Chapter 2

Literature Review

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 Chapter 2
Literature Review

2.1 Introduction
This chapter provides both the theoretical fram ework and the discussion o f empirical

literature for the study and com pleted with an overview o f store image and consum er-

based retailer equity research, with specific reference to empirical findings on the

dim ensions and sub dim ensions o f store im age and consum er-based retailer equity and

their relevance in the current retail industry environm ent.

2.2 Retailing
Retailing is the final stage in the distribution process; hence retailing is a process o f

selling goods and services to the final consum ers for their personal, o r their fam ily’s

consum ption. Retailing is one o f the m ost important elem ents o f a dom estic econom y and

the international econom y as a w hole, with the process o f retail internationalization

gaining m om entum , retailing is fast becom ing a global industry. In another definition

M orgenstein and Strongin (1 9 8 3 , p. 6 ) retailing "C onsists o f the selling o f goods and

services to their ultimate consum ers, that is, individuals who buy something for personal

or household use." D .M . Lew ison (1 9 8 9 ) defines retailing as the final com m ercial link in

the distribution chain, where retailers sell the final products to end consum ers. R osenberg

1 9 9 3 , p. 291 defines retailing as "The activity o f purchasing for resale to a custom er".

W hereas J . A . D aw son (1 9 9 4 ) em phasizes not only the function o f selling, but also the

functions o f buying and m anufacturing.

Retail industry has been one o f the growth areas and one o f the m ost important parts in

the global econ om y. It has witnessed a high growth rate in the developed countries and is

poised for an exponential grow th, in the em erging econom ies. Retailing is the largest

private sector em ployer in m any countries. The history o f retailing is marked by a

number o f watershed events that have reshaped the industry. A m ong these are the advent

o f new form ats such as the discount store and the superstore and the introduction o f new

technologies such as the point-of-purchase (P O S ) terminal (Rauh & Shafton, 2 0 0 1 ).

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Therefore, the retail industry today is all about ch oices; consum ers have a choice o f

shopping channels, including brick-and-m ortar stores, catalogs and the Internet.

A long with the rapid growth, retailing scenario has also been characterized by em ergence

o f increasingly new retailing Form ats and com petition and increasing sophistication and

modernization o f the lifestyle (Popkowski L eszczy c, Sinha, & Tim m erm ans, 2 0 0 0 ). With

an overlap o f products being offered across different retail form ats, the com petition has

becom e unpredictable intense in term s o f the direction where it is com ing from (S.

Tripathi &. Sinha, 2 0 0 8 ). important part o f econom ic activities and m ajor sectors o f both

developed and developing countries’ econom ies is retail industry, retailing influence

consum ers to purchase a particular products category at a particular retail store (R isch,

1 9 9 1 ).

A m ongst academ icians, there w as a global approved definitions for retailing from Fou r

decades ago (C . B . Saunders & Logsdon, 1 9 6 9 ): "Retailing consists o f the activities

involved in selling directly to the ultimate consum er". H ow ever, currently it seem s

impossible to find a universally accepted definition o f retailing. A ccording to Peterson

and Balasubram anian (2 0 0 2 ) understanding, explaining and predicting retailing

phenom ena requires a coherent and consistent definition o f retailing. B ased on a "broad-

ranging review " they com plain that the definition o f retailing (1 ) often tends to be taken

for granted, (2 ) is either too am biguous or too all-encom passing and hence m eaningless,

(3 ) or is assumed to be a generic form o f store-based (fixed location) selling. Despite the

authors’ persistent em phasis on the need for a com prehensive and consistent definition,

Peterson and Balasubram anian ( 2 0 0 2 ) unfortunately do not propose a new definition o f

retailing them selves, "as such a proposal would be overly am bitious and might be viewed

as presum ptuous". Instead, Peterson and Balasubram anian (2 0 0 2 ) list a number o f

dictionary and textbook definitions. From these definitions, it is clear that retailing

consists o f "the business activities involved in the sale o f products and services directly to

ultimate consum ers".

Dunne and Lusch ( 2 0 0 8 , p. 4 ) w rite that retailing consists o f "the final activities and steps

needed to place a product m ade elsew here in the hands o f the consum er o r to provide

services to the consum er." The retail sector is a large part o f the tertiary industry and

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constitutes a significant part o f city functions related to the flow o f custom ers, goods,

finance and information.

B asically the retail sector can be classified in to tw o segm ent; organized and unorganized

retail sector. Trading activities undertaken by licensed retailers (those who are registered

for sale ta x, incom e ta x , e tc) is organized retailing. The corporate - backed hypermarkets

and retail chains, and also privately ovmed large retail businesses are som e exam ple o f

organized retail. M odem /organized retail formats provide wide variety to custom ers and

offer an ideal shopping experience with an am algam ation o f product and shopping

am bience, entertainm ent and service, all under a single ro o f and friendly layout and a

single point-of-purchase laced with the lure o f discounts. The M alls, hyper/supermarkets,

convenience stores, departmental stores, specialty stores and discount stores are the

em erging retail form ats that provide different shopping experience to consum ers, (K otler,

Haider, & Rein, 1 9 9 3 ; Piyush & Sanjoy, 2 0 0 7 ). On the other hand the unorganized

retailing refers to the traditional form ats o f low -cost retailing and is m ore com m on in

developing countries, for exam ple, the local Kirana shops, ow ner m anaged general stores,

convenience stores, hand cart and pavem ent vendors, etc and run by a single ow ner with

his fam ily m em bers and with few hired w orkers mainly known to the ow ner’ s family.

This m arket is characterized by typically small retailers, m ore prone to ta x evasion and

lack o f labour law supervision.

2.2.1 Retailing in India

In the Indian econom y, retail industry has becom e one o f the fastest grow ing sectors over

the last few years. The retail sector o f Indian econom y also is categorized into two

segm ents such as organized retail sector and unorganized retail sector (the larger share o f

the retail m arket is unorganized sector). Unorganized Indian retail sector historically has

been dominated by sm all independent players such as traditional, small grocery stores,

local Kirana shops, ow ner manned general stores and others.

India got started with organized chain retailing ju st a few years ago, Shopping m alls and

superm arkets are grow ing at a very faster rate, which offer shopping, entertainment and

food all under one r o o f R ecently organized, m ulti-outlet retail concept has gained

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accep tan ce and has since then accelerated. Driven by changing lifestyles, strong incom e

growth and favorable dem ographic patterns, Indian retail is expanding at a rapid pace.

A ccording to M cK insey Report (2 0 0 7 ) study, 41 percent o f India's population would be

in the middle class bracket by the year 2 0 2 5 . Mall space, from a m eager one million

square feet in 2 0 0 2 , is has reached to touch 4 0 million square feet by en d -2007 and 6 0

million square feet by e n d -2 0 0 8 , says Jones Lang L aS alle’s third annual R etailer

Sentim ent Survey-A sia. India is at second position in global retailing developm ent Index

after V ietnam which shows the im portance o f retailing sector in Indian econom y

(A .T .K e a m e y , 2 0 0 8 ). A ccord in g to Srinivas and Jagtap (2 0 0 7 ) Indian retail is expected to

grow 2 5 percent annually. M odem retail in India could be worth U S $ 1 7 5 -2 0 0 billion by

2 0 1 6 . A ccord in g to T ata Consultancy Services (T C S ) 2 0 1 2 , India is a high growth

econ om y and retail m arket is expected to cross 1.3 trillion U SD by 2 0 2 0 from the current

market size o f 5 0 0 billion U SD , ranking it am ong the top retail m arkets in the world.

M odem retail with a penetration o f only 5% is expected to grow about six tim es from the

m arket size o f 5 0 0 billion U SD to 2 2 0 billion U SD , with tremendous potential for growth

across categories and segm ents. The future o f the India Retail Industry looks prom ising

with a higher share in the grow ing o f the m arket, with the governm ent policies becom ing

m ore favorable and the em erging technologies facilitating operations.

India is the second fastest grow ing econom y behind China's in the w orld. It is third

largest econom y in the world in term s o f G D P (G ross D om estic Product) and after U S A ,

Japan, and China is the fourth largest econom y in term s o f P P P (Purchasing Pow er

Parity) (H anda & G rover, 2 0 1 2 ). O ver the past few years as the Indian econom y has

grown at a rapid and steady rate o f around 8 -9 % it has also seen a significant growth in

the Indian Retail Sector. India W ith a contribution o f 14% to the national GD P and

em ploying 7 % o f the total w orkforce (only agriculture em ploys m ore) in the country, the

retail industry is definitely one o f the pillars o f the Indian econom y (R oychow dhury,

2 0 0 9 ).

R etailing in India is receiving global recognition and attention and this em erging market

is w itnessing a significant change in its growth and investment pattem . It is not ju st the

global players like W al-M art, T esco and M etro group are eying to capture a pie o f this

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market but also the dom estic corporate behemoths like Reliance, K K M odi, Aditya Birla

group, and Bharti group too are at som e stage o f retail developm ent (P. K . Sinha & K ar,

2 0 0 7 ).

The Indian retailing industry m arket is currently estim ated to be a U SD 2 0 0 billion, o f

which organized retailing (i.e ., m odem retail form ats) m akes up 3 percent or U SD 6 .4

billion (K um ar, 2 0 1 2 ).

The phenomenal growth o f retail in India is reflected in the rapid increase in number o f

supermarkets, departmental stores and hyperm arkets in the country. Buoyed by this

strong growth potential, India has becom e a hotbed o f investment in the retail sector. This

has seen a significant increase in the com petition as m ore and m ore national and

international players are embarking upon plans to enter the Indian retail m arket. Retailers

have more am bitious expansion plans than they did ju st a few years ago. M ost retailers

plan to expand by increasing store outlets and augm enting product ranges/services.

Retailers w ho are looking to the w orld’s em erging m arkets to drive the success o f their

businesses in the future identify India as the m ost sought-afler m arket. India is

particularly considered attractive because o f the size o f its market and the low presence o f

international retailers. W ith foreign ownership rules, being gradually relaxed, foreign

investm ent is also now possible, allowing single-brand retailers to own up to 51 % o f

their India operations (Kundnani, 2 0 1 0 ).

The Retail sector is one o f the fastest growing industries in India, catering to the w orld’ s

second largest consum er m arket. Retailing is being hailed as the future o f Indian industry,

spurred by country’ s huge consum er market o f Rupees 17 trillion at present and forecasts

that aggregate consum ption will grow to Rupees 7 0 trillion by 2 0 2 5 (M cK insey, 2 0 0 7 ).

Globally, India is the fifth largest retail m arket in the w orld. A fter Vietnam , India is also

the m ost attractive destination for retail investm ent (A .T .K eam ey , 2 0 0 8 ). India is

particularly considered attractive because o f the size o f its market and the low presence o f

international retailers. The retail industry overall is estimated at $ 5 1 1 billion and at the

2 0 0 8 rate o f grow th, will reach $ 8 3 0 billion by 2 0 1 3 . In 2 0 0 7 , retail contributed 8 - 1 0 %

to the country’s G D P and contributed up to 2 0 % b 2 0 1 0 . It is expected that m odernizing

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retail will generate em ploym ent for 15 million people in different activities. Organized

retail currently accounts for about 5 % o f the total retail market and is expected to register

a Com pounded Annual Growth Rate (C A G R ) o f 4 0 % and grow to U S $ 1 0 7 billion by

2 0 1 3 (C B Richard E llis, 2 0 0 8 ).

O ver the past five years, India has witnessed a frenetic speed o f retail development with

an increased accep tan ce o f organized retail form ats. A ccording to Goldman and Sach,

( 2 0 0 5 ) Indian econom ic growth could actually exceed that o f China by year 2 0 1 5 . The

sectors growth w as partly a reflection o f the impressive Indian econom ic growth and

overall rise in incom e level o f consum ers (H anda &, G rover, 2 0 1 2 ). It is believed that the

Country has potential to deliver the faster growth over the next 5 0 years (Bijapurkar,

2 0 0 3 ).

Indian retail m arket has around 12 million outlets and it is the largest retail outlet density

in the world (Sinha &. K um ar, 2 0 0 4 ). This has seen a significant increase in the

com petition as m ore and m ore national and international players are embarking upon

plans to enter the Indian retail m arket (Chow dhury, 2 0 0 9 ). H ow ever, it has 9 8 %

unorganized retail m arket (C II-M ck in sey , 2 0 0 4 ). Interestingly, this huge growth in

organized retail does not involve a decline in the business o f unorganized retail, the sales

o f the unorganized sector is expected to grow by 10% p .a., from U S $ 3 0 8 .8 billion 2 0 0 6 -

0 7 to U S $ 4 9 5 .6 billion in 2 0 1 1 -1 2 . M arket is controlled by a handful o f distributors and

w holesalers (H anda & G rover, 2 0 1 2 ). Traditionally the retail business is run by small

convenient stores, having shop in the front and house at the back. M ore than 9 9 %

retailers function in less than 5 0 0 square feet. M ost o f these outlets have very basic

offerings, fixed prices and no am bience. These are highly com petitive stores due to cheap

land prices and labor. In addition, these stores avoid the taxes as they belong to a small

industry sector (Piyush K um ar & Arindam , 2 0 0 4 ).

There is increased sophistication in the shopping pattern o f custom ers, w hich has resulted

to the em ergence o f big retail chains in m ost m etros; mini m etros and tow ns being the

n ext target. C ustom er taste and preferences are changing leading to radical transform ation

in lifestyles and spending patterns, w hich in turn is giving rise to new business

opportunities (P. K . Sinha & K ar, 2 0 0 7 ).

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R etailer inspired by the W all-M art story o f growth in small town A m erica, are tempted to

focus on sm aller towns and villages in India. H ow ever, a careful analysis o f the town

strata-w ise population, population growth, migration trends o f custom er spending

analysis reveals a very different picture o f India (A . P. Tripathi, 2 0 0 8 ).

There are fundamental but significant changes underway in India’s econom y. In January

2 0 0 6 , the governm ent announced that foreign com panies can own up to 51 percent o f a

single brand retail com pany, such as Nike o r Adidas. This decision would certainly

encourage retailers such as Zara (India today, A ugust, 2 0 0 5 ) and Gap (M arketing W hite

B oo k , 2 0 0 6 ) to enter this market. A ccording to a report T esco w as planning to enter the

m arket through a partnership with H om e C are Retail M art Pvt. Ltd and exp ects to open

5 0 stores by 2 0 1 0 (E u ro monitors report, 2 0 0 6 ).

It is difficult to fit a successful international format directly and exp ect a similar

perform ance in India. The lessons from multinationals expanding to new geographies

also point to this. F o r exam ple, W al-M art is highly successful in U S A but the story is

different in Asian countries like India and China. Therefore, it is important for a retailer

to look at local conditions and insights into the local buying behavior before shaping the

form at ch oice (M arketing W hite B o ok 2 0 0 6 ), Considering the diversity in term s o f taste

and preferences prevailing in India, the retailers m ay go for experim entation to identify

the winning form at suited to different geographies and segm ents. F o r exam ple, the taste

in south is different from that in north and this brings challenges to the retailers.

Therefore, m ost o f grocery retailers are region centric at this point in time.

2.2.2 Retail Formats

The ever changing consum er’ s psychographic variables like activities, interests, opinions,

values and lifestyles have also com pletely changed the retail form ats in India. In the post­

liberalization, consum er buying behavior and lifestyles in India too are changing and the

concept o f "value for m oney, product selection, quality o f service and value for tim e" is

fast catch in g on in Indian retailing. Thus, it is imperative to understand the m odem

form ats, (a ) C onvenience Stores: These stores have an area o f 5 0 0 - 1 ,0 0 0 sq. ft, usually

located near residential areas o r in petrol bunks. They are open for long hours e .g .. Speed

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M art and In and Out. The prices are generally higher and volum es are low-to-m edium .

M om and Pop stores are informal versions o f convenience stores, (b ) Supermarkets;

These stores operate in an area o f 8 0 0 -5 ,0 0 0 sq. ft. They are self- service, low cost, low

m argins and high volum e operator’s e.g .. Food W orld, Food B azaar and N ilgiri’s, (c )

H yperm arkets: These are the largest stores offering food as one o f their categories in an

area o f 4 0 ,0 0 0 -7 5 ,0 0 0 sq. ft. e.g.. B ig B azaar and Giant (L am b a, 2 0 0 3 ).

One o f the consequences o f the intense transform ation experienced by the retail sector in

recent decades has been the diversification o f store form ats (K um ar, 1 9 9 7 ; M organosky,

19 9 7 ). F o r exam ple, in the con text o f purchasing groceries, the introduction o f the

supermarket as a generic self-service form at w as followed by the hyperm arket as a larger

version o f superm arket and the developm ent o f the discount store as a low -price-oriented

supermarket. Although definitions o f this store form ats, o r types, are often inexact and

som etim es confiising (John Daw son, 2 0 0 0 ), they reveal the increasing variety o f store

m odels in the ever m ore heterogeneous retail market.

The retail form at is the store "package" that the retailer presents to the shopper. A form at

is defined as a type o f retail m ix, used by a set o f retailers (M ichael L ev y & W eitz, 2 0 0 2 ).

Store Form ats are form ats based on the physical store w here the vendor interacts with the

custom er (Enders & Jelassi, 2 0 0 0 ). It is the m ix o f variables that retailers use to develop

their business strategies and constitute the m ix as assortm ent, price, transactional

convenience and experience (M essinger & N arasim han, 1 9 9 7 ). Therefore, each retailer

needs to evaluate the enablers and deterrents in the retail m arketplace. This primarily

involves identifying the key drivers o f grow th, the shoppers’ profile and shopper

expectations. It also m eans evaluating the nature o f com petition and challenges in the

m arket place. Then the retailer decides the elem ents o f the retail m ix to satisfy the target

m arkets’ needs m ore effectively than its com petitors.

A ccord in g to, the evolution o f the shopping center into its contem porary form began in

the 1 9 5 0 ’s. T he biggest change in retail establishments w as the developm ent o f regional

shopping m alls with full line departmental store anchors, multiple levels, and an enclosed

clim ate controlled atm osphere including pedestrian hallw ays lined with shops on both

sides. T o deal with the em erging com petition and changing dynam ics o f the m arket.

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developers had to not only sell the goods people wanted to buy, but also create a unique

atm osphere that would tem pt people to go to the stores. In her discussion about the

growth o f suburban regional m alls, Cohen ( 1 9 9 6 ) says that m alls w ere built to deal with

the inefficiencies o f the downtown by centralizing control and to make sure there was

plenty o f parking, shopping w as safe, and congestion m inimized. They w ere designed to

idealize the downtown shopping experience by directly catering to consum er needs.

E arly shopping cen ter developm ents can be classified into four m ajor types o f shopping

centers. The neighborhood center is a relatively small center catering to a local area. The

purpose o f the center is to cater to peoples’ everyday needs. The size o f the center allows

for one anchor store that is typically a supermarket. Com m unity centers offer a range o f

goods from general m erchandise to convenience goods. These centers contain at least two

anchors that are generally discount department stores o r hom e improvement stores.

Regional centers are m alls com prised o f at least tw o anchors, usually full line department

stores. The types o f goods they sell include general fashion m erchandise and accessories.

Super-regional centers are very sim ilar to regional centers in that its prim ary products

sold are general fashion m erchandise goods. Super-regional centers have at least three

full line department anchor stores and have m ore variation in the types o f goods sold

(IC S C , 2 0 0 4 ).

The Indian retail industry is divided into organized and unorganized sectors. Organized

retailing refers to trading activities undertaken by licensed retailers, that is, those who are

registered for sales ta x , incom e tax , etc. These include the corporate-backed

hyperm arkets and retail chains, and also the privately owned large retail businesses.

Unorganized retailing, on the other hand, refers to the traditional form ats o f low -cost

retailing, for exam ple, the local K irana shops, ow ner manned general stores, Paan/Beedi

shops, convenience stores, hand cart and pavem ent vendors, etc (A Report on Indian

Retail Industry, 2 0 1 0 ).

D . M . Lew ison ( 1 9 9 7 ) highlights the im portance o f the form at to retail com petition:

"Com petitive advantages are realized by creating a retail form at that is tailored to specific

needs o f a carefully determined segm ent o f the total m arket". "Retail form ats encom pass

the total m ix o f operating and m erchandising tactics and practices used by the retail firm

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to distinguish and differentiate itself from other com peting retail form ats" D. M. Lew ison

( 1 9 9 7 ). Form ats can be seen as "com binations o f technologies" and retailing involves the

bundling o f these technologies in w ays considered m ost appropriate for the marketplace

(G ary D avies & B rook s, 198 9 ; J. D awson, Larke, & M ukoyam a, 2 0 0 6 ). View ing them in

this w ay can help us to understand form at variation. In a m ore detailed consideration o f

the nature o f the form at, Goldman view s it as consisting o f tw o parts: the offering

(extern al) and the know -how (internal) (G oldm an, 2 0 0 1 ). The first includes elements

such as product assortm ent, shopping environm ent, service, location and price. The

second part, the know -how , he considers to determine a retailer’s operational strength and

strategic direction.

The literature on form at ch oice differentiates across various store form ats, (S . Tripathi &

Sinha, 2008) such as convenience stores, supermarkets, supercenters and m ass

m erchandisers. The convenience stores have the low est breadth o f assortm ent, but the

highest p rice, while supermarkets have higher breadth as com pared to convenience stores

but low er prices (Bhatnagar & R atchford, 2 0 0 4 ) Super centers are differentiated from the

traditional superm arkets, as they have the offer items at low er prices and offer one-stop

shopping (C arpenter & M oore, 2 0 0 6 ). M ass m erchandisers while offering, the lowest-

prices also offer a one-stop convenience (F o x et al, 2 0 0 4 ), how ever they are generally

located in out o f town locations, and the distances to be traveled are therefore larger. The

classification in the literature is not very rigid, for exam ple M essinger and Narasimhan

( 1 9 9 7 ) dem onstrated, that superm arkets ow e their success to one-stop shopping, it seem s

the term s have been used loosely.

The different dem ographic and socio econom ic factors can affect the form at choice and

the store ch oice in tw o different w ays. One is that these factors directly affect the format

and the store ch oice. The other w ay is that, these affect the shopping basket, and the

tim ing o f the shopping trip, and therefore indirectly affect the form at ch oice (S . Tripathi

& Sinha, 2 0 0 8 ).

D em ographic and socio econom ic factors can be: fam ily size and com position, incom e

level o f the fam ily, Em ploym ent status o f the fam ily m em bers (S . Tripathi & Sinha,

2 0 0 8 ).

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2 .2 .3 C lassificatio n o f R etail F o r m a ts

Retail form ats are likely to vary between countries. Retail stores com e in all shapes and

sizes and can be classified by the length and breadth o f their product assortments. The

m ajor types o f retailers, as defined by K otler (1 9 9 1 ), are presented below:

D e p a rtm e n ta l S to re s : carry several product lines, typically clothing, home furnishings,

and household goods. E ach line is operated as a separate department m anaged by

m erchandisers or buyers o f the products being sold in the department. Department stores

seek to enhance custom er service and satisfaction in order to shift the focus aw ay from

price. A "departm ent store" is interpreted here as a store that sells apparel and accessories

along with household goods and electronics (K o & K incade, 1997).

A department store is one o f the m ost com plicated retail formats catering to the m ost

diversified set o f consum er needs and is a large retail unit with an extensive assortm ent

(width and depth) o f goods and services that are organized into separate departments for

purposes o f buying, prom otion, custom er service and control under direct m anagem ent. It

has the greatest selection o f any general m erchandise retailer and often serves as the

anchor store in a shopping centre or district. D epartm ent stores usually sell products

including apparel, ftimiture, appliances, electronics, and additionally select other lines o f

products such as paint, hardware, toiletries, cosm etics, photographic equipment,

jew ellery, toys, and sporting goods.

S p ecialty S to re s : carry a narrow product line with a deep assortm ent within that line for

specific target m arkets. Specialty stores are not only types o f stores, but also a method o f

retail operation specializing in a given type o f m erchandise.

D iscou n t S to re s : are large-scale retailing institutions that have a broad but shallow

product assortm ent, and offer low prices and few custom er services. D iscount stores

regularly sell their m erchandise at low er prices by accepting low er margins and selling at

higher volum es.

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S u p e rm a rk e ts : are relatively large, low -cost, low-m argin, high-volum e, self-service

operations designed to satisfy consum ers’ needs for food, laundry, and household-

m aintenance products. M odem supermarkets are planned for maxim um efficiency for

both retailers and shoppers.

H y p e rm a rk e ts : are very large stores that com bine supermarket and discount retailing. In

addition to food, hypermarkets carry furniture, appliances, clothing, and other products.

C on ven ien ce S to re s: are small self-service stores that carry a selection o f the most

com m only needed household products. Typically, convenience stores are located in

residential areas and are open many hours each day and usually seven days a week. These

stores must charge relatively high prices to make up for higher operating costs.

Consum ers use convenience stores for fill-in purchases at o ff hours or when time is short

and they are willing to pay for the convenience.

E -R e ta ilin g : The importance o f internet retailing is growing all over the world (A P

Tripathi, 2 0 0 5 ). Som e internet retailers such as e B a y and rediff.com are providing a

platform to vendors to sell their products online and they do not take the responsibility o f

delivering the product to buyer. They provide virtual shopping space to the vendors. On

the other hand online retailers like am azon.com and w alm art.com have to maintain their

warehouse to stock products and take the responsibility o f delivering products to the

buyer. So, m ost o f the brick and m ortar stores are entering into online retailing as they

have physical Infrastructure and they can use that to capture additional consum er wallet.

Other types, classification and characteristics o f retail form ats have been shown in table

2.1 in next page.

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 Table 2.1 Characteristics of Retail Formats
Retailing Management, Tata McGraw Hill, 2009

Floor Space The Value

Retail Format Description Examples
(Sq. ft) Proposition
Shopping Mails 50,000 An encJosure having different V a rie ty o f Phoenix
formats of in-store retailers shops Market City,
more than (Specialty stores. available to Inorbit Mall,
Departmental Stores & each other. Crossroads,
100,000 Hypermarkets), all under one R-mall,
roof In addition, this would Sahara Mall,
have restaurants & Food Metropolitan
Courts, entertainment zones & Mall, The
multiplexes along with huge Forum &
parking plazas. Garuda Mall

Hypermarkets 25,000 The Hypermarket format Low prices, Big Bazaar,

represents a supermarket that vast choice D-Mart,
more than has features of both a available Reliance
supermarket and a department including Mart, Star
100,000 store. A hypermarket can be services such Bazaar &
termed as a big discount store as cafeterias. Hypercity
that stocks about 60% percent
food and 40% percent non­
food stocks.

Departmental 20,000 Large stores having a wide One stop Shoppers

Stores variety of products, organized shop catering Stop,
50,000 into different departments such to varied Pantaloons,
as clothing, house wares, consumer Ebony,
furniture, appliances, toys, etc. needs. Westside,
Globus,
Pyramid &
Lifestyle

Supermarkets 1000 Extremely large self-service One stop Food Bazaar,

retail outlets. These are located shop catering Spencer’s
5000 in or near residential high to varied Daily,
streets. These stores today consumer Subhiksha,
contribute to 30% of all food needs Reliance
& grocery organized retail Fresh
sales.
Convenience 400 Small self-service formats Convenient Nilgiri’s &
Stores located in crowded urban location eind 24/7.
2000 areas. They stock a limited extended
range of high-tumover operating
convenience products. Prices hours for
are slightly higher due to the seven days a
convenience premium. week.

Page 41 of 325
 Table 2.1 Characteristics of Retail Formats cont....

Floor Space _ . The Value

Retail Format Examples
(Sq. ft.) Proposition

Discount Small Discount stores or factory Low Prices The Loot,

Stores/Multi Stores outlets, offer discounts on the M y Dollar
Brand Outlets 1200- M R P through selling in bulk Store, Brand
(M B O ’s) 2000 reaching economies of scale or Factory,
& excess stock left over at the Mega Mart
Large season. & Max
Stores Retail.
20,000 -
50,000

Specialty Small Sell specific merchandise with Greater Crossword,

Stores Stores focus on a single category. choice to the Landmark,
1200- Carry most of the brands consumer, Books &
2000 available comparison Beyond,
& between Music
Large brands is World, Kids
Stores possible Kemp&
15,000- Planet M
45,000

Branded Stores Less than Exclusive showrooms either Complete Nike,

1500 owned or franchised out by a range Adidas,
manufacturer available for Levi’s,
a given Kuoton’s &
brand, Provogue
certified
product
quality

Kiosks & Food Less than Kiosks & Food Court Counters Convenient Com Man,
Court Counters 1500 are usually retail outlet eating joints Mr. Orange,
structures, which are open on in the Banana Leaf,
all sides and mostly engage in vicinity of Subway,
selling consumer goods like shopping Pizza Comer,
edibles and snacks, locations. Baskin
newspapers and magazines, Robbins, etc.
etc.

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2 .2 .4 New R etailin g F o r m a ts

The practice o f retailing is continuously evolving. N ew form ats are bom and old ones die.

Incessant pressure to im prove efficiency and effectiveness and a continual effort to serve

the custom er better forces the retailers to find new w ays o f doing business. This has also

resulted in a shortened lifecycle for retail formats. F o r exam ple, in the late 1 9 8 0 s m ost

retail experts agreed that hyperm arkets would be retailing’s success story o f the 1990s.

H ow ever, despite their overw helm ing success in Europe and their limited success in the

United States, these m ega stores w ere retailing’s biggest failure in the 1990s. The

custom ers were unnerved by the sheer size o f these stores. In addition, category killers

offered greater selection and w holesale clubs offered better prices, while supermarkets

and discounters offered m ore convenient locations. A nother retail form at that didn’t

achieve the su ccess predicted w as the off-price retailer because the regular m erchants,

including discounters, becam e m ore price-com petitive on the brands the off-pricer w as

currently selling. Although these retailing form ats have not lived up to expectations,

many other new form ats are em erging.

S u p e rc e n tre s : w hich is a one-stop com bination o f supermarket and discount department

store that carries from 8 0 ,0 0 0 to m ore than 1 0 0 ,0 0 0 products (ranging from televisions to

peanut butter to fax m achines), are new the form at for the m ass m erchants (Dunne &

Lusch, 2 0 0 8 ).

R e cy cled M e rc h a n d is e R e ta ile rs : a product o f great depression, w hich sell ca s t-o ff

clothes; furniture, sporting goods and com puters. They include pawnshops, thrift shops,

consignm ent shops and even flea markets. Due to their very small numbers just a decade

ago, recycled m erchandisers have experienced the fastest growth o f any retail form at over

the past five years (W all Street, June 2 0 0 0 ).

L iq u id a to rs : a retail form at that com es in and liquidates leftover m erchandise when an

established retailer shuts down or downsizes. They m ake their m oney by seldom paying

m ore than 3 0 cents on the w holesale price for the closeout retailers. They are often called

retailing’ s undertakers o r vultures. R etailers utilize the services o f liquidators because

running closeouts requires som e special retailing skills. Liquidators have a talent for

pricing m erchandise and estim ating the expense o f everything from ad budgets and

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payrolls to utility bills. Liquidators also have to develop special incentive plans to make it

m ore profitable for store personnel to stay and work rather than quit or walk o ff with

m erchandise. (Business W eek, January 19 9 6 ).

V id eo K io sk s: "The video kiosk is a freestanding, interactive, electronic com puter

terminal that displays products and related information on a video screen. It often uses a

touch screen for consum ers to m ake selections. Video kiosks can be situated anywhere

(from a store aisle to the lobby o f a college dorm itory to a hotel lobby). They require

enable consum ers to place orders, com plete transactions (typically with a credit card) and

arrange for products to be shipped. K iosks can be linked to retailers’ com puter networks

or tied in to the web. M any shopping centers and individual store-based retailers are

setting up video kiosks in open hallw ays" (Sinha & K um ar, 2 0 0 4 ).

C a r B o o t S ales: "C ar B o o t sales are becom ing increasingly popular, where often a

vehicle is modified for the sale o f a variety o f m erchandise like books, m agazines,

clothes, m usic cassettes, exp ort surplus and/or rejects, fast food item s". The boot sale

boom has given softw are pirates, for exam ple, "an ideal outlet and quick getaw ay". It also

provides opportunities for small traders who m ay lack the capital for perm anent prem ises.

They are often situated near the university cam pus and com m ercial areas. Its target

audience is low er middle and middle class custom ers looking for "value for m oney

products" (Sinha & K um ar, 2 0 0 4 ).

M ob ile V a n s : "M obile V ans are modified vehicles usually poultry and m eat products,

library books, etc. They m ove from location to location, for fixed periods o f tim e, thus

providing convenience by com in g closer to custom ers" (Sinha & K um ar, 2 0 0 4 ).

2 .2 .5 G lob al R etailin g

Due to the ongoing p rocess o f globalization the retail sector has grown impressively

during the last decades, w hich has resulted in the presence o f retail multinational

com panies (M N C s), (e .g ., W al-M art, A hold, T esco, Carrefour, e tc .) in developing

m arkets (Kaliappan, A lavi, Abdullah, & Zakaullah, 2 0 0 9 ). Consistently, the number o f

acad em ic publications concerning the retail industry has increased significantly.

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E ver since the 1 9 7 0 s, retailers have been expanding their operations internationally

(C h oi, D aw son, L arke, & M ukoyam a, 2 0 0 2 ; Seth & Randall, 2 0 0 1 ). Choi et al. (2 0 0 2 )

points out that the internationalization process started with selling products abroad,

sourcing from foreign countries for resale, and the internationalization o f managerial

ideas and m anagers. E specially the operation o f shops in foreign countries by m edium - en

large-sized firm s is likely to increase substantially over the next decades. Although this is

still a relatively new phenomenon associated with econom ic globalization trends, the

impact o f increasing internationalization o f shop operation is a long-term process that

affects the retail sector rem arkably (C hoi et al., 2 0 0 2 ).

Influenced by different push and pull factors retailers have internationalized their

activities. The main push factors for retailers to expand into em erging m arkets are high

com petition and low profitability, i.e., m arket saturation, low growth in the dom estic

m arket, and restricting regulation on store developm ent (Kaliappan et al., 2 0 0 9 ).

E sp ecially retailers from European countries have been influenced by these factors and

are m ore prone to globalization than A m erican retailers.

Consequently, the main share o f global retailers is based in Europe. R etailers from

G erm any and F ran ce have faced restrictive planning controls. French hyperm arkets, for

exam ple, cannot easily open new stores in their dom estic m arket due to governm ent

regulations (K . D avies, 2 0 0 0 ; D eloitte, 2 0 0 8 ). M oreover, the limited m arket size and

m aturity in W estern Europe pushed on the need for transnational expansion (Seth &

Randall, 2 0 0 1 ). On the other hand, the m ost important factors that pull retailers from

developed countries to expand into em erging m arkets are related to business growth

opportunities, rapid urbanization, high population growth rates, rising incom es,

W esternization o f lifestyles, increasing demand for fast food and the relaxation o f

investm ent rules (K aliappan et al., 2 0 0 9 ). O bviously, fast growing consum er m arkets are

particularly attractive to foreign retailers, since these could be exploited in order to

leverage existing assets such as global purchasing relationships, a global supply chain, a

unique product, a unique form at or a w ell known brand. In addition, foreign retailers can

relatively easily gain leading positions in unsophisticated markets (D eloitte, 2 0 0 8 ).

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A lthough m any retailers have expanded their businesses internationally, the industry is

still less global than m any com parable consum er-oriented sectors (e.g ., hospitality, food

service, telecom m unications e tc.). This is particularly due to the unique com plexity o f the

retail business, in w hich maintaining a close and personal relationship with consum ers is

essential. In a foreign country, this is even m ore challenging than in a retailer’s dom estic

market.

M oreover, global retailing entails m ore, as the dom estic markets o f W estern, retailers are

stagnating and becom ing saturated (D eloitte, 2 0 0 8 ). A ccording to (Choi et al., 2 0 0 2 ),

truly global retailers will em erge over the next decades as European and A m erican

retailers rapidly expand into E ast A sia, South A m erica and m ove slowly into India and

A frica. Interestingly, A sian retailers are also expanding their businesses within their

broad culture realm , due to which the level o f com petition is intensified even m ore.

Larke ( 2 0 0 6 ) em phasizes the rapid pace at which the E ast Asian econom ies are

developing and, accordingly, the opportunities for foreign retailers. H ow ever, it is

impossible to consider the region as a single w hole (D avies, 2 0 0 0 ). The extent to which

the separate econom ies are developed is rather diverse. Obviously, the main focus o f

attention, both academ ically and in term s o f practical retail developm ent, has been on

China. Larke (2 0 0 6 ) stresses the need to fill the gap in literature that exists concerning the

Indochina countries and their retail m arkets.

2.2.6 Impact of the Global Economic on Retailing

The global econ om ic crisis has seriously affected retail trade, especially in the developed

world. Due to the global econom ic slowdown, reflected through disappointing GD P

growth figures, jo b uncertainty, and drop in incom e retailers have been hit hard. That is,

consum ers have been spending less across all retail segm ents (A .T .K eam ey , 2 0 0 9 a ).

Retailers have reacted by dram atically cutting prices, which has resulted in profit losses

and hurt brand im ages. E ven W al-M art’ s sales in the first quarter o f 2 0 0 9 w ere flat

com pared to previous years. A lthough, it is expected that in the developed world

consum ption levels will structurally decline com pared to saving levels, retailers can still

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ch oo se to either execute an offensive or a defensive strategy during econom ic recessions

(A .T . K earney, 2 0 0 9 b ).

During tim es o f econ om ic recession, innovation levels are usually increasing, which in

the case o f retailers leads to the developm ent and introduction o f new products, new

market entries and organizational reform s (D avies, 2 0 0 0 ; A .T . K earney, 2 0 0 9 b).

M oreover, even though global retail has been hit hard by the econom ic crisis, em erging

econom ies are still attractive to enter. Leading global retailers are required to carefully

balance their activities within developed and developing m arkets in order to maintain

their leading positions (A .T . K earney, 2 0 0 9 a ).

Looking at Indian retail in the backdrop o f the worldwide econ om ic slowdown, it can be

concluded that the current econom ic environment has raised a fear o f dip in consumption

and slowdovm o f growth for Indian organized retailers. A ccord in g to the R etailers’

A ssociation o f India, growth in the R s 4 5 ,0 0 0 crore organized retail sector has slowed

down to 5 percent in the fourth quarter o f 2 0 0 8 - 2 0 0 9 , a far cry fi-om the 3 5 percent

grow th recorded in January-M arch 2 0 0 8 . A report by K PM G (M arch , 2 0 0 9 ) states that

the ongoing slowdown in the econom y has taken a m ajor toll on the dissemination o f

India’s organized retail. The report also revealed that India’ s investment flow in

organized retailing, w hich w as expected to touch $ 2 5 billion over the next 5-year period,

is showing signs o f slowdown.

2.2.7 Summary
India has witnessed a boom in organized retail trade in the last 5 years. M ore and m ore

players are com ing into the retail business in India to introduce new form ats like m alls,

superm arkets, discount stores and department stores. The retail form at that has shown the

m axim um growth am ong all is the multipurpose shopping com p lexes or the shopping

m alls (M ajum dar, 2 0 0 5 ). India is currently the ninth largest retail m arket in the world and

it is nam es o f small tow ns like Dehradun, Vijayaw ada, Lucknow and N asik that will

pow er India up the rankings soon (A R eport on Indian R etail Industry, 2 0 1 0 ).

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N ew form at retailing in India is showing very interesting trends. Rapid growth is

occu rrin g not only in term s o f purchases, but also in term s o f the type o f store formats

that retailers are bringing into the m arket. W hat is also noteworthy is that alm ost all retail

com panies are offering multiple form ats. F o r instance, the Future Group, the owners o f

B ig B azaar and Pantaloon stores, are present in about ten form ats. Sim ilarly, Reliance

and R aheja offer at least five form ats. C ustom ers are sw itching not only within formats

but also across form ats with the latter being witnessed in the m ajority o f incidences

(A nand & Sinha, 2 0 0 9 ).

Traditional markets are making w ay for new form ats such as departmental stores,

hyperm arkets, supermarkets and specialty stores. W estem -style m alls have begun

appearing in m etros and second-rung cities alike, introducing the Indian consum er to an

unparalleled shopping experience (A Report on Indian Retail Industry, 2 0 1 0 ).

The Indian retail sector is highly fragm ented with 9 7 percent o f its business being run by

the unorganized retailers like the traditional fam ily run stores and co m e r stores. India is

the 4th largest econom y as regards G D P (in PP P term s) and is expected to rank 3rd by

2 0 1 0 ju st behind U S and China. On one hand where m arkets in Asian giants like China

are getting saturated, the A T K earney's 2 0 0 6 Global Retail D evelopm ent Index (G R D I),

for the second consecutive year Placed India the top retail investm ent destination am ong

the 3 0 em erging markets across the world.

L arg e Indian players like R eliance, A m banis, K R ahejas, Bharti A irT el, ITC and many

others are m aking significant investm ents in this sector leading to em ergence o f big

retailers w ho can bargain with suppliers to reap econom ies o f scale. H ence, discounting is

becom ing an accepted p ractice. Proper infrastructure is a pre-requisite in retailing, which

would help to m odernize India and facilitate rapid econom ic grow th. This would help in

efficient delivery o f goods and value-added services to the consum er making a higher

contribution to the GDP.

International retailers see India as the last retailing frontier left as the C hina’ s retail sector

is becom ing saturated. H ow ever, the Indian Governm ent restrictions on the FD I are

creating ripples am ong the international players like W al-M art, T esco and m any other

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retail giants struggling to enter Indian markets. A s o f now the Government has allowed

only 51 percent FDl in the sector to ‘one-brand’ shops like Nike, Reebok etc. However,

other international players are taking alternative routes to enter the Indian retail market

indirectly via strategic licensing agreement, franchisee agreement and cash and carry

wholesale trading (since 100 percent F D l is allowed in wholesale trading) (A Report on

Indian Retail Industry, 2010).

India’s retail sector is wearing new clothes and with a three-year compounded annual

growth rate of 46.64 percent, retail is the fastest growing sector in the Indian economy (A

Report on Indian Retail Industry, 2010).

Based upon theoretical foundations and activities o f past research, as well as a

consideration o f changing competitive retailing environments, future research should

continue to develop the understanding of the retailing environment by using the concept

of customer-based retailer equity to add value to the scientific and practical knowledge of

retailing. Retailers have to focus their attention and resources on establishing retailer

brands to achieve sustainable growth and success in this increasingly competitive retail

environment.

In an increasingly competitive retail market, in which innovation is readily copied,

retailers have turned to branding in an attempt to differentiate themselves from

competitors. In today’s competitive retail environment, the concept of brand/retailer

equity is an important source of strategic intelligence for marketers.

2 .3 S to re Im a g e

This chapter provides an overview of the relevant literature relating to this study, with

special emphasis on establishing the domain specification and construct definition of

store image. Researcher identifies and discusses existing knowledge, definition and

underlying structure of store image from the review of available literature. In addition,

identify and discuss existing knowledge o f store image dimensions and sub-dimensions

from the review o f available literature.

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The study o f store im age is necessary for the m anagem ent o f any com pany in order to

have a clear picture o f the com pany's im age. Store im age as a concept has been

considered as one o f the m ost important variables and determinants in the developm ent o f

retail strategy and econom ic su ccess in retailing, while custom er satisfaction has been

recognized as a m ajor su ccess factor in keeping and augmenting the clientele base. Thus,

in m ature and highly com petitive industries such as retailing, it becom es increasingly

important to understand the dynam ic structure o f the latter by studying forces or

influences contributing to store im age formation so that a m ore effective image creation

and strategy can be articulated. Store image has been interpreted differently depending

on the scope o f the study.

2.3.1 Concept of Image

D ichter ( 1 9 8 5 , p. 7 6 ) w rote that "[im age] describes not individual traits or qualities, but

the total impression an entity m akes on the minds o f others... an im age is not anchored in

ju st objective data and details. It is the configuration o f the whole field o f the object."

Seem ingly paradoxical to this "w hole is greater than the sum o f its parts" idea is the

belief that image is an abstraction that sim plifies com plex information (Lindquist, 19 7 4 ;

M arks, 1 9 7 6 ; Z im m er & Golden, 1 9 8 8 ).

" . . . im age . . . is the totality o f a stakeholder’s perceptions o f the w ay an organization

represents itself, either deliberately . . . or accidentally . . . Im ages form through encounters

with characteristics o f the organization . . . the net result o f the interaction o f all the

experiences, beliefs, feelings, knowledge and impressions that each stakeholder has about

an organization (M arkw ick & Fill, 1 9 9 7 )."

Boulding (1 9 5 6 ) argued that im age is an important variable in the functioning o f human

behavior. This author emphasized the relationship between im age and behavior, stating

"w hat the individual believes to be true is true for him ". Furtherm ore, he argues that

"Im ages can only be com pared with im ages and can never be com pared with any outside

reality. F o r any individual organism or organisation, there are no such things as 'facts'.

There are only m essages filtered through a changeable value system ". The accep tan ce o f

this position in the field o f m arketing has been pervasive (Lindquist, 19 7 4 ). The term

Page 50 of 325
'im age' is currently used in a variety o f contexts: corporate im age, brand im age, public

im age, self-im age, and store-im age and so on. A s a whole, an image can be defined as

"the sum o f beliefs, ideas, and im pressions that a person has o f an object" (K otler &

C larke, 1 9 8 7 ).

Im age is generally conceived as "the transaction o f signals that are sent by a real-world

en tity", such as a firm, product/brand, or store and are received by a receptor (reference).

These signals are then organized into a mental perception o f the receiver. This process

im plicates three levels: the external w orld, the receiver's mind, and the output from the

com putation o f the tw o form er levels (S tem , Zinkhan, & Jaju, 2 0 0 1 ). The latter suggests

that "im age is generally conceived o f as the outcom e o f a transaction w hereby signals

emitted by a m arketing unit are received by a receptor and organized into a mental

perception o f the sending unit." In m arketing literature, an established definition o f image

is to a certain extent am biguous . B rokaw (1 9 9 0 ) viewed im age as a cognitive construct

and described it as "a mental representation o f w hat an entity is and w hat it offers". These

definitions emphasised one dimension o f im age and suggested that im ages are formed as

a resu ltof perceptual and cognitive evaluation.

O xenfeldt (1 9 7 4 ) outlines an eight step im age building program and suggests a number o f

potential dim ensions o f store im age and argued that image should be view ed as an overall

impression greater than the sum o f its parts. H is w ork states that an im age is m ore than

the sum o f parts. H e argues that it represents interaction between characteristics and

includes extraneous elem ents. Furtherm ore, it has em otional consent. Concluding, he

argues that im age is a com bination o f factual and emotional m aterial. This suggests that

consum ers will have both opinions and feelings tow ard certain stores which will

influence their perceptions. In this thesis I will follow this definition, based on this

definition, the author classified three potential dimensions o f store im age, w hich are;

tangible reality factors, intangible but genuine substantive benefits and fantasies.

A ak er ( 1 9 9 1 ) considered that the representations w hich build an im age can include

perception which m ay or m ay not reflect the objective truth. Im age as such suggests a

form o f current social knowledge shared by a group o f people. It can thus direct both

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behaviour and com m unication activity as it works towards the establishment o f a

com m on vision o f reality in a given social or cultural group (Ferrand & Pages, 19 9 9 ).

Scholars in several disciplines and fields now agree that the image construct has two

main com ponents: cognitive and affective evaluations, cognitive evaluation, also refered

to as perceptual evualuation,refers to beliefs and knowledge about an object, whereas

affective evaluations are related to an individual’s feelings and em otions toward an object

or idea. Both play a key role in the level o f satisfaction experienced (B aloglu & Brinberg,

1 9 9 7 ; Gartner, 1 9 9 4 ; H olbrook, 1 9 7 8 ; Zim m er & Golden, 19 8 8 ). M eanings o f a specific

geographic location m ay be distinguished into a cognitive and affective dimension as

well. People develop both cognitive and affective responses and attachm ents to

environments and places. The envirom entally based are viewed as the "environm ent past"

o f the individual, w here the past consists o f "the properties o f place that have supplied

biological, p sychological, social and cultural needs o f that individual" (Proshansky,

Fabian, & Kam inoff, 1 9 8 3 ). Holbrook ( 1 9 7 8 ) noted that in m arketing and consum er

behaviour, these tw o com ponents are treated under the label o f ‘beliefs’ versus ‘affect’ .

Som e authors (G artner, 1 9 9 4 ; Z im m er & Golden, 1 9 8 8 ) proposed that in addition to

cognitive and affective com ponents, an im age also includes a behavioural com ponent.

These authors described im age as consisting o f cognitive, affective and conative

com ponents. Im age is usually offered as influential but only as one construct o f

im portance on behaviour. Im age m ay affect behaviour, but is not a behaviour perse.

Dobni and Zinkhan (1 9 9 0 ) review ed consum er behaviour literature on product and brand

im age from the last 3 5 years. Their study revealed that image has been synonym ous with

perception, personality, sym bolic utility, psychological m eaning and attitude. They

concluded that im age is to a great extent a perceptual phenomenon w hich is formed

through consum ers' reasoned and em otional interpretation. Their study revealed the

follow ing important insights and inform ation: Firstly, image is a concept held by a

consum er. Secondly, im age has cognitive and affective com ponents. Thirdly, im age is

not inherent in the functional and physical attributes o f the product. L astly, they are argue

it rather has a function o f the interaction between marketing activities and ch aracteristics

o f the perceiver. Specifically product attributes, marketing m ix, personal values, previous

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experience and a number o f con text variables are believed to be am ong the factors .that

contribute to the developm ent o f im age. In relation to research,t he trend for measuring

image is m ore tow ard using quantitative techniques than qualitative ones.

A ccording to V escovi ( 1 9 9 5 ) im age could be considered as a result o f a four-stage

process:

1) S tag e o f th e w an te d im a g e : It includes the definition o f the image that the firm

wants to have over the target o f the elected m arker. It is the m oment o f planning

that goes through the specification o f the m ission, the choice o f the positioning

and the im age strategy.

2 ) S tage o f th e co m m u n ica te d im ag e: It identifies the passage from the planning

step to the realisation one. It concerns the specific actions o f com m unication o f

the im age, the m essage to use, the m edia, the factors o f im age at which to aim.

3 ) S tag e o f th e c o m p a re d im ag e : It concerns the m om ent at w hich the

com m unicated im age is com pared with all the im ages com m unicated by the

com petitors, with the ideal expected im age o f the consum er, with his/her

stereotypes and patterns o f reference.

4) S tag e o f p erceiv ed im a g e : It is produced by the subjective understanding that the

consum er allots to the com pared im age. The phase concerns any kind o f distortion

o f the m essages "noises", the psychological situation o f the consum er and other

factors.

In addition, several authors have equated im age with attitude o r an attitudinal construct.

Im age is defined as an overall attitudinal construct com prising perceptions o f an object's

attributes (Kunkel & B erry , 1 9 6 8 ; Steenkamp & W edel, 1 9 9 1 ). H ow ever, som e authors

do not agree with this proposition (B rok aw , 1 9 9 0 ; K otler et al., 1 9 9 3 ) and suggest that

image is an antecedent to attitude w hich m ay be affected by several other constructs

besides im age.

Im ages are form ed based upon physical attributes that act as stimuli and capable o f

developing certain associations in the mind o f individuals (N elson, 1 9 6 2 ). There are

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num erous com p lex psychological processes involved in image formation. The

relationship is labelled "im age" and m ay be pleasant or unpleasant. A ccording to W . H.

Reynolds (1 9 6 5 ), the im age form ation process is defined as the developm ent o f a mental

construction on the basis o f a few selected impressions am ong the flood o f total

impressions. These impressions are elaborated, embellished and ordered in the

individual’s mind. In another study, H irschm an (1 9 8 0 ) defined store im age as an image

developing formation and suggest that consum ers m ay m atch them selves with retail

stores according to their perceptions o f their own and o f the stores’ innovativeness. A lso

he cited that "a subjective phenomenon that results from the acquisition o f knowledge

about the store and in accord an ce with the consum er's unique cognitive fram ew ork".

Com bining the tw o approaches, the behavioural concept and the developing formation,

M azursky and Jacob y ( 1 9 8 6 ) proposed the meaning o f im age. A ccording to them , image

is:

"a set o f cognition and or affect which is inferred either from a set o f ongoing
perceptions and or memory inputs attaching to a phenomenon and which represents what
that phenomenon signifies to an individual".

This definition stresses tw o properties. One is that the image is only cognitive (i.e., this

store is a classic style) and does not imply an affective com ponent (i.e., I like or dislike

this store). The other property em phasises the process o f im age formation (M azursky &

Jaco b y , 1 9 8 6 ). The store im age form ation process is a subjective phenomenon taking

place in the perceived store and is believed to o ccu r in sequential manner. This finding

indicated that an individual uses different objective signals toconclude different image

aspects.

Kaul ( 2 0 0 6 ) implies that store im age formation can o ccu r in tw o w ays; Fist, "where

individual elem ents are evaluated and the separate attitudes are com bined in som e

meaningfiil m anner to form a store im age". Second, the store is perceived in som e

"sym bolic sense as a w hole, and the attitude to the whole that is the store im age then

im pacts the perception o f the individual elem ents which in turn reinforce o r alter the store

im age perception".

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 Table 2.2 Selected Definitions of Destination Image
Adapted and Modified from Gallarza et al. (2002) and Echtner et al. (1991)

Authors Image

Hunt (1971) Impressions that a person or persons hold about a state in which they do
not reside

Markin (1974) Our own personalized, internalized and conceptualized understanding of

what we know

Crompton (1977) Organized representations of a destination in a cognitive system

Lawson & Bond An expression of knowledge, impressions, prejudice, imaginations and
Bovy(1977) emotional thoughts an individual has of a specific object or place

Crompton (1979) The sum of beliefs, ideas, and impressions that a person has of a
destination

Dichter(1985) The concept of image describes not individual traits or qualities but the
total impression and entity makes on the minds of others

Embacher & Image is comprised of the ideas or conceptions held individually or

Buttle (1989) collectively of the destination under investigation; may comprise both
cognitive and evaluative components

Kotler, Haider, & The sum of beliefs, ideas, and impressions that a person has of a place
Rein (1994)

Gartner (1996), Image is consist of three hierarchically interrelated components:

(1993) cognitive, affective, and conative

Santos Arrebola A mental representation of attributes and benefits sought of a product

(1994)

Parenteau (1995) A favorable or unfavorable prejudice that the audience and distributors
have of the product or destination

Bologlu & An attitudinal construct consisting of an individual’s metal representative

McCleary (1999) of knowledge(belief), feeling, and global impression about an object or
destination

Beerli & Martin A mental picture formed by a set of attributes that define the destination
(2004 a, b) in its various dimensions.

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2.3.2 Concept of Store
There is a com m on them e within the literature that a store represents ‘the tangible and

intangible values o f the com pany’s com m ercial and retail organizational philosophy.

Given this, it could be considered as a brand, with all the associated com petitive

advantages that correspond to this entity. O perationally, a store's brand com petitiveness

can be viewed from the im age it transm its and the im pact it has in the minds o f

consum ers. H ow ever, as m arkets and consum er tastes vary between countries, there have

been calls for further inquiry into how the dom estic store brand im age, with its inherited

com petitive advantage, can be transferred abroad.

2.3.3 Concept of Store Image

This part includes the review o f articles related to origin, antecedent, definition and

evolution since its origin.

Studies o f retail im age have a long history. In 1 9 5 8 , starting with M artineau (1 9 5 8 ), in

his study on store im age, introduced the idea that stores ‘have personality’ . In his article

in the H arvard Business R eview , he defined store image as "the w ay in which the store is

defined in the shopper’s mind, partly by its functional qualities and partly by an aura o f

psychological attributes". The first refers to characteristics o f a store such as ch oice o f

product, price o f product, custom er service, and quality o f product. Psychological

attributes, also referred to as the store’s atm osphere, include the friendly service o f

em ployees, great sm ile o f cashiers or any interesting activities from store. He w as the

first author who applied im age ideas in the retail sales domain, and he called the force

w hich can affect the cu stom er’s decision-m aking as "store personality or im age". A lso,

he w as the first researcher w ho indicated that store im age consists o f the follow ing four

core com ponents: layout and architecture, sym bols and colours, advertising and sales

personnel. L ater research has debated whether store im age should be viewed as the sum

o f distinctive parts (Lindquist, 1 9 7 4 ; Oxenfeldt, 1 9 7 4 ), or as the overall perception that

consum ers have o f a store (D ichter, 1 9 8 5 ; D oyle & Fenw ick, 1 9 7 4 ).

O xenfeldt ( 1 9 7 4 ) sim ilar to M artineau (1 9 5 8 ) argued that im age should be view ed as an

overall impression greater than the sum o f its parts and suggested im age as "a

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com bination o f factual and em otional m aterial" and viewed image as a total impression

w hich is formed as a result o f the evaluation o f individual attributes which m ay contain

both cognitive and em otional content. This point o f view reinforces the b elief that many

custom ers will hold opinions about the store based on functional features. With a similar

point o f view D oyle and Fenw ick ( 1 9 7 4 ) conceptualized store im age as "a set or kind o f

attitude characterizing a person's overall impressions o f a store".

D ichter ( 1 9 8 5 ) provides a definition o f w hat im age is and w hat it is not; "It describes not

individual traits o r qualities, but the total impression an entity m akes on the minds o f

others ... an im age is not anchored in ju st objective data and details. It is the configuration

o f the w hole field o f the object" (p. 8 6 ).

A ccord in gly, B loem er and de R uyter ( 1 9 9 8 ) defined store im age as "the com plex o f a

consum er’s perceptions o f a store on different (salient) attributes", and report in their

study on the departm ent store consum ers that store im age affects satisfaction, which

subsequently has im pact on store loyalty. The store attributes o r characteristics that are

part o f the overall store im age are supposed to be different elem ents o f the retail

m arketing m ix. A distinct im age, which is based on the salient elem ents o f the retail m ix,

m ay exist within consum ers’ minds for each retail store (B loem er & de Ruyter, 19 9 8 ).

Therefore, the store im age dim ensions, as represent different store attributes or

ch aracteristics, are perceptions o f consum ers on prim ary m arketing activities o f a store.

B lo em er and de Ruyter ( 1 9 9 8 ) adopts G hosh’s ( 1 9 9 0 ) view and contend that store im age

includes the following com ponents: location, m erchandise, store atm osphere, custom er

service, price, advertising, personal selling and sales incentive program s.

M any scholars have attempted to identify the underlying dimensions o f store im age,

Jam es Jam es et al. ( 1 9 7 6 ) and Lindquist (1 9 7 4 ) argue that a store im age is not only a

sum m ation t o f the various perceptions o f attributes, but is also a function o f the

im portance w eights and interactions am ong these attributes has to be added to the

equation’ . The dominant attitudinal perspective that is taken in the literature treats store

im age as the result o f a multi-attribute model (Jam es et al., 1 9 7 6 ; M arks, 1 9 7 6 ). M arks

(1 9 7 6 ) concluded that the key factors o f store im age w ere fashion ability, advertising,

convenience, outside attractiveness, salesm anship, and service. M arks (1 9 7 6 ) captures the

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im portance and interaction perspective succinctly by stating, ("store im age" is not merely

the sum o f objective individuals associated with the stores; rather, a store’s im age is a

com posite o f dim ensions that consum ers perceive as a store. Store image is an overall

picture that is m ore than the sum o f the parts, for the parts interacts with one another in

the consum er’ s mind) Thus, this later perspective treated store im age as a fianction o f a

multi attribute model o f differently weighted subjective and objective store-related

attributes with ‘the interdependent dim ensions that com bine into an overall impression o f

the store’ .

Despite this increased focus on retail branding, how ever, the extant marketing literature

offers little insight into the concept o f retail brand equity.

R esearchers suggest that store im age o r store attributes affect store patronage behavior.

F o r exam ple, Kunkel and B erry ( 1 9 6 8 ) proposed that store image is a direct consequence

o f the consum er’s previous encounters and experiences with the store and thus

"rew arding consequences give rise to a favorable store im age w hich induces custom er

loyalty", w hile disappointing experiences result in a negative store im age and lead to the

consum er avoiding the particular store altogether. L essig (1 9 7 3 ) exam ined the

relationships, which exist between m easures o f store image and store loyalty and found

that the store im age m easured by store atm osphere, product, price, and promotion is

correlated with store loyalty. Store im age is an important com ponent in store loyalty,

(O sm an, 1 9 9 3 ) and he argued that custom ers’ patronage behavior tow ards a particular

store is dependent on their im age o f that particular store and determinants o f loyalty

patronage behavior.

The im portance o f the various aspects o f retail image in store ch oice has also been

identified (H ansen & D eutscher, 1 9 7 7 ; Lum pkin, Greenberg, & G oldstucker, 1 9 8 5 ;

Thang & T an, 2 0 0 3 ). F o r exam ple Thang and Tan (2 0 0 3 ) identified the following

attributes of store im age which affect consum ers’ preference for the stores:

merchandising, accessibility, reputation, in-store service and atm osphere o f the stores.

Furtherm ore, som e researchers have argued that custom er satisfaction acted an

intermediation role between store im age and custom er loyalty (B loem er & de Ruyter,

1 9 9 8 ; Chih-H on & C h ia-Y u , 2 0 0 5 ). N evertheless, when combined with the am ount o f

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satisfaction and as a m oderator variable, elaboration (i.e., motivation and ability)

strengthens the positive effect o f store satisfaction on store loyalty (B loem er & de Ruyter,

19 9 8 ).

The im age o f the store has been found to drive satisfaction, loyalty and store ch oice. The

m ore positive the store im age, the greater is the degree o f satisfaction and loyalty. Several

studies report direct linkages between store image and intensity o f store loyalty

(K orgaonkar, Lund, & P rice, 1 9 8 5 ; Kunkel & B erry, 1 9 6 8 ; F. D. Reynolds, Darden, &

M artin, 1 9 7 4 ).

Store im age reflects C onsum er’s perception o f a store in terms o f functional and

psychological attributes. The tangible attributes o f a store, such as m erchandise, location,

sales person, and displays are explicit and observable. The intangible aspects, such as

am bience, co-shoppers, and other psychosocial factors, are difficult to m easure and hence

m anage (M artineau, 1 9 5 8 ). The store im age is also affected by tenant m ix m alls with

anchor stores tends to absorb the image o f the anchor stores. A mall with a department

store as an anchor reflects an im age o f high quality m erchandise and custom er service. A

mall a price form at store as an anchor has an im age o f a low er price low service mall

(M alcolm & M oham m ed, 1 9 9 4 ).

Martineau (1 9 5 8 ) uses tw o key phrases in characterizing the im age. The first is

"functional qualities", "Functional" refers to such store elements as m erchandise

selection, price ranges, credit policies, store layout, and other such qualities that can be

m ore o r less objectively com pared with those o f the com petitors, "Q ualities" through its

plurality implies that m ore than one such functional descriptor m ay be operating, and

further that the use o f this term m ay be visualized on a good-bad scale with respect to

each o f the functional descriptors. R eferring to the second key phrase, "psychological

attributes", one would consider such things as a sense o f belonging, the feeling o f

warm th o r friendliness, o r possibly a feeling o f excitem ent o r interest. "A ttributes" is

also used in plural, and one could interpret this to mean that m ore than one such

dimension is at w ork. The definition implies that consum ers form a store im age on both

a fiinctional plane and on a psychological o r em otional plane sim ultaneously (Lindquist,

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1 9 7 4 ), just as humans can have both a utilitarian and hedonic nature and th e im a g e o f a

p e rs o n c o v e r s b oth .

L ater, D a rd e n and B a b in (1 9 9 4 ) divided these tw o qualities as "affective

qualities" and "functional qualities", and suggested that affective quality o f a retail store

is important and can also be m easured, just like fiinctional quality, which w as used

predom inantly to explain retail personality (im age). Darden and Babin (1 9 9 4 , p. 102)

pointed out that by considering the affective quality o f a retail store, along with

traditional functional environm ental perceptions, a m ore com plete representation o f a

sto re ’ s m eaning can be obtained. They provide evidence that consum ers ascribe

affective qualities to retail environm ents.

Grew al, L evy , and Lehm ann ( 2 0 0 4 ) has defined the store im age as a cum ulative

assessm ent o f the store as a brand, and the choices o f the store and m anufacturer’s brand,

offered by the Store location, easy access to the store and safe parking, appropriate

m erchandise, correct pricing, good levels o f service and effective prom otion. They have

also been identified as critical attributes that help shape store im age (Ou «& Abratt, 2 0 0 6 ).

D oyle and Fenw ick ( 1 9 7 4 ) conceptualized store im age as a set or kind o f attitude

characterizing a person's overall im pressions o f a store. Jam es et al. ( 1 9 7 6 ) proposed a

m ore global view and defined store im age as a com p lex bundle o f meanings representing

the store for consum ers.

Store im age is a critical com ponent in both store ch oice and store loyalty and generally

accepted as a concept to acad em ic researchers and business practitioners, (e .g ., D oyle &

Fenw ick, 1 9 7 4 ; N aresh K . M alhotra, 1 9 8 3 ; N evin & Houston, 1 9 8 0 ; Osm an, 1 9 9 3 ;

Stanley & Sew all, 1 9 7 6 ). M any researchers subscribe to the view , originally proposed by

M artineau (1 9 5 8 ), and later Kunkel and B erry ( 1 9 6 8 ) Applied learning theory on the

store im age, defined store im age as "the total conceptualized o r expected reinforcem ent

that a person associates with shopping at a particular store", and investigated store im age

through the perspective o f learning theory, w hich led to the results that the action

(shopping behavior) in a specific environm ent (store im age) can be learned. M ost

behavior is learned, they thought the im age w as one kind o f difference stimulating and it

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took action under som e kind o f situation that m ay obtain the anticipated effect. Thus, the

original conceptions essentially argued that store im age is a developed from consum ers’

objective and subjective perceptions learned over tim e. Lindquist (1 9 7 4 ) concluded that

store im age is "com p lex by nature and consists o f a com bination o f tangible o r functional

factors and intangible or psychological factors that a consum er perceives to be present".

B a s e d on in depth review o f the lite ra tu re , m ost definitions stress that store image is the

con su m er’s perception o f a store, based on a set o f salient attributes (B loem er &. de

Ruyter, 1 9 9 8 ; Byoungho & Jai-O k, 2 0 0 3 ; Faircloth, Capella, & Alford, 2 0 0 1 ; Jam es et

al., 1 9 7 6 ; Osm an, 1 9 9 3 ). H ow ever, researchers contend that the definition o f store image

is m ore than the factual description o f characteristics; it also describes the interaction

am ong ch aracteristics (Am irani & G ates, 1 9 9 3 ; D ichter, 1 9 8 5 ; O xenfeldt, 1 9 7 4 ). Retail

store im ages have been viewed as a com posite, a total impression, an idiosyncratic

cognitive configuration and a gestalt (A rons, 1 9 6 1 ; Dichter, 1 9 8 5 ; Lindquist, 19 7 4 ;

M azursky & Jacob y, 1 9 8 6 ; O xenfeldt, 1 9 7 4 ; Zim m er & Golden, 1 9 8 8 ). Zim m er and

Golden ( 1 9 8 8 ) as well as K eaveney and Hunt (1 9 9 2 ) referred to the gestalt nature o f the

store im age construct. The term gestalt is defined as "the idea that the individual’s

perception o f any object incorporates innumerable bits o f separate information that are

com bined in such a m anner that the end result o f the integration o f inputs amounts to

m ore than the sum o f its constituent parts" (J. Chowdhury & Reardon, 1 9 9 8 ). Therefore

Store im age has a gestalt nature that is represented by the interaction betw een the salient

tangible and intangible store attributes.

Oppewal and Tim m erm ans (1 9 9 7 ) explored m anagem ent perceptions o f store im age in a

com petitive con text and argue that retailer perceptions o f store im age m ay differ in

system atic w ays from the consum er's store im age. B arich and K otler (1 9 9 1 ) provide a

long list o f attributes that m ight affect im age. This includes all the elem ents o f the

marketing m ix (the 4 P s and 2 S s), plus corporate social conduct, conduct toward

em ployees, and business perform ance and argued that com panies need to identify the

positive and negative points o f their im age and take the wanted restorative actions

through an im age tracking and m anagem ent system . They described this system as: "a

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system o f periodically collecting, analyzing, and acting on information that describes

how different publics view key attributes o f the co m p an y 's perform ance".

The main advantages o f the store im age m anagem ent as Barich and K otler (1 9 9 1 )

described them are: First, the com pany can detect unfavourable image shifts early and act

before they harm the com pany. Second, the com pany can identify key areas where its

perform ance lags behind its com petitors and w ork to strengthen these areas. Third, the

com pany can identify key areas w here it outshines its com petitors and can capitalise on

those strengths. Finally, the com pany can learn whether its corrective actions have

improved its im age.

A possible reason found on the com plexity for defining store im age, m ay be due to the

inconsistency observed within the literature for determining what actually constructs a

store image (A m irani & G ates, 1 9 9 3 ; Hansen & D eutscher, 1 9 7 7 ; H irschm an, 1 9 7 8 ; Jain

& E tgar, 1976; Jam es et al., 1976; K eaveney & Hunt, 1 9 9 2 ; Lindquist, 1974;

M cG oldrick, 2 0 0 2 a ; Z im m er & Golden, 1 9 8 8 ). A ccord in g to Hirschm an, G reenberg, and

Robertson (1 9 7 8 ), this is attributed to the fact that the im portance o f various store image

dim ensions varies considerably between m arkets, sectors, and com petitive situations.

Thus, the retailer has to determine the m ajor dim ensions depending in which m arket the

store is operating. Sim ilarly, K eaveney and Hunt (1 9 9 2 ) argued that since retail stores

m eet a wide range o f needs, spanning from functional to exotic, failing to identify them

for a specific target group in an e x a ct tim e will undoubtedly lead to a disagreem ent in

store im age definition.

Even though the im portance o f retail store im age has been widely supported in retail

literature, and for m ore than forty years academ ics have assessed the influences and

antecedents, o f retail im age (Hopkins & A lford, 2 0 0 1 ), it is evident that universal and

generally accepted definition o f store im age (pertaining to specifically the dimensions o f

store im age) is still lacking.

O verall, the general them e that derives from the literature is that a unique store im age is

one o f the retailer's m ost valuable marketing assets, creating a com petitive advantage that

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is not easily copied by other retailers (M azursky & Jacob y, 1 9 8 6 ; Oppewal &

Tim m erm ans, 19 9 7 ; Steenkamp & W edel, 1991).

Recognizing this debate, o f w hether store image should be conceptualized as ‘the sum o f

parts' or as an overall im pression, Zim m er and Golden (1 9 8 8 ) employed a content

analysis with a sam ple o f 8 9 4 respondents. Their study tried to identify whether people

view ed store im age in term s o f single parts or specific characteristics o f the store (i.e.,

attributes), as a global perception, o r in som e other w ay. Their study revealed that store

im age attributes do represent part o f the consum ers' perception o f the store. How ever,

m any attributes com prise a couple o f ideas, suggesting that consum ers integrate

information about a store, and then represent the concept o f image in term s o f broader or

dom inant dimensions that form the m ore global impression o f a store.

2.3.4 Importance of Retail Store Image

The im portance o f retail store im age has been widely supported in retail literature. This is

evidenced by the fact that the store itself can offer a unique atm osphere or environment

such as noises, sizes, shapes, scents and colors) that could help create attention, convey

m essages, and create feelings and influence the consum er’s patronage decision (K otler,

1 9 7 3 ).

T he contextualization o f store im age within the scope o f corporate personality, corporate

identity and corporate im age has been reported extensively by scholars such as (A bratt,

1 9 8 9 ; D owling, 1 9 8 6 ; Kennedy, 1 9 7 7 ; M arkw ick & Fill, 1 9 9 7 ; V arley, 2 0 0 5 ).

Store im age can be defined as the w ay that consum ers view the store, i.e., their

impression o r perception o f the store (for a review o f various difinition o f store im age see

H artm an & Spiro, 2 0 0 5 ). The corporate im age o f the store is defined as a com bination o f

the store as a brand, and the selection o f store brands and m anufacturer brands offered by

the store (G rew al et al., 2 0 0 4 ).

A nother study by Thang and Tan ( 2 0 0 3 ) found key store im age attributes as significantly

influencing consum er preference w ere m erchandising, accessibility, reputation, in-store

service and atm osphere o f the stores.

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Store im age in the sense o f the store as a brand is usually measured as consum ers’

perceptions o f store perform ance. A ccording to Schiffman and Kanuk ( 2 0 0 7 ) retail store

image has im ages o f their own that serves to influence the perceived quality o f products

that carry and the decision o f consum ers as to where to shop. These im ages stem from

their design and physical environm ent, their pricing strategies, and product assortm ent.

A s stressed by A lba, B roniarczyk, Shimp, and Urbany (1 9 9 4 ) a study o f retail store

im age based on com parative pricing strategies found that consum ers tend to perceive

stores that offer a small discount on a large number o f items (i.e., frequency o f price

advantage) as having low er prices overall than com peting stores that offer larger

discounts on a sm aller numbers o f products (i.e., magnitude o f price advantage). Thus,

frequent advertising that presents larger num bers’ o f price specials reinforces consum er

beliefs about the com petitiveness o f as store’s prices. In the past, store displays w ere

mainly used for prom otional purposes. B u t as consum ers becam e m ore sophisticated,

retailers have discovered new roles for effectives display: com m unicating product

inform ation and store im age, assisting consum ers in making purchase decisions, and

creating an excitin g shopping environm ent (B ell & T em us, 2 0 0 2 ).

So as a w hole although definitions vary, store im age has generally been defined as the

w ay in w hich the store is defined in the shopper’s mind, partly by functional qualities and

partly by an aura o f psychological attributes (M artineau, 1 9 5 8 ), the original conception o f

store im age ignited a stream o f research. Previous research has relied on multi attribute

scales, sem antic differential scales, or unstructured free response m ethods to m easure

Im ages, in w hich retailing researchers developed the underlying dim ensions o f store-

im age, developed m easurem ent techniques to operationalize store im age, and em pirically

related the con cep t o f store im age to a w ide variety o f other constructs (H artm an & Spiro,

2 0 0 5 ).

2.3.5 Dimensions of Store Image

Identifying the dim ensions o f store im age: The first phase in identifying the dimensions

o f store im age w as undertaken through a system atic process that included several distinct

stages. T his enabled the researcher to integrate the literature into a final set o f store image

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dim ensions. The stages included: (1 ) com piling a com posite list o f dimensions from the

literature, (2 ) identifying the em erging dimensions, (3 ) com piling a com posite list o f the

sub dim ensions included within each dim ension, (4 ) grouping isolated dimensions with

the identified dim ensions based on a com parison o f the sub dimensions, and (5 )

com piling a set o f dim ensions to be subjected to refinement to arrive at a final set o f

dim ensions underpinning store im age.

Although several scholars mentioned that store image is m ore than the sum o f its

attributes, identifying them has been a continual research question. This is quite

reasonable, because only when controllable image variables are identified, can

retailers m anipulate them in order to provide a positive im age to their custom ers.

Martineau (1 9 5 8 ) presented four personality factors; as latent causes for the creation o f a

store personality: layout and architecture, sym bols and colors, advertising, and sales

personnel, com pared to K u n k e l an d B e r r y ( 1 9 6 8 ) and B e r r y ( 1 9 6 9 ) who developed a

rather exhaustive list o f com ponents o f department store im age. This list is com posed o f

12 com ponents and 4 3 subcom ponents, which includes price o f m erchandise, quality,

assortm ent, fashion o f m erchandises, sales personnel, sales prom otion, advertising, store

atm osphere, locational accessibility, service, reputation on adjustments and other

accessibility factors. The listed dimensions are necessary to co v er as m uch o f the overall

store image as possible, so there is a lack o f distinction and a lot o f overlap am ong the

dimensions. The exposed concepts are sim ilar to the elem ents included by M arks ( 1 9 7 6 )

and Jam es et al. (1 9 7 6 ), (see also Lindquist, 1 9 7 4 ; N evin & Houston, 1 9 8 0 ).

F o r w o rk d o n e ta r g e tin g department stores, m ore general dimensions w ere found by

Stephenson (1 9 6 9 ) He suggested eight im age dimensions: advertising by the store,

physical characteristics o f the store, convenience o f reaching the store, your friends and

the store, m erchandise selection, store personnel, prices charged by the store, and

dependability o f the store. Furtherm ore, he exam ined the image dimension differences

between a new store and an already existing store, and found important dimensions for

each type o f store.

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Only a few investigative research projects about store image attributes have been done in

the international retail m arket. Consum ers with different cultural values might value

different store image attributes. In research on consum er and retailer perceptions o f U K

fashion stores, C rete Birtw istle, Clarke, and Freathy (1 9 9 8 ) found that consum ers

regarded price as the m ost important attribute and store layout w as the least important

store attribute in deciding w here to shop. Korean consum ers evaluated custom er service

as being m ore important than other store attributes when they evaluated discount stores

(Jai Ok & Byoungho, 2 0 0 1 ).

Ettenson and W agner ( 1 9 9 1 ) reported that m erchandise quality w as the m ost important

aspect o f store im age for Chinese consum ers. The m ajority o f store im age studies

measure consum er’s overall perception o f the store image rather than specific attributes

when they explore im age. Store im age is frequently measured in conjunction with

specific purchase behavior con texts o r specific store and service attributes. Oppewal and

Tim m erm ans (1 9 9 7 ) explored m anagem ent perceptions o f store im age. Other research

has com pared m anagem ent or corporate view s o f im age with custom er view s,

highlighting the "gap" in perceptions which often exists (C rete Birtw istle et al., 1 9 9 8 ;

K eaven ey & Hunt, 1 9 9 2 ; M cC lu re & R yans Jr, 1 9 6 8 ; Pathak, Crissy, & Sweitzer, 1 9 7 4 ;

Sam li, K elly, & Hunt, 1 9 9 8 ).

Retail store im age has been dissected com ponent by com ponent and analyzed in past

studies. Y e t to this day there is no one definitive answ er to the question: "what

com ponent has the m ost im pact on store im age?" m arketers are willing to concede that a

store’ s im age is com prised o f m any com ponents, not ju st one com ponent, "m erchandise

quality, styling, p rice, assortm ent, location, sales clerk service, general service, store

environm ent, pleasantness o f shopping have been identified as com ponents o f store

im age" (J. Baker, G rew al, & Parasuram an, 1 9 9 4 ; Lindquist, 1 9 7 4 ; M azursky & Jaco b y ,

1 9 8 6 ) H ow ever as studies have shown in the past, som e com ponent have m ore im pact on

store im age than others. F o r exam ple, Jam es et al. ( 1 9 7 6 ) found that price and quality

w ere m ore important than service and atm osphere. Studies have investigated numerous

variables that m ight im pact retail im age.

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 Table 2.3 Dimensions of Store Image

Authors Dimensions of store image

Fisk (1961) Locational convenience, Merchandise Suitability, Value for Price, Sales
Effort and Store Services, Congeniality o f Store, Post Transaction
Satisfaction

Lindquist (1974) Merchandise, Service, Clientele, Physical Facilities, Convenience,

Promotion, Store atmosphere. Institutional factors, and Post
Transactions Satisfaction.

Doyle and Fenwick Product, Price, Assortment, Styling, and Location

(1974)

James et al., (1976) Price, Assortment, Personnel, Atmosphere, Service, Quality

Bearden (1977) Merchandise, Assortment, Atmosphere, Location, Parking Facilities and

Friendly Personnel

Hansen and Deutscher Merchandise, service, clientele, physical facilities, convenience,

(1977) promotion, store atmosphere, institutional factors, post-transactional
satisfaction

Mazursky and Jacoby Merchandise Quality, Merchandise Pricing, Merchandise Assortment,

(1986) Locational Convenience, Sales Clerk Service, General Service

Zimmer and Golden Merchandise, Service, Clientele, Physical Facilities, Convenience, Store
(1988) Atmosphere-Congeniality

J. Chowdhuiy and Employee Service, fVoduct Quality, Atmosphere, Convenience,

Reardon (1998) PricesA^alue

Peter and Olson (1990) Merchandise, Service, Clientele, Physical Facilities, Promotion,
Convenience and Store Atmosphere

Ghosh (1990) Location, Merchandise, Store Atmosphere, Customer Service, Price,

Advertising, Personal Selling and Sales Incentive Programs

Barich & Srinivasan Product Variety, Product Quality, Store Attractiveness, Reasonable
(1993) Prices, Convenience, Customer Service

Bell (1999) Quality o f Merchandise, Price o f Merchandise, Locational Convenience,

Services, Atmospherics

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 Table 2.3 Dimensions of Retail Store Image Cont...

Authors Dimensions of store image

Birtwistle et al. (1999) Merchandise Quality, Merchandise Price, Merchandise Fashion and
Style, Merchandise Selection, Refund And Company Procedures,
Reputation, Professional and Friendly staff, internal layout and design

Jai Ok and Byoungho Facility Convenience, Service Convenience, Congestion, Clean and
(2001) Spacious Atmosphere and Price Competitiveness

J. O. Kim and Jin Merchandise, Service Convenience, Facility Convenience, Congestion,

(2001) Clean and Spacious Atmosphere, and Price Competitiveness

Davies and Ward Merchandise (Assortment, Quality, Brand Mix and Price); Store
(2002) (Location, Internal and External Environment, Atmosphere and
Name/Fascia); Service (Personnel and Levels of Quality); Promotion
(Advertising/Public Relations and In-Store)

Koo (2003) Store Atmosphere, Location, Convenient facilities. Value, Employee

Service, After Sales Service, Merchandising

Keller (2004) Store Access, In Store Atmosphere, Price and Promotion, Cross-
Category Product/ Service Assortment and within-Category Brand/Item

Hartman and Spiro Merchandise, Atmosphere, Appearance, Convenience and Service

(2005)

Store im age is also com posed o f the different elem ents o f the retail m arketing m ix as

introduced by Ghosh (1 9 9 0 ), Ghosh identifies eight elem ents based on the retail m arketing

m ix location, m erchandise, store atm osphere, custom er service, price, advertising,

personal selling and sales incentive program s. A retailer has to make sure that they offer

each o f these elem ents to their custom ers’ expectations. N evertheless, other non­

functional elem ents also have to be in line with the expectations o f the custom er in order

for a custom er to have a favorable store im age and becom e store loyal.

In other w ords o r other authors argue: other point o f view , Store im age has three broad

com ponents: the actor w hich is the consum er w ho perceives the store, the activity which

is the p rocess o f perception and the object which is the store that is perceived.

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A ccord in g to definition o f store im age it can be deduced from literature that store image

com prises distinct dim ensions (and sub-dim ensions), including tangible (functional) and

intangible (psych ological) dim ensions, and retailers should manipulate the tangible and

intangible store attributes associated with these dimensions and sub dimensions to build a

favorable store im age. Classification o f store image com ponents can be as follow s:

2.3.5.1 Atmosphere
Store atm osphere which includes D ecor, sm ell, sound (J. B ak er, Parasuram an, G rewal, &

V oss, 2 0 0 2 ; Bosm ans, 2 0 0 6 ; K oo, 2 0 0 3 ; M iranda, K onya, & H avrila, 2 0 0 5 ; Orth &

Bourrain, 2 0 0 5 ; Thang & Tan, 2 0 0 3 ) plays a vital role in the consum er’s experience. The

concept o f atm ospherics w as introduced by K otler in 1 9 7 3 . A tm ospherics is a highly

relevant m arketing instrument for retailers and contain a conscious designing o f space to

affect custom ers’ sensory experience and affect a person's em otional state, so atmosphere

o f the retail store, is m ore influential than the product itself in the purchase decision and

serves as a "silent language" in com m unication to consum ers (K otler, 19 7 3 ). Store

atm osphere refers to the environment that is brought about by a coordinated visual

display o f m erchandise and the ease o f mobility within the store (B earden, 1 9 7 7 ; Ghosh,

1 9 9 0 ; D .-J. L ee, 1 9 9 8 ). A positive store experience enhances satisfaction and will lead to

increased shopping frequency, and therefore lead to increased sales (K o o , 2 0 0 3 ). Store

atm osphere, specifically in reference to design factors (colour, architecture, style,

m aterials e tc.) and am bient factors (non-visual, background conditions o f the store,

including elem ents, such as m usic/sound, lighting, scent and tem perature e tc.) is a

significant variable as it influences consum er preference, interpersonal service quality,

m erchandise quality and m onetary price perception, as well as shopping experience cost

(J. B ak er et al., 2 0 0 2 ; Thang & Tan, 2 0 0 3 ).

J . B ak er et al. (2 0 0 2 ) provide a good review o f this research and categorize the elements

o f in-store atm osphere into (1 ) physical features like design, lighting, and layout, (2 )

ambient features o r non-visual, background conditions o f the store, including elem ents

like tem perature, m usic and sm ell, and (3 ) social features like type o f clientele, em ployee

availability and friendliness. J. B ak er et al. (2 0 0 2 ) notes that atm osphere can affect

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con su m ers’ perceptions of the econom ic and psychological costs of shopping

(m erchandise price, m erchandise quality, and em ployee service quality e tc.) in a store.

Store atm osphere will affect the shopper’s m ood, time spent in the store and willingness

to visit (F o xall & Goldsmith, 1 9 9 4 ). A ccord in g to M . L ev y and W eitz (2 0 0 4 )

"A tm osphere refers to the design o f an environm ent via visual com m unications, lighting,

colors, m usic and scent to stimulate custom ers’ perceptual and emotional responses and

ultim ately to affect their purchasing behavior".

Store atm osphere m ediates consum er perceptions o f other dimensions o f store im age. For

instance, according to J. Baker et al. (2 0 0 2 ) Retail store environm ents provide diverse

cues on which a consum er form s inferences about the level o f service quality, price, and

products in that store perceptions o f m erchandise price, m erchandise quality, and

em ployee service quality. Schlosser ( 1 9 9 8 ) argues that, since store atm osphere has a

social identity appeal, a pleasing atm osphere in the store should influence perceptions o f

socially com m unicative products in the store, not so much intrinsically rewarding

products. This logic can be extended to argue that store atm osphere would have a greater

im pact on perceptions o f products with higher perceived (social) risk. Indeed,

R ichardson, Paul, A run, and Alan (1 9 9 6 ), do find that consum ers’ ratings o f the private

label’ s quality are higher when the store is aesthetically pleasing than when it is less

attractive, although there is no significant difference in their ratings o f national brands’

quality.

Consum ers evaluate the store’s im age such as m erchandise, service, physical facilities,

convenience, prom otion, store atm osphere, institution and post-transaction factors and

m ake a selection to purchase at that specific outlet.

In sum m ary, Store atmosphere refers to the environment that is created by com bining a

set o f visual elem ents o f the physical store environment (colours, displays, decorative

features, ease o f m ovem ent e tc) and stimulation o f senses (sm ell, condition o f the air,

m usic, lighting) enabling an aesthetic consum er response.

In sum m ary, a well-planned store atm osphere provides a favorable environm ent that

blends layout with piped-in m usic, color, decorative features and lighting. A pleasing

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store atm osphere provides substantial hedonic utility to consum ers and encourages them

to visit m ore often, stay longer, and buys m ore. M ore over it affects custom ers’ em otions,

which help to determine the shopping value, and in return leads to custom ers to choose

the sam e store repeatedly. It also improves consum ers’ perceptions o f the quality o f

m erchandise in the store. In sum, store atm osphere works on the pleasure and arousal

domain o f consum er perception, and stores with favorable atmosphere are likely to

increase consum er preference.

Furtherm ore, N ew m an and Patel (2 0 0 4 ) reported that one o f the crucial factors and

determinants o f con su m ers’ store choice is store atm osphere, and enables retailers to

differentiate them selves from their com petitors, also indicate that when retailers provide a

similar im age o f m erchandise and store atm osphere, the custom er has a positive

perception about the overall retailer im age. H ow ever, Donovan and Rossiter (1 9 8 2 )

evaluation o f the em otional states aroused by store atm osphere and the effect on

approach/ avoidance behavior cam e to the conclusion that research on store atm osphere

does not achieve strong results because it affects an em otional state which is difficult to

verbalize and is transient, therefore difficult to recall. Their research therefore proposed

that store atm osphere affects emotion and this, in turn, affects shopping related intention.

This research w as extended by Donovan and R ossiter ( 1 9 9 4 ) who found that emotional

state not only affects intention but actual purchase behavior as well. A positive emotional

experience engendered by store atm osphere will increase the estim ated spending and tim e

spent in the store. Lindquist (1 9 7 4 ) refers to store atmosphere as a custom er's feeling o f

w arm th, accep tan ce or ease.

B ased on the expectations o f the target m arket, store designers should therefore make

tactical decisions regarding store atm osphere, in order to positively influence consum ers’

in-store experience (H artm an & Spiro, 2 0 0 5 ). From the above-m entioned, it is clear that

atm osphere is a significant tool, since it provides m anagem ent with the pow er to

manipulate the effect o f store environm ent on consum er behavior.

R esearch conducted by M erilees and M iller (2 0 0 1 ) investigated the interactivity between

the store and the consum er. Their results showed that store atmosphere w as differentiated

between superstores and traditional specialist stores. Superstores w ere perceived to

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provide a m ore pleasant and enjoyable shopping experience and store atmosphere was

identified as a key source o f com petitive advantage for such stores. They also found that

store atm osphere w as the m ost powerful determinant o f store loyalty.

Past research on store im age has suggested that a number o f environmental elem ents

affect consum er perception o f store im age and that specific characteristics tend to be

associated with high im age and low image stores posited that consum ers make inferences

about m erchandise and service quality based on store environm ent factors and that these

inferences, in turn, indirectly influence store im age. Quality m erchandise in a convenient

store layout and friendly atm osphere is needed. In essence providing appropriate store

attributes is not enough to sa tisf consum ers and guarantee store loyalty (K o & Kincade,

1 9 9 7 ). In addition, as Dholakia (1 9 9 9 ) points out in term s o f supermarkets and grocery

shopping it is the increased level o f m ale participation that needs to be considered in store

layout and design. M ales appear to be responsible for about 4 5 percent o f household

grocery and shopping.

B osm an s ( 2 0 0 6 ) investigated the effect o f ambient scents i.e., smell (scents in the

environm ent that do not em anate from a specific product) on product evaluations. The

research found that, when the ambient scent is not salient, a pleasant ambient scent

increases product evaluations, regardless o f congruency with the product category. Orth

and Bourrain ( 2 0 0 5 ) studied the effect o f ambient scent, on consum er exploratory

behavior. Their results indicated that scent pleasantness moderated the effects o f both

actual and optimum stimulation levels on consum er exploratory tendencies, including

risk taking, variety seeking and curiosity-m otivated behavior.

Herrington and Capella ( 1 9 9 6 ) investigated the effects o f m usic, i.e., Sound, in service

environm ents. They concluded that loud m usic did not influence the tim e or amount o f

m oney consum ers spent in the service environm ent. J. B ak er et al. (2 0 0 2 ) investigated the

influence o f m usic on perceived m erchandise value and patronage intentions. Results

indicated that, when the consum er’s perception o f store m usic cues becom es m ore

favorable, consum ers will perceive m onetary prices to be higher, w hich in turn will lead

to perceptions o f low er m erchandise value. In contrast, m ore favorable perception o f

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store m usic cues will lead consum ers to perceive tim e/effort costs to be lower, whereas

higher tim e/effort costs are associated with lower store patronage intentions.

2 .3 .S .2 C o n v en ien ce

Shopping convenience refers to the custom ers feeling o f the tim e and effort saved when

they purchase. The convenience dimension has been identified as a store image

dimension since early research (Lindquist, 1974). This w as further confirm ed through

em pirical research in an attempt to operationalize the concept o f store image by

em ploying factor analysis (M arks, 1 9 7 6 ).

M ain convenience dim ensions recognized by Ibrahim ( 2 0 0 2 ); Kaufman and Lane (1 9 9 6 );

H .-b. K im , K im , and A n (2 0 0 3 ); M iranda et al. (2 0 0 5 ); Stoltman and M organ (1 9 9 9 )

includes check out, travel, location, parking, shopping ease. The retention o f all items in

the C onvenience dimension w as supported by previous store im age research focusing on

item -specific content (B ellenger, Robertson, & G reenberg, 1 9 7 7 ; Chowdhary, 1 9 9 9 ;

H ansen & D eutscher, 1 9 7 7 ; Huddleston, Ford, &. M ahoney, 1 9 9 0 ; Janse van Noordw yk,

2 0 0 2 ; J . O. Kim & Jin, 2 0 0 1 ; K leinhans, 2 0 0 3 ; Lumpkin et al., 1 9 8 5 ; M arks, 1 9 7 6 ;

Sullivan, Savitt, Zheng, & C ui, 2 0 0 2 ; Thang & Tan, 2 0 0 3 ; J. K . W ong & Kenneth Teas,

2001).

Convenience is a vital part o f society at present. W ith expanding internet facilities and

individuals spending m ore tim e at w ork and less tim e at hom e, tim e spent on shopping is

an expensive resource. Chowdhary ( 1 9 9 9 ) notes that convenience is a specifically

desirable characteristic for older consum ers. H yllegard, Eckm an, D escals, and B orja

( 2 0 0 5 ) how ever, found that convenience w as less important to consum ers aged 5 6 to 8 8 ,

but very important to the age groups between 18 and 5 5 and indicate that the influence o f

convenience on store patronage varied by gender and age.

Other conveniences can be considered as Parking, Hours store is open, C onvenience with

regard to other stores. Store layout with respect to convenience, A ppearance, congestion,

convenient facilities, family shopping, outside attractiveness, physical facilities,

sensory/layout dimension, service space, service-store facilities, store layout,

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A ccessibility, convenience (econ om ic), convenience-store location and mobility. Errand

shopping, facility convenience, in-store convenience and physical environment, leisure

activities, location, location and convenience, price, prom otions/convenience, proxim ity

and fam iliarity, service convenience, variety under one roof.

Store hour is one o f sub-dimensions for convenience. In the early 19 9 0 s, increased

attention w as placed on tim e-pressured consum ers and the im pact the em ergence o f such

concerns would have on traditional shopping centers and retailers have a strong interest

in understanding how their custom ers w ant to use their tim e in specific shopping

situations. The study o f various types o f consum er tim e issueshas created a strong

foundation for theinvestigation o f shopper behavior (Lockh art, Craik, & Jacob y, 19 7 6 ).

Kaufm an and Lane ( 1 9 9 6 ) conducted qualitative research on the effect o f store hours in

one-stop shopping, the m ajority o f the interviewed respondents expressed a desire for

one-stop shopping when shopping at a specific shopping center.

Transportation and shopping ease is another sub-dimension for convenience. D istance is

an important factor, so the accessibility o f shopping centers plays a considerable role in

shopping center ch oice behavior, but it is not alw ays measured in kilom eters; rather it is

determined in term s o f convenience, such as w hether it is on the w ay home o r on the

main com m uting road. I f tw o or m ore stores are equally convenient in term s o f distance,

then other factors such as quality, assortm ent and price influence the store choice

decision. Few o f the review ed studies reported research results on the specific sub

dimensions o f travel, transportation and shopping ease.

Ibrahim ( 2 0 0 2 ) reported on the weighted factor ratings o f different shopping centre

attributes and cunducted that three retail factors including (atm osohere, shopping center

features and value added), tw o custom er factores including (hedlonic oriented and

utilitraian oriented) and five transport factors including (effort, protection, enjoym ent,

confort and tension) contribute to a entertaining shopping exprim ent, and suggested to

extent the com m only used attributes such as travel tim e, distance and travel costs by

attributes such as com fort and reliability o f the transport m ode. It includes factors such as

a short w aiting tim e, short walking distance, ease o f travel, low cost oftravel, cleanliness

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o f transportation m ode, absence o f traffic congestion, absence o f stress, reliability o f the

transport m ode and the com fort o f transport mode.

R ecent research findings on the sub dim ensions o f travel and transportation are scarce.

This, how ever, does not diminish their importance in store choice and warrants

consideration by retailers. Travelling to a store should be associated with minimum tim e

and m axim um ease. The availability o f public transport near to the store should also be

considered, as well as the frequency, distance, com fort and safety relating to modes o f

transport, e.g ., taxi or shuttle service, buses and trains. A uthors who have addressed

transtortation in their research like Hise and M uczyk (1 9 7 7 ) im pact o f highways on drive

tim e; M cG oldrick and Thom pson (1 9 9 2 ) tim e, distance, and accessibility; Barnard and

Hensher (1 9 9 2 ) and K itam ura and Fujii (1 9 9 8 ) travel tim e; Dennis, M arsland, and

C ockett ( 2 0 0 1 ) transportation m ode dim ensions; and G autschi (1 9 8 1 ) and Ibrahim (2 0 0 2 )

center-related dim ensions like assortm ent, hours o f operation and travel-related

dim ensions, including com fort, cost, and safety concerns. R etailers should further address

the sub dimension o f location. Stores located in close proxim ity to the consum er’ s home

or w ork lead to increased consum er satisfaction. A nother important influence to be

considered by retailers offering store brands is the national brands they include in their

m erchandise offer. O ffering high quality national brands im proves the evaluation o f store

brands by contributing to a m ore favourable perception o f the retailer’s overall store

im age (A ilaw adi & K eller, 2 0 0 4 ). H ow ever, research further showed that both the quality

and affective perception o f store brands are influenced negatively by thecongruence

between national brands and store im age (V ahie & Pasw an, 2 0 0 6 ). In a Korean study on

K orean discount consum er shopping m otives, leisure-m otivated shoppers m ost frequently

stated closeness to their hom e and shopping ease as reasons for patronising a particular

store (Byoungho & Jai-O k, 2 0 0 3 ).

L ocation as another sub-dimension o f convenience could be included: Location from

hom e. A cce ss, Good or p oor location. The location o f a retail store plays a very important

role in its su ccess; it is an essential and crucial part o f the retail strategy as the location o f

the store conveys a lot about its im age. It also influences the m erchandising m ix and

layout o f the store. O nce setup, a retailer can change its m erchandise m ix, adjust prices,

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im prove com m unication or services but it is very difficult to change the location. The

research explored how location influence store choice in the retail sector (Jaravaza &

Chitando, 2 0 1 3 ).

Terblanche (1 9 9 8 , p. 6 4 ) em phasizes the importance o f store location in a consum er’s

ch oice o f store. He is o f the opinion that consum ers, as a general rule will m ostly select

the store closest to them , although the size o f the store also plays an important role, as

larger outlets are preferred, unless fast service or convenience is the main consideration.

He further points out those consum ers are not willing to travel far for convenience goods.

Fo r expensive products o r specialty item s such as photographic equipment, how ever, they

are willing to travel long distances. A vital part o f convenience is site selection/ location

planning, because it influences parking, location and transportation. This is a significant

decision because it cannot be altered on ce made. L ocation , transportation and travelling

tim e influence the consum er market patronizing the store and, inevitably, sales (W ood &

B row ne, 2 0 0 7 ). Thang and Tan (2 0 0 3 ) for instance, note that retailers are chosen on the

basis o f accessibility, ease o f transportation and time duration o f travelling. They found

that accessibility o f a store is rated second to merchandising and that even stores located

on the sam e street still engendered varying perceptions with regard to accessibility. The

sm allest distance can how ever influence a store’ s su ccess o r failure (W ood & Brow ne,

2 0 0 7 ). The im portance o f travelling distance in influencing intention to remain loyal to a

store w as noted by (M iranda et al., 2 0 0 5 ).

N ew m an and Patel (2 0 0 4 ) reported that, by focusing on features which influence the ease

o f shopping, retailers are able to differentiate them selves fi-om the com petition. K o o

(2 0 0 3 ) on the other hand, investigated the inter-relationships am ong store im ages, store

satisfaction, and store loyalty am ong K orean discount retail patrons, and found that

convenience has a direct and indirect im pact on store loyalty, but not on store

satisfaction. This is contradicted by Chih-Hon and C h ia-Y u (2 0 0 5 ) w ho found that

convenience, has a direct relationship with custom er satisfaction and custom er loyalty, as

well as an indirect relationship with custom er loyalty through custom er satisfaction.

R etailers should therefore consider convenience and its sub-dimensions carefully as this

can help build a consum er base and consum er loyalty.

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Parking is one o f sub-dimensions for convenience and found to be one o f the events

leading to the m ost serious behavioral reactions to unexpected events, with 3 9 .5 % o f

respondents indicating that they would m ove to another shopping area if parking w as

unavailable H ow ever, shoppers m ay accep t parking issues in seasonal periods especially

on certain occasion s without dissatisfaction (Stoltm an & M organ, 1999).

Finding parking to be readily available w as the m ost pleasant event for consum ers, whilst

unforeseen problem s with parking w ere reported to elicit the strongest negative feelings,

de K lerk and Am pousah ( 2 0 0 2 ) found that 6 1 % o f respondents com plained that parking

lots w ere unsuitable for use by disabled consum ers.

Stoltman and M organ (1 9 9 9 ) studied the relationship between affective and behavioral

reactions to events that m ay o ccu r whilst shopping for apparel. Custom ers avoid or leave

retail settings that are stressful or obstructive. Parking availability w as identified as one

such event and results showed that unexpected events involving parking availability w as

one o f the m ost frequently encountered events in shopping.

Byoungho and Jai-O k (2 0 0 3 ) indicated that socially m otivated K orean discount

consum er’s state ease o f parking as a main reason for patronizing a store. Good parking

influenced differences between departm ent and specialty stores. A m oderate proportion

(5 1 % to 7 5 % ) o f respondents in this study indicated that they perceived specialty stores

to offer good parking, w hilst a very large proportion (9 5 % to 1 0 0 % ) o f respondents

perceived this to be the situation for department stores (Paulins & Geistfeld, 2 0 0 3 ).

Research results indicated that consum ers in second-tier cities in China place m ore

im portance on parking facilities than do consum ers in first-tier cities (W on g & Y u ,

2 0 0 3 ), ‘ First-tier’ refers to cities that have been granted approval by China’ s central

governm ent to establish join t venture retail enterprises, w hereas second-tier cities are

those without such approval.

G olias, Y an n is, and H arvatis ( 2 0 0 2 ) investigated off-street parking ch oice sensitivity.

They showed that the attraction o f off-street parking (as opposed to on-street parking)

decreased with increased co st and when the tim e and effort associated with w alking from

the parking sp ace to the final destination increases. The attraction o f off-street parking

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increased when search tim e for and parking duration o f on-street parking increase. The

study concludes that tim e and co st are the dominant factors in choosing between parking

alternatives and this provides valuable insight to retailers.

Research indicates that actual w aiting tim e, perceived waiting tim e and disconfirmation

(the difference between actual waiting tim e and perceived waiting tim e), predict

consum er satisfaction (M ark & Janelle, 1 998).It is also known as check out, another sub­

dimension for convenience. A n increase in actual and perceived w aiting tim e leads to

lower consum er satisfaction, with the effect o f actual waiting tim e seem ing greater than

perceived waiting tim e o r disconfirm ation. In any way when consum ers are pressured for

tim e, perceived waiting tim e has a greater effect on consum er satisfaction. Although the

results showed statistical significance for the effect o f expected waiting tim e on consum er

satisfaction, the effect is much sm aller than for the other variables.

2.3.S.3 Facilities
A s one o f dimensions for store im age it includes. Store layout, Store appearance.

Facilities convenience, Fitting room s. Fixtures (K erfoot, D avies, & W ard, 2 0 0 3 ; M iranda

et al., 2 0 0 5 ; Paul et al., 1 9 9 6 ; Paulins & Geistfeld, 2 0 0 3 ; Semeijn, van R iel, &

A m brosini, 2 0 0 4 ).

Am bient factors (fixtures) are non-visual, background conditions o f the store, including

elem ent, such as m usic/sound, lighting, scent and tem perature. Several em pirical studies

have been conducted to investigate the effects o f background sound/m usic in the store

M illim an (1 9 8 6 ), w ho conducted research with the m anagers o f 5 2 retail stores found

custom ers m ade m ore purchases in a store that offered background m usic than in a store

that did not offer background m usic. M usic also had a positive relationship with

custom ers' m oods. In accord an ce with Rubel (1 9 9 6 ) research, 91 percent o f retail

custom ers w ere influenced by background m usic while they w ere shopping. Seventy

percent o f custom ers thought m usic m ade them feel m ore relaxed and spend m ore tim e in

a store. In addition, 3 3 percent o f custom ers indicated m usic influenced their purchase

decision. In addition. Sherry J r and M cG rath (2 0 0 1 ) found that classical m usic w as used

to m ake custom ers calm down in a crowded situation. Lighting can directly affect a

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store's im age. R esearchers investigated high prestige store images and low prestige store

im ages with ambient factors (i.e ., m usic and lighting). They found that the high prestige

store im age had soft and dim lighting with classical background m usic and the low

prestige store im age had bright and harsh lighting with no background m usic (J. B aker et

al., 1 9 9 4 ; G ardner & Siom kos, 1 9 8 6 ; Z im m er & Golden, 1988).

The researchers further reported that 6 6 % o f the respondents com plained that store

display racks, as an attribute associated with store fixtures, were usually too high. K erfoot

et al. ( 2 0 0 3 ) undertook a qualitative study on the influence o f visual m erchandising on

consum er perceptions, specifically relating this to store fixtures. Their results indicated

that hanging out o f m erchandise for display w as perceived as the m ost attractive m anner

o f merchandise presentation, whilst folded m erchandise w as perceived as being neat, but

this m ade it difficult to assess the m erchandise. Sim ilarly, rails made it difficult to brow se

through the m erchandise. Consum ers voiced their preference for order in the store

environm ent and mannequins elicited positive responses. Glass fixtures w as perceived

positively, whilst shelves and rails w ere seen as unattractive.

T he colors o f fixtures w ere found to influence perceptions o f quality and price. W hite

w as associated with a perception o f below average price, whilst pink and red w ere

associated with a perception o f an average to above average price. N eutral/beige colors

lead to perceptions o f expensive to very expensive price.

A clear route through the store increased consum ers propensity to brow se and neat and

sparse displays generated a perception o f quality. The sensory qualities o f m aterials used

in the store, e.g ., w ooden hangers and flooring, contributed to an am bience o f exclusivity

and influenced quality perceptions.

L astly, the effect o f lighting w as investigated and results indicated that dull or basic

lighting led to negative associations. The study concluded that consum er evaluations o f

visual m erchandising influence approach or avoidance behavior, with 8 8 % o f consum ers

indicating a liking for the visual m erchandising being m ore inclined to browse in the

store and 8 0 % tending to purchase, versus 3 6 % and 19% respectively when consum ers

indicated dislike o f the visual m erchandising (K erfoot et al., 2 0 0 3 ). M iranda et al. (2 0 0 5 )

Page 79 of 325
found sh elf signage (e .g ., facilitating the ease o f locating m erchandise) as an attribute

associated with store fixtures, to be a significant variable in generating store loyalty.

Store appearance (D esign), has been considered an important com parative visual tool.

B eliefs about the patronage behaviour o f consum ers are apparent in the design and

construction o f retail environm ents (Foxall & Goldsmith, 1 9 9 4 ). Seeing a store and

seeing m erchandise in the windows leads to visiting the store and thus performing

purchase intent. The store design factors w ere classified into functional (store layout,

display, com fort, and p rivacy) and aesthetic elem ents (architecture, color, m aterial and

style) (M arans & Spreckelm eyer, 1 9 8 2 ). Using those elem ents, retailers create a store

identity and encourage consum ers' shopping activities. A lso, store design is a w ay o f

presenting m erchandise in a store to facilitate and stimulate consum er purchasing

behaviour. Thus, store design has been called a "silent salesm an" because it has been

used in an attem pt to attract and hold consum ers' m om entary attention (B uttle, 1 9 8 4 ).

F ew studies reported on the sub dimensions o f facilities convenience and fitting room s,

but Paulins and Geistfeld ( 2 0 0 3 ) reported on the ranking o f the rest room s in different

store types, i.e., facilities convenience. Only (2 6 % -5 0 % ) o f respondents indicated that

specialty stores had adequate rest room s. A m oderate proportion o f respondents (5 1 % -

7 5 % ) perceived discount stores to have adequate rest room s, whilst a large proportion o f

respondents (7 6 % -9 4 % ) perceived department stores to have adequate rest room s. The

m ajority o f respondents perceived discount, specialty and department stores to have

pleasant fitting room s. W ith intention to recom m end, but only a w eak positive association

with purchase intention. Thus, service quality, consum er’s intention to recom m end a

store to others and, to a lesser extent, consum er’ s purchase intentions, can be positively

mfiuenced by creating a m ore favorable consum er perception o f the store’s physical

appearance.

The availability o f adequate space in fitting room s for disabled apparel consum ers w as

noted by (de K lerk & A m pousah, 2 0 0 2 ). Sixty-five percent o f respondents com m ented

that the space in fitting room s w as inadequate.

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2.3.S.4 Institutional

A s another dimension for store im age is including o f the following sub-dimensions:

Clientele O verall impression, Store reputation, Store association (Ailaw adi & Keller,

2 0 0 4 ; Am irani & G ates, 1 9 9 3 ). V arious studies reported on the importance o f store

reputation on adjustment o r store association in the formation o f store im age. Chowdhary

(1 9 9 9 ) reported that 5 6 % o f elderly consum ers consider store reputation to be an

important consideration when shopping for apparel. H ow ever, Hyllegard et al. (2 0 0 5 )

found that store reputation w as m ore important to the 1 8 -2 4 year old group o f Spanish

consum ers than to Spanish consum ers aged 5 6 -8 8 . G Birtw istle and Siddiqui (1 9 9 5 )

found store reputation to be ranked sixth in importance in a qualitative study on store

im age dimensions. The im portance o f store reputation w as confirm ed in a quantitative

empirical study concerning U K consum ers’ perceptions o f fashion retailers (G rete &

Linda, 2 0 0 1 ).

Janse van N oordw yk ( 2 0 0 2 ) identified and described institutional, store reputation and

store association attributes and grouped them btogether as the institutional dimension o f

store im age. The institutional dimension plays a significant role in the overall impression

o f the corporate identity. B efore an identity or the reputation o f the com pany can affect

consum er behaviour, the consum er should have experienced som e involvem ent and

identification with the identity. Huddleston et al. (1 9 9 0 ) describe reputation as a desirable

characteristic that attracts consum ers. Huddleston et al. (1 9 9 0 ) investigated the

relationship between retail store attributes and the lifestyle characteristics o f m ature

fem ale consum ers. They found a relationship between lifestyle and store reputation,

suggesting that lifestyle influences consum er preference for store reputation. An

investigation into the perception o f preference for retail stores based on multi-attributes

o f store im age concluded that a reputable store is preferred because better quality and

value is assumed (Thang & T an, 2 0 0 3 ). Reputable stores are better able to secure

consum er affiliation and trust, and thereby build store loyalty and encourage repeat

purchase. A store can even im prove its reputation by carrying a reputable in-store brand,

w hich will positively influence the store brand reputation, therefore strengthening store

loyalty even further (C ollins-D odd & Lindley, 2 0 0 3 ).

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The reputation o f a store could be assessed by exam ining the corporate image as rated by

its custom ers. Specific attributes, including how much the com pany is respected and

adm ired; the quality, innovation, value, and reliability o f its products and services; and

w hether the com pany is a good citizen in its dealings with com m unities, em ployees and

the environm ent could be evaluated. A ‘reputation quotient’ could be computed, with

higher ratings representing m ore favorable corporate im ages (B lackw ell, M iniard, &

Engel, 2 0 0 6 ).

Consum er (clientele) characteristics is one o f sub-dimensions for institutional. Bloem er

and de Ruyter (1 9 9 8 ) found empirical evidence for the positive relationship between store

image and satisfaction. Based on the relationship between consum ers and retailers, Chih-

Hon and C h ia-Y u (2 0 0 5 ) found store im age as a situation antecedent o f satisfaction. In

research o f the relationships am ong store im age, store satisfaction and store loyalty

am ong K orean discount retail custom ers, K oo ( 2 0 0 3 ) found that there is a positive direct

relationship between store im age and store satisfaction. N a, M arshall, and K eller (1 9 9 9 )

found that satisfaction is also related to and influenced by im ages that indicate consum er

attitudes can be one o f the determinants o f the relationship between store im age and

satisfaction. Consum ers' perceptions o f retail store attributes during the custom er’s

shopping experience w ere found to influence shopping satisfaction (Ingene, 19 8 4 ; M ay,

1 9 8 9 ). A pleasant shopping atm osphere positively affects the shopping tim e and the

m oney that custom ers spend in a store, as well as the emotion o f shopping (Ingene,

1 9 8 4 ).

The physical features o f a retail store, such as window displays, m erchandising displays,

store layout, colou r and store decor, are w idely believed to influence store behaviour

(B ellizzi, C row ley, & H asty, 1 9 8 3 ; G ardner & Siom kos, 1 9 8 6 ; Sherry Jr & M cG rath,

2 0 0 1 ; Z im m er & Golden, 1 9 8 8 ). T hose physical features o f a retail store have been

considered "behaviour-triggering d evices" rather than inescapable determinants o f choice

(B uttle, 1 9 8 4 ).

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2.3.5.S Merchandise
M erchandise is one o f main dimensions for store im age and is including o f the following

sub-dim ensions: A ssortm ent /fashion, style o f merchandise, m erchandise price, quality o f

m erchandise (Babakus, Beinstock, & Van S cotter, 2 0 0 4 ; K oo, 2 0 0 3 ; Taylor & C osenza,

2 0 0 2 ; Thang & Tan, 2 0 0 3 ).

In this part the follow ing are the focuse o f the dim ensions: Brand name, fabric, fashion

ability, fashion goods, focused shopping, m erchandise, m erchandise value, m erchandise

variety, popularity, price, price and quality accepts, price com petitiveness’ s, price/quality

dim ensions, products, quality/reputation, rich m ax o f com m odities, and services, status,

technical quality, tim e/availability, value, value-added service. Som e o f them which were

dominated have been explained below.

M erchandise itself is view ed as the goods and services offered by a retail outlet

(Lindquist, 1 9 7 4 ). Lindquist ( 1 9 7 4 ) finds that m erchandise appears to be the key factor in

determ ining retail store im age. The five characteristics o f m erchandise considered to be

im portant are quality o f m erchandise, selection or assortm ent, styling o r fashion,

guarantees, and pricing (Lindquist, 1 9 7 4 ). The attributes o f m erchandise that are included

in the current study are m erchandise assortm ent, m erchandise style, m erchandise price

and m erchandise quality. Thang and Tan (2 0 0 3 ) included selection and assortm ent,

styling and fashion as attributes, while C rete Birtw istle et al. (1 9 9 8 ) included assortm ent,

m erchandise quality and m erchandise style. A ccording to Collins-Dodd and Lindley

( 2 0 0 3 ), as well as Thang and Tan (2 0 0 3 ), m erchandise is considered the m ost important

factor contributing to consum er store preference. This view is supported by C rete and

Linda (2 0 0 1 ), Collins-D odd and Lindley ( 2 0 0 3 ), Pauline, Ronald, Y i, and Y anli (2 0 0 2 ),

who found that m erchandise has a significant influence on brand perception and store

ch oice across consum er segm ents.

Specific to the m erchandise assortm ent sub dim ension, m anaging brand assortm ent has

becom e increasingly important to retailers, since brand image influences the perceptions

o f m erchandise (A ilaw adi & K eller, 2 0 0 4 ; Stephen & Cindy, 19 9 7 ).

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Brand and product assortm ent are part o f the assortm ent strategies followed to satisfy

consum er needs and influence brand perception. Consum ers tend to seek stores with a

greater assortm ent o f m erchandise to satisfy their needs (Pauline et al., 2 0 0 2 ). B ut brand

assortm ent is also a strategy to build a store’s image through developing a private brand

label (Ailaw adi & K eller, 2 0 0 4 ).

Bellizzi et al. ( 1 9 8 3 ) found that colors used in store design only influence the perception

o f m erchandise style, but not assortm ent, price or quality. Respondents perceived

m erchandise displayed against a warm color store design as being m ore up-to-date than

m erchandise in a cool co lo r environm ent. M erchandise in a red environment w as rated

m ost up-to-date. T aylor and C osenza ( 2 0 0 2 ) confirm ed that m erchandise style, including

fit and look, is the m ost important decision attribute to later-aged fem ale teens when

shopping for apparel. Byoungho and Jai-O k (2 0 0 3 ) indicated that leisure-m otivated,

socially m otivated and utilitarian Korean consum ers rated m erchandise style, especially

o f fashion m erchandise, positively, whilst shopping-apathetic consum ers rated this

unfavorable.

Babakus et al. (2 0 0 4 ) confirm ed that perceived m erchandise quality has a positive

influence on consum er satisfaction, w hich, in turn, has a positive influence on store

traffic and store sales grow th. H ow ever, no significant direct influence o f perceived

m erchandise quality on store traffic and sales growth w as observed.

2.3.S.6 Promotion
Prom otion as one o f main dimensions for store im age, includes Sales promotion

(Incentives), Displays, A dvertising, (C arroll et al., 2 0 0 7 ; D uFrene et. al. 2 0 0 5 , Sen et al.,

2 0 0 2 , D aw es, 2 0 0 4 ; A lvirez & Casielles, 2 0 0 5 ) M arket com m unication o f retailers. Sales

personnel (Interaction/A ppearance).

In an environment w here consum ers are inundated with com peting marketing m essages

an integrated m arketing com m unications (IM C ) strategy has proved to enhance consum er

attitudes towards retailer brands (M cG rath, 2 0 0 5 ). Thus, prom otional activities becom e

increasingly important as an integral part o f IM C , resulting in a powerful and synergistic

brand com m unications m ix (K liatchko, 2 0 0 5 ; N aik & R am an, 2 0 0 3 ; T . M . Smith,

Page 84 of 325
G opalakrishna, & Chatterjee, 2 0 0 6 ). In this grouping, Lindquist (1 9 7 4 ) groups sales

prom otions (incentives), advertising, displays, trading stam ps, sym bols and colors

together.

A dvertising like sales prom otion is an especially important factor in expressing the

ch aracter o f the store, and the shopper believes he or she can abstract sym bolic cues from

the advertisem ent. Retail advertising discloses som e information to the consum er, like

w hether the store is exotic and high style (and therefore expensive), a dependable family

store o r a promotion store concentrating on bargains and savings. The sym bolic

interpretation o f the advertising should be consistent with the character o f the store

(M artineau, 195 8 ).

W ith regard to research on prom otional displays, as one o f sub-dimensions o f promotion,

Sen, B lo ck , and Chandran ( 2 0 0 2 ) indicated that window displays offering information

about sales and prom otions w ere a significant predictor o f store entry. H ow ever,

prom otional window displays w as not a significant predictor o f product purchase. Hu and

Jasp er ( 2 0 0 6 ) identified in-store graphics as a social cue in the store environment. Their

results showed that consum ers have a m ore favourable attitude toward m erchandise

quality and perceive service quality as higher when m ore social cues are present in the

store environm ent. Further to this, their study indicated that consum ers experience higher

levels o f pleasure o r arousal when there are m ore in-store graphics in the store

environm ent. Lastly, their results confirm ed that consum er form ed a m ore favourable

im age o f a store and w ere m ore likely to patronise the store when m ore socially-oriented

in-store graphics w ere displayed in a store with a highly-personalised service.

Results from a study on store preference confirm ed that advertising significantly affected

store desirability and increased the likelihood o f store preference (Paulins & Geistfeld,

2 0 0 3 ).

"A dvertising has undergone dram atic changes alongside transform ation in technology,

thereby offering retailers the opportunity o f potential new advertising channels, e.g ., E -

m ail, Internet and cellular phones" (W hat happened to the good old days? 2 0 0 3 ).

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Several recent research studies report on these forms o f advertising. Kent and Brandal

(2 0 0 3 ) reported that pre-notification and personalization o f letters did not increase e-m ail

response rate. Neutral te x t in the e-m ail heading elicited a higher response rate than did a

beneficial heading. They did not find that e-m ail response rates are lower than postal-mail

response rates. They also studied the effects o f perm ission marketing, i.e., when

consum ers provide advance perm ission to receiving m arketing com m unications. Their

results confirm ed that perm ission- based e-m ails are ( 1 ) read m ore frequently; (2 ) seen as

m ore interesting; (3 ) have a higher click-through rate; and (4 ) generate m ore fi-equent

purchasing than spam e-m ails, i.e., unsolicited e-m ails. With regard to trust, they found

that higher levels o f trust in a com pany did not generate higher levels o f permission as

opposed to low levels o f trust. Follow ing from this, high levels o f perm ission did not

generate higher response rates than low levels o f permission.

Entails how m arketers com m unicate their business to prospective consum ers, including

how they see and project them selves to consum ers. A substantial proportion o f

consum ers rely on advertising as a m ajor source o f information, w hich enables retailers to

use advertising effectively to com m unicate image to consum ers. Price advertising is most

effective for attracting consum ers to a shop. The im pact o f price advertising varies,

how ever, by product category, brand, initial price level, consum er group and retail outlet.

M artineau ( 1 9 5 8 ) initially identified advertising as one o f the four dimensions o f store

im age. B ased on a review o f early store im age research, Lindquist ( 1 9 7 4 ) expanded on

this to include other aspects within prom otion, such as sales prom otions, displays and

incentives. M arks ( 1 9 7 6 ) study investigating the operationalisation o f the store image

construct further confirm ed the relevance o f the prom otion dimension. H ow ever, few

em pirical store im age studies report on the prom otion dimension in their findings.

2.3.S.7 Sales Personnel

Sales personnel as one o f main dim ensions o f store im age, includes: Attitude o f sales

personnel, K now ledge ability o f sales personnel. N um ber o f sales personnel, Good or

p oo r service ,Em p loyee service, functional quality, personal interaction, personnel.

Page 86 of 325
preference for sales people, relational quality, salesmanship, salespeople, service,

salesperson/service, service-sales associates attributes.

In another grouping category for sales personnel by J. B ak er et al. (2 0 0 2 ); G race and

O ’C ass (2 0 0 5 ); Hu and Jasper (2 0 0 6 ) only sales personnel interaction and appearance

were considered. The im portance o f sales personnel has been recognized since early store

im age studies (M arks, 1 9 7 6 ; M artineau, 1 9 5 8 ). R esearch on the underlying structure o f

store im age further confirm ed sales personnel as a dimension o f store im age construct

(M anolis & et al., 1 9 9 4 ).

Sales personnel play an important role in creating the social cues in a store that are found

to improve evaluations o f store im age (Hu & Jasper, 2 0 0 6 ). The interaction with

custom ers through sales personnel is central to consum er-focused com m unication (K nee,

2 0 0 2 ). K oo ( 2 0 0 3 ) notes that Korean consum ers first need to form a favorable store

im age on non-physical characteristics to prom ote a positive attitude towards the store.

This em phasizes the need to improve sales personnel service. Lee et al., ( 2 0 0 5 ) how ever,

did not find a significant relationship between sales personnel and store loyalty or store

satisfaction.

The sales personnel’s product knowledge is a key store im age attribute in m ale shopping

behavior, according to S. L . L ee, Ibrahim, and Hsueh-Shan (2 0 0 5 ). A . Sharm a and

Stafford (2 0 0 0 ) for instance found that sales personnel are regarded as having m ore

credibility in the prestige store am bience and less in the discount store am bience.

2.3.S.8 Services
A s the last but not least am ong main dimensions for store im age, Service is including

Paym ent options. D elivery options. A fter-sales services and in-store service (Huddleston

et al., 1 9 9 0 ; M axham & N etem eyer, 2 0 0 3 ; H .-J. Park & B u m s, 2 0 0 5 ; Stauss, 2 0 0 2 ;

Teller, K otzab, & Grant, 2 0 0 6 ; Thang & Tan, 2 0 0 3 ).

A lso in another category, services include: Credit, D elivery, Restaurant facilities, other

services (gift consultants, layaw ay plans, baby strollers, escalators, etc: A fter-sales

service, com plaint handling, core-service, credit, credit facilities, em ployee service, in­

Page 87 of 325
store service, m erchandise, m erchandise request, post-transaction service, presence o f

related services, rich m ix o f com m odities and service, salespeople service, service,

service convenience, service-sales associates attributes, service-store am enities, service-

store facilities, value-added service).

S ervice is a crucial elem ent o f a brand; this includes staff-custom er interaction (sales)

(N ew m an & Patel, 2 0 0 4 ). Good service contributes toward form ing a positive store

im age. S ervice builds custom er relationships and leads to positive-w ord-of-m outh and

custom er loyalty (N ew m an & Patel, 2 0 0 4 ). Studies investigating the underlying structure

o f the store im age construct confirm ed the relevance o f the service dimension (Lindquist,

1 9 7 4 ; M anolis & et al., 1 9 9 4 ; M arks, 1 9 7 6 ). Service has often been em ployed in store

im age research to account for differences between consum er segm ents. Service has

successfully differentiated between consum er types on the basis o f shopping centre

patronage m otives.

V arious store Service builds custom er relationships and leads to positive-w ord-of-m outh

and custom er loyalty (N ew m an & Patel, 2 0 0 4 ). C ustom ers’ perception o f social cues,

w hich includes service, im proves their perception o f m erchandise (H u & Jasper, 2 0 0 6 ;

N ew m an & Patel, 2 0 0 4 ). T eller et al. (2 0 0 6 ) found that sales personnel service greatly

affect store ch oice, even m ore than m odem services, such as hom e delivery.

The results o f a study on brand recognition indicated that brand im age does not influence

consum ers’ perceptions o f service (Stephen & Cindy, 1 9 9 7 ). H ow ever, findings o f a

study by Semeijn et al. (2 0 0 4 ) indicated that a m ore favorable perception o f service

influences the valuation o f store brands in a positive sense. The perceptions o f service

differed between consum ers o f shopping centers in first-tier and second-tier cities in

China. Consum ers in first-tier cities placed greater em phasis on variety o f services,

w hereas consum ers from second-tier cities stressed quality o f services (W on g & Y u ,

2 0 0 3 ).

Studies investigating the underlying structure o f the store im age construct confirm ed the

relevance o f the service dimension (Lindquist, 1 9 7 4 ; M anolis & et al., 1 9 9 4 ; M arks,

1 9 7 6 ). Service has often been em ployed in store im age research to account for

Page 88 of 325
differences between consum er segm ents. Service has successfully differentiated between

consum er types on the basis o f shopping centre patronage m otives.

M. L ee and Johnson (1 9 9 7 ) concluded that the service expectations o f consum ers differ

with regard to apparel discount, off-priced, specialty and department stores. Consum ers

had low service expectations from discount stores, due to the low prices offered, and

expected even less service from off-priced stores. In contrast, consum ers expected

extensive service from sjjecialty stores and even higher levels o f service at department

stores.

Few studies report on the sub dim ensions o f in-store service and delivery options. Thang

and Tan ( 2 0 0 3 ) indicated that a favorable perception o f in-store service has a positive

effect on store preference. Teller et al. ( 2 0 0 6 ) concluded that tim e-starved consum ers

(i.e., dual incom e households with children) are willing to pay m ore for hom e delivery o f

groceries and their willingness to use hom e delivery is significantly higher than those o f

new technologists (i.e., young and technologically interested consum ers with no tim e for

shopping). Their study further determined that distance in m eters from hom e to store and

distance in minutes from hom e to store does not influence consum ers’ willingness to use

hom e delivery to a considerable degree. The results suggest that a favorable perception o f

in-store service, e.g ., gift-wrapping and inter-store transfers, positively influences store

preference and delivery options, specifically home delivery, seem to be an attractive

option to tim e-pressured consum ers. Thus, retailers should ascertain w hich in-store

services and delivery options are important to their target consum er and ensure that these

are offered.

B y im proving store service quality, retailers are able to increase consum er satisfaction,

foster a m ore favorable relative attitude am ongst consum ers, and increase the likelihood

those consum ers will recom m end the store. Increased store satisfaction, in turn, positively

influences relative attitude, recom m endation and repurchase, w here re-purchase

positively influences store loyalty. These findings w ere confirm ed by G race and O ’C ass

(2 0 0 5 ), w ho established that service positively influences custom er satisfaction, as well

as perceived value for m oney and consum ption feelings, which in turn influenced re­

patronage intentions.

Page 89 of 325
The research results highlight the need for retailers to address the practical implications

associated with the results from studies on after-sales service, payment options, in-store

service and delivery options. The current m arketplace is marked by increased

com petition, with consum ers becom ing m ore demanding. Thus, retailers need to direct

their available resources to improve relevant services that provide consum ers with added

value and a m ore satisfying store experience. This will ensure differentiation in the

m arketplace and consum er satisfaction, ultimately leading to increased repeat consum ers

and profitability (Sivadas & B aker-Prew itt, 2 0 0 0 ; A . W ong & Sohal, 2 0 0 3 ).

W ith regards to paym ent options, the m ajority o f the review ed research focused on credit

facilities. A study by Huddleston et al. ( 1 9 9 0 ) confirm ed that, based on lifestyle

characteristics, elderly consum er segm ents w ere related to the importance placed on

credit facilities. Shopper, positive thinker, socially active, and credit prone lifestyle

factors all exhibited a significant relationship with the im portance placed on credit, whilst

no such relationship existed for education oriented elderly consum ers. M onger and

Feinberg ( 1 9 9 7 ) exam ined the influence o f mode o f paym ent on the form ation o f

reference prices (i.e ., w hat consum er’s believe is a fair price for a product) and

reservation prices (i.e .. The highest price a consum er is willing to pay for a product).

Their results supported their hypotheses that (1 ) reference prices differ significantly

across m ode o f paym ent; (2 ) reference prices are higher when consum ers pay with a

credit card as opposed to cash or personal cheques: and (3 ) reservation prices are higher

when consum ers pay with a credit card as opposed to cash or personal cheques.

Credit card use w as also found to prom ote com pulsive buying. R esearch results provide

support for the influence o f credit card usage on consum er behavior, but also suggest that

consum ers differ with regard to the im portance they place on the availability o f credit.

(H .-J. Park & B u m s, 2 0 0 5 ). R etailers should, therefore, offer consum ers the option o f

credit card paym ent, but not exclude other m eans o f paym ent, e.g ., cash, store card s or

debit cards, since these m ight be the preferred m eans o f paym ent for consum ers w ho are

not credit prone.

Few studies report on the sub dimensions o f in-store service and delivery options. Thang

and Tan ( 2 0 0 3 ) indicated that a favorable perception o f in-store service has a positive

Page 90 of 325
effect on store preference. T eller et al. (2 0 0 6 ) concluded that tim e-starved consum ers

(i.e ., dual incom e households with children) are willing to pay m ore for hom e delivery o f

groceries and their willingness to use hom e delivery is significantly higher than those o f

new technologists (i.e., young and technologically interested consum ers with no time for

shopping). Their study further determined that distance in m eters from home to store and

distance in minutes from hom e to store does not influence consum ers’ willingness to use

hom e delivery to a considerable degree. The results suggest that a favorable perception o f

in-store service, e.g ., gift-wrapping and inter-store transfers, positively influences store

preference and delivery options, specifically home delivery, seem to be an attractive

option to tim e-pressured consum ers. Thus, retailers should ascertain which in-store

services and delivery options are important to their target consum er and ensure that these

are offered.

S. B u rt and C arralero-Encinas (2 0 0 0 ) confirm ed that U K consum ers perceive the return

policy associated with the afler-sales service sub dimension, as offered by a U K retailer,

m ore favorable than Spanish consum ers perceived the sam e U K retailer. Thang and Tan

( 2 0 0 3 ) concluded that a favorable perception o f after-sales service does not have a

positive effect on store preference. In research on the handling o f com plaints, Stauss

(2 0 0 2 ) concluded that increased satisfaction with the process and outcom e o f a consum er

com plaint leads to increased overall com plaint satisfaction, relationship satisfaction and

re-purchase intentions. A n increase in prior positive com plaint experiences resulted in a

m ore positive consum er attitude tow ard com plaining. Increased positive com plaint

experience, how ever, does not affect the perceived value o f the com plaint or the

perceived likelihood o f a successful com plaint.

M axham and N etem eyer ( 2 0 0 3 ) determined that perceived consum er distributive justice

(i.e ., the perception that they have been com pensated fairly) in com plaint handling

positively affects satisfaction with the recovery, overall firm satisfaction, purchase intent,

and likelihood o f w ord-of-m outh. A consum er’s perception o f procedural ju stice (i.e., the

perception that the p rocess in which the outcom e w as provided w as fair) has a positive

effect on satisfaction with recovery, overall firm satisfaction, and likelihood o f positive

w ord o f mouth. Schoefer and Ennew ( 2 0 0 5 ) com pared the em otional responses to service

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com plaint experiences between groups exposed to low justice levels (including

distributive, procedural and interactional ju stice) and groups exposed to high justice

levels. Results confirm ed that low ju stice groups reported significantly higher levels o f

negative em otion than did high ju stice groups.

Retailers need to implement long-term oriented and consistent service improvement

efforts to handle com plaints satisfactorily. This should include increasing the perceived

value o f com plaining by (1 ) lowering perceived costs, e.g ., speedy and appropriate refund

or exch an ge services, and (2 ) increasing perceived benefits, e.g .. Added incentives such

as coupons and discounts. Retailers should facilitate the com plaint process by m aking it

easy for dissatisfied consum ers to com plain, e .g ., by providing toll-free numbers, online

consum er services, a consum er suggestion box, and a consum er voicing centre.

Com plaint handling should be characterized by retailers admitting their m istakes, by fast

and polite response, and m eans o f consistent follow-through (H .-b. K im et al., 2 0 0 3 ).

A consum er’s perception o f ju stice during com plaint handling significantly affects

consum er behavior. Distributive ju stice, specifically, had the greatest relative influence

on overall consum er satisfaction, purchase intent, and positive word o f mouth. Thus,

retailers should invest in resources to effectively address consum er com plaints and

enhance com pensation e.g ., through refunds and future discounts (M axham &

N etem eyer, 2 0 0 3 ). Service com plaint experience elicits em otional responses from

consum ers. By recruiting, training and em pow ering staff to effectively m anage

consum er’ s em otional responses, retailers are able to interpret and defuse negative

consum er responses, whilst encouraging positive em otions (Schoefer & Ennew , 2 0 0 5 ).

2.3.6 Summary
In term s o f the stream o f store image studies, the year 1 9 7 4 w as very productive. In a

special issue on store image in the Journal o f Retailing (1 9 7 4 -1 9 7 5 ) , store image

studies w ere broadened and ranged from definition o f store image to m easurem ent issues

o f store im age. The m ost notable store im age study w as done by (Lindquist, 1 9 7 4 ).

H e sum m arized 19 previous studies on store image and presented nine dimensions:

M erchandise, Services, Clientele, Physical facilities. C onvenience, Prom otion, Store

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atm osphere, Institutional factors, and Post-transaction satisfaction. The value o f this

study is not only in the exhaustive listings, but also in the m eta-analytic method.

A ccording to his frequency analysis, merchandise selection o r assortment w as ranked

highest with 4 2 % o f the mentions. M erchandise quality (3 8 % ), merchandise pricing

(3 8 % ), location convenience (3 5 % ), m erchandise styling and fashion (2 7 % ), service in

general (2 7 % ), and salesclerk service (2 7 % ) w ere ranked in respective order. This

categorization has been w idely cited in a m ajority o f the research on store image

since then (J. B ak er et al., 1 9 9 4 ; Hansen & D eutscher, 1 9 7 7 ; M azursky & Jacob y, 1986;

M itchell, 2 0 0 1 ; Sirgy & Sam li, 1 9 8 5 ; Z im m er & Golden, 1 9 8 8 ). Later, Hansen and

Deutscher ( 1 9 7 7 ) established a clearer division am ong the dimensions, com ponents, and

attributes o f store im age. They presented 41 attributes o f store image and those

attributes w ere classified in one o f 2 0 com ponents, and in turn, those com ponents w ere

found to belong to nine store im age dimensions. A lso they explored different attribute

com positions for department stores and grocery stores and found that the appealing

attributes depended upon shoppers’ interests.

Pessem ier (1 9 8 0 ) provided a m arket positioning method, a direct joint space m odel,

through the ch aracteristics o f a store, such as custom ers' profile, a store's institutional

m aturity, m erchandise offerings, convenience o f location, shopping pleasure, transaction

convenience, prom otional em phasis, integrity, and im age strength and clarity. This model

can be used to predict the shopping and sales effects o f various repositioning m oves

according to changes in the store characteristics. Pessem ier (1 9 8 0 ) stressed that market

positioning research using direct join t-space m odelling should use consum ers' perceived

store im ages and current custom ers' profiles.

D ow ns and H aynes ( 1 9 8 4 ) explored retail im age using dynam ic com parative retail

positioning. A dynam ic com parative retail im age study com pared consum ers' reactions to

m anagem ent's intent, and it provided tim ely and direct evaluation o f retailing strategies.

In order to explore the structure o f retailers' perceived store im age for developing a

com petitive advantage, Oppewal and Tim m erm ans ( 1 9 9 7 ) studied retailer behaviour and

found that retailers considered service as the dimension in which they m ost positively

distinguish them selves from com petitors.

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Store im age results from perception o f the store m ix elements arising from the totality o f

the experiences (m ay be formed without direct experience e.g ., through ads or word o f

M outh) with the store by the actor.

Com panies differentiate them selves from com petitors on the basis o f their corporate

identity. The projection of corporate identity depends on the total corporate

com m unication m ix. Their m essage is enhanced by the variety o f cues and deliberately

planned m essages that interplay and support one another to form the corporate identity.

Store im age is a vital part o f m arketing com m unication and corporate identity

representation, as it is a vehicle that affects custom er’s perception o f the store and the

store’ s identity. Store im age is a large part o f a direct com m unication that attracts

custom ers. T o be able to invest in store image optim ally, retailers should take cognizance

o f the m anagem ent th ereof as it cannot be ignored. An appropriate store image has the

potential to increase sales. Thus, aw areness o f the im portance o f store image dimensions

is fundamental to building a significant market share in the highly com petitive apparel

retail environment.

Consum ers also looking for am bience and convenience in shopping. Consum ers have a

num ber o f enduring perceptions, or im ages, in their evaluations o f retail outlets. Retail

stores provide the environm ent, m erchandise, and services that they feel reflect the

store’ s im age as well as the consum er’s self-im age. Consum ers tend to shop in stores that

have im ages consistent with their own self-im age. M ajor department stores and

superm arkets have begun to focus on the need to build a strong store im age for their

outlets. They recognize the im portance o f building on identity to attract loyal custom ers.

Given the potential for misinterpretation o f image arising from cultural and behavioral

differences in international markets, one might exp ect these potential problems o f

differentiation to be amplified when entering a foreign market.

It is clear that store im age is a com p lex and extrem ely important concept to store owners.

N o store can be all things to all people. Therefore, it is impossible to exp ect that the store

will project the sam e im age across a variety o f different market segments. A unique store

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im age can com plem ent an integrated marketing strategy and build Com petitive advantage

that is not easily followed by other retailers (R osenbloom , 19 8 3 ).

B y im plication, store im age is influenced by (1 ) the consum er’s perception o f a set o f

salient store attributes; (2 ) the im portance the consum er places on the various store image

dim ensions and sub dimensions, and the associated store attributes; as well as (3 ) the

retailer’s manipulation o f these store attributes through strategic m anagem ent.

I f m anagem ent’s perception o f the im portance o f store image dimensions differs from

custom ers’ perception, their decisions regarding store design m ay be unsuccessful. In

sum m ary, consum ers form store im age perceptions based on the store’s functional and

psychological attributes and their cultural values. It therefore becom es important to

exam ine w hat dimensions o f store image are m ost important to consum ers.

R etailers increasingly offer com parable services and this highlights the need to

effectively cater to the needs and w ants o f consum ers. R etailers are thereby able to avoid

the risk o f losing dissatisfied consum ers to com petitors, which will ultim ately lead to

erosion o f profits and consequent failure (D e W ulf, O dekerken-Schroder, & lacobucci,

2 0 0 1 ; A . W on g & Sohal, 2 0 0 3 ).

In conclusion, the literature indicated that no well established and precise definition o f

store im age exists. Store im age is generally described as a com p lex com bination o f

tangible and intangible attributes o f store im age (D oyle & Fenw ick, 1 9 7 4 ; K eaveney &

Hunt, 1 9 9 2 ; Lindquist, 1 9 7 4 ; M arks, 1 9 7 6 ; O xenfeldt, 1 9 7 4 ; Z im m er & Golden, 19 8 8 ).

Several scholars S. B urt and C arralero-Encinas (2 0 0 0 ); Hirschm an (1 9 8 0 ); M azursky and

Jaco b y ( 1 9 8 6 ) point out the interplay o f these elements and the custom ers' overall

interpretation o f them , based on previous knowledge and experience which are widely

accepted to determine store image.

One o f the com m only accepted form al definitions o f retail store im age is a mental

perception held by a shopper form ed by the psychological attributes and functional

qualities o f the store. N um erous research on store im age, how ever, have suggested a

general classification o f relevant store characteristics. Such a list includes the following

categories: m erchandise (N aresh K . M alhotra, 1 9 8 3 ; M azursky & Jaco b y , 1 9 8 6 ), price

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(M azursky & Jaco b y , 1 9 8 6 ) convenience o f location (Lindquist, 19 7 4 ; M azursky &

Ja co b y , 1 9 8 6 ; Pessem ier, 1 9 8 0 ) store personnel (J. B ak er et al., 1 9 9 4 ; Jo y ce &. Lam bert,

1 9 9 6 ; Kunkel & B erry, 1 9 6 8 ; M arks, 1 9 7 6 ; M artineau, 1 9 5 8 ; Samli et al., 19 9 8 ). The

literature review m akes a com pelling case for exam ining what store image is, how it is

defined and what kind o f relationships exist in the findings o f studies on store image.

The unique dynam ics o f store im age revealed and investigated as a m eans o f

understanding w hat im pacts a shopper's experience. It is therefore concluded that the

literature provided theoretical justification for the developm ent o f a model o f store image

form ation.

2.4 Consumer-Based Retailer/Brand Equity

In the last decade, store retailers have struggled to survive in a highly com petitive retail

market, with new form s o f non-store retailers, declining sales and increased com petition

(M oye & K incade, 2 0 0 2 ). In the current distribution situation, the com petition between

retailing form ats is high and their survival depends on continuous transformation to adapt

to consum ers’ changing expectations. Som e distributors (especially shopping centers and

hyperm arkets) have m ore negotiating pow er than m anufacturers in the distribution

channel.

The theory o f branding and brand m anagem ent principle can be applied to retail brand or

retailer albeit with certain variation (Ailaw adi & K eller, 2 0 0 4 ). A s a result, the concept o f

retailer equity has recently em erged in the m arketing literature, with practitioners

(K ram er, 1 9 9 9 ) and m arketing researchers (K eller, 2 0 0 3 ) suggesting that, sim ilar to

brands, retailers possess equity (A rnett et al., 2 0 0 3 ; Pappu, Quester, & C ooksey, 2 0 0 6 b )

which is term ed as retailer equity (Pappu & Quester, 2 0 0 6 a ; Pappu & Quester, 2 0 0 8 ). as

brand equity has been referred to as consum er-based brand equity (Pappu et al., 2 0 0 5 ;

Y o o & Donthu, 2 0 0 1 ) w hich involves a set o f m em ory-based associations to a particular

brand that exists in the minds o f consum ers (K eller, 2 0 0 3 ), the equity that consum ers

associate with a retail brand or retailer is referred to as consum er-based retailer

equity(Pappu & Quester, 2 0 0 6 b ). M uch research focuses on developing consum er-based

retailer equity m easurem ent tools (A rnett et al., 2 0 0 3 ; Pappu, Quester, & C ooksey,

Page 96 of 325
2 0 0 6 a ). There are a number o f retail operational elements that can affect retail store name

equity, such as pricing, merchandise variety and assortm ent, promotion and layout, or

custom er service. H ow ever, two equity dimensions identified as particularly important to

retailers are familiarity and im age (M . Levy & W eitz, 2 0 0 4 ).

Retail sales now represent a declining share o f consum er expenditures in several W estern

econom ies because o f factors such as ageing populations, changing consumption patterns

and saturation in demand (W ebb, 2 0 0 0 , p. 5 0 3 ). A s a result, building brand equity has

becom e increasingly important for retailers in order to maintain or improve their

econom ic perform ance. Indeed, retailers have recognized the pow er o f branding and are

increasingly focusing on brand building (Feuer et al., 2 0 0 5 ).

There is several brand equity m easurement approaches based on the consum er

perspective (Pappu et al., 2 0 0 5 ). A review o f the literature on retailer equity measurement

reveals som e approaches based on a consum er perspective. One approach involves the

extension o f consum er-based brand equity m easurement to the m easurem ent o f the equity

associated with retailers. Y o o and Donthu (2 0 0 1 ) were the first to com e up with a

consum er-based brand equity scale, advocating its extension to the m easurem ent o f

retailer equity.

A ccording to these pioneering researchers, consum er-based brand equity com prises three

dimensions, namely brand aw areness/associations, brand loyalty and perceived quality.

The second approach involves the development o f retailer equity indexes.

The notion that brands add value to products has been called brand equity (Pappu &

Quester, 2 0 0 6 b ). Based on the prem ise that branding and brand m anagement principles

can be applied to retail brands, albeit with certain variation (Ailaw adi 8c K eller, 2 0 0 4 , p.

3 4 0 ), the concept o f retailer equity, whereby the nam e o f a retailer bestows value upon it,

has recently attracted the attention o f both marketing researchers (e.g ., Arnett et al., 2 0 0 3 )

and practitioners (e.g., K ram er, 1 9 9 9 ; Thompson, 1 9 9 8 ). Likew ise, brand equity has been

referred to as consum er-based brand equity (e.g ., Pappu et al., 2 0 0 5 ; Y o o & Donthu,

2 0 0 1 ) , from a consum er or marketing perspective, researchers refer to the equity

consum ers to associate with a retail brand as consum er-based retailer equity. Building

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brand equity is an important strategic issue for retailers, generating multiple benefits such

as the ability to leverage one’ s nam e by launching private label brands and increase

revenue and profitability by insulating them from com petitors (Ailaw adi & Keller, 2 0 0 4 ).

In recent years, retailers have been facing a challenging m arketing environment in the

form o f m ore demanding consum ers, intensified com petition and slow -grow th m arkets

(B lo em er & O dekerken-Schroder, 2 0 0 2 ; Sirohi et al., 19 9 8 ).

Hartman and Spiro ( 2 0 0 5 ) have conceptually outlined the m eaning o f equity in the

con text o f retail stores and used the term ‘custom er-based store equity’ drawing mainly

from K eller ( 1 9 9 3 ) conceptualization o f custom er-based brand equity. Retailer equity

(store equity) is defined as "the differential effect o f store knowledge on custom er

response to the marketing activities o f the store" (Hartm an & Spiro, 2 0 0 5 ). Custom er

response refers to the custom er’s processing o f store knowledge to form subsequent

com parative evaluations, preferences, behavioral intentions, o r behavior. This equity can

be assessed by measuring the intention to patronage or a preference for the specified store

in com parison with the fictitiously nam ed or unnamed store (H artm an & Spiro, 2 0 0 5 ;

Y o o , Donthu, & L ee, 2 0 0 0 ). R etailer equity, as the incremental utility or value added to a

retailer by its brand nam e, is critically important to make points o f differentiation that

lead to com petitive advantages based on non-price com petition (A ak er, 1 9 9 1 ; Y o o et al.,

2000 ).

A ccord in g to Y o o et al. (2 0 0 0 ), m arketing action has the potential to affect brand equity

because it represents the effect o f accum ulated m arketing investments into the brand.

Brand-nam e recognition with strong associations, perceived quality o f product, and brand

loyalty can be developed through careful long-term investment. Likew ise, marketing

action has the potential to affect retailer equity and develop its dimensions. The similar

argum entation is proposed by D eC arlo, Laczniak, M otley, and R am asw am i (2 0 0 7 ) that’

there are number o f retail operational elem ents that can affect retail store nam e equity

(retailer equity), such as pricing, m erchandise variety and assortm ent, prom otion and

layout, custom er service” .

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Brand equity is regarded as a very important concept in business practice as well as in

academ ic research because m arketers can gain com petitive advantage through successful

brands. The com petitive advantage o f firm s that have brands with high equity includes

the opportunity for successful extensions, resilience against com petitors’ promotional

pressures, and creation o f barriers to com petitive entry (Farquhar, 19 8 9 ). An indication o f

the im portance o f well-know n brands is the premium asset valuation that they obtain. F o r

exam ple, m ajor corporations such as C anada-D ry and C olgate-Palm olive have created the

position o f brand equity m anager to build sustainable brand positions (Y o v o v ich , 1 9 8 8 ).

A ccording to Pappu and Quester (2 0 0 6 b ) retailer equity is a multidimensional concept, as

reflected in retailer aw areness, retailer associations, retailer perceived quality and retailer

loyalty. Other researchers identify sim ilar dimensions.

Consum er-based retailer equity is defined in the present research sim ilar to A aker (1 9 9 1 ,

p. 15) as "the value consum ers associate with a retailer, as reflected in the dimensions of:

retailer aw areness, retailer associations, and retailer perceived quality and retailer

loyalty". These consum er-based retailer equity dimensions m irror the four brand equity

dimensions (e .g ., brand aw areness, brand associations, perceived quality and brand

loyalty) proposed by A ak er (1 9 9 1 ); (1 9 9 6 ). B oth A aker (1 9 9 1 ) and K eller (1 9 9 3 ) have

conceptualized brand equity based on consum ers’ m em ory-based associations.

A rnett et al. (2 0 0 3 ) propose retailer loyalty, nam e aw areness; service quality and retailer

associations; Hartm an and Spiro ( 2 0 0 5 ) suggest store aw areness, store loyalty and store

image. A s a dimension o f retailer equity, retailer associations are m ore suitable than store

image because store im age is reflected by retailer associations according to K eller (1 9 9 3 ),

and high brand equity implies that custom ers have a lot o f positive and strong

associations related to the brand (Y o o et al., 2 0 0 0 ). M oreover, R etailer perceived quality

proposed by Pappu and Quester (2 0 0 6 a ); (2 0 0 6 b ) includes the quality o f goods and

service, w hich is a m ore holistic construct than service quality.

A ccord in g to Y o o et al. (2 0 0 0 ), marketing action has the potential to affect brand equity

because it represents the effect o f accum ulated m arketing investments into the brand.

Brand-nam e recognition with strong associations, perceived quality o f product, and brand

Page 99 of 325
loyalty can be developed through careful long-term investment. Likewise, marketing

action has the potential to affect retailer equity and develop its dimensions. The similar

argum entation is proposed by D eCarlo et al. ( 2 0 0 7 ) that” there are number o f retail

operational elements that can affect retail store name equity (retailer equity), such as

pricing, merchandise variety and assortm ent, promotion and layout, custom er service” .

A ccording to A rnett et al. (2 0 0 3 ), retailer equity is a multi-dimensional construct

com prising o f the dim ensions: name aw areness, retailer associations, and service quality

and store loyalty. Further, Arnett et al. considered ‘product quality’ and ‘perceived value’

as tw o sub-dimensions o f the retailer associations dimension and suggested developing

retailer equity indexes based on all these above dimensions. Both m easurement

approaches are sim ilar in that they propose four com m on dimensions: awareness,

associations, quality and loyalty for measuring the equity associated with a retaMer.

H ow ever, they also differ on how they define and m easure each o f these dimensions.

A w areness: W hereas Y o o and Donthu (2 0 0 1 ) treated aw areness and associations as a

com bined dimension, A rnett et al. (2 0 0 3 ), similar to Pappu et al. (2 0 0 5 ), considered

‘aw areness’ as a distinct dimension o f retailer equity. Arnett et al. have used more

discrim inant indicators for the ‘aw areness’ dimension com pared to (Y o o & Donthu,

2001).

High retailer equity, sim ilar to brand equity argued by Y o o et al. (2 0 0 0 ), implies that

consum ers can recognize and recall the retailer easily, have many positive and strong

associations related to the retail brand, perceive the retailer is o f high quality, and are

loyal to the retailer.

TV, - \3 2 y6

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 Figure 2.1 Aaker's Brand Equity Model (1991)

The study o f C obb-W algren, Ruble, and Donthu (1 9 9 5 ) w as the first study, which

adopted A ak er’ s ( 1 9 9 1 ) model to m easure consum er-based brand equity, com prising four

D im ensions: brand aw areness, brand association, perceived quality and brand loyalty. A

further study conducted by B . Y o o and Donthu (1 9 9 7 ), used confirm atory factor analytic

methods to m easure brand equity. M eanwhile, Popkowski L eszczy c et al. (2 0 0 0 ) and A .

Sinha and Pappu ( 1 9 9 8 ) adapted A ak er’s ( 1 9 9 1 ) model to m easure consum er-based brand

equity U sing B ayesian m ethods (Pappu et al., 2 0 0 5 ). In addition, this model has also been

tested in other em pirical studies such as (H .-b . Kim et al., 2 0 0 3 ; V ^ q u e z , Del R io, &

Iglesias, 2 0 0 2 ; W ashburn & Plank, 2 0 0 2 ).

Although all are based on A ak er’ s ( 1 9 9 1 ) model to m easure consum er-based brand

equity, there are som e different findings am ong these research results. F o r exam ple, Y o o

et al. ( 2 0 0 0 ) found that brand association and brand aw areness w ere not significantly

discrim inant, in other w ords, these tw o concepts m erged into one factor called ‘Brand

equity. Brand aw areness, Brand association, Perceived quality. Brand loyalty, aw areness

with high association ’ . H ow ever, this finding is challenged by other results, w hich shows

a distinction between brand aw areness and brand association (Pappu et al., 2 0 0 5 ;

W ashburn & Plank, 2 0 0 2 ).

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M oreover, the m easurem ent o f each com ponent o f brand Equity has been treated

differently in the em pirical tests o f A aker’ s model. F o r exam ple, brand aw areness w as

m easured using a single m easure in Pappu et al. (2 0 0 5 ) study, while it w as treated as a

multidimensional scale in other studies by Y o o et al. (2 0 0 0 ) and W . G. Kim and Kim

( 2 0 0 4 ). This illustrates one o f the gaps in the literature on branding, which has not yet

reached a consensus definition and m easurem ent o f custom er-based brand Equity.

Therefore, this m easurem ent model needs to be replicated in different contexts in order to

increase the validity and reliability o f the m easurem ent scale (Baldauf, C ravens, &

Binder, 2 0 0 3 ; W ashburn & Plank, 2 0 0 2 ; Y o o et al., 2 0 0 0 ). These literatures show that

m ost studies on custom er-based brand equity have approached the subject from the

perspective o f the consum er, even though the ‘custom er’ might be an Individual or an

organization (A tilgan, A ksoy, & Akinci, 2 0 0 5 ).

Brand equity could be considered from both quantitative and qualitative aspects, or its

com ponents could be divided into tw o groups, attributes-based or non-attributes based.

M oreover, som e consum er-based brand equity m odels are m ore suitable to low -

involvem ent products, while others are considered to relate m ore to high-involvem ent

products: the quantitative and qualitative perspectives o f brand equity are cited as the

hard and soft sides, respectively (B iel, 1 9 9 7 ). The quantitative dimensions are relevant to

brand value, w hich is the bottom line o f business, or reflected as the result o f

m anagem ent’ s ability to leverage its brand to provide profits for their com pany

(A nantachart, 1 9 9 8 ).

These dim ensions include distribution coverage (Srivastava & Shocker, 1 9 9 1 ),

perform ance (L assar, M ittal, & Sharm a, 1 9 9 5 ) and physical features (J.-N . K apferer,

1 9 9 2 ). On the other hand, m ost dimensions o f consum er-based brand equity are on the

qualitative o r soft side, w hich include perceptions and behaviors o f consum ers that

initiate equity for a brand (A nantachart, 1 9 9 8 ). F o r exam ple, the dimensions o f brand

equity include brand aw areness, perceived quality, brand associations and brand loyalty

(A aker, 1 9 9 1 ) and brand personality (B lackston, 1 9 9 5 ). The reason why the qualitative

dimension is dom inant in term s o f the com ponents o f brand equity is that functional

benefits and product differentiation can be easily imitated, while it is difficult to cop y the

Page 102 of 325

specific meaning o f a brand in term s o f consum er perception. Therefore, consum er-based

brand equity should focus m ore on the qualitative aspects.

Consum er-based brand equity com ponents can also be seen from tw o directions: the

Attribute-based perspective and the non-attribute based perspective. The attribute-based

brand equity perspective is related to product ch aracteristics, product benefits or both,

created directly from a com p an y’s m arketing activities, capturing consum er perception

(C . S. Park & Srinivasan, 1 9 9 4 ). This perspective includes product perform ance (L assar

et al., 1 9 9 5 ), physical features o f the product (J.-N . K apferer, 1 9 9 2 ) and distribution

coverage (S rivastava & Shocker, 1 9 9 1 ). In contrast, the non- attribute based dimensions

o f brand equity, which are not related to product attributes, are the intangible or

psychological Com ponents (A nantachart, 19 9 8 ). Som e exam ples are, brand personality

(Black ston , 1 9 9 5 ; J.-N . Kapferer, 1 9 9 2 ), attitude accessibility (Edell, 1 9 9 3 ; Farquhar,

1 9 8 9 ) and brand loyalty (A aker, 1 9 9 1 ; Srivastava & Shocker, 1 9 9 1 ; Y o o et al., 2 0 0 0 ). In

term s o f the level o f involvem ent o f products, there are som e definitions o f custom er-

based brand equity that might be m ore appropriate to low -involvem ent products such as

H olden’s ( 1 9 9 2 ) model o f Brand equity, with the tw o com ponents o f brand aw areness

and brand preference.

This m eans that the low -involvem ent brand m anager should only focus on increasing

brand aw areness and consum er preference in order to achieve a com petitive advantage

over other brands. H ow ever, as this low involvem ent, product model cannot be applied to

a high-involvem ent product; other m odels are used to explain consum er-based brand

equity in the case o f high-involvem ent products. F o r exam ple, L assar et al. (1 9 9 5 )

conceptualized brand equity as a multidimensional construct consisting o f brand

association, perceived value, trustworthiness, feeling, and perform ance (Anantachart,

1 9 9 8 ), Although a w ide range o f concepts have been conceptualized as com ponents o f

Consum er-based brand equity and m any different approaches have been consum er-based

brand equity theories, there exist som e sim ilarities am ong these studies:

One similarity is that consum er-based brand equity is nearly alw ays represented as a

multidimensional construct that conceptually consists o f various concepts (A aker, 1 9 9 1 ;

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K eller, 1 9 9 3 ; Srivastava & Shocker, 1 9 9 1 ; Washburn & Plank, 2 0 0 2 ; Y o o et al., 2 0 0 0 ).

Several definitions use a wide range o f concepts to define brand equity, such as

Srivastava and Shocker ( 1 9 9 1 ) model with six com ponents, nam ely, brand image, brand

aw areness, brand loyalty, perceived value, distribution coverage, and utility not explained

by a m easured attribute. Som e o f the definitions do not clearly identify w hat brand equity

exactly m eans (C uervorst, 1 9 9 5 ; Edell, 19 9 3 ).

The second similarity is that som e concepts have been consistently used am ong

researchers. F o r exam ple, brand association or brand im age has appeared in alm ost all

definitions - (e .g ., A aker, 1 9 9 1 ; Farquhar, 1 9 8 9 ; J.-N . K apferer, 1 9 9 2 ; K eller, 1 9 9 3 ; W .

G. Kim & K im , 2 0 0 4 ; L assar et al., 1 9 9 5 ; M artin & B row n, 1 9 9 1 ; Srivastava & Shocker,

1 9 9 1 ; W ashburn & Plank, 2 0 0 2 ; Y o o et al., 2 0 0 0 ). H alf o f the studies also consider

‘ brand aw areness’ a key com ponent o f consum er-based brand equity: (e .g ., A aker, 1 9 9 1 ;

B lack ston , 1 9 9 5 ; K eller, 1 9 9 3 ; W . G. K im & K im , 2 0 0 4 ; Pappu et al., 2 0 0 5 ; Washburn &

Plank, 2 0 0 2 ; Y o o et al., 2 0 0 0 ).

O ver the past few years as the Indian econom y has grown at a rapid and steady rate o f

around 8 -9 % it has also seen a significant growth in the Indian Retail Sector. A ccording

to A T K earn ey’ s report on Em erging M arket (2 0 0 8 ), organized retail, which still

accounts for less than 5 percent o f the entire retail m arket, is expected to grow at a

com pound annual growth rate (C A G R ) o f 4 0 percent, fi-om $ 2 0 billion in 2 0 0 7 to $ 1 0 7

billion by 2 0 1 3 . India’s overall retail sector is expected to rise to $ 8 3 3 billion by 2 0 1 3

and to $ 1 .3 trillion by 2 0 1 8 , at a C A G R o f 10 percent (Chowdhury, 2 0 0 9 ).

Chaudhuri and H olbrook ( 2 0 0 1 ) found that consum er trust based on the quality

perception facilitates attitudinal and behavioral loyalty. When the relationship between

brand nam e and product quality is learned prior to the relationship between product

attributes and quality, consum ers are m ore likely to be influenced by the perceived

quality. The theoretical explanation o f perceived service quality has developed fi-om the

concepts o f product quality and consum er satisfaction. W hile the latter tw o are norm ally

treated as a fiinction o f price and value for m oney, perceived service quality is seen as

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being an expression o f the extent to which custom ers’ needs and expectations are met

(T in g, 2 0 0 4 ).

Figure 2.2 Summarized Model of Retailer Brand Equity

Chowdhury, 2009

T he concept o f brand equity as conceptualized by A ak er (1 9 9 1 ) are the five dimensions

o f the brand; Brand A w areness, Brand Im age A ssociations, Differentiating Strengths

between com peting brands, Brand Loyalty & Switching Likelihood, Confidence and

Brand N am e Latitude which is a again a function o f the extendibility o f the brand in the

current and proposed product categories. H ow ever, no clear description about the

dimensions o f retailer brand equity exists in literature. Retail brand equity can also be

construed as the am ount o f confidence that a consum er exhibits in a brand, which

ultimately transform s in the consum ers’ willingness to pay a premium for the brand. This

premium not only m ay be reflected in term s o f financial considerations but also other

factors such as distance traveled, brand or size preferences com prom ised, o r services

foregone.

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 ^ 1

Retail Retail
Awareness Association

Retail
Perceived Retail
Quality Loyalty

Figure 2.3 Retail Brand Equity Model

Ailawadi & Keller, 2004

2 .4 .1 D im ensions o f R e ta ile r/B ra n d E q u ity

2 .4 .1 .1 R e ta ile r/B ra n d A w a re n e ss

Retailer aw areness is defined as the consum er’s ability to recognize or recall a retailer

when s/he is exposed to the relevant retailer category (Pappu & Quester, 2 0 0 6 a , 2 0 0 6 b ),

and also it is m irroring A ak er’ s (1 9 9 1 , p. 6 1 ) definition o f brand aw areness as "the ability

o f a potential buyer to recognize or recall that a brand is a m em ber o f a certain product

categ ory ". Strong retailer aw areness increases the probability that a retail brand will be

included in the consideration set, which simplifies the consum er’s retail brand choice,

making it a habit to choose the retail brand (H auser & W em erfelt, 1 9 9 0 ). H ence, to the

degree that consum ers are aw are o f retail brand, retailer loyalty will increase. A ccording

to (Pappu & Q uester, 2006b) High custom er satisfaction and high custom er

dissatisfaction can all increase retailer aw areness.

Brand awareness can be broadly defined as: A m easure o f m arketing effectiveness

m easured by the ability o f a custom er to recognize and/or recall a nam e, image o r other

m ark associated with a particular brand (Chowdhury, 2 0 0 9 ).

V ery little work has been done to determine the effects o f brand aw areness on consum er

ch oice. A consum er m ay choose a brand for the first tim e based on simple heuristics

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(aw areness, packaging e tc.) before evaluating a brand during subsequent purchases. In

such cases, aw areness becom es a very important factor and is directly correlated to the

exposure to advertisem ent and other sources o f information (Chowdhury, 2 0 0 9 ).

A rnett et al. have adapted m easures for their ‘aw areness’ dimension from Y o o et al.

(2 0 0 0 ). A ssociations: W hile (Y o o & Donthu, 2 0 0 1 ) considered ‘associations’ and

‘ aw areness’ as a com bined dimension, A rnett et al. (2 0 0 3 ) treated ‘product quality’ and

‘perceived valu e’ as tw o sub-dimensions o f their ‘associations’ dimension. H ow ever,

neither Y o o and Donthu (2 0 0 1 ) nor Arnett et al. (2 0 0 3 ) have used discrim inant indicators

for m easuring the ‘associations’ dimension.

2.4.1.2 Retailer/Brand Perceived Quality

R etailer perceived quality is defined as consum er’s judgm ent about a retailer’s overall

excellen ce o r superiority on the perception o f goods and services (A aker & Jacobson,

1 9 9 4 ; Pappu & Quester, 2 0 0 6 a ). This definition adapted from Zeitham l’s (1 9 8 8 , p. 3 )

definition o f perceived quality em phasizes consum er perceptions over the actual or

objective quality o f the retailer. Perceived quality is believed to be a type o f association

w arranting elevation to the status o f a separate dimension o f a retailer’ s (o r brand’ s)

equity (see A aker, 1 9 9 1 ). E xcellen t perceived quality m eans that, through the long-term

experience related to the brand, consum ers recognize the differentiation and superiority

o f the brand (Y o o et al., 2 0 0 0 ) High retailer perceived quality would drive a consum er to

choose the retailer rather than other com peting retailers, which induces the tendency to be

loyal to a retailer, as demonstrated by the intention to purchase from the retailer as a

prim ary ch oice. Therefore, to the extent that retailer quality is perceived by consum ers,

retailer loyalty will increase.

Sethuraman and C ole ( 1 9 9 7 ) found that perceived quality explains a considerable portion

o f the variance in the price premium consum ers are willing to pay for national brands.

The perceived quality o f products and services o f strong brands add value to consumers'

purchase evaluations. Perceived quality is an attribute o f Brand A ssociation elevated to

the status o f a separate brand equity dimension (A aker, 1 9 9 1 ). R etailer perceived quality

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is not the actual quality o f the retailer but the consum er’s subjective evaluation o f the

retailer (Pappu & Q uester, 2 0 0 6 a , p. 3 2 0 ).

Unlike Arnett et al. (2 0 0 3 ) who argued that ‘service quality’ w as a dimension o f retailer

equity, Y o o and Donthu (2 0 0 1 ), in line with several other brand equity researchers (e.g .,

A aker, 1 9 9 1 ), consider ‘perceived quality’ as a dimension o f the multi-dimensional brand

equity construct.

P ro d u c t / C onsum er
A s s o rtm e n t Q u a lity Satisfaction

u tility from purchase-

Price convenience

Value for m oney Needs & Expectations

Retail Store - Service
Loyalty

Figure 2.4 Factor Affecting Perceived Quality

Chowdhury, 2009

The theoretical explanation o f perceived service quality has developed from the concepts

o f product quality and consum er satisfaction. W hile the latter two are norm ally treated as

a function o f price and value for m oney, perceived service quality is seen as being an

expression o f the extent to w hich custom ers’ needs and expectations are m et (Ting,

2 0 0 4 ).

2.4.1.3 Retailer/Brand Loyalty

L oyalty has been defined similarly in both m easurem ent approaches. F o r exam ple, Y o o

and Donthu (2 0 0 1 , p. 3 ) defined ‘brand loyalty’ as "the tendency to be loyal to a focal

brand, w hich is demonstrated by the intention to buy the brand as a prim ary ch o ice".

A rnett et al. (2 0 0 3 , p. 1 6 3 ) defined ‘store loyalty’, consistent with O liver (1 9 9 7 , p. 3 9 2 ),

as "a deeply held com m itm ent to re-buy or re-patronize a preferred product o r service

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consistently in the future". This definition w as similar to the definition o f ‘ brand loyalty’

adopted in the marketing literature. That is, the concept o f ‘brand loyalty’ has simply

been extended to ‘store loyalty’ (Cunningham , 1 9 6 1 ; K oo, 2 0 0 3 ).

Brand loyalty provides retailers with trem endous com petitive w eapons. Brand loyal

consum ers are less price sensitive (Krishnamurthi & R aj, 1 9 9 1 ). Loyalty reduces the

sensitivity o f consum ers to m arketplace offerings, which gives the firm tim e to respond to

com petitive m oves (A aker, 1 9 9 1 ). In general, brand loyalty is a reflection o f brand

equity, which for m any businesses is the largest single asset. F o r retailers, who sell many

brands, the concept o f brand loyalty m ay apply specifically to the store’s brand (private

label) if there is one; but, it can also be generalized to store loyalty. R etailers with high

store loyalty thus enjoy com petitive advantages, including less price sensitivity and a

strong advantage relative to suppliers (Chow dhury, 2 0 0 9 ).

R etailer loyalty is also conceptualized as one o f the dimensions o f retailer equity. L oyalty

has been defined both behaviorally (e .g ., B loem er & Odekerken-Schroder, 2 0 0 2 ; Oliver,

1 9 9 7 ; Tranberg & Hansen, 1 9 8 6 ) and attitudinally (e .g ., Chaudhuri & Holbrook, 2 0 0 1 ;

Y a n g & Peterson, 2 0 0 4 ; Y o o & Donthu, 2 0 0 1 ). Both conceptualizations o f loyalty have

attracted criticism and som e researchers have argued that loyalty should be measured as a

com bination o f both behavioral and attitudinal m easures (e.g .. D ay, 1 9 6 9 ; D ick & B asu,

1 9 9 4 ). Given that retailer equity has been conceptualized in the present research based on

consum er perceptions, researcher defines retailer loyalty as "the tendency to be loyal to a

retailer, as dem onstrated by the intention to purchase from the retailer as a prim ary

ch o ice". This definition w as adapted fi-om Y o o and Donthu (2 0 0 1 , p. 3 ), and is akin to

w hat Javalgi and M oberg ( 1 9 9 7 ) called "latent" loyalty.

The them e o f loyalty has becom e important in low growth m arkets given that the

custom er relationship becom es m ore profitable over tim e (Reichheld & Sasser, 1 9 9 0 ). In

the literature, loyalty is view ed and defined from tw o perspectives: behavioral and

attitudinal (D ick & B asu , 1 9 9 4 ). Behavioral indicators represent the external results o f a

dynam ic, internal process (O liver, 1 9 9 7 ). On the contrary, attitudinal loyalty, being

strongly influenced by situational variables, is focused on the consum er’ s internal

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attachm ent to a it is defined and what kind o f relationships exist in the findings o f studies

on store im age brand and is a possible indicator o f the affective com ponent o f attitude

(Chow dhury, 2 0 0 9 ).

Clottey et al., (2 0 0 8 ) show s that the main drivers o f C ustom er Loyalty in a retail store

environm ent are Product Quality, Service Quality and the levels o f Brand Image

associated with the retailer. If product (brand) loyalty is the loyalty demonstrated by

custom ers to a certain product brand, then store (retail brand) loyalty is linked to the

cu stom er’s ch oice o f store (D oyle & Fenw ick, 1974).

L oyalty reduces the sensitivity o f consum ers to m arketplace offerings, w hich gives the

firm tim e to respond to com petitive m oves (A aker, 1 9 9 1 ). In general, brand loyalty is a

reflection o f brand equity, which for m any businesses is the largest single asset. F o r

retailers, w ho sell m any brands, the con cept o f brand loyalty m ay apply specifically to the

store’ s brand (private label) i f there is one; but, it can also be generalized to store loyalty.

Retailers with high store loyalty thus enjoy com petitive advantages, including less price

sensitivity and a strong advantage relative to suppliers. Despite the im portance o f brand

loyalty, m any small business m anagers m ay give it insufficient consideration because the

typical m easures o f loyalty are expensive, cum bersom e, and difficult to com m unicate or

understand.

Increase in custom er’ s perception about the product quality, service quality and a good

brand im age leads to a significant m ovem ent o f higher custom er loyalty tow ards the

store. H ow ever o f the three main drivers in this retail environm ent, a custom er‘ s

perception o f a good brand im age has m ore o f a positive effect on their loyalty tow ards

the retailer than their perceptions o f product o r service quality alone.

2.4.1.4 Retailer/Brand Association

Brand association "consists o f all brand-related thoughts, feelings, perceptions, images,

experiences, beliefs, attitudes," (K otler and K eller, 2 0 0 6 , p. 1 8 8 ) and "is anything linked

in m em ory to a brand" (A aker, 1 9 9 1 , p. 1 0 9 ). A ccording to K eller, "perceptions about a

brand as reflected by the Brand A ssociations held in consum er m em ory" constitute Brand

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Im age. These associations include perceptions o f brand quality and attitudes toward the

brand. Sim ilarly, A aker ( 1 9 9 1 ) proposes that brand associations are anything linked in

m em ory to a brand. Brand association m ostly relates to the intangible aspects o f the

product and arises from multiple internal and external evaluations that a consum er m akes

about the product. Favorable associations thus can lead to the formation o f positive brand

image about the product. Retailers create their brand in different w ays e.g ., by attaching

unique associations to the quality o f their service, their product assortm ent and

m erchandising, pricing and credit policy, etc. (Ailaw adi & K eller, 2 0 0 4 ).

Retailer associations are defined as anything linked to the m em ory o f a retailer (Pappu &

Q uester, 2 0 0 6 a , 2 0 0 6 b ), R etailer associations, sim ilar with brand associations, are

"com plicated and connected to one other, and consist o f multiple ideas, episodes,

instances and facts that establish a solid network o f retail brand knowledge" (Y o o et al.,

2 0 0 0 ). The associations are stronger when they are based on many experiences or

exposures to com m unications, rather than a few (A aker, 1 9 9 1 ; A lba & Hutchinson,

1 9 8 7 ). R etailer associations are attributes and benefits linked to the nam e o f the retailer,

in the consum er’s mind (K eller, 19 9 3 ).

Creation Value fo r Consumers

Figure 2.5 Value Creation for Customers from Brand Associations

Chowdhury, 2009

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2.4.2 Customer-Based Retailer/Brand Equity in Indian Context

R esearch has suggested that the perception o f value is a basic com ponent o f intention to

purchase action, mediated by the price o f the service. Perceived Quality o f Indian

Retailers Som e o f the current retailing form ats that exist in India are street carts,

pavem ent shops, K iranas stores (m om and pop stores), public distribution system , Mandi

(w holesale m arket) H aat (w eekly m arket) etc. M ost o f these form ats are unique to India

and have been in existence for a long tim e. M ost o f these formats have been associated

with "value for m oney" and "low p rices". H ow ever, the quality perception for m ost o f

these retailers has remained low. With the changing consum ption patterns how ever,

consum ers need for convenience, ch oice and value for m oney, the set-up o f retail format

is changing (Chow dhury, 2 0 0 9 ).

W ith changing lifestyle there is grow ing scarcity o f tim e, and convenience in food

shopping is em erging as an important driver o f growth o f one-stop retail form ats that can

offer consum er 'value for tim e' (convenience) in addition to 'value for m oney'. The new

retail form ats in India have a huge opportunity to create a good quality perception by

addressing the convenience factors o f the Indian consum ers (Chowdhury, 2 0 0 9 ).

Buoyed by this strong growth potential, India has b ecom e a hotbed o f investment in the

retail sector. This has seen a significant increase in the com petition as m ore and m ore

national and international players are embarking upon plans to enter the Indian retail

market. Retailers have m ore am bitious expansion plans than they did ju st a few years

ago. M ost retailers plan to expand by increasing store outlets and augmenting product

ranges/ services. (Chow dhury, 2 0 0 9 ).

R etailers w ho are looking to the w orld’ s em erging m arkets to drive the success o f their

businesses in the future identify India as the m ost sought-after m arket. India is

particularly considered attractive because o f the size o f its m arket and the low presence o f

international retailers (C how dhury, 2 0 0 9 ).

W ith foreign ownership rules being gradually relaxed, foreign investment is also now

possible, allow ing single-brand retailers to own up to 51 % o f their India operations. In

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the past couple o f years alone, numerous retailers, including the S PA R Group, Carrefour,

M arks & Spencer and N autica have either already entered the Indian nnarket or have

unveiled significant plans to do so. Earlier entrants also, including W al-M art and

M E T R O , already have plans for a blitz across the country. W al-M art in particular plans

to expand rapidly across northern India (Chow dhury, 2 0 0 9 ).

H ow ever, along with this increasing investment scenario and com petition, India is

currently facing the world's m ost dynam ic com bination o f highly informed and

demanding consum ers on one hand and o f rapidly increasing consumption levels across

various retail product categories and geographies on the other. G row ing consum er

demands and the consequent response o f leading businesses have created a m ore com plex

and com petitive m arketplace - one that requires each firm to be m ore adaptive to

custom er needs and m ore aggressive at exploiting their unique capabilities to m eet those

needs. In the con text o f Indian consum er products and retail compzinies, this spells

multiple challenges and opportunities (Chowdhury, 2 0 0 9 ).

A ccord in g to Chowdhury ( 2 0 0 9 ) som e o f the m ajor challenges currently faced by Indian

retailers are:

a) L a c k o f in fra s tru c tu re an d logistics: The absence o f a strong infim tructure and

logistics m eans that reaching consum ers and transporting goods is difficult.

b) Sup p ly ch ain b o ttlen eck s: Adoption o f technology for efficient m ovem ent o f

products and a closer interaction o f suppliers and buyers.

c) R e ta ile rs b a rg a in in g p o w e r: Ability o f retailers to com m and better m argins

from m anufacturers would heavily depend on their ability to attract consum ers

and sell products.

d) A v ailab ility a n d high c o s t o f r e a l e sta te : The unavailability o f quality retail

space and increasing real estate costs pose a continuous challenge for retailers in

their ability to break even.

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 e) In a d e q u a te av ailab ility o f skilled la b o r: The demand for skilled resources for

the retail players is not being met by the readily available supply o f talent.

f) F r a u d in re ta il; Frauds and theft pose a significant threat to the retailers as that

m ay lead to higher prices that have to be paid by the consum er.

It has been observed that Retail m arkets worldwide go through four stages as they evolve

from an em erging to a mature market usually over the course o f 5 to 10 years. These

stages are defined as: Opening: A market that is just beginning its m odem retail story, in

all m ajor cities. Peaking: A market that is developing quickly and is ready for m odem

retail. D eclining: A m arket that is still big and grow ing, but space for new entrants is

getting tighter. C losing: A market having small window o f opportunity for new entrants;

such m arkets generally have a very high penetration o f m odem retail. (Chowdhury,

2 0 0 9 ).

Opening i Peaking Declining I Closing

JLL.
rR u ssia (906)
' China (2003)-| I ' Ukraine (2006)
High priority I r India (2007)
' Vietnam (2006)- I
- (^ina (2006)
Saudi Arabia (20071
-India (2D06) "0 -^ sa a (2 « m
Hungary
- Russia I20MI (20®^
India (2003)

Uto3iti«(2007)
1^ Bulgaria (2D06)
GRDI
ran k in g

Low priority

Monitor markets and Identify local partners and real estate Increase maricet entries Determine leadership status
Action conduct consumer research locations: establish pilot stores and the to capture maricet share (profitability) in the segment
supply chain

Consider minority Consider supermarkets, hypermarkets, Consider discount, Move to wave-two formats,
Fonnat Investment in local retailer cash a carry and convenience stores warehouse stores and including EEO, DIY and
of entry apparel specialized apparel*

Labor identify skilled labor pool Hire and train local talent and balance Change balance from No pattern identified
strategy for market the expatriate mix expatriate to local staff

Figure 2.6 Window of Opportunity for Retail Entry Markets

AT Kearney report 2008, Based on GRDI ranking from 1995-2006

Page 114 of 325

Figure 2 .8 shows significant in term s o f analyzing the phase in which the Indian retail

industry is currently present. A ccording to the figure, Indian retail is currently in the

second phase o f growth which is basically the peaking phase and shows tremendous

growth opportunities, there are lot o f activities that the retailers have to perform during

this stage not only in order to sustain them selves but also engage the custom er into repeat

buying behavior (Chow dhury, 2 0 0 9 ).

Figure 2 .9 shows the im portance o f creating aw areness to bring the brand under the

consideration set o f Indian consum ers. This implies that as markets develop cam paigns

about shop features and im agery will becom e m ore important to consum ers. Therefore, in

developing econom ies as m arkets m ature, those retailers who work to develop a clear

brand positioning will have an advantage and creation o f brand awareness in this respect

would play a strong role in differentiating retailers (Chow dhury, 2 0 0 9 ):

D rtvrm o f Star* E q u ity b y Market Typm

C a n si4 «rst> «n

Lo c«t»o n L «c sc i0n

CvaryttMng I ( x p « c t

M o r « than I Exp*ct

Va*u» tof M>or»«v

Sti»ppin9
0% S% VJr% 15% 20% 2S% 30% 3S%

Figure 2.7 Drivers of Store Equity by Market Type

AC Nielsen Insight - Asia Pacific, 2003

A s the Indian retail m arket has grown over the past few years, it has witnessed the entry

o f m any players. This has also led to the introduction o f many form ats like hypermarkets,

cash & carry, departmental stores and other shopping convenience that are closer to the

consum er. Som e o f the m ajor retail players in India such as the RPG group have presence

in m ost o f these different retail form ats. W hile the R PG Group led Spencer’s retail

operate each o f these form ats under the sam e brand nam e, the Future Group operates

Page 115 of 325

different formats under different brand names. As has been mentioned earlier the
associations that the consumers have in their minds vary depending upon the "use-
context", it is likely that consumers respond to the different format of retail stores in
different ways. Hence, the associations that they create with retailers would consequently
vary across different formats (Chowdhury, 2009).

Some of the current retailing formats that exist in India are street carts, pavement shops,
Kiranas stores (mom and pop stores), public distribution system, Mandi (wholesale
market), Haat (weekly market) etc. Most of these formats are unique to India and have
been in existence for a long time. Most of these formats have been associated with "value
for money" and "low prices". However, the quality perception for most of these retailers
has remained low (Chowdhury, 2009).

With the changing consumption patterns however, consumers need for convenience,
choice and value for money, the set-up of retail format is changing. With changing
lifestyle there is growing scarcity of time, and convenience in food shopping is emerging
as an important driver of growth of one-stop retail formats that can offer consumer 'value
for time' (convenience) in addition to 'value for money'. New retail formats in India have
a huge opportunity to create a good quality perception by addressing the convenience
factors of the Indian consumers (Chowdhury, 2009).

As competition increases in the Indian retail sector, with a number of stores selling the
same products within a common catchment, retaining the loyalty of the customer
becomes crucial, both in terms of strength of relationship (which is reflected in how
much of the total spend the customer spends at the specific store) as well as the duration
of the relationship. In markets such as India, one can see as many as four or five mini­
supermarkets coming up on barely a kilometer along a busy street. A store must therefore
ensure a continued loyal customer base from a certain share of that catchment. Studies
suggest that customers with higher income tend to be more "loyal" than customers with
lower income. Since Indian retail chain stores tend to be targeted towards high-income
customers when compared to the traditional Kiranawala, they may benefit from an
intrinsically more loyal base of customers (Chowdhury, 2009).

Page 116 of 325

2.5 Buying Intention
A customer's perceptions of a store's image may affect customer buying intentions,
loyalty and satisfaction (Reynolds et al. 1974/1975). Therefore, retailers have tried to
develop a positive store image rather than relying only on promoting tangible products to
position their offerings in the minds of consumers (Ries and Trout 1986). Fishbein and
Ajzen (1975) define buying intention as "a special case of beliefs in which the object is
always the person himself and the attribute is always a behavior" (p. 12).

Sung and Yang (2008) reviewed the academic literature and found several studies
showing that image is important to attract potential publics, enhance buying intentions
and satisfaction, develops loyalty and increase sales.

Buying intentions are personal action tendencies relating to the product/brand (Bagozzi,
1979; Ostrom, 1969). "Buying intentions represent the person’s motivation in the sense
of his/her conscious plan to exert effort to carry out a behavior" (Eagly and Chaiken
1993). Thus, a concise definition of buying intentions may be as an individual’s
conscious plan to make an effort to buy a product /brand or buy from a store.

2.6 Summary

Building strong brands has become one of the main marketing priorities for brand-
supportive companies. While the role of branding for physical goods has received
considerable attention by managers and researchers, the extent to which brands can affect
retailers, in this case the Indian retailers is less understood. Also most branding theories
are built in the context of developed countries, especially in the area of the retailing
perspective of brand equity, with studies being conducted in Austria (Baldauf et al.,
2003), the United States of America (D. F. Davis, 2003) and New Zealand (Glynn 2004).

There seems to be a lack of evidence from emerging economies, in particular from

transitional economies such as India. However, no clear description about the dimensions
of retailer brand equity exists in literature. Although many important branding principles
apply, retailer brands are sufficiently different from product brands and thus the actual
application of the branding principles can vary. Retailer brands are typically more multi-

Page 117 of 325

sensory in nature than product brands and can rely on rich consumer experiences to
impact their equity. Retailers also create their brand images in different ways, e.g., by
attaching unique associations to the quality of their service, their product assortment and
merchandising, pricing and credit policy, etc. (Ailawadi & Keller, 2004).

Some retail brands position themselves as high quality and high customer service
providers whereas others accentuate more of a self-service and discount orientation
(Grace & O’Cass, 2005). David Jones would be an example of the former and K-Mart
and Target would be examples of the latter in the Australian market place (Merrilees &
Miller, 1996). That is, consumers’ quality perceptions vary by brand name in a given
store category.

Other Limitations in this area: Previous research in this area does not clarify whether
‘awareness’ and ‘associations’ is distinct dimension of retailer equity. In their scale
development, Yoo and Donthu (2001) observed only three dimensions for the consumer-
based brand equity construct, where ‘brand awareness’ and ‘brand associations’ were
combined. This is despite the fact that brand awareness and brand associations are
conceptually different (see Aaker, 1991). In light of this, Yoo and Donthu (2001)
themselves recommended further examination of the consumer-based brand equity
structure. Other researchers (e.g., Washburn & Plank, 2002) who evaluated Yoo and
Donthu (2001) consumer-based brand equity scale also made similar recommendations.

For their part, Arnett et al. (2003) considered ‘awareness’ and ‘associations’ as distinct
dimensions of retailer equity. Recent findings also suggest that ‘brand awareness’ and
‘brand associations’ are distinct brand equity dimensions (e.g., Pappu et al., 2005).
Hence, when consumer-based brand equity measurement is extended to retailer equity
measurement, it is important for marketers to examine whether ‘awareness’ and
‘associations’ are distinct dimensions of retailer equity. The extant research also fails to
clarify whether ‘perceived quality’ is a distinct dimension of retailer equity.

Arnett et al. (2003) method does not include perceived quality as a distinct dimension of
retailer equity. In fact, Arnett et al. consider ‘product quality’ as a sub-dimension of
retailer associations, and their measures for ‘product quality’ are similar to those of Yoo

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and Donthu (2001) ‘perceived quality’. On the other hand, a large stream of marketing
researcher, similar to Yoo and Donthu (2001), has considered ‘perceived quality’ as a
dimension of brand equity. For example, Aaker (1996, p. 17) argued that perceived
quality is a brand association which should be elevated to the status of a separate
dimension of brand equity. Hence, it is important for marketers to understand whether
perceived quality is a distinct dimension of retailer equity.

Current measurement methods do not include discriminating indicators for the ‘retailer
associations’ construct. Brand associations are supposed to be derived from its attributes,
benefits and attitudes, and a brand image comprises a set of brand associations organized
in a meaningful way (Keller, 1993), Consequently, the measures for the brand
associations construct should include some of the measures used for measuring brand
image. This approach has been adopted by some researchers for the measurement of
brand equity (e.g., Cobb-Walgren et al., 1995; Pappu et al., 2005). Extending this logic to
retailers, the measures for ‘retailer associations’ should include some of the measures
used for measuring ‘retailer image’.

Measures such as ‘some of the characteristics of the brand come to the mind quickly,
indorsed for measuring brand associations (e.g., Yoo & Donthu, 2001) do not, however,
exactly capture consumers’ associations towards a brand. Hence, by failing to capture
discriminant indicators for measuring brand associations, Yoo and Donthu (2001) method
is inherently limited in its capacity to capture retailer equity. Arnett et al. (2003) retailer
equity measurement also did not include any of the retailer image measures when
measuring retailer associations. In fact, the measures for ‘retailer associations’ used by
Arnett et al. were adapted from Dodds, Monroe, and Grewal (1991), and were similar to
the measures suggested by Aaker (1991) for perceived quality. Thus, there is scope for
improving existing retailer equity measurements by clarifying the measures for ‘retailer
associations’.

Brand equity is regarded as a very important concept in business practice as well as in

academic research because marketers can gain competitive advantage through successful
brands. The competitive advantage of firms that have brands with high equity includes

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the opportunity for successful extensions, resilience against competitors’ promotional
pressures, and creation of barriers to competitive entry (Farquhar, 1989). The
measurement of retailer equity may aid in the evaluation of the store image of a retailer as
a brand.

Marketers can found retail brands as service brands on a larger set of associations to build
their positioning. That enables them to better differentiate and define a unique position in
consumers’ mind. That also entails a stronger level of memorization because of the
higher number of associations compared to private labels. Finally, results show that no
negative feedback effect exists on the retailer’s image when consumers are dissatisfied by
a retail brand.

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