BECAMEX BUSINESS SCHOOL
MARKETING MIX AFFECTS CUSTOMER SATISFACTION IN SPORT SHOE INDUSTRY
FINAL YEAR PROJECT
Student’s name: Thai Thi Thuy OanhIRN:1332300095
BECAMEX BUSINESS SCHOOL
MARKETING MIX AFFECTS CUSTOMER SATISFACTION IN SPORT SHOE INDUSTRY
Thai Thi Thuy Oanh, IRN: 1332300095
has been approved
May 00, 2018
Bui Thi Lan Huong, PhD., Advisor
ACCEPTED AND SIGNED:
Marketing mix has been studied for many decades. The effects marketing mix have become the valuable sources which help a lot in marketing field as well as the researchers. The principal purpose of this study is to examine the relationships between 7Ps in marketing mix and customers satisfaction among high school students, students at university and citizens who mainly live and work in Binh Duong. The effects of 7Ps to consumer satisfaction were examined intensively. The list of questionnaires was given to the people to collect necessary information to conduct the study. There were 35 main questions. The collected data were open in the quantitative research. Both descriptive and inferential statistical analyses like Cronbach’s Alpha reliability, correlation and regression analyses were used in this study. The results of this study showed that the significant effect of marketing mix on customer satisfaction. Each factor in 7Ps has a strong relationship with the satisfaction of the customer excepted promotion. These outcomes would be beneficial for firms in order to diversify marketing activities, enhance marketing strategies as well as increase company profit and revenue.
Keywords: marketing mix (7Ps), product, price, place, promotion, process, people, physical evidence, customer satisfaction.
I would like to show my sincere gratitude to my advisor, Dr Lan Huong who had
provided valuable guidance from the beginning of the study until it was conducted.
Moreover, I would like to say thank you to the committee 2 quarter 2/2017 that had provided me some valuable advices when I first started to do my proposal. Many thanks also sincerely go to the board of head teachers at Tan Phuoc Khanh high school for allowing me to take the survey, especially Mrs Kien Phan who directly helped me conduct the survey. I am thankful to EIU students and citizens of Phu Tan ward for responding the survey. I also would like to send gratefulness to all of the people who supported me in the journey of the study.
TOC o “1-3” h z u CHAPTER 1: INTRODUCTION PAGEREF _Toc513321057 h 61.1. Business background PAGEREF _Toc513321058 h 61.2. Research rationales PAGEREF _Toc513321059 h 71.3. Problem statement PAGEREF _Toc513321060 h 71.4. Research questions PAGEREF _Toc513321061 h 81.5. Research objectives PAGEREF _Toc513321062 h 8CHAPTER 2: LITERATURE REVIEW PAGEREF _Toc513321063 h 92.1. Review of the previous studies/theories PAGEREF _Toc513321064 h 92.2. Hypothesis development PAGEREF _Toc513321065 h 12CHAPTER 3: METHODOLOGY PAGEREF _Toc513321066 h 173.1. Research method PAGEREF _Toc513321067 h 173.2. Sampling method PAGEREF _Toc513321068 h 173.3. Variable measurement PAGEREF _Toc513321069 h 183.4. Data collection strategies PAGEREF _Toc513321070 h 183.5. Questionnaire design PAGEREF _Toc513321071 h 21CHAPTER 4: DATA ANALYSIS PAGEREF _Toc513321072 h 244.1. Descriptive data PAGEREF _Toc513321073 h 244.2. Reliability, correlation and multiple regression analysis PAGEREF _Toc513321074 h 254.2.1. Reliability PAGEREF _Toc513321075 h 254.2.2. Exploratory Factor Analysis (EFA) PAGEREF _Toc513321076 h 264.2.3. Regression PAGEREF _Toc513321077 h 284.3. Summary of the research results PAGEREF _Toc513321078 h 29CHAPTER 5: DISCUSSION – CONCLUSION – RECOMMENDATION PAGEREF _Toc513321079 h 325.1. Summary of the study PAGEREF _Toc513321080 h 325.2. Summary of the key findings and discussion PAGEREF _Toc513321081 h 325.3. Significance and Practical Implications of the study PAGEREF _Toc513321082 h 335.4. Limitations and suggestions for future research PAGEREF _Toc513321083 h 34CHAPTER 6: REFERENCES PAGEREF _Toc513321084 h 35
CHAPTER 1: INTRODUCTION1.1. Business background:In many years ago, one person can have a very few pair of shoes to meet the demand for doing exercises, working purpose or fashion purpose. Nowadays, customers are willing to pay more money purchasing many kinds of shoes (T. Staikos and S. Rahimifard, 2007). The world footwear industry production has increased approximately 23 billion pairs of shoes. This number of shoes is expected to continuously increase (World Footwear, 2016).
The developed countries like US, UK and developing countries such as India, Vietnam have the significant difference in the footwear consumption. The per capital consumption of Vietnam is 0.5 pairs of shoes including all kind of shoes (SATRA 2003).Vietnam has been developed the sustained economy in recent years. The country has the stable political system, copious labor force and many good welcomed policies from the Government so it can attract many foreign direct investments (FDI). The shoe industry has also developed to accompany the whole economy. This field not only grows up with the huge quantity of production but also the quantity of exporting. As a result of the development, Vietnam is the second biggest shoe producer in the world in term of export value in 2016 (Vietnam Sourcing, 2017). According to the Vietnamnet (2016), Vietnam produces shoes mainly for exporting not for wearing. In 2016, the percentages of exporting shoes increased 8,6% compared with 2015 and in 2017, it increased approximately 11%. (Khue, 2017). The consumption pairs of shoes in Vietnam is much lower than the quantity pairs of shoes that the country exports. In 2015, Vietnam produced up to 1.172 million pairs of shoes and it is expected to increase up to 1.698 pairs of shoes in 2020. (Lefaso, 2013).
According to the statistic of World Bank Vietnam, the product capacity of sport shoe in 2004 is up to 290.50 million pairs. There are total 359 companies in this industry including Center State – Owned companies and Local State – Owned companies are 35, Non – State Owned 169 26 195 companies are 169, FDI Companies are 141 and Joint Venture Companies are 14. Vietnam has exported sport shoe in totally four main markets which are EU countries, US market, Japanese market and other markets with the percentages as the order: 68%, 18%, 2,8% and 13,5%. Binh Duong province contributed to the export turnover approximately 424.67 million USD which is about 16.09%. (Tong, n.d.).The sport shoe industry in Vietnam has faced with some disadvantages. The most difficult challenge of sport shoe companies in this country is about the marketing. According to Tong (n.d.), Vietnam cannot approach the potential sport shoe markets because it lacked the marketing capacity. So it is considered that marketing plays a vital role in this industry as well as in the business of all the companies. The development of the market, the product design and development are not expanded much so they limit the development of this industry.
1.2. Research rationales:
Customer satisfaction plays a vital role in the success of every business especially in customer-based equity of the company and as a principal tool to measure the effectiveness of marketing performance (Jones & Suh, 2000), (Pappu & Quester, 2006). Obtaining clearly which factor affects this sector among 7Ps is necessary for firms and the owners. They can have the right decision when considering which element should be prioritized first when carrying out marketing programs. The study helps them take all the advantages of 7Ps as well as save cost and time for their business. Moreover, the role of customer satisfaction can be known clearly for the companies to have suitable policies and directions to treat with this kind of vital people.
1.3. Problem statement:Many kinds of research had figured out the relationship between marketing mix and the satisfaction of customer but these studies did not state clearly which elements among marketing mix has the most significant effect on the customer satisfaction and in contrast.
In Vietnamese society, businesses about sport shoes have grown up quickly including in Binh Duong. Because the less information about the relationship of each element in 7Ps and customer satisfaction the owners may not know which sector should be spent more effort and money. If this research is carried out the result of this study can be useful for these businesses. The owners can know clearly which elements in 7Ps affect customers a lot and in contrast. They can consider which elements they should spend more effort as well as money on it to generate the profit and which elements should be ignored or spend less effort and money.
So in this study, the researcher will explore and examine clearly and carefully the relationship between each element in 7Ps and the customer satisfaction among Tan Phuoc Khanh high school students, EIU students and residents at Phu Tan ward- Thu Dau Mot city in Binh Duong province.
1.4. Research questions:Main question: What is the most significant factor of 7Ps that impacts on customer satisfaction?
1.5. Research objectives:The research will be carried out for two purposes:
The first one is to identify the influences of 7Ps on customer satisfaction.
The second one is to understand the impact of each element in 7Ps on the customer satisfaction in the real case of students at Tan Phuoc Khanh high school, EIU students and residents at Phu Tan ward- Thu Dau Mot city.
After analyzing two statements above, the research can figure out which factors that can make customers satisfy most. People who do business especially who have business in sport shoe industry can consider this study and improve or have the right path in their business.
CHAPTER 2: LITERATURE REVIEW2.1. Review of the previous studies/theories:
2.1.1. Definition of the theories:
+ Products: McCarthy (1971) stated the definition of price is that it is both tangible and intangible items. They are made to satisfy the customer need and want. The life-cycle of each item starts three stages: the first stage is growth, the second stage is maturity and the last one is decline. In order to gain the highest profit from the product that the firm produces they marketers should figure out the most suitable strategies to make sure they match with the life-cycle of the product. According to Sapre & Nagpal (2009), a product is a thing which presents in the market to satisfy the needs and wants of the customers. The product is considered as a center attribute of the service. Buyers do not buy product because of its features but including the ability to solve the buyer’s issue. Enache (2011) illustrated that product can play a crucial role in marketing especially marketing mix.
+ Price: Price is considered is “what is given up or sacrificed to obtain a product” (Zeithaml, 1988) (p. 10). Jacoby ; Olson (1977) divided price into two categories: objective price and perceived price. Objective price is a real price of the product and perceived price is a price that is in the customer’s mind. In order words, perceived price can be considered as the price that customers are willing to pay to get the item. Another definition of Dodds et al., (1991) about price is that it is the value which customers agree to pay off the product. Price is the most vital element which customers base on it to decide whether they should buy products. Price is also a tool for firms to calculate the profit after producing and selling. Moreover, price illustrates the quality of the product, high price means high quality and in contrast. Sapre & Nagpal (2009) stated that price is as the money that is paid by the consumers including the combination of the cost of effort and time spent.
+ Place: McCarthy (1971) also considers place as a distribution channel of firms. The more distribution channels the firms have the more products can be sold. Establishing effective distribution channels or places make customer find an easy way to approach the product of the company. Another definition of place is that the locations or the distribution channels which are product and service are delivered. (Sapre & Nagpal, 2009).
+ Promotion: According to Pannaphach (2012), illustrates that promotion is an effective tool which is used to deliver information and features of the product or service to the customers. The primary aim is to help firms communicate with customers to inform about the product and service. Furthermore, it can be used to interact with the consumers in term of the firm’s long-term profits. (Sapre ; Nagpal, 2009). Promotion can attract people and stimulate them to buy the product or service. Promotion is mixed between these concepts as below (Harrell, 2002):
Advertising: Ideas, goods and services will be presented and promoted by some specific tools such as: printed ads, television, radio, billboard, emails, brochures, catalogs, posters, banners, etc.
Personal selling: This is a process of consulting, convincing and supporting customers when they want to purchase the product. This process mainly uses oral presentations such as: sales meetings, sales presentations, and sales events. Personal selling can be conducted directly or indirectly based on the real situation. A salesperson can carry out the process by face to face or via telephone.
Sales promotion: Sales promotion aims to increase the demand of customers, stimulate the demand of the market, and improve the product’s availability. Sales promotion can be conducted by giving customers compounds, contests, exhibitions, etc.
Public relations: Creating good images as well as reputation of the product or service by having news or presentations about it. The aim of public relations is to create the close relationship between customers and the product/service via some media tools. Public relations can be carried out by using magazine, newspapers, television, radio, charity activities, speeches, seminars, etc.
Corporate image: The image as well as the reputation of the firms plays a vital role in marketing and its effectiveness. Customers intend to buy the company product with their satisfaction if the company can build the good image itself. In contrast, if the reputation of the firm is low customers can purchase the product of the company’s competitors and do not refer to purchase goods at this firm.
Direct marketing: companies have many strategies to directly approach or communicate to their customers.
+ People: People in marketing mix is defined all of the participants who directly relate to the business. Among these kinds of people, firm’s employees are the most important sector because they are the people who directly deliver information to the consumers. (The marketing mix, n.d.). Anitsal & Girard (2012) concluded that people are both employees and customers who take part in the buying and selling transactions. Sapre & Nagpal (2009) recommended that employees are the company’s interface when they interact with customers. So training and empowering are important actions that the firms need to take care.
+ Physical evidence: It is considered as a place that the products and services are delivered. (The marketing mix, n.d.). Sapre ; Nagpal (2009) showed that physical evidence or tangible sector provides the evidence about the quality of the goods and services. It is also defined as an environment that the purchasing transaction is carried out. (Anitsal ; Girard, 2012). Enache (2011) considered physical evidence is a proof of the product which the firms give to the consumers.
+ Process: The process is defined as the systems and the processes of the firms that affect the business transaction. (The marketing mix, n.d.). The process also is considered as the sum of activities, mechanisms and procedures in which products and services are delivered. (Booms and Bitner, 1981). The process also plays a major role in media. Sapre ; Nagpal (2009) stated that it is the list of actions that need to be carried out in order or the operation methods to ensure the smooth of the business transaction.
+ Marketing mix:
According to Chong (2003) in the theory of economy, the price is the initiation of the definition of the marketing mix. The marketing mix is narrowed into 4Ps including price, product, place and promotion (McCarthy, 1964). These factors are considered as a principal content of marketing mix. This concept is not only a single theory but also is considered as a tool for people to consult and make decisions based on it. “The tools can be used to develop both long-term strategies and short-term tactical programs” (Palmer, 2004). According to Anthony (1997) marketing mix is a process of converting all of the marketing plans into the actions.
+ Customer satisfaction:
Customer satisfaction is defined that how the customer expectation is met. It also has the positive relationship with the customer’s needs. (Kotler et al 2013). “The customer’s overall feeling of contentment with a customer interaction” is a definition of Customer satisfaction (Harris, 2010, p. 2). Krishnan & Hari (2011) and Vyas (2011) examined and concluded a list of elements that can be considered as a measurement scale to measure the customer satisfaction. There are totally 14 elements that are the main factors to measure customer satisfaction. In detail, 14 elements are lists as following: repairing, the whole quality of the product or service, the product size or capacity, the competitive price, the value, the reliability, the usage experience, the services after selling, the responsiveness, the customer services, the program for loyal customers, the warranty, the pre-sales and the behavior of the salesperson, reported by Garg & Singh (2016). Customer satisfaction can be increased and improved if the companies or firms treat customers honestly, sincerely, transparently and truly in giving promotion information (Arham, 2010).
2.1.2. Marketing mix affects customer satisfaction:
Bay, Petrizzi and Gill (2008) stated that if companies or firms use marketing mix as a tool in the business, this tool can help increase some elements for the business. In detail, profit and sales of the companies will be raise if they apply marketing mix. So it will be an effective tool to help firms achieve the marketing target. Each element in marketing mix will contribute to customers’ satisfaction (Shankar & Chin, 2011, Sable 2013).
According to Endalew Adamu (2011), some elements in marketing mix have strongly effects on the choice as well as the satisfaction of customers in sport shoe industry. In detail, the product’s design and the price are principal factors that customers care the most.
2.2. Hypothesis development:
According to Andreas (2007), price is one of the most vital factors in the purchasing of customers. So price is considered as an element that has an enormous effect on customer satisfaction. When people purchase product their satisfaction can be increased if the price of this product is suitable. Han & Ryu (2009) also stated in their study that price is predicted to be a crucial factor that has positively relevant to the satisfaction of the customer. Price can be used as an effective tool to enhance the level of customer satisfaction (Ranaweera & Neely, 2003). From the evidence above, the researcher can develop the hypothesis one as below:
H1: Price affects customer satisfaction.
There are variable factors for people to measure the satisfaction of the customer: the most important one is the product as well as the quality of it. The second one can be used to measure is the experiences and the last one is the expectation of the customer about what they want or intend to purchase (Wen Wu, 2006). The product performance is one of the basic antecedent measurements of customer satisfaction (Johnson and Fornell, 1991). According to Doshi (2016), product as well as product features has the positive relationship with the satisfaction. It has the significant effect on the overall customer satisfaction. From these points of view above, this study can be developed the second hypothesis as below:
H2: Product affects customer satisfaction.
The diversity of the distribution channels not only make the firms profitability but also help increase customer satisfaction. (Montoya-Weiss et al., 2003; Sharma & Mehrotra, 2007). Lacramioara & Ioana (2010) also concluded that distribution channels make a better customer satisfaction. Almanza et al. (1994) concluded that place is one of the attributes which affects customer satisfaction. Leo & Philippe (2002) stated that the satisfaction is marked by the place attribute. Based on the studies above, the researcher will state the hypothesis as below:
H3: Place affects customer satisfaction.
According to the study of Fornell (1992) when companies in US and Japan carried out promotion programs they can increase the satisfaction of the customers but the margins of the companies were opposite. It seems that promotion has positive effects on customer satisfaction. So the researcher will develop the hypothesis as following:
H4: Promotion affects customer satisfaction.
According to the previous research of Anitsal & Girard (2012), having a smooth process in the transaction of buying and selling can help the firms have the good images. Products can be perceived well in term of value and quality by consumers. Furthermore, process can be an effective tool that shows the caring of the firms to the customer. So it affects customer satisfaction positively. From this point of view, the fifth hypothesis can be developed as below:
H5: Process affects customer satisfaction.
The study of Söderlund (2016) figured out that there is a relationship between people and customer satisfaction especially the employees and the staffs who directly present in the business transaction. The other research also stated that the employee attitude and employee behavior contribute much to the level of customer satisfaction. (Hong, Liao, Hu, & Jiang, 2013). Conwaya and Brinerb (2015) the people performance of the organization play a key role when measuring the level of satisfaction. The sixth hypothesis can be developed as below:
H6: People affect customer satisfaction.
Bitner (1990) concluded that physical evidence as a factor that relates to customer satisfaction. Thusyanthy & Senthilnathan (2012) asserted the positive relationship between customer satisfaction and physical evidence of the organization. Physical evidence is measured by tangible things, exterior and interior appearance of the firms. Based on the previous studies, the researcher will have the hypothesis as following:
H7: Physical evidence affects customer satisfaction.
Empirical research and findings:
According to the research of Garg and Singh (2016), marketing mix has indirect impacts on customer satisfaction through brand awareness mediating variable. From the result of this research, it can be understood that there is a relationship between 7Ps and customer satisfaction. It also means that each P will influent the satisfaction of the customer. The study of Garg and Singh (2016) has not figured out which element in 7Ps has the strongest impact and which element has the lowest impact on customer satisfaction. In order words, the study has not stated how each element of 7Ps affects customer satisfaction. In this study, the researcher will divide 7Ps into each P to examine the unilateral effects customer satisfaction.
CHAPTER 3: METHODOLOGYThis section mainly illustrates the methods and the designs which are used to conduct the study. Firstly, the problem statement will be reviewed. To consider the relationship between marketing mix and customer satisfaction, students at Tan Phuoc Khanh high, students at EIU and citizens in Phu Tan ward – Thu Dau Mot city will be mainly respondents. First of all, the problem statement will be reviewed. Next, the methods which are used to analyze the study will be given. Then, the sampling method, variable measurement and the data collection strategies are going to be demonstrated. Finally, the process of questionnaire design and translation will be given.
In this study, the researcher will explore and examine clearly and carefully the relationship between each element in 7Ps and the customer satisfaction. People who do business especially who have business in sport shoe industry can consider this study and improve or have the right path in their business.
3.1. Research method:
In this study, quantitative method is required to be used to carry out the research. This method focuses on numerical data and generalizes across groups of many people. According to Sibanda (2009) the final outcome will be used to examine the concepts and predict the future result. Furthermore, using the quantitative research and a statistically significant sample will help researchers quantify the problem related to a large population (Cooper & Schindler, 2014). The researcher uses the method to examine the relationships between the independent variables and the dependent variable. In other words, this methodology is applied to figure out the relationship between 7Ps and customer satisfaction. Thus, it provides the reliable result which is used to conduct the study. As a result, quantitative method would be the most suitable method for this research.
3.2. Sampling method:The researcher will investigate 100 students at Tan Phuoc Khanh high school who are from 16 to 18 years old, 100 students at Eastern International University who are from 19 to 23 years old and 100 residents who are from 24 years old and above in Phu Tan Ward which belongs to Thu Dau Mot city. All of the information about key sections will be collected: price, product, place, promotion, people, process, physical evidence and customer satisfaction. Some questions about demographic section will also be concluded. The researcher expects the respondents will freely give their answers with their enthusiasm.
The sample size will reflect the population of the high school which is around 1200 students (N. H. Hung, personal communication, January 20, 2018), the population of EIU which is around 4000 students (N. M. Tri, personal communication, February 09, 2018), and the population in Phu Tan ward which is nearly 6000 people (N. Van. Trai, personal communication, February 10, 2018). All of the personal information of the researcher and the respondents is not mentioned to ensure the private for both sides. The estimated time to survey is about one month.
3.3. Variable measurement:To figure out the final result of the research, the researcher utilizes a list of questionnaires and statistical tools to identify. It is expected that the respondents will freely and honestly give their answers which are considered as a reliable data for the researcher doing the next steps. The satisfaction of customer when purchasing sport shoe item can be indicated by a 5-point Likert scale as follows (Mcleod, 2008):
1: Strongly disagree
5: Strongly agree
3.4. Data collection strategies:Some of the factors about the demographic will be showed as: gender, age and employment statue. Giving the data which are relevant to demographic section will reflect the reliability as well as the objectivity of the participants. The data will be processed using SPSS (Statistical Package for the Social Sciences). After processing data, the researcher will focus on principal statistical analysis tools which are Cronbach’s Alpha, Exploratory Factor Analysis (EFA), Correlation and Regression.
Cronbach’s alpha is the most popular measurement to test the reliability of the variable measurement scales. So it will be applied first in this study to test the internal consistency reliabilities of each factor in marketing mix and customer satisfaction. Tavakol and Dennick (2011) stated that Lee Cronbach explored this measurement in 1951 to examine the internal consistency of a scale. The alpha coefficient is from 0 to 1 which is from the smallest value to the highest value. The higher value of alpha coefficient is the more reliable of the variable is. According to Santos (1999), the value of alpha coefficient which is acceptable is 0.7 but in some case this threshold value can be accepted if it is lower a bit compared with 0.7. In addition, the coefficient alphas must be greater than 0.50 minimum suggested by Nunnally (as cited in Spector, 1985).
After testing the reliability of the variables both dependent and independents, Exploratory Factor Analysis (EFA) will be used to figure out for some specific purposes.
According to Williams (2012) EFA can be used to reduce the number of variables which are irrelevant with other in the matrix. It also can examine the model and relationship between variables. The validity of a scale and instrument can be evaluated. EFA also can help the researcher explored the correlation between two or more variables. Furthermore, the analysis can be used to prove or disprove the previous hypothesis.
The researcher uses EFA when she wants to discover how many factors that influent the variables and to test whether variables are in one group (DeCoster, 1998). Items are grouped can be the reliable source to explain the constructs of this study. According to Laura J. Burton and Stephanie M. Mazerolle (2011) sampling adequacy measurement can examine if an item is correlated with other items in the EFA correlation matrix. Some value the researcher need to consider when conducting EFA:
– Before extracting the factors, some tests should be done to evaluate if the data is suitable for analyzing factors. This suitability of the data can be tested by Kaiser-Meyer-Olkin (KMO) (Kaiser, 1970). Netemeyer and Bearden (2003) stated that KMO can be accepted when it is above 0.60.
– In EFA analysis, Bartlett (1950) also provided the Bartlett’s test of Sphericity. This figure indicates if the matrix is specific. This number is accepted if the significant (Sig.) smaller than 0.5 (Hair, Anderson et al.1995a; Tabachnick and Fidell 2001).
– Rotational Method is used to figure out how many factors that can be applied to analyses. Furthermore, the method will test whether the variables relate to one factor or more. In the Rotated Component Matrix table, it is arranged from the highest factor loadings to the lowest factor loadings. Based on the rotation, the study can become more simplified.
In the study, correlation analysis is used to test the relationship between marketing mix and customer satisfaction. The bigger correlation is the stronger connection between the variables. The correlation coefficients are from -1 to 1. (Crossman, 2017). The variables are valid if they are arranged in this scale. Moreover, if the significant (Sig.) of each variable in this analysis is smaller than 0.05 it is accepted and in contrast.
Lastly, multiple regressions are applied to evaluate a linear relationship between independent variables and dependent variable. The purpose is to evaluate the importance of each element in marketing mix influencing on the customer satisfaction. (Sekaran & Bougie, 2010). The essential metrics are used to analyze the multiple regressions as the following descriptions:
The coefficient of determination (R2 statistic) is the percentage of the response variable variation that is demonstrated by a linear model. According to George & Mallery (2003) R square value is from 0 to 1 and the higher the R-squared is, the more the model suitable the data. According to Sekaran & Bougie (2010), the bigger value is the better variation in the dependent variables can be explained by the regression model.
Autocorrelation can happen between residuals. In this situation, in order to examine the autocorrelation existence, Durbin-Watson test is used (Gujarati, 2011). There is three cases of Durbin-Watson test result (d):
+ 1 < d < 3: no autocorrelation
+ 0 < d < 1: positive autocorrelation
+ 3 < d < 4: negative autocorrelation
F value shows the significance of the study in regression model. It examines if the independent variables will have significant influence on the dependent variable (Ghozali, 2011). If the F value has Sig. smaller than 0.05, there will be a significant association between independent variables and the dependent variable (Statistics solution, n.d.). Unless the sig. is smaller than 0.05 then the hypothesis will be rejected.
Beta coefficient is considered as a slope of the line. The beta coefficients can be negative or positive, and have association between a t-value and significance of that t-value (Statistics solution, n.d.).
3.5. Questionnaire design:
Basing on the study of Garg and Singh (2016): the relationship of the marketing mix and the customer satisfaction; the researcher will develop the list of questionnaires which matches the real situation. The list of questionnaire also is based on the survey questions of the MBA Bach Khoa group (Ho Tro SPSS, n.d), Adamu (2011) and Yoo et al. (2000).
This list has 35 questions in total which are relevant to eight elements: price, product, place, promotion, people, process, physical evidence and customer satisfaction. The list of questions which is relevant to the purchasing sport shoes among Tan Phuoc Khanh high school students, EIU students and residents at Phu Tan ward- Thu Dau Mot city.
ITEMS QUESTIONS SOURCE
Product The sport shoes I have bought recently have the best quality with its category. Garg and Singh (2016)
The trust of the shoes is very high. The shoes are designed attractively. The store offers many kinds of sport shoes. The store offers very good warranty policies for shoes. Price The sport shoe store has many ways of payment. Garg and Singh (2016)
The shoes were sold at the reasonable price. The price after dealing is totally good for the buyer. The store offers credit. Promotion The store advertises sport shoes via printed newspapers & magazines. Garg and Singh (2016)
The store also promotes the products via outdoor advertising. Facebook, Zalo are the tools to approach the customers. The store does advertising very regularly. The physical store conducts some activities to promote the shoes. Place The physical store is very attractive. Garg and Singh (2016)
The store always provides the sport shoes whenever the customer orders. The customers are easy to communicate with the store after purchasing shoes. People The employees and the staffs of the store always consult directly to the customers. Garg and Singh (2016)
The employees and the staffs are polite. The employees and the staffs have the deep understanding of the products. The employees and the staffs are very professional. Process The procedures to get the requirements are easy, quick and immediate. Yoo et al. (2000).
The products are delivered on time as promised. The store deals with the clients in confidentiality and privacy. The store handles seriously with my complaints. The store always cares about the time of the business transaction. Physical evidence The sport shoe store decorates very beautifully. Ho Tro SPSS (n.d)
The sport shoe store is very convenient: A/C, glass door, etc. The sport shoe store looks professionally. Customer
Satisfaction The customer is satisfied with the shoes he/she has purchased. Garg and Singh (2016)
The customer is satisfied with the price he/she has to pay to get the shoes. The customer is satisfied with the way that the store promotes the sport shoes. The customer is satisfied with the place where they purchase the product. The customer is satisfied with the salesperson of the store. The customer is satisfied with the procedures to get the product. The customer is satisfied with the decoration and equipment of physical store. CHAPTER 4: DATA ANALYSISThis chapter shows the empirical research and key findings of this study by analyzing data collection and figure out the results. It begins with the background information of the participants which help the reader have overview about the study. Descriptive statistics is used to show the means and the standard deviations as well as the standard errors of independent variables, dependent variables. Demographic information is analyzed first to see the reliability as well as the objectivity of the participants. Next, reliability and correlation are analyzed. The hypotheses testing which are developed by the researcher in the beginning are reported from multiple regression results. This part aims to summary the research results.
4.1. Descriptive dataRespondents’ demographic information
With 300 valuable respondents from 310 people who participant in the survey, the rate of response is up to 96,77%. Among the participants, female’s rate occupied 68,7% with 204 people. Male’s rate occupied nearly 31,3% with 94 respondents.
GENDER FREQUENCY PERCENTAGE (%)
Male 94 31,3%
Female 206 68,7%
Total 300 100%
The respondents of this research are from 16 years old to 40 years old. People from 16-18; 18-24; 24 and above occupied the same percentages in total which is 33,3%. The rate of the respondents who are employment is 33,3% and the rest is 66,6% who are students in high school and university.
AGE FREQUENCY PERCENTAGE (%)
16-18 100 33,3%
18-24 100 33,3%
24- Above 100 33,3%
Total 300 100%
EMPLOYMENT STATUE FREQUENCY PERCENTAGE (%)
Students 200 66,6%
Employment 100 33,3%
Total 300 100%
4.2. Reliability, correlation and multiple regression analysis4.2.1. ReliabilityIn this study, the Cronbach’s alpha value of 7Ps and customer satisfaction are demonstrated in the table following:
VARIABLE CRONBACH’S ALPHA VALUE NUMBER OF ITEM
Product 0.774 5
Price 0.880 4
Promotion 0.716 5
Place 0.808 3
People 0.667 4
Process 0.845 4
Physical evidence 0.740 3
Customer satisfaction 0.855 7
As the table illustrated that the Cronbach’s alpha value of each variable is bigger than 0.7. Therefore, the reliability of these variables is quiet high. The value of “people” variable which is 0.667 is smaller than 0.7 but it is still accepted according to the illustration of Nunnally (as cited in Spector, 1985). Thus, the researcher can use these variables to continue doing the following steps and figure out the result.
4.2.2. Exploratory Factor Analysis (EFA)
In this study, the EFA analysis result of the independent variables (7Ps) is demonstrated as the table below:
KMO AND BARTLETT’S TEST
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. ,803
Bartlett’s Test of SphericityApprox. Chi-Square 4,123E3
According to the table, the KMO is 0.803 and it is bigger than 0.6. So this figure of this study is accepted according to the previous researchers. It illustrated the data in this study is suitable for factor analysis. Each item in 7Ps correlated with other items of the model also. The Sig. of the Bartlett’s Test of Sphericity is 0 and it also less than 0.05. It demonstrated the significant of this study.
ROTATED COMPONENT MATRIX
1 2 3 4 5 6 7
PRICE2 ,893 PRICE4 ,846 PRICE3 ,829 PRICE1 ,535 PROCESS2 ,847 PROCESS3 ,788 PROCESS1 ,764 PROCESS4 ,743 PRODUCT4 ,886 PRODUCT3 ,876 PRODUCT2 ,686 PRODUCT1 ,657 PRODUCT5 ,428 PROMOTION1 ,717 PROMOTION4 ,713 PROMOTION5 ,652 PROMOTION3 ,647 PROMOTION2 ,626 PLACE2 ,866 PLACE1 ,829 PLACE3 ,663 PEOPLE3 ,769 PEOPLE2 ,747 PEOPLE4 ,634 PEOPLE1 ,473 PHYSICALEVIDENCE2 ,774
The table above shows the Rotated Component Matrix. In this table, the factor loadings are arranged from high to low as order: Price – Process – Product – Promotion – People – Place – Physical Evidence. Furthermore, the matrix illustrates that these variables just relate to one factor in their category.
KMO AND BARTLETT’S TEST
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. ,829
Bartlett’s Test of Sphericity Approx. Chi-Square 827,226
KMO of the customer satisfaction variable is 0.829. It is still valid because it is bigger than 0.6. Moreover, the Bartlett’s Test of Sphericity has the Sig. equal 0 so it can be seen from this table that this dependent variable can be used for analyzing in this study.
Each element is the factor of customer satisfaction is valid and the table show that each variable in this factor also just relates to each other in one component.
Model R R Square Adjusted R Square Std. Error of the Estimate Durbin-Watson
1 ,864a ,746 ,740 ,374 1,803
The R-square value in the study is 0.746 which significantly recommended that there is a very strong relationship between marketing mix and customer satisfaction. This indicates that marketing mix strongly effects on customer satisfaction. 7Ps in marketing mix share a variation of 74.6% of customer satisfaction. Durbin-Watson value in this case is 1.803 which is arranged 1 < d < 3. As a result, the model does not autocorrelation.
Model Sum of Squares df Mean Square F Sig.
1 Regression 119,861 7 17,123 122,712 ,000a
Residual 40,745 292 ,140 Total 160,605 299
F value in this Anova table has the sig equal zero. So it can be concluded that 7Ps strongly impacts on customer satisfaction. The significant of the study are also proved.
Model Unstandardized Coefficients Standardized Coefficients t Sig. Collinearity Statistics
B Std. Error Beta Tolerance VIF
1 (Constant) -1,646 ,225 -7,328 ,000 PRODUCT ,134 ,042 ,100 3,178 ,002 ,876 1,142
PRICE ,114 ,032 ,130 3,563 ,000 ,648 1,544
PROMOTION ,017 ,039 ,013 ,433 ,665 ,915 1,093
PLACE ,111 ,031 ,120 3,535 ,000 ,759 1,318
PEOPLE ,401 ,045 ,308 8,909 ,000 ,725 1,380
PROCESS ,138 ,032 ,145 4,253 ,000 ,749 1,334
PHYSICALEVIDENCE ,481 ,039 ,431 12,450 ,000 ,724 1,382
The table above illustrates the beta value and the Sig. of beta also. From the table, we can clearly see that all of the elements in marketing mix have the Sig. is smaller than 0.05 except “promotion” variable. So this variable and the hypothesis that relates to promotion factor must be rejected.
4.3. Summary of the research results
The main purpose of this thesis is to examine the effects of marketing mix on customer satisfaction in the sport shoe industry today. In particular, the study aims to figure out the relationship between each element in marketing mix and customer satisfaction.
The proposed hypotheses were summarized in the table below:
The result of the hypothesis testing is demonstrated in the table below:
H1: Price affects customer satisfaction. Accepted
H2: Product affects customer satisfaction. Accepted
H3: Place affects customer satisfaction. Accepted
H4: Promotion affects customer satisfaction. Rejected
H5: Process affects customer satisfaction. Accepted
H6: People affect customer satisfaction. Accepted
H7: Physical evidence affects customer satisfaction. Accepted
CHAPTER 5: DISCUSSION – CONCLUSION – RECOMMENDATION
The effects of marketing mix on customer satisfaction have been discussed in many previous studies. These studies which research about the sport shoe industry are few. In this study as well as in this chapter, the impact on customer satisfaction of marketing mix will be stated clearly which is investigated in sport shoe field. This chapter contains three main parts which are discussion, conclusion and recommendations.
5.1. Summary of the study
This study examines the relationship between marketing mix and customer satisfaction in sport shoe industry. So the researcher tries to figure out the impact on the dependent variable of the independent variables. In particular, seven dimensions of marketing mix which are price, product, place, promotion, people, process and physical evidence are deeply considered to answer the research question: What is the most significant factor of 7Ps that impacts on customer satisfaction?. To be more specific and objectively, the researcher conducted the survey with variety group of people. The respondents in this study have different demographic features. It means the study can have the best result as well as the best objectivity. In addition, 300 people are taken part in survey for this research. The study applied quantitative research methods to analyze the collected data in order to get the final goal of the study.
5.2. Summary of the key findings and discussionThe marketing mix has been deeply studied for years. The customer satisfaction also has been intensively investigated. There are few studies which examine that relationship between marketing mix and customer satisfaction, especially in the sport shoe industry. Thus, the key findings of this research can be considered as a contribution for the next study in the future.
There are three main key findings in this research. First of all, from the result of analyzing the data, it can be stated clearly that there is the significant impact on customer satisfaction of marketing mix which contains seven different elements. It means that each factor in marketing mix has strongly effect on customer satisfaction. In order words, the customers are satisfied with the sport shoe item that they purchase when the store can apply the marketing mix programs effectively, logically and scientifically.
The promotion factor hardly affects customer satisfaction. All most all the respondents stated that they are not satisfied with the promotion of the store where they purchase the sport shoe item. Moreover, the result from the data proved that promotion does not relate to the satisfaction of the customers. In conclusion, it is found that there is no relationship between promotion and customer satisfaction. Therefore, the hypothesis: Promotion affects customer satisfaction is rejected.
The study has figured out the significant effects on customer satisfaction of each element in the research. There is the difference between the significant effects on customer satisfaction of each element in marketing mix. These factors are ranged from the highest effect to the lowest effect as order: physical evidence (0.481), people (0.401), process (0.138), product (0.134), price (0.114) and place (0.111).
Physical evidence factor seems to be the most important element which has the strongest effect on customer satisfaction. People can be satisfied when the store that they purchase sport shoes has enough equipment and well-decorated. People tend to prefer the store which is fully equipped and furnished. Employee’s behavior plays a vital role in affecting customer satisfaction. Their attitude and their understanding about the sport shoe product directly affect the satisfaction of the buyers. Everyone wants to be treated politely and faithfully especially the one who intends to use your product or service. Customers are also satisfied when the sport shoe store offers the good process, product, price and place.
5.3. Significance and Practical Implications of the studyThe meaning of the study is to implement the deeply relationship between marketing mix and customer satisfaction. In details, the association of each dimension in marketing mix and the satisfaction of customer are clearly figured out. In sport shoe industry, these findings contribute to the improvement and development for marketing and practical strategies. They would be increase customer satisfaction as well as company sales and revenue. The marketers can consider these finding to maximize the customer satisfaction based on the marketing activities. From the outcome of the research, the marketers can know exactly which element in marketing mix should be spent more effort and investment to maximize profit and achieve the best result.
5.4. Limitations and suggestions for future research
Although the research achieves the significant result which is much reliable and objectivity, the scope of the study is just focus on people in the small areas which is insides Thu Dau Mot city. For the next researches, it is suggested conducting in a larger area so that they can be caught up with the trend of the market.
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