1.

4 LITERATURE REVIEW
Omachonu et al (2008) attempted to empirically study the overall customer satisfaction. They
investigated whether customer’s expectation of service quality and perceived service quality
have causal impacts on overall customer satisfaction. Using the data collected from the American
Customer Satisfaction Index (ACSI) and application of the Granger causality method, they
concluded that perceived quality and satisfaction were positively related. They also stated that
this may leads to customer satisfaction in retailing.

Fisher et al. (2006) conducted a study so as to enable retailers to identify action steps that are
likely to increase customer satisfaction and sales. They demonstrated the methodology using
proprietary data from a large retailer with over 500 stores. They also used monthly store-level
data on a number of operational variables including store staffing level as measured by payroll.
In-stock rate and store employee turnover, together with customer responses to satisfaction
surveys. They created a nested three-stage econometric model using these values to analyze the
marginal effects of various execution levels on sales, customer satisfaction.

Model explained approximately 97%, 75% and 71%, respectively, of the customer satisfaction,
residual variation in sales, and customer perceived in-stock. They further found that customer
perceived in-stock is primarily driven by customer rating of employee knowledge and actual in-
stock. Overall customer satisfaction is primarily driven by payroll level, customer perceived in-
stock, check-out efficiency and customer rating of employee knowledge. They also stated that
the sales are primarily driven by overall satisfaction, actual in-stock and payroll level. At last,
they proposed specific actions to improve sales, they explored relative magnitudes of these
effects and estimate the likely sales increase from those actions. On the basis of findings they
suggested that a modest reallocation of the payroll budget among stores could be expected to
yield a 2-3% increase in sales and this increase will be with no increase in cost.

Jiang and Rosenbloom (2005) formed a conclusion on the basis of incomplete information about
the role of price at retail and customer satisfaction at different stages on customer’s intention to
return. Data from the e-retailing industry related to two specific periods of shopping experience
were used in the empirical tests. The two specific periods they selected are at checkout and after
delivery. Structural equation modelling was employed to test the hypothesized relationships. The
findings of study indicated that after-delivery satisfaction has a much stronger influence on both
intention to return than at-checkout satisfaction and overall customer satisfaction .The price
perception, when measured on a comparative basis, has a positive and direct effect on customer
intention to return and overall satisfaction.

Kumiawan (2001) attempted to examine a structural equation model of customer stickiness in e-

retail business. This is done by examining the possibility to merge pre-tested structural equation
models of customer stickiness and customer preference. The Confirmatory Factor Analysis of the
observed variables suggested that the variables load on relevant factors with medium to high
loadings, shows that those variables well represent the intended underlying constructs. He found
that the community atmosphere the site created, the site’s appeal, the convenience of shopping
online, the entertainment aspect of the site, customer satisfaction and customer preference
correlate positively with customer stickiness. This led to the conclusion that customer stickiness
would in turn be facilitated if the e- retailers facilitate these factors. The final model showed to
predict customer preference in direct way only customer satisfaction and entertainment can be
used. The effect of community involvement and site’s appeal on customer preference and
stickiness was mediated by entertainment. The effect of site’s appeal and convenience was
mediated by customer satisfaction. This suggested that some customers might not feel shopping
on the e-retail entertaining, although the customers recognized that it is convenient which brings
satisfaction to them. Similarly, the feeling of being part of the community affiliation of a certain
e-retail site might be entertaining to the customers, but it doesn’t necessarily lead into customer
satisfaction. Further customer preference was found to fully mediate the relationship between
customer stickiness and the four constructs. The four constructs are the community atmosphere
the site created, the site’s appeal, the convenience of shopping online and customer satisfaction.
This implied that customer stickiness could be made smooth by ensuring that the four constructs
facilitate customer preference. However, it was not enough to ensure that the entertainment
facilitates customer preference to guarantee the customer stickiness.

Rajagopal (2010) conducted an empirical study in urban areas of Mexico and based on
competitive advantages, analyzed the complex consumer decision-making styles towards street
markets and shopping malls. They found that street markets are largely preferred by the shoppers
as they exhibit ethnic and cultural attributes. Cross-cultural attributes of stores and shopping
ambience is found to be one of the major determinants of shopping behaviour leading to
customer satisfaction. Further they found that shopping arousal is driven by inter-personal
influences, ethnicity, mall attractions, shopping ambience, sales promotions and comparative
gains among urban shoppers. Other factors that affect the above preference included location of
the mall, recreational facilities, ambience and store attractiveness in reference to brand value,
products and services, and price.
RETAIL

Jain (2000) suggested that ultimate test of a business enterprise’s success is the efficient
satisfaction of customer needs. He suggested that to serve customer needs and wants more
efficiently than competitors should be the focus of business activity. The survival of a business
enterprise depends not only on the variety of business enterprise’s products and sales volume but
also on the former’s ability to understand and satisfy the needs of customers in an efficient
manner. The starting point in efficient customer need satisfaction is the business enterprise’s
ability to deliver superior value.

Clottey et al. (2008) reported that the lower acquisition costs of attracting new customers leads to
the benefits of customer satisfaction to a business. While increasing the base profit of the
business, increased customer satisfaction may reduce.

Theoridis and Chatzipanagiotou (2009) stated that retail stores works in a competitive
environment. These stores through mergers and acquisitions are facing changes in customer
needs, demographics, technology development and retail ownership. The understanding and
prediction of customer satisfaction is fast becoming a competitive advantage factor for retail
stores in such an environment.

Kuzmanovic et al. (2011) conducted an empirical study in Belgrade, Serbia, on 60 respondents

during the period of June and July, 2010. The success of retail companies in the highly
competitive retail environment mainly depends on their achieved levels of customer satisfaction
is a suggestion on the basis of findings of conjoint analysis. The development of effective
competitive strategies, particularly strategies of differentiation, is constantly gaining importance;
they concluded this by considering the competition in the retail sector that is becoming sharper
every day. They further concluded that Differentiation in the retail sector can be seen as a
strategy, the aim of this strategy is to accommodate the specific attributes of the retail facility to
better meet the needs of a particular segment of consumers.

Pappu and Quester (2006) examined the relationship between the equity that the customer’s associate
with the retail brand and consumer’s satisfaction with a retailer. For this they conceptualized retail brand
equity as a four dimensional construct that consists of: retailer perceived quality, retailer awareness,
retailer associations, and retailer loyalty. A survey was conducted using a convenience