Critical Evaluation of Factors Influencing Customer Loyalty and Satisfaction in Supermarket Retail Industry

Customer Loyalty: A dependent variable on factors influencing it.
In the context of Supermarket retail stores
Abhishek Meshram 09048790 M.Sc. Management September 2009
Submitted to: The University of Glamorgan
Abhishek Meshram (09048790)
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Declaration: This dissertation is submitted in part fulfilment of requirement of M.Sc. in Management. I declare that this dissertation is the result of my own independent investigation and all the sources are duly acknowledged in the bibliography
Signed: Abhishek Meshram Date: 14th October, 2010.
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Acknowledgement
I thank God for being with me and guiding me throughout my journey of life so far. I am very grateful to the University of Glamorgan for giving me an opportunity for writing this dissertation as a part of my academic course. I am thankful to my dissertation supervisor Prof. Elizabeth Lloyd Parkes for giving me excellent guidance in such short period of time and without her support this dissertation could not have looked the same as it looks now. I am really indebted to her. I thank my family for being there for me and giving me the motivation to finish this dissertation in time. I would like to specially thank Miss. Kalyani Wadyalkar for keeping me positive throughout the research work and being there as a friend in need. I would also like to offer a special thanks to the team and customers of Sainsburys Convenience Store, Penarth and without their support this research would not have been possible. Abhishek Meshram
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Abstract
The customers are the focus of all the organisations irrespective of the business they are doing. In the commercial context, the term customer loyalty is widely observed and it has received a lot of attention due to its impact on the revenues. The purpose of this research is evaluate customer loyalty and to identify the factors that influence customer loyalty in the Supermarket retail store environment. The research recognises the importance of customer loyalty in supermarkets industry and this market is highly competitive in nature. The consumer behaviour is widely influenced by the product offerings, service, shopping environment of the store and various other factors discussed in the research. The study involved interview method of collecting primary data and interviews were conducted of the customers in a store of leading supermarket chain in UK. The interview questions were designed to derive the data to facilitate the aims and objectives of the research. The results of the interview were recorded and analysed to determine the influence of various factors on the store loyalty intentions of the customers in the store. The findings of the research highlight the importance of identifying, managing and understanding the various factors that have a mediating effect in influencing customer loyalty and satisfaction towards the supermarket store. Understanding these could have a positive impact on developing effective customer loyalty management in the supermarket retail stores.
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Table of Contents Declaration....................................................................................................... .. 2 Acknowledgement............................................................................................. . 3 Abstract.............................................................................................................. . 4 1) Introduction................................................................................ ............................... 7 - 15 a) Relevant Background of Topic............................................................................ 7 i) Importance of Customer loyalty............................................................... ..... 9 ii) General Retail Loyalty.............................. ............................................... ...... 10 iii) Supermarket and Grocery Loyalty........................................................... ...... 11 b) Aims and Objectives................................................................................ ............ 13 c) Scope of Research............................................................................................... . 14 d) Structure of Research.......................................................................................... . 15 2) Literature Review...................................................................................................... . 16- 49 i) Conceptual Framework of Customer Loyalty........................................ ........ 16 (a) Definition................................ ........................................ ....................16 (b) Categories of customer loyalty....................................... .................... 19 (c) Customer satisfaction and its effects.............................. ..................... 22 (d) Customer satisfaction and customer loyalty............................. .......... 23 (e) Factors influencing customer satisfaction and customer loyalty.................................................................. ......... 25 (f) Relationship marketing in the retail context................... .................... 30 (g) Concept of loyalty schemes............................................ .................... 33 ii) Models of Customer loyalty................................................................... ........ 36 (a) Value creation model of loyalty..................................... .................... 36 (b) Extended ECSI model of loyalty.................................... .................... 39 (c) Model of consumer perception and store loyalty Intentions for Supermarket Retailers....................................... .......... 43 3) Research Methodology.................................................................. ......................... ... 50- 61 i) Research Philosophy and Approach..................................................... ......... 50 ii) Research Design................................................................................... .......... 52 iii) Research methods................................................................................ .......... 54 iv) Data Collection methods..................................................................... ........... 55 (a) Secondary Data................................... ........................ ....................... 56
Abhishek Meshram (09048790) Page 5
(b) Primary Data............................................................... ........................ 57 v) Sampling............................................................................................. ............ 59 vi) Data Analysis......................................................................................... ......... 59 vii) Limitations............................................................................................. ..........60 viii) Ethical Considerations........................................................................... ....60
4) Research Findings and Presentation........................................................................ ... 62-68 5) Research Analysis and Discussion......................................................................... .... 69-75 6) Conclusion.............................................................................................................. .... 76-78 7) References............................................ ................................................................... ....79-90 8) Appendix................................................................................................................. ....91-93
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1. Introduction a. Relevant Background of Topic: In todays competitive marketing environment, the focus of many firms of to drive the customer loyalty for their products as well as services (Vesel and Zabkar, 2009).McMullan and Gilmore (2008) also illustrated in their research that the companies are discovering the importance of retaining customers in the competitive markets and thus have initiated the various activities to develop customer loyalty. Zairi (2000) asserted that Customers are the only reason of what businesses do and instead of customers depending upon firms, firms should be very much depended upon the customers. The customers should not be considered as a source of problem and businesses should not wish the customer to go away as this would jeopardize firms security and future. Because of this, many organisations today have started driving their focus on customer satisfaction, loyalty and retention. Loyalty can be observed in terms of store loyalty by the customers (Uncles et al, 2003) and it is described as the consumers preference to patronize a particular store or chain of stores over a period of time (Knox and Denison, 2000). In the past few decades, markets have become more competitive and many companies are feeling the need to recognise the importance of retaining the current customer base and for this many companies have taken initiatives to improve customer loyalty. According to Kandampully (2000), it is important for the organisations generate, maintain and develop the extensive and loyal customer base over a long period of time in order to achieve and sustain the competitive advantage in the marketplace. The long term loyalty of customers developed by the retailers leads to commitment to a excellent quality experience and high degree of trust between the customer and retailers and this also leads to exchange of information between the two parties (Whyatt and Koschek, 2010).
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The retailers are aware of the fact that customer retention strategies are less complicated and troublesome than customer acquisition activities (Richard and Jones, 2008) and by improving the customer retention, the retailers are influencing the value for the customers and the firm (Gupta et al, 2004). The benefits related to customer loyalty are widely recognised within the business and these benefits can be in terms of lower costs associated with retaining the existing customer instead of looking for new customers within the mature and competitive markets (Ehrenberg and Goodhardt, 2000). In highly competitive markets, the loyalty of the customers leads to benefits like creating barriers for the competitors, improving and increasing sales as well as revenues, lowering the customer acquisition costs and reducing the customers inclination to marketing forces of the industry competitors (Brexendorf et al, 2010).Sasser (1990) in his studies indicated that organisations spends five times more to attract new customers as compared to retaining existing customers, thus this indicates that loyal customers help to reduce the large proportion of the marketing expenses in order to attract potential customers (Bowen and Shoemaker, 1998; Egan, 2000). According to Grayson and Ambler (1999), the long term customers like to grow their relationship within the organisations and therefore the rewards from this group are more cumulative as well as long term in nature. Another benefit associated with the behaviourally loyal customer is that, the latter acts as an information channel, informally linking networks of friends, relatives and many other prospective customers to the company (Shoemaker and Lewis, 1999). Customer loyalty is being characterised by the customers preference to buy a product or service from an organisation in a consistent manner whenever the need arises to purchase and this issue is characterised by preference and consistency (McMullun and Gilmore, 2008).
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Rowley and Dawes (1999) asserted that there is a perceived link between customer loyalty and profitability in the organisations. Customer loyalty has been identified as the key for profitability and long term sustainability in the market (Keating et al, 2003; Reichheld, 1996) and Reichheld and Schefter (2000) stated that while it is important for the organisations to attract a large number of customers, but having a large customer-base alone is not sufficient to offer any assured long term profitability unless the customers are loyal to the firm. Oliver (1999), defines loyalty as a commitment which is deeply held by a customer to rebuy or re-patronise a preferred product or service consistently in the future, which results in repetitive same- brand or same brand-set purchasing , despite situational influences as well as marketing efforts which have potential to cause switching behaviour. Thus Olivers definition considers that loyalty is conceptualised as a result of preferences for product and services. Hasemark and Albinsson (2004) commented that satisfaction is a customers attitude towards a particular service provider , or an emotional reaction to the difference between the customers anticipation and what they really received with respect to fulfilment of some needs, aim or desire, whereas customer loyalty is the actual result of the organisation in creating a benefit for a customer which will lead to maintain or increase the purchases by the customers from the organisation (Anderson and Jacobson, 2000). i. Importance of Customer Loyalty: McIlroy and Barnett (2000) said that loyalty cannot be taken for granted and the customers will continue to be loyal till the time they feel that they are getting better value for money than they would obtain from other service provider or supplier.
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According to Anton (1996), customer loyalty is important as it leads to: Increase in frequency of purchases of current products and services. Cross purchase of other products. The customers are ready to purchase at premium prices due appreciation from the value- added services.
y
y y y
Reduction in the operational cost due to familiarity with the service system in the store.
Positive word of mouth marketing to other prospective and potential customers of the store or organisation.
The cost of acquiring and retaining new customers is high. The increased rate of retention of customers implies that very few new customers need to be acquired by the business. The cost of acquisition of new customers is three to five times more expensive than the cost of retaining them the old customers as supported by Sasser (1990).
ii. General retail loyalty: According to research by Clark and Clark (2010), in general retail, the main focus of the loyalty programmes is on what the customers prefer and what the future is likely to bring for the organisation. The retailers today needs to know more of their customers and keep their data centrally recorded which will enable to employees to access that data whenever needed and the loyalty programmes enable that information to be recorded and therefore they are important for the retail to create a data base of the customers (Leenheer and Bijmolt, 2008; Demoulin and Zidda, 2009). The customers have a different perspective for loyalty schemes and they consider that loyalty schemes exist to reward them and if the customer thinks to be rewarded in some other way, then they would dismiss the loyalty
scheme. Bellizi and Bristol (2004) however asserted that although the loyalty cards offer more value to the customers, the loyalty programmes alone cannot influence the loyalty among the customer. It is important for the organisations to listen to the customer views and feedbacks and take necessary steps to improve the existing loyalty schemes, even if they add value to the organisation (Jardine, 2000; Divett et al, 2003). Clark and Clark (2010) categorised loyalty scheme benefits into two types: direct benefits (tangible) and indirect benefits (less tangible). Direct benefits includes factors like price reductions, gifts, vouchers and added values such as pampering, free flights and days out or holidays, whereas, indirect benefits includes factors such as improved sales forecasting, more convenient merchandising and fewer out- of- stock lines. iii. Supermarket and Grocery Loyalty: The price competition has led to much added trouble to the supermarkets with the entry of Wal- Mart in the US and Asda in the UK. The supermarkets in UK are among the most sophisticated in the world and they lead in customer data collection and the analysis of that data, management of stock and customer service as well innovation in the retail environment (The Loyalty Guide 4, 2010). According to Clark and Clark (2010), the supermarkets in UK are diversifying their business in different sectors and markets and they are strengthening their foothold not only in the consumers household budget but also in insurance, communications, banks, credit cards, car maintenance, healthcare, holidays and travels and several other fields. This diversification helps the supermarkets loyalty programs to collect even more valuable data which gives a bigger picture of the consumers lifestyle and household.
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Based on the supermarkets customer retention strategies, they can be divided into three categories: Supermarkets that rely on the scheme of everyday low prices (ELDP) to retain customers,
y
Supermarkets that rely on the effective loyalty programmes as a customer marketing strategies and
Supermarkets that relies upon excellence in service and product range and quality.
Loyalty Guide 4 (2010) asserted that there are supermarkets that have a mixed approach and adopt all the three methods in varying proportions and the supermarkets adopt the loyalty strategies depending upon the customer preferences as ELDP strategy will appeal to a segment of customer, whereas other customers will opt for better service and product range or a specific loyalty programme. The price is perceived as more honest by most of the consumers in the ELDP scheme (McGoldricks et al, 2000) and EDLP can increase the profit margins for the retailers (Levy and Weitz, 1995). The UK supermarkets also introduced the loyalty card program to refine the store offers at consumer level and target individual customers and along with this the supermarkets also introduced the own lable products and diversify into non- food markets to increase the customer offerings and increase their profit margins (Thanassoulis, 2009).
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UK Supermarket market share Retailer Tesco Asda Sainsburys Morrissons Somerfield Market share 31.2 % 16.9% 16.4% 11.1% 3.7% Year-on- year +7.2% +9.0% +7.8% +3.9% -3.8%
Source: The Loyalty Guide 4, TNS World Panel (2010) The table indicates the market share of various supermarket retail stores in competition. Sainsburys superstore was chosen as a store for the research purpose due to availability of access from the store management for conducting the research. The table indicate a significant market share of Sainsburys in UKs retail market and growth is significant in the Sainsburys store. b. Aims and Objectives: The aim of the research is to critically analyze the customer loyalty as a dependent variable on the factors that influence customer loyalty in the supermarket retail stores. The following objectives were developed to achieve the aim of the research: To evaluate the concept of customer loyalty; Identification and analysis of the causal factors of the customer satisfaction and loyalty in the supermarket retail stores and
y
y y
To identify the factors that the supermarkets should aim and improve in order to make their loyalty programs effective and retain customers in the stores
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c. Scope of Research: The focus of the marketing activities in todays organisations is to develop and maintain effective customer loyalty to the organisations products and services. The relationship with the loyal customers is considered as less expensive and loyal customers help to contribute more to the organisation by buying more and paying premium prices and also the customers engage themselves in a behaviour which is beneficial to the organisation such as spreading the goodwill of the organisation in the form of positive word- of mouth to the potential customers (Ganesh et al, 2000). The customers who get into an organisation as a result of personal recommendation tend to be more loyal than those customers who purchase because of the advertisement (Reichheld, 1993). Customer loyalty is of critical importance for any organisation in order to enhance the profitability. With the absence of customers, it is impossible for the organisations to grow and sustain in the business. By observing and studying the behaviour of the customers, the organisations can plan and develop strategies to enhance and meet customer needs and thus earn more profit. For the supermarkets, it is important for the stores needs to be more conscious of the customer needs and wants. Each supermarket store needs to provide excellent service and product quality and range to the customers in order to maintain and sustain their competitiveness in the market, failing to this the supermarket stores will not be able to achieve their business targets. Therefore, it is important that the supermarkets fulfil the customer needs and increase the customer satisfaction and ultimately achieve the loyalty of the customers. The findings of the research will help the managers of the supermarket stores to focus on those factors which will customer behaviour and lead to their loyalty towards the store.
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d. Structure of the Research: 1. Introduction: This section provides an introduction and highlights the background of the research topic. The entire chapter is sub-divided into five sections, namely: Background of research, rationale of research, aims and objectives of research, scope of research and the structure of the research 2. Literature Review: This chapter provides critical review of the theoretical and the literature related to the topic of dissertation (Customer loyalty). The chapter consist of definition and related components of customer loyalty and includes the various models propounded by various researchers in the field of customer loyalty. 3. Research Methodology: This chapter provides detailed information about the various research methods applied in the research. The research methodology chapter is subdivided into sections such as: Research philosophy and approach, research design, research methods, data collection methods, data analysis, limitations and the ethical considerations. 4. Findings and Presentation: This chapter is concerned with the presentation of the data collected in context of the research 5. Discussion and analysis: This section analysis the research findings and compares and contrasts with the literature reviewed in the research. 6. Conclusion: This chapter is the final chapter of the research and it gives the outcome and concluding remarks of the research.
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2. Literature Review
i. Conceptual framework of Customer Loyalty: a. Definition: At a very general level, loyalty is something which a customer may display towards brand, service, stores, product categories and activities. The term customer loyalty is different from the term brand loyalty because it emphasizes that loyalty is inherent as a feature which is in the people and not something which is inherent in the brands (Uncles et al, 2003). Customer loyalty can be defined as a singular concept associated with the attitude towards an object or as repeat- patronage behaviour and the can be a combination of attitude and behaviour in either an additive or an interactive expression (East et al, 2005). Zeithaml (2000) states that the earlier studies on customer loyalty viewed customer loyalty from behavioural and attitudinal perspective. The behavioural approach is that in which the customers tend to be loyal as long as they continue to buy or use a good or service (Woodside et al, 1989; Parasuram et al, 1988). Reichheld (2003) stated that the strongest evidence of customer loyalty is the percentage of the customers who are enthusiastic enough to refer a friend for a particular good and service. Reichheld opposes the profit- theory of loyalty and view loyalty as the fundamental part of business of the firm oriented towards creation of value for the customers and profit becomes a consequence of such value creation. The attitudinal approach is that when a customer feels a sense of belonging or commitment to a particular good and service. The behaviour approach includes factors like repeat purchase, share- of- wallet and positive word of mouth to potential customers whereas attitudinal approach includes factors like commitment, trust or emotional attachment (Clottey et al, 2008).
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The most widely used definition of customer loyalty is given by Jacoby and Kyner (1973), who describes loyalty as the biased (i.e. non random), behavioural response i.e. purchase, expressed over time by the, by some decision making unit, with respect to one or more alternative brand among a set of such brands and this function is psychological process. Dick and Basu (1994), presented a framework model of customer and suggested that a relative attitude drives results in repeat patronage, subjected to antecedent and situational constraint and attitude - behaviour association results in even further loyalty behaviour. They stated that customer loyalty is seen as the strength of the relationship between relative attitude of an individual and their repeat patronage. By relative they mean, compared with available alternative which is likely to motivate the behaviour, such as recommendation (East et al, 2005). However, Oliver (1999) criticized these definitions and placed a greater emphasis on the situational influences and activities characterized by commitment, preference and consistency while taking into consideration the dynamic nature of the marketing environment. Oliver defines loyalty as a Deeply held commitment by the customer to repurchase or re-patronise a preferred product or service consistently in the future, which results in a repetitive same brand or same brand set purchasing, despite the presence and situational influence of marketing efforts having the potential to cause switching behaviour. The definition implies a affirmative and effective correlation between and attitude and behaviour in the loyal groups but Oliver reports that this relation can be or usually is weak and finding true loyalty with emotional commitment to a brand is a rare phenomenon (East et al, 2005). Oliver, however, did not distinguish between proactive and situational loyalty which is measured by frequencies and number of purchases. The customer buying a brand and settling for no other brand is proactive loyalty whereas situational loyalty is observed when a customer purchases a product or service for a special occasion and this important for
the services which are purchased annually. Thus customer loyalty is not concerned with the frequency and depth of the purchases of a particular brand over another and depends upon the situation or the opportunity arises (McMullan and Gilmore, 2008). Customer loyalty is not an easy term as it is considered and as above and many definitions have been proposed for customer loyalty. But it is also important to understand what customer loyalty is not, which is described by Prus and Randall (1995) as following: Customer loyalty is not customer satisfaction as satisfaction is necessary but not a sufficient criterion for loyalty. Many satisfied and very satisfied customers often switch to competitors. Customer loyalty is not a response of customers to trial offers and incentives by the stores as customers who react to the incentives are often very disloyal and they often defect very soon. They react very easily to competitors incentive programs. Customer loyalty is not a strong market share as high level of market share can be due to factors like poor performance of competitors or price issues. Customer loyalty is not repeat or habitual buying as customers can select your product due to reasons of convenience or habit and can defect easily for any reason. Thus Prus and Randall (1995) describe customer loyalty as a phenomenon considering number of factors. It is driven by satisfaction but, also involves a commitment from the customers to make a sustained and adequate investment in an ongoing relationship with the brand or company. Customer loyalty is reflected by combination of attitudes and behaviour of the customers.
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b. Categories of Customer Loyalty: Few authors (for e.g. Dick and Basu, 1994; Rowley, 2005) have asserted that segmentation of loyal can be helpful to the business managers in developing an understanding of the concept of loyalty orientation of the customers which will help them in making effective and sustainable marketing decisions. Dick and Basu (1994) quoted a model of customer loyalty segmentation and asserted that loyalty is determined by the strength of the relationship between the relative attitude and repeat patronage and it contains both attitudinal and behavioural elements. They formed four conditions of loyalty on the above basis: Loyalty, which signifies a favourable correspondence between relative attitude and repeat patronage.
y y y
Latent loyalty is when there is high relative attitude but low repeat patronage. Spurious loyalty represents low relative attitude and high repeat patronage No loyalty is associated with low relative attitude and low repeat patronage
Rowley (2005) proposed a model, which further sub-divides the model of Dick and Basu for determining the category of loyalty. Rowley (2005) differentiates the customer on the basis of inertial tendency in the customer attitude, customer behaviour and the customers that have positive tendencies. . Increasing attitude strength is to observe to be more predictive of behaviour and it describes attitudes durability and impactfulness (Krosnick and Petty, 1995). Therefore, the model by Rowley (2005) differentiates between positive loyalty and inertial loyalty. Inertial loyalty is linked with the loyal customers who remain unbiased about their loyalty and are consistent in their behaviour, but the truth that the customer do not switch does not indicate any affinity for the business or brand. Based on this, Rowley (2005)
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differentiated loyal customers into four categories: captive, convenience-seeker contended and committed. Captive: Captive customers are loyal to a particular brand or service as they have limited choice and opportunities to switch and also the related switching cost is very high. Captive customers also remain loyal and satisfied with the brand and do not view the brand in either negative or positive light (Rowley, 2005). Knox (1998) explained such types of loyal customers as habitual who behave indifferently in their choice and shopping behaviour and their behaviour is more influenced by presence of products than affinity. However, these types of customers display switching behaviour and switch to other competitors when there is disruption in the presence and availability of stock (Knox, 1998) Committed: Committed customers are positive both in terms of attitude and behaviour (Story and Hess, 2006). These customers engage in purchases and contribute positive word- of- mouth to other potentially loyal customers and these customers are the individuals whom the organisation would like to retain in the business and these customers expect shared loyalty from the organisation as these customers can be offended if they are not delivered any special offers which are delivered to the new customers (Rowley, 2005). Committed customers display functional (benefits related to product and service) and personal relationship with the brand and continue the loyal behaviour for an extended period of time (Story and Hess, 2006).
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Convenience- seeker: The customers are inert in their attitude about the brand and convenience hold prime importance in their purchase decisions and the convenience of entry or access is often influenced by location but can be also influenced by the store opening times as well as availability of products and the convenience driven loyalty is extended to store and retail brands (Rowley, 2005). According to Baltas et al (2010), the consumers in this category belong to a high income group and for them the opportunity cost of time is very high and such type of customer try to minimize the cost associated with shopping (time and effort). Convenience loyalty is strongly dependent upon lifestyle as well as delivery option and switching should be expected as these evolve (Rowley, 2005). Contented: Contented loyal customers have a positive attitude towards a brand but are inertial in their behaviour and these type of individuals continue to be customers but do not extend their association with the brand by subscribing to brands additional services or by increasing their expenditure on the products and services associated with the brand as they perceives the additional service or product of the brand is less relevant to their requirement (Rowley, 2005). Such types of customers are very price insensitive and they do not display functional relationship with the brand (Story and Hess, 2006) and therefore these customers can be profitable to the organisation due to this behaviour by generating significant revenues. But the contented customers can be susceptible to service or product failure and very strong recovery strategies by the retailer may be needed to sustain their loyalty and this could be a prospect for the business to display their loyalty to the customers (Rowley, 2005) and such customers often switch if they are offered significantly more value by the competitors (Story and Hess, 2006).
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The research by Rowley (2005) is supported by the work by Sopanen (1996) and Sopanen segmented the loyal customers as monopoly loyalty (where customers do not have available choices in the market), inertial loyalty (these customers do not avail the possible substitutes for the products and services) and convenience loyalty (where the loyalty is influenced by the convenience of location). c. Customer satisfaction and its effects: According to Kotler (2000), satisfaction is the feeling of contentment or disappointment as a result of comparing the products perceived outcome in relation to customers expectation. Maclnnis (2001) also pointed out that satisfaction could be associated with the overall feeling of happiness, excitement, acceptance, relief or delight. There are several factors leading to customer satisfaction such as behaviour of employees, pricing, billing procedures, service quality, value for money, product range etc. The organisations need to understand and satisfy the customer needs and wants in order to achieve customer satisfaction (La Barbera and Mazursky, 1983). The customer wants are the human needs shaped by culture and individual personality (Kotler, 2000). Customer satisfaction has a great positive effect on profitability of the organisation. Satisfied customers act as the foundation of the any successful business as customer satisfaction leads to repeated purchases by the customers, loyalty towards brand and products and also a positive word of mouth to the potential customers (Hoyer and MacInnis, 2001). According to a statistical analysis of customer satisfaction data by Growth Strategies International (GSI) which encompassed the finding of more than 20,000 customers in a survey conducted in 40 countries by Infoquest (Coldwell, 2001) concluded that satisfied customers contribute as much as 17 times more revenue than that from dissatisfied customer
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and dissatisfied customers decreases revenue at a rate equivalent to 1.8 times than that contributed from totally satisfied customers. There are several studies which highlighted the impact of customer satisfaction over repeated purchases, loyalty and retention and Zairi (2000) stated that satisfied customer are more likely to share their overall shopping experience with as much as five or six people whereas dissatisfied customer are likely to describe their unfortunate shopping experience with as many as ten people. He also stated that it is possible that many customers will not complain and dealing with customer complaints is costly and the companys cost may increase by 25 per cent to recruit new customers. The strategic dimensions of the business includes becoming more competitive in the market by improving on customer satisfaction and brand loyalty, product as well as service quality, relative cost, introducing new products and managers and employees capability and effective performance (Aaker, 1995). The consequence of not meeting the customer needs and expectations can be severe for the business. Dissatisfied customers can discontinue purchases of goods and services, register complains to the company or third party and return the purchased products and engage themselves in negative marketing for the organisation (Hoyer and MacInnis, 2001). Dissatisfaction has been a primary reason for defection of the customers and discontinuation of purchases (La Barbera and Mazursky, 1983). d. Customer satisfaction and customer loyalty: According to Bowen and Chen (2001), having a satisfied customer is not enough; the customer needs to be extremely satisfied. The customer satisfaction must lead to customer loyalty. The only way to achieve sustainable competitive advantage in the market is by means of achieving customer loyalty (Bansal and Gupta, 2001). The strategic methods of achieving customer loyalty is by focusing on key customers, generate high customer satisfaction with
each and every interaction, understand customer needs and respond to them effectively, building closer ties with customers and creating a perception of value for the customers (Bansal and Gupta, 2001). Sivadas and Baker- Prewitt (2000) stated that the ultimate objective of customer satisfaction measure should be customer loyalty. The high customer satisfaction results in increased loyalty for the firm and the customers will be less prone to divert to the competitors (Fornell, 1992). Anton (1996) also stated that satisfaction leads to positive effect on the customers repurchase intention, likelihood of recommending product or service, loyalty and profitability to the organisation. According to Sivadas and BakerPrewitt (2000), Satisfaction influences the likelihood of recommending the store to others and repurchase, but it has no direct impact on loyalty. But, loyalty will foster to the extent that it is prerequisite for maintaining a favourable relative attitude for repurchasing as well as recommending from the store. Once a customer recommends or repurchases, it fosters a patronage and loyalty towards that store. Evans and Berman (1997) also stated that retail stores with satisfied customers have an opportunity to transform these customers into loyal customers, who will purchase from the store over an extended period of time. According to Sivadas and Baker- Prewitt (2000), just satisfying a customer is not enough in todays competitive marketplace. Reichheld (1996) stated that, 65 to 85 per cent of customers who defect or leave the store or organisation are either satisfied or very satisfied and therefore to make sure the customers do not defect, they must be extremely satisfied and thus customer satisfaction does not guarantee customer loyalty. Customers can switch due to price or because competitors are offering better and improved opportunities or simply because the customers wants a new experience (Storbacka and Lentinen, 2001). McIlroy and Barnet (2000) in their research stated that customer satisfaction is an important factor to be considered while developing a customer loyalty program. They also stated that loyalty is a vulnerable phenomenon and satisfaction is necessary but not an enough condition of loyalty
i.e. customer satisfaction without loyalty is possible whereas loyalty without satisfaction is difficult. e. Factors influencing customer satisfaction and customer loyalty: The convenience of creating and maintaining the customers loyal to the store had led to studies which identifies the characteristics of such customers which are more or less loyal and facilitate differentiation such customers from other customers in the store (e.g. East et al, 1997; Flavian et al, 2001). The research conducted by Woodside and Trappey (1992) identified an automatic cognitive processing of the store attributes which the consumer decides for their primary stores and the study also found that consumers could quickly name a store if they attach attributes like lowest overall prices, most convenient or any other attributes related to product, service etc. The main aim of their research was that being satisfied with the store is a function of the store characteristics and the consumers shopping patterns (Miranda et al, 2005). Frequency of Purchases: Flavian et al (2001) in their research carried different ways of quantifying the degree of store loyalty of the customers. Their research examined the shopping pattern of the loyal customers in terms of proportion of spending in the store and the proportion of visits made by the customers to the store. The research by Flavian et al (2001) identified that repetitive purchasing in the same store results in simplifying the decision making process and higher the proportions of visits to the store by the customer or lower the number of visits to different store by the customers, the more loyal the customer is. East et al (1997) also supported this and asserted that the consumer who visits the same store with more frequency, the customer spends more proportion of their budget in that store.
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Product attributes Sirohi et al (1998) suggested that it is important to improve the perception of merchandise or product quality among the consumers as it has a significant impact on overall store loyalty intentions of the customers. The product quality has an essential component in making an evaluation of the store by the customer (Grewal et al., 2003) and the product quality influences the stores reputation and customers purchase decisions (Martinez- Ruiz et al, 2010). Dodds et al (1991) had observed a positive and significant relation between the monetary price and the perceived quality of product and consumers with inadequate resources of analysis of the information tend to make use of price as indicator of quality (Rao and Monroe, 1989). A large assortment of goods i.e. variety of products and different items that are offered by the retailers is seen as a strategy of the retail stores to serve the different tastes and preferences of its clients (Dhar et al, 2001). The variety of products enables the retail store to attract more customers and this helps the stores to stimulate the customers to purchase more from the store and moderate the perceived cost (e.g. travel time, effort) related with the purchase and helps the task of buying (e.g. comparison between stores (Martinez- Ruiz et al, 2010). Dellaert et al (1998) also supported and asserted that retail distributor who offers a more variety of product categories can improve the convenience of purchase and increase the customer satisfaction in the store. The presence of own brands or store brands also constitute a strategic approach adopted by the retailers to increase the variety in stock and achieve positioning in the long term (Martinez- Ruiz et al, 2010). The store brands form a powerful tool for the retail stores in creating a favourable image of the establishment as it offers the customers more information on the products and at the same time guarantee a good quality- price relation of the products
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(Corstgens and Lal, 2000). In order to improve the store brand identity, retailers have intensified their efforts to improve the quality of their brands and intensifying the presence of the store brand products among the lines of competing brands in order as an effort for marketing communication (Martinez- Ruiz et al, 2010; Medina et al, 2004). Benninger (2008) concluded that retailers brands or store brands has a positive impact on the customer satisfaction and the overall customer loyalty to the store. Price aspect: Retailers use price as a strategy which forms the base for promoting the products to facilitate purchase by the customers and shoppers perception of price forms central influence on the customers shopping behaviour (Miranda et al, 2005). The research by Miranda et al (2005) also suggested that pricing of the products in the store has a significant influence on the customer satisfaction from the store. According to Curry and Reiz (1988), the customers will evaluate and balance the value for the total package of benefits the store delivers and the therefore the customers shopping experience is significantly related to perception of the customers on the product prices in the store. When the consumer perceives that the price of product or service is reasonable, it is possible for them to display intentions of repeat purchases (Martin- Consuegra et al, 2007). The customers and firms compare the selling prices against the prices paid by other customers for the same product and service (Martins and Monroe, 1994) and therefore the customers evaluate the fairness of the quoted price by making appropriate comparison with other references and by also taking into account the situational circumstances (Beldona and Namasivayam, 2006). The fairness of price can be defines as the price which the customer thinks is reasonable, just and acceptable (Bolton et al, 2003) and the price fairness is a judgement made by customers based on comparison with the available standard, reference and norms (Martin- Consuegra et al, 2007).The research by Martin- Consuegra et al, (2007) asserted that there is a positive relationship between
customer satisfaction, fairness of price and customer loyalty. Zeithaml and Bitner (1996) also argued that price is an important factor in determining customer satisfaction and whenever the customers evaluate the value of acquired products, they usually think of the price. If a customer views a firms prices as unfair, it could lead to negative responses by the customer and cause dissatisfaction (Wirtz and Kimes, 2007). However, customers with high brand loyalty focus more on the benefits of the brands and less on the prices whereas, customers with low brand loyalty are more focused on the price aspect of the products (MartinConsuegra et al, 2007).The consumer measures the value to their purchases based on the products implicit price (de Haan, 2003; Miranda, 2008). The findings of Urbany et al (2000) indicate that in-store promotions or special offers on products have a significant impact on the store satisfaction of the customers. Kumar and Leone (1988) also supported this and indicated that retail promotions increase the shoppers confidence in the store and retail stores have regular special offers for limited periods of time on selected items and shoppers have plenty of time and opportunity to enjoy the additional value for money and buy the items which they could not ordinarily afford (Miranda et al, 2005). However, according to Campo and Yague (2007), price discounts and product offers decreases the consumers perception of the price of the product in the short- term and increase their intent to buy the product, but this also influences the consumers price evaluation of future purchases and the consumers could perceives that the regular prices of products are high and this negatively influence the value for the product. Flavian et al (2001) also asserted that loyal customers derive high degree of satisfaction with the value of money relationship. Reichheld (1996) developed a model of loyalty which is based on creation of value for the customers and not on profit. The three forces customers, employees and investors play an important role in the forming the forces of loyalty. Reichheld (1996) describes that a linkage
exists between loyalty, value and profit and the three forces can be measured in terms of cash flow in the system.Loyalty is inextricably linked to creation of value as both cause and effect (Reichheld, 1996). As an effect, loyalty measures permanently whether the company has been successful in delivering superior value or not. There is defection in the company due to lack of value for the customers. Service Aspects of the store: Magi (2003) asserted the positive effects of effective sales assistance in generating store satisfaction and this has a direct influence on the store loyalty of the customers. Miranda et al (2005) in their research concluded that availability of sales assistance to the customers increases the shoppers loyalty to the store and the shoppers may perceive risk in switching to other store as they may not feel confident in getting the same time and cost efficiency in the new shopping environment without such assistance. Sivadas and Baker- Prewitt (2000) also concluded that service quality influences the satisfaction of customers in retail stores and this influences the likelihood that the customer will recommend the store to others. Martinez- Ruiz (2010) asserted that service efficiency in terms of speed at the checkouts, accuracy of scanning prices at the checkouts, availability of fresh food etc. Have a great and positive influence on the customer satisfaction. The service provision includes information inquiries, guidance to the location of goods, cashiers etc. to the customers from the store personnel and this relationship has a positive influence on the customers buying experience and further affects future behaviour in terms of repeat visits (Reynoldds and Beatty, 1999; Theodoridis and Chatzipanagiotou, 2009) and customers perception of the performance of the salespeople is critical factor in influencing customer satisfaction (Darian et al, 2001). Store Attributes:
McGoldrick and Andre (1997) indicated in their study that a consumer is loyal because he lives close to the store where he shops and location is convenient for the shopper to travel frequently. East et al (1997) also emphasized that negative relation between the degree of loyalty and the time used by the shopper to travel to the store or the excess of distance the shopper has to travel on the habitual route to go to the store. The perception of time and efforts made by the consumer influence the consumers perception of service convenience (Grewal et al, 2002). Along with the convenience of location, longer and convenient opening hours of the store also has an influence on the purchase pattern of the customers in the store (Hansen and Deustcher, 1978). Martinez- Ruiz et al (2010) also concluded that enhanced of convenience store location and convenient store opening hours has a positive effect on the customer store satisfaction. The store convenience also depends upon the store layout and design. The successful layout of the store should be clear and legible and with proper label, signage and information posters make the store design favourable and attractive (Spies et al, 1990; Theodoridis and Chatzipanagiotou, 2009). Store atmosphere refers to the environment of the store by including all the visual elements of the physical store environment like colours, display, decorative features, ease of movement, well displayed product and signage on shelves etc. (Theodoridis and Chatzipanagiotou, 2009) and this increases the customers positive buying experience and satisfaction from the store (Babin and Darden, 1996). Miranda et al (2005) also asserted that shelf signage and display makes the location of products easier and it has an impact on the satisfaction of the customers. f. Relationship marketing in the retail context: Relationship marketing (RM) includes analysis, planning and control of measures in order to initiate, stabilize and restore the business relationship with the corporate stakeholders like
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customers to creation of mutual value (Bruhn, 2003). The main focus of RM is to retain the current customers instead of acquiring new customers and the most fundamental element is to create a dialogue between the customer and marketers in order to develop long term loyalty (Gummesson, 1999; Parvatiyar and Sheth, 2000; Whyatt and Koschek, 2009). The outcomes of the successful RM programmes for the retailers are the various loyalty factors such as: customer satisfaction with the retailers service to the customer, willingness of the customer to buy more products and other variety of the products from the store, increase in repeated store visits and positive word of mouth (Christy et al, 1996; Reichheld, 1996; Wong and Sohal, 2003; Whyatt and Koschek, 2009). The customer loyalty is beneficial as it leads to lower cost associated with the service as the customers are familiar with the operations, the customers will complain instead of defecting the company, customers make referrals to new customers, customers are likely to buy products through different channels and retailers earn more from increased share of spending from each customers (Duffy, 2003; Christy et al, 1996), but however, few researchers (for e.g. Ryals, 2003; Reinartz and Kumar, 2002; Stone et al, 2003) in their studies asserted that loyal customers does not necessarily guarantee profitability and the way loyal customers are handled in the organisation contributes to income generated and their cost effectiveness. Retail staff plays a significant role in the RM with the customers and this encourages to repeated visits and positive word of mouth (Selnes and Hansen, 2001, Arrondo et al, 2002). RM can lead to perceived value for money, convenience and reliability that help to drive the customers choice for the products (Gronholdt et al, 2000). The confidence in the retailers offers to the customers leads to successful RM and this helps to enhance customer satisfaction which makes the customers loyal (Henning- Thurau et al, 2002) and satisfaction takes place through matching of customers expectations and perceived performance of retailers (Gwinner et al, 1998). Service quality in retail environment has a positive influence
on the satisfaction (Rust and Oliver, 1994) and this leads to positive attitude of the customers to recommend the store to others (Whyatt and Koschek, 2009). Magi (2003) also asserted that shopping orientation had a positive effect on the customers share and personalizing orientation such as more personal interaction with the sales personnel had a direct effect and stronger moderating effect on the customers satisfaction- share relationship. The behaviour of the customers to recommend the store to others leads to increase in intentions to repurchase in the future (Sivadas and Baker-Prewitt, 2000). Many companies are realising the fact that their future depends upon applying a more customer centric approach to serve their customers (Freeland, 2002). In order to successfully implement a customer centric approach to the business, the organisations needs to critically assess the fact that which customers the organisation want to build relationship with and which customers it does not want (Rigby et al, 2002). The customer centric approach recognizes the fact that customers are not just mere end of the value chain but they are a part of the product and service delivery continuum. It also recognizes the fact that all customers are not created equally and the development and extensive knowledge of right customer is critical to the business (Reynolds, 200 2).
With the realization of fact that customers cannot be created equal, the organization should aim to target the right customers in order to fulfill its objectives. It important for the organization to develop a customer strategy to determine who the customers really are and what the customers wish for from the company and then distribute the product and service resources as per their insights (Wollen and Nunes, 2002).
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g. Concept of Loyalty Schemes: Loyalty schemes are the established features of retail and service and there are a number of various major groups of loyalty schemes include: retailers loyalty schemes, financial service loyalty schemes, frequent flyer and other travel reward loyalty schemes, online reward loyalty schemes, location based loyalty schemes and coalition loyalty schemes (Capizzi and Fergusson, 2005; Rowley, 2004). There are researches to detect and measure the impact of loyalty schemes and determine a relationship between loyalty scheme membership and behavioural and attitudinal loyalty or customer retention (Noordhoff et al., 2004; Bellizi and Bristol, 2004; Bolton et al., 2000; Whyte, 2004). Stone et al. (2004) stated that loyalty schemes themselves does not generate loyalty through means of their reward system, but they are important to gather and analyse information that can be used to enhance and effectively design the organisations offerings. Loyalty and Loyalty schemes: A significant core research into the loyalty programmes remains concentrated on the fact whether the loyalty schemes provoke loyalty and if they do provoke loyalty, the kind of loyalty that they provoke and the relationship between loyalty and loyalty schemes is important as it may affect the customers initial and continuing engagement with the scheme and also will affect the willingness to continue to identify with the particular product, brand or store (Rowley, 2007). Few authors (for e.g. Whyte, 2004; Bolton et al, 2000; McIlroy and Barnett, 2000) have discussed in their research that loyalty schemes have an effect on the behavioural loyalty or calculative commitment rather than developing affective loyalty. Whyte (2004) in his research suggested that loyalty schemes could create spurious loyalty and it may be successful in converting such loyalty into commitment. Noordhoff et al (2004) in his study found out that loyalty programmes can have an impact on the attitudinal and
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behavioural store loyalty if the number of alternative programmes such members subscribe to is limited and also that these customers do not take loyalty cards for granted. There is also an issue of polygamous loyalty as many customers are members of several loyalty schemes in the same industry and many researchers would regard possessing several loyalty cards as a sign of disloyalty (Ehrenberg, 1988; Davies, 1998). Another important factor is the extent to which the loyalty schemes contribute to the coherent value proposition of the customers (OMalley, 1998). According to Bellizi and Bristol (2004), there are several other factors like quick moving line at the checkouts and freshness of the products which are of more important to the customers than loyalty schemes. Reward design: Rewards are the key mechanism in order to make customers participate in the loyalty schemes and OBrien and Jones (1995) had identified five elements which add to the value of loyalty schemes, namely: cash value, choice of redemption options, aspiration value, relevance and convenience. Parker and Worthington (2000) argued that the customer loyalty schemes are affected by the factors of satisfaction and degree of return the customer feels from the loyalty schemes and what is available from other loyalty schemes. OMalley (1998) stated that due to availability of too many reward schemes, customers expects rewards as a part of routine shopping and this has lead them to place low value to the loyalty and reward schemes. Strauss et al (2005) states that process and convenience are important for the loyalty schemes and should represent additional value to the customers his finding suggest that benefits should be calculable at any point of time without the additional efforts by the customers. The rewards schemes can be dependent on the transaction between the customer and the business and rewards can be direct or indirect in nature (Yi and Jeon, 2003). The direct rewards are those which give an additional value proposition to a given product
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whereas indirect rewards are those which are not relevant to a given product. The rewards can also be differentiated as immediate (for every visit) and delayed (after number of visits) rewards. Kivetz and Simonson (2002) stated that the customers value perception can also be influenced by the type of rewards: luxuries are often more valued than necessities as rewards. Customers are more loyal to the programmes, which gives them a sense of loyalty than those loyalty schemes which gives just financial incentives (Rosenbaum et al, 2005). Some researchers (for e.g. Byrom, 2001; OMalley, 1998) have stated that loyalty schemes alone cannot generate loyalty by mean of its rewards mechanism and thus the customer data can be converted into the information and knowledge which can be effectively converted to tailor organisations offerings in term of price, range of products, service quality and convenience ( Stone et al, 2004). However, the quality of this data is dependent upon the extent to which loyalty scheme membership represent the consumer behaviour of potential and current customers and the extent of polygamous loyalty (Dowling and Uncles, 1997; Mauri, 2003). Sharp and Sharp (1997) conducted a research to identify whether loyalty programs in the store leads to increased purchases and their research indicated positive results towards purchases and excess loyalty to the store. Wright and Sparks (1999), in their research asserted that 76 percent of the cardholders who participated in the loyalty programs did not change their shopping behaviour. However more recently, Bellizzi and Bristol (2004), found that loyalty card scheme did not have any association to supermarket loyalty and the customers who frequently used the loyalty cards were more likely to shop in several retailers and make use of the programs from various retailers. Smith et al (2003) studied the customers perception of loyalty cards and suggested that members of the loyalty program tend to spend more time and money in the store and were more likely to visit store again. Literature tends to provide a positive relationship between loyalty programs and store loyalty (Wulf and
Odekerken-Schroeder, 2003; Bridson et al, 2008) and Wirtz and Chew (2002) found that by offering incentives in the loyalty programs to the satisfied customers lead to their increase in word of mouth behaviour and word of mouth behaviour is a common criteria to loyalty assessment and supported the loyalty program and store loyalty positive relationship. The study by Magi (2003) provided mixed support for the posit ive effect of loyalty cards on the customers share. The loyalty card advantage is the degree to which the customer perceives to derive benefits and appreciation and different members of the loyalty programs perceives these benefits in different ways (Leenher et al, 2007) and the consumers perception of the advantages derived from the loyalty program influences the customers decision to adopt the loyalty program and to remain loyal to the store (Demoulin and Zidda, 2009).
ii. Models of Customer Loyalty:
a. Value creation model of loyalty: Reichheld (1996) developed a model of loyalty which is based on creation of value for the customers and not on profit. The three forces customers, employees and investors play an important role in the forming the forces of loyalty. Reichheld describes that a linkage exists between loyalty, value and profit and the three forces can be measured in terms of cash flow in the system. Loyalty is inextricably linked to creation of value as both cause and effect. As an effect, loyalty measures permanently whether the company has been successful in delivering superior value or not. There is defection in the company due to lack of value for the customers. As a cause, loyalty enables to create a chain reaction. The model is explained by Reichheld as follows: With the best customers in the business, revenues and market share grow and as the value proposition of the company grows, the firm can be more selective in acquiring new customers and concentrate on investment on further more profitable
and potentially loyal customers, which will enable the customer in further simulating sustained growth.
y
Sustainable growth will enable the business to attract can retain best work-force in the market. With consistent delivery of superior value to the customers, the loyalty of the employees increases as they feel more satisfaction and pride in their work. Long-term employees further can learn how to still deliver additional value which would enable reinforce employee and customer loyalty.
Long term employees can be helpful in reducing cost and improve quality which could further add to customer value proposition and generate superior productivity. The added surplus productivity can be helpful for the company to give compensation and better tools and training for the employees, which would further enable to improve productivity, compensation growth and loyalty.
The ever increasing productivity with improved efficiency of dealing with loyal customers will further give cost advantage to the firm which will be difficult for the competitors to match with. The cost advantage with steady growth of number of loyal customers will be helpful in generating profits which could attract and retain current and potential investors in the business.
Loyal investors act as partners who will help to stabilize the system, lower the capital cost and will ensure that sufficient cash is put back into the business to further fund the investment projects which would increase the value- creation potential of the business.
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This model demonstrates that a company which follows a loyalty based management should concentrate on the resources available to the firm in order to offer a superior value to the three forces. The model illustrates that creating value for the customers is a chain process. The model demonstrates that by targeting the right customers and by delivering the customer values leads to loyalty from the customers side and this leads to growth for the organisation. The organisation growth leads to the loyalty of the employees as employees would like to be associated with the company which grows in terms of competition and profits. The employee loyalty leads to better productivity and efficiency which gives a competitive advantage in terms of cost and production. The competitive advantage will lead the investors to increase investments in the company which gives the organisation to more resources to invest in better customer plans to pull more customers towards the store which will lead to more satisfied new customers and win their loyalty. Thus, this entire process is a continuous process as illustrated by Reichheld (1996).
b. Extended ECSI model of loyalty: The European Customer Satisfaction Index (ECSI) model is a well designed and establishes tool to assess the customer satisfaction and its background and includes the constructs of customer satisfaction, perceived quality, expectations, image, loyalty and complaints (Gronholdt et al, 2000; Cassel and Eklof, 2001; Vilares and Coelho, 2004) and has been widely used in retail in number European countries. The earlier ECSI model only explains loyalty related to satisfaction and brand or firm image and rigorous extension of ECSI model is very much desirable (Ball et al, 2004). The extension of ECSI model by Ball et al (2004) includes two new latent variables, which aims at better understanding of the customer loyalty. The figure below shows the extended model in which the circles represent constructs, which are related with a number of evident variables not indicated in the figure below. The lines indicate a causal relationship between various constructs. The extended model includes nine interrelated latent variables with two exogenous variables i.e. image and communication. The bold circles and lines represent constructs and variables specific to the extended ECSI model.
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ECSI- extended model
Extracted from Ball et al. (2004)
Satisfaction and loyalty: Satisfaction is often confused with loyalty and satisfaction is an emotional feeling or reaction (Westbrook, Newman, Taylor, 1978) and it is result of intricate process that requires perceptive of the psychology of the customers. Loyalty and satisfaction are interrelated but also they are evidently distinct from each other. Oliver (1999) had considered many conceptual bases for this distinction but in general, higher satisfaction is has been considered as a distinct factor for higher loyalty (Hallowell, 1996; Strauss and Neuhaus, 1997), and found to be associated to higher loyalty in ECSI model as well (Cassel and Eklof, 2001). According to Jones and Sasser Jr., (1995), there is always chance of customers to be lured always by the competitors unless the customers are
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totally satisfied and satisfaction is seen as an indirect influence on the loyalty from communication and trust. Trust and loyalty: Trust is a significant variable in every relationships and those who are not willing to trust a vendor or store in competitive market are unlikely to be loyal (Moorman et al., 1993; Morgan and Hunt, 1994). Several authors have described the importance of trust in determining customer loyalty (for e.g. Lim et al., 1997; Garbarino and Johnson, 1999; Chaudhari and Holbrook, 2001). Trust is considered to be having two components, performance or credibility and benevolence trust (Ganesan, 1994). Other authors (for e.g. Chaudhari and Holbrrok, 2001; Gabarino and Johnson, 1999) have suggested the effect of credibility trust in determining loyalty, but Singh and Sirdeshmukh (2000) and Sirdeshmukh et al. (2002) have strongly argued for benevolence as a prime component of trust which could contribute to loyalty of customers. Ball et al (2004) considered that benevolence is of prime importance in determining loyalty because in many service markets where there is importance of customer loyalty have a credence component which means that the consumers cannot determine whether the service provided is of high standard. In such case, the consumer has to trust the benevolence and reliability of the service provider. The benevolence trust can also be critical as the consumer could consider the firm to be in powerful position due to difficulty in switching to competitors. In the extended ECSI model, Ball et al (2004) have considered that the perception of trust included primarily benevolence and global trust. In some markets with appropriatee alternatives, require global and benevolence trust and this could lead to negative loyalty. Positive benevolence and global trust does not necessary ensure positive loyalty as in some markets, where there are many trustworthy vendors, a
customer could trust vendors equally and this trust could become a regular part of doing business and therefore the customer can be loyal without having any reference to trust. Thus, trust- loyalty relationship could be positive or negative depending upon the market situation (Ball et al, 2004). Company image, trust and loyalty: According to Anderson and Weitz (1989), there is a strong relationship between company reputation and trust. In this model, the construct of company image include factors like stability and firm establishment, contributions to the society, concern with customers, reliability of the firms public statements, innovation and future plans (Ball et al, 2004) and the model argues that trust is developed to some extent on the reputation and there are positive direct effects of image on loyalty. The consumers may be loyal to the firm or brand because it is viewed as having a positive image on other customers and in relation to credence goods and this could make the customer unwilling to switch to another brand or firm. Communication trust and loyalty: Communication is a new component to the ECSI model and communication can indirectly support the customer loyalty (Ball et al, 2004). The customer service providers often supplies information which the customer personally benefits with the least efforts on part of customers to decode the communication and determine its utility. The communication is often personalised or delivered in more person to person format. There enough evidence from various authors (for e.g., Lemon et al, 2002; Jones et al, 2000; Parasuram et al, 1991; Allen and Wilburn, 2002) to support that personal relationships, personalization and customization plays important role in obtaining loyalty. Good communication should have effect on all aspects of relationships particularly on trust, satisfaction and loyalty and communication in this extended model is considered as an exogenous variable (Ball et al, 2004).
Complaint handling, trust and loyalty: Complaint handling is viewed as a special case of customer interaction in this model. If the complaints are taken care of improperly or slowly, then the customers can view this as opportunistic behaviour (Morgan and Hunt, 1994 as an precursor of trust) or as incompetence and this could have a pessimistic effect on credibility trust (Ganesan, 1994) and therefore negative effect on loyalty (Ball et al, 2004). c. Model of consumer perception and store loyalty intentions for Supermarket retailers: Sirohi et al (1998) propounded this model which examines a link between and effects of various factors of customers loyalty intentions in the retail supermarkets. The model effectively considers three store loyalty intentions: intent to continue purchasing, customers intent to further increase the future purchases and customers intention to recommend the store to others. Sirohi et al (1998) have considered supermarkets for the model where both product and service quality plays an important role. The conceptual model is based on the data collected from various shoppers of supermarkets and the data is collected by telephonic survey technique. The model has nine constructs which measures consumers perception based on the survey questions which are as follows: Store operations (SOP): which are the issues related to operation of the store such as store opening hours, training and selection of employees. Store Appearance (SAP): which includes the ambience and physical appearance as well as the facilities in the organisation. Personal service (PSP): the services provided by the cashiers, baggers, clerks and store management.
Sales promotion (SPP): special sales offers in the store. Relative price (PRP): the price in comparison to the prices of similar products in other stores. Merchandise quality (MQP): the overall perception of quality of the products and variety in the various categories of brands. Perceived value (PV): value for money at the store. Perceived value of competitors (PVC): the perceived value at the competitors store. Store loyalty intention (SI): this demonstrates the store loyalty intentions of the current customer of the store. The model refers to SOP, SAP and PSP as the three service quality constructs as the measure used for the three constructs were very similar to those used for measure service quality in other studies. This model is an adaption of the model proposed by Dodds and Monroe (1985) and the model by Sirohi et al (1998) has three distinct features like: introduction of service quality construct along with the merchandise quality construct, addition of perceived value of competitor construct and focus on customer loyalty intentions and the entire model has three important links namely: Effects of extrinsic cues on merchandise quality perception, The background or antecedents of perceived quality, along with The determinant factors of store loyalty intentions. The diagram of the model by Sirohi et al (1998) display that customer satisfaction and store loyalty intentions are the dependent variables whereas, store attribute, product attributes, service attributes and price attributes are all independent variables. These independent variables have a direct impact on the store satisfaction which affects the store loyalty intentions of the customers.
y y y
Conceptual model of Store Loyalty intention as function of perceptual constructs
Extracted from Sirohi et al, (1998) Effects of extrinsic cues on merchandise quality perception: Zeithaml (1988) defined perceived quality as the consumers judgement regarding the extent of superiority or excellence of the product and he also suggested that consumers use cues to
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determine the product quality. These cues are generally classified as extrinsic or intrinsic (Olson and Jacoby, 1972). Intrinsic cues include factors like the physical composition of the product such as flavour or colour of the product whereas the extrinsic cues include the factors which are controllable such as brand name and price. The retailers cannot manipulate the intrinsic cues of the products because they cannot be altered unless the ingredients of the product are altered, therefore, it is important that the retailers should aim to understand the extrinsic cues of the shoppers perceived value merchandise quality which has effect on the shoppers store loyalty intention (Sirohi et al, 1998). The extrinsic cues are relevant to the supermarkets firstly because assessment of intrinsic cues by the customers is more time consuming and the customers (mostly working women, men and single shoppers) use the supermarket product information significantly less; Secondly, extrinsic factors become more important when the quality is difficult to evaluate as in the case of experience goods like food products (Zeithaml, 1988). Many authors (for e.g., Dodds et al, 1991; Mazursky and Jacoby, 1985; Nelson. 1974; Rao and Monroe, 1989) have based their research on extrinsic cues on factors like price, brand name, store name and level of advertising, but the model by Sirohi et al (1998), had focused on perceived- price quality relationship. The model is based on the model by Monroe and Krishnan (1985) and asserts a significant relation between perceived price and perceived quality, but the model does not expect the price to be a very important extrinsic cue when other cues are easily available. Service quality is used as an extrinsic cue in the consumers evaluation of the overall product quality and the model focus on the entire merchandise quality instead of the quality of particular product or brand because usually the customers purchase basket or carrier full of goods instead of particular single product during their shopping trip (Sirohi et al, 1998). The distinct cues of overall service quality is provided by the three service quality constructs of store operation (SOP), perception of store appearance (SAP) and perception of personnel
service (PSP) and the scales used in the model of Sirohi et al. (1998) to measure these three constructs are similar to those used to measure service quality (Parasuram et al, 1985, 1988; Cronin and Taylor, 1992). The perception of store appearance means the perception of physical attributes of the entire service delivery system and gives a tangible clues of the service quality in the store (Bitner, 1992; Baker et al, 1992) and includes factors such as, effective layout which could reduce shoppers search time, improve delivery processing efficiency, increase service consistency as well as reliability and enable effective customer orientation inside the service delivery system (Sulek et al, 1995). Also, the perception of personnel service has an overall impact on the evaluation of service quality and value (Bolton and Drew, 1992). The three constructs SOP, SAP and PSP could positively influence the customers perception of the overall merchandise quality if the customers use the extrinsic cues in order to determine the service quality contributing to customers overall shopping experience (Sirohi et, al, 1998). According to Sweney et al. (1995), good service quality could improve the shoppers perception of image of the store and lead to positive perception of the overall merchandise quality. Antecedents of Perceived value: Value has been considered of importance for the marketers (Fredericks and Salter, 1995; Vantrappen, 1992; Dodds, 1991) and Zeithaml (1988) defined it as what you get for what you pay and it is measured in utility per dollar or pound. The value in the supermarket consist of various benefit factors such as variety of products, personnel service, facilities, quality of products , nutrition, convenience and freshness of the products (Bishop, 1984; Doyle, 1984) and Clemmer (1990) has described superior service quality as the third ring of perceived value after basic product and extended support service. The presence of service
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reduces the non-monetary sacrifices made by the shoppers (e.g. time) and increases their benefits of shopping and perceived service quality has been found to have a positive influence on perceived value of service (Bolton and Drew, 1991). Sirohi et al (1998) stated that it is important to assume the competing alternatives while forming the perception as perceived value for money of the competitors important for many consumers. Of the perceived value for money of relevant competitors increase then the consumers perception of value for money for the concerned store decreases. Determinants of store loyalty intentions: Sirohi et al (1998) had considered three constructs of store loyalty intention in their model namely: willingness to repurchase, willingness to purchase more in the future and the willingness to recommend the store or product to others. Many researchers have focused on the impact of service quality and satisfaction on the store loyalty intention or impact on the perceived value on the store loyalty intentions. And many (for e.g. Taylor and Baker, 1994; Cronin and Taylor, 1992) treat service quality and satisfaction as two distinct constructs as service quality is an attitude whereas satisfaction is often a transaction- specific measure. However, few other researchers (for e.g. Boulding et al, 1993; Zeithaml et al, 1996) do not distinguish between service quality and satisfaction and consider them one and the same. Researchers (Dodds et al, 1991; Zeithaml, 1988; Sweeney et al, 1995) have focused on the effects of perceived value on the behavioural intention and it is considered of having a mediating effect on price and other information on purchase intention. Perceived value has got a distinct importance as many consumers consider an acceptable price range before making purchases and these consumers do not purchase outside their perceived price range (Dodds, 1991). Most researchers in this area consider only willingness to but behavioural intention but do not consider other intention measures (Sirohi et al, 1998) and therefore,
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considered the impact of perception of value of money and service quality on store loyalty intentions in their model. The model also discusses the perception of value to be a more relevant predictor of loyalty intentions if there is a presence of a highly competitive local retail environment. The study by Bitner (1990) also supported and linked that the customers perception of the service quality helps them to remain with the organisation, recommend the sore or organisation to others, increase the purchase and low levels of switching and complaints. Bitner (1990) found a strong relation between the customer perception of store service quality and store loyalty intention. However, the study of Bitner (1990) focuses mainly on the service aspect of the store and customer perception and therefore the study of Sirohi et al (1998) on the customer perception and store loyalty intention is more extensive as it includes aspects of product quality, price, value for money and store qualities along with the service factors.
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3. Research Methodology
The aim of the research is to critically analyze customer loyalty as a dependent variable on the factors that influence the customer loyalty in the supermarket retail stores. The specific objectives of the research concerned include: evaluation of concept of customer loyalty, identification and analysis of the causal factors of the customer satisfaction and loyalty in the supermarket retail stores; and to identify the factors that the supermarkets should aim and improve in order to make their loyalty programs effective and retain customers in the stores. This section discusses the various methods and approaches to be adopted to achieve the above mentioned aims and objectives of the research. This section also aims to understand the reason for choosing and not choosing certain methods and approaches by appropriately stating their advantage and disadvantages. The research design, data collection methods and data analysis methods were appropriately selected in accordance to the research aims and objectives. All these are effectively presented in the sections to follow.
i. Research Philosophy and Approach: The research philosophy that is adopted in the research gives an assumption on the way the researcher views the world around him and the philosophy will determine the research strategy and the methods used as the part of strategy by the researcher and in will also help to influence the practical consideration (Saunders et al, 2007). The philosophies differ on the basis of the views and preferences of the researcher and accordingly there are three different types of philosophies namely: epistemology, ontology and axiology and each differs in the way that will influence the research process (Saunders et al, 2007).
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Epistemology is concerned with the acceptable knowledge in the field of study. This philosophy should be adopted by the researcher who is comfortable with the collection and analysis of facts and such researcher places more authority on the facts which can be presented more in a form of statistical data table. Epistemology is broadly sub-divided as positivism, interpretivism and realism (Saunders et al, 2007). Ontology is the branch of philosophy which is related with the nature of social phenomenon as entities and is subdivided into two branches: objectivism and subjectivism (Saunders et al, 2007). Axiology is branch of philosophy which studies judgement about values in the field of aesthetics and ethics (Saunders et al, 2007). According to Heron (1996), a researcher adopting the axiology philosophy will be articulating their values and making judgement on that basis and also such researcher will be demonstrating values at all stages of the research process. Ontology is concerned with the nature of reality (Saunders et al, 2007). According to Blaikie (2000, p.8), in ontology, the claims are made up from the social reality and these claims consists about what exists, what looks like, what variables make it up and in what manner these variables interact with each other and the ontological assumptions are concerned with what we believe constitute social reality. The researcher has taken the subjectivist aspect of ontology as the subjectivist researchers view is that the phenomenon is formed due to the perception and consequent actions of the social actors. The individual customers perceive and interpret different situations in different ways and this interpretation has an effect on the actions and the nature of social interactions by the customers. As a researcher, it is important to understand the subjectivist reality of the customers to be able to make sense of and understand their motives, actions as well as
intentions which make some meaning. The subjectivist view is that the customer loyalty is produced as a result of the social interaction between the service providers and the customers and this is continually being revised and changing (Saunders et al, 2007). The research approach adopted by the researcher in this research is an inductive approach as this approach helps to develop a clear understanding by which the humans interpret their social world. Deductive approach has a inclination of using a very inflexible methodology and it also does not allow any alternative explanation to what is happening in the research (Saunders et al, 2007). Whereas, inductive a pproach is concerned with the context in which are events are occurring and this approach studies a very small sample of subjects and variety of methods can be used to collect the data to establish the different views of the phenomena (Easterby- Smith et al, 2002). ii. Research design: The research design consists of the structure for the collection, measurement and analysis of the research data and aims at allocation of limited resources for the crucial choices in the methodology. The research design includes structure of the research problems and the plan of investigation in order to obtain empirical evidences to prove relationship between variables of research (Cooper and Schindler, 2008). The research design is the general plan which helps the researcher to understand and answer the research questions and it contains well stated objectives derived from the research questions. The research design also specifies the sources from which researches intends to collect the research data and consider elements which will affect the collection of data such as access to data, time, location and money as well as discussing the ethical issues (Saunders et al, 2007).
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Research can be exploratory, descriptive or causal in nature depending upon the purpose of the research and the research question (Saunders et al, 2007). Exploratory research is conducted in order to clarify any ambiguous problems. The purpose of exploratory research is to identify the problem and provide information for the future researches (Zikmund, 2000). An exploratory research is useful in determining what is happening; to help find a new insight; to ask question and to assess the phenomenon in new light (Robson, 2002:59). Exploratory research is useful to clarify the understanding of the problem and when the researcher lacks clear ideas of the problem such as nature of the problem (Saunders et al, 2007; Cooper and Schindler, 2008). Descriptive research aims to describe the accurate characteristics of the population, events, situations or phenomenon. Accuracy is very important in descriptive research, although errors cannot be completely eliminated, but a good researcher aims for precision in description (Zikmund, 2000; Robson, 2002:59). In causal or explanatory research, the main aim is to determine the cause- effect relationship between various research variables and causal research aims to establish that occurrence of one variable has an effect on the other variable. The researcher can go ahead and develop statistical test based on the data and form correlation in order to help understand the relationship between variables (Saunders et al, 2002; Zikmund, 2000). An exploratory research is undertaken by the researcher when not much information is readily available regarding the situation and thus extensive preliminary work needs to be done in order to obtain familiarity with the phenomenon in the situation as well as to understand what is occurring before the researcher need to develop a model and setup a extensive design for more detailed investigation. Exploratory studies are conducted when
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very few studies are being carried in the research area and thus extensive interviews needs to undertaken to get a grip on the situation and understand the phenomenon (Sekaran, 2004). Thus selection of exploratory studies is justified as the purpose of the research is to explore the factors influencing customer loyalty in supermarkets. This type of research is specially chosen as it helps to diagnose the situation, screening alternatives and discovery of new ideas related to customer behaviour and their loyalty intentions towards the store. iii. Research methods: Research methods can be of two types: Qualitative research and Quantitative research (Cooper and Schindler, 2000; Schiffman and Kanuk, 2000) and the selection of particular methods depends upon the type of information required in the research. The focus of the qualitative research is not on numbers but on words and observation including other expressive descriptions i.e. qualitative research collects analyses and interprets data which cannot be quantified into statistical forms of numbers and thus qualitative research is termed as soft research (Zikmund, 2000) The qualitative research studies very few respondents and the qualitative data is all about texts such as detailed description of situation, events and interactions. The qualitative research is less time consuming due to small sample size and insights are developed as the research progresses, thus reducing the data analysis duration (Cooper and Schindler, 2000). Qualitative method is a part of the phenomenon where unambiguous objectivity is recognized by the researcher. The data collection techniques in qualitative research includes in-depth interviews, focus groups as well as projective techniques (Schiffman and Kanuk, 2000) Quantitative research, on the other hand, is to represent the quantity or the extent of some phenomenon in numerical data form (Zikmund, 2000). Quantitative data consist of the
responses of the participants which are categorized and reduced to numbers which can be easily manipulated for statistical analysis and this research has larger sample size which lengthens the data collection duration (Cooper and Schindler, 2000). Quantitative methods originated from the positivist paradigm and centered on objective truth, scientific calculation methods and systematic relationship, thus helping to form generalisation of the particular linkages between elements or variables of problems. Quantitative methods are useful when it is necessary to present the data, which are the formal interpretation of the phenomenon in the social world and then to represent the interpretation of the phenomenon in an accurate manner (Malhotra, 2004). Considering the above factors, the researcher adopted a qualitative method of conducting the research as it is acceptable according the adopted research philosophy and the researcher aimed to derive more quality on the data by analysing a very few respondents to understand the consumer behaviour in the supermarket retail stores.. iv. Data Collection Methods: Data are the facts presented to the researcher from the study environment and are categorized as primary and secondary data. Primary data is original work of research or raw data and is collected from sources such as letters, interviews, panels of respondents, laws and regulation. Primary data is more authoritative in nature as the information is not interpreted by a second party (Cooper and Schindler, 2000). The internet could be used as primary source of data when questionnaires are administered over it. Secondary data is interpretation of primary data and is obtained from sources such as encyclopedias, newpapers, internet journals, company records and archives, internet websites and many other sources (Cooper and Schindler, 2000). In academic research, both secondary and primary forms of data are used depending upon the
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research problems and methods of research (Clark et al, 2003), therefore, in this research, both primary and secondary forms of data are applied. a. Secondary data: Secondary data are gathered and recorded by someone for a purpose prior to the current needs of the research. Secondary data is usually historical in nature and it does not require any access to the respondents or subjects (Zikmund, 2000). Before obtaining details on the secondary data used in this research, it is important to examine the advantages and disadvantages of the secondary data. The main advantage of using secondary data is that it is a time and money saving resource of data (Ghauri and Gronhaug, 2005). It is less expensive to use secondary data than to collect data on your own. The researcher can spend more and efforts time analysing and interpreting the data if the data is already collected (Saunders et al, 2007). Secondary data can be useful to identify the problem, help to prepare effective research design, answer certain research questions and test the research hypothesis by interpreting the primary data more precisely (Katobe, 2002). By re-analysing the secondary data, it possible that the researcher can make some unforeseen or unexpected discoveries (Saunders et al, 2007). As secondary data is collected for a specific purpose, which can differ from the research question or objective (Descombe, 1998), the usefulness of the secondary data could be inappropriate. The data collected through secondary sources can also be misleading as it has been collected few years ago and is not current or dependable, thus the question of accuracy and relevance arises for the secondary data (Saunders eta al, 2007). Therefore, before collecting secondary data, it is important to evaluate on the above factors.
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Although there are few disadvantages associated with the secondary data, it is necessary in the research as it helps to identify the research problem, design approach to the problem, answer few research question and also helps to effectively interpret the primary data. The secondary data in this research is collected from books, journals, newspaper articles and periodicals and it is presented primarily in the form of literature review in the research. The secondary data provided the initial framework for the research by analysing the earlier works in the research topic. b. Primary data: The primary data is the data which is collected or assembled especially for the research project in hand (Zikmund, 2000). The process of obtaining the primary data can be very time consuming and expensive (Malhotra, 2004). The drawback of primary data is that it is a lengthy process and consumes lots of resources like time and money, but the primary data can be of advantage to the researcher as it is the first hand data that is more reliable and extensive in comparison to the secondary data (Clark et al, 2003). There are several methods of collecting primary data such as, observation, interviews and questionnaires (Saunders et al, 2007). For the present research, interview is selected as the methods of collecting the primary data. An interview is the purposeful discussion between two or more people (Kahn and Cannel, 1957 as cited in Saunders et al, 2007) and interviews could help to gather valid and reliable data which are relevant to the research questions (Saunders et al, 2007). Interviews can be structured, semi-structured and unstructured in nature (Saunders et al, 2007). A structured interview is based on the standards and predetermined and identical set of questions and is useful for collecting quantifiable data while having a social interaction with
the respondents. Semi-structured interviews have a set of question that needs to be covered but can vary from interview to interview. Unstructured interviews give the interviewee the freedom to talk about events, behaviour and beliefs in relation to the research topic area (Saunders et al, 2007). The interview as a form of research method for collecting qualitative data can be useful in providing a clear insight about an individual or group about the perception in which they think of the world and how they interpret their perception into reality. The method of interview is different from the questionnaire method because in interview, respondents often give extra comments and observation which helps the interviewer to clearly identify and effectively assess the emotions, values and attitudes, which are important, in this particular research to determine the customers loyalty intentions towards the store (Clarke et al, 2003). The interviews depends upon the interviewers skills to effectively articulate the verbal and non-verbal aspects of the communication to respondents for successful interviews (Clarke et al, 2003). The researcher selected the interview method as a tool for collecting the primary data as to become part of the as an active participant and in interviews, the interviewer has some level of control over the conversation (Silverman, 2006). The interviews were conducted on the shop floor of the Sainsburys Convenience Store in Penarth, UK. The customers were asked questions in a semi-structured manner to determine their perception about the store and to determine their loyalty intentions. The interview questions were designed as to derive as much useful data as possible in order to facilitate the objectives and aim of the research. The questions were delivered to the customers as to derive more meaningful research data as possible. The researcher attempted to establish a rapport with the respondents in order to understand the world from their viewpoint.
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v. Sampling: Another important factor in conducting the research is the sample size which the researcher approaches. Sample are a sub-set of a large population and are often studied in order to learn about the larger population which they are part of. Samples can be collected on the basis of random probability or conveniently (Clarke et al, 2003). In this research, sample has been selected conveniently and on the basis of the customers shopping frequency in the Sainsburys store. The Customers who shopped at least twice every week were considered loyal by the researcher and thus based on this, 15 customers were interviewed for the research purpose. vi. Data Analysis: The researcher should get to know the data before using sophisticated techniques of analysing it. The preliminary data analysis is done in order to find the basic composition of the data that has been collected by the researcher. This provides a very useful insight for further analysis of the data. The initial or preliminary data analysis is carried out to determine the central tendencies and dispersion of the variables in the data set. The variables can be nominal, ordinal, interval or ratio and the measurement of such variables have a bearing, depending on which the researcher decides to use measures of central tendency and dispersion as appropriate or not (Parasuraman, 2004). Depending upon the description the data analysis, the primary data in this research were coded and arranged in much organised manner and presented in a tabular form. The responses of each respondent were noted in the table taking into considerations the key points of their responses. Then a comparison was made with the secondary data provided in the literature review. On the basis of the findings in the research, conclusion was developed.
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vii. Limitations: Due to limited resources, both time and money; the researcher had to reduce his plans on various aspects. The key problem faced by the researcher was to convince the people on being interviewed and extract the appropriate information. Getting permission from the stores to interview the customers was not easy due to tight schedule of the business and the permission was granted by the Store Manager and duration of permitted time was very less in order to collect extensive data for the research purpose. Therefore, the interview questions were designed in order to derive maximum data from customer in a very short time of interview. Getting the permission from the customer on the shop floor for the interview was also difficult as many customers were reluctant to give interview. However, even in the limited time provided, the researcher was able to conduct the personal interview satisfactorily by targeting sufficient sample size. The researcher could not make transcripts of the interview due to limited time available and therefore presented the audio recordings of the interviews in the digital format with the research to provide evidence and support for the research findings. viii. Ethical considerations: The avoidance of harm forms the cornerstone of the ethical for those who undertake research. Ethical concerns arise as the researcher plans to plan the research, seeks access to the organisation and individuals, collect, analyse and report the data. Research ethics is therefore present in all the stages of the research stating from formulating and clarifying the research questions till the formation of research findings and presentation. The ethical issues relates to privacy of the participants, consent and participation of the participants, maintenance and confidentiality of the data provided by the individuals and the organisations, reaction and effects on the participants in the form of embarrassment, stress, discomfort and pain while
seeking and analysing the data from participants and also the behaviour of the researcher form a part of ethical issues in research. Observation, interviews and questionnaire can provoke or could lead to stress and anxiety among the participants (Saunders et al, 2007). In this research, the ethical factors were considered in the process of formulating interview question and selecting the sample for research. The researcher took consent from the participants before conducting interviews and the participants were interviewed according to their comfort level. The responses of the participants were kept confidential and to maintain the confidentiality of the respondents identities, their names were not recorded and only audio recordings were kept as proof of the interviews. Permission of the store manager was taken prior to conducting the interviews of the customers in the store (see Appendix).
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4. Research Findings and Presentation: Table 1: Frequency of loyal customers shopping in store per week: Respondent Frequency of shopping in the store (per week) 1 3-4 times 2 2-3 times 3 Twice every day 4 Upto 5 times 5 At least twice a week 6 Twice every week 7 6-7 times a week 8 3 times 9 3-4 times 10 4 times 11 4 times 12 Twice a week 13 3-4 times 14 Approximately 4 times 15 2-3 times a week; even more on few occasions.
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Table 2: Perspective of loyal customer towards product aspects: Respondent Q1: Is Product Quality important? Specially buy bakery products and drinks. Quality matters a lot Yes. Sainsburys got good quality in products Quality is good in the store Q2: Do you look for Variety and choice in Products? Does not look for variety. Q3: Do you shop for In-store Brands?
Yes, always look for quality
5 6 7
Yes Yes Quality is good and important factor while shopping Yes
Yes. Sainsburys got better product quality as compared to other supermarkets.
10 11 12 13
Yes Yes Yes Quality is important
14
Yes
15
Price is important than quality
Prefer Popular brands instead of Sainsburys labelled brands. Yes Likes Sainsburys Taste the difference brand. A lot of variety in the Like the store brands store from the price and taste aspect Does not like variety. Does not shop for inShops for few store brands specific brands Depends upon the Only the basic goods price and availability Does not look for Yes, but according to variety in products the needs Sainsburys got a Sainsburys got good good variety of in-store brands. goods Yes Does not usually shop for in store brands except for few products like Sainsburys still water Does not look for Sainsburys got good variety and like to in store brands and shop very limited are priced as per the products. budget of the respondent Yes Some brands Yes Yes Yes Yes Always good Some in store brands are better than popular brands. Yes Sainsburys got Good in store brands but prefer popular brands. Not always. Buy Shops only expensive regular products in-store brands
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Table 3 Perspective of loyal customer on price: Respondent Q4: Is Effective Pricing important? Critical in purchase decisions Q5: Do you shop to get value for money? Looks for as much value as possible for money spent in store Yes. Q6: Do you shop for Special offers on Products? Special offers provide more value for money Sainsburys got good offers. Offers are very enticing Yes. To make shopping cheaper
Yes
Competitively priced products
Sainsburys is cheap as compared to other stores. But looks to spend more on quality of products. Yes
Would like to see Sainsburys give more value to customers. Always like to spend for value to get the same quality for cheaper price. Yes
6 7
Price is very important Very important and compares prices before shopping
8 9
10 11 12 13 14 15
Yes it is important Price is critical and Sainsburys products are priced competitively Yes Yes Quality is important with price Sainsburys got competitive pricing Would spend extra for the quality. Lower price is important
Yes all the time Sainsburys deliver better value for money than other supermarkets. Yes Sainsburys offer good value for customers Always Yes Yes On certain items Yes Depends upon quality
Looks for special offers if the quality and expiry of products is well. Sainsburys offers help to buy more for the family Yes Yes. Always go for valuable offers.
Yes Yes. The store has a good range of offers Yes, looks for deals Always Sainsburys got good offers Always looks for offers Yes, always looks for two for one offer No.
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Table 4: Perspective of loyal customers on service in the store: Respondent Q7: Do you look for Friendly staff in the store? Q8: Do the staff in Sainsburys handle queries and complaints well? Staff is well trained to help Well trained staff Q9: Is time efficiency of service important? Important for making shopping stress free. Yes. Sainsburys deliver service in time Staffs are efficient in busy times as well. Staff efficiency is good to give service in time in the store. Efficiency is good and staffs serves well in time. Very efficient Staff efficiency is necessary and timely service is important. Yes efficiency is important
1 2
Important for shopping experience Yes. Staff is good and friendly in Sainsburys Staff and service is good. Shop because of smiling and well trained staff Staffs are always good in Sainsburys. Staff in Sainsburys makes customers feel comfortable Always look for friendly staff Staff is important factor and will shop in the store where staff is friendly Yes
Yes, the staff is well trained to handle customers Staff is good in handling the customers Customer service is good in the store. Staff in Sainsburys are always helpful Staffs are well trained in the store. Yes. If the staffs werent good then the respondent wouldnt have shopped in the store. Staff is well trained and they help when needed Yes Yes Yes Always eager to help staff in Sainsburys Yes. Did not have any chance of complaints Yes. Sainsburys is good for service. Service varies with staff
6 7
Sainsburys got a good and friendly staff Friendly staff makes the difference Very friendly staff in the store Not much Staff contact Important to feel welcoming Yes
10 11 12 13 14
Staffs are well efficient to give service in time. Yes Yes Yes Important Yes
15
Yes
Yes.
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Table 5: Participation in loyalty program and possession on loyalty card in the store: Respondent 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Table 6: Perspective of loyal customers on store convenience and environment aspects: Respondent Q11: Is the store Location convenient? Q12: Are the Store hours Convenient? Q13: Do you hold any Importance for Store Display? Q14: Is store layout important? (for e.g. Parking space and Shop floor area) Shop floor space is important and Sainsburys offer good shop layout Parking is not convenient, but got wide aisles Parking is not good, but the shop floor space is really good. Aisles are wide and easy to move around
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Q10: Do you hold a Sainsburys Store Loyalty card (Nectar card) ? Yes. Nectar card is value adding to shopping Yes. Collecting nectar points Yes. Always shop with the points No loyalty card and perceives that loyalty card are not necessary to determine loyalty. Yes and hold a petro card as well Does not possess a nectar card Yes. Cards give more benefits in terms of points and shop with the valuable points Does not have a nectar card but got many other store cards. Does not have a nectar card. Gives more importance to quality, price and service than a card in deciding loyalty for the store Holds a nectar card and use every time while shopping Yes Yes, use always when shopping Yes and use regularly Yes, every time while shopping Yes, but does not regularly use it.
Location is convenient
Yes
Not always
Yes
Yes
Yes
Yes
Yes, well displayed offers in the store Display is good and clear in the store. Display is good in Sainsburys store and the
Not convenient from parking perspective
Yes
Should be located more towards Cardiff City Centre Very convenient
Very convenient
Yes
products are well arranged. Nice to have well displayed offers and products Display is very good in the store
Yes. Store location is convenient
Very convenient
Yes
Yes
Display is important to make finding of the products well. Display is fine in the store Display is important and would not shop in the store with untidy shelves
Easy access and wide aisles. The till areas are not spaced. Huge aisles as compared to other neighbouring stores, but layout are not always necessary. Sainsburys got good shop layout.
Yes well located
Store hour are convenient as per the respondents needs
10 11 12 13 14
Yes Very convenient Very convenient Yes Yes
Yes Yes Yes Yes Yes
Yes Yes Well displayed shelves Important to draw attention Not important. But safely stacked shelves are important Yes.
No complaints about the store layout Shop floor is important for the convenience and Sainsburys got wide aisles compared to other stores in the neighbourhood. Most of time yes Good Shop space Important Sainsburys got wide aisles Sainsburys got bigger space than other neighbouring stores Yes.
15
Yes. Shop in Sainsburys from convenience point of view
Yes
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Table 7: Behavioural and Attitudinal aspect of loyal customers: Respondent Q15: Are you satisfied with the Q16: Would you store? consider shopping in the future from the store? Very satisfied Yes. Very satisfied Yes Very satisfied Yes Q17: Would you recommend the store to others? Yes Already have recommended store. Already have recommended the store to friends. Recommend for the good service Yes. Already have recommended to friends Yes Already recommending the store to colleagues. Yes Yes Always Yes Would recommend Yes
1 2 3
4 5
Satisfied with the store Very satisfied
Depends upon the needs. Yes
6 7
Satisfied Very satisfied
Will always shop Yes
8 9 10 11 12 13
Satisfied Satisfied with the store Satisfied Yes Satisfied Very satisfied
14 15
yes Yes
Yes Yes would continue shop from the store Yes Yes Yes Yes, would increase expenditure with wider range of products Yes, till value for money is delivered Yes
Yes. Promote use of nectar card. Yes
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5. Research Analysis and Discussion: The literature review had identified various factors which influences the customer to become loyal to the store. In this research, the researcher had selected a few factors which could have a positive influence on the store loyalty. Although none of the respondent claimed to be loyal to the store, but they all stressed and responded on the various aspects that have a positive influence and determine loyalty of customers to the store. These factors are: Store Satisfaction (e.g. Sivadas and Baker- Prewitt, 2000; Anton, 1996; Fornell, 1992);
y y y
Repurchase and store recommendation (e.g. Sivadas and Baker- Prewitt, 2000); Frequency of purchase (e.g. Flavian et al, 2001); Nature of product quality, assortment i.e. variety and store brands (e.g. Sirohi et al; Martinez- Ruiz et al, 2010);
y y y y
Pricing strategy and in-store promotion (e.g. Miranda et al, 2005; Urbany et al, 2000); Sales personnel and service in the store (e.g. Sirohi et al, 1998; Magi, 2003); Loyalty cards (e.g. Magi, 2003; Sharp and Sharp, 1997; Smith et al, 2003); Store convenience and environment (East et al, 1997; Martinez- Ruiz et al, 2010).
The results of the Table 1 indicate the frequency of purchases by the loyal customers in the store. The results indicate that the loyal customers shop regularly and on an average at least 3 times in a week. The frequency of purchases from the store is an important factor influencing the customer loyalty to the store as stated in the literature review. The frequency of shopping in the store has a direct relation with the store loyalty and more the customer visits the store, more he/she is loyal to the store (Flavian et al, 2001). Martinez- Ruiz et al (2010) also supported this attribute and concluded that frequency of purchases can influence the degree of customers loyalty to the store. East et al (1995) also supported that the consumer who
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visits the same store with more frequency, spends more amount of money in that store. Osman (1993) proposed that increased frequency and repeated purchases are important variable in determining the degree of loyalty and store patronage by the customer. The nature and quality of merchandise or product influences the value perceived by the customers and this is important for evaluating the store by the customer (Martinez- Ruiz et al, 2010; Grewal et al, 2003). The results of product quality attribute in Table 2 shows that all but for one of the fifteen respondents have stated that good product quality has a positive influence on their store shopping experience. The customers responded that they look for quality of products and [...] Sainsburys got better product quality compared to other stores (Respondent 9). Sirohi et al (1998) and Dick et al (1996) also supported that the overall product quality is important factor in influencing the store loyalty intentions of the customers. The respondents comments on the product range in Table 2 however did not show any significant impact on their loyalty intentions to the store. (Respondent 1) stated that he does not like to experiment with products and always stick to a few brands and similar comments were given by (Respondent 15). Respondent 6 also claimed that he does not really look for variety of products while shopping. These results did not support the studies by MartinezRuiz et al (2010) and Sirohi et al (1998), where the that assortment and variety of products have a critical and positive impact on the customers shopping experience. The research by Miranda et al (2005) also showed some similar results and asserted that product variety has an inverse and negative relationship with the customer satisfaction and therefore negative impact on the loyalty degree as well. This could be because that by offering a wide variety of products to select from could result in difficulty for the shoppers in making purchase decisions, as suggested by Stiglitz (1979).
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Gomez and Rubio (2006) and Binninger (2008) asserted that retailers offer own brand products to provide superior benefit margin to the customers. The results in Table 2 show that significant number of respondents shop for the in-store brands as they are cheap and quality is good (Respondent 3). (Respondent 13) claimed that the some of the in-store brands are better than the other named (national) brands as they offer more value for the money. Benninger (2008) also supported that customers who are favourably pre- dispositioned to the retailers own brands are more prone to be loyal and satisfied with the store. The retailers provide better value for money from the store brands as compared to popular brands and there exist a positive relationship between customer loyalty, store image and store brands (Baltas, 2003; de Wulf et al, 2005). However, according to Martenson (2007), store brands does not necessarily increase the store loyalty and customers would prefer traditional brands as the customer are more aware of the product in terms of product knowledge and the popular brands provide more value to the customers if they cost more. Martenson (2007) also concluded that some customers do not have time to try new products. In this research, views of some respondents support the findings of Martenson (2007) and commented that they [....] prefer popular brands as they offer better quality and perceive that store brands are of cheaper quality (Respondent 4). Price is an important element for customers when making purchase decisions and therefore it has a large influence on the customer satisfaction judgement (Herrmann et al, 2007) and price fairness influences the price acceptance for the customers and indirectly influences customer satisfaction and loyalty (Martin- Consuegra et al, 2007). In Table 3, significant number of respondents commented that price is very critical in making purchase decisions (Respondent 1). Better pricing is important and the store has a very competitive pricing as compared to other neighbouring stores (Respondent 13). (Respondent 14) claimed that price is important and cheap prices are useful to certain degree, but quality is also important
and spending more quality is acceptable on few products. This is supported by Linchtenstein et al (1993) and asserted that price is an important variable in determining the quality, prestige and status of the product to the consumers. Martin- Consuegra et al (2007) also asserted that customer with high brand loyalty focus more on the benefits derived from the product than price. The literature and findings makes it clear that shoppers perception of the price has a significant influence on the consumers purchase behaviour. The shopping experience is significantly linked to the customers perception of the price level (Miranda et al, 2005). The value derived from the product is evaluated on the basis of the price of the product and it is critical for the customer to derive the value for money to be more satisfied with the store (de Haan, 2003; Miranda, 2008). All of the respondents in this research claimed that they always aim to get the value for money for money when they shop in the store and this also helps to make more savings (Respondent 14). The loyal customers derive high degree of satisfaction when they get the value for the money they pay for the purchases in the store (Flavian et al, 2001). In table 3, all the respondents except for one, have given positive responses for the special offers in the store. The findings in the research indicate that most of the loyal customers in the store shop for the special offers on the products. Respondent 3 claimed that Special offers make shopping cheaper and special offers help to purchase more products at less than usual prices (Respondent 13). Also offers on products influences the customer to buy more products from the store (Respondent 2). Urbany et al (2000) supports the findings and assert that promotional offers on products has a significant impact on the buyers purchase behaviour and it influences the customer satisfaction by adding more value for the money spent in the store (Kumar and Leone, 1988; Miranda et al, 2005). In this research, all the respondents gave positive feedback on the service attributes in the store and claimed that it is important factor in making the purchase decisions in the store. As
illustrated in Table 4, one of the respondent claimed that service is very important and if the service personnel are not friendly, then he would not have shopped in the store (Respondent 8) and Respondent 6 asserted that staff efficiency is necessary and he always look for the cheerful and helpful staff in the store. Magi (2003) also supported this and asserted that sales assistance is a very critical factor in influencing customer satisfaction and loyalty in the store. Ball et al (2004) in their model in the literature also concluded that personalization of service and more effective personal communication plays a distinct role in obtaining the loyalty of customers in the store. Lemon et al (2002) and Parasuram et al (1991) also supported that personal relationship adds value to the customer satisfaction. Service delivered in a good manner creates a trust among the customers which adds to the customers perception about the stores performance and credibility and this trust is important for the customer to help them remain loyal to the stores and avoid them from switching to another store (Chaudhari and Holbrook, 2001). Handling of complaints by the store personnel is also critical and if complaints and queries of the customers are not taken care effectively then this could lead to negative effect on the loyalty (Ball et al., 2001). Martinez- Ruiz (2010) concluded that time efficiency of the service by the store personnel is necessary factor which adds to customer satisfaction and the time efficiency is determined by speed at the checkouts, accuracy in scanning products and timely delivery of products. In this research, all the respondents supported the literature and commented that complaint handling and time efficiency is a critical factor in influencing their shopping experiences (see Table 4). In Table 5, significant number of respondents (11 out of 15) gave responses and claimed that they positively contributed to the store loyalty program (in this case Nectar Loyalty Card) and frequently collect the points whenever they shop in the store. These findings support the research of Bolton et al (2000) that the beneficiaries of the loyalty program perceive that they receive better quality, value for money and efficient service in the retail store. In the
literature, Wulf and Odekerken- Schroeder, 2003 and Bristol et al, 2008 and Sharp and Sharp (1997) showed loyalty programs by the retailers have a positive influence on the customer satisfaction and loyalty. Wirtz and Chew (2002) also supported that the incentives provided by the loyalty programs influences the customers to provide positive word of mouth to prospective customer. However, according to a few respondents owning a loyalty card does not necessary indicate loyalty to the store and give more importance to attributes like product quality, price and service (Respondent 4). These findings are supported by researchers like Byrom (2001), OMalley (199) and Bellizi and Bristol (2004) who concluded that customers give more importance to the service and product attributes than loyalty schemes in influencing the customer satisfaction and loyalty. The results of the research also suggest that the store attributes have a significant importance in influencing the consumer purchase behaviour (Table 6). All the respondents gave positive feedback on the aspects of store location, store hours, store display and layout and concluded that these factors help them to differentiate the primary store from other neighbouring retailers. Customers choose a store mainly on the basis of the location by evaluating how much time it takes to reach the store and also the cost of travel (Bell et al, 1998; Arnold et al, 1983). All of the respondents claimed that the store convenience is necessary in terms of location and time and this factor helps them to visit the store as per their convenience. McGoldricka dn Andre (1997), East et al (1997), Hansen and Deustcher (1978) and Martinez- Ruiz et al (2010) supported that enhanced store location and convenient store hours have a positive effect on the customer satisfaction and the degree of loyalty is influenced by the shoppers perception of time of reaching the store. The literature also provides evidence that store display and signage makes a positive influence on the store satisfaction and it is necessary for the convenience of the store (Theodoridis and Chatzipanangiotou, 2009; Miranda et al, 2005; Babin and Darden, 1996).
Miranda et al (2005) also asserted that wider aisles have a positive influence on store satisfaction which was supported by many respondents in this research that claimed that the primary store has better store layout as compared to other neighbouring stores and this has a positive influence on their perception of the store (Respondent 6). Fornell (1992) asserted that increase in customer satisfaction leads to increased loyalty to the firm and the customer will be less susceptible to be competition from other retailers in the market. Table (7) in the findings illustrates that all the respondents were either satisfied or very satisfied with the store and all the respondents gave positive responses on repurchasing in the future, increase in purchase expenditure and recommending the store to others (friends and colleagues). The findings of the research support the Sivadas and Baker- Prewitt (2000) that customer satisfaction leads to likelihood of the customers of recommending the store to others and repurchasing in the future. LaBarbera and Mazursky (1983) also supported the claims of Sivadas and Baker- Prewitt (2000) and asserted that satisfaction influences the repurchase intentions of the customers. Sivadas and Baker- Prewitt (2000) concluded that recommendation of store is a strong indicator of customer loyalty and customer who recommends the store also tends to repurchase from the store, also satisfaction is prerequisite for the customer to display the relative attitude and behaviour of recommending and repurchase from the store. Jones and Sasser (1995) asserted that satisfaction alone will not make customers loyal, but the findings of the research demonstrate that satisfaction will foster loyalty among the customers.
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6. Conclusion The purpose of the research was to evaluate customer loyalty as a dependable variable on factors influencing customer loyalty in supermarket retail stores. The objectives of the research evaluate the concept of customer loyalty; identification and analysis of causal factors of customer satisfaction and loyalty in the supermarket retail stores and to identify the factors the supermarkets should aim in order improve their loyalty program and retain customers in the stores. The research was conducted in the Sainsburys store in Penarth, near Cardiff (UK), where customers who were pre-determined as loyal were asked questions which influences their overall shopping experience in the store. In this research, the researcher examined the relation between customer loyalty, customer satisfaction and the factors influencing customer satisfaction. The key attributes have been have been identified from the earlier literature that satisfaction has a significant influence on the customer loyalty in the supermarket retail environment and many factors influence the customer satisfaction. These factors include product attributes (quality, variety and retail store brands), price attributes (effective and fair pricing, value for money and price offers on products), service attributes (friendly and helpful staff, complaint handling and service efficiency of staff), participation in store loyalty program (loyalty cards), store attributes (convenience of store location and hours, store display and signage, store layout i.e. width of aisles and parking space). The researcher used factors like: frequency of purchases from store, store satisfaction, intentions to recommend the store and intentions to repurchase and increase expenditure in the store as measures to determine the store loyalty intentions of the customers. The findings of the research reveal a positive relation between satisfaction and store loyalty intentions, measured on the basis of frequency of purchase, recommending the store to others and increased expenditure and future repurchase from the store by the customer. According to
Sivadas and Baker- Prewitt (2000), recommending the store to other prospective customers leads to increase in the tendency of the customers to repurchase from the store and thus fosters store loyalty and in order to develop such favourable relative attitude, the customer needs to be satisfied by the store. The findings of the research demonstrate that the customers perception about product attributes (like quality, variety or assortment and store retail brand), price (effective and fair prices, value for money and price offers), service attributes (service quality, complaint handling and service efficiency), loyalty programs (loyalty cards) and store attributes (convenience factors both location and opening hours, display, signage and store layout) have a significant influence on the customer satisfaction which in turn influences the shoppers intention to remain loyal to the store. The findings of this research support the studies by Sirohi et al (1998), Miranda et al (2005) and Sivadas and Baker- Prewitt (2000). This study has emphasized that the role of store convenience and service aspects have a critical role in influencing customer satisfaction. The products quality, efficient store atmosphere, value added service to the customers and competitive prices for the products, all have a significant importance for the customer to evaluate the loyalty and satisfaction towards the primary store. The efficient combination of all these factors adds to the pleasing and delightful shopping experience of the customers. The findings of the research demonstrates that the customer loyalty not generated as a result of influence of any single or particular factor but it is result formed due to the combined effect of influence from several factors during the customers shopping experience. The findings of the research provide useful managerial implications that by providing a positive atmosphere for the customer in the store by enhancing the service quality, product assortment and quality, giving more value added services in the loyalty schemes and by
enhancing the store image could lead the recognition of the store among the consumers which could further increase the customers commitment to the store and foster increase in the sales for the store. The management should aim to develop and maintain relationships with the customers and develop efficient customer relationship management (CRM) strategies to motivate the employees to deliver additional value to the customer. The management of the supermarket stores should also focus on ensuring availability of products, speed at the checkouts and accuracy at the service delivery to ensure customer derive the value for shopping in the store. The loyalty schemes should be designed to help the customer get more value for money to entice them to shop in the store. The customers perception of the value for money is essential for deriving satisfaction which will motivate them to be loyal to the store. Limitations: This research is an exploratory research and has adopted very limited methods of research due to time constraints. The future researches could adopt variety of methods to further investigate the various factors influencing the customer satisfaction and loyalty to ensure more reliability on the data. Due to the lack of time, the research had to be done with focus on limited variables and did not consider the demographics of the customers which could have a significant impact on the customers shopping behaviour in the store and the intentions of loyalty. The further researches in the area could consider the demographics variables like age, occupation, gender, income level etc. to derive the varied results on the impact on the customer loyalty. The research was conducted in only one supermarket retail store due to the lack of available time and therefore it is difficult to generalise the findings of the research for the entire supermarket retail environment.
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8. Appendix A1: Interview Questions to determine customer loyalty in Sainsburys Penarth Store: Q1: Are you regular in shopping at Sainsburys Store? If yes, how many times in a week to you shop at the store? Product Aspects: Q2: Do you look for quality of products while shopping? Q3: Do you look for choice and variety in products? Q4: Do you shop for Sainsburys in-store brand of products? Price Aspect: Q5: Is better pricing important for you while shopping? Q6: Would you like to have better value for money while shopping? Q7: Do you look for special offers on products in the store? Service Aspects: Q8: Do you look for friendly staff in the store while shopping? Q9: Do the staff in the Sainsburys store handle your queries and complaints well? Q10: According to you, is the staff efficiency in term of service time important for you? Loyalty Card Aspects: Q11: Do you have a nectar card? Store Aspects: Q12: Is the store location convenient for you? Q13: Are the store hours convenient? Q14: Does the store display which includes the display of shelves, important for you? Q15: Is the store layout for e.g. the parking space and the shop floor space important for you? Customer Loyalty Aspects: Q16: Are you satisfied with the current Sainsburys store? Q17: Would you continue to shop and increase your purchases from the store in the future? Q18: would you consider recommending the store to your friends and colleagues?
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A2: Photocopy of letter from the Store Manager of Sainsburys Convenience, Penarth:
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A3: Evidence of interviews of customer in format of digital audio recordings:
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Critical Evaluation of Factors Influencing Customer Loyalty and Satisfaction in Supermarket Retail Industry

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Customer Loyalty: A dependent variable on factors influencing it.

In the context of Supermarket retail stores

Abhishek Meshram 09048790 M.Sc. Management September 2009

Submitted to: The University of Glamorgan

Abhishek Meshram (09048790)

Signed: Abhishek Meshram Date: 14th October, 2010.

Abhishek Meshram (09048790)

Abhishek Meshram (09048790)

Abhishek Meshram (09048790)

Abhishek Meshram (09048790)

Abhishek Meshram (09048790)

Abhishek Meshram (09048790)

Abhishek Meshram (09048790)

Abhishek Meshram (09048790)

Abhishek Meshram (09048790)

Abhishek Meshram (09048790)

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ii. Models of Customer Loyalty:

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ECSI- extended model

Extracted from Ball et al. (2004)

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Conceptual model of Store Loyalty intention as function of perceptual constructs

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Yes, always look for quality

Yes. Sainsburys got better product quality as compared to other supermarkets.

Yes Yes Yes Quality is important

Price is important than quality

Abhishek Meshram (09048790)

Competitively priced products

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Abhishek Meshram (09048790)

Not convenient from parking perspective

Abhishek Meshram (09048790)

Should be located more towards Cardiff City Centre Very convenient

Yes. Store location is convenient