The influence of the in-store environment on price and quality image in supermarket retailing
Tom van Ulsen
The influence of the in-store environment on price and quality image in
supermarket retailing
Master Thesis of
Tom van Ulsen
November 17, 2009
Master Thesis Marketing Management Faculty Economics & Business, University of Groningen
Studentnumber: S1733230
Address: Hofland 1
7481 HG Haaksbergen
E-mail address: tomvanulsen@hotmail.com
S1733230@student.rug.nl
Phone number: 0610616735
Management summary
One of the most dynamic segments in the Dutch economy is supermarket retailing. Marketing managers of supermarket chains have to take into account a myriad of different issues when developing their yearly marketing plan. One of these issues is a pricing strategy. In 2003 retailer Albert Heijn deliberately provoked a so-called price war, which led to swift and unexpected developments in Dutch supermarkets. Just recently retailer Jumbo has started a new price war, which will undoubtedly lead to reactions of competitors, as they notice their customers defecting in order to take advantage of the lower prices issued at Jumbo.
These dynamic price developments exert considerable influence on the price image of retailers, as perceived by consumers. Price image does not reflect the actual prices charged by a retailer, but consists of the perceived price level of a store (Desmet and Le Nagard, 2005).
Another important construct which managers have to deal with is the in-store environment. Supermarket retailers have devoted more time and effort in developing exciting, stimulating and pleasing in-store environments which aim to overwhelm consumers.
This study concentrates on both constructs, and aims to assess the influence of the in-store environment on price and quality image in supermarket retailing. The marketing mix framework, including the 4P’s product, price, place and promotion, was used to define the in-store environment.
This study has also taken into consideration consumer characteristics, and assesses whether it is possible to conduct a segmentation analysis based on price and quality image scores of respondents. The structure of the research design is somewhat unique, and consists of in-store photographs of a Dutch innovate and quality/service minded supermarket chain. Two different questionnaires were developed to test the framework.
The conclusion is that the influence of the in-store environment on price and quality image is reasonable. Many of the hypothesized relationships were confirmed on basis of the data gathered, and a wide variety of different in-store environmental variables were found to exert influence on the construct of price and quality image. It was also possible to create different consumer segments on basis of price and quality image scores, which is of particular interest to managers working in the field of supermarket retailing.
An important managerial implication which can be directed on basis of this study is that the in-store environment matters. This study has proven that it also exerts considerable influence on the price and quality image scores of consumers. Managers should thus carefully define and design the in-store environment, for example by assessing the influence of different shelf structures, product types, lighting schemes and promotional techniques on price and quality image of consumers. It is recommended for managers to closely monitor the new attributes in comparison with the former attributes included in the in-store environment, and especially the influence they exert on price and quality image. By doing so, marketing managers can create the perfect fit between the marketing mix of the in-store environment and their overall marketing strategy.
Preface
This master thesis is the final product of my Marketing Management study at the University of Groningen. One of the most interesting courses which I followed was Retail Marketing. The contents and different theory’s discussed during this course appealed to me.
A topic that I found – and still find – particularly interesting is the dynamic supermarket retail segment in the Netherlands, and I resolutely decided to choose it as a the topic for my master thesis.
I want to use this opportunity by thanking my first supervisor Dr. Laurens Sloot for his help, comments and feedback during several meetings and conversations. I would also like to thank my second supervisor Auke Hunneman. Last but not least, I would like to thank Robert Delver from retailer Plus for taking the time to be interviewed and his comments in general.
Tom van Ulsen
Table of contents
1. Introduction 7
1.1 Background
1.2 Problem statement and research questions 11
2. Literature review 12
2.1 Defining price image
2.2 Price and quality image 2.3 Empirical research into price image
2.4 Conclusion 16
3. In-store environment 17
3.1 Defining in-store environment
3.2 Empirical research into in-store environment
3.3 Conclusion 19
4. Type of retailer 19
5. Theoretical framework and conceptual model 21
5.1 Introduction 5.2 Conceptual model 5.3 Marketing mix
5.4 Marketing mix variables 23
5.5 Price consciousness 26 5.6 Quality consciousness 5.7 Consumer characteristics 27 6. Methodology 28 6.1 Research design 6.2 Data collection 29 7. Results 30 7.1 Reliability analysis 7.2 Multicollinearity analysis 7.3 Descriptive analysis
7.4 Offer and quality analysis 32
7.5 Offer analysis 7.6 Quality analysis
7.7 Conclusion offer and quality analysis
7.8 P and PQI analysis 33
7.9 Individual PQI scores
7.10 Test of significance for mean scores 7.11 Multiple regression analysis P variables 7.12 Conclusion P and PQI analysis
7.13 Testing hypothesis 36
7.14 Testing hypothesis with moderating variables
8. Segmentation analysis 39
8.1 Introduction
9. Conclusions 41 9.1 Limitations
9.2 Recommendations 42
9.3 Suggestions for further research
Appendices
1. Introduction 1.1 Background
The current developments in Dutch supermarket retailing would probably lead to long and tedious board meetings combined with considerable stress and sorrow for the marketing managers of supermarket chains. It is clear that in this very dynamic and complex environment staying ahead of the competition becomes even more difficult. Ellickson and Misra (2008) stress that competition in the supermarket industry is a complex phenomenon, as firms compete across the entire retail and marketing mix. To underline the dynamic supermarket retailing environment some recent developments and trends will now be mentioned. The most important trends and developments are recapitulated in Table 1. To begin with, one of the most important trends is the rise in popularity of private label products and brands. As Ailawadi et al. (2008) elaborate, supermarket retailers increase their private label brands (PL) offerings, as they ensure higher retail margins, create negotiating leverage and enhance customer store loyalty. Retailers have long recognised that offering PL brands to their customers means offering extra value. This is for example caused by the fact that PL brands are typically 15 to 40 per cent cheaper than national brands (Ashley, 1998). Consumers also appreciate PL brands. A current study conducted by research consultancy Deloitte showed that 62% of the consumers of supermarkets in the Netherlands are highly satisfied with the quality of PL brands, and indicated that the differences in quality with A-brands are only very small (Nu.nl, 2009). For retailers, negotiating with A-brand manufacturers like Unilever is no longer as complicated as it used to be. This is a direct result of the popularity of PL brands. This shift in power has forced manufacturers to change their strategy. Some of them have decided to decrease costs, whereas others have increased their R&D expenditures. On the contrary, other manufacturers introduce their own discount fighter brands, and supply private label manufacturers (Ailawadi and Keller, 2004).
Another development is the rise of one and two-person households, being a direct result of the increasing individualistic attitude of western society. Figures of the Dutch central bureau of statistics (CBS, 2009) indicate that the number of one person households in the Netherlands will rise from 33% in 2007 to about 40% in the year 2020.
Thereby, consumers are becoming less loyal to their own supermarket. This corresponds with earlier empirical research conducted by Knox & Denison (2000) who found that absolutely consumer loyalty at store level is not realistic. This is an alarming and disturbing trend for supermarket retailers, especially for those retailers that have not been thrifty in spending their marketing budgets. Some retailers have spent a substantial part of their marketing budgets on developing cutting-edge loyalty schemes in order to develop long-lasting relationships with customers. One of the most well-known loyalty schemes in the Netherlands is the so-called Bonuskaart of Albert Heijn. Differences in price levels between retailers might explain the decline in loyalty of supermarket chain customers. It is also plausible that the increase in popularity of internet and word-of-mouth has played a small role in the decline of loyalty of consumers to their own supermarket. This increase in the number of information sources has clearly enabled the average grocery shopper to hunt even more efficiently for bargains, low/acceptable prices and special offers.
Trends and developments in Dutch supermarket retailing Small supermarkets disappear, supermarkets increase their space
The need for convenience increases (AH-to-go is a concept that fulfils this need)
Supermarket store designs continually change in order to fulfil consumers needs better Growing demand for ready-to-eat-meals
Growing demand for delivering products directly to consumer
Focus supermarket retailers on offering more non-food and niche products Growing demand for healthy and bio products
Fierce competition (retailers like HEMA and V&D- La Place- are in the same segment) Customers are less loyal to their own supermarket
Popularity of private label brands
Growing number of 1 and 2 person households
Discount stores (Aldi and Lidl for example) offer wider assortments
Table 1: Current trends and developments in supermarket retailing in the Netherlands Source: HBD (2009)
As supermarket retailers have to deal with these developments and trends, pricing has become an important weapon in the battle for winning customers. Pricing is regarded as one of the most important and complex elements of the marketing mix. To illustrate this statement, a retail pricing strategy is viewed consistently by retail store managers as one of the top five priorities in retail management (Progressive Grocer, 1992). Ellickson and Misra (2008) state that although firms compete among different dimensions, pricing strategy is clearly one of the most important dimension. The importance of pricing has increased further due to the rise of so-called discount stores and category killers in the 1990’s. These retail formats were innovative and managed to do the unthinkable seen from a strategic view; namely lowering prices dramatically. Category killers can be described, in comparison with traditional retailers, as retailers that offer complete assortments in combination with low prices. Category killers such as Wal-Mart and Aldi have forced these traditional grocery retailers to change their retail and marketing mix, as they lost customers and revenues. Sloot et al. (2006) mention that traditional grocery retailers had to implement cost-saving programs, and a common way of doing that was by reducing the number of offered items. Next to describing and defining overall positioning strategy’s such as category killer and traditional retailer, several past study’s have also focussed on pricing strategy’s.
Three different supermarket pricing strategy’s have been identified by the study of Ellickson and Misra (2008), which was conducted in the United States of America. The first strategy is EDLP – everyday low pricing. This pricing strategy does not focus on promotional strategy’s such as price cuts, but aims to provide low prices consistently. US retailers H.E Butt, Wal-Mart and Food Lion are typical EDLP retailers. It’s counterpart pricing strategy is denominated as promotional pricing (or high-low pricing) which focuses on providing specials. This usually consists of manufacturer price breaks or special deals, provided by US retailers such as A&P and Safeway. Finally, the last supermarket strategy is a combination of EDLP and promotional pricing and is defined as hybrid EDLP/high-low pricing. Retailers Publix, Fred Meyer and Giant have adopted this so-called hybrid pricing strategy.
Dolan (1995) has addressed the complexity of the pricing issue by creating a manager’s tool kit. Dolan stresses the difficulty of setting prices and defines it as having to deal with a myriad of different issues. One important pitfall of pricing is that it often conflicts within a company. When the marketing department sets prices after careful research, the sales department wants to obtain the right to negotiate discounts in the field, leading to unfair, unclear and inconsistent pricing schemes. Dolan’s tool kit consists of eight different steps that managers should follow in order to improve the general process for setting the right prices. However, manufacturers and retailers often face difficulties when designing their prices, as setting the perfect price seems to be an illusive goal.
dramatically with an expected negative growth of - 0,75 and a rise in unemployment from 4,0% to 4,5% in 2009 (Appendix 2). Another metric that is widely used to analyse the economy is consumer trust. This construct is measured by asking consumers questions about the economical and financial situation and indicates whether consumers have confidence in the economy, which has an effect on their spending behaviour. In the period June 2007 to March 2008 there has already been a serious decline in consumer trust (Appendix 2). However, its current value (which is equivalent to 25) is much more alarming (Telegraaf, 2009). In this period of economic downfall, measured by consumer trust and economical growth, the construct of price has also become even more vital to manufacturers and retailers, as consumers will be faced with tight budgets which forces them to allocate their purchases in a different way. In general, manufacturers and retailers often face difficulties when designing their prices, as setting the perfect price seems to be an illusive goal.
Table 2: Overview of the supermarket retail landscape in the Netherlands Source: Elsevier online (2009)
A construct closely linked with pricing and pricing strategy’s of supermarket retailers is called price image. The supermarket retail landscape (Table 2) in the Netherlands has been confronted frequently with this construct since the year 2003. On the 20th of October in the year 2003 retailer Albert Heijn decided to lower the prices of more than thousand items. This was the start of a severe and unprecedented price war between supermarket retailers in the Netherlands. In their article about the subject van Heerde, Gijsbrechts and Pauwels (2008) define a price war as a situation in which a retailer reduces the prices of a large part of it’s assortment in a spectacular way, with the aim of attracting new customers. As the price reductions implemented by Albert Heijn in 2003 were so spectacular, competitors had to lower prices as well in order to keep their customers from defecting. But why did Albert Heijn so dramatically lower the prices of many of it’s products in 2003?
The answer to this question is that the retailer suffered from a deteriorating and unfavourable price image (van Heerde, Gijsbrechts and Pauwels, 2008), meaning that customers had difficulties with the prices Albert Heijn was charging. In other words, consumers felt that price levels were – in combination with the marketing and retail mix - more justified at other supermarket chains than at Albert Heijn.
Retailer Jumbo has just recently started a new price war, by dramatically lowering the prices of A-brands and other (by the consumer perceived) important products. By means of this strategy Jumbo hopes to enlarge the gap of real and perceived price differences with more expensive retailers such as Albert Heijn (Brabants Dagblad, 2009).
Price image is an important construct and it is formed in a complex process. It is important to note that a price image does not necessarily reflect the actual prices charged by a retailer, but rather consists of beliefs and ideas about retailers prices. The phenomenon price image, and how it is being formed, will be explained further in detail in the Literature review section.
Supermarket retailer Market share
Albert Heijn 28,5% C1000 14,4% Aldi 9% Super de Boer 7,5% Plus 5,9% Jumbo 4,8%
Dirk van den Broek 4,4%
Lidl 3,8%
The price image construct is a cornerstone for many Dutch supermarket retailers, which might be a direct result of the severe price wars. Just recently retailer Hoogvliet launched a new strategic marketing formula in order to enhance it’s unfavourable price image (Distrifood, 2009). Competitor Super de Boer has long struggled with it’s relatively unfavourable price image and announced already two years ago to launch more frequent price promotions and special saving programs (Telegraaf, 2007). Competitor Plus was also dissatisfied with it’s price image and decided to introduce more price reductions combined with new saving and promotional campaigns in the upcoming years. The Plus management thereby stated that by taking these measures, they will certainly lure customers from competitors to the Plus stores (Franchiseformules, 2008).
It is interesting to determine that both retailer Plus and Super de Boer focus particularly on “short-term sales success” focussed marketing tools such as price reductions and promotions in order to enhance their price image. Both retailers have included these reductions and promotional strategies in their long term marketing plans in order to assure that the positive influence of these strategies on price image will not be limited to a short time span only. Supers.nl is an organisation which conducts price study’s at 18 different supermarket retailers in the Netherlands. By comparing the prices of about 25 to 30 national brands (A-brands), the organisation provides itself with a defendable and honest overview of the real price levels issued by the different retailers.
When analysing the latest study, which is conducted at the 15th of September 2009, the differences in real prices between retailers are minimal (Appendix 3). The differences in price images between retailers are quite significant. This is the conclusion which should be drawn when analysing the study of Koomen (2007). The researcher of Foodmagazine has provided an overview of the performance of the different supermarket retailers. Koomen (2007) also studied the construct of price image, and found that despite lowering prices and introducing private label brands, Albert Heijn still struggles with it’s price image. It still scores significantly lower than the average score of the competitors (Appendix 1). Moreover, the study identified the price image problems of Super de Boer and Boni, as indicated by low price image scores. Retailer Jumbo attained the highest, and thus most favourable, price image score.
Past empirical research has focussed on explaining these large differences between real price levels and price images that retailers cope with. D’Andrea and Schleicher (2006) elaborate that next to the actual price level, a myriad of different factors could play an important role in the process of developing price images. Some of these factors are promotions, TV advertising, media coverage and word-of-mouth. Measuring and determining these different factors has proven to be rather complicated. Grewal and Baker (1994) have stressed the importance of non-price related aspects of price image, such as store design, store size and service level.
The in-store environment has become more important to retailers during the last years and is in focus. One appropriate example is Wal-Mart; which is one of the pioneer retailers regarding store environments, and has invested time, effort and money into testing and developing new store environments in laboratory settings. The central issue for Wal-Mart is now environmental sustainability. By implementing environmental friendly LED lighting schemes in their stores, without damaging the pleasant in-store environment, the American retailer tries to control costs and ensures a green image (Payton, 2008).
Toys “R” Us, a toy store originating from the United States of America, recently spent $ 35 million to transfer its store located at the Times Square in New York into the ultimate toy store (Figure 1), being the personification of every kid’s dream (Prior 2001, p. 46).
Figure 1: Toys “R” Us store at Times Square in New York
Supermarket retailers in the Netherlands have also acknowledged the importance of the store environment. Retailer Plus leaves it’s store managers with little choice; 80% of the in-store environment of Plus in-stores should look according to the central strategy (De Ondernemer, 2008).
1.2 Problem statement and research questions
This study contributes to the extant literature as it tightly focuses on the influence of the in-store environment on price and quality image for one specific type of retailer. The scope of this study includes several different important in-store environmental attributes. Although the influence of the in-store environment on price image has been addressed by past research (see Literature review), the research design and framework of this study are unique. Thereby, it assesses the construct of price and quality image, which has not been the case in past research. Price image is important, but it is also valuable for retailers to analyse what kind of influence a particular in-store environmental attribute exerts on quality image. This study thereby exclusively focuses on the supermarket retailing segment in the Netherlands.
Next to the problem statement some research questions are defined, these can be found in Table 3. The key problem statement is as follows;
RQ 1: What is the most important dimension/aspect retailers must pay attention to in order to create a favourable price and quality image?
RQ2: Do consumer characteristics influence price and quality image scores and can different segments be identified?
Table 3: Overview of Research Questions 2. Literature review
This study is organised as follows. First, the main constructs of this study will be defined. After that past research is being discussed in light of this study. Finally, the hypotheses and conceptual model will be presented.
2.1 Defining price image
A single working definition of the price image construct is lacking. Cox and Cox (1990) simply define it as the perceived price level of a store and identifies retailers advertising as one of the most important factors which influences it. Desmet and Le Nagard (2005) also primarily focus on defining it as the perceived price level of a store. By claiming that stressing low prices for a retailer is not enough to create a favourable price image, the authors further indicate the complicated process of shaping these images. Shin (2005) states that consumers would like to know the prices of the items that a particular retailer is selling, but that it is often infeasible for a retailer to advertise all prices to consumers. This would of course be too costly. Therefore retailers use a simplified strategy to inform consumers of their overall price levels; through constructing a credible price image.
Some academics (D’Andrea and Schleicher, 2006; Desai and Talukdar, 2003) have chosen to adopt the term OSPI (overall store price image) and describe it as a belief that consumers hold about the overall price image of a store, based on their perceptions of individual product prices at that store. Both empirical study’s stress the importance of price image, because it is an integral part of store image and thus has direct implications on store patronage, making it important to retail managers.
German academic Zielke (2006) conducted an extensive research into measuring the construct with a multiple item scale. He defines price image as follows:
“Price image is defined as a multidimensional latent variable that consists of subjective beliefs and feelings (stored in customer’s memory) about the pricing activities of a retailer’s company, store or category. Based on these beliefs and feelings customers can derive an overall evaluation of the pricing policy that can be labelled price attitude, and that is linked strongly to customer behaviour.”
2.2 Price and quality image
It is commonly known and accepted that consumers look for good value while shopping (Hoyer and MacInnes, 2007). Good value is not always equivalent to offering low(er) prices as consumers are willing to pay more if a certain offering or product provides an important benefit, in other words, the construct of quality plays a role and also influences price image. Consumers are willing to pay extra for products that deliver quality.
This study aims to integrate the construct of quality to provide a more detailed and extensive picture. Quality is especially important for supermarket retailers that focus on providing it, examples of such retailers in the Netherlands are Super de Boer and Albert Heijn.
A marketing manager of Albert Heijn would find it interesting to assess the influence of different types of shelves, products or presentation techniques on quality image. In general, it is clear that consumers will draw attention to the marketing stimuli around them during grocery shopping trips, which influences their decisions, opinions and perceptions and also influences their inferences about quality and price. This has led to the development of a single key construct with the working definition price and quality image.
2.3 Empirical research into price image
One of the most cited and well-known study which is conducted about the price image construct is that of Cox and Cox (1990). The goal of their empirical experiment was to find out how consumers form their price perceptions of retail stores, and what role the advertisements of retailers play in this process. By constructing eight advertisements, the authors wanted to test the effects of advertising stimuli on the perceived level of a retail store's prices. Respondents, after viewing these advertisements, had to report their perceptions of whether the particular store, from which the advertisement was developed, would generally charge high or low prices for it’s items. It appeared that consumers perceive a store to have lower overall prices when its advertised prices are being listed as reductions from a higher price. Thereby, results showed that advertising reference prices can help to create a low price image for the retail store. The study could not confirm the widely expressed view that frequently purchased products are used by consumers to judge a store's total price offering, but did find evidence for the fact that consumers exposed to national brands ads featuring frequently purchased product categories, perceive this as a cue for high prices.
Figure 2: Limited number of items appear to be especially important for building price perception, Source: D'Andrea and Schleicher (2006)
This finding has some clear implications for the retail pricing process; when a retailer plans to lower consumer price perception (and thus eventually OSPI) it should concentrate on lowering the prices of only a small and specific group of items.
High promotional activity proved to have a negative impact on price perception, and attracts the so-called bargain hunters. The correlation between consumers' accuracy of price perception and promotional activity was negative in this study, which clearly implies that retailers should be careful with launching promotions. If a certain retailers launches to many promotions it may result in confused consumers who face difficulties with identifying the actual price levels of the retailer.
The authors Desmet and Le Nagard (2005) devoted their research about the effect of a low-price guarantee on store low-price image and store patronage intention. As the number of retailers who follow a low-price strategy has risen significantly in the last years (for example Jumbo in the Netherlands) this study is certainly relevant and provides readers with more insight about the effectiveness of these low price guarantee strategy's. Anderson and Simester (2001) seriously question the effectiveness of these low price guarantees issued by retailers, as they are so common in today's retail market that credibility is likely to be lost and customer cognition’s are weakened.
The authors focus on two special types of low-price guarantees; a PMG (price-matching guarantee) in which the price difference is refunded and a so-called PBG (price-beating guarantee) meaning that a retailer offers an additional compensation. A total number of 180 consumers participated in this study and were exposed to a retailer advertisement containing pictures and prices of 6 printers for several brands with the retailer logo displayed at the bottom of the add.
Before and after seeing the add, participants were interviewed to gain insight into their price sensitivity, patronage intent and actual store price image and store patronage. In this study the results were clear-cut. A low-price guarantee significantly improves the low-price image of a retailer and thereby lowers the price image, and also has a positive impact on patronage intention. The researchers could not conclude that a price-matching guarantee alone has a positive and significant effect on price image. All the complete findings of this study are summarised in Table 4.
Findings
A low-price guarantee lowers a retailers price image
A price-beating guarantee has a stronger positive effect on retailer price image than a PMG A low-price guarantee increases intention to patronise the store
A price-beating guarantee has a stronger positive effect in patronage intention than a PMG A price-beating guarantee is perceived as a more valuable offer than a PMG
A price-beating guarantee has a stronger positive effect on confidence in finding low prices in a store than a PMG
A price-beating guarantee is less believable than a PMG
A price-beating guarantee does not have a stronger positive effect on intention to search for a lower price than a PMG
Non-regular patrons are more sensitive to a penalty increase (PBG versus PMG) Table 4: Findings and results of Desmet and Le Nagard (2005)
consumption span, which is defined as the average time between two consecutive consumption or usage incidences, and unit prices. Based upon these two variables, a categorisation into 4 categories is developed; consisting of:
Products with short consumption span and high unit prices (SH) Products with short consumption span and low unit prices (SL) Products with long consumption span and high unit prices (LH) Products with long consumption span and low unit prices (LL)
Products like toothpaste and snacks have a relatively short consumption span, and are therefore labelled as such by the authors. Products like light bulbs and cloth hangers belong to the category of long consumption span products. Shopping basket size, referring to average number of different products a consumer will purchase on a shopping trip, was used as the individual difference variable. Results indicated that prices of SH products will have the strongest and most positive influence on OSPI. They were followed by (in this particular order) prices of SL, LH and LL products. Thereby, when basket size increases, the influence on prices of SH and SL products on OSPI will be mitigated. On the contrary, the influence of prices of LH and LL products will be accentuated.
Whereas the prior mentioned studies focus on the effects of certain factors on price image, the study of Zielke (2006) aims to develop an item scale that covers the dimensions of the price image construct. As the author elaborates, price images are formed in complex processes, and do not necessarily reflect the actual prices charged due to different reasons:
Price knowledge and information about prices that consumers have is not complete and proves to be limited actually, this applies to both consumer and durable goods (Estelami, 1998; Estelami and de Maeyer, 2004; Dickson and Sawyer, 1990; Mazumdar and Monroe, 1990, 1992; Wakefield and Inman, 1993; Vanhuele and Dreze, 2002).
Price evaluation should be defined as a subjective process, and it is for this reason that researchers usually distinguish between objective and perceived price (Jacoby and Olson, 1977; Zeithaml, 1984; Zeithaml, 1988).
It is necessary to integrate price evaluations of single products to form price images of stores
_ Consumers form a price image by combining different cues rather than only taking into consideration individual unit prices. Some of these different cues are advertising activities (Cox and Cox, 1990), price figures (Schindler and Kibarian, 2001) or the non-price related aspects, such as store size, store design, and service level (Brown, 1969; Grewal and Baker, 1994)
The study of Zielke (2006) is valuable, as past research has not concentrated on developing a multidimensional item scale about the price image construct. By reviewing past literature the author identifies 7 dimensions of the construct, whereas the last 3 emotional dimensions are added by himself (Table 5).
Dimension Source
Price level image Müller (2003)
Price value image Müller (2003)
Price fairness Müller (2003), Diller (1997)
Price pleasure Author
Price arousal Author
Price dominance Author
Table 5: Identified dimensions of the price image construct (Zielke 2006)
The author gathered a data sample from 50 University students. These participants were asked to evaluate price image for fruit and vegetables at 4 different retailers and store formats. The results of these evaluations are listed in Figure 3, and one of the most remarkable results is the weak score of the supermarket – in comparison with the discount store - on the dimension price value image.
The main goal of this study was to validate and test the predictive power of the 7 identified dimensions. Only for 3 dimensions out of 7 a sufficient amount of convergent validity was achieved, namely for price level image, price value image, and the emotional pleasure dominance factor.
Figure 3: Perceptions of price image dimensions for the different retailers Source: Zielke(2006)
2.4 Conclusion
In conclusion, past research concerning price image has focussed primarily on the influence of (type of) products, advertising, store size, promotions and low-price guarantee.
The impact of the in-store environment on price and quality image has not been addressed in greater detail, which implies that the contribution of this study to extant literature is relevant.
3. In-store environment
3. 1 Defining in-store environment
When taking a look at Figure 4 below, which displays in-store impressions of Dutch supermarket retailers Aldi (low-price focussed) and Super de Boer (quality and service focussed) it is clear that the construct of in-store environment is directly related to a retailer's strategy. How does the literature assess the in-store environment and it's importance for retailers?
During the last years marketing scholars have emphasised the importance of the in-store environment and its influence on retailer performance. The need for retailers to create exciting, functional and stimulating in-store environments has been made perfectly clear. Several authors even came up with new and modern marketing definitions – stressing the need for creating experiences during shopping trips – such as experiential retailing (Kim, 2001), entertailing and shoppertainment (Buzz, 1997).
The construct has been conceptualised in many different ways. Markin et al. (1976) state that the in-store environment is never entirely natural and that it consists of cues, messages and suggestions which are being offered to consumers. Sullivan and Adcock (2002) define in-store environment with some general dimensions such as atmospherics, design and social dimension, whereas atmospherics are composed of tangible and intangible elements which comprise service experiences.
Another study which focussed primarily on the role of atmospherics in the in-store environment is that of Turley and Miliman (2000) who classified the construct into 5 main categories; external, general interior, layout and design, point-of-purchase/decoration, and human. The in-store environment was divided into 3 different dimensions by Baker (1986); social factors, design factors and ambient factors.
According to Ward, Bitner and Barnes (1992) the in-store environment should be divided into an internal part and the external part. The internal part is that part visible from the retail selling space itself, whereas the external part is visible prior to entry into the store.
The widely cited work of Mehrabian and Russel (1974) has been very influential in identifying which consumer responses the in-store environment might create. Their SOR (stimulus-organism-response) model, Figure 5, claims that three dimensions underlay any affective responses to any environment; pleasantness, arousal and dominance.
The authors further propose that an environment has the potential to create certain feelings of arousal on the part of an individual. Depending on which type of feelings the environment evokes, a consumer chooses between an approach or an avoidance response. Seen from a retailers perspective, this model can be used to judge whether the aesthetics of a store represent the correct environmental stimuli. It is obvious that a store which is poorly kept and has narrow and poorly lit aisles would probably not lead to very positive consumer responses.
3. 2 Empirical research into in-store environment
somewhat related to the problem statement of this study are that of Baker et al. (1992) and Grewal and Baker (1994). These studies investigate the congruence between environmental factors and the categorisation of retail outlets that consumers make, and came up with mixed results (Table 6).
Figure 4: In-store impressions of Super de Boer (above) and Aldi (below)
Findings of studies Baker et al. (1992) and Grewal and Baker (1994) - The price of an item was found to be more acceptable in a high-social environment compared with a low-social environment. Price acceptability proved to be positively related to the ambience factor in a high-design environment. However, price acceptability had no relation to the ambient factor in a low-design environment.
- Ambient and social factors affect evaluations of both product and service quality but, surprisingly, the design factor does not. A prestige image, created by means of ambient and social factors, will lead to better product and service quality evaluations compared to a discount image.
- The relationship between store environmental factors and overall image of a store is mediated by evaluations of product and service quality.
- Pleasure and arousal variables were found to mediate the effect of ambient and social factors on shoppers’ willingness to buy.
Table 6: Findings of studies Baker et al. (1992) and Grewal and Baker (1994)
To further explain the construct and importance of the in-store environment, some other empirical study's will now be discussed. Lam (2001) published an extensive review of past research into the subject of effects of in-store environment on shopping behaviours. The author found, among other things, overwhelming evidence for the hypothesis that in-store environment affects cognition, emotions and behaviours. The most important outcome of the study of Kumar and Karande (2000), based on a large sample of grocery stores, was that retail atmospherics matter. Their impact on store performance, measured by sales per square foot, was considerable.
Mathur and Smith (1997) present a large-scale cross sectional field study considering the effect of store environment on consumer emotions. They conclude that although cognitive factors play the most important role in store selection and buying behaviour, the in-store environment and the emotional state it creates are important determinants of buying behaviour as well.
3.3 Conclusion
More than 35 years ago academics Mehrabain and Russell (1974) already underlined the importance of the in-store environment. The study’s reviewed in the previous chapter provide overwhelming evidence for this Mehrabain and Russel claim, by proving that in-store environments affect cognition, emotion and behaviour of consumers.
Past research into the construct of in-store environment has focussed primarily on the effect that it exerts on retailers performance, often measured in terms of sales/turnover figures, market share, store patronage and purchase intentions. Only a few studies have investigated the link between in-store environment and price image. This study contributes to the existing literature of the in-store environment construct by analysing it’s impact on price and quality image in detail, combined with an unique type of research design.
4. Type of retailer
retail chain Wal-Mart, whereas Dutch supermarket retailers such as Super de Boer and Albert Heijn are involved in a HILO strategy.
However, the price format framework is not applicable to this study, as only one Dutch retailer, Jumbo, has adopted a typical EDLP pricing format. This will not lead to a very representative image and increases the likelihood of a bias.
Levy et al. (2005) have discussed the evolution of retailer formats in the USA in their article which focuses primarily on the Big Middle concept. The authors define Big Middle as the market space in which the largest retailers are competing on a long run basis due to the possibility of attracting the largest number of customers. Figure 6 illustrates this concept in greater detail and recognises 4 different segments/strategy's.
A retailer can choose to adopt an innovative strategy in which it targets quality-conscious markets who seek premium offerings. This strategy is based upon the two cornerstone’s high relative price and high relative offerings. The other segment/strategy is that of a low-price retailer (in the Netherlands Aldi and Lidl would fall into this category) which appeal to price-conscious markets. Contrary to it’s innovative counterpart, this segment offers low relative prices combined with low relative offerings.
The most interesting and largest segment in Figure 6 below is the Big Middle segment. There has been a surge in the number of Big Middle retailers world-wide due to their successful concept of offering more value for money than the traditional retailers. The authors mention the dominance of retailers like Wal-Mart and Target within this segment. The in-trouble retailers, which can be find below right in the graph, do not offer enough value to customers. They offer relatively high prices but do not manage to combine this with high relative offerings, which is not appreciated by consumers. As a result of this, it is likely that they will disappear from the market. The Dutch supermarket retailer Edah, which does not exist any more, was an good example of an in-trouble retailer. The retailer, which disappeared from the Dutch market in 2006, was taken over by supermarket wholesale organisations Sperwer and Sligro (De Pers, 2009). This development again underlines the dynamic situation in Dutch supermarket retailing, as for 5 years ago Edah had the disposal of about 100 stores and flourished with a yearly turnover running in millions of Euro’s (Trouw, 2009).
Figure 6: The Big Middle framework Source: Levy et al. (2005)
brands and an extensive and pleasing in-store environment. The price level is also higher than that of the low-price retailers. These 3 retailers should thus be categorised into the innovative segment. One supermarket retailer has managed to outperform its competitors in the last years by offering an unique retail format consisting of high service levels combined with low prices.
Although this retailer, Jumbo, does not have the largest market share it’s strategy and performance is highly valued by consumers, which can be concluded from the fact that consumers in a recent study conducted by research consultancy Gfk reviewed Jumbo as the best supermarket chain of the Netherlands (Supermarktblog, 2009). The successful retail chain plans to open several new stores in the coming years and is aiming for a market share of 10% in 2013 (Winkelzaken, 2008). Just recently Jumbo has surprised supermarket chain analysts in by taking over competitor Super de Boer for a fee of 552,5 million € (Nu.nl Economie, 2009).
The strategy and success of Jumbo fits into the Big Middle segment as the chain apparently manages to offer the most value for money to customers. Retailer C1000, once introduced by its founders as the only appropriate alternative for Albert Heijn, has recently struggled with its strategy. To cope with the fierce competition C1000 has adopted a new marketing strategy and will focus on offering a much wider assortment at lower prices in combination with a pleasing in-store environment (Nu.nl Economie, 2009). This new strategy appears to pay off, as the traffic in C1000 stores has improved, being a direct result of the Gogo toys campaign (Distrifood, 2009). This study will categorise the retailer in the innovative segment. The identification of the different Dutch supermarket retailers into the segments mentioned by the Big Middle framework will be applied further when constructing the conceptual model and hypotheses. Table 7 provides an overview of the categorisation of Dutch supermarket retailers by the Big Middle framework.
Supermarket Retailer Strategy
Plus Innovative
Albert Heijn Innovative
Super de Boer Innovative
C1000 Innovative
Lidl Low-price
Aldi Low-price
Jumbo Big Middle
Dirk van den Broek Low-price
Spar Innovative
Table 7: Categorisation of Supermarket Retailers according to the Big Middle framework by Levy et al. (2005)
5. Theoretical framework and conceptual model 5. 1 Introduction
To increase the validity and realism of this study a conversation with a retail expert has taken place. On basis of this conversation the conceptual model has been slightly modified. A detailed summary of this conservation can be found in Appendix 4.
5. 2 Conceptual model
Figure 7: Conceptual Model
The variables mentioned in the conceptual model will now be discussed in greater detail.
Note: Q.C stands for quality consciousness and P.Q for price consciousness
5. 3 Marketing mix
The widely cited and used term marketing mix, consisting of the 4P's; price, product, place, and promotion, will be used to define the in-store environment in this study.
Marketing mix is a popular term and marketing managers and other practitioners use the term frequently to unfold and set up their strategy. The term is also widely used in relevant marketing literature. Lauterborn (1990) described the 4P's marketing mix framework as the Rosetta stone of marketing education. Grönroos (1994) also emphasised the importance of the framework by defining it as a toolkit of transaction marketing and an archetype for operational marketing planning. However, the framework is not actual. It's origin dates back to the 1960's and was developed by McCarthy (1964).
The article written by Constantinides (2006) offers a complete review and analysis of the marketing mix framework and it's role in the 21st century. The framework has been, especially during the last years, subject to fierce criticism. Some marketing scholars have written articles to cast their doubts about the actuality and realism of the framework. Schultz (2001) indicated that marketplaces are nowadays more customer oriented and that for this reason the 4P's framework has lost it's relevance. Other researchers claim that the framework is too much internally oriented, as elaborated by Robins (1991).
The original marketing mix framework has also been criticised due to the fact that it ignores the human factor (Constantinides, 2006); it is for this reason that practitioners and researchers have extended the original framework into a 5-P one, including the P of people.
In-store environment
Marketing Mix
Product Place Promotion Price
Price and Quality Image
To overcome the problem of too much internal orientation, the author strongly suggests to introduce a new framework, namely the 4 C's framework, consisting of customers, competitors, company and capabilities. Constantinides (2006) also emphasises that the 4-P framework has some serious weaknesses (Table 8), but stresses it's essential features which could still contribute to marketing practitioners, students and scholars; namely simplicity, applicability and richness.
Weaknesses of Marketing mix framework Ignores the human factor
Lack of strategic dimensions Lack of interactivity
Lack of personalisation Too much internal oriented
Table 8: Weaknesses of marketing mix framework, Source: Constantinides (2006)
The criticism on the 4P's marketing mix framework can not be neglected. However, due to it's essential and excellent features such as applicability and richness (Constantinides, 2006), it positively contributes to this study.
The retail mix model of Levy and Weitz (2008), an appropriate model for this study, has not been adopted into the conceptual framework due to several reasons. This retail mix model consists of 6 elements; customer service, location, store design and display, communication mix and pricing. When reviewing Appendix 5 and 6, variables that are more or less related to the retail variables included in the retail mix model of Levy and Weitz (2008) have also been included in this study. In other words, the framework of this study meets to some extent the retail mix variables as demanded by the work of Levy and Weitz (2008). Due to the unique research design and method of data collection of this study, the retail mix model variable customer service, and other human factors which might exert influence on price and quality image such as personnel, could not be measured appropriately. Therefore, the more basic 4P’s marketing mix framework has been included in the conceptual framework.
5.4 Marketing mix variables
Appendix 5 provides the reader with a complete overview of the variables that have been included in order to measure each P. It also mentions the academic source from which the variables have been excluded from. This subchapter reviews past literature for every individual marketing mix variable.
Product
The first element of the marketing mix which is being discussed is product. Golden and Zimmerman (1980) define this P as what the seller provides for buyers for a certain price. This study distinguishes between private label products and national brands. As Ailawadi et al. (2008) have discussed, supermarket retailers increase their private label product offerings. As these PL brands are presented as the cheaper alternative of the national brands, it can be hypothesised that private label products lower price image.
H1a: Private label products negatively influence price and quality image
H1b: National brand products positively influence price and quality image
Another issue that will be discussed in this study is the way in which products are displayed. Levy and Weitz (2008) pointed out that consumers prefer clean stores, wide aisles and cheerful colours. It is likely to assume that consumers also pay attention to the fact whether products are displayed in a clean, cheerful and appropriate way. This issue has been researched in detail by Zhu and Meyers-Levy (2009), who devoted their study in order to answer the question how display fixtures can affect product evaluations. By constructing two experiments the authors found empirical evidence for the fact that this can be the case, depending on the type of cognition used by consumers.
These results are interesting and deserve further attention. It is worth investigating whether display fixtures of products affect price and quality image. The decision has been made to distinguish two types of display fixtures; individualistic display fixtures and non-individualistic display fixtures. Details about these variables can be found in Appendix 5 and Appendix 6.
H1c: Non-individualistic product display fixtures negatively influences price and quality image
H1d: Individualistic product display fixtures positively influences price and quality image
Place
This P should be defined as to how the seller gets merchandise to the customer (Golden and Zimmerman, 1980). This P is particularly important, as it provides a first impression to consumers. Place, and especially the entrance and location of a store, is often referred to as the decompression zone (Levy and Weitz, 2008) in which customers make adjustments to the new environment, which further emphasises the importance of this construct according to the authors. Taking this into consideration, the entrance and location of the store is one of the variables which has been included to measure this P. A hypothesis has been developed to test it's influence on price and quality image:
H2a: Location influences price and quality image
Measuring Place only by the location of the store will probably lead to a bias, it is for this reason that other variables have been included (see Appendix 5). The theory of Hoyer and MacInnes (2007), who found that one of the atmospheric elements that exerts the most influence on shopping behaviour are in-store signs, has also been included.
The work of Levy and Weitz (2008) provides more knowledge and information about Place. According to the authors consumers prefer wide aisles and dislike small aisles, which will lead to the following hypothesis:
H2b: Wide aisles will have a positive influence on price and quality image
H2c: Place significantly influences price and quality image
Promotion
This element of the marketing mix is a method in which a seller advertises in order to attract customers (Golden and Zimmermann, 1980).
The role of promotions in Dutch supermarket retailing is important. The retail professional who has been interviewed (Appendix 4) states that, due to the fact that consumers are becoming increasingly less loyal to their own supermarket, launching promotions is an appropriate technique for luring more consumers to the stores.
Promotions are common in the in-store environment of supermarkets. Some supermarkets have selected a few aisles in which the products, which are being promoted, are displayed. One way of doing this is through special fixtures in which the products on promotion can be found (Figure 8).
Figure 8: Display fixture of product on promotion in Albert Heijn store
Using the theory of Gedenk and Scott (2000) promotions can be divided into price promotions and non-price promotions. To avoid confusion and in order to clarify things, this study has developed a categorisation scheme of the different type of promotions which play a role in Dutch supermarket retailing. These type of promotions are categorised in the price promotion category or in the non-price promotion category.
Price promotions are defined by this study as activities in which a supermarket retailer lowers the price of a certain number of products. The Euroweken of C1000, in which the Schuitema chain lowered the prices of certain products dramatically for a few weeks time, is an example of such a price promotion.
Non-price promotions refer to promotions in which the price does not play a direct role. One can think of vouchers or saving points for certain rewards (Douwe Egberts or Albert Heijn saving programmes) or obtaining a free gift when buying a certain product. Another non-price promotion types are features and free sampling.
For a complete overview of the variables that have been selected in order to measure the different constructs price promotions and non-price promotions, see Appendix 5 and 6.
When assessing the goal and purpose of non-price promotions the conclusion can be drawn that they are designed mostly in order to built customer loyalty, as indicated by Kotler (2003). The aim of most of these non-price promotion tools and technique’s is building long-term relationships with consumers. Price promotions usually result in short long-term success in the form of a rise in sales figures of a particular product which is on promotion.
demonstrations and educational material and non customer franchise building promotions such as price-off packs, premiums, sweepstakes and refund offers. Keller (2008) points out that customer franchise building techniques can enhance the attitudes and loyalty of consumers toward a brand. Brand equity could also be influenced positively by using these type of techniques. This theoretical framework supports the claim of Kotler (2003), who stated that the goal of non-price promotion tools and technique’s is building long-term relationships with consumers. The customer franchise building techniques such as samples, demonstrations and educational as described by Keller (2008), can be labelled as non-price promotions.
Dutch supermarket retailers primarily focus on “short term sales success” tools such as price reductions in order to influence price and quality image (see Introduction section). It is therefore interesting to investigate the other side of the story, as supported by theory, that non-price promotional techniques, such as saving programmes or voucher promotions, will exert a positive influence on the long-term constructs consumer loyalty and brand equity. The construct of price image, or price and quality image, can be seen as another long-term construct which is important for Dutch supermarket retailers. Following this line of reasoning, this study hypothesises that non-price promotions techniques will have a more positive influence on the construct of price and quality image than price promotions.
H3: Non-price promotions will have a more positive influence on price and quality image than price promotions
Price
As this refers to what the seller charges the buyer for a service or product, it is tightly linked with price image (Golden and Zimmermann, 1980). This P will also include two moderating variables, namely price consciousness and quality consciousness, which will be discussed later.
It is obvious that price is one of the most important factors which influences price image. Empirical evidence for this statement is offered by several study's; (D'Andrea and Schleicher 2006; Desmet and Le Nagard, 2005; Desai and Talukdar, 2003) and this work will further assess these empirical findings by hypothesising the following;
H4a: Price has a more important influence on price and quality image than product, place and promotion
Research has shown that consumers prefer odd prices, prices that end with an odd number, for example a product priced at 15.99 $, and perceive it as less expensive than normal prices, for example products tagged at 16.00 $, 15. 96 $ or 16.02 $, as there in reality is no difference (Hoyer and MacInnes, 2007). The authors claim that price reductions will have a more positive effect on consumers than price increases, which sounds logical by itself and will not be addressed further. However, the variable price reductions has also been included, for more information see Appendix 6. The pricing technique of odd pricing will be hypothesised in this study;
H4b: Odd pricing positively influences price and quality image
5. 5 Price consciousness
Lichtenstein et al. (1993) defines it as a buyers unwillingness to pay a higher price for a product and/or the exclusive focus on paying low prices. Another study of these authors discusses the characteristics of this construct (Lichtenstein et. al., 1988, p. 245) by explaining that it varies across products and situations for the same individual/consumer. Monroe and Krishnan (1985) explain that differences in degree of price consciousness between consumers exist due to the perceived risks involved in purchasing decisions across categories. It is likely that a consumer will have a different price consciousness attitude when buying a car than when buying coffee.
The current economic crisis could also have an effect on the degree of price consciousness of consumers. Hoyer and MacInnes (2007) support this statement by claiming that the sluggish growing Japanese economy has contributed to a large extent to the growing popularity of discount stores in this country. Japanese consumers, who in general can be described as being quality conscious, disliked these discount stores and hesitated to visit them in the past.
Dutch retailers Aldi and Lidl have selected price conscious consumers as their target group, but also innovative retailers, such as Albert Heijn, have recently spend a large part of their marketing budgets on communicating the message that the prices they offer are also reasonable. It is likely that for price conscious consumers faced with a tight budget, price will be an important attribute influencing their grocery shopping behaviour and price and quality image scores, leading to the following hypothesis:
H4c: Price will have a more important influence on price and quality image among high price conscious consumers
5.6 Quality consciousness
Dutch retailers Aldi and Lidl focus on price-conscious consumers, whereas competitors Albert Heijn, Plus and Super de Boer target the quality-conscious segment. The consumers belonging to this segment usually do not find themselves restricted by a tight budget, and appreciate products with superior quality combined with a higher price. As value, which is what consumers are looking for, does not always mean a low (er) price (Hoyer and MacInnes, 2007) the construct of quality should not be neglected. For quality conscious consumers, price will not be an extremely vital attribute, which leads to the following;
H4d: Price will not have a significant influence on price and quality image among high quality conscious consumers.
5.7 Consumer characteristics
It is plausible to assume that characteristics of consumers exerts influence on price and quality image. Consumers who are faced with a tight budget will probably not appreciate the relatively high prices of Super de Boer, Albert Heijn or Plus, leading to very negative price image scores. On the other hand, quality-conscious consumers will probably not reward low-price retailer Aldi with high low-price image scores. Thereby, a 22 year old student will probably have other grocery shopping priorities than a 45 year old husband and father of two young children.
The already discussed study of D'Andrea and Schleicher (2006) concentrated on a detailed segmentation of the market which they had been investigating. The authors were eventually able to identify 5 different segments;
Avid bargain hunters; the most price sensitive group of all. They compare the prices
most, have a lower income, and aim to find good deals on a daily basis
High-income bargain hunters; these consumers are also price sensitive, but have a
Range seekers on a budget; this group consists of traditional careful consumers, who
want to bring home best quality products, but are restricted by a tight budget.
Quality seekers and time savers; mostly high and medium income consumers. They are
willing to pay premium prices and need high-quality products. These consumers do not have time to compare prices.
This study aims to research whether consumer segments can be identified considering patronising Dutch supermarket retailers, based on consumers price and quality image scores. This will be done by comparing demographic variables (age, gender etc.) with price and quality image scores. The segmentation analysis will be discussed further in the Results section. The following hypothesis will be addressed:
H5: Consumer characteristics influences price and quality image
6. Methodology 6. 1 Research design
The research design is based upon two different questionnaires (see Appendix 17 and 18)1. In each questionnaire consumers were confronted with 16 in-store photographs, each set of photographs representing one of the constructs mentioned in the conceptual model, for example the P of promotion, meaning that every respondent for each questionnaire was confronted with 4 photographs for every P. They were taken with permission in different stores of an innovative (see Type of Retailer section) Dutch supermarket retailer.
In order to guarantee the validity and reliability of each construct, a set of 4 photographs for every P has thus been taken to adequately measure and test every single construct.
A respondent could only fill in one of the two questionnaires. The 32 photographs in total were carefully selected, and for every P opposite and different situations were chosen to test their influence on price and quality image. To give an example, for the construct product one questionnaire contained a photograph of a national brand (Coca-Cola), whereas the respondents of the other questionnaire were confronted with the opposite; a photograph of a private label cola brand. By constructing two different questionnaires it becomes more clear; as a respondent can not be confronted with both a national brand and a private label brand, he or she will not be influenced and biases are avoided. A complete overview of the in-store environment attributes that were photographed can be found in Appendix 6.
The photographs serve as the stimuli representing the in-store experience and environment through the eyes of the consumers. Nasar and Hong (1999) concluded in their research that although photographs may overlook noise and odours, it still is a convenient and highly controlled way to obtain responses to a variety of places and photographs are certainly valid proxies of visual issues.
After each photograph respondents were asked to fill in to what extent they believed that this particular picture/situation fits with a supermarket which stands for providing a lot of special offers, or if it fits with a supermarket providing a lot of quality.
7-Point Likert Scales were used to indicate this. On basis of these two statement scores a total score for price and quality image has been developed, by simply adding both statement scores. However, individual scores on special offers and quality were also analysed in detail in the Results section in order to avoid loss of information.
Several draft versions of both questionnaires were analysed by friends, acquaintances and a retail professional. On basis of the feedback/comments received from this group of people
1
Note: Appendix 15 and 16 differ from the actual questionnaires, as the order and size of the pictures are not correct. The design is also different. The correct questionnaires 1 and 2 which have been used during the data collection process are available from http://www.thesistools.com/?qid=89806&ln=ned
