Hypermarket Industry In Malaysia Marketing Essay

This chapter provides an overview of the study context which includes background of the study, research problem statement, research questions and objectives, significance of study and outline of the study. In order to test our proposed framework under Malaysian context, we adopt and modify the framework of the previous studies. The research background on the customer patronage intention toward hypermarket in Malaysia and the issues in the problem statement will be discussed. There is a general objective and few specific objectives which will serves as the driver to be conducted in our study. While for the research questions, it will provide further understanding on the variables which contributed to customer patronage intention toward hypermarket in Malaysia.

Background of the Study

Hypermarket industry in Malaysia has made its prologue with Carrefour opened its first premise in Subang Jaya, Selangor in 1994. Followed in the ensuring year, in UEP Subang Jaya, Selangor, Giant Cash & Carry Sdn Bhd opened its first hypermarket. According to the Department of Statistics (2009), Malaysia’s gross national income (GNI) is majorly contributed by the wholesale and retail sector. The retail sector contributed almost 500,000 jobs apart from their RM 57 million contribution in GNI. As a result, the Malaysian government plans to set up 61 hyperstores, 163 superstores and 356 supermarkets within the next 10 years. This would naturally increase the competition among the retailers located in Malaysia.

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Apart from the rising competition between the retailers who owned the physical stores, they also have to deal with the rising trend of internet shopping. As the Internet is changing the way people shop every day, many shops are being pressured by the prices and convenience that e-commerce retailers offer. Based on an ongoing study by IPG Media Lab, it reveals that customer satisfaction at retail outlet is reducing up to 15% per year and stores that were defining the diversity of shopping centers are closing one by one (Grünsteidl, 2012).

University students represent an interesting area in the marketing research as little study has been conducted in Malaysia on their purchasing behavior. Furthermore, with the increasing numbers of higher education institutions, university students have become one the crucial consumer market segment due to several reasons. One of the reasons is because of the availability of student loan and this expands their purchasing power significantly. Another reason is due to they have better potential earnings than any other segment of the population once they have graduated (Sabri et al., 2008). Apart from having the power to influence the buying behavior and decision-making of others, they also possess the ability to act as a change agent by inducing society and culture (Grant & Waite, 2003; Leslie, Sparling, & Owen, 2001). Therefore, further research needs be done so that hypermarket retailers understand what makes these university students to have patronage intention towards their store. Hence, our study will adopt private university students to represent the customer’s patronage intention towards hypermarket in Malaysia.

Retail patronage intention has been a key issue for academicians and retail managers because it endeavors to explain the mechanism of store choice (Lee, Fairhurst, & Lee, 2009). Retailers are keen in understanding patronage intentions because of the necessity to predict customer’s buying behavior of products and/or services, their willingness to revisit the shop, and to promote good word-of-mouth to other customers (Donovan & Rossiter, 1982). Therefore, knowing what affects customers’ patronage intention towards hypermarket is essential in expanding the hypermarket business in Malaysia.

Problem Statement

The retailing industry is an extremely competitive business due to the increasing number of retailers in Malaysia over the years (CheWel, Hussin, & Omar, 2012). In order to survive in this industry, new players who entered into the industry must ensure that customers are drawn to their stores whilst the current players must be able to retain their existing customers and attract new ones. The degree to which competing retailers are able to uphold their market positions lies upon the extent to which retail management can ingeniously adapt their operations to the changing consumers’ attitudes (Musa, Putit, & Putra, 1997).

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According to Bellenger and Moschis (1982), several researches have been done over the past thirty years on the topic of retail patronage and the research findings in this topic are hard to encapsulate. Likewise, the developments in generalization have been sluggish as a result of the disintegrated characters of the researches. Moreover, there is also a lack of a universal theory or model that can be utilized to link the assorted aspects of patronage behavior (Rosenbloom & Schiffman, 1981, p. 175).

Baker, Parasuraman, Grewal and Voss (2002) argue that research on store environment so far has not scrutinize key issues such as how various store environment cues together form customers’ perceptions and how those in turn, affects their store patronage intention. Martínez-Ruiz, Jiménez-Zarco, Barba-Sánchez and Izquierdo-Yusta (2010) claime that there is lack of studies considering the potential effects of consumer perceptions towards store attributes on the maximum level of customer satisfaction. The relative deficiency in investigating maximal customer satisfaction seems startling as it should be the purpose of any retailer in the industry (Al-Awadi, 2002; Barsky, 1995; Spiller, Bolten, & Kennerknecht, 2006).

Service quality by its nature is an indefinable, abstract and vague concept as consumers do not convey their requirements easily and clearly (Sachdev & Verma, 2004). It is also challenging in benchmarking and measuring the concept. Dabholkar, Thorpe and Rentz (1996) assess that little research have been done in retail setting using the famous SERVQUAL model. There are a considerable number of authors who argue that service quality is an important determining factor of patronage intention although its real connection is ambiguous (Gremler & Brown, 1996).

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It must also be noted that although there are many studies on store selection, not many studies have been conducted in developing countries such as Malaysia (CheWel et al., 2012.). Hence, due to the ever-changing consumers’ perceptions toward different retailers and the lack of study on retail store selection such as hypermarkets in Malaysia, our study intends to discover the current items that have significant influence on customer’ perceptions.

Research Questions and Objectives

1.3.1 General Objective

To gauge the phenomenon of Malaysian customers’ patronage intention among undergraduate student in private university.

Specific Objectives

To examine the relationship between staff reliability and customers’ patronage intention toward hypermarkets in Malaysia.

To examine the relationship between staff responsiveness and customers’ patronage intention toward hypermarkets in Malaysia.

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To examine the relationship between store facilities and customers’ patronage intention toward hypermarkets in Malaysia.

To examine the relationship between store convenience and customers’ patronage intention toward hypermarkets in Malaysia.

General Question

Is there a positive relationship of staff reliability, staff responsiveness, store convenience and store facilities on customers’ patronage intention toward hypermarket in Malaysia?

1.3.4 Specific Question

Is there a relationship between staff reliability and customers’ patronage intention toward hypermarket in Malaysia?

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Is there a relationship between staff responsiveness and customers’ patronage intention toward hypermarket in Malaysia?

Is there a relationship between store facilities and customers’ patronage intention toward hypermarket in Malaysia?

Is there a relationship between store convenience and customers’ patronage intention toward hypermarket in Malaysia?

1.4 Significance of the Study

This study intends to provide a deeper understanding on why customers possess the patronage intention toward hypermarkets in Malaysia as customers’ attitude is often viewed as uncertain and vague. Through this study, hypermarket retailers especially the marketing managers could gain more knowledge on the determinants affecting the customer decision to re-patronage from their hypermarkets. This will enable them to adopt the knowledge gained into their marketing strategies which in turn will have a greater impact on attracting future customer and maintaining their current ones.

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Apart from providing managerial implications, this study also wishes to provide some insights to future researchers on the customers’ patronage intention towards hypermarkets in Malaysia. Hopefully, it will inspire future academic researchers to carry out more similar investigation but in greater depths and details in order to understand what influence customers’ patronage intentions towards different retail setting in Malaysia.

Outline of the Study

The remaining section of this research proceeds as follow. Chapter 2 consists of a literature review on the SERVQUAL theory, the past empirical studies on the four variables which are staff reliability, staff responsiveness, store facilities and store convenience; and the relationship between the four variables and customer patronage intention. The conceptual framework of this study and the development of hypothesis will be presented in this chapter also. Chapter 3 will be focused on the research methodology used in this study. It shows the research design adopted and the selected population, sample and sampling procedures. The type of data collected method used in this study is also presented in this chapter. Apart from that, types of variables and measurement will be identified and data analysis techniques will be described further in this chapter.

Conclusion

In this chapter one, the background of the research and problem of statement have been identified and explained unambiguously. Then, the research objectives and questions have been formed to indicate the research objectives of this study. After that, the significant of the research and scope of study is presented. To further explain the study, a theory has been selected and it will be further elaborated in chapter 2.

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