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FACTORS AFFECTING CUSTOMER SATISFACTION IN RETAIL

CHAINS IN KENYA: A CASE STUDY OF NAIROBI DEFENCE FORCES CANTEEN

1Veronica Aluoch OWUOR & Dr. Esther WAIGANJO

2

1MBA Scholar, Jomo Kenyatta University of Agriculture &Technology, Kenya

2Lecturer, Jomo Kenyatta University of Agriculture &Technology, Kenya

ABSTRACT Retail chains with strong inventory management will effectively satisfy customers and cause them to prefer their services as compared to their competitors.. This study sought to determine factors affecting customer satisfaction in retail chains focusing on DEFCO-Nairobi. The main objective of this study was to assess the factors that enhance customer satisfaction in retail chains with a focus on DEFCO retail Chains. The study used a descriptive survey approach in collecting data from the respondents. The target population was eight DEFCO retail shops in Nairobi. From the study population of 520, a sample size of 20% was taken giving a respondent base of 104 consisting of top managers, subordinates and customers. Stratified random sampling was used to select a sample size. Questionnaire was used to gather raw data from the field before it was analyzed and tabulated. The data was then analyzed using descriptive statistics which included; frequency, percentages, means and standard deviations. Further inferential analysis, correlation was carried out to establish the relationship between factors influencing customer satisfaction at retail chains at DEFCO. From the findings, the study concludes that to maximize customer satisfaction, focus should be on supply product, value for money, quality improvement, service quality and customer-oriented services. The study recommended that customers need to be perceived that they receive value for money as a way to satisfy them. Key Words: Customer Satisfaction: Supply product, Value for money, Quality improvement, Service quality

INTRODUCTION In the midst of stiff and fierce competition and increased number of retail chains outlets providing a variety of products, customers have become accustomed to patronizing multiple outlets (Kattara, Waheba& El- Said, 2008). Retailers have recognized this trend and are of the view that customer satisfaction plays a role in the success of business strategies. Satisfaction is a crucial issue for both customer and retail management. It is an important concept within general retail marketing and consumer research. (Anselmsson,2006). Customer satisfaction in a retail setting has been linked to a number of important outcomes, including sales performance, customer retention and loyalty (Martenson, 2007). As a result, it is imperative that retailers know the determinants of customer satisfaction. An extensive examination of early studies in consumer satisfaction illustrates that most researchers define customer satisfaction, as a post choice evaluative judgment concerning a specific purchase decision (Keaveny, 2005). Many authors have further explored the notion of customer satisfaction. They identified two main types of satisfaction: the “transaction-specific and the overall or cumulative satisfaction (Bouldinget al., 1993). From the transaction-specific perspective, customer satisfaction is viewed as a post-choice evaluation of a specific purchase occasion (Oliver, 2003). In contrast, the overall or cumulative perspective suggests that satisfaction accumulates across a series of experiences with the product, which results in an overall evaluation over time (Fornell, 2002). In addition, recent studies claim that satisfaction should be viewed as a judgment based on the cumulative experience rather than a transaction – specific phenomenon (Bayus, 2004). Cumulative satisfaction in the retail setting can be interpreted as the result of

International Journal of Business & Law Research 2(4):73-87, Oct-Dec. 2014

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evaluating the shopping trip and retailer's offer in correlation to the consumers' fulfilled expectations (Sivadas & Baker-Prewitt, 2000). Thus, customer satisfaction in this study is defined as the customer's overall evaluation of the store experience. Studies have shown that on average, four percent of the customers will be dissatisfied or complain about the product and/or service. The various studies have also shown that a disatisfied customer is likely to tell nine other people, while a satisfied customer will tell five people about the good treatment (Menon, 2004). At the University of Wisconsin, Edward (2007), director of supply chain management defined “perfect order”: it is when a customer finds the right product, destination, condition, documentation, and cost. The grocery industry includes the food, beverage, and consumer packaged goods. The grocery industry focuses on perfect order metrics (Blanchard, 2007). The service industry and in particular, the retail chain market has been vital to the world economy and undergone the ever intensified competition under recent crisis and economic turn-down period. The modern retail industry is booming across the world (Martinez-Rui, Jiménez- ZarcoandYusta, 2010). Therefore, it is essential for retailers to use strategies which focus on satisfying current customers. Retails chain restaurant have played an important role in food distribution since they appeared. For modern life, the existence of traditional markets has been gradually replaced by their descendent superstores and people depend on retail chain enterprises for their basic grocery needs. Retail chains with strong inventory management will effectively satisfy customers and cause them to prefer their services to their competitors (Ghauri & Gronhaug, 2007). The retail chains with weak inventory management, on the other hand, will offer poor customer service and thus will lose competitiveness. Customers in DEFCO retail chains have for long been experiencing difficulties with their satisfaction ratings. DEFCO customer satisfaction scores is low than expected (Kamau, 2008). One of the measures of the adequacy of inventory management is customer satisfaction level, measured by the service level of the products, but it is common to find retailers frustrate their customers by not having the necessary stock on hand or the proper selling support on the sales floor. Despite the critical role of customer satisfaction in improving firm profitability, there has been scanty study that has focused on establishing the influence of customer satisfaction in achieving competitive advantage in hyper stores in Kenya. This study therefore sought to fill the existing knowledge gap by determining factors affecting customer satisfaction in retail chains focusing on DEFCO-Nairobi.

Objective of the study The general objective of this study was to investigate factors affecting customer satisfaction in retail chains focusing on Nairobi Defence Forces Canteen .The study specific objectives were:

1. To establish the effect of supplying of products on customer satisfaction in Nairobi Defence Forces Canteen

2. To determine the effect of value for money on customer satisfaction inNairobi Defence Forces Canteen

3. To establish the effect of quality improvement on customer satisfaction in Nairobi Defence Forces Canteen

4. To determine the effect of service quality on customer satisfaction in Nairobi Defence Forces Canteen.

THEORETICAL FRAMEWORK Assimilation theory is based on Festinger’s (1957) dissonance theory. Dissonance theory posits that consumers make some kind of cognitive comparison between expectations about the product and the perceived product performance. This view of the consumer post usage evaluation was introduced into the satisfaction literature in the form of assimilation theory (Peter, 2000).According to Craig, Ghosh and McLafferty (2004), consumers seek to avoid dissonance by adjusting perceptions about a given product to bring it more in line with expectations. Consumers can also reduce the tension resulting from a discrepancy between expectations and product performance either by distorting expectations so that they coincide with perceived product performance or by raising the level of satisfaction by minimizing the relative importance of the dis confirmation experienced (Magi, 2003).

Owuor & Waiganjo…...Int. J. Business & Law Research 2 (4):73-87, 2014

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Cognitive Dissonance Theory: Payton et al (2003) argues that Assimilation theory has a number of shortcomings. First, the approach assumes that there is a relationship between expectation and satisfaction but does not specify how disconfirmation of an expectation leads to either satisfaction or dissatisfaction. Second, the theory also assumes that consumers are motivated enough to adjust either their expectations or their perceptions about the performance of the product. Cognitive dissonance is an uncomfortable feeling caused by holding two contradictory ideas simultaneously. The theory of cognitive dissonance proposes that people have a motivational drive to reduce dissonance by changing their attitudes, beliefs, and behaviours, or by justifying or rationalizing them. The phenomenon of cognitive dissonance, originally stated by Festingerin (1957), has been quickly adopted by consumer behaviour research (Arturo, 2009). Cognitive Dissonance Theory, developed by Leon Festinger (1957), is concerned with the relationships among cognitions. According to cognitive dissonance theory, there is a tendency for individuals to seek consistency among their cognitions (i.e., beliefs, opinions). When there is an inconsistency between attitudes or behaviors (dissonance), something must change to eliminate the dissonance. In the case of a discrepancy between attitudes and behavior, it is most likely that the attitude will change to accommodate the behavior. Described as a psychologically uncomfortable state that arises from the existence of contradictory (dissonant, non - fitting) relations among cognitive elements (Festinger , 1957) cognitive dissonance revealed high exploratory power in explaining the state of discomfort buyers are often in after they made a purchase (Hamburg, Wieseke and Torsten, 2009). Equity theory: This theory is built upon the argument that a man’s rewards in exchange with others should be proportional to his investments. An early recognition of this theory first came out of research by Stouffer and his colleagues in military administration. The belief is that people value fair treatment which causes them to be motivated to keep the fairness maintained within the relationships of their co-workers and the organization In other words, the equity concept suggests that the ratio of outcomes to inputs should be constant across participants in an exchange (Arturo, 2009). As applied to customer satisfaction research, satisfaction is thought to exist when the customer believes that his outcomes to input ratio is equal to that of the exchange person. Equity theory has been widely applied to business settings by industrial psychologists to describe the relationship between an employee's motivation and his or her perception of equitable or inequitable treatment. In a business setting, the relevant dyadic relationship is that between employee and employer (Babakus & Yavas 2008). As in marriage and other contractual dyadic relationships, equity theory assumes that employees seek to maintain an equitable ratio between the inputs they bring to the relationship and the outcomes they receive from it .

EMPIRICAL LITERATURE REVIEW A study was developed to investigate the satisfaction levels of customers in supermarkets of Institute of Contemporary Arts (ICA) hotels. In the midst of stiff and fierce competition and increased number of grocery retail outlets providing a variety of products, customers have become accustomed to patronizing multiple outlets. Retailers have recognized this trend and are of the view that customer satisfaction plays a role in the success of business strategies. Therefore it has become important for grocery retail stores to try and manage customer satisfaction. Data was collected from three supermarkets in Visby and Gotland. The study examined the importance of overall dimensions and specific elements of customer satisfaction towards the measurement of satisfaction levels. In addition, comparative analysis was conducted between the three relative grocery stores. Customer satisfaction levels were measured. The highest percentage of customers of the whole sample belonged to medium level of satisfaction. The statistical result concluded that customers of ICA Nära and customers of ICA were higher satisfied than those of Coop Forum. The results showed that customers felt satisfied with Location, Staff courtesy and Reliability of supermarkets as the top aspects that drive satisfaction while additional services were ranked lowest. Due to these results, the impact of these attributes on customer satisfaction must not be underestimated. Saunders (2000), examined the causal relationships among service quality, customer satisfaction, and purchase intention. Each variable was measured by one item. There were 660 usable questionnaires randomly collected from customers of four types of businesses in the southeastern United States: banking,


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pest control, dry cleaning, and fast food. The results of correlation analysis have suggested that, service quality was an antecedent of consumer satisfaction, service quality had less effect on purchase intentions than did consumer satisfaction, and consumer satisfaction had a significant effect on purchase intentions. Berry and Parasuraman (1992) believed that firms should not regard service failure as a problem but as an opportunity to create satisfied customers. Hence, recovery strategies have a dramatic impact on a firm's revenue and profitability (Yusta, 2010). Service recovery literature has shown that resolving customer problems has a strong impact on customer satisfaction and loyalty. Swanson and Kelley (2001) also found that customer behavioral intentions are more favorable when customers believe that firms consistently implement service recovery when failures occur. Furthermore, Robbins and Miller (2004) found that well-handled service recovery strongly affects customer satisfaction. Knowledgeable and helpful salesclerks are viewed as the strongest determinant of store patronage among specialty store shoppers, considerably higher than department store and mass merchandiser shoppers (Terblanche & Boshoff, 2004).

CONCEPTUAL FRAMEWORK

Source: Author (2014) Independent variables Dependent variable

Figure 1: Conceptual Framework

Supply Products -Supply of variety -Capability of supply -Use of technology -Expected Brands

Customer Satisfaction -Customer Loyalty -Repurchase intention - Expectation met Likelihood to recommend friends -Effective satisfied

Quality Improvement -Quality management -Effective design of products -Knowledge -Quality assurance

-Quality Controls

Service Quality -Realibility -Timeliness operations - Tangibles Good relationship

Value of Money -Pricing of products -Discount -Promotion -Variety of products

-Freshness of products


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Product variety influences a customer's perception of a store (Van Herpen and Pieters, 2002). In turn, perceptions concerning product variety influence both satisfaction and store choice (Babakus & Yavas 2008). The availability of a wide variety of products is ranked higher as a store patronage attribute among department and discount store shoppers than specialty store shoppers , indicating expectations surrounding product assortment vary by retail chain type. According to Ciavolino and Dahlgaard (2007), Value for money is the perceived level of quality relative to the price paid for a product or service. Value of money is based on competitive pricing of products, discounts awarded to customers , and promotions. Cronin & Taylor (1992) claimed that customer satisfaction is not only affected by customer services but also by price and convenience. Additionally, several researches have been done the value for money and the value attached to it by customers. These studies also point out the difference between price and quality and how they influence perceived value, customer satisfaction and customer behavior. Furthermore, Zeithaml (1988) says that, customer value for money is the overall assessment of the utility of a product based on perceptions based on what is received and what is given. Quantitative studies by Keaveny (1995) into switching behavior in services revealed results that more than half of customers defected because of poor price perception. While Varki & Colgate (2001) study of the banking industry also reached the same conclusion that price perception can directly influence customer satisfaction. Product quality and product features were considered the most important product choice criteria in a study of Greek grocery customers (Baltas and Papastathopoulou, 2003). Quality is seen as a satisfaction-maintaining factor in the supermarket sector in that improvements in quality have a small positive impact on satisfaction while reductions in quality of the same magnitude have a significantly greater chance of reducing satisfaction Proponents of each approach have sought to improve them as well as apply them to enterprise types not originally targeted. Customer satisfaction is one of the key factors in modern marketing and customers’ behavior analysis. If the customers are satisfied with the provided goods or services, the probability that they use the services again increases . Chen and Ko (2007) proposed fuzzy linear programming models to determine the fulfillment levels of parts characteristics under the requirement to achieve the determined contribution levels of design requirements for customer satisfaction. Grigoroudis et al. (2008), considered the problem of measuring user satisfaction in order to analyze user perceptions and preferences to assess website quality. Hsu (2008) proposed an index for online customer satisfaction, which is adapted from an American Customer Satisfaction Index (ACSI).

RESEARCH METHODOLOGY

Research Design The study utilized both quantative and qualitative approaches in collecting data from the respondents. Descriptive case study portrays an accurate profile of persons, events, or account of the characteristics, for example behaviour, opinions, abilities, beliefs, and knowledge of a particular individual, situation or group (Burns and Grove 2003). The case study research design was chosen because the study was not only confined to the collection and analysis of the data, but also sought to investigate and establish the existence of certain relationships among the variables under investigation. Hence, the design is selected to satisfy this aspect of the study (Mugenda, 2003).

Population and Sampling Frame The population was 8 DEFCO retail shops in Nairobi. The study population for investigation was 520 comprising of top-managers, subordinate staff and customers from each DEFCO retail shops in Nairobi. The sample frame included DEFCO top managers, subordinate staff and customers of DEFCO retail shops in Nairobi and are 520 in total. Thereafter the study used stratified random sampling to get the sample population. From the study population of 520, a sample size of 20% was taken giving a respondent base of 104 consisting of top managers, subordinates and customers as shown on Table 1. This sample size is considered representative and comprehensive in the coverage of the study objectives and economical in terms of time resource. Mugenda and Mugenda (2003) indicate that a sample of 10% to 20% of the population was sufficient for a study. The sample size is as shown in Table 1.


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Table 1: Population and Sample Size

Category Population Percentage Sample Proportion

Sample Size

Top managers 64 12 0.2 13

Subordinate staff 96 19 0.2 19

Customers 360 69 0.2 72

Total 520 100 104

The sampled population of the study was 104 where 92 respondents responded and returned the questionnaire. This constituted 88.46% response rate. Of the 92 respondents were the top-managers, subordinate staff and customers from each DEFCO retail shops in Nairobi.Mugenda and Mugenda (2003) indicate that for generalization purposes, a response rate of 50% was adequate, while that of 60% was good and a response rate of 70% as excellent.The response rate of 88.46% for this study was therefore sufficient for generalization for the study.

Data Collection Instruments The primary data for this study was collected using the questionnaires consisting of a mixture of open ended and close ended questions and according to Polit, and Beck (2003), this allows for intensity and richness of individual perceptions in respondent responses. To test the performance of the questionnaire under actual conditions of data collection, a pilot survey was conducted to determine the relevance of the mode of administration to be applied (self administration).The pilot study helped the researcher to determine the level of non-response expected as well as secure command of possible co-operation of the respondents. According to Mugenda & Mugenda(2003),the recommended pilot sample is one percent to ten percent (1%to10%)of the sample size.

Data Analysis and Presentation Quantitative data, which was collected using closed ended questions in the questionnaires, was chronologically arranged with respect to the questionnaire outline to ensure that the correct code was entered for the correct variable. The tabulated data was analyzed with the help of the Statistical Package for Social Sciences (SPSS 17.0 (Finchilescu, 2005). The data was then analyzed using descriptive analysis which included; frequency, percentages, means and standard deviations. Further inferential analysis correlation was carried out to established the relationship between factors influencing customer satisfaction at DEFCO.

RESEARCH FINDINGS AND DISCUSSION

Effects of Supply of Products and Custome r Satisfaction Whether Products Offered at DEFCO varies

Table 2: Whether Products Offered at DEFCO varies

Frequency Percentages

Yes 92 100

Total 92 100

From the findings in Table 2, all the respondents indicated that the products offered at DEFCO varies. Respondents further stated that the retailer stocks a large number of different products to draw in customers looking for an array of goods, offering a number of products instead of focusing on a few expose the retailers to the risk that consumers will go to more specialized retailers with more selection of a specific type of product. The study further found that retailers are not able to offer a deep assortment of a product while at the same time offer a wide variety of products. This is in line with Babakus and Yavas (2008), who stated that the availability of a wide variety of products is ranked higher as a store patronage


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attribute among department and discount store shoppers than specialty store shoppers, indicating expectations surrounding product assortment vary by retail chain type. This implies that a convenience store offers a wide variety of products, but a limited number of choices within a particular product range. Whether Products Offered at DEFCO Retail Chains Influence Customer Satisfaction .Table 3. Products offered at DEFCO retail chains influence customer satisfaction

Products offered at DEFCO retail chains influence customer satisfaction

Str

on

gly

ag

ree

Ag

ree

Neu

tral

Dis

ag

ree

Str

on

gly

dis

ag

ree

Mean

SD

DEFCO offers the best products to all customers

2 6 14 10 60 4. 79 0.70

Are the products served in a presentable manner

0 2 16 18 56 4.67 0.55

There adequate variety of food & Beverages offered in the DEFCO

7 9 16 20 40 4.52 0.47

The products are available at DEFCO at all time

5 8 14 20 45 3. 92 0.18

The goods offered at DEFCO are of good image

3 4 15 29 41 3. 81 0.15

The DEFCO offer their goods in organized manner

6 3 24 21 38 4.77 0.58

The food is visually appealing and tasty

1 6 30 25 30 4.50 0.38

There are varieties of products offered in DEFCO

4 1 6 32 49 4.88 0.71

The amount of food served is enough 3 5 12 61 11 3.66 0.13

DEFCO have knowledgeable staff who serve the customer

6 2 16 18 50 4.73 0.59

Customers are advised of the best prodcuts to buy depending with the needs

9 9 14 25 35 4.70 0.50

The study found that most of the respondents strongly agreed that there are varieties of best products offered in DEFCO to all customers, that the DEFCO offer their goods in organized manner, has the knowledgeable staffs who serves the customer and that customer are advised of the best products to buy depending with the needs which influence customer satisfaction as indicated by a mean of 4.88, 4.79, 4.77, 4.73 and 4.70 with standard deviation of 0.71, 0.70, 0.58, 0.59 and 0.50.Most of the respondents strongly agreed that the products are served in a presentable manner and there is adequate variety of food and beverages offered which are visually appealing and tasty in the DEFCO influencing customer satisfaction as indicated by a mean of 4.67, 4.52 and 4.50 with standard deviation of 0.55, 0.47 and 0.38. The study further found that most of the respondents disagreed that the products are available at DEFCO at all time, the goods offered at DEFCO are of good image or and that the amount of food served is enough as indicated by a mean of 3.92, 3.81 and 3.66 with standard deviation of 0.18, 0.15 and 0.13. This is in line with van Herpen and Pieters (2002) who found that product variety influences a customer's perception of a store. The finding supported finding by Babakus&Yavas(2008) who found that the availability of a wide variety of products was ranked higher as a store patronage attribute among department influencing customer satisfaction to a great extent (Table 3).


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Value of money Extent to which Price of Goods are competitive On the extent to which price of goods at DEFCO were competitive, the study found that majority 66% of the respondents indicated that the prices of goods at DEFCO are competitive to a very great extent while 26% of the respondents indicated that the prices of goods at DEFCO are competitive to a great extent. The respondents further stated that DEFCO maintains customers in the face of price discounts from competitors, lures in customers with a desirable product at a highly desirable rate and then benefit from the additional products and purchases that customer make while they are in store. This implied that the DEFCO restaurants that offered the most attention, the best, easiest product through competitive prices were able to satisfy their customers. This was in line with Arnold et al. (2003) who found low prices to be the second most important store characteristic for supermarket shoppers that influence customer satisfaction and that price of products was a significant predictor of customer satisfaction for Australian shoppers Value for money influence customer Satisfaction

Table 4: Value for Money Influence Customer Value for Money Influence Customer

Mo

dera

tely

Ex

ten

t

Gre

at

ex

ten

t

very

gre

at

ex

ten

t

Mean

Std

dev

iati

on

The customers are offered frequent discount on product offered at DEFCO

14 26 52 4.73 0.65

At DEFCO, promotions are offered frequently

19 23 50 4.90 0.71

The amount of food served are priced at an affordable rates

16 27 49 4.84 0.63

The food is served in variety 14 28 50 4.63 0.64 The facility where foods are offered are clean and of high standard

15 30 47 4.56 0.57

The goods offered at DEFCO are always fresh

24 26 42 4.45 0.54

The food offered is healthy and nutritious 36 26 30 4.41 0.31 Customers are served conveniently 19 53 20 4.30 0.27

From the findings, majority of the respondents strongly agreed that at DEFCO, promotions are offered frequently, the amount of food served are priced at an affordable rates, customer are offered frequent discount on product offered at DEFCO, the food is served in a variety and that the facility where foods are offered are clean and of high standard as indicated by a mean of 4.90, 4.84, 4.73, 4.63 and 4.56 with standard deviation of 0.71, 0.63, 0.65, 0.64 and 0.57. Most of the respondents agreed that the goods offered at DEFCO are always fresh, healthy and nutritious and that customers are serviced conveniently as indicate by a mean of 4.45, 4.41 and 4.30 with standard deviation of 0.54, 0.31 and 0.27. This is in line with Zeithaml (1988) who says that the value for money and the value attached to it by customers are related. This implies that customers who are perceive that they receive value for money is more satisfied than customers who do not perceive they receive value for money.


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Quality improvements Whether DEFCO Foodstuff Freshness Influence Customer Satisfaction Table 5: Whether DEFCO Foodstuff Freshness Influence Customer Satisfaction


Yes 47 51

No 45 49

Total 92 100

The study sought to know whether foodstuff freshness influence customer satisfaction. The results were presented in Table 6, From the findings, majority 51% of the respondents indicated that foodstuff freshness influence customer satisfaction while 49% of the respondents indicated that foodstuff freshness do not influence customer satisfaction. Respondents further stated that consumers are willing to pay more to purchase the quality food that they demand and changes if the quality is not up to expectation, quality of goods upheld a degree of freshness. This is based on Trappey & Lai’s (1997) argumentation that that value in retail chains stores is attributed to various components such as quality, service, variety, nutrition, convenience, freshness and facilities. Extent to Which DEFCO Adopted ICT to Influence Quality Improvement The study sought to know the extent has DEFCO adopted ICT to influence quality improvement as indicated in Table 6.

Table 6: Extent to Which DEFCO adopted ICT to Influence Quality Improvement


Very great extent 68 74

Great extent 24 26

Total 92 100

From the study, majority 74% of the respondents indicated that DEFCO adopted ICT to influence quality improvement to a very great extent while 26% of the respondents indicated that DEFCO adopted ICT to influence quality improvement to a great extent. Respondents further stated that DEFCO adopts Information technology to improve acquisition, storage and dissemination of vocal, pictorial, textual and numeric information by microelectronics based combinations of computing and telecommunications. This is in line with Greenwood (1997), the competitive advantage of information technology is derived from comparative efficiency. This implies technical quality is related to the customer transaction satisfaction and also allows the purchasers to shop and check the status of potential suppliers and standardization of data making data easier to manipulate and analyze internally. Quality improvement influences customer satisfaction From the findings in Table 7, majority of the respondents indicated that DEFCO deliver product in clean package, the facility where foods clean and of high standard and food offered is nutritious, influencing customer satisfaction to a very great extent as indicated by a mean of 4.70, 4.59 and 4.53 with standard deviation of 0.64, 0.56 and 0.50. The study further found that most of the respondents indicated that the customers are offered quality products as the amount of food served is balanced and are of high health standard which influence customer satisfaction to a great extent at indicated by a mean of 4.41, 4.39 and 4.26 with standard deviation of 0.47, 0.40 and 0.32.The study implied that quality improvement had positive impact on customer satisfactions and that Quality improvement in products and services at DEFCOs is seen as a satisfaction-maintaining factor .The findings concurred with Baltas and


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Papastathopoulou, (2003) who found that product quality and product features influence customer satisfaction at Greek groceries shops.

Table 7: Quality improvement influence customer satisfaction

Service quality Whether Staff Assistance at DEFCOs Improve Customer Satisfaction From the findings, majority 57% of the respondents indicated that staff working at DEFCO offer assistance improving customer satisfaction to a very great extent while 43% of the respondents indicated that staff working at DEFCO offering assistance improves customer satisfaction to a great extent Table 8. Delivery of goods to customers influence customer satisfaction

Table 8: Whether delivery of goods to customers influence customer satisfaction


Yes 72 78

No 20 22

Total 92 100

The study sought to know whether delivery of goods to customers influence customer satisfaction. From the findings, majority 78% of the respondents indicated that delivery of goods to customers influence customer satisfaction while 22% of the respondents indicated that delivery of goods to customers do not influence customer satisfaction Quality improvement influencing customer satisfaction at DEFCO The study sought to know extent to which respondents agreed with the given statement concerning quality improvement influencing customer satisfaction at DEFCO. From the findings (Table 9), majority of the respondents strongly agreed that customer complaints are responded to within the least time, the DEFCO put in place music facility, the customer are charged the correct price of the goods taken, there is always adequate sitting capacity in the DEFCO facilities and that the customer are served at flexible operation time as indicated by a mean of 4.88, 4.71, 4.70, 4.65 and 4.59 with standard deviation of 0.64, 0.76, 0.59, 0.60 and 0.57. Most of the respondents agreed that staffs working at DEFCO are friendly and customers are served in clean and spacious atmosphere as indicated by a mean of 4.53 and 4.39 with standard deviation of 0.42 and 0.48.

Quality improvement issues

No Extent

Less extent

Moderate Extent

Great extent

very great extent

Mean SD

The customer are offered quality products

2 6 18 24 42 4.41 0.47

DEFCO deliver product in clean package

0 2 16 18 56 4.70 0.64

The amount of food served is balanced

10 4 11 28 39 4.39 0.40

The food served are of high health standard

9 8 19 25 31 4.26 0.32

The facility where foods are served are clean and of high standard

7 14 12 26 33 4.59 0.56

The food offered is nutritious 5 6 16 28 37 4.53 0.50


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Table 9: Quality Improvement Influencing Customer Satisfaction at DEFCO N

eu

tral

Ag

ree

Str

on

gly

ag

ree

Mean

Std

dev

iati

on

Customer are served in Clean and spacious atmosphere 6 18 69 4.39 0.48

The DEFCO put in place Music facility 9 37 47 4.71 0.76

The customer are charge the correct price of the goods taken

8 33 51 4.70 0.59

Customer complaints are responded to within the least time 10 35 47 4.88 0.64

There is always adequate sitting capacity in the DEFCO facilities

7 40 45 4.65 0.60

The customer are served at flexible operation time 13 33 46 4.59 0.57

Staff working at DEFCO are friendly 3 38 51 4.43 0.42

Correlations Analysis The study conducted a Pearson Correlation analysis for all the study variables and noted that there existed a very strong and negative correlation between factor affecting customer satisfaction in the at in retail chains on DEFCO-Nairobi at 95% confidence level. Correlation between supply of products and customer satisfaction

Table 10: Correlation Coefficient Between Supply of Products and Customer Satisfaction

Customer satisfaction

Supply Products Pearson Correlation .-768(*)

Sig. (2-tailed) 0.001

N 92

To establish whether ineffective supply of products affected customer satisfaction at DEFCO-Nairobi , Pearson correlation was done between the level of supplying products rating and rating on customer satisfaction, as shown on Table 10. The study revealed a negative, significant correlation between supply of products and customer satisfaction r = .-768with P= 0.001<0.05.The finding were statistically significant as P< 0.05. This indicates that inefficiency and ineffective supply of products affected customer satisfaction to a great extent. The findings were similar to Babakus &Yavas (2008) who revealed that the availability of a wide variety of products was ranked higher as a store patronage attribute among department and discount store shoppers than specialty store shoppers, indicating expectations surrounding product assortment vary by retail chain type. Correlation Between Value For Money and Customer Satisfaction

Table 11: Correlation Coefficient Between Value for Money and Customer Satisfaction


value for money Pearson Correlation .-0.835(*)

Sig. (2-tailed) .0032

N 92

The study revealed a negative, significant correlation between value for money and customer satisfaction r =-0.835with P= 0.0032 < 0.05 (Table 11).The finding were statistically significant as P< 0.05. This indicates that ineffective pricing of products and food stuff at DEFCO affected customer satisfaction to a


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great extent. The finding supported finding by Liao and Aichia, (2004) who found that utility per dollar measure of value and suggest that there is need for companies to adjust their strategies towards delivering superior customer value as it is a strong driver of customer satisfaction, retention and profitability. Correlation Between Quality Improvement and customer satisfaction Table 12: Correlation between Quality Improvement and Customer Satisfaction


Quality Improvement Pearson Correlation .-839(*)


N 92

The study revealed a negative, significant correlation between Quality improvement and customer satisfaction r =.-839with P= 0.002 < 0.05 (Table 12).The finding were statistically significant as P< 0.05. This indicates that low quality of products served at DEFCO affected customer satisfaction .This finding concurred with Singh, (2006) who established thatQuality management in a restaurants was focused not only on product quality, but also the means to achieve it as Quality improvement uses quality assurance and control of processes as well as products to achieve more consistent quality and improve customer satisfactions. Correlation Between Service Quality and customer satisfaction

Table 13: Correlation Between Service Quality and Customer Satisfaction


Service Improvement Pearson Correlation . -221 (*)


N 92

The study revealed a weak negative, correlation between service Quality and customer satisfaction r = .-221with P= 0.001< 0.05.The finding were statistically significant as P< 0.05. This indicates that low service quality at DEFCO significantly affected customer satisfaction. The finding supported finding by Cronin and Taylor (1992) whose results of correlation analysis found that service quality was an antecedent of consumer satisfaction, service quality had less effect on purchase intentions than did consumer satisfaction, and consumer satisfaction had a significant effect on purchase intentions. Thus customer satisfaction strongly mediated the effect of service quality on customer buying intentions at DEFCOs (Table 13).

CONCLUSIONS Based on the findings of the study, the following main conclusions were made about the factors affecting customer satisfaction in retail chains focusing on DEFCO-Nairobi. Customer satisfaction is an important strategy in maintaining customers, particularly those in retail chain. Customer satisfaction being an experience-based assessment made by customers and how far their expectations about the overall functionality of the services obtained, the study concludes that convenience stores offer a wide variety of products, but a limited number of choices within a particular product range. Therefore availability of a wide variety of products is ranked higher as a store patronage attribute to store shoppers indicating expectations surrounding product assortment vary by retail chain. Since customer satisfaction is not only affected by customer services but also by price and convenience, the study concludes that price image has implications for store patronage and that products offered are very important since they have the ability to influence or change the purchasing behavior of


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consumers. The study also notes that failure to pricing the products supply in accordance with quality and quantity affected customer satisfaction to a great extent. The study observed that retailers that offer the product through competitive prices were able to satisfy their customers and value for money and the value attached to products offered by customers were related. The study also notes that service quality affected customer satisfaction indicating that low service quality at DEFCO significantly affected customer satisfaction. Service quality was found to be an antecedent of consumer satisfaction but had less effect on customer purchase intentions of products at DEFCOs.

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