A STUDY ON CUSTOMER LOYALTY

AND PURCHASING BEHAVIOUR AT

LOCAL AND FOREIGN
HYPERMARKET IN SELANGOR

Prepared by:

MOHD HAFIZ BIN SAAHRI (4071002991)

NOOR LEENA BINTI AHMAD JAMJURI (4071016311)

CHAPTER 1
 INTRODUCTION
Retailing is one of the most important issues faced by
many countries around the world

There has been a strong shift from the traditional sundry

shops to more modern outlets such as supermarkets and
hypermarkets.

Nowadays, the consumer market is getting more

competitive.

Marketers are busy in creating new strategies to

understand customer behaviour and at the same time
retain their customers.
 PROBLEM STATEMENT
Lately, Malaysia has seen an increasing number of local or
foreign hypermarket across the country.

Marketers are challenging themselves to attract potential

customers and sustaining the existing customers.

Loyalty programs focus on price reduction, but consumers are

much more concerned about satisfaction, trust and
relationships.

This study is conducted to explore the customer purchasing

behaviour at local and foreign hypermarket and the factors
that influenced them to be loyal towards the hypermarket.
 OBJECTIVE
OBJECTIVE
• To investigate the difference between 3
3
respondent background with customer loyalty.
• To identify the OBJECTIVE
OBJECTIVE
level of customer purchasing 2
2
behaviour at both local and foreign
hypermarkets.
• To determine the OBJECTIVE
factors that discourage OBJECTIVE
1
1
customer for joining the membership card at
the hypermarket.
RESEARCH OBJECTIVES
Significance of the study:
1) Help company to optimize customer loyalty with regard to
this topic

2) Provide the data of the tabulate statistic regarding retail

analysis at Malaysia to the Ministry of Trade and Consumers
Affairs.

Limitation of the study:

1. It not represent the whole hypermarket population in
Malaysia
2. It only based on customer perception.
CHAPTER 2
• Customer loyalty is seen to be crucial to the success of business
organizations, since attracting new customers is far more
expensive than retaining existing ones (Dick and Basu, 1994)
OBJECTIVE 3
• The increased choice of alternatives can reduce customer’s
loyalty (Schriver , 1997)
• Consumers make many buying decisions every day, and it is the
focal point of marketer’s effort (Kotler and Armstrong, 2008).
• The influence of involvement in relation to purchase decisions is
OBJECTIVE 2
reflected in the amount of work an individual is willing to do in
order to maximize utility (Kamis and Davem 2005).
• Research about when and how customer clubs is effective have
shown that the reward system is very important factor (Butscher,
1998). OBJECTIVE 1
• In order to attract customers to the organization’s customer club
the rewards must exceed the costs of joining the club (Genfors
and Gustafsson, 2007)
LITERATURE REVIEW
CHAPTER 3
 RESEARCH METHODOLOGY
Type of Research→ Descriptive research using
questionnaires (quantitative)

Research Design → Adapted from previous related

study (Phillip Law)

Population → Customers who shop at local or

foreign hypermarket in Selangor.

Sampling → Non-probability sampling or

convenience sampling
Data Collection → 1) Primary data (questionnaire)
2) Secondary data (journal, books etc)
Instrumentation → 1) Section A: Demographic
2) Section B: Factors discourage customer
from joining membership card.
3) Section C: Purchasing behaviour
4) Section D: Customer loyalty
Data Analysis → SPSS 16.0 using descriptive analysis
and Cross-Tabulation

Pilot Study → Determine the reliability of the instrument

using Cronbach’s Alpha.
CHAPTER 4
 DATA ANALYSIS AND FINDINGS
 Pilot Study:

Cronbach’s Alpha N of Items

0.8808 40

 Background of the Respondent:

Variables Categories Frequencies Percentage

Gender Male 35 35.0
Female 65 65.0
Age < 20 years 24 24.0
21-29 years 42 42.0
30-39 years 17 17.0
40-49 years 8 8.0
9 9.0
> 50 years
Type of Local hypermarket 50 50.0
hypermarket Foreign hypermarket 50 50.0
 < 6 month 16 16.0
Length of shopping 7-12 month 30 30.0
experience 1-5 years 31 31.0
> 5 years 23 23.0
3-4 times per week 20 20.0
3-4 times per month 46 46.0
Shopping frequencies 3-4 times per year 17 17.0
Once per month 16 16.0
Once per year 1 1.0
< RM1000 40 40.0
RM1001-RM2000 26 26.0
Income RM2001-RM3000 20 20.0
RM3001-RM4000 10 10.0
> RM4000 4 4.0
Civil servant 34 34.0
Private sector 49 49.0
Employment status Student 14 14.0
Unemployed 2 2.0
Others 1 1.0
Hypermarket Yes 89 89.0
recommendation No 11 11.0
Yes 69 69.0
Membership card
No 31 31.0
OBJECTIVE 1
To determine the factors that discourage customer for
joining the membership card at the hypermarket.
AGREE DISAGREE
ITEMS
N % N %

15 15.0
I do not shop at the hypermarket often
13 13.0
I don’t want to pay for the yearly membership fees
I do not know the benefit as a member 11 11.0

I do not know how the card works 11 11.0

I have other card and do not want more cards 10 10.0

Not recommended by friends and relatives 7 7.0

OBJECTIVE 2
To identify the level of customer purchasing
behaviour at both local and foreign hypermarkets.
1. Local Hypermarket
AGREE DISAGREE
ITEMS
N % N %

Reasonable price 31 52.5

Wide range of products 28 48.3
The store environment is convenient 26 53.1
I am a member of their membership card 10 62.5

The staffs are helpful and friendly 8 57.1

Quick moving check-out lines during payment 8 50.0
The store is near with my house or office 7 70
2. Foreign Hypermarket
AGREE DISAGREE
ITEMS
N % N %

Reasonable price 31 52.5

Wide range of products 30 51.7
I can get everything I need at the same store 30 54.5
Special deals and discount 29 59.2

Complete physical facilities 29 59.2

I trust and satisfied with their products 11 44.0
Quick moving check-out lines during payment 8 50.0
The staffs are helpful and friendly 6 37.5
Level of Purchasing Behaviour:
local foreign total

Level of low Count 5 2 7

purchase % of total 50 20% 7.0%

moderate Count 39 42 81
% of total 39.0% 42.0% 81.0%

High Count 6 6 12
% of total 60% 60% 12.0%

total Count 50 50 100

% of total 50% 50% 100%
OBJECTIVE 3
To investigate the difference between respondent
background with customer loyalty.
1. Member
AGREE DISAGREE
ITEMS
N % N %

Another store has quicker moving check-out lines 33 68.8

during payment
Another store has wider selection of store brand 29 80.6
products that is cheaper than well known brands
Another store provide bigger and ample parking 27 69.2
space
I am a member of other store card 21 60.0
I trust and satisfied with products from other store 19 76.0
Another store is nearer with my house or office 16 84.2
2. Non- Member

AGREE DISAGREE
ITEMS
N % N %

Another store has higher quality of product 16 39.0

Another store that has more complete physical 15 31.3
facilities
Another store has quicker moving check-out lines 15 31.3
during payment

I am a member of other store card 14 40.0

I trust and satisfied with products from other store 6 24
Another store has more convenient environment 3 16.7
 CONCLUSION AND RECOMMENDATIONS
Objective 1
Based on the findings, most of the respondent agreed
that they do not join hypermarket membership card
because they do not shop at the hypermarket often.

It is supported by a study made by Genfors and

Gustafsson (2007) in their study indicated that
member of the loyalty program tend to visit the store
regularly compared with non-members.
 Objective 2
The findings shows that the level of purchasing behaviour at local and
foreign hypermarket is more less the same.

It highlight that the customer in local and foreign hypermarket is at

moderate level purchasing behaviour.

This is might be due that customers are not concern about type of
hypermarket but more on the individual needs and wants.

It inline with the literature review from Kamis and Dawem (2005)
whereas they says that the influence of involvement in relation to
purchase decisions is reflected in the amount of work an individual is
willing to do in order to maximize utility.