National Cheng Kung University Institute Of

National Cheng Kung University Institute of International Management Chinese customers’ satisfaction and dis satisfaction with service of chain drugstores in Taiwan Final Project Report Qualitative Research Method Instructor: Prof. James Stanworth Students: Tim Lin (RA7081185) Vivienne Wang (RA7091041) Bess Chen (RA7091130) June 26, 2021 CONTENTS INTRODUCTION 4 1.1 Research Background 4 1.2 Research Questions 5 LITERATURE REVIEW 5 2.1 Customer Satisfaction 5 2.2 Chinese Customers 6 2.3 Taiwan Chain Drugstore 6 METHOD 7 3.1 Methods 7 3.2 Sampling Plan 8 3.3 Time Schedule 8 DATA COLLECTION AND ANALYSIS 8 4.1 Interview Guideline 8 4.2 Data collection 10 4.3 Coding, Category, and Findings 11 CONCLUSIONS 16 REFERENCES 18 APPENDIX 19 APPENDIX A: INTERVIEW GUIDELINE 19 APPENDIX B: TRANSCRIPTS WITH CODING 21 Interviewee 1 21 Interviewee 2 23 Interviewee 3 26 Interviewee 4 29 Interviewee 5 30 Interviewee 6 32 Interviewee 7 33 Interviewee 8 36 APPENDIX C: CATEGORY OF CODING AND LABELING 41 2 3 1. INTRODUCTION 1.1 Research Background Since Taiwan launched the National Health Insurance in 1995 and Taiwan’s population ag eing has been increasing year by year. According to the aging index (the ratio of the number of eld erly people to the number of young people) calculated by the Ministry of the Interior in 2020, sinc e 2017 has been more than 100% (representing that the number of elderly people is more than the number of young people), it is expected to continue to climb to 127.8% by the end of 2020. In addi tion to the survey of household consumption items conducted by the Executive Yuan in 2018, the p roportion of health care expenditures has increased to 15.9%. Therefore, the research to understan d consumer satisfaction with pharmacies and related factors that affect satisfaction. Taiwan drugstore channel has been entering the market since 1990. In order to meet the mar ket changes and competition, the drugstores have begun to adjust and integrate its service items, an d it is a chain that pursues health, beauty, life, and convenience. Drugstore gradually becomes a co mpound chain operation. There are a lot of different systems like foreign chain systems (such as W atsons and Borden chain drugstore); domestic chain systems (such as Cosmed, Yes chain and other chain drug stores) have entered the market; in addition, there are mutual strategic alliances betwee n pharmacies System (such as YMCA, Best, etc.); and the transformation from a traditional single- store drugstore to a chain drugstore (such as Mecome, Tin Tin, Bridge, Chyuan and Wholecome ch ain drugstore, etc.). The successive establishment of drugstores have brought Taiwan's drugstore ch annel industry into a new era. The transformation of the drugstore is not only allowing consumers to have one-off purchase s of services but is willing to take more time to the drugstore’s consumption behavior. The drugs tore has begun to use beauty and health as their main appeal professionally, and they are also awar e that the population is gradually aging. Health care for the elderly has also become an important p art. Some drugstores have begun to set up a special zone for "Nursing Care Products for the Elderl y", and some pharmacists have begun to attend classes in health units to obtain licenses for "home care"; in addition, there are health insurance drugs under the universal health insurance system. Th e bureau pays more attention to the "professional" service image of pharmacists (students) personal ly practicing, so that people who come to consult and fetch medicines are more trustworthy. Then t he drugstore transformed into a chain business, integrating resources with chain operations, and sh aring resources by saving costs, economies of scale will be achieved, and operational performance will be improved. In the drugstores, there are open shelves and spacious store spaces, so that customers are wil ling to come to consume and obtain the latest products and professional information; in professiona l consultation, drug stores have successively launched independent consultation spaces (Such as Co smed’s fitness consultation room, Watson's health center) provide consumers with one-by-one cu stomized consulting services. It can not only improve customer satisfaction and increase customer l oyalty, but also increase customer unit price and sales margin. In addition, drug stores used moder n information technology to introduce a membership system and conduct member data analysis to understand consumers' consumption behaviors and preferences. 4 Drugstores are facing different changes and challenges in the business systems, whether it is the rapid exhibition stores of foreign chain drug stores (such as Watsons), local consortium chain d rug stores (such as Cosmed, MOMO cosmeceuticals) and other regional drugstores that seize the c osmeceutical market (Such as Tin Tin drugstore, Tokyo drugstore, Bridge Drug, Woodpecker drug store), etc., have caused fierce competition among peers. The market with huge business opportunities and fierce competition, the operation of the dru gstore in tangible conditions such as price transparency and convenience of location, the strategy h as also been upgraded to intangible services. The pursuit of customers becomes the ultimate goal o f enterprises. Due to the rise of consumer awareness, service quality directly affects consumers’ f eelings. Consumers’ perceptions are no longer limited to the tangible quality of the product, but f rom the traditional design, procurement, production, sales, after-sales service, and the overall imag e of the company. Customer value cannot be ignored; therefore, how to achieve customer satisfaction, and then maintaining loyalty is definitely an important issue to the enterprises. Based on the above discussio n, we’re aimed to understand the factors of customer satisfaction in chained drug stores. 1.2 Research Questions Our research question is “how Taiwanese people perceive satisfaction or dissatisfaction in chain drug stores from consuming experience?” Taiwanese people usually visit chain drug stores when they need something about medical or cosmetic products. There will be many interactions du ring the process of buying the products. For example, customers would ask the employee’s help t o find the product they need. Maybe, the customers feel happy because they get full support from t he employee. However, the emotional feeling may not reach the degree of satisfaction, because cus tomers may think it’s the employee’s duty to serve them. Another assumption is that the custo mers may have expectations about the products or services from previous experience. If the perfor mance of the products or services match the customer's expectation, it would make the customers f eel satisfied. And, that would be worth understanding how customers think about it. Hence, we’ d like to know what people think about the satisfaction or dissatisfaction in a chained drug store. 2. LITERATURE REVIEW 2.1 Customer Satisfaction To understand what makes customers satisfied or dissatisfied with service is absolutely crit ical to the service enterprises. Customer satisfaction is generally associated with favorable outcome s from customers’ consuming experience. Satisfaction is also a measure of how happy a custome r is after finishing a consumption. It may simply be related to a product purchasing, a service deliv 5 ering, or the comprehensive overall store atmosphere. With satisfaction, customers will keep a goo d memory as a basic foundation, which creates customer loyalty to the particular store or brand, an d brings the following continuous repurchasing behaviour. On the contrary, with dissatisfaction, cu stomers may switch the consumption to another store or brand. Furthermore, several survey-based studies of service satisfaction suggest that the human int eraction component of service delivery is essential to the determination of satisfaction or dissatisfa ction. Other researchers have found the human interaction component to be of importance in evalu ating professional services, medical services, and retail outlets. Similarly. experimental studies of s ervice satisfaction also have uncovered the importance of particular contact employee behaviors. (B itner et al., 1990) This means, human interaction between employee and customer is also critical to create customer satisfaction. Therefore, through this study we aim to know “how people perceive their satisfaction or d issatisfaction of service in chain drug stores?” What are the critical attributes that create customer satisfaction, particular for chain drugstore business in Taiwan? 2.2 Chinese Customers Most studies of service encounter or dimensions, such as SERVQUAL (Parasuraman et al., 1988), use western culture as a research context. A few studies have focused on Chinese customer response to service offers (Imre et al., 2002)(Stanworth et al., 2007). Chinese market of service ind ustries is starting to get attention from the world. The dimensions for assessing Chinese customer s’ perception is different from western ones. There are no one-size-fits-all rules to apply in servic e encounters under different culture contexts. Chinese customers are more and more capable of purchasing power in this globalwide inter national village. Most worldwide brands or multinational businesses all see Chinese market as an i mportant target to earn their positions in it. While the Chinese are globally significant, we lack und erstanding of the service quality of these customers (Stanworth, 2015), as well

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