Available online at www.sciencedirect.

com

ScienceDirect
Procedia Economics and Finance 37 (2016) 432 – 438

FIFTH INTERNATIONAL CONFERENCE ON MARKETING AND RETAILING (5TH

INCOMaR) 2015

The Effect of Customers’ Perceived Value of Retail Store on

Relationship between Store Attribute and Customer Brand Loyalty:
Some Insights from Malaysia
Seyed Rajab Nikhashemia*, Arun Kumar Tarofderb, Sanjaya Singh Gaura, Ahasanul
Haquec
a
Sunway University Business School, Department of Marketing
b
Faculty of Business Management and Professional Studies, Management and Science University, Malaysia
c
Faculty of Economics and Management Sciences, International Islamic University Malaysia

Abstract

Customer brand loyalty has been an important area for practitioners in retailing industry due to various developments in the
increasingly competitive environment. The objective of the current study is to identify the role of perceived value of the store
brand in relationship between store attributes and customer brand loyalty. A self-administered questionnaire was used to collect
data (n=418), from the customers visiting hypermarkets such as Tesco, Aeon Big, Mydin and Giant’s in metropolitan Kuala
Lumpur, Malaysia. Structural Equation Modeling is employed to analyze the data. The results demonstrate that store attribute has
a direct effect on customers’ perceived value as well as on their loyalty with the store brand. The store attribute also has an
indirect effect on store brand loyalty via customers’ perceived value of the store brand. The study recommends hypermarkets to
understand customers’ perception towards their brand in order to develop better marketing strategy which can enable them
differentiate themselves from competitors.

©
© 2016
2016TheTheAuthors.
Authors.Published
Publishedby
byElsevier
ElsevierB.V.
B.V.This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/4.0/).
Peer-review under responsibility of Faculty of Business Management, Universiti Teknologi MARA.
Peer-review under responsibility of Faculty of Business Management, Universiti Teknologi MARA
Keywords: Store Attribute, Perceived Value, Customer Brand Loyalty

* Corresponding author. Tel.: 60 3 7491 8522; fax: +60 3 5635 863.

E-mail address: farhadn@sunway.edu.my

2212-5671 © 2016 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/4.0/).
Peer-review under responsibility of Faculty of Business Management, Universiti Teknologi MARA
doi:10.1016/S2212-5671(16)30148-4
 Seyed Rajab Nikhashemi et al. / Procedia Economics and Finance 37 (2016) 432 – 438 433

1. Introduction

The focal point of many companies’ marketing undertakings is to create brand loyalty for their products, services
or store (Vesel & Zabkar, 2009). One of the simple but still perplexing questions in retailing is how customer brand
loyalty can be built (Yeng & Mat, 2013). Hypermarkets in Malaysia have been rapidly growing in the recent decades
(Aghaei, 2012). Strenuous efforts by these hypermarkets have gone into developing the customers’ loyalty to the
store for earning long-term sales revenue, but most of them still have been failing to create value perception for their
customers.
The subject of building customer brand loyalty has been extensively investigated, with studies largely focused on
examining the key marketing concepts that serve as loyalty antecedents, such as trust (Chaudhuri & Ligas, 2009;
Fung, King, Sparks, & Wang, 2013; Sparks, Bradley, & Jennings, 2011), perceived service quality (Kandampully,
Juwaheer, & Hu, 2011) and word of mouth communication (Urška Tuškej 2013a). Even though the findings of these
studies contribute to the customer brand loyalty literature, the mediating role of customer perceived value of the
store brand in building brand loyalty in hypermarket context is not yet investigated. Therefore, to address this gap in
the literature, current study attempts to scrutinize the critical role of perceived value in the creation of customer
brand loyalty for a hypermarket store.

2. Literature Review

2.1. Customer brand loyalty

There are three types of brand loyalty namely, attitudinal, behavioural, and composite loyalty. Embracing
specified preferences, promise, or purchase targets of the consumer are often regarded as attitudinal loyalty, thus
researchers holding this standpoint emphasize the psychological component of brand loyalty (Bennett et al., 2014).
On the contrary, behavioral researchers claim that a recurrence of transactions exemplifies a consumer’s brand
loyalty (Fung et al., 2013). However, the inability to differentiate between true and spurious loyalty is the reason
behavioral measures are rejected as the sole indicator of loyalty (Odin, Odin, & Valette-Florence, 2001). Although
attitudinal loyalty considerations assist in differentiating brand loyalty from frequent purchases, it does not focus on
actual purchases; rather relying on consumer testimonies, which is why it may not be a precise exemplification of
reality (Odin, Odin, & Valette-Florence, 2001). In other words, actual purchases may not be guaranteed by a
positive brand attitude. On the other hand, loyalty is regarded as a subjective behavioral purchase exercise because it
is a psychological process by (Jacoby, 1971). Accordingly, a few scholars (Fung et al., 2013) recommend a
composite approach whereby the assessment of a consumer’s loyalty to a specific brand necessitates consideration
of both purchasing behaviour and attitudes. Some of the previous studies on brand loyalty have accessed and
acknowledged the composite view (Harris & Goode, 2004; Petrick., 2008) and it is applied in this study too as it
accomplishes presenting a comprehensive explanation of the loyalty concept.

2.2 The Effect of Store Attributes on Perceived Value of Store Brand

Store attributes play vital role in improving the customers’ satisfaction and loyalty. Finn (2004)) recognized eight
store attributes that helped to form consumer attitudes towards a retail marketing strategy. In this study, the most
relevant elements of store attributes, such as store atmosphere, store image, parking facility, lifestyle, merchandise,
convenience and location, are considered. Store attribute is influenced by the various components of the retail
marketing mix (Chen & Hu, 2010; Jinfeng & Zhilong, 2009), such as, location, display feature, parking facility,
clean and spacious environmental atmosphere, etc. A study by Beneke, Cumming, and Jolly (2013) showed that
store image which is a key component of store attribute directly as well as indirectly influenced the customers’
brand loyalty through the customers’ perceived value construct whereby customers are associated with repeat
shopping visits in a specific store and market place (Hartman & Spiro, 2005). On this basis, the following
hypotheses are proposed:
434 Seyed Rajab Nikhashemi et al. / Procedia Economics and Finance 37 (2016) 432 – 438

H1: There is a positive relationship between store attributes and customer perceived value.
H2: There is a positive relationship between store attributes and customer brand loyalty.
Although numerous definitions of perceived value exist, the definition of Zeithaml (1988, p. 14) is the most
universally accepted definition of perceived value in the literature. Past research conceptualizing perceived value as
simply a trade-off between quality and price is believed to be insufficient to explain the gain of competitive
advantage (Rintamäki, Kanto, Kuusela, & Spence, 2006). Thus, a number of researchers argued that perceived value
is more complex; that a multi-dimensional approach of value perceptions should be considered by scholars and
managers; and that customer choice is the result of multiple value perceptions (e.g. Petrick, 2002). Most of the
perceived value definitions describe value as perceptions of what customers have received and what they have given
which is based on the customer’s overall evaluation of the utility of a store, product, and brand image (Zeithaml,
1988). Even though a number of value perception based on the past literature has identified (i.e., emotional, social as
well as functional) but it appears that only two of them to be more applicable in the study of the consumer
behaviour. The first one is functional motives which refer more to tangible need such as price, convenience, quality
and the second one is non-functional motives which is more related to intangible wants such as emotional and social
needs (Chen & Hu, 2010). However the growing body of the literature have a fragmented knowledge regarding
perceive value but the current study attempts to incorporate functional value and symbolic value as a construction of
the value. Functional value in this study refers to overall assessment of consumers about the quality of the products
which they purchase from the hypermarket, and the money they pay for it whether worth and symbolic value refers
more about overall of perception from emotional and social, and reputation perspective. As an excellent customer
goal, perceived value can potentially control customer actions targeting behavioral loyalty (Sirdeshmukh, Singh, &
Sabol, 2002). Customer perceived value is found to affect purchase intention (Li & Petrick, 2008; Urška Tuškej
2013b), commitment and customer brand loyalty (Chen & Hu, 2010; Sirdeshmukh et al., 2002). For such a
compelling reason, we propose that:
H3: Perceived value has a positive association with hypermarket customer brand loyalty

3. Methodology

The questionnaires were distributed to a sample of 464 Malaysian hypermarket customers. Using the convenience
sampling technique (i.e., by approaching people who are opportunely available), 418 usable responses were
collected (response rate of 90%). The measurement items in this study are adapted from the past studies except some
items of store attributes which were developed by researchers. Structural Equation Modeling using AMOS was used
in this study to analyze the data.

4. Findings

4.1 Reliability Analysis and EFA

The reliability test was run in order to ensure consistency and reproducibility of the instrument (Sekaran, 2010).
As demonstrated in Table 1, test of reliability yielded acceptable Cronbach’s Alpha values for all constructs and
EFA results show that factor loadings for each item are in good range for acceptance. .

4.2 Measurement Model

CFA (refer to Table 2) was employed to test whether the data fits the measurement model. In order to validate the
construct, convergent validity and discriminant validity were tested. Convergent validity was tested through average
variance extracted (AVE) by considering the minimum cut-off point (0.5) and discriminant validity are achieved if
the correlation between the exogenous variables does not exceed the cut-off point value of 0.85 (Awang, 2012;
 Seyed Rajab Nikhashemi et al. / Procedia Economics and Finance 37 (2016) 432 – 438 435

Byrne, 2009). Table 2 summaries the results of CFA.

Table 1: Reliability and Factor Loading Results

Constructs Indicators Factor Loading Alpha (α) KMO
Store Attributes 0.85 0.87
Impressive music in the hypermarket 0.76
Car parking facilities is important 0.84
Cleanness and freshness 0.87
I care about the store decoration 0.73
I purchase my product from those hypermarkets which located in shopping malls. 0.67
Perceived Value 0.88
Symbolic Value Improves the way I am perceived 0.70
Helps me make a good impression on people 0.78
Makes me feel delighted 0.76
Is appealing 0.71

Gives me pleasure 0.74

Has a good reputation 0.81
Is stylish 0.73
Functional Values 0.78
Is convenient for me 0.91
Is easy to locate 0.87
Provides good service at a reasonable price 0.86
Is consistent 0.71
Is outstanding 0.82
Offer good value for money 0.88
Customer Loyalty
Behaviour Loyalty 0.86
Say positive thing 0.87
Recommend to someone 0.87
I will continue to shop 0.79
Attitudinal Loyalty
I am emotionally attached to this hypermarket brand 0.82
I feel personally satisfied when I shop from this hypermarket brand 0.74
I am very committed to this hypermarket brand.
0.71

Table 2 CFA Results

Factor X2 DF P GFI AGFI CFI RMSEA AVE
Store
1.967 4 0.001 0.990 0.961 0.992 0.058 0.61
Attributes

Perceived
1.930 2 0.000 0.992 0.969 0.982 0.050 0.55
Value

Customer
1.222 3 0.001 0.948 0.959 0.993 0.051 0.53
Brand Loyalty

4.3 Structural Model Results

In order to test the hypothesis, structural model was run. The result revealed that even though the model did not fit
the data based on absolute fit, but based on the other indices (incremental fit- Parsimonious-fit) our model fits the
data perfectly (Chi- square=4.813, NFI=0.954, GFI= 0.945, TLI=0.924, CFI =0.953). The result showed that store
attributes as an exogenous variable had significant contribution in the prediction of customer perceived value and
customer brand loyalty, as the critical ratio is above recommended level and p-value is less than 0.001. Therefore
hypothesis H1(Store Attributes →Perceived Value) and H2 (Store Attributes →Customer Brand Loyalty) were
supported (Awang, 2012; Byrne, 2009) . This finding suggests that consumers perceive higher value towards the
particular hypermarket during their shopping when they realize that the location, environment and quality of the
436 Seyed Rajab Nikhashemi et al. / Procedia Economics and Finance 37 (2016) 432 – 438

product have met their expectation. As a result, such experience leads to positive evaluation towards store attributes
and brand itself. In regard to hypothesis 3, customer perceived value was hypothesized to have a positive influence
on customer brand loyalty and based on the structural model results, hypothesis 3 (Perceived Value →Customer
Brand Loyalty) was also supported as the critical ratio was above recommended level (β=.614, C.R= 6.438, P<
.001). Moreover, the findings of the study supported the mediating effect of perceived value in relationship between
store attribute and customer brand loyalty. The study found that perceived value partially mediates the effects of
store attributes toward customer brand loyalty. Table 3 and Figure 2 demonstrate the results of Structural model.

Table3: Results of Structural model

Structural path (Standardized regression weight) Coefficient S.E C.R P

(β)

H1 Perceived Value <--- Store Attribute .871 .081 9.329 0.000

H2 Customer Brand Loyalty <--- Store Attribute .364 .087 8.965 0.001

H3 Customer Brand Loyalty <--- Perceived Value .614 .064 6.438 0.000
*
p<0.05, p**<0.01

.61
SV
Perceived Value
.87

.61 .83 FV
Store Attribute

Customer Brand
.36
Loyalty

.69 .81

AL BL

Figure 1: Results of Structural Equation Modeling

5. Conclusion, Implications and Limitation

This study has met its objectives theoretically and empirically. Current research examined the effect of store
attributes on perceived value to win customer brand loyalty in retailing (Hypermarket) industry among Malaysian
customers. The outcome of the current study revealed that store attributes are found to be related to perceived value,
and contribute directly and indirectly towards customer brand loyalty. Besides, the study demonstrated that store
attributes play a major role in boosting customer value perception. More importantly, this study suggests that the
functional value can be judged by customers via store attributes which can also add symbolic value. The
relationship between store attributes and perceived value can be understood through the fact that regular customers
of a particular hypermarket know what to value. In other words, customers are very satisfied when varieties of
products and satisfactory service to the customers are provided, resulting in positive evaluation towards brand and
store itself. The customers gain confidence that they will have a pleasant shopping experience each time they visit
the hypermarket outlet and know that the hypermarket provides quality and varieties of product, service and pleasant
environment for its customers. It is believed that customers judge their value perceptions through these elements
which are associated with store attributes in terms of functional value and also symbolic value.
 Seyed Rajab Nikhashemi et al. / Procedia Economics and Finance 37 (2016) 432 – 438 437

This study empirically supports the finding that perceived value plays an important role in influencing brand
customer loyalty (Cronin Jr, Brady, & Hult, 2000). It is important to highlight that the study has adopted the multi-
dimensional approach. This study acknowledged that perceived functional values as well as perceived symbolic
value are the major predictors of customer brand loyalty. Besides, the findings enable this study to expand existing
knowledge of the value perceived by the customer during their shopping from particular hypermarket, by comparing
the different value perceptions. Compared to previous studies which view value for money as functional value to
influence customer loyalty (e.g, Sweeney & Soutar, 2001), the findings of this study reveal that symbolic value
involving how a customer can improve the way they are perceived and how they gain pleasure in an appealing and
stylish store with a good reputation is a determinant of value perception beyond the functional value in the
prediction of customer brand loyalty. Even though effort has been made to make current research as inclusive as
possible but there are certain limitations which should be taken into consideration. One of the foremost limitations
related to the sampling technique. Use of non-probability sampling has made the results applicability in other
contexts questionable. More importantly, the data was collected from only selected hypermarket customers which
has threated the results in terms of validity, reliability and generalizability. In order to generalize the results,
probability sampling with bigger population should be considered for future study.

References
Aghaei, M., Djadidi, Hassanpour, Salehi. (2012). Measure of Customer Satisfaction in the hyper supermarkets in MALAYSIA. International
Journal of Scientific and Research Publications, 18.
Awang, Z. (2012). A Handbook on SEM, "Structure Equation Modeling" 4th edition (Vol. 4). University Technology MARA Kelantan: Malaysia
Press.
Beneke, J., Cumming, A., & Jolly, L. (2013). The effect of item reduction on assortment satisfaction—A consideration of the category of red
wine in a controlled retail setting. Journal of Retailing and Consumer Services, 20(3), 282-291. doi:
http://dx.doi.org/10.1016/j.jretconser.2013.01.007
Bennett, C. L., Chen, B., Hermanson, T., Wyatt, M. D., Schulz, R. M., Georgantopoulos, P., Armitage, J. O. (2014). Regulatory and clinical
considerations for biosimilar oncology drugs. The Lancet Oncology, 15(13), e594-e605. doi: http://dx.doi.org/10.1016/S1470-2045(14)703651
Byrne, B. M. (2009). Structural equation modeling with AMOS: Basic concepts, applications, and programming: CRC Press.
Chaudhuri, A., & Ligas, M. (2009). Consequences of Value in Retail Markets. Journal of Retailing, 85(3), 406-419. doi:
http://dx.doi.org/10.1016/j.jretai.2009.05.006
Chen, P.-T., & Hu, H.-H. (2010). The effect of relational benefits on perceived value in relation to customer loyalty: An empirical study in the
Australian coffee outlets industry. International journal of hospitality management, 29(3), 405-412.
Cronin Jr, J. J., Brady, M. K., & Hult, G. T. M. (2000). Assessing the effects of quality, value, and customer satisfaction on consumer behavioral
intentions in service environments. Journal of Retailing, 76(2), 193-218. doi: http://dx.doi.org/10.1016/S0022-4359(00)00028-2
Finn, A. (2004). A reassessment of the dimensionality of retail performance: a multivariate generalizability theory perspective. Journal of
Retailing and Consumer Services, 11(4), 235-245. doi: http://dx.doi.org/10.1016/S0969-6989(03)00050-X
Fung, K. K., King, C., Sparks, B., & Wang, Y. (2013). The influence of customer brand identification on hotel brand evaluation and loyalty
development. International journal of hospitality management, 34, 31-41.
Harris, L. C., & Goode, M. M. (2004). The four levels of loyalty and the pivotal role of trust: a study of online service dynamics. Journal of
Retailing, 80(2), 139-158.
Hartman, K. B., & Spiro, R. L. (2005). Recapturing store image in customer-based store equity: a construct conceptualization. Journal of
Business Research, 58(8), 1112-1120.
Jacoby, J. (1971). A model of multi-brand loyalty. Journal of advertising research, 11(3), 25-31.
Jinfeng, W., & Zhilong, T. (2009). The impact of selected store image dimensions on retailer equity: Evidence from 10 Chinese hypermarkets.
Journal of Retailing and Consumer Services, 16(6), 486-494.
Kandampully, J., Juwaheer, T. D., & Hu, H.-H. (2011). The influence of a hotel firm's quality of service and image and its effect on tourism
customer loyalty. International Journal of Hospitality & Tourism Administration, 12(1), 21-42.
Li, X. R., & Petrick, J. F. (2008). Examining the antecedents of brand loyalty from an investment model perspective. Journal of Travel Research,
47(1), 25-34.
Odin, Y., Odin, N., & Valette-Florence, P. (2001). Conceptual and operational aspects of brand loyalty: an empirical investigation. Journal of
Business Research, 53(2), 75-84.
Petrick. (2008). Examining the antecedents of brand loyalty from an investment model perspective. Journal of Travel Research, 47(2), 25-34.
Rintamäki, T., Kanto, A., Kuusela, H., & Spence, M. T. (2006). Decomposing the value of department store shopping into utilitarian, hedonic and
social dimensions: Evidence from Finland. International Journal of Retail & Distribution Management, 34(1), 6-24.
Sekaran. (2010). Research Methods for Business A Skill- Building Approch (pp. 1-467).
Sirdeshmukh, D., Singh, J., & Sabol, B. (2002). Consumer trust, value, and loyalty in relational exchanges. The Journal of Marketing, 15-37.
438 Seyed Rajab Nikhashemi et al. / Procedia Economics and Finance 37 (2016) 432 – 438

Sparks, B., Bradley, G., & Jennings, G. (2011). Consumer value and self-image congruency at different stages of timeshare ownership. Tourism
Management, 32(5), 1176-1185. doi: http://dx.doi.org/10.1016/j.tourman.2010.10.009
Sweeney, J. C., & Soutar, G. N. (2001). Consumer perceived value: the development of a multiple item scale. Journal of Retailing, 77(2), 203-
220.
Urška Tuškej , U. G. a. K. P. (2013a). The role of consumer–brand identification in building brand relationships. Journal of Business Research.
Urška Tuškej , U. G. a. K. P. (2013b). The role of consumer–brand identification in building brand relationships. Journal of Business Research,
66(1), 53-59.
Vesel, P., & Zabkar, V. (2009). Managing customer loyalty through the mediating role of satisfaction in the DIY retail loyalty program. Journal
of Retailing and Consumer Services, 16(5), 396-406.
Yeng, L. C., & Mat, N. K. N. (2013). The Antecedents of Customer Loyalty in Malaysian Retailing: Capitalizing the Strategic Tool.
[Conference]. Proceedings of 3rd Asia Pacific Business Research Conference, 1-17.
Zeithaml, V. A. (1988). Consumer perceptions of price, quality, and value: a means-end model and synthesis of evidence. The Journal of
marketing, 2-22.