Key factors of retail service quality affecting shoppers perception of retail store service, suppermakets versus convenience shops in vietnam , luận văn thạc sĩ

UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------

Dang Van Tuan
KEY FACTORS OF RETAIL SERVICE QUALITY
AFFECTING SHOPPERS’ PERCEPTION OF RETAIL
STORE SERVICE: SUPPERMARKETS VERSUS
CONVENIENCE SHOPS IN VIET NAM

ID: 22110076

MASTER OF BUSINESS
SUPERVISOR: Dr. DINH THAI HOANG

Ho Chi Minh City – Year 2014

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Abstract
The purpose of this paper was to determine shoppers’ perceptions of service quality offered
in Ho Chi Minh City, Viet Nam supermarkets and small convenience shops. A cross sectional
design of explorative nature was adopted for this study to evaluate the shoppers’ perception of the
convenience shops and supermarkets. This research was used an existing scale to measure retail
service quality and also explores the comparison between the convenience shops and
supermarkets.
The objectives of this study have been achieved through study 355 completed
questionnaires obtained from Ho Chi Minh City customers were used in the analysis for the main
study. There are main five factors positively affect to overall evaluation of retail service quality
including physical aspects, reliability, personal interaction, problem solving and policy. Principal

component analysis was used for scale reduction and multiple regression analysis was used to find
associations.
The result of this study recommend that the competitive strategies for convenience shops
are to concentrate on willingness to assist or in helping the customer, skills to solve customers’
problems and providing variety and deep assortment and improvement in cleanliness. It coincides
with customers’ suggestions for improvement such as improving on the physical facilities,
displays, shop presentation and arrangement as well as in-store and environment. The competitive
strategies for supermarkets are to concentrate policy and personal interaction. From these findings,
managerial implications and limitation of this research have been also discussed.

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CHAPTER 1: INTRODUCTION ................................................................................................... 5
1.1 Problem statement ................................................................................................................ 6
1.2 Research methodology and research scope .......................................................................... 7
1.3 Research contribution ........................................................................................................... 7
CHAPTER 2: REVIEW OF LITERATURE .................................................................................. 9
2.1 Service quality and customers’ perception ............................................................................ 9
2.2 Review of Service Quality Models .................................................................................... 10
2.3 Model and hypothesis ........................................................................................................14
2.4 Moderating effect ...............................................................................................................17
CHAPTER 3: METHODOLOGY ................................................................................................ 20
3.1 Research process ................................................................................................................20
3.2 Sampling design .................................................................................................................20
3.2.1 Sample Size ...................................................................................................................... 2
0
3.2.2 Pilot survey ...................................................................................................................... 2
1
3.2.3 Main survey ...................................................................................................................... 2

1
3.3 Measurement scale .............................................................................................................21
3.4 Methodology of data analysis ............................................................................................. 22
3.4.1 Descriptive statistics ........................................................................................................ 2
2
3.4.2 Reliability analysis ........................................................................................................... 2
2
3.4.3 Exploration factor analysis .............................................................................................. 2
2
3.4.4 Multiple regression analysis ............................................................................................ 2
3
3.4.5 Data analysis .................................................................................................................... 2
3
CHAPTER 4: RESEARCH RESULTS ........................................................................................ 24
4.1 Data statistical analysis ...................................................................................................... 24
4.2 Cronbach’s Alpha coefficient of reliability test ................................................................... 26
4.3 Exploratory factor analysis (EFA) ...................................................................................... 28
4.4 Multiple regression analysis for common model. ................................................................ 31
4.5 Hypothesis testing for Common model ............................................................................... 33
4.6 Multiple regression analysis of supermarkets. .................................................................... 35
4.7 Multiple regression analysis of Convenience Shops ........................................................... 37
4.8 Hypothesis testing of moderating effect .............................................................................. 40
CHAPTER 5: CONCLUSION, IMPLICATIONS, AND LIMITATIONS .................................... 43
5.1 Conclusion .........................................................................................................................43
5.2 Managerial implications ..................................................................................................... 43
5.2.1 Competitive Strategies for Convenience Shops ............................................................... 4
4
5.2.2 Competitive Strategies for Supermarkets ......................................................................... 4
5
5.3 Limitation and for further research ..................................................................................... 46

APPENDIES ...............................................................................................................................52
Appendix 1: The RSQS Items used in the Instrument ............................................................... 52
Appendix 2: Questionnaire (English Version) .......................................................................... 54
Appendix 3: Questionnaire (Vietnamese Version) .................................................................... 58


Appendix 4: Test result of independence of residuals – Common Model .................................. 61
Appendix 5: Test result of linear relationship - Common Model .............................................. 61
Appendix 6: Test result of homoscedasticity of residuals – Common Model ............................ 62
Appendix 7: Correlation indexes – Common Model ................................................................. 62

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Appendix 8: Coefficients indexes – Common Model.................................................................. 63
Appendix 9: Test result of Normality of residuals – Common Model.........................................63
Appendix 10: Test result of independence of residuals – Convenience shops.............................64
Appendix 11: Test result of linear relationship - Convenience shops.......................................... 64
Appendix 12: Test result of homoscedasticity of residuals – Convenience shops....................... 66
Appendix 13: Correlation indexes – Convenience shops.............................................................66
Appendix 14: Coefficients indexes – Convenience shops............................................................67
Appendix 15: Test result of Normality of residuals – Convenience shops...................................68
Appendix 16: Test result of independence of residuals - supermarkets....................................... 68
Appendix 17: Test result of linear relationship – supermarkets...................................................68
Appendix 18: Test result of homoscedasticity of residuals – supermarkets.................................69
Appendix 19: Correlation indexes - supermarkets.......................................................................70
Appendix 20: Coefficient indexes - supermarkets........................................................................71
Appendix 21: Test result of Normality of residuals – supermarkets............................................71

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CHAPTER 1: INTRODUCTION
Retail service quality has drawn attention of researchers and managers in recent decades
(Zeithaml, 2000). It has become very much important in the competitive environment and widely
used by the retailers as one of the important strategy because of its impact on customer satisfaction.
The retailing industry plays a crucial role in the overall economy of Viet Nam. By satisfying
customers through high quality service, business firms not only retain their current customers, but
also increase their market share (Finn and Lamb, 1991). By the way, retailers have positioned
themselves for all kind of customer needs and income levels especially the growing young working
population. Many retailers have been upgrading themselves by re-locating to up-coming modern
malls and shopping centers, providing superior shopping atmosphere and experience especially in
the urban and semi urban centers. To date, many studies on service quality relied on service quality
construct and scale by Parasuraman et al. (1988). However, this application to the retail industry
may not be appropriate for service quality in retailing industry, as well as not clear enough whether
these retailers have fully embraced the retail concept which emphasis on proper communication,
total retail experience, customer service, relationship retailing and consistent strategy. Additionally,
the retailers are more forced to concentrate towards customer’s perception in the competitive
environment. One of typical characteristic in retail setting, especially retail stores where there is a
mix of product and service, retailers are likely to have impact on service quality more than on
product quality (Dabholkar et al., 1996). As retailers can create such effects, service quality plays a
significant strategic role in creating quality perceptions. In this, the marketing decisions revolving
around the target market, product assortment, services and store atmosphere, store activities and
experience, procurement, price decisions, communications and location decisions which are very
critical to a retailer’s success should be emphasized (Kotler & Keller, 2006).
Recently, the growth in importance of service quality in the world has been influenced
greatly by the changing nature of the world economies and the customers changing needs, tastes

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and preferences. The move has also been fueled by the growth in consumerism, world travel and
the competitive business environments. The service quality has become a key concept in a
competitive corporate strategy (Gronroos, 2001). However, there have been very few studies on
retail service quality in Vietnam, especially the comparison between supermarkets and convenience
shops. Therefore, the research on perception of service quality within convenience shops and
supermarkets in Viet Nam is necessary to show out an overall picture of retail service quality in
Viet Nam. Hence, the question is how to evaluate customer’s perception of service performance
within the retail stores that needs to clarify timely and pertinent because perceived performance
could influence the retail stores image, customer satisfaction and bottom-line growth.
1.1 Problem statement
Recently, many firms have come to realize that understanding, meeting and anticipating
customer needs is probably the most important source of sustained competitive advantage (Vilares
& Coelho, 2003). Especially, in-depth knowledge of how to satisfy customers is very important in
developing countries such as Viet Nam, where small convenience stores are struggling to compete
with large supermarkets that are expanding to sub-urban areas and elsewhere. In order to gain the
competitive advantage and increase organizational effectiveness, the improvement of service
quality is required and needed to be paramount to focus attention, because that is only the way to
make a differentiation. Excellent customer service may indeed be the best answer to countering the
increasing trend of the expansion of supermarkets. The retailing sector has been the focus of much
academic research and considerable attention have been directed to the way consumers think and
feel about stores making up their attitudes and perceptions towards the stores. In the world, there
are some researchers have researched about this such as Ed Watkins (1976) researched on factors
influencing choice of supermarkets and convenience stores to develop a marketing strategy for
each, while Ryu and Han (2010) investigated the influence of quality food, service and physical
environment on customer satisfaction and behavioral intention in

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quick-casual restaurants in Midwestern state. This study is aimed to explore the components of
retail service quality in term of supermarkets and convenience shops in Viet Nam, as well as the
relationships between each of retail service quality components and customer’s overall evaluation
of retail service quality. This study is also to assess shoppers’ perceptions of the quality of service
provided by the convenience shops and the supermarkets in Viet Nam. Specifically, this research is
to find the pertinent answers to the following questions:
1. What are the key factors of retail service quality (convenience shops and supermarkets)?
2. What do shoppers generally consider important while shopping in a retail store?
1.2 Research methodology and research scope
The survey questionnaire is originally developed in English and then translated into
Vietnamese. In-depth interviews are then conducted with five convenience shoppers for each area
including supermarket/ convenience shop in order to modify the Vietnamese version of the
questionnaire before the survey is implemented in mass. The next step is analyzing the collected
data. The data of this research is processed using SPSS software with three main stages. First,
Cronbach‟s Alpha is used to test the reliability of the measurement scale. Then, the validity of the
measurement scale will be checked by Exploratory Factor Analysis (EFA). Finally, simple
regression and multiple regression are employed as the main method for investigating the
relationships among factors in the research model.
Ho Chi Minh City has been chosen to conduct the survey for this study since it is one of the
biggest cities in Vietnam and most of international brands centralize here. Moreover, Ho Chi Minh
City is also one of the wealthiest cities in Vietnam, so people who live here will have higher chance
to visit supermarkets and/ or convenience shops, which are usually quite often.
1.3 Research contribution
This research complements and adds to previous research by expanding the study of retail
service quality to include supermarket and convenience shop with the comparison. Therefore, this

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study is very important because it offers a scale to measure service quality that is suitable for

supermarkets and convenience shops and which could be modified slightly to expand whole retail
industry. Based on findings in the end of this research, we hope to provide practical contributions
to the retail service quality industry, particularly to owner of supermarkets and/ or convenience
shops who have the intention to develop their business, especially enter Ho Chi Minh City market.
However, it is essential for owners of supermarkets and/ or convenience shops to find out effective
strategies that can maximize opportunities and minimize obstacles. This study with deep
understanding of consumers’ intent to use supermarkets and/ or convenience shops can help their
owners have a higher chance to be successful in Ho Chi Minh City market. In summary, the
findings of this study would be useful for retail brand marketers who want to penetrate the business
in Ho Chi Minh City and who have already developed in the market and want to maintain the
loyalty of their customers.
1.4 Research structure
This study is organized into five chapters. It starts with the introduction chapter which
presents an outline of this research. This chapter includes background of the research and research
objectives. Besides, the significance that this study contributes to management practice as well as
scope of the research and methodology of data analysis are also mentioned in the first chapter.
Chapter two reviews and synthesizes the theories in the literature of five concepts, including
physical aspects, reliability, personal interaction, problem solving and policy. This chapter also
describes research model and proposed hypotheses. Chapter third introduces research methodology
used to empirically test the research model. Chapter four presents the results of data analysis. The
final chapter discusses summarily the study’s core findings, suggests some recommendations for
business strategy of retail companies based on findings and finally points out some limitations of
the research.

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CHAPTER 2: REVIEW OF LITERATURE
This chapter presents a review of relevant literature related to factors affecting customer’s
perception in comparison between supermarkets and convenience shops. This chapter also states

the hypotheses and propose conceptual model for this study.
2.1 Service quality and customers’ perception of retail store service
Service quality is a critical component of customer perceptions about the service as
retailers provide both goods and services to their customers. Retailing has been characterized as a
service with high degree of labor intensity, and low degree of interaction and customization (Tan
& Mehta, 1994). Examples of retailers in Viet Nam include the supermarkets and many others of
small shops such as kiosks (very small convenience shop), hawkers, butcheries, fuel stations,
bookshops, hotels, chemists, ordinary shops, auto dealers, cloth stores, jewelry stores, gift shops,
shoe shop, furniture stores, music stores, etc. As thus, the service quality is defined as customers’
perception of how well a service meets or exceeds their expectations (Czepiel, 1990). By growing
the research in the service quality, it has made many retailers to understand the importance of
service quality in their retail offerings. As mentioned earlier, positive customer’s perception of
service quality can greatly influence a firm’s performance and competitiveness.
Customer’s perception has been defined as a customer’s overall impression of the relative
inferiority/superiority of an organization and its services (Bitner & Hubbert, 1994). This perception
is influenced by many factors such as employee’s performance, facilities, price of products and
quality of service offered among other factors. Further, due to technological developments of
education, customer’s perceptions are greatly changing and calling for organizations to have
concerted effort to understand these perceptions. On the other hand, retail image refers to how a
retailer is perceived by customers and other parties. According to Berman and Evans (2005) overall
retail image is influenced by store location, merchandise attributes, pricing, firm’s positioning,
customer service, target market, attributes of physical facilities, shopping experience,

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promotion tools (such as advertising, public relations, personal selling, sales promotion) and
community service. Further, Berman and Evans (2005) note that a retailer's image depends heavily
on its ‘atmosphere’ or the psychological feeling a customer gets when in that retail outlet.
2.2 Review of Service Quality Models

Service quality in retail outlets is different from other product or service oriented
organizations (Finn, 2004). Service quality is considered as the most vital performance indicator of
an organization in both the marketing literature usually and the service marketing literature
particularly. A number of models of service quality have been developed. A review of service
quality scales of retail by Wang (2003) indicates that the two most widely used scales are the
SERVQUAL developed by Parasuraman (1988) and RSQS developed by Dabholkar (1996). On the
application of SERVQUAL within retail setting, in 1980s, in the attempt to define the service
quality as well as to develop a model of service quality affecting customer satisfaction,
Parasuraman conducted an exploratory investigation. The results showed that regardless of the type
of service, consumers used the similar criteria in evaluating service quality (Parasuraman et al.,
1985). In deep of review, Wang noted that SERVQUAL fails to provide a precise and efficient
measure of service quality in retail settings such as discount stores and apparel specialty stores that
offer a goods and services. Wang found that there is a broad variety of experiential factor structures
that can be obtained which vary in terms of interpretability thus conflicting from five factor
structure Reliability, Assurance, Tangibility, Empathy Responsiveness proposed by Parasuraman
(1988). This model indicates that consumer perceptions of quality influenced by five gaps
occurring in the internal process of service delivery. The basic premise is that service quality could
be defined by the difference between expected service and perceived service (Parasuraman et al,
1985). By looking at that model, we can see that the first four factors are those on the service
provider side of service (organization side). The last factor (Empathy Responsiveness) relates to
the customer side of service. However, SERVQUAL applies in the study of different types of

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service industries; there are certain limitations and criticisms. Some of the widespread concerns are
the five-dimension configuration of the scale, the appropriateness of operationalizing service
quality as the expectations-performances gap score, and the scale’s applicability to a retail setting
(Bakakus and Boller, 1992; Finn and Lamb, 1991; Reeves and Bednar 1994). Regardless of the
Retail Service Quality Scale (RSQS), Dabholkar et al. (1996) developed Retail Service Quality

Model (RSQS) in order to fit the retail industry. RSQS composes of five factors: (i) Physical
aspects – Retail store appearance and store layout, (ii)Reliability – Retailers keep their promises
and do the right things, (iii)Personal interaction – Retail store personnel are courteous, helpful, and
inspire confidence in customers, (iv)Problem solving – Retail store personnel are capable to handle
returns and exchanges, customers’ problems and complaints, and (v) Policy – Retail store’s policy
on merchandise quality, parking, operation hours, and credit cards. On their part, Tan and Mehta
(1994) identified five dimensions associated with facility intensive services (offered in
supermarkets) such as (i) operational dimension, (ii) the location dimension, (iii) the atmospheric
and image dimension, (iv) the consumer use dimension and (v) contact personnel dimension. They
contend that satisfaction with the facility driven service usually depends on the customer’s ability
to interact with the facility in order to produce a satisfactory consumption experience. In other
words, customers have two levels of expectations: desired and acceptable levels. She further
advises that for an organization to achieve the range between acceptable and desired, it has to
establish: product and service quality specifications, employee performance metrics, product
performance and quality metrics, clear definitions of customer expectations, service process
management, service process metrics, on-going interactive customer orientation, iterative process
monitoring, controls and corrective action procedures. In addition, Zeitham, Bitner and Glemler
(2009) argue that perceptions of service quality are the results of consumer’s comparisons of
expected service with perceived service. They contend that the gaps between expected and
actual/delivered service creates dissatisfaction. Thus, the retailers’ challenge is to minimize the
gaps between expected services and actual services by first understanding customers’ expectation

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and then delivering those expectations.
RSQS has been used by some researchers in measuring service quality in certain types of
retailers such as department stores, supermarkets and discount stores in Western and Eastern
countries. Kim et al. (2001) conducted a study with U.S. and Korean customers of discount stores.
The findings showed that customers' perceptions of service quality do not view service quality in

as similar manner, nor do U.S. and Korean customers of discount stores. In other words, the
dimensionality of service quality is not universal across industries or across countries (Kim
et al, 2001). Mehta et al (2000) conducted a research on service quality in the contexts of
supermarkets and electronic good retailers in Singapore. The results showed that “RSQS was
superior within the context of more good and less service environment. Moreover, Kaul (2003)
found that RSQS dimensions were not valid in India. In Vietnam, Nguyen (2006) tested a model on
the relationships between service quality, customer satisfaction and loyalty in supermarkets in
HCMC and found that retail service quality composes of five dimensions: goods assortment,
personnel, appearance, physical aspects and safety. The results found that SERQUAL and RSQS
could be applied in Vietnam if they are adjusted to the specific context of study. Wang
(2003) proposes the development of a new, more consistent, culturally bounded and precise
measure of retail service quality which can be
applied globally but also helpful to retail
managers in more accurate assessment

of service quality within retail stores. In a competitive

environment, service quality is critical for service firms

to maintain a stranglehold position as

it is an

superior service, smaller stores could

indicator of

business performance. Based on

compete with larger and more dominant stores as they

could not compete on price

factors.

In addition, focusing on service quality is significant in markets where product offerings are
similar, as typically found across grocery retail stores. Improvement of the quality of services
requires recognition of the service quality dimensions that are important to retail consumers.
Although the research into the dimensions used by consumers to measure service quality in the
service sector is extensive, there is lack of empirical studies on factors of quality

12


improvement strategies, especially the service quality dimensions (Dabholkar et al., 1996) for the
retail sector.
To look at the comparison between supermarkets and convenience shops in terms of overall
retail service quality:
First, reviewing of factors influencing choice of supermarkets: Survey of customer analysis
and market strategy on supermarkets and convenience stores by Ed Watkins (1976) found that the
factors that determined selection of a supermarket by customers were prices, cleanliness, food
quality, variety, store location, employee attitude, meat quality (freshness), produce quality
(freshness) and store atmosphere. However, as we know that in the marketing economies the
relative importance of all store factors identified by supermarket customers shifted over time and
between trading areas due to economic competitive changes and shifts in customer’s priorities and
these not are important and equal impacts on customer satisfaction. A study was performed in
Singapore by Tan and Mehta (1994) identified the factors identified as important in choice of
supermarkets were physical environment merchandise and operations, personnel (staff), price
promotions, availability of the supermarket (store hours and convenience), shopping ease (ease of
movement in the store and ease of finding items), image (reliability and reputation of the store).

Secondly, reviewing of factors influencing choice of convenience shops: Ed Watkins (1976)
identified six important factors in the choice of convenience stores and arranged in order of
importance as: quick service, hours open, location, products available, employee attitude and
parking space. As a contract with supermarket, Watkins noted that the relative importance of these
factors associated with convenience stores does not appear to shift significantly over time or
between trading areas. However, very few customers identified convenience stores as their primary
source of food but identified as a source for fill-in items.

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2.3 Model and hypothesis
Service quality Dimensions
(H1)

Physical Aspects

Reliability

(H2)
(H3)

Overall Evaluation

Personal Interaction
Problem Solving

of Retail Service
Quality
(H4)

(H6abcde)

(H5)

Supermarkets/

Policy

Convenience shops

Figure 1: Conceptual model of retail service quality in Viet Nam
Based on the above review, Retail Service Quality Scale (RSQS) is employed in this
empirical study of service quality in Vietnam. However, to be independent from the result of
Nguyen (2006) and tested whether that model can be applied globally or not, thus this study adopts
the original model of Dabholkar et al. (1996) with a minor modification as a moderating variable
(supermarkets/ convenience shops) was added in the model. The model (Figure 1) proposed a
structure for retail service quality consisting of five dimensions of service quality: Physical aspects,
Reliability, Personal interaction, Problem solving and Policy and a moderating variable. In this
study, five dimensions of service quality are tested with overall evaluation of retail service quality
and compared the impacts of supermarkets and convenience shops on the overall evaluation of
retail service quality in Viet Nam based on the individual dimensions of retail service quality.

Physical aspects are defined as an appearance of the store and store layout that makes it
convenient for customers. Physical aspects of retailer include equipment and fixtures which related
to variables such as store decor, lighting, air-conditioning; Physical facilities which related to

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variables such as building, ambience; Materials associated with this retailing’s service,
convenience of physical facilities and layouts. According to Dabholkar, Thorpe & Rentz (1996),
the store image as well as the cleanliness of the store, the cleanliness of the public facilities, the
store layout and ability to find products easily have been important elements in previous research.
The retail literature suggests the importance of the store layout and design (Teas, 1994; Gomez,
McLaughlin & Wittink, 2004). This dimension is similar to the tangibles dimension of service
quality but includes additional items such as the convenience of the shop and the store layout (Kim
& Jin, 2002). This factor has broader meaning than does the SERVQUAL’s tangible factors. In
addition to the appearance of the facilities, it also takes into account the convenience offered the
customer by the layout of physical facilities. The higher customers appreciate on the physical
aspects, the higher the satisfaction on the retail service quality from customer is.

H1: There is a positive impact of physical aspects of retail service quality on customer’s
perception of retail store service.
Reliability is defined as keeping promises, doing things right and the availability of
products. Reliability of retailers includes evaluation of how well retailers keep their promises and
does the right things, providing right service, available merchandise and error-free sales
transactions and records. Dabholkar, Thorpe & Rentz (1996) pointed out that keeping promises and
doing it right, that were identified during their interviews, were important sub dimensions. The
higher customers’ appreciate on reliability, the higher the satisfaction on the retail service quality
from customer is.
H2: There is a positive impact of reliability of retail service quality on customer’s
perception of retail store service.
Personal Interaction is defined that the employees are helpful, courteous and treat customers
with respect. In the retail position, sellers contact directly with the customers that they mostly are
final customers of goods and services. Retail sellers can be a very important element in

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achieving differentiation and competitive advantage and getting the value by customers in
organization. Sellers play an important role in this field because they contact with customers
directly. Thus, the personal interaction factor of retailers includes availability of knowledge from
employees to answer questions, inspiring confidence, providing prompt service, willing to
respond to customer’s requests, giving customers individual attention, showing consistent
courteousy with customers and even treat customers properly on the phone. This factor is a
combination of the ‘responsiveness’ and ‘assurance dimension’ of SERVQUAL and includes the
employee’s helpfulness and the ability to instil trust (Kim & Jin, 2002). The higher customers’
appreciate personal interaction, the higher the satisfaction on the retail service quality from
customer is.
H3: There is a positive impact of personal interaction of retail service quality on
customer’s perception of retail store service.
Problem solving is defined employees are trained to handle returns and to deal with
complaints. This is a new dimension that is different to the dimensions of SERVQUAL and was
added as a part of service recovery (Kim & Jin, 2002). This factor has no sub-dimensions and was
added to deal with the interaction between the store employees and the customers, and the manner
in which problems are handled. Problem solving addresses handling of returns, exchanges and
complaints. This dimension of retailers is the ability of retail store personnel in willingness to
handle returns and exchanges, sincere interest in problem and handling customer complaints
directly and immediately. Literature reviewed also suggests the importance of returning and
exchanging items and the way employees solve those problems (Dabholkar, Thorpe & Rentz,
1996). The higher customers appreciate problem solving, the higher the satisfaction on the retail
service quality from customer is.
H4: There is a positive impact of problem solving of retail service quality on customer’s
perception of retail store service.
Policy includes the store policy such as operating hours, payment methods and

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so on.
This is also a new dimension, which
is not similar to any of the
SERVQUAL dimensions; it has
no sub-dimensions and measures the service
quality that is affected by the store
parking and quality of products.

policies such as the opening hours of the
This dimension

store,

was added based on literature

reviews and the interviews (Dabholkar, Thorpe & Rentz 1996). This factor captures aspects of
service quality that are directly influenced by retailers’ policy. It includes high quality merchandise,
convenience of parking and operating hours as well as accepting major credit cards. The higher
customers appreciate policy, the higher the satisfaction on the retail service quality from customer
is.
H5: Policy has positive impact of retail service quality on customer’s perception of retail
store service.
Overall evaluation of service quality: Parasuraman, Zeithaml & Berry (1998) defined that,
is as consumers’ judgment about a business’s overall distinction or dominance. In simple words
Jiang and Wang, (2006) defined perceived service quality as the consumer’s evaluation of the
service performance received and how it compared with their expectation. Another aspect Jiang
and Wang, (2006) pointed out that, evaluations are not based on service attributes; rather these
depend on a customer’s feelings or memory. Therefore, customers measure service quality in terms
of how much pleasure they have received from a service. The definition of service quality can be
given on the basis of the results of Parasuraman et al, (1988), who state, “Perceived service quality

is therefore viewed as the degree and direction of discrepancy between consumers’ perceptions and
expectations” (p. 17).
2.4 Moderating effect
This study examines the moderating effects of supermarkets and convenience shops on the
impacts of service quality dimensions on the overall evaluation of retail service quality. Survey of
customer analysis and market strategy on supermarkets and convenience stores by Ed Watkins
(1976) found that the factors that determined selection of a supermarket by customers including

17


nine factors arranged in order of importance: prices, cleanliness, food quality, variety, store
location, employee attitude, meat quality (freshness), produce quality (freshness) and store
atmosphere. Further, Watkins notes that the relative importance of all store factors identified by
supermarket customers shifted over time and between trading areas due to economic competitive
changes and shifts in customer’s priorities. For the factors influencing choice of convenience
shops, Ed Watkins (1976) identified six important factors and arranged in order of importance as:
quick service, hours open, location, products available, employee attitude and parking space.
Unlike the supermarkets, Watkins noted that the relative importance of these factors associated
with convenience stores does not appear to shift significantly over time or between trading areas.
However, very few customers identified convenience stores as their primary source of food but
identified as a source for fill-in items. Youssef et al (2002) stated that the different sizes of firms
were said to have several critical differences. The researchers posited that the flat structure of small
to medium sized firms leads to a more flexible work environment where managers or owners will
tend to interact directly with customers, tend to be ‘people oriented’ instead of ‘system oriented’,
and tend to be more flexible. Large firms are typically highly structured with formalized procedure
set for all activities with high emphasize on standardization and specialization (Youssef et al.,
2002). The effects of the structure in relations to the size of the firms are reflected in the retail
sector. On the other hand, a study on the service quality of supermarket in Singapore found that
"personal interaction" and "physical aspects’ were the only two important determinants in the

respondent’s evaluation of the service quality of a supermarket (Mehta et al, 2000). The other
dimensions namely "Policy", "Problem solving" and "Reliability" were found not to be important
in the measure of service quality for a supermarket (Mehta et al, 2000). In addition, the
supermarkets tend to offer lower prices, provides more efficient climatically controlled shopping
area, and more consistency in its service offering as compared to supermarkets (Arnold and Luthra,
2000). Large store chains emphasize and compete on the basis of a wide and deep mix of
merchandise (Klemz & Boshoff, 2001; Odekerken-Schröder et al, 2001). Larger stores

18


provide convenience as large amounts of goods can be purchased during one shopping trip and can
easily be transported by car (Klemz & Boshoff, 2001). This convenience is supported by increased
mobility as consumers have more choices of where to shop and how much to shop (Clarke, 2000).
Based on the above discussion, it appears that the moderating effects of supermarkets and
convenience shops on the impacts of service quality dimensions towards overall evaluation of
retail service quality. Therefore, hypothesizes are as followings:

H6a. The impacts of the physical aspects on overall evaluation of retail service quality are
stronger for the supermarkets than for the convenience shops.
H6b. The impacts of the reliability on overall evaluation of retail service quality are
stronger for the supermarkets than for the convenience shops
H6c. The impacts of the personnel interaction on overall evaluation of retail service quality
are stronger for the supermarkets than for the convenience shops.
H6d. The impacts of the problem solving on overall evaluation of retail service quality are
stronger for the supermarkets than for the convenience shops.
H6e. The impacts of the policy on overall evaluation of retail service quality are stronger
for the supermarkets than for the convenience shops.
In summary, this chapter presents theoretical background of each concept in the model.
Based on discussion of literature review, retail service quality is affected by five factors, these

are: physical aspects, reliability, personal interaction, problem solving and policy. Then, the
comparison between supermarkets and convenience shops is also discussed. Such factors are
selected to build the model because their relationship has already tested by many previous
scholars through their studies. Hence, there are ten hypotheses proposed for this research. The
next chapter will discuss about methodology that used to analyze the data and test hypotheses of
the research model.

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CHAPTER 3: METHODOLOGY
The purpose of this chapter is to present the research process, methods using in research,
sampling design and data collection method.
3.1 Research process
The research process includes eight steps illustrate in Figure 3.1

3.2 Sampling design
3.2.1 Sample Size
With regard to the sample size, it depends on a number of aspects, such as expectation of
reliability, method of data analysis and others. Hair et al (1995) stated that “It is generally agreed
that the minimum sample for appropriate use for statistical analysis is equal to or greater than 5

20


time of independent variables, but not less than 100”
n>= 100 and n>=5k (where k is equal to number of variables). This study has 28items, so
the minimum size for each convenience shop data and supermarkets data in this research is n =
5*28 = 120.
3.2.2 Pilot survey

Two phases of study were undertaken in this study: a pilot study and a main survey. The
pilot study was a qualitative study. The qualitative exploratory study using in depth interviews with
five convenience shoppers for each area (supermarket/ convenience shop). At this step, researcher
conveniently selected shoppers, who had shopped at any supermarket/ convenience shops in the
last three months and spent a significantly large amount on shopping during such store visits. A
face-to-face questionnaire administration applied to those shoppers. The purpose of this study was
to check the contents in order to see any perceived ambiguity, omissions or errors of the measures.
3.2.3 Main survey
The Population of study (main study) included shoppers of convenience shops and
supermarkets in Ho Chi Minh City, the biggest city in Viet Nam. Thus, there are two data sets were
collected, one for the supermarkets and another for the convenience shops. Data were collected
using convenience sampling method with a structured questionnaire. The official survey was
conducted with final questionnaire by face-to-face interview, online survey and sending email to
convenience customers. These scales (see Appendix I), which were translated into Vietnamese
using a translated and back-translated procedure, were a seven-point Likert type.
3.3 Measurement scale
Five service quality dimensions were measured by 28 items in the Retail Service Quality
Scale (RSQS), which borrowed from Dabholkar et al. (1996) and the scale for overall evaluation of
service quality was adjusted from Fornell et al. (1996) in which articulated/ showed in appendix 1.

21


However, these were contextualized for ease of understanding by the shoppers. These variables are
integrated and tested using a seven-point Likert type, anchored by 1 – strongly disagree and 7 –
strongly agree.
3.4 Methodology of data analysis
3.4.1 Descriptive statistics
The descriptive statistics is conducted to provide the general information like Mode of data
collection, gender, age, married status, education level, occupation and income of respondents.

3.4.2 Reliability analysis
The assessment of Scale Reliability is a measurement of the internal consistency of the
construction items in this research in order to evaluate the reliability of each variable in
measurement scales. Otherwise, the observed variables describe the common construct. The
constructs with high reliability are those in which the items are highly inter-correlated. It states that
they are all measured with the same construct (Hair et al, 1998). Reliability Analysis is used for
Cronbach’s Alpha coefficient and item total correlation. The reliability coefficient of Cronbach’s
Alpha also illustrates how relation of the items in a set which are significantly correlated from one
to another. In generally, the value of Cronbach’s Alpha for acceptable reliability is 0.7, it could
decrease to 0.6 in exploration research, and any variables, which have the value of Correlated ItemTotal Correlation below 0.4, would consider to be rejected (Hair et al, 1998).
3.4.3 Exploration factor analysis
Exploration factor analysis (EFA) could be described as orderly simplification of
interrelated measures. EFA, traditionally, has been used to explore the possible underlying factor
structure of a set of observed variables without imposing a preconceived structure on the outcome.
By performing EFA, the underlying factor structure is identified. For this study, Exploration factor
analysis will be conducted by Varimax rotation in condition of KMO value more than 0.5 and
factor loading are over 0.5.

22


3.4.4 Multiple regression analysis
The main task of statistical analysis is applied in the Multiple Liner Regression in order to
study the correlation and measure the prediction level of 5 independent factors on dependent factor.
3.4.5 Data analysis
The procedure to analyze the data collected included test of reliability, EFA and SEM test.
This research employed SPSS 21.0 software to implement the data analysis procedure.

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CHAPTER 4: RESEARCH RESULTS
This chapter presents the results of the data analysis. The data analysis & discussion part is
divided into the following sections: descriptive analysis, reliability test, factor analysis, and
multiple regression analysis.
4.1 Data statistical analysis
In order to get the high rate of response, the face to face interview is the best way in getting
the answers but due to time constraint there are only 250 questionnaires were sent directly to
shoppers and 250 indirectly by email with attached file or the link for doing online. There were
only 355 respondents considered analysis but only 315 answers were valid (63% in total). Out of
315 respondents, that includes 151 responses of convenience shoppers and 164 responses for
supermarkets giving a rate of approx. 48% and 52% respectively as presented in the table 4.1
below:
Table 4.1: Demographic Profile
STT Description
1
1.1
1.2
2
2.1
2.2
2.3
2.4
3
3.1
3.2
3.3
4
4.1
4.2

4.3
4.4
5
5.1

Gender
Male
Female
Age
18 to 25
26 to 35
36 to 45
Over 45
Married Status
Married
Single
Else
Education
Secondary
High School
College or University
Else
Occupation
Student

Convenience
Shops
Count Percent
52
34%

99
66%
Count Percent
97
64%
34
23%
13
9%
7
5%
Count Percent
30
20%
105
70%
16
11%
Count Percent
0
0%
31
21%
114
75%
6
4%
Count Percent
69
46%

24

Supermarkets
Count
71
93
Count
97
20
17
30
Count
46
103
15
Count
0
10
142
12
Count
60

Percent
43%
57%
Percent
59%
12%

10%
18%
Percent
28%
63%
9%
Percent
0%
6%
87%
7%
Percent
37%

%
Comparison
-9%
9%
5%
10%
-2%
-14%
-8%
7%
1%
0%
14%
-11%
-3%
9%