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An Evaluative Analysis ofRetail Chains in the 21st

Century

Leon Grove

University of Phoenix


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Committee Membership

Dr. Santosh Sambare, Ph.D. Mentor

Dr. Kevin Banning, Ph.D. CommitteeMember

Dr. Craig Martin, Ph.D. CommitteeMember

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Problem Statement

In the retail chain of consumer goods,there appears to be relatively limited

information on the relationship betweenallocation of resources by these chainsfor marketing, technology andinventory initiatives and customer

satisfaction and customer loyalty.

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Support for the Problem

Statement

Firms that are unable to satisfy customers can expect to

lose market share to rivals offering better products andservice at lower prices (Simon et al., 2009).

Satisfaction is also not always enough to ensure

customer loyalty, even though satisfaction leads to

loyalty in many instances (Pleshko & Baqer, 2008).

Literature supports the hypothesis that customer satisfactionmay not lead to customer loyalty in several situations:

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Purpose Statement

The purpose of this study was to

determine if there is empirical data to

support the hypothesis that retail store

chains can increase customer satisfactionand customer loyalty through allocation of

resources to marketing, technology, and

inventory management systems.

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Significance of Study/Leadership

The significance for the study is that retailing is animportant component of consumers buying andconsumer spending impacts the overall economy.Improvements gained through technology and inventory

efficiency will allow retail store chains to provide thehighest quality products at exceptionally low prices.

Marketing initiatives lead to customer satisfaction andloyalty and helps consumers in particular and theeconomy in general.

This research will help decision makers in implementingprograms which will benefit their customers throughimprovements in satisfaction and loyalty.

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Research Questions

Do retail store chains effectively use tools

such as marketing, technology, and

inventory management systems to

improve customer satisfaction? How technology can be an effective

management tool to improve customers

loyalty?

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Research Questions

How may the inventory management systems

improve customer loyalty?

How may the implementation or maintenance

cost affect customer satisfaction and customer

loyalty as it relates to marketing, technology, and

inventory management systems?

How will management transform thetechnological processes to optimize the level of

customer satisfaction?

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Hypotheses

H1: There is no positive/negative relationship betweentechnology processes and customer satisfaction.

H01: There is a positive/negative relationship betweentechnology processes and customer satisfaction.

H1a: There is no positive/negative relationship betweentechnology processes and customer loyalty.

H01a: There is a positive/negative relationship betweentechnology processes and customer loyalty.

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Hypotheses

H2: There is no positive/negative relationship betweenmarketing spend on customer satisfaction.

H02: There is a positive/negative relationship betweenmarketing spend on customer satisfaction.

H2a: There is no positive/negative relationship betweenmarketing spend on customer loyalty.

H02a: There is a positive/negative relationship betweenmarketing spend on customer loyalty.

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Hypotheses

H3: The efficiency of inventory

management systems do not reduce

retailers cost to improve customer

satisfaction.

H03: The efficiency of inventory

management system reduces retailers

cost to improve customer satisfaction.

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Relevant/Important Research

Betancourt et al., (2007) research results imply that distribution

services are the main mechanism through which retailers can

influence customer satisfaction with a transaction at the

supermarket level (p. 311).

Bowden (2009) conceptualized that companies have a continued

reliance on marketing to assess customer responses to their

products and services in the belief that high levels of satisfaction

will lead to increased customer loyalty, intention to purchase, word-

of-mouth recommendations, profit, market share, and return on

investments (p. 63).

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Methodology

The methodology consisted of two parts:

In the first part, financial data of several retail

store chains was captured. In the second part, an online survey was

used to collect data from customers andanalytical approaches were applied todetermine the relationship between the

dependent and independent variablesnamely marketing, technology initiatives andinventory control systems.

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Target Population

The population for this research study are

several leading retail chain for consumer

goods in the US.

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Sample

The research study surveyed a sample of

consumers to gain a better understanding of

their overall level of satisfaction and loyalty as

well as their satisfaction with specific variablesrelated to their shopping experience at these

stores.

The total sample for this study were 126

respondents who shopped at Wal-Mart,

Target, and Kroger Stores.

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Analyses

The data will be analyzed usingAnalysis of Variance (ANOVA), tounderstand the relationship betweenmarketing, inventory control andtechnological initiatives and customersatisfaction as well as customerloyalty.

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ResultsAnalysis of Variance: Comparison of Overall Satisfaction

SUMMARY

Groups Count Sum Average Variance

Overall, I am satisfied with this store. Wal-Mart 105 366 3.48 1.14

Overall, I am satisfied with this store. Target 103 399 3.87 1.03

Overall, I am satisfied with this store. Kroger 36 140 3.88 0.84

ANOVA

Source of Variation SS df MS F P-value

Between Groups 9.19 2 4.59 4.38 0.01Within Groups 253.14 241 1.05

Total 262.34 243

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ResultsAnalysis of Variance: Comparison of Overall Loyalty

SUMMARY


I consider myself loyal to the store. Wal-Mart 105 290 2.76 1.95

I consider myself loyal to the store. Target 103 324 3.14 1.40

I consider myself loyal to the store. Kroger 37 119 3.21 1.61

ANOVA


Between Groups 9.85 2 4.925 2.94 0.054Within Groups 404.133 242 1.66

Total 413.98 244

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ResultsAnalysis of Variance Commitment to remaining a customer

SUMMARY


I am committed to the store - Wal-Mart 105 294 2.8 1.68

I am committed to the store Target 105 339 3.22 1.46

I am committed to the store Kroger 36 113 3.13 1.55

ANOVA


Between Groups 10.11 2 5.05 3.22 0.041

Within Groups 381.61 243 1.57

Total 391.73 245

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Results

From the above results we can infer that

customer satisfaction, customer loyalty,

and commitment to the store are different

for these stores.

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Results

Evaluation of hypothesis H1

This hypothesis is related to the use of technology Retailers employ technology to facilitate their functions as well as to make

shopping easier and efficient for customers.

Some of the benefits of utilizing technology are: reduction in waiting time

making it easier to locate items in the store

reducing processing time when items are returned

ability to process manufacturers and competitors coupons

The null and alternate hypotheses are noted below:

H1

:T

here is no positive/negative relationship betweentechnology processes and customer satisfaction.

H01: There is a positive/negative relationship betweentechnology processes and customer satisfaction.

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ResultsTable 4-8Analysis of Variance

Test Variable: Overall satisfaction with the store

Reasonable Waiting time

Wal-Mart

Groups Count Average Std. Dev. Std. Error Waiting time is reasonable 13 4.15 .555 .154

Waiting Time is not reasonable 92 3.39 1.09 .114

T-test df P-value

Equal Variances Assumed 2.47 103 .015

It can be inferred that for Wal-Mart store at 95% Confidence Level

Customer Satisfaction is associated with waiting time.

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Target



T-test df P-value


It can be inferred that for Target store at 93% Confidence Level


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Kroger


Waiting Time is not reasonable 20 3.60 .94 .210

T-test df P-value


It can be inferred that for Kroger store at 95% Confidence Level


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Accepted Hypotheses

Wal-Mart Target Kroger

H1: Reject Reject Reject

H01: Accept Accept Accept

H1: There is no positive/negative relationship between technology

processes and customer satisfaction.H01: There is a positive/negative relationship between technology

processes and customer satisfaction.

Based on this analysis the null hypothesis can be accepted that there is apositive/negative relationship between technology processes and customersatisfaction

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Results

Evaluation of hypothesis H1a

This hypothesis is related to the use of technology Retailers employ technology to facilitate their functions to improve customers

loyalty.

Some of the benefits of utilizing technology are: reduction in waiting time

making it easier to locate items in the store reducing processing time when items are returned

ability to process manufacturers and competitors coupons

having advertised items in stock.


H1

a:T

here is no positive/negative relationship betweentechnology processes and customer loyalty.

H01a: There is a positive/negative relationship betweentechnology processes and customer loyalty.

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Test Variable: I consider myself loyal to the store


Wal-Mart

Groups Count Average Std. Dev. Std. Error Waiting time is reasonable 12 3.25 1.22 .351


T-test df P-value


It can be inferred that for Wal-Mart that the relationship customer

loyalty and waiting time is not significant.

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Target



T-test df P-value

Equal Variances Assumed .310 100 .758

It can be inferred that for Target that the relationship customer loyalty

and waiting time is not significant.

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Kroger



T-test df P-value


It can be inferred that for Kroger that the relationship customer loyalty

and waiting time is not significant.

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Accepted Hypotheses


H1a: Accept Accept Accept

H01a: Reject Reject Reject

H1a: There is no positive/negative relationship between technology and

customer loyalty.H01a: There is a positive/negative relationship between technology and

customer loyalty.

Based on this analysis the alternate hypothesis can be accepted that there isno positive/negative relationship between technology and customer loyalty

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Results


This hypothesis is related to marketing spend Retailers spend marketing dollars to employ processes to improve customer

satisfaction.

Some of the benefits of marketing spends are: Prices from most brands lower than other stores

Good customer service Receive circulars with specials in the mail

Has good interior dcor


H2

:T

here is no positive/negative relationship betweenmarketing spend and customer satisfaction.

H02: There is a positive/negative relationship betweenmarketing spend and customer satisfaction.

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Test Variable: Overall satisfaction with this store

Prices from most brands lower than other stores

Wal-Mart

Groups Count Average Std. Dev. Std. Error Prices from most brands lower 63 3.67 .950 .120

than other stores

Prices from most brands not 42 3.21 1.180 .182

lower than other stores

T-test df P-value



Customer Satisfaction is associated with prices from most brands

lower than other stores.32


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Target


than other stores



T-test df P-value






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Kroger


than other stores

Prices from most brands not 24 3.67 .963 .197


T-test df P-value






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Accepted Hypotheses




H2: There is no positive/negative relationship between marketing spendand customer satisfaction.

.

H02: There is a positive/negative relationship between marketing spend andcustomer satisfaction.

Based on this analysis the null hypotheses can be accepted that there is apositive/negative relationship between marketing spend and customersatisfaction

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Results

Evaluation of hypothesis H2a

This hypothesis is related to marketing spend Retailers spend marketing dollars to employ processes to improve customer

loyalty.

Some of the benefits of marketing spends are: Prices from most brands lower than other stores

Good customer service Receive circulars with specials in the mail

Has good interior dcor


H2

a:T

here is no positive/negative relationship betweenmarketing spend and customer loyalty.

H02a: There is a positive/negative relationship betweenmarketing spend and customer loyalty.

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Wal-Mart

Groups Count Average Std. Dev. Std. Error Prices from most brands lower 85 2.75 1.362 .148

than other stores



T-test df P-value

Equal Variances Assumed -.135 103 .893

The results show that for Wal-Mart that the relationship customer

loyalty and prices from most brands lower than other stores has no

significant relationship.37


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Target


than other stores



T-test df P-value


The results show that for Target that the relationship customer loyalty

and prices from most brands lower than other stores has no significant

relationship.38


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Kroger


than other stores



T-test df P-value


The results show that for Kroger that the relationship customer loyalty

and prices from most brands lower than other stores has no significant

relationship.39


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Accepted Hypotheses


H2a: Accept Reject Accept

H02a: Reject Accept Reject

H2a: There is no positive/negative relationship between marketing spendand customer loyalty.

.

H02a: There is a positive/negative relationship between marketing spend andcustomer loyalty.

Based on this analysis the null hypotheses can be accepted thatWal-Mart andKroger that there are no positive/negative relationship between marketingspend and customer loyalty. Target we accept the alternative hypothesis.

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Results


This hypothesis is related to efficiency of inventorymanagement systems Retailers reduces the cost of inventory to improve customer satisfaction.

Some of the benefits of marketing spends are: Extensive variety products/services in the store

Various brands of each product available in store

Good selection of products always present

Products sold are of the highest quality


H3

:T

he efficiency of inventory management systems does notreduce retailers cost to improve customer satisfaction.

H3: The efficiency of inventory management systems reducesretailers cost to improve customer satisfaction.

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Extensive variety products/services in the store

Wal-Mart

Groups Count Average Std. Dev. Std. Error Extensive variety products/services 63 3.67 .950 .120

in the store

Extensive variety products/services 42 3.21 1.180 .182

in the store not reasonable

T-test df P-value



Customer Satisfaction is associated with extensive variety

products/services in the store.42


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Target


in the store

Extensive variety products/services 52 3.65 1.046 .145

in the store not reasonable

T-test df P-value






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Kroger


in the store

Extensive variety products/services 22 3.64 .848 .181

in the store

T-test df P-value






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Accepted Hypotheses




H3: The efficiency of inventory management systems does not reduce retailerscost to improve customer satisfaction.

H03: The efficiency of inventory management systems reduce retailers cost toimprove customer satisfaction.

Based on this analysis the null hypotheses can be accepted that the efficiencyof inventory management systems reduces retailers cost which may improvecustomer satisfaction

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Accepted Hypotheses

The results are summarized here

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Accepted Hypotheses




H1: There is no positive/negative relationship between technologyprocesses and customer satisfaction.

H01: There is a positive/negative relationship between technologyprocesses and customer satisfaction.

Based on this analysis the null hypothesis can be accepted that there is apositive/negative relationship between technology processes and customersatisfaction

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Accepted Hypotheses


H1a: Accept Accept Accept

H01a: Reject Reject Reject

H1a: There is no positive/negative relationship between technology andcustomer loyalty.

H01a: There is a positive/negative relationship between technology andcustomer loyalty.

Based on this analysis the alternate hypothesis can be accepted that there isno positive/negative relationship between technology and customer loyalty

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Accepted Hypotheses




H2: There is no positive/negative relationship between marketing spendand customer satisfaction.

.

H02: There is a positive/negative relationship between marketing spend andcustomer satisfaction.

Based on this analysis the null hypotheses can be accepted that there is apositive/negative relationship between marketing spend and customersatisfaction

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Accepted Hypotheses


H2a: Accept Reject Accept

H02a: Reject Accept Reject

H2a: There is no positive/negative relationship between marketing spendand customer loyalty.

.

H02a: There is a positive/negative relationship between marketing spend andcustomer loyalty.

Based on this analysis the null hypotheses can be accepted thatWal-Mart andKroger that there are no positive/negative relationship between marketingspend and customer loyalty. Target we accept the alternative hypothesis.

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Accepted Hypotheses




H3: The efficiency of inventory management systems does not reduce retailerscost to improve customer satisfaction.

H03: The efficiency of inventory management systems reduce retailers cost toimprove customer satisfaction.

Based on this analysis the null hypotheses can be accepted that the efficiencyof inventory management systems reduces retailers cost which may improvecustomer satisfaction

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Conclusions

The results shows that marketing, technology, & inventorymanagement systems affects customer satisfaction andcustomer loyalty. It affects customer satisfaction more sothan customer loyalty.

The findings of this study indicates that retail stores canincrease customer satisfaction and customer loyalty byallocating resources to marketing, technology, andinventory initiatives.

It is recommended to spend more on marketing andeffectively deploying technology and reducing inventorycost.

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Limitations/Delimitations

Limitation in this study is related to the online method ofdata collection versus personal interviews or surveys bymail. This methodology does not allow for probing ascompared to personal interview method and may detersome respondents who are not familiar with online

surveys. The delimitation also limits the research study to the

marketing, technology, and inventory managementsystems as they relates to customer satisfaction andcustomer loyalty as opposed to employee involvement,

brand identify, checkout times, customer service, andstore neatness. The delimitation only focuses on howthese independent variables relate to the dependentvariable.

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Recommendations

Retail store chains should evaluate costeffective initiatives that will help improve

customer satisfaction and customer

loyalty.Retail store chains should evaluate how

marketing, technology, and inventory

management systems improves

relationship with consumers.

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Future Study

Researchers may consider obtaining the actual

marketing spend to relate to customer

satisfaction and customer loyalty.

Researchers may consider tracking inventorymovement: brand versus non-brand products

and how they relate to customer satisfaction and

customer loyalty.

Research may consider regional understanding

of the relationship between these variables.

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Questions

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References

Betancourt, R. R., Cortinas, M., Elorz, M., & Mugica, J. M. (2007). Thedemand for and the supply of distribution services: A basis for theanalysis of customer satisfaction in retailing. Quant Market Econ, 5,293-312. Retrieved January 14, 2010, from EBSCOhost database.

Bowden, J. L. (2009). The process of customer engagement: Aconceptual framework. Journal of Marketing Theory and Practice,17(1), 63-74. Retrieved February 2, 2010, from EBSCOhost

database.Simon, D. H., Gomez, M. I., McLaughlin, E. W., & Wittink, D. R. (2009).

Employee attitudes, customer satisfaction, and sales performance:Assessing the linkages in US grocery stores. 30, 27-41. RetrievedDecember 3, 2009, from EBSCOhost database.

Pleshko, L. P. & Baqer, S. M. (2008). A path analysis study of the

relationships among consumer satisfaction, loyalty, and marketshare in retail services.Academy of Marketing Studies Journal,12(2), 111-127. Retrieved October 4, 2009, from EBSCOhostdatabase.

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