Chain Attributes and Customer Experience Impact on Coffee Shop Patronage

The Criterion Variables

The previously-stated study hypotheses are:

• There is a difference with respect to the products and services that are offered by independent coffee retail shops, and their retail chain coffee shops
• Customers perceive Independent retail coffee shops differently from the retail chain coffee shops.

One may formulate even more specific hypotheses as follows:

1. Patronage incidence itself correlates better with relaxation and socialisation needs than functional beverage and food offerings.
2. Preference for independents versus coffee chains is a function of socio-demographic or customer factors. On the other hand, coffee chains bear an inherent advantage in point of beverage variety.
3. Patronage frequency and other characteristics differ meaningfully in respect of customer characteristics, expectations and image perceptions, including ambience.
4. The customer satisfaction implied by patronage intentions correlates better with establishment image and service rather than product quality and affordability.

Given these objectives and the fact that the questionnaire consists solely of categorical or scale variables, data analysis consists chiefly of:

Descriptive cross-tabulations

• The t test for significance of differences in means, the chi-square and Kolmogorov-Smirnoff tests for differences of frequency distributions;
• Several correlation runs among the items comprising each factor (e.g. question 7 that rates the importance of 19 product quality, establishment image, service and ambience variables);
• The ANOVA for variables that are uncorrelated;
• The multivariate analysis of variance (MANOVA) for simultaneously testing the differences of means among items that are correlated;
• Factor analysis to identify underlying dimensions across several ‘factors’ in the study that may then be re-run in MANOVA’s, discriminant analysis, or multivariate analysis regression. The rationale in this case is to identify a smaller set of consumer dimensions that impact significantly on patronage behaviour.

Principal Findings – Chains versus Independents

All told, the survey yielded a net count of 464 respondents. Slightly more than half (57.1%) patronised chain coffee shops while the balance of 43% were found in independent establishments at the time of fieldwork. In this section of the analysis, we posit coffee shop type preference as the dependent variable (DV) and the influencing or independent variables (IV) as ‘real’ outlet type preference (question 12), gender, age group, educational attainment, employment status, income class, and being a native Australian or of immigrant stock.

In response to question 12, type of coffee shop really preferred (Table 1 below), over three-fourths of those interviewed at chain outlets affirmed that they really preferred this type of coffee shop while less than half of independent coffee shop patrons were confident enough about their choice to say they routinely patronised this establishment type.

Table 1: Patronage Location at Time of Survey versus Type Preferred (Q. 12)

Table 2: Chi Square Result for Coffee Shop Type Preference

The chi square result for the above difference of frequency distributions between those who are assumed to prefer chain and independent coffee shops by virtue of where they had been found at the time of the survey reveals a very high Pearson chi square value of 178.9. At two degrees of freedom (df) – given the three possible answers to question 12 – that Pearson value bears a significance statistic of p < 0.00001. Since this means that such a difference in frequency distributions can happen by chance less than once in 100,000 resurvey tries, one rejects the null hypothesis inherent in the above cross-tabulation (that there is no association between the two variables) and concludes with a great degree of confidence that question 12 does discriminate across the two coffee shop type segments. In other words, coffee shop type preference is distinctive one from the other, albeit one notes the reticence with which those interviewed in independent coffee shops admitted this type was their favourite.

More usefully, there is some evidence that occupation profiles differ across the two patronage segments since the chi square tests (see Table 4 overleaf) reveal a Pearson value that, at 11.6 and a df of 5, bears a significance statistic of p < 0.05. Since this means that the youthful skew of chain coffee shops (more students) and the greater number of the self-employed among independent coffee-serving outlets (Table 3) could have occurred by chance less than 5 times in a hundred measurement attempts (the minimum acceptable for empirical research), one rejects the null hypothesis and accepts the alternative that there is an association between the IV of occupation and the DV of type patronage.

Table 3: Crosstabulation of Occupation and Coffee Shop Type Preference

Table 4: Chi Square Tests for Occupation and Coffee Shop Type Preference

On the other hand, there is no reason to expect that gender discriminates coffee shop type preference. Since tables 5 and 6 (below) reveal an approximately similar frequency distribution and the significance tests reveal probabilities approximately like those achieved by a coin-toss experiment, one accepts the null hypothesis and concludes that there is no association between the two variables.

Table 5: Coffee Shop Type Preference by Gender

Table 6:

Similarly, one finds that coffee shop type preference does not appreciably differ by age group (Tables 7 and 8), educational attainment (Tables 9 and 10), income (Tables 11 and 12), and ethnicity (Tables 13 and 14).

Table 7: Coffee Shop Type Preferred and Age Cohort

Table 8: Chi Square Tests for Coffee Shop Type and Age Group

Table 9: Crosstabulation of Coffee Shop Type Preference and Educational Attainment

Table 10: Crosstabulation of Income and Coffee Type Preference

Table 11: Chi Square Tests for Income and Coffee Shop Type Preference

Table 12: Crosstabulation of Coffee Shop Type Preference and Ethnicity

Table 13: Chi Square Tests for Coffee Shop Type Preference and Ethnicity

Satisfaction Ratings

A third step after testing for association between coffee shop type preference on one hand, and consumer characteristics as well as satisfaction ratings, on the other hand, is to assess mean ratings for self-assessed patronage loyalty (question 11). The results (tables 14 and 15 below) show, first of all, that those found at independent coffee outlets are always marginally more loyal on each of the five items comprising the predicted loyalty and repeat patronage factor. They are somewhat more likely to claim that they would: engage in favourable word-of-mouth, “recommend this coffee outlet to someone who seeks my advice,” perennially make the coffee outlet in question their first choice, be concerned about the success of that coffee outlet and, in all other ways, be a loyal customer.

However, these marginal differences between chain and independent outlet patrons are not statistically significant. The computed F values for Levene’s test for equality of variances are too low to meet the even the p < 0.05 minimum hurdle, suggesting that the homogenous-variance assumption that is basic to the t test does not hold. Regardless of which variance equality assumption is taken, the significance statistics are too high (Table 15) and one cannot reject the implied null hypothesis. Chain and independent coffee shop patrons do not differ materially on their acid test of customer satisfaction: predicted loyalty.

This is not altogether strange since location at the time of the survey is not incidental but very likely true patronage preference. In that case, coffee shop habitués evince very much the same satisfaction and loyalty indicators that car owners do. No matter the objective differences in their vehicles, those who drive popular models such as the Holden Cruze CDX, Hyundai Getz, Mazda 3 Neo, Toyota Hilux SR5, Subaru Forester, Nissan Navara, Toyota Corolla Ascent, Mitsubishi Lancer ES, Honda CR-V Wagon 4dr 4×4 2.4i, or the Suzuki Swift Hatchback are generally very loyal to their makes and models, having to justify their ‘investment’ in self-image even to themselves.

Table 14: Mean Ratings for Self-Assessed Loyalty by Type of Coffee Shop Patronised (Q11)

Table 15: Significance Analysis for Independent Samples T Test , Self-Assessed Patronage Loyalty and Coffee Shop Type Patronised

1. Relaxation and Socialisation Needs versus Functional Beverage And Food Offerings.
2. On Coffee Chains Bearing Inherent Advantages in Point of Beverage Variety.
3. Patronage Frequency and Other Characteristics Differing Meaningfully in Respect of Customer Characteristics, Expectations.
4. Image Perceptions, Including Ambience.
5. The Relationship amongst Customer Satisfaction, Establishment Image, Service, Product Quality and Affordability.