THE EFFECTS OF CUSTOMER VALUE ON CUSTOMER LOYALTY:

IN CASE OF MINI SUPERMARKET IN BULE HORA TOWN.

A THESIS SUBMITTED TO BULE HORA UNIVERSITY COLLEGE OF BUSINESS

AND ECONOMIC, DEPARTMENT OF MANAGEMENT INPARTIAL FULFILLMENT
OF MASTER OF BUSINESS ADMINISTRATION DEGREE IN MANAGEMENT

Submitted BY:

ISMAEL HUSEN

ID No: WPG/023/2012

UNDER THE GUIDANCE OF

MAIN ADVISER;

Prof. Kishor Chandra Meher, PhD, FCMA, CIMA (UK)

Professor

CO-ADVISER Mr Ayenatu, MBA

Lecurer

June, 2021
Bule Hora, Ethiopia

THE EFFECTS OF CUSTOMER VALUE ON CUSTOMER LOYALTY:

i
 IN CASE OF MINI SUPERMARKET IN BULE HORA TOWN.

A THESIS SUBMITTED TO BULE HORA UNIVERSITY COLLEGE OF BUSINESS

AND ECONOMICS DEPARTMENT OF MANAGEMENT INPARTIAL FULFILLMENT
OF MASTER OF BUSINESS ADMINISTRATION DEGREE IN MANAGEMENT

BY:

ISMAEL HUSEN

ID No:

UNDER THE GUIDANCE OF

MAIN ADVISER;

Prof. Kishor Chandra Meher, PhD, FCMA, CIMA (UK)

Professor

CO-ADVISER Mr Ayenatu, MBA

Lecurer

Department Management
College of Business and Economics
Bule Hora University

SCHOOL OF GRADUATE STUDIES

ii
 BULE HORA UNIVERSITY
ADVISORS’ APPROVAL SHEET
This is to certify that the Thesis entitled ‘‘The Effects of Customer Value on Customer
Loyalty In Case Of Mini Supermarket in Bule Hora Town.’’ submitted in partial
fulfillment of the requirements for the Master degree (MBA) In Management and has been
prepared by Ismael Hussein under our supervision. Therefore we recommend that the thesis
has developed in fulfilling the requirements and hence hereby can be submitted to the
department for the further progress of thesis.

Name of Major Advisor Signature Date

PROF: KISHOR CHANDRA MEHER ___________ __________

Name of Co- Advisor Signature Date

MR. AYENATU, MBA __________ __________

EXAMINERS’ APPROVAL SHEET

We, the undersigned, members of the Board of Examiners of the final open defense by Ismael
Hussein have read and evaluated his/her: The Effects of Customer Value on Customer Loyalty

iii
In Case Of Mini Supermarket in Bule Hora Town and examined the candidate. This is, therefore,
to certify that the thesis has been accepted in partial fulfillment of the requirements for the
degree Masters of Business Administration in MBA with specialization in management.

_________________ _________________
Name of the Chairperson Signature Date
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Name of Major Advisor Signature Date

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Final approval and acceptance of the thesis is contingent upon the submission of the final copy of
the thesis to the School of Graduate Studies (SGS) through the Department/School Graduate
Committee (DGC/SGC) of the candidate’s department.

Stamp of SGS Dean: _____________

DECLARATION
The under signed, declare that this thesis entitled “The Effects of Customer Value on
Customer Loyalty In Case Of Mini Supermarket in Bule Hora Town.” Is my original work.

iv
The supervision of Advisor: Prof. Kishor Chandra Meher and Co-Adviser; Mr Ayenatu. I further
confirm that this paper has never been submitted to any other university for any degree, or
diploma program in this or any other institution. Finally, I declare that all source materials used
in this research has been dully recognized and acknowledged.

Declared By: Ismael Hussein

Signature ………………………………

Date…………………………………….

ACKNOWLEDGEMENT
First of all, I would like to praise and thank Almighty Allah for giving me power, strength, vision
and determination with the help of which I was able to completed my research Thesis work in

v
time.it would have not been possible without the guidance, support and expertise of my thesis
advisors Prof. Kishor Chandra Meher and Co-Adviser; Mr Ayenatu. I have no words that can
explain my deepest gratitude to my advisors. I would like to express my heartfelt appreciation to
my beloved Family for his support in all aspect me to focus on my study.
Finally, I would like to express my deepest gratitude to my respondents and also I give great
respect to the respondents who devoted their time to fill questionnaires.

Approved by: Signature Date

Advisor

______________________________ ________________ ____________

Co-Advisor

________________________________ ________________ ____________

Contents
Contents Page No

.
ADVISORS’ APPROVAL SHEET...............................................................................................iii
vi
EXAMINERS’ APPROVAL SHEET............................................................................................iv
DECLARATION.............................................................................................................................v
ACKNOWLEDGEMENT..............................................................................................................vi
Lists of Tables..................................................................................................................................x
List of Figures.................................................................................................................................xi
ACRONYMS................................................................................................................................xii
CHAPTER ONE..............................................................................................................................1
INTRODUCTION...........................................................................................................................1
1.1 Background of the Study...........................................................................................................1
1.2 Statement of Problem................................................................................................................4
1.3. Research Question....................................................................................................................6
1.4. Objectives of the Study.............................................................................................................6
1.4.1 General Objective...................................................................................................................6
1.4.2. Specifically, Objective:..........................................................................................................6
1.5. Research Hypotheses............................................................................................................7
1.6. Significance of the Study..........................................................................................................7
1.7. Scope of the Study....................................................................................................................8
1.8 Limitation of the Study..............................................................................................................8
1.9. Organization of the Chapter......................................................................................................8
CHAPTER TWO.............................................................................................................................9
2. LITERATURE REVIEW............................................................................................................9
2.2. Theoretical Review...................................................................................................................9
2.3. Customer value in business....................................................................................................11
2.4 Customer loyalty......................................................................................................................12
2.5. Operational Variables of the Study.........................................................................................14
2.5.1 Customer Satisfaction...........................................................................................................14
2.5.2 Trust......................................................................................................................................14
2.5.3 Service Quality.....................................................................................................................15
2.5.4 Brand Image..........................................................................................................................15
2.5.5 Switching Cost......................................................................................................................16
2.5.6 Value-Added Service............................................................................................................16

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2.6 Conceptual Framework............................................................................................................17
2.7 Empirical Study.......................................................................................................................17
CHAPTER THREE:......................................................................................................................25
RESEARCH DESIGN AND METHODOLOGY.........................................................................25
3.1 Description of the Study Area.................................................................................................25
3.2 Research Design......................................................................................................................26
3.2.1 Sample Size and Sampling Techniques................................................................................26
3.3 Method of Data Collection......................................................................................................27
3.4 Procedures of Data Collection.................................................................................................28
3.5 Method of Data Analysis.........................................................................................................28
3.6, Ethical Considerations............................................................................................................29
CHAPTER-FOUR.........................................................................................................................30
RESULTS AND DISCUSSION....................................................................................................30
4.0 Introduction..............................................................................................................................30
4.1. Response Rate.........................................................................................................................30
4.2. Reliability Analysis................................................................................................................30
4.3. Demographic Profile Analysis of the Respondents................................................................32
4.4. Descriptive analysis of respondent’s opinion.........................................................................35
4.5: Descriptive Analyses of Customer Value on Customer Loyalty............................................36
4.5.1: Brand Image........................................................................................................................36
4.5.2: Switching cost......................................................................................................................37
4.5.3: Value Added Service...........................................................................................................38
4.5.4: Customer satisfaction..........................................................................................................39
4.5.5: Customer Loyalty................................................................................................................41
4.6. Inferential Analysis.................................................................................................................42
4.6.1: Correlation analysis.............................................................................................................42
4.6.2. Multiple Linear Regression Analysis..................................................................................45
4.6.4. Multiple Regression Analysis..............................................................................................49
4.6.6. Analysis of Variance (ANOVA).........................................................................................51
4.6.5. Coefficients of Regression Analysis....................................................................................52
4.6.7. Hypothesis Testing and Discussion.....................................................................................53

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CHAPTER-FIVE...........................................................................................................................55
5.0 Summary of Findings, Conclusion and Recommendation......................................................55
5.1. Summary of Findings.............................................................................................................55
5.2. Conclusion..............................................................................................................................56
5.3. Recommendations...................................................................................................................56
5.4. Research Implications:............................................................................................................57
5.5. Limitations of the Study:........................................................................................................57
5.6. Suggestions for Future Research............................................................................................58
References......................................................................................................................................59
APPENDIX: QUESTIONNAIRE.................................................................................................64

Lists of Tables
Table No: 4.1 Response Rate of the Questionnaire.
TableNo: 4.2 Reliability Statistics

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 Table No: 4.3 Reliability Statistics for Each Variable
Table No: 4.4 Demographic Analyses of Respondents
Table No: 4.5. Five Scaled Likert Criterion
Table No: 4.6 Descriptive Analyses of Brand Image
Table No: 4.7: Descriptive Analyses of Switching cost
Table No: 4.8: Descriptive Analyses of Value Added Service
Table No: 4.9: Descriptive Analyses of Customer satisfaction
Table No: 4.10: Descriptive Analyses of Customer Loyalty
Table No: 4.11: Correlations analysis
Table No-4.12: Results of Multicollinearity test.
Table No-4.13: Multiple Regression Analysis
Table No-4.14: Analysis of Variance ANOVAa
Table No-4.15: Coefficient P-value and Standardised Coefficients

List of Figures
Figure No: 4.1. Gender of the Respondents
Figure No 4.2: Age of the Respondents
Figure No 4.3: Education Level of Respondents

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Figure No 4.4: marital Level of Respondents
Figure No:-4.5: Test of Normality
Figure No:4.6: Test of Linearity
Figure No-4.7: Test of heteroscadacity

ACRONYMS
ASQ; American Society for Quality

CE; Customer Enthusiasm

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 CL; Customer Loyalty

CPI; consumer price index

CS; Customer Satisfaction

CV; customer value

PCV; perceived customer value

ABSTRACT

Mini Supermarkets that incorporate are becoming increasingly customer dictated. The demand
for Mini Supermarkets is well goes up every time. The ability of Mini Supermarkets to offer
clients access to several markets become a valuable competitive edge. In short, the domestic

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economy is an increasing pie which offers extensive economies of scale that only large Mini
Supermarkets will be in a position to tap. With the phenomenal increase in the income of the
population and the increased demand for Mini Supermarkets; speed, service quality and
customer satisfaction are going to be key differentiators for each Mini Supermarkets future
success. Thus, it is imperative for Mini Supermarkets to get useful feedback on their actual
response time and customer value aspects of loyalty delivery.
The study targeted to find out the relationship between Customer Value and Customer loyalty by
using Customer Value. The research was carried out mixed methods research that included the
qualitative and quantitative research methods. The primary and secondary sources of data were
collected through questionnaire, interview and written material revision. Out of the total
population 290 respondents were selected as sample of the study. The collected data were
analyzed by using SPSS Version 20 and presented by simple tabulations and figures. The results
of trend analysis indicated that the number of customers.
The level of Customer loyalty result indicated that the customers were satisfied with Customer
Value (Brand Image, Switching cost, Value Added Service & Customer satisfaction). This result
indicated that there is a gap of Customer Value and Customer loyalty that affect good
relationship of customer and Mini Supermarkets.
The effects of Customer Value and Customer loyalty was measured through statistical analysis.
Thus the Pearson’s correlation result indicated that there is a positive and significant
relationship between the Customer Value and Customer loyalty. The overall result from
Regression model R2 value Thus 95.6 % (R2 =.956) variation on Customer loyalty is explained
by the independent variables.
Key Words: Mini Supermarkets, Customer loyalty and Customer Value

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 CHAPTER ONE

INTRODUCTION
This chapter presents an overview of empirical justifications about assessment the effects of
customer value on customer loyalty. It starts from different empirical frameworks which serve as
the background of the study followed by the statement of the problem, research question, and
objectives of the study, significance of study, scope of the study and organization of the study.

1.1 Background of the Study

Supermarket are among the most important strategic industries in the retailing sector as they play
a big role in building the economy and supplying labor market (Joseph et al., 2004). However,
supermarkets are experiencing stiff competition both locally and globally hence the need to
devise a strategy for competitiveness and survival. One such strategy is the marketing mix
strategy. Marketing mix strategy involves a set of organized, specific marketing tools which a
company utilizes to raise desired feedback from its planned market (McCarthy and
Perreault ,1987). It includes all the activities than an organization can do to increase the demand
of the product or service.

Mini supermarkets are unique set of supermarkets in that other than being small in size, most of
them occupy space of less than five hundred square feet, they serve a large number of the
population as they are located in the residential places making them easily accessible to many at
convenient time. Most of these supermarkets are congested inside and have no enough space for
customers to move between the shelves, they have less payment points and some with no receipts
and machine to read bar codes hence having long queues. They also do not have parking space
and good road network for driving customers.

Customer value is considered an important strategic part used by companies to attract and retain
customers (Rus, 2016). The basic theory for customer value (CV), and for perceived customer
value (PCV), is that when customers feel that they get higher quality or more products and
services for less cost/sacrifice, their perception of value increases. This study builds on the
hypothesis that customers generally seek some form of value and that as perceptions of value
increase, loyalty increases. Brown’s (2013)

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Customer value is the difference between the value enjoyed by customers when using a product
and the cost (Suarniki et al., 2019). A focus on customer value can drive service performance
and can create satisfaction. A service product has high value in a consumer’s eyes if it can
provide the minimum quality, benefits and sacrifice. Customer value involves two-way
communication between the customer and Traditional Shop where the relationship is created
after the consumer knows and gives a positive assessment to the product or service offered.

Customer value can be seen as an outcome of managerial and industrial mechanisms (Teece,
2010) or as a consequence that connects a company’s innovative technology to customer needs.
One important role of customer value refers to the economic value potential of new technologies,
including two complementary ideas as follows (Zott et al., 2011). First, companies
commercialize innovative ideas and technologies aiming for return on customer (Peppers &
Rogers 2005) and increasing corporate performance (Sheth & Mittal, 2004), thus providing
unexpected value for customers. Second, customer value represents a new theme of innovation
(Flint, 2002), which further complements processes, products, and organizational innovations,
thus providing expected but formerly undelivered value for the customer. The actions may be
pursued through base, growth, networking, and learning potential (Stahl et al., 2003) and finally
competitive advantage. The latter involves relationship value (Howden & Pressey, 2008) in new
forms of collaboration and cooperation and provides a return on the customer, and thus value for
the company.

Customer values not only entail consequences for technical innovations but also can be shaped
by them (Teece, 2010). Studies show how new product ideation or innovation can trigger
changes in the company’s operational and commercial activities and hence the design
mechanisms to create customer value. Although these studies examined the role of customer
values in commercializing technologies at the level of the individual firm, more recently it has
been pointed out the potential importance of customer value for entire industries. Researchers
claim that customer value is systemic and dependent on more than one attribute, and possibly on
more than one firm (Pynnönen, Ritala & Hallikas, 2011). Hence, not limited to organizational
change customer value is introduced as part of the comprehensive reasons for thinking about the
systemic change of customer values in the ecosystem.

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Hassan (2012) indicated that increasing a store’s loyal customer base provides opportunities for
enhanced profitability and business sustainability, a key component to a supermarket’s
organizational success. Hassan’s study, conducted in the United Kingdom’s supermarket
industry, provided insights into how supermarket customers perceive value and the importance
value has to loyalty. Hassan’s qualitative study utilized mini-depth interviews as the approach of
collecting and analyzing the data.

Hassan’s (2012) findings indicated that for customers value proposition is a widely-used
concept, but lacks specific definition. Additionally, Hassan provided valuable insights to
marketers by identifying that customer perceive value differently and, thus, respond to more than
one attribute of value.

Hamstra (2012) reported that a majority of supermarket customers surveyed were not willing to
sacrifice quality for low price. Thus, supermarkets with higher quality are able to enhance
customer value perception by increasing depth and breadth of promotional discounts; however,
supermarkets with lower quality have to continue to lower prices to make the quality seem more
value added.

The customers ‘satisfactions of the super markets in Bangladesh are the functions of physical
aspects, personal interactions, problem solving, reliability and the policy of the super market
entrepreneurs. Customer satisfaction is treated as the key issue to both practitioners and
researchers (Orel & Kara, 2014; Paul, Sankaranarayanan & Mekoth, 2016). Having intense
market pressures, every organization tends to focus on satisfying and retaining customers.
Therefore, consumer loyalty through providing excellent goods and services has become a key
concern for organizations (Kandampully, Zhang, & Bilgihan, 2015). Along with enhancing
product and service quality, organization increasingly prioritizes customer satisfaction as one of
the vital corporate goals (Das, Kumar, and Saha, 2010).

Therefore, this study is to assess the effects of customer value on customer loyalty in case of
mini supermarket in Bule Hora Town. and try to identify the problem hanging over the neck of
providing quality service and recommends possible solution to the identified problems.

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1.2 Statement of Problem
As shoppers seek more value in their purchases, customer loyalty can diminish and erode
profitability, which poses a business problem to supermarkets. Jenkins (2010) and Gentry and
Kalliny (2012) indicated that increasing a store’s loyal customer base provides opportunities for
enhanced profitability and business sustainability. Hassan (2012) indicated that loyalty is a key
component to a supermarket’s organizational success.

Study confirmed Lee et al. (2018) who pointed out that augmented customer value can cultivate
a customer-brand relationship. Consequently, the customer-brand relationship induces
customers’ desire to engage with a brand. It proved that augmented customer value, which
included customer privilege programs, expedited services, and special discount for repurchase,
could promote CBE and helps sustain a long-term relationship with customers. Jefry Romdonny.
(2018). While customer value has a positive and significant impact on loyalty. The higher the
customer value, the more positive customer loyalty will be to the products produced by the
company. Therefore if the price is high but the benefits obtained by the customer are not many, it
will have an impact on the loyalty given by the customer.

By Kukuh Lukiyanto (2020). The results showed that satisfaction affects customer loyalty.
Therefore, The Effect of Satisfaction on Customer Loyalty’s statement that "Satisfaction has a
significant effect on customer loyalty" is accepted. It means that satisfaction has a positive effect
on customer loyalty. Higher satisfaction will increase the customer loyalty. The results showed
that customer value affects customer loyalty. Therefore, The Effect of Customer Value on
Customer Loyalty’s statement that "Customer value has a significant effect on customer loyalty”
is accepted. This means that customer value has a positive and significant effect on customer
loyalty. Better customer value will increase customer loyalty. This study’s results support the
research of Suliyanto (2013) and Pratama (2015) that customer value has a significant effect on
customer loyalty. These results indicate that culinary businesses are always expected to provide
value to each service offered to make consumers feel satisfied and loyal.

Yatundu FA. 2019. The study found out that Loyalty programs had a positive effect on customer
loyalty with a significant coefficient. Just like other studies which have been carried out trying to
link loyalty programs to customer loyalty, customers in this study agreed that repeat purchases

4
enabled them to accumulate points. As much as the use of loyalty programs came with some
benefits to the customers, they still compared the prices with competitors.

Achmad Mulyana*, Sugeng P . (2018). Based on the results of the study, the following findings
found that the marketing mix has a positive and significant direct effect on customer satisfaction
and customer loyalty

According to Haryati and Ndubisi (2011) customer perceptions of products, people, processes
and physical evidence have a positive impact on customer satisfaction. While customer
perceptions of prices, places and promotions have a negative impact on customer satisfaction.
Still according to (Zablah et al., 2016) which also states that customer satisfaction has a positive
impact on customer loyalty (Ren et al., 2016) through the results of his research on budget hotels
in Thailand, which concluded that every P in the service marketing mix might not be as
important in the respondents’ views, and only three of the seven were considered the most
important marketing mixes, people, process and physical. Evidence. Based on some of the above
statements, other factors that allegedly because low customer satisfaction and loyalty in budget
hotels in DKI Jakarta are allegedly caused by inaccurate marketing mixes.

This is indicated by several things such as the inappropriate expectation of services provided by
officers and budget hotels do not always provide 24-h room service. Besides basic services
(beds, bathrooms, and breakfast), lack of other facilities that are despised such as free Wi-Fi,
restaurants, business rooms. Some budget hotels do not provide free soap, toothpaste, shaving
mustaches and towels. The number of employees is relatively limited, the hotel budget rarely
provides safe deposit boxes in rooms, not all budget hotels provide mini bars and relatively
limited parking spaces.

In the modern competitive market, a big challenge for all sellers includes modern supermarket
that have create the new demands as well as attract customer who are currently a customer of
competitive product or sellers. Market has to realize in supermarkets that it’s only possible by
adhering to different attractive marketing strategies because only satisfied customer would retain
while dissatisfied customers will not aim to switch off. The basic problem will be arrived high
competition into supermarket that can entertain high customer attraction. (Kim et al 2004).

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According to (Grewal and Voss, 2002), found that store employee and store design perception
positively effect on interpersonal quality which in return has a positive effect on store
satisfaction. Today, Ethiopian supermarket in Bule Hora Town is facing challenges with difficult
competition. Hence the effects of customer value on customer loyalty are expected of them to
win this competition. So, it becomes very important for supermarket to meet or exceed the target
customer value on customer loyalty expected by them. In general, the study aims to answer the
following questions:

1.3. Research Question

The researchers hope this research will answer the following question regarding customer Value
and loyalty.

 What are the main factors determining Brand Image effecting customer loyalty in retail
mini supermarket in Bule Hora Town?
 What is the relationship between switching cost and customer loyalty in retail mini
supermarket in Bule Hora Town?
 To what extent does the Value Added Service have a significant effect on loyalty of Mini
supermarket customers in Bule Hora Town?
 To what extent does the Customer satisfaction have a significant effect on loyalty of Mini
supermarket customers in Bule Hora Town?

1.4. Objectives of the Study

1.4.1 General Objective:
To assess the effects of customer value on customer loyalty in case of mini supermarket in Bule
Hora Town.

1.4.2. Specifically, Objective:

 To identify factors determining Brand Image affecting customer loyalty in mini
supermarket.
 To explain the relationship between switching cost and customer loyalty in mini super
market.
 To investigate the extent do the Value Added Service has a significant contribution on
loyalty of supermarket customers in Bule Hora Town

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  To examine relationship between Customer satisfaction and customer loyalty in mini
super market.
1.5. Research Hypotheses
The following research questions and hypothesis were addressed in this study

The following research questions and hypothesis were addressed in this study

H01: There is no significant relationship between Brand Image and customer loyalty?
Ha1: There is significant relationship between Brand Image and customer loyalty?
H02: There is no significant relationship between switching cost and customer loyalty?
Ha2: There is significant relationship between switching cost and customer loyalty?
H03: There is no significant relationship between Value Added Service and customer loyalty?
Ha3: There is significant relationship between Value Added Service and customer loyalty?
H04: There is no significant relationship between Customer satisfaction and customer loyalty?
Ha4: There is significant relationship between Customer satisfaction and customer loyalty?

1.6. Significance of the Study

In general, customer value studies provide formal means of customer feed-backs to the mini
super marketing received, which may also help to identify existing and potential problems. It
also conveys a message to customers that the company cares about their well-being and values
customer input concerning operations. In specific terms, this study is believed to have the
following importance:

1. It helps to identify the level of satisfaction/dissatisfaction in the prevailing super marketing

operation and to recommend possible solutions on the cause(s) or dissatisfying factors.

2. The research is important to West Guji Zone mini super marketing to recognize the gap
between customer’s expectation and their perception towards the loyalty

3. The study will enhance the understanding level of management about the level of customer
satisfaction/dissatisfaction and in turn give more emphasis to the outcome of the study.

4. The finding of the study may be used as source document for further similar study.

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1.7. Scope of the Study
The objective scope to assess the effects of customer value on customer loyalty in case of mini
supermarket in Bule Hora Town. Methodologically, use quantitative research methods which
will employ descriptive type of research design.

This study was limited geographically to West Guji Zone mini super marketing and West Guji
zone has been situated in south part of Oromia. Moreover, the amorphous nature of the effects of
customer value on customer loyalty. Make very difficult to clearly determine the scope and
boundaries for customer value on customer loyalty. The findings of the research will be more
successful if it will be conducted in many geographical areas.

Besides, it will be practically unattainable to include all customers across shop of West Guji
Zone mini super marketing due to the medium number of customers. If all customers in all of the
branches the company operates will be included, the study will have not been realized, because
of inability of data management and resource limitation (i.e., time and financial resources).

1.8 Limitation of the Study

Although West Guji Zone mini supermarket operates throughout the oromia regions of the
country, this study is limited to the level of customer value on customer loyalty of major
customers of the Shop in Bule Hora Town. However, the findings of this study would have had
paramount importance if more customers had been included in the research, for customers who
live in different Zone may have different expectations and perceptions towards customer loyalty.

1.9. Organization of the Chapter

This research was organized into five chapters. The first Chapter contains background of the
study, statement of the problem, research questions, and objectives of the research, significance
of the study, scope and organization of the research. Chapter two provides a literature review
informing the reader of what is already known in the area or field. Chapter three discusses about
the methodology employed in the study, including, research design, sample size and sampling
method, data source, collection method, method of data analysis and Ethical consideration.
Chapter four contains data analysis and discussion of results. Finally, Chapter five includes
summary of major findings, conclusion and recommendations.

8
# In addition to the above topics and subtopics you should incorporate – Background of the
organization & Operational Definitions of key terms that were used in your study.

CHAPTER TWO

2. LITERATURE REVIEW
Customer value is a fundamental principle of marketing researched and studied by scholars and
practitioners alike. However, research specific to value, and evaluation of the contribution that
value has on loyalty within the supermarket industry, is limited. What research has been
conducted on value perception and its contribution to loyalty, suggests that value perceptions are
affected by a multitude of inputs (Hassan, 2012). Independent variables (sensu Creswell, 2009)
are those variables that influence outcomes, which are measured as dependent variables.
Primarily, this study addressed whether value (measured as the following independent variables:
price, quality, service, convenience, and assortment) significantly affects customer loyalty, the
dependent variable. Below, factors that influence perceptions of value and loyalty are reviewed;
further, a causal model, with testable predictions, linking value and loyalty is laid out.

2.2. Theoretical Review

Since the concept of a customer became prevalent in the early 1960s in the academic literature
(Keith, 1960), customer value has been gathering momentum (Lindgreen, Hingley, Grant &
Morgan, 2012), although the customer value definition is highly debated (Zubac, Hubbard &
Johnson, 2009) and, surprisingly, often studied without an explicit definition of the concept.

Conceptual confusion in business and management customer value research has occurred
primarily because of the dynamic nature of customer value. Previous studies state that a
customer can perceive value consciously, unconsciously, or pre-consciously (Gorth & Dye,
1999); thus, a customer perceives value differently. Each customer has her own value model
based upon her needs and desires (Ravald & Grönroos, 1996), demographics or characteristics
(Bolton & Drew, 1991), and financial resources (Ravald & Grönroos, 1996; Bolton & Drew,
1991; Zeithaml, 1988). One custoer may be influenced more by potential sacrifices than by
benefits (Ravald & Grönnroos, 1996; Bolton, 1998), while another customer seeks enhanced

9
benefits to compensate (Ostrom & Iacobucci, 1995). Hence, customer value studies rely on the
idea of cost versus benefits (Payne & Holt, 2001).

At the general level, customer value has been referred to as an overall assessment (Zeithaml,
1988), a function of consumption behavior (Sheth, Newman & Gross, 1991), perceived quality
adjusted for the relative price (Gale, 1994), emotional bond (Butz & Goodstein, 1996),
relationship (Payne & Holt, 2001), personal perception (Woodall, 2003), and subjective personal
introspection (Holbrook, 2005). Existing definitions partially overlap, reinforcing many
interpretations. Customer value is a multi-faceted concept with many meanings and
connotations. Some researchers view customer value as closer to the individual (Sheth et al.,
1991; Butz & Goodstein, 1996), others place it closer to the utility (Woodruff, 1997; Zeithaml,
1988), and others still put it between consumption and business Holbrook, 2005).

Briefly, customer value can be viewed as “an (1) interactive, (2) relativistic [(a) comparative, (b)
personal, and (c) situational), (3) preference and (4) experience” (Holbrook, 2005). Accordingly,
the characteristics of customers’ values are diverse. Customers’ values are, according to
Holbrook (2005), interactive, in the sense that they involve a relationship between some
customer and some product or service. They are relativistic, because they reflect comparative
product and service attributes; they differ between customers and depend on the time and
situation. Customers’ values embody preferences and are further relevant to consumption
experiences (Holbrook, 2005). Hence, the customer value focus involves simultaneous
consideration of the content and process of the value of doing business, which explains part of
the challenge in defining and operationalizing the concept.

Hence, in contrast to managerial literature, value for customer(s) may not be limited to customer
needs and wants (Ulwick, 2005), consumer values product or service attributes (Spiteri & Dion,
2004), and price and quality or innovation adoption decisions (Rogers, 2003).

The centrality of the dynamics in the customer value literature is apparent from the various
definitions of customer value. Customer value may accumulate from terminal values (Matzler &
Hinterhuber, 2003). Thus, even though value is appropriated by the focal technology or service,
value for the customer is expected, experienced, and/or evaluated Nusbaum & Cacioppo, 2008)

10
through the focal technologies and services in concert with dynamic and strategic customer value
activities.

Mechanisms, such as the means-end elements (Hsu & Lin, 2006), user acceptance or values and
lifestyle may influence outcomes and consequences customer satisfaction customer delight and
customer behavior (Sheth & Mittal, 2004). More broadly, value for the customer forms
(Woodall, 2003), and the diffusion of accumulated innovations (Rogers, 2003) influences
customers’ sacrifices and benefits, including attributes and outcomes (Woodall, 2003), thus
furthering the relationship value Howden & Pressey, 2008).

Even predicting customer value changes may not guarantee an ability to anticipate changes of
social values (Kahle et al., 1986). Thus, understanding the magnitude of the rewards (Fellows,
2004; Holbrook, 2005; Ulwick, 2005) and managing the rewards as goals (Baumgartner &
Pieters, 2008) may help in understanding the development of customer values and further
relationship value management (Payne & Holt, 2001) with existing customers.

In many customer value definitions, the activity perspective is either implicitly or explicitly
recurrent. Many scholars include activities for support customer value (Lindgreen et al., 2012),
either performed by companies or perceived by customers (Hsu & Lin, 2006), as part of their
conceptualization. The customer value promotes multiple perspectives on value assessment and
economic value benefit. Many examinations proposed to represent customer value can be
investigated as systems of interactions in business.

2.3. Customer value in business

When a business transaction takes place, it confirms that a customer has perceived enough value
to agree to the offering. Nevertheless, why a customer ultimately accepts the offering remains
unclear. What value does she perceive? Business management scholars have observed that
customers may use the same criteria for judging value ex ante or ex post Different aspects of
values for customers have different impacts at different points in the consumption process.
Transaction and relativism are recurrent dynamic components in various definitions that have
been provided.

Customer values not only entail consequences for technical innovations but also can be shaped
by them (Teece, 2010). Studies show how new product ideation (Flint, 2002) or innovation can

11
trigger changes in the company’s operational and commercial activities (Flint et al., 1997), and
hence the design mechanisms to create customer value. Although these studies examined the role
of customer values in commercializing technologies at the level of the individual firm, more
recently it has been pointed out the potential importance of customer value for entire industries.
Researchers claim that customer value is systemic and dependent on more than one attribute, and
possibly on more than one firm (Pynnönen, Ritala & Hallikas, 2011). Hence, not limited to
organizational change, customer value is introduced as part of the comprehensive reasons for
thinking about the systemic change of customer values in the ecosystem.

To develop and manage customer value, companies need to create quality and service that
customers can perceive. There are several ways to develop and manage customer value:

1) Understanding the magnitude of the rewards and managing rewards as goals (Baumgartner &
Pieters, 2008);

2) Managing the relationship value (Payne & Holt, 2001);

3) Inter-firm relational drivers and linking customer lifetime value with shareholder value (Stahl
et al., 2003); and

4) Measuring customer-perceived value in business markets and superior customer value (Slater
& Narver, 2000). Tools for customer value analysis include an events time line, a price and
quality profile, and a head-to-head chart (Gale, 1994). Despite the highlighted conceptual
differences between customer value and certain aspects of economics, scholars have also
emphasized that customer value can play an important role in a firm’s economics and further in
shareholder value (Applegate, 2001).

2.4 Customer loyalty

Customer Loyalty Abubakar et al., (2014) defined customer loyalty as strongly held commitment
to a product or brand in a manner that the customer desires to patronize and buy the product
consistently in the future without resort to switching factors and marketing appeals Sarwari and
Minar (2014) looked at the suggestions that had been put forward by Bove and Johnson (2000)
that customer loyalty is one outcome of improved relational bonds. Pullman and Gross (2004)

12
maintain that loyal customers are the key to the success of many services, particularly those in
the hospitality setting.

Customer loyalty with other variables such as quality, service and communication has been done
many researches. But there are also some researches on loyalty and customer satisfaction. But
there is no research examining the relationship between customer satisfaction and loyalty in UK
retail groceries super markets.

Consumer loyalty is the final effect of a purchase, which is defined as an attitude and intention to
behave in the future, and expressed through things like commitment to give recommendations to
others, intention or desire to tell things positive things about the company, and willingness to pay
dearly (Fraering and Minor, 2013). Kang et al. (2015) state that the concept of customer loyalty
(loyalty) includes five factors, namely the overall satisfaction experienced by a customer when
doing business with a company, the willingness to build relationships with the company,
willingness to buy back, willingness to recommend the company to others, and not switch to
competing products. While (Jung and Yoon, 2013) states the characteristics of loyal customers
are:

1. Make a regular purchase (repeat buyer), which is to make regular purchases, which is meant to
conduct transactions periodically on a certain period of time continuously.

2. Purchasing outside the service or product line, which is buying products offered by the
company outside of the products that are usually consumed by the company, including new
products or other pre-existing products.

3. Referring to others, namely referring the company to relatives or relatives explaining the
quality of the company so that relatives or relatives want to try to consume or use company
services.

4. Demonstrate immunity to the attraction of other companies, namely showing immunity in

which consumers are not easily incited by promotions or interests that arise from other
companies

Loyalty Programs and Customer Loyalty a study was done by Bose & Rao, (2011) on benefits of
customer loyalty programs on members within two Indian cities across different industries. The

13
findings were, unlike the five dimensions put forward by Mimouni-Chaabane & Volle, (2010)
that is monetary savings, explorations, entertainment, recognition and social, the perceived
benefits from loyalty program as per Indian customers were revised to four. This included
monetary, exploratory, social and ego benefits.

2.5. Operational Variables of the Study

The determinants of the Customer value can be used to measure the effectiveness of the
customer loyalty. The variables discussed for the study are Satisfaction, Trust, Service quality,
Switch cost, Brand Image and Value-added service.

2.5.1 Customer Satisfaction

Customer satisfaction is a strong and significant factor that influences a repurchase or the need to
revisit a store, company, organization or firm. Parker & Matthews, (2001) say it can be seen as
an output of consumption or a course of action. And the latter is the mostly accepted opinion,
which explains a valuation between what is gotten and the conventional expectation. Oliver
(1980), Explains that satisfaction has to do with a comprehensive positive judgment about a
product or service experience- which relates to previous or recent experiences. When an
individual gets what he or she expects, satisfaction is confirmed, but when a product delivery or
service is below what was hoped for, dissatisfaction is bred. (Churchill & Supernant, 1982),
which doesn’t turn out well, because a dissatisfied consumer is prone to considering substitutes
and possibly try competitive brands (Wang, 2001).

Fecikova, (2004) further said, an organization will stand the test of time if it can boast of keeping
or maintaining customers through satisfaction. This has created the atmosphere of holding
customer loyalty in high esteem in strategic marketing. Customer satisfaction is in a way
measured when there is a comparison of the actual performance of a product with the expected
performance. Anything below the expected performance is not considered as satisfaction.
Customer satisfaction fosters the customer retention, and all other variables are linked to
satisfaction and work towards customer satisfaction. When all other variables are in good shape,
the customer satisfaction is upheld.

14
2.5.2 Trust
Morgan & Hunt (1994) described trust as an important determinant of the customers’ loyalty
which is seen when one party has confidence in the transaction because of the reliability and
integrity of his partner in business. Trust occurs when the customer believes in the firm’s
dependability and there is strong confidence. Chiou’s (2004) study show that there exists a
theoretical connects in the middle of trust and satisfaction, and is seen as a variable that increases
the customer's commitment and boosts the level of involvement. Trust plays a very important or
significant role in sustaining customers’ loyalty. When a consumer is sure that he or she is going
to gain quality, they develop a good feeling and positive attitude towards a brand then they
purchase the brand often, this is possible when a customer develops a good feeling about a
particular product because of its trust worth.

2.5.3 Service Quality

Service quality stands as a core factor in making quality better, described quality the way
consumers perceive it, and they wrapped it all up with the phrase “causing pleasure” further
study on some Japanese, quality was described as something without defect. So we can say
service quality is deduced as a service delivered without flaw that gives pleasure to the person
receiving it. According to Kang (2006), service quality is put as an overall assessment of a
particular service firm which leads to the comparison of the performance of such firm with the
general expectation of the customers on how the firm should perform.

Cody & Hope (1991) make a striking statement about the consideration of service quality and
product quality where he emphasized that the construct of service quality is harder than the
construct of product quality. Considering the viewpoint of Kang (2006), service quality is
deemed to be a comparison of a perceived performance to the expected performance. Service
quality is the overall feeling of the quality (inferiority or superiority) of an organization and its
service offering (Bitner, 1990). Most times customers tend to compare the cost of organizations
service with the quality of their services. Customer loyalty and service quality have a positive
connect, according to studies by Zeithaml, Wilson & Bitner’s (2008)

2.5.4 Brand Image

The brand image is the mental picture of the product and service of the organization created by
the perception of the customer through feelings, touching, smelling, seeing, sound, taste created

15
by and the usage of the products to the customers. It is enhanced by the customer service,
corporate communication and the commercial environment (Smith & Taylor, 2004). Sees it as
what the product or service connotes in the eye of the consumer, or how they sense or an
expression of their experience with a service or product. Brand image is all about the external
and physical attributes of a product of a company which is conceived by the customer and how it
affects his or her attributes and behavior.

2.5.5 Switching Cost

Switching cost is the cost (not only monetary) associated with shifting from a brand to another It
amounts to the experience that a customer is bound to encounter while trying to move to the
alternate or competitor of a company which he patronizes. The cost of searching, learning,
transferring and probably purchase of some support equipment or services in relation to
deflecting from a brand (Kim, Park & Jeong, 2004). Some telecommunication companies may
make it difficult exiting from their service by strategically distinguishing their service using
quality. (Kim, et al 2004). If the alternatives, however, have better service quality,

and provides an intriguing and unmatchable distinction that makes it difficult to be competed
with, consumers may not mind the cost. If it has few alternatives in turn, they would rather stick
to the existing company (Bendapudi & Berry 1997) The greater this amount, the lower the rate of
switching and vice versa. The switching cost could be in the form of money, time and
psychology. (Jackson & Bund,1985) put it this way; the switching cost is the merger of financial,
physical and psychological costs.

2.5.6 Value-Added Service

These are services offered beyond the usual or ordinary routine services for little or no charge at
all. Its mostly used as a differentiation ploy to keep consumers. Customers will compare the rate
of utilization in the wake of differentiating advantages and possibly ills to a product or service
(Wilson, 2008). Service industries give prevalent quality through upgraded offers that can
enhance consumer loyalty by expanding the customers’ apparent gain and making provision to
buffer inconveniences so that customer service is enhanced (Ravald & Grönroos, 2006).

They further showed the impact of quality including techniques in a long relationship that has
persevered over time, expanding the gains or reducing the loss which gives rise to validity which

16
brings out confidence and wellbeing which paves the way to trust and later reliability. This is a
beneficial link for the firm offering a service and the consumer which brings about development.
Obviously, organizations that execute certain quality including added value on services can build
customers benefits and reduce customers grievances, which always empowers customer
repurchase and makes them defiantly stuck on a firm or service provider. In a long-established
relationship, customers’ expectation through quality and value-added service is identified and
offered considering the desires of the consumers and the environment (Ravald & Grönroos,
2006). At the point when customers are happy because their expectation are met and value is
added, they depend more and stay committed which all together builds trust and in turn upgrades
customer reliability (Wilson & Jantrania, 2005

2.6 Conceptual Framework

The model is refined in such way that at a glance of it will explain to the reader what it depicts.
We can see the position of the variables and the direction of the arrow/line that shows the
relationship between the variables and this can quickly show you which of the variables is
dependent and which is independent. The research intends to take independent variables as,
customer satisfaction, value-added services, brand image, switching cost. The dependent variable
of the study is taken as customer loyalty. The model proposes the hypotheses that these factors
are the primary determinants of loyalty.

Independent variables or Customer value dependent variables

Brand Image

Switching Cost customer loyalty

Value Added Service

Customer satisfaction

Figure-2.1: Conceptual Framework developed by the researcher (2022).

2.7 Empirical Study

This section is dedicated to discuss the previous empirical research done in relation to customer
value and customer loyalty. Study confirmed Lee et al. (2018) who pointed out that augmented

17
customer value can cultivate a customer-brand relationship. Consequently, the customer-brand
relationship induces customers’ desire to engage with a brand. It proved that augmented
customer value, which included customer privilege programs, expedited services, and special
discount for repurchase, could promote CBE and help sustain a long-term relationship with
customers.

Jefry Romdonny. (2018). While customer value has a positive and significant impact on loyalty.
The higher the customer value, the more positive customer loyalty will be to the products
produced by the company. Therefore if the price is high but the benefits obtained by the
customer are not many, it will have an impact on the loyalty given by the customer.

By Kukuh Lukiyanto (2020). The results showed that satisfaction affects customer loyalty.
Therefore, The Effect of Satisfaction on Customer Loyalty’s statement that "Satisfaction has a
significant effect on customer loyalty" is accepted. The regression coefficient for the satisfaction
variable is 0.149. It means that satisfaction has a positive effect on customer loyalty. Higher
satisfaction will increase the customer loyalty.

By Kukuh Lukiyanto (2020). The results showed that customer value affects customer loyalty.
Therefore, The Effect of Customer Value on Customer Loyalty’s statement that "Customer value
has a significant effect on customer loyalty” is accepted. The regression coefficient of customer
value is 0.514. This means that customer value has a positive and significant effect on customer
loyalty. Better customer value will increase customer loyalty. This study’s results support the
research of Suliyanto (2013) and Pratama (2015) that customer value has a significant effect on
customer loyalty. These results indicate that culinary businesses are always expected to provide
value to each service offered to make consumers feel satisfied and loyal.

Yatundu FA. 2019. The study found out that Loyalty programs had a positive effect on customer
loyalty with a significant coefficient. Just like other studies which have been carried out trying to
link loyalty programs to customer loyalty, customers in this study agreed that repeat purchases
enabled them to accumulate points. As much as the use of loyalty programs came with some
benefits to the customers, they still compared the prices with competitors.

Achmad Mulyana*, Sugeng P. (2018). Based on the results of the study, the following findings
found that the marketing mix has a positive and significant direct effect on customer satisfaction

18
and customer loyalty with The research method used in this research is descriptive survey
method and explanatory survey with a minimum sample size of 200 respondents, with the data
analysis method used is structural equation modeling

The findings were that customers were satisfied with the loyalty program and became more loyal
to it. The finding brought into light the operation of the retail loyalty programs, how program
loyalty and store loyalty are connected. Singh & Khan, (2012) looked at an approach that could
be used to increase customer retention and loyalty in B2C world. They highlighted how short-
term actions that enabled the customers to save some money earned profits for the firm in the
long run and ended up building customer loyalty. The researcher concludes in the article by
saying that if you understand the behavior of the customers and satisfy them it benefits the
business in the long run. Jokinen, (2014) did a study on Customer loyalty program where the
researcher analyzed current status of loyalty programs by pointing out relevant areas of
development.

The data was collected by use of Interviews for management and Surveys for Customers using
questionnaires and analyzed by use of descriptive statistics. The findings were that there are
changing trends and companies need to do a follow up, most Customers buy in one supermarket
during the weekdays and hypermarkets during the weekends and that most of the customers
changes in supermarkets was because of lack of fresh foods and impolite customer services. This
study having been done in Russia, it became evident that Price also plays an important role in the
buyers buying behaviors with emphasis being put on quality and little focus on advertisements
but on word of mouth.

The researcher put across a number of recommendations, first is that there are a number of things
that companies can use to ensure loyalty, critical one being to keep in touch with the customers
and knowing the trends in the market and secondly most customers are looking for Comfort and
convenience. Stuivenburg (2015) did a study on loyalty programs comparing theory and practice
by means of systematic literature review (desk research) and literature review are applied in
practice (field research). The findings were that loyalty programs are a way to reward
repurchases with discounted or free products and services and some aspects which seemed more
important than others were to be addressed more thoroughly in order to apply a loyalty program
in its most effective way.

19
Alejandro, King, Groza, (2015), did a study on the nonfinancial benefits of a loyalty program on
Online young consumers. Through Snow ball convenience sampling in grocery, drugs stores,
apparels, travel and entertainment, gas and auto service, dining, electronic shopping and credit
cards. Data was collected through questionnaires and analyzed by Partial least squares structural
equation modelling. The results were that CCID focused on attributes of focal organizational for
identification but not on benefits received by customer and there was need to Investigate market
prices and their effect on CCID Marketing programs that customers directly participate in have
direct benefit to CCID than firm evaluation.

The recommendations were that Managers should acknowledge potential role of customer
loyalty programs, Loyalty programmes help firms develop social relationships with customers
and lastly Marketers should design proper nonfinancial benefits in loyalty programs that are
socially based. Magatef and Tomalieh, (2015) did a study on Impact of customer loyalty
programs on customer retention with emphasis on Point system, Loyalty Programs, Tier system
rewards, non-Monetary programs and Charges for VIP benefits. The study used Survey Design
where 350 respondents were selected using convenience and snowballing sampling. Data was
collected using Questionnaires and analyzed through multiple regression, Pearsons correlation,
Variance inflation factor and Anova. The findings were that the major effect was for Tier system
reward followed by charge Up-front fee for VIP benefits then point system and the weakest
effect being non-monetary programs.

The researcher recommends that organizations should develop different loyalty programs for
different demographic situations. Marketers must differentiate their loyalty programs with their
focus being on retaining customers and building brand loyalty and equally have transparent
feedback to customers regarding loyalty programs.

Chun, Iancu, Trichakis, (2016) did a study on Loyalty Programs and Point values. The researcher
used Multi period model developed using dynamic programming technique and comparative
analysis. The result illustrated that a policy dependent on a mixture of profits and cash flows is
structurally identical to a profit-dependent policy. This model can also be leveraged to study how
specific behavioral parameters (such as a bias in point value perception) affect the firm’s optimal
decisions. Recommendations were that, devaluing the loyalty points may alienate customers and,
in some industries, significantly hurt the firm’s market share, as in the example of Tesco.

20
Modeling all aspects of consumer behavior and understanding their implications would be an
interesting direction for future work. Future directions for analytical and empirical research
examining how managerial incentives or accounting practices impact the value of points. These
considerations warrant several interesting directions for future research, including a more
detailed model that captures competition and important third-party interactions.

Wever, (2016) looked at the Importance of Customer Loyalty Programs for European Airlines
Industry, Importance of Loyalty programs for both airlines and customers and factors essential to
win customers. The researcher used desktop analysis. The results developed a model of stages of
loyalty called “Cognitive Loyalty where customers believe products to be superior, Affective
Loyalty where customers are satisfied with the products, Conative Loyalty which deals with high
involvement and strong buying intentions and Action loyalty which leads to action by the
customers. The recommendation was that Customer loyalty led to customer brand acceptance
and customer brand buying.

A book written by Wyman, (2016) on the future of Customer Loyalty, Building a next-
generation reward program, had a number of findings, first, standard customer loyalty programs
based on transactional rewards will be recognized for what they really are either undifferentiated,
underutilized loss-makers and secondly, reasons for change are new competitors who disrupt the
market, customer expectations that are changing, and right technology used in the right way and
lastly, change should include, adopt a future flexible approach to technology and adopt a start-up
mindset.

The author’s voice is that today’s customer loyalty leaders are moving away from transactional
points-based schemes toward more varied, flexible customer engagement systems. Therefore,
retailers must ensure their programs are structured to support and enable the technological
innovations necessary to deliver loyalty programs of the future. In the new world, many retailers
will require new Key performance indicators (KPIs) to assess the returns they make in their
loyalty programs to make long-term investments possible. For retailers who succeed, an
improved loyalty program can deliver significantly better customer engagement and “stickiness”.
It can also act as a defense against disruptive new entrants trying to get between retailers and
their customers.

21
Wathigo, (2016) looked at the effect of loyalty programs on customer patronage of supermarkets
in Nairobi County. The researcher used descriptive research design, with a target Population of
985,016 and a sample of 384 determined using Gill’s and Johnson’s formulae 2010 having
employed Stratified sampling technique. Data was collected using questionnaires. The findings
were that Customers were likely to shop where they have loyalty cards, Patrons
recommendations was by word of mouth to shop at their preferred retailers and the respondents
shopping behavior did not change on acquiring the loyalty cards since they didn’t believe that
loyalty programs benefits were worth it. The researcher recommends that branding has an effect
on loyalty programs; the economic benefits of loyalty programs affected customer’s loyalty,
loyalty programs should give instant gratification.

Other researchers should find out if there is instant customer acquisition through loyalty
programs and variability of patronage behavior by shoppers’ income level.

Kamau, (2017), did a study on effect of Loyalty programs on customer retention, a case of
Nakumatt customers in 5 branches with emphasis on establishing the effect of point system on
customer retention, effect of smart card on customer retention, determining the effect of gift
vouchers on customer retention and lastly establishing the effect of discounts on customer
retention. The researcher used descriptive research survey design with Qualitative and
Quantitative research methodology. Disproportionate and probabilistic sampling was used to get
385 as the sample size from a population of 4,900 respondents.

The data was collected by use of Questionnaires and analysed using SPSS. The findings were
that Customers were excited with the points systems and redeemed them for various reasons
including discounts, cash and offer products and Points built emotional relationships. The
recommendations were that more research on gift vouchers needs to be done but point system
worked very well in customer retention.

Steinhoff & Palmatier, (2014) did a study on understanding loyalty programs effectiveness
across Europe, an empirical analysis with emphasis on Program characteristics, Retail
characteristics, Retail environment, Cultural characteristics and how all these factors affect
Retail performance. The study was carried out on 350 European retailers in 27 countries.
Desktop analysis was used with results being immediate rewards are favored over delayed

22
rewards, Cash rewards are more preferred over service and products rewards and Loyalty
programs perform better where there is lower competition. The recommendations leveled include
looking at other areas like single vendor and multivendor loyalty programs and Value of discount
in loyalty programs.

Ranabhat, (2018) looked at Customer loyalty in business with emphasis on customer loyalty,
factors and determinants that influence customer loyalty and relationship between customers.
The study involved Students of the university with a sample of 30 being used. Data was collected
using questionnaires since it was quantitative in nature and analyzed using Microsoft excel and
descriptive statistics. The findings were that loyalty may be product specific and company
specific. When a customer repetitively purchases the same product then such customer is said to
be brand loyal and if a customer purchases different products of the same manufacturer then the
loyalty is said to be company specific. The loyal customers always respect their supplier even if
he seems to have some problems and they prefer to continue with the same supplier ignoring
other options. Loyal customers have that believe that their supplier provides them the best and
most beneficial products than others. The researcher recommends that the loyal customers are as
a result of building good and strong relationship between the customers and the company and
come in handy to help the business gain economic advantages.

Loyalty programs can be measured in terms of rewards received through use of a loyalty card,
rewards card and point’s card that may be plastic or paper that can be used to identify the
cardholder as a member in a loyalty program that that adds points as purchases are made. When
an organization comes up with a reward program and adds excellent service that earns easy and
quick rewards it makes the consumers not be keen on the price (Kamau, 2017) and consumers
tend to make purchases from a single firm to accumulate rewards rapidly. Therefore, this study
proposed that:

2.7. RESEARCH GAP

From the reviews of the literature on the effects of customer value on customer loyalty in the
developed, developing, and low-income countries. The reviewed literature is directly or
indirectly related to topics that have been undertaken on these issues and the researcher has

23
observed the following knowledge gaps over the study. Source: developed by the researcher
(2022).

B. Setting Gaps

The study undertaken in different countries has diversities of socio-cultural dimensions which
biases the result the effects of customer value on customer loyalty. Each country is having
distinctive culture under the society where the result of the study might give a different
interpretation about the effects of customer value on customer loyalty in case of bule hora town.
Source: developed by the researcher (2022).

C. Methodological Gaps

The mini supermarket under the review of the literature regarding customer value is based on
age, family size, and educational level of customer loyalty separately. No study has been done
that describes the comprehensive effects of customer value on customer loyalty in case of mini
supermarket in Bule Hora Town. Source: developed by the researcher (2022).

D. Evidence Gaps

Most of the studies are based on panel data sourced from the customer value market database and
very few studies have been undertaken based on primary data such as questionnaires being the
managers' and staff as the prime respondents. Thus, the study finds understanding of the
knowledge gaps in the area of effects of customer value on customer loyalty in case of mini
supermarket stated on the research topic to conducting research in the field in the context of
targeted Bule Hora Town. Source: developed by the researcher (2022).

# Overall helpful comments and guidelines from Review of Related literature

Literature Review: provide a summary of previous related research on the research problem
and their strength and weakness and a justification of your research - What is known/what have
been done by others? And, why your research is still necessary?

# in your literature review you have to incorporate the following points.

 Introduction

24
  Theoretical literature review (Theories, fundamental concepts,
models and related approach’s in relation to your particular study).
 Brief description of your study variables in accordance with your
research objective’s
 Empirical review (summarized previous research works by
indicating Authors, year of publication, title, methodologies that
have been used, and finding of their studies. Based on your specific
objectives.
 Gaps of the study
 Research framework
 Research hypothesis

 In addition, the comments that I have given in your background of

the study are working right here; especially issue of chorology and
logical orders as well as problems related with citations.

CHAPTER THREE:

RESEARCH DESIGN AND METHODOLOGY

INTRODUCTION
This chapter presents details of the research design and methodological considerations of the
thesis. It includes Description of the Study Area, the research design, sample size, data source,

25
method of data collection, procedure of data collection, methods of data analysis, and ethical
considerations.

3.1 Description of the Study Area

This study will be conducted on West Guji zone, Bule Hora Town supermarket of Oromia
Regional state. It is located in southern Oromia, West Guji zone is bordered on the South by
Borena, on the west by the Southern Nations, Nationalities and people region, on the North by
the Gedeo Zone of Southern Nation, Nationalities and peoples Region and Sidama Region and
on the East by Guji Zone. Bule Hora is the central town of the West Guji and lies 467km south of
Addis Ababa. Based on the 2007 census conducted by the central Statistical Agency of Ethiopia,
this zone has a total population of 1,389,800 of who 702,580 are men and 687,220 are women,
with an area of 18,577.05 square kilometers, People are predominantly involved in small scale
subsistence agriculture production and mainly on livestock husbandry. Currently mean annual
temperatures lay around 19c0. In general, the warmest period in the year is from January to
March, while the lowest and annual minimum temperatures occur between the months of August
and October (AfD, 2010). West Guji zone has 10 woredas and 1 City Administration. The
researcher will conduct the study only on supermarket to make the study more manageable.

26
3.2 Research Design

Research design was the framework of research methods and techniques chosen by a researcher.
Kothari (2004) stated that the research design is the conceptual arrangement within which the
research is conducted; it constitutes the blueprint for the collection, measurement, and analysis of
data. To this end, the researchers Will be used the quantitative method. Research in such a
situation is a function of researchers' insights and impressions Barnham, C. (2015). In
Quantitative research: frequency distribution analysis, descriptive analysis, inferential analysis
will be used for this study

According to (Ngechu, 2004), Descriptive research is relevant as it explains the current status of
a phenomenon and is concerned with finding out the what, where and how of a phenomenon.

It's helpful to use frequency distributions in statistical analysis for visualizing how a variable is
distributed across the study and how to make inferences about a population of the study based on
a sample. These two reasons help define the two general branches of statistics: descriptive
statistics and inferential statistics. Along with descriptive statistics such as averages, ranges of
values, and percentages or counts, the chart of a frequency distribution puts you in a stronger
position to understand a set of the study because it helps to visualize how a variable behaves
across its range of possible values. In the area of inferential statistics, frequency distributions
based on samples help to determine the type of analysis used to make inferences about the
population Blaikie, N. (2003).
You should Encompass:-
 Research paradigm (philosophy)
 Research Approach &
 Research methods before you proceed to sampling technique and sample size
determination

3.2.1 Sample Size and Sampling Techniques

3.2.2. Population

27
According to (Zikumund, 2003) The definition of population is identifiable total set of elements
of interest being investigated by a researcher. The target population is defined as the entire group
a researcher is interested in. The populations of this study are customer of West Guji Zone mini
supermarket in Bule Hora Town. The target populations for the study are those who are customer
in West Guji Zone mini supermarket in Bule Hora Town.
Therefore, the focus will be at Bule Hora Town branch level customers which have a total of
1060 customers. For this reason, the branch can be qualified as a good representative of the
various categories of customer of West Guji Zone mini supermarket in Bule Hora Town.

3.2.3. Sampling Techniques

(Creswell, 2009) define that it is the way of drawing inference about a population without
studying the entire population under study. It is also advantageous in time consuming and cost
saving. Thus, by using purposive sampling method. From the variety of probabilistic sampling
techniques, the researcher will be used stratified random sampling methods for large target
population of the study. Robson (2002) tell us that sampling theory supports stratified random
sampling as an efficient choice because the means of the stratified samples are likely to be closer
to the mean of the population overall.

3.2.4. Sample Size

The sample size will be determined from of 1060 customers questionnaires will be distributed to
randomly. Researcher will select from the sample frame in simple random sampling in selecting
respondents from all supermarket in Bule Hora Town and each individual will be chosen entirely
by chance and each member of the population has an equal chance of being included in the
sample.

Sample size is actually the total number of units which are to be selected for the analysis in the
research study. In order to determine sample size; the researcher will be used formula for
calculating the required sample size in five sampled banks??? The formula was developed by
Taro Yamane (1967).). It is calculated as follows

It is calculated as follows

n = N/ 1+N (e)2 1060/1+1060 (0.05)2 so, 1060/1+(1060x0.0025) = 290.

28
Where: N= total population e =allowable error (%) n = no of sample size required
Where: N= total population

e =allowable error (%)

n = no of sample size required

3.3 Method of Data Collection

With an aim to investigate the satisfaction and /or dissatisfaction level of customers with regard
to services delivery of mini supermarket in Bule Hora Town, the researcher will be used
questionnaires to gather data from subjects. Questionnaires are distributed to major customers of
West Guji Zone mini supermarket in Bule Hora Town only. customer loyalty which is the chief
focus of the study is the variable depending on customer satisfaction, value-added services,
brand image, switching cost, which are the independent variables customer loyalty.

3.4 Procedures of Data Collection

Up on request, the researcher got permission from West Guji Zone mini supermarket in Bule
Hora Town to gather data on customer value on customer loyalty specifically from major
customers of supermarket users of the company in Oromia region. Then, questionnaires are
distributing to the respondents with the necessary explanations on how to complete the
questionnaire. The survey pack included a copy of the cover letter and the main questionnaire.

3.5 Method of Data Analysis

Data collected from primary sources was analyzed using descriptive analysis like tables, figures,
charts, bar graphs and others. In addition to this, the researcher will be also concerned with the
interpretation and representation of justification. The collected data from customers are
summarized; edit, code and data entry will be done. And then SPSS and descriptive statistics are
applied to analyze the data as:

 Frequency counts and percentage were used to analyze various characteristics of the sample
population such as sex, age and occupation.
 Mean was used to assess the degree or magnitude of West Guji Zone mini supermarket in
Bule Hora Town expectation and perception under the dimensions considered in this study.

29
 T-tests were executed to test for the significant difference and similarities that may exist
between the mean of service quality expectation and perception of West Guji Zone mini
supermarket in Bule Hora Town.

3.6, Ethical Considerations

Given the importance of ethics for the conducted of research, this study was carried out with
ethical approvals from people concerned. First, the researcher requested West Guji mini
supermarket in Bule Hora Town for permission to access the necessary documents of the
company and contact major customers in the city brand to fill in questionnaires. Similarly, after
getting consent from the company, the researcher explained briefly the subjects (major
customers) the purpose of the research and got from them oral consents before they filled in the
questionnaires.

In fact, the purpose of the research will be explained for each of the participants and each of
them will be requested for his consent. Moreover, they are informed that their names and data
would be kept confidential. For this reason, in analyzing and appending the data, codes were
used instead of names in order to protect participants‟ anonymity.

# Additional subtopics that you should incorporate under this this particular chapter

 Source of Data
 Data Collection instruments
 Measurement of Variables
 Model specifications
 Data Analysis tools
 Reliability and Validity of data collection Instruments

30
 CHAPTER-FOUR

RESULTS AND DISCUSSION

4.0 Introduction
This chapter describes the response rate of the respondents, reliability of data through Cronbach
Alpha, demographic profile analysis of the respondents, descriptive analysis, classical linear
regression diagnostic test and inferential statistics followed by discussion of the results.

4.1. Response Rate

The study targeted a sample size of 320 respondents and all filled in and returned the 290
questionnaires and data scanning validated the 290 questionnaires makes response rate of
90.62%. This response rate was excellent and representative and conforms to Mugenda (1999)
stipulation that a response rate of 50% is adequate for analysis and reporting; a rate of 60% is
good and a response rate of 70% and over is excellent.

Table No: 4.1 Response Rate of the Questionnaire.

Respondents Questionnaire distributed Questionnaire responded Response rate (%)

Respondents 320 290 90.62

Total 320 290 90.62

Source: (field Survey, 2022)

31
4.2. Reliability Analysis
This study used Cronbach alpha to test the reliability of questionnaire. The findings show that
Cronbach alpha for all dimensions of service quality are above 0.70 which indicates a high level
of internal consistency for all items. Over all Cronbach alpha value for twenty five items is .910.

Table: 4.2 Reliability Statistics

Cronbach's Alpha N of Items
.910 25

Table No: 4.2 Reliability Statistics

Reliability Statistics

Cronbach's Alpha N of Items

.926 5
Source: SPSS-20 Reliability test, 2021

Cronbach's alpha is a reliability coefficient that indicates how well the items in a set are
positively related to one another. This test specifies whether the items pertaining to each
dimension are internally consistent and whether they can be used to measure the same construct
or dimension of impacts of enablers and barriers on loan repayment capacity of borrowers.
Reliability is calculated in such a way that it represents the reliability of the mean of the items,
not the reliability of any single item. According to (Nunnally, 1978), Cronbach’s alpha should be
0.700 or above.

Table No: 4.3 Reliability Statistics for Each Variable

No. of Items Cronbach's Alpha

32
Brand Image 0.923

Switching cost 0.909

Value Added Service 0.924

Customer satisfaction 0.898

Customer Loyality 0.889

Source: SPSS-20 Reliability test, 2021

The table shows that the coefficient for the procurement practices and customers Satisfaction
related factors, Brand Image, Switching cost, Value Added Service, Customer & satisfaction &
Customer Loyalty 0.923 0.909 0.924 0.898 0.889) respectively, and Customers
Satisfaction is .910. Therefore, the overall reliability test indicated that good reliability and
internal consistency for which is greater than the standard value (i.e., >.70).

4.3. Demographic Profile Analysis of the Respondents

The first part of the questionnaire consists of the respondents' demographic information. It
consists of a limited amount of information related to demographic characteristics of the
respondents.

Table No: 4.4 Demographic Analyses of Respondents

Demographics Category Frequency %
Gender Male 203 63.4
Female 87 27.2
Total 290 90.6
Age 10-20 years 83 25.9
21-35 years 169 52.8
36-50 years 38 11.9
Total 290 90.6
Educational Level Secondary school 218 68.1
Diploma 35 10.9
Degree 34 10.6
Others 3 .9

33
 Total 290 90.6
martial of single 183 57.2
respondents married 105 32.8
Divorce 2 .6
Total 290 90.6
Source: (field Survey, 2022)

Figure No: 4.1. Gender of the Respondents

From the survey it has been observed that 290 respondents have filled the questionnaire. Based
on the above table 4.4 and Figure 4.1, out of 290 respondents, 203 (63.4 %) of them are male,
whereas the remaining 87 (27.2 %) respondents are female.

34
Figure No 4.2: Age of the Respondents

As seen in Figure 4.2, the higher frequency of age group of the respondents was accounted
within the ranges of 10-20 years as 83(25.9%) of the total 290 respondents. Between 21-35 years
of age was reported as 169 (52.8 %) and 36-50 years were 38 (11.9 %) respectively.
Therefore, those respondents with the age of 21-35 years have mainly conducted the super
marketing activities.

35
Figure No 4.3: Education Level of Respondents
Figure 4.3 shows that, nearly 218(68.1 %) of the respondents attended secondary school
followed by diploma, high school and above with 35(10.9 %), and Degree 34(10.6%)
respectively. The result showed that majority of the respondents has completed their second
school.

Figure No 4.4: marital Level of Respondents

From total respondents participated in the research, 183(57.2%) of the respondents their marital
status is married, 105 (32.8%) were single, 2(0.6%) of the respondents were divorced. From this
the researchers conclude that majority of customers are married.

4.4. Descriptive analysis of respondent’s opinion

The descriptive analysis respondent the transforming of raw data into a form that enables the
researcher to understand and interpret easier in terms of rearranging, ordering, and manipulating
data to provide descriptive information. The mean, range and standard deviation were calculated
for the ordinal scale of independent variables (Customer satisfaction, Value Added Service,
Switching cost & Brand Image) and dependent variable as customer loyalty (Burns & Bush,
2006).

As described earlier, the questions related with both the dependent and independent variables
were prepared using a Likert scale. That means, from each perspective questions were prepared
in the form of an ordinal scale.

36
On the other hand, Likert scale data are analysed at the interval measurement scale. Likert scale
items are created by calculating a composite score (sum or mean) from four or more type Likert
type items; therefore, the composite score for Likert scales should be analysed at the interval
measurement scale. Descriptive statistics recommended for interval scale items include the mean
for central tendency and standard deviations for variability of data under study.

Hence, from this study point of view, the raw data collected from each construct of the variables
are the form of ordinal scale. However, for the sake of simplicity of analysis, the variables
transformed into interval scale leading the researcher to obtain a total of each construct as a
single variable for each construct taken for the study.

To the study the level of agreements of respondents on every variable according to the response
of the study, mean and standard deviations were calculated. However, while interpreting the
mean and standard deviation results, the scales were reassigned as follows to make the
interpretation easy and clear (Al-Sayaad et al., 2006) explained in Table 4.5.

Table No: 4.5. Five Scaled Likert Criterion

No. Mean range Response Option
1 1 to 1.80 Strongly disagree
2 1.8 to 2.6 Disagree
3 2.6 to 3.4 Neutral
4 3.4 to 4.20 Agree
5 4.2 to 5.00 Strongly Agree
Source: Al-Sayaad et al. (2006, as cited by Bassam, 2013).

37
4.5: Descriptive Analyses of Customer Value on Customer Loyalty

4.5.1: Brand Image

Table No: 4.6 Descriptive Analyses of Brand Image

Descriptive Statistics
N Mini Maximu Mean Std.
mu m Deviatio
m n
The mini super market is 290 1.00 5.00 4.3333 .82711
providing branded products to
me.
I feel sometimes I do not get 290 1.00 5.00 4.2917 .94804
products as it is sold when I
arrive.
I stick to one mini super market 290 1.00 5.00 4.1406 .82247
due to their service to me.
Buying product at Mini makes 290 2.00 5.00 3.9427 .81981
me feel delighted.
Valid N (list wise) 290

Source: SPSS Output (2022)

Above table shows that “The mini super market is providing branded products to me” scored the
highest from the all responsiveness factors with a mean score of 4.3333 and with standard
deviation of .82711. This means that most of the respondents agreed with that responsiveness as
an independent variable of customer loyalty of mini super market in the study area. Which is
followed by “I feel sometimes I do not get products as it is sold when I arrive”, having the mean
value of 4.2917 and standard deviation of .94804 “I stick to one mini super market due to their
service to me” is with third highest mean value 4.1406 and standard deviation of .82247 shown
on Brand Image factors.
It can now be seen that “Buying product at Mini makes me feel delighted” with mean score of
3.9427 and standard deviation of .81981, used as fifth most important criteria for customer
loyalty of mini super market in case of responsiveness.In other words, the result shows that
38
factors of “The mini super market is providing branded products to me” and “I feel sometimes I
do not get products as it is sold when I arrive” are the two top most factors of responsiveness that
affect the customer loyalty of mini super market.

4.5.2: Switching cost

Table No: 4.7: Descriptive Analyses of Switching cost

Descriptive Statistics
N Mini Maxi Mean Std.
mum mum Deviation
I feel the products bought from mini super 290 1.00 5.00 4.2917 .94804
market are a value for money.
The mini super market is selling the 290 1.000 5.000 4.03125 .991621
products with door delivery service.
The mini super markets keep latest arrival 290 2.00 5.00 3.9427 .81981
of branded products.
I am happy with the value added service 290 1.00 5.00 3.0990 1.32854
offered by the mini super market.
Valid N (listwise) 290

Source: SPSS Output (2022)

Above table shows that “I feel the products bought from mini super market are a value for
money” scored the highest from the all assurance factors with a mean score of 4.2917 and with
standard deviation of .94804. This means that most of the respondents agreed with that assurance
as an independent variable of switching cost of mini super market in the study area. Which is
followed by “The mini super market is selling the products with door delivery service”, having
the mean value of 4.03125 and standard deviation of .991621. “The mini super markets keep
latest arrival of branded products” is with third highest mean value 3.9427 and standard
deviation of .81981shown on Switching cost factors.
It can now be seen that “I am happy with the value added service offered by the mini super
market” with mean score of 3.0990and standard deviation of 1.32854, used as fifths most
important criteria for customer loyalty of mini super market in case of Switching cost.

39
In other words, the result shows that factors of “I feel the products bought from mini super
market are a value for money” & “The mini super market is selling the products with door
delivery service.” are the two top most factors of Switching cost that affect the customer loyalty
of mini super market.

4.5.3: Value Added Service

Table No: 4.8: Descriptive Analyses of Value Added Service

Descriptive Statistics
N Min Max Mean Std.
Deviation
I visit other mini super market only of I do not get 290 1.0 5.00 4.385 .73605
my products in my favourite shop. 4
I stick to one mini super market always. 290 1.0 5.00 4.333 .84589

I switch to other mini super market only if it is 290 1.0 5.00 4.312 .83525
closed. 5
I don’t want to switch from one mini super market 290 1.0 5.00 4.125 .83447
to other. 0 0
Valid N (listwise) 290

Source: SPSS Output (2022)

Above table shows that “I visit other mini super market only of I do not get my products in my
favorite shop” scored the highest from the all Value Added Service factors with a mean score of
4.3854 and with standard deviation of .73605. This means that most of the respondents agreed
with that Value Added Service as an independent variable of customer loyalty of mini super
market in the study area. Which is followed by “I stick to one mini super market always”, having
the mean value of 4.3333 and standard deviation of .84589. “I switch to other mini super market
only if it is closed” is with third highest mean value 4.3125 and standard deviation of .83525
shown on Value Added Service factors.
It can now be seen that “I don’t want to switch from one mini super market to other” with mean
score of 4.1250 and standard deviation of .83447, used as fourth most important criteria for
customer loyalty of mini super market in case of Value Added Service.

40
In other words, the result shows that factors of “I visit other mini super market only of I do not
get my products in my favorite shop” & “ I stick to one mini super market always.” are the two
top most factors of Value Added Service that affect the customer loyalty of mini super market.

4.5.4: Customer satisfaction

Table No: 4.9: Descriptive Analyses of Customer satisfaction

Descriptive Statistics
N Mini Maxi Mean Std.
mum mum Deviatio
n
I am happy with the ambience of mini super 290 1.00 5.00 4.3125 .83525
market.
I satisfied with the pricing of products at 290 1.00 5.00 4.2917 .94804
mini super market.
I like that the offering of some products by 290 2.00 5.00 3.9427 .81981
mini super market is at discount.
Mini Supermarket is my ideal shop. 290 1.00 5.00 2.9219 1.31807

Valid N (listwise) 290

Source: SPSS Output (2022)

Above table shows that “I am happy with the ambience of mini super market” scored the
highest from the all Customer satisfaction factors with a mean score of 4.3125 and with
standard deviation of .83525. This means that most of the respondents agreed with that
Customer loyalty as an independent variable of Customer satisfaction of mini super market in
the study area. Which is followed by “I satisfied with the pricing of products at mini super
market”, having the mean value of 4.2917 and standard deviation of .94804. “I like that the
offering of some products by mini super market is at discount” is with third highest mean value
3.9427 and standard deviation of .81981 shown on Customer satisfaction factors.

It can now be seen that “Mini Supermarket is my ideal shop” with mean score of 2.9219 and
standard deviation of 1.31807, used as fifth most important criteria for customer loyalty of mini
super market in case of customer satisfaction.
41
In other words, the result shows that factors of “I am happy with the ambience of mini super
market” & “I satisfied with the pricing of products at mini super market” are the two top most
factors of customer satisfaction that affect the customer loyalty of mini super market.

4.5.5: Customer Loyalty

Table No: 4.10: Descriptive Analyses of Customer Loyalty

Descriptive Statistics
N Mini Maxi Mean Std.
mum mum Deviation
I consider myself loyal to the products of mini 290 1.00 5.00 4.3333 .86426
super market.
When buying products, my first choice is mini 290 1.00 5.00 4.3125 .83525
super market.
I will keep on buying from mini super market 290 1.00 5.00 4.3125 .83525
as long as it provides me satisfaction.
I am still willing to go to my favourite mini 290 1.00 5.00 4.2917 .94804
super market even if its prices of products are

42
 little higher than that of its competitors.
I encourage friends and relatives to visit to the 290 1.00 5.00 4.1406 .82247
Mini super market.
I have a sense of loyalty to Mini Supermarket. 290 1.00 5.00 4.0312 .99162

I will continue buying products in the future 290 2.00 5.00 3.9427 .81981
from the mini super market.
I say positive things about Mini to other 290 1.00 5.00 3.0417 1.32568
people so that they will buy.
Source: SPSS Output (2022)
Above table shows that “I consider myself loyal to the products of mini super market” scored
the highest from the all Customer Satisfaction factors with a mean score of 4.3333 and with
standard deviation of .86426. This means that most of the respondents agreed with that
Customer loyalty as an independent variable of Customer loyalty of mini super market in study
area. Which is followed by “When buying products, my first choice is mini super market”,
having the mean value of 4.3125 and standard deviation of .83525. “I will keep on buying from
mini super market as long as it provides me satisfaction” is with third highest mean value
4.3125 and standard deviation of .88456 shown on Customer Loyalty factors.

It can now be seen that “I am still willing to go to my favorites mini super market even if its
prices of products are little higher than that of its competitors” with mean score of 4.2917 and
standard deviation of .94804, used as fifth most important criteria for customer loyalty that affect
the customer loyalty of mini super market.

“I encourage friends and relatives to visit to the Mini super market” scored the fifth from the all
customer loyalty factors with a mean score of 4.1406 and with standard deviation
of .82247. This means that most of the respondents agreed with that Customer loyalty as an
independent variable of Customer loyalty of mini super market in study area. Which is followed
by “I have a sense of loyalty to Mini Supermarket”, having the mean value of 4.0312 and
standard deviation of .99162. “I will continue buying products in the future from the mini super
market” is mean value 3.9427and standard deviation of .81981 shown on Customer Loyalty
factors.

43
It can now be seen that “I say positive things about Mini to other people so that they will buy”
with mean score of 3.0417 and standard deviation of 1.32568, for customer loyalty that affect the
customer loyalty of mini super market.

In other words, the result shows that factors of “I consider myself loyal to the products of mini
super market” & “When buying products, my first choice is mini super market.” are the two top
most factors of customer loyalty that affect the customer loyalty of mini super market.

4.6. Inferential Analysis

Inferential analysis is concerned with the various tests of significance for testing hypotheses to
determine what validity data can be said to conclusions. It is also concerned with the estimation
of population values. It is mainly based on inferential analysis that the task of interpretation (i.e.,
the task of drawing inferences and conclusions) was performed.

4.6.1: Correlation analysis

Correlation analysis is a technique used to indicate the relationship of one variable to another and
can be considered as a standardized covariance that shows the extent to which a change in one
variable corresponds systematically to a change in another and it is perhaps the most basic and
most useful measure of association between two or more variables (Zikmund et al, 2013). This
study employed correlation analysis, which investigates the strength of the relationships between
Customer Value On Customer Loyalty In order to evaluate this relationship, Pearson product-
moment correlation coefficient “r” is employed and correlation coefficient “r” normally varies
between -1.0 to +1.0. The coefficient (r) revealed the magnitude and direction of relationships.
The sign indicates whether there is a positive correlation (as one variable increase, the other also
increase) or negative correlation (as one variable increase, the other decrease) and it also shows
the intensity of the relationship.

Table No: 4.11: Correlations analysis

Correlations
Customer Strength of
Loyalty Relationship(%
)
Brand Image Pearson Correlation .686** 47.05%

44
 (0.686X0.686)
Sig. (2-tailed) .000
N 290
Switching cost Pearson Correlation .689** 47.47%
(0.689X.689)
Sig. (2-tailed) .000
N 290
Value Added Pearson Correlation .786** 58.98%
Service (0.786X0.786)
Sig. (2-tailed) .000
N 290
Customer Pearson Correlation .796** 63.36%
satisfaction (0.796X0.796)
Sig. (2-tailed) .000
N 290
Source: SPSS Output (2022)
As per above table, there were statistically significant positive relationship between five
determinants of Customer Value on Customer Loyalty at p<0.01 level. Therefore, we can say
that Customer Loyalty had statistically significant positive correlation with all the five explored
determinants. The strength of relationship between Customer Value and Customer Loyalty in
descending order are Customer satisfaction (63.36%), Value Added Service (58.98%), Switching
cost (47.47%) and Brand Image (47.05%) respectively.
4.6.1.1: Correlations analysis Brand Image
As shown on the above table, there was a positive and statistically significant relation between
Brand Image s and Customer Loyalty with (r = 0.686, p<.01). This implies that there is a strong
positive correlation between Brand Image s and Customer Loyalty held by customers. In other
words; Brand Image plays a deceive role in holding a Customer Loyalty in the study area. There
were statistically significant positive relationship between Brand Image of Customer Value on
Customer Loyalty at p<0.01 level.

45
4.6.1.2: Correlations analysis Switching cost
The result of correlation above showed there was a positive and statistically significant relation
between Switching costs and Customer Loyalty with (r = 0.689, p<.01). This implies that there is
a positive correlation between Switching costs and Customer Loyalty held by customers. In other
words; Switching cost plays a deceive role in holding a Customer Loyalty in the study area.
There were statistically significant positive relationship between Switching cost of Customer
Value on Customer Loyalty at p<0.01 level.
4.6.1.3: Correlations analysis Value Added Service
The result of correlation above showed there was a positive and statistically significant relation
between Value Added Service and Customer Loyalty with (r = 0.786, p<.01). This implies that
there is a positive correlation between Value Added Service and Customer Loyalty held by
customers. In other words; Value Added Service plays a deceive role in holding a Customer
Loyalty in the study area. There were statistically significant positive relationship between Value
Added Service of Customer Value on Customer Loyalty at p<0.01 level.
4.6.1.4: Correlations analysis Customer satisfaction
The result of correlation above showed there was a positive and statistically significant relation
between Customer satisfaction and Customer Loyalty with (r = 0.796, p<.01). This implies that
there is a positive correlation between Customer satisfaction and Customer Loyalty held by
customers. In other words; Customer satisfaction plays a deceive role in holding a Customer
Loyalty in the study area. There were statistically significant positive relationship between
Customer satisfaction of Customer Value on Customer Loyalty at p<0.01level since p value is
0.000.
Thus, the researcher generalized that assurance had strongest positive and statistically significant
correlation with Customer satisfaction than the other responsiveness.

4.6.2. Multiple Linear Regression Analysis

As stated in Hair, et. al., (2010), to test multiple regression models, it is necessary to assess
whether the collected data violate some key assumptions of regression models because any
assumption violations can result in distorted and biased research results. Thus, several
assumptions must be true to conclude a population based on a regression analysis done on a
sample. When the assumptions of regression are met, the model that we get for a sample can be

46
accurately applied to the population of interest (the coefficients and parameters of the regression
equation are said to be unbiased). This section will test six assumptions: sample size, normality,
multicollinearity, homoscedasticity, serial correlation, and assessing the appropriate Regression
Model.

Measurement of Variables, Proxies and Symbol Prior to running the analysis of multiple
regression models, it is mandatory to assess whether the collected data violate some key
assumptions of the standard linear regression models because an assumption violation can result
in distorted and biased parameter estimates. The assumptions include sample size, normality,
multi-collinearity, homoscedasticity, linearity, and independence of residuals crucial to confirm
them.

Assumption 1 – Sample Size

Regression analysis is often sensitive to sample sizes. The sample size exceeds the minimum to
run the standard multiple linear regression based on the criteria. Most researchers tend to use
Tabachnick and Fidel (2007) formula for calculating sample size requirements for multiple
regressions. These authors took into account the number of independent variables that
researchers wish to use: N > 50+8(4) =82 (where N = sample size and m = number of
independent variables). In the case of this study, the number of independent variables is 6 and
sample size is 290. Substituting these values into the formula, we have; 290 > 82. Hence, the
assumption on sample size requirements for multiple regressions was met by the researcher
before analyses.

47
Assumption 1 – Normality Test

Figure No:-4.5: Test of Normality

The test of normality can be visualised from the figure 4.1 where the histogram displays that the
data demonstrated a normal distribution.

Assumption 2 - Linearity Relationship

The second assumption for computing multiple regressions is testing of the linear relationships
between dependent and independent variables. To check whether the residuals have a normal
distribution, scatter plots of residuals against each independent variable and predicted dependent
variable were analysed (i.e. the normal probability plot or normal P-P of regression standard
residual is used).

48
Figure No:4.6: Test of Linearity
This figure reveals that all the data are clinging to the diagonal hence; there exists a linear
relationship between the predictors Customer Value and the predicted variable on Customer
Loyalty

Assumption 3 – Multicollinearity of the variables

According to field (2009), if there is perfect collinearity between predictors, it becomes

impossible to obtain unique estimates of the regression coefficients because an infinite number
of combinations of coefficients would work equally well. Multicollinearity can be controlled by
tolerance values and values of variance of inflation factor (VIF). Any variable with tolerance
below (0.10 or tolerance with a value above (10.0) would have a correlation more than 0.90 with
other variables, indicative of the multicollinearity problem. The tolerance is calculated with an
initial linear regression analysis. Tolerance is defined as T= 1-R 2 for the first step regression
analysis. With T< 0.1 there might be a multicollinearity problem in the data. In addition, the
variance inflation factor of the linear regression is defined as VIF=1/T. Similarly, with VIF>10,
there is a signal that a multicollinearity problem exists.

49
Table No-4.12: Results of Multicollinearity test.
Collinearity Statistics
No. of Items Tolerance VIF
Brand Image .328 3.045
Switching cost .362 2.760
Value Added Service .431 2.319
Customer satisfaction .239 4.178
Source: (field Survey, 2022)

According to the table 4.12, the tolerance value for all independent variables confirms the
suggested value (0.1 to 1) is more than (0.10) and VIF for independent variables is less than the
limited value (10.0), and so that there is no multi-collinearity between the marketing mix
strategies and customer loyalty of the model. As shown on the above table, the tolerance values
for each independent variable (Brand Image, Switching cost, Value Added Service &
Customer satisfaction) were 0.328, 0.362, 0.431 & 0.239 respectively which were not less
than 0.10. This is also supported by the VIF value, which were 3.045, 2.76, 2.319 & 4.178
respectively which were well below 10. Therefore, the analysis was not violated the
Multicollinearity assumption.

Figure No-4.7: Test of heteroscadacity

50
Assumption 4 - Heteroscadacity (Equal Variance)

At each level of the independent variables, the variance of the residual terms should be constant.
This just means that the residuals at each level of the independent variables should most likely
have the same variance (homoscedasticity). The scatter plots of residuals against each of the
independent variables and predicted dependent variables were used to check the
homoscedasticity of residuals. The scatter plots of the residuals against the dependent variable
values seem like a random array of dots evenly distributed around zero, implying there is no
heteroscadacity of the variables.

Assumption 5- Test of Independence of Residuals (Autocorrelation)

The last assumption for multiple regressions is the independence of residuals. The independence
of the residuals can be measured by Durbin-Watson statistics. The value of the Durbin-Watson
statistic ranges from 0 to 4. As a rule, the residuals are independent (not correlated from one
observation to the other one) if the Durbin-Watson statistic is approximately 2, and the almost
ideal range is between 1.50 - 2.50. As per the Table, the Table 4.16, the output value of Durbin-
Watson is 1.768 indicating that there is no correlation among the residuals.
Thus, from the perusal of the classical linear diagnostic test, it is clear that the variables have
tested all the assumptions diagnostic tests and therefore the qualified variables are fit for
applying multiple regression analysis.

4.6.4. Multiple Regression Analysis

The testing of hypotheses requires applying multiple linear regression estimations to test the
proposed hypothesis since multiple linear regression refers to an analysis concerned with
studying the dependence of one variable over other independent variables to predict the predictor
variable with the latent variables.

51
Table No-4.13: Multiple Regression Analysis
Model Summaryb
Model R R Adjusted Std. Error Change Statistics Durbin-
Square R Square of the R F df1 df2 Sig. F Watson
Estimate Square Change Change
Change
1 .978a .956 .955 .08861 .956 1015.411 4 187 .000 1.768
a. Predictors: (Constant), Customer Satisfaction, Value Added Services, Switching Cost, Brand
Image
b. Dependent Variable: Customer Loyalty
Source: (field survey, 2022)
As seen in Table 4.16, the value (R=.978a) is the multiple correlation coefficient between
independent variables Customer Value on Customer Loyalty as dependent variable.

The Value of R2 is a measure of how much variability in the outcome is accounted for by the
independent variables. The result shows that a value of R 2 is .956, implying that the total
variation in the dependent variable customer loyalty is explained or caused by 95.6 % of the
change in all independent variables Customer Value. In other words, 4.4 % of the variation in
Customer Loyalty cannot be explained by these marketing mix strategies. Positivity and
significance of all values show that the model summary is also significant and gives logical
support to the study model.

The value of adjusted R2 (.955) gives some idea of how well the model generalises and ideally
one would like its value to be the same, or very close to, the value of R 2. In the % study, the
difference between the values of R2 and the adjusted R2 is 0.956-0.955= .01(1 %). This shrinkage
means that if the model were derived from the population rather than from the sample, it would
account for approximately 9 % less variance.

The standard error of the estimate is a measure of the variability of the multiple correlations.
Therefore, as shown in the model summary for the regression analysis table above, the standard
error of this model's estimate is .08861. This implies that the variability of the multiple
correlations is as much as this numeral.

52
4.6.6. Analysis of Variance (ANOVA)

Table No-4.14: Analysis of Variance ANOVAa

Model Sum of df Mean F Sig.
Squares Square
Regression 31.892 4 7.973 1015.411 .000b
1 Residual 1.468 187 .008
Total 33.361 191
a. Dependent Variable: Customer Loyalty
b. Predictors: (Constant), Customer Satisfaction, Value Added Services,
Switching Cost, Brand Image
Source: (field Survey, 2022)

ANOVA analysis is normally used to compare the mean scores of more than two groups or
variables. It is also called analysis of variance because it compares the variance between groups
(Pallant, 2010). On the above table, ANOVA shows that the p-value for F-Statistics (0.000) is
less than the significance level 0.01 (p<0.01). This is to mean that the model is significant/
acceptable from a statistical perspective. To explain more, accepting at least one of the
independent variables had a significant influential relationship on Customer Loyalty.

53
4.6.5. Coefficients of Regression Analysis

Table No-4.15: Coefficient P-value and Standardised Coefficients

Model Unstandardized Coefficients Standardized T Sig.
Coefficients
B Std. Error Beta
(Constant) .147 .072 2.048 .042
Brand Image .098 .027 .097 3.607 .000
Switching Cost .664 .022 .759 29.770 .000
1 Value Added
.076 .023 .078 3.318 .001
Services
Customer
.123 .029 .132 4.217 .000
Satisfaction

According to table 4.17 shows the coefficients of regression shown between independent
variables Brand Image, Switching cost, Value Added Service, Customer satisfaction and a
dependent variable Customer loyalty.

The beta values tell what degree each independent variable affects the outcomes of the effects of
all other predictors are held constant.

Each of the beta values has an associated standard error indicating to what extent these values
would vary across different samples. These standard errors are used to determine whether beta
value differs significantly from zero. The t-test associated with b-value is significant (if the value
in the column labelled Sig. is less .05) then the predictor is making a significant contribution to
the model. The smaller the value of the sign, the larger the value of t and the greater the
contribution of that predictor. Thus, Brand Image, Switching cost, Value Added Service,
Customer satisfaction are highly significant at 1% and physical and process significant at 5%
level of significance with and a dependent variable Customer loyalty.

We can use the standard deviation of this distribution (known as the standard error) as a
measure of the similarity of beta-values across the sampled respondents. If the standard error is

54
very small, then it means that most samples are likely to have a beta-value similar to the one in
our sample (because there is little variation across sampled respondents). When the standard
error is small, even a small deviation from zero can reflect a meaningful difference because beta
represents most possible samples. The following hypotheses were tested using multiple
regression analysis to know if there is an effect of independent variables on the dependent
variable. According to the decision rule: accept the null hypothesis (H o) if the significance level
(𝛼) of the variable is greater than the (0.05) significance level, reject (H o) if the significance level
(𝛼) of the variable is equal or less than (0.05) (Sekaran, 2004).

4.6.7. Hypothesis Testing and Discussion.

In this part, the researcher tests both hypotheses regarding the relationship between dimensions
of Service quality and its effects on customer satisfaction. This hypothesis testing is based on
standardized coefficients Beta (β) and P-value to test whether the hypotheses were reaccepted or
rejected.

4.6.7.1 Hypothesis Testing

In this part, the researcher tests both hypotheses regarding the relationship between Customer
Value and its effects on Customer Loyalty. This hypothesis testing is based on standardized
coefficients Beta (β) and P-value to test whether the hypotheses were reaccepted or rejected.
4.6.7.1 Brand Image on Customer Loyalty
The results of Multiple Regression, as presented on regression table, revealed that Brand Image
has a positive and significant influential relationship (contribution) to Customer Loyalty with β=
0.098, at 95% confidence level (p < 0.05). The Beta value (β) i.e. 0.098 shows that if there is one
unit increase in involvement, there will be 9.8% increase on Customer Loyalty. Therefore, the
researcher rejected the (Ho) hypothesis and accepted the (H1) hypothesis. This indicates that
involvement has a positive and statistically significant influential relationship (contribution) to
Customer Loyalty.

4.6.7.2 Switching cost on Customer Loyalty

The results of Multiple Regression, as presented on regression table, revealed that Switching cost
has a positive and significant influential relationship (contribution) to Customer Loyalty with β=
0.664, at 95% confidence level (p < 0.05). The Beta value (β) i.e. 0.664 shows that if there is one

55
unit increase in involvement, there will be 0.664% increase on Customer Loyalty. Therefore, the
researcher rejected the (Ho) hypothesis and accepted the (H1) hypothesis. This indicates that
involvement has a positive and statistically significant influential relationship (contribution) to
Customer Loyalty.
4.6.7.3 Value Added Service on Customer Loyalty
The results of Multiple Regression, as presented in table 4.17 above, revealed that Value Added
Service has a positive and statistically significant influential relationship (contribution) to
Customer Loyalty with β= .076, at 95% confidence level (p <0.01). The Beta value (β) i.e. .076
shows that if there is one unit increase in Value Added Service there will be 7.6% increase on
Customer Loyalty. Therefore, the researcher rejected the (Ho) hypothesis and accepted the (H1)
hypothesis. This indicates that involvement has a positive and statistically significant influential
relationship (contribution) to Customer Loyalty.
4.6.7.4 Customer satisfaction on Customer Loyalty
The results of Multiple Regression, as presented on regression table, revealed that Switching cost
has a positive and significant influential relationship (contribution) to Customer Loyalty with β=
0.123, at 95% confidence level (p < 0.05). The Beta value (β) i.e. 0.123shows that if there is one
unit increase in involvement, there will be 12.3% increase on Customer Loyalty. Therefore, the
researcher rejected the (Ho) hypothesis and accepted the (H1) hypothesis. This indicates that
involvement has a positive and statistically significant influential relationship (contribution) to
Customer Loyalty.

56
 CHAPTER-FIVE

5.0 Summary of Findings, Conclusion and Recommendation

This chapter %s the summary of findings, conclusions and recommendations from the collected
data and their respective interpretations. Accordingly, the objective of this study is to assess the
effect of Customer Value on Customer Loyalty in mini super market. The study has deployed
quantitative research approaches. Different kinds of statistical methods, including descriptive and
inferential analysis, have been applied to analyse the data. The statistical tools like mean and
standard deviation have been employed to describe the variables. In addition to test all
hypotheses, the Pearson correlation and multiple regression analysis have been applied.

In this study, both primaries have been used as source of information for the analysis and
interpretation of data. English version questionnaires were prepared based on the research
objective. (290) respondents were taken using simple random technique. The data has been
tested with Cronbach alpha and it is found that the data under study are found to be internally
consistent.

5.1. Summary of Findings

The respondents' responses over the study are found to be 90.6% of a total sample taken from
the population of study. All the variables such as Customer Value and Customer Loyalty have
passed the test of internal consistency through Cronbach Alpha (0.910) indicating that the data
under study are internally consistent. Majority of the respondents are observed as male under the
age group 21-35 years, educational level second degree and martial of respondents. The level of
agreement of most respondents is above the average level having the best statement people
strategy and least statement physical strategies. The standard deviation for each variable is
homogenous and not varied widely, indicating that the respondents' level of agreement is near to
the average mean.

The variables of Customer Value are highly significant with Customer Loyalty indicating that
there are correlations among the variables. Further, the study has observed that the Customer
satisfaction has the highest correlation and Brand Image has the lowest correlation with
Customer Loyalty.

57
The study has undergone various assumption tests such as test of normality, linearity,
heteroscadacity, test of independence, sample adequacy and multicollinearity and observed that
all the variables have been passed all the assumption tests and eligible for applying multiple
regression analysis.

The result of multiple regression analysis reveals that the Customer Loyalty is explained by the
variables of Customer Value by 90.6 %. The ANOVA results shows that over all good fit of
model the Customer Value significantly predict the Customer Loyalty.

The coefficient table of regression indicates that Customer satisfaction, Value Added Service,
Switching cost & Brand Image are highly significant with Customer Loyalty.

5.2. Conclusion
The research starts with identifying the problem area of the captioned title, framing objectives
and hypothesizing the relationship among the variables of the study. The date has collected and
result of consistency and reliability observed from the suggested value of Cronbach alpha. The
result of the study reveals demographic analysis of the respondents, correlation among the
variables. Various assumptions diagnostic tests have been conducted where all the variables have
passed the tests and become eligible for conducting multiple regression analysis. The result of
regression explains the level of significance of Customer satisfaction, Value Added Service,
Switching cost & Brand Image as the most significant path in the analysis with respect to
Customer Loyalty of mini super market. Finally, the conclusion confirms that the Customer
Value have enormous effect on Customer Loyalty.

5.3. Recommendations
The study provides a number of recommendations. Firstly the findings of the study indicate that
Customer Value affect Customer loyalty in several ways. This provides a strong indication that
Mini Supermarkets that incorporate Customer Value in the right proportion in their operations
have a high chance of ensuring Customer loyalty thus experiences repeat purchases from them.
The management of mini supermarkets should ensure fair pricing; appropriate communication as
well as effective processes. This would ensure delivery of quick and accurate services to
customers. The location of the outlets should also be strategic to provide convenience to the
customers in an era of intensified competition. Given that the study revealed that mini

58
supermarket customers are value prices of products, business organizations should source their
products competitively, lower their operational expenses and charge favorable prices if they want
to succeed.

A successful loyalty program must meet the needs of existing loyal customers while influencing
secondary shoppers to become primary loyal shoppers. Likewise, the risk of loyalty programs in
an environment of low prices, poor service, and questionable quality will likely only attract less
profitable, secondary customers.

Lastly, since this study was cross-sectional, a future research should consider a longitudinal
study to examine the long run effects of the variables on performance.

5.4. Research Implications:

Further, researches should be directed towards the exploration of the influence of other factors
not considered in this study like Customer satisfaction is in a way measured when there is a
comparison of the actual performance of a product with the expected performance. Trust &
Service quality the expected performance is not considered as satisfaction. Customer satisfaction
fosters the customer retention, and all other variables are linked to satisfaction and work towards
customer satisfaction. When all other variables are in good shape, the customer satisfaction is
upheld and customer Super marketing for the effective and efficient buying of the industry in this
competitive Advantage.

5.5. Limitations of the Study:

Every effort will be made to make this research study reliable, objective and dependable. Despite
these efforts, however, the study may suffer from some limitations which are given below:

 This study was limited geographically to West Guji Zone mini super marketing and West
Guji zone has been situated in south part of Oromia.

 The study was limited to only to the level of customer value on customer loyalty of major
customers of the Shop in Bule Hora Town. However, the findings of this study would
have had paramount importance if more customers had been included in the research, for
customers who live in different Zone may have different expectations and perceptions
towards customer loyalty.

59
  Resource constraint.

 Unwillingness of respondents.
 Time and budget constraint

5.6. Suggestions for Future Research

Future research should focus on all Supermarkets irrespective of size as both mini supermarkets
and Major supermarkets alike compete for the same customers. A study on these Major players
in the industry will also provide a broader perspective on other Customer Value within the retail
industry as well as the influence these have on loyalty.

Future study can focus on a different industry like education and health sectors to see if they
yield similar results. Future study may also explore alternative research design and analysis
methods to see if they will yield similar results. The replication of this study in to other sectors
within the retail industry, such as, banks and other firms in the services sector. Moreover,
replicating the study to other countries, especially within the Ethiopia continent would
demonstrate the universality and significance of the relationship of the study herein.

Lastly, since this study was cross-sectional, a future research should consider a longitudinal
study to examine the long run effects of the variables on performance.

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APPENDIX: QUESTIONNAIRE

65
 BULE HORA UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS DEPARTMENT OF MANAGEMENT

MASTER OF BUSINESS ADMINISTRATION-PROGRAM

QUESTIONNAIRE TO BE FILLED BY CUSTOMER OF MINI SUPERMARKET

Dear respondent, I, ISMAEL HUSSEN, a students of MBA at BHU campus am going to

conduct the research entitled a study on “THE EFFECT OF CUSTOMER VALUE ON
CUSTOMER LOYALTY IN CASE OF MINI SUPERMARKET IN BULE HORA TOWN”,
for partial fulfilment of MBA Degree in management and business administration. You are one
of the respondents selected to participate on the study. So, you are kindly requested to give
relevant information, which is the valuable input for the success of my study. I assure you that
this is purely for the academic purpose and the whole process will be kept confidential.
Therefore, you are kindly requested to tick the questionnaire honestly and frankly. Thank you in
advance for your kind cooperation‼
Personal information
1 Gender: Male Female
2 Age: Up to 10-20 years old 21-35 years old
36-50 years old
Above 50 years old
Marital Status: - Single Married Divorce
4. Education: . Secondary . Diploma Bachelor Others

Please rank your views using 1-5 by encircle on whether you are satisfied or not with the
service provided by the Mini Supermarket and the general environment under which it
operates.
SA - Strongly Agree : 5 ; A - Agree : 4 ; N – Neutral : 3 ; D - Disagree : 2 ; SD -
Strongly Disagree: 1

Brand Image:
S.No Content SD D N A SA

66
 BI1The mini super market is providing branded products to me. 1 2 3 4 5
BI2 I feel sometimes I do not get products as it is sold when I 1 2 3 4 5
arrive.
BI3I stick to one mini super market due to their service to me. 1 2 3 4 5
BI4 Buying product at Mini makes me feel delighted. 1 2 3 4 5

Value Added Service:

S.No Content SD D N A SA
VA1 I feel the products bought from mini super market is a value 1 2 3 4 5
for money.
VA2 The mini super market is selling the products with door 1 2 3 4 5
delivery service.
VA3 The mini super markets keeps latest arrival of branded 1 2 3 4 5
products.
VA4 I am happy with the value added service offered by the mini 1 2 3 4 5
super market.

Switching Cost:
S.No Content SD D N A SA
SC1 I visit other mini super market only of I do not get my products 1 2 3 4 5
in my favourite shop.
SC2 I stick to one mini super market always. 1 2 3 4 5
SC3 I switch to other mini super market only if it is closed.. 1 2 3 4 5
SC4 I don’t want to switch from one mini super market to other. 1 2 3 4 5

Customer Satisfaction:
S.No Content SD D N A SA
1 I am happy with the ambience of mini super market. 1 2 3 4 5

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 2 I satisfied with the pricing of products at mini super market. 1 2 3 4 5
3 I like that the offering of some products by mini super market is at 1 2 3 4 5
discount.
4 Mini Supermarket is my ideal shop. 1 2 3 4 5

Customer Loyalty:
S.No Content SD D N A SA
CL1 I consider myself loyal to the products of mini super market. 1 2 3 4 5
CL2 When buying products, my first choice is mini super market. 1 2 3 4 5
CL3 I will keep on buying from mini super market as long as it provides 1 2 3 4 5
me satisfaction.
CL4 I am still willing to go to my favourite mini super super market even 1 2 3 4 5
if its prices of products are little higher than that of its competitors.
CL5 I encourage friends and relatives to visit to the Mini super market. 1 2 3 4 5
CL6 I have a sense of loyalty to Mini Supermarket. 1 2 3 4 5
CL7 I will continue buying products in the future from the mini super 1 2 3 4 5
market.
CL8 I say positive things about Mini to other people so that they will buy. 1 2 3 4 5
CL9 I would love to recommend mini super market to my friends to buy 1 2 3 4 5
the products.
-----Thanks you----

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