THE ROLE OF SALES POLICY AND THE
QUALITY OF STAFF IN SELF-SERVICE STORES
Case of supermarkets and convenience stores
Nguyen Tran Cam Linh, Do Nhu Thao
Abstract
Loyalty is an important factor for the development of supermarkets & convenience stores.
When loyal customer would purchase goods and bring profits for the stores. Therefore,
understanding the factors that affect customer loyalty in order to provide solutions that
enhance loyalty is essential. Identifying that importance, "The Role of sales policy and the
quality of staff in store self-service" research is done, which look forward to contributing to
supply, adding useful theoretical foundation for practical managing supermarkets &
convenience stores. Study uses qualitative research methods and quantitative research
methods to assess more accurately the impact of factors affecting customer loyalty. Then,
giving the solutions and proposals for research subjects in order to improve the value of
customer loyalty to supermarkets & convenience stores.
Keywords (Keywords): Loyalty, sales policies, personnel quality, modern retail channels,
supermarkets, convenience stores.
1. Introduction
According to the trend of globalization, the business sectors in general and the retail business
in particular is subjected to intense competition not only from domestic enterprises but also
from foreign firms. On 01/01/2009, according to the WTO commitments, Vietnam officially
opened market which made the sharing market competition among enterprises become more
intense. Meanwhile, each year, the retail market and services in Vietnam achieved sales of
approximately $ 20 billion (The Youth, 2004), which showed the potential of the sector.
Currently, supermarkets represent the development of modern retail.
According to experts in the field of retail business, the chain of convenience stores in
Vietnam generally and in HCM City particularly is very essential for building model
management which is consistent with the characteristics of population distribution and
current consumption habits. However, in fact, sales of convenience stores still remain low.
1. Nguyen Tran Cam Linh: Lecturer of Open University Ho Chi Minh City, Ph.D student of Ho Chi Minh City of
Technology. E: linhnguyen4.oude.edu.vn
2. Do Nhu Thao: Student of Open University Ho Chi Minh City
According to data from market surveys by the “Saigon Marketing” paper done in the last 3
months of 2008, the market sharing of convenience stores was the lowest with 0.8%, while
supermarkets was 48.2%. Vietnamese seems not familiar with this type of business yet.
In addition, the oriental development of the Ministry of Industry and Trade in the period from
2011 to 2020 has set an important goal that is trying from now to 2020 the modern retail will
account for 40% market sharing of retail distribution, in which expected the growth of
convenience stores will be 35% and it will reach 8,700 billion in 2013. However, the current
problem which the business enterprises of supermarkets & convenience stores have to face is
that they do not really care or understand which factors affect customer loyalty in order to
find out an appropriate focused strategy, to maintain loyal customers for their business. This
issue is a remarkable concern because a business which does not have loyal customers and
can not control the amount of loyal customers has not known as sustainable development yet.
Therefore, the research topic: "The role of sales policy and the quality of the sales staff in
self-service stores" aims to evaluate, compare and clarify the influence of these factors on
loyalty of customers, particularly the sales policy and the quality of the sales staff, and to
propose a number of measures in order to increase the level of customer loyalty.
2. Theoretical Foundations and Research Methods
Loyalty
According to Engel & Blackwell (1982), loyalty is responsive attitude towards the behavior
of one or a few brands of a product in a period of time of a customer or longer period through
the more frequent purchase in a brand, the willingness to pay higher prices and creating a
reputation for the company through positive word of mouth (Ganesh et al., 2000).
A similar approach of Oliver (1999) stated his opinion by combining aspects of behavior and
attitudes in four levels from low to high level of loyalty.
Sales policy and the relationship between sales policy and customer loyalty
In this study, the authors used the scale of Lumpkin et al. (1985) that the sales policy affects a
significant part to the perceived value of the customer, especially in self-service stores in
Vietnam. Some sales policies have been adopted and promoted sales policies such as
discounts, incentives for VIP customers, advertising media, and supporting services…. to
enhance perceived value of their customers, then creating customer loyalty for self-service
stores.
Cronin & Taylor (2002) and Oslen (2002, 2005) found that perceived value has a strong
impact on satisfaction, customer satisfaction, then customers can continue coming back to
buy goods the next time , it is also understood that customers loyal to the store or the
company (Jones & Suh, 2000).
According to Lumpkin et al. (1985), sales policies affected a significant part to the perceived
value of the customer, while Sweeney & Soutar (2001) also confirmed that customer
perceived value is considered as an important in maintaining long-term relationship (possibly
understand as loyalty) between the manufacturer - retailer - customer objectives.
H1: The sales policy influence positively to customer loyalty.
The store’s feature and the relationship between the the store’s feature and customer
loyalty.
According to research by Ahn et al. (2004), Wolfinbarger Gilly (2003), Ranganathan and
Ganapathy (2002), customers feel featured elements of store through three phases: searching
for products, sales services and after-sales service.
In this study, the authors used the scale of Lindquitst (1974, 1975), It is said that the feature
of store is the customers’ assessment indicators to that store. Therefore, conspicuously the
features of store are the highlight that differentiates this store to others that could be
compared.
The features of store directly influence on purchasing decisions of customers (Lumpkin et al.,
1985). According to research by Bettman (1979), Bettman et al. (1998), the features of stores
have strong influence on customer loyalty.
Besides, there are many other authors have researched and identified the important influence
of the features of stores on long-term decisions of customers or be interpreted as loyalty in
the customer’s shopping goods (Dickerson and Albaum, 1977; Hansen & Deutscher,
1977.1978); Lindquist (1974.1975).
H2: The Store’s features impact positively to customer loyalty.
The quality of the staff and the relationships between the quality of the staff and customer
loyalty
The quality of the staff is a level that a staff meets the needs and expectations of customers
(Lewis & Mitchell, 1990). Edvardsson, Thomsson & Ovretveit (1994) suggest that the quality
of the staff is to meet the expectations of their customers and satisfy their needs.
Some other authors identify the quality of the staff including skills and attitudes. In such
skills as: cashing fast, understanding of the business, advising customers whenever they ask
questions and the attitude like: friendly, willing to help customers, understanding customers’
needs (Homburg & Stock, 2005).
The quality of the staff is a factor presented in the scale of quality & service of Dabholka et
al. (1996), which is the staff’s the capability of serving. At the same time, the result of the
research of Barbara Oates et al. (1996) has demonstrated that the quality of the staff affects to
loyalty. If the quality of the staff in a company is well, it will increase customer loyalty for
the company.
H3: The quality of the staff has a positive influence on customer loyalty.
Switching costs and the relationship between switching costs and customer loyalty
As defined by Jackson (1985), switching costs include the total of economic, psychological
and physical costs. In this study, the authors based on the concept of (Jones et al., 2000)
switching cost is a factor which make customers difficult or expensive to switch other
providers. In fact, customers realize a high risk for a store that they never use. This factor is
often used to explain why some customers are not satisfied but still continued to stay with the
current provider (Congate & Lang, 2001).
Switching costs include the cost of time, materials and the inconvenience when customers
want to change other shopping places. These are factors that directly impact on the perception
of the customer, so it affects customer loyalty (Aydin and Ozer, 2005)
According to the study (Julander & Soderland, 2003) have found a positive relationship
between switching costs and customer loyalty or allegiance prefix (Burnham & CTG, 2003;
Jones & CTG, 2000) . The higher switching costs are, the more afraid to change customers
are.
H4: Switching costs have a positive influence on loyalty.
The relationship between the policy and the features of the store.
Customers feel the sales policy through factors: store coupons, the preference for VIP
customers, the convenience of shopping (Babara Oates, Lois Shufeldt, Bobby Vaught, 1996);
Thus, indicating the selling policies have a positive impact on the features of the store
through the advertising of the product in the shops, labeling for supporting services attached
with convenient shopping such as delivery, product support (Lambert, 1979; Lumpkin et al.,
1985; Mason & Bearden, 1978).
H5: The sales policy affects positively to the features of the store.
The relationship between the sales policy and the switching cost.
The sales policies such as reducing commodity prices, advertising products in stores, finding
support facilities, and supporting services for shopping like: delivery, shipping in the shop,
supporting products affected the customers’ feeling (Lambert, 1979; Lumpkin et al., 1985;
Mason & Bearden, 1978). Thus, when customers decide to buy permanently or want to
switch to other types of services, the sales policy of the store or other stores will impact
significantly on the switching. In addition, the switching cost is the additional cost that a
customer must pay for the changes new service providers or the risks of using services from
the new provider (Jones & CTG, 2000). As we can be seen above, sales policies have a
positive impact to the switching cost for various types of self-service stores.
H6: The sales policy affects positively to the switching cost.
Table 1: Scale
No. Factor
Applied scale
2
Quality of Staff: CLNV
The scale of Homburg & Stock, 2005, in conjunction with
Bradford et al., 2009, adjusted through qualitative interviews.
3
Sales policy: CSBH
The scale of Babara Oates et al. (1996), adjusted through
qualitative interviews.
4
Feature of store: DTCH
5
Switching costs: CPRR
In this study, the authors used the scale of Lindquitst
(1974.1975), adjusted.
Scale of Jones et al.(20009), adjusted
6
Loyalty: LTT
The scale was adjusted by Oliver (1999)
3 Research methodology and research findings
Figure 1: Model of Research
Data were collected by direct interviews of respondents who regularly buy at the
supermarket, once or shopping in convenience stores. Samples were selected by convenient
method because of limitation of time and cost. The sample size in the study was determined
based on experience (Bollen, 1989). Accordingly, the sample size to variable is 5:1 (Hair et
al, 1998). The final sample size is n = 268.
Structural Equation Modeling is used to measure the research model. In this model scale was
identified by Exploratory Factor Analysis and confirmed by the method of Confirmatory
Factor Analysis. Distribution of the observed variables was achieved in the normal
distribution value because of Kurtosis values less than 10 (from -.877 to +3373) and
skewness values less than 3.0 (from -.508 to +.143) (Kline, 1998). 29 observed variables are
based on the synthesis of the theoretical foundation and are determined through interviewing
4 experts and 6 individual customers. However, after running Exploratory Factor Analysis
(EFA) and Confirmatory Factor Analysis (CFA), 15 variables were eliminated because of
low factor loading (<0.5) or because observed variables can have a high factor loading that
present in both factors. The result showed the coefficient of factor loading range from 0:58 to
0.94 (Table 2), which correspond to the convergent validity (Gerbing and Anderson, 1988).
Discriminate validity is also satisfied when the results of the correlation coefficient between
the components range from 0.03 to 0.75 (Kline, 1998). Overall, the results of Confirmatory
Factor Analysis (CFA) indicated that all measurement scales are achieved reliability and
convergent and discriminate validity. These results provide research model with a theoretical
foundation was tested in further research. The results of the index shows this model is
consistent with market data (χ2 = 553 151, df. = 242, p = .001, χ2 / df. = 1.620, GFI = .945,
TLI = .962; CFI = .970, RMSEA = .048; HOETLER = 213)
Table 2: Factor loading, extracted variance and composite reliability
The sales policy
Factor Loading
Extracted Composite
Variance reliability
1
2
4
0.929
0.945
0.585
0.7
Factor Loading
Extracted Composite
Variance eliability
Coupons
Preferential
Preferential Updates
The quality of staff
5
6
Ready to serve customers
0.604
Always keep our promises to
customers
0.738
Feature of store
5
4
3
systematical
management
personal customer items
Delivery
secure, spacious parking
Switching costs
2
4
1
Give compliments about service
Introduce others
Be loyal customer
0.62
Extracted Composite
Variance reliability
of
0.803
0.729
0.748
Factor Loading
not familiar with the layout of
other stores
0.885
Time-consuming and costly
0.485
not familiar with the new staff
0.735
Loyalty
1
2
4
Factor Loading
0.45
0.87
0.58
0.8
Extracted Composite
Variance reliability
0.52
0.75
Factor Loading
Extracted Composite
Variance reliability
0.797
0.838
0.656
0.59
0.81
The test results showed that the four hypotheses (H2, H3, H5, H6) is accepted and the two
hypotheses (H1, H4) was rejected. This can be presented a sum as follows: sales policies do
not directly affect customer loyalty (P value = 0107,> 0.05) in the case of individual selfservice store, this factor indirectly affected by specific factors to the store with β = 0.215
(0754 x 0286) (i.e, how the system display and the system of personal items management as
well as delivery methods to help delivery the customer after they have purchased).
Meanwhile, the quality of staffs positively impacted to customer loyalty at the level of β =
0.225 (P = 0.002). Despite the indirect impact on loyalty, the impact of sales policies was still
higher than the quality of the staff in case of self-service stores. Switching costs also do not
play the intermediate role in the indirect effects of sales policy to customer loyalty in the case
of individual self-service stores (H4 rejected with P = 0.304).
3.1 Discussion and conclusions
The concern level of individual customer about sales policy of self-service stores increases,
so the influence of this factor to the path of maintaining customer loyalty becomes clearer.
However, the result confirmed that sales policies do not directly affect to the customer loyalty
of individuals using the service of self-service stores, but affect indirectly through the role of
the features of the store and through the support of customer service (support the system of
personal items management, support for service delivery, and other support related to the
convenient location and the parking lot ....). These are additional services which make service
value increase in the customers’ feelings.
The role of staff is very important in the process of service provision, however, in this case,
study is performed to customers who use the service of self-service stores (i.e supermarkets
and convenience stores) – customers who participate in the service process and take steps
during the main service on their own. Therefore, the role of the staff in the fight to maintain
customer loyalty is somewhat less important than the sales policy, which is perfectly
consistent with the results of the study.
3.2 Recommendations from the researchers
From the research results, it is easy to see the impact of brand reputation and the highlight
features has a very important role in increasing the loyalty of customers for self-service
stores. The management of this typical store should carry out the marketing strategy to
promote increasing levels of brand reputation. Specially emphasizing on strategies to
diversify contributes to increase strongly the features of self-service stores. In addition,
managers should carry out regularly and frequently train the staff to meet the necessary
standards. Need to be aware of that the appreciation assessment of the sales policy’s role and
the staff’s quality and customer loyalty for the sales and the profits of the self-service store is
very important.
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