Supported
H1d: Price has a significant impact on store loyalty Supported
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Table 5.10: Continued
Hypothesis Status
H1e: Services has a significant impact on store loyalty Supported
H1f: Promotion has a significant impact on store loyalty Supported
H2: Store attributes have a significant impact on store satisfaction
H2a: Products has a significant impact on store satisfaction Supported
H2b: Store atmosphere has a significant impact on store satisfaction Supported
H2c: Location has a significant impact on store satisfaction Supported
H2d: Price has a significant impact on store satisfaction Supported
H2e: Services has a significant impact on store satisfaction Supported
H2f: Promotion has a significant impact on store satisfaction Supported
H3: Customer satisfaction has a significant impact on store loyalty Supported
5.6 Multiple Regression Analysis
Multiple regression is used to explore the relationship of one dependent
variable and a number of independent variables. According to Pallant (2001),
multiple regression is able to provide the information about the model as a
whole (all subscales), and the relative contribution of each of the variables
that make up the model (individual subscales).
5.6.1 Store Attributes that Influence Customer Loyalty towards the Store
In this study, multiple regressions are used to examine the relative importance
of the store attributes (products, store atmosphere, location, price, promotion
and services) for making a prediction of store loyalty. From Table 5.11, it can
be seen that this model explains 54.0 percent of the variance of the store
loyalty. The result of the ANOVA test shows that this model reaches statistical
significance (Sig = .000, p<.0005).
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Table 5.11: Model summary for store loyalty
Model R R
Square
Adjusted R
Square
Std. Error of the
Estimate
1 .540(a) .292 .278 2.579
a Predictors: (Constant), Promotion, Atmosphere, Location, Price, Product, Services b Dependent Variable: Loyalty
a Predictors: (Constant), Promotion, Atmosphere, Location, Price, Product, Services b Dependent Variable: Loyalty Table 5.13 Coefficients of Store Attributes and Store Loyalty
a Predictors: (Constant), Promotion, Facilities, Location, Price, Services, Products b Dependent Variable: Satisfaction Table 5.16 Coefficients of Store attributes and customer satisfaction
Service is the fifth most important variables (β = .102, p<0.05) that will
influence consumer satisfaction level. This shows that the service provided by
the store is very important in influencing customer satisfaction.
As a conclusion from this finding, it was found that products, price, location,
store atmosphere and services will contribute to form customer satisfaction
towards the store. Thus, it is important for the retailers to use all five of the
variables to increase customers‘ satisfaction level.
5.7 Consumer Preference Structure
As discussed earlier, there are a variety of reasons why consumers visit a
grocery store. As suggested by previous researchers, store attributes such as
product, price, location, and services will influence their retail format choice
(Seiders and Tigert, 2000; Kim and Jin, 2001; Carpenter and Moore, 2006). In
this study, respondents that indicated a particular channel as their most
preferred channel were classified as the primary shoppers of that channel.
This approach was adopted from the study of Seiders and Tigert (2000),
where they define primary shopper as those people who shop most often in a
particular grocery store. Table 5.17 shows the attributes that the primary
shoppers perceive as important in determining their preference of the format
choice.
The top three store attributes among primary shoppers of hypermarkets
(n=193) are product, price and promotion. The result is not surprising as this
retail format is well known for its huge merchandise selection and is able to
73
provide competitive pricing. Besides that, most of the hypermarkets in
Malaysia also have a loyalty programme, and promotions to attract more
consumers to the store. By advertising in the newspaper, mailers or flyers, it
will help to create public awareness of the activities of the store, expose
consumers to the offerings of the store, prime them with knowledge of the
availability of merchandise that could cater for their future needs and increase
the likelihood of patronage.
Table 5.17: Mean Score and ranking of Store Attributes among Primary
Shopper by Channel
Hypermarket
(n=193) Supermarket
(n=83) Convenience Store (n=16)
Traditional Store (n=24)
Product 4.09 (1) 4.20 (1) 3.33 (5) 3.77 (2)
Store Atmosphere 3.74 (5) 3.66 (4) 3.67 (3) 3.58 (3)
Location 3.86 (4) 3.98 (2) 4.02 (1) 4.01 (1)
Price 4.02 (2) 3.93 (3) 3.77 (2) 3.57 (4)
Services 3.62 (6) 3.65 (5) 3.58 (4) 3.29 (6)
Promotion 3.90 (3) 3.65 (5) 3.22 (6) 3.32 (5)
Product, location and price are the top three store attributes among
respondents who indicated supermarket as their most preferred store (n= 83).
The result is similar to hypermarket as most supermarkets also offer a large
selection of products at competitive prices. Location also plays an important
part as most supermarkets are located near to the housing area or workplace.
The primary shopper of convenience stores indicated that location, price and
store atmosphere are the three most important attributes in determining their
preference. This is because convenience stores are usually located in places
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that are convenient and easily accessible. However, it is surprising to find that
convenience store shoppers indicate that price is one of the most important
factors, as most of the convenience stores tend to price products higher. This
might be due to the competition becoming more intense, with more
newcomers such as KK-Mart, Carrefour Express and 99 Speedmarts. Some
of the retailers started to position themselves at a lower price.
Those shoppers who mentioned that traditional stores are their most preferred
format indicated that location, product and store atmosphere will influence
their store choice. Price, service and promotion are ranked lowest by the
shoppers because traditional stores do not tend to compete on price and
conduct fewer promotions compared to hypermarkets and supermarkets.
These retailers tend to offer a reasonable product range for shoppers in the
neighbourhood area. Thus, in order for the traditional retailers to compete with
the modern retailers, it is important for them to use pricing, services, and
promotion as the tools to attract more consumers to the store.
Regardless of which retail channel, the most common attributes that
consumers perceive as important are product, location and price. This
indicates that it is important for the retailers to include the three attributes in
their marketing plan. Thus, it is not surprising to find that more and more
retailers are displaying a wider variety of products, or using ―everyday low
price‖ strategy to attract consumers to the store.
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5.8 Conclusion
Based on the results, six factors regarding store attributes, which include
products, promotion, store atmosphere, price, services and location, were
found to influence consumers‘ behaviour, such as customer satisfaction and
loyal patronage behaviour. Moreover, it was found that customer satisfaction
will have an impact on customer loyalty towards the store.
The research found that the consumers shopped in more than one format,
and the reasons for shopping in each format varies from one to another. From
the research, it can be concluded that hypermarkets are the most preferred
format choice among Malaysian consumers.
Chapter 6 will cover the summary and recommendations of this study.
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CHAPTER 6: CONCLUSION AND RECOMMENDATIONS
The final chapter will provide the conclusion for this research. First, an
overview of the study will be provided. Thereafter, the summary of the major
findings, marketing implications, limitations of the study, and suggestion for
further research are presented. Finally, the chapter ends with the concluding
remarks of the study.
6.1 Overview of the study
The study attempts to identify consumer behaviour in the grocery industry in
Malaysia. The emergence of new retail formats in the last few decades has
affected the way consumers shop as they now have more choices to decide
on. Thus, it is important for the retailers to understand the factors that will
affect consumers‘ behaviour.
Specifically, the study examined grocery retailing in Malaysia, evaluated
consumers‘ grocery shopping habits, and the impact of store attributes on
consumer behaviour was also investigated. In addition, the study
endeavoured to examine the relationship between store attributes, customer
satisfaction and store loyalty.
The data for the study was collected through a six page self-administered
questionnaire. The sample consisted of 316 respondents living in the Klang
Valley area. In general, respondents in this survey are dominated by female
(54.7 percent); aged between 21 to 30 years (48.1 percent); Malay (43.4
percent); and single (52.8 percent). The education level attained by the
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respondents is fairly high, with almost 82.3 percent having diploma and above
education level. In terms of occupation, the majority of the respondents are
executives (38.9 percent). More than 74 percent of the respondents have a
monthly income above RM2,000.
6.2 Summary of the research results
The study found that on average Malaysian shoppers shop two to three times
per month for groceries. In terms of the time spent during a store visit, the
study found that the majority of the shoppers spend at least 30 minutes in the
store per visit. When the pattern of monthly expenditure was examined, the
findings show that Malaysian consumers spend quite a significant proportion
of their monthly expenditure on groceries. About 50 percent of the
respondents indicated that they spend around RM101 to RM300 on groceries
every month.
In relation to the frequency of shopping at each type of different retail format,
the study found that Malaysians do not just depend on one single store for
their groceries. This confirms the finding of most researchers where shoppers
tend to shop in more than one retail format for grocery products. However,
hypermarkets were found to be the most preferred format among the
respondents. This was followed by supermarkets, traditional stores and
convenience stores. The study also found that some of the respondents do
not shop in supermarkets, traditional stores, or convenience stores.
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The study also investigated the factors that influence the behaviour of the
consumers towards the grocery store. The results show that products, price,
promotion, services, location and store atmosphere are the attributes that will
affect the customer satisfaction level and will be able to attract the consumers
to visit the store.
The study also provides a useful comparison of the relative importance of
store attributes. It was found that products, price and store atmosphere are
the three most important factors in determining customer loyalty. On the other
hand, all factors except promotion were found to play important roles in
determining customers‘ satisfaction level.
In terms of testing the relationship of satisfaction and loyalty, the study found
that re-patronage intention will increase when the customer satisfaction level
increases. Thus, it can be said that satisfaction is a necessary step in loyalty
formulation.
The study found that store attributes play an important role in influencing
consumer‘s preference for the four retail formats. It was found that consumers
tend to shop at different retail formats for diverse reasons. For example,
shoppers who prefer hypermarkets indicate that product and price are the two
most important attributes. For those respondents who prefer supermarkets,
they mentioned that product and location are the top two store attributes that
will affect their preference. On the other hand, convenience store shoppers
placed location and price as the two most important attributes in forming their
79
preference towards the store. Shoppers who prefer traditional stores indicated
that location, and product will influence their store choice preference.
In conclusion, the results show that all hypotheses are supported. The results
show that products, price, promotion, services, location and store atmosphere
are the attributes that affect customer satisfaction level and will attract
consumers to visit the store. It was also found that satisfied customers tend to
become loyal customers. Thus, there is a linkage between store attributes,
customer satisfaction and store loyalty.
6.3 Marketing Implications
The study suggests that grocery retailers can benefit from understanding the
consumers, and factors that influence their behaviour. The results of this
study have several important implications. First, the study attempted to
analyze grocery channels in Malaysian. It was found that hypermarkets are
the most popular and preferred channel. This suggests that hypermarkets
have a competitive advantage in the industry, and, thus, encourages investors
to invest in this channel by opening more outlets in Malaysia.
Second, the study also found that store attributes will influence consumer‘s
behaviour, in terms of their satisfaction and re-patronage intention. Six
attributes (price, promotion, location, product, services, and store
atmosphere) were found to have an impact on consumers‘ behaviour.
However, consumers weigh the attributes differently. Some of the attributes
are perceived as more important than others. Overall, products and price are
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the most important attributes that will contribute to forming customer
satisfaction and loyalty behaviour. Perhaps the retailers could capitalize on
this desire to offer a better merchandise assortment at competitive prices. But
small grocery retailers will not be able to compete with large or chain retailers
in terms of pricing and product assortment. Thus, it is important for the small
retailers to emphasize other attributes in order to survive in this competitive
market.
Third, the consumer preference structure suggests that there is a relationship
between the retail format and store attributes. The importance of attributes
perceived by consumers differs across retail formats. The attributes of the
store will help consumers to differentiate the store format. For example, the
study suggests that consumers shop in hypermarkets because of the wide
selection of merchandise and competitive pricing. On the other hand,
traditional grocery stores were selected by the primary shopper due to the
convenient location, which is usually within the neighbourhood area. Thus, the
retail store image should be based upon the priorities of the store‘s target
market. They must be able to differentiate clearly from others, in order to
attract the intended target market segment.
Therefore, careful consideration of attributes to build up the store image and
attract consumers is an imperative task for retailers. It is important for them to
understand why their business is affected and how they can maintain
consumer loyalty.
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6.4 Limitations of the study
The study faces some limitations, which are explained below:
i. This study was limited to consumers in the Klang Valley area only,
which may not be truly representative of the total market. This is
because, as mentioned earlier, traditional grocery stores are losing
their market share to the new emergents in large cities, but is still
strong in rural areas. Thus, consumers in the Klang Valley might have
a preference towards the new retail format compared to the traditional
grocery stores. The results might be different if other states or smaller
towns were included in this study.
ii. The study only focused on six factors (products, price, promotion,
services), to examine the impact of store attributes on customers
behaviours. There are still many other factors that can be taken into
consideration, such as consumer‘s attitude towards the store.
iii. The findings of this research are interpreted within a sample size of
300, which is considered small. A larger sample might produce
different results and different implications. A larger and diverse sample
is able to produce more generalized results.
Despite the above shortcomings, the findings of the research could provide
insights into the impact of store attributes towards consumer‘s re-patronage
intention.
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6.5 Suggestion for Further Research
There are many areas on which further research can be conducted to gain a
better understanding of consumer behaviour in the grocery market in
Malaysia. First, as this study is limited in location and sample size,
subsequent research should consider a larger and more diverse sample
drawn from every part of the country. This is because a geographically and
demographically diverse sample is important for the purpose of clear
generalizability.
Second, the impact of consumer demographics was not studied here. Many
previous studies have found that consumer demographics play an important
role in affecting consumer behaviour. It was found that consumer
demographics will affect their format choice and also perception of the
important of attributes. Thus, it would be useful to examine the relationship of
consumer demographics and store attributes or format choice. This will help
identify the profile of consumers who frequent specific formats and examine
store attributes as the driver of their format choice.
Lastly, it is also important to examine store loyalty from a different or broader
perspective. Although store attributes play an important role in affecting
consumer‘s behaviour, it is not the only key to store loyalty. Other factors such
as consumer‘s attitude towards the store, shopper‘s characteristics or
motivation may also become one of the important factors that influence
consumer behaviour.
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6.6 Concluding Remarks
Malaysia has experienced dramatic changes in the retailing industry in recent
decades, with the emergence of new retail formats such as hypermarkets,
supermarkets and convenience stores. As a result, it has affected the way
consumers shop as they have more choices to choose from. Thus, it is
important for the grocery retailers in Malaysia to understand the factors that
influence consumers‘ behaviour. The findings obtained from this study will be
able to help grocery retailers in designing their marketing strategy to tackle
the fierce competition in the present retail channels in the grocery industry.
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APPENDIX 1 QUESTIONNAIRE
UNIVERSITI MALAYA
FACULTY OF BUSINESS & ACCOUNTANCY
MASTER OF BUSINESS ADMINISTRATION
Research Title: The Impact of Store Attributes on Consumer Shopping
Behaviour: A study in the Grocery Industry
Dear Sir/Madam,
I am conducting a study on consumer grocery shopping behavior in Malaysia. This
reserach is conducted as a partial requirement for the completion of the Master of
Business Administration, University of Malaya.
I would appreciate if you could spend a few minutes (not more than 10 minutes) of
your time to answer the questions in the following pages. All information will be used
for academic purpose only and will be kept strictly private and confidential.
Your kind cooperation and participation in this survey is valued and highly
appreciated.
This research is conducted under the supervision of Dr. Yusniza Kamarulzaman.
Should you have any enquiries, please do not hesitate to contact me at 012-2081048
VALIDITY TEST – FACTOR ANALYSIS KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .867
Bartlett's Test of Sphericity Approx. Chi-Square 6266.717 df 861 Sig. .000
Communalities
Initial Extraction The store has a variety of product range 1.000 .673 The availability of well-known brands 1.000 .656 The availability of your favourite item 1.000 .650 The availability of alternative item if your favourite item is not there
1.000 .604
The availability of private brand (eg: Tesco brand, Giant brand)
1.000 .676
The store is clean 1.000 .459 The store layout make it easy for you to find what you need 1.000 .669 The store layout make it easy for you to move around 1.000 .728 The merchandise display is very attractive 1.000 .348 The store provides plenty of convenient parking 1.000 .544 the shelf is not too high to pick up merchandise with hands 1.000 .417 The store is located near to your work place or home 1.000 .689 The store is located in residential area 1.000 .610 The store is located near to other places which you visit often (eg: Shopping Mall, Cafes, Restaurants)
1.000 .626
The location of the store is easily accessible 1.000 .638 The store is employing "everyday low price" strategy 1.000 .637 The store has an overall lower prices than its competitors 1.000 .733 The price is reasonable for the value of the product 1.000 .612 The price is competitive 1.000 .651 The employees are helpful 1.000 .727 The employees provide prompt services 1.000 .770 The store insists on error-free sales transactions and records 1.000 .714 The store has return or exchange policy 1.000 .576 The store accept most major credit cards 1.000 .478 The store has operation hours convenient to you 1.000 .643 The store has many check-out counters 1.000 .536 The store always offer discount and promotion 1.000 .639 The store always conduct sampling activities 1.000 .618 The store has loyalty program (Member Card) 1.000 .560 The store advertise the promotion in local newspapers or mailers or flyers
1.000 .672
The store always organized special events (Japanense food fair, Organic Food Fair)
1.000 .606
The store meet my expectation 1.000 .683 The store does a good job of satifying my needs 1.000 .733 I believe that using this store is a very satisfying experience 1.000 .703 I am satisfied with my decision to shop at this store 1.000 .649 I made a wise judgement to shop at this store 1.000 .596 I made the right decision when I decided to shop at this store 1.000 .588
104
I plan to maintain my shopping at this store 1.000 .677 I will frequently shop at this store in the future 1.000 .701 I will very likely to shop at this store in the future 1.000 .705 Shopping in this store is my first choice or priority 1.000 .548 I intend to shop at this store again in the future 1.000 .623
Extraction Method: Principal Component Analysis.
Total Variance Explained
Component Initial Eigenvalues Extraction Sums of Squared
The employees provide prompt services .843 The employees are helpful .826
The store insists on error-free sales transactions and records .803 The store has operation hours convenient to you .747 The store has return or exchange policy .695 The store has many check-out counters .653 The store accept most major credit cards .603 The store does a good job of satifying my needs .796 The store meet my expectation .760 I believe that using this store is a very satisfying experience .743 I am satisfied with my decision to shop at this store .704 I made a wise judgement to shop at this store .683 I made the right decision when I decided to shop at this store .626 .320
I will very likely to shop at this store in the future .779 I will frequently shop at this store in the future .764
I intend to shop at this store again in the future .735 I plan to maintain my shopping at this store .333 .704
Shopping in this store is my first choice or priority .665 The store always offer discount and promotion .775 The store advertise the promotion in local newspapers or mailers or flyers
.766
The store always organized special events (Japanense food fair, Organic Food Fair)
.754
The store always conduct sampling activities .725 The store has loyalty program (Member Card) .684 The store layout make it easy for you to move around .827
107
The store layout make it easy for you to find what you need .794
The store provides plenty of convenient parking .694 The store is clean .618 the shelf is not too high to pick up merchandise with hands .605
The merchandise display is very attractive .561 The store has an overall lower prices than its competitors .802 The price is competitive .724 The store is employing "everyday low price" strategy .694 The price is reasonable for the value of the product .674 The store is located near to your work place or home .761 The store is located in residential area .728 The location of the store is easily accessible .696 The store is located near to other places which you visit often (eg: Shopping Mall, Cafes, Restaurants)
.690 .312
The availability of well-known brands .752
The store has a variety of product range .687 The availability of your favourite item .641 The availability of alternative item if your favourite item is not there .542 .375
The availability of private brand (eg: Tesco brand, Giant brand) .774
Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. a Rotation converged in 6 iterations.
108
RELIABILITY TEST
Scale: Product Case Processing Summary
N %
Cases Valid 316 100.0 Excluded(a) 0 .0 Total 316 100.0
a Listwise deletion based on all variables in the procedure. Reliability Statistics
Cronbach's Alpha N of Items
.670 5
Item Statistics
Mean Std. Deviation N
The store has a variety of product range 4.29 .742 316 The availability of well-known brands 3.89 .737 316
The availability of your favourite item 4.22 .690 316 The availability of alternative item if your favourite item is not there
3.83 .732 316
The availability of private brand (eg: Tesco brand, Giant brand)
2.92 .982 316
Item-Total Statistics
Scale Mean if
Item Deleted
Scale Variance
if Item Deleted
Corrected Item-Total Correlation
Cronbach's Alpha if
Item Deleted
The store has a variety of product range
14.85 4.576 .471 .599
The availability of well-known brands
15.26 4.445 .525 .576
The availability of your favourite item
14.93 4.531 .549 .570
The availability of alternative item if your favourite item is not there
15.32 4.471 .521 .578
The availability of private brand (eg: Tesco brand, Giant brand)
16.23 4.907 .172 .761
Scale Statistics
Mean Varianc
e Std.
Deviation N of
Items
19.15 6.620 2.573 5
109
Scale: Store Atmosphere Case Processing Summary
N %
Cases Valid 316 100.0 Excluded(a) 0 .0 Total 316 100.0
a Listwise deletion based on all variables in the procedure. Reliability Statistics
Cronbach's Alpha N of Items
.788 6
Item Statistics
Mean Std. Deviation N
The store is clean 3.79 .590 316 The store layout make it easy for you to find what you need
3.85 .610 316
The store layout make it easy for you to move around
3.78 .652 316
The merchandise display is very attractive
3.53 .603 316
The store provides plenty of convenient parking
3.79 .707 316
the shelf is not too high to pick up merchandise with hands
3.46 .639 316
Item-Total Statistics
Scale Mean if Item
Deleted
Scale Variance
if Item Deleted
Corrected Item-Total Correlation
Cronbach's Alpha if
Item Deleted
The store is clean 18.42 5.388 .477 .770 The store layout make it easy for you to find what you need
18.36 4.918 .647 .730
The store layout make it easy for you to move around
18.44 4.666 .692 .716
The merchandise display is very attractive
18.69 5.473 .426 .781
The store provides plenty of convenient parking
18.42 4.816 .555 .752
the shelf is not too high to pick up merchandise with hands
18.76 5.321 .445 .778
Scale Statistics
Mean Variance Std. Deviation N of Items
22.22 7.041 2.653 6
110
Scale: Location Case Processing Summary
N %
Cases Valid 316 100.0 Excluded(a) 0 .0 Total 316 100.0
a Listwise deletion based on all variables in the procedure. Reliability Statistics
Cronbach's Alpha N of Items
.749 4
Item Statistics
Mean Std. Deviation N
The store is located near to your work place or home
4.09 .698 316
The store is located in residential area 3.73 .727 316 The store is located near to other places which you visit often (eg: Shopping Mall, Cafes, Restaurants)
3.71 .669 316
The location of the store is easily accessible 4.10 .710 316
Item-Total Statistics
Scale Mean if
Item Deleted
Scale Variance
if Item Deleted
Corrected Item-Total Correlation
Cronbach's Alpha if
Item Deleted
The store is located near to your work place or home
11.54 2.624 .609 .654
The store is located in residential area
11.90 2.641 .558 .683
The store is located near to other places which you visit often (eg: Shopping Mall, Cafes, Restaurants)
11.92 3.015 .442 .744
The location of the store is easily accessible
11.53 2.663 .570 .676
Scale Statistics
Mean Variance Std.
Deviation N of Items
15.63 4.488 2.118 4
111
Scale: Price Case Processing Summary
N %
Cases Valid 316 100.0 Excluded(a) 0 .0 Total 316 100.0
a Listwise deletion based on all variables in the procedure. Reliability Statistics
Cronbach's Alpha N of Items
.815 4
Item Statistics
Mean Std. Deviation N
The store is employing "everyday low price" strategy
3.86 .812 316
The store has an overall lower prices than its competitors
3.95 .791 316
The price is reasonable for the value of the product
4.02 .745 316
The price is competitive 3.97 .727 316
Item-Total Statistics
Scale Mean if
Item Deleted
Scale Variance
if Item Deleted
Corrected Item-Total Correlation
Cronbach's Alpha if
Item Deleted
The store is employing "everyday low price" strategy
11.93 3.608 .592 .789
The store has an overall lower prices than its competitors
11.84 3.384 .716 .727
The price is reasonable for the value of the product
11.78 3.762 .615 .776
The price is competitive 11.83 3.808 .620 .775
Scale Statistics
Mean Variance Std.
Deviation N of Items
15.79 6.096 2.469 4
112
Scale: Services Case Processing Summary
N %
Cases Valid 316 100.0 Excluded(a) 0 .0 Total 316 100.0
a Listwise deletion based on all variables in the procedure. Reliability Statistics
Cronbach's Alpha N of Items
.887 7
Item Statistics
Mean Std. Deviation N
The employees are helpful 3.61 .693 316 The employees provide prompt services 3.74 .715 316
The store insists on error-free sales transactions and records
3.78 .765 316
The store has return or exchange policy 3.56 .768 316 The store accept most major credit cards 3.66 .792 316 The store has operation hours convenient to you
3.92 .688 316
The store has many check-out counters 3.83 .742 316
Item-Total Statistics
Scale Mean if
Item Deleted
Scale Variance
if Item Deleted
Corrected Item-Total Correlation
Cronbach's Alpha if Item
Deleted
The employees are helpful 22.48 11.965 .730 .865 The employees provide prompt services
22.35 11.658 .773 .860
The store insists on error-free sales transactions and records
22.31 11.486 .747 .862
The store has return or exchange policy
22.53 12.028 .625 .878
The store accept most major credit cards
22.44 12.177 .568 .886
The store has operation hours convenient to you
22.17 12.110 .702 .869
The store has many check-out counters
22.27 12.113 .635 .876
Scale Statistics
Mean Variance Std.
Deviation N of
Items
26.09 15.944 3.993 7
113
Scale: Promotion Case Processing Summary
N %
Cases Valid 316 100.0 Excluded(a) 0 .0 Total 316 100.0
a Listwise deletion based on all variables in the procedure. Reliability Statistics
Cronbach's Alpha N of Items
.822 5
Item Statistics
Mean Std. Deviation N
The store always offer discount and promotion
4.11 .637 316
The store always conduct sampling activities
3.61 .826 316
The store has loyalty program (Member Card)
3.79 .879 316
The store advertise the promotion in local newspapers or mailers or flyers
3.70 .789 316
The store always organized special events (Japanense food fair, Organic Food Fair)
3.56 .891 316
Item-Total Statistics
Scale Mean if
Item Deleted
Scale Variance
if Item Deleted
Corrected Item-Total Correlation
Cronbach's Alpha if Item
Deleted
The store always offer discount and promotion
14.67 7.016 .639 .788
The store always conduct sampling activities
15.17 6.299 .627 .784
The store has loyalty program (Member Card)
14.99 6.279 .574 .802
The store advertise the promotion in local newspapers or mailers or flyers
15.08 6.352 .655 .776
The store always organized special events (Japanense food fair, Organic Food Fair)
15.22 6.073 .618 .788
Scale Statistics
Mean Variance Std.
Deviation N of
Items
18.78 9.581 3.095 5
114
Scale: Satisfaction Case Processing Summary
N %
Cases Valid 316 100.0 Excluded(a) 0 .0 Total 316 100.0
a Listwise deletion based on all variables in the procedure. Reliability Statistics
Cronbach's Alpha
N of Items
.882 6
Item Statistics
Mean Std. Deviation N
The store meet my expectation 3.80 .766 316 The store does a good job of satisfying my needs
3.77 .747 316
I believe that using this store is a very satisfying experience
3.71 .724 316
I am satisfied with my decision to shop at this store
3.72 .707 316
I made a wise judgement to shop at this store
3.70 .723 316
I made the right decision when I decided to shop at this store
3.73 .727 316
Item-Total Statistics
Scale Mean if
Item Deleted
Scale Variance
if Item Deleted
Corrected Item-Total Correlation
Cronbach's Alpha if Item
Deleted
The store meet my expectation 18.63 8.526 .678 .864 The store does a good job of satisfying my needs
18.66 8.462 .721 .857
I believe that using this store is a very satisfying experience
18.72 8.489 .743 .853
I am satisfied with my decision to shop at this store
18.71 8.773 .687 .862
I made a wise judgement to shop at this store
18.73 8.738 .677 .864
I made the right decision when I decided to shop at this store
18.70 8.833 .645 .869
Scale Statistics
Mean Variance Std.
Deviation N of
Items
22.43 12.150 3.486 6
115
Scale: Loyalty Case Processing Summary
N %
Cases Valid 316 100.0 Excluded(a) 0 .0 Total 316 100.0
a Listwise deletion based on all variables in the procedure. Reliability Statistics
Cronbach's Alpha N of Items
.860 5
Item Statistics
Mean Std. Deviation N
I plan to maintain my shopping at this store 3.73 .818 316 I will frequently shop at this store in the future
3.66 .744 316
I will very likely to shop at this store in the future
3.69 .713 316
Shopping in this store is my first choice or priority
3.52 .758 316
I intend to shop at this store again in the future
3.75 .754 316
Item-Total Statistics
Scale Mean if
Item Deleted
Scale Variance
if Item Deleted
Corrected Item-Total Correlation
Cronbach's Alpha if
Item Deleted
I plan to maintain my shopping at this store
14.62 5.779 .705 .825
I will frequently shop at this store in the future
14.68 5.988 .735 .817
I will very likely to shop at this store in the future
14.66 6.180 .714 .823
Shopping in this store is my first choice or priority
14.83 6.390 .588 .854
I intend to shop at this store again in the future
The store is clean 1st Most preferred 193 3.82 .604 .043 3.74 3.91 2 5
123
2nd most preferred 71 3.76 .643 .076 3.61 3.91 2 5 3rd most preferred 30 3.77 .430 .079 3.61 3.93 3 4 Least preferred 22 3.68 .477 .102 3.47 3.89 3 4 Total 316 3.79 .590 .033 3.73 3.86 2 5 The store layout make it easy for you to find what you need
2nd most preferred 71 3.90 .636 .075 3.75 4.05 2 5 3rd most preferred 30 3.63 .669 .122 3.38 3.88 2 5 Least preferred 22 3.73 .550 .117 3.48 3.97 3 5 Total 316 3.85 .610 .034 3.79 3.92 2 5 The store layout make it easy for you to move around
Least preferred 22 4.23 .685 .146 3.92 4.53 3 5 Total 316 4.09 .698 .039 4.01 4.17 2 5 The store is located in residential area 1st Most preferred 193 3.69 .746 .054 3.59 3.80 2 5 2nd most preferred 71 3.75 .691 .082 3.58 3.91 2 5 3rd most preferred 30 3.97 .615 .112 3.74 4.20 2 5 Least preferred 22 3.64 .790 .168 3.29 3.99 2 5 Total 316 3.73 .727 .041 3.65 3.81 2 5 The store is located near to other places which you visit often (eg: Shopping Mall, Cafes, Restaurants)