Positioning customer-based convenience store image: a multidimensional scaling approach via perceptual map

Abstract

Purpose: The research is to find out the perception of consumers for the convenience store (c - store) image in an emerging market, with a sample from Ho Chi Minh City. Research design, data, and methodology: Data were collected using a 24 - item structured questionnaire into six factors, namely: store atmospheric, merchandise, supplementary service, customer convenience, sales personnel, promotion. Five hundred consumers shopped at the different c - stores were collected for a multidimensional scaling technique that creates a perceptual map illustrating of c - store image. Results: The results point out that consumers' perception of a different c - store is different. The trend of c- stores are focusing on the dimensions of the function aspect. The customers also put their attention on the psychological dimension, which, in this case, is customer convenience with a sharp point. Almost all stores are bad on store atmospheric in customer- based. Conclusions: The modern retail store chains need to focus on elements to create a store image positioning and improve the perceptions of the consumers towards the store. Besides, customers not only visit the stores, not due to its convenient location, mass media or shopping experience, but also a strong identity for the store's brand image.

1. Introduction

According to a statistic by Deloitte (2019), the Vietnamese retail market has grown steadily over the years. With an average growth rate of about 11.9% between 2016 and 2019, Vietnam's retail trade is forecast to reach a market size of nearly US $ 180 billion by 2020. In particular, the Southeast and the Red River Delta are the two regions contributing the most to the total national retail sales. Ho Chi Minh City leads the country at VND 971499.5 billion, double to the city that holds the second- ranking (Ha Noi). Nielsen (2019) has shown that modern trade channels have a store growth rate of 61% annually, while traditional retail only achieves a store growth of two percent. Modern retail is experiencing significant strong growth, and the most impressive is the c–store when compared to others such as supermarkets or department stores.

Vietnamese consumer habits gradually shift to conventional distribution channels, especially c–store and mini supermarket. Kantar Worldpanel (2018) reported that more than one-third of Vietnamese households shop on an average of 10 times per year at c–store and mini supermarkets. Besides, domestic and foreign investors are also racing to open c–store in the form of chains, with superior services, improved technology in order to increase competitive advantage, and find a stable position on the current market.

Table 1: The growth rate of Vietnamese modern trade channels in 2018

Vietnam has more than 1000 c–stores by January 2019. The Grocery Distributor Institute (2017) also forecasts that these retail channels will proliferate with double-digit growth, reaching 37.4. % in 2021 and hold the top position among the nations participating in the survey, followed by Philippines 24.2%, Indonesia 15.8%, Malaysia 10.5%, India 10.3%, South Korea 8.4%, China 7.1%, Thailand 6.6% and Japan 5.5%.

Table 2: C–stores in Vietnam grouped by national originates in 2019

Nevertheless, any speedy development holds many risks and challenges. Enormous pressure from long-term loss, even a store to compensate for losses of up to billions of VND, many names had to leave the competition before they could gain market share. A typical case in point is that Shop & Go has proactively proposed to cede the entire chain of 87 convenience stores operating for VinCommerce Company, a member of Vingroup. At the same time, GS 25 Vietnam (a Korean retailer), is also completing procedures to receive Zakka Mart - a convenience store chain managed by Zakka Joint Stock Company. Therefore, without proper strategies and policies, the convenience store model will not avoid the risk of failure. The failure due to many causes such as the purchasing power of the market, the ability to expand the network, the competition with the same kind chain stores... Moreover, retailers also need to consider the factors that govern consumer behavior such as preferences, needs, the lifestyle of consumers. Accordingly, retail executives need to know about the customer view of the store image as positive store image has a positive relationship with customers’ behavioral intentions and customers’ satisfaction (Javanmard, 2016).

Numerous attempts have been made to classify the factors that contribute to store image. According to Martineau (1958), shop images are a source of differentiated competition in retail. The same viewpoint with Amirani and Gates (1993), Burt and Carralero-Encinas (2000), Khan (2018) also suggested that store image is one of the most critical factors determining business success in the retail industry. Besides, the unique store image is one of the competitive retail advantages, creating the most valuable marketing asset for retailers (Gundala, 2010; Lockshin & Kahrimanis, 1998). Customers tend to prefer shopping in stores that have images that match their self-images (Mathur & Gangwani, 2016; Saraswat, Mammen, Aagja & Tewari, 2010; Schiffman & Kanuk, 1997, Suresh & Ramanathan, 2019). Consequently, research providing store image is of much interest in both academic and managerial aspects. Ailawadi and Keller (2004) have shown that the prevailing situation is to trade and sell products of the same brands, so the level of competition among retailers is very high. It is for that reason that they always try to find strategic tools to differentiate themselves from competitors in the industry. There have been several dimensions of store image frameworks announced in the field of economics (Bearden, 1977; Berry, 1969; Doyle & Fenwick, 1974; Fisk, 1961; Ghosh, 1990; Greenberg Sherman & Schiffman, 1983; James, Du Rand & Dreeves, 1976; Kunkel & Berry, 1968; Lindquist, 1974; Osman, 1993; Visser, Du Preez & Janse van Noordwyk, 2006, Varley, 2005; Virvilaite & Dailydiene, 2012; Verma and Madan, 2011).

However, studies looking at store images in the context of modern retail are still limited, and can be mentioned in a few cases such as department stores (Berry, 1969), hypermarket (Jinfeng & Zhilong, 2009), grocery chains (Doyle & Fenwick, 1974). This paper aims to study consumer perception of different c–store in terms of store image through perceptual map. Thus, the research has two specific purposes of developing and examining a reliable measure of customer-based c–store image and identifying of the customer-based c–store image through the perceptual map. The contribution of this study to empirical research on store images in the context of modern retailing is the development of a consistent, reliable c–store image scale. The research paper examines the concept of c–store image then suggests the basis for exploring the research scale of c–store image. After that, the authors collected data through a direct survey to go into analysis and set up the positioning map of c - store image. Finally, the theoretical, practical and limited contributions of the research along with future research directions.

2. Literature review

2.1. Definition of convenience store

There is currently no official definition of c–store. Cambridge dictionary online (2019) defines c–store is as a small store. C-store sells popular foods and other products such as daily products, milk, newspaper... It is open until late at night or all the time and is located on a busy street.

2.2. Definition of store image

Store image is how shoppers positioned the store in their minds (Zimmer & Golden, 1988). Omar (1999) defines a store image as the collection of all store attributes according to buyers' perceptions through their experience. Amirani and Gates (1993) indicate that store image is one of the essential factors determining success in retailing. According to Varley (2005), the image of the store is the evaluative criterion that customers use in the decision process of choosing retail stores. The uniqueness in the store image is a valuable marketing asset for retailers, creating a competitive advantage for the business itself when compared to other retailers (Rosenbloom, 1983). Accurately, the store image represents a vital component that is patronized by consumers (Darden & Erden, 1983), which relates to the customer's choice as well as their loyalty (Malhotra, 1983; Osman, 1993).

Moreover, harmony and attractiveness in the image store have a positive influence on the choice of the customer (Cho, 2013). In conclusion, store images not only provide an essential competitive advantage for commercial organizations but also in stores, especially within retailing. It has built up the trust of customers and brought more benefits in transactions. Gundala (2010) shows that retailers can convey their positioning strategies through store image. In a highly competitive market, in order to develop a differentiated and positive image of their store, retailers need to have a clear understanding of the customer experience and their perceptions of shops compared to other stores (Lockshin & Kahrimanis, 1998). Therefore, that is why, in recent times, researchers have made constant efforts to provide insights to improve store images.

2.3. Dimensions of convenience store image

Different researchers have focused on the different attributes of store images and show that store images are divided into two categories - functional dimensions and psychological dimensions that consumers perceive in retail stores (Barr & Field, 1997; Martineau, 1958; Lindquist, 1974). The functional aspect refers to the store's objective functions such as goods classification, store layout … The psychological aspect refers to the intangible feelings that a store gives consumers, such as familiarity, excitement, or warmth, friendliness when they come into contact with that store (Saraswat, Mammen, Aagja & Tewari, 2010). This research focused on six dimensions of store image, namely Store atmospherics, Promotion, Merchandise, Supplementary services, Customer convenience, Sales personnel. Thus, there are functional dimensions and psychological dimensions contained in the following table 3.

Table 3: C–store image dimensions summary

2.3.1. Store atmospheric

The atmospheric store includes physical characteristics related to the design of the purchasing environment that create an image to attract customers and create an emotional effect that increases the likelihood of a purchase, especially in a specific market where product and price differ nominally (Kotler, 1973). The store atmosphere consists of layout, color, lighting, and music (Stevens, 1980), the color of goods, type of display, ease of movement … (Kerfoot, Davies & Ward, 2003). Besides, Engel, Blackwell and Miniard (1995) had explored music, and its volume in-store, smells, and temperatures also created a stimulus for customers to stay longer. With the characteristics of a convenience store that uses a very compact floor space, presentation diversity of goods to meet consumers' needs in order to create a scientific store atmosphere is truly necessary. From the literature, authors inferred that in terms of layout, color, music, smells, and temperature (Stevens, 1980; Kerfoot, Davies & Ward, 2003; Engel, Blackwell & Miniard, 1995) are a significant dimension to be studied in the c-store atmosphere. If the customer has the experience with the store is memorable, they will remember it and want to come back. In that case, the atmosphere will play a vital role in making the customer's memorable experience.

2.3.2. Promotion

Promotion is the activity, material, and media used to persuade consumers to buy or consume the product by marketers (Connett, 2004; Chung, 2011). Many authors agree that promotion-mix includes advertising, public relations, sales promotion, personal sales, direct marketing, event, and sponsorship marketing (Connett, 2004; O'Guinn, Allen & Semenik, 2009). However, the past authors focused on the three most elements are advertising (Carroll et al., 2007; Verma & Madan, 2011), sale incentives (Alvarez & Casielles, 2005; Verma & Madan, 2011), special events (Alvarez & Casielles, 2005), displays (Sen, Block & Chandran, 2002).

2.3.3. Merchandise

Merchandise is a group of closely related products, shown for end-use, sold to the same consumer group, or at the same price (Dunne, Lusch & Geble, 2008). Thus, the goods in Visser, Du Preez and Janse van Noordwyk (2006) research for clothing stores include Quality, Availability, Accessories, Fashion Style, Diversity, Price, Special Clothing. Chen, Hsu and Chen (2007) for department stores argued that goods include aspects such as Guarantee of products and return of damaged goods, Quality of goods, Completed goods, The suitability of commodity prices. In this research, the author uses the merchandise scale which consists of competitive prices, diversity goods with clear originate; specialized merchandise, variety within store assortment (Du Preez, Visser & Van Noordwyk, 2008).

2.3.4. Supplementary services

Supplementary services are those provided before purchase, during the process of purchase or after purchase. These services are intended to complement, stimulate and boost product sales as well as increase customer satisfaction (Vahie & Paswan, 2006). There are many factors related to supplementary services such as: connecting with diversity payment, offering gift-wrapping services, returning and exchanging goods quickly (Mathur & Gangwani, 2016), delivery options, payment options and after sales service, value-added service... (Du Preez, Visser & Van Noordwyk, 2008). Overall, with different characteristics of c–store, this research focus on connecting with diversity payment, returning and exchanging goods in advance (Mathur & Gangwani, 2016), value-added service (Du Preez, Visser & Van Noordwyk, 2008).

2.3.5. Customer convenience

Customer convenience is a tool to add value by reducing time and effort consumers in the using process the service of the customer (Zeithaml & Bitner, 2000). The additional service utilities help businesses provide high-quality services that meet consumer expectations (Liang & Wang, 2006). The past papers show different aspects of customer convenience including store hours (Kaufman & Lane, 1996; Aagja, Mammen & Saraswat, 2011); transportation (Ibrahim, 2002; Jin & Kim, 2003), parking (Stoltman, Morgan & Anglin, 1999), easy access (Ibrahim, 2002; Jin & Kim, 2003). In this, with the characteristics of c–store, the convenience of the service focuses on valet parking-car, help customers feel safe when shopping, flexible shopping time, a convenient location on the two-way street, store them all in one place.

2.3.6. Sales personnel

Sales personnel are employees assigned to take care of customers, promote products, and supervise sales (Nzuve, 2010). Attitude, knowledge, and skills of the seller provide customers with a better experience (Homburg & Stock, 2005; Bradford & Weitz, 2009), thereby helping customers have a better impression of the store. So, personal selling is also a factor of the store image (Mathur & Gangwani, 2016). There are two perspectives of Sales personnel: Sales personnel interaction such as Attention; Caring; Competent; Friendly; Knowledgeable; Professional (Hu & Jasper, 2006; Mathur & Gangwani, 2016) and sales personnel appearance including appearance; similar to yourself and age; (De Klerk, Velleman & Malherbe, 1993). This study focuses on sales personnel interaction and appearance, which consist of knowledge to answer the questions, courteous and attend to a customer, solving related situation efficiency beside sales personnel appearance is clean and tidy appearance.

3. Research method

3.1. Multidimensional scaling (MDS) and Perceptual map

Multidimensional scaling transforms consumer judgments of store image in multidimensional space by the result of a perceptual map about the positioning of ten c–stores in Ho Chi Minh City. The research method measures the overall evaluation of c-store by perceptions customers and then derive positions in multidimensional space.

In order to accomplish the paper, the following ten c–stores were selected: 7 Eleven, B’s Mart, Cheer, Circle K, Co.op Smile, Family Mart, GS25, Ministop, Shop & Go, and Zakka Mart. Three criteria in selecting these regions for the study. Firstly, the respondents in the study (customers buying in those stores) were familiar with the stores through purchasing. The responses in the direct questionnaire (instrument of data collection) would be based on familiarity with the stores rather than on hunches and hearsay. Secondly, these c–stores are popular in Ho Chi Minh City. Finally, they are similar in terms of convenience store profile (e.g., size, operation, product mix), and they are the same.

3.2. The sampling of c-store

The research uses the quantitative method through convenient sampling, which was collected from customers in Ho Chi Minh City. Likert scale with five levels between strongly disagree and strongly agree to measure cognitive of the customer about c-store. According to Hair, Hult, Ringle & Sarstedt (2014), the study should ensure a minimum sample size of 5*n=5n (the research is 5*24=120). To ensure the quality of the study, the author decided to choose 500 questionnaires to distribute to customers.

The study collects ten famous stores located in Ho Chi Minh City, including 7 Eleven, B's Mart, Cheer, Circle K, Co.op Smile, Family Mart, GS25, Ministop, Shop & Go, and Zakka Mart, and the number of questionnaires for each c-store was 50 samples. After finishing, 500 valid questionnaires are continued in the quantitative analysis with an appropriate step: assesses for Cronbach's Alpha, EFA, and Multidimensional scaling to creates a perceptual mapping illustrating the relative positions of six factors of c–store image.

Table 4: Cronbach’s Alpha Result

There is very sensitive to compare brands to each other; Therefore, the author group keeps confidential the names of the ten brands above. To do that, the authors will randomly assign ten brands of the store from Store 1 to Store 10. Therefore, only the author group knows which store corresponds to the random names above.

4. Results and Discussion

4.1. Cronbach’s Alpha

As a result, all of the remaining items satisfy the condition with Corrected Item - Total Correlation is greater than 0.3, Cronbach’s Alpha if the item deleted is greater than 0.7 (Nunnally & Bernstein (1994).

4.2. Exploratory Factor Analysis (EFA)

The 1st EFA rejects SS1 because the loading factor is lower than 0.5. The result of the second time EFA shows that all factors divide into six components with factor loading is higher than 0.5 as the following table:

Table 5: The second time EFA result

4.3. Brand positioning and Perceptual map

The research applies the canonical structure to show brand positioning on the perceptual map. The positions of the ten c-stores are derived, and the six vectors correspond to 6 dimensions in the study are showed through the perceptual space:

Figure 1: Brand positioning and perceptual map

Here, the length of the vector is well understood and evaluated by customers. As a result, vector customer convenience has the highest length. Supplementary service and Merchandise keep the first and the second runner-up, closely followed by promotion, sales personnel, and store atmospheric. From a different perspective, customer convenience is the best vector in the Psychology aspect, while the functional element is customer convenience.

From the study, consumer’s perception is a different retail outlet. To be more specific, the mapping shows the trend of c-stores focusing on the dimensions of the Function aspect, with the numerous stores concentrating on the different vectors in this function. Store 3 is right on promotion; stores 7, 10 is good on Merchandise; stores 2, 1, 4 are right on supplementary service; but each store gets the different levels. Besides, three stores have strength in Psychology Aspect with store 6, 9 on customer convenience, store 8 on sales personnel. Store 5 is not near any dimension, which means that it is fragile on all the aspects of store image. One particular point in this research is that almost all stores are bad atmospheric. In conclusion, the aspect on which c-store is perceived good must strengthen, they also should work on the rest of the dimensions on which they do not qualify as each of the dimensions are essential in terms of image store. All c-stores should work more on these dimensions as they would be a non-expensive way of increasing sales and building a brand image of the store.

5. Conclusions

5.1 The theoretical implication

This study is to understand consumer perception of c - store image by multidimensional scaling technique to create a perceptual map. In this research, c–store image scale development has empirically, which can add to the theory in marketing and other fields of study as well as give scholars a better overview of store image. Besides, marketers can apply functional variables such as store atmosphere, goods, promotions, and additional services, in addition to psychological variables such as customer and seller convenience in order to sketch the complete structural model of the store image. These results indicate that the c - stores are differentiating themselves by functional dimensions like store atmospherics, merchandise, promotion and supplementary services. This method will help retailers locate a clear image in the target audience's mind. At that time, customers not only visit the stores, not due to its convenient location, mass media or shopping experience, but also a strong identity for the store's brand image.

5.2 The practical implication

When modern retail in Vietnam is at an early stage of development, functional differences can be a significant factor in attracting customers. However, for a long-term development strategy, retailers should pay more attention to differentiating their stores based on customers' psychological aspects. Before building the c - store image, managers need to understand the dimensions of the store image structure as well as the status of these dimensions of the stores in a particular market. The research helps economists have an overview of the convenience store image under the perception of customers, especially in Ho Chi Minh City, Viet Nam. At the same time, research has found that besides the functional aspect, the psychological aspect also has a substantial impact on customers, but a few stores pay attention to it. To compete better in the future, stores need to consider customer reviews of their stores, promote the strengths gained as well as try to overcome weaknesses to have a sustainable structure, multidimensional in shop image.

Particularly, when establishing and building a c–store image, managers need to find answers to questions regarding customer convenience, salespeople, additional services, the atmosphere, ... as well as a good understanding of the competitor stores in an overall correlation with the dimensions image. If these aspects are considered, new managers can build an impressive c - store image and attract customers to their stores.

5.3 Limitation and directions for future research

The convenient sampling method used by the authors may be deemed suitable for this study. However, the research results cannot be generalized to the overall target customers of the retail market. Besides, because data is collected from only one city, it is not generalized for the whole country. The research direction proposed in the future will be empirical about the dimensions that consumers in the whole country with many segments use to evaluate store images, such as youth, elderly, homemakers, to verify theirs.