Evaluating the retail service quality of cellphone supermarkets in ho chi minh city

This research uses the Retail Service Quality Scale RSQS model to examine the relationship between the retail service quality and its antecedents, including physical aspects, reliability

RESEARCH PROJECT

(BMBR5103)

EVALUATING THE RETAIL SERVICE QUALITY

OF CELL PHONE SUPERMARKETS

IN HO CHI MINH CITY

Advisor’s assessment

Advisor’s signature

ABSTRACT

Retail service quality plays an important role in enhancing customer satisfaction and customer loyalty, which significantly contributes to success of cell phone supermarkets Therefore, a research into factors affecting the retail service quality of cell phone supermarkets is necessary because the research finds solutions to enhance the level of retail service quality of cell phone supermarkets

This research uses the Retail Service Quality Scale (RSQS) model to examine the relationship between the retail service quality and its antecedents, including physical aspects, reliability, personal interaction, problem solving and policy in cell phone supermarkets in Ho Chi Minh City (HCMC), and evaluate the level

of retail service quality of cell phone supermarkets in HCMC With respect to research methodology, the research pursues positivism philosophy to have an objective view on researched subjects and uses deductive approach, survey strategy and quantitative method to achieve research objectives A technique of data collection is self-administered questionnaires which are delivered directly

by hand to 150 customers of select cell phone supermarkets in HCMC and collected later The research uses a technique of data analysis which is software

of SPSS 11.5 After conducting reliability test, factor analysis and multiple regression analysis, the research findings show that five factors, namely physical aspects, reliability, personal interaction, problem solving and policy have positive influences on the retail service quality of cell phone supermarkets

in HCMC Among the five factors, reliability has the strongest influence on the retail service quality of cell phone supermarkets in HCMC and physical aspects have the weakest one The research findings also reveal that the current level of retail service quality of cell phone supermarkets in HCMC is low The author proposes some recommendations based on the research findings to managers of cell phone supermarkets in HCMC to improve the factors influencing on the retail service quality and enhance the level of the retail service quality of cell phone supermarkets in HCMC

TABLE OF CONTENTS

ABSTRACT 2

TABLE OF CONTENTS 4

LIST OF TABLES 5

ABBREVIATION 6

Chapter 1: Introduction 7

1.1 Background of the study 7

1.2 Significance of the study 12

1.3 Overall research aim and individual objectives 12

1.4 Boundary of the study 13

1.5 Structure of the study 13

Chapter 2: Literature Review 15

Chapter introduction 15

2.1 Understanding of service quality 15

2.2 Dimensions of service quality 17

2.3 Factors influencing on retail service quality 18

2.3.1Understanding of retail service quality 18

2.3.2 The relationship between retail service quality and its antecedents 20

2.3.2.1 The relationship between physical aspects and retail service quality 20 2.3.2.2 The relationship between reliability and retail service quality 21

2.3.2.3 The relationship between personal interaction and retail service quality 22

2.3.2.4 The relationship between problem solving and retail service quality 22

2.3.2.5 The relationship between policy and retail service quality 23

2.4 Measurement of the level of retail service quality 24

Chapter summary 25

Chapter 3: Methodology 27

Chapter introduction 27

3.1 Research philosophy 27

3.2 Research approach 29

3.3 Research strategy 29

3.4 Research method 31

3.5 Methods of collecting data 31

3.5.1 Sources of data 31

3.5.2 Questionnaire 32

3.6 Sampling techniques 34

3.7 Technique of data analysis 35

3.8 Ethical Issues 36

3.9 Validity and reliability consideration of the research methodology 36

3.10 Limitations of the research methodology 36

Chapter summary 37

Chapter 4: Finding, Discussion and analysis 38

Chapter introduction 38

4.1 Overview of cell phone supermarkets industry in HCMC 38

4.2 Demographic information 38

4.3 Reliability test 40

4.3.1 Standards of reliability test 40

4.3.2 Reliability test of retail service quality dimensions 41

4.4 Factor analysis 47

4.4.1 Standards of factor analysis 47

4.4.2 Factor analysis of retail service quality dimensions 49

4.5 Research results based on multiple regression analysis 55

4.5.1 Understanding of multiple regression analysis 55

4.5.2 The relationship between retail service quality and its antecedents in cell phone supermarkets in HCMC 55

4.5.3 The most important factor affecting retail service quality in supermarket in HCMC 58

4.6 Research results based on descriptive analysis 60

Chapter summary 69

Chapter 5: Conclusion and Recommendation 70

Chapter introduction 70

5.1 A summary of the research process 70

5.2 Conclusions 70

5.3 Contributions of the study 73

5.4 Limitations and suggestions for further research 74

5.2 Recommendations 75

Chapter summary 76

LIST OF TABLES

Table 1.1 – Key data of HCMC

Table 2.1 – Definitions of service quality

Table 4.1 – Demographic information of customers

Table 4.2 – Reliability test results of dimensions of physical aspects

Table 4.3 – Reliability test results of reliability dimension

Table 4.4 – Reliability test results of personal interaction dimension

Table 4.5 – Reliability test results of problem solving dimension

Table 4.6 – Reliability test results of policy dimension

Table 4.7 – Structures of the retail service quality dimensions after implementing the reliability test

Table 4.8 – Results of factor analysis of physical aspects

Table 4.9 – Results of factor analysis of reliability

Table 4.10 – Results of factor analysis of personal interaction

Table 4.11 – Results of factor analysis of problem solving

Table 4.12 – Results of factor analysis of policy

Table 4.13 – List of variables after factor analysis

Table 4.14 – Model summary of retail service quality

Table 4.15 – Coefficients of retail service quality

Table 4.16 – Model summary of physical aspects

Table 4.17 – Coefficients of physical aspects

Table 4.18 – Model summary of reliability

Table 4.19 – Coefficients of reliability

Table 4.20 – Model summary of personal interaction

Table 4.21 – Coefficients of personal interaction

Table 4.22 – Model summary of problem solving

Table 4.23 – Coefficients of problem solving

Table 4.24 – Model summary of policy

Table 4.25 – Coefficients of policy

Table 4.26 – Descriptive results of the evaluation level of physical aspects

Table 4.27 – Descriptive results of the evaluation level of reliability

Table 4.28 – Descriptive results of the evaluation level of personal interaction Table 4.29 – Descriptive results of the evaluation level of problem solving

Table 4.30 – Descriptive results of the evaluation level of policy

Table 4.31 – Descriptive results of the level of retail service quality

Table 4.32 – Results of the retail service quality level by gender

Table 4.32 – Results of the retail service quality level by age

Table 4.34 – Results of the retail service quality level by marital status

Table 4.35 – Results of the retail service quality level by education level

Table 4.36 – Results of the retail service quality level by monthly salary

ABBREVIATION

AMMCC: Acceptance of most major credit cards

CACPA: Clean, attractive and convenient public areas

CFSTT: Customers feel safe in their transactions

COH: Convenient operating hours

EACDI: Employees’ ability of handing customer complaints directly and immediately

EBICC: Employees’ behavior instills confidence in customers

ECCC: Employees are consistently courteous with customers

EFSTR: Error-free sales transactions and records

EHKAQ: Employees have the knowledge to answer customer’s questions EGPSC: Employees give prompt service to customers

ENBRR: Employees are never too busy to respond to customers’ requests ETCCT: Employees treat customers courteously on the telephone

ETESP: Employees tell customers exactly when services will be performed GCIA: Giving customers individual attention

GDP: Gross Domestic Product

GRDI: Global Retail Development Index TM

H: Hypothesis

HCMC: Ho Chi Minh City

HQM: High quality merchandise

IAPST: Implementation ability of promises of doing something by a certain time

KMO: Kaiser-Meyer-Olkin Measure of Sampling Adequate

MBA: Master of Business Administration

MEA: Merchandise availability

MLEF: Modern-looking equipment and fixtures

PCP: Plenty of convenient parking

PIMS: Profit Impact of Marketing Strategies

PSRFT: Performance of the service right the first time

RSQS: Retail Service Quality Scale

SISPC: Sincere interest in solving problems of customers

SLECF: Supermarkets layout is easy for customers to find what they need SLECM: Supermarkets layout is easy for customer to move around

SOTCC: Supermarkets offer their own credit cards

SPSS: Statistical Package for the Social Sciences

VAPF: Visually appealing physical facilities

VAMSS: Visually appealing materials associated with cell phone

supermarkets services

CHAPTER 1

INTRODUCTION

1.1 Background of the study

 Context of the study

After Vietnam became an official member of World Trade Organization (WTO) in 2007, it has opened its retail market and has removed trade barriers to welcome foreign investors Fast pace growth in the Vietnamese retail market has made Vietnam become one of the world’s most attractive retail markets for multinational retailers

Vietnam was the world’s fourth most attractive retail market in 2007 (A.T Kearney, 2007) and quickly became the world’s most attractive retail market in 2008 with the highest Global Retail Development Index TM (GRDI) that was highly drawing interest from large foreign retailers around the world (see figure 1.1) The opening of the Vietnamese economy has encouraged global large retailers to invest their capital in the Vietnamese retail market With a recently deregulated retail market, a robust economy and a stable political base, Vietnam is attempting to replicate China’s economic success and is stealing the spotlight from the leaders in Asian retail markets, India and China (A.T Kearney, 2008)

Nowadays, there is a significant quantity of retail outlets in the Vietnamese retail markets, including over 50 cell phone supermarkets, lot of shopping centers However, the retail outlets still do not meet demand in a market of nearly 90 million people The retail market

in Vietnam increased by nearly 10 percent annually in Q1, 2015 (Vietnamplus, 2015)

Table 1.1 – Key data of Ho Chi Minh City

Source: Deloitte (2014)

 Reasons for selecting the research topic

Firstly, service quality plays an important role in business success of companies

The link between service quality and profits is neither easily understandable nor simple (Greising, 1994) Phillips, Chang and Buzzell (1983), and Buzzell and Gale (1987) who use the Profit Impact of Marketing Strategies (PIMS) database, find that superior service quality enhances business performance via market position

Terblanche (1998) recognizes that companies offering reliable and high quality services will have higher sales, lower cost and higher productivity and thus lead to higher profits than companies having low quality services This has been illustrated in figure 1.2

Figure 1.2 – Roles of service quality

Source: Terblanche (1998)

Service quality leads to increase retention and business from existing customers

Parasuraman, Zeithaml and Berry (1988), Fornell and Wernerfelt (1988), and Anderson and Sullivan (1993) recognize that there is a positive and significant relationship between customer perceptions of service quality and their purchase intention Rust, Zahorik and Keiningham (1995) indicate that service quality improvement leads to higher customer satisfaction and retention rate, greater revenue and market share, and yields greater profitability Reichheld and Sasser (1990) identify that an increase of 5 percent in customer retention increases profits from 25 to 85 percent Customer retentions positively affects profits through cost reductions, repurchase increases, willingness to pay from medium to high prices and positive word of mouth (Zeithaml, 2000)

A benefit of service quality is to spread positive word of mouth communication People

rely on positive word of mouth communication of their friends, relatives and colleagues to implement buying decisions rather than editorial and advertising (Danaher and Rust, 1996; Donaton, 2003; Khraim, 2011; Danaher and Rust, 1996; Kordupleski, Rust and Zahorik, 1993) Zemke and Schaaf (1990) determine that service leaders gain an average of 6 percentage of market share per year, while their poor service quality counterparts lose 2 percentage of market share per year

A company with high service quality has more opportunities of demanding high prices

Gale (1992) claims that businesses in the top quintette of service quality on average have

an 8 percentage higher price than their competitors Customers happy with a company are likely to increase their purchases of services or products even if prices of the services or products are high (Reichheld and Sasser, 1990; Zeithaml, 2000) Anderson (1996) recognizes that higher customer satisfaction of service quality leads to higher tolerance of price

High service quality reduces costs resulting from less redoing of the services High

service quality reduces costs related to replacing defective services and handling complaints (Fornell and Wernerfelt, 1988) Selling costs of existing customers are on average 20 percent lower than selling to new customers because companies must spend money on advertising to attract new customers It costs 5 times as much to obtain a new customer as to keep an existing customer (Peters, 1988) Heskett, Sasser and Schlesinger (1997) claim that the longer customers stay with companies, the lower the costs serve the customers

With high service quality, employees have higher morale and enthusiasm To have high

service quality, a retailer must provide training for employees, give the employees instrumental and emotional support, enpower the employees to enhance performance of delivering service quality When the employees have excellent knowledge of products and are empowered by their stores, they become more enthusiastic and zealous in their performance of delivering services (Cant, 2005)

High service quality leads to lower staff turnover According to Zemke and Schaaf

(1990), high service quality reduces recruitment costs because of lower staff turnover Employees who work in a high quality service company tend to be happier in their jobs and less likely to leave the company than companies whose services are poor (Schleslinger and Heskett, 1991) Employees of a company having high service quality are often loyal to the company and fervently implement services that lead to increases of sales and profits (Terblanche, 1998)

Secondly, customers have shopping habits in retail outlets, especially modern cell phone supermarkets in HCMC Customers pay more attention to product and service quality when their personal income increases Therefore, cell phone supermarkets in HCMC with high product and service quality will draw customers Currently, quality of products in most cell phone supermarkets in HCMC is equal; therefore, the cell phone supermarkets in HCMC consider delivery of high service quality as a competitive advantage in the fierce retail market (Ellram, Londe and Weber, 1999)

Lastly, cell phone supermarkets in HCMC with poor retail service quality have received

many complaints of customers, such as inconvenience of parking, quality of the products and poor product knowledge of employees The cell phone supermarkets will retain their

positions in the retail market by improving their retail service quality The level of the retail service quality of cell phone supermarkets in HCMC is still not high because many cell phone supermarkets in HCMC do not have an appropriate instrument to identify factors affecting the retail service quality Since the above reasons and the personal interest

in marketing section, the author decides to choose the topic of the study as follows:

“Evaluating retail service quality of cell phone supermarkets in Ho Chi Minh City”

1.2 Significance of the study

The research can help existing cell phone supermarkets in HCMC identify factors affecting their retail service quality to enhance their retail service quality and improve their competition positions

The research can help domestic and foreign investors who have intention of opening cell phone supermarkets in HCMC grasp factors affecting the retail service quality of a supermarket firmly to build the high level of the retail service quality

The research can help existing domestic and foreign managers of cell phone supermarkets and competitors such as shopping centers and convenience stores in HCMC pay more attention to dimensions of the retail service quality when they plan and implement marketing strategies

The research can test whether theoretical model of measuring the retail service quality that

is used in Western countries can be used in Vietnam, especially HCMC

1.3 Overall research aim and individual objectives

The overall research aim is to evaluate the retail service quality of cell phone supermarkets

in HCMC In order to achieve the overall research aim, the research must focus on four individual research objectives as follows:

- To deepen the knowledge of the concept and the dimensions of service quality

- To examine the relationship between the retail service quality and its antecedents in cell phone supermarkets in HCMC

- To explore the most important factor affecting the retail service quality of cell phone supermarkets in HCMC

- To evaluate the level of retail service quality of cell phone supermarkets in HCMC

1.4 Boundary of the study

The research only evaluates the retail service quality of cell phone supermarkets in HCMC because of limitations of research time Among the cell phone supermarkets in HCMC, the research only focuses on domestic cell phone supermarkets chains Among the domestic cell phone supermarkets, the author only chooses the three domestic cell phone supermarkets to evaluate the overall retail service quality of cell phone supermarkets in

HCMC because almost customers in HCMC often go shopping in three cell phone

supermarkets including The Gioi Di Dong FPT Shop and Hnam Mobile

1.5 Structure of the study

Chapter 1: Introduction

This chapter presents background of the study, main reasons for selecting the research topic, the overall research aim and individual research objectives, the boundary of the study and the structure of the study

Chapter 2: Literature review

This chapter mentions a theoretical basic of service quality that the researcher must take into consideration including the concept of service quality and the service quality dimensions In this chapter, hypotheses of the relationship retail service quality and its antecedents including physical aspects, reliability, personal interaction, problem solving and policy in cell phone supermarkets in HCMC are given and then a specific studying framework is built for the research

Chapter 3: Research methodology

This chapter indicates the research methodology which the author uses including research philosophy (positivism), research approach (deduction), research strategy (survey strategy) and research method (quantitative method) Moreover, details on a sampling technique (simple random sampling), and a technique of quantitative data analysis (software of SPSS 11.5) are presented In addition, validity and reliability considerations, limitations of the

research methodology and ethical issues are also discussed Technique used to collect the primary data from 150 customers of cell phone supermarkets in HCMC is questionnaire

Chapter 4: Findings, analysis and discussion

This chapter presents and analyses data collected from the survey strategy The hypotheses are proposed in chapter 2 are interpreted in this chapter Moreover, a comparison between findings of the research and the theories mentioned in chapter 2 is provided

Chapter 5: Conclusions and recommendations

This chapter states the main findings of the research, evaluates the degree to which the research meets research objectives and answers research questions, indicates areas for further research, suggest recommendations for improving retail service quality of cell phone supermarkets in HCMC

2.1 Understanding of service quality

Service quality is conceptualized as a customer’s overall impression of the relevant superiority or inferiority of services (Zeithhaml, Parasuraman and Berry, 1990) Czepiel, (1990), Grönroos (2000) and Hernon (2002) explain that service quality is the relationship between customers’ expectations for superiority services and their perceptions of services delivered Customers are satisfied a service when they perceive that the service meets or exceeds their expectations (Zeithaml and Bitner, 2003; Berndt and Brink, 2004; Parikh,

2006; Levy and Weitz, 2007) Zeithaml (1988) and Robinson (1999) indicate that service

quality is a customer’s attitude or overall judgment of the superiority or excellence of services Service quality is the ability to get desired services from a provider at the right price; therefore, customers ultimately want better value for their money, acceptable quality and improved services (Soita, 2012) Sasser, Olsen and Wyckoff (1978) indicate that service quality dwells more on a process of delivering a service than a service outcome Some other service quality definitions of some researchers presented in table 2.1 will support a deep understanding of service quality

Table 2.1 – Definitions of service quality

Fogli (2006)

“Service quality is a global judgment or attitude relating to a

particular service; the customer’s overall impression of the

relative inferiority or superiority of the organization and its

services Service quality is a cognitive judgment”

8

Jiang, Klein, Tesch and Chen (2003)

“Service quality is the comparison between what the

customers feel should be offered and what is actually

delivered”

7

Asubonteng, Mccleary and Swan (1996)

“Service quality is the difference between customer

expectations for service performance prior to the service

encounter and their perceptions of the service received”

6

Armstrong and Kotler (1996)

Service quality is the totality of characteristics and features

of a product or a service that satisfy stated and implied

needs of customers

5

Ghobadian, Speller and

“Service quality is the extent to which the service delivered

meets the customer’s expectations”

4

Lewis and Mitchell (1990)

Service quality is defined as the extent to which a service

meets or exceeds customer needs and expectations

3

Parasuraman, Zeithaml and Berry (1985)

“Service quality is the overall evaluation of a specific

service firm that results from comparing the firm’s

performance with the customer’s general expectations of

how firms in that industry should perform”

2

Lewis and Booms (1983)

Service quality is how well the service level delivered

matches customer expectations

1

Author Definition

No

2.2 Dimensions of service quality

It is more difficult for customers to assess quality of services objectively than quality of goods because services are intangible, heterogeneous and inseparable (Garvin, 1983; Kurt and Clow, 1998)

A technical quality strategy is effective if companies have enough capability to develop technical solutions not easily achievable by competitors Nowadays, techniques and technologies develop quickly, therefore, almost competitors can imitate technical solutions

in relatively short time (Williams and Buswell, 2003) In that case, a functional quality strategy is becoming important for companies to create positive service quality (Rajicic and Ciric, 2008)

Figure 2.3 – The Three-Component Model

Source: Rust and Oliver (1994)

The model indicates that three dimensions of service quality are service product (technical quality), service delivery (functional quality) and service environment The model signifies the importance of understanding customer expectations and ensuring service performance

to meet customer expectations Service environment includes the internal environment which focuses on organizational culture, and external environment which is physical

ambience of the service setting Biter (1992) highly evaluates the Three-Component model

because the service environment is an integral role in consumer service perception developments

Service quality

Service Product

Service Delivery

Service Environment

Brady and Cornin (1991) propose Hierarchical Approach model (see figure 2.4) The

model indicates that service quality has three primary dimensions and nine sub-dimensions: physical environment quality (ambient conditions in service setting, facility design, and social conditions in service setting), interaction quality (employees’ attitude, behaviour and expertise of delivering services) and outcome quality (waiting time, tangible evidence, and service encounter) The model is drawn from four service industries: fast foods, dry cleaning, photograph developing, amusement parks

Figure 2.4 – The Hierarchical Approach Model

Source: Brady and Cornin (1991)

Parasuraman, Zeithaml and Berry (1985) develop the GAP model to indicate important

activities of service organizations affecting customers’ perceptions of service quality The GAP model indicates five types of gaps that occur in a typical service encounter (see figure 2.5)

2.3 Factors influencing on retail service quality

2.3.1 Understanding of retail service quality

Service quality is an important strategic weapon in retail environments Service quality in retail outlets is different from service quality of product or service oriented companies

Service quality

Interactio

n quality

Physical environme

nt quality

Outcome quality

(Fisk, Brown and Bitner, 1993; Gagliano and Hathcote, 1994; Bell, Davies and Howard, 1997; Jones and Doucet, 2000; Finn and Kayande, 2004; Daskalopoulou and Patrou, 2005) because the retail outlets provide both goods and services for customers The retail outlets have impact on quality of services more than quality of products and consider service quality as a significant strategy of creating customers’ service quality perceptions (Dabholkar, Thorpe and Rentz, 1996)

Dabholkar et al (1996) develop Retail Service Quality Scale (RSQS) based on the

SERVQUAL model to measure retail service quality The model indicates that five factors

affecting retail service quality are physical aspects, reliability, personal interaction,

problem solving, and policy (see figure 2.7)

Figure 2.7 – The Retail Service Quality Scale (RSQS Model)

Source: Dabholkar, Thorpe and Rentz (1996)

The RSQS instrument has been a predominant method in measuring retail service quality because this model only employs performance-based measures, which possess high validity and reliability to capture customer perceptions of retail service quality and overcome

Retail service quality

Physical aspect

Problem solving Reliability Personal

confidence Sub-

dimensions

limitations of the SERVQUAL model (Das, Kumar and Saha, 2010) Therefore, in the research, the RSQS is used to examine the relationship between the retail service quality and its dependences in cell phone supermarkets

2.3.2 The relationship between the retail service quality and its antecedents

2.3.2.1 The relationship between physical aspects and the retail service quality

 Concept of physical aspects

Physical aspects of retail stores are physical facilities’ appearance and convenience provided to customers by the retail store’s layout (Baker, Grewal and Parasuraman, 1994) Physical aspects of retail stores include physical facilities, equipment and fixtures, materials related to retail stores’ services, public areas (restrooms and fitting rooms), and convenience offered to customers by the suitable layout of the physical facilities (Dabholkar et al., 1996)

 The relationship between physical aspects and the retail service quality

Physical aspects have two sub-dimensions, including appearance and convenience Customers are often attracted when physical facilities, equipment and fixtures, materials related to retail stores’ services (shopping bags, catalogues or statements), public areas (restrooms and facility rooms) of retail stores are modern, appealing and clean Physical aspects have greatly influenced the retail service quality (Dabholkar et al., 1996; Keillor, Hult, and Kandemir, 2004)

H1: Physical aspects have a positive relationship with the retail service quality in cell phone supermarkets

2.3.2.2 The relationship between reliability and the retail service quality

 Concept of reliability

Reliability of a retail store is a combination of keeping promises, having the availability of products, conducting error-free sales transactions and records, and implementing service right the first time and all next times (Parasuraman et al., 1988; Dabholkar et al., 1996)

 The relationship between reliability and the retail service quality

Reliability has two sub-dimensions: promises and doing it right (Dabholkar et al., 1996) Reliability of a retailer involves the availability of merchandise (Westbook, 1981; Newman, 2001) In the retail environment, an available product stock of retailers that is limited refers to lack of reliability of the retailers Morganosky (1997) claims that customers who shop at retail stores consider a variety of products as a main criteria to shop

at the retail stores Customer preferences are influenced by perceptions of product variety Therefore, more and more retailers are opening new stores with a large stock to offer a wide variety in their product range (Kahn and Lehmann, 1991; Broniarcyzk, 1998; Seiders and Tigert, 2000; Carpenter, 2008) A product stock outage of a store result in customers’ repudiation of purchasing its products (Zinn and Liu, 2001) and have negative effects on future patronage of customers, detrimental perceptions of customers and negative word of mouth (Grant and Fernie, 2008; Ladhari, 2008) Reliability is the ability to keep promises

of doing services or something, implement error-free merchandise transactions, provide products and services right the first time and all next times, meet deadlines, implement right records of products, and offer right information to customers (Newman, 2001; Dabholkar et al., 1996)

H2: Reliability has a positive relationship with the retail service quality in cell phone supermarkets

2.3.2.3 The relationship between personal interaction and the retail service quality

 Concept of personal interaction

Personal interaction is defined as employees’ consistently courteous attitude with

customers and even treat customers properly on the telephone, employees’ helpfulness (providing prompt services, telling exactly when service will be performed, responding to customers’ requests quickly, giving customers individual attention) and employees’ ability

to inspire confidence in customers (employees have knowledge to answer customers’ question, employees’ behaviour instil confidence into customers and customers feel safe in their satisfactions with the retailer) (Dabholkar et al., 1996)

 The relationship between personal interaction and the retail service quality

Employees are often considered as facilitators of a sales process that play an important role

in enhancing customers’ positive perceptions of the retail service quality The most important attributes of personal interaction are shop-assistant attitudes and treatment of customers (Gagliano, 1994; Gounaris, 2008) Darian, Tucci and Wiman (2001) emphasize the importance of shop-assistants’ knowledge regarding products and the importance of treating customers respectfully Moreover, if employees have ability to respond to customers’ requests quickly, offer prompt services, give customers individual attention and assist customers in finding and selecting products when customers require, the retail store will attract customers to shop at the retail stores (Sweeney, Soutar and Johnson, 1997; Jamal and Adelowore, 2008) Customers have positive perceptions of a retailer’s service quality when it has knowledgeable, courteous and helpful employees who inform exactly when service will be performed and make customers feel safe in their transactions with the store Small things such as smiling, greeting and establishing eye contact give customers a positive feeling about the store (Winsted, 1997)

H3: Personal interaction has a positive relationship with the retail service quality in cell phone supermarkets

2.3.2.4 The relationship between problem solving and the retail service quality

 Concept of problem solving

Problem solving of a retail store refers to employees’ ability of a retail store to handle

returns and exchanges, customers’ problems and complaints Problem solving of retail stores includes retail stores’ willingness to handle returns and exchanges, sincere and genuine interest in solving customers’ problems and complaints directly and immediately (Dabholkar et al., 1996; Swanson and Kellery, 2001; Vàzquez et al., 2001)

 The relationship between problem solving and the retail service quality

Dabholkar et al (1996) emphasize the importance of returning and exchanging products and the ways used by employees to solve customers’ complaints and problems If retailers

do not deal with problems and complaints effectively, service failures will result in customers’ dissatisfaction and anger, and other disastrous consequences (Change, Lee and Tseng, 2008; Hart, Heskett and Sasser, 1990; Kelley and Davis, 1994) Westbrook (1981) indicates that customers are interested in the ways that service providers use to settle customers’ problems and complaints Customers will have favourable perceptions of the retail service quality if retailers pay much attention to customers’ problems and have effective processes of solving the customer problems (Huang, 2009) A good system of problem solving will detect and solve problems quickly and prevent customers’ dissastisfaction (Lewis and Spyrakopoulos, 2001) Customers are satisfied if they easily return and exchange products that they bought (Mazursky and Jacoky, 1985) Customers are likely to repurchase when their complaints and problems are dealt with satisfactorily (Singh and Widing, 1981; Michel, 2001; Halstead and Page, 1992) Post-transaction service of retail stores builds customers’ favourable perceptions of service quality in a long term (Lindquist, 1974)

H4: Problem solving has a positive relationship with the retail service quality in cell phone supermarkets

2.3.2.5 The relationship between policy and the retail service quality

 Concept of policy

Policy of a retail store refers to decisions of the retail store related to supply of high quality

mechandise, convenience of operating hours and parking facilities, acceptance of main credit cards and supply of its own credit cards Service policies having empathy and understanding of customers are likely to have positive impact on customers’ perceptions of retail service quality (Dabholkar et al., 1996)

 The relationship between policy and the retail service quality

Customers prefer shopping retail outlets that convenience of operation hours (Kaufman, 1996) Sloan, Leone, Powers and McNutt (1984), and Steenkamp and Trijp (1989) recognize that customers are willing to pay more to purchase high quality products they need Farhangmehr, Marques and Silva (2000) and Brady and Cornin (2001) state that an

evaluation of retail service quality includes the evaluation of the performance of physical goods provided for customers The evaluation of the performance of the goods that are offered by retail stores includes the ability to stock a wide range of products, the freshness

of products such as meat, fruit and vegetables, the assortment of fresh produce and labelling brands of goods distinctly (Vàzquez et al., 2001; Bruhn and Grebitus, 2007) When a retail store offers a wide product assortment and the products have high quality, customers feel positive emotions such as pleasure, contentment, excitement (Yoo, Park and Maclnnis 1998; Thang and Tan, 2003) Mazursky and Jacoky (1985) indicate that customers assess the retail service quality of retail stores is a policy of accepting credit cards and providing their own credit cards Retail stores that have good facilities of parking, operating hours are more likely to secure favourable customer perceptions of the

retail service quality of the retail stores (Oliver, 1981; Thang and Tan, 2003)

H5: Policy has a positive relationship with the retail service quality in cell phone supermarkets

2.4 Measurement of the level of retail service quality

The RSQS model has been reliable and valid for measuring the retail service quality in many countries Mehta et al (2000) claims that the RSQS model is more applicable than other models to measure the retail service quality in hypermarkets or cell phone supermarkets

In the research, the RSQS is used to measure the level of retail service quality of cell phone

supermarkets offering mix of goods and services The RSQS model has five dimensions of

retail service quality, six sub-dimensions and 28 items The five dimensions of retail service quality are physical aspects, reliability, personal interaction, problem solving and policy and the six sub-dimensions are appearance and convenience, promises, doing it right; inspiring confidence and courteousness/helpfulness The 28 items of the RSQS model are indicated in appendix 4 Among these items, 17 items have been adopted from the SERVQUAL model while 11 items have been developed by Dabholkar et al (1996) The RSQS model measures the retail service quality through the 28 items with a 5-point

rating scale (1 = strongly disagree, 2 = disagree, 3 = neutral, 4 = agree and 5 = strongly agree) (Dabholkar et al., 1996)

To measure the level of retail service quality in cell phone supermarkets, the seventh

of retail service quality in cell phone supermarkets

Figure 2.8 includes the following seven hypotheses:

H1: Physical aspects have a positive relationship with the retail service quality in cell

Figure 2.8 – Theoretical framework of this research

CHAPTER 3 METHODOLOGY

Chapter introduction

This chapter presents research methodology that the research applies to achieve the

research objectives mentioned in chapter 1 This chapter includes main parts as follows: (1) research philosophy, (2) research approach, (3) research strategy, (4) research method, (5) methods of data collection, (6) technique of data analysis, (7) ethical issues, (8) validity and reliability considerations of the research methodology, (9) limitations and potential problems of the research methodology

3.1 Research philosophy

This research is the explanatory research because it establishes causal relationships between variables (Saunders, Lewis and Thornhill, 2009)

There are four research philosophies in management research, including positivism,

realism, interpretivism and pragmatism A research reflects the philosophic positivism then

the researcher has scientific or objective observation of a social reality and adopts the philosophical stance of the natural scientist (Levin, 1988; Gephart, 1999; Saunders et al., 2009) The positivism researcher is independent of the data and the positivism research is undertaken in a value-free way (Hatch, 1997; Guba and Lincoln, 1994) Phillips (1987) defined philosophic realism as the view that entities exist independently of human thoughts and beliefs or independently of theories about the entities Researches reflect interpretivism philosophies then the researchers adopt empathetic stances and understand the social reality from their subjective opinions (Kura, 2012) A pragmatism research applies mixed

or multiple method designs that the researcher adopts both objective and subjective opinions (Saunders et al., 2009)

According to Swanson (2005) and Kura (2012), there are three philosophical views: positivism, interpretivism and critical social science The philosophy of critical social science seeks to provide a historical understanding through the re-examination of

important events to surface unacknowledged forms of exploitation and domination (Newman, 1994)

In general, researchers recognize two major paradigms including positivism and interpretivism (Fisher et al., 2004; Saunders et al., 2007) It is important for any researcher

to know that there is not the best intrinsic research philosophy (Kura, 2012) It is best to choose a context-specific philosophy suitable for the research objectives and the complexities of the real world (Benbast, Goldstein and Mead, 1987) The researcher decides to follow the positivism philosophy because of the following reasons:

Firstly, positivist researchers generally seek out facts in terms of relationships among variables (Hume, 1955; Lewis, 1993) The objective of the research is to find the relationship between the retail service quality and its antecedents in cell phone supermarkets in HCMC The positivist position asserts credible data and facts gathered through direct observation and measured empirically using quantitative methods such as surveys and experiments, and statistical analysis (Blaikie, 1993; Hatch and Cunliffe, 2006; Eriksson and Kovalainen, 2008)

Secondly, findings of positivism research can be law-like generalizations similar to those findings produced by the natural and physical scientists (Mitchell, 2003) It is difficult to achieve by using interpretivism, which relies on subjective consciousness (Remenyi, Williams, Money and Swartz, 1998) The researcher prefers achieving objective findings which are reliable and valid to apply in practice Any other researcher wants to test the findings of the research again, they will obtain the same results

Lastly, interpretivism causes difficulties of data analysis for the author because of highly qualitative feature Moreover, findings of an interpretivism research are not reliability, generalisability and validity because of subjective assessment Although for the interpretivism research uses a relatively small sample, it takes a lot of time and resources to collect the qualitative data and there are difficulties in managing the process of research (Altinay and Paraskevas, 2008)

because of the following reasons:

Firstly, a research uses deductive approach that start from a theoretical position and

collects data to test the theories The author implements the research by beginning at a theory and then collecting data to verify the theory Moreover, Lewis (1993) claims that a research based on a positivist philosophy tends to apply deductive approach that a number

of propositions are generated through empirical verification

Secondly, deductive research can be quicker to complete, although time must be devoted to setting up the prior to data collection and analysis On the other hand, inductive research can be much more protracted Deduction can be a lower-risk strategy With induction approach, researchers have constantly to live with the fear that no data pattern is useful and

no theory will emerge (Saunders et al., 2009)

Lastly, a selection of research approach should be based on the research topic (Creswell, 1994) In fact, retail service quality is considered as a popular topic with large number of related theories Therefore, the author utilizes the valuable theory availability of the retail service quality for application to specific case of cell phone supermarkets in HCMC

3.3 Research strategy

There are seven research strategies in research: experiment, survey, case study, action research, grounded theory, ethnography and archival research (Saunders et al., 2009) Experiment owes much to the natural sciences and study causal links; whether a change in

an independent variable produces a change in a dependent variable (Hakim, 2000) Survey strategy is a representative selection from the population of a particular type Case study is used to explore a single phenomenon (the case) in a natural setting using different methods

to get in-deep knowledge (Biggam, 2008) Action research is used to solve or understand better the problem in the environment where the researcher is working (Cunningham, 1995) Grounded theory is a systematic set of procedures is used to develop inductively derived theory about phenomena (Strauss and Corbin, 1990; Goulding, 2002) Ethnography is emanates from the field of anthropology that uses socially acquired and shared knowledge to understand patterns of human activity (MacFarlane, 2004) Archival research analyses administrative records and documents as principal source of data (Saunders et al., 2009) The survey strategy is used in the research because of the following reasons:

Firstly, the survey strategy usually associated with the deductive approach The data that is collected from survey strategy can be used to suggest possible reasons for special relationships between variables and create models of these relationships (Saunders et al., 2009) Therefore, the researcher can examine the relationship between the retail service quality and its antecedents in cell phone supermarkets in HCMC through the survey strategy

Secondly, the researcher uses the survey strategy that has sampling is representative of the whole population at a lower cost than collecting the data for the whole population (Sauders

et al., 2009)

Lastly, the survey strategy is popular and is perceived as authoritative by people because it allows the collection of a large amount from a sizable population in a highly economical way The research strategy also allows easy comparison, explanation and understanding, and often use questionnaires to collect the quantitative data that are standardised (Saunders

et al., 2009)

3.4 Research method

There are two quantitative and qualitative methods in business and management research These two methods differ from both data collection techniques and data analysis procedures The quantitative method has data collection techniques (such as a questionnaire) or data analysis procedures (such as graphs or statistics) that generates or uses numerical data On the other hand, the qualitative method has data collection techniques (such as an interview) or data analysis procedures (such as categorizing data) that generates or uses non-numerical data (Saunder et al., 2009) Qualitative research involves collecting information about personal experiences, introspection, interactions and attitudes and behavior which are significant and meaningful in peoples' lives (Denzin and Lincoln, 1994) It is impressionistic rather than conclusive and it probes rather than counts Moreover, it is useful to observe and reflect on the complexity of consumer behavior and

attitudes (Crisp, 1957) Quantitative research answers what and how questions (Biggam, 2008), whereas the what, how and why questions are left to qualitative research (Bogdan

and Biklen, 1992) Quantitative method is used in the research because of the following

reasons:

Firstly, positivism focuses on a quantitative method used to test and verify hypotheses Positivism philosophy and deductive approach tend to rely on quantitative method to get objective inferences

Secondly, the research uses the survey strategy that often relate to quantitative research Moreover, the research uses questionnaires as the data collection technique and descriptive statistics in data analysis procedures that generates and uses numeric data

Lastly, quantitative method refers to researches that are concerned with measurements

(Biggam, 2008) The research’s individual objectives are concerned with the measurements

of how factors affecting service quality and the level of service quality in cell phone supermarkets in HCMC

3.5 Methods of data collection

3.5.1 Sources of data

 Secondary data

Secondary data is data which has been previously collected by other researchers for other

purposes (Saunders et al., 2007) There are three sub-groups of secondary data: documentary secondary data, survey-based secondary data and secondary data complied from multiple sources (Saunders et al., 2009) Using the secondary data has some advantages Firstly, using secondary data saves time and money, and almost secondary data is informed by expertise and professionalism (Saunders et al., 2009) Secondly, the collection of available secondary data does not face difficulty of geography and temporal problem (Srivastava and Rego, 2011) Lastly, secondary data already exist; therefore, researchers can evaluate the data prior to use (Stewart and Kamins, 1993) However, users

of secondary data do not participate in the planning and execution of the data collection process; therefore, they do not know how well the process is validated (Saunders et al., 2009)

The researcher collects secondary data from books, journals, magazines, electronic books, electronic journals, reports, and other sources

 Primary data

Primary data is a directly collection of a researcher through techniques of data collection such as interviews and questionnaires (Srivastava and Rego, 2011) Primary data is gathered by researchers with a specific goal in mind if information of the secondary data differs from their research objectives or questions

The author collects the primary data through self-administered questionnaires, in particular the type of delivery and collection questionnaires The delivery and collection questionnaires are the self-administered questionnaires that will be delivered directly by hand to each respondent and collected later (Saunders et al, 2009)

3.5.2 Questionnaire

Questionnaires tend to be used for descriptive or explanatory researches However, these

two purposes have different research design requirements (Gill and Johnson, 2002) The

descriptive researches use questionnaires to collect data to identify and describe the

variability in different phenomena In contrast, the explanatory researches use questionnaires to collect data to examine and explain relationships between variables (Saunders et al, 2009) The explanatory research use questionnaires to collect data to examine and explain relationships between the retail service quality and its antecedents in cell phone supermarkets in HCMC

There are two types of questionnaires including self-administered questionnaire and interviewer-administered questionnaire The self-administered questionnaire is usually completed by the respondents In contrast, the interviewer-administered questionnaire is recorded by an interviewer based on each respondent’s answers (Saunders et al., 2009) The researcher chooses the self-administered questionnaire because of its following advantages which are claimed by Cargan (2007):

Firstly, when the researcher uses a random sample, the self-administered questionnaire can provide a comprehensive view of the attitudes, beliefs and values of the larger population with a smaller sampling-range error

Secondly, the questionnaire is anonymous; therefore, it encourages openness of customers

to express their real answers on even personal and sensitive topics Moreover, the questionnaire is especially useful when it is unethical to observe behavior directly

Thirdly, the questionnaire is standardized instructions, wording and the order of questions that produce more uniform and valid results

Fourthly, respondents are not under pressure to respond immediately as interview The questionnaire requires less skills, sensitivity and aids to administer than interview The questionnaire reaches more people in a relatively short time and is a very efficient means

of collecting data at low cost

The self-administered questionnaire includes 39 questions (see figure 15) Questions in the questionnaire are closed questions and Likert scale questions Closed questions are

questions that limits respondents with a list of answer choices from which they must choose to answer the questions (Dillman, Smyth and Christioan, 2009) Likert scale

questions are questions that format a psychometric response scale to obtain respondents’ degree of agreement with a statement or set of statements (A Burns and R Burns, 2008) The Likert scale questions format a five-point scale including ‘Strongly disagree’,

‘Disagree’, ‘Neutral’, ‘Agree’ and ‘Strong agree’

Table 3.1 – Structure of self-administered questionnaire

When designing the questionnaire, the researcher considers the wording and order of individual questions carefully to ensure collection of consistent and accurate data The questionnaire is pre-tested on a small number of respondents to assess the validity and reliability of the questions in the questionnaire The sample respondents must be similar to the target respondents of the survey When delivering questionnaires to respondents, the researcher introduces the questionnaires carefully to the respondents to ensure a high response rate (Foddy, 1994; Sauderns et al., 2009)

Demographic information

Type of question Question

Information Hypothesis

sampling and non-probability sampling The probability sampling includes simple random sampling, stratified sampling, cluster sampling, systematic sampling Simple random sampling is where a researcher selects a random sample of a population Stratified sampling is where a researcher break down the researcher’s target population into groups and then take samples from each of the groups Cluster sampling is where a researcher breaks down the researcher’s target population into clusters (or groups), and the researcher selects random samples from each of clusters Systematic sampling a researcher takes a sample of the researcher’ target population at regular intervals The non-probability sampling includes judgment sampling, quota sampling and convenience sampling Judgment sampling is a researcher chooses sampling items depends exclusively on the discretion of the researcher Quota sampling is a researcher decides beforehand the type and number of members that the researcher intends sampling Convenience sampling is a researcher selects haphazardly those cases that easiest to obtain for the researcher’s sample and is convenient to the researcher (Sharma, 2005)

In the research, simple random sampling is used to answer the research questions and objectives because it easy to analyze data and compute error and the researcher only need

to have minimal advance knowledge of target population (Zikmund and Babin, 2007) Moreover, probability sampling is most commonly associated with a survey research strategy (Saunders et al., 2009)

Hair, Anderson, Tatham and Black (1998) claims that appropriate sample size is from 100

to 150 Therefore, the researcher selects the sample size of the research is 150 with simple random sampling technique The researcher deliveries self-administered questionnaires by hand to 150 customers at three select cell phone supermarkets (Coopmart, Maximark, BigC) in HCMC and collect again

3.8 Technique of data analysis

SPSS (Statistical Package for the Social Sciences) is a statistical software package for entering, storing and analyzing various types of data and constructing graphs, tables and charts (Plume, 2003) In particular, SPSS 11.5 is used to analyze data through four steps: reliability test with Cronbach’s alpha, factor analysis, multiple regression and descriptive

analysis Cronbach’s alpha is a commonly employed index of reliability test (Tavakol and Dennick, 2011) A method of statistical analysis called Factor Analysis is used to identify the dimensions of a test (Tate, 2003; Burns and Grove 2005) Statistical technique called

Multiple regression is used to examine how multiple independent variables are related to a

dependent variable (Higgins, 2006)

3.9 Ethical issues

Key ethical issues occur during a research process including privacy of participants, volunteer of participation, information confidentiality collected from individuals and their anonymity, consent and deception of participants, influences on participants of the research project, and behavior of a researcher (Fowler, 2002; Bryman and Bell, 2007; Saunders et al., 2009) The researcher gets permission for respondents before collecting data from them The researcher designs questionnaires that do not require to fill in names of respondents The data gathered from survey is used solely in the academic dissertation The researcher keeps all privacy information of the participants confidentially

3.10 Validity and reliability considerations of the research methodology

Validity and reliability are two fundamental elements in the evaluation of a measurement instrument Validity is concerned with the extent to which an instrument measures what it

is intended to measure (Punch, 1998; Tavakol, Mohagheghi and Dennick, 2008) Reliability refers to the extent to which data collection techniques or analysis procedures yield consistent findings (Zikmund, 2000; Cooper and Schindler, 2003)

The research evaluates data reliability through Cronbach’s alpha coefficient (Cronbach, 1951) The researcher follows the positivism philosophy that generates generalization and external validity of research findings (Golafshani, 2003) The design of questionnaires is based on the contents of the RSQS scale have content validity (Caro and Garcia, 2007) Moreover, the researcher uses factor analysis to demonstrate construct validity

3.11 Limitations of the research methodology

The research methodology that is chosen by the researcher has some limitations Firstly, the deduction approach has tendency to construct a rigid methodology that hardly permits alternative explanations of what is going on Secondly, the data collected by the survey strategy is unlikely to be as wide-ranging as the data collected by other strategies because there is limit to the number of questions that any questionnaire can contain (Saunders et al., 2009) Thirdly, the quantitative method does not give a deeper understanding of the research subject than qualitative research can give (Duffy, 1986) Fourthly, the research only uses self-administered questionnaires to collect data It may be better to link questionnaires with other techniques, such as semi-structured and in-depth interviews Lastly, simple random sampling is best used only when having an accurate sampling frame that lists the entire target population However, the researcher does not have the sampling frame that can lead to large sampling-error (Zikmund and Babin, 2007)

Chapter summary

In the research, the positivism philosophy, deductive approach, survey strategy and quantitative method are used to test whether theories of retail service quality applied in western countries can be used in Vietnam Moreover, the researcher uses simple random sampling and questionnaires to collect data The researcher implements 150 questionnaires

of delivery and collection by hand Data collected from questionnaires is analyzed by the software of SPSS 11.5

of some unfinished questions Therefore, information in 47 questionnaires is suitable for data analysis The researcher uses SPSS 11.5 for processing the primary data Contents of this chapter 4 include: (1) overview of cell phone supermarkets industry in HCMC, (2) demographic information, (3) reliability test, (4) factor analysis, (5) results of the research based on multiple regression analysis and (6) results of the research based on descriptive analysis

4.1 Overview of retail market in HCMC

Vietnam was the world’s most attractive retail market in 2008 (A.T Kearney, 2008) but its position in turn reduced the world’s fourteenth most attractive one in 2010 (A.T Kearney, 2010) and the world’s twenty-third most attractive retail market in 2011 (A.T Kearney, 2011) Moreover, Vietnam was no longer one of the countries which have the world’s most attractive retail markets in 2012 (A.T Kearney, 2012)

HCMC is a place where foreign retailers and Vietnam’s largest domestic retailers operate Domestic retailers face a rising competition with foreign rivals who have achieved great success in the retail market in HCMC (Deloitte, 2012) Overview of the retailers and detail information of the fierce competition between them in the retail markets in HCMC is presented in appendix 1

4.2 Demographic information

Table 4.1 – Demographic information of customers

(Source: Appendix 7)

In terms of gender, male makes up 79.6% of the total number of customers while female makes up 20.4% These figures exactly reflect that men is often interested in digidal products in general and cell phone in particular than women in Vietnam In terms of age, most respondents are customers aged 40 and under, make up 83% This means that customers of cell phone supermarkets in HCMC are young people In respects of marital status, the majority of the respondents are married people with 61.2% and 20.4% of

100.020.4

30

Over VND 15 million

79.652.4

77

From VND 7 million to VND 15 million

27.227.2

14Postgraduate

90.540.1

59University education

50.336.7

54College

13.613.6

20Under college

Education

Level

100.018.4

27Other

81.661.2

90Married

20.420.4

30Single

Marital

Status

100.017.0

25Over 40

83.036.7

54From 31 to 40

46.332.7

48From 21 to 30

13.613.6

20Under 21

Age (years

old)

100.079.6

117Male

20.420.4

30Female

Gender

Cumulative Percent (%)

Valid Percent

Frequency Item

Demographic

information