PVM Pharmacy Customer Satisfaction Structural Equations Models. Multivariate Solutions

Transcription

1 PVM Pharmacy Customer Satisfaction Structural Equations Models Multivariate Solutions

2 Basics of Structural Equation Models Structural equation modeling (SEM) is a statistical technique for building and testing statistical models, which are often causal models. It is a hybrid technique that encompasses aspects of confirmatory factor analysis, path analysis and regression, which can be seen as special cases of SEM. Among its strengths is the ability to model constructs as latent variables variables which are not measured directly, but are estimated in the model from measured variables which are assumed to 'tap into' the latent variables. For example, a latent variable can be Overall Satisfaction, which is a composite of, say, three satisfaction variables, such as Purchase Intent, Likelihood to Purchase, and Likelihood to Recommend. SEM also allows the researcher to use a combination of more than one technique, such as regression analysis and factor analysis. These are interlaced within the path diagram.

3 SEM Interpreting the Path Graphic In this case study, the SEM calculates the impact that specific pharmacy attributes have on satisfaction. The attributes with the highest impact will drive a consumer's satisfaction with our fictional pharmacy chain, PVM Pharmacy. These top drivers can be explored further to identify strengths, weaknesses, and any unmet needs. We will also identify which measures have the least effect on satisfaction. The structural equations modeling graphic also gives a numerical association with the five general Pharmacy measures that create the latent Latent Overall Customer Satisfaction measure. What this shows is that respondents actions, such as Stated PVM Satisfaction (.81) and Recommend PVM Pharmacy (.74) are most highly related to the Latent Overall Customer Satisfaction. The PVM Pharmacy Net Promoter Score has a low effect on Latent Overall Customer Satisfaction (.12).

4 Structural Equation Model PVM Pharmacy Brand Equity Pharmacy Attributes Pharmacy Components Latent Measurement PVM Performance The pharmacy provides information on health conditions The pharmacists coordinate my care with doctors and health plans My prescriptions are filled in a timely manner My prescriptions are with clearly labeled directions The pharmacist is available to answer questions or concerns (.87) Prescriptions Pharmacy (.84) PVM Pharmacies Stated Satisfaction Rating (.81) (.62) Likelihood to Return The store offers a wide variety of OTC products The stores offers the best personal care products The store offers the best variety food/grocery items The stores offers the best beauty products The pharmacy is easily accessible The store hours are convenient The store is conveniently located Other franchises of the pharmacy chain are close by and honor all prescriptions (.66) Non-Prescription Products Convenience and Location (.28) (.58) PVM Pharmacies Latent Customer Satisfaction (.74) (.12) PVM Pharmacy Recommend PVM Pharmacy NPS The pharmacy accepts my insurance card The pharmacy has the best prices overall The pharmacy is knowledgeable about my insurance coverage The pharmacy has the lowest co-payments for prescriptions Insurance and Value (.70) (.42) Timeliness The store is clean and welcoming The store employees are friendly and courteous The store employees know where all products are located In-Store Shopping Experience (.14)

5 SEM Interpreting the Path Graphic The interpretation of PVM Pharmacy is complete in the structural equations modeling output. It shows the strength of the five product categories that are driving the latent brand equity measure for example, Prescriptions Pharmacy (.84), Insurance and Value (.70), and Convenience and Location (.58) are the main selling points for PVM Pharmacy Latent Overall Customer Satisfaction. These findings are derived importance, the same statistical inference from brand equity regression analysis. There are also two significant relationships between two of the factors (green lines): Prescriptions Pharmacy and Non-Prescription Products have a correlation of.87. Prescriptions Pharmacy is the primary reason that customers visit PVM Pharmacy. This correlation shows that satisfaction with non-prescription products is highly correlated with how happy customers are with the pharmacy. Convenience and Location and Insurance and Value have a correlation of.66. This suggests that store convenience and the shopping experience are highly related.

6 SEM Confirmatory Factor Analysis It is possible that these categories can be pre-determined. However, in this case, PVM Pharmacy ran a confirmatory factor analysis, an extension of factor analysis in which specific hypotheses about the structure of the factor loadings are tested. It is shown in the next slide. The final five slides show a graphical representation of the factor coefficients for PVM Pharmacy factors. These coefficients from the PVM Pharmacy Latent Overall Customer Satisfaction factor provide a measure of the strength that a specific statement has in explaining the underlying construct or theme captured by the factor. The higher the coefficient, the better the statement itself represents the factor s ideas. Additionally, the higher the coefficient, the bigger the driver that statement is on Latent Overall Customer Satisfaction (relative to the other statements in the factor).

7 Key Drivers Of PVM Pharmacy Customer Satisfaction PVM Pharmacies Factor Analysis Pharmacy Non-Prescription Products Convenience Insurance and Value In-Store Shopping Experience The pharmacy provides information on health conditions The pharmacists coordinate my care with doctors and health plans My prescriptions are filled in a timely manner My prescriptions are with clearly labeled directions The pharmacist is available to answer questions or concerns The store offers a wide variety of OTC products The stores offers the best personal care products The store offers the best variety food/grocery items The stores offers the best beauty products The pharmacy is easily accessible The store hours are convenient The store is conveniently located Other franchises of the pharmacy chain are close by and honor all prescriptions The pharmacy accepts my insurance card The pharmacy has the best prices overall The pharmacy is knowledgeable about my insurance coverage The pharmacy has the lowest co-payments for prescriptions The store is clean and welcoming The store employees are friendly and courteous The store employees know where all products are located

8 PVM Pharmacy Customer Satisfaction Model Impact of each attribute comprising the Prescriptions Pharmacy factor. The pharmacy provides information on health conditions The pharmacists coordinate my care with doctors and health plans My prescriptions are filled in a timely manner Prescriptions Pharmacy My prescriptions come with clearly labeled directions.64 The pharmacist is available to answer questions and concerns.63 These coefficients provide a measure of the strength that a specific statement has in explaining the underlying construct captured by the factor. The higher the coefficient, the better the statement itself represents the factor s theme. Additionally, the higher the coefficient, the bigger the driver that statement is on Latent Overall Customer Satisfaction

9 PVM Pharmacy Customer Satisfaction Model Impact of each attribute comprising the Non-Prescription Products factor. The store offers a wide variety of OTC products The stores offers the best personal care products The store offers the best variety of food/grocery items Non-Prescription Products.59 The stores offers the best beauty products.52

10 PVM Pharmacy Customer Satisfaction Model Impact of each attribute comprising the Convenience factor. The pharmacy is easily accessible The store hours are convenient The store is conveniently located Convenience Other franchises of the pharmacy chain are close by and honor all prescriptions.56

11 PVM Pharmacy Customer Satisfaction Model Impact of each attribute comprising the Insurance and Value factor. The pharmacy accepts my insurance card The pharmacy has the best prices overall The pharmacy is knowledgeable about my insurance coverage The pharmacy has the lowest copayments for prescriptions Insurance and Value

12 PVM Pharmacy Customer Satisfaction Model Impact of each attribute comprising the In-Store Shopping Experience factor. The store is clean and welcoming.72 The store employees are friendly and courteous The store employees know where all products are located In-Store Shopping Experience