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The Impact of Marketing Mix on Customer Satisfaction: A Case Study Deriving

Consensus Rankings from Benchmarking

Thesis · January 2007

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 THE IMPACT OF MARKETING MIX ON CUSTOMER SATISFACTION:
A CASE STUDY DERIVING CONSENSUS RANKINGS
FROM BENCHMARKING

AMY POH AI LING

DISSERTATION SUBMITTED IN PARTIAL FULFILMENT FOR THE DEGREE OF

MASTER OF SCIENCE (QUALITY AND PRODUCTIVITY
IMPROVEMENT)

FACULTY OF SCIENCE AND TECHNOLOGY

NATIONAL UNIVERSITY OF MALAYSIA
BANGI

2007
 ii

DECLARATION

I hereby declare that the work in this dissertation is my own except for quotations and
summaries which have been duly acknowledged.

16 April 2006 AMY POH AI LING

P 37435
 iii

ACKNOWLEDGEMENT

I am deeply indebted to my supervisor Dr. Mohamad Nasir Saludin, for his constant
support and assistance for the duration of my thesis. He has been a continual font of ideas,
stimulating suggestions and encouragement helped me in all the time of research for and
writing of this thesis. I have learnt a lot about all aspects of working both as part of a
research team and as part of the wider research community. It is valuable to have
someone close to the research activities as well as senior to the area.

I want to thank our Program Coordinator, Prof. Madya Dr. Ahmad Mahir Razali for
giving me permission to commence this thesis in the first instance and to do the necessary
research work. I want to thank for his help, support, interest and valuable hints.

Thanks to the lecturers in my courses that helped me in my studies and generously gave
me idea to carry on in this project.

To my research assistants, Chen Zhi Syin, Ivan Leong Jenn Jiang, Tan Ai Lee and Wong
Xiao Wei, they have also made invaluable contributions to this thesis. I spent months
working with them for my own good, and the result is that much of this work (Chapters 2,
3 and 4) was done in conjunction with them.

Last but not least, I would like to express my gratitude to all those who gave me the
possibility to complete this thesis.

AMY POH AI LING

P 37435
 iv

THE IMPACT OF MARKETING MIX ON CUSTOMER SATISFACTION:

A CASE STUDY DERIVING CONSENSUS RANKINGS
FROM BENCHMARKING

ABSTRACT

This paper takes a cautionary stance to the impact of marketing mix on customer
satisfaction, via a case study deriving consensus rankings from benchmarking on retail
stores in Malaysia. Field research was conducted in Tesco Stores (Malaysia) Sdn Bhd,
Carrefour of Magnificent Diagraph Sdn. Bhd., Giant of Dairy Farm International, and the
homegrown retail store, Mydin Mohamed Holdings Berhad. With increasing
globalization, local retailers find themselves having to compete with large foreign players
by targeting niche markets. We build a model in deriving consensus rankings from
benchmarking base on the marketing mix model, the traditional marketing paradigm,
embodied in the well-known Marketing Mix frame work proposed by Borden and
popularized as the 4Ps (Product, Price, Place, Promotion) by McCarthy. The marketing
mix is the lens through which the contemporary customer perceives value in retail stores
on 4Ps is examined. From the model, we analyze what is the best practice among the four
elements derived from a consensus ranking, a ranking method to identify the best in
class. The analysis will mainly depend on the outcome of what customer perceive
towards the four marketing tactics. This paper discusses the introduction and use of a
methodology for project ranking in Retail store and, in particular, illustrates the use of a
particular solution method called ELECTRE. A goal of this research was to introduce a
more objective methodology for the multicriteria outranking methodology as an
alternative and more sustainable approach for benchmarking analysis in marketing sector.

Keywords: Marketing mix, Customer satisfaction, Retailing, Benchmarking, Multi-

criteria decision-making, ELECTRE methods
 v

CONTENT

Page
DECLARATION ii
ACKNOWLEDGEMENTS iii
ABSTRACT iv
CONTENTS v
FIGURE LIST x
ILLUSTRATION LIST xi
TABLE LIST xii

CHAPTER 1 INTRODUCTION 1
1.1 Research Description 1
1.2 Problem Statement 3
1.3 Background 5
1.3.1 Quantitative Marketing Research 5
1.4 Objectives of the Study 6
1.5 The Strength and Significance of the Study 7
1.6 Rationale of the Study 9
1.7 Specification of the Information Needed 10
1.8 Definition of Terms 11
1.8.1 Marketing Mix 11
1.8.2 Customer Satisfaction 11
1.8.3 Retailing 12
1.8.4 Benchmarking 12
1.8.5 Multi-criteria Decision Making 12
1.8.6 ELETRE method 13
1.9 Conclusion 13
 vi

CHAPTER II LITERATURE REVIEW 14

2.1 Introduction 14
2.2 Marketing mix 15
2.2.1 Definition 16
2.2.2 Product Decisions 16
2.2.3 Price Decisions 16
2.2.4 Place (Distribution) Decisions 17
2.2.5 Promotion Decisions 17
2.2.6 Criticism on Marketing Mix Model 17
2.2.7 Limitations of the Marketing Mix Framework 19
2.3 Customer satisfaction 20
2.3.1 Measuring Customer Satisfaction 20
2.4 Benchmarking 22
2.4.1 Advantages of benchmarking 22
2.4.2 Competitive benchmarking 22
2.4.3 Advantage of the Benchmarking 23
2.4.4 Types of Benchmarking 24
2.5 Multi-Criteria Decision Models 28
2.6 Multi-Criteria Outranking Methodology - ELECTRE I 29
2.7 Retailing 31
2.7.1 Retail in Malaysia 31
2.7.2 Four types of retailers 33
2.7.3 Retail Activity in Malaysia: 34
From Shop house to Hypermarket
2.7.4 Hypermarkets in Malaysia see strong growth 34
2.8 Retail Stores Profile 35
2.8.1 Tesco Stores (Malaysia) Sdn Bhd. 35
2.8.2 Carrefour - Magnificent Diagraph Sdn.Bhd. 37
2.8.3 Giant - Dairy Farm International (DFI) 38
2.8.4 Mydin Mohamed Holdings Berhad 39
2.9 Conclusion 39
 vii

CHAPTER III RESEARCH METHODOLOGY 40

3.1 Introduction 40
3.2 Recognisance Survey 40
3.3 Questionnaire Construction 42
3.4 Test-Retest Reliability Checks 43
3.4.1 Cronbach's α (alpha) 44
3.4.2 Pre-Test 45
3.4.2.1 Reliability Statistics for Tesco 45
3.4.2.2 Reliability Statistics for Mydin 45
3.4.2.3 Reliability Statistics for Carrefour 45
3.4.2.4 Reliability Statistics for Giant 46
3.4.3 Overall Reliability Statistics 46

3.5 Sampling Methods and Sample Size 47

3.5.1 Simple Random Sampling 48
3.5.2 Determine Sample Size 49
– Statistical Sampling Concepts
3.5.3 Assumptions for Simple Random Sampling 50
3.6 Data Collection 51
3.7 Illustration of Research Framework 52
3.8 Conclusion 55
 viii

CHAPTER IV DATA ANALYSIS, INTERPRETATION 56

AND DISCUSSION
4.1 Introduction 57
4.2 Consensus Rankings from Benchmarking 59
4.3 Profile of Respondents 60
4.4 Descriptive Statistics 62
4.4.1 Marketing Mix Factor 63
4.4.1.1 Product Factor 63
4.4.1.2 Price Factor 64
4.4.1.3 Place/Distribution Factor 65
4.4.1.4 Promotion Factor 66
4.4.2 Marketing Mix Model, 4Ps 67
4.4.3 Motivating Factor 68
4.4.4 Cross tabulation Analysis 69
4.4.5 Descriptive Statistics Analysis of four retail stores 72
4.4.5.1 Tesco 72
4.4.5.2 Mydin 73
4.4.5.3 Carrefour 74
4.4.5.4 Giant 75
4.5 Benchmarking and Outranking-Satisfying Methodology 76
4.6 Benchmarking on Customer Satisfaction 83
4.6.1 Product Benchmarking 83
4.6.2 Price Benchmarking 84
4.6.3 Promotion Benchmarking 85
4.6.4 Place/Distribution Benchmarking 86
4.7 Conclusion 87
 ix

CHAPTER V SUMMARY, CONCLUSION AND IMPLICATION 88

5.1 SWOT Analysis 88
5.1.1 Strength 88
5.1.2 Weakness 89
5.1.3 Opportunity 89
5.1.4 Threat 90
5.2 Conclusion 90
5.3 Directions for further research 91
5.4 Scope and Limitation of the Study 76

EXTENDED ABSTRACT - Technical Paper 92

REFERENCES 108

APPENDIX A. Authorization Letter for the Research 114

1. Tesco 115
2. Carrefour 117
3. Giant 119
4. Mydin 121
B. Letter Request of Contribution 123
1. Letter Request of Contribution - Tesco 124
2. Letter Request of Contribution - Carrefour 125
3. Letter Request of Contribution – Giant 126
4. Letter Request of Contribution – Mydin 137
C. Questionnaires 128
1. Questionnaires - Tesco 129
2. Questionnaires - Carrefour 131
3. Questionnaires - Giant 133
4. Questionnaires - Mydin 135
D. Major Retail Players in Malaysia 137
E. Classification of MCDM Method 138
 x

FIGURE LIST

Figure No. Page

Figure 2.1 The Marketing Mix Model 15
Figure 4.1 Graph of S from Table 4.27 (C* ≥ 75 percent) 82
 xi

ILLUSTRATION LIST

Illustration No. Page

Illustration 3.1 Selangor's Geographical Position 41
Illustration 3.2 Attribute – 4P’s – Retail Stores Mapping 52
Illustration 4.1 Graph of S from Table 4.27 (C* ≥ 75 percent) 82
 xii

TABLE LIST

Table No. Page

Table 2.1 Types of Benchmarking 24
Table 2.2 Gross Domestic Product by Industry of Origin, 32
Malaysia 2000-2005
Table 3.1 Reliability Statistics – Tesco 45
Table 3.2 Reliability Statistics – Mydin 45
Table 3.3 Reliability Statistics – Carrefour 45
Table 3.4 Reliability Statistics – Giant 46
Table 3.5 Overall Reliability Statistics 46
Table 3.6 Level of Confidence 49
Table 4.1 Profile of Respondents – Gender 60
Table 4.2 Profile of Respondents – Ethnic 60
Table 4.3 Profile of Respondents – Marital Status 60
Table 4.4 Profile of Respondents – Age 61
Table 4.5 Profile of Respondents – Shopping Frequency 61
Table 4.6 Descriptive Statistics of Product Factor 63
Table 4.7 Descriptive Statistics of Price Factor 64
Table 4.8 Descriptive Statistics of Place/Distribution Factor 65
Table 4.9 Descriptive Statistics of Promotion Factor 66
Table 4.10 Descriptive Statistics of Marketing Mix Model, 4Ps 67
Table 4.11 Motivating Factor 68
Table 4.12 Motivating Factor * Gender Cross tabulation 69
Table 4.13 Motivating Factor * Ethnic Cross tabulation 69
Table 4.14 Motivating Factor * Marital Status Cross tabulation 70
Table 4.15 Motivating Factor * Age Cross tabulation 70
Table 4.16 Motivating Factor * Shopping Frequency Cross tabulation 71
Table 4.17 Descriptive Statistics for Tesco 72
Table 4.18 Descriptive Statistics for Mydin 73
Table 4.19 Descriptive Statistics for Carrefour 74
 xiii

Table 4.20 Descriptive Statistics for Giant 75

Table 4.21 Multicriteria matrix (Electre I) 76
Table 4.22 Retail stores Positioning Table 76
Table 4.23 Retail Stores’ Ranking Table 77
Table 4.24 Multicriteria Matrix 78
Table 4.25 Matrix of Concordance Ssubsystems (Jc) 78
Table 4.26 Concordance Matrix 79
Table 4.27 Outcomes of Concordance Test 80
Table 4.28 Product Benchmarking towards customer satisfaction 83
Table 4.29 Price Benchmarking towards customer satisfaction 84
Table 4.30 Promotion Benchmarking towards customer satisfaction 85
Table 4.31 Place/Distribution Benchmarking towards 86
customer satisfaction
 1

CHAPTER 1

INTRODUCTION

1.1 RESEARCH DESCRIPTION

To excel and flaunt as a market leader in an ultramodern era and a globalize world where
we barely can catch up with the changes, the organizations must strive not only to
improve but also to commit into a continuous improvement climate, to harvest from its
marketing strategies especially marketing mix model, benchmarking and company
quality policy. Malaysia retail industry has been showing upward trends for quite some
time. Growth in this sector is particularly spurring by the changing buying patterns of
consumers and rising per capita income in the country.

This paper takes a cautionary stance to the impact of marketing mix on customer
satisfaction, via a case study deriving consensus rankings from benchmarking on
multinational retail stores in Malaysia. Field research will be conduct in Tesco Stores
(Malaysia) Sdn Bhd, Carrefour of Magnificent Diagraph Sdn. Bhd., Giant of Dairy Farm
International, and the homegrown retail store, Mydin Mohamed Holdings Berhad. With
increasing globalization, local retailers find themselves having to compete with large
foreign players by targeting niche markets.

This study continues to research the program component aspect by examining all four
facets of the marketing mix, described here as product features, brand name, retail outlets,
basic advertising message and retail pricing of a single consumer product.
 2

Ranking and selecting projects is a relatively common, yet often difficult task. It is
complicated because there is usually more than one dimension for measuring the impact
of each project and more than one decision maker. This paper considers a real application
of project selection for the marketing mix element, using an approach called ELECTRE.

The ELECTRE method has several unique features not found in other solution methods;
these are the concepts of outranking and indifference and preference thresholds. The
ELECTRE method is explained and applied to the project selection problem using SPSS
(Statistical Package for the Social Sciences) application. Results show that ELECTRE
was well received by the decision makers and, importantly, provided sensible and
straightforward rankings.

Our contribution is to show the potential in Marketing mix model in deriving a consensus
ranking in benchmarking. According to the feedback from the respondents, we
dynamically rank out the best element to be benchmark.
 3

1.2 PROBLEM STATEMENT

The decision problem faced by management has been translated into our market research
problem in the form of questions that define the information that is required to make the
decision and how this information obtained. Thus, in this paper, the decision problem
regarding the marketing mix four Ps is translated into a research problem. The
corresponding research problem is to assess whether the market would accept the
consensus rankings derive from benchmarking result from the impact of marketing mix
on customer satisfaction using a multi-criteria decision making outranking methodology.

The project ranking problem is, like many decision problems, challenging for at least two
reasons. First, there is no single criterion in marketing mix model which adequately
captures the effect or impact of each element; in other words, it is a multiple criteria
problem. Second, there is no single decision maker; instead the project ranking requires a
consensus from a group of decision makers. (Henig and Buchanan and Buchanan et al.)

Henig and Buchanan and Buchanan et al. have argued that good decisions come from
good decision process and suggest that where possible the subjective and objective parts
of the decision process should be separated. This separation enables the decision making
process to move away from being unnecessarily subjective and toward a more objective
orientation. A decision problem can be conceived as comprising two components; a set of
objectively defined alternatives and a set of subjectively defined criteria. The relationship
between the alternatives and the criteria is described using attributes, which are the
objective and measurable features of alternatives, attributes form the bridge between the
alternatives and the criteria. In Illustration 3.1 the alternative-attribute-criteria mappings
are illustrated.

Outranking relations, in most methods, are built using a concordance-discordance

principle. More complexity and flexibility are required in the processing of efficient
alternatives. And it is the solutions, not the criteria, which the marketing management is
interested in.
 4

Although it is not clearly stated in Simon (1977), we think that one of the main functions
of review is learning and we believe that the best support that could be provided to
organizations would be for learning. In many cases, we have observed that decision is
treated as a one shot game whereas most decisions are more or less repetitive. Human
memory has some known biases and, for that reason, cannot accurately analysis decisions
ex post.

However, very little seems to have been done in this domain up to now. There are many
possibilities related to learning, review and ex post analysis. First, in some sense, a
decision maker can learn the effect of the assignment he has given to the weights.
Similarly, in outranking methods, the decision maker can learn to modify concordance
and discordance factors (Roy and Skalka, 1985; Vetschera, 1986).

Most of the failures arise because one does not take into account that a decision maker
makes a decision according to a set of items (e.g., his preferences) that does not intervene
explicitly in the decision making process itself but constrains it. This is what we call
contextual knowledge.

Let us also remind that, in the framework of decision making, due to the prominent look-
ahead component (Pomerol, 1995), the subjective and contextual data play an important
role. Moreover, due to the incompleteness of the model, especially during the evaluation
phases (Lévine and Pomerol, 1995), among the elements facilitating the cooperation are
explanations and contextual knowledge, and the need to make them explicit and shared
both by the system and the user (Brezillon and Abu-Hakima, 1995) and Brézillon (1996).
 5

1.3 BACKGROUND

For the multinational corporation (MNC), the pursuit of a global marketing strategy
encompassing a standardized marketing mix (M. Mix) strategy retains the promise of
greater opportunities in the borderless marketplace (Dunning, 1993; Kustin, 1993; Roth,
1995). These strategies also offer the opportunity to develop higher quality products by
obtaining greater efficiencies of production, through lower costs associated with
economies of scale (Levitt, 1983), outsourcing (Kotabe, 1990; Keegan & Green, 2003),
developing priority locations for manufacturing (Dunning, 1998), distribution
(Rosenbloom, Larsen, & Metha, 1997) and economies of scope (Yip, 1989).

Groonroos argues that the 4Ps framework has won an overwhelming acceptance among
marketing practitioners, noticing that ‘‘. . . Marketing in practice has, to a large extent,
been turned into managing this toolbox . . . ’’, a point shared by Goldsmith who argues
that the ‘‘. . . time-honored concept of the 4Ps—the Marketing Mix . . . ’’ is the heart of
the contemporary marketing management.

1.3.1 Quantitative Marketing Research

It is the application of quantitative research techniques to the field of marketing. It has

roots in both the positivist view of the world, and the modern marketing viewpoint that
marketing is an interactive process in which both the buyer and seller reach a satisfying
agreement on the "four P's" of marketing: Product, Price, Place (location) and Promotion.
As a social research method, it typically involves the construction of questionnaires and
scales. People who respond (respondents) are asked to complete the survey. Marketers
use the information so obtained to understand the needs of individuals in the marketplace,
and to create strategies and marketing plans.
 6

1.4 OBJECTIVES OF THE STUDY

The objectives of this research are defined clearly to ensure that the true decision problem
is address. This research has two main objectives:

1. To build an analytical connection between the customers satisfaction with the

international marketing mix model, the four Ps and benchmarking.
A. To determine products and services that meets the needs of customers.
B. To observe value of price the intended customers willing to pay.
C. To determine distribution channels the potential customer desire.
D. To analyze impact of the business's promotion have on customers.
E. To set a benchmark base on the marketing mix four Ps.

2. To create perceive value and generate a positive response.

 7

1.5 THE STRENGTH AND SIGNIFICANCE OF THE STUDY

Retailers need to generate a pool of information in order to introduce products and

services that create value in the mind of customer. The value of what the customer
perceived is a subjective one, the attributes that create value can not simply be deducted
from common knowledge. Rather, data must be collected and analyzed. The purpose of
this marketing research is to provide the facts and direction that managers need to make
their more important marketing decision.

The strength of this research lies on its specific focus on the connection between the
customers satisfaction with the international marketing mix model, the four Ps and
benchmarking. This research also underlines the impact of customer buying behavior
base on the company quality policy.

A survey of small business managers in Texas revealed that 84 percent of those who
conducted formal marketing research projects in the past three years felt that the
information obtained was worth the money spent. Overall, 58 percent said that they were
able to incorporate the research findings into their decision-making process. Only six
percent reported that they were not able to implement the results. Consequently, when
small businesses do engage in marketing research the benefits usually exceed the costs.

This research enable the retail stores to gain insight into future industry trends that will
affect its business, get data and analysis in the most cost-effective and flexible way and
draw on essential information without being overwhelmed by unnecessary detail.
 8

It is anticipated that the findings of this research will harvest benefits as follow:

1. Elucidate a clear picture on the connection between the customers satisfaction

with the international marketing mix model, the four Ps.
2. The four Ps are the parameters that the marketing manager can control, subject to
the internal and external constraints of the marketing environment.
3. Manifest a clear picture on the connection between the customers satisfaction
with its company benchmarking strategy.
4. Develop the awareness on the impact of customer buying behavior base on the
company quality policy.
5. Gain insight into future industry trends that will affect its business.
6. Get data and analysis in the most cost-effective and flexible way and draw on
essential information without being overwhelmed by unnecessary detail.
7. Understand the customer.
8. Make value for customer.
9. Communicate the retail value to target market.
10. Help managers to look outside of themselves for solutions.
11. Contribute to the marketing theory (The marketing mix model, 4Ps).
12. Adding literature review to the marketing area.
13. Benefit to the retail stores participated (Tesco, Mydin, Carrefour and Giant).
 9

1.6 RATIONALE OF THE STUDY

The Ministry of Finance expects the retail and wholesale sub-sector in Malaysia to
growth by 8% from 6.3% recorded for the first half of the year 2006. In concord with
this, the Malaysia’s GDP registered stronger-than-expected growth since 2003. A notable
development has been the changing nature of FDI flows.

Malaysia’s consumer lifestyle has been evolving and changing due in part to rising
affluence and education levels. High profile international retailers and the global mass
media have also played a hand in shaping consumer-buying behavior. Malaysians are
becoming more westernized, sophisticated, and cosmopolitan. Since the emergence of the
foreign-owned hypermarkets, Malaysians who live in urban areas have become
accustomed to shopping for groceries at hypermarkets and supermarkets. The Malaysian
retail scene is gearing up for intense competition with more new players and expansion
plans undertaken by foreign players.

As consumers become more cautious with their spending, retailers have had to become
extremely price-competitive. The ongoing price war among major retailers continues to
have an adverse effect on the small retailers, who may not be able to compete at lower
prices. Company has become more aware of their marketing strategy and started
benchmarking to measures and compares all its functions, systems and practices against
strong competitors, identifying quality gaps in the organization, and striving to achieve
competitive advantage locally and globally. However, it is note that the intense
competition posed by foreign players will provide additional impetus for local retailers to
leverage on retail technology to better understand consumer purchasing behavior,
streamline operational procedures and to enhance efficiency.
 10

1.7 SPECIFICATION OF THE INFORMATION NEEDED

The research identified the following factors as part of the choice criteria:

Literature reviews from journal on the best practice for ranking in benchmarking were
done. Further study has to be made on the ranking methodology to determine the best
methodology to apply in this research project.

Findings to gain a better understanding on the four selected retail stores: Tesco Stores
(Malaysia) Sdn Bhd, Carrefour of Magnificent Diagraph Sdn. Bhd., Giant of Dairy Farm
International, and the homegrown retail store, Mydin Mohamed Holdings Berhad.

Determine the element of four Ps to be evaluate such as marketing mix criteria, quality of
merchandise, variety and assortment of merchandise, service of store personnel, prices,
convenience of location, layout of store, credit and billing policy, retail store internal
benchmarking, customer satisfaction, company quality policy and customer buying
behavior.
 11

1.8 DEFINITION OF TERMS

1.8.1 Marketing Mix

The marketing mix is a model of creating and implementing marketing strategies. It

stresses the blending of various factors in such a way that both organizational and
consumer objectives are attained. The elements are the marketing tactics, also known as
the 'four Ps', the marketing mix elements are price, place, product, and promotion. When
blending the mix elements, marketers must consider their target market. They must
understand the wants and needs of the market customer then use these mix elements in
constructing and formulating appropriate marketing strategies and plans that will satisfy
these wants. These four P's are the parameters that the marketing manager can control,
subject to the internal and external constraints of the marketing environment. The goal is
to make decisions that center the four P's on the customers in the target market in order to
create perceived value and generate a positive response.

1.8.2 Customer Satisfaction

Customer satisfaction is a perception. It is also a question of degree. Providing quality

products and services is all about meeting customer requirements. Customer satisfaction,
a business term, is a measure of how products and services supplied by a company meet
or surpass customer expectation. It is seen as a key performance indicator within business
and is part of the four perspectives of a Balanced Scorecard. In a competitive marketplace
where businesses compete for customers, customer satisfaction is seen as a key
differentiator and increasingly has become a key element of business strategy. The four
key steps for successful marketing are identified as understanding the customer, making
value for customer, communicating the value to target market, and making it easy for the
customer to buy.
 12

1.8.3 Retailing

Retailing refers to all activities directly related to the selling of small quantities of goods
and services, at a profit, to the ultimate customers for personal consumption and non-
business use (Mohd-Said, 1990). Retail trading encompasses a wide variety of goods and
services, ranging from household items to food and accessories. Guy (1980) for instance
has categorized retail trade into three groups: (a) convenience goods which include
groceries and daily provisions; (b) shopping or comparison goods which refer to
relatively more expensive items bought at less regular intervals; and (c) specialty goods
which are unique items that appeal to customers of the higher income level.

1.8.4 Benchmarking

Benchmarking, also known as "best practice benchmarking" or "process benchmarking"

is a process used in management and particularly strategic management, in which
organizations evaluate various aspects of their processes in relation to best practice,
usually within own sector. This then allows organizations to develop plans on how to
adopt such best practice, usually with the aim of increasing some aspect of performance.
Benchmarking may be a one-off event, but is often treated as a continuous process in
which organizations continually seek to challenge their practices.

1.8.5 Multi-criteria Decision Making

The choice of destination in relocation benchmark for marketing element for retailing
management strategy, either price, product, place/distribution and promotion, can be
performed using multiple criteria decision model (MCDM). Multiple Criteria Decision
Model attempt to identify all alternatives and to quantify characteristics of these
alternatives—attributes—in order to rank them in some consistent manner. MCDM can
be divided into those that allow tradeoffs between attribute levels (“compensatory
decision rules”) and those that do not, and those that explicitly incorporate risk, or
uncertainty, and those that do not.
 13

1.8.6 ELETRE method

The simplest method of the ELECTRE family is ELECTRE I. The ELECTRE

methodology is based on the concordance and discordance indices defined as follows.
The ELECTRE I method is used to construct a partial ranking and choose a set of
promising alternatives. ELECTRE II is used for ranking the alternatives. In ELECTRE III
an outranking degree is established, representing an outranking creditability between two
alternatives which makes this method more sophisticated and, of course, more
complicated and difficult to interpret. In order to track the consensus ranking, the project
itself has been broken into a number of four phases, the respondents collection was done
in four different retail stores.

1.9 CONCLUSION

The information generated for this survey is use to adjust practices within the
organization to continuously improve the retail stores’ products, pricing strategy,
promotion strategy, place and distribution strategy, services, and processes base on the
marketing mix model in order to more completely satisfy its customers. Literature
reviews from journal on the best practice for ranking in benchmarking were done. Further
study has to be made on the ranking methodology to determine the best methodology to
apply in this research project.
 14

CHAPTER II

LITERATURE REVIEW

2.1 INTRODUCTION

Knowledge is cumulative: every piece of research will contribute another piece to it. That
is why it is important to commence all research with a review of the related literature or
research, and to determine whether any data sources exist already that can be brought to
bear on the problem at hand. This is also referred to as secondary research. Just as each
study relies on earlier work; it will provide a basis for future work by other researchers.

This stage involves a literature review on the status study of the international marketing
mix model, customers satisfaction and the benchmarking methods. This stage also covers
the background and recent reports of the selected retail stores to be survey such as Tesco
Stores (Malaysia) Sdn Bhd, Carrefour of Magnificent Diagraph Sdn. Bhd., Giant of Dairy
Farm International, and the homegrown retail store, Mydin Mohamed Holdings Berhad.

According to the 2005 Global Retail Development Index TM, Malaysia’s GDP growth
has recovered from the 2001 economic slowdown and stands at 6 percent. Its retail
market remains fragmented, which helped boost it up one notch to the 18th position.
Retail sales have grown up from 6 to 8 percent over the past two years and are expected
to maintain the same rate. Although Malaysian consumers have embraced hypermarkets
and department stores, discount retailers and convenience stores will likely become new
vehicles for growth.
 15

2.2 MARKETING MIX

The term "marketing mix" became popularized after Neil H. Borden published his 1964
article, The Concept of the Marketing Mix. Borden began using the term in his teaching
in the late 1940's after James Culliton had described the marketing manager as a "mixer
of ingredients". The ingredients in Borden's marketing mix included product planning,
pricing, branding, distribution channels, personal selling, advertising, promotions,
packaging, display, servicing, physical handling, and fact finding and analysis. E. Jerome
McCarthy later grouped these ingredients into the four categories that today are known as
the 4 P's of marketing.

The marketing mix is a model of creating and implementing marketing strategies. It

stresses the blending of various factors in such a way that both organizational and
consumer objectives are attained. The elements are the marketing tactics, also known as
the 'four Ps', the marketing mix elements are price, place, product, and promotion. The
model was developed by Neil Borden (Borden, N. 1964) who first started using the
phrase in 1949. When blending the mix elements, marketers must consider their target
market. They must understand the wants and needs of the market customer then use these
mix elements in constructing and formulating appropriate marketing strategies and plans
that will satisfy these wants.

Figure 2.1 The Marketing Mix Model

 16

2.2.1 Definition

These four P's are the parameters that the marketing manager can control, subject to the
internal and external constraints of the marketing environment. The goal is to make
decisions that center the four P's on the customers in the target market in order to create
perceived value and generate a positive response.

As Pedhazur and Schmelkin (1991, p. 164) have noted,

“Even for people who speak the same language, words have different meanings,
depending on, among other things, who speaks, to whom, in what context, at what time,
and with what purpose . . . . The point is that the different terms reflect different outlooks,
values, attitudes, and the like.”

2.2.2 Product Decisions

The term "product" refers to tangible, physical products as well as services. Although this
typically refers to a physical product, it has been expanded to include services offered by
a service organization. The specification of the product is one of the variables that a
marketer has at his/her control. For example, the product can include certain colors,
certain scents, and certain features. Lastly, in the broadest sense when a consumer
purchases a product it also includes the post-sales relationship with the company. The
post-sales relationship can include customer service and any warranty.

2.2.3 Price Decisions

The price is the amount paid for a product. In some cases, especially in business-to-
business marketing this can also include the total cost of ownership (TCO). Total cost of
ownership may include costs such as installation and other products required to deliver a
complete functional solution.
 17

2.2.4 Place (Distribution) Decisions

Place represents the location where a product can be purchased. It is often referred to as
the distribution channel. It can include any physical store as well as virtual stores on the
Internet. Distribution is about getting the products to the customer.

2.2.5 Promotion Decisions

In the context of the marketing mix, promotion represents the various aspects of
marketing communication, that is, the communication of information about the product
with the goal of generating a positive customer response. Promotion represents all of the
communications that a marketer may insert into the marketplace. This can include TV,
radio, and print advertising, as well as coupons, direct mail, billboards, and online
advertising. One of the less well-defined areas in promotion is the role of a human sales
force. On the other hand, consumers may rather purchase the product only when sold
through the support of a known salesperson. In this case, the service, perceived or real
can be defined as a feature of the product.

2.2.6 Criticism on Marketing Mix Model

Peter Doyle (Doyle, 2000) claims that the marketing mix approach leads to unprofitable
decisions because it is not grounded in financial objectives such as increasing shareholder
value. According to Doyle it has never been clear what criteria to use in determining an
optimum marketing mix. Objectives such as providing solutions for customers at low cost
have not generated adequate profit margins. Doyle claims that developing marketing
based objectives while ignoring profitability has resulted in the dot-com crash and the
Japanese economic collapse. He also claims that pursuing a ROI approach while ignoring
marketing objectives is just as problematic. He argues that a net present value approach
maximizing shareholder value provides a "rational framework" for managing the
marketing mix.
 18

Against Kotler's four P's, some claim that they are too strongly oriented towards
consumer markets and do not offer an appropriate model for industrial product
marketing. Others claim it has too strong of a product market perspective and is not
appropriate for the marketing of services.

Since 1960, the model has broadened beyond its origins in economic theory to encompass
aspects of sociology and cognitive psychology (Hakansson and Waluszewski, 2005).
Indeed, criticism of the 4Ps has centered on its inception in the production and supply
context of the 1950s, and its appropriateness to later twentieth century marketing
functions. Consequently, it has been extended with a further 3Ps of participants, process
and physical evidence (Booms and Bitner, 1981), and an eighth P for personalisation, to
reflect a services marketing orientation (Goldsmith, 1999). The growing importance of
the political environment led Kotler (1984) to propose two additional Ps of political
power and PR to the marketing mix.

As marketing’s focus has moved to consumers and consumption, it has arguably

broadened into an integrated and networked approach to organisational resources
(Brownlie and Saren, 1992). This has accompanied the decline of mass markets and
growth of specialisation, supported by database management and customer relationship
marketing principles, which evolved into the one-to-one marketing opportunities
developed on the internet.

In spite of its deficiencies, the 4Ps remain a staple of the marketing mix. The subsequent
Ps has yet to overcome a consensus about their eligibility and agreement over their
practical application.
 19

2.2.7 Limitations of the Marketing Mix Framework

The marketing mix framework was particularly useful in the early days of the marketing
concept when physical products represented a larger portion of the economy. Today, with
marketing more integrated into organizations and with a wider variety of products and
markets, some authors have attempted to extend its usefulness by proposing a fifth P,
such as packaging, people, process, etc.

Today however, the marketing mix most commonly remains based on the 4 P's. Despite
its limitations and perhaps because of its simplicity, the use of this framework remains
strong and many marketing textbooks have been organized around it.
 20

2.3 CUSTOMER SATISFACTION

Customer satisfaction is a perception. It is also a question of degree. Providing quality

products and services is all about meeting customer requirements. Customer satisfaction,
a business term, is a measure of how products and services supplied by a company meet
or surpass customer expectation. It is seen as a key performance indicator within business
and is part of the four perspectives of a Balanced Scorecard.

In a competitive marketplace where businesses compete for customers, customer

satisfaction is seen as a key differentiator and increasingly has become a key element of
business strategy. The four key steps for successful marketing are identified as
understanding the customer, making value for customer, communicating the value to
target market, and making it easy for the customer to buy.

2.3.2 Measuring Customer Satisfaction

Organizations are increasingly interested in retaining existing customers while targeting

non-customers; measuring customer satisfaction provides an indication of how successful
the organization is at providing products and/or services to the marketplace.

Customer satisfaction is an ambiguous and abstract concept and the actual manifestation
of the state of satisfaction will vary from person to person and product/service to
product/service. The state of satisfaction depends on a number of both psychological and
physical variables which correlate with satisfaction behaviors such as return and
recommend rate. The level of satisfaction can also vary depending on other options the
customer may have and other products against which the customer can compare the
organization's products.

Because satisfaction is basically a psychological state, care should be taken in the effort
of quantitative measurement, although a large quantity of research in this area has
recently been developed.
 21

Work done by Berry, Brodeur between 1990 and 1998 defined ten 'Quality Values' which
influence satisfaction behavior, further expanded by Berry in 2002 and known as the ten
domains of satisfaction. These ten domains of satisfaction include: Quality, Value,
Timeliness, Efficiency, Ease of Access, Environment, Inter-departmental Teamwork,
Front line Service Behaviors, Commitment to the Customer and Innovation. These
factors are emphasized for continuous improvement and organizational change
measurement and are most often utilized to develop the architecture for satisfaction
measurement as an integrated model.

Work done by Parasuraman, Zeithaml and Berry between 1985 and 1988 provides the
basis for the measurement of customer satisfaction with a service by using the gap
between the customer's expectation of performance and their perceived experience of
performance. This provides the measurer with a satisfaction "gap" which is objective and
quantitative in nature.

Work done by Cronin and Taylor propose the "confirmation/disconfirmation" theory of

combining the "gap" described by Parasuraman, Zeithaml and Berry as two different
measures (perception and expectation of performance) into a single measurement of
performance according to expectation. According to Garbrand, customer satisfaction
equals perception of performance divided by expectation of performance.

The usual measures of customer satisfaction involve a survey with a set of statements
using a Likert Technique or scale. In this paper, we use a 6 points Likert scale. The
customer is asked to evaluate each statement and in term of their perception and
expectation of the performance of the organization being measured.
 22

2.4 BENCHMARKING

Benchmarking, also known as "best practice benchmarking" or "process benchmarking"

is a process used in management and particularly strategic management, in which
organizations evaluate various aspects of their processes in relation to best practice,
usually within own sector. This then allows organizations to develop plans on how to
adopt such best practice, usually with the aim of increasing some aspect of performance.

Benchmarking may be a one-off event, but is often treated as a continuous process in

which organizations continually seek to challenge their practices.

2.4.1 Advantages of benchmarking

Benchmarking is a powerful management tool because it overcomes "paradigm

blindness." Paradigm Blindness can be summed up as the mode of thinking, "The way we
do it is the best because this is the way we've always done it." Benchmarking opens
organizations to new methods, ideas and tools to improve their effectiveness. It helps
crack through resistance to change by demonstrating other methods of solving problems
than the one currently employed, and demonstrating that they work, because they are
being used by others.

2.4.2 Competitive benchmarking

Some authors call benchmarking "best practices benchmarking" or "process

benchmarking". This is to distinguish it from what they call "competitive benchmarking".
Competitive benchmarking is used in competitor analysis. When researching your direct
competitors you also research the best company in the industry even if it serves a
different location.
 23

2.4.3 Advantage of the Benchmarking

1. A better understanding of the waits (expectations) of the customer because it is:

based on the reality of the market estimated in an objectivist way.
2. A better economic planning of the purposes and the objectives to achieve in the
company because they are: centered on what takes place outside controlled and
mastered.
3. A better increase of the productivity: resolution of the real problems
Understanding of the processes and what they produce.
4. Better current practices Search for the change many decisions practices of break.
5. A better competitiveness thanks to: a solid knowledge of the competition a strong
implication of the staff new ideas on practices and tried techniques.

Benchmarking has consequences which are beyond the process itself: it reforms all the
levels of the company; modifies the process of manufacture of the product leads(drives);
also reforms the hierarchical organization of the company, the product itself, and the state
of mind of the employees.
 24

2.4.4 Types of Benchmarking

There are a number of different types of benchmarking, as summarized below:

Table 2.1 Types of Benchmarking

Type Description Most Appropriate for
the Following Purposes
Strategic Where businesses need to improve overall Re-aligning business
Benchmarking performance by examining the long-term strategies that have
strategies and general approaches that become inappropriate.
have enabled high-performers to succeed.
It involves considering high level aspects
such as core competencies, developing
new products and services and improving
capabilities for dealing with changes in
the external environment. Changes
resulting from this type of benchmarking
may be difficult to implement and take a
long time to materialize.

Performance or Businesses consider their position in Assessing relative level

Competitive relation to performance characteristics of of performance in key
Benchmarking key products and services. Benchmarking areas or activities in
partners are drawn from the same sector. comparison with others
This type of analysis is often undertaken in the same sector and
through trade associations or third parties finding ways of closing
to protect confidentiality. gaps in performance.
 25

Continue…
Process Focuses on improving specific critical Achieving
Benchmarking processes and operations. Benchmarking improvements in key
partners are sought from best practice processes to obtain
organizations that perform similar work or quick benefits.
deliver similar services. Process
benchmarking invariably involves
producing process maps to facilitate
comparison and analysis. This type of
benchmarking often results in short term
benefits.

Functional Businesses look to benchmark with Improving activities or

Benchmarking partners drawn from different business services for which
sectors or areas of activity to find ways of counterparts do not
improving similar functions or work exist.
processes. This sort of benchmarking can
lead to innovation and dramatic
improvements.
 26

Continue…
Internal Involves benchmarking businesses or Several business units
Benchmarking operations from within the same within the same
organization (e.g. business units in organization exemplify
different countries). The main advantages good practice and
of internal benchmarking are that access management wants to
to sensitive data and information is easier; spread this expertise
standardized data is often readily quickly, throughout the
available; and, usually less time and organization.
resources are needed. There may be fewer
barriers to implementation as practices
may be relatively easy to transfer across
the same organization. However, real
innovation may be lacking and best in
class performance is more likely to be
found through external benchmarking.

External Involves analyzing outside organizations Where examples of good

Benchmarking that are known to be best in class. practices can be found in
External benchmarking provides other organizations and
opportunities of learning from those who there is a lack of good
are at the "leading edge". This type of practices within internal
benchmarking can take up significant time business units.
and resource to ensure the comparability
of data and information, the credibility of
the findings and the development of sound
recommendations.
 27

Continue…
International Best practitioners are identified and Where the aim is to
Benchmarking analyzed elsewhere in the world, perhaps achieve world class
because there are too few benchmarking status or simply because
partners within the same country to there are insufficient”
produce valid results. Globalization and national" businesses
advances in information technology are against which to
increasing opportunities for international benchmark.
projects. However, these can take more
time and resources to set up and
implement and the results may need
careful analysis due to national
differences.

Benchmarking is the concept of discovering what is the best performance being achieved,
whether in your company, by a competitor, or by an entirely different industry.
Benchmarking is a continuous process whereby an organization measures and compares
all its functions, systems and practices against strong competitors, identifying quality
gaps in the organization, and striving to achieve competitive advantage locally and
globally.

Another type of benchmarking is ranking method to identify the best in class that we
practiced in this project. This method shall be discussed in chapter IV.
 28

2.5 MULTI-CRITERIA DECISION MODELS

The choice of destination in relocation benchmark for marketing element for retailing
management strategy, either price, product, place/distribution and promotion, can be
performed using multiple criteria decision model (MCDM). Multiple Criteria Decision
Model attempt to identify all alternatives and to quantify characteristics of these
alternatives—attributes—in order to rank them in some consistent manner. MCDM can
be divided into those that allow tradeoffs between attribute levels “compensatory
decision rules” and those that do not, and those that explicitly incorporate risk, or
uncertainty, and those that do not.

For example, a simple ranking of alternatives in descending order by level of attributes

(“elimination by aspects”, Holsapple and Whinston 1996) addresses neither tradeoffs nor
risk. A standard method for addressing multi-criteria decision problems using
compensatory decision rules is via value functions (Winston 1994). If it can be shown
that the preferences of the decision maker satisfy a number of standard assumptions,
including transitivity, preferential independence, difference independence and tradeoff
independence, then we may define an additive value function to be applied to all
alternatives i and thus generate the ranking we seek. Each single-attribute value function
may be defined by discussions with the decision maker to translate attribute levels to a
uniform scale; weights can be assessed using the swing weighting method or by direct
tradeoffs.

Gardener and Armstrong-Wright (2000) have applied this method to employee selection
using a 0 to 3 scale value function and group attribute means for each weight. Multi-
attribute utility theory, a MCDM that explicitly models individual utility functions, a
generalization of value functions, using principles developed by von Neumann and
Morganstern over half a century ago (Winterfeldt and Edwards [1989]), addresses both
tradeoffs and risk.
 29

2.6 MULTICRITERIA OUTRANKING METHODOLOGY - ELECTRE I

The simplest method of the ELECTRE family is ELECTRE I. (Michael P. Johnson,

2002)

The ELECTRE methodology is based on the concordance and discordance indices

defined as follows. We start from the data of the decision matrix, and assume here that
the sum of the weights of all criteria equals to 1. For an ordered pair of alternatives
( A j , Ak ), the concordance index C jk
is the sum of all the weights for those criteria

where the performance score of A j

is least as high as that of Ak , i.e.

C jk
= ∑ Wi , j, k = 1, …, n, j ≠ k
a j ≥a k
i:

Clearly, the concordance index lies between 0 and 1. The computation of the discordance
index d jk
is a bit more complicated: d jk
=0 if a >a ij ik
, i =1,...,m, i.e. the discordance

index is zero if A j
performs better than A k
on all criteria,. Otherwise,

= max
a −a ik ij
, j, k = 1, …, n, j ≠ k
d jk i =1,..., m max a − min a ij ij
i =1,..., m i =1,..., m

I.e. for each criterion where A k

outperforms A j
, the ratio is calculated between the

difference in performance level between A k

and A j
the maximum difference in score

on the criterion concerned between any pair of alternatives. The maximum of these ratios
(which must lie between 0 and 1) is the discordance index.

A concordance threshold c* and discordance threshold d* are then defined such that
0<d*<c*<1. Then, A j
outranks A k
if the C jk
>c* and d jk
<d*, i.e. the concordance

index is above and the discordance index is below its threshold, respectively.
 30

This outranking defines a partial ranking on the set of alternatives. Consider the set of all
alternatives that outrank at least one other alternative and are themselves not outranked.
This set contains the promising alternatives for this decision problem. Interactively
changing the level thresholds, we also can change the size of this set.

The ELECTRE I method is used to construct a partial ranking and choose a set of
promising alternatives. ELECTRE II is used for ranking the alternatives. In ELECTRE III
an outranking degree is established, representing an outranking creditability between two
alternatives which makes this method more sophisticated (and, of course, more
complicated and difficult to interpret).

In order to track the consensus ranking, the project itself has been broken into a number
of four phases, the respondents collection was done in four different retail stores.

The details of each phase will be covered in more detail in the following sections, with
results included for those phases which are now complete.
 31

2.7 RETAILING

Retailing refers to all activities directly related to the selling of small quantities of goods
and services, at a profit, to the ultimate customers for personal consumption and non-
business use (Mohd-Said, 1990).

Retail trading encompasses a wide variety of goods and services, ranging from household
items to food and accessories. Literature has highlighted many attempts to classify the
retail trade. Guy (1980) for instance has categorized retail trade into three groups: (a)
convenience goods which include groceries and daily provisions; (b) shopping or
comparison goods which refer to relatively more expensive items bought at less regular
intervals; and (c) specialty goods which are unique items that appeal to customers of the
higher income level.

Other scholars (Ahmad et. al., 1996; Nik Yacob et. al., 1992; Cox, 1988) have divided
retail trade into small-scale and large-scale establishments. The small-scale retailers
include the single-propriety stores and non-store operators such as hawkers, peddlers and
market stalls. Whilst the large-scale retailers include superstore, discount store,
department store, supermarket, hypermarket and shopping center.

2.7.1 Retail in Malaysia

Retail has been one of the most active sub-sectors in the Malaysian economy. Retail is
the second biggest contributor to the national GDP, contributing RM31, 081 million
(AUD14, 603 million) in 2000 (Eighth Malaysia Plan, 2001).
 32

Refer to Table 2.2. Higher disposable income, a more affluent society as well as more
sophisticated tastes of the consumers have led to a rapid growth of the sector. This sub-
sector as a whole contributed 14.9% to the national income in 2000, rising from 11.1% in
1999. About 1.6 million people were employed in this sector in 2000 or 17.1% of total
employment in Malaysia. This figure is estimated to increase to 1.9 million (17.3%) in
2005. (Eighth Malaysia Plan, 2001).

Table 2.2 Gross Domestic Product by Industry of Origin, Malaysia 2000-2005

By this standard it is anticipated that retail trade will continue to be a prominent

economic activity in the country. All these efforts have accentuated the importance of the
retail trade in Malaysia.

Retail in Malaysia is wide-ranging; from department stores, supermarkets and mini

markets, specialty shops, convenience stores, provision stores, pharmacies, medical halls,
direct sale, wet market stalls to pavement shops and petrol kiosks (Seventh Malaysia Plan,
1996). Such variety reflects the changing demands and expectations among consumers
for better quality products and services.
 33

2.7.2 Four types of retailers

Four major categories of retailing can be found operating concurrently in large cities in
Malaysia and in the Southeast Asia region. These four types of retailers include:

1. The informal sector, which includes hawkers and peddlers selling fresh produce,
cooked food and daily provisions in the designated morning market, wholesale
market and enclosed market.

2. The small-scale, single-propriety shops along major roads in town areas. These
premises are usually double or three-storey pre-war shop houses with retail activities
on the ground floor and dwelling units in the upper floors. Examples of such trading
include jewellery, spices and religious paraphernalia, clothing apparel, handbags,
personal items and medicinal herbs and coffee shops.

3. The large-scale department stores and supermarkets built in the late 1970s and early
1980s, generally in modern architectural style.

4. The super regional shopping centers built in the late 1980s and beyond, which feature
several department stores and small-scale shops located under one roof. Such
commercial complexes also provide for leisure and social activities along with
shopping. The architectural styles of these modern shopping complexes, with glass
frames, atrium and perspecs roof, stood in contrast to the existing traditional
architectural landscape in the immediate surrounding area.
 34

2.7.3 Retail Activity in Malaysia: From Shop house to Hypermarket

Retailing is a subset of the commercial sector that has contributed significantly to

Malaysia GDP. Similar to the situation in many Southeast Asian countries, retailing of
various scales, co-exist side by side. This is especially true in the highly urbanized areas
where small-scale retailing co-exist with the large-scale retailing. In the states of
Selangor and Johor, the small-scale retailing in the form of shop houses still continues to
grow in spite of the advancing hypermarkets.

On the other hand, in Federal Territory Kuala Lumpur, the retail trend seems to be
changing from shop houses to large-scale retailing like supermarkets and hypermarkets.
Shopping complexes and hypermarkets have outgrown shop houses in recent years in F.T.
Kuala Lumpur. However, there are still places in Malaysia that is experiencing growth in,
both small-scale retailing and hypermarkets; an example is the state of Penang where
shop houses and hypermarket are achieving high growth.

2.7.4 Hypermarkets in Malaysia See Strong Growth

Malaysian consumers are increasingly making their everyday purchases through

hypermarkets, attracted by their wide range of products at low prices. Furthermore, small
retailers and street vendors use hypermarkets to buy their stock, which they then sell on
to end consumers. With restrictions implemented by the government on the locations of
these large outlets, hypermarkets and supermarkets in Malaysia are deepening their
penetration of areas outside the major cities.

While this is appealing to a growing number of Malaysians as they enjoy easier access to
these stores, there are concerns that these giant outlets will have an adverse effect on the
overall retail environment in the country. The government is observing the situation, and
may take further action to prevent hypermarkets becoming dominant. For example, in
recent years the Malaysian Government revised its foreign ownership laws to moderate
the rapid growth of supermarkets and hypermarkets in the country.
 35

2.8 RETAIL STORES PROFILE

The company has become more aware of their marketing strategy and started
benchmarking to measures, and compares all its functions, systems and practices against
strong competitors, identifying quality gaps in the organization, and striving to achieve
competitive advantage locally and globally. The world is getting more challenging and
more competitive day by day. We have to look around us in order to reflect objectively
on our achievements.

2.8.1 Tesco Stores (Malaysia) Sdn Bhd

Tesco Stores (Malaysia) Sdn Bhd was incepted on 29 Nov 2001, as a strategic alliance
with local conglomerate, Sime Darby Berhad of which the latter holds 30% of total
shares. Malaysia was selected as the next market of entry because of its growing
economy with political stability, market size & GDP (gross domestic product) and its
ability to grow. Tesco has a corporate-wide policy for corporate social responsibility,
backed by key programs to support the local people and the communities. Tesco has a
strong own brand strategy, offering a three-tier system, designed to provide an own brand
choice for a wide range of consumers. There are three ranges of Tesco branded products.
Tesco offers various lower prices, wider products range, better promotions, more events
and in-store activities, contests and lots more.

As part of Tesco’s strategy of combining world class retailing approach with a local focus
in Malaysia, Tesco believes in maximizing the benefits of local sourcing. Among the key
steps undertaken are:

- Working with the Ministry of Domestic Trade and Consumer Affairs to develop
the Supplier Guidelines Communication Pack for potential suppliers.
- Organizing seminars, workshops and proactively assisting SMEs (Society of
Manufacturing Engineer) on supplying to hypermarkets like Tesco.
 36

- Developing and assisting local suppliers to supply products under the Tesco brand
to Tesco hypermarkets, locally and internationally.
- Creating retail opportunities for local businesses through rental of retail areas
such as shop lot, food court, temporary kiosks, etc.
- Working with State Government, FAMA, and a subsidiary of Ministry of
Agriculture, to maximize local sourcing opportunities.
- Creating opportunities for smaller businesses – allocating 30% of food court
space for Bumiputra suppliers.

Part of Tesco’s commitment as a responsible corporate citizen is to help uplift the

standard of the retailing industry in Malaysia. In July 2002, Tesco launched its
Management Trainee Program which covered both theory and on-the-job training
sessions over a period of eight months. This is the longest and more comprehensive in the
local retail industry.

Customer service is at the top level of company. The company mission statement: ‘No
one tries harder for customers’. They should understand customers better than anyone, be
energetic, be innovative and be first for customers, use their strengths to deliver
unbeatable value to the customers and look after their people so they can look after the
customers. The other is ‘Treat people how I like to be treated’.

All retailers, there's one team, that is The Tesco Team. They trust and respect each other,
strive to do their very best, give support to each other and praise more than criticize, ask
more than tell and share knowledge so that it can be used, enjoy work, celebrate success
and learn from experience.
 37

2.8.2 Carrefour - Magnificent Diagraph Sdn.Bhd.

Carrefour is recognized as the pioneer of the hypermarket concept, which is simply best
bargains, better service, and better choice. It got four leading format that are
hypermarket, supermarket, hard discount and convenience store. The group operates,
directly or via franchise. In Malaysia, Carrefour operates under the registered name of
Magnificent Diagraph Sdn.Bhd. Carrefour Malaysia is known for its discount prices and
100% refund policy that protects the consumer’s right against defective goods and its
lowest price guarantee.

Carrefour’s mission in Malaysia is based on customer satisfaction. All activities in

Carrefour are geared towards meeting the changing demands of the customers in terms of
products selection and quality at the most competitive prices. In order to be able to
achieve low prices, Carrefour sources a major part of its products locally, with imports
supplementing the product range, purchases in bulk directly from suppliers and
dispensing with the ‘middle men’ and operates on a self-service basis. Through these
means and by keeping its overheads low, Carrefour is able to pass on saving to the
customers, without compromising on quality and shopping comfort.

With operations in 30 countries, Carrefour is the world’s second largest retail group.
Carrefour has also been present in the Americas since 1975 and in Asia since 1989. This
success stems from its ability to adapt its strategy to fit local markets and to make
globalization an opportunity for progress.

Carrefour is a leading global retailer of food products (accounting for some 80% of
turnover) as well as non-food products (accounting for some 20% of turnover). Its market
share determines its main areas of responsibility. In some countries the Carrefour Group
also offers a number of additional services (e.g. holidays, petrol, ticket sales, and
financial services), bringing new challenges. With 9,632 stores, of which 57% are
integrated, i.e. owned by Carrefour, the Group has a range of retail store formats to help it
meet the needs and requirements of its customers.
 38

2.8.3 Giant - Dairy Farm International (DFI)

Giant is owned by Dairy Farm International (DFI). The story of Dairy Farm dates back
to 19th century Hong Kong. It was from a dairy farm to Asia's leading retailer. Dairy
Farm International Holdings Limited is a retail company in Asia, with a legal base in
Bermuda.

Owned by Dairy Farm International (DFI), Giant is a 60-year old Malaysian brand built
on its ability to deliver low prices everyday to consumers. The Giant store brand was
founded by the Teng family as a simple grocery store in one of the suburbs of Kuala
Lumpur in 1944. Its mission was to offer a wide variety of products at the lowest possible
prices. As its reputation grew, so did its business. Dairy Farm, which acquired Giant in
1999, recognized that the key to Giant's success had been its ability to continuously offer
value for money products. It retained this core principle even as it began transforming
Giant into a national and international brand. Giant hypermarkets offer a wide range of
local merchandise, such as fresh local fruits, vegetables, and seafood within a wet market
environment.

In Malaysia, the name Giant has become synonymous with everyday low prices, big
variety and great value. This has been underscored by the Shoppers Trend Survey, which
showed that Giant was perceived as the cheapest place in Malaysia to shop for everyday
groceries. Towards to the cause of the consumer, Giant has thrown its weight fully behind
the Malaysian Government campaign to create smart consumers of Malaysians by
continuously offering Everyday Low Prices, Big Variety and Great Value. The
Government has named many of Giant stores as its low price partner. This has been
underscored by the Shoppers Trend Survey, which showed that Giant was perceived as
the cheapest place in Malaysia to shop for everyday groceries.
 39

2.8.4 Mydin Mohamed Holdings Berhad

Founded in 1957, Mydin Mohamed Holdings Berhad is the largest homegrown wholesale
emporium in Malaysia, employing 2,800 staff across its 20 branches nationwide. The
"Mydin" name today is well established among Malaysians as well as foreigners
particularly in the East Coast and Klang Valley. With the combination concept of
supermarket and large general merchandise store, Mydin is also known as the only
wholesale emporium that offers full range of religious needs for Muslim customer such
as prayer mats and perfume oil.

The philosophy of "Customer First" has always been the guiding principle for Mydin
staff of all levels at all times. Mydin is also committed in providing the best value for
money for the best assortment of goods, excellent service and customer convenience by
opening more outlets at strategic places. In 2004 itself, Mydin opened 2 new Mydin Mart
branches through franchising in Kajang and Seremban. Mydin is looking forward to
expand branches nationwide in order to cater to the growing number of customers.

Mydin aims to be the leading local wholesale and Retail Company by providing the best
value for money for the best assortment of goods, by providing service to our customers
and by striving for excellence. Mydin also aims to inspire more Malaysians for open
outlets with their own proven success formula.

2.9 CONCLUSION

In tune with the Government’s aim to establish Malaysia as a prime regional shopping
destination, many new shopping areas have been designated and many shopping
campaigns and carnivals were launched to attract shoppers from local and abroad. Such
variety reflects the changing demands and expectations among consumers for better
quality products and services.
 40

CHAPTER 3

RESEARCH METHODOLOGY

3.1 INTRODUCTION

The research methods must be appropriate to the objectives of the study. This research
was carried out via exploratory research which allows me to familiarize myself with the
problem or concept to be studied, followed by descriptive-causal research to determine
which variable might be causing a certain behavior. The final stage will be a conclusive
research to provide information that is useful in reaching conclusions or decision-making
and a reliable or representative picture of the population through the use of a valid
research instrument.

3.2 RECOGNISANCE SURVEY

Based on findings in earlier stage, a recognisance survey was carried out in order to
locate the most suitable site for the research. The section take into consideration sites in
Selangor area. Selangor is Malaysia's most populous state, with the nation's biggest
conurbation, the Klang Valley. Selangor's geographical position in the center of
Peninsular Malaysia contributed to the state's rapid development as Malaysia's
transportation and industrial hub. Selangor has a population of 4,736,100 (2005 estimate);
the state's ethnic composition consisted of Malays 41%, Chinese 37%, Indians 19% and
other ethnic groups 3%.
 41

Illustration 3.1 Selangor's Geographical Position

The selected data collection sites are Tesco Saujana Impian Kajang, Carrefour Alamanda
Putrajaya, Giant Bukit Tinggi and Mydin Kajang.
 42

3.3 QUESTIONNAIRE CONSTRUCTION

Good questionnaire construction is critical to the success of a survey. The research

objectives and frame of reference was defined beforehand, including the questionnaire's
context of time, budget, manpower, intrusion and privacy.

A non-comparative Likert scaling techniques was used. The level of measurement of a

variable in mathematics and statistics is a classification that was proposed in order to
describe the nature of information contained within numbers assigned to objects and,
therefore, within the variable.

The questionnaire is divided into 4 sections:

1. Customer Information
2. Marketing Mix Model
3. Customer Perception
4. Motivating Factor

Variables that are measured only nominally are also called categorical variables. The
demography variables measured at a nominal level in Section 1 include gender, ethnic,
marital status, age and how often do the respondents shop at the specific retail store.

A typical test item in a Likert scale is a statement. The respondent is asked to indicate his
or her degree of agreement with the statement or any kind of subjective or objective
evaluation of the statement. In Section 2, a six-point scale is used in a forced choice
method where the middle option of "Neither agree nor disagree" is not available. The
questions comprise four elements such as product, price, promotions, place/distribution;
six questions are allocated for each of the 4Ps.
 43

Please rate with respect to the following

Strongly Strongly
Disagree Agree
1 2 3 4 5 6
Product

1) This store offers high quality merchandise □ □ □ □ □ □

Section 3 evaluates customer’s perception using the same scale as practice in Section 2
where Section 4, the last part of the questionnaire measure the factor that motivates
respondents the most to patronize the specific retail store using the nominal
measurement.

3.4 TEST-RETEST RELIABILITY CHECKS

A pre-test is done where the questionnaire is tested on a statistically 20 samples of

respondents from each retail store, sum up to a total of 80samples before a full-scale
study in order to identify any unforeseen problems such as unclear wording, flow of the
questions or the questionnaire taking too long to administer.

Reliability is the extent to which a measure will produce consistent results. Test-retest
reliability checks how similar the results are if the research is repeated under similar
circumstances. Stability over repeated measures is assessed with the Pearson coefficient.
Alternative forms reliability checks how similar the results are if the research is repeated
using different forms. Internal consistency reliability checks how well the individual
measures included in the research are converted into a composite measure. Internal
consistency may be assessed by correlating performance on two halves of a test (split-
half reliability). The value of the Pearson product-moment correlation coefficient is
adjusted with the Spearman-Brown prediction formula to correspond to the correlation
between two full-length tests. A commonly used measure is Cronbach's α, which is
equivalent to the mean of all possible split-half coefficients. Reliability may be improved
by increasing the sample size.
 44

3.4.1 Cronbach's α (alpha)

Cronbach's α (alpha) has an important use as a measure of the reliability of a

psychometric instrument. It indicates the extent to which a set of test items can be treated
as measuring a single latent variable. It was first named as alpha by Cronbach (1951), as
he had intended to continue with further instruments. It is the extension of an earlier
version, the Kuder-Richardson Formula 20 (often shortened to KR-20), which is the
equivalent for dichotomous items, and Guttman (1945) developed the same quantity
under the name lambda-2.

Cronbach's α is defined as:

N ⎛ σ X − ∑ i =1σ Yi ⎞
2 N 2
⎜ ⎟
N −1 ⎜ σ X2 ⎟
⎝ ⎠

where N is the number of components (items or testlets), σ X2 is the variance of the

observed total test scores, and σ 2 is the variance of component i for person y.
Yi
 45

3.4.2 Pre-Test

Using the SPSS software, the reliability value of the 20 pre-test samples from each retail
store, sum up to a total of 80samples was calculated and the Cronbach’s Alpha result is as
below:

3.4.2.1 Reliability Statistics for Tesco

Table 3.1 Reliability Statistics - Tesco

Reliability Statistics - Tesco

Reliability Statistics

Cronbach's
Alpha N of Items
.888 26

3.4.2.2 Reliability Statistics for Mydin

Table 3.2 Reliability Statistics - Mydin

Reliability Statistics - Mydin

Reliability Statistics

Cronbach's
Alpha N of Items
.700 26

3.4.2.3 Reliability Statistics for Carrefour

Table 3.3 Reliability Statistics - Carrefour

Reliability Statistics - Carrefour

Reliability Statistics

Cronbach's
Alpha N of Items
.822 26
 46

3.4.2.1 Reliability Statistics for Giant

Table 3.4 Reliability Statistics - Giant

Reliability Statistics - Giant

Reliability Statistics

Cronbach's
Alpha N of Items
.984 26

3.4.3 Overall Reliability Statistics

The calculated Cronbach’s Alpha result for a total of 80samples from four retail stores,
Tesco, Mydin, Carrefour and Giant:

Table 3.5 Overall Reliability Statistics

Reliability Statistics - Overall

Cronbach's
Alpha N of Items
.874 26

According to the output, the overall value of Cronbach’s Alpha is 0.883 which is greater
than 0.7, which is good considering that .70 is the cutoff value for being acceptable.
(Note that a reliability coefficient of .70 or higher is considered “acceptable” in most
Social Science research situations).

Here we can conclude that the questionnaire is reliable and the marketing research survey
shall be continued.
 47

3.5 SAMPLING METHODS AND SAMPLE SIZE

There are many considerations that come into play when designing a research study.
Compromises are always being made on sample size, acceptable error levels, sources of
bias and the like, based on the availability of resources (time, money, personnel). There is
no one right way to decide what is acceptable.

A sample is the term that refers to the group surveyed anytime the survey is not
administered to all members of the population or universe. The process of selecting a
smaller group of the people that have basically the same characteristics and preferences
as the total group from which it is drawn is called sampling.

A famous quote:
“By a small sample we may judge the whole piece.” – Cervantes

In marketing research, the goal is to assess target segments efficiently and effectively by
designing and executing representative sample plans. In most cases the study objects of
interest consist of a large universal. The reason we select the sampling technique over a
census is due to cost saving, time economy, more in-depth information, less total error,
greater practicality and greater security.
 48

3.5.1 Simple Random Sampling

We choose simple random sampling in the research for conceptually; simple random
sampling is the simplest of the probability sampling techniques. It requires a complete
sampling frame, which may not be available or feasible to construct for large populations.
Even if a complete frame is available, more efficient approaches may be possible if other
useful information is available about the units in the population.

In statistics, a simple random sample is a group of subjects (a sample) chosen from a

larger group (a population). Each subject from the population is chosen randomly and
entirely by chance, such that each subject has the same probability of being chosen at any
stage during the sampling process. This process and technique is known as Simple
Random Sampling, and should not be confused with Random Sampling.

In small populations such sampling is typically done "without replacement", i.e., one
deliberately avoids choosing any member of the population more than once. An unbiased
random selection of subjects is important so that in the long run, the sample represents
the population.

However, this does not guarantee that a particular sample is a perfect representation of
the population. Simple random sampling in this study merely allows us to draw externally
valid conclusions about the entire population based on the sample. Although simple
random sampling can be conducted with replacement instead, this is less common and
would normally be described more fully as simple random sampling with replacement.

Advantages using simple random sampling in this study are that it is free of classification
error, and it requires minimum advance knowledge of the population. For it best suits
situations where not much information is available about the population and data
collection can be efficiently conducted on randomly distributed items.
 49

3.5.2 DETERMINE SAMPLE SIZE

Statistical Sampling Concepts

The size of the sample will be a function of the accuracy of the sample. In this study, two
criteria are used in measuring accuracy: the margin of error and the level of confidence.
The first is determined as the tolerated-error range (also known as sample precision) and
the second is the probability that the sample will fall within that tolerated-error range. A
margin of error of 3 percent, for example, means that out of all possible samples of a
certain determined size of coin flips, 95 percent will differ from the actual population by
no more than three percentage points.

Sample-size determination ultimately is a reflection of the value of the information

sought. Scientific journals require that reported results must fall in the 95 to 99 percent
confidence levels. When the risk involved in the decision alternatives is high, and then
the 95 to 99 percent confidence levels will be required. The 95 percent confidence level is
suggested for most research.

Using the assumptions of the Central Limit Theorem (that means of samples drawn will
be normally distributed around the population means, etc.), we select a standard normal
deviate from the following tables:

Table 3.6 Level of Confidence

Level of Confidence Z Value

95.00% 1.96
 50

A way to view calculating the sample size required for a given precision of a proportion
score is to use the following formula:

n = Z ²(p.q)
h²
where
Z = value from normal distribution table for desired confidence level
p = obtained proportion
q = 1- p
h = desired precision ±

Result is obtained:
n = (1.96) ²(1/6) (5/6)
(0.05) ²
= 213.42222
≈ 214

The sample size required to give 95 percent level of confidence that the sample
proportion is within ± 5 percent of the population proportion is 214.

3.5.3 Assumptions for Simple Random Sampling

Simple random sampling is one form of the general set of sampling procedures referred
to as probability sampling. Probability sampling procedures must meet 4 criteria
(Chochran, 1977:9):
1. We can define the set of distinct samples which the procedure is capable of selecting.
2. Each possible sample has assigned to it a known probability of selection.
3. We select one of the samples by a random process in which each sample receives its
appropriate probability of being selected.
4. The method for computing the estimate must lead to a unique estimate for any specific
sample.
 51

3.6 DATA COLLECTION

The study was conducted in a Selangor area, the most populous state in Malaysia with
approximately 4.19 million residents. At the time of the study, four retail stores were
chosen as the research sites.

The data were collected by means of questionnaire. Households were the target of the
research during the surveyed period.

First appointment was conducted with the personal in-charge in each retail store to
request cooperation and approval for data collection and survey respond via formal letters
from the Department of Mathematical Sciences, Faculty of Science and technology,
National University of Malaysia.

Field research was conducted in Tesco Saujana Impian Kajang, Carrefour Alamanda
Putrajaya, Giant Bukit Tinggi and Mydin Mart Kajang.

A simple random sample of 214 household’s respondents was obtained from each of the
four retail stores; sum up a total of 856 respondents data.
 52

3.7 ILLUSTRATION OF RESEARCH FRAMEWORK

Illustration 3.2 Attribute – 4P’s – Retail Stores Mapping

Attribut - 4P’s - Retail Stores Mapping

High Quality

Several Brands

Good Condition

Visual Appearance
Product

Maintenance&Repair Carrefour

National Merchandise

Cheaper In Buy Additional

Lowest Price In Area

Everyday Best Price

Resoanable Price
Price

Giant
Best Value For Money

Low Throughout Year

Fast Checkout

Convenience Parking

Near To My Living Place

Place/
Appealing Decor Distribution

Tesco
Easy Layout

Public Transport

Advertised Merchandise

Offer Coupons

Seasonal Promations

Privilege Card
Promotiom

Promotions Informations Mydin

Attractive Promotions
 53

The illustration of Attribute - 4P’s - Retail Stores Mapping was built to sprout a better
understanding on our study framework. It elucidates the main idea of how we determine
the targeted attribute of the 4Ps and generate it in the questionnaire to meet out objectives.

The relationship between the marketing mix, 4ps with the attributes lies in each P
element were elucidate clearly linking to the four selected retail stores, namely Carrefour,
Giant, Tesco and Mydin.

Once everybody agrees about the family of criteria, assuming that the alternatives are
known, it remains to complete the decision matrix, i.e., to evaluate each alternative
according to the criteria. This evaluation theoretically depends on the posterior
aggregation procedure, but this fact is generally ignored by the designers so that the
assessment is generally independent of the aggregation procedure.

The system can support a direct assessment method, showing graphically to the decision
making, the position of the various alternatives or transforming a pair wise comparison
into a numerical (normalized) scale as, for example, in the so-called "Analytical
Hierarchical Process"(AHP) (Saaty,
1980).

In the framework of multi-attribute utility, the utilities of a given alternative, regarding

each attribute, are jointly cardinal. They have consequently to be jointly evaluated
(Pomerol & Barba-Romero, 1993). In this case, due to the difficulty either to verify the
probabilistic independence or to help the decision maker to jointly evaluate the
alternatives by solvability or by the mid-preference point method, the support of a Multi-
criteria Decision Making methodology should be very useful.
 54

This question of the evaluation of the alternatives is even more difficult due to the
relationships between the alternatives and the evaluation context. Indeed, it is well-
known that many aggregation procedures are not insensitive to the introduction of new
alternatives (Pomerol and Barba-Romero (1993)) and, even worst that the evaluation
depends on the alternatives presented to the subject. This is typical in the so-called frame
effect (Tversky and Kahneman, 1988): an average valued alternative will be evaluated
with better marks when it is presented within a bad alternative set rather than within a
good one.

The frame effect is typically a contextual effect, and one must consider that it is actually
difficult to separate the criteria from the alternatives; they are both defining the context of
the decision.

Keeney (1992) has emphasized that the decision making should define objectives before
seeking alternatives that permit to attain his objectives.

In our framework, we can think about objectives as aspiration levels defined for each
criterion or alternately as very general goals. We manage to expose the relationship
between the marketing mix, 4ps with the attributes lies in each P, it was elucidate clearly
link to the four selected retail stores.

We cannot leave the topic of criteria without discussing of the question of the assessment
of weights or more generally of importance factors. It is not very useful to support the
decision making for direct assessment. But it is known that the direct assessment entails
so many flaws (Mousseau, 1993; Weber and Borcherding, 1993) that it would probably
be preferable to provide some support. One way consists of facilitating the transformation
from ordinal weights into cardinal ones. Some systems also can manage intervals of value
for weights. Another way is to generate questions about pairwise comparisons to build a
coherent set of weights. Mousseau (1993) has designed such a DSS.
 55

One of the advantages of the multi-criteria decision framework is to allow a classification

of the contextual problems by distinguishing some concepts: alternatives, criteria, goals,
assessment. One can observe that the contextual information mainly applies on the
relationships between the previous concepts and influences the limits of each of them.

In other words, there is a core of knowledge by which a subject easily distinguishes

between a criterion, a goal and an alternative, but at some extremities a criterion may
become a fact concerning a given alternative or an objective in place of a criterion. Such
contextual knowledge preferentially affects the relationships between concepts rather
than the concepts themselves, and the borderline of the concepts rather than their core.

3.8 CONCLUSION

The retail stores management uses the information so obtained to understand the needs of
individuals in the marketplace, and to create strategies and marketing plans. The process
of measurement is central to quantitative research because it provides the fundamental
connection between empirical observation and mathematical expression of quantitative
relationships.
 56

CHAPTER IV

DATA ANALYSIS, INTERPRETATION AND DISCUSSION

Data will be compiled according to the selected sites. The data will be analyzed applying
computer software such as Statistical Package for the Social Sciences (SPSS), among the
most widely used programs for statistical analysis in social science. It is used by market
researchers, health researchers, survey companies, government, education researchers,
and others. In addition to statistical analysis, data management (case selection, file
reshaping, creating derived data) and data documentation (a metadata dictionary is stored
with the data) are features of the base software.

Microsoft Words, Microsoft Excel and Adobe Acrobat Professional were use to generate
and transform result and dissertation.

Information that determines its real value to the organization is determined by:
1. The ability and willingness to act on the infomation
2. The accuracy of the information
3. The level of indecisiveness that would exist without the information
4. The amount of variation in the possible results
5. The level of risk aversion
6. The reaction of competitiors to any decision improved by the information
7. The cost of the information in terms of time and money
 57

4.1 INTRODUCTION

The retail market place promotes continuous improvement to survive in a turbulent

environment. It does so by creating, acquiring and transferring knowledge and modifying
its behavior to reflect new knowledge. For that, benchmarking is the search for industry
best practices that leads to superior performance (Camp, 1989).

The benchmarking measurement of the retail stores considers a set of indicators and for
this reason assumes the configuration of a multicriteria analysis. The literature on retail
stores and marketing mix model has identified four major underlying criteria essential to
take place in the market place. They are as follows:

ATT1 : Product Attribute

ATT2 : Price Attribute
ATT3 : Promotions Attribute

ATT4 : Place/Distribution Attribute

Multicriteria benchmarking analysis of comparing the four retail stores (Tesco, Carrefour,
Giant and Mydin) poses many problems. Since the “dominance” relation is usually not
verified, there is not a “best in class organization”. Generally, an organization will show
better performance on the basis of some indicators and worse performance on the basis of
some others: “there is no single performance management enterprise system which is best
in class across all areas” (Sharif, 2002, p. 76).

However, in the absence of a superior “best in class” dominating organization, one

cannot “search for industry best practice that leads to superior performance”, and thus
cannot apply benchmarking analysis as advocated.
 58

The “best in class” is the organization with the maximum averaged value, computed by
averaging the scores assigned to all the organizations on the basis of all the criteria.
Moreover, this paper illustrates the advantages, in terms of flexibility and realism,
connected to the application of the multi-criteria outranking methodology as an
alternative and more suitable approach for benchmarking analysis of retail stores.

That is, the aim of this paper is to show the contribution of the multicriteria outranking
methodology to the valuation of the retail stores in the market place in terms of
benchmarking analysis. It enables the benchmarking of organizational learning capability
without the necessity of an aggregate indicator obtained by averaging all scores assigned
to the organizations on the basis of the different criteria.

Consider four retail stores:

R1 : Tesco
R2 : Mydin
R3 : Carrefour

R4 : Giant

This averaging methodology is the peculiarity and the main disadvantage of the
traditional approach, that is, the aim of this chapter is to show the contribution of the
multicriteria outranking methodology to the valuation of the impact of marketing mix on
customer satisfaction of the four retail stores (Tesco, Carrefour, Giant, Mydin) in terms of
benchmarking analysis. The application of outranking approach enables, unlike the
traditional analysis, the benchmarking of the impact of marketing mix without the
necessity of an aggregate indicator obtained by averaging all scores assigned to the
organizations on the basis of the different criteria. Finally, the following section discusses
the contribution of the outranking multicriteria methodology to the benchmarking
analysis of the impact of marketing mix on customer satisfaction.
 59

4.2 CONSENSUS RANKINGS FROM BENCHMARKING

The benchmarking analysis of the retail stores considers a set of criteria: product, price,
place/distribution and promotion. The impact of marketing mix on customer satisfaction
of the retail stores is a case study deriving consensus rankings from benchmarking
analysis by comparing Tesco, Carrefour, Giant and Mydin which considers a set of 4Ps
criteria.

For this reason it assumes the configuration of a multicriteria analysis. In the traditional
benchmarking the multicriteria problem is solved throughout the construction of a
synthetic indicator obtained by averaging all scores assigned to an organization on the
different criteria. This methodology presents many theoretical and empirical
disadvantages.

This paper illustrates the advantages, in terms of greater flexibility and realism,
connected to the application of the multicriteria methodology founded on the notion of
outranking. In fact, such a methodology solves the multicriteria benchmarking problem
without using the averaging rule adopted by the traditional benchmarking approach.

In fact, such a methodology solves the multicriteria benchmarking problem without using
the averaging rule adopted by the traditional benchmarking approach.
 60

4.3 PROFILE OF RESPONDENTS

The respondents’ profile is as presented in Table 4.1 - 4.5.

Table 4.1 Profile of Respondents – Gender

Gender

Cumulative
Gender Frequency Percent Valid Percent Percent
Male 437 51.1 51.1 51.1
Female 419 48.9 48.9 100.0
Total 856 100.0 100.0

Table 4.2 Profile of Respondents – Ethnic

Ethnic

Cumulative
Ethnic Frequency Percent Valid Percent Percent
Malay 411 48.0 48.0 48.0
Chinese 325 38.0 38.0 86.0
Indian 94 11.0 11.0 97.0
Others 26 3.0 3.0 100.0
Total 856 100.0 100.0

Table 4.3 Profile of Respondents – Marital Status

Marital Status

Cumulative
Marital Status Frequency Percent Valid Percent Percent
Single 465 54.3 54.3 54.3
Married 391 45.7 45.7 100.0
Total 856 100.0 100.0
 61

Table 4.4 Profile of Respondents – Age

Age

Cumulative
Age Frequency Percent Valid Percent Percent
<21 107 12.5 12.5 12.5
21-35 506 59.1 59.1 71.6
36-50 212 24.8 24.8 96.4
>50 31 3.6 3.6 100.0
Total 856 100.0 100.0

Table 4.5 Profile of Respondents – Shopping Frequency

Shopping Frequency

Cumulative
Shopping Frequency Frequency Percent Valid Percent Percent
Daily 60 7.0 7.0 7.0
Once a week or more 173 20.2 20.2 27.2
2-3 times a month 191 22.3 22.3 49.5
Once a month 208 24.3 24.3 73.8
every 2-3 months 143 16.7 16.7 90.5
2-3 times a year 81 9.5 9.5 100.0
Total 856 100.0 100.0
 62

4.4 DESCRIPTIVE STATISTICS

Probably the most often used descriptive statistic is the mean. The mean is a particularly
informative measure of the "central tendency" of the variable. We are interested in
statistics from our sample only to the extent to which they can infer information about the
population.

We use descriptive statistic to describe customers in a database based on the data

available. This type of analysis assumes that all data are equally important and
meaningful. It also assumes that each data element contributes meaningful information.
The larger the sample size, the more reliable for the mean. The larger the variation, the
less reliable the mean.

A descriptive analysis has been generated from the SPSS for the data collected and the
following section will discuss the interpretation of those data.
 63

4.4.1 Descriptive Statistics of Marketing Mix Factor

4.4.1.1 Descriptive Statistics of Product Factor

Table 4.6 Descriptive Statistics of Product Factor

N Minimum Maximum Mean Std. Deviation

High Quality 856 1 6 3.84 .945
Several Brands 856 1 6 4.15 .942
Good Condition 856 1 6 4.15 .865
Visual Appearance 856 2 6 4.07 .867
Maintenance & Repair 856 1 6 4.16 .902
National Brand
Merchandise 856 1 6 4.14 .989

4.09
Attribute Mean

3
Mean

0
High Quality Several Good Visual Maintenance National
Brands Condition Appearance & Repair Brand
Merchandise

The highest score for product factor is set for the retail store offers good maintenance and
repair of good sold.
 64

4.4.1.2 Descriptive Statistics of Price Factor

Table 4.7 Descriptive Statistics of Price Factor

N Minimum Maximum Mean Std. Deviation

Cheaper In Buy Additional 856 1 6 3.81 1.081
Lowest Price In Area 856 1 6 3.98 1.070
Everyday Best Price 856 1 6 4.07 1.013
Reasonable Price 856 1 6 4.16 .902
Best Value For Money 856 1 6 3.06 1.482
Price Low Throughout Year
856 1 6 3.85 .981

3.82
Attribute Mean

3
Mean

0
Cheaper In Lowest Price Everyday Reasonable Best Value Price Low
Buy In Area Best Price Price For Money Throughout
Additional Year

The highest score for price factor is set for the price of the product is reasonable in the
respective retail store.
 65

4.4.1.3 Descriptive Statistics of Place/Distribution Factor

Table 4.8 Descriptive Statistics of Place/Distribution Factor

N Minimum Maximum Mean Std. Deviation

Fast Checkout 856 1 6 3.44 1.068
Convenience Parking 856 1 6 3.85 1.127
Near To My Living Place 856 1 6 3.75 1.180
Appealing Decor 856 1 6 3.90 .944
Easy Layout 856 1 6 3.99 .964
Convenient Public
Transport 856 1 6 3.36 1.136

3.72
Attribute Mean

3
Mean

0
Fast Convenience Near To My Appealing Easy Layout Convenient
Checkout Parking Living Place Decor Public
Transport

The highest score for Place/Distribution is set for the store’s layout makes it easy for
respondents to find what they need.
 66

4.4.1.4 Descriptive Statistics of Promotion Factor

Table 4.9 Descriptive Statistics of Promotion Factor

N Minimum Maximum Mean Std. Deviation

Advertised Merchandise
Available 856 1 6 3.76 1.050
Offer Coupons 856 1 6 3.23 1.216
Seasonal Promotions 856 1 6 4.01 1.012
Privilege Card 856 1 6 3.25 1.269
Well Informed Of
Promotions 856 1 6 3.61 1.156
Attractive Promotions 856 1 6 3.77 1.055
3.61
Attribute Mean

3
Mean

0
Advertised Offer Seasonal Privilege CardWell Informed Attractive
Merchandise Coupons Promotions Of Promotions
Available Promotions

The highest score for Place/Distribution is set for seasonal promotions are available in the
respective store.

The conclusion for descriptive analysis is “value for money and don’t waste time”.
 67

4.4.2 Descriptive Statistics of Marketing Mix Model, 4Ps

Table 4.10 Descriptive Statistics of Marketing Mix Model, 4Ps

N Minimum Maximum Mean

Descriptive Statistics of
Product Factor 856 1 6 4.09

Descriptive Statistics of
Price Factor 856 1 6 3.82

Descriptive Statistics of
Place/Distribution Factor 856 1 6 3.72

Descriptive Statistics of
Promotion Factor 856 1 6 3.61

3.61
Attribute Mean

Marketing Mix Model, 4Ps

4.2
4
3.8
Mean

3.6
3.4
3.2
Product Price Place/Distributi Promotion
Mean 4.09 3.82 3.72 3.61
Marketing Mix Factor

From the table, we can conclude that Product factor has the highest mean. Meaning the
product factor rank the highest in terms of satisfaction perceived from customer from the
four retail outlet, followed by price factor, place/distribution factor and promotion factor.
 68

4.4.3 Descriptive Statistics of Motivating Factor

Table 4.11 Motivating Factor

Cumulative
Frequency Percent Valid Percent Percent
Price 401 46.8 46.8 46.8
Promotions 180 21.0 21.0 67.8
Place/Distribution 151 17.6 17.6 85.4
Product 124 14.5 14.5 100.0
856 100.0 100.0
Total

According to the output of motivating factor from SPSS, price is the most motivating
factor (61.3%) followed by promotions (21.0%), place/distribution (17.6%) and last but
not least product (14.5%). It simply means that customer perceive value of price is the
highest factor which drive them to shop at the respective retail store followed by
promotions, place/distribution and product.

500

400

300
Count

200

100

0
Product Price Promotions Place/Distribution
Motivating Factor
 69

4.4.4 Cross tabulation Analysis

The most motivating factor shown above is a result of demography factors such as gentle,
age, marital status, ethnic and shopping frequency. The cross tabulation analysis of the
motivating factors is displayed in following tables.

Table 4.12 Motivating Factor * Gender Cross tabulation

Gender Total
Male Female
Motivating Product
58 66 124
Factor
Price 218 183 401
Promotions 74 106 180
Place/Distribution 87 64 151
437 419 856
Total

From the table, we conclude that motivating factor to most male and female is price.
Whereas the less motivated factor falls to product for male and place/distribution for
female.

Table 4.13 Motivating Factor * Ethnic Cross tabulation

Ethnic Total
Malay Chinese Indian Others
Motivating Product
56 56 10 2 124
Factor
Price 225 112 53 11 401
Promotions 67 90 17 6 180
Place/Distribution 63 67 14 7 151
411 325 94 26 856
Total

From the table, we conclude that the motivating factor for all ethnics is price. Whereas
the less motivated factor falls to product for Malay, Chinese, Indian and others
respondents.
 70

Table 4.14 Motivating Factor * Marital Status Cross tabulation

Marital Status Total

Single Married
Motivating Product
86 38 124
Factor
Price 194 207 401
Promotions 99 81 180
Place/Distribution 86 65 151
465 391 856
Total

From the table, we conclude that the motivating factor for single and married category
respondents is price. Whereas the less motivated factor falls to product, place/distribution
for single and product for married respondents.

Table 4.15 Motivating Factor * Age Cross tabulation

Age Total
<21 21-35 36-50 >50
Motivating Product
17 87 19 1 124
Factor
Price 43 224 115 19 401
Promotions 24 111 42 3 180
Place/Distribution 23 84 36 8 151
107 506 212 31 856
Total

From the table, we conclude that the motivating factor for all age range is price; whereas
the less motivated factor falls to product for respondents less than 21years old;
place/distribution for respondents range from 21 to 35years old; and product for
respondents more than 36years old.
 71

Table 4.16 Motivating Factor * Shopping Frequency Cross tabulation

Shopping Frequency Total

Once
a 2-3
week times Once every 2- 2-3
or a a 3 times
Daily more month month months a year
Motivating Product
3 16 31 35 26 13 124
Factor
Price 21 89 92 102 70 27 401
Promotions 32 32 34 39 22 21 180
Place/Distribution 4 36 34 32 25 20 151
60 173 191 208 143 81 856
Total

From the table, we conclude that the motivating factor for daily shopper is promotions;
for the rest category of shopping frequency is price; whereas the less motivated factor
falls to product for most of the respondents.
 72

4.4.5 Descriptive Statistics Analysis of four retail stores

4.4.5.1 Descriptive Statistics Analysis of Tesco

Table 4.17 Descriptive Statistics for Tesco

Std. Attribute
N Minimum Maximum Mean Deviation Mean
High Quality 214 2 6 4.18 .791
Several Brands 214 2 6 4.52 .887
Good Condition 214 3 6 4.54 .742
Visual Appearance 214 3 6 4.44 .702
Maintenance & Repair 214 1 6 4.42 .889
National Brand
Merchandise 214 1 6 4.40 1.015
Product 4.42

Cheaper In Buy Additional 214 1 6 3.81 1.106

Lowest Price In Area 214 1 6 4.09 1.118
Everyday Best Price 214 1 6 4.20 1.109
Reasonable Price 214 1 6 4.34 .872
Best Value For Money 214 1 6 3.23 1.542
Price Low Throughout Year
214 1 6 3.98 1.050
Price 3.94

Fast Checkout 214 1 6 3.81 1.127

Convenience Parking 214 1 6 4.39 1.120
Near To My Living Place 214 1 6 4.15 1.239
Appealing Decor 214 1 6 4.10 .885
Easy Layout 214 1 6 4.30 .991
Convenient Public
Transport 214 1 6 3.09 1.232
Place/Distribution 3.97

Advertised Merchandise
Available 214 1 6 4.22 .962
Offer Coupons 214 1 6 3.35 1.242
Seasonal Promotions 214 1 6 4.41 .860
Privilege Card 214 1 6 3.41 1.437
Well Informed Of
Promotions 214 1 6 4.01 1.235
Attractive Promotions 214 1 6 3.99 1.122
Promotion 3.90
 73

4.4.5.2 Descriptive Statistics Analysis of Mydin

Table 4.18 Descriptive Statistics for Mydin

Std. Attribute
N Minimum Maximum Mean Deviation Mean
High Quality 214 1 6 3.75 .974
Several Brands 214 1 6 4.05 1.062
Good Condition 214 1 6 3.98 .986
Visual Appearance 214 2 6 3.74 .952
Maintenance & Repair 214 2 6 4.12 .993
National Brand
Merchandise 214 1 6 3.84 1.157
Product 3.91

Cheaper In Buy Additional 214 1 6 4.00 1.343

Lowest Price In Area 214 1 6 4.09 1.245
Everyday Best Price 214 1 6 4.13 1.182
Reasonable Price 214 1 6 4.25 1.035
Best Value For Money 214 1 6 2.11 1.310
Price Low Throughout Year
214 1 6 3.82 1.034
Price 3.73

Fast Checkout 214 1 5 3.25 1.079

Convenience Parking 214 1 6 3.35 1.357
Near To My Living Place 214 1 6 3.55 1.369
Appealing Decor 214 1 5 3.53 1.073
Easy Layout 214 1 6 3.76 1.116
Convenient Public
Transport 214 1 6 3.09 1.221
Place/Distribution 3.42

Advertised Merchandise
Available 214 1 6 2.93 1.141
Offer Coupons 214 1 6 2.29 1.122
Seasonal Promotions 214 1 6 3.56 1.220
Privilege Card 214 1 6 2.64 1.416
Well Informed Of
Promotions 214 1 6 2.86 1.246
Attractive Promotions 214 1 6 3.40 1.259
Promotion 2.95
 74

4.4.5.1 Descriptive Statistics Analysis of Carrefour

Table 4.19 Descriptive Statistics for Carrefour

Std. Attribute
N Minimum Maximum Mean Deviation Mean
High Quality 214 2 6 3.93 .748
Several Brands 214 2 6 4.26 .784
Good Condition 214 1 6 4.17 .846
Visual Appearance 214 2 6 4.02 .784
Maintenance & Repair 214 1 6 4.03 .793
National Brand
Merchandise 214 1 6 4.21 .901
Product 4.10

Cheaper In Buy Additional 214 1 6 3.42 .960

Lowest Price In Area 214 1 6 3.72 1.014
Everyday Best Price 214 1 6 4.00 .937
Reasonable Price 214 1 6 4.14 .877
Best Value For Money 214 1 6 2.71 1.275
Price Low Throughout Year
214 1 6 3.58 .883
Price 3.60

Fast Checkout 214 1 6 3.34 .945

Convenience Parking 214 1 6 4.06 .881
Near To My Living Place 214 1 6 3.43 1.147
Appealing Decor 214 1 6 4.02 .858
Easy Layout 214 1 6 4.03 .869
Convenient Public
Transport 214 1 6 3.38 1.093
Place/Distribution 3.71

Advertised Merchandise
Available 214 1 6 3.89 .818
Offer Coupons 214 1 6 3.33 1.023
Seasonal Promotions 214 2 6 4.23 .910
Privilege Card 214 1 6 3.07 .993
Well Informed Of
Promotions 214 1 6 3.64 .908
Attractive Promotions 214 1 6 3.76 .837
Promotion 3.70
 75

4.4.5.4 Descriptive Statistics Analysis of Giant

Table 4.20 Descriptive Statistics for Giant

Std. Attribute
N Minimum Maximum Mean Deviation Mean
High Quality 214 1 6 3.49 1.095
Several Brands 214 2 6 3.76 .853
Good Condition 214 2 6 3.91 .723
Visual Appearance 214 3 6 4.06 .867
Maintenance & Repair 214 2 6 4.07 .877
National Brand
Merchandise 214 3 6 4.10 .762
Product 3.90

Cheaper In Buy Additional 214 3 6 3.99 .725

Lowest Price In Area 214 2 6 4.03 .822
Everyday Best Price 214 2 6 3.95 .762
Reasonable Price 214 2 6 3.92 .749
Best Value For Money 214 1 6 4.18 .886
Price Low Throughout Year
214 2 6 4.04 .884
Price 4.02

Fast Checkout 214 2 6 3.37 1.030

Convenience Parking 214 1 6 3.61 .760
Near To My Living Place 214 2 6 3.86 .740
Appealing Decor 214 2 6 3.96 .844
Easy Layout 214 2 6 3.86 .758
Convenient Public
Transport 214 2 6 3.89 .740
Place/Distribution 3.76

Advertised Merchandise
Available 214 1 6 3.97 .750
Offer Coupons 214 2 6 3.96 .798
Seasonal Promotions 214 2 6 3.85 .781
Privilege Card 214 2 6 3.86 .783
Well Informed Of
Promotions 214 2 6 3.93 .787
Attractive Promotions 214 2 6 3.93 .845
Promotion 3.92
 76

4.5 BENCHMARKING AND OUTRANKING-SATISFYING

METHODOLOGY

The outranking methodology is a family of algorithms developed by Operational

Research (Roy, 1985; Vincke, 1992; Roy and Bouyssou, 1993; Pomerol and Barba-
Romero, 2000). Of these, Electre I method will be introduced here. The input of the
Electre I method is represented by a multicriteria matrix as in Table 4.21, surrounded by
a line containing the weights that the decision making assigns to each criterion.

Table 4.21 Multi-criteria matrix (Electre I)

ATT1 ATT2 ATT3 ATT4

(Product) (Price) (Promotion) (Place/Distribution)
R1 (Tesco) 4.42 3.94 3.97 3.90
R2 (Mydin) 3.91 3.73 3.42 2.95
R3 (Carrefour) 4.10 3.60 3.71 3.70
R4 (Giant) 3.90 4.02 3.76 3.92
Weight 1/4 1/4 1/4 1/4

From Table 4.21, the retail stores’ positioning is generated and shown in the table below:

Table 4.22 Retail stores Positioning Table

ATT1 ATT2 ATT3 ATT4

(Product) (Price) (Promotion) (Place/Distribution)

1st Tesco Giant Tesco Giant

2nd Carrefour Tesco Giant Tesco
3rd Mydin Mydin Carrefour Carrefour
4th Giant Carrefour Mydin Mydin
 77

Table 4.23 Retail Stores’ Ranking Table

Attributes Retail Stores’ Ranking

1st 2nd 3rd 4th

ATT1 (Product) Tesco Carrefour Mydin Giant

ATT2 (Price) Giant Tesco Mydin Carrefour
ATT3 (Promotion) Tesco Giant Carrefour Mydin
ATT4 (Place/Distribute) Giant Tesco Carrefour Mydin

Average ( RN ) = [ ATT1 ( RN ) + ATT2 ( RN ) + ATT3 ( RN ) + ATT4 ( RN )]/4

Now, let us consider R2 and R3 . Taking into account the values in Table 4.21 it is evident
that R3 is better than R2 for three criteria out of four (Marketing Model 4Ps). That is:

ATT1 ( R3 ) = 4.10 > ATT1 ( R2 ) = 3.91

ATT3 ( R3 ) = 3.71 > ATT3 ( R2 ) = 3.42
ATT4 ( R3 ) = 3.70 > ATT4 ( R2 ) = 2.95

Three criteria {1, 3, and 4} agree in considering R3 better than R2 . Only one criterion {2}
considers R2 better than R3 . That is:

ATT2 ( R2 ) = 3.73 > ATT2 ( R3 ) = 3.60

 78

Interpreting the same procedure for all the other pairs of retail companies will obtain the
Table 4.24.

Table 4.24 Multi-criteria Matrix

ATT1 ATT2 ATT3 ATT4

(Product) (Price) (Promotion) (Place/Distribution)
R1 (Tesco) 4.42 3.94 3.97 3.90
R2 (Mydin) 3.91 3.73 3.42 2.95
R3 (Carrefour) 4.10 3.60 3.71 3.70
R4 (Giant) 3.90 4.02 3.76 3.92
Weight 1/4 1/4 1/4 1/4

Table 4.25 Matrix of Concordance Subsystems ( J c )

R1 R2 R3 R4
R1 {1,2,3,4} {1,2,3,4} {1,3}
R2 Ø {2} {1}
R3 Ø {1,3,4} {1}
R4 {2,4} {2,3,4} {2,3,4}

The generic element J c ( Ri , R j ) of the matrix of Table 4.25 is given by:

J c ( Ri , R j ) = {j ∈ J = ATTi ( Ri ) ≥ ATT j ( R j )}; where: J = {1, 2, 3, 4}

Taking into account the weights assigned to the various criteria, a concordance index can
be calculated for each pair of company ( Ri , R j ):

C ( Ri ; R j ) = ∑ j∈J K j ;
c

Where: K j is the weight assigned to the jth criterion.

 79

For example, for the pair ( R3 , R2 ) we have:

C ( R3 , R2 ) = K1 + K 3 + K 4 = 1/4 + 1/4 + 1/4 = 0.75 (75 percent)

We therefore have a majority of criteria of 75 percent in favor of R3 with respect to R2 .

Iterating the same procedure for other pairs or organizations, we obtain the concordance
matrix of Table 4.26.

Table 4.26 Concordance Matrix

R1 R2 R3 R4

R1 1 1 0.50
R2 0 0.25 0.25
R3 0 0.75 0.25
R4 0.50 0.75 0.75

The concordance indicator in Table 4.26 varies between 0 and 1. It is equal to 1 only if
there is unanimity or a majority of criteria that are 100 percent in favor of Ri with respect

to R j . In order to decide on the superiority of one retail company with respect to another,

the decision maker should set a concordance threshold C*. Generally, it is chosen to be a
majority greater than or equal to 75 percent (simple majority tightened), that is: C* ≥
0.75 (75 percent).

Taking into account the database of Table 4.26 and the concordance threshold C* we
have the following concordance test:

1 if C ( Ri ; R j ) ≥ C*
Tc ( Ri , R j ) =

0 if otherwise

The results of concordance test are shown in Table 4.27.

 80

Table 4.27 Outcomes of Concordance Test

R1 R2 R3 R4
R1 1 1 0
R2 0 0 0
R3 0 1 0
R4 0 1 1

The Electre I methodology considers another step: the construction of discordance test in
order to take into account of an excessive “distance” (dissimilarity) between the scores
ATT j ( R j ) and ATTi ( Ri ). The discordance test Td is fulfilled if the distance:

D ( R j , Ri ) = max [ ATT j ( R j ) - ATTi ( Ri )];

does not exceed discordance threshold D*. In order to simplify the analysis we suppose
that the test of discordance is fulfilled by all pairs ( Ri , R j ).

The ideas behind the test of discordance may be summarized as follows. The outranking
methods consists in examining the validity of the proposition “a outranks b”. The
concordance test “measures” the arguments in favor of saying so, but there may be
arguments strongly against that assertion (discordant criteria). The “discordant voices”
can be viewed as vetoes.

There is a veto against declaring that a outranks b if b is so much better than a on same
criterion that it becomes disputable or even meaningless to pretend that a might be better
overall than b. The logic of the test of discordance is quite similar to that on which
statistical tests are based. Here as well, conventional levels of significance (like the
famous 5 percent rejection intervals) are widely used. The decision maker decides the
discordance threshold, that is he decides whether a hypothesis must be rejected or not.
 81

If the discordance test is not passed alternatives a and b are said incomparable. They are
too different to be compared. For instance, the comparison of a Rolls-Royce with a small
cheap car is meaningless because the Rolls-Royce is incomparably better on many
criteria but is also incomparably more expensive. Another example, concerns the
comparison of projects that involve the risk of loss of human life. Should one prefer a
more expensive project with a lower risk or a less expensive one with higher risk? One
may advance that the projects are too different to be compared.

Taking into account both the concordance and the discordance test we construct a binary
outranking relation S. Given two generic retail companies ( Ri , R j ) we say that Ri

outranks R j if and only if the concordance test and the discordance test are fulfilled, that

is:

Ri S R j if and only if Tc and Td fulfilled.

Because we suppose that the discordance test is passed by all pairs ( Ri , R j ) the

outranking relation S coincides with the outcomes of concordance test of Table 4.27.
That is:

Ri S R j if and only if Tc fulfilled.

The relation S may be represented by the graph of Illustration and Figure 4.1.
 82

Illustration 4.1 Graph of S from Table 4.27 (C* ≥ 75 percent)

Figure 4.1 Graph of S from Table 4.27 (C* ≥ 75 percent)

R1
Tesco
R3 R2
R4 Giant Mydin
Giant

Now, R3 is the “ 2nd worst in class” and R2 is the “worse in class”. But R1 and R4 are

not comparable structures: neither R3 outranks R4 nor the opposite. This is another
important difference arising from the refusal of the ordering based on the average
benchmarking.
 83

4.6 BENCHMARKING ON CUSTOMER SATISFACTION

Benchmarking has consequences which are beyond the process itself: it reforms all the
levels of the company; modifies the process of manufacture of the product leads(drives);
also reforms the hierarchical organization of the company, the product itself, and the state
of mind of the employees.

Through benchmarking, we get better understanding of the customer because it is based

on the reality of the market estimated in an objectivist way and a better economic
planning of the purposes and the objectives to achieve in the company for they are
centered on what takes place outside controlled and mastered. The management will get a
better increase of the productivity, resolution of the real problems and understanding of
the processes and what they produce.

4.6.1 Product Benchmarking

Table 4.28 Product Benchmarking towards customer satisfaction

Product Benchmarking

4.60 4.42
4.40
4.20 4.10
M ean

4.00 3.91 3.90

3.80
3.60
R1 (Tesco) R2 (Mydin) R3(Carrefour) R4 (Giant)

We conclude that Tesco rank the highest on customer satisfaction towards product and it
shall be the benchmark or guiding star for other retail stores. Mydin, Carrefour and Giant
need to benchmark Tesco’s product strategy and improve to compete in the market.
 84

4.6.2 Price Benchmarking

Table 4.29 Price Benchmarking towards customer satisfaction

Price Benchmarking

4.10 4.02
4.00 3.94
3.90
3.80 3.73
Mean

3.70 3.60
3.60
3.50
3.40
3.30
R1 (Tesco) R2 (Mydin) R3(Carrefour) R4 (Giant)

We conclude that Giant rank the highest on customer satisfaction towards price and it
shall be the benchmark or guiding star for other retail stores.

It proofs that Giant’s “Everyday low price strategy” is a success. Tesco rank the second
with mean value of 3.94, still in the competition mood with Giant. Mydin and Carrefour
need to benchmark Giant’s pricing strategy and improve to compete in the market.
 85

4.6.3 Promotion Benchmarking

Table 4.30 Promotion Benchmarking towards customer satisfaction

Promotion Benchmarking

4.10 3.97
4.00
3.90 3.76
3.80 3.71
3.70
Mean

3.60
3.50 3.42
3.40
3.30
3.20
3.10
R1 (Tesco) R2 (Mydin) R3(Carrefour) R4 (Giant)

We conclude that Tesco rank the highest again on customer satisfaction towards
promotion and it shall be the benchmark or guiding star for other retail stores.

Tesco promotion strategy is well organized and effective; customers are aware of the
latest promotion from the newspaper, flyers and promotion booklet.

Giant and Carrefour are a little bit behind with the mean value of 3.76 and 3.71. Mydin
rank the last, it need to benchmark Tesco’s promotion strategy, revise on its promotion
strategy and improve to compete in the competitive market.
 86

4.6.4 Place/Distribution Benchmarking

Table 4.31 Place/ Distribution Benchmarking towards customer satisfaction

Place/Distribution Benchmarking

4.50 3.90 3.92

4.00 3.70
3.50 2.95
3.00
2.50
Min

2.00
1.50
1.00
0.50
0.00
R1 (Tesco) R2 (Mydin) R3(Carrefour) R4 (Giant)

We conclude that Tesco rank the highest on customer satisfaction towards place and
distribution and it shall be the benchmark or guiding star for other retail stores.

The other three retail stores having very close mean value. Meaning the customer
satisfaction towards place and distribution in four retail stores are well perceived.

From 4.6.4, we conclude that Giant rank the second, followed by Carrefour and Mydin.
They are to benchmark Mydin’s, and improve on its place and distribution strategy.
 87

4.7 CONCLUSION

Outranking methods make it possible to deal with multicriteria benchmarking and avoid
the shortcomings of the traditional methods based on the average aggregate mono-
criterion. If applied to the measurement of learning capability, they are a complete
alternative to the traditional approach. They can support the behavioral theory of
organizational analysis initiated by H. Simon (Biggiero and Laise, 2003a, b). In fact, even
though H. Simon does not explicitly discuss the problem of criteria multiplicity nor does
he apply outranking methods, the behavioral theory is nonetheless perfectly comparable
with them. The “levels of aspirations” hypothesized by Simon can be associated with the
threshold of concordance and discordance test.

The lower the threshold assigned to the concordance test the lower the aspiration levels
will be and hence the more the satisfying solutions will be. Outranking methods thus
constitute a new and robust base on which to found the entire edifice of the behavioral
theory of benchmarking applied to measurement of learning capability. They are a valid
alternative to traditional methods, since they are equally rational and rigorous without
suffering from its shortcomings and application limitations.
 88

CHAPTER V

SUMMARY, CONCLUSION AND IMPLICATION

Global marketers ‘‘usually find that customer needs are much more in common than they
might have seemed’’ (Yip, 2003, p. 214).

There is an increasing emphasis on customer satisfaction as a means of affecting store-

choice behavior (e.g., Weir, 2001) and although little research exists to substantiate it, it
seems intuitive that satisfaction would also affect customer share.

After taken a close look into the results, findings and discussions, the following SWOT
analysis was born in the extended abstract technical paper.

5.1 SWOT Analysis

5.1.1 Strength

Multi-criteria decision-making (MCDM) is one of the most widely used decision

methodologies in the sciences, business, government and engineering worlds. MCDM
methods can help to improve the quality of decisions by making the decision-making
process more explicit, rational, and efficient. It is not a coincidence that a simple search
(for instance, by using google.com) on the web under the key words “multi criteria
decision making” returns more than one million hits.
 89

In a decisional process the making of choices derives from complex hierarchical

comparisons among alternative options, which are often based on conflictual criteria, a
large number of external variables plays a relevant role in orienting decision-making. The
strength of multi-criteria decision-making methods (MDMM) are to aid decision-makers
to be consistent with fixed ‘general’ objectives; to use representative data and transparent
assessment procedures and to help the accomplishment of decisional processes, focusing
on increasing its efficiency. The Electre I method, in which the criteria of the set of
decisional alternatives are compared by means of a binary relationship, defined as
‘outranking relationship’, are more ‘flexible’ than the ones based on a multi-objective
approach.

5.1.2 Weakness

An intriguing problem with decision-making methods which rank a set of alternatives in

terms of a number of competing criteria is that oftentimes different methods may yield
different answers (rankings) when they are fed with exactly the same numerical data.
Thus, the issue of evaluating the relative performance of such methods is naturally raised.
This, in turn, raises the question how can one evaluate the performance of such methods?
Since it is practically impossible to know which one is the best alternative for a given
decision problem, some kind of testing procedures need to be determined.

5.1.3 Opportunity

In this paper, a new approach has been carried out for the use of the ELECTRE:
ELimination Et Choix Traduisant la REalité (ELimination and Choice Expressing the
REality) model in marketing mix selection. This work shows that ELECTRE can be used
successfully in deriving a consensus ranking in benchmarking to select the best in class.
 90

5.1.4 Threat

In outranking approaches, the inaccuracy of the data can be modelled through the
indifference and preference threshold (so-called pseudocriteria). Of course, threshold
must be assessed for each criterion and for each problem separately.

5.2 CONCLUSION

It is not simply enough to identify the strengths, weaknesses, opportunities, and threats of
the electre outranking method. In applying the SWOT analysis it is necessary to minimize
or avoid both weaknesses and threats. Weaknesses should be looked at in order to convert
them into strengths. Likewise, threats should be converted into opportunities. Lastly,
strengths and opportunities should be matched to optimize the potential of a firm.
Applying SWOT in this fashion can obtain leverage for a company (Marketing Strategy,
1998).

Sensitivity analysis showed that, in general, the project rankings were considerably more
sensitive to changes in the performances than they were to changes in the thresholds or
weights. This is helpful and means that within a relatively wide band of preference, the
same projects are considered important. Further, it requires the individual project
sponsors to make the effort and ensure that the performance data is both accurate and
defensible.

As can be seen, the marketing manager should have rough outline of potential marketing
activities that can be used to take advantage of capabilities and convert weaknesses and
threats. However, at this stage, there will likely be many potential directions for the
managers to pursue. Due to the limited resources that most firms have, it is difficult to
accomplish everything at once. The manager must prioritize all marketing activities and
develop specific goals and objectives for the marketing plan (Contemporary Marketing,
1992).
 91

5.3 DIRECTIONS FOR FURTHER RESEARCH

The relationships between customer satisfaction and behavioral outcomes are probably
much more complex than initially assumed. This study has looked only at a limited part
of the puzzle of how customer satisfaction translates into behavioral outcomes. In what
way consumer characteristics moderate the relationship between satisfactions and
repurchase behavior is likely to be contingent on the product or service category and the
buying and usage process for that category. Other consumer characteristics not included
in this study, such as a propensity for variety seeking behavior or a recreational shopping
orientation, could potentially be important in many retail industries. Further research on
how the effects of satisfaction on behavior is moderated by different consumer
characteristics would advance customer satisfaction research as well as be of great
managerial significance.

5.4 SCOPE AND LIMITATION OF THE STUDY

The setting selected for conducting this marketing research was focus only on three
multinational retail stores and a homegrown retail store due to time constrain. Field
researches were conduct in Tesco Stores (Malaysia) Sdn Bhd, Carrefour of Magnificent
Diagraph Sdn. Bhd., Giant of Dairy Farm International, and the homegrown retail store,
Mydin Mohamed Holdings Berhad.

The collection of primary data was based on a survey of 856 respondents who visit each
respective retail outlets, the number in the sample limited due to the restrictions of time to
complete the project and resources to support it.
 92

EXTENDED ABSTRACT
Technical Paper
 93

THE IMPACT OF MARKETING MIX ON CUSTOMER SATISFACTION:

A CASE STUDY DERIVING CONSENSUS RANKINGS
FROM BENCHMARKING

DR. MOHAMAD NASIR SALUDIN, AMY POH AI LING, CHEN ZHI SYIN,
IVAN LEONG JENN JIANG, TAN AI LEE, WONG XIAO WEI

ABSTRACT

This paper takes a cautionary stance to the impact of marketing mix on customer satisfaction, via a case study deriving consensus
rankings from benchmarking on retail stores in Malaysia. Field research was conducted in Tesco Stores (Malaysia) Sdn Bhd,
Carrefour of Magnificent Diagraph Sdn. Bhd., Giant of Dairy Farm International, and the homegrown retail store, Mydin Mohamed
Holdings Berhad. With increasing globalization, local retailers find themselves having to compete with large foreign players by
targeting niche markets. We build a model in deriving consensus rankings from benchmarking base on the marketing mix model, the
traditional marketing paradigm, embodied in the well-known Marketing Mix frame work proposed by Borden and popularized as the
4Ps (Product, Price, Place, Promotion) by McCarthy. The marketing mix is the lens through which the contemporary customer
perceives value in retail stores on 4Ps is examined. From the model, we analyze what is the best practice among the four elements
derived from a consensus ranking, a ranking method to identify the best in class. The analysis will mainly depend on the outcome of
what customer perceive towards the four marketing tactics. This paper discusses the introduction and use of a methodology for project
ranking in Retail store and, in particular, illustrates the use of a particular solution method called ELECTRE. A goal of this research
was to introduce a more objective methodology for the multicriteria outranking methodology as an alternative and more sustainable
approach for benchmarking analysis in marketing sector.

Keywords: Marketing mix, Customer satisfaction, Retailing, Benchmarking, Multi-criteria decision-making, ELECTRE methods

ABSTRAK

Kertas ini yang merupakan satu kajian kes pemerolehan darjat konsensus daripada penandarasan telah berjaya membukitkan bahawa
terdapatnya kesan campuran pemasaran terhadap kepuasan pelanggan. Kajian penyelidikan telah dijalankan di Tesco Stores (Malaysia)
Sdn Bhd, Carrefour of Magnificent Diagraph Sdn. Bhd., Giant of Dairy Farm International dan emporium tempatan, Mydin Mohamed
Holdings Berhad. Dengan pembangunan globalisasi yang pesat, syarikat peruncitan tempatan terpaksa bersaing dengan pelabur asing.
Sehubungan itu, satu model telah dibangunkan untuk memperoleh darjat konsensus daripada penandarasan berdasarkan model
campuran pemasaran, yang merupakan paradigma pemasaran traditional dengan mempraktiskan 4P iaitu produk, harga, promosi dan
tempat/pengedaran. Daripada model campuran pemasaran, kami telah membina hubungan analitik antara kepuasan pelanggan dengan
model campuran pasaran iaitu 4Ps dan seterusnya penandarasan daripadanya serta menjana respon yang positif daripada penilaian
yang diperoleh. Kertas ini memperbincangkan penggunaan kaedah pemerolehan darjat di syarikat peruncitan serta mempaparkan
kebagusan kaedah penyelesaian Electre.

Katakunci: Campuran pemasaran, kepuasan pelanggan, peruncitan, menandaras, pembuatan keputusan multi-criteria, kaedah
ELECTRE
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1. Introduction

To excel and flaunt as a market leader in an ultramodern era and a globalize world where we barely can
catch up with the changes, the organizations must strive not only to improve but also to commit into a
continuous improvement climate, to harvest from its marketing strategies especially marketing mix model,
benchmarking and company quality policy. Malaysia retail industry has been showing upward trends for
quite some time. Growth in this sector is particularly spurring by the changing buying patterns of
consumers and rising per capita income in the country.

Ranking and selecting projects is a relatively common, yet often difficult task. It is complicated because
there is usually more than one dimension for measuring the impact of each project and more than one
decision maker. This paper considers a real application of project selection for the marketing mix element,
using an approach called ELECTRE.

The ELECTRE method has several unique features not found in other solution methods; these are the
concepts of outranking and indifference and preference thresholds. The ELECTRE method is explained and
applied to the project selection problem using SPSS (Statistical Package for the Social Sciences)
application. Results show that ELECTRE was well received by the decision makers and, importantly,
provided sensible and straightforward rankings.

Our contribution is to show the potential in Marketing mix model in deriving a consensus ranking in
benchmarking. According to the feedback from the respondents, we dynamically rank out the best element
to be benchmark.

The decision problem faced by management has been translated into our market research problem in the
form of questions that define the information that is required to make the decision and how this information
obtained. Thus, in this paper, the decision problem regarding the marketing mix four Ps is translated into a
research problem. The corresponding research problem is to assess whether the market would accept the
consensus rankings derive from benchmarking result from the impact of marketing mix on customer
satisfaction using a multi-criteria decision making outranking methodology.

2. Literature Review

The decision problem faced by management has been translated into our market research problem in the
form of questions that define the information that is required to make the decision and how this information
obtained. Thus, in this paper, the decision problem regarding the marketing mix four Ps is translated into a
research problem. The corresponding research problem is to assess whether the market would accept the
consensus rankings derive from benchmarking result from the impact of marketing mix on customer
satisfaction using a multi-criteria decision making outranking methodology.

The project ranking problem is, like many decision problems, challenging for at least two reasons. First,
there is no single criterion in marketing mix model which adequately captures the effect or impact of each
element; in other words, it is a multiple criteria problem. Second, there is no single decision maker; instead
the project ranking requires a consensus from a group of decision makers. (Henig and Buchanan and
Buchanan et al.)

Henig and Buchanan and Buchanan et al. have argued that good decisions come from good decision
process and suggest that where possible the subjective and objective parts of the decision process should be
separated. This separation enables the decision making process to move away from being unnecessarily
subjective and toward a more objective orientation. A decision problem can be conceived as comprising
two components; a set of objectively defined alternatives and a set of subjectively defined criteria. The
relationship between the alternatives and the criteria is described using attributes, which are the objective
and measurable features of alternatives, attributes form the bridge between the alternatives and the criteria.
In Illustration 3.1 the alternative-attribute-criteria mappings are illustrated.
 95

Outranking relations, in most methods, are built using a concordance-discordance principle. More
complexity and flexibility are required in the processing of efficient alternatives. And it is the solutions, not
the criteria, which the marketing management is interested in.

Although it is not clearly stated in Simon (1977), we think that one of the main functions of review is
learning and we believe that the best support that could be provided to organizations would be for learning.
In many cases, we have observed that decision is treated as a one shot game whereas most decisions are
more or less repetitive. Human memory has some known biases and, for that reason, cannot accurately
analysis decisions ex post.

However, very little seems to have been done in this domain up to now. There are many possibilities
related to learning, review and ex post analysis. First, in some sense, a decision maker can learn the effect
of the assignment he has given to the weights. Similarly, in outranking methods, the decision maker can
learn to modify concordance and discordance factors (Roy and Skalka, 1985; Vetschera, 1986).

Most of the failures arise because one does not take into account that a decision maker makes a decision
according to a set of items (e.g., his preferences) that does not intervene explicitly in the decision making
process itself but constrains it. This is what we call contextual knowledge.

Let us also remind that, in the framework of decision making, due to the prominent look-ahead component
(Pomerol, 1995), the subjective and contextual data play an important role. Moreover, due to the
incompleteness of the model, especially during the evaluation phases (Lévine and Pomerol, 1995), among
the elements facilitating the cooperation are explanations and contextual knowledge, and the need to make
them explicit and shared both by the system and the user (Brezillon and Abu-Hakima, 1995) and Brézillon
(1996).

3. Research Methodology

3.1 Recognizance Survey

A recognisance survey was carried out in order to locate the most suitable site for the research. The section
take into consideration sites in Selangor area. Selangor is Malaysia's most populous state, with the nation's
biggest conurbation, the Klang Valley. Selangor's geographical position in the center of Peninsular
Malaysia contributed to the state's rapid development as Malaysia's transportation and industrial hub.
Selangor has a population of 4,736,100 (2005 estimate); the state's ethnic composition consisted of Malays
41%, Chinese 37%, Indians 19% and other ethnic groups 3%. The selected data collection sites are Tesco
Saujana Impian Kajang, Carrefour Alamanda Putrajaya, Giant Bukit Tinggi and Mydin Kajang.

3.2 Research Instrument

The research objectives and frame of reference was defined beforehand, including the questionnaire's
context of time, budget, manpower, intrusion and privacy. A non-comparative Likert scaling techniques
was used. The level of measurement of a variable in mathematics and statistics is a classification that was
proposed in order to describe the nature of information contained within numbers assigned to objects and,
therefore, within the variable.

The questionnaire is divided into 4 sections: customer information, marketing mix model, customer
perception and motivating factor. Variables that are measured only nominally are also called categorical
variables. The demography variables measured at a nominal level in Section 1 include gender, ethnic,
marital status, age and how often do the respondents shop at the specific retail store.

A typical test item in a Likert scale is a statement. The respondent is asked to indicate his or her degree of
agreement with the statement or any kind of subjective or objective evaluation of the statement. In Section
2, a six-point scale is used in a forced choice method where the middle option of "Neither agree nor
 96

disagree" is not available. The questions comprise four elements such as product, price, promotions,
place/distribution; six questions are allocated for each of the 4Ps.

Section 3 evaluates customer’s perception using the same scale as practice in Section 2 where Section 4,
the last part of the questionnaire measure the factor that motivates respondents the most to patronize the
specific retail store using the nominal measurement. We choose simple random sampling in the research
for conceptually; simple random sampling is the simplest of the probability sampling techniques. It requires
a complete sampling frame, which may not be available or feasible to construct for large populations. Even
if a complete frame is available, more efficient approaches may be possible if other useful information is
available about the units in the population.

3.3 Illustration of Research Framework

Illustration 1 Attribute – 4P’s – Retail Stores Mapping

The illustration of Attribute - 4P’s - Retail Stores Mapping was built to sprout a better understanding on our
study framework. It elucidates the main idea of how we determine the targeted attribute of the 4Ps and
generate it in the questionnaire to meet out objectives. The relationship between the marketing mix, 4ps
with the attributes lies in each P element were elucidate clearly linking to the four selected retail stores,
namely Carrefour, Giant, Tesco and Mydin.
 97

Once everybody agrees about the family of criteria, assuming that the alternatives are known, it remains to
complete the decision matrix, i.e., to evaluate each alternative according to the criteria. This evaluation
theoretically depends on the posterior aggregation procedure, but this fact is generally ignored by the
designers so that the assessment is generally independent of the aggregation procedure.

The system can support a direct assessment method, showing graphically to the decision making, the
position of the various alternatives or transforming a pair wise comparison into a numerical (normalized)
scale as, for example, in the so-called "Analytical Hierarchical Process"(AHP) (Saaty, 1980).

In the framework of multi-attribute utility, the utilities of a given alternative, regarding each attribute, are
jointly cardinal. They have consequently to be jointly evaluated (Pomerol & Barba-Romero, 1993). In this
case, due to the difficulty either to verify the probabilistic independence or to help the decision maker to
jointly evaluate the alternatives by solvability or by the mid-preference point method, the support of a
Multicriteria Decision Making methodology should be very useful.

3.4 Data Collection

The study was conducted in a Selangor area, the most populous state in Malaysia with approximately 4.19
million residents. At the time of the study, four retail stores were chosen as the research sites. The data
were collected by means of questionnaire. Households were the target of the research during the surveyed
period. First appointment was conducted with the personal in-charge in each retail store to request
cooperation and approval for data collection and survey respond via formal letters from the Department of
Mathematical Sciences, Faculty of Science and technology, National University of Malaysia.

Field research was conducted in Tesco Saujana Impian Kajang, Carrefour Alamanda Putrajaya, Giant Bukit
Tinggi and Mydin Mart Kajang. A simple random sample of 214 household’s respondents was obtained
from each of the four retail stores; sum up a total of 856 respondents data.

In our framework, we can think about objectives as aspiration levels defined for each criterion or
alternately as very general goals. We manage to expose the relationship between the marketing mix, 4ps
with the attributes lies in each P, it was elucidate clearly link to the four selected retail stores.

The retail stores management uses the information so obtained to understand the needs of individuals in the
marketplace, and to create strategies and marketing plans. The process of measurement is central to
quantitative research because it provides the fundamental connection between empirical observation and
mathematical expression of quantitative relationships.

3.5 Data Analysis and Interpretation

The retail market place promotes continuous improvement to survive in a turbulent environment. It does so
by creating, acquiring and transferring knowledge and modifying its behavior to reflect new knowledge.
For that, benchmarking is the search for industry best practices that leads to superior performance (Camp,
1989).

The benchmarking measurement of the retail stores considers a set of indicators and for this reason assumes
the configuration of a multi-criteria analysis. The literature on retail stores and marketing mix model has
identified four major underlying criteria essential to take place in the market place. They are as follows:

ATT1 : Product Attribute

ATT2 : Price Attribute
ATT3 : Promotions Attribute
ATT4 : Place/Distribution Attribute
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Multi-criteria benchmarking analysis of comparing the four retail stores (Tesco, Carrefour, Giant and
Mydin) poses many problems. Since the “dominance” relation is usually not verified, there is not a “best in
class organization”. Generally, an organization will show better performance on the basis of some
indicators and worse performance on the basis of some others: “there is no single performance management
enterprise system which is best in class across all areas” (Sharif, 2002, p. 76). However, in the absence of a
superior “best in class” dominating organization, one cannot “search for industry best practice that leads to
superior performance”, and thus cannot apply benchmarking analysis as advocated.

The “best in class” is the organization with the maximum averaged value, computed by averaging the
scores assigned to all the organizations on the basis of all the criteria. Moreover, this paper illustrates the
advantages, in terms of flexibility and realism, connected to the application of the multi-criteria outranking
methodology as an alternative and more suitable approach for benchmarking analysis of retail stores. That
is, the aim of this paper is to show the contribution of the multi-criteria outranking methodology to the
valuation of the retail stores in the market place in terms of benchmarking analysis. It enables the
benchmarking of organizational learning capability without the necessity of an aggregate indicator obtained
by averaging all scores assigned to the organizations on the basis of the different criteria.

Consider four retail stores:

R1 : Tesco
R2 : Mydin
R3 : Carrefour
R4 : Giant

This averaging methodology is the peculiarity and the main disadvantage of the traditional approach, that is,
the aim of this chapter is to show the contribution of the multi-criteria outranking methodology to the
valuation of the impact of marketing mix on customer satisfaction of the four retail stores (Tesco, Carrefour,
Giant, Mydin) in terms of benchmarking analysis. The application of outranking approach enables, unlike
the traditional analysis, the benchmarking of the impact of marketing mix without the necessity of an
aggregate indicator obtained by averaging all scores assigned to the organizations on the basis of the
different criteria. Finally, the following section discusses the contribution of the outranking multi-criteria
methodology to the benchmarking analysis of the impact of marketing mix on customer satisfaction.

3.6 Benchmarking and Outranking-Satisfying Methodology

The outranking methodology is a family of algorithms developed by Operational Research (Roy, 1985;
Vincke, 1992; Roy and Bouyssou, 1993; Pomerol and Barba-Romero, 2000). Of these, Electre I method
will be introduced here. The input of the Electre I method is represented by a multi-criteria matrix as in
Table 1, surrounded by a line containing the weights that the decision making assigns to each criterion.

Table 1 Multicriteria matrix (Electre I)

ATT1 ATT2 (Price) ATT3 ATT4

(Product) (Promotion) (Place/Distribution)
R1 (Tesco) 4.42 3.94 3.97 3.90
R2 (Mydin) 3.91 3.73 3.42 2.95
R3 (Carrefour) 4.10 3.60 3.71 3.70
R4 (Giant) 3.90 4.02 3.76 3.92
Weight 1/4 1/4 1/4 1/4
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From Table 1, the retail stores’ positioning is generated and shown in the table below:

Table 2 Retail stores Positioning Table

ATT1 ATT2 ATT3 ATT4

(Product) (Price) (Promotion) (Place/Distribution)

1st Tesco Giant Tesco Giant

2nd Carrefour Tesco Giant Tesco
3rd Mydin Mydin Carrefour Carrefour
4th Giant Carrefour Mydin Mydin

Table 3 Retail Stores’ Ranking Table

Attributes Retail Stores’ Ranking

1st 2nd 3rd 4th

ATT1 (Product) Tesco Carrefour Mydin Giant

ATT2 (Price) Giant Tesco Mydin Carrefour
ATT3 (Promotion) Tesco Giant Carrefour Mydin
ATT4 (Place/Distribute) Giant Tesco Carrefour Mydin

Average (
RN ) = [ ATT1 ( RN ) + ATT2 ( RN ) + ATT3 ( RN ) + ATT4 ( RN )]/4

R R
Now, let us consider R2 and 3 . Taking into account the values in Table 1 it is evident that 3 is better
than R2 for three criteria out of four (Marketing Model 4Ps). That is:

ATT1 ( R3 ) = 4.10 > ATT1 ( R2 ) = 3.91

ATT3 ( R3 ) = 3.71 > ATT3 ( R2 ) = 3.42
ATT4 ( R3 ) = 3.70 > ATT4 ( R2 ) = 2.95

Three criteria {1, 3, and 4} agree in considering

R3 better than R2 . Only one criterion {2} considers R2

better than
R3 . That is:

ATT2 ( R2 ) = 3.73 > ATT2 ( R3 ) = 3.60

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Interpreting the same procedure for all the other pairs of retail companies will obtain the Table 4.

Table 4 Multicriteria Matrix

ATT1 ATT2 ATT3 ATT4

(Product) (Price) (Promotion) (Place/Distribution)

R1 (Tesco) 4.42 3.94 3.97 3.90

R2 (Mydin) 3.91 3.73 3.42 2.95
R3 (Carrefour) 4.10 3.60 3.71 3.70
R4 (Giant) 3.90 4.02 3.76 3.92
Weight 1/4 1/4 1/4 1/4

c
Table 5 Matrix of Concordance Subsystems ( J )

R1 R2 R3 R4
R1 {1,2,3,4} {1,2,3,4} {1,3}
R2 Ø {2} {1}
R3 Ø {1,3,4} {1}
R4 {2,4} {2,3,4} {2,3,4}

The generic element J c ( Ri , R j ) of the matrix of Table 5 is given by:

J c ( Ri , R j ) = {j ∈ J = ATTi ( Ri ) ≥ ATT j ( R j )}; where: J = {1, 2, 3, 4}

Taking into account the weights assigned to the various criteria, a concordance index can be calculated for

each pair of company (

Ri , R j ):

C(
Ri ; R j ) = ∑ j∈Jc K j ;

Kj jth criterion.
Where: is the weight assigned to the

For example, for the pair (

R3 , R2 ) we have:

C(
R3 , R2 ) = K1 + K 3 + K 4 = 1/4 + 1/4 + 1/4 = 0.75 (75 percent)

R R
We therefore have a majority of criteria of 75 percent in favor of 3 with respect to 2 . Iterating the same
procedure for other pairs or organizations, we obtain the concordance matrix of Table 6.
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Table 6 Concordance Matrix

R1 R2 R3 R4

R1 1 1 0.50
R2 0 0.25 0.25
R3 0 0.75 0.25
R4 0.50 0.75 0.75

The concordance indicator in Table 6 varies between 0 and 1. It is equal to 1 only if there is unanimity or a
R R
majority of criteria that are 100 percent in favor of i with respect to j . In order to decide on the
superiority of one retail company with respect to another, the decision maker should set a concordance
threshold C*. Generally, it is chosen to be a majority greater than or equal to 75 percent (simple majority
tightened), that is: C* ≥ 0.75 (75 percent).

Taking into account the database of Table 6 and the concordance threshold C* we have the following
concordance test:

1 if C (
Ri ; R j ) ≥ C*
Tc ( Ri , R j ) =
0 if otherwise

The results of concordance test are shown in Table 7.

Table 7 Outcomes of Concordance Test

R1 R2 R3 R4
R1 1 1 0
R2 0 0 0
R3 0 1 0
R4 0 1 1

The Electre I methodology considers another step: the construction of discordance test in order to take into
ATT j R j ATTi ( Ri ). The
account of an excessive “distance” (dissimilarity) between the scores ( ) and

discordance test
Td is fulfilled if the distance:

R j Ri ATT j R j ATTi Ri
D( , ) = max [ ( )- ( )];

does not exceed discordance threshold D*. In order to simplify the analysis we suppose that the test of

discordance is fulfilled by all pairs (

Ri , R j ).

The ideas behind the test of discordance may be summarized as follows. The outranking methods consists
in examining the validity of the proposition “a outranks b”. The concordance test “measures” the arguments
in favor of saying so, but there may be arguments strongly against that assertion (discordant criteria). The
“discordant voices” can be viewed as vetoes.
 102

There is a veto against declaring that a outranks b if b is so much better than a on same criterion that it
becomes disputable or even meaningless to pretend that a might be better overall than b. The logic of the
test of discordance is quite similar to that on which statistical tests are based. Here as well, conventional
levels of significance (like the famous 5 percent rejection intervals) are widely used. The decision maker
decides the discordance threshold, that is he decides whether a hypothesis must be rejected or not.

If the discordance test is not passed alternatives a and b are said incomparable. They are too different to be
compared. For instance, the comparison of a Rolls-Royce with a small cheap car is meaningless because
the Rolls-Royce is incomparably better on many criteria but is also incomparably more expensive. Another
example, concerns the comparison of projects that involve the risk of loss of human life. Should one prefer
a more expensive project with a lower risk or a less expensive one with higher risk? One may advance that
the projects are too different to be compared.

Taking into account both the concordance and the discordance test we construct a binary outranking
R R
relation S. Given two generic retail companies ( i , j ) we say that
Ri outranks R j if and only if the
concordance test and the discordance test are fulfilled, that is:

Ri S R j if and only if Tc and Td fulfilled.

Because we suppose that the discordance test is passed by all pairs (

Ri , R j ) the outranking relation S
coincides with the outcomes of concordance test of Table 7. That is:

Ri S R j if and only if Tc fulfilled.

The relation S may be represented by the graph of Figure 1.

Figure 1 Graph of S from Table 4.27 (C* ≥ 75 percent)

R1
Tesco
R3 R2
Giant Mydin
R4
Giant

Now,
R3 is the “ 2nd worst in class” and R2 is the “worse in class”. But R1 and R4 are not comparable
R
structures: neither 3 outranks R4 nor the opposite. This is another important difference arising from the
refusal of the ordering based on the average benchmarking.
 103

3.7 Benchmarking On Customer Satisfaction

Benchmarking has consequences which are beyond the process itself: it reforms all the levels of the
company; modifies the process of manufacture of the product leads(drives); also reforms the hierarchical
organization of the company, the product itself, and the state of mind of the employees.

Through benchmarking, we get better understanding of the customer because it is based on the reality of
the market estimated in an objectivist way and a better economic planning of the purposes and the
objectives to achieve in the company for they are centered on what takes place outside controlled and
mastered. The management will get a better increase of the productivity, resolution of the real problems
and understanding of the processes and what they produce.

Table 8 Product Benchmarking towards customer satisfaction

Product Benchmarking

4.60 4.42
4.40
4.20 4.10
M ean

4.00 3.91 3.90

3.80
3.60
R1 (Tesco) R2 (Mydin) R3(Carrefour) R4 (Giant)

We conclude that Tesco rank the highest on customer satisfaction towards product and it shall be the
benchmark or guiding star for other retail stores. Mydin, Carrefour and Giant need to benchmark Tesco’s
product strategy and improve to compete in the market.

Table 9 Price Benchmarking towards customer satisfaction

Price Benchmarking

4.10 4.02
4.00 3.94
3.90
3.80 3.73
Mean

3.70 3.60
3.60
3.50
3.40
3.30
R1 (Tesco) R2 (Mydin) R3(Carrefour) R4 (Giant)

We conclude that Giant rank the highest on customer satisfaction towards price and it shall be the
benchmark or guiding star for other retail stores. It proofs that Giant’s “Everyday low price strategy” is a
success. Tesco rank the second with mean value of 3.94, still in the competition mood with Giant. Mydin
and Carrefour need to benchmark Giant’s pricing strategy and improve to compete in the market.
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Table 10 Promotion Benchmarking towards customer satisfaction

Promotion Benchmarking

4.10 3.97
4.00
3.90 3.76
3.80 3.71
Mean 3.70
3.60
3.50 3.42
3.40
3.30
3.20
3.10
R1 (Tesco) R2 (Mydin) R3(Carrefour) R4 (Giant)

We conclude that Tesco rank the highest again on customer satisfaction towards promotion and it shall be
the benchmark or guiding star for other retail stores. Tesco promotion strategy is well organized and
effective; customers are aware of the latest promotion from the newspaper, flyers and promotion booklet.
Giant and Carrefour are a little bit behind with the mean value of 3.76 and 3.71. Mydin rank the last, it need
to benchmark Tesco’s promotion strategy, revise on its promotion strategy and improve to compete in the
competitive market.

Table 11 Place/ Distribution Benchmarking towards customer satisfaction

Place/Distribution Benchmarking

4.50 3.90 3.92

4.00 3.70
3.50 2.95
3.00
2.50
Min

2.00
1.50
1.00
0.50
0.00
R1 (Tesco) R2 (Mydin) R3(Carrefour) R4 (Giant)

We conclude that Tesco rank the highest on customer satisfaction towards place and distribution and it
shall be the benchmark or guiding star for other retail stores. The other three retail stores having very close
mean value. Meaning the customer satisfaction towards place and distribution in four retail stores are well
perceived. From table 11, we conclude that Giant rank the second, followed by Carrefour and Mydin. They
are to benchmark Mydin’s, and improve on its place and distribution strategy.

4. Discussion on SWOT analysis

4.1 Strength

Multi-criteria decision-making (MCDM) is one of the most widely used decision methodologies in the
sciences, business, government and engineering worlds. MCDM methods can help to improve the quality
of decisions by making the decision-making process more explicit, rational, and efficient. It is not a
coincidence that a simple search (for instance, by using google.com) on the web under the key words
“multi criteria decision making” returns more than one million hits. In a decisional process the making of
choices derives from complex hierarchical comparisons among alternative options, which are often based
on conflictual criteria, a large number of external variables plays a relevant role in orienting decision-
 105

making. The strength of multi-criteria decision-making methods (MDMM) are to aid decision-makers to be
consistent with fixed ‘general’ objectives; to use representative data and transparent assessment procedures
and to help the accomplishment of decisional processes, focusing on increasing its efficiency. The Electre I
method, in which the criteria of the set of decisional alternatives are compared by means of a binary
relationship, defined as ‘outranking relationship’, are more ‘flexible’ than the ones based on a multi-
objective approach.

4.2 Weakness

An intriguing problem with decision-making methods which rank a set of alternatives in terms of a number
of competing criteria is that oftentimes different methods may yield different answers (rankings) when they
are fed with exactly the same numerical data. Thus, the issue of evaluating the relative performance of such
methods is naturally raised. This, in turn, raises the question how can one evaluate the performance of such
methods? Since it is practically impossible to know which one is the best alternative for a given decision
problem, some kind of testing procedures need to be determined.

4.3 Opportunity

In this paper, a new approach has been carried out for the use of the ELECTRE: ELimination Et Choix
Traduisant la REalité (ELimination and Choice Expressing the REality) model in marketing mix selection.
This work shows that ELECTRE can be used successfully in deriving a consensus ranking in benchmarking
to select the best in class.

4.4 Threat

In outranking approaches, the inaccuracy of the data can be modeled through the indifference and
preference threshold (so-called pseudocriteria). Of course, threshold must be assessed for each criterion and
for each problem separately.

5. Conclusion

It is not simply enough to identify the strengths, weaknesses, opportunities, and threats of the Electre
outranking method. In applying the SWOT analysis it is necessary to minimize or avoid both weaknesses
and threats. Weaknesses should be looked at in order to convert them into strengths. Likewise, threats
should be converted into opportunities. Lastly, strengths and opportunities should be matched to optimize
the potential of a firm. Applying SWOT in this fashion can obtain leverage for a company (Marketing
Strategy, 1998).

Sensitivity analysis showed that, in general, the project rankings were considerably more sensitive to
changes in the performances than they were to changes in the thresholds or weights. This is helpful and
means that within a relatively wide band of preference, the same projects are considered important. Further,
it requires the individual project sponsors to make the effort and ensure that the performance data is both
accurate and defensible. As can be seen, the marketing manager should have rough outline of potential
marketing activities that can be used to take advantage of capabilities and convert weaknesses and threats.
However, at this stage, there will likely be many potential directions for the managers to pursue. Due to the
limited resources that most firms have, it is difficult to accomplish everything at once. The manager must
prioritize all marketing activities and develop specific goals and objectives for the marketing plan
(Contemporary Marketing, 1992).

Outranking methods make it possible to deal with multicriteria benchmarking and avoid the shortcomings
of the traditional methods based on the average aggregate monocriterion. If applied to the measurement of
learning capability, they are a complete alternative to the traditional approach. They can support the
behavioral theory of organizational analysis initiated by H. Simon (Biggiero and Laise, 2003a, b). In fact,
even though H. Simon does not explicitly discuss the problem of criteria multiplicity nor does he apply
outranking methods, the behavioral theory is nonetheless perfectly comparable with them. The “levels of
 106

aspirations” hypothesized by Simon can be associated with the threshold of concordance and discordance
test.

The lower the threshold assigned to the concordance test the lower the aspiration levels will be and hence
the more the satisfying solutions will be. Outranking methods thus constitute a new and robust base on
which to found the entire edifice of the behavioral theory of benchmarking applied to measurement of
learning capability. They are a valid alternative to traditional methods, since they are equally rational and
rigorous without suffering from its shortcomings and application limitations.

6. Directions for Further Research

The relationships between customer satisfaction and behavioral outcomes are probably much more
complex than initially assumed. This study has looked only at a limited part of the puzzle of how customer
satisfaction translates into behavioral outcomes. In what way consumer characteristics moderate the
relationship between satisfactions and repurchase behavior is likely to be contingent on the product or
service category and the buying and usage process for that category. Other consumer characteristics not
included in this study, such as a propensity for variety seeking behavior or a recreational shopping
orientation, could potentially be important in many retail industries. Further research on how the effects of
satisfaction on behavior is moderated by different consumer characteristics would advance customer
satisfaction research as well as be of great managerial significance.

7. Scope and Limitation of the Study

The setting selected for conducting this marketing research was focus only on three multinational retail
stores and a homegrown retail store due to time constrain. Field researches were conduct in Tesco Stores
(Malaysia) Sdn Bhd, Carrefour of Magnificent Diagraph Sdn. Bhd., Giant of Dairy Farm International, and
the homegrown retail store, Mydin Mohamed Holdings Berhad.

The collection of primary data was based on a survey of 856 respondents who visit each respective retail
outlets, the number in the sample limited due to the restrictions of time to complete the project and
resources to support it.

AUTHOR BIBLIOGRAPHY

Amy Poh Ai Ling was born in Penang, also called Pearl of the Orient, an island in the Straits of Malacca,
and also of one of the states of Malaysia, located on the north-west coast of peninsular Malaysia on 8th
March 1982. She started her primary education in S.R.K.J. (C) Sin Ya and pursues her secondary education
in S.M.J.K. Jit Sin in Bukit Mertajam, where she grew up. She then enrolled into the National University of
Malaysia (UKM) and completed her first degree in BBA majoring Marketing. Her passion towards quality
moved her one step further enrolling in Master of Science Majoring Quality and Productivity offered by the
school of Mathematical Sciences in Faculty of Science and Technology in UKM.

Currently she is a member of the National university of Malaysia (UKM) fellowship stationed in Kolej
Ibrahim Yaakub, performing duties and serve throughout the year in students’ welfare.

She later becomes a Quality Assurance Engineer in Sony where she applies and contributes her theory and
knowledge of quality and productivity improvement towards the company.

The author always has an enthusiasm for quality and productivity improvement studies.

Annotated Bibliography: “Service Quality”

Term paper: “Productivity Measurement”
 107

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 114

APPENDIX A AUTHORIZATION LETTER FOR THE RESEARCH

1. TESCO

2. CARREFOUR

3. GIANT

4. MYDIN
115
116
117
118
119
120
121
122
 123

APPENDIX B LETTER REQUEST OF CONTRIBUTION

1. LETTER REQUEST OF CONTRIBUTION - TESCO

2. LETTER REQUEST OF CONTRIBUTION - CARREFOUR

3. LETTER REQUEST OF CONTRIBUTION - GIANT

4. LETTER REQUEST OF CONTRIBUTION - MYDIN

124
125
126
127
 128

APPENDIX C QUESTIONNAIRE

1. QUESTIONNAIRE - TESCO

2. QUESTIONNAIRE - CARREFOUR

3. QUESTIONNAIRE - GIANT

4. QUESTIONNAIRE - MYDIN
 129
Serial No :
SURVEY FORM
The Impact of Marketing Mix on Customer Satisfaction:
A Case Study Deriving Consensus Rankings from Benchmarking on
Tesco Stores (Malaysia) Sdn Bhd - Tesco Kajang
Dear customer,
Thank you for choosing our retail store and services. We would be glad if you could take a few minutes to
complete this questionnaire. Thank you for your time assistance.
CUSTOMER INFORMATION

I) Gender : □ Male □ Female

II) Ethnic : □ Malay □ Chinese □ Indian □ Others
III) Marital Status : □ Single □ Married
IV) Age : □ <21 □ 21 - 35 □ 36 - 50 □ >50
V) How often do you shop at our store? □ daily □ once a week or more
□ 2 - 3 times a month □ once a month
□ every 2- 3 months □ 2 - 3 times a year
MARKETING MIX MODEL
Please rate with respect to the following Strongly Strongly
Disagree Agree
1 2 3 4 5 6
Product
1) This store offers high quality merchandise □ □ □ □ □ □
2) Offers several brands to choose from in a category □ □ □ □ □ □
3) Purchased products are usually found in good condition □ □ □ □ □ □
4) Visual appearance of products in this store is pleasant □ □ □ □ □ □
5) This store offers good maintenance and repair of good sold□ □ □ □ □ □
6) Has the widest selection of national brand merchandise □ □ □ □ □ □
Price
7) I can get a lower price if I buy additional similar items □ □ □ □ □ □
8) This store offers the overall lowest price in the area □ □ □ □ □ □
9) Maintains the best everyday price for most merchandise □ □ □ □ □ □
To be continued on the second page at the back
 130
MARKETING MIX MODEL
Please rate with respect to the following Strongly Strongly
Disagree Agree
1 2 3 4 5 6

10) The price of the product is reasonable □ □ □ □ □ □

11) Consistently provides the best values for money □ □ □ □ □ □
12) The price of the product is low throughout the year □ □ □ □ □ □
Place/ Distribution
13) Fast checkout □ □ □ □ □ □
14) Convenient parking of vehicles □ □ □ □ □ □
15) Close to where I live □ □ □ □ □ □
16) Store atmosphere and decoration are appealing □ □ □ □ □ □
17) This store layout makes it easy for me to find □ □ □ □ □ □
what I need
18) Convenient public transport to get to this store □ □ □ □ □ □
Promotion
19) Advertised merchandise is always available □ □ □ □ □ □
20) Offers coupons in newspaper advertisement □ □ □ □ □ □
21) Seasonal promotions are available □ □ □ □ □ □
22) I love shopping here because of the privilege card □ □ □ □ □ □
23) I am well informed of the promotions held □ □ □ □ □ □
24) The promotions are always attractive □ □ □ □ □ □
CUSTOMER PERCEPTION
Please rate with respect to the following Strongly Strongly
Disagree Agree
1 2 3 4 5 6

25) Overall, I am satisfied with this store □ □ □ □ □ □

MOTIVATING FACTOR
26) What factor motivates you the most to patronize our store.
□ product □ price □ promotions □ place/distribution
THANK YOU FOR YOUR COOPERATION ! PLEASE COME AGAIN.
 Serial No : 131
SURVEY FORM
The Impact of Marketing Mix on Customer Satisfaction:
A Case Study Deriving Consensus Rankings from Benchmarking on
Magnificient Diagraph Sdn Bhd – Carrefour Putrajaya
Dear customer,
Thank you for choosing our retail store and services. We would be glad if you could take a few minutes to
complete this questionnaire. Thank you for your time assistance.
CUSTOMER INFORMATION

I) Gender : □ Male □ Female

II) Ethnic : □ Malay □ Chinese □ Indian □ Others
III) Marital Status : □ Single □ Married
IV) Age : □ <21 □ 21 - 35 □ 36 - 50 □ >50
V) How often do you shop at our store? □ daily □ once a week or more
□ 2 - 3 times a month □ once a month
□ every 2- 3 months □ 2 - 3 times a year
MARKETING MIX MODEL
Please rate with respect to the following Strongly Strongly
Disagree Agree
1 2 3 4 5 6
Product
1) This store offers high quality merchandise □ □ □ □ □ □
2) Offers several brands to choose from in a category □ □ □ □ □ □
3) Purchased products are usually found in good condition □ □ □ □ □ □
4) Visual appearance of products in this store is pleasant □ □ □ □ □ □
5) This store offers good maintenance and repair of good sold□ □ □ □ □ □
6) Has the widest selection of national brand merchandise □ □ □ □ □ □
Price
7) I can get a lower price if I buy additional similar items □ □ □ □ □ □
8) This store offers the overall lowest price in the area □ □ □ □ □ □
9) Maintains the best everyday price for most merchandise □ □ □ □ □ □
To be continued on the second page at the back
 132
MARKETING MIX MODEL
Please rate with respect to the following Strongly Strongly
Disagree Agree
1 2 3 4 5 6

10) The price of the product is reasonable □ □ □ □ □ □

11) Consistently provides the best values for money □ □ □ □ □ □
12) The price of the product is low throughout the year □ □ □ □ □ □
Place/ Distribution
13) Fast checkout □ □ □ □ □ □
14) Convenient parking of vehicles □ □ □ □ □ □
15) Close to where I live □ □ □ □ □ □
16) Store atmosphere and decoration are appealing □ □ □ □ □ □
17) This store layout makes it easy for me to find □ □ □ □ □ □
what I need
18) Convenient public transport to get to this store □ □ □ □ □ □
Promotion
19) Advertised merchandise is always available □ □ □ □ □ □
20) Offers coupons in newspaper advertisement □ □ □ □ □ □
21) Seasonal promotions are available □ □ □ □ □ □
22) I love shopping here because of the privilege card □ □ □ □ □ □
23) I am well informed of the promotions held □ □ □ □ □ □
24) The promotions are always attractive □ □ □ □ □ □
CUSTOMER PERCEPTION
Please rate with respect to the following Strongly Strongly
Disagree Agree
1 2 3 4 5 6

25) Overall, I am satisfied with this store □ □ □ □ □ □

MOTIVATING FACTOR
26) What factor motivates you the most to patronize our store.
□ product □ price □ promotions □ place/distribution
THANK YOU FOR YOUR COOPERATION ! PLEASE COME AGAIN.
 Serial No : 133
SURVEY FORM
The Impact of Marketing Mix on Customer Satisfaction:
A Case Study Deriving Consensus Rankings from Benchmarking on
Giant of Dairy Farm International (DFI)
Dear customer,
Thank you for choosing our retail store and services. We would be glad if you could take a few minutes to
complete this questionnaire. Thank you for your time assistance.
CUSTOMER INFORMATION

I) Gender : □ Male □ Female

II) Ethnic : □ Malay □ Chinese □ Indian □ Others
III) Marital Status : □ Single □ Married
IV) Age : □ <21 □ 21 - 35 □ 36 - 50 □ >50
V) How often do you shop at our store? □ daily □ once a week or more
□ 2 - 3 times a month □ once a month
□ every 2- 3 months □ 2 - 3 times a year
MARKETING MIX MODEL
Please rate with respect to the following Strongly Strongly
Disagree Agree
1 2 3 4 5 6
Product
1) This store offers high quality merchandise □ □ □ □ □ □
2) Offers several brands to choose from in a category □ □ □ □ □ □
3) Purchased products are usually found in good condition □ □ □ □ □ □
4) Visual appearance of products in this store is pleasant □ □ □ □ □ □
5) This store offers good maintenance and repair of good sold□ □ □ □ □ □
6) Has the widest selection of national brand merchandise □ □ □ □ □ □
Price
7) I can get a lower price if I buy additional similar items □ □ □ □ □ □
8) This store offers the overall lowest price in the area □ □ □ □ □ □
9) Maintains the best everyday price for most merchandise □ □ □ □ □ □
To be continued on the second page at the back
 134
MARKETING MIX MODEL
Please rate with respect to the following Strongly Strongly
Disagree Agree
1 2 3 4 5 6

10) The price of the product is reasonable □ □ □ □ □ □

11) Consistently provides the best values for money □ □ □ □ □ □
12) The price of the product is low throughout the year □ □ □ □ □ □
Place/ Distribution
13) Fast checkout □ □ □ □ □ □
14) Convenient parking of vehicles □ □ □ □ □ □
15) Close to where I live □ □ □ □ □ □
16) Store atmosphere and decoration are appealing □ □ □ □ □ □
17) This store layout makes it easy for me to find □ □ □ □ □ □
what I need
18) Convenient public transport to get to this store □ □ □ □ □ □
Promotion
19) Advertised merchandise is always available □ □ □ □ □ □
20) Offers coupons in newspaper advertisement □ □ □ □ □ □
21) Seasonal promotions are available □ □ □ □ □ □
22) I love shopping here because of the privilege card □ □ □ □ □ □
23) I am well informed of the promotions held □ □ □ □ □ □
24) The promotions are always attractive □ □ □ □ □ □
CUSTOMER PERCEPTION
Please rate with respect to the following Strongly Strongly
Disagree Agree
1 2 3 4 5 6

25) Overall, I am satisfied with this store □ □ □ □ □ □

MOTIVATING FACTOR
26) What factor motivates you the most to patronize our store.
□ product □ price □ promotions □ place/distribution
THANK YOU FOR YOUR COOPERATION ! PLEASE COME AGAIN.
 Serial No : 135
SURVEY FORM
The Impact of Marketing Mix on Customer Satisfaction:
A Case Study Deriving Consensus Rankings from Benchmarking on
Mydin Mohamed Holdings Berhad - Mydin Mart Kajang
Dear customer,
Thank you for choosing our retail store and services. We would be glad if you could take a few minutes to
complete this questionnaire. Thank you for your time assistance.
CUSTOMER INFORMATION

I) Gender : □ Male □ Female

II) Ethnic : □ Malay □ Chinese □ Indian □ Others
III) Marital Status : □ Single □ Married
IV) Age : □ <21 □ 21 - 35 □ 36 - 50 □ >50
V) How often do you shop at our store? □ daily □ once a week or more
□ 2 - 3 times a month □ once a month
□ every 2- 3 months □ 2 - 3 times a year
MARKETING MIX MODEL
Please rate with respect to the following Strongly Strongly
Disagree Agree
1 2 3 4 5 6
Product
1) This store offers high quality merchandise □ □ □ □ □ □
2) Offers several brands to choose from in a category □ □ □ □ □ □
3) Purchased products are usually found in good condition □ □ □ □ □ □
4) Visual appearance of products in this store is pleasant □ □ □ □ □ □
5) This store offers good maintenance and repair of good sold□ □ □ □ □ □
6) Has the widest selection of national brand merchandise □ □ □ □ □ □
Price
7) I can get a lower price if I buy additional similar items □ □ □ □ □ □
8) This store offers the overall lowest price in the area □ □ □ □ □ □
9) Maintains the best everyday price for most merchandise □ □ □ □ □ □
To be continued on the second page at the back
 136
MARKETING MIX MODEL
Please rate with respect to the following Strongly Strongly
Disagree Agree
1 2 3 4 5 6

10) The price of the product is reasonable □ □ □ □ □ □

11) Consistently provides the best values for money □ □ □ □ □ □
12) The price of the product is low throughout the year □ □ □ □ □ □
Place/ Distribution
13) Fast checkout □ □ □ □ □ □
14) Convenient parking of vehicles □ □ □ □ □ □
15) Close to where I live □ □ □ □ □ □
16) Store atmosphere and decoration are appealing □ □ □ □ □ □
17) This store layout makes it easy for me to find □ □ □ □ □ □
what I need
18) Convenient public transport to get to this store □ □ □ □ □ □
Promotion
19) Advertised merchandise is always available □ □ □ □ □ □
20) Offers coupons in newspaper advertisement □ □ □ □ □ □
21) Seasonal promotions are available □ □ □ □ □ □
22) I love shopping here because of the privilege card □ □ □ □ □ □
23) I am well informed of the promotions held □ □ □ □ □ □
24) The promotions are always attractive □ □ □ □ □ □
CUSTOMER PERCEPTION
Please rate with respect to the following Strongly Strongly
Disagree Agree
1 2 3 4 5 6

25) Overall, I am satisfied with this store □ □ □ □ □ □

MOTIVATING FACTOR
26) What factor motivates you the most to patronize our store.
□ product □ price □ promotions □ place/distribution
THANK YOU FOR YOUR COOPERATION ! PLEASE COME AGAIN.
 137
APPENDIX D
 138
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APPENDIX E

Classification of MCDM Method

Number of Decision Makers Operation Approaches Type of Data

Single Group Deterministic Stochastic Fuzzy

Single Criterion Synthesis Approach base on MAUT Outranking Synthesis Approach based on Outranking Method

TOPSIS MAVT UTA ELECTRE I ELECTRE IS ELECTRE II

SMART MAUT AHP ELECTRE III ELECTRE IV ELECTRE TRI

Fuzzy Weight Sum Fuzzy Maximim MELCHOIR ORESTE REGIME

PROMETHEE I NAIADE PROMETHEE II

Rajah: Klasifikasi bagi kaedah MCDM ( Multicriteria Decision Making)