An Evaluative Analysis of Retail Chains in The 21st Century: Leon Grove University of Phoenix

An Evaluative Analysis of
Retail Chains in the 21st

Century
Leon Grove
University of Phoenix
Committee Membership
 Dr. Santosh Sambare, Ph.D. – Mentor
 Dr. Kevin Banning, Ph.D. – Committee

Member
 Dr. Craig Martin, Ph.D. – Committee

Member
2
Problem Statement
In the retail chain of consumer goods,
there appears to be relatively limited
information on the relationship between
allocation of resources by these chains
for marketing, technology and
inventory initiatives and customer
satisfaction and customer loyalty.
3
Support for the Problem
Statement
Literature supports the hypothesis that customer satisfaction
may not lead to customer loyalty in several situations:
• “Firms that are unable to satisfy customers can expect to

lose market share to rivals offering better products and
service 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).
4
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 satisfaction
and customer loyalty through allocation of
resources to marketing, technology, and
inventory management systems.
5
Significance of Study/Leadership
• The significance for the study is that retailing is an
important component of consumers’ buying and
consumer spending impacts the overall economy.
Improvements gained through technology and inventory
efficiency will allow retail store chains to provide the
highest quality products at exceptionally low prices.
• Marketing initiatives lead to customer satisfaction and
loyalty and helps consumers in particular and the
economy in general.
• This research will help decision makers in implementing
programs which will benefit their customers through
improvements in satisfaction and loyalty.
6
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 customer’s
loyalty?
7
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 the
technological processes to optimize the level of
customer satisfaction?
8
Hypotheses
• H1: There is no positive/negative relationship between
technology processes and customer satisfaction.
• H01: There is a positive/negative relationship between

• H1a: There is no positive/negative relationship between

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

9
Hypotheses
marketing spend on customer satisfaction.

marketing spend on customer satisfaction.

marketing spend on customer loyalty.

marketing spend on customer loyalty.
10
Hypotheses
• H3: The efficiency of inventory
management systems do not reduce
retailer’s cost to improve customer
satisfaction.
• H03: The efficiency of inventory
management system reduces retailer’s
cost to improve customer satisfaction.
11
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).
12
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 and
analytical approaches were applied to
determine the relationship between the
dependent and independent variables namely
marketing, technology initiatives and
inventory control systems.
13
Target Population
The population for this research study are
several leading retail chain for consumer
goods in the US.
14
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 variables
related 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.
15
Analyses
The data will be analyzed using
Analysis of Variance (ANOVA), to
understand the relationship between
marketing, inventory control and
technological initiatives and customer
satisfaction as well as customer
loyalty.
16
Results
Analysis 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 0.01
Within Groups 253.14 241 1.05
Total 262.34 243
17
Results
Analysis 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 0.054
Total 413.98 244
18
Results
Analysis 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
Total 391.73 245
19
Results
• From the above results we can infer that
customer satisfaction, customer loyalty,
and commitment to the store are different
for these stores.
20
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 manufacturer’s and competitors coupons
The null and alternate hypotheses are noted below:


21
Results
Table 4-8
Analysis 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.
22
Results
Table 4-8
Target
T-test df P-value
It can be inferred that for Target store at 93% Confidence Level

23
Results
Table 4-8
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

24
Accepted Hypotheses
H1: There is no positive/negative relationship between technology
processes and customer satisfaction.
H01: There is a positive/negative relationship between technology
Wal-Mart Target Kroger
H1: Reject Reject Reject
H01: Accept Accept Accept
Based on this analysis the null hypothesis can be accepted that there is a
positive/negative relationship between technology processes and customer
satisfaction
25
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 manufacturer’s and competitors coupons
» having advertised items in stock.
• The null and alternate hypotheses are noted below:


26
Results
Table 4-13
Test Variable: I consider myself loyal to the store
Wal-Mart
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.
27
Results
Table 4-13
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.
28
Results
Table 4-13
Kroger
T-test df P-value
It can be inferred that for Kroger that the relationship customer loyalty
and waiting time is not significant.
29
Accepted Hypotheses
H1a: There is no positive/negative relationship between technology and
customer loyalty.
H01a: There is a positive/negative relationship between technology and
customer loyalty.
H1a: Accept Accept Accept
H01a: Reject Reject Reject
Based on this analysis the alternate hypothesis can be accepted that there is
no positive/negative relationship between technology and customer loyalty
30
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 décor

marketing spend and customer satisfaction.

marketing spend and customer satisfaction.
31
Results
Table 4-18
Test Variable: Overall satisfaction with this store
Prices from most brands lower than other stores
Wal-Mart
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
Results
Table 4-18
Target
than other stores
T-test df P-value

than other stores.
33
Results
Table 4-18
Kroger
than other stores
Prices from most brands not 24 3.67 .963 .197
T-test df P-value

than other stores.
34
Accepted Hypotheses
H2: There is no positive/negative relationship between marketing spend
and customer satisfaction.
.
H02: There is a positive/negative relationship between marketing spend and
customer satisfaction.
Based on this analysis the null hypotheses can be accepted that there is a
positive/negative relationship between marketing spend and customer
satisfaction
35
Results
• Evaluation of hypothesis H2a
This hypothesis is related to marketing spend
• Retailers spend marketing dollars to employ processes to improve customer
loyalty.
» Prices from most brands lower than other stores
» Good customer service
» Receive circulars with specials in the mail
» Has good interior décor

marketing spend and customer loyalty.

marketing spend and customer loyalty.
36
Results
Table 4-22
Wal-Mart
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
Results
Table 4-22
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
Results
Table 4-22
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
Accepted Hypotheses
H2a: There is no positive/negative relationship between marketing spend
and customer loyalty.
.
H02a: There is a positive/negative relationship between marketing spend and
customer loyalty.
H2a: Accept Reject Accept
H02a: Reject Accept Reject
Based on this analysis the null hypotheses can be accepted that Wal-Mart and
Kroger that there are no positive/negative relationship between marketing
spend and customer loyalty. Target we accept the alternative hypothesis.
40
Results
• This hypothesis is related to efficiency of inventory
management systems
• Retailers reduces the cost of inventory to improve customer satisfaction.
» 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: The efficiency of inventory management systems does not

reduce retailer’s cost to improve customer satisfaction.
• H3: The efficiency of inventory management systems reduces

retailer’s cost to improve customer satisfaction.
41
Results
Table 4-26
Extensive variety products/services in the store
Wal-Mart
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
Results
Table 4-26
Target
in the store
Extensive variety products/services 52 3.65 1.046 .145
in the store not reasonable
T-test df P-value

43
Results
Table 4-26
Kroger
in the store
in the store
T-test df P-value

44
Accepted Hypotheses
H3: The efficiency of inventory management systems does not reduce retailer’s
H03: The efficiency of inventory management systems reduce retailer’s cost to
improve customer satisfaction.
Based on this analysis the null hypotheses can be accepted that the efficiency
of inventory management systems reduces retailer’s cost which may improve
customer satisfaction
45
Accepted Hypotheses
• The results are summarized here
46
Accepted Hypotheses
H1: There is no positive/negative relationship between technology
H01: There is a positive/negative relationship between technology
Based on this analysis the null hypothesis can be accepted that there is a
positive/negative relationship between technology processes and customer
satisfaction
47
Accepted Hypotheses
H1a: There is no positive/negative relationship between technology and
customer loyalty.
H01a: There is a positive/negative relationship between technology and
customer loyalty.
H1a: Accept Accept Accept
H01a: Reject Reject Reject
Based on this analysis the alternate hypothesis can be accepted that there is
no positive/negative relationship between technology and customer loyalty
48
Accepted Hypotheses
H2: There is no positive/negative relationship between marketing spend
and customer satisfaction.
.
H02: There is a positive/negative relationship between marketing spend and
customer satisfaction.
Based on this analysis the null hypotheses can be accepted that there is a
positive/negative relationship between marketing spend and customer
satisfaction
49
Accepted Hypotheses
H2a: There is no positive/negative relationship between marketing spend
and customer loyalty.
.
H02a: There is a positive/negative relationship between marketing spend and
customer loyalty.
H2a: Accept Reject Accept
H02a: Reject Accept Reject
Based on this analysis the null hypotheses can be accepted that Wal-Mart and
Kroger that there are no positive/negative relationship between marketing
spend and customer loyalty. Target we accept the alternative hypothesis.
50
Accepted Hypotheses
H3: The efficiency of inventory management systems does not reduce retailer’s
H03: The efficiency of inventory management systems reduce retailer’s cost to
improve customer satisfaction.
Based on this analysis the null hypotheses can be accepted that the efficiency
of inventory management systems reduces retailer’s cost which may improve
customer satisfaction
51
Conclusions
The results shows that marketing, technology, & inventory
management systems affects customer satisfaction and
customer loyalty. It affects customer satisfaction more so
than customer loyalty.
The findings of this study indicates that retail stores can

increase customer satisfaction and customer loyalty by
allocating resources to marketing, technology, and
inventory initiatives.
It is recommended to spend more on marketing and

effectively deploying technology and reducing inventory
cost.
52
Limitations/Delimitations
• Limitation in this study is related to the online method of
data collection versus personal interviews or surveys by
mail. This methodology does not allow for probing as
compared to personal interview method and may deter
some respondents who are not familiar with online
surveys.
• The delimitation also limits the research study to the
marketing, technology, and inventory management
systems as they relates to customer satisfaction and
customer loyalty as opposed to employee involvement,
brand identify, checkout times, customer service, and
store neatness. The delimitation only focuses on how
these independent variables relate to the dependent
variable.
53
Recommendations
Retail store chains should evaluate cost
effective 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.
54
Future Study
• Researchers may consider obtaining the actual
marketing spend to relate to customer
satisfaction and customer loyalty.
• Researchers may consider tracking inventory
movement: 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.
55
Questions
56
References
Betancourt, R. R., Cortinas, M., Elorz, M., & Mugica, J. M. (2007). The
demand for and the supply of distribution services: A basis for the
analysis 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: A
conceptual 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. Retrieved
December 3, 2009, from EBSCOhost database.
Pleshko, L. P. & Baqer, S. M. (2008). A path analysis study of the
relationships among consumer satisfaction, loyalty, and market
share in retail services. Academy of Marketing Studies Journal,
12(2), 111-127. Retrieved October 4, 2009, from EBSCOhost
database.
57

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An Evaluative Analysis of

Retail Chains in the 21st

 Dr. Kevin Banning, Ph.D. – Committee

 Dr. Craig Martin, Ph.D. – Committee

• “Firms that are unable to satisfy customers can expect to

• “Satisfaction is also not always enough to ensure

• H01: There is a positive/negative relationship between

• H1a: There is no positive/negative relationship between

• H01a: There is a positive/negative relationship between

• H02: There is a positive/negative relationship between

• H2a: There is no positive/negative relationship between

• H02a: There is a positive/negative relationship between

Bowden (2009) conceptualized that “companies have a continued

 In the first part, financial data of several retail

The research study surveyed a sample of

The total sample for this study were 126

Groups Count Sum Average Variance

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

Source of Variation SS df MS F P-value

Total 262.34 243

Groups Count Sum Average Variance

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

Source of Variation SS df MS F P-value

Total 413.98 244

Groups Count Sum Average Variance

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

Source of Variation SS df MS F P-value

Total 391.73 245

The null and alternate hypotheses are noted below:

• H1: There is no positive/negative relationship between

• H01: There is a positive/negative relationship between

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

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

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

Wal-Mart Target Kroger

H1: Reject Reject Reject

H01: Accept Accept Accept

• H1a: There is no positive/negative relationship between

• H01a: There is a positive/negative relationship between

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

Wal-Mart Target Kroger

H1a: Accept Accept Accept

H01a: Reject Reject Reject

• The null and alternate hypotheses are noted below:

• H2: There is no positive/negative relationship between

• H02: There is a positive/negative relationship between

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

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

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

Wal-Mart Target Kroger

H2: Reject Reject Reject

H02: Accept Accept Accept

• The null and alternate hypotheses are noted below:

• H2a: There is no positive/negative relationship between

• H02a: There is a positive/negative relationship between

Wal-Mart Target Kroger

H2a: Accept Reject Accept

H02a: Reject Accept Reject

• The null and alternate hypotheses are noted below:

• H3: The efficiency of inventory management systems does not

• H3: The efficiency of inventory management systems reduces

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