CASE CHAPTER 17: THE RESEARCH REPORT

THE JUPITER CONSUMER ELECTRONICS CHAIN

The MBA programme of a small Business School in the United States has always welcomed
diversity in its student body and staff. Students from different countries come together in a
multicultural classroom where they can share their ambitions for a career in international
business. The Business School firmly believes that a combination of an international student
body and an international teaching staff creates an interesting and enriching learning
environment where students learn from the viewpoints of their fellow students coming from
different countries. Daisy (a student from Brasil), Mario (from Italy), Benjamin (from
Germany), and Yoshi (from Japan) have just undertaken a research project for their
Business Research Methods course. They have worked hard throughout the entire semester
and they are happy to have finished their research report. This report communicates the
results of their study on the effect of salesperson behavior on customer satisfaction with a
retailer. Before handing over their report over to Brian Ruiz - the initiator of the project and
General Manager of the Jupiter Consumer Electronics chain – and Cedric Staples – their
Business Research Methods professor - they have asked you to read and evaluate their
report. You have agreed to their request and that is why you have just received the research
report from Yoshi.

Hi,
Here is our report. Hope you like it! Thanks again for your help and for being such a
good friend:-)
xY
Chapter 1 Introduction

1.1 Motive for our research

When making complex buying decisions consumers use a wide range of criteria for
evaluating products and services. The most important criteria are product or service
attributes such as price, quality, durability, and after-sales support and derived benefits from
these attributes such as safety, reliability, and performance. However, sometimes
consumers are also influenced by criteria or factors that are not directly related to the
product and/or service such as for instance salesperson behavior. If you have ever bought a
car, a new television, or a mobile phone you have probably experienced how salespeople
are sometimes only focused on selling the product instead of on your specific needs, wants,
and feelings as a consumer. In this study, we are interested in how the orientation (selling
orientation versus customer orientation) of a salesperson influences customer satisfaction
with a retailer.

The Jupiter Consumer Electronics Chain is a big-box store and retailer of software,
consumer electronics, computer hardware, with in store computer repair and custom
computer building services and household appliances with a chain of superstores
headquartered in Silicon Valley. Starting with one store located in Berkeley, California, by
2010 the chain posted sales of $12.1 billion and operated 42 stores in 12 states.

Brian Ruiz, General Manager of the chain is convinced that a strong sales team can have a
powerful and positive effect on the sales and market share of the company. Indeed, the Goff
et al (1997) paper suggests that an improvement of a salesperson’s customer orientation (for
instance by training) can add value to a company’s perception and performance. For this
reason Jupiter may benefit from exerting more control over its sales force.

1.2 Objectives of our research

In this study, the behavior of salespeople and the influence of this behavior on satisfaction
with the retailer will be examined. We will investigate the effect of salespersons’ selling and
customer orientation on satisfaction with the salesperson and satisfaction with the retailer.

1.3 Problem definition and research questions

1.3.1 Problem definition

“ How does the behavior of a salesperson influence customer satisfaction with the retailer?”

1.3.2 Research questions

- Does salesperson behavior influence customer satisfaction with retailer?

- What is salesperson customer orientation?
- What is salesperson-selling orientation?
- What is satisfaction with a salesperson?
- What is satisfaction with the retailer?

1.4 Structure of the report

Chapter 2 will describe the SOCO-model. What’s more, hypotheses will be formulated in this
chapter. In chapter 3 we will describe the research design, discuss the method and
procedure, sampling, and the operationalization of the variables in our model. Chapter 4 will
contain the results of the study combined with an in-depth analysis of the data. Finally, in
chapter 5 we will present the conclusions and provide recommendations to the Jupiter
Consumer Electronics chain.

Chapter 2 Theory

This chapter deals with the theory we used with regard to our research project. The
dependent variable – the variable of primary interest in our study - is customer satisfaction
with the retailer. We based the conceptual model of our study on the model of Goff, Boles,
Bellenger and Stojack (1997). The variables of our conceptual model will be introduced and
defined in this chapter. What’s more, we will try to explain how and why the variables in our
conceptual model are related to each other. This chapter will conclude with hypotheses
relevant to our study.

2.1 Research objective

Our research objective is: “How do salesperson customer orientation and salesperson
selling orientation influence customer satisfaction with the retailer and is this relationship
mediated by satisfaction with the salesperson.”
Definition of satisfaction (Swan and Oliver, 1989, p. 518): “Satisfaction is an affective or
emotional response to a specific consumption experience, with increasing satisfaction
reflecting more positive affect and dissatisfaction reflecting greater negative affect.”

2.1.1 Westbrook (1981)

Product performance is an important determinant of overall customer satisfaction, but
according to Westbrook (1981) it is certainly not the only one. For example, Westbrook
indicates that retail salespeople may also influence overall customer satisfaction with the
purchase. Thus, the importance of salesperson behaviour as an antecedent of overall
customer satisfaction should not be underestimated.

2.1.2 Goff, Boles, Bellenger and Stojack (1997)

Goff et al. (1997) introduce the concept of SOCO to understand customer satisfaction with
the retailer. SOCO stands for “salesperson Selling Orientation-Customer Orientation.” SOCO
affects customer satisfaction with the salesperson and the retailer (Goff et al., 1997).
Proposed is, that salesperson customer orientation will have a positive influence on both
customer satisfaction with the salesperson and the retailer. On the opposite, when a
salesperson acts selling oriented, this will have a negative effect on both customer
satisfaction with the salesperson and the retailer.

2.2 Theoretical framework

In this section, the theoretical framework will be depicted and the variables that are included
in this theoretical framework will be explained. Below, in figure 1, you can see the theoretical
framework that will be used in this study.

Figure 2.1 Proposed Effects of Salesperson SOCO on Customer Satisfaction

Salesperso +
n Customer
Orientation +

Satisfactio Satisfactio _
n with n with
-
Salesperso Retailer
n

-
Salesperso
n Selling
Orientation
2.3 Explanation of the variables in our model

Salesperson Customer Orientation: The salesperson shows interest in the needs and
demands of the customer and tries to provide as much information as he can.

Salesperson Selling Orientation: The salesperson shows no or little interest in the needs of
the customer.

Satisfaction with Salesperson: Influences the overall customer satisfaction with a purchase
(Westbrook, 1981). Therefore, satisfaction with the behavior of a salesperson is very
important.

Satisfaction with Retailer: In most cases influenced by salesperson behavior, because for
the customer salespersons are an important factor in their decision making process.

2.4 Relationship between constructs

This research examines the effect of salesperson behaviour on customer satisfaction in a
consumer electronics setting. This research aims to prove that a salesperson selling
orientation and customer orientation will affect both the customer satisfaction with the
salesperson as well as satisfaction with a retailer of electronic appliances (Jupiter). Goff et al
(1997) suggest that a salesperson's actions can influence customer satisfaction with the
salesperson as well as the retailer. More specifically, they argue that a selling orientation will
have a negative effect on satisfaction with the salesperson and satisfaction with the retailer.
On the other hand, a customer oriented approach will have a positive effect on satisfaction
with the salesperson and satisfaction with the retailer. Hence, we are able to develop the
following hypotheses:

2.5 Hypotheses
In this research, we would like to solve the central problem by the means of several
hypotheses. In a following chapter, these hypotheses will be tested on their validity through
statistical testing.

Hypothesis 1: When a salesperson uses a customer orientated sales approach, it will lead to
increased customer satisfaction with the salesperson.
Hypothesis 2: When a salesperson uses a selling orientated sales approach, it will lead to
decreased customer satisfaction with the salesperson.
Hypothesis 3: When a salesperson uses a customer orientated sales approach, it will lead to
increased customer satisfaction with the retailer.
Hypothesis 4: When a salesperson uses a selling orientated sales approach, it will lead to
decreased customer satisfaction with the retailer.
Hypothesis 5: Customer satisfaction with the salesperson will predict satisfaction with the
retailer. Higher satisfaction with the salesperson will lead to an increased satisfaction with
the retailer.

Chapter 3 Research design

In this chapter, we will explain how we set up our study. More specifically, we will pay
attention to the study setting, the procedure, the sampling technique we used, sample size,
and the operationalization of the variables in our study.

3.1 Research method and procedure

A field study was used to test the hypotheses we developed. Data were collected from the
stream of shoppers leaving Jupiter stores between the hours of 1 p.m. and 4 p.m., Monday
through Friday, over a three-week period in July 2011. A total of 253 consumers who left the
store with a plastic bag displaying the store’s logo were asked to participate in our study.
Respondents were asked to complete a personally administered questionnaire.

3.2 Sampling
We used convenience sampling for our study. In multivariate research, the sample size
should be preferably ten times as large as the number of variables in the study. Since our
model includes four variables, our minimum sample size is 40. A total of 50 consumers (31
women) agreed to participate in our study. The median age of the respondents was 51
years. The respondents were customers of one of the Jupiter stores, who had been in
contact with a salesperson of the store.

3.3 Operationalization of our variables

To gather the necessary data a questionnaire has been developed. This questionnaire can
be found in appendix 2. The measures were adapted from Goff et al (1997). Every variable
(salesperson customer orientation, salesperson selling orientation, satisfaction with
salesperson, and satisfaction with retailer) was measured with multi-item scales. All the
items are tested with 5-point Likert scales with end-points labelled “completely disagree” (1)
and “completely agree” (5). As can be seen in table 3.1, the measures were of adequate
reliability. All measured Cronbach’s alphas were larger than .70. Although the fact that item
15 and 16 were sometimes a bit confusing for the respondents, their Cronbach’s alpha is
larger than 0.70. This is why we decided to include these results as well in our model.

Table 3.1
Construct Example item Cronbach’s
Alpha
Customer orientation of salesperson The salesperson had my best .7798
(X1) interest in mind.
Selling orientation of salesperson (X2) The salesperson talked first and .8759
listened to my needs later.
Satisfaction with salesperson Overall, I am very satisfied with .8988
(Mediator) the salesperson
Satisfaction with retailer (Y) Overall, I am very satisfied with .8530
the retailer

At the end of the questionnaire two general questions are asked, i.e. the age (specific) and
gender of the respondent.

Chapter 4 Data analysis

In this chapter, we will analyze our data. In the first section, we will discuss the descriptive
statistics. Next, we will provide a correlation matrix which provides an overview of the
relationships between the variables in our conceptual model. Finally, we will test our
hypotheses.

4.1 Descriptive statistics

Table 5.1 offers a general picture of our data. The table shows the salespersons of the
Jupiter Consumer Electronics chain are very much oriented towards the consumer and less
towards closing the deal. Satisfaction with the salesperson is therefore reasonably high.
Also, the consumers are very satisfied with Jupiter.

Table 4.1
Variable Mean Lowest value Highest value
Customer orientation 4.01 2 5
Selling orientation 2.12 2 3
Satisfaction with salesperson 3.91 2 5
Satisfaction with retailer 4.23 3 5
4.2 Correlation
In order to test whether there is a relationship between our variables we produced a
correlation matrix, which is shown in table 5.2.

Table 4.2
X1 X2 Med Y
X1 1
X2 -0,70404 1
Med 0,659873 -0,62865 1
Y 0,425174 -0,46076 0,60162 1

Table 5.2 shows that there is a strong correlation between all the variables. Selling
orientation and customer orientation are negatively correlated, selling orientation is
negatively correlated with the mediator and the dependent variable, customer orientation is
positively correlated with these variables, and satisfaction with the salesperson and
satisfaction with the retailer are positively correlated.

4.3 Testing our hypotheses

In chapter 3 we stated the hypotheses of our model. In this section we will carry out the
statistical analysis of these hypotheses. All tests performed are with a reliability of 95%.

Table 5.3 provides the standardized estimates of the regression coefficients (the beta’s)
together with their respective significance levels and the adjusted R 2 values of the models. A
more complete overview of the statistical analyses can be found in Appendix 3.

Table 4.3
Dependent variable Independent variable Std. Sig. Adj.
Beta R2
Model 1
Satisfaction with salesperson Customer orientation (X1) .431 .003 .467
Selling orientation (X2) -.325 .016
Model 2
Satisfaction with retailer Customer orientation (X1) .200 .136 .200
Selling orientation (X2) -.320 .042
Model 3
Satisfaction with retailer Customer orientation (X1) -.026 .442 .333
Selling orientation (X2) -.149 .191
Satisfaction with .525 .001
salesperson

The results show that a selling orientation has a negative effect on satisfaction with the
retailer. This effect is mediated by satisfaction with the salesperson. These results support
hypotheses 2, 4, and 5. Hypothesis 1 was also supported; a customer orientation has a
positive effect on satisfaction with the salesperson. However, no support was found for
hypothesis 3; a customer orientation does not affect satisfaction with the retailer.

4.4 Summary
The results show that customers are very satisfied with the shop and with the salespersons
of the shop. Salespersons are to a large extent focused on the consumer, and less on
closing the deal. This is desirable because a customer orientation has a positive effect on
satisfaction with the salesperson and a selling orientation has a negative effect on both
satisfaction with the salesperson as on satisfaction with the retailer.

F-tests showed that our model was to some extent useful in predicting satisfaction with the
retailer. We acknowledge however that the model can probably be improved in order to
better predict the level of satisfaction with the retailer.

Chapter 5 Conclusions and recommendations

In this chapter the conclusions of our research are presented. The conclusions are based on
a combination of our theory and the empirical research findings. This will be done in the first
section of this chapter. The second section will contain a discussion on the way the variables
can be interpreted. In the third and last section the recommendations to IT’s management
are given.

5.1 Conclusions
We based our model on the model of Goff et al. (1997). From our model we derived several
hypotheses. These hypotheses were tested through a field study. Fifty consumers who left
the consumer electronics store responded to our questionnaire. Hence, we were able to
judge in what way salesperson customer orientation and salesperson selling orientation
influence customer satisfaction with the salesperson and customer satisfaction with the
retailer.

The analyses of our data showed that salesperson customer orientation does not have a
significant direct influence on customer satisfaction with the retailer (hypotheses 3).
Therefore, we had to reject this hypothesis. However, salesperson customer orientation and
salesperson selling orientation do have significant effect on customer satisfaction with the
salesperson (hypotheses 1 and 2). We also found a significant, negative relationship
between the selling orientation of the salesperson and the level of satisfaction with the
retailer, this implies that we can accept hypothesis 4. Moreover, customer satisfaction with
the salesperson has a significant positive direct influence on customer satisfaction with the
retailer. We therefore conclude that salesperson selling orientation has an indirect influence
on customer satisfaction with the retailer through customer satisfaction with the salesperson.
Since we were not able to detect a positive direct relationship between salesperson
customer orientation and customer satisfaction with the retailer, we cannot conclude that
there is an indirect relationship between those two variables via the mediating variable.

5.2 Discussion
For us it is surprising that salesperson customer orientation does not have a direct significant
influence on customer satisfaction with the retailer. We strongly believed that such a direct
influence exists; first because of our own intuition (a salesperson does have a representative
function of the store), but also according to the findings of Goff et al. (1997).

An explanation for the difference between the Goff et al. (1997) paper and our research that
Goff et al. focus on car salesman whereas we focus on salespersons in a consumer
electronics store. Salespersons may play a more important role in the decision making
process of consumers when they buy a car in comparison to when they buy electronic
appliances such as an electronic toothbrush or a toaster.

5.3 Recommendations
When we take a look at the research results and the conclusions we have drawn in the
previous chapter, we come up with the following recommendations to the management of
retailers in consumer electronics retailers in general and the Jupiter Consumer Electronics
chain in particular.

This study provides some evidence that utilizing a customer orientated selling style for
electronics retail purchases is appreciated by buyers and may result in long-term rewards for
the salesperson. However, a customer orientated approach of the salesperson does not
have an indirect effect on the level of satisfaction with the retailer. On the other side, a
selling orientated approach of the salesperson does have an indirect negative effect on the
level of satisfaction with the retailer. Therefore reducing selling orientation of the salesperson
during retail sales training can add additional value to the electronics retailer’s product
offering and influence the customer’s perception of the retailer. It may also generate more
favorable word-of-mouth communication. This shows that the influence of the salesperson’s
customer orientation and selling orientation are not to be underestimated.
Further research can tackle the problem of the relatively low R 2 by including more significant
variables in the model. Another interesting opportunity for further research would be to
identify specific salesperson behavior that signals to the buyer whether the salesperson is
customer orientated or selling orientated. Hence, retailers in consumer electronics can
identify specific behavior that optimizes customer satisfaction. Salespersons can be trained
to behave in a certain way when they talk to consumers.

References

Goff, Boles, Bellenger and Stojack, Journal of Retailing, Volume 73(2), 1997, “The influence
of salesperson selling behaviors on customer satisfaction with products”.
Swan and Oliver, Journal of Retailing, Volume 73(2), 1989, “Postpurchase Communications
by Consumers”, p. 516-533.
Westbrook, Journal of Retailing, Volume 57 (Fall) 1981, “Sources of consumer satisfaction
with retail outlets” p. 68-85.
Internet: homepage Jupiter Electronics