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Procedia - Social and Behavioral Sciences 00 (2011) 000–000 Procedia - Social and Behavioral Sciences 30 (2011) 2134 – 2138

Procedia Social and Behavioral Sciences www.elsevier.com/locate/procedia

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Structural Determinants Of Customer Satisfaction In Loyalty Models: Turkish Retail Supermarkets Fatma Noyan a *, Gulhayat Golbasi Simsek b a

Yıldız Technical University, Faculty of Arts & Science, Department of Statistics, Davutpaşa Campus, Esenler, 34210, Istanbul/Turkey Yıldız Technical University, Faculty of Arts & Science, Department of Statistics, Davutpaşa Campus, Esenler, 34210, Istanbul/Turkey

b

Abstract Customer satisfaction and loyalty are very important to develop the retail strategies. The main goal of this study is to examine the determinants of customer satisfaction by customer and store related factors. In this study, using structural equation modeling, structural determinants of satisfaction are investigated in the context of loyalty models. We use Dickson’s (1982) and Bloemer’s (2002) frameworks as a starting point and distinguish a person determinant, a situation determinant and a person within situation determinant of customer satisfaction. The results of this study provide that positive affect, image and customer relationship proneness play a significant role in creating satisfaction. © 2011 2011 Published PublishedbybyElsevier Elsevier Ltd. Open access under CC BY-NC-ND license. Ltd.

Selection and/or peer-review under responsibility of the 2nd World Conference on Psychology, Counselling and Guidance. Keywords: Customer Satisfaction, image, customer relationship proneness, structural equation modeling

1. Introduction Slow growth and intense competition in retail markets in recent years increase the need for the retailers to understand the determinants of customer satisfaction (Sirohi, McLaughlin, Wittink, 1998). Customer satisfaction is a well known and established concept in several areas like marketing, consumer research, economic psychology and economics. Different types of satisfaction have been identified. In line with Oliver (1989) we perceive satisfaction as a post-consumption evaluation or “A pleasurable level of consumption related fulfillment” (Blomer,2002). Satisfaction is a consumer’s post-purchase evaluation of the overall service experience. It is an affective reaction (Menon and Dubé, 2000) in which the customer’s needs, desires and expectations during the course of service experience have been met or exceeded (Lovelock,2001). Satisfaction in this sense, could mean that a supermarket has just barely met the customer’s expectations, not exceed nor disappointed those expectations. Satisfaction has been considered as a central concept in the marketing literature. Retailers recognize that customer satisfaction (CS) plays a key role in a successful business strategy (Gómez, McLaughlin, Wittink, 2004). Retailers generally have little knowledge of the antecedents of customer satisfaction (Blomer,2002; Cronin et.ad.2000). What is unclear is the exact nature of that role, how satisfaction should be managed, and whether managerial efforts aimed at increasing satisfaction lead to higher store sales (Gómez, McLaughlin and Wittink, 2004). Supermarket shopping is

* Fatma Noyan. Tel.: +902123834428; fax: +902123834420. E-mail address: [email protected] 1877-0428 © 2011 Published by Elsevier Ltd. Open access under CC BY-NC-ND license. Selection and/or peer-review under responsibility of the 2nd World Conference on Psychology, Counselling and Guidance. doi:10.1016/j.sbspro.2011.10.414

Fatma Noyan andFatma Gulhayat Golbasi Simsek– /Social Procedia Social and Sciences Behavioral 30 (2011) 2134 – 2138 Noyan / Procedia and-Behavioral 00 Sciences (2011) 000–000

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often categorised as a self-service retail environment. A supermarket is a large, departmentalised retail store that primarily sells food items (Marshall et.al.,2001), while a department store is larger, divided into different departments, and also provides an extensive assortment of other goods and services. For supermarket retailers wanting to build relationships with their customers, being able to track their levels of satisfaction with the key elements of the supermarket image is extremely important. From the retailers perspective the aim is to minimize the reasons for complaints and dissatisfaction and the cost of a service recovery plan (McCollough, Berry and Yadav, 2000) whilst establishing a track of direct feedback from customers about their reactions to those key elements. A focus on one’s current customers, if it is results increased satisfaction, may also generate other benefits, for example, the generation of loyalty, the generation of positive word-of-mouth…. An understanding of customers’ satisfaction determinants is an important basis for the identification of optimal retailer actions. The aim of the research is to identify specific elements of CS that individually and/or collectively influence customers’ evaluation of, and satisfaction with, CS in supermarkets and the consequent contribution towards repeat purchase behavior in a Turkey context. The main goal of this study is to examine the determinants of customer satisfaction by customer and store related factors. 2. Methods In this section we discuss and develop the conceptual model. After that, we outline the sample and the methodology and provide the results of the measurement and structural model. 2.1. Conceptual model of customer satisfaction The conceptual framework of this study builds upon the works from several disciplines such as retailing, consumer behaviour, marketing, and psychology. The conceptual models found in the literature mainly dealt with the image in consumer/shopping behaviour, store selection, store image and different levels of evaluations embedded in satisfaction structure. We test the conceptual model introduced below on data collected by four large supermarket chain form their own shoppers. The initial model (Figure 1) has four latent variables based on the various areas in which the survey questions were asked. The model in Figure 1 is an adaptation of a model proposed by Dickson (1982) and Bloemer (2002). Our prime interest is in assessing some disregarded antecedents of customer satisfaction in terms of store image, positive affect and customer relationship proneness (Bloemer,2002). In this study we use Dickson’s (1982) and Bloemer’s (2002) frameworks as a starting point and distinguish a person antecedent (customer relationship proneness), a situation antecedent (store image) and a person within situation (positive effect) antecedent of customer satisfaction. Customer relationship proneness (CRP) has an important affect on customer satisfaction (Odekerken-Schröder G., De Wulf ve Schumacher, 2003; Bloemer,2002). As a result we posit that: H1: A higher level costumer relationship proneness leads to a higher level of satisfaction. Store image (SI) is recognized as another important antecedent of customer satisfaction (Bloemer and De Ruyter,1998). A customer who perceives a positive image of a particular store is more likely to be satisfied with a store than a customer who perceives a less positive store image. Therefore, we formulate the fallowing hypothesis: H2: A more positive store image leads to a higher level of satisfaction Positive affect (PA) has also been shown to be an important antecedent of satisfaction (Menon and Dube,2000; Westbrook and Oliver,1991,Bloemer,2002). Therefore, we expect a positive relationship between positive affect and satisfaction. H3: A higher level of positive affect leads to a higher level of satisfaction. A costumer, who prefers a continuous relationship with a supermarket in general, is expected to experience more positive affect in the relationship with one particular supermarket than a costumer who has no desire for enduring relationship with supermarkets in general (Bloemer,2002). As a result, we hypothesize: H4: A higher level of customer relationship proneness leads to a higher level of positive affect. 2

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Fatma Noyan and Gulhayat Golbasi Simsek - SocialSciences and Behavioral Sciences 30 (2011) 2134 – 2138 Fatma Noyan / Procedia – Social/ Procedia and Behavioral 00 (2011) 000–000

Donovan and Rossiter (1982) and Bloomer (2002), argue that customers who perceive a positive store image reveal, as a result of this, more positive affect. In line with this argument, we hypothesize: H5: A more positive store image leads to a higher level of positive affect. We specify a model to explain customer satisfaction and other aspects relevant to shop behavior as determinants described earlier (illustrated in Figure 1)

Figure 1. Conceptual model of customer satisfaction

2.2. Data and Measures Sample used in this study consists of 1530 customers shopping from 102 stores belonging to four Turkish supermarket chain in Istanbul. The data were obtained applying a questionnaire to 15 customers for each of 102 stores. A face-to-face interview survey is conducted to collect data. The sample was found to be representative for the costumers of the local supermarket chain in terms of gender, age, number of household members ad net household income. The design of the questionnaire was based on multiple-item measured scales that have been validated and found to be reliable in previous research. All determinants were measured on ten-point Likert scales ranging from completely disagree to completely agree. The measurement items of the different determinants (positive affect, costumer relationship proneness and store image) and their origin are shown in Table 1. Table 1 provides the results of the measurement model after the unreliable items were eliminated. 2.3. Results Maximum likelihood estimation was applied to the covariance matrix in order to test the structural equations model in Mplus 6.1 The chi-square value is significant (1244.026 with 203 degrees of freedom), a finding not unusual with large sample sizes. In general the indicated fits are adequate, including RMSEA; which is 0.058, and SRMR being 0.028, CFI: 0.972 Comparing our absolute and incremental fit indices with the generally recognized levels of fit indices (Baumgartner and Homburg,1996). Table 1. The results of the measurement model R2 Customer satisfaction (Brumly,2002) I think shopping in this supermarket is a right decision The supermarket aims to satisfy the customer I am pleased to prefer this supermarket. I am pleased to shop this supermarket Generally, I am satisfied with this supermarket I am satisfied with pricing according to quality of products in this supermarket 3

0.760 0.755 0.791 0.809 0.762 0.720

Loading 1.000 0.969 1.013 1.021 0.996 1.023

Standard Erorr 0.00 0.02 0.00 0.00 0.01 0.02

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I am really satisfied with this supermarket I am satisfied with service that I get from this supermarket Store Image (Glosh,1994) This supermarket has friendly personnel This supermarket offers value for money This supermarket has a nice atmosphere This supermarket offers excellent service supermarket This supermarket tries to ensure customer loyalty This supermarket develops programs to ensure customer loyalty This supermarket is committed to its customers Positive Affect (Bloemer,2002) I feel pleased in this supermarket This supermarket confirms my expectations I feel comfortable in this supermarket Costumer Relationship Proneness (Bloemer,2002) Generally, I am someone who wants to be a regular customer of the supermarket Generally, I am someone who wants to be a steady customer of the supermarket I see many benefits of shopping this supermarket

0.781 0.787

1.045 1.021

0.01 0.00

0.616 0.734 0.665 0.794 0.802 0.765 0.784

1.000 1.087 1.045 1.160 1.170 1.167 1.171

0.000 0.028 0.029 0.029 0.029 0.030 0.029

0.833 0.847 0.826

1.000 1.007 0.866

0.000 0.016 0.019

0.827 0.910 0.669

1.000 1.007 0.866

0.000 0.016 0.019

Table 2 shows the detailed results related to the structural model. All hypothesized direction, implying support for our conceptual model. Our results show that customer relationship proneness, store image and positive affect have positive impact on customer satisfaction and together explain 66.7 % of its variance. Table 2 The results of the structural Model Latent variable

Hypothesis

Costumer Relationship Proneness Satisfaction Store Image Satisfaction Positive Affect Satisfaction Costumer Relationship PronenessPositive Affect Store ImagePositive Affect Squared multiple correlation for structural equations (R2) Satisfaction

H1 H2 H3 H4 H5

Estimate

Standard Erorr 0.020 0.047 0.042 0.106 0.095

0.235 0.318 0.294 2.177 2.083

t -value 11.662 6.821 7.044 20.447 21.977

0.666

3. Discussion Driven by rapidly chancing retail environments, more demanding customers, intensified competition, and slowgrowth markets, retailers are more than ever obliged to continually focus on establishing customer satisfaction and customer loyalty. Increasing competition with globalization, changing customer demands and needs made it harder for the provision of customer satisfaction and customer loyalty. Enhancing and retaining customer loyalty has been identified as a major source of competitive advantage within the retailing sector (Chang and Tu, 2005; Rajaguru and Matanda,2006). Managers need to develop strategies that recognize customer loyalty as a multifaceted and complex construct influencing customer preferences and decision making (Huddleston et.al.,2004). Especially in the supermarkets, where competition intense each day, it is very important for the companies to meet the needs and wants of the customers and satisfying them. In order to attract customers to their own supermarkets, managers conduct intensive marketing campaigns and expect that these campaigns really help in attracting customers to their own supermarkets. Knox and Denison (2000) highlight the importance of developing retail strategies to manage customer. Therefore, focusing on factors that can influence customer satisfaction and loyalty is imperative (Sirohi, Mc Laughlin and Wittink, 1998). In this study, using structural equation modeling, structural determinants of satisfaction are investigated in the context of loyalty models. This research has proposed a conceptual framework to investigate the effects of customer relationship proneness, store image, positive affect on customer satisfaction. To test the conceptual framework, SEM has been used the analyze the data from 1530 customers. The results of the study indicate that positive effect of customer relationship proneness, store image, positive affect are significantly 4

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and positively related to customer satisfaction. We found significant positive effects of customer relationship proneness and store image on positive affect. Satisfaction is empirically determined by explaining 66.7% of its variance by customer relationship proneness, store image, positive affect. The results of this study provide important implications for retail marketing managers and can aid in designing and retail strategies to improve customer relationship proneness, store image, positive affect and develop customer satisfaction. Our study includes an illustration of how retailers can use these links to develop appropriate customer satisfaction policies leading to increased store sales. Acknowledgements This research is fully supported by a grant from the Scientific and Technological Research Council of Turkey (TUBITAK) (Project No.110K098) References Baumgartner, H., & Homburg, C. (1996). Applications of structural equation modeling in marketing and consumer research: A review. Int J Res Mark, 13, 139–161. Bloemer, J., & Schroder, G. (2002). Store satisfaction and store loyalty explained by customer and store related factors.Journal of Consumer Satisfaction, Dissatisfaction and Complaining Behavior, Vol. 15, pp. 68-80. Bloemer, J.M.M., &De Ruyter, K. (1998). On the relationship between store image, store satisfaction and store loyalty. European Journal of Marketing Management, 32, 5/6, 499-513. Chang C.H., & Tu, CY. (2005).Exploring store image, customer satisfaction and customer loyalty relationship: evidence from Taiwanese hypermarket industry. J. Am. Acad. Bus., 7(2): 197–202. Cronin, J. J., Brady, M. K., & Hult, G. T. M.,(2000), Assessing the effects of quality, value and customer satisfaction on consumer behavioral intentions in service environments, Journal Of Retailing, Vol:76 (2),193-218. Dickson, Peter R. (1982). Person-situation: segmentation's missing link.Journal of Marketing, 46 (Fall), 56-64. Donovan, R. J., & Rossiter, J. R. (1982). Store atmosphere: An environmental psychology approach. Journal of Retailing, 58(1), 35-57. Gómez, M.I., McLaughlin, E.W., & Wittink, D.R. (2004).Customer satisfaction and retail sales performance: an empirical investigation, Journal of Retailing, 80(4): 265-278. Huddleston, P., Whipple, J., & Van Auken, A. (2004). Food store loyalty: application of a consumer loyalty framework, Journal of Targeting, Measurement and Analysis for Marketing, 12, 213-230. Knox, S.D., & Denison, T.J. (2000). Store loyalty: its impact on retail revenue: an empirical study of purchasing behaviour in the UK. J. Retail. Consum. Serv. 7:33–45. Lovelock, C. (2001). A retrospective commentary on the article new tools for achieving service quality Cornell Hotel Restaurant Administration Quarterly, Vol. 42 (4). Marshall, G., & Nielson, A. C. (2001). South Africa’s shopping: questions answered, Progressive Retailing, October, 41–3. McCollough, M. A., Berry, L. L., & Yadav, M. S. (2000). An empirical investigation of customer satisfaction after service failure recovery. Journal Service Research, 3(2), 121-137. Menon, K., & Dubé, L. (2000). Engineering effective interpersonal responses to consumer emotions for higher satisfaction, Journal of Retailing ,76 (3),285–307 Odekerken-Schröder, G., De Wulf, K.,& Schumacher, P. (2003) . Strengthening outcomes of retailer-consumer relationships; The dual impact of relationship marketing tactics and consumer personality. Journal of Business Research. 56 (3) : 177 -190. Skrondral A., and Rabe-Hesketh S., Structural equation modeling: categorical variables. Entry for the Encyclopedia of Statistics in Behavioral Science, Wiley, (2005). Sirohi, Niren, Edward W. Mclaughlin and Dick R. Wittink.A Model of Consumer Perceptions and Store Loyalty Intentions for a Supermarket Retailer,Journal of Retailing, Volume, 74(2), pp. 223-245, (1998). Rajaguru, R. & Matanda, M. (2006). Consumer perception of store and product attributes and its effect on customer loyalty within the indian retail sector’.Proceedings of the Australian and New Zealand Marketing Academy (ANZMAC), 2-6 December, Brisbane, Australia. Westbrook, Robert A., & Oliver, R. L. (1991). The Dimensionality of Consumption Emotion Patterns and Consumer Satisfaction, Journal of Consumer Research: An Interdisciplinary Quarterly, 18(1), 84-91.

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