The influence of Employee Service on Positive Word of Mouth and Repurchase Intention in Vietnamese supermarket sector

Quản lý tài chính tại bệnh viện

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business


 

The influence of Employee Service on Positive Word of Mouth and Repurchase Intention in Vietnamese supermarket sector

 

MASTER OF BUSINESS (Honours)

 

ACKNOWLEDGEMENT

At the first time of writing an academic paper, my thesis could not be finished without guides and helps. From the bottom of my heart, I really want to write my sincere words as follows.

 

Firstly, I would like to thank Dr. Nguyen Dinh Tho and Dr. Nguyen Huu Lam. I wouldn’t know how to start, how to conduct and how to write my thesis without guiding of them. Dr. Tho showed me the way and Dr. Lam helped me to walk on that way. I would also thank Dr. Nguyen Thi Mai Trang, who always answered my emails, explained all of my confusions.

 

I would like to express my deep gratitude to Mr. Douglas Foster for supporting online journal articles.  I wouldn’t have enough academic  materials to  write chapter two without his help. He was not only a great teacher but also a good friend to me. I am truly grateful to him for being my lecturer.

 

Also, I want to express my thanks to my classmates, Nguyen Thi Tuyet Oanh and Thai Van Trung Hieu. They did supported me whenever I needed them. Honestly, if they hadn’t been my friends, I couldn’t have finished my thesis in this year.

 

Finally, I would like to thank all of participants in this research, especially in-service training students of ISB. Thanks a lot for their precious time to join the surveys of this research.

 

ABSTRACT

Supermarket sector have been one of the most attractive field of Vietnamese economy in the last ten years. The success of a supermarket mainly depends on customer repurchase intention and positive word of mouth that the supermarket gains from current customers. Employee service and customer satisfaction are critical factors which impact on repurchase intention and word of mouth. Nevertheless, little research has investigated the relationship of those concepts. This research examines those relationships. Using a data set from a sample of 175 consumers, we found that employee service influences on customer satisfaction and customer satisfaction impacts on both repurchase intention and positive word of mouth. These findings suggest that in order to accomplish the success of a supermarket, we must improve employee service. Once we increase employee service, customer satisfaction is increased. It influences repurchase intention and positive word of mouth. In short, employee service is a very  important factor that supermarket managers need to improve.

 

 

 

 

Keywords: Customer repurchase intention, positive word of mouth, employee service and customer satisfaction, supermarket.

 

TABLE OF CONTENTS

 

CHAPTER 1: INTRODUCTION……………………………………………………………………………….. 1

CHAPTER 2: LITERATURE REVIEW AND HYPOTHESES……………………………………. 8

CHAPTER 3: METHODOLOGY……………………………………………………………………………. 17

3.7. Summary………………………………………………………………………………………………………… 31

CHAPTER 4: DATA ANALYSIS AND RESULTS………………………………………………….. 33

CHAPTER 5: CONCLUSION, IMPLICATION AND LIMITATION…………………………. 46

REFERENCES……………………………………………………………………………………………………….. 51

Appendix 1: Qualitative result – Table 3.1……………………………………………………………. 55

Appendix 2: Pilot survey results – EFA first time running…………………………………….. 57

Appendix 3: Pilot survey results – EFA fifth time running (last time)……………………. 59

Appendix 4: The results of covariance and correlation…………………………………………. 60

Appendix 5a: Questionnaire in Vietnamese…………………………………………………………… 61

Appendix 5b: Questionnaire in English…………………………………………………………………. 65

 

 

 

 

 

 

 

LIST OF TABLES

Table 3-2: Reliability result of pilot survey……………………………………………………………. 26

 

Table 3-4 Pattern Matrixa……………………………………………………………………………………… 30

Table 4-1: Descriptive Statistics……………………………………………………………………………. 33

Table 4-4: Regression Weights: (Group number 1 – Default model)………………………. 42

Table 4-5: Standardized Regression Weights: (Group number 1 – Default model)43

 

 

 

 

 

 

LIST OF FIGURES

 

Figure 1: Conceptual Model…………………………………………………………………………………… 15

 

Figure 2: Research Process…………………………………………………………………………………….. 19

Figure 3: Result of Employee Service CFA……………………………………………………………. 37

Figure 4: Result of Customer Satisfaction CFA……………………………………………………… 38

Figure 5: Result of Positive Word of Mouth CFA………………………………………………….. 38

Figure 6: Result of Repurchase Intention CFA………………………………………………………. 39

Figure 7: Result of Saturated Model………………………………………………………………………. 41

Figure 8: Structural Results (Standardized estimates)……………………………………………. 44

 

CHAPTER 1: INTRODUCTION

1.1.            Research background

 

In recent years, the Vietnamese retail market has developed significantly in comparison with previous decades. According to IIB’s analysis on November 2012, sales in the retail industry had been increasing on an average of 27% per year from 2005 to 2011. International retailers, such as Big C, Metro, Lotte Mart, have come to Vietnam. Coop Mart, a domestic retailer, has also expanded very quickly. Also, retailing continues to transform Vietnamese economics with domestic consumption as a primary focus. Additionally, retailing has enabled the opening of doors to international investors because of the young population and the continuously urbanizing process. This trend should favour continued growth in retailing over the long term (A.T. Kearney, cited by Nguyen, 2010).

Despite the fact that Vietnam has fallen from first place in 2008 to 6th place in 2009, 14th in 2010, 23rd in 2011, and 32nd in 2012 according to the annual reports of Global Retail Development Index, with improved growth forecasts in both GDP and disposable income, Vietnam still remains an attractive market for global retailers. Furthermore, according to Vietnam’s WTO commitments, effective January 11, 2015, Vietnam has to allow the establishment of 100% foreign-invested retail organizations. Casino, owner of the Big C supermarket chain, has developed its number of supermarkets in Vietnam to 24. Casino plans to open five supermarkets and shopping centres annually over the next three years. Meanwhile, Germany’s Metro Cash & Carry Vietnam now operates 19 stores nationwide, a number expected to rise to 30-35 over the next three to five years. In short, the Ministry of Industry and Trade estimates

 

that by 2020, Vietnam would host some 1,200 to 1,300 supermarkets, and more than 300 shopping centres. (Nguyen, 2013)

Apparently, the Vietnamese retail market is very competitive and is set to explode to develop in the next years.

1.2.            Research problem

 

Theoretically, retailers have many choices to implement strategies attracting consumers to come to their supermarkets and spend their money on their goods and services; for instance, they are strategies of promotion, service and price. However, the answer for efficiency of those strategies is not really clear in Vietnamese context. The truth is not everyone spends money when they come to these shopping places. Consumers who buy at a store one time doesn’t mean that they will surely buy something in the future. Some of them will buy, some will just look at products and not buy, some will never come back, etc. Some will talk to others about the supermarket in a favourable way while others will talk negatively about their shopping experience. There are plenty of things that could affect the success of a supermarket. Retailers need to understand their customer attitudes and behaviours in order to come up with appropriate strategies. In the international academic arena, there are many research projects related to these issues. It is about four concepts: repurchase intention, word of mouth, employee service and customer satisfaction.

Recently, in the past four years, there were a lot of complaints from consumers to employee of supermarkets in Vietnam. These complaints have been printed in the newspaper. Supermarket managers had to admit that their employees were wrong and would  be  punished.  However,  these  incidents  have  influenced  future  customer

 

behaviour. This influence needs more research in order to show its importance to those managers who are in charge of planning strategies for supermarkets. This study focuses on observing the important role of employee service on related concepts mentioned above.

Customer repurchase intention is critical to a store’s profitability (Jones and Sasser, cited in Kuo, Hu & Yang, 2013, p.170). Therefore, the retailer can earn repurchase intention of its customers by providing the customer what they want in terms of products and services.

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