The influence of employee service on positive word of mouth and repurchase intention in vietnam supermarket sector

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business --- Nguyen Duy Tan The influence of Employee Service on Positive Word of Mouth and Repurchase Intention in

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-

Nguyen Duy Tan

The influence of Employee Service

on Positive Word of Mouth and Repurchase Intention

in Vietnamese supermarket sector

MASTER OF BUSINESS (Honours)

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-

Nguyen Duy Tan

The influence of Employee Service

on Positive Word of Mouth and Repurchase Intention

in Vietnamese supermarket sector

ID: 20110053

MASTER OF BUSINESS (Honours)

SUPERVISOR: NGUYEN HUU LAM

Ho Chi Minh City - 2014

I would like to express my deep gratitude to Mr Douglas Foster for supporting online journal articles I wouldn’t have enough academic materials to write chapter two without his help He was not only a great teacher but also a good friend to me I am truly grateful to him for being my lecturer

Also, I want to express my thanks to my classmates, Nguyen Thi Tuyet Oanh and Thai Van Trung Hieu They did supported me whenever I needed them Honestly, if they hadn’t been my friends, I couldn’t have finished my thesis in this year

Finally, I would like to thank all of participants in this research, especially in-service training students of ISB Thanks a lot for their precious time to join the surveys of this research

ABSTRACT

Supermarket sector have been one of the most attractive field of Vietnamese economy

in the last ten years The success of a supermarket mainly depends on customer repurchase intention and positive word of mouth that the supermarket gains from current customers Employee service and customer satisfaction are critical factors which impact on repurchase intention and word of mouth Nevertheless, little research has investigated the relationship of those concepts This research examines those relationships Using a data set from a sample of 175 consumers, we found that employee service influences on customer satisfaction and customer satisfaction impacts on both repurchase intention and positive word of mouth These findings suggest that in order to accomplish the success of a supermarket, we must improve employee service Once we increase employee service, customer satisfaction is increased It influences repurchase intention and positive word of mouth In short, employee service is a very important factor that supermarket managers need to

improve

Keywords: Customer repurchase intention, positive word of mouth, employee service

and customer satisfaction, supermarket

TABLE OF CONTENTS

CHAPTER 1: INTRODUCTION 1

1.1 Research background 1

1.2 Research problem 2

1.3 Research questions 4

1.4 Research scope 4

1.5 Research methodology 4

1.6 Research contribution 5

1.7 Thesis structure 6

CHAPTER 2: LITERATURE REVIEW AND HYPOTHESES 8

2.1 Introduction 8

2.2 Employee Service 8

2.3 Positive Word of Mouth 10

2.4 Repurchase intention 11

2.5 Customer satisfaction 12

2.6 Hypotheses 13

2.7 Summary 16

CHAPTER 3: METHODOLOGY 17

3.1 Introduction 17

3.2 Research process of this study 17

3.3 Measurement scales 20

3.4 Qualitative Research 21

3.4.1 The purpose of this qualitative research 21

3.4.2 Sample of this qualitative research 22

3.4.3 The conduct of this qualitative research 22

3.4.4 The outcome of this qualitative research 23

3.5 Sample and data collection of pilot survey and main survey 24

3.5.2 Data collection 25

3.6 The results of Pilot Survey 25

3.6.1 Reliabilty Analysis - Cronbach’s alpha Testing 25

3.6.1.a Employee Service testing 27

3.6.1.b Customer Satisfaction testing 28

3.6.1.c Positive Word of Mouth testing 28

3.6.1.d Repurchase Intention testing 28

3.6.2 Exploratory Factor Analysis (EFA) 29

3.7 Summary 31

CHAPTER 4: DATA ANALYSIS AND RESULTS 33

4.1 Introduction 33

4.2 Sample Characteristics 33

4.3 Confirmatory factor analysis (CFA) 36

4.3.1 CFA of Employee Service (items: es1, es2, es3, es4, es5, es6) 36

4.3.2 CFA of Customer Satisfaction (items: cs2, cs3, cs4, cs5) 37

4.3.3 CFA of Positive Word of Mouth (items: wm2, wm3, wm4, wm5, wm6) 38

4.3.4 CFA of Repurchase Intention (items: ri1, ri2, ri3, ri4, ri5) 39

4.4 Saturated Model 40

CHAPTER 5: CONCLUSION, IMPLICATION AND LIMITATION 46

5.1 Conclusion 46

5.2 Implication 48

5.3 Limitation and future research 49

REFERENCES 51

Appendix 1: Qualitative result – Table 3.1 55

Appendix 2: Pilot survey results – EFA first time running 57

Appendix 3: Pilot survey results – EFA fifth time running (last time) 59

Appendix 4: The results of covariance and correlation 60

Appendix 5b: Questionnaire in English 65

LIST OF TABLES Table 3-2: Reliability result of pilot survey 26

Table 3-4 Pattern Matrixa 30

Table 4-1: Descriptive Statistics 33

Table 4-4: Regression Weights: (Group number 1 - Default model) 42

Table 4-5: Standardized Regression Weights: (Group number 1 - Default model) 43

LIST OF FIGURES Figure 1: Conceptual Model 15

Figure 2: Research Process 19

Figure 3: Result of Employee Service CFA 37

Figure 4: Result of Customer Satisfaction CFA 38

Figure 5: Result of Positive Word of Mouth CFA 38

Figure 6: Result of Repurchase Intention CFA 39

Figure 7: Result of Saturated Model 41

Figure 8: Structural Results (Standardized estimates) 44

CHAPTER 1: INTRODUCTION

In recent years, the Vietnamese retail market has developed significantly in comparison with previous decades According to IIB’s analysis on November 2012, sales in the retail industry had been increasing on an average of 27% per year from

2005 to 2011 International retailers, such as Big C, Metro, Lotte Mart, have come to Vietnam Coop Mart, a domestic retailer, has also expanded very quickly Also, retailing continues to transform Vietnamese economics with domestic consumption as

a primary focus Additionally, retailing has enabled the opening of doors to international investors because of the young population and the continuously urbanizing process This trend should favour continued growth in retailing over the long term (A.T Kearney, cited by Nguyen, 2010)

Despite the fact that Vietnam has fallen from first place in 2008 to 6th place in 2009, 14th in 2010, 23rd in 2011, and 32nd in 2012 according to the annual reports of Global Retail Development Index, with improved growth forecasts in both GDP and disposable income, Vietnam still remains an attractive market for global retailers Furthermore, according to Vietnam’s WTO commitments, effective January 11, 2015, Vietnam has to allow the establishment of 100% foreign-invested retail organizations Casino, owner of the Big C supermarket chain, has developed its number of supermarkets in Vietnam to 24 Casino plans to open five supermarkets and shopping centres annually over the next three years Meanwhile, Germany’s Metro Cash & Carry Vietnam now operates 19 stores nationwide, a number expected to rise to 30-35 over the next three to five years In short, the Ministry of Industry and Trade estimates

that by 2020, Vietnam would host some 1,200 to 1,300 supermarkets, and more than

300 shopping centres (Nguyen, 2013)

Apparently, the Vietnamese retail market is very competitive and is set to explode to develop in the next years

Theoretically, retailers have many choices to implement strategies attracting consumers to come to their supermarkets and spend their money on their goods and services; for instance, they are strategies of promotion, service and price However, the answer for efficiency of those strategies is not really clear in Vietnamese context The truth is not everyone spends money when they come to these shopping places Consumers who buy at a store one time doesn’t mean that they will surely buy something in the future Some of them will buy, some will just look at products and not buy, some will never come back, etc Some will talk to others about the supermarket in a favourable way while others will talk negatively about their shopping experience There are plenty of things that could affect the success of a supermarket Retailers need to understand their customer attitudes and behaviours in order to come

up with appropriate strategies In the international academic arena, there are many research projects related to these issues It is about four concepts: repurchase intention, word of mouth, employee service and customer satisfaction

Recently, in the past four years, there were a lot of complaints from consumers to employee of supermarkets in Vietnam These complaints have been printed in the newspaper Supermarket managers had to admit that their employees were wrong and would be punished However, these incidents have influenced future customer

behaviour This influence needs more research in order to show its importance to those managers who are in charge of planning strategies for supermarkets This study focuses on observing the important role of employee service on related concepts mentioned above

Customer repurchase intention is critical to a store’s profitability (Jones and Sasser, cited in Kuo, Hu & Yang, 2013, p.170) Therefore, the retailer can earn repurchase intention of its customers by providing the customer what they want in terms of products and services

Katz and Lazarsfeld (1955) believed that word of mouth (WOM) was seven times more effective than newspaper ads while Day (1971) estimated that WOM was nine times more effective than advertising in changing consumer attitudes, and Morin (1983) showed that “other people’s recommendations” were three times more effective in terms of stimulating purchases of over 60 different products than was advertising (cited by Goyette et al., 2010)

Yoo et al (as cited in Nguyen, 2011) found that personal service has a direct effect on consumer in-store emotion and indirectly creates consumer store attitude Retailers easily lose customers to their competitor because of doing poorly in this area of providing service

Anselmsson (2006) supplemented that satisfaction is a crucial issue for both customer and retail management (cited in Theodoridis and Chatzipanagiotou, 2008)

Due to these important roles mentioned above, it is now necessary to do research on these four concepts that contribute to the overall study in the Vietnamese retail industry

- Does Employee Service have a direct impact on Positive Word of Mouth?

- Does Employee Service have a direct impact on Repurchase Intention?

- Does Employee Service have an impact on Customer Satisfaction?

- Does Customer Satisfaction have an impact on Positive Word of Mouth?

- Does Customer Satisfaction have an impact Repurchase Intention?

According to GfK retail census 2010, Ho Chi Minh City contributed 35% of modern trade retail sales (cited in Nguyen, 2011, p 4) This study concentrates on those supermarkets in Ho Chi Minh City, the biggest city and commercial centre of Vietnam It investigates seven supermarkets which are located in Ho Chi Minh City: Coop Mart, Maximark, Big C, Lotte, Metro, Citimart and Vinatex mart Respondents

in this research are those shoppers who live in Ho Chi Minh City and are more than 18 years old

Consequently, the result of this study may not be the typical result of the general Vietnamese market

The study consists of 3 phases: the qualitative research, the pilot survey and the main survey The qualitative research is carried out by in-depth interviews It is to test the items in order to appropriately apply to the Vietnamese market The pilot survey is leads to data which is used for Cronbach’s Alpha and EFA to test the scales It is undertaken by handing out hard copies to participants The main survey results from the data which is used for CFA to test the scales again and for SEM to test the hypotheses It is conducted by handing out hard copies and sending emails Detail of these researches is written in chapter 3 of this paper

‘Antecedents of Shopper Loyalty in the Vietnamese Supermarkets’ in 2012, etc

However, these studies haven’t mentioned Word of Mouth concept, which plays important roles in a successful retail business This study investigates the impact of employee service and customer satisfaction on positive word of mouth As a result, it gives retail managers alternative ways to do marketing outside of 4Ps strategies When 4Ps strategies are not different from competitors or are too expensive, improving service quality or customer satisfaction is a good choice to do marketing Positive word of mouth is an effective tool in expanding the brand and increasing revenue Even though there are a lot of researches studying shopper loyalty and loyalty involving repurchase intention, the investigation of customer repurchase intention still contributes to the academic side of the study It updates the changes in Vietnamese shopper attitude since the time after those previous researches Moreover, repurchase intention definition is also wider than loyalty definition in the aspect of a shopper Repurchase intention includes the shoppers who are not loyal to a shop but willing to purchase again in that shop This kind of shopper accounts for a significant volume of sales turnover Therefore, the study provides another view of shopper attitude and then, retail managers have more information to make logical decisions

This thesis is organized in five chapters as follows:

Chapter 1 introduces briefly about the research background and states the research problem Based on thiss, the research question is provided Research scope, methodology and contribution of this study are clearly stated

Chapter 2 provides literature review of the four concepts in order: Employee Service, Positive Word of Mouth, Repurchase Intention, and Customer Satisfaction While the

definitions are reviewed, the relationships are also concluded based on previous academic researches

Chapter 3 explains methodology in detail It presents the process of this study, sample

of respondents, collection method Also, it gives academic reasons why these particular methods were chosen Furthermore, it includes results and analysis of the qualitative research

Chapter 4 reports the results of the pilot survey as well as the main survey It gives detailed analyses of Cronbach’s alpha, EFA, CFA and SEM test Finally it concludes the relationships between the four concepts

Chapter 5 summarizes the findings and concludes the research model based on the results in chapter 4, then gives implications to retail managers Finally, the limitations

of this study are clearly stated and future researches are suggested

CHAPTER 2: LITERATURE REVIEW AND HYPOTHESES 2.1 Introduction

Chapter 1 has pointed out four concepts needed to be reviewed: Employee service, positive word of mouth, repurchase intention, and customer satisfaction In this paper, customer satisfaction, positive word of mouth and repurchase intention are reviewed

by international previous researches Employee service is based on both international and Vietnamese researches After reviewing literature of those concepts, relationships

of them are analysed and predicted by findings of those previous researches

2.2 Employee Service

According to Martineau (cited in Nguyen, 2011), employee service is described as sales personnel service Shoppers have randomly evaluated the sales personnel in their regular purchases at some retailers

Lindquist (1975) stated that employee service is one critical part of store service (cited in Nguyen, 2011) In order to clearly define employee service, the service quality of a store needs to be reviewed

The firm’s ability to create and provide a high level of quality service is a key to sustaining competitive advantages The intangibility nature of service, however, makes it hard to set standards (Yoo and Part, 2007, p.911) That explains the truth about how service quality has been discussed over the past decades During these decades arguing about service quality, SERVQUAL of Parasuraman is the most widely-known scale of service quality in the world (Siu and Cheung, 2001; Yoo and Park, 2007; Ganguli and Roy, 2010; Nguyen and Nguyen, 2011) SERVQUAL

consists of 5 dimensions: tangibles; reliability; responsiveness; assurance; empathy (cited by Ladhari, 2009, p 174)

However, service quality is not the same in different kinds of service and different markets (Nguyen and Nguyen, 2011) In the international retail industry, there are three researches (in USA, Hong Kong, and Singapore) which thoroughly studied the service quality concept Dabholkar et al (1996) developed a scale named the Retail Service Quality Scale It includes five dimensions: physical aspects; reliability; personal interaction; problem solving; policy (as cited in Siu and Cheung, 2001, p 89) Later on, Mehta et al (2000) studied in Singapore and revealed a modified scale that included 5 dimensions: service personnel; physical aspects; merchandise; confidence; and parking After that, Siu and Cheung (2001) applied the Dabholkar model to the Hong Kong retail market and proposed 6 dimensions of retail service quality: personal interaction; policy; physical appearance; promises; problem solving; and convenience

In the details, Dabholkar defined that “personal interaction” also involved two dimensions: service personnel inspiring confidence, trust and being courteous/helpful Helpfulness/courteousness referred to the friendliness of the store personnel and the ability to be of help when needed (cited in Mehta, 2000) Dabholkar also defined

sub-“Problem solving” that employees are trained to handle potential problems, such as customer complaints, returns and exchanges (cited in Siu and Cheung, 2001) Siu and Cheung explored more dimensions, but it is still the same definition of “problem solving” and “personal interaction”, whereas Mehta collected “problem solving” and

“personal interaction” into one dimension “Service personnel”, which is service related to personnel

In the context of Vietnam, Nguyen and Nguyen (2003) found all significant dimensions of service quality in all aspects of a Vietnam supermarket, they are 5 dimensions: merchandise, service capability of employees, display of goods, store layout, safety of store Like Mehta (2000), the dimension of “service capability of employees” is the only one which concerns employees, but it is more appropriate for future Vietnamese researches because it is in the same context Service capability of employees was defined as “the capability, personality, and attitude of supermarket employees in servicing customers” (Nguyen and Nguyen, 2003) That is the definition

of “Employee Service” in this study

2.3 Positive Word of Mouth

Word-of-mouth (WOM) is probably the oldest means of exchanging opinions on various goods and services offered by markets (Goyette et al., 2010, p.6) The extremely important role of WOM was confirmed by many researchers long time ago: Katz and Lazarsfeld (1955), Day (1971) and Morin (1983) (cited by Goyette et al., 2010)

WOM has been recognized as an important factor influencing consumer making (Xuehua Wang, 2011) In today’s virtual arena, the power of word-of-mouth has grown exponentially (Goyette et al., 2010) Apparently, retailers have effective WOM from current customers, they can easily and cheaply win new customers

decision-WOM was defined as the informal communication to evaluate products/services between private parties (Anderson, 1998, cited by Xuehua Wang, 2011), excluding

formal contacts and/or communications between consumers and a firm such as complaints, promotions, and seminars Typically, WOM is either extremely positive

or abominably negative, together with vivid and memorable experiences, recommendation, or complaints and rumor in the case of negative WOM (Anderson, 1998; Herr et al., 1991, cited by Xuehua Wang, 2011)

(Goyette et al., 2010, p.9) summarized WOM as “a verbal informal communication occurring in person, by telephone, email, mailing list, or any other communication method regarding a service or a good”

In 2001, Harrison-Walker (as cited in Goyette et al., 2010) focused on four aspects of WOM: (1) frequency, (2) number of contacts, (3) detail, and (4) word-of-mouth praise Further refinement of this measurement scale led Harrison-Walker to retain only two primary WOM dimensions: word-of mouth praise with two items and word-of-mouth activity with four items Goyette et al (2010) also reviewed that researchers verified whether conversations were positive or negative, or whether they reflected satisfaction or dissatisfaction with respect to a product or a service The dimension

“positive valence” reflects praise, while “negative valence” remains to be explored Furthermore, File and Prince (1992, p 25) stated that customers are known to engage

in positive word of mouth, that is they will tell others who were external to the transaction of their pleasure with the service and the service provider

In this study, Positive Word of Mouth is defined as the “positive valence” dimension Positive Word of Mouth (PWOM) represents the positive things a customer talks about a supermarket

2.4 Repurchase intention

Repurchase intentions represent the customer’s self-reported likelihood of engaging in further repurchase behavior (Seiders et al, cited in Shahrokh et al 2013) Actually, repurchase intention led to customer returning for buying again, in the medium-term

or long-term (Zhang et al, cited in Shahrokh et al 2013) In another study, repurchase intention is defined as the degree to which customers are willing to purchase the same product or service and it is a simple, objective, and observable predictor of future buying behavior (Jones and Sasser, cited in Kuo et al., 2013)

In the scope of this study, repurchase intention is defined as the subjective probability that an individual will continue to purchase products from the store in the future” (Fang, Chiu and Wang, 2011, p 484)

2.5 Customer satisfaction

Satisfaction is a crucial issue for both customer and retail management It is an important concept within general retail marketing and consumer research (Anselmsson, as cited in Theodoridis and Chatzipanagiotou, 2008)

Researchers have defined satisfaction diversely (Molinari et al., 2008) Customer satisfaction depends on a product’s perceived performance in delivering value relative

to a buyer’s expectations If the product’s performance falls short of the customer’s expectations, the buyer is dissatisfied If performance matches expectations, the buyer

is satisfied If performance exceeds expectations, the buyer is delighted (Kotler, Armstrong, Saunders and Wong, 1999, p 12)

In Vietnam, Nguyen Thi Tuyet Hong (2012) stated in the research of customer satisfaction that Oliver (1997) assumed “customer satisfaction is a judgment that a product or service feature, or the product or service itself, provided (or is providing) a

pleasurable level of consumption-related fulfilment, including levels of under or over fulfilment”

Cadotte et al (as cited in Molinari et al., 2008) defined satisfaction as an emotional response While Bolton and Drew (1991) and Boulding et al (1993) identified “two main types of satisfaction: the “transaction-specific” and the “overall” or cumulative satisfaction” (cited by Theodoridis and Chatzipanagiotou, 2008)

According to Theodoridis and Chatzipanagiotou (2008), “from the transaction-specific perspective, customer satisfaction is viewed as a post-choice evaluation of a specific purchase occasion” (Oliver, 1980, 1981); in contrast, the overall or cumulative perspective suggests that satisfaction accumulates across a series of experiences with the product, which results in an overall evaluation over time (Anderson et al., 1994; Fornell, 1992)”

Customer satisfaction in this study is defined as cumulative satisfaction, which is “the result of evaluating the “shopping trip” and retailer’s offer in correlation to the consumers’ fulfilled expectations” (Sivadas and Baker-Prewitt, as cited in Theodoridis and Chatzipanagiotou, 2008, p 712)

2.6 Hypotheses

When Harrison-Walker tested a scale to Word of Mouth in 2001, he revealed that service quality is an antecedent of WOM Furthermore, Pollack (2009) stated that service quality is a significant predictor of word-of-mouth and intention to repurchase Also, Employee Service is a very important aspect of service quality Therefore, it is expected that Employee Service has positive impacts on Positive Word of Mouth and Repurchase Intention This leads to two hypotheses as follows:

H1 Employee Service has a direct positive impact on Positive Word of Mouth H2 Employee Service has a direct positive impact on Repurchase Intention

About the relationship between service quality and customer satisfaction, Gronroos (1983) stated that there is a significant overlap between service quality and customer satisfaction, and thus, they can be used interchangeably (cited by Chang et al., 2008) Several studies have shown that a high level of customer service quality can exert a positive influence on customer satisfaction (Cronin and Taylor, 1992; Zeithaml et al., 1996; Ramsaran-Fowdar, 2006, cited by Chang et al., 2008) Besides, in India, a developing country like Vietnam, Bhaskar and Shekhar (2011) researched on the influence of Service Quality on Customer Satisfaction in apparel retail market The study was finished and revealed that service quality factors significantly effects customer satisfaction Since service quality includes employee service, that leads to an expected effect of Employee Service on Customer Satisfaction Therefore, there is a hypothesis can be proposed in Vietnamese supermarket sector:

H3 Employee Service has a direct positive impact on Customer Satisfaction

Theodoridis and Chatzipanagiotou (2008) also reviewed that “customer satisfaction has been shown to be a good predictor of future purchase behavior (Newman and Webel, 1973; LaBarbera and Mazursky, 1983; Kasper, 1988) Sivadas and Baker-Prewitt (2000) demonstrated that satisfaction influenced relative attitude, repurchase, and recommendation Highly satisfied customers are likely to make future purchases (Zeithaml et al., 1996) and to recommend the source to other customers (Reynolds and Arnold, 2000; Reynolds and Beatty, 1999)”

In addition, Kotler et al (1999, p.12) argued that satisfied customers make repeat purchases, and they tell others about their good experiences Thus, this leads to two hypotheses that Customer Satisfaction has impacts on Repurchase Intention and Positive Word of Mouth:

H4 Customer Satisfaction has a direct positive impact on Positive Word of Mouth H5 Customer Satisfaction has a direct positive impact on Repurchase Intention

Figure 1: Conceptual Model

EMPLOYEE SERVICE CUSTOMER

SATIFACTION

POSITIVE WORD OF

MOUTH

REPURCHASE INTENTION

2.7 Summary

There are five hypotheses expected in this study All of relationships are positive Especially, service quality is mentioned in this chapter to provide an overall view of service in a supermarket In Vietnamese market, employee service gets complaints the most and it is a very important aspect of service quality When a relationship exists between service quality and another concept, it can possibly be expected that there is a relationship between employee service and that concept

CHAPTER 3: METHODOLOGY 3.1 Introduction

The previous chapter suggested the research model with four concepts This chapter introduces the methods to do research in order to obtain data for analysing those concepts and the model Also, this chapter gives an order of those methods and reasons for choosing them It includes five sections: Research process, Measurement scales, Qualitative research, Sample and data collection of pilot survey and main survey, Results of Pilot survey

The two important writings in this chapter are the results of qualitative research and pilot survey The result of qualitative research led to the final draft of the questionnaire which was used in the pilot survey and the outcome of the pilot survey resulted in the main survey of this study However, the result of the main survey will

be presented in the next chapter

3.2 Research process of this study

Literature review led to the conceptual model which includes 5 hypotheses with 4 concepts Based on the four concepts and the existent academic scales, the first draft

of the questionnaire was written Then it was edited in a qualitative research to become a final draft questionnaire In detail, the qualitative research consisted of in-depth interviews with eight shoppers The qualitative research verified potential problems related to the items in the Vietnamese supermarket sector, checked the grammar and word choice used in the first draft questionnaire and came up with the final draft questionnaire

The final draft questionnaire was asked in the pilot survey of which the result was used to analyse the reliability of measurement scales Reliability was tested by using Cronbach’s Alpha The items were tested for appropriate loading factors on their constructs by using Exploratory Factor Analysis (EFA) Cronbach’s alpha was used before analysing EFA in order to eliminate rubbish items Otherwise, rubbish items may create artificial factors (Nguyen & Nguyen, 2011, p.33) In short, Cronbach’s Alpha and EFA analysis resulted in the official questionnaire SPSS software was used in this part of the process

The official questionnaire was used to do the main survey When the data of the main survey had been collected, it was used to analyse reliability and validity by using Confirmatory Factor Analysis (CFA) The model was tested by using Structural Equation Modelling (SEM) CFA and SEM analyses yielded the conclusions reached

in this research In this part of the process, AMOS was the software which the researcher used

The entire process is illustrated in the following chart:

Figure 2: Research Process

Research

Problem

Literature Review

Conceptual Model

First draft of questionnaire

Final draft of questionnaire

Pilot survey (n=120)

Official questionnaire

Main survey (n=175)

Findings and conclusion

Qualitative Research

Cronbach’s Alpha EFA

CFA

SEM

3.3 Measurement scales

According to the literature review in chapter two, there are four variables The variables are measured by the following scales, which are based on existing academic researches “Employee Service” includes 6 items “Customer Satisfaction” includes 9 items “Repurchase Intention” includes 6 items All responses are made on a seven-point Likert scale, ranging from strongly disagree (1) to strongly agree (7)

Scales of Employee Service: Adapted from Nguyen and Nguyen (2003)

1 This supermarket’s employees are willing to serve me

2 This supermarket’s employees are available when I need them

3 This supermarket’s employees enthusiastically answer my questions

4 This supermarket’s employees are very polite

5 This supermarket’s employees are very friendly

6 This supermarket’s employees serve quickly

Scales of Customer Satisfaction: Adapted from Fang, Chiu, and Wang (2011) and Pham & Le (2011)

1 I like to purchase goods from this supermarket

2 I am pleased with the experience of purchasing in this supermarket

3 Shopping in this supermarket is usually a satisfying experience

4 I think that purchasing from this supermarket is a good idea

5 I feel satisfied with this supermarket

6 I would be happy shopping at this supermarket in the future

7 This supermarket is meeting my expectations

8 This supermarket is better than other supermarkets

9 Overall, I am satisfied with the experience of purchasing at this supermarket

Scales of Positive Word of Mouth: which are adapted from Goyette et al (2010)

1 I am proud to say to others that I am this supermarket’s customer

2 I have recommended this supermarket

3 I speak of this supermarket’s good points

4 I mostly say positive things about this supermarket to others

5 I have spoken favorably of this supermarket to others

6 I strongly recommend people to buy goods from this supermarket

Scale of Repurchase Intention Adapted from Fang, Chiu, and Wang (2011) and Kuo, Hu & Yang (2013)

1 If I could, I would like to continue purchasing goods from this supermarket

2 I intend to continue purchasing goods from this supermarket in the future

3 It is likely that I will continue purchasing goods from this supermarket

in the future

4 I anticipate repeat purchasing from this supermarket in the near future

5 I expect to repeat purchase from this supermarket in the near future

6 I will continue to purchase goods from this supermarket in the future

3.4 Qualitative Research

3.4.1 The purpose of this qualitative research

The measurement scales of this study were mainly adapted from foreign authors They are scales which were tested and applied in other countries Due to the difference of culture and economy, there might be a gap when the scales were adapted in the Vietnamese context Therefore, this qualitative research was used for revising the items in the context of Vietnam The purpose of this qualitative research was to check clarity of the questionnaire and to make adjustments if needed In order to collect valuable data, the questionnaire must be clear so that every response is valid

3.4.2 Sample of this qualitative research

The sample size was eight participants These participants were chosen from different social classes and ages Three participants are male and of different ages (21, 23, 27) They are a student, a marketing executive, and a banking staff member Five of the participants are female, of five different ages (19, 22, 26, 31, 56) and have different jobs (a student, a sale executive, a lecturer, an accountant, and a housewife) All of the eight participants are living in Ho Chi Minh City

3.4.3 The conduct of this qualitative research

Each of the participants was interviewed separately in their office or at their home The in-depth interview was conducted in two steps

In the first step, the researcher asked the participants these questions: “How often do you go shopping in a supermarket?” and “Which supermarket do you go shopping at the most?” Once the participants answered, the researcher wrote down their answers immediately This step checked the shopping frequency of the participants and recalled the supermarket where they shopped It prepared participants for the content

in the next step, and high shopping frequency of the participants in the result would increase the value of this qualitative research

In the second step, the researcher gave the participants the first draft of the questionnaire, which was a collection of the measurement scales explained in 3.3 of this chapter Then each was asked to read the questionnaire and to point out any confusing words while reading it The researcher waited for them to read it and noted any comments they gave Later on, the researcher read the first draft of the questionnaire again and asked the participants the meanings of the questions This step was to check the wording and to revise the questions in an understandable way

3.4.4 The outcome of this qualitative research

The result of the first step showed that all the participants’ shopping frequencies are equal or more than three times a month The supermarkets at which they shopped the most are Coop Mart, Big C and Lotte The shopping frequencies of the participants were quite high Their shopping experiences were sufficient to be asked about shopping in a supermarket

In the second step of the qualitative research, the researcher had found one thing needing revision and some similar meanings of the adapted scale, especially with those scales adapted from two groups of authors

Five out of the eight participants suggested that the questions should change the term

“this supermarket” to “supermarket X” because it helps them follow the questionnaire better Thus, the term “supermarket X” was used to do the pilot survey and the main survey

All of the participants stated that the items RI1 “If I could, I would like to continue purchasing goods from this supermarket” and RI6 “I will continue to purchase goods from this supermarket in the future” have similar meanings, even though there were different thoughts of the similar level among the participants Also, most of them suggested that RI1 is a better descriptive scale than RI6 Therefore, the item RI6 “I will continue to purchase goods from this supermarket in the future” was deleted Six out of the eight participants commented that the items CS2 “I am pleased with the experience of purchasing in this supermarket” and CS3 “Shopping in this supermarket

is usually a satisfying experience” and CS9 “Overall, I am satisfied with the experience of purchasing in this supermarket” have the same meanings They also said that item CS9 includes item CS2 and item CS3 Consequently, CS2 and CS3 were eliminated

As a result, there are 24 remaining items to measure 4 factors In detail, there are 6 items of Service Capability of Employ, 7 items of Customer Satisfaction, 6 items of Positive Word of Mouth, 5 items of Repurchase Intention They were collected in the table 1 (see Appendix) These twenty-four items were used to ask the respondents in the pilot survey of this study

3.5 Sample and data collection of pilot survey and main survey

3.5.1 Sample

In the research named “Hedonic shopping motivations, supermarket attributes, and shopper loyalty in transitional markets” in 2006, Nguyen and Nguyen used in-service training students to be a sample James and Sonner (2001) showed that in-service

training students can be used as “a surrogate for consumers” (cited by Nguyen and Nguyen, 2006)

Furthermore, Nguyen and Nguyen (2006) stated that in-service training students represent a wide range of socioeconomic backgrounds and age groups Consequently, in-service training students were used for being samples of this study

3.5.2 Data collection

According to Hair et al (as cited in Lam, 2012, p 15), “a data set is considered to be suitable for Exploratory Factor Analysis when its sample size is larger than 100 and is

at least five times the number of interested variables”:

n > 100 samples and n=5k (where k=the number of variables)

Therefore, the minimum sample size required in this study is: n=5*24= 120

According to the condition of the minimum sample size, the data collection process consists of 2 phases:

The first phase of the process is a pilot survey with a sample size of 120 shoppers The primary data was collected by handing out hard copies

The second phase is a main survey It will be undertaken by questioning with a sample size of more than 175 shoppers in the Ho Chi Minh supermarket sector The primary data was collected by handing out hard copies and sending emails

3.6 The results of Pilot Survey

The pilot survey has been done with 120 valid respondents, out of 171 questionnaires delivered As mentioned in 3.2 of this chapter, Cronbach’s alpha was used before EFA according to Nguyen & Nguyen (2011)

3.6.1 Reliabilty Analysis - Cronbach’s alpha Testing

Cronbach Alpha Reliability Analysis was used to test the reliability of the measurement scales The scales are reliable when Cronbach‘s alpha coefficient of each scale is bigger 0.7 (Pallant et al., as cited in Van, 2012) Furthermore, all the item-total correlation is required to be more than 0.30 If it is smaller than 0.30, the item will be eliminated The result of reliability testing was showed at Table 3-1 in the following page

Table 3-2: Reliability result of pilot survey

Scale Mean if Item Deleted

Scale Variance if Item Deleted

Corrected Item-Total Correlation

Squared Multiple Correlati

on

Cronbach's Alpha if Item Deleted

Employee Service: Cronbach’s Alpha = 868

Employee Service 1 22.97 24.117 .624 500 853 Employee Service 2 23.35 22.297 .757 632 829 Employee Service 3 23.10 23.015 .664 500 847 Employee Service 4 22.82 24.465 .680 493 844 Employee Service 5 23.21 23.813 .724 542 836 Employee Service 6 23.09 25.496 .557 337 864

Customer Satisfaction: Cronbach’s Alpha = 860

Customer Satisfaction 1 30.20 26.077 .560 374 849 Customer Satisfaction 2 30.65 23.624 .716 596 827 Customer Satisfaction 3 30.86 23.501 .700 567 829 Customer Satisfaction 4 30.96 24.023 .603 430 844

3.6.1.a Employee Service testing

Cronbach’s alpha was 0.868 Corrected Item-Total Correlation of all items were acceptable: 0.624, 0.757, 0.664, 0.680, 0.724, 0.557 Item Employee Service 6 was the lowest figures of corrected item-total correlation However, it was even greater than 0.3 and if this item had been deleted, the Cronbach’s alpha would have reduced to 0.864 Therefore, there is no variable need deleting in this step of testing

Customer Satisfaction 5 30.92 23.959 .667 495 834 Customer Satisfaction 6 31.12 25.556 .489 270 859 Customer Satisfaction 7 30.54 23.679 .661 484 835

Positive Word of Mouth: : Cronbach’s Alpha = 859

Positive Word of Mouth 1 24.46 21.494 .490 266 865 Positive Word of Mouth 2 24.21 19.511 .720 577 822 Positive Word of Mouth 3 24.24 20.252 .704 575 826 Positive Word of Mouth 4 24.11 19.829 .728 574 822 Positive Word of Mouth 5 24.57 20.533 .643 449 837 Positive Word of Mouth 6 24.29 20.107 .630 452 840

Repurchase Intention: : Cronbach’s Alpha = 909

Repurchase Intention 1 21.33 16.022 .717 561 901 Repurchase Intention 2 21.42 14.297 .811 704 880 Repurchase Intention 3 21.52 13.882 .772 600 889 Repurchase Intention 4 21.49 14.034 .809 683 880 Repurchase Intention 5 21.69 13.711 .762 609 892

3.6.1.b Customer Satisfaction testing

Cronbach’s alpha was 0.860, which was acceptable All the figures of corrected total correlation were matching requirement The lowest figure was 0.489, which was obviously qualified, if it had been deleted, Cronbach’s alpha would have decreased from 0.860 to 0.859, that made it worse Thus, all of variables were not eliminated

item-3.6.1.c Positive Word of Mouth testing

The item “Positive Word of Mouth 1” had the smallest item-total correlation If it had been deleted, Cronbach’s alpha would have increased to 0.865 However, the current Cronbach’s alpha was 0.859, much more than the requirement level and its corrected item-total correlation was 0.490, which was much more than 0.3 Hence, the researcher kept all of the items although Cronbach’s alpha could be higher

3.6.1.d Repurchase Intention testing

Cronbach’s alpha was very high (0.909), this is the highest Cronbach’s alpha of this pilot survey This number was smaller than 0.95, the level that the items might be repetitious, so this number is qualified Figures of corrected item-total correlation were also very high (0.717, 0.811, 0.772, 0.809, 0.762) These figures were really good The items of repurchase intention would make good components of a summated rating scale Apparently, the items were retained

In summary, there was no item of Employee Service, Customer Satisfaction, Positive Word of Mouth, and Repurchase Intention eliminated in reliability analysis All of the constructs were reliable in an acceptable range of Cronbach’s alpha In next step of testing, all items would be tested in the next analysis: Exploratory factor analysis

3.6.2 Exploratory Factor Analysis (EFA)

This study will use CFA and SEM to analyse in the next step, then all items should be run through the “principal axis factoring” analysis, using the “promax” rotation The method “principal axis factoring” with “promax” rotation is more exact than the method “principal components” with “varimax” rotation (Nguyen and Nguyen, 2011,

p 182)

All items of the four concepts were run EFA at one time The requirement of items which were kept:

Highest factor loading of an item must be greater than 0.5

Eigenvalues is greater than 1, cumulative of explained variance must be greater than 50%

Kaiser-Meyer-Olkin is greater than 0.7, the Bartlett test must be significant (Sig < 0.05)

The EFA result in first time running was showed in Table 3-3 (see Appendix 2)

In the first time running, the highest factor loading of the items “Positive Word of Mouth 1”, “Customer Satisfaction 1”, “Customer Satisfaction 6”, “Customer Satisfaction 7” were alternately 0.361, 0.403, 0.408, 0.484, which were smaller than 0.5 The “Positive Word of Mouth 1” had the lowest figure, it was eliminated and EFA was retested until the highest factor loadings of items are greater than 0.5

After deleting “Positive Word of Mouth 1”, there are three more times running EFA to reach the requirements of factor loading There are three more deleted items after

“Positive Word of Mouth 1”, they are “Customer Satisfaction 1”, “Customer Satisfaction 6”, “Customer Satisfaction 7” alternately The fifth time running EFA

was the last time because all figures matched the requirement The following table showed “Pattern Matrix” of the last time running EFA, while “KMO and Bartlett’s Test” and “Total Variance Explained” were showed in table 3-5 and table 3-6 (see appendix 3)