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Reseller equity dimensions
What dimensions shape Reseller equity for Dutch pharmacies?
Rijks
universiteit
of Groningen, Faculty Economics and Business
Master Thesis Business Administration: Marketing Management
Groningen, December 2010
Thesis supervisor: dr. Liane Voerman Co-assessor: prof. dr. Janny Hoekstra
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Management Summary
This study investigates the Reseller equity of Dutch pharmacies. Ailawadi and Keller (2004) have studied a multitude of retailer attributes that influence consumer experience and store choice. They categorized all these factors into five categories: (1) location, (2) in-store atmosphere (3) price and promotion, (4) cross-category product assortment, and (5) within-category brand/item assortment. All these dimensions might affect the reason why consumers choose for a particular retailer (Ailawadi & Keller, 2004). These five factors shape the value of a retailer: the Reseller equity. This study explores the dimensions of Reseller equity for a Dutch pharmacy, taking into account the influence of consumer characteristics. Reseller equity in this research is defined by the perceived importance of these dimensions by consumers.
The goal of this research is: to gain insight in the dimensions that shape Reseller equity for a pharmacy and to find the most important dimensions for dermocosmetic consumers of different brands. The goal allows better understanding of the success factors of the pharmacy as a retail channel nowadays in the increasing competitive environment.
Problem statement:
What dimensions shape the Reseller equity for Dutch pharmacies in the perception of consumers of different skin care brands?
The data collection for this research is done in cooperation with Intomart GfK. Intomart has an online panel of 120.000 participants with an extensive profile. For this research, the respondents who are older than 18 years are selected. Moreover, the respondents should have visit the pharmacy in the last 12 months and they should use skin care products, either bought in a pharmacy or in another channel. After the screening, the questionnaire is distributed among 1500 participants. In the end, 511 respondents completed the questionnaire.
This research shows that the dimensions of Reseller equity are different for a pharmacy than for a regular retailer. There are four factors that shape Reseller equity for a pharmacy. These four factors include different variables than the five categories of Ailawadi and Keller (2004). The dimensions that shape Reseller equity for a pharmacy are: Assortment, Ambient & Social features, Physical features and Location & Convenience. Especially, Ambient & Social features shape Reseller equity for a pharmacy (in general) since this dimension has the highest average score (mean 4,0566) on importance. This dimension includes many staff related aspects, therefore it can be concluded that consumers find staff related aspects important for a pharmacy. Moreover, the outcome of this study also shows that consumers of Cosmétique Active B.V. (Vichy and / or La Roche-Posay) find Assortment en Physical features more important compared to consumers of other brands. Especially, Assortment adds the highest value for Cosmétique Active consumers. However, there are other factors that might influence Reseller equity for a pharmacy. The characteristics of the consumer might influence how important the consumer think these Reseller equity dimensions are. This research shows that gender, income and family size have a significant different mean on the four factors. However, there is no significant relation between age and the four different factors.
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Preface
During my study I wondered many times how it would feel like to be done with my study, how it feels to hand in my thesis and be done with everything. Writing this preface makes me aware of the fact that I am close to face that moment and I can tell it feels great.
In the past few months, I performed an interesting research project assigned by Cosmétique Active B.V. I was fortune to cooperate with Intomart Gfk and use their objective panel for this research. This research report is partly based on this research project, however this is not the only outcome. In October 2010 I presented a management analysis and summary of the outcomes more in-depth for the management of Cosmétique Active B.V.
Nevertheless, this research report is the final product to finish my Master of Marketing Management at the University of Groningen.
I experienced this graduation project and my internship as a great learning experience and I would like to thank the people who contributed to that.
First of all, I would like to thank Cosmétique Active B.V for the opportunity to perform this research. Especially, my great appreciation goes to my company supervisors Casper Teunissen and Marieke Maessen for their time, feedback and practical advice.
At the university, my graduation process was supervised by Liane Voerman. I would like to thank her for her constructive feedback and her always positive and motivating attitude, which really helped me to improve the final result. In addition, I would like to thank Janny Hoekstra for assessing my thesis. Last, but certainly not least, I would like to thank my boyfriend, family and friends for their support, encouragement and understanding.
Marieke Grit
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Table of content
Chapter 1 Introduction...6
1.1 L’Oréal- Cosmétique Active BV. ...6
1.2 The pharmacy market in the Netherlands ...6
1.3 Problem statement ...7
1.4 Goal research...8
1.5 Relevance of the study ...8
1.5.1 Management relevance ...8
1.5.2 Scientific relevance ...9
1.6 Thesis structure ...9
Chapter 2 Theoretical framework ...10
2.1 Reseller Equity ...10
2.2 Location...11
2.3 Store atmosphere...11
2.4 Price & Promotions ...12
2.5 Cross-category product assortment ...12
2.6 Within-category assortment ...13
2.7 Consumer characteristics ...13
2.8 Conceptual model...14
Chapter 3 Research design...16
3.1 Research method ...16 3.2 Data collection ...16 3.3 Sample size...16 3.4 Scale development ...17 3.5 Plan of analysis ...18 Chapter 4 Results ...19 4.1 Response accountability...19 4.2 Respondents ...19 4.2.1 Descriptive results ...19 4.2.2 Statistical results ...20
4.3 Factor Analysis on the importance of the Reseller equity dimensions ...21
4.4 Discriminant Analysis Skin care consumers...24
4.5.1 Estimate the discriminant function of the coefficients...24
4.5.2 Determine the significance of the discriminant function...25
4.5.3 Interpret the results ...25
4.5.4 Determine the validity of the discriminant analysis...26
4.5 Consumer characteristics ...26
Chapter 5 Conclusions and Further research ...28
Chapter 6 Discussion and limitations ...32
References...34
APPENDICES...36
1. Survey...36
2. Summary answers open questions ...46
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SPSS OUTPUT ...50
1. General results about the sample ...50
2. Frequencies respondents ...50
3. Bonferroni analysis respondents of different pharmacy chains...53
4. Anova score of respondents per pharmacy group ...53
5. Consumer characteristics ...59
5.1 Correlation- Age ...59
5.2 Anova- Gender ...61
5.3 Anova- Income...62
5.4 Correlation- Family size...64
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Chapter 1 Introduction
This chapter provides an introduction to an empirical quantitative research assigned by L’Oréal Cosmétique Active B.V. It will present the goal, problem statement and the relevance of this study.
1.1 L’Oréal- Cosmétique Active BV.
L’Oréal is one of the market leaders in the cosmetic industry worldwide. The company is founded in 1909 and has a great, extensive knowledge regarding different skin and hair types (www.loreal.com). The department Cosmétique Active B.V. is one of the five departments of L’Oreal in the Netherlands. All the products of Cosmétique Active B.V are exclusively sold in the pharmacy. In the Netherlands there are three brands up to know. Two skin care brands: Vichy and La Roche-Posay and one nutritional supplement brand called Inneov. Currently Cosmétique Active is market leader in the pharmacy with the leading brands VICHY (market share 80%) and La Roche-Posay (market share 6%).
1.2 The pharmacy market in the Netherlands
The pharmacy market in the Netherlands is completely different compared to the pharmacy market in other countries. Still 84.5% of the revenue is gained by prescription drugs in the Netherlands in 2008 (IMS Health, 2009). Whereas the Dutch pharmacy is primarily visited by consumers to pick up medicines which the general practitioner has prescribed, the foreign pharmacy also functions as a drugstore and sells a lot of products without a prescription. It can be argued that the Dutch pharmacies are more conservative and less commercial than foreign pharmacies (Maks et al., 2001). Nevertheless, the pharmacy as a retail concept is developing due to the changing market conditions and changing government regulations. The market has recently been liberalized which resulted in the fact that existing market parties –particularly big pharmaceutical traders– have extended their market position by buying and setting up pharmacy chains. When a pharmacist is committed to a chain (for instance a Mediq or Escura chain) –often linked to a wholesaler as well- the pharmacist is capable of focusing more at the ‘care task’ and the commercial mode of operation can be transferred to the professionals within the chains. However, this development reduces the number of pharmacies who are really owned by a pharmacists (Pharmaceutisch Weekblad, 2009).
There are some other changes in the market that are putting the pharmacy channel under great pressure. For instance, the recently implemented preference policy of the health care insurance companies. This policy means a great loss of income for pharmacies since only the most inexpensive medicine within a certain group of medicines will be compensated by health care insurance (Maks et al, 2001). Moreover, pharmacies are no longer able to gain reductions at the wholesaler when buying medications. This means an average extra loss of €250.000 for a pharmacy in 2009 (www.knmp.nl).
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enough to sustain in business and 40% of the pharmacies went bankrupt at that time. This was a disturbing development and therefore the government decided to increase the compensation for pharmacies again. In 2010 the compensation per prescription was €7,91. Nevertheless, this compensation did not cover the total loss of income for pharmacies. Therefore, pharmacies are looking into other options to compensate this lost. This resulted among other things, in an increasing importance of over-the-counter sales (OTC)1 since these products yield higher margins for pharmacies than prescription drugs. It becomes clear that pharmacies need to be more commercial and sell health care products while maximizing profits (Maks et al, 2001). Within the pharmacy market in the Netherlands, the amount of pharmacies is growing (+2.3%). At the moment, the average population rate per pharmacy has been decreased from 9.000 to 8.000. The total amount of pharmacies in January 2010 is around 1976 (www.rabobank.nl). There has never been such a growth within this market compared with preceding years. This is partly due to the fact that owners of pharmacies do not necessarily need to be a pharmacist anymore (Pharmaceutisch Weekblad, 2009). This has led to a strong increase in pharmacy chains and new entrants like the internet pharmacy. Nevertheless, the KNMP (Koninklijke Nederlandse Maatschappij ter bevordering van de Pharmacie) considers the internet pharmacy as dishonest competition, since the internet pharmacy provides no acute orders during evenings/nights and weekends, furthermore they do not provide counseling/advice conversations. Nevertheless, the expectation is that pharmacies will experience more and more competition of the internet. Especially, since 70% of the medications are reprise recipes. Despite this, the development of the internet as a channel is not yet at full speed. This is mainly because the biggest amount of consumers (elderly) do not have access to the internet and besides, many elderly attain much value to personal contact. Some general practitioners are afraid of the upcoming internet pharmacy because their business is an expensive and labor intensive operation. Moreover, they fear that patients order recipes and receive them without their whole medication file being examined by a physician or apothecary. Despite these obstructions, the internet pharmacy will continue to develop since the amount of elderly are increasing, they are more and more getting used to computers / internet and convenience is becoming an important mainspring. According to the CBS, by 2010 the amount of elderly (>65 year) in our country will increase to 2.400.000 people (15% of the entire population) and by 2020 this amount will be raised up to 3.200.000 (19%). According to SFK (foundation of pharmaceutical prefixes) this means that the total medicine consumption will increase by 13% which offers great opportunities for other brands and products sold in the pharmacy due to the increasing traffic (ww.cbs.nl).
1.3 Problem statement
All these changes and developments increase the importance of pharmacies to differentiate, become more consumer oriented, create new business models in order to become more commercial and sell health care products while maximizing profits. Due to these developments great opportunities arise for manufacturers of skin care brands sold in the pharmacy.
Pharmacies are looking for other ways to generate income, for instance selling more OTC- and skin care products since this generates higher margins. However, in order to keep ahead of the competition, it is essential for manufacturers of skin care brands to understand the strengths and weaknesses of the pharmacy as a retail channel.
The pharmacy is a retail channel but also a service setting since it has some typical characteristics of a service setting like: intangible, heterogeneity, inseparability, and perishability (Lovelock & Gummesson, 2004). Therefore, different dimensions might shape the value of a pharmacy compared to a regular retailer. Anderson et al (2009) developed a model which explain the value that a consumer receives from acquiring a particular supplier’s product or service through a particular reseller in its local trade area. This model is defined as the Market place
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equity model, which is a joint result of Reseller equity and Brand equity (Anderson et al, 2009). This research only considers Reseller equity. Reseller equity can be defined as the value of acquiring a supplier’s offering from a particular reseller versus other authorized resellers in the local trade area. Reseller equity might consist of different dimensions. All the changes and developments in the pharmacy market makes it worthwhile to find out what dimensions shape Reseller equity for a pharmacy in the perception of the consumer.
Channel equity can be defined as the value the reseller receives from the supplier, which is often a combination of financial and non financial elements. Whereas Brand equity can be defined as the value of acquiring a particular supplier’s offering versus other competing suppliers’ offerings. A brand is something that resides in the minds of consumes (Keller, 2008). It is a perceptual entity rooted in reality, which reflects the perceptions and perhaps even the idiosyncrasies of consumers. However, Channel and Brand equity are beyond the scope of this study since these concepts demand a broader research perspective.
Up to now, little is known of how consumers experience the pharmacy as a retail environment. Since the consumer adds value for a business and generates income (Kirca et al., 2005), the consumer will be the subject of investigation. This study only considers Over-The-Counter products sold in the pharmacy with a focus on skin care products since these products are more close to regular consumer goods than prescripted medication (Reber, 2008). The focus will be on skin care products sold by Cosmétique Active BV (Vichy and La Roche-Posay).
Problem statement:
What dimensions shape the Reseller equity for Dutch pharmacies in the perception of consumers of different skin care brands?
1.4 Goal research
The goal of this research is to gain insight in the dimensions that shape Reseller equity for a pharmacy and to find out the most important dimensions for dermocosmetic consumers of different brands. The goal allows better understanding of the success factors of the pharmacy as a retail channel nowadays in the increasing competitive environment.
The four greatest pharmacy chains in the Netherlands (Mediq, Kring, Lloyds and Escura) are considered in this research. Moreover, the independent pharmacy is also considered as a separate group.
Research questions
1. What dimensions shape Reseller equity for a retailer?
2. What dimensions shape Reseller equity for a pharmacy in general?
3. What is the difference between Cosmétique Active consumers and consumers of other brands sold in the pharmacy regarding Reseller equity?
4. How do consumer characteristics affect the Reseller equity of the pharmacy? 1.5 Relevance of the study
1.5.1 Management relevance
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dermocosmetics in order to increase their own competitive positioning, performance and income. Consequently, this might also positively influence the financial result of Cosmétique Active. Moreover, if the new insights are transferred through the whole supply chain, in the end, consumers will benefit too due to a greater market orientation.
1.5.2 Scientific relevance
Channel and reseller relations are critical factors in the FMCG industry because most often the main sources of Brand Equity lie outside the brand-consumer relation (Jones, 2005). Often many other factors might be important for the overall consumer experience and reason for buying at a particular store. Much of the existing research in the area of retail has been about buying behavior and (in-store) marketing in and for supermarkets and drugstores (Ailawadi & Keller, 2004, Verhoef et al, 2009, Campo & Gijsbrechts, 2004, Baker et al, 2002, Arnol & Reynolds, 2003). Not much research has been done on the pharmacy as a reseller and the pharmacy as a retail environment. The studies which are conducted in this field are mainly about consumers’ involvement and purchase behavior when buying nonprescripted medicines in pharmacies in general (Gore et al, 1994). These studies are mainly conducted in the United States or other foreign countries. So far, there is not much known about the Dutch pharmacy as a retailer. Only Reber (2008) investigated the Dutch pharmacy market in terms of products-, store-, customer-, and competitor characteristics and how this might enhance OTC category sales and performance in general. However, according to Reber (2008) more research is necessary regarding these factors. Therefore, this research goes more in depth in these factors, especially in the most important factors (assortment and promotions). Next to this, this research intends to provide more insight in the construct of ‘Reseller equity’ because this construct is not very clearly defined in the literature. Anderson et al. (2009) formulate Reseller equity in their model as a black box. Not many studies have been done regarding the dimensions of Reseller equity, while the existing studies do not agree about the dimensions (Jones 2005, Kumar et al. 1992). Jones (2005) even states that Reseller equity only is a concept without a structured content. Therefore, this research will try to open the reseller box and explore what dimensions might shape Reseller equity for pharmacies.
1.6 Thesis structure
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Chapter 2 Theoretical framework
This chapter explores the theoretical constructs that are relevant in this study. This results in a conceptual model that serves as a basis for the study. The first research question, stated in chapter 1, will be answered here and serves as a guideline for the theoretical analysis. This chapter answers the first research question: ‘what dimensions shape Reseller equity for a retailer?’ A retailer in this research is a business that only sells consumer goods or services for personal or family use (Levy & Weitz, 2009).
2.1 Reseller Equity
As explained earlier, Reseller equity is the value of acquiring a supplier’s offering from a particular reseller versus other authorized resellers in the local trade area. In other words, Reseller equity is the value of a retailer in the perception of the consumer. These values or benefits might be the reason to choose a certain reseller, and can be tangible or intangible. For example, enjoying good advice and service, the benefits of attractive prices and promotions or the perception that products are better at a specific store. Moreover, these associations and knowledge regarding a certain retail channel might also be transferred by the Brand equity of the brands sold in a channel according to Keller (2008). This is called leveraging secondary brand associations.
Anderson et al (2009) also support this view, only they explain this leveraging or transfer of associations: a joint result of Reseller equity and Brand equity (Market place equity: the value that a consumer receives from acquiring a particular supplier’s product through a particular reseller in its local trade area). Ailawadi and Keller (2004) discuss a similar concept. They explain that the image of a retailer influences the image and equity of the brands they carry and vica versa. Thus, these manufacturer brands might function as ‘ingredient branding’ for a retailer (‘you are what you sell’). Both equities (brand and reseller) generate consumer interest, patronage, and loyalty for a store and result in a higher Market place equity (leaving Channel equity out of the picture). However, not all these values or benefits are in the circle of influence of the reseller. In order to maximize this value for the end-consumer a reseller has to be market oriented, that is, an organization culture that most effectively and efficiently creates the necessary behaviors for the creation of superior value for buyers and, thus, continuous superior performance for the business (Narver and Slater, 1990). Thus, it is important to know what the most important benefits / values are for a consumer when choosing a pharmacy. Ailawadi and Keller (2004) explored some important factors when choosing a regular store. However, the question is if these factors also apply to pharmacies. According to Ailawadi and Keller (2004) every retailer, thus also a pharmacy, has to build their own equity, especially since this equity provides a retailer big
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2.2 Location
Location might be a reason to choice for a particular store. The location of a specific retail store suggests a unique relationship to its market as well as a competitive relationship to other retailers (Karande & Lombard, 2005).The location of a store and the distance that the consumers have to travel to shop are basic criteria in their store choice decisions. They are key components in consumer’s assessment of perceived total shopping costs (Ailawadi & Keller, 2004).
However, consumers store choice may be based on different criteria depending upon the nature of the trip. For instance, shopping small basket, fill-in trips at general retailers, are very unlikely to be made to distant or inconvenient locations. Moreover, evidence is found that due to multi-purpose shopping and comparison shopping, a store in proximity to other stores may be more attractive than a competing freestanding store (Karande & Lombard, 2005). Nevertheless, according to Reber (2008) the Dutch pharmacy is not the same as a general retailer. Different reasoning is playing a role in the decision process. Reber (2008) found out that on the contrary to existing knowledge traditional retail factors like size or location play a rather insignificant role in the retail pharmacy market. This is supported by other literature which claims that for important or risky product categories customers often prefer specialty stores (Dash, Schiffman, and Berenson 1976). Therefore, not all elements of location are considered in this research. Characteristics of the trade area are not considered in this research. Only access and proximity are considered since these are an important part of the total shopping costs and consumers often try to optimize these costs (Bell, Ho & Tang, 1998).
However, according to Reber (2008) ‘Forced loyalty’ could be another explanation for the insignificant role of size and location of pharmacies, since in many rural areas there is only one pharmacy outlet. Hence, especially elderly or less mobile patients often have no other possibility than visiting this outlet. Therefore, this forced loyalty will be considered in this research as well.
2.3 Store atmosphere
Store atmosphere reflects the combination of the store’s physical characteristics, such as its architecture, layout, signs and displays, colors, lighting, temperature, sounds, and smells, which together create an image in the customer’s mind. The atmosphere communicates information about the store’s service, its pricing, and the fashionability of its merchandise (Levy & Weitz, 2009). Atmosphere affects consumers’ perceptions of the economic and psychological costs of shopping. Different elements of a retailer’s in-store environment can influence consumers’ perception of a store atmosphere, whether or not they visit a store, how much time they spend in the store, and how much money they spend (Grewel et al., 2003). A pleasing in-store atmosphere not only provides substantial hedonic utility to consumers but it also improves consumers’ perceptions of the quality of merchandise in the store, however consumers also tend to associate it with higher prices (Baker et al., 2002).
From a branding perspective, an appealing in-store atmosphere offers much potential in terms of crafting a unique store image and establishing differentiation. Increasingly, brands are being positioned on the basis of their intangibles, attributes and benefits that transcend product or service performances. Even if the products and brands stocked by a retailer are similar to others, the ability to create a strong in-store personality and rich experiences can play a crucial role in building reseller equity (Ailawadi & Keller, 2004).
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temperature but in terms of how comfortable the consumer feels in the pharmacy. Ambient features will most likely not be remembered by consumers since they are only noticed and remembered when they are unpleasant (Verhoef et al. 2009). This might especially be the case for pharmacies since the consumer visit the pharmacy less often than other retail stores like supermarkets. Moreover, most pharmacies in general do not play background music. Besides, Baker et al (2002) found out that music has no significant impact on perceived time/effort costs. Therefore, these elements will not be considered. In this research we only consider physical features in terms of design and layout since design cues have a significant impact on the perception of the merchandise quality perceptions (Baker et al. 2002). Moreover, the social features in terms of employee availability, friendliness and knowledge will be considered as well. Especially employee knowledge is important for a pharmacy since Franic et al (2008) –cited in Reber, (2008)- found that knowledgeable pharmacy personnel rather than convenience was the main criterion for choosing a pharmacy.
2.4 Price & Promotions
The perceived price level of a retailer is depending on different factors. It has to do with the depth and frequency of promotions, the retailer pricing format but also non-price related cues like service offerings and quality level according to Ailawadi and Keller (2004). The retailers pricing format is a strategy regarding pricing and is on a continuum between Every Day Low Price (EDLP) and High-Low Promotional Pricing (HILO). This also influences consumers’ store choice and shopping behavior since consumers are more likely to develop a favorable price image when retailers offer frequent discounts on a large number of products than when they offer less frequent, but steeper discounts. Research has found that (price) promotions can affect retail sales via five important mechanisms, namely brand switching, store switching, category expansion, purchase acceleration, and repetitive purchasing. The first four mechanisms are related to the immediate sales response, the latter applies to the long-term sales response (Blattberg and Neslin 1990).
That consumers may not form valid perceptions of actual prices in a store is supported by Dickson and Sawyers (1990), cited in Ailawadi and Keller (2004). However, consumers do develop some general price perceptions of a store based on products with high unit prices and high purchase frequency since these products are more salient. Reber (2008) found out that the marketing mix in terms of assortment and promotion, is the essential determinant for retail pharmacies to generate category sales increase and in that way improve their performance. Although highly effective in the short-run, price promotions are found to generate only weak or no impact in the long run on both, brand and category demand (e.g. Nijs et al. 2001; Ailawadi et al. 2006). Moreover, empirical results show that short-term and long-term promotional effectiveness on category demand lessens when nonprice advertising is used (Nijs et al. 2001, Osinga, Leeflang and Wieringa 2010). Reber (2008) found that promotional activities do have a significant impact on pharmacy performance. However, Reber (2008) only considered promotions in general as a variable. Reber (2008) could not disentangle to what extend price discounts, features or displays are more effective in enhancing category sales. Therefore, this research considers these variables more in depth.
2.5 Cross-category product assortment
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just behind location and price when asked about their reasons of patronizing a certain store
.
As mentioned earlier, Reber (2008) found out that assortment is an essential determinant for retail pharmacies to generate category sales increase and in that way improve their performance. Reber (2008) explains that the number of additional assortment is highly significant and positively affecting sales performance. However, according to Ailawadi and Keller (2004) broader assortment is not always better. Consumers may find it difficult to think of a retailer in connection with another very different product category if a retailer has strong signature associations with a certain category. For instance, pharmacies have a strong connection with medications and health care products, adding a totally unrelated product might not be successful and confusing for consumers regarding the store image. However, products with a high purchase frequency are more salient in determining the retailers’ image. Moreover, according to Ailawadi and Keller (2004) are the logic and sequence of a retailer’s assortment policy critical to its ability to successfully expand its meaning and appeal to consumers over time. Therefore, this research will consider the width of the assortment, purchase frequency, logic and sequence of the assortment and ideal assortment.2.6 Within-category assortment
In addition, the perceived depth of a retailer’s assortment within a product category is an important dimension of store image and a key driver of store choice as well (Ailawadi & Keller, 2004). The more brands, flavors and sizes the more likely consumers will find the item they desire. However, many offerings in a category can be costly for retailers and consumers. From the viewpoint of the retailer, cutting out 20 percent of the most inefficient items from its assortment can mean savings of several million dollars per year for a large chain. Moreover, from the viewpoint of the consumer too-much-choice leads to lower purchase intentions and lower choice satisfaction according to Iyengar and Lepper (2000), cited in Jessup et al. (2009). They observed that while people were attracted to more options while shopping, the larger assortment increased the likelihood that they would leave the store empty-handed. This effect has two main reasons: avoiding choice when the most preferred option changes too often, or when the consumer runs out of time. Thus, greater perceived assortment does influence store image, store choice, and satisfaction with the store, but more Stock Keeping Units (SKU) do not directly translate to better perceptions. Retailers can reduce the number of SKUs substantially without adversely affecting consumer perceptions, as long as they pay attention to the most preferred brands, the organization of the assortment and the availability of diverse products. Kahn and Wansink (2004) –cited in Ailawadi and Keller (2004)- found out that an organized and asymmetric assortment have a more positive effect on perceived assortment variety and consumption. However, this is beyond the scope of this study since the chosen method for this research is not suited for reliable results regarding symmetry and organization of the assortment. In order to measure depth of assortment, the preferred brands in the assortment will be considered and availability of the products.
2.7 Consumer characteristics
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deals (Baker et al, 2002 and Blattberg et al. 1978). Therefore, the variables: gender, age, family size and income are considered in this research as well.
2.8 Conceptual model
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Figure 2.1 Conceptual model
-Proximity -Access -Forced loyalty
Location
Store atmosphere
Price & Promotions
Within-category brand / item assortment -Depth of assortment -Preferred brands -Availability products Cross-category product assortment -Widt assortment -Purchase frequency -Logic & sequence -Ideal assortment
-Depth promotions -Frequency promotions -Service / quality -Physical features (design & lay-out) -Social features (employee
availability, friendliness, knowledge & other
RESELLER EQUITY Perceived pharmacy Reseller equity of Cosmétique Active consumers Consumer characteristics Moderator
(age, gender, income, family size)
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Chapter 3 Research design
With the specific conceptual model (figure 2) in mind, this chapter describes the empirical research design, from research method, to data collection, to data analysis. The research design is the blueprint for conducting the marketing research (Malhotra 2007).
3.1 Research method
This empirical research can be defined as a quantitative research (Baarda & De Goede, 2001). It is a conclusive research, which means it is designed to assist the decision maker in determining, evaluating and selecting the best course of action to take in a given situation (Malhotra, 2007). The goal of this research is to gain insight in the dimensions that shape Reseller equity for a pharmacy and to find the most important dimensions for dermocosmetic consumers of different brands.
3.2 Data collection
The data collection is done in cooperation with Intomart GfK. Intomart has an online panel of 120.000 participants with an extensive profile. The research is conducted by means of a Computer Assisted Web Interviewing (CAWI) method since this is an easy and inexpensive way of selecting the right target audience for the research. The panel is representative for the Dutch population and has an ISO-26362 certificate of quality (Intomart GfK, 2010). Moreover, the panel is exclusively build out of phone recruitment in order to avoid an overload of heavy internet users in the panel. According to the NOPVO (Nederlands Online Panel Vergelijkings onderzoek) the panel members of Intomart are more than average serious in taking their time for the questionnaire and fill it in completely with more extensive answers. Moreover, Malhotra (2007) also supports the online method of acquiring the right information since internet is a fast and flexible medium. Next to this, the processing speed and the transparency of the data is a great advantage. Moreover, online research is experienced as easy and user-friendly and there will be less ‘missing values’ or ‘errors’ because of the quality controls within the system and the guardians of the script. The online questionnaire is distributed among the 1500 participants of the panel. For this research only the survey questions A1, A4 and the screening questions are relevant. The other survey questions are assigned by the management of Cosmétique Active (for more information about the survey see appendix 1). The questions A1 and A4 cover the variables of the conceptual model and are based on a 5-point Likert-scale of importance (1=Not important at all, 5=Very important). Question A1 covers the more general reasons for visiting a pharmacy and question A4 covers the importance of more specific variables for a pharmacy.
3.3 Sample size
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Sample group: consumers (male / female), 18+, who have visited: Mediq, Kring, Escura, Lloyds or an independent pharmacy in the last 12 months, and who are users of skin care products bought in a pharmacy or in another channel.
3.4 Scale development
The concepts in the conceptual model (figure 2.1) are translated into variables and related survey questions based on existing scales of different literature (see table 1). Most variables are operationalized as interval variables on a 5 point Likert-scale. A Likert-scale is the most reliable scale and provides a greater volume of data than many other scales (Cooper & Schindler, 2006). The language of the questionnaire is simplified to make it more accessible for the respective target groups. Furthermore, the questionnaire is set up in Dutch because all respondents are Dutch. Not all the questions in the survey are used for further analysis since some questions were only useful for the management. The concepts in table 3.1 are tested in chapter 4 on internal consistency by means of a Cronbach alpha.
Constructs and variables Literature Survey question
Location Access
Proximity to home/work Proximity to other stores
Proximity to health care facilitators/ physicians
Parking Opening hours Forced loyalty
Bell, Ho & Tang (1998). Ailawadi & Keller (2004). Karande & Lombard (2005). Reber (2008) Question: A1 How important are these factors when choosing a pharmacy in general? Physical features Design (interior)
Lay-out (logic & organized merchandise) Communication material
Baker et al (2002) Servqual: Reimer & Kuehn (2004) Reber (2008)
Question: A4 How important are these factors for a pharmacy in general? Ambient features
Perception of nice atmosphere (music, smell & lighting are often not remembered by consumers therefore covered in one question)
Verhoef et al (2009) Reber (2008) Question: A1 & A4 -Nice atmosphere Social features
Employee perceptions (friendly, availability, knowledgeable)
Other clientele (waiting line)
Baker et al (2002) Ailawadi & Keller (2004) Reber (2008) Question: A1 (knowledgeable staff) Question: A4 (Employee perception & other clientele)
Prices & Promotions
EDLP: frequency promotions (less discount on many products)
HILO: depth promotion (steep discount on less products)
Purchase behavior regarding promotions
18
Cross-category product assortment Logic & sequence assortment Width of assortment
Ideal assortment
Ailawadi & Keller (2004)
Hoch et al (1999)
Question: A4 -Logic & sequence assortment -Width of assortment -Attractive brands Within-Category product assortment
Depth of assortment
(Most preferred brands, Availability)
Ailawadi & Keller (2004) Jessup et al (2009) Question: A4 -products are always available -attractive brands in assortment Consumer characteristics Age Gender Family size Income Hoch et al. (1995). Blattberg et al. (1978) Baker et al. (2002) Screening: -What is your age? (interval)
-What is your gender? (nominal) -How big is your family? (interval) -What is your average annual income? (ordinal)
Table 3.1 Survey concepts and variables
3.5 Plan of analysis
In this paragraph the plan of analysis will be presented. Different statistical techniques are used in order to answer the research questions. Table 3.2 presents the different statistical techniques for analysis.
Theoretical Analysis method
What dimensions shape Reseller equity for a pharmacy?
Factor analysis on the importance of the Reseller equity variables (see conceptual model 2.8, pp18) What is the difference between Cosmétique
Active consumers2 and consumers of other skin care brands sold the pharmacy regarding Reseller equity?
Discriminant analysis on the Cosmétique Active consumersand consumers of other skin care brands How do consumer characteristics affect Reseller
equity of the pharmacy?
Age (correlation)
gender(Anova),income (Anova), familiy size (Anova).
Table 3.2. Research questions and techniques of analysis
2
19
Chapter 4 Results
In this chapter, the results of the research will be presented. Paragraph 4.1 provides more information about the response accountability. Paragraph 4.2 discusses the general results of the sample, some characteristics of the respondents and the highlights of the consumers who visit the different pharmacy chains. Paragraph 4.3 answers the research question: ‘what dimensions shape Reseller equity for a pharmacy in general?’ Moreover, paragraph 4.4 answers the research question: ‘what is the difference between Cosmétique Active consumers and consumers of other brands sold in the pharmacy regarding Reseller equity?’
4.1 Response accountability
The sample consists out of members of the Intomart GfK Online panel. In total 511 people filled in the questionnaire (Mediq: n=94, Kring: n=110, Escura: n=105, Lloyds: n=95, Independent: n=107).
Sample frame (sent out) 1502
Questionnaire not completed 12
Dropped out based on screening 153
Too Late 563
Questionnaire not opened 263
Questionnaires filled in completed 511 4.2 Respondents
4.2.1 Descriptive results
This paragraph provides more insight in the respondents of this research. On average 57% of the respondents are women. In general a consumer (58%) visits their pharmacy every couple of months (see attachment SPSS output 1). Most of the respondents do not have kids living at home (70%). Almost one third finished a Vocational Education (MBO) education and lives (30%) in a strong urban area (1500-2500 adresses per square km). Most of the respondents earn a gross annual income of once or twice the average income per household (for more information of the respondents see SPSS output 2. Frequencies respondents). Table 4.1 presents information of the respondents per pharmacy chain / group (based on the pharmacy which they visit the most). Figure 4.1 presents the average pharmacy visitor.
Pharmacy
Gender Age Visit frequency pharmacy
Purchase skin care at pharmacy male female younger than 35 year 35 - 49 year 50 - 64 year 65 year & older couple times per month once a month every couple of months (very) often (almost) never Mediq 15,1% 13,7% 18,5% 11,4% 14,4% 13,1% 16,8% 20,6% 12,0% 19,4% 15,3% Kring 19,5% 22,9% 25,3% 20,6% 20,6% 18,8% 30,3% 23,6% 18,7% 19,2% 22,1% Escura 8,2% 6,4% 8,2% 7,4% 6,5% 6,7% 5,8% 6,4% 7,7% 5,4% 8,3% Lloyds 3,4% 4,9% 5,8% 3,8% 3,8% 4,2% 3,9% 2,9% 4,7% 3,4% 5,0% Independent (no chain) 53,8% 52,1% 42,3% 56,9% 54,9% 57,2% 43,1% 46,5% 56,9% 52,6% 49,3%
20 4.2.2 Statistical results
Based on a Bonferroni test there are no significant differences between the consumers who visit the different pharmacy chains based on gender, age and visit frequency (see attachment SPSS output 3). A Bonferroni Post Hoc test is applied for multi comparison of the different variables since this test is more reliable then conducting many t-tests on the same data (Vocht, 2002). However, respondents who visit different pharmacy chains do think different about their pharmacy in terms of the importance of the Reseller equity dimensions. Based on an Anova test for comparison of the group means on each dimension, there is a significant difference between the respondents of each chain on the dimensions: attractive design/interior (sig.0.02), attractive POS material (sig.0.00), expertise of the staff (sig.0.011), interesting advertising brochure (sig.0.001). The hypothesis H0 (of equal means) should be rejected for these variables since the alpha is smaller than 0.05 (attachment SPSS output 4). Table 4.2 shows that Mediq (3,42), Lloyds (3,40) and Escura (3,38) have a high mean on attractive interior/design. Mediq (3,20) also has a high mean on attractive POS material, while the independent pharmacy has the lowest mean on this factor (2,71). When it comes to expertise of staff the independent pharmacy scores the highest (4,32) and Mediq (4,02) the lowest. Moreover, Mediq (2,95) and Kring (2,78) score on average higher on interesting promotional brochure.
Pharmacies Mean Attractive interior/design (sig.0.02) Mean Attractive POS material (sig.0.00) Mean Expertise of staff (sig.0.011) Mean Interesting promotional Brochure (sig.0.001) Mediq 3,42 3,20 4,02 2,95 Kring 3,21 3,02 4,12 2,78 Escura 3,38 3,01 4,09 2,70 Lloyds 3,40 3,01 4,12 2,75 Independent 3,12 2,71 4,32 2,53 Total 3,21 2,88 4,21 2,67
Table 4.2. Anova test
21
4.3 Factor Analysis on the importance of the Reseller equity dimensions
In this paragraph the next research question will be answered: ‘what dimensions shape Reseller equity for a pharmacy in general?’
First a factor analysis is conducted on the importance of the Reseller equity dimensions explained in left side of the conceptual model (see figure 2.1).
A factor analysis is a class of procedures primarily used for data reduction and summarization. In order to reduce the amount of variables, each variable is expressed as a linear combination of underlying factors (Malhotra, 2007). Before a proper factor analysis can be executed it is important to know whether the sample is adequate. The KMO measures this sampling adequacy. The sampling adequacy predicts if data are likely to factor well, based on correlation and partial correlation. If the KMO is over 50% and the Barlett’s test of sphericity is significant (<.05) the factor analysis is appropriate (Malhotra, 2007).
Table 4.3 shows that this factor analysis is significant (Bartlett's Test of Sphericity sig.000) and appropriate with a high KMO score of .908. Thus, the factor analysis will be used for further research. The next steps are: select the factor model, select the amount of factors and the last step is the factor interpretation and reliability.
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. ,908
Approx. Chi-Square 5866,041
df 253
Bartlett's Test of Sphericity
Sig. ,000
Table 4.3. KMO and Bartlett’s Test for the appropriateness of the factor analysis.
Select factor model
The variables in the Rotated Component Matrix (table 4.4) belong to four different factors. The factor scores are based on the score of importance on the Reseller equity factors (in the perception of the consumer). The green selected variables possess the highest correlation with the factor. Loadings above 0,5 indicate that a variable belongs to a certain factor, the highest loading contributes the most to a particular factor. See the Rotated Component Matrix (table 4.4).
Rotated Component Matrixa
Component
1 2 3 4
1. Nice atmosphere ,109 ,646 ,414 ,122
2. Clear layout ,399 ,308 ,566 ,008
3. Attractive interiour / design ,096 ,252 ,727 ,225
4. No or short waiting lines ,213 ,521 ,084 ,422
5. Attractive POS materials ,225 ,014 ,765 ,207
6. Friendly staff ,075 ,849 ,117 ,092
22
8. Expertise of staff ,159 ,809 -,009 ,029
9. Broad assortment ,796 ,169 ,222 ,105
10. Logic sequence of the shelves ,464 ,240 ,508 -,033
11. Low priced assortment ,686 ,169 ,350 ,115
12. Attractive brands in assortment
,606 ,236 ,442 ,059
13. Products are always on stock ,555 ,451 ,075 ,108
14 The newest products are always available
,659 ,211 ,307 ,140
15. Interesting promotional leaflet ,415 -,058 ,674 ,122
16. Close to home / work ,085 ,214 -,036 ,691
17. Close to other stores ,331 -,023 ,120 ,598
18. Close to healthcare centre / physician
-,089 -,019 ,098 ,624
19. Good accessibility ,150 ,284 -,019 ,694
20. Enough space to park ,097 ,052 ,240 ,576
21. Attractive assortment ,726 ,083 ,083 ,339
22. Interesting promotional leaflet ,415 -,058 ,674 ,122
Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. a. Rotation converged in 7 iterations.
Table 4.4. Rotated component matrix factor analysis.
Select number of factors
23 Table 4.5. Total variance explained
Factor interpretation and reliability
Before using the factors for further research it is important to measure the internal consistency of the variables. Therefore, a Cronbach's alpha is an appropriate method. A Cronbach’s alpha is an approach for assessing the internal consistency of a set of items when several items are summated in order to form a total score for the scale (Malhotra, 2007). The internal consistency of a factor is high enough when the Cronbach Alpha above 0.60.
Based on the Cronbach alpha analysis, all the four variables enjoy an internal consistency higher than 0.6 (see table 4.6, 4.7, 4.8, 4.9). Thus, they can be combined together for further research (for the discriminant analysis). The factor score per variable, and the mean of the four factors are presented below.
Factor 1: Assortiment (2,8806)
1. Broad assortment (.796) 2. Attractive assortment (.726) 3. Low priced assortment (.680)
4. Newest products always available (.659) 5. Interesting brands in assortment (.606) 6. Products are on stock (.555)
Table 4.6 Cronbach alpha. Assortment
Factor 2: Ambient & social features (4,0566)
1. Friendly personnel (.849) 2. Expertise of staff (.809)
3. Staff has enough time to help (.782) 4. Nice atmosphere (.646)
5. Short or no waiting time (.521)
24
Factor 3: Physical features (2,9540)
1. Attractive POS material (.765) 2. Attractive design / interieur (.727) 3. Interesting advertising brochure (.674) 4. Clear lay-out (.566)
5. Logic sequence on the shelf (.508)
Factor 4: Location & convenience (3,5104)
1. Convenient accessability (.694) 2. Close to home / work (.691)
3. Close to physician / healthcentre (.624) 4. Close to other stores (.598)
5. Enough parking space (.576)
Conclusion Factor analysis
Thus, four factors are important for a pharmacy in general. These four factors shape Reseller equity in this research. These factors consist of 21 variables. Some of these factors are the same as the factors for a regular retailer, some should be merged together or should be separated based on this analysis. Regarding location, every item which is important for a regular retailer is also important for a pharmacy. The concept ‘Store atmosphere’ should be divided in ‘Ambient & Social features’ and ‘Physical features’. Moreover, ‘Cross and within category assortment’ can be merged together into one factor, so called: ‘Assortment’.
Thus, these four factors include different variables than the five factors explained in the conceptual model (see figure 2.1) These four factors shape Reseller equity for a pharmacy. Especially ‘Ambient & Social features’ form the Reseller equity of the pharmacy a great deal since this factor has the highest average (mean 4,0566) on importance, see table 4.10. It can be concluded that in general, consumers find staff related aspects important for a pharmacy. 4.4 Discriminant Analysis Skin care consumers
This paragraph answers the research question: ‘What is the difference between Cosmétique Active consumers and consumers of other brands sold in the pharmacy regarding Reseller equity?’ This is done by means of a Discriminant analysis. A Discriminant analysis joins a nominally scaled criterion or dependent variable with one or more independent variables that are interval- or ration-scaled (Cooper & Schindler, 2006). The goal of this Discriminant analysis is to profile the two groups based (Cosmétique Active consumers and consumer of other skin care brands) on the four factors of the factor analysis. Thus, the criterion variable in this research is: Cosmétique Active consumers (CA=0) or other skin care consumers (other=1), the independent variables are the four factors found in the factor analysis.
4.5.1 Estimate the discriminant function of the coefficients
Next, the coefficients of the discriminant function needs to be estimated. There are two approaches available. The direct and the stepwise discriminant analysis (Malhotra, 2007). For this research the stepwise method is applied since it is needed to include the predictor variables based on their ability to discriminate.
Reliability Statistics Cronbach's Alpha Cronbach's Alpha Based on Standardized Items N of Items ,838 ,838 5 Reliability Statistics Cronbach's Alpha Cronbach's Alpha Based on Standardized Items N of Items ,743 ,851 5
25
This is first done by the test of equality of group means, which is conducted in order to get insight in which active variables significantly contribute (sig.<0.05) to the discriminant function. Based on the test Equality of group mean, the factors: Assortment (sign.000) and Physical features (sign.003) contribute significantly to the discriminant function. Based on the Eigenvalues test, the discriminating function estimates 22% of the total variance (for more information, see SPSS output 6).
4.5.2 Determine the significance of the discriminant function
Currently no conclusions can be drawn yet since it should be clear if the mean of the two groups differ. This is done by a Wilks’ Lambda test. When the level of significance of this test is smaller than 0.05 the discriminant function is significant and H0 (the means of the two groups do not differ) should be rejected. The Wilks’ Lambda test shows that the mean of the two groups (Cosmétique Active consumers and consumer of other skin care brands) differ since the level of significance is .000.
4.5.3 Interpret the results
Table 4.10 show the results of the Discriminant analysis. This table presents the structure correlations (discriminant loadings), the standardized coefficients (degree of contribution to the power of the discriminating function), the means of the two different groups and the means in total. The structure correlations shows that ‘Assortment’ and ‘Physical features’ have a high correlation with the discriminating function, especially ‘Assortment’ (1,000). In general, predictors with relatively large standardized coefficients contribute more to the discriminating power of the function, as compared with predictors of with smaller coefficients, and are, therefore, more important (Malhotra, 2007). Based on this analysis it becomes clear that only ‘Assortment’ contributes to the discriminating function. After defining this function it is tested how the two groups score on the function, these outcomes show that ‘Cosmétique Active consumers’ (group 00) score above average (.447) on the function, and ‘Consumers of other brands bought in the pharmacy’ (group 1) score below average (-.115) on function one (SPSS output 6.6)
Thus, consumers who buy Vichy and / or La Roche-Posay (Cosmétique Active consumers) at the pharmacy score significantly higher than average on the importance of the two Reseller equity dimensions: ‘Assortment’ en ‘Physical features’, especially on ‘Assortment’. Consumers who buy other brands at the pharmacy score significant lower than average on the importance of ‘Assortment’ and ‘Physical features’. See table 4.10 results of the Discriminant function.
FACTOR Structure correlations Standardized Coefficient Mean Vichy & LRP consumers (0) Mean Consumers of other brands (1) Mean Total Factor 1. Assortment (sig.000) 1,000 1,000 3,6063 3,2164 3,2960 Factor 2. Ambient & Social features
(sig.335) ,496 -- 4,1442 4,0693 4,0846 Factor 3. Physical features (sig.003) ,826 -- 3,1405 2,8658 2,9219 Factor 4. Location & Convenience (sig.332) ,418 -- 3,5284 3,4440 3,4613
26 4.5.4 Determine the validity of the discriminant analysis
At last, it is important to test the validity of the Discriminant analysis. This is based on the leave-out-principle. The Classification of Results table (SPSS output 6.8) shows that 62% of the respondents are assigned to the right group, which is 12% more than the chance 50%. This outcome is not very strong however it is high enough to know the respondents are not random distributed between the groups (Malhotra, 2007).
4.5 Consumer characteristics
The characteristics and background of the consumer might influence the perceived importance of the dimensions of Reseller equity. It has been suggested that gender, age, income and family size influence store choice (Hoch et al. 1995). Therefore, these variables are considered in this research. An Anova analysis and a Pearson Correlation analysis are conducted in order to learn more about the influence of these variables. The Product moment correlation (r) measures the linear association between two metric (interval or ratio scaled) variables (Malhotra, 2007). Based on the Pearson correlation test it becomes clear that there is no significant relation between age and the four different factors since the alpha is smaller than < 0.05. Thus, H0 should be accepted (there is no significant relation between the variables), see attachment SPSS output 5.1 Pearson correlation test. Nevertheless, based on an Anova analysis there is a significant difference between men and women on the factors: ‘Assortment’, ‘Physical features’, ‘Location & Convenience’ (see attachement SPSS output 5.2 Anova test). And since the alpha is smaller than 0.05, H0 of equal means should be rejected. Thus, in this case H1 (the means are not equal) should be accepted. Table 4.11 shows that women score a higher mean on three factors, they find these factors on average more important than men.
Factor Men Women Total
Factor 1. Assortment (sig.010) 2,8003 2,9402 2,8806 Factor 3. Physical features (sig.00) 2,8081 3,0623 2,9540
Factor 4. Location & convenience (sig.034)
3,4405 3,5624 3,5104
Table 4.11. Average factor score gender on the significant factors
Also income might influence store choice due to budget constraints (Hoch et al. 1995), however is this also the case for the pharmacy? Based on an Anova test (Attachment SPSS output 5) there is a significant difference between income and the perceived importance on the factors: ‘Assortment’ (sig.000), ‘Ambient & Social features’ (sig.014), ‘Physical features’ (sig.002), ‘Location & Convenience’ (sig.000)’. However, it becomes clear that all the consumers -no matter their income- find ‘Ambient & social features’ the most important. When looking at the means per factor, it becomes clear that consumers who earn below average enjoy on average the highest score on factor 2: ‘Ambient & Social features’ (4.2041), followed by factor 4: ‘Location & Convenience’ (3.8679) and factor 1: ‘Assortment’ (3.29). Consumers who earn minimum income (less than 11.500 euro) score the highest on factor 3: ‘Physical features’ (3.3132).
INCOME Factor 1 Assortment Factor 2 Ambient/ Soc.features Factor 3 Physical features Factor 4 Location & Convenience
Minimum (less than 11.500 euro) 3,0038 3,9835 3,3132 3,6061
Below average (11.500 – < 24.500 euro)
3,2900 4,2041 3,1786 3,8679
27
Average (30.000 – < 36.000 euro) 2,9097 4,1389 3,0597 3,4928
Between 1 & 2x average (36.000 – < 60.500 euro)
2,8051 4,0808 2,8484 3,4235
2x average (60.500 - < 72.000) 2,8541 4,0109 3,0400 3,6094
More than 2x average (72.000 euro or more)
2,4843 3,7697 2,5846 3,4375
I don’t know / Don’t want to tell 2,9015 4,0982 2,9793 3,5816
Total 2,8840 4,0580 2,9624 3,5066
Table 4.12 Average factor score on income
According to Hoch et al (1995) family size might also influence store choice. Based on a Pearson correlation test (attachment SPSS output 5.4), only the factor ‘Physical features’ (sig.005) is significant. However, the R² is .123 which means only 12,3% of the variance is explained. This is a weak positive relation between (the importance of) ‘Physical features’ and family size. The average family size of the respondents exist of 2 persons (2.39). Consumers who find ‘Physical features’ (factor 3) important score a higher mean on family size (see table 4.13). Although this relationship is weak, consumers with bigger families rank ‘Physical features’ higher than average (on importance).
Descriptive Statistics
Mean Std. Deviation Sig.
Family size (min.1-max.6) 2,39 1,101 --
Factor 1. Assortment 2,8806 ,60631 .299
Factor 2. Ambient & Soc. features
4,0566 ,53493 ,945
Factor 3. Physical features 2,9540 ,68649 ,005
Factor 4. Location & convenience
3,5104 ,64283 ,058
28
Chapter 5 Conclusions and Further research
The most important results and the problem statement will be discussed in this chapter: ‘what dimensions shape the Reseller equity for Dutch pharmacies in the perception of consumers of different skin care brands?’ The first paragraph 5.1 covers the first research question: ‘what dimensions shape Reseller equity for a retailer?’ Paragraph 5.2 answers the research question: ‘what dimensions shape Reseller equity for a pharmacy in general?’ Paragraph 5.3 discusses the research question: ‘what Reseller equity dimensions are the most important for consumers of Cosmétique Active vs consumers of other skin care brands sold in the pharmacy?’ Paragraph 5.4 answers the last research question: ‘how do consumer characteristics affect the Reseller equity of the pharmacy?’ These implications also include suggestions for future research per research question.
5.1 Reseller Equity for retailers
What dimensions shape Reseller equity for a retailer? Reseller equity is the value of a retailer in the perception of the consumer. In this research it is defined by the factors of Ailawadi and Keller (2004). They have studied a multitude of retailer attributes that consumers find important and influence store choice. They categorized all these variables into five categories: (1) location, (2) in-store atmosphere (3) price and promotion, (4) cross-category product assortment, and (5) within-category brand/item assortment. All these dimensions might affect the value of a retailer and finally the reason to choose for a particular retailer. The conceptual model in paragraph 2.8 provides a clear overview of the variables which are classified in these five concepts.
5.2 Reseller Equity for pharmacies
What dimensions shape Reseller equity for a pharmacy in general? The five concepts of Ailawadi and Keller (2004) in combination with other literature (Reber, 2008) results in 21 variables. These variables can be combined into four factors that define the Reseller equity for a pharmacy. These factors are: ‘Ambient & social features’ (mean 4,0566)3, ‘Physcial features’ (mean 2,9540), ‘Assortment’ (mean 2,8806), ‘Location & Convenience features’ (mean 3,5104). Figure 5 presents the Reseller equity model of the pharmacy. The four factors on the left side of the model shape Reseller equity for a pharmacy in general. It becomes clear that ‘Ambient & Social features’ enjoy the highest mean on importance for a pharmacy. Thus, this factor contributes the most to the Reseller equity for the pharmacy in general. Staff related aspects (Friendly personnel, Expertise of staff, Staff has enough time to help) and other social and ambient features like ‘Nice atmosphere’ and ‘Short or no waiting time’, are very important for a pharmacy and might be important drivers for choosing a pharmacy. The right side of the model specifies Reseller equity in the perception of Dermocosmetic consumers (Cosmétique Active consumers: Vichy & La Roche-Posay). Cosmétique Active consumers perceive Reseller equity different than consumers of other brands. Especially Assortment (sig.000 / mean 3,6063) and Physical features (sig.003 / mean 3,1405) are more important for the Reseller equity of the pharmacy in the perception of these consumers.
5.3 Pharmacy Reseller equity for consumers of different skin care brands
What is the difference between Cosmétique Active consumers and consumers of other brands sold in the pharmacy regarding Reseller equity?
Based on this research it becomes clear that the value of a pharmacy, the Reseller equity, is perceived differently by Cosmétique Active consumers (Vichy and La Roche-Posay) than by consumers of other brands bought in the pharmacy. The Discriminant analysis shows that there is a discriminating function between the two groups. This function has the highest correlation
3
29
30 5.4 Consumer characteristics
There are also other factors that might affect the perceived importance of the Reseller equity dimensions for a pharmacy. The characteristics of the consumer might influence how important the consumer think these dimensions are. The outcomes of this study show that gender, income and family size have a significant different mean on the four factors. However, there is no significant relation between age and the four different factors (see figure 4). Women significantly find the factors: ‘Assortment (mean 2,9402), ‘Physical features’ (mean 3,0623), ‘Location & Convenience’ (mean 3,5624)’ more important than men4. For further research it might be interesting to find out why. Moreover, there is a significant difference between income and the perceived importance of all four factors. It becomes clear that consumers who earn below average (€11.500 – < €24.500) find ‘Ambient & Social features’ (mean 4.2041) the most
4
Average score of men= Assortment 2,8003, Physical features 2,8081, Location & Convenience 3,4405. -Convenient accessability (.694)
-Close to home/work (.691) -Close to physician (.624) -Close to other stores (.598) -Enough parking space (.576) Location & Convenience (3,5104)
Ambient & soc.features (4,0566)
Assortment (2,8806) -Broad assortment (.796) -Attractive assortment (.726) -Low priced assortment (.680) -The newest products are always available (.659)
-Interesting brands in assortment (.606)
-Products are on stock (.555) -Friendly personnel (.849) -Expertise of staff (.809) -Staff enough time to help (.782) -Nice atmosphere (.646) -Short or no waiting time (.521)
Physical features (2,9540) -Attractive POS material (.765) -Attractive design/interieur (.727) -Interesting adv. brochure (.674) -Regular interesting deals (.589) -Clear lay-out (.566)
-Logic sequence shelves (.508)
Consumer characteristic moderators: -Gender (Assortment sig.010, Physical features sig.00, Location sig.034)
-Family size (Physical features, sig.005) -Income (Location sig.000, Assortment sig.00, Physical features sig.002, Ambient & social sig.014) -Age (not significant)
Reseller equity pharmacy for Cosmétique Active consumers.
(Assortment sig.000 / 3,6063, Physical features sig.003 /3,1405)
RESELLER EQUITY PHARMACY
Figure 5.1 Reseller equity model for pharmacies
31
