The Impact of Physical Evidences on Customer Store Loyalty with Special Reference to Supermarket Industry in Sri Lanka Nomesha Liyanage, Thilina Dk, INTERNATIONAL CONFERENCE ON BUSINESS & INFORMATION 2015

Background Of The Study Industry Overview Contribution Today, the supermarket industry is at the growing stage of its industry life cycle. In present context, there are more than 350 super market stores located in Sri Lanka. Out of those, Cargills Food City holds around 221 outlets all over the country.

Background Of The Study Modern Trade Dispersion In Sri Lanka

Research Problem “to what extent physical evidence will influence on customer store loyalty towards supermarket industry” Customer Satisfaction Store Location Pricing Customer Store Loyalty Gap Out of those three elements in service marketing mix physical evidence has a major importance. The physical evidence is the environment in which the service is delivered and where the firm and the customer interact and any tangible commodities that facilitate performance or communication of the service. The physical environment is highly important in setting loyal customer base. Physical evidence includes the service atmospherics, which creates purchase intention, positive word of mouth, revisit, customer satisfaction that would bring customer loyalty in a given industry. Those physical evidences can be categorized into two main areas such as interior facilities and exterior facilities. Interior facilities include interior design, layout, air quality, temperature, lighting, signs, architecture etc. Signage, parking, landscape, exterior designs are the exterior evidences in retail store environment. Due to the intangibility of services, service quality is difficult for consumers to objectively evaluate. As a result, consumers rely on tangibles or physical evidence that surrounds the service to help them form their evaluations

Significance of The Study Customer loyalty is about retaining customers, Total value of retail business is Rs.400 billion In super market industry there is a growth from past few years to now. The changing nature of consumer psychographics specially their life style.. The customers can fulfill their all needs under one roof, as well as there is a high freedom on selecting their own liking branded products

Research Objectives Key objective To examine the impact physical evidences on customer store loyalty towards supermarket outlets especially on revisit, positive word of mouth with special reference to supermarkets in Colombo district

Research Objectives Specific Objectives To identify the current physical evidences used by the supermarket outlets in Sri Lanka  To evaluate the effectiveness of the physical evidences in developing revisit intention and positive word of mouth recommendation  To compare and contrast the significance of the physical evidences on behavioral intention and attitudinal behavior of customers  To recommend appropriate strategy for developing physical evidences to create customer store loyalty

Research Questions What are the main physical evidences adopted by supermarkets in Sri Lanka? To what extent does the outlet layout impact on the customer revisit? To what extent do the physical atmosphere (lighting, signboards and signage) make an impacts on customer revisit? Are all physical evidences equally important in creating customer store loyalty? What is the general condition of loyalty towards Sri Lankan supermarkets?

Literature Review Service Marketing Service Marketing Mix Physical Evidence Physical Evidence Of Service Encounters Customer Loyalty Association Between Physical Evidence & Customer Loyalty Dimensions

Conceptual Framework Independent Variables Dependent Variable Layout Revisit Intention Signage Customer Store Loyalty Lighting Signboards Word Of Mouth

Hypothesis Layout has a significant impact on customer store loyalty Signage has a significant impact on customer store Loyalty Lighting has a significant impact on customer store loyalty Signboards has a significant impact on customer store loyalty

Methodology Research Approach – Scientific/Quantitative / Deductive Method – Survey Sample Size – 100 Respondents Data Presentation – Pie Charts, Bar Charts, Tables Data Analysis – SPSS Version 19.0

Analysis Respondents’ Demographic Information Gender Male 52 Female 48 Age 18- 25 Years 42 26 – 35 years 29 36 – 45 Years 21 46 – 55 Years 8 Martial Status Married 44 Unmarried 56

Analysis Respondents’ General Information Customer Base Cargills 45 Keells 28 Arpico 18 Laugfs 03 Sathosa 06 Reason Convenience Better Customer Service 22 Reasonable Prices 23 Availability Of Goods 31 Quality Of The Goods 12 Wide Range Of Selection 26 Close To Home 19

Analysis Respondents’ General Information Shopping Days Weekdays 39 Weekends 61 Shopping Time 8.30am - 10.30am 09 10.30am - 12.30pm 12.30pm - 2.30pm 03 2.30pm - 5pm 17 5pm - 7.00pm 43 7.00pm - 10.30pm 19

Analysis Analysis Of Independent Variables Layout Mean SD Variance I can find things easily what I want 4.1900 .52599 .277 The space between aisles is sufficient to move trolleys 3.8300 .89955 .809 Sufficient space available to accommodate large crowd at the busy hours 3.4800 .92638 .858 Allocation of each department is very attractive .77921 .607 Can compare the same good from different brands very easily 3.9900 .73161 .535

Analysis Analysis Of Independent Variables Signage Mean SD Variance Creative exterior signage attacks me to do shopping in this supermarket 3.2700 .91954 .846 I feel signage with slogan invites me to the supermarket 3.4600 .77094 .594 Lighting Lights insight the store do not irritate my eyes 3.8100 .78746 .620 Lights provide glamour to the supermarket 3.8500 .78335 .614

Analysis Analysis Of Independent Variables Signboards Mean SD Variance Promotions board & price boards are eye catching 3.8600 .92135 .849 Promotions board & price boards are informative 3.8300 .91071 .829 I can easily direct the locations inside the outlet 3.5800 .75452 .754

Analysis Analysis Of Dependent Variables Revisit Intention Mean SD Variance I can buy everything what I want from this supermarket 3.8900 .76403 .584 The shopping experience in this supermarket is really enjoyable 3.6900 .78746 .620 I strongly prefer to do shopping in this supermarket with my family members 3.5800 .93398 .872 I will not change to another supermarket 3.2300 .89730 .805 I do shopping in this supermarket as a habit 3.2000 .85108 .724 I will revisit this supermarket continuously 3.5200 .81004 .656

Analysis Analysis Of Dependent Variables Word Of Mouth Mean SD Variance I came to know about the benefits of this supermarket from one of my friends 2.9900 1.10550 1.222 I would tell my friends and relatives to do their shopping from this supermarket 3.2400 .83024 .689 I have heard that people talk positively on this supermarket 3.7500 .75712 .573 I recommend this supermarket to the others as one of the best supermarkets 3.7200 .76647 .587

Hypothesis Testing Hypothesis Pearson Correlation Accept/ Reject Layout has a significant impact on customer store loyalty .645 Accept Signage has a significant impact on customer store loyalty .362 Lighting has a significant impact on customer store loyalty .454 Signboards has a significant impact on customer store loyalty .507

Key Findings Positive Relationship Layout is the mostly impacted independent variable Revisit Intention is more powerful than word of mouth in creating customer store loyalty

Recommendation Take further initiatives on managing their floor space Consideration the seriousness of merchandise display and assortment Improving traffic flow Make attractive environment Appropriate lighting system

Further Research Area Focus on qualitative research approach on same research area Consideration on other physical evidence such as music, parking etc

Thank You