Main Topic: When right is wrong: Chinese customer differentiation through service

Hosts: James Stanworth and Clyde Warden

Our observations showed that the market was dominated by three large hypermarket retailers: Carrefour, RT-Mart and Tesco.  When we shopped in store the differences between the formats was also clear.  Carrefour, in partnership with local conglomerate President Enterprises, focused on aggressive promotions with a scattering of foreign products.  RT-Mart, originally locally developed had a disorganized feeling, with heavy price promotion, a focus on fresh and a service staff promoting products.  Tesco, had modern, Western feel with friendly staff to guide customers around the store.  

This all begged the question as to Chinese customers' reactions to these visibly different approaches. We used an existing measure of retail service quality (From Prof. Dabholkar ) and looked at the impact of service quality on referral intention (see Reicheld's work on this ). Referral intention is often considered by be an observable behavioral intention that reflects positive/negatively on service quality provided.  Since services are often selected through word-of-mouth this factor can be considered critical for retention and loyalty.

Our results showed that whilst customers rated the quality of service high in Tesco referral intention was suprisingly lower than the other stores.  It was markedly so in the case of RT-Mart i.e., comparatively low perceptions of quality but referral intention was higher than the other stores.  We believed that RT-Mart was better able to tune into customers' local preferences than the other stores. 

The Show:

Multinational managers are challenged with the right is wrong mindset in an exotic setting.

Length: 34 minutes. Download MP3 15.71MB (Right click->Save As).


Consumer CamConsumerCam:

Vid. 1) Here is an example of service for weighing vegis at Carrefour.

Show Links:

Bottom Line:

  • Tesco is service orientated and stock more exotic products, they also offer spacious parking lot that is operated 24hrs.
  • RT-Mart is more sales promotion orientated and focuses on domestic products.
  • The major hypermarket shoppers are aged between 30-45.
  • The perception of quality of Tesco is reasonably higher compared to RT-Mart and Carrefour.
  • The willingness to refer by consumers was the exact opposite, low for Tesco and higher for RT-Mart and Carrefour.
  • The willingness to refer for RT-Mart and Carrefour is influenced by the relatedness factor that is enjoyed by the consumers. E.g. Demonstrators high interaction with shoppers.
  • Carrefour presents a central position in the retail setting.
  • Multinational managers are challenged with right is wrong mindset in an exotic setting.

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