This chapter outlines the overview of the whole research project. The aim of this research is to study the relationship between customer perceived value and customer satisfaction towards the hypermarkets in Malaysia. There are eight elements of the studies which include research background, problem statement, research objectives, hypotheses of the study, significance of the study, chapter layout and conclusion. The first part of the study will introduce the research background, problem statement and objectives that provide the basic understanding of the overall study. Next, the research questions provide arguments and enquires which needed for further analyse in order to get a better understanding in the field. The hypotheses will then develop from proposed conceptual framework. The following component is the significance of the study which will explain the importance and contribution of the study. Lastly, chapter layout of the research will be discussed and conclusion are drawn.
Retail industry is defined as an entity that sells goods or commodities directly to consumers through various distribution channels with the intention of earning a profit (Hudson, 2016). In retail industry, the stores can be in a physical building or online website. Some large retailers like Wal-Mart, Kmart and Target, the items are purchased from a manufacturer or wholesaler and then resell to the end user at a marked-up price. In general, retailers do not manufacture goods that they are selling but they are the final link in a supply chain that offer the products to the consumers for consumption. The only difference between retailers and wholesalers is that the retail businesses directly involved in the transaction with customers while the wholesalers only sell their goods to businessmen for other businesses purpose. Basically, there are four main categories of products or goods selling in retail industry which include foods and beverages, hard or durable goods such as furniture and cars that are considered as long-term products, soft goods such as clothing and footwear which have shorter -term use and life spans and also arts such as musical instruments and gifts (Hudson, 2016).
“Retailing industry in Malaysia has been transforming from traditional grocery retail shops to supermarkets and expanded into hypermarkets” (Hassan & Rahman, Transformation of hypermarket retailing industry in Malaysia, 2012). The emergence of hypermarket retailing in Malaysia since 1993 has improved the retail industry towards a more effective and efficient way. There are various types of retailers that have been identified and classified as shown in Table 1.1. Hypermarket is considered as a modern grocery retailing format that provides everything under one roof and it is a channel for products and goods distribution that sells variety of products based on self-service concept. According to Malaysian Magazines (2003), hypermarkets sell a variety of merchandises and groceries within an area more than 2,500 square meters to over 8,000 square meters which includes diverse services. It follows the criteria of fixed prices, no obligation to buy, service, entertainment and scale (Knee, 2002). The original hypermarket concept was based on three main elements which are one-stop shopping in large premises, large parking lots and also everyday low prices (Dupuis & Prime, 1996), while the new retail concept focuses on enhancing the competitiveness of the industry (Hassan & Rahman, Transformation of hypermarket retailing industry in Malaysia, 2012).
In the past, consumers used to buy the necessities and food items in a friendly neighbourhood mini mart or small grocery store as it was convenient to them. However, due to the narrow range of products available in mini marts, the consumers were no longer brand loyal and started to seek for other types of retail outlets which have various product assortment. Among all the retail outlets, hypermarkets are the retail stores which grow rapidly in the global marketplace. In Malaysia, hypermarkets began to develop in the early 1990s (Badarulzaman, Ahmad, & Lim, 2003). It can be said that an increase in the number of visits to hypermarkets encourages its expansion and development in Malaysia.
The presence of foreign sales concepts in Malaysia has made a dramatic change to the existing traditional retail concepts and the consumption behaviour of consumers (Amine & Lazzaoui, 2011). Modern retail concepts which adopted by hypermarkets put emphasis on fulfilling the consumer demand for better service quality, extended brand categories and comfortable shopping environment (Alexander & Myers, 1999). Due to this, hypermarkets can expand continuously and secure its market share in the competitive market. When there is a high potential opportunity, it attracts many foreign retailers including Tesco and Carrefour to expand their retail business in Malaysia. This scenario has made this industry moving forward within short duration (Hassan & Rahman, Transformation of hypermarket retailing industry in Malaysia, 2012).
As Malaysian are now too busy in work, they are seeking for a more efficient and time-saving way to purchase their daily needs. Hypermarkets with the concept of “one-stop shopping” offers convenient to the customers because they can purchase a wide range of products including international products in hypermarkets. Furthermore, better service quality and a pleasant environment offered in hypermarkets gain a positive response from consumers who pursue a good quality of life. As a result, a lot of consumers prefer to go to hypermarkets rather than traditional retail stores to purchase fresh products such as meats, dairy, vegetables and so on (Verhetsel, 2005).
Currently, the top players who dominate the market include Tesco, Giant, Mydin and Aeon Big. These hypermarkets brands are well-known among Malaysian. Based on the Figure 1.1, the market leader of hypermarkets in Malaysia is Giant which has captured 43.8% of total market share in the industry.
Based on the Table 1.2, it shows that the outlets of hypermarkets in Malaysia are increasing as the number of consumers visit hypermarkets are increasing. It proves that hypermarkets are gaining acceptance from the consumers and they are willing to spend their time there. According to Department of Statistics Malaysia (2015), the median monthly household income of Malaysian has increased by 11.7% to RM4585 in 2014 as compared to RM 3626 in 2012. It indicates that the consumers have greater purchasing power, thus attracting the retailers to expand their business in Malaysia. Among all the brands, Giant have the most outlets in Malaysia if compared to Tesco and Aeon Big. It has established 128 outlets in Malaysia by the year 2016 because they discover that there is a great opportunity in Malaysia.
“Malaysia is one of the affluent nations in Asia with a GDP per-capita of US $10000 in 2015” (Wahab, 2016). In Malaysia, there are 31.7 million of population in the year 2016 (Department of Statistics Malaysia, 2016). According to Trading Economics (2017), the unemployment rate among Malaysian has decreased from 3.50 percent in year 2015 to 3.40 percent in year 2016. This has significantly showed that the employment opportunities in Malaysia has increased by 0.1 percent. As unemployment rate decrease, it indicates that the customers can allocate appropriate amount of income on household expenditure. In order to achieve the organization goals, the retailers must identify their target customer so that the marketing strategic can be set based on their preferences. When the needs and wants of the customers are being fulfilled it can motivate their revisit intention (Davis & Hodges, 2012).
Population in Malaysia can be divided into socioeconomic groups based on household incomes. These groups are usually divided as lower class, middle class and upper class. Table 1.3 shows the percentage of populations collected from different states of Malaysia through quota sampling to conduct further research on Malaysian's income level. From the percentage of sample size in Malaysia chosen for the survey, the sample size in Selangor reached 38% while there is only 1% of population chosen from Terengganu. Based on Figure 1.2, 11 percent of Malaysian's income is below RM2000 and it can be categorized as lower income group, 32 percent of them are considered as lower-middle income group which earn a monthly income of RM 2000 to RM 4000. Meanwhile, 26 percent of Malaysian are upper-middle income group which have an income of RM 4000 to RM 6000, and 31 percent of Malaysian is holding monthly income of RM 6001 and above which is belong to upper income group. It indicates that most of Malaysian are belong to middle class and upper class. So, the prospective customers of hypermarkets will be lower middle class and upper middle class shoppers.
Generally, consumers will have different purchase experience in the retail outlets as different types of consumer products are offered by hypermarkets (Rahman, 2014). Among all the social class, lower-middle class and upper-middle class are the main customers who prefer to buy their necessities and groceries in hypermarkets (Reardon & Berdegue, 2008). Since hypermarkets provide a wide assortment of products and brands for customers to choose, consumers are able to compare product attributes and brands before they make any transactions. Consumers in lower-middle class are normally price sensitive and more attached to the promotional items (Boztepe, 2012). Consumers belong to this income group are also price conscious and they will seek for quality products that offered in an affordable price range (Afroj, 2012). Therefore, hypermarkets that sell the products in lower price can motivate them to make a purchase in the stores as well as encourage their revisit intention. For upper-middle income group, they emphasize on shopping experience and their standard of living. They will seek for quality products rather than a lower price product. Basically, they are more focus in term of service quality, store environment, and spending time with their families. According to Ragel (2014), as the consumers are spending more time on leisure shopping, the retailers are concentrating on the ways to develop their shopping centres with more leisure pursuit for the purpose of attracting their target customers.
As hypermarkets adopting one-stop shopping concept, consumers can get their necessities easily in a single location. Hypermarkets also target variety seekers as their potential customers because the variety seekers have a little brand loyalty and they enjoy variety in retail experiences, tastes and food choices. This means that the consumers in hypermarket are more responsive to sales promotion and new product offerings when they are newly launched in the market. In a survey which has been conducted in 60 countries with 30,000 respondents, it shows that consumers are more inclined to try new products and 73% of Southeast Asian consumers said that they had purchased new products during last grocery shopping, which is 16% higher than the global average of 57% (Nielsen Global New Product Innovation Survey, 2015). According to Nielson Global New Product Innovation Survey (2016), there are about 63% of Malaysian consumers prefer to buy new products which are familiar to them and liked it when they are being offered new product options meanwhile 33% of Malaysian proclaimed that they are an early purchaser of new product innovation. This indicates that part of the Malaysian is variety seeker and they are willing to shell out money for experiencing new things. However, variety seekers are hard to retain in a long-term, therefore promotions and continuous new products innovations are needed in the hypermarket to retain the customer loyalty.
The emergence of e-commerce has affected the global economy in different ways. It offers buyers and sellers a new form of communication and also provides a platform to create a new marketplace (Ghayal & Dhingra, 2012). Recent years, online shopping has attained immerse popularity as people find it convenient and easy to shop from anywhere (Saha, 2015). According to Saha (2015), “online shopping is a form of e-commerce which allows consumers to directly buy goods and services over the Internet through a virtual shop”. Large variety of choices, easy comparison, convenience for purchase and doorstep delivery are the major driving force for the consumers to choose e-commerce (Ghetia, 2014). Today, e-commerce is expanding rapidly in Malaysia and the physical retailers including hypermarkets continue to feel threatened by the online shopping sites (Mookerji, 2014).
According to the survey conducted by Nielsen Company (2015), there are nearly 58 percent of global respondents are willing to shop at a virtual store in the future. It puts the brick-and-mortar business in the state of anxiety. Consequently, hypermarkets are facing intense competition as e-commerce are becoming popular and accepted by the consumers. This brings a significant impact to hypermarkets which they started to downsize their stores in the market. For example, Carrefour is one of the hypermarkets that has closed its shops in much of South East Asia region (Daneshkhu, Cookson, Brown, & Rigby, 2010). The reason why Carrefour failed in Asia is because the price offered in Carrefour is not attractive to the consumers. According to Trichy (2016), “while their stores did carry private labels, given the Western tilt in product range, prices remained generally higher”. From the perspective of consumers, Carrefour stores which located in downtown, higher parking fees and traffic congestion also cause the business to operate at a loss (Krishnan, 2012). It shows that the hypermarkets are under pressure and effective solutions must be generated to curb this issue.
Although e-commerce has a bigger competitive advantage, modern retails such as hypermarkets have their own core value to compete in the industry. Online shopping cannot provide consumers with a touch and feel experience whereas the consumers can obtain powerful sensory experience in hypermarkets. (Picot-Coupey, Hure, Cliquet, & Petr, 2009). It can become the marketing tactic of hypermarkets in luring customers and maintaining a profitable business. In short, due to the changing consumer behaviour, the retailers should study on their target customers' needs and demands as well as identify their preferences and buying behaviour so that a better service can be provided to retain their customers.
To achieve success in their businesses, it is necessary for the retailers to analyse the factors influencing the customer perceived value which in turn leads to customer satisfaction. Basically, there are four dominant factors which must be studied in this research. It includes service quality, product variety, store environment and low price. In general, service quality can be defined as a critical component of customer perception about the service itself. Customers perceived services in terms of its quality and how much satisfaction that they received from their experiences (Zeithaml, Parasuraman, & Malhotra, A Conceptual Framework for Understanding E-Service Quality: Implications for Future Research and Managerial Practice, 2005). Besides, broad assortments which can be found in hypermarkets can increase the probability that consumers will get their desired products and offer flexibility for those who seek for variety (Broniarczyk & Hoyer, 2006). Moreover, consumers are becoming more concerned about the environment of hypermarkets nowadays. From the perspective of consumers, the store environment can affect their shopping experience and overall satisfaction towards the hypermarkets (Theodoridis & Chatzipanagiotou, 2009). This indicates that the store environment can be the competitive advantage of the hypermarkets. Low price is also an essential criterion which closely related to shopping experience of consumers. Since the hypermarkets are attacking by e-commerce competitors, the retailers should tempt other services and promotional activities so that hypermarkets will be the top choice of consumers (Marinescu, Toma, & Mihai, 2006). In brief, it is important for the retailers to further study how these four dominant factors can enhance customer satisfaction so the hypermarkets can offer a better service compared to the click-and-mortar stores.
Hypermarkets in Malaysia are facing challenges after the emergence and growth of e-commerce. However, there are only few researches conducted based on hypermarkets in Malaysia context. Table 1.3 shows the researches that have been done.
Although there are many researches have been done to support the proposal that product variety, store environment, low price and service quality have an impact on customers' satisfaction and their buying behaviour, the researches have been done separately. Therefore, the purpose of this research is to bridge the research gap by investigating the relationship between customer perceived value and customers' satisfaction among hypermarket shoppers in Malaysia so that the hypermarkets will not operate at a loss due to the adoption of e-commerce.
The purpose of this research is to attempt to solve the problem statement made. The research objectives can be divided into two categories which are the general objective and specific objective.
This study is conducted to determine the relationship between customer perceived value and customer satisfaction towards hypermarkets in Malaysia. Since Malaysian is having a bustling lifestyle every day, they tend to purchase the goods in a highly efficient and convenient way. Due to this reason, the retailers are facing challenges in studying the factors that might affect the customer perceived value in the context of hypermarkets. Thus, it is important for hypermarket retailers to foster a better understanding and knowledge on factors that influence customers' satisfaction when they visit the stores. By understanding the factors that influence customers' satisfaction, retailers can plan and develop effective marketing strategies in order to meet and fulfil customer expectations. On the other hand, after acquiring useful resources and information that aids in understanding their target customers, retailers are able to gain competitive advantage in the market and compete with their rivalry in the same industry.
This chapter briefly explain the relationship between customer perceived value and customer satisfaction where it will define the dependent and independent variables. The literature review is conducted to further understand the term, definition and the characteristics of research topics. Moreover, by adopting and modifying conceptual framework, it can graphically summarize the stated hypotheses and relationship between the independent variables and dependent variables as well. This section ends with hypotheses development
Retailing is defined as activities involving selling goods and services in small quantity to consumer (Lim, Badarulzaman, & Ahmad, 2003). In the concept of retailing, it is a small-scale business concerning the process of subdivision and sale or resale (Davies, 1993). In modern time, retailers act as intermediaries in the process of distributing consumer goods and serve as purchasing agent of shoppers (Davies, 1993).
Traditional retail market refers to as a platform that sells food, household goods, and clothing in either indoor or outdoor context (Gonzalez & Waley, 2012). According to Suttle (2017), retail goods can be sold over stores, kiosks, or even via mail or the Internet. Retail businesses can include grocery, drug, department and convenient stores. However, the online retailing is experiencing a rapid growth and poses a direct threat to other forms of retailers (Miyazaki & Fernandez, 2000). Although online shopping has a number of benefits to consumers, physical stores can still dominate the market with strong key advantages over ecommerce (Nielsen Company, 2015).
Retail store have divided retail trade into small-scale and large-scale establishments (Lim, Badarulzaman, & Ahmad, 2003). Small-scale retailers include the single proprietary stores and non-store operators such as hawkers, peddlers and market stalls. For the large-scale retailers, it includes superstore, discount store, department store, supermarket, hypermarket and shopping centre (Lim, Badarulzaman, & Ahmad, 2003).
According to Guy (1980), goods selling in retail stores can be divided into three groups which are convenience goods, shopping or comparison goods and special goods. Convenient goods normally consist of inexpensive products that people can easily find it in a retail store like convenient stores, hypermarkets and supermarkets. Convenient goods consist of fresh produce food items, grocery staples and basic commodities (Murphy & Enis, 1986). Meanwhile, shopping goods refer to goods that are very similar in nature and the final purchase decision is usually determined by the lowest price. A few examples of shopping goods are washers, dryers, or a fridge (Lombardo, 2017). Specialty goods are unique items that appeal to higher-income group and the products are usually special and non-substitutable such as imported wines, expensive sports cars, and paintings by well-known artist (Murphy & Enis, 1986).
According to Prime (1996), the concept of the hypermarket was first developed and launched by Carrefour in France in the year 1963. Carrefour became the first to enter the industry of hypermarkets in the world and played a major role in retail revolution (Prime, 1996). However, after the trend of hypermarkets spread, it began to expand to South America by Euromarché, Carrefour, Auchan and Leclerc (Prime, 1996). It shown a drastic increase in number of hypermarkets in South America on that time. In year 1969, triple the number of hypermarkets have established with 45 new outlets every year in France (Howe, 2003). After penetration of hypermarkets in South America, the marketers started to tackle Asian market and the first hypermarket has successfully established in Taiwan (Prime, 1996). In Malaysia, the first hypermarket available is Makro which started its business since year 1993 (Lee, 2004).
“Hypermarket is a self-service retailing format that offers a wide assortment of products in a retail area over 2,500 meter square” (Catalun'a, Franca, & Ramos, 2005). According to Roslin & Melewar, (2008), hypermarkets usually offer a wide assortment of food and general merchandise at discount prices with the aim to indulge the consumers. In Malaysia, hypermarket is emerging and spreading over the nation rapidly. The major players such as Carrefour and Giant have increased the number of stores in cities, and new players such as Tesco also joined the bandwagon to capture market share (Roslin & Melewar, 2008). Hypermarket retailing is one of the forms of modern grocery retailing in Malaysia on that time and it is experiencing widespread expansion in recent years (Hassan, Sade, & Rahman, Malaysian hypermarket retailing development and expansion, 2013). In Figure 2.1, it shows that in the year 2009, the market is dominated by Giant which consists of 44% shares, followed by 37% by Tesco, 16% by Carrefour, 2% by Pacific and the remaining 1% by Sulwah (Yeo, Sim, Artispong, Cheah, & Lioe, 2015). In year 2014, Giant remains as the biggest retailer that dominate in the industry with 44% of market shares, followed by Tesco which consists of 38%, 15% by Aeon Big, 2% by Pacific and the remaining 1% by Sulwah (Yeo et al., 2015). However, Carrefour has announced its departure from Malaysia's retail industry and being took over by Aeon Big.
Moreover, the opportunity for Malaysian hypermarkets has become widen in Malaysia. For example, Mydin Mohamed Holdings Berhad (Mydin) is one of the players that is successful in the local markets through selling variety of products including cost effective Muslim clothes, apparel and prayer materials, food and non-food items in order to achieve organisational goals (Hassan, Sade, & Rahman, Malaysian hypermarket retailing development and expansion, 2013). The localized concept of Halal adopted by Mydin has boost competitiveness among hypermarkets in Malaysia, especially Giant and Tesco. (Zain, 2008)
Hypermarkets' initial concept are based on three key elements which include fulfilling one-stop shopping, with large car parking lots and low prices (Prime, 1996). As stated by Kamath & Godin (2001), hypermarket can be defined as a store with everything under one roof, self-service, discount prices and free parking. “In hypermarket, typical customer is assumed to travel up and down the aisles of the store, stopping at various category locations, deliberating about her consideration set, choosing the best option, and then continuing in a similar manner until the path is complete” (Larson, Bradlow, & Fader, 2005). It sells necessities which allows consumers to get everything they need when they visit the store. Most products in hypermarkets are fast moving consumable products categorized in different departments (Hassan, Sade, & Rahman, Malaysian hypermarket retailing development and expansion, 2013). It is convenient and time saving as people can get anything just to visit one hypermarket but not switching place to place. According to Waerden, Borgers, & Timmermans, (1998), number of parking spaces, the facilities for supermarket trolleys, and the location of the parking lot are the key features that consumers will consider before visiting hypermarkets.
The concept of service quality is viewed as an important factor of competitiveness in the development and maintenance of satisfying relationships with consumers (Ojo, 2010). The main strategy for an organisation to achieve success in the highly competitive and dynamic environment is by delivering better service quality (Zeithaml, Berry, & Parasuraman, The Behavioral Consequences of Service Quality, 1996). Over the past decade, the concept of service quality has become an important facet to organizations due to its strong effect on business performance, customer satisfaction, customer loyalty and profitability (Seth, Deshmukh, & Vrat, 2005). When customers are asked to evaluate retail service, they will normally compare the service that they received with their expectations. Customers are satisfied when the perceived service meets or exceeds their expectations and feel dissatisfied when the service falls below their expectations (Weitz & Levy, 2014). The quality of service is the competitive advantage of the hypermarkets which determine the success or failure of the firm itself. When the level of the expectation falls under the minimum level, the consumers will eventually feel disappointed and this might hinder the revisit intention towards the hypermarket. For that reason, organizations have been urged to view service quality through the way customers perceive it to be as this enables them to channel their resources on the right quality programs (Gronroos, 2000). Parasuraman, Zeithaml & Berry (1988) defined service quality as “a global judgment or attitude relating to the overall superiority of the service”. In order to assess customers' expectations and perceptions of service quality, it requires an understanding of customers' relationship by the service provider. According to Zeithaml, Bitner, & Gremler (2009), “a sound measure of service quality is necessary for identifying the aspects of service needing performance improvement, assessing how much improvement is needed on each aspect and then evaluating the impact of improvement efforts”. Retail Service Quality Model (RSQS) which is used commonly to measure service quality in department stores, hypermarkets and discount stores in most of the countries has been developed (Dabholkar, Thorpe, & Rentz, 1995). It composed of five dimensions which are physical aspects, reliability, personal interaction, problem solving and policy (Banerji & Farooqi, 2013). “Physical aspects include equipment and fixtures, physical facilities, materials associated with store and also the appearance and convenience offered to the customers in terms of physical facilities” (Deshwal, 2015). The reliability dimension includes keeping promises to do something, providing right service, availability of merchandise and error-free sales transactions and records too (Banerji & Farooqi, 2013). For personal interaction, it includes the knowledge of the employees in answering the questions of the customers and the willingness to respond to customers' requests (Banerji & Farooqi, 2013). As stated by Deshwal (2015), problem solving indicates the willingness of the hypermarkets or retailers in handling returns and exchanges and also showing sincerity in receiving the negative feedbacks and complaints. The last dimension is policy which symbolises the quality of a merchandise, convenience of parking and the operating hours and the acceptance of major credits cards (Banerji & Farooqi, 2013). RSQS model is considered important in retail industry especially for hypermarkets because if the level of commitment in the model is in maximum, it shows that the firm itself had gain a core value compare to other competitors. In this study, dimensions of service reliability and service responsiveness will be the focus of discussion.
The construct of reliability measures the store's ability to deliver the service that has promised to consumers without any errors (Huang, 2009). This implies that the store needs to practice a philosophy of getting things right at the first time within the operating hours (Beneke , Hayworth, Hobson, & Mia , 2012). It must be able to keep the promise and provide timely and accurate information to consumers (Newman, 2001). Accurate information in service reliability includes clear product pricing as well as correct and precise information regarding the products that show to consumers (Vázquez, Bosque, Dı́az, & Ruiz, 2001). Furthermore, service reliability also refers to how the hypermarkets are able to provide merchandise when required in some special events such as festival promotion. A study conducted by Dabholkar, Thorpe & Rentz (1996) revealed that consumers actually view the term of reliability as a combination of keeping promises and also doing it right. In the hypermarket environment, limited availability of goods or long queues in making the payment transactions are considered as a lack of responsiveness on behalf of the retail store itself. This is because longer waiting time for making payment in cashier will result in a negative emotion and perception among consumers and thus decreasing the level of satisfaction towards the service provided (Rigopoulou, Tsiotsou, & Kehagias, 2008). According to Zinn and Liu (2001), an outage of stocks will cause consumers in leaving and forgoing their purchases in the store and intend to seek for the products demanded in somewhere else. In a long-run view, it will result in negative impact on consumers patronage and eventually leads to detrimental perceptions or negative word of mouth if there is a continuous stock outage (Grant & Fernie, 2008). The higher customers appreciate personal interaction, the higher the overall evaluation of retail service quality is (Nguyen & Nhat, 2007). So, it is essential for the hypermarkets to provide a right service, available merchandise and also an error-free transaction with consumers.
Service responsiveness can be defined as the store's capability in handling goods returns and exchanges as well as in resolving customers' problems or complaints (Beneke , Hayworth, Hobson, & Mia , 2012). In simple word, service responsiveness can be concluded in a term which is problem solving. It includes a store's ability to express a sincere and genuine interest in solving the customer's problem and extend to the ability of staffs in handling complaints immediately (Swanson & Kelley, 2001). Service failures will arouse dissatisfaction and anger that will lead to a more disastrous consequence for the retailers when there is no effective solution for the problem (Chang, Lee, & Tseng, 2008). There is an evidence to support the idea that consumers will have a more favourable perceptions towards the stores which have effective problem-solving processes in place (Huang, 2009). According to Lewis and Spyrakoloulos (2001), a good problem-solving system is in a satisfied level when it can detect and solve problems, prevent dissatisfaction and even encourage feedbacks from customers. Feedback or complaints are considered important for the retailers as they help the firm to make improvements and amendments to serve the customers in a better way. It can be implemented in the form of customer care lines, helpful staffs, customer service desks or even an official website that allows the consumers to reach the organisation easily (Beneke , Hayworth, Hobson, & Mia , 2012). Moreover, the post-transaction service offered by the retail stores can build credibility and hence influences favourable perception of consumers towards the firm in the long term (Lindquist, 1974). Therefore, the retailers should emphasize on the service responsiveness within the store.
In general, assortment can be defined as the total number of items sold by retailers in certain business transactions (Balderston, 1956). As a key component of marketing mix, assortment is considered as a strategic positioning tool to fulfil the needs of customers and increase their retention (Kahn, Kalwani, & Morrison, 1986). Since hypermarket is one of the types of retail outlets, consumers always expect a large quantity of products offer on the product display racks. This indicates that the product variety offer by hypermarkets can be one of the attractions to draw customers to their hypermarkets. It is undeniable fact that a higher variety of choices provides a greater opportunity to satisfy consumption needs of the customers (Baumol & Ide, 1956). Since consumers are unable to foresee their future tastes, hypermarkets with a certain degree of variety keeps their options open (Kahn, Moore, & Glazer, 1987). Therefore, in order to emerge as a leader in the industry, it will be more preferable for the hypermarkets to order a variety of brands and products from different suppliers so that people will feel delight when visit the hypermarkets and as a result facilitates impulse buying among customers. For instance, one of the world's largest company by revenue, Walmart has started to expand its product assortment 11% per store with the intention to accelerate the sales and reaffirm its position as the most affordable retailer (RIS News, 2011).
With the aim to beat the other competitors in the market as well as online shopping platforms, the hypermarkets adopt the strategy of offering larger assortment size of products in the stores. This strategy can be considered as a beneficial marketing tactic for hypermarkets to attract their potential customers. For time-constrained consumers, one-stop shopping in hypermarket that offers broad product assortment is a favourable choice for them as it is more convenient and time-saving (Messinger & Narasimhan, 1997). From a different perspective, although larger assortment can benefit the consumers, the profits gained by the hypermarkets might decline as the operational costs increase (Oppewal & Koelemeijer, More choice is better: Effects of assortment size and composition on assortment evaluation, 2005). This scenario indicates that offering greater amount of goods in the hypermarkets may cause the store to operate at a loss due to high inventory cost. For that reason, assortment planning is essential to retailers in making sure that the hypermarkets are operating successfully (Hasan & Mishra, 2015).
From the perspective of consumers, assortment is one of the main factors that can affect the store choice (Briesch, Chintagunta, & Fox, 2009). So, it can be said that wide assortment in hypermarkets will directly influence the consumer decision making and store patronage behaviour. It is imperative for the retailers to provide more product choices to their customers so that it can gain a competitive advantage in the market. This is because many studies have found that larger assortments can attract more customers from wider distance as compared to smaller assortments (Oppewal, Timmermans, & Louviere, Modelling the Effects of Shopping Centre Size and Store Variety on Consumer Choice Behaviour, 1997). The main reason why consumers prefer larger assortments is because they intend to increase efficiency in term of time and transportation through one-stop shopping (Messinger & Narasimhan, 1997). Besides, as stated by Oppewal & Koelemeijer (2005), “consumers may infer that a large assortment is more likely to contain an alternative that can fulfil the purchase goal than a small assortment.” This shows that product variety can help the hypermarkets to achieve greater customer satisfaction and maintain long-lasting customer loyalty. Thus, the research will focus on the importance of product arrangement and product depth that can influence the customer perceived value and customer satisfaction towards the hypermarkets (Simonson, 1999).
Generally, product arrangement in a hypermarket is viewed as an important dimension that positively related to the consumers' perceptions of the variety offered in the store. In fact, consumers have always enjoyed the process of browsing through stores or “window shopping” to identify which products are available for them to purchase (Morales, Kahn, Mcalister, & Broniarczyk, 2004). If consumers perceive that the hypermarket provides a narrow range of choices, it will influence the positive feelings among consumers towards the hypermarket and they may be less likely to visit the hypermarket in the future. This strongly suggests that the product organisation in the store is a critical factor that determine the consumers' evaluation of assortment. Taking the customers' point of view, disorganised sets of assortment will more likely to be perceived as offering less variety than organised sets (Chernev, 2011). As mentioned by Broniarczyk & Hoyer, when there is a large assortment, actual variety can be recognised easily if the products are displaying on the shelves neatly. So, it is necessary for the retailers to ensure that the products available are well-organised into aisles. Normally, the products in hypermarkets can be arranged either by brand or by model (Broniarczyk & Hoyer, 2006). Morales et al. (2004) proposed that when there is a match between the way consumers categorise the items and the way retailers group items will lead consumers to perceive more variety. Hence, the retailers must make decisions about the way to arrange their products as it will affect the customers' purchasing decisions and satisfaction towards the hypermarket.
22.214.171.124 Product Depth
Normally, the product range of a hypermarket tends to be extensive in order to provide the customers with one-stop shopping experience. Each of the retailers should clearly define the width and depth of product mix offered in the hypermarkets so that it can raise the consumer assortment perception and increase the likelihood of store choice. According to Kotler &Keller (2012), the width of assortment can be defined as the number of different product lines that the hypermarket carries. Meanwhile, the product depth can be referred to as the number of variants available for each product in the line (Kotler & Keller, Marketing Management, 2012). However, it is suggested that the depth of the assortment can influence the customers' perception of variety, but the width of assortment solely gives advantage in building positive relationship between the firm and consumers (Piris, 2014). According to the result of a study, the attributes of brand and flavour are more important than any other attributes in the category (Boatwright & Nunes, 2001). Since these attributes characterise the depth of assortment, it can thus be postulated that the depth of the assortment plays a more important role in defining the perception of variety among consumers (Piris, 2014). So, we can conclude that the depth of product mix offered by the hypermarkets has a greater impact on the consumers' store choice as compared to the width of product mix. In brief, the retailers should focus on the product depth due to the reason that the product width does not exert a direct effect on the perception of variety (Piris, 2014).
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