Tiased on the past research on customer Joyally and affecting factors, the author has developed a model for assessing the impact of six independent variables or aftzcting factors includi
Research objectives and research questions 7 1 Rescareh objectives 7 2 Rescarch qucstions s~ 8 3 Objects and soope of the research
This research seeks to identify and understand the factors influencing customer loyalty in relation to chain store selection Additionally, it aims to estimate the impact of each identified factor on customer loyalty Based on the findings, the study will propose effective strategies for Vinmart+ to enhance and maintain customer loyalty.
‘The research is limited to the case of the Vinmart+ chain store - a new brand in the sector of retail of FMCG (Fast Moving Consumer Goods) in Vietnam
‘The study aims to respond to three research questions:
(1) By reviewing the related literature, what are the faclors that affect the customer loyalty to a retailer?
(2) In the context of Viemam, what factors are important and having significant influence on customer loyally to ọ retailer / 1 a chain store (Ihe case of Vinmnart— chair store)?
(3) What solutions could be undertakened by Vinmart! to get the loyalty of its customers?
1.2.3, Objects und scope of the research
Customer loyalty to a chain store is influenced by several key factors, including the quality of products, the variety offered, and the store's design and atmosphere Additionally, reasonable pricing and the quality of service provided by front-line staff play crucial roles in shaping customer perceptions The overall store image also significantly impacts customer loyalty, making it essential for retailers to focus on these elements to foster lasting relationships with their clientele.
Scope of ths research: Due to limited research time, and the fact that this research arch foenses on studying main objccls including (1)
The study focuses on the optimal store size for enhancing customer time efficiency and the variety of goods offered, specifically in relation to the Vinmart+ chain store, which specializes in fast-moving consumer goods (FMCG) It aims to assess the impact of independent factors, particularly service aspects, on customer loyalty to the Vinmart+ chain Data will be gathered from customers aged 18 and above, who have experience shopping at Vinmart+ in Hanoi, representing various professional backgrounds and social classes.
Reseach methods 8 1.4 Thesis Strtucftfe .à.seccnceereree 9 2 Literature Review 10 3.1 Nature, characterislics and roles of relailing 10
Characteristics of chain store format 13
The chain store system originated in the United States and has since expanded into developed and developing countries It consists of a network of retail outlets operating under the same brand, ensuring consistent management and commercial policies These stores, while located in various places, maintain uniformity in appearance and product display According to Hughes (1994), a chain store system is defined as a collection of retail outlets that sell similar products and are centrally owned and managed.
Chain stores are characterized by a network of multiple retail locations operating under the same brand These stores are centrally managed, resulting in low or no autonomy for individual outlets Additionally, the products displayed across these points of sale are typically uniform, ensuring a consistent shopping experience for customers.
The procurement, storage, and supply of inputs are centralized and typically handled by a specialized unit for all stores Additionally, promotional programs are executed simultaneously across all points of sale and are managed in a coordinated manner.
Advantages and desavantages of chain store format
Carpenter and Moore (2006) pointed out spme main advantages and disavantages of chain store format
The chain store sysiem has some major advantages us follows:
The system benefits from low operating costs due to the unique characteristics of chain store management, which include centralized advertising and communication, rapid turnover rates, and reduced intermediary expenses.
Be able to make use of preferential procurement prices ftom producers and distributors thariks lo the concentrated purchase in large quantity,
Consistent pricing strategies foster trust and simplify the purchasing process for buyers, eliminating the need for negotiation and alleviating concerns about inflated prices.
The standardized operating procedures, point of sale arrangements, service quality, and front-office staff practices across all locations of the chain enhance customer convenience by familiarizing them with consistent methods This professional management approach not only improves customer experience but also effectively reduces the overall operating costs of the system.
Advertising and communication costs are minimal, yet they yield high efficiency due to uniform display and decoration across all points of sale A well-crafted advertising message in mass media can effectively enhance the performance of every sales location within the chain.
II is casy to transfer the goods among warchonses or points of sales in casc certain point of sales has been cut of stock
The interaction between various points of sale, including new and established stores, significantly influences overall business performance The positive outcomes for the entire chain are evident, particularly in locations with a high customer volume.
For customers, he appearance of many points of sales in difference places will facilitate their purchase in difference places
The direct sales system from distributors eliminates certain middlemen, resulting in cost savings and competitive pricing for customers.
Customers can trust the quality of products, as there is no risk of poor-quality items due to the organized supply chains that focus on centralized purchasing These chains collaborate with reputable and reliable producers and brands.
Some disadvantages are as follows:
Managing a large system of points of sale presents significant challenges, as it requires centralized management and can hinder flexibility in adapting to specific characteristics.
The primary challenge in each region is the low 3s, which affects customer relations Salespersons often juggle multiple clients and work in teams, resulting in limited personal interactions with customers Consequently, the depth of these relationships is restricted, hindering effective communication and engagement.
Despite its limitations, the chain store model continues to thrive, particularly in developing countries like Vietnam, where its strengths are increasingly recognized and leveraged for growth.
2.2.3 Development of modern retail (by chain store) im the world and in Victnam!
Vietnam's retail market is increasingly recognized as a lucrative opportunity, demonstrating significant growth potential According to AT Kearney's 2017 Global Retail Development Index (GRDI), Vietnam advanced five positions to rank 6th, trailing only major markets like India, China, Malaysia, Turkey, and the United Arab Emirates This advancement highlights Vietnam's appeal to foreign investors, as it surpasses populous markets such as Indonesia (8th) and established retail markets like Saudi Arabia (11th) and Thailand (30th) Furthermore, recent reports indicate that the Vietnamese government has approved the establishment of 100% foreign-invested retail companies, further enhancing the market's attractiveness.
1ã from 2015, together with factors such as preferential policies, urbanization, young population, cle makes Vickwam retail markel enter the list of the leading alfractive markets in the world,
In 2017, foreign retailers held 17% of the market share in Vietnam, while domestic retailers dominated with 83%, according to the Ministry of Industry and Trade Notable foreign investors in modern retailing, including Aeon from Japan, Lotte from the Republic of Korea, and Central Group from Thailand, have entered the Vietnamese market through mergers and acquisitions Prominent domestic brands like Vingroup, Fivimart, and Big C have established a strong presence in this competitive landscape.
Coopmart, Aeon Mall, ete noticably, 70% of forcign rolailers arc expanding convenient slores and create a new face for the masket The growth rate of modern distribution channel fom
From April 2016 to March 2017, Vietnam's retail market experienced a growth rate of 7.7%, surpassing the 6.1% growth in traditional distribution channels The Ministry of Industry and Trade projects that the retail market in Vietnam will reach US$ 179 billion by 2020.
2.3 Overview of the shopping behaviors at chain storc format
2.3.1 Magasin — A multifacetie reality trom customer’ s view
From the customer's perspective, stores encompass at least six distinct attributes, each varying in importance among different customer groups (Levy and Weitz, 2008) Understanding these attributes is crucial for business owners in their store design Key attributes include convenience, proximity to customers, alignment with customer area concepts, and the geographical scope that distributors prioritize in building relationships with their customers.
The diversity of products and brands available in stores is defined by three key criteria: the variety of product types, the range of product lines within each type, and the assortment of brands offered within the same product line.
‘The applicable price, including the diversity in the selling price for each type of product, the application of promotional privs, discount or discouml policies by purchased quantity or firm
Services include technical support services, financial services, charged services or services which arc nol attached to salc programs of enterprises,
Customers’ shopping motivation 1
Customers visit supermarkets and stores primarily to fulfill their need for purchasing goods However, this is not the sole reason for their shopping trips Research has shown that various factors influence customers' decisions to shop, highlighting the complexity of consumer behavior.
Tauber (1972) pointed out two groups of motivations which urge customers to go shopping at supermarkets, including personal motivation and social motivation
Shopping at supermarkets and malls serves as a form of entertainment, transforming the atmosphere for many customers beyond just a simple purchasing experience.
To update naw information about products, consumer trends and prives
Promotion programs and price reductions at stores and points of sale play a crucial role in influencing customer behavior Often, customers may not have an immediate need for products; however, attractive incentives and promotional offers can spark their interest and lead to purchases.
To participate or enjoy a typical space or atmosphere in supermarkets or shopping malls
To scck for social relationships, Shopping malls, (rads conters or ứuidoer meakels on special occasions can be places where customers look tor social relationships;
‘To express a certain role (e.g Coming to high-end supermarkets to express social slalus) or simply to enjoy the serving altitude “as the God” of the supermarket front- office staff,
‘To express yourself as a specific group of customers that have a specific interest
Por example, the shopping al discount slores, bookslores, creative rectealion centers, TT or IT stores, convention centers or car shops, ete
Recognizing the motivations of various customer groups enables shop owners to create customized marketing strategies that attract more customers, rather than simply showcasing products for sale Transform your sales environment into a space that fulfills customer needs and desires.
‘your personal motivations beyond the buying
When selecting a point of sale, a store's image, relevance, and customer perception play crucial roles in meeting customer motivations and preferences, ultimately providing them with the opportunity to make informed choices.
According to studies of the store selection behavior (Granbois, 1981; Fothcringham, 1988), this behavior is influenced by two groups of variables
Key factors influencing customer behavior include the distance from their homes to the point of sale, transportation methods, age, available leisure time, familiarity with shopping malls, income levels, personality traits, and specific needs Additionally, the store's image plays a crucial role in attracting customers.
Customers will choose poinis of sales near work places or at feast sasy access
‘Therefore, rclailers should pay close attention to placing the store lovation close and convenient to customers
Consumers increasingly prioritize convenience to reduce their shopping time, leading them to favor shopping environments that offer a wide variety of items to fulfill their needs with each purchase.
‘The second group includes the variables associated with the distributor’s marketing ics anid trade strategy (rmmber of stores per chain, ease of access, slore character policy) Specifically:
Customers choose selling points based on their perception of the store’s price strategy Consequently, stores can influcnce and altraet their customers based on (heir product pricing stratepies
Stores can attract customers by utilizing media to enhance visibility and leverage search results when purchasing products This includes offering a diverse range of goods and providing various labels for each type of product, allowing customers to make informed selections.
Many studies also show that customer perceptions of products, chain store image, chain location, afc are important ficlors determining their choice of points of sales
Customer loyalty to chain store and its antecedents (affecting factors)
Concept of customer loyalty 19
Previous studies have presented various perspectives on customer loyalty, highlighting two primary approaches The first is the behavioral approach, which defines loyalty based on observable customer behaviors The second approach focuses on perception, emphasizing the importance of customers' thoughts and attitudes prior to their actions.
Research indicates that examining both customer attitudes and behaviors provides a more comprehensive understanding of customer loyalty Focusing solely on behavior may lead to unstable loyalty, as customers can easily alter their purchasing habits when circumstances change Conversely, while attitudes are important, they do not always translate into repeat purchases, which are essential for demonstrating true loyalty For managers, the ultimate goal is to convert loyalty into consistent purchasing behavior that drives profitability for their stores.
In the retail distribution field, customer loyalty is closely linked to customer satisfaction (Jacoby & Kyner, 1973) According to Orth and Green (2009), the image of the point of sale, as perceived by customers, significantly impacts their trust and satisfaction with the services provided, ultimately influencing customer loyalty.
Customer loyalty to points of sale is influenced by several key factors, including convenience, appropriateness, time savings, and the excitement of purchasing goods Additionally, Sitgy and Samli highlight that the physical space and positioning of stores also play a significant role in shaping customer loyalty.
Customers tend to exhibit higher loyalty to points of sale that offer specific benefits aligned with their needs This loyalty is influenced by the marketing mix elements at these points of sale, including product offerings, pricing, location, promotions, customer service, convenience, and infrastructure When these elements effectively meet customer expectations, they enhance the overall shopping experience and foster stronger customer relationships.
2.4.2 Main factors affecting customers? loyalty in retailing
Research has identified several key factors that influence customer loyalty, including product-related aspects such as quality, variety, and diversity Additionally, pricing elements at points of sale, including price levels and promotional strategies, play a significant role The quality of service provided by front-office staff, the overall store image, and the design and layout of sales spaces are also crucial Furthermore, the convenience of store locations, including parking availability and additional services, enhances customer satisfaction and loyalty.
Variety of goods and Quatity of goods Product is the most important factor deciding customers’ participation in purchasing at stores
The quality of goods is the most critical factor influencing customer choice, particularly in a market filled with poor-quality products Customers prioritize points of sale that establish a strong reputation for quality and product origin, making prestige a vital consideration in their purchasing decisions.
The quality of goods is crucial at the point of sale, as it varies based on the target customer Affluent customers seek high-quality products that exceed standard expectations, while average consumers prioritize quality that ensures affordability and feasibility in their purchases Thus, selecting the appropriate quality level of goods for display in the sales chain is a vital decision for retailers.
The quality and variety of products, along with brand diversity, play a crucial role in influencing customer choices At each point of sale, customers seek a wide range of trademarks to choose from, often switching between different brands to enhance their consumption experience.
The variety of products displayed at points of sale can sometimes overwhelm customers, particularly when they are pressed for time Research indicates that an abundance of brand choices can hinder decision-making, leading to longer selection times While a diverse product display is crucial for large supermarkets, smaller supermarkets and convenience stores should focus on offering a suitable range of goods that meets customer needs efficiently.
Many studies have figured out the positive intluence between type of goods and quality of goods to the customer loyalty to the point of sales (ex Luphemia & Sian,
Price is a significant concern for customers, particularly those interested in fast-moving consumer goods (FMCGs) These consumers frequently purchase these products and are well aware of the general pricing of their preferred brands Consequently, they can easily evaluate price differences across various points of sale.
The perception of pricing at a point of sale extends beyond the listed prices of products; it also encompasses discount policies, promotional offers, and additional benefits provided to customers (Kerin, Jain & Laward, 1992).
In the Sanz group of products and consumer goods, customers prioritize points of sale that offer competitive prices However, price is not the sole factor influencing their decisions; customers also consider store image, convenience, service quality, and the layout of the sales area When these factors are perceived positively, customers are more likely to accept higher prices at those points of sale.
Prices at convenience stores are generally higher than those at large supermarkets This discrepancy is largely due to the location of convenience stores, which are often situated in residential areas, leading to higher leasing costs.
Leasing costs for large supermarkets are typically lower due to their suburban locations Despite this, customers are often willing to pay higher prices compared to convenience stores for the benefits of faster and more convenient shopping experiences.
Research model specification 25 1 Research Model: - 35 2 Research Hypofheses
The thesis studies the influence of the following variables: Variety of goods,
Quality of goods, Service quality of front-office staff, Store image, Reasonable price, and Convenience of the store on the customer loyalty to the convenience chain store,
Figure 3.1: Research Model 3.1.2 Research Hypotheses:
Based on previous research related to the customer loyalty and its impact factors, the following hypotheses were generated:
Hypothesis 1: The variety of goods displayed in the convenient chain store has a positive effect on the customer loyalty;
Aypothesis 2: The quality of goods displayed in the convenient chain store has a positive effect on the customer loyalty;
Liypothesis 3: ‘The policies on reasonable price of the convenient chain store has a positive effect on the customer loyalty;
Hypothesis 4: The service quality of fiont-otfice staff has a positive effect on the customer loyalty,
Hypothesis 5 The slore image has @ positive effecl on the customer loyalty;
Hypothesis 6 The convenience of the store has a positive effect on the customer loyalty,
This study used the scales of the previous ones as below:
Table 3.1 below provides detailed questions used in the research:
No Variable Measurement scale Source
1 |[Vamiety of] QI Vinmartt stores have the types of products Thomas @013) goods suitable to me
Vinmart! stores consistently maintain a well-stocked inventory, ensuring that all products are readily available for customers The selection of goods and brands offered at Vinmart! is thoughtfully curated to meet the diverse needs and preferences of shoppers.
Quality of | Q4 The quality of goods in Vinmart— stores is Thomas (2013) goods always guaranteed
Q5 Vinmarl! chain store is willing to commit the quality of goods to consumers
Q6 Products sold in Vinmartt stores have
Doltor qualily thar those in other stores
Reasonable | Q? The selling price in the Vinmartt chain Huddleston ot price store is more attractive than that in other chain al (2604), stores Bloemer et al
Q8 I find the price correlation/quality of products sold in Vinmarti stores quite reasonable
Q9 I am satisfied with the general price of goods sold in Vinmart |
Q10 The sales staff of Vinnart+ are very polite Q11 Tho salos staff are always willing to assis
I will introduce the Vimmart chain store to my friends and relatives for their purchases This includes front-office customers during the buying process and the staff payment process as outlined by Bloemer et al (1998).
QU2 The number of staff in the slore is always enough to assist customers when needed
Vinmart+ stores are highly regarded compared to other chains, as noted by Clotiey et al (2008) The modern design of the Vinmart+ chain contributes to its positive image in customers' minds (Prewitt, 2000) Additionally, Vinmart+ stores are strategically located for convenience (Ching-Wei Ho, 2012), and the payment process is both fast and efficient The variety of supporting services offered enhances the overall shopping experience, making it more convenient for customers As a result, I plan to continue purchasing goods from Vinmart+ stores in the future (Clotiey et al., 2008).
Q20 I will purchase more in Vimmmi+ cham and store in the coming time Basu (1994)
Full questionnaire as sent to customers is included in Appendix 1 kẻ 3
3.2.2 Data sources, Sampling method and data collecting techniques
The research sample consists of individuals of various ages, genders, and occupations who are customers of VinMart supermarkets This study focuses on understanding the shopping experiences of VinMart customers and their comprehension of the supermarket and its products By doing so, it aims to accurately evaluate the research variables in the model, which include independent variables related to different aspects of the goods and services offered by the store, and the dependent variable of customer loyalty to the chain.
The reliability of statistical analysis results is determined by the appropriate sampling scale, as outlined by Krejcie and Morgan (1970) According to their formula, the sample size should be five times the number of research variables, which corresponds to the number of questions in the questionnaires In this thesis, the research model includes 7 variables and 21 major observation variables, indicating that the minimum required sample size to ensure the reliability of the research data is 5 times this number.
The study utilized convenient random sampling at Vinmart+ stores, ensuring a diverse range of respondents based on demographic characteristics Customers were randomly selected and interviewed immediately after their visit to the stores.
A total of 250 tickets were issued and collected immediately after the customer interviews After review and classification, 223 questionnaires were deemed adequately answered and suitable for data analysis This sample size is double the minimum recommended by Krejcie and Morgan (1970), ensuring reliability in the results.
Regarding the evaluation on the quality of the scale of research variables, the study used multiple-item scales ta measure each variable, so it used two methods of EFA
(lixploratory Factor Analysis) and Alpha Cronbach to evaluate the reliability of the seal
Exploratory factor analysis (EFA) is a statistical method used to assess the factor structure of a scale, which consists of specific questions in a questionnaire It helps summarize data and reveal the underlying structure of research variables EFA results highlight hidden variables (factors) and identify the questions that serve as scales for each factor Researchers must utilize statistical parameters to determine the number of factors to extract, decide which items to retain or discard, and evaluate the overall quality of the model.
The number of factors to extract is determined by the eigenvalue of each factor, which is calculated and ranked from highest to lowest.
‘The factors which have the eigen value Ingher than or equal to 1 will be retained (extracted)
The loading value of an item, influenced by various factors, determines whether it should be retained or discarded from the scale Typically, a threshold of 0.5 is used for this decision Items with a loading factor greater than 0.5 and associated with multiple factors are removed from the model, while those with a loading of 0.5 or higher linked to a single factor are retained.
When evaluating the quality of a scale using the Exploratory Factor Analysis (EFA) method, two key criteria are considered: (1) the explained variance rate of the data by the extracted factors, and (2) the loading values of the retained items on these factors A cumulative variance of 60% or higher from the extracted factors is deemed satisfactory, indicating a robust EFA model Additionally, loading values of 0.5 or higher are acceptable, while values of 0.7 and above are considered good, with loading values ranging from -1 to 1.
The Alpha Cronbach method assesses scale reliability by evaluating the convergence rate of a group of measurement criteria (questions) related to the same variable or factor in a study A higher Alpha Cronbach coefficient indicates a greater convergence rate among questions measuring the same variable, signifying increased scale reliability, and vice versa.
The Alpha Cronbach value ranges from 0 to 1, indicating the reliability of a scale A value closer to zero signifies lower reliability, while a value approaching one indicates higher reliability Typically, a threshold of 0.6 is employed in studies to evaluate the quality of a reliable scale (Hoang Trong - Chu Nguyen Mong Ngoc).
Researchers often evaluate the quality of Exploratory Factor Analysis (EFA) by examining the KMO and Bartlett’s Test of Sphericity This test assesses whether each variable retained in the EFA solution significantly loads onto a unique factor and checks for collinearity issues among items related to a factor A KMO value of 0.6 or greater is typically accepted, while a Bartlett’s Test significance level of less than 0.05 is considered acceptable by researchers.
After assessing the scale's reliability and removing unsuitable questions, we will utilize descriptive statistics to analyze customer feedback on service aspects This approach will involve calculating the mean and standard deviation for quantitative variables, as well as conducting frequency analysis for qualitative variables.
To test the hypotheses about the relationship between independent and dependent variables, the multiple linear regression method was applied
‘The multiple near regression was used to evaluate the effect of two or more variables (usually warned as independent variables or explanalory variables, variables
XI, X2, X3, ete.) on another research variable (usually named as dependent variable or explained variable - variable Y) General multiple regression model is described as follow:
Y al*XI+a29X2 ta3YX3+ tan*Xn+b
XI, X2, Nav are independent variables
Al, a2, ,an Regression coefficients corresponding to variables Xi, X2,
‘The following basic parameters are often used to evaluate the results of a multipte