Paper Review

International Journal of Retail & Distribution

Management

Effect of consumer relationship

proneness on perceived loyalty program
attributes and resistance to change
Hye-Young Kim Ju-Young M. Kang Kim K.P.
Johnson
BY :
Gunadi Sindoro
Magister Management
Trisakti University

MARKETING RESEARCH ABOUT

CONSUMER BEHAVIOUR AT RETAIL INDUSTRY

Research Background

Relationship

Consumer

Retailer

Research Background
Relationship

Higher
level
of
trust
and
commitment
Allocate higher customer share
Show greater adherence to
marketing requests and policies
as compared to those who are
not

Research Problem
Whether customer loyalty actually results from
participation in loyalty programs (Wright and
Sparks, 1999) and others have found both weak
ties between loyalty programs and customer
loyalty (Cedrola and Memmo, 2010) and other
predictors of loyalty (e.g. merchandise quality,
interaction with associates)
CRP to obtain their loyalty (Yavas and
Babakus, 2009)

Literature Review
CONSUMER RELATIONSHIP PRONENESS (CRP)
Consumer relationship proneness (CRP) is one trait
affecting the relationship marketing outcomes that
retailers strive to achieve (e.g. De Wulf et al., 2001;
Odekerken-Schroder et al., 2003; Parish and
Holloway, 2010).
Demoulin and Zidda (2009), developing their
conceptual framework on the basis of the diffusion
of innovations theory (Rogers, 2003), postulated
that the likelihood of adoption of a new loyalty
program could be explained by customers
perceptions of the program attributes (i.e.
advantages, complexity, and risk).

Literature Review
PERCEIVED LOYALTY PROGRAM ATTRIBUTES and CRP
(PERCEIVED COMPLEXITY)
Relationship-prone consumers may
Perceive lower levels of anxiety and frustration (loyalty
program)
More easily develop commercial friendships
Reciprocate a retailers relational efforts more strongly and
favorably than non-relationship prone consumers (e.g.
Berry, 1995; Bitner, 1995; Hennig-Thurau et al., 2002;
Reynolds and Beatty, 1999).
Further Easy to grasp how a loyalty scheme works, how
points are awarded, and how and when they will receive
tangible benefits because by definition, they are likely to
develop relationships through loyalty programs and thus
have their experiences to draw from (Berry et al., 2002).

Literature Review
PERCEIVED LOYALTY PROGRAM ATTRIBUTES and CRP
(PERCEIVED ADVANTAGES)

Vazquez-Carrasco and Foxall (2006) demonstrated

that consumer relationship proneness directly and
positively affected consumer perceptions of relational
benefits.
Their finding implies that relationship prone
consumers and non-relationship prone consumers
perceive the loyalty programs advantages in
different ways and those relationship prone
consumers are more likely to recognize
relational benefits because of their greater
openness toward any efforts retailers expend to
keep customers (Bloemer et al., 2003).

Literature Review
PERCEIVED LOYALTY PROGRAM ATTRIBUTES and CRP
(PERCEIVED RISK)
One of the factors impeding loyalty program participation
was found to be privacy concerns (Noble and Phillips, 2004;
Van Doorn et al., 2007). Relationship marketing tactics
generally ask the shoppers to divulge personal information
such as their name, address, and often a social security
number. Privacy issues can result from losing anonymity
when a relationship with a retailer is created. Consumers with
low CRP may be unwilling to take part in loyalty programs
because they do not like giving up their anonymity and
privacy by offering personal information and having
companies monitor which items they buy (Noble and Phillips,
2004). In contrast, relationship-prone consumers may be less
reluctant to provide personal information or to question the
retailers use of their personal data (Smith et al., 2003).

Literature Review
RESISTANCE TO CHANGE
Resistance to change was conceptualized based on two facets
(Crosby and Taylor, 1983; Pritchard et al., 1999) :
1. Preference stability; and
2. Resistance to counter persuasion
Preference stability, is concerned with how consistent and
particular an individual is in his or her allegiance to a certain
loyalty program. Crosby and Taylor (1983) demonstrated that two
systems of preference stability exist. One is functional and
consists of selective perceptions to safeguard preferences
and decrease conflict. The other consists of a biased postdecision evaluative process to protect original decisions.
Resistance to counter persuasion deals with how strongly an
individual resists counter-arguments which might highlight the
positive aspects of opposing selections (Dick and Basu, 1994;
Kiesler, 1971).

Literature Review
RESISTANCE TO CHANGE and CRP
Consumer relationship proneness may be related to loyalty
program members resistance to change. A shoppers overall
tendency to seek relationships has an influence on the level of
commitment to that relationship (Storbacka et al., 1994). For
example, Odekerken-Schroder et al. (2003) demonstrated
there is a relationship between CRP and commitment in the
context of beauty retailers. In addition, when it comes to
relationship investment, a higher level of consumer
relationship proneness was found to reinforce the effect of
perceived relationship investment on relationship quality (De
Wulf et al., 2001). In a similar manner, consumer relationship
proneness was found to be positively associated with intention
to remain in a business relationship (Vazquez-Carrasco and
Foxall, 2006).

Literature Review
PERCEIVED LOYALTY PROGRAM ATTRIBUTES and
RESISTANCE TO CHANGE
PERCEIVED COMPLEXITY
Research on loyalty cards suggests that customers
perceptions about loyalty card attributes influence
their decisions (Demoulin and Zidda, 2009) such that:
1.The complexity of a new loyalty card has a
negative effect on consumers probability of
adoption of the card; and
2.Complexity was also found to have a significant
effect on the adoption likelihood of a new loyalty
card.

Literature Review
PERCEIVED LOYALTY PROGRAM ATTRIBUTES
and RESISTANCE TO CHANGE
PERCEIVED ADVANTAGE
In Vazquez-Carrasco and Foxalls (2006) study,
relational benefits were directly and positively
associated with such desirable outcomes as
satisfaction and loyalty. Further, consumers
perceptions of the advantages of a new loyalty card
had an impact on their likelihood of adoption
(Demoulin and Zidda, 2009).

Literature Review
PERCEIVED LOYALTY PROGRAM ATTRIBUTES and RESISTANCE TO
CHANGE
PERCEIVED RISK
As noted previously, privacy issues are one of the dominant risks to consumers
adoption and use of loyalty cards (Demoulin and Zidda, 2009). Some customers
may be reluctant to divulge information especially when it comes to unique,
identifying information (Phelps et al., 2000). Although not directly related to
loyalty programs per se, previous researchers have shown that perceived
privacy and perceived security with regard to the handling of consumers
personal data were antecedents of relationship stability (Flavian and Guinalu,
2006). Customers may consider privacy breaches by loyalty programs as a noneconomic cost, resulting in diminished adoption of loyalty programs (Noble and
Phillips, 2004). In particular, this connection between cost and privacy may
place shoppers sense of privacy, sense of modesty, and sense of self at risk
(Noble and Phillips, 2004). Leenheer et al. (2007) demonstrated that privacyrelated concerns were a deciding factor in dividing loyalty card members from
nonmembers and showed that privacy concerns negatively affected loyalty card
membership. In addition, Demoulin and Zidda (2009) found that perceived risk
negatively affected adoption of loyalty card programs.

Literature Review
(Hypothesis)
H1 : Consumer relationship proneness has a negative effect on
perceived complexity of a loyalty program.
H2 : Consumer relationship proneness has a positive effect on
perceived advantage of a loyalty program.
H3 : Consumer relationship proneness has a negative effect on
perceived risk of a loyalty program.
H4 : Consumer relationship proneness has a positive effect on
resistance to change.
H5 : Perceived complexity of a loyalty program has a negative
effect on loyalty program members resistance to change.
H6 : Perceived advantage of a loyalty program has a positive
effect on loyalty program members resistance to change.
H7 : Perceived risk of a loyalty program has a negative effect on
loyalty
program members resistance to change.

Variable Declaration
Independent Variable
Relationship Proneness
Mediating/ Intervening Variable
Perceived Complexity :
the degree to which the loyalty
program system is perceived as difficult to understand and to
use.
Perceived Advantage :
the degree to which the loyalty
program provides benefits customers can earn and appreciate
Perceived Risk
: the degree of risk associated with privacy
invasion
issues that may occur while participating in
the
loyalty program.

Dependent Variable
Resistance To Change

Conceptual Framework

Sample & Data

Data were collected using an online survey with
the assistance of a marketing research company.
Participants were 294 members of apparel
retailers loyalty programs.
Participants were asked to indicate one apparel
retailers loyalty program that they took part in.
Next, they completed a questionnaire making
reference to that loyalty program. To reduce
measurement artifacts, dependent variables were
assessed prior to their predictors.

Measurement

The measurement items for

consumer relationship
proneness were adopted
from De Wulf et al. (2001).
Measurement items for
perceived complexity and
advantage were adopted
from Taylor and Todd (1995)
and measures for perceived
risk were adopted from
Leenheer et al. (2007).
Measures for resistance to
change construct originated
from Pritchard et al. (1999).

Data Analysis

01/28/15

Findings
1. CRP was found to have a significant effect on
perceived advantage and resistance to change.
2. Perceived advantage revealed a significant
positive effect on resistance to change.

Managerial Implication
Customer retention Strategy :
Emphasize the various advantages /
benefits of the program, by:

Price offs
Special services
Personalization
Customized products
Frequent shopper program
Community

Limitation & Suggestion for Future

Research
One point in time. Need a longitudinal study :
interrelationships among the variables & how they
might change over time
keeping track of shifts in customer relational behavior
re. loyalty programs, examining customers perception
after one/two year (loyalty program participants
relational behavior & attitudinal loyalty)

Does not include antecedents of relationship

proneness (product involvement, media influence,
price/product or service quality consciousness,
brand image consciousness shopping orientation,
social situational, personal moderator)