International Journal of Commerce & Business Studies

Volume 1, Issue 1, July-September, 2013, pp. 38-46

© IASTER 2013, www.iaster.com

Measuring the Service Gap of In-Store Promotions

in Organized Retailing
V. Sakthirama*, N. Venkatesa Palanichamy **and S.D.Sivakumar**
*Research Associate, **Professor, Dept. of Agricultural and Rural Management
Tamil Nadu Agricultural University, Coimbatore, India

ABSTRACT
The issue surrounding the measurement and provisions of service quality of in-store promotional
communication is becoming increasingly important in retail sector. The purpose of the current study is
to identify the service quality factors affecting customer satisfaction levels of the customers. The study
is based on the responses of 180 customers with structured questionnaire from six retail outlets
located in Coimbatore and Chennai city. The discussion in the paper on in-store promotional service
quality gap with dimensions namely, on pack promotions, free demonstrations, in-store display, in-
store media and cross/up selling during purchase in the process of retail marketing and explores the
possible situations in retail outlets that may lead to lower customer satisfaction. Details of the findings
and their implications are discussed in this study.

Keywords: In-Store Promotional Communication, Customer Awareness, Customer Expectation,

Customer Satisfaction.

1. INTRODUCTION

During past two decade the Indian retail industry have been enormous growth and become the largest
among all industries. India retail industry is accounting for over 10% of the country’s GDP and around
6-7 per cent of the employment. According to A.T.Kearney, though retailing accounts $410 billion,
organised retailing accounts for only 5 per cent of the market. Expanding at a rapid pace of Indian
retailing is expected to grow $635 billion by 2005. As well the organised retailing is to touch 10 per
cent. Though India has the highest number of retail outlets per capita in the world, it has the lowest
retail space per capita in the world (2ft/ person).

Delivering higher levels of service quality is the strategy that is increasingly being offered as a key to
service provider’s efforts to position themselves more effectively in the market place. Almost all
retailers perform same promotional functions to make customer footfall into their stores. Therefore,
customer takes into account the relative efficiency while choosing a particular store. Moreover, all
customers expect better services from retailer. Under such circumstances, customer’s decision to
patronize one and not the other is based on quality service offered to him. Firms, therefore, proper or
decline, depending upon the quality of service they provide to their customers. Because of this
widespread belief, as a service organisation retailing, have placed in-store service quality at the top of
the list of strategic constructs. The present paper, therefore, attempts to assess the in-store promotional
communication gap at retail outlet and its direct effect on customer visits.
International Journal of Commerce & Business Studies
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2. LITERATURE REVIEW
Although researcher has studied the concept of service for several decades, there is no consensus about
the conceptualization of service quality (Cronin 1992; Rust 1994). Different researchers focused on
different aspects of service quality. The most common definition is the traditional notion that views
quality as the customer’s perception of service excellence. Parasuraman et al., (1988) explained that
service quality has been described as a form of attitude related but not equivalent to satisfaction that
results from the comparison of expectation with performance. Lewis and Mitchell (1990) viewed that
if expectation are greater than performance, then perceived quality is less than satisfactory and hence
customer dissatisfaction occurs. Hoffman and Bateson (2001) defined service quality as an attitude
formed by a long term, overall evaluation of a performance. Arnauld et al. (2002) portrays perceived
service quality as a general, overall appraisal of service i.e. a global value judgment on the superiority
of the overall service and it is viewed as similar to attitude. In the study, service quality is viewed as
good if the perceptions are greater than the expectations of the customers and less than satisfactory if
the expectations are more than the perceptions.

3. MATERIALS AND METHODS

The sample data were collected randomly from 180 customers with structured questionnaire from six
retail outlets located in Coimbatore and Chennai city. The SERVQUAL measuring instrument
developed by Parasuraman et al., (1988) was adapted and used for present study. It was pre-tested
among a number of customers. A number of other industry specific empirical studies have been
conducted using SERVQUAL Model which include some mostly cited studies carried out in car
retailing (Carman 1990), travel and tourism (Fick 1991), banks (Lewis, 1991; Lassar et al. 2000;
Angur et al. 1999), medical services (Bown 1989). SEVQUAL was, therefore chosen as an ideal
instrument for studying in-store service quality perception in retailing.

4. RESUL AND DISCUSSION

In-store Promotional Service Quality Gaps at Retail Outlets
Customer service is largely a function of perception, expectations and the service actually provided. If
customer expects a certain level of services and services provided by the retailer fails to match the
customer’s expectations, the service would be perceived as existence of gap. Dissatisfaction with
services provided largely originates from the difference between expectations and what is actually
provided. This is the basic prime factor for understanding the gaps that arises in customer service. In
this study, the quality of service was measured with respect to six dimensions viz., in-store (offer/
price) display boards, in-store TV displays, store ambience, promotional pricing, communication and
customer service. The 31 attributes speaking about in-store promotional service quality was used to
analyze the expectation and perception of the customers and their gaps were analyzed.

The active customers of the store rated the expectation level of each attribute which they took into
consideration while selecting the store for the purchase of goods and services. Expectations of the customers
for the 31 attributes were collected on five-point scale of highly important, important, neutral, less important
and least important. The expectation scores pertaining to attributes of the retail in-store promotional service
quality of outlets are listed in the Table 1. The highest mean score ratings of the attributes obtained for each
International Journal of Commerce & Business Studies
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items has been bolded in the Table 1. The attributes related to in-store (offer/price) display boards as
perceived to be important were analyzed. The data reveals that effective maintenance attribute was rated as
highly important with the mean score of 4.74. This is because majority of the respondents expressed that the
particular attribute is one of the prime factors for in-store promotional communication. Respondents rated the
expectations of the ambience for hygiene is 4.81. Among the promotional pricing attributes, the high
seasonal price offer (4.70) was presented under highly important category.

The perception rating of each attributes by active shoppers of the store were listed in Table 2. The
highest mean score ratings of the attributes obtained for each items has been bolded in the Table 2. This gives
an idea of the maximum satisfaction response given by the customers for each variable. The data
reveals that interesting attribute was rated as highly satisfied with the mean score of 4.73. and for hygiene
4.72. Among the customer services was the CSA (Customer Service Assistance) giving detailed
information on the offer (4.80).

From the Table 3, it could be observed that, among the 31 attributes, 9 attributes namely, the in-store
offer/price boards or displays attributes like interesting, attractive and professional, store ambience
like lightings, signage and hygiene, promotions provides all information, promotions are
communicated at the footstep of customer enter into the store and CSA (Customer Service Assistant)
give detailed information on the offer were not statistically significant and there was no service quality
gap existing in the above items. The remaining 22 attributes had significant differences and it implied
that, there existed gaps between customer expectation and satisfaction of these attributes.
The paired t-test of the attributes such as the in-store offer/price boards or displays attributes like
entertaining, effective maintenance and informative, ambience like odour, tools/displays maintained
properly, layout of the store is convenient for shopping, seasonal offers are more, provide timely
information reach, pre offer communication is adequate and display at point of sale is influence on
buying decision were significant and it was implied that, expectation and perception score were not
exactly matching with each other. Here, the expectation of respondents exceeded the perception of the
respondents with a gap of 0.79, 0.82, 0.97, 0.68, 1.93, 1.92, 0.45, 0.48, 1.25, and 0.28 for the attributes
respectively. Hence, it could be concluded that respondents were somewhat satisfied with the
attributes.

The Table 3, it is obvious that, the paired t-test value of the attributes such as the in-store TV displays
attributes like entertaining, effective maintenance, interesting, attractive, informative, and professional
and the store ambience like music, temperature were significant. There exists gap for all the attributes
which stated that, the customer expectation was high.

The results of paired t test that is shown in Table 3, evidently explained that, the expectation and
perception with respect to the attributes of responsiveness was not matching which showed that, the
respondents were not satisfied with the attributes viz., Promotional pricing attributes such as
reasonable pricing when compared to competitors and pricing stimulates the impulse of customers. It
was also reported that, the customer service like cashier provide information at point of purchase and
cross and up selling attempts always were significant at five per cent level.
International Journal of Commerce & Business Studies
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CONCLUSION

The aforementioned trends largely indicate that among the in-store promotional communications the
in-store offer/price boards or displays is meet the customer expectation than In-store TV displays. The
retailers have to formulate strategies to improve TV display advertisements in outlets. According to
ambiance other than music and temperature all other attributes are considered good by respondents.
The firms should concentrate on pricing decision of products and services, and also competitive
pricing to be maintained. Hence, the customer relationship can be maintained effectively.
Communication of promotions followed by retailers is making customer delight with less service gap.
To rectify the responsiveness gap, the case firm should give adequate training to its employees to
enhance the sales. The employee should also trained to make speed check outs. Cashier should provide
correct information at point of purchase. They should update with all means like promotions and price
changes. Customer service must match with marketing efforts, otherwise a customer would remain a
dissatisfied soul and all marketing efforts will go down the drain. The process of fulfilling customer
needs, therefore, requires tailoring retail store services to what customer want, rather than making
them accept whatever retailers can conveniently provide.

REFERENCES

1) A.T..Kearney (2009). Growth opportunities for global retailers. The A.T.karney 2009 global
retail developmentindex.
2) Angur, M.G., Nataraajan, R. and Jahera Jr, J.S(1999), “ Service Quality In The Banking
Industry: An assessment In A Developing Economy,” International journal of bank Marketing,
Vol.17.no.3,116-123.
3) Arnauld, E. J., L.L. Price, and G.M. Zinkhan, “Consumers”, (New York: McGraw Hill Higher
Education, 2002), p102.
4) Bown, S.W. and Swartz, T.A.(1989), “A Gap Analysis of professional Service Quality,” Journal
of marketing, Vol.53, April, pp.92-100.
5) Carman, J.M.(1990), “Consumer perceptions of Service Quality : An Assessment of the
SERVQUAL Dimensions” Journal of retailing, Vol.66, Spring, 33-56.
6) Cronin, J.J. and Taylor, S.A. (1992), “Measuring Service Quality: A Re-examination and
Extension”, Journal of Marketing, Vol.56, July, pp.55-58.
7) Fick, G.R and Ritchie, J.R.B.(1991), “Measuring Service Quality in the Travel and Tourism
Industry,” Journal of Travel Research, Vol. 30, no.3, pp.2-9.
8) Hoffman, K.D. and J.E. Bateson, “Essentials of Service Marketing: Concepts, Strategies and
Cases”, (Australia: South Western Thompson Learning, 2001), p.324.
9) Lassar, W.M., Manolis, C., and Winsor, R.D.(2000),” Service Quality Perspectives and
Satisfaction in Private Banking,” Journal of Services marketing, 14, (2/3):244-272.
10) Lewis, B.(1991),”Service Quality: An international Comparison of bank Customers
Expectations and Perceptions,”Journal of Marketing management, Vol.7,pp.47-62.
11) Lewis,B.R. and V.W.Mitchell, (1990), “Defining and Measuring the Quality of Customer
Service” Marketing Intelligence and Planning, 6(2):11-17.
12) Parasuraman, A., Valarie A. Zithmal and Leonard L. Berry, (1988), “A Multiple Item Scale for
Measuring Consumer Perceptions of Service Quality”, Journal of Retailing, 64(spring): 2-37.
13) Rust, R.T. and Oliver, R. (1994), Service Quality, Landon, Sage publications.
International Journal of Commerce & Business Studies
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FIGURES AND TABLES

Table 1: Expectation about In-Store Promotion And Communication
Highly Less Least
Important Neutral Expectation
Attributes Important Important Important
No. (%) No. (%) Mean Score
No. (%) No. (%) No. (%)
In-store (Offer/Price) display boards,
Entertaining 94 (52.20) 60 (33.30) 26 (14.40) 0 0 4.38
Effective maintenance 140 (77.80) 33 (18.30) 7 (3.90) 0 0 4.74
Interesting 144 (80.00) 24 (13.30) 11 (6.10) 1(0.60) 0 4.73
Attractive 128 (71.10) 30 (16.70) 22 (12.20) 0 0 4.59
Informative 131 (72.80) 30 (16.70) 19 (10.60) 0 0 4.62
Professional 118 (65.60) 41 (22.80) 21 (11.70) 0 0 4.54
In-store TV displays
Entertaining 24 (13.30) 31 (17.20) 64 (35.50) 46 (25.60) 15 (8.30) 3.02
Effective maintenance 32 (17.80) 14 (7.80) 33 (18.30) 41 (22.80) 60 (33.30) 2.54
Interesting 18 (10.00) 12 (6.70) 28 (15.60) 60 (33.30) 62 (34.40) 2.24
Attractive 20 (11.10) 15 (8.30) 22 (12.20) 20 (11.10) 103 (57.20) 2.05
Informative 22 (12.20) 5 (2.80) 15 (8.30) 47 (26.10) 91 (50.60) 2.00
Professional 22 (12.20) 22 (12.20) 22 (12.20) 25 (13.90) 89 (49.40) 2.24
Ambience
Music 90 (50.00) 66 (36.70) 21 (11.70) 2 (1.10) 1 (0.60) 4.34
Temperature 121 (67.20) 47 (26.10) 12 (6.70) 0 0 4.61
Odour 124 (68.90) 43 (23.90) 13 (7.20) 0 0 4.62
Lightings 133 (73.90) 32 (17.80) 15 (8.30) 0 0 4.66
Signage 134 (74.40) 30 (16.70) 16 (8.90) 0 0 4.66
Hygiene / Cleanliness 154 (85.60) 18 (10.00) 8 (4.40) 0 0 4.81
Tools/Displays maintained properly 129 (71.70) 36 (20.00) 14 (7.80) 1 (0.60) 0 4.63
Layout of the store is convenient for
121 (67.20) 45 (25.00) 14 (7.80) 0 0 4.59
shopping
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Promotional pricing
Reasonable when compared to
123 (68.30) 36 (20.00) 21 (11.70) 0 0 4.57
competitors
Stimulates the impulse of customers 129 (71.10) 44 (24.40) 7 (3.90) 0 0 4.68
Seasonal offers are more 142 (78.90) 22 (12.20) 16 (8.90) 0 0 4.70
Communication
Promotions provides all information
118 (65.60) 47 (26.10) 15 (8.30) 0 0 4.57
about products, price and usage

Promotions are communicated at the

117 (65.00) 44 (24.40) 19 (10.60) 0 0 4.54
footstep of customer enter into the store

Provide timely information reach 149 (82.80) 16 (8.90) 15 (8.30) 0 0 4.74

Pre-offer communication is adequate 135 (75.00) 36 (20.00) 9 (5.00) 0 0 4.70
Customer service
CSA* give detailed information on the
147 (81.70) 21 (11.70) 12 (6.70) 0 0 4.75
offer
Cashier provide info at point of purchase 141 (78.30) 26 (14.40) 13 (7.20) 0 0 4.71
Display at POS* is influence on buying
154 (85.60) 12 (6.70) 14 (7.80) 0 0 4.78
decision
Cross & Up selling attempts always 93 (51.70) 42 (23.30) 44 (24.40) 1 (0.60) 0 4.26
Note: CSA*- Customer Service Assistance, POS*-Point of Sale.
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Table 2: Satisfaction about in-store promotion and communication

Highly Highly
Satisfied Neutral Dissatisfied Perception
Attributes satisfied Dissatisfied
No. (%) No. (%) No. (%) Mean Score
No. (%) No. (%)
In-store (Offer/Price) display boards,
27
Entertaining 86 (47.80) 67 (37.20) 0 0 4.33
(15.00)
Effective maintenance 133 (73.90) 40 (22.20) 7 (3.90) 0 0 4.70
Interesting 137 (76.10) 38 (21.10) 5 (2.80) 0 0 4.73
Attractive 139 (77.20) 33 (18.30) 7 (3.90) 1 (0.60) 0 4.72
Informative 126 (70.00) 34 (18.90) 13 (7.20) 7 (3.90) 0 4.55
19
Professional 126 (70.00) 31 (17.20) 4 (2.20) 0 4.55
(10.60)
In-store TV displays
54
Entertaining 24 (13.30) 7 (3.90) 60 (33.30) 35 (19.40) 2.58
(30.00)
Effective maintenance 28 (15.60) 15 (8.30) 16 (8.90) 44 (24.40) 77 (42.80) 2.29
Interesting 23 (12.80) 8 (4.40) 2 (1.10) 51 (28.30) 96 (53.30) 1.95
Attractive 20 (11.10) 8 (4.40) 3 (1.70) 4 (2.20) 145 (80.60) 1.63
Informative 24 (13.30) 5 (2.80) 2 (1.10) 23 (12.80) 126 (70.00) 1.77
Professional 24 (13.30) 3 (1.70) 4 (2.20) 26 (14.40) 123 (68.30) 1.77
Ambience
53
Music 56 (31.10) 51 (28.30) 19 (10.60) 1 (0.60) 3.79
(29.40)
31
Temperature 58 (32.20) 61 (33.90) 29 (16.10) 1 (0.60) 3.81
(17.20)
Odor 117 (65.00) 51 (28.30) 10 (5.60) 2 (1.10) 0 4.57
Lightings 130 (72.20) 46 (25.60) 4 (2.20) 0 0 4.70
Signage 138 (76.70) 35 (19.40) 5 (2.80) 2 (1.10) 0 4.72
Hygiene / Cleanliness 153 (85.00) 25 (13.90) 2 (1.10) 0 0 4.84
Tools/Displays maintained properly 103 (57.20) 65 (36.10) 12 (6.70) 0 0 4.51
Layout of the store is convenient for shopping 99 (55.00) 68 (37.80) 13 (72) 0 0 4.48
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Promotional pricing

Reasonable when compared to competitors 88 (48.90) 73 (40.60) 17 (9.40) 2 (1.10) 0 4.37

28
Stimulates the impulse of customers 75 (41.70) 65 (36.10) 12 (6.70) 0 4.13
(15.60)
Seasonal offers are more 131 (72.80) 39 (21.70) 10 (5.60) 0 0 4.67
Communication
Promotions provides all information about
131 (72.80) 30 (16.70) 11 (6.10) 8 (4.40) 0 4.58
products, price and usage

Promotions are communicated at the footstep

126 (70.00) 33 (18.30) 17 (9.40) 4 (2.20) 0 4.56
of customer enter into the store

Provide timely information reach 138 (76.70) 34 (18.90) 7 (3.90) 1 (0.60) 0 4.72
Pre-offer communication is adequate 123 (68.30) 48 (26.70) 8 (4.40) 1 (0.60) 0 4.63
Customer service
CSA* give detailed information on the offer 154 (85.60) 17 (9.40) 8 (4.40) 1 (0.60) 0 4.80
20
Cashier provide info at point of purchase 124 (68.90) 22 (12.20) 14 (7.80) 0 4.42
(11.10)
Display at POS* is influence on buying
153 (85.00) 13 (7.20) 12 (6.70) 2 (1.10) 0 4.76
decision
49
Cross & Up selling attempts always 87 (48.30) 37 (20.60) 5 (2.80) 2 (1.10) 4.12
(27.20)
Note: CSA*- Customer Service Assistance, POS*-Point of Sale.
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Table 3: Gap analysis for every item of customer service quality

Expectat Perception
Gap
Attributes ion Mean Mean Score t-Value
(E-P)
Score (E) (P)
In-store (Offer/Price) display boards
Entertaining 4.3778 4.3278 .0500 .785 NS
Effective maintenance 4.7389 4.7 .0389 .819 NS
Interesting 4.7278 4.7333 -.0056 -.098 NS
Attractive 4.5889 4.7222 -.1333 -2.160 NS
Informative 4.6222 4.55 .0722 .966 NS
Professional 4.5389 4.55 -.0111 -.142 NS
In-store TV displays
Entertaining 3.0167 2.5833 .4333 5.525**
Effective maintenance 2.5389 2.2944 .2444 3.952**
Interesting 2.2444 1.95 .2944 5.053**
Attractive 2.05 1.6333 .4167 5.674**
Informative 2 1.7667 .2333 4.736**
Professional 2.2389 1.7722 .4667 6.096**
Ambience
Music 4.3444 3.7889 .5556 5.892**
Temperature 4.6056 3.8111 .7944 8.383**
Odour 4.6167 4.5722 .0444 .680 NS
Lightings 4.6556 4.7 -.0444 -.824 NS
Signage 4.6556 4.7167 -.0611 -1.044 NS
Hygiene / Cleanliness 4.8111 4.8389 -.0278 -.713 NS
Tools/Displays maintained properly 4.6278 4.5056 .1222 1.929 NS
Layout of the store is convenient for
4.5944 4.4778 .1167 1.923 NS
shopping
Promotional pricing
Reasonable when compared to competitors 4.5667 4.3722 .1944 2.758**
Stimulates the impulse of customers 4.6778 4.1278 .5500 7.006**
Seasonal offers are more 4.7 4.6722 .0278 .454 NS
Communication
Promotions provides all information about
4.5722 4.5778 -.0056 -.075 NS
products, price and usage
Promotions are communicated at the
4.5444 4.5611 -.0167 -.237 NS
footstep of customer enter into the store
Provide timely information reach 4.7444 4.7167 .0278 .482 NS
Pre-offer communication is adequate 4.7 4.6278 .0722 1.247 NS
Customer service
CSA* give detailed information on the offer 4.75 4.8 -.0500 -.886 NS
Cashier provide info at point of purchase 4.7111 4.4222 .2889 3.658**
Display at POS* is influence on buying decision 4.7778 4.7611 .0167 .279 NS
Cross & Up selling attempts always 4.2611 4.1222 .1389 2.053**
Note: **5 per cent level of significance, NS- non significant, CSA* – Customer Service
Assistance, POS* – Point of Sale.