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Perceived shopping values:

Influence on store satisfaction and store loyalty for different retail

format stores

Author:

Jean-Paul Wu

Radijsstraat 69B

9741 BL Groningen

+31 (6) 51 551 512

j.wu.1@student.rug.nl

Student number: 1781332

University of Groningen:

Faculty of Economics and Business

MSc Marketing Management

Master Thesis

09-07-2014

1

st

Supervisor: Prof. Dr. L.M. Sloot

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Management summary

With the emergence of Internet, online shopping has become more and more important for most consumers. However, the traditional brick-and-mortar retailers need to keep up with the changing environment and therefore need to understand how consumer behavior are evolving and which impact the changes has on consumer expectations, both in and outside retail stores. The aim of this study will be to find out which antecedents determines perceived shopping values and which influence it has on store satisfaction and store loyalty, and what retail stores should do to improve the satisfaction and loyalty of consumers. This research contributes to current literature by further enhancing academics’ knowledge of perceived shopping values on store satisfaction and store loyalty. In this research it is believed that perceived shopping value is a tradeoff between perceived shopping benefits and perceived shopping costs. Furthermore, this study will find out which perceived shopping values has a stronger or weaker impact on store satisfaction for different retail format stores. The different retail formats are divided by two moderators; type of product sold by the retailer (utilitarian ‘functional’ products vs. hedonic ‘fun’ products) and the store brand equity. It is believed that consumers which shop in retail stores that provides hedonic products have more favor for perceived shopping benefits. Consumers which shop in retail stores that provides utilitarian is more likely to a have favor for perceived shopping costs. Furthermore, it is believed that consumers have more favor for perceived shopping benefits when they shop in retail stores that have higher store brand equity. On the other hand, it is believed that consumers have more favor for perceived shopping costs when they shop in retail stores that have low store brand equity. Hence, this leads to the following research question:

“What is the effect of perceived shopping values on store satisfaction and store loyalty, and to what extent is this relationship moderated by the type of product and store brand equity?”

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3 that the positive impact of perceived enjoyment on store satisfaction is larger for high brand equity stores than for low brand equity stores. In additional, a mediating model was also included to test whether the relationship of perceived shopping values on store loyalty was mediated through store satisfaction. The result showed that perceived price and time and effort costs seems to have a partial mediation effect between store satisfaction and store loyalty.

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Preface

This paper had been written as the final chapter of my master in Marketing Management, specialization of the master program Business Administration at the University of Groningen. With the completion of the master thesis I will finish my master study after having finished the bachelor program of Business Administration earlier during my career as a student in Groningen.

The orientation towards (retail) marketing and my interest in this area of the marketing profession has started with marketing lectures during the bachelor phase of my study. During my most recent study in Marketing Management, I chose the facultative course of Retail Marketing. This course has instigated my interest for the world of retail even more. During this period, I decided that my master thesis would be about Retail Marketing as well and in February 2014 I therefore started with my thesis with prof. dr. L.M. Sloot as my supervisor. This thesis subject gave me an opportunity to combine my knowledge of marketing with the reality of consumers’ shopping process in the retail world.

Furthermore, I would like to take this opportunity to thank some people that helped me along the road of writing my thesis. First of all, I would like to thank my supervisor prof. dr. L.M. (Laurens) Sloot for his constructive feedback, help and suggestions during the research process. Next, I would like to thank my friends and family for their support throughout during my studies. Lastly, I would like to thank my fellow thesis group members for providing feedback and help during the thesis process.

Groningen, 09-07-2014

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Table of content

1 Introduction ... 7

1.1 Research objective and research question ... 8

2 Literature Review ... 11

2.1 Perceived shopping values ... 11

2.2 Classification of perceived shopping values ... 12

2.3 Antecedents of perceived shopping benefits and costs ... 13

2.3.1 Merchandise quality ... 13

2.3.2 Service quality ... 14

2.3.3 Enjoyment... 14

2.3.4 Perceived price ... 14

2.3.5 Time and effort costs ... 15

2.4 Store satisfaction ... 15

2.5 Customer store loyalty ... 16

3 Hypotheses and conceptual model ... 17

3.1 Perceived shopping benefits... 17

3.2 Perceived shopping costs ... 18

3.3 Store satisfaction and customer store loyalty ... 19

3.4 Type of product ... 19

3.5 Store brand equity ... 20

3.6 Conceptual model ... 22

4 Methodology ... 23

4.1 Data collection ... 23

4.2 Questionnaire design ... 24

4.3 Measurement of concepts ... 25

4.3.1 Measuring merchandise quality ... 25

4.3.2 Measuring service quality ... 25

4.3.3 Measuring enjoyment ... 25

4.3.4 Measuring perceived price ... 26

4.3.5 Measuring time and effort costs ... 26

4.3.6 Measuring store satisfaction ... 26

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4.3.8 Measuring store brand equity ... 26

4.3.9 Other variables ... 28

4.4 Plan of analysis ... 28

4.4.1 Analysis of samples and demographics ... 29

4.4.2 Basic analysis ... 29

4.4.3 Testing conceptual model ... 29

4.4.4 Testing mediation effect ... 30

5 Results ... 31

5.1 Descriptive analysis... 31

5.2 Reliability analysis ... 35

5.2.1 Type of product and store brand equity ... 36

5.3 Regression Analysis ... 37

5.3.1 Multicollinearity ... 37

5.3.2 Main effect of perceived shopping benefits and perceived shopping costs ... 37

5.3.3 The effect of the moderators ... 38

5.3.4 The effect of control variables ... 38

5.3.5 Testing mediating effect ... 40

6 Discussion ... 43

6.1 Effect of perceived shopping benefits ... 44

6.2 Effect of perceived shopping costs ... 44

6.3 Effect of store satisfaction ... 45

6.4 Effect of moderators ... 46

7 Managerial implications ... 48

8 Limitations and further research ... 51

References ... 52

Appendices ... 57

Appendix 1: Questionnaire ... 57

Appendix 2: Results factor analysis ... 62

Appendix 3: Mean of type of product and store brand equity ... 63

Appendix 4: Multicollinearity VIF and tolerance scores ... 64

Appendix 5: Multiple regression analysis ... 65

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1 Introduction

Current retail stores looks quite different today than it did ten or twenty years ago. The way that consumers make purchasing decisions has dramatically changed. With the emergence of Internet, smartphones and tablets, online shopping has become more and more important. Nowadays, consumers can easily choose to shop via Internet instead of going to the traditional brick-and-mortar stores. To keep up with the changing environment, the traditional brick-and-mortar retailers need to develop an understanding of how consumer behavior are evolving and which impact the changes has on consumer expectations, both in and outside retail stores. As the number of people using the Internet for their shopping steadily rises, it is increasingly important for retailers to understand why consumers decide to buy products online or offline.

Deloitte (2013) suggest that the role of the traditional brick-and-mortar stores needs to evolve to become part of a much more complex relationship between retailer and customer. It is important to find a new balance between providing inspiration and emotional engagement while offering new ways of experiencing the breadth and depth of the range. With the changing environment the marketing activities of retail stores will play a greater role. Prior research has largely approached retailing from utilitarian and hedonic shopping value perspectives (Babin et al., 1994; Arnold and Reynolds, 2003; Jones et al., 2006). Emergence of experience economy and experiential marketing has brought forth an experiential approach to retailing (Pine and Gilmore, 1998; Verhoef et al., 2009). Nowadays, superior customer experience seems to be one of the central objectives in today’s retailing environment. Pine and Gilmore (1998) emphasized that it is important for firms to focus on customer experience, claiming that differentiation strategies based on service and price are no longer sufficient to create customer satisfaction. Retail experience is created not only by elements which the retailer can control (e.g., service interface, retail atmosphere, assortment, price), but also by elements that are outside of the firms’ control (e.g., influence of others, purpose of shopping) (Verhoef et al., 2009).

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8 personnel. This includes service elements such as presence of personnel that offer services to consumers when needed or wanted. The social benefits of shopping are not only based on employees of the store, it also includes shopping with friends and/or families, which also can be referred as social shopping value (Arnold and Reynolds, 2003). On the other hand, consumers do not only perceive shopping benefits, they also perceive downsides during the shopping process. For example, consumers can perceive time and effort when shopping through a store (Baker et al., 2002), which also can be perceived as a shopping cost.

Furthermore, in the offline retail setting a distinction can be made between the different format stores. Retail store formats can be, for example, divided in type of store such as food store or merchandise store, more detailed are retail stores such as supermarkets, drugstores, and clothing stores. Arnold and Reynolds (2003) mentioned a future research for whether shopping motivations differ for different retail shopping formats, which could offer new insights for retail practitioners and their specific retail format store. To make a distinction for different retail shopping formats, it is possible to differ stores by type of product sold by the retailer, for example hedonic or utilitarian products.

1.1 Research objective and research question

The previous sections outlined the background for this research. Although recent research concerning perceived shopping values has been focusing on enhancing store satisfaction and store loyalty, there are still some concepts and moderating variables that are not yet researched. Until now, prior research has primarily focused on shopping motivations derived from utilitarian and hedonic perspectives (e.g. Hirschman and Holbrook, 1982a; Arnold and Reynolds, 2003). Limited research has been conducted about perceived shopping values in relation to shopping in different retail formats. Therefore, this study will research whether the type of retail format moderates the impact of perceived shopping value. The following two moderating variables are proposed in this research that might moderate as retail format between the relationship perceived shopping values and store satisfaction:

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9 2. Store brand equity. A distinction is made between low brand equity stores and high brand equity stores in The Netherlands. A store has high store brand equity when consumers react more favorably to a store when the store brand is identified than when it is not (Keller, 2002). In general, consumers value high brand equity stores more than low brand equity stores. Moreover, consumers can perceive the same product to be of higher quality when purchased from an high brand equity store than when purchased from a low brand equity store (Gardner and Siomkos, 1985).

This study contributes to the existent marketing literature by comparing the different types of Dutch retail stores side-by-side. This side-by-side comparison makes it possible to increase the understanding of store choice, as it makes explicit the choices consumers have and the tradeoff between shopping values they have to make. In addition, this research introduces the construct of enjoyment to capture the hedonic aspects of shopping. Prior marketing literature largely neglected the influence of this shopping experience (e.g. Baker et al., 2002). This study investigates whether enjoyment has a distinctive impact on store satisfaction and store loyalty, and whether it should be included in future shopping value models. Practically, marketers can increase their understanding of what drives perceived shopping value, store satisfaction and customer store loyalty. By surveying customers with the provided questionnaire, the relative strengths of retail stores and relative importance of criteria in each store can be elicited. This provides marketing managers valuable information about the key consumers’ motivation to shop; as such, they can effectively increase the perceived shopping value for their customers.

The aim of this study will be to find out which antecedents determines the perceived shopping values and which influence it has on store satisfaction and customer store loyalty in different retail format stores. To contribute to the theoretical and practical aims described, the following research objective is formulated:

“The objective of this research is to get insights of store satisfaction and store loyalty for different retail store formats based on perceived shopping value of consumers”

To fulfill the objective of this research, the following main research question is formulated:

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10 This study contributes to current literature by further enhancing academics’ knowledge of perceived shopping values on store satisfaction and store loyalty of different retail formats. Furthermore, the inclusion of the two proposed moderators will lead to improved knowledge of the settings in which the use of perceived shopping value antecedents leads to an improvement in store satisfaction and store loyalty. In additional, a mediating model will be included to test whether the relationship of perceived shopping values on store loyalty is mediated through store satisfaction.

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2 Literature Review

2.1 Perceived shopping values

Prior researchers (e.g. Babin et al., 1994; Arnold and Reynolds, 2003) have approached shopping value from utilitarian and hedonic perspectives. Hedonic shopping value is derived from the perceived fun and playfulness during the shopping process. Consumers can see shopping as entertaining and joyful resulting from fun and play arising from the experience versus the achievement of any pre-specified end goal (Hirschman and Holbrook, 1982a). In contrast, utilitarian shopping value reflects the acquisition of products in an efficient manner and can be viewed as reflecting a more task oriented, cognitive, and non-emotional outcome of shopping (Babin et al., 1994; Holbrook and Hirschman, 1982b). In other words, utilitarian shopping value reflects the functional and task related aspects of the shopping experience, while hedonic shopping value reflects the value found in the shopping experience itself independent of task-related activities (Babin and Attaway, 2000).

Holbrook and Hirschman (1982b) stated that in traditional information processing buying model the buyer is a rational decision maker wanting to maximize utility by focusing on tangible benefits of the product. According to the model of Holbrook and Hirschman (1982b), purchasing has been viewed as a problem solving activity in which consumer moves through a series of logical steps. Hedonic consumption involves emotional arousal taking place while purchasing or consuming (Holbrook and Hirschman, 1982a). In hedonic consumption, different types of emotional feelings play a large role, which are both physiological and psychological. The traditional buying decision model (utilitarian) and modern experiential model (hedonic) differs in four substantive areas: “mental constructs, product classes, product usage and individual differences” (Holbrook and Hirschman, 1982b). The intensity of emotive arousal largely depends on the capacity and desire for spending emotional resources on the part of the buyer, and this capacity and desire vary within one consumer over time.

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2.2 Classification of perceived shopping values

To get a better understanding of shopping value, this study classify the perceived shopping values into benefits and costs. Hereby, we suppose that perceived shopping values can also be referred as tradeoff between shopping benefits and shopping costs. To indicate the shopping benefits this study uses prior shopping literature of Babin et al. (1994) and Hirschman and Holbrook (1982a). As mentioned before in paragraph 2.1, shopping value can be derived from utilitarian and hedonic perspectives. This study addresses shopping experiences along utilitarian and hedonic dimensions, which will be classified as perceived shopping benefits. On the other hand, consumers do not only perceive shopping benefits, they also perceive downsides during the shopping process. This study mainly use the insights of Zeithaml (1988) to classify the shopping.

Table 1 shows the classification of the purchase related benefits and costs that establish shopping value, which are derived from shopping activities. Prior researchers (e.g. Zeithaml, 1988; Babin et al., 1994; Hirschman and Holbrook, 1982a) shows that value judgments are predominantly influenced by evaluations of perceived quality of products and service (utilitarian benefits), hedonic shopping benefits, monetary and nonmonetary costs.

Benefits

Costs

Utilitarian values

Hedonic values

Monetary costs

Nonmonetary costs

Merchandise quality Enjoyment Perceived price Time and effort costs

Service quality

Table 1: Classification of the perceived shopping benefits and costs

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13 costs refer to the price consumers have to pay. Moreover, Zeithaml (1988) views perceived price as a cost because price is a financial sacrifice. As the net effect of price on perceptions of value seems to be negative (Dodds et al., 1991), it is often placed among the costs. Besides from monetary costs, consumers make other types of sacrifices to obtain or use the product or service, which can be referred as nonmonetary costs. In this research we distinguish time and effort during the shopping process made by the consumers, both mentally and physically, as nonmonetary costs. Time and effort costs can be referred to the non-emotional investments made by the consumers (Baker et al., 2002).

2.3 Antecedents of perceived shopping benefits and costs

It is essential to know what consumers value as shopping benefit or cost, before one can truly understand consumers’ store satisfaction and store loyalty to a retail store. What do consumers really want from their physical retailer experiences? What attributes are most important in their judgments of value? This research proposes that store satisfaction depends on the perceived shopping value of consumers, which can be described as a tradeoff between the perceived shopping benefits and costs derived from the buying process at retailers.

Hirschman and Holbrook (1982a) stated that shopping value is comprising from hedonic and utilitarian values. When consumers want to shop, they will be driven by purchase decisions, which are based on different perceptions, such as product quality, service quality and perceived price. An important value that retail stores offers is the ability to physically examine the product before purchasing it. As consumers can better assess the tangible characteristics of products in a store, it will make their choice to purchase the product easier (Ba and Pavlou, 2002). Baker et al. (2002) also states that the store environmental dimensions influence consumers’ perception of store choice criteria. In this research, consumer perceptions refer to inference about the levels of quality, price and value that consumers would expect in a retail store on the basis of store environment cues. This study identifies five unique aspects from previous studies. First, we identified three types of shopping experience benefits; merchandise quality, service quality and enjoyment. Next, we identify two types of shopping costs, time and effort and perceived price. With these five types of shopping values we will examine their influence on store satisfaction and store loyalty in different types of retail stores.

2.3.1 Merchandise quality

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14 quality perceptions of product and variety provided by the retailer”. Good merchandise quality satisfies consumers’ basic needs and desires for experiencing, exploring and purchasing products among many choices (Kumar, 2010). Shoppers like the ability to touch and feel the product before they buy, and this experience can be fun and emotionally rewarding (Workman, 2010). In fact, exploring and purchasing products in a store are the foremost goals for consumers when they visit the store. Apparel retailers can fulfill these needs by providing a wide selection of products that can bring positive store experiences to both time-conscious and non-time-conscious shoppers (Moye and Kincade, 2003).

2.3.2 Service quality

Service quality can be referred as customers’ perceptions of overall service quality provided by retailers (Broekhuizen, 2006). The level of service received by customers is frequently noted as a component of store image or attitude and it is an important aspect of shopping in a retail context (Baker et al., 2002). In the physical retail store consumers can interact with service personnel. Retailers that sell merchandise, service quality is often referred to as customer or retail service quality. Baker et al. (1994) mentions different elements that has influence on service quality, such as tangibles (e.g. appearance and convenience), personal interaction (e.g. friendliness, helpfulness, assurance, and responsiveness of employees), reliability (e.g. keeping promises and doing it right), problem solving (e.g. return handling and complaint handling), and service policies (e.g. opening hours, parking facilities, warranties).

2.3.3 Enjoyment

Fun and pleasure aspects are representation of enjoyment of shopping (Holbrook and Hirschman, 1982a). It is observed that customers are often in a pleasurable state while shopping. Enjoyment can be referred as different events that leads to a delightful or pleasurable experience during the shopping process (Arnold et al., 2005). Therefore, many retailers implemented a change from being a buying ritual in the exchange process to delivering a joyful shopping experience. Nowadays, shopping has been attributed as a joyful retail experience (Jin and Sternquist, 2004).

2.3.4 Perceived price

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15 as ‘cheap’ or ‘expensive’. Moreover, the perception of perceived price can be characterized with the quality perception received to price paid in a purchase transaction (Lichtenstein et al., 1993).

2.3.5 Time and effort costs

Convenience and time resource management literature indicates that consumers generally perceive time and effort as a cost. This occurs, especially, when consumers engage in goal-directed behavior rather than experiential behavior. At the moment, the consumers are motivated to acquire their goods in an efficient and timely manner with a minimum of irritation (Babin et al., 1994). Baker et al. (2002) defined time and effort costs as: “the customers’ perceptions of the time and effort required to shop through a store”. Consumers’ interest in saving time and effort has also been identified. Consumers with high income or less time require a lot of value from the limited hours available and may be willing to pay more money to enjoy their leisure time Therefore, they have more attachment to time because of their higher opportunity costs of time (Engel, Blackwell and Miniard, 1995). Additionally, consumers want to spend their limited cognitive capacity efficiently and may decide that certain purchases are not worth investing a lot of cognitive effort (Simon, 1976). Retailers currently develop strategies to enable consumers to save time by making the shopping process less time consuming and more convenient (Berry, Seiders and Grewal, 2002).

2.4 Store satisfaction

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16 does not meet the expectations has been found to have a greater effect on satisfaction than quality that exceeds expectations (Anderson and Sullivan, 1993).

More generally, this study try to explain store satisfaction within a framework and propose five independent variables, based on perceived shopping value, that can have influence on store satisfaction. These five independent variables are:

1. Merchandise quality; 2. Service quality; 3. Enjoyment;

4. Perceived price and; 5. Time and effort costs.

2.5 Customer store loyalty

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3 Hypotheses and conceptual model

The purpose of this research is to explain store satisfaction and customer store loyalty with antecedents consisting of perceived shopping benefits and costs within the different retail formats.

3.1 Perceived shopping benefits

A strong product (or merchandising) mix provides consumers with a wider choice of products, which enables stores to fulfill needs of consumers (Golledge, Rushton and Clark, 1966). Furthermore, prior research found a positive relationship between perceptions of merchandise quality and perceived shopping values (Monroe, 1990). Several researchers (Baker et al., 2002; Kerin et al., 1992; Sirohi et al., 1998) extend this finding to retail settings and use the term merchandise quality as a predictor of perceived shopping value. Due to higher merchandise quality, the consumer needs will be more easily met because of the wide selection and availability of products. It is also likely that these selections contain products of higher quality, which is likely to increase the perception of shopping value (Szymanski and Hise, 2000). Therefore, the following hypothesis is proposed:

H1: Perceived merchandise quality of retailers is positively related to store satisfaction.

Bitner (1992) argues that the physical and service environment is an important part in creating the image of retailers. According to Sirohi et al. (1998), service quality has a positive effect on perceived shopping values. They concluded that the more favorable the perception of service quality, the higher the perceptions of shopping values. Furthermore, Baker et al. (1994) examined the effect of retail store employees on certain cognitive evaluations such as consumer inferences about merchandise, service quality and the overall store image. They found when a retail store characterized by a high image social factors were perceived as providing higher service quality than a store characterized by discount image social factors. Therefore, it is likely that service quality has a positive effect on store satisfaction. Therefore, the following hypothesis is proposed:

H2: Perceived service quality of retailers is positively related to store satisfaction.

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18 enjoyment and pleasure that directly affect consumers’ behaviors (Bitner, 1992). Wakefield and Baker (1998) found that a favorable impression of environments or shopping experience may influence consumers’ emotional states and consequent behavior. Therefore, if shopping consumers improved their mood during the shopping experience, they may give something back in the form of a small purchase (Babin and Darden, 1996). Hence, this leads to the following hypothesis:

H3: Perceived enjoyment in retail stores is positively related to store satisfaction.

3.2 Perceived shopping costs

Price can be seen as an important cost criterion in the value judgment of consumers; the higher the price perceptions, the lower are the value perceptions, and vice versa. Research of Sirohi et al. (1998) compared the price level of a store with its competitors; where they found significant evidence that the higher the perceived price, the less is the perceived shopping value. Furthermore, Sweeney et al. (1999) used relative price, indicating the perceived price of a product compared to other products with similar features. Also, this study found the same result with the perceived price and shopping value perceptions. Moreover, perceived monetary price does not only act as a cost driver; it can also be an indicator for product and service quality. Based on the discussion above, this leads to the following hypothesis:

H4: Perceived monetary price is negatively related to store satisfaction.

Prior research suggests that shopping consumers often experience time and effort costs during their purchase process (Zeithaml, 1988). Kerin et al. (1992) found support that shopping experience perceptions were directly associated with store value perceptions. Consumers perceive time and effort costs during the shopping process which can reduce their perceived shopping value during the shopping process (Kerin et al., 1992). Furthermore, Hui and Bateson (1991) determined that when consumers believe they will spend too much time in a retail store, they may avoid even entering the store without first processing the information about the product and/or service value of that particular store. Hence, this leads to the following hypothesis:

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3.3 Store satisfaction and customer store loyalty

During the past decades, store satisfaction has often been regarded as an antecedent of store loyalty (Bitner, 1990; Zeithaml et al., 1996). Satisfaction is believed to occur through a matching of expectations and perceived performance (Oliver, 1980). Jones and Sasser (1995) also indicate that there is a positive link between customer satisfaction and customer loyalty. They measured loyalty as the customer’s state of intent to repurchase; they found that moving customers to a higher level of satisfaction helps to develop long-term loyalty. These findings lead to the following hypothesis:

H6: Store satisfaction is positively related to customer store loyalty.

Besides the direct relationships between store satisfaction and customer store loyalty, as discussed above, we expect a possible mediation relationship (either partly or fully) between the antecedents of perceived shopping benefits and costs and customer store loyalty, mediated through store satisfaction. We will test a whether store satisfaction has a mediating effect on customer store loyalty.

3.4 Type of product

The effects of perceived shopping benefits and costs on store satisfaction can be moderated by different retail formats. To distinguish different retail store formats, we determined two moderating variables, hedonic vs. utilitarian products and low vs. high brand equity stores.

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20 utilitarian products the customer likely have more favor for perceived shopping costs. Hence, this leads to the following hypotheses:

H7a: The positive impact of perceived merchandise quality on store satisfaction is larger for hedonic

products than for utilitarian products.

H7b: The positive impact of perceived service quality on store satisfaction is larger for hedonic products

than for utilitarian products.

H7c: The positive impact of perceived enjoyment on store satisfaction is larger for hedonic products than for utilitarian products.

H7d: The negative impact of perceived price on store satisfaction is larger for utilitarian products than for

hedonic products.

H7e: The negative impact of perceived time and effort costs on store satisfaction is larger for utilitarian

products than for hedonic products.

The above stated hypotheses are visualized in figure 1.

Figure 1: Visualization of hypotheses H7

3.5 Store brand equity

The second moderating variable to distinguish different retail formats is store brand equity. Store brand equity can be defined as a set of assets and liabilities linked to the store brand that add to or detract from the value endowed by the product or service to the retailer and its customers (Juan Beristain and Zorilla, 2011). To determine the difference in store brand equity, Chandon et al. (2000) make a distinction between low and high brand equity. A store has high store brand equity when consumers react more favorably to a store when the store brand is identified than when it is not (Keller, 2002). In general, consumer value high store equity brands more than low store equity brands. In comparison with high

Utilitarian products Hedonic products

Sto re Sa tis fact ion

Store Satisfaction / Type of Product

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21 store equity brands, low store equity brands do not provide as many benefits and are bought mainly because of their lower price (Chandon et al., 2000). For example, research conducted by Gardner and Siomkos (1985) shows that the same product can be perceived to be of higher quality when purchased from an upscale store (high brand equity store) than when purchased from a discount store (low brand equity store). Similarly, consumers would be willing to pay a higher price for a product sold in an upscale store even before they know the actual price (Baker et al., 2002). Therefore, it is likely that consumers have more favor for perceived shopping benefits when they shop in retail stores which have high store brand equity. On the other hand, consumers have more favor for perceived shopping costs when they shop in retail stores that have low store brand equity. Hence, this leads to the following hypotheses:

H8a: The positive impact of perceived merchandise quality on store satisfaction is larger for high brand

equity stores than for low brand equity stores.

H8b: The positive impact of perceived service quality on store satisfaction is larger for high brand equity

stores than for low brand equity stores.

H8c: The positive impact of perceived enjoyment on store satisfaction is larger for high brand equity stores

than for low brand equity stores.

H8d: The negative impact of perceived price on store satisfaction is larger for low brand equity stores than

high brand equity stores.

H8e: The negative impact of perceived time and effort costs on store satisfaction is larger for low brand

equity stores than high brand equity stores.

The above stated hypotheses are visualized in figure 2.

Figure 2: Visualization of hypotheses H8

Low SBE High SBE

Sto re Sa tis fact ion

Store Satisfaction / Store brand

equity (SBE)

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22 Perceived Shopping Benefits Perceived Shopping Costs

3.6 Conceptual model

Figure 3 exhibits the conceptual model of this research. The hypothesized model is focused on the effects of perceived shopping benefits and perceived shopping costs on store satisfaction. The model also shows that store satisfaction has a direct effect on customer store loyalty. Until now, research has primarily focused on shopping motivations during the shopping process. Limited research has been conducted about perceived value in relation to shopping in different retail formats. Therefore, this study will research whether the type of retail format moderates the impact of perceived shopping value. The two moderating variables that will be examined are type of product (hedonic vs. utilitarian products) and store brand equity (low vs. high brand equity stores).

Figure 3: Conceptual model

Retail Format (moderators)

& Type of product (Utilitarian vs Hedonic) Store Brand Equity (Low vs High) Merchandise Quality Service Quality Enjoyment Perceived Price

Time and Effort Costs

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4 Methodology

The previous chapter summarized the hypotheses and concluded with a conceptual model. To test the conceptual model, an empirical research is conducted. This chapter covers the methodology of this research. First, the data collection, method and research design will be discussed, followed by questionnaire design and finally the measurement of the concepts.

4.1 Data collection

To provide an answer to the research question formulated in the introduction of this research, a quantitative research will be conducted in form of a survey. More specifically, a 2 (type of product) x 2 (store brand equity) factorial design with a questionnaire is used. The questionnaire is distributed among Dutch people from 16 years old, since it is expected that this age group is making decisions independently and can be accounted for those decisions. Furthermore, expectations are that this group has at least some knowledge of the products and they are known with shopping at retail stores. To collect the data for the sample for the utilitarian products, we selected two supermarkets with low brand equity (Aldi and Lidl) and two supermarkets with high brand equity (Albert Heijn and Jumbo). To collect the data for hedonic products, we selected two clothing stores with low brand equity (Wibra and Zeeman) and two clothing stores with high brand equity (De Bijenkorf and Zara). By selecting four supermarkets and four clothing stores, we tried to increase the representativeness of the sample. Researchers suggested a sufficient sample size for each type of retail store (N>50). Thus, we have need to have at least 200 respondents.

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24 Another option is that the consumers could bring the questionnaire home and fill it in online. This option will be the same as the questionnaire distributed through the online channel. The data collected through an online survey only applies those consumers that recently bought a product at one of the pre-selected retail store (Aldi, De Bijenkorf, Lidl, Albert Heijn, Jumbo, Wibra, Zeeman, and Zara). Respondents that made a purchase within 30 days in one of the pre-selected retail store can participate in the online survey. They can fill in the questionnaire by thinking back to the day that they made the purchase. We chose to distribute the questionnaire through the online channel because of several benefits, such as its flexibility, the speed of data collection and the fact that the data is digital. Furthermore, respondents benefit from an online questionnaire in comparison with a traditional questionnaire. For example, respondents now have the convenience of finishing the questionnaire when they like. The online questionnaire is distributed via Facebook, personal mailing lists, and by asking others to forward it to family members, friends and other people they know.

4.2 Questionnaire design

Although this research is a 2 (type of product) x 2 (low vs. high store brand equity) factorial design and therefore features 4 retail formats in total, every respondent is asked to fill in the questionnaire only for the store where they made a purchase recently. There is a possibility to choose different retail stores within the same category for example; Aldi and Lidl both provide utilitarian products with low store brand equity. This leads to developing one questionnaire for different retail stores.

The questionnaire can be divided into three parts. The first part will contain some general questions concerning the purchase of the item. The respondents have to imagine back when they made the purchase in the store, these questions are for example; how much money they spend for the products, and how much time they visited inside the store. These general questions concerning the purchase process can also be taken into account for control variables.

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25 The third part of the questionnaire will consist of a set of questions that are related to the demographics, age and income of the respondent. After completing the questionnaire they are thanked for their participation.

4.3 Measurement of concepts

This section will discuss the ways of measuring the constructs as formulated in the theoretical framework and conceptual model, based on existing research and earlier reported scales. Ideally, each construct is measured by multiple indicators in order to account for measurement error (Steenkamp and Baumgartner, 2000). All the constructs were measured using a Likert scale, which has the advantage that analysis is easier because of the ability to interpret the data as interval. The items were rated on a 7-point Likert scale with 1 is ‘Totally disagree”, and 7 is ‘Totally agree’. We have chosen a 7-point over a 5-point scale because of the tendency of being too neutral on a 5-point scale (Colman, Norris, and Preston, 1997). Using a 7-point Likert scale would prevent responses that are cluttered at the center of the scale. In order to measure the constructs, we base our constructs on existing literature. Some scales were slightly modified to fit our specific situation. Table 2 shows the used items for each construct.

4.3.1 Measuring merchandise quality

Merchandise quality of a store consists of number, composition and quality of alternatives (Berry, 1969). Measurement scales for perceived merchandise quality were adapted from the studies of Sirohi et al. (1998) and Dodds et al. (1991). Sirohi et al. (1998) measured merchandise quality for supermarkets in terms of the quality of the merchandise, the variety of grocery items, and the appropriateness of the items. This leads to the first two items for this study whether the store offers a good selection and whether it provides a wide selection of products that fits the individual customer’s needs. Second, we used a measurement scale of Dodds et al. (1991) to determine the overall quality of the merchandise.

4.3.2 Measuring service quality

Service quality were measured by a three item scale adopted from a study conducted by Baker et al. (2002). The three items that measured service quality are: the overall service quality, courtesy and responsiveness of employees.

4.3.3 Measuring enjoyment

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26 eight items to measure the construct; three items were used for this study. Respondents might feel uncomfortable when being confronted with too many items that appear more of less similar.

4.3.4 Measuring perceived price

Monetary price refers to the customers’ perceptions of the prices offered by retailer. This study measures it by including both the general price level and sales promotions. When combines sales promotions with the general price level to develop one overall measure of the price level. The two items have been adapted from prior studies by Baker et al. (2002) and Sirohi et al. (1998).

4.3.5 Measuring time and effort costs

Time and effort costs relate to the nonmonetary costs to shop for a particular item (Zeithaml, 1988). These costs clearly refer to the utilitarian aspects of shopping. Most of the items in this study referred to the opposite of time and effort costs, that is, the efficiency of shopping. In total, four items were used to measure the time and effort required based on prior scales of Baker et al. (2002).

4.3.6 Measuring store satisfaction

Customer store satisfaction measures were based on qualitative studies by Zeithaml et al. (1990). In total, five items were used to measure the overall satisfaction of the store. Four items measures store satisfaction regarding to shopping experience, price/quality ratio, service and assortment of the retail store. One item is related to satisfaction compared to other stores.

4.3.7 Measuring customer store loyalty

Customer store loyalty consists of four items and these are adopted from Ribbink et al. (2004), hereby measuring both the behavioral components as well as the attitudinal components. The item for measuring the component of the intention to stay loyal to the retailer was adopted from Johnson et al. (1997).

4.3.8 Measuring store brand equity

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27

Scale

Item

number

Items

Source of

measure

MQ1 This store provides me a good selection of products

Merchandise quality

MQ2 This store offers a wide variety of products that interest

me Sirohi et al.

(1998);

MQ3 The products provided by this store should be of good quality

Dodds et al. (1991)

SQ1 This store provides high-quality service

Service quality SQ2 This store treats its customers well

Baker et al. (2002) SQ3 This store is always willing to help its customers

Enjoy1 Buying products through this store is fun for its own sake

Enjoyment Enjoy2 It makes me feel good, when I buy products through this

store

Childers et al. (2001)

Enjoy3 Buying products through this store is enjoyable

Price1 This store offers low prices (r)

1 Baker et al.

(2002);

Perceived Price Price2 This store has attractive offers (r)

1 Sirohi et al.

(1998) Price3 This store is known as a cheap shore (r)1

Time1

I spend my time efficiently, when I shop through this store (r)1

Time and effort

costs Time2

It costs me little time and effort to shop for products through this store (r)1

Baker et al. (2002)

TIme3

Purchasing products through this store gives me great control (r)1

Time4

Purchasing products through this store is a good way to quickly what I want (r)1

Sat1

Compared to other stores, I am very satisfied with this store

Store satisfaction Sat2

Based on all my experiences with this store, I am very satisfied

Zeithaml et al. (1990)

Sat3 This store gives me a sense of satisfaction

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28 Loyal1 I can highly recommend this store

Loyal2 I would choose this store next time again

Ribbink et al. (2004) Customer store

loyalty Loyal3 I like to be a customer of this store

Johnson et al. (1997)

Loyal4 I will prefer this store to other stores at any time Table 2: Measurement scales for the constructs

4.3.9 Other variables

Adding several control variables will help to describe the target group and see whether the intended target population actually participated in the research. Five questions were developed to describe the respondent characteristics are:

 How much time did you spent in the store during your last visit?

 < 5 minutes, 5 – 15 minutes, 15 – 25 minutes, 25 – 35 minutes, 35 – 45 minutes, > 45 minutes; nominal scale.

 What is your gender?

 Male or female; nominal scale.  What is your age?

 Open question; interval scale.  What is your yearly net income?

 < €10,000, €10,000 - €20,000, €20,000 - €23,000, €30,000 - €40,000, €40,000 - €50,000, >€50,000; nominal variable.

 What is your level of education?

 VMBO, HAVO, VWO, MBO, HBO, WO, other; nominal variable.

4.4 Plan of analysis

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29 reliability analysis and mean data. The third part will focus on testing the hypotheses formulated in the theoretical framework. Finally, the analysis will focus on testing a mediation effect.

4.4.1 Analysis of samples and demographics

The first step in analyzing the results of this research is describing the distribution of the online and offline sample and the demographic characteristics of the respondents. Since the survey is distributed through online and offline channel, the sample of both groups have to be described and analyzed. The descriptive analysis will provide insight into the demographic characteristics of the online and offline respondents by counting frequencies. Furthermore, the sample will be compared to CBS statistics (Central Bureau of Statistics in The Netherlands) of the Dutch population. Based on this, a decision will be made whether or not to weight the data on one of the demographic variables.

4.4.2 Basic analysis

To test the formulated hypotheses, the variables in the conceptual model have to be created first. Since multiple items where used to measure one construct, the average mean of these questions can be used to create a single new variable. However, to be able to do this, the internal consistency between the items has to be sufficient. This can be tested with a reliability analysis, which shows the Cronbach’s Alpha. The Cronbach’s Alpha should be higher than 0.7 to combine multiple questions into one construct. Besides the reliability analysis, we will conduct a factor analysis, to identifying clusters of different variables.

Secondly, a basic analysis is which shows the means of type of product and store brand equity per segment. Based on the methodology section, it can be concluded that there are 2 (type of product) x 2 (store brand equity) = 4 groups. The means of type of product and store brand equity per group will lead to some basic understanding of the data and whether there are mean differences between groups.

4.4.3 Testing conceptual model

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30 Before running the final regression, all variables are first diagnosed for multicollinearity. Multicollinearity exists when there is a high correlation between two or more predicting variables. It may lead to incorrect results regarding the effects of individual predicting variables. The variance inflation factor (VIF) and tolerance statistic are used to assess whether multicollinearity exists. In this research, a VIF of 5 and tolerance statistic of 0.20 are maintained as boundaries. If the VIF or tolerance statistic exceeds these boundaries, multicollinearity exists and should be dealt with by mean centering those variables (Shieh, 2011). Mean centering is executed by subtracting the mean of the variable with multicollinearity issues of every single observation of that variable. Finally, the multiple regression analysis can be executed and the betas and p-values can be interpreted.

4.4.4 Testing mediation effect

The regression model is also used to test a mediating model whether store satisfaction has a mediating effect on store loyalty. To test for a mediating effect, Baron and Kenny’s (1986) work is used. They proposed four steps to assess whether a mediating effect exists. The 4 steps are summarized below:

Step 1: Conduct a regression with independent variables predicting store loyalty (path c). Step 2: Conduct a regression with independent variables predicting store satisfaction (path a). Step 3: Conduct a regression with store satisfaction predicting store loyalty (path b).

Step 4: Conduct a regression with independent variables and store satisfaction predicting store loyalty (path c’).

Figure 4 visualize the steps that are applied to the proposed mediator model of Baron and Kenny (1986).

Path c

Path c’

Path a Path b

Figure 4: Baron and Kenny’s (1986) four steps for mediation effect

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31

5 Results

5.1 Descriptive analysis

The questionnaire have been started by 316 persons, both by online and offline surveys. However, 81 out of 316 respondents did not fully complete the online questionnaire, which results in leaving these respondents out of the dataset. Analysis of the dataset shows that all respondents are aged between 16 and 90 years old. Moreover, there were some respondents who provided extreme answers in comparison with other respondents. Those respondents were left out of the dataset. This resulted that the final dataset contained 232 respondents. The dataset is first described the four demographic variables that were used in this research: gender, age, education and income. Furthermore, the dataset is compared to data of CBS (Central Bureau of Statistics) on the Dutch population to analyze the representativeness of the dataset.

The survey was distributed through online and offline channel. Therefore, we have to compare the means of demographic variables of both samples. The survey was filled in 155 times online and 77 times offline. The frequencies of online and offline surveys distributed per store are shown in table 3.

Stores Online sample Offline sample Total sample per

store Albert Heijn 44 10 54 Aldi 12 14 26 De Bijenkorf 16 9 25 Jumbo 18 7 25 Lidl 19 6 27 Wibra 10 16 26 Zara 21 5 26 Zeeman 11 14 25

Table 3: Online and offline survey frequencies

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32 Table 4 summarizes the respondent characteristics of the online and offline sample. As mentioned before, the online sample refers to consumers that shopped at least once in one of the selected stores in the past 2-3 weeks, whereas the offline sample refers to the offline shoppers that did shop that particular store. There is not difference between the questions in both surveys.

However, when we look at the demographic variables between the online and offline sample, we can determine some differences. The majority of online respondents are aged in the segment between 16 and 30 years old, have a high education (HBO/WO), and have a low income. This group can be explained by the large number of students who filled in the online questionnaire. When we look at the offline sample, we see a better distribution for age, education and income.

Demographic variable Online sample % Offline sample %

Gender Male 69 44,5% 41 53,2% Female 86 55,5% 36 46,8% Age 16-30 years old 116 74,8% 23 29,9% 31-50 years old 22 14,2% 31 40,2% > 50 years old 17 11,0% 23 29,9% Education VMBO 6 3,9% 6 7,8% HAVO, VWO 22 14,2% 13 16,9% MBO 22 14,2% 31 40,3% HBO/WO 105 67,7% 27 35,0%

Net income per year

< €10,000 89 57,5% 9 11,6% €10,000-€20,000 32 20,6% 17 22,1% €20,000-€30,000 22 14,2% 21 27,3% €30,000-€40,000 7 4,5% 18 23,4% €40,000-€50,000 5 3,2% 4 5,2% > €50,000 0 0% 8 10,4%

Table 4: Demographic variable of online and offline sample

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33

Mean Std. Dev. Df F Sig.

Age 230 3,722 ,055 Online sample 30,17 14,485 Offline sample 41,81 15,809 Gender 230 0,334 ,212 Online sample 1,55 0,499 Offline sample 1,47 0,502 Education 230 3,214 ,074 Online sample 4,83 1,454 Offline sample 4,00 1,367 Income 230 8,212 ,005 Online sample 1,75 1,065 Offline sample 3,19 1,433

Table 5: Mean scores of online and offline sample

To make the sample more representative, we combined the online and offline sample. Table 6 shows the results, whereby it can see that in this study has 110 male respondents and 122 female respondents. This corresponds with 47,4% males and 52,6% females in the whole sample. However, according to data of CBS, the Dutch population should constitute 49,5% males and 50,5% females. Furthermore, the majority of respondents are aged between 16 and 30 years old. Most of the respondents have an education level of university of applied sciences and university. The large group of young respondents and high education level can be explained by the large number of students who filled in the questionnaire. In comparison with CBS statistics, the group of 16-30 years old respondents is too large, while the other two groups 36-50 years old and >50 years old groups are too small relatively. Furthermore, highly educated people (HBO and WO) are overrepresented while lower educated people (VMBO, MBO) are underrepresented.

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34

Demographic variable CBS, 2013 Sample (N = 232) Sample after weighting

(N=232) Gender Male (%) 49,5 47,4 46,1 Female (%) 50,5 52,6 53,9 Age 16-30 years old (%) 29,6 59,5 29,6 31-50 years old (%) 33,9 22,8 33,9 > 50 years old (%) 36,5 17,2 36,5 Education VMBO (%) 16,4 5,1 10 HAVO, VWO (%) 9,3 15,1 14,5 MBO (%) 38,5 22,8 36,6 HBO/WO (%) 35,8 56,9 39

Net income per year

< €10,000 (%) 42,2 23,2 €10,000-€20,000 (%) 21,1 22,2 €20,000-€30,000 (%) 18,5 25,5 €30,000-€40,000 (%) €40,000-€50,000 (%) > €50,000 (%) 10,8 3,9 3,4 18,1 6,8 4,1 Table 6: Demographic variables of total sample

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35

5.2 Reliability analysis

A reliability analysis is executed to find whether the constructs involved in this research are internally consistent, allowing to combine the items as identified in the previous chapter, into a single variable. The items can be combined when the analysis shows a Cronbach’s Alpha of at least 0.7. The methodology section stated that the variable involvement is measured by a four item scale. However, the variable “perceived price” and “time and effort costs” uses a reverse scale, which leaded to recoding these items.

Construct Cronbach’s Alpha Number of Items

Dependent variables

Store satisfaction .854 3

Customer store loyalty .857 4

Moderating variable

Type of product Store brand equity

.9352 .889 42 4 Independent variables Merchandise quality .739 3 Service quality Perceived enjoyment Perceived price Time and effort costs

.899 .893 .792 .751 3 3 3 3 Table 7: Results reliability analysis

The result of the reliability analysis in table 7 shows that all constructs are internally consistent.

Besides the reliability analysis, we conducted a factor analysis, to identifying clusters of different variables. A factor analysis can be used to (1) understand the structure of a set of variables; (2) to construct a questionnaire to measure an underlying variable and (3) to reduce a data set to a more manageable size while retaining as much of the original information as possible (Field, 2013). As can be seen in Appendix 2, the KMO of this questionnaire is ,830, which can be classified as ‘great’.3 Furthermore, Appendix 2 also

shows the rotated component matrix, which is a matrix of the factor loadings for each variable onto each factor. In other words, Appendix 2 shows which questions relates to which factor. All the questions seem to relate to the right developed variable, for example the questions that load highly on factor 1 all seem to relate to enjoyment variables, the questions in factor 2 relate to service quality etc.

2 Cronbach alpha value was higher after deleting 1 item, before with 5 number of items the cronbach alpha was 0.846

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36 Based on the reliability analysis and factor analysis, we can conclude that all multiple item scales can be combined into single item variables by calculating the mean of the scales.

5.2.1 Type of product and store brand equity

It is useful to gain some basic insight into consumers’ perception of type of product sold by the retail store (utilitarian or hedonic) and the perceived store brand equity of the eight different type of stores used in this research to find whether there are differences between these stores. Therefore, a One Way ANOVA is conducted, the SPSS output can be found in Appendix 3.

Mean Std. Dev. Df F Sig.

Type of product 7 44,259 ,000

Aldi (U) 3,05 0,85

Lidl (U) 3,58 1,12

Jumbo (U) 4,72 0,78

Albert Heijn (U) 4,87 0,79

Zeeman (H) 5,44 0,89

Wibra (H) 5,69 1,02

Zara (H) 5,88 1,00

De Bijenkorf (H) 5,99 0,62

Store brand equity 7 20,416 ,000

Aldi (L) 3,32 1,00 Zeeman (L) 3,73 0,88 Lidl (L) 4,17 1,30 Wibra (L) 4,31 0,97 Jumbo (H) 4,56 1,82 Albert Heijn (H) 5,26 1,24 Zara (H) De Bijenkorf (H) 5,29 5,97 0,81 0,62

Table 8: Perceived type of product and store brand equity per store

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37

5.3 Regression Analysis

5.3.1 Multicollinearity

To test the hypotheses on the dependent variable store satisfaction, a multiple regression analysis is executed. Prior to conducting a multiple regression analysis it is necessary to check for multicollinearity between the independent variables. Multicollinearity arises when intercorrelations among the predictors are very high (Malhotra, 2010). Multicollinearity is high when the VIF-score exceeds 5, or the tolerance is lower than 0.20. Table 11 shows the multicollinearity statistics of the variables. To overcome multicollinearity, a solution can be to mean centering all independent and interaction variables by subtracting their means. In this research all independent and interaction variables are mean centered before analyzing into detail. Table 9 shows the multicollinearity statistics after mean centering the variables.

VIF Tolerance VIF Tolerance

Independent variables Moderating variables

Merchandise quality 2,678 ,373 Type of product (ToP) 4,032 ,248 Service quality 2,460 ,407 Store brand equity (SBE) 2,282 ,354

Enjoyment 3,764 ,266 ToP * MQ 2,561 ,390

Perceived price 1,761 ,568 ToP * SQ 2,874 ,348

Time and effort costs 2,251 ,444 ToP * Enjoy 3,088 ,324

Control variables ToP * Price 2,858 ,350

Gender 1,469 ,681 ToP * Time 3,088 ,324

Age 2,398 ,417 SBE * MQ 3,167 ,316

Education 1,922 ,520 SBE * SQ 3,520 ,284

Income 1,544 ,648 SBE * Enjoy 4,163 ,240

Time spend in the store 1,360 ,735 SBE * Price 2,680 ,373

SBE * Time 2,207 ,453

Table 9: Multicollinearity statistics with VIF scores and tolerance

The variance inflation factor (VIF) and tolerance statistic show that all the variables do not have multicollinearity since all the variables VIF < 5 and tolerance > 0,20. Since multicollinearity is not a problem, the multiple regression analysis can be conducted.

5.3.2 Main effect of perceived shopping benefits and perceived shopping costs

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38 The results of the multiple regression analysis in table 10 and Appendix 5 shows that the model is significant (p < .01) with an F-value of 27,433 for the model predicting store satisfaction. The results show there is a significant positive relationship between the perceived shopping benefits (merchandise quality, service quality and enjoyment) and store satisfaction, since all p-values are smaller than 0,05. This confirms the hypotheses H1, H2 and H3. Furthermore, the result also shows there is a significant negative relationship between the perceived shopping costs (perceived price and time and effort costs) and store satisfaction, since all p-values are smaller than 0,05. This confirms the hypotheses H4 and H5.

5.3.3 The effect of the moderators

First moderator that is discussed is type of product provided by the retail store. The type of product had been expected to strengthen the positive effect of perceived shopping benefits on store satisfaction and strengthen the negative effect of perceived shopping costs on store satisfaction. When we analyze table 10, we can determine that only the variable enjoyment has a significant positive interaction effect moderated by the type of product, this support hypothesis H7c. Furthermore, the result shows that time and effort costs has a positive interaction effect, moderated by type of product, where we expected negative interaction effect. For this reason we can confirm an interaction effect of time and effort costs moderated by type of product , however, it does not support our hypothesis H7e. The other variables do not have a significant interaction effects. For this reason hypotheses H7b, H7c and H7d also have to be rejected.

The second moderator is store brand equity and was hypothesized to positively moderating for perceived shopping benefits on store satisfaction and negatively moderating for perceived shopping costs on store satisfaction. When we analyze table 10, we can determine that enjoyment has a significant interaction effect at confidence level of 10%. However, the result shows that enjoyment has a negative interaction effect, moderated by store brand equity, where we expected a positive interaction effect. Therefore, we can have to reject the hypotheses H8a, H8b, H8c, H8d and H8e.

5.3.4 The effect of control variables

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39

Store satisfaction Unstandardized Beta Sig.

Constant 5,294 ,000***

Independent variables

Merchandise quality (MQ) 0,315 ,000***

Service quality (SQ) 0,153 ,000***

Enjoyment (Enjoy) 0,258 ,000***

Perceived price (Price) -0,121 ,001***

Time and effort costs (Time) -0,252 ,000***

Moderating variables

Type of product (ToP) 0,024 ,651

Store brand equity (SBE) 0,168 ,000***

ToP * MQ -0,026 ,681 ToP * SQ 0,045 ,232 ToP * Enjoy 0,082 ,031** ToP * Price 0,005 ,889 ToP * Time ( 0 = Utilitarian; 1 = Hedonic) 0,148 ,001*** SBE * MQ 0,056 ,360 SBE * SQ -0,060 ,141 SBE * Enjoy 0,071 ,062* SBE * Price 0,042 ,171 SBE * Time

( 0 = Low SBE; 1 = High SBE)

0,021 ,534 Control variables Gender ( 0 = Male; 1 = Female) -0,077 ,371 Age 0,000 ,973 Education 0,020 ,531 Income -0,028 ,382

Time spend in the store -0,026 ,478

Sig, of the model ,000***

F-value 27,433 R square ,742 Adjusted R square ,715 *** Significant at 1% level ** Significant at 5% level * Significant at 10% level

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40

5.3.5 Testing mediating effect

To test whether store satisfaction has a mediating effect on store loyalty, the steps of Baron and Kenny (1986) are executed. They proposed a four-step approach to conclude whether a mediating effect exists.

The first step is to conduct a regression with all independent variables predicting store loyalty. Table 11 shows the result of the regression analysis. Based on these results, it can be concluded that there is a significant positive relationship between merchandise quality and enjoyment on store loyalty. Furthermore, result shows that there is a significant negative relationship between perceived price and time and effort costs on store loyalty. However, it shows that service quality did not have a significant relationship with store satisfaction. Therefore, we can already conclude that service quality cannot have a mediation effect and will be left out in further steps.

Store loyalty Unstandardized Beta Sig.

Constant 0,952 ,003*** Independent variables Merchandise quality 0,633 ,000*** Service quality 0,037 ,459 Enjoyment 0,329 ,000*** Perceived price -0,093 ,018**

Time and effort costs -0,209 ,000***

Sig, of the model ,000***

F-value 77,597 R square ,631 Adjusted R square ,623 *** Significant at 1% level ** Significant at 5% level * Significant at 10% level

Table 11: Relationship between independent variables and store loyalty

The second step was already executed in the multiple regression analysis, shown in table 12. Based on these results, it can be concluded that there is a significant positive relationship between merchandise quality and enjoyment on store satisfaction. Moreover, there is a significant negative relationship between price perceived and time and effort costs on store satisfaction. Therefore, we can already continue analyzing these four variables in step 3 and 4.

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41 confirms hypothesis H6, were it as stated that store satisfaction is positively related to customer store loyalty.

Store loyalty Unstandardized Beta Sig.

Constant 0,308 ,003***

Independent variable

Store satisfaction 0,936 ,000***

Sig, of the model ,000***

F-value 669,423 R square ,744 Adjusted R square ,743 *** Significant at 1% level ** Significant at 5% level * Significant at 10% level

Table 12: Relationship between store satisfaction and store loyalty

The last to be analyzed is a regression with independent variables and store satisfaction predicting store loyalty. Baron and Kenny (1986) came up with three criteria’s to conclude whether the mediating effect exists and whether the mediating effect is partial or full.

1. No mediation: When there is no change in the significance level of the independent variables after store satisfaction to the model.

2. Partial mediation: When the significance level of the independent variables is reduced but still significant after adding store satisfaction to the model.

3. Full mediation: When the effect of level of the independent variables on store loyalty is insignificant after adding store satisfaction to the model.

Store loyalty Unstandardized Beta Sig.

Constant -0,048 ,852 Independent variables Merchandise quality 0,287 ,000*** Enjoyment Perceived price 0,107 -0,053 ,004*** ,078*

Time and effort costs -0,068 ,058*

Store satisfaction 0,680 ,000***

Sig, of the model ,000***

F-value 162,324 R square ,782 Adjusted R square ,777 *** Significant at 1% level ** Significant at 5% level * Significant at 10% level

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