A Factor Analysis Approach for Understanding Attitude and Consumer Behavior
Toward Supermarkets in the Bangkok Metropolitan Areas
Veerapong Malai and Wuttisak Pitsuwan, Bangkok University, Thailand
Abstract
This paper examines the attitude and consumer behavior toward supermarkets in Bangkok
Metropolitan Areas by surveying 625 respondents, randomly chosen from within 50 areas in
Bangkok using a self-administered questionnaire. The fundamental outcomes demonstrate
that management strategies for supermarket-retailing store businesses should be different
depending on the type of supermarkets. For example, when practitioners intend to expand
outlets in department stores, location is the first element to be considered. For supermarkets in
discount stores, customers typically prefer the stores that offer reasonable product price and
sales promotion. In addition, store atmosphere was found to be the least significant factor in
accounting for the preferences for consumers of supermarkets in discount stores and in
department stores.
Introduction
Retail business in Thailand has continually expanded. Currently, Thailand has an annual retail
sales value of is approximately 600,000 million baht (43 Baht = 1 US dollar), consisting of
60% traditional trade and 40% modern trade. The Faculty of Economics at Chulalongkorn
University forecasts that retailing business’s sales value will increase to approximately
1,014,647 million baht in 2007 (Anonymous, 1999).
Supermarkets are defined as places, where food and non-food products for daily consumption
are sold. Food products can be categorized as non-perishable and perishable food. Non-food
products include items such as personal care and household products. In Thailand,
supermarkets can be separated into three-type of stores, which are supermarket section in
department stores (idp), in discount stores (idc), and stand-alone supermarkets (sta).
Generally products are purchased in supermarket daily. The Supermarket, the first priority
for this survey, is one of the main types of retailing business, consisting of traditional trade
and modern trade. This research is conducted as an attempt to study the attitudes and
behaviors of Thai consumers towards supermarkets in Bangkok metropolitan areas, especially
in relation to modern trade.
Hasty and Reardon (1997) mentioned that factors influencing the purchase decision process in
retail store are buyer factors, product factors, and retailer factors. This study focuses on
retailer factors, which composed of three concepts developed from exploratory factor
analysis: store atmosphere, store location, and product price & sales promotion.
Store atmosphere:
This factor mainly considers areas such as store decoration, store size, and the width of aisle
in the store (Dunne, Lusch, and Gable, 1995; Hasty and Reardon, 1997; Mason, Mayer, and
Ezell, 1994; Miller, Reardon, and McCorkle, 1999). Different store atmospheres can build a
dissimilar attitude of customer (Hawkins, Best, and Coney, 1998; Uusitalo, 1998).
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Store location:
It is the factor that entrepreneurs should be most concerned with initially (Hasty and Reardon,
1997; Mason, Mayer, and Ezell, 1994) because it is very difficult to change after establishing
the retailing business (Dunne, Lusch, and Gable, 1995). Occasionally, store promotions fail to
affect consumer behavior simply because of time and cost constraints on switching stores
(Hoch et al., 1995). Convenience of reaching the store is also important here, with locations
near to the target consumers being not only popular, but proper, locations.
Store price & sales promotion:
- Price: Normally, prior to purchasing products, the majority of customers rarely investigate
price due to time restriction and confidence in the retail store (store loyalty) as well as the
brand (brand loyalty) (Dickson and Sawyer, 1990). Reasonable prices in a retail store induce
customer satisfaction as well as building customer loyalty. In the retailing sector, the store
having reasonable prices will often capture a large market share. (Mason, Mayer, and Ezell,
1994)
- Store promotion: The favorite store promotion is sales promotion, especially price
discounts (Mulhern and Leone, 1991; Walters, 1991). Sales promotions do not usually
influence purchasing decisions (Raju, 1988). Fader and Lodish (1990) state that practitioners
should select the promotional instruments appropriate for the product categories and product
items.
This research examines some of these issues. Specifically, the survey examines the attitude
and perceptions of buying behavior in supermarket stores. The intention is to gain more
understanding of how consumers select a store. Moreover, it was discovered that there has not
been examples in past literature stating the relationship between store patronage factors and
store preference, particularly in terms of three types of supermarkets, in department store, in
discount store, and stand-alone store. The framework of categorizing supermarket stores into
three types is from expert opinions in retail business in Thailand. Therefore, this research
results and the resultant findings were well suited to the Thai environment.
Methodology
In order to accurately examine customer behavior, especially in Thai culture, this research
relied on an inductive approach. The first stage of this study involved in-depth interviews
with practitioners and some consumers to gain more detailed understanding of consumer
behavior in supermarkets. Four practitioners from different major retail chain stores were
interviewed. A questionnaire was developed from an integration of the results of the in-depth
interviewing and a literature review. Finally, before surveying, the wording of questions was
validated by expert opinions and customers.
The sample for this research was derived by dividing Bangkok metropolitan into 50 areas, and
interviewing respondents at supermarkets located in those areas. 625 self-administered
questionnaires were collected using this method.
Factor analysis was selected to create measurement scales. In order to develop these scales,
exploratory factor analysis with varimax rotation was employed. The objective was to obtain
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fewer dimensions that reflected the relationships among these inter-related variables. The
eigenvalue greater than one rule was applied in identifying the number of factors. The
variables that had large loadings on the same factors were grouped. factor loadings value of
0.50 and above is considered good and significant. Initially there were ten scaled variables
that were measured. After factor analysis, three of these variables with loadings of less than
0.50 were deleted, and three factors were created. The cumulative percent of variance
explained was 71.058 (see Table 1).
Table 1: Factor Analysis (Rotated Factor Solution)
FACTOR
Scale Items
Communality
1
2
3
- Convenience in going to store (X1)
.139
.845
.025
.734
- Product Price (X2)
.084
.178
.834
.734
- Store location (X4)
.076
.873
.059
.771
- Sales promotion (X6)
.269
.094
.764
.665
- The width of aisle in the store (X7)
.841
.037
.122
.723
- Store atmosphere and decoration (X9)
.830
.114
.016
.702
- Store size (X10)
.791
.123
.062
.645
Percent of variance (rotated solution)
30.378
22.085
18.595
Cumulative percent of variance
30.378
52.463
71.058
Key Results & Findings
Two-thirds of respondents were single, having personal incomes of less than 18,000 baht per
month. These respondents preferred to shop at supermarkets in department stores rather than
supermarkets in discount stores and stand-alone supermarkets.
The three factor scores resulting from the factor analysis are then used as the independent
variables for the multiple regression analysis. Results of this analysis are as followed.
In department store:
All factors, the store atmosphere, location, and price & sales promotion, were positively
significantly related to store preference, and the overall model was significant (p = .000).
Store location had the highest impact on store preference (β = .139) and the factor with the
lowest impact was store atmosphere (β = .069).
In discount store:
Store atmosphere and price & sales promotion, were positively significantly related to store
preference, and the overall model was significant (p = .000). Store price & sales promotion
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had the highest impact on store preference (β = .145) and the factor with the lowest impact
was store atmospheres (β = .089).
For stand-alone supermarkets, store atmosphere was the only significant factor (p = .042), but
overall model was not significant. Hence, we cannot discuss more details for this type of
supermarket.
Table 2:
Regression of Store Preference on Store Patronage Factors
(Store Preference = β0 + β1factor1 + β2factor2 + β3factor3)
Factor 1:
Store Atmosphere
- The width of aisle in the store (X7)
- Store atmosphere and decoration (X9)
- Store size (X10)
Factor 2:
Store Location
- Convenience in going to store (X1)
- Store location (X4)
Factor 3:
Store Price & Sales Promotion
- Product Price (X2)
- Sales promotion (X6)
F test
R2
Adj. R2
R
Notes:
*
**
In Discount
Store
In Department
Store
Store Patronage Variables
Stand Alone
β
Sig.
β
Sig.
β
Sig.
.069
.078 **
.089
.023 *
.091
.042 *
.139
.000 *
--
ns.
--
ns.
.081
.037 *
.145
.000 *
--
ns.
6.821
.034
.029
.184
.000 *
6.499
.033
.028
.182
.000 *
1.717
.010
.004
.100
ns.
= Significant (p < 0.05)
= Significant (p < 0.10)
ns.
= Not significant
Discussion and Conclusions
It can be concluded that when practitioners want to expand supermarket outlets in department
stores, store location should be the primary focus, and they should be located near the target
groups to provide maximum convenience. For supermarkets in discount stores, customers
mostly prefer the stores that offer reasonable product prices and sales promotions. However it
was discovered that the store atmosphere is the least significant factor for both the
supermarkets in discount stores and in department stores. In conclusion, although past
literature has mentioned that store patronage factors have an impact on store preferences, the
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research shown here suggests that the relative importance of these factors will vary depending
on the type of supermarket under consideration. Retail managers should therefore manage the
store patronage factors customarily according to the type of supermarket.
Limitations and Future Research
For the most part, the contributions of this study are for the Thai locale. However some
findings are relevant to other contexts, although, it depends on the adaptation skills of
practitioners. Culture has a strong effect on many aspects of the behavior of consumers;
therefore a cross-cultural perspective should be employed for the future testing of the
concepts presented in this paper.
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References
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