Tittle : Largest Retail Competition in Indonesia
Source : Journal of International Retail
Author: Sendy Thahir
Year: 2009
The research objective is to measure the level of customer satisfaction on Indomaret and Alfamart, and identifying whether the strategic location and discounted price have a relationship with customer satisfaction or not.
To analyze the data there are several statistical tests need to be conducted. From An Overview of SPSS for Windows Step by Step book. The researcher can learn to analyze the data obtained for the research purpose. There are many statistical tests that can be used to obtain the findings such as the frequencies, descriptive, cross tabulation, chi-square, one way ANOVAs, regression, factor analysis starting from extraction. To achieve the objectives, findings and hypothesis test, the researcher just need to use several statistical tests, such as frequencies to obtain the demographic profile of the respondents. Means, to obtain the number of means of the variables to obtain the level of customer satisfaction numbers, because the researcher need to compare the level of customer satisfaction on both of service category, Indomaret and Alfamart. The use of cross tabulation and chi square techniques will be the importance part to examine whether there is a significant level on both of the variables.
The level of customer satisfaction of Indomaret are 2, 32 and for Alfamart are 2, 37. Show that most of the respondents are more satisfied with Indomaret rather than Alfamart.
The research result that the discounted price and strategic location have relationship with the customer satisfaction.
Both of Indomaret and Alfamart performance were very good, although there is still the room for improvement. By offering discounted price to the customer, it will influence the customers to come again to the places, moreover, Alfamart and Indomaret have to consistently offer the discounted price product every period although they have to give another discount or bazaar during the holiday event, whereas some people spend their time to relax, shopping or recreation.
“Consumers may also judge the price paid relative to the consistency of the performance of the product or service” (Herman, A, Xia, L, Monroe, Kent B, Huber, F 2007)
By concentrating more on the convenience of shopping, Alfamart and Indomaret can offer the free park for the minimum purchase. Security and camera would really help for the safety and conveniently. The products that are arrange in a proper way, selecting the product and return the product to the factory if the expired date that will come. “When employees' beliefs about what they are supposed to be accomplishing on the job and how well they are doing are accurate, they behave more effectively” (Gilbert, G Ronald 2000). The service can still be improved by giving the employees an additional training programme to increase their performance.
“Negative perceptions of service may ultimately damage the reputation and profitability of the business”.(Hensley, Rhonda L & Sulek, J 2007). To avoid the negative perception, the service must be improved.
By recognizing the factors that influence the level of customer satisfaction, the management, marketers and entrepreneurs can have the research result for their future strategies and future improvements.
Chapter 1
The level of customer satisfaction of Indomaret are 2, 32 and for Alfamart are 2, 37. Show that most of the respondents are more satisfied with Indomaret rather than Alfamart.
The research result that the discounted price and strategic location have relationship with the customer satisfaction.
Both of Indomaret and Alfamart performance were very good, although there is still the room for improvement. By offering discounted price to the customer, it will influence the customers to come again to the places, moreover, Alfamart and Indomaret have to consistently offer the discounted price product every period although they have to give another discount or bazaar during the holiday event, whereas some people spend their time to relax, shopping or recreation.
“Consumers may also judge the price paid relative to the consistency of the performance of the product or service” (Herman, A, Xia, L, Monroe, Kent B, Huber, F 2007)
By concentrating more on the convenience of shopping, Alfamart and Indomaret can offer the free park for the minimum purchase. Security and camera would really help for the safety and conveniently. The products that are arrange in a proper way, selecting the product and return the product to the factory if the expired date that will come. “When employees' beliefs about what they are supposed to be accomplishing on the job and how well they are doing are accurate, they behave more effectively” (Gilbert, G Ronald 2000). The service can still be improved by giving the employees an additional training programme to increase their performance.
“Negative perceptions of service may ultimately damage the reputation and profitability of the business”.(Hensley, Rhonda L & Sulek, J 2007). To avoid the negative perception, the service must be improved.
By recognizing the factors that influence the level of customer satisfaction, the management, marketers and entrepreneurs can have the research result for their future strategies and future improvements.
Chapter 1
Problem Definition
1.1 Company profile :
Alfamart
PT Sumber Alfaria Trijaya (SAT) or Alfamart is a national company that move in trading and retailing services that provide the basic and daily needs with the area of the building less than 250 m². The company was built on 27 June 1999 and the main office was located at Jl. MH. Thamrin No.9 Cikokol, Tangerang.
Nowadays we can see, there are more than 1750 Alfamart mini mart in Indonesia (December 2006)
Alfamart was granted the certificate of ISO 9001:2000 and the MURI Record at 22 January 2007 at Shangri La Hotel Jakarta.
ISO (International Organization for Standardisation) is the institution that consists of organizations from the entire world that responsible to fulfil the international standard on every nation company.
With the acceptance of ISO certificate meaning Alfamart have successfully practice the international standard in every unit of their enterprise and show that the company are capable to compete on international scale.
MURI (Museum of Indonesian World Record) is the first institution in Indonesia that specifically collecting the record data in Indonesia. On this cases, MURI gives the appreciation for Alfamart because the company have successfully be the first national company that successfully be the first mini mart network in Indonesia that successfully obtain the ISO certificate.
Alfamart aims to deliver the most desired satisfaction by focussing with the product and services quality. With the motto “satisfy purchase, exact prices“(Alfamart 2007)
Indomaret
Indomaret is the mini mart network that provides the basic and daily needs with the area of shop less than 200 m². The company was Manage by PT Indomarco Prismatama that was built on November 1988 and now the main office was located at Ancol, Jakarta.
With the total of more than 2425 mini mart that spread in Indonesia. Indomaret can be found everywhere at office building, house area and public facility. The company was strengthened by the company under the flag of INTRACO that is Indogrosir, Finco, BSD plaza and Charmant.
Indomaret was granted “Franchise Company 2003” by Megawati Soekarnoputri, because on 1997, the company develop the first franchise business in Indonesia, after the company was tested with more than 230 shops.
Indomaret aiming to deliver the most desired satisfaction for the customer in the society, with the motto “Easy and Economic” (Indomaret 2007)
1.2 Background to the problem
-As the occurrences of Alfamart and Indomaret, which of these service categories will the customers more satisfy?
We know that the mini mart can be found everywhere at our surrounding area in example at our house area, office, public facility area and any other places.
Both of the mini mart offer the similar basic and daily needs for every of the customer and targeted the same segment of customer in the society such as family.
The researcher agrees that most of Indonesian know that both of the mini marts are standing at the top in the mini mart competition. Starting from the town until the small village, the mini mart can be found. Sounds unfamiliar, when one of the mini mart, take Indomaret/Alfamart as an example, opened up a new shop in an area, only the matter of time, Alfamart/Indomaret will open their shop near, around, beside or across the Indomaret. We take Greenville area at West Jakarta for example; Alfamart was built beside the Indomaret.
“Consumerism means getting what you can and luxury is for someone else”. (Taylor, C 1995)
This means there is also possibility that the consumers go to the mini mart for their needs and they don’t care about which mini mart they would go.
If we do the research more detail, actually there will be reason about the preference of the consumer choosing one of the mini marts and people evaluation might be different, there will be question, what factors can be measure in deciding which mini mart to be chosen?
1.3 Importance of the problem
Indomaret VS Alfamart
For this recent 4 years both of the mini mart industries are competing againts each other, we can see it by the occurrences of Indomaret and Alfamart in many places, take Indomaret/Alfamart as an example, opened up a new shop in an area, only the matter of time, Alfamart/Indomaret will open their shop near, around, beside or across the Indomaret. We take Greenville area at West Jakarta for example; Alfamart was built beside the Indomaret.
Both of the labels are the intensive players in mini market competition, beside Indomaret and Alfamart there are also many players in the mini market retailing services, but at the moment Indomaret and Alfamart are dominating.
Source: Pikiran Rakyat
1.4 Various dimensions of the problem
The strategic location, shelves that are arrange in order with so many variant of the product, the easy payment with the cashier, Full air conditioning room, competitive prices and the benefits offered. No doubt that people would be grateful to come to mini market.
By the occurrences of Indomaret and Alfamart the society are helped to obtain their daily needs easier and more convenient.
The mini marts also have to compete against each other to obtain their loyal customer in order to compete in the competitive market.
And the next question will be as the occurrences of Indomaret and Alfamart which one will be the customer preference?
1.5 Approach to the problem
There are glimpse of journals that mention about the customers satisfaction in any of the industry. The researcher are analyzing ten journals in order to approaches the similar problem in the research. Some statements about the explanation of the journals are taken in order to accomplish the research. More brief explanation will be explained in the next chapter.
Research Objectives
When people need something as their daily needs, they will directly goes to the mart to obtain what they need and wants. They might be going to the mart, super market, hyper mart and traditional mart or even they will go to small shop, to obtain what they need. The first specific objectives of the research is to compare the level of customer satisfaction on both of the mini mart, that is Alfamart and Indomaret,
The second research objective will be determining whether the discounted price offer by the mini mart will affect in influencing customer satisfaction.
Price is an important element in consumers' purchases (Hermann, A, Xia, L, Monroe, K, B & Huber, F 2007). The preference of the similar service will highly be dependant on the price offered by the mini mart, so that is the reason why the mini marts are doing the price wars by offering their own benefit and discounted price.
The third research objective will be determining whether the strategic location on both of the mini mart will affect in influencing customer satisfaction.
Hypotheses
RQ: Is there any relationship with the discounted price offers with customer satisfaction?
H0: There is relationship with the discounted price offers and customer satisfaction at Indomaret
H1: There is no relationship with the discounted price offers and customer satisfaction at Indomaret
H2: There is relationship with the discounted price offers and customer satisfaction at Alfamart
H3: There is no relationship with the discounted price offers and customer satisfaction at Alfamart
Adopted from the journal “Benchmarking operational performance: the case of two hotels” (Parkan, C 2005)
Chapter 2
Literature Review
2.1 previous studies that addressed similar problem
There are glimpse of journal that mentioning about customer satisfaction at the emerald insight official website. Although there are alot of journals that explaining the customer satisfaction, the one that addressed the similar problem is
The effects of obtaining one's preferred service brand on consumer satisfaction and brand loyalty journal by Audhesh K. Paswan, Nancy Spears and Gopala Ganesh.
“Consumers are not able to buy their first choice and settle for another brand option” (Paswan, A, K, Spears, N & Ganesh, G 2007)
‘The brand switching decision is made before the purchase and the chosen brand becomes the first choice’. (Paswan, A, K, Spears, N & Ganesh, G 2007)
The journal explain that if the preferred brands are not available, the customers are more likely to settle to another brand for example, if the preferred dentist, doctor, room hotel, or shop are unavailable, the customer will take an alternative way by looking for another things that can fulfilled their needs.
‘A possible explanation could be that brands with higher levels of loyalty may have higher consumer involvement and expectations’ (Paswan, A, K, Spears, N & Ganesh, G 2007)
“The relationship between consumer satisfaction and brand loyalty has been investigated in the extant literature” (Paswan, A, K, Spears, N & Ganesh, G 2007)
The product or services that exceed the customer satisfaction will really influence them to be loyal with one of the product. As most of journals explain that the dissatisfaction leads to the negative word of mouth, they have the tendency to tell more people about their bad experience rather than their good experience.
“Existing literature also suggests that dissatisfaction leads to complaining behavior and negative word-of-mouth” (Paswan, A, K, Spears, N & Ganesh, G 2007)
‘An effective way to satisfy customers during service encounters is to provide them with pleasing experiences they do not expect’ (Paswan, A, K, Spears, N & Ganesh, G 2007)
The journals explain that to obtain the customer satisfaction more effectively, the service must be served in a different way that they experiences, this can also be called as a spontaneous delight.
2.2 previous studies that have been carried out
Although there are many journals used and analyzed for the research purposes, all of them have some differences on their objectives, methodology and findings. The first journal by G Ronald Gilbert explains about measuring internal customer satisfaction, the methodology for the journal was the author create the 7 likert scale of measurement starts from 1 (Strongly Disagree) to 7 (Strongly Agree). Zero was also included as the no opinion answer. The questionnaire asked 15 questions about the service quality. The objective of the journal is to analyze the performance of the organization. The researcher can tell about the finding that is “employees working in the focal groups will be more positive than the ratings attributed to them by their internal customers.” (Gilbert, G, Ronald 2000)
This means by putting the members into a group, they will perform in a better way.
The journal helps the researcher to realize that the performance of the staff will influence the customer satisfaction.
Another journal from Andreas Herrmann, Lan xia, Kent B Monroe and Frank Huber that explain about The influence of price fairness on customer satisfaction: an empirical test in the context of automobile purchases.
“People's perceptions of how much “effort” the decision aids exert in providing the recommendations influenced their satisfaction regardless of what options were recommended” (Herrmann, A, Xia, L, Monroe, Kent B & Huber F 2007).
This means the price fairness will directly influence the preference and customer satisfaction.
The methodology of the research was surveying 246 of car buyers about their fairness perception and their satisfactions, the findings show that the perceptions of the price directly influence the customer satisfaction. The objective of the journal is to determine whether the price fairness will attract more customers or not. The journals really help the researcher to analyze that the price fairness will really influence the customer satisfaction.
Another journal from Celik Parkan, Benchmarking operational performance: the case of two hotels. The purposes of the study is to investigate the performance of the hotels in the big city, their methodology called Operational Competitiveness Rating Analysis (OCRA), they are comparing the both of the hotel in the United States. The purposes why do they use OCRA was because there is the chance that the performances of the hotels are above the standard
The findings of the research are we can determine the strength and weaknesses of the performance of both hotels, starting from the rooms, interior, toilet, food and beverages. ‘The fact is that tourists tend to spend more on food and beverages rather than the type of business travellers staying at Hotel’. (Parkan, C 2005)
‘The changes needed in the consumption of resources and generation of revenues so that the overall performance improves to the desired level’. (Parkan, C 2005). The hotels are competing each others, that is why the settlement of the cost must be analyzed further. The statement is similar with the previous journal have explained, that the price fairness will really influence the customer satisfaction.
Rhonda L. Hensley, &Joanne Sulek journal about Customer satisfaction with waits in multi-stage services tells about the multiple stages service for the affectivity of the operation. The purpose of the research is to examine the perception of the customers with the multistage services. The methodology was administered the questionnaire during the course of the meal by the restaurant employees, the author select the restaurant that have the credibility in the city, the questionnaire consist of 44 question 22 question ask about the performance and 22 question ask about the expectation from the customer. The findings was that waiting time really influence the customer satisfactions, in example
1. ‘Reported that customer satisfaction with service in a fast-food restaurant declined as actual waiting time increased’. (Hensley, Rhonda L & Sulek, J 2007)
‘Delays decreased customer satisfaction, filling empty waiting time with distractions reduced anger and uncertainly experienced by customers, Customers may feel anxious or frustrated and may become dissatisfied with the service’. (Hensley, Rhonda L & Sulek, J 2007)
Running a restaurant must also considering about the convenient of the customer, by concentrating of the efficient time, we believe that the customer will be more satisfied because they don’t have the chance to be bored.
The journal helps the researcher to understand that the sincere service will influence the customer satisfaction.
Waiting time influence on the satisfaction-loyalty relationship in services journal by Frédéric Bielen and Nathalie Demoulin explain about waiting time impacts on service satisfaction and customer loyalty. The objective of the research is that the authors want to investigate how the customers will maintain to be loyal or not. The finding is that ‘the results confirm that waiting time satisfaction is not only a service satisfaction determinant’. (Bielen, F & Demoulin, N 2007). Many factors will influence the customers satisfaction, as most of the journals explain, starting from the service, availability, location, price and etc. the questionnaire was distributed at Belgian health industry for 946 respondents.
Waiting time duration information influences the affective aspect and the acceptability of the wait, when it is an average or long wait. (Bielen, F & Demoulin, N 2007). The customers expect very much for the services given by the employees, when they feel they are neglected, they will be disloyal to the preferred services.
Journal from Chris Taylor explains about the importance of customer satisfaction in the business world. The journals explain about four factors that influence customer expectation that is ; “Comparative world peace, Communications and travel, Technology (which makes everything else possible), Government and inter-government legislation with particular reference to the removal of trade barriers, and other man-made forces which operate against open market competition”.(Taylor, C 1995). The journals are summarized from the AIC conference in London, it don’t tell about the objective or methodology, although it tells about factors that influence customer expectation.
A process based view for customer satisfaction by Moreno Mufatto and Roberto Panizzolo tells about the importance about customer satisfaction for firms competitiveness. “The success of a customer satisfaction plan requires an explicit and real commitment”. (Mufatto, M & Panizzolo, R 1995). The commitment starts from the trust and continued by achieving their expectations and future expectations. If it is done, customer satisfaction will be achieved. No objective and methodology mentioned.
2.3 Marketing Theory
The research purpose is to research the comparison of customer satisfaction on Alfamart and Indomaret. There are several independent variables to measure the customer satisfaction that is adopted from journal of services marketing, “The effects of obtaining one's preferred service brand on consumer satisfaction and brand loyalty”
The dependant variable will be customer satisfaction and the independent variable will be services, price, repeat purchase, avid promoter, changes in live event.
Customer satisfaction = service levels + price + brand loyalty + repeat purchase + changes in live event.
The variables that will be used are service levels, price, brand loyalty and repeat purchase.
Customer’s satisfaction in general is the satisfaction that obtain by the customers when they deal with the companies or an organization, the customers satisfaction are very important in the success of every of the organization, because the satisfied customer will have the tendency to purchase the product again, where as the dissatisfied customer will tell more about the dissatisfied things to other people. The factors of customer satisfaction may be varying. “The study of satisfaction begins with examining potential causes of dissatisfaction” (Lassar, W, Mittal, B & Sharman, A 2005) by determining the cause of dissatisfaction with improving the service quality as expected by the customers, the customers satisfaction can be achieved.
“Customer satisfaction is considered to be one of the most important competitive factors for the future and one of the best indicators of a firm’s future profits”. (Muffato, M & Panizzolo, R 1995). Customer satisfaction study have been learned and analyzed by most of the organization for the success of the organization, the achievement of number of loyal customers will be the assets for the increase of demand for future profits.
The services should be offered politely, respect, friendly to every of the customer, when the customers ask something or have the complaint about the product / services, the employees have to deal with the customers in an appropriate manner to have the mutual understanding to solve the problem.
Brand loyalty is also the part of customer satisfaction where the satisfied customer will be loyal to the brand offered. “Brand loyal consumers might purchase a competing brand when the preferred (first choice) brand is not available” (Paswan, A, K, Spears, N & Ganesh, G 2007). A moderating effect of waiting time satisfaction on the relationship between service satisfaction and loyalty must be characterized by significant interaction between service and waiting time satisfaction (Bielen, F & Demoulin, F 2007). This means the satisfied customers tend to be loyal or more loyal to one of the preferred brand or services. This can be fulfilled by serving the customers in an appropriate ways without waiting the customer time.
The product qualities that match to the prices of the product and the discounted price offers will result the customer preference to have the product, because the product price are reliable. “consumers may also judge the price paid relative to the consistency of the performance of the product or service” (Herman, A, Xia, L, Monroe, Kent B, Huber, F 2007) consumers always compare whether the product or services obtained are the same, lower or higher with the amount of money they sacrifice, if the customers thought that the money that they had already sacrificed are not fit with the services or product that they had already obtained, they will be dissatisfied, this must be prevented with the fit prices.
When the customers are satisfied with the product or services, there will be the tendency for them to come and purchase the product again.
The variables are adopted from (Paswan, A, K, Spears, N & Ganesh, G 2007)
Chapter 3
Research design
3.1 Research approach
There are three types of research design that is descriptive, exploratory and causal research design. On measuring the comparison between the levels of customer satisfaction on Alfamart and Indomaret the researcher will use the descriptive research design, because the descriptive research can provide “an accurate snapshot of some aspect of the market environment”. (Aaker, David A, Kumar, V & Day, George S, 2004 p.76) In example: consumer evaluation of the attributes of the services versus competing services.
3.2 Information needs
To obtain the information the researcher distribute 100 of questionnaires for Inti & Pelita Harapan students. The answers from 100 opinion are used to represent the research. Before distributing the questionnaires the researcher ask the respondents whether they have already experienced shopping at Alfamart or Indomaret. If they do, they’ll have the opportunities to fill up the questionnaire, if they dont the researcher will ask the other person to fill up the questionnaire distributed.
3.3 Secondary data
Secondary data are the data that were collected by persons or agencies for purposes other than solving the problem at hand. (Aaker, David A, Kumar, V & Day, George S, 2004 p.80)
The secondary data can be obtained from journals, internet web sites and books.
The secondary data for the research will be obtained from journals (www.emeraldinsight.com), that is
Journals tittle/Author
“The Case for Customer Satisfaction”
Chris Taylor
“Measuring Internal Customer Satisfaction”
G Ronald Gilbert
“Competing in the Service Sector-Entrepreneurial Challenge”
Amy Risch Rodie and Charles L. Martin
“Benchmarking operational performance: the case of two hotels”
Celik Parkan
“The effects of obtaining one's preferred service brand on consumer satisfaction and brand loyalty”
Audhesh K. Paswan, Nancy Spears, and Gopala Ganesh
Measuring customer-based
brand equity
Walfried Lassar, Banwari Mittal and Arun Sharma
Customer satisfaction with waits in multi-stage services
Rhonda L. Hensley and Joanne Sulek
The influence of price fairness on customer satisfaction: an empirical test in the context of automobile purchases
Andreas, Herrmann Lan Xia, Kent B. Monroe and Frank Huber,
Waiting time influence on the satisfaction-loyalty relationship in services
Frederic Bielen & Nathalie Demoulin
A process-based view for customer satisfaction
Moreno Muffato and Roberto Panizzolo
Pikiran rakyat Internet Sites
Consumer Behaviour book by Michael R. Salomon.
Marketing Research book written by Aaker, Kumar and Day.
An Overview of SPSS for Windows step by step. Students Handbook
3.4 Primary data
The primary data will be obtained by spreading the questionnaires to 50 students at Inti College Indonesia and 50 students at Pelita Harapan University. With the ratio 1 : 1. The purposes of distributing the questionnaire in this two university was because there are many students that come from different places that can filled up the questionnaire based on their opinion. Another reason is the journals are also using questionnaire to obtain their primary data.
3.5 Scaling technique
The researcher will use the Nominal measurement to determine the sex, ordinal measurement to identify preference, Ratio measurement to measure the age and incomes. The researcher will use 4 points degree of measurement as the interval measurement. The first point means strongly agree, the second means agree, the third means disagree and the fourth means strongly disagree. Using the degree of measurements has been popularly used by most of journals to obtain the more accurate feedback by giving the scaling measurement questions. The scaling technique will be used in variables question where the respondent can choose any of the answer which appropriate to their opinion.
3.6 Questionnaires development and pre testing
The researchers create a page of questionnaire and copied it to twenty copies for the pre testing and continue with eighty copies. During the pre testing the respondents know exactly well how to filled up the questionnaires although some of them miss some part by skipping the question because they don’t really read the questions well. These cases are anticipated well by giving an “Arrow” for the question that the respondent usually missed to fill up. Most of the respondents are very easy to approach, but some of them refused to fill up because they are busy with their own assignment and they are getting bored that marketing students always ask them to fill up the questionnaires. The hypotheses are adopted from the journal “Benchmarking operational performance: the case of two hotels, but there are no questions adopted from previous research, because the questionnaire created can already fulfill the objectives.
3.7 Sampling Technique chosen and justifications
The researcher will use the non probability sampling method as the sampling method, because sampling frame is not exist. “Sampling frame is a list of population members used to obtain a sample”.(Aaker, David A, Kumar, V & Day, George S, 2004 p.376). This can be the list of college students, the list of newspaper subscribers, or the list of fitness member.
The population will be all people that go to Alfamart and Indomaret.
The sample size will be 100. The researcher is distributing those amounts of questionnaires because the research is for academic purposes only, if the research is for business purposes, the researcher will distribute bigger amount of questionnaires.
50 questionnaires will be distributed for Inti College Indonesia students and 50 for Pelita Harapan University.
The sampling procedure will be the quota sampling and snowball sampling, because the researcher limited 100 of respondents to fill up the questionnaires, by dividing 50 respondents from Inti College Indonesia and 50 respondents from Pelita Harapan University because there might be a chance for the people that study in different universities have their own point of view and the researcher need someone helps to spread the questionnaires.
The data from primary sources will be collected by self administered questionnaires, because the researcher will spread the questionnaires to the respondent without explain to get the information.
(Aaker, David A, Kumar, V & Day, George S, 2004)
Data Analysis
3.8 Methodology
To analyze the data there are several statistical tests need to be conducted. From An Overview of SPSS for Windows Step by Step book. The researcher can learn to analyze the data obtained for the research purpose. There are many statistical tests that can be used to obtain the findings such as the frequencies, descriptive, cross tabulation, chi-square, one way ANOVAs, regression, factor analysis starting from extraction. To achieve the objectives, findings and hypothesis test, the researcher need to use several statistical tests, such as frequencies to obtain the demographic profile of the respondents. Means, to obtain the number of means of the variables to obtain the level of customer satisfaction numbers, because the researcher need to compare the level of customer satisfaction on both of service category, Indomaret and Alfamart. The use of cross tabulation and chi square techniques will be the importance part to examine whether there is a significant level on both of the variables, if there are; there are the relationships between both of the variables.
Correlation test will also be used to confirm the result from the chi square test.
4.1 Respondent Demographic Profile
Table 4.1 Demographic Profile
Sources: Survey
The researcher achieved the number of 100 of questionnaire targeted to the respondents at Inti College and Pelita Harapan University that is 50 :50. There are 43 male and 57 Female that filled up the questionnaires.
From the total of the respondents there are 64 students that their age ranging from 16-19, 34 students that their age ranging from 20-25 and there are 2 students that their age are above 25. There are 3 types of allowance that stated in the questionnaire distributed and there are 46 people that have 300,000-500,000 categories level of allowance, 24 people that have 500,001-1000, 000 level of allowance and 30 people that have 1,001,000 level of allowance.
4.2 Findings
Statistics
Table 4.2
The first objective of the research is to compare the level of customer satisfaction on Indomaret and alfamart, the researcher add on the mean on each of every variables, and divide it with the total number of variables. In example:
Indomaret
Service levels (2, 13+2, 33)/2 = 2, 23
Prices (2, 58+2, 41+2, 1)/3= 2, 36
Repeat Purchase (2, 69+2, 24)/2=2, 47
Brand Loyalty (2, 28+2, 18+ 2, 18)/3=2, 21
Customer satisfaction = (2, 23 + 2, 36 + 2, 47 + 2, 21)/4= 2, 32
Alfamart
Service levels (2, 17+2, 34)/2 = 2, 26
Prices (2, 5+2, 5+2, 32)/3 = 2, 44
Repeat Purchase (2, 66+ 2, 38)/2 = 2, 52
Brand Loyalty (2, 32+2, 31+ 2, 08) = 2, 24
Customer satisfaction = (2, 26+ 2, 44+ 2, 52 + 2, 24)/4= 2, 37
The differences of the levels were only 0, 50 this show that the level of customer satisfaction of Indomaret and Alfamart are similar. The average result were the respondents are likely to be agree or satisfied with the services given by Indomaret and Alfamart
I prefer to go to Indomaret because the locations are nearer to my home * overall i feel satisfied with indomaret Crosstabulation
Based on the table above, we can conclude that the strategic location will influence the customer satisfaction, prove with the significant level are below 0,050. This can be confirmed by 36, 1 % that is weak.
We can also prove it by the increase the number of alfamart and Indomaret to more than 2000 mart, and all of them are opened in a short distance among each other, so we can conclude that both of the minimart are competing to obtain the sales at the place they opened up the branch mart. The strategic location offered will influence more people to come rather than they have to walk by foot in a far distance or by vehicles.
The other objectives will be explained more in the hypothesis testing
4.3 Hypothesis testing
Research Hypothesis
RQ: Is there any relationship with the discounted price offers with customer satisfaction?
H0: There is relationship with the discounted price offers and customer satisfaction at Indomaret
H1: There is no relationship with the discounted price offers and customer satisfaction at Indomaret
H2: There is relationship with the discounted price offers and customer satisfaction at Alfamart
H3: There is no relationship with the discounted price offers and customer satisfaction at Alfamart
Adopted from the journal “Benchmarking operational performance: the case of two hotels” (Parkan, C 2005)
The second findings will be determining whether the discounted price have relationship with the customer satisfaction or not?
The discounted price offer in the advertisement on food and beverages items will influence me to go to Indomaret * overall i feel satisfied with indomaret Crosstabulation
Based on the table above, we can conclude that discounted price offer on food at Alfamart have no relationship with the customer satisfactions; prove with the significant level are above 0,050. this can be confirmed by 18,3 % that is so weak.
People would rather prefer the product or services that offer the cheaper or discounted price. With the cheaper price offered on food and beverages offered by alfamart and Indomaret, the customer will have the higher tendency to come to the places. “Consumer may also judge the price paid relative to the consistency of the performance of the product or service” (Herman, A, Xia, L, Monroe, Kent B, Huber, F 2007). consumers always compare whether the product or services obtained are the same, lower or higher with the amount of money they sacrifice, if the customers thought that the money that they had already sacrificed are not fit with the services or product that they had already obtained, they will be dissatisfied, this must be prevented with the fit prices.
With the result that had been researched, the researcher rejects the H1 and H2 statements; because the discounted price offered are related with customer satisfaction at Indomaret although at Alfamart the discounted price offered are not related with customer satisfaction.
4.2.1. Limitations
Change in live event will not be used as the variables for the research of both of the mini mart, even though there is the changes in the live event, people would still go to the store or mart to obtain what they need as their needs. Changes in live event will be used when the researchers are researching about the hotel or hospital, whereas when there’s a change in live event people will come to the places.
Not all students willing to fill up the questionnaires, some students refused to fill up the questionnaire because they are getting bored that marketing students always ask them to fill up the questionnaires, but the target of 100 respondents had been fulfilled.
4.2.2. Future Improvements
The researcher has to create the questionnaire in two languages, English and Indonesia, so the researcher can just give the Indonesian language question for those who couldn’t understand English language, so the researcher don’t have to spend more time looking for the people who are able to understand English language.
The researcher will also give them a reward so all of them will be very happy to fill up the questionnaires, hopefully by giving them a reward, such as pen, pencil or snacks, the respondents will approach the researcher to fill up the questionnaires.
Chapter 5
5.1 Conclusion
From the research estabilished, the level of customer satisfaction of alfamart are lower than indomaret, proved with the score of customer satisfaction on alfamart was 2, 37 and indomaret was 2, 32.
The strategic locations are related with the customer satisfaction at Indomaret and Alfamart.
The hypotheses test shows that we can conclude that discounted price offer on food at Indomaret are related with the customer satisfaction, prove with the significant level are below 0,050.
Although at Alfamart the discounted price offer on food and beverages item are not related with the customer satisfaction.
The researcher has achieved the objectives that are to measure the level of customer satisfaction, identify whether the discounted price offer and strategic location have a relationship with the customer satisfaction or not. By this research the people who need the information can get information about the company. “The understanding that services are somewhat unique and that their unique characteristics provide challenge to upper management to marketers and to entrepreneurs “(Rodie, A, R & Martin, C, L 2001)
5.2 Recommendation
There are several recommendations based on finding and several recommendations based on the researcher analysis. Both of Indomaret and Alfamart performance were very good, although there is still the room for improvement. By offering discounted price to the customer, it will influence the customers to come again to the places, moreover, Alfamart and Indomaret have to consistently offer the discounted price product every period although they have to give another discount or bazaar during the holiday event, whereas some people spend their time to relax, shopping or recreation.
“Consumers may also judge the price paid relative to the consistency of the performance of the product or service” (Herman, A, Xia, L, Monroe, Kent B, Huber, F 2007)
By concentrating more on the convenience of shopping, Alfamart and Indomaret can offer the free park for the minimum purchase. Security and camera would really help for the safety and conveniently. The products that are arrange in a proper way, selecting the product and return the product to the factory if the expired date that will come. “When employees' beliefs about what they are supposed to be accomplishing on the job and how well they are doing are accurate, they behave more effectively” (Gilbert, G Ronald 2000). The service can still be improved by giving the employees an additional training programme to increase their performance.
“Negative perceptions of service may ultimately damage the reputation and profitability of the business”.(Hensley, Rhonda L & Sulek, J 2007). To avoid the negative perception, the service must be improved.
Based on the extra findings, most of the customers spend their money to buy snacks and drinks, so the mini mart can focus more on the sales of the product, in example, by adding the varieties of the product that most of the customer wants.
By recognizing the factors that influence the level of customer satisfaction, the management, marketers and entrepreneurs can have the research result for their future strategies and future improvements.
Referencing
Alfamart, Alfamart Company Profile <http://www.alfamartku.com/>
Bielen, F & Demoulin, N 2007, ' Waiting Time Influence on the Satisfaction Loyalty Relationship in Services' , ' Managing Service Quality' , Vol.17, No.2, pp.174-193.
Gilbert, G Ronald 2000, 'Measuring Internal Customer Satisfaction', 'Managing Service Quality', Vol.10, No.3, pp. 178-186.
Hensley, Rhonda L & Sulek, J 2007, 'Customer Satisfaction With Waits in Multi Stage Services' , 'Managing Service Quality', Vol.17, No.2, pp. 152-173.
Herrmann, A, Xia, L, Monroe, Kent B & Huber F 2007, 'The Influence of price Fairness on customer satisfaction: an empirical test in the context of automobile purchase’, 'Journal of Product and Brand Management', Vol.16, No.1, pp.49-58.
Indomaret, Indomaret Company Profile <http://www.indomaret.co.id/idm/mod.php?mod=userpage&page_id=3>
Lassar, W, Mittal, B & Sharma, A 2005, 'Measuring Customer Based Brand Equity' , ' Managing Service Quality' , Vol.15, No.4, pp. 120-129.
Muffatto, M & Panizzolo R 1995, ' A Process Based View for Customer Satisfaction' , 'International Journal of Quality & reliability Management' Vol.12, No.9, pp.154-169.
Omset Minimarket Merosot (n.d.), viewed 17 January 2008
Parkan, C 2005, ‘Bench marking operational performance: the case of two hotels’, Productivity and Performance Management, Vol.54, No.8, pp. 679-696.
Paswan, A, K, Spears, N & Ganesh, G 2007, ‘The Effects of Obtaining One's Preferred Service Brand on Consumer Satisfaction and Brand Loyalty’, Services Marketing, Vol.21, No.2, pp. 75-87.
Rodie, A, R & Martin, C, L 2001, ‘Competing in the Service Sector-Entrepreneurial Challenge’, Entrepreneurial Behaviour and Research, Vol.7, No.1, pp.5-21.
Taylor, C 1995, ‘The Case for Customer Satisfaction’, ‘Managing Service Quality’, Vol.5, No.1, pp. 16-29.
1.1 Company profile :
Alfamart
PT Sumber Alfaria Trijaya (SAT) or Alfamart is a national company that move in trading and retailing services that provide the basic and daily needs with the area of the building less than 250 m². The company was built on 27 June 1999 and the main office was located at Jl. MH. Thamrin No.9 Cikokol, Tangerang.
Nowadays we can see, there are more than 1750 Alfamart mini mart in Indonesia (December 2006)
Alfamart was granted the certificate of ISO 9001:2000 and the MURI Record at 22 January 2007 at Shangri La Hotel Jakarta.
ISO (International Organization for Standardisation) is the institution that consists of organizations from the entire world that responsible to fulfil the international standard on every nation company.
With the acceptance of ISO certificate meaning Alfamart have successfully practice the international standard in every unit of their enterprise and show that the company are capable to compete on international scale.
MURI (Museum of Indonesian World Record) is the first institution in Indonesia that specifically collecting the record data in Indonesia. On this cases, MURI gives the appreciation for Alfamart because the company have successfully be the first national company that successfully be the first mini mart network in Indonesia that successfully obtain the ISO certificate.
Alfamart aims to deliver the most desired satisfaction by focussing with the product and services quality. With the motto “satisfy purchase, exact prices“(Alfamart 2007)
Indomaret
Indomaret is the mini mart network that provides the basic and daily needs with the area of shop less than 200 m². The company was Manage by PT Indomarco Prismatama that was built on November 1988 and now the main office was located at Ancol, Jakarta.
With the total of more than 2425 mini mart that spread in Indonesia. Indomaret can be found everywhere at office building, house area and public facility. The company was strengthened by the company under the flag of INTRACO that is Indogrosir, Finco, BSD plaza and Charmant.
Indomaret was granted “Franchise Company 2003” by Megawati Soekarnoputri, because on 1997, the company develop the first franchise business in Indonesia, after the company was tested with more than 230 shops.
Indomaret aiming to deliver the most desired satisfaction for the customer in the society, with the motto “Easy and Economic” (Indomaret 2007)
1.2 Background to the problem
-As the occurrences of Alfamart and Indomaret, which of these service categories will the customers more satisfy?
We know that the mini mart can be found everywhere at our surrounding area in example at our house area, office, public facility area and any other places.
Both of the mini mart offer the similar basic and daily needs for every of the customer and targeted the same segment of customer in the society such as family.
The researcher agrees that most of Indonesian know that both of the mini marts are standing at the top in the mini mart competition. Starting from the town until the small village, the mini mart can be found. Sounds unfamiliar, when one of the mini mart, take Indomaret/Alfamart as an example, opened up a new shop in an area, only the matter of time, Alfamart/Indomaret will open their shop near, around, beside or across the Indomaret. We take Greenville area at West Jakarta for example; Alfamart was built beside the Indomaret.
“Consumerism means getting what you can and luxury is for someone else”. (Taylor, C 1995)
This means there is also possibility that the consumers go to the mini mart for their needs and they don’t care about which mini mart they would go.
If we do the research more detail, actually there will be reason about the preference of the consumer choosing one of the mini marts and people evaluation might be different, there will be question, what factors can be measure in deciding which mini mart to be chosen?
1.3 Importance of the problem
Indomaret VS Alfamart
For this recent 4 years both of the mini mart industries are competing againts each other, we can see it by the occurrences of Indomaret and Alfamart in many places, take Indomaret/Alfamart as an example, opened up a new shop in an area, only the matter of time, Alfamart/Indomaret will open their shop near, around, beside or across the Indomaret. We take Greenville area at West Jakarta for example; Alfamart was built beside the Indomaret.
Both of the labels are the intensive players in mini market competition, beside Indomaret and Alfamart there are also many players in the mini market retailing services, but at the moment Indomaret and Alfamart are dominating.
Source: Pikiran Rakyat
1.4 Various dimensions of the problem
The strategic location, shelves that are arrange in order with so many variant of the product, the easy payment with the cashier, Full air conditioning room, competitive prices and the benefits offered. No doubt that people would be grateful to come to mini market.
By the occurrences of Indomaret and Alfamart the society are helped to obtain their daily needs easier and more convenient.
The mini marts also have to compete against each other to obtain their loyal customer in order to compete in the competitive market.
And the next question will be as the occurrences of Indomaret and Alfamart which one will be the customer preference?
1.5 Approach to the problem
There are glimpse of journals that mention about the customers satisfaction in any of the industry. The researcher are analyzing ten journals in order to approaches the similar problem in the research. Some statements about the explanation of the journals are taken in order to accomplish the research. More brief explanation will be explained in the next chapter.
Research Objectives
When people need something as their daily needs, they will directly goes to the mart to obtain what they need and wants. They might be going to the mart, super market, hyper mart and traditional mart or even they will go to small shop, to obtain what they need. The first specific objectives of the research is to compare the level of customer satisfaction on both of the mini mart, that is Alfamart and Indomaret,
The second research objective will be determining whether the discounted price offer by the mini mart will affect in influencing customer satisfaction.
Price is an important element in consumers' purchases (Hermann, A, Xia, L, Monroe, K, B & Huber, F 2007). The preference of the similar service will highly be dependant on the price offered by the mini mart, so that is the reason why the mini marts are doing the price wars by offering their own benefit and discounted price.
The third research objective will be determining whether the strategic location on both of the mini mart will affect in influencing customer satisfaction.
Hypotheses
RQ: Is there any relationship with the discounted price offers with customer satisfaction?
H0: There is relationship with the discounted price offers and customer satisfaction at Indomaret
H1: There is no relationship with the discounted price offers and customer satisfaction at Indomaret
H2: There is relationship with the discounted price offers and customer satisfaction at Alfamart
H3: There is no relationship with the discounted price offers and customer satisfaction at Alfamart
Adopted from the journal “Benchmarking operational performance: the case of two hotels” (Parkan, C 2005)
Chapter 2
Literature Review
2.1 previous studies that addressed similar problem
There are glimpse of journal that mentioning about customer satisfaction at the emerald insight official website. Although there are alot of journals that explaining the customer satisfaction, the one that addressed the similar problem is
The effects of obtaining one's preferred service brand on consumer satisfaction and brand loyalty journal by Audhesh K. Paswan, Nancy Spears and Gopala Ganesh.
“Consumers are not able to buy their first choice and settle for another brand option” (Paswan, A, K, Spears, N & Ganesh, G 2007)
‘The brand switching decision is made before the purchase and the chosen brand becomes the first choice’. (Paswan, A, K, Spears, N & Ganesh, G 2007)
The journal explain that if the preferred brands are not available, the customers are more likely to settle to another brand for example, if the preferred dentist, doctor, room hotel, or shop are unavailable, the customer will take an alternative way by looking for another things that can fulfilled their needs.
‘A possible explanation could be that brands with higher levels of loyalty may have higher consumer involvement and expectations’ (Paswan, A, K, Spears, N & Ganesh, G 2007)
“The relationship between consumer satisfaction and brand loyalty has been investigated in the extant literature” (Paswan, A, K, Spears, N & Ganesh, G 2007)
The product or services that exceed the customer satisfaction will really influence them to be loyal with one of the product. As most of journals explain that the dissatisfaction leads to the negative word of mouth, they have the tendency to tell more people about their bad experience rather than their good experience.
“Existing literature also suggests that dissatisfaction leads to complaining behavior and negative word-of-mouth” (Paswan, A, K, Spears, N & Ganesh, G 2007)
‘An effective way to satisfy customers during service encounters is to provide them with pleasing experiences they do not expect’ (Paswan, A, K, Spears, N & Ganesh, G 2007)
The journals explain that to obtain the customer satisfaction more effectively, the service must be served in a different way that they experiences, this can also be called as a spontaneous delight.
2.2 previous studies that have been carried out
Although there are many journals used and analyzed for the research purposes, all of them have some differences on their objectives, methodology and findings. The first journal by G Ronald Gilbert explains about measuring internal customer satisfaction, the methodology for the journal was the author create the 7 likert scale of measurement starts from 1 (Strongly Disagree) to 7 (Strongly Agree). Zero was also included as the no opinion answer. The questionnaire asked 15 questions about the service quality. The objective of the journal is to analyze the performance of the organization. The researcher can tell about the finding that is “employees working in the focal groups will be more positive than the ratings attributed to them by their internal customers.” (Gilbert, G, Ronald 2000)
This means by putting the members into a group, they will perform in a better way.
The journal helps the researcher to realize that the performance of the staff will influence the customer satisfaction.
Another journal from Andreas Herrmann, Lan xia, Kent B Monroe and Frank Huber that explain about The influence of price fairness on customer satisfaction: an empirical test in the context of automobile purchases.
“People's perceptions of how much “effort” the decision aids exert in providing the recommendations influenced their satisfaction regardless of what options were recommended” (Herrmann, A, Xia, L, Monroe, Kent B & Huber F 2007).
This means the price fairness will directly influence the preference and customer satisfaction.
The methodology of the research was surveying 246 of car buyers about their fairness perception and their satisfactions, the findings show that the perceptions of the price directly influence the customer satisfaction. The objective of the journal is to determine whether the price fairness will attract more customers or not. The journals really help the researcher to analyze that the price fairness will really influence the customer satisfaction.
Another journal from Celik Parkan, Benchmarking operational performance: the case of two hotels. The purposes of the study is to investigate the performance of the hotels in the big city, their methodology called Operational Competitiveness Rating Analysis (OCRA), they are comparing the both of the hotel in the United States. The purposes why do they use OCRA was because there is the chance that the performances of the hotels are above the standard
The findings of the research are we can determine the strength and weaknesses of the performance of both hotels, starting from the rooms, interior, toilet, food and beverages. ‘The fact is that tourists tend to spend more on food and beverages rather than the type of business travellers staying at Hotel’. (Parkan, C 2005)
‘The changes needed in the consumption of resources and generation of revenues so that the overall performance improves to the desired level’. (Parkan, C 2005). The hotels are competing each others, that is why the settlement of the cost must be analyzed further. The statement is similar with the previous journal have explained, that the price fairness will really influence the customer satisfaction.
Rhonda L. Hensley, &Joanne Sulek journal about Customer satisfaction with waits in multi-stage services tells about the multiple stages service for the affectivity of the operation. The purpose of the research is to examine the perception of the customers with the multistage services. The methodology was administered the questionnaire during the course of the meal by the restaurant employees, the author select the restaurant that have the credibility in the city, the questionnaire consist of 44 question 22 question ask about the performance and 22 question ask about the expectation from the customer. The findings was that waiting time really influence the customer satisfactions, in example
1. ‘Reported that customer satisfaction with service in a fast-food restaurant declined as actual waiting time increased’. (Hensley, Rhonda L & Sulek, J 2007)
‘Delays decreased customer satisfaction, filling empty waiting time with distractions reduced anger and uncertainly experienced by customers, Customers may feel anxious or frustrated and may become dissatisfied with the service’. (Hensley, Rhonda L & Sulek, J 2007)
Running a restaurant must also considering about the convenient of the customer, by concentrating of the efficient time, we believe that the customer will be more satisfied because they don’t have the chance to be bored.
The journal helps the researcher to understand that the sincere service will influence the customer satisfaction.
Waiting time influence on the satisfaction-loyalty relationship in services journal by Frédéric Bielen and Nathalie Demoulin explain about waiting time impacts on service satisfaction and customer loyalty. The objective of the research is that the authors want to investigate how the customers will maintain to be loyal or not. The finding is that ‘the results confirm that waiting time satisfaction is not only a service satisfaction determinant’. (Bielen, F & Demoulin, N 2007). Many factors will influence the customers satisfaction, as most of the journals explain, starting from the service, availability, location, price and etc. the questionnaire was distributed at Belgian health industry for 946 respondents.
Waiting time duration information influences the affective aspect and the acceptability of the wait, when it is an average or long wait. (Bielen, F & Demoulin, N 2007). The customers expect very much for the services given by the employees, when they feel they are neglected, they will be disloyal to the preferred services.
Journal from Chris Taylor explains about the importance of customer satisfaction in the business world. The journals explain about four factors that influence customer expectation that is ; “Comparative world peace, Communications and travel, Technology (which makes everything else possible), Government and inter-government legislation with particular reference to the removal of trade barriers, and other man-made forces which operate against open market competition”.(Taylor, C 1995). The journals are summarized from the AIC conference in London, it don’t tell about the objective or methodology, although it tells about factors that influence customer expectation.
A process based view for customer satisfaction by Moreno Mufatto and Roberto Panizzolo tells about the importance about customer satisfaction for firms competitiveness. “The success of a customer satisfaction plan requires an explicit and real commitment”. (Mufatto, M & Panizzolo, R 1995). The commitment starts from the trust and continued by achieving their expectations and future expectations. If it is done, customer satisfaction will be achieved. No objective and methodology mentioned.
2.3 Marketing Theory
The research purpose is to research the comparison of customer satisfaction on Alfamart and Indomaret. There are several independent variables to measure the customer satisfaction that is adopted from journal of services marketing, “The effects of obtaining one's preferred service brand on consumer satisfaction and brand loyalty”
The dependant variable will be customer satisfaction and the independent variable will be services, price, repeat purchase, avid promoter, changes in live event.
Customer satisfaction = service levels + price + brand loyalty + repeat purchase + changes in live event.
The variables that will be used are service levels, price, brand loyalty and repeat purchase.
Customer’s satisfaction in general is the satisfaction that obtain by the customers when they deal with the companies or an organization, the customers satisfaction are very important in the success of every of the organization, because the satisfied customer will have the tendency to purchase the product again, where as the dissatisfied customer will tell more about the dissatisfied things to other people. The factors of customer satisfaction may be varying. “The study of satisfaction begins with examining potential causes of dissatisfaction” (Lassar, W, Mittal, B & Sharman, A 2005) by determining the cause of dissatisfaction with improving the service quality as expected by the customers, the customers satisfaction can be achieved.
“Customer satisfaction is considered to be one of the most important competitive factors for the future and one of the best indicators of a firm’s future profits”. (Muffato, M & Panizzolo, R 1995). Customer satisfaction study have been learned and analyzed by most of the organization for the success of the organization, the achievement of number of loyal customers will be the assets for the increase of demand for future profits.
The services should be offered politely, respect, friendly to every of the customer, when the customers ask something or have the complaint about the product / services, the employees have to deal with the customers in an appropriate manner to have the mutual understanding to solve the problem.
Brand loyalty is also the part of customer satisfaction where the satisfied customer will be loyal to the brand offered. “Brand loyal consumers might purchase a competing brand when the preferred (first choice) brand is not available” (Paswan, A, K, Spears, N & Ganesh, G 2007). A moderating effect of waiting time satisfaction on the relationship between service satisfaction and loyalty must be characterized by significant interaction between service and waiting time satisfaction (Bielen, F & Demoulin, F 2007). This means the satisfied customers tend to be loyal or more loyal to one of the preferred brand or services. This can be fulfilled by serving the customers in an appropriate ways without waiting the customer time.
The product qualities that match to the prices of the product and the discounted price offers will result the customer preference to have the product, because the product price are reliable. “consumers may also judge the price paid relative to the consistency of the performance of the product or service” (Herman, A, Xia, L, Monroe, Kent B, Huber, F 2007) consumers always compare whether the product or services obtained are the same, lower or higher with the amount of money they sacrifice, if the customers thought that the money that they had already sacrificed are not fit with the services or product that they had already obtained, they will be dissatisfied, this must be prevented with the fit prices.
When the customers are satisfied with the product or services, there will be the tendency for them to come and purchase the product again.
The variables are adopted from (Paswan, A, K, Spears, N & Ganesh, G 2007)
Chapter 3
Research design
3.1 Research approach
There are three types of research design that is descriptive, exploratory and causal research design. On measuring the comparison between the levels of customer satisfaction on Alfamart and Indomaret the researcher will use the descriptive research design, because the descriptive research can provide “an accurate snapshot of some aspect of the market environment”. (Aaker, David A, Kumar, V & Day, George S, 2004 p.76) In example: consumer evaluation of the attributes of the services versus competing services.
3.2 Information needs
To obtain the information the researcher distribute 100 of questionnaires for Inti & Pelita Harapan students. The answers from 100 opinion are used to represent the research. Before distributing the questionnaires the researcher ask the respondents whether they have already experienced shopping at Alfamart or Indomaret. If they do, they’ll have the opportunities to fill up the questionnaire, if they dont the researcher will ask the other person to fill up the questionnaire distributed.
3.3 Secondary data
Secondary data are the data that were collected by persons or agencies for purposes other than solving the problem at hand. (Aaker, David A, Kumar, V & Day, George S, 2004 p.80)
The secondary data can be obtained from journals, internet web sites and books.
The secondary data for the research will be obtained from journals (www.emeraldinsight.com), that is
Journals tittle/Author
“The Case for Customer Satisfaction”
Chris Taylor
“Measuring Internal Customer Satisfaction”
G Ronald Gilbert
“Competing in the Service Sector-Entrepreneurial Challenge”
Amy Risch Rodie and Charles L. Martin
“Benchmarking operational performance: the case of two hotels”
Celik Parkan
“The effects of obtaining one's preferred service brand on consumer satisfaction and brand loyalty”
Audhesh K. Paswan, Nancy Spears, and Gopala Ganesh
Measuring customer-based
brand equity
Walfried Lassar, Banwari Mittal and Arun Sharma
Customer satisfaction with waits in multi-stage services
Rhonda L. Hensley and Joanne Sulek
The influence of price fairness on customer satisfaction: an empirical test in the context of automobile purchases
Andreas, Herrmann Lan Xia, Kent B. Monroe and Frank Huber,
Waiting time influence on the satisfaction-loyalty relationship in services
Frederic Bielen & Nathalie Demoulin
A process-based view for customer satisfaction
Moreno Muffato and Roberto Panizzolo
Pikiran rakyat Internet Sites
Consumer Behaviour book by Michael R. Salomon.
Marketing Research book written by Aaker, Kumar and Day.
An Overview of SPSS for Windows step by step. Students Handbook
3.4 Primary data
The primary data will be obtained by spreading the questionnaires to 50 students at Inti College Indonesia and 50 students at Pelita Harapan University. With the ratio 1 : 1. The purposes of distributing the questionnaire in this two university was because there are many students that come from different places that can filled up the questionnaire based on their opinion. Another reason is the journals are also using questionnaire to obtain their primary data.
3.5 Scaling technique
The researcher will use the Nominal measurement to determine the sex, ordinal measurement to identify preference, Ratio measurement to measure the age and incomes. The researcher will use 4 points degree of measurement as the interval measurement. The first point means strongly agree, the second means agree, the third means disagree and the fourth means strongly disagree. Using the degree of measurements has been popularly used by most of journals to obtain the more accurate feedback by giving the scaling measurement questions. The scaling technique will be used in variables question where the respondent can choose any of the answer which appropriate to their opinion.
3.6 Questionnaires development and pre testing
The researchers create a page of questionnaire and copied it to twenty copies for the pre testing and continue with eighty copies. During the pre testing the respondents know exactly well how to filled up the questionnaires although some of them miss some part by skipping the question because they don’t really read the questions well. These cases are anticipated well by giving an “Arrow” for the question that the respondent usually missed to fill up. Most of the respondents are very easy to approach, but some of them refused to fill up because they are busy with their own assignment and they are getting bored that marketing students always ask them to fill up the questionnaires. The hypotheses are adopted from the journal “Benchmarking operational performance: the case of two hotels, but there are no questions adopted from previous research, because the questionnaire created can already fulfill the objectives.
3.7 Sampling Technique chosen and justifications
The researcher will use the non probability sampling method as the sampling method, because sampling frame is not exist. “Sampling frame is a list of population members used to obtain a sample”.(Aaker, David A, Kumar, V & Day, George S, 2004 p.376). This can be the list of college students, the list of newspaper subscribers, or the list of fitness member.
The population will be all people that go to Alfamart and Indomaret.
The sample size will be 100. The researcher is distributing those amounts of questionnaires because the research is for academic purposes only, if the research is for business purposes, the researcher will distribute bigger amount of questionnaires.
50 questionnaires will be distributed for Inti College Indonesia students and 50 for Pelita Harapan University.
The sampling procedure will be the quota sampling and snowball sampling, because the researcher limited 100 of respondents to fill up the questionnaires, by dividing 50 respondents from Inti College Indonesia and 50 respondents from Pelita Harapan University because there might be a chance for the people that study in different universities have their own point of view and the researcher need someone helps to spread the questionnaires.
The data from primary sources will be collected by self administered questionnaires, because the researcher will spread the questionnaires to the respondent without explain to get the information.
(Aaker, David A, Kumar, V & Day, George S, 2004)
Data Analysis
3.8 Methodology
To analyze the data there are several statistical tests need to be conducted. From An Overview of SPSS for Windows Step by Step book. The researcher can learn to analyze the data obtained for the research purpose. There are many statistical tests that can be used to obtain the findings such as the frequencies, descriptive, cross tabulation, chi-square, one way ANOVAs, regression, factor analysis starting from extraction. To achieve the objectives, findings and hypothesis test, the researcher need to use several statistical tests, such as frequencies to obtain the demographic profile of the respondents. Means, to obtain the number of means of the variables to obtain the level of customer satisfaction numbers, because the researcher need to compare the level of customer satisfaction on both of service category, Indomaret and Alfamart. The use of cross tabulation and chi square techniques will be the importance part to examine whether there is a significant level on both of the variables, if there are; there are the relationships between both of the variables.
Correlation test will also be used to confirm the result from the chi square test.
4.1 Respondent Demographic Profile
| Variable | Frequency | Percent | Valid Percent | Cumulative Percent | |||
| Gender | Male | 43 | 57 | 43 | 43 | ||
| | Female | 57 | 43 | 57 | 100.0 | ||
| | Total | 100 | 100.0 | 100.0 | | ||
| Variable | Frequency | Percent | Valid Percent | Cumulative Percent | |||
| Age | 16-19 | 64 | 64 | 64 | 64 | ||
| | 20-25 | 34 | 34 | 34 | 98 | ||
| | >25 | 2 | 2 | 2 | 100 | ||
| | Total | 100 | 100 | 100 | | ||
| Variable | Frequency | Percent | Valid Percent | Cumulative Percent | |||
| Universities | INTI | 50 | 50 | 50 | 50 | ||
| | UPH | 50 | 50 | 50 | 100 | ||
| | Total | 100 | 100 | 100 | | ||
| Variable | Frequency | Percent | Valid Percent | Cumulative Percent | |||
| Monthly Allowance | 300,000-500,000 | 46 | 46 | 46 | 46 | ||
| | 501,000-1,000,000 | 24 | 24 | 24 | 70 | ||
| | >1,001,000 | 30 | 30 | 30 | 100 | ||
| | Total | 100 | 100 | 100 | | ||
Table 4.1 Demographic Profile
Sources: Survey
The researcher achieved the number of 100 of questionnaire targeted to the respondents at Inti College and Pelita Harapan University that is 50 :50. There are 43 male and 57 Female that filled up the questionnaires.
From the total of the respondents there are 64 students that their age ranging from 16-19, 34 students that their age ranging from 20-25 and there are 2 students that their age are above 25. There are 3 types of allowance that stated in the questionnaire distributed and there are 46 people that have 300,000-500,000 categories level of allowance, 24 people that have 500,001-1000, 000 level of allowance and 30 people that have 1,001,000 level of allowance.
4.2 Findings
Statistics
| | i feel convinience when i shop at indomaret | The staffs serve politely, ex: showing the item that you wish to purchase | The discounted price offer in the advertisement on personal care items will influence me to go to Indomaret | The discounted price offer in the advertisement on food and beverages items will influence me to go to Indomaret | I agree that the discounted price offer in the advertisement are the same with the price offered at the shelf | The member card offered will influence me to come again to indomaret | I will go to Indomaret because the location are nearer to alfamart | i feel the product range can fulfil my daily needs | i feel indomaret need to open an additional branch | I prefer to go to Indomaret because the location are nearer to my home | |
| N | Valid | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 |
| | Missing | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Mean | 2,13 | 2,33 | 2,58 | 2,41 | 2,10 | 2,69 | 2,24 | 2,28 | 2,18 | 2,18 | |
| | I feel convenience when I shop in Alfamart | The staffs serve politely, ex: showing the item that you wish to purchase | The discounted price offer in the advertisement on personal care items will influence me to go to Alfamart | The discounted price offer in the advertisement on food and beverages items will influence me to go to Alfamart | I agree that the discounted price offer in the advertisement are the same with the price offered at the shelf | The member card offered will influence me to come again to Alfamart | I will go to Alfamart because the location are nearer to Indomaret | I feel the product range can fulfil my daily needs | I think Alfamart need to open an additional branch | I prefer to go to Alfamart because the location are nearer to my home | |
| N | Valid | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 |
| | Missing | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Mean | 2,17 | 2,34 | 2,50 | 2,50 | 2,32 | 2,66 | 2,38 | 2,32 | 2,31 | 2,08 | |
Table 4.2
The first objective of the research is to compare the level of customer satisfaction on Indomaret and alfamart, the researcher add on the mean on each of every variables, and divide it with the total number of variables. In example:
Indomaret
Service levels (2, 13+2, 33)/2 = 2, 23
Prices (2, 58+2, 41+2, 1)/3= 2, 36
Repeat Purchase (2, 69+2, 24)/2=2, 47
Brand Loyalty (2, 28+2, 18+ 2, 18)/3=2, 21
Customer satisfaction = (2, 23 + 2, 36 + 2, 47 + 2, 21)/4= 2, 32
Alfamart
Service levels (2, 17+2, 34)/2 = 2, 26
Prices (2, 5+2, 5+2, 32)/3 = 2, 44
Repeat Purchase (2, 66+ 2, 38)/2 = 2, 52
Brand Loyalty (2, 32+2, 31+ 2, 08) = 2, 24
Customer satisfaction = (2, 26+ 2, 44+ 2, 52 + 2, 24)/4= 2, 37
The differences of the levels were only 0, 50 this show that the level of customer satisfaction of Indomaret and Alfamart are similar. The average result were the respondents are likely to be agree or satisfied with the services given by Indomaret and Alfamart
I prefer to go to Indomaret because the locations are nearer to my home * overall i feel satisfied with indomaret Crosstabulation
Count
| | overall I feel satisfied with indomaret | Total |
| ||||
| Strongly agree | agree | disagree | strongly disagree | strongly agree | |||
| I prefer to go to Indomaret because the location are nearer to my home | strongly agree | 4 | 18 | 1 | 0 | 23 |
|
| Agree | 2 | 36 | 3 | 2 | 43 |
| |
| Disagree | 0 | 19 | 7 | 1 | 27 |
| |
| Strongly disagree | 2 | 1 | 3 | 1 | 7 |
| |
| Total | 8 | 74 | 14 | 4 | 100 |
| |
Chi-Square Tests
| | Value | Df | Asymp. Sig. (2-sided) |
| Pearson Chi-Square | 25,803(a) | 9 | ,002 |
| Likelihood Ratio | 26,653 | 9 | ,002 |
| Linear-by-Linear Association | 8,805 | 1 | ,003 |
| N of Valid Cases | 100 | | |
a 11 cells (68,8%) have expected count less than 5. The minimum expected count is ,28.
Correlations
| | | I prefer to go to Indomaret because the location are nearer to my home | overall i feel satisfied with indomaret |
| I prefer to go to Indomaret because the location are nearer to my home | Pearson Correlation | 1 | ,298(**) |
| Sig. (2-tailed) | | ,003 | |
| N | 100 | 100 | |
| overall i feel satisfied with indomaret | Pearson Correlation | ,298(**) | 1 |
| Sig. (2-tailed) | ,003 | | |
| N | 100 | 100 |
** Correlation is significant at the 0.01 level (2-tailed).
Based on the table above, we can conclude that the strategic location will influence the customer satisfaction, prove with the significant level are below 0,050. This can be confirmed by 36, 1 % that is weak.
We can also prove it by the increase the number of alfamart and Indomaret to more than 2000 mart, and all of them are opened in a short distance among each other, so we can conclude that both of the minimart are competing to obtain the sales at the place they opened up the branch mart. The strategic location offered will influence more people to come rather than they have to walk by foot in a far distance or by vehicles.
The other objectives will be explained more in the hypothesis testing
4.3 Hypothesis testing
Research Hypothesis
RQ: Is there any relationship with the discounted price offers with customer satisfaction?
H0: There is relationship with the discounted price offers and customer satisfaction at Indomaret
H1: There is no relationship with the discounted price offers and customer satisfaction at Indomaret
H2: There is relationship with the discounted price offers and customer satisfaction at Alfamart
H3: There is no relationship with the discounted price offers and customer satisfaction at Alfamart
Adopted from the journal “Benchmarking operational performance: the case of two hotels” (Parkan, C 2005)
The second findings will be determining whether the discounted price have relationship with the customer satisfaction or not?
The discounted price offer in the advertisement on food and beverages items will influence me to go to Indomaret * overall i feel satisfied with indomaret Crosstabulation
Count
| | overall i feel satisfied with indomaret | Total |
| ||||
| strongly agree | agree | disagree | strongly disagree | Strongly agree | |||
| The discounted price offer in the advertisement on food and beverages items will influence me to go to Indomaret | -1 | 1 | 0 | 0 | 0 | 1 |
|
| strongly agree | 3 | 4 | 3 | 0 | 10 |
| |
| agree | 3 | 37 | 4 | 1 | 45 |
| |
| disagree | 1 | 26 | 6 | 1 | 34 |
| |
| strongly disagree | 0 | 7 | 1 | 2 | 10 |
| |
| Total | 8 | 74 | 14 | 4 | 100 |
| |
Chi-Square Tests
| | Value | Df | Asymp. Sig. (2-sided) |
| Pearson Chi-Square | 31,917(a) | 12 | ,001 |
| Likelihood Ratio | 21,383 | 12 | ,045 |
| Linear-by-Linear Association | 7,331 | 1 | ,007 |
| N of Valid Cases | 100 | | |
a 15 cells (75,0%) have expected count less than 5. The minimum expected count is ,04.
Correlations
| | | The discounted price offer in the advertisement on food and beverages items will influence me to go to Indomaret | overall i feel satisfied with indomaret |
| The discounted price offer in the advertisement on food and beverages items will influence me to go to Indomaret | Pearson Correlation | 1 | ,272(**) |
| Sig. (2-tailed) | | ,006 | |
| N | 100 | 100 | |
| overall i feel satisfied with indomaret | Pearson Correlation | ,272(**) | 1 |
| Sig. (2-tailed) | ,006 | | |
| N | 100 | 100 |
** Correlation is significant at the 0.01 level (2-tailed).
Based on the table above, we can conclude that discounted price offer on food at Indomaret will influence the customer satisfaction, prove with the the significant level are below 0,050.
This can be confirmed by 27, 2 % that is so weak.
The discounted price offer in the advertisement on food and beverages items will influence me to go to Alfamart * Overall I feel satisfied with Alfamart Crosstabulation
Count
| | Overall I feel satisfied with Alfamart | Total | |||||
| -1 | strongly agree | agree | disagree | strongly disagree | -1 | ||
| The discounted price offer in the advertisement on food and beverages items will influence me to go to Alfamart | strongly agree | 0 | 1 | 5 | 0 | 0 | 6 |
| Agree | 1 | 2 | 36 | 5 | 1 | 45 | |
| Disagree | 0 | 0 | 28 | 12 | 2 | 42 | |
| strongly disagree | 0 | 2 | 3 | 2 | 0 | 7 | |
| Total | 1 | 5 | 72 | 19 | 3 | 100 | |
Chi-Square Tests
| | Value | Df | Asymp. Sig. (2-sided) |
| Pearson Chi-Square | 20,153(a) | 12 | ,064 |
| Likelihood Ratio | 19,437 | 12 | ,079 |
| Linear-by-Linear Association | 3,331 | 1 | ,068 |
| N of Valid Cases | 100 | | |
a 15 cells (75,0%) have expected count less than 5. The minimum expected count is ,06.
Correlations
| | | The discounted price offer in the advertisement on food and beverages items will influence me to go to Alfamart | Overall I feel satisfied with Alfamart |
| The discounted price offer in the advertisement on food and beverages items will influence me to go to Alfamart | Pearson Correlation | 1 | ,183 |
| Sig. (2-tailed) | | ,068 | |
| N | 100 | 100 | |
| Overall I feel satisfied with Alfamart | Pearson Correlation | ,183 | 1 |
| Sig. (2-tailed) | ,068 | | |
| N | 100 | 100 |
Based on the table above, we can conclude that discounted price offer on food at Alfamart have no relationship with the customer satisfactions; prove with the significant level are above 0,050. this can be confirmed by 18,3 % that is so weak.
People would rather prefer the product or services that offer the cheaper or discounted price. With the cheaper price offered on food and beverages offered by alfamart and Indomaret, the customer will have the higher tendency to come to the places. “Consumer may also judge the price paid relative to the consistency of the performance of the product or service” (Herman, A, Xia, L, Monroe, Kent B, Huber, F 2007). consumers always compare whether the product or services obtained are the same, lower or higher with the amount of money they sacrifice, if the customers thought that the money that they had already sacrificed are not fit with the services or product that they had already obtained, they will be dissatisfied, this must be prevented with the fit prices.
With the result that had been researched, the researcher rejects the H1 and H2 statements; because the discounted price offered are related with customer satisfaction at Indomaret although at Alfamart the discounted price offered are not related with customer satisfaction.
4.2.1. Limitations
Change in live event will not be used as the variables for the research of both of the mini mart, even though there is the changes in the live event, people would still go to the store or mart to obtain what they need as their needs. Changes in live event will be used when the researchers are researching about the hotel or hospital, whereas when there’s a change in live event people will come to the places.
Not all students willing to fill up the questionnaires, some students refused to fill up the questionnaire because they are getting bored that marketing students always ask them to fill up the questionnaires, but the target of 100 respondents had been fulfilled.
4.2.2. Future Improvements
The researcher has to create the questionnaire in two languages, English and Indonesia, so the researcher can just give the Indonesian language question for those who couldn’t understand English language, so the researcher don’t have to spend more time looking for the people who are able to understand English language.
The researcher will also give them a reward so all of them will be very happy to fill up the questionnaires, hopefully by giving them a reward, such as pen, pencil or snacks, the respondents will approach the researcher to fill up the questionnaires.
Chapter 5
5.1 Conclusion
From the research estabilished, the level of customer satisfaction of alfamart are lower than indomaret, proved with the score of customer satisfaction on alfamart was 2, 37 and indomaret was 2, 32.
The strategic locations are related with the customer satisfaction at Indomaret and Alfamart.
The hypotheses test shows that we can conclude that discounted price offer on food at Indomaret are related with the customer satisfaction, prove with the significant level are below 0,050.
Although at Alfamart the discounted price offer on food and beverages item are not related with the customer satisfaction.
The researcher has achieved the objectives that are to measure the level of customer satisfaction, identify whether the discounted price offer and strategic location have a relationship with the customer satisfaction or not. By this research the people who need the information can get information about the company. “The understanding that services are somewhat unique and that their unique characteristics provide challenge to upper management to marketers and to entrepreneurs “(Rodie, A, R & Martin, C, L 2001)
5.2 Recommendation
There are several recommendations based on finding and several recommendations based on the researcher analysis. Both of Indomaret and Alfamart performance were very good, although there is still the room for improvement. By offering discounted price to the customer, it will influence the customers to come again to the places, moreover, Alfamart and Indomaret have to consistently offer the discounted price product every period although they have to give another discount or bazaar during the holiday event, whereas some people spend their time to relax, shopping or recreation.
“Consumers may also judge the price paid relative to the consistency of the performance of the product or service” (Herman, A, Xia, L, Monroe, Kent B, Huber, F 2007)
By concentrating more on the convenience of shopping, Alfamart and Indomaret can offer the free park for the minimum purchase. Security and camera would really help for the safety and conveniently. The products that are arrange in a proper way, selecting the product and return the product to the factory if the expired date that will come. “When employees' beliefs about what they are supposed to be accomplishing on the job and how well they are doing are accurate, they behave more effectively” (Gilbert, G Ronald 2000). The service can still be improved by giving the employees an additional training programme to increase their performance.
“Negative perceptions of service may ultimately damage the reputation and profitability of the business”.(Hensley, Rhonda L & Sulek, J 2007). To avoid the negative perception, the service must be improved.
Based on the extra findings, most of the customers spend their money to buy snacks and drinks, so the mini mart can focus more on the sales of the product, in example, by adding the varieties of the product that most of the customer wants.
By recognizing the factors that influence the level of customer satisfaction, the management, marketers and entrepreneurs can have the research result for their future strategies and future improvements.
Referencing
Alfamart, Alfamart Company Profile <http://www.alfamartku.com/>
Bielen, F & Demoulin, N 2007, ' Waiting Time Influence on the Satisfaction Loyalty Relationship in Services' , ' Managing Service Quality' , Vol.17, No.2, pp.174-193.
Gilbert, G Ronald 2000, 'Measuring Internal Customer Satisfaction', 'Managing Service Quality', Vol.10, No.3, pp. 178-186.
Hensley, Rhonda L & Sulek, J 2007, 'Customer Satisfaction With Waits in Multi Stage Services' , 'Managing Service Quality', Vol.17, No.2, pp. 152-173.
Herrmann, A, Xia, L, Monroe, Kent B & Huber F 2007, 'The Influence of price Fairness on customer satisfaction: an empirical test in the context of automobile purchase’, 'Journal of Product and Brand Management', Vol.16, No.1, pp.49-58.
Indomaret, Indomaret Company Profile <http://www.indomaret.co.id/idm/mod.php?mod=userpage&page_id=3>
Lassar, W, Mittal, B & Sharma, A 2005, 'Measuring Customer Based Brand Equity' , ' Managing Service Quality' , Vol.15, No.4, pp. 120-129.
Muffatto, M & Panizzolo R 1995, ' A Process Based View for Customer Satisfaction' , 'International Journal of Quality & reliability Management' Vol.12, No.9, pp.154-169.
Omset Minimarket Merosot (n.d.), viewed 17 January 2008
Parkan, C 2005, ‘Bench marking operational performance: the case of two hotels’, Productivity and Performance Management, Vol.54, No.8, pp. 679-696.
Paswan, A, K, Spears, N & Ganesh, G 2007, ‘The Effects of Obtaining One's Preferred Service Brand on Consumer Satisfaction and Brand Loyalty’, Services Marketing, Vol.21, No.2, pp. 75-87.
Rodie, A, R & Martin, C, L 2001, ‘Competing in the Service Sector-Entrepreneurial Challenge’, Entrepreneurial Behaviour and Research, Vol.7, No.1, pp.5-21.
Taylor, C 1995, ‘The Case for Customer Satisfaction’, ‘Managing Service Quality’, Vol.5, No.1, pp. 16-29.
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