A Multidimensional Customer Value Model for the High Fashion Retail Industry

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A multidimensional customer value model for the high fashion retail industry Elmarie Strydom 201048840 Thesis submitted in fulfilment of the requirements for the degree PhD in Marketing Management in the Faculty of Management at the University of Johannesburg Johannesburg Supervisor: Prof Daniel J Petzer Co-supervisor: Prof Christine F De Meyer October 2014 1 ACKNOWLEDGEMENTS I would like to extend my sincere gratitude to every individual who has made the completion of this study possible. A very special thank you is extended to: My Heavenly Father from whom I constantly draw strength and wisdom. His nature of grace and hope gave me the courage to persevere in times when everything seemed too much to bear. My amazing husband, Gerhard, who has been my constant companion throughout my academic journey. Thank you “my lief” for all the cups of coffee and cooked meals. Thank you for your understanding and support especially when I wanted to give up. You are my one true inspiration! My Mom and Dad. Thank you for all your prayers and encouragement. You were the first influence in my life that introduced me to academic studies and your unwavering support has carried me all my life. My supervisors and mentors, Prof Danie Petzer and Prof Christine De Meyer, who never stopped guiding me with both academic and emotional support. Thank you for your incredible patience and leadership. Thank you, Prof Petzer for believing in my study from the start. Your professionalism and knowledge amazes me still. Thank you for the numerous telephone calls just to encourage me. Your encouragement made me believe in myself and was crucial to my success. Thank you, Prof De Meyer for your assistance and perseverance. Thank you for being so meticulous and dedicated throughout my study and for believing in me and in my ability. Elsabeth Marnitz for your hard work with the language editing and for always being willing to assist. Your expertise contributed to the success of my study. The third year and honours students from the Department of Marketing of the University of Johannesburg for assisting with the distribution of the questionnaires. Without you this study would not have been possible. STATKON, for conducting all the statistical analysis. Thank you Dr Jurgen Becker for your assistance and patience. i Acknowledgements Petro Beukes who assisted me with the final formatting of my completed document. Your friendliness and kindness was overwhelming. Thank you! To every single one of my fabulous friends and family who stood by me even when I was not always available. Your friendship is very precious to me. ii ABSTRACT As more retailers gain access to similar technologies, information and processes, it is becoming increasingly difficult to establish a sustainable competitive advantage in the marketplace, ensure customer satisfaction and encourage repurchase intention. This is especially true for high fashion retailers, since their higher margin customers have greater expectations to receive value from these high fashion retailers. To succeed in a highly competitive marketplace, high fashion retailers must become adept not just at providing quality products, but also at providing value to their customers. Only those businesses that truly offer the value that customers want and expect, remain competitive in the long term and are able to increase customer satisfaction levels. Higher levels of customer satisfaction leads to improved repurchase intention. It is therefore important for high fashion retailers to ensure that they offer value to their customers. Despite research undertaken in customer value, much debate still exists as to what contributes to customer value and what the relevant customer value dimensions are. Customer value is of managerial interest to high fashion retailers, as these retailers need to identify the dimensions they should focus on to increase the value they are delivering to their customers in order to obtain or retain a sustainable competitive advantage. Customer value leads to customer satisfaction and customer satisfaction in turn is a strong indicator of repurchase intention. This study therefore focuses on uncovering the concept of customer value, with specific emphasis on determining the underlying customer value dimensions from the perspective of the customer shopping at high fashion retail stores. The aim of this study is to propose a multidimensional model of customer value for high fashion retailers, including the interrelationship between customer value, customer satisfaction and repurchase intention. In order to test the theoretical model of customer value, customer satisfaction and repurchase intention an empirical investigation was undertaken. The research design in this study consisted of two phases. Qualitative, exploratory research was utilised as part of the initial phase of the research. The primary research design utilised is a descriptive design using quantitative methods to collect primary data. A variation of the interviewer administered mall-intercept survey was used. A structured questionnaire was designed iii Abstract and distributed to achieve the empirical objectives of the study. For the purpose of this study, a non-probability multistage sampling approach was used for the primary, descriptive research design. In order to select shopping centres containing high fashion retailers in Gauteng, South Africa, judgmental sampling was the chosen sampling technique. For the second stage, the convenience sampling technique was chosen to select customers of high fashion retailers. Of the selected 700 high fashion customers who have purchased clothing and/or accessories from a high fashion retailer most recently in the last year, 620 were included for analysis. Initially descriptive statistics were used to analyse data. The descriptive statistics were followed by an exploratory factor analysis (EFA) conducted to identify the underlying factor structure of customer value. This was followed by a confirmatory factor analysis (CFA) conducted for each of the three constructs of the study. Structural equation modelling (SEM) was utilised to determine and measure the interrelationships between the three constructs of the study, namely customer value, customer satisfaction and repurchase intention. Eleven customer value dimensions were identified from the literature and the exploratory research phase. The results indicate that all eleven of the customer value dimensions are evaluated favourably by high fashion customers. Five customer value dimensions namely sacrifice value, service value, store value, experience value and status value realised statistically significant paths to customer satisfaction. Only sacrifice value realised a statistically significant path to repurchase intention. The results furthermore reveal that customer satisfaction has a significant and positive influence on repurchase intention with a large direct effect. The main recommendations of the study indicates that high fashion retailers need to focus on sacrifice value, service value, store value, experience value and status value in order to increase their customers’ satisfaction levels. High fashion retailers also need to focus on sacrifice value if they want to increase repurchase intention. Furthermore, higher levels of customer satisfaction will improve the repurchase intention of high fashion customers. iv TABLE OF CONTENTS ACKNOWLEDGEMENTS ............................................................................................... i ABSTRACT ………………………………………………………………………....iii CHAPTER 1: INTRODUCTION AND ORIENTATION ................................................... 1 1.1 INTRODUCTION ........................................................................................ 1 1.2 BACKGROUND OF THE STUDY .............................................................. 2 1.2.1 Overview of the fashion and high fashion retail industry ............................. 2 1.2.2 Customer value .......................................................................................... 4 1.2.2.1 Customer value within the marketing context ............................................. 5 1.2.2.2 Conceptualising customer value ................................................................. 5 1.2.2.3 Customer value characteristics .................................................................. 7 1.2.2.4 Customer value perspectives and customer value dimensions .................. 7 1.2.3 Customer satisfaction and repurchase intention ......................................... 9 1.2.4 Interrelationship between customer value, customer satisfaction and repurchase intention .......................................................................... 10 1.3 PROBLEM STATEMENT ........................................................................

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