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The impact of store images on consumer loyalty luận văn thạc sĩ

MINISTRY OF EDUCATION AND TRAINING
UNIVERSITY OF ECONOMICS HO CHI MINH CITY
YZ

NGUYEN VAN CUONG

THE IMPACT OF STORE IMAGES
ON CONSUMER LOYALTY

MASTER OF BUSINESS ADMINISTRATION THESIS

Ho Chi Minh City, July 2011


MINISTRY OF EDUCATION AND TRAINING
UNIVERSITY OF ECONOMICS HO CHI MINH CITY
YZ

NGUYEN VAN CUONG

THE IMPACT OF STORE IMAGES

ON CONSUMER LOYALTY

Major: Business Administration
Major code: 60.34.05

MASTER OF BUSINESS ADMINISTRATION THESIS

Supervisor: DR. NGUYEN DINH THO

Ho Chi Minh City, July 2011


ACKNOWLEDGEMENTS

Firstly, I would like to express my sincere gratitude to my supervisor, Dr. Nguyen
Dinh Tho for the patient, dedicated guidance and valuable suggestions for this thesis
over the past few months.
Also, I am particularly grateful for Mr. Tran Khoa Van – GfK Managing Director and
GfK management board who inspire the study and contribute valuable figures about
retailer evolution in Vietnam.
Next, I would like thanks to my colleagues Mr. Huynh Phuoc Cuong – Senior
Manager of Retail Management and Mrs. Nguyen Ngoc Lan Huong – Senior Research
Manager in helping me to conduct and analyze the qualitative study.
I also would to express my gratitude to management boards of the three consumer
electronics retailers: Nguyen Kim, Thien Hoa and Cho Lon for the keen support in
letting me collect shopper information during the qualitative research.
My heartiest thanks are also sent to Mrs. Pham Thi Thanh Nhan, senior assistant of
Charles Sturt University Australia (CSU) for her non-stop support on books and
online journal article.
Finally, I would like to send my deep appreciation to more than 500 postgraduate
students of University of Economics Ho Chi Minh City, who contributed valuable
ideas and assessment for the whole pilot and main survey.

Ho Chi Minh City, Vietnam
July, 2011

Nguyen Van Cuong

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ABSTRACT
The area of consumer loyalty has received considerable attention during the past few
years, both in academic and practice area. Many retail research has been conducted to
answer for the questions such as: what is the most accurate definitions of consumer
loyalty; are there any models/ generalizations when investigating consumer loyalty;
what the management implications would be for those researches.
There are many antecedent factors affecting consumer loyalty, store image dimensions
were discovered to be among the most important loyalty drivers. In order to indentify
the key determinant image elements and understand their derived importance, this
study was implemented. The research successfully explored the significant
relationship between Store Service (Employee Service and After-sales Service), Store
Facilities (Physical Facilities and Store Atmosphere), Product & Marketing
Communication (Merchandising and Advertising & Promotions), Perceived Price and
Store Convenience with Consumer Loyalty. Also, these independent factors were also
discovered that they do not equally affect on consumer loyalty.
One qualitative study with in-depth interview and one pilot study were performed
before the main survey was conducted in Ho Chi Minh City to assess modern trade
consumer electronics retailers. The study revealed that five key factors (Store Service,
Store Facilities, Product & Marketing Communication, Perceived Price and Store
Convenience) positively affect consumer loyalty. Besides, the study suggested that
Store Facilities and Product & Marketing Programs were the two most important
factors to be invested in modern retailing industry.

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TABLE OF CONTENTS
CHAPTER 1.

INTRODUCTION ........................................................................... 1

1.1 Research background .......................................................................................... 1
1.2 Problem statement .............................................................................................. 2
1.3 Research questions ............................................................................................. 3
1.4 Research objectives ............................................................................................ 3
1.5 Research scope ................................................................................................... 4
1.6 Research methodology and design ..................................................................... 4
1.7 The significance of research ............................................................................... 4
1.8 Thesis structure ................................................................................................... 5
1.9 Summary ............................................................................................................. 6
CHAPTER 2.

LITERATURE REVIEW and THEORETICAL MODEL ......... 7

2.1 Consumer loyalty definitions ............................................................................. 7
2.2 Store image definitions ....................................................................................... 8
2.2.1

Store convenience ..................................................................................... 9

2.2.2

Physical facilities .................................................................................... 10

2.2.3

Perceived price ........................................................................................ 11

2.2.4

Employee service .................................................................................... 11

2.2.5

Advertising and promotions .................................................................... 12

2.2.6

After-sales service ................................................................................... 12

2.2.7

Store atmosphere ..................................................................................... 13

2.2.8

Merchandising ......................................................................................... 13

2.3 Store image studies ........................................................................................... 14
2.4 The relationship between store images and consumer loyalty ......................... 15
2.5 Theoretical model and hypotheses ................................................................... 16
2.5.1

Theoretical model .................................................................................... 16

2.5.2

Hypotheses .............................................................................................. 17

2.6 Summary ........................................................................................................... 19

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CHAPTER 3.

RESEARCH METHODOLOGY ................................................. 21

3.1 Research process .............................................................................................. 21
3.2 Qualitative Study .............................................................................................. 22
3.2.1

Objectives ................................................................................................ 22

3.2.2

Methodology ........................................................................................... 23

3.2.3

Sample size and target respondent .......................................................... 23

3.2.4

In-depth interview content ...................................................................... 23

3.2.5

Qualitative result ..................................................................................... 24

3.3 Measurement .................................................................................................... 26
3.3.1

Measure of consumer loyalty .................................................................. 26

3.3.2

Measure of store convenience ................................................................. 27

3.3.3

Measure of physical facilities .................................................................. 27

3.3.4

Measure of perceived price ..................................................................... 27

3.3.5

Measure of employee service .................................................................. 28

3.3.6

Measure of advertising and promotions .................................................. 28

3.3.7

Measure of after-sales service ................................................................. 28

3.3.8

Measure of store atmosphere .................................................................. 28

3.3.9

Measure of merchandising ...................................................................... 29

3.4 Quantitative Pilot study .................................................................................... 29
3.4.1

Objectives ................................................................................................ 29

3.4.2

Methodology ........................................................................................... 29

3.4.3

Target respondent and sample size ......................................................... 29

3.4.4

Pilot study content ................................................................................... 30

3.4.5

Pilot study result ...................................................................................... 30

3.5 Model and hypotheses modification ................................................................. 34
3.5.1

Model modification ................................................................................. 34

3.5.2

Hypotheses modification ......................................................................... 36

3.5.3

Variables .................................................................................................. 36
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3.6 Main survey ...................................................................................................... 37
3.6.1

Methodology ........................................................................................... 37

3.6.2

Target respondent and sample size ......................................................... 37

3.6.3

Questionnaire content .............................................................................. 38

3.6.4

Data analysis method .............................................................................. 38

3.7 Summary ........................................................................................................... 40
CHAPTER 4.

DATA ANALYSIS AND RESULT .............................................. 42

4.1 Sample characteristics ...................................................................................... 42
4.2 Cronbach’ alpha reliability analysis ................................................................. 44
4.3 Exploratory factor analysis ............................................................................... 46
4.4 Multiple linear regression ................................................................................. 49
4.5 Hypotheses assessment and discussion ............................................................ 51
4.6 Summary ........................................................................................................... 53
CHAPTER 5.

CONCLUSIONS AND IMPLICATIONS ................................... 55

5.1 Conclusions ...................................................................................................... 55
5.2 Managerial implications ................................................................................... 56
5.2.1

Store facilities .......................................................................................... 56

5.2.2

Product and marketing communications ................................................. 56

5.2.3

Perceived price ........................................................................................ 57

5.2.4

Store service ............................................................................................ 57

5.2.5

Store convenience ................................................................................... 57

5.3 Limitations and future research ........................................................................ 58
5.3.1

Research limitations ................................................................................ 58

5.3.2

Future research ........................................................................................ 58

5.4 Summary ........................................................................................................... 59
REFERENCES .......................................................................................................... 60
APPENDIX 1: Overview of Vietnam Retailing Market ........................................ 63
APPENDIX 2: Data analysis .................................................................................... 64
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APPENDIX 3: Questionnaire ................................................................................... 69

LIST OF TABLES
Table 3-1: Qualitative result – important factor to retain loyal customers .............................. 24 
Table 3-2: Qualitative result – important factor to retain loyal customers .............................. 25 
Table 3-3: Cronbach alpha result for pilot study ..................................................................... 31 
Table 3-4: Rotated component matrix for pilot study .............................................................. 33 
Table 4-1: Descriptive analysis ................................................................................................ 42 
Table 4-2: Average number in one household and average household monthly income ........ 44 
Table 4-3: Cronbach alpha result for main survey................................................................... 44 
Table 4-4: EFA rotated component matrix for main survey .................................................... 47 
Table 4-5: Total variance explained ........................................................................................ 48 
Table 4-6: KMO and Bartlett’s Test ........................................................................................ 49 
Table 4-7: Regression model summary ................................................................................... 49 
Table 4-8: ANOVA F test ........................................................................................................ 50 
Table 4-9: Multiple linear regression result for main survey .................................................. 50 
Table 1-1: Vietnam retail outlet evolution of home technology product................................. 63 
Table 1-2: Organized/ chain store vs. independent channel evolution .................................... 63 
Table 1-3: Ranking of Retail Market Attractiveness ............................................................... 63 
Table 4-10: Descriptive statistic .............................................................................................. 64 
Table 4-11: Correlation between Consumer loyalty, Store Service, Store Facilities, Product &
Marketing Communication, Store Convenience and Perceived Price ..................................... 65 
Table 4-12: Communalities...................................................................................................... 66 

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LIST OF FIGURES
Figure 2-1: Theoretical model ................................................................................................. 17 
Figure 3-1: Research Process ................................................................................................... 22 
Figure 3-2: Modified theoretical model ................................................................................... 36 
Figure 4-1: Result of multiple linear regression ...................................................................... 51 
Figure 4-2: EFA Scree Plot ...................................................................................................... 64 
Figure 4-3: Histogram of Consumer Loyalty........................................................................... 67 
Figure 4-4: Normal P-P Plot of Consumer Loyalty ................................................................. 67 
Figure 4-5: Scatter plot of Consumer Loyalty ......................................................................... 68 

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CHAPTER 1. INTRODUCTION
1.1 Research background
In recent years, the rapid growth of retailers in both quantity and channels (supermarket,
hypermarket, exclusive single brand stores) has resulted in a corresponding increase in
the competition between retailers. The understanding of what motivates consumers to
purchase from one stores rather than another becomes increasingly important to retail
stores design and management (Black et al., 2002).
In Asia, retailing has been still one of the most attractive industries over the past few
years. Vietnam, an emerging country with a dynamic economy and a potential entry
market with more than 85 million people, will be a prosperous land to invest. According
to the Global Retail Development Index 2010 of American consulting company AT
Kearney, Vietnam was ranked as the 14th in 30 countries having the most attractive
retailing industry worldwide.
The retailing industry is still considered as an attractive industry because Vietnam has a
young population and promises a robust growth of the industry. Furthermore, after
joining WTO, Vietnamese government continued encouraging and supporting local
retailers to participate and expand in the regional retailing industry to keep pace with
neighbor countries like Thailand, Singapore or Malaysia.
The growing of retail industry in Vietnam is recorded to be in both channel and outlet
development. Firstly, regarding number of outlet, according GfK Vietnam (see appendix
1, table 1.1), the total number of retailers selling technology products is expected to
increase significantly in 2011 (44%) compared to 2010. Of which, telecom group
(mobile phone retailer) has the largest number of retail store (19,347 outlets). Secondly,
modern trade channels continued to emerge despite the dominance of traditional
channels. Consumers have been interested in shopping at supermarkets, hypermarkets
and convenience stores because of their pleasant environment as well as their diversified
product ranges. In addition, modern trade channels try their best to offer consumers a
more competitive price to compete with traditional channels. Consumers also preferred
to come to modern consumer electronics stores because they could freely look, touch
and try products that they wanted. GfK retail audit recorded a positive growth in revenue
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of organized chain store (modern trade retailers) compared to traditional independent
store during the past three years 2009-2011 (See appendix 1, table 1.2). As can be seen,
the value share of modern trade channel in consumer electronics and home group retailer
increased from 27% in 2009 to 35% in 2010 and is predicted to be 40% in 2011.
Consumers seemed to be more willing to make purchases compared to the previous
years. However, the booming of retail outlet and the developing of modern trade channel
make consumers to be more selective in choosing retail stores. Consequently, many
retailers have tried to find different marketing communication tools to attract new
customers as well as retain loyal ones. Advertising, sales promotions and other
marketing activities have been considered to stimulate demand as well as to boost sales.
Despite many approaches applied by different types of retailers, it’s necessary to have a
consistent model for retailers to drive their sales, create consumer loyalty and increase
benefit. The model have to focus on building a proper marketing communication mix,
sustaining and developing store physical facilities as well as improving store services.
1.2 Problem statement
The rapid growth of modern trade consumer electronics retailer in an emerging country
like Vietnam also has some issues to be address. In the first place, there are only a few of
retailers which are real modern trade according to the definition of worldwide retail
industry. The others can considered themselves as technical super stores, super market,
hyper markets of consumer electronics product because they have some competitive
advantages
No matter how big the retailers, each of them find their own strategy to drive their
business and create a unique loyalty image in consumer’s mind. While big retailer names
such as Metro, Big C, Nguyen Kim, Thien Hoa, Tran Anh or Pico always empower their
brands by enhancing their stores facilities and improving customer service as a mass
merchandiser. The other smaller ones, based on their advantages about locations,
government relationship or manufacturer relationship, increase their sales and retain
their loyal customers by offering different attractive price and in-store promotions which
were run monthly or even weekly.

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There have been a number of failures in retailing industry during the past five years
beside the successful names like The Gioi Di Dong, Nguyen Kim or Tran Anh. Most of
the failures claimed that they were really misled to retain loyal consumers. Some invest
a lot on location and facilities, some spend money running price and sales promotions
while the other put many efforts to build a good customer service team. However, they
have some common questions: Why their loyal customers easily switch to competitor
stores? How can they identify competitor strength or weakness periodically? Among
facilities, services, product & promotions, and price, which one is the key to invest?
1.3 Research questions
In order to resolve the above problems, this research was conducted to answer the
following questions
• What are the key image dimensions of a store that determine loyalty of customers to
one particular retailer? By addressing this questions, managers who are working in
retail industry can identify their strength and weakness to drive their investment in a
right direction
• How important each store image dimension placing on general consumer loyalty?
Resolving this question will assist retailers to prioritize their investment for a
marketing communication program. Moreover, new retailers or retailers with limited
budget can find it useful to firstly spend money for some important factors in a shortterm development.
1.4 Research objectives
Base on the research questions, this study was implemented to identify the store image
drivers of consumer loyalty to achieve the following objectives
• Explores the impact of store image dimensions such as store convenience, physical
facilities, perceived price, employee service, advertising & promotions, after-sales
service, store atmosphere and merchandising on consumer loyalty
• Quantify the importance level of each independent factors in the relationship with
consumer loyalty
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1.5 Research scope
The research was conducted in Ho Chi Minh City, a commercial and trading center of
Vietnam. According to GfK retail census 2010, more than 35% of modern trade retail
sales are contributed by Ho Chi Minh City
The study focuses on retailers who selling household consumer electronics items such as
TVs, DVDs, audio home systems, MP3/MP4, camera, camcorder, mobile phones,
refrigerator, washing machine, air conditioner, microwave ovens, vacuum cleaner,
desktop PC, laptop and office equipment. As stated in the research background, these
home-technology retailers were recorded to have significant growth during the past few
years in terms of outlet and retail turnover.
1.6 Research methodology and design
The study comprises two phases: The pilot study and the main survey. The Pilot study
includes qualitative and quantitative stages. Qualitative stage was conducted to collect
the appropriate response scheme from Vietnamese consumers. These items will be
measured in the pilot quantitative study for their relevance and reliability. Finally, the
main survey was carried out to test the research hypotheses, answer research questions
and fulfill research objectives
Cronbach alpha was used to measure the reliability of the scale, exploratory factor
analysis was applied to identified correct factors and multiple linear regression was
performed to test the significant relationship between each store image dimension on
consumer loyalty
1.7 The significance of research
There are a lot of researches conducted to understand the different impact of store
images on retailer preference (Thang and Tan, 2003), retailer purchase intension
(Liljander et al., 2009), store satisfaction (Bloemer and Ruyter, 1997) or store evaluation
(Decarlo et al., 2007, cited from Jinfeng and Zhilong, 2009). The perceived benefit of
consumer loyalty was also compared across nation and culture (Steyn, 2010). However,
a few of them investigate the direct relationship between store images determinants and
consumer loyalty.
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Recently, Jinfeng and Zhilong (2009) explores the impact of selected store images on
retailer equity which includes retailer loyalty, retailer awareness, perceive quality and
associations. Yet, the study is still limited in a certain number of image factors and
retailer types.
There is also a fact that modern consumers have been increasingly selective in choosing
stores and retailers have also raised a demand to differentiate themselves from other
competitors by services, personnel, facilities or promotions. Thus, our research will
establish an applicable loyalty model which investigates the relationship between 8 store
images and consumer loyalty. The model will be also considered as a marketing tool
which identifies the derived importance of each image dimension to consumer loyalty.
1.8 Thesis structure
The content of this thesis is as follows.
Chapter 1 - Introduction: briefly introduces about research background, problem
definition, research questions and objectives, delimitation, methodology and design.
Chapter 2 - Literature Review: provides an overview of the previous literature on
store images in order to understand the key image drivers of consumer loyalty and the
different impacts of each image on overall loyalty outcomes. The chapter also reviewed
various preceding studies about store images and store loyalty before releasing the
theoretical model and research hypothesis.
Chapter 3 – Methodology: explains the methodology used to assess the research model
and test the hypotheses. The study is divided into two phases: pilot study (including
qualitative and quantitative pilot study) and main survey. Reliability and statistical
measurement are also conducted to modify conceptual model and hypotheses. Sampling
method, sample size, target respondent and data analysis method are also covered in this
chapter
Chapter 4 – Data Analysis and Result: represents the key findings of the sample
characteristics. This chapter also comprises statistical procedures that were undertaken
to test hypotheses and reveals the applicable model.

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Chapter 5 – Conclusions and Implications: This chapter includes conclusions,
managerial implications, research limitations and future research.
1.9 Summary
The chapter briefly introduced about the research by providing the overview of retailing
industry in Vietnam. The dynamic of an emerging country together with a huge
population placed Vietnam as one of the 25th most attractive retail market in the world
(See appendix 1, table 1-3). However, there have been many threats for developing
retailers in recently years when they have to compete with big cooperation like Metro,
Big C and Parkson with little knowledge about consumers and marketing strategy.
Consequently, the study aims to deliver a more practical view about the drivers of
consumer loyalty by investigating different effect of store images on consumer loyalty.
This chapter also represented the questions, the objectives and the scope of the study. In
addition, the methodology and the design of the research were also introduced.

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CHAPTER 2. LITERATURE REVIEW and THEORETICAL MODEL
2.1 Consumer loyalty definitions
In conceptualizing consumer loyalty, we propose a distinction between repeated visiting
behavior and consumer loyalty. Repeat visiting behavior is the actual visiting of the
store. Consumer loyalty is sometimes referred as retailer loyalty in some studies
Reynolds, Darden and Martin (1974-1975) define loyalty as ‘the tendency for a person
to continue over time to exhibit similar behaviors in situations similar to those he has
previously encountered”. Loyalty is sometimes referred as loyalty patronage – a
repeating purchase behavior at a particular store for either the same products or any
other products. A customer who is loyal to a certain retailer will give this store his or her
priority visit in any shopping event.
In an earlier study, Jacopy and Chestnut (1978) describe consumer loyalty as the “biased
behavioral response, express overtime, by some decision-making unit with respect to
one store out of a set of stores, which is a function of psychological (decision making
and evaluative) process resulting in brand commitment”. Jacopy and Chestnut also
differentiate the consumer loyalty with repeat visiting behavior and highlight the
important role of store commitment, a necessary condition for consumer loyalty to
establish.
Lastovicka and Gardner (1977, cited from Chowdhury, 1998) define store commitment
as the pledging and binding of an individual to his/her store choice. And once consumers
become committed to the store, they turn to be loyal to the store, generating consumer
loyalty. In another study of consumer commitment, consumer loyalty is defined as a
commitment to re-buy or re-patronize a preferred product or service consistently in the
future, despite the situational impact or marketing efforts which might let consumer
switch their choice (Arnett et al., 2003).
East et al. (1995, cited from Styen, 2010), define consumer loyalty as the percentage of
purchases of specific product category at a chosen store.
According to Pappu and Quester (2006a, b) consumer loyalty is the consumer intention
to be loyal to particular retailer as demonstrated by the intention to purchase from the
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retailer as a primary choice. As such, consumer loyalty is measured by the feeling of
loyal, the top-of-mind store choice, and the commitment not to switch to another store.
Sirohi et al. (1998) explore three measures constructing consumer loyalty intention from
consumers. They are willingness to repurchase, willingness to purchase more in the
future, and willingness to recommend the store to others.
James, Walker and Etzel (1975) find loyalty an important objective that every marketers
aims for their products, brands and services. It helps retailer to prolong their business
because of repeated purchase of loyal customers. The strength of this loyalty behavior of
the customer and target market is the key to success of a particular retail business.
Loyalty is supposed to be the highest level of patronage motivation.
Anderson (1973, cited from Osman 1993) describes consumer loyalty from similarity
and contrast theory. Once the customers are loyal to their stores, they will remain loyal
as long as the core attributes of the stores fit perceived important store attributes. If the
performance of some core attributes of the stores decrease, the customers will try to
accommodate by matching other alternative attributes to justify their loyalty. However,
the decrease in perceived important store attributes can be accepted at a certain extent.
The degree of consumer loyalty can be measured by using various variables. (Bellenger
et al., 1976). Among these variables are: the percentage of purchases of a specified
product category at chosen store; the frequency of visits to the store in relation to other
stores during a certain specified period; the ratio of ranking between stores; the intention
to shop at a store in the future; the extent of customer’s willingness to recommend the
store to their friends
2.2 Store image definitions
Martineau (1958) conducts one of the earliest studies about store images and describes
store image as “the personality of the store and the manner in which the store is
presented in a personal mind”.
Over the decades, many authors propose different store attributes or characteristics
definitions that are part of the overall store images. Doyle and Fenwick (1974), for
instance, distinguish only five elements of store images including product, price,
8


assortment, styling and location while Bearden (1977) identifies seven dimensions:
price, quality of the merchandising, assortment, atmosphere, location, parking facilities
and friendly personnel.
Marks (1976) and James et al. (1976) define store images as a multi-attribute models and
image is thus expressed as a function of the salient attributes of a particular stores that
are evaluated and weighted against each other.
Houston and Nevin (1981, cited from Thompson and Chen, 1998), describe store images
as the “complex of consumer’s perceptions of a store on different attributes”
Engel and Blackwell (1982, cited from Thompson and Chen, 1998) consider store image
as an attitude, or set of attitudes, based upon evaluation of salient store attributes.
Additionally, Lewis and Hawksley (1990, cited from Thompson and Chen, 1998) and
Osman (1993) define store image as critical components in store choice and consumer
loyalty.
According to Keaveney and Hunt (1992), store image measurement almost always
involves the identification of a number of attributes which are assumed to make up a
store’s image.
Ghosh (1990) identifies that store image is a composition of the different element of
retail marketing mix such as location, merchandise, store atmosphere, customer service,
price, advertising, personal selling and sales incentive programs
Despite numerous attempts to define and measure store image constructs, there is no
consensus definition and there are still inconsistencies in conceptualization and
operationalization. The following section will review and consolidate different
definitions of some key store images dimensions including: store convenience, physical
facilities, perceived price, employee service, advertising and promotions, after-sales
service, store atmosphere and merchandising.
2.2.1

Store convenience

Many early researches have been developed to assess the role of store convenience (Rich
and Portis, 1964, Kelly and Stephenson, 1967, Fisk 1962 and Weale, 1961, cited from
9


Lindquist, 1975). Most of the studies divide store convenience into localtional and
parking convenience.
Later, Kunkel and Berry (1968) and Lindquist (1975) separate store convenience into in
three types: convenience in general, locational convenience and other convenience
factors. Locational convenience focuses on the effort to reduce the time to go to and
from a store. This factor includes accessibilities, good-or-bad location. Other factors of
store convenience should be considered are parking, opening hours, store layout in terms
of convenience and convenience in general
Location decision is also considered as a key to success of many retailers (Kotler, 2006).
He emphasized the important role of location in the developing of modern retailing
industry. Generally, a central business district, a shopping center area, a community
shopping zone, a commercial shopping street should be focused.
2.2.2

Physical facilities

Martineau (1958) finds that factors such as elevators, escalators and counter position
play a critical part in defining store layout and architecture. In addition, he adds symbols
and colors as two parts of physical facilities and describes them as the shape and the
color of company symbols or logos.
Rich (1963) and May (1971) describe physical facilities of a store as a store layout.
However, Aron (1963) and Fisk (1962) find that the ease of shopping would also create
the quality of physical facilities. (Cited from Lindquist, 1975)
Lindquist (1975) consolidates the results of 26 previous authors about store image
dimensions and to come up with nine image elements which contribute to image
formation or to favorable/unfavorable consumer attitudes toward retailer. He defines
physical facilities as the attributes covering the facilities available in the store such as
elevator, lighting, air conditioning and washroom (rest room). It can also include store
layout, aisle placement and width, carpeting and architecture

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2.2.3

Perceived price

Perceived price or price of merchandize is a part of merchandise assessment (Kunkel
and Berry, 1968). The price of a store could be perceived to be cheaper, more
competitive, high, fair, or value for money.
Chowdhury et al. (1998) adds more value for price evaluation of a store. He finds that
price or values should be measured under the fairness, value-for-money, the discount or
just a cheap/expensive awareness in consumer mind.
Price and pricing has been a long lasting discussed topic in any retail management.
Kotler (2006) stresses price as a key positioning factor and must be described in relation
to the target market, product and marketing mix and the competition. He emphasizes that
the mark-up and volume will not go together. Low-markup often goes with high volume
to represent for mass merchandiser and discount stores. Meanwhile, specialty store
usually choose high-markup and small volume.
2.2.4

Employee service

Employee service is described as sales personnel service by Martineau (1958). He
emphasizes that the increasingly success of modern trade come from the dispose of sales
clerk in some supermarkets. However, shoppers have been variably evaluated the sales
personnel in their regular purchasing at some retailers.
Kunkel and Berry (1968) clarify the sales personnel description by adding attitude of
sales staff, knowledge-ability of sales staff, number of sales personnel and the quality of
service they bring to customers.
Employee service is also depicted as the sales-clerk service in many researches before
1975 (Myers, 1960, Tillman, 1967, Fisk, 1962 and May, 1971, cited from Lindquist,
1975).
In 1975, Lindquist combines most of his preceding studies to provide a definition of
service. According to him, employee service is just one critical part of store service
which refers to many measurements including service in general, sales clerk service,
presence of self-service, ease of merchandise and credit policy of the store.

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2.2.5

Advertising and promotions

The retailer’s advertising is an especially important factor in expressing the character of
the store. While the retailers think of factual content of advertising like items, prices,
timeliness, quality of merchandise, shoppers can be impressed by the physical
appearance, general tone, wording and styles of the advertising. The symbolic meaning
of the advertising has to be consistent with the character of the store itself (Martineau,
1958)
Promotion is also specified as sales promotions by Kunkel and Berry (1968). They
measure sales promotions through quality or assortment of sales merchandising, special
promotion programs, stamps or other promotions. In the meantime, advertising is
categorized into style or quality of advertising, media and vehicles used and reliability of
advertising.
Rich and Portist (1964) and Fisk (1962) evaluate advertising of a store by advertising in
general and display advertising. (Cited from Lindquist, 1975)
Lindquist (1975) proposes another definition of promotion which is considered as a store
marketing mix and should cover sales promotions, advertising, display, trading stamps,
and symbols and colors.
Kotler (2006) recommends retailer to use variety of communication tools to reinforce
their store images. He highlights the important role of advertising and promotions mix
like print-ads, money-saving coupons, frequent shopper-reward programs, in-store
sampling
2.2.6

After-sales service

After-sales service or post-transaction service is evaluated by the satisfaction of
consumers after purchasing. This service includes such areas as warranty service, returns
policy, the support post-purchasing service staffs (Lindquist, 1975)
After-sales service is often measured by a person who delivers the post-purchasing
service like set-up and installing staffs, customer phone service (Fisk, 1962, cited from
Lindquist, 1975)

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Kotler (2006) describes post-purchase service through the items like shipping and
delivery, gift wrapping, adjustment and repair, interior decorating, credit, rest room and
baby-attendant service
2.2.7

Store atmosphere

Martineau (1958) finds that store atmosphere is a part of layout and architect. As such,
store atmosphere is defined as what consumers pay attention to including product
display, crowds, size of a store, in-store decoration and shopping atmosphere.
Kunkel and Berry (1968) add two more dimensions to Martineau definitions about store
atmosphere: customer type and store congestion in his behavioral study about store
images.
Later, Lindquist (1975) proposes an emotional description for store atmosphere.
According to him, store atmosphere should be measured by a customer’s feeling of
warm, acceptance or ease during the purchasing.
According to McGoldrick (2003), store atmosphere should contain four dimensions:
visual or sight (color, brightness, size and shape), aural or sound (volume and pitch),
olfactory or smell (scent and freshness) and tactile or touch (softness, smoothness and
temperature)
Kotler (2006) defines store atmosphere as the design of space to create certain effects to
shoppers. Specifically, by creating store atmosphere in buying environment, shop
owners try to generate emotional effect in consumers to enhance purchase possibilities.
2.2.8

Merchandising

There are five attributes to be considered when we assess merchandising of a store
(Lindquist, 1975). They are quality, selection of assortment, styling or fashion,
guarantees, and pricing. Merchandising is also understood as the good and services
offered by retailers
Kunkel and Berry (1968) define merchandising by three separate categories: price of
merchandise, quality of merchandise and assortment of merchandising (product
assortment)
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Thang and Tan (2003) use three criteria to measure merchandising quality of a store:
merchandise mix quality, value-for-money merchandise and availability of merchandise
2.3 Store image studies
Many empirical studies related to store images are conducted to understand the
relationship between different dimensions of store images and consumer store choice,
satisfaction and loyalty.
Hansen and Deutscher (1978), two professors of The Ohio State University, on the basis
of Lindquist works, implement an applied research for both department stores and
grocery stores in metropolitan area. Their conceptual framework bases upon the notion
of attribute, components and dimensions. There are nine dimensions (merchandise,
service, clientele, physical facilities, convenience, promotion, store atmosphere,
institutional and post-transaction satisfaction), twenty components and forty one
attributes to be tested among customers from two store types. The study highlights the
different importance level of each image dimensions towards particular type of retail
store. The difference of demographic factors also results in the gap in evaluation.
Lewis and Hawksley (1990) find that psychological factors play key roles in forming
store image. Self-image consumers, for instance, try to bring their real self-concept
towards buying process to be satisfied and attain a desired role in life. Several attempts
have been made to determine whether there is a linkage between a consumer’s selfimage and store image.
Hirschman and Stampfl (1980, cited from Thompson and Chen, 1998) suggest that
consumers may match themselves with retail stores according to their perceptions of
their own and of the stores’ innovation. Thompsons and Chen (1998) identify the
correlation between the value of “enjoyment and happiness” and “quality of life” with
store associations like “price, reputation and quality” in a study about customers at
fashion retail stores.
In a study about the relationship between store image and store preference, Thang and
Tan (2003) explore the impact of eight image dimensions (merchandising, atmosphere,
in-store service, accessibility, reputation, promotion, facilities and post-transaction) on
store preference through consumer perception as a mediating factor.
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2.4 The relationship between store images and consumer loyalty
Lessig (1973) not only examines the relationship between store image and consumer
loyalty but he can also predicts consumer loyalty from store image information by
observing and investigating loyalty groups from distinct clustered household. Moreover,
by using multi-store loyalty measures, Lessig can gain the possible insight about the
factors which underlie consumer loyalty and emphasize the value of loyal patronage
across various retail outlets.
Osman (1993) proposes a model of retail image influences on loyalty patronage
behavior. He identifies that loyalty patronage is linked to customers’ store image and
past purchase experience. He postulates that loyalty patronage is the result of past
purchase experiences and the consumers’ favorable image of the store. If the customer is
satisfied with their purchase at the store, he or she will return to the store for next
purchases. This past experience will help customers to form his or her perception of the
store.
Some researches about consumer loyalty focus on the impact of service quality on
consumer loyalty intentions, a measurement of consumer loyalty. Sirohi et al., (1998)
find a significant relationship between service qualities and repurchase intention &
willingness to recommend - 2 measures of loyalty intentions.
In the study of consumer perceptions and store loyal intentions at supermarket, Sirohi et
al. (1998) explore that: the perception of value for money has a positive effect on
consumer loyalty intentions of consumers; service quality constructs (store operations,
store appearance, and personnel service) have direct positive effect on consumer loyalty
intentions; and perceived value of competitor has a negative effect on consumer loyalty
intentions (the higher the perceived value of competitor, the lower the consumer loyalty
intentions).
Bloemer (1997), in a study about consumers of a department store in Switzerland,
indentifies the significant relationship between store images and consumer loyalty
through the mediating role of store satisfaction. He also postulates that the relationship
between manifest satisfaction and consumer loyalty is stronger than the relationship

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between latent satisfaction and consumer loyalty by testing the combined effect of store
satisfaction, store choice involvement and store deliberation.
Orth and Green (2009) find the direct and indirect influences of store image (price/value,
service, atmosphere, product quality, selection, convenience) on store satisfaction and
consumer loyalty through mediating role of consumer trust including management
practices and policies and front line employees.
Recently, Jinfeng and Zhilong (2009) identify the relationship between five selected
store images (convenience, institutional factors, physical facilities, perceived price and
employee service) and consumer loyalty. This retailer equity study not only reveals the
relationship among the dimensions of retailer equity (retailer associations, awareness,
perceived quality and loyalty), but it also tests the effect of selected store image on each
dimension of retailer equity. However, the functions of other store image dimensions
like merchandising, advertising and promotions, after-sales service and store atmosphere
are not included in the research. The research is also limited within hypermarket. Other
retail categories need to be further studied such as department store, convenience store
and grocery store.
2.5 Theoretical model and hypotheses
2.5.1

Theoretical model

The model is established by inheriting four store image dimensions from Jinfeng and
Zhilong (2009) retailer equity model and retaining another four additional image factors
from a consumer perception study of Thang and Tan (2003). The model represents the
relationship between eight dimensions of store images (store convenience, physical
facilities, perceived price, employee service, advertising & promotions, after-sales
service, store atmosphere and merchandising) and consumer loyalty
In the model, store convenience, physical facilities, perceived price, employee service,
advertising & promotions, after-sales service, store atmosphere and merchandising play
the role of independent variables. Consumer loyalty is dependent variable. Figure 2-1
represents the theoretical model of the study.

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