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CHAPTER 1

THE PROBLEM AND ITS SETTINGS

Background of the Study

In the worlds today, building rice retailing business is fascinating. This

kind of business is also earning profit and this profit earning money. Likewise,

this business is dealing with customers want and often become a problem.

We have this thing called loyalty. If there is a customer loyalty it means that

customer satisfaction is present. And if the said terms are applied, it signifies

that your business is working well.

Customer satisfaction is a critical but not sufficient antecedent of

customer loyalty(Dolnicar, Coltman, and Sharma 2015; Kumar, Pozza, and

Ganesh 2013; Taplin 2013). Customer’s satisfaction provides countless

advantages for the company; in fact higher levels ofCustomer’s satisfaction

lead to more loyalty. The satisfied customers will more likely talk about

theirexperiences to others as well. This point has had special importance

particularly in eastern cultures thatthe social life has been formed in a way

that social communication with other community members ismore. Customer’s

satisfaction is regarded as a key factor in forming customers’ immediate

purchasingtendency. The importance of this point is to the extent that

customer’s satisfaction is the most importantfactor in the models of quality

such as European Foundation for Quality Management (EFQM).One of the

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most important structures related to the customer’s satisfaction is commitment

(Ouyang,2010);

Also in the Philippines there are many who manage small businesses

like rice retailing. The common problem of the business that found is the

management of liability. Having many debts is one factor that can affect to the

stability of a business (J.C. 2001).

In Panabo City as per interview of LeidylenRogon a rice retailer of Myffi

store. According to her, they even have a medium of customers who care

loyal to them. However, they have also encountered problems about dealing

with customers wants. And bad feedback coming from the is cannot be

avoided. In connection as a rice retailer ensuring the quality of rice that you

sell leads to customers loyalty.

Statement of the Problem

The objective of this study is to determine the significant effect of customers

satisfaction among Rice Retailers in PanaboCity. Precisely, to look up answer

to the following questions.

1. What is the level of the Customers Satisfaction in Panabo City in terms of:

1.1 Reliability

1.2 Tangibility

1.3 Responsiveness

1.4 Assurance
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2. What is the level of Rice Retailers among Rice Retailers in Panabo City?

3. Is there any significant effect when it comes to Customers satisfaction

among Rice Retailers in Panabo City?

Hypotheses

The null hypothesis was tested at 0.05 level of significance which states

that there is significant relationship between customer satisfactionamong rice

retailers in Panabo City.

Theoretical and Conceptual Framework

This study is anchored on the theory of Sulieman (2011) found that

reliability, tangibility, responsiveness and assurance have significant and

positive relationship with customer satisfaction. Meanwhile empathy was

found to have a significant and negative effect on customer satisfaction.

In other words while considering levels of performance in setting

customer, service objectives, service companies need to take into account the

important of customer satisfaction variables such as reliability,

responsiveness, assurance, and tangibility.

Shown in figure 1 the main variable, which is the customer satisfaction and

rice retailers which refers to the business in which they see the good quality of

their products.
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Significance of the Study

This study is significant for the reason that it would provide information

and can be beneficial to the following beneficiaries:

Owners. The result of the research will enlighten their mind on how

service qualities influence the customer’s loyalty of rice retailers. This will also

serve as a guide to their business in terms of their decision-making.

Researchers. The result of this study may enhance our knowledge to

rice retailers and customers satisfaction of rice retailers.

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MAIN VARIABLE

CUSTOMER
SATISFACTION
 Reliability
 Tangibility
 Responsiveness
 Assurance

Figure [Link] paradigm showing the variables of the study.

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Definition of Terms

For improved understanding of the study, the following words are

defined conceptually and operationally:

Customer Satisfaction. Customer’s satisfaction refers to the ratio that

customer is satisfied with and happy of his/her online purchase experience.

The companies are eagerly seeking value in direct evaluation and tracking

customers’ satisfaction as an important strategic success indicator.

Customer’s satisfaction is considered as an important factor in the success of

every organization and its continuation at the market position. Generally, it is

argued that if the customers are satisfied with the specific products and

services they are using, hence it is likely that they repeat repurchasing and

they might tend to develop the path. Norouzi and Nahavandi. (2016).

Rice Retailer. Retailer awareness is conceptualized as a “consumer’s

ability torecognize or recall that the retailer is a member of certain retailer

category” (Pappu and Quester, 2006, p. 320).Retailer perceived quality is

conceptualized as the “perceptionof the quality of the retailer as well as the

(perception of) quality ofproducts (goods or services) offered by retailers”

(PappuandQuester, 2006, p. 320).Retailing has changed dramatically in the

last two decadesdue to the advent of the online channel and ongoing

digitalization. In specific retail markets, the online channel has becomevery

dominant and can be considered a disruptive development (Christensen and

Raynor 2003).
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CHAPTER 2

REVIEW RELATED LITERATURE

This section includes the various concepts, theories, ideas from

different authors and reading materials that will provide a relevant framework

of the study.

Customer Satisfaction

As cited, by Hasemark and Albinsson (2004) cited in Singh (2006:1)

“satisfaction is an overall attitude towards a product provider or an emotional

reaction to the difference between what customers expect and what they

actually receive regarding the fulfillment of a need”.Kotler (2000); Hoyer

&MacInnis (2001) also define satisfaction as a person’s feelings of pleasure,

excitement, delight or disappointment which results from comparing a

products perceived performance to his or her expectations. Satisfaction

means the contentment one feels when one has fulfilled a desire, need or

expectation. Furthermore, Customer satisfaction can be a measure of how

happy customers are with the services and products of a supermarket.

Keeping customers happy is of tremendous benefit to companies. Satisfied

customers are more likely to stay loyal, consume more and are more likely to

recommend their friends to the business.

Moreover, Ciavolino & Dahlgaard (2007) suggest that “customer

satisfaction can be defined as the overall evaluation of the service

performances or utilization.”Customer satisfaction can also be measured

using some questions like, considering all your experience of company X, how

satisfied are you in general on a scale from completely satisfied to

dissatisfied? Another question could be to what degree did company X fulfill

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your expectations? On a scale of much less than expected to much more than

expected?

In addition, Hoyer &MacInnis (2001)satisfaction can be associated with

feelings of acceptance, relief, excitement and delight. Furthermore, Zairi

(2000) says that many studies have viewed the impact of customer

satisfaction on repeat purchase, loyalty and retention and they have all

echoed concern that customers who are satisfied are most likely to share their

experiences with other people with regards to about five to six people.

Additionally, this research is supported by La Barbera&Mazarsky

(1983) who also imply that satisfaction influences repurchase intentions

whereas dissatisfaction is seen as a primary reason for customer defection or

discontinuation of purchase.

As mentioned, by Hoyer & MacInnis (2001) also say that dissatisfied

customers can choose to discontinue purchasing the goods or services and

engage in negative word of mouth.

Since a lot of research has been performed in the field of customer

satisfaction, many definitions have been formulated as to what Customer

satisfaction entails. However, for the purpose of this paper while defining

satisfaction, we refer to the customer’s satisfaction with the stores which they

visit often, with respect to ICA Supermarket Atterdags, ICA Nära and Coop

Forum supermarkets/ hypermarket.

Moreover, Janiszewski and Osselaer (2000)Over the past decade, a

new set of models has been developed to explain how people learn,

remember, and react to stimuli. From these authors we can learn that LMS

learning rule occurs when “the activation of a set of sensory cues is passed
 9

on directly to a layer of output units, which in turn map onto a response. After

each response, feedback is received regarding the experienced outcome (e.g.

what really happened) for that set of cues. The system then adjusts the

connection weights between the sensory cues and the output units so that the

discrepancy between expected outcome and experienced outcome for each

set of sensory cues is reduced.” Applying this to our setting means that a

change in customer satisfaction will over time be reflected in perceived

relative attractiveness. Whereas an increase will reinforce the relationship, a

reduction may create switching [Link] addition Johnson et al.

(2001).Customer satisfaction is operationalized in accordance with the

national customer satisfaction [Link] means continuous

improvement. Continuous improvement is the only way that keeps

thecustomer satisfied and loyal. Norouzi and Nahavandi.(2016).

As mentioned by Oliver (1981) introduced the expectancy-

disconfirmation model for studies of customer satisfaction in the retail and

service industry. Expectancy-disconfirmation theory posits that customers

form their satisfactionwith a target product or service as a result of subjective

(or direct) comparisons between their expectations and perceptions.

Customers are directly asked to provide their perceptions or evaluations of the

comparisons, using a ‘‘worse than/better than expected’’ scale. The resulting

perceptions are conceptualized as a psychological construct called

‘‘subjective disconfirmation’’. The expectancy-disconfirmation model asserts

that customer satisfaction is a direct function of subjective disconfirmation.

That is, the size and direction of disconfirmation determine, in part, the level of

satisfaction.
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Furthermore (Churchill and Surprenant, 1982).When ‘‘confirmation’’

occurs, customers are believed to remain neither satisfied nor dissatisfied.

Both expectations and perceptions also have been found to influence

customer satisfaction and subjective disconfirmation under various

circumstances.

As cited by Horstmann (1998)customer satisfaction with the service

experience will lead to higher level of customer loyalty. States that there is a

strong and positive relationship between customer satisfactions. A satisfied

customer is six times more likely to repurchase a product and share his

experience with five or six other people (Grönroos, 2000; Zairi, 2000); further

unsatisfied customer can banish more business from the organization than

ten highly satisfied customers do (Mohsan, 2011). With higher customer

satisfaction the level of loyalty increases. Tee et al. (2012) found a significant

positive relationship between customer satisfaction and customer loyalty.

In addition Fornell et al. (1996).Customer satisfaction is the central

mediator in the model and is measured as a latent variable with questions

asking the consumer’s overall cumulative satisfaction with their experience

the confirmation or disconfirmation (either positive or negative) of prior

expectations produced by the experience, and a comparison of the

experience to an imagined ideal product/service offering.

Moreover Daniel (2001: P:22) Customer satisfaction was defined by

many researchers and scholars sees that satisfaction is the impression of

reward received by the customer after making the sacrifice of purchasing a

product.
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As stated by Zeithaml&Bitner (2003), satisfaction is the customer's

evaluation of a product or service in terms of whether the product or service

meet customer's needs and expectations. A customer will be satisfied if the

product or service will meet his or her expectations

Reliability.

As cited by Seung [Link] (2013) in the characteristics the reliability is

represented as a time-based quality concept and the most important quality

characteristics in terms of customer satisfaction. The reliability corresponds

directly to the service outcome and is mentioned as the most important

dimensions of assessing customer satisfaction. The value of services

depends on satisfaction reliability that is identified by satisfaction derived from

the relationships between customer needs and service [Link] reliability

can considered as mode and effects that can be occurred at each step of the

service process. Reliability the ability to perform the promised service

dependably and accurately.

Sulieman (2011) found that reliability, tangibility, responsiveness and

assurance have significant and positive relationship with customer

satisfaction. Reliability the ability to deliver the promised service.

Fitzsimonns (2006) stated that in dimensions of customer satisfaction

in reliability represents the ability of perform dependably and accurately. It

also means satisfaction carry out on time, in the same way and without any

error every time. Tandard at all time, how the organization handle customer

satisfaction problems performing the right services for the first time.
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Iberahimet. Al (2015) reliability refers to the ability to deliver expected

standard at all time, now the organization handle customer satisfaction

problem performing right services for the right time. It is concern with the

ability of a service provides service on time according to the satisfactions of

customers.

(Parasuraman et al., 1988) Reliability the service provider’s ability to

provide accurate and dependable services.

Tangibility.

Moreover, a study in rice retailers in India (Khan &Tabassum, 2012)

has showed that factors such as the environment (tangibility) was the most

important factor for customer's satisfaction.

Nankervis (1995) the physical evidence of front office staff is including

a personality and appearance of personnel, tools, and equipment used to

provide the service.

(Parasuraman et al., 1988) Tangibles the physical surroundings

represented by objects (for example, interior design) and subjects (for

example, the appearance of employees).Reliability the service provider’s

ability to provide accurate and dependable services. Tangibility the

appearance of physical artefacts and staff members connected with the

service (accommodation, equipment, staff uniforms, and so on).

As cited by Smith and Ennew (2001) nevertheless, there are studies

that a different opinion on the importance of tangibility dimension in customer

satisfaction. Outlined an interesting aspect in his research towards the SQ in

higher education. He highlighted that there is difficult aspect in the choice of

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satisfaction perception of customer between the affective indignation and the

technical functionality.

Na, (2010) Tangibles The ambience and general appearance of the

physical facilities, rooms, restaurants, equipment, personnel, and

communication materials.

Also Mahiah et al. (2006) suggest that tangibility, assurance, and

responsiveness can increase customer satisfaction towards services rendered

by Human Resource Department.

Responsiveness.

Fianagan(2009) stated that responsiveness is giving customers what

they want, when they want, a price that matches their expectation. Customers

are prepared to pay more for a product or service delivered. Whatever

business, responsiveness is like umbrella covering all organizational activities.

This is so critical since it highlights your brand in positive light. Every message

from customer every query and every communiqués that comes from the

customer would ‘speak’ about they feel about the company, it is imperative for

a company therefore to ensure that notices the feeling and attitude of

customer and respond to them appropriately. Responsiveness a sincere

willingness to assist guests and provide timely service.

Moreover, the result of Ravichandran et al (2010) indicates

responsiveness is the only significant dimension of service quality that affects

the satisfaction of customers positively.

(Parasuraman et al., 1988) Responsiveness the readiness of staff

members to help in a pleasant and effective way. Responsiveness a firm’s

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willingness to assist its customers by providing fast and efficient service

performances.

Responsiveness was found to be the most important determining factor

in explaining spa customers' positive emotions in China, followed by reliability,

empathy and tangibility (Lo, Wu, & Tsai, 2015).

Assurance.

Furthermore Mahiah et al. (2006) suggest that assurance, can increase

customer satisfaction towards services rendered by human resource

department.

Moreover Hasan et al. (2008) for quality assurance an institution must

train its staff members in a way that may create a sense of facilitation by

means of coordination, cooperation, compassion. In other words while

considering levels of performance in setting customer, service objectives,

service companies need to take into account the important of customer

satisfaction variables such as reliability, responsiveness, assurance, and

tangibility. Assurance knowledge and courtesy of all employees and their

ability to inspire trust and confidence in hotel guests.

(Parasuraman et al., 1988). Assurance diverse features that provide

confidence to customers (such as the firm’s specific service knowledge, polite

and trustworthy behavior of employees).

Wilson (2006) explained that assurance of customer satisfaction

verifies that any customer offering, regardless if it is new or achieved is

produced and offered with the highest standards.

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Alexander (2006) stated that assurance of customer satisfaction

demands degree of detail in order to be fully implemented at every step

planning could include investigation into quality of rice used in manufacturing.

Assurance was the fourth factor also (feel secure from danger or risk)

and contributed to rice retailers customers’ satisfaction at the percentage of

6.01%. Assurance is related to knowledge and courtesy of employees and

their ability to convey trust and confidence (Parasuraman, Zeithaml, & Berry,

1988).

.
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CHAPTER 3

METHOD

This chapter presents the research design, the research subject, the

research instrument, the research problem and the statistical treatment of

data.

Research Design

The method that is applied in this study is the descriptive correlation

method. This procedure determines the relationships among two or more

variables and seeks to examine the level of which one or more relationships

of some type exist.

Frankel (2003) and cited by Delos Reyes, [Link] (2010) this method

determines relationship among two or more variables and seek to investigate

the extent which one or more relationship type or exist. It is descriptive for a

reason that the data were presented in qualitative description in rice retailers.

It is also correlation method research because the main variable, rice retailers

and customers satisfaction.

Research Subject

This study focuses on the rice retailers and customer satisfaction in Panabo

City. Specifically, this is addressed to the customers who are buying at the

rice retailers. There is total of 10 respondents who answer the questionnaires.

The researchers used quota sampling technique.

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Table 1

Distribution of Respondents

Retail stores Number of Respondents

Rice retailing, Panabo 10

Total 10

Research Instrument

The researchers used survey and utilized questionnaire as the data gathering

instrument on customers satisfaction among rice retailers in Panabo City.

The questionnaire is designed to solicit feedbacks on customer

satisfaction. It was presented to the adviser and panel members for the

corrections and suggestions. One set of questionnaire were utilized in data

gathering.

The following scales used for the main variable.

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Scale Descriptive Interpretation

4.21-5 Very high This means that the level

of satisfaction of

customers is very

satisfactory .
3.21-4.20 High This means that the level

of satisfaction of

customer is satisfactory.
2.61-3.40 moderate This means that the level

of satisfaction of

customers is fair

1.81-1.80 Low This means that the level

of satisfaction of

customers is

unsatisfactory.
1.00-1.49 Poor This means that the level

of satisfaction of

customers is very

unsatisfactory.

Research Process

The researchers used the following steps in gathering of data.

Permission to conduct [Link] of permission signed by the research

teacher and was sent to the head of rice retailing store.

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Construction of [Link] researchers constructed one set of

questionnaire to elicit the data needed for the study.

Administrative of [Link] researchers administered the

questionnaire personally to the respondent.

Collation of Responses and scoring of [Link] researchers tallied the

responses statistically processed and interpreted.

Statistical Treatment of the data

Weighted mean. This was used to determine the level of customers

satisfaction in terms of reliability, tangibility, responsiveness and assurance.

Mean. This was used to determine the level of customer satisfaction.

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