Customers Expectations, Perceptions and Zone of Tolerance towards Retail Services and Products - Research Paper Example

Part 1

1.1 Back Ground of the study

The quality of service given to the customers is very crucial in today’s competitive business environment. This is due to the fact that customers form their perception on the quality of service based on the satisfaction they get from a given business. Services can be given by any business, with the primary aim of satisfying the customer’s needs. Retail business has a major purpose of providing services to their customers. Retailing can simply be defined as the process of bringing together of clients or customers with finished products distributor in the supply chain, usually involving direct contact between the final customer and the retailer. Now days the retail services are mainly done online where the customer makes an order for a given product or service and the retail bring it to him/her.

1.2 Research Problem and objectives

Despite the fact that retails and online business being so common in the digital world there are usually cases of customer dissatisfaction. Customers can be disappointed if the delivery is not made in time, if the cost of delivery is very high or if they encounter an arrogant retailer. This present the main research problem which is the customers’ expectations in retail business is usually anticipated to be met by their service provide. The objective of this research is to measure the customers’ expectations on the retail services and products. To determine the general measure of tolerance in various retail services and to determine the exiting gap between the customers’ expectations and their perception of services in all retail services.

1.3 Research Questions

• What are the customers’ expectations on the retail services and products?
• What are the general measures of the customers’ levels of tolerance in the retail products and services?
• What is the existing gap between customers’ expectations and their perception of services in all retail services?

1.4 Research Hypothesis

Null Hypothesis (Ho): Customers have low expectation, perceptions and level of tolerance towards retail service and products.

Alternative Hypothesis (H1): Customers have no low expectations, perceptions and level of tolerance towards retail services and products.

2.0 Related Literature

2.1 Quality of Service

The quality of service is measured by how appropriately the level of service offered to the clients meets their expectations. High quality service requires that the customer’s expectations are fully mate by the retailer (Weitz and Wessley, 2002 pg. 340). The quality of delivery should be consistence in terms of daily delivery performance. For a retail business to be able to maintain their current customers while at the same time attracting new ones.

2.2 The Zone of Tolerance

The zone of tolerance refers to the level to which the customers are able to recognize and are willing to accept variances in the service they have requested for. Usually customers assess the services on the grounds of their desire and what they regard as being acceptable. This level to which a customer can accept a service as being satisfactory is the zone of tolerance (Zeithaml et al, 2009 pg. 151). The customers therefore have a certain level of satisfactory service expectation. When the retailers give services that are below this then they get frustrated and experience a state of dissatisfaction with the retailer. If the retailer’s services are above the level of tolerance customers will respond well to the business. However if the service falls under the customers level of tolerance they are likely to draw away from that service provider (Saligiman, 2012 pg. 23).

Important to note is that customers differ in their tolerance zones. There are customers with narrow tolerance zones where as others have a wide tolerance level. The customers’ level of tolerance can be influenced by a number of factors such as the cost of the retailing product and service, the service dimension and the prior knowledge about the service.

2.3 Service Quality Model

The gap model is very important as far as evaluation of the customers’ expectations and perception about a retail business is concerned. It is a model that assists in identifying contributing factors to the client and the retailer gap and gives recommendations on the strategies that a business can apply to maintain a focus on customers. The customers’ perception of the overall quality of service emanates from making comparison of the expectations and perception on the different components of the products and service (Zeithaml & Bitner, 2003 pg. 27).

The presentation of the overall quality is gap 5 which is determined through subtraction of the expectations from the perceptions. This model gives a lot of emphasis on the significance of shutting down the gap between expectations and perception by first understanding what the customers want. This makes the business to identify other gaps that the business has to close in order to provide high quality services that will enhance customers’ satisfaction.

Part 2:

3.0 Methodology

3.1 Data Collection procedures

A sample population of people 30 people who frequently uses the retail products and services were selected using non-probability random sampling. The non-probability sampling was applied because it is convenient and enabled the researchers to identify a sample population who had used the retail services and products. The selected people made the respondent for the questionnaires that had already been designed. The researchers explained to the respondents both orally and in writing that feeling the questionnaire was voluntary and that the only purpose of the questionnaires is to be used in the analysis of research. The respondents were also assured of their privacy will be protected and nobody will get to know any information about them from the questionnaires.

3.2 Survey Instrument Design

The survey instrument used in data collection was questionnaires. The questionnaire had a total of 21 questions. The first three questions were on the demographic back ground. These questions were included in order to determine if the demographic variables had affected the expectations and the perceptions of the customers. The other questions measured the customers’ level of satisfaction, their expectations, and their zone of tolerance as far as the retail business was concerned. The questions were structured in simple sentences that are easy to understand in order to accommodate all the respondents and avoid ambiguity (IAROSSI, 2005, pg. 12). In all the questions multiple choices were given which the customers could select from. The multiple choices also made it easy for the researcher to analyze the collected data using statistical methods.

3.3 Application of the SPSS

Nonparametric method was applied in the analysis of the questionnaires using SPSS. To start with each of the respondents was given a single row in the data sheet. Similarly each of the questions was written in a column. The responses were stored as numbers and the value labels ascribed the text labels to each of the numbers. The researcher was then able to look into the values and see how they relate. Since all the questions were ‘tick only one’ type simple bar graphs and pie charts were selected as the best way of data presentation (Buckingham, Alan and Saunders, 2004 pg. 32).

Part 3:

Data Analysis

Analysis of the research findings was carried out using Statistical packages software for social sciences. The study sample group constituted a total sample size of 30 persons (N=30). Questionnaires were given out to each and every respondent to fill appropriately by ticking. There were three major assumptions that governed the survey procedure.

The population sample characteristics

First, the sampling in this research study was conducted on a randomly selected sample population of 30 respondents (N=30). All the respondents’ results and responses were regarded to be independent. Randomization of the response questionnaires was also put into consideration to ensure that the statistics associated with the survey sample are unbiased for the entire population. The various retail attributes were used to evaluate customer perception.

Since these research findings were quantitative in nature, the data was coded appropriately in SPSS. The survey questions were conducted to investigate customers’ perception about four retail shops. The four retails firms were Tesco, Aldi, Sainsburys, Asda and other relevant retail shops.

The primary objective of the research study was to investigate customers’ perception. It involved a series of interrelated factor or variables that are useful in analyzing the overall performance of the retail firms. The questions stated in the questionnaire were used to develop the variables in investigating operation of the retailers. Some of the tests employed were targeted to investigate what the respondents perceived about the shops that they obtain product and service quality.

Descriptive statistics

We used the general descriptive statistics to make general summary statistics of the sampling population characteristics. From the results below, the mean number of respondents’ age below 20 years are 1.00 and a standard deviation of 0.0000. Similarly, the mean number of age 20-30 was 0.500 and 0.66 for respondents’ age above 40. This is an implication that a percentage of 66.7% of the total respondents were aged above 40 years.

Descriptives

N

Mean

Std. Deviation

Std. Error

95% Confidence Interval for Mean

Lower Bound

Minimum

Upper Bound

Maximum

self_cko

under 20

20-30

30-40

above 40

Total

2

22

3

3

30

1.0000

.5000

.6667

.6667

.5667

.00000

.51177

.57735

.57735

.50401

.00000

.10911

.33333

.33333

.09202

1.0000

.2731

-.7676

-.7676

.3785

1.0000

.7269

2.1009

2.1009

.7549

1.00

.00

.00

.00

.00

1.00

1.00

1.00

1.00

1.00

retaile1

under 20

20-30

30-40

above 40

Total

2

22

3

3

30

2.0000

2.4545

2.6667

3.0000

2.5000

.00000

.73855

.57735

.00000

.68229

.00000

.15746

.33333

.00000

.12457

2.0000

2.1271

1.2324

3.0000

2.2452

2.0000

2.7820

4.1009

3.0000

2.7548

2.00

1.00

2.00

3.00

1.00

2.00

3.00

3.00

3.00

3.00

chkout_time

under 20

20-30

30-40

above 40

2

22

3

3

3.0000

2.2727

2.3333

2.6667

.00000

.70250

1.15470

.57735

.00000

.14977

.66667

.33333

3.0000

1.9613

-.5351

1.2324

3.0000

2.5842

5.2018

4.1009

3.00

1.00

1.00

2.00

3.00

3.00

3.00

3.00

Total

30

2.3667

.71840

.13116

2.0984

2.6349

1.00

3.00

Store attributes and perception

An analysis of variance was conducted to investigate the significance of the research variables. According to the results, it is clear that the variable of self-checkout is significant enough in the study. Likewise, checkout time is also considered to be significant. The significance test decision is based on the confidence level of 95% and the corresponding p-values of each factor.

ANOVA

Sum of Squares

df

Mean Square

F

Sig.

self_cko

Between Groups

Within Groups

Total

.533

6.833

7.367

3

26

29

.178

.263

.676

.574

retaile1

Between Groups

Within Groups

Total

1.379

12.121

13.500

3

26

29

.460

.466

.986

.415

chkout_time

Between Groups

Within Groups

1.270

13.697

3

26

.423

.527

.803

.503

Total

14.967

29

Attributes and the customer perception relation

Correlation test is a method that is use to ascertain the existence of relationship between variables, usually ordinal, nominal or both. In this research, results indicate that there is some relationship between gender and product layout. Cross tabulation was also used to perform ana investigation of what strength of relations existed between gender and the perception about product layout in the supermarkets.

Symmetric Measures

Value

Asymp. Std. Errora

Approx. Tb

Approx. Sig.

Ordinal by Ordinal

Gamma

Spearman Correlation

.215

.110

.332

.178

.621

.587

.535

.562c

Interval by Interval

Pearson's R

.124

.178

.663

.513c

N of Valid Cases

30

a. Not assuming the null hypothesis.

b. Using the asymptotic standard error assuming the null hypothesis.

c. Based on normal approximation.

With the gamma value of 0.215 (21%) implies a relatively stronger relation.

Independence of the categories

To investigate the significant difference between the two genders’ perception towards retail shops, the mean number of males who preferred retail shops is lower than the mean number of females who prefer retails shops.

Group Statistics

gender of the respondent

N

Mean

Std. Deviation

Std. Error Mean

most prefered retailer shop by the respondent

male

21

1.4762

.60159

.13128

female

9

1.5556

.52705

.17568

To test for independence, the associated p-value of 0.518 is less than 0.05. This is a proof that respondents’ genders are significantly different when it comes to preference for retail shops.

Graphical summaries of the attributes

Part 4:

Discussion

Because we are interested in testing the respondents’ perception and expectation for the product and service delivery is a common question. Product availability in the retail shops is therefore a key attribute that will influence and attract customer services (Chopra and Meindil, 2007, p.77).

Consumer perception for the retail shops has therefore gathered a lot of attention as it influences the customer and service providers’ relations. In order to increase customer satisfaction, many of these retail shops have improved the service quality. New methods and services like check out system are considered to be vital in determining consumers’ perception towards the shops.

As analyzed, the marker or customer perception towards the small retail shops is driven by a set of factors that include service quality, product variety and customer relations. Moreover, many customers will always not travel longer distances but seek for retail services in nearby shops. As per our research responses, retail attributes have a significant relation with the customers’ perception and expectations.

The results also indicate that customers purchasing grocery products on store will focus on the layout of the shop, availability of variety of products and retailer’s attitudes towards their customers. It is therefore important that retailers unorganized market system should focus on emphasizing and improving the various store attributes to attract and maintain the customers. Similarly, varying store attributes will vary with the different types of materials dealt within the various categories of retail shops.

Another very important aspect in improving perception and expectation of the customers is distance travelled by customers to access services. The analysis indicates that all the attributes discussed in the survey influence perception of customers toward these retail shops. Despite distance travelled by the customers, retail shop attributes have got an important influence towards the customers’ perception on the retail shops.

Moreover, graphical analysis of gender effects on perception and priority goals in retail shops is significant. It can be evidenced in the graphical data analysis that many of the customers age 20-30 would prefer setting priories on product quality than the service attributes. A greater percentage of the respondents age 20-30 would prioritize product attributes over retailer attributes and service attributes.

The mean number of respondents who prefer retail shop due to distance and service is high for males than females. Pie charts and bar graph gives a better implication that females would consider service delivery and distance in rating the retail shops. The distance travelled by customers showed a moderating impact on the product preference and service preference among the customers. Therefore, in proving the hypothesis that customers have low perception and high expectation from the retail shops, store image, product assortment and availability in the store better gives customer perception and expectation scaling for distant and near retail shops.

In testing relation between variables of interest, it is possible to make a general conclusion that perception and expectation are influenced by product related attributes, service attributes and the distance or retail shop location attributes. Nearer retail shops are overally liked by many respondents in our research study. Unlike unorganized stores, the respondents in the study are recognized to fall in love with better services and wider variety of services.

According to the graphical analysis, it is evident that the two genders prefer some of the retail shops not because of attributes, but due to low number of people. The bar graph gives an indication that males and females prefer retails shops because of few customers which is likely to speed up the rate and quality of service delivery.

Appendix

SPSS data

Questionnaire

1. What is your gender [single choice]

   ○ A.Male   ○ B.Female

2. Your age [single choice]

   ○ A. under 20   ○ B. 20-30   ○ C. 30-40   ○ D. over 40

3. Now you are [single choice]

   ○ A. student   ○ B. work from home   ○ C. staff on active duty   ○ D. other

4. which retailers you usually choose to buy daily necessities [single choice]

   ○ A. big supermarkets   ○ B. small retail stores   ○ C. other way

5. Reasons you choose big supermarkets [multiple choice]

   □ A. near home   □ B. various kinds of products and a good product quality   □ C. high service quality   □ D. other

6. Reasons of choosing small retail stores [multiple choice]

   □ A. near home   □ B. fewer customers and quicker checkout system   □ C. common layout of products   □ D. other

7. Which factors you think can evaluate service performance of retailers [single choice]

   ○ A. product quality   ○ B. service quality   ○ C. both

8. Which factor do you think is more important in product quality? [single choice]

   ○ A. variety of products   ○ B. reliability of products   ○ C. flexibility of products

9. What aspect of service quality is more important? [multiple choice]

   □ A. layout of products   □ B. help from staff   □ C. checkout system   □ D. parking service

10. Has the layout of products ever confused you to choose in purchasing [single choice]

   ○ A. yes   ○ B. no   ○ C. no feelings

11. Do you hope to get help from staff at anytime in purchasing? [single choice]

   ○ A. yes   ○ B. no   ○ C. no feelings

12. In big supermarkets, checkout system usually takes you [single choice]

   ○ A. in 1 min   ○ B. 1-5 mins   ○ C. over 5 mins

13. In checkout system, you prefer manual checkout serviceor self-checkout service [multiple choice]

   □ A. manual checkout service   □ B. self-checkout service

14. Which problems you have ever faced in the process of self-checkout system [multiple choice]

   □ A. old machines   □ B. few machines   □ C. hard operations

15. Do retailers take consideration of your needs in parking service? [single choice]

   ○ A. yes   ○ B. no   ○ C. no feelings

16. Despite indoor shopping, have you ever experienced online purchasing? [single choice]

   ○ A. yes   ○ B. no

17. Do you think nowadays online purchasing is taking place of the traditional way? [single choice]

   ○ A. yes   ○ B. no   ○ C. no feelings

18. which problems you have ever faced in the process of online shopping [multiple choice]

   □ A. fewer kinds of products   □ B. product quality can not get guaranteed   □ C. delay of product delivery   □ D. other

19. Which problems you can bear in the delivery process [single choice]

   ○ A. rude staff   ○ B. high cost   ○ C. delivery delay

20. Will you choose this retailers again when you have got bad experience of delivery before? [single choice]

   ○ A. yes   ○ B. no

21. From your own opinion, which retailers do best in operations management and you would like to choose them again. [single choice]

   ○ A. Asda   ○ B. Aldi   ○ C. Sainsburys   ○ D. Tesco   ○ E. other