1

“Factors Affecting Affiliate Marketing on Customer Loyalty in the Philippines”

A Thesis
Presented to the Faculty of the
College of Business, Management, and Accountancy
DE LA SALLE ARANETA UNIVERSITY
Victoneta Ave., Malabon City, Metro Manila

In partial fulfillment of the requirements for the degree of

BACHELOR OF SCIENCE IN BUSINESS ADMINISTRATION
Major in Marketing Management

By

BERGONIA, PRINCE LESTHER M.

DEL PRADO, FRANCESCA DENISE S.
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Recommendation Sheet

Researchers: Bergonia, Prince Lesther M.

Del Prado, Francesca Denise S

College: College of Business Management and Accountancy

Title: Factors Affecting Affiliate Marketing on Customer Loyalty

in the Philippines

Recommending Approval:

_________________________ __________
Mr. Jerico John Dalangin Date
Adviser

_________________________ __________
Solomon Ayodele Oluyinka Ph. D Date
Thesis Professor

Approved by:

_________________________ __________
Dr. Adolf Yosef Jao Date
Program Chair

_________________________ __________
[Name of Panel Member] Date
Member

_________________________ __________
[Name of Panel Member] Date
Member

Recorded by:

_________________________ __________
PIC, Registrar’s Office Date
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Approval Sheet

This thesis entitled Factors Affecting Affiliate Marketing on Customer Loyalty in

the Philippines by Bergonia, Prince Lesther M and Del Prado, Francesca Denise S, in
partial fulfillment of the requirements for the degree of Bachelor of Science in Business
Administration – Major in Marketing Management, has been examined and is
recommended for acceptance and approval for ORAL EXAMINATION.

________________________ ________________________
Solomon Ayodele Oluyinka Ph. D Mr. Jerico John Dalangin
Thesis Professor Adviser

Panel of Examiners

Approved by the COMMITTEE ON ORAL EXAMINATION with a grade of

________on _____________________.

________________________
Dr. Adolf Josef Yao
Program Chair

________________________ ________________________
[Name of Panel Member] [Name of Panel Member]
Member Member

________________________
[Name of Panel Member]
Member

Accepted and approved as partial fulfillment of the requirements for the degree of
BACHELOR OF SCIENCE IN BUSINESS ADMINISTRATION – MAJOR IN
MARKETING MANAGEMENT

____________________ _______________________
Dr. Marie Allison Parpan Dr. Rejoice Ferrer
VCAR Dean, CBMA
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Acknowledgement

This research study is challenging to complete without having the help of others.

First and foremost, the researchers are grateful to God Almighty for providing them with

the courage and hope to continue.

Second, the researchers would like to acknowledge and express their heartfelt

appreciation to Mr. Jerico Dalangin, who served as their research adviser, and to Solomon

Oluyinka, who instructed their thesis, for their vital advice and assistance during this study.

Also, thank you to all of the authors who contributed to their research by providing related

literature materials.

To the researchers' family, who motivated them to continue during the entire study,

cheered them on, and extended support. To Dana and Wesley, who provided consistent

help and encouragement to the researchers.

Last but not least, the researchers sincerely thank and acknowledge the panelists

from De La Salle Araneta University for their time, assistance, and insightful comments

and ideas that greatly aided the research work.

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Abstract

TITLE : Factors Affecting Affiliate Marketing on Customer

Loyalty in the Philippines

RESEARCHER : BERGONIA, PRINCE LESTHER M.

DEL PRADO, FRANCESCA DENISE S

ADVISER : MR. JERICO JOHN DALANGIN

SCHOOL : De La Salle Araneta University

DEGREE CONFERRED : Bachelor of Science in Business Administration Major in

Marketing Management

Customer loyalty is critical to the economic viability and long-term sustainability

of the business industry. In addition, affiliate marketing is a strategy whereby an affiliate

promotes the goods or services of another company or person in return for a commission.

This arrangement enables businesses to outsource a portion of their sales processes.

To better understand how affiliate marketing affects customer loyalty —this study

will evaluate price comparison, promotion and coupons, social media, and perceived value.

This study will send the questionnaire to individuals who have purchased products

advertised by an affiliate and those who have not. Results have been analyzed using

WarpPLS version 7.0, an advanced PLS-SEM software tool. The study exerts a positive

influence of the mentioned factors towards customer loyalty thru affiliate marketing.
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Table of Contents

Page

TITLE PAGE .................................................................................................................1

RECOMMENDATION SHEET ....................................................................................2

APPROVAL SHEET .....................................................................................................3

ACKNOWLEDGEMENT .............................................................................................4

ABSTRACT ...................................................................................................................5

TABLE OF CONTENTS...............................................................................................6

LIST OF TABLES.........................................................................................................9

LIST OF FIGURES .....................................................................................................10

LIST OF APPENDICES..............................................................................................11

CHAPTER

1 The Problem and a Review of Related Literature

Introduction......................................................................................................12

Review of Related Literature ..........................................................................14

Conceptual Framework....................................................................................25

Hypothetical Statement....................................................................................25

Hypothetical Framework ................................................................................30

Theoretical Framework....................................................................................31

Statement of the Problem................................................................................33

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Assumptions of the Study ...............................................................................34

Research Objectives.........................................................................................34

Scope of the Study ..........................................................................................35

Significance of the Study.................................................................................35

Definition of Terms..........................................................................................36

2 Methods

Research Locale ..............................................................................................39

Research Design..............................................................................................39

Respondents of the Study.................................................................................40

Research Instrument.........................................................................................40

Sampling Technique ........................................................................................44

Data Gathering Procedure................................................................................45

Data Analysis...................................................................................................45

Statistical Treatment of Data ...........................................................................45

Statistical Tools................................................................................................46

3 Results and Discussion

Presentation of Results .................................................................................... [#]

Interpretation of Data ...................................................................................... [#]

[Additional entries] ......................................................................................... [#]

4 Summary, Conclusion and Recommendation

Summary ......................................................................................................... [#]

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Conclusion ...................................................................................................... [#]

Recommendation ............................................................................................ [#]

REFERENCES ............................................................................................................47

APPENDICES .............................................................................................................56

CURRICULUM VITAE ............................................................................................. [#]

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List of Tables

Table Page

1 Indicated questions and item code for every variable ......................................43

2 [Table Caption 2] ............................................................................................ [#]

3 [Additional entries] ......................................................................................... [#]

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List of Figures

Figure Page

1 Conceptual Framework ....................................................................................25

2 Hypothetical Framework .................................................................................30

3 Theoretical Framework ....................................................................................31

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List of Appendices

Appendix Page

A IP Registry Form ..............................................................................................56

B Ethics Form ......................................................................................................57

C Turnitin Result .................................................................................................58

D Survey Questionnaire .......................................................................................59

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Chapter 1

The Research Problem and its Background

Introduction

With the help of technological improvements and the Internet, every business may

now enter the field of e-commerce. The implementation of a multichannel approach is

difficult at times. One of the internet marketing strategies for e-commerce that is growing

the fastest is affiliate marketing. An organization's capacity to use affiliate marketing to

carry out online operations with efficiency has a significant impact (Patrick and Hee, 2019).

Affiliate marketing allows businesses to pay independent publishers to direct customers to

their products and services. In exchange for commission payments, third-party publishers

are incentivized to come up with strategies for promoting the business as affiliates. Internet

usage has led to an increase in affiliate marketing prominence (Narayan & Singh, 2022).

The corporate world has seen numerous changes since the epidemic; some of these

changes have led to advances, while others haven't. Online businesses have been greatly

affected by the rapid advancement of technology, especially in customer marketing.

Customers' purchasing decisions are heavily impacted by those who convinced them to buy

the product. A business's long-term survival and performance depend heavily on its ability

to keep customers. It is now a well-known outcome of the modern affiliate marketing that

most businesses use these days. Thus, affiliate marketing promotes customer loyalty in a

variety of ways by reinforcing consumers' or customers' purchasing decisions. In the

marketing system, customer loyalty is thought to have the most impact on how businesses
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do business. Financial performance, recommend intention, repurchases, as well as

retention, are all bound to customer satisfaction and perceived value (Alharbi & Alhider,

2018).

Stated in a foreign study by (Narayan & Singh, 2022), Affiliate marketing is a form

of internet marketing in which one organization (an advertiser or merchant) agrees with

another organization (a publisher or affiliate) to display a connection between its website

and an affiliated site. According to (Suryanarayana, Sarne & Kraus, 2021), Affiliate

marketing's recent explosive growth points to a new e-commerce paradigm involving

affiliates, merchants, and the platforms that connect them. Specifically, the possibility that

potential customers may learn about the campaign from multiple affiliates they are

connected to necessitates the development of new systems for paying affiliates for their

marketing work.

In this context, affiliate marketing has developed, offering entrepreneurs significant

chances to get involved, increase marketing, boost revenue, and get compensated for their

work (Patrick and Hee, 2019). It is in this environment, that affiliate marketing has entered

with considerable opportunities for entrepreneurs to participate, enhance marketing,

improve profits, and earn some returns for their efforts (Khan, 2022).

During the post-pandemic period, customer loyalty has had a significant impact.

Given the sharp rise in the usage of affiliate programs, the goal of this study is to identify

the variables and ascertain how they affect consumer loyalty. To determine the cause of a
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decline in consumer loyalty, researchers must identify the variables that could impact

customer loyalty and repurchasing behavior.

Review of Related Literature

Affiliate Marketing

Affiliate marketing programs allow businesses to expand their reach and attract

clients from other businesses by agreeing to refer their customers to other organizations. A

significant competitive advantage for merchants is the ability to generate sales and reap the

benefits of connections. Numerous retailers have their own affiliate marketing schemes,

including Amazon and Ebay (Solichin, Hamsal, Furinto, & Kartono, 2022).

According to (Ghosal, Prasad, & Behera, 2020), one of the most important

marketing strategies to influence future generations and influence their decisions to make

online purchases is affiliate marketing, a performance-based form of online advertising.

Affiliate marketing has proven to be a critical strategic factor for e-commerce enterprises

seeking a competitive advantage. More importantly, the millennial generation—the digital

generation—is driving the adoption of affiliate marketing. Using technology as the primary

engine to propel the entire marketing system into the realm of success and achievement is

one of the key components of affiliate marketing. As social networking networks

proliferated online, affiliate marketing gained increasing traction (Haikal, Ehab & Kamal

2020). Finding customers will contribute to theoretical and empirical knowledge of intents
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to use and actual use of cash-back programs in affiliate marketing, taking into

consideration businesses (Christino and Juliana, 2019).

A foreign study by (Solichin, Hamsal, Furinto, & Kartono, 2022), Affiliate

marketing programs enable businesses to expand their reach and attract clients from other

businesses by agreeing to refer their customers to other companies. Retailers can get a

significant competitive edge by generating sales and reaping the benefits of affiliations.

Affiliate Website Promotion

In recent years, affiliate marketing—a performance-based kind of online

marketing—has grown at a quick rate and gained significant traction. Advertisers,

publishers, and customers are the three parties that affiliate marketing integrates with.

Online sales of any company goods, including apparel, gadgets, books, and airline tickets,

will be handled by advertisers. Underwriters for insurance companies may also sell policies

through them. The term "publisher" refers to the person who uses a website or blog to

advertise items or services (Haraharvi & Nasabi, 2020).

According to (Faridzie 2021), The quality of a site's content is an important factor

in online sales, and it has its own value to customers. It was argued that the rise of social

media websites on the internet contributed to the increased popularity of affiliate

marketing. An affiliate, also known as a publisher, is an individual or business that uses

links and advertisements on its website to advertise the goods and services offered by

merchant websites. This is accomplished by an affiliate signing up for an advertiser's

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affiliate program, supplying links, banners, or advertisements, and embedding them into

the website (Hashem, 2020).

Customer Expectation

The goal of any business strategy is the fulfillment of its customer expectations,

and it has been found that there are crucial aspects with a direct connection to customer

expectations, allowing practitioners to look into these dimensions to gain a competitive

edge (Antony, Khanapuri, & Jain, 2018). The management of consumer expectations is a

priority for businesses as it serves as a crucial gauge of customer satisfaction and

perception (Priporas, Stylos & Fotiadis, 2017).

Customer satisfaction is positively impacted by customer expectations or

expectations (Mukarromah, Hardyanto, & Pramono, 2021Customer expectations are the

things that customers, in particular when they are purchasing, want or anticipate to be

"there" in a store. The word "there" in this context refers not only to anything physical but

also to a far wider range of elements, including the environment, the level of service, and

perhaps even the method of payment used during a sale or purchase. Consumer

expectations are flexible and subject to shift in response to advancements in technology,

socio culture, and economy. The expectations of customers now can differ from those of

the past or the future. (Pandiangan, Octiva, Yusuf, Suryani, & Sesario,2022).
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Loyalty

Customer loyalty is one of the most crucial things that a company wants, especially

if it wants to grow its brand. Winning a customer's loyalty in the enormous array of brands

available for any product on the market is difficult. Analyzing the variables and their effects

on customer loyalty was the goal of the study. The criteria of brand awareness, brand

image, and customer happiness were the main emphasis of the study (De Jesus & Fajardo-

Ibarra, 2023).

When it comes to a particular service, customers' opinions and sentiments about its

quality have an impact on their decisions to buy from the same source. This is known as

loyalty. Therefore, maintaining the loyalty of current customers takes precedence over

forging new ones (Suson et al, 2023).

Loyalty is the number of repurchases made by customers during a period (Mercade-

Mele, Molinillo, Fernandez-Morales, and Porcu, 2018) and is one of the critical factors

affecting the company’s success in competition (Fatmawati and Fauzan, 2021). One of the

most important success criteria for most merchants in the modern era of technology

is customer loyalty, which can only be attained through a designed retail experience

(Voelz, Hafnfer, and Strauss, 2022). Customer loyalty can be attitudinal, including

cognitive, affective, and cognitive (behavioral intent) dimensions, while, on the other hand,

it can be behavioral, reflecting the actual repeat purchase behavior (Moisescu, Gică,

Müller, & Müller, 2019).

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According to ((Padillo, Go, Manreal, Samson, Galli, Yamagishi & Ocampo 2022),

customers who are loyal to a single business offer stability, security, and prosperity to

everybody concerned. A customer's preference for a brand or group of brands over time is

what is referred to as the behavioral consequence of loyalty. In this way, customer loyalty

happens naturally, and planning for marketing and operations benefits greatly from a full

grasp of it. For most service firms, gaining customer happiness and loyalty is the main

objective. Increased customer satisfaction and loyalty (retention) results in higher

profitability, favorable word-of-mouth, a more stable client base, and fewer marketing

costs.

Perceived Value

Value is created globally and is deemed significant by consumers due to all of its

benefits. One major advantage is the caliber of services and goods created by customers.

The consumer's overall assessment of a product's usefulness based on perceptions of what

is received and what is supplied is known as perceived value, which is a far more expansive

term (García-Fernández, Gálvez-Ruíz, Fernández-Gavira, Vélez-Colón, Pitts, & Bernal-

García, 2018). According to (Hapsari, Clemes & Dean, 2017), Price, benefits, and

sacrifices are the three measuring variables that buyers can use to determine value when

buying purchases. Based on the information provided and the experiences they have,

consumers can evaluate the perceived value of the study they do. According to (Suson,

Rivero, Arnejo, Atibing, Aro & Burdeos 2023), customers' views on the quality of a
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product (and service) about its pricing can have a beneficial impact on their level of

satisfaction. It is given a lot of attention in the literature on service marketing. To draw in

fresh customers, cultivate and maintain positive relationships with them, and win their

loyalty, it is imperative to build strategies for producing customer value.

According to (Yaacob and Baroto 2019), Perceived value is important in the buying

choice of the customer since it indicates whether a customer will buy or adopt a product or

service. Perceived value, according to the statement, is a personal assessment of a good or

service's advantages based on the opinions it garners.

According to (Padillo, Go, et al, 2022) Perceived value customer satisfaction and

loyalty, however perceived price unfairness is likely to be linked to consumers' discontent,

complaints, and diminished brand loyalty.

Price Comparison

Such advertising is probably going to continue to highlight how much people think

they enjoy looking around for deals. More significantly, rather than being informative,

advertising is primarily persuading. When customers are on the tariffs they would

voluntarily select and there are minimal transaction costs involved in doing so, such as

those associated with advertising, price comparison, and regulation, energy retail markets

function effectively (Antal, 2020).

According to (Rokhman & Andiani, 2020), reasonable customers will compare the

costs of identical things offered by different retailers. Price comparison is a logical

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consumer behavior. One of the most crucial considerations for customers when making

decisions in both traditional and online marketplaces is price. Prices are frequently used to

gauge how young customers view the benefits and value of a product in comparison to its

online and offline competitors. Moreover, due to their low resources, they typically base

their purchases mostly on price. For a business, price becomes crucial since it dictates how

much profit it will make from the sale of its goods and services. If the price is set too low,

the organization will not receive as many benefits, while setting the price too high would

result in a reduction in sales.

According to studies, pricing is a significant component that shoppers evaluate

when making a purchasing decision (Vastani and Monroe, 2019). A few factors, including

accessible prices, price compatibility with the product's quality or value, and the quantity

of discounts offered, influence consumers' decisions to buy products online (Rokhman &

Andiani, 2020).

Privacy and Security

Depending on the context of shared content, privacy can imply different things in

different settings and vary in severity (Ali, Islam, Rauf, Din, Guizani, & Rodrigues, 2018).

Almost all studies agree that one fundamental component of a high-quality website is

privacy. Privacy refers to the extent to which a website possesses sufficient security

measures to safeguard user and organizational data and enable a secure transaction (Al-

Gasawneh, Alzubi, Hasan, Joudeh, Ahmad, & Ngah,2022).

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In the relationship between privacy and marketing performance, (Maintz &

Zaumseil 2019) and (Al-Habil, Al-Hila, Al Shobaki, Abu Amuna, & Abu Naser, 2017), it

was discovered that the amount of availability of (privacy, credibility, efficiency of service

providers, tact, empathy, reliability, communication, accessibility, material, and human

factors, and reaction level) improved marketing performance.

Promotion and Coupons

According to (Jaymee, Marie & Kaye, 2019), Price discounts provide consumers

with products at cheaper prices than the typical price of the product. In order to effectively

persuade the target market while generating attention, sales, and awareness, promotional

tactics including coupons, price breaks, point-of-sale displays, premium, and free samples

are used. Coupons are vouchers that allow the holder to save a specified amount on the

purchase of a particular good. It can be sent, placed within adverts in periodicals and

newspapers, or contained or fastened to other goods. Typically, consumer products

companies or retailers print these, distribute them straight to customers, or use middlemen

like wholesalers or retailers. Coupons only allow customers to enjoy the specified benefits

and can only be used by the bearer. It encourages brand loyalty and repeat purchases.

With the advent of the digital age and the development of the Internet in the 1990s,

traditional printed coupons found a new purpose. 83% of Americans were regular coupon

users by 1997, using $4.8 billion in coupons to save around $2.9 billion. Since then, online
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coupons have ridden the digital marketing wave, with usage rising by 236% in the USA in

2008 and 2009 (Ahmed & Sarwar, 2018).

In actuality, merchants want a consistent flow of clients in addition to a respectable

profit margin, which may seem incompatible with their objective of optimizing the cash

value of each transaction. Coupons are being used by retailers to build brand value and

optimize long-term earnings. Examples of these strategies include sign-up discounts and

buy-one-get-one-free offers, which all promote first purchases as well as customer loyalty

and evangelism (Ahmed & Sarwar, 2018).

Social Media Influences

Using web page construction, social media advertising, and online marketing,

social media commerce has completely changed the way lodging is promoted. Essentially,

marketing influenced consumers' decisions to buy, and the development of the internet

spurred the creation of a variety of marketing strategies (Iban, Inolino, Lumansoc, Martin,

Ocan, Satentes, & Taguinod, 2024).

According to a foreign study by (Pang & Wang, 2020), A few aspects of attitudes

and actions on social media may have a significant impact on psychological adjustment.

One of the most popular uses of the internet is to access social media, which allows users

to engage in direct or indirect communication with one another. Social media serves as a

platform for social interaction and is also evolving into a tool for product marketing and

consumer decision-making.
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Nowadays, customers utilize social media to get information before making

purchases. The existence of promotions on social media piques the attention of viewers.

(Siregar, Weny & Yuliawan, 2020). Social media usage has grown exponentially in recent

years and it has become an integral part of the consumer lifestyle (Muhammad, Dey, &

Weerakkody 2017). The Internet connects people from most parts of the world and enables

them to engage and interact with one another (Kapoor, Tamilmani, Rana, Patil, Dwivedi &

Nerur, 2017).

According to (Dalangin, 2021), influencers on social media have an impact on the

opinions and buying intentions of customers. Customer attitudes and thoughts are

influenced by it. The previously mentioned study papers employ various techniques and

methods to ascertain the influence or efficacy of influencers on customers' propensity to

make purchases.

Trust

In addition to reaping the rewards of e-commerce websites, businesses must also

overcome some obstacles, such as preserving client confidence in the face of cultural

diversity and a range of expectations, requirements, and opinions (Irantaj & Huseynov,

2018). Since face-to-face contact between buyers and sellers is not possible in an online

business setting, trust is a crucial component. Trust motivates customers to make online

purchases and has a big impact on their perceptions of making in-store purchases (Noori,

2019)
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Customer trust, according to (Jalilvand, Vosta, Mahyari, & Pool, 2017), is also a

consequence of an excellent corporate reputation. Reputable companies may achieve

customer trust in three paths. First, buyers see organizations with a good reputation by

various interconnected features- reliability, credibility, responsibility, and trustworthiness,

as well as perceived quality, which could promote customers' expectations of corporate

capabilities in providing products or services (Jalilvand et al., 2017). Second, Due to a

favorable corporate reputation built on exceptional performance over a predetermined

length of time, reputation is important in mitigating the uncertainties stakeholders have

when assessing companies (Jalilvand et al., 2017). Third, corporate reputation often

requires considerable time and investment (Jalilvand et al., 2017).

Word of Mouth

WOM marketing is the exchange of information about products and services

between individuals who don't seem to be connected to a firm that manufactures them.

When making a purchase, people trust word-of-mouth (WOM) communication more than

they do periodicals, radio, and television (Ahmadinejad, 2019). (Katz, Lazarsfeld, & Roper

2017) discovered that to influence the changing of brand names, word-of-mouth (WOM)

communication was twice as effective as radio commercials, four times more effective than

personal sales, and seven times more effective than newspaper and magazine advertising.

According to (Hossain, Kabir, & Rezvi, 2017), Word-of-mouth marketing is given

more weight by marketers than standard marketing communication tools since it is seen as
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one of the most important and persuasive sources of information for consumers. Word of

mouth influences customer purchasing decisions in a favorable way.

Communications through word-of-mouth (WOM) are a ubiquitous and fascinating

phenomenon. Academics and practitioners generally agree that word-of-mouth (WOM)

plays a substantial impact in product sales (Li, Yang, Yang, Xiong, Wu, & Tang, 2018).

Figure 1. Conceptual Framework

The conceptual framework demonstrates how the model was used in this study.

Due to the paucity of materials and publications accessible, researchers deliberately

proposed in this study to remove seven factors from the framework on the supportive

article.

Hypothetical statement

Price Comparison involvement toward perceived value

As stated in the study by (Naami, Rahimi & Ghandvar, 2017), Companies who are

able to meet their customers' expectations at the lowest possible cost and with the
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appropriate infrastructure will have a significant competitive advantage when it comes to

their ideas. In the current competitive industry, retailing organizations must unquestionably

prioritize providing clients with the best value. Price and quality have an impact on

perceived value. This indicates that consumers use these two indices to determine the worth

of goods and services. An e-commerce company's pricing strategy constantly takes costs

into account. In addition to attracting new customers, prices raise your knowledge

performance index, which includes market share, profit margin, website traffic, conversion

rates, and website visits. When a buyer is unaware of a product or service's specs, the price

of the good or service is typically regarded as a good indicator of quality (Gupta, Gupta, &

Dhir, 2020). Therefore, a hypothesis is proposed that:

H1. Price Comparison positively influences perceived value

Social Media Influences involvement toward perceived value

Academic and industry circles have recently begun to pay more and more attention

to social media marketing. Social media platforms provide organizations with a plethora

of alternatives to attain their marketing goals at significantly reduced expenses.

Reexamining marketing partnerships is necessary in light of the sharp rise in the use of

social media channels and the significant financial outlays made in social media marketing

(Ajina, 2019). The way users interact with their social media profiles and content is

measured by social media engagement. According to Sumague and Briones (2022), social
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media has a significant impact on how individuals of all ages receive and disseminate

information globally. Thus, it is hypothesized that:

H2. Social Media Influences positively influence perceived value

Promotion and coupon involvement toward perceived value

Modern marketing strategies are thriving due to the fact that sales promotion tools

attract potential customers and influence them to make favorable buying decisions. A sales

promotion offer is accepted by the customer in order to take advantage of the many

advantages it provides. The advantages of using sales promotion strategies influence how

consumers evaluate products based on their internal and emotional responses (i.e., value

expression, amusement, good mood, etc.) (Yang, Tang, Men & Zheng, 2020). One

significant predictor of the tendency to repurchase products has been found to be perceived

value. A moderating factor in the relationship is perceived value. As a result, the hypothesis

is that:

H3. Promotion and Coupons positively affect perceived value

Perceived Value involvement toward loyalty

Many studies have been conducted on the relationship between consumer loyalty

and its predictive variables. Fairness theory-based consumer perception of value is based

on the percentage of an individual's output or contribution that goes toward a company's

products. The majority of clients aim to optimize their worth in terms of search expenses,

restricted expertise, ease of mobility, and income. Additionally, it is a key factor

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influencing client happiness (Kim, Kim, and Shin, 2019). Customer loyalty, according to

Basir, Farradia, and Harun (2022), is defined as an ongoing emotional connection between

you and your client, demonstrated by the client's propensity to interact with you and make

repeated purchases in contrast to your competitors. Consequently, an additional hypothesis

is put forth:

H4. Perceived Value positively affects loyalty

Price comparison involvement toward promotion and coupons

To give the impression that the customer is obtaining a bargain, retailers frequently

display a posted or sale price alongside a higher advertised reference price (Jindal, 2022).

This comparison has been the subject of much research in economics and marketing, with

studies demonstrating how price comparisons of this kind impact purchase likelihood by

offering extra transaction utility (Huang, 2018).

Customers utilize promo codes for a variety of reasons, with bigger financial

discounts being the most common application (Neslin & Jiao, 2021). They are among the

most popular shopping aids. Thus, it is hypothesized that:

H5. Price comparison positively influence promotion and coupons

Price comparison involvement toward social media

E-marketing, often known as digital marketing, is the term used to describe efforts

undertaken to market goods or services through online media (Bail, Teller & Floh 2018).
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Through the use of a computer or smartphone that is connected to the internet,

businesspeople are able to market their goods around the clock (Duani & Barasch, 2018).

As per (Alaimo, Kallinikos, and Valderrrama, 2020), the increasing commercial

growth of social media platforms is altering their essence and revolutionizing the

networking, data, and content sharing behaviors that have been conventionally linked with

social media. Therefore, a theory is proposed that:

H6. Price comparison positively influence social mediaH6. Price comparison

involvement toward social media

Promotion and coupon involvement toward social media

One individual can now speak with hundreds or even thousands of others thanks to

the rise of Internet-based social media (Ariep, 2021).

The previous 10 years have seen the development of social media as a medium.

Social media evolves in tandem with information technology advancements. Social media

has permeated all spheres of human endeavor and society. In a same vein, entrepreneurs

must use technology to reach markets, advertise their goods, and sustain positive client

connections. Entrepreneurs can use a variety of social media platforms, including blogs,

Facebook, Instagram, Line, YouTube, and Rahmayanti (Yasa, Giantari, Setini, Sarmawa,

& Dharmanegara, 2020). As a result, the hypothesis that follows is proposed:

H7. Promotion and coupon positively influence social media

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Figure 2. Hypothetical Framework

Based on the hypothesized relationships, the conceptual framework of this study

was developed (see Figure 1). The conceptual framework shows how factors such as price

comparison, promotion and coupons, and social media influence perceived value in a way

that also positively affects it. Figure 2 illustrates where the hypothetical statement came

from. It was hypothesized that price comparison and social media influence promotion and

coupons influence the perceived value (H1, H2, and H3). Furthermore, it was also

hypothesized that perceived value has a significant influence on loyalty (H4). The study

also hypothesizes the influence from price comparison to social media (H5) and promotion

and coupon (H6). Likewise with the influence of promotion code toward social media

(H7).
 31

Theoretical Framework

Figure 3. Theoretical Framework

Figure 3 illustrates the theoretical framework, all of which came from supportive

article and was divided by the two services under expectation. In this study, the researchers

deliberately excluded the two services as well as other characteristics such as WOM,

Quality and Web, Privacy and Security, Trust, and Satisfaction. The decision resulted in

granting space for an in-depth examination of the not widely known relationship between

variables influencing affiliate marketing and customer loyalty. The study will be relevant

in knowing the different factors that might have an impact on the affiliates’ performance

in marketing the products. Customer loyalty is the primary objective of strategic marketing

planning, as it leads to numerous advantages for businesses. Keeping existing customers is

far less expensive than looking for new ones, to start.

 32

In this study, the researchers made a delicate decision to utilize Social Exchange

Theory (Homans 1958) to correlate the framework. Sociologist George Homans (1950,

1958, 1961) proposed examining such an interaction as an exchange following certain basic

economic principles revolving around rewards and costs. It was proposed that “for a dyadic

relationship to be viable it must provide rewards and/or economies in costs which compare

favorably with those in other competing relationships or activities available to the two

individuals (Chernyak-Hai, & Rabenu, (2018). In affiliate marketing, this translates to a

mutual exchange of value between the business and the affiliate. Affiliate programs

emphasize providing affiliates with fair commissions, support, and resources in exchange

for their promotional efforts. Building a positive relationship helps in sustaining the

affiliate's motivation.

Applying Social Exchange Theory to affiliate marketing helps shed light on the

relationships between merchants (advertisers) and affiliates (publishers). In terms of

customer loyalty, social exchange theory indicates that customers become loyal to a firm

when they see a good balance of benefits over expenses in their contact with it. Affiliates

invest time and effort in promoting products or services. The costs involve creating content,

driving traffic, and maintaining a marketing strategy. The rewards come in the form of

commissions earned from successful conversions. Successful affiliate programs ensure that

the rewards justify the efforts expended by affiliates. Trust between affiliates and

merchants is essential. Merchants need to provide accurate tracking and timely payments,
 33

while affiliates need to deliver quality traffic and adhere to marketing guidelines.

Establishing trust enhances the longevity and effectiveness of the affiliate relationship.

Statement of the Problem

The study aims to determine the Factors Affecting Affiliate Marketing on Customer

Loyalty in the Philippines using the five variables stated above. In light of the assertion,

the researchers want to respond to the following questions:

1. The demographic profile of the respondents:

1.1 Age

1.2 Gender

1.3 Monthly Family Income

2. What would be the effect on the perceived value of the following value:

2.1 Price Comparison

2.2 Social Media Influences

2.3 Promotion and Coupons

2.4 Loyalty

3. Is there a significant influence between:

3.1 Price Comparison positively influences perceived value

 34

3.2 Social Media Influences positively influence perceived value

3.3 Promotions and Coupons positively affect perceived value

3.4 Perceived Value positively affects loyalty

3.5 Price Comparison positively influence promotion and coupons

3.6 Price Comparison positively influence social media

3.7 Promotion and Coupon positively influence social media

Assumptions of the Study

The researchers assume that this study is necessary with companies during this time

to sustain customer loyalty and to find out the impact of affiliate marketing on students for

specific brands using the stated variables to examine customers' loyalty and their

perception of buying decisions or behavior since affiliate marketing is effective marketing

and advertisement in line of business promotions nowadays.

Research Objectives

This study aims to investigate and test the impact of Factors Affecting Affiliate

Marketing on Customer Loyalty in the Philippines. To simplify this statement, specific

objectives are formulated:

1. Do affiliate Marketing factors affect Customer Loyalty?

2. What would be the effect of the variables on one another?

 35

3. What are the obstructions that this industry faces in terms of affiliate

marketing?

Scope of the Study

This study will look at customer loyalty in marketing through affiliates in the

Philippines based on the following characteristics namely: price comparison, social media

influences, promotion and coupons, perceived value and loyalty. The researchers employed

the survey instrument that was modified from the research article titled "Impact of Affiliate

Marketing on Customer Loyalty" by Mohamed Hani Abdelhady, Nehad Mohammed

Kamal, and Hamida Abd El Samie.

The study's participants are customers who have previously used affiliate marketing

as part of their purchasing behavior. It is limited to the country of the Philippines. To ensure

the success of this study, the researchers developed a questionnaire that was delivered

through chat rooms and emailed to participants, who then submitted their responses in a

Google form.

Significance of the Study

According to (Davies and Markusen 2021), affiliates serve as connections in an

international manufacturing chain and carry out a variety of tasks. With the information

and statistics from this study, affiliates can create a passive revenue stream by positioning

themselves correctly in the marketplace. Additionally, it might aid in persuading and

 36

gaining the trust of customers for the affiliates. Business owners applied to stay active and

successful after their first five years of operation (Luamba, 2019). This study offers

information on how to use affiliate marketing to increase competitiveness in their industry,

and it can also be utilized as a tool to help each company grow even more. Affiliate

marketing is one of the ways for businesses to get a high chance to have a high return on

investment.

Customers get highly organized outbound sales calls from chatbots or real

employees (Luo, Tong, Fang, & Qu, 2019). The study's aims to help customers to

understand the role of affiliate marketing in the purchasing habit. It can also serve as a

guide for the consumer to understand the study's topic when making a purchase decision.

Future researchers who intend to investigate affiliate marketing or any other linking-

related issue about this study might use this study as a guide. It might serve as the

foundation for their reference resources as well. The analysis of these articles leads to the

development of extensive new insights and opportunities for future research (Sutter,

Bruton, & Chen, 2019).

Definition of Terms

Advertisement. As stated by (Mortimer, Beard, & Laurie, 2019). There are

numerous definitions for the term "advertising." In its broadest sense, it is frequently used

to describe the whole marketing communications sector and all of its products.
 37

Affiliates. According to (Davies & Markusen, 2021), the affiliates buy and sell

inputs and outputs from other businesses. Additionally, carry out the company's primary

tasks and cater to the local and regional markets.

Affiliate Marketing. A form of online marketing in which a company (publisher

or affiliate) and another company (advertiser or merchant) agree to allow the advertiser's

website and associated websites to be linked to from the publisher's website (Abdelhady,

Kamal, & Abd El Samie, 2020).

Buying Decisions. The process by which a consumer makes decisions before,

during, and after making a purchase of products or services in the market in return for

money is known as the consumer buying decision process (Qazzafi, 2019).

Influence. Denotes one's ability to persuade others to behave, believe, or feel how

one wishes (Banfield, 2017).

Loyalty. According to Hamilton, Zhang, Danescu-Niculescu-Mizil, Jurafsky, and

Leskovec (2017), an impressive range of societies exhibit behaviors that demonstrate this

allegiance and referred to a strong feeling of support or allegiance

Perceived Value. In the service environment (e.g., retail, hotel, events, and cruise

ships), where intangible variables are especially significant, the concept of perceived value

from an experiential perspective has been widely used (Calza, Pagliuca, Risitano, &

Sorrentino, 2020).
 38

Price Comparison. In the context of online price-matching guarantees (PMG),

buyers use price comparison to assess discrepancies and conduct post-purchase price

comparison searches (Lin, Tseng, Yeh, Liao, & Wang, 2020).

Promotion and Coupons. The goal of promotion, according to (Balachandran &

Hamzah, 2017), is to influence the target market's decision to purchase a good or service.

One of the strategies for promoting sales is the redemption of coupons, as ride-sharing

firms offer these incentives through smartphone applications.

Social Media Influences. When someone's feelings, beliefs, or actions are

influenced by others on social media, whether consciously or unconsciously, this is known

as social media influence (Tang & Chan, 2020).

WOM. Word-of-Mouth. In the existence of positive user externalities, current

customers' incentives to participate in WoM can impact a company's contracting issue

(Kamada, 2020).
 39

Chapter 2

The Research Methodology

This chapter discusses the different methods utilized in data collection and analysis

that are related to the study. This chapter presents a discussion of the research design,

research tools, data collection, data presentation and analytical techniques, and data

sources. Quantitative research was carried out to collect the primary data for this research.

Research Locale

The survey will be carried out in the Philippines. The researchers selected the

country because the country has a mixed economic system that includes a variety of private

freedoms, combined with centralized economic planning and government regulation. and

because they know many people, aged 21 to 35 and older, who live in a location that is

convenient for them. The Philippines is also a brand-conscious market. The researchers

concentrated on acquiring data on people who purchase products promoted by affiliates on

any platform and those who don't. The Philippines presents a dynamic and diverse

consumer market for businesses.

Research Design

The main purpose of this quantitative research is to determine the factors affecting

affiliate marketing based on the variables of customer loyalty to present knowledge to the

business owner, affiliates, and customers. A predictive correlation method was used in the
 40

investigation. Predictive correlational designs aim to establish a relationship between each

of the constructs being studied to be able to predict a dependent variable by the independent

variables or variables that predict it. (Pulido, Ojeda, & Valverde, 2022). This study will

utilize a 5-Likert scale survey research approach to collect data. The sampling technique

will be a convenience sampling method. The number of responses obtained during the

survey will be 300 respondents to be arranged and interpreted into a detailed description

based on the main objective of the analysis.

Respondents of the Study

The primary subject of this study is the customers who are related to affiliate

marketing in the Republic of the Philippines ages 21 to 35 years old and above. The number

of sample participants that are needed will be at least 300 respondents. The respondents of

this quantitative study must have prior experience or encountered affiliate marketing. The

survey questionnaire was distributed by chat or email, and the respondents were routed to

a Google form where they provided their responses. Moreover, a survey methodology will

be used because it was deemed to be the most efficient way of collecting a large number

of respondents.

Research Instrument

The online survey questionnaire is made up of 3 sections as a whole: the first section

covers the title of the study, an introduction to inform the respondents about the survey
 41

inform the participants about the Data Privacy Consent and their participation is voluntary.

The second section consists of demographic information on the customer's name, age,

gender, and monthly family income. The third section measures the factors (price

comparison, social media influences, promotion and coupons, perceived value, and loyalty)

of affiliate marketing to determine customer loyalty.

For measuring the factors affecting affiliate marketing on customer loyalty on the

behavior of the respondents, the price comparison was utilized by a 5-point Likert Scale

(5-Strongly Agree, 1-Strongly Disagree). Under the price comparison, a 5-item question

was given, and these are those statements: (1) Price comparison through affiliate marketing

is objective., (2) I think affiliates provided me to compare what I pay to what I might get

from other competitive websites., (3) Affiliate marketers have reasonable prices other than

marketing platforms., (4) I always check the prices of the affiliates to be sure I get the best

price., (5) When I’m on a budget, I always consider the prices given by the affiliates online.

To measure the second part, which is the promotion and coupons, a 5-point Likert

Scale (5 - Strongly Agree, 1 - Strongly Disagree) was utilized. The respondents had to

figure out if they agreed or disagreed with the five (5) items given in the questionnaire. The

statements given were: (1) Promotions from affiliate marketers have caused me to buy

products and services I normally would not buy., (2) When I get a promotion from an

affiliate marketer, I feel that am I getting a good deal., (3) Promotion is a huge part of sales

for most affiliate marketers., (4) Promotion from affiliates is very important to me., (5)

There are a lot of promotions given by affiliates online.

 42

For the third part, which is the social media influences, a 5-point Likert Scale (5 -

Strongly Agree, 1 - Strongly Disagree) was utilized. The customer respondents had to

figure out if they agreed or disagreed with the five (5) items given in the questionnaire. The

statements given were: (1) I will most likely recommend a few affiliates through social

media. (2) I think the social media community that sponsored affiliates is useful for

gathering product and service information., (3) I would encourage friends and relatives to

relay affiliates when buying., (4) I prefer to share experiences about affiliate's

products/services online with other customers of the website., and (5) I feel satisfied with

all of my previous transactions with products promoted by affiliates.

For the fourth part, which is the perceived value, a 5-point Likert Scale (5 - Strongly

Agree, 1 - Strongly Disagree) was utilized. The customer respondents had to figure out if

they agreed or disagreed with the five (5) items given in the questionnaire. The statements

given were: (1) Despite consideration about pay and rewards, I still think purchasing

experience with affiliates is very valuable., (2) Affiliated products are reasonable in price.,

(3) Compared to alternative affiliate websites, affiliated products are promoted and priced

fairly for similar products/services., (4) Comparing what I pay to what I might get from

other competitive websites, I think affiliate products provide good value., and (5) Affiliates

always exceed my expectations in buying.

The last part, loyalty was utilized by a 5-point Likert Scale (5- Strongly Agree, 1-

Strongly Disagree). Under the loyalty, a 5-item question was given, and these are those

statements: (1) I will recommend affiliated products to other people., (2) I would encourage
 43

friends and relatives to purchase services that are promoted by affiliates., (3) I would say

positive things about affiliates to other people., (4) I prefer affiliate marketing above other

websites., and (5) When I need to make a purchase, product related to affiliate is my first

choice.

Table 1. Indicated questions and item code for every variable.

Item
Price Comparison (PC)
Code
Price comparison through affiliate marketing is objective PC1
I think affiliates provided me to compare what I pay to what I might
get from other competitive PC2
websites
Affiliate marketers have reasonable prices other than marketing
PC3
platforms
I always check the prices of the affiliates to be sure I get the best
PC4
price

Item
Social Media Influences (SMI)
Code
I will most likely recommend a few affiliates through social media SMI1
I think the social media community that sponsored affiliates is
useful for gathering product and service SMI2
information
I would encourage friends and relatives to relay affiliates when
SMI3
buying
I prefer to share experiences about affiliate's products/services
online with other customers of the SMI4
website
I feel satisfied with all of my previous transactions with products
SMI5
promoted by affiliates

Item
Promotion and Coupons (PAC)
Code
Promotions from affiliate marketers have caused me to buy products
and services I normally would not PAC1
buy
 44

When I get a promotion from an affiliate marketer, I feel that am I

PAC2
getting a good deal
Promotion is a huge part of sales for most affiliate marketers PAC3
Promotion from affiliates is very important to me PAC4
There are a lot of promotions given by affiliates online PAC5

Item
Perceived Value (PV)
Code
Despite consideration about pay and rewards, I still think
purchasing experience with affiliates is very PV1
valuable
Affiliated products are reasonable in price PV2
Compared to alternative affiliate websites, affiliated products are
promoted and priced fairly for similar PV3
products/services
Comparing what I pay to what I might get from other competitive
websites, I think affiliate products PV4
provide good value
Affiliates always exceed my expectations in buying PV5

Loyalty (L) Item Code

I will recommend affiliated products to other people L1
I would encourage friends and relatives to purchase services that
L2
are promoted by affiliates
I would say positive things about affiliates to other people L3
I prefer affiliate marketing above other websites L4
When I need to make a purchase, affiliated product is my first
L5
choice

Sampling Technique

Convenience response sampling was employed by the researchers. A non-

probability sampling method called convenience sampling uses the units that the researcher

can reach the most readily to choose which ones to include in the sample. Both qualitative

and quantitative studies can benefit from convenience sampling; nevertheless, purposive

sampling is usually employed in qualitative studies (Obilor, 2023). This could be due to
 45

things like proximity geographically, availability at a certain time frame, or willingness to

participate in the study. As a result, the researchers employed this sampling strategy since

it is a rapid, simple, economical, and successful way to collect participant data.

Data Gathering Procedure

The researchers used a systematic procedure to gather data. The researchers will

firstly address the study question, a survey approach is used to select individuals fit to

answer the survey questions. There will be a survey analysis of the data obtained from the

respondents. It will be organized so that the subject can be explained. To obtain additional

information, surveys are to be conducted in conjunction with the study. Afterwards, an

informed conclusion and recommendation will be made following a thorough analysis and

presentation of the research findings.

Statistical Treatment of Data

To identify all of the data obtained from survey respondents' responses and to

evaluate all the findings, this study used several softwares: WarpPLS, SPSS and SmartPLS

to run the Structural Equation Modelling (SEM).

 46

Statistical Tools

This particular study used regression analysis with the help of the SPSS application

to examine the proposed hypothesis. P-values are also used in hypothesis testing in order

to determine if the null hypothesis should be rejected. The potential for rejecting the null

hypothesis increases with lowering p values (Bevans, 2020).

To gauge the model's parameters, partial least squares (PLS) were used in this

study. It is appropriate to apply this type of statistical approach since this study involves

the development of a model. It is common for structural equation modeling with partial

least squares to involve two stages in the analysis of collected data. The first involves

examining the measurement model, while the following step requires assessing the

structural model. Using a loadings-driven approach, we demonstrate how to assess

convergent validity. This illustration was created using WarpPLS version 7.0 (Kock, 2020),

an advanced PLS-SEM software tool (Moqbel et al., 2020; Morrow & Conger, 2021).

Reflective latent variables are the focus of this discussion. This study evaluated the

measurement model using PLS-SEM (Cronbach's alpha, loading, composite reliability

(CR), average variance extracted (AVE), and the Structural Evaluation Model).
 47

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Appendix A

IP Registry Form
 57

Appendix B

Ethics Form
 58

Appendix C

Turnitin Result
 59

Appendix D

Survey Questionnaire

Consent Letter
I hereby agree to participate and give my consent in the research study, as I understand
that any information I will share with them if I participate in this study will be kept
completely confidential to the full extent of the law. I understand that any information I
disclose with them if I participate in this study will be kept entirely confidential to the
fullest extent of the law, thus I hereby agree to participate and give my consent in the
thesis research study.

Respectfully,
Dr. Solomon Oluyinka (solomon467@gmail.com)
Ms. Francesca Denise Del Prado (francesca.delprado@dlsau.edu.ph)
Mr. Prince Lesther Bergonia (prince.bergonia@dlsau.edu.ph)

o I give my consent
o I do not give my consent

Number Demographic Characteristics

21 – 25
26 – 30
1 Age 31 – 35
35 and above
2 Gender Female
Male
1000 – 5000
5001 – 10,000
3 Monthly Allowance 10,001 – 20,000
20,001 – 30,000
30,001 – 40,000
40,001 and above
Single
Married
4 Marital Status
Divorced
Separated
Widowed
 60

High School Graduate

College Graduate
5 Highest Educational Attainment Vocational Course
Doctorate
Undergraduate

6 Occupation Employed
Unemployed

This study utilizes a 5-point Likert scale based on the impact of Affiliate Marketing

on Customer Loyalty, which will also include the different factors of affiliate marketing.

The study will focus on these variables, specifically the price comparison, social media

influences, promotion and coupons, perceived value, & loyalty. It added questions that

had been modified based on the significance of several related studies in measuring the

impact of affiliate marketing. It consists of 3 sections as a whole: The first section has a 1

question for respondent privacy. The second section has a total of 8 questions covering the

respondent’s demographic profile. The third section will be measured using a 5- point scale

(1- strongly disagree, 2-disagree, 3-neutral, 4-agree, 5-strongly agree). The third section

also covers the questions that measure the variables related to affiliate marketing and

questions that measure the customer loyalty.

Likert Scale
PRICE COMPARISON 1 2 3 4 5 Source
Price comparison through affiliate
PC1
marketing is objective
I think affiliates provided me to
PC2 compare what I pay to what I might
get from other competitive websites
Affiliate marketers have reasonable
PC3
prices other than marketing platforms
 61

I always check the prices of the

PC4
affiliates to be sure I get the best price
When I’m on a budget, I always
PC5 consider the prices given by the
affiliates online

SOCIAL MEDIA INFLUENCES 1 2 3 4 5 Source

I will most likely recommend a few
SM1
affiliates through social media
I think the social media community
that sponsored affiliates is useful for
SM2
gathering product and service
information
I would encourage friends and
SM3 relatives to relay affiliates when
buying
I prefer to share experiences about
SM4 affiliate's products/services online
with other customers of the website
I feel satisfied with all of my previous
SM5 transactions with products promoted
by affiliates

PROMOTIONS AND COUPONS 1 2 3 4 5 Source

Promotions from affiliate marketers
PAC1 have caused me to buy products and
services I normally would not buy
When I get a promotion from an
PAC2 affiliate marketer, I feel that am I
getting a good deal
Promotion is a huge part of sales for
PAC3
most affiliate marketers
Promotion from affiliates is very
PAC4
important to me
There are a lot of promotions given by
PAC5
affiliates online

PERCEIVED VALUE 1 2 3 4 5 Source

Despite consideration about pay and
rewards, I still think purchasing
PV1
experience with affiliates is very
valuable
 62

Affiliated products are reasonable in

PV2
price
Compared to alternative affiliate
websites, affiliated products are
PV3
promoted and priced fairly for similar
products/services
Comparing what I pay to what I might
get from other competitive websites, I
PV4
think affiliate products provide good
value
Affiliates always exceed my
PV5
expectations in buying

LOYALTY 1 2 3 4 5 Source
I will recommend affiliated products
L1
to other people
I would encourage friends and
L2 relatives to purchase services that are
promoted by affiliates
I would say positive things about
L3
affiliates to other people
I prefer affiliate marketing above
L4
other websites
When I need to make a purchase,
L5 product related to affiliate is my first
choice