Factors affecting store image and the choice of convenience store

Vi, Tran Thi TuongInternational University, Vietnam National University HCMC, Vietnam Abstract By the end of 2017, General Statistics Office shows total retail sales in the country reach

Vi, Tran Thi Tuong

International University, Vietnam National University HCMC, Vietnam

Abstract

By the end of 2017, General Statistics Office shows total retail sales in the country reached3934.2 trillion dongs ($171 billion), increased 10.9% compared to the same period of 2016.The research focused on the questions of what are the factors that affect store image andcustomer’s choice of convenience stores, and how these factors affect them The study useddescriptive analysis and quantitative methods (the survey has sample size n = 252 comprising

of students, officers and customers who had purchase experience in any convenience store in

Ho Chi Minh city) The final conceptual model was based on various past researches related tothe issue After collecting data and testing with SPSS v.21 and AMOS, the research found outthat consumer social- mindedness have a positive effect on all the four factors of store imagewhile world-mindedness just impact three factors: purchase experience, augmentedexperience and repeat purchase experience Furthermore, purchase, visit, augmented andrepeat purchase experience all had a positive impact on customer choice Although subject

to some constraint such as time and resources, the research can help companies have ageneral understanding of what customers want and help them attract more customers

Keywords: convenience store, store image, consumer social-mindedness, consumer mindedness, purchase experience, visit experience, augmented experience, repeat purchase experience and customer choice

world-1.Introduction

High growth rate and large population make Viet Nam become one of the most attractiveretail markets in the world More and more chain stores, as well as new brands, enter themarket to look for opportunities and tapping the great potential With the remarkable growth ofthe retail market, convenience stores are showing an impressive performance with highrevenue and the expansion of outlet networks in big cities such as Ho Chi Minh and Hanoi Italso means that the customers are confronted with multiple options for where they can shopand where they can enjoy their food The choices they make among many brands are based onsome criteria that are not always clear People may choose a store because of its highquality, its better price, its diversified goods or simply because they were in need of shopping

at night and there it was This may create a fierce competition for market share Thosecompanies need to consider how to persuade the customer to choose their store among a

dozen brands To impress customers, make people satisfied, they must make their services atthe higher level compared to competitors Understanding the factors that determine storeimage and the customer’s choice is important for the successful strategy of every conveniencestore The more they learn about those factors the better they are able to meet the decisioncriteria and boost occupancy and rate The main objective of this research is to identifyfactors affecting store image and choice of customers and

construct a conceptual model from them From those results, companies can improve stores image and attract more customers.

For detail, the product range meets the urgent needs and impulse buying of the localconsumers (Jones, 1986) but does not give the wide choice in brands or sizes like asupermarket (Guberman, 1971) On average, prices are higher than in supermarkets and thereare not many good foods for health (Guy, 2004; Liese et al., 2007) Some stores also providegroceries, vegetables, fresh fruit, frozen goods, fast food, small household goods andnewspapers (Jones, 1986) Dairy, alcoholic drinks and tobacco are the most popular products(Kirby, 1976)

Convenience stores seem to satisfy consumers when they want to achieve high quality,convenience, and service, combined with the efficient use of their purchase time (Kirby, 1976).One of the advantages is that the average time people spend in a store is only three or fourminutes (Brown, 1989) It also becomes a good choice to for customer who does want totravel so far (Lorch and Smith, 1993) These stores are not only well- organized small storesbut also are considered as a large retailer supplier with basic good (Kirby, 1986) Youngconsumers are using it as a "shopping habitat" to buy drinks and food and their decisionsimply temporal, social and advertising activities (Marshall, 2016)

2.1.2 The market of convenience stores in the world

Since the first time it appears in Texas in 1927 (Kirby, 1976), the US retail market has paidmuch attention to the development of convenience stores It grew rapidly in the United States

in the late 1960s (Jones, 1986) As Americans expanded into the suburbs, the important of thestore became more distinct (Vastine, 1991) Due to the low population, there are severalsupermarkets in the countryside, but most of them are convenience stores compared to urbanareas (Bustillos et al., 2009)

In Japan, the convenience store has developed strongly for more than 20 years, providing alegend in the Japanese retail industry (Kunitomo, 1997) Some operational methods which aresupported by the widespread use of advanced technology systems that help them manage

to redefine their courses (Sparks, 1995) The parking space is the difference between a shop

in the United States and Japan According to Terasaka (1998), there is no parking in Japan Sato(2009) presents the different strategies that Family Mart and 7-Eleven Japan, the world's twoleading convenience stores Family Mart has chosen a group management strategy, while 7-Eleven Japan selects a policy as a single management strategy

Han and colleagues (2014) reported that convenience store channel has the highest growthrate in Chinese retail market Some researchers also consider it as the same case ofconvenience stores in Taiwan (Hong et al., 2011) According to Chen and Ou (2009), Taiwan

has the greatest number of shops in the world There are more than 9,000 convenience storesand for every 2,600 people, there is one person owns a store It is the main

channel which can offer consumers more quality and stable services (Tsai and Huang, 2012).Recently, a new kind of convenience store has emerged in Taiwan, which combining bothshopping and dining These stores are described as "hybrid convenience stores" (Ming-SungCheng et al., 2009).

2.1.3 Market of convenience stores in Vietnam

General Statistics Office shows that the size of the retail market has grown rapidly from $70billion in 2010 to $158 billion in 2016 The retail market in Vietnam has increased in manyforms, especially in the form of modern retail such as supermarkets, shopping centers, andlarge commercial centers In addition, shops, household business, street vendors are alsogrowing Currently, the country has about 800 supermarkets and shopping centers, 150 tradecenters, nearly 9,000 markets, 1,600 convenience stores and 2.2 million retail businessesacross the region The growth of convenience stores and mini markets in the past few years isquite impressive According to a research by Kantar World Panel last year, more than one-third of Vietnamese household visit convenience stores or mini markets 10 times per year.Nielsen said that the growth rate of the modern retail channel from April 2016 to March 2017 is7.7%, higher than the 6.1% of the traditional channel; the revenue growth rate of modernchannels reach 6.3%, 1.34 times higher than traditional channels

Despite the current fast-growing segment, this shopping channel still faces competitivepressures from the supermarket for the buying experience and variety of goods or from thetraditional market for fresh products and good price In fact, modern retail in our country hasgrown slower than previously forecast, currently only accounts for about 25% of total retailsales (data from the Ministry of Industry and Trade of the Socialist Republic of Vietnam).High location fee, high costs, traditional shopping habits and consumption are the mainreasons consumers do not choose convenience stores and mini markets Therefore, itrequires a rational strategy to develop in this market segment

A typical convenience store in Vietnam covers an area of approximately 50-250m2 andoffers a variety of basic products, including dairy, bakery products, detergents, householdcleaning products, alcoholic beverages, soft drinks, tobacco products, fresh and frozen food,prepared meals, as well as health and beauty products On average, it manages about 1000-

1500 codes Besides, the consumer can pay for electricity, water, telecommunications, cable

TV or use ATMs at the store Compared to other types of stores, working hours are moreextended, operating approximately 24 hours a day and 7 days a week There are about 50-150customers visit such a store per day

Appeared in Vietnam from 2005 but not many years, the convenience store model reallydeveloped Especially in 2015, this segment of the market "blooms" with the participation ofmany investors at home and abroad Foreign businesses such as Family Mart (Japan), B’smart(Thailand), Ministop (Japan), Circle K (USA), Shop & Go (Singapore) continually expand thesystem and form large chain stores According to Q&Me Vietnam Market Research’s report,

in particular, Circle K has 211 stores, B’smart has about 150 stores, and Shop & Go has 46stores Domestic enterprises also continuously expand the chain, of which, the strongest isVingroup After almost 2 years of building and developing the system, VinMart+ has about1,000 business locations Saigon Coop also contributes to the market by releasing its newbusiness model Coop Smile In October 2017, they open 60 stores all over Ho Chi Minh City(Figure 1)

In Figure 1, the geographical distribution of convenience stores is presented The totalnumber of convenience stores in 2017 is 1,561 while 927 (59.39%) are operating in Ho ChiMinh City Ha Noi has 469 stores accounting for 30.04% It is obvious that the market ofconvenience stores is highly concentrated in the two major cities (89.43%) compared to all theother regions

2.1.4 Store image

There are many definitions of store images Keaveney and Hunt (1992) view store image as

a combination of individual cognitive and emotional responses They also emphasize thatprior customer experience is important to the image Similarly, Martineau (1958) describes it

as the way in which the store is defined in the

mind of the consumer, separate from qualities and psychological characteristics In anotherstudy, image was defined as the set of perceptions and attributes associated with a store, it

is an important factor to predict customer choice (Grewal et al 1998) Favorable storefrontdevelopment is an important aspect of the retailer's ability to maintain and develop theirmarket segment (Steenkamp and Wedel, 1991)

Store images play an important and can influent the consumers The visual assessment

of the store, including the convenience factor in the store, is closely related to customersatisfaction over the air factor and the sale does not have a significant impact (Theodoridisand Chatzipanagiotou, 2009) Marketers also mention the importance of how products areintroduced inside the store, so they can be easily ordered or even attract customers to buythem (Schwenke et al., 2010) On the interior of the store, Panigyrakis et al (2009) argue thatproper product placement, using comfort criteria and convenience (convenience in the store),affects the time spent inside the store

Terblanche and Boshoff (2004) think that offering an in-store shopping experience (ISE),can help the retailer to position their stores with some factors ISE includes (i) handlingcomplaints, (ii) internal storage environment, (iii) personal interactions, and (iv) value,diversity, and type of goods

Fonseca (2011) classified the customer segment for the supermarket by two types ofvariables: behavior variables and base variables When customers spend their time in retailstores, near the house, close to the work, lower prices, brand diversity, product diversity,parking conditions, product quality, promotion, fast service, good service, store cleanliness,opening hours, consumption habit are considered "behavior variables” and "basic variables"are travel time, transportation methods, reason for purchase, access patterns, andfrequency of usage

A study in China think the service attitude, quality, reputation, payment efficiency, low price,breadth and depth of choice, store layout, internal environment, easy-to-find goods,membership services, opening hours, staff knowledge, decoration geographical convenience,advertising services and staff numbers are eighteen elements of the store image which maylead to the customer preference (Chang and Luan, 2010)

2.1.5 Customer choice

It seems that the determinants that drive consumers to convenience stores are: impulsepurchases, easy access, time pressure, shopping hours (Han et al., 2014) Jones et al (2003)and Fitch (2004) have emphasized that convenience (in terms of reducing the time and effort

of consumers to get a product) is a priority for the customer Moreover, according to Findlayand Sparks (2008), the most loyal customers are the ones who walk to visit the store

In addition, Jones et al (2003) think that the provision of quality products and servicescontributed significantly to the retention of a store's customer base The main attributes thataffect customers of convenience stores are prices, customer service, the variety of productsand convenience (Panigyrakis et al., 2009) It should be noted that Skallerud et al (2009)shows that although customers can be loyal to a convenience store, they may visit asupermarket or even a supermarket

2.1.6 World mindedness

Sampson and Smith (1957) appear to be the first one to evaluate the concept of the world

in the spirit of world-mindedness There is a scale of 32 items content in eight concepts(i.e., government, immigration, religion, education, race, patriotism, economics, and war).Yaprak (1996) develops a tool to describe cosmopolitan consumers based on items related

to organizational commitment and community and the tendency to identify themselves in abroader context This scale is built up from the world-mindedness scale of Sampson and Smith(1957); therefore, it relies on general measures, rather than on specific consumers,

attitudes, and behaviors Here, in accordance with the definition of Hannerz (1990), a mindedness person is considered to reflect both "cultural openness" (i.e., acceptance ofcustoms, ideas, and products from

world-other cultures) and "cultural adaptability" (i.e adapt to local customs and habits in anworld-other country) The term "world-mindedness" is used to differentiate this structure from previous cosmopolitanism measurement.

Recently, Nijssen and Douglas (2008) have identified consumer world-mindedness in terms

of concern, openness, and acceptance of products and ideas from other cultures or regions inthe world and accept the standards and values of these cultures without biased or prejudicednationalism This is from Hannerz's (1990) view of a person who has world-mindedness isinclined or ready to engage with "other" and thus may open to different cultures (e.g lookingfor contrast rather than homogeneity) This is understood to be related to personality traits ofopenness to experience Nijssen and Douglas transform this concept into a consumercontext that shows interest, openness, and acceptance of products and ideas from othercultures or parts of the world Consumers with world-mindedness are also more willing thanother consumers to try foreign goods, both at home and when visiting these cultures, as ameans of learning and experience them

2.1.7 Social mindedness

The early study about socially concerned consumers (Anderson and Cunningham,1972) pay more attention to environmental issues, such as concern for air or waterpollution, recycling, use of pesticides, conservation of energy volume and social inequality.These studies often include the development of sociocultural and demographic profiles ofsocially conscious consumers as a potential basis for market segmentation

Anderson and Cunningham (1972) think that environmental and social measurementinclude ecological concern index, the scale of ecologically conscious consumer behavior, anddegree measurement of ethical and social responsibility In general, these measures are notcustomer-specific and can benefit from being more closely aligned with the consumer context.According to Nijssen and Douglas (2008), consumer social-mindedness is related to thetendency to engage in socially, economically, and environmentally responsible behavior Thisimplies interest in buying products manufactured under ethical, eco-friendly humanitarianconditions These customers tend to support small businesses in developing economies, so

it can help to enhance their living standard In the context of consumption, mindedness consumers will have a positive attitude towards products that have been made

social-in ethical labor practices as well as environmentally friendly products

Consumer world-mindedness, social-mindedness and store image

Nijssen and Douglas (2008) developed a model of consumer world-mindedness and mindedness and examine their effect on store image In this study, they test image of threetypes of store: The Body Shop, fair-trade stores, and a grocery store with an imported foodproducts section The result shows that consumers’ exposure to foreign cultures increasesconsumer world-mindedness and social-mindedness and that both have a significant impact onstore image However, the degree of effect is not the same

social-The Body shop – the environmentally and ecologically concerned cosmetics stores display astrong positive relationship with consumer social-mindedness It is explained that this branddemonstrates an image of using natural ingredients or no testing on animals which canappeal to customer effectively World-mindedness shows low result because thisenvironmental friendly image is not unique and can be seen at other stores in the samesegment Fair-trade stores are affected by both social-mindedness and world-mindedness.This relationship is equally strong Like the outcome of The Body shop, women are moreattracted to this kind of store World-mindedness express stronger than social-mindedness inthe case of the grocery store with imported food section

The authors conclude that consumer social-mindedness make customer have favorableimage toward store which demonstrates ethical concern, especially in global context On theother hand, world-mindedness

impact the ones who have a positive attitude toward stores provide traditional product fromother countries They also suggest that retailers will need to pay greater attention to suchissues in choosing which products and brands to stock, how to display them, and ways todevelop their store image (Figure 2, Appendix).

Model of factors affecting store image and the choice of hypermarkets in Oman

In this study, Belwal and Belwal (2017) compare two hypermarkets in Sohar, Oman: Luluand Al Safeer They try to find out which one the customers prefer and the reason for thischoice There are four main groups of factors have a positive relationship to customer choice:purchase experience, visit experience, augmented experience and repeat purchaseexperience

The result gained from the respondents of difference in demographic reveals that the fourcomponents are the main factors impact the customer choice of hypermarket in Oman Based

on it the comparison shows that Lulu hypermarket has a better store image than Al Safeer onall of the four groups However, consumers in Oman derive greater satisfaction in thepurchase and visit experience than augmented and repeat purchase The findings areimportant because they indicate some genuine buying preferences of the customer in thecontext of store choice

The authors also suggest the manager in the retail market focus on identifying factors andthe underline variables in the process of development to acquire a higher level of store imageand customer patronage

Belwal and belwal (2017) indicate the four factors contained in store image are purchaseexperience, visit experience, augmented experience and repeat purchase experience It isbased on the conceptual framework of Kotler about product or service which offers benefits

in classes: core, basic, anticipated, enhanced and product potential (Kotler, 1997) He alsodemonstrates an example of the customer expectation from a hotel room and it can beconceptualized for a supermarket or convenience store as a retail service provider Otherresearchers also categorize these benefits, tangible products, and intangibles, either ascore or intrinsic (Gronroos, 1978)

Therefore, this study concerns these four main groups would represent the image ofconvenience stores and in each group, there are some dimensions to support and illuminethem However, the contents may be different and adjusted to appropriate with the case ofconvenience stores The relationship and impact of store image toward other factors will beexplained in more detail in the next parts

In previous studies, retailers are starting to aware of increasing consumer exposure tohave heightened environmental and social concern by adapting their products and buildspecial stores for socially concerned consumers like stores selling organic products or naturalfood Stores with a wide range of products such as supermarkets or grocery stores sometimesreact with environmental issues and globalization by increasing special friendly environmentalproducts and social responsibility brands This is the proof for the new trend that products arenot just used to satisfy essential needs, it represents the customer's perception of the worldaround them and the responsibility in every action that may affect the sustainabledevelopment of the community, in this case, it's daily shopping

Consumers with social-mindedness attitude have strong ethical norms, therefore thisresearch also expects convenience store can appeal them by offering favorable image withthese kinds of products A full range of healthy and human right guarantee products can help

them to create a friendly look and get support from those people This leads to thehypothesis:

H1a: Consumer social- mindedness will be positively related to purchase

experience H1b: Consumer social- mindedness will be positively related to

visit experience

H1c: Consumer social- mindedness will be positively related to augmented experience

H1d: Consumer social- mindedness will be positively related to repeated purchase experience

Consumer world-mindedness is an openness to products from other culture or country.Nowadays, this concept is so true for customers who are exposed to global trends throughtravel and international social network Foreign travel gives people a chance to contactdirectly with the lifestyle and product from other country and culture This trend is similar todifferent customs, habits, and artifact which can make them more willing to adopt or tryproducts from these cultures Social networks also play an important role in the awareness

of global issues and it leads to the increase in social interaction This help to enhancepeople’s knowledge and concern about norms and values of these cultures withoutnationalistic bias or prejudice Customers are interested in foreign products and would like toexperience new things which come from new culture Different flavor, taste, characteristic orideas is a great attraction for those people More than just seeking variety, they tend toappreciate and open to diverse products and brands

Therefore, the research expects the store with an international image may lead to positiveattitude from the customer Besides the local or traditional products, foreign goods can givethem a new experience and arouse curiosity to attract them to come This suggests thefollowing hypothesis:

H2a: Consumer world-mindedness will be positively related to purchase

experience H2b: Consumer world-mindedness will be positively related to

visit experience

H2c: Consumer world-mindedness will be positively related to augmented experience

H2d: Consumer world-mindedness will be positively related to repeated purchase experience

The results from the study by Belwal and Belwal (2017) suggest that purchasing experience

is one of the key factors for store image, which can be seen from the perspective of servicesupport, convenience shopping, quality products, varieties, after purchase services andcourtesy extends by the participants during the purchase process Previous studies havealso shown that product offerings and quality, product varieties such as organic and exoticproducts, and convenience are provided through self-scanning devices (Cho and Fiorito, 2010)

is supposed to an important attribution These factors may be related to the level of “coreand basic” benefits within the framework of Kotler (1997) that customers expect fromsupermarkets or convenience stores as a different type of retail format

In the case of convenience stores, purchase experience contains product quality, variety,and shopping convenience which imply the way products are arranged and condition ofinventory This factor focuses on products they provide to customers including fresh andpackaged products The goods must satisfy the quality condition since it impacts directly thecustomers’ health Moreover, they should be arranged rationally for people to approach easily.The stores need to restock product regularly to avoid a situation in which customer cannot findwhat they want By investing in and taking care of merchandises, retailers can haveadvantages over consumer choice And it is the hypothesis:

H3: Purchase experience will be positively related to customer choice

According to Belwal and Belwal (2017), visit experience gives importance to parkingfacilities, cleanliness, merchandising, access to ATMs, and efficiency at payment counters This

factor is considered as facilities that consumers expect while shopping from a particularsupermarket and matching the groups of "stores" and "services" as defined by Amine andCadenat (2003).

To make it fit this research, visit experience focuses on the parking area, cleanliness,facilities, and merchandise In merchandising element, there are some aspects will beexamined, they are security in store, the attitude, and knowledge of staffs, whether theyknow enough about all the products to help customers and the store location This factorreflects the degree of convenience that store may offer to the consumer when they areshopping If they feel comfortable and please with the service, they might considerconvenience store as a first choice So, the hypothesis is:

H4: Visit experience will be positively related to customer choice

Kotler (1997) refers to "augmented level" as additional services are added to the product.Based on this concept, Belwal and Belwal (2017) show that these are additional efforts that

a store needs to improve its reputation Advanced experiences include prayer rooms, betterdeals, advertising, promotions, and contests Among other demanding enhancements in allmajor retail formats is air conditioning (Belwal and Belwal, 2009), this is necessary, keepingthe current rate of overheating in the region Some studies show that the promotion canprovide information about the price, quality and brand image of the product The way given bypromotion is handled in the minds of consumers ultimately leads to a favorable or unfavorablepurchasing decision (Blattberg and Neslin, 1990)

In Vietnam, prayer room does not suit our culture then it is not mentioned in the model Themain elements are price, better deal, and promotion In this factor, the study examineswhether the price is proportional to the quality and the customer's assessment of the amount

of money they have to pay for a specific product Better price or deal may have a relationship

to a favorable image in customers’ mind Discount and promotion campaign can represent thebargain that they want to get Therefore, showing them the practical benefit when shopping atthe store is a good strategy to attract consumers This result in the hypothesis:

H5: Augmented experience will be positively related to customer choice

The last factor is repeat purchase experience Belwal and Belwal (2017) assume thatcustomers like a store with their next trip will create confidence This factor can be viewedfrom the perspective of consumer satisfaction and loyalty, as it evolves as a result of bettervalue perception (Tsai et al., 2010) Focusing on the relationship between satisfaction andpurchase intent, some studies suggest that greater satisfaction with an organization orsupplier will reinforce the buyer's intent or service on later visit (Pereira, Salgueiro, & Rita,2016)

In this study, repeat purchase experience refers to the ability to maintain the quality ofgoods and services in the next visit of customers It examines whether the quality and theprice are the same as the previous times The staffs can keep polite and friendly attitudetoward visitors also play an important role This is the hypothesis:

H6: Repeated purchase experience will be positively related to customer choice

2.10 Hypotheses

In order to achieve the research aim, hypotheses are created to be tested Each of thehypothesis was devised based on past research, which is detailed in Table 1, Appendix Thehypotheses of the thesis are shown below:

H1a: Consumer social- mindedness will be positively related to purchase

experience H1b: Consumer social- mindedness will be positively related to

visit experience