Cranfield University Adam Manikowski the Impact of Product, Service and In-Store Environment Perceptions on Customer Satisfactio
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CRANFIELD UNIVERSITY ADAM MANIKOWSKI THE IMPACT OF PRODUCT, SERVICE AND IN-STORE ENVIRONMENT PERCEPTIONS ON CUSTOMER SATISFACTION AND BEHAVIOUR CRANFIELD SCHOOL OF MANAGEMENT Doctor of Business Administration DBA Academic Year: 2012 - 2016 Supervisor: Professor Emma Macdonald September 2016 CRANFIELD UNIVERSITY CRANFIELD SCHOOL OF MANAGEMENT Doctor of Business Administration DBA Academic Year 2012 - 2016 ADAM MANIKOWSKI THE IMPACT OF PRODUCT, SERVICE AND IN-STORE ENVIRONMENT PERCEPTIONS ON CUSTOMER SATISFACTION AND BEHAVIOUR Supervisor: Professor Emma Macdonald September 2016 This thesis is submitted in partial fulfilment of the requirements for the degree of Doctor of Business Administration © Cranfield University 2016. All rights reserved. No part of this publication may be reproduced without the written permission of the copyright owner. ABSTRACT Much previous research concerning the effects of the in-store experience on customers’ decision-making has been laboratory-based. There is a need for empirical research in a real store context to determine the impact of product, service and in-store environment perceptions on customer satisfaction and behaviour. This study is based on a literature review (Project 1) and a large scale empirical study (Projects 2/3) combining two sources of secondary data from the largest retailer in the UK, Tesco, and their loyalty ‘Clubcard’ provider, Dunnhumby. Data includes customer responses to an online self-completion survey of the customers’ shopping experience combined with customer demographic and behavioural data from a loyalty card programme for the same individual. The total sample comprised n=30,696 Tesco shoppers. The online survey measured aspects of the in-store experience. These items were subjected to factor analysis to identify the influences on the in-store experience with four factors emerging: assortment, retail atmosphere, personalised customer service and checkout customer service. These factors were then matched for each individual with behavioural and demographic data collected via the Tesco Clubcard loyalty program. Regression and sensitivity analyses were then conducted to determine the relative impact of the in-store customer experience dimensions on customer behaviour. Findings include that perceptions of customer service have a strong positive impact on customers’ overall shopping satisfaction and spending behaviour. Perceptions of the in-store environment and product quality/ availability positively influence customer satisfaction but negatively influence the amount of money spent during their shopping trip. Furthermore, personalised customer service has a strong positive impact on spend and overall shopping satisfaction, which also positively influences the number of store visits the week after. However, an increase in shopping satisfaction coming from positive perceptions of the in-store environment and product quality/ availability factors helps to reduce their negative impact on spend week after. 1 A key contribution of this study is to suggest a priority order for investment; retailers should prioritise personalised customer service and checkout customer service, followed by the in-store environment together with product quality and availability. These findings are very important in the context of the many initiatives the majority of retail operators undertake. Many retailers focus on cost-optimisation plans like implementing self-service check outs or easy to operate and clinical in-store environment. This research clearly and solidly shows which approach should be followed and what really matters for customers. That is why the findings are important for both retailers and academics, contributing to and expanding knowledge and practice on the impact of the in-store environment on the customer experience. Keywords: experience, retail, atmosphere, customer, influence, shopping trip, layout, secondary data, big data, purchasing cues 2 ACKNOWLEDGEMENTS It was a challenging but at the same time fascinating journey to work on this dissertation. Writing and completing it, however, required an enormous amount of effort and it would never have been possible without the support and contributions of many people. I was incredibly fortunate to have such a supportive, engaged and at the same time very encouraging consultation Research Panel, chaired by Professor Hugh Wilson. The Panel helped me to not only complete every stage of this Doctoral thesis, but also taught me how to be a researcher, make the most of every research opportunity, and never give up. I would like to express particular gratitude to my lead supervisor Professor Emma Macdonald, who went above and beyond what could be expected from a supervisor. Thank you Emma that I could always count on your advice, your time and your help. It was always very inspiring and supportive – especially during some of those difficult moments during my study. You were always encouraging me and giving me direction for the research project, proving that there is no ‘dead end.’ Thank you also for all the positive motivation in helping me move forward along this journey. I certainly appreciate all the confidence you gave me, thanks to which I could overcome even the most difficult challenges during the research process. Thanks to you, I will remember this time as not only a lot of hard work but also a unique pleasure of working on new and exciting things. I am also thankful to Professor Hugh Wilson who was the chair of my research consultation panel and who helped me enormously with his huge expertise and unique ‘outside the box’ thinking. His full support helped me to make most of this research project, never give up and finish it on time. He also taught me that there is always a solution to every difficulty and that a positive attitude towards even the most complicated research problem can create outstanding solutions. I would also like to thank Dr Radu Dimitriu, for all his great expertise and knowledge. His constructive and at the same time encouraging feedback helped me to make this work much better. I appreciate Radu’s support and always 3 motivating recognition for completed parts of this Doctorate. His support helped me keep a high level of positive energy, and moving the things forward. I would like to express my special appreciation to Dr Colin Pilbeam who helped me significantly in the writing of this thesis and during my studies. Dr Pilbeam’s great ideas, which have been incorporated into this research project and all his help with preparation to the VIVA, were invaluable. It would be very difficult to accomplish this work without the help of Shane Baxendale. Thank you, Shane, for all your insights and invaluable help in working with such a large amount of data. Your experience and ability to find relations in even the largest amounts of information is extraordinary and made a significant contribution to this work. This research is based on a large amount of data provided by Tesco. I would like to thank the entire Tesco Leadership Team for granting me access to the data, as well as help and support in accomplishing this work. I would never have been able to finish this work without the unfailing support of my wife, Faustyna. Thank you for being so close to me, encouraging me all the time and all your empathy during every, even the most difficult stage of this work. I am also grateful to my parents for always being with me throughout this journey and supporting me in creating opportunities for my development, which significantly contributed to the completion of this work. 4 TABLE OF CONTENTS ABSTRACT ........................................................................................................ 1 ACKNOWLEDGEMENTS................................................................................... 3 TABLE OF CONTENTS ..................................................................................... 5 LIST OF FIGURES ............................................................................................. 8 LIST OF TABLES ............................................................................................. 10 LIST OF APPENDICES .................................................................................... 12 LIST OF ABBREVIATIONS .............................................................................. 13 1 LINKING DOCUMENT .................................................................................. 14 1.1 Introduction ............................................................................................. 14 1.2 Background and rationale ....................................................................... 14 1.3 Summary of the research process .......................................................... 18 1.3.1 Scoping study ................................................................................... 18 1.3.2 Literature review ............................................................................... 23 1.3.3 Joint research project 2 and 3 .......................................................... 27 1.4 Research methods .................................................................................. 41 1.4.1 Philosophical positioning .................................................................. 41 1.4.2 Theoretical positioning ..................................................................... 43 1.4.3 Data collection and methodological choice ...................................... 44 1.5 Summary of findings ..............................................................................