Chapter 1

THE PROBLEM: ITS BACKGROUND

Introduction

The challenges for retailers is how to differentiate themselves in a very

competitive market and regain their focus on the customer. Retailers must create a more

pleasurable and highly satisfying experience that will meet the needs and demands of

today’s consumers. The answer lies in delivering a total retail experience that is embedded

throughout the retailer’s organization. In an increasingly competitive marketplace with

rising customer expectations, the traditional means of competitive differentiation are

challenged as never before. To respond, retailers need to evolve their focus to become

customer-centric in both strategy and execution. With an increased priority being placed in

the consumer’s perspective, the role of the retail store becomes critical as a means of

delivering a differentiated, highly satisfying shopping experience.

The global fashion retail industry has been characterized by fierce competition

for numerous years. Boutiques face increasing pressure to distinctly differentiate

themselves from competing retail stores offering fashion merchandise. And since

consumers are becoming more demanding as fashion evolves and new global trends reach

local retail stores. Shopping for clothes forms a significant part of many Filipino women’s

lifestyles. Customers to whom fashion is important, they have specific needs and wants

and desire specific retail experiences. These customers are also becoming increasingly

more individualistic and more sophisticated, and therefore turn to small, specialty retailers

such as boutiques, which they believe can accommodate them by providing unique and
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tailored retail experiences. A boutique brand is not going to appeal to everyone. The target

niche is small, but a large amount of revenue can be earned from a small percentage of the

population. Louis E. Boone and David L. Kurtz, authors of “Contemporary Marketing,”

use an 80/20 principle whereby the largest part of a company's revenues comes from only

20 percent of its clientele.

For a boutique, the challenge is in pinpointing the 20 percent and making that

percentage repeat customers. Therefore it is important for boutiques to deliver exceptional

retail experiences. When a consumer received a positive retail experience may feel more

satisfied with the boutique, and may return to the retail store in hope of receiving a similar

retail experience. Once the customer returns to the same retail store, there is a possibility

that the customer may become store loyal. As soon as the customer keeps returning to the

same retail store, the probability of repurchase intentions becomes real. Boutiques target

particular market segments who are more individualistic and require the retail experience

to be tailored to their specific retail experience needs. In addition, these market segments

are willing to pay a premium price for it.

It is, therefore, in a specialty retailer such as a boutique’s best interest to

improve their understanding regarding customers’ retail experience needs. An effective

understanding will assist boutiques to make strategic decisions to influence customers’

purchasing behavior Therefore delivering total retail experience is a great marketing tool

because it provides boutique owners to manipulate certain dimensions of their stores that

will ultimately influence, customer satisfaction, store loyalty and repurchase intention.

That will result in great financial success of their retail store.

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With this insight, boutiques needs to offer holistic, stimulating and

memorable customer experience at every purchase situation. Determining the relationship

of all the controllable elements that encourage or inhibit consumers during their contact

with a retailer, defined as the Total Retail Experience (Berman and Evans). The dimensions

of Total Retail Experience that were applied in this study were five controllable

components, namely personal interaction, merchandise value, internal store environment,

merchandise variety and complaint handling. The Total Retail Experience is created by

both internal elements which the boutiques can control such as the number of salespersons

on the floor, service interface, retail atmosphere, assortment and price, also by external

which are out of the retailers control for instance the shopper’s purpose of shopping and

influence of others. In this study the emphasis is on the controllable elements of Total

Retail Experience.

According to a recent study conducted by The Business of Fashion and

McKinsey & Company 2018. The fashion industry is turning a corner. The McKinsey

Global Fashion Index forecasts industry sales growth to nearly triple between 2016 and

2018, from 1.5 percent to between 3.5 to 4.5 percent. But the rebound is not being felt

evenly across the world. In fact, 2017 signals the end of an era. The West will no longer be

the stronghold for fashion sales. In 2018, an important tipping point will be reached when,

for the first time, more than half of apparel and footwear sales will originate outside of

Europe and North America, as the main sources of growth are emerging market countries

across Asia-Pacific, Latin America and other regions.

With more than half of global retail sales, and countless digital and tech

innovations, Asia is no longer waiting for Western companies to step up. Asian players
 4

will assert their power and leadership even more. The global fashion market’s center of

gravity has long been shifting east. Asian economies have experienced strong economic

growth; GDP growth in Asia remains much higher than in Europe and the US.

Accompanying this growth is the rise of Asian consumers fashion expenditures. The region

is projected to account for almost 40 percent of global apparel and footwear sales by 2018.

The Philippines is included in the region of fast growth. The challenge for our local fashion

retailers is how to keep up with the speed of development of our Asian neighbors. How to

become more competitive in the global arena of fashion. Offering goods and services that

are world class and we can proudly say is Filipino made. Local fashion boutiques must

learn to adapt to the fast changing world of fashion retailing. They must adapt innovative

retailing strategies such as delivering total retail experience to consumers.

The many challenges of the local fashion retail industry is the influx of foreign

brands entering the marketplace. Competitive prices in rent, an abundant number of retail

spaces and the increasing level of income within the country has made it conductive for

foreign brands to want to sell their merchandise in the Philippines. The entry of foreign

brands takes its toll on homegrown fashion retailers. The advantages of foreign brands is

that the locations they get are in the shopping malls, the prepared choice of shopping

destination by Filipinos.

A recent study by Japanese firm Nomura found that Filipino consumers have

become more discerning, making them prefer branded goods in modern retail stores

(www.entrepreneur.com.ph). To answer this challenges local fashion retailers such as

boutiques must think about counter-measures. Local retailers should be open minded and

think globally. There is a current trend for local brands nowadays is to get foreign endorsers
 5

to promote their brands in the international market. Local retailers also need to remember

that they have more knowledge of the market. They know what the consumers want, and

delivering exceptional retail experience that is tailor made for local consumers can

differentiate them from their foreign counterparts.

In a recent study the revenue in the fashion segment in the Philippines will

amount to US$266m in 2018. Revenue is expected to show an annual growth rate of 19.9%

resulting in a market volume of US$549m in 2022.This includes shoes, leather goods (e.g.

leather bags, suitcases, purses and briefcases), clothes and accessories (e.g. hats, scarves

and gloves). The market’s largest segment is the clothing segment with a market volume

of US$210m in 2018 (www.statista.com). Strong consumer demand and economic

expansion will further drive growth in the retail sector.

In a 2016 report by the Philippine Statistics Authority (PSA) they recorded a

total of 915,726 business enterprises operating in the Philippines. Small and medium

enterprises account for 99.57% of the total establishment. One of the most common small-

scale retail business is the fashion boutique. There are 20,719 registered micro enterprises,

22 medium enterprises in the Province of Tarlac. In the City of Tarlac, there are 38

registered SMEs (DTI-Tarlac, 2015). Tarlac City is one of the emerging business areas in

Central Luzon with different business establishments can be found around the city. Several

shopping malls like SM City Tarlac located along McArthur Highway; Robinsons Luisita;

Magic Star Mall; CityWalk and My MetroTown Mall can be found throughout the city.

The main business district can found along F.Tanedo Street. Several fashion boutiques can

be found along this historic street.

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For a boutique to grow and survive in the City of Tarlac. It is crucial for

boutique owners to examine the economic forces affecting the retail fashion market.

Maintaining the presence of retail stores like fashion boutique in the dynamic market

environment is not easy. A local fashion boutique must adapt to the level of innovation of

the international and multi-national fashion retailers. One of the retailing strategies that

was developed in the world of retail fashion is delivering total retail experience. Integrating

and adapting this retailing strategy will definitely improve the brand of a boutique. And

will greatly differentiate it from its local competitors.

How will the local fashion boutiques differentiate themselves against foreign

and multi–national retailers? Is giving Total Retail Experience to the consumers will give

them an edge against their competitors? Which of the five elements of Total Retail

Experience (TRE) should be the main focus of boutiques? What element of Total Retail

Experience can drive customer satisfaction and loyalty? These are some of the questions

that needed to be answered and why this research was conducted. The aim of this thesis is

to create a framework, based on the customer’s point of view, stating different elements

that are important in creating a successful total retail experience. An additional aim of this

research is to provide further insights and suggestions that retailers can used to implement

total retail experience.

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Statement of the Problem

This study will investigate which specific dimension that are perceived as

important when creating a successful total retail experience. Five propositions of what

elements to include in order to create consumer total retail experience are presented. These

are tested using quantitative research. The results will be used to create a final suggested

framework including the supported propositions.

1. What is the profile of respondents be described in terms of:

1.1 sex;

1.2 age;

1.3 civil status;

1.4 educational attainment; and

1.5 income range of clients;

2. How are the dimensions of consumers total retail experience described as to:

2.1 personal interaction;

2.2 merchandise value;

2.3 internal store environment;

2.4 merchandise variety; and

2.5 complaint handling;

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3. What is the relationship of the profile variables and the consumers total retail

experience?

4. Assess the relationship between consumers total retail experience and customer

satisfaction;

5. Assess the relationship between consumers total retail experience and customer loyalty;

Hypotheses:

H1: There is no significant relationship between the profile variables and consumers total

retail experience on boutiques.

H2: There is no significant relationship between the customer satisfaction and consumers

total experience on boutiques.

H3: There is no significant relationship between the customer loyalty and consumers total

retail experience on boutiques.

Significance of the Study

This study hoped to provide significance to the different groups of people and

institutions based on their respective needs for relevant information. The study is

significant to the following stakeholders:

To the Boutique Owners and Managers. To learn about the importance of

delivering total retail experience to the consumers. To give valuable insights about

experience marketing and implement strategies that will deliver satisfying shopping

experience. This framework has the intention to be used as practical suggestions for
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retailers who want to implement experience marketing as a long-term strategy. The

framework suggests specific elements that retailers could implement in their stores in order

to create positive customer experiences.

To the Consumers. The result of this study would give importance and value to

the consumers as the major respondent. As they are considered as the end users of every

product that a boutique is offering. Without them, the business and all of its activities,

efforts, and practices will be meaningless. They can ensure to get excellent customer

service that will satisfy all their needs and demands.

To the Future Entrepreneurs. The result of this study would serve as a

framework for those who wanted to put up their own business. All the information which

can be derived from this study would educate them as they harvest the knowledge about

consumers total retail experience.

To the Future Researchers. The result of this study would be a useful reference

for future researchers. The findings can complement existing literature within the field of

experience marketing and retailing. By merely acquiring data and information on every

part of this study, they could use this as a conceptual framework on their own business-

related research paper.

To the Professionals in the Academe. The results of this study can be used as case

study materials on topics relating to different areas of marketing management such as retail

management, consumer behavior and experience marketing.

To the Students of Business Administration, this study provides theoretical and

conceptual knowledge in business management that they can apply in the workforce.
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Scope and Delimitation

The study focused on five registered local boutiques in the City of Tarlac. It

first described the five dimension of Total Retail Experience. This includes personal

interaction, merchandise value, internal store environment, merchandise variety and

complaint handling. It also aims to find out which of the five elements is perceived as the

most important in creating and delivering total retail experience. The study used the list of

registered Small and Medium Enterprises (SME’s) of boutiques in Tarlac City obtained

from DTI Tarlac as of the year 2017-2018.

The business establishments included in the study were in operation for at least

one year. The respondents are customers of the five boutiques. The business establishments

were located within the city proper and commercial district. The period that will be covered

by the survey will be from June 2018 to August 2018. The sample group of the study was

composed of one hundred fifty (150) customers from five local fashion boutiques in Tarlac

City.

Definition of Terms

The following terms and phrases listed below were used throughout the

discussion of the study. It is imperative to be familiar with these terms, along with their

respective operational definitions, to easily understand the substance of the study.

Boutique. A small shop or a small specialty department within a larger store, especially

one that sells fashionable clothes and accessories or a special selection of other

merchandise
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Brick and Mortar Store. It is defined as a traditional street-side business that deals with

its customers face-to-face in an office or store that the business owns or rents.

Complaint Handling. A complaint is an expression of dissatisfaction made to or about an

organization, related to its products, services, staff or the handling of a complaint, where a

response or resolution is explicitly or implicitly expected or legally required.

Customer Loyalty. It is defined as the virtual extension of other exchange partners to

provide the same benefits.

Customer Satisfaction. Refers to a marketing term that measures how products or services

supplied by a company meet or surpass a customer’s expectations. It is important because

it provides marketers and business owners with a metric that they can use to manage and

improve their businesses.

Internal Store Environment. Store environment includes all those elements that

contribute towards a pleasant shopping atmosphere. These elements are shop layout, aisles

that make it easy to shop, store cleanliness, well-spaced product displays and attractive

decor. The retail literature suggests that customers value the convenience that physical

aspects, such as store layout, contribute to shopping.

Personal Interaction. Interpersonal interaction is a communication process that involves

the exchange of information, feelings and meaning by means of verbal and non-verbal

messages, between two or more persons.

Merchandise Value. An assessment of the worth of a good or service. The product value

assessed by a business when setting a price for a particular product can depend on its
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production costs, its overall market value and the value of the product as perceived by a

targeted group of consumers.

Merchandise Variety. The number and range of brands or products offered by a supplier.

The collection of goods or services that a business provides to consumers. A variety of

merchandise refers to the number of different lines that the retailer stocks in stores.

Small and Medium Enterprises (SME’s). Refer to any business activity or enterprise

engaged in industry, agribusiness and/or services, whether single, proprietorship,

cooperative, partnership or corporation whose total assets, inclusive of those arising from

loans but the exclusive of the land on which the particular business entity’s office, plant

and equipment are situated, must have falling under the following categories: Micro not

more than P3,000,000;Small P3,000,001 to P 15,000,000;Medium P15,000,001 to

P100,000,000 (RA 9501)

Total Retail Experience. Consists of all the elements in a retail offering that encourage or

inhibit consumers during their contact with a given retailer. Some elements are controllable

by a retailer; others are not.

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Chapter 2

REVIEW OF RELATED LITERATURE AND STUDIES

This chapter presents the literature and studies that support the study to be conducted

Related Literature

Managers have applied the practice of experiential marketing to great

success in wide variety of industries. New trends in media, technology and society seem to

be driving a move towards marketing experiences and not just functional aspects of their

products and services (Bernd H. Schmitt and David L. Rogers, 2009). Experiences are

private events that occur in response to some stimulation (for example, as provided by

marketing efforts before and after purchase). Experiences involve the entire living being.

They often result from direct observation and/or participation in events –whether they are

real, dream-like or virtual. As a marketer, you provide stimuli that result in customer

experiences: you are an experience provider. You are in charge. You provide the

experience, and, as a result, your company and brand are seen as more or less likeable,

admirable or attractive.

Experiences may be viewed as complex, emerging structures (Holland,

1998). Emerging structures in the physical world typically display what is called ‘perpetual

novelty’. That is, no two experiences are exactly alike. But, as we will see, they may

nonetheless be categorized in terms of their generic emerging properties into different types

of experiences. Therefore, as a manager, rather than being concerned with any particular

individual experience, you need to ask yourself the more important strategic question of
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what types of experiences you want to provide, and provide them with perpetually fresh

appeal.

Modularity of the mind, that is, the view that the mind is composed of

specialized functional parts, provides a wonderful metaphor and practical lesson for

experiential marketing: experiences may be dissected into different types, each with their

own inherent structures and processes. As a manager you may view these different types

of experiences as strategic experiential modules (SEMs) that constitute the objectives of

your marketing efforts. Let me provide a brief description of the five types of customer

experiences that form the basis of the Experiential Marketing Framework:

SENSE marketing appeals to the senses with the objective of creating sensory

experiences through sight, sound, touch, taste and smell. SENSE marketing may be used

to differentiate companies and products, to motivate customers and to add value to

products. As we will see, one of the key principles of SENSE is ‘cognitive

consistency/sensory variety’, that is, the ideal SENSE approach provides an underlying

concept that is clearly detectable but appears always fresh and new. Moreover, a successful

SENSE campaign requires an understanding of what stimuli are most appropriate for

sensory impact.

FEEL marketing appeals to customers’ inner feelings and emotions, with the

objective of creating affective experiences that range from mildly positive moods linked to

a brand (for example, for a non-involving, non-durable grocery brand or service or

industrial product) to strong emotions of joy and pride (for example, for a consumer

durable, technology, or social marketing campaign). As we will see, most affect occurs

during consumption. Therefore standard emotional advertising is often inappropriate

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because it does not target feelings during consumption. What is needed for FEEL

marketing to work is a close understanding of what stimuli can trigger certain emotions as

well as the willingness of the consumer to engage in perspective-taking and empathy.

THINK marketing appeals to the intellect with the objective of creating

cognitive, problem-solving experiences that engage customers creatively. THINK

marketing appeals to target customers’ convergent and divergent thinking through surprise,

intrigue and provocation. THINK campaigns are common for new technology products.

But THINK marketing is not restricted only to high-tech products. THINK marketing has

also been used in product design, retailing and in communications in many other industries

ACT marketing aims to affect behavior, lifestyles and interactions. ACT

marketing enriches customers’ lives by targeting their physical experiences, showing them

alternative ways of doing things (for example, in business-to-business and industrial

markets), alternative lifestyles, and interactions. RELATE marketing contains aspects of

SENSE, FEEL and THINK marketing. However, RELATE marketing expands beyond the

individual’s personal, private feelings, thus relating the individual to something outside

his/her present state. RELATE campaigns appeal to the individual’s desire for self-

improvement (for example, a future ‘ideal self’ that he or she wants to relate to). They

appeal to the need to be perceived positively by individual others (for example, one’s peers,

girlfriend, boyfriend, or spouse; family and colleagues). They relate the person to a broader

social system (a subculture, a country, and so on), thus establishing strong brand relations

and brand communities.

The concept of experiential marketing, first introduced in the work of Pine

and Gilmore on experience economy (1997) and Schmitt on experiential marketing (1999),
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has gained significant traction, both among marketing academics and among practitioners

(for example, Pine and Gilmore, 1999; Schmitt, 2003). Experiential marketing is said to

occur ‘when a company intentionally uses services as the stage and goods as props to

engage individual customers in a way that creates a memorable event’ (Pine and Gilmore,

1997). One of the major benefits said to accrue from a well-executed experiential

marketing strategy is an increase in profit margins: companies that offer experiences – as

opposed to mere products or services – the argument goes, are able to charge a higher

premium for their offerings because customers are willing to pay the higher prices.

Experiential marketing is the process of identifying and satisfying customer

needs and aspirations profitably, engaging them through two-way communications that

bring brand personalities to life and add value to the target audience ( Shaz Smilansky,

2009). In the business world, commoditization is a process where unique brands and

products compete. As a result, standards are raised and equalized, forcing brands into

undifferentiated price competition. In the early days of marketing and advertising,

companies used to focus on differentiation based on the product features and benefits. As

competition forced rival brands to create competitive products, price wars began lowering

the cost of products and driving consumers to make cost-based purchase decisions. Thanks

to innovators in the mid-20th century such as Ogilvy, advertising was revolutionized and

brands evolved, taking on unique personalities. Through customer-focused marketing

communications, they encouraged consumers to aspire to a lifestyle that the brand

represented. Thus began the shift from a product-focused era to the customer-focused,

brand and lifestyle inspired advertising era. This marked a shift from a rational message to

an emotional message, or a combination of both.

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As competitive brands were positioned similarly to each other, and

differentiation became difficult again, consumers started to demand more. Successful

companies realized that high-quality service was an excellent way to add value and

differentiate from their competitors; for example, adding free delivery to a video chain or

picking up customers from their home to take them to the car rental shop. As time went on,

fierce competition snowballed with competitors all offering relatively similar added-value

services with their products, or by adding relatively similar added-value products to their

services. Lifestyle branding and differentiation through service became the norm. Again,

once there are no clear points of differentiation, price becomes a primary differentiating

factor. Clearly, this is not desirable from a marketing perspective.

Experiential marketing is the process of identifying and satisfying customer

needs and aspirations, profitably, engaging them through two way communications that

bring brand personalities to life and adding value to the target audience. Two-way

communication and interactive engagement is the key to creating memorable experiences

that drive word-of-mouth, and transform consumers into brand advocates and brand

evangelists. The power of a personal recommendation is unbeatable. We can all agree that

if a consumer feels strongly about your brand, strongly enough to personally recommend

it, you have succeeded. The trust between your brand and your consumer is an indicator

that a real relationship has been established.

Customer experience takes the next step by managing and merging all touch

points between a company and the customer (Johannes Robier, 2016). When employees

adopt a customer-oriented mindset and present information in the correct way, as well as

endorse the philosophy of customer experience, they also manage to serve customers in the
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best possible way. In order for employees to be able to create experiences, every employee

needs to adhere to a certain set of rules and also be aware of his freedom. This will empower

him to take the right actions during customer contact, in new situations, or when being

confronted with complaints. In addition, those employees without direct customer contact

represent a large target group of customer experience, as well. Through their contacts with

friends and relatives, they are the first carrier of a company’s philosophy and values. Word-

of-mouth marketing from such reliable sources lies among the fundamentals of a well-

functioning company. A service employee with direct contact to the end customer has to

act according to clearly defined rules. Nevertheless, it is indispensable for this employee

to have specific freedoms within his framework.

Products (Usability), processes and services (User Experience) as well as all

related touch points are customer experience areas that need to be designed efficiently and

effectively to achieve customer satisfaction. The crucial touch points (also known as

‘moments of truth’) have to trigger experiences. For this reason it is also called the

customer experience. It starts with the right corporate communications and also includes

peripheral areas such as the user manual of a screwdriver. The art of matching the

management of these touch points, processes and experiences with the corporate branding

and additional measures and controlling is referred to as Customer Experience

Management.

What is customer experience? It’s the experience the customer has, in other

words their subjective experience. How they think, feel and behave (Steve Walden,

2017).It’s not difficult. There is a whole industry called market research devoted to

understanding it. Meyer and Schwager from their 2007 Harvard Business Review article
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write: ‘Customer experience is the internal and subjective response customers have to any

direct or indirect contact with a company’ (Meyer and Schwager, 2007). Yet, I believe this

definition of customer experience by Meyer and Schwager is not enough because not

everything we subjectively experience matters. And surely for an ‘experience’ to be ‘an

experience’ it must matter, rather than be some subjective ‘event’ that flops in and out of

consciousness or even sub consciousness. So how can we craft a definition of subjective

experience that differentiates between those billions of experiences we receive each day

that are unimportant from those few that are? Well, I would contest that the valuable ones

are those that drive us. So if drives are so important, what are these? Well, for me drives

encompass the expressed and unexpressed needs of customers (their goals and sub goals),

which of course involves a multitude of influences: sometimes rational, sometimes

emotional, sometimes about affect, sometimes a conditioned response, sometimes

subconscious and so it goes on.

It seems that business is full of examples of concepts that become bastardized:

once a term achieves popularity, every man and his dog will use it to sell their products

and services. Hence, customer experience (and its management) may well have started off

talking about creating personal and memorable ‘experiences’ through looking beyond

service attributes but ultimately this subjective approach was ignored in favor of an

objective one: as in how we use experience to mean ‘everything I experience’. After all,

how can you sell personal and memorable experience if it depends on an idea and its

execution? And what are these experience attributes that go beyond service, product and

price anyway?
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The rise of the retailer is directly connected to the rise of another powerful

phenomena; the rise of shopping (Lars Thomasen, Keith Lincoln & Anthony Aconis,

2006). We love shopping. The act of shopping is here to stay, and there is a resulting need

for us to master the art of providing shopping experiences. The customer is in charge in

ways that profoundly influence the ability to sell products. The new kings and queens of

consumption increasingly set their own agendas. There’s only one thing you can be sure

of, and it is not the brand agenda, or the retailer’s. Shopper’s power is here to stay, and it

is not going away

Back in the old days, manufacturers could charge more for successful

products, but as competition increased more products were made available not only for

shoppers, but also for retailers. Retailers found themselves with the sudden opportunity of

being able to pick and choose which products to present to shoppers. They were truly the

kings of choice. Luckily this also meant that they could start squeezing the products

suppliers on price. However, today, the shoppers are increasingly taking charge. They have

transformed themselves from semi- ignorant, passive serfs to in-formed and demanding

shoppers. Shoppers have grown increasingly skeptical of brands and retailers alike and

their endless marketing claims. They have become increasingly informed, thanks to the

internet, as they are able to compare prices, service levels and features at the click of a

button. This is knowledge they actively use as a weapon in their increasingly aggressive

and independent shopping behavior.

You need to get closer to your shopper and maybe one way of doing this is

to start listening to them and start cooperating with them. You need to start listening to

shopper’s more (Keith Lincoln and Lars Thomasen 2007). By listening to people more
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effectively we get closer to the true shopping nature of brands. Brands are living entities.

Brands are holistic. Brands are not about stereotypes. Brands are about paradoxes. Brands

are about talking to everyone. Brands are about emotions.

Few retailers understand what it means to put customers first. Even fewer

actually do it. Customer Retail service is broken, just ask any customer (Willard N. Ander

and Neil Z. Stern 2004). It is evident in the way retailers merchandise their stores, how

they organize departments, how they staff their stores, and how they often don’t keep

adequate inventory. One thing has remained constant, customers and retailers have very

different notions about customer service. When retailers are asked to define great customer

service, they almost say something about having wonderful people. Customers, too, think

genuine customer service and courtesy are great. They would love to experience that on a

more regular basis.

However, for them, it’s the fourth most important aspect of customer service.

Here are the top four reasons given by customers when they’re asked to define great

customer service: 1. Having the product they are looking for that solves their needs and

having it in stock; 2.Having the store that is logically laid out so customers can find what

they want without wasting their time; 3. Having information readily available to answer

questions and to help the customer decide what to buy; 4. Finally, it is important to have

friendly, knowledgeable people. While many retailers equate great customer service with

things that make shopping easier and more efficient. Having great people is just one part

of that.

In retailing, customer service can be defined in four ways (John Fernie, Suzanne

Fernie and Christopher Moore 2003). Firstly, retail organizations exist in order to provide
 22

products to customers, adding value to the products through bringing them together in one

place, providing information about them, enabling customers to buy. Secondly, the wide

range of services that retailers have put together to add value to the fundamental exchange

relationship (money for products) has become intrinsic part of customer service. Thirdly,

the customer’s perception and experience of the service retailers provide affect the level of

customer satisfaction. Fourthly, customer service involves post purchase facilities and

services plus complaints and return policies. The five service characteristics, intangibility,

heterogeneity, perishability, ownership and inseparability. Inherently frame the customer

service experience.

By considering each turn, retailers can improve the customer service

experience. The intangibility of the service means retailers have to focus on tangibilizing

the brand for example, by giving customers loyalty cards and carrier bags. The

heterogeneity of retail experience can be overcome through standardization of procedures

and training. This can also be exploited through using new information and communication

technologies to customize the retail offering to individual or small group needs. The

perishability of the service has led retailers to maximize the opportunities for the customers

to shop. Ownership is a characteristic which means that retailers have to strive for

consistency, in service terms and in reliable provision of products. Inseparability is the

characteristic which requires retailers to ensure their staff have positive attitudes and

behavior, are well trained and informed, because the staff- customer interaction is so

important in ensuring customer satisfaction.

Berman and Evans (1998) define total retail experience (TRE) as all the elements

that encourage or inhibit consumers during their contact with a retailer. The TRE is
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influenced by two groups of components. The first group consists of the non-controllable

components. These include aspects such as adequacy of street parking, timing of deliveries

from suppliers and taxes, all of which are not controllable directly by the retailer or in

respect of which a retailer has limited control. The controllable components, in turn, consist

of a variety of elements that the retailer is able to control, such as the number of

salespersons on the floor, variety of brands carried and stock on hand. In this study the

emphasis is on the controllable elements of the total retail experience.

In the retailing literature, store loyalty is most frequently related to store image

(Dick and Basu, 1994). The notion is that a favorable store image leads to store loyalty

(Hirschman, 1981). Store image, in turn, has been described as consisting of the following

three general factors: merchandise-related aspects, service-related aspects and pleasantness

of shopping at a store (Mazursky and Jacoby, 1986). The total retail experience

encapsulates all three of these factors and a positive total retail experience should,

therefore, lead to store loyalty that should be difficult for competition to emulate. Total

retail experience furthermore not only attends to the transaction on the shop floor, it also

attends to pre- and post-transaction activities; all of which should enhance store loyalty.

Product quality has been identified as a causal determinant of a consumer's

perceived value of a product (Dodds, Monroe and Grewal, 1991; Kerin, Jain and Howard,

1992) and would, therefore, have an influence on the TRE of a consumer. Ghosh and

McLafferty (1987) stated that the combined attributes of merchandise quality, service level

and atmosphere may be viewed holistically as the quality of shopping experienced at an

outlet. Various researchers have also reported on the importance of the quality of products
 24

(merchandise) in consumers' perception, evaluation and image of retail shops (Dabholkar,

Thorpe and Rentz, 1994).

For some products the quality level of the product is of great importance to the

consumer and some retailers position themselves mainly on such a basis. Retailers selling

high quality, high priced, well-known luxury brands are examples in this respect. Although

consumers assume that minimum levels of quality are built into product offers (Waiters

and Hanrahan, 2000), a growing demand for quality is expected to apply to all types of

products (Lucas, Bush and Gresham, 1994).

In similar fashion Berman and Evans (1998) identify ten factors that a retailer

should take into consideration when planning the quality of products to offer. These factors

range from the target market and perceived benefits to image and other factors, most of

which focus on the contribution of the specific factor to the satisfaction of customers' needs

and the direct relationship with the perceptions that customers have of the retailer.

Product variety and assortment are components of the conventional retail

marketing mix (Hasty and Reardon, 1997). Products are probably the most complex

expectation customers could have of retail shops, because customers expect to find a

variety or a selection of different kinds of products that are consistent with personal

shopping intentions and preferences (Davidson, Sweeney and Stamp, 1988). The range of

food and non-food product lines that supermarkets, for instance, offer, illustrates the

complexity of the product variety decision. The opposite of this is the "super-

specialization" of specialty retailers.

 25

Assortment is closely related to variety, as it is the range of choice offered

within a category of products. Consumers therefore not only expect to find a variety of

products, but also an assortment of different colors, brands, styles, models and sizes for

each product line. In a recent study it was found that variety and assortment have three

components: assortment size, attribute dispersion and attribute association (Van Herpen

and Pieters, 2000). Product variety and the depth of assortment will to a large extent be

influenced by the image the retailer wishes to project.

Simonson (1999) noted that retailers would undoubtedly continue to use the

breadth and depth of their product assortment as a means for differentiation, despite the

new marketing environment that makes it easier to duplicate successful offerings of a

retailer. Recent research suggests that the pressure brought on by the latter will see to it

that retailers would not only employ assortments to satisfy customers' wants, but

assortments would also play an important role in shaping those wants.

Store atmosphere forms part of the underlying dimensions of the retail store

image (Baker et al., 2002). In essence, store atmosphere contributes to the physical

environment or “personality” of a retail store that projects a desired image and attracts

customers (Berman and Evans, 2013). Store atmosphere sub-dimensions and

corresponding elements significantly influence the customers’ choice of the retail store

(Thang and Tan, 2003), customers’ shopping enjoyment, merchandise choices, the time

customers spend browsing, their willingness to converse with personnel, their tendency to

spend more money than originally planned, the way in which they evaluate merchandise

information, and their actual purchase behavior (Berman & Evans, 2013).
 26

Furthermore, Berman and Evans (2013) recommend that retailers consider

certain store atmosphere sub-dimensions, namely exterior, interior, layout and design and

point-of-purchase and decoration each with identified elements when designing a suitable

store atmosphere to address customers’ retail experience needs (Berman and Evans, 2013;

Terblanché and Boshoff, 2006; Turley and Milliman, 2000). These sub-dimensions are

specifically utilized to enhance customers’ retail experience by creating an overall exciting

retail environment (Parsons, 2011). Exterior variables include the total physical exterior of

the retail store itself. Examples include the retailer’s exterior signs, entrances, display

windows, color of the building, surrounding stores, lawns and gardens, location,

architectural style, surrounding area and parking availability (Berman and Evans, 2013;

Turley and Milliman, 2000).

Interior variables refer to the overall interior of the retail store. Examples

include flooring, color, lighting, music, smell, width of the aisle, wall composition,

merchandise, temperature and cleanliness (Berman and Evans, 2013; Turley and Milliman,

2000). Layout and design variables denote the total amount of floor space allocated to

selling, merchandise, personnel and customers. Examples include space design and

allocation, placement of merchandise, grouping of merchandise, checkout points, sitting or

waiting areas, fitting rooms, racks and cases, waiting queue and furniture (Berman and

Evans, 2013; Turley and Milliman, 2000). Finally, the point-of-purchase and decoration

variables entail the devised signage and wording displays to inform customers about

pricing and checkout points. These provide customers with information and operate as a

substantial promotional tool. Examples of point-of-purchase and decoration include signs

 27

and cards, wall decorations, artwork, merchandise displays and price displays (Berman and

Evans, 2013; Turley and Milliman, 2000).

Schmitt and Zarantello (2013) state that many experiences only last for a brief

moment and that one problem therefore might be that experiences need to be long-lasting

in order to become memorable and successful. Schmitt and Zarantello (2013) also claim

that if experiences are not connected to pleasure of some kind, customers tend to switch to

another brand which can offer a more pleasurable experience. In other words, negatively

perceived experiences may lead to decreased customer loyalty. Altogether, this shows how

important it is to manage experiences properly to avoid irritation and negatively perceived

experiences, since these in turn may lead to decreased loyalty and the opposite of the most

mentioned advantages of experiences mentioned above.

The Philippine retail industry is seeing new trends as both local and

international brands continue to expand in the country, according to a research by CBRE

Asia Pacific. The new concept of “retail-tainment” is also being used by more developers

to give Filipino shoppers the “overall retail experience,” incorporating food courts,

cinemas, ice-skating rinks, bowling alleys, children’s playgrounds, and pet parks into

shopping malls. “The retail market in the Philippines has, and still continues to mature.

Filipinos are now after the overall retail experience, choosing malls and outlets that give

them the power of choice--whether in food and beverage or clothing and the like. It also

helps that developers allow the interests of the tenants and consumers to meet by giving

them a convenient place to stay in, unwind and shop,” said Rick Santos, president,

chairman, and chief executive of CBRE Philippines. CBRE said the retail-tainment factor

is expected to attract foot traffic as well as help landlords achieve higher returns in
 28

branding, image and media exposure, and revenue. The concept of retail-tainment, CBRE

added, is a result of understanding the primary interests and needs of tenants and

consumers.

Related Studies

A. Foreign

From the study, “Retail Experience Marketing A study on customer

perceptions of successful in-store experience marketing within retailing” (Hanna

Bjorkman, Patricia Egardsson et al 2015). They investigated which specific factors that are

perceived as important when creating successful in-store experiences. This includes store

environment, employee characteristics, senses, activities and technology. The results

indicates that in regards with store environment a general trend was that the subcategories

of furnishing, coloring and decorations were mentioned as important in the creation of a

positive retail experience.

One possible explanation of why these are seen as most important in the

creation of a positive shopping experience could be their development of a cozy and being

at home feeling as mentioned by several of the interviewees. The respondents placed a

large emphasis on the store layout where the design of every room led to a new experience,

and also displayed the products in an attractive way. Since the interviewees clearly showed

an indication of the store layout’s importance in the functionality and general contribution

to the shopping experience, the authors suggest that store layout also should be added as a

subcategory among the more aesthetic categories of furnishing, colors and decorations.
 29

The quantitative findings revealed a high level of importance of the employees’

customer treatment and the employees' service ability in the creation of a positive in-store

experience. This was further on confirmed by the qualitative study where majority of the

respondents perceived treatment and service as important as they mentioned the positive

aspects of receiving professional help and being greeted at the entrance of the store. This

could potentially be the underlying for the high importance levels of employees’ service

ability and customer treatment in the empirical research as the interviews mentioned a

general satisfaction regarding how the employees treated them during the visit.

From the dissertation “The influence of boutique store atmosphere on

customer satisfaction, store loyalty and repurchase intention” (BM Van Niekerk, 2015).

The author investigated store atmosphere as a second-order construct model comprised

from four sub-dimensions (factors) namely the retail store exterior, interior, layout and

design and point-of-purchase and decoration in order to determine the interrelationships

between these sub-dimensions (factors), customer satisfaction, store loyalty and repurchase

intention in the fashion retail industry. With respect to the empirical results of this research

study, respondents agreed the most that the exterior location of the boutique is convenient,

the entrance to the boutique is inviting, the interior of the boutique is clean and the

temperature in the boutique is comfortable. Regarding the layout and design of the

boutique, respondents agreed the most that the checkout and service points in the boutique

are well placed and that all the spaces in the boutique are creatively utilized, as well as that

the furnishings in the boutique are attractive. Finally, regarding the point-of-purchase and

decoration of the boutique, respondents agreed the most that the pricing of the merchandise

in the boutique is clearly visible and that the merchandise is well displayed.
 30

Based on the empirical results obtained from this research study, the author

concludes that store atmosphere has a large direct influence on customer satisfaction and

store loyalty, albeit with no direct influence on repurchase intention. Both mediation

relationships realized a medium indirect effect between store-atmosphere and repurchase

intention with customer satisfaction and store loyalty as mediators.

Another study, “The 21st Century retail experience a case study of IKEA in

Sweden” (Evelina Anderbygd and Maliwan Asawapittayanon 2011). They investigated

how the offline and online environment be described. The findings and conclusions

indicate that sight experience is the most important for customer both in offline and online

setting. For offline environment, store image especially store layout plays a big role in

contributing a good retail experience. Store layout dictates the flow and image in the store

and also the way retailer design the atmospherics in store such as lighting and visual

communications. The way that IKEA decorates their store with their own merchandises,

creates its environment as interactive theatrics. They found out that retailers can influence

store image by having a good store layout design, however the choice of layout depends

on the overall purpose of the company. IKEA has developed their own style of layout,

which can be described as a maze in order to keep customer in-store as long as possible.

Another dissertation titled “An Examination of consumer experience and

relative effects on consumer values” (Andrew Walls, 2009). The researcher presented a

model which proposed that consumer experiences are composed of both physical and

human interaction characteristics. The consumer’s perspective of these characteristics, and

hence the actual service experience, are affected by situational factors and individual

characteristic which in return impact perceived emotive and cognitive values. A set of
 31

propositions are presented based on the model and literature review to measure the

relationship between these factors. Participants completed the self-administered survey by

answering questions concerning their current stay experience relating to physical

environment, human encounters, trip-related factors, individual characteristics, and

perceived values.

The results of the study found that trip-related factors and individual

characteristics affect perceptions of physical environment and human interactions

consumer experiences during their hotel stay. In addition, the results revealed that both

physical environment and human interactions have significant and positive relationship

with perceived values. These results can give lodging managers a better understanding of

the composition of consumer experiences and how these events influence perceived values.

From to the study “Experiential retailing: extraordinary store environments

and purchase behavior” (Alana Nicole Garvin 2009). The author investigated how store

atmospherics affect purchase behavior in experiential stores. This was done by measuring

customers’ emotions five minutes into the shopping experience and comparing planned

amount spent of time and money spent to the actual amounts. The findings of the study

showed that higher levels of pleasure and arousal did not affect unplanned time and money

spent in the store. However, further analysis showed that higher levels of arousal occurred

when the perceptions of store décor and layout were extremely positive, and higher levels

of spending were made by consumers who perceived the store environment factors of

décor, layout, and displays as extreme positive.

According to the study “Customer experience as the strategic differentiator in

retail banking” (Adri Drotskie 2009). The researcher determined through the investigation
 32

that customer experience can be a valuable strategic differentiator in retail banking as it

gives an organization a competitive advantage through the focus on the total customer

experience which includes the previous differentiators in the industry, namely product,

price and service. The researcher also indicated that customer experience evolved over time

and includes service quality and customer service from which it evolved. The only way

retail banks could differentiate themselves from competitors was through total customer

experience, focusing on the total or holistic approach. This implied that the differentiators

mentioned before became elements of the total retail experience.

From the study “Enjoyment of the shopping experience: impact on customers

re-patronage intentions and gender influence” (Cathy Hart, Andrew M. Farrell, Grazyna

Stachow and John W. Cadogan, 2007). The authors investigated the enjoyment of shopping

experience, its influence on consumers’ intention to re-patronize a regional shopping center

and the effect of gender differences on shopping enjoyment. Findings indicate that

shopping experience enjoyment has a significant positive influence upon customer’s re-

patronage intentions. Furthermore, men are found to have a stronger relationship of

enjoyment with re-patronage than women.

From a gender-related perspective, the results appear to refute the notion of

the Savannah Hypothesis. Based upon this hypothesis, they expected the relationship

between enjoyment and re-patronage intentions to be stronger for women than men, as

women enjoying shopping should see re-patronage as an opportunity to extend their

shopping experience, whereas men generally seek to keep shopping time to a minimum.

However, the results appear to support the notion that for men enjoying shopping, they

indicate a stronger intention to return than do women. This could raise potential issues for
 33

shopping center management. Based on previous research, marketing management may be

predisposed to ensuring that women enjoy their shopping experience and may target

advertising and promotional activities more towards women than men. In fact, they may

find that the same level of activity directed towards men could pay greater dividends in

terms of re-patronage. Perhaps they could be seeing a change in the definition of shopping

roles, and this could account for the unexpected results of the gender based re-patronage

intentions hypothesis.

D’Astous’ (2000) research of irritating aspects of a shopping experience. The

research pinpointed the importance of also considering negative emotions connected to a

retail environment since negative information may be prominent over positive information

in the customer’s evaluation of a store. In the study, the author found several examples of

customers’ irritation sources such as bad smell, inadequate lightning too loud music, and

in-ability to find what you are looking for, a too crowded store, negative attitudes of sales

personnel, too pushy employees and many more. These were all related to the creation of

a negative shopping experience. The author also found interesting connections between

gender, age and likelihood of irritation where women and younger customers were more

likely to react stronger to the mentioned sources of irritations.

From the study “The unhappy shopper, a retail experience: exploring fashion,

fit and affordability” (Rose Otiendo, Chris Harrow and Gaynor Lea-Greenwood, 2005).

The research paper explores fashion availability, fit and affordability in the UK stores

especially for those women who wear size 16 and over; and examines their

satisfaction/dissatisfaction with the retail experience. The results indicates a large

percentage of females, particularly those who wear size 16 and over, are dissatisfied with
 34

retail environments, fashion and sizing provision among major UK market players. While

most women shopped from the high street and department stores, the larger woman had

great difficulty in finding well-fitting fashionable clothing in general, and with certain

categories being most problematic. Respondents’ views would appear to contradict

previously accepted wisdom that clothing consumption activity is leisure and pleasure

orientated; many negative experiences prevailed leaving them unhappy and

disenfranchised.

This study revealed that women who wear size 16 plus could not find clothes

they perceived as fashionable, which were a good fit and were affordable, in an

environment, which does not make them, feel second-class to their thinner sisters. The

product characteristics (fashionability, styling choice, color options, fabric selections) were

key retail selectors. These women want more choice in style, fashion, color, fabric and size

options, better quality, pricing, non-patronizing and larger sales girls, integrated displays

and opportunities for feedback. The “avoidance triggers” are aspects that require special

focus in fashion retailing.

Another research study titled “Customer delight in a retail context:

investigating delightful and terrible shopping experiences” (Mark J. Arnold, Kristy E.

Reynolds et al., 2005). The purpose of the study was to examine customer delight in a

retail-shopping context. Specifically, qualitative research was conducted to determine the

sources of delightful and terrible shopping experiences for retail shoppers. The depth

interviews provided a rich source of data in which to investigate the groups of factors

characteristic of both delightful and terrible shopping experiences. In that study, favorable
 35

encounters resulted when employees provided extra information, anticipated the

customer’s needs, showed interest in customer or were especially attentive to a customer.

Customers were also delighted by occurrences other than salesperson

behaviors. Oftentimes, a customer may unexpectedly locate a long-needed product or finds

exactly what he or she is seeking. Thus, unanticipated acquisition is often associated with

creating a delightful shopping experience. Unanticipated value, finding an unexpected

bargain, or purchasing a product at a lower price than expected may also contribute to

producing delight in a shopping situation. Finally, two categories of outcomes of delightful

shopping experiences emerged from the data in this study. Delighted customers may

recommend the salesperson/retailer to friends and family. Customers also find that these

sort of experiences make their shopping much more convenient.

The analysis of the data in the current study also revealed an additional

interpersonal group of terrible shopping experiences— those associated with other

customers present in the shopping environment. Informants reported situations involving

intense crowding, rude behavior, and even verbal attacks. The first non-interpersonal group

of factors associated with terrible shopping experiences relates to product or store

environment issues. When a customer cannot find what s/he is seeking or expects to find,

s/he is likely to feel negatively about the shopping trip. Finally, the actual atmosphere of

the retail setting contributed in the creation of some terrible experiences. Dirty

surroundings, crowded fixtures and aisles, and unreasonably loud music were reasons

mentioned by informants. The study revealed a number of interesting factors associated

with delightful and terrible shopping experiences. The results of this study may be used by
 36

retailers to better understand the factors that are associated with delightful and terrible

shopping experiences

Corrie Lee Conlon (2012) “Customer experience management: does a more

focused approach to the customer experience lead to store performance measure increases”

The purpose of the project is to determine whether increased customer service in a Lands’

End retail location leads to higher overall customer satisfaction and increases sales. Various

aspects of experiential retailing will be explored including lifestyle retailing that focuses

on the interaction between consumer and sales staff, consumer behavior and customer

service models in place at specific Lands’ End retail outlets.

The results of the study concludes that improving the overall customer service

would lead to increased store sales and key performance indicator measures such as units

per transaction and average transaction. It was found that at the Minnetonka store the

improved focus did in fact increase net sales and other key performance indicators even

with a decrease in overall store traffic. Although the customer experience program seems

to have improved store performance it may not be the only factor in the improvements.

This study did not consider factors that could also affect the store’s key performance

indicators. These factors include changes in the economy within the Minnetonka’s store

market and the types of sales promotions that were run within the store.

From the study “Creating and consuming experiences in retail store

environments: comparing retailer and consumer perspectives” (Kristina Backstrom and Ulf

Johansson, 2006). The authors investigated the substance of arguments about an

experience-oriented economy and experience-seeking consumption in retailing.

Employing a case study research approach that shows how retailers as well as consumers
 37

relate to in-store experiences. The results point out that retailers’ use ever more advanced

techniques in order to create compelling in-store experiences to their consumers. In

contrast, the depiction given by consumers reveals that their in-store experiences to a large

extent are constituted by traditional values such as the behavior of the personnel, a

satisfactory selection of products and a layout that facilitates the store visit.

B. Local

From the study “Customer satisfaction on the quality services of one department

store in Batangas City, Philippines” (Anna Margarita M. Agulo, Katrina M. Agno, et al,

2015). The authors of the study assessed the level of customer satisfaction on the quality

service of the department store in terms of employee’s professional appearance, customer

relation, customer service and facilities; they tested the relationship between the

respondent’s profile and customer satisfaction, and proposed a plan of action to improve

the satisfaction of customers. The results of the study showed that customers are satisfied

on the quality of service of this department store. Thus, management may continuously

provide orientation and training to employees on customer relations and services to meet

the full satisfaction of the customers.

Female dominates the number of customers who visit this Department Store,

mostly single, age bracket of 26 years and above, with monthly income of P10001- P15000,

self-employed and often visits this Department Store. The results indicate that marital

status and nature of work affect customer relation while nature of work also affects the

customer service. A plan of action is proposed to improve the satisfaction of the customer.

It recommended that the management may create various activities and strategies

specifically to attract male customers and increase the frequency of visits. This Department
 38

Store in Batangas City may improve and reach the highest standard of quality services

offered to its customers.

Another research study titled “Service quality and customer satisfaction in

fast food restaurants: a customer comparison using discriminant analysis” (Willy F.

Zalazar, 2017). The author investigated service quality and customer satisfaction in fast

food restaurants in the Philippines. The aim of the research is to determine the relationship

between service quality and customer satisfaction in fast food restaurants in the Philippines.

And to determine service quality dimensions that differentiates male and female customers.

Lastly, to predict the overall customer satisfaction for each gender using service quality

dimensions.

Factor analysis revealed three principal service quality dimensions: tangibles,

reliability or responsiveness, and assurance or empathy. Discriminant analysis identified

assurance/empathy and tangibles as dimensions that differentiate male and female fast food

customers. Regression models were derived to predict customer satisfaction for each

gender.

From the research conducted by Clemente (2015), customers feel satisfied

when the price charged suits both the quality taste and the quantity of food. It is no wonder

than when you get more than what you paid for, satisfaction is genuinely felt through it as

you feel it is worthy to spend such amount on a certain product.

According to the study by Navarro, Llinares and Garzon (2016), keeping

customers waiting is not a good idea or is harmful for the image of the businesses especially

if they wait for no valid reason; thus , it is recommended to work on a solution to quickly
 39

resolve problem to avoid making unnecessary negative perception of quality service. When

employees are knowledgeable and show in conveying with customer and their ability to

attract trust and confidence with the organization, they will definitely lead to satisfy their

customer.

From the study “Level of customer satisfaction on hotel services in Angeles City”

(Nancy D. Megallon, 2017). The author investigated the level of customer satisfaction on

hotel services in Angeles City. And the level of customer satisfaction as described by the

customers along the areas of: customer service, food, sanitation, facilities, rules and

policies, accessibility and ambiance; profile variables that are predictors of customer

satisfaction. The problems encountered in the hotel services is also investigated. The results

and conclusions of the study; among the different demographic variables, sex and

occupation are the only factors that have significant difference to the overall satisfaction

of the respondents. The results showed that the level of satisfaction of the male and female

guest are statistically different. The results suggested that male guests may be satisfied in

some hotel services while on the other hand, female guests may look for other factor for

them to be satisfied.

The level of customer satisfaction of hotel guest depends on several factors

such as customer service, sanitation, facilities room types, et al. It is interesting to note that

the respondents were highly satisfied on hotel room types and the rest of the factors were

rated satisfactorily. Some respondents also expressed their problems encountered in hotel

services in terms of employee behavior, dishonesty, property quality, condition and quality

of the area.
 40

Conceptual Framework

The conceptual framework that follows shows the relationships of the

different aspects in the study.

The first diagram shows the personal profile of respondents.

The second diagram shows the five dimensions of consumers total retail

experience.

The third diagram shows relationship between customer satisfaction and

consumers total retail experience; customer loyalty and consumers total retail experience.

And the last diagram shows the recommended framework to boutiques and

retailers with insights and suggestions that can be used to implement total retail experience.

With heightening competitive pressures in the retailing environment,

customer satisfaction and customer loyalty have become barometers of retailer

performance. The primary objective of this research study is to investigate consumers total

retail experience as a construct model comprised from five dimensions namely personal

interaction, merchandise value, internal store environment, merchandise variety and

complaint handling. In order to determine the interrelationships between these sub-

dimensions, customer satisfaction and customer loyalty on selected fashion boutiques.

 41

RECOMMENDATIONS

Figure 1. Paradigm of the study

 42

Chapter 3

METHODS OF STUDY AND SOURCES OF DATA

This chapter presents the methods of research, population frame, sampling scheme

and instruments of gathering data, and statistical tools and statistical treatment of data.

Research Design

The study used descriptive method to determine the consumers total retail

experience among fashion boutiques in Tarlac City. It identified the profile of the

respondents: as to sex, age, civil status, educational attainment and income range.

Descriptive design is applicable in defining and analyzing the perceived level of the

consumers total retail experience within the areas of personal interaction, merchandise

value, internal store environment, merchandise variety and complaint handling.

Correlational Research design was used to explore the relationship between the profile of

respondents and the consumers total retail experience. The Chi-Square Test of

Independence was used to find out if there is a relationship between the two variables. It

determined if the identified demographic profile is related to the consumers total retail

experience on selected fashion boutiques.

A Multiple Regression Analysis was conducted to determine which of the

Total Retail Experience dimensions (personal interaction, merchandise value, internal store

environment, merchandise variety and complaint handling) are significant predictors of

customer satisfaction and loyalty. To quantify the influence of the individual Total Retail

Experience dimensions on customer satisfaction and loyalty. And to determine how much

of the variation in the satisfaction and loyalty is explained by the independent variables of
 43

personal interaction, merchandise value, internal store environment, merchandise variety

and complaint handling.

Research Locale

This research study was conducted in the City of Tarlac, the capital city of

the province of Tarlac in the Philippines. According to the 2015 census, it has a population

of 342,493. Tarlac City is subdivided into 76 barangays. The central business district is

along F. Tanedo Street where a large number of business establishments are located. This

includes merchandising, retailing, wholesaling, services and other business establishments.

Fashion boutiques in Tarlac City are mostly located along the areas of M. H. Del Pilar

Street, F. Tanedo Street, Juan Luna Street, Mabini Street, Barangay San Roque, Ligtasan,

San Vicente, San Rafael, San Nicolas, San Sebastian, San Miguel, Cut-Cut, Tibag,

Maligaya and Matatalaib.

Respondents of the Study

The study considered the five (5) fashion boutiques located in Tarlac City,

specifically: Kwadrado, Fash Book Closet, Arcilla’s Boutique, G. Boutique and Preziosa

La Crem Boutique.

The respondents of the study were one hundred fifty (150) customers

from these five (5) fashion boutiques, with thirty (30) customers from each boutique.

Random sampling of customers transacting with the fashion boutiques were become the

respondents of the study. From the total of one hundred fifty (150) respondents from the

five fashion boutiques, all of the field questionnaires were retrieved.

 44

Methods of Gathering Data

A self-administered questionnaire was selected to investigate the consumers

total retail experience on boutiques. The questionnaire was based on the questionnaires that

were used to prior Total Retail Experience research conducted by Terblance and Boshoff

(2000 and 2001). The entire questionnaire is made up of three (3) sections:

The first section contained the profile of the respondents in terms of their sex,

age, civil status, educational attainment and income range.

The second section contained three main categories: Total Retail Experience,

customer satisfaction and loyalty. There are twenty-two (22) items measuring the five (5)

dimensions which comprise Total Retail Experience, three items which measure customer

satisfaction and four items measuring store loyalty.

Respondents were requested to indicate the extent to which they agreed with

the statements relating to these dimensions. Respondents were asked to evaluate each

question on a five-point Likert scale. The Likert scale ranged from Agree Strongly to

Disagree Strongly. Each item was anchored at the following numerals and descriptions: 5

= Agree Strongly; 4 = Agree; 3 = Moderately Agree; 2 = Disagree; 1 = Disagree Strongly.

The last part consisted of suggestions and recommendations to further improve

the products and services of fashion boutiques. The survey questionnaire was used as the

primary data collection method. Interviews were also conducted which validated the data

gathered through the questionnaire. Interviews further assisted the researcher to

contextualize the results gathered.

 45

Reliability and Validity of the Research Instruments

A reliability analysis of the dimensions of Total Retail Experience was

conducted. The research instrument was presented to the research adviser. Adjustments on

the content of the questionnaires were made according to the specified recommendation of

the research adviser. The modified questionnaire was pilot tested to a number of

respondents outside the coverage area. From a total of thirty (30) respondents of the pilot

test, a Cronbach alpha was performed.

Statistical Treatment

The following statistical tools were used to test the data gathered for each of

the problems in the study:

For descriptive purposes, data were gathered and tabulated using frequency

and percentage distributions.

Frequency Distribution. A frequency distribution one of the most common statistical

tools to describe the single population or the number of observation per category. It is a

tabulation of the frequencies of each range of values.

Percentage Distribution. Percentage distribution is used for interpreting statistical data,

to determine, and show relationship between two variables. The data that were gathered

were computed using the formula:

P = f / N * 100%

Where:

P = Percentage
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f = frequency

N = number of respondents

Weighted Mean. A mean is where some values contribute more than others. The weighted

mean formula:

M = ∑ fx / N

Where:

f = frequency

x = value of response category

N = number of respondents

Likert Scale. Likert scale measures the perception of the respondents based on their own

observation on total retail experience on selected fashion boutiques. The following are the

interpretation of the scale:

Ratings Ranges Description

5 4.50 - 5.00 Agree Strongly

4 3.50 - 4.49 Agree

3 2.50 - 3.49 Moderately Agree

2 1.50 – 2.29 Disagree

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1 1.00 – 1.49 Disagree Strongly

Chi- Square test of Independence. The chi- square test of independence was used to find

the relationship between the profile variables and the consumers total retail experience.

The formula used was:

Where:

χ² = Chi – Square test of Independence

O i.j = Observed value of two nominal variables

E i.j = Expected value of two nominal variables

The Chi-Square test of independence is used to determine if there is a

significant relationship between two nominal (categorical) variables. The frequency of

each category for one nominal variable is compared across the categories of the second

nominal variable. The data can be displayed in a contingency table where each row

represents a category for one variable and each column represents a category for the other

variable.

Multiple Regression Analysis.

Multiple regression is an extension of simple linear regression. It is used

when we want to predict the value of a variable based on the value of two or more other

variables. The variable we want to predict is called the dependent variable (or sometimes,
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the outcome, target or criterion variable). The variables we are using to predict the value

of the dependent variable are called the independent variables (or sometimes, the predictor,

explanatory or regressor variables). Multiple regression also allows you to determine the

overall fit (variance explained) of the model and the relative contribution of each of the

predictors to the total variance explained.

The multiple linear regression equation is as follows:

where is the predicted or expected value of the dependent variable, X1 through Xp are p

distinct independent or predictor variables, b0 is the value of Y when all of the independent

variables (X1 through Xp) are equal to zero, and b1 through bp are the estimated regression

coefficients. Each regression coefficient represents the change in Y relative to a one unit

change in the respective independent variable. In the multiple regression situation, b1, for

example, is the change in Y relative to a one unit change in X1, holding all other

independent variables constant (i.e., when the remaining independent variables are held at

the same value or are fixed). Again, statistical tests can be performed to assess whether

each regression coefficient is significantly different from zero.

Cronbach Alpha. Cronbach’s alpha is a measure of internal consistency, that is, how

closely related a set of items are as a group. It is considered to be a measure of scale

reliability. A "high" value for alpha does not imply that the measure is unidimensional. If,

in addition to measuring internal consistency, you wish to provide evidence that the scale
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in question is unidimensional, additional analyses can be performed. Exploratory factor

analysis is one method of checking dimensionality. Technically speaking, Cronbach’s

alpha is not a statistical test – it is a coefficient of reliability (or consistency). Cronbach’s

alpha can be written as a function of the number of test items and the average inter-

correlation among the items. Below, for conceptual purposes, we show the formula for the

standardized Cronbach’s alpha:

Here N is equal to the number of items, c-bar is the average inter-item covariance among

the items and v-bar equals the average variance.

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