Thesis Title: Determinants of Customer's Complaint Intention of Nanning's. ( China ) Retail Store. Name: Huajuan He. Degree: Mater of Business Administration.
Determinants of Customer’s Complaint Intention of Nanning’s (China) Retail Store Huajuan He http://eprints.utcc.ac.th/id/eprint/1323
© University of the Thai Chamber of Commerce EPrints UTCC http://eprints.utcc.ac.th/
DETERMINANTS OF CUSTOMER'S COMPLAINT INTENTION OF NANNING'S (CHINA) RETAIL STORE
MS. HUAJUAN HE
A Thesis Submitted in Partial Fulfillment of the Requirement for the Degree of Master of Business Administration Department of International Business International College University of the Thai Chamber of Commerce 2012
Thesis Title:
Determinants of Customer’s Complaint Intention of Nanning’s ( China ) Retail Store
Name:
Huajuan He
Degree:
Mater of Business Administration
Major Field:
International Business
Thesis Advisor:
Dr. Pussadee Polsaram
Graduate Year:
2012
ABSTRACT The study aims to research determinants of customer’s complaint intention of Nanning’s ( China) retail store. The main purpose of this study were to identify the relationship between the demographic, level of dissatisfaction, perceived possibility of success, attitude toward complaint with complaint intention. The customers who had previously shopping in Nanning’s retail store was represented the sample of 450 respondents. The t-test , ANOVA and simple regression were used to analyzed the relationship .The finding showed that demographic has a significant relationship with complaint intention and level of dissatisfaction, perceived possibility of success and attitude toward complaint have positive relationship with complaint intention. iv
As a whole, this research provide valuable suggestions to retail store and help them to address the key factors which influences customer complaint intention and establishing a perfect way to handle customer complaint. It also helps to improve retail store performances to meet customer needs, retain old customers , attract new customers and create more profit. And the useful data and informations in this research can also provide fellow researchers to explore customer complaint intention in other industry.
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ACKNOWLEDGEMENTS My deepest gratitude goes first and foremost to my dear advisor Dr.Pussadee Polsaram who sacrificed her valuable time on kindly guidance and constructive advices in guiding me continue study this topic. She has walked me through all the stages of the writing of this thesis. Without her consistent and illuminating instruction, this thesis could not finish. Secondly, I would like to say thank you to Dr. Phusit Wonglorsaichon, thank for the useful research classes in guiding me how to do the thesis, and thank for the precious comments he gave me whenever difficulties came. Finally, my thanks would go to my beloved family for their loving considerations and great confidence in me all through these years. I also owe my sincere gratitude to my friends and my fellow classmates who gave me their help and time in listening to me and helping me work out my problems during the difficult course of the thesis.
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TABLE OF CONTENTS Page Page ABSTRACT..................................................................................................................... iv ACKNOWLEDGEMENT.................................................................................................. vi TABLE OF CONTENT.................................................................................................... vii LIST OF TABLES............................................................................................................ x LIST OF FIGURES.......................................................................................................... xii Chapter 1: Introduction 1.1 Research Background ................................................................................ …. 1 1.2 Problems Statement ......................................................................................... 3 1.3 Research Objectives ....................................................................................... 4 1.4 Research Questions ...................................................................................... 4 1.5 Scope of Study ................................................................................................ 5 1.6 Expected Benefits ........................................................................................... 5 1.7 Operation Defintions …. .................................................................................. 5 1.8 Organization of the Study ................................................................................ 7 Chapter 2: Literature Review 2.1 Conplaint Intention ........................................................................................ 9
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TABLE OF CONTENTS (CONTINUED)
Page
2.2 Theory: Hirschman’s (1970) Theory ........................................................... 14 2.3 Demographic ............................................................................................... 16 2.4 Level of Dissatisfaction ............................................................................... 17 2.5 Perceied Possibility of Success .................................................................. 19 2.6 Attitudes Toward Complaint ........................................................................ 20 2.7 Related Research ....................................................................................... 22 2.8 Nanning ....................................................................................................... 24 2.9 Conceptual Framework ............................................................................... 26 Chapter 3: Methodology 3.1 Population and Sample Size ....................................................................... 29 3.2 Variables of the Research .......................................................................... 30 3.3 Research Design ......................................................................................... 31 3.4 Research Instrumentation ........................................................................... 31 3.5 Pretest of the Research Instrument ............................................................ 33 3.6 Data Collection ............................................................................................ 35 3.7 Data Analysis .............................................................................................. 36
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TABLE OF CONTENTS (CONTINUED) Page
Chapter 4: Results of Analysis
4.1 Demographic ............................................................................................... 38 4.2 Analysis of the Level of the Agreement ..................................................... 42 4.3 Data Analysis and Findings ........................................................................ 44 Chapter 5: Conclusion, Discussion, and Recommendation 5.1 Conclusion ................................................................................................... 58 5.2 Discusssion ................................................................................................. 59 5.3 Implication of the Study .............................................................................. 66 5.4 Limitation of the Study ................................................................................ 68 5.5 Recommendation for Further Research ..................................................... 69 REFERENCES ................................................................................................................ 70 APPENDICES ................................................................................................................. 78 BIOGRAPHY ................................................................................................................... 98
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LIST OF TABLES Page Table 3.1 Result of IOC.................................................................................................. 34 Table 3.2 Reliability test using Cronbach's Alpha ........................................................... 35 Table 4.1 Demographic of respondent ............................................................................ 42 Table 4.2 Level of the agreement ................................................................................... 44 Table 4.3 Analysis of Gender ( t-test ) ............................................................................ 45 Table 4.4 T-test for equality of mean .............................................................................. 45 Table 4.5 Analysis of age ( ANOVA ) ............................................................................. 46 Table 4.6 Analysis of education level ( ANOVA ) .......................................................... 47 Table 4.7Analysis of income ( ANOVA ) ......................................................................... 48 Table 4.8 Summary of demographic ............................................................................... 49 Table 4.9 Summary of simultaneous simple regression ................................................ 50 Table 4.10 Output of simultaneous simple regression .................................................... 51 Table 4.11 Summary of simultaneous simple regression .............................................. 52 Table 4.12 Output of simultaneous simple regression .................................................. 52
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LIST OF TABLES Page Table 4.13 Summary of simultaneous simple regression .............................................. 53 Table 4.14 Output of simultaneous simple regression.................................................... 54 Table 4.15 Relationship of demographic and complaint intention ................................. 55 Table 4.16Relationship of level of dissatisfaction and complaint intention ................... 55 Table 4.17Relationship of perceived possibility of success and complaint intention ..... 55 Table 4.18 Relationship of attitudes toward complaint and complaint Intention ............ 56
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LIST OF FIGURES Page Figures 2.1 Hirschman’s (1970) theory ........................................................................... 16 Figures 2.2 Map of Nanning ........................................................................................... 22 Figures 2.3 Map of Nanning ............................................................................................ 23 Figures 2.4 Conceptual Framework ................................................................................ 26 Figures 4.1 Genders of the respondents......................................................................... 38 Figures 4.2 Age of the respondents ............................................................................... 39 Figures 4.3 Education of the respondents ...................................................................... 40 Figures 4.4 Income of the respondents ......................................................................... 41
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CHAPTER 1 INTRODUCTION 1.1 Research Background Inrecent years, China's economy has developed rapidly, people's living standard has been improved greatly, and the people's purchasing power has also been improved greatly. At the same time, people's request for product or service are higher, people are increasingly seeking high quality products and services." In today's increasingly competitive environment, customers are becoming more discriminative in their purchases and making complaints about poor after-sales services, product quality and value for money" (Bard,2007). As we know, the customer is always right; customers play an important role in the market. This means that understanding what customers want and what they don't is very important. When the firms offer the products or services that can't meet customer needs, customers will have different kinds of performance. Most of the customers tend to keep silent and select exit, such as stop buying from the firm and turning to other companies,or share the dissatisfied experience with their friends and family through word-of-mouth communication (Ajzen and Driver,1992). There are just a few customers who choose to report the dissatisfaction with a product or service directly to the company and ask for improvement (Tschlo, 1994). There are many customers who think that a complaint will demand time or will result in an unfavorable outcome, or most
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customers don't know where and how to complaint (Torben,et.al, 2010). Because many customers feel that complaint may bring trouble, most of the customers choose to negatively complain. Jin (2010) suggested that "the customer's negative complain is against the development of the company ". Because only the customers know the real cause of the dissatisfaction and the root of the problems, if customers keep silent, there will be more and more problems. Many researchers pointed out that the retention of customers is very important for a retail store. Because losing a customer can be very costly, the cost of gaining a new customer could be as high as five to six times the cost of retaining an existing one (Nelson and Tam,2006). On the other hand, failures to retain customers not only cause loss of profits and also let the satisfied customers have bad feeling (Richins,1983). So the retail store can keep customer retention rate high, and prevent the negative impact of word-of-mouth, through effective management to reduce the problem of products or services and decreases customers dissatisfaction (Blodgett, et.al 1997). Thus, the retail store should try to retain customers as the key to survival and long-term growth. In recent years, more and more retail stores encourage the dissatisfied customers to complain directly to the retail stores’ service center. This provides an opportunity for retail stores to have for remedy customers' complaints and also get the helpful information to improve service or product quality to win the customer back. Evidence shows, in fact, when retail stores sincerely accept customers' complaints and solve the problems for the customers, many of these dissatisfied customers will come back and repeat purchase behavior (James,et.al,1999). Besides, the retail stores not paying attention to customers' complaint and not to try to solve their problems, the retail store will lose the opportunity to correct problems and win the customer back, at the
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same time, without valuable feedback from complaints, a retail store is not able to know the root of the problems and make corresponding improvements and will easily lose its competitiveness in the market (Li, 2010). Therefore, it is very importance that the retail stores practice active management of customers' complaints via encouraging direct reports to the problems or the real cause when dissatisfaction occurs, in order to discover valuable information underlying the complaint as the basis for further problem solving and service improvement. 1.2 Problem Statement Customer complaint is a very complex combination of psychology and behavior (Kang,et.al,2009).Since the 1970s, customer complaint has become popular in marketing research. Many researchers have discussed on customers' complaints behavior. The study of customers complaint behaviors can be divided into three parts: customer complaint intention, customer complaint behavior which include classifying, reasoning and affecting factors analysis and finally customer complaint management which includes what the retail stores did and what they should do ( Davidow and Dacin, 1997). With the largest population in the world, China became one of the most promising markets in the world and continues to draw service marketers' attention. But customers from different cultural backgrounds tend to have different complaint intention. Nanning is the capital of the Guangxi-Zhuang Autonomous Region, since it’s a medium city very little research has been conducted to understand the customers’ complaint intention in Nanning. This study introduces Hirschman's (1970) theory as a basic framework in order to develop a more integrated complaint intention influencing factor
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model, and that research is empirical on each factor's influence on customer's intention to complain in the context of Nanning'(China)s retail industry.
1.3 Research Objectives The purposes of research are as follow: 1. To identify a relationship between the demographic and complaint intention. 2. To identify a relationship between the level of dissatisfaction and complaint intention. 3. To identify a relationship between the perceived possibility of success and complaint intention. 4. To identify a relationship between the attitudes toward complaint and complaint intention. 1.4 Research Questions 1. How does the demographic influence customer complaint intention? 2. How does the level of dissatisfaction influence customer complaint intention? 3. How does the perceived possibility of success influence customer complaint intention? 4. How does the attitude toward complaint influence customer complaint intention? 1.5 Scope of Study The research chosen to study retail store in Nanning (China). Data collecting
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process focus on Nanning and the people who have previously shopped in Nanning's retail store. Dependent variable of the study is complaint intention, and independent variable is demographics, level of dissatisfaction, perceived possibility of success and attitudes toward complaint. 1.6 Expected Benefits 1.6.1 This study will help retail store to address the key factorwhich influences customer complaint intention. 1.6.2 This study will help retail store establish a perfect customer complaint handling and to improve firm performances to meet customer needs. 1.6.3 This study will help retail store to retain existing customers and attract new customers to make more profit.
1.7 Operation Definition Retail store refers to the place that sells goods or provides service to customers in Nanning city. Customerrefers to the people who come and buy product or service in the retail store in Nanning city. Complaint intention refers to a motivation driven by the firm's failure to offer the products or service that meet customer's needs,the customers will tend to make a plan or take action to express dissatisfaction Private responserefers to a reaction when dissatisfied with the firm, people choose to tell family and friends about their dissatisfaction experience and decide not to
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go back and repurchase the product or services again. Public responserefers to a situation where the firms offered the products or service that cannot meet customer's need and people choose to discuss the problem with the firm and ask for a solution to the problem. Responseto third partiesrefers to a situation when meet dissatisfied people choose to write a letter to a local newspaper or tell a customer’s protection body the problems. Level of dissatisfactionrefers to the degree which customer is not satisfied with the product or service. Possibility of a successful refers to the customer's subjective judgment when dissatisfied, if customer choose to complain directly to the firm, the possibility is that they can get a reward or attract attention from the firm. Attitude toward complaint refers to the personal tendency of customers seeking redress from the firms when the firms offered the products or service that cannot meet customers’ need . 1.8 Organization of This Study This study is divided into five chapters. Chapter 1 describes the background, problem statement, research objective, scope of research, excepted benefits and operation definition. Chapter 2 includes literature reviews of variable in this study, such as customer complaint intention, level of dissatisfaction, possibility of success and attitudes toward complaint. Chapter 3 focuses on population and sample, variables of the research, research design, research Instrumentation, data collection and data analysis. Chapter 4 includes the results and analysis. And chapter 5 explains summary,
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discussion, recommendations, the limitation of the study and suggestions for the further research.
CHAPTER 2 LITERATURE REVIEW This chapter will give the literature review as following: 2.1 Complaint intention 2.1.1 Private response 2.1.2 Public response 2.1.3 Response to third parties 2.2 Theory: Hirschman’s (1970) theory 2.3 Demographic 2.4 Level of dissatisfaction 2.5 Perceived possibility of success 2.6 Attitudes toward complaint 2.7 Nanning 2.8 Related research 2.9 Conceptual framework
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2.1 Complaint Intention Complaint intention is a hot topic in the market, and there are many scholars who try to develop a framework to interpret and predict customers’ complaint intention. Ajzen(1985) defined the complaint intention is "a motivation to perform a behavior and indicates the amount of time and effort that she/he is prepared to devote to ensuring that a particular action is undertaken". Chulmin et.al (2003) defined that complaint intention is when dissatisfied with the service or products, customer to make a complaint to the firm. Also Cheng (2007) defined complaint intention is a behavior that people have plan or decision will try to do. Chang and Chin (2011) defined complaint intention is the people's motivational to make a plan or or will exert in order to perform a behavior. Many scholars believe that there are a lot of factors which influence customer complaints intention. For example, some researchers believe a company’s response and attitude towards will influence customers’ complaint intention. Torben et.al (2010) suggested that the price of products, and product complexity and quality of products have effect on the customer complaint intention. Besides, many research are focused on the examination of the determinants of customer complaint intention. According to Simone and Terry (2007) , there are three factors have effects on the complaint intention. Such as situational factors, product attributes, and personal variables. Situational factors comprise "the availability of alternatives, the level of dissatisfaction, the cause of dissatisfaction, the perceived responsiveness of the business, the costs of and barriers to complain, the probability of success, and the stability of the problem". Product attributes include "importance of product success and the price of the product", personal attributes consist of "
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personality characteristics, such as assertiveness and optimism, customer's demographic and education levels, and personal factors, including customer alienation, ability to complain , personal attitude toward complaint and past complaint experience". Further, the study exploring the effect of relational contact and subjective norms on the complaint intention by Chinese customers. And showed that subjective norms, perceived behavioral control and the extent of relational contact are the determinants of the complaint intention in China. In order to understand customer complaint intention, it is important to look at what factors influence customer behaviors. For example, factors such as customer attitudes and personality characteristics have been found that important within the complaint intention (Celso et.al, 2009). Chulmin et.al (2003) pointed out that complaint intention dependent on customer alienation, prior complaint experience, controllability. Also, attitude toward complaining, perceived value of complaint and perceived likelihood of successful complaint. Lamand (1999) examined complaint intention as the outcome of consumers' attitudinal perspectives rather than complaint behavior, because "intention is much better predicted and explained by attitude than is behavior". According to Chang and Chin (2011), complaint intention is dependent on the key variables: attitude, subjective norm and perceived behavioral control. At same time apply the theory of reasoned action and the theory of planned behavior to predict attitude, subjective norm and perceived behavioral control can determine consumers’ intentions to complain when customers meet service failure. Wenjie (2011) pointed out attitude towards complaining, societal benefits and probability of complaint success, have effect on complaint intentions and actions. Based on the theory of planned behaviour, attitudinal variables influence the ultimate decision to complain to a firm, a
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third-party agency, or a court through the intention variable. Also pointed out complainers with a more positive attitude towards those three factors have a stronger tendency to make a complain. Beatriz and Maria (2010) suggested that the main causes for complaining behaviour intentions expressed in three dimensions: private response, complaining response and complaining to third parties. And there are many variables have significant effects on intentions: attitudes towards complaining, level of information and complaining experience, level of dissatisfaction and likelihood of success with the complaint. Also built a causal relations model to analyze relations between the proposed antecedents and complaining intentions, including the moderator effect of the variable "previous consumer experience". With regard to this variable, there has been little research into the effect of familiarity with a product on consumer intentions. Affective commitment impact of complaint barriers on complaint intention. Eric et.al (2007) suggested that affective commitment consists of emotional attachment identification with involvement in an organization. It plays a important role in explaining customer complaint intention. Complaint intention are postulated to be direct antecedents of specific customer responses is conceptualized as the likelihood that a particular complaint response would be chosen as a customer's response to marketplace dissatisfaction. There are three dimensions of complaint intention: voice, private and third party (Singh,1988). Some scholars divided complaint intention into various types into analysis. For example, Dong-Geun(2005) suggested that "the complaining intentions are divided into exit intention, negative word-of-mouth intention, direct voice intention, indirect voice intention, and third-party complaint intention". Also pointed out there are many factors influences on the complaint intention, such as perceived severity of dissatisfaction,
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attitude toward complaining , likelihood of success, difficulty of complaining, service importance, external attribution, loyalty. Kang, et.al (2009) researched the relationship of customer complaints intention with satisfaction and loyalty on the China's mobile phone industry. And found that customer satisfaction and loyalty is influence of the customer complaints intention. At same time customer complaints intention depends on the ability of the firm dealing with complaints and indirectly complaining customers are more likely to repeat the purchasing and become loyal customers than directly complaining customers. Raymond and Peter (2001) suggested that culture not only influences customers' behaviors, but also affects customers' complaint intentions. Customers from different countries and cultural backgrounds tend to have differently complaint intention. Jin (2009) argued that perceived value, perceived likelihood of successful complaint and the attitude toward complaining, all influence on the complaint intention. At the same time, customer previous experience, controllability and alienation are the antecedents of complaint intention, have effects on the complaint intention too. Sigh (1988) found that there are three dimension to effect on customers complaint intention: private response, public response and response to third parties. 2.1.1Private Response Blodgett et.al (1997)
defined private responses as a behavior through word of
mouth influence relatives and friends. Nelson and Tam (2006) pointed out that private response is customers complaint through negative Word-of-Mouth communications to tell kith and kin or decision not to buy the products or services again in the firm . And
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private responses do not get the direct attention of the seller and thus could have a serious impact on sales and profitability . Private responses are the behavior that customer use the Word-of-Mouth communications to express the dissatisfying experience ( Raymond and Peter, 2001) Jean (2001) argued that customers can take private responses by switching brands, stop buy the product or service or telling kith or kin about their bad experiences. And when problems are poorly resolved , private response is triggered.
2.1.2 Public Response
Singe (1988) defined public responses as when customer dissatisfied with the firm, choose complaint directed in order to involved problem, such as complaint to customer protection bodies , the media or legal action. Public responses refers to " the customers direct complaint to the retail store or a third party, such as customers agency or government, and seeking redress directly from the firms" (Nelson and Tam, 2006) . Public responses are customers in order to seeking compensation from the firms choose direct complaint to the customer's social circle (Raymond, and Peter,2001), 2.1.3 Response to Third Parties
Beariz and Mria (2010) defined response to third parties as "come from customers who have not found a solution with the provider or who perceive the problem to be more severe,considering that their dissatisfaction is not an isolated case and may involve other consumers". Responses to third parties refers to that customers choose external power to solve the dissatisfying, such as complain to customer council or write
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letter or take action (Raymond and Peter, 2001), Also, Nelson and Tam (2006) indicated that response to third parties is not directly complaint to the firm, tend to solve the problem by external factors, such as write letter or comment card complain to customer council. 2.2 Theory: Hirschman’s (1970) theory Hirschman's (1970) theory was the first one conception about customer complaining behaviour. According to Hirschman's (1970) model, there are three options: exit, voice and loyalty. Exit refers to " some customers stop buying the firm's products or some members leave the organization". It is the situation that customers decide not to buy the product or service again. Voice refers to "the firms customers or the organization's members express their dissatisfaction directly to management or to some other authority to which management is subordinate or through general protest addressed to anyone who cares to listen". Hirschman pointed out that voice is the customer's complaint that expresses the dissatisfaction directly to the firm. Loyalty refer to "customers repeating purchase intention to some specific products or services in the future". Hirschman pointed out that the customer who loyal should be les likely to exit when dissatisfied with the product or service of firm. Because loyal customers should be likely to give the firms opportunity to improve the product or service (Albert, Hirschman,1970) Hirschman’s framework is very wide, and can be applied many areas, such as "social,economic,business firms,and organizations in general and so on". For example, for organization, Hirschman can explain the reason of dissatisfied employees leave a company.Also,for the marketing, Hirschman can uses the framework explain why some
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dissatisfied customers want to complaint to the firms.
Dissatisfaction occurs
Exit
Voice
Figure2.1 Hirschman’s (1970) theory
2.3 Demographic
Loyalty
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Demographic characters mainly refer to personal statistics such as gender, age , education,income and so on. Many researchers studied customers complaint intention always examined by demographic variables. Nelson and Tam (2006) suggested that demographic variables, have consistent effects on customer complaint. Li (2010) suggested that demographic characters play important roles in determining the complaint behavior. In the study of customer complaint behavior, researches have found significant differences and impacts of demographic variables on customers complaint intention. For example , about gender, many scholars put forward some view. Kau et al. (1995) found female customers are more likely choose to complain when dissatisfied. Keng et al. (1995) suggested female consumers are more inclined to complain when dissatisfied with the product or service. About age, Day and Landon (1977) noted that the younger customer more likely take complaint. Jacoby and Jaccard (1978) stated that younger customer are more tend to complain than elder customers. Singh (1989) pointed out that customer who choose to complaint are more tend to younger people. Heung (2000) suggested that younger customer are more likely choose to complaint to the firm when dissatisfied . About education and income, Andreasen (1988) pointed out higher education and higher income are positively related to customers complaint intention. Jacoby and Jaccard (1981) found out that customers have a higher education were more likely to complain when dissatisfied. Bard (2007) reported that "income is to be positively correlated with complaints. Individuals with higher incomes are more frequent purchasers of expensive items , which have been found to inspire more complaints". Ngai (2007) also pointed out that education is one of the significant characteristics of complaint
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intention. Day and Landon (1977) indicated that people with a higher level of education complaints more frequently because better-educated people know where and how to file complaints .
2.4 Level of Dissatisfaction
Schouten and Raij (1990) defined level of dissatisfaction as " the result of the discrepancy between expected and realized performance or dissatisfaction with an attribute". None firm can always achieve 100% customer satisfaction. There will always be some customer dissatisfaction due to the variety of causes. Many authors agree that dissatisfaction is the cause of the customer complaint. So understand the level of dissatisfaction are very important for a firm. Jagdip and Pandya (1991) researched the influence of customers' dissatisfaction level on complaint behaviours. And focused on the relationship between level dissatisfaction and customer complaint intention. The level dissatisfaction can effect on complaint intention, while the dissatisfaction of level more high the complaint intention more strong. Many article focused on the relationship between level of dissatisfaction and complaint intention. Vubcebt and Terry (2003) described customer complaint intention as a function of dissatisfaction and level of dissatisfaction is a very important factor that attributes to complaints. Besides, Singh (1998) pointed out that complaint is a result of dissatisfaction. Beatriz and Maria (2010) suggested that the level of dissatisfaction has a positive relationship with customers complaint intentions , and negative word of mouth comments to the supplier of the product or service or to third parties. Ruyter and Wetzels (2000) reported that dissatisfaction has more negative effects on new
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customers than repeat customers who have a satisfactory global relationship based on previous encounters. Understanding customer dissatisfaction have a great effect on customer retention and long-term customer relationship retention (Sheth and Newmann, 1999). So, any firm want to attract new customers and establish long-term, repeat purchase relationships, the firm need to pay attention to the customer dissatisfaction. 2.5 Perceived Possibility of Success
Singh (1988) defined perceived possibility of a successful outcome as "customer’s subjective judgment of the probability of success in directly complaining and gaining expected utility." Richins (1983) suggested that the possibility of a success have relative with the customers complaint intention. The customers who have greater the perceived possibility of success would have the greater complaint intention to the firm. Beside depend on customer's intention, the degree of possibility of success also depend on time, money and cooperation of others. When the resources and opportunity becomes true, customers complaint intention can be used to know ahead the probability of a successful behavioural attempt (Cook and Macaulay, 1997). Singh (1988) found that the probability of a successful complaint plays a important role in understanding complain intention. It has a positive effect on the customer complaint intention. The probability of a successful complaint is the customers’s perceived likelihood of getting a reward from the firm, such as a refund, exchange or apology (Stephens and Gwinner,1998). Also, the probability of a successful complaint can increase the customer complaint intention. It means that if customer believe that the firm will be accepted their complaints , they are more likely to express their complaint to the firm. If customers think the firm will not pay attention on the
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complaint intention, the customers will tend to keep silent and stop buy the product or service from the firm (Chulmin, 2003) .
2.6 Attitudes Toward Complaint
Singh and Wilkes (1996) defined attitude toward complaining as"the customers’ overall affect of the ‘goodness’ or‘badness’ of complaining to sellers and is not specfic to a given episode of dissatisfaction". Fishbein and Ajzen (1975) defined that attitude toward complaining is a behavior describe when evaluation of the perceived results of an act ,the person's behavior expression is positive or negative. Chang and Chin (2010) defined attitude toward complaining is "a behavior describe a person's salient beliefs regarding the perceived outcomes of performing through person's positive or negative evaluation of a relevant" . In general, attitudes can influence customers , and evaluate purchased goods and services in particular (Ajzen, 2005). So firms can investigate their customer' attitudes towards their products or services (Kotler and Makenset,2010). Within the services marketing domain ,attitude toward complaining have played a important role in relation to service evaluations and customer complaint intentions. For example Erdogan and Norman (2011) also pointed out that attitude toward complaining as an very important variable to understand the complaint intentions. According to Davidow (2003) attitude toward complaining is the customers who dissatified the product or service and in order to win compensation take action to complaint.In other words, it is an individual's tendency toward dissatified customers want to seeking redress from firm. Following the attitude model of reasoned action, Fishbein and Ajzen (1975)
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pointed out that the customers who have higher attitude toward complaining will have higher complaining intentions. Customers who have a higher likelihood of success will have higher complaining intentions. On the study by Blodgett, et.al (1997), customers who " have a more favourable attitude toward complaining are expected to be more likely to express their complaint intention to the firm". The study by Brennan and Douglas (2002) reported that when customer have attitude toward complaining ,is not only express the dissatisfation about problems or service but also want redress from firm. According to Keng et.al.(1995), the customer who have positive attitude to complaint are more easy communication than the customer who negative compliant. Also Day and Landon (1997) pointed out that the customer who use positive attitudes to express the dissatifation are better than the customers negative attitudes toward complaint.Because most use negative attitude's customer will tend to silent and select exit, such as stop buying from the firm and turning to rival companies,This is unfavorable for the development of the enterprise. Oh (2003) Also suggested that attitude toward complaining is very important in customers complaint intention. And the customers who had positive attitude toward complaining express customer will provide the opportunity let the firm to improve the product or service and solve problems. Finally the customers who positive attitudes toward complaining will come back repurchase. Ruyter and Brack (1993), suggested that that customers complaint intention is positively influenced by favorable attitudes toward complaining. Also, Wenjing (2011) pointed that attitudes towards complaining influence consumers’ intention . Phau and Sari (2004) found that customers who believe firm will pay attention and have reactions will have positive attitude towards complaining .
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Several studies have also pointed out that attitudes towards complaining plays a important role in relation to service brands. For example, Crie (2003) suggested that customer have positive attitude towards complaining and complaint to the firm, it is means provides opportunities for firm to improvement product or service and retain old customers, so that keep customer loyalty and retain firm brands. In general,when attitudes toward complaint occur, firm should be understanding the customers attitudes , because only know the attitudes of customer, firm can more understand how their customers are going to react when they experience problems and try to find ways to encourage them to voice out these problems (Vincent and Terry, 2003) 2.7 Nanning
Figure 2.2 Map of Nanning
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Figure 2.3 Map of Nanning Nanning is the capital of the Guangxi-Zhuang Autonomous Region, is the center of science and technology, education, culture and sanitation in Guangxi Province. Nanning located in the southwest of Guangxi, adjoins Guangdong, Macau and Hong Kong, and faces the Southeast Asia. It's a very important transportation hub connecting the southeast coastal cities and the southwest inland cities of China. The total area of Nanning is 22,293 square kilometers, and the population is about 6.6 million in 2012 . In recent years, Nanning's economy with the free trade agreement (FTA) between China and ASEAN has been developed rapidly, people's living standards has been improved greatly, the retail store with the developed economy has improved greatly , and the people's purchasing power has also been improved greatly too. Nanning’s strategic geographic position offers good access to developing regions. 2.8 Related Research
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Simone Cheng and Terry Lam (2007) conducted a study on "The role of the customer–seller relationship in the intention of the customer to complain: A study of Chinese restaurateurs" This study reported on how customer–seller relationships affect the intention of Chinese customer to complain. This paper also examined the social approval and pressure effect on the customers complaining. Several relationships between personal attitudes, the subjective norm, perceived behavioral control, the extent of relational contact and the complaining intention of Chinese customer were postulated. This study found that the complaining intention of Chinese consumers is influenced by customer–seller relationships and the social pressure on act of complaining while personal attitudes do not have any effect. Possible explanations for the results and implications for researchers and practitioners are presented. Chulmin Kim, Sounghie Kim, Subin Im, Changhoon Shin (2003) conducted a study on "The effect of attitude and perception on consumer complaint intentions" This study reported attitudinal and perceptual variables influenced by generalized personal factors and affect complaint intention. In this study the customer complaint intention is the dependent variable, and it dependent on attitudinal and perceptual variables and generalized personal factors. Attitudinal and perceptual variables include attitude toward complaining,perceived value of complaint and perceived likelihood of successful complaints. Generalized personal factors include customer alienation,prior complaint experience and controllability. This study found that attitudinal and perceptual mediators positively influence complaint intention and attitude toward complaining plays a central role. Dong-Geun Oh (2003) conducted a study on "Complaining intentions and their relationships to complaining behavior of academic library users in South Korea" This
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study reported on the influences of the selected antecedents on each type of complaining intentions and its relationship to complaining behavior.This study found that perceived severity of dissatisfaction and personal norms had significant influences on the choice of negative word-of-mouth intention, direct and indirect voice intentions, and third-party complaint intention. Li Yin Jin (2009) conducted a study on "Determinants of customers' complaint intention empirical study in the context of China's retail industry". This study analyze relation between perceived value, perceived likelihood of successful complaint, the attitude toward complaining and customer complaint intention. And found that perceived value, perceived likelihood of successful complaint and the attitude toward complaining all have effects on the complaint intention. Also, consumer discontent, prior experience of complaining and controllability are analyzed as the antecedents. And indicated that firm should encourage customer to complain. Meng Li (2010) conducted a study on "Exploration of Chinese consumer complaint behavior in the hospitality industry". His study reported on to reacher on make a model of Chinese consumer complaint behavior in the hospitality industry. This paper examined the factors that would influence Chinese customers complaint intention and complaint response, particularly in the hospitality setting this paper also examine how consumer complaint behavior would vary under the Chinese cultural . 2.9 Conceptual Framework
Demographic -Gender -Age -Education level -Income H1
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Level of Dissatisfaction
H2
Complaint Intention - Private Response - Public Response - Response to Third Party
H3
Perceived Possibility of success H4
Attitudes Toward Complaint
Figure 2.4 Conceptual Framework
Hypothesis 1: Complaint intention is dependent on the demographic Hypothesis 2: Level of dissatisfaction has relationship with complaint intention Hypothesis 3: Perceived possibility of success has relationship with complaint intention Hypothesis 4: Attitude toward complaint has relationship with complaint intention
CHAPTER 3 RESEARCH METHODOLOG Chapter 3 addresses the methodology approach of this study topic is following: 3.1 Population and sample size 3.1.1 Population 3.1.2 Simple size 3.2 Variables of the research 3.3 Research design 3.4 Research instrumentation 3.5 Pretest of the research instrument 3.5.1 Validity test 3.5.2 Reliability test 3.6 Data collection 3.7 Data analysis
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3.1 Population and Sample Size 3.1.1 Population: The population of this study is 6.66 million (6,660,000), is the total population in Naning city in 2012. 3.1.2 Simple Size: The sample size for the study calculated according to the formula recommended by Yamane (1973) which is as below, n = N / (1+Ne ) Where, n is size of sample N is population e 2 is probability of error Therefore the sample size for this study is: n =6,660,000/｛1+6,660,000(0.05)2｝ n =399.9 ≈ 400 With N=6,660,000, e=5% (at least 95% confidence level), hence the sample size is 400, considering some questionnaires can't use, so send 450 questionnaires, finally there are 405 questionnaires can use.
3.2 Variables of the Research 3.2.1 Dependent Variables
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The dependent variables in this study are as following: Complaint Intention - Private response - Public response - Response to third parties 3.2.2 Independent Variables The independent variables in this study are as following: 1. Demographic - Gender - Age - Education level - Income 2. Level of dissatisfaction 3. Perceived possibility of success 4. Attitudes toward complaint
3.3 Research Design This research design use quantitative research method to collects primary data via questionnaire according to our study objective. The customers who had previously shopping in Nanning's retail store will select through random sampling approach to
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observe from the survey questionnaire. The primary data will be collect focus on level of dissatisfaction, possibility of success, attitudes toward complaint. The questionnaires will be written in English and Chinese.
3.4 Research Instrumentation The questionnaires are design with relevant to the objectives of this study. The questionnaires are consisted of three section. In the section one, is the condition of customer previous experiences in retail store. In the section two, there is the personal profile of the respondent. It consisted of gender, ages, levels of education and incomes. In the section three, there are six parts. The first part, level of dissatisfaction was adopted from Beatriz Moliner Vela'zquez and Mar'ia Fuentes Blasco (2010). There are 4 items to measure level of dissatisfaction. The items are "I am not satisfied with my visit to this store", "It was not good idea to go to this store", "I did not enjoy myself at this store", "I regret having been to this store". The second part, based on Jin (2010), there are 3 items were developed to measure perceived possibility of success. The items were "The retail store will respond properly to my problem". "The retail store will respond satisfactorily", "The retail store will prevent it from reoccurring". The part three, based on Blodgett et al.(1993) there are 4 items were developed to measure about attitudes toward complaint. The part four, five and six, there are 10 questions are designed about
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customer complaint intention. On the review, complaint intention have three dimensions: private response, public response and response to third parties (Singh,1990).The questionnaires are developed from Beatriz and Mar (2010). In questionnaire, this study use Likert scale, which typically has five scale point descriptors: strongly disagree, disagree, undecided, agree strongly agree, in this five point, the strongly disagrees equal 1(strongly disagree=1) and strongly agree equal 5 (strongly agree=5). Evaluative criteria for the question items with positive meaning. The interval for breaking the range in measuring each variable is calculated as follow: (5-1 )/5= 0.8 It means the score fall between the rages of: 4.21-5.00 are considered as strongly agree 3.41-4.20 are considered as agree 2.61-3.40 are considered as neutral 1.81-2.06 are considered as disagree 1.00-1.80 are considered as strongly disagree
3.5 Pretest of the Research Instrument The questionnaires was analyzed under the validity test and reliability test. 3.5.1 Validity Test The validity test was use the Item-Objective Congruence (IOC) to test the questionnaire. IOC was a progress to content three experts. The expert were measure
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the objective of each question under the topics on 3 scales : 1= for clearly measuring 0= for unclear measuring -1= clear not measuring After the evaluation was completely by experts, the rating were computed by Rovinell and Hamble (1997) equation for the index of item objective congruence. According the cut off at 0.75, item which were hight than 0.75 considered as valid. And below 0.75 are considered invalid. The equation was following:
Lik= the index of item-object congruence for item I on objective k N= the number of specialists (j=1,2...N) Sik= the rating (1,0,-1) of item I as a measure of objective k by content specialist
Table 3.1 Result of IOC Items
Variables
IOC
1
Level of dissatisfaction
0.83
2
Perceived possibility of success
0.77
3
Attitudes toward complaint
0.75
4
Complaint intention 4.1 Private response
0.91
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4.2 Public response
0.88
4.3 Response to third party
0.77
According to the table 3.1, all the results more than 0.75, means those index are all considered valid. 3.5.2 Reliability Test Researcher has carried out the pretest to observe the reliability of the questionnaires. The questionnaires were send to Nanning city (GuangXi) and distributed to the customers. The reliability test was based on Cronbach's Alpha Coefficient. Cronbach's Alpha can be interpreted as a correlation coefficient, it ranges on value from 0 to 1. Alpha of 0.7 is the cutoff value for being acceptable and reliable. The reliability test concluded that all the items of the questionnaire have been reliable since the scores of the test was higher than 0.7 in almost cases that the results were shows Cronbach's Alpha in the Table 3.1 Table 3.2 Reliability Test Using Cronbach's Alpha No
Variables
Numbersof items
1
Level of dissatisfaction
3
Cronbach's Alpha (pretest) 0.759
Cronbach's Alpha (final)
2
Perceived possibility of
3
0.885
0.890
4
0.814
0.717
0.769
success 3
Attitudes toward complaint
4
Complaint intention
35
4.1 Private response
4
0.785
0.902
4.2 Public response
3
0.787
0.903
4.3 Responses to third parties
3
0.869
0.776
3.6 Data Collection For this study, customers from the Nanning city are select as the target respondents of the research. Target areas for distribution of questionnaire are at the retail store in Nanning city. A total number of at least 405 respondents will require for this study. A total number of 21 questionnaires are discard to the respondent .The survey is conducted within the time frame of one month, October 2012.
3.7 Data Analysis The following hypothesis are developed to analyze the dependency of complaint intention on demographic, level of dissatisfaction, perceived possibility of success and attitudes toward complaint. In this study, the data analysis are according to the statistical analysis from the t-testing analysis. One-way ANOVA analysis, simple regressions analysis. Hypothesis 1: Complaint intention is dependent on the demographic factors like gender, age, education level and income of the customers Hypothesis 1.1: Complaint intention is dependent on gender
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Hypothesis 1.2: Complaint intention is dependent on age Hypothesis 1.3: Complaint intention is dependent on education level Hypothesis 1.4: Complaint intention is dependent on income Hypothesis 2: Level of dissatisfaction is positively related with complaint intention Hypothesis 3: Perceived possibility of success is positively related with complaint intention Hypothesis 4: Attitudes toward complaint is positively related with complaint intention
CHAPTER 4 DATA ANALYSIS AND RESULTS This chapter have an analysis result of primary data which collected by questionnaire based on the conceptual framework. This chapter will describe the point as below:
4.1 Demographic 4.2 Analysis of the level of the agreement 4.3 Data analysis and findings 4.3.1 Hypothesis testing 4.3.2 Summary of the Hypotheses
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4.1 Demographic In this study, there are 450 questionnaire were distribute, and 405 can use. The demographic detail of the 405 respondent were divided into two parts: frequency and percent, which were presented in the Table 4.1. In the Table 4.1, there are gender, age, education level and income.
215 210 Frequency
205 200 195 190 185 180 Male
Female
Figure 4.1 Genders of the Respondents The gender was including male and female. There are total 193 respondents are male, male consists of 47.7%, there are 212 respondents were female. Female consists of 52.3%.
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Frequency
200 150 100 50 More than 46
36-45years
26-35years
Under25
0
Figure 4.2 Age of the respondents The age category was divided into 4 groups. There were 159 respondents which is the largest group age among 26 to 35 years old, it consist of 39.3% of the respondents , and there are 134 respondents in the second group which age under 25 years old with 33.1% . There were 65 respondents in the third group which age among 36-45 years old with 16.0% of the respondents. And the last group which age more than 46 years old have 47 respondents with 11.6% of the respondents.
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Frequency
200 150 100 50 Graduate
Under graduate
Vocational school of colleges
High school
0
Figure 4.3 Education of the respondents The education category was divided into 4 groups: high school, vocational school or colleges, under graduate, graduate. In the group under graduate, there were 148 respondents which consist of 36.5 of the respondents. And there were 113 respondents in group vocational school or college, it consists of 27.9% of the respondents. In the group high school, there were 73 respondents which consist of 18% of the respondents. And in the group graduate. There were 17.5% respondents which consist of 17.5% of the respondents.
More than 5000Yuan
40015000Yuan
30014000Yuan
20013000Yuan
10012000Yuan
100 80 60 40 20 0 Less than 1000Yuan
Frequency
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Figure 4.4 Income of the respondents For the income, the question divided into five group. The big group is income among 1001-2000 Yuan per month, there are 92 respondents which consists of 22.7% of the respondents. The group of more than 5000 Yuan included 84 respondents which as 20.7%. There were 72 respondents which as 17.8% in the group income among 3001-4000 Yuan, There were 65 respondents which as 16.0% in the group income among 2001-3000 Yuan, There were 49 respondents which as 12.1% in the group income among 4001-5000 Yuan, and last group is income less than 1000 Yuan, there are 43 respondents about 10.6% of the respondents.
Table 4.1 Demographic of Respondent (n=405)
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Demographic Gender Male Female Age Under 25 26-35 years 36-45 years More than 46 Education Level High school Vocational school of colleges Under graduate Graduate Income Less than 1000 Yuan 1001-2000 Yuan 2001-3000 Yuan 3001-4000 Yuan 4001-5000 Yuan More than 5000 Yuan
Frequency
Percent
193 212
47.7 52.3
134 159 65 47
33.1 39.3 16.0 11.6
73 113 148 71
18.0 27.9 36.5 17.5
43 92 65 72 49 84
10.6 22.7 16.0 17.8 12.1 20.7
4.2 Analysis of the Level of the Agreement The level of the agreement of respondent on complaint intention with the independent variable level of dissatisfaction, perceived possibility of success, attitudes toward complaint, and dependent variable complaint intention were presented in the Table 4.2. The mean of the level of dissatisfaction is 3.86 and standard deviation is 0.752. This shows the respondent have agree level with the level of dissatisfaction. The mean of perceived possibility of success is 3.04 and standard deviation is
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1.220. This shows the respondent have neutral level with the perceived possibility of success. The mean of attitudes toward complaint is 2.98 and standard deviation is 0.960. This shows the respondent have neutral level with the attitudes toward complaint. The mean of complaint intention is 3.12 and standard deviation is 1.024 and it was distributed to 3 items: private response, public response, responses to third parties. Private response had the mean 3.66 and standard deviation is 0.863, which considered as agree. Public response had the mean 3.06 and standard deviation is 1.070, which considered as neutral. Responses to third parties had the mean 2.65 and standard deviation is 1.140, which considered as neutral. This shows the respondent have neutral level with complaint intention.
Table 4.2 Level of the Agreement Variables
Mean Std. Deviation
Level of agreement
Level of dissatisfaction
3.86
0.752
agree
Perceived possibility of success
3.04
1.220
neutral
44
Attitudes toward complaint
3.03
0.922
neutral
Complaint intention
3.12
1.004
neutral
Private response
3.66
0.863
agree
Public response
3.06
1.074
neutral
Responses to third parties
2.66
1.075
neutral
4.3 Data Analysis and Findings In this study, the data analysis and finding are according to the statistical analysis from the t-testing analysis, One-way ANOVA analysis, simple regressions analysis. 4.3.1 Hypothesis Testing 4.3.1.1 Analysis of Demographic The analysis of gender use the independent t-test, age, educational level and income use ANOVA. Gender and complaint intention Objective1: To identity the relationship between the demographic and complaint intention. Hypothesis 1.1: Complaint intention is dependent on gender Table 4.3 Analysis of Gender (t-test) SEX
Frequency
Mean
Std. Deviation
CI Male
193
2.695
0.61303
212
3.391
0.68809
Female
45
Table 4.4 t-test for Equality of Mean Leven’s test for equality T-test for equality of means F CI
8.333
Sig 0.004
t -10.703
df.
Sig.
403
0.000
Equal variances assumed Equal
variances
not
-10.761 402.817 0.000
assumed From Table 4.4 the two tail significance for complaint intention indicates that p
