A Study on the Effect of Corporate Association of the Hypermarket on Relationship Quality and Customer Loyalty

Abstract

Purpose: Using the association concept as a basis, businesses offer association cues-trademarks and logos, for example-to support consumers' associative memories. These stimuli can be connected to anything, including a product's unique personality or the advantages it offers the company that made it. The purpose of this study is to comprehend how hypermarkets' business affiliation, relationship commitment, and trust affect consumers' attitudes and behaviors. Data, methodology, and research design: Regression analysis was used in this study to confirm the relationship between the independent and dependent variables, as well as to forecast how the changes in the independent variable would affect the changes in the dependent variable. Results: These are the findings of the research. First, it was discovered that trust and relationship commitment were significantly impacted by the hypermarket product association, corporate management-related associations, and social responsibility associations. Second, it was discovered that both behavioral and attitudinal loyalty were impacted by hypermarkets' level of trust. Third, it was discovered that both behavioral and attitudinal loyalty were impacted by a hypermarket's relationship commitment. Conclusions: Corporate associations with the hypermarket play an important role in shaping and maintaining consumers' awareness of the company or brand. Since this is affected by various factors such quality of products and services, and corporate social activities, companies need to positively induce awareness of products or services.

1. Introduction

Consumer perception of cognitive as association is a company’s competitive advantage and strategic asset. Customers choose brands based on their perceptions of the firms, especially in the present business environment where there is intense competition across companies and it is difficult to distinguish between products (Aaker, 1991). The company's discriminatory associations give it a significant competitive advantage over the productsit produces because customers are more likely to be positive about the product if they are positive about the company association and negative about the product if they are negative about the company association (Keller, 1998). Corporate association can be viewed as an extensive and focused assessment of customer perceptions and opinions regarding the company, knowledge derived from prior experience with the company, and additional information about the company (Brown & Dacin, 1997).

A large retail store is one that has a floor space of more than 3,000 square meters and consistently supplies products at prices far lower than those of other stores by cutting margin rates and distribution costs with a smart distribution plan. Large retail outlets' management styles are defined by mass purchasing, mass display, low margin high rotation, self-service, little investment, and low prices. These strategies also simplify production and distribution. Due to their business strategy, large retail establishments are positioning themselves to meet the needs of low-cost purchases and the convenience of one-stop shopping by providing a wide range of products for consumers. It targets the middle class specifically and offers the features of bigbox stores that sell reasonably priced goods and services similar to those of department stores. It differs from store to store in that it offers a variety of low-cost sales items, even though some of them are the same. In this study, trust and relationship commitment were set as sub-dimensions of relationship quality, and corporate competency association and corporate social responsibility were set as subdimensions of corporate affiliation for businesses with a customer orientation. The sub-dimensions of consumer loyalty that were established were behavioral and attitudebased loyalty.

2. Literature Review and Hypotheses

2.1. Corporate Associations

When a consumer encounters a product of a certain brand, they have multiple associations associated to that brand, and they base their evaluation of the product upon these associations. Association is defined as something that a consumer remembers in relation to a particular product (Aaker, 1991). A corporate image is a more expansive term than a corporate association, according to Keller (1993), who defined an image as a collection of affiliations. A product image, according to Biel and Aaker (1993), is a collection of attributes and associations associated with a product. Those who recognize these associations come into contact with, pay attention to, interpret, comprehend, store, and recall information about external phenomena, and utilize it to inform their decisions.

Keller (1993) uses the psychology-developed “Associative Network Memory Model” to describe how knowledge about a particular object persists in consumer memory. Any information that is transferred to long-term memory is kept there as a complex concept that combines previously stored information with newly produced information. These concepts are referred to as being made up of a network of nodes and links. When internal information is removed from long-term memory or external information is encoded into memory, a node serves as a source of activation for other nodes. Nodes are places where information is connected by links of varying strengths and store information. According to the associative network concept, an association is a node with additional information that is linked to a particular memory node. According to Aaker (1996), the association of a product in relation to association becomes a factor that sets it apart from other products; in the absence of such discriminatory association, the product’s value declines.

A basic idea known as “corporate association” encompasses all of the knowledge that people have about a corporation. Brown and Dacin (1997) added several viewpoints on corporate image to the idea of corporate association. A company’s general impressions, assumptions, ideas, experiences, emotions, knowledge, information, and assessments of all the data that customers have about it are all included in the broad concept of corporate association (Keller, 1993). It is possible to say that all information about a certain company, including opinions and reasons about the company, is present in people’s memories (Dacin & Brown, 2002), as is the culmination of customers’ opinions, attitudes, and perceptions (Barich & Kotler, 1991).

These business associations are valuable assets that organizations should consider when thinking about expanding their product line. As technology progresses and makes it harder to distinguish between products, corporate associations are becoming even more significant. Beyond the product’s obvious functional benefits, corporate associations can provide discriminatory values that rivals find difficult to copy. These values can give the product reliability, which can be a source of ongoing competitive advantage (Aaker, 1996). For this reason, corporate associations are very important.

Corporate association plays a strategic role in determining criteria for evaluating a company’s overall value and its relative competitive advantage, and it influences corporate evaluation. It can be used as a major index to predict consumers’ favorable feelings and purchase intentions for products (Brown & Dacin, 1997).

2.2. Relationship Quality

When it comes to relationship quality, trust is the disposition to expect the best from the other person and to be willing to trust their intentions or deeds. According to Schuurr and Ozanne (1985), trust isthe degree of confidence that a counterparty will keep their commitments and adhere to the rules in a transaction relationship. It is regarded as a crucial element in the establishment and upkeep of a relationship (Berry, 1995).

Trust can be defined as a strong expectation that a company will help achieve the goal it wants to achieve and a willingness to rely on the company even if there is a risk of harming consumers. Trust is an emotion that is formed when the performance perceived by actual consumers matches the performance expected in advance. To some extent, positive expectations are friendly and sustained; they are not readily destroyed or harmed by transient trading encounters (Huff & Kelley, 2003). Relational factors like trust become more important in transactions than mandatory relationships like laws (Edelenbos & Kllijin, 2007), and relational exchanges between buyers and suppliers were recognized as essential attitudes to maintain long-term relationships ultimately aimed at (Lee & Dawes, 2005). Business-to-business transaction relationships are recognized as relational exchanges, and continuous transaction formation is more important than temporary transaction performance.

Relationship commitment is a key concept in the relationship marketing paradigm, which aims to maintain and grow long-term relationships with customers by understanding their strong desire to do business with a specific company or brand of product (Morgan & Hunt, 1994). Relationship commitment is described as an implicit or explicit promise to relationship persistence in businessto-business relations (Dwyer et al., 1987). Relationship commitment is also said to occur when relationships are valued (Moorman et al., 1992).

2.3. Customer Loyalty

According to Keller (2002), attitudinal loyalty is the degree of a customer’s attachment, sentiment, and immersion to a particular brand. It also describes their attitude attachment to the company’s distinctive values (Chaudhuri & Holbrook, 2001). From a behavioral perspective, customer loyalty was defined as the frequency and purchase rate of customers making repeat purchases of goods and services; from an attitude perspective, however, it was defined as positive attitudes and purchasing opportunities toward particular service providers in terms of psychological immersion or customer preference (Matieu & Zajac, 1990).

Thus, from an attitude perspective, loyalty is viewed as a concept similar to a brand-loving preference or, moreover, attachment. This indicates the potential for loyalty to result in recurrent purchases, even in cases where doing so would be impossible owing to financial constraints or unfavorable circumstances that prevent access to goods and services.

From an attitude perspective, Dick and Basu (1994) categorized loyalty as “the degree of repeated purchase” from a behavioral perspective, and as “the consumer’s relative attitude”. This means that they are categorized as true loyalty if both relative and repeated purchases are high; if the relative attitude is low, they are unfortunate; and if repeated purchases are high, they are labeled as pseudo loyalty.

According to research by Knox and Dimension (2000), there is a psychological barrier that prevents people from buying from other businesses, and when devoted customers repurchase, they are prepared to pay up to twice as much as they did the first time.

This study aimed to investigate the impact of hypermarkets’ corporate associations and relationship quality on consumers’ brand loyalty in Jeollanam-do.

<Figure 1> below provides a detailed description of the model and some possible outcomes.

Figure 1: Research Model

As per the attribution theory, consumers try to perceive the external reality with greater accuracy and have a tendency to voluntarily disclose or rely on communications containing information they consider trustworthy (Kelly, 1973). Furthermore, it is claimed that in the event of a lack of information, a company’s information type—such as an association of social responsibility or corporate ability—is likely to elicit high reliability because the source of the message is not driven by a desire for personal gain (Balasubramian, 1994).

In addition, Keller (1998) asserted that customers’ perceptions of a company’s favorability correlate with their level of trust, while Brown and Dacin (1997) suggested that consumers’ awareness of a company has an impact on their level of trust in its offerings. In a dual model study between corporate association and brand affinity. As a result, the following research hypothesis was developed for this study based on earlier research that clarified the connection between trust and corporate competency association.

H1: The Association with the hypermarket’s corporate competence will affect their level of trust.

H1-1: Trust in the hypermarket will be impacted by the hypermarket’s association with the product.

H1-2: Trust in the hypermarket will be impacted by the quality-related association of the hypermarket.

H1-3: Trust in the hypermarket will be impacted by the hypermarket’s association with the corporate management.

H1-4: Trust in the hypermarket will be impacted by the hypermarket’s association with the corporate attractiveness.

H2: The degree to which customers associate the hypermarket with company-related ability will have a positive influence on relationship commitment with the hypermarket.

H2-1: Relationship commitment with the hypermarket will be impacted by the hypermarket’s association with the product.

H2-2: Relationship commitment with the hypermarket will be significantly impacted by the hypermarket’s quality-related association.

H2-3: Relationship commitment with the hypermarket will be greatly impacted by the hypermarket’s association with corporate management.

H2-4: Relationship commitment with the hypermarket will be significantly impacted by the hypermarket’s association with corporate attractiveness.

H3: Trust in the hypermarket will be greatly impacted by consumers’ associations of the hypermarket with social responsibility.

H3-1: Trust in the hypermarket will be impacted by the customer-oriented association of the hypermarket.

H3-2: The trust in the hypermarket will be impacted by the employee-oriented association of the hypermarket.

H4: The degree to which customers associate the hypermarket with social responsibility will have a positive influence on relationship commitment with the hypermarket.

H4-1: The hypermarket’s the customer-focused association will have a big impact on relationship commitment with the hypermarket.

H4-2: The hypermarket’s the employee -focused association will have a big impact on relationship commitment with the hypermarket.

H5: Consumers’ trust in the hypermarket will have a significant effect on attitudinal loyalty.

H6: Consumers’ trust in the hypermarket will have a significant effect on behavioral loyalty.

H7: Consumers’ relationship commitment with the hypermarket will have a significant influence on attitudinal loyalty.

H8: A major factor influencing behavioral loyalty will be consumers’ level of immersion in their relationships with the hypermarket.

3. Empirical Analysis Results

3.1. The Demographic Characteristics of the Sample

The survey was conducted on 114 consumers attending a hypermarket called ‘Hanaromart’. By gender, males accounted for 50 (50%) and females 50 (50%). In addition, 24 people (21.1%) were under the age of 29, 32 (28.1%) were between the ages of 30 and 39, 36 (31.6%) were between the ages of 40 and 49, and 22 (19.3%) were between the ages of 50 and 59. As for the number of family members, two were 10 (28.8%), three were 32 (28.1%), four were 56 (49.1%), and five or more were 16 (14%). By occupation, there were 14 students (12.3%), 43 office workers (37.7%), nine self-employed (7.9%), 10 civil servants (8.8%), nine professionals (7.9%), and 14 full-time housewives (12.3%).

Looking at the frequency of use, 51 people (44.7%) used it less than once a week, 38 people (33.3%) used it 2-3 times a week, 15 people (13.2%) used it more than 4 times a week, and 10 people (8.8%) used it less than once a month. As an answer to the question about the reason for frequently using the hypermarket, 54 people (25.2%) answered that they use the hypermarket because fresh agricultural products are available. 46 people (21.5%) responded that they use the hypermarket because of its low price, 44 people (20.6%) responded that they use the hypermarket because of its close distance, and 26 people (12.1%) responded that they use the hypermarket because of its abundant product selection.

3.2. Validation and Reliability of the Composition Concept

Every variable in the questionnaire had questions on a Likert scale. To ensure the validity and dependability of the hypermarket’s corporate affiliations, factor analysis and reliability analysis were performed on the variables. This study used varimax rotation, an orthogonal rotation technique, principal component analysis for factor extraction, and factor loading and commonality based solely on variables with a 0.4 or higher value.

We ran the Butlett’s sphericity test and the KaiserMeyer-Online (KMO) test. Furthermore, the reliability analysis used the internal consistency of Cronbach’s alpha value; a value of 0.6 or higher was considered to indicate the presence of reliability. Six factors were extracted through a total of 39 questionnaires as a result of factor analysis on corporate association: “product-related association”, “quality-related association”, “corporate managementrelated association”, “corporate attractiveness-related association”, “customer orientation,” and “employee orientation”. The KMO value was 0.932 and the Bartlett’s spherical test value was 0.000, which was significant. With a total explanatory power of 81.096%, the validity of the six retrieved components was established. Following the reliability investigation, the factors’ dependability was confirmed by the Cronbach alpha values of 0.940, 0.791, 0.884, 0.903, 0.847, and 0.928. All figures are shown in Table 1.

Table 1: Validity Analysis

3.3. Verification of the Research Hypotheses

To determine the impact of the hypermarket’s corporate affiliation on the caliber of relationships and customer loyalty, a regression study was done.

3.3.1. An Examination of the Impact of the Hypermarket’s Company-Related Capabilities on Trust in the Hypermarket

Regression analysis was done to determine how the hypermarket’s corporate ability association affected trust, and the results are shown in the following Table. A statistically significant regression equation was demonstrated by the total explanatory power of 59.9%, the F statistic value of 40.764, the significance probability of 0.000, and the Durbin-Watson statistic of 1.842, which showed that the residuals were independent of one another.

Product-related associations, corporate managementrelated associations, and corporate attractiveness-related associations among the hypermarket’s corporate competency-related associations were found to be statistically significant at the significance level of 5%. If all other factors remained constant, it was determined to have the greatest impact on trust, followed by corporate attractiveness-related associations of 0.163 and productrelated associations of 0.265. Thus, it was decided to accept hypotheses 1-1, 1-3, and 1-4 while rejecting hypotheses 1-2. The analysis result values are shown in Table 2.

Table 2: An Examination of the Impact of the Association with the Hypermarket’s Company-Related Capabilities on Trust in the Hypermarket

3.3.2. An Examination of the Impact of the Hypermarket’s Associations with Corporate Ability on Relationship Commitment with the Hypermarket

The regression equation’s total explanatory power was 56.6%, its F statistic value was 35.603, its statistically significant significance probability was 0.000, and its Durbin-Watson statistic was 1.966, which showed that the residuals were independent of one another.

Product and corporate attractiveness associations were statistically significant within 10% of the significance level among the elements pertaining to the hypermarket’s corporate competence. Furthermore, the standardization coefficient of association linked to corporate attractiveness has a beta value of 0.590, which is higher than the coefficient of association for product year. This suggests that the association associated with corporate attractiveness has a stronger effect on relationship commitment than the association related to product. Thus, it was decided to accept hypotheses 2-1 and 2-4 while rejecting hypotheses 2-2 and 2-3. The analysis result values are shown in Table 3.

Table 3: An Examination of the Impact of the Association with the Hypermarket’s Company-Related Capabilities on Relationship Commitment with the Hypermarket

3.3.3. An Analysis of the Effects of associations of the hypermarket with social responsibility on Trust in the Hypermarket

Regression analysis was performed to determine the impact of the hypermarket’s social responsibility on trust, and the results are shown in the accompanying Table. A statistically significant regression equation was demonstrated by the total explanatory power of 61.8%, the F statistic value of 89.795, the significance probability of 0.000, and the Durbin-Watson statistic of 1.741, which showed that the residuals were independent of one another.

Both customer orientation and employee orientation associations were found to be statistically significant among the hypermarket’s social responsibility associations at the 1% significance level. The customer orientation associations’ beta value of the standardization coefficient was 0.544, higher than the employee orientation association’s 0.300, suggesting that the customer orientation associations had a stronger effect on trust than the employee orientation associations. Thus, it was decided to accept hypotheses 3-1 and 3-2. The analysis result values are shown in Table 4.

Table 4: An Examination of the Impact of the Association with the Hypermarket’s Social Responsibility on Trust in the Hypermarket

3.3.4. An Analysis of the Association with Social Responsibility of the Hypermarket on Relationship Commitment with the Hypermarket

Regression analysis was performed to determine the impact of the hypermarket’s social responsibility on relationship commitment, and the results are shown in the following Table.

A statistically significant regression equation was demonstrated by the overall explanatory power of 27.6%, the F statistic value of 21.142, the significance probability of 0.000, and the Durbin-Watson statistic of 1.834, which showed that the residuals were independent of one another. At the 5% significance level, the relationships between the hypermarket’s social responsibility and customer-oriented and employee-oriented associations were both statistically significant. Additionally, the beta value of the standardization coefficient for customer-oriented associations was 0.290 higher than that of employeeoriented associations, indicating that, under constant conditions, customer-oriented associations had a greater impact on relationship commitment than employee-oriented associations. Thus, it was decided to accept hypotheses 4-1 and 4-2. The analysis result values are shown in Table 5.

Table 5: An Examination of the Impact of the Association with the Hypermarket’s Social Responsibility on the Relationship Commitment with the Hypermarket

3.3.5. An Analysis of the Effect of Trust in the Hypermarket on Attitudinal Loyalty

The outcome of regression study to determine how the hypermarket trust affects attitude loyalty is shown in the following Table 6. A statistically significant regression equation was demonstrated by the total explanatory power of 56.7%, the F statistic value of 84.837, the significance probability of 0.000, and the Durbin-Watson statistic of 1.935, which showed that the residuals were independent of one another. It was discovered that the hypermarket trust significantly influenced attitude loyalty since the trust tvalue was statistically significant at 12.101. Thus, hypothesis 5 was accepted.

Table 6: An Examination of the Impact of the Trust in the Hypermarket on Attitudinal Loyalty

3.3.6. An Analysis of the Effect of the hypermarket’s Trust in the Hypermarket on Behavioral Loyalty

The outcome of regression analysisto determine how the hypermarket trust affects behavioral loyalty is shown in the following Table 7.

Table 7: An Examination of the Impact of the Trust in the Hypermarket on Behavioral Loyalty​​​​​​​

A statistically significant regression equation was demonstrated by the total explanatory power of 49.6%, the F statistic value of 110.101, the significance probability of 0.000, and the Durbin-Watson statistic of 1.865, which showed that the residuals were independent of one another. It was discovered that the hypermarket’s trust had a substantial impact on behavioral loyalty because the trust’s t-value was statistically significant at 10.493. Thus, hypothesis 6 was accepted.

3.3.7. An Analysis of the Effect of Relationship Commitment with the Hypermarket on Attitudinal Loyalty

The outcome of regression study to determine how the hypermarket trust affects attitude loyalty is shown in the following Table 8. A statistically significant regression equation was demonstrated by the total explanatory power of 65.1%, the F statistic value of 209.223, the significance probability of 0.000, and the Durbin-Watson statistic of 1.779, which showed that the residuals were independent of one another. It was discovered that the hypermarket trust significantly influenced attitude loyalty since the trust tvalue was statistically significant at 14.465. Thus, hypothesis 7 was accepted.

Table 8: An Examination of the Impact of the Relationship Commitment with the Hypermarket on Attitudinal Loyalty​​​​​​​

3.3.8. An Analysis of the Effect of the hypermarket’s Relationship Commitment with the Hypermarket on Behavioral Loyalty

The outcome of regression analysisto determine how the hypermarket trust affects behavioral loyalty is shown in the following Table 9.

Table 9: An Examination of the Impact of the Relationship Commitment with the Hypermarket on Behavioral Loyalty​​​​​​​

A statistically significant regression equation was demonstrated by the total explanatory power of 71.2%, the F statistic value of 277.500, the significance probability of 0.000, and the Durbin-Watson statistic of 2.078, which showed that the residuals were independent of one another. It was discovered that the hypermarket’s trust had a substantial impact on behavioral loyalty because the trust’s t-value was statistically significant at 16.658. Thus, hypothesis 8 was accepted.

5. Conclusion

The following are the findings of this study.

First, it was discovered that associations with products, associations with corporate management, and associations with corporate attractiveness among the corporate associations of the hypermarket significantly impacted trust in the hypermarket. It is evident that corporate managementrelated connections are a highly significant factor that has the biggest impact on trust among the hypermarket’s corporate competency associations.

Second, it was discovered that relationships between the hypermarket’s corporate management and products had a major impact on relationship commitment in the hypermarket, with items having the biggest impact. It was discovered that the two factors that had the biggest effects on the hypermarket’s relationship commitment were corporate and product attractiveness, with corporate attractiveness having the biggest impact. It is evident that trust and relationship commitment to the hypermarket are most strongly correlated with associations with product quality, and that the most crucial factor for fully immersing oneself in the hypermarket is corporate attractiveness.

Third, it was discovered that confidence was impacted by both employee- and customer-oriented social responsibility associations among the hypermarket.

Fourth, it was discovered that relationship commitment with the hypermarket was impacted by the hypermarket’s associations with social responsibility that were both employee- and customer-focused.

Fifth, the hypermarket trust takes attitude loyalty into consideration. It turned out to have an impact. Additionally, it was discovered that the hypermarket’s brand affected the way in which trust affected attitude loyalty.

Sixth, the hypermarket’ trust is based on behavioral loyalty. It was discovered to be working.

Seventh, the hypermarket’s dedication to their relationships is predicated on their attitudinal loyalty. It was discovered to have a noteworthy impact.

Eighth, it was discovered that the hypermarket’s relationship commitment significantly impacted behavioral loyalty.

Because the sample in this study was restricted to consumers in Jeollanam-do and was selected at random, there is a limit to how far the research findings can be applied. Additionally, the number of samples that could be used is also limited. It is thought that increasing the number of samples and conducting the research using a probability sampling strategy will enhance the external validity of the study findings in future studies. Additionally, the hypermarket carried out this investigation independently in future studies; however, if industry-by-industry comparisons are made, including hypermarkets and restaurants, corporate sizes (big and small marts), and distribution channels (online and offline), the study will be stronger and have more consequences in the future.