Department of Business Management I-Shou University

DEPARTMENT OF BUSINESS MANAGEMENT I-SHOU UNIVERSITY

MASTER THESIS

EVALUATING CUSTOMER LOYALTY IN BIG C SUPERMARKET IN HO CHI MINH CITY

ADVISOR: Dr. LIOU JIN- PIN ADVISOR: Dr. HO SY TAN GRADUATE STUDENT: LE TU PHUONG QUANG

January, 2016

ACKNOWLEDGEMENT First of all, I would like to thank all the professors of I-Shou University, Hong Bang University and University of Electricity for their teaching and support for the last two years of my MBA course. In particular, I would like to thank Dr. Liu Jin Pin and Dr.Ho Sy Tan for being my thesis advisors. Their knowledge and advices are essential for me to finish my thesis. I also want to thank my classmates for the wonderful experience in class and in life they have shared with me. I believe that the time with them in this master class is just a beginning of a sustaining relationship in the future. Last but not least, I would like to thank my family members who have supported and motivated me to pursuit and finish this course. Thank you very much!

ABSTRACT Together with the development of world economy, during the recent years, consumer psychology has been changing. Many people are likely to go shopping in supermarkets rather than traditional markets due to its safety and service quality. Therefore, at present, in Ho Chi Minh City, there are several big supermarkets operating such as Co-op Mart, Maximark, Citimart, Big C… Big C superstore joined the market quite later than others did. To compete against other existing supermarkets as well as to meet demands of more difficult customers, a matter affecting the development of this supermarket is to research customer loyalty, affecting factors and methods to improve loyalty, and more importantly, it is the loyalty toward service quality of the supermarket. This study aims to explore customer loyalty at BigC Supermarket in Ho Chi Minh City. Result shows that most customers feel satisfied and have good assessment on the supermarket. However, there are still customers who have not been satisfied with the supermarket in some aspects such as quality of goods, types of goods, serving attitude. Keywords: supermarket, customer’s loyalty, quality, attitude, service

TABLE OF CONTENT ACKNOWLEDGEMENT ...... i

ABSTRACT ...... ii

TABLE OF CONTENT ...... iii

LIST OF TABLES ...... vi

LIST OF FIGURES ...... vii

CHAPTER 1 INTRODUCTION ...... 1

1.1 REASONS FOR THE RESEARCH ...... 1

1.2 RESEARCH QUESTIONS AND RESEARCH OBJECTIVES ...... 2

1.2.1 RESEARCH QUESTIONS ...... 2

1.2.2 RESEARCH OBJECTIVES ...... 2

1.3 SCOPE AND SUBJECTS OF THE RESEARCH ...... 2

1.3.1 SCOPE OF RESEARCH ...... 2

1.3.2 SUBJECTS OF RESEARCH ...... 2

1.4 STRUCTURE OF THE THESIS ...... 2

CHAPTER 2 LITERATURE REVIEW ...... 3

2.1 OVERVIEW OF RESEARCH TOPIC ...... 3

2.1.1 CUSTOMER THEORY ...... 3

2.1.2 THEORY OF LOYALTY ...... 4

2.1.2.1 DEFINITION OF LOYALTY ...... 4

2.1.2.2 LOYALTY HIERARCHY ...... 4

2.1.2.3 STRATEGIC VALUE OF LOYALTY ...... 5

2.1.2.4 LOYALTY TOWARDS SUPERMARKET ...... 6

2.1.3 SERVICE QUALITY ...... 8

2.1.4 THEORY OF SUPERMARKET ...... 9

2.1.4.1 DEFINITION OF SUPERMARKET ...... 9 iii

2.1.4.2 SERVICE QUALITY AT SUPERMARKETS ...... 9

2.2 PRACTICAL FOUNDATION ...... 9

2.3 OVERVIEW OF BIG C SUPERMARKET – HO CHI MINH CITY ...... 11

2.3.1 FEATURES...... 11

2.3.2. PRODUCTS OF BIG C SUPERMARKET ...... 11

2.3.3. BIG C SUPERMARKET AT HO CHI MINH CITY ...... 12

CHAPTER 3 RESEARCH METHODS ...... 13

3.1 DATA COLLECTION ...... 13

3.2 SAMPLING METHOD...... 13

3.3 DATA ANALYSIS METHOD ...... 14

CHAPTER 4 RESEARCH RESULT ...... 16

4.1 Research subjects description ...... 16

4.2 Assessment on the customer loyalty towards Big C Ho Chi Minh City ...... 17

4.2.1 Evaluating scale by Cronbach’s Alpha coefficient ...... 17

4.2.2 Criteria that influence the selection of supermarket ...... 21

4.2.3 Assessment on the satisfaction of customers with Big C supermarket ...... 23

4.2.4 General perceived quality ...... 28

4.2.5 Assessment on the switching barrier against the competitive supermarkets ...... 30

4.2.6 Consumer trend ...... 31

CHAPTER 5 CONCLUSION& RECOMMENDATIONS ...... 35

5.1 Orientation ...... 35

5.2. Solutions ...... 36

5.2.1 Solutions on products ...... 36

5.2.2 Solutions on service quality ...... 39

5.3 Conclusion ...... 40

5.4 Recommendations ...... 41

REFERENCES ...... 43

APPENDIX QUESTIONNAIRES ...... 46

LIST OF TABLES Table 4.1: Cronbach’s Alpha of “Goods” factor ...... 17

Table 4.2: Cronbach’s Alpha of “Supermarket display” factor ...... 18

Table 4.3: Cronbach’s Alpha of “Employee team” factor ...... 19

Table 4.4: Cronbach’s Alpha of “Supermarket premises” factor ...... 19

Table 4.5: Cronbach’s Alpha of “Supermarket safety” factor ...... 20

Table 4.6: Cronbach’s Alpha of other factors...... 20

Table 4.7: Most favorite supermarket ...... 21

Table 4.8: Testing the mean of the results of customers’ assessment on the importance of factors when selecting supermarket ...... 21

Table 4.9: Testing the satisfaction of customers with Big C’s factors ...... 23

Table 4.10: Test results of the difference between customer groups with 3 factor groups of goods, employees and supermarket premises ...... 26

Table 4.11: Test results of the difference between customer groups with 3 factor groups of supermarket display, supermarket safety and other factors ...... 27

Table 4.12: General statistics about perceived quality ...... 28

Table 4.13: Independent Sample Test about general perceived quality in terms of customers’ gender ...... 29

Table 4.14 Value ...... 29

Table 4.15: Assessment on the switching barrier ...... 30

Table 4.16 Response to negativeinformation ...... 31

Table 4.17: Response to the appearance of new supermarket ...... 32

Table 4.18 Assessment on the loyalty ...... 32

LIST OF FIGURES

Figure 2.1: Theoretical factors creating brand loyalty ...... 7

Figure 2.2: measurement standards for brand loyalty levels ...... 7

Figure 2.3: Factors affecting customer loyalty toward the supermarket ...... 8

vii

CHAPTER 1 INTRODUCTION

1.1 REASONS FOR THE RESEARCH In the trend of global economic integration, business fields of Vietnam in general and retail business in particular are facing harsh competitions from not only domestic enterprises but also pressure of foreign businesses. On January 1, 2009, in accordance with the pledging roadmap to WTO, Vietnam officially opened retail market and made competitions for shares between enterprises become more severe. Building customer loyalty plays an important role in planning competitive strategies of enterprises. For Omar (1999), loyalty toward stores is the most important factor deciding the success and existence of supermarkets. If there is not customer loyalty, competitive capacity does not last. Together with the development of world economy, during the recent years, consumer psychology has been changing. Many people are likely to go shopping in supermarkets rather than traditional markets due to its safety and service quality. Therefore, at present, in Ho Chi Minh City, there are several big supermarkets operating such as Co-op Mart, Maximark, Citimart, Big C… Big C superstore joined the market quite later than others did. To compete against other existing supermarkets as well as to meet demands of more difficult customers, a matter affecting the development of this supermarket is to research customer loyalty, affecting factors and methods to improve loyalty, and more importantly, it is the loyalty toward service quality of the supermarket. The reason is that most retailers accept the fact that the basic strategy in retail market is to build loyalty on the ground of service quality of enterprises at higher degree than competitors do to acquire competitive advantage. Starting from the above matters, our group chose “Evaluating customer loyalty at Big C supermarket in Ho Chi Minh City” as the research topic.

1.2 RESEARCH QUESTIONS AND RESEARCH OBJECTIVES 1.2.1 RESEARCH QUESTIONS The research is to answer the below questions: - How do customers feel about quality of products and services at Big C? - Do customers satisfy with Big C? - Are there any switching barriers that influence customers? - Are customers loyal to Big C?

1.2.2 RESEARCH OBJECTIVES - To evaluate customer satisfaction towards products and services at Big C supermarket - To find out switching barriers affecting customers - To evaluate customer loyalty towards Big C supermarket - To propose methods to increase customer loyalty

1.3 SCOPE AND SUBJECTS OF THE RESEARCH 1.3.1 SCOPE OF RESEARCH - Research site: Big C Supermarket – HCMC and other nearby places where customers come to go shopping - Research duration: Our group collects primary data in August and September, 2015, then analyzes, processes data and write report till December, 2015

1.3.2 SUBJECTS OF RESEARCH - Customer loyalty towards Big C – HCMC is the subject of this research. 1.4 STRUCTURE OF THE THESIS The thesis has five chapters: Chapter 1: Purpose of the research Chapter 2: Theoretical foundation Chapter 3: Research methods Chapter 4: Analytical results Chapter 5: Conclusion & Recommendations 2

CHAPTER 2 LITERATURE REVIEW

2.1 OVERVIEW OF RESEARCH TOPIC

2.1.1 CUSTOMER THEORY

If an enterprise wants to exist and develop, it must maintain and gradually enhance their businesses. In particular, it has to produce more products and services then sell them to market. Therefore, each enterprise needs customers to consume their products and services.

According to international standard ISO 9000:2000, “customers are organizations and individuals receiving product or service”.

This is the general definition of customer; however, from each different angle and aspect, we can bring out different opinions related to customers. From the point of view of retail market, there is one view towards customers seen as Wal-Mart group’s philosophy of life, which is the largest retail group in the world:

- Customers do not depend on us but ourselves only, the sellers depend on them; therefore, we do not wait for them to find us, we have to find them, we have to sell what they want to buy and let them know that we have what they like.

- Customers lavish their favor upon us when they go shopping at our store, we do not grant a favor when providing customer services; thus, customer services are “obligations”, “duties”, “responsibility” of us towards customers.

- Customers are a vital part in our business. They are insiders, not outsiders; therefore, never say to them “no return on sale goods is our policy” when they want to return what they bought.

- Customers are not targets for us to quarrel, compete or get frustrated; thus, be always polite to customers. Do not quarrel and always find the rightness in their opinions to sympathize. - Customers come to us for what they need, and our work is to satisfy their needs; therefore, if we do not have what customers need, that is our fault.

- Customers are sensitive; they have emotions and feelings like us. - Customers are deserved to receive gentle and thoughtful services provided by us, if we were not gentle and thoughtful, they would leave us even the best quality of our goods. - Customers buy our products and pay salary to us because our salary is extracted from sales revenue. No customer means no revenue and enterprises certainly cannot exist as well. - Customers are living source of our enterprise and others.

2.1.2 THEORY OF LOYALTY

2.1.2.1 DEFINITION OF LOYALTY

Loyalty plays a vital part in the success of each enterprise in general and retail businesses in particular.

In accordance with marketing view: “Loyalty is the long-term and strict adherence of customers to one kind of product or service of enterprises. It is presented by repeated buying behaviors or the introduction to new customers to buy goods and services of enterprise.

According to the definition of MC Connel and Huba (2002), characteristics of very loyal customers include:

- They buy and believe in goods and services of enterprise.

- They are loyal and eager to introduce the brand to their friends, colleagues or neighbors. - They are willing to provide feedback and praises.

- They dismiss temporary mistakes about services and quality but they will let you know about decreasing quality. - They are not bribery; very loyal customers will praise quality of products at highest degree.

2.1.2.2 LOYALTY HIERARCHY

According to “Brand Asset Management” of author Duong Huu Hanh, there are 4

five levels reflecting customer loyalty towards products and services. Each level requires different marketing approaches. In reality, there are no clear borders between five levels of the hierarchy. The lowest level: Random buyers are people who do not care about specific brands. They shall buy available products. The second level: Familiar buyers are satisfied or at least do not hate the brand. The third level: Familiar buyers with switching cost means buyers who are pleased with products and have no demand to the change to other brands. To attract these customers, other brands have to offset costs due to the brand change. The fourth level: Close buyers are customers who are satisfied and interested in the brand. The fifth level: Devoted buyers are proud of the brand and willing to introduce it to other people positively.

2.1.2.3 STRATEGIC VALUE OF LOYALTY

- Decrease in marketing costs: The research of Frederick Reichheld stated that if the number of loyal customers increases by 2%, an enterprise could reduce 10% operating costs. Costs spent to attract new customers are much higher than fees for taking care of current customers. Therefore, the higher customer loyalty enterprises can build, the lower marketing costs are reduced; in other words, their revenue is getting higher. - Attraction of new customers After loyal customers use products and services and they are pleased with it, they will share experience to close people and advertise positive things of that enterprise. This is a great and free marketing channel for each enterprise. - Domination over distribution channels Well-known brands often have strong dominance over distribution channels. Their goods are given top priority to be sold at agents because their number of consumers is huge. The dominance over distribution network is also expressed when am enterprise wants to introduce new products. Distribution channels often give top priority to famous brands than other normal brands. 5

2.1.2.4 LOYALTY TOWARDS SUPERMARKET

Customer loyalty plays a vital part in the success of brands. Researches in marketing depict that most enterprises always want to find new market in an illusory way but they forget to take care of current market. On the other hand, revenue came from old market is much higher than that of new markets. The reason is that marketing costs for current brand is much lower (Mittal & ctg, 1998). Customer loyalty towards a brand in general and one supermarket brand in particular represents the trend in consumption of customers and repeated buying behaviors (Chaudhuri, 1999). Therefore, the higher customer loyalty an enterprise builds, the higher revenue they receive. When customers have good feedbacks about service quality of supermarkets, the relationship between customers and supermarkets become more tightly. Zeithaml & ctg (1996) argued that if customers have good evaluation of service quality of one enterprise, then they are likely to highly recommend this company. More importantly, they choose this enterprise in preference to the others. Therefore, they will repeat buying, buy more and accept higher price without moving to others. In other words, service quality of supermarkets is one of differential factors that can create competitive advantage for supermarkets to attract customers and expand their shares.

Previous researches stated that the satisfaction is an important factor to explain customer loyalty (Jones & Suh, 2000). Compared to unsatisfied customers, when a customer is satisfied, he/she tends to use services much and regularly. Moreover, if having satisfaction, they are likely to buy more and create word of mouth marketing to close people (Zeithaml & ctg, 1996).

Research models at Asian market point out that there are four factors representing customer loyalty toward brands, including:

- Customers are satisfied with brands.

- The relations towards enterprises become more tightly. This is the trust of customers towards brands. - Customers meet barriers when changing the brand they used. - Trend in consumption of brands 6

These factors are shown as the below diagram:

Satisfaction Trust

Loyalty

Switching barriers Trend

Figure 2.1: Theoretical factors creating brand loyalty

Buying behavior

Switching costs

Brand loyalty

Brand preference

Customer satisfaction

Brand adherence

Figure 2.2: measurement standards for brand loyalty levels Source: Brand asset management (Dr. Truong Dinh Chien), Statistical Publishing House, 2005 7

There are many factors affecting customer loyalty towards supermarket. Previous researches stated that the satisfaction with service quality is a vital factor to explain loyalty of consumers (Jones & Suh, 2000). When customers are satisfied with service quality of the supermarket, then they tend to repeat buying behavior without moving to other supermarkets. The factors related to service quality are shown as below:

Price

Goods

Customer loyalty to the supermarket Staff

Display

Trust

Figure 2.3: Factors affecting customer loyalty toward the supermarket

The topic combined the diagram 1 & 3 to build research model to serve the evaluation of customer loyalty towards Big C supermarket.

2.1.3 SERVICE QUALITY According to Vietnamese standard and ISO 9000, “service quality is the relevance of products and services to the requirements or expectations of buyers”. Therefore, measuring service quality often replies on the relationship between expectation and actual perception of customers toward services. For Dr. Luu Van Nghiem, in Marketing in service business (Statistical Publishing House, 2001), “service quality is the satisfaction level of customers when they feel and use services. It is the general services of an enterprise that bring chain of interests

and satisfy all expected values of customers in production and output distribution”.

2.1.4 THEORY OF SUPERMARKET 2.1.4.1 DEFINITION OF SUPERMARKET

Supermarket is a kind of modern store. They do general business or specialized business. Their goods structure is abundant and diversified. These goods may not be related to each other (general store) or the same certain kind of goods (specialized store). These goods are quality-assured which meet certain requirements. Supermarkets have to assure business areas, technical devices as well as management and business operations. Besides, they must have civilized and convenient services to satisfy shopping needs of customers. Supermarkets can do general or specialized businesses but they do not include establishments for service operations such as conference, meeting room, working office…

2.1.4.2 SERVICE QUALITY AT SUPERMARKETS

There are different definitions related to service quality at supermarkets. However, there is no explanation which is absolutely right or wrong. Each point of view will give us a meaning about service quality at supermarkets. Being summarized from many definitions, we can depict service quality at supermarkets as follows: “Service quality of supermarket are objective and subjective factors (excluding products or services of supermarkets that customers buy) which bring positive or negative reactions of customers at supermarkets. 2.2 PRACTICAL FOUNDATION

Customer loyalty is the target of all strategies of one enterprise. A new approach to build loyalty, which is considered by researches and managers, is customer experience. For retail field in general and supermarket business in particular, there have been many changes during the recent time. Buyers tend to come to supermarkets for entertainment. Therefore, understanding and creating entertaining shopping experience for customers is a leap reaching their loyalty. The research aims at 9

detecting factors affecting entertaining shopping experience and the level of influence of each factor. The research also tests the differences between shopping experience and demographic variables. Researches on customer experience, especially entertaining shopping experience is quite new. However, it potentially brings more researches in the next time due to its important role in building customer loyalty.

A recent research collected data that show the direct relations between customer experience and loyalty. Continuous and interesting experiences help to connect customers with enterprises. The interest is a strong and positive feeling and if we can use it, enterprises can remove the disappointment of customers as well as potential factors causing their frustration about brands. Meanwhile, enterprises can continue to show appropriate values of brands, factors meeting customer expectations and help them to achieve their goals as well. The evaluation and management of values, which are directly related to customer experience when doing shopping with providers of goods and services, is always more effective than business evaluation replying on opinions and views of customers; thereby, getting better forecast about revenue and development of enterprises. The reason is that actual revenue and development come from loyal customers who do not only buy more products and services but also adhere to enterprises and regularly introduce them to their friends, families and colleagues. In reality, retail market in Vietnam has been changing greatly during the recent time. With population of 83 million people, it can be seen as an attractive retail market. However, recently, the competition in this field has become more severe because our country started opening for foreign retail groups to do business and operate here. Domestic enterprises, which want to exist and develop, must find the way to increase customer loyalty. Experiencing many fluctuations as well as social and economic conditions, trends in consumer behavior have been changing significantly. Consumers come to supermarket for not only shopping but also playing, entertaining, meeting friends… Therefore, if we want to build loyalty of customers who were born in this new generation, supermarket managers should plan suitable strategies on the ground of entertaining shopping experience.

2.3 OVERVIEW OF BIG C SUPERMARKET – HO CHI MINH CITY 2.3.1 FEATURES Big C supermarket operates business in the form of ‘Hypermarket” or “Supercenter”, a kind of modern retail business that is being managed by Casino Group (parent group of Big C). Casino is one of the largest retail groups in the world, with more than 200,000 employees working at 11,000 branches in Vietnam, Thailand, Argentina, Uruguay, Brazil, Columbia, France, Madagascar and Mauritius. At present, Big C Vietnam has total 31 Big C supermarkets nationwide. Functions: « Big C » brand represents two most important values in business orientation and strategies to get success. « Big » in Vietnamese means “To lớn”, it depicts large size of Big C supermarkets and wide selections of goods that they provide. At present, each Big C supermarket has around 40,000 kinds of goods to serve needs of customers. « C » is the abbreviation word of “Customer”; in Vietnamese, it means “Khách hàng”. The word “C” mentions about our loyal customers. They are the key leading to the success in the business strategy of Big C supermarket. With restless effort of more than 8,000 employees, Big C supermarket is proud to bring customers in the country the modern, fresh and convenient shopping places with the abundance of quality-assured goods at reasonable prices, together with effective customer service. Besides, all Big C supermarkets in the world provide shopping experience and utility services for customers.

2.3.2. PRODUCTS OF BIG C SUPERMARKET

At commercial centers and Big C superstores, most of the space is used for consumer goods and foods with low price and high quality. Business products at Big C supermarket can be divided into five main sectors as below: Fresh food: include meat, seafood, fruit, vegetable, processed food, frozen food, butter and milk, bread. Dry food: include spices, drinks, soft drinks, wine, snacks, chemicals, cosmetics, 11

pet food and accessorizes. Garments and accessorizes: include fashions, shoes and handbags for men, women, children and infant. Electrical appliances: there are diversified electrical appliances including devices in kitchen, home entertainments, computers, tools and informatics equipment. Decorative home furniture: tables, chairs, kitchen appliances, plastic goods, in- house appliances, decorative items, upgraded items, maintenance and repair, mobile parts, bikes, sport items and toys.

2.3.3. BIG C SUPERMARKET AT HO CHI MINH CITY

System of Big C supermarket – Ho Chi Minh City is located at 212 Thoai Ngoc Hau Street, Phu Thanh Ward, Tan Phu District, Ho Chi Minh City. The number of employees working for Big C – Ho Chi Minh City is around 500 including administrative and commercial agents. Besides, there are security agents of three security companies, marketing agents… - Functions: It has function of a commercial center serving shopping needs of citizens in Ho Chi Minh City and neighboring areas. Moreover, Big C gives preferential treatment to help local manufacturers develop, thereby increasing living quality of Ho Chi Minh citizens. Mission: The destination for consumers and best retailers satisfying valued customers. Vision: Nurturing a diversified world.

CHAPTER 3 RESEARCH METHODS

To conduct this research, I used some of research methods as below: 3.1 DATA COLLECTION • Secondary data: Some documents as well as general information about Big C supermarket on the websites, magazines related to history of formation and development, total investment, employees, facilities, market size, competitors… are collected. • Primary data: Individuals are directly investigated and interviewed through factors such as customer satisfaction, the most favorable supermarket, switching barriers, selection criteria for choosing a supermarket... General statistics about subjects of survey: gender, age, income, occupation… The sample size is chosen on the ground of reliability rate of 95% and allowable error is 10%. For this research, we choose e = 8%. To apply formula determining sample size by proportion, we have sample research N:

Z 2 * p * (1  p) 1.96 2 * 0.5 * (1 

e 2 = 0.08 2 = 150

According to the above formula, we can bring out 150 samples. Then, for enhancing representative capacity, we increase to 170 samples and conduct survey on the ground of 180 samples to remove some errors.

3.2 SAMPLING METHOD

For the research at Big C supermarket, there are no data about loyal customers. Therefore, to identify sampling methods, we use systematic random sampling in the field.

By this way, we directly come to the supermarket. From counters, we choose seven counters randomly corresponding to seven members in our group. From each counter,

after customers buy goods, each member will choose customers based on the K order. It means that every K persons coming out from counters, we will choose one to do survey. If the person to be chosen does not agree to the survey, we will choose the right next person without waiting for the number of K persons.

Identifying K

In accordance with the formula: K=N/n

Of which, N is the number of persons buying at supermarket each day at each counter. In accordance with data we collected from previous researches, Big C supermarket has around 2,700 to 3,000 customers each day.

n is the number of samples surveyed of each member in one day With 180 samples, we will survey in two days

Then: K = [(2700+3000)/2]/180~16 3.3 DATA ANALYSIS METHOD  Statistical analysis is used to depict general information about the research subject in terms of gender, age, income, occupation…  After being assured to follow standard distribution rule, observed variables are tested to inspect average value in total (One Sample T-Test) by SPSS Software with hypotheses:  Customers satisfy with some criteria when talking about Big C supermarket (goods, employees, product display, location…)  Importance levels in criteria for selecting supermarket  Importance levels towards switching barriers Pair assumptions:  Testing hypothesis (acceptance) is H0: µ= Test Value

 Rejected hypothesis H1: µ ≠ Test Value  With α as significant level of test, the reliability is 95%, then α=5%.

Rejected probability of H0 is:

If Sig. > 5%: Insufficient basis to reject hypothesis H0

If Sig. < 5%: Rejecting hypothesis H0

- Test of homogeneity This test is used to inspect whether variances of groups are identical or not - One-factor analysis of variance Hypotheses towards one-factor analysis of variance (One-Way Anova): + Comparing groups must be independent and they are chosen randomly. + Comparing groups must have standard distribution, using hypothesis Kolmogorov-Smirnov. + Variances of groups must be identical, using Levene test to consider the

equation of variances. Levene test is conducted with hypothesis H0 that variances of comparing groups must be equal. If testing result represents that

observed significance is lower than 0.05, then rejecting hypothesis H0. + If one of above hypotheses cannot meet the requirement, then nonparametric test Kruskal-Wallis will be used to replace ANOVA - Hypotheses:

+ H0 that is needed to test is total average of equal comparing groups

+ H0: There are no differences between averages of groups categorized by qualitative variables.

+ If: Sig. (2-tailed) ≤ 0.05 then reject hypothesis H0. Sig.

+ (2-tailed) > 0.05: no basis to reject hypothesis H0

CHAPTER 4 RESEARCH RESULT 4.1 Research subjects description A gender survey shows as in Figure4.1 that women make up 58% and men account for 42%. Although there is no much difference, the rate of women who go to supermarket is still higher than that of men. This match with reality that in a family, a women’s role, a housewife, is very important. However, the rate of men who go to supermarket is also increasing. Most of this percentage is the youth. They go to supermarket not only to do shopping but also to do sightseeing and entertainment. Additionally, those who are married usually go to supermarket with their family, especially during the weekend. According to research as shown in Figure 4.2, group of 22 to 40 years of age has a higher rate of going to supermarket in comparison with the other groups of age. This is the age that starts to earn stable income. The rate of going to supermarket of people who are over 40 is not high (only 20% of respondents) because a majority of them are familiar with buying items at traditional market. The age group of 22 and younger also makes up 29% of the total samples. This age group is mostly students and pupils. Aside from shopping, they also go to supermarket for entertainment demand. There are 40.6% of respondents in all the collected samples have income from 4-7 million VND. This income mostly focuses on office staffs who are busy with office works; therefore, supermarket is a good choice for them. Those who have income below 4 million VND mostly are students and they makes up 17.1%. They are easy to adapt to the new trend and like to do shopping at spacious, airy places more than at traditional market. Consumers’ income tents to increase, as shown in the chart. Income of over 7 million VND also makes up a relatively high rate of 41.7%. Through the survey, we can see that subjects of survey have wide range of age group, occupation, and income level. The largest age group is 20-40 years of age, making up over 60%. The group of monthly income lower than 2 million VND accounts for 17.6%; the income group of 4-7 million VND is the largest one with 40.6%; the group of 7-12 million VND makes up 27.6% and group of over 12 million

accounts for a small rate of 14.1%. Regarding occupation, subjects of survey have many different occupations at a fairly even rate: 14.7% student, 25.3% staff, 21.2% housewife, 15.9% business and 22.9% other occupations. 4.2 Assessment on the customer loyalty towards Big C Ho Chi Minh City 4.2.1 Evaluating scale by Cronbach’s Alpha coefficient Cronbach’s Alpha coefficient is a statistical test used to test the closeness and correlation among observed variables. Cronbach’s Alpha coefficient is firstly used in order to remove unsuitable variables. Cronbach’s Alpha from 0.8 to 1 means that scale is good, while coefficient from 0.7 to 0.8 is usable. In case the research concept is new, or new to the respondents, Cronbach’s Alpha coefficient greater than 0.6 is accepptable. As shown in the Table 4.1 is the analytical results of Cronbach’s Alpha coefficient of service quality scale at Big C HCM City: Table 4.1: Cronbach’s Alpha of “Goods” factor

Corrected Item-Total Observed variable Cronbach’s Alpha if item Correlation deleted New goods are usually 0.488 0.732 offered There is a variety of goods 0.488 0.706 Cronbach’s Alpha = 0.755

(Source: Data processing)

“Goods” factor scale has high Cronbach’s Alpha coefficient of 0.755. We see that if we remove any variable in this factor, Conbach’s Alpha’s coefficient will be reduced. Besides, with the Corrected Item-Total Correlation greater than 0.3, all of the variables are retained because they ensure the reliability of the scale. Thus, the “Goods” factor scale is appropriate for the assessment on the service quality of Big C Ho Chi Minh City.

Table 4.2: Cronbach’s Alpha of “Supermarket display” factor

Corrected Item-Total Observed variable Cronbach’s Alpha if Correlation item deleted Supermarket display techniques are 0.414 0.493 easy to search for products Goods are displayed systematically 0.378 0.523

It is easy to get products 0.349 0.545

The display of goods is eye- catching 0.363 0.535

Cronbach’s Alpha = 0.659

(Source: Data processing)

The scale of “Supermarket display” factor has 4 variables and has Cronbach’s Alpha coefficient of 0.659 and the Corrected Item-Total Correlation greater than 0.3 even it is not much higher than 0.3. However, it is not greatly affected by whether removing that variable or not because all Cronbach’s Alpha coefficients of variables in this factor would be reduced if removed variables.

Table 4.3: Cronbach’s Alpha of “Employee team” factor

Corrected Item-Total Observed variable Cronbach’s Alpha if item Correlation deleted Enthusiastic, caring 0.572 0.646

Knowledgeable about goods 0.501 0.566

Suitable outfit 0.404 0.683

Cronbach’s Alpha = 0.676

(Source: Data processing)

The Table above shows that the “Employee team” factor scale has Cronbach’s Alpha coefficient of 0.676. Additionally, the Corrected Item-Total Correlation is relatively higher than the requirement of being greater than 0.3 only. Cronbach’s Alpha coefficient only increases when removing the factor of “Suitable outfit”. However, the coefficient does not significantly increase. Hence, it will be retained. Factors in the “Employee team” scale constitute the service quality of Big C Ho Chi Minh City. Table 4.4: Cronbach’s Alpha of “Supermarket premises” factor

Corrected Item-Total Observed variable Cronbach’s Alpha if item Correlation deleted Wide aisle 0.322 0.679

Large parking lot 0.525 0.575

Well placed escalators 0.596 0.498

Convenient location 0.385 0.653

Cronbach’s Alpha = 0.668

(Source: Data processing)

“Supermarket premises” factor scale has many variables and has Cronbach’s Alpha of 0.668 along with the Corrected Item-Total Correlation greater than 0.3. It shows that although this factor has many variables, all the variables have close relationship and variables are measured well to assess the “Supermarket premises” factor

accurately which constitutes the service quality of Big C Ho Chi Minh City. Table 4.5: Cronbach’s Alpha of “Supermarket safety” factor

Corrected Item-Total Observed variable Cronbach’s Alpha if item Correlation deleted Good fire prevention system 0.541 0.738

Convenient emergency exit 0.550 0.735

Elevators work properly 0.543 0.737

Luggage lockers are secure 0.567 0.729

Good security guards 0.550 0.736

Cronbach’s Alpha = 0.776

(Source: Data processing)

“Supermarket safety” factor also has pretty high Cronbach’s Alpha coefficient of 0.775; the Corrected Item-Total Correlation is also pretty high and all are greater than required level, which shows that those variables have close relationship to assess accurately the “Supermarket safety” factor. Besides, Cronbach’s Alpha when removing the variables fluctuates around the acceptable value of 0.725 – 0.728; so, the variables in this factor’s scale are retained. Table 4.6: Cronbach’s Alpha of other factors

Corrected Item-Total Observed variable Cronbach’s Alpha if item Correlation deleted Low price 0.326 0.635

Good quality of goods 0.520 0.487

Many additional services 0.374 0.590

Good warranty 0.451 0.533

Cronbach’s Alpha = 0.632

(Source: Data processing)

Like the above factors’ scales, other factors have Cronbach’s Alpha of 0.632 and the Corrected Item-Total Correlation are all greater than required level, which shows 20

that the variables have a close relationship to assess that factor correctly. Besides, Cronbach’s Alpha coefficient when removing variables fluctuates around the acceptable value ranging from 0.487 – 0.635. Thus, the variables in this factor’s scale are retained.

4.2.2 Criteria that influence the selection of supermarket Table 4.7: Most favorite supermarket

Supermarket Frequency Percentage

Big C 138 81.2

Co.opmart 18 10.6

Maximark 14 8.2

Total 170 100.0

(Source: Data processing)

The table above shows that amongst three supermarkets, Big C is most dominant one, making up 81.2%, followed by Co.opmart and Maximark. It means that Big C is dominant and outstanding one in comparison with the other two supermarkets. Table 4.8: Testing the mean of the results of customers’ assessment on the importance of factors when selecting supermarket

Criteria Mean Test Value Sig.

1. Convenient location 3.7176 4 0.000

2. Quality of goods 4.1471 4 0.049

3. Low price 3.9529 4 0.510

4. Many promotion programs 3.6588 4 0.000

5. Enthusiastic staffs 3.6471 4 0.000

6. It is easy to look for sections of 3.5471 4 0.000 goods (Source: Data processing)

Notation: Likert scale: From 1 – 5 levels to assess the levels from not very important to very

important. Hypotheses to test: H0: µ = Test value H1: µ ≠ Test value If Sig. > 0.05: It does not have enough statistical evidence to reject H0 hypothesis If Sig. <0.05: It has enough statistical evidence to reject H0 hypothesis As shown in above result, “low price” factor has sig. = 0.510 (>0.05), so it does not have enough statistical evidence to reject H0 hypothesis, which means that “low price” factor is assessed as important one when customers select supermarket. All of the remaining factors have sig < 0.05, so they have enough statistical evidence to reject H0 hypothesis. Thus, there is differences in assessing the importance of criteria of customers. Values from the table show that the factor of “Quality of goods” is the most important one influencing the decision to select supermarket of customers with the mean of 4.1471. Nowadays, as people’s life improves, they concern more about the quality of the goods that they are using. It is followed by the “low price” factor (with the mean of 3.9529) which also be assessed to have great influence on decision to select supermarket. The third factor that customers concern about is the convenient location of the supermarket (with the mean of 3.7176). Today, most people are busy with their jobs; they are likely to select supermarkets that are close and convenient for them to save time. Hence, the two factors of “Many promotion programs” and “Enthusiastic employees” are considered as pretty important with the mean of about 3.6. At present, supermarkets have the same frequency of promotion programs. Besides, the staffs as well as service attitudes are almost equal amongst the supermarkets. Therefore, the “Many promotion programs” and “Enthusiastic employees” factors are not considered as important in the decision to select supermarket of customers. The remaining factor is “It is easy to look for sections of goods” is considered less important than the above mentioned factors. However, it is also pretty important in making decision to choose supermarket with the mean of 3.5471.

4.2.3 Assessment on the satisfaction of customers with Big C supermarket Table 4.9: Testing the satisfaction of customers with Big C’s factors

Criteria Mean Test value Sig.

1. New goods are usually offered 3.46 3 0.000

2. Variety of goods 3.75 4 0.055

3. Enthusiastic, caring employees 3.16 3 0.000

4. Employees have good knowledge about goods 3.19 3 0.000

5. Suitable outfit 3.40 3 0.000

6. Convenient location 3.81 4 0.056

7. Wide aisle 3.64 4 0.000

8. Large parking lot 3.44 3 0.215

9. Well placed escalators 3.10 3 0.000

10. Supermarket display techniques are easy to search for products 3.56 4 0.000

11. Goods are systematically displayed 3.60 4 0.000

12. It is easy to get products 3.73 4 0.000

13. The display of goods is eye-catching 0.00 3.59 4 0

14. Good fire prevention system 0.00 3.38 3 0

15. Convenient emergency exit 0.00 3.18 3 1

16. Elevators work properly 0.05 3.31 3 7

17. Luggage lockers are secure 0.00 3.49 3 0

18. Good security guards 0.51 3.32 3 0

19. Low price 0.00 3.52 4 0

20. Good quality of goods 0.04 3.64 4 9

21. Many addition services 0.00 3.40 3 0

22. Good warranty 0.00 3.33 3 0

(Source: Data processing)

Test hypotheses: H0: µ = Test value H1: µ ≠ Test value If Sig. > 0.05: It does not have enough statistical evidence to rejecthypothesis H0 If Sig. <0.05: It does not have enough statistical evidence to reject hypothesis H0 According to the statistics above, only factors 2, 6, 8, 16, and 18 have Sig. value > 0.05. Thus, there is not enough statistical evidence to reject hypothesis H0_ most customers agree that the supermarket has variety of goods, convenient location, large parking lot, elevators working well and a good security system. Remaining factors have Sig. value < 0.05, so they have enough statistical evidence to reject hypothesis H0_ there are no basis for customers to agree totally on factors of 7, 10, 11, 12, 13, and 19. The above table demonstrates that customers are most satisfied with the convenient location of Big C with the mean of 3.81. Located at the golden land, right in the heart of Hue City as well as the cross of major roads Hung Vuong – Nguyen Hue – Ba Trieu, it is very convenient for transport. Because of that, it is easy for customers in Hue City and neighboring districts to come to do shopping. This is a very important factor to attract customers of Big C. Another factor that also has high rate from customers is the variety of goods. The mean of this factor is 3.75 which illustrates the satisfaction of customers. We can say

that the types of goods at Big C is very rich and diverse from common to high class. In addition, Big C is still increasing more types to serve customers’ demands. “Well placed escalators” factor is considered normal in assessment with the mean of 3.1. During the progress of survey, we collected some comments from customers about the inappropriate layout of escalators between the second floor and the third floor. Customers who would like to buy food in the second floor must go to the third floor and then come back to the second one. It takes too much time and needs to be reviewed. The security system factor is considered neutral and customers do not care much about these problems because for these factors, customers cannot see their impact until problems happen. Customers do not totally agree on “Low price” factor which has the mean of 3.52. Regarding goods’ price at Big C supermarket, depending on the goods, the price will be lower or higher than that of other markets. Normally, goods with low price are the products that come from the supermarket itself such as eBon, Bakery by Big C, WOW! Good price, Casino and Big C. If “WOW! Good price” is the label of products with low price, Casino is the imported high-class products, then“Big C” brand that the supermarket has just launched is in the mid segment with competitive price to exist along with the appearance of leading brands in the market. Except for “eBon” and “Bakery by Big C” made by Big C itself, “WOW! Good price” and “Big C” are manufactured by Vietnamese enterprises to Big C’s order that is given the top priority in development. Some products provided by other manufactures shall have price equal or even higher than that of other places. To verify the relationship between variables, we will test the homogeneity of the customer groups.

To check whether there is difference in the assessment on the satisfaction with BigC of different customer groups, the analysis method that we are going to use is One Way Anova. However, before conducting this test, we run Homogeneity test to see if there is homogeneity between the group or not. Test result demonstrates that Sig. values (2-tailed) (see appendix) are all lower than 0.05. It indicates that there is not homogeneity between the groups. Hence, Anova is replaced with the non-

parametric Krushkal-Wallis test and Independent Sample Test is replaced with Mann- Whitney test. Notation: Hypothesis: H0: There is no difference in customer satisfaction with Big C between different groups of customers H1: There are differences in customer satisfaction with Big C between different groups of customers

If: Sig.(2-tailed) > 0.05: No basis to reject hypothesis H0 Sig.(2-tailed) ≤ 0.05: reject hypothesis H0 With Sig.(2-tailed) > 0.05 ns symbol (no significance) Sig.(2-tailed) ≤ 0.05: * symbol (has statistical significance) (1): use Mann-Whitney test (2): use Kruskal-Wallis test Table 4.10: Test results of the difference between customer groups with 3 factor groups of goods, employees and supermarket premises

Independent variables Number Factors to assess Gender(1) Age(2) Income(2) Occupation(2)

1 New goods are usually offered Ns * Ns Ns

2 Variety of goods Ns * Ns Ns

3 Enthusiastic, caring employees Ns Ns * *

4 Employee has good knowledge about goods Ns Ns Ns Ns

5 Suitable outfit Ns Ns Ns Ns

6 Convenient location Ns * Ns Ns

7 Wide aisle Ns Ns Ns Ns

8 Large parking lot Ns Ns Ns Ns

9 Well placed escalators Ns Ns Ns Ns

(Source: Data processing)

Table 4.11: Test results of the difference between customer groups with 3 factor groups of supermarket display, supermarket safety and other factors

Independent variable Number Factors to assess Gender Age Income Occupation

1 Goods are systematically displayed * Ns Ns Ns

2 It is easy to get products Ns Ns Ns Ns

3 The display of goods is eye-catching Ns Ns Ns Ns

4 Elevators work properly Ns Ns Ns Ns

5 Luggage lockers are secure Ns Ns * *

6 Good security guards Ns Ns Ns Ns

7 Low price Ns Ns * Ns

8 Good quality of goods Ns Ns Ns Ns

9 Many addition services Ns Ns Ns Ns

10 Good warranty * Ns Ns Ns

(Source: Data processing)

The data on the two tables above demonstrates that: About gender, there is difference in agreement level on the factors of “Goods are systematically displayed” and “Good warranty”. For male or female customers, there will be the difference in their view about how the goods are displayed. Most female customers like the display techniques that are eye-catching and easy to search for products. Meanwhile, male customers tend to like logical, simple and easy methods to

recognize display. Regarding warranty services, unlike female customers, most male customers care much about this because they usually buy products that need good warranty such as electrical goods, machinery etc. About age group, the group is divided into 4 different age groups and the result from above table shows that there is difference in age group regarding assessment on Variety of goods.New goods are usually offered and Convenient location. Each age bracket has different views and judgments about goods. For convenient location, compared with younger persons, the older people like the locations that are convenient and near to their houses. About income, there is difference in assessment on Enthusiastic employees, Luggage lockers are secure and Low price. When they have high income, they will have higher demand than the customers with lower income. Especially, in assessment on employees, the previous test, the mean of employee enthusiasm only get 3.16, not reaching satisfaction level. This shows that Big C employees are not really enthusiastic and caring in serving their customers. In terms of price, there are different opinions on whether a product is expensive among higher-income people and those who have lower income. That is obvious. About occupation, there is difference in Enthusiastic employees and Luggage lockers are secure. Along with different occupation, there will be different views betweenthe employees. Students are usually easy-going when assessing the serving attitudes while people who do business or people with high status in society will have high demand when assessing employees’ attitude.

4.2.4 General perceived quality Table 4.12: General statistics about perceived quality

Frequency Percentage

Very dissatisfied 3 1.8

Not satisfied 14 8.2

Neutral 45 26.5

Satisfied 102 60.0

Very satisfied 6 3.5

Total 170 100.0

Mean 3.5529

(Source: Data processing)

Through collected data shown o Table 4.12, we see that most customers are satisfied with Big C in general, making up 60%. However, the number of those who are very satisfied only accounts for 3.5%. The number of customers who are very dissatisfied is also few. The remaining customers are neutral, making up 26.5%. To increase the satisfaction of customers, Big C should develop its advantages such as variety of goods, convenient location, wide aisle etc. and overcome its disadvantages like escalator location, serving staffs etc. Table 4.13: Independent Sample Test about general perceived quality in terms of customers’ gender

F Sig. T Df p-value

General Equal variances assumed 6.443 0.012 0.456 168 .049 perceiv ed Equal variances not assumed 0.432 120.191 .006 quality

Table 4.14 Value

N Mean

General Male 71 3.5211 perceived quality Female 99 3.1758

(Source: Data processing)

Hypotheses: H0: General perceptions of service quality between male and female customers are equal in total H1: General perception of service quality betweenmale and female customers is not equal in total 29

The above value shows that Sig. = 0.012 < 0.05, so the variances of the two samples are not equal. Next, t = 0.432 and p-value = 0.006 < 0.05, hence there is enough statistical evidence to reject hypothesis H0. It means that there is difference among male and female customers in general perceived quality of Big C supermarket. Generally, female customers often go shopping at supermarket more than male do as shown in the initial statistics about the number of male and female customers in survey samples that is 41.8% and 58.2% respectively. Female customers are likely to go shopping often, especially to buy food and tools that are often used at home. Hence, they are more fastidious and punctilious in assessment than male.

4.2.5 Assessment on the switching barrier against the competitive supermarkets Table 4.15: Assessment on the switching barrier

Factor Very Not Normal Important Very unimportant important important

Current Frequency 5 25 40 75 25 location is more % 2.9 14.7 23.5 44.1 14.7 convenient Mean 3.5294

Changes in Frequency 1 24 72 57 16 display of products % 0.6 14.1 42.4 33.5 9.4 Mean 3.3706

Competitive Frequency 6 3 20 65 76 price % 3.5 1.8 11.8 38.2 44.7

Mean 4.1882

(Source: Data processing)

According to the table above, for the matter of customers switching to other supermarket to go shopping, the barrier that is considered the most important one is “competitive price” with the mean of 4.1882. In reality, during the rise of inflation, when consumer goods’ price increases rapidly, the low price policy that Big C

introduced has really attracted a large number of customers. 82.9% of respondents said that “competitive price” is an important and very important factor when they decide to go shopping at a supermarket. The other remaining two factors, “Current location is more convenient” and “Changes in the display of products”, are rated over normal with the mean of 3.5249 and 3.3706 respectively. When switching from Big C to other supermarkets, the changes in the display of goods are not really an important matter to customers. 57.1% of respondents rated this factor as normal or unimportant one. Consumers quickly and easily become accustomed to the difference in display of goods between supermarkets. Thus, they do not think that this factor is important.

4.2.6 Consumer trend Table 4.16 Response to negativeinformation

Response to negative information Frequency (customer) %

Stopping shopping and switching to other supermarket 32 18.8

Continuing shopping and investigating the information 104 61.2

Not caring about the issue 34 20.0

Total 170 100.0

(Source: Data processing)

When being asked about their response to negative information about Big C such as High price, Quality of products and services are not good, Employees are not attentive etc., 81.2% of consumers said that they do not intent to stop shopping at Big C to switch to other supermarket immediately. The rate of customers who will immediately switch to other supermarket is low (18.8%). Hence, the influence of negative information or rumor to the customers seems not to exist. Today, when intellectual level of people is increased, the consumers become smarter. They are more serious in finding and judging all information they received. Aside from that, they trust in the brand that they are using, and they can make calm and cautious decision themselves. In general, consumers not only satisfy with the 31

products and services they are using but also trust the benefits brought by Big C. Table 4.17: Response to the appearance of new supermarket

Response to the appearance of new supermarket Frequency (customer) %

Switching to the new supermarket immediately 26 15.3

Do shopping in both supermarkets 117 68.8

Not changing and still doing shopping at Big C 27 15.9

Total 170 100

(Source: Data processing)

From Table 4.17, data shows that the numbers of customer who do not care about the new supermarket make up 15.9%. This will influence their loyalty to Big C. 68.8% of customers do not leave Big C for the new supermarket and they decided to do shopping at both supermarkets. The rest of customers who can easily switch to the new supermarket only make up 15.3%. What need to be concerned most is that if the new supermarket shows more advantages, then the risk of losing current customers can totally exceed the estimated number. Table 4.18 Assessment on the loyalty

Strongl Neither Strongl Factor y Disagree agree or Agree y agree disagree disagree

I think I am loyal Frequency 3 27 90 46 4 towards Big C % 1.8 15.9 52.9 27.1 2.4

Avg. Value 3.1235

I will encourage Frequency 3 21 68 71 7 friends and relatives to go shopping at Big % 1.8 12.4 40 41.8 4.1 C Avg. Value 3.3412

In future, I will still Frequency 1 20 65 75 9 buy goods from Big

% 0.6 11.8 38.2 44.1 5.3

Avg. Value 3.4176

(Source: Data processing)

According to the data, Big C’s customers are not really loyal to the supermarket. Only 29.5% feel that they are loyal towards Big C. This is clearly shown that when a new supermarket appears, 84.1% of customers will switch to such supermarket or will do shopping at both. Hence, the mean of 3.1235 of “Loyalty towards Big C” factor is only higher than the normal level. However, nearly 50% of respondents agreed to encourage friends and families to go shopping or will still go shopping at Big C in future. In reality, most customers do not only buy from just one supermarket. However, they are likely to consume products from many different supermarkets, depending on the convenience or the promotion programs that the supermarkets offer. Each supermarket has its own development strategy.Co-opmart keeps its customers through “Loyal customer” or Vip card. Big C strikes the psychology of customers by lower pricing. Although it has no “Loyal customer” like Co-opmart, thanks to large scale, comfortable atmosphere and the variety of goods, the consumers at Big C are still ready to introduce the supermarket to their friends and will continue shopping at this supermarket in future. In the coming time, to increase the loyalty of customers, the supermarket should offer programs to keep customers, thereby increasing its competitiveness on the market. Through the above analytical results, in three supermarkets available in Hue City, Big C is still the one with the most advantages, attracting a large number of customers. According to test result, although there are differences in assessing the satisfaction with Big C of groups of customers (gender, age group, income and occupation), the overall perception of respondents is good and they satisfy with the service quality of the supermarket. This satisfaction with service quality and other factors such as prices, goods quality etc. is the basis to build the loyalty of customers towards the supermarket. However, according to the survey, only 29.5% feel that they 33

are loyal towards Big C. Besides, recommending the supermarket to friends, families or being ready to buy products from the supermarket in future only has average value that is just higher than normal level. Thus, in general, customers are still not really loyal towards the supermarket. This is also clearly shown when only 15.9% of customers agree to continue to consume products at Big C when a new supermarket appear in the city. According to the theory of the proposed loyalty hierarchy, the rate of customers who loyally and wholeheartedly buy products only makes up 15.9%. This rate is as similar as that of bypassing customers (15.3%). Meanwhile, familiar customers and customers who concern about the cost of switching make up a fairly high rate with 68.8%. If Big C does not have attractive programs to attract customers, this group may switch to the new supermarket if they discover such supermarket’s advantages over Big C. Therefore, in the development strategy for the upcoming time, Big C should have more concern about attracting the familiar consumers and customers who concern about the cost of switching so that this group becomes loyal and whole hearted with the supermarket.

CHAPTER 5 CONCLUSION& RECOMMENDATIONS

5.1 Orientation

Through a survey at Big C supermarket, we can see that most customers feel satisfied and have good assessment on the supermarket. However, there are still customers who have not been satisfied with the supermarket in some aspects such as quality of goods, types of goods, serving attitude etc. On the current firm foundation, Big C will implement the following policies: - Consolidating and developing market broadly and stably; continuously improving the quality of the products - Classifying customers; formulating specific sales strategies; conducting flexible and reasonable pricing strategy which is consistent with the market price - Continuing to promote advertisement and product introduction to consumers; maintaining the post-sale support services - Strictly ensuring the quantity and the quality of products when delivering, maintaining and constantly improving the quality management system of Big C supermarket - Regularly checking the service quality; improving the customer service quality,improving skills, professionalism in business and customer services to meet the increasing demands of the market - Enhancing provision of professional training and deeper understanding of the culture and the core values of Big C for employees to develop a responsible and dedicative human resource With a desire to support the development of the Big C to meet efficiently all the demands of the customers, we who are also one of the clients of Big C supermarket would like to receive benefits from the supermarket as well as to propose some solutions to develop the supermarket more modernly and completely. \

5.2. Solutions

Through the survey, we can see that in addition to many strengths, Big C still has some existing difficulties required to be solved, of which price and service quality are the two crucial factors for the loyalty of the customers. This is also our issue of concern. On that basis, our study group has specific following solutions.

5.2.1 Solutions on products

Regarding price: price is the determining factor of the survival of a product. Therefore, when adopting the motto of the supermarket, Big C is committed to “low price for everyone”. The result of the survey on the importance level of the price of the customers reveals that most customers consider price one of the important criteria when choosing supermarket to do shopping. This means that this factor cannot be ignored in the maintenance of the loyalty of customers. One of the biggest strengths of Big C is commitment tactic on the price implemented through: Big C supermarket commits that the price of Big C is always lower than or equal to the price on the product package of the manufacturers. If the price of Big C supermarket is higher than the price on the product package of the manufacturers, Big C will apply the price of the manufacturer together with a coupon worth 10,000 VND for every mistake on pricing (It does not depend on the quantity of products the customer has bought) Big C commits that the unit price will be attached on labels to help customers easily compare or choose products. Big C supermarket designs the yellow promotional stamp to help customers easily recognize the promotional items at Big C supermarket. The expiration date of the promotion program is also on the stamps. Big C supermarket supplies products of WOW brand which is 10% to 70% cheaper than other domestic brands.

However, though the survey shows that despite the low price commitment with a clear objective of Big C, there are still ideas that the price at Big C is often higher than that of other supermarkets such as Co.opMart or MaximarK. This puts a question that whether the price commitment of Big C has been actually implemented or not. We request a further clarification of this commitment! The price of products should be clearly displayed and comply with the commitment. For the promotional items, the PR strategies should be strengthened to provide every customer with the easy approach to them through television advertising, flyers, posters, etc. The supermarket should help customers understand clearly why the price for the WOW brand is only at Big C supermarket and it cannot be found at most of other supermarkets. This does not only make customers believe in this brand but also help the supermarket affirm its position in the mind of its clients to increase the loyalty of customers. For food safety and hygiene, nowadays food safety and hygiene is crucial to most meals of every family. However, it is a noticeable fact that the food quality remains a problem for society. In order to meet the demand of food safety and hygiene, people come to supermarkets with the hope of finding more safety for themselves and their family. Additionally, the biggest challenge faced by Big C is to have a safe and perfect supply system to meet the demand of both quantity and quality. Over the years, when working with the clean food suppliers such as safe vegetable suppliers in Da Lat, there are still many problems in food selection and transportation, which lead to the increase in prices of clean food without guaranteed quality. Thus, Big C needs to improve the food quality and safety constantly, simultaneously puts more emphasis on the food preservation and ensures the best products for customers.

Some solutions to solve the problems of Big C:

The division in charge of food safety and hygiene of Big C supermarket is responsible for protecting the health of consumers with four objectives: To ensure all the products displayed at Big C supermarket to be in compliance with the laws of Vietnam

To keep strict control in factories with the support of a leading company operating in the field of checking, verification, testing and certification To apply the standards of food safety and hygiene into the operational processes To organize training courses for Big C employees

Infrastructure. The design of supermarket guarantees the openness and modernity. The fresh food is preserved in special refrigerated systems of which the temperature is adjusted appropriately. The specialized equipment are imported from France and periodically maintained. Training To conduct medical exam for employees periodically to ensure the eligibility to work Various training courses are suitable for different levels of employees in order to improve the awareness of food safety and hygiene. Process The process of hygiene – disinfection are set up and applied in all the stages of food processing to ensure a modern and safe production environment. The supermarket guarantees personal hygiene, hygiene in food processing area, hygiene in equipment of hygiene – disinfection. The supermarket complies with food preservation process, input quality assurance process, chemical safetyprocess. Products The supermarket establishes necessary requirements for the quality of various items. Regarding the fresh food, the suppliers must meet the requirements for quality, packaging, preservation and transportation. Regarding the industrial commodities, all the products must have quality publication records, meet the requirements for labeling, preservation and transportation.

Regarding cosmetic goods, every product must have quality publication record (quality and safety criteria etc.) to meet the requirements for labeling. Inspection The supermarket periodically brings products to independent laboratories to test the suitability of the products to the standardspublished. The supermarket regularly assess the environment for food processing such as water, air, food contacting surfaces, etc.

5.2.2 Solutions on service quality

For meeting the need of the nearest supermarket, currently there are ten locations of supermarket and above across the country which are mostly in the center of big cities. The purpose of this is to attract a large number of customers.

However, the expansion of supermarket system at some other locations is still the issue of concern of Big C in order to increase revenue and the number of customers and more importantly, to have the coordination among these locations which facilitates the price and response to the demands of customers. Besides, Big C should also organize mobile sales events to introduce goods to the areas far from the city center. This helps to meet the demands of customers better, increase the revenue as well as strongly promote the brand of Big C.

The coupons: the supermarket implements the programs such as Personal coupon: practical gifts for the one you love Attractive price discounts to encourage consumers - Free delivery: This is one of the services which receive pretty good assessments from customers of Big C. However, at the moment, the supermarket applies free delivery in the following cases only: Free delivery for the orders with the value of 200,000 VND and above in the Big C supermarkets in the South and the center. Free delivery for the orders with the value of 500,000 VND and above in the Big C supermarkets in the North. 39

Free delivery for the orders with the value of 300,000 VND and above in the Big C supermarkets in VinhPhuc and Nam Dinh Provinces. Non-delivery of fresh food, ready-made meals, frozen goods, buttermilk (because such products need to be stored in special conditions) Therefore, in order to improve the effectiveness and the ability to meet demands, Big C needs to loosen its conditions of delivery for customers to facilitate the supply of products. - Free buses: This service brings Big C a significant amount of customers from the neighboring areas of cities. However, actually, it still does not meet all the needs of customers. Thus, Big C needs to expand its bus routes to more areas and increase the number of bus lines. - Human resource policy: It is necessary to have a recruitment and training process which is reasonable and has clear standards in terms of costumes, communication with clients and a proper respect to customers. After making regulations, it is required to monitor carefully its staffs to ensure the compliance of the employees and give reasonable rewards and punishments. Establishment of loyal customer program: Currently, the supermarkets like ThuanThanh or Co.opMart have had their loyal customer programs which provide many incentives to their loyal clients. Such programs do not only build customer trust but also promote their brand that attracts more customers. Therefore, if Big C would like to be able to compete with the others, it should make a reasonable strategy to retain long-term customers and attract new customers. The survival and the development of Big C shall depend on it.

5.3 Conclusion

Through the research on the topic “Assessment on the loyalty of customers at Big C supermarket – Hue City, we have drawn some conclusions as follows:

The ultimate objective of any marketing strategies is to create the loyalty of customers to the brand. Attracting new customers through the loyal customers is more effective. Besides, it is needed to have something new, impressive and different to attract consumers. The loyal customers are important because 80% of profits come from 20% of the number of the loyal clients (known as the 80-20 rule).

As the latest supermarket in the market of Hue City, however, Big C supermarket has a rapid growth. The market share of Big C is continuously increased and Big C has become the most favorite supermarket to consumers.

 Big C supermarket – Hue City is considered to have low price, plenty of promotional programs, good services, etc. which satisfy most of customers.

There are many barriers to the consumers in Hue City in switching supermarkets, but the most important things are the factors of price, location, etc. Therefore, Big C should pay more attention to such factors to retain customers.

 When being asked, most customers confirm that they will go shopping at Big C and recommend it to their friends. This shows that Big C is pretty successful in building the trust of customers.

5.4 Recommendations

For researchers There should be further researches on the loyalty to identify the most influential factors towards the loyalty of customers, thereby giving specific solutions for every factor. There should be further researches on the barriers to switching supermarkets of customers.

For the competent authorities in Hue City

Competent authorities should facilitate the licensing procedures for the PR, advertising programs, fairs displaying and selling goods at the areas far from the city center, etc. Competent authorities should facilitate the expansion of parking lot of the supermarket to serve customers better at public holidays, etc. For Big C supermarket – Hue City: The supermarket should improve the quality of all the aspects of the supermarket to enhance the loyalty of customers. The supermarket should strengthen its loyal customer policies to retain its current clients. The supermarket should effectivelyperform the recruitment to have qualified workforce. Sales staffs also play an important role in selling goods, so the supermarket should put emphasis on recruiting such staffs. The supermarket should pay more attention to marketing, budget for this activity. Hue citizens are tending to change their habit to do shopping at supermarkets. This is the time for Big C supermarket – Hue City to strengthen its marketing activity to attract customers. The supermarket should expand the bus route of Big C to more areas to serve the customers in remote areas that is also a way to promote the brand. Moreover, this bus route can give much support to pupils and students in travelling which makes a good impression on customers. The supermarket should complete the organization of departments system, build specialized sub departments. The supermarket should establish effective communication channels between the enterprise and the customers to receive their feedbacks which help to improve the quality of the supermarket. Additionally, this may help the supermarket answer the inquiries of customers to avoid bad reputation of the brand.

REFERENCES

A Study of Knowledge Alliance Performance Methodology Through Alliance Capabilities. (2007). International Journal of Computer Science and Network Security, 155 - 185. Archdeacon, T. J. (1994). Correlation and Regression Analysis: A Historian's Guide. London: Wiscosin System. Becker, B. and Huselid, M. (2006). Strategic human resource management: where do we go from here. Journal of Management, 898-925.

Cavusgil S.T. and Das A．. (1997). Methodological issues in empirical cross-cultural research : a survey of the management literature and a framework. Management International Review, 37, 71-96. Chen, L H . (2008). Job satisfaction among information system (IS) personnel. Computers in Human Behavior, 105-111. Donald, P M & Pandey, S K. (2007). Finding Workable Levers over Work Motivation. Administration & Society, 803-832. Ghauri, P. & Gronhaug, K. (2010). Research Methods in Business Studies. . Harlow, England: Pearson. Gorsuch, R. L. (1983). Factor Analysis. Hillsdale: NJ: Erlbaum. Hackman, R.& Qldham, G. (1975). A New Strategy for Job Enrichment. California management Review, 17(4), 57-72. Herzberg, F.I. (1987). One more time: How do you motivate employees. Harvard Business Review, 65(5), 109-120. Kim, J. O., & Mueller, C. W. (1987). Introduction to factor analysis: What it is and how to do it. Beverly Hills. Lambert, E. G. (2004). The Impact of Job Characteristics on Correctional Staff Members. Prison Journal, 34-37. Legge, K. (2005). Human Resource Management Rhetorics and Realities. London: Palgrave.

Lewin, K., Liippit, R. and White, R.K. (1939). Patterns of aggressive behavior in experimentally created social climates. Journal of Social Psychology, 271-301. Locke, E A. (1976). The nature and causes of job satisfaction, Handbook of industrial and Organizational Psychology. Chicago: Rand McNally. Locke,E.A. (1976). The nature and causes of job satisfaction. Chicago: Rand McNally. Maslow, A. H. (1943). The Dynamics of Psychological Security-Insecurity. Character and Personality, 10, 331-344. McClelland, D. (1988). Human Motivation. Cambridge University Press. Nunnally, J. C., & Bernstein, I. H. (1994). Psychometric theory. New York: McGraw- Hill. Peterson, R. A. (1994). A meta-analysis of Cronbach’s coefficient alpha. Journal of Consumer Research, 381-391. Porter L W & Lawler E E. (1968). Managerial Attitude and Performance. Irwin Dorsey. Purcell, J. and Hutchinson, S. (2007). Front-line managers as agents in the HRM- performance causal chain: theory, analysis and evidence. Human Resource Management Journal, 3-20. Rhoades, L. & Armeli, S. (2001). Affective commitment to the Organization: the contribution of perceived organization Support. Journal of Applied Spychology, 86(5), 825-836. Robert Kreitner, R, & Kinicki, A. (2007). Organizational Behavior. McGraw-Hill. Schuler, R.S. , Budhwar, P. and Florkowski, G.W. (2002). International human resource management: review and critique. International Journal of Management Reviews, 4(1), 41-70. Schwartz, S. (1988). From Protestant ethic to obsession-compulsion job involvement as a moderator of the effects of job scope on job satisfaction. Cornmell University.

Documents from the website www.Bigc.vn

Institute for Trade, Ministry of Commerce (2002), Art modern retail business, Publisher Statistics, Hanoi, 2002.

Scott, K. D., & Taylor, G. S. (1985). An examination of conflicting findings on the relationship between job satisfaction and absenteeism. Academy oj Manageme'lt journal, 599-612.

APPENDIX QUESTIONNAIRES

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Dear respondents, I am doing my final thesis. Your comments are very important for me to complete this thesis. Your information will only be used for the purpose of research and it must be kept confidentialif you participate in answering this questionnaires. I look forward to receiving your support. Sincerely thank!

CONTENT Question 1:Which one in the three supermarkets belowin Ho Chi Minh City do you like most:  Big C  Co.opMart  Maximark

Question 2:How important are the criteria for your choice about supermarkets:

Criteria Totally Unim- Neutral Impor- Totally

Unim- -portant -tant Impor-

-portant -tant

Convenient location

2. Quality of goods

3. Low price Many 4. promotional

Programs

5. Enthusiastic staff s

It is easy to get products

Question 3:Which level of agreement do you have on the following statements about

Big C supermarket:

(1) Totally disagree (2) Disagree (3) Neutral

(4) Agree (5) Totally agree 46

Commodities 1 2 3 4 5

7. New goods are usually offered

8. Variety of goods

Employees 1 2 3 4 5

9. Enthusiastic, caring employees

10. Employees have good knowledge about goods

11. Suitable outfit

Supermarket premises 1 2 3 4 5

12. Convenient location

13. Wide aisle

14. Large parking lot

15. Well placed escalators

Supermarket display 1 2 3 4 5

16. Supermarket display techniques are easy to search for products 17. Goods are systematically displayed

18. It is easy to get products

19. The display of goods is eye-catching

Supermarket safety 1 2 3 4 5

20. Good fire prevention system

21. Convenient emergency exit

22. Elevators work properly

23. Luggage lockers are secure

24. Good security guards

Other factors 1 2 3 4 5

25. Low price

26. Good quality of goods

27. Many addition services

28. Good warranty

Question 4:What is your general perceived quality of Big C Ho Chi Minh City?

Totally Dissatisfied Neutral Satisfied Totally dissatisfied satisfied      Question 5:If hearing a bad information about Big C, your response will be:  Not going shopping at Big C and switching to another supermarket  Going shopping at Big C and getting more information  Paying no attention to that information Question 6:If there is another supermarket appearing in Ho Chi Minh City market, your response will be:  Immediately switching to the new supermarket  Doing shopping at both supermarkets  Not change your mind and continue to be loyal to Big C

Question 7:Please kindly tell me the importance (1->5) of the barriers when switching to other supermarkets:

(1) Totally unimportant (2) Unimportant

(3) Neutral (4) Important

(5) Totallyimportant

Barriers 1 2 3 4 5

29. The location of current supermarket is more

convenient.

30. The changes in the

display of commodities.

31. Competitive price

Question 8:What is your level of agreement on the following statements:

(1) Totally disagree (2) Disagree (3) Neutral

(4) Agree (5) Totally agree No. Statements 1 2 3 4 5 32 I think that I am loyal towards Big C Supermarket. 33 I will encourage my friends and relatives to go shopping at Big C supermarket. 34 In future, I will still buy goods from Big C

Question 9:What do you want Big C to improve in return of your willing to do shopping at Big C supermarket? ......

PERSONAL INFORMATION

1. Please kindly tell your gender:  Male  Female 48

2. Please kindly tell which one of the following age groups do you belong to:  below 22  22-30  30-40  above 40 3. Please kindly tell your monthly income:  < 4 million 4-7 million 7-12 million  >12 million VND VND VND VND 4. Please kindly tell your current job:  Student  Office staff  Housekeeper  Manager  Others

Thank you for taking the time to complete this questionnaire.