A STUDY ON THE IMPACT OF STORE ATMOSPHERIC ATTRIBUTES ON CUSTOMERS EXPERIENCES AND THEIR BEHAVIORAL INTENTION AT SIME

DARBY AUTO BAVARIA SDN BHD, GLENMARIE, SHAH ALAM

AKMAL SYALWANI BINTI IDRIS

2010132513

BACHELOR OF BUSINESS ADMINISTRATION

WITH HONOURS (RETAIL MANAGEMENT)

FACULTY OF BUSINESS MANAGEMENT

UNIVERSITI TEKNOLOGI MARA

SHAH ALAM

DECEMBER 2013

A STUDY ON THE IMPACT OF STORE ATMOSPHERIC ATTRIBUTES ON CUSTOMERS EXPERIENCES AND THEIR BEHAVIORAL INTENTION AT SIME

DARBY AUTO BAVARIA SDN BHD, GLENMARIE, SHAH ALAM

AKMAL SYALWANI BINTI IDRIS

2010132513

Submitted in Partial Fulfillment of the

Requirement for the

Bachelor of Business Administration with Honours (Retail Management)

FACULTY OF BUSINESS MANAGEMENT

UNIVERSITI TEKNOLOGI MARA

SHAH ALAM

ii

DECEMBER 2013

DECLARATION OF ORIGINAL WORK

BACHELOR OF BUSINESS ADMINISTRATION WITH HONOURS (RETAIL MANAGEMENT)

FACULTY OF BUSINESS MANAGEMENT UNIVERSITI TEKNOLOGI MARA

"DECLARATION OF ORIGINAL WORK"

I, AKMAL SYALWANI BINTI IDRIS, (I/C Number: 911026105140)

Hereby, declare that: This work has not previously been accepted in substance for any degree, locally or

overseas, and is not being concurrently submitted for this degree or any other degrees. This project-paper is the result of my independent work and investigation, except where otherwise stated. All verbatim extracts have been distinguished by quotation marks and sources of my information have been specifically acknowledged.

Signature: _________________________ Date: ______________________

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LETTER OF SUBMISSION

Date of Submission: December 2013

The Programme Coordinator, Bachelor of Business Administration (Hons) Retail Management Faculty of Business Management Universiti Teknologi MARA 40450 Shah Alam Selangor.

Dear Sir/Madam,

SUBMISSION OF PROJECT PAPER

Attached is the project paper titled A STUDY ON THE IMPACT OF STORE ATMOSPHERIC ATTRIBUTES ON CUSTOMERS EXPERIENCES AND THEIR BEHAVIORAL INTENTION AT SIME DARBY AUTO BAVARIA SDN BHD, GLENMARIE, SHAH

ALAM to fulfill the requirement as needed by the Faculty of Business Management, MARA University of Technology.

Thank you

Your sincerely

AKMAL SYALWANI BINTI IDRIS 2010132513 Bachelor of Business Administration (Hons) Retail Management

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ACKNOWLEDGEMENT

All praise due to Allah SWT, the Lord of the world that makes it possible for me to complete this project paper. Blessing and salutation also be on Prophet of Allah SWT, Muhammad SAW. I would like to take this opportunity to express my gratitude and appreciation to the following individuals whose gave their guidance, advice and contribution in preparing this research paper.

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First of all, I would like to express my gratefulness and appreciation to my advisor, Dr. Lennora Putit for her guidance, encouragement and advices throughout the process of completing this project paper. Without her, this paper work cannot be complete successfully. Word of appreciation also goes to my supervisor of practical training, Mr Mohd Sykhed Fadly Bin Mat Husin, the Business Operation & Distribution Executive at Auto Bavaria Glenmarie and all the staffs Auto Bavaria Glenmarie for their cooperation and tolerance.

Very special thanks to my beloved parents, Encik Idris Bin Ramli and Puan Maznah Binti Yahya for their constant love and moral supports throughout my years of study. I also would like to thanks to my beloved friends that always supports and gave encouragement to complete this study. I also like to thank to all respondents of this study which this study would not have been successful. Last but not least, my thanks to all who are involved direct and indirectly in the process of completing this study.

Thank you.

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TABLE OF CONTENTS

Page

TITLE PAGE.................................................................................................................................. i

DECLARATION OF ORIGINAL WORK....................................................................................ii

LETTER OF SUBMISSION..........................................................................................................iii

ACKNOWLEDGEMENT..............................................................................................................iv

TABLE OF CONTENT...................................................................................................................v

LIST OF FIGURES.........................................................................................................................x

LIST OF TABLES ........ xi

LIST OF ABREVIATIONS ... xiii

LIST OF APPENDICES xv

ABSTRACT .. xvi

CHAPTER 1 INTRODUCTION

1.0 Background of study .......................................................................1

1.1 Background of company .................................................................5 1.1.1 About Auto Bavaria ........................................................5 1.1.2 Auto Bavaria - Product & Service ..............................6

1.2 Problem Statement...........................................................................7 1.3 Research Questions..........................................................................9 1.4 Research Objectives.........................................................................9 1.5 Hypothesis of Study...................................................................... 10 1.6 Theoretical Framework................................................................. 10

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1.7 Significant of Studies 11 1.7.1 Auto Bavaria 12

1.7.2 Auto Dealership Industry..13 1.7.3 Customers .................13

1.8 Scope of Study ..........................................................................14 1.8.1 Gap of Knowledge.............................................................14

1.9 Limitations of Study......................................................................15 1.9.1 Respondents.......................................................................15 1.9.2 Sampling Location.............................................................15 1.9.3 Secondary Sources............................................................16

1.10 Definition of Terms.......................................................................18

1.10.1 Lighting .............................................................18 1.10.2 Background Music ............................................................18 1.10.3 Color .........................................................................18 1.10.4 Visual Merchandising .......18 1.10.5 Customer Experience ................................................19 1.10.6 Customer Behavioral Intention .19

CHAPTER 2 LITERATURE REVIEW

2.0 Introduction...............................................................................................20

2.1 Review of literature....................................................................................20

2.1.1 Store Atmosphere..............................................................20

2.1.2 Lighting .............................................................21 2.1.3 Background Music ............................................................23 2.1.4 Color .................................................................24 2.1.5 Visual Merchandising .......25 2.1.6 Customer Experience ... 26

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2.1.7 Customer Behavioral Intention..........................................27

CHAPTER 3 METHODOLOGY

3.0 Introduction............................................................................................... 29 3.0.1 Research Design ... 29 3.0.2 Quantitative Design ..... 29

3.1 Data Collection Method.... 30 3.1.1 Primary Data..... 30 3.1.2 Secondary Data..... 30

3.2 Sampling Design... 31 3.2.1 Target Population.. 31 3.2.2 Sampling Frame and Sampling Location.. 31 3.2.3 Sampling Elements....... 32 3.2.4 Sampling Technique..... 32 3.2.5 Sampling Size... 33

3.3 Research Instrument.............................................................................................. 33 3.3.1 Questionnaire Design........ 34

3.4 Construct Measurements....... 35 3.4.1 Scale Definitions....... 35 3.4.2 Sources of Measurements. 36 3.4.3 The survey instruments ....... 37

3.5 Getting the data for analysis..... 39

3.6 Data Analysis.... 40

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3.6.1 Descriptive Analysis. 40 3.6.2 Scale Measurements...... 41

3.6.2.1 Reliability Test.. 41 3.6.2.2 Exploratory Factor Analysis .... 42

3.6.3 Inferential Analysis... 42 3.6.3.1 Pearson Correlation Analysis.... 43

3.6.4 Multiple Regression Analysis... 43

CHAPTER 4 DATA ANALYSIS

4.1 Preamble .... 45

4.2 Demographic Profile .. 45

4.3 General Information ... 52

4.4 Exploratory Factor Analysis .. 56

4.5 Reliability Test ....... 60

4.6 The Central Tendencies Measurement of Construct .. 61

4.7 Correlation Matrix ..... 67

4.8 Multiple Regression Analysis 72

4.9 Multiple Regression Equation .... 76

CHAPTER 5 CONCLUSION AND RECOMMENDATION

5.0 Preamble .... 78 5.1 Discussions 78

5.1.1 Lighting 78 5.1.2 Background Music ... 79

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5.1.3 Color .... 79 5.1.4 Visual Merchandising .. 80 5.1.5 Customer Experience & Behavioral Intention

& the Best Atmospheric Factors .... 80

5.2 Conclusions 81 5.2.1 Lighting 82 5.2.2 Background Music... 83 5.2.3 Color 84 5.2.4 Visual Merchandising .. 84 5.2.5 Customer Experience ... 85 5.2.6 Customer Behavioral Intention .... 86

5.3 Implication of Study .. 86 5.4 Recommendations for Sime Darby Auto Bavaria Sdn Bhd ... 88

5.4.1 Lighting .... 89 5.4.2 Background Music.... 90 5.4.3 Color 91 5.4.4 Visual Merchandising .. 92

5.5 Recommendations for Future Research . 93

REFERENCES ..96

APPENDICES ............ 99

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LIST OF FIGURES

Page

Figure 1.1: The effect of design factors on store image and consumers expectation of merchandise quality by Jungmi Oh 2

Figure 1.2: The relationship between the store atmospheric cues and the effect on consumer by Ishwar Kumar ......3

Figure 1.3: The Mehrabian-Russell model on the effect of environmental stimuli on emotional state and customer behavior ... 4

Figure 1.4: The theoretical framework of relationship between the store atmospherics attributes, experience perceived by the customer and their behavioral intention ..... 11

Figure 4.1: Percentage of Respondents based on Gender.... 45

Figure 4.2: Percentage of Respondents based on Age......46

Figure 4.3: Percentage of Respondents based on Nationality ......47

Figure 4.4: Percentage of Respondents based on Race ....... 47

Figure 4.5: Percentage of Respondents based on Highest Academic Qualification ... 48

Figure 4.6: Percentage of Respondents based on Employment Status ... 49

Figure 4.7: The Percentage of the Respondents First Product Purchase ....... 52

Figure 4.8: The Percentage of the Respondents Second Product Purchase ....... 53

Figure 4.9: The Percentage of the customers rating whether Auto Bavaria needs atmosphere changes or not? .... 54

Figure 4.10: The Percentage of the medium that respondent knows Auto Bavaria (1) .. 54

Figure 4.11: The Percentage of the medium that respondent knows Auto Bavaria (2) .. 55

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LIST OF TABLES

Page

Table 3.1: Sources of Measurement..... 36

Table 3.2: The Survey Instruments ..... 37

Table 3.3: The Rule of Thumb for Cronbachs Alpha Coefficient Value 41

Table 4.1: Summary of Demographic Profile ..... 50

Table 4.2: KMO and Bartletts Test .... 56

Table 4.3: Total Variance Explained ... 57

Table 4.4: Rotated Component Matrix .... 58

Table 4.5: Summary of Reliability Analysis ... 60

Table 4.6: Summary of Central Tendency for Lighting ...... 61

Table 4.7: Summary of Central Tendency for Background Music ..... 62

Table 4.8: Summary of Central Tendency for Color .......... 63

Table 4.9: Summary of Central Tendency for Visual Merchandising ............ 64

Table 4.10: Summary of Central Tendency for Customer Experience ... 65

Table 4.11: Summary of Central Tendency for Customer Behavioral Intention ............ 66

Table 4.12: The Correlations between the Store Atmospheric Attributes and the Customers Experiences .. 67

Table 4.13: Correlation between Customers Experiences and their Behavioral Intention ........ 68

Table 4.14: The Correlation between the Customers Experiences and the Behavioral Intention (Store Atmosphere helps me to make to make a decision) .. 69

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Table 4.15: The Correlation between the Customers Experiences and the Behavioral Intention (The store atmosphere makes me comfort to stay longer in the store) .... 69

Table 4.16: The Correlation between the Customers Experiences and the Behavioral Intention (The atmospheric factors in this store are successful in putting trust in me) ... 70

Table 4.17: The Correlation between the Customers Experiences and the Behavioral Intention (I would like to recommend other peoples to come and buy product/services from this store)... 71

Table 4.18: The Correlation between the Customers Experiences and the Behavioral Intention (I would like to purchase again in the future) ...... 71

Table 4.19: Multiple Regression Analysis; Model Summary (First Model) ... 72

Table 4.20: Multiple Regression Analysis; ANOVA (First Model) ... 72

Table 4.21: Multiple Regression Analysis; Coefficients (First Model) ...... 73

Table 4.22: Multiple Regression Analysis; Model Summary (Second Model) .. 74

Table 4.23: Multiple Regression Analysis; ANOVA (Second Model) ....... 75

Table 4.24: Multiple Regression Analysis; Coefficients (Second Model) .. 75

Table 4.25: Summary of hypotheses result for store atmospheric attributes and customer experience (First Model) .. 76

Table 4.26: Summary of hypothesis result for customer experience and the customer behavioral intention (Second Model) .... 76

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LIST OF ABBREVIATIONS

ANOVA Analysis of Variance

BM Background Music

L Lighting

C Colour

VM Visual Merchandising

CBI Customer Behavioral Intention

BI Behavioral Intention

CE Customer Experience

DV or Y Dependent Variable

IV or X Independent Variable

H Hypothesis

r Correlation Coefficient

R2 Coefficient of Determination

B Beta

Std. Error/ SE Standard Error

Sig. Significant

SPSS Statistical Package for Social Science

S.O.R Stimulus Organism Response

BMW Bayerische Motoren Werke

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R & D Research and Development

LED Light Emitting Diode

ACCA Association of Chartered Certified accountants

IT Information Technology

PHD The Doctor of Philosophy

BPS BMW Premium Selection

LPGA Ladies Professional Golf Association

KMO Kaiser Meyer Olkin

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LIST OF APPENDICES

Page

Appendix 1.0 Questionnaires....... 1

Appendix 2.0 SPSS Data Analysis .. 6

A. Frequency Distribution B. Reliability Test C. Central Tendencies Measurement of Construct D. Exploratory Factor Analysis

Appendix 3.0 Pictures.................................................................................................................. 31

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ABSTRACT

The purpose of this study is to investigate the relationship between the store atmosphere factors, customer experiences and behavioural intention at Auto Bavaria, Glenmarie. It also aims to examine the influence and effect of having good and interesting store atmosphere towards customer experiences and then will resulting to a positive behavioural intention. There are four contributing factors of store atmosphere are being identified, which are lighting, background music, colour and visual merchandising which is also the independent variables in this research, while the experience perceived by the customer known as the mediating variable and the customer behavioural intention as a dependent variables. Each of the store atmosphere attributes was tested to determine and measure the relationship with customer experience and their behavioural intention. Besides that, this study also wants to concentrate on the customers perception and evaluation toward store atmosphere in Auto Bavaria, Glenmarie. Different SPSS analyses such as reliability test, factor analysis, correlation and regression are carried in order to interpret the customers response towards the atmospheric factors. The questionnaires were filled by the respondents who already purchase products and also customer who come to Auto Bavarias showroom and intend to buy cars, motorcycles, parts or accessories at Auto Bavaria. For this quantitative research, a total of 170 respondents participated in the survey. The participating respondents represented a return rate of 92% after distribute the questionnaire directly to the respondents face to face, by email and mail.

Key words: Store atmospheric attributes, Customer experiences, Behavioural Intention, Auto Bavaria

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CHAPTER 1: INTRODUCTION

First of all, in Chapter One, researcher briefly explain the broad scope of this research which includes the background of study, description of the company, problem statement, research questions, research objectives, hypothesis of the study, theoretical framework, significant of study, scope of study and limitation of study.

1.0 Background of Study

For retailers and store managers, shopping is the art of persuasion. Though there are many attributes that can influence how and what the consumers will buy. However, visual cues such as lighting, background music, color and visual merchandising being the strongest and most persuasive factors compared to the other attributes (Bohl, 2011).

In 1973, Kotler has introduced the concept of store atmosphere, that is, the effort to design a physical store environment that provides specific emotional effects to the customers that encourages customer behavior. The buying process in a retail atmosphere is triggered when the customer recognize that they put high expectation towards a store (Bohl, 2011).

Along with the trends toward retail innovation and evolution, retailers and store managers now interested in how shoppers get experience while they come to the store. It has long been recognized that consumers respond not only based on the product or service quality itself but they also take much attention on the store environment. It is because; besides product and services, the atmosphere of a store also one of the influential factors in the purchase experience

(Kotler, 1973). In fact, Turley & Milliman (2000) believed that store atmosphere contributes to a business success or failure.

Store atmosphere encompass the attributes that aims to strengthen the store environment with the combination of different cues such as lighting, color, background music, and scent. A study found that 87% of Hungarian store managers take attention on retail styles, colors, and size of the store as important part of tactical marketing (Jozsa et al,1999).

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Kotler (1973), found that the earlier meaning for store atmosphere is like a purchase environments was designed to produce specific emotional effects towards the customer and then the purchase probability. Although increasing the sales and profits become the priority objective and missions for most of the retail stores, the store managers have been realized that the level of customers experiences and perceptions while having their visit in the store also become the prime objectives to them. Thus, the retailer especially in the automotive dealership industry wants to make the customer to stay longer in the store, so that customer can explore the ideas and make decision to purchase more products or service since they already attracted to the store atmosphere (dAstous, 2000).

In figure 1.1, based on Jungmi (2007), stimulus in the first box identified as independent variables that used to create store atmosphere. The researcher put the measurement of design factors, storefront design and information display as the main focus in this study. In this framework, the independent and dependent variables are connected through the mediating variables which are the consumers perception towards the store images, safety, convenience, and entertainment. While the dependent variables is the response of the individuals expression and the study concentrate on the consumers expectation towards the merchandise quality.

Figure 1.1: The effects of stimulus (design factors & information display) on store image and consumers expectation towards the merchandise quality

Based on Ishwar Kumar (2010), retail atmospherics as shown in Figure 1.2 consisting of selected atmospheric cues such as lighting that can be discuss about the bright or dim lighting, background music whether it slow, ballads, classical or familiar music, attractive window

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dressing and layouts, unique architectural design, freshness and nice fragrance, appropriate temperature to build a cozy and comfortable environment, match and trendy color coordination, captivating and memorable logo, an ideal type of good and merchandise crowd that can bring behavioral effect to the current and future consumers (Smith and Burns, 1996).

The entire retail environment that includes the design of store brands can develop their own brand messages and consumer experiences throughout the shopping endeavor. The retail environment is harmoniously designed in order to communicate brand personality and the store image. In order to create positive customer perceptions, the retailer can do some innovation project for the store atmosphere and by doing that, the store will provide silent communication with the customers about the retailer's brand value, each element of the retail environment also need to be transformed so that it is differentiated from the other retailers. On the other hand, retailer also can make it more standardized and thus tend to contribute the consumers' purchase decision (Bohl, 2011).

Figure 1.2: The relationship between the store atmospheric cues and the effect on consumer

However, according to Baker (1987), he has identified those environmental cues in a store which are ambient factors (temperature, humidity, background music, scent and cleanliness), design factors (colour, decor, texture, style, pattern, layout, accessories and signage) and social factors which is the influence of human presence in the store area. Based on Baker (1987) study, the ambient factors such as background music and scent did not motivate the customer

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purchase decisions, but it is important to simply meet the customer expectations and experience.

Figure 1.3: The Mehrabian - Russell model on the effect of environmental stimuli on emotional state and customer behaviour

Based on the above figure, it can be known as the model of Mehrabian - Russel which is an approach of Stimulus-Organism-Response (S.O.R) model. There are two focus studies on environmental psychology which is the effect of physical stimuli on individuals emotion and the effect of physical stimuli on the individuals behaviors (Mehrabian & Russell, 1974). Researcher found that, this model can be applied as valuable study to store environments and atmosphere. In this research, the researcher also wants to adapt the Mehrabian - Russell model into the retail scope in order to find the relation between store atmosphere and customers experience.

Besides that, the framework shows that a particular atmosphere can cause certain emotional response in an individual especially for customer in a retail sector. In other words, because of certain atmosphere, it can cause an individual to approach or avoid the environment whether it greater or in lesser degree (Billings, 1990).

In summary, atmosphere enhancement in a retail store is very essential since the customer will

observe the surrounding store area and it automatically can influence the customers experience and perceptions. Besides, a business is impossible to hide their actual store atmosphere from the customer to feel and see by their own.

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1.1 Background of Company

1.1.1 Auto Bavaria Auto Bavaria is the largest auto retail and service organization of BMW, MINI Cooper and Motorrad (Motorcycle, Scooter & Superbike) in Malaysia. This is one of the famous brands of Sime Darby Motors. Establish in 1988; Auto Bavarias organization comprises of fully trained technicians and employees and has a wide range of parts and accessories together with a comprehensive range of equipment that only an authorized BMW dealer can provide. In order to give a good performance whether among the staff or the customer, Auto Bavaria use centralized online system at all Auto Bavaria branches, so it helps the employees to work more flexible and easily know the customers service and product history with more efficiently and effectively.

Over the years, Auto Bavaria has successfully built BMW into one of the most desirable luxury automotive brands in the country. Today, Auto Bavarias nationwide network infrastructure comprises five branches, namely Glenmarie, Sungai Besi, Kuala Lumpur, Penang and Johor Bahru. Auto Bavaria Glenmarie and Penang also houses the BMW Motorrad and MINI Cooper showroom. In addition, our BMW Premium Selection centre is in Glenmarie and Kuala Lumpur. Auto Bavaria has the competitive advantage among the others competitors dealer in Malaysia such as Ingress, Quill, Pendragon, Wearness Autohous, Regas and Tian Siang. It is because Auto Bavaria contributes majority of shares in BMW Malaysia and also already being in the markets for 25 years.

Every Auto Bavaria branch is staffed with passionate professionals dedicated to providing world class sales and aftersales service that beyond the customers expectations. In benchmarking Auto Bavaria against the best BMW dealers in the world, they make customer satisfaction as the top priority at Auto Bavaria. They record possibly the highest man hours in training annually in the local automotive industry to keep their staff on top of the latest innovations and technologies and constantly review processes to improve efficiency. At Auto Bavaria, they are committed to making the customers BMW experience extend beyond their purchase.

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1.1.2 Products and services Auto Bavaria products includes BMW cars (1 series, 3 series, 4 series, 5 series, 6 series, 7 series, x series, z4, m series, and hybrid cars) BMW Bikes and also known as Motorrad (Sport, Competition, Tour, Roadster, Enduro, and Urban Mobility), MINI Cooper (MINI S, MINI Coupe, MINI Cabrio, MINI Clubman, MINI Countryman, MINI Paceman, MINI John Cooper, MINI Bayswater, and MINI Baker Street).

Besides providing new car from the factory, Auto Bavaria also offer used car for the customer. This package is known as BMW Premium Selection (BPS) since 2008. Even the customer owned used car from the BMW products especially at Auto Bavaria, they will get full advantage of buying this type of car same with the customer who buy a new car. It is because, Auto Bavaria only offer recent BMW models with low mileage and complete service history will be considered. To make the cut, all vehicles then undergo a thorough car services includes systems, mechanisms and safety components. Used car prices with the new car security and warranty, which is the promise from Auto Bavaria.

In addition, the customer also can enhance their lifestyle through Auto Bavaria Approved Body Shop and also buy BMW parts, accessories and gifts. Through Auto Bavaria Body Shop, they provide top quality collision repair, painting solutions, consultation and many other service for the customers. The customer also can enjoy the exclusive parts and accessories design for their BMW and MINI Cooper. Auto Bavaria only offers the original BMW accessories that undergo stringent quality and safety test to fit seamlessly to the customers vehicles.

On the other hand, Auto Bavaria offers the customer opportunity to trade in their old BMW car to a new one. Based on the terms and technical appraisals, Auto Bavaria will be able to provide the customer with a fair trade in price for the customers to own a new car.

In short, whether the customer are looking to buy or trade in, rest assured that Auto Bavarias team of experts will personally help the customer browse for a car to suit their

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finance and lifestyle. The customers trust and confidence in Auto Bavarias team become the first priority and also committed in helping the customer enjoy the sheer driving pleasure with BMW.

1.2 Problem Statement In this globalization era, many companies found that, the store atmosphere plays important roles in a store. Besides, it becomes a critical issue since the customer being more alert, sensitive and also knowledgeable because of the exposure of the information and news. From the previous studies, there are a lot of issues can be highlight in this research such as the lighting problems, the incompatibility of stores colour combination, the choice of background music are not appropriate, and the visual merchandising arrangement are not suitable (Zeynep & Nilgun, 2011).

Nowadays, there are too much competition among the automotive dealership industry in Malaysia whether by locally or internationally. Thus, those store manager need to take an active part to make a different and creative ideas to be idealize in their respective store atmosphere (Zakuan, 2009). According to Zeynep & Nilgun (2011), the store manager can try to create attractive store atmosphere by using mix and matching method from different store atmosphere factors. It means that, the manager can apply different combination of various stimuli (colour, light, smell, background music and visual).

Besides that, Auto Bavaria also competes with other BMW Malaysia car dealer such as Ingress, Quill, Wearness Autohous, Regas and so on. The competition between the BMW (Malaysia) car dealers mainly based on service pattern and quality, customers experiences and expectation. Even though they sell the same product as Auto Bavaria, being different in terms of store atmosphere compared to the other dealer is also can be one of the strategies to give fascinate experience to the customer whenever they come to

the store (Nell,2013).

Good store atmospheres are important to give positive impact on customers who come to Auto Bavaria. According Kotler (1973), the atmosphere of a place is more

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influential than the product itself in the purchase decision. When a store features a panoramic atmosphere plus with beautiful decoration, design, colour, lighting, and also having convenient background music, it will create a different experience to the customer (Banat et al, 2012). Today, we can see that, many store manager especially in the automotive sector compete each other in order to accentuate a dynamic store atmosphere. Some companies take the risk to invest a lot of money in their store

atmosphere enhancement activities for the sake of giving a good customer experience (Kent, 2007).

On the other hand, in this case, Auto Bavaria offer luxury types of products and services. So, the expectations from the customers are eventually high (Lamb, 2012). By providing an appealing store atmosphere, it can make Auto Bavaria different from the other car dealer. Actually, when the customer already put high expectations, the company must alert on this issues. Auto Bavaria must show an exclusive and elegant theme in the store since they are offering luxurious brand and products (Gutierrez, 2006).

So, with a convincing atmosphere, customer start to put confident and trust towards the companys abilities and thus inclined and willing to spend more money to purchase the companys products or services (Han, 2011). Therefore, in this research, there are a lot of question can be roll out in order to maintain the exclusivity such as what are the key factors that can influence Auto Bavarias store atmospheres? Does Auto Bavaria manage to provide different impact on their customers, especially in terms of their experiences during their visit in this store? Does Auto Bavaria know how customer evaluates their store atmosphere? Does Auto Bavaria need any improvement regarding to maintain or enhance their current store atmospheres? and what are the different between Auto Bavaria and the other car dealer in term of store atmosphere?

In order to avoid being lag by other competitors, Auto Bavaria need to do something or doing research on this topic. The best ways to collect the information are by letting the customers evaluate the level of store atmosphere performance (Han et al, 2011).

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1.3 Research Questions In this study, there are few questions have been generate to answer the following questions about the factors that can influence the store atmosphere and the effect on the customer experience and behavioral intention. The research study will be guided by the following research question for the investigations as follows:

What is the relationship between the store atmospheric attributes (lighting, background music, color, visual merchandising) and the customers experience in Auto Bavaria? Which atmospheric factors that Auto Bavaria performs the best based on the customers evaluation? What is the relationship between the experience perceived by the customer at Auto Bavaria and their behavioural intention?

1.4 Research Objectives This study is undertaken to investigate the relationship between the store atmosphere factors and its impact on customer experience and their purchase decision. It will focus on the relationship of the four (4) independent variables of atmospheric factors which are store lighting, background music, colour, and visual merchandising, customers experience as the mediating variables and the identified dependent variable; customers behavioural intention (Levy et al, 2009).

The objectives of the study are: To determine the relationship between the store atmospheric attributes (lighting, background music, color, visual merchandising) used in Auto Bavaria and the customer experiences throughout their visit in this store. To know the relationship between customers experience and their behavioural intention at Auto Bavaria. To identify which atmospheric factors that Auto Bavaria has performed the best based on the customers evaluation from the questionnaire.

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1.5 Hypotheses of the Study This study will test the following hypotheses:-

H1: There is a significant relationship between store lighting, and customer experience in Auto Bavaria, Glenmarie.

H2: There is a significant relationship between background music and customer experiences in Auto Bavaria, Glenmarie.

H3: There is a significant relationship between colors and customer experiences in Auto Bavaria, Glenmarie.

H4: There is a significant relationship between store visual merchandising and customer experiences in Auto Bavaria, Glenmarie.

H5: There is a significant relationship between the customers experience and their behavioral intention at Auto Bavaria, Glenmarie.

1.6 Theoretical Framework A theoretical framework consists of concepts, variables, definitions, and existing theories that are used by researcher for particular study. According to Dr Norzaidi (2013), the selection of variables in a study must have the characteristics that can be measured and it is important especially when creating and designing a questionnaire. Theoretical framework must demonstrate an understanding of theories and concepts that are relevant to the topic of research paper.

Theoretical framework is not something that can be found readily in a literature. Researcher must review course readings and pertinent literature such as journals and articles in order to search related theories and analytic models that are relevant to the store atmospheres topic. Selection of a theory should depend on its appropriateness, ease of application, and the explanation itself (Trochim, 2006).

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Figure 1.4

The theoretical framework of relationship between the store atmospheric attributes, experience perceived by the customer and their behavioral intention at Auto Bavaria

The framework above shows proposed framework to serve as foundation of this study. It is modified from the Gajanayake,S & Surangi, (2011) on the research under the title of The Impact of Selected Visual Merchandising Techniques on Patronage Intentions and also based on adaptation of Thang and Tan (2003) S-O-R Model theory. Purpose of this study is to examine the how the independent variables; lighting, color, background music and visual merchandising of a store will bring impact to mediating variables, customers experience and the dependent variables, customer behavioral intention when they visit Auto Bavaria, Glenmarie.

1.7 Significance of Study This study demonstrates how store atmosphere factors affect the customers experience and behavioral intention when they visit to Auto Bavaria in Glenmarie, Shah Alam.

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Therefore, it will give lots of benefits and advantages to several people and also several parties such as:

1.7.1 Auto Bavaria Due to the challenges of competitive markets, all retailers and managers try to build up a meaningful shopping experience (Baker et al., 1992) in order to enchant and retain customers as well as beat all the automotive competitors. Many researchers have realized the significant impact of store atmosphere on customer experience and also their behavioral intention (Baker et al., 2002; Bitner, 1992; Hoffman & Turley, 2002; Mattila & Wirtz, 2001; Russell & Mehrabian, 1976).

Auto Bavaria is fiercely competes with many large car dealer/retailer in Malaysia. There are also issues when there are many competitors all over Malaysia that offer the

same products and services such as Ingress Auto, Quill, Pendragon, Regas, Wearness Autohous, Tian Siang and so on. Besides that, Auto Bavaria common competitors that also offer the luxury type of brand such as Mercedes, Audi, and Volkswagen. Do not forget the trend of Asian car production countries such as Japan and Korea that produces a lot of great and quality car like Honda, Toyota, Hyundai, Suzuki and Mitsubishi. Those car manufacturers from the east countries have been success to bring big impact on the automotive industry (Zakuan, 2009).

A creative and compatible store atmosphere will help Auto Bavaria to create their own store values and then automatically can attract the customer eyes and mind during their stay in the store. A thorough study, follow with the store innovation also can turn Auto Bavaria as the best automotive store in Malaysia.

In fact, with the attractive store atmosphere, it will give different customers experience which will contribute to increase the sales and profits of the store (Rhee et al, 2012). According to the previous studies, a pleasant store atmosphere can prolong the time consumers spend in the store, increasing the likelihood that the consumer will find something they needs, as well as increasing impulse buying (Tendai et al, 2009). So, it

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will guide Auto Bavaria to improve the store atmosphere in order to gain satisfied customers experience and also profits as well.

1.7.2 Auto Dealership (Automotive) Industry Not only for the customers and Auto Bavaria itself, these researches also bring a significant to the automotive industry out there. With the presence of this study, other automotive companies can take it as reference for their companys research and development activities (R&D). Since the literatures about this topic are only few of them, it really can help those automotive industries to make analysis of store atmosphere as a secondary data.

Besides that, by looking the research analysis and description, other companies also can make this research as a source to make store atmosphere improvements, enhance the

store appearance, and know how it bring impact to the customer experiences through the customer evaluation and know what are the customer want exactly (Kumar et al, 2010).

In addition, by conducting this research, we can know that the development of the automotive industry by observing the demanding from the customer, the products and brands innovation, the competitiveness between the automotive companies and so forth (Zakuan, 2009).

1.7.3 Customers When it comes to customer, it is indeed that they will be happy and feels comfortable

with the appealing store atmosphere (Turley & Milliman, 2000). Especially when having a good store atmosphere, it can help the customer to make a right decision with calm and relax mind and also having a good time to think at a comfortable sofa.

According to Turley and Milliman (2000), surrounding with a good lighting, which not too bright and also not gloomy can create a nice atmosphere and also effect the

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customers feeling as well. Besides that, compatible background music also helps the customer to relax while selecting their dream car and enjoy their purchase and service. Moreover, a nice color combination with the choice of elegance color, and of course not a colorful store can bring the mood of exclusivity among the customers. Then, the companies can tell message and stories through their dynamic visual merchandising in the store and thus, from having all the combination of store atmosphere factors can create a perfect store environment. So, it directly will give a great impact to the customer who visit Auto Bavaria and give them some different experience which is like entering the world of class.

1.8 Scope of Study The scope of the study is basically to identify the store atmosphere factors which are lighting, background music, color, and visual merchandising towards customer experience and behavioral intention at Auto Bavaria. There were 170 questionnaires to be distributed to the customers at Auto Bavaria at Glenmarie, Shah Alam who visited and made purchase in the luxury store.

1.8.1 Gap of knowledge To relate all the possible contribute factors of store atmosphere (lighting, background music, colour and visual merchandising) in one single setting to investigate their influences on the customer experiences and also from the customers experience to the behavioral intention, which demonstrate the significant gap of knowledge.

In order to reduce the gap, there were four (4) identified hypotheses that will evaluate the influence of store atmosphere factors toward the customer experience and their behavioral intention. The first hypothesis is whether lighting is significant or no significant with customers experiences. Second is whether background music is significant or no significant with customers experiences while thirdly is whether color in the store is significant or no significant with customer perceived experience and then fourth hypothesis is whether there are relationship between store visual merchandising and customer experience and last but not least the fifth hypothesis which is the second

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model is whether customer experience has a significant relationship with behavioral intention or not.

1.9 Limitation of Study

1.9.1 Respondents Large samples tend to generate better result and minimize the probability errors (Osborne, Jason, & Anna, 2004). In this study, questionnaire survey is conducted based on 170 respondents which are limited and unable to produce a reliable result. The potential that the respondents not return and return but send defective questionnaires are high. Furthermore, the researcher select only 170 respondents due to the limited budget as a full time student and time constraint since the period to finish up this research are only 5 months.

Besides that, some respondents might misunderstand those questions and did not follow the instruction that will in turn affect the results of study. By using five-point Likert-type scale for the questionnaire, respondents may confuse and not be able to express their additional comments and opinions for this study. Moreover, the potential that the respondents did not read the questionnaire properly are high since the researcher provides a lot of questions for the respondents to answer.

1.9.2 Sampling Location In this study, sampling location is a limitation to get a respond from the respondents. The sampling location for the survey is made at Auto Bavaria which is the headquarter

that located at Glenmarie, Shah Alam. Auto Bavaria Glenmarie was chosen as the sampling location because the Glenmarie is the biggest branch compared to the other four branches. Therefore, the branch is the representative of all Auto Bavaria. In despite of that, it may affect the result since respondents may have different perceptions and opinions due to other different branches they visited such as Auto Bavaria Sungai Besi, Auto Bavaria Kuala Lumpur, Auto Bavaria Johor Bahru and Auto Bavaria Penang.

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Furthermore, there is a possibility of a cultural and lifestyle bias playing a role in the outcome of the study.

1.9.3 Secondary Sources Limited information sources and databases can be searched through for this topic of the study. Moreover, some journals and articles may require payment. Due to limited budget, researcher was unable to access those journals or articles that need to be subscribe. In fact, there were only few local researches conducted the research that are applicable to our study. Most of the journals and articles we referred to were based on the topic in foreign countries. Thus, the findings of some journals or articles may not applicable in this research. Thus, researcher had to find more journals to combine and support for validity of the study (Labaree, 2013)

Zeynep & Nilgun (2011) noted that most of the studies only focused on one store atmospheric stimulus or doing it as general research instead of examine few and specific factors together at one time. Therefore, those literature reviews may not be appropriate and slightly different for this research since it mostly discussed different type of store itself.

Recently, this topic which is the study of store atmosphere seems to be quite popular among researchers and retailers from different sectors and countries. For example, Sang Lin Han, (2005) focus on the Korean retail market, Tsepo Peter, (2009) have research on convenience store, Choong Rong Han, (2011) a study about the clothing store, Katelijn Quartier, (2008) a research about food retailing, Wan Asyila, (2013) have study a research about the MPH Bookstore, and Han Shen Chen, (2010), a study of chain store supermarkets.

However, there are only few and limit researches that focus on the automotive dealership industry. So, it is become the researcher limitation because different types of stores must provide different combination of various factors of store atmosphere to support the overall business of those stores. Since the auto dealership industry was been

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not specifically focus in previous research, so in this research, the study will use the relevant store atmosphere factors based on the automotive industry to interpret its effect on experiences and also the behavioral intention. Therefore, it would be more accurate to predict the factors that can give influence on store atmospheres which automatically affects the customer experiences and behavioral intention.

In fact, some literature review for this study is limited especially on the color and visual merchandising factors. Many researchers only concentrated their study on the areas of background music and lighting. Limited source for these two factors which are colors and visual merchandising make it difficult for researcher to have a detail investigation and also have a constraint to make comparisons between the current study and the previous one. Although many studies mentioned background music and lighting as one of the variables to examine, those researchers seldom linked these factors to experience and behavioral intention. There were not many researches and latest study regarding customer experience. In despite of that, background music, lighting, colors, and visual merchandising will be added as important elements in store atmosphere factors for the industry and relate with experience and customer behavioral intention.

On top of that, this study had been done based on Malaysias automotive retailing industry. From the previous studies, many researchers did their studies using the retailing industries of foreign countries such as Korea, China, India, United States, Greek, Hungary, and so on. Therefore, when local retailers apply the results of those studies, sometimes it might be inaccurate and inappropriate to adopt into each particular type of retailing industry especially in this case. It is because different countries have different culture and perspective. The way of their thinking also are not same as

Malaysian. Using wrong application on store atmosphere may lead to reduce the research quality. Therefore, the study regarding the issue is needed in depth on this area based on Malaysias retail industry to help Auto Bavaria understand well about the impact of store atmosphere on customer experiences.

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1.10 Definition of Term

1.10.1 Lighting Lighting can be defined as the kind of igniting or illuminating, the arrangement of lights occurs usually by specific equipment in order to achieve various different of effects. Besides that, lighting is also can refer as the functional use of light to achieve a practical or aesthetic effect. Lighting includes the use of both artificial supplies light such as lamps and light fixtures, as well as natural illumination by capturing light from the sun.

1.10.2 Background Music Background music is the art of sounds arrangement in a time so that it can produce a continuous, unified, and evocative composition, as through melody, harmony, rhythm, tempo and timbre. It is also refers to various styles of music or also known as soundscapes originally intended not to be actively listened to. It is also can be said as supplement or additional features that are apply in a particular situation or event. Background music that is usually played at a low volume and it is not the main focus to be listened by the audience.

1.10.3 Color Color and also known as hue is the element of art that is produced when light, striking an object and it is reflected back to the eye or in other words is the property possessed by an object of producing different effects on the eye as a result of the way it reflects or emits the light.

1.10.4. Visual Merchandising Visual merchandising are includes the combination of products, atmospheres and spaces into a motivating and engaging displays and arranging goods and merchandise assortments within a store to improve the layout and store appearance.

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1.10.4 Customer Experience: Customer experience is the sum of all experience a customer has with a supplier of

goods or services, over the duration of their relationship with the supplier. This aspect includes the customers awareness, discovery, attraction, interaction, purchase, use, transaction, observation and participation.

1.10.5 Customer Behavioral Intention Customer behavioral intention can be defined as a course of action, aim and concern that a consumer brings to deal on a current or future purchase activity. It is known as the theory of reasoned action which is a model for the prediction of human behavior, feeling and attitude. It is also a cognitive plan to perform a behavior that has created through a choice or decision process that focuses on beliefs about the consequences of the action.

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CHAPTER 2: LITERATURE REVIEW

2.0 Introduction

This chapter presents the overview of current literature in the frame of the presented research problem. Each of the bodies of literature is discussed which is focus on the specific nature of the relevant literatures that relates to this study.

A literature review is a step-by-step process that involves the identification of published and unpublished work from secondary data sources on the topic interest, the evaluation of this work in relation to the problem and the documentation of this work (Sekaran & Bougie, 2009, p.38). Therefore, in this study, each independent variables and a dependent variable will be reviewed on previous studies that are related to this topic.

2.1 Review of literature

2.1.1 Store Atmosphere According to Levy and Weitz (2009), store atmosphere is referred as the attribute that aims to intensify the store environment with the combination of different cues such as lighting, colour, background music, layout, space, design and scent. The store atmosphere seems able to affect customer feeling and experiences. Besides, According to Milliman, (1986) categorized atmosphere as a term that is used to explain customer feeling towards the shopping experience which cannot always be seen. When the customers receive fantastic experiences while visiting a store, then, they will pass a

positive word of mouth to their closed peoples such as friends and families. The percentages of the customer to come back to the store are also high since they were comfort with the store environment. In addition, Kotler (1973) was the first one that used the atmosphere term described it as the design of store environment that can stimulate buyers emotions and ultimately affect their purchase behaviour.

Developing a strong positive atmosphere has become important to the companies to sustained competitive advantage. Birtwisle and Shearer (2009), has stated that research

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about the store atmosphere has allowed retailers to create positioning strategies, develop store image and enabled them to differentiate their stores in terms of the products and services on offer. A dynamic store atmosphere also typically form a positive impression of a retail store through various method of communication such as word of mouth, personal experience, advertising, recommendation and so on (Estelami et al,2006).

Sirgy et al. (2000) suggest that a good combination atmosphere factors in a store can create a favorable consuming context and generate positive perceptive emotions about the store among consumers. Store environmental factors can influence the subjective feelings experienced by consumers in the store and influence the shopping experience, consumption amount, perceived quality, satisfaction, and shopping value (Babin & Attaway, 2000). Therefore, a pleasant store atmosphere can affect the time consumers spending in the store.

Based on Hu & Jasper (2006), store atmosphere also give impacts on the customer minds. From years ago, store displays were mainly used only for the promotional purposes. However, as customers nowadays became more sophisticated and knowledgeable, store managers have discovered new roles for effective atmosphere. The latest, store atmosphere play roles like communicating product information and store image, assisting consumers in making purchase decisions and create exiting shopping experience. Moreover, customers perceived that they would be more likely to come a store that have more in-store displays together with high graphics dimension and user friendly meaning (Mitchell & Oppewal, 2009).

2.1.2 Lighting Lighting can be referred as the act of enhancing or illuminating, the light arrangement to create particular effects, an effects occurred by the arrangement of lights, and the way light falls upon a face, objects, products etc, in a various situation (Freyssinier et al,2006). Based on Taylor (2006), lighting is a key design element that contributes to the identity, comfort, and visual quality of a retail store. Reports from Varley (2006) stated that, a high contributor to an appeal store atmosphere is the lighting used. For

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many specialty stores, the lighting design reflects the stores image and as a tool to feature the stores merchandise and business selling strategy

According to Hoyle (2003), a successful lighting at any retail store and business environments has the potential and probability to dramatically affect sales since lighting can increase the floor traffic, create visual interest, bring effect to the color of merchandise and able to direct the customer going through the store either deeper.

Based on Perney (1974), ideal store lighting can draw the customers attention to observe the products particularly. Mehrabian et al (1974), also stated that the lighting which also one of the environmental psychology can bring impact to the customers emotion and experience. Usually, retailer provide a bright lighting in their store because, with this conditions, products are more often examined and touched compared to the dim lighting conditions. Lighting also can influence the attractiveness of products in a store (Magnum, 1998). In the customers eye, products with high light levels were found to be more captivating than products with lower light levels.

Donnovan et al (1994), also stated that a bright light and compatible background music can increased consumer arousal and their enthusiasm. For the perspective of Vaccaro (2008), proper use of light is another method to attract customer attention on specific products, capture certain experience and also hide any retail weakness and error. Occasionally, hiding some parts of store to ensure those the dark areas are a strategy to maintain good store image. In fact, store lighting can influence the consumers perception, emotion, cosiness and experience of store image (Banat, 2012). Besides, lighting also can give impact on consumers cognition, value and at last the purchase decision making.

Lighting in a store did not only focus on the light itself, natural lighting from the glass windows also plays its own role in a store. In automotive industry, most of the retailer chose to have more natural lighting by having a large glass windows setting in their store. People increasingly prefer naturalness as possible, which can be reflected in important aspects like quality (Zumtobel, 2012). In this case, Auto Bavaria must to avoid a fluorescent light because it really can create a low image of it since the

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company involve in luxurious sectors. The company already applies the combination of natural lighting, incandescent and LED type of lighting. The combinations succeed to indicate the store elegance and exclusivity. For Pete (2013), incandescent light fixtures are useful especially for put the customer attention to a certain goods or section in the store. On the other hand, LED light fixtures are relatively new in retail industry. It has many advantages compared to the traditional light fixtures since it is more energy efficient, smaller and flexible to placed anywhere in the store (Pete, 2013). A study from Freyssinier et al (2006), specialty stores like Auto Bavaria itself are rely on glass windows in order to show the expensive and create the interest from the customer.

2.1.3 Background Music

Based on Yalch (1993), background music is the art of arranging sounds continuously, unified, and evocative composition through the melody, harmony, rhythm, and timbre. It consists of various style of music and soundscapes primarily intended to be passively listen and hear by the store visitor. There are many studies show that background music in a retail store can inspires customers to buy and make their shopping experience more pleasant. A store can simply create the mood, able to stimulate the customers mind with install the right music.

Since years ago many retailer set a background music in their store because the ability to enhance the store atmosphere. Besides, music is popularly known as the influence factors of customers emotion and behaviour (Milliman, 1982). Compatible background music means that the store played the right music at the right time which is depends on situation and season to create positive impact on the customer experience (Ruchi et al, 2010).

A lot of studies state that background music is capable of evoking emotional state, leaving a lasting impression and behavioural responses in consumers (Matilla & Wirtz, 2001). Based on Kulkarni (2012), retailer should carefully select music genre, style and tempo from their marketing toolbox. Morrison (2001) stressed that playing classical

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background music can influence the decision making rather than the product itself. It also can create prestigious store atmosphere, leading to a customer perception of luxury merchandise.

According to Milliman (1982), instead of arousing the customers feeling, background music also one of the effective tools to communicate with customers in non verbal way. Playing a happy and upbeat background music can creates customers enthusiasm towards particular products while or slow music able to create high purchase decision and intention (Alpert et al, 1988). In Auto Bavaria, it is not appropriate to play a loud music because the customers need a calm situation in order to think and make a right decision when dealing and purchasing something expensive.

2.1.4 Color According to Kouchekian (2012), many past researchers have been carried out a study about the physiological effects of color towards the customer. It is disappointed when there are still many retailer did not aware or did not know the use of color psychology in their business. Color has a powerful subconscious effect on every part of human lives (Zalanski, Paul & Fisher, 1989). Being understood about the meaning of color especially in business gives the store manager an invaluable tool to create a successful business by do the marketing, promotional efforts and receives best customer experience and feedback.

Color can be defined as the visual perceptual property corresponding in humans to the base categories that we called primary colors which are red, blue, and yellow (Bellizzi, 1992). Color derives from the spectrum of light interacting in the human eyes. With colors the retailers can set mood, attract attention, and also make statement.

Colors also can use to energize and also to cool down. By selecting the right color scheme, the store manager can create an ambience of elegance, warmth and tranquility and convey an image. So, to make it simple, color can be the retailer most powerful design element if they learn to use it effectively (Kemmis, 1998). Auto Bavaria prefers

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the earth color tone as its theme of color. The colors draw from a palette color such as browns, tans, warm, grey white and green. The advantage of having a neutral or earth store color, it can be adapted to any style, from traditional, country and contemporary. Earth tones and the warmth of wood and stone and along with the patina of various metals are the set of the harmonious mood (Annemiek, 2008). By using a neutral color as the store background, it can facilitate the store manager to decorate the store when it come to the seasonal month such as Raya celebration, Chinese New Year, Deepavali, independent day, Christmas and more.

2.1.5 Visual Merchandising Based on Kouchekian & Gharibpoor (2012), Visual merchandising plays many important roles in retail sector. It includes the activity of enhancing the products presentation, support brands, increase store traffic and sales and adds visual excitement, by having strategic arrangement and illuminated the focal destinations in a store atmosphere.

Based on Pillai et al (2003), visual merchandising is the presentation of a store and its merchandise to the customer through the teamwork of the stores advertising, display, decoration, merchandise arrangement, special events, showroom coordination, and merchandising departments in order to sell the goods and services offered by the store. Visual merchandising is becoming more and more important in giving a store competitive edge, since many stores share merchandise sources and therefore carry similar items. In other words, good visual merchandising gives the merchant an invaluable competitive edge as well as defining a stores personality in todays marketplace (Mills et al, 1995).

Based on Moormann (1995), visual merchandising must attract and hold the passerby until it can arouse the interest from the customers. If a display is sufficiently surprising and unusual, a potential customer will view it more closely. Kim (2013) said that visual merchandising can heighten the store images and increase sales efficiency. In order to have a good visual merchandising, the retailer must establish a different strategy such as

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create an enjoyment store atmosphere and organize the merchandise in the store effectively.

Visual merchandising is integrated with the total planning and operation of a store. In addition, top level executives such as store planning director and the visual merchandising director who are the ones that responsible to meet with the corporate executives of a company to determine such things such as the corporate image, changes of physical facilities, seasonal projections and various other retailing innovations (Paul et al, 1995).

2.1.6 Customer experiences Every business provides a customer experience. That experience may be good, bad or indifferent. Customer experience can be defined as a sum of all experiences and perceptions a customer has while purchasing goods or services with a retailer based on all interactions and thoughts about the business. In other words, it is an individual experience whether conscious or subconscious while having a transaction in a store (Gilboa et al, 2003). Customer experience consists of awareness, discovery, attraction, interaction, purchase, communication, and emotion. When a retailer success to deliver and create different experience to the customers, the probability for the customer to spend in the store are high. Besides, experience also can inspire loyalty to the customers (Richardson, 2010).

Based on SAS Institute (2013), customer experience refers to the practice of designing and reacting to customer interactions to meet or exceed customer expectations and thus increase the customer satisfaction, loyalty and advocacy. Good customer experience management can strengthen the brand and store preference through different experiences, boost revenue with incremental sales, improved the customer loyalty through valued and memorable store atmosphere, and also can lower the cost by reducing dissatisfied customer.

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Based on Johnston & Kong (2011), customer experience also a phrase used to describe the relationship a customer has with a business. Customer experience also an integral part of customer relationship management (CRM), and it is important to company because customers who have positive experiences tend to become repeat and loyal customers of a business. Many previous studies stated that whatever the product or service that a business organization offer to the customer to buy or receive, that customer will have the experience whether it good, bad or indifferent (Johnston & Kong, 2011).

There are an issue that companies cannot fully control experiences, because experiences inevitably involve perception, feeling, emotion, and unexpected behavior from the customers. According to Yoo, C.J., Park J.H., & Maclnnis D.J. (1998), to deliver customer experience, the store manager has to know the customer better than ever before. That means creating and maintaining complete customer profiles that help managers to understand and measure the customers experience when dealing with a business transaction. The more relevant the businesss offer, the closer the relationship between the business and the customer (Yoo et al, 1998).

2.1.7 Customer Behavioral Intention

Customer behavior intention is driven by the combination of attitude toward the purchase behavior and individuals beliefs and motivations toward the customer behavior (Burnkrant & Page Jr, 1982). In retail perspective, the intentions usually will be determined by the customer willingness to stay longer in the store, their willingness to repurchase in the future and give the other peoples recommendation and good word of mouth to visit and purchase at the store (Baker et al, 2002).

A model suggested by Mehrabian & Russell (1974), which is the S-O-R model, it is about the customer behavioral response are from the customers intention to approach or avoid a certain environment and it is also called as approach-avoidance behaviors. Approach behavior occur when the customer show a positive response such as willing

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to stay longer in the store, explore, interact, identify in the environment, having a good impression on the environment and intend to return and come to feel the environment again (Han, 2011).

A previous study from Grewal et al (2003), there are important relationship between store environment cues, store choice criteria and the store patronage intention. As state by Grewal at al. (2003), they have identified several amount of control over factors that can contribute to consumers patronage intention. The factors include the social factors, design factors and also the ambient factors (Grewal, 2003). Store managers can creatively design the layout of the store and displaying the merchandise in attractive way to give positive reaction and perception from the customer when being at the retail store. In addition, the store manager also can enhance the stores atmospherics through visual communications, lighting, colors and odor (Kouchekian et al, 2012).

Consumer behavior is a study about the way or attitude of the consumer when it comes to purchase or spending pattern such as how, what, when, and why they buy. It is a combination from various elements which are psychology, sociology, socio psychology, anthropology and economics. Besides that, it attempts to understand the consumer decision making process. The study also includes the consumer characteristics such as their demographics, psychographics, and behavioral variables in order to understand the consumers want (Sangvikar & Katole, 2012).

Based on Kang et al (2010), interesting environmental factors such as pleasant background music, fresh scent, bright light and soft fabrics evoke pleasure and arousal which is lead to patronage intention. Behavioral intention also includes the consumer willingness to buy, spending more time and money, revisit intention, having thought to recommend other peoples and trusting the environment component values (Wakefield & Brodgett, 1996). Behavioral intention become a strong predictors of actual behaviors have thoroughly been researched. Based on Kang et al (2010), 45% consumers are driven to visit a retail store by recommendation by other peoples such as family and friends.

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CHAPTER 3: METHODOLOGY

3.0 Introduction

This chapter is focused on the approach of the study. Chapter Three will have discussion on research design, data and information collection methods, the design of the questionnaire, sampling design and so forth. On the other hand, the methods of data analysis which consists of factor analysis, reliability test, descriptive statistics, mean aid on development of hypotheses for this study.

3.0.1 Research Design

Research design is the important step to gather and analyze the imperative data and assist to find the location of the study, sample size, population and so on. (Sekaran & Bougie, 2009). It also includes the identifications of the four independent variables in this research namely as lighting, background music, colour, and visual merchandising.

3.0.2 Quantitative Design

Quantitative research will be applied based on the nature of study to gather a representative data from the targeted respondents. To better understand the impact of store atmosphere on customer experience and behavioral intention through several factors that have been selected, researchers have often focused on quantitative approaches by (Turley and Milliman, 2000). It is used to quantify attitudes, opinions, expectations, experience and behavioral intention of the customers that have been visited to Auto Bavaria. The advantage of using quantitative research is that it produces reliable data that are usually qualified to some large population. In this study, online and paper survey are used to collect the data from the respondents (Wyse, 2011).

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3.1 Data Collection Methods

In this study, there are two ways in gathering data which is through primary and secondary data.

3.1.1 Primary Data

According to Naresh (2010, p. 132), primary data will be organized for the specific purpose of addressing the problem on hand. The primary data that will be used is questionnaire survey whether by online or manual. While distribute the questionnaire, the researcher need cooperation and clarification from the respondents. Besides that, primary data refer as first hand information or data obtained originally by the researcher on the variables of interest for the specific purpose of the study (Sekaran & Bougie, 2009, p.180). The questionnaires were distributed to the respondents whom their respond and answers may differentiate on specific issues regarding to the topic. Questionnaires can be efficient data collection mechanism of what and how to measure the selected variables. Those questionnaires were distributed personally to the respondents.

3.1.2 Secondary Data

According to Sekaran & Bougie, (2009, p.184), secondary data refer to information gathered by other party that already conduct a previous study. It helps researchers to get better understand and define the problems. To obtain secondary data, the previous researchers study can be obtained through online journal databases such as ProQuest, EBSCOhost, Emerald Journal, Malaysian Thesis and other available databases which are available in Universiti Teknologi MARA (UiTM) online databases. Furthermore, the relevant articles and other sources through internet and online library are aiding in the research. It requires inexpensive cost, time consuming and energy to the researcher. The advance of technology helps a lot in finding resources especially the Internet.

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3.2 Sampling Design

There are five steps under sampling design which are determining the target population, setting sampling frame and location, deciding the sampling elements, selecting sampling techniques and determining the sampling size of respondents.

3.2.1 Target Population

Target population is the group of people where researcher is interested in analyzing to get relevant information for research purpose. The population refers to the entire group of

people, events, or things of interest that the researcher wishes to investigate. (Sekaran & Bougie, 2009, p.262). On the other hand, convenience and simple random sampling has been chosen in order to select the customer in Auto Bavaria Glenmarie which is the respondents in this study. Convenience sampling a method of finding the data by selecting people because of the ease of respondent volunteering or selecting units because of their availability and easy access (Sedgwick, 2013). While simple random sampling is one of the probability sampling which is randomly selected sample from a larger sample or population (McCullagh, 2007).

3.2.2 Sampling Frame and Sampling Location

According to Sekaran & Bougie, (2009, p.267), the sampling frame is a (physical) representation of all elements in the population from which the sample drawn. In this study, the sampling frame will be the customers that are already made any purchase or the potential customer at Auto Bavaria Glenmarie. In fact, the sampling location for the survey

is the various sales and customer area in Auto Bavaria Glenmarie such as the sales and service area of BMW cars, Motorrad (Motorcycle, bike, & scooter), MINI Cooper cars and after sales areas, parts, accessories and gift areas, customer services department, cars service and so on . Auto Bavaria Glenmarie, which is a headquarter branch was selected as the representative of all Auto Bavarias branches (Sg. Besi, Kuala Lumpur, Johor Bahru, Penang) in Malaysia. Auto Bavaria Glenmarie has the advantage to do the customer survey

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since it is headquarter, the biggest and also success to attract a lot of customers compared to other branches. The store is located at Sime Darby Auto Bavaria Sdn Bhd, 3A, Persiaran Kerjaya, Taman Industrial Park, Section U1, Glenmarie, 40150 Shah Alam, Selangor.

3.2.3 Sampling Elements

The respondents in this study referred to customers who perceived the service at Auto Bavaria Glenmarie Branch. Total of 170 populations range from 20 to 70 years old were selected in this study. Besides that, it also includes foreign respondents since Auto Bavarias market are wide and international. The reason to choose these sampling elements are because they are the main subject in this research since the research topic is about the store atmosphere that can be experienced by the customer itself and in fact there are only few obstacle in language issues since most of the customers understand and using English very well.

3.2.4 Sampling Technique

In this study, convenience and simple random sampling technique was selected. To assess customer's perceptions on store atmosphere factors at Auto Bavaria, researcher has to get

organized sampling frame. To accomplish this, researcher will go through companys customer records and history to identify the customers information such as email, home or office address (Knottnerus, 2003).

Since the researcher will distribute the questionnaire manually to the respondent, convenience sampling is the best sampling technique where subjects are selected because of their convenient accessibility, availability and proximity to the researcher (Crossman, 2013)

Then, researcher has to draw the sample. Decide on the number of respondents researcher would like to have in the final sample. In this research, researcher want to select 170 respondents to survey and that there were thousands customers over the past 12 months. Now, to draw the sample, researcher has several options. As stated by Chambers & Skinner,

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(2003), a mechanical procedure is very feasible, effective and with the development of inexpensive computers there is a much easier way. Here is a simple procedure that is especially useful because researcher already have the customers information on the computer. Many computer programs can generate a series of random numbers. It can be done through EXCEL spreadsheet. Researcher can use the function =RAND() in formula text box which is EXCEL's way selecting random sample. Simple random sampling is simple to accomplish and is easy and a fair way to select a sample, it is reasonable to generalize the results from the sample back to the population (Knottnerus, 2003).

3.2.5 Sampling size

Before distributing the real questionnaire to the selected respondents, researcher needs to pre-test the questionnaires to the other people such as friends and family members. It is important to ensure the respondents understand the questionnaires and to avoid any misunderstanding issues occur in the future. Researcher distributes 5 questionnaires for this pre-test (Israel, 2013). Besides, the researcher also conducts a preliminary study which is an activity of conducting a simple interview about the knowledge of store atmospheric attributes. The purpose of the interview is to know how far the comprehension knowledge of the customer regarding to the atmospherics factors and it is important when the researcher want to construct a questionnaire (Lennora, 2013). If any misunderstanding about the questions, then researcher need to redo the questionnaire until it suits with the purposes of the study.

A total of 170 questionnaires were distributed and 156 questionnaires were collected. It means that, 92% rate of response the researcher success to collect in this survey. Israel (2009) clarified that factors such as cost are critical in determining sample size. Thus, the study will only conducted 170 questionnaires because of the limited budget and also problem of the time constraint.

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3.3 Research Instrument

Questionnaire survey has been used in this study. Questionnaires are defined as the series of questions aim to gather prompt and accurate information from respondents. Thus, in order to perform a good research, a good questionnaire must be designed. Hair, Babin, Money, and Samouel (2003) mentioned that effectiveness and high response rate are the reasons for researchers use questionnaire widely to collect primary data if the population of respondents is well-educated.

3.3.1 Questionnaire Design

There are four basic question-response formats used in order to design a questionnaire which are open, close-ended, scale-response and opinion type of question. According to Hair, Bush, and Ortinau (2006), close-ended questions can be defined as a set of answers that provide by the researcher for the respondent to choose. In this study, researcher decided to apply close-ended questions because it can save respondents time and effort when answering the questions. Respondents can easily pick up any answers from the five-point Likert-type scale. The questionnaire was structured by simple English words and sentence for the respondents easily understand each of the question ask and thus it will contributing of getting accurate answer. The questions is direct, not confusing and only consists of one element in each statement. The researcher attaches the sample of questionnaire in the

Appendix.

In the questionnaire, the respondents will answer some general question provided in the Section A. While in Section B and C, there are six part of question that consist different type of variables. The respondent will rate the questions by using five-point Likert-type scale ranging from 1- strongly disagree to 5- strongly agree. Section D is about respondents demographic information such as gender, age, nationality, race, academic qualification, and status of employment. While in Section E, the researcher gives the opportunity to the respondents to give their comments and opinion about the stores atmosphere. In Section B, consists of questions that related to four (4) independent variables tested in this research. The independent variables are lighting, background music,

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colour and visual merchandising. Lastly, Section C is the questions about the customer experience and their behavioral intention at Auto Bavaria based on store atmospheric attributes stated above. All the provided questions are set in multiple choices to facilitate the researcher get a specific response. The researcher also must be assured that all the respondents responses and information are private, confidential and undisclosed no matter any situation happen.

3.4 Constructs Measurement

3.4.1 Scale Definition Before starting the process of collecting data, the researcher will study carefully which four (4) types of scale which are nominal, ordinal, interval or ratio will be use in this research (Stevens, 1946). In this study, the researcher only use nominal and ordinal in Section A and D. For Section B and C, interval types of ratio are used. Questions in Section B and C are created to test the independent, moderating and dependent variables.

Nominal scale is the lowest form of measurement among other scale. Usually, researcher

used with variables that are qualitative in nature rather that quantitative. This type of scale referred as a way of categorical data or grouping behaviour, where the numerals are used only as labels, type numbers, identifiers, words or letters (Grace, 2012). In addition, a nominal scale also does not involve with any mathematical attributes of magnitude, equal interval, or absolute zero point. It merely mutually exclusive categories and often used as the tool to measures the percentage (Pagano, 2004).

On the other hand, ordinal scale becomes the next higher level of measurement after nominal scale and actually ordinal scales are more accurate compared to nominal scale. As a way of quantification, this type of scale was structured by a set of rankings and the categories of ordinal scale must have a logical or ordered hierarchically to each other which are the most significant characteristics (Brown, 2011). Based on Cliff & Keats (2003), an ordinal data can be use as non-parametric statistics which is important to do the correlation by measuring the association of the variables and it include median, mode, rank order

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correlation and non parametric analysis of variance. The examples for this type of scale are the rank of education qualification and the social economic class (low, middle or high).

Interval scale can be referred as a measurement scale of data where the difference between two values are meaningful and can be quantified (Stevens,1946). According to Price & Oswald (2006), interval scales also has the same rank characteristic as ordinal scales, but interval scales show the differences between each data point which mean that the difference between 1 and 2 on an interval scale is the same as the difference between 4 and 5, or 8 and 9. In interval scale, the research variables and element can be evaluate by those measurement such as satisfaction, level of agreement, frequency, and subjective perception of temperature (Kemp et al, 2012). In the perspective of psychology, a respondent will give a rate to a statement on the Likert scale in which to know the respondents evaluation of agree-disagree with the statement.

3.4.2 Sources of Measurement In this questionnaire, there are seven constructs namely lighting, background music, color, visual merchandising, customer experience and behavioral intention. The scales were adopted from previous study due to the relevance of literature, context and compatibility and reliability. The researcher use five-point scale as the response format with assigned values, ranging from 1- strongly disagrees to 5- strongly agrees.

Table 3.1: Sources of Measurement

No. Construct Adapted from

1. Lighting Freyssinier, J.P. Frering, D. Taylor, J. Narendran, N. & Rizzo, P. (2006) Quartier, K. Christiaans, H. & Van Cleempoel, K. (2008) Choong, R.H. Kuang, S.L. Low, B.Y. Yap, S.F (2011)

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3. Background Music Areni,C.S. & Kim, D. (1994) Alba, J.W. & Hutchinson, J.W. (1998) Yalch, R.F. & Spangenberg, E.R. (2000) Morrison, M (2003)

4. Color Singh, S. (2006) Annemiek, V.E. (2008) Kumar, I. Garg, R. & Rahman, Z. (2010) Bellizi, J.A., Crowley, A.E., & Hasty, R.W. (2001)

5. Visual Merchandising Kim, J.S. (2013) Kouchekian, M. & Gharibpoor, M. (2012) Pillai, K.R. Iqbal, A. Umer, Maqbool, A. & Sunil, N (2011)