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AT CONVENIENCE STORES IN HO CHI MINH CITY

GROUP MEMBER – FB0663

VO THI MY LINH

PHAM QUANG NHAT

NGUYEN HOANG ANH TU

DANG NGUYEN NHAT LINH
4P AND CUSTOMER SATISFACTION

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THESIS STRUCTURE
1. INTRODUCTION ................................................................................................................................ 2
2. THEORETICAL FRAMEWORK ............................................................................................................ 4
3. LITERATURE REVIEW ........................................................................................................................ 4
a. Customer satisfaction .................................................................................................................. 4
b. Marketing Mix .............................................................................................................................. 6
Product Strategy ...................................................................................................................... 6
Price Strategy ........................................................................................................................... 7
Place Strategy........................................................................................................................... 7
Promotion Strategy .................................................................................................................. 8
4. METHOD........................................................................................................................................... 9
a. Research design ........................................................................................................................... 9
b. Participants ................................................................................................................................ 10
c. Techniques ................................................................................................................................. 10
d. Ethical ......................................................................................................................................... 11
e. Timescale ................................................................................................................................... 11
f. Resources ................................................................................................................................... 13
5. DATA FINDING................................................................................................................................ 13
6. CONCLUSION .................................................................................................................................. 13
7. RECOMMENDATION ...................................................................................................................... 13
8. REFERENCE ..................................................................................................................................... 14



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ABSTRACT

The research examines the relationship between 4P (marketing mix) and customer satisfaction at
convenience store chains in Ho Chi Minh City. A survey strategy is conducted at three
convenience store chains: Co-op Food, Circle K and Shop & Go through delivering
questionnaires to customers. Besides, SPSS is used to test the relationship between the 4P and
customer satisfaction after collecting data. The finding will indicates what factors of 4P influence
or not influence to customer satisfaction. From those results, we can also suggest some
recommendation for convenience stores after our research to help them increase customer
satisfaction based on 4P.
TOPIC: The influence level of marketing mix strategy to consumer satisfaction in the
convenience store chains at Ho Chi Minh City.
KEYWORDS: Marketing Mix, Consumer satisfaction, convenient store chain, Ho Chi Minh
Market
1. INTRODUCTION
Vietnam is a country with the population about 90 million people, in which, Ho Chi Minh (HCM)
takes approximately 9 percent, and contributes to 20 percent GDP in the whole country. Personal
income in HCM is 4,500 USD each year – one of the provinces where has the highest income
across the country. Besides, the demand for convenience store in the developed cities such as
HCM is very large because people are so busy, they prefer to go to stores that are comfortable,
fast-purchasing, variety products and services, high-quality, low price.
Additionally, with the sluggish phenomenon of overall economy - CPI during 2013 is the lowest
increase in the last 10 years, people tend to tighten expenses and buying power, but convenience
store model is more attractive due to its convenience and saving. Because people spend less and
aren’t impulse purchase when shopping there, they don’t waste too much time to queue up for
payment or find and choose products, they just buy what they need. (CPI figure)
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Following these reasons, HCM has become a potential market for both domestic and foreign
investors to develop convenience store chains. To specific, HCM has already nearly 500 stores
(following Nielsen report) such as Shop Go, Circle K, 24H, MiniStop, etc. And it still continues
to expand in the future with the growth of convenience store in our country is 80% in 2013
(following Kantar Worldpanel). The convenience stores serve the entire of consumers in its
geographical area, but focus on customers who need to purchase items outside normal working
hours and quick shoppers for snacks and related products. The convenience stores’ customers are
often night shopper, quick shopper and others.
This is an attractive market that brings the huge profit. However, the competitive problem brings
a lot of difficulties for the business in the field. Therefore, customer satisfaction is one of the
critical factors to enforce the position, increase revenue and competitive advantage for
companies. According to Peter & Donnelly (2007), each element of the marketing mix may
influent to consumers in many ways including consumer decision-making and repurchasing.
Now, we will examine the influence of marketing mix on customer satisfaction in order to know
whether there is the relationship between them or not.
RESEARCH QUESTION
“What extent does the factors of marketing mix strategies influence to customer
satisfaction?”
RESEARCH OBJECTIVES
1. To describe the factors of 4Ps in the convenience store chain at HCM city.
2. To determine the measure of effectiveness for each factor of marketing mix to
meet customer satisfaction in convenience stores
3. To make recommend for each factor in marketing mix to enhance customer
satisfaction in convenience stores.


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2. THEORETICAL FRAMEWORK













In this framework, the factors of marketing mix strategy are independent variables and consumer
satisfaction is the dependent variable.
3. LITERATURE REVIEW
a. Customer satisfaction
According to Kotler and Armstrong (1996) defined customer satisfaction as “the level of a
person felt state resulting from comparing a product’s perceived performance or outcome in
violation to his/ her own expectations”.
CUSTOMER
SATISFACTION
PLACE
PRICE
PROMOTION
PRODUCT
FAIRNESS PRICE
QUALITY
VARIETY
LOCATION
SALES PROMOTION
FACILITIES
ADVERTISING
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Based on past research, we have a lot of difference on customer satisfaction definition. However,
three general components can be identified. Firstly, consumer satisfaction is a response of
varying intensity such as “like”, “love”, “frustrated”, “satisfied”, and “neutral”…depending on
the situation. Secondly, the response relates to a particular focus that usually entails comparing
performance to some standard, for example, product, expectation, salesperson or store. Thirdly,
the response occurs at a particular time, maybe, it is after consumption, after choice or
consumption experience. And satisfaction is only determined at the time the evaluation occurs.
Following IGD – is a research and training charity that helps the food and consumer goods
industry deliver the needs of the public, it categorizes:
 Hypermarkets and superstores: large format stores that sell a full range of grocery items
and typically a substantial non-food range. Hypermarkets have a sales area of 60,000
square feet +, superstores are 25 – 60,000 square feet.
 Small supermarkets: defined as food-focused stores with a sales area of 3 – 25,000
square feet.
 Convenience stores: stores with a sales area of less than 3,000 square feet, which are
often open for long hours and sell products from at least eight different grocery
categories. (See more at attached table)
Customer satisfaction results in various benefits for a store. Satisfied customer buy more often
and there is less chance of losing them to rivals. Westbrook and Oliver (1991) argue that
customer satisfaction is “a post-choice evaluative judgment concerning a specific purchase
selection” so that it can bring consumers to the convenience store. According to research of
ACSI, the important elements influent to shopping experience of retail stores, including:
 Store layout and cleanliness
 Checkout speed
 Staff courtesy
 Store locations and hours
 Sale and promotion frequency
 Merchandise variety and selection
 Ability to provide brand names
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 Merchandise availability
 Website
b. Marketing Mix
The marketing mix is defined as 4Ps of product, price, place and promotion (Kotler & Armstrong,
2006) is used by companies to achieve their objective. As M. J. Baker (2003) states the
marketing mix is the way to maximize customer’s satisfaction and it results in higher sales and
market share. When a store sets up a business, it needs to create a successful mix of the right
product, sell at the reasonable price, in the right place and use an appropriate promotion strategy.
Product Strategy
According to Kotler & Armstrong (2006), define a product as anything that can be offered to a
market for attention, acquisition, use, or consumption that might satisfy a want or need. They
further define a consumer product as the product bought by the final consumer for personal aim.
Product is about quality, brand name, variety.
According to Anuchat Chamchong & Phusit Wonglorsaichon, he researches about the title of the
relationship between total quality management and customer satisfaction in the Thai service
industry by 200 questionnaires. He concludes that the total quality management has a positive
relationship with customer satisfaction. In addition, the study finds that total quality management
can be applied in the developing country.
According to Managing Quality research of Garvin (1988), there are 8 dimensions of product
quality:
1. Performance of the primary operating characteristics of a product or service
2. Features of the secondary characteristics of a product or service
3. Conformance or the match with specification or pre-established standards
4. Durability or product line
5. Reliability or the frequency with which a product or service fails
6. Serviceability or the speed, courtesy and competence of repair
7. Appearance
8. Image/ perceived quality or reputation
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According to Yuen & Chan (2010), it is not all of elements of Garvin are relevant, something is
difficult to measure. Therefore, we only use two elements in dimension of product quality for the
convenience stores: freshness or durability of product.
According to Dellaert et al (1998), he report that if the retailer give customer a variety choice in
product category, it creates convenience for purchasing to increase customer satisfaction from
difference customers.
Price Strategy
Kotler and Armstrong define price as “the amount of money charged for a product or service, or
the sum of the values that consumers exchange for the benefits of having or using the product or
service.” Price is not only the advantage competitive for which stores have a reasonable price but
also it a key to abstract and get satisfaction of customer.
According to Herrmann, Xia, Monroe & Huber (2007), he approves that customer satisfaction is
also directly influenced by the price factor. The price fairness effect the customer satisfaction in
a positive way but the perceived price fairness can be negatively affected by the customer’s
vulnerability. Or another article of Peng and Wang (2006) proposed that for buying the product
and services the customer has to pay some price which is the financial cost for the customer.
Price is the important factor which persuades the customer decision for buying the products and
services. Perceive price play a vital role in deciding from whom to get the service. The other
article from Oliver (1997) he wrote that mostly the price is being judged by the consumers in
accordance to the service quality which in turn creates the satisfaction or dissatisfaction, which
depends on the principle of equity. The consumer wants to do the deal with the service provider
in the case when the price is being perceived by the consumer’s price fairness.
Place Strategy
Kotler and Armstrong (2006) define place or distribution as a set of interdependent organizations
involved in the process of delivering a product available for use or consumption by consumers.
Place involves decisions concerning the distribution channels to be used and their management,
the location of outlets, assortment, atmosphere, convenience, and transport (Borden, 1984). A
store can position or reposition a product by locating that product with a store.
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A marketing strategy for distributing products can influence consumers in several ways:
Firstly, location can mean convenience and accessibility and the number of stores. Phuc Hong
Lu shows that consumer were relatively high satisfied with location of supermarkets. In order
words, they prefer to shop at the convenient supermarket. For example, if a store is the only one
of its kind in a certain area, or is in a high traffic area with a visible store front, the store has a
competitive advantage.
Besides, the number of store affect to the sales and the familiarity of customer. Products that are
convenient to buy in a variety of stores increase the chances of consumers finding and
purchasing them. When customers are seeking for popular and inexpensive products, they tend to
buy at anywhere that is near to them and are unlikely to become loyalty with specific store.
(According to Jayaraman Munusamy & Wong Chee Hoo)
Secondly, facilities are likely shelves, display, decoration, and spacious atmosphere. Shelves
strategy is focused on how stores put or organize product that be able attract customer’s eyes
(follow Rafael &Miguel, 2009). Manuel (2007) says that the brand often pay supermarket
because they want to place their products on this level. Furthermore,. shop layout/ aisles that
make it easy to move around, store cleanliness and well-shaped product displays and it will
improve customer shopping experience. Phuc Hong Lu indicates that customers are most pleased
with clean and spacious atmosphere of the supermarkets or store in general.
Promotion Strategy
Kotler and Armstrong defined promotion as activities that communicate about the product goods
and services and to convince customers to buy it. Promotion is known as sales promotion,
advertising, personal selling, public relations and direct marketing. It makes products become
more familiar with consumers that help them have a background about products. Hakansson
(2005) reports that promotion appears as an issue of how create an optimal mix of marketing
communication tools in order to get a product’s message and brand from the producer to the
consumer.
Advertising is any paid form of non-personal presentation and promotion of ideas, goods or
services by an identified sponsor (Kotler) such as via Internet, newspaper, flyer, TV....
Advertising will help customer become aware of product, attract the potential customer,
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stimulate repeat purchase of peoducts and service. Depending on purposes, they can use one of
the following three advertising objectives:
 Informative advertising: is used when introducing a new product category
 Persuasive advertising: is a type of promotion that attempts to influence a consumer in
favor of a purchasing particular good and service.
 Reminder advertising: is important with mature product to help maintain customer
relationships and keep customers thinking about the product.
Sales promotion is any initiative undertaken by and organization to promote an increase in sales,
usage or trial of product or service (Kotler). Some examples of sales promotion activities are:
buy one get one free, free gifts, discounted prices, free samples, vouchers and coupons…these
tools will encourage consumers to buy more.
Although sales promotion can help us to attract customer and increase sales figure. However, if
we use it improperly and frequently, it may create unexpected consequences for store. According
to Waanders, Koen (2013), price promotions can negatively influence aspects of a brand that is
promoted, such as the perceived brand quality a brand image that are untrustworthy.
4. METHOD
a. Research design
This research is descriptive, which describes the factors of 4Ps in the convenience store chains
and draw the picture of the relationship between customer satisfaction and 4Ps in that field to
answer the question “what extent”. Besides, the research also uses a survey strategy to capture
“what”, “who”, “where”, “how much” and “how many” consumers experience shopping at the
moment. The research will be in Ho Chi Minh City. Finally, it is exploratory study that provides
the useful information in reaching customer satisfaction by 4P and gets a clearer view of the
relationship through the use of research instrument in a reliable or representative sampling of
population.
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b. Participants
Most of people who are living at Ho Chi Minh are immigrants. The life of Ho Chi Minh
residents is busy. Industry lifestyle makes to increase demand for convenience, saving time.
Shopping at convenience stores will be alternative choice for consumers. Ho Chi Minh City is
potential market for a lot of retailers. Although, there are conditions to survey for this research’s
purpose, the budget and time for research are limited. Therefore, our group accesses to
representative sample of customers of 3 retailers: Co-op Food, Shop & Go, and Circle K. The
customers were chosen randomly in those stores at district 1 - Ho Chi Minh city. We choose
district 1 to get sample because of some reasons. Firstly, Ho Chi Minh population tends to
concentrate on center district and district 1 is the busiest place and have highest live standard at
Ho Chi Minh. Secondly, a lot of convenience stores place at district 1. Especially, Shop & Go
and Circle K place a lot of stores in this district. Additionally, the behavior of consumers who
lives at center district has the clearest show. This way brings convenience for our group in
sampling. The representative samples drawn from grades, occupation between males and females.
We plan to get 300 samples for this research. The samples will be chosen from the stores in the
same ward at district 1 because of the purpose of convenience and saving time and budget.
c. Techniques
Delivery and collection questionnaire is one of the types of questionnaire that questionnaires are
distributed by hand to each respondent and collect later. To the research, we deliver
questionnaires to consumer at the entrance of the convenience store. A total of 30 questions
participate in the research. To specific, the questionnaire is divided into 2 parts. First part
consists of questions containing to demographic profile such as gender, age, marital status,
occupation, shopping frequency and so on. Second part will examine the participants’ agreement
or disagreement with questions related to four factors of 4P (product, price, place, and promotion)
to know whether or not it influences to customer satisfaction. These questions have five options
such as strong satisfied, satisfied, not sure, dissatisfied and strong dissatisfied with the rating
from 5 to 1, respectively. Each participant is invited to complete the form of survey
questionnaire that take approximately 10 minutes. If respondents have anything that they don’t
understand, we can clarify for them instantly. However, we will not give any idea that can
influence respondents’ opinion and cause error data.
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A pilot test is done where the questionnaire is tested on statistically 30 samples of respondents
from our classmates before a full-scale study in order to minimize any unforeseen problems such
as unclear wording, flow of the questions, the questionnaire taking too long to administer, data
recording issues or the reliability of the data that will be collected.
After the data is collected, we will use SPSS to analyze. A multiple regression is conducted to
test the relationship between the factors (independent variables) of 4P and customer satisfaction
(dependent variable). Besides, each data contributes meaningful information. The larger the
sample size, the more reliable for the mean, the more the variation, the less reliable the mean.
The results from these will be used to identify the relationship between 4P and customer
satisfaction in convenience stores and to allow comparison with the existing researches.
d. Ethical
We will tell the participants who we are and what they are being asked to do and the purpose of
our research project, and to assure that their responses to each of the questionnaires will only be
seen and used by us. All participants are selected and treat equitably. They are entirely voluntary
and if an intended participant does not want to take part, they completely have the right to refuse
without any obligation or prejudice.
Besides, participants will not be forced to fill their name in the study, they can vacate or use
nickname. The questionnaires just inquire about limited personal data (such as what factors of
store make them satisfied) and avoid exploiting sensitive information. These responses will be
ensured confidentiality, anonymity and accuracy. It would be no harm resulting from
participating in this survey.
e. Timescale




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Activity

M
a
y



J
u
n
e



J
u
l
y



A
u
g
u
s
t

Week number

1


2


3


4


5


6


7


8


9


1
0


1
1


1
2

Read literature

Decide on

objectives

Draft the literature

review

Read methodology

literature

Draft the research
proposal

Develop

questionnaire do
the pilot test and
revise

Administer

questionnaire

Enter and analyze

the data

Draft finding
chapters and
update literature

Complete the

remaining chapters
and submit to tutor

Revise, draft

format and print

Submit

Reflective diary


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f. Resources
As the outlined above, we collect data through conducting survey and access data by SPSS. Our
group has four members so we will divide task as the following. Nhat Linh takes responsible for
producing and copying questionnaires. Nhat will response to collect data by sending survey to
customer at convenience stores. Once we receive the data from questionnaires, Tu will response
to input data and run SPSS to analyze data. Finally, My Linh will summarize and synthesis data
to report.
5. DATA FINDING
Based on the result of analyzing data, we know what kind of customers often shop at
convenience stores through demographic profile such as age, gender, occupation…or how many
often they shop. Furthermore, after using multiple regressions, we will have a picture of what
factors in 4P have the significant or insignificant relationship with customer satisfaction.
6. CONCLUSION
We will summarize concisely about the research what factor of 4P has the influence to customer
satisfaction including positive and negative. Furthermore, in each factor, there may have some
variables influence but other not. For example, place have two variables: location and facilities.
After the research, we may realize that customer is satisfied by location of a convenience store
but don’t concern about facilities.
7. RECOMMENDATION
Through our group research evidence, we will know more about the relationship between 4P and
customer satisfaction in three convenience stores (Shop Go, Family Mart, Co-op Food) in Ho
Chi Minh. Therefore, it is recommended that we can expand the sampling to other stores for
future research to examine whether it is the same results. Besides, we also have some experience
resulting from this research; we can recommend improving for future research such as sample
size or variables…
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REFERENCE
1. Andreas Herrmann, Lan Xia, Kent B, Frank Hubber (2007). Journal of product and brand
management. The influence of rice fairness on customer satisfaction.
2. Borden, Neil. H. (1984). The concept of marketing mix, Journal of Advertising Research.
3. David A. Garvin (1988). Managing Quality: The Strategic and Competitive Edge
4. Jayaraman Munusamy & Wong Chee Hoo. Relationship between Marketing Mix
Strategy and Consumer Motive: An Empirical Study In Major Tesco Stores.
5. Kotler, Phillip & Armstrong, Gary (2006). Principles of marketing (11
th
Ed.). New York:
Pearson International.
6. Michael J. Baker (2003) The Marketing book, Chapter 11.
7. Oliver, Richard. 1997. Satisfaction: A Behavioral Perspective on the Consumer. New
York: The McGraw-Hill Companies, Inc.
8. Peter, P.J & Olson, J. H(2007). Marketing management: Knowledge and skills (8
th
Ed.).
New York: McGraw-Hill
9. Rafae Lucena Matamalas & Miguel Santandreu Ramos, 2009. Marketing Strategy of `the
Supermarket.
10. Waanders, Koen, 2013. The effectiveness and consequences of price promotions – Is
there a difference between store brands and high end brands.
11. Westbrook, Robert A. and Richard P. Oliver. 1991. “The Dimensionality of Consumption
Emotion Patterns and Consumer Satisfaction.” Journal of Consumer Research 18(June).
12. Paul Peter and James Donnelly Jr – Marketing Management Textbook
13. thetimes100.co.uk – The marketing mix in the food industry
14. thesaigontimes.vn – Thời của cửa hàng tiện lợi, siêu thị mini – 5/8/2013
15. vneconomy.vn – CPI năm 2013 tăng thấp nhất trong vòng mười năm – 23/12/2013
16. Online Trade and Investment Information Portal - itpc.hochiminhcity.gov.vn – Chuỗi cửa
hàng tiện lợi phát triển nhanh tại Việt Nam – 26/8/2013
17. vtv.vn – Nở rộ cửa hàng tiện lợi, siêu thị mini tại TP. HCM – 1/10/2013
18. vietnamplus.vn – Mini supermarkets, convenience stores on the rise – 4/10/2013
19. http://www.theacsi.org/industries/retail/specialty
20. https://www.listplanit.com/2010/01/list-of-categories-for-an-organized-grocery-list/

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Table:
1.
Some of the grocery categories
Beverages Coffee, tea, juice, soda
Bread/ Bakery Sandwich loaves, dinner rolls, bagels
Canned/ Jarred goods Vegetables, spaghetti sauce, ketchup
Dairy Cheeses, eggs, milk, yogurt, butter
Dry/ Baking goods Cereals, flour, sugar, paste
Frozen Foods Waffles, individual meals, ice cream
Meat Poultry, beef, pork
Cleaners Laundry detergent, dishwashing liquid
Paper goods Paper towels, toilet paper, aluminum foil
Personal Care Shampoo, soap, hand soap, shaving cream
Other Baby items, pet items, greeting cards

2.
Convenience stores Address
SHOP & GO
74A1, Hai Ba Trung Street, Ben Nghe ward, District 1
46, Ngo Duc Ke Street, Ben Nghe ward, District 1
167A, Nguyen Thi Minh Khai, Pham Ngu Lao ward, District 1
6, Cach Mang Thang 8, Ben Thanh ward, District 1
194, Bui Vien, Pham Ngu Lao ward, District 1
158, Tran Quang Khai, Tan Dinh ward, District 1
58, Vo Thi Sau, Tan Dinh ward, District 1
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254, Nguyen Cong Tru, Nguyen Thai Binh ward, District 1
41, Nguyen An Ninh Ben Thanh ward, District 1
161, Nguyen Thai Hoc, Pham Ngu Lao ward, District 1
152, Tran Hung Dao, Nguyen Cu Trinh ward, District 1
169B, De Tham, Pham Ngu Lao ward, District 1

CIRCLE K
251, De Tham, Pham Ngu Lao ward, District 1
44, Le Lai, Ben Thanh ward, District 1
15B1, Le Thanh Ton, Ben Nghe ward, District 1
95, Le Thanh Ton, Ben Nghe ward, District 1
69, Ho Tung Mau, Ben Nghe ward, District 1
49, Dong Du, Ben Nghe ward, District 1
139, Bui Vien, Pham Ngu Lao ward, District 1
24B, Ho Huan Nghiep, Ben Nghe ward, District 1
36, Hai Ba Trung, Ben Nghe ward, District 1
19, Cong Truong Lam Son, Ben Nghe ward, District 1

Co.op Food 95, Pasteur, Ben Nghe ward, District 1