Check Fun, is it fun?

The customers satisfaction of Check Fun

by 9631512 9631523 9631531 9631533

Professor Charlie Trappey

Table of Content I. Abstract....................................................................................................................5 1. Introduction.............................................................................................................6 1.1 Research Background...................................................................................6 1.2 Research Motivation.....................................................................................8 2. Literature Review....................................................................................................9 2.1 Research Question......................................................................................10 3. Method Section......................................................................................................11 3.1Research Framework...................................................................................11 3.2 Hypothesis..................................................................................................11 3.3 Operational Definition of Variables............................................................13 3.4 Data Collection...........................................................................................13 3.5 Analysis Method.........................................................................................14 4. Results...................................................................................................................15 4.1 Background of the Sample Data.................................................................15 4.2 Analysis and Research Findings.................................................................17 5. Discussion and Conclusion...................................................................................21

6. Appendix...............................................................................................................23 6.1 The rental of MRT station...........................................................................23 6.2 Check fun customers satisfaction questionnaire........................................24 7. References.............................................................................................................26

Table of Tables
Figure1. The nucleonic role of satisfaction 10..........................................................................4 Table1 Definition of variables.................................................................................................12 Table2 ANOVA of model 1 ....................................................................................................18 Table3 ANOVA of model 2.....................................................................................................19 Table4 regression result..........................................................................................................19 Table5 Coefficient of Determination.......................................................................................20

Table of Figures

Figure1. The nucleonic role of satisfaction..................................................................10 Figure2. The research structure....................................................................................11 Figure3. The distribution of sex...................................................................................16 Figure4. The age of samples.........................................................................................16 Figure5. The age of male samples................................................................................16 Figure6. The age of female samples.............................................................................16 Figure7. The occupation of samples.............................................................................16 Figure8. The income of samples..................................................................................16 Figure9. Samples spend at Check Fun per month........................................................17 Figure10. The area that samples visit mostly...............................................................17 Figure11. Times of shopping per month.......................................................................17

I.

Abstract

We want to observe the emerging stores called Check Fun in Taiwan. To see how it works? What kind of benefit it brings and how people accept it and build loyalty to Check Fun. In the research we find out the relationship of perceived performance and satisfaction is not significant; perceived performance is positive related to loyalty and also satisfaction has positive relationship to loyalty. After analysis our questionnaires we found several way. Check Fun can improve to better serve customers.

Key word: Check Fun; Perceived Performance; Satisfaction; Loyalty 1. 1.1 Research Background Introduction

The idea of Check Fun is originally from Japan and Hong Kong, where the rent in business district is extremely high. Some stores rent additional space to other people to cover some rent expense. People expand this concept then it became Gezaipu /Checker Depot in Hong Kong, and Box Shop in Japan .In Taiwan, there comes Check Fun. The concept of Check Fun is sharing the rent. We all know that location is everything. The most important thing about opening a store is location, second important thing location, third location. But for the start-ups good location means a lot of money. And then there comes Check Fun. Check Funs are all located near the MRT stations, where a lot of people come and go around and the rent is very expensive. Check Fun provide space for people to display their products but with not much money. The emerging of Check Fun makes it not a dream for many startups to own a mini store at golden business district. And they don t even need to spend their time and energy operating it. There are about 300 boxes in a store and the rent is from $688 to $2088 per month. It depends on which place you choose to take. Because the rent is affordable for almost everyone, many new designers expand their territory from Internet to Check Fun in order to attract more people. Designers display part of their work at their own little box where they can decorate by their wish. We can say that

Check Fun is like a miniature department store or a window display.

Check Fun also solves a big problem for many on line sellers to see is to believe. E-commerce stores are so popular because of the low entry barrels-- Zero fix-cost, they can always sell products that are cheaper than physical stores. But there is one drawback: buyers cant see the products by themselves nor can they touch, buyers can not be sure about the quality of the products (Jen-Her& Yu-Min, 2006). While in physical stores, buyer can make transaction right away, also they can test the products see if its alright and its always better to know where you can find the sellers. Check Fun kind of make it possible for on-line sellers find a way to solve the problem. Many on line sellers complain that even though they had provided enough detail information to customers, it seems they always have doubt. Now, on line sellers can finally let the customers see the real products, in that way people reduce their feeling of uncertainty about the products. Its a funny phenomenon that from physical stores we transfer to virtual stores and then again physical.

Not only people having goods to sell rent the box, people who want to advertise also do. Some brands, even they have their own stores, they still rent a place here because its a way to increase the opportunity to seen by potential consumers. For those who only want to do advertisement, Check Fun also provide cool card window,

where you can put your DM there, even some churches put their DM there hoping to drag more people to the church and wash their sin. Though Check Fun have only established for only one year, but they have to face their competitors now, named Art-collec. Art-collec claimed they can provide more service: cash flow management, using ERP to do inventory management, give renters marketing analysis information. Not only Art-collec, there are a lot of this kind of stores continually opening one another. 1.2 Research Motivation Some people doubt that Check Fun can survive, because it doesnt have a theme, too many genres of products and lack of product quality control. The store seems disorganized. And because any one can rent a box selling whatever he or she wants, consumers never know what they can find here. Basically the shopping pattern here is impulsive shopping, consumers dont exactly know what they want to buy or find here. And another problem is with so many products in crowded store, how can consumers make choice? And how can each box drags consumers attention? And for the shoppers, does Check Fun give them what they want? They should really think more. There are more than 50 stores are similar to Check Fun in Taipei area. Lots of copy cats are waiting to make a share of this business. The idea of Check Fun sounds great and definitely feasible but can it survive when surrounded by so many

competitors? Will people build loyalty to Check Fun?

2.

Literature Review

We know that the loyalty comes from customers satisfaction, and satisfaction is derived from excellent performance outcome. We define perceived performance as beliefs regarding the products attributes, levels of attributes, or outcomes ( Calotte, Woodruff, and Jenkins 1987). Performance as a direct antecedent of satisfaction (e.g, Oliver 1980; Oliver and DeSarbo 1988). Customer satisfaction is widely recognized as a key influence in the formation of consumers' future purchase intentions (Taylor and Baker, 1994). Satisfied customers are also likely to tell others of their favourable experiences and thus engage in positive word of mouth advertising (File and Prince, 1992). Dissatisfied customers, on the other hand, are likely to switch brands and engage in negative word of mouth advertising. Generally, loyalty as been and continues to be defined in some circles as repeat purchasing frequency or relative volume of same-brand purchasing (Tellis, 1988). In Oliver (1997), satisfaction is defined as pleasurable fulfillment. That is, the consumer senses that consumption fulfills some need, desire, goal, or so forth and that this fulfillment is pleasurable. Thus, satisfaction is the consumers sense that consumption provides outcomes against a standard of pleasure versus displeasure. In Olivers six representations of

10

satisfaction and loyalty (Figure1) suggests that satisfaction is an ingredient of loyalty but only one of its components

Satisfaction Loyalty

Figure1. The nucleonic role of satisfaction 2.1 Research Question In this program, we want to use empirical data to test the relationship with performance outcome, customer satisfaction and customer loyalty. We are interested in this phenomenon and want to figure out whether this way can augment the business or not. In customers perception section, we measure in 3 parts: staff service, environment, and product. Then sum up these 3 parts to get the average perceived performance. We use overall satisfaction to measure customer satisfaction, Day (1977) took satisfaction as an overall, broad concept, its ok to use one satisfaction measurement. According to Jones and Sasser (1995), pointed out that customers loyalty means customer repurchase intention for specific product or service, customers loyalty can divide into short term and long term. Long term loyalty means consistently purchasing behavior and not easily changed choice; short term loyalty means

11

customers will leave whenever there comes better providers or products.

3. 3.1Research Framework

Method Section

In this research, we try to understand that whether perceived performance has positive effect to customers satisfaction and loyalty. The research structure is showed as figure2:

H3 (+)

Perceived performance Staff Service Environment Product

H1 (+)

Overall Satisfaction

H2 (+)

Customer Loyalty

Figure2 The research structure 3.2 Hypothesis When perceived performance has been included in the model, a strong direct relationship between perceived performance and satisfaction often has been found. (Anderson, fornell, and lehmann 1994; Anderson and Sullivan 1993).So we assume that perceived performance an antecedent and is positive related to customer satisfaction.

H1: Perceived performance is positive related to customer satisfaction

12

According to Anderson and Sullivans research about customers satisfaction, it is proved that customers satisfaction affects consumer repurchase intention positively, and consumer repurchase intention is a presentation of consumer loyalty,. Therefore, we assume that customer satisfaction is positive related to customer loyalty.

H2: Customer satisfaction is positive related to customer loyalty

Perceived performance is one of the reasons to affect customers satisfaction, and customer satisfaction will affect customer purchase intention in the future, as customers loyalty. Therefore we assume perceived performance is indirect and positive related to customer loyalty.

H3: Perceived performance is positive related to customer loyalty 3.3 Operational Definition of Variables Table1 Definition of variables Variables Definition Perceived performance Beliefs regarding the products attributes, levels of attributes, or outcomes.( Calotte, Woodruff, and Jenkins 1987) Customer satisfaction Satisfaction is defined as pleasurable fulfillment. That is, Measurement Staff service, product, environment, Overall satisfaction

13

Customer loyalty

the consumer senses that consumption fulfills some need, desire, goal, or so forth and that this fulfillment is pleasurable. (Oliver, 1997) Loyalty as been and continues to be defined in some circles as repeat purchasing frequency or relative volume of same-brand purchasing (Tellis, 1988). In Oliver(1997)

Short term Long term

3.4 Data Collection The participants are random selected on the internet and interviewers with shopping experience at Check Fun. We collected totally 97 samples, only 44 samples are valid.We delete the questionnaires that participants have never been to Check Fun. Also, we regard the questionnaires that been filled incompletely as invalid samples and delete them all. After that, we obtain the proportion of valid questionnaire about 45%.

3.5 Analysis Method The primary research method of our study is software tools, like SPSS 12.0, and measurement tools, that is, questionnaires, and we explained how we apply these tools below: Software tools: we use it to analysis the data collected by evaluating the descriptive statistics and running the simple and multiple regression. Measurement tools: we use the internet questionnaires and interviewing the participants as our measurement tools. In our questionnaire, there are 25 close

14

questions and 2 open questions. There are five parts in our questionnaire. In the first part, we ask the participants about the shopping experiences at Check Fun; then, we focus on obtaining the information about the customer perceived quality as our second part. In this section, we separate the questions into 3 aspects to measure the perceived performance, that is, staff services, environment and products. The third part of the questionnaire consists of the questions about the degree of satisfaction, and we have the questions about customer loyalty in the fourth part of the questionnaire. Finally, we leave the basic information about our respondents.

4. 4.1 Background of the Sample Data

Results

According to our questionnaire, from our sample we found that most people who have been to Check Fun are female (77%)(Figure3), age between 21 to 25(Figure 4). There are 10 males in our sample (23%), the distribution of the males age(Figure5) is as well as females (Figure6). Those simple are mostly students(Figure7) with disposable income from NT5,001 to NT10,000(Figure8). The frequency to visit Check Fun is about one time per month. Most people only did window shopping not purchasing anything. In open questions, There are two samples spent NT3000 at

15

Sex

Check Fun per month. In sum, per people spent around NT.302.27 per month
male female

averagely(Figure9). Most people visited Check Fun in northern area because most shops open in northern are, the total Check

fun franchise stores are 28, 23stores in northern of Taiwan(82%), 3 in Taichung(11%) and 2 in Kaohsiung(7%).We can notice that the location number is relative to the area where people patronize Check fun (Figure10). Over 50% samples only visit Check Fun once a month( Figure11).

23%

77%

Figure3 The distribution of sex

Figure4 The age of samples

16

Figure5 The age of male samples

Figure6 The age of female samples

Figure7 The occupation of samples

Figure8 The income of samples

Figure9 Samples spend at Check Fun per month

Figure10 The area that samples visit mostly

17

Figure11 Times of shopping per month 4.2 Analysis and Research Findings To get representative research conclusion, we separate our questions in the questionnaire into three segments, and evaluate the respondents with Likert Scale from one point to five points. While one point represents the participant highly disagree with our statement, five points represent the participant highly agree with our statement. In our research, we average the points in every segment. Through the calculation for every participant, we use the figures to run the regressions about the hypotheses in our study. H1: Perceived performance is positive related to customer satisfaction In the first hypothesis, we will examine whether the perceived performance is positive related to customer satisfaction. To test the hypothesis, we use customer satisfaction as a dependent variable and perceived performance as an independent

18

variable in our model. Thus, our model 1 is: S=a1P+c1, where S represents Customer Satisfaction, and P represents Perceived Performance. The following demonstrates our results. Table2 ANOVA of model 1 Model 1 SS d.f. MS F test P-value Regression .104 1 .104 1.245 .271 Error 3.518 42 .08375 Total 3.622 43 In the ANOVA Table2, we find that the p-value of our model is .271, which is larger than the level of significance .05. Apparently, we do not reject our null hypothesis, that is, perceived performance is not positive correlated to customer satisfaction. The following table also shows that perceived performance is not a probable variable to explain customer satisfaction. However, lots of the papers we have read mention about the strong relation between perceived performance and customer satisfaction. Instinctively, the service quality, environment and the products quality that will affect the perceived performance having been defined will affect customer satisfaction. There is no doubt that customer will have higher satisfaction if the quality been perceived by customers are higher. It seems that our result does not accord with what have been found in other papers and with what people will act actually. The probable reason is that we do not evaluate

19

the perceived performance properly in our questionnaire. Perceived performance is evaluated by customers with the combination of several aspects, however, only the staff service, environment and product level variables have been involved into our model. Since we do not cover some of the significant aspects of perceived performance, this questionnaire perhaps is not representative enough to measure the relationship between perceived performance and customer satisfaction. H2: Customer satisfaction is positive related to customer loyalty H3: Perceived performance is positive related to customer loyalty In H2 and H3, we want to know if there is a positive relationship between perceived performance and customer loyalty, so we use perceived performance and customer satisfaction as independent variable and customer loyalty as dependent variable to fit in the regression analysis. The regression model 2 as follow: L=a2P2+b2S2+c2 (L: Loyalty, P: Pierced performance, S: Satisfaction, a2, b2, c2: Constants) Table3 ANOVA of model 2 Model 2 SS d.f. MS F test P-value Regression 7.486 2 3.743 17.367 .000 Error 8.836 41 .216 Total 16.322 43 According to the table3, we can see the model is significant because the P-value is . 000 < =.05. Table4 regression result Model 2 Estimator of Standard t P-value

20

Constant Performance Satisfaction

coefficient -1.619 .658 .741

error .867 .146 .248

-1.866 4.495 2.994

.069 .000 .005

From table 4, p-value for perceived performance and customer satisfaction are 0 and .005, respectively. Both of them are less than .05, which means these two independent variables have effect to customer loyalty. Constant is not significant, the sample regression line is L=.658P+.741S. Coefficient of performance is .658, which means when perceived performance increases for 1 unit customer loyalty will increase .658 unit, we can find out that there is a positive relationship between these two variables, HX is supported. Coefficient S is .741, which means when customer satisfaction increases for 1 unit customer loyalty will increase .658 unit, these two variables are also positive related. Table5 Coefficient of Determination Mode 2 R square Adjusted R square .459 .432 2 From table 5, R in this model is .459, it is not good. Maybe it is because there

are some criteria which affect customer loyalty did not put in this model. Adjusted R2 is .432, less than original R2. This result may be due to the colinearity between Perceived performance and Customer satisfaction.

5.

Discussion and Conclusion

21

According to the questionnaire, the frequency of purchase and spend at Check Fun per month both are lower. Consumers repurchase intension is not high, the reasons they wont want to visit again are (1) disorganized store, too many products without well planned to display. (2) no theme, no intention to shop there in purpose. (3) consumers can always find cheaper products on line.

First, the items are placed in disorganized way, because products are all pins or pretty-pretty goods, there is no standard pattern to place. Customers may pick up goods and take a look then put them back at wrong places, which makes them look more disorder. Then, the stores are sellers-oriented, sellers can choose sell candy this week, teddy bears next week, it is lack of clear positioning.

Second, without specific theme. Customers said unless they happened to pass by the store or they wont shop there in purpose. People dont know the value proposition of Check Fun, its not a 10 dollar shop, nor a gift shop, not even a boutique. The positioning is pretty unclear.

Third, it is not as cheap as on line shop. Sellers still need to share out the rental expenses to the price of the products. For customers who want to buy in low price, its better for them to shop on line.

Finally, we have some comments for Check Fun, Check Fun should improve

22

their quality control and select more interesting goods and do more classification. They should mark the price more clearly, and make a clearer positioning.

6. 6.1 The rental of MRT station MRT Station

Appendix

2004-2006 store rental (NT10,000/ square meters)

2007-2008 store rental (NT10,000/ square meters) 2.5-3.2 2.0-3.0 2.0-2.5 1.8-2.3 1.8-2.2 0.5-0.6 0.7-1.1 0.6-0.9 0.8-1.2

Zhongxiao Fuxing 1.6-2.0 Ximen 1.8-2.4 Taipei Main Station 1.5-2.0 Shiin 1.4-1.8 Gongguan 1.5-1.8 Jingei 0.35-0.45 Xinpu 0.4-0.6 Nanshijiao 0.4-0.6 Fuzhong 0.5-0.7 ResourceHsin Yuan Busiess Rehouse

Change ratio (%) 30 19 28.5 28.1 21.2 22.2 80 50 66

23

6.2 Check fun customers satisfaction questionnaire Questionnaire description: in order to understand your opinion about service of check fun, please answer the following questions according to your personal perception and experience. Thank you for your cooperation. Part 1: Experience Survey 1. Have you ever been to check fun Yes, please continue answer. No, the questionnaire ends here, thank you very much.

Agreement meter: 1(Disagree) 5(Agree) Part 2: Perceived Performance 2. Is service employees attitude kind 3. The speed of checking is fast 4. Service employees looks are neat 5. The atmosphere in the shopping environment lets me feel relax 6. The store location transportation is convenient 7. I like the design of the shop display window very much 1 2 3 4 5

24

8. In the shop commodity combination lets me feel interested 9. The commodity price indication is clear 10. There are many types of commodity arrangement Part 3: Customers Satisfaction 11. I feel satisfied after shopping at Check Fun 12. After shopping at Check Fun, I like this store 13. During the process of shopping at Check Fun, I feel disappointed 14. After shopping at Check Fun, I dont feel good about this store 15. Over all I feel satisfied about Check Fun Part 4: Customer Loyalty 16. I will recommend check fun to my relatives and friends 17. I will talk about Check Fun in positive side of opinion. 18. I would want to come back to check fun and shop again 19. I will only shop at Check Fun when I need to purchase items Part 5: Basic Information 20.gender: male female 21. Ages: Below 15 16~20 21~25 26~30 ove31 22. Income: below 5000 5000~10000 10000~15000 15000~20000 over20000 23. Occupation:

25

office holder or military business man or service information industry

manufacturer freelance student housekeeper none(include retiree)

other

24. Which area do you visit mostly?

North area middle area south area

25. Frequency of shopping in check fun

0 1 2 3 over 4 times per month

26. How much do you spend at Check Fun per month?

27. What kind of products do you want to buy here in the future, and do you have any comment to check fun:

This questionnaire ends here, thank you very much.

7.

References

Anderson, E. W., Fornell, C., & Lehmann, D. R. (1994). Customer satisfaction, market share, and profitability: Findings from sweden. Journal of Marketing, 58(3), 53-66.

26

Anderson, E. W., & Sullivan, M. W. (1993). The antecedents and consequences of customer satisfaction for firms. Marketing Science, 12(2), 125-143.

Cadotte, E. R., Woodruff, R. B., & Jenkins, R. L. (1987). Expectations and norms in models of consumer satisfaction. Journal of Marketing Research, 24(3), 305314.

Day, R. L. (1977). Extending the concept of consumer satisfaction. Advances in Consumer Research, 4(1), 149-154.

File, K. M., Cermak, D. S. P., & Prince, R. A. (1994). Word-of-mouth effects in professional services buyer behaviour. The Service Industries Journal, 14(3), 301-314.

Jones, TO and Sasser,WE. (1995). WhySatisfiedCustomersDefect. Harvard Business Review, 73(6), 88-99.

Jen-Her Wu and Yu-Min Wang.(2006). Development of a tool for selecting mobile shopping site: A customer perspective. Electronic Commerce Research and Applications, 5 (2006) 193-194.

Oliver, R. L. (1980). A cognitive model of the antecedents and consequences of satisfaction decisions. Journal of Marketing Research, 17(4), 460-469.

27

Oliver, R. L., & DeSarbo, W. S. (1988). Response determinants in satisfaction judgments. Journal of Consumer Research, 14(4), 495.

Taylor, S. A., & Baker, T. L. (1994). An assessment of the relationship between service quality and customer satisfaction in the formation of consumers purchase intentions. Journal of Retailing, 70(2), 163-178.

Tellis, G. J. (1988). Advertising exposure, loyalty, and brand purchase: A two-stage model of choice. Journal of Marketing Research, 25(2), 134-144.