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Master
Thesis
What drives enrolment in a coalition loyalty program?
A conjoint approach
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Preface
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Table of Contents
Executive summary .................................................................................................................. 1
Chapter 1: Introduction ...................................................................................................... 2
Chapter 2: Literature Review ............................................................................................ 9
Chapter 3: Hypotheses Development............................................................................... 26
Chapter 4 Methodology ................................................................................................... 33
Chapter 5: Research Analysis and Results .......................................................................... 41
Chapter 6: Discussion........................................................................................................ 52
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Chapter 7: Conclusion, Implications, Limitations and Future Research Directions .. 57
References ............................................................................................................................... 65
Appendices .............................................................................................................................. 70
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Executive summary
to identify and analyze the drivers
of coalition LP enrolment
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Chapter 1: Introduction
1.1 General Introduction
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1.2 Research Motivation
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1.3 Problem Statement and Subsequent Research Questions
What factors determine enrolment in a coalition LP ?
1.4 Contribution
1.4.1 Academic Contribution
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1.4.2 Practical Contribution
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1.5 Structure
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Chapter 2: Literature Review
2.1 Origin of Loyalty Programs
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2.2 LP Types
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2.3 Coalition LP Benefits for Customers
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2.4 Introduction to Enrolment Drivers
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2.4.1 Rewards: Economic Benefits and Non-Economic Benefits
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2.4.1.1 Evaluating Rewards
cash value
redemption choice
aspirational value
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2.4.2 Program Design
Number of program providers
Program convenience
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Program relevance
Participation effort
Program duration
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2.4.3 Idiosyncratic Factors
Purchase frequency
Number of memberships in other LPs
2.4.4 Inhibiting Factors
economic costs non-economic costs
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Economic costs/participation costs
Privacyissues
2.5 Excluded Factors
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2.6 Factors Crucial to Coalition LP Enrolment
aspirational value
redemption range
convenien ce of a program relevance
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number of retailers
combined-currency payment
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Chapter 3: Hypotheses Development
redemption choice aspirational value convenience of the
program relevance of the program combined-currency payment
3.1 Redemption Choice
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H1
3.2 Aspirational Value
H2
3.3 Convenience
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H3
3.4 Combined-Currency Payment
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H4
3.5 Relevance
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H5
3.6 Number of Participating Companies
H6
3.7 Attitude
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H7
3.8 Purchase Behaviour
H8
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Chapter 4 Methodology
4.1 Research Design
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4.2 Conjoint Analysis Process
Conjoint analysis procedure Current study
firststep
second step
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step 3
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step 4
Scenario 6
step 5
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step 6
4.3 Questionnaire Design
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4.4 Questionnaire distribution
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Chapter 5: Research Analysis and Results
5.1 Introduction
5.2 Sample Characteristics
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5.3 Conjoint Procedure
5.3.1 Detecting and Removing Outliers
5.3.2 Conjoint Analysis
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5.3.3 Accuracy of the Model
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Value Sig.
Pearson's R ,986 ,000
Kendall's tau ,786 ,003
Kendall's tau for Holdouts 1,000 .
Value Sig.
Pearson's R ,987 ,000
Kendall's tau ,786 ,003
Kendall's tau for Holdouts 1,000 .
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5.3.4 Utilities Values and Average Importance Values
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Attribute Utility low level Utility high level Average OverallImportance Rank
-,112 ,112 11,843 5Redemption
-,585 ,585 33,262 1Aspirational
2-,329 ,329 18,575Convenience
-,175 ,175 12,301 4Combined-currency
,023 -,023 10,663 6Relevance
3-,172 ,172 13,355Retailers
2,472(Constant)
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5.4 LP Attitude Analysis
5.4.1 Reliability Analysis of LP Attitude and Purchase Behaviour
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5.4.2 Frequency Tables
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5.4.3 Overall Attitude
5.4.4 Overall Purchase Behaviour
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Chapter 6: Discussion
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Chapter 7: Conclusion, Implications, Limitations and Future Research Directions
7.1 Conclusion
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7.2 Academic Implications
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7.3 Practical Implications
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7.4 Limitations and Future Research Directions
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Reference
s
Technometrics
Psychological Bulletin
California
Management Review
Journal
of the Academy of Marketing Science
Journal of Marketing Research
Journal of the
Academy of Marketing Science
Questionnaire Design: How to Plan, Structure and Write Survey Material
for Effective Market Research
Journal of Business Research
Journal of
Consumer Marketing
Journal of
Marketing
Journal of Marketing
The
McKinsey Quarterly
Journal
of Relationship Marketing
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Journal of Marketing Science
California Management Review
Sloan
Management Review
Journal of Marketing Research
Journal of Consumer Marketing
Maritz Loyalty Marketing
Journal of Consumer
Marketing
International Journal of Retail & Distribution
Management
Journal of Consumer Marketing
Journal of Marketing Research
Journal of Consumer Research
Interfaces
Econometric Methods
Journal of Marketing Research
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Journal of Marketing Research
Principles of Marketing
Journal of Consumer Marketing
Journal of Database Marketing & Customer Strategy
Managemen
Discussion Paper
International Journal of Research in Marketing
Journal of Marketing
Journal of Mathematical Psychology
Marketing Research: An Applied Approach
Journal of Marketing Management
Journal of Retailing
European Journal of Marketing
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Journal of
Marketing Management
European Retail Digest
Journal of Retailing
Harvard Business
Review
Harvard Business
Revie
w
Marketing Intelligence &Planning
Sawtooth Software Inc. Research Paper Series
Journal of Interactive Marketing
Handbook of marketing decision
models
Harvard
Business Review
Harvard
Business Review
The
Marketing Review
Journal of Research in Marketing
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Marketing Science
Journal of Marketing Research
British Food Journal
Manual to SPSS
Manual to SPSS
De Constructie van Profielensets voor het Schatten van Hoofdeffecten
en Interacties bij Con junct Meten
International Journal of Service Industry Management
Journal of Business Ethics
Journal of
Marketing Management
Journal of Service Research
Journal
of Marketing,
International Journal of Retail and Distribution Management
Journal of the Academy of Marketing Science
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Appendices
Appendix A Discussed variables
Economic /
Hard Non-Economic / Soft Benefits Program Design IdiosyncraticBenefits
Rew ards Psychological Sociological Program Individual
Membership in a LP
Economic Cost Non-economic
costs
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Appendix B: Profiles Card List
redemption aspi rational convenience combined relevance number of
Card ID choice level level currency level retailers
1 1 small high high no high small
2 2 small low low yes high large
3 3 small low low no low small
4 4 large low high yes low small
5 5 large high low no low large
6 6 large high low yes high small
7 7 large low high no high large
8 8 small high high yes low large
9(a) 9 large high high no high large
10(a) 10 large low low yes high small
a Holdout
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Appendix C: Questionnaire
Part 1
Scenario 1
limited
exciting desirable mo tivate
easy simple
multiple
no
3-6
small
Scenario 2
limited
dull undesirable does not motivate
difficult complicated
limited
is possible
3-6
large
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Scenario 3
limited
dull undesirable does not motivate
difficult complicatedlimited
no
6-9
small
Scenario 4
extended
dull undesirable does not motivate
easy simple
multiple
is possible
6-9
small
Scenario 5
extended
exciting desirable mo tivate
difficult complicated
limited
no
6-9
large
Scenario 6extended
exciting desirable mo tivate
difficult complicated
limited,
is
3-6
small
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Scenario 7
extended
dull undesirable does not motivate
easy simple
multiple
no
3-6
large
Scenario 8
limited
exciting desirable mo tivate
easy simple
multiple
is
6-9
large
Scenario 9
extended
exciting desirable
easy simple
multiple
no
3-6
large
Scenario 10
extendeddull undesirable does not motivate
difficult complicated
limited
is
3-6
small
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Part 2
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Part 3
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
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Appendix D: Sample Characteristics
What is your gender
Cumulative
Frequency Percent Valid Percent Percent
Valid Male 102 43,2 43,2 43,2Female 134 56,8 56,8 100,0
Total 236 100,0 100,0
What is your age
Cumulative
Frequency Percent Valid Percent Percent
Valid 18-25 153 64,8 64,8 64,8
26-34 51 21,6 21,6 86,4
35-49 16 6,8 6,8 93,2
50-59 9 3,8 3,8 97,0
60+ 7 3,0 3,0 100,0
Total 236 100,0 100,0
What is your montly income after taxes
Cumulati ve
Frequency Percent Valid Percent Percent
Valid Below 999 134 56,8 56,8 56,8
1000-1999 55 23,3 23,3 80,1
2000-2999 28 11,9 11,9 91,9
3000 and more 19 8,1 8,1 100,0
Total 236 100,0 100,0
What is your nationality
Cumulative
Frequency Percent Valid Percent Percent
Valid Dutch 159 67,4 67,4 67,4
German 45 19,1 19,1 86,4
American 4 1,7 1,7 88,1
British 3 1,3 1,3 89,4
Irish 4 1,7 1,7 91,1
Belgian 8 3,4 3,4 94,5
Other 13 5,5 5,5 100,0
Total 236 100,0 100,0
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In how many single retailer loyalty programs do you participate?
Cumulative
Frequency Percent Valid Percent Percent
Valid None 64 27,1 27,1 27,1
1 75 31,8 31,8 58,9
2 46 19,5 19,5 78,4
3 23 9,7 9,7 88,1
More than 3 28 11,9 11,9 100,0
Total 236 100,0 100,0
In how many coalition loyalty programs do you participate?
Cumulative
Frequency Percent Valid Percent Percent
Valid None 143 60,6 60,6 60,6
1 66 28,0 28,0 88,6
2 19 8,1 8,1 96,6
3 7 3,0 3,0 99,6
More than 3 1 ,4 ,4 100,0
Total 236 100,0 100,0
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Appendix E: Initial Conjoint Output
Utilities
Utility
Estimate Std. Error
redemption small -,108 ,119
large ,108 ,119
aspirational low -,571 ,119
high ,571 ,119
convenience low -,322 ,119
high ,322 ,119
com_cur no -,175 ,119
yes ,175 ,119
relevance low ,020 ,119
high -,020 ,119
retailers small -,165 ,119
large ,165 ,119
(Constant) 2,482 ,119
Importance Values
redemption 12,065
aspirational 32,861
convenience 18,349
com_cur 12,360
relevance 10,633
retailers 13,288
Averaged Importance Score
Correlations(a)
Value Sig.
Pearson's R ,986 ,000
Kendall's tau ,786 ,003
Kendall's tau for Holdouts 1,000 .
a Correlations between observed and estimated preferences
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Appendix F: Final Conjoint Output 222 Respondents
Utilities
Utility
Estimate Std. Error
redemption small -,112 ,117
large ,112 ,117
aspirational low -,585 ,117
high ,585 ,117
convenience low -,329 ,117
high ,329 ,117
com_cur no -,175 ,117
yes ,175 ,117
relevance low ,023 ,117
high -,023 ,117
retailers small -,172 ,117
large ,172 ,117
(Constant) 2,472 ,117
Importance Values
redemption 11,843
aspirational 33,262
convenience 18,575
com_cur 12,301
relevance 10,663
retailers 13,355
Averaged Importance Score
Correlations(a)
Value Sig.
Pearson's R ,987 ,000
Kendall's tau ,786 ,003
Kendall's tau for Holdouts 1,000 .
a Correlations between observed and estimated preferences
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Appendix G: Pearsons R Holdout Scenario 9 and 10
Correlations
Scenario 9
Scenario 9 Pearson Correlation 1 ,544(**)
Sig. (2-tailed) ,000
N 222 222
Pearson Correlation ,544(**) 1
Sig. (2-tailed) ,000
N 222 222
** Correlation is significant at the 0.01 level (2-tailed).
Correlations
Scenario 10
Scenario 10 Pearson Correlation 1 ,417(**)
Sig. (2-tailed) ,000
N 222 222
Pearson Correlation ,417(**) 1
Sig. (2-tailed) ,000
N 222 222
** Correlation is significant at the 0.01 level (2-tailed).
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Appendix H: Table of Pearsons R for all 10 Profiles
Estimated score correlated observed score Pearsons R
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Appendix I: Reliability Analysis of LP Attitude
Single Retailer LP Attitude Items
Case Processing Summary Reliability Statistics
N %Cronbach's
Cases Valid 168 75,7Alpha Based
Excluded(a) 54 24,3 on
Cronbach's StandardizedTotal 222 100,0
Alpha Items N of
Itemsa Listwi se deletion based on all variables in the,723 ,735 5
procedure.
Coalition LP attitude Items
Case Processing Summary Reliability Statistics
N %Cronbach's
Cases Valid 91 41,0 Alpha Based
Excluded(a) 131 59,0 on
Cronbach's StandardizedTotal 222 100,0
Alpha Items N of Itemsa Listwi se deletion based on all variables in the
,771 ,776 5procedure.
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Appendix J: Frequency Tables Attitude and Purchase Behaviour
Attitude Single Retailer LP
Statistics
Please rate the Please rate the
Please rate the following following
following statements - If statements - I
statements - Please rate the a retailer does Please rate the am paying
Having a si ngl e following not have a following more attention
retai ler loyalty statements - I single retailer statements - A to special
card makes me enjoy loyalty single retailer offers because
feel like a participation in program, I miss loyalty program of the single
regular a single retailer important offers attractive retai ler loyalty
customer loyalty program benefits benefits card
N Val id 168 168 168 168 168
Missing 54 54 54 54 54
In how many single retailer loyalt y programs do you participate?
Cumulative
Frequency Percent Valid Percent Percent
Valid None 54 24,3 24,3 24,3
1 74 33,3 33,3 57,7
2 46 20,7 20,7 78,4
3 21 9,5 9,5 87,8
More than 3 27 12,2 12,2 100,0
Total 222 100,0 100,0
Please rate the following statements - Having a single retailer loyalty card makes me feel like a regular
customer
Cumulative
Frequency Percent Vali d Percent Percent
Valid Totally disagree 6 2,7 3,6 3,6
Disagree 23 10,4 13,7 17,3
Neutral 43 19,4 25,6 42,9
Agree 90 40,5 53,6 96,4
Totally agree 6 2,7 3,6 100,0
Total 168 75,7 100,0
Missing 8888888 54 24,3
Total 222 100,0
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Please rate the following statements - I enjoy participation in a single retailer loyalty program
Cumulative
Frequency Percent Vali d Percent Percent
Valid Totally disagree 4 1,8 2,4 2,4
Disagree 16 7,2 9,5 11,9
Neutral 67 30,2 39,9 51,8
Agree 75 33,8 44,6 96,4
Totally agree 6 2,7 3,6 100,0
Total 168 75,7 100,0
Missing 8888888 54 24,3
Total 222 100,0
Please rate the following statements - If a retailer does not have a single retailer loyalty program, I miss
important
benefits
Cumulative
Frequency Percent Vali d Percent Percent
Valid Totally disagree 27 12,2 16,1 16,1
Disagree 74 33,3 44,0 60,1
Neutral 34 15,3 20,2 80,4
Agree 30 13,5 17,9 98,2
Totally agree 3 1,4 1,8 100,0
Total 168 75,7 100,0
Missing 8888888 54 24,3
Total 222 100,0
Please rate the following statements - A single retailer loyalty program offers attractive benefits
Cumulative
Frequency Percent Vali d Percent Percent
Valid Totally disagree 2 ,9 1,2 1,2
Disagree 12 5,4 7,1 8,3
Neutral 42 18,9 25,0 33,3
Agree 101 45,5 60,1 93,5
Totally agree 11 5,0 6,5 100,0
Total 168 75,7 100,0
Missing 8888888 54 24,3
Total 222 100,0
Please rate the following statements - I am paying more attention to special offers because of thesingleretailer loyalty card
Cumulative
Frequency Percent Vali d Percent Percent
Valid Totally disagree 6 2,7 3,6 3,6
Disagree 26 11,7 15,5 19,0
Neutral 24 10,8 14,3 33,3
Agree 87 39,2 51,8 85,1
Totally agree 25 11,3 14,9 100,0
Total 168 75,7 100,0
Missing 8888888 54 24,3
Total 222 100,0
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Attitude Coalition LP
Statistics
Please rate
Please rate the followingthe following statements - If Please rate Please rate the
statements - a retailer does the following fol lowing
Having a Please rate the not participate statements - statements - I
In how many coalition following in coalition A coalition am paying
coalition loyalty card statements - I loyalty loyalty more attention
loyalty makes me enjoy program, I program to special
programs do feel like a participation in miss offers offers because
you regular a coalition important attractive of the coaliti on
participate? customer loyalty program benefits benefits card
N Val id 222 91 91 91 91 91
Missing 0 131 131 131 131 131
In how many coalition loyalty programs do you participate?
Cumulative
Frequency Percent Valid Percent Percent
Valid None 131 59,0 59,0 59,0
1 65 29,3 29,3 88,3
2 19 8,6 8,6 96,8
3 6 2,7 2,7 99,5
More than 3 1 ,5 ,5 100,0
Total 222 100,0 100,0
Please rate the following statements - Having a coalition loyalty card makes me feel like a regular
customer
Cumulative
Frequency Percent Vali d Percent Percent
Valid Totally disagree 2 ,9 2,2 2,2
Disagree 21 9,5 23,1 25,3
Neutral 33 14,9 36,3 61,5
Agree 32 14,4 35,2 96,7
Totally agree 3 1,4 3,3 100,0
Total 91 41,0 100,0
Missing 8888888 131 59,0
Total 222 100,0
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Please rate the following statements - I enjoy participation in a coalition loyalty program
Cumulative
Frequency Percent Vali d Percent Percent
Valid Totally disagree 2 ,9 2,2 2,2
Disagree 8 3,6 8,8 11,0
Neutral 37 16,7 40,7 51,6
Agree 42 18,9 46,2 97,8
Totally agree 2 ,9 2,2 100,0
Total 91 41,0 100,0
Missing 8888888 131 59,0
Total 222 100,0
Please rate the following statements - If a retailer does not participate in coalition loyalty program, I miss
important
benefits
Cumulative
Frequency Percent Vali d Percent Percent
Valid Totally disagree 9 4,1 9,9 9,9
Disagree 35 15,8 38,5 48,4
Neutral 23 10,4 25,3 73,6
Agree 23 10,4 25,3 98,9
Totally agree 1 ,5 1,1 100,0
Total 91 41,0 100,0
Missing 8888888 131 59,0
Total 222 100,0
Please rate the following statements - A coalition loyalty program offers attractive benefits
Cumulative
Frequency Percent Vali d Percent Percent
Valid Totally disagree 1 ,5 1,1 1,1
Disagree 4 1,8 4,4 5,5
Neutral 28 12,6 30,8 36,3
Agree 49 22,1 53,8 90,1
Totally agree 9 4,1 9,9 100,0
Total 91 41,0 100,0
Missing 8888888 131 59,0
Total 222 100,0
Please rate the following statements - I am paying more attention to special offers because ofthecoalition card
Cumulative
Frequency Percent Vali d Percent Percent
Valid Totally disagree 5 2,3 5,5 5,5
Disagree 17 7,7 18,7 24,2
Neutral 29 13,1 31,9 56,0
Agree 34 15,3 37,4 93,4
Totally agree 6 2,7 6,6 100,0
Total 91 41,0 100,0
Missing 8888888 131 59,0
Total 222 100,0
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Purchase Behaviour Single Retailer LP
Please answer the following two questions - Do you buy more often at the retailer of the program
inwhich you participate
Cumulative
Frequency Percent Valid Percent PercentValid A lot less 3 1,4 1,8 1,8
A little less 1 ,5 ,6 2,4
The same 69 31,1 41,1 43,5
A little more 76 34,2 45,2 88,7
A lot more 19 8,6 11,3 100,0
Total 168 75,7 100,0
Missing 8888888 54 24,3
Total 222 100,0
Please answer the following two questions - Do you spend more at the retailer in whose program
youparticipate
Cumulative
Frequency Percent Valid Percent Percent
Valid A lot less 2 ,9 1,2 1,2
A little less 4 1,8 2,4 3,6
The same 90 40,5 53,6 57,1
A little more 62 27,9 36,9 94,0
A lot more 10 4,5 6,0 100,0
Total 168 75,7 100,0
Missing 8888888 54 24,3
Total 222 100,0
Purchase Behaviour Coalition LP
Please answer the following two questions - Do you buy more often at the retailers of the
coalitionprogram of which you are a member
Cumulative
Frequency Percent Valid Percent Percent
Valid A lot less 1 ,5 1,1 1,1
A little less 2 ,9 2,2 3,3
The same 54 24,3 59,3 62,6
A little more 30 13,5 33,0 95,6
A lot more 4 1,8 4,4 100,0
Total 91 41,0 100,0
Missing 8888888 131 59,0
Total 222 100,0
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Please answer the following two questions - Do you spend more at the retailers of the coalition
programof which you are a member
Cumulative
Frequency Percent Valid Percent Percent
Valid A lot less 1 ,5 1,1 1,1
A little less 3 1,4 3,3 4,4The same 60 27,0 65,9 70,3
A little more 24 10,8 26,4 96,7
A lot more 3 1,4 3,3 100,0
Total 91 41,0 100,0
Missing 8888888 131 59,0
Total 222 100,0
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Appendix K: Paired Samples T Test
Paired Samples T test Attitude
Paired Samples Statistics
Std. Error
Mean N Std. Deviation Mean
Pair 1 total_single_att 3,3452 84 ,62506 ,06820
total_coal_att 3,2286 84 ,65207 ,07115
Paired Samples T test Purchase behaviour
Paired Samples Statistics
Std. Error
Mean N Std. Deviation Mean
Pair 1 total_pur_single 3,5893 84 ,70352 ,07676
total_pur_coal 3,3155 84 ,61006 ,06656