Chapter 6
Chapter 6
Chapter 6
Introduction
Having discussed the methodology adopted in this research in the preceding chapter, a presentation of the descriptive findings of this study will follow. This chapter focused on the presentation and discussion of percentage frequencies with measures of central tendency (mean value) and dispersion (i.e. standard deviations).
Once the data files have been cleaned to ensure there are no errors, the descriptive analysis phase is performed. The raw data will firstly be transformed into a form that will make them easy to understand and interpret; simply meaning to try to make sense of the data collected. The usefulness of descriptive statistics has been advocated by Bailey (1982, p.39) who writes, In a descriptive analysisthe researcher may be more concerned with describing the extent of occurrence of a phenomenon than with studying its correlates. In addition, these statistics mainly focus on description and presentation of data (Sapsford and Jupp 1996).
The primary objective of the descriptive analysis is to explore and gain an initial understanding and get the feel of the data gathered from the survey. According to Chatfield (1985), the initial data analysis is an important stage of most statistical investigations, not only for scrutinising and summarising data, but also for model formulation using more advanced statistical techniques at the later stage of the analysis process. For instance, the multivariate analysis that will be utilised in the next stage is structural equation modelling.
Descriptive statistics in this chapter were employed to describe the demographic characteristics, purchasing pattern and behaviour of the respondents and to describe and summarise the basic statistics pertaining to each of the constructs examined in this study. The descriptive findings were derived from responses generated from the research questionnaire. They describe basic data analysis such as mean values, standard deviations and test of significance among selected variables. The findings are displayed using tables and graphs to illuminate the features of the data as well as to provide a simplified picture of large datasets.
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6.2
Table 6.1 displays a detailed breakdown of the survey participants demographic characteristics. The sample in this study consists of 62 per cent aged 20 39, over 62 per cent are married and over 36 per cent had attained at least a first degree. Almost 45 per cent reported to earn a household income exceeding RM2500 per month. The results of the present study seem consistent with most previous empirical findings. Table 6. 1 Overall Sample Demographic Profile
variables Research sample (n = 400) Number of Respondents Percentage Male Female Single Married Below 20 years old 20-29 years old 30-39 years old 40 - 49 years old 50 - 59 years old Over 60 years old Malay Chinese Indian Others No secondary education Secondary education Certificate / Diploma Bachelor degree Post graduate/ Professional Below RM1000 RM1001 - RM2500 RM2501 - RM 4500 RM 4501 - RM6500 RM 6501 - RM 8500 RM 8501 - RM10500 RM 10501and above Private sector Government/Semi-government Own Business Student Not working 100 300 152 248 20 140 109 101 23 7 260 95 41 4 6 92 157 98 47 29 193 96 46 16 11 9 161 172 9 37 21 25 75 38 62 5.0 35.0 27.3 25.3 5.8 1.8 65.0 23.8 10.3 1.0 1.5 23.0 39.3 24.5 11.8 7.3 48.3 24.0 11.5 4.0 2.8 2.3 40.3 44.0 2.3 9.3 5.3
Demographics
Gender
Marital status
Age
Ethnic background
Work sector
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6.3
Table 6.2 illustrates the response frequencies in terms of product type purchased by the survey participants. Skincare and cosmetics are categorised as beauty care products, whereas functional food, food supplements, vitamins and minerals and weight control products are health and wellness products. Just five respondents answered others to the question pertaining to product purchased. However, after an examination of their answers, it was found that the products indicated by them are wellness products. After collapsing the responses into two main product categories, it is conveniently split half (200 respondents) purchase beauty care and the other half (200 respondents) purchase health care products.
Respondents purchased about the same percentage of cosmetic and skincare, 26.5 and 23.5 per cent respectively in the beauty care product category. Whilst in the healthcare product category, food supplements, and vitamins and minerals are the top two most popular products, making up of 25.3 per cent and 16 per cent respectively of the total.
Table 6.2
Cosmetics
Food supplements Skincare Vitamins and minerals Functional food Weight control product Others Total
The Rehanstat (1999) survey reported that in terms of buying incident, beauty care products were the most popular (52.0 per cent) followed by health and wellness products (45.7 per cent). Additionally, the Endut (1999) study revealed that beauty care products are the most popular product purchased by her respondents, followed by electrical appliances and dietary supplements (which includes vitamins and mineral and herbal based nutritional products).
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6.4
This section describes in detail the respondents exposure and experience concerning purchasing products from the direct sales channel. Additionally some pertinent purchasing patterns, in terms of purchase frequency, amount of money spent, source of information, the companies where the product was purchased and duration of being their customer will be discussed.
6.4.1
Table 6.3 illustrates the response frequencies in terms of when the first purchase from a direct selling company occurred. Participants answers are captured from four response categories. The results show that almost 70 per cent of the respondents claimed that their first purchase took place at least a year ago. These findings imply that substantial numbers of the respondents are familiar and most probably are experienced customers of the direct sales channel. In turn, approximately 34 per cent of respondents report that their first purchase took place at some point during the previous 12 months. These findings suggest that they are quite new to the direct sales marketing channel.
Table 6.3
Less than 6 month 6 months to 12 months Over 1 to 3 years Over 3 years Total
6.4.2.
Table 6.4 reports the response frequencies in terms of their purchase frequency within the last twelve months. The findings illustrate that only 7.3 per cent of the respondents claimed that this particular purchase is their first, 40.3 per cent made less than 3 purchases, more than 52 per cent reported to make between 4 to 15 purchase or over within the last twelve months. The results of these findings demonstrate that 92 per cent of the respondents are familiar and become regular customers of the direct sales channel. Additionally, more than 17 per cent of respondents claim to have made over 10 purchases within the last twelve months; this suggests that they are heavy users of this sales channel. 228
6.4.3
Table 6.5 indicates that word of mouth from friends is the most popular source of product information dissemination, representing nearly 40 per cent. It is interesting to note that only 1.5 per cent of respondents claim to receive information about the products through electronic mail and utilisation of Internet search engines. Evidently, the Internet is the least popular medium as a source of product exposure.
Table 6.5
A friend told me about that Received catalogue Contacted by a direct seller Have bought something from this company before Attended sales party Saw an advertisement Read an article or news story Others Received an e-mail Found through Internet search engine Total
6.4.4
Purchase by Method
Table 6.6 demonstrates the response frequencies in terms of how and where the purchase took place. The findings indicate that the most popular way of how the purchases took place were by requesting the product from a direct seller; 42.3 per cent, followed by patronising the direct selling companys sales point or agency; 25 per cent and the third 229
most popular way is a visit from the direct seller to their home; 12 per cent. The least popular way is at sales party at someones home; 5 per cent.
Table 6.6
Purchase by Method
Frequency Per cent 42.3 25.0 12.0 8.3 7.5 5.0 100.0 169 100 48 33 30 20 400
I request the product from a direct seller/ distributor At the company's sales point/agency A direct seller came to my house Others During the sales party at my office During the sales party at someone's house Total
6.4.5
Purchase by Time
Table 6.7 demonstrates that 54 per cent of respondents reported that their most recent purchase took place within less than a month to three months ago. This result indicates that more than half of the respondents have just recently made their purchase and it is reasonable to assume this purchase might not be their first. Furthermore, it is logically acceptable to assume that for this type of product category, the repeat purchase will normally occur within a month to three months period.
6.4.6
Table 6.8 shows that a significant number of respondents about 60 per cent, spent less than RM100 for this particular purchase. More than 30 per cent spent between RM100 and RM200 and merely 9 per cent spent over RM200. These findings are consistent with Rehanstat (1999), who revealed that almost 63 per cent of their samples spent less than 230
RM100 and nearly 29 per cent spent between RM100 to RM200 per month purchasing direct sales products.
Table 6.8
Less than RM50 RM50 but less than RM100 RM100 but less than RM150 RM150 but less than RM200 RM200 and over Total
6.4.7
Purchase by Frequency
Results derived from Table 6.9 indicate that only 1.0 per cent of the respondents report that they purchased the specific product at least once a week; 35.8 per cent purchased the product at least once a month; 35.5 per cent purchased at least once every six months and 13.5 per cent purchased at least once a year. 14.3 per cent chose others as an option, specifying that their purchases did not have any particular frequency pattern; they purchase the product whenever the need arises. Conversely, according to Rehanstat (1999) majority (i.e. 80 per cent) of their samples claimed they purchased their product once a month. This result could be explained by the type of products purchased by the respondents, which are not specified as compared to those of the present study. It is logical to assume that for beauty and health products there is a less frequent repurchase pattern.
Table 6.9
Purchase by Frequency
Frequency Per cent 1.0 35.8 35.5 13.5 14.3 100.0 4 143 142 54 57 400
At least once a week At least once a month At least once every 6 months At least once a year Others Total
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6.4.8
Purchase by Company
AVON, which is the worlds leading direct sales company of beauty related products was reported to be the most popular direct selling company among the participants of this survey (see Table 6.10), COSWAY is the second most popular and AMWAY fall third. 16.8 per cent of respondents reported to purchase from other companies besides the ones listed in the table below. Since there are more than 400 direct selling companies in Malaysia, it is impractical to list all the companies. Ten respondents could not recall the name of the company where they purchased their health or beauty care products. This finding is consistent with Enduts (1999) study, in which AVON was reported to be the most popular direct selling company for beauty care products, AMWAY was a leader for health and wellness products and COSWAY were popular for both product categories. Table 6.10
AVON COSWAY Others AMWAY CNI NUTRIMETIC SHAKLEE LUXOR NUSKIN Total Missing Total
Purchase by Company
Frequency 104 73 67 53 33 20 19 16 5 390 10 400 Per cent 26.0 18.3 16.8 13.3 8.3 5.0 4.8 4.0 1.3 97.5 2.5 100.0
6.4.9
Table 6.11 presents a result on the response frequencies of participants duration of being a customer of the direct selling company. 31.3 per cent reported they have been a customer to the direct selling company less than a year; 42.3 per cent within 1 to 3 years; 14.3 per cent over 3 to 5 years and 12.3 per cent for over than 5 years. It could be assumed that more than 26 per cent have been customers to the direct selling company for over 3 years. Thus have been regular customers and probably loyal ones too.
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6.5
In this section, we describe the scale utilised and the results obtained through conducting descriptive analysis on each of the following constructs.
6.5.1
A detailed inspection of the results in Table 6.12 reveals the response frequencies and descriptive statistics for each of the Purchase decision involvement items. These are adapted from (Mittal 1989) and refined to tailor the direct sales purchase context. Participants responses were captured on a four-item measure on five-point bipolar phrases.
Table 6.12
1.
In selecting from many types and brands of this product available in the market, would you say that: Do you think that the various types and brands of this product available in the market are alike or all very different How important would it be to you to make a right choice of this product? In making your selection of this product, how concerned would you be about the outcome of your choice?
2.
3.42
1.09
400
3.
4.43
0.83
400
4.
4.53
0.77
400
The results indicate that the highest mean value for this construct is the item which denotes the respondents concern of the outcome of their choice (mean = 4.53); followed closely by the importance of making the right choice of the product (mean = 4.43); thirdly on care as to which type and brand of the product they buy (mean = 4.19). Item 2 exhibits the lowest mean value, which implies whether the product purchased is alike or 233
different from others, which are available in the market with a mean of 3.42. In his research, Pallister (1995) claimed that this specific item exhibits low score item-to-total correlation. A further robust statistical procedure will be undertaken in the later stage of the analysis process to determine whether it should be maintained or eliminated to achieve scale reliability. The overall results provide the evidence that for this particular purchase decision, it could be concluded that the participants are highly involved.
6.5.2
Perceived Equity
A three-item, five-point Likert-type scale measures the degree to which a respondent perceives a transaction was fair, particularly in relation to treatment he/she received from the direct seller from whom he/she purchased the product as mentioned in question 7 (see questionnaire in Appendix 5.1(a)).
Lower scores on the scale suggest that respondents feel the direct seller was very evenhanded in the transaction and on the other hand, higher scores imply that participants feel strongly that they were not fairly treated. The results in Table 6.13 illustrate that the highest mean values for this construct are: the perception of the respondents that the direct seller always tries to treat them right (mean = 3.93); the respondents perception that the purchase they agreed on was fair (mean = 3.84) and closely followed by the respondents feeling that they were treated fairly by the direct seller (mean = 3.83). The standard deviations for all items are less than 1, which indicates that the data clusters closely around the mean. These findings provide the evidence that overall the respondents perceived their direct sellers have considerably treated them quite fairly.
Table 6.13
1. I was treated fairly by my direct seller 2. The direct seller always tries to treat me right 3. The purchase I agreed on with my direct seller is fair
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6.5.3
Relational Commitment
A three-item, five-point Likert-type scale was utilised to capture the respondents feeling of commitment to maintain their relationship with their direct sellers. The scale was adapted from Morgan and Hunt (1994) by modifying the items to fit the direct sales context. Results from Table 6.14 demonstrate that item 2 in the scale record the highest score (mean = 3.57); followed closely by item 3 (mean = 3.53) and item 1 exhibit the lowest score with (mean = 3.39). Overall, the evidence derived from the results suggests that the respondents commitment to maintaining their relationship with the direct seller was just over 3 which is the mid-point of the scale.
Table 6.14
1.
I am very committed to maintaining my relationship with my direct seller I believe my direct seller and I will put some effort into maintaining our relationship I plan to maintain my relationship with my direct seller
2.
3.57
0.86
400
3.
3.53
0.85
400
6.5.4
Perceived Value
Table 6.15 illustrates the response frequencies and descriptive statistics for each of the perceived value items investigated. Participants responses are captured on a nine-item measure on five-point bipolar phrases.
Respondents are requested to evaluate the extent to which their purchasing experience from the direct sales channel compares with the conventional retail store in terms in terms of product quality, value for money, direct sellers knowledge, convenience and enjoyment of purchasing from the direct sales channel as compared to conventional retail store.
Table 6.15 demonstrates that the perceived value items held in the highest regard by respondents are knowledgeable of the direct seller compared to the salesperson from a retail store with a (mean = 4.13); followed closely by the value of information obtain from the direct seller compared to the salesperson in a retail store (mean = 4.06). The 235
lowest mean value is regarding enjoyment of purchasing a product from the direct selling company as compared to shopping in a retail store (mean = 3.63). All other items were rated slightly above 3, which represents the mid-point of the scale utilised. The standard deviation of each item is less than 1.00, that is, they are small and hence consistent.
Table 6.15
SD
n
400
1. Compared to the salesperson from a retail store, the direct seller from this direct selling company was: 2. Compared to the information obtained from a salesperson in a retail store, information given by the direct seller about this product was of: 3. Compared to buying this product from a retail store, the quality of this product from this direct selling company was of: 4. Compared to shopping in a retail store, buying this product from this direct seller was: 5. For this particular purchase, the benefits I received from this product were: 6. For the time spent in purchasing this product from this direct seller, I would say shopping from this direct seller: 7. For the price I paid for this product from this direct selling company, I would say shopping from this company was of: 8. Compared to shopping in a retail store, I found buying this product from this direct selling company to be: 9. I would rate my overall purchasing experience from this direct selling company as:
0.73
4.06
0.77
400
0.76
0.98 0.82
3.72
0.80
400
3.71
0.80
400
3.63
0.92
400
3.71
0.77
400
It is interesting to note that even though product quality (see, for example, Kustin and Jones 1995; Chen et al. 1998b; Rehanstat 1999) and convenience in the purchase transaction (Peterson et al., 1989; Barnowe and McNabb 1992; Raymond and Tanner 1994; Sargeant and Msweli 1999; Endut 1999) were consistently reported to be major advantages of purchasing through direct sellers, the current study discovers other values highly rated by the respondents. These are the knowledgeable direct seller and the valuable information they received from them. Ingram (1992) suggests that in the knowledge-explosion era, a salesperson that possesses valuable information is extremely 236
important; they add value to the products or services they sell. In essence, the findings from the present study further confirm and reinforce the above notion.
6.5.5
Performance
In this section, three performance constructs, which consist of product, direct seller and direct selling companies will be examined. The response frequencies, mean value and standard deviation will be exhibited in Table 6.16 (Product Performance), Table 6.17 (Direct Seller Performance) and Table 6.18 (Direct Selling Company Performance). A five-point fully anchored scale, ranging from (1) which denotes very dissatisfied, (2) for dissatisfied, (3) for neutral, (4) satisfied and (5) very satisfied was utilised to elicit participants response. (NA) which denotes not applicable provides an alternative option if respondents do not have knowledge or experience with the specific item in the scale.
6.5.5.1
Product Performance
An examination of the results revealed in Table 6.16 illustrates the extent of the respondents satisfaction concerning each of the items in the scale investigated. All the items in the scale are closely related to the product aspect. The findings suggest that the product performance items held in highest regard by participants are: product catalogue visual appearance (mean = 4.01); product packaging (mean = 3.94); product choice/variety (mean = 3.86) and product information adequacy (mean = 3.86). It appears that the respondents are highly satisfied with a peripheral aspect of the product rather than the core benefit such as effectiveness and performance and function of the product. All remaining items exhibit a mean score greater than 3, the scale mid-point. Upon inspection of the data, the lowest mean score is the price of the product, with a mean value of 3.60. Earlier studies have identified that price is one of the factors that
contributes to the non-purchase or non-repurchase of the product from direct seller (see, for example, Raymond and Tanner 1994; Chen et al. 1998a, b). In conclusion, the mean score for overall product performance is 3.89, which lies between neutral and satisfied response scale.
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Table 6.16
Price of product Product performed as claimed Product is multifunctional/multipurpose Product packaging Effectiveness of product Product guarantee Product choice/variety Product availability Product information adequacy Product catalogue visual appearance Innovative and unique product Overall product
6.5.5.2
Table 6.17 provides an account of response frequencies, mean value and standard deviation for the measurement of satisfaction with the direct seller. Respondents were asked to rate their degree of satisfaction with the direct seller from whom they made their last purchase of beauty or healthcare products. Direct Seller Performance Descriptive Statistics
Mean 3.82 3.78 3.78 3.63 3.40 3.68 3.54 3.64 3.59 3.68 3.66 3.59 3.68 3.71 SD 0.71 0.73 0.75 0.85 0.98 0.74 0.92 0.89 0.88 0.84 0.76 0.86 0.80 0.73 n 400 400 400 400 400 400 400 400 400 400 400 400 400 400
Table 6.17
Items Knowledgeable of products and services Capable and competent Being consistently courteous Following through on his/her promise Provide payment flexibility (instalment) Trustworthy After sales service Giving personal advice and attention Continuity contact Availability of direct seller Maintain a professional appearance Have customer interest at heart Sales demonstration/ presentation Overall direct seller
Results from Table 6.17 indicate that, overall, the mean score of all the items in the scale are above 3, the mid-point of the scale. Compared to the product satisfaction results, the overall mean value of direct seller satisfaction is slightly lower. The findings suggest that in relation to direct seller satisfaction, respondents held in high regard are the direct seller 238
knowledge of the product or services they sell, with a mean of 3.82. This finding further confirms the result derived in the Perceived Value construct, which indicate the highest mean score is attributed towards the item of the direct seller being knowledgeable (see Table 6.15). The next highest mean score is concerned with the direct seller being capable and competent and being consistently courteous which has the same mean score (mean= 3.78).
The lowest mean score is the item that relates to the direct seller providing flexible payment, with a mean of 3.40. The result indicates that less than 44 per cent of the respondents are satisfied or very satisfied with this privilege given to them by their direct seller, especially for a high price item. 15 per cent of the respondents do not have knowledge or experience with this item, even though in previous studies it was considered one of the advantages of purchasing through the direct seller (Chen et al. 1998b). In addition, from the in depth interview with the direct sales customers they indeed mentioned that they prefer to purchase from a direct seller if offered an extended payment facility. The overall direct seller satisfaction scale mean score is 3.71, which is just slightly above the neutral/indifference response scale.
6.5.5.3
Table 6.18 provides descriptive statistics results, which describe the extent of the respondents degree of satisfaction with the direct selling company that they last bought their beauty or healthcare products from.
Examination of the frequency distribution, mean score and standard deviation presented in Table 6.18 shows that all the items investigated in the measurement scale have a result of above 3, which is the mid-point. The item on company popularity exhibits an exception, with a mean score higher than 4 (mean = 4.06). Obviously, the respondents regard this item highest; followed by the companys reputation with a mean score of 3.95. The results show that the respondents are satisfied with the company popularity and reputation but conversely, less satisfied with the after sales service, specifically in respect to the companies performance in handling complaints, which exhibit the lowest mean value of 3.45. All the standard deviations exhibit a value of less than 1, which suggest that the results cluster around the mean. The overall mean score for direct selling company satisfaction scale is 3.86 which are above the mid-point of the response scale. 239
Table 6.18
Reliable and trustworthy Enquiry service responsiveness Companys reputation Sales campaigns/ promotion Corporate information/publicity Handle complaints promptly Concern about customers Company popularity (well known) Reasonable services charge Product return/ adjustment policy Overall direct selling company
In essence, the overall satisfaction evaluation based on the mean score in respect of product, direct seller and direct selling company performance implies that product satisfaction yields the highest with a mean score of 3.89; followed by the direct selling company of a mean value of 3.86 and lastly the direct seller of a mean score of 3.71.
6.5.6
It is envisaged that the current research is to provide findings that are be both theoretically and operationally relevant. In this section, the results of the Importance Performance Analysis are depicted (see Table 6.19, 6.20 and 6.21). Then the results are visually displayed in the form of a satisfaction gap graph and quadrant chart for each aspect of the direct sales marketing channel system. Both the satisfaction gap graph and quadrant chart are operational and descriptive in nature.
IPA has been a popular tool for understanding customer satisfaction and one that could provide suggestions to management for specific areas of improvement. Martilla and James (1977) first advocated this simple technique, and over the years, many different IPA variations have emerged (Bacon 2003). This analysis was based on perceived importance and attribute performance ratings evaluated by respondents, on which no statistical manipulation has been conducted. It is a practical and easy to-use tool for managers who are pressed for time and to comprehend it does not require a computer or statistical skills. In addition, this useful tool depicts visually customer priorities (importance) against performance evaluation. The information derived from this analysis
240
supports common managerial decisions. For example, it provides guidance for action plans in allocating resources (Bacon 2003; Chu 2002; Lambert et al. 1997; Oh 2001).
It has been consistently reported in previous research that customer satisfaction is a function of both consumer expectations related to importance attributes and perceived performance (e.g. Parasuraman et al. 1988). Interestingly, the utilisation of this analysis provides constructive tools in evaluating both of these variables simultaneously. Respondents were asked to express both the extent to which they felt each attributes represented an important consideration to them, and performance concerning these attributes. With regard to the importance evaluation, respondents are asked to rate the importance of the attributes in fulfilling their satisfaction and in the performance measurement respondents is requested to indicate their level of satisfaction with those particular attributes.
Given the nature of the data, where two sets of observations were obtained from similar respondents, the relevant statistical procedure is the paired-sample t-test. This technique is used to determine if the means score of both observations are significantly different. Results are presented in tabular form, which illustrate the performance and importance mean score, mean differences and the result of significant differences (see Table 6.19, 6.20 and 6.21). In addition, a graphical presentation employing line graph (satisfaction gap) and quadrant chart will be presented for each aspect (product, direct seller and direct sales company)
Satisfaction Gap Graph The purpose of utilising the gap graph is to identify specific area of opportunity for the direct sales firms to enhance their offerings to fulfil customers satisfaction. The size of the gap indicates where the direct sales firms are falling short in relation to performance and importance mean score on each attribute (see Figure 6.1, 6.2 and 6.3). Attributes with large gaps suggest that direct sales firms should improve their performance in this area, particularly if the attributes are considered important by the customers in meeting their satisfaction.
241
Quadrant Chart Quadrant charts have been widely used as analytical tools that yield a better understanding of customer satisfaction, identifying and prioritising critical area of improvements. The quadrant chart utilised in this thesis is adapted from the work of various authors (Albrecht and Bradford 1990; Barsky and Labagh 1992; Martilla and James 1977; Schlentrich 2001). The chart is a two-dimensional grid which visually depicts the gaps between perceived importance and performance rating assessed by respondents. The survey data sets two customer-satisfaction dimensions. Importance scores are plotted on the horizontal axis and difference scores are plotted on the vertical axis. The chart is then subdivided into four quadrants by drawing a vertical line at the mean of the overall importance score (which is 4.09) and the mean of overall difference score (which is -0.31) displayed by the horizontal line. Albrecht and Bradford (1990) suggested including another horizontal line at 0, which indicates performance score equals importance. (see Chart 6.1). It is interesting to note that Martilla and James (1977) assert that the vertical and horizontal axis on the grid is a matter of judgement. The placement of these axes is considered a relative rather than absolute level of importance and performance. The position of a plot on the grid indicates the appropriate strategy to each attribute: Focus here, Good work, Overkill, Low priority, Weakness and Opportunity. The following are the interpretations of zones in the quadrant chart:
(1)
Good work:
(importance score is greater than the overall mean of the importance scores) and is perceived as being performed well (performance score is greater than importance score). This portion of the chart is also referred to as competitive strength (Barsky and Labagh 1992). This may indicate that the direct selling product is performing extremely well on this attribute and should seek to maintain superior evaluation and exploit their competitive potential as well as continue to invest their effort and resources on them.
(2)
Focus here:
(importance score is greater than the overall mean of the importance scores) yet it does not perform well (importance score greater than performance score). According to Barsky and Labagh (1992), this zone is critical to gaining market share and this attribute
242
can be shifted to into critical strength if resources could be reallocated from less important attributes
(3)
Possible overkill:
important (an importance score less than the overall mean of the importance scores) yet it is reported to perform well (the performance score greater than importance score). This quadrant identifies areas that are not particularly significant to the customer and indicates wasted resources. Therefore, the company should better allocate these resources elsewhere, for example the focus here quadrant.
(4)
important (an importance score less than the overall mean of the importance scores) yet it is perceived as not performing well (the difference score is lower than the mean lower than the mean of the difference score). Since the gap is large, it is possible that the attributes that fall in this region of the chart suggest an unrealised opportunity (Schlentrich 2001). Weakness: This zone falls in between good work and focus here. The customer
(5)
feels that a specific attribute is highly important (an importance score greater than the overall mean of the importance scores). However, its performance is assessed as being marginally less than the importance score (the difference score is negative but greater than the overall mean of the difference scores). It suggests that management should first allocate resources to improve performance attributes in the focus here region, then take action to improve the attribute in the weakness region of the chart. Low priority: This zone falls between possible overkill and potential
(6)
opportunity. The customer feels that a specific attribute is not deemed as important (an importance score lesser than the overall mean of the importance scores) and its performance is assessed as being marginally less than the importance score (the difference score is negative but greater than the overall mean of the difference scores). It suggests that management should not give much priority to improving attributes that fall into this category.
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6.5.6.1
Table 6.19 provides an account of the mean score concerning product attributes in terms of product importance and product performance, mean differences and results of pairedsample t-test. Table 6.19 Mean scores and paired-sample t-tests as indicators of differences between Product Importance and Product Performance
Items Price of product Product performed as claimed Product is multifunctional /multipurpose Product packaging Effectiveness of product Product guarantee Product choice/variety Product availability Product information adequacy Product catalogue visual appearance Innovative and unique product Overall mean score ** p< 0.01; ***p< 0.001 Importance Mean 4.02 4.16 3.94 3.93 4.32 4.24 4.07 4.13 4.17 4.02 3.97 4.09 Performance Mean 3.60 3.67 3.67 3.93 3.78 3.66 3.85 3.83 3.86 4.00 3.72 3.78 Mean differences -0.42 -0.49 -0.25 0.00 -0.55 -0.58 -0.22 -0.30 -0.31 -0.02 -0.25 -0.31 Significant t (2 tailed) 0.000*** 0.000*** 0.000*** 0.861 (NS) 0.000*** 0.000*** 0.000*** 0.000*** 0.000*** 0.272 (NS) 0.000*** 0.000***
Generally, the mean values of product importance are higher compared to the mean value of product performance, except on the product packaging. The mean scores of product performance and importance on all attributes are significantly different at p<0.001 except for product packaging and product catalogue visual appearance. The highest mean score on the importance rating is for product effectiveness, with a mean difference of 0.55 which is considered significant at p<0.001. This result can be ascribed to the fact that the effectiveness of a product is the utilitarian feature that provides the basic function or benefit that the product is expected to deliver. Low evaluation on performance on these attributes could make a respondent feel less satisfied.
244
In addition to the tabular presentation of the results findings, Figure 6.1 illustrates the gaps among product attributes. The chart shows that the mean score of product packaging importance and performance identical, which suggests that the product packaging fulfils exactly the respondents perception of its level of importance. It is interesting to note that product packaging is evaluated as the least important attribute. In turn, the widest gap is the product guarantee attribute, which is rated highly in terms of importance but evaluated considerably lower in terms of performance.
Figure 6.1
5 4.5 4 3.5
mean score
The implication of these findings could suggest to the direct selling organisations precisely the magnitude of change necessary to improve their product offering.
6.5.6.2
The findings of the quadrant chart demonstrate that in the product aspect none of the attributes fall in the good work and possible overkill zones. While items 2 (product performed as claimed), 5 (effectiveness of product) and 6 (product guarantee) fall in the focus here region. The chart indicates that only item 1 (price of product) lies in this potential opportunity zone. Items 7 (product choice/variety) and 9 (product information 245
Importance Satisfaction
adequacy fall in the weakness region. Whereas item 3 (product is multipurpose/ multifunctional), item 4 (product packaging), item 7 (product choice/variety), item 10 (product catalogue visual appearance) and item 11 (innovative and unique product) fall in the low priority category.
Difference
0.2 0.1 0 -0.1 -0.2 -0.3 -0.4 -0.5 -0.6 -0.7 -0.8 3.5
Possible Overkill
Good work No 'difference' Weakness 11 1 2 6 5 Focus Here 7 8 9 Overall mean of 'difference' scores (-0.31)
4 Low Priority 3
10
Potential Opportunity
3.6
3.7
3.8
3.9
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
Importance
1. Price of product 2. Product performed as claimed 3. Product is multifunctional /multipurpose 4. Product packaging 5. Effectiveness of product 6. Product guarantee
7. Product choice/variety 8. Product availability 9. Product information adequacy 10. Product catalogue visual appearance 11. Innovative and unique product
In essence, the results suggest that management should give priority into improving the performance in relation to effectiveness of their product, offer a better product guarantee and ensure that direct sellers do not overclaimed their product performance in order to increase customer satisfaction with their products. These three attributes are revealed to be very important attributes in satisfying the customer yet the gap between importance and performance of these attributes is among the largest.
6.5.6.3
Table 6.20 describes the results of the mean score with regard to direct seller dimension in terms of their importance and performance, mean differences and results of paired-sample t-test to test for significant differences between both mean scores.
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Table 6.20 Mean scores and paired-sample t-tests as indicators of differences between Direct Seller Importance and Direct seller Performance
Items Knowledgeable of products and services Capable and competent Being consistently courteous Following through on his/her promise Provide payment flexibility (instalment) Trustworthy After sales service Giving personal advice and attention Continuity contact Availability of direct seller Maintain a professional appearance Have customer interest at heart Sales demonstration/ presentation Overall mean score
* p< 0.05; ** p< 0.01; ***p< 0.001
Importance Performance Mean Mean Mean differences 4.21 4.06 4.08 4.05 3.84 4.16 4.01 4.05 3.92 4.07 3.95 4.08 4.02 4.04 3.81 3.78 3.78 3.62 3.41 3.67 3.53 3.64 3.59 3.68 3.65 3.59 3.67 3.65 -0.40 -0.28 -0.30 -0.43 -0.43 -0.49 -0.48 -0.41 -0.33 -0.39 -0.30 -0.49 -0.35 -0.39
Significant (2 tailed) 0.000*** 0.000*** 0.000*** 0.000*** 0.000*** 0.000*** 0.000*** 0.000*** 0.000*** 0.000*** 0.000*** 0.000*** 0.000*** 0.000***
Overall, as expected the mean score of each direct seller dimension in terms of importance evaluation are higher than performance. The mean score of each dimension is reported to be significantly different at p<0.001 level of significance). The highest mean score on importance rating is the direct seller being knowledgeable of product and services, with a mean value of 4.21, and the same attribute is reported to be highest in respect to performance evaluation. However, the mean scores between them are significantly large. Upon inspection of the results demonstrated in Table 6.20, it appears that payment flexibility is evaluated as the least important attribute with mean score of 3.84 and this particular attribute is rated the lowest score in terms of performance (mean = 3.41). The mean score difference between both measurements is considered significantly large at 0.43. This finding suggests that the direct selling organisations should provide more effective training to their direct seller, and on the other hand direct sellers themselves must be 247
proactive in searching for relevant information, data and statistics pertaining to the products or services they sell.
Figure 6.2 depicts the gaps between the direct seller important mean scores and performance mean score. It is worth noting that both line graphs are parallel to each other with no meeting point. The largest gap is trustworthy, which suggest that even though it is rated highly in respect to importance, in terms of performance it is just slightly above 3, the scale mid-point.
Figure 6.2
4.5 4 3.5
mean score
Kn ow le
dg ea b
item
Importance Satisfaction
In essence, these findings imply that the direct sellers to should improve their performance of the entire dimension examined in this scale. In turn, as for the direct selling organisation, they should provide effective training to improve their distributors knowledge and above all the quality of their salesmanship. 248
6.5.6.4
Chart 6.2 suggests that generally, the direct seller aspects perceived by the customers are not performing well.
Chart 6.2 Direct Seller Quadrant Chart
Difference
0.2 0.1 0 -0.1 -0.2 -0.3 -0.4 -0.5 -0.6 -0.7 -0.8 3.5 3.6 3.7 3.8 3.9 4 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 5
Importance
1. 2. 3. 4. 5. 6. 7.
Knowledgeable of products Capable and competent Being consistently courteous Following through promise Payment flexibility Trustworthy After sales service
Giving personal advice /attention Continuity contact Availability of direct seller Maintain professional appearance Have customer interest at heart Sales demonstration/ presentation
The chart reveals that the entire direct seller attributes fall short of the mean of importance scores (that means that importance score is higher than performance scores). Furthermore, the majority of the attributes mean difference is greater than the overall mean difference (which is -0.39). In addition, the gap results imply that three items (which are trustworthy, availability of direct seller and have customer interest at heart) fall in the zone of focus here. This implies that these are the attributes the direct seller which need to be improved immediately in order to increase customer satisfaction. It is interesting to note that no items fall in the category of good work and possible overkill. The majority of the attributes fall in the low priority and weakness zones.
249
6.5.6.5
Table 6.21 demonstrates the results of mean score with regard to direct selling companies dimensions in terms of their importance and performance, mean differences and results of paired-sample t-test to test for significant differences between both mean scores.
Table 6.21 Mean scores and paired-sample t-tests as indicators of differences between Direct Selling Company Importance and Company Performance
Items Importance Mean 4.18 4.15 4.19 3.99 3.98 4.12 4.18 4.05 4.05 4.08 4.10 Performance Mean 3.77 3.68 3.94 3.71 3.63 3.44 3.65 4.05 3.57 3.59 3.70 Mean differences -0.41 -0.47 -0.25 -0.28 -0.34 -0.68 -0.53 0.00 -0.48 -0.49 -0.24 Significant t (2 tailed) 0.000*** 0.000*** 0.000*** 0.000*** 0.000*** 0.000*** 0.000*** 1.000 NS 0.000*** 0.000*** 0.000***
Reliable and trustworthy Enquiry service responsiveness Companys reputation Sales campaigns/ promotion Corporate information/ publicity Handle complaints promptly Concern about customers Company popularity (well known) Reasonable services charge Product return policy Overall mean score
*p< 0.05; ** p< 0.01; ***p< 0.001
As expected the mean score of each direct selling company dimensions in terms of importance evaluation are higher than performance, except for company popularity. The mean scores of each dimension are reported to be significantly different at p<0.001 level of significance, again, except for company popularity. It is worth noting that with respect to company popularity, both the mean value on performance and importance are the same. This indicates that there is no gap between both mean evaluations; hence, it could be concluded that the company has successfully fulfil their customers satisfaction; however it does not exceed their customer expectation which would lead to customer delight. The direct selling company dimension in terms of importance held in highest regard by the respondents are: Companys reputation (mean = 4.19); reliable and trustworthy (mean= 4.18) and concern about customer (mean = 4.18) and their mean differences are 0.25, 0.41 and 0.53 respectively. 250
The results of these findings imply that the direct selling company could improve their customer satisfaction by narrowing the gaps of these important dimensions if they are to retain their customers. Otherwise, their customers could switch to other companies, of which there are reported to be over 350 in the market currently (Ministry of Domestic Trades and Consumer Affairs Report, 2001). Conversely the companys corporate information/publicity is rated as the least important with mean score (mean = 3.98) and mean score for performance evaluation (mean = 3.63) and the mean score difference between both measurements is significantly large at 0.34.
Figure 6.3 clearly portrays the gaps between the direct selling company importance mean score and performance mean score.
Figure 6.3
4.5
3.5
mean score
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1.5
0.5
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251
co m
ve
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Importance Satisfaction
pa
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It should noted that both line graphs portray some narrow and wider gaps between them, with one point hitting performance right the at company popularity attribute. The largest gap is at handle complaint promptly, which is considerable at 0.68. The result suggests that even though it is rated highly with respect to importance, which terms of performance, it is just slightly above 3, the scale mid-point. In essence, these findings imply that the direct selling company should take some actions to improve their performance specifically with respect to the quality of their customer service.
6.5.6.6
Chart 6.3 presents the quadrant chart for the direct selling company attributes. The results demonstrate that all the attributes fall short of mean importance scores. In other words, all attributes of the company aspects mean performance scores are lower than the mean importance scores, except for company popularity which indicate that there is difference between these two scores. In addition, all the attributes mean difference scores are larger than the overall mean difference scores except company popularity.
Possible Overkill
Difference
0.2 0.1 0 -0.1 -0.2 -0.3 -0.4 -0.5 -0.6 -0.7 -0.8 3.5 3.6 3.7 3.8 3.9 4 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 5
Low Priority
8 3 4 5 9 10 2 6 1 7
Weakness
Potential Opportunity
Focus Here
Importance
1. Reliable and trustworthy 2. Enquiry service responsiveness 3. Companys reputation 4. Sales campaigns/ promotion 5. Corporate information/publicity
6. Handle complaints promptly 7. Concern about customers 8. Company popularity (well known) 9. Reasonable services charge 10. Product return/ adjustment policy
252
No items of the company aspect are located in the Possible overkill and Good work zones. The chart shows that two items are in potential opportunity zone (reasonable service charge and product return / adjustment policy) and three items fall in the low priority zone (sales campaigns/promotion, corporate information/publicity and company popularity). Whilst two items fall in the weakness zone (reliable and trustworthy and companys reputation). Additionally, three attributes of company aspect fall in the focus here zone (enquiry service responsiveness, handle complains promptly and concern about customers).
This implies that the direct selling companies should invest more effort and resources on these three attributes in order to make their customers more satisfy. In summary, it could be argued that in regards to overall importance evaluation of product, direct seller and direct selling company, their mean score of 4.09, 4.04 and 4.10 respectively suggest that company is the most important aspect, followed by product finally direct seller.
The power of IPA is in the ability to use the information to determine the various courses of action that a company can pursue. For instance, when the mean scores of perceived performance is higher than the mean importance scores; it implies that this is an area of potential over-investment (i.e. possible overkill). Conversely, if the mean importance exceeds overall the mean performance score, then the specific attribute requires immediate attention. This indicates that the direct sellers or the direct selling companies should give their priority (i.e. focus here zone) to make improvement. By improving the importance attributes that fall short of performance judgement by the customers, the company could yield the desired outcomes and prevent money being spent on improving unimportant attributes. In short, the findings could provide clear guidelines for direct sellers or companies in allocating and aligning internal resources and effort in order to maximise customer satisfaction and perhaps subsequently their retention. The results of customers evaluation of satisfaction through the ImportancePerformance Analysis have several implications to academics and practitioners, direct selling associations and representatives from relevant ministry. Both the quadrant chart and satisfaction gap graph are relatively easy to interpret and comprehend; hence, it is very beneficial and appropriate if these findings are to be presented to the non-academic audience. Even though IPA is widely used as an analytical techniques especially by 253
practitioners, it is not without limitations, for example IPA use direct ratings of importance known as stated importance (e.g. importance rated on a 5-point scale anchored at not at all important and extremely important). On the other hand, others have suggested that indirect measures (derived importance) should be used to estimate the importance of attributes by using standardised regression coefficients. How and why direct and indirect methods may differ has long been debated. The stated importance method has been criticised for being a measure that reflects a social desirability and it has been found to be uniformly high as some customers rate everything as very important. Even though the derived importance method is probably not distorted by the same biases as direct measures, it may be distorted when the assumptions underlying their statistical models are violated (Bacon 2003 p.60). However, Green et al. (1981) postulate that both types of measures of importance can predict product preferences. In addition, they provide evidence that the social desirability bias in direct measures of importance is not significant.
The endeavour to employ IPA is in response to the call made by Piercy (2002 p. 350) who confidently points out that, much research in marketing appears trivial and irrelevant to practitioners of marketing and he further suggests that, the alternative is the adoption of research and publishing strategies for impact with diverse audiences, taking research priorities from practise.
6.5.7
Disconfirmation
The disconfirmation construct is operationalised based on attribute and dimension level (i.e. Product disconfirmation, direct seller disconfirmation and direct selling company disconfirmation). Respondents are requested to rate each attribute and overall evaluation concerning performance against their expectations.
6.5.7.1
Product Disconfirmation
Table 6.22 reveals that the product attributes held in the highest regards by respondents are product catalogue visual appearance with a (mean = 52); product choice/variety with a (mean = 3.50) and innovative and unique product with a (mean = 3.49). The lowest 254
mean score is price of product item, with a (mean = 3.28). The overall product disconfirmation mean score is (mean = 3.50). All the other items were rated slightly above 3, which represent the mid-point of the scale. The standard deviation of each item is less than 1.00, which suggests that the results are consistent and they are clustered near the mean. Likewise for product importance and product performance dimension, the disconfirmation mean score is slightly lower. Product Disconfirmation Descriptive Statistics
Mean 3.52 3.50 3.49 3.48 3.43 3.41 3.37 3.37 3.34 3.30 3.28 3.50 SD 0.75 0.75 0.75 0.80 0.79 0.71 0.76 0.76 0.78 0.71 0.69 0.69 n 400 400 400 400 400 400 400 400 400 400 400 400
Table 6.22
Items Product catalogue visual appearance Product choice/variety Innovative and unique product Product information adequacy Product availability Product packaging Product is multifunctional/multipurpose Effectiveness of product Product guarantee Product performed as claimed Price of product Overall product
6.5.7.2
Results from Table 6.23 illustrate that, the three items rating highest by the respondents are: knowledgeable of products and services (with a mean = 3.47); followed closely by giving personal advice and attention (with a mean = 3.46) and capable and competent (with a mean = 3.45). The item, provide payment flexibility, exhibits the lowest mean score of 3.35. Overall, direct seller mean score is 3.47. All the other items examined in the measurement scale obtain score of slightly above 3, which represent the mid-point of the scale. The standard deviation of each item is less than 1.00, which suggests that the results are consistent and they are clustered near the mean. Compared to the evaluation of direct seller importance and performance dimension, direct seller disconfirmation mean score is considered slightly lower.
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Table 6.23
Items Knowledgeable of products and services Giving personal advice and attention Capable and competent Being consistently courteous Trustworthy Availability direct seller Maintain a professional appearance After sales service Sales demonstration/ presentation Have customer interest at heart Following through on his/her promise Continuity contact Provide payment flexibility (instalment) Overall direct seller
6.5.7.3
A detailed examination of the results in Table 6.24 show that that all the items in the measurement scale exhibit mean scores of slightly above 3, which is the mid-point of the scale investigated. The results reveal that, the top two items rating highest by the respondents are: company popularity (with a mean of 3.60) and companys reputation (with a mean of 3.54). Item on handle complain promptly, exhibit the lowest mean score of mean = 3.37. Overall, direct selling company mean score is 3.51. The mean score ranking of the top two items and the lowest items are consistent with ranking in terms of performance. The standard deviation of each item is less than 1.00, which suggests that the data are consistent and they are close to the mean. Direct Selling Company Disconfirmation Descriptive statistics
Mean 4.60 3.54 3.44 3.44 3.43 3.42 3.42 3.40 3.39 3.37 3.51 SD 0.77 0.68 0.80 0.81 0.71 0.68 0.75 0.77 0.76 0.77 0.75 n 400 400 400 400 400 400 400 400 400 400 400
Table 6.24
Items Company popularity (well known) Companys reputation Sales campaigns/ promotion Concern about customers Reliable and trustworthy Enquiry service responsiveness Corporate information/publicity Product return/ adjustment policy Reasonable services charge Handle complaints promptly Overall direct selling company
256
In contrast to the evaluation of direct selling company importance and performance dimension, the direct selling company disconfirmation mean score is slightly lower. The overall direct selling company disconfirmation mean score is the highest with a mean value of 3.51 (see Table 6.24), followed closely by product disconfirmation which exhibits a mean value of 3.50 (see Table 6.22) and lastly direct seller disconfirmation with a mean value of 3.47 (see Table 6.23).
Overall, the disconfirmations mean score yield slightly lower than performance and importance constructs. These results imply that the majority of the participants in this study rated most items in the scale at just as expected. The mean values of the entire items exhibit score of below 4.00 but above 3, which is the mid-point of the scale. Hence, we could conclude that all the items in the scale obtain a score just slightly above just as expected while unable to achieve response scale of 4, which denotes better than expected.
One possible explanation for this phenomenon is suggested by Oliver (1997) where he suggests that zone of indifference occurs around the range of performance which is acceptable and essentially fulfils the customers needs. For instance, the direct sellers promise their customers to deliver their order within a week. It could be assumed that if the direct sellers deliver the products 2 days earlier or 2 days later, most customers will not be very delighted or terribly upset. Figure 6.4 illustrates the indifference zone in detail.
Figure 6.4 illustrates a predetermined expectation level, shown by the dashed horizontal line. At this level, the horizontal axis indicates performance level. The vertical axis shows disconfirmation ranging from negative disconfirmation through zero
disconfirmation (confirmation) to positive disconfirmation. The straight line tilted at 45 degrees illustrates how disconfirmation will increase from negative to positive as performance goes from low to high. The curve twisting around this straight line shows the distortion that would be created by the indifference zone. The indifference zone is indicated by the grey shaded area, illustrates the range of performance both below and above the expectation level that customers would accept as meeting their expectations. The implication of this phenomenon is that trying to exceed expectations may be more difficult because the extent of the acceptance area is large. It could be concluded that if 257
customers are tolerant of short falls in performance, they may also be equally insensitive to performance marginally exceeding expectations. In essence, perhaps this phenomenon explains why a considerable number of respondents rate performance of majority of the items investigated in the disconfirmation scale as performed as expected.
Zero
Expectation Level
Negative
Low Performance Performance Matching Expectation
Source: Adapted from Oliver, 1997
High Performance
6.5.8
Overall Satisfaction
Overall satisfaction is a summary of the entire three dimensions of the direct sales marketing channel. (i.e. product, direct seller and direct selling company). It is the core construct of this study. Respondents are requested to evaluate their overall feeling towards buying beauty care or healthcare products through the direct sales purchasing system. A three-item, five-point bipolar phrases was utilised to capture the respondents overall feeling. Results from Table 6.25 demonstrate that item 1 in the scale records the highest score (mean = 3.82); followed by item 2 with a (mean = 3.62). Item 3 exhibits the lowest score (with a mean of a mean = 3.58). Overall, the average of the three items exhibit a mean score of 3.67, which suggests that the respondents are experiencing a positive feeling, or, are quite satisfied purchasing through a direct sales channel.
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Table 6.25
(3) 24.5%
(4) 56.8%
(3) 34.0%
(4) 48.8%
(3) 40.5%
(4) 42.0%
6.5.9
Behavioural Intentions
Behavioural intentions are the consequences of satisfaction, that will be investigated by this construct. Unlike previous studies, whereby only a few intentional behaviours were investigated, in the current study, we would like to examine various intentional behaviours, for instance the intention to repurchase, the intention to recommend the product, direct seller and company to others, intention to join the direct sales business, the intention to switch company and to complain.
Table 6.26 reveals that the intentional behaviour items held in the highest regards by respondents are: I will complain to my direct seller if I experience problems with the product (with a mean = 4.29); I will switch to a different product if I experience a problem with my present one (with a mean = 4.02) and follow closely by, I will complain to my friends and family if I experience a problem (with a mean = 4.01). The lowest mean value is regarding respondent propensity of joining the direct selling business themselves in future (with a mean = 3.12). All other items were rated above 3, which represents the mid-point of the scale utilised. The standard deviation of each item is less than 1.00, that is, they are small and hence consistent.
Interestingly, the highest items rated by respondents with respect to intentional behaviour are related to unfavourable consequences rather than favourable intentional behaviour. In 259
addition, the popular notion that satisfied customers will inevitably be a direct seller themselves is reinforced and confirmed but very weak, as the mean score is just slightly above 3. This indicates that the score is very close to response scale might or might not rather than probably will. Intentional Behaviour Descriptive Statistics
Mean 4.29 SD 0.93 n 400
Table 6.26
1.
Items I will complain to my direct seller if I experience problems with the product I will switch to a different product if I experience a problem with my present one I will complain to my friends and family if I experience a problem I will repurchase the same product from this direct seller when I need one in future If someone asked my advice, I would recommend my direct seller I will encourage my friends to buy beauty/healthcare products from my direct seller I will say positive things about this direct selling company to other people I will say favourable things about this product to others I will say positive things about my direct seller from this company to others
2.
4.02
0.98
400
3. 4.
4.01 3.99
1.01 0.88
400 400
5. 6. 7.
8. 9.
3.82
0.88
400
10. I will continue to purchase this product even if my direct seller quit or moves to another location 11. I will buy other product/s from my direct seller from this company 12. I will continue to use this direct selling company as the main provider of my beauty/healthcare products 13. I will at least maintain the same amount of purchase with this company 14. I will continue to purchase this product even if there was a slight increase in price 15. I will continue to purchase this product from this direct selling company even if I find an alternative with a lower price 16. I will consider joining the direct selling business myself in future
3.34
1.05
400
3.12
1.11
400
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6.6
In this section, respondents are requested to give their opinion based on all their previous experiences purchasing products from the direct sales channel. The open-ended questions are included in the questionnaire as question 54, 55 and 56 (see questionnaire in Appendix 5.1 (a)). Likewise the previous constructs, specifically concern respondents specific purchase transactions, in this question we would like to investigate the participant overall opinion and attitudes. Open-ended questions are employed to capture responses from respondents. Respondents are requested to indicate what was/were the primary reason/reasons if they no longer purchase product from direct sellers. Respondents should indicate one or more reasons but not exceed three. They could skip this question if it is not applicable to them.
6.6.1
Upon detailed examination of responses from the participants, the results are tabulated in Table 6.27. The results are described in terms of percentage, which is based on the number of survey participants providing a response. For this specific question 136 respondents give their feedback. Most frequently mentioned factors concern the price of the product (i.e. 51 per cent), followed by product effectiveness (35 per cent), product did not perform as claimed (29 per cent), product unavailability (26 per cent) and switching to different brands (24 per cent).
1. 2. 3. 4. 5. 6. 7. 8.
Price of product expensive Product ineffective (side effect) Product didnt perform as claimed Product unavailability Switch to different brand Direct seller unfavourable attitude Inconvenience business hours Others (no delivery system, no variety) Total survey participant providing response
70 47 39 36 32 15 7 7 136
51 35 29 26 24 11 5 5
*Percentages are based on the number of survey participants providing a response. Respondents may indicate more than one factor
261
These findings suggest that direct selling companies should review their pricing strategies, commensurate with product quality, for instance, product effectiveness and product performance may be proxy in implying quality. Customers are willing to pay a reasonably high price if it is justified by higher quality.
6.6.2
In this question, respondents are requested to list down three factors that could induce them to make a repeat purchase from direct selling company. Results from this question are presented in the tabular form, which describes response frequency in terms of the number of times (incidents) the particular factors are mentioned by respondents (see Table 6.28).
Table 6.28
1. 2. 3. 4. 5. 6. 7. 8. 9.
Effectiveness of product Reasonable price Availability of product Availability of direct seller Sales campaign and promotion Direct seller (knowledgeable, courteous and honest) Product guarantee Continuity of contact by direct seller Popularity of company
10. Save time and money 11. Ingredients used must be halal 12. Product return policy 13. Others (after sales service, delivery, flexible payment, innovative product, personal advice) Total survey participant providing response
360
*Percentages are based on the number of survey participants providing a response. Respondents may indicate more than one factor
262
Upon detailed examination of responses from the participants, the results derived from Table 6.28 illustrate that 300 survey participants or 83 per cent indicate that product effectiveness is the reason for repeat purchase. This finding reinforces the result in product attributes importance rating which suggests that product effectiveness exhibits the highest mean score (see Table 6.19). The second highest incident is reasonable price, which reported 55 per cent. In line with the previous result (see Table 6.36), it implies that price of product was the main reason of respondents did not repurchase. The result clearly indicates that respondents will repurchase if the price of the product is reasonable. The third most vital reason for repeat purchase is availability of product, which accounted for 35 per cent. The same factor, product unavailability was also claimed to be one of the popular reasons why respondents did not repurchase product from the direct selling company.
The implication of these findings suggest that the direct selling companies must work in concerted effort with their manufacturers in the direction of improving their product effectiveness if they envision to retain their customers and to remain viable in this highly competitive industry. As suggested in section 6.6.1, price is one of the main reasons why customers did not repurchase and in turn, it is one of the distinct factors for repurchase from the direct selling company. Evidently, the pricing strategy of the direct sales companies must reflect their product and service quality. If the equilibrium is achieved, the customer has no qualm in paying a premium price.
6.6.3
In this section, respondents are requested to suggest the improvements in the present system of the direct selling industry that they would like to see in future, which could improve the industry both for itself and consumers at large. Results from this question are presented in the tabular form, which describes response frequency in terms of number of times (incidents) the particular factors are mentioned by respondents. Percentages are based on the number of survey participants providing a response. Detailed examination of responses from the participants, results derived from Table 6.29 report that the most mentioned improvements suggested by the sample are: control quality and price; good promotion, specifically the utilisation of email, internet, TV, radio and catalogue; reduce prices especially for healthcare products. 263
Table 6.29
1. 2. 3. 4. 5. 6. 7. 8. 9.
Control quality and price Good promotion (internet, email, TV, radio and catalogue) Reduce price (specifically healthcare products) Direct seller (availability, continuity of contact and professional) Direct seller should be knowledgeable of product or services More stockist/agency (shopping complexes) Packaging (colourful and interesting) Concern about customers Flexible payment
55 46 45 31 25 22 14 12 12 11 10 156
35 29 29 20 16 14 9 8 8 7 6
10. Effective sales demonstration 11. Payment by credit card and inter-banking Total survey participants providing response
Percentages are based on the number of survey participants providing a response. Respondents may indicate more than one factor
It could be concluded that the result from these findings imply that the direct selling companies should improve their price so that it is aligned with their product quality. Further, there is an indication that the respondents would like the direct selling companies to promote their products not only via conventional electronic media, but also effort must be made to get their products to be promoted through the internet. It could be argued that direct sellers must equip themselves with pertinent product knowledge and continuously service their customers. This suggestion is particularly critical because unlike the conventional store retailing system, customers could not obtain their product supply without their direct seller servicing them on regular basis. Furthermore, since 83 per cent of the customers said that the product itself is the main reason for repeat purchase, it is imperative not to lose customers due to salesperson turnover or customer mobility.
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6.7
Concluding Remarks
In this chapter, initially we presented an overview of the sample demographic characteristics and buying behaviour. At this point, the reader should have the feel for the sample profile and their consumption pattern and behaviour with regards to purchasing beauty or healthcare products from the direct selling channel. An impression could be formed of the characteristics of the purchasers, specifically in terms of product category they purchased. For instance with respect to beauty care customers, they are single, younger, have attained lower education, and belong to middle-lower income group. Healthcare buyers are married, more mature in term of age, have attained higher education and belong to middle-higher income group. The overall mean score of the core construct in this study that is Overall Satisfaction is 3.67, which indicates that customers experience positive feeling towards the direct sales channel in general. The overall results derived from other variables reveal that a majority of the mean values are higher than 3, which is the mid-point of the scales employed. Accordingly, most of the standard deviations yield a value of less than 1, which implies that the data are distributed closely around the mean and are consistent. The findings derived from the open-ended questions reinforce and support the results of the structured questions.
Results observed in this procedure are important for further statistical analysis, which will utilise more robust and sophisticated statistical procedures such as exploratory factor analysis, confirmatory factor analysis, correlation analysis and structural equation modelling, by employing AMOS statistical software.
265