The effect of sampling chocolate on customer experience

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1 RIJKSUNIVERSITEIT GRONINGEN The effect of sampling chocolate on customer experience Customer indulgence, cost or benefit? By Bibianne Roetert May 12 In this study the effect of sampling chocolate on customer experience is examined in a supermarket environment. The experiment provides thorough insight in the do s and dont s considering sampling. This thesis will conclude with an advice for retailers how to use sampling in order to improve customer experience.

2 The effect of sampling chocolate on customer experience Master thesis Author Bibianne Roetert, Burmanstraat SG Amsterdam Tel: University of Groningen Faculty of Economics and Business Msc Business Administration Specialization Marketing Management Supervisors Supervisor: Laurens Sloot Co-supervisor: Erjen van Nierop Amsterdam,

3 Management summary Providing superior customer value is important in today s food retail industry. Since a pleasant customer experience will enhance customer value the following study will examine the effect of sampling chocolate on the pleasantness of customer experience. Customer experience is divided into three constructs: Cognitive response; affective response; and conative response. These responses were all divided into several quantifiable attributes. Using a quasi-experimental design a study is performed in two Dutch value-for-money supermarkets. 296 female respondents were questioned equally divided over three different situations. In one situation chocolate was sampled; in the other pencils were sampled; and in the control situation nothing was sampled. Following a factor analysis in order to determine the reliability of the attributes, a regression analysis gave insight in the causality between in store sampling and the cognitive, affective and conative responses of female shoppers. The results from this analyses showed that only affective responses were affected by tasting chocolate. Cognitive response and conative response showed no significant relationship with sampling chocolate. Additionally, affective responses were both positively and negatively affected by sampling chocolate. Because the beta of the causality with the positive affective response was higher than the beta of the relationship with the negative affective response, the hypothesis concerning the positive effect of chocolate on positive affective response is supported. This means that it is very likely that sampling chocolate affects processes in the orbitofrontal cortex concerning the regulation of emotions. Because seeing chocolate proved to have the same effect as tasting chocolate, this effect is even more likely. To conclude, it seems that chocolate is a pleasure enhancer, but it enhances negative affective responses at the same time. Therefore, more research is essential in order to determine if and how retailers could benefit from providing samples of chocolate in their supermarket. 3

4 Preface When I was only twelve years old, I already wanted to become a marketeer. Searching for ways to improve people s everyday rituals and to fulfil needs by making innovative products sounded like the most fun job in the world. Therefore, after successfully finishing my Bachelor s degree it obviously wasn t hard to choose which Master I wanted to apply for. Marketing management it was. Finally all courses which were thought attracted my attention and made me a fully dedicated student. To complete my marketing knowledge with some practical experience I learned a lot during my internship at Albert Heijn. During this internship I knew all my choices have been right and marketing is really the part of business which I can accelerate in and where my heart lies. Therefore, I m happy to finally finish my studies and to start practice real marketing in a Marketing traineeship at Unilever. Finishing this thesis will mean the end of a fun and informative project. I couldn t have finalised this without the help of a couple of great people. First, I want to thank Laurens Sloot for his endless patience and his useful tips. I also like to thank professor Verbeke for being so helpful and enthusiastic during the entire process. John Macleane has made it possible to collect data in both his supermarkets in Elst, I want to thank him a lot for this possibility and for the samples supplied by his supermarkets. In advance I also want to thank Erjen van Nierop for being my second supervisor and for spending time to read the whole text. Also I would like to thank the supermarket manager of Albert Heijn Jeremy for providing me with some useful insights from Holland s biggest retailer. At last I want to thank my parents, brother, sister, friends and boyfriend for supporting me throughout the entire process. They have always paid full attention to my stories and encouraged me to proceed with my fantastic ideas. Again, thanks to all of you who were involved in anyway and have made me finalize this challenging project! 4

5 Table of content Management summary... 3 Preface 4 1. Introduction Background Customer Experience Cognitive responses Affective responses Conative responses Problem statement Relevance of study Structure of the study Theoretical framework Sampling food Tasting food Customer Experience Cognitive responses Affective responses Conative responses Conceptual model Research design Experimental design Sample Procedure Plan of analysis Extra analysis Results Representativeness of sample Factor analysis Regression analysis Extra analysis Overview of the results Conclusion The effect of chocolate on cognitive response The effect of chocolate on affective response The effect of chocolate on conative response The effect of chocolate on customer experience Limitations and guidelines for future research Managerial implications...60 References 62 Appendix A1 - Questionnaire

6 Appendix A2 - Questionnaire...73 Appendix A3 - Questionnaire...79 Appendix B Interview...85 Appendix C SPSS- results...87 Appendix D Pictures

7 1. Introduction 1.1 Background In food retail, creating value to your customer is the key to success. Especially in the supermarket industry of today, which is characterized by price wars, all practices of a food retailer are based on persuading consumers to spend money at their place and not at the competition. Where most food retailers focus on price and products in order to differentiate, Dutch consumers are looking for good service and the feeling of to this place I want to return (GFK.nl 2012²). Therefore, to maintain and even expand their position in the market, Dutch retailers have to start investing in creating superior customer experience in order to attract customers and differentiate from competition. 1.2 Customer Experience Verhoef et al (2009) define customer experience as a holistic construct which involves the customer s cognitive, affective, emotional, social and physical responses to the retailer. This includes the total experience starting from the search, to the purchase, consumption and eventually the after-sale phase. During these phases, customers can be affected by elements under control of the retailer or beyond their control. An element in these phases which can be controlled is the store environment (Baker et al. 2002). Since two-third of the purchase decisions is made in-store, this is actually the place to make a difference after the consumer has decided to enter your supermarket (POPAI 1995; Inman et al. 2009). Research shows that the more time one spends in the store, the higher the probability of unplanned purchases (Inman et al. 2009). According to this same research, time spent in the supermarket can be increased by making the shopping experience as pleasant possible. This is supported by Donovan et al. (1994) who claim that feelings of pleasure perceived in a store environment, lead to spending more time in this environment and eventually spend more money. Moreover, 7

8 today s Dutch consumer spends 25 minutes per shopping trip (CBL.nl 2012¹). Hence, retailers can enhance this time and thereby sales by making the customer experience as pleasant as possible. Moreover, in-store promotions lead to enhancement of emotion and experience which is crucial in involving Dutch customers with their supermarket (GFK.nl 2012²). Additionally, a tool to make the customer experience outstand the competition is sampling of food in a supermarket. It is expected that especially the (sweet) taste of chocolate has the ability to influence customer responses in a retail environment (Herz 2007). However, the effect of sampling chocolate on customer responses has never been studied before. Therefore, in this study the effect of sampling chocolate on the perceived customer experience is examined. With the in-store stimulus of chocolate, retailers attract the consumer s attention. While having their attention, customers get the opportunity to appraise the stimulus which results in cognitive, affective and conative responses (Inman et al. 2009). As Verhoef et al. (2009) claim, these responses ultimately determine the perception of the construct customer experience. 1.3 Cognitive responses Cognitive responses are responses towards stimuli which are generated consciously. The consumer is not a passive receiver of influences from the in-store environment, but instead he or she actively tries to process the information from in-store stimuli (Fennis and Stroebe 2010). Moreover, cognitive responses vary from perceptions of interpersonal service quality up to perceptions of assortment quality (Baker et al. 2002; Dabholkar et al. 1996; Parasuraman et al. 1988). In addition, cognitive response may either result in active approach, active resistance, or unchanged behaviour which depends on the positivity of the customers perception (Fennis and Stroebe 2010). 8

9 1.4 Affective responses Affect relates to ones internal status in view of the collection of moods and emotions (Puccinelli et al. 2009). An affective response towards a supermarket is generally considered as the feeling of perceived pleasure in that supermarket (Kaltcheva and Weitz 2006; Donovan et al. 1994; Baker et al. 1992). In addition, positive affective responses cause an increased willingness to buy (Inman et al. 2009; Kaltcheva and Weitz 2006; Donovan et al. 1994; Baker et al. 1992). Consequently, positive affective responses can turn out in an increased share of wallet per customer or maybe even stimulate patronage behaviour. Affective responses are mostly accompanied by cognitive responses (Inman et al. 2009); nevertheless they influence behaviour independently (Donovan et al. 1994). 1.5 Conative responses Besides cognitive and affective responses, in-store stimuli can evoke conative responses. Conative response can be explained as either approach or avoidance behaviour (Mehrabian and Russel 1974). In former research this is measured as: the intention to visit the store (Baker et al. 1992; Donovan and Rossiter 1982); the intention to recommend the store to your friends (Baker et al. 1992); spending extra time in the store than intended (Inman et al. 2009; Donovan and Rossiter 1994); spending more money than intended (Inman et al. 2009; Kaltcheva and Weitz 2006; Sherman et al. 1997; and Donovan and Rossiter 1997); and liking of the store (Sherman et al. 1997; Donovan and Rossiter 1982). Figure 1 describes the relationship between in-store stimuli and responses. 9

10 Figure 1 The relationship between In-store stimuli and consumer response Cognitive response In-store stimuli Affective response Conative response 1.6 Problem statement It is of great importance to find out what factors make the difference in a retail environment in order to enhance the perceived customer experience. Furthermore, this is what eventually leads to creating customer value and what will differentiate one retailer from another. Additionally, since the degree of perceived customer experience affects patronage intentions and the share of wallet per customer, every possible method should be examined in order to improve this experience. In this study only one method is assessed, sampling of chocolate. The effect of sampling chocolate, which is expected to enhance the perception of customer experience, is studied using the following research question: Does sampling of chocolate increases the perceived customer experience? Customer experience is the result of the cognitive, affective and conative responses of a customer towards a retailer. Therefore, the sub questions focus on the effect of chocolate on these three specific constructs. 10

11 1.2.1 Sub questions The following sub questions are formulated in order to examine the general research question: 1. What is the effect of chocolate on cognitive responses? 2. What is the effect of chocolate on affective responses? 3. What is the effect of chocolate on conative responses? 1.7 Relevance of study The current Dutch food retailing market is characterized by the battle for consumers. In order to retain or even expand intrinsic market share, supermarkets have to ensure they provide the best service and the best products. Consumers are more critical than ever and pioneering in other markets is necessary for retailers to stay ahead. For example, the biggest Dutch supermarket Albert Heijn bought one of the biggest online providers of media and entertainment Bol.com. This contributes to achieving their goal of expanding their online market share. The knowledge from bol.com in the field of e-commerce makes it easier for Albert Heijn to provide convenient and high-end online shopping for daily groceries in then future. However, expanding in the online market is not the only way to protect from the heavy competition. Jumbo, another big Dutch retailer, is increasing their extrinsic market share by the take-over of C1000. These are only two examples of the dynamic and unpredictable battle between Dutch retailers. It can be said that the focus of food retailing moves towards factors apart from the core business of supermarkets, which is providing qualitative groceries and service to your customers. In combination with the current economic situation this lack of attention for the customers needs has resulted in stagnation of the amount which customers spent per shopping trip from 2010 to 2011 which is presented in Figure 2. 11

12 Figure 2 Amount spent per transactions in Dutch supermarkets over the last years (GFK.nl 2012 ¹) 19,47 19,52 20, , Creating excellent customer value is what distinct today s successful retailers from others (GFK.nl 2012²) today. Therefore, to detect whether the move of focus towards the web can be approved or whether there still lay opportunities inside the supermarket, this study examines the effect of chocolate on enhancing customer experience. If customer experience will be improved by offering something simple as chocolate, chocolate might serve as a secret weapon in the battle of the superior Dutch retailer in the near future. 1.8 Structure of the study The problem which gave rise to this study is formulated above. Besides, the three different constructs which determine (the perception of) customer experience are explained. In the next six chapters, the effect of chocolate on customer experience is stressed in detail. First, the problem will be supported by a theoretical framework in chapter two. Second, in chapter three the research is made more tangible in a research design. This explains both the design of the study and the method of performing the experiment and interpreting the results. Chapter four contains the results and the analysis which are the basis of chapter five, the conclusion. In addition, in chapter six several limitations are stressed and to complete the research, managerial implications are proposed in chapter seven. 12

13 2. Theoretical framework 2.1 Sampling food Sampling food in food retail environments The emotional and social responses to environmental stimuli are crucial in affecting purchase behaviour, as mentioned by Verhoef et al. (2009). Sampling food is a tool to influence this response. Hence, offering free food in supermarkets will build excitement in the store and stimulates buying (Levy and Weitz 2009). Moreover, tasting, seeing and smelling the product makes consumers more convinced of their attitudes and provide them stronger beliefs of the benefits of that product (Marks and Kamins 1988). Although Kotler (1973) claims that taste cannot directly be applied to atmosphere, Heiman et al. (2001) contradicts this statement. He states that demonstrations and sampling food have two effects: increasing the probability that a consumer will purchase a product; and increase the formation of goodwill of the consumer. This latter effect is of great importance to food retailers. It would mean that the mood of consumers in the supermarket can be influenced by offering free food samples. This would explain the reason food sampling is a tool already used in supermarkets (Interview Appendix B). However, earlier research provides little evidence about the formation of goodwill after receiving a sample. Explanations of the formation of goodwill after receiving a free food sample can be the reciprocity effect, people respond positive to favorable treatment (Fennis and Stroebe 2010); or the effect of eating on customers mood while shopping (Andrade 2005; Garg et al. 2007; Donovan et al. 1994) or it might be explained by physical responses of individuals to tasting and smelling food (O Doherty et al. 2000; Kringelbach et al. 2003; Pellegrino et al. 2010) Physical theory about food sampling The effect of tasting food on the emotional state of people has been studied in both the physical as the psychological field. Research in the physical field focuses on the unconscious 13

14 process which happens in one particular part of the brain. In addition, the part of the brain responsible for influencing human emotional states after tasting food is the orbitofrontal cortex (O Doherty et al. 2000; Kringelbach et al. 2003; Pellegrino et al. 2010). After tasting food, the pleasantness evoked by the specific food is evaluated in regions of the orbitofrontal cortex. This part of the orbitofrontal cortex indicates the amount of pleasure one perceives after eating (Kringelbach et al. 2003). In figure 3, the activated part of orbitofrontal cortex which correlates with pleasantness ratings, is indicated as the yellow spot in the left of the picture. Figure 3 Area of the orbitofrontal cortex which correlates with pleasantness ratings (Kringelbach et al. 2003) 14

15 Figure 4 An overview of the human brain The orbitofrontal cortex is part of the prefrontal cortex which is situated in the area of the brain right behind the eyes as can be seen in figure 4 and 5. It is connected to the amygdale and receives input of the following sensory stimuli: odor, taste, sound and touch (O Doherty et al. 2000). The orbitofrontal cortex is part of the total affective network which processes and controls emotional impulses. Hence, emotions and feelings of pleasure are evaluated in this part of the brain (Bechara et al. 2000; Kringelbach et al. 2003). In addition, affect is linked to ones internal collection of moods and emotions (Puccinelli et al. 2009) which are evaluated in the orbitofrontal cortex. Therefore, it can be stated that the orbitofrontal cortex is involved in controlling the affective responses of consumers. 15

16 Figure 5 The human brain, the amygdala and the prefrontal cortex (Neuralmodel.net 2012) Function of the orbitofrontal cortex The orbitofrontal cortex contains neurons that respond to the texture of fat in the mouth, scent, and to the sight of food, but the same as with the reward value of taste, these neurons only respond to the present hunger of the person (Kringelbach et al. 2003). Moreover, the orbitofrontal cortex is only activated if a person is hungry and deprived from food for several hours. In contrast, when a person is fed to satiety with a specific food the neural response to the taste, sight, scent and texture to this food will decrease since the orbitofrontal cortex is not activated. This effect is called the sensory-specific satiety (Kringelbach et al. 2003; Rolls et al. 1981). This phenomenon is the factor in control of the regulation of food intake of all people (O Doherty et al. 2000). Due to this, consumers who have eaten multiple pieces of one food sample would perceive less pleasantness and reward value of that particular food than other consumers who had less or had not eaten the food sample. However, eating food samples to satiety in a supermarket environment is not very likely to occur. Therefore the statement of Wadhwa et al. (2006) supports retailers in offering food samples, claiming that one bite of food can actually lead to intensification of hunger. Intensification of hunger after 16

17 one bite could lead to higher interest in the particular product or in products from the assortment in general Psychological theory about food sampling In contrast, the effect of tasting food on the human emotional state has also been examined from a psychological point of view. However from this view people are already in a certain emotional state and eating can contribute to either preserve this emotional state or improve their state. Since the emotional state of shoppers can predict shopping behavior according to Donovan et al. (1994), it is important to facilitate food which can positively influence the mood of customers. However, whether a person perceives food to be either mood lifting or mood threatening depends on the person s affective state at that time (Garg et al. 2007). For happy people healthy food is mood enhancing, while sad people want to navigate away from their negative emotional state by eating more hedonic products as fattening snacks (Tice et al. 2001). Moreover, only the presence of food is an important factor in psychological studies as well. Providing free food can be perceived as a favourable treatment. According to the principle of reciprocity (Fennis and Stroebe 2010), positive responses follow a favorable treatment. Besides the principle of reciprocity, sampling food in general contains a positive action of the supermarket. Moreover, this action might contribute to consumers feelings and perception of the store characteristics Food sampling as a tool to evoke both cognitive and affective responses Both affective and cognitive positive responses are evoked by sampling of food, taking into account the positive effect of sampling food on emotional states of pleasure (Baker et al. 1992); the strength of attitudes (Marks and Kamins 1988); and the acceptance of messages (Smith and Swinyard 1983). Since affective responses cause an increased willingness to buy (Inman et al. 2009; Kaltcheva and Weitz 2006; Donovan et al. 1994; Baker et al. 1992) and leads to more positive evaluations of the store (Puccinelli et al. 2009) it is of great 17

18 significance to discover what influences this affective response of the consumer. At the same time it is important to determine the factors that influence cognitive responses. Since cognitive responses ultimately increase involvement (Fennis and Stroebe 2010) which results in more word of mouth, liking of the store, and future shopping intentions (Puccinelli 2009) Effectiveness of food sampling in retail environments Improving the total evaluation of the supermarket is eventually each retailer s aspiration in order to improve customer experience. What the influence of the sample is on the total evaluation of the supermarket is examined in the following experiment. Goal of this research is to help supermarkets to (re)evaluate the effectiveness of sampling food and use sampling effectively in order to create the ultimate customer experience. The sum of the customers cognitive, affective and the conative response gives insight in whether or not the retailer has succeeded to create this outstanding customer experience, as shown in figure 6. Figure 6 Cognitive, affective and conative customer responses affect customer experience Cognitive response Affective response Conative response Customer experience 2.2 Tasting food Informational and affective component of consumption Ultimately, the goal of sampling food is to evoke positive responses from customers. In addition, this positive response is partly based on conscious and unconscious consideration of the food sample. Shiv and Nowlis (2004) claim that the environment, in which the sampled 18

19 product is tasted, plays an important role in the dominance of conscious or unconsciousness decisions of consumption. They separate an informational- and an affective component of consumption. Of which the informational component is a composition of objective features related to aspects such as the quality of the tasting experience. On the other hand, the affective component is a composition of the subjective, more emotional, reactions to the experience. According to Shiv and Nowlis (2004), distraction will lead to an increased impact of the affective component. This would mean that sampling food in a crowded environment will have a different effect than sampling in a less crowded environment. Since supermarkets are generally crowded, mostly the affective component of consumption overrules the informational component in this setting. Therefore, choices made in supermarkets seem to be more often based on emotion rather than objective features of a product Type of food However, according to Mishra and Mishra (2010) it is not the distraction that influences the behavior or preference in a supermarket, it is the type of food consumed. Less impulsive choices are made when people had eaten food with a high level of serotonin the night before. In other words, Mishra and Mishra (2010) claim that it is consumers everyday diet which influences the fact if they can be easily influenced by offering them a food sample. Steinberg and Yalch (1978) found an interesting difference between obese and non-obese consumers in their reactions towards food. Moreover, appetite of normal weigh consumers would be satisfied when consuming food, while the need of obese consumers for consuming more food increases after eating. An explanation for this is that internal hunger cues are less important than taste for obese people. They tend to consume more of a good tasting product, which motivates them to show more interest in this good. Experiencing the taste of a product by trying a food sample could therefore lead obese to show more interest in buying that particular product. 19

20 2.2.3 Taste and smell Subsequently, the orbitofrontal cortex can also be activated by odors (Kringelbach et al. 2003; O Doherty 2000). Hence, tasting of the sample is not even necessary in order to affect responses in a retail environment. Kotler (1973) indicates that smell is one of the main olfactory dimensions of atmosphere; therefore smell can influence ones perception about the environment. In addition, this effect is explained by the fact that smell is more intensely and intimately linked to our moods and emotional life than any of our other sensory experiences (Herz 2007). Therefore, all odors which enter your nose can unconsciously influence the current emotional state of consumers. However, if an odor will enter your nose depends on the awareness and appreciation of the scent. Moreover, the awareness and appreciation of the scent increases the human capability to smell (Herz 2007). Sampling food in a supermarket is already expected to enhance awareness since the sampling situation differs from the normal situation without sampling. Initially, smelling food starts as an objective process. However, the odor is immediately marked as a good or bad scent by the instinctive, hardwired predisposition of humans after entering the nose (Herz 2007). Aromas which people like elicit pleasant moods and have positive effects, while odors people dislike tend to evoke negative moods. Positive emotions trigger people to approach the smell, while negative emotions cause people to avoid it (Herz 2007). What odor is perceived as positive and which as negative, depends on the characteristics of the product. Unfamiliar odors will be more readily disliked than liked. Whereas a sweet odor is initially liked since it signals carbohydrates. This effect results from human evolution since carbohydrates are necessary to survive in a food scarce environment (Herz 2007). This is also the reason why no other species are as driven by sugar as humans. 20

21 2.2.4 Chocolate as a treat In addition, the drive to eat certain food is detectable with people who crave to eat sweets or salty snacks. Hence, craving can be explained as an intense desire to eat a particular food (Herz 2007). Women and men differ in type of food they crave for. While 60% of women crave for sweet food, with chocolate high on that list, 60% of men crave for savory food (Herz 2007). Apart from this gender differences in preference for cravings, eating sweet food is perceived as pleasurable by both men as women. This is both explained by nature, human evolution, as by nurture since most people have initially learned that the taste and smell of sweets are good because it is tasty food (Herz 2007). 2.3 Customer Experience Customer experience can be influenced from the moment a customer enters the store until he or she checks out (CBL.nl¹). Based on both the background of chocolate and of sampling it is expected that sampling chocolate can positively influence this customers experience which will increase the customer value. Customer experience is based on five different responses towards the retailer as mentioned by Verhoef et al. (2009). However, chocolate will possibly not influence all these responses in a positive manner. For instance, social responses are influenced by other customers and the sales persons inside a supermarket (Verhoef et al. 2009). Therefore, the social aspect is excluded from this study since offering chocolate is not expected to affect social responses. The remaining four constructs of affective, cognitive, emotional, and physical responses are expected to be directly influenced by chocolate. Since the dictionary explains affect as being a feeling or emotion, emotion is considered to be a part of the affective response. Physical responses have a different designation in this study; they are called conative responses, but enclose exactly the same elements as the responses from the study of Verhoef et al. (2009). This leaves three constructs of customer experience to be influenced by the sampling of chocolate: cognitive, affective and conative response. 21

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