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CHAPTER 2. LITERATURE REVIEW and THEORETICAL MODEL

CHAPTER 2. LITERATURE REVIEW and THEORETICAL MODEL

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retailer as a primary choice. As such, consumer loyalty is measured by the feeling of
loyal, the top-of-mind store choice, and the commitment not to switch to another store.
Sirohi et al. (1998) explore three measures constructing consumer loyalty intention from
consumers. They are willingness to repurchase, willingness to purchase more in the
future, and willingness to recommend the store to others.
James, Walker and Etzel (1975) find loyalty an important objective that every marketers
aims for their products, brands and services. It helps retailer to prolong their business
because of repeated purchase of loyal customers. The strength of this loyalty behavior of
the customer and target market is the key to success of a particular retail business.
Loyalty is supposed to be the highest level of patronage motivation.
Anderson (1973, cited from Osman 1993) describes consumer loyalty from similarity
and contrast theory. Once the customers are loyal to their stores, they will remain loyal
as long as the core attributes of the stores fit perceived important store attributes. If the
performance of some core attributes of the stores decrease, the customers will try to
accommodate by matching other alternative attributes to justify their loyalty. However,
the decrease in perceived important store attributes can be accepted at a certain extent.
The degree of consumer loyalty can be measured by using various variables. (Bellenger
et al., 1976). Among these variables are: the percentage of purchases of a specified
product category at chosen store; the frequency of visits to the store in relation to other
stores during a certain specified period; the ratio of ranking between stores; the intention
to shop at a store in the future; the extent of customer’s willingness to recommend the
store to their friends
2.2 Store image definitions
Martineau (1958) conducts one of the earliest studies about store images and describes
store image as “the personality of the store and the manner in which the store is
presented in a personal mind”.
Over the decades, many authors propose different store attributes or characteristics
definitions that are part of the overall store images. Doyle and Fenwick (1974), for
instance, distinguish only five elements of store images including product, price,
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assortment, styling and location while Bearden (1977) identifies seven dimensions:
price, quality of the merchandising, assortment, atmosphere, location, parking facilities
and friendly personnel.
Marks (1976) and James et al. (1976) define store images as a multi-attribute models and
image is thus expressed as a function of the salient attributes of a particular stores that
are evaluated and weighted against each other.
Houston and Nevin (1981, cited from Thompson and Chen, 1998), describe store images
as the “complex of consumer’s perceptions of a store on different attributes”
Engel and Blackwell (1982, cited from Thompson and Chen, 1998) consider store image
as an attitude, or set of attitudes, based upon evaluation of salient store attributes.
Additionally, Lewis and Hawksley (1990, cited from Thompson and Chen, 1998) and
Osman (1993) define store image as critical components in store choice and consumer
loyalty.
According to Keaveney and Hunt (1992), store image measurement almost always
involves the identification of a number of attributes which are assumed to make up a
store’s image.
Ghosh (1990) identifies that store image is a composition of the different element of
retail marketing mix such as location, merchandise, store atmosphere, customer service,
price, advertising, personal selling and sales incentive programs
Despite numerous attempts to define and measure store image constructs, there is no
consensus definition and there are still inconsistencies in conceptualization and
operationalization. The following section will review and consolidate different
definitions of some key store images dimensions including: store convenience, physical
facilities, perceived price, employee service, advertising and promotions, after-sales
service, store atmosphere and merchandising.
2.2.1

Store convenience

Many early researches have been developed to assess the role of store convenience (Rich
and Portis, 1964, Kelly and Stephenson, 1967, Fisk 1962 and Weale, 1961, cited from
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Lindquist, 1975). Most of the studies divide store convenience into localtional and
parking convenience.
Later, Kunkel and Berry (1968) and Lindquist (1975) separate store convenience into in
three types: convenience in general, locational convenience and other convenience
factors. Locational convenience focuses on the effort to reduce the time to go to and
from a store. This factor includes accessibilities, good-or-bad location. Other factors of
store convenience should be considered are parking, opening hours, store layout in terms
of convenience and convenience in general
Location decision is also considered as a key to success of many retailers (Kotler, 2006).
He emphasized the important role of location in the developing of modern retailing
industry. Generally, a central business district, a shopping center area, a community
shopping zone, a commercial shopping street should be focused.
2.2.2

Physical facilities

Martineau (1958) finds that factors such as elevators, escalators and counter position
play a critical part in defining store layout and architecture. In addition, he adds symbols
and colors as two parts of physical facilities and describes them as the shape and the
color of company symbols or logos.
Rich (1963) and May (1971) describe physical facilities of a store as a store layout.
However, Aron (1963) and Fisk (1962) find that the ease of shopping would also create
the quality of physical facilities. (Cited from Lindquist, 1975)
Lindquist (1975) consolidates the results of 26 previous authors about store image
dimensions and to come up with nine image elements which contribute to image
formation or to favorable/unfavorable consumer attitudes toward retailer. He defines
physical facilities as the attributes covering the facilities available in the store such as
elevator, lighting, air conditioning and washroom (rest room). It can also include store
layout, aisle placement and width, carpeting and architecture

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2.2.3

Perceived price

Perceived price or price of merchandize is a part of merchandise assessment (Kunkel
and Berry, 1968). The price of a store could be perceived to be cheaper, more
competitive, high, fair, or value for money.
Chowdhury et al. (1998) adds more value for price evaluation of a store. He finds that
price or values should be measured under the fairness, value-for-money, the discount or
just a cheap/expensive awareness in consumer mind.
Price and pricing has been a long lasting discussed topic in any retail management.
Kotler (2006) stresses price as a key positioning factor and must be described in relation
to the target market, product and marketing mix and the competition. He emphasizes that
the mark-up and volume will not go together. Low-markup often goes with high volume
to represent for mass merchandiser and discount stores. Meanwhile, specialty store
usually choose high-markup and small volume.
2.2.4

Employee service

Employee service is described as sales personnel service by Martineau (1958). He
emphasizes that the increasingly success of modern trade come from the dispose of sales
clerk in some supermarkets. However, shoppers have been variably evaluated the sales
personnel in their regular purchasing at some retailers.
Kunkel and Berry (1968) clarify the sales personnel description by adding attitude of
sales staff, knowledge-ability of sales staff, number of sales personnel and the quality of
service they bring to customers.
Employee service is also depicted as the sales-clerk service in many researches before
1975 (Myers, 1960, Tillman, 1967, Fisk, 1962 and May, 1971, cited from Lindquist,
1975).
In 1975, Lindquist combines most of his preceding studies to provide a definition of
service. According to him, employee service is just one critical part of store service
which refers to many measurements including service in general, sales clerk service,
presence of self-service, ease of merchandise and credit policy of the store.

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2.2.5

Advertising and promotions

The retailer’s advertising is an especially important factor in expressing the character of
the store. While the retailers think of factual content of advertising like items, prices,
timeliness, quality of merchandise, shoppers can be impressed by the physical
appearance, general tone, wording and styles of the advertising. The symbolic meaning
of the advertising has to be consistent with the character of the store itself (Martineau,
1958)
Promotion is also specified as sales promotions by Kunkel and Berry (1968). They
measure sales promotions through quality or assortment of sales merchandising, special
promotion programs, stamps or other promotions. In the meantime, advertising is
categorized into style or quality of advertising, media and vehicles used and reliability of
advertising.
Rich and Portist (1964) and Fisk (1962) evaluate advertising of a store by advertising in
general and display advertising. (Cited from Lindquist, 1975)
Lindquist (1975) proposes another definition of promotion which is considered as a store
marketing mix and should cover sales promotions, advertising, display, trading stamps,
and symbols and colors.
Kotler (2006) recommends retailer to use variety of communication tools to reinforce
their store images. He highlights the important role of advertising and promotions mix
like print-ads, money-saving coupons, frequent shopper-reward programs, in-store
sampling
2.2.6

After-sales service

After-sales service or post-transaction service is evaluated by the satisfaction of
consumers after purchasing. This service includes such areas as warranty service, returns
policy, the support post-purchasing service staffs (Lindquist, 1975)
After-sales service is often measured by a person who delivers the post-purchasing
service like set-up and installing staffs, customer phone service (Fisk, 1962, cited from
Lindquist, 1975)

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Kotler (2006) describes post-purchase service through the items like shipping and
delivery, gift wrapping, adjustment and repair, interior decorating, credit, rest room and
baby-attendant service
2.2.7

Store atmosphere

Martineau (1958) finds that store atmosphere is a part of layout and architect. As such,
store atmosphere is defined as what consumers pay attention to including product
display, crowds, size of a store, in-store decoration and shopping atmosphere.
Kunkel and Berry (1968) add two more dimensions to Martineau definitions about store
atmosphere: customer type and store congestion in his behavioral study about store
images.
Later, Lindquist (1975) proposes an emotional description for store atmosphere.
According to him, store atmosphere should be measured by a customer’s feeling of
warm, acceptance or ease during the purchasing.
According to McGoldrick (2003), store atmosphere should contain four dimensions:
visual or sight (color, brightness, size and shape), aural or sound (volume and pitch),
olfactory or smell (scent and freshness) and tactile or touch (softness, smoothness and
temperature)
Kotler (2006) defines store atmosphere as the design of space to create certain effects to
shoppers. Specifically, by creating store atmosphere in buying environment, shop
owners try to generate emotional effect in consumers to enhance purchase possibilities.
2.2.8

Merchandising

There are five attributes to be considered when we assess merchandising of a store
(Lindquist, 1975). They are quality, selection of assortment, styling or fashion,
guarantees, and pricing. Merchandising is also understood as the good and services
offered by retailers
Kunkel and Berry (1968) define merchandising by three separate categories: price of
merchandise, quality of merchandise and assortment of merchandising (product
assortment)
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Thang and Tan (2003) use three criteria to measure merchandising quality of a store:
merchandise mix quality, value-for-money merchandise and availability of merchandise
2.3 Store image studies
Many empirical studies related to store images are conducted to understand the
relationship between different dimensions of store images and consumer store choice,
satisfaction and loyalty.
Hansen and Deutscher (1978), two professors of The Ohio State University, on the basis
of Lindquist works, implement an applied research for both department stores and
grocery stores in metropolitan area. Their conceptual framework bases upon the notion
of attribute, components and dimensions. There are nine dimensions (merchandise,
service, clientele, physical facilities, convenience, promotion, store atmosphere,
institutional and post-transaction satisfaction), twenty components and forty one
attributes to be tested among customers from two store types. The study highlights the
different importance level of each image dimensions towards particular type of retail
store. The difference of demographic factors also results in the gap in evaluation.
Lewis and Hawksley (1990) find that psychological factors play key roles in forming
store image. Self-image consumers, for instance, try to bring their real self-concept
towards buying process to be satisfied and attain a desired role in life. Several attempts
have been made to determine whether there is a linkage between a consumer’s selfimage and store image.
Hirschman and Stampfl (1980, cited from Thompson and Chen, 1998) suggest that
consumers may match themselves with retail stores according to their perceptions of
their own and of the stores’ innovation. Thompsons and Chen (1998) identify the
correlation between the value of “enjoyment and happiness” and “quality of life” with
store associations like “price, reputation and quality” in a study about customers at
fashion retail stores.
In a study about the relationship between store image and store preference, Thang and
Tan (2003) explore the impact of eight image dimensions (merchandising, atmosphere,
in-store service, accessibility, reputation, promotion, facilities and post-transaction) on
store preference through consumer perception as a mediating factor.
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2.4 The relationship between store images and consumer loyalty
Lessig (1973) not only examines the relationship between store image and consumer
loyalty but he can also predicts consumer loyalty from store image information by
observing and investigating loyalty groups from distinct clustered household. Moreover,
by using multi-store loyalty measures, Lessig can gain the possible insight about the
factors which underlie consumer loyalty and emphasize the value of loyal patronage
across various retail outlets.
Osman (1993) proposes a model of retail image influences on loyalty patronage
behavior. He identifies that loyalty patronage is linked to customers’ store image and
past purchase experience. He postulates that loyalty patronage is the result of past
purchase experiences and the consumers’ favorable image of the store. If the customer is
satisfied with their purchase at the store, he or she will return to the store for next
purchases. This past experience will help customers to form his or her perception of the
store.
Some researches about consumer loyalty focus on the impact of service quality on
consumer loyalty intentions, a measurement of consumer loyalty. Sirohi et al., (1998)
find a significant relationship between service qualities and repurchase intention &
willingness to recommend - 2 measures of loyalty intentions.
In the study of consumer perceptions and store loyal intentions at supermarket, Sirohi et
al. (1998) explore that: the perception of value for money has a positive effect on
consumer loyalty intentions of consumers; service quality constructs (store operations,
store appearance, and personnel service) have direct positive effect on consumer loyalty
intentions; and perceived value of competitor has a negative effect on consumer loyalty
intentions (the higher the perceived value of competitor, the lower the consumer loyalty
intentions).
Bloemer (1997), in a study about consumers of a department store in Switzerland,
indentifies the significant relationship between store images and consumer loyalty
through the mediating role of store satisfaction. He also postulates that the relationship
between manifest satisfaction and consumer loyalty is stronger than the relationship

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between latent satisfaction and consumer loyalty by testing the combined effect of store
satisfaction, store choice involvement and store deliberation.
Orth and Green (2009) find the direct and indirect influences of store image (price/value,
service, atmosphere, product quality, selection, convenience) on store satisfaction and
consumer loyalty through mediating role of consumer trust including management
practices and policies and front line employees.
Recently, Jinfeng and Zhilong (2009) identify the relationship between five selected
store images (convenience, institutional factors, physical facilities, perceived price and
employee service) and consumer loyalty. This retailer equity study not only reveals the
relationship among the dimensions of retailer equity (retailer associations, awareness,
perceived quality and loyalty), but it also tests the effect of selected store image on each
dimension of retailer equity. However, the functions of other store image dimensions
like merchandising, advertising and promotions, after-sales service and store atmosphere
are not included in the research. The research is also limited within hypermarket. Other
retail categories need to be further studied such as department store, convenience store
and grocery store.
2.5 Theoretical model and hypotheses
2.5.1

Theoretical model

The model is established by inheriting four store image dimensions from Jinfeng and
Zhilong (2009) retailer equity model and retaining another four additional image factors
from a consumer perception study of Thang and Tan (2003). The model represents the
relationship between eight dimensions of store images (store convenience, physical
facilities, perceived price, employee service, advertising & promotions, after-sales
service, store atmosphere and merchandising) and consumer loyalty
In the model, store convenience, physical facilities, perceived price, employee service,
advertising & promotions, after-sales service, store atmosphere and merchandising play
the role of independent variables. Consumer loyalty is dependent variable. Figure 2-1
represents the theoretical model of the study.

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Store
Convenience

H1

Physical
Facilities

H2

Perceived Price

H3
Employee
Service
Advertising and
Promotions
After-sales
services

H4

Consumer
Loyalty

H5
H6
H7

Store
atmosphere

H8

Merchandising

Figure 2-1: Theoretical model
2.5.2

Hypotheses

Store convenience: store convenience represents for the time consumers spend to go to
or from the store. The more convenience the store is the easier to purchase good or get
services in the store. Chang and Tu (2005) support the relationship between store
convenience and customer satisfaction. Store convenience is further categorized as
general convenience, locational convenience, and parking (Lindquist 1975). When
consumers find it more convenience to shop, they will be likely to shop more frequently
with higher satisfaction, showing their loyalty to the store. Our hypothesis is thus:
Hypothesis H1: The convenience of a store positively affects consumer loyalty
Physical facilities: physical facilities can place direct or indirect effect on perceived
service quality of a store and affect customers’ evaluation of other intangible value
(Reimer and Kuehn, 2005). Yoo et al. (1998) indentify the indirect impact of store
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facilities on store attitude under the meditational effect of store emotion including
positive emotions (attractive, proud, contended, excited, satisfied and pleased) and
negative emotions (nullified, ignored, anxious, angry and displeased). Store facilities are
also viewed store appearance which is supposed to have positive effect on consumer
loyalty intentions (Sirohi et al., 1998). Base on these arguments, we hypothesize that:
Hypothesis H2: The physical facilities of a store is positively related consumer loyalty
Perceived price: The perception of value for money is postulated to have positive
relationship with loyalty intentions (Sirohi et al., 1998). Similarly, Jinfeng and Zhilong
(2009) find the significant effect of perceived price and consumer loyalty when they
study the influence of store images on retailer equity. Store price and values are also
found to have impact on consumer loyalty through the mediating role of consumer trust
and satisfaction. (Orth and Green, 2009). Our hypothesis is:
Hypothesis H3: There is a positive relationship between perceived price and consumer
loyalty
Employee Service: employee is defined as in-store service and employee attitude which
are identified to have direct impact on consumer loyalty (Jinfeng and Zhilong, 2009;
Thang and Tan, 2003). Sihori (1998), in the same way, successfully tests the positive
effect of personnel service on consumer loyalty intentions. In addition, salesperson
service is also found to have direct effect to consumer in-store emotion and indirectly
create consumer store attitude. (Yoo et al., 1998). We thus posit that:
Hypothesis H4: The better the employee service at a store the more generated loyalty
from consumers.
Advertising and promotions: store promotion is indicated to have direct influence on
store preference. In other words, the more favorable the consumer perception of the
promotions at the store is, the higher the consumer preference will be (Thang and Tan,
2003). Kunkel and Berry (1968) find 12 factors of store images, in which sales
promotions and advertising is indicated as 2 separate dimensions and are principle for
future retailing loyalty research. Thus, we hypothesize that

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