The Effects of HMR Selection Attributes on Repurchase Intention by Shopping Channels

Abstract

Purpose - This study examined the effect of the importance of selective attribute of HMR(Home Meal Replacement) on customers' satisfaction and repurchase intention which is rapidly increasing with the changes of demographic, social and cultural trends as well as the influence of on and offline shopping channel moderating role. Research design, data, and methodology - Based on the research of previous studies, it assumed the selection attributes of HMR products were price, convenience, menu, freshness. With 231 surveyed questionnaires, this study was conducted by AMOS 21.0 and the SEM(structural equation model) was used as statistical method for examining the hypotheses in this study. Results - The analysis showed that price, convenience, and freshness had a significant effect on satisfaction, whereas menu did not affect satisfaction and the effect of satisfaction on repurchase intention was statistically significant. However, the results were different depending on the on and offline shopping channel for customers to buy HMR products. Price, menu and freshness are affected by online shopping, meanwhile convenience is more influenced by offline. Conclusions - This study analyzed the effect of selection attribute of HMR products on the satisfaction, repurchase intention, and the influence of each shopping channel, and provided practical implications.

1. Introduction

Along with Korea's economic growth, the food service industry has grown at a rapid pace with the increase in national income. With social factors such as women's social activities, increase in double-income couples, and increase in single-person households, workers with high average working hours wanted to maximize leisure time(Olsen, Sijtsema, & Hall, 2010). As a result, modern people have pursued the convenience of cooking, and HMR(Home Meal Replacement)market has expanded naturally(Kwon, Lee, & Choi, 2005).

[Table 1] Definition of HMR

There are many definitions for HMR(Home Meal Replacement). Song(2009) suggested that they looked similar to take-out, but there was a clear difference. It replaces the quality and flavor of homemade cooking. Na and Kim(2012) suggested that HMR products refer to foods that can comprehensively replace traditional meals at home. In addition, Kim, Song, and Park(2005) considered food or meals as substitutes with the same quality as a homemade meal. Kevin(2001) reported that in his study, HMR products consumed at home prepared by store which consumer had little or nothing to prepare. Currently, the global HMR market has a high annual growth rate of 13.1% with a total production of HMR(instant and cooked food) of KRW 1.7 trillion and a total shipment value of KRW 1.5 trillion as of 2014. The overseas HMR market can be divided into chilled ready meals and dried ready meals(Kim, 2017). In case of USA, it is the largest market in the country with US ＄ 4.3 billion in 2014, and especially energy bar snacks are also included in HMR food items as a substitute for meals(Kim et al., 2017). Japan has the second largest market with ＄ 3.26 billion. Both countries are continuing to grow year-on-year (Ministry of Agriculture 2015). France has a market share of ＄ 2.12 billion and China has a share of ＄ 88 million. In addition, low-income countries such as Vietnam, Thailand, and Malaysia are expanding their interest in food safety and hygiene, and HMR market is growing remarkably(Kim, 2017). The domestic HMR market has not grown significantly due to the distrust of processed foods, but it has begun to attract attention as singles and dual-income couples became popular in the early 2000s. As a result, companies expected to increase the consumption of HMR foods and began investment in order to preoccupy the market, and launched various HMR brands(Park, Choi, & Heo, 2015).

Domestic HMR market in Korea is dominated by food conglomerates such as CJ, Ottogi, Daesang, and small and medium-sized businesses are targeting niche markets based on their own technological capabilities(Yang & Cho, 2015). Currently, many companies are actively conducting research on cooking time, methods, storage, and packaging containers to maintain quality and freshness. In addition to simplicity, research on flavor has been carried out continuously(Park et al., 2015). CJ and Dongwon are launching various HMR foods. It sells various products such as instant rice, porridge, laver, kimchi and various side dishes through not only offline store but also online(Kim et al., 2017). Increasingly, there is a growing demand for simple foods that rely on external procurement rather than home cooking, or to consume meal with only a small amount of food. Since this social trend is expected to continue, the HMR market can be predicted to become the blue ocean of the food industry(Kim, 2017). Recently, HMR has attracted interest in online market. The online market is expected to grow faster as HMR products in online markets have the advantage of being able to place orders at anytime and anywhere(Yang & Cho, 2015). The HMR market, which started offline, is now expanding to the online market. Nonetheless, no research has been found on differences in the on/off-line market of HMR product selection. The purpose of this study is to investigate the effect of HMR on satisfaction and repurchase intention, through this, this study will broaden the horizons of research and provide practical implications and give strategic direction to companies selling HMR.

2. Literature Review

Research on HMR has mainly focused on selection attributes, market trends, product types, merchandising, brand, use characteristics, usage status, preference menu, eating habits, and satisfaction below [Table 2].

[Table 2] Precedent research for HMR

2.1. HMR selection attribute

Kang et al.(2008) defined that the selection attribute is most important attribute when consumers choose a product or brand. In a study by Jeon et al.(2005), selection attributes vary depending on how customers perceive services or menus they want to purchase. Therefore, the selection attribute of the HMR generally refers to attributes that are carefully considered when selecting the HMR product.

In the Nation Restaurant Association(NRA), the biggest reason for consumers to eat takeout meal was in the order of ‘time burden(29%)’, ‘energy consumption and fatigue’ (27%), ‘Demand for food like home cooking’(16%)(Moomaw, 1996). The important attributes of customers in selecting HMR products are the freshness, menu, price, convenient container and service(Chung & Lee, 2007; Kim, Kwon, & Shim, 2007). Based on these previous studies, we derived HMR selection attribute items for consumers.

2.1.1. Price

According to a study by Kim(2013), 74.6% of consumers compare prices when purchasing products. When consumers purchase cosmetics, price factor highly effects the satisfaction and repurchase intentions(Kim & Lee, 2016). Recently, the number of consumers who buy products online has been increased. As a result, various price comparison sites are available online so that consumers can easily compare the prices of their desired products. Pricing in such a competitive online market is also an issue for sellers, and price selection attributes will become increasingly important in online sales because consumers are becoming more price sensitive with the advent of price comparison sites and the value of HMR prices has a great effect on customer satisfaction(Lee & Jeon, 2016). Therefore, the following hypothesis presented.

[H1] The price of HMR would have a effect on satisfaction of the consumers.

2.1.2. Convenience

In a study of online shopping malls, one of the factors for consumers to repurchase is simplicity, and the higher the simplicity, the higher the satisfaction(Yang, 2015). Ju(2012) showed that the reason why HMR is preferred is because of the convenience(57.2%), price(14.9%), taste(13.0%) and quality(10%). It maximizes the convenience of food. The highest preference type of HMR is the convenience type (73.1%)(Myung, Nam, & Park, 2016). Cassano(1999) found that the reasons consumers buy HMR products were convenience, visual effect, and cleanliness of packaging. Therefore, the following hypothesis is presented.

[H2] The convenience of HMR would have a effect on satisfaction of the consumers.

2.1.3. Menu

The menu is the most important factor of the operation plan because price and service changed by the menu as a basic element of restaurant operation(Jeon, 2005). According to Lee and Ryu(2011), customers’ preference recommended and delivered to other customers, so menu is an important factor for product differentiation. HMR products are one of the most important factors that customers consider when purchasing 2007 products, in addition, it was found that customer satisfaction increased as the preference menu of the selection attributes of HMR had a positive effect. Based on the preceding studies, we set the following hypothesis.

[H3] The menu of HMR would have a effect on satisfaction of the consumers

2.1.4. Freshness

In the study by Lee(2012), the priority of HMR selection attributes was measured in order of freshness of food, hygienic quality, and stability of food quality. The results also suggest that the value of HMR will be enhanced if company develop simple, safe, fresh, and hygienic foods. Song(2009) who studied the purchase preference attributes of HMR customers, emphasizes that according to the area, residents of Seoul place importance on freshness of materials. According to the analysis of the importance and satisfaction of HMR, 'hygiene and quality of food' such as 'expiration date of food' and 'freshness of food' were considered to be important. Consumers who buy HMR at department stores consider the freshness of raw materials as a factor in purchasing, and those who buy snacks or side dishes also consider freshness of raw materials(Song, 2009). Therefore, the following hypothesis is presented.

[H4] The freshness of HMR would have a effect on satisfaction of the consumers.

2.2. Satisfaction and Repurchase

According to Oliver(1989), satisfaction is the judgment of whether the service and the product itself, or its characteristics, are provided at a pleasant level of consumption. Repurchase intention as a behavioral intention, which means that the customer is satisfied with the service provided and the likelihood that the customer will use it in the future, as well as the thought and attitude, are transferred to action(Brady, 2001; Kim & Shim, 2017). Consumer satisfaction and trust which are the components of the relationship quality appeared to be positive effect on the future behavior intention and customer loyalty(Li, Yoo, & Park, 2017; La, Kim, & Yang, 2016; Cha & Park, 2014; Kim, 2017). Ultimately, it is necessary to provide a high level of satisfaction in order to maintain relationships with customers or to increase repurchase awareness. Based on the preceding studies, we set the following hypothesis.

[H5] Satisfaction of HMR users would have a effect on repurchase intention.

2.3. Online shopping

Hoffman and Novak(1996) pointed out that online(internet) shopping malls are a collection of online stores that include products in various areas. The exhibition and advertisement of products for e-commerce are made through internet shopping mall, and various information such as price and structure characteristics of products are provided. In the study of Yang and Cho(2015), satisfaction with price and simplicity was found to have a significant effect on online purchase of HMR products. Especially, satisfaction of price has a significant effect on purchase of products. Cha and Park(2017) proved that for off-line channels, consumers' consumption values were more influential on empirical attributes, while functional attributes were more important in on-line channels. Customer purchase frequency is predicted more by website design appropriate strategies and financial benefits can be more predictive in actual purchases(Sthapit, Jo, & Hwang, 2016; Prashar, Vijay, & Parsad, 2015). Therefore, the following hypothesis is presented.

[H6] The effect of price and convenience with HMR on the satisfaction by online channel users would be greater than the offline channel users.

2.4. Offline shopping

The offline store such as department store, multi-complex shopping mall increases consumers' psychological efficacy, because they can collect sensible information by directly touching the product. Experience in the offline store can predict the quality of the product or the situation after the purchase, thus providing a high cognitive control(LaRose & Eastin, 2002; Johnson, 2008; Cha & Park, 2012). When customers purchase HMR products offline, such as discount stores and convenience stores, the purchase intention varies according to package sales, menu information, and menu variety. In other words, when the consumer visits the store, the purchase intention changes according to the visible information, product freshness, etc.(Kim, 2013; Cha & Park, 2016). Based on the preceding studies, we set the following hypothesis.

[H7] The effect of menu and freshness with HMR on the satisfaction through offline channel users would be greater than the online channel users.

[Figure 1] Research Model

3. Methodology

The questionnaire items from previous researches were revised to fit the study purpose of the study. From September 21 to 29, 2017, the questionnaires were administered through both off-line and on-line survey methods(e.g., SNS) for consumers who had experience to buy HMR products. A total of 240 questionnaires were collected(online 140, offline 100) and, after excluding incomplete online 9 responses, a total of 231 questionnaires were used for the empirical analysis. This research was conducted with the following analysis method. First, to verify the convergence and discriminant validity among the measured variables, exploratory factor analysis was performed using Amos 21.0. Then, the confirmatory factor analysis was performed again using Amos 21.0. Next, the covariance structure model analysis was used as a statistical method for the hypothesis testing of the study. Of the total 231 respondents, 70(30.3%) were males and 161(69.7%) were females. Most respondents were in their 20s(58.9%) and 50s(22.9%); professionally, most of them were students (41.6%), and workers(23.4%). Many of them reported having meals 2 times(50.2%) and 3 times(44.2%) per day.

4. Results

4.1. Evaluate Metrics

First, validity analysis and reliability analysis were performed on the items of constitutional concept measured in multiple items(Churchill, 1979). Exploratory factor analysis was examined to evaluate validity and reliability, and Cronbach's alpha was conducted. Principal Component Analysis was used for factor extraction. Factors were extracted based on Eigenvalue 1. VARIMAX was applied to the factor rotation method.

Cronbach's alpha coefficients are all over 0.8, which confirms reliability(Nunnally, 1967). Exploratory factor analysis showed that discriminant validity and convergence validity was confirmed and the validity factor was analyzed by Amos 21.0. [Table 3], [Table 4]. shows the results of the analysis.

[Table 3] Exploratory factor analysis

[Table 4] Exploratory factor analysis

As shown in [Table 5], the chi-square value of the measurement model is significant(p=0.000), but it is sensitive to the sample size and model complexity. It was judged to be appropriate to evaluate the model fit in consideration of the CFI(comparative fit index) and the NFI(normed fit index)(Bearden, Sharma, & Teel, 1982; Bagozzi & Yi, 1988). Overall model fit was rated satisfactory by NFI=0.918, CFI=0.954, and RMSEA=0.071. The average variance extracted(AVE) and composite reliability (CR) satisfied the criteria proposed by Bagozzi and Yi (1988)(above 0.6 for CR, above 0.5 for AVE) and the loadings were statistically significant(p<0.01). The convergent validity was confirmed. [Table 5] presents the results of the confirmatory factor analysis.

[Table 5] Confirmatory factor analysis result

X² = 306.576(df=141, p=0.000), NFI=0.918, CFI=0.954, RMSEA=0.071

As a result, as shown in [Table 6], in order to verify the discriminant validity, the method of comparing the correlation coefficient squared value(r²) and the average variance extraction was conducted. It was confirmed that there was no conflict in discriminant validity because the correlation coefficient squared value was lower than the average variance extraction value in all the variables. Therefore, the validity of the discrimination between the different constitutional concepts was verified.

[Table 6] Discriminant validity through correlation analysis

4.2. Research Hypothesis Verification

The research hypotheses were examined using Amos 21.0. The fitness index was satisfactory with chi-square=306.576(df=141, p=0.000), NFI=0.918, CFI=0.954 and RMSEA=0.071 for the study model. [Table 7] shows the results of hypotheses testing for the main effects from [Hypothesis 1] to [Hypothesis 5]. On the main effect, as a result of the hypothesis test, the price, convenience and freshness presented a significant influence on the satisfaction, however, the path coefficient from the menu to satisfaction was not significant. That means menu is not important for customers to choose HMR products comparatively because of the lack of differentiation in menus due to the variety of the HMR merchandise. And the path from the satisfaction to repurchase was significant. The results of the above verification are presented in [Figure 2].

[Table 7] Results of research hypothesis

[Figure 2] Results of research hypothesis

4.3. Verifying the Moderating Effect of Consumers’ On/Offline shopping

To examine the moderating effect of consumers’ on/offline shopping on the HMR, first, the total sample(n=231) was divided into the group for using online channel and the other group for using offline channel and then the path coefficients were compared. Based on the average value, the groups were divided into online channel using group, and offline channel using group. Therefore, consumers who use online channel are more influenced by the price, menu, freshness of HRM products, meanwhile consumers who use offline channel are more influenced by the convenience of HRM. This implies that online and offline groups are more sensitive to the effect of HMR purchase factors on consumer satisfaction. The results show that convenience of HMR has statistically significant effects on satisfaction(see [Table 8]).

[Table 8] Comparison of functional consumption value group and emotional consumption value group

* p< 0.05, ** p< 0.01, *** p< 0.001

5. Conclusion

The aim of this study was to find out which of the products selection attributes of customers who buy HMR are more crucial factors in terms of customer satisfaction. Based on examination of the causality and literature overview where satisfaction leads to repurchase, several selection factors were considered to be suitable for the products selection attributes of HMR. The results suggest that the price, convenience and freshness have significant effects on satisfaction(p<0.001). And the path coefficient connecting satisfaction with repurchase was statistically significant as well. However, those relationships differed depending on on/off-line shopping channel. In the effect of products’ convenience on satisfaction, both the online shopping group and the offline shopping group had a positive influence, but the offline shopping group had a statistically greater influence(p=0.023). There were no researchers who studied the comparative effect of on-offline shopping on the selection attributes of HMR products. In general, consumers use online shopping because of their price and simplicity(Yang & Cho, 2015) and the reason consumers buy HMR products is convenience, visual effect, and cleanliness of packaging (Cassano, 1999). In HMR products, it is perceived that offline shopping is more convenient than online shopping because of the characteristics of products as food.

The effect of price on satisfaction was shown to have a positive effect on both the online shopping group and the offline shopping group. And, the consumer groups with online channel had a greater impact than the other group. The effect of the menu on satisfaction was found to be affected by the online shopping group(+) and the offline shopping group(-). The effect of the freshness on satisfaction was found to be affected by the online shopping group and the offline shopping group. The online shopping group and the offline shopping group all had an influence on the satisfaction of the price, menu, freshness of the HMR, but the influence did not reach statistical significance. This result suggests that the factors influencing satisfaction are affected by on/offline shopping channel while purchasing HMR products. Therefore, offline shopping consumers are more influenced by the convenience of HMR products.

6. Implications and Limitation

This study has developed an existing study on the selection attributes of HMR products. The most significant difference between this study and previous studies is the analysis of the moderating role when customers buy HMR products through online and offline shopping.

The results of the present study provide the following implications for HMR business. First, products selection attributes that customers consider important when selecting HMR are price, convenience and freshness. Second, the offline shopping group was found to be more influenced by the convenience of HMR products. The findings can be used as strategic marketing points for specific consumers who have a certain consumption pattern when company sell HMR products performs targeted marketing using customers behavior for selection attributes.

This research has several limitations that should be addressed in future research. First, in this study, only, price, convenience, menu and freshness were judged to be the most important attributes of HMR products selection in the model construction. In addition to this, more complex and integrated study would be needed by adding more attributes such as products design, simplicity, healthy, diversity, etc. Second, in this study, shopping channel was classified into the online shopping group and the offline shopping group. However, in further research, it would necessary to specify shopping channels such as convenience store, department store, mobile shopping, etc. based on the research of consumer preference.