Completed Thesis- Akmal Syalwani

A STUDY ON THE IMPACT OF STORE ATMOSPHERIC ATTRIBUTES ON

CUSTOMERS EXPERIENCES AND THEIR BEHAVIORAL INTENTION AT SIME

DARBY AUTO BAVARIA SDN BHD, GLENMARIE, SHAH ALAM

AKMAL SYALWANI BINTI IDRIS

2010132513

BACHELOR OF BUSINESS ADMINISTRATION

WITH HONOURS (RETAIL MANAGEMENT)

FACULTY OF BUSINESS MANAGEMENT

UNIVERSITI TEKNOLOGI MARA

SHAH ALAM

DECEMBER 2013

A STUDY ON THE IMPACT OF STORE ATMOSPHERIC ATTRIBUTES ON

CUSTOMERS EXPERIENCES AND THEIR BEHAVIORAL INTENTION AT SIME

DARBY AUTO BAVARIA SDN BHD, GLENMARIE, SHAH ALAM


2010132513

Submitted in Partial Fulfillment of the

Requirement for the

Bachelor of Business Administration with Honours (Retail Management)



SHAH ALAM

ii

DECEMBER 2013

DECLARATION OF ORIGINAL WORK

BACHELOR OF BUSINESS ADMINISTRATION

WITH HONOURS (RETAIL MANAGEMENT)



"DECLARATION OF ORIGINAL WORK"

I, AKMAL SYALWANI BINTI IDRIS, (I/C Number: 911026105140)

Hereby, declare that:

This work has not previously been accepted in substance for any degree, locally or

overseas, and is not being concurrently submitted for this degree or any other degrees.

This project-paper is the result of my independent work and investigation, except where

otherwise stated.

All verbatim extracts have been distinguished by quotation marks and sources of my

information have been specifically acknowledged.

Signature: _________________________ Date: ______________________

iii

LETTER OF SUBMISSION

Date of Submission: December 2013

The Programme Coordinator,

Bachelor of Business Administration (Hons) Retail Management

Faculty of Business Management

Universiti Teknologi MARA

40450 Shah Alam

Selangor.

Dear Sir/Madam,

SUBMISSION OF PROJECT PAPER

Attached is the project paper titled A STUDY ON THE IMPACT OF STORE ATMOSPHERIC

ATTRIBUTES ON CUSTOMERS EXPERIENCES AND THEIR BEHAVIORAL

INTENTION AT SIME DARBY AUTO BAVARIA SDN BHD, GLENMARIE, SHAH

ALAM to fulfill the requirement as needed by the Faculty of Business Management, MARA

University of Technology.

Thank you

Your sincerely


2010132513

Bachelor of Business Administration (Hons) Retail Management

iv

ACKNOWLEDGEMENT

All praise due to Allah SWT, the Lord of the world that makes it possible for me to

complete this project paper. Blessing and salutation also be on Prophet of Allah SWT,

Muhammad SAW. I would like to take this opportunity to express my gratitude and appreciation

to the following individuals whose gave their guidance, advice and contribution in preparing this

research paper.

.

First of all, I would like to express my gratefulness and appreciation to my advisor, Dr.

Lennora Putit for her guidance, encouragement and advices throughout the process of

completing this project paper. Without her, this paper work cannot be complete successfully.

Word of appreciation also goes to my supervisor of practical training, Mr Mohd Sykhed Fadly

Bin Mat Husin, the Business Operation & Distribution Executive at Auto Bavaria Glenmarie and

all the staffs Auto Bavaria Glenmarie for their cooperation and tolerance.

Very special thanks to my beloved parents, Encik Idris Bin Ramli and Puan Maznah Binti

Yahya for their constant love and moral supports throughout my years of study. I also would like

to thanks to my beloved friends that always supports and gave encouragement to complete this

study. I also like to thank to all respondents of this study which this study would not have been

successful. Last but not least, my thanks to all who are involved direct and indirectly in the

process of completing this study.

Thank you.

v

TABLE OF CONTENTS

Page

TITLE PAGE.................................................................................................................................. i

DECLARATION OF ORIGINAL WORK....................................................................................ii

LETTER OF SUBMISSION..........................................................................................................iii

ACKNOWLEDGEMENT..............................................................................................................iv

TABLE OF CONTENT...................................................................................................................v

LIST OF FIGURES.........................................................................................................................x

LIST OF TABLES ........ xi

LIST OF ABREVIATIONS ... xiii

LIST OF APPENDICES xv

ABSTRACT .. xvi

CHAPTER 1 INTRODUCTION

1.0 Background of study .......................................................................1

1.1 Background of company .................................................................5

1.1.1 About Auto Bavaria ........................................................5

1.1.2 Auto Bavaria - Product & Service ..............................6

1.2 Problem Statement...........................................................................7

1.3 Research Questions..........................................................................9

1.4 Research Objectives.........................................................................9

1.5 Hypothesis of Study...................................................................... 10

1.6 Theoretical Framework................................................................. 10

vi

1.7 Significant of Studies 11

1.7.1 Auto Bavaria 12

1.7.2 Auto Dealership Industry..13

1.7.3 Customers .................13

1.8 Scope of Study ..........................................................................14

1.8.1 Gap of Knowledge.............................................................14

1.9 Limitations of Study......................................................................15

1.9.1 Respondents.......................................................................15

1.9.2 Sampling Location.............................................................15

1.9.3 Secondary Sources............................................................16

1.10 Definition of Terms.......................................................................18

1.10.1 Lighting .............................................................18

1.10.2 Background Music ............................................................18

1.10.3 Color .........................................................................18

1.10.4 Visual Merchandising .......18

1.10.5 Customer Experience ................................................19

1.10.6 Customer Behavioral Intention .19

CHAPTER 2 LITERATURE REVIEW

2.0 Introduction...............................................................................................20

2.1 Review of literature....................................................................................20

2.1.1 Store Atmosphere..............................................................20

2.1.2 Lighting .............................................................21

2.1.3 Background Music ............................................................23

2.1.4 Color .................................................................24

2.1.5 Visual Merchandising .......25

2.1.6 Customer Experience ... 26

vii

2.1.7 Customer Behavioral Intention..........................................27

CHAPTER 3 METHODOLOGY

3.0 Introduction............................................................................................... 29

3.0.1 Research Design ... 29

3.0.2 Quantitative Design ..... 29

3.1 Data Collection Method.... 30

3.1.1 Primary Data..... 30

3.1.2 Secondary Data..... 30

3.2 Sampling Design... 31

3.2.1 Target Population.. 31

3.2.2 Sampling Frame and Sampling Location.. 31

3.2.3 Sampling Elements....... 32

3.2.4 Sampling Technique..... 32

3.2.5 Sampling Size... 33

3.3 Research Instrument.............................................................................................. 33

3.3.1 Questionnaire Design........ 34

3.4 Construct Measurements....... 35

3.4.1 Scale Definitions....... 35

3.4.2 Sources of Measurements. 36

3.4.3 The survey instruments ....... 37

3.5 Getting the data for analysis..... 39

3.6 Data Analysis.... 40

viii

3.6.1 Descriptive Analysis. 40

3.6.2 Scale Measurements...... 41

3.6.2.1 Reliability Test.. 41

3.6.2.2 Exploratory Factor Analysis .... 42

3.6.3 Inferential Analysis... 42

3.6.3.1 Pearson Correlation Analysis.... 43

3.6.4 Multiple Regression Analysis... 43

CHAPTER 4 DATA ANALYSIS

4.1 Preamble .... 45

4.2 Demographic Profile .. 45

4.3 General Information ... 52

4.4 Exploratory Factor Analysis .. 56

4.5 Reliability Test ....... 60

4.6 The Central Tendencies Measurement of Construct .. 61

4.7 Correlation Matrix ..... 67

4.8 Multiple Regression Analysis 72

4.9 Multiple Regression Equation .... 76

CHAPTER 5 CONCLUSION AND RECOMMENDATION

5.0 Preamble .... 78

5.1 Discussions 78

5.1.1 Lighting 78

5.1.2 Background Music ... 79

ix

5.1.3 Color .... 79

5.1.4 Visual Merchandising .. 80

5.1.5 Customer Experience & Behavioral Intention

& the Best Atmospheric Factors .... 80

5.2 Conclusions 81

5.2.1 Lighting 82

5.2.2 Background Music... 83

5.2.3 Color 84


5.2.5 Customer Experience ... 85

5.2.6 Customer Behavioral Intention .... 86

5.3 Implication of Study .. 86

5.4 Recommendations for Sime Darby Auto Bavaria Sdn Bhd ... 88

5.4.1 Lighting .... 89

5.4.2 Background Music.... 90

5.4.3 Color 91


5.5 Recommendations for Future Research . 93

REFERENCES ..96

APPENDICES ............ 99

x

LIST OF FIGURES

Page

Figure 1.1: The effect of design factors on store image and consumers expectation of

merchandise quality by Jungmi Oh 2

Figure 1.2: The relationship between the store atmospheric cues and the effect on consumer by

Ishwar Kumar ......3

Figure 1.3: The Mehrabian-Russell model on the effect of environmental stimuli on emotional

state and customer behavior ... 4

Figure 1.4: The theoretical framework of relationship between the store atmospherics attributes,

experience perceived by the customer and their behavioral intention ..... 11

Figure 4.1: Percentage of Respondents based on Gender.... 45

Figure 4.2: Percentage of Respondents based on Age......46

Figure 4.3: Percentage of Respondents based on Nationality ......47

Figure 4.4: Percentage of Respondents based on Race ....... 47

Figure 4.5: Percentage of Respondents based on Highest Academic Qualification ... 48

Figure 4.6: Percentage of Respondents based on Employment Status ... 49

Figure 4.7: The Percentage of the Respondents First Product Purchase ....... 52

Figure 4.8: The Percentage of the Respondents Second Product Purchase ....... 53

Figure 4.9: The Percentage of the customers rating whether Auto Bavaria needs atmosphere

changes or not? .... 54

Figure 4.10: The Percentage of the medium that respondent knows Auto Bavaria (1) .. 54

Figure 4.11: The Percentage of the medium that respondent knows Auto Bavaria (2) .. 55

xi

LIST OF TABLES

Page

Table 3.1: Sources of Measurement..... 36

Table 3.2: The Survey Instruments ..... 37

Table 3.3: The Rule of Thumb for Cronbachs Alpha Coefficient Value 41

Table 4.1: Summary of Demographic Profile ..... 50

Table 4.2: KMO and Bartletts Test .... 56

Table 4.3: Total Variance Explained ... 57

Table 4.4: Rotated Component Matrix .... 58

Table 4.5: Summary of Reliability Analysis ... 60

Table 4.6: Summary of Central Tendency for Lighting ...... 61

Table 4.7: Summary of Central Tendency for Background Music ..... 62

Table 4.8: Summary of Central Tendency for Color .......... 63

Table 4.9: Summary of Central Tendency for Visual Merchandising ............ 64

Table 4.10: Summary of Central Tendency for Customer Experience ... 65

Table 4.11: Summary of Central Tendency for Customer Behavioral Intention ............ 66

Table 4.12: The Correlations between the Store Atmospheric Attributes and the Customers

Experiences .. 67

Table 4.13: Correlation between Customers Experiences and their Behavioral Intention ........ 68

Table 4.14: The Correlation between the Customers Experiences and the Behavioral Intention

(Store Atmosphere helps me to make to make a decision) .. 69

xii


(The store atmosphere makes me comfort to stay longer in the store) .... 69


(The atmospheric factors in this store are successful in putting trust in me) ... 70


(I would like to recommend other peoples to come and buy product/services from this store)... 71


(I would like to purchase again in the future) ...... 71

Table 4.19: Multiple Regression Analysis; Model Summary (First Model) ... 72

Table 4.20: Multiple Regression Analysis; ANOVA (First Model) ... 72

Table 4.21: Multiple Regression Analysis; Coefficients (First Model) ...... 73

Table 4.22: Multiple Regression Analysis; Model Summary (Second Model) .. 74

Table 4.23: Multiple Regression Analysis; ANOVA (Second Model) ....... 75

Table 4.24: Multiple Regression Analysis; Coefficients (Second Model) .. 75

Table 4.25: Summary of hypotheses result for store atmospheric attributes and customer

experience (First Model) .. 76

Table 4.26: Summary of hypothesis result for customer experience and the customer behavioral

intention (Second Model) .... 76

xiii

LIST OF ABBREVIATIONS

ANOVA Analysis of Variance

BM Background Music

L Lighting

C Colour

VM Visual Merchandising

CBI Customer Behavioral Intention

BI Behavioral Intention

CE Customer Experience

DV or Y Dependent Variable

IV or X Independent Variable

H Hypothesis

r Correlation Coefficient

R2 Coefficient of Determination

B Beta

Std. Error/ SE Standard Error

Sig. Significant

SPSS Statistical Package for Social Science

S.O.R Stimulus Organism Response

BMW Bayerische Motoren Werke

xiv

R & D Research and Development

LED Light Emitting Diode

ACCA Association of Chartered Certified accountants

IT Information Technology

PHD The Doctor of Philosophy

BPS BMW Premium Selection

LPGA Ladies Professional Golf Association

KMO Kaiser Meyer Olkin

xv

LIST OF APPENDICES

Page

Appendix 1.0 Questionnaires....... 1

Appendix 2.0 SPSS Data Analysis .. 6

A. Frequency Distribution

B. Reliability Test

C. Central Tendencies Measurement of Construct

D. Exploratory Factor Analysis

Appendix 3.0 Pictures.................................................................................................................. 31

xvi

ABSTRACT

The purpose of this study is to investigate the relationship between the store atmosphere factors,

customer experiences and behavioural intention at Auto Bavaria, Glenmarie. It also aims to

examine the influence and effect of having good and interesting store atmosphere towards

customer experiences and then will resulting to a positive behavioural intention. There are four

contributing factors of store atmosphere are being identified, which are lighting, background

music, colour and visual merchandising which is also the independent variables in this research,

while the experience perceived by the customer known as the mediating variable and the

customer behavioural intention as a dependent variables. Each of the store atmosphere attributes

was tested to determine and measure the relationship with customer experience and their

behavioural intention. Besides that, this study also wants to concentrate on the customers

perception and evaluation toward store atmosphere in Auto Bavaria, Glenmarie. Different SPSS

analyses such as reliability test, factor analysis, correlation and regression are carried in order to

interpret the customers response towards the atmospheric factors. The questionnaires were filled

by the respondents who already purchase products and also customer who come to Auto

Bavarias showroom and intend to buy cars, motorcycles, parts or accessories at Auto Bavaria.

For this quantitative research, a total of 170 respondents participated in the survey. The

participating respondents represented a return rate of 92% after distribute the questionnaire

directly to the respondents face to face, by email and mail.

Key words: Store atmospheric attributes, Customer experiences, Behavioural Intention, Auto

Bavaria

1

CHAPTER 1: INTRODUCTION

First of all, in Chapter One, researcher briefly explain the broad scope of this research which

includes the background of study, description of the company, problem statement, research

questions, research objectives, hypothesis of the study, theoretical framework, significant of

study, scope of study and limitation of study.

1.0 Background of Study

For retailers and store managers, shopping is the art of persuasion. Though there are many

attributes that can influence how and what the consumers will buy. However, visual cues such

as lighting, background music, color and visual merchandising being the strongest and most

persuasive factors compared to the other attributes (Bohl, 2011).

In 1973, Kotler has introduced the concept of store atmosphere, that is, the effort to design a

physical store environment that provides specific emotional effects to the customers that

encourages customer behavior. The buying process in a retail atmosphere is triggered when the

customer recognize that they put high expectation towards a store (Bohl, 2011).

Along with the trends toward retail innovation and evolution, retailers and store managers now

interested in how shoppers get experience while they come to the store. It has long been

recognized that consumers respond not only based on the product or service quality itself but

they also take much attention on the store environment. It is because; besides product and

services, the atmosphere of a store also one of the influential factors in the purchase experience

(Kotler, 1973). In fact, Turley & Milliman (2000) believed that store atmosphere contributes to

a business success or failure.

Store atmosphere encompass the attributes that aims to strengthen the store environment with

the combination of different cues such as lighting, color, background music, and scent. A study

found that 87% of Hungarian store managers take attention on retail styles, colors, and size of

the store as important part of tactical marketing (Jozsa et al,1999).

2

Kotler (1973), found that the earlier meaning for store atmosphere is like a purchase

environments was designed to produce specific emotional effects towards the customer and

then the purchase probability. Although increasing the sales and profits become the priority

objective and missions for most of the retail stores, the store managers have been realized that

the level of customers experiences and perceptions while having their visit in the store also

become the prime objectives to them. Thus, the retailer especially in the automotive dealership

industry wants to make the customer to stay longer in the store, so that customer can explore

the ideas and make decision to purchase more products or service since they already attracted

to the store atmosphere (dAstous, 2000).

In figure 1.1, based on Jungmi (2007), stimulus in the first box identified as independent

variables that used to create store atmosphere. The researcher put the measurement of design

factors, storefront design and information display as the main focus in this study. In this

framework, the independent and dependent variables are connected through the mediating

variables which are the consumers perception towards the store images, safety, convenience,

and entertainment. While the dependent variables is the response of the individuals expression

and the study concentrate on the consumers expectation towards the merchandise quality.

Figure 1.1: The effects of stimulus (design factors & information display) on store image and

consumers expectation towards the merchandise quality

Based on Ishwar Kumar (2010), retail atmospherics as shown in Figure 1.2 consisting of

selected atmospheric cues such as lighting that can be discuss about the bright or dim lighting,

background music whether it slow, ballads, classical or familiar music, attractive window

3

dressing and layouts, unique architectural design, freshness and nice fragrance, appropriate

temperature to build a cozy and comfortable environment, match and trendy color coordination,

captivating and memorable logo, an ideal type of good and merchandise crowd that can bring

behavioral effect to the current and future consumers (Smith and Burns, 1996).

The entire retail environment that includes the design of store brands can develop their own

brand messages and consumer experiences throughout the shopping endeavor. The retail

environment is harmoniously designed in order to communicate brand personality and the store

image. In order to create positive customer perceptions, the retailer can do some innovation

project for the store atmosphere and by doing that, the store will provide silent communication

with the customers about the retailer's brand value, each element of the retail environment also

need to be transformed so that it is differentiated from the other retailers. On the other hand,

retailer also can make it more standardized and thus tend to contribute the consumers' purchase

decision (Bohl, 2011).

Figure 1.2: The relationship between the store atmospheric cues and the effect on consumer

However, according to Baker (1987), he has identified those environmental cues in a store

which are ambient factors (temperature, humidity, background music, scent and cleanliness),

design factors (colour, decor, texture, style, pattern, layout, accessories and signage) and social

factors which is the influence of human presence in the store area. Based on Baker (1987)

study, the ambient factors such as background music and scent did not motivate the customer

4

purchase decisions, but it is important to simply meet the customer expectations and

experience.

Figure 1.3: The Mehrabian - Russell model on the effect of environmental stimuli on emotional

state and customer behaviour

Based on the above figure, it can be known as the model of Mehrabian - Russel which is an

approach of Stimulus-Organism-Response (S.O.R) model. There are two focus studies on

environmental psychology which is the effect of physical stimuli on individuals emotion and

the effect of physical stimuli on the individuals behaviors (Mehrabian & Russell, 1974).

Researcher found that, this model can be applied as valuable study to store environments and

atmosphere. In this research, the researcher also wants to adapt the Mehrabian - Russell model

into the retail scope in order to find the relation between store atmosphere and customers

experience.

Besides that, the framework shows that a particular atmosphere can cause certain emotional

response in an individual especially for customer in a retail sector. In other words, because of

certain atmosphere, it can cause an individual to approach or avoid the environment whether it

greater or in lesser degree (Billings, 1990).

In summary, atmosphere enhancement in a retail store is very essential since the customer will

observe the surrounding store area and it automatically can influence the customers experience

and perceptions. Besides, a business is impossible to hide their actual store atmosphere from

the customer to feel and see by their own.

5

1.1 Background of Company

1.1.1 Auto Bavaria

Auto Bavaria is the largest auto retail and service organization of BMW, MINI Cooper

and Motorrad (Motorcycle, Scooter & Superbike) in Malaysia. This is one of the

famous brands of Sime Darby Motors. Establish in 1988; Auto Bavarias organization

comprises of fully trained technicians and employees and has a wide range of parts and

accessories together with a comprehensive range of equipment that only an authorized

BMW dealer can provide. In order to give a good performance whether among the staff

or the customer, Auto Bavaria use centralized online system at all Auto Bavaria

branches, so it helps the employees to work more flexible and easily know the

customers service and product history with more efficiently and effectively.

Over the years, Auto Bavaria has successfully built BMW into one of the most desirable

luxury automotive brands in the country. Today, Auto Bavarias nationwide network

infrastructure comprises five branches, namely Glenmarie, Sungai Besi, Kuala Lumpur,

Penang and Johor Bahru. Auto Bavaria Glenmarie and Penang also houses the BMW

Motorrad and MINI Cooper showroom. In addition, our BMW Premium Selection

centre is in Glenmarie and Kuala Lumpur. Auto Bavaria has the competitive advantage

among the others competitors dealer in Malaysia such as Ingress, Quill, Pendragon,

Wearness Autohous, Regas and Tian Siang. It is because Auto Bavaria contributes

majority of shares in BMW Malaysia and also already being in the markets for 25 years.

Every Auto Bavaria branch is staffed with passionate professionals dedicated to

providing world class sales and aftersales service that beyond the customers

expectations. In benchmarking Auto Bavaria against the best BMW dealers in the

world, they make customer satisfaction as the top priority at Auto Bavaria. They record

possibly the highest man hours in training annually in the local automotive industry to

keep their staff on top of the latest innovations and technologies and constantly review

processes to improve efficiency. At Auto Bavaria, they are committed to making the

customers BMW experience extend beyond their purchase.

6

1.1.2 Products and services

Auto Bavaria products includes BMW cars (1 series, 3 series, 4 series, 5 series, 6 series,

7 series, x series, z4, m series, and hybrid cars) BMW Bikes and also known as

Motorrad (Sport, Competition, Tour, Roadster, Enduro, and Urban Mobility), MINI

Cooper (MINI S, MINI Coupe, MINI Cabrio, MINI Clubman, MINI Countryman,

MINI Paceman, MINI John Cooper, MINI Bayswater, and MINI Baker Street).

Besides providing new car from the factory, Auto Bavaria also offer used car for the

customer. This package is known as BMW Premium Selection (BPS) since 2008. Even

the customer owned used car from the BMW products especially at Auto Bavaria, they

will get full advantage of buying this type of car same with the customer who buy a new

car. It is because, Auto Bavaria only offer recent BMW models with low mileage and

complete service history will be considered. To make the cut, all vehicles then undergo

a thorough car services includes systems, mechanisms and safety components. Used car

prices with the new car security and warranty, which is the promise from Auto Bavaria.

In addition, the customer also can enhance their lifestyle through Auto Bavaria

Approved Body Shop and also buy BMW parts, accessories and gifts. Through Auto

Bavaria Body Shop, they provide top quality collision repair, painting solutions,

consultation and many other service for the customers. The customer also can enjoy the

exclusive parts and accessories design for their BMW and MINI Cooper. Auto Bavaria

only offers the original BMW accessories that undergo stringent quality and safety test

to fit seamlessly to the customers vehicles.

On the other hand, Auto Bavaria offers the customer opportunity to trade in their old

BMW car to a new one. Based on the terms and technical appraisals, Auto Bavaria will

be able to provide the customer with a fair trade in price for the customers to own a new

car.

In short, whether the customer are looking to buy or trade in, rest assured that Auto

Bavarias team of experts will personally help the customer browse for a car to suit their

7

finance and lifestyle. The customers trust and confidence in Auto Bavarias team

become the first priority and also committed in helping the customer enjoy the sheer

driving pleasure with BMW.

1.2 Problem Statement

In this globalization era, many companies found that, the store atmosphere plays

important roles in a store. Besides, it becomes a critical issue since the customer being

more alert, sensitive and also knowledgeable because of the exposure of the information

and news. From the previous studies, there are a lot of issues can be highlight in this

research such as the lighting problems, the incompatibility of stores colour

combination, the choice of background music are not appropriate, and the visual

merchandising arrangement are not suitable (Zeynep & Nilgun, 2011).

Nowadays, there are too much competition among the automotive dealership industry in

Malaysia whether by locally or internationally. Thus, those store manager need to take

an active part to make a different and creative ideas to be idealize in their respective

store atmosphere (Zakuan, 2009). According to Zeynep & Nilgun (2011), the store

manager can try to create attractive store atmosphere by using mix and matching

method from different store atmosphere factors. It means that, the manager can apply

different combination of various stimuli (colour, light, smell, background music and

visual).

Besides that, Auto Bavaria also competes with other BMW Malaysia car dealer such as

Ingress, Quill, Wearness Autohous, Regas and so on. The competition between the

BMW (Malaysia) car dealers mainly based on service pattern and quality, customers

experiences and expectation. Even though they sell the same product as Auto Bavaria,

being different in terms of store atmosphere compared to the other dealer is also can be

one of the strategies to give fascinate experience to the customer whenever they come to

the store (Nell,2013).

Good store atmospheres are important to give positive impact on customers who come

to Auto Bavaria. According Kotler (1973), the atmosphere of a place is more

8

influential than the product itself in the purchase decision. When a store features a

panoramic atmosphere plus with beautiful decoration, design, colour, lighting, and also

having convenient background music, it will create a different experience to the

customer (Banat et al, 2012). Today, we can see that, many store manager especially in

the automotive sector compete each other in order to accentuate a dynamic store

atmosphere. Some companies take the risk to invest a lot of money in their store

atmosphere enhancement activities for the sake of giving a good customer experience

(Kent, 2007).

On the other hand, in this case, Auto Bavaria offer luxury types of products and

services. So, the expectations from the customers are eventually high (Lamb, 2012). By

providing an appealing store atmosphere, it can make Auto Bavaria different from the

other car dealer. Actually, when the customer already put high expectations, the

company must alert on this issues. Auto Bavaria must show an exclusive and elegant

theme in the store since they are offering luxurious brand and products (Gutierrez,

2006).

So, with a convincing atmosphere, customer start to put confident and trust towards the

companys abilities and thus inclined and willing to spend more money to purchase the

companys products or services (Han, 2011). Therefore, in this research, there are a lot

of question can be roll out in order to maintain the exclusivity such as what are the key

factors that can influence Auto Bavarias store atmospheres? Does Auto Bavaria

manage to provide different impact on their customers, especially in terms of their

experiences during their visit in this store? Does Auto Bavaria know how customer

evaluates their store atmosphere? Does Auto Bavaria need any improvement regarding

to maintain or enhance their current store atmospheres? and what are the different

between Auto Bavaria and the other car dealer in term of store atmosphere?

In order to avoid being lag by other competitors, Auto Bavaria need to do something or

doing research on this topic. The best ways to collect the information are by letting the

customers evaluate the level of store atmosphere performance (Han et al, 2011).

9

1.3 Research Questions

In this study, there are few questions have been generate to answer the following

questions about the factors that can influence the store atmosphere and the effect on the

customer experience and behavioral intention. The research study will be guided by the

following research question for the investigations as follows:

What is the relationship between the store atmospheric attributes (lighting,

background music, color, visual merchandising) and the customers experience

in Auto Bavaria?

Which atmospheric factors that Auto Bavaria performs the best based on the

customers evaluation?

What is the relationship between the experience perceived by the customer at

Auto Bavaria and their behavioural intention?

1.4 Research Objectives

This study is undertaken to investigate the relationship between the store atmosphere

factors and its impact on customer experience and their purchase decision. It will focus

on the relationship of the four (4) independent variables of atmospheric factors which

are store lighting, background music, colour, and visual merchandising, customers

experience as the mediating variables and the identified dependent variable; customers

behavioural intention (Levy et al, 2009).

The objectives of the study are:

To determine the relationship between the store atmospheric attributes (lighting,

background music, color, visual merchandising) used in Auto Bavaria and the

customer experiences throughout their visit in this store.

To know the relationship between customers experience and their behavioural

intention at Auto Bavaria.

To identify which atmospheric factors that Auto Bavaria has performed the best

based on the customers evaluation from the questionnaire.

10

1.5 Hypotheses of the Study

This study will test the following hypotheses:-

H1: There is a significant relationship between store lighting, and customer experience

in Auto Bavaria, Glenmarie.

H2: There is a significant relationship between background music and customer

experiences in Auto Bavaria, Glenmarie.

H3: There is a significant relationship between colors and customer experiences in Auto

Bavaria, Glenmarie.

H4: There is a significant relationship between store visual merchandising and customer

experiences in Auto Bavaria, Glenmarie.

H5: There is a significant relationship between the customers experience and their

behavioral intention at Auto Bavaria, Glenmarie.

1.6 Theoretical Framework

A theoretical framework consists of concepts, variables, definitions, and existing

theories that are used by researcher for particular study. According to Dr Norzaidi

(2013), the selection of variables in a study must have the characteristics that can be

measured and it is important especially when creating and designing a questionnaire.

Theoretical framework must demonstrate an understanding of theories and concepts that

are relevant to the topic of research paper.

Theoretical framework is not something that can be found readily in a literature.

Researcher must review course readings and pertinent literature such as journals and

articles in order to search related theories and analytic models that are relevant to the

store atmospheres topic. Selection of a theory should depend on its appropriateness,

ease of application, and the explanation itself (Trochim, 2006).

11

Figure 1.4

The theoretical framework of relationship between the store atmospheric attributes, experience

perceived by the customer and their behavioral intention at Auto Bavaria

The framework above shows proposed framework to serve as foundation of this study.

It is modified from the Gajanayake,S & Surangi, (2011) on the research under the title

of The Impact of Selected Visual Merchandising Techniques on Patronage Intentions

and also based on adaptation of Thang and Tan (2003) S-O-R Model theory. Purpose of

this study is to examine the how the independent variables; lighting, color, background

music and visual merchandising of a store will bring impact to mediating variables,

customers experience and the dependent variables, customer behavioral intention when

they visit Auto Bavaria, Glenmarie.

1.7 Significance of Study

This study demonstrates how store atmosphere factors affect the customers experience

and behavioral intention when they visit to Auto Bavaria in Glenmarie, Shah Alam.

12

Therefore, it will give lots of benefits and advantages to several people and also several

parties such as:

1.7.1 Auto Bavaria

Due to the challenges of competitive markets, all retailers and managers try to build up

a meaningful shopping experience (Baker et al., 1992) in order to enchant and retain

customers as well as beat all the automotive competitors. Many researchers have

realized the significant impact of store atmosphere on customer experience and also

their behavioral intention (Baker et al., 2002; Bitner, 1992; Hoffman & Turley, 2002;

Mattila & Wirtz, 2001; Russell & Mehrabian, 1976).

Auto Bavaria is fiercely competes with many large car dealer/retailer in Malaysia.

There are also issues when there are many competitors all over Malaysia that offer the

same products and services such as Ingress Auto, Quill, Pendragon, Regas, Wearness

Autohous, Tian Siang and so on. Besides that, Auto Bavaria common competitors that

also offer the luxury type of brand such as Mercedes, Audi, and Volkswagen. Do not

forget the trend of Asian car production countries such as Japan and Korea that

produces a lot of great and quality car like Honda, Toyota, Hyundai, Suzuki and

Mitsubishi. Those car manufacturers from the east countries have been success to bring

big impact on the automotive industry (Zakuan, 2009).

A creative and compatible store atmosphere will help Auto Bavaria to create their own

store values and then automatically can attract the customer eyes and mind during their

stay in the store. A thorough study, follow with the store innovation also can turn Auto

Bavaria as the best automotive store in Malaysia.

In fact, with the attractive store atmosphere, it will give different customers experience

which will contribute to increase the sales and profits of the store (Rhee et al, 2012).

According to the previous studies, a pleasant store atmosphere can prolong the time

consumers spend in the store, increasing the likelihood that the consumer will find

something they needs, as well as increasing impulse buying (Tendai et al, 2009). So, it

13

will guide Auto Bavaria to improve the store atmosphere in order to gain satisfied

customers experience and also profits as well.

1.7.2 Auto Dealership (Automotive) Industry

Not only for the customers and Auto Bavaria itself, these researches also bring a

significant to the automotive industry out there. With the presence of this study, other

automotive companies can take it as reference for their companys research and

development activities (R&D). Since the literatures about this topic are only few of

them, it really can help those automotive industries to make analysis of store

atmosphere as a secondary data.

Besides that, by looking the research analysis and description, other companies also can

make this research as a source to make store atmosphere improvements, enhance the

store appearance, and know how it bring impact to the customer experiences through

the customer evaluation and know what are the customer want exactly (Kumar et al,

2010).

In addition, by conducting this research, we can know that the development of the

automotive industry by observing the demanding from the customer, the products and

brands innovation, the competitiveness between the automotive companies and so forth

(Zakuan, 2009).

1.7.3 Customers

When it comes to customer, it is indeed that they will be happy and feels comfortable

with the appealing store atmosphere (Turley & Milliman, 2000). Especially when

having a good store atmosphere, it can help the customer to make a right decision with

calm and relax mind and also having a good time to think at a comfortable sofa.

According to Turley and Milliman (2000), surrounding with a good lighting, which not

too bright and also not gloomy can create a nice atmosphere and also effect the

14

customers feeling as well. Besides that, compatible background music also helps the

customer to relax while selecting their dream car and enjoy their purchase and service.

Moreover, a nice color combination with the choice of elegance color, and of course not

a colorful store can bring the mood of exclusivity among the customers. Then, the

companies can tell message and stories through their dynamic visual merchandising in

the store and thus, from having all the combination of store atmosphere factors can

create a perfect store environment. So, it directly will give a great impact to the

customer who visit Auto Bavaria and give them some different experience which is like

entering the world of class.

1.8 Scope of Study

The scope of the study is basically to identify the store atmosphere factors which are

lighting, background music, color, and visual merchandising towards customer

experience and behavioral intention at Auto Bavaria. There were 170 questionnaires to

be distributed to the customers at Auto Bavaria at Glenmarie, Shah Alam who visited

and made purchase in the luxury store.

1.8.1 Gap of knowledge

To relate all the possible contribute factors of store atmosphere (lighting, background

music, colour and visual merchandising) in one single setting to investigate their

influences on the customer experiences and also from the customers experience to the

behavioral intention, which demonstrate the significant gap of knowledge.

In order to reduce the gap, there were four (4) identified hypotheses that will evaluate

the influence of store atmosphere factors toward the customer experience and their

behavioral intention. The first hypothesis is whether lighting is significant or no

significant with customers experiences. Second is whether background music is

significant or no significant with customers experiences while thirdly is whether color

in the store is significant or no significant with customer perceived experience and then

fourth hypothesis is whether there are relationship between store visual merchandising

and customer experience and last but not least the fifth hypothesis which is the second

15

model is whether customer experience has a significant relationship with behavioral

intention or not.

1.9 Limitation of Study

1.9.1 Respondents

Large samples tend to generate better result and minimize the probability errors

(Osborne, Jason, & Anna, 2004). In this study, questionnaire survey is conducted based

on 170 respondents which are limited and unable to produce a reliable result. The

potential that the respondents not return and return but send defective questionnaires are

high. Furthermore, the researcher select only 170 respondents due to the limited budget

as a full time student and time constraint since the period to finish up this research are

only 5 months.

Besides that, some respondents might misunderstand those questions and did not follow

the instruction that will in turn affect the results of study. By using five-point Likert-

type scale for the questionnaire, respondents may confuse and not be able to express

their additional comments and opinions for this study. Moreover, the potential that the

respondents did not read the questionnaire properly are high since the researcher

provides a lot of questions for the respondents to answer.

1.9.2 Sampling Location

In this study, sampling location is a limitation to get a respond from the respondents.

The sampling location for the survey is made at Auto Bavaria which is the headquarter

that located at Glenmarie, Shah Alam. Auto Bavaria Glenmarie was chosen as the

sampling location because the Glenmarie is the biggest branch compared to the other

four branches. Therefore, the branch is the representative of all Auto Bavaria. In despite

of that, it may affect the result since respondents may have different perceptions and

opinions due to other different branches they visited such as Auto Bavaria Sungai Besi,

Auto Bavaria Kuala Lumpur, Auto Bavaria Johor Bahru and Auto Bavaria Penang.

16

Furthermore, there is a possibility of a cultural and lifestyle bias playing a role in the

outcome of the study.

1.9.3 Secondary Sources

Limited information sources and databases can be searched through for this topic of the

study. Moreover, some journals and articles may require payment. Due to limited

budget, researcher was unable to access those journals or articles that need to be

subscribe. In fact, there were only few local researches conducted the research that are

applicable to our study. Most of the journals and articles we referred to were based on

the topic in foreign countries. Thus, the findings of some journals or articles may not

applicable in this research. Thus, researcher had to find more journals to combine and

support for validity of the study (Labaree, 2013)

Zeynep & Nilgun (2011) noted that most of the studies only focused on one store

atmospheric stimulus or doing it as general research instead of examine few and

specific factors together at one time. Therefore, those literature reviews may not be

appropriate and slightly different for this research since it mostly discussed different

type of store itself.

Recently, this topic which is the study of store atmosphere seems to be quite popular

among researchers and retailers from different sectors and countries. For example, Sang

Lin Han, (2005) focus on the Korean retail market, Tsepo Peter, (2009) have research

on convenience store, Choong Rong Han, (2011) a study about the clothing store,

Katelijn Quartier, (2008) a research about food retailing, Wan Asyila, (2013) have study

a research about the MPH Bookstore, and Han Shen Chen, (2010), a study of chain

store supermarkets.

However, there are only few and limit researches that focus on the automotive

dealership industry. So, it is become the researcher limitation because different types of

stores must provide different combination of various factors of store atmosphere to

support the overall business of those stores. Since the auto dealership industry was been

17

not specifically focus in previous research, so in this research, the study will use the

relevant store atmosphere factors based on the automotive industry to interpret its effect

on experiences and also the behavioral intention. Therefore, it would be more accurate

to predict the factors that can give influence on store atmospheres which automatically

affects the customer experiences and behavioral intention.

In fact, some literature review for this study is limited especially on the color and visual

merchandising factors. Many researchers only concentrated their study on the areas of

background music and lighting. Limited source for these two factors which are colors

and visual merchandising make it difficult for researcher to have a detail investigation

and also have a constraint to make comparisons between the current study and the

previous one. Although many studies mentioned background music and lighting as one

of the variables to examine, those researchers seldom linked these factors to experience

and behavioral intention. There were not many researches and latest study regarding

customer experience. In despite of that, background music, lighting, colors, and visual

merchandising will be added as important elements in store atmosphere factors for the

industry and relate with experience and customer behavioral intention.

On top of that, this study had been done based on Malaysias automotive retailing

industry. From the previous studies, many researchers did their studies using the

retailing industries of foreign countries such as Korea, China, India, United States,

Greek, Hungary, and so on. Therefore, when local retailers apply the results of those

studies, sometimes it might be inaccurate and inappropriate to adopt into each particular

type of retailing industry especially in this case. It is because different countries have

different culture and perspective. The way of their thinking also are not same as

Malaysian. Using wrong application on store atmosphere may lead to reduce the

research quality. Therefore, the study regarding the issue is needed in depth on this area

based on Malaysias retail industry to help Auto Bavaria understand well about the

impact of store atmosphere on customer experiences.

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1.10 Definition of Term

1.10.1 Lighting

Lighting can be defined as the kind of igniting or illuminating, the arrangement of lights

occurs usually by specific equipment in order to achieve various different of effects.

Besides that, lighting is also can refer as the functional use of light to achieve a practical

or aesthetic effect. Lighting includes the use of both artificial supplies light such as

lamps and light fixtures, as well as natural illumination by capturing light from the sun.

1.10.2 Background Music

Background music is the art of sounds arrangement in a time so that it can produce a

continuous, unified, and evocative composition, as through melody, harmony, rhythm,

tempo and timbre. It is also refers to various styles of music or also known as

soundscapes originally intended not to be actively listened to. It is also can be said as

supplement or additional features that are apply in a particular situation or event.

Background music that is usually played at a low volume and it is not the main focus to

be listened by the audience.

1.10.3 Color

Color and also known as hue is the element of art that is produced when light, striking

an object and it is reflected back to the eye or in other words is the property possessed

by an object of producing different effects on the eye as a result of the way it reflects or

emits the light.

1.10.4. Visual Merchandising

Visual merchandising are includes the combination of products, atmospheres and spaces

into a motivating and engaging displays and arranging goods and merchandise

assortments within a store to improve the layout and store appearance.

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1.10.4 Customer Experience:

Customer experience is the sum of all experience a customer has with a supplier of

goods or services, over the duration of their relationship with the supplier. This aspect

includes the customers awareness, discovery, attraction, interaction, purchase, use,

transaction, observation and participation.

1.10.5 Customer Behavioral Intention

Customer behavioral intention can be defined as a course of action, aim and concern

that a consumer brings to deal on a current or future purchase activity. It is known as the

theory of reasoned action which is a model for the prediction of human behavior,

feeling and attitude. It is also a cognitive plan to perform a behavior that has created

through a choice or decision process that focuses on beliefs about the consequences of

the action.

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CHAPTER 2: LITERATURE REVIEW

2.0 Introduction

This chapter presents the overview of current literature in the frame of the presented

research problem. Each of the bodies of literature is discussed which is focus on the

specific nature of the relevant literatures that relates to this study.

A literature review is a step-by-step process that involves the identification of published

and unpublished work from secondary data sources on the topic interest, the evaluation

of this work in relation to the problem and the documentation of this work (Sekaran &

Bougie, 2009, p.38). Therefore, in this study, each independent variables and a

dependent variable will be reviewed on previous studies that are related to this topic.

2.1 Review of literature

2.1.1 Store Atmosphere

According to Levy and Weitz (2009), store atmosphere is referred as the attribute that

aims to intensify the store environment with the combination of different cues such as

lighting, colour, background music, layout, space, design and scent. The store

atmosphere seems able to affect customer feeling and experiences. Besides, According

to Milliman, (1986) categorized atmosphere as a term that is used to explain customer

feeling towards the shopping experience which cannot always be seen. When the

customers receive fantastic experiences while visiting a store, then, they will pass a

positive word of mouth to their closed peoples such as friends and families. The

percentages of the customer to come back to the store are also high since they were

comfort with the store environment. In addition, Kotler (1973) was the first one that

used the atmosphere term described it as the design of store environment that can

stimulate buyers emotions and ultimately affect their purchase behaviour.

Developing a strong positive atmosphere has become important to the companies to

sustained competitive advantage. Birtwisle and Shearer (2009), has stated that research

21

about the store atmosphere has allowed retailers to create positioning strategies, develop

store image and enabled them to differentiate their stores in terms of the products and

services on offer. A dynamic store atmosphere also typically form a positive impression

of a retail store through various method of communication such as word of mouth,

personal experience, advertising, recommendation and so on (Estelami et al,2006).

Sirgy et al. (2000) suggest that a good combination atmosphere factors in a store can

create a favorable consuming context and generate positive perceptive emotions about

the store among consumers. Store environmental factors can influence the subjective

feelings experienced by consumers in the store and influence the shopping experience,

consumption amount, perceived quality, satisfaction, and shopping value (Babin &

Attaway, 2000). Therefore, a pleasant store atmosphere can affect the time consumers

spending in the store.

Based on Hu & Jasper (2006), store atmosphere also give impacts on the customer

minds. From years ago, store displays were mainly used only for the promotional

purposes. However, as customers nowadays became more sophisticated and

knowledgeable, store managers have discovered new roles for effective atmosphere.

The latest, store atmosphere play roles like communicating product information and

store image, assisting consumers in making purchase decisions and create exiting

shopping experience. Moreover, customers perceived that they would be more likely to

come a store that have more in-store displays together with high graphics dimension

and user friendly meaning (Mitchell & Oppewal, 2009).

2.1.2 Lighting

Lighting can be referred as the act of enhancing or illuminating, the light arrangement

to create particular effects, an effects occurred by the arrangement of lights, and the way

light falls upon a face, objects, products etc, in a various situation (Freyssinier et

al,2006). Based on Taylor (2006), lighting is a key design element that contributes to

the identity, comfort, and visual quality of a retail store. Reports from Varley (2006)

stated that, a high contributor to an appeal store atmosphere is the lighting used. For

22

many specialty stores, the lighting design reflects the stores image and as a tool to

feature the stores merchandise and business selling strategy

According to Hoyle (2003), a successful lighting at any retail store and business

environments has the potential and probability to dramatically affect sales since lighting

can increase the floor traffic, create visual interest, bring effect to the color of

merchandise and able to direct the customer going through the store either deeper.

Based on Perney (1974), ideal store lighting can draw the customers attention to

observe the products particularly. Mehrabian et al (1974), also stated that the lighting

which also one of the environmental psychology can bring impact to the customers

emotion and experience. Usually, retailer provide a bright lighting in their store

because, with this conditions, products are more often examined and touched compared

to the dim lighting conditions. Lighting also can influence the attractiveness of

products in a store (Magnum, 1998). In the customers eye, products with high light

levels were found to be more captivating than products with lower light levels.

Donnovan et al (1994), also stated that a bright light and compatible background music

can increased consumer arousal and their enthusiasm. For the perspective of Vaccaro

(2008), proper use of light is another method to attract customer attention on specific

products, capture certain experience and also hide any retail weakness and error.

Occasionally, hiding some parts of store to ensure those the dark areas are a strategy to

maintain good store image. In fact, store lighting can influence the consumers

perception, emotion, cosiness and experience of store image (Banat, 2012). Besides,

lighting also can give impact on consumers cognition, value and at last the purchase

decision making.

Lighting in a store did not only focus on the light itself, natural lighting from the glass

windows also plays its own role in a store. In automotive industry, most of the retailer

chose to have more natural lighting by having a large glass windows setting in their

store. People increasingly prefer naturalness as possible, which can be reflected in

important aspects like quality (Zumtobel, 2012). In this case, Auto Bavaria must to

avoid a fluorescent light because it really can create a low image of it since the

23

company involve in luxurious sectors. The company already applies the combination of

natural lighting, incandescent and LED type of lighting. The combinations succeed to

indicate the store elegance and exclusivity. For Pete (2013), incandescent light fixtures

are useful especially for put the customer attention to a certain goods or section in the

store. On the other hand, LED light fixtures are relatively new in retail industry. It has

many advantages compared to the traditional light fixtures since it is more energy

efficient, smaller and flexible to placed anywhere in the store (Pete, 2013). A study

from Freyssinier et al (2006), specialty stores like Auto Bavaria itself are rely on glass

windows in order to show the expensive and create the interest from the customer.

2.1.3 Background Music

Based on Yalch (1993), background music is the art of arranging sounds continuously,

unified, and evocative composition through the melody, harmony, rhythm, and timbre.

It consists of various style of music and soundscapes primarily intended to be passively

listen and hear by the store visitor. There are many studies show that background music

in a retail store can inspires customers to buy and make their shopping experience more

pleasant. A store can simply create the mood, able to stimulate the customers mind

with install the right music.

Since years ago many retailer set a background music in their store because the ability

to enhance the store atmosphere. Besides, music is popularly known as the influence

factors of customers emotion and behaviour (Milliman, 1982). Compatible background

music means that the store played the right music at the right time which is depends on

situation and season to create positive impact on the customer experience (Ruchi et al,

2010).

A lot of studies state that background music is capable of evoking emotional state,

leaving a lasting impression and behavioural responses in consumers (Matilla & Wirtz,

2001). Based on Kulkarni (2012), retailer should carefully select music genre, style and

tempo from their marketing toolbox. Morrison (2001) stressed that playing classical

24

background music can influence the decision making rather than the product itself. It

also can create prestigious store atmosphere, leading to a customer perception of luxury

merchandise.

According to Milliman (1982), instead of arousing the customers feeling, background

music also one of the effective tools to communicate with customers in non verbal way.

Playing a happy and upbeat background music can creates customers enthusiasm

towards particular products while or slow music able to create high purchase decision

and intention (Alpert et al, 1988). In Auto Bavaria, it is not appropriate to play a loud

music because the customers need a calm situation in order to think and make a right

decision when dealing and purchasing something expensive.

2.1.4 Color

According to Kouchekian (2012), many past researchers have been carried out a study

about the physiological effects of color towards the customer. It is disappointed when

there are still many retailer did not aware or did not know the use of color psychology

in their business. Color has a powerful subconscious effect on every part of human lives

(Zalanski, Paul & Fisher, 1989). Being understood about the meaning of color

especially in business gives the store manager an invaluable tool to create a successful

business by do the marketing, promotional efforts and receives best customer

experience and feedback.

Color can be defined as the visual perceptual property corresponding in humans to the

base categories that we called primary colors which are red, blue, and yellow (Bellizzi,

1992). Color derives from the spectrum of light interacting in the human eyes. With

colors the retailers can set mood, attract attention, and also make statement.

Colors also can use to energize and also to cool down. By selecting the right color

scheme, the store manager can create an ambience of elegance, warmth and tranquility

and convey an image. So, to make it simple, color can be the retailer most powerful

design element if they learn to use it effectively (Kemmis, 1998). Auto Bavaria prefers

25

the earth color tone as its theme of color. The colors draw from a palette color such as

browns, tans, warm, grey white and green. The advantage of having a neutral or earth

store color, it can be adapted to any style, from traditional, country and contemporary.

Earth tones and the warmth of wood and stone and along with the patina of various

metals are the set of the harmonious mood (Annemiek, 2008). By using a neutral color

as the store background, it can facilitate the store manager to decorate the store when it

come to the seasonal month such as Raya celebration, Chinese New Year, Deepavali,

independent day, Christmas and more.

2.1.5 Visual Merchandising

Based on Kouchekian & Gharibpoor (2012), Visual merchandising plays many

important roles in retail sector. It includes the activity of enhancing the products

presentation, support brands, increase store traffic and sales and adds visual excitement,

by having strategic arrangement and illuminated the focal destinations in a store

atmosphere.

Based on Pillai et al (2003), visual merchandising is the presentation of a store and its

merchandise to the customer through the teamwork of the stores advertising, display,

decoration, merchandise arrangement, special events, showroom coordination, and

merchandising departments in order to sell the goods and services offered by the store.

Visual merchandising is becoming more and more important in giving a store

competitive edge, since many stores share merchandise sources and therefore carry

similar items. In other words, good visual merchandising gives the merchant an

invaluable competitive edge as well as defining a stores personality in todays

marketplace (Mills et al, 1995).

Based on Moormann (1995), visual merchandising must attract and hold the passerby

until it can arouse the interest from the customers. If a display is sufficiently surprising

and unusual, a potential customer will view it more closely. Kim (2013) said that visual

merchandising can heighten the store images and increase sales efficiency. In order to

have a good visual merchandising, the retailer must establish a different strategy such as

26

create an enjoyment store atmosphere and organize the merchandise in the store

effectively.

Visual merchandising is integrated with the total planning and operation of a store. In

addition, top level executives such as store planning director and the visual

merchandising director who are the ones that responsible to meet with the corporate

executives of a company to determine such things such as the corporate image, changes

of physical facilities, seasonal projections and various other retailing innovations (Paul

et al, 1995).

2.1.6 Customer experiences

Every business provides a customer experience. That experience may be good, bad or

indifferent. Customer experience can be defined as a sum of all experiences and

perceptions a customer has while purchasing goods or services with a retailer based on

all interactions and thoughts about the business. In other words, it is an individual

experience whether conscious or subconscious while having a transaction in a store

(Gilboa et al, 2003). Customer experience consists of awareness, discovery, attraction,

interaction, purchase, communication, and emotion. When a retailer success to deliver

and create different experience to the customers, the probability for the customer to

spend in the store are high. Besides, experience also can inspire loyalty to the customers

(Richardson, 2010).

Based on SAS Institute (2013), customer experience refers to the practice of designing

and reacting to customer interactions to meet or exceed customer expectations and thus

increase the customer satisfaction, loyalty and advocacy. Good customer experience

management can strengthen the brand and store preference through different

experiences, boost revenue with incremental sales, improved the customer loyalty

through valued and memorable store atmosphere, and also can lower the cost by

reducing dissatisfied customer.

27

Based on Johnston & Kong (2011), customer experience also a phrase used to describe

the relationship a customer has with a business. Customer experience also an integral

part of customer relationship management (CRM), and it is important to company

because customers who have positive experiences tend to become repeat and loyal

customers of a business. Many previous studies stated that whatever the product or

service that a business organization offer to the customer to buy or receive, that

customer will have the experience whether it good, bad or indifferent (Johnston &

Kong, 2011).

There are an issue that companies cannot fully control experiences, because experiences

inevitably involve perception, feeling, emotion, and unexpected behavior from the

customers. According to Yoo, C.J., Park J.H., & Maclnnis D.J. (1998), to deliver

customer experience, the store manager has to know the customer better than ever

before. That means creating and maintaining complete customer profiles that help

managers to understand and measure the customers experience when dealing with a

business transaction. The more relevant the businesss offer, the closer the relationship

between the business and the customer (Yoo et al, 1998).

2.1.7 Customer Behavioral Intention

Customer behavior intention is driven by the combination of attitude toward the

purchase behavior and individuals beliefs and motivations toward the customer

behavior (Burnkrant & Page Jr, 1982). In retail perspective, the intentions usually will

be determined by the customer willingness to stay longer in the store, their willingness

to repurchase in the future and give the other peoples recommendation and good word

of mouth to visit and purchase at the store (Baker et al, 2002).

A model suggested by Mehrabian & Russell (1974), which is the S-O-R model, it is

about the customer behavioral response are from the customers intention to approach

or avoid a certain environment and it is also called as approach-avoidance behaviors.

Approach behavior occur when the customer show a positive response such as willing

28

to stay longer in the store, explore, interact, identify in the environment, having a good

impression on the environment and intend to return and come to feel the environment

again (Han, 2011).

A previous study from Grewal et al (2003), there are important relationship between

store environment cues, store choice criteria and the store patronage intention. As state

by Grewal at al. (2003), they have identified several amount of control over factors that

can contribute to consumers patronage intention. The factors include the social factors,

design factors and also the ambient factors (Grewal, 2003). Store managers can

creatively design the layout of the store and displaying the merchandise in attractive

way to give positive reaction and perception from the customer when being at the retail

store. In addition, the store manager also can enhance the stores atmospherics through

visual communications, lighting, colors and odor (Kouchekian et al, 2012).

Consumer behavior is a study about the way or attitude of the consumer when it comes

to purchase or spending pattern such as how, what, when, and why they buy. It is a

combination from various elements which are psychology, sociology, socio psychology,

anthropology and economics. Besides that, it attempts to understand the consumer

decision making process. The study also includes the consumer characteristics such as

their demographics, psychographics, and behavioral variables in order to understand the

consumers want (Sangvikar & Katole, 2012).

Based on Kang et al (2010), interesting environmental factors such as pleasant

background music, fresh scent, bright light and soft fabrics evoke pleasure and arousal

which is lead to patronage intention. Behavioral intention also includes the consumer

willingness to buy, spending more time and money, revisit intention, having thought to

recommend other peoples and trusting the environment component values (Wakefield &

Brodgett, 1996). Behavioral intention become a strong predictors of actual behaviors

have thoroughly been researched. Based on Kang et al (2010), 45% consumers are

driven to visit a retail store by recommendation by other peoples such as family and

friends.

29

CHAPTER 3: METHODOLOGY

3.0 Introduction

This chapter is focused on the approach of the study. Chapter Three will have discussion on

research design, data and information collection methods, the design of the questionnaire,

sampling design and so forth. On the other hand, the methods of data analysis which

consists of factor analysis, reliability test, descriptive statistics, mean aid on development of

hypotheses for this study.

3.0.1 Research Design

Research design is the important step to gather and analyze the imperative data and assist to

find the location of the study, sample size, population and so on. (Sekaran & Bougie, 2009).

It also includes the identifications of the four independent variables in this research namely

as lighting, background music, colour, and visual merchandising.

3.0.2 Quantitative Design

Quantitative research will be applied based on the nature of study to gather a representative

data from the targeted respondents. To better understand the impact of store atmosphere on

customer experience and behavioral intention through several factors that have been

selected, researchers have often focused on quantitative approaches by (Turley and

Milliman, 2000). It is used to quantify attitudes, opinions, expectations, experience and

behavioral intention of the customers that have been visited to Auto Bavaria. The advantage

of using quantitative research is that it produces reliable data that are usually qualified to

some large population. In this study, online and paper survey are used to collect the data

from the respondents (Wyse, 2011).

30

3.1 Data Collection Methods

In this study, there are two ways in gathering data which is through primary and secondary

data.

3.1.1 Primary Data

According to Naresh (2010, p. 132), primary data will be organized for the specific purpose

of addressing the problem on hand. The primary data that will be used is questionnaire

survey whether by online or manual. While distribute the questionnaire, the researcher need

cooperation and clarification from the respondents. Besides that, primary data refer as first

hand information or data obtained originally by the researcher on the variables of interest

for the specific purpose of the study (Sekaran & Bougie, 2009, p.180). The questionnaires

were distributed to the respondents whom their respond and answers may differentiate on

specific issues regarding to the topic. Questionnaires can be efficient data collection

mechanism of what and how to measure the selected variables. Those questionnaires were

distributed personally to the respondents.

3.1.2 Secondary Data

According to Sekaran & Bougie, (2009, p.184), secondary data refer to information

gathered by other party that already conduct a previous study. It helps researchers to get

better understand and define the problems. To obtain secondary data, the previous

researchers study can be obtained through online journal databases such as ProQuest,

EBSCOhost, Emerald Journal, Malaysian Thesis and other available databases which are

available in Universiti Teknologi MARA (UiTM) online databases. Furthermore, the

relevant articles and other sources through internet and online library are aiding in the

research. It requires inexpensive cost, time consuming and energy to the researcher. The

advance of technology helps a lot in finding resources especially the Internet.

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3.2 Sampling Design

There are five steps under sampling design which are determining the target population,

setting sampling frame and location, deciding the sampling elements, selecting sampling

techniques and determining the sampling size of respondents.

3.2.1 Target Population

Target population is the group of people where researcher is interested in analyzing to get

relevant information for research purpose. The population refers to the entire group of

people, events, or things of interest that the researcher wishes to investigate. (Sekaran &

Bougie, 2009, p.262). On the other hand, convenience and simple random sampling has

been chosen in order to select the customer in Auto Bavaria Glenmarie which is the

respondents in this study. Convenience sampling a method of finding the data by selecting

people because of the ease of respondent volunteering or selecting units because of their

availability and easy access (Sedgwick, 2013). While simple random sampling is one of the

probability sampling which is randomly selected sample from a larger sample or population

(McCullagh, 2007).

3.2.2 Sampling Frame and Sampling Location

According to Sekaran & Bougie, (2009, p.267), the sampling frame is a (physical)

representation of all elements in the population from which the sample drawn. In this study,

the sampling frame will be the customers that are already made any purchase or the

potential customer at Auto Bavaria Glenmarie. In fact, the sampling location for the survey

is the various sales and customer area in Auto Bavaria Glenmarie such as the sales and

service area of BMW cars, Motorrad (Motorcycle, bike, & scooter), MINI Cooper cars and

after sales areas, parts, accessories and gift areas, customer services department, cars

service and so on . Auto Bavaria Glenmarie, which is a headquarter branch was selected as

the representative of all Auto Bavarias branches (Sg. Besi, Kuala Lumpur, Johor Bahru,

Penang) in Malaysia. Auto Bavaria Glenmarie has the advantage to do the customer survey

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since it is headquarter, the biggest and also success to attract a lot of customers compared to

other branches. The store is located at Sime Darby Auto Bavaria Sdn Bhd, 3A, Persiaran

Kerjaya, Taman Industrial Park, Section U1, Glenmarie, 40150 Shah Alam, Selangor.

3.2.3 Sampling Elements

The respondents in this study referred to customers who perceived the service at Auto

Bavaria Glenmarie Branch. Total of 170 populations range from 20 to 70 years old were

selected in this study. Besides that, it also includes foreign respondents since Auto

Bavarias market are wide and international. The reason to choose these sampling elements

are because they are the main subject in this research since the research topic is about the

store atmosphere that can be experienced by the customer itself and in fact there are only

few obstacle in language issues since most of the customers understand and using English

very well.

3.2.4 Sampling Technique

In this study, convenience and simple random sampling technique was selected. To assess

customer's perceptions on store atmosphere factors at Auto Bavaria, researcher has to get

organized sampling frame. To accomplish this, researcher will go through companys

customer records and history to identify the customers information such as email, home or

office address (Knottnerus, 2003).

Since the researcher will distribute the questionnaire manually to the respondent,

convenience sampling is the best sampling technique where subjects are selected because of

their convenient accessibility, availability and proximity to the researcher (Crossman, 2013)

Then, researcher has to draw the sample. Decide on the number of respondents researcher

would like to have in the final sample. In this research, researcher want to select 170

respondents to survey and that there were thousands customers over the past 12 months.

Now, to draw the sample, researcher has several options. As stated by Chambers & Skinner,

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(2003), a mechanical procedure is very feasible, effective and with the development of

inexpensive computers there is a much easier way. Here is a simple procedure that is

especially useful because researcher already have the customers information on the

computer. Many computer programs can generate a series of random numbers. It can be

done through EXCEL spreadsheet. Researcher can use the function =RAND() in formula

text box which is EXCEL's way selecting random sample. Simple random sampling is

simple to accomplish and is easy and a fair way to select a sample, it is reasonable to

generalize the results from the sample back to the population (Knottnerus, 2003).

3.2.5 Sampling size

Before distributing the real questionnaire to the selected respondents, researcher needs to

pre-test the questionnaires to the other people such as friends and family members. It is

important to ensure the respondents understand the questionnaires and to avoid any

misunderstanding issues occur in the future. Researcher distributes 5 questionnaires for this

pre-test (Israel, 2013). Besides, the researcher also conducts a preliminary study which is an

activity of conducting a simple interview about the knowledge of store atmospheric

attributes. The purpose of the interview is to know how far the comprehension knowledge

of the customer regarding to the atmospherics factors and it is important when the

researcher want to construct a questionnaire (Lennora, 2013). If any misunderstanding

about the questions, then researcher need to redo the questionnaire until it suits with the

purposes of the study.

A total of 170 questionnaires were distributed and 156 questionnaires were collected. It

means that, 92% rate of response the researcher success to collect in this survey. Israel

(2009) clarified that factors such as cost are critical in determining sample size. Thus, the

study will only conducted 170 questionnaires because of the limited budget and also

problem of the time constraint.

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3.3 Research Instrument

Questionnaire survey has been used in this study. Questionnaires are defined as the series of

questions aim to gather prompt and accurate information from respondents. Thus, in order

to perform a good research, a good questionnaire must be designed. Hair, Babin, Money,

and Samouel (2003) mentioned that effectiveness and high response rate are the reasons for

researchers use questionnaire widely to collect primary data if the population of

respondents is well-educated.

3.3.1 Questionnaire Design

There are four basic question-response formats used in order to design a questionnaire

which are open, close-ended, scale-response and opinion type of question. According to

Hair, Bush, and Ortinau (2006), close-ended questions can be defined as a set of answers

that provide by the researcher for the respondent to choose. In this study, researcher decided

to apply close-ended questions because it can save respondents time and effort when

answering the questions. Respondents can easily pick up any answers from the five-point

Likert-type scale. The questionnaire was structured by simple English words and sentence

for the respondents easily understand each of the question ask and thus it will contributing

of getting accurate answer. The questions is direct, not confusing and only consists of one

e

Completed Thesis- Akmal Syalwani

Documents

paper work

submission of project

shah alam selangor

staffs auto bavaria

research paper

behavioral intention

customers experiences

independent work