UNIVERSITY OF GHENT FACULTY OF ECONOMICS EN BUSINESS ADMINISTRATION ACADEMIC YEAR

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1 UNIVERSITY OF GHENT FACULTY OF ECONOMICS EN BUSINESS ADMINISTRATION ACADEMIC YEAR THE SATISFACTION OF SAYING NO : PRICE SENSITIVITY Thesis proposed to obtain the degree of Master in Business Economics Kathy Deleu Under the direction of Prof. Dr. Bert Weijters

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3 UNIVERSITY OF GHENT FACULTY OF ECONOMICS EN BUSINESS ADMINISTRATION ACADEMIC YEAR THE SATISFACTION OF SAYING NO : PRICE SENSITIVITY Thesis proposed to obtain the degree of Master in Business Economics Kathy Deleu Under the direction of Prof. Dr. Bert Weijters

4 Permission The undersigned hereby declare that the content of this thesis may be consulted and/or reproduced providing acknowledgement. Kathy Deleu

5 Acknowledgement Before going any further, I would like to take this opportunity to thank some people who made this thesis possible. Firstly, It is a pleasure to thank my thesis promoter, Prof. Dr. Weijters, for coming up with such an interesting topic and providing the necessary guidance when needed. I would also like to show my sincere gratitude to family and friends for all their help and support. In particular, I would like to give a special acknowledgement to my mother for all her efforts and enthusiasm in helping me obtain as many respondents as possible. It would have been very difficult without her. Finally, I would also like to thank all the respondents that were willing to participate in this study, as it would have been impossible without them. I

6 Table of Contents Acknowledgement... I Table of Contents... II List of tables...iii Introduction... 1 Theoretical Background Overchoice Consumer Satisfaction Price Sensitivity Online Shopping... 6 Empirical Study Research Question and Hypotheses Population and Sample Data Collection Data Processing Factor Analysis Recoding of the (In)Dependent Variables Reliability Clustering Data Analysis Preference for Using a Lowest-Prices Filter Post-Shopping Evaluation Shopper Types Price Sensitivity Actual Choices Made Preference for Using a Lowest-Prices Filter Other Variables Conclusion Summary of Results Generalizability of the Conclusions Further Implications and Recommendations Bibliography... IV Appendix... VII II

7 List of tables Table Table Table Table III

8 Introduction In our daily lives, we are faced with multiple decisions. As our society is developing, so are the amount of decisions and their importance. Also the number of alternatives to choose from is constantly changing and in most product categories it is simply increasing. One could say that the increasing amount of choice significantly impacts the consumers. For one product type, there are often so many brands and variations to choose from that the buyers can become overwhelmed. In a Belgian supermarket, something as simple as choosing bottled water can be a challenge. One has choice of over 15 brands, plastic or glass bottles in more than 10 different sizes, gas or no gas, plain water or flavoured,... And then there are also the different price categories and possible promotions to take into consideration. In other product categories there is often even a more environmentally-friendly, ethical or bio option. In today s society, an increasing amount of choice is not necessarily perceived as good. Although one might think that more choice means a greater chance of finding a variant that satisfies their needs, when the amount of alternatives becomes too large, buyers are likely to undergo a negative shopping experience. They will leave the store dissatisfied and feel regret or simply not be able to make a choice at all. This study will try to look further into just one aspect of the concept of overchoice a. The focus will namely be on the type of consumer (value-expressive or utilitarian), their price sensitivity and this in a simulated online grocery shopping environment. An example of the sort of setting that will be studied is the Collect & Go from the Colruyt, one of Belgium s leading grocery stores. On their website, one can view all products and select what they want to buy, which will then be ready for the consumer to pickup from an outlet or have it delivered at home. Unlike in brick and wall stores, the customers have the option of filtering what they see from each product category: everything, organic products, extra discounts, lowest-prices or new products. The question here, however, is whether using this filtering option, in particular the one for the lowest-prices, affects the customers level of satisfaction. There could namely be a difference between those using the lowest-prices filter from the start and those finding and choosing the lowest-prices themselves out of a complete assortment for each product. If a customer is price sensitive, they could use either method to end up with the same products, but by not using the filter, they may feel more satisfied. The satisfaction of saying no in each product category one buys in is perhaps more satisfying than saying no once at the start when using the filter. This study a The term overchoice can simply be defined as too much choice (a choice overload), making it difficult to make optimal, satisfying decisions (Toffler, 1970). 1

9 will thus attempt to look into the lowest-prices filtering option in an online grocery shopping environment. For this study, we will first look at just a brief summary of some of the most important concepts and theories found from the various read articles. This will be categorized in four different subthemes: overchoice, consumer satisfaction, price sensitivity and online shopping. This will be followed by the empirical study. In this section, a research question and hypotheses are formulated and the research method is described. To collect data, an online questionnaire was used. Respondents were randomly appointed to undergo a simulated online shopping experience either by viewing a full assortment or a lowest-prices filtered assortment. At the check-out, all respondents were asked to evaluate their experience for several different elements (e.g. satisfaction) so that the experience of the two assortments could be compared. There were also shopping profile question to determine whether a respondent was price-sensitive, value-expressive and/or utilitarian. The data processing includes a factor and cluster analysis in order to prepare the data for testing. In the data analysis, it will be tested whether there are significant differences in satisfaction between the filtered and full assortment, depending on, among others, price sensitivity and shopper type. Finally, the conclusion will summarise the results, critically look back on the study and its limitations and end with implications/recommendations for future study. 2

10 Theoretical Background 1 Overchoice Research on consumer decision making and rational choice has long viewed variety as good for consumers, but some recent research calls these views into question. Therefore, as Schwartz (2004) notes... the fact that some choice is good doesn t necessarily mean that more choice is better (p. 3). More freedom means more well-being and more choice is more freedom. Consequently, that should mean that more choice also means a greater well-being, given the increase in likelihood that one will be able to find products and experiences that best suit their needs and interests (Schwartz, 2004). Evidence shows that consumers relish choice and prefer large assortments over smaller ones, and stores that offer a large variety have a competitive advantage over those that offer less, which is paradoxical from the vantage point of choice overload (Chernev, 2003a). A possible reason for this could be explained by a study conducted by Sirgy and colleagues (1997). They noted that rejecting alternatives deemed unfit reaffirms consumers deliberate choice for a particular option, which serves a self-expressive and selfaffirming goal. This ties in with our study, as consumers have the satisfaction of saying no to those alternatives believed inapt. In turn, this should improve consumers self-esteem repeatedly if there would not be a filter used. More choice having a positive impact, is however not always the case. Firstly, some researchers have found that as the number of alternatives increases beyond a certain level, people may actually become less satisfied with their chosen alternative (Iyengar & Lepper, 2000; Iyengar, Wells & Schwartz, 2006). The large assortments can potentially cause confusion, frustration and dissatisfaction as the amount is perceived as overwhelming or too complex (Huffman & Kahn, 1998). It can also affect decision quality by forcing people to make a choice, and make people feel miserable due to regret and unmet expectations of finding an exact variant of what they wanted. For example, the more options participants could choose from for a retirement plan, the longer they delay their choice, ultimately forgoing considerable financial benefits (Iyengar, Jiang, and Huberman, 2004). Second, studies have also shown that adding one or more alternatives to a consideration set, increases the frequency of choice deferral. Schwartz (2004) calls this paralysis, as the more choice there is, the more difficult it becomes to choose and the less likely one will end up buying anything at all. A well-known example of this is a study where customers were allowed to sample either from 6 or 24 different jams. Those in the first group were 10 times more likely to go on and buy one of those jams after the sampling (Iyengar and Lepper, 2000; Chernev, 2003). Furthermore, studies have shown that revenues and market share can even increase by decreasing the assortment sizes across a variety of product categories (Boatwright and 3

11 Nunes 2001). Finally, Gourville and Soman (2005) found that in a between-brand choice context, when brand assortment is (non-)alignable, a brand s market share will increase (decrease) with assortment size. They found that for a non-alignable assortment, the negative impact of assortment size on brand choice will be moderated by the required cognitive effort (e.g. simplifying the informational display reduces the cognitive effort to process the alternatives) and can also be avoided by reducing potential regret (e.g. by offering to exchange the purchased product). Product assortment size is thus very important for shopping outlets to control. 2 Consumer Satisfaction Using the previously mentioned logic by Schwartz that more choice leads to more freedom and thus a greater well-being, one might think that an abundance of alternatives should increase the satisfaction of consumers. There should namely be an increase in likelihood that they will be able to find products and experiences that best suit their needs and interests. As preferences can vary greatly between consumers, a wider assortment should best meet their heterogenic needs (Chernev, 2003; Hoch et al., 1999; Iyengar and Lepper, 2000; Kahn, 1998). Consumers also like to mix it up within and across consumption occasions, which again makes more choice favourable (Kahn, 1995). There are also many theories regarding more choice as an important prerequisite of personal freedom: choice allows individuals to live their lives according to their own agendas (Schwartz, 2004). Having more options to choose from also reduces the costs of searching for options and allows for an easier comparison among them (Hutchinson, 2005). Evidence shows that consumers relish choice and prefer large assortments over smaller ones, and stores that offer a large variety have a competitive advantage over those that offer less, which is paradoxical from the vantage point of choice overload (Arnold, Oum, & Tigert, 1983; Brown, Read, & Summers, 2003; Craig, Gosh, & McLafferty, 1984; Hutchinson, 2005; Kahn, 1995; Mazursky & Jacoby, 1986; Koelemeijer & Oppewal, 1999; Chernev, 2003a). Scheibehenne, Greifender & Todd (2009) investigated the moderating impact of several choice related factors, of which only choice justification proved to be an effective moderator. Park, Jun and MacInnis (2000) already looked into the variety of motives consumers have for justifying their decisions. They linked it to enhancing self-esteem, anticipation of potential regret or cognitive dissonance. From the found literature thus far, we can conclude that different shopper types can have different needs and therefore are satisfied in a different way. The two groups this study will focus on are valueexpressive shoppers (who reject alternatives deemed unfit with a self-affirming goal) and utilitarian shoppers ( where the need for efficiency is more of a priority). Furthermore, value-expressive shoppers can be summarized as individuals that fall into one of several categories (Park, Jowarski & MacInnis, 1986): Adventure, social, gratification, idea, role and value. In other words, these shoppers buy 4

12 something to fulfil self-expressive/self-enhancement needs and the need to belong to a group. Utilitarian shoppers are the efficient individual shoppers who know what they want and want to spend the least amount of aggravation or hassle in the shopping process. This however does not by any means eliminate any element of fun or entertainment for the shopper. These people know what they want to buy, do their research, compare the alternatives and choose the best price. Utilitarian shoppers can thus be defined as shoppers that buy something to satisfy a functional need in way that saves money, time and effort. These characteristics will be important when creating the questionnaire, in order to be able to classify the respondents as one of the shopper types. The justification aspect and shopper characteristics will also form an important part in this study in relation to utilitarian benefits and symbolic satisfaction. Namely, this distinction between consumers is presumably related to their preferences of willing to use a filter (utilitarian) or rather viewing the full assortment (self-expressive). This will therefore be used together with Sirgy s (1997) already discussed findings regarding overchoice. 3 Price Sensitivity Online or offline, price is unquestionably one of the most important cues utilized during a consumer s decision making process. Price can be defined as the consumer s perceptual representation or subjective perception of the objective price of the product and it could influence a consumer s choice of shopping channel (Chiang, Dholakia 2003a). Determining the criteria of price sensitivity is very important for this study as it will be attempted to find differences in satisfaction between respondents given a selection from the full assortment and a selection from a lowest-prices filtered assortment. According to Nagle and Holden (2002) there are nine pricing factors or laws that may influence one s price sensitivity and how a consumer perceives a given price in different purchase decisions. One of the most relevant price sensitivity factors is the reference price effect, or how one perceives the product s price relative to its alternatives. Buyers are however less sensitive if it is more difficult to compare the potential alternatives, when switching costs are higher and when higher prices signal higher quality. Price sensitivity can also be dependent on the buyers budget, the end-benefit of a good and the sharedcost. Finally, buyers are more price sensitive if a price is perceived to be outside the reasonable range or when perceived as a loss rather than a gain. Early studies focused on the effect of price on perceived quality and showed that it increases when price serves as the only available cue in comparison with the inclusion of such additional information as brand name or store name. Weber s Law states that an increment in stimulus intensity needed to produce a just-noticeable-difference is directly proportional to the stimulus and not necessarily to the prices or price differences. For changes in regular price, Fok, Hovath, Paap and Franses (2006) found few relevant 5

13 explanatory variables. Perhaps the immediate effect of regular price change is close to zero. The longterm effect of a regular price increase usually leads to an increase in sales. Generally, self-reported willingness to buy derives from relative as opposed to absolute expressions of price. Park, Jun and MacInnis (2000) conducted an interesting study regarding the framing of options in a subtractive versus an additive method. They found that consumers tend to choose more options with a higher total price when they use subtractive option framing for both different option price levels as product categories of varying price. The effect was magnified when participants were asked to anticipate regret. Monroe (1973) found that sensitivity to within subject price manipulations decreased when the price of the preferred brand was lowered rather than raised. Although Monroe stated that people buy only one brand regardless of price, Kamen and Toman s (1971) highly statistically significant price effects belie this supposition. Even earlier, Sowter et al. (1969) noted that brand preference function depends only on the difference between the two log prices and the larger the difference, the greater the probability of buying the lower priced brand. Furthermore, Huber, Holbrook and Kahn (1986) found that bracketing produced relatively greater price sensitivity. Brand name alone produced relatively lower price sensitivity than quality ratings alone. Brand name plus quality information produced relatively lower price sensitivity than brand name alone. In this study, however, only prices will be given. Brand names and other information are not given and all products will have fictional packaging. This was done to eliminate people just choosing their preferred brands or the one that they know. This is important as Danaher, Wilson, and Davis (2003) found that brand loyalty is substantially higher in online stores than in bricks-and-mortar stores. 4 Online Shopping Online retailing has challenged traditional retailers and is reshaping consumers shopping habits. The different needs for the types of shoppers are proving to be better met by online stores as they can diversify their product offer and structure of the site to accommodate a consumer s needs and wants. Degeratu, Rangasamy and Wub (2000) studied the fact that many executives are concerned that online consumers would focus on price, which would result in strong price competition. For grocery products in particular, this hypothesis was rejected. People currently online may not be as price sensitive as the general population. Even if the online population becomes comparable to the general population, the combined effects of price and promotion seem to be stronger in regular stores than in online stores. Even after accounting for the fact that online promotions are better signals of price reductions, offline promotions induce larger changes in brand choices. This is partly because of the low correlation between point-of-purchase activities and price in traditional supermarkets. It is likely that consumers in 6

14 the traditional supermarkets are buying featured products even when there is little price reduction. They thus found that internet shoppers are likely to be more convenience conscious (utilitarian) and may not be as price sensitive as the general population. Regarding the increased convenience, Chiang etal. (2003a) found that, specifically, the reduction of search costs has allowed shoppers to engage in comparative shopping more efficiently. This reduced cost enables consumers to compare prices across online retailers with just a few clicks. As online shoppers are mostly out for increased convenience (Weijters, Schillewaert, Rangarajan & Folk, 2005), the filtering option that will be studied should be a desirable feature for them as well. Although it would seem that a value-expressive shopper shops more and spends more, recent studies have shown that it s actually the utilitarian online shopper who has the lower shopping cart abandon rate and the one more than likely to complete the shopping process. Furthermore, Alba and colleagues (1997) stated that online shoppers may be more or less price sensitive depending on the accessibility of information on price and non-price attributes in the e-shopping environment. More information on prices could increase consumer price sensitivity for undifferentiated products. At the same time, having more information on non-price attributes could reduce price sensitivity for differentiated products. Haubel and Trifts (2000) study the use of interactive decision aids (i.e. recommendations agents and comparison matrices) and their impact on consumer decision making. They find that use of decision aids decreases the consumer s search effort for product information, reduces the size but increases the quality of purchase decisions. This raises the possibility that the use of interactive decision aids on the web can lead to a higher online purchase propensity. The presence of a filter on grocery sites could therefore have a significant importance for the stores. On the basis of a study of a large number of product categories, Danaher, Wilson, and Davis (2003) report that brand loyalty is substantially higher in online stores than in bricks-and-mortar stores. This, along with Alba and colleagues findings regarding price sensitivity depending on the amount of information displayed in an e-commerce environment influenced the decision to display only the price in this study. This will therefore be an important factor to take into account when interpreting the results. 7

15 Empirical Study 5 Research Question and Hypotheses Using the theories from the studied literature, this study will aim to investigate the lowest-prices filter and its influence on consumer satisfaction in comparison to seeing the full product assortment. To measure this, the self-expressive and utilitarian attributes will be assessed when inquiring the consumers choice justification. The study will aim to understand whether there is any value of repeatedly choosing the lowest-price option in each product category or whether they prefer the efficiency of filter the assortment to only view the lowest-prices. From this, we can formulate the following research question: to which extent will consumers prefer a reduced assortment containing the lowest-priced products versus a full assortment, as a function of whether their choice serves a utilitarian versus self-expressive function? By means of a survey, it will be examined whether the consumer justifies their choice for a lowest-price alternative through either a utilitarian or symbolic need. The utilitarian consumers are expected to prefer using the lowest-prices filter, as they are more driven in terms of convenience and efficiency with regards to satisfaction. These types of consumers are therefore more likely to use the filter and be more satisfied by doing so. The self-expressive consumers should prefer to view the full assortment (not use a filter) to then repeatedly say no to those alternatives believed inapt. Their type of satisfaction will be fulfilling a self-expressive and self-affirming goal. These types of consumers are therefore more likely to not use a filter and be more satisfied viewing the full assortment. From this, we can already formulate the following hypotheses: - H1(a): consumers for whom the choice criterion serves a utilitarian function prefer shopping from a filtered assortment containing the lowest-priced alternatives. - H1(b): consumers for whom the choice criterion serves a value-expressive function prefer shopping from a full assortment to repeatedly chose the lowest-priced products. - H2(a): consumers for whom choice criterion serves a utilitarian function gain greater satisfaction from shopping from a filtered assortment containing the lowest-priced alternatives than from shopping from an unfiltered assortment. - H2(b): the effect of H2(a) is a result of higher perceived efficiency. 8

16 - H3(a): consumers for whom choice criterion serves a value-expressive function, filtering the assortment for lowest-prices leads to lower choice satisfaction. - H3(b): the effect of H3(a) is a result of self-esteem. 6 Population and Sample The population for this study existed out of all consumers who would consider purchasing their groceries online. This last condition was asked at the start of the questionnaire and those that answered negatively were directed to the end. This condition was important to include as this study attempts to solely focus on online grocery shopping. One namely does not have the filtering option in a brick and wall store. In total there were 232 respondents. However, only 150 (64.66%) of these fulfilled the condition of considering to ever buy their groceries online. This means that 82 of the participants were lead straight to the end of the survey and are not used in the following results analysis. Another 30 respondents were eliminated due to not fully completing the questionnaire or due to inconsistent responses to control questions. This leaves a total of 120 respondents to be analysed. An overwhelming majority of the respondents were female (80.00%) % were Belgian, with the remainder mostly coming from diverse European countries (18.33%). Also important to note is that 65.8% of the respondents live in Belgium. The sample consisted out of students and the working population. Majority were employees/clerks (40.00%) and students (24.16%). Also a fair amount of independent workers, executives, managers and housewives/-men participated. This of course means that the age mix was quite large. The average age was 36, ranging from 18 to 67 years old. The average income lies between 1500 to 2499 Euros (30.83%). Most of the respondents go grocery shopping two to three times a week (55.00%) or once a week (33.33%). The typical budget spent on the groceries was spread fairly evenly over the six categories going from 0 to 100 Euros or more. Majority spends 60 Euros or less (57.50%). As for how many people the respondent usually buys for, it is mostly for two people (33.33%) or just for themselves (25.00%). Finally, well over half (71.66%) of the participants had never ordered groceries online before. There were two questionnaires where there was one crucial difference for the type of shopping experience the respondent had. They were alternately assigned to one of the two assortments and in the end 61 (50.16%) of the participants had to chose between two products from the lowest price filter, while the other 59 selected between two products from the full assortment. 9

17 All 120 respondents had bought at least three of the nine given products in the last three months. From these nine given products which they had recently bought, 86 (71.66%) found a low price somewhat to very important. Although most of the respondents generally dislike doing the groceries (38.33%), this shopping experience seemed to be more enjoyable despite that the majority found it difficult b (45.00%). Furthermore, only few respondents were (somewhat) dissatisfied (19.17%) in the evaluation at the check-out. 7 Data Collection For this study, an online questionnaire was used c. This means that only internet users could complete the survey, which would usually be unrepresentative of the general population, but for this study it was less of an issue. The questionnaire namely included a simulation of an online grocery shopping experience. As the purpose was to see the difference in product choice experience for price sensitive shoppers, utilitarian and value expressive consumers, there were two slightly different questionnaires made. There was total of 6 parts that made up the questionnaire. The first block was to create a basic shopper profile regarding grocery shopping and filtered out the respondents that would never consider doing their groceries online. Next the respondents were presented with 9 straightforward food or beverage products d of which they had to indicate which they had bought in the last three months. For those products, they then had to indicate what they considered important when purchasing that product (bio, low price, packaging, type/variety and/or the brand). The next two blocks (block 2 and 3) were automatically distributed equally amongst participants (randomizer with evenly present elements). Half the respondents underwent a shopping experience viewing two products under the lowest-prices filter, while the other half had to select between two products from the full assortment of which one from lowest-prices category. For both assortments, prices were based on those from an actual online grocery. The products were also presented in random order in each product category for each respondent so that the lowest-priced option would not always be in the same place. In addition, products from the lowest-prices selection were labelled with red price tags as in a real online grocery. Therefore, for the filtered assortment both prices were labelled in red, while for the full assortment, one product had a red price tag and was black. Both groups were fully informed of what they were viewing and what the red labels meant. Apart from the price, the b Difficult in the sense that there were no brand names or other information available to base their decisions on. c Please find a copy of the questionnaire in the Appendix. d Nine product categories: Tea, coffee, juice, milk, eggs, bananas, chocolate, jam and biscuits. 10

18 respondents saw a picture of each product and the volume/weight of it. The pictures were not of actual products and had no brand names on them in order to avoid the respondents from choosing products they recognized or brands that they knew. The volume or weight of the product was there to ensure respondents that both products were indeed the same amount, in case the picture were to make them think otherwise. At the end of the shopping simulation, the respondents were thanked for shopping and were shown their selected products with price tags all together. Following the shopping experience were the checkout questions (block 4), where the respondents had to evaluate their shopping experience from the previous block. This consisted primarily out of several differently phrased questions gauging their level of satisfaction, enjoyment and difficulty of the procedure. This block therefore forms a crucial element for this study. A second shopping profile (block 5) assessed the respondents overall attitude towards grocery shopping and consisted out of questions to distinguish between utilitarian and value-expressive shoppers. Finally, there was a block for the personal profile (block 6). This consisted of the standard independent variables, namely age, gender, job and income. As the questionnaire would also be sent to acquaintances living outside of Belgium, there was also a question for nationality and country of residence to serve as a possible control for influence. Finally there were also some standard questions gauging the general character of the respondent. With these questions, a distinction can be made between the independent and dependent variables. Table 7.1, translates the questions into the (in)dependent variables that will be used for the statistical tests in the data analysis. Table 7.1: Dependent and Independent Variables taken from the Questionnaire Dependent Variables Utilitarian/Value-expressive shopper (nominal) Would consider using a lowestprices filter (preference) (ordinal, 3-point scale) Satisfaction/ other evaluation criteria regarding this shopping experience (ordinal/interval 5 or 7-point Likert scale) Independent Variables - Self proclaimed goal when doing groceries (e.g. as efficiently as possible) (block 6) - Symbolism of groceries purchased (block 6) - Utilitarian/value-expressive shopper (block 6) - Assortment viewed (filtered or full) - Price sensitivity (block 1) - Actual buying choices made (block 2 or 3) - Would consider using a lowest-prices filter (preference) - Utilitarian/Value-expressive shopper (block 6) - Personal profile variables (block 6) - Shopping profile variables (block 1) 11

19 8 Data Processing 8.1 Factor Analysis For the factor analysis mainly variables from the checkout questions (block 4), the second shopping profile questions (block 5) and character questions from the personal profile (block 6) were used. This analysis was done to reduce the 60 variables by grouping those that measured the same aspect and eliminating some others. After the factor analysis e., it appeared that 11 components could be differentiated that together explains 84.16% of the total variance. The Bartlett s test of sphericity is significant (p < 0.05), which implies that the factor analysis is meaningful. The KMO-test gives a high enough value (> 0.50), which indicates that the variables are sufficiently structured. A correlation analysis between the factor scores ensures that they are all completely independent (r= 0.00; p = 1.00). Table 8.1 shows the most important data for the final factor analysis in comparison to the first factor analysis. Table 8.1: Comparison of the initial to the eventual factor analysis. First factor analysis f Number of variables included Final factor analysis g Bartlett s test of sphericity χ2(1830) = ; p < 0.01 χ2(630) = ; p < 0.01 KMO test Total variance explained 79.43% 84.16% Number of components generated Recoding of the (In)Dependent Variables All of the components generated in the factor analysis will be used as (in)dependent variable in the data analysis. The variables in these components must therefore be recoded in preparation for the reliability tests and calculating the summated scales. Those variables that had a negative load in the rotated component matrix obtained in the factor analysis were converted to have positive loadings. This recoding was done simply by altering the scales for the negatively phrased variables. For example, in the first component (measuring the respondents self-esteem), the five-point ordinal Likert scales for the variables I feel I do not have much to be proud of and at times I thing I am no good at all were changed from one (totally disagree) to five (totally agree) to five to one. These could then be used to e On the basis of the rotated component matrix, further factor analysis was executed until all components consisted of at least three variables with values sufficiently large enough (>0.50) and with enough of a difference from the other components (> twice the load of next highest value for the same variable). 12

20 compare them to the other variables in the same component and to calculate the summated scales for each component. Also other important variables were created. Price sensitivity is based on the amount of times the respondent found low-price to be important for the given products. The variable of actual buying choices are based on the amount of times they chose the lowest-priced option during their simulated online grocery experience. 8.3 Reliability For each component, a reliability test had to be executed to ensure that the variables in each component complement each other. Ideally, the internal consistency (α) needs to be greater than 0.80, which is the case here for all but one component. In table 8.2, it can be concluded that the internal consistencies for the nine components are reliable. Table 8.2: Summary of created components Component Given label (scale) 1 Self-esteem (1-5, very low to very high) 2 Task assortment satisfaction (1-7, very low to very high) 3 Task price satisfaction (1-7, very low to very high) 4 Task certainty of making right decisions (1-7, very low to very high) 5 Task satisfaction with choices made (1-7, very low to very high) 6 Overall enjoyment of doing groceries (1-5, very low to very high) 7 Task enjoyment (1-5, very low to very high) 8 Task difficulty (1-5, very low to very high) 9 Task utility (1-5, very low to very high) 10 Value-expressive shoppers (1-5, very low to very high) 11 Utilitarian (1-5, very low to very high)shoppers Number of variables included Cronbach s alpha (α) Mean (high self-esteem) (slightly dissatisfied) (somewhat satisfied) (slightly certain) (somewhat satisfied) (slightly more nonenjoyable) (neutral) (slightly difficult) (rather useful) (slightly valueexpressive) (very slightly utilitarian) Standard deviation

21 8.4 Clustering A hierarchical clustering (Ward s method) followed by a k-means clustering was conducted to classify the respondents as a utilitarian and/or value-expressive shopper or neither. Overall, there is only a very small difference between the initial and the final cluster centres. Furthermore, the anova test for the two factors indicates that there is a significant difference between the created clusters (F(3) = ; p < 0.01). Table 8.3 shows how many of the 120 respondents there are in each cluster and that the valueexpressive shoppers is by far the largest group. For the data analysis, only the value-expressive and utilitarian shoppers will be compared. Table 8.3: Number of cases in each cluster Cluster Number of respondents (N) Both value-expressive and utilitarian shoppers 33 Value-expressive shoppers 49 Utilitarian shoppers 17 Neither value-expressive and utilitarian shoppers 21 9 Data Analysis 9.1 Preference for Using a Lowest-Prices Filter In the questionnaire, respondents were asked whether they would make use of a lowest-prices filter if they were to do their groceries online. They had the choices would definitely not use, might use or would definitely use. This variable would serve as the dependent variable to see whether there is a significant difference between the two shopper types in terms of preference for viewing a filtered assortment or not (H1). The dependent variable is ordinal on a three-point scale, which means that a Kruskal-Wallis-test should be used with the following null hypothesis: H 0 = There are no significant differences between the shopper types and their preference for using a lowest-prices filter. H A = There is a significant difference between the shopper type and their preference for using a lowestprices filter. The Kruskal-Wallis-test rejects the null hypothesis (χ 2 (3) = 30.41; p < 0.01). Therefore, there is a significant difference between those willing to use the lowest-prices filter and the shopper type. Crosstabs show where the differences lay (χ 2 (6) = 31.34; p < 0.01). 14

22 For the utilitarian shoppers (N=17) no one answered that they definitely would not use the lowestprices filter, while 58.82% would definitely use it and the remainder might use the filter. The fact that majority of the utilitarian shoppers would definitely use the lowest-prices filter is inline with the first part of the first hypothesis (H1(a)) of this study. The larger represented value-expressive shoppers (N=49) were clearly less determined to use a lowestprices filter if they were do their groceries online. A slight majority said that they might use the filter (49.98%) while most others indicated that they would definitely not use it at all (44.90%). This is inline with the second part first hypothesis (H1(b)) of this study. There is thus a significant difference in shopper type and preference towards using the lowest-prices filter. This proves H1(a), that utilitarian shoppers would prefer making use of the filter, and H1(b), that value-expressive shoppers prefer not making use of the lowest-prices filter. In the next section, it will be tested to see whether these preferences are also translated into differences in the evaluation variables (e.g. satisfaction) between the shopper types after having used the filter or not. 9.2 Post-Shopping Evaluation Respondents had to evaluate the simulated online shopping experience on different levels in the checkout section of the online questionnaire. After the factor analysis, seven of the reliable components were used as evaluation components and summates scales grouped them into seven variables. These are given the labels of task satisfaction for choices made, for prices and for assortment, task utility (e.g. efficiency, usefulness and functionality), task difficulty (e.g. amount of time, effort and thought it required to make choices), certainty of choices made and enjoyment of the task. These dependent evaluation variables were all ordinal and measured on either a five or seven-point Likert scale and will be compared depending on the assortment the respondent was given. These will be tested using independent t-tests. Other tests will also be used in this section, but the independent t-tests will be a constant within each subsection. To avoid repetition, we generalise the null hypotheses for the test between evaluation variables and assortment here: H 0 = There is no significant difference for an evaluation variable depending on which of the two assortments the respondent had. H A = There is a significant difference for an evaluation variable depending on which of the two assortments the respondent had. 15

23 9.2.1 Shopper Types h Within Assortment To analyse whether there are differences between the shopper types regarding the level of satisfaction, an analysis of variance was used. This was executed separately for the respondents that had the filtered assortment (N=61) and those that were given the full assortment (N=59). The following null hypothesis was used: H 0 = There is no significant difference in the mean of an evaluated variable between the two shopper types. H A = There is a significant difference in the mean of an evaluated variable between the two shopper types. For both assortment types the null hypothesis is thus accepted as all p-values for the anova tests were greater than Although there was a significant difference found for the preference of using a lowest-prices filter to do the groceries between the shopper types, this preference appears not to be translated in different levels of satisfaction or other post-online grocery shopping variables Within Shopper Types For this post-shopping evaluation it was expected that that there would be a difference between valueexpressive and utilitarian shoppers (independent variable) for most/all those seven variables, but especially for the satisfaction variables. Independent t-tests are executed for each of the aspects for the two shopping experiences separately (lowest-prices filter assortment and full assortment). The results of these tests are executed and discussed for each shopper type individually. It was hypothesised that the utilitarian shoppers would be more satisfied and positive as a whole about using the filtered assortment (H2(a), as they would perceive this as more efficient. For them, however, there were no significant differences for none of the seven evaluation variables whether they did their shopping with the filter or not. This rejects hypothesis H2(a). The value-expressive shoppers were expected to be more positive after shopping from the fullassortment H2(b), but also for them there were no significant differences in satisfaction or other evaluated criteria. This thus rejects hypothesis H2(b) Price Sensitivity To ensure that there was a difference in the price sensitivity i of the respondent (ordinal dependent variable on a three-point scale) and the shopper types, a Kruskal-Wallis-test was done. This showed that h The scale was also reduced to three-points, to make sure that presence in each category would be large enough, but this did not impact the results for this section. i Price sensitivity is based on the number of times they found low-price important for the given products. 16

24 there was indeed a significant difference in price sensitivity for the four clusters (χ 2 (3) = 8.83; p = 0.03). From the crosstabs (χ 2 (6) = 17.00; p = 0.01) it could be concluded that, logically, the utilitarian shoppers were more price sensitive than the value-expressive shoppers. Namely, from the utilitarian shoppers, 41.18% were price sensitive, 52.94% were somewhat price sensitive (e.g. depending on the product), while only one person was not. On the contrary, for the value-expressive shoppers, the majority was not price sensitive (44.90%) while the other half were almost evenly divided over the (slightly) price sensitive categories Within Assortment Type The evaluation criteria were tested dependent on the price sensitivity (independent variable) for the two different assortments: H 0 = There is no significant difference in the mean of an evaluated variable between the price senitivity H A = There is a significant difference in the mean of an evaluated variable between the price sensitivity Using a variance analysis for only those respondents given the filtered assortment, it can be concluded that one s price sensitivity did not have a significant impact on the evaluation, for the simulated online shopping experience. The same test for only those that had the full assortment, also finds no significant for all variables except for task utility (F(2) = 7.53; p < 0.01). With equal variances assumed, it can be concluded from the Bonferroni test that the task utility mean for the not price sensitive respondents (M no =2.90, SD no =0.74) was found significantly less than those that were (somewhat) price sensitive (M somewhat =3.82, SD somewhat =0.76; M yes =3.93, SD yest =0.59). This is not necessarily surprising, but it is odd that this was then not the case for non-price sensitive shoppers that had the filtered assortment. Finally, when looking at only those who find low-prices important for the given products (price sensitive respondents), there is again no significant difference in the level of price satisfaction after either of the two shopping experiences. A Mann-Whitney U-test namely shows no difference in price satisfaction whether they were given the full or the filtered assortment (p = 1.00) Within Price Sensitivity and Shopper Type Utilitarian and value-expressive shoppers that find price important are looked at individually to see if this gives different results than just with in the shopper types. The price sensitive shoppers are tested for differences in evaluation depending on the assortment received with independent t-tests. For the price sensitive utilitarian shoppers (N filter =10; N full =6), the mean of each evaluation variable was higher for those who had the full assortment, apart from task difficulty. The independent t-tests reveal that none of the differences are significant and thus accept the null hypotheses for all evaluation variables. For the price sensitive value-expressive shoppers (N filter =8; N full =19), the mean of only choice 17

25 satisfaction and price satisfaction were lower for those who had the full assortment. The independent t- tests, however, again reveal that none of the differences are significant. The null hypotheses for all evaluation variables are thus rejected for both assortment types. This again rejects H2(a) and H2(b) Actual Choices Made The actual choices made variable is based on what the respondents bought during their simulated online grocery experience. More precisely, it is the frequency that a respondent chose the lowest-price alternative. An independent t-test shows that there is no significant difference in choices made depending on the assortment given (t(118) = -0.72; p = 0.47). This should be similar to the price sensitivity where respondents had to indicate the importance of low-price for the same product categories. For the respondents with the filtered assortment (N filter =61), the average amount of times that the respondent opted for the lowest-priced alternative was 74.13%. In each product category the lowestprice alternative was chosen most frequently. This was especially so for the bananas and the milk. For the respondents with the full assortment (N full =59), the average amount of times that the respondent opted for the lowest-priced alternative was slightly higher at 77.02%. Also here, the lowest-price alternative was chosen most frequently for each product category. The preference for the cheapest options is slightly more apparent than for the filtered assortment. For this assortment, it is mainly the two coffees that were the closest in amounts of times chosen (57.63%). A Kruskal-Wallis-test for the two assortments ensures that there were no significant differences for any of the evaluation variables depending on the choices made. This is logical as the respondents made their choices for a reason and always had the option between two products with two different prices Within Assortment Type To analyse whether there are differences between the choices made between the two shopper types, an analysis of variance was done, using the following null hypothesis: H 0 = There is no significant difference in the mean of the choices made between the four shopper types. H A = There is a significant difference in the mean of the choices made between at least two of the shopper types. For the respondents that received the filtered assortment, utilitarian shoppers had a higher mean (M Utilit. =85.56%, SD utility. =15.76%; M value-ex. =63.43%, SD value-ex. =25.48%). The anova test, however, indicates that the difference is insignificant (F(3) = 4.25; p = 0.51). For the respondents that received the full assortment, utilitarian shoppers had a higher mean (M Utilit. =80.95%, SD utility. =29.20%; M value-ex. =76.45%, 18

26 SD value-ex. =21.83%). Also here, however, the anova test, indicates that the difference is insignificant (F(3) = 0.07; p = 0.98). The null hypothesis is thus only accepted for within the full assortment. The lack of significant differences for full assortment group could be because the full assortment is what they are used to in a brick-and-wall store, as majority of the respondents had never done groceries online. Consequently, they may not know of any better, as they cannot compare it to having the filtered assortment. Within the filter assortment, those that would use also chose to use the filter are logically more satisfied with their choices and find the method of doing groceries more utile Within Choices Made and Shopper Type The purpose of the choices made variable is similar to the one of price sensitivity. The respondents are selected on the basis of having chosen the lowest-priced alternatives for majority of the product categories. A frequency of 80% or more was chosen as cut-off for an independent t-test to control for possible differences in the evaluation variables depending on the assortment given (N filter =26; N full =31). The means were the highest for choice satisfaction, assortment satisfaction and for the certainty of choices made for the filtered assortment. The means for price satisfaction, task utility, task difficulty and task enjoyment were the highest for the full assortment. As all p-values are all larger than 0.05, however, these differences between assortments given are not significant. Next the respondents tested were not only based on choices made, but also on whether they were a utilitarian or a value-expressive shoppers. In order to have sufficient cases to execute the independent t- tests, those that chose the lowest-priced product for at least six out of the nine product categories (66.67%) was used as the cut-off. The utilitarian shoppers were expected to be more satisfied using the filter, with the logic that they would find it more efficient to choose for lowest-prices from the start. From those that chose the lowest-priced alternative for majority of the product categories an independent t-test was done for the different evaluation variables depending on the assortment given (N filter =9; N full =5). The means of the different evaluation variables were highest for the full assortment, but the differences were not significant (p-values > 0.05). The null hypothesis is thus accepted for all evaluation variables. This indicates that it cannot be concluded that utilitarian shoppers are more satisfied when doing groceries with filter, rejecting H2(a). Perhaps this could be due to the fact that they did not chose to use the filter themselves, as assortments were randomly given to respondents. Another possibility could be that, overall, for both assortments the lowest-priced option was chosen most frequently in all product categories. The assortment type therefore did not appear to respondents consumer decisions. The two assortment groups also had a very small amount of respondents that fulfilled the criteria (shopper type and choices made) to be tested. 19

27 The value-expressive shoppers were expected to be more satisfied when they were able to repeatedly choose the lowest-priced option from a full assortment. Using the same methodology as for the utilitarian shoppers an independent t-test was executed and analysed (N filter =12; N full =18). Also here the means for all seven variables were higher for the full assortment than for the filtered assortment, apart from task price satisfaction. The differences were found insignificant for all but one of the seven variables. Namely, for task utility (M filter =3.08, SD filter =1.00; M full =3.83, SD full =0.92), there was a significant difference between the assortment types (t(28) = -2.11; p = 0.04). The value-expressive respondents found the task more useful and efficient when given the full assortment, which thus rejects the null hypothesis. For all other evaluation variables, the null hypothesis is again accepted. This indicates that it cannot be concluded that value-expressive shoppers are more satisfied when repeatedly choosing the lowest price alternative from a full assortment, but that they do find it significantly more utile. This therefore does not entirely reject H2(b) Preference for Using a Lowest-Prices Filter Within Assortment Type To analyse whether there are differences between the initial preferences for using a lowest-prices filter regarding the level of satisfaction, an analysis of variance was used. The same methodology is used as between the shopper types, using the following null hypothesis: H 0 = There is no significant difference in the mean of an evaluated variable between the preference for using a lowest-prices filter. H A = There is a significant difference in the mean an evaluated variable between at least two of the preference groups. Looking at just those respondents that were given the filtered assortment, the means were generally higher for those that would definitely use the filter. Only the means for task price satisfaction and task difficulty were highest for those that might use the filter. From the anova tests, however, it could be concluded that only the variables choice satisfaction and task utility have significantly different means between at least two of the preference groups (resp. F(2) = 4.448; p = 0.02 and F(2) = 4.39; p = 0.02). With equal variances assumed for the choice satisfaction, a Bonferroni test reveals that there is only a significant difference between the would definitely not use and the would definitely use preference groups. The choice satisfaction mean for those that would definitely use the filter is significantly higher than those that would definitely not (M yes =5.30, SD yes =1.13; M no =3.71, SD no =1.50). With equal variances not assumed for task utility, a Tamahane test shows that the significant difference in mean task utility lies between the might use and the would definitely use preference groups. The task utility mean for those that would definitely use the filter is significantly higher than those that might (M yes =3.85, 20

28 SD yes =0.59; M maybe =3.71, SD maybe =0.49). For a real online grocery store, this result can be translated into the following: those who select to use a filter are more satisfied with their choices and find their shopping experience more efficient/useful. Combining this with the result that utilitarian shoppers are more likely to chose the filter option, H2(a) can be accepted. For the respondents that received the full assortment, those that might use a lowest-prices filter generally had a higher mean apart from for the variables task utility and task difficulty. The anova tests, however, indicate that the differences are insignificant for all the variables. The null hypothesis is thus only accepted for within the full assortment. The lack of significant differences for full assortment group could be because the full assortment is what they are used to in a brick-and-wall store, as majority of the respondents had never done groceries online. Consequently, they may not know of any better, as they cannot compare it to having the filtered assortment. Within the filter assortment, those that would use also chose to use the filter are logically more satisfied with their choices and find the method of doing groceries more utile Within Preference and Shopper Type The N values for both shopper types that would definitely use the filter, were not large enough when spread over the two assortment types. No tests could be executed Other Variables It was expected that there would be differences in satisfaction depending on the type of shopper, their price sensitivity of the respondent and/or their actual choices made. Value-expressive shoppers would prefer the full-assortment and gain more satisfaction by continuously opting for the lower-priced product and that utilitarian shoppers would prefer the more efficient filter option. This study only seems to accept the hypothesis that utilitarian shoppers indeed prefer using the filter, but not that they are more satisfied after using it. As it is not yet proven that there is a difference in satisfaction for the already discussed independent variables, other factors are investigated. To see whether anything else (e.g. from the shopper or personal profile) perhaps influences the task evaluation variables depending on which one of the two assortments the respondent was given, a number of extra tests are executed. For all these tests, a Mann-Whitney U-test is used, as the dependent variables remain the ordinal evaluation measures (reduced to a 3-point scale to ensure enough respondents in each group) and the independent variable is the type of assortment given (full or filtered). The null hypothesis states that there is no significant difference for each of the seven evaluation variable depending on the assortment viewed, while the alternative hypothesis states that there is a significant difference. 21

29 First, cases are selected on the basis of overall enjoyment of doing groceries. For those that generally enjoy grocery shopping (N=109), there is a significant difference in the evaluation only in the level of task enjoyment. The Mann-Whitney U-test thus rejects the null hypothesis for just the one evaluation variable (Mann-Whitney U = ; p = 0.04). Crosstabs (χ 2 (2) = 5.09; p = 0.08) show that those given the filtered assortment enjoy the task significantly less (66.67%) than those given the full assortment (45.45%). For those that generally do not enjoy grocery shopping, there were no significant differences in the questionnaire s post-shopping evaluation. Next, it was tested for differences within the variable frequency of doing groceries. Those that do groceries two to three times a week (N=66) had a significant difference in task enjoyment depending on the assortment viewed. The means for all seven variables were highest for the full assortment group. Only for the task enjoyment variable was there a significant difference (t(64) = -2.39; p = 0.02) between the filtered and full assortment (M filter =2.72, SD filter =0.85; M full =3.21, SD fiull =0.81). The respondents that had the filtered assortment therefore found the shopping experience significantly less enjoyable when having the full assortment. A possible explanation for this is that those who do groceries 2-3 times a week, are used to being able to view a full assortment and/or are likely to pay less attention to prices and perhaps buy what they always do out of habit instead. Within the other frequency groups there are no significant differences. Third, the different grocery budgets were tested. For those typically spending between 21 and 40 Euros (N=23), there was a significant difference in task price satisfaction (Mann-Whitney U = 36.00; p = 0.03). Via crosstabs (Fisher s Exact Test: p = 0.04) it is apparent that the respondents given the filtered assortment are significantly less satisfied with the given prices (84.62%). Respondents given the full assortment were more satisfied with the prices (60%). For respondents typically spending over 80 Euros each time they do groceries, there is also a significant difference in task price satisfaction between the two assortments (Mann-Whitney U = 97.50; p = 0.26). Here the crosstabs (χ 2 (2) = 10.86; p < 0.01) shows that those given the filtered assortment are just slightly less satisfied with the prices (54.17%), while for the full assortment group a clearer majority are less satisfied (84.62%). Fourth, self-esteem is analysed. A variance analysis reveals that there is a significant difference between the evaluation variables and the assortment given (F(3) = 48.67; p < 0.01). With variances not assumed, a Tamahane test shows that there is a significant difference between task assortment satisfaction and every level of self-esteem (M low =1.00, SD low =0.00; M avg =1.64, SD lavg =0.50; M high =2.69, SD high =0.47; M very high=3.00, SD very high =0.00). Therefore, the higher the respondent s self-esteem, the higher the assortment satisfaction. Self-esteem did not influence the choices made during the questionnaire s shopping segment, nor did it influence the evaluation variables depending on the assortment received. H3(b) predicted that value-expressive shoppers would be more satisfied shopping from the full assortment as 22

30 a result from self-esteem. It is however not confirmed that these types of shoppers are indeed more satisfied when given the full assortment. When carrying-out a variance test, there appears to be no significant differences in self-esteem given the four shopper types as the independent variable. This is likely to be why H3 cannot be accepted. Fifth, the differences within nationality and country of residence are looked at. For nationality only the non-europeans showed a significant difference between having a full or a filtered assortment and this only regarding the task utility and task difficulty. However, as this is only a very small group (N=5) and therefore has little reliability and there is no point for further tests. The amount of respondents with a country of residence outside of Europe is larger (N=23). For this group, there is a significant difference in task difficulty (p < 0.01). Crosstabs for this variable (χ 2 (2) = 8.89; p = 0.01) show that respondents living outside of Europe found it more difficult when given the full assortment (75%) than when given the filtered assortment (20%). For those living in Belgium or other European countries, there were no significant differences in post-evaluation variables depending on the assortment viewed. A possible reason for this difference could be because that when they are less accustomed to using the Euros even if they are European and still go to Europe frequently. When they only have to choose between products from the filtered assortment, they are less concerned about choosing a good price, as they are already choosing products with the lowest-prices. When given the full assortment it might take them a greater effort to analyse the price differences. Finally there were no significant difference within gender, the age groups, current jobs or income groups for the post-evaluation of the simulated shopping experience depending on which assortment they were given. 23

31 Conclusion 10 Summary of Results From the data analysis, it is clear that not all of the hypotheses formulated at the start of the study can be accepted. Here the most important results are summarised that answer to this study s research question asking to which extent will consumers prefer a reduced assortment containing the lowestpriced products versus a full assortment, as a function of whether their choice serves a utilitarian versus self-expressive function? Hypothesis one of this study handled the preference aspect for the lowest-prices filter option for online groceries between the different shopper types. The results accept both parts of this hypothesis. Utilitarian shoppers prefer using a lowest-prices filter (H1(a)), while value expressive shoppers do not (H1(b)). This is inline with the logic that utilitarian shoppers aim to use the more efficient option. To see whether the preferences are translated in the satisfaction levels (H2(a) & H3(a)), a number of tests were executed: - Within each of the two assortment types, it was concluded that there were no significant differences between any of the evaluation variables (e.g. satisfaction) depending on the shopper type. A significant difference was found within the filtered assortment for the mean choice satisfaction and the mean task utility when the same test was done depending on whether the respondent initially stated that they would use a lowest-prices filter or not. Respondents were more significantly satisfied with their choices and the task was perceived significantly more utile when they were pro using the filter to begin with. - Within the shopper types, neither utilitarian nor value-expressive shoppers had significant difference in the satisfaction level (or any other evaluation variable) whether they had the filtered or the full assortment. - The utilitarian shoppers were indeed more price sensitive in comparison to the value-expressive shoppers. Only for the non-price sensitive respondents was there a difference in an evaluation variable. The mean task utility was significantly less for those non-price sensitive respondents within the full assortment group. When selecting those that chose the lowest-priced alternative for majority of the product categories during the online grocery task, only one variable had a significant difference. Namely, value-expressive shopper found it significantly more utile using the full assortment. 24

32 - There were no significant differences in satisfaction (or other evaluation variables) within price sensitive (importance of low-prices for the given product categories) utilitarian shoppers depending on the assortment given. This is the same within the price sensitive value-expressive shoppers. Results are the same for when price sensitivity is replaced with the actual choices made (the frequency that the respondent actually chose the lowest-priced alternative in the experiment). Only within the value-expressive shoppers is there a significant difference in mean utility when given the full assortment. - Those that said they would definitely use a lowest-prices filter, are more satisfied with their choices and find their shopping experience more efficient/useful. Combining this with the result that utilitarian shoppers are more likely to chose the filter option, contrary to what all the other test conclude. These results do not allow for the acceptation of the hypotheses H2(a) and H3(a). For none of the test involving utilitarian shoppers was there a significant difference in satisfaction (or other evaluation variables). Only the final point somewhat supports the hypotheses. Although utilitarian shoppers are significantly more price sensitive, the assortment they do their groceries in does not impact them. From this study it can thus be concluded that, although they prefer using a lowest-prices filter to do their groceries, they do not gain grater satisfaction by shopping from this assortment. Choosing for the lowest-prices option once (filtered assortment) or repeatedly selecting the lowest-priced alternative (full assortment) does not impact the utilitarian shoppers in this study. This could be because in both cases majority still always opted for the lowest priced option. As the first parts of hypotheses H2 and H3 can not be accepted, the second part can not be proven either. The variable measuring self-esteem variable was supposed to influence the satisfaction for valueexpressive shoppers. There is, however, no significant difference in self-esteem between the two shopper types. This could be an explanation as to why the third hypothesis is rejected. Coming back to the research question, there is indeed a significant difference in preference for using a filter between utilitarian and value-expressive shoppers. This study, however, does not prove that there is also a significant difference in the satisfaction level between the assortments for the two shopper types. 25

33 11 Generalizability of the Conclusions This study suggest that there are significant differences in terms of preference of using a filter but not that this results in significant differences in satisfaction depending on the given assortment. It was attempted to be as similar to reality as possible. The prices were based on actual prices from an online grocery website and those from the lowest-prices assortment product range were also labelled with a red price tag. It was an online questionnaire and also only used the respondents who would consider doing their groceries online so that the respondents are somewhat representative of (potential) online buyers. Despite this, it cannot be certain that the results can be generalised. There were namely several limitations. The assortments themselves were not entirely representative. Firstly, the assortments were obviously much smaller than in reality. Probably a more significant difference to a real online shopping experience is the fact that the choices could only be based on prices and not on the brand, product attributes j, product recognition, promotions etc. A lot of people also tend to buy staple products out of habit and do not like changing what they usually buy. In that case, they would pay less attention to prices. These factors could all contribute to different satisfaction levels for the consumer. Although the prices were representative and based on an actual online grocery website, it was sometimes difficult to find a same product. Most products are somewhat unique and are likely to be priced differently for a reason. Apart from volume/weight and price, there was no additional product information available, which is often not the case on actual grocery websites. The option of giving respondents the possibility of seeing more product information would however not allow us to study just the prices. As most respondents choose the cheapest option for each product category, it was not always as straight forward. For some product categories the difference in amount chosen was smaller than for others. This was only the case for coffee when looking at both assortments. This is most likely to be due to the product category itself or the picture. Overall, there seemed to be no significant differences depending on the difference in price in this study, but the level of satisfaction could be different if the respondents had a more information of what they were buying. Although in all there were enough respondents, when classified into clusters for shopper type, the groups may have been too small to optimally execute statistical test. For example the group of valuej More information on prices could increase consumer price sensitivity for undifferentiated products. At the same time, having more information on non-price attributes could reduce price sensitivity for differentiated products. 26

34 expressive shoppers was large enough, but when adding another selection criteria, the group was likely to be too small to cause significant differences. 12 Further Implications and Recommendations If this study was to be continued, there are recommendations that could either confirm the results or not. Firstly, as the total amount of respondents are narrowed down quite a lot for the tests, a larger sample is needed. It may also be more beneficial to test the same respondents that have used the filtered and full assortments. Of course this would require sufficient time in between the two questionnaires. Perhaps the best way to execute this study is to track purchases of actual consumers, whether they choose to use a filter, what products they choose from the given alternatives and ask them to fill out a sort of evaluation and profile details at the checkout. This would be much more realistic, as here their choices would be much less random when they are actually buying the product and not just having to imagine that they are. At the online-checkout, it can be asked why they chose the selected products. Finally, differences in web page design or lay-out is believed to impact the consumers decisions. In this study, one standard format was used, but maybe another variant could cause different results. For example, one that makes it even more clear that they are using a filter or not and presenting the products differently. 27

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38 Appendix Appendix 8.1: Communalities and Rotated Component Matrix for the Final Factor Analysis Communalities How satisfied are you with the choices you made while shopping How content are you with the choices you made while shopping How pleased are you with the choices you made while shopping How much effort did it take you? How much time did it take you? How much thought did it take you? How certain are you that you made the right choice? How sure are you that you made the right choice? How confident are you that you made the right choice? How satisfied were you with the price you had to pay for the products? How content were you with the price you had to pay for the products? How pleased were you with the price you had to pay for the products? How satisfied were you with the assortment of products you could choose from within each category? How content were you with the assortment of products you could choose from within each category? Initial Extraction 1,000,941 1,000,938 1,000,921 1,000,787 1,000,865 1,000,830 1,000,939 1,000,947 1,000,951 1,000,957 1,000,974 1,000,971 1,000,968 1,000,982 VII

39 How pleased were you with the assortment of products you could choose from within each category? This shopping experience was:- Enjoyable This shopping experience was:- Fun This shopping experience was:- Pleasant This shopping experience was:- Useful This shopping experience was:- Functional This shopping experience was:- Efficient 1,000,975 1,000,866 1,000,910 1,000,891 1,000,829 1,000,789 1,000,683 I feel good about myself. 1,000,719 I feel I am a person of worth, the equal of other people. I am able to do things as well as most other people. On the whole, I am satisfied with myself. At times I think I am no good at all. I feel I do not have much to be proud of. The groceries you buy tells something about you. The groceries I buy gives a glimpse of the type of person I am. You can tell a lot about a person by the groceries he/she chooses. Grocery shopping is a pleasant activity to me. I enjoy grocery shopping just for the fun of it. Grocery shopping is one of the enjoyable activities in my life. I usually buy only grocery items that I really need. 1,000,650 1,000,629 1,000,770 1,000,675 1,000,618 1,000,890 1,000,877 1,000,758 1,000,874 1,000,898 1,000,839 1,000,817 VIII

40 While grocery shopping, I am only looking for items that are on my list. When grocery shopping, it is important to me to accomplish the task as efficiently as possible. 1,000,784 1,000,583 Extraction Method: Principal Component Analysis. On the whole, I am satisfied with myself. Rotated Component Matrix a Component ,855 -,063,006 -,031,037 -,028 -,140 -,066,022,086 -,004 I feel good about myself.,816 -,031 -,115 -,032 -,113,034 -,050 -,067,024,094,090 I feel I am a person of worth, the equal of other people. I am able to do things as well as most other people. I feel I do not have much to be proud of. At times I think I am no good at all. How content were you with the assortment of products you could choose from within each category? How pleased were you with the assortment of products you could choose from within each category? How satisfied were you with the assortment of products you could choose from within each category? How content were you with the price you had to pay for the products? How pleased were you with the price you had to pay for the products? How satisfied were you with the price you had to pay for the products?,745 -,119,024 -,085,142 -,120,083,141,062 -,077,033,738,039,103,011,190 -,134,058,059,057 -,087,032 -,715,004 -,119 -,147,076,019 -,014,148,050 -,079,185 -,661,166 -,072 -,301,244,048 -,045,161,141,029,071 -,104,921,157,170,159 -,032,167 -,015,115,015 -,031 -,109,917,149,176,178 -,028,166,002,089,021 -,022 -,104,910,153,153,187 -,026,179 -,026,114 -,009 -,015,066,122,946,066,171,017,102 -,099,063 -,035 -,027,047,177,936,071,172,039,113 -,097,038 -,047 -,012,056,123,934,111,144,027,113 -,112,047 -,062,011 IX

41 How confident are you that you made the right choice? How sure are you that you made the right choice? How certain are you that you made the right choice? How satisfied are you with the choices you made while shopping? How pleased are you with the choices you made while shopping? How content are you with the choices you made while shopping? Grocery shopping is a pleasant activity to me. I enjoy grocery shopping just for the fun of it. Grocery shopping is one of the enjoyable activities in my life. This shopping experience was:-fun This shopping experience was:-pleasant This shopping experience was:-enjoyable How much time did it take you? How much thought did it take you? How much effort did it take you? This shopping experience was:-useful This shopping experience was:-functional This shopping experience was:-efficient The groceries you buy tells something about you. The groceries I buy gives a glimpse of the type of person I am.,074,217,084,837,242 -,036,231 -,048,271,021,032,035,214,102,827,268 -,041,246 -,035,249,018,099,087,223,146,795,265 -,048,256 -,068,272,007,109 -,032,254,237,313,806,026,139 -,180,122 -,065 -,014,047,272,271,271,790,044,140 -,178,129 -,044 -,044,042,260,294,283,780,100,152 -,183,150 -,059 -,030 -,027 -,020 -,008 -,012 -,009,923,083 -,001 -,045,062 -,085 -,118 -,061,068 -,005,037,911,033 -,050 -,044 -,025 -,194 -,114,011,021 -,060,074,900,063,000 -,007,036 -,039 -,022,178,151,116,081,091,860 -,054,287,039 -,005,045,166,112,233,166,156,836 -,094,171 -,073 -,013 -,052,265,149,336,131,004,759 -,053,242 -,056 -,010 -,035,011 -,067 -,110 -,051 -,016 -,048,916,000,029,034 -,088 -,049 -,142 -,055 -,030 -,050,031,889 -,002,043,030 -,030 -,001 -,072,065 -,274,025 -,152,809 -,114,099,008,052,127 -,007,119,196 -,011,163,049,850 -,051,052,006,055,015,253,120 -,012,178 -,038,821,001 -,019 -,034,099,140,166 -,051 -,081,214 -,120,739 -,084 -,042 -,017 -,026 -,007,061,005 -,012 -,040,100 -,070,931,042,030 -,026 -,084,096,019,041 -,056,079 -,053,919,004 X

42 You can tell a lot about a person by the groceries he/she chooses. I usually buy only grocery items that I really need. While grocery shopping, I am only looking for items that are on my list. When grocery shopping, it is important to me to accomplish the task as efficiently as possible. Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. a. Rotation converged in 7 iterations.,059,070 -,034 -,136 -,122,046,036 -,022,012,842,048,028,018 -,072,042,000 -,082 -,058,025 -,018,064,891 -,097 -,115,043,047 -,007 -,170,085,052 -,028,023,847,069,215,048,285 -,314 -,219 -,198 -,040 0,28,016 0,43 Appendix 8.2: Reliability tests for factor analysis components 1. Self-Esteem Component Reliability Statistics Cronbach's Alpha N of Items,844 6 Scale Mean if Item Deleted Item-Total Statistics Scale Variance if Item Deleted Corrected Item- Total Correlation Cronbach's Alpha if Item Deleted I feel good about myself. 19,7333 9,256,680,812 I feel I am a person of worth, the equal of other people. I am able to do things as well as most other people. On the whole, I am satisfied with myself. At times I think I am no good at all (recoded) I feel i do not have much to be proud of (recoded) 19,5417 9,242,585,826 19,4417 9,307,611,822 19,6333 9,108,740,802 19,5833 8,430,637,817 20,0250 7,840,598, Task Assortment Satisfaction Component Reliability Statistics XI

43 Cronbach's Alpha N of Items,993 3 Item-Total Statistics How satisfied were you with the assortment of products you could choose from within each category? How content were you with the assortment of products you could choose from within each category? How pleased were you with the assortment of products you could choose from within each category? Scale Mean if Item Deleted Scale Variance if Item Deleted Corrected Item- Total Correlation Cronbach's Alpha if Item Deleted 6,43 9,441,977,995 6,37 9,293,992,984 6,35 9,322,985, Task Price Satisfaction Component Reliability Statistics Cronbach's Alpha N of Items,985 3 Item-Total Statistics How satisfied were you with the price you had to pay for the products? How content were you with the price you had to pay for the products? How pleased were you with the price you had to pay for the products? Scale Mean if Item Deleted Scale Variance if Item Deleted Corrected Item- Total Correlation Cronbach's Alpha if Item Deleted 9,98 4,975,954,987 10,01 5,050,976,972 10,02 4,932,972,975 XII

44 4. Task Certainty of Decisions Component Reliability Statistics Cronbach's Alpha N of Items,986 3 Item-Total Statistics How certain are you that you made the right choice? How sure are you that you made the right choice? How confident are you that you made the right choice? Scale Mean if Item Deleted Scale Variance if Item Deleted Corrected Item- Total Correlation Cronbach's Alpha if Item Deleted 8,34 8,748,964,982 8,27 9,092,976,974 8,20 8,985,966, Task Satisfaction Component Reliability Statistics Cronbach's Alpha N of Items,985 3 Item-Total Statistics How satisfied are you with the choices you made while shopping? How content are you with the choices you made while shopping? How pleased are you with the choices you made while shopping? Scale Mean if Item Deleted Scale Variance if Item Deleted Corrected Item- Total Correlation Cronbach's Alpha if Item Deleted 9,78 6,003,959,983 9,83 6,213,971,975 9,84 6,118,971,974 XIII

45 6. Overall Enjoyment of Doing Groceries Component Reliability Statistics Cronbach's Alpha N of Items,920 3 Item-Total Statistics Grocery shopping is a pleasant activity to me. I enjoy grocery shopping just for the fun of it. Grocery shopping is one of the enjoyable activities in my life. Scale Mean if Item Deleted Scale Variance if Item Deleted Corrected Item- Total Correlation Cronbach's Alpha if Item Deleted 4,83 3,922,849,877 5,23 3,991,871,859 5,49 4,168,797, Task Enjoyment Component Reliability Statistics Cronbach's Alpha N of Items,932 3 Item-Total Statistics This shopping experience was:-enjoyable This shopping experience was:-fun This shopping experience was:-pleasant Scale Mean if Item Deleted Scale Variance if Item Deleted Corrected Item- Total Correlation Cronbach's Alpha if Item Deleted 5,86 2,812,829,927 6,05 2,754,877,890 5,86 2,593,879,888 XIV

46 8. Task Difficulty Component Reliability Statistics Cronbach's Alpha N of Items,873 3 Item-Total Statistics How much effort did it take you? How much time did it take you? How much thought did it take you? Scale Mean if Item Deleted Scale Variance if Item Deleted Corrected Item- Total Correlation Cronbach's Alpha if Item Deleted 5,13 2,951,716,864 5,13 3,360,816,782 4,78 3,033,756, Task Utility Component Reliability Statistics Cronbach's Alpha N of Items,835 3 Item-Total Statistics This shopping experience was:-useful This shopping experience was:-functional This shopping experience was:-efficient Scale Mean if Item Deleted Scale Variance if Item Deleted Corrected Item- Total Correlation Cronbach's Alpha if Item Deleted 7,37 2,469,746,721 7,03 2,722,743,729 7,00 2,924,609, Value-Expressive Shopper Component Reliability Statistics Cronbach's Alpha N of Items,888 3 XV

47 Item-Total Statistics The groceries you buy tells something about you. The groceries I buy gives a glimpse of the type of person I am. You can tell a lot about a person by the groceries he/she chooses. Scale Mean if Item Deleted Scale Variance if Item Deleted Corrected Item- Total Correlation Cronbach's Alpha if Item Deleted 6,78 2,541,842,788 6,86 2,442,827,799 6,86 2,761,682, Utilitarian Shopper Component For this last component, the Cronbach s Alpha is below 0.80, which is not ideal but still acceptable. Removal of a variable is not done as there needs to be at least three variables included. Reliability Statistics Cronbach's Alpha N of Items,680 3 Item-Total Statistics When grocery shopping, it is important to me to accomplish the task as efficiently as possible. I usually buy only grocery items that I really need. While grocery shopping, I am only looking for items that are on my list. Scale Mean if Item Deleted Scale Variance if Item Deleted Corrected Item- Total Correlation Cronbach's Alpha if Item Deleted 6,01 3,538,314,778 6,66 2,176,616,410 6,97 2,083,592,446 XVI

48 Appendix 8.3: Scatter Graphs for the Pre- and Post-Clustering of Value-Expressive and Utilitarian Components XVII